Full Text of 2022 Semi-annual Report of Winner Medical Co., Ltd.
Winner Medical Co., Ltd. Stock code: 300888
2022 Semiannual Report
[Disclosure time]
Winner Medical Co., Ltd.
Semi-annual Report
Caring for health and life, making a better world
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Full Text of 2022 Semi-annual Report of Winner Medical Co., Ltd.
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 authentric, 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 accounting head, and
Wu Kezhen, 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 personally attended the board meeting for reviewing
this report.
The forward-looking contents in this report, such as the future development
strategy and performance planning, are the goals sets by the Company, which are
planned matters. The achievement of the goals depends on many factors,
including market change, which is uncertain. So these contents are not the
company's profit forecast for the next year and do not constitute a substantial
commitment of the Company to investors and related parties. Investors and
related parties should be fully aware of related risks and understand the
differences among plans, forecasts, and commitments. Investors are asked to
beware of investment risks!
The Company does not plan to distribute cash dividends, issue bonus share, or
increase the share capital from reserves.
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Table of Contents
Section I Important Notes, Contents, and Definitions ............................................................. 2
Section II Company Profile and Major Financial Indicators ................................................. 7
Section III Management Discussion and Analysis ................................................................. 10
Section IV Corporate governance ........................................................................................... 51
Section V Environment and Social Responsibility ................................................................. 53
Section VI Important Matters ................................................................................................. 60
Section VII Changes in Shares and Shareholders.................................................................. 66
Section VIII Preferred Shares ................................................................................................. 72
Section IX Information Related to Bonds ............................................................................... 73
Section X Financial Report ...................................................................................................... 74
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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
Beijing Sequoia Xinyuan Equity Investment Center (L.P.), a shareholder of
Sequoia Xinyuan Refers to
the Company before the initial public offering
Xiamen Leyuan Investment Partnership (L.P.), a shareholder of the
Xiamen Leyuan Refers to
Company before the initial public offering
Xiamen Yutong Investment Partnership (L.P.), a shareholder of the
Xiamen Yutong Refers to
Company before the initial public offering
Shenzhen Capital Group Co., Ltd., a shareholder of the Company before the
SCGC Refers to
initial public offering
Xiamen Huikang Investment Partnership (L.P.), a shareholder of the
Xiamen Huikang Refers to
Company before the initial public offering
Xiamen Zepeng Investment Partnership (L.P.), a shareholder of the
Xiamen Zepeng Refers to
Company before the initial public offering
Winner Medical Winner Medical (Chongyang) Co., Ltd., a wholly-owned subsidiary of the
Refers to
(Chongyang) Company
Winner Medical (Jiayu) Co., Ltd., a wholly-owned subsidiary of the
Winner Medical (Jiayu) Refers to
Company
Winner Medical (Jingmen) Co., Ltd., a wholly-owned subsidiary of the
Winner Medical (Jingmen) Refers to
Company
Yichang Winner Medical Textile Co., Ltd., a wholly-owned subsidiary of
Winner Medical (Yichang) Refers to
the Company
Winner Medical Winner Medical (Huanggang) Co., Ltd., a wholly-owned subsidiary of the
Refers to
(Huanggang) Company
Winner Medical (Tianmen) Co., Ltd., a wholly-owned subsidiary of the
Winner Medical (Tianmen) Refers to
Company
Shenzhen Purcotton Technology Co., Ltd., a wholly-owned subsidiary of the
Shenzhen Purcotton Refers to
Company
Guangzhou Purcotton Medical Technology Co., Ltd., a wholly-owned
Guangzhou Purcotton Refers to
subsidiary of Shenzhen Purcotton
Beijing Purcotton Technology Co., Ltd., a wholly-owned subsidiary of
Beijing Purcotton Refers to
Shenzhen Purcotton
Shanghai Purcotton Technology Co., Ltd., a wholly-owned subsidiary of
Shanghai Purcotton Refers to
Shenzhen Purcotton
Shenzhen Qianhai Purcotton E-Commerce Co., Ltd., a wholly-owned
Qianhai Purcotton Refers to
subsidiary of Shenzhen Purcotton
Shenzhen Purunderwear Sci-Tech Innovation Co., Ltd., a wholly-owned
Purunderwear Refers to
subsidiary of Shenzhen Purcotton
Winner (Huanggang) Cotton Processing & Trading Co., Ltd., a wholly-
Winner (Huanggang) Cotton Refers to
owned subsidiary of Winner Medical (Huanggang)
Huanggang Purcotton Technology Co., Ltd., a wholly-owned subsidiary of
Huanggang Purcotton Refers to
Purcotton
Winner Medical Malaysia Sdn. Bhd., a subsidiary controlled by the
Winner Medical Malaysia Refers to
Company
Winner Medical (Hong
Refers to Winner Medical (Hong Kong) Ltd., a subsidiary controlled by the Company
Kong)
Winner Medical (Heyuan) Co., Ltd., a wholly-owned subsidiary of the
Winner Medical (Heyuan) Refers to
Company
Winner Medical (Wuhan) Refers to Winner Medical (Wuhan) Co., Ltd., a wholly-owned subsidiary of the
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Company
Shenzhen PureH2B Technology Co., Ltd., a wholly-owned subsidiary of the
PureH2B Refers to
Company
Chengdu Wenjian Likang Medical Products Co., Ltd., a wholly-owned
Chengdu Wenjian Likang Refers to
subsidiary of the Company
Galaxy Real Estate Refers to Shenzhen Galaxy Real Estate Development Co., Ltd.
Reporting period Refers to January 01, 2022 to June 30, 2022
Zhejiang Longterm Medical Technology Co., Ltd., an enterprise with 55%
Longterm Medical Refers to
equity acquired by the Company
Winner Pingan Medical (Hunan) Co., Ltd., formerly known as Hunan
Pingan Medical Device Refers to Pingan Medical Device Technology Co., Ltd., an enterprise with 68.70%
equity acquired by the Company
Winner (Guilin) Latex Products Co., Ltd., formerly known as "Guilin Zizhu
Guilin Latex Refers to Latex Products Co., Ltd.", an enterprise with 100.00% equity acquired by
the Company
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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
Winner Medical
company (if any)
Company name in foreign
Winner Medical Co., Ltd.
language (if any)
Company short name in foreign
Winner Medical
language (if any)
Legal representative of the
Li Jianquan
company
II. Contact Person and Contact Information
Secretary to the board of directors Securities affairs representative
Name Chen Huixuan Liu Yanxiang, Zhang Heng
F42, Building 2, Huilong Business Center, F42, Building 2, Huilong Business Center,
Shenzhen North Railway Station Area, Shenzhen North Railway Station Area,
Contact address
Minzhi Subdistrict, Longhua District, Minzhi Subdistrict, Longhua District,
Shenzhen Shenzhen
Tel 0755-28066858 0755-28066858
Fax 0755-28134688 0755-28134688
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 2021 annual 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 newspapers selected by the Company for information disclosure, the websites designated by the China Securities Regulatory
Commission (CSRC) 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 2021 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 2021 Annual Report for details.
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
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Increase/decrease in this
reporting period compared with
Current reporting period Same period last year
the same period of the previous
year
Operating income (yuan) 5,157,944,495.72Note1 4,059,865,654.92 27.05%
Net profits attributable to
shareholders of listed 892,823,503.14 761,038,730.24 17.32%
companies (yuan)
Net profits attributable to
shareholders of the listed
company after deduction of 820,558,767.23 627,255,609.19 30.82%
non-recurring profits and losses
(yuan)
Net cash flow from operating
801,150,899.38 197,604,865.77 305.43%Note2
activities (yuan)
Basic EPS (yuan/share) 2.1193 1.7844 18.77%
Diluted EPS (yuan/share) 2.1193 1.7715 19.63%
Weighted average return on net
8.17% 7.06% 1.11%
assets
Increase/decrease at the end of
End of the reporting period End of the previous year the reporting period compared
to the end of the previous year
Total assets (yuan) 15,522,494,964.51 13,266,610,200.37 17.00%
Net assets attributable to
shareholders of listed 10,991,151,831.97 10,674,912,166.80 2.96%
companies (yuan)
Note 1: The income in the reporting period includes the consolidated operating income of Longterm Medical from May to June, which
is the newly acquired business of RMB 86,191,200 and the purchase date of Longterm Medical is April 30, 2022;
Note 2: During the reporting period, the net cash flow from operating activities increased by 305.43% compared with last year, which
was mainly due to the fact that: (1) in 2020, the Company applied a credit policy of 100% advance payment for the protective products,
and in the first half of 2021, the Company's credit policy for protective products has returned to the normal level; (2) the good
performance in 2020 has resulted in more taxes and fees paid after the final settlement in the first half of 2021.
V. Differences in Accounting Data under Domestic and Foreign Accounting Standards
1. Differences between net profits and net assets in financial statements disclosed according to the
International Accounting Standards (IAS) and Chinese Accounting Standards simultaneously
□ Applicable Not applicable
No difference between net profits and net assets in financial statements disclosed according to the International Accounting
Standards (IAS) and Chinese Accounting Standards during the reporting period.
2. Difference between net profits and net assets in financial statements disclosed according to the Foreign
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.
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 of the provision for asset （2,401,700.24）
impairment)
Government subsidies included into current profits and
losses, except the government subsidies which are closely
28,755,938.72
related to the normal business operations of the Company
and conform to the national policies and regulations, and
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continuously granted in accordance with a certain standard
quota or amount.
In addition to the effective hedging business related to the
Company's normal business operations, the profit and loss
from fair value changes arising from holding trading
financial assets and trading financial liabilities, as well as 64,226,078.84
the investment income from disposal of trading financial
assets, trading financial liabilities and available-for-sale
financial assets
Income and expenditure other than those mentioned above （4,634,764.37）
Less: Amount affected by income tax 13,612,940.25
Amount of minority shareholders' equity affected
67,876.79
(after tax)
Total 72,264,735.91
Other profit and loss items that are consistent with the definition of non-recurring profit and loss:
□ Applicable Not applicable
There was no other profit and loss items that are consistent with the definition of non-recurring profit and loss.
Explanation on defining the non-recurring profit and loss items enumerated in the Interpretative Announcement No. 1 on Information
Disclosure of Public Securities Issuing Companies - Non-recurring Profits and Losses as recurring profit and loss items
□ Applicable Not applicable
There was no circumstance in which non-recurring profit and loss items enumerated in the Interpretative Announcement No. 1 on
Information Disclosure of Public Securities Issuing Companies - Non-recurring Profits and Losses are defined as non-recurring
profit and loss items.
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Section III Management Discussion and Analysis
I. Main Business of the Company during Reporting Period
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.
(I) Main Business of the Company during Reporting Period
Winner Medical is a health enterprise developing both medical and consumption products under its three brands of "Winner",
"Purcotton" and "PureH2B". Specifically, the Company has been adhering to the core business principle of "Quality before profit,
brand before speed, social value before corporate value". Through continuous innovation and expansion of industrial boundaries, the
Company has developed from a single manufacturer of medical consumables into a large medical health enterprise covering wound
care, infection prevention, personal care, home care, maternal and child care, home textile and clothing and other fields.
Wound care
Medical Infection protection
Disinfection and
cleaning
Winner
Non-woven consumer
Cotton tissues, sanitary pads, wet tissues
goods
Textile consumer goods Baby supplies, baby clothing, adult clothing
Consumables
Beauty products and
perfumes
Health & personal care
Home sports
1. Medical consumables section
Winner Medical is a benchmarking enterprise in the domestic medical consumables industry. Its main product lines cover wound care,
infection prevention and disinfection and cleaning. The specific products include high-end wound dressing products, traditional wound
care and dressing products, infection control products in operating room, protective products and disinfection and cleaning products
for body surface cleaning.
The Company is one of the earliest medical consumables enterprises in China to establish a full industrial chain covering cotton
procurement, R&D, production and direct export. The Company's products have been certified by the EU CE certification, the US FDA
certification and the Japanese Ministry of Health, Labour and Welfare certification, and exported to Europe, America, Japan and other
countries. In 2005, "Winner" brand entered the domestic hospital and drugstore market. With its excellent product quality and service,
Winner Medical gradually established a good brand and reputation in domestic hospitals and drugstores. Since the outbreak of COVID-
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19 in 2020, the "Winner" brand prevention products have entered the hospital and the civilian market. Thanks to the public commitment
not to increase prices and the quality of its products, it has won the unanimous praise at home and abroad, from government units and
the public, and the brand reputation and popularity have been greatly improved.
In terms of products, Winner Medical focuses on market demand, is close to clinical and terminal, is driven by R&D and innovation,
and constantly improves product layout. Its business scope extends from sales of single wound care products such as cotton gauze to
sales of comprehensive solutions of wound care, infection prevention, disinfection and cleaning. Disposable operating room
consumables can more effectively reduce nosocomial infection than reusable medical products. With more attention of the state and
hospitals to nosocomial infection and residents' attention to personal health environment, disposable operating room consumables are
gradually accepted by the domestic market. Winner Medical's medical dressing product line has been expanded from traditional
dressing products mainly focusing on gauze products to high-end wound dressing products, such as silica gel foam dressing,
hydrocolloid dressing, super absorbent pad, negative pressure drainage products, etc., which are mainly applied to chronic wound
healing scenes such as diabetes, large-area burns and wounds. The Company's technical level in the field of high-end wound dressings
has been in the forefront of the industry, and is expected to become the core products for the development of Winner Medical.
2. Healthy Consumer Goods Section
Purcotton is a healthy life brand with "Medical background, Purcotton philosophy, Quality in our DNA" as its core competitiveness,
which starts with pure cotton spunlace non-woven fabric and takes "medicine close to life, Purcotton care for health" as its brand
proposition. Its products include pure cotton tissue, sanitary pads with pure cotton surface, pure cotton wet tissues and other non-woven
consumer goods, as well as baby supplies, baby clothing, baby products, adult clothing and other textile consumer goods. Purcotton
advocates the life concept of "comfort, health, environmental protection", replacing chemical fiber with cotton and keeping away from
chemical stimulation. It provides overall solutions for different life scenes, having a good user reputation and formed a fully
differentiated brand image in the field of consumer goods with strong brand appeal.
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In terms of products, with excellent quality control ability and technology research and development ability, the Company continues
to introduce medical grade quality consumer goods. Cotton is the main raw material of core products of Purcotton, which adopts global
high-quality cotton to control product quality and safety from the source. According to the high standard of medical consumables, all
kinds of pollution sources are strictly controlled in the production process. Disposable underwear, newborn baby clothes and other
close-fitting clothing are packaged with medical grade sterilization to further ensure the safety and environmental protection of the
products. Purcotton products cover multiple consumer groups, such as mothers and infants, children and adults, and span multiple
product lines, such as high-end cotton wipes, female care, baby care, adult clothing, home textile products, etc.
In July 2019, the Company launched the "PureH2B" brand, aiming to build a one-stop retail platform covering beauty makeup, personal
care, sports and other healthy and beautiful life needs. "PureH2B" has sold products through offline stores, online official website and
Wechat mini programs, and its business is still at the initial stage.
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(II) Main Products and Purposes
Its health product system covers: wound care products, infection prevention products, disinfection & cleaning products under its
medical consumables section; the non-woven consumer goods and textile consumer goods under its healthy consumer goods section;
and pure cotton spunlace non-woven fabric, an industry intermediate product.
The main categories and images of some products under the Company's medical consumables section are as follows:
Product
Product Category Main Purpose Product Image of Some Products
Class
For absorbing wound exudate, Gauze sheets, non-woven
Traditional wound
dressing wounds, and sports sheets, gauze bandage,
care products
protection dressing change kits, etc.
Wound
care
products
For creating a moisture balance
at the wound interface to
Advanced wound optimize its benefits for wound Silicone dressings,
care products healing, reduce the frequency of alginate dressings, etc.
dressing replacement, and reduce
secondary damage
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OR infection For preventing infections in the Surgical packs, surgical
control products operating room gowns, etc.
Infection
prevention
products
Masks, protective
Disease prevention For occupational protection of
clothing, isolation gowns,
and control medical staff and patient
gloves, foot straps, hats,
products isolation
etc.
Disinfecti Cotton swabs, cotton
on & Disinfection & For wound cleaning and pads, cotton balls,
cleaning cleaning products disinfection, and daily cleaning alcohol cotton pads,
products disinfectant, etc.
As the important guarantee for medical staff's occupational protection and patient isolation protection, disease protection and control
products such as masks and protective clothing play an indispensable role in coping with major health incidents and improving public
health. The main categories and images of some products under the company's healthy consumer goods section are as follows:
Class Product Category Product Image of Some Products
Cotton tissues
Non- Wet wipes
woven
consumer
goods
Sanitary pads
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Other non-woven Cotton swabs, makeup cotton pads, disposable underwear,
consumer goods etc.
Baby supplies Baby's bath towels, handkerchiefs, and quilts, etc.
Baby's leisure wear, outing costume, underwear, footwear,
Baby clothing
etc.
Textile
consumer
goods
Adult's leisure wear, outing costume, underwear, footwear,
Adult clothing
etc.
Other textile
Bedding, bathroom accessories, etc.
consumer goods
The purposes and images of the Company's pure cotton spunlace nonwoven fabric are as follow:
Class Main Purpose Image
Cotton spun
With 100% quality cotton as raw materials, the fabric is made with the pure cotton
lace non-
spunlace non-woven fabric technology. It can be used in fields such as personal
woven
care, home care, medical equipment, and industrial wipes.
fabric
(III) Main Operating Modes
1. Procurement mode
The Company has established a complete procurement management system, which mainly includes the Procurement Control Process,
Procurement Price Management Process, New Supplier Selection and Review Control Process, Supplier Performance Appraisal
Management Process, and the Company also has made a Qualified Supplier Directory. According to the Company's regulations,
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purchase applications shall be submitted by requiring departments based on customer orders, sales plans, and production plans. The
purchasing department shall strictly follow the purchasing management regulations after analyzing the purchasing requirements and
the raw material market. The procurement of key bulk raw materials (such as cotton and cotton yar) is implemented in a unified manner
according to the Company's rules on its strategic procurement. The Company implements a strict supplier management system to ensure
product quality and stable product supply. The Company has set a supplier directory and a perfect update and elimination mechanism
to dynamically manage existing suppliers and new suppliers, which enables the Company to preferentially cooperate with the suppliers
with the highest assessment results. For new suppliers, the Company has made strict selection criteria and supplier development and
process management systems, including on-site inspection on suppliers; for suppliers with poor or even unqualified annual performance,
the Company will add them to the key watch list or eliminate them. Generally, the Company will sign an annual framework agreement
with a supplier to specify the cooperation content and the annual cooperation arrangement, and specific procurement contracts will be
signed separately.
2. Production mode
The Company formulates production plans according to customers' POs and requirements, its annual sales plans, and monthly rolling
sales plans. Based on its own production capacity and demand fluctuations, the Company adopts the production strategies of Make to
Order (MTO) and Made to Stock (MTS).
3. Sales mode
The Company sells products through multiple channels. The main sales channels are shown in the following figure:
Online channels Third-party B2C platforms, such as Tmall, JD.com and Amazon
Medical Winner's own brand at hospitals
consumables
Domestic sales
Winner's own brand at OTC drugstores
Offline channels
Winner's own brand sales
Overseas sales
OEM mode
Winner
Official website and Wechat mini programs of
Purcotton, etc.
Online channels E-commerce platforms Self-operated flagship stores at Tmall and JD.com
Warehousing by e-commerce platforms, such as
JingDong self-run stores and Tmall Supermarket
Healthy consumer
goods
Directly operated and franchised chain stores
Offline channels Real stores Supermarkets, convenience stores and beauty stores
Bulk purchase by key accounts or customization
business
4. Marketing mode
The Company is developing its products under the Winner, Purcotton, and PureH2B brands a coordinated way. With more than 30
years of experience in the production of medical supplies, Winner is a leading medical consumables brand in the Chinese market and
with a global vision. With "caring for health and life, making a better world" as its vision and industry-leading product quality as the
cornerstone of its brand value, the product marketing and promotion for the brand rely more on its brand reputation. With pure cotton
products as its label, Purcotton ad opts unique, differentiated strategies to build its brand. By integrating multiple promotion channels
such as directly-operated stores, brand roadshows, celebrity endorsements, event sponsorship, new media, and advertising, Purcotton
keeps conveying to consumers its proposition of "medicine close to life, Purcotton care for health" and its vision of "changing the
world with pure cotton", which helps deepen the meaning of Purcotton brand and increase its brand awareness and loyalty. PureH2B
offers consumers selected products that are high-quality, healthy, and beautiful from around the world through its paid membership
system. It offers its members products with extremely competitive prices and a series of excellent offline services such as beauty salons,
free makeup, and seminars. With "Love, protect and enjoy nature" as its brand vision, and "Influence the mainstream consumption
attitude with the philosophy of 'inner health brings outer beauty', and attract mainstream consumers with natural products" as its mission,
PureH2B is bringing consumers a new all-round digital retail experience.
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(IV) Main Driving Factors of Performance
1. Medical consumables industry and consumer goods industry will keep growing rapidly
As the global demand for healthcare of aging population increases, resident income continues to grow, and medical and healthcare
improve, the global medical consumables market is showing a steady growth trend. The COVID-19 pandemic has made global
consumers pay more attention to health and personal protection. In China, especially, most families choose to wear masks when they
take public transport and are in public places, so the demand for masks is expected to increase significantly compared with that before
the COVID-19 pandemic. After the COVID-19 pandemic outbreak, as the government, medical workers, and consumers in China pay
greater attention to protection and quality, the use rate of disposable medical consumables and disposable surgical packs will get higher;
on the other hand, as the Chinese government attaches importance to the medical consumables industry, the supervision over the
industry are continuously strengthened while the reserves of medical consumables are increasing. Therefore, companies that do not
comply with laws and regulations will surely be eliminated. In addition, China's medical dressings are changing from traditional
dressings to high-end wound dressings, and it is expected to replace imported dressings by domestic dressings step by step. The medical
consumables market in China is growing rapidly, creating a good external environment for enterprise development.
In recent years, the total retail sales of consumer goods in China has been rising steadily, showing an obvious trend of consumption
upgrading. Consumers' demand for green, healthy, and environmentally friendly products is increasing, bringing good opportunities in
the consumer goods industry.
2. High-quality products and precise brand positioning enhance brand value
The Company is one of the earliest medical consumables enterprises in China to establish a full industrial chain covering cotton
procurement, R&D, production, and direct export. The Company is one of the early companies that established a medical-grade quality
management system in the industry, and has passed the ISO13485 Medical Devices Quality Management System Certification. Its
product quality complies with the European, American, Japanese, and Chinese standards. Winner Medical enjoys a high brand
reputation and recognition. In 2020, Winner Medical was praised by the Joint Prevention and Control Mechanism of the State Council
as a well-deserved "ordnance factory" in fighting the pandemic. Its wholly-owned subsidiary Winner Medical (Huanggang) was
awarded the title of "National Advanced Unit for Fighting the COVID-19 Pandemic" by the CPC Central Committee and the State
Council. It is also the only enterprise awarded the title in Hubei Province. In May 2021, Winner Medical was selected by the Federation
of Shenzhen Industries as the "Benchmarking Enterprise in China's Medical Consumables Sector" and at the same time recognized as
an "International Renowned Brand" by the United Nations Industrial Development Organization. In December 2021, "pure cotton
spunlace non-woven fabrics and its products" of Winner Medical was awarded as the national single champion of manufacturing
industry. In 2022, the epidemic prevention department of the Company was successively awarded the title of "Worker Pioneer" by All
China Federation of Trade Unions and Shenzhen Federation of Trade Unions.
Purcotton is committed to fulfilling consumers' upgrading demand for high-quality products which are "comfortable, healthy, and
environmentally friendly". With constantly winning recognition from consumers since its launch in 2009, Purcotton has rapidly grown
into a leading brand of maternal and child products on e-commerce platform, and has a high market share in the field of consumer
products. In October 2019, Purcotton won the reputation of "70 Brand of the 70th Anniversary of the Founding of New China"
sponsored by CCTV. In January 2021, Purcotton was honored as one of the "Shenzhen Top Brands" by Federation of Shenzhen
Industries. In April 2021, Purcotton was included into the list of the second "Shenzhen Top 100 Brands" announced by Shenzhen
Quality City Promotion Association.
In conclusion, with high brand value, the Winner Medical and Purcotton brands will help the Company enhance customer loyalty,
stabilize product prices, and expand its market share in the competitive market, thereby ensuring its sustainable and stable profitability.
II. Analysis of Core Competitiveness
1. Advantages of business philosophy and corporate culture
With offering quality products as its mission, the Winner Medical brand aims to lead in the medical dressing industry, to grow from a
small Chinese enterprise offering lower-price products to a large international enterprise offering high-quality products recognized by
developed countries, bringing Chinese medical dressings to the international stage. With "caring for health and life, making a better
world" as its vision, the brand keeps focusing on product quantity and innovations, and making its way into the medical consumables
and high-end medical dressing market. Cotton fiber has ten prominent advantages, including natural, safe, comfortable, naturally
degradable, high output ratio, drought-resistant, salt and alkali-resistant, environmentally friendly, time-honored, as well as great
economic and social value. With its corporate vision of "changing the world with pure cotton", Purcotton advocates a lifestyle with
pure cotton by applying "comfortable, healthy, and environmentally friendly" in all aspects of daily life, to help customers raise life
quality, and deliver the brand concept of "reassurance, happiness and sustainability" to consumers. Sticking to the "cotton fiber only"
principle in its operation, Purcotton aims to develop recyclable and renewable resources, gradually replace chemical fibers with natural
fibers, and give full play to the use value and environmental protection value of cotton fibers, following the path of low carbon,
environmental friendly and sustainable development. With "love nature, protect nature, enjoy nature" as its brand vision, PureH2B
insists on the principle of pursuing beauty without sacrificing health for health is beauty. PureH2B select natural cosmetics and toiletries,
healthy food and health products, 3C and health equipment with excellent experience from around the world for customers. Meanwhile,
the groundbreaking, innovative natural products developed independently by PureH2B are winning the trust of consumers with their
applicability and safety, meeting the needs of consumers who pursue both quality life and health and environmental protection. The
visions and business philosophies regarding the company's three brands are focused on human health, environmental protection, and
improving the quality of life, which are in line with humans' sustainable development strategy.
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The Company will always uphold its core operating principle of "prioritizing quality over profit, brand over speed, and social
responsibility over corporate value", and stick by its core values of "others first, responsibility, unity and cooperation, hard work, self-
criticism, and sustainable development". The Company promotes healthy sports such as running, mountain climbing, and ball games.
