2024 Semiannual Report
Guo Jingjing
Purcotton
Brand Ambassador
of
Winner Medical Co., Ltd.
Semi-Annual Report
Stock code: 300888
Guo Jingjing
Brand Ambassador of Purcotton
Important Notes, Contents, and Definitions
2024 Semiannual Report
Section Ⅰ Important Notes, Contents, and Definitions
The Board of Directors, the Board of Supervisors and directors, supervisors and senior management of Winner Medical hereby guarantee that
the statement in this Semi-annual Report is authentic, accurate and complete without false or misleading information or material omission and
will assume all the legal liabilities, individually and jointly.
Li Jianquan, the head of the Company, Fang Xiuyuan, the head of accounting work, and Zhao Yan, the head of accounting body (accounting
manager), guarantee the authenticity, accuracy, and completeness of the financial report in this semi-annual report.
All directors of the Company have personally attended the board meeting for reviewing this semi-annual report.
The forward-looking contents in this semi-annual report, such as the future development strategy and performance planning, are the goals set
by the Company, which are planned matters. The achievement of the goals depends on many factors, including unexpected market change. So
these contents are not the Company’s profit forecast for the next year, or shall it 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 planned profit distribution deliberated and approved by the board of directors is as follows: taking 582,329,808 as the radix, the Company
will distribute cash dividends of 4.00 yuan (tax included) and 0 bonus share (tax included) to all shareholders for every 10 shares, and no
capital reserve will be conversed to share capital.
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Contents
Section Ⅰ Important Notes, Contents, and Definitions ................................................................................................................ 3
Section Ⅱ Company Profile and Major Financial Indicators ...................................................................................................... 8
Section Ⅲ Management Discussion and Analysis ................................................................................................................... 13
Section Ⅳ Corporate Governance............................................................................................................................................ 53
Section V Environmental Protection and Social Responsibility ............................................................................................... 58
Section VI Important Matters ................................................................................................................................................... 70
Section Ⅶ Changes in Shares and Shareholders ..................................................................................................................... 77
Section Ⅷ Information Related to Preferred Shares .............................................................................................................. 84
Section Ⅸ Information Related to Bonds ................................................................................................................................ 85
Section Ⅹ Financial Report ...................................................................................................................................................... 89
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2024 Semiannual Report
Document Catalog
(I) Financial statements containing the signatures and seals of the person in charge of the Company, the accounting head, and the person in
charge of the accounting body (accounting manager).
(II) The originals of all Company documents and announcements publicly disclosed during the reporting period.
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Definitions
Term Refers to Definition
Company, Winner Medical Refers to Winner Medical Co., Ltd.
Winner Group Refers to Winner Group Limited, a controlling shareholder of the Company
Purcotton Refers to Shenzhen Purcotton Technology Co., Ltd., a wholly-owned subsidiary of the Company
Reporting period Refers to From January 1, 2024 to June 30, 2024
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2024 Semiannual Report
Guo Jingjing
Brand Ambassador of Purcotton
Company Profile and Major Financial Indicators 7
Section Ⅱ Company Profile and Major Financial Indicators
I. Company Profile
Stock abbreviation Winner Medical Stock code 300888
Stock exchange Shenzhen Stock Exchange
Company name in Chinese Winner Medical Co., Ltd.
Chinese abbreviation of the company (if any) Winner Medical
Company name in foreign language (if any) Winner Medical Co., Ltd.
Company short name in foreign language (if any) Winner Medical
Legal representative of the Company Li Jianquan
II. Contact Information
Secretary to the Board of Directors Securities affairs representative
Name Chen Huixuan Liu Yanxiang, Xu Jia
F42, Building 2, Huilong Business Center, Shenzhen North F42, Building 2, Huilong Business Center,
Contact address Railway Station Area, Minzhi Subdistrict, Longhua District, Shenzhen North Railway Station Area, Minzhi
Shenzhen City Subdistrict, Longhua District, Shenzhen City
Tel 0755-28066858 0755-28066858
Email investor@winnermedical.com investor@winnermedical.com
III. Other Information
1. Contact Information
Whether the Company’s registered address, office address and postal code, company website and email were changed during the reporting
period
□ Applicable √ Not applicable
There is no change in the Company’s registered address, office address and postal code, company website and email during the reporting
period, as shown in 2023 annual report.
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2024 Semiannual Report
2. Information Disclosure and Keeping Place
Whether information disclosure and the place where the semi-annual report is kept were changed during the reporting period
□ Applicable √ Not applicable
The name and URL of the stock exchange website and media for publishing the semi-annual report, and the place where the semi-annual report
is kept were not changed during the reporting period. See the 2023 Annual Report for details.
3. Change of Registration
Whether the registration status was changed during the reporting period
□ Applicable √ Not applicable
There were no changes in the Company’s registration during the reporting period. See the 2023 Annual Report for details.
4. Other Relevant Information
Whether other relevant information was changed during the reporting period
√Applicable □ Not applicable
The Company held its 18th Meeting of the Third Board of Directors on December 19, 2023 and the 1st Extraordinary General Meeting of
Shareholders in 2024 on January 8, 2024. During these meetings, the Board approved the Proposal on the Repurchase and Cancellation of
Remaining Shares in the Special Securities Account, as well as the Proposal on the Amendment of the Articles of Association of the Company
and Change of Business Registration. Specifically, the Company reallocated 6,094,659 shares remaining in the repurchase account - after
excluding the Phase I Employee Stock Purchase Plan - (including the reserved portion) from the original purpose of “Supporting Employee
Stock Purchase or Equity Incentives” to “Reducing the Company’s Registered Capital Through Cancellation”. Following this cancellation, the
total share capital of the Company decreased from 594,387,367 shares to 588,292,708 shares. For more details, please refer to the
Announcement on the Notification to Creditors on the Cancellation of the Remaining Repurchased Shares and the Reduction of the Registered
Capital (Announcement No. 2024-002), which was disclosed on the CNINF on January 8, 2024.
The Company held its 23rd Meeting of the Third Board of Directors on July 26, 2024 and the 2nd Extraordinary General Meeting of
Shareholders in 2024 on August 12, 2024. During these meetings, the Board approved the Proposal on the Cancellation of the Remaining
Shares in the Repurchase of Dedicated Securities Accounts, as well as the Proposal on the Amendment of the Articles of Association of the
Company and Change of Business Registration. Specifically, the Company reallocated 5,962,900 shares in the repurchase account from the
original purpose of “Supporting Employee Stock Purchase or Equity Incentives” to “Reducing the Company’s Registered Capital Through
Cancellation”. Following this cancellation, the total share capital of the Company decreased from 588,292,708 shares to 582,329,808 shares.
For more details, please refer to the Announcement on the Notification to Creditors Regarding the Cancellation of All Repurchased Shares and
the Reduction of the Registered Capital (Announcement No. 2024-050), which was disclosed on the CNINF on August 13, 2024.
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IV. Major Accounting Data and Financial Indicators
Whether the Company needs to retroactively adjust or restate the accounting data of the previous years
□Yes √No
Year-on-year increase/decrease in
Current reporting period Same period last year
this reporting period
Revenue (yuan) 4,033,505,104.33 4,266,838,038.66 -5.47%
Net profits attributable to shareholders of listed
384,150,379.21 681,617,022.69 -43.64%1*
companies (yuan)
Net profits attributable to shareholders of the
listed company after deduction of non- 326,915,114.82 550,058,459.19 -40.57%
recurring profits and losses (yuan)
Net cash flow from operating activities (yuan) 193,333,516.76 158,178,712.89 22.22%2*
Basic EPS (yuan/share) 0.6568 1.1599 -43.37%
Diluted EPS (yuan/share) 0.6568 1.1599 -43.37%
Weighted average return on net assets 3.31% 5.71% -2.40%
Year-on-year increase/decrease at
End of the reporting period End of the previous year
the end of the reporting period
Total assets (yuan) 16,568,835,512.57 17,112,022,449.97 -3.17%
Net assets attributable to shareholders of listed
11,431,205,386.28 11,533,224,328.00 -0.88%
companies (yuan)
Note: 1* Net profit attributable to the parent company decreased by 43.64% compared to the same period last year. The primary reasons for
this decline are: (i) revenue from infection protection products decreased from RMB 730 million in the first half of 2023 to RMB 170 million
in the first half of 2024; (ii) the gross profit margin for these products dropped from 53.3% in the first half of 2023 to 20.2% in the first half of
2024.
2* Net cash flow from operating activities increased by 22.22% compared to the same period last year, mainly due to the continuous
improvement of the Company’s working capital management.
V. Differences in Accounting Data under Domestic and Foreign Accounting Standards
1. The Difference Between Net Profits and Net Assets in Financial Statements Disclosed According to the International Accounting
Standards (IAS) and Chinese Accounting Standards Simultaneously
□ Applicable √ Not 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. The Difference 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.
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2024 Semiannual Report
VI. Non-Recurring Profit and Loss Items and Amount
√Applicable □ Not applicable
Unit: yuan
Item Amount Description
Profits and losses on the disposal of non-current assets (including the write-off part
-2,531,199.34
of the provision for asset impairment)
Government grants recognized in the current period’s profit or loss (excluding grants
which are closely related to the Company’s regular business operations, aligned with
16,329,769.68
national policies, meeting specific criteria, and have a continuous impact on 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 that from the disposal of financial assets and
48,692,022.79
liabilities, excluding effective hedging operations related to the Company’s regular
business operations
Income and expenditure other than those mentioned above 4,384,196.12
Less: Amount affected by income tax 10,326,267.54
Amount of minority shareholders’ equity affected (after tax) -686,742.68
Total 57,235,264.39
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
No definition of non-recurrent profit and loss items enumerated in the “Interpretative Announcement No. 1 on Information Disclosure of Public
Securities Issuing Companies - Non-recurrent Profits and Losses” as recurring profit and loss items during the reporting period.
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Management Discussion and Analysis
Global spokesperson for Purcotton
Home Textiles and Home Apparel
Zhao Liying
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2024 Semiannual Report
Section Ⅲ Management Discussion and Analysis
I. Main Business of the Company during Reporting Period
Winner Medical is a health enterprise that develops both medical and consumption products under its brands of “Winner” and “Purcotton”.
The Company has consistently adhered to the core operating principles of “quality over profit, brand over speed, and social value over corporate
value”. With the evolution of domestic and international markets, the Company has transformed from a sole manufacturer of medical
consumables into a diverse enterprise. It now includes traditional wound care and dressings, advanced wound care, operating room consumables,
wet and dry cotton tissues, sanitary napkins, as well as infant and children’s apparel and products, demonstrating its commitment to the health
and wellness sectors.
Traditional wound care and Medical cotton, gauze, bandages, etc.
wound dressing products
Advanced wound care Silicone dressings, alginate dressings, superabsorbent
dressing products dressings etc.
Operating room
consumables Surgical gloves, surgical packs, surgical gowns, etc.
Medical consumables Winner Medical
Infection protection Masks, protective clothing, isolation gowns, etc.
Oral and nasal cavity, medical beauty, personal care,
Health & 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 Purcotton
goods
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. Its primary product lines include traditional
wound care and wound dressings, advanced wound care, operating room consumables, infection protection, and health and personal care.
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 received CE certification from the European Union, FDA approval from
the United States, and certification from Japan’s Ministry of Health. This has enabled us to export to countries throughout Europe, the U.S.,
and Japan. 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,
“Winner” epidemic prevention products have made their way into both hospitals and the civilian market. Their commitment to not raising
prices, coupled with high quality of products, has earned widespread praise both at home and abroad, from governments entities and the public
alike. As a result, its brand reputation and popularity have significantly increased.
Winner Medical prioritizes market demand by staying tuned to clinical and end-user needs. By leveraging R&D along with innovation as the
driving force, the Company continually improves its product portfolio. 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 reduce nosocomial infection more effectively than reusable medical products. With increasing emphasis on
nosocomial infection by the state and hospitals, as well as 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 ODM and import substitution space is huge. The Company’s technical level in the
field of advanced wound dressings has been in the forefront of the industry, and is expected to become the core products for the development
of Winner Medical.
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2. Healthy Consumer Goods Section
Purcotton originated from the development of pure cotton spunlace non-woven fabric, positioning itself as a brand pursuing “medicine close
to life, Purcotton care for health”. Its core competitive advantage combines “Medical background, Purcotton philosophy, Quality in our DNA”,
making it a health-centric lifestyle brand. The product lineup includes wet and dry cotton tissues, sanitary napkins, infant and children’s apparel
and products, adult apparel, and various nonwoven and woven products. Purcotton promotes a lifestyle centered around comfort, health, and
environmental friendliness, opting for cotton instead of synthetic fibers to avoid chemical irritation. It provides comprehensive solutions for
various everyday situations, boasts a strong reputation among users, and has established a distinct 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. The main raw material of the core products of Purcotton is high-quality cotton sourced
worldwide to control product quality and safety from the source. All kinds of pollution sources are strictly controlled in the production process,
following the high standard of medical consumables. Disposable underwear, newborn baby clothes and other close-fitting clothing are packaged
with medical grade sterilization to further ensure the safety and environmental compatibility of the products. Purcotton products cover multiple
consumer scenarios, 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.
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2024 Semiannual Report
(1) 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 goods segment are divided into wet and dry cotton tissues, sanitary napkins, other nonwoven 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:
Product category Main Purpose Product Image of Some Products
Medical sterile-grade wound care
Medical gauze sheets available in multiple specifications
Traditional wound care For absorbing wound exudate,
and wound dressing dressing wounds, and sports Medical cotton, gauze, bandages, etc.
products protection
Medical-grade ingredients ensure gentleness and
safety
For creating a moisture balance at Silicon treatment strip (1pc/box)
the wound interface to optimize its
High-end wound dressing benefits for wound healing, reduce Silicone dressings, alginate dressings,
products the frequency of dressing superabsorbent dressings etc.
replacement, and reduce secondary
damage
Operating room For preventing infections in the Surgical gloves, surgical packs,
consumables operating room surgical gowns, etc.
For occupational protection of Masks, protective clothing, isolation
Infection protection
medical staff and patient isolation gowns, gloves, foot straps, hats, etc.
For wound cleaning and Oral and nasal cavity, medical beauty,
Health & personal care
disinfection, and daily health care personal care, nursing care, etc.
For health management to meet Injection and puncture products, test
Other products
their medical needs kits, etc.
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The main categories and images of some products under the Company’s healthy consumer goods section are as follows:
Product Category Product Image of Some Products
Wet and dry cotton tissues Cotton tissues, wet tissues etc.
Sanitary napkins Sanitary napkins, disposable period panties etc.
Other non-woven products Facial mask, makeup cotton, cotton diapers, disposable underwear, etc.
Baby’s leisure wear, outing costume, underwear, bath towels,
Baby clothing and supplies
handkerchiefs and quilts, etc.
Textiles and Ho me Apparel, Zhao Liy ing
Global s pokesperson for Purcotton Home
Adult apparel Adult’s leisure wear, outing costume, underwear, footwear, etc.
Other woven products Bedding, toiletries, etc.
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2024 Semiannual Report
(2) 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 in line with 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. Purchasing needs are integrated
with R&D, product specifications, and quality standards to establish technical benchmarks. The purchasing strategies formulated encompass
plans, supplier selection, commercial negotiations, and order allocation plans based on supplier performance evaluations. In pursuing a
sustainable supply chain ecosystem, our collaborative suppliers are dedicated to achieving low carbon emissions, cost-effectiveness,
transparency, and social responsibility across product development, manufacturing, procurement, and other areas.
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 for materials or categories conducive to group-wide adaptability and scale effects are employed. 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 outlined in the procurement management system.
2) Procurement Control Process
The Company has established several key control points in the procurement process to ensure clear responsibilities and rigorous approvals,
guaranteeing reliable product quality and stable supply. These controls include the development and approval of the annual procurement plan,
procurement strategy guidelines, hierarchical classification management of purchasing, order allocation management process, comprehensive
bidding management process for non-commercial groups, a price approval process, and a procurement approval process for strategic materials
such as cotton and cotton yarn. Additionally, procurement reviews and other related steps are included in this framework. Meanwhile, by
signing the Integrity Commitment Agreement, the Company works with suppliers to resist corruption, create an open, transparent, self-
disciplined, and mutual trust cooperation mechanism, advocate the procurement principle of openness, transparency, and quality priority, and
create a sustainable supply chain ecosystem with suppliers.
3) 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, we establish a framework that encourages competition among multiple suppliers, ensuring supply stability and
mitigating risks. At the same time, we follow the Company’s supplier evaluation criteria to select vendors to meet our requirements, aiming
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 inform the development of cooperation programs and order allocation,
focusing on cost control, improving efficiency, and reducing supply risks.
4) Supplier Management Process
I 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.
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II Performance management: Adhere to the Supplier Performance Management System, and 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.
III 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.
IV 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 Chains
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 the product process to minimize energy usage, 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 streamline the information flow and decision-making process across all upstream and downstream departments through
data integration and visualization platforms. We're continuously improving our smart manufacturing, lean production, and agile delivery
capabilities. Our goal is to strike the right balance between meeting front-end demand and ensuring timely supply and delivery. In the process
of order fulfillment, we match capacity according to the characteristics of different demands and in combination with 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.
I. 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 remains almost zero. For OEM customer orders, as the market
constantly reduces the delivery cycle, it is common now to combine MTO & MTS production modes.
II. 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 an order.
III. 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 remains almost zero.
IV. In the Assemble to Order mode, the components required to produce finished products are stocked in advance. When the customer places
an 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.
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2024 Semiannual Report
③ Sales mode
The Company sells products through multiple channels. The main sales channels are shown in the following figure:
Third-party B2C platforms, such as Tmall, JD.com and
Online channels 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 e-commerce
Online channels platforms platforms
Official shopping mall and Wechat mini
programs of Purcotton
Healthy 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 Winner Medical and Purcotton in a coordinated way. With “caring for health and life, making
a better world” as its vision, Winner Medical takes industry-leading product technology and rigorous product quality as the cornerstone of its
brand value, while its marketing strategies heavily rely on brand reputation and consumer word-of-mouth. Purcotton, known for its pure cotton
products, uses distinct strategies to strengthen its brand. By integrating various 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”. This approach not only helps
enriches the meaning of Purcotton brand but also boosts awareness and loyalty among consumers.
(3) 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.
In October 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 the green economy. We will significantly improve the quality and
efficiency of economic and social development and provide a 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, and 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 water 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 concepts is also driving the transformation and upgrading of the consumer
goods industry.
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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 complete industrial chain that covers cotton
procurement, R&D, production, and direct export. It is also among the first to implement 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 the
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 in return 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 70 th 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 in
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 “Medical Device Business” stipulated in the No. 4 Guideline of Shenzhen
Stock Exchange for Self-regulatory of Listed Companies - Information Disclosure by Growth Enterprises:
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. Analysis of Core Competitiveness
1. Advantages of Business Philosophy and Corporate Culture
Winner Medical is committed to the mission of “caring for health and life, making a better world”. It has taken the company and the medical
dressing industry from modest beginnings to global presence, evolving from original equipment manufacturing to an independent brand that
has gained recognition and loyalty from both clients and consumers. After 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, advanced wound dressings, and operating room consumables. Its goal is to become a leading player in this field by offering
comprehensive solutions through a strategy of “internal growth + external growth”. In the retail sector, the Company continuously introduces
consumers’ favorite home personal health care products, fostering a sense of health guardianship and companionship.
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2024 Semiannual Report
Guided by its vision of “changing the world with pure cotton”, Purcotton advocates a lifestyle centered around pure cotton, emphasizing
comfort, health, and environmentally friendliness in all aspects of daily life. The brand aims to convey values 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. The company aims to gradually replace chemical fibers with natural fibers, maximizing the value and environmental benefits of
cotton fibers, while pursuing a path of low carbon, environmental friendliness 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, social value 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. By adhering to core business principles of “hard work, self-criticism, exploration and innovation, and sustainable
development”, the Company consistently provides superior solutions and service experiences to customers. At the same time, it actively
contributes to community development, demonstrating its commitment to social responsibility. At the organizational level, we prioritize
building process-oriented structures while establishing an integrated organization to support cohesive business operations. We focus on
enhancing organizational efficiency and capacity to elevate business value in the long term. 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 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 silicone gel foam dressing and foam dressings successfully developed and launched by the Company have been awarded China’s
registration certificate for Class II and Class III medical devices respectively. Building on the successful research and mass production of
several core foundational materials, the Company has enhanced its technical framework for the second-generation high-end wet wound dressing
product line. The silicone gel foam dressings have been upgraded to their fourth generation and successfully launched. Additionally, the
hydrophilic fiber dressings have obtained CE registration in compliance with the latest EU MDR regulations, while the medical hydrogel
wound dressings have achieved mass production and have been successfully launched. The Company independently developed the pure cotton
spunlace non-woven fabric 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 Company focused on the development of core basic
materials for the application of operating room consumables such as surgical gowns, isolation gowns, surgical towels and wipes. This effort
aims to enhance the comfort of the products, reduce the cost of production of the products, and further enhance the market competitiveness of
the products. The Company was invited to participate in the formulation of many national standards and industry standards, including the
performance requirements of pure cotton non-woven surgical dressings, and technical specifications for contact layer dressings and masks for
children. In the area of production and research, 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 non-woven fabrics. In June 2023, the Company and Wuhan Textile University jointly built a comprehensive
technological innovation platform for advanced fiber materials in Hubei Province. This initiative aims to facilitate industrial incubation, and
complete the in vitro and in vivo biological evaluation of a new series of artificial blood vessels with high patency rate early, aiming to break
the monopoly of artificial blood vessels abroad, and promote domestic alternatives. 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 field of consumer products, the Company has developed pure cotton tissues, pure cotton wet tissues, sanitary pads with pure cotton
surfaces, 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 soft towels (GB/T 40276-2021), which requires that the fiber
composition and content of soft towels 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 the 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. The
Company’s core categories - cotton tissues and wet tissues, sanitary napkins and gauze products - have all been certified as green products.
After three years of research and development, the Company has become an industry leader by introducing a pioneering softening technology
that eliminates the need for chemical softeners. This innovation enhances the softness of core cotton tissue products while preserving the natural
softness of cotton fibers, making them more eco-friendly, sustainable, and natural.
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As of June 30, 2024, the Company obtained 125 patents for inventions, 792 patents for utility models, and 422 design patents in China; and
obtained 29 patents for inventions and 6 patents for utility models overseas. The Company was regarded as a “Leading Enterprise in
Independent Innovation” by the Shenzhen Municipal People’s Government, and a “Shenzhen Enterprise with Intellectual Property Advantages”
by the Shenzhen Administration for Market Regulation.
3. Advantages of Quality Control
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 v alue”. In this
context, the quality policy of “Rigorous work, strict compliance with laws and regulations, and continuous improvement 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 Shenzhen Winner 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 a 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 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 can 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 environmentally friendly weaving and finishing process. To ensure that its products are
ecologically safe, no fluorescent brighteners are added. Some of its products are OEKO-TEX Standard 100 certified. Some nonwoven products
have passed the testing performed under 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, operating
room consumable products, 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 strips for chronic wounds that are difficult to heal, which 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, cotton-lined masks 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 medical surgical
masks, saline cleaning pads, hydrocolloid band-aids and medical masks to consumers through portable, sterilized packages. etc., applying these
professional healthcare products and services in daily home care.
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2024 Semiannual Report
(2) Healthy consumer goods
The Company’s healthy consumer goods consist of nonwoven consumer goods and textile consumer goods. Nonwoven consumer products
mainly include wet and dry cotton tissues, 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, and 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,
aiming to provide consumers with healthy, comfortable and environmentally friendly consumer goods. Among all, cotton tissue is the
pioneering product in the industry, which can partially replace household paper. Pure cotton tissues are made of degradable cotton after physical
processing. There is 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. For pure cotton wet tissues 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 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 provides
services for world-renowned medical supplying 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, focusing on natural cotton as its primary raw material and adheres to the principle
of “quality first”. The Company is committed to continuous innovation to provide consumers with comfortable, healthy, and environmentally
friendly all-cotton products across various categories. This commitment has garnered the recognition and trust of over 56 million members.
Upholding the brand philosophy of “peace of mind, happiness, and sustainability”, Purcotton has innovatively developed three core products
- 100% cotton tissues, Nice Princess sanitary napkins, and BBNice cotton diapers - starting from a single cotton flower. This initiative has
expanded into diverse categories, including personal care, household cleaning, infant care, clothing, and lifestyle products, creating a strong
identity for “new Chinese products” that are recognized for their high quality. Purcotton has established a formidable reputation in the maternal
and infant sector as well as the daily necessities market, effectively creating competitive barriers and enhancing product value.
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 have 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 mall 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.
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(2) Advantages of offline channels
In the medical consumables sector, as of the end of the first half of 2024, the Company’s products have been extensively integrated into
domestic medical institutions, reaching a network of 190,000 retail pharmacies. Our customers and distributors span over a hundred countries
and regions in the international market, including Europe, Japan, and the United States. Our business model encompasses a variety of
approaches, such as direct sales under private brands, distribution, and OEM/ODM partnerships. Leveraging years of product leadership and a
strong reputation in the industry, we have built a robust portfolio of high-quality customer assets.
In the healthy consumer goods section, as of June 30, 2024, Purcotton has opened 444 offline stores (including 84 franchisees) in more than
100 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 store image and enhance 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 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 has set up dedicated sales teams to cover the bulk purchase or
customized purchase needs of corporate clients. Purcotton also strives to start overseas market layouts by cooperating with local distributors.
(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 a form, the convenience of online channels and
the consumer experience of offline channels can complement each other. Having a deep insight into the trend of online and offline omnichannel
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 with further product information and service experience. Traffic flow can be directed between the two kinds of channels, so
online and offline traffic can be effectively obtained. As of June 30, 2024, there were more than 56 million of domain-wide Purcotton users,
including over 29 million registered members of its private platforms (14 million store registered members, and over 15 million registered
members of its official website and apps).
7. Advantages of Full Industrial Chain
Adhering to the business philosophy of “quality over profit”, the Company constantly improves its product quality, and the ability of cost and
delivery management, building a full industrial chain with advantages from R&D, production, and sales. With eleven manufacturing
branches/subsidiaries, the Company distributes a wide range of high-quality medical consumables and healthy consumer goods worldwide
each year. Among them, Winner Medical (Jingmen), established in 1995, covers an area of 67,000 square meters and is the primary site of
Purcotton baby products, clothing, and medical abdominal pads. Winner Medical (Yichang), established in 1999, operates with 137 advanced
air-jet looms and serves as the primary production base for raw materials. Winner Medical (Tianmen), founded in 2000 and spanning an area
of 150,000 square meters, specializes in producing pure cotton spunlace non-woven fabrics, cotton soft towels, medical dressings, and medical
protection products. It serves as a key domestic production base for pure cotton spunlace non-woven fabrics and medical gauze. Established in
2001, Winner Medical (Jiayu) covers an area of 93,000 square meters and owns disposable travel, cleaning and disinfecting and beauty care
product series based on cotton. Winner Medical (Chongyang) was established in 2001 and covers an area of 140,000 square meters, and is the
main force in the production of gauze wound dressings and disposable surgical combination kits, etc. Winner Medical (Huanggang),
established in 2005 and covering an area of 550,000 square meters, is the primary site for the production of pure cotton spunlace non-woven
fabric, cotton tissues, sanitary napkins and masks, and advanced dressing products. Established in 2017, Winner Medical (Wuhan) covers a
combined area of approximately 467,000 square meters in Phase I and Phase II, introducing electron beam sterilization and international
modern cotton spunlace production lines. 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 a 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 the future, the Company will
continue to combine the construction of smart factories, boldly explore and practice in the areas of intelligent manufacturing and intelligent
logistics, and gradually realize the excellence of smart manufacturing.
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2024 Semiannual Report
III. Analysis of Main Business
1. Business Analysis
Winner Medical focuses on two main sectors: medical consumables and healthy consumer goods. Having shaken off the impact of the public
health emergencies, we envision 2024 as the dawn of a new era for Winner Medical. Guided by our three core operational principles -
prioritizing quality over profit, brand over speed, and social value over corporate value - we remain committed to our strategic directive of
“leading products with operational excellence”. This approach allows the company to realign itself on a path of normalized growth and upward
trajectory.
Due to the impact of the high base brought by infection protection products (RMB 620 million) in the first quarter of last year, the Company’s
revenue in the first half of 2024 was RMB 4.03 billion, down by 5.5%; net profit attributable to shareholders of listed companies was RMB
380 million, and net profit after extraordinary gains and losses were RMB 330 million, down by 43.6% and 40.6%, respectively. The public
health events had almost no impact on the Company’s revenue base since the second half of 2024. The revenue for the second quarter
reached RMB 2.12 billion, reflecting an 11.0% year-on-year increase, indicating that revenue is expected to enter a positive growth
cycle.
(1) Medical consumables business: the effects of the high base are gradually diminishing, and the development of the core categories is
accelerating
The medical consumables business saw rapid growth during the public health crisis, and after it ended, the Company underwent a series of
significant adjustments in 2023. These included strengthening its product mix, managing its inventory of infection protection products, and
recruiting talent in key areas. Compared to 2019, the Company’s medical consumables business has reached new heights in product variety,
distribution capabilities, and brand recognition. Our medical business strategy for 2024 is clearly defined and executed decisively based on
this solid foundation. We are steadily progressing along this established strategy, with positive trends in operational development.
In the first half of 2024, the medical sector generated a revenue of RMB 1.72 billion, marking a year-on-year decline of 20.9%, and accounting
for 43% of the Company’s overall revenue. In the second quarter alone, revenue reached RMB 860 million, representing a year-on-year
increase of 6.6%, reversing the quarterly revenue growth rate. Excluding the fluctuation in infection protection products, the conventional
medical consumables business reported a revenue of RMB 1.55 billion in the first half of the year, marking a 7.5% year-on-year increase.
Overall, the development remains stable and positive. Among them, the development of the core category accelerated: advanced dressing and
health personal care business achieved revenue of RMB 380 million and RMB 180 million respectively in the first half of the year, up by 34.1%
and 56.2% respectively, demonstrating positive growth momentum. Innovative R&D drives product development. By leveraging various
market opportunities in advanced dressings, the Company plans to increase investment in both R&D and marketing. This approach aims to
enhance the quality and productivity of advanced dressings, positioning us to lead industry advancements and expand our presence on the
international stage. As of the end of the reporting period, we hold 873 patents in the medical consumables segment and 388 medical product
registrations (including 25 registrations of Category III medical products).
In terms of channels, in the first half of 2024, the Company continued to enhance its marketing initiatives through various means and actively
expanded its marketing channels. Besides, the Company has moved past the impacte of public health events, and its medical business channels
have returned to the stable income structure. During the reporting period, foreign sales channels generated a revenue of RMB 790 million,
marking a 14.1% increase year-on-year. This accounted for 46% of the total income of the medical sector, demonstrating Winner Medical’s
strong foothold in the international market. Domestic hospital channels have steadily expanded, and the C-end business, especially cross-border
e-commerce, has made a breakthrough: by the end of the reporting period, the Company has obtained nearly 17 million followers on the
domestic e-commerce platform, built a healthcare category matrix, and seized the new development trend of medical consumer goods. The
Company has been gained access to nearly 190,000 domestic leading offline pharmacies, and continues to lead in the ranking of core single
items on the cross-border e-commerce platform (Amazon).
(2) Healthy consumer goods business: Pure cotton products build differentiation and core popular products lead to growth
In recent years, the consumer goods sector has proven resilient, achieving growth in every performance period. Purcotton has consistently
strengthened its internal capabilities, maintaining a leading market share in key product categories, improving channel management, expanding
its membership base, and enhancing brand perception. As we move into 2024, the Company is dedicated to continuous improvement. We focus
on strategic product offerings, elevating our core rankings through research and development innovations and integrated marketing. On the
distribution side, we plan to optimize and accelerate our brick-and-mortar store expansions while increasing our presence online and enhancing
operational capabilities. To boost profitability, Purcotton is actively improving margins through new product iterations, controlled discounting,
cost reduction strategies, and refined operational management. In the first half of 2024, Purcotton realized a revenue of RMB 2.28 billion, an
increase of 10.6% year-on-year, accounting for 57% of the Company’s overall revenue; of which the second quarter realized a revenue of
RMB 1.24 billion, an increase of 13.8% year-on-year, and the overall development maintains a strong upward momentum.
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In terms of products, Purcotton tries to build a differentiated product matrix around “one cotton, one fiber”. During the reporting period,
nonwoven products and woven products contributed revenue of RMB 1.19 billion and RMB 1.09 billion, respectively, with respective year-
on-year increases of 14.8% and 6.3%. The Company has enhanced communication with consumers, effectively promoted the benefits of cotton
soft towels, and expanded new product use scenarios. In the first half of the year, sales of our core products—dry and wet cotton tissues—
drove significant category growth, achieving a revenue of RMB 680 million, a 24.8% year-on-year increase. Operating revenues for
sanitary napkins and adult apparel reached RMB 320 million and RMB 440 million, representing year-on-year growth of 7.6% and 8.9%,
respectively. Additionally, wet and dry cotton tissues and sanitary napkins experienced year-over-year growth of 28% and 16% in the second
quarter. By the end of the reporting period, Purcotton had accumulated 501 patents of various types through R&D and innovation, enriching
product categories and improving product competitiveness.
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-driven e-commerce platforms, as well as its 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, Purcotton achieved deep integration of multiple channels, with platforms complementing each other. As of
the end of the reporting period, there were approximately 56 million members across all domains, an increase of 7.0% from the end of last
year. Online channels focus on new products and popular matrix, strengthen mutual penetration between categories, and strive to improve the
conversion rate of new products and the repurchase rate of former customers. During the reporting period, the online channel achieved a
revenue of RMB 1.38 billion, up by 11.1% year-on-year, among which the traditional third-party e-commerce platform increased by over 15%,
and the interest-driven e-commerce platform achieved breakthrough growth (for example, TikTok increased by nearly 80% year-on-year). The
development of offline stores has been accelerated, and the profitability has returned to that of 2019. During the reporting period, offline stores
realized a revenue of RMB 700 million, an increase of 8.9%. By the end of Jun 2024, there were 444 offline stores (including 360 direct stores
and 84 franchise stores), and 42 new stores were opened in the first half of the year (31 direct stores and 11 franchise stores).
(3) Profitability: infection protection products have impacted the performance of medical business; however, Purcotton has returned to a
stronger position compared to 2019.
In the first half of 2024, the Company improved its operational capacity, with inventory turnover efficiency also restored to 2019 level. The
profitability performance of the two businesses diverged due to the varying industry conditions they operate.
In the first half of 2024, demand for infection protection products returned to normal. As the company actively promoted sales, its pricing
aligned with market trends, in stark contrast to the unusually high gross profit seen during the same period last year. The gross profit for
infection protection products fell from 53.3% last year to 20.2% this year, resulting in an overall gross profit margin for the medical
consumables business dropping by 7.1 percentage points to 38.1%.
In the healthy consumer goods segment, in the first half of 2024, the Company continued to drive profitability through new product iteration,
product structure optimization, discount control, cost reduction and improved operation management. Despite the fluctuation in cotton prices,
the gross profit margin in Purcotton reached 56.9%, down 1.3 percentage points year-on-year. However, the operating profit margin reached
12.8%, and the profitability returned to a better level in 2019. Revenue and profit have increased, demonstrating that Purcotton’s
growth does not come at the expense of profitability. The Company remains committed to sourcing global high-quality cotton, focusing
on product innovation and advanced production technology to deliver excellent products to consumers, while constantly improving its
internal operation and management capabilities. This approach underscores a sustainable and high-quality development trend as a
whole.
(4) Outlook for future development: Focus firmly on the two main industries and take the road of high-quality development
Medical consumables are just-demanded, high-frequency, widely-used products, with huge domestic and international market space. The
medical consumables industry in China is extremely decentralized, but in overseas markets, after decades of development, the concentration
effect of the leader has emerged. With a strong manufacturing capacity, Winner Medical relies on its brand awareness and reputation
accumulated in recent years to further consolidate the construction of online and offline channels, laying a solid foundation for the steady
development of conventional products and the continuous improvement of market share. In the future, Winner Medical will endeavor to
enhance its endogenous capabilities in clinical R&D, marketing, material development and industry chain control, and stay active to seek
opportunities for outward mergers and acquisitions to make great strides toward the strategic goal of “leading in medical consumables and
providing one-stop medical consumables solutions”.
Healthy consumer goods brand - Purcotton, backed by the parent company’s medical background and quality genes, has formed a differentiated
competitive advantage with “all-cotton” comfortable, healthy, environmentally friendly materials, high stickiness of the customer base, and
excellent product quality. In today’s climate of mindful consumption, Purcotton is committed to delivering high-quality products. Rather
than catering to short-term trends by compromising quality or engaging in price wars, we focus on fostering sustainable, high-quality
growth for our business. Purcotton will continue to focus on the scenarios, practicing the best-selling strategy, while actively exploring both
domestic and international online and offline channels. This will help more consumers access high-quality cotton products at competitive price,
reduce environmental pollution, and promote a more natural way of life. Purcotton will continue to promote a healthy lifestyle of cotton,
shaping the brand perception, and conveying its core mission and brand value of “changing the world with pure cotton”. The company is
committed to advancing its brand development.
26
2024 Semiannual Report
Opportunities always exist alongside challenges in the complex and changing external environment. The Company will continue to promote
the core strategy of “leading products with operational excellence”, focusing on its main business, while pursuing parallel development in both
medical and consumer sectors online and offline. It aims for synergistic development of endogenous and exogenous, striving to open a new
chapter in the high-quality development of Winner Medical.
2. Business Management Analysis
(1) Product R&D
The Company sticks to independent innovation and development of basic materials. In the field of medical wound care, the Company has
refined its technical layout for the second-generation high-end wet wound dressing product line. The silicone gel foam dressings have been
upgraded to their fourth generation and successfully launched. Additionally, the hydrophilic fiber dressings have obtained CE registration
under the latest EU MDR regulations, and the medical hydrogel wound dressings have achieved mass production and successful launch. In the
field of medical consumables, the Company focuses on the development of core basic materials for the application of operating room
consumables such as surgical gowns, surgical towels and wipes. This effort aims to enhance the comfort of the products, reduce the cost of
production of the products, and further enhance the market competitiveness of the products, ultimately providing a better experience of the
products for the medical practitioners and other users, while creating 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. This initiative aims to facilitate industrial incubation, and complete the in vitro and in vivo biological evaluation of a new
series of artificial blood vessels with high patency rate. The goal is to break the monopoly of artificial blood vessels abroad, and promote the
use of domestic alternatives. 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 field of health consumables, the Company has emerged as an industry leader by pioneering a softening technology that eliminates the
use of chemical softeners. This innovation enhances the softness of core cotton tissue products while maximizing the retention of the natural
softness of cotton fibers, making it more eco-friendly, sustainable, and natural. The Company has pioneered a unique cotton-covered yarn
technology along with an innovative finishing process, leading to the successful development of elastic gauze that boasts more than six times
the elasticity of traditional gauze. This breakthrough addresses the discomfort often associated with conventional gauze products. Our elastic
gauze has been incorporated into children’s outdoor wear and home apparel, giving us a strong edge in the market. For the first time, the
Company has developed probiotic anti-allergic antibacterial gauze. This product effectively reduces allergens and inhibits the growth of
harmful bacteria through our proprietary probiotic microcapsule wrapping technology. It’s already being used in baby jumpsuits and other
infant products. Additionally, we have developed a biological wave anti-mosquito solution. By analyzing and extracting the specific wave
frequency of pyrethrins that resonates with the fiber surface, we can paralyze mosquitoes, achieving effective repellent action. This approach
uses pure biological wave technology without any chemical additives, ensuring it is gentle on the skin, odorless and safe. This innovation has
been applied to baby pants. 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 five 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%. The company
has also carried out research with Tianjin Polytechnic University on the comfort of all-cotton leisure wear, and with Jiangnan University on
the technical development of cotton and cotton-type yarn performance enhancement.
(2) Brand building
Winner Medical is dedicated to strengthening its brand image, one that resonates with consumers and earns the trust of doctors. We are
enhancing our visibility and reputation through media partnerships and advertising, building academic marketing expertise via clinical outreach,
and supporting users and special groups through public welfare initiatives - all to drive our brand marketing strategy. In the first half of the
year, Winner Medical collaborated with CCTV.com for a promotional campaign featuring our “Cotton Lined Mask”, generating over 100
million impressions. In partnership with professional physicians, we launched the “Saline Wet Tissues”, underscoring our commitment to
providing comfortable, eco-friendly, high-quality medical products. We participated in four major medical trade fairs, including CMEF, and
in August 2024, we received the CPEO Golden Award for Health Personal Care Brands at the 16th China Health Industry Ecological
Conference - CPEO. Our focus on professional medical engagement highlights Winner Medical’s diverse product range and robust capabilities.
Through various domestic outreach efforts, we showcased not only our extensive product line but also our technological advancements, R&D
innovations, and industry leadership. The “Health Month” initiative in May, an original Winner Medical initiative, included dozens of offline
health education events to promote professional medical knowledge, embodying our corporate vision of “caring for health and life, making a
better world.”
27
Purcotton also continues to deepen its emotional connection with consumers through interactive communication. Through a variety of
initiatives - spokesperson initiatives, charitable actions, offline lifestyle festivals, eco-friendly campus activities, and creative subway
exhibitions - we are enhancing our brand influence with heartfelt original content. This approach allows us to deeply connect with our brand
with values centered around cotton, environmental sustainability, and a warm, impactful presence. In 2024, we partnered with renowned
celebrities Guo Jingjing, Zhao Liying, and Sun Qian to share New Year greetings with the theme “Every Generation Has a Cotton Era”,
showcasing high-quality cotton products for all ages. In February, our sanitary pad brand, Nice Princess, launched the “Nice For Her” initiative,
promoting menstrual health. This campaign collaborated with the China Women’s Development Foundation and Ai Xiaoya to distribute
“Menstrual Charity Packs” to underprivileged female students in primary and secondary schools. We also established menstrual health
education programs and introduced sanitary pad sharing boxes across several universities, offering emergency sanitary pads for free in malls
and stores. These initiatives not only fostered a more supportive environment for women but also enhanced our connection with female
consumers, earning widespread societal recognition. On the eve of International Women’s Day, our campaign “Choose Nice Princess for Sleep
Pants” reached an audience of 33 million through elevator media advertising. During World Sleep Day, we integrated our brand into popular
culture by featuring spokesperson Zhao Liying in the hit drama The Legend Of Shen Li, while simultaneously launching our spring and summer
product lines, increasing awareness of Purcotton’s home textiles and driving sales growth. On Earth Day, April 22, we launched the “Mountain
and Sea Healing Project.” This initiative features events such as the Upcycled Clothing Store campaign, community clean-up hikes, and
donations of summer protection supplies for forestry workers and sanitation staff. This blend of quality original content and actionable efforts
engaged university students and environmental advocates, further solidifying the brand’s commitment to green sustainability. For Children’s
Day on June 1, we specially curated the “Listen to Children’s Voices” theme, featuring a call for submissions, a creative subway exhibition, a
themed video, and an offline children’s fashion show. This initiative reflects our brand’s dedication to listening to and understanding children,
fostering a connection between adults and kids. On June 22, we held a meet-and-greet event with Zhao Liying, our global ambassador for home
textiles and loungewear, in Chongqing. During the event, Zhao Liying showcased our high-quality cotton products and shared lifestyle tips for
achieving “greater comfort at home with cotton.” The livestream attracted over 9.05 million viewers, enhancing consumer awareness of
Purcotton’s brand philosophy and product benefits, while further reinforcing brand recognition and favorability among consumers.
YoY changes in key financial data
Unit: yuan
Year-on-year
Current reporting period Same period last year increase/decrea Reason for change
se
Revenue 4,033,505,104.33 4,266,838,038.66 -5.47% No major changes
Cost of sale 2,068,470,442.58 2,071,428,206.72 -0.14% No major changes
Selling Expenses 1,055,741,084.22 960,442,911.44 9.92% No major changes
Administrative Expenses 309,446,026.40 289,596,702.14 6.85% No major changes
Financial Expenses -37,442,539.84 -52,794,426.69 -29.08% No major changes
Mainly due to a decrease in
Income Tax Expenses 67,151,050.24 114,886,459.15 -41.55%
total profit
R&D expenses 143,142,952.33 194,636,202.14 -26.46% No major changes
Net cash flow from operating
193,333,516.76 158,178,712.89 22.22% No major changes
activities
Mainly due to the decrease in
the redemption of financial
Net cash flow from investing
-423,873,353.55 380,420,978.74 -211.42% products and the increase in
activities
foreign equity investments
during the period.
Net cash flow from financing
-560,896,220.86 -678,722,588.25 -17.36% No major changes
activities
Mainly due to a decrease in the
redemption of financial
Net increase in cash and cash
-783,341,536.49 -134,381,719.01 482.78% products and the increase in
equivalents
foreign equity investments
during the period.
Significant changes in the profit composition or profit source of the Company during the reporting period
28
2024 Semiannual Report
□ Applicable √ Not applicable
There was no significant change occurred in the profit composition or profit source of the Company during the reporting period.
Products or services accounting for more than 10%
√Applicable □ Not applicable
Unit: yuan
Gross Year-on-year Year-on-year Change in
Revenue Cost of sale profit increase/decreas increase/decreas gross profit
margin e in revenue e in cost of sale margin
By product or service
By industry
Medical consumables 1,718,139,287.93 1,063,575,499.62 38.10% -20.93%1* -10.68% -7.11%
Healthy consumer
2,282,226,506.99 983,852,286.64 56.89% 10.63% 14.08% -1.30%2*
goods
By product
Medical consumables -
traditional wound care
582,420,123.38 402,683,510.01 30.86% 2.22% 11.13% -5.54%
and wound dressing
products
Healthy consumer
goods - wet and dry 680,511,245.81 342,633,199.41 49.65% 24.83%3* 37.13% -4.52%
cotton tissues
Healthy consumer
448,607,894.90 180,674,777.06 59.73% 4.31% 0.08% 1.70%
goods - baby clothes
Healthy consumer
436,146,654.99 149,413,469.45 65.74% 8.93% 2.95% 1.99%
goods - adult apparel
By region
Domestic 3,128,691,807.63 1,517,593,464.58 51.49% -10.26% -7.47% -1.46%
Abroad 871,673,987.29 529,834,321.68 39.22% 16.26% 28.25% -5.68%
Note: 1* Revenue from medical consumables decreased by 20.93% compared with the same period of the previous year, mainly due to a
significant drop in demand for infection protection products.
2* The gross profit margin of the Healthy Consumer Goods business decreased by 1.30%, mainly due to rising cotton purchase prices.
3* Revenue from wet and dry cotton tissues increased by 24.83% year-on-year, driven by enhanced communication with consumers, innovative
usage scenarios, and strengthened product capability.
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
29
□ 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
Voluntary store closure due to
Direct-sale
360 109,012 31 8 contract expiration or personal Purcotton
stores
preference
Mall renovation and closure due
Franchises 84 18,439 11 1 Purcotton
to contract expiration
Total area and performances of direct-sale stores
Average
Revenue in January- Revenue for the performance of
Range of areas Number of stores Total area June 2024 (10,000 same period last stores Reasons
yuan) year (10,000 yuan) Year-on-year
increase/decrease
Less than 300 ㎡ 154 33,734.55 25,795.72 25,645.98 6.62%
300-500 ㎡ 98 36,225.86 21,513.65 21,617.23 7.38%
500-800 ㎡ 25 15,461.47 7,532.47 7,697.32 11.82%
More than 800 ㎡ 8 7,310.38 2,361.90 2,475.81 -5.27%
Total 285 92,732.26 57,203.74 57,436.34 3.44%
Note: The above list includes Purcotton stores that have been open for over 12 months as of June 30, 2024, including those that have downsized
this year.
Top 5 Stores in terms of Operating Revenues
Average performance of the
No. Name of stores Opening date Revenue (yuan)
store (RMB/m2/half year)
1 First August 6, 2012 6,638,099.55 11,351.25
2 Second October 25, 2017 6,326,354.08 15,647.67
3 Third July 20, 2016 5,649,311.73 12,019.81
4 Fourth November 11, 2017 5,422,761.37 4,889.78
5 Fifth January 18, 2018 5,257,994.07 12,609.10
Total -- -- 29,294,520.80 9,813.61
New stores of listed companies
√ Yes □ No
30
2024 Semiannual Report
Busin Property
Address of Opening Contract area Investment Product Business Number of
Name of stores ess ownership
stores year (m2) amount (yuan) category model stores
type status
Healthy Direct-
Direct-sale stores of Central Purcotton
2024 802.70 3,875,724.92 consumer Retail sale 3
Purcotton China leasing
goods stores
Healthy Direct-
Direct-sale stores of North Purcotton
2024 606.00 4,931,270.63 consumer Retail sale 3
Purcotton China leasing
goods stores
Healthy Direct-
Direct-sale stores of West Purcotton
2024 1,442.25 9,732,646.15 consumer Retail sale 6
Purcotton China leasing
goods stores
Healthy Direct-
Direct-sale stores of South Purcotton
2024 1,320.15 8,689,348.54 consumer Retail sale 8
Purcotton China leasing
goods stores
Healthy Direct-
Direct-sale stores of Purcotton
East China 2024 1946.54 10,871,434.65 consumer Retail sale 9
Purcotton leasing
goods stores
Healthy Direct-
Direct-sale stores of Northeast Purcotton
2024 410.26 1,955,907.47 consumer Retail sale 2
Purcotton China leasing
goods stores
Healthy
Purcotton North Franchis Purcotton
2024 391.00 518,003.71 consumer Retail 2
franchises China ees franchisees
goods
Healthy
Purcotton South Franchis Purcotton
2024 173.52 433,605.22 consumer Retail 1
franchises China ees franchisees
goods
Healthy
Purcotton West Franchis Purcotton
2024 554.43 965,675.70 consumer Retail 3
franchises China ees franchisees
goods
Healthy
Purcotton Central Franchis Purcotton
2024 316.32 589,369.45 consumer Retail 2
franchises China ees franchisees
goods
Healthy
Purcotton Franchis Purcotton
East China 2024 314.00 407,725.65 consumer Retail 1
franchises ees franchisees
goods
Healthy
Purcotton Northeast Franchis Purcotton
2024 276.42 617,852.12 consumer Retail 2
franchises China ees franchisees
goods
Total 8,553.59 43,588,564.21 42
Does the Company disclose the information on Top 5 franchises
□Yes √No
IV. Other Information Required by the Disclosure Guidelines for Textile and Apparel-Related
Sectors
31
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
January-June 2024 January-June 2023 Percentage
Producti Producti of change
on on in
Business Product Producti Producti
Unit capabilit capabili production Change reason description
category category on Output on Output
y ty capacity
capacity capacity
utilizati utilizati utilization
on rate on rate rate
Cotton ‘0,000
18,196 9,087 50% 17,987 7,742 43% 7%
tissues kits
Healthy New production equipment
consumer and production lines, more
goods Sanitary ‘0,000
39,836 29,406 74% 31,869 20,225 63% 11% complete product types,
napkins pieces
increased market demand,
more orders
Is there overseas production capacity?
□Yes √No
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 and offline stores.
Unit: yuan
Year-on-year Year-on-year
Sales Gross profit Change in gross
Revenue Cost of sale increase/decrease in increase/decrease
channels margin margin ratio (%)
revenue (%) in cost of sale (%)
Online Sales 1,381,019,123.38 647,236,708.42 53.13% 11.14 13.83 -1.11%
Offline
704,826,144.15 247,037,256.65 64.95% 8.94 8.52 0.14%
stores
Reasons for change
32
2024 Semiannual Report
3. Selling Expenses and Composition
Current period amount Previous period amount Year-on-year Reasons for
Item
(Yuan) (Yuan) increase/decrease differentiation
Employee Compensation 308,895,689.06 315,528,733.79 -2.10% No major changes
Travel expenses 11,089,494.35 10,524,681.48 5.37% No major changes
Office communication costs 6,712,347.78 6,090,498.20 10.21% No major changes
Sales commissions and expenses
150,321,611.77 125,398,549.11 19.88% No major changes
of e-commerce platform
Insurance premiums 2,303,225.44 2,967,753.30 -22.39% No major changes
Depreciation and amortization 117,958,551.43 112,902,943.06 4.48% No major changes
Advertising and promotion
339,609,578.47 276,337,254.06 22.90% No major changes
expenses
Lease and property management
76,942,306.30 77,531,439.61 -0.76% No major changes
expenses
Others 41,908,279.60 33,161,058.83 26.38% No major changes
Total 1,055,741,084.22 960,442,911.44 9.92% No major changes
Note: “3. Sales expenses and composition” and “7. Inventory situation” reflect data of the entire Company, while the other tables under “4.
Other information required by the information disclosure guidelines for textile and garment related industries” pertain especially to Purcotton
within the textile and garment sector.
4. Franchising and Distribution
The proportion of franchisees and distributors’ sales revenues exceeds 30%
□Yes √No
Top 5 franchises
No. Name of franchisee Start date of cooperation A related party or not Total sales (yuan) Level of franchisee
1 Franchisee 1 December 28, 2022 No 5,367,753.95 Primary
2 Franchisee 2 November 09, 2020 No 4,580,270.64 Primary
3 Franchisee 3 June 16, 2023 No 4,187,124.08 Primary
4 Franchisee 4 June 01, 2021 No 4,087,488.30 Primary
5 Franchisee 5 June 26, 2022 No 3,888,530.12 Primary
Total -- -- -- 22,111,167.09 --
Top 5 distributors
No. Name of franchisee Start date of cooperation A related party or not Total sales (yuan)
33
5. 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 06, 2014
Number of registered users 14,842,207
Average number of monthly active users 1,656,538
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) 692,766,874.86 2.08%
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
6. Agency Operation
Does it adopt agency operation?
□Yes √No
34
2024 Semiannual Report
7. Inventory
Inventory
YoY
Inventory turnover Inventory amount increase/decrease in
Main products Reasons
in days (Yuan) inventory balance
amount (Yuan)
Raw materials and goods Mainly due to increased production
273,553,745 29,603,724
processed by the commission inventory
Work in process 162,488,547 -4,038,654 No major changes
Mainly due to accelerated stock
Finished goods 959,724,586 -22,743,016 clearance of infection protection
products during the period
Mainly due to the increase in foreign
sales in June this year, as well as an
Goods in transit 39,872,022 15,155,864
increase in inventory that has not yet
met the criteria for income recognition.
Low-value consumables 17,543,815 878,510 No major changes
Total 148 1,453,182,716 18,856,428
Provision accrual for inventory depreciation
Unit: yuan
Amount increased in the Amount decreased in the
Closing balance of the current period current period
Class Closing Balance
previous year
Accrual Reversal or write-back
Raw materials and goods
13,590,764.92 9,895,273.94 7,198,190.86 16,287,848.00
processed by the commission
Work in process 36,094,235.16 2,252,175.07 5682067.21 32,664,343.02
Finished goods 205,259,954.93 78,606,775.59 80,967,651.20 202,899,079.32
Low-value consumables 1,598,990.58 641,804.10 144,870.75 2,095,923.93
Total 256,543,945.59 91,396,028.70 93,992,780.02 253,947,194.27
Inventory information of end channels such as franchises or distributors
8. Brand Building
Whether the company is involved in the production and sales of branded clothing, apparel and home textile products
√ Yes □ No
Private brand
35
Main Main
Brand Trademar Level of
product Features Target customers Main product price bands market
name k name cities
types territory
Made from 100% high-
quality natural cotton, and
free from fluorescent
whitening agents, our
products are gentle and
non-irritating. The unique Second- and
Cotton spunlaced non-woven All-age customer Nationwid third-tier
Purcotton Purcotton 9.9-30 yuan/pack (100 pieces)
tissues fabric processing base e cities and
technology of Purcotton above
preserves the softness of
cotton while minimizing
chemical processing,
ensuring optimal protection
for consumers’ skin.
100% cotton surface layer
(surface layer, spacer,
Second- and
sanitary wing surface Female
Nice Sanitary Nationwid third-tier
Purcotton layer), soft and low friction, population at 1.5-4.99 yuan/piece
Princess napkins e cities and
not easy to cause allergies. appropriate ages
above
All products are certified
medical grade.
100% cotton surface layer;
unique in the market; made Second- and
Cotton from natural cotton; 2mm Parental Nationwid third-tier
Purcotton BBNice 2.45-5.45 yuan/piece
diapers ultra-thin core with 28 population e cities and
times ultra-high absorption above
capacity
100% cotton material; soft
Second- and
and non-slippery; gentle
All-age customer Nationwid third-tier
Purcotton Purcotton Wet tissues and non-irritating, passed 20-40 yuan/pack
base e cities and
the food-grade
above
certification.
100% cotton material
without fluorescent Expecting Second- and
Baby
throughout the production mothers, Nationwid third-tier
Purcotton Purcotton products/cl 100-500 yuan/piece
line; the unique gauze newborns, e cities and
othing
fabric provides more babies, toddlers above
comfortable care
Made from 100% cotton,
our products feature high- Adult apparel:
Outwear: 150--800 yuan/piece;
quality cotton throughout adult men and
Adult leisure wear: 200--800 Second- and
the production process. The women of all
apparel/inti yuan/piece; thermal underwear: Nationwid third-tier
Purcotton Purcotton original soft cotton yarn ages; intimate
mate 200--600 yuan/piece; e cities and
from Purcotton is fluffy to apparel:
apparel underwear: 58--108 yuan/pair above
the touch, providing a soft customers of all
(pack); socks: 20--40 yuan/pair
and comfortable feel ages
against the skin.
Made from 100% cotton,
Expecting
our products use high- Baby bedding: RMB 268-1698
mothers, Second- and
quality cotton throughout /set; toddler bedding: RMB 198-
Bedding, newborns, Nationwid third-tier
Purcotton Purcotton the production process, 1098 /set; adult bedding: RMB
toiletries babies, toddlers e cities and
with no added softeners. 268-3198 /set; toiletries: RMB
and adult above
The more you wash it, the 38-398 /piece
customer base
softer it gets!
Partner brands: None
Licensed brand: None
36
2024 Semiannual Report
Marketing and operation of each brand during the reporting period
Please refer to the “III. Analysis of Main Business” of “Section III Management Discussion and Analysis” for details.
Cases involved in trademark ownership disputes
□ Applicable √ Not applicable
9. Others
Whether the Company is engaged in apparel design-related business
□Yes √No
Did the Company hold an order meeting?
□Yes √No
V. Other Business Analysis
√Applicable □ Not applicable
Unit: yuan
Proportion to total
Amount Formation reasons Is it sustainable
profits
Mainly due to maturity gains on
financial products and recognition
Investment Income 33,445,096.19 7.07% Yes
of gains and losses on investments
in associates
Mainly due to the changes in fair
Prot/loss from changes
7,577,712.84 1.60% value of financial products (such as No
in fair value
structured deposits).
Mainly due to the provision for
Impairment of assets -55,975,503.16 -11.82% No
inventories impairment
Mainly attributed to non-operating
income from non-current assets,
Non-Operating Income 6,143,356.51 1.30% No
such as gains on asset retirement
and compensation income
Non-Operating Mainly due to the losses on the
6,218,160.01 1.31% No
Expenses scrapping of non-current assets.
Mainly due to the expected credit
Credit Impairment Loss -8,295,817.44 -1.75% losses on the accrual of accounts No
receivable and other receivables.
Gains from Asset Mainly due to the losses on
1,930,800.28 0.41% No
Disposal disposal of non-current assets.
Mainly due to the receipt of
Relevant tax deduction: Yes,
Other Incomes 37,282,933.10 7.88% government grants related to
other: No
operations and related tax credits.
37
VI. Analysis of Assets and Liabilities
1. Major Changes in Asset Composition
Unit: yuan
End of the reporting period End of the previous year
Increase/
The decrease
The
proporti in Description of significant changes
proportio
Amount on to Amount
n to total proportio
total ns
assets
assets
Cash dividends, share repurchase,
Cash and cash repayment of short-term loans, and
3,917,672,185.79 23.64% 4,706,132,071.27 27.50% -3.86%
equivalents equity investment in the current
period
Accounts
939,231,196.69 5.67% 768,602,289.60 4.49% 1.18% No major changes
Receivable
Inventory 1,453,182,715.60 8.77% 1,434,326,287.96 8.38% 0.39% No major changes
Investment Real
7,166,185.13 0.04% 7,693,341.79 0.04% 0.00% No major changes
Estates
Long-Term
Mainly due to new investment in an
Equity 441,256,304.67 2.66% 20,879,244.20 0.12% 2.54%
associate in the current period
Investment
Fixed Assets 2,903,124,395.97 17.52% 2,749,018,750.62 16.06% 1.46% No major changes
Construction in
1,030,446,202.20 6.22% 984,571,329.05 5.75% 0.47% No major changes
Progress
Right-of-Use
421,817,678.37 2.55% 417,496,021.36 2.44% 0.11% No major changes
Assets
Short-Term
1,170,327,194.78 7.06% 1,493,238,955.00 8.73% -1.67% No major changes
Loans
Contract
179,911,770.00 1.09% 193,262,892.15 1.13% -0.04% No major changes
Liabilities
Mainly due to reclassification to non-
Long-Term
0.00% 170,000,000.00 0.99% -0.99% current liabilities due within one year
Loans
in the current period
Lease Liabilities 304,172,545.81 1.84% 292,009,504.04 1.71% 0.13% No major changes
Mainly because fewer notes
Notes Receivable 13,038,762.74 0.08% 42,963,076.53 0.25% -0.17% receivable were received in the
current period
Mainly due to the expiration of the
Other Current large deposit certificate pledge,
182,630,205.72 1.10% 378,853,652.64 2.21% -1.11%
Assets which is reclassified to cash and cash
equivalents
Mainly due to the increase in VAT
payable in the current period
Taxes Payable 93,252,897.83 0.56% 62,877,779.86 0.37% 0.19%
compared with the beginning of the
year
Non-Current
Mainly due to the reclassification of
Liabilities Due 373,940,213.86 2.26% 223,426,826.45 1.31% 0.95%
long-term loans to this account
within One Year
2. Major Overseas Assets
□ Applicable √ Not applicable
38
2024 Semiannual Report
3. Assets and Liabilities Measured at Fair Value
√Applicable □ Not applicable
Unit: yuan
Impairm
Accumulate
Gain/loss from ent Oth
d fair value Purchase amount Sales amount
changes in fair accrual er
Item Opening balance changes during the during the Closing balance
value for the in the chan
included in reporting period reporting period
period current ges
equity
period
Financial
Assets
1. Tradable
financial assets
(excluding
2,850,058,540.71 7,577,712.84 1,131,000,000.00 1,464,000,000.00 2,524,636,253.55
derivative
financial
assets)
Financial assets
2,850,058,540.71 7,577,712.84 1,131,000,000.00 1,464,000,000.00 2,524,636,253.55
subtotal
Total of the
2,850,058,540.71 7,577,712.84 1,131,000,000.00 1,464,000,000.00 2,524,636,253.55
above
Financial
0.00 0.00 0.00 0.00 0.00
liabilities
Other changes
Whether there were any significant changes in the measurement attributes of the Company’s major assets during the reporting period
□Yes √No
4. 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”.
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
Change percentage
(yuan) (yuan)
1,213,190,997.98 3,287,448,839.13 -63.10%1*
Note: The investment decreased by 63.10% compared with the same period last year, mainly due to: ① a higher purchase of wealth
management products last year; ② all fundraising projects were under construction last year, leading to significant expenditures. This year,
with those projects nearly completed, expenditures are considerably lower.
39
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
Reason
s for
not
Inves meeting
Date
Inves tment Industries Esti the Discl
Investment Cumulative actual Sour Cumulative of
tmen in involved mate schedul osure
Project amount in the investment amount ce of Project realized gains as disclo
t fixed in d ed index
name current as of the end of the fund progress of the end of the sure
meth asset investmen inco progres (if
reporting period reporting period s reporting period (if
od s or t projects me s and any)
any)
not projecte
d
earning
s
Advanced
dressing
Inde Medical
productio Proc
pend Yes consumabl 362,300.00 146,150,735.58 67.39% / 15,274,412.12 N/A
n line eeds
ent es
constructi
on project
Marketin
Inde Healthy
g network Proc
pend Yes consumer 34,571,689.45 656,066,385.85 106.15% 0.00 0.00 N/A
constructi eeds
ent goods
on project
Medical
R&D consumabl
Inde
Center es + Proc
pend Yes 13,104,649.14 202,674,447.01 94.08% 0.00 0.00 N/A
constructi Healthy eeds
ent
on project consumer
goods
Medical
Digital
consumabl
managem Inde
es + Proc
ent pend Yes 28,102,098.39 226,909,506.98 84.41% 0.00 0.00 N/A
Healthy eeds
system ent
consumer
project
goods
Winner
Industrial Inde Medical
Proc
Park pend Yes consumabl 1,558,311.00 436,619,700.73 103.96% 0.00 0.00 N/A
eeds
(Jiayu) ent es
Project
Phase II Medical
Expansio consumabl
Inde
n Project es + Proc
pend Yes 4,491,950.00 614,007,730.73 102.33% 0.00 0.00 N/A
of Winner Healthy eeds
ent
Medical consumer
Wuhan goods
Total -- -- -- 82,190,997.98 2,282,428,506.88 -- -- 0.00 15,274,412.12 -- -- --
4. Financial Assets Measured at Fair Value
√Applicable □ Not applicable
40
2024 Semiannual Report
Unit: yuan
Accumul
Gain/loss from ated fair Othe
Purchase amount in Sales amount in the Accumulated
Asset Initial investment changes in fair value r Source of
the current reporting current reporting investment Closing balance
classes cost value for the changes chan funds
period period income
period included ges
in equity
Self-
Others 1,651,000,000.00 -12,807,056.481* 976,000,000.00 1,306,000,000.00 39,041,624.32 1,334,269,210.26 owned
funds
Others 58,000,000.00 -125,333.33 55,000,000.00 58,000,000.00 707,032.50 55,047,666.67 Proceeds
Self-
Trust
1,100,000,000.00 20,510,102.65 100,000,000.00 100,000,000.00 1,365,653.13 1,135,319,376.62 owned
products2*
funds
Total 2,809,000,000.00 7,577,712.84 0.00 1,131,000,000.00 1,464,000,000.00 41,114,309.95 0.00 2,524,636,253.55 --
Note: 1* The gains and losses from changes in fair value for the current period are negative, mainly because the income from wealth
management products due for this period has been reclassified to the investment income account.
Note 2: Trust products primarily consist of risk-rated R2/R3 products and do not involve investments in stocks and real estate.
5. The Use of Proceeds
√Applicable □ Not applicable
(1) The overall use of proceeds
√Applicable □ Not applicable
Unit: ‘0,000 yuan
Total amount of proceeds 355,884.931*
Total amount of proceeds invested during the reporting period 8,219.10
Total accumulated amount raised for proceeds 354,786.72
Total amount of proceeds for alteration purposes during the current reporting period 0
Total accumulated amount of proceeds for alteration purposes during the current
11,102.34
reporting period
Proportion of total amount of proceeds for alteration purposes during the current
3.12%
reporting period
Description of the overall use of proceeds
The China Securities Regulatory Commission (CSRC) approved that, in its “CSRC License [2020] No. 1822” document, the Company made
an 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. ZI10584).
In the first half of 2024, the Company has used raised funds of RMB 168,551,500, of which RMB 82,191,000 was used for fundraising
projects to supplement working capital of RMB 86,360,500.
By the first half of 2024, the Company had used the raised funds of RMB 3,547,867,200, of which: the raised funds were used in fundraising
projects.
RMB 2,282,428,500 (including RMB 1,948,537,100 invested in fundraising projects and RMB 333,891,400 invested in fundraising projects
in advance by replacing self-raised funds), and RMB 1,265,438,700 of working capital was permanently replenished by using raised funds.
Note: 1* The total amount of funds raised here is the amount after deducting the issuance expenses of RMB 156,150,700
41
(2) Committed proceeds projects
√Applicable □ Not applicable
Unit: ‘0,000 yuan
Investme
Whether
nt Cumulati Whether
the Investme Cumulative
Committed progress Benefits ve Whethe there is a
project Total nt investment The project
investment Adjusted as of the realized benefits r significa
has been investment amount amount as reaches the
projects and Net amount total end of in the realized projecte nt
changed in in the of the end of intended
investment of of proceeds investment the current as of the d change
(includi committed current the usable
over-raised (1) reporting reporting end of the benefits in project
ng proceeds reporting reporting status date
proceeds period period reporting are met feasibilit
partial period period (2)
(3) = period y
change)
(2)/(1)
Committed
investment
projects
Advanced Not
dressing applica
December
production line No 21,685.86 21,685.86 21,685.86 36.23 14,615.07 67.39% 1,527.44 1,527.44 ble No
1, 2023
construction (Note
project 2)
Marketing
network September
Yes 70,456.87 70,456.87 61,804.04 3,457.17 65,606.64 106.15% 0 0 N/A No
construction 01, 2024
project
R&D Center
September
construction Yes 23,542.15 23,542.15 21,542.15 1,310.46 20,267.44 94.08% 0 0 N/A No
01, 2024
project
Digital
September
management No 26,881.05 26,881.05 26,881.05 2,810.21 22,690.95 84.41% 0 0 N/A No
01, 2024
system project
Bolster working
No 9,102.35 0 9,102.35 0 0 N/A No
capital
Subtotal of
committed
-- 142,565.93 142,565.93 141,015.45 7,614.07 132,282.45 -- -- 1,527.44 1,527.44 -- --
investment
projects
Investment of
over-raised
proceeds
Not
Winner applica
December
Industrial Park Yes 42,000 155.83 43,661.97 103.96% 0 0 ble No
1, 2023
(Jiayu) Project (Note
3)
Phase II Not
Expansion applica
December
Project of No 60,000 449.2 61,400.77 102.33% 0 0 ble No
1, 2023
Winner Medical (Note
Wuhan 4)
Bolster working
-- 117,441.53 0 117,441.53 -- -- -- -- --
capital (if any)
Subtotal of use
of over-raised -- 219,441.53 605.03 222,504.27 -- -- 0 0 -- --
proceeds
360,456.98
Total -- 142,565.93 142,565.93 8,219.1 354,786.72 -- -- 0 0 -- --
(Note 1)
42
2024 Semiannual Report
Description of
and reasons for
not meeting the
scheduled
progress or
projected
earnings by
projects
N/A
(including the
reasons 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 RMB 639 million 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 million yuan of over-raised proceeds
were used for replenishing the 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 approved by the 6th Extraordinary General Meeting of Shareholders in 2020 held on December 15, 2020. The main body of
the Proposal is as follows: The Company plans to allocate RMB 400.0000 million of the over-raised proceeds to the investment in the Winner Industrial
Park (Jiayu) Project. The total investment in Winner Industrial Park (Jiayu) Project is estimated at RMB 900.0000 million, and the implementing entity is
Winner Medical (Jiayu) Co., Ltd. The project is located in Hubei Jiayu Economic Development Zone, adjacent to the Park’s 2nd Road in the north, 3rd
Road in the south, Jiayu 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
Amount, the primary raw material to innovate and improve degreasing and spunlace technology. It adopts comprehensive use of high-pressure “water needle” and
purpose and other high-efficiency production technologies, and plans to build production projects about spunlace, wash care, wet tissues, medical cotton/gauze/non-
progress of use woven fabrics, hand sanitizer and other products. As of June 30, 2024, the total investment of the above projects was 436,619,700.
of over-raised 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
proceeds 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 RMB 600.0000 million of the over-raised proceeds to the investment in the Phase
II Expansion Project of Winner Medical Wuhan. The total investment in the Phase II Expansion Project of Winner Medical Wuhan totals RMB 1,500.0000
million, and the implementing entity is Winner Medical (Wuhan) Co., Ltd. The project includes nonwoven 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
June 30, 2024, the total investment of the above projects was 614,007,700.
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 RMB 494.19 million 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 supplemented working capital was RMB 535.4153
million).
The 2021 Annual General Meeting held on May 13, 2022 considered and approved the proposal.
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
Investment of Entity of the Fundraising Projects, and Addition of Implementation Sites of Some Fundraising Projects”. The main body of the Proposal is as follows: To
Proceeds further improve the production, management efficiency and comprehensive utilization rate of resources, seize market development opportunities, and better
Change of promote the implementation of fundraising projects, the Company plans to use some of the proceeds to increase the capital of the wholly-owned subsidiaries
project and change the implementing entity of the fundraising projects, and add new implementation sites for the fundraising projects. Among them, the original
implementation implementing entity of the “R&D Center Construction Project” was Winner Medical (Wuhan) Co., Ltd. According to the Company’s development strategy
location 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.
43
Applicable
Occurred in the previous year
Investment of 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
Proceeds 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
Adjustment of
project 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
implementation efficiency of proceeds, the marketing network building project increased the investment related to online marketing of Shenzhen Purcotton Technology
mode 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. The Company’s investment in the project was verified by BDO CHINA SHU LUN PAN CERTIFIED PUBLIC ACCOUNTANTS LLP
with a “Special Auditor’s Report on Proceeds Replacement of Winner Medical Products Co., Ltd.” (Xin Kuai Shi Bao Zi [2021] No. ZI10031) issued 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
Pre-investment Winner Industrial Park (Jiayu) Project. In February and March 2021, the Company transferred 14.28 million yuan and 85.8942 million yuan, respectively
and replacement from the special account for proceeds to replace the self-raised funds that had been invested in advance in the proceeds project.
of the proceeds 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
investment reviewed and approved the “Proposal Regarding the Use of Proceeds to Replace Self-raised Funds Pre-invested in the Fundraising Project”, respectively,
project and agreed that the Company could replace the self-raised funds pre-invested in the fundraising project with 233.7173 million yuan of proceeds. The
Company’s investment in the project was verified by BDO CHINA SHU LUN PAN CERTIFIED PUBLIC ACCOUNTANTS LLP with a “Special
Auditor’s Report on Proceeds Replacement of Winner Medical Products Co., Ltd.” (Xin Kuai Shi Bao Zi [2020] No. ZI10635) issued 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 advanced dressing production line construction project, 110.0794 million yuan was invested in marketing
network building 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 replace the self-raised funds that had been invested in advance in the proceeds project.
Temporary
replenishment
of working N/A
capital with idle
proceeds
Applicable
On December 19, 2023, the Company convened the 18th Meeting of the Third Board of Directors and the 13th Meeting of the Third Supervisory Board.
Amount of and
The agenda included a review and approval of the Proposal on Closing Part of the Project and Permanently Supplementing the Working Capital with the
reasons for the
Surplus Raised Funds. The board agreed to conclude several fundraising investment projects, specifically the “Advanced Dressing Production Line
balance of
Construction Project”, the “Phase II Expansion Project of Winner Medical Wuhan”, and the “Winner Industrial Park (Jiayu) Project”. The remaining raised
proceeds
funds, totaling RMB 91.7398 million (including interest income, with the exact amount to be confirmed by the bank settlement balance on the transfer
resulting from
date), will be designated for permanent working capital replenishment. The resolution came into effect after being deliberated and adopted at the first
project
extraordinary general meeting of shareholders in 2024 held on January 8, 2024. As of June 30, 2024, the actual savings raised funds supplemented the
implementation
working capital of RMB 86,360,500.
Usage and
purposes of
proceeds not As of June 30, 2024, the Company’s unused balance of raised funds was RMB 83,125,100, of which: the balance of cash management was RMB
used during the 55,000,000, and the balance deposited in the raised funds account was RMB 28,125,100.
current
reporting period
Problems or
other
circumstances
None
in the use and
disclosure of
proceeds
Note 1: The adjusted total investment shown in this table includes net wealth management income and interest income (after deducting expenses)
that contribute to working capital, which is why the total investment exceeds the total raised funds.
Note 2: The benefit realized from the advanced dressing production line construction project this year is the net profit earned from January to
June, 2024. Since this net profit does not reflect the net profit of the project in 2024, it cannot be used to determine whether the expected
benefits have been achieved.
44
2024 Semiannual Report
Note 3: The Winner Industrial Park (Jiayu) Project uses both raised funds and self-owned funds for comprehensive investment, and the
economic benefits generated by the raised funds are not calculated separately.
Note 4: Phase II Expansion Project of Winner Medical Wuhan uses raised funds and self-owned funds for comprehensive investment, and does
not separately calculate the economic benefits generated by raised funds.
(3) Changes in proceeds projects
√Applicable □ Not applicable
Unit: ‘0,000 yuan
Benefit
Actual Investment
Total amount Actual s Whether there
cumulative progress as The project
Corresponding of proceeds investment realized Whether is a significant
investment of the end of reaches the
Project after original to be amount in in the projected change in the
amount as of the intended
change committed invested in the current current benefits feasibility of
the end of the reporting usable status
projects the changed reporting reportin are met the changed
reporting period (3) = date
project (1) period g project
period (2) (2)/(1)
period
Marketing Marketing
network network September 1,
61,804.04 3,457.17 65,606.64 106.15% 0 N/A No
construction construction 2024
project project
R&D Center R&D Center
September 1,
construction construction 21,542.15 1,310.46 20,267.44 94.08% 0 N/A No
2024
project project
Industrial Park
Industrial Park
Project Not
Project Winner
Winner December 01, applicabl
Medical 42,000 155.83 43,661.97 103.96% 0 No
Medical 2023 e (Note
(Jiayu)
(Jiayu) 1)
Technology
Technology
Total -- 125,346.19 4,923.46 129,536.05 -- -- 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 in the marketing network building project of PureH2B was terminated.
The remaining proceeds not used for the marketing network building project amounted to
approximately RMB 89.6426 million yuan (including the income of financial products), which will
Reasons for change, decision-making be used for permanently replenishing the working capital (the actual amount to be replenished
procedures and information disclosure (by together with the proceeds of the financial products will be RMB 91.0234 million). (Announcement
specific project) 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 May 5, 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, 2023. The proceeds from the research and development
center construction project should be adjusted among the implementation entities, part of the
proceeds from the R&D Center Construction Project shall be moved to the Winner Industrial Park
(Jiayu) Project. (Announcement No.: 2023--018)
Information on and reasons for not meeting the
scheduled progress or projected earnings (by N/A
specific project)
Description of significant changes in the There has been no material change in the feasibility of the marketing network building project, the
feasibility of the changed project R&D center construction project and the Winner Industrial Park (Jiayu) Project
Note 1: The Winner Industrial Park (Jiayu) Project uses both raised funds and self-owned funds for comprehensive investment, and the
economic benefits generated by the raised funds are not calculated separately.
45
6. Entrusted Wealth Management, Derivatives Investment and Entrusted Loans
(1) Information of entrusted wealth management
√Applicable □ Not applicable
Overview of entrusted wealth management during the reporting period
Unit: ‘0,000 yuan
The amount of
Source of funds for Amount incurred in
Outstanding Unrecovered overdue impairment for
Specific type entrusted wealth entrusted wealth
balance amount overdue wealth
management management
management
Bank financial
Proceeds 5,500 5,500 0 0
products
Bank financial
Self-owned funds 132,100 132,100 0 0
products
Trust financial
Self-owned funds 110,000 110,000 0 0
products
Total 247,6001* 247,600 0 0
Note 1* The amount of entrusted wealth management here is the balance of unexpired wealth management products.
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
(2) Derivatives investment
□ Applicable √ Not applicable
No derivative investment in the Company during the reporting period
(3) Information of entrusted loans
□ Applicable √ Not applicable
The Company had no entrusted loan during the reporting period.
46
2024 Semiannual Report
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.
2. Information of Significant Equity for Sale
□ Applicable √ Not applicable
IX. Analysis of Major Holding Companies and Invested Companies
√Applicable □ Not applicable
Information on major subsidiaries and invested companies with an impact of 10% or more on the Company’s net profit
Unit: yuan
Company Compa Principal Registered Operating
Total assets Net assets Revenue Net profit
name ny type operation capital profit
Mainly
responsible
Winner
for the
Medical
Subsidi production
(Huangga 259,459,200.00 1,181,496,880.84 935,911,549.22 574,370,691.84 87,362,078.62 75,866,556.09
aries of large rolls
ng) Co.,
of cotton and
Ltd.
cotton
tissues
Acquisition and disposal of subsidiaries during the reporting period
√Applicable □ Not applicable
Method of acquisition and disposal of Impact on overall production operations and
Company name
subsidiaries during the reporting period performances
Zhejiang Honglan Technology Co., Ltd. Acquisition No material impact
Winner Medical Biomedical Technology
Establishment No material impact
(Wuhan) Co., Ltd.