The Company is weakening the power from titles to reduce bureaucracy, and creating open workplaces to ensure efficient cross-
department communication. During the epidemic, the Company responded quickly and made every effort to ensure the production of
protective products. It carried out a series of activities to improve the rapid response capability to market demand in terms of decision-
making management, process integration, product and equipment innovation, and industry chain integration. Within one month at the
beginning of the epidemic outbreak in January 2020, the Company provided 108.9 million masks and 114,000 pieces of protective
clothing to major hospitals in Hubei, showing the Company's efficient internal coordination capability.
2. Advantages of R&D and innovation
The Company independently developed the pure cotton spunlace non-woven technology in 2005, and has built a complete technology
cluster based on the technology, obtaining patent licenses in more than 30 countries and regions including the United States, Europe,
and Japan. The silica gel foam dressing and foam dressings successfully developed and launched by the Company have been awarded
with China's registration certificate for Class II and Class III medical devices respectively. This kind of high-end wet wound dressing
is specially designed for the vulnerable skin of the elderly with chronic diseases, facilitates the observation of wound healing by medical
staff, and also provides patients with a cost-effective solution for chronic wound treatment, effectively solving the clinical pain points
such as the adhesion of traditional gauze dressings to wounds and frequent dressing changes. The innovative application of pure cotton
spunlace non-woven fabrics in infection prevention products, such as protective clothing, surgical gowns, and isolation gowns, has not
only alleviated the shortage of raw materials during the pandemic but also improved the breathability and comfort of anti-pandemic
products, which is safe and environmentally friendly. In the field of consumer products, the Company has developed pure cotton tissues,
pure cotton wet tissues, sanitary pads with pure cotton surface, as well as disposal cleansing towels, disposable underwear and other
products. It has been invited to participate in the development of a number of national standards and industry standards, drafting and
developing performance requirements for pure cotton non-woven surgical dressings, and technical specifications for contact trauma
dressings and children's masks. As the first and major drafter, Purcotton, a wholly-owned subsidiary of the Company, led the
development of national standards for cotton tissues (GB/T 40276-2021), which requires that the fiber composition and content of
cotton tissues shall be identified, and the fiber content tolerance shall comply with the provisions of GB/T 29862 (implemented on
December 1, 2021). In December 2021, "pure cotton spunlace non-woven fabrics and its products" of the Company was awarded as
the national single champion of manufacturing industry.
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.
The Company worked with Soochow University to carry out "temperature scale of gauze quilt and sleep comfort" project, and partnered
with Wuhan Textile University to carry out "repolymer gauze" for spinning technology; On December 27, the Company and Wuhan
Textile University jointly established the Innovation Research Institute of Winner Medical & Wuhan Textile University to accelerate
the transformation of scientific and technological achievements. Xu Weilin, academician of the Chinese Academy of Engineering,
deputy party secretary and principal of Wuhan Textile University, was appointed as the president of the Research Institute. At the same
time, the Company and the Shenzhen Institute of Advanced Technology of the Chinese Academy of Sciences have jointly established
the "Joint Lab for Wound Dressing Innovative Technology Research" to conduct cutting-edge technology research and new product
development of wound dressings. At present, the Company has two provincial R&D platforms, the "Guangdong Functional Cotton
Engineering Technology Research Center" and the "Guangdong Wound Repair Material Engineering Technology Research Center"
that are dedicated to the research of functional cotton and wound repair materials. In July 2022, the Company signed a contract with
the National Innovation Center For Advanced Medical Devices in Shenzhen, China to build a joint research center, further
strengthening the cooperation between the two sides in the development of innovative medical devices, key core technology research,
and clinical application transformation.
As of June 30, 2022, the Company (including the acquired enterprises) has obtained 77 invention patents, 640 utility model patents,
and 352 design patents in China; and 57 invention patents and 8 utility model patents from countries outside China. 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
The Company is one of the early companies that established a complete medical-grade quality management system in the industry,
including ISO13485, FDA21CFR820, China's Good Manufacturing Practice for Medical Devices, and ISO9001, which have been
certified or approved. Its medical dressings meet the quality standards of many countries and regions, including Europe, the United
States, Japan, and China, and have been accepted by these countries and regions. It also implements the quality control requirements
of medical devices when expanding its heath consumer goods business. In addition, the Company's R&D Center and Lads have the
professional capabilities for product testing certified by the China National Accreditation Service for Conformity Assessment (CNAS).
The medical masks have passed the Type I, Type II and Type IIR product certification of EU MDR, PPE certification, and Level 1,
Level 2 and Level 3 certification of FDA 510K in the United States, respectively, in overseas markets. The Company ranked 1st in the
white book for exporters of epidemic prevention materials issued by the General Administration of Customs and General
Administration of Market Supervision of China during the epidemic in 2020. In China, the masks have passed the testing and
certification of Beijing Institute of Medical Device Testing, National Medical Products Administration. The protective clothing have
been CE certified for EU Type 5 and Type 6. The Company's N95 masks and protective clothing are of good quality and high reputation,
allowing it to be the designated reserve unit of the government's prevention and control command, as well as the main material supplier
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for Shanghai, Jilin, Shenzhen and Henan which have been hit by the COVID-19 pandemic in 2022. In addition, the Company's product
quality has been widely recognized by the market. During the Tokyo Olympic Games and Beijing Winter Olympics, many athletes
wear the Company's protective products, which protected athletes to ensure their excellent performance in the field. Guilin Latex, an
enterprise acquired by the Company, is the original designated production enterprise of the National Family Planning Commission, a
condom product supplier of the United Nations Population Fund, a vice-chairman unit of China Rubber Industry Association, the
location and chairman unit of the Latex Branch, and a unit of Latex Products Standards Committee. It is also a participant and leader
in the formulation of 4 national standards and 6 industrial standards such as latex surgical gloves and condom products.
To ensure the safety of raw materials for its products, Purcotton uses high-quality cotton from around the world to produce its core
products, such as its pure cotton tissue, sanitary pads with pure cotton surface, and pure cotton wet wipes. 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 medical-level quantity management control system, Purcotton is able to provide
customers with high-quality consumer goods that are safe and environmentally friendly. Adhering to the concept of "medicine close to
life, Purcotton care for health", Purcotton not only applies quality natural cotton but also attaches importance to the environmental
friendly weaving and finishing process. To ensure that its products are safe and reliable, no fluorescent brighteners are added to its
products. Some of its products are OEKO-TEX Standard 100 certified, and some infant textile products are Shenzhen Standard certified.
Some non-woven products have passed the testing performed in accordance with the EU AP (2002) 1 and EC1935/2004 EU Food
Contact Materials Regulation.
4. Product advantages
(1) Medical consumables
Through acquisition, the Company's product categories include wound care, infection protection, cleaning and disinfection, injection
and punching, covering application scenarios like clinical and medical institutions and families, which can better meet clients' needs
of one-stop procurement. In addition to traditional acute wound care products, the Company has also developed representative high-
end wet dressings like silicone foam dressings, hydrocolloid dressings, super absorbent pads and scar repair sheet for chronic wounds
that are difficult to heal, which has further enrich its products. For the clinical use scenarios, the Company is committed to change from
selling single products to providing customers with integrated solutions. Its infection prevention 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
disease protection and control, the Company replaces chemical fiber fabrics with pure cotton spunlace non-woven fabrics for masks,
protective clothing, surgical gowns, and isolation gowns. Such innovative products not only meet infection prevention and control
standards but also are more comfortable and environmentally friendly with better breathability. In the field of home care, the Company
provides professional products for clinical use such as hyaluronic acid masks, saline cleaning pads, hydrocolloid band-aids and medical
masks to consumers through portable, sterilized and diversified packages, applying these professional health care products and services
in daily home care.
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(2) Healthy consumer goods
The Company's healthy consumer goods consist of non-woven consumer goods and textile consumer goods. The non-woven consumer
goods include cotton tissues, sanitary pads, and wet wipes; the textile consumer goods include baby supplies, baby clothing, adult
clothing, and bedding. The Company accurately captured the market demand for domestic high-quality consumer products under the
backdrop of consumption upgrading, and took the lead in proposing the innovative concept of replacing chemical fibers with cotton
and getting rid of chemical stimulation, and provide consumers with healthy, comfortable and environmentally friendly consumer
goods. And its cotton tissues are pioneering tissues in the industry, which can partially replace household paper. Pure cotton tissues are
made of degradable cotton after physical processing. There are less chemical stimulation and the tissues can be reused. Both the
production and use of the tissues are more comfortable, safe, and environmentally friendly, so consumer acceptance of the tissues has
been significantly improved, and there are many imitators in the market. For pure cotton wet wipes and sanitary pads 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 clothing and textile consumer products such as gauze children's children's
clothing, household clothing, bedding and bath towels are getting more popular.
5. Brand advantages
(1) Brand advantages in the field of medical consumables
As one of the market leaders in the field of medical consumables, the Company attaches great importance to product quality and service,
and holds exhibitions worldwide to launches the "Winner Medical Academy", aiming to invite experts to educate, organize and
participate in academic forums and public welfare activities, thus promoting the brand, allowing "Winner Medical" to enjoy a high
reputation in the industry, and enabling the products to be widely recognized by customers at home and abroad. During the COVID-
19 pandemic, the Company's actions were highly recognized by the government of China. Winner Medical was praised by the Joint
Prevention and Control Mechanism of the State Council as a well-deserved "ordnance factory" in fighting the pandemic. Winner
Medical (Huanggang) was awarded the title of "National Advanced Unit for Fighting the COVID-19 Pandemic" by the CPC Central
Committee and the State Council. The Company's medical consumables are mainly sold to developed countries and regions such as
Europe, Japan and the United States, and the products under its brand Winner are mainly sold to developing countries and regions such
as Asia, Africa, and Latin America. The Company are providing services for world-renowned medical supplies companies such as
Mlnlycke, Lohmann, and PAUL HARTMANN. According to statistics from the China Chamber of Commerce for Import and Export
of Medicines and Health Products (CCCMHPIE), the Company has been ranked among the top three exporters of Chinese medical
dressings for many consecutive years. The products of "Winner Medical" brands have covered all public and most private hospitals in
Hong Kong. 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
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Industrial Development Organization.
(2) Brand advantages in the field of healthy consumer goods
Consumers' demand for high-quality products is increasing due to consumption upgrading. Sticking to the "cotton fiber only" principle
in its operations, Purcotton insists on offering "comfortable, healthy, and environmentally friendly" cotton products with high quality
to consumers to constantly bring them happiness and quality products, which makes Purcotton products popular among consumers.
Adhering to the concept of "medicine close to life, Purcotton care for health", Purcotton advocates the use of cotton, to reduce environ
mental pollution and to enable consumers to return to a natural and sustainable lifestyle with pure cotton. The pure cotton tissues
developed by Purcotton is a pioneering category. By virtue of pure cotton wet tissues, sanitary pads with pure cotton surface, BBNice,
as well as gauze textile products and clothing, Purcotton has built a brand image of "new Chinese products" with cotton as the core
material and excellent product quality. Its brand awareness is increasing and its reputation is improving year by year, forming effective
competition barriers and bringing powerful added value of products for Purcotton.
6. Advantages of sales channels
(1) Advantages of online channels
In terms of online channels, the Company's "Winner Medical" and "Purcotton" have completed the deployment of mainstream third-
party e-commerce platforms, including Tmall, JD.com and Amazon. With the huge user traffic gathered, its sales has covered most
online shopping consumer groups, and the sales data indicated that the sales of its products rank among the top in the relevant product
categories in major e-commerce platforms. With the attributes of "sales + social", Purcotton's official website and WeChat mini
programs are important platforms for its product display, user interaction, and brand promotion. At the same time, Purcotton is also
cooperating with new social retail platforms such as Douyin and Xiaohongshu, which helps it open up new sales growth channels.
(2) Advantages of offline channels
In the medical consumables section, the Company's domestic medical business distributors (hospital market) have covered over 4,000
hospitals in more than 30 provinces (incl. municipalities and autonomous regions); retail pharmacy market distributors have covered
140,000 retail pharmacies in more than 20 provinces (incl. municipalities and autonomous regions); foreign medical business customers
and distributors have covered more than a hundred countries and regions such as Europe, Japan and the United States.
As for healthy consumer goods section, the Company has opened a total of 339 offline stores as of June 30, 2022. Among them,
Purcotton has opened 335 offline stores (including 27 franchisees) in more than 60 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
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well-known designers at home and abroad to upgrade its store image and to enhance its consumer experience with an exhibition-style
product display balancing both aesthetics and richness of products. It also adds an experience area to highlight product display and user
experience, which has helped increase the Company's sales revenue and further increase its brand awareness.
As for offline terminals like chain stores and supermarkets, based on Purcotton's positioning of high-quality consumer goods, the
Company mainly deploys Purcotton products in High-end boutique supermarkets and local leading supermarkets. Meanwhile, the
Company also has set up dedicated sales teams to cover the bulk purchase or customized purchase needs of corporate clients. The
Company's core products, such as Purcotton's cotton tissue and Nice Princess, have successfully entered supermarket chains,
convenience store chains and offline maternal & infant stores and communities, including about 6,000 outlets of China Resources
Vanguard, Ole' Supermarket, Sam's Clubs, Wal-Mart, Rainbow and other mainstream supermarket chains, over 20,000 outlets of 7-11,
Rosen, Convenience Bee, Today, Every Day, Hong Qi and other convenience store chains, as well as over 7,500 beauty stores and
offline maternal & infant stores such as Watsons, Kidswant and Love Baby Island.
(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 channels, e-commerce channels, and mobile e-commerce channels. In such form, the convenience of online
channels and the consumer experience of offline channels can complement each other. Having a deep insight into the development
trend of integrating online and offline channels, the Company thoroughly optimized and integrated various channels to integrate traffic
and sales of offline stores and online mini programs, thereby further improving its operating efficiency and performance. Online
channels can meet offline consumers subsequent consumption needs while offline channels can provide online consumers further
product information and service experience. Flows of traffics can be directed between the two kinds of channels, so online and offline
traffic can be effectively obtained. As of June 30, 2022, the number of Purcotton users has exceeded 40 million, including over 19
million registered members of its private platforms (8 million store registered members, and over 10 million registered members of its
official website and WeChat mini programs).
7. Advantages of full industrial chain
Adhering to the business philosophy of "Quality before profit", the Company has been constantly improving its product quality, cost
and delivery management and control, and has built a full industrial chain with advantages from procurement, production, sterilization,
warehousing, to delivery. The Company has seven wholly-owned production subsidiaries, covering a total area of more than 1 million
square meters, including 105,000 square meters of clean workshops, supplying large quantities of high-quality medical supplies and
daily necessities around the world each year. Established in 2005 with an area of 550,000 square meters, Winner Medical (Huanggang)
is the main production site of pure cotton spunlace non-woven fabrics, cotton tissues, sanitary pads, and masks; with an area of 67,000
square meters, Winner Medical (Jingmen) is the main production site of gauze clothing, degreased medical bleached gauze, and dyed
medical gauze; with an area of 93,000 square meters, Winner Medical (Jiayu) has four product categories with pure cotton as basic
materials, i.e. the cleaning, disinfection, beauty, and care categories, and two product collections: medical and daily use products;
established in 2001 with an area of 140,000 square meters, Winner Medical (Chongyang) is the Company's main force of producing
its disposable surgical kits and other infection control products in operating room, protective clothing and other epidemic prevention
products, all kinds of cotton balls and cotton pads; established in 2017 with a total area of about 467,000 square meters of its phase I
and phases II sites, Winner Medical (Wuhan) has brought in electron beam sterilization and international modern cotton spunlace
production line; established in 2000 with a total area of about 150,000 square meters, Winner Medical (Tianmen) produce products
such as pure cotton spunlace non-woven fabrics, pure cotton tissues, medical dressing, medical protection series products, being the
production base of pure cotton tissues and medical gauze in China for trade; established in 1999, Winner Medical (Yichang) has 137
advanced air-jet looms, being the main production base for its grey cloth. 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 a 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.
With constant improvement, the Company's excellent production management system has been upgraded from 1.0 to 3.0, covering
seven modules (i.e. standardization, visualization, automation, Just-in-Time, rapid response, value engineering, organizational
guarantee). It has gradually established and improved its daily management system in factory. It has improved its production efficiency
through equipment innovation. For example, its self-developed soft ear loop mask manufacturing equipment truly realize the unmanned
manufacturing of masks with high-efficient equipment; it has basically realized the fully automated production of its products like
cotton tissues and wet wipes; it has preliminarily replace manual production with machinery production for cotton swabs, cotton balls,
cotton pads, makeup cotton, packages, and drapes, which has greatly supported its rapid production and supply. The Company is also
going to explore and build smart factories. It will realize "unmanned production, process-based management, and process
digitalization" step by step.
III. Main business analysis
(I) Overview of business performance
During the reporting period, in the face of the severe challenges brought by the repeated outbreaks of COVID-19 epidemic and changes
in the external economic environment to the business, the Company further clarified its strategic planning, strengthened its brand
development strategy, and focused on the business plan objectives. In the first half of 2022, the Company realized a main business
income of RMB 5.11 billion, representing an increase of 27.4% compared with the same period of the previous year. In the first half
of 2022, in terms of sub-business section, the sales revenue from medical section was RMB 3.23 billion (including a revenue of RMB
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0.09 billion contributed by Longterm Medical), representing a year-on-year increase of 45.3%. Wherein, there was a year-on-year
increase of 53.9% from disease control and protection products, a year-on-year increase of 2.6 times from high-end dressing products,
and a year-on-year increase of 27.5% from traditional wound care and dressing products. Despite of the great effect of epidemic, the
sales revenue from health consumer goods section was RMB 1.88 billion in the first half of this year, representing a year-on-year
increase of 5.1%. Wherein, there was a year-on-year increase of 2.4% from online channels (an increase of 10.0% from official websites,
Wechat mini programs and other self-owned platforms), a year-on-year increase of 9.3% from offline channels (an increased of 35.0%
from supermarket channel, and an increased of 4.8% from offline stores). During the reporting period, through measures such as
optimizing suppliers and customers, streamlining SKUs and improving personnel structure, the Company achieved preliminary success
in cost reduction and efficiency increase. In the first half of the year, the sales expense rate decreased by 1.9 percentage points and the
management expense rate decreased by 1.3 percentage points on a year-on-year basis. The Company obtained a net profit of RMB 890
million attributable to the shareholders of the listed company, representing a year-on-year increase of 17.3%; and obtained a net profit
after deducting the non-recurring profit and loss of RMB 820 million, which was mainly due to the good growth of the main business
and the decrease of government subsidies, financial management income and other non-recurring profit and loss in the same period.
In the second quarter of 2022, the Company obtained a main business income of RMB 2.81 billion, representing a year-on-year increase
of 59.5%, and obtained a net profits attributable to shareholders of listed companies of RMB 0.54 billion, representing a year-on-year
increase of 91.0%. In the second quarter of 2022, in terms of sub-business section, the sales revenue from medical section was RMB
1.83 billion, representing a year-on-year increase of 130.1%, which was mainly due to the continuous improvement of the Company's
brand awareness and reputation and the continuous enrichment of product categories. In particular, there was a rapid growth in the
revenue from domestic channels. Wherein, the sales revenue of hospital channels was RMB 890 million, representing a year-on-year
increase of 470.8%; the sales revenue of domestic pharmacies was RMB 110 million, representing a year-on-year increase of 128.9%;
and the sales revenue from medical e-commerce channels was RMB 230 million, representing a year-on-year increase of 101.9%. As
of June 30, 2022, there was more than 10 million of fans from medical e-commerce channels, with a year-on-year increase of 17.4%,
and a repurchase rate of members of 30.0%. In terms of healthy consumer goods section, although some stores were unable to operate
normally and some regional logistics were interrupted due to the impact of COVID-19, thanks to the diversified layout of online and
offline channels and the complementary advantages of multiple platforms and channels, the sales revenue from healthy consumer goods
section in the second quarter was RMB 990 million, representing a year-on-year increase of 2.0%. Wherein, the sales revenue from
online channeles was RMB 650 million, representing a year-on-year increase of 4.4%, and the sales revenue from offline store channels
was affected by the epidemic, representing a year-on-year decrease of 2.6%. As of June 30, 2022, Purcotton has nearly 40 million
global members, including more than 19 million private members.
The incomes by channels and by products during the reporting period are as follows:
1. Main business income through main channels
Unit: RMB ’0,000
Business First half of
Channel type First half of 2021 YoY change Reasons for YoY change in performance
type 2022
The quality of protective products is
highly recognized by customers. In the
case of sporadic outbreaks of COVID-19
Hospitals in China 159,467.75 59,701.88 167.11% pandemic in China, the company quickly
seized the market opportunity and
achieved a great increase in revenue from
the hospital channel
Mainly due to the increase in the number
Domestic pharmacies 25,028.53 21,248.24 17.79%
of pharmacies covered
Medical A substantial growth in products such as
consumabl gloves, mouth and nose cleaning and
es E-commerce 46,158.81 35,272.19 30.86%
disinfection products, and high-end
dressings
Increase in the number of protective
Domestic direct
22,083.97 5,799.87 280.77% products purchased by enterprises,
selling
institutions and government departments
Loose epidemic prevention and control at
Overseas sales 70,541.63 100,469.44 -29.79% overseas markets, and declined demand
for protective products
Subtotal 323,280.69 222,491.62 45.30% /
E-commerce 112,966.95 110,278.98 2.44% No major changes
Wherein: (1) Tmall,
JD.com and other
Healthy third-party e- 87,279.96 86,924.58 0.41% No major changes
consumer commerce platform
goods
channels
(2) Company-owned User conversion rate was improved
25,686.99 23,354.40 9.99%
platform channels through private domain content operation
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Business First half of
Channel type First half of 2021 YoY change Reasons for YoY change in performance
type 2022
such as official and community operation
website, Wechat
mini program
Offline stores 56,866.34 54,263.42 4.80% No major changes
Supermarket Continuously increase in the number of
14,332.75 10,617.06 35.00%
channels channels covered
Key Client 3,940.97 3,874.40 1.72% No major changes
Subtotal 188,107.01 179,033.86 5.07% /
Total 511,387.70 401,525.48 27.36% /
Note 1: In the first half of 2021, domestic direct sales revenue included the sales revenue of domestic pure cotton spunlace non-woven
fabrics of RMB40,800,400, and foreign sales revenue included the sales revenue of foreign pure cotton spunlace non-woven fabrics of
RMB 57,552,100.
Note 2: The "e-commerce" channel of medical consumables business includes domestic e-commerce platforms and cross-border e-
commerce platforms.
Note 3: The healthy consumer goods business consists of Purcotton business and PureH2B business.
Note 4: The data of the "offline stores" channel of healthy consumer goods business cover directly-operated stores and franchised
stores.
2. Main business income of main products
Unit: RMB ’0,000
Business Reasons for YoY change in
Product type First half of 2022 First half of 2021 YoY change
type performance
Increase of new customers and unit
Traditional wound prices in foreign trade channels and
45,158.42 35,408.47 27.54%
care products the steady growth of e-commerce
channels
Longterm Medical made a
contribution for sales income of
about RMB 67 million; representing
an increase of about 113%
Advanced wound excluding that contributed by
16,044.93 4,374.06 266.82%
care products Longterm Medical, which was
mainly due to the substantial growth
in products achieved by the
Medical Company through expanding sales
consumabl channels and adding new customers.
es Decrease in the number of patients
OR infection
21,940.54 22,804.66 -3.79% undergoing surgery during the
control products
epidemic
Frequent sporadic outbreaks of
COVID-19 pandemic in China,
Disease prevention
leading to a sharp increase in the
and control 225,166.66 146,319.30 53.89%
market demand for N95 masks and
products
protective clothing compared with
the same period last year
Disinfection &
14,970.14 13,585.13 10.20% No major changes
cleaning products
Subtotal 323,280.69 222,491.62 45.30% /
Cotton tissues 41,648.52 40,885.23 1.87% No major changes
The year-on-year increase was due
to the upgrade of packaging and
products and the expansion of sales
channels. Compared with previous
Healthy
periods, the growth rate of this
consumer Sanitary pads 29,290.16 26,454.67 10.72%
product has decreased, which was
goods
mainly due to the decline in the flow
of people in major sales channels
such as supermarkets and
convenience stores.
Wet wipes 7,928.06 9,019.84 -12.10% No major changes
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Business Reasons for YoY change in
Product type First half of 2022 First half of 2021 YoY change
type performance
Other non-woven
22,350.95 22,693.78 -1.51% No major changes
consumer goods
Baby supplies 17,459.71 17,998.93 -3.00% No major changes
Baby clothing 23,104.28 20,690.19 11.67% Increase of the presentation by story
Adult clothing 30,774.83 27,451.73 12.11% theme series and improvement of
Other textile product appearance, and increase of
15,550.51 13,839.49 12.36% online channel marketing
consumer goods
Subtotal 188,107.01 179,033.86 5.07% /
Total 511,387.70 401,525.48 27.36% /
Note 1: In the first half of 2021, the sales revenue of traditional wound care and dressing products including pure cotton spunlace non-
woven fabrics was RMB 98,352,500.
Note 2: The purchase date of Longterm Medical is April 30, 2022, and its sales revenue from May to June is consolidated into the
consolidated financial statements of Winner Medical.
(II) Overview of operation and management
During the reporting period, the Company focused on the following work:
1. Digital transformation
In order to promote "consumer-centric and digital and intelligent manufacturing-driven" business transformation, and carry out the five
digital strategies of "digital commodity operation", "omni-channel digital operation", "consumer digital operation", "digital smart
logistics digital operation" and "smart manufacturing digital operation", the Company further delivered the digital project phase of core
business operation, and effectively promoted the whole industrial chain of the group to drive and lead the overall business change and
innovation from top to bottom. In the first half of 2022, the Company promoted the following digital projects: (1) The Company
continued to promote the upgrading of digital operation capability of all categories of commodities: the Company build a full-
dimensional commodity volume cost-benefit model based on the operation and integration of the whole life cycle of commodities, and
effectively make optimal solution for products gross profit and SKUs through AI technologies such as algorithm engine and machine
learning. The optimization of the prediction model has improved the matching accuracy of commodities, channels and consumers.
Algorithms were used to automatically allocate and replenish goods, so as to predict the balance of production capacity, and to
automatically create a model and generate labels for good sales factors, further improving the overall product operation capabilities.
(2) The Company connected all members to conduct omni-channel integrated marketing operations, to ensure the consistency of
member experience and improve the repurchase rate and transformation of members. During the reporting period, the Company had
completed the connection of all members. In the second half of the year, the Company will further promote the construction of CDP-
MA marketing cloud and strive to comprehensively accelerate the digital operation capability of omni-channel consumers. (3) The
Company promoted the construction of digital operation capacity of smart logistics in the entire network warehouse, and strove to
create an integrated, intelligent, scalable, and active logistics system with quick response speed based on customer demand orientation,
and independently developed WMS&TMS systems through new technologies, effectively promoting logistics costs reduction, and
improving efficiency and user experience. Currently, the Company is committed to the launch promotion of multi warehouses, and
will further promote the upgrading in the second half of the year. (4) The Company accelerated the construction of digital operation
capabilities for all-intelligent manufacturing, applied advanced solutions in the industry to build a green, low-carbon, agile industrial
chain ecological lighthouse factory and an industry-leading Win+ industrial Internet intelligent manufacturing platform. Due to the
independent development of four major types of applications including APS, MES, QMS and IOT based on new technologies, 9 major
manufacturing bases have been empowered to improve quality, reduce costs and improve efficiency. At present, the development,
testing and launch of version 1.0 has been completed, and the comprehensive competitiveness will be continuously improved.
2. R&D and Innovation
In the field of medical consumables, the Company will focus on developing the application of core basic materials in epidemic
prevention products such as masks and protective clothing, so as to provide better product experience for epidemic prevention personnel
and ordinary users when the epidemic is normalized and continue to create greater value for users. In the field of high-end medical
dressing products, the Company will continue to upgrade and iterate on the wet dressing products. In the first half of the year, the
Company continued to strive to R&D and upgrade of adhesive product formula, medical urethanes materials, polymer superabsorbent
materials and other core raw material process formulas. At present, some materials is being performed with the product verification,
which can meet the differentiated customization needs of different customers and different markets after mass production. At the same
time, the Company is also accelerating the deployment of domestic and foreign product certificate access to prepare in advance for the
switch of EU regulations and the substitution of imported products with domestic products. In the first half of this year, the Company's
self-developed antibacterial fiber dressing was approved by the US FDA, and its scar cream products were awarded with China's
registration certificate for Class II medical devices, and more than a dozen high-end dressings were successfully registered in CE, FDA
and China. Relying on the medical R&D technology platform, the Company's product R&D layout has gradually expanded from
medical dressing consumables to daily skin care products, and plans to focus on creating a series of medical and beauty products with
bioactivity functions in the next few years, such as facial mask, cream and other categories.
In the field of health consumer goods, the wide knitted liquid ammonia cotton fabric, which is pioneered by the Company in the industry
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and featured with luxurious texture and comfortable and skin-friendly feelings, has been applied to bedding suites; The cotton sunscreen
2.0 developed by the Company is featured with not only the super sunscreen effect of UPF50 + and good moisture absorption and
permeability, but also upgraded function of peppermint cooling; The high elastic gauze technology, which provides the solution for the
problem of gauze with no elastic and restrained wearing, is widely used in pure cotton gauze products; At the same time, the Company
has also started the carbon footprint certification of core cotton products. Through the carbon footprint certification of cotton tissues,
wet tissues, gauze baby clothes, four-piece bedding sets and T-shirts, the total amount of greenhouse gas emissions of products can be
quantitatively calculated, making it convenient to identify the key points of improvement in the production process of products, and
providing the basis and direction for the sustainable improvement of products. The implementation of carbon footprint certification is
an important step to achieve the goal of reaching the peak carbon of all cotton. In terms of industry–university–research (IUR)
collaboration, in view of the fact that the current state-approved cotton varieties, which are more suitable for use in the textile and
clothing industry, but not suitable for the production and use of non-woven spunlaced cotton, the Company and South China
Agricultural University have jointly established a cotton research institute and appointed Professor Zhang Xianlong as the chief cotton
scientist of Purcotton to carry out cooperation in cotton breeding and spunlaced cotton R&D projects. Currently, (Sanya) Purcotton No.
1, a variety developed through hybrid breeding of sea land fusion, has been expanded and planted in Xinjiang in April; At the same
time, the Company has cooperated with the National Environmental Protection Engineering Technology Center of Donghua University
- Textile Industry Pollution Textile to carry out the analysis and detection project of microplastics released from textile materials, and
output the comparison data of microfiber and microplastics produced by the cotton materials and similar products of chemical fiber
materials in the process of use based on scientific experiments, so as to strengthen the consumer's awareness of deplasticization.
3. Brand building
In the first half of 2022, Winner Medical continued to consolidate the brand image favored by the public and trusted by doctors and
nurses, and continuously improved brand awareness and reputation through effective means. During the reporting period, by
cooperating with a number of authoritative media and innovating forms, the Company's influence in the industry and consumers was
further promoted. Wherein, Winner Medical was invited by Shenzhen Press Group, and visited by a number of media for high-quality
development investigation and special reports publication; Winner Medical was invited to participate in CCTV's Dialogue program,
Phoenix's Chief Interview program to tell the brand story of Winner Medical to create value for society as a national enterprise; Winner
Medical and China Youth Daily jointly launched an advertising film for the interview of Winter Olympic athletes with the theme of
"Go to the Stadium and Win Together"; In collaboration with China Women's News and famous actress Liu Mintao, Winner Medical
released the public welfare theme film My Slash Mother, which was widely discussed and praised by the public. In terms of cross-
border brand cooperation, we have cooperated with Carslan and Genki Forest to expand the attention of Winner Medical in "Generation
Z" and social media platforms. In terms of pharmacy chain, during the college entrance examination, we cooperated with pharmacies
in China to launch more than 70 offline activities of "Winner's Energy Station for Candidates" in various places, helping students to
attend the examination successfully and winning praise from a large number of teachers, students and parents. In the field of
professional academic, we have held academic conferences at all levels to have an effect on the professional market, and held the
charity activity of caring for white angels on the Nurse's Day on May 12, involving more than 50 hospitals in China, further
strengthening exchanges and cooperation with domestic heading hospitals.
In terms of brand construction, Purcotton continued to deepen its communication with consumers, and continued to convey to
consumers the multiple advantages of "cotton" in environmental protection and sustainable development through spokespersons,
creation of original high-quality content, offline exhibition tours and press conferences, so as to enhance consumer awareness and
loyalty to the brand. On March 1, Purcotton officially announced Guo Jingjing, a former national diving team athlete and Olympic
champion, as the brand spokesperson. At the same time, the "reassuring guardian ambassador" Guo Jingjing launched the "Power of a
Cotton" public welfare action together with Purcotton; Based on the conjunction with China Women's News and Xin Shixiang,
Purcotton has created the original brand character documentary series "Her Changes" Luo Haixiang and Shui Qingxia, through real
characters and stories representing the spirit of the times and high-quality original content, to communicate with consumers at a deeper
level, establish the link of spirit and value, and form the brand's own content IP; On the occasion of the coming "World Ocean Day",
Purcotton held the "Go Green Go Live" brand conference and the 2021 social responsibility report conference of Winner Medical, to
deeply understand the environmental protection value of cotton and convey the brand's sustainable development vision to consumers
through online live broadcasts. At the same time, it launched offline themed image exhibitions with China National Geography
Magazine in Shenzhen and Chengdu to enhance the public's attention to environmental protection and the brand of Purcotton.
4. Extensional M&A
During the reporting period, the Company adhered to the strategy of creating a one-stop solution for medical consumables and launched
an extensional M&A around the field of low-value medical consumables. It has successively acquired the controlling interest in
Longterm Medical and Hunan Pingan Medical Device, and 100% equity of Guilin Latex, further enriched the product line,
supplemented the product weakness, expanded domestic and foreign business channels, and improved the Company's strategic layout.
On April 8, by virtue of its own funds of RMB 730 million, the Company acquired a total of 55% equity of Longterm Medical, whose
main business was the research and development, production and sales of high-end wound dressings, and the acquisition date was April
30. With more than 10 years of long-term accumulation of high-quality customers, Longterm Medical has 4 registration certificates for
Class III medical devices and 21 registration certificates for Class II medical devices, leading the industry among high-end wound
dressing enterprises in China. In 2021, it obtained an operating income of RMB 350 million and a net profit of RMB 86.374 million.
The acquisition is helpful to the Company to build a leading position in high-end wound dressings in China, which is of great strategic
significance.
On May 18, the Company invested a total of RMB 750 million to hold 68.7% equity of Hunan Pingan Medical Device after capital
increase and share expansion. The acquisition date was July 1. Hunan Pingan Medical Device, which is mainly engaged in the research
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and development, production and sales of medical devices such as syringes, infusion sets, blood collection tubes, blood collection
needles and indwelling needles, is a well-known trademark in China and a national high-tech enterprise. In 2020, it was awarded the
"second batch of specialized, refined, special and new small giant enterprises". In 2021, Hunan Pingan Medical Device obtained an
operating income of RMB 360 million and a net profit of RMB 85.032 million. Hunan Pingan Medical Device has 17 and 19 registration
certificates for Class III and Class II medical devices respectively, and 24 patent certificates. It makes business at domestic and overseas
markets, and has a leading market share in the hospital market of Hunan Province. Through the acquisition, the gap of the Company's
products in the field of injection and puncture was filled, helping the Company become one of the most comprehensive enterprises in
medical consumables product line in China.
On June 6, the Company acquired 100% equity of Guilin Latex with its own capital of RMB 450 million, and the acquisition date was
June 30. Guilin Latex is mainly engaged in the production and sales of medical latex surgical gloves, medical inspection gloves and
latex condoms. In 2021, Guilin Latex obtained an operating income of RMB 320 million and a net profit of RMB 50.854 million.
Guilin Latex is a participant and leader in the formulation of 4 national standards and 6 industrial standards such as latex surgical
gloves and condom products, in possession of 11 medical device registration certificates and 35 patent certificates, including 13
invention patents. Guilin Latex's medical latex surgical gloves are leading in brand awareness, scale and quality in the hospitals in
China, and also indispensable conventional consumables for various surgeries. They can be used together with the Company's operating
room consumables and wound care products to form various combinations, providing one-stop customized solutions to hospital users
and solving the pain points of hospital users. At the same time, Guilin Latex's condom products will be introduced into the Company's
consumer channels, enriching the Company's consumer product line.
(III) YoY changes in key financial data
Unit: yuan
Year-on-year
Current reporting period Same period last year Reason for change
increase/decrease
Mainly due to the larger
revenue growth in
Operating income 5,157,944,495.72 4,059,865,654.92 27.05%
medical consumables
section
Mainly due to the
increase in commodity
Operating costs 2,640,556,563.64 1,921,789,702.47 37.40%
priceand the increase in
labor costs
For details, please refer
to "3. selling expenses
and Composition" of
"IV. Other information
Sales expenses 950,172,124.74 825,805,820.57 15.06%
required by the
disclosure guidelines for
textile and apparel-
related sectors" below.
Administrative expenses 325,391,883.32 310,652,551.64 4.74% No major changes
Mainly due to the
increase in interest
Financial expenses （73,619,152.34） （12,616,456.80） 483.52%
income and exchange
gains and losses
Income tax expenses 145,670,282.34 143,286,407.76 1.66% No major changes
Mainly due to the
R&D expenses 238,644,498.62 189,917,265.47 25.66% increase in R&D
investment
(1) In 2020, the
Company applied a
credit policy of 100%
payment for protective
products, and in the first
half of 2021, the
Company's credit policy
Net cash flow from
801,150,899.38 197,604,865.77 305.43% for the protective
operating activities
products has returned to
the normal level; (2) The
good performance in
2020 has resulted in
more taxes and fees paid
after the final settlement
in the first half of 2021.
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Mainly due to the
payment or prepayment
Net cash flow from
（966,552,145.71） 1,134,322,825.18 -185.21% of investment funds in 3
investing activities
M&A units during the
reporting period
Mainly due to bank
Net cash flow from
192,733,749.29 （821,629,805.97） 123.46% loans obtained during
financing activities
the reporting period
Mainly due to the
Net increase in cash and increase in cash paid for
54,933,264.88 510,599,067.48 -89.24%
cash equivalents investment during the
reporting period
Significant changes in the profit composition or profit source of the Company during the reporting period
□ 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: RMB ’0,000
Increase or
Year-on-year decrease in Year-on-year
Operating Gross margin increase/decrease operating costs increase/decrease
Operating costs
income ratio of operating over the same of gross margin
income period of the ratio
previous year
By products or services
Medical
consumables -
products on
225,166.66 113,971.32 49.38% 53.89% 92.31% -10.12%Note 1
disease
prevention and
control
The Company needs to comply with the disclosure requirements of the "Textile and Apparel Business" stipulated in the No. 3
Guideline of Shenzhen Stock Exchange for Self-regulatory of Listed Companies - Industry Information Disclosure.
Unit: yuan
Increase or
Year-on-year decrease in Year-on-year
Operating Gross margin increase/decrease operating costs increase/decrease
Operating costs
income ratio of operating over the same of gross margin
income period of the ratio
previous year
By sectors
Medical
3,232,806,937.03 1,734,857,098.62 46.34% 45.30% 60.88% -5.19%
consumables
Healthy
1,881,070,146.61 878,872,880.90 53.28% 5.07% 7.07% -0.87%
consumer goods
By products
By regions
Domestic 4,367,167,496.07 2,200,074,326.83 49.62% 50.28% 56.31% -1.94%
注
Abroad 746,709,587.58 413,655,652.69 44.60% -32.69% -15.87% -11.08% 2
Note: 1. Mainly due to the decline in gross margin of overseas sales;
2. Mainly due to the decline in gross margin caused by the decreased demand from overseas markets and increase in raw material
prices and other factors;
3. The incomes mentioned above are main business income.
In the event that the statistical caliber of the Company’s main business data is adjusted in the reporting period, the Company shall
follow the main business data in the past year adjusted by the caliber at the end of the reporting period
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□ 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
closed at the end Reasons for store
Types of stores Number of stores Area of stores stores during the Brands involved
of the reporting closings
reporting period
period
Expiration of
contract and
active store Purcotton,
Direct-sale stores 312 119,886 19 29
closing for PureH2B
strategic
consideration
Transfer from
franchise store to
Franchises 27 5,901 5 1 Purecotton
directly-operated
store
Total area and performances of directly-operated stores
Operating
Operating Average
income for
year-on-year
Numbe income in the same
Levels of increase/dec
r of Total area January-June period last Reasons
areas rease in
stores 2022(10,000 year
performance
yuan) (10,000
of stores
yuan)
Less
than 300 116 25,485.06 15,904.31 16,066.76 -1.01%
㎡
300-500
73 27,360.62 14,045.91 14,187.08 -1.00%
㎡
500-800
57 35,201.40 12,626.51 13,243.44 -4.66%
㎡
More
than800 20 18,900.70 5,097.70 5,176.20 -1.52%
㎡
It is mainly due to the fact that in the first
half of 2022, some stores were unable to open
their doors normally due to the successive
Total 266 106,947.78 47,674.43 48,673.49 -2.05%
closures and personnel isolation measures
taken for epidemic control, which had an
impact on the offline business of the stores
Note: The above stores are Purcotton's stores opened for more than 12 months as of June 30, 2022. The operating income of offline
stores does not include the sales of offline stores diverted to online Wechat mini-programs.
Top 5 Stores in terms of Operating Revenues
Average performance of
S/N Name of stores Opening date Operating income (yuan)
the store (yuan/m2)
1 Store I October 25, 2017 6,577,590.87 16,289.23
2 Store II September 19, 2014 5,027,339.22 6,685.29
3 Store III January 18, 2018 4,689,890.40 3,518.30
4 Store IV May 15, 2010 4,510,150.29 6,933.36
5 Store V October 31, 2021 4,448,679.42 10,203.39
Total -- -- 25,253,650.20 43,629.57
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New stores of listed companies
Yes □ No
Addres Property
Name of Opening Contract area Investment Operation Business Number of
s of Product Category ownership
stores time (m2) amount (RMB) form model stores
stores status
Direct-sale Direct-
Central Healthy consumer Purecotton
stores of 2022 2,479.18 14,049,871.98 Retail sale 10
China goods leasing
Purecotton stores
Direct-sale Direct-
North Healthy consumer Purecotton
stores of 2022 1,024.00 6,289,649.97 Retail sale 4
China goods leasing
Purecotton stores
Direct-sale Direct-
West Healthy consumer Purecotton
stores of 2022 660.70 3,267,045.22 Retail sale 3
China goods leasing
Purecotton stores
Direct-sale Direct-
South Healthy consumer Purecotton
stores of 2022 486.00 2,453,416.35 Retail sale 2
China goods leasing
Purecotton stores
Direct-sale
North Healthy consumer Franchis Purecotton
stores of 2022 300 433,305.92 Retail 1
China goods es leasing
Purecotton
Direct-sale
South Healthy consumer Franchis Purecotton
stores of 2022 221 412,273.00 Retail 1
China goods es leasing
Purecotton
Direct-sale
West Healthy consumer Franchis Purecotton
stores of 2022 370 629,994.30 Retail 2
China goods es leasing
Purecotton
Direct-sale
Central Healthy consumer Franchis Purecotton
stores of 2022 191.3 309,182.22 Retail 1
China goods es leasing
Purecotton
Total 5,732.18 27,844,738.96 24
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
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 2022 January-June 2021 Percentage
Product of change
Production ion in
Business Product Change reason
Unit Production capacity Production capacit production
category Category Output Output description
capacity capacity y capacity
Utilization Utilizat utilization
rate ion rate rate
No major
Gauze ton 5,585 3,568 64% 5,276 3,210 61% 3%
changes
No major
Medical Cotton ton 1,373 1,026 75% 1,030 857 83% -9%
changes
consumab
les Frequent
’0,000 sporadic
Mask 328,051 295,621 90% 197,351 148,799 75% 15%
pieces outbreaks of
COVID-19
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pandemic in
China, leading
to the demand
for products
increasing
faster than the
increase in
production
capacity
Sporadic
outbreaks of
COVID-19
pandemic,
Protective ’0,000 leading to a
2,652 2,627 99% 780 517 66% 33%
clothing suits significant
increase in the
demand for
products
quantity
Frequent
sporadic
outbreaks of
COVID-19
pandemic in
China, leading
Surgical ’0,000
1,950 1,796 92% 1,560 1,215 78% 14% to the demand
gowns suits
for products
increasing
faster than the
increase in
production
capacity
Medical ’0,000 No major
2,600 2,329 90% 2,595 2,219 86% 4%
combo kits kits changes
Cotton spun
lace non- No major
ton 25,628 14,241 56% 24,090 12,435 52% 4%
woven changes
fabric
Mainly due to
the increase of
new
Cotton ’0,000 production
Healthy tissues 17,397 6,565 38% 13,822 6,934 50% -12%
kits capacity and
consumer the slight
goods decrease of
sales volume
Sanitary ’0,000 No major
25,040 19,496 78% 25,040 18,925 76% 2%
pads pieces changes
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 is involved in textile and apparel industries. The sales channels for healthy consumer goods
include e-commerce, direct chains and supermarkets, key accounts and franchisees.
Unit: yuan
Increase or
Year-on-year Year-on-year
decrease in
Sales Gross margin increase/decrease increase/decre
Operating income Operating costs operating costs
channels ratio of operating ase of gross
over the same
income margin ratio
period of the
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previous year
Online sales 1,129,669,514.64 577,404,203.98 48.89% 26,879,726.10 22,437,124.73 -0.79%
Offline stores 568,663,387.31 226,868,732.28 60.10% 26,029,153.51 16,031,334.21 -1.04%
Supermarket
143,327,527.80 54,670,363.89 61.86% 37,156,885.44 18,477,517.03 -4.05%
channels
Key Client 39,409,716.86 19,929,580.75 49.43% 665,822.66 1,105,998.59 -1.99%
Total 1,881,070,146.61 878,872,880.90 53.28% 90,731,587.71 58,051,974.55 -0.87%
Reasons for change
There was no significant change in the gross profit margin of sales of healthy consumer goods through various channels during the
current period.
3. Selling expenses and composition
Year-on-
year Description of significant
Sales expenses January-June 2022 January-June 2021
increase/dec changes
rease
Mainly due to the increase in
sales staff and medical business
Employee compensation 322,603,966.58 229,922,405.33 40.31% performance, and the
corresponding increase in
employee compensation
Mainly due to the decrease in
business trips of sales staff
Travel expenses 3,848,684.40 5,786,992.03 -33.49%
caused by the impact of
epidemic
Office communication Mainly due to the increase in
8,396,979.22 3,075,901.11 172.99%
costs office and network service fees
Sales commission 118,542,577.52 98,622,807.60 20.20% No major changes
Insurance premiums 3,018,944.71 2,574,426.91 17.27% No major changes
Mainly due to the amortization
of right-of-use assets added for
new stores of the consumer
Depreciation and
156,566,925.78 113,209,102.14 38.30% goods business and the
amortization
amortization of long-term
deferred expenses added for
closed stores
Advertising and
235,198,138.16 233,984,397.50 0.52% No major changes
marketing expenses
Rent 66,454,933.41 85,737,804.97 -22.49% No major changes
Mainly due to the decrease in
Other 35,540,974.97 52,891,982.98 -32.80% other miscellaneous selling
expenses
Total 950,172,124.74 825,805,820.57 15.06%
4. Franchising and distribution
The proportion of franchisees and distributors’ sales revenues exceeds 30%
□Yes No
Top 5 franchisees
A related party or
S/N Name of franchisee Time of cooperation Total sales (Rmb) Level of franchisee
not
1 Franchisee I November 09, 2020 No 2,047,316.15 Primary
2 Franchisee II May 01, 2020 No 1,637,036.90 Primary
3 Franchisee III June 12, 2020 No 1,339,037.08 Primary
4 Franchisee IV December 24, 2020 No 1,000,843.62 Primary
5 Franchisee V June 01, 2021 No 866,781.02 Primary
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Total -- -- -- 6,891,014.77 --
Top 5 distributors
S/N Name of franchisee Time of cooperation A related party or not Total sales (Rmb)
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 19,084,848
Average number of monthly active users 2,060,000
Does it work with a third-party sales platform?
Yes □ No
Unit: yuan
Transaction amount during the
Name of platform Payment to the platform Return rate
reporting period
Taobao (healthy living
545,164,917.16 46,120,707.23 1.80%
consumer products)
Jingdong (healthy living
259,640,720.20 23,003,627.07 1.39%
consumer products)
Amazon (medical
40,826,636.09 19,388,903.05 2.82%
consumables)
Vipshop (healthy living
25,755,382.12 1,440,373.59 4.86%
consumer products)
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
Not applicable.
6. Agency operation
Does it adopt agency operation?
□Yes No
7. Inventory
Inventory
Inventory turnover in YoY increase/decrease
Main products Inventory value Reasons
days in inventory balance
A year-on-year increase
of 52.88%, mainly due
Medical dressings 70 789,656,200.96 273,128,769.49 to the increase of
merchandise inventory
to meet the sales demand
A decrease of 5.69%
over the end of last year
Healthy consumer goods 235 1,019,398,812.02 （61,450,800.50）
without significant
changes
An increase of 13.25%
Overall 125 1,809,055,012.98 211,677,968.99
over the end of last year
33
Full Text of 2022 Semi-annual Report of Winner Medical Co., Ltd.
without significant
changes
Provision accrual for inventory depreciation
Propo Inventory age
rtion
Prod Amount of of
uct inventory depre Net value of Original value of
Cate depreciation ciatio inventories inventories 3 years and
Within 1 year 1-2 2-3
gory reserves n above
reserv
es
Med
ical
4.63
cons 38,144,310.20 789,656,200.96 827,800,511.16 790,119,141.49 23,569,214.34 10,482,438.74 3,629,716.59
%
uma
bles
Heal
thy
cons 9.27 137,686,484.5
104,116,890.45 1,019,398,812.02 1,123,515,702.47 964,923,556.81 12,791,122.55 8,114,538.59
umer % 2
good
s
Tota 7.30 1,755,042,698.3 161,255,698.8
142,261,200.65 1,809,055,012.98 1,951,316,213.63 23,273,561.29 11,744,255.18
l % 0 6
Inventory information of end channels such as franchises or distributors
In 2022, in terms of healthy life consumer goods, the Company opened 5 new stores under the brand of Purcotton, with a total of 27
stores. The franchise stores are operated in a business model in which franchisees are responsible for store construction and daily
operations, and Purcotton provides brand marketing, merchandise and supply chain support. After the sales of stores, Purcotton and
the franchisees obtain their respective profits through sharing; The ownership of the franchise store inventory belongs to Purcotton.
As of June 30, 2022, there was a inventory balance of RMB 10,530,000, with average RMB 390,000 in each store.
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
Trademark Main product Target Main product Main market
Brand name Features Level of cities
name types customers price bands territory
Made of 100%
high-quality
natural cotton
without
fluorescent
RMB 5-30 Second- and
whitening All-age
Purecotton Purecotton Cotton tissues /pack (100 Nationwide third-tier cities
agent; mild customer base
pieces) and above
and non-
irritating;
meeting the
daily needs of
consumers
100% cotton
surface layer Female
Second- and
(surface layer, population at RMB 1.99-
Purecotton Nice Princess Sanitary pads Nationwide third-tier cities
spacer, appropriate 3.99 /piece
and above
sanitary wing ages
surface layer)
100% cotton Parental RMB 3.32- Second- and
Purecotton BBNice Cotton diapers Nationwide
surface layer; population 4.14 /piece third-tier cities
34
Full Text of 2022 Semi-annual Report of Winner Medical Co., Ltd.
unique in the and above
market; made
from natural
cotton; 2mm
ultra-thin core
with 28 times
ultra-high
absorption
capacity
100% cotton
material; soft
Second- and
and non- All-age RMB 20-40
Purecotton Purecotton Wet wipes Nationwide third-tier cities
slippery; customer base /pack
and above
gentle and
non-irritating
100% cotton
material
without
Expecting
fluorescent nor
Baby mothers, Second- and
formaldehyde; RMB 100-400
Purecotton Purecotton products/clothi newborns, Nationwide third-tier cities
the unique /piece
ng babies, and above
gauze fabric to
toddlers
provide more
comfortable
care
Outwear:
RMB 200-600
100% cotton
yuan/piece;
material; high-
home wear:
quality cotton
200-500
without
yuan/piece;
fluorescent nor
thermal
Adult clothing formaldehyde; adults at Second- and
underwear:
Purecotton Purecotton / intimate soft to the appropriate Nationwide third-tier cities
RMB 100-500
apparel touch; the ages and above
yuan/piece;
unique gauze
underwear:
fabrics to
RMB 48-68
provide more
yuan/pair;
comfortable
socks: RMB
care
20-80
yuan/pair
100% cotton
material; high- Baby bedding:
quality cotton RMB 200-500
without Expecting /set; toddler
fluorescent nor mothers, bedding: RMB
formaldehyde; newborns, 300-800 /set; Second- and
Bedding,
Purecotton Purecotton soft to the babies, adult bedding: Nationwide third-tier cities
toiletries
touch; the toddlers and RMB 500- and above
unique gauze adult customer 2000 /set;
fabrics to base bathroom
provide more supplies: RMB
comfortable 50-200 /piece
care
Partner brands
Brand
Main and
Main Target Main Cooperat
Brand Tradema product Level of trademar Partner Cooperat
product Features customer market ion
name rk name price cities k rights name ion mode
types s territory period
bands ownershi
p
Licensed brand
35
Full Text of 2022 Semi-annual Report of Winner Medical Co., Ltd.