Purecotton Agricultural Technology (Wuhan)
Establishment No material impact
Co., Ltd.
Description of major holding companies and invested companies
47
X. Structured Subjects Controlled by the Company
□ Applicable √ Not applicable
XI. Risks Faced by the Company and Countermeasures
1. Risk of Changes in Industry Policies and Standards
Medical device is a key supervised industry, that directly affects users’ life and health safety. 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 promptly, it may impact the Company’s
operations.
2. Risk of Raw Material Price Fluctuations and Countermeasures
The Company’s main raw materials are cotton, cotton yarn and cotton greige fabric for medical use made from cotton. Cotton prices 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 the sales price with that of the raw material
price, it may harm 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. 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 June 30, 2024, the carrying value of goodwill amounted to RMB 0.867 billion,
representing 7.58% 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 make provisions for impairment based on the results of these tests. The risk of goodwill impairment could negatively
impact net profit. To deal with the impairment risk of goodwill, the Company will make more efforts to strengthen its business management,
improve its business performance, and reduce the risk of asset impairment.
4. 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 the first
half of 2024, the Company’s foreign sales amount in the overall revenue accounted for 21.61%. In recent years, with the accelerated pace of
Chinese Yuan internationalization and further marketization of the Chinese Yuan exchange rate formation mechanism, the exchange rate
flexibility of Chinese 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 Chinese 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 revenue and profits.
48
2024 Semiannual Report
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 on time; 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.
5. Risk of not Receiving Reimbursement for the 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. Since the judgment came into effect, the Company has
received part of the money paid by Zijin County Government every year. As of the disclosure date of the report, the Company has received a
land transfer deposit of RMB 3 million and a compensation payment of RMB 330 million returned by the People’s Government of Zijin County.
There is a risk that the remaining RMB 220 million may not be received on time per the Award. The Company has made a provision for bad
debts following the accounting policy. The court has now resumed enforcement. The Company is closely following up on the subsequent
payment plan of the People’s Government of Zijin County, Heyuan City.
6. Risks Associated with the Urban Renewal Project of Winner Industrial Park
In July 2023, the Company signed an agreement on relocation compensation and resettlement (hereinafter referred to as the “original
agreement”) with Shenzhen Xingda Real Estate Development Co., Ltd. (hereinafter referred to as “Xingda Company” or “Partner”) to facilitate
urban renewal and transformation (hereinafter referred to as the “Project”) on the land and above-ground buildings of the Winner Industrial
Park in Shenzhen Longhua District. However, due to significant changes in the real estate market, the project was postponed to January 2024.
To ensure the project moves forward smoothly, minimize land idle time, and reduce uncertainties in construction, the Company engaged in
several rounds of discussion with its partners. A preliminary solution was formulated, leading to an intention to sign a supplementary agreement.
Under this agreement, the office and commercial property areas allocated to the Company will remain consistent with the original agreement,
while the residential property area and compensation amount will be tied to the actual average transaction price of residential properties
obtained by Xingda Company. On July 26, 2024 and August 12, 2024, the Company held the 23rd Meeting of the 3rd Board of Directors and
the 2nd Extraordinary Shareholders’ Meeting in 2024, respectively, and reviewed and approved the Proposal on Signing the Supplementary
Agreement on Relocation Compensation and Resettlement of Urban Renewal Units in Winner Industrial Park. The supplementary agreement
has now been signed.
Since the residential property area and compensation amount for the Company are tied to the actual average transaction price of residential
properties, these figures remain uncertain amid significant fluctuations in the real estate market. It is expected that the signing of this contract
will not impact the Company’s 2024 financial statements. After signing the supplementary agreement, both parties will continue to work
diligently on key processes, including confirming the main body, building demolition, applying for construction land planning permit, and
signing land contracts. However, due to the long implementation period of this project, the Company will actively promote it, and strengthen
communication and process control to mitigate uncertainties related to changes in urban renewal laws and policies, urban planning, partner
performance, market conditions, pricing, and force majeure events.
49
XII. Registration Forms for Receptions of Surveys, Communication, Interviews and Other
Activities during the Reporting Period
√Applicable □ Not applicable
Main contents of
Types of discussions and Basic information
Time Location Method Objects
objects documents index of surveys
provided
69 institutional
Online investors including Company 2023
For details, please
Headquarter communicatio China Southern Fund, Annual
January 30, 2024 Institutions refer to SZSE
conference rooms n on network Maxwealth Fund and Performance
Interactive Ease
platform Star Rock Asset Forecast
Management
The Company’s
Shenzhen 78 investors including For details, please
May 08, 2024, Institution, operations for fiscal
Panorama Others Da Cheng Fund, CICC refer to SZSE
May 09, 2024 Individual 2023 and the first
Roadshow Hall and Huatai Securities Interactive Ease
quarter of 2024
Huaan Securities, Tai
Update on the For details, please
June 14, 2024 - Headquarter Pu Investment, Western
Field surveys Institutions company’s refer to SZSE
June 21, 2024 conference rooms Securities and other
operations Interactive Ease
investors
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 elaborated on its concept of "Dual Enhancement of Quality and Returns" by focusing on developing a high-quality core business,
strengthening corporate governance, fulfilling social responsibilities, ensuring transparent information disclosure, and prioritizing investor
returns.
In terms of advancing high-quality core business development, the Company always upholds the vision of “promoting health, nurturing 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 to make great strides towards the strategic goal of “leading in medical consumables and
providing one-stop medical consumables solutions”. 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, internal controls,
and 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.
50
2024 Semiannual Report
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, the Company convened the Second Meeting of the 4th Board of Directors and the 2nd Meeting of the 4th Board
of Supervisors on August 26, 2024 to review and approve the Proposal on the Profit Distribution Plan for the Half Year of 2024. Based on the
582,329,808 shares deducted from the repurchased shares, the Company plans to distribute a cash dividend of RMB 4.00 (including tax) to all
shareholders for every 10 shares, without capitalization and bonus shares. The total cash dividends paid amounted to RMB 230 million (60.64%
of net income attributable to shareholders of the parent company in the consolidated income statement). From the listing in September 2020 to
the disclosure date of this report, the Company has implemented a total of RMB 2.47 billion in cash dividends (including the amount of cash
dividends to be implemented in the first half of 2024) and RMB 690 million in share repurchase, totaling RMB 3.16 billion, accounting for
88.9% of the net initial raised funds. Among them, 6,094,659 repurchased shares (accounting for 1.03% of the Company’s total share capital
before cancellation) were canceled in March 2024. In July 2024, the Company convened a shareholders’ meeting again to consider and pass
the proposal of share cancelation, and planned to cancel an additional 5,962,900 repurchased shares. In addition, on January 30, 2024, 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. Mr. Fang Xiuyuan, the director, deputy general manager and chief financial officer, Ms. Chen
Huixuan, the deputy general manager and secretary of the board, Ms. Xu Xiaodan, the former director, Ms. Liu Hua and Ms. Zhang Li, the
former deputy general manager, and other directors, supervisors, and senior managers planned to increase their holdings of the Company’s
shares by a total of RMB 3.15 million to 6.3 million. As of the disclosure date of this report, the foregoing share increase plan has been
implemented, and the directors, supervisors, and senior managers have increased their shareholdings by a total of 143,100 shares and RMB
4.5341 million.
51
52
Corporate governance
2024 Semiannual Report
Section Ⅳ Corporate Governance
I. Information about the Annual General Meeting of Shareholders and Extraordinary General
Meeting of Shareholders Held during the Reporting Period
1. General Meeting of Shareholders during the Reporting Period
Investor
Meeting session Meeting type participation Convening date Date of disclosure Resolutions of the meeting
proportion
Consideration and adoption of
Proposal on the , Proposal on the Plan
of Shareholders shareholders
on the Profit Distribution for
2023, etc.
Consideration and approval of
Proposal on the Repurchase
The 1st and Cancellation of Remaining
Extraordinary Extraordinary Shares in the Special Securities
General Meeting general meeting 73.66% January 08, 2024 January 08, 2024 Account and Proposal on
of Shareholders in of shareholders Closing Part of the Project and
2024 Permanently Supplementing
the Working Capital with the
Surplus Raised Funds, etc.
2. The Preferred Shareholders with Voting Rights Restored Request an Extraordinary General Meeting of Shareholders
□ Applicable √ Not applicable
II. Change of Directors, Supervisors and Senior Management
√Applicable □ Not applicable
Name Position held Type Date Reasons
Departure on expiration Departure on expiration
Xu Xiaodan Former Director August 12, 2024
of term of office of term of office
Departure on expiration Departure on expiration
Guo Zhenwei Former Director August 12, 2024
of term of office of term of office
Former Independent Departure on expiration Departure on expiration
Xie Jiawei August 12, 2024
director of term of office of term of office
Former Independent Departure on expiration Departure on expiration
Peng Jianfeng August 12, 2024
director of term of office of term of office
Former Independent Departure on expiration Departure on expiration
Key Ke Liu (Liu Ke) August 12, 2024
director of term of office of term of office
Departure on expiration Departure on expiration
Liu Hua Former supervisor August 12, 2024
of term of office of term of office
53
Name Position held Type Date Reasons
Departure on expiration Departure on expiration
Zhang Li Former Deputy General Manager August 12, 2024
of term of office of term of office
General meeting
Zhang Yan Director (Former Supervisor) Elected August 12, 2024
election
General meeting
Liao Meizhen Director Elected August 12, 2024
election
General meeting
Chen Junfa Independent director Elected August 12, 2024
election
General meeting
Wang Zhifang Independent director Elected August 12, 2024
election
General meeting
Yang Xiangliang Independent director Elected August 12, 2024
election
General meeting
Wu Kezhen Supervisor Elected August 12, 2024
election
General meeting
Zhao Xia Supervisor Elected August 12, 2024
election
Appointment by the
Liao Guanlai Deputy general manager Appointment August 12, 2024
Board of Directors
III. Profit Distribution and Share Capital Increase from Capital Surplus during the Reporting
Period
√Applicable □ Not applicable
Bonus shares per 10 shares (shares) 0
Dividend per 10 shares (RMB) (tax included) 4.00
Share capital base in distribution plan (shares) 582,329,808
Amount of cash dividend (yuan) (including tax) 232,931,923.20
Amount of cash dividend in other forms (e.g. share repurchase) (yuan) 194,943,744.29
Total cash dividends (including other methods) (yuan) 427,875,667.49
Distributive profit (yuan) 4,627,174,936.42
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
In the first half of 2024, the net profit attributable to shareholders of the parent company in the consolidated income statement of the Company
was RMB 384,150,379.21, and the net profit in the income statement of the parent company was RMB 21,300,746.82; As of June 30, 2024,
the undistributed profit of the parent company was RMB 4,627,174,936.42.
On the disclosure date of the distribution plan, the company’s total share capital stood at 588,292,708 shares, with 5,962,900 shares held in
a special securities account for repurchase. Deducting these repurchased shares, the total share count amounted to 582,329,808 shares. It was
planned to distribute a cash dividend of 4.00 yuan per 10 shares to all shareholders (tax included), with no capital increase or bonus shares.
The total cash dividend amounted to 232,931,923.20 yuan, representing 60.64% of the net profit attributable to shareholders of the parent
company as per the consolidated income statement.
54
2024 Semiannual Report
IV. Implementation of the Company’s Equity Incentive Plan, Employee Stock Ownership Plan or
Other Employee Incentive Measures
√Applicable □ Not applicable
1. Share Incentive
The Company held the 15th meeting of the Second Board of Directors and the 9th meeting of the Second Board of Supervisors on November
27, 2020, as well as the 6th Extraordinary General Meeting of Shareholders 2020 on December 15, 2020, respectively, deliberated and approved
the Proposal on the 2020 Restricted Stock Incentive Plan (Draft) and Its Abstract and related matters. The General Meeting of Shareholders
authorized the Board of Directors to determine the grant date of restricted shares, 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 CNINFO.com (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 approved the Proposal on the Matters Related to the Adjustment of 2020 Restricted Shares Incentive
Plan 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 CNINFO.com (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, 2022, 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 15 th 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.
2. Implementation of Employee Stock Ownership Plan
√Applicable □ Not applicable
All effective employee stock ownership plans implemented during the reporting period
Proportion of total
Total number of Total number of stocks Sources of funds to
Employee Scope Change share capital of listed
employees held (shares) implement the plan
companies
Incentive funds
Core employees at raised by employees
director level or above (if 14 505,000 None 0.08% themselves and
any) provided by the
Company
55
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 Proportion of total share
Name Position beginning of the period the end of the period capital of listed
(shares) (shares) companies
None None 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
Exercise of shareholders’ rights during the reporting period
None
Other pertinent circumstances and explanations regarding the employee stock ownership plan during the reporting period.
□ Applicable √ 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
The cumulative amount of equity-settled share-based payment included in capital reserves is RMB 5,090,677.24, and the total expenses
recognized for equity-settled share-based payment in this period are RMB 2,908,958.42.
Termination of employee stock ownership plans during the reporting period
□ Applicable √ Not applicable
Other description:
None
3. Other Employee Incentive Measures
□ Applicable √ Not applicable
56
2024 Semiannual Report
Environment and Social Responsibility
57
Section V Environmental Protection and Social Responsibility
I. Significant 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 Catalogue for Classified Management of Environmental Impact Assessment of Construction Projects (2021 Version), 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, the Regulations on Environmental Protection Management of Construction Projects and
Interim Measures for Environmental Protection Acceptance of Construction Projects, 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 Emission Standard of Pollutants for Rubber Products Industry (GB27632-2011), the Integrated
Wastewater Discharge Standard (GB8978-1996), the Integrated Emission Standard of Air Pollutants (GB16297-1996), the Emission Standard
of Pollutants for Synthetic Resin Industry (GB31572-2015), the Emission Standard of Air Pollutants for Boiler (GB13271-2014), the Emission
Standards for Odor Pollutants (GB14554-1993), and the Emission Standard for Industrial Enterprises Noise at Boundary (GB 12348-2008).
Status of administrative licenses for environmental protection, project licenses
Branch Project name Approval unit Approval time Acceptance
Medical degreasing gauze series production
September 21, 2005 August 22, 2008
line Chongyang County
Sterilization packaging and sterilization Environmental
Winner March 29, 2013 June 26, 2014
production line project Protection Bureau
Medical
Qingshan plant construction project November 18, 2015 March 01, 2016
(Chongy
ang) Xianning
Qingshan sewage treatment plant project Environmental 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 project Jiayu County March 20, 2013 September 20, 2014
Environmental
Winner Winner Medical Purcotton construction Protection Bureau
Medical December 25, 2014 September 28, 2017
project
(Jiayu)
Environmental Impact Assessment Report of Xianning Ecological
March 15, 2021 Under construction
Winner Industrial Park (Jiayu) Project Environment Bureau
Winner
Zhijiang
Medical Annual output of 90 million meters of
Environmental December 19, 2014 October 14, 2015
(Yichang medical gauze project
Protection Bureau
)
58
2024 Semiannual Report
Branch Project name Approval unit Approval time Acceptance
Phase I January 25, 2017; Phase
Pure cotton spunlace non-woven fabric and
Tianmen March 11, 2015 II May 10, 2020; Phase III
Winner medical dressing products production project Environmental December 31, 2022
Medical
Medical dressing production line automation Protection Bureau
(Tianme January 19, 2016 March 23, 2018
upgrading project
n)
Tianmen Ecological
Medical product sterilization center project January 17, 2022 December 31, 2022
Environment Bureau
30 million meters/year medical gauze
bleaching and refining production line October 18, 1999 December 14, 2001
expansion project
Jingmen
Reform and expansion project of gauze pads,
Environmental September 23, 2003 August 03, 2005
gauze sheets and shrinkage bandages
Protection Bureau
Winner Jingmen Dongbao
Medical Annual output of 1500t de-bleaching medical District
April 05, 2006 September 27, 2017
(Jingme gauze project Environmental
n) Protection Bureau
Jingmen
Winner Medical Purcotton construction
Environmental October 19, 2016 September 27, 2017
project
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
(Huangg Boiler conversion project foam coil Huanggang January 29, 2018; November 14, 2019; October
ang) production line project (expansion) Environmental February 05, 2018 08, 2018
High-end wound dressing production line Protection Bureau
November 06, 2018 Construction has not started yet
construction project
Medical protective products renovation
July 20, 2020 October 19, 2021
project
Hubei Winner Medical Co., Ltd. cotton spun Wuhan Xinzhou Phase I January 18, 2020; Phase
laced nonwovens and products production District July 12, 2017
II June 13, 2023
project Administration and
R&D Center construction project Approval Bureau 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 Administrative May 07, 2021 Under construction
project
Approval Bureau
Wuhan Ecological
Winner Medical phase II expansion project June 21, 2022 Under construction
Environment Bureau
Innovation research institute construction Administration and
August 09, 2022 June 13, 2023
project Approval Bureau
59
Branch Project name Approval unit Approval time Acceptance
Pingshan Songze Industrial Park New Project
Winner of Shenzhen Branch of Winner Medical Co., Shenzhen Ecological November 26, 2021 March 18, 2022
Medical Ltd. Environment Bureau
(Shenzh Pingshan
en) Expansion Project of Shenzhen Branch of Administration
August 11, 2023 December 01, 2023
Winner Medical Co., Ltd.
Expansion and Technical Transformation Administrative
Project of Medical Glove Production Line Approval Bureau of December 30, 2020 March 2022
Winner Capacity Guilin City
Guilin Annual output of 200 million pairs of TPU-
Guilin Ecological
covered medical gloves, automation May 15, 2023 Under construction
Environment Bureau
upgrading and energy saving retrofit project
Annual output of 5 million sheets of medical
Deqing County
hygiene materials and accessories, 100
Environmental October 24, 2016 September 29, 2017
million bottles of various types of skin care
Protection Bureau
products technology reform project
The annual production includes 300 million
tablets of medical hygiene materials and
accessories, 5 million bottles of disinfectants,
15 million tablets of Class I and II medical
care products and infection control medical
Zhejiang consumables, and 10 million packs of
March 04, 2019
Longter hygiene products. Additionally, we produce
m 20,000 sets of rehabilitation therapy Deqing Branch of
instruments and equipment, 100,000 units of Huzhou Ecological February 11, 2022
skin cleaning and care products, and 5.7 Environment Bureau
million buttons/branches for the minimally
invasive surgical consumables project.
Annual output of 1.2 billion povidone-iodine
swabs, 35 million bottles of disinfectant, 1
million sets of isolation gowns, 11 million June 15, 2021
sets of protective clothing, 350 million pieces
of masks project
The project of off-site expansion of annual
output of 300 million sets of self-destructive
April 05, 2005
sterile medical equipment production line of Li County
Pingan Medical Device Technology Co., Ltd. Environmental December 11, 2011
Winner Expansion of the production line with an Protection Bureau
Medical annual output of 300 million sets of self- April 13, 2009
(Hunan) destructing sterile medical devices
Phase III Expansion Project September 18, 2021 May 21, 2022
Changde Ecological
Winner Medical Pingan Medical Device Environment Bureau
January 05, 2024 Under construction
Industrial Park Project
Sewage discharge procedures:
All subsidiaries of the Company have applied for discharge permits in accordance with relevant technical specifications, including Catalogue
of Classified Management of Pollutant Discharge Permit for Fixed Pollution Sources (2019 Version), 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), Technical Specification for Application and Issuance of Pollutant Permit - Rubber and Plastic Products Industry (HJ1122-
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 - Rubber and Plastic Products Industry (HJ 1207—2021), 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).
60
2024 Semiannual Report
The status of emission permits for each and subsidiary is as follows:
Subsidiarie Certificate
Certificate No. Validity Remark
s type
Pollutant
Chongyan 2024-04-08 Changes
discharge 91421223732699160U003P August 12, 2023 - August 11, 2028
g Plant I (per review)
permit
Discharge
Chongyan
registration 91421223732699160U001P April 28, 2020 - April 27, 2025
g Plant II
form
Discharge
Chongyan
registration 91421223732699160U002w April 28, 2020 - April 27, 2025
g Plant III
form
Winner
Pollutant
Medical 2024-04-03 Re-
discharge 91421100767435675X001V September 22, 2023 - September 21, 2028
(Huanggan applied
permit
g)
Winner Pollutant
2024-04-10 Re-
Medical discharge 914212217261049092001V April 10, 2024 - April 9, 2029
applied
(Jiayu) permit
Winner
Medical Pollutant
(Jiayu) - discharge 914212217261049092002P September 07, 2023 - September 06, 2028 Inactive
New permit
Factory
Winner Pollutant
2024-03-28 Changes
Medical discharge 914208006158216140001P August 27, 2023 - August 26, 2028
(per review)
(Jingmen) permit
Winner Pollutant
Medical discharge 914290067261112368001P December 13, 2022-August 30, 2027
(Tianmen) permit
Winner Pollutant
Medical discharge 91420000MA48TD7BXB001V September 01, 2023 - August 31, 2028
(Wuhan) permit
Winner Discharge
Medical registration 91420583706860379K001W April 30, 2020 - April 29, 2025
(Yichang) form
Winner Pollutant
Medical discharge 91440300MA5GKGMX3Y001W November 08, 2023 - November 07, 2028
(Shenzhen) permit
Pollutant
Winner
discharge 914503008988813841001U March 24, 2022 - March 23, 2027
Guilin
permit
Winner Discharge
Medical registration 91430723565949803B001X June 05, 2020 - June 04, 2025
(Hunan) form
Discharge
Zhejiang
registration 91330500051340478U001Z May 29, 2020 - May 28, 2025
Longterm
form
Names of
Category of main Numbe Emissio
Distributio Pollutant
Company or main pollutants Emiss r of Emission ns
n of emission Total emissions
subsidiary pollutants and and ion dischar concentration/inte Total emissions beyond
discharge standards approved
name characteristic characteri mode ge nsity standard
outlets implemented
pollutants stic outlets s
pollutants
Winner Not
Boiler 20mg/m
Medical Gaseous PM, SO2, NOX: 0T, SO2: 0T NOX: unlicensed, exceedin
/ 1 discharge / 50mg/m
(Chongyang) pollutants NOX (not used) SO2: unlicensed g the
outlet 200mg/m
Co., Ltd. standard
Winner PH, COD, Direc Not
Sewage 7.7, 56mg/L, 6-9, 80mg/L,
Medical Liquid BOD, t COD: 5.398T 、 COD ： 57.6T/a, exceedin
1 discharge 17.3mg/L, 20mg/L,
(Chongyang) pollutants NH3-N, disch g the
outlet 0.535mg/L, 7mg/L 10mg/L, 50mg/L NH3-N: 0.186T NH3-N：7.27T/a
Co., Ltd. SS arge standard
61
Names of
Category of main Numbe
Distributio Pollutant Emission
Company or main pollutants Emiss r of Emission
n of emission Total emissions s beyond
subsidiary pollutants and and ion dischar concentration/inte Total emissions
discharge standards approved standard
name characteristic characteri mode ge nsity
outlets implemented s
pollutants stic outlets
pollutants
Winner Not
Boiler 5.8mg/m 20mg/m
Medical Gaseous PM, SO2, NOX ： 1.216T, NOX: unlicensed, exceedin
/ 1 discharge 14mg/m 50mg/m
(Jiayu) Co., pollutants NOX SO2：0.178T SO2: unlicensed g the
outlet 128mg/m 200mg/m
Ltd. standard
PH,
Winner 7.0, 18mg/L, Not
COD, Direct Sewage 6-9, 80mg/L,
Medical Liquid 8.8mg/L, COD ： 5.584T, COD ： 44.7T/a, exceedin
BOD, discha 1 discharge 20mg/L,
(Jiayu) Co., pollutants 0.315mg/L, NH3-N：0.060T NH3-N：1.19T/a g the
NH3-N, rge outlet 10mg/L, 50mg/L
Ltd. 16mg/L standard
SS
Winner 1#/2# Not
5.0/4.0mg/m 20mg/m
Medical Gaseous PM, SO2, boiler NOX ： 6.368T, NOX: 23.52T/a, exceedin
/ 2 3/3mg/m 50mg/m
(Huanggang) pollutants NOX discharge SO2：0.007T SO2: unlicensed g the
127/97mg/m 200mg/m
Co., Ltd. outlet standard
PH,
Winner Indire 8.0, 65mg/L, 6-9, 500mg/L, Not
COD, Sewage
Medical Liquid ct 23.8mg/L, 300mg/L, COD ： 34.01T, COD ： 78.5T/a, exceedin
BOD, 1 discharge
(Huanggang) pollutants discha 1.47mg/L, 45mg/L, NH3-N：0.988T NH3-N：7.85T/a g the
NH3-N, outlet
Co., Ltd. rge 12mg/L 400mg/L standard
SS
Winner Not
Boiler 20mg/m
Medical Gaseous PM, SO2, 5.7mg/m NOX ： 1.68T, NOX ： 16.8764T/a, exceedin
/ 1 discharge 50mg/m
(Tianmen) pollutants NOX 3mg/m 63mg/m SO2：0.049T SO2：1.804T/ a g the
outlet 200mg/m
Co., Ltd. standard
PH,
Winner Indire 7.7, 59mg/L, 6-9, 400mg/L, Not
COD, Sewage COD ： 62.573T/а,
Medical Liquid ct 25.1mg/L, 150mg/L, COD ： 3.01T, exceedin
BOD, 1 discharge NH3-N ： б.
(Tianmen) pollutants discha 0.408mg/L, 30mg/L, NH3-N：0.098T g the
NH3-N, outlet 2573T/a
Co., Ltd. rge 15mg/L 250mg/L standard
SS
Winner Not
Medical Gaseous PM, SO2, exceedin
/ / / / / / No boiler, no license
(Wuhan) Co., pollutants NOX g the
Ltd. standard
PH,
Winner COD, Indire Not
Sewage 8.0, 185mg/L, 6-9, 500mg/L, COD ： 19.31T, COD ： 90.35T/a,
Medical Liquid BOD, ct exceedin
1 discharge 49.7mg/L, 300mg/L,
(Wuhan) Co., pollutants NH3-N, discha NH3-N：1.93T NH3-N：9.04T/a g the
outlet 1.04mg/L, 5 45mg/L, 64
Ltd. chromati rge standard
city
62
2024 Semiannual Report
Names of
Category of main Numbe
Distributio Pollutant
Company or main pollutants Emiss r of Emission Emission
n of emission Total emissions
subsidiary pollutants and and ion dischar concentration/inte Total emissions s beyond
discharge standards approved
name characteristic characteri mode ge nsity standards
outlets implemented
pollutants stic outlets
pollutants
Winner Not
Boiler 3.17mg/m 20mg/m
Medical Gaseous PM, SO2, NOX ： 1.07T, NOX: unlicensed, exceedin
/ 1 discharge 3mg/m 50mg/m
(Jingmen) pollutants NOX SO2：0.042T SO2: unlicensed g the
outlet 87.3mg/m 150mg/m
Co., Ltd. standard
Winner PH, COD, Indire 8.3, 49mg/L, 6-9, 200mg/L, Not
Sewage COD ： 6.03T, COD ： 19.48T/a,
Medical Liquid BOD, ct 13.2mg/L, 50mg/L, exceedin
1 discharge
(Jingmen) pollutants NH3-N, disch 0.214mg/L, 20mg/L, NH3-N：0.603T NH3-N：1.95T/a g the
outlet
Co., Ltd. SS arge 12mg/L 100mg/L standard
Yichang
Winner Boiler 20mg/m
Gaseous PM, SO2, Out of
Medical / 1 discharge / 50mg/m Unlicensed Unlicensed
pollutants NOX service
Textile Co., outlet 150mg/m
Ltd.
Yichang
PH, COD, Indire 6-9, 500mg/L, Not
Winner Sewage 7.6, 131mg/L,
Liquid BOD, ct 300mg/L, exceedin
Medical 1 discharge 39.3mg/L, Unlicensed Unlicensed
pollutants NH3-N, disch 45mg/L, g the
Textile Co., outlet 12.5mg/L, 45mg/L
SS arge 400mg/L standard
Ltd.
Shenzhen
Not
Branch of Production
Gaseous HCl, 2.86/0.9mg/m 100 mg/m 80 exceedin
Winner / 2 exhaust Unlicensed Unlicensed
pollutants VOC 3/0.94mg/ m mg/m g the
Medical Co., gas outlet
standard
Ltd.
PH, COD, Indire 6-9, 300mg/L, Not
Winner Guilin Sewage 7.58, 92mg/L,
Liquid BOD, ct 80mg/L, exceedin
Latex Co., 1 discharge 31.2mg/L, Unlicensed Unlicensed
pollutants NH3-N, disch 30mg/L, g the
Ltd. outlet 7.58mg/L, 22mg/L
SS arge 150mg/L standard
Winner COD, Indire Not
Sewage 100mg/L,
Medical Liquid BOD, ct 17mg/L, 4.1mg/L, exceedin
1 discharge 20mg/L, Unlicensed Unlicensed
(Hunan) Co., pollutants NH3-N, disch 0.51mg/L, 8mg/L g the
outlet 15mg/L, 70mg/L
Ltd. SS arge standard
Zhejiang
Indire Not
Longterm Sewage
Liquid PH, COD, ct 7.3, 208mg/L, 6-9, 500mg/L, exceedin
Medical 1 discharge Unlicensed Unlicensed
pollutants NH3-N disch 30.1mg/L 45mg/L g the
Technology outlet
arge standard
Co., Ltd.
63
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 the Environmental Protection Bureau
of Jiayu County was completed 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 were concrete structures with a service life of 20 years, and the
environmental protection equipment has a service life of 10 years.
Solid waste is mainly domestic waste of employees; impurities (cotton residue, cotton dust and cotton batting) generated 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 project’s wastewater mainly includes domestic, production, and experimental wastewater. 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 wastewater monitoring 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 were concrete structures with a service life of 20 years, and the
environmental protection equipment has a service life of 10 years. Gas-fired boiler decommissioning begins in the second half of 2023.
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 were concrete structures with a service life of 20 years, and the environmental protection equipment has a service life of 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.
64
2024 Semiannual Report
(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 were concrete structures with a service life of 20 years, and the environmental protection
equipment has a service life of 10 years.
For domestic waste and general solid wastes, disposal agreements are signed with disposal units, and for hazardous wastes, transfer agreements
are signed with third-party disposal units.
(6) Winner Medical (Huanggang) Co., Ltd.
It is a key wastewater discharge enterprise, and the wastewater discharged by the enterprise is mainly production wastewater and domestic
sewage. The wastewater mainly comes from spun lace forming, degreasing / bleaching, and soft water preparation processes. 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 were
concrete structures with a service life of 20 years, and the environmental protection equipment has a service life of 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, 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 wastewater station Phase II completed at the time of the Phase II project on June 13, 2023 for independent acceptance. The
third-level standard limits outlined in Table 4 of the Integrated Wastewater Discharge Standard (GB8978-1996) were implemented. The
sewage plant were concrete structures with a service life of 20 years, and the environmental protection equipment has a service life of 10 years.
The solid wastes of the project are mainly divided into general solid wastes, other solid wastes and hazardous solid wastes. Among them, cotton
impurities, leftover materials, defective products and fiber dust are purchased and recycled, and 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.
(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.
65
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 company’s integrated wastewater treatment station adopts air flotation + filtration process, and discharges the treated
wastewater into the municipal wastewater 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 photo-oxidation catalytic treatment equipment set and then
discharged through a 15m exhaust funnel. Process dust is treated by 1 set of cloth bag dust collectors and then discharged through a 15m
exhaust funnel.
The solid wastes are mainly the waste from the daily life of employees and solid wastes from the canteen are disposed of 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.
During the reporting period: the environmental protection facilities of each branch (subsidiary) are operating normally, and the monitoring
results of each discharge port meet the relevant standards.
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.
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2024 Semiannual Report
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 corresponding emergency procedures, and implement emergency rescue work in a
timely and effective manner, prevent and reduce the occurrence of accidents to the greatest extent, branches and subsidiaries of Winner Medical
Co., Ltd. have set up an environmental accident emergency leading group and formulated the Emergency Plan for Environmental Accidents.
Reporting period: On January 15, 2024, Winner Guilin Latex Co., Ltd. re-compiled the emergency plan for sudden environmental emergencies
after three years expired. On May 14, 2024, the emergency plan for sudden environmental accidents in Winner Medical (Chongyang) Co., Ltd.
expired for three years and was re-compiled.
Investment in environmental treatment and protection and related information on payment of environmental protection tax
During the reporting period, the Company and its subsidiaries paid RMB 63,600 of environmental protection tax.
Administrative penalties imposed due to environmental issues during the reporting period
Impacts on the
Rectification
Company or subsidiary production and
Reasons for penalty Violations Punishment measures of the
name operation of listed
Company
companies
None None None None None None
Other environmental information that should be disclosed
None
Measures taken to reduce its carbon emissions during the reporting period and their effects
√Applicable □ Not applicable
The company actively carried out energy-saving and carbon-reducing activities, mainly reducing energy consumption by replacing high-
efficiency motors, recovering waste heat, optimizing production technology, and intelligently controlling energy. During the reporting period,
it saved a total of more than RMB 4.9 million in energy costs.
Other information related to environmental protection
None
67
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
The Company takes “social value over corporate value” as one of its core operating principles and actively undertakes social responsibilities.
In terms of elderly care, the light skin care products featuring a degradable cotton surface represent a perfect blend of product innovation,
social responsibility and environmental sustainability. During the reporting period, we donated adult incontinence care products to many
nursing homes, demonstrating our commitment to supporting the elderly and bringing new hope to the cause of elderly care. For childcare, the
Company donated children’s shoes to Chongqing through Chongqing Children’s Relief Foundation to help infants and children grow up happily.
In terms of disaster relief, in June 2024, heavy rains affected many places in Meizhou, Guangdong Province. The Company actively deployed
iodophor cotton swabs, band-AIDS, sanitary wet tissues, medical surgical masks, gauze bandages and other materials to the Meizhou Red
Cross Foundation to help the affected people smoothly pass through the stages of emergency repair, transfer and resettlement.
In addition, the Company is committed to community engagement and actively participates in public welfare initiatives through party-building
efforts. During the reporting period, we organized over 10 volunteer activities, with more than 100 participants. Through our party-building
initiatives, we donated materials valued at RMB 5.6 million to organizations such as Longhua Charity Association, Longhua Women’s
Federation, Women’s and Children’s Foundation, Longhua Disabled Persons’ Federation, Shenzhen Social Welfare Guidance Center,
Shenzhen Youth League Committee, Shenzhen Express Industry Party Committee and other institutions. Our support extends to the elderly,
women and children, people in impoverished mountainous areas, medical institutions, two new employment groups, etc., benefiting millions
of people, which fully reflected Winner’s social responsibility.
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2024 Semiannual Report
Important Matters
69
Section VI Important Matters
I. Commitments Fulfilled within and not Fulfilled by the End of the Reporting Period by the
Company’s Actual Controller, Shareholders, Related Parties, Acquirers and Other Commitment
Parties
□ Applicable √ Not applicable
No commitments fulfilled within and within and not fulfilled by the end of the reporting period by the Company’s actual controller, shareholders,
related parties, acquirers and other commitment parties.
II. Non-operating Occupation of Funds of Listed Companies by Controlling Shareholders and
Their Related Parties
□ Applicable √ Not 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. Appointment of and Dismissal of Accounting Firms
Whether the semi-annual financial report has been audited
□Yes √No
The semi-annual report of the Company has not been audited.
V. Statement of the Board of Directors and the Board of Supervisors on the “Non-Standard Audit
Report” of the Accounting Firm during the Reporting Period
□ Applicable √ Not applicable
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2024 Semiannual Report
VI. Statement of the Board of Directors on the “Non-Standard Audit Report” of the Previous
Year
□ Applicable √ Not applicable
VII. Bankruptcy Reorganization
□ Applicable √ Not applicable
No bankruptcy reorganization of the Company during the reporting period.
VIII. Litigation Matters
Major litigation, arbitration matters
√Applicable □ Not applicable
Amount Whether to Implementation of Date
Basic information Disclo
involved form Progress of litigation Trial result and influence litigation of
of litigation sure
(10,000 estimated (arbitration) of litigation (arbitration) (arbitration) disclo
(arbitration) index
yuan) liabilities judgment sure
As of the
disclosure date of
The ruling of Case No.:
The People’s this report, the
(2019) Jiangxi National
Government of Zijin Company has
Arbitration Letter No. 095
County has not yet paid received a land
confirmed that the
the full amount of transfer deposit of
original Investment
compensation to the RMB 3 million and
Agreement was
Company in accordance compensation of
terminated, and the
with the award, and the about RMB 330
People’s Government of
Company has applied to million returned by
Zijin County had to return
the Heyuan City the Zijin County
3 million yuan of land
Winner Medical v. Intermediate People’s People’s
transfer deposit to the
People’s Court for enforcement Government, and
Company, and
Government of and has been accepted by the remaining
compensate for economic
Zijin County, the court. amount of about
losses of 550 million yuan
arbitration case of RMB 220 million
55,565.53 No as well as the lawyer’s
contract dispute On December 28, 2023, has not been
fees of 500,000 yuan and
[Case No.: (2019) Heyuan Intermediate received according
legal cost of 2.15532
GGZZ No. 095, People’s Court ruled that to the award. The
million yuan. The land,
(2022) Yue 16 the execution should be Company has
above-ground buildings,
Execution No. 299] terminated on the handed over the
equipment and facilities
grounds of “other project land,
and relevant supporting
circumstances that the above-ground
materials of Heyuan
people’s court thinks buildings,
Winner investment and
should be terminated”. equipment and
construction project were
The Company has facilities and
handed over to the
applied to the court to relevant
People’s Government of
terminate the execution supporting
Zijin County. There will
objection, and has now materials to the
be no adverse impact on
resumed enforcement. People’s
the Company
Government of
Zijin County.
Other litigation matters
√Applicable □ Not applicable
71
Amount Trial result and Implementation Date
Whether to Discl
Basic information of involved Progress of litigation influence of of litigation of
form estimated osure
litigation (arbitration) (10,000 (arbitration) litigation (arbitration) discl
liabilities index
yuan) (arbitration) judgment osure
Summary of other small In progress according to
lawsuits in which the the litigation/arbitration No significant
Executed
Company or its process, some cases have impacts on the
according to
subsidiaries are plaintiffs 8,313 No not yet been concluded, Company’s
litigation/arbitrat
that do not meet the and the concluded cases production and
ion process
criteria for disclosure of are executed according to operation
material litigation the process
Summary of other small
In progress according to
lawsuits in which the
the litigation/arbitration No significant
Company or its Executed
process, some cases have impacts on the
subsidiaries are according to
379 No not yet been concluded, Company’s
defendants that do not litigation/arbitrat
and the concluded cases production and
meet the criteria for ion process
are executed according to operation
disclosure of material
the process
litigation
IX. Punishment and Rectification
□ Applicable √ Not applicable
No punishment or rectification of the Company during the reporting period.
X. Credit Conditions of the Company, Its Controlling Shareholders and Actual Controllers
□ Applicable √ Not applicable
XI. 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.
72
2024 Semiannual Report
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, the
finance company controlled by the Company and the related parties.
6. Transactions between Finance Companies Controlled by the Company and Related Parties
□ Applicable √ Not 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.
XII. Major Contracts and Their Performance
1. Trusteeship, Contracting and Lease
(1) Trusteeship
□ Applicable √ Not applicable
No trusteeship of the Company during the reporting period.
73
(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. Major Contracts for Daily Operation
□ Applicable √ Not applicable
The Company did not have any major contracts for day-to-day operations during the reporting period.
4. Other Major Contracts
□ Applicable √ Not applicable
No other major contracts of the Company during the reporting period.
XIII. Description of Other Important Events
√Applicable □ Not applicable
In July 2023, the Company entered into an agreement relating to relocation compensation and resettlement with Shenzhen Xingda Real Estate
Development Co., Ltd. to carry out urban renewal and reconstruction in respect of the land and buildings on the ground of Shenzhen Longhua
District Winner Industrial Park held by the Company. However, due to significant changes in the real estate market, the project was postponed
in January 2024. In order to smoothly advance this project, shorten the idle time of land and reduce the uncertainty in engineering construction,
combined with the distribution of compensation for urban renewal and relocation in the current real estate market, the Company has conducted
several rounds of consultations with partners, initially formulated a solution and reached the signing intention of a supplementary agreement.