Main
Main Main Exclusive
Brand Trademar Target product Level of License
product Features market Licensor license or
name k name customers price cities period
types territory not
bands
The
product is
made
from
Shanghai
Purcotton, 100% Infants
Baby Second- Character 9/15/2021
Purcotton, China cotton and young RMB
clothing Nationwid and third- License -
China Aerospace material children 198-458 No
and e tier cities Administr 10/14/202
Aerospace modeling and customer /piece
supplies and above ative 1
figures designed group
Co,.Ltd.
with
China
Aerospace
image
The Party A:
product is Koni
made Culture
from (Beijing)
Cotton
100% Co.,
Purcotton, tissues, Second- Septembe
cotton All-age RMB Ltd. Party
Purcotton, Ultraman wet Nationwid and third- r 01,2021
material customer 21.8-298 B: No
Ultraman modeling tissues, e tier cities - October
and base /piece Hangzhou
characters bath and above 31,2022
designed Qianxi
towels
with Culture
Ultraman Communi
cartoon cation
image Co., Ltd
Marketing and operation of each brand during the reporting period
Please refer to the "Brand marketing" in "III. Analysis of Main Business" of "Section 3 Management Discussion and Analysis" for
marketing and operation of brands.
Cases involved in trademark ownership disputes
□ Applicable Not applicable
9. Other
Whether the Company is engaged in apparel design-related business
Yes □ No
The number of fashion The number of contracted
33 1
designers in the Company fashion designers
The operation of the built
PLM syetem, 3D design platform and digital color tool Coloro Creative Intelligence
designer platform
Did the company hold an order meeting?
□Yes No
V. Non-main business analysis
Applicable □ Not applicable
Unit: yuan
Proportion in total
Amount Formation reasons Is it sustainable
profits
Mainly refers to the income from
Investment income 31,452,189.90 3.01% cash management with raised No
funds and self-owned funds
Prot/los from changes Mainly refers to the income from
35,182,098.83 3.37% No
in fair value cash management with raised
36
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funds and self-owned funds
Mainly refers to the impairment
arising from fair value
Impairment of assets -73,045,565.34 -7.00% No
assessment of inventories and
fixed assets
Mainly refers to the gains from
Non-operating income 2,152,935.65 0.21% No
scrapping fixed assets
Mainly refers to the loss of
Non-operating expenses 8,633,722.09 0.83% No
scrapping fixed assets
Mainly refers to the estimated
provision for credit impairment
Credit impairment Loss （7,749,168.11） -0.74% No
loss of accounts receivable and
other receivables
Gains from asset Mainly refers to the loss on
（547,132.74） -0.05% No
disposal disposal of non-current assets
VI. Analysis of assets and liabilities
1. Significant changes in the composition of assets
Unit: yuan
End of the reporting period End of the previous year
The Description of
The Increase/decreas
proportion significant
Amount proportion in Amount e in proportions
in total changes
total assets
assets
No major
Monetary capital 4,213,668,508.76 27.15% 4,273,938,326.82 32.22% -5.07%
changes
Accounts Mainly due to
1,002,762,209.29 6.46% 775,546,589.42 5.85% 0.61%
receivable sales growth
No major
Inventory 1,809,055,012.98 11.65% 1,597,377,043.99 12.04% -0.39%
changes
Long-term
No major
equity 19,358,011.13 0.12% 16,949,801.24 0.13% -0.01%
changes
investments
Mainly due to
the increase
Fixed assets 1,924,347,463.68 12.40% 1,477,320,848.63 11.14% 1.26% caused by new
mergers and
acquisitions
Mainly due to
the increase in
Construction in plant and
531,760,298.29 3.43% 216,096,622.30 1.63% 1.80%
progress equipment
investment by
subsidiaries
Right-of-use No major
473,619,587.07 3.05% 531,735,443.44 4.01% -0.96%
assets changes
Mainly due to
Short-term debt 1,141,476,733.93 7.35% 0.00 0.00% 7.35% increased
borrowing
Contract No major
320,794,802.74 2.07% 341,175,665.42 2.57% -0.50%
liabilities changes
Mainly due to
the increase
Long-term loans 28,000,000.00 0.18% 0.00 0.00% 0.18% caused by new
mergers and
acquisitions
No major
Lease liabilities 316,525,936.97 2.04% 381,808,925.09 2.88% -0.84%
changes
Advance to 420,787,215.37 2.71% 110,462,594.38 0.83% 1.88% Mainly due to
37
Full Text of 2022 Semi-annual Report of Winner Medical Co., Ltd.
supplier the increase in
advance payment
for raw material
purchase
Mainly due to
the appraisal
Intangible assets 799,026,401.97 5.15% 265,700,890.65 2.00% 3.15% appreciation of
newly acquired
companies
Mainly due to
prepayment of
Other non-
252,312,831.03 1.63% 115,571,001.80 0.87% 0.76% equity funds to
current assets
Pingan Medical
Device
Mainly due to
the premium
Goodwill 588,885,371.18 3.79% 0.00 0.00% 3.79% generated by the
newly acquired
company
Mainly due to
the increase in
Notes payable 146,065,963.57 0.94% 36,200,130.04 0.27% 0.67%
the amount
settled by bills
Mainly due to
the increase in
Accounts the amount
996,960,746.96 6.42% 734,521,490.60 5.54% 0.88%
payable payable for raw
material
purchase
Mainly due to
the increase in
Taxes payable 183,490,178.24 1.18% 93,859,069.68 0.71% 0.47%
corporate income
tax payable
Mainly due to
the increase of
deferred income
tax liabilities
Deferred income recognized by
80,180,343.95 0.52% 13,337,159.68 0.10% 0.42%
tax liabilities the newly
acquired
companies in the
appraisal
appreciation
2. Major overseas assets
□ Applicable Not applicable
3. Assets and liabilities measured at fair value
Applicable □ Not applicable
Unit: yuan
Gain/loss Accumulate Purchase Sales
Impairment
from d fair value amount amount
Opening in accrual of Other Closing
Item changes in changes during the during the
balance current changes balance
fair value for included in reporting reporting
period
the period equity period period
Financial assets
1. Trading
financial
3,130,529,70 35,182,098.8 3,093,150,00 3,499,161,82 2,726,914,55
assets
9.10 3 0.00 0.00 6.35
(excluding
derivative
38
Full Text of 2022 Semi-annual Report of Winner Medical Co., Ltd.
financial
assets)
Financial
3,130,529,70 35,182,098.8 3,093,150,00 3,499,161,82 2,726,914,55
assets
9.10 3 0.00 0.00 6.35
subtotal
Total of the 3,130,529,70 35,182,098.8 3,093,150,00 3,499,161,82 2,726,914,55
above 9.10 3 0.00 0.00 6.35
Financial
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
liabilities
Other changes
Not applicable.
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
The breakdown of monetary funds that are restricted in use due to mortgages, pledges or freezes, restricted in
withdrawal due to centralized management of funds, as well as those placed outside China with restrictions on
repatriation of funds, is as follows:
Item Closing Balance Beginning balance
L/C deposit*1 50,672,072.00 27,597,366.13
Deposit for bank acceptance bill*2 11,119,000.00 -
Performance bond*3 2,354,080.27 2,162,025.10
Balance of other restricted monetary funds * 4 5,977,829.57 155,566,673.55
Total 70,122,981.84 185,326,064.78
*1 L/C deposit refers to the deposit deposited by Winner Medical and Winner Medical (Tianmen) to for the processing of letters of
credit.
*2 Deposit for bank acceptance bill refers to the deposit deposited by Longterm Medical for issuance of acceptance bill.
*3 The performance bond is the deposit deposited by Winner Medical (Hong Kong) in the bank for transactions with customers.
*4 Balance of other restricted monetary funds refers to the balance of special deposit accounts for restricted non-budget units opened
by Shenzhen Purcotton and PureH2B in accordance with the regulations of prepaid card issuance formulated by the Ministry of
Commerce.
VII. Analysis of investment
1. Overall situation
Applicable □ Not applicable
Investment amount in the reporting period Investment amount in the same period of
Change percentage
(RMB) the previous year (RMB)
4,609,168,278.88 2,855,178,484.95 61.43%
2. Significant equity investments acquired during the reporting period
Applicable □ Not applicable
Unit: yuan
Curren
Name Progre
t Date Disclo
of the Princip Invest Invest ss as Estima Involv
Shareh Source Invest invest of sure
investe al ment ment Produc of the ted ed in
olding of Partner ment ment disclos index
d operati metho amoun t type balanc incom litigati
ratio funds period profit ure (if (if
compa on d t e sheet e on
and any) any)
ny date
loss
Zhejia R&D, Medic The
727,54 Self- 4,894, April
ng produc Acquis 55.00 al acquisi
0,000. owned / / 0.00 217.53 No 11,
Longte tion ition % consu tion Note
00 funds 2022
rm and mables date
39
Full Text of 2022 Semi-annual Report of Winner Medical Co., Ltd.
Medic sales was
al of April
Techn high- 30,
ology end 2022,
Co., wound the
Ltd. dressin incom
gs e
statem
ent for
May-
June
2022
and the
balanc
e sheet
as of
June
30,
2022
are
includ
ed in
the
consoli
dation
scope
The
Produc acquisi
tion tion
and date
sales was
of June
medica 30,
l latex 2022,
Guilin
surgica the
Zizhu Medic
l 450,00 Self- balanc June
Latex Acquis 100.00 al
gloves, 0,000. owned / / e sheet 0.00 0.00 No 08,
Produc ition % consu
medica 00 funds as of 2022
ts Co., mables
l June
Ltd.
inspect 30,
ion 2022 is
gloves includ
and ed in
latex the
condo consoli
ms dation
scope
1,177,
4,894,
Total -- -- 540,00 -- -- -- -- -- -- 0.00 -- -- --
217.53
0.00
Note: The current investment profit and loss of Longterm Medical is RMB 4,894,217.53, which is the net profit attributable to the
parent company from May to June 2022 continuously calculated on the basis of the fair value of identifiable net assets on the
purchase date.
3. Significant non-equity investments in progress during the reporting period
Applicable □ Not applicable
Unit: yuan
Industri Investm Cumulat Cumulat Reasons
Investm es ent ive ive for not
Date of Disclos
Investm ent in involve amount actual Estimat realized meeting
Project Source Project disclosu ure
ent fixed d in in the investm ed gains as the
name of funds progress re (if index (if
method assets or investm current ent income of the schedul
any) any)
not ent reportin amount end of ed
projects g period as of the the progress
40
Full Text of 2022 Semi-annual Report of Winner Medical Co., Ltd.
end of reportin and
the g period projecte
reportin d
g period earnings
High-
end
dressing
Medical
producti Indepen 54,806, 86,790, Proceed
Yes consum 40.02% 0.00 0.00 N/A
on line dent 787.08 500.00 s
ables
construc
tion
project
Marketi
ng
Healthy
network Indepen 60,632, 279,014 Proceed
Yes consum 39.60% 0.00 0.00 N/A
construc dent 961.37 ,300.00 s
er goods
tion
project
Medical
consum
R&D
ables +
Center
Indepen healthy 27,481, 101,222 Proceed
construc Yes 43.00% 0.00 0.00 N/A
dent living 988.87 ,600.00 s
tion
consum
project
er
products
Medical
consum
Digital
ables +
manage
Indepen healthy 12,861, 113,234 Proceed
ment Yes 42.12% 0.00 0.00 N/A
dent living 053.53 ,500.00 s
system
consum
project
er
products
Winner
Industri Medical
Indepen 11,971, 64,086, Proceed
al Park Yes consum 16.02% 0.00 0.00 N/A
dent 947.87 300.00 s
(Jiayu) ables
Project
Phase II Medical
expansi consum
on ables +
project Indepen healthy 170,723 377,566 Proceed
Yes 62.93% 0.00 0.00 N/A
of dent living ,540.16 ,700.00 s
Winner consum
Medical er
Wuhan products
1,021,9
338,478
Total -- -- -- 14,900. -- -- 0.00 0.00 -- -- --
,278.88
00
4. Financial assets measured at fair value
Applicable □ Not applicable
Unit: yuan
Gain/loss Accumulat
Purchase Sales
from ed fair Accumulat
Initial amount in amount in
Asset changes in value ed Other Closing Source of
investment the current the current
classes fair value changes investment changes balance funds
cost reporting reporting
for the included in income
period period
period equity
Trust 1,330,000, 8,923,223. 959,000,00 1,039,000, 3,240,646. 1,273,043, Self-owned
products 000.00 76 0.00 000.00 93 323.76 funds
41
Full Text of 2022 Semi-annual Report of Winner Medical Co., Ltd.
40,000,000 40,000,000 Self-owned
Funds
.00 .00 funds
Owned +
1,770,996, 26,258,875 2,094,150, 2,460,161, 25,803,333 1,413,871,
Other raised
820.00 .07 000.00 820.00 .08 232.59
funds
Self-owned
Other 0.00 0.00 0.00 0.00 0.00 0.00
funds
3,100,996, 35,182,098 3,093,150, 3,499,161, 29,043,980 2,726,914,
Total 0.00 0.00 --
820.00 .83 000.00 820.00 .01 556.35
5. The use of proceeds
Applicable □ Not applicable
(1) The overall use of proceeds
Applicable □ Not applicable
Unit: RMB ’0,000
Total amount of proceeds 355,884.93
Total amount of proceeds invested during the reporting period 87,378.13
Total accumulated amount raised for proceeds 219,621.78
Total amount of proceeds for alteration purposes during the
8,787
current reporting period
Total accumulated amount of proceeds for alteration purposes
8,787
during the current reporting period
Proportion of total amount of proceeds for alteration purposes
2.47%
during the current reporting period
Description of the overall use of proceeds
In the first half of 2022, the Company used raised funds of RMB 873,781,300. As of June 30, 2022, the Company had actually used
raised funds of RMB 2,196,217,800.
(2) Projects committed with raised funds
Applicable □ Not applicable
Unit: RMB ’0,000
Committ Cumulati
Investme
ed ve Cumulati
Whether nt The Whether
investme Investme investme ve
the Total progress project Benefits there is a
nt nt nt benefits
project investme Adjusted as of the reaches realized Whether significa
projects amount amount realized
has been nt in total end of the in the projected nt
and in the as of the as of the
changed committe investme the intended current benefits change
investme current end of end of
(includin d nt (1) reporting usable reporting are met in project
nt of reporting the the
g partial proceeds period status period feasibilit
over- period reporting reporting
change) (3) = date y
raised period period
(2)/(1)
proceeds (2)
Committed investment projects
High-end
dressing
producti Septemb
21,685.8 21,685.8
on line No 5,480.68 8,679.05 40.02% er 30, 0 0 N/A No
6 6
construct 2024
ion
project
Marketin
g
Septemb
network 70,456.8 61,669.8 27,901.4
Yes 6,063.3 39.60% er 30, 0 0 N/A No
construct 7 7 3
2024
ion
project
R&D No 23,542.1 23,542.1 2,748.2 10,122.2 43.00% Septemb 0 0 N/A No
42
Full Text of 2022 Semi-annual Report of Winner Medical Co., Ltd.
Center 5 5 6 er 30,
construct 2024
ion
project
Digital
manage Septemb
26,881.0 26,881.0 11,323.4
ment No 1,286.11 42.12% er 30, 0 0 N/A No
5 5 5
system 2024
project
Bolster
working No 8,787 0 0 0.00% 0 0 N/A No
capital
Subtotal
of
committe
142,565. 142,565. 15,578.2 58,026.1
d -- -- -- 0 0 -- --
93 93 9 9
investme
nt
projects
Investment of over-raised proceeds
Winner
Industria
June 30,
l Park 40,000 1,197.19 6,408.63 16.02% 0 0 N/A No
2023
(Jiayu)
Project
Phase II
expansio
n project Decembe
17,072.3 37,756.6
of 60,000 62.93% r 30, 0 0 N/A No
5 7
Winner 2022
Medical
Wuhan
Return of
bank
-- -- -- -- -- --
loans (if
any)
Bolster
working 117,430.
-- 113,319 53,530.3 100.00% -- -- -- -- --
capital 3
(if any)
Subtotal
of use of
71,799.8 161,595.
over- -- 213,319 -- -- -- --
4 6
raised
proceeds
142,565. 355,884. 87,378.1 219,621.
Total -- -- -- 0 0 -- --
93 93 3 79
Informati
on on
and
reasons
for not
meeting
the
schedule
N/A
d
progress
or
projected
earnings
(by
specific
project)
43
Full Text of 2022 Semi-annual Report of Winner Medical Co., Ltd.
Descripti
on of
significa
nt
N/A
changes
in project
feasibilit
y
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 permanently supplement the working capital. As of June 30, 2022, RMB 1174.303 million of
over-raised proceeds have been used to bolster working capital.
On November 27, 2020, the 15th meeting of the Second Board of Directors and the 9th meeting of the Second Board of
Supervisors of the Company reviewed and approved the “Proposal Regarding the Use of Over-raised Proceeds for the
Investment in Winner Industrial Park (Jiayu) Project”. The 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
Amount, technology achievements, and based on the existing advantages of the Company in the industry, considers natural cotton
purpose as the main raw material to innovate and improve degreasing and spunlace technology. It adopts comprehensive use of
and high-pressure “water needle” and other high-efficiency production technologies, and plans to build production projects
progress in relation to spunlace, wash care, wet wipes, medical cotton/gauze/nonwoven fabrics, hand sanitizer and other products.
of use of As of June 30, 2022, the total amount invested in the above projects was 64.0863 million.
over-
raised On November 27, 2020, the 15th meeting of the Second Board of Directors and the 9th meeting of the Second Board of
proceeds Supervisors of the Company reviewed and approved the “Proposal Regarding the Use of Over-raised Proceeds for the
Phase II Expansion Project of Winner Medical Wuhan”. The main body of the Proposal is as follows: The Company
plans to allocate 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 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.
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 Supervisory Committee on April 20, 2022, and the annual general meeting of 2021 on May 13, 2022,
respectively, 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.
Applicable
Occurred in previous years
Change On November 27, 2020, the 15th meeting of the Second Board of Directors and the 9th meeting of the Second Board of
of Supervisors of the Company reviewed and approved the “Proposal Regarding Capital Increase in Wholly owned
location Subsidiaries with Some of the Proceeds, Changes to Implementing Entity of the Fundraising Projects, and Addition of
for the Implementation Sites of Some Fundraising Projects”. The main body of the Proposal is as follows: To further improve
impleme the production, management efficiency and comprehensive utilization rate of resources, seize market development
ntation opportunities, and better promote the implementation of fundraising projects, the Company plans to use some of the
of the proceeds to increase the capital of the wholly-owned subsidiaries and change the implementing entity of the fundraising
proceeds projects, and add new implementation sites for the fundraising projects. Among them, the original implementing entity
investme of the “R&D Center Construction Project” was Winner Medical (Wuhan) Co., Ltd. According to the Company’s
nt project development strategy and actual business needs, it plans to include Winner Medical Products Co., Ltd. as the
implementing entity of “R&D Center Construction Project”, a fundraising project. A new implementation site in Winner
Industrial Park, No. 660 Bulong Road, Longhua New District, Shenzhen is also included accordingly.
Adjustm Applicable
ent of the Occurred during the reporting period
impleme
ntation 2021 annual general meeting reviewed and approved the "Proposal on Adjusting the Implementation Mode, Extending
44
Full Text of 2022 Semi-annual Report of Winner Medical Co., Ltd.
mode of the Construction Period and Permanently Bolstering the Working Capital of Some Fund Raising Projects", and agreed to
the adjust the implementation mode of some of the fund-raising projects. To quickly respond to market changes, improve
proceeds the efficiency of the use of funds raised, and build marketing network projects, the investment related to the online
investme marketing of the wholly-owned subsidiary Shenzhen PurCotton Technology Co., Ltd. was increased.
nt project
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 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 RMB 100.1742 million of proceeds. It has been verified by the
[2021] No.ZI10031 "Special Auditor’s Report on Proceeds Replacement of Winner Medical Products Co., Ltd." issued
by BDO Certified Public Accountants (Special General Partnership) on February 23, 2021. Among them: the actual
investment amount of the Company’s self-raised funds pre-invested in the proceeds investment project is RMB
100.1742 million, of which: RMB 85.8942 million was invested in the Wuhan Phase II expansion project, and RMB
Pre- 14.28 million was invested in Winner Industrial Park (Jiayu) Project. In February and March 2021, the Company
investme transferred 14.28 million yuan and RMB85.8942 million respectively from the special account for proceeds to replace
nt and the self-raised funds that had been invested in advance in the proceeds project.
replacem
ent of the On October 12, 2020, the 13th meeting of the Second Board of Directors and the seventh meeting of the Second Board
proceeds of Supervisors of the Company reviewed and approved the “Proposal Regarding the Use of Proceeds to Replace Self-
investme raised Funds Pre-invested in the Fundraising Project”, respectively, and agreed that the Company could replace the self-
nt project raised funds pre-invested in the fundraising project with RMB 233.7173 million of proceeds. It has been verified by the
[2020] No.ZI10635 "Special Auditor’s Report on Proceeds Replacement of Winner Medical Products Co., Ltd." issued
by BDO Certified Public Accountants (Special General Partnership) on October 12, 2020. Among them: the actual
investment amount of the Company’s self-raised funds pre-invested in the proceeds investment project is RMB
233.7173 million, of which: RMB 26.5062 million was invested in high-end dressing production line construction
project, RMB 110.0794 million was invested in marketing network building project, RMB 50.2174 million was invested
in R&D center construction project, RMB 46.9143 million was invested in digital management system project. In
October and November 2020, the Company transferred RMB 73.4204 million and RMB 160.2968 million respectively
from the special account for proceeds to replacing the self-raised funds that had been invested in advance in the proceeds
project.
Tempora N/A
ry
replenish
ment of
working
capital
with idle
proceeds
Amount N/A
of and
reasons
for the
balance
of
proceeds
resulting
from
project
impleme
ntation
Usage
and
purposes
of
proceeds As of June 30, 2022, the balance of unused proceeds of the Company was RMB1,471.0514 million, of which: the
not used balance of cash management was RMB1,436.9954 million and the balance of RMB34.056 million was deposited in the
during account for proceeds.
the
current
reporting
period
Problems
or other NA
circumst
45
Full Text of 2022 Semi-annual Report of Winner Medical Co., Ltd.
ances in
the use
and
disclosur
e of
proceeds
(3) Changes in proceeds projects
Applicable Not applicable
Whether
Actual
Total Investment there is a
Actual cumulative
amount of progress as The project Benefits significant
Correspond investment investment Whether
Project proceeds to of the end reaches the realized in change in
ing original amount in amount as projected
after be invested of the intended the current the
committed the current of the end benefits are
change in the reporting usable reporting feasibility
projects reporting of the met
changed period (3) status date period of the
period reporting
project (1) = (2)/(1) changed
period (2)
project
Marketing Marketing
network network September
61,669.8 6,063.3 27,901.43 45.24% 0 N/A No
constructio constructio 30, 2024
n project n project
Total -- 61,669.8 6,063.3 27,901.43 -- -- 0 -- --
Due to the strategic adjustment of the Company, 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
Supervisory Board on April 20, 2022 and the annual general meeting of 2021 on May 13,
2022, respectively, and reviewed and approved the Proposal on Adjusting the
Reasons for change, decision-making
Implementation Mode, Extending the Construction Period and Permanently Bolstering the
procedures and information disclosure
Working Capital of Some Fund Raising Projects, and investment on the marketing network
(by specific project)
building project of the wholly-owned subsidiary Shenzhen PureH2B Technology Co., Ltd.
was terminated On April 22, 2022, the Company disclosed the Announcement on Adjusting
the Implementation Mode, Extending the Construction Period and Permanently Bolstering
the Working Capital of Some Fund Raising Projects (Announcement No. 2022-021)
Information on and reasons for not
meeting the scheduled progress or The fund-raising capital investment project has not been completed and the benefits
projected earnings (by specific generated by the fund-raising capital investment project cannot be calculated yet
project)
Description of significant changes in
The feasibility of the marketing network building project has not changed significantly
the feasibility of the changed project
6. Entrusted financial management, derivatives investment and entrusted loans
(1) Entrusted financial management
Applicable □ Not applicable
Overview of entrusted financial management during the reporting period
Unit: RMB ’0,000
Source of funds for Amount incurred in Impairment of
Overdue amount not
Specific type entrusted financial entrusted financial Outstanding balance overdue financial
recovered
management management management
Bank financial
Self-owned funds 74,160 28,000 0 0
products
Bank financial
Proceeds 135,255 112,498.5 0 0
products
Trust financial
Self-owned funds 95,900 125,000 0 0
products
Other categories Self-owned funds 4,000 4,000 0 0
Total 309,315 269,498.5 0 0
Specific circumstance of high-risk entrusted financing with significant single amount or with low security, poor liquidity and not
break-even
46
Full Text of 2022 Semi-annual Report of Winner Medical Co., Ltd.
□ 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) Derivative investment
□ Applicable Not applicable
The Company has no derivative investment in the reporting period.
(3) Entrusted loans
□ Applicable Not applicable
The Company had no entrusted loan during the reporting period.
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 joint stock companies
Applicable □ Not applicable
Information on major subsidiaries and joint stock companies with an impact of 10% or more on the Company’s net profit
Unit: yuan
Company Company Principal Registered Operating Operating
Total assets Net assets Net profit
name type operation capital income profit
Mainly
responsible
Winner for the
Medical production 259,459,200. 1,377,173,77 1,056,382,87 1,048,357,74 175,602,477. 153,811,702.
Subsidiaries
(Huanggang) of large rolls 00 0.23 3.59 4.53 72 62
Co., Ltd. of cotton and
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
Company name
subsidiaries during the reporting period and performances
Zhejiang Longterm Medical Technology Helps to enrich the Company's product
Acquisition
Co., Ltd. line and expand business channels
Helps to enrich the Company's product
Winner Guilin Latex Co., Ltd. Acquisition
line and expand business channels
Description of major holding companies and joint stock companies
X. Structured subjects controlled by the Company
□ Applicable Not applicable
XI. Risks faced by the Company and countermeasures
1. Risk of earnings volatility due to the COVID-19 outbreak and countermeasures
Affected by the COVID-19 pandemic, the Company’s sales of epidemic protective products, such as medical masks and protective
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Full Text of 2022 Semi-annual Report of Winner Medical Co., Ltd.
clothing increased significantly in 2020. In 2021, with the effective prevention and control of the Covid-19 across the globe and the
growth of a wide range of vaccination, medical protection products and increased competition, the Company's medical protection
products sales decreased year-on-year. In the first half of 2022, Shanghai, Hong Kong and other places suffered from severe epidemic
prevention and control circumstances, and the Company's medical protection products sales increased year on year. The Company's
medical protection products are affected by the epidemic changes, and short-term sales revenue and net profit may fluctuate.
Hit by the COVID-19 pandemic, the country, hospitals and the public have raised the requirements for a hygienic environment, the
Company’s brand awareness, reputation and influence has been greatly enhanced, while sales channels have been further expanded.
The Company then will seize market opportunities, make product adjustments according to market demands, increase its share and
coverage in the medical consumables market.
2. Risk of fluctuations in downstream market demand and less-than-expected customer development and countermeasures
Thanks to its three brands, i.e., "Winner Medical", "Purcotton" and "PureH2B", the Company realized synergetic development of
medical and consumer sectors. Its business and development prospects depend on the sustainable and healthy development of macro
economy, the continued growth of national per capita disposable income, and the consumers’ increasing attention to the concept of
health and environmental protection. Therefore, in the event of a macroeconomic downturn, a decline in national per capita disposable
income or purchasing power, or an uncertain expected economic outlook, the downstream demand situation of the Company, especially
consumers’ willingness and ability to purchase high-quality products, may be affected, which would adversely affect the Company’s
operating results. In addition, after more than ten years of rapid development, the growth of e-commerce in China has slowed down
and the difficulty of acquiring customers has increased. If the Company cannot adjust its business strategy based on market conditions,
it may not be able to continuously expand its customer base and reduce customer acquisition costs, which would adversely affect the
Company’s long-term profitability.
3. Risk of raw material price fluctuations and countermeasures
The Company’s main raw materials are cotton as well as cotton yarn and cotton greige fabric for medical use made from cotton. The
prices of cotton are affected by multiple factors such as planting area, natural production, inventory cycle, agricultural price policy of
origin, consumer demand and even futures prices. In addition, the prices of imported cotton are also affected by other factors such as
international trade policies and exchange rate fluctuations. If the purchase price of raw materials such as cotton continues to rise in the
future, it will have a greater cost pressure on the Company’s production and operation. If the Company fails to the adjustment of sales
price with that of raw material price, it may have a negative impact on the stability of the Company’s profitability.
To deal with the risk of cotton price fluctuations, the Company usually purchases forward contracts when the cotton price is relatively
low, and when the cotton price rises to a certain level, it will adjust the sales price appropriately to reduce the negative impact on the
Company’s profitability.
4. Risk of changes in industry policies and standards and countermeasures
Medical device, which directly affects the life and health safety of users, has been a key supervised industry. In recent years, as China
further deepens the reform of the medical and health system, relevant government departments have introduced a series of regulations
and policies on industry standards, bidding, price formation mechanisms, circulation systems, etc., which have a wide and profound
impact on the development of the medical device industry. Affected by the COVID-19 pandemic, the foreign economic environment
has been relatively sluggish, which may lead to medical budget cuts, and the price sensitivity of medical products has increased,
resulting in a risk of further compressing the operating profits. If the Company fails to adapt to profound changes in industry policies
in a timely manner, it may have an impact on the Company’s operations.
5. Risk of not receiving reimbursement for the Heyuan Winner Medical Investment Project 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, theAgreement on Investment and Construction of Medical Combo Kits and Cotton Household
Products 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 Investment and Construction Agreement of Medical Combo Kits and Cotton Household Products
Production Project, and the People’s Government of the Zijin County shall compensate the Company for economic losses of RMB
550 million, with 50% to be paid by the People’s Government of Zijin County by December 31, 2019 and 50% by February 29, 2020.
As of the disclosure date of the report, the Company has received a land transfer deposit of RMB 3 million and a compensation payment
of RMB 319 million returned by the People’s Government of Zijin County. There is a risk that the remaining amount may not be
received on time in accordance with the Award. The Company is currently closely following up on the subsequent payment plan of the
People’s Government of Zijin County, Heyuan City.
6. Risks of proceeds projects and countermeasures
The Company plans to allocate the proceeds from this issuance to the construction projects of high-end dressing production lines,
marketing network, R&D Center and digital management system. The development progress and operation of such projects will
contribute to the Company’s development and profitability in the next few years.
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Full Text of 2022 Semi-annual Report of Winner Medical Co., Ltd.
XII. Registration forms for receptions of surveys, communication, interviews and other
activities during the reporting period
Applicable □ Not applicable
Main contents of
Basic
discussions and
Time Location Method Types of objects Objects information
documents
index of surveys
provided
85 investors,
For details,
Headquarter including Business
Telephone please refer to
January 07, 2022 conference Institutions Rongtong Fund, overview and
communication SZSE Interactive
rooms Alpha Fund and operation
Ease
Fullgoal Fund
102 investors,
For details,
Headquarter including GF Business
February 08, Telephone please refer to
conference Institutions Fund, overview and
2022 communication SZSE Interactive
rooms ChinaAMC, operation
Ease
Bosera Funds
18 investors,
For details,
including Business
February 28, Guojin Securities Telephone please refer to
Institutions Springs Capital, overview and
2022 Strategy Meeting communication SZSE Interactive
Minghe operation
Ease
Investment
37 investors,
For details,
Huachuang including Business
Telephone please refer to
March 02, 2022 Securities Institutions Fullgoal Fund, overview and
communication SZSE Interactive
Strategy Meeting GF Fund, ABC- operation
Ease
CA Fund
Changjiang 47 investors,
Securities & including
For details,
Orient Securities ChinaAMC, Business
Telephone please refer to
March 04, 2022 Strategy Meeting Institutions Invesco Great overview and
communication SZSE Interactive
and UBS Wall Funds, operation
Ease
telephone China Southern
research Fund
For details,
Webcast FY2021 please refer to
April 22, 2022 Other Other Online investor
platform operation SZSE Interactive
Ease
79 investors, For details,
Headquarter Business
Telephone including please refer to
April 26, 2022 conference Institutions overview and
communication BlackRock, PAG SZSE Interactive
rooms operation
Fund, UBS Ease
35 investors,
including China For details,
Headquarter FY2021
Telephone Universal Asset, please refer to
April 27, 2022 conference Institutions performance
communication Aegon-industrial SZSE Interactive
rooms communication
Fund, BOCOM Ease
Schroders
9 investors,
including Huafu For details,
Headquarter FY2021
Telephone Fund, BOC please refer to
April 28, 2022 conference Institutions performance
communication Investment, SZSE Interactive
rooms communication
Guolian Ease
Securities
2 investors, For details,
Headquarter FY2021
including China please refer to
April 29, 2022 conference Field surveys Institutions performance
Merchants SZSE Interactive
rooms communication
Securities Ease
Business For details,
All online
May 10, 2022 Interactive Ease Other Other overview and please refer to
investors
operation SZSE Interactive
49
Full Text of 2022 Semi-annual Report of Winner Medical Co., Ltd.
Ease
84 investors,
including
For details,
Headquarter Invesco Great
Telephone please refer to
May 19, 2022 conference Institutions Wall Funds, Company M&A
communication SZSE Interactive
rooms China Southern
Ease
Fund, Great Wall
Fund
For details,
Headquarter Various Business
please refer to
May 27, 2022 conference Field surveys Individual individual overview and
SZSE Interactive
rooms investors operation
Ease
60 investors,
including
For details,
Headquarter Perseverance
Telephone please refer to
June 09, 2022 conference Institutions Asset, Aegon- Company M&A
communication SZSE Interactive
rooms industrial Fund
Ease
and King Time
Investment
50
Full Text of 2022 Semi-annual Report of Winner Medical Co., Ltd.
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 Meeting resolutions
proportion
Proposal on the
, Proposal on
shareholders in
shareholders the Plan on the
2021
Profit Distribution
for 2021, 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
There were no changes in the directors, supervisors and senior management of the Company during the reporting period, which can
be found in the Annual Report 2021.
III. Profit distribution and share capital increase from capital surplus during the reporting
period
□ Applicable Not applicable
The Company plans not to distribute cash dividends, send bonus shares or increase capital by capital reserve for the half-year.
IV. Implementation of the Company's equity incentive plan, employee stock ownership plan
or other employee incentive measures
Applicable □ Not applicable
1. Share Incentive
On November 27, 2020 and December 15, 2020, the Company held the 15th meeting of the second board of directors and the 6th
extraordinary general meeting of shareholders in 2020 respectively, deliberated and passed the Proposal on the Company's Restricted
Stock Incentive Plan in 2020 (Draft) and Its Abstract and related matters. The general meeting of shareholders authorized the board of
directors to determine the grant date of restricted stocks, and relevant matters which is necessary to grant restricted shares to the
incentive object and go through the procedures for granting restricted shares when the incentive object meets the conditions. For details,
please refer to relevant announcements disclosed by the Company on the website (http://www.cninfo.com.cn) on December 16, 2020
and November 30, 2020.
On December 18, 2020, the Company held the 17th meeting of the second board of directors and the 11th meeting of the second board
of supervisors respectively, deliberated and passed the Proposal on Matters Related to the Adjustment of the Restricted Stock Incentive
Plan in 2020 and the Proposal on the First Grant of Restricted Stocks to the Incentive Objects, and determined that December 18, 2020
will be the grant date of the incentive plan, 5.833 million restricted shares will be granted to 1,036 eligible incentive objects. For details,
please refer to relevant announcement disclosed by the Company on the website (http://www.cninfo.com.cn) on December 22, 2020.
On April 20, 2022 and May 13, 2022, the Company held the sixth meeting of the third session of the Board of Directors and the annual
general meeting of 2021, respectively to review and approve the Proposal on the revocation of some of the granted restricted shares
that have not yet vested. As the Company did not meet the performance evaluation target in 2021 and some of the incentive targets are
no longer qualified for the incentive, the Company revoked a total number of 3,336.6925 restricted shares.
2. Implementation of Employee Stock Ownership Plan
□ Applicable Not applicable
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Full Text of 2022 Semi-annual Report of Winner Medical Co., Ltd.
3. Other Employee Incentive Measures
□ Applicable Not applicable
52
Full Text of 2022 Semi-annual Report of Winner Medical Co., Ltd.
Section V Environment 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
Names of
main Pollutant
Company Distributio
pollutants Number of Emission emission Total Emissions
or Emission n of Total
and discharge concentrati standards emissions beyond
subsidiary mode discharge emissions
characterist outlets on implement approved standards
name outlets
ic ed
pollutants
Winner NOX: NOX: Not
Boiler 6.2mg/m 20mg/m
Medical PM, SO2, 2.051T, 13.28T/a, exceeding
/ 1 discharge <3mg/m 50mg/m
(Chongyan NOX SO2: SO2: 3.32 the
outlet 134mg/m 200mg/m
g) Co., Ltd. 0.048T T/a standard
7.6, 6-9,
Winner COD: COD: Not
PH, COD, Sewage 52mg/L, 80mg/L,
Medical Direct 10.04T, 57.6T/a, exceeding
BOD, 1 discharge 12.5mg/L, 20mg/L,
(Chongyan discharge NH3-N: NH3-N: the
NH3-N, SS outlet 1.34mg/L, 10mg/L,
g) Co., Ltd. 0.233T 7.27 T/a standard
9mg/L 50mg/L
Winner NOX: NOX:, Not
Boiler 3.3mg/m 20mg/m
Medical PM, SO2, 1.636T, exceeding
/ 1 discharge 4mg/m 50mg/m SO2: 未许
(Jiayu) Co., NOX SO2: the
Ltd.
outlet 152mg/m 200mg/m
0.043T 可 standard
8.2, 6-9,
Winner COD: COD: Not
PH, COD, Sewage 48mg/L, 100mg/L,
Medical Direct 4.33T, 34.29T/a, exceeding
BOD, 1 discharge 14.2mg/L, 20mg/L,
(Jiayu) Co., discharge NH3-N: NH3-N: the
NH3-N, SS outlet 0.15mg/L, 15mg/L,
Ltd. 0.04T 1.19T/a standard
11mg/L 70mg/L
Winner 19mg/m NOX: Not
1#2# boiler 20mg/m NOX:
Medical PM, SO2, <3 mg/m 6.48T, exceeding
/ 2 discharge 50 mg/m 23.52T/a,
(Huanggan NOX 42/117mg/ SO2: the
outlet 200mg/m SO2:
g) Co., Ltd. m 0.807T standard
7.8, 6-9,
Winner COD: COD: Not
PH, COD, Sewage 74mg/L, 500mg/L,
Medical Indirect 32.02T, 90T/a, exceeding
BOD, 1 discharge 14.8mg/L, 300mg/L,
(Huanggan discharge NH3-N: NH3-N: the
NH3-N, SS outlet 1.07mg/L, 45mg/L,
g) Co., Ltd. 0.51T 13.5 T/a standard
10mg/L 400mg/L
Winner NOX: NOX: Not
Boiler 2.8mg/m 20mg/m
Medical PM, SO2, 1.94T, 16.235T/a, exceeding
/ 1 discharge <3mg/m 50mg/m
(Tianmen) NOX SO2: SO2: the
outlet 100mg/m 200mg/m
Co., Ltd. 0.118T 4.059T/a standard
7.6, 6-9,
Winner COD: COD: Not
PH, COD, Sewage 64mg/L, 400mg/L,
Medical Indirect 9.94T 132.52T/a, exceeding
BOD, 1 discharge 19.2mg/L, 150mg/L,
(Tianmen) discharge NH3-N: NH3-N: the
NH3-N, SS outlet 1.18mg/L, 30mg/L,
Co., Ltd. 0.095T 16.57 T/a standard
16mg/L 250mg/L
Winner Not
Medical PM, SO2, No boiler, exceeding
/ / / / / /
(Wuhan) NOX no license the
Co., Ltd. standard
PH, COD, 7.6,
Winner 6-9, COD: COD: Not
BOD, Sewage 183mg/L,
Medical Indirect 500mg/L, 20.14T, 61T/a, exceeding
NH3-N, 1 discharge 39.8mg/L,
(Wuhan) discharge 300mg/L, NH3-N: NH3-N: the
chromaticit outlet 7.66mg/L,
Co., Ltd. 45mg/L, 64 2.01T 6.1T/a standard
y 7
Winner PM, SO2, Boiler 1.9mg/m 20mg/m NOX: NOX: Not
/ 1
Medical NOX discharge <3 mg/m 50mg/m 1.057T, 10.83T/a, exceeding
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Full Text of 2022 Semi-annual Report of Winner Medical Co., Ltd.
(Jingmen) outlet 75mg/m 150mg/m SO2: SO2: the
Co., Ltd. 0.046T 3.11T/a standard
8.1, 6-9,
Winner COD: COD: Not
PH, COD, Sewage 43mg/L, 200mg/L,
Medical Indirect 5.696T, 19.48T/a, exceeding
BOD, 1 discharge 7.0mg/L, 50mg/L,
(Jingmen) discharge NH3-N: NH3-N: the
NH3-N, SS outlet 0.54mg/L, 20mg/L,
Co., Ltd. 0.570T 1.95T/a standard
12mg/L 100mg/L
Yichang
Not
Winner Boiler 2.8mg/m 20mg/m
PM, SO2, exceeding
Textile / 1 discharge <3 mg/m 50mg/m Unlicensed Unlicensed
NOX the
Weaving outlet 135mg/m 150mg/m
standard
Co., Ltd.
Yichang 7.6, 6-9,
No Not
Winner PH, COD, Sewage 131mg/L, 500mg/L,
Indirect production exceeding
Textile BOD, 1 discharge 39.3mg/L, 300mg/L, Unlicensed
discharge wastewater the
Weaving NH3-N, SS outlet 12.5mg/L, 45mg/L,
discharge standard
Co., Ltd. 45mg/L 400mg/L
Construction and operation of pollution prevention and control facilities
In order to ensure the normal operation of environmental protection facilities, the Company selects advanced, mature and technically
feasible environmental protection facilities and treatment processes, formulates environmental protection responsibility system,
emergency management system, safe operation rules of environmental protection facilities, etc., assigns special personnel to be
responsible for the operation and maintenance of environmental protection facilities, formulates maintenance plan, makes operation
records and daily monitoring of environmental protection facilities. The environmental protection facilities operate normally, and all
the pollutant discharge indexes meet the requirements of pollutant discharge permit. Relevant information is published in the
emission permit management platform, and all branches submit emission permit execution reports as required.
All companies have built general waste storage sites and hazardous waste rooms in accordance with regulations. The general solid
waste is managed in a ledger; the hazardous waste is managed throughout the process, and an agreement is signed with a third-party
company to entrust the disposal of the waste, and the waste is regularly transferred and entrusted to the third party for treatment.
Environmental impact assessment of construction projects and other administrative permits for environmental protection
Winner Medical (Chongyang) Co., Ltd.: "Medical absorbent gauze series product line" obtained the EIA approval from
Environmental Protection Bureau of Chongyang County on September 21, 2005, and passed the environmental protection acceptance
after completion of Environmental Protection Bureau of Chongyang County on August 22, 2008; "the project of sterile packaging
and sterile production line" obtained the EIA approval (C.H.S.H [2013] No.07) from Environmental Protection Bureau of Chongyang
County on March 29, 2013, and passed the environmental protection acceptance after completion of Environmental Protection
Bureau of Chongyang County on June 26, 2014; "Qingshan plant construction project" went through the environmental impact
assessment in July 2014 and obtained EIA approval from Environmental Protection Bureau of Chongyang County on November 18,
2015; the new 6390M2 workshop project" of Xianning Winner Medical (Chongyang) Co., Ltd. completed the declaration of
registration form on May 17, 2017.
Winner Medical (Jiayu) Co., Ltd.: "Absorbent cotton project with annual production of 800 tons " obtained the EIA approval from
Environmental Protection Bureau of Jiayu County on March 20, 2013, and passed the environmental protection acceptance after
completion of Environmental Protection Bureau of Jiayu County on September 20, 2014. "Winner Purcotton construction project"
obtained the EIA approval (J.H.S [2014] No.083) from the Environmental Protection Bureau of Jiayu County on December 25, 2014,
and passed the environmental protection acceptance after completion of Environmental Protection Bureau of Jiayu County on
September 28, 2017. The environmental impact assessment report of the Winner Industrial Park (Jiayu) Project project was approved
by Xianning Ecological Environment Bureau on March 15, 2021 (X.H.S [2021] No. 21), and construction is currently underway.
Yichang Winner Textile Weaving Co., Ltd.: "Medical gauze project with an annual output of 90 million meters" obtained the EIA
approval from Environmental Protection Bureau of Zhijiang City on December 19, 2014, and passed the environmental protection
acceptance after completion of Environmental Protection Bureau of Zhijiang City on October 14, 2015.
Winner Medical (Tianmen) Co., Ltd.: "Cotton spun laced non-woven fabric and medical dressing products production project"
obtained the EIA approval (T.H.H. [2015] No.35) from Environmental Protection Bureau of Tianmen City on March 11, 2015. At
present, phase I of the project has been completed and passed the environmental protection acceptance after completion of
Environmental Protection Bureau of Tianmen City on January 25, 2017; the independent acceptance of phase II will be completed on
May 10, 2020. "Medical dressing production line automation upgrading and transformation project" obtained the EIA approval
(T.H.H. [2016] No.23) from Environmental Protection Bureau of Tianmen City on January 19, 2016, and completed the independent
acceptance on March 23, 2018. "Medical Products Sterilization Center Project" received the approval of the Tianmen Ecological
Environment Bureau on January 17, 2022 (T.H.H. [2022] No. 4), and is currently under acceptance.
Winner Medical (Jingmen) Co., Ltd.: "30 million meters per year medical gauze bleaching and refining production line expansion
project" obtained the EIA approval from the Environmental Protection Bureau of Jingmen City on October 18, 1999, and passed the
environmental protection acceptance after completion of Environmental Protection Bureau of Jingmen City on December 14, 2001;
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"renovation and expansion project of gauze pad, gauze sheet and shrinkage bandage" obtained the EIA approval from Environmental
Protection Bureau of Jingmen City on September 23, 2003 and passed the environmental protection acceptance after completion of
Environmental Protection Bureau of Dongbao District, Jingmen City on August 3, 2005; "degreasing and bleaching medical gauze
project with annual production of 1,500 tons" obtained the EIA approval from Environmental Protection Bureau of Dongbao District,
Jingmen City on April 5, 2006, and accepted together with the construction project of Purcotton on September 27, 2017; "Winner
Purcotton construction project" obtained the EIA approval (D.H.H [2016] No.138) from Environmental Protection Bureau of
Jingmen City on October 19, 2016, and passed the environmental protection acceptance of Environmental Protection Bureau of
Jingmen City on September 27, 2017; the expansion project of absorbent gauze production line (Purcotton phase II expansion
project) obtained the EIA approval (J.H.S. [2020] No.112) from Jingmen Municipal Bureau of Ecology and Environment on
December 24, 2020.
Winner Medical (Huanggang) Co., Ltd.: "cotton spun laced non-woven fabric production project (phase I and phase II)" obtained the
EIA approval (E.H.H. [2011] No.628) from the Environmental Protection Department of Hubei Province on August 5, 2011; the
phase I project passed the environmental protection acceptance after completion (E.H.H.[2012] No.348) of Environmental Protection
Department of Hubei Province on May 8, 2012. The phase II project obtained the EIA approval (H.H.H. [2015] No.304) from
Environmental Protection Bureau of Huanggang City on December 31, 2015, and the phase I project passed the environmental
protection acceptance after completion of Environmental Protection Bureau of Huanggang City on January 24, 2017; "the new
project of Purcotton distribution center" obtained the EIA approval (H.H.H. [2016] No.114) from Environmental Protection Bureau
of Huanggang City on June 27, 2016, and the independent acceptance of the project was completed on October 10, 2018; the "boiler
transformation project" obtained the EIA approval (H.H.H. [2018] No.20) from Environmental Protection Bureau of Huanggang City
on January 29, 2018, and completed self acceptance on November 14, 2019; the "foam coiled material production line project
(expansion)" obtained the EIA approval (H.H.H. [2018] No.26) from Environmental Protection Bureau of Huanggang City on
February 5, 2018, and completed the project's independent acceptance on October 8, 2018; the "construction project of high-end
dressing production line" obtained the EIA approval (H.H.H. [2018] No.178) from Environmental Protection Bureau of Huanggang
City on November 6, 2018, and the project is currently in the construction period and has not been completed; the "upgrading and
transformation project of medical protective products" obtained the EIA approval (H.H.H. [2020] No.109) from Huanggang
Municipal Bureau of Ecology and Environment, and completed the project independent acceptance on October 19, 2021.
Winner Medical (Wuhan) Co., Ltd.: "Hubei Winner Medical Co., Ltd. cotton spun laced nonwovens and products production
project" obtained the EIA approval (X.S.P.Zi [2017] No.68) from Administrative Approval Bureau of Xinzhou District, Wuhan City
on July 12, 2017 (see Annex 3 for the approval), and completed the independent acceptance of phase I on January 18, 2020; "R & D
center construction project" obtained the EIA approval (X.S.P.Zi [2018] No.193) from Administrative Approval Bureau of Xinzhou
District, Wuhan City on December 24, 2018, but the project has not started construction yet; "new electron accelerator irradiation
device project" obtained the EIA approval (W.H.G. [2018] No.5) from Wuhan Environmental Protection Bureau on January 15,
2018. The project will be built in two phases, with the independent acceptance of phase I completed on May 15, 2020, and the
independent acceptance of phase II completed on Nov 19, 2021. The environmental impact report form of "Upgrading and
transformation project of medical protective products" obtained the approval from Administrative Approval Bureau of Xinzhou
District on May 7, 2021 ([2021] No. 95), however, the project is not completed. "Winner Medical Phase II Expansion Project" was
approved by Wuhan Ecological Environment Bureau and Wuhan Administrative Approval Bureau on June 21, 2022 ([2022] No. 27),
the project is currently under construction.
Emergency plan for environmental emergencies
In order to further improve the emergency management system of environmental pollution accidents, improve the ability of branches
and subsidiaries of Winner Medical Co., Ltd. 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. The branches
and subsidiaries of Winner Medical Co., Ltd. have prepared the emergency plans for environmental accidents according to the
requirements, sent them to the local environmental protection authorities for record, and regularly conducts emergency drills for
environmental emergencies.
Environmental self-monitoring scheme
All subsidiaries 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 online monitoring systems of the subsidiaries involved in the online monitoring of production
wastewater discharge 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 subsidiary is made public on the national pollutant discharge permit management platform.
Administrative penalties imposed for environmental issues during the reporting period
Company or Reason Violation Result Impact on the Corrective measure
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subsidiary name production and
operation of the
listed company
N/A N/A N/A N/A N/A N/A
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 conducts monthly statistical analysis of carbon emissions of its subsidiaries, establishes a carbon emission
management system and carries out carbon footprint accounting for some products.
Other information related to environmental protection
None
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.
Environmental compliance of the Company during the reporting period
1. Winner Medical (Jiayu) Co., Ltd.
It is a key wastewater discharge enterprise, and the wastewater mainly includes domestic sewage and production wastewater.
Domestic sewage (including canteen wastewater) is first treated in oil separation tank and septic tank, and then mixed with
production wastewater to enter the sewage treatment station in the plant. The sewage treatment station adopts "hydrolysis
acidification + biological contact oxidation method" for treatment, and then discharged from the drainage outlet through pipeline
after reaching the standard. The wastewater has been installed with on-line monitoring. The sewage treatment station passed the
environmental protection acceptance after completion of Environmental Protection Bureau of Jiayu County on September 28, 2017,
implementing the limit value of Discharge Standard of Water Pollutants for Textile Dyeing and Finishing Industry (GB4287-2012).
The sewage plant’s structure is concrete structure, with a service life of 20 years and environmental protection equipment for 10
years.
Solid waste is mainly domestic waste of employees; impurities (cotton residue, cotton dust and cotton batting) generated in the
production process and cotton dust collected by dust removal equipment; the leftover materials produced in the slicing process;
sludge from sewage treatment station; the hazardous waste generated is chemical material packaging barrel. For general solid wastes,
disposal agreements are signed with disposal units, and for hazardous wastes, disposal agreements are signed with qualified disposal
units.
2. Winner Medical (Chongyang) Co., Ltd.
It is a key wastewater discharge enterprise. The wastewater of the project mainly includes domestic sewage, production wastewater
and experimental wastewater, etc. The production wastewater is discharged into the wastewater treatment station (hydrolysis
acidification + biological contact oxidation method), and the treatment reaches the standard; the experimental wastewater is
hazardous waste and has been entrusted to a third party company for treatment. The domestic sewage of the employees and
production wastewater generated by the enterprise are directly discharged into the sewage treatment plant and discharged after
reaching the standard. Online monitoring of wastewater has been installed, and the sewage station completed independent acceptance
on March 20, 2017, implementing the limit value of Discharge Standard of Water Pollutants for Textile Dyeing and Finishing
Industry (GB4287-2012) The sewage plant’s structure is concrete structure, with a service life of 20 years and environmental
protection equipment for 10 years.