According to the original agreement, the Company obtained 39,240 square meters of office property, 200 square meters of commercial property,
11,220 square meters of residential property and RMB 415 million of compensation. According to the supplementary agreement to be signed,
the office property area and commercial property area obtained by the Company remain unchanged (39,240 square meters for office property
and 200 square meters for commercial property), while the residential property area and compensation amount obtained by the Company are
linked to the actual average transaction price of residential commercial housing obtained by Xingda Company. On July 26, 2024 and August
12, 2024, the Company held the 23rd Meeting of the 3rd Board of Directors and the 2nd Extraordinary Shareholders’ Meeting in 2024,
respectively, and reviewed and approved the Proposal on Signing the Supplementary Agreement on Relocation Compensation and Resettlement
of Urban Renewal Units in Winner Industrial Park. On August 19, 2024, the Company and the partner have signed the aforementioned
supplementary agreement.
74
2024 Semiannual Report
Since the residential property area and compensation amount for the Company are tied to the actual average transaction price of residential
properties, these figures remain uncertain amid significant fluctuations in the real estate market. It is expected that the signing of this contract
will have no impact on the Company’s 2024 financial statements. After the signing of the supplementary agreement, both parties will continue
to work diligently on key processes, including confirming the main body, building demolition, applying for construction land planning permit,
and signing land contracts. However, due to the long implementation period of this project, the Company will actively promote it, strengthen
communication and process control, and strive to reduce the uncertainty in the implementation process due to the adjustment of urban renewal
laws and policies, changes in urban planning, performance ability of partners, market, price and force majeure.
XIV. Major Events of Subsidiaries
□ Applicable √ Not applicable
75
76
Changes in Shares and Shareholders
2024 Semiannual Report
Section Ⅶ Changes in Shares and Shareholders
I. Changes in Shares
1. Changes in Shares
Unit: share
Before this change Increase/decrease (+, -) After this change
Share
New
Shar capital
issue
Proportio e increase
Quantity of Others Subtotal Quantity Proportion
n donat from
share
ion reserved
s
funds
I. Restricted shares 406,703,952 68.42% 100,575 100,575 406,804,527 69.15%
1. State shareholding
2. State legal person
shareholding
3. Other domestic
89,565 0.02% 100,575 100,575 190,140 0.03%
holdings
Wherein: domestic legal
person shareholding
Domestic natural
person 89,565 0.02% 100,575 100,575 190,140 0.03%
shareholding
4. Foreign shareholding 406,614,387 68.41% 406,614,387 69.12%
Wherein: foreign legal
406,614,387 68.41% 406,614,387 69.12%
person shareholding
Foreign natural
person
shareholding
II. Unrestricted shares 187,683,415 31.58% -6,195,234 -6,195,234 181,488,181 30.85%
1. RMB common share 187,683,415 31.58% -6,195,234 -6,195,234 181,488,181 30.85%
2. Foreign shares listed in
China
3. Foreign shares listed
abroad
4. Others
III. Total amount of shares 594,387,367 100.00% -6,094,659 -6,094,659 588,292,708 100.00%
Causes for change in shares
√Applicable □ Not applicable
On April 13, 2024, the Company cancelled 6,094,659 shares repurchased in 2021 (accounting for 1.03% of the Company’s total share capital
before cancellation). After cancellation, the Company’s total share capital decreased from 594,387,367 shares to 588,292,708 shares.
Approval of changes in shares
√Applicable □ Not applicable
77
The Company convened the 18th Meeting of the Third Board of Directors on December 19, 2023 and the 1st Extraordinary General Meeting
of Shareholders in 2024 on January 8, 2024, and considered and passed the Proposal on the Repurchase and Cancellation of Remaining Shares
in the Special Securities Account and the Proposal on the Amendment of the Articles of Association of the Company and Registration of the
Industrial and Commercial Changes. Based on the actual progress of the company’s employee stock ownership plan and equity incentive plan
and the number of remaining stocks in the Company’s repurchase plan in 2021, the Company intends to change the 6,094,659 shares remaining
in the repurchase account excluding the first employee stock ownership plan (including the reserved part) from the original purpose of “used
for the Company’s employee stock ownership plan or equity incentive” to “used for cancellation and reduction of the Company’s registered
capital”.
Transfer of share changes
□ Applicable √ Not applicable
Implementation progress of share repurchase
√Applicable □ Not applicable
On January 29, 2024, the Company held the 19th Meeting of the 3rd Board of Directors and the 14th Meeting of the 3rd Board of Supervisors,
and deliberated and passed the Proposal on Share Repurchase Scheme. With confidence in the future development and a strong belief in its
value, in order to enhance investor confidence, further build a more stable and high-quality management team, establish and improve the
Company’s long-term incentive mechanism. The plan is designed to establish and improve the Company’s long-term incentive mechanisms,
fully engage management and key personnel, strengthen team cohesion, align the interests of shareholders with those of the Company and core
employees, and promote sustainable long-term growth. The Company intends to utilize its own funds, ranging from RMB 100 to 200 million,
to repurchase shares at a price not exceeding RMB 46 per share. As of April 29, 2024, the Company repurchased 5,807,900 shares of the
Company by way of centralized competitive bidding trading through the special securities account for repurchase, accounting for 0.9872% of
the total share capital of the Company, with the highest transaction price of RMB 39.79 per share and the lowest transaction price of RMB
29.25 per share, for a total transaction amount of RMB 194,943,744.29 (excluding transaction fees). The share repurchase program has been
implemented.
The Company held the 23rd Meeting of the 3rd Board of Directors and 18th Meeting of the 3rd Board of Supervisors on July 26, 2024, and
the 2nd Extraordinary General Meeting of Shareholders in 2024 on August 12, 2024, respectively, and deliberated and passed the Proposal on
the Cancellation of the Remaining Shares in the Repurchase of Dedicated Securities Accounts. The Company intends to change the purpose
of 5,962,900 shares in the Repurchase Account from “used for the Company’s employee stock ownership plan or equity incentive” to “used
for cancellation and reduction of the Company’s registered capital”.
Implementation progress of reducing repurchased shares by centralized competitive bidding
□ Applicable √ Not applicable
Influence of share changes on the basic earnings per share, diluted earnings per share, 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 earnings per share, diluted earnings per share, 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. Major
Accounting Data and Financial Indicators.”
Other information the Company deems necessary or required by the securities regulatory authorities to disclose
□ Applicable √ Not applicable
78
2024 Semiannual Report
2. Changes in Restricted Shares
√Applicable □ Not applicable
Unit: share
Number of
shares Number of
Number of released restricted Number of
restricted shares from shares restricted shares Reasons for The proposed date of
Shareholder’s name
at the beginning restricted increased in at the end of the restricted sale lifting the restricted sale
of the period sale in the the current period
current period
period
Self-commitment
to extend the
Winner Group Limited 406,614,387 0 0 406,614,387 September 16, 2025
initial sale
restriction period
Unlock 25% of the total
Shares locked by
number of shares held at
directors,
the beginning of each
Fang Xiuyuan 42,000 0 45,000 87,000 supervisors and
year until the number of
senior
shares held does not
management
exceed 1,000 shares.
Adhere to relevant
Shares locked by
regulations regarding
directors,
share sales restrictions
Wang Ying 42,000 10,500 0 31,500 supervisors and
imposed by departing
senior
directors, supervisors,
management
and senior management
Unlock 25% of the total
Shares locked by
number of shares held at
directors,
the beginning of each
Chen Huixuan 5,565 0 17,475 23,040 supervisors and
year until the number of
senior
shares held does not
management
exceed 1,000 shares.
Adhere to relevant
Shares locked by
regulations regarding
directors,
share sales restrictions
Xu Xiaodan 0 0 17,100 17,100 supervisors and
imposed by departing
senior
directors, supervisors,
management
and senior management
Adhere to relevant
Shares locked by
regulations regarding
directors,
share sales restrictions
Liu Hua 0 0 16,500 16,500 supervisors and
imposed by departing
senior
directors, supervisors,
management
and senior management
Adhere to relevant
Shares locked by
regulations regarding
directors,
share sales restrictions
Zhang Li 0 0 11,250 11,250 supervisors and
imposed by departing
senior
directors, supervisors,
management
and senior management
Unlock 25% of the total
Shares locked by
number of shares held at
directors,
the beginning of each
Zhang Yan 0 0 3,750 3,750 supervisors and
year until the number of
senior
shares held does not
management
exceed 1,000 shares.
Total 406,703,952 10,500 111,075 406,804,527 -- --
II. Securities Issuance and Listing
□ Applicable √ Not applicable
79
III. Number and Shareholding of the Company’s Shareholders
Unit: share
Total number of preferred shareholders
Total number of common Total number of shareholders
with voting rights restored at the end of
shareholders at the end of the 29,167 0 holding special voting shares (if 0
the reporting period (if any) (see Note
reporting period any)
8)
Ordinary shareholders holding more than 5% of shares or top 10 shareholders’ shareholdings (excluding shares lent through the transfer facility)
Increase or Pledge, mark or frozen
Number of Number of Number of
decrease
Shareholder’s Shareholder Sharehol shares held at the shares held with shares held with
during the Status of
name nature ding ratio end of the limited sales unlimited sales Quantity
reporting shares
reporting period conditions conditions
period
Winner Group Overseas
69.12% 406,614,387 0 406,614,387 0 N/A 0
Limited legal person
Beijing Sequoia
Xinyuan Equity Domestic
Investment Center non-state 2.74% 16,142,938 -8,745,089 0 16,142,938 N/A 0
(limited legal person
partnership)
Xiamen Leyuan
Investment Domestic
Partnership non-state 2.74% 16,142,550 0 0 16,142,550 N/A 0
(Limited legal person
Partnership)
Xiamen Yutong
Investment Domestic
Partnership non-state 1.46% 8,560,222 0 0 8,560,222 N/A 0
(Limited legal person
Partnership)
Xiamen Huikang
Investment Domestic
Partnership non-state 0.88% 5,167,887 0 0 5,167,887 N/A 0
(Limited legal person
Partnership)
Hong Kong
Overseas
Securities Clearing 0.65% 3,794,892 1,321,781 0 3,794,892 N/A 0
legal person
Company Ltd.
Industrial and
Commercial Bank
Others 0.63% 3,733,629 884,900 0 3,733,629 N/A 0
of China Limited -
E Fund ETF
Huaxia Life
Insurance Co., Ltd. Others 0.63% 3,693,940 759,400 0 3,693,940 N/A 0
- Own funds
Agricultural Bank
of China Limited. -
Others 0.49% 2,909,460 1,573,520 0 2,909,460 N/A 0
CSI500 Index
Open-ended Fund
Xiamen Zepeng
Investment Domestic
Partnership non-state 0.45% 2,650,223 0 0 2,650,223 N/A 0
(Limited legal person
Partnership)
80
2024 Semiannual Report
Strategic investors or general
legal persons becoming the top 10
None
shareholders due to the allotment
of new shares (if any)
Description of the above-
mentioned shareholder None
association or concerted action
Description of the above
shareholders involved in
None
entrusting / entrusted voting right
and waiver of voting right
Special note on the existence of
As of June 30, 2024, the Company’s repurchased 5,962,900 shares of the Company held in the “special securities
repurchase special accounts
account for the repurchase of Winner Medical Co., Ltd.”
among the top 10 shareholders
Shareholdings of the top 10 shareholders with unlimited sales conditions (excluding shares lent through transfer facility and shares locked up by
executives)
Number of shares with unlimited sales Share type
Shareholder’s name conditions held at the end of the reporting
period Share type Quantity
Beijing Sequoia Xinyuan Equity Investment Center
16,142,938 RMB common share 16,142,938
(limited partnership)
Xiamen Leyuan Investment Partnership (Limited
16,142,550 RMB common share 16,142,550
Partnership)
Xiamen Yutong Investment Partnership (Limited
8,560,222 RMB common share 8,560,222
Partnership)
Xiamen Huikang Investment Partnership (Limited
5,167,887 RMB common share 5,167,887
Partnership)
Hong Kong Securities Clearing Company Ltd. 3,794,892 RMB common share 3,794,892
Industrial and Commercial Bank of China Limited -
3,733,629 RMB common share 3,733,629
E Fund ETF
Huaxia Life Insurance Co., Ltd. - Own funds 3,693,940 RMB common share 3,693,940
Agricultural Bank of China Limited. - CSI500 Index
2,909,460 RMB common share 2,909,460
Open-ended Fund
Xiamen Zepeng Investment Partnership (Limited
2,650,223 RMB common share 2,650,223
Partnership)
Shenzhen Qianhai Daoming Investment Management
Co., Ltd. - Daoming No. 1 Private Securities 1,835,641 RMB common share 1,835,641
Investment Fund
Description of the association or concerted action
between top 10 public shareholders with unlimited
sales conditions, and between top 10 public None
shareholders with unlimited sales conditions and top
10 shareholders
Description of the top 10 common shareholders
participating in the financing and securities financing None
business (if any)
Shareholders holding more than 5% of shares, the top 10 shareholders and the top 10 shareholders with unrestricted shares participating in the
refinancing business to lend shares.
√Applicable □ Not applicable
81
Unit: share
Shareholders holding more than 5% of shares, the top 10 shareholders and the top 10 shareholders with unrestricted shares participating in
the refinancing business to lend shares.
Holdings in ordinary Shares lent under Holdings in general Shares loaned through
accounts and credit refinancing at the start of accounts and credit refinancing at the end of
accounts at the beginning the period that remain accounts at the end of the the period that are yet to be
Shareholder’s name of the period outstanding period returned
(full name)
Proportion Proportion Proportion Proportion
Total to total Total to total Total to total Total to total share
share capital share capital share capital capital
Agricultural Bank of
China Limited. -
1,335,940 0.22% 386,000 0.06% 2,909,460 0.49% 108,400 0.02%
CSI500 Index Open-
ended Fund
Industrial and
Commercial Bank of
2,848,729 0.48% 52,700 0.01% 3,733,629 0.63% 106,000 0.02%
China Limited - E
Fund ETF
The top 10 shareholders and the top 10 shareholders of unrestricted shares have changed from the previous period due to lending/returning of
refinancing.
□ Applicable √ Not applicable
Whether the company has a voting rights differential arrangement
□Yes √No
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
IV. 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
82
2024 Semiannual Report
V. Equity Changes of Directors, Supervisors and Senior Management
√Applicable □ Not applicable
Number of
Number of Number of restricted Number of Number of
Number of
shares shares Number of shares restricted restricted
shares held
Status increased decreased shares held granted at shares shares
at the
Name Position of in the in the at the end of the granted in granted at
beginning of
service current current the period beginning the current the end of
the period
period period (shares) of the period the period
(shares)
(shares) (shares) period (shares) (shares)
(shares)
Director, Deputy
Fang General Manager, Incum
56,000 60,000 0 116,000 28,000 0 0
Xiuyuan Chief Financial bent
Officer
Xu
Director Resign 0 22,800 0 22,800 16,800 0 0
Xiaodan
Zhang Incum
Director 0 5,000 0 5,000 0 0 0
Yan bent
Liu Hua Supervisor Resign 0 22,000 0 22,000 0 0 0
Deputy General
Chen Manager, Secretary Incum
7,420 23,300 0 30,720 16,800 0 0
Huixuan to the Board Of bent
Directors
Deputy general
Zhang Li Resign 0 15,000 0 15,000 28,000 0 0
manager
Total -- -- 63,420 148,100 0 211,520 89,600 0 0
VI. Change in Controlling Shareholders or Actual Controllers
Change of controlling shareholders during the reporting period
□ Applicable √ Not applicable
No change in controlling shareholders during the reporting period.
Changes in actual controller during the reporting period
□ Applicable √ Not applicable
No change in actual controller during the reporting period.
83
Section Ⅷ Information Related to Preferred Shares
Applicable
Information Related to Preferred Shares
84
N/A
2024 Semiannual Report
Section Ⅸ Information Related to Bonds
Applicable
85
N/A
Information Related to Bonds
86 Financial Report
2024 Semiannual Report
Section Ⅹ Financial Report
I. Audit Report
Whether the semi-annual report is audited
□Yes √No
The Company’s semi-annual financial report has not been audited.
89
II. Financial Statements
Unit of statements in financial notes: RMB
1. Consolidated Balance Sheet
Prepared by: Winner Medical Co., Ltd. June 30, 2024 Unit: yuan
Item Closing Balance Balance at the beginning of the period
Current assets:
Cash and cash equivalents 3,917,672,185.79 4,706,132,071.27
Deposit reservation for balance
Lending funds
Tradable Financial Assets 2,524,636,253.55 2,850,058,540.71
Derivative Financial Assets
Notes Receivable 13,038,762.74 42,963,076.53
Accounts Receivable 939,231,196.69 768,602,289.60
Amounts Receivable Financing 36,356,429.51 29,348,618.44
Advances to Suppliers 112,983,774.44 122,281,742.75
Premiums receivables
Reinsurance accounts receivable
Provision of cession receivable
Other Receivables 225,809,699.10 218,913,405.18
Including: Interest receivable
Dividends receivable
Redemptory cash and cash equivalents
for sale
Inventory 1,453,182,715.60 1,434,326,287.96
Including: data resources
Contract Assets
Assets Held for Sales
Non-Current Assets Due within a Year 4,500,791.23 4,379,308.17
Other Current Assets 182,630,205.72 378,853,652.64
Total current assets 9,410,042,014.37 10,555,858,993.25
90
2024 Semiannual Report
Item Closing Balance Balance at the beginning of the period
Non-current assets:
Loans and advances
Debt Investment
Other Debt Investments
Long-Term Receivables 36,657,910.53 35,689,264.21
Long-Term Equity Investment 441,256,304.67 20,879,244.20
Other equity instrument
investments
Other Non-Current Financial
70,000,000.00 70,000,000.00
Assets
Investment Real Estates 7,166,185.13 7,693,341.79
Fixed Assets 2,903,124,395.97 2,749,018,750.62
Construction in Progress 1,030,446,202.20 984,571,329.05
Productive Biological Assets
Oil and Gas Assets
Right-of-Use Assets 421,817,678.37 417,496,021.36
Intangible Assets 960,815,052.19 995,228,233.51
Including: data resources
Development expenditure
Including: data resources
Goodwill 866,502,422.61 864,289,002.45
Long-Term Unamortized Expenses 125,412,811.84 131,090,470.15
Deferred income tax assets 161,723,419.77 175,351,248.02
Other Non-Current Assets 133,871,114.92 104,856,551.36
Total non-current assets 7,158,793,498.20 6,556,163,456.72
Total assets 16,568,835,512.57 17,112,022,449.97
Current liabilities
Short-Term Loans 1,170,327,194.78 1,493,238,955.00
Borrowings from central bank
Borrowing funds
Tradable Financial Liabilities
Derivative Financial Liabilities
91
Item Closing Balance Balance at the beginning of the period
Notes Payable 363,977,108.89 315,902,844.15
Accounts Payable 832,423,316.30 1,116,802,220.38
Advance from Customers
Contract Liabilities 179,911,770.00 193,262,892.15
Financial assets sold for repurchase
Deposits from customers and interbank
Acting trading securities
Acting underwriting securities
Payroll Payable 216,815,783.41 254,475,235.72
Taxes Payable 93,252,897.83 62,877,779.86
Other Payables 727,222,395.14 591,310,917.61
Including: Interest payable
Dividends payable 203,307,193.50
Fees and commissions payable
Dividend payable for reinsurance
Liabilities Held for Sales
Non-Current Liabilities Due within
373,940,213.86 223,426,826.45
One Year
Other Current Liabilities 18,514,985.13 19,712,328.19
Total current liabilities 3,976,385,665.34 4,271,009,999.51
Non-current liabilities
Reserve fund for insurance contracts
Long-Term Loans 170,000,000.00
Bonds Payable
Including: preferred share
Perpetual bond
Lease Liabilities 304,172,545.81 292,009,504.04
Long-Term Payable 0.00
Long-Term Payroll Payable 8,511,000.00 8,511,000.00
Estimated Liabilities
Deferred Income 116,525,098.52 121,649,364.97
92
2024 Semiannual Report
Item Closing Balance Balance at the beginning of the period
Deferred income tax liabilities 132,198,461.11 138,520,778.30
Other Non-Current Liabilities
Total non-current liabilities 561,407,105.44 730,690,647.31
Total liabilities 4,537,792,770.78 5,001,700,646.82
Owner’s equity:
Capital Stock 588,292,708.00 594,387,367.00
Other Equity Instruments
Including: preferred share
Perpetual bond
Capital Reserve 3,938,910,622.54 4,381,126,487.29
Less: treasury stock 217,314,795.89 473,552,442.85
Other Comprehensive Income -716,170.70 2,215,369.44
Special Reserve
Surplus Reserve 420,212,778.13 420,212,778.13
General risk provision
Undistributed Profit 6,701,820,244.20 6,608,834,768.99
Total owners’ equities attributable to the
11,431,205,386.28 11,533,224,328.00
owners of parent company
Minority equity 599,837,355.51 577,097,475.15
Total owners’ equities 12,031,042,741.79 12,110,321,803.15
Total liabilities and owners’ equities 16,568,835,512.57 17,112,022,449.97
Legal representative: Li Jianquan Head of accounting work: Fang Xiuyuan Head of accounting institution: Zhao Yan
93
2. Balance Sheet of Parent Company
Prepared by: Winner Medical Co., Ltd. Unit: yuan
Item Closing Balance Balance at the beginning of the period
Current assets:
Cash and cash equivalents 2,844,394,239.85 3,709,959,628.26
Tradable Financial Assets 2,424,523,614.28 2,723,751,837.29
Derivative Financial Assets
Notes Receivable 2,139,017.54 4,467,239.17
Accounts Receivable 385,544,279.91 329,056,250.56
Amounts Receivable Financing 15,349,054.92 3,373,685.21
Advances to Suppliers 860,470,380.86 819,879,677.04
Other Receivables 116,045,259.43 116,040,893.47
Including: Interest receivable
Dividends receivable
Inventory 230,042,380.58 251,311,204.70
Including: data resources
Contract Assets
Assets Held for Sales
Non-Current Assets Due within a Year 4,500,791.23 4,379,308.17
Other Current Assets 134,461,309.68 219,250,046.91
Total current assets 7,017,470,328.28 8,181,469,770.78
Non-current assets:
Debt Investment
Other Debt Investments
Long-Term Receivables 36,657,910.53 35,689,264.21
Long-Term Equity Investment 4,057,908,988.99 3,628,308,515.87
Other equity instrument investments
Other Non-Current Financial Assets 70,000,000.00 70,000,000.00
Investment Real Estates
Fixed Assets 40,367,376.01 39,029,180.33
94
2024 Semiannual Report
Item Closing Balance Balance at the beginning of the period
Construction in Progress 142,980,344.54 81,523,183.74
Productive Biological Assets
Oil and Gas Assets
Right-of-Use Assets 42,580,000.88 53,018,721.37
Intangible Assets 41,711,541.25 42,201,830.86
Including: data resources
Development expenditure
Including: data resources
Goodwill
Long-Term Unamortized Expenses 16,956,750.16 19,425,804.21
Deferred income tax assets 40,699,279.19 38,890,354.71
Other Non-Current Assets 26,295,710.30 41,395,668.54
Total non-current assets 4,516,157,901.85 4,049,482,523.84
Total assets 11,533,628,230.13 12,230,952,294.62
Current liabilities
Short-Term Loans 910,130,600.00 1,270,138,900.00
Tradable Financial Liabilities
Derivative Financial Liabilities
Notes Payable 77,345,909.80 104,617,096.39
Accounts Payable 272,597,560.96 247,993,184.23
Advance from Customers
Contract Liabilities 80,776,953.02 90,354,800.16
Payroll Payable 47,500,861.38 62,965,400.32
Taxes Payable 13,546,668.36 2,852,502.16
Other Payables 522,057,520.98 358,800,377.50
Including: Interest payable
Dividends payable 203,307,193.50
Liabilities Held for Sales
Non-Current Liabilities Due within
204,810,167.93 47,239,311.11
One Year
Other Current Liabilities 3,828,775.12 4,700,685.90
95
Item Closing Balance Balance at the beginning of the period
Total current liabilities 2,132,595,017.55 2,189,662,257.77
Non-current liabilities
Long-Term Loans 170,000,000.00
Bonds Payable
Including: preferred share
Perpetual bond
Lease Liabilities 42,792,761.26 51,992,935.59
Long-Term Payable
Long-Term Payroll Payable
Estimated Liabilities
Deferred Income 560,602.11 1,312,817.62
Deferred income tax liabilities 9,965,639.42 8,333,039.89
Other Non-Current Liabilities
Total non-current liabilities 53,319,002.79 231,638,793.10
Total liabilities 2,185,914,020.34 2,421,301,050.87
Owner’s equity:
Capital Stock 588,292,708.00 594,387,367.00
Other Equity Instruments
Including: preferred share
Perpetual bond
Capital Reserve 3,938,164,250.05 4,380,380,114.80
Less: treasury stock 217,314,795.89 473,552,442.85
Other Comprehensive Income
Special Reserve
Surplus Reserve 411,397,111.21 411,397,111.21
Undistributed Profit 4,627,174,936.42 4,897,039,093.59
Total owners’ equities 9,347,714,209.79 9,809,651,243.75
Total liabilities and owners’ equities 11,533,628,230.13 12,230,952,294.62
Legal representative: Li Jianquan Head of accounting work: Fang Xiuyuan Head of accounting institution: Zhao Yan
96
2024 Semiannual Report
3. Consolidated Statement of Income
Prepared by: Winner Medical Co., Ltd. Unit: yuan
Item HY 2024 HY 2023
I. Total revenue 4,033,505,104.33 4,266,838,038.66
Including: Revenue 4,033,505,104.33 4,266,838,038.66
Interest revenue
Premium earned
Fee and commission income
II. Operating cost 3,576,014,244.81 3,500,655,804.36
Including: Cost of sale 2,068,470,442.58 2,071,428,206.72
Interest expenditure
Fee and commission expense
Surrender value
Net payments for insurance claims
Net reserve fund extracted for insurance liability
Bond insurance expense
Reinsurance costs
Taxes and Surcharges 36,656,279.12 37,346,208.61
Selling Expenses 1,055,741,084.22 960,442,911.44
Administrative Expenses 309,446,026.40 289,596,702.14
R&D Expenses 143,142,952.33 194,636,202.14
Financial Expenses -37,442,539.84 -52,794,426.69
Including: interest expenditure 24,015,659.66 32,891,514.25
Interest revenue 57,012,846.01 69,863,134.66
Plus: other incomes 37,282,933.10 46,680,694.51
Income from investment (loss expressed with “—”) 33,445,096.19 39,412,441.13
Including: Income from investment of joint venture and
-7,669,213.76 1,580,818.74
cooperative enterprise
Income from derecognition of financial assets
measured at amortized cost
Exchange gain (loss expressed with “—”)
Net exposure hedging gain (loss expressed with “—”)
97
Item HY 2024 HY 2023
Income from fair value changes (loss expressed with “—”) 7,577,712.84 59,639,836.03
Credit impairment losses (loss expressed with “—”) -8,295,817.44 2,831,973.61
Assets impairment losses (loss expressed with “—”) -55,975,503.16 -100,794,883.37
Income from disposal of assets (loss expressed with “—”) 1,930,800.28 5,324,751.10
III. Operating profit (loss to be filled out with the minus sign “—”) 473,456,081.33 819,277,047.31
Plus: Non-revenue 6,143,356.51 6,702,598.77
Less: non-operating expenditure 6,218,160.01 4,906,948.03
IV. Total profit (total loss to be filled out with the minus sign “—”) 473,381,277.83 821,072,698.05
Less: Income tax expenses 67,151,050.24 114,886,459.15
V. Net profit (net loss to be filled out with the minus sign “—”) 406,230,227.59 706,186,238.90
(I) Classified by business continuity
1. Net profits from going concern (net loss expressed with “—”) 406,230,227.59 706,186,238.90
2. Net profits from discontinuing operation (net loss expressed with “—”)
(II) Classified by ownership
1. Net profit attributable to shareholders of parent company (net loss
384,150,379.21 681,617,022.69
expressed with “—”)
2. Minority interest income (net loss expressed with “—”) 22,079,848.38 24,569,216.21
VI. Net amount of other comprehensive income after tax -5,381,735.14 2,650,491.58
Net amount of other comprehensive income after tax attributed to parent
-2,931,540.14 1,563,872.28
company owners
(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
-2,931,540.14 1,563,872.28
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
98
2024 Semiannual Report
Item HY 2024 HY 2023
6. Balance arising from the translation of foreign currency
-2,931,540.14 1,563,872.28
financial statements
7. Others
Net amount of other comprehensive income after tax attributed to
-2,450,195.00 1,086,619.30
minority shareholders
VII. Total comprehensive income 400,848,492.45 708,836,730.48
Total comprehensive income attributed to parent company owners 381,218,839.07 683,180,894.97
Total comprehensive income attributed to minority shareholders 19,629,653.38 25,655,835.51
VIII. Earnings per share:
(I) Basic earnings per share 0.6568 1.1599
(II) Diluted earnings per share 0.6568 1.1599
Legal representative: Li Jianquan Head of accounting work: Fang Xiuyuan Head of accounting institution: Zhao Yan
99
4. Income Statement of Parent Company
Prepared by: Winner Medical Co., Ltd. Unit: yuan
Item HY 2024 HY 2023
I. Revenue 1,142,885,165.37 1,688,984,838.44
Subtract: Cost of sale 843,883,491.16 1,107,234,465.65
Taxes and Surcharges 2,846,781.23 6,199,059.31
Selling Expenses 187,126,269.52 171,944,157.54
Administrative Expenses 113,371,192.10 119,410,984.58
R&D Expenses 35,362,397.99 67,280,160.05
Financial Expenses -39,776,317.53 -54,781,345.93
Including: interest expenditure 12,318,004.15 21,619,496.73
Interest revenue 49,479,261.49 63,513,874.74
Plus: other incomes 3,495,598.59 9,242,864.74
Income from investment (loss expressed with “—”) 39,088,282.06 33,524,358.49
Including: Income from investment of joint venture and
115,196.26 1,580,818.74
cooperative enterprise
Income from derecognition of financial assets
measured at amortized cost
Net exposure hedging gain (loss expressed with “—”)
Income from fair value changes (loss expressed with “—”) 8,771,776.99 58,989,477.64
Credit impairment losses (loss expressed with “—”) -3,330,023.26 4,720,507.23
Assets impairment losses (loss expressed with “—”) -29,827,536.85 -57,802,348.67
Income from disposal of assets (loss expressed with “—”) -5,882.01 0.00
II. Operating profit (loss to be filled out with the minus sign “—”) 18,263,566.42 320,372,216.67
Plus: Non-revenue 2,874,156.67 2,045,766.35
Less: non-operating expenditure 13,301.22 167,212.91
III. Total profit (total loss to be filled out with the minus sign “—”) 21,124,421.87 322,250,770.11
Less: Income tax expenses -176,324.95 43,991,014.19
IV. Net profit (net loss to be filled out with the minus sign “—”) 21,300,746.82 278,259,755.92
(I) Net profits from going concern (net loss expressed with “—”) 21,300,746.82 278,259,755.92
(II) Net profits from discontinuing operation (net loss expressed with
“—”)
V. Net amount of other comprehensive income after tax
100
2024 Semiannual Report
Item HY 2024 HY 2023
(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 21,300,746.82 278,259,755.92
VII. Earnings per share:
(I) Basic earnings per share
(II) Diluted earnings per share
Legal representative: Li Jianquan Head of accounting work: Fang Xiuyuan Head of accounting institution: Zhao Yan
101
5. Consolidated Statement of Cash Flow
Prepared by: Winner Medical Co., Ltd. Unit: yuan
Item HY 2024 HY 2023
I. Cash flow from financing activities:
Cash from selling goods or offering labor 3,990,560,078.41 4,149,289,686.79
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 65,619,772.70 39,145,772.95
Other cash received related to operating activities 55,894,748.84 152,209,281.69
Subtotal of cash inflow from operating activities 4,112,074,599.95 4,340,644,741.43
Cash paid to buy products and accept labor services 2,474,941,986.21 2,347,177,845.94
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 866,973,104.55 945,931,347.90
Taxes and fees paid 229,343,272.00 539,168,797.14
Other cash paid related to operating activities 347,482,720.43 350,188,037.56
Subtotal of cash outflow from operating activities 3,918,741,083.19 4,182,466,028.54
Net cash flow from operating activities 193,333,516.76 158,178,712.89
102
2024 Semiannual Report
Item HY 2024 HY 2023
II. Cash flow from investment activities:
Cash from investment withdrawal 1,464,000,000.00 3,567,682,315.00
Cash from investment income 106,178,840.35 74,573,040.85
Net cash from disposal of fixed assets, intangible assets and other long-
1,341,937.98 3,744,427.60
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 1,571,520,778.33 3,645,999,783.45
Cash paid for the purchase and construction of fixed assets, intangible
436,264,526.19 423,829,164.39
assets and other long-term assets
Cash paid for investment 1,559,074,000.00 2,820,573,504.00
Net cash received from reinsurance business
Net cash paid for obtaining subsidiaries and other business units 55,605.69 21,176,136.32
Other cash paid related to investment activities
Subtotal of cash outflow from investment activities 1,995,394,131.88 3,265,578,804.71
Net cash flow from investing activities -423,873,353.55 380,420,978.74
III. Cash flow from financing activities:
Receipts from equity securities 200,000.00
Including: Cash received from subsidies’ absorption of minority
200,000.00
shareholders’ investment
Cash received from borrowings 1,170,196,567.28 1,113,000,000.00
Other cash received related to financing activities 180,000,000.00 50,000,000.00
Subtotal of cash inflow from financial activities 1,350,396,567.28 1,163,000,000.00
Cash repayments of amounts borrowed 1,503,100,000.00 1,453,050,000.00
Cash paid for distribution of dividends or profits and for interest
99,563,509.69 281,994,493.51
expenses
Including: Dividends and profits paid by subsidiaries to minority
shareholders
Other cash paid related to financing activities 308,629,278.45 106,678,094.74
Subtotal of cash outflow from financial activities 1,911,292,788.14 1,841,722,588.25
Net cash flow from financing activities -560,896,220.86 -678,722,588.25
IV. Impact of exchange rate movements on cash and cash equivalents 8,094,521.16 5,741,177.61
V. Net increase in cash and cash equivalents -783,341,536.49 -134,381,719.01
Plus: Balance of cash and cash equivalents at the beginning of the period 4,677,340,782.45 4,370,821,958.17
VI. Balance of cash and cash equivalents at end of period 3,893,999,245.96 4,236,440,239.16
Legal representative: Li Jianquan Head of accounting work: Fang Xiuyuan Head of accounting institution: Zhao Yan
103
6. Cash Flow Statement of Parent Company
Prepared by: Winner Medical Co., Ltd. Unit: yuan
Item HY 2024 HY 2023
I. Cash flow from financing activities:
Cash from selling goods or offering labor 1,461,979,627.57 2,009,939,115.28
Refund of tax and levies 48,183,207.49 30,090,751.05
Other cash received related to operating activities 12,521,749.16 127,280,729.54
Subtotal of cash inflow from operating activities 1,522,684,584.22 2,167,310,595.87
Cash paid to buy products and accept labor services 540,875,383.95 793,781,802.03
Cash paid to and for employees 198,607,174.73 270,071,817.38
Taxes and fees paid 3,548,498.60 188,487,201.67
Other cash paid related to operating activities 225,362,322.31 545,109,264.17
Subtotal of cash outflow from operating activities 968,393,379.59 1,797,450,085.25
Net cash flow from operating activities 554,291,204.63 369,860,510.62
II. Cash flow from investment activities:
Cash from investment withdrawal 1,214,000,000.00 2,651,995,000.00
Cash from investment income 102,459,308.04 66,170,519.75
Net cash from disposal of fixed assets, intangible assets and other long-
289,861.38 3,011,395.00
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 1,316,749,169.42 2,721,176,914.75
Cash paid for the purchase and construction of fixed assets, intangible
97,016,023.57 68,641,277.60
assets and other long-term assets
Cash paid for investment 1,334,074,000.00 2,123,934,344.00
Net cash paid for obtaining subsidiaries and other business units
Other cash paid related to investment activities
Subtotal of cash outflow from investment activities 1,431,090,023.57 2,192,575,621.60
Net cash flow from investing activities -114,340,854.15 528,601,293.15
III. Cash flow from financing activities:
Receipts from equity securities
Cash received from borrowings 200,000,000.00 400,000,000.00
104
2024 Semiannual Report
Item HY 2024 HY 2023
Other cash received related to financing activities 80,000,000.00 50,000,000.00
Subtotal of cash inflow from financial activities 280,000,000.00 450,000,000.00
Cash repayments of amounts borrowed 1,280,000,000.00 1,280,000,000.00
Cash paid for distribution of dividends or profits and for
99,293,133.63 257,603,321.30
interest expenses
Other cash paid related to financing activities 208,415,552.24 11,308,615.92
Subtotal of cash outflow from financial activities 1,587,708,685.87 1,548,911,937.22
Net cash flow from financing activities -1,307,708,685.87 -1,098,911,937.22
IV. Impact of exchange rate movements on cash and cash
2,169,362.18 3,014,936.71
equivalents
V. Net increase in cash and cash equivalents -865,588,973.21 -197,435,196.74
Plus: Balance of cash and cash equivalents at the beginning
3,709,747,259.03 3,540,343,438.87
of the period
VI. Balance of cash and cash equivalents at end of period 2,844,158,285.82 3,342,908,242.13
Legal representative: Li Jianquan Head of accounting work: Fang Xiuyuan Head of accounting institution: Zhao Yan
105
7. Consolidated Statement of Changes in Owners’ Equity
Prepared by: Winner Medical Co., Ltd. Current period amount Unit: yuan
Semiannual 2024
Owners’ equities attributable to the owners of parent company
Other Equity Sp Ge
Instruments ec ner
Item Other O Minority Total owners’
Pre Per ial al
O Capital Less: treasury Comprehen Surplus Undistributed th equity equities
Capital Stock ferr pet R risk Subtotal
th Reserve stock sive Reserve Profit er
ed ual es pro
er Income s
sha bo er visi
s ve on
re nd
I. Closing balance of the 594,387,367. 4,381,126,487. 473,552,442. 2,215,369.4 420,212,778.1 6,608,834,768. 11,533,224,328 577,097,475. 12,110,321,803.
previous year 00 29 85 4 3 99 .00 15 15
Plus: Changes in accounting
policies
Prior period error correction
Others
II. Beginning balance in 594,387,367. 4,381,126,487. 473,552,442. 2,215,369.4 420,212,778.1 6,608,834,768. 11,533,224,328 577,097,475. 12,110,321,803.
current year 00 29 85 4 3 99 .00 15 15
III. Increase/decrease in the - - - - 92,985,475.21 - 22,739,880.3 -79,279,061.36
current period (less to be filled 6,094,659.00 442,215,864.7 256,237,646. 2,931,540.1 102,018,941.72 6
out with the minus sign “-) 5 96 4
(I) Total comprehensive - 384,150,379.2 381,218,839.07 19,629,653.3 400,848,492.45
income 2,931,540.1 1 8
4
(II) Owners invested and 2,908,958.42 2,908,958.42 0.00 2,908,958.42
decreased capital
1. Common stock invested by 0.00 0.00 0.00
the owner
2. Capital invested by other 0.00 0.00 0.00
equity instrument holders
3. Amount of share-based 2,908,958.42 2,908,958.42 0.00 2,908,958.42
payment included in the
owner’s equity
4. Others 0.00 0.00 0.00
(III) Profit distribution - - 0.00 -291,164,904.00
291,164,904.0 291,164,904.00
0
1. Withdrawal of surplus 0.00 0.00 0.00
reserves
2. Withdrawal of general risk 0.00 0.00 0.00
preparation
3. Distribution of owners (or - - 0.00 -291,164,904.00
shareholders) 291,164,904.0 291,164,904.00
0
4. Others 0.00 0.00 0.00
(IV) Internal transfer of - - - 0.00 0.00 0.00 0.00 0.00
owner’s equity 6,094,659.00 445,124,823.1 451,219,482.
7 17
1. Capital surplus transfer to 0.00 0.00 0.00
paid-in capital (or capital
stock)
2. Earned surplus transfer to 0.00 0.00 0.00
paid-in capital (or capital
stock)
3. Earned surplus covering the 0.00 0.00 0.00
deficit
4. Carryforward retained 0.00 0.00 0.00
earnings in variation of defined
benefit plan
5. Carryforward retained 0.00 0.00 0.00
earnings of other
comprehensive income
6. Others - - - 0.00 0.00 0.00 0.00 0.00
6,094,659.00 445,124,823.1 451,219,482.