Solid waste mainly includes office and domestic waste of employees, dust, leftover materials and unqualified products produced in
the production process. 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 Textile Weaving Co., Ltd.:
No production wastewater discharge, domestic wastewater enters the municipal pipe network, and clean energy natural gas is used as
fuel. Environmental monitoring is conducted as required.
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
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completed independent acceptance on March 23, 2018, implementing the limit value of Discharge Standard of Water Pollutants for
Textile Dyeing and Finishing Industry (GB4287-2012). The sewage plant’s structure is concrete structure, with a service life of 20
years and environmental protection equipment for 10 years.
For General solid waste and domestic waste, treatment agreements are signed with disposal units. Hazardous solid waste is mainly
chemical material packaging barrels, which are recycled by raw material suppliers, and no hazardous waste is transferred for
disposal.
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
monitoring of wastewater has been installed, and the pollutant discharge permit has been obtained. It is to be accepted. It implements
the limit value of Discharge Standard of Water Pollutants for Textile Dyeing and Finishing Industry (GB4287-2012). The sewage
plant’s structure is concrete structure, with a service life of 20 years and environmental protection equipment for 10 years.
For domestic waste and general solid wastes, disposal agreements are signed with disposal units, and for hazardous wastes, transfer
agreements are signed with third-party disposal units.
6. Winner Medical (Huanggang) Co., Ltd.
It is a key wastewater discharge enterprise, and the wastewater discharged by the enterprise is mainly production wastewater and
domestic sewage. The wastewater mainly comes from spun lace forming process, degreasing / bleaching process and soft water
preparation process. Most of the wastewater from spun lace forming process is reused for production after being treated by water
treatment circulation system, while a small part of the wastewater are discharged into the self-built sewage station with that from
degreasing / bleaching process, and then discharged after being treated by "hydrolysis acidification + biological contact oxidation"
and reaching the standard. After simple treatment in septic tank, domestic sewage will be treated in self-built sewage station. Online
monitoring of wastewater has been installed, and the sewage station passed the environmental protection acceptance after completion
of Environmental Protection Bureau of Huanggang City on January 24, 2017, implementing the level III standard limit in Table 4 of
Integrated Wastewater Discharge Standard (GB8978-1996). The sewage plant’s structure is concrete structure, with a service life of
20 years and environmental protection equipment for 10 years.
The solid wastes of the project include general solid wastes, other solid wastes and hazardous solid wastes. The general solid wastes
are mainly cotton impurities, leftover materials, defective products, boiler coal cinders, sludge from sewage treatment facilities, etc.
generated in the production process. Other solid wastes are domestic wastes generated from office and life. Among them, cotton
impurities, leftover materials and defective products are sold for comprehensive utilization; after the sludge is dehydrated, it will be
treated by the environmental sanitation department together with the domestic waste. Hazardous solid wastes are mainly chemical
waste packaging barrels, which are recycled by raw material suppliers, 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 wastewater of the project mainly includes preparation wastewater, spun laced
wastewater, degreasing and bleaching wastewater and domestic water, etc. The wastewater discharge of the project is 2126.93t/d
after the completion of phase I, 4067.11t/d after the completion of phase II and 6004.5t/d after the completion of phase III. The
wastewater is treated by the process of "hydrolysis acidification + anaerobic + biological contact oxidation method". Online
monitoring of wastewater has been installed, and the phase I project of the sewage station completed independent acceptance on
January 7, 2020, implementing the level III standard limit in Table 4 of Integrated Wastewater Discharge Standard (GB8978-1996).
The sewage plant’s structure is concrete structure, with a service life of 20 years and environmental protection equipment for 10
years.
The solid wastes of the project 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 18597-2001), 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. 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
domestic wastewater of employees is treated by the existing three-stage septic tank and then enters the comprehensive sewage
treatment station together with the pretreated production wastewater. The station adopts an air flotation + filtration process and
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discharges treated water into the municipal sewage treatment plant. The exhaust gas from compound preparation, pre-vulcanization
tank, latex parking tank, latex dipping drying and post-vulcanization is collected and discharged after treatment by exhaust gas
treatment system (water spray + dehumidification + activated carbon adsorption).
General industrial solid waste is waste rubber, unqualified products, waste packaging shall be taken up by the latex supplier for
regular recycling, sludge and domestic waste shall be taken up by the local sanitation department for unified cleaning and disposal.
Hazardous wastes are waste resin and waste activated carbon. They shall be collected centrally and entrusted to units with
corresponding hazardous waste treatment qualifications for disposal.
9. Zhejiang Longterm Medical Technology Co., Ltd.
Cleaning wastewater, concentrated water for pure water preparation and domestic sewage are discharged. Domestic sewage is
pretreated by the septic tank in the factory, and then piped to Deqing Hengfeng Sewage Treatment Co., Ltd for centralized treatment
with the concentrated water for pure water preparation and domestic sewage. Process exhaust gas is treated by one set of photo-
oxidation catalytic treatment equipment and then discharged through a 15m exhaust funnel. 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.
Summary: In the first half of 2022, the above-mentioned enterprises complied with relevant environmental protection laws and
regulations, discharged according to the emission outfalls included in the emission permits, conducted monitoring and ledger records
as required by the emission permits, and submitted emission permit execution reports as required by the emission permits.
II. Social responsibility
In 2021, Winner Medical has completed the gorgeous transformation from an industry leader to a capital newcomer. While winning
the favor of the capital market, the Company has gained wide recognition from the public for its responsible image, and has continued
to forge ahead with its vision of being "the most trusted medical and lifestyle products company". In the face of the new journey of the
next 30 years, Winner Medical will continue to work with the nation and the times, adhere to the guiding principle of "build a strong
nation with industry and technology", contribute to the prosperity and wealth of society with corporate development, and empower the
sustainable development of society with corporate responsibility.
1. Caring for health
Looking back on the past thirty years of progress and growth, the Company has always adhered to the principle of "quality first, product
safety first, social responsibility first". As a benchmark enterprise in the domestic medical consumables industry, the Company serves
market demands and clinical & terminal needs. Driven by R & D innovation, Winner Medical constantly improves its production lines,
takes the initiative to perform the duty of "medical consumption expert", and cares for the health of the country.
2. Focus on excellent products
Beginning with the pure dream of "bring people to return a natural, healthy and comfortable life" and the pure belief of "the
incomparable reverence and infinite love of cotton", Purcotton built its brand with its exclusive cotton spun laced non-woven fabric
from the start. With "medicine cares life, cotton cares health" as the brand proposition, Purcotton aims to bring more consumers better
natural health products, so as to improve the accessibility of quality products.
Continuous research and development exploration yield fruitful results. An innovative waterless process and gauze atomized washing
process was used to achieve zero emissions of water-washed products. Compared with the 1:10 process bath ratio of traditional gauze
washing products, the bath ratio of atomized washing process can reach 1:0.6, significantly optimizing the existing washing process,
saving water resources and reducing the discharge of sewage. Consumers are offered more cost-effective, safer products.
3. Green development
To meet the development trend of the times and respond to the national "carbon peaking and carbon neutrality" action, the Company
actively participates in the training and study of low carbon management and emission reduction strategies, and strives to do its bid to
achieve carbon neutrality. The Company actively adjusts the energy structure and industrial structure, vigorously promotes green office,
creates green factories, and practices the "carbon peaking and carbon neutrality" action in multiple ways, striving to achieve the two
goals 3 and 10 years ahead of the national target, respectively.
4. Public welfare
In the first half of 2022, the Company also shouldered its corporate responsibility. To support the epidemic prevention work in
universities, the Company has donated epidemic prevention materials nearly worth RMB8 million to Shanghai Jiaotong University,
Fudan University, Shanghai International Studies University, Xi'an Jiaotong University and other universities across the country to
lend a hand; in February, Purcotton donated materials worth more than 1.1 million yuan to the China Women's Development
Foundation, including 8,000 pieces of maternity kits, sanitary pads, cotton diapers. In May, the Company donated 100 cases of medical
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surgical masks and cooling vests, cool wipes and other materials to 55 hospitals in 25 cities across the country, and sent more than
2,300 nurses across the country a Nurse's Daycare gift box.
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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
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
Basic Trial result Implementatio
Amount Whether to Progress of
information of and influence n of litigation Date of Disclosure
involved form estimated litigation
litigation of litigation (arbitration) disclosure index
(RMB 10,000) liabilities (arbitration)
(arbitration) (arbitration) judgment
Winner The People's [Case No.: As of the
Medical v. Government (2019) G.G.Z disclosure date
People's of Zijin Zi No. 095] of the report,
Government County has The ruling the Company
55,565.53 No
of Zijin not yet paid confirmed that has received
County, attorney's fees, the original the land
arbitration litigation of Investment transfer
case of RMB2,653,30 Agreement deposit of
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contract 0 and the was RMB 3
dispute [Case remaining terminated, million and
No.: (2019) RMB231 and the compensation
G.G.Z Zi No. million to the People's of RMB 319
095] Company in Government million
accordance of Zijin returned by the
with the County had to People's
award, and the bear the Government
Company has lawyer's fees, of Zijin
applied to the legal costs and County. The
court for other expenses Company has
enforcement totaling RMB handed over
and has been 2.6553 the project
accepted by million, return land, above-
the court. RMB 3 ground
million of land buildings,
transfer equipment and
deposit to the facilities and
Company, and relevant
compensate supporting
for economic materials to
losses of RMB the People's
550 million. Government
The land, of Zijin
above-ground County.
buildings,
equipment and
facilities and
relevant
supporting
materials of
Heyuan
Winner
investment
and
construction
project were
handed over to
the People's
Government
of Zijin
County. There
will be no
adverse impact
on the
Company.
On June 2, If the lawsuit
2020, the does not
Tianmen Reexamination support the
Winner, and plaintiff's
Shenzhen Invalidation claim, the
Purcotton, Department of patent is
Huanggang the Patent finally found
Winner v. Office of to be invalid.
China China The reason for
National National the patent
0 No N/A
Intellectual Intellectual invalidation
Property Property decision is not
Administratio Administration that the
n, issued the Company and
administrative Decision on / or the patent
dispute case of Examination infringes the
patent of Invalidation rights of
invalidation Request, others.
which decided Therefore, the
to declare the Company can
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patent right of still use the
“production technology
method of and will not
cotton non- have a
woven significant
medical adverse impact
dressings” on the normal
(Patent No. production and
ZL200510033 operation of
147.1, valid the Company.
until February
6, 2025)
invalid. On
August 26,
2020, Tianmen
Winner,
Shenzhen
Purcotton and
Huanggang
Winner filed a
lawsuit with
the Beijing
Intellectual
Property Court
under the
Patent Law
regarding the
invalidation
decision of the
patent right,
requesting the
revocation of
the
invalidation
decision of the
patent right.
On August 28,
2020, Beijing
Intellectual
Property Court
issued the
Notice of
Acceptance of
Administrative
Case. On
December 27,
2021, the court
of the first
instance
rejected the
plaintiff's
request. On
January 14,
2022, the
plaintiff filed a
request for a
second
instance. On
April 21,
2022, the
second trial
has been held.
As of the date
of disclosure
of this report,
the court has
not yet
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announced the
result of the
second trial.
Other litigation matters
Applicable □ Not applicable
Basic Trial result Implementatio
Amount Whether to Progress of
information of and influence n of litigation Date of Disclosure
involved form estimated litigation
litigation of litigation (arbitration) disclosure index
(RMB 10,000) liabilities (arbitration)
(arbitration) (arbitration) judgment
In progress
Summary of according to
small lawsuits the
in which the litigation/arbitr
Company or ation process,
No significant
its subsidiaries some cases Executed
impact on the
are plaintiffs have not yet according to
6,651.5 No Company's
that do not been litigation/arbitr
production and
meet the concluded, and ation process
operation
criteria for the concluded
disclosure of cases are
material executed
litigation according to
the process
In progress
Summary of according to
small lawsuits the
in which the litigation/arbitr
Company or ation process,
No significant
its subsidiaries some cases Executed
impact on the
are defendants have not yet according to
3,394.2 No Company's
that do not been litigation/arbitr
production and
meet the concluded, and ation process
operation
disclosure the concluded
standards for cases are
material executed
litigation according to
the process
IX. Punishment and rectification
□ Applicable Not applicable
X. Credit conditions of the Company, its controlling shareholders and actual controllers
□ Applicable Not applicable
XI. Major related transactions
1. Related transactions related to daily operation
□ Applicable Not applicable
No related transactions related to daily operation of the Company during the reporting period.
2. Related transactions arising from the acquisition or sale of assets or equity
□ Applicable Not applicable
No Related transactions arising from the acquisition or sale of assets or equity of the Company during the reporting period.
3. Related transactions of joint foreign investment
□ Applicable Not applicable
No related transactions of joint foreign investment of the Company during the reporting period.
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4. Related claims and debts
□ 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 related transactions
□ Applicable Not applicable
No other major related 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.
(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
The Company has no significant guarantees during the reporting period.
3. Major contracts for daily operation
Unit: yuan
Any
significant
Amount of
change in Any
sales Cumulative
Name of the Collection the significant
Name of the Total Progress of revenue amount of
other party status of conditions risk that may
Company to contract contract recognized sales
to the accounts that may hamper the
the contract amount performance during the revenue
contract receivable affect the performance
reporting recognized
performance of contracts
period
of major
contracts
4. Other major contracts
□ Applicable Not applicable
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No other major contracts of the Company during the reporting period.
XIII. Description of other important events
Applicable □ Not applicable
In order to further enrich the product line, expand the business channels and improve the strategic layout, the Company has signed
the agreement to acquire 55% equity interest in Longterm Medical, 68.70% equity interest in Pingan Medical and 100% equity
interest in Guilin Latex with a total capital of RMB 1,929.4615 million during the reporting period, which has helped the Company
to grow into one of the most comprehensive enterprises in the domestic medical consumables product line.
XIV. Major events of subsidiaries
□ Applicable Not applicable
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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
capital
New issue Share increase
Quantity Proportion Other Subtotal Quantity Proportion
of shares donation from
reserved
funds
I.
290,438,84 290,495,32
Restricted 68.10% 56,475 56,475 68.11%
8 3
shares
1. State
shareholdin
g
2. State
legal
person
shareholdin
g
3. Other
domestic 56,475 56,475 56,475 0.01%
holdings
Where
in:
domestic
legal
person
shareholdin
g
Dome
stic natural
person 56,475 56,475 56,475 0.01%
shareholdin
g
4.
Foreign 290,438,84 290,438,84
68.10% 68.10%
shareholdin 8 8
g
Where
in: foreign
legal 290,438,84 290,438,84
68.10% 68.10%
person 8 8
shareholdin
g
Foreig
n natural
person
shareholdin
g
II.
136,053,46 （56,475 （56,475 135,996,98
Unrestricte 31.90% 31.89%
d shares
0 ） ） 5
1. RMB
136,053,46 （56,475 （56,475 135,996,98
common 31.90% 31.89%
share
0 ） ） 5
2.
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Foreign
shares
listed in
China
3/
Foreign
shares
listed
abroad
4. Other
III. Total
426,492,30 426,492,30
amount of 100.00% 100.00%
8 8
shares
Causes for change in shares
□ Applicable Not applicable
Approval of changes in shares
□ Applicable Not applicable
Transfer of share changes
□ Applicable Not applicable
Implementation progress of share repurchase
Applicable □ Not applicable
On September 17, 2021, the Company held the third meeting of the third session of the board of directors and the third meeting of the
third session of the supervisory board to consider and adopt the Proposal on the Share Repurchase Program, in which the Company
intends to use its funds of RMB300~500 million to repurchase shares of the Company for equity incentive or employee stock ownership
plan at a repurchase price not exceeding RMB116 per share. As of April 7, 2022, the Company repurchased 6,754,659 shares of the
Company by way of centralized competitive bidding trading through the special securities account for repurchase, accounting for
1.5838% of the total share capital of the Company, with the highest transaction price of RMB82.42 per share and the lowest transaction
price of RMB60.09 per share, for a total transaction amount of RMB499,991,560.55 (excluding transaction fees). The share repurchase
program has been implemented.
Implementation progress of reducing repurchased shares by centralized competitive bidding
□ Applicable Not applicable
Influence of share changes on the basic EPS, diluted EPS, net assets per share attributable to common shareholders of the company
and other financial indexes in the most recent year and the most recent period
□ Applicable Not applicable
Other information the company deems necessary or required by the securities regulatory authorities to disclose
□ Applicable Not applicable
2. Changes in restricted shares
Applicable □ Not applicable
Unit: share
Number of
Number of Number of Number of
shares released The proposed
Shareholder's restricted shares restricted shares restricted shares Reasons for
from restricted date of lifting the
name at the beginning increased in at the end of the restricted sale
sale in current restricted sale
of the period current period period
period
Winner Group Restricted shares September 17,
290,438,848 0 0 290,438,848
Limited before IPO 2023
100% unlocked
Senior
after six months
Fang Xiuyuan 0 0 30,000 30,000 management
from the date of
lock-up shares
expiration of
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term of office
100% unlocked
Senior after six months
Wang Ying 0 0 22,500 22,500 management from the date of
lock-up shares expiration of
term of office
100% unlocked
Senior after six months
Chen Huixuan 0 0 3,975 3,975 management from the date of
lock-up shares expiration of
term of office
Total 290,438,848 0 56,475 290,495,323 -- --
II. Securities issuance and listing
□ Applicable Not applicable
III. Number and shareholding of the Company's shareholders
Unit: share
Total number
Total number of preferred
of
Total number of common shareholders with voting
shareholders
shareholders at the end of 30,264 rights restored at the end of 0 0
holding
the reporting period the reporting period (if
special voting
any) (see Note 8)
shares (if any)
Shareholders holding more than 5% shares or top 10 shareholders
Number of Pledged, tagged or frozen
Number of Increase or Number of
shares held
shares held decrease shares held
Shareholder' Shareholder Shareholdin with
at the end of during the with limited Status of
s name nature g ratio unlimited Quantity
the reporting reporting sales shares
sales
period period conditions
conditions
Winner
Overseas
Group 68.10% 290,438,848 0 290,438,848 0
legal person
Limited
Beijing
Sequoia
Xinyuan
Domestic
Equity （964,847
non-state 6.61% 28,183,253 0 28,183,253
Investment
legal person ）
Center
(limited
partnership)
Xiamen
Leyuan
Domestic
Investment （709,502
non-state 3.97% 16,951,998 0 16,951,998
Partnership
legal person ）
(Limited
Partnership)
Xiamen
Yutong
Domestic
Investment （1,294,072
non-state 1.89% 8,071,363 0 8,071,363
Partnership
legal person ）
(Limited
Partnership)
Shenzhen
Capital State legal （1,890,700
1.55% 6,601,608 0 6,601,608
Group person ）
Co.,Ltd.
Xiamen Domestic
（772,901
Huikang non-state 1.14% 4,883,062 0 4,883,062
Investment legal person ）
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Partnership
(Limited
Partnership)
Xiamen
Zepeng
Domestic
Investment （431,800
non-state 0.58% 2,471,488 0 2,471,488
Partnership
legal person ）
(Limited
Partnership)
Industrial
Bank
Co.,Ltd -
Aegon-
industrial
New Vision
Flexible
Allocation Other 0.30% 1,275,682 1,275,682 0 1,275,682
Regular
Open-ended
Mixed
Initiating
Securities
Investment
Fund
China
Everbright
Bank Co.,
Ltd -
Xingquan
Business
Other 0.29% 1,223,740 1,223,740 0 1,223,740
Model
Preferred
Hybrid
Securities
Investment
Fund (LOF)
Hong Kong
Securities
Overseas
Clearing 0.26% 1,097,333 92,022 0 1,097,333
legal person
Company
Limited
Situation of strategic
investors or general legal
persons becoming the top
None
10 shareholders due to the
allotment of new shares (if
any) (see note 3)
Description of the above-
mentioned shareholder
None
association or concerted
action
Description of the above
shareholders involved in
entrusting / entrusted None
voting right and waiver of
voting right
Special Note on the
existence of repurchase
As of June 30, 2022, the Company repurchased 6,754,659 shares of the Company held in the "special
special accounts among the
securities account for the repurchase of Winner Medical Co., Ltd."
top 10 shareholders (see
Note 11)
Shareholding of top 10 shareholders with unlimited sales conditions
Shareholder's name Number of shares with unlimited sales conditions held at the end of the Share type
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reporting period Share type Quantity
Beijing Sequoia Xinyuan RMB
Equity Investment Center 28,183,253 common 28,183,253
(limited partnership) share
Xiamen Leyuan RMB
Investment Partnership 16,951,998 common 16,951,998
(Limited Partnership) share
Xiamen Yutong RMB
Investment Partnership 8,071,363 common 8,071,363
(Limited Partnership) share
RMB
Shenzhen Capital Group
6,601,608 common 6,601,608
Co.,Ltd.
share
Xiamen Huikang RMB
Investment Partnership 4,883,062 common 4,883,062
(Limited Partnership) share
Xiamen Zepeng RMB
Investment Partnership 2,471,488 common 2,471,488
(Limited Partnership) share
Industrial Bank Co.,Ltd -
Aegon-industrial New
RMB
Vision Flexible Allocation
1,275,682 common 1,275,682
Regular Open-ended
share
Mixed Initiating Securities
Investment Fund
China Everbright Bank
Co., Ltd - Xingquan RMB
Business Model Preferred 1,223,740 common 1,223,740
Hybrid Securities share
Investment Fund (LOF)
RMB
Hong Kong Securities
1,097,333 common 1,097,333
Clearing Company Limited
share
Agricultural Bank of China
Limited－Wanjia GEM RMB
two-year regular opening 999,952 common 999,952
of hybrid securities share
investment fund
Description of the
association or concerted
action between top 10
public shareholders with
unlimited sales conditions, None
and between top 10 public
shareholders with
unlimited sales conditions
and top 10 shareholders
Description of the top 10
common shareholders
participating in the
None
financing and securities
financing business (if any)
(see Note 4)
Whether the Company has arrangements for differences in voting rights
□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
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repurchase transaction during the reporting period
IV. The cumulative number of shares pledged by the controlling shareholder or the largest
shareholder of the Company and its concert parties reaches 80% of the number of shares held
by them in the Company
□ Applicable Not applicable
V. Equity changes of directors, supervisors and senior management
Applicable Not applicable
Number of
Number of restricted Number of Number of
Number of Number of Number of
shares held shares restricted restricted
shares shares shares held
at the granted at shares shares
Status of increased decreased at the end
Name Position beginning the granted in granted at
service in current in current of the
of the beginning current the end of
period period period
period of the period the period
(shares) (shares) (shares)
(shares) period (shares) (shares)
(shares)
Director,
deputy
general
Fang
manager, Incumbent 0 40,000 0 40,000 50,000 0 25,000
Xiuyuan
chief
financial
officer
Wang Ying Supervisor Incumbent 0 30,000 0 30,000 0 0 0
Deputy
general
Chen manager,
Incumbent 0 5,300 0 5,300 30,000 0 15,000
Huixuan secretary to
the board
of directors
Total -- -- 0 75,300 0 75,300 80,000 0 40,000
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.
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Section VIII Preferred Shares
□ Applicable Not applicable
No preferred shares of the Company during the reporting period.
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Section IX Information Related to Bonds
□ Applicable Not applicable
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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.
II. Financial reports
Unit of statements in financial notes: RMB
1. Consolidated Balance Sheet
Prepared by: Winner Medical Co., Ltd.