7 17
(V) Special Reserve 0.00 0.00 0.00
1. Draw in this current 0.00 0.00 0.00
2. Use in this current 0.00 0.00 0.00
(VI) Others 194,981,835. - 3,110,226.98 -191,871,608.23
21 194,981,835.21
IV. Balance at the end of 588,292,708. 3,938,910,622. 217,314,795. - 420,212,778.1 6,701,820,244. 11,431,205,386 599,837,355. 12,031,042,741.
current period 00 54 89 716,170.70 3 20 .28 51 79
Legal representative: Li Jianquan Head of accounting work: Fang Xiuyuan Head of accounting institution: Zhao Yan
106
2024 Semiannual Report
7. Consolidated Statement of Change in Equity (Continued)
Prepared by: Winner Medical Co., Ltd. Prior year amount Unit: yuan
Semiannual 2024
Owners’ equities attributable to the owners of parent company
Other Equity Ge
Instruments Sp
Item ner
Other eci
al
O Minority Total owners’
Pre Per Capital Less: treasury Comprehen al Surplus Undistributed th equity equities
Capital Stock O risk Subtotal
ferr pet Reserve stock sive Re Reserve Profit er
th pro
ed ual Income ser s
er visi
sha bo ve
s on
re nd
I. Closing balance of the 426,492,308. 4,546,247,611. 500,082,73 420,212,778. 6,810,953,829. 11,704,606,570 478,161,435. 12,182,768,006.
782,778.15
previous year 00 24 4.11 13 30 .71 74 45
Plus: Changes in accounting
15,161,518.35 15,161,518.35 15,161,518.35
policies
Prior period error correction
Others
II. Beginning balance in 426,492,308. 4,546,247,611. 500,082,73 420,212,778. 6,826,115,347. 11,719,768,089 478,161,435. 12,197,929,524.
782,778.15
current year 00 24 4.11 13 65 .06 74 80
III. Increase or decrease in the
- -
current period Amount 167,895,059. - 39,720,355.8
166,925,686.3 1,563,872.28 115,884,510.4 -73,630,909.65
(less to be filled out with the 00 113,351,265.49 4
5 2
minus sign “-)
(I) Total comprehensive 681,617,022.6 25,655,835.5
1,563,872.28 683,180,894.96 708,836,730.47
income 8 1
(II) Owner’s invested and
969,372.65 969,372.65 0.00 969,372.65
decreased capital
1. Common stock invested by
0.00 0.00 0.00
the owner
2. Capital invested by other
0.00 0.00 0.00
equity instrument holders
3. Amount of share-based
payment included in the 969,372.65 969,372.65 0.00 969,372.65
owner’s equity
4. Others 0.00
-
-
(III) Profit distribution 797,501,533.1 0.00 -797,501,533.10
797,501,533.10
0
1. Withdrawal of surplus
0.00
reserves
2. Withdrawal of general risk
0.00
preparation
-
3. Distribution of owners (or -
797,501,533.1 0.00 -797,501,533.10
shareholders) 797,501,533.10
0
4. Others 0.00
-
(IV) Internal transfer of 167,895,059.
167,895,059.0 0.00
owner’s equity 00
0
1. Capital surplus transfer to -
167,895,059.
paid-in capital (or capital 167,895,059.0 0.00
00
stock) 0
2. Earned surplus transfer to
paid-in capital (or capital 0.00
stock)
3. Earned surplus covering the
0.00
deficit
4. Carryforward retained
earnings in variation of defined 0.00
benefit plan
5. Carryforward retained
earnings of other 0.00
comprehensive income
6. Others 0.00
(V) Special Reserve 0.00
1. Draw in this current 0.00
2. Use in this current 0.00
14,064,520.3
(VI) Others 0.00 14,064,520.33
3
IV. Balance at the end of 594,387,367. 4,379,321,924. 500,082,73 420,212,778. 6,710,230,837. 11,606,416,823 517,881,791. 12,124,298,615.
2,346,650.43
current period 00 89 4.11 13 23 .57 58 15
Legal representative: Li Jianquan Head of accounting work: Fang Xiuyuan Head of accounting institution: Zhao Yan
107
8. Statement on Changes in Owners’ Equity of Parent Company
Prepared by: Winner Medical Co., Ltd. Current period amount Unit: yuan
Semiannual 2024
Other Equity Other
Instruments Spec
Item Compr
Less: treasury ial Surplus Undistributed Oth Total owners’
Capital Stock Preferr Perpet Capital Reserve ehensiv
Oth stock Rese Reserve Profit ers equities
ed ual e
ers rve
share bond Income
I. Closing balance of the previous 411,397,111. 4,897,039,09
594,387,367.00 4,380,380,114.80 473,552,442.85 9,809,651,243.75
year 21 3.59
Plus: Changes in accounting
policies
Prior period error correction
Others
II. Beginning balance in current 411,397,111. 4,897,039,09
594,387,367.00 4,380,380,114.80 473,552,442.85 9,809,651,243.75
year 21 3.59
III. Increase/decrease in the current -
period (less to be filled out with the -6,094,659.00 -442,215,864.75 -256,237,646.96 269,864,157. -461,937,033.96
minus sign “-) 17
21,300,746.8
(I) Total comprehensive income 21,300,746.83
3
(II) Owner’s invested and
2,908,958.42 2,908,958.42
decreased capital
1. Common stock invested by the
owner
2. Capital invested by other equity
instrument holders
3. Amount of share-based payment
2,908,958.42 2,908,958.42
included in the owner’s equity
4. Others
-
(III) Profit distribution 291,164,904. -291,164,904.00
00
1. Withdrawal of surplus reserves
-
2. Distribution of owners (or
291,164,904. -291,164,904.00
shareholders)
00
3. Others
(IV) Internal transfer of owner’s
-6,094,659.00 -445,124,823.17 -451,219,482.17
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 -6,094,659.00 -445,124,823.17 -451,219,482.17
(V) Special Reserve
1. Draw in this current
2. Use in this current
(VI) Others 194,981,835.21 -194,981,835.21
IV. Balance at the end of current 411,397,111. 4,627,174,93
588,292,708.00 3,938,164,250.05 217,314,795.89 9,347,714,209.79
period 21 6.42
Legal representative: Li Jianquan Head of accounting work: Fang Xiuyuan Head of accounting institution: Zhao Yan
108
2024 Semiannual Report
8. Statement of Change in Equity of Parent Company (Continued)
Prepared by: Winner Medical Co., Ltd. Previous period amount Unit: yuan
Semiannual 2024
Other Equity Other
Instruments Spec
Item Compr
Less: treasury ial Surplus Undistributed Oth Total owners’
Capital Stock Preferr Perpet Capital Reserve ehensiv
Oth stock Rese Reserve Profit ers equities
ed ual e
ers rve
share bond Income
I. Closing balance of the previous 411,397,111. 4,897,039,09
594,387,367.00 4,380,380,114.80 473,552,442.85 9,809,651,243.75
year 21 3.59
Plus: Changes in accounting
policies
Prior period error correction
Others
II. Beginning balance in current 411,397,111. 4,897,039,09
594,387,367.00 4,380,380,114.80 473,552,442.85 9,809,651,243.75
year 21 3.59
III. Increase/decrease in the current -
period (less to be filled out with the -6,094,659.00 -442,215,864.75 -256,237,646.96 269,864,157. -461,937,033.96
minus sign “-) 17
21,300,746.8
(I) Total comprehensive income 21,300,746.83
3
(II) Owner’s invested and
2,908,958.42 2,908,958.42
decreased capital
1. Common stock invested by the
owner
2. Capital invested by other equity
instrument holders
3. Amount of share-based payment
2,908,958.42 2,908,958.42
included in the owner’s equity
4. Others
-
(III) Profit distribution 291,164,904. -291,164,904.00
00
1. Withdrawal of surplus reserves
-
2. Distribution of owners (or
291,164,904. -291,164,904.00
shareholders)
00
3. Others
(IV) Internal transfer of owner’s
-6,094,659.00 -445,124,823.17 -451,219,482.17
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 -6,094,659.00 -445,124,823.17 -451,219,482.17
(V) Special Reserve
1. Draw in this current
2. Use in this current
(VI) Others 194,981,835.21 -194,981,835.21
IV. Balance at the end of current 411,397,111. 4,627,174,93
588,292,708.00 3,938,164,250.05 217,314,795.89 9,347,714,209.79
period 21 6.42
Legal representative: Li Jianquan Head of accounting work: Fang Xiuyuan Head of accounting institution: Zhao Yan
109
III. Basic Information of the Company
1. Company Profile
Winner Medical Co., Ltd. (hereinafter referred to as the “Company” or “our Company”), formerly known as Winner Industry (Shenzhen) Co.,
Ltd. (hereinafter referred to as “Winner Industry”), is a wholly foreign-owned enterprise established 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 installments. On April 2, 2001, the registered capital of
HKD 18,023,154.30 was invested in cash and cash equivalents, 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 fabric 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 cash and cash equivalents, 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 of HKD
56.00 million was transferred from the undistributed profits after tax of the Company, and such newly increased registered capital was invested
within half a year after registration of the change. On June 30, 2006, the Company obtained the changed business license of the enterprise legal
person issued by Shenzhen Municipal Bureau 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 corporate type from a wholly foreign-owned enterprise into a limited
liability company (wholly owned by foreign legal person) and change its business term.
110
2024 Semiannual Report
As of March 15, 2007, the Company has converted undistributed profits into capital of HKD6,576,196.00, and the paid-in amount of the
changed accumulated registered capital is HKD
126,000,000. This capital increase has been verified by Shenzhen Hengping Accounting Firm with the capital verification report [2007]
No.0004. On August 13, 2007,
the Company obtained the changed business license of enterprise legal person issued by Shenzhen Administration for Industry and Commerce
and revised 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 issued by
Shenzhen Administration for Market Regulation (since September 9, 2009, Shenzhen Municipal Bureau for Industry and Commerce has been
integrated into Shenzhen Administration for 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
address from No. 1 Wenjian Avenue, Bulong Road, Longhua Street, Baoan District, Shenzhen to Winner Industrial Park beside Bulong Road,
Longhua Street, Bao’an District, Shenzhen.
On February 20, 2013, the board of directors of the Company decided and agreed to increase the Company’s registered capital by HKD
4,271,300.
The registered capital after the change was HKD 196.2713 million, and the total investment was still HKD 380.00 million.
The shareholder, Winner Group Limited made capital contribution with its equity in the six enterprises. The equity contribution is as follows:
Book value of
Amount of
equity Amount included Amount of equity
equity
contribution net in capital surplus contribution (convert to
Proportion contribution
Name of invested entity assets (RMB (RMB 10,000) HKD 10,000)
(%) (RMB 10,000)
10,000)
(D) = (b)*conversion
(a) (b) (c)=(a)-(b)
exchange rate
Winner Medical (Chongyang) Co.,
Ltd. (formerly known as “Chongyang 100.00 3,232.93 32.33 3,200.60 39.94
Winner Medical Textile Co., Ltd.”)
Winner Medical (Jiayu) Co., Ltd.
(formerly known as “Jiayu Winner 100.00 3,520.95 35.21 3,485.74 43.50
Medical Textile Co., Ltd.”)
Winner Medical (Jingmen) Co., Ltd.
(formerly known as “Jingmen Winner 100.00 2,527.24 25.27 2,501.97 31.22
Medical Textile Co., Ltd.”)
111
Book value of
Amount of
equity Amount included Amount of equity
equity
contribution net in capital surplus contribution (convert to
Proportion contribution
Name of invested entity assets (RMB (RMB 10,000) HKD 10,000)
(%) (RMB 10,000)
10,000)
(D) = (b)*conversion
(a) (b) (c)=(a)-(b)
exchange rate
Yichang Winner Medical Textile Co.,
100.00 1,800.69 18.01 1,782.68 22.25
Ltd.
Winner Medical (Huanggang) Co.,
75.00 19,729.30 197.29 19,532.01 243.76
Ltd.
Winner Medical (Tianmen) Co., Ltd.
(formerly known as “Hubei Winner 100.00 3,760.89 37.61 3,723.28 46.46
Textile Co., Ltd.”)
Total 34,572.00 345.72 34,226.28 427.13
After the capital increase, the original shareholders still have 100% of the Company’s equity, and the above six 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 380,000,000. 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, Baoan District, Shenzhen to Winner Industrial Park, No. 660 Bulong Road, Longhua New District, Shenzhen. 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 380.00 million. 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:
112
2024 Semiannual Report
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).
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 decided to increase the registered capital of the company by HKD22,550,300.
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 (Limited Partnership) (hereinafter referred to as “Sequoia
Xinyuan”) with RMB 300.00 million. 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 24,053.64 100.0000
113
As of October 31, 2014, it has received RMB 300.00 million from Sequoia Xinyuan in cash and cash equivalents. 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 Industry
was wholly changed into a limited liability Company, with a registered capital of RMB 368 million. In accordance with the provisions of the
Sponsorship Agreement and Articles of Association, the shareholders converted their audited net assets as of February 28, 2015 of RMB
1,058,194,956.32 into 368 million shares at a ratio of 1:0.3478, par value of each share was RMB 1, and the total share capital was RMB 368
million and held separately by the original shareholders in accordance with their original proportions; the remaining RMB 690,194,956.32 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 RMB 1,050,812,354.45, and the corresponding share
conversion ratio was adjusted to 1: 0.3502). On June 4, 2015, with the approval of Economy, Trade and Information Commission of Shenzhen
Municipality, Winner Industry was wholly changed into a limited liability company, renamed as “Winner Medical Co., Ltd.”, and obtained the
business license of enterprise legal person with the registration number of 440306503230896.
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 RMB 8,492,308, with the registered capital after the change of RMB 376,492,308. The new registered capital
was subscribed by Shenzhen Capital Group Co., Ltd. (hereinafter referred to as “SCGC”) with RMB 300.00 million. After the completion of
the capital increase, the Company’s ownership structure 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 RMB 300.00 million from SCGC in cash and cash equivalents. 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 RMB 50 million of common shares 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
RMB 426,492,308.
114
2024 Semiannual Report
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 first extraordinary shareholders’ meeting of the Company in 2024 deliberated and passed the Proposal on the Repurchase and Cancellation
of Remaining Shares in the Special Securities Account and the Proposal on Amending the Articles of Association and Handling the Registration
of Industrial and Commercial Changes, and changed the original purpose of 6,094,659 shares remaining in the repurchase account excluding
the first-phase employee stock ownership plan (including the reserved part) from “used for the Company’s employee stock ownership plan or
equity incentive” to “used for cancellation to reduce the Company’s registered capital”. After the cancellation of the repurchased shares, the
Company’s share capital has been reduced from RMB 594,387,367.00 yuan to RMB 588,292,708.00.
The Company belongs to textile industry.
Business term: sustainable operation.
Business scope: production and operation of class II, III 6864 medical hygiene materials, medical biological materials, dressings and products,
medical clothing, protective articles, textiles, nonwoven products and molded packaging (the above products do not include the goods subject
to national export license administration) and related products, disposable consumables and molded packaging; engaging in wholesale, import
and export, retail (including online sales) and other related ancillary businesses of all Class I medical devices, all Class II medical devices
(excluding in vitro diagnostic reagents), Class III medical devices: 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 clothing, 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; Winner Industrial Park, No.660 Bulong Road, Longhua New District, Shenzhen.
The financial statements were approved by the Board of Directors of the Company on August 26, 2024.
2. Scope of Consolidated Financial Statements
As of June 30, 2024, 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)”)
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Subsidiary name
Winner Medical (Hong Kong) Ltd. (hereinafter referred to as “Hong Kong Winner”)
Winner Medical (Huanggang) Co., Ltd. (hereinafter referred to as “Winner Medical (Huanggang)”)
Shenzhen Purcotton Technology Co., Ltd. (hereinafter referred to as “Shenzhen Purcotton”)
Guangzhou Purcotton Medical Technology Co., Ltd. (hereinafter referred to as “Guangzhou Purcotton”)
Beijing Purcotton Technology Co., Ltd. (hereinafter referred to as “Beijing Purcotton”)
Shanghai Purcotton Technology Co., Ltd. (hereinafter referred to as “Shanghai Purcotton”)
Shenzhen Qianhai Purcotton E-Commerce Co., Ltd. (hereinafter referred to as “Qianhai Purcotton”)
Winner Medical Malaysia Sdn. Bhd. (hereinafter referred to as “Winner Medical Malaysia”)
Winner Medical (Heyuan) Co., Ltd. (hereinafter referred to as “Winner Medical (Heyuan)”)
Winner Medical (Wuhan) Co., Ltd. (hereinafter referred to as “Winner Medical (Wuhan)”) (former name: Hubei Winner Medical Co., Ltd.)
Shenzhen PureH2B Technology Co., Ltd. (hereinafter referred to as “PureH2B”)
Shenzhen Purunderwear Sci-Tech Innovation Co., Ltd. (hereinafter referred to as “Purunderwear”)
Huanggang Purcotton Ltd. (hereinafter referred to as “Huanggang Purcotton”)
Winner Medical Technology (Foshan) Co., Ltd. (hereinafter referred to as “Winner Medical (Foshan)”)
Zhejiang Longterm Medical Technology Co., Ltd. (hereinafter referred to as “Zhejiang Longterm”)
Xi’an Longtemu Medical Technology Co., Ltd. (hereinafter referred to as “Xi’an Longtemu”)
Hangzhou Shengyi Technology Co., Ltd. (hereinafter referred to as “Hangzhou Shengyi”)
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 “Guilin Latex”)
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”)
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Subsidiary name
Shanghai Hongsong Medical Device Co., Ltd. (hereinafter referred to as “Shanghai Hongsong”)
Winner (Jinzhou) Latex Products Co., Ltd. (hereinafter referred to as “Jinzhou Latex”)
Wuhan Purcotton Technology Co., Ltd. (hereinafter referred to as “Wuhan Purcotton”)
Hong Kong Purcotton Technology Co., Ltd. (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. (hereinafter referred to as “Wuhan Digital Technology”)
Zhejiang Honglan Technology Co., Ltd. 1* (hereinafter referred to as “Zhejiang Honglan”)
Winner Medical Biomedical Technology (Wuhan) Co., Ltd. 2* (hereinafter referred to as “Winner Medical”)
Purecotton Agricultural Technology (Wuhan) Co., Ltd. 3* (hereinafter referred to as “Purecotton Agricultural Technology”)
1* Zhejiang Honglan is added for consolidation in 2024;
2* Winner Medical is established in 2024;
3* Purecotton Agricultural Technology is established in 2024.
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”.
IV. Preparation Basis of Financial Statements
1. Preparation Basis
This financial statement is prepared in accordance with the Accounting Standards for Business Enterprises -- Basic Standard issued by the
Ministry of Finance, various special accounting standards, guideline for application of accounting standards 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.
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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 June 30, 2024 and the
business performance and cash flows of the consolidated and parent company in HY 2024.
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
Item Materiality standard
Important individual accounts receivable with allowances
5 million yuan
for doubtful debts
Provision for bad debts on significant receivables is either
5 million yuan
recovered or 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 million
Important construction in progress
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.
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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 and 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.
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.
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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 loss 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 loss 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.
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.
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(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.
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.
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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.
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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.
(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.
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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.
(3). When the basis and measurement method for derecognition of financial assets and transfer of financial assets meet one of the following
conditions, the Company derecognizes financial assets:
— 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)).
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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.
(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.
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For receivables and contract assets formed by transactions regulated by Accounting Standards for Business Enterprises No.14 - Revenue, 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 have 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 are 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 receivable 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.
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
Banker’s acceptance commercial banks), no provision for bad debts shall be made; if the acceptor is another bank or financial company,
bill the expected credit loss is 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
Trade acceptance
receivable is transferred to notes receivables, the age of accounts is calculated continuously).
Amounts receivable
financing
Banker’s acceptance
If the acceptor is a bank with a higher credit rating, no provision for bad debts will be made.
bill
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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
Unless there is objective evidence that they cannot be recovered,
Amounts receivable from related parties
No credit risk portfolio no provision for bad debts will be made for amounts within the
within the consolidation scope
scope of consolidation
Segment portfolios based on credit risk characteristics determined
Amounts receivable from other customers Aging combination
by the age of accounts receivable
Other receivables
Segment portfolios based on credit risk characteristics determined
There is no credit risk associated with
No credit risk portfolio by the nature of receivables, primarily including export tax
receivables such as export tax rebates
rebates, etc.
Unless there is objective evidence that they cannot be recovered,
Other receivables from related parties within
No credit risk portfolio no provision for bad debts will be made for amounts within the
the consolidation scope
scope of consolidation
The credit risk characteristics of receivables are divided into
Balance percentage
Security deposit receivable combinations based on the nature of the receivables, primarily
combination
including deposits and margins.
Segment portfolios based on credit risk characteristics determined
Other receivables Aging combination
by the age of accounts receivable
Advances to suppliers
Unless there is objective evidence that they cannot be recovered,
Prepaid amounts to related parties within the
no provision for bad debts will be made for amounts within the
consolidation scope
scope of consolidation
Segment portfolios based on the aging of other prepayments to
Other prepaid amounts Aging combination
determine credit risk characteristics
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
5.00 5.00
year)
1-2 year(s) 10.00 10.00
2-3 year(s) 30.00 30.00 50.00
3-4 year(s) 50.00 50.00 100.00
4-5 year(s) 80.00 80.00 100.00
More than 5 years 100.00 100.00 100.00
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.
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12. Notes Receivable
For details, please refer to Note V. Significant accounting policies and accounting estimates 11. Financial instruments.
13. Accounts Receivable
For details, please refer to Note V. Significant accounting policies and accounting estimates 11. Financial instruments.
14. Amounts Receivable Financing
For details, please refer to Note V. Significant accounting policies and accounting estimates 11. Financial instruments.
15. Other Receivables
Recognition method and accounting treatment method of the expected credit loss of other receivables
For details, please refer to Note V. Significant accounting policies and accounting estimates 11. Financial instruments.
16. Contract Assets
1. Methods and standards for the recognition of contract assets
The Company lists the contractual assets or contractual liabilities in the balance sheet according to the relationship 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.
For the determination method and accounting treatment method of expected credit loss of contract assets, please refer to “V. Significant
accounting policies and accounting estimates 11. Financial instruments (6), test methods and accounting treatment methods of financial
instrument impairment” in this note.
17. Inventory
(1). Classification and cost of inventories
The inventories are classified as raw materials, low-value consumables, finished goods, 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.
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(3). Inventory system
The perpetual inventory system is adopted.
(4). Amortization methods of low-value consumables 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, finished goods, 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 having 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.
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.
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(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
N/A
20. Other Debt Investments
N/A
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.
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.
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(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 the 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 investment
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.
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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
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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 are 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.
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
Straight-line
Houses and building 10-38 years 5.00%-10.00% 2.37%-9.50%
depreciation
Straight-line
Machinery equipment 2-15 years 5.00%-10.00% 6.00%-47.50%
depreciation
Straight-line
Transportation equipment 3-10 years 5.00%-10.00% 9.00%-31.67%
depreciation
Electronic equipment and office Straight-line
2-10 years 5.00%-10.00% 9.00%-47.5%
equipment, etc. depreciation
Offshore land ownership Others N/A N/A N/A
No depreciation is provided for offshore land ownership.
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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
fire protection, and quality supervision units. (3) The construction project reaches the intended usable state. If final
building
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
debugging. (3) Production equipment consistently yields qualified products. (4) Equipment is accepted by asset managers
equipment
and users’ post-inspection.
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.
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(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
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.
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The intangible assets with limited useful life shall be 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
Term of use specified in the land-use right
Land use right 38-50 years
certificate
Software use right 2-8 years Useful life estimated by the management
Benefit period specified in the certificate of
Trademark right 5-10 years
trademark use
Benefit period specified in the certificate of patent
Patent right 5-10 years
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 expenditure is directly related to the Company’s R&D activities, including the relevant staff salaries of personnel
engaged in R&D activities, directly invested material expenses, depreciation and amortization expenses, and other expenses, and is collected
in the following ways: The related staff salaries of personnel engaged in R&D activities mainly refer to the salaries, bonuses, social security
and provident fund expenses of personnel directly engaged in R&D activities, the materials directly invested mainly refer to the relevant
materials directly invested in R&D activities, the depreciation and amortization expenses mainly refer to the depreciation and amortization of
fixed assets or intangible assets used in R&D activities, and other expenses mainly refer to the travel expenses and testing fees of R&D
personnel directly related to the company’s R&D activities.
2) Specific criteria for dividing research stage and development stage
The expenditure of the Company’s internal R&D projects is classified into the expenditure at the research stage and 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.
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:
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a. Technically feasible to complete the intangible assets, so that they can be used or sold;
b. It is intended to finish and use or sell the intangible assets;
c. 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;
d. 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
e. 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.
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31. Long-Term Unamortized Expenses
Long-term unamortized expenses refer to the expenses that have occurred but shall be burdened in the 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.
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.
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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 dismission welfare.
(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.
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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.
(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
will be classified as financial liabilities at the time of initial recognition in whole or in part:
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(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 will be classified as equity instrument at the time of initial recognition in whole or in part.
37. Income
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.
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:
The customer obtains and consumes the economic benefits arising from the Company’s performance at the same time of the Company’s
performance.
The customer can control the goods under construction during the Company’s performance.
The goods produced by the Company during the performance are of irreplaceable use, and the Company shall be 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.
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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:
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.
The Company has transferred legal ownership to the goods to the customer, that is, the customer has legal ownership of the goods.
The Company has physically transferred the goods to the customer, that is, the customer has physically possessed the goods.
The Company has transferred the main risk and remuneration in the ownership of the goods to the customer, that is, the customer has
acquired the main risk and remuneration in the ownership of the goods.
The customer has accepted the goods or services, etc.
Confirmation and measurement method for differences in income recognition accounting policies caused by different business modes for the
same business
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 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.
38. Contract Cost
Contract cost includes the contract performance cost and the contract acquisition cost.
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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;
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.
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(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 / 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.
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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 taxpayer 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:
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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).
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. 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;
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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 refer 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:
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.
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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. 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:
The change expands the lease scope by adding the right to use one or more leased assets;
The increased consideration is equivalent to the amount of the separate price of the expanded part of the lease 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:
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;
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 “III. (10) Financial instruments” regarding the modification or
renegotiation of contracts.
42. Other Significant Accounting Policy and Accounting Estimate
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.
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(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
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).
149
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.
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In case of debt restructuring by modifying other clauses, the Company shall confirm and measure the restructured creditor’s rights in accordance
with “V.11. Financial Instruments” in 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. 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. 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
151
(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 2024
□ Applicable √ Not applicable
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
Added value tax 13%, 9%, 6%, 3%, 1%, 0%
tax law. After deduction of the withholdings on VAT allowed to
deduct in the current period, the balance is the VAT payable
Consumption tax N/A N/A
Urban maintenance and Actual paid value added tax (including the exemption part) and
7%, 5%
construction tax consumption 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
Education surcharge 3%
consumption 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), 15%
Longterm Medical, Winner Guilin, Winner Medical (Hunan)
Winner Medical (Hong Kong), Pan-China (H.K.), Hong Kong Purcotton 16.50%
Hangzhou Shengyi, Xi’an Longtemu, Deqing Longterm, Ruian Medical Device 20%
Mexico Longtai 30%
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%. The application for review has been submitted in the current period and is
in the review stage.
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(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
[2021] No. 30) issued by the Ministry of Finance and State Taxation Administration, Qianhai Purcotton pays its corporate income tax
at the tax rate of 15.00%.
(4) According to the Notice on Publicizing the List of Fourth Batch of High-tech Enterprises to be Identified in Hubei Province in 2021
issued by the Leading Group Office of National High-tech Enterprise Accreditation Administration on December 23, 2021, Winner
Medical (Jingmen) obtained the High-tech Enterprise Certificate (Certificate No.: GR202142004475) on December 03, 2021. From
2021 to 2023, the corporate income tax can be paid at a preferential tax rate of 15.00%. The application for review has been submitted
in the current period and is in the review stage.
(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, the corporate income tax can be paid at a preferential tax rate of 15.00%. The application for review has been submitted in
the current period and is in the review stage.
(6) According to the Notice on Publicizing the List of Second Batch of High-tech Enterprises to be Identified in Hubei Province in 2021
issued on December 15, 2021, Winner Medical (Chongyang) and Winner Medical (Tianmen) obtained the High-tech Enterprise
Certificates (Certificate No.: GR202142000579, GR202142002367) on November 15, 2021. From 2021 to 2023, the corporate income
tax can be paid at a preferential tax rate of 15.00%. The application for review has been submitted in the current period and is in the
review stage.
(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) Zhejiang Longterm 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 RMB 1 million 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 RMB 1 million but not exceeding RMB 3 million
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%. It obtained an updated high-tech enterprise qualification certificate on December 2, 2019 with a validity period of three years
until 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.
(11) Ruian Medical Device is a small enterprise with small profits. The part with annual taxable income not exceeding RMB 1 million
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 RMB 1 million but not exceeding RMB 3 million shall be reduced by 25% 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 RMB 1 million, and the actual tax rate is 2.5%.
153
(12) On December 4, 2023, Guilin Latex 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.
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 120,879.58 76,471.98
Bank deposit 3,892,515,173.35 4,676,600,881.85
Other cash and cash equivalents 25,036,132.86 29,454,717.44
Total 3,917,672,185.79 4,706,132,071.27
Where: total amount deposited abroad 19,211,574.51 6,765,888.80
Other description
The breakdown of cash and cash equivalents that are restricted in use due to mortgages, pledges, or freezes—along with funds restricted in
withdrawal due to centralized management and those placed outside China with limitations on repatriation—is as follows:
Unit: yuan
Closing balance of the previous
Item Closing Balance
year
Deposit for bank acceptance bill* 1 12,069,029.85 10,935,300.00
Letter of Credit deposit* 2 100,000.00 100,000.00
Performance bond* 3 5,358,039.51 5,077,060.94
Letter of Guarantee bond* 4 6,600,000.00
Balance of other restricted cash and cash equivalents
6,145,870.47 6,078,927.88
*5
Total 23,672,939.83 28,791,288.82
*1 Deposit for bank acceptance bill refers to the deposit deposited by Zhejiang Longterm to apply for bank acceptance bill.
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2024 Semiannual Report
*2Letter 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 cash and cash equivalents 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
Item Closing Balance
the period
Financial assets measured at fair value of which the changes are
2,524,636,253.55 2,850,058,540.71
included in current profit and loss
Including:
Bank financial products 1,389,316,876.93 1,735,249,266.74
Trust products 1,135,319,376.62 1,114,809,273.97
Including:
Total 2,524,636,253.55 2,850,058,540.71
Other description:
3. Derivative Financial Assets
Unit: yuan
Balance at the beginning of
Item Closing Balance
the period
Other description:
4. Notes Receivable
(1) Classified presentation of notes receivable
Unit: yuan
Balance at the beginning of the
Item Closing Balance
period
Bank acceptance bill 13,038,762.74 42,963,076.53
Total 13,038,762.74 42,963,076.53
155
(2) Classified disclosure according to bad debt accrual method
Unit: yuan
Balance at the
Closing Balance
beginning of the period
Class Book balance Provision for bad debt Book balance Provision for bad debt
Proporti Accruing Book value Accruing Book value
Amount Amount Amount Proportion Amount
on proportion 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 the current period:
Unit: yuan
Amount of change in the current period
Balance at the
Class Recovered or Closing Balance
beginning of the period Accrual Write-off Others
reversed
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
Item Pledged amount at the end of the 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 terminated at the end of the Amount with recognition not
Item
period terminated at the end of the period
Bank acceptance bill 69,732,163.99 9,781,329.43
Total 69,732,163.99 9,781,329.43
(6) Notes receivable actually written off at the current period
Unit: yuan
Item Amount written off
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2024 Semiannual Report
Write-off of important notes receivable:
Unit: yuan
Whether the
Reasons for write- Write-off procedures payments arise from
Unit name Nature of notes receivable Amount written off
off performed connected
transactions
Description of write-off notes receivable:
5. Accounts Receivable
(1) Disclosure by aging
Unit: yuan
Aging Ending book balance Beginning book balance
Within 1 year (including 1 year) 971,129,613.15 802,426,859.44
1~2 years 18,939,037.78 12,583,559.62
2~3 years 8,955,263.34 4,051,224.68
More than 3 years 1,603,350.37 2,899,121.73
3~4 years 582,703.84 1,601,949.62
4~5 years 111,274.96 292,384.46
More than 5 years 909,371.57 1,004,787.65
Total 1,000,627,264.64 821,960,765.47
(2) Classified disclosure according to bad debt accrual method
Closing Balance Balance at the beginning of the period
Provision for bad
Book balance Provision for bad debt Book balance
debt
Class
Accrui Book value Accrui Book value
Propor ng Propo ng
Amount Amount Amount Amount
tion proport rtion proport
ion ion
Accounts
receivabl
e of
provision 100.00 9,715,810.5 100.00
9,198,401.53 0.92% 9,198,401.53 0.00 9,715,810.58 1.18% 0.00
for bad % 8 %
debt by
single
item
Including:
Accounts
receivabl
e of
provision 991,428,863.1 99.08 52,197,666.4 939,231,196. 812,244,954. 98.82 43,642,665. 768,602,289.
5.26% 5.37%
for bad 1 % 2 69 89 % 29 60
debt by
combinati
on
Including:
Aging
991,428,863.1 99.08 52,197,666.4 939,231,196. 812,244,954. 98.82 43,642,665. 768,602,289.
analysis 5.26% 5.37%
1 % 2 69 89 % 29 60
method
1,000,627,264. 100.00 61,396,067.9 939,231,196. 821,960,765. 100.0 53,358,475. 768,602,289.
Total 6.14% 6.49%
64 % 5 69 47 0% 87 60
157
Category name of provision for bad debts 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
The customer has
Better Life declared bankruptcy,
Commercial Chain 6,387,334.23 6,387,334.23 6,387,334.23 6,387,334.23 100.00% and the payment for the
Share Co., Ltd. goods is unlikely to be
recovered
Expected to be
Others 3,328,476.35 3,328,476.35 2,811,067.30 2,811,067.30 100.00%
irrecoverable
Total 9,715,810.58 9,715,810.58 9,198,401.53 9,198,401.53
Category name of provision for bad debts by combination: aging combination
Unit: yuan
Closing Balance
Name
Book balance Provision for bad debt Accruing proportion
Within 1 year 971,129,613.15 48,556,480.64 5.00%
1~2 years 16,286,637.78 1,628,663.78 10.00%
2~3 years 2,409,261.81 722,778.54 30.00%
3~4 years 582,703.84 291,351.92 50.00%
4~5 years 111,274.96 89,019.97 80.00%
More than 5 years 909,371.57 909,371.57 100.00%
Total 991,428,863.11 52,197,666.42
Description of the basis for determining the combination:
Recognition criteria and description of bad debts by combination: On June 30, 2024, 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 June 30, 2024 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
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2024 Semiannual Report
(3) Provision, recovery or reversal of bad debt reserves in the current period
Provision for bad debts in the current period:
Unit: yuan
Balance at the Amount of change in the current period
Class beginning of the Recovered or Closing Balance
period Accrual Write-off Others
reversed
Provision for bad debt
53,358,475.87 11,881,554.39 3,845,885.75 1,923.44 61,396,067.95
of accounts receivable
Total 53,358,475.87 11,881,554.39 3,845,885.75 1,923.44 61,396,067.95
Where the amount of bad debt provision recovered or reversed is important:
Unit: yuan
The rationale behind determining
Unit name Amount recovered or reversed Reasons Recovery way the original provision ratio 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
Whether the
Nature of accounts Reasons for write- Write-off procedures payments arise from
Unit name Amount written off
receivable off performed connected
transactions
Description of write-off accounts receivable:
(5) Accounts receivable with Top 5 ending balances by debtor
Unit: yuan
Ending balance of bad
Percentage of total debt provision for
Closing balance of
Ending balance of Closing balance of closing balance of accounts receivable
Unit name accounts receivable
accounts receivable contract assets accounts receivable and impairment
and contract assets
and contract assets provision for contract
assets
First 160,117,934.18 160,117,934.18 16.00% 8,005,896.71
Second 40,841,194.94 40,841,194.94 4.08% 2,042,059.75
Third 31,202,311.27 31,202,311.27 3.12% 1,560,115.56
Fourth 28,893,796.10 28,893,796.10 2.89% 1,444,689.81
Fifth 17,147,230.77 17,147,230.77 1.71% 857,361.54
Total 278,202,467.26 278,202,467.26 27.80% 13,910,123.37
159
6. Contract Assets
(1) Contract assets
Unit: yuan
Balance at the
Closing Balance beginning of the
Item period
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
Balance at the
Closing Balance
beginning of the period
Class Book balance Provision for bad debt Book balance Provision for bad debt
Proporti Accruing Book value Accruing Book value
Amount Amount Amount Proportion Amount
on proportion proportion
Including:
Including:
Category numbers of provision for bad debts by combination: 0
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 Write off/verification in the
Item Accrual in the current period Reasons
during the period current period
Where the amount of bad debt provision recovered or reversed is important:
Unit: yuan
The rationale behind
determining the original
Unit name Amount recovered or reversed Reasons Recovery way
provision ratio for bad debts and
its justification
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2024 Semiannual Report
Other description
(5) Actual contract assets written off during the period
Unit: yuan
Item Amount written off
Write-off of important contract assets:
Unit: yuan
Whether the
Reasons for write- Write-off procedures payments arise from
Unit name Nature of payment Amount written off
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 - bank acceptance bill 36,356,429.51 29,348,618.44
Total 36,356,429.51 29,348,618.44
(2) Classified disclosure according to bad debt accrual method
Unit: yuan
Balance at the
Closing Balance
beginning of the period
Class Book balance Provision for bad debt Book balance Provision for bad debt
Proporti Accruing Book value Accruing Book value
Amount Amount Amount Proportion Amount
on proportion proportion
Including:
Including:
161
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 Expected credit losses over Expected credit losses over
over the next 12 the entire duration (without the entire duration (with Total
months credit impairment) credit impairment)
Balance on January 1, 2024 in the current period
Basis for division of each stage and provision ratio for bad debts
Description of significant changes in the book balance of accounts receivable financing, particularly those reflecting adjustments in loss
provisions in the current period:
(3) Provision, recovery or reversal of bad debt reserves in the current period
Unit: yuan
Balance at the Amount of change in the current period
Class beginning of the Recovered or Write Closing Balance
period Accrual Other changes
reversed off/verification
Where the amount of bad debt provision recovered or reversed is important:
Unit: yuan
The rationale behind determining
Unit name Amount recovered or reversed Reasons Recovery way the original provision ratio for
bad debts and its justification
Other description:
(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 not terminated at the
Item Amount with recognition terminated at the end of the period
end of the period
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(6) Receivable actually written off at the current period
Unit: yuan
Item Amount written off
Important write-offs of receivables financing
Unit: yuan
Whether the
Reasons for write- Write-off procedures payments arise from
Unit name Nature of payment Amount written off
off performed connected
transactions
Description of write-off:
(7) Changes in the increase and decrease of receivables financing and changes in the fair value in the current period
(8) Other description
8. Other Receivables
Unit: yuan
Balance at the beginning of the
Item Closing Balance
period
Other Receivables 225,809,699.10 218,913,405.18
Total 225,809,699.10 218,913,405.18
(1) Interest receivable
1) Classification of interest receivable
Unit: yuan
Balance at the beginning of
Item Closing Balance
the period
2) Important overdue interest
Unit: yuan
Whether there is impairment
Borrower Closing Balance Overdue time Overdue reason
and its judgment basis
Other description:
163
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
Balance at the Amount of change in the current period
Class beginning of the Recovered or Write Closing Balance
period Accrual Other changes
reversed off/verification
Where the amount of bad debt provision recovered or reversed is important:
Unit: yuan
The rationale behind
determining the original
Unit name Amount recovered or reversed Reasons Recovery way
provision ratio 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
Whether the
Reasons for write- Write-off procedures payments arise from
Unit name Nature of payment Amount written off
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
Project (or invested unit) Closing Balance
the period
164
2024 Semiannual Report
2) Important dividends receivable with the aging more than 1 year
Unit: yuan
Whether there is
Project (or invested unit) Closing Balance Aging Reason for non-recovery impairment and its
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
Balance at the Amount of change in the current period
Class beginning of the Recovered or Write Closing Balance
period Accrual Other changes
reversed off/verification
Where the amount of bad debt provision recovered or reversed is important:
Unit: yuan
The rationale behind determining
Unit name Amount recovered or reversed Reasons Recovery way the original provision ratio 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
Whether the
Reasons for write- Write-off procedures payments arise from
Unit name Nature of payment Amount written off
off performed connected
transactions
Description of write-off:
Other description:
165
(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
220,155,320.00 220,155,320.00
of Winner Medical (Heyuan)
Margin and deposit 105,391,132.51 101,019,054.40
Employee pretty cash 4,299,689.08 3,453,440.82
Others 15,130,535.28 13,192,323.37
Total 344,976,676.87 337,820,138.59
2) Disclosure by aging
Unit: yuan
Aging Ending book balance Beginning book balance
Within 1 year (including 1 year) 36,368,735.01 37,682,315.11
1~2 years 11,089,240.57 17,911,211.16
2~3 years 13,500,676.39 13,979,257.63
More than 3 years 284,018,024.90 268,247,354.69
3~4 years 17,455,107.99 17,098,300.38
4~5 years 227,860,059.30 228,654,779.32
More than 5 years 38,702,857.61 22,494,274.99
Total 344,976,676.87 337,820,138.59
3) Classified disclosure according to bad debt accrual method
√Applicable □ Not applicable
Unit: yuan
Balance at the beginning of the
Closing Balance
period
Book balance Provision for bad debt Book balance Provision for bad debt
Class
Accrui Accrui
Proport ng Book value Proport ng Book value
Amount Amount Amount Amount
ion proport ion proport
ion ion
Provision for
50.05
bad debt by 220,391,165.90 63.89% 110,313,505.90 50.05% 110,077,660.00 220,391,165.90 65.24% 110,313,505.90 110,077,660.00
%
single item
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2024 Semiannual Report
Balance at the beginning of the
Closing Balance
period
Book balance Provision for bad debt Book balance Provision for bad debt
Class
Accrui Accrui
Proport ng Book value Proport ng Book value
Amount Amount Amount Amount
ion proport ion proport
ion ion
Including:
Provision for
bad debt by 124,585,510.97 36.11% 8,853,471.87 7.11% 115,732,039.10 117,428,972.69 34.76% 8,593,227.51 7.32% 108,835,745.18
combination
Including:
Aging 21.16
19,196,378.46 5.56% 3,584,015.24 18.67% 15,612,363.22 16,845,623.22 4.99% 3,565,039.11 13,280,584.11
combination %
Margin /
deposit 105,389,132.51 30.55% 5,269,456.63 5.00% 100,119,675.88 100,583,349.47 29.77% 5,028,188.40 5.00% 95,555,161.07
combination
Total 100.00 100.00 35.20
344,976,676.87 119,166,977.77 34.54% 225,809,699.10 337,820,138.59 118,906,733.41 218,913,405.18
% % %
Category name of provision for bad debts by single item
Unit: yuan
Balance at the beginning of the period Closing Balance
Name Provision for bad Provision for bad Accruing Reasons for
Book balance Book balance
debt debt proportion provision
Government
Zijin County
receivables with an
People’s 220,155,320.00 110,077,660.00 220,155,320.00 110,077,660.00 50.00%
accounting age of
Government
4--5 years.