June 30, 2022
Unit: yuan
Item June 30, 2022 January 01, 2022
Current assets:
Monetary capital 4,213,668,508.76 4,273,938,326.82
Deposit reservation for balance
Lending funds
Trading financial assets 2,726,914,556.35 3,130,529,709.10
Derivative financial assets
Notes receivable
Accounts receivable 1,002,762,209.29 775,546,589.42
Amounts receivable financing 29,770,412.07 9,940,272.21
Advances to suppliers 420,787,215.37 110,462,594.38
Premiums receivables
Reinsurance accounts receivable
Provision of cession receivable
Other receivables 321,798,808.08 329,179,077.01
Including: Interest receivable
Dividends receivable
Redemptory monetary capital for sale
Inventory 1,809,055,012.98 1,597,377,043.99
Contract assets
Assets held for sales
Non-current assets due within a year
Other current assets 116,083,037.74 118,759,825.56
Total current assets 10,640,839,760.64 10,345,733,438.49
Non-current assets:
Loans and advances
Debt investment
Other debt investments
Long-term receivables
Long-term equity investments 19,358,011.13 16,949,801.24
Other equity instrument investments
Other non-current financial assets
Investment real estates
Fixed assets 1,924,347,463.68 1,477,320,848.63
Construction in progress 531,760,298.29 216,096,622.30
Productive biological assets
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Oil and gas assets
Right-of-use assets 473,619,587.07 531,735,443.44
Intangible assets 799,026,401.97 265,700,890.65
Development expenditure
Goodwill 588,885,371.18
Long-term unamortized expenses 155,843,883.68 174,785,770.83
Deferred income tax assets 136,501,355.84 122,716,382.99
Other non-current assets 252,312,831.03 115,571,001.80
Total non-current assets 4,881,655,203.87 2,920,876,761.88
Total assets 15,522,494,964.51 13,266,610,200.37
Current liabilities
Short-term debt 1,141,476,733.93
Borrowings from central bank
Borrowing funds
Trading financial liabilities
Derivative financial liabilities
Notes payable 146,065,963.57 36,200,130.04
Accounts payable 996,960,746.96 734,521,490.60
Advance from customers
Contract liabilities 320,794,802.74 341,175,665.42
Financial assets sold for repurchase
Deposits from customers and interbank
Acting trading securities
Acting underwriting securities
Payroll payable 216,277,874.11 184,681,184.52
Taxes payable 183,490,178.24 93,859,069.68
Other payables 451,898,553.42 443,946,028.46
Including: Interest payable
Dividends payable
Fees and commissions payable
Dividend payable for reinsurance
Liabilities held for sales
Non-current liabilities due within one
220,802,679.89 216,181,531.82
year
Other current liabilities 27,051,175.46 24,165,400.50
Total current liabilities 3,704,818,708.32 2,074,730,501.04
Non-current liabilities
Reserve fund for insurance contracts
Long-term loans 28,000,000.00
Bonds payable
Including: preferred stock
Perpetual bond
Lease liabilities 316,525,936.97 381,808,925.09
Long-term payable
Long-term payroll payable 9,303,066.32
Estimated liabilities
Deferred income 99,203,761.08 109,625,401.82
Deferred income tax liabilities 80,180,343.95 13,337,159.68
Other non-current liabilities
Total non-current liabilities 533,213,108.32 504,771,486.59
Total liabilities 4,238,031,816.64 2,579,501,987.63
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Owner's equity:
Capital stock 426,492,308.00 426,492,308.00
Other equity instruments
Including: preferred stock
Perpetual bond
Capital reserve 4,592,017,346.75 4,549,621,096.81
Less: treasury stock 500,082,734.11 257,992,366.68
Other comprehensive income （682,771.81） （1,556,935.43）
Special reserve
Surplus reserve 420,212,778.13 420,212,778.13
General risk provision
Undistributed profit 6,053,194,905.01 5,538,135,285.97
Total owners' equities attributable to the
10,991,151,831.97 10,674,912,166.80
owners of parent company
Minority equity 293,311,315.90 12,196,045.94
Total owners' equities 11,284,463,147.87 10,687,108,212.74
Total liabilities and owners' equities 15,522,494,964.51 13,266,610,200.37
Legal representative: Li Jianquan Head of accounting work: Fang Xiuyuan Head of accounting body: Wu Kezhen
2. Balance sheet of parent company
Unit: yuan
Item June 30, 2022 January 01, 2022
Current assets:
Monetary capital 3,447,509,579.63 3,580,157,428.37
Trading financial assets 1,799,864,253.19 2,234,720,701.50
Derivative financial assets
Notes receivable
Accounts receivable 626,298,295.74 502,217,638.86
Amounts receivable financing 27,989,738.20 13,669,076.67
Advances to suppliers 2,324,572,918.19 1,991,853,374.17
Other receivables 206,866,953.22 218,099,656.42
Including: Interest receivable
Dividends receivable
Inventory 407,237,823.98 297,766,006.91
Contract assets
Assets held for sales
Non-current assets due within a year
Other current assets 75,338,414.99 54,582,482.01
Total current assets 8,915,677,977.14 8,893,066,364.91
Non-current assets:
Debt investment
Other debt investments
Long-term receivables
Long-term equity investments 2,101,448,695.28 921,600,485.39
Other equity instrument investments
Other non-current financial assets
Investment real estates
Fixed assets 85,358,401.56 65,889,542.40
Construction in progress 14,459,427.50 2,671,206.77
Productive biological assets
Oil and gas assets
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Right-of-use assets 53,594,562.69 61,525,338.09
Intangible assets 57,549,802.25 10,941,470.75
Development expenditure
Goodwill
Long-term unamortized expenses 27,285,520.61 27,181,217.32
Deferred income tax assets 14,978,589.71 15,829,010.17
Other non-current assets 149,626,110.67 50,585,930.78
Total non-current assets 2,504,301,110.27 1,156,224,201.67
Total assets 11,419,979,087.41 10,049,290,566.58
Current liabilities
Short-term debt 980,079,166.67
Trading financial liabilities
Derivative financial liabilities
Notes payable
Accounts payable 413,158,990.99 744,765,121.01
Advance from customers
Contract liabilities 197,717,618.41 274,656,460.55
Payroll payable 70,681,638.46 57,013,025.70
Taxes payable 86,754,131.04 68,694,400.06
Other payables 251,827,157.91 257,073,388.79
Including: Interest payable
Dividends payable
Liabilities held for sales
Non-current liabilities due within one
17,287,832.04 14,395,962.64
year
Other current liabilities 8,201,671.52 13,678,129.69
Total current liabilities 2,025,708,207.04 1,430,276,488.44
Non-current liabilities
Long-term loans
Bonds payable
Including: preferred stock
Perpetual bond
Lease liabilities 39,027,342.35 48,977,325.26
Long-term payable
Long-term payroll payable
Estimated liabilities
Deferred income 18,751,271.02 20,071,043.26
Deferred income tax liabilities 4,082,662.98 3,648,582.23
Other non-current liabilities
Total non-current liabilities 61,861,276.35 72,696,950.75
Total liabilities 2,087,569,483.39 1,502,973,439.19
Owner's equity:
Capital stock 426,492,308.00 426,492,308.00
Other equity instruments
Including: preferred stock
Perpetual bond
Capital reserve 4,617,424,109.10 4,575,027,859.16
Less: treasury stock 500,082,734.11 257,992,366.68
Other comprehensive income
Special reserve
Surplus reserve 411,397,111.21 411,397,111.21
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Undistributed profit 4,377,178,809.82 3,391,392,215.70
Total owners' equities 9,332,409,604.02 8,546,317,127.39
Total liabilities and owners' equities 11,419,979,087.41 10,049,290,566.58
3. Consolidated Statement of Income
Unit: yuan
Item Semiannual 2022 Semiannual 2021
I. Total operating income 5,157,944,495.72 4,059,865,654.92
Including: Operating income 5,157,944,495.72 4,059,865,654.92
Interest revenue
Premium earned
Fee and commission income
II. Operating cost 4,122,305,279.41 3,268,705,562.33
Including: Operating costs 2,640,556,563.64 1,921,789,702.47
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 41,159,361.43 33,156,678.98
Sales expenses 950,172,124.74 825,805,820.57
Administrative expenses 325,391,883.32 310,652,551.64
R&D expenses 238,644,498.62 189,917,265.47
Financial expenses （73,619,152.34） （12,616,456.80）
Including: interest
5,765,880.43 379,713.89Note
expenditure
Interest revenue 62,087,089.05 35,424,028.29
Plus: other incomes 28,747,393.29 86,754,859.99
Income from investment (loss
31,452,189.90 50,073,259.81
expressed with “-”)
Including: Income from
investment of joint venture and 2,408,209.89 1,655,597.53
cooperative enterprise
Income from
derecognition of financial assets measured
at amortized cost
Exchange gain (loss expressed
with “-”)
Net exposure hedging gain (loss
expressed with “-”)
Income from fair value changes
35,182,098.83 31,408,220.30
(loss expressed with “-”)
Credit impairment losses (loss
（7,749,168.11） 11,808,406.71
expressed with “-”)
Assets impairment losses (loss
（73,045,565.34） （60,597,532.59）
expressed with “-”)
Income from disposal of assets
（547,132.74） （37,621.25）
(loss expressed with “-”)
III. Operating profit (loss to be filled out
1,049,679,032.14 910,569,685.56
with the minus sign "-")
Plus: Non-operating income 2,152,935.65 2,339,463.94
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Less: non-operating expenditure 8,633,722.09 8,502,804.42
IV. Total profit (total loss to be filled out
1,043,198,245.70 904,406,345.08
with the minus sign "-")
Less: Income tax expenses 145,670,282.34 143,286,407.76
V. Net profit (net loss to be filled out with
897,527,963.36 761,119,937.32
the minus sign "-")
(I) Classified by business continuity
1. Net profits from ongoing operation
897,527,963.36 761,119,937.32
(net loss expressed with “-”)
2. Net profits from discontinuing
operation (net loss expressed with “-”)
(II) Classified by ownership
1. Net profits attributable to the
892,823,503.14 761,038,730.24
owners of parent company
2. Minority interest income 4,704,460.22 81,207.08
VI. Net amount of other comprehensive
1,457,765.86 （292,542.91）
income after tax
Net amount of other comprehensive
income after tax attributed to parent 874,163.62 （140,119.24）
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
that can't be reclassified into profit and
loss in the invested enterprise under equity
method
3. Fair value change of other
equity instrument investments
4. Fair value change of enterprise
credit risks
5. Other
(II) Other comprehensive income that will
874,163.62 （140,119.24）
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. Fair value change of other debt
investments
3. Amount of financial assets
reclassified into other comprehensive
income
4. Provision for credit impairment
of other debt investments
5. Cash flow hedging reserve
6. Translation reserve 874,163.62 （140,119.24）
7. Other
Net amount of other comprehensive
income after tax attributed to minority 583,602.24 （152,423.67）
shareholders
VII. Total comprehensive income 898,985,729.22 760,827,394.41
Total comprehensive income attributed
893,697,666.76 760,898,611.00
to parent company owners
Total comprehensive income attributed
5,288,062.46 （71,216.59）
to minority shareholders
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VIII. Earnings per share:
(I) Basic earnings per share 2.1193 1.7844
(II) Diluted earnings per share 2.1193 1.7715
Note: Interest expense in the first half of 2021 included interest expense on lease liabilities of RMB13,560,020.61.
In case of business combination involving enterprises under common control in current period, the net profits achieved by the
merged party before combination were RMB 0.00 and achieved by the merged party in previous period were RMB 0.00.
Legal representative: Li Jianquan Head of accounting work: Fang Xiuyuan Head of accounting body: Wu Kezhen
4. Income statement of parent company
Unit: yuan
Item Semiannual 2022 Semiannual 2021
I. Operating income 3,098,525,248.00 2,152,770,959.97
Subtract: Operating costs 1,934,623,204.93 1,237,349,900.78
Taxes and surcharges 16,034,785.38 8,841,847.49
Sales expenses 180,002,852.70 120,613,735.57
Administrative expenses 207,912,208.98 206,394,645.48
R&D expenses 93,688,666.00 82,054,298.04
Financial expenses （68,427,155.06） （22,564,403.10）
注
Including: interest expenditure 4,091,660.56 288,805.56
Interest revenue 57,354,975.22 31,213,130.97
Plus: other incomes 8,538,808.91 43,098,834.69
Income from investment (loss
717,992,220.00 45,603,797.04
expressed with “-”)
Including: Income from
investment of joint venture and 2,348,078.76 1,655,597.53
cooperative enterprise
Income from
derecognition of financial assets measured
at amortized cost
Net exposure hedging gain (loss
expressed with “-”)
Income from fair value changes
31,577,241.02 28,642,089.79
(loss expressed with “-”)
Credit impairment losses (loss
（6,534,785.58） 17,063,895.54
expressed with “-”)
Assets impairment losses (loss
（4,973,851.97） （13,698,792.65）
expressed with “-”)
Income from disposal of assets
(loss expressed with “-”)
II. Operating profit (loss to be filled out
1,481,290,317.45 640,790,760.12
with the minus sign "-")
Plus: Non-operating income 43,721.08 810,681.71
Less: non-operating expenditure 324,053.04 152,332.97
III. Total profit (total loss to be filled out
1,481,009,985.49 641,449,108.86
with the minus sign "-")
Less: Income tax expenses 117,459,507.27 95,097,573.86
IV. Net profit (net loss to be filled out
1,363,550,478.22 546,351,535.00
with the minus sign "-")
(I) Net profits from going concern (net
1,363,550,478.22 546,351,535.00
loss expressed with "-")
(II) Net profits from discontinuing
operation (net loss expressed with "-")
V. Net amount of other comprehensive
income after tax
(I) Other comprehensive income that can't
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be reclassified into profit and loss
1. Remeasure the variation of net
indebtedness or net asset of defined
benefit plan
2. Other comprehensive income
that can't be reclassified into profit and
loss in the invested enterprise under equity
method
3. Fair value change of other
equity instrument investments
4. Fair value change of enterprise
credit risks
5. Other
(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. Fair value change of other debt
investments
3. Amount of financial assets
reclassified into other comprehensive
income
4. Provision for credit impairment
of other debt investments
5. Cash flow hedging reserve
6. Translation reserve
7. Other
VI. Total comprehensive income 1,363,550,478.22 546,351,535.00
VII. Earnings per share:
(I) Basic earnings per share
(II) Diluted earnings per share
Note: Finance costs for the first half of 2021 included interest expense on lease liabilities of RMB1,110,492.88.
5. Consolidated Statement of Cash Flow
Unit: yuan
Item Semiannual 2022 Semiannual 2021
I. Cash flow from financing activities:
Cash from selling goods or offering
5,116,730,407.67 4,211,780,432.64
labor
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
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funds
Net cash from acting trading securities
Refund of tax and levies 54,482,126.94 24,562,159.29
Other cash received related to operating
56,108,219.58 150,416,678.31
activities
Subtotal of inward cash inflow from
5,227,320,754.19 4,386,759,270.24
operating activities
Cash paid for selling goods or offering
2,939,776,049.76 2,731,814,025.31
labor
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 800,031,019.92 596,881,901.63
Taxes and fees paid 319,812,985.54 573,374,688.67
Other cash paid related to operating
366,549,799.59 287,083,788.86
activities
Subtotal of outward cash inflow from
4,426,169,854.81 4,189,154,404.47
operating activities
Net cash flow from operating activities 801,150,899.38 197,604,865.77
II. Cash flow from investment activities:
Cash from investment withdrawal 4,024,661,820.00 4,090,000,000.00
Cash from investment income 96,593,854.89 63,620,238.79
Net cash from disposal of fixed assets,
intangible assets and other long-term 6,741,954.00 153,218,248.95
assets
Net cash received from the disposal of
subsidiaries and other business entities
Other cash received related to
investment activities
Subtotal of inward cash inflow from
4,127,997,628.89 4,306,838,487.74
investment activities
Cash paid for the purchase and
construction of fixed assets, intangible 513,652,602.31 327,515,662.56
assets and other long term assets
Cash paid for investment 3,577,034,300.00 2,845,000,000.00
Net cash received from reinsurance
business
Net cash paid for obtaining subsidiaries
1,003,862,872.29
and other business units
Other cash paid related to investment
activities
Subtotal of outward cash inflow from
5,094,549,774.60 3,172,515,662.56
investment activities
Net cash flow from investing activities （966,552,145.71） 1,134,322,825.18
III. Cash flow from financing activities:
Receipts from equity securities 14,000,000.00
Including: Cash received from
subsidies’ absorption of minority
shareholders’ investment
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Cash received from borrowings 1,050,000,000.00
Other cash received related to financing
activities
Subtotal of inward cash inflow from
1,064,000,000.00
financial activities
Cash repayments of amounts borrowed 55,000,000.00 150,000,000.00
Cash paid for distribution of dividends
396,090,530.15 568,137,284.96
or profits and for interest expenses
Including: Dividends and profits paid
by subsidiaries to minority shareholders
Other cash paid related to financing
420,175,720.56 103,492,521.01
activities
Subtotal of outward cash inflow from
871,266,250.71 821,629,805.97
financial activities
Net cash flow from financing activities 192,733,749.29 （821,629,805.97）
IV. Impact of exchange rate movements
27,600,761.92 301,182.50
on cash and cash equivalents
V. Net increase in cash and cash
54,933,264.88 510,599,067.48
equivalents
Plus: Balance of cash and cash
4,088,612,262.04 4,149,734,694.38
equivalents at the beginning of the period
VI. Balance of cash and cash equivalents
4,143,545,526.92 4,660,333,761.86
at end of period
6. Cash flow statement of parent company
Unit: yuan
Item Semiannual 2022 Semiannual 2021
I. Cash flow from financing activities:
Cash from selling goods or offering
3,258,287,430.41 2,095,126,701.06
labor
Refund of tax and levies 7,667,891.23 15,568,316.68
Other cash received related to operating
364,335,473.72 320,575,959.00
activities
Subtotal of inward cash inflow from
3,630,290,795.36 2,431,270,976.74
operating activities
Cash paid for selling goods or offering
2,053,877,022.21 2,269,677,579.57
labor
Cash paid to and for employees 213,532,606.79 144,426,888.77
Taxes and fees paid 183,161,300.38 418,581,781.00
Other cash paid related to operating
645,932,910.29 552,812,218.15
activities
Subtotal of outward cash inflow from
3,096,503,839.67 3,385,498,467.49
operating activities
Net cash flow from operating activities 533,786,955.69 （954,227,490.75）
II. Cash flow from investment activities:
Cash from investment withdrawal 2,697,990,188.87 3,705,000,000.00
Cash from investment income 775,721,707.52 43,683,535.21
Net cash from disposal of fixed assets,
intangible assets and other long-term 5,431,000.00 54,520,000.00
assets
Net cash received from the disposal of
subsidiaries and other business entities
Other cash received related to
investment activities
Subtotal of inward cash inflow from
3,479,142,896.39 3,803,203,535.21
investment activities
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Cash paid for the purchase and
construction of fixed assets, intangible 73,115,880.93 30,867,495.67
assets and other long term assets
Cash paid for investment 3,396,124,300.00 1,949,823,493.17
Net cash paid for obtaining subsidiaries
and other business units
Other cash paid related to investment
activities
Subtotal of outward cash inflow from
3,469,240,180.93 1,980,690,988.84
investment activities
Net cash flow from investing activities 9,902,715.46 1,822,512,546.37
III. Cash flow from financing activities:
Receipts from equity securities
Cash received from borrowings 100,000,000.00
Other cash received related to financing
activities
Subtotal of inward cash inflow from
100,000,000.00
financial activities
Cash repayments of amounts borrowed 120,000,000.00
Cash paid for distribution of dividends
394,672,045.23 566,402,956.84
or profits and for interest expenses
Other cash paid related to financing
300,624,090.59
activities
Subtotal of outward cash inflow from
695,296,135.82 686,402,956.84
financial activities
Net cash flow from financing activities （595,296,135.82） （686,402,956.84）
IV. Impact of exchange rate movements
18,970,584.36 8,840,584.52
on cash and cash equivalents
V. Net increase in cash and cash
（32,635,880.31） 190,722,683.30
equivalents
Plus: Balance of cash and cash
3,430,110,781.71 3,669,286,043.43
equivalents at the beginning of the period
VI. Balance of cash and cash equivalents
3,397,474,901.40 3,860,008,726.73
at end of period
7. Consolidated statement of change in equity
Current amount
Unit: yuan
Semiannual 2022
Owners' equities attributable to the owners of parent company
Other equity Other Total
Mino
Item instruments Capit Less: comp Speci Surpl Gener Undis owne
Capit rity
al treasu rehen al us al risk tribut Subto equit rs'
al Prefer Perpe Other equiti
reserv ry sive reserv reserv provi ed tal y
stock red tual Other es
e stock inco e e sion profit
stock bond me
4,549 （1,5 5,538 10,67 10,68
I. Closing 426,4 257,9 420,2 12,19
,621, 56,93 ,135, 4,912 7,108
balance of the 92,30 92,36 12,77 6,045
096.8 5.43 285.9 ,166. ,212.
previous year 8.00 6.68 8.13 .94
1 ） 7 80 74
Plus:
Changes in
accounting
policies
Prior
period error
correction
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Busi
ness
combination
under
common
control
Othe
r
4,549 （1,5 5,538 10,67 10,68
II. Beginning 426,4 257,9 420,2 12,19
,621, 56,93 ,135, 4,912 7,108
balance in 92,30 92,36 12,77 6,045
096.8 5.43 285.9 ,166. ,212.
current year 8.00 6.68 8.13 .94
1 ） 7 80 74
III. Increase/d
ecrease in the
current period 42,39 242,0 515,0 316,2 281,1 597,3
874,1
(less to be 6,249 90,36 59,61 39,66 15,26 54,93
63.62
filled out with .94 7.43 9.04 5.17 9.96 5.13
the minus sign
"-)
(I) Total 892,8 893,6 5,288 898,9
874,1
comprehensiv 23,50 97,66 ,062. 85,72
63.62
e income 3.14 6.76 46 9.22
(II) Owner’s
42,39 42,39 275,8 318,2
invested and
6,249 6,249 27,20 23,45
decreased
.94 .94 7.50 7.44
capital
1. Common
stock invested
by the owner
2. Capital
invested by
other equity
instrument
holders
3. Amount of
share-based 42,39 42,39 42,39
payment 6,249 6,249 6,249
included in the .94 .94 .94
owner’s equity
275,8 275,8
4. Other 27,20 27,20
7.50 7.50
（37 （37 （37
(III) Profit 7,763 7,763 7,763
distribution ,884. ,884. ,884.
10） 10） 10）
1. Withdrawal
of surplus
reserves
2. Withdrawal
of general risk
preparation
（37 （37 （37
3. Distribution
7,763 7,763 7,763
of owners (or
,884. ,884. ,884.
shareholders)
10） 10) 10）
4. Other
(IV) Internal
transfer of
owner’s equity
1. Capital
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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. Carryforwar
d retained
earnings in
variation of
defined
benefit plan
5. Carryforwar
d retained
earnings of
other
comprehensiv
e income
6. Other
(V) Special
reserve
1. Draw in this
current
2. Use in this
current
（24 （24
242,0
2,090 2,090
(VI) Other 90,36
,367. ,367.
7.43
43） 43）
4,592 6,053 10,99 11,28
IV. Balance at 426,4 500,0 （68 420,2 293,3
,017, ,194, 1,151 4,463
the end of 92,30 82,73 2,771 12,77 11,31
346.7 905.0 ,831. ,147.
current period 8.00 4.11 .81） 8.13 5.90
5 1 97 87
Prior year amount
Unit: yuan
Semiannual 2021
Owners' equities attributable to the owners of parent company
Other equity Other Total
Mino
Item instruments Capit Less: comp Speci Surpl Gener Undis owne
Capit rity
al treasu rehen al us al risk tribut Subto equit rs'
al Prefer Perpe Other equiti
reserv ry sive reserv reserv provi ed tal y
stock red tual Other es
e stock inco e e sion profit
stock bond me
4,481 （1,1 5,126 10,45 10,46
I. Closing 426,4 420,2 14,45
,709, 11,03 ,630, 3,934 8,390
balance of the 92,30 12,77 6,046
983.2 5.08 011.1 ,045. ,091.
previous year 8.00 8.13 .01
4 ） 4 43 44
Plus: （60, （60, （60,
Changes in 128,6 128,6 128,6
accounting 38.03 38.03 38.03
policies ） ） ）
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Prior
period error
correction
Busi
ness
combination
under
common
control
Othe
r
4,481 5,066 10,39 10,40
II. Beginning 426,4 (1,11 420,2 14,45
,709, ,501, 3,805 8,261
balance in 92,30 1,035 12,77 6,046
983.2 373.1 ,407. ,453.
current year 8.00 .08) 8.13 .01
4 1 40 41
III. Increase/d
ecrease in the
current period 131,6 (140, (6,64 124,8 (71,2 124,7
(less to be 58,63 119.2 7,424 71,09 16.59 99,87
filled out with 9.68 4) .15) 6.29 ) 9.70
the minus sign
"-)
(I) Total (140, 761,0 760,8 (71,2 760,8
comprehensiv 119.2 38,73 98,61 16.59 27,39
e income 4) 0.24 1.00 ) 4.41
(II) Owner’s
131,6 131,6 131,6
invested and
58,63 58,63 58,63
decreased
9.68 9.68 9.68
capital
1. Common
stock invested
by the owner
2. Capital
invested by
other equity
instrument
holders
3. Amount of
share-based 131,6 131,6 131,6
payment 58,63 58,63 58,63
included in the 9.68 9.68 9.68
owner’s equity
4. Other
(767, (767, (767,
(III) Profit 686,1 686,1 686,1
distribution 54.39 54.39 54.39
) ) )
1. Withdrawal
of surplus
reserves
2. Withdrawal
of general risk
preparation
(767, （76 （76
3. Distribution
686,1 7,686 7,686
of owners (or
54.39 ,154. ,154.
shareholders)
) 39） 39）
4. Other
(IV) Internal
transfer of
owner’s equity
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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. Carryforwar
d retained
earnings in
variation of
defined
benefit plan
5. Carryforwar
d retained
earnings of
other
comprehensiv
e income
6. Other
(V) Special
reserve
1. Draw in this
current
2. Use in this
current
(VI) Other
4,613 （1,2 5,059 10,51 10,53
IV. Balance at 426,4 420,2 14,38
,368, 51,15 ,853, 8,676 3,061
the end of 92,30 12,77 4,829
622.9 4.32 948.9 ,503. ,333.
current period 8.00 8.13 .42
2 ） 6 69 11
8. Statement of change in equity of parent company
Current amount
Unit: yuan
Semiannual 2022
Other equity instruments Other
Item Less: Undistr Total
Capital Capital compre Special Surplus
treasury ibuted Other owners'
stock Preferre Perpetu Other reserve hensive reserve reserve
d stock al bond stock profit equities
income
I. Closing 4,575,0 3,391,3 8,546,3
426,492 257,992 411,397
balance of the 27,859. 92,215. 17,127.
,308.00 ,366.68 ,111.21
previous year 16 70 39
Plus:
Changes in
accounting
policies
Prior
period error
correction
Othe
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r
II. Beginning 4,575,0 3,391,3 8,546,3
426,492 257,992 411,397
balance in 27,859. 92,215. 17,127.
,308.00 ,366.68 ,111.21
current year 16 70 39
III. Increase/d
ecrease in the
current period
42,396, 242,090 985,786 786,092
(less to be
249.94 ,367.43 ,594.12 ,476.63
filled out with
the minus sign
"-)
(I) Total 1,363,5 1,363,5
comprehensiv 50,478. 50,478.
e income 22 22
(II) Owner’s
invested and 42,396, 42,396,
decreased 249.94 249.94
capital
1. Common
stock invested
by the owner
2. Capital
invested by
other equity
instrument
holders
3. Amount of
share-based
42,396, 42,396,
payment
249.94 249.94
included in the
owner’s equity
4. Other
（377,7 （377,7
(III) Profit
63,884. 63,884.
distribution
10） 10）
1. Withdrawal
of surplus
reserves
2. Distribution （377,7 （377,7
of owners (or 63,884. 63,884.
shareholders) 10） 10）
3. Other
(IV) Internal
transfer of
owner’s equity
1. Capital
surplus
transfer to
paid-in capital
(or capital
stock)
2. Earned
surplus
transfer to
paid-in capital
(or capital
stock)
3. Earned
surplus
covering the
deficit
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4. Carryforwar
d retained
earnings in
variation of
defined benefit
plan
5. Carryforwar
d retained
earnings of
other
comprehensiv
e income
6. Other
(V) Special
reserve
1. Draw in this
current
2. Use in this
current
）
242,090 242,090
(VI) Other
,367.43 ,367.43
）
IV. Balance at 4,617,4 4,377,1 9,332,4
426,492 500,082 411,397
the end of 24,109. 78,809. 09,604.
,308.00 ,734.11 ,111.21
current period 10 82 02
Last term amount
Unit: yuan
Semiannual 2021
Other equity instruments Other
Item Less: Undistr Total
Capital Capital compre Special Surplus
treasury ibuted Other owners'
stock Preferre Perpetu Other reserve hensive reserve reserve
d stock al bond stock profit equities
income
I. Closing 4,507,1 3,349,5 8,694,5
426,492 411,397
balance of the 16,745. 20,232. 26,397.
,308.00 ,111.21
previous year 59 39 19
Plus:
Changes in
accounting
policies
Prior
period error
correction
Othe
r
II. Beginning 4,507,1 3,349,5 8,694,5
426,492 411,397
balance in 16,745. 20,232. 26,397.