Expected to be
Others 235,845.90 235,845.90 235,845.90 235,845.90 100.00%
irrecoverable
Total 220,391,165.90 110,313,505.90 220,391,165.90 110,313,505.90
Category name of provision for bad debts by combination: aging combination
Unit: yuan
Closing Balance
Name
Book balance Provision for bad debt Accruing proportion
Within 1 year 13,826,089.75 691,304.47 5.00%
1~2 years 70,374.48 7,037.45 10.00%
2~3 years 9,294.43 2,788.33 30.00%
3~4 years 4,807,469.63 2,403,734.82 50.00%
4~5 years 20,000.00 16,000.00 80.00%
More than 5 years 463,150.17 463,150.17 100.00%
Total 19,196,378.46 3,584,015.24
167
Description of the basis for determining the combination:
Category name of provision for bad debts by combination: Margin / deposit combination
Unit: yuan
Closing Balance
Name
Book balance Provision for bad debt Accruing proportion
Margin deposit 105,389,132.51 5,269,456.63 5.00%
Total 105,389,132.51 5,269,456.63
Description of the basis for determining the combination:
Provision for bad debts based on the general expected credit loss (ECL) model:
Unit: yuan
Stage 1 Stage 2 Stage 3
Expected credit losses over Expected credit losses over
Expected credit losses
Provision for bad debt the entire duration (no the entire duration (credit Total
over the next 12 months
credit impairment occurred) impairment has occurred)
Balance on January 1, 2024 107,166,103.87 11,740,629.54 118,906,733.41
Balance on January 1, 2024
in the current period
Accrual in the current period 824,433.84 824,433.84
Reversal in the current
564,285.06 564,285.06
period
Other changes 95.58 95.58
Balance on June 30, 2024 107,426,348.23 11,740,629.54 119,166,977.77
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 the current period:
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2024 Semiannual Report
Unit: yuan
Balance at the Amount of change in the current period
Class beginning of the Recovered or Write Closing Balance
period Accrual Others
reversed off/verification
Provision for bad
debts of other 118,906,733.41 824,433.84 564,285.06 95.58 119,166,977.77
receivables
Total 118,906,733.41 824,433.84 564,285.06 95.58 119,166,977.77
Where the amount of bad debt provision reversed or recovered is important:
Unit: yuan
The rationale behind
determining the original
Unit name Amount recovered or reversed Reasons Recovery way
provision ratio for bad debts
and its justification
5) Other receivable actually written off at the current period
Unit: yuan
Item Amount written off
Write-off of important other receivables:
Unit: yuan
Whether the
Reasons for write- Write-off procedures payments arise from
Unit name Nature of other receivables Amount written off
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
Ending balance of bad
Unit name Nature of payment Closing Balance Aging other ending balance
debt provision
receivable
Receivables related to Heyuan
First 220,155,320.00 4-5 years 63.82% 110,077,660.00
project
Second Employee pretty cash 2,431,586.61 Within 1 year 0.70% 121,579.33
Third Margin and deposit 2,311,115.80 3-4 years 0.67% 121,579.33
Fourth Others 2,000,000.00 3-4 years 0.58% 1,000,000.00
Fifth Margin and deposit 1,192,033.54 Within 1 year 0.35% 59,601.68
Total 228,090,055.95 66.12% 111,380,420.34
169
7) Recorded under other receivables due to centralized fund management
Unit: yuan
Other description:
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 111,003,138.27 98.25% 119,158,386.43 97.45%
1~2 years 1,725,035.26 1.53% 2,613,992.18 2.14%
2~3 years 255,600.91 0.23% 509,364.14 0.42%
Total 112,983,774.44 122,281,742.75
Reasons for non-timely settlement of important advances from customers with the aging more than 1 year:
(2) Advances to suppliers with Top 5 ending balances by prepayment object
Advance object Closing Balance (Yuan) Proportion in total ending balance of advances (%)
First 21,982,130.78 19.46%
Second 14,043,777.36 12.43%
Third 7,402,815.74 6.55%
Fourth 2,830,188.68 2.50%
Fifth 2,389,907.32 2.12%
Total 48,648,819.88 43.06%
Other description:
10. Inventory
Does the Company need to follow the disclosure requirements of real estate industry
No
170
2024 Semiannual Report
(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
289,841,593.34 16,287,848.00 273,553,745.34 257,540,786.57 13,590,764.92 243,950,021.65
materials
Work in
195,152,890.23 32,664,343.02 162,488,547.21 202,621,436.49 36,094,235.16 166,527,201.33
process
Finished
1,162,623,665.30 202,899,079.32 959,724,585.98 1,187,727,556.66 205,259,954.93 982,467,601.73
goods
Goods in
39,872,021.84 0.00 39,872,021.84 24,716,158.02 24,716,158.02
transit
Low-value
19,639,739.16 2,095,923.93 17,543,815.23 18,264,295.81 1,598,990.58 16,665,305.23
consumables
Total 1,707,129,909.87 253,947,194.27 1,453,182,715.60 1,690,870,233.55 256,543,945.59 1,434,326,287.96
(2) Data resources recognized as inventory
Unit: yuan
Inventory of self-
Inventory of outsourced data Inventory of data resources
Item processed data Total
resources otherwise acquired
resources
(3) Inventory falling price reserves and provision for impairment of contract performance costs
Unit: yuan
Balance at the Amount increased in the current Amount decreased in the current
Item beginning of the period period Closing Balance
period Accrual Others Reversal or write-back Others
Raw materials 13,590,764.92 9,895,273.94 7,198,190.86 16,287,848.00
Work in
36,094,235.16 2,252,175.07 5,682,067.21 32,664,343.02
process
Finished goods 205,259,954.93 78,606,775.59 80,967,651.20 202,899,079.32
Low-value
1,598,990.58 641,804.10 144,870.75 2,095,923.93
consumables
Total 256,543,945.59 91,396,028.70 93,992,780.02 253,947,194.27
Inventory impairment provision by portfolio
Unit: yuan
The end of the period The beginning of the period
Combination Accruing
Accruing proportion Balance at the
name Provision for Provision for proportion for
Closing Balance for depreciation beginning of the
depreciation depreciation depreciation
provision period
provision
171
The accounting standard for calculating the provision for inventory impairment by portfolio
(4) Description of ending balance of inventory containing the capitalized amount of borrowing costs
(5) Description of current amortization amount of contract performance cost
11. Assets Held for Sales
Unit: yuan
Provision for Estimated disposal Estimated
Item Ending book balance Ending book value Fair value
impairment cost disposal time
Other description
12. Non-Current Assets Due within a Year
Unit: yuan
Balance at the beginning of
Item Closing Balance
the period
Long-term receives due within one year 4,500,791.23 4,379,308.17
Total 4,500,791.23 4,379,308.17
(1) Non-current assets due within a year
□ Applicable √ Not applicable
(2) Other non-current assets due within a year
□ Applicable √ Not applicable
13. Other Current Assets
Unit: yuan
Balance at the beginning of the
Item Closing Balance
period
Return cost receivable 865,458.41 779,058.41
Interest on fixed deposit / large deposit 82,451,310.24 97,786,429.67
VAT input tax to be deducted / uncertified input tax 52,349,403.88 51,890,783.52
Prepaid corporate income tax 31,541,302.72 38,171,660.89
Unamortized expenses 15,419,863.48 10,150,883.88
Pledged certificate of deposit 180,000,000.00
Others 2,866.99 74,836.27
Total 182,630,205.72 378,853,652.64
172
2024 Semiannual Report
Other description:
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 Increase in the current Decrease in the current
Item Closing Balance
period 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 Coupon Maturity Overdue Book Coupon Actual Maturity Overdue
Actual rate
value rate date principal value rate rate date principal
(3) Provision for impairment
Unit: yuan
Stage 1 Stage 2 Stage 3
Provision for bad debt Expected credit losses Expected credit losses over Expected credit losses over Total
over the next 12 the entire duration (no credit the entire duration (credit
months impairment occurred) impairment has occurred)
Balance on January 1, 2024 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
173
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 Accumulate
Accrued Interest change in Closing provision
Item beginning of Cost d fair value Remark
interest adjustments the current Balance recognized in other
the period change
period comprehensive
income
Changes in the provision for impairment of other debt investments during the period
Unit: yuan
Balance at the beginning of the Increase in the current Decrease in the current
Item Closing Balance
period period period
(2) Other important debt investments at the end of the period
Unit: yuan
Closing Balance Balance at the beginning of the period
Other
debt item Book Maturity Overdue Book Maturity Overdue
Coupon rate Actual rate Coupon rate Actual rate
value date principal value date principal
(3) Provision for impairment
Unit: yuan
Stage 1 Stage 2 Stage 3
Expected credit losses Expected credit losses over Expected credit losses over
Provision for bad debt over the next 12 the entire duration (no credit the entire duration (credit Total
months impairment occurred) impairment has occurred)
Balance on January 1, 2024 in the current period
Basis for division of each stage and provision ratio for bad debts
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2024 Semiannual Report
(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
Reasons for
Accumulated Loss designating to
Gain
Loss included gains included accumulated Dividend be measured at
Balance at recognized in
in other in other in other income fair value and
Project the other Closing
comprehensiv comprehensiv comprehensiv recognized its changes are
name beginning of comprehensive Balance
e income for e income at e income at during the recorded into
the period income for the
the period the end of the the end of the period other
period
period period comprehensive
income
Derecognition occurred in the current period
Unit: yuan
Accumulated gains transferred to retained Cumulative losses transferred to Reasons for termination of
Project name
earnings retained earnings confirmation
Itemized disclosure of the current non-trading equity instrument investment
Unit: yuan
Reasons for
designating to be
Amount of other Reasons for other
measured at fair
comprehensive comprehensive
Recognized dividend Accumulated Accumulated value and its
Project name income transferred income
income gains losses changes are
into retained transferring into
recorded into other
income retained income
comprehensive
income
Other description:
175
17. Long-Term Receivables
(1) Long-term receivables
Unit: yuan
Closing Balance Balance at the beginning of the period
Provision Discount rate
Item Provision
Book balance Book value Book balance for bad Book value range
for bad debt
debt
Finance leases 36,657,910.53 36,657,910.53 35,689,264.21 35,689,264.21
Including:
Unrealized
8,230,677.66 8,230,677.66 9,320,807.04 9,320,807.04
financing
gains
Total 36,657,910.53 36,657,910.53 35,689,264.21 35,689,264.21
(2) Classified disclosure according to bad debt accrual method
Unit: yuan
Balance at the
Closing Balance
beginning of the period
Class Book balance Provision for bad debt Book balance Provision for bad debt
Proporti Accruing Book value Accruing Book value
Amount Amount Amount Proportion Amount
on 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 Expected credit losses over Expected credit losses over Total
over the next 12 the entire duration (no credit the entire duration (credit
months impairment occurred) impairment has occurred)
Balance on January 1, 2024 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
Balance at the Amount of change in the current period
Class beginning of the Recovered or Write Closing Balance
period Accrual Other changes
reversed off/verification
176
2024 Semiannual Report
Where the amount of bad debt provision reversed or recovered is important:
Unit: yuan
The rationale behind
determining the original
Unit name Amount recovered or reversed Reasons Recovery way
provision ratio for bad debts
and its justification
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
Whether the
Reasons for write- Write-off procedures payments arise from
Unit name Nature of payment Amount written off
off performed connected
transactions
Notes on the write-off of long-term receivables:
18. Long-Term Equity Investment
Unit: yuan
Increase or decrease in the current period
Opening Cha Prov Ending
Investment Declared
balance Capi Adjustment nges isio balanc
gains and payment
Beginning of tal of other in n e of
Invested Further losses of cash Oth Ending balance
balance (book provisio redu comprehen othe for impair
unit investment recognized by dividend ers (book value)
value) n for ctio sive r imp ment
the equity s or
impairm n income equit airm provisi
method profits
ent y ent on
I. Cooperative enterprise
II. Joint venture
Chengdu
20,377,034.07 115,196.26 20,492,230.33
Winner
Hubei
Xianchu
ang
502,210.13 502,210.13
Technol
ogy Co.,
Ltd.
S
428,074,000.0
Compan -7,784,410.02 -27,725.77 420,261,864.21
0
y
428,074,000.0
Subtotal 20,879,244.20 -7,669,213.76 -27,725.77 441,256,304.67
0
428,074,000.0
Total 20,879,244.20 -7,669,213.76 -27,725.77 441,256,304.67
0
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
177
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
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:
19. Other Non-Current Financial Assets
Unit: yuan
Balance at the beginning of the
Item Closing Balance
period
Equity instrument investments 70,000,000.00 70,000,000.00
Total 70,000,000.00 70,000,000.00
Other description:
20. Investment Real Estates
(1) Investment real estates using cost measurement mode
√Applicable □ Not applicable
Unit: yuan
Item Houses and buildings Land use right Construction in 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 the current period
(1) Outsourcing
(2) Transfer from inventory / fixed assets /
construction in progress
(3) Increase by business combination
3. Amount decreased in the current period
(1) Disposal
(2) Other roll-out
4. Closing Balance 10,739,083.13 10,739,083.13
178
2024 Semiannual Report
Construction in
Item Houses and buildings Land use right Total
Progress
II. Accumulated depreciation and
accumulated amortization
1. Balance at the beginning of the
3,045,741.34 3,045,741.34
period
2. Amount increased in the current
527,156.66 527,156.66
period
(1) Provision or amortization 527,156.66 527,156.66
3. Amount decreased in the current
period
(1) Disposal
(2) Other roll-out
4. Closing Balance 3,572,898.00 3,572,898.00
III. Provision for impairment
1. Balance at the beginning of the
period
2. Amount increased in the current
period
(1) Accrual
3. Amount decreased in the current
period
(1) Disposal
(2) Other roll-out
4. Closing Balance
IV. Book value
1. Ending book value 7,166,185.13 7,166,185.13
2. Beginning book value 7,693,341.79 7,693,341.79
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
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:
179
(2) Investment real estates using fair value measurement mode
□ Applicable √ Not applicable
(3) Converted to investment property and valued at fair value
Unit: yuan
Impact on other
Approval Impact on profit or
Item Accounts before conversion Amount Conversion reason comprehensive
procedures loss
income
(4) Investment real estates without certificate of title
Unit: yuan
Item Book value Reasons for not obtaining the certificate of
title
Other description
21. Fixed Assets
Unit: yuan
Balance at the beginning of
Item Closing Balance
the period
Fixed Assets 2,903,124,395.97 2,749,018,750.62
Total 2,903,124,395.97 2,749,018,750.62
(1) Fixed assets
Unit: yuan
Machinery Transportation Electronic equipment and office
Item Houses and building Total
equipment equipment equipment, etc.
I. Original book
value:
1. Balance at the
beginning of the 2,009,828,801.41 1,860,574,551.49 35,543,871.77 164,134,135.94 4,070,081,360.61
period
2. Amount increased
55,942,706.67 242,443,246.16 1,622,017.97 7,974,471.09 307,982,441.89
in the current period
(1) Purchase 10,358,791.71 60,242,676.89 1,424,053.37 7,496,016.53 79,521,538.50
(2) Transfer from
construction in 45,583,914.96 182,200,569.27 227,784,484.23
progress
(3) Increase by
197,964.60 478,454.56 676,419.16
business combination
3. Amount decreased
693,912.23 34,318,423.96 1,334,507.81 4,833,429.58 41,180,273.58
in the current period
(1) Disposal or scrap 693,912.23 34,318,423.96 1,334,507.81 4,833,429.58 41,180,273.58
4. Closing Balance 2,065,077,595.85 2,068,699,373.69 35,831,381.93 167,275,177.45 4,336,883,528.92
180
2024 Semiannual Report
Machinery Transportation Electronic equipment and office
Item Houses and building Total
equipment equipment equipment, etc.
II. Accumulated
depreciation
1. Balance at the
beginning of the 382,214,592.23 703,126,447.87 22,075,956.18 92,754,109.55 1,200,171,105.83
period
2. Amount increased
38,874,057.74 75,034,816.28 1,562,651.28 15,897,693.16 131,369,218.46
in the current period
(1) Accrual 38,874,057.74 75,034,816.28 1,437,273.70 15,733,193.16 131,079,340.88
(2) Increase by
125,377.58 164,500.00 289,877.58
business combination
3. Amount decreased
217,637.97 13,680,866.17 1,167,198.17 3,598,964.86 18,664,667.17
in the current period
(1) Disposal or scrap 217,637.97 13,680,866.17 1,167,198.17 3,598,964.86 18,664,667.17
4. Closing Balance 420,871,012.00 764,480,397.98 22,471,409.29 105,052,837.85 1,312,875,657.12
III. Provision for
impairment
1. Balance at the
beginning of the 43,277,161.98 76,469,048.39 25,258.85 1,120,034.94 120,891,504.16
period
2. Amount increased
298,426.97 298,426.97
in the current period
(1) Accrual 298,426.97 298,426.97
3. Amount decreased
306,455.30 306,455.30
in the current period
(1) Disposal or scrap 306,455.30 306,455.30
4. Closing Balance 43,277,161.98 76,461,020.06 25,258.85 1,120,034.94 120,883,475.83
IV. Book value
1. Ending book value 1,600,929,421.87 1,227,757,955.65 13,334,713.79 61,102,304.66 2,903,124,395.97
2. Beginning book
1,584,337,047.20 1,080,979,055.23 13,442,656.74 70,259,991.45 2,749,018,750.62
value
(2) Fixed assets that are temporarily idle
Unit: yuan
Accumulated Provision for
Item Original book value Book value Remark
depreciation impairment
Not needed for
Machinery equipment 29,964,781.30 11,902,752.49 84,482.78 17,977,546.03
now
Electronic equipment
Not needed for
and office equipment, 14,664.80 12,641.28 2,023.52
now
etc.
Total 29,979,446.10 11,915,393.77 84,482.78 17,979,569.55
(3) Fixed assets leased out by operating lease
Unit: yuan
Item Ending book value
181
(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 62,464,745.87 The formalities have not yet been completed
Spunlace Phase III No.2 Finished Product
11,936,693.40 The formalities have not yet been completed
Workshop Project of Winner Medical (Tianmen)
Winner Medical (Wuhan) - No.1 Sorting
62,516,120.46 The formalities have not yet been completed
Workshops (Phase II)
Winner Medical (Wuhan) - No.2 Sorting
121,790,936.60 The formalities have not yet been completed
Workshops (Phase II)
Winner Medical (Wuhan) - No.3 Sorting
55,272,452.38 The formalities have not yet been completed
Workshops (Phase II)
Other description
(5) Impairment testing of fixed assets
□ Applicable √ Not applicable
(6) Liquidation of fixed assets
Unit: yuan
Balance at the beginning of
Item Closing Balance
the period
Other description
22. Construction in Progress
Unit: yuan
Balance at the beginning of the
Item Closing Balance
period
Construction in Progress 1,030,446,202.20 984,571,329.05
Total 1,030,446,202.20 984,571,329.05
(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 258,457,603.95 258,457,603.95 312,034,251.51 312,034,251.51
project
Winner Medical
(Jiayu) engineering 384,719,787.22 384,719,787.22 308,354,182.04 308,354,182.04
project
Winner Medical
(Shenzhen) 127,436,703.95 127,436,703.95 76,348,750.97 76,348,750.97
engineering project
Winner Medical
(Hunan) engineering 109,439,767.91 109,439,767.91 59,274,700.93 59,274,700.93
project
182
2024 Semiannual Report
Closing Balance Balance at the beginning of the period
Item Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
Zhejiang Longterm
47,281,148.38 47,281,148.38 18,342,398.26 18,342,398.26
project
Winner Guilin
25,760,934.47 10,205,833.26 15,555,101.21 46,030,337.25 10,205,833.26 35,824,503.99
engineering project
Winner Medical
(Huanggang) 12,653,233.93 12,653,233.93 12,299,188.10 12,299,188.10
Engineering Project
Tianmen
641,726.39 641,726.39 1,009,831.16 1,009,831.16
infrastructure project
Other equipment to be
installed and sporadic 74,290,529.26 29,400.00 74,261,129.26 161,112,922.09 29,400.00 161,083,522.09
projects
Total 1,040,681,435.46 10,235,233.26 1,030,446,202.20 994,806,562.31 10,235,233.26 984,571,329.05
(2) Current changes in major projects under construction
Unit: yuan
Interes
Other Accumul Including: t
Amount carried decrea Proportion ated interest capital
Balance at the Source
Amount increased in forward to fixed ses in of total Progress of amount of capitalizati ization
Project name Budget number beginning of the Closing Balance of
the current period assets in the the project input works interest on funds in rate in
period funds
current period current to the budget capitaliza the current the
period tion period current
period
Winner
Industrial Park
(Jiayu) Project
272,380,000.00 185,383,717.54 59,747,691.46 245,131,409.00 90.00% 93.62% Others
Construction
Engineering of
Workshop 1-4
Winner
Medical
110,871,722.11 91,545,458.64 24,143,495.10 115,688,953.74 104.34% 98.00% Others
(Wuhan) Phase
II Main Project
Automated
Storage
Engineering in
Phase II Plant 96,000,000.00 80,707,964.60 1,147,901.37 81,855,865.97 0.00 85.27% 100.00% Others
of Winner
Medical
(Wuhan)
R&D Center
Project of
Winner 35,666,270.00 31,085,281.20 31,085,281.20 87.16% 95.00% Others
Medical
(Wuhan)
Shift Building
and Canteen
Expansion
Project of 33,213,730.00 31,705,400.06 31,705,400.06 95.46% 98.00% Others
Winner
Medical
(Wuhan)
Medical
Industry
Building of
261,723,960.00 68,986,974.75 58,449,729.20 127,436,703.95 48.69% 75.00% Others
Winner
Medical
(Shenzhen)
Mexico
81,270,000.00 16,988,799.61 30,292,348.77 47,281,148.38 58.18% 56.00% Others
Longterm plant
Winner
Medical
(Hunan)
600,000,000.00 59,274,700.93 49,222,188.28 108,496,889.21 18.08% 30.00% Others
Medical Device
Industrial Park
Project Phase I
Total 1,491,125,682.11 565,678,297.33 223,003,354.18 81,855,865.97 0.00 706,825,785.54
183
(3) Provision for impairment of construction in progress in the current period
Unit: yuan
Balance at the beginning Increase in the Decrease in the
Item Closing Balance Reason for accrual
of the period current period current period
Other description
(4) Impairment testing of construction in progress
□ Applicable √ Not applicable
(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
184
2024 Semiannual Report
25. Right-of-Use Assets
(1) Right-of-use assets
Unit: yuan
Item Houses and building Total
I. Original book value
1. Balance at the beginning of the period 865,553,649.50 865,553,649.50
2. Amount increased in the current period 114,724,795.38 114,724,795.38
New lease 114,724,795.38 114,724,795.38
3. Amount decreased in the current period 119,924,882.20 119,924,882.20
Disposal 119,924,882.20 119,924,882.20
4. Ending balance 860,353,562.68 860,353,562.68
II. Accumulated depreciation
1. Balance at the beginning of the period 448,057,628.14 448,057,628.14
2. Amount increased in the current period 102,793,692.82 102,793,692.82
(1) Accrual 102,793,692.82 102,793,692.82
3. Amount decreased in the current period 112,315,436.65 112,315,436.65
(1) Disposal (2) 112,315,436.65 (3) 112,315,436.65
4. Closing Balance 438,535,884.31 438,535,884.31
III. Provision for impairment
1. Balance at the beginning of the period
2. Amount increased in the current period
(1) Accrual
3. Amount decreased in the current period
(1) Disposal
4. Closing Balance
IV. Book value
1. Ending book value 421,817,678.37 421,817,678.37
2. Beginning book value 417,496,021.36 417,496,021.36
(2) Testing for impairment of right-of-use assets
□ Applicable √ Not applicable
Other description:
185
26. Intangible Assets
(1) Intangible assets
Unit: yuan
Nonpate
nted Software use Franchised use
Item Land use right Patent right Trademark right Client relations Total
technolo right right
gy
I. Original book
value
1. Balance at
the beginning 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
of the period
2. Amount
increased in 1,040,300.00 30,000.00 2,033,078.75 3,103,378.75
the current
period
(1) Purchase 1,040,300.00 30,000.00 2,033,078.75 3,103,378.75
(2) Internal R&D
(3) Increase by
business
combination
3. Amount
decreased in
the current
period
(1) Disposal
4. Closing 548,719,728.57 269,973,554.50 100,596,222.80 10,228,226.53 95,103,980.97 189,568,908.40 1,214,190,621.77
Balance
II. Accumulated
amortization
1. Balance at
the beginning 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
of the period
2. Amount
increased in 5,427,791.72 14,608,571.39 4,075,611.02 4,554,399.64 8,850,186.30 37,516,560.07
the current
period
(1) Accrual 5,427,791.72 14,608,571.39 4,075,611.02 4,554,399.64 8,850,186.30 37,516,560.07
3. Amount
decreased in
the current
period
(1) Disposal
4. Closing 66,119,647.10 66,836,488.50 59,229,287.16 10,228,226.53 19,628,649.06 31,333,271.23 253,375,569.58
Balance
III. Provision for
impairment
1. Balance at the
beginning of the
period
2. Amount
increased in the
current period
(1) Accrual
3. Amount
decreased in the
current period
(1) Disposal
4. Closing
Balance
IV. Book value
1. Ending book
482,600,081.47 203,137,066.00 41,366,935.64 75,475,331.91 158,235,637.17 960,815,052.19
value
2. Beginning 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
186
2024 Semiannual Report
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%
187
(2) Data resources recognized as intangible assets
Unit: yuan
Intangible assets of outsourced Intangible assets of self- Intangible assets of data
Item Total
data resources processed data resources resources otherwise acquired
(3) Land use right without certificate of title
Unit: yuan
Item Book value Reasons for not obtaining the certificate of title
The two certificates are consolidated into one, and
Winner Medical (Hunan) - Phase II land for
82,852,220.99 the real estate certificate can be applied for upon
infusion category
completion
Other description
(4) Testing for impairment of intangible assets
□ Applicable √ Not applicable
27. Goodwill
(1) Original book value of goodwill
Unit: yuan
Decrease in
Increase in the current period the current
Balance at the period
Investee name or goodwill
beginning of the Closing Balance
forming matter Formed by
period Increase business
business Disposal
acquisition
combination
Business combination not
under common control -
2,681,232.09 2,681,232.09
Acquisition of Malaysia
Winner
Business combination not
under common control -
390,472,978.67 390,472,978.67
Acquisition of Zhejiang
Longterm
Business combination not
under common control - 253,215,940.40 253,215,940.40
Acquisition of Guilin Latex
Business combination not
under common control -
388,989,258.26 388,989,258.26
Acquisition of Winner
Medical (Hunan)
Business combination not
under common control -
20,397,972.33 20,397,972.33
Acquisition of Junjian
Medical
Business combination not
under common control -
2,213,420.16 2,213,420.16
Acquisition of Zhejiang
Honglan
Total 1,055,757,381.75 2,213,420.16 1,057,970,801.91
188
2024 Semiannual Report
(2) Provision for impairment of goodwill
Unit: yuan
Balance at the Increase in the current Decrease in the current
invested entity name or period period
beginning of the Closing Balance
goodwill forming matter
period Accrual Disposal
Business combination not under
common control - Acquisition 2,681,232.09 2,681,232.09
of Malaysia Winner
Business combination not under
common control - Acquisition 32,642,673.30 32,642,673.30
of Guilin Latex
Business combination not under
common control - Acquisition 156,144,473.91 156,144,473.91
of Winner Medical (Hunan)
Total 191,468,379.30 191,468,379.30
(3) Information relating to the asset group or asset group combination of goodwill
The composition and basis of the asset group or Is it consistent with previous
Name Operating segments and basis
portfolio it belongs to years?
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
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
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
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
(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
189
28. Long-Term Unamortized Expenses
Unit: yuan
Balance at the
Amount increased in Amortization amount
Item beginning of the Other decreases Closing Balance
the current period in the current period
period
Decoration cost 36,466,182.36 1,305,330.29 5,914,400.28 1,369,756.96 30,487,355.41
Decoration expenses for
operating leased fixed 91,788,177.80 24,884,556.10 21,714,707.75 1,168,439.59 93,789,586.56
assets
Others 2,836,109.99 303,539.83 987,205.65 1,016,574.30 1,135,869.87
Total 131,090,470.15 26,493,426.22 28,616,313.68 3,554,770.85 125,412,811.84
Other description
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 573,284,957.88 94,753,801.90 563,729,896.96 93,836,596.43
Unrealized profit of internal
82,812,941.18 17,051,476.54 95,050,168.29 19,008,937.89
transaction
Deductible loss 58,716,688.54 14,127,381.28 162,261,104.42 27,044,245.03
Dismission welfare 6,436,926.75 1,332,944.84 4,779,605.32 716,940.80
Deferred Income 116,525,098.52 18,640,070.42 121,649,364.97 19,453,796.42
Member points 10,302,150.62 2,575,537.65 8,896,543.12 2,224,135.78
Accrued liabilities 2,171,288.26 542,822.07 1,171,229.85 292,807.46
Deferred tax assets arising from
497,516,243.96 117,460,848.20 494,525,992.95 115,610,000.62
leases
Total 1,347,766,295.71 266,484,882.90 1,452,063,905.88 278,187,460.43
(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
differences liabilities differences tax liabilities
Asset evaluation increment for business
592,226,312.21 103,892,599.82 647,328,681.03 110,179,927.94
combination not under common control
Changes in fair value of trading financial
48,571,280.95 7,290,458.81 41,058,540.71 6,289,451.44
assets
190
2024 Semiannual Report
Closing Balance Balance at the beginning of the period
Item Taxable temporary Deferred income tax Taxable temporary Deferred income
differences liabilities differences tax liabilities
Depreciation of fixed assets 123,821,708.82 18,573,256.33 132,992,106.34 19,952,306.87
case that the change of a differences arising
462,976,380.13 107,203,609.28 457,331,866.07 104,935,304.46
Deferred income tax liabilities
Total 1,227,595,682.11 236,959,924.24 1,278,711,194.15 241,356,990.71
(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 Beginning balance of
Item deferred income tax assets income tax assets and of deferred income tax deferred income tax assets
and liabilities liabilities after offset assets and liabilities and liabilities after offset
Deferred income tax
104,761,463.13 161,723,419.77 102,836,212.41 175,351,248.02
assets
Deferred income tax
104,761,463.13 132,198,461.11 102,836,212.41 138,520,778.30
liabilities
(4) Details of unrecognized deferred income tax assets
Unit: yuan
Balance at the beginning of the
Item Closing Balance
period
Deductible loss 231,447,954.68 237,469,440.67
Provision for impairment of assets 1,003,913.97 1,003,903.52
Total 232,451,868.65 238,473,344.19
(5) Deductible losses on unrecognized deferred income tax assets will expire in the following year
Unit: yuan
Year Closing balance Beginning amount Remark
2024 46,074,791.69 49,242,056.04
2025 46,546,726.71 53,806,994.23
2026 65,550,076.42 67,039,319.19
2027 64,047,377.46 64,047,377.46
2028 2,416,690.21 2,597,636.60
2029 5,429,220.26
No maturity date 1,383,071.93 736,057.15
Total 231,447,954.68 237,469,440.67
Other description
191
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
purchase payment /
113,642,924.31 113,642,924.31 84,628,360.75 84,628,360.75
advance store
engineering and
decoration payment
Buildings and land use
rights in Shenzhen
20,228,190.61 20,228,190.61 20,228,190.61 20,228,190.61
Longhua Industrial
Park
Total 133,871,114.92 133,871,114.92 104,856,551.36 104,856,551.36
Other description:
31. Assets with Ownership or Use Rights Restricted
Unit: yuan
The end of the period The beginning of the period
Type Type
Item of Restricted of Restricted
Book balance Book value Book balance Book value
restrict situation restrict situation
ion ion
For details, see For details, see
“VII. Notes to “VII. Notes to
Cash and Securi Items in the Securi Items in the
cash ty Consolidated ty Consolidated
23,672,939.83 23,672,939.83 28,791,288.82 28,791,288.82
equivalen deposi Financial deposi Financial
ts t Statements / 1. t Statements / 1.
Cash and cash Cash and cash
equivalents”. equivalents”.
For details, please
For details, please
refer to Note
refer to Note
“XVIII. Other
“XVIII. Other
Important Matters
Important Matters
7. Other
7. Other Important
Important Events
Events that Affect
Other that Affect
Investors’
Non- Investors’
20,228,190.61 20,228,190.61 20,228,190.61 20,228,190.61 Decisions (1)
Current Decisions (1)
Urban Renewal
Assets Urban Renewal
Project of Winner
Project of Winner
Industrial Park”
Industrial Park”
Winner Medical
Winner Medical
(Shenzhen) -
(Shenzhen) -
Longhua
Longhua
Industrial Park
Industrial Park
Securi
Other
ty Pledged certificate
Current 180,000,000.00 180,000,000.00
deposi of deposit
Assets
t
Total 43,901,130.44 43,901,130.44 229,019,479.43 229,019,479.43
Other description:
192
2024 Semiannual Report
32. Short-Term Loans
(1) Classification of short-term loans
Unit: yuan
Balance at the beginning of the
Item Closing Balance
period
Guaranteed borrowing 100,000.00 100,000.00
Debt of honor 270,096,567.28 233,000,000.00
Bill discount 720,000,000.00 1,060,000,000.00
Trade financing (Letter of Credit, etc.) 180,000,000.00 200,000,000.00
Borrowing interest 130,627.50 138,955.00
Total 1,170,327,194.78 1,493,238,955.00
Description of classification of short-term loans:
(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
33. Tradable Financial Liabilities
Unit: yuan
Balance at the beginning of
Item Closing Balance
the period
Including:
Including:
Other description:
34. Derivative Financial Liabilities
Unit: yuan
Balance at the beginning of
Item Closing Balance
the period
Other description:
193
35. Notes Payable
Unit: yuan
Balance at the beginning of the
Type Closing Balance
period
Banker’s acceptance bill 363,977,108.89 315,902,844.15
Total 363,977,108.89 315,902,844.15
36. Accounts Payable
(1) Presentation of accounts payable
Unit: yuan
Balance at the beginning of the
Item Closing Balance
period
Within 1 year (including 1 year) 807,130,844.94 1,088,985,790.28
1 to 2 years (including 2 years) 16,747,338.40 21,481,374.19
2 to 3 years (including 3 years) 3,718,398.52 1,568,734.69
More than 3 years 4,826,734.44 4,766,321.22
Total 832,423,316.30 1,116,802,220.38
(2) Important accounts payable with Overdue the aging more than 1 year
Unit: yuan
Reasons for failure of payment or
Item Closing Balance
carryover
Other description:
37. Other Payables
Unit: yuan
Balance at the beginning of the
Item Closing Balance
period
Dividends payable 203,307,193.50
Other Payables 523,915,201.64 591,310,917.61
Total 727,222,395.14 591,310,917.61
(1) Interest payable
Unit: yuan
Balance at the beginning of
Item Closing Balance
the period
194
2024 Semiannual Report
Important overdue and unpaid interest:
Unit: yuan
Item Overdue balance Overdue reason
Other description:
(2) Dividends payable
Unit: yuan
Balance at the beginning of
Item Closing Balance
the period
Common stock dividends 203,307,193.50
Total 203,307,193.50
(3) Other Payables
1) Other payables listed by nature
Unit: yuan
Balance at the beginning of the
Item Closing Balance
period
Margin and deposit 282,981,586.57 281,427,299.00
Freight and other accrued expenses 156,806,827.32 186,895,812.59
Commission 31,769,282.20 58,667,353.50
VAT & Customs 10,082,263.77 12,701,935.49
Intercourse funds with the third parties 5,160,498.80 12,658,807.80
ESOP stock buyback requirement 10,857,500.00 10,857,500.00
Intercourse funds with related parties 5,395,945.27
Others 26,257,242.98 22,706,263.96
Total 523,915,201.64 591,310,917.61
2) Significant overdue accounts payable aged over 1 year or past due
Unit: yuan
Reasons for failure of payment or
Item Closing Balance
carryover
Other description
195
38. Advance from Customers
(1) Presentation of advance from customers
Unit: yuan
Balance at the beginning of the
Item Closing Balance
period
(2) Important advances from customers with the aging more than 1 year or past due
Unit: yuan
Reasons for failure of payment or
Item Closing Balance
carryover
Unit: yuan
Item Amount of change Reason for change
39. Contract Liabilities
Unit: yuan
Balance at the beginning of the
Item Closing Balance
period
Customer consideration received 169,609,619.38 184,366,349.03
Member points 10,302,150.62 8,896,543.12
Total 179,911,770.00 193,262,892.15
Significant contractual obligations aged over 1 year
Unit: yuan
Reasons for failure of payment or
Item Closing Balance
carryover
Amount and reasons for significant changes in book value during the reporting period
Unit: yuan
Item Amount of change Reason for change
196
2024 Semiannual Report
40. Payroll Payable
(1) Presentation of payroll payable
Unit: yuan
Balance at the Increase in the current Decrease in the current
Item Closing Balance
beginning of the period period period
I. Short-term compensation 242,607,317.55 808,312,865.63 844,082,377.09 206,837,806.09
II. Welfare after dismission - defined
7,866,690.22 63,699,822.00 64,193,503.83 7,373,008.39
contribution plan
III. Dismission welfare 4,001,227.95 18,615,369.55 20,011,628.57 2,604,968.93
Total 254,475,235.72 890,628,057.18 928,287,509.49 216,815,783.41
(2) Presentation of short-term compensation
Unit: yuan
Balance at the beginning Increase in the current Decrease in the current
Item Closing Balance
of the period period period
1. Salary, bonus, allowance and
238,771,298.44 750,380,438.44 784,335,067.65 204,816,669.23
subsidy
2. Welfare expenses for employees 2,824,314.61 7,226,343.58 9,179,710.69 870,947.50
3. Social security 473,703.76 31,273,286.73 31,321,268.74 425,721.75
Including: medical insurance premium 260,778.41 27,530,950.61 27,543,330.91 248,398.11
Industrial injury insurance
160,378.85 2,350,893.37 2,386,532.37 124,739.85
premium
Birth insurance premium 52,546.50 1,391,442.75 1,391,405.46 52,583.79
4. Housing accumulation fund 24,098.00 18,327,579.86 18,298,081.86 53,596.00
5. Union dues and staff education fund 313,902.74 1,065,217.02 846,185.95 532,933.81
8. Others 200,000.00 40,000.00 102,062.20 137,937.80
Total 242,607,317.55 808,312,865.63 844,082,377.09 206,837,806.09
(3) Presentation of defined contribution plans
Unit: yuan
Balance at the beginning of the Increase in the current Decrease in the current
Item Closing Balance
period period period
1. Basic endowment insurance 7,744,745.54 60,984,767.29 61,462,327.39 7,267,185.44
2. Unemployment insurance
121,944.68 2,715,054.71 2,731,176.44 105,822.95
premium
Total 7,866,690.22 63,699,822.00 64,193,503.83 7,373,008.39
Other description:
197
41. Taxes Payable
Unit: yuan
Balance at the beginning of the
Item Closing Balance
period
Added value tax 41,138,973.40 8,974,689.54
Corporate income tax 36,227,158.43 40,190,413.70
Individual income tax 3,014,671.84 3,866,181.55
Urban maintenance and construction tax 2,524,456.72 946,970.72
Housing property tax 6,017,921.91 6,172,395.17
Education surcharge and local education surcharge 1,987,382.78 837,582.92
Land use tax 1,549,410.34 1,057,104.57
Stamp duty 753,700.14 789,943.27
Others 39,222.27 42,498.42
Total 93,252,897.83 62,877,779.86
Other description
42. Liabilities Held for Sales
Unit: yuan
Balance at the beginning of
Item Closing Balance
the period
Other description
43. Non-Current Liabilities Due within One Year
Unit: yuan
Balance at the beginning of the
Item Closing Balance
period
Long-term borrowing due within one year 180,125,000.00 20,138,900.00
Lease liabilities due within one year 193,481,703.64 202,660,926.45
Long-term payroll payable due within one year 333,510.22 627,000.00
Total 373,940,213.86 223,426,826.45
Other description:
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2024 Semiannual Report
44. Other Current Liabilities
Unit: yuan
Balance at the beginning of the
Item Closing Balance
period
Refund payable 2,171,288.26 1,950,288.26
Output tax to be transferred 16,343,696.87 17,762,039.93
Total 18,514,985.13 19,712,328.19
Increase/decrease of short-term bonds payable:
Unit: yuan
Balance
Amortiza
at the
Maturit Accrued tion of Current
Name of Book Coupon Issue Issue beginni Current Closing Default
y of interest at premium repaym
bond value rate date amount ng of issue Balance or not
bond book value and ent
the
discount
period
Total
Other description:
45. Long-Term Loans
(1) Classification of long-term borrowing
Unit: yuan
Balance at the beginning of
Item Closing Balance
the period
Debt of honor 170,000,000.00
Total 170,000,000.00
Description of classification of long-term borrowing:
Other descriptions, including interest rate range:
46. Bonds Payable
(1) Bonds Payable
Unit: yuan
Balance at the beginning of
Item Closing Balance
the period
199
(2) Increase and decrease of bonds payable (excluding preferred shares, perpetual bonds and other financial instruments classified as
financial liabilities)
Unit: yuan
Balance
Amortiza
at the
Maturit Accrued tion of Current
Name of Book Coupon Issue Issue beginni Current Closing Default
y of interest at premium repaym
bond value rate date amount ng of issue Balance or not
bond book value and ent
the
discount
period
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 Decrease in the current
The beginning of the period Increase in the current period The end of the period
financial period
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
47. Lease Liabilities
Unit: yuan
Balance at the beginning of the
Item Closing Balance
period
Lease payments 323,526,916.55 332,663,417.84
Unrecognized financing expenses -19,354,370.74 -40,653,913.80
Total 304,172,545.81 292,009,504.04
Other description
48. Long-Term Payable
Unit: yuan
Balance at the beginning of the
Item Closing Balance
period
Total 0.00
200
2024 Semiannual Report
(1) Long-term payables listed by nature
Unit: yuan
Balance at the beginning of the
Item Closing Balance
period
Other description:
(2) Special accounts payable
Unit: yuan
Balance at the beginning Increase in the Decrease in the
Item Closing Balance Causes
of the period current period current period
Other description:
49. Long-Term Payroll Payable
(1) Table of long-term payroll payable
Unit: yuan
Balance at the beginning of the
Item Closing Balance
period
I. Welfare after dismission - net liabilities of defined
8,844,510.22 9,138,000.00
benefit plan
Long-term payroll payable due within one year -333,510.22 -627,000.00
Total 8,511,000.00 8,511,000.00
(2) Changes in defined benefit plan
Present value of defined benefit plan obligations:
Unit: yuan
Amount incurred in previous
Item Amount incurred in the current period
period
Planned assets:
Unit: yuan
Amount incurred in previous
Item Amount incurred in the current period
period
Net liabilities (net assets) of defined benefit plan
Unit: yuan
Amount incurred in previous
Item Amount incurred in the current period
period
201
Description of the content of defined benefit plan and its related risks, impact on the Company’s future cash flow, time and uncertainty:
Description of significant actuarial assumptions and sensitivity analysis results of defined benefit plan:
Other description:
50. Estimated Liabilities
Unit: yuan
Balance at the beginning of the
Item Closing Balance Causes
period
Other descriptions, including relevant important assumptions and estimation descriptions of important estimated liabilities:
51. Deferred Income
Unit: yuan
Balance at the Increase in the Decrease in the
Item Closing Balance Causes
beginning of the period current period current period
Government Government subsidies
121,649,364.97 2,281,800.00 7,406,066.45 116,525,098.52
Subsidies related to assets
Total 121,649,364.97 2,281,800.00 7,406,066.45 116,525,098.52
Other description:
52. Other Non-Current Liabilities
Unit: yuan
Balance at the beginning of
Item Closing Balance
the period
Other description:
53. Capital Stock
Unit: yuan
Increase/decrease (+, -)
Balance at the
New issue of Share Share capital
beginning of the Closing Balance
shares donatio increase from Others Subtotal
period
n reserved funds
Total
amount of 594,387,367.00 -6,094,659.00 -6,094,659.00 588,292,708.00
shares
Other description:
Note: 6,094,659 shares remaining in the Phase I employee stock ownership plan (including the reserved part) were excluded from the 2021
repurchase plan in the special securities account canceled by the Company in the current period. After the cancellation, the total share capital
of the Company has been reduced from 594,387,367 shares to 588,292,708 shares.
202
2024 Semiannual Report
54. Other Equity Instruments
(1) Basic information of the outstanding preferred shares, perpetual bonds and other financial instruments at the end of the period
(2) Table of changes in outstanding financial instruments, such as preferred shares, perpetual bonds at the end of the period
Unit: yuan
Outstanding Decrease in the current
The beginning of the period Increase in the current period The end of the period
financial period
instruments Quantity Book value Quantity Book value Quantity Book value Quantity Book value
The increase and decrease of other equity instruments in the current period, the reasons for the change, and the basis of relevant accounting
treatment:
Other description:
55. Capital Reserve
Unit: yuan
Balance at the beginning of Increase in the current Decrease in the current
Item Closing Balance
the period period period
Capital premium (capital
4,263,337,205.04 445,124,823.17 3,818,212,381.87
stock premium)
Other capital surplus 117,789,282.25 2,908,958.42 120,698,240.67
Total 4,381,126,487.29 2,908,958.42 445,124,823.17 3,938,910,622.54
Other description, including current increase/decrease and change reasons:
1. The decrease of capital premium (equity premium) in the current period is mainly due to the fact that the Company canceled the
repurchase plan in 2021 in the special securities account, excluding the remaining 6,094,659 shares in the first employee stock ownership
plan (including the reserved part). After the cancellation, the total share capital of the Company has been reduced from 594,387,367
shares to 588,292,708 shares, corresponding to the difference between the cost of treasury shares and the number of shares of RMB
445,124,832.17, which was charged to capital surplus - share premium.
2. The increase in other capital reserves in the current period is mainly due to the implementation of the employee stock ownership plan in
2023, and the Company confirmed that the incentive expenses totaled 2,908,958.42 yuan.
56. Treasury Stock
Unit: yuan
Balance at the beginning of the Increase in the current Decrease in the current
Item Closing Balance
period period period
Treasury Stock 473,552,442.85 194,981,835.21 451,219,482.17 217,314,795.89
Total 473,552,442.85 194,981,835.21 451,219,482.17 217,314,795.89
Other description, including current increase/decrease and change reasons:
1. The increase in the current period is that the Company repurchased 5,807,900 treasury shares in the current period.
203
2. The decrease in the current period is the 6,094,659 shares remaining in the 2021 repurchase plan excluding the first employee stock
ownership plan (including the reserved part) in the special securities account of the current period. After the cancellation, the total share
capital of the Company has been reduced from 594,387,367 shares to 588,292,708 shares, corresponding to the cost of stock shares of
RMB 451,219,482.17.
57. Other Comprehensive Income
Unit: yuan
Amount incurred in the current period
Less: Less:
amount amount
included in included in
other other
comprehen comprehens
sive ive income Less: Attributable Attributable to Closing
Balance at the Amount before
income in in previous Income to the parent minority Balance
Item beginning of current income
previous period tax company shareholders
the period tax
period transferred expenses after tax after tax
transferred into
into profit retained
and loss in income in
the current the current
period period
I. Other comprehensive
income that can’t be
394,504.61 394,504.61
reclassified into profit
and loss
Including: Changes
arising from re-
394,504.61 394,504.61
measurement for defined
benefit plans
II. Other comprehensive
income that will be
1,820,864.83 -5,381,735.14 -2,931,540.14 -2,450,195.00 -1,110,675.31
reclassified into profit
and loss
Balance arising from the
translation of foreign
1,820,864.83 -5,381,735.14 -2,931,540.14 -2,450,195.00 -1,110,675.31
currency financial
statements
Total other
2,215,369.44 -5,381,735.14 -2,931,540.14 -2,450,195.00 -716,170.70
comprehensive 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:
58. Special Reserve
Unit: yuan
Balance at the beginning of the Increase in the current Decrease in the current
Item Closing Balance
period period period
Other description, including current increase/decrease and change reasons:
59. Surplus Reserve
Unit: yuan
Balance at the beginning of the Increase in the current Decrease in the current
Item Closing Balance
period period period
Statutory surplus
420,212,778.13 420,212,778.13
reserves
Total 420,212,778.13 420,212,778.13
Description of surplus reserves, including current increase/decrease and change reasons:
204
2024 Semiannual Report
60. Undistributed Profit
Unit: yuan
Item Current period Prior period
Undistributed profit at the end of previous period before
6,608,834,768.99 6,810,953,829.30
adjustment
Total undistributed profits at the beginning of the adjustment
15,161,518.35
period (+ for increase and - for decrease)
Undistributed profits at the beginning of the period after
6,608,834,768.99 6,826,115,347.65
adjustment
Plus: Net profits attributable to the owners of parent company
384,150,379.21 681,617,022.68
in the current period
Common stock dividends payable 291,164,904.00 797,501,533.10
Undistributed profits at the end of the period 6,701,820,244.20 6,710,230,837.23
Details of undistributed profits at the beginning of the adjustment period:
1). Due to retroactive adjustment of Accounting Standards for Business Enterprises and relevant new regulations, RMB 0.00 of the
undistributed profit at the beginning of the period was affected.
2). Due to the change of accounting policy, RMB 0.00 of the undistributed profit at the beginning of the period was affected.
3). Due to the correction of major accounting errors, RMB 0.00 of the undistributed profit at the beginning of the period was affected.
4). Due to the change of consolidation scope caused by the same control, RMB 0.00 of the undistributed profit at the beginning of the period
was affected.
5). RMB 0.00 of the undistributed profit at the beginning of the period was affected by the total amount of other adjustments
61. Revenue and Cost
Unit: yuan
Amount incurred in the current period Amount incurred in previous period
Item
Income Cost Income Cost
Main business 4,000,365,794.92 2,047,427,786.26 4,236,069,768.54 2,053,153,499.31
Other businesses 33,139,309.41 21,042,656.32 30,768,270.12 18,274,707.41
Total 4,033,505,104.33 2,068,470,442.58 4,266,838,038.66 2,071,428,206.72
205
Breakdown of operating revenues and cost of sale:
Unit: yuan
Segment 1 Segment 2 Medical consumables Healthy consumer goods Total
Contract Cost
classification Rev Rev Cost of
of Revenue Cost of sale Revenue Cost of sale Revenue Cost of sale
enue enue sale
sale
1,751,278,597.3
Business type 1,084,618,155.94 2,282,226,506.99 983,852,286.64 4,033,505,104.33 2,068,470,442.58
4
Including:
1,718,139,287.9
Main business 1,063,575,499.62 2,282,226,506.99 983,852,286.64 4,000,365,794.92 2,047,427,786.26
3
Other businesses 33,139,309.41 21,042,656.32 33,139,309.41 21,042,656.32
Classified by 1,751,278,597.3
1,084,618,155.94 2,282,226,506.99 983,852,286.64 4,033,505,104.33 2,068,470,442.58
operating area 4
Including:
Domestic sales 879,604,610.05 554,783,834.26 2,282,226,506.99 983,852,286.64 3,161,831,117.04 1,538,636,120.90
Overseas sales 871,673,987.29 529,834,321.68 871,673,987.29 529,834,321.68
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:
Types of quality
Amounts borne by
The nature of the assurance
Is he the main the Company that
Time to fulfill Important goods the provided by the
Item responsible are expected to be
performance obligations payment terms Company promises Company and
person? refunded to
to transfer related
customers
obligations
Other description
206
2024 Semiannual Report
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 RMB 0.00, of which RMB 0.00 is expected to be recognized as revenue in year 0, RMB 0.00 is expected to be recognized as revenue
in year 0, and RMB 0.00 is expected to be recognized as revenue in year 0.
Information related to variable consideration in the contract:
Major contract changes or major transaction price adjustments
Unit: yuan
Accounting treatment
Item Amount of impact on revenue
methods
Other description
62. Taxes and Surcharges
Unit: yuan
Amount incurred in the current Amount incurred in previous
Item
period period
Urban maintenance and construction tax 12,232,083.46 14,156,008.49
Education surcharge 5,524,309.32 6,616,460.38
Housing property tax 9,072,652.85 6,353,206.48
Land use tax 3,825,434.01 2,683,790.39
Stamp duty 2,246,687.40 3,296,228.60
Surcharge for local education 3,682,872.65 4,096,996.80
Others 72,239.43 143,517.47
Total 36,656,279.12 37,346,208.61
Other description:
63. Administrative Expenses
Unit: yuan
Amount incurred in the current Amount incurred in previous
Item
period period
Employee Compensation 164,617,810.80 166,770,159.81
Equity incentive fee 2,908,958.42 969,372.65
Depreciation and amortization charge 85,253,977.21 62,559,814.44
Consultant and intermediary service fees 6,336,530.64 5,393,034.14
Maintenance cost 13,992,875.34 12,638,086.57
207
Amount incurred in the current Amount incurred in previous
Item
period period
Communication and network services, cloud service fees, etc. 9,159,179.36 8,675,647.54
Water/electricity fee 5,008,979.02 5,190,635.07
Material consumption 2,497,021.75 872,320.18
Others 19,670,693.86 26,527,631.74
Total 309,446,026.40 289,596,702.14
Other description
64. Selling Expenses
Unit: yuan
Amount incurred in the Amount incurred in previous
Item
current period period
Employee Compensation 308,895,689.06 315,528,733.79
Travel expenses 11,089,494.35 10,524,681.48
Office communication costs 6,712,347.78 6,090,498.20
Sales commissions and expenses of e-commerce platform 150,321,611.77 125,398,549.11
Insurance premiums 2,303,225.44 2,967,753.30
Depreciation and amortization 117,958,551.43 112,902,943.06
Advertising and promotion expenses 339,609,578.47 276,337,254.06
Lease and property management expenses 76,942,306.30 77,531,439.61
Others 41,908,279.62 33,161,058.83
Total 1,055,741,084.22 960,442,911.44
Other description:
65. R&D Expenses
Amount incurred in the Amount incurred in previous
Item
current period period
Employee Compensation 73,541,069.28 91,378,032.54
Depreciation and amortization 10,391,587.90 12,257,120.71
Material 28,030,881.87 47,320,354.16
Other miscellaneous expenses 31,179,413.28 43,680,694.73
Total 143,142,952.33 194,636,202.14
Other description
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2024 Semiannual Report
66. Financial Expenses
Unit: yuan
Amount incurred in the current Amount incurred in previous
Item
period period
Interest expenses 24,015,659.66 32,891,514.25
Including: Interest expense on lease liabilities 11,651,258.00 11,671,553.10
Less: Interest revenue 57,012,846.01 69,863,134.66
Exchange gain or loss -5,279,738.42 -16,974,769.11
Others 834,384.93 1,151,962.83
Total -37,442,539.84 -52,794,426.69
Other description
67. Other Incomes
Unit: yuan
Amount incurred in the current Amount incurred in previous
Other sources of income
period period
Government Subsidies 22,618,569.68 33,571,024.65
Tax credits and deductions 14,664,363.42 13,109,669.86
Total 37,282,933.10 46,680,694.51
68. Net Exposure Hedging
Unit: yuan
Amount incurred in the current Amount incurred in previous
Item
period period
Other description
69. Income from Changes in Fair Value
Unit: yuan
Amount incurred in the current Amount incurred in previous
Sources of gains from fair value change
period period
Structured deposits of bank financial products and trust products
7,577,712.84 59,639,836.03
Income structured deposit
Total 7,577,712.84 59,639,836.03
Other description:
209
70. Investment Income
Unit: yuan
Amount incurred in the current Amount incurred in previous
Item
period period
Long-term equity investment gains measured by employing the equity
-7,669,213.76 1,580,818.74
method
Investment income from purchasing financial products 41,114,309.95 37,831,622.39
Total 33,445,096.19 39,412,441.13
Other description
71. Credit Impairment Loss
Unit: yuan
Amount incurred in the current Amount incurred in previous
Item
period period
Loss on bad debts of accounts receivable -7,704,855.99 2,577,194.52
Loss on bad debts of other receivables -590,961.45 254,779.09
Total -8,295,817.44 2,831,973.61
Other description
72. Assets Impairment Losses
Unit: yuan
Amount incurred in the current Amount incurred in previous
Item
period period
I. Inventory falling price loss and impairment loss of contract
-55,628,797.66 -100,794,883.37
performance costs
IV. Impairment loss of fixed assets -346,705.50
Total -55,975,503.16 -100,794,883.37
Other description:
73. Gains from Asset Disposal
Unit: yuan
Amount incurred in the current Amount incurred in previous
Source of income from disposal of assets
period period
Net gain or loss on disposal of long-term assets 1,930,800.28 5,324,751.10
210
2024 Semiannual Report
74. Non-Operating Income
Unit: yuan
Amount incurred in the current Amount incurred in previous Amounts recorded in the non-recurring
Item
period period gains and losses of the current period
Government Subsidies 3,000.00 78,000.00 3,000.00
Non-current assets scrap gains 989,144.70 1,894,252.58 989,144.70
Income from compensation or
396,911.10 181,446.52 396,911.10
fines
Others 4,754,300.71 4,548,899.67 4,754,300.71
Total 6,143,356.51 6,702,598.77 6,143,356.51
Other description:
75. Non-Operating Expenses
Unit: yuan
Amount incurred in the Amount incurred in previous Amounts recorded in the non-recurring
Item
current period period gains and losses of the current period
External donations 14,646.56 225,225.18 14,646.56
Loss on damage and scrap of non-
5,451,144.32 3,478,280.51 5,451,144.32
current assets
Compensation or amercement
285,600.58 326,411.19 285,600.58
outlay
Others 466,768.55 877,031.15 466,768.55
Total 6,218,160.01 4,906,948.03 6,218,160.01
Other description:
76. Income Tax Expenses
(1) Income tax expense table
Unit: yuan
Amount incurred in the
Item Amount incurred in previous period
current period
Current income tax expenses 59,786,140.23 90,099,787.82
Deferred income tax expenses 7,306,141.90 24,771,163.62
Adjustment of the previous annual income tax amount in the
58,768.11 15,507.71
current period
Total 67,151,050.24 114,886,459.15
211
(2) Accounting profit and income tax expense adjustment process
Unit: yuan
Amount incurred in the current
Item
period
Total profit 473,381,277.83
Income tax expenses calculated at the appropriate/applicable tax rate 71,007,191.67
Impact of different tax rates applied on subsidiaries 8,146,455.87
Impact of income tax before adjustment 58,768.11
The effect of non-taxable income 1,153,518.30
Impact of non-deductible costs, expenses and losses 4,906,297.24
Impact of deductible losses on unrecognized deferred income tax assets in the prior period -3,622,457.25
Impact of temporary difference or deductible losses on unrecognized deferred income tax assets in the
1,532,209.15
current period
Impact of weighted deduction of R&D costs -16,448,244.20
Effect of share-based payments in the current period 465,145.33
Impact of weighted deduction of wages for the disabled -47,833.98
Income Tax Expenses 67,151,050.24
Other description:
77. Other Comprehensive Income
See Note 57, Other comprehensive income, for details
78. Cash Flow Statement Items
(1) Cash related to operating activities
Other cash received related to operating activities
Unit: yuan
Amount incurred in the
Item Amount incurred in previous period
current period
Deposit, margin and quality guarantee deposit received 15,819,980.09 55,581,827.38
Interest income received 12,258,055.28 14,608,751.97
Government subsidies received 17,870,988.05 74,577,844.91
Others 9,945,725.42 7,440,857.43
Total 55,894,748.84 152,209,281.69
212
2024 Semiannual Report
Explanation on other cash received related to operating activities:
Other cash paid related to operating activities
Unit: yuan
Amount incurred in the
Item Amount incurred in previous period
current period
Management and development costs paid in cash 79,791,733.60 96,646,768.64
Selling expenses paid in cash 136,729,766.24 129,897,821.41
Deposit, margin and quality guarantee deposit paid 20,215,667.66 15,415,236.51
Bank handling charge 834,384.92 1,151,962.83
Others 109,911,168.01 107,076,248.17
Total 347,482,720.43 350,188,037.56
Description of other cash paid related to operating activities
(2) Cash related to investing activities
Other cash received related to investment activities
Unit: yuan
Amount incurred in the current
Item Amount incurred in previous period
period
Significant cash received related to investing activities
Unit: yuan
Amount incurred in the current
Item Amount incurred in previous period
period
Other cash received related to investment activities: other cash paid related to investment activities.
Unit: yuan
Amount incurred in the current
Item Amount incurred in previous period
period
Significant cash paid for investing activities
Unit: yuan
Amount incurred in the current
Item Amount incurred in previous period
period
213
Description of other cash paid related to investment activities:
(3) Cash related to financing activities
Other cash received related to financing activities
Unit: yuan
Amount incurred in the current
Item Amount incurred in previous period
period
L/C loan deposit recovered 180,000,000.00 50,000,000.00
Total 180,000,000.00 50,000,000.00
Description of other cash received related to financing activities:
Other cash paid related to financing activities
Unit: yuan
Amount incurred in the current
Item Amount incurred in previous period
period
Lease liability principal and interest paid on lease payments 113,647,443.24 106,678,094.74
Treasury stock repurchase paid 194,981,835.21
Total 308,629,278.45 106,678,094.74
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
(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
214
2024 Semiannual Report
79. Supplementary Information to the Statement of Cash Flows
(1) Supplementary Information to the Statement of Cash Flows
Unit: yuan
Further Information Current period amount Previous period amount
1. Reconciliation from net profits to cash flows from operating
activities
Net profit 406,230,227.59 706,186,238.90
Plus: Provision for impairment of assets 64,271,320.60 97,962,909.76
Depreciation of fixed assets, oil and gas assets and productive biological
131,079,340.88 119,399,692.26
assets
Depreciation of Right-of-use assets 102,793,692.82 97,174,613.52
Amortization of intangible assets 37,516,560.07 35,500,790.47
Amortization of long-term deferred expenses 28,616,313.68 25,789,908.37
Losses from disposal of fixed assets, intangible assets and other long-
term assets -1,930,800.28 -5,324,751.10
(gains expressed with “-”)
Loss on retirement of fixed assets (gains expressed with “-”) 4,461,999.62 1,584,027.93
Loss from fair value change (gains expressed with “-”) -7,577,712.84 -59,639,836.03
Financial expenses (gains expressed with “-”) -30,678,568.15 -28,104,046.05
Investment losses (gains expressed with “-”) -33,445,096.19 -39,412,441.13
Decreased in deferred income tax assets (increase expressed with “-”) 13,627,828.25 39,426,730.71
Increase in deferred income tax liabilities (decrease expressed with “-”) -6,322,317.19 -13,913,432.61
Decrease in inventories (increase expressed with “-”) -74,485,225.30 48,071,373.02
Decrease in operating receivables (increase expressed with “-”) -125,258,959.44 319,055,153.50
Increase in operating payables (decrease expressed with “-”) -313,349,779.33 -1,214,366,741.68
Others -2,215,308.03 28,788,523.05
Net cash flow from operating activities 193,333,516.76 158,178,712.89
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 3,893,999,245.96 4,236,440,239.16
Less: Beginning balance of cash 4,677,340,782.45 4,370,821,958.17
Plus: Ending balance of cash equivalents
Less: Ending balance of cash equivalents
Net increase in cash and cash equivalents -783,341,536.49 -134,381,719.01
215
(2) Net cash paid for obtaining subsidiaries in the current period
Unit: yuan
Amount
Cash or cash equivalents paid in the current period for business combinations occurred in the current period 5,000,000.00
Including:
Zhejiang Honglan 5,000,000.00
Less: Cash and cash equivalents held by the Company on the acquisition date 4,944,394.31
Including:
Zhejiang Honglan 4,944,394.31
Including:
Net cash paid for obtaining subsidiaries 55,605.69
Other description:
(3) Net cash from disposal of subsidiaries in the current period
Unit: yuan
Amount Amount
Including:
Including:
Including:
Other description:
(4) Composition of cash and cash equivalents
Unit: yuan
Balance at the beginning of the
Item Closing Balance
period
I. Cash 3,893,999,245.96 4,677,340,782.45
Including: cash on hand 120,879.58 76,471.98
Bank deposit readily available for payment 3,892,515,173.35 4,676,600,881.85
Other cash and cash equivalents readily available
1,363,193.03 663,428.62
for payment
III. Balance of cash and cash equivalents at end of period 3,893,999,245.96 4,677,340,782.45
216
2024 Semiannual Report
(5) The scope of use is limited but it is still classified as cash and cash equivalents
Unit: yuan
Reasons for retaining cash and
Item Current period amount Previous period amount
cash equivalents
(6) Cash and cash equivalents that are not classified as Monetary funds
Unit: yuan
Reasons for retaining cash and
Item Current period amount Previous period amount
cash equivalents
Other description:
(7) Description of other significant activities
80. Notes to Items in Statement of Owner’s Equity
State the name of “other” items and the amount of adjustment to the ending balance of previous year: N/A
81. Foreign Currency Monetary Items
(1) Foreign Currency Monetary Items
Unit: yuan
Ending balance converted to
Item Ending balance in foreign currency Conversion exchange rate
RMB
Cash and cash equivalents 317,789,993.30
Including: USD 39,712,680.46 7.1268 283,024,331.10
EUR 932,995.10 7.6617 7,148,328.56
HKD 29,002,306.04 0.91268 26,469,824.68
Yen 59,912,564.00 0.00447 267,809.16
Mexican peso 2,146,038.75 0.38574 827,812.99
Ringgit 34,373.96 1.50948 51,886.81
Accounts Receivable 235,422,759.42
Including: USD 31,841,242.25 7.1268 226,926,165.30
217
Ending balance converted to
Item Ending balance in foreign currency Conversion exchange rate
RMB
EUR 410,332.42 7.6617 3,143,843.90
HKD 5,864,695.67 0.91268 5,352,590.44
Yen 35,746.07 0.00447 159.78
Other Receivables 534,443.84
Including: HKD 553,244.00 0.91268 504,934.73
Mexican peso 76,500.00 0.38574 29,509.11
Accounts Payable 3,888,280.53
Including: USD 104,246.40 7.1268 742,943.24
EUR 47,731.60 7.6617 365,705.20
HKD 158,869.16 0.91268 144,996.70
Mexican peso 6,830,080.86 0.38574 2,634,635.39
Other Payables 31,148,306.90
Including: USD 4,187,002.00 7.1268 29,839,925.85
EUR 12,039.37 7.6617 92,242.04
HKD 1,297,263.52 0.91268 1,183,986.47
Mexican peso 83,352.88 0.38574 32,152.54
Long-Term Loans
Including: USD
EUR
HKD
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
82. Leased
(1) The Company as the lessee:
√Applicable □ Not applicable
218
2024 Semiannual Report
Variable lease payments that are not included in the measurement of the lease liabilities
√Applicable □ Not applicable
Item Current period amount (Yuan)
Interest expense of lease liabilities 11,651,258.00
Simplified treatment of short-term lease expenses included in the cost of related assets or current profits
13,311,473.19
and losses
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
7,888,188.30
related asset, or in the current period’s profit or loss
Portion stemming from sale and leaseback transactions
Income from subleasing right-to-use assets 1,090,129.38
Total cash outflow related to leases 134,847,104.73
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 chart above
Involvement in sale and leaseback transactions
(2) The Company’s role as lessor
Operating leases as lessor
□ Applicable √ Not applicable
Financial leases provided by the lessor
□ Applicable √ Not applicable
Undiscounted lease payments for each of the next five years
□ Applicable √ Not applicable
219
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
83. Data Resources
84. Others
VIII. Research and Development Expenditure
Unit: yuan
Amount incurred in previous
Item Amount incurred in the current period
period
1. Research and Development Projects Eligible for Capitalization
Amount increased in the current
Amount decreased in the current period
Balance at the period
Item beginning of the Internal Closing Balance
period Recognized as intangible Transfer to current
development Others
assets profit and loss
expenditure
Total
Significant capitalized R&D projects
How economic Specific criteria for
Estimated completion The point at which
Item R&D progress benefits are expected initiating
time capitalization begins
to be generated capitalization
Provision for impairment of development expenses
Unit: yuan
Balance at the beginning Increase in the Decrease in the
Item Closing Balance Impairment testing
of the period current period current period
2. Important Outsourced Research Projects
The manner in which economic benefits are expected Judgment standards and specific basis for
Project name
to be generated capitalization or expense
Other description:
220
2024 Semiannual Report
IX. Consolidation Scope Changes
1. Business Combination not under Common Control
(1) Business combination not under common control occurred in the current period
Unit: yuan
Income of the
Net profit of Cash flows of
acquiree
Method of Basis for the acquiree the acquired
Name of Time of Equity from the
Cost of equity equity Acquisition determination from the entity from the
the equity acquisiti acquisition
acquisition acquisitio date of acquisition acquisition acquisition
acquiree acquisition on ratio date to the
n date date to the end date to the end
end of the
of the period of the period
period
Zhejiang
Share
Honglan April 01, April 01, Acquisition of
6,071,163.00 57.00% acquisitio 0.00 -202,062.62 -650,470.32
Technolog 2024 2024 control
n
y Co., Ltd.
Other description:
Longterm Medical, a subsidiary, signed the Investment Agreement on Zhejiang Honglan Technology Co., Ltd. with Huang Chenchu and Yuan
Shenqin in February 2024, and Longterm Medical acquired 57% equity of Zhejiang Honglan Technology Co., Ltd. by way of capital increase
of RMB 6,071,163. The industrial and commercial change was completed on March 27, 2024, and the directors sent by the Company have
accounted for the majority in the new board of directors. For the convenience of accounting, April 1, 2024 is determined as the purchase date,
and it will be included in the scope of consolidated financial statements from April 1, 2024.
(2) Combination cost and goodwill
Unit: yuan
Combination cost Zhejiang Honglan
-- Cash 6,071,163.00
-- Fair value of non-cash assets
- Fair value of debt issued or assumed
--Fair value of equity securities issued
--Fair value of contingent consideration
--Fair value of the equity held prior to the purchase date on the purchase date
-- Others
Total combination cost 6,071,163.00
Less: the share of the fair value of identifiable net assets acquired 3,857,742.84
The amount of goodwill/combination cost less than the share of the fair value of identifiable net assets acquired 2,213,420.16
Method for determining the fair value of consolidation costs:
221
Contingent consideration and explanation of its changes:
Main reasons for the formation of large amount of goodwill:
Other description:
(3) Identifiable assets and liabilities of the acquiree on the acquisition date
Unit: yuan
Zhejiang Honglan
Book value on the
Fair value on the acquisition date
acquisition date
Assets: 6,823,049.89 6,823,049.89
Cash and cash equivalents 4,944,394.31 4,944,394.31
Accounts receivable payments
Inventory
Fixed Assets 386,541.58 386,541.58
Intangible Assets
Other Receivables 1,491,163.00 1,491,163.00
Other Current Assets 951.00 951.00
Debt: 55,080.00 55,080.00
Loan
Account payable payments 18,600.00 18,600.00
Deferred income tax liabilities
Contract Liabilities 3,000.00 3,000.00
Payroll Payable 33,480.00 33,480.00
Net assets 6,767,969.89 6,767,969.89
Less: Minority equity 2,910,227.05 2,910,227.05
Net assets acquired 3,857,742.84 3,857,742.84
Determination method of fair value of identifiable assets and liabilities:
Contingent liabilities of the acquiree incurred in business combination
Other description:
222
2024 Semiannual Report
(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 the current period
Unit: yuan
Income of the Net profit of the Income of Net profit of
Proportion Basis of combined party combined party the the
Basis for
Name of of equity business from the from the combined combined
Merger determinati
merged obtained in combination beginning of beginning of party during party during
date on of
party business under common current period to current period to the the
merger date
combination control the date of the date of comparison comparison
combination combination period period
Other description:
(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:
223
(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:
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 the current period
□Yes √No
224
2024 Semiannual Report
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:
The subsidiary Winner Medical (Wuhan) established Winner Medical Biomedical Technology (Wuhan) Co., Ltd. on April 30, 2024, accounting
for 67% of the shares;
Purcotton Wuhan, a subsidiary, established Purecotton Agricultural Technology (Wuhan) Co., Ltd. on May 14, 2024, accounting for 58% of
the shares.
6. Others
None
X. Interests in Other Entities
1. Interests in A Subsidiary
(1) Composition of enterprise group
Unit: yuan
Shareholding ratio Way of
Subsidiary name Registered capital Main operation site Registration place Business nature
Direct Indirect obtaining
Shenzhen City,
Shenzhen Shenzhen City,
130,000,000.00 Guangdong Sale of Purcotton products 100.00% Establishment
Purcotton Guangdong Province
Province
Beijing
3,000,000.00 Beijing Beijing Sale of Purcotton products 100.00% Establishment
Purcotton
Guangzhou City,
Guangzhou Guangzhou City,
1,000,000.00 Guangdong Sale of Purcotton products 100.00% Establishment
Purcotton Guangdong Province
Province
Shanghai
3,000,000.00 Shanghai Shanghai Sale of Purcotton products 100.00% Establishment
Purcotton
Shenzhen City,
Qianhai Shenzhen City,
10,000,000.00 Guangdong Sale of Purcotton products 100.00% Establishment
Purcotton Guangdong Province
Province
Production and sales of pure Business
Winner Medical Huanggang City, Huanggang City, cotton spunlace non-woven Combination
259,459,200.00 100.00%
(Huanggang) Hubei Province Hubei Province fabric, medical consumables and under Common
Purcotton products Control
Business
Production and sales of medical
Winner Medical Jingmen City, Jingmen City, Hubei Combination
23,000,000.00 consumables and Purcotton 100.00%
(Jingmen) Hubei Province Province under Common
products
Control
Business
Chongyang
Winner Medical Chongyang County, Production and sales of medical Combination
28,550,000.00 County, Hubei 100.00%
(Chongyang) Hubei Province consumables under Common
Province
Control
Business
Production and sales of medical
Winner Medical Jiayu County, Jiayu County, Hubei Combination
233,040,000.00 consumables and Purcotton 100.00%
(Jiayu) Hubei Province Province under Common
products
Control
Business
Winner Medical Zhijiang City, Zhijiang City, Hubei Production and sales of medical Combination
12,413,668.87 100.00%
(Yichang) Hubei Province Province gray cloth under Common
Control
225
Shareholding ratio Way of
Subsidiary name Registered capital Main operation site Registration place Business nature
Direct Indirect obtaining
Business
Production and sales of pure
Winner Medical Tianmen City, Hubei Tianmen City, Hubei Combination
37,670,000.00 cotton spunlace non-woven 100.00%
(Tianmen) Province Province under Common
fabric and Purcotton products
Control
Business
Sales of medical consumables
Winner Medical Combination
897,570.00 Hong Kong Hong Kong and healthy living consumer 60.00%
(Hong Kong) under Common
goods
Control
Business
Winner
Huanggang City, Huanggang City, Combination
(Huanggang) 18,738,690.96 Cotton trade 100.00%
Hubei Province Hubei Province under Common
Cotton
Control
Business
Winner Medical There is no actual business Combination not
4,943,266.40 Malaysia Malaysia 100.00%
Malaysia operation under Common
Control
Winner Medical Heyuan City, Heyuan City, There is no actual business
100,000,000.00 100.00% Establishment
(Heyuan) Guangdong Province Guangdong Province operation at present
Production and sterilization of
Winner Medical Wuhan City, Hubei Wuhan City, Hubei pure cotton spunlace non-
400,000,000.00 100.00% Establishment
(Wuhan) Province Province woven fabric and Purcotton
products
Shenzhen City, Shenzhen City, Sales of personal care and other
PureH2B 150,000,000.00 100.00% Establishment
Guangdong Province Guangdong Province products
Shenzhen City, Shenzhen City,
Purunderwear 5,000,000.00 Sales of Cotton Lining products 100.00% Establishment
Guangdong Province Guangdong Province
Huanggang Huanggang City, Huanggang City,
10,000,000.00 Sale of Purcotton products 100.00% Establishment
Purcotton Hubei Province Hubei Province
Winner Medical Foshan City, Foshan City, There is no actual business
1,000,000.00 100.00% Establishment
(Foshan) Guangdong Province Guangdong Province operation at present
Business
Zhejiang Production and sales of medical Combination not
50,000,000.00 Huzhou, Zhejiang Huzhou, Zhejiang 55.00%
Longterm consumables under Common
Control
Business
Other technology promotion Combination not
Hangzhou Shengyi 5,000,000.00 Hangzhou, Zhejiang Hangzhou, Zhejiang 55.00%
services under Common
Control
Business
Engineering technical research Combination not
Xi’an Longtemu 5,000,000.00 Xi’an, Shaanxi Xi’an, Shaanxi 55.00%
and experimental development under Common
Control
Business
Manufacturing of medical
Combination not
Deqing Longterm 2,000,000.00 Huzhou, Zhejiang Huzhou, Zhejiang instruments, equipment and 55.00%
under Common
device
Control
Business
Manufacturing of medical
United States Combination not
US US instruments, equipment and 55.00%
Longterm under Common
device
Control
Xiufeng District, Xiufeng District, Business
Guilin City, Guangxi Guilin City, Guangxi Combination not
Guilin Latex 86,600,997.00 Rubber products industry 91.74%
Zhuang Autonomous Zhuang Autonomous under Common
Region Region Control
Business
Winner Medical Production and sales of medical Combination not
44,000,111.00 Changde, Hunan Changde, Hunan 68.70%
(Hunan) consumables under Common
Control
Business
Ruian Medical Engineering technical research Combination not
2,000,000.00 Changsha, Hunan Changsha, Hunan 68.70%
Device and experimental development under Common
Control
Business
Shenzhen City, Shenzhen City, Combination not
Junjian Medical 20,120,000.00 Sales of medical consumables 100.00%
Guangdong Province Guangdong Province under Common
Control
Production and sales of medical
Mexico Longtai 73,629,872.52 Mexico Mexico 55.00% Establishment
consumables
226
2024 Semiannual Report
Shareholding ratio Way of
Subsidiary name Registered capital Main operation site Registration place Business nature
Direct Indirect obtaining
Shanghai
2,000,000.00 Shanghai Shanghai Sales of medical consumables 60.00% Establishment
Hongsong
Business
Jingzhou City, Hubei Jingzhou City, Hubei Production and sale of rubber Combination not
Jinzhou Latex 87,500,000.00 91.74%
Province Province products under Common
Control
Wuhan City, Hubei Wuhan City, Hubei
Wuhan Purcotton 20,000,000.00 Sale of Purcotton products 100.00% Establishment
Province Province
Hong Kong
Hong Kong Hong Kong Sale of Purcotton products 100.00% Establishment
Purcotton
There is no actual business
Pan-China (H.K.) 860,840.00 Hong Kong Hong Kong 100.00% Establishment
operation at present
Wuhan Digital Wuhan City, Hubei Wuhan City, Hubei Software development and
500,000.00 100.00% Establishment
Technology Province Province sales
Business
Ouhai District, Ouhai District,
Software development and Combination not
Zhejiang Honglan 10,651,163.00 Wenzhou City, Wenzhou City, 55.00%
technical services under Common
Zhejiang Province Zhejiang Province
Control
Wuhan City, Hubei Wuhan City, Hubei Medical research and
Winner Medical 5,000,000.00 67.00% Establishment
Province Province experimental development
Purecotton
Wuhan City, Hubei Wuhan City, Hubei Research and experimental
Agricultural 5,000,000.00 58.00% Establishment
Province Province development
Technology
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:
(2) Important non-wholly owned subsidiary
Unit: yuan
Current profits and Current dividends
Ending balance of minority
Subsidiary name Minority shareholding ratio losses attributable to declared to minority
equity
minority shareholders shareholders
Difference between the shareholding ratio and the voting right ratio of the minority shareholders of the subsidiary:
Other description:
227
(3) Main financial information of important non-wholly owned subsidiaries
Unit: yuan
Closing Balance Balance at the beginning of the period
Subsidiary Non- Current Non- Total Non- Current Non- Total
name Current Total Current Total
current liabiliti current liabiliti current liabiliti current liabiliti
assets assets assets assets
assets es liabilities es assets es liabilities es
Unit: yuan
Amount incurred in the current period Amount incurred in previous period
Subsidiary Cash flow Cash flow
Total Total
name from from
Revenue Net profit comprehensiv Revenue Net profit comprehensiv
financing financing
e income e income
activities activities
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:
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
(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
Less: 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
228
2024 Semiannual Report
3. Equity in Joint Venture Arrangement or Joint Venture
(1) Important cooperative enterprises or joint ventures
Name of Shareholding ratio
Accounting treatment method
cooperative Main operation Registration
Business nature of investment in cooperative
enterprise or joint site place Direct Indirect enterprises or joint ventures
venture
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:
(2) Major Financial Information about Important Cooperative Enterprises
Unit: yuan
Ending balance/amount incurred in Beginning balance/amount incurred in
the current period previous period
Current assets
Including: Cash and cash equivalents
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Minority equity
Attributable to the parent company shareholders’ equity
Share of net assets by shareholding ratio
Adjustment items
-- Goodwill
--Unrealized profit of internal transaction
-- Others
Book value of equity investments in joint ventures
Fair value of equity investments in joint ventures with publicly
quoted prices
Revenue
Financial Expenses
Income Tax Expenses
Net profit
229
Ending balance/amount incurred Beginning balance/amount incurred in
in the current period previous period
Net profit of discontinued operation
Other Comprehensive Income
Total comprehensive income
Dividends received from joint ventures in current year
Other description
(3) Major Financial Information About Important Jointly Operated Enterprises
Unit: yuan
Ending balance/amount incurred in Beginning balance/amount incurred in
the current period previous period
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Minority equity
Attributable to the parent company shareholders’ equity
Share of net assets by shareholding ratio
Adjustment items
-- Goodwill
--Unrealized profit of internal transaction
-- Others
Book value of equity investments in cooperative enterprises
Fair value of equity investments in cooperative enterprises
with publicly quoted prices
Revenue
Net profit
Net profit of discontinued operation
Other Comprehensive Income
Total comprehensive income
Dividends received from cooperative enterprises in current
year
230
2024 Semiannual Report
Other description
(4) Summary of financial information of unimportant cooperative enterprises and joint ventures
Unit: yuan
Ending balance/amount incurred in Beginning balance/amount incurred in
the current period previous period
Cooperative enterprise:
Total number of following items by shareholding ratio
- Joint venture:
Total book value of investment 441,256,304.67 23,328,454.74
Total number of following items by shareholding ratio
-- Net profit -7,669,213.76 1,580,818.75
-- Other comprehensive income -27,725.77
-- Total comprehensive income -7,696,939.53 1,580,818.75
Other description
This year, a newly-added joint-stock company failed to obtain the fair value of the assets and liabilities of the associated company on the
acquisition date, so it did not disclose the main financial data.
(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 the current Accumulated unrecognized
Name of cooperative enterprise Accumulated unrecognized losses
period (or net profit shared in the losses at the end of current
or joint venture in the previous period
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 / shares enjoyed
Main operation site Registration place Business nature
operation Direct Indirect
231
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
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
Amounts
Amount of Amount Other
Balance at the transferred to
Accountin additional included in changes Asset/income
beginning of the other earnings Closing Balance
g subject subsidy in the current non- during the related
period during the
current period revenue period
period
Government
Deferred subsidies
121,649,364.97 2,281,800.00 7,406,066.45 1 16,525,098.52
Income related to
assets
3. Government Subsidies Included in Current Profit and Loss:
√Applicable □ Not applicable
Unit: yuan
Amount incurred in previous
Accounting subject Amount incurred in the current period
period
Other Incomes 22,618,569.68 33,571,024.65
Non-Operating Income 3,000.00 78,000.00
Other description
232
2024 Semiannual Report
XII. Risks Associated with Financial Instruments
1. Types of Risks Arising from Financial Instruments
(I) 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 above financial instruments 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 cash and cash equivalents, 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 cash and cash equivalents 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.
233
The Company’s various financial liabilities are shown as follows in terms of undiscounted contract cash flows on maturity dates:
Unit: yuan
Closing Balance
Item Immediate Total undiscounted
Within 1 year 1-2 years 2-5 years More than 5 years
repayment contract amount
Short-Term Loans 1,170,327,194.78 1,170,327,194.78
Notes Payable 363,977,108.89 363,977,108.89
Accounts Payable 832,423,316.30 832,423,316.30
Other Payables 727,222,395.14 727,222,395.14
Non-current
liabilities due within 373,940,213.86 373,940,213.86
a year
Lease Liabilities 139,353,058.45 149,223,550.98 15,595,936.38 304,172,545.81
Total 3,264,583,035.47 139,353,058.45 149,223,550.98 15,595,936.38 3,568,755,581.28
Unit: yuan
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 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 223,426,826.45 223,426,826.45
within a year
Long-Term Loans 170,000,000.00 170,000,000.00
Lease Liabilities 152,725,191.59 160,706,193.96 332,663,417.84
Total 3,740,681,763.59 322,725,191.59 160,706,193.96 19,232,032.29 4,243,345,181.43
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.
234
2024 Semiannual Report
On June 30, 2024, 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 RMB 1,768,251.19. 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
in 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:
Unit: yuan
Closing Balance
Item USD EUR HKD Yen Mexican peso Ringgit Total
Foreign
currency
financial assets
Cash and cash
283,024,331.10 7,148,328.56 26,469,824.68 267,809.16 827,812.99 51,886.81 317,789,993.30
equivalents
Accounts
226,926,165.30 3,143,843.90 5,352,590.44 159.78 235,422,759.42
Receivable
Other
0.00 0.00 504,934.73 29,509.11 534,443.84
Receivables
Subtotal 509,950,496.40 10,292,172.46 32,327,349.85 267,968.94 857,322.10 51,886.81 553,747,196.56
Foreign
currency
financial
liabilities
Accounts
742,943.24 365,705.20 144,996.70 2,634,635.39 3,888,280.53
Payable
Other Payables 29,839,925.85 92,242.04 1,183,986.47 32,152.54 31,148,306.90
Subtotal 30,582,869.09 457,947.24 1,328,983.17 0.00 2,666,787.93 0.00 35,036,587.43
Net amount 479,367,627.31 9,834,225.22 30,998,366.68 267,968.94 -1,809,465.83 51,886.81 518,710,609.13
On June 30, 2024, with all other variables held constant, if RMB appreciates or depreciates by 5% against the above foreign currencies, the
Company will increase or decrease its net profit by RMB 25,935,530.46. 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.
235
2. Hedge
(1) The Company carries out hedging business for risk management
□ Applicable √ Not applicable
(2) The Company carries out qualified hedging business and applies hedging accounting
Unit: yuan
Cumulative fair value hedging
Book value related to Some sources of hedging The impact of hedge
adjustments of hedged items
Item hedged items and effectiveness and accounting on a company’s
included in recognized carrying
hedging instruments ineffectiveness financial statements
amounts
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
Transfer Nature of financial assets Amount of financial Basis for judgment on termination of
De-recognition
method transferred assets transferred confirmation
Retain substantially all of its risks and
Bill
Notes Receivable 9,781,329.43 Not terminated rewards, including default risks associated
endorsement
therewith
Bill Substantially all risks and rewards have been
Notes Receivable 69,732,163.99 De-recognition
endorsement transferred
Total 79,513,493.42
(2) Financial assets derecognized as a result of a transfer
√Applicable □ Not applicable
236
2024 Semiannual Report
Unit: yuan
Amount of financial assets Gains or losses related to
Item Methods of transferring financial assets
derecognized derecognition
Bill endorsement Notes Receivable 69,732,163.99
Total 69,732,163.99
(3) Asset transfer financial assets that continue to be involved
□ Applicable √ Not applicable
Other description
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 Measurement of fair
Total
value at first level value at second level value at third level
I. Continuous fair value measurement -- -- -- --
(I) Tradable Financial Assets 1,389,316,876.93 1,135,319,376.62 2,524,636,253.55
1. Financial assets measured at fair value
of which the changes are included in 1,389,316,876.93 1,135,319,376.62 2,524,636,253.55
current profit and loss
(3) Derivative Financial Assets 1,389,316,876.93
(4) Others 1,135,319,376.62 1,135,319,376.62
◆ Receivables financing 36,356,429.51 36,356,429.51
◆ Other non-current financial assets 70,000,000.00 70,000,000.00
Total assets continuously measured at
1,425,673,306.44 1,205,319,376.62 2,630,992,683.06
fair value
II. Non-continuous fair value
-- -- -- --
measurement
2. Continuous and Non-Continuous Measurement Items of Fair Value at First Level and Recognition Basis for Market Price
3. Continuous and Non-Continuous Measurement Items of Fair Value at Second Level, Qualitative and Quantitative Information
on Valuation Techniques Adopted and Important Parameters
4. Continuous and Non-Continuous Measurement Items of Fair Value at Third Level, Qualitative and Quantitative Information
on Valuation Techniques Adopted and Important Parameters
5. Continuous Measurement Items of Fair Value at Third Level, Adjustment Information between Opening and Closing Book
Value and Sensitivity Analysis of Unobservable Parameters
6. For Continuous Measurement Items of Fair Value, If There is a Conversion between Different Levels in the current period, the
Reasons for the Conversion and the Policies for Determining the Conversion Time Point
237
7. Valuation Technology Change and Reason of Change in the current period
8. Fair Value of Financial Assets and Financial Liabilities not Measured at Fair Value
9. Others
XIV. Related Parties and Connected Transactions
1. Parent Company of the Company
Shareholding
Voting right ratio of
Registration ratio of the parent
Parent company name Business nature Registered capital the parent company
place company in the
in the Company
Company
Cayman Equity investment and
Winner Group Limited HKD 1,143,000.00 69.12% 69.12%
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”.
3. Cooperative Enterprises and Joint Ventures
See the note 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
S Company Cooperative enterprise
Other description
238
2024 Semiannual Report
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
Shareholder of the Company
Partnership)
Xiamen Yutong Investment Partnership (Limited
Shareholder of the Company
Partnership)
Xiamen Huikang Investment Partnership (Limited
Shareholder of the Company
Partnership)
Shenzhen Capital Group Co., Ltd. Shareholder of the Company
Xiamen Zepeng Investment Partnership (Limited
Shareholder of the Company
Partnership)
Chengdu Winner Likang Medical Products Co., Ltd. Joint venture, with 49% equity hold by the Company
A company controlled by close family members of the Company’s key
Wuhan Zhuoling Packaging Co., Ltd.
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
Zhang Yan Supervisor
Liu Hua Employee 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)
A company in which Zheng Datian, Vice Chairman of Winner Medical
Lixian SHRCB Rural Bank Co., Ltd.
(Hunan), serves as a director
A company actually controlled by Wu Kangping, a shareholder of Longterm
Jingyi Biotechnology (Shanghai) Co., Ltd.
Medical
Shenzhen Nine Stars Printing and Packaging Group Co.,
A company controlled by the final controller of Winner Guilin before merge
Ltd.
Shenzhen Junhesheng Technology Co., Ltd. A company controlled by the actual controller of Junjian Medical before merge
239
Name of other related parties Relationship of other related parties with the Company
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
Controlling shareholder of Longterm Medical before merger and its current minority
Wu Kangping, Huang Lepei, Wu Di
shareholder
Controlling shareholder of Shanghai Hongsong before merger and its current
Cao Wensong, Zhang Yuqing
minority shareholder
Guilin Golden Eagle Latex Technology Co., Ltd. Minority shareholders of Guilin Latex, former shareholders of Jingzhou Latex
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
Connected transaction Amount incurred in Approved transaction Whether the transaction Amount incurred in
Related party
content the current period quota quota is exceeded previous period
Wuhan Zhuoling Purchasing goods or
9,682,134.02 No 11,212,057.11
Packaging Co., Ltd. services
Chengdu Winner
Purchasing goods or
Likang Medical 27,437.96 No 142,663.88
services
Products Co., Ltd.
Shenzhen Nine Stars
Printing and Purchasing goods or
436,641.99 No 1,078,762.59
Packaging Group Co., services
Ltd.
Shenzhen Zhengjun
Purchasing goods or
Medical Device Co., 0.00 No 32,035.36
services
Ltd.
Zhejiang Kanglidi
Purchasing goods or
Medical Supplies Co., 45,884.88 No 81,451.32
services
Ltd.
ZheJiang Longrising
Purchasing goods or
Medical New 81,773.40 No 196,530.97
services
Materials Co., Ltd.
ZheJiang Longmed
Purchasing goods or
Medical Technology -2,082.001* No 2,189.50
services
Co., Ltd.
Guilin Golden Eagle
Purchasing goods or
Latex Technology 2,033,435.71 No
services
Co., Ltd.
240
2024 Semiannual Report
Note: 1* The purchase of Zhejiang Longterm Medical Technology Co., Ltd. was negative because there was a return in the current period.
Sell of commodities/provision of labor service
Unit: yuan
Amount incurred in the current Amount incurred in
Related party Connected transaction content
period previous period
Chengdu Winner Likang Medical Products
Sell of goods or services 458,092.25 2,900,182.22
Co., Ltd.
ZheJiang Longmed Medical Technology
Sell of goods or services 307,413.91 75,658.29
Co., Ltd.
Zhejiang Kanglidi Medical Supplies Co.,
Sell of goods or services 2,799,497.68 4,828,476.21
Ltd.
Shenzhen Shengtianning Medical Device
Sell of goods or services 30,889.38 1,419,274.31
Co., Ltd.
Related transaction of purchases and sales of goods, provision and acceptance of services
(2) Associated fiduciary management/contracting and entrusted management/subcontracting
Entrusted management / contracting of the Company:
Unit: yuan
Name of Name of Fiduciary / Fiduciary income /
Entrusted / Fiduciary / Pricing basis of
entrusting entrusting contracting contracting income
contracting asset contracting fiduciary income /
party / party / termination recognized in the current
type start date contracting income
subcontractor contractor date period
Associated fiduciary / contracting
Entrusted management / subcontracting of the Company:
Unit: yuan
Name of Name of Entrusting / Fiduciary fee /
Entrusting / Entrusting / Pricing basis of
entrusting entrusting subcontracting subcontracting fee
subcontracting subcontracting fiduciary fee /
party / party / termination recognized in the current
asset type start date subcontracting fee
subcontractor contractor date period
Associated management / subcontracting
(3) Related-party lease
The Company as the lessor:
Unit: yuan
Lease income recognized in the Lease income recognized in
Name of lessee Type of leased assets
current period the previous period
ZheJiang Longmed Medical Technology
Plant 60,550.46
Co., Ltd.
Chengdu Winner Likang Medical Products
Plant 1,090,129.38
Co., Ltd.
241
The Company as the lessee:
Unit: yuan
Variable lease
Simplified processing of
payments that are not
short-term leases and Interest expenses
included in the Right-of-use assets
rental expenses of low- Rent paid incurred on lease
measurement of the increased
value asset leases (if liabilities
Type of lease liabilities (if
Name of applicable)
leased applicable)
lessor
assets Amount Amount Amount Amount Amount Amount Amount Amount
Amount Amount
incurred incurred incurred incurred incurred incurred incurred incurred
incurred in incurred in
in the in in the in in the in in the in
the 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
Guarantee maturity Whether the guarantee has
Secured party Amount guaranteed Guarantee start date
date been fulfilled
The Company as the secured party
Unit: yuan
Guarantee maturity Whether the guarantee has
Guarantor Amount guaranteed Guarantee start date
date been fulfilled
Related-party guarantee
(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 the current Amount incurred in previous
Related party Connected transaction content
period period
242
2024 Semiannual Report
(7) Key management personnel remuneration
Unit: yuan
Item Amount incurred in the current period Amount incurred in previous period
Key management personnel
4,930,973.93 5,193,963.22
remuneration
(8) Other connected transactions
6. Accounts Receivable and Payable By Related Parties
(1) Receivables
Unit: yuan
Balance at the beginning of the
Closing Balance
period
Project name Related party Provision for bad Provision for
Book balance Book balance
debt bad debt
Accounts Chengdu Winner Likang Medical Products
179,970.10 8,998.50 121,107.25 6,055.36
Receivable Co., Ltd.
Accounts
Jingyi Biotechnology (Shanghai) Co., Ltd. 0.00 0.00 651,786.67 362,599.47
Receivable
Accounts Zhejiang Kanglidi Medical Supplies Co.,
3,472,382.92 173,619.15 6,273,681.66 3,262,314.46
Receivable Ltd.
Accounts ZheJiang Longmed Medical Technology
210,705.70 10,535.29 44,264.20 22,132.10
Receivable Co., Ltd.
Other
Cao Wensong 2,431,586.61 121,579.33
Receivables
Other Chengdu Winner Likang Medical Products
581,249.80 29,062.49
Receivables Co., Ltd.
Advance to ZheJiang Longmed Medical Technology
0.00 62,934.14
supplier Co., Ltd.
Advance to
Winner Group Limited 516,504.00 516,504.00
supplier
Long-term Chengdu Winner Likang Medical Products
41,158,701.76 40,068,572.38
receivables (1*) Co., Ltd.
Note: 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. 8,461,659.91 763,921.27
Payable
Accounts
Chengdu Winner Likang Medical Products Co., Ltd. 14,176.10 11,682.12
Payable
Accounts Shenzhen Nine Stars Printing and Packaging Group Co.,
374,404.14
Payable Ltd.
Accounts
Shenzhen Shengtianning Medical Device Co., Ltd. 46,946.90 54,808.53
Payable
Accounts
Zhejiang Kanglidi Medical Supplies Co., Ltd. 83,441.97
Payable
243
Project name Related party Ending book balance Beginning book balance
Accounts
ZheJiang Longmed Medical Technology Co., Ltd. 53,157.52
Payable
Accounts
Guilin Golden Eagle Latex Technology Co., Ltd. 4,424,831.67 7,048,938.08
Payable
Other Payables Huang Jun 3,157,385.18
Other Payables Cao Wensong 568,310.09
Other Payables Guilin Golden Eagle Latex Technology Co., Ltd. 1,670,250.00
Contract
Shenzhen Shengtianning Medical Device Co., Ltd. 1,165.93 1,165.93
Liabilities
7. Related Party Commitment
8. Others
XV. Share-Based Payment
1. Overall Status of Share-Based Payment
□ Applicable √ Not applicable
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
Method for determining the fair value of equity instruments by reference to the stock closing price on the grant date without taking
on the grant date into account the liquidity discount.
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
Stock price, risk-free rate of return, historical volatility
equity instruments on the grant date
On each balance sheet date of the waiting period, the Company makes its best
Basis for the determination of the number of viable equity estimate based on the latest changes in the number of exercisable persons and
instruments the corresponding 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
94,545,105.83
payments recorded in capital reserves
Total amount of expenses recognized by equity-settled
2,908,958.42
share-based payments in the current period
244
2024 Semiannual Report
Other description
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 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 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 o f 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 management, 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 share holders, 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
Vesting period Vesting ratio
arrangement
First vesting From the first trading day of 17 months from the date of the first grant to the last trading day within
50%
period 29 months from the date of the first grant
Second vesting From the first trading day of 29 months from the date of the first grant to the last trading day within
50%
period 41 months from the date of the first grant
245
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.
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
Vesting period Vesting ratio
arrangement
First vesting From the first trading day of 12 months from the date of reserved granting to the last trading day
50%
period within 24 months from the date of reserved granting
Second vesting From the first trading day of 24 months from the date of reserved granting to the last trading day
50%
period within 36 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 revenue in 2021 ≥ 12 billion yuan, the ownership proportion at the Company level is 100%; in case of 10 billion
yuan ≤ the audited revenue 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 Board of Directors and the Fifth Meeting of the Third 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 Board of Directors and the Eighth Meeting of the Third 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.
In 2020, the cumulative amount of share-based payment settled by equity in the restricted stock incentive plan included in the capital reserve
was RMB 89,454,428.59.
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2024 Semiannual Report
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.
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.
2023 Employee Stock Ownership Plan: The cumulative amount of equity-settled share-based payment included in capital reserves is RMB
5,090,677.24, and the total expenses recognized for equity-settled share-based payment in this period are RMB 2,908,958.42.
3. Cash-Settled Share-Based Payments
□ Applicable √ Not applicable
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 2,908,958.42
Total 2,908,958.42
Other description
5. Modification and Termination of Share-Based Payment
None
6. Others
None
247
XVI. Commitment and Contingencies
1. Important Commitment Issues
Important commitments on balance sheet date
1. Important commitments on balance sheet date
(1) Large-scale outsourcing contracts that have been signed or are about to be performed and their financial implications
As of June 30, 2024, the outstanding large contracts between the Company or its subsidiaries signed and in the process of being performed or
to be performed are as follows:
Project name Amount (Yuan)
Project I 38,495,651.38
Project II 37,808,591.00
Project III 17,152,000.00
Project IV 16,250,000.00
Project V 9,000,000.00
Project V 8,316,000.00
Project VI 5,209,000.00
Project VII 5,200,000.00
Total 137,431,242.38
2. Contingencies
(1) Important contingencies on balance sheet date
The Company has no significant contingencies to be disclosed as of June 30, 2024.
(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
None
248
2024 Semiannual Report
XVII. Post-Balance Sheet Events
1. Important Non-Adjustment Items
Unit: yuan
Influence number of financial position and Reasons for influence number
Item Description
operating results cannot be estimated
2. Profit Distribution
3. Sales Return
4. Other Post-Balance Sheet Events
XVIII. Other Important Matters
1. Correction of Previous Accounting Errors
(1) Retrospective restatement
Unit: yuan
Content of accounting error Report item name of each affected comparison Cumulative influence
Processing procedures
correction period number
(2) Prospective application
Content of accounting error correction Approval procedures Reason for adopting prospective application
2. Debt Restructuring
3. Assets Replacement
(1) Exchange of non-monetary assets
(2) Other asset replacement
4. Pension Plan
5. Discontinued Operation
Unit: yuan
Profit from discontinued
Income Tax
Item Income Cost Total profit Net profit operations attributable to the
Expenses
owners of parent company
Other description
249
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
Healthy consumer Offset between
Item Medical consumables Unallocated Total
goods segments
Revenue 1,751,278,597.35 2,282,226,506.99 4,033,505,104.34
Cost of sale 1,084,618,155.94 983,852,286.64 2,068,470,442.58
Assets impairment
loss & credit 44,407,672.16 19,863,648.44 64,271,320.60
impairment loss
Depreciation
expense and
80,849,186.62 132,754,929.92 213,604,116.54
amortization
expense
Operating profit /
133,718,230.15 291,561,034.88 48,176,816.30 473,456,081.33
loss
Non-revenue and
-74,803.50 -74,803.50
expense
Assets and liabilities
Total assets 4,963,283,069.01 3,470,091,845.15 8,135,460,598.41 16,568,835,512.57
Total liabilities 1,164,119,747.27 1,465,087,917.16 1,908,585,106.35 4,537,792,770.78
(3) If the Company has no reporting segments, or cannot disclose the total assets and total liabilities of each reporting segment, the reasons
shall be explained.
(4) Other description
250
2024 Semiannual Report
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: RMB 400 million; 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. This type of treatment is also the
accounting treatment adopted in most of the similar cases of listed companies enquired so far.
251
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 (six original documents) 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
in asset disposal income
On July 26, 2024, the Company held the 23rd Meeting of the 3rd Board of Directors, and reviewed and approved the Proposal on Signing the
Supplementary Agreement on Relocation Compensation and Resettlement of Urban Renewal Units in Winner Industrial Park. According to
the supplementary agreement to be signed, the office property area and commercial property area obtained by the Company remain unchanged
(39,240 square meters for office property and 200 square meters for commercial property), while the residential property area and compensation
amount obtained by the Company are linked to the actual average transaction price of residential commercial housing obtained by Xingda
Company. On August 19, 2024, the Company and the partner have signed the aforementioned supplementary agreement. The project will be
restarted.
As of June 30, 2024, the Company received a total of RMB 250 million in cash. This includes a deposit of RMB 50 million received in April
2017, a prepaid relocation compensation of RMB 100 million received in February 2020, and another prepaid relocation compensation of RMB
100 million received in July 2023, as agreed upon in the relocation compensation and resettlement agreement.
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).
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2024 Semiannual Report
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 RMB 30 million to the Company as the performance bond.
In November 2019, International Arbitration Court of Ganjiang New District issued the Award ((2019) G.G.Z.Zi No.095), which confirmed
the termination of the original Investment Agreement, and the People’s Government of Zijin County shall bear the attorney fees, legal costs
and other expenses totaling RMB 2,655,320.00. The land transfer deposit of RMB 3 million shall be returned to the Company and compensate
for the economic loss of RMB 550 million. 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 June 30, 2024, the Company has received the land transfer deposit of RMB 3 million returned by the
People’s Government of Zijin County and paid the compensation of RMB 332.5 million. 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 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
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) 392,011,286.32 340,774,634.65
1~2 years 9,308,484.38 1,043,737.97
2~3 years 445,014.14 179,652.24
More than 3 years 2,368,338.71 2,318,934.33
3~4 years 107,304.75 57,900.37
4~5 years 0.00 118,509.20
More than 5 years 2,261,033.96 2,142,524.76
Total 404,133,123.55 344,316,959.19
253
(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 Accrui Accrui
Proporti ng Book value Proporti ng Book value
Amount Amount Amount Amount
on propor on proport
tion ion
Including:
Accounts
receivable of
100.00 100.00
provision for 404,133,123.55 18,588,843.64 4.60% 385,544,279.91 344,316,959.19 15,260,708.63 4.43% 329,056,250.56
% %
bad debt by
combination
Including:
Aging analysis
359,277,574.83 88.90% 18,588,843.64 5.17% 340,688,731.19 302,550,055.56 87.87% 15,260,708.63 5.04% 287,289,346.93
method
Other
44,855,548.72 11.10% 44,855,548.72 41,766,903.63 12.13% 41,766,903.63
combination
100.00 100.00
Total 404,133,123.55 18,588,843.64 4.60% 385,544,279.91 344,316,959.19 15,260,708.63 4.43% 329,056,250.56
% %
Category name of provision for bad debts by combination: aging combination
Unit: yuan
Closing Balance
Name
Book balance Provision for bad debt Accruing proportion
Within 1 year 349,416,771.56 17,470,838.58 5.00%
1~2 years 9,308,484.38 930,848.44 10.00%
2~3 years 445,014.14 133,504.24 30.00%
3~4 years 107,304.75 53,652.38 50.00%
Total 359,277,574.83 18,588,843.64
Description of the basis for determining the combination:
Category name of provision for bad debts by combination: other combination
Unit: yuan
Closing Balance
Name
Book balance Provision for bad debt Accruing proportion
Intra-group receivables 44,855,548.72 0.00 0.00%
Total 44,855,548.72 0.00
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2024 Semiannual Report
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 the current period:
Unit: yuan
Balance at the Amount of change in the current period
Class beginning of the Recovered or Closing Balance
period Accrual Write-off Others
reversed
Provision for bad debt
15,260,708.63 4,671,199.81 1,343,064.80 18,588,843.64
of accounts receivable
Total 15,260,708.63 4,671,199.81 1,343,064.80 18,588,843.64
Where the amount of bad debt provision recovered or reversed is important:
Unit: yuan
The rationale behind
determining the original
Unit name Amount recovered or reversed Reasons Recovery way
provision ratio 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
Whether the
Nature of accounts Reasons for write- Write-off procedures payments arise from
Unit name Amount written off
receivable off performed connected
transactions
Description of write-off accounts receivable:
255
(5) Accounts receivable with Top 5 ending balances by debtor
Unit: yuan
Ending balance of
Percentage of total bad debt provision
Closing balance of
Ending balance of Closing balance of closing balance of for accounts
Unit name accounts receivable
accounts receivable contract assets accounts receivable receivable and
and contract assets
and contract assets impairment provision
for contract assets
First 32,646,618.71 32,646,618.71 8.08% 1,632,330.94
Second 31,202,311.27 31,202,311.27 7.72% 1,560,115.56
Third 28,293,034.11 28,293,034.11 7.00% 1,414,651.71
Fourth 22,726,345.29 22,726,345.29 5.62%
Fifth 16,637,090.43 16,637,090.43 4.12% 831,854.52
Total 131,505,399.81 131,505,399.81 32.54% 5,438,952.73
2. Other Receivables
Unit: yuan
Item Closing Balance Balance at the beginning of the period
Other Receivables 116,045,259.43 116,040,893.47
Total 116,045,259.43 116,040,893.47
(1) Interest receivable
1) Classification of interest receivable
Unit: yuan
Item Closing Balance Balance at the beginning of
the period
2) Important overdue interest
Unit: yuan
Whether there is impairment
Borrower Closing Balance Overdue time Overdue reason
and its judgment basis
Other description:
3) Classified disclosure according to bad debt accrual method
□ Applicable √ Not applicable
256
2024 Semiannual Report
4) Provision, recovery or reversal of bad debt reserves in the current period
Unit: yuan
Amount of change in the current period
Balance at the
Class beginning of the Write Closing Balance
Recovered or
period Accrual off/verificati Other changes
reversed
on
Where the amount of bad debt provision recovered or reversed is important:
Unit: yuan
The rationale behind determining
Unit name Amount recovered or reversed Reasons Recovery way the original provision ratio 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
Whether the
Reasons for write- Write-off procedures payments arise from
Unit name Nature of payment Amount written off
off performed connected
transactions
Description of write-off:
Other description:
(2) Dividends receivable
1) Classification of dividends receivable
Unit: yuan
Project (or invested unit) Closing Balance Balance at the beginning of
the period
257
2) Important dividends receivable with the aging more than 1 year
Unit: yuan
Whether there is
Project (or invested unit) Closing Balance Aging Reason for non-recovery impairment and its
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
Balance at the Amount of change in the current period
Class beginning of the Recovered or Write Closing Balance
period Accrual Other changes
reversed off/verification
Where the amount of bad debt provision recovered or reversed is important:
Unit: yuan
The rationale behind determining
Unit name Amount recovered or reversed Reasons Recovery way the original provision ratio 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
Whether the
Reasons for write- Write-off procedures payments arise from
Unit name Nature of payment Amount written off
off performed connected
transactions
Description of write-off:
Other description:
258
2024 Semiannual Report
(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
220,155,320.00 220,155,320.00
of Winner Medical (Heyuan)
Margin and deposit 3,259,092.48 3,740,072.80
Employee pretty cash 442,102.20 558,778.18
Others 2,582,620.66 1,978,710.15
Total 226,439,135.34 226,432,881.13
2) Disclosure by aging
Unit: yuan
Aging Ending book balance Beginning book balance
Within 1 year (including 1 year) 3,512,597.64 3,533,854.33
1~2 years 40,502.90 28,992.00
2~3 years 419,599.00 2,714,714.80
More than 3 years 222,466,435.80 220,155,320.00
3~4 years 2,311,115.80
4~5 years 220,155,320.00 220,155,320.00
Total 226,439,135.34 226,432,881.13
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
Proporti Accruing Book value Accruing Book value
Amount Amount Amount Proportion Amount
on proportion proportion
Including:
Including:
259
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 Expected credit losses over Expected credit losses over Total
over the next 12 the entire duration (no credit the entire duration (credit
months impairment occurred) impairment has occurred)
Balance on January 1, 2024 110,391,987.66 110,391,987.66
Balance on January 1, 2024 in the
current period
Accrual in the current period 342,741.83 342,741.83
Reversal in the current period 340,853.58 340,853.58
Balance on June 30, 2024 110,393,875.91 110,393,875.91
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 the current period:
Unit: yuan
Amount of change in the current period
Balance at the
Class Recovered or Write Closing Balance
beginning of the period Accrual Others
reversed off/verification
Provision for
110,391,987.66 342,741.83 340,853.58 110,393,875.91
bad debt
Total 110,391,987.66 342,741.83 340,853.58 110,393,875.91
Where the amount of bad debt provision reversed or recovered is important:
Unit: yuan
The rationale behind determining
Unit name Amount recovered or reversed Reasons Recovery way the original provision ratio for
bad debts and its justification
260
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5) Other receivable actually written off at the current period
Unit: yuan
Item Amount written off
Write-off of important other receivables:
Unit: yuan
Whether the
Reasons for write- Write-off procedures payments arise from
Unit name Nature of other receivables Amount written off
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 receivable debt provision
Compensation for
investment and
First construction project 220,155,320.00 4-5 years 97.22% 110,077,660.00
of Winner Medical
(Heyuan)
Second Margin and deposit 2,311,115.80 3-4 years 1.02% 115,555.79
Third Margin and deposit 399,599.00 2-3 years 0.18% 19,979.95
Within 1 year, 1-2
Fourth Margin and deposit 370,000.00 0.16% 18,500.00
year(s)
Fifth Margin and deposit 130,028.00 Within 1 year 0.06% 6,501.40
Total Margin and deposit 223,366,062.80 98.64% 110,238,197.14
7) Recorded under other receivables due to centralized fund management
Unit: yuan
Other description:
261
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
4,041,503,753.14 4,086,994.48 4,037,416,758.66 3,612,018,476.28 4,086,994.48 3,607,931,481.80
subsidiaries
Investment in
associated
20,492,230.33 20,492,230.33 20,377,034.07 20,377,034.07
enterprises and
joint enterprises
Total 4,061,995,983.47 4,086,994.48 4,057,908,988.99 3,632,395,510.35 4,086,994.48 3,628,308,515.87
(1) Investment in subsidiaries
Unit: yuan
Increase or decrease in the current period
Opening balance Provision Ending balance of
Beginning balance Capital Ending balance (book
Invested unit of provision for for impairment
(book value) Further investment reducti Others value)
impairment impairme provision
on
nt
Winner
Medical 267,491,627.79 267,491,627.79
(Huanggang)
Winner
Medical 27,242,761.31 27,242,761.31
(Jingmen)
Shenzhen
131,058,457.65 1,411,276.86 132,469,734.51
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
Zhejiang
727,540,000.00 727,540,000.00
Longterm
Guilin Latex 500,000,000.00 500,000,000.00
Winner
Medical 751,921,500.00 751,921,500.00
(Hunan)
Junjian
192,000,000.00 192,000,000.00
Medical
Shanghai
30,000,000.00 30,000,000.00
Hongsong
Pan-China
860,840.00 428,074,000.00 428,934,840.00
(H.K.)
Total 3,607,931,481.80 4,086,994.48 428,074,000.00 1,411,276.86 4,037,416,758.66 4,086,994.48
262
2024 Semiannual Report
(2) Investment in associated enterprises and joint enterprises
Unit: yuan
Openi Increase or decrease in the current period
Endin
ng
g
balanc Investment Adjust Declared
Provi balanc
Beginning e of Furthe Capit gains and ment of Chan payment
Invested sion Ending balance e of
balance (book provis r al losses other ges in of cash Other
entity for (book value) impair
value) ion invest reduc recognized by compre other dividend s
impai ment
for ment tion the equity hensive equity s or
rment provis
impair method income profits ion
ment
I. Joint
ventures
II. Cooperativ
e enterprise
Chengdu
Winner
Likang
20,377,034.07 115,196.26 20,492,230.33
Medical
Products Co.,
Ltd.
Subtotal 20,377,034.07 115,196.26 20,492,230.33
Total 20,377,034.07 115,196.26 20,492,230.33
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
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
(3) Other description
4. Revenue and Cost
Unit: yuan
Amount incurred in the current period Amount incurred in previous period
Item
Income Cost Income Cost
Main business 1,108,269,598.31 842,869,692.65 1,649,626,729.34 1,102,744,068.83
Other businesses 34,615,567.06 1,013,798.51 39,358,109.10 4,490,396.82
Total 1,142,885,165.37 843,883,491.16 1,688,984,838.44 1,107,234,465.65
263
Breakdown of operating revenues and cost of sale:
Unit: yuan
Segment 1 Segment 2 Total
Contract classification Cost of Cost of Cost of Cost of
Revenue Revenue Revenue Revenue
sale sale sale sale
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:
The nature of the
Amounts borne by the Types of quality
Time to fulfill goods the Is he the main
Important Company that are assurance provided by
Item performance Company responsible
payment terms expected to be the Company and
obligations promises to person?
refunded to customers related obligations
transfer
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 RMB 0.00, of which RMB 0.00 is expected to be recognized as revenue in year 0, RMB 0.00 is expected to be recognized as revenue
in year 0, and RMB 0.00 is expected to be recognized as revenue in year 0.
264
2024 Semiannual Report
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
Amount incurred in the current Amount incurred in previous
Item
period period
Long-term equity investment gains measured by employing the equity
115,196.26 1,580,818.74
method
Investment income from purchasing financial products 38,973,085.80 31,943,539.75
Total 39,088,282.06 33,524,358.49
6. Others
XX. Further Information
1. Statement of Current Non-Recurring Gain and LOSS
√Applicable □ Not applicable
Unit: yuan
Item Amount Description
Profit and loss on disposal of non-current assets -2,531,199.34
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 the 16,329,769.68
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 to 48,692,022.79
the Company’s regular business operations
Income and expenditure other than those mentioned above 4,384,196.12
Less: Amount affected by income tax 10,326,267.54
Amount of minority shareholders’ equity affected (after tax) -686,742.68
Total 57,235,264.39 --
265
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
2. Return on Net Assets and Earnings Per Share
Weighted average return on Earnings Per Share
Reporting profit
net assets Basic EPS (yuan/share) Diluted EPS (yuan/share)
Net profit attributable to common
3.31% 0.6568 0.6568
shareholders of the Company
Net profit attributable to common
shareholders of the Company after
2.81% 0.5589 0.5589
deduction of non-recurring profits and
losses
3. 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
4. Others
266