,308.00 ,111.21
current year 59 39 19
III. Increase/d
ecrease in the
current period （221,3 （89,67
131,658
(less to be 34,619. 5,979.7
,639.68
filled out with 39） 1）
the minus sign
"-)
(I) Total
546,351 546,351
comprehensiv
,535.00 ,535.00
e income
(II) Owner’s
131,658 131,658
invested and
,639.68 ,639.68
decreased
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capital
1. Common
stock invested
by the owner
2. Capital
invested by
other equity
instrument
holders
3. Amount of
share-based
131,658 131,658
payment
,639.68 ,639.68
included in the
owner’s equity
4. Other
（767,6 （767,6
(III) Profit
86,154. 86,154.
distribution
39） 39）
1. Withdrawal
of surplus
reserves
2. Distribution （767,6 （767,6
of owners (or 86,154. 86,154.
shareholders) 39） 39）
3. Other
(IV) Internal
transfer of
owner’s equity
1. Capital
surplus
transfer to
paid-in capital
(or capital
stock)
2. Earned
surplus
transfer to
paid-in capital
(or capital
stock)
3. Earned
surplus
covering the
deficit
4. Carryforwar
d retained
earnings in
variation of
defined benefit
plan
5. Carryforwar
d retained
earnings of
other
comprehensiv
e income
6. Other
(V) Special
reserve
1. Draw in this
current
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2. Use in this
current
(VI) Other
IV. Balance at 4,638,7 3,128,1 8,604,8
426,492 411,397
the end of 75,385. 85,613. 50,417.
,308.00 ,111.21
current period 27 00 48
III. Basic status of the Company
Winner Medical Co., Ltd. (hereinafter referred to as the "Company" or "our Company"), formerly known as Winner
Industries (Shenzhen) Co., Ltd. (hereinafter referred to as "Winner Industries"), is a wholly foreign-owned
enterprise established on August 24, 2000 with the approval of Shenzhen Municipal Administration for Industry
and Commerce. The original business license number of the Company is: Q.D.Y.S.Z.Zi No. 307199. The original
registered capital is HKD 30 million, and the total investment is HKD 60 million. The Company is wholly owned
by Winner International Trading Corporation. The registered capital was invested in three installments. On April 2,
2001, the registered capital of HKD 18,023,154.30 was invested in monetary funds, which was verified by the
capital verification report (Z.T.Z.T. No.Y2001-1133) of Zhuhai Zhongtuo Zhengtai Accounting Firm. The business
scope of the original company is: the production and operation of sanitary materials, dressings and their products,
medical clothing, textiles, non-woven products and moulded packaging (excluding the products subject to national
export license management).
On May 18, 2001, the Board of Directors of the Company decided to increase the registered capital from HKD
30.00 million to HKD 60.00 million, and the total investment from HKD 60.00 million to HKD 120.00 million,
which was paid in three installments since the date of registration of the Company. On June 05, 2001, the Company
obtained the changed business license of the enterprise legal person issued by Shenzhen Municipal Bureau for
Industry and Commerce and amended the Articles of Association accordingly.
As of December 21, 2001, it has received the second installment of the registered capital paid by Winner
International Trading Corporation. Winner International Trading Corporation contributed HKD 31,445,194.91 in
monetary funds, and t his 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 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
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verification report).
On December 2, 2006, the Board of Directors of the Company decided to change the original investment period of
the shareholders from June 30, 2006 to December 31, 2006 into June 30, 2006 to June 30, 2007. On December 6,
2006, the Company was approved by General Administration for Industry and Commerce of Shenzhen to change
its type of enterprise from a wholly foreign-owned enterprise into a limited liability company (wholly owned by
foreign legal person) and change its business term.
As of March 15, 2007, the Company transferred undistributed profits HKD 6,576,196.00 to paid -in capital, and the
cumulative paid-in capital after the change was HKD 126.00 million. This capital increase was verified by Shenzhen
Hengping Certified Public Accountants Co., Ltd. (S.H.P.W.Y. Zi [2007] No.0004 capital verification report). On
August 13, 2007, the Company obtained the changed business license of the enterprise legal person issued by
Shenzhen Municipal Bureau for Industry and Commerce and amended the Articles of Association accordingly. The
registration number was changed from Q.D.Y.S.Z. Zi No. 307199 to 440306503230896.
On June 8, 2009, the Board of Directors of the Company decided to add sterilization technology services to the
business scope. On June 30, 2009, the Company obtained the changed business license of the enterprise legal person
issued by Shenzhen Municipal Bureau for Industry and Commerce and amended the Articles of Association
accordingly.
On April 1, 2010, the Board of Directors of the Company decided to increase the Company's registered capital from
HKD 126.00 million to HKD 192.00 million, and the total investment from HKD 270.00 million to HKD 380.00
million. The increased amount of the registered capital was contributed by the original shareholders in cash in
foreign currency.
As of June 18, 2010, it has received the registered capital totaling USD 8,473,500.00 (equivalent to HKD
66,000,653.75) paid by Winner Group Limited. This capital increase was verified by Shenzhen Hengping Certified
Public Accountants LLP (S.H.P.S. (W.) Y. Zi [2010] No.13 capital verification report). On July 2, 2010, the
Company obtained the changed business license of the enterprise legal person issue d by Shenzhen Administration
for Market Regulation (since September 9, 2009, Shenzhen Municipal Bureau for Industry and Commerce has been
integrated into Shenzhen Administration for Market Regulation) and amended the Articles of Association
accordingly.
On April 27, 2011, with the approval of General Administration for Industry and Commerce of Shenzhen, the
Company changed its residence address from No. 1 Wenjian Avenue, Bulong Road, Longhua Street, Bao'an 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 196,271,300, and the total
investment was still HKD 380,000,000.
The shareholder, Winner Group Limited made capital contribution with its equity in the six enterprises. The equity
contribution is as follows:
Book value of Amount of Amount of
equity equity Amount included in equity
contribution net contribution capital surplus contribution
Proporti assets (RMB (RMB 10,000) (Convert to
Name of invested entity
on (%) (RMB 10,000) 10,000) HKD 10,000)
(D) =
(a) (b) (c)=(a)-(b) (b)*conversion
exchange rate
Winner Medical (Chongyang) Co., Ltd.
(formerly known as "Chongyang Winner 100.00 3,232.93 32.33 3,200.60 39.94
Medical Textile Co., Ltd.")
Winner Medical (Jiayu) Co., Ltd. (formerly
known as "Jiayu Winner Medical Textile Co., 100.00 3,520.95 35.21 3,485.74 43.50
Ltd.")
Winner Medical (Jingmen) Co., Ltd. (formerly
known as "Jingmen Winner Medical Textile 100.00 2,527.24 25.27 2,501.97 31.22
Co., Ltd.")
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Yichang Winner Textile Weaving Co., Ltd. 100.00 1,800.69 18.01 1,782.68 22.25
Winner Medical (Huanggang) Co., Ltd. 75.00 19,729.30 197.29 19,532.01 243.76
Winner Medical (Tianmen) Co., Ltd. (formerly
100.00 3,760.89 37.61 3,723.28 46.46
known as "Hubei Winner 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 (L.P.)
(renamed as Shenzhen Leyuan Investment Partnership (L.P.), hereinafter referred to as the "Leyuan Investment"),
Shenzhen Kangxin Investment Partnership (L.P.) (renamed as Xiamen Yutong Investment Partnership (L.P.),
hereinafter referred to as the "Yutong Investment"), Shenzhen Kanglong Investment Partnership (L.P.) (renamed as
Xiamen Huikang Investment Partnership (L.P.), hereinafter referred to as the "Huikang 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:
Capital contribution amount (HKD ten
Investor Proportion (%)
thousand)
Winner Group Limited 19,627.13 91.5703
Leyuan Investment 1,032.24 4.8159
Yutong Investment 441.45 2.0596
Huikang Investment 333.13 1.5542
Total 21,433.95 100.0000
On October 17, 2013, the Company obtained the changed business license of the enterprise legal person issued by
Shenzhen Administration for Market Regulation and amended the Articles of Association accordingly. This capital
increase was verified by Shenzhen Hengping Certified Public Accountants LLP (S.H.P.S.Y. Zi [2013] No.035
capital verification report).
On October 26, 2013, the Board of Directors of the Company decided to change its residence from Winner Industrial
Park beside Bulong Road, Longhua Street, Bao'an District, Shenzhen City to Winner Industrial Park, No. 660
Bulong Road, Longhua New District, Shenzhen. 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 01, 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 217,981,610, and the total investment
was still HKD 380,000,000. The capital increase was made by the original shareholder, Leyuan Investment, which
subscribed HKD 3,646,600 with RMB 13,585,000, 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:
Capital contribution amount (HKD ten
Investor Proportion (%)
thousand)
Winner Group Limited 19,627.13 90.0385
Leyuan Investment 1,396.90 6.4082
Yutong Investment 441.45 2.0251
Huikang 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).
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On July 28, 2014, the Board of Directors of the Company decided to agree that the shareholder of the Company,
Winner Group Limited, would transfer its 2.9503% equity of the Company to Yutong Investment, Huikang
Investment, and the newly introduced shareholder, Shenzhen Kangli Investment Partnership (L.P.) (renamed as
Xiamen Zepeng Investment Partnership (L.P.), hereinafter referred to as "Zepeng Investment"). After the
completion of the equity transfer, the Company’s ownership structure was changed as follows:
Capital contribution amount (HKD ten
Investor Proportion (%)
thousand)
Winner Group Limited 18,984.01 87.0882
Leyuan Investment 1,396.90 6.4082
Yutong Investment 740.83 3.3985
Huikang Investment 447.37 2.0523
Zepeng Investment 229.50 1.0528
Total 21,798.61 100.0000
On August 29, 2014, the Company obtained the changed business license of the enterprise legal person issued by
Shenzhen Administration for Market Regulation and amended the Articles of Association accordingly.
On September 28, 2014, the Board of Directors of the Company decided and agreed to increase the Company's
registered capital by HKD 22,550,300. The registered capital after the change was HKD 240,536,400, and the total
investment was still HKD 380,000,000. The new registered capital was subscribed by Beijing Sequoia Xinyuan
Equity Investment Center (L.P.) (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:
Capital contribution amount (HKD ten
Investor Proportion (%)
thousand)
Winner Group Limited 18,984.01 78.9236
Leyuan Investment 1,396.90 5.8074
Yutong Investment 740.83 3.0800
Huikang Investment 447.37 1.8599
Zepeng Investment 229.50 0.9541
Sequoia Xinyuan 2,255.03 9.3750
Total 24,053.64 100.0000
As of October 31, 2014, it has received RMB 300.00 million from Sequoia Xinyuan in monetary funds. On
November 06, 2014, the Company obtained the changed business license of the enterprise legal person issued by
Shenzhen Administration for Market Regulation and amended the Articles of Association accordingly. This capital
increase was verified by the Shenzhen Branch of Zhonglian Certified Public Accountants Co., Ltd. (Z.L.S.S.Y. Zi
[2014] No.087 capital verification report).
On April 30, 2015, through the resolution of the Board of Directors of the Company, with February 28, 2015 as the
base date, Winner Industries was wholly changed into a limited liability Company, with a registered capital of 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). June 4, 2015, with the approval of Economy, Trade and Information Commission of Shenzhen
Municipality, Winner Industries was wholly changed into a limited liability company, renamed as "Winner Medical
Co., Ltd.", and obtained the business license of enterprise legal person with the registration number of
440306503230896.
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
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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 (RMB 10,000) Proportion (%)
Winner Group Limited 29,043.8848 77.1434
Leyuan Investment 2,137.1232 5.6764
Yutong Investment 1,133.4400 3.0105
Huikang Investment 684.4432 1.8179
Zepeng 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 monetary funds. On June 15, 2018,
Shenzhen Administration for Market Regulation issued the Notice of Change (Filing) (No.: 21801665051) on this
change and approved the capital increase. The Company amended the Articles of Association in respect of the above
matters. The Company amended the Articles of Association in respect of the above matters. This capital increase
was verified by BDO China Shu Lun Pan Certified Public Accountants LLP (X.K.S.B.Zi [2018] No.ZI10525 capital
verification report).
On February 28, 2018, the Company obtained the renewed business license of the enterprise legal person issued by
Shenzhen Administration for Market Regulation with the unified social credit code 91440300723009295R.
On August, 18, 2020, after the reply of China Securities Regulatory Commission on Approval of the Registration
of the Initial Public Offering of Winner Medical Co., Ltd. (Z.J.X.K. [2020] No.1822), the Company issued 50 million
common shares in RMB to the public, which was listed on the Shenzhen Stock Exchange on September 17, 2020.
Upon completion of the issuance, the registered capital of the Company was RMB 426,492,308.
Business term: sustainable operation.
General business scope: production of special labor protection articles; sales of special labor protection articles;
production of labor protection articles; sales of labor protection articles; clothing manufacturing; clothing and
apparel wholesale; clothing and apparel retail; sales of sanitary supplies and disposable medical supplies; sales of
personal hygiene products; shoes manufacturing; wholesale of shoes and hats; retail of shoes and hats; sales of
shoemaking raw and auxiliary materials; manufacturing of maternal and infant supplies; sales of maternal and infant
supplies; sales of Class I medical devices; retail of Class II medical devices; lease of non residential real estate;
engagement in investment activities with self-owned funds. (The above items do not involve special management
measures for foreign investment access) (Except for the items subject to approval according to law, independently
carry out business activities according to law with business license) Licensed business scope: production and
operation of medical biological materials, dressings and products, medical clothing, protective articles, textiles, non-
woven 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; wholesale, import and
export, retail (including online sales) of cotton household articles, cotton spunlaced non-woven fabric and its
products, cotton, disinfection products, daily necessities, cosmetics, protective articles, health care products and
instruments and meters, and other related ancillary businesses (if it does not involve goods subject to state trading,
or involves goods subject to quotas, license management and other special provisions, it shall be subject to the
application in accordance with relevant regulations of the state); research and development, production and sales of
smart home appliances; development of new materials; provision of the technical consulting, technical services and
after-sales services for above-mentioned products; sterilization technical services (if relevant qualifications are
required for operation, it shall be subject to the application in accordance with relevant regulations); enterprise
management consulting, business information consulting, economic information consulting, logistics supply chain
management and warehouse services (excluding hazardous chemicals, precursor chemicals, refined oil and other
dangerous goods), self-owned property leasing (only operation with the legal property ownership certificate under
the Company's name is approved); production of Class I medical devices; production of Class II medical devices;
sales of Class II medical devices; production of Class III medical devices; operation of Class III medical devices.
(The above items do not involve special management measures for foreign investment access) (Items subject to
approval according to the law can only be carried out after getting the approval of relevant departments. Specific
operating projects are subject to the approval documents or permits of relevant departments.)
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Domicile of the Company: F42, Building 2, Huilong Business Center, Shenzhen North Railway Station Area,
Minzhi Subdistrict, Longhua District, Shenzhen City; Winner Industrial Park, No.660 Bulong Road, Longhua New
District, Shenzhen.
The financial statements were approved by the Board of Directors of the Company on August 16, 2022.
As of June 30, 2022, the subsidiaries in the consolidated financial statements of the Company are as follows:
Subsidiary name
Winner Medical (Jingmen) Co., Ltd. (hereinafter referred to as "Winner Medical (Jingmen)")
Yichang Winner Medical Textile Co., Ltd. (hereinafter referred to as "Winner Medical (Yichang)")
Winner Medical (Tianmen) Co., Ltd. (hereinafter referred to as "Winner Medical (Tianmen)")
Winner Medical (Chongyang) Co., Ltd. (hereinafter referred to as "Winner Medical (Chongyang)")
Winner Medical (Jiayu) Co., Ltd. (hereinafter referred to as "Winner Medical (Jiayu)")
Winner Medical (Hong Kong) Ltd. (hereinafter referred to as "Hong Kong Winner")
Winner (Huanggang) Cotton Processing & Trading Co., Ltd. (hereinafter referred to as "Winner (Huanggang) Cotton")
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. 2* (hereinafter referred to as "Winner Medical (Wuhan)") (former name: Hubei Winner Medical
Co., Ltd.)
Shenzhen PureH2B Technology Co., Ltd. 3* (hereinafter referred to as "PureH2B")
Shenzhen Purunderwear Sci-Tech Innovation Co., Ltd. 4* (hereinafter referred to as "Purunderwear")
Huanggang Purcotton Ltd. 5* (hereinafter referred to as "Huanggang Purcotton")
Zhejiang Longterm Medical Technology Co., Ltd. (hereinafter referred to as "Longterm Medical")
Hangzhou Shengyi Technology Co., Ltd. (hereinafter referred to as "Hangzhou Shengyi")
Xi'an Longtemu Medical Technology Co., Ltd. (hereinafter referred to as "Xi'an Longtemu")
Deqing Longterm Medical Silica Gel Products Co., Ltd. (hereinafter referred to as "Deqing Longterm")
Longterm Medical US LLC (hereinafter referred to as "American Longterm")
Winner (Guilin) Latex Products Co., Ltd. (hereinafter referred to as "Guilin Latex")
1*: Heyuan Winner was established on May 18, 2016.
2*: Wuhan Winner was established on January 23, 2017, which former name was Hubei Winner Medical Co., Ltd.
(abbreviated as “Hubei Winner”). On August 28, 2020, Hubei Winner was renamed as Winner Medical (Wuhan)
Co., Ltd.
3*: PureH2B was established on January 25, 2018.
4*: Cotton Lining was established on July 9, 2019.
5*: Huanggang Purcotton was established on September 27, 2020.
In the current period, Longterm Medical and Guilin Latex were newly added through business combination not
under the same control. Under Longterm Medical, there are four subsidiaries, namely Hangzhou Shengyi, Xi'an
Longtemu, Deqing Longterm and American Longterm.
Pure HB (Shanghai) Co., Ltd. (hereinafter referred to as "Pure HB (Shanghai)") was established on March 16, 2018
and cancelled on February 21, 2022.
The scope of the consolidated financial statements for this reporting period and its changes are detailed in the Note
"VIII. Consolidation scope changes" and "IX. Interests in other entities".
IV. Preparation Basis of Financial Statements
1. Preparation basis
This financial statement is prepared in accordance with the Accounting Standard for Business Enterprises -- Basic
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Standard issued by the Ministry of Finance, various special accounting standards, guideline for application of
accounting standard for business enterprises, ASBE interpretations and other relevant regulations (hereinafter
collectively referred to as "Accounting Standard for Business Enterprises") and No.15 of Compilation Rules for
Information Disclosure by Companies Offering Securities to the Public - General Provisions of Financial Reports
issued by China Securities Regulatory Commission.
2. Continual operation
There are no events affecting the Company's going-concern ability and it is expected that the Company will be able
to operate as a going concern within the next 12 months. The Company's financial statements are prepared on the
basis of the assumption of going concern.
V. Significant accounting policy and accounting estimate
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, 2022 and the business performance and cash flows of the Company in the first
half of 2022.
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 bookkeeping currency of the Company is RMB.
5. Accounting treatment of business combination involving enterprises under and not under common
control
Business combination involving enterprises under the same control: the assets and liabilities acquired by the
merging party in the business combination (including the goodwill formed by the final controlling party by
purchasing the merged party) shall be measured on the basis of the book value of the assets and liabilities of the
merged party in the consolidated financial statements of the final controlling party on the merger date. The
difference between the book value of the net assets obtained and the consideration paid for the combination (or total
par value of issued shares) is adjusted against capital reserve (capital stock premium); if the capital reserve (capital
stock premium) is not sufficient to absorb the difference, the retained earnings shall be adjusted.
Business combination not involving enterprises under common control: the cost of combination is the fair value of
the assets paid, liabilities incurred or assumed and equity securities issued by the acquirer on the acquiring date for
acquisition of the control right of the acquiree. If the cost of combination is greater than the share of the fair value
of the acquiree's identifiable net assets acquired in the combination, the difference is recognized as goodwill; if the
cost of combination is less than the share of the fair value of the acquiree's identifiable net assets acquired in the
combination, the difference is included in the profit and loss of the current period. The acquiree's identifiable assets,
liabilities and contingent liabilities obtained by the acquirer in the combination meeting the recognition conditions
are measured at fair value on the acquiring date.
The directly related expenses incurred for the business combination are included in the profit and loss of the current
period; the transaction costs associated with the issue of equity or debt securities for the business combination are
included in the initially recognized amounts of the equity or debt securities.
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6. Methods for preparing consolidated financial statements
1) Consolidation scope
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.
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
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continuously calculated from the acquisition date or the merging date and the goodwill according to the original
shareholding ratio, shall be included in the investment income in the period of lose of the control right. Other
comprehensive income related to the equity investment of the original subsidiary that can be reclassified into profit
and loss in the future, and other changes in owners' equity under the equity method are converted to the investment
income in the period of lose of the control right.
② Disposal of subsidiary by steps
For disposal of the equity investment in the subsidiary by steps through multiple transactions till loss of the control
right, the terms, conditions and economic impact of the disposal on each transaction in respect of the equity
investment of the subsidiary are subject to one or more of the following circumstances, which generally indicate
that the multiple transactions are package deals:
i. The transactions were entered into simultaneously or with consideration of their mutual influence;
ii. These transactions as a whole can only achieve a complete business result;
iii. The occurrence of one transaction depends on the occurrence of at least one other transaction;
iv. A transaction is not economical alone, but economic when considered with other transactions.
If each transaction belongs to a package deal, each transaction shall be subject to accounting treatment as a deal for
disposal of subsidiary and loss of the control right; the difference between the disposal price and the share of net
assets of the subsidiary corresponding to the disposal of investment before the loss of control right is recognized as
other comprehensive income in the consolidated financial statements and transferred into the current profit and loss
in the period of loss of control right.
If each transaction does not belong to a package deal, the equity investment of the subsidiary shall be subject to
accounting treatment without loss of control right before losing the control right; and accounting treatment shall be
carried out in accordance with the general disposal method of the subsidiary when losing the control right.
(3) Purchase of the minority equity of the subsidiaries
The difference between the long-term equity investment obtained due to the purchase of minority equity and the
share of the net assets to be enjoyed and continuously calculated from the acquisition date or merging date according
to the increased shareholding ratio is adjusted against the capital stock premium in the capital reserve in the
consolidated balance sheet; if the capital stock premium in the capital reserve is not sufficient to offset the difference,
the retained earnings shall be adjusted.
(4) Partial disposal of equity investment in subsidiaries without loss of control right
The difference between the disposal price and the disposal of long-term equity investment and the share of the net
assets to be enjoyed and continuously calculated from the acquisition date or merging date, is adjusted against the
capital stock premium in the capital reserve in the consolidated balance sheet; if the capital stock premium in the
capital reserve is not sufficient to offset the difference, the retained earnings shall be adjusted.
7. 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
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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. Please refer to Note "V.
22. Long-term equity investment" for details.
8. 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.
9. 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 bookkeeping.
At the balance sheet date, the balance of foreign currency monetary items is 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. The income and expense items in the income
statement are converted at the spot rate on the date of transaction.
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.
10. 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;
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－ 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 can irrevocably designate the
financial assets that should have been classified as those measured at the amortized cost or measured at fair value
of which changes are recorded into other comprehensive income as the financial assets measured at fair value of
which changes are recorded in current profit and loss.
Financial liabilities are classified at the initial recognition as: financial liabilities measured at fair value of which
changes are recorded in current profit and loss and financial liabilities measured at the amortized cost.
Financial liabilities that meet one of the following conditions may be designated at the initial recognition as the
financial liabilities measured at fair value of which changes are recorded in current profit and loss.
① This designation can eliminate or significantly reduce accounting mismatches.
② Manage and conduct performance evaluation of the financial liability portfolio or financial assets and financial
liability portfolio on the basis of fair value according to the enterprise risk management or investment strategy
set forth in the official written documents, and rep ort to the key management personnel within the enterprise
on this basis.
③ The financial liability contains embedded derivatives that need to be split separately.
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 changes are recorded into 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
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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 with fair value and with the changes included in current profit and loss
Financial assets measured at fair value of which changes are recorded in current profit and loss, including trading
financial assets, derivative financial assets, other non-current financial assets, etc., are initially measured at fair
value and related transaction expenses are recorded in current profit and loss. Such financial assets are subsequently
measured at the fair value and the change in the fair value is recorded into current profit and loss.
(5) Financial liabilities measured at fair values, changes of which recorded in the current profits or losses
Financial liabilities measured at fair value of which changes are recorded 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 borrowings, 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) De-recognition and transfer of financial assets
The Company shall derecognize the financial assets if one of the following conditions is satisfied:
－ Termination of the contractual right to collect the cash flow of financial assets;
－ The financial assets have been transferred, and almost all the risks and remuneration in its ownership have
been transferred to the transferee;
－ The financial assets have been transferred, and while the Company has neither transferred nor retained virtually
all of the risks and remuneration in the ownership of the financial assets, it has not retained control of the
financial assets.
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
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originally included in owner's equity directly (where the financial asset involved in the transfer is measured at
fair value and the change is recorded in other comprehensive income (debt instrument)).
If the partial transfer of the financial asset meets the de-recognition conditions, the book value of the overall
transferred financial asset is distributed between the derecognized and non-derecognized part according to the
relative fair value and the difference between the following two amounts is included in current profit and loss:
(1) The book value of derecognized part;
(2) Sum of the consideration of the derecognized part and the amount of corresponding derecognized part in the
total fair value changes originally included in owner's equity directly (where the financial asset involved in the
transfer is measured at fair value and the change is recorded in other comprehensive income (debt instrument)).
If the transfer of the financial asset does not meet the conditions of de-recognition, such financial asset shall continue
to be recognized and the consideration received shall be recognized as a financial liability.
4) De-recognition of financial liabilities
Where the current obligation of a financial liability has been discharged in whole or in part, such financial liability
or part thereof shall be derecognized; if the Company enters into an agreement with the creditor to replace the
existing financial liabilities by assuming new financial liabilities, and the contract terms of the new financial
liabilities and the existing financial liabilities are substantially different, the Company shall derecognize the existing
financial liabilities and recognize the new financial liabilities at the same time.
If all or part of the contract terms of the existing financial liabilities are substantially modified, the existing financial
liability or part thereof shall be derecognized, and the financial liabilities after the modification shall be recognized
as new financial liabilities.
When a financial liability is derecognized in whole or in part, the difference between the book value of the
derecognized financial liability and the consideration paid (including non-cash asset transferred out or the new
financial liability undertaken) is recorded in current profit and loss.
If the Company repurchases part of the financial liability, it shall allocate the overall book value of the financial
liability on the repurchase date according to the relative fair value of the continuing recognition part and the de-
recognition part. The difference between the book value allocated to the derecognized part and the consideration
paid (including non-cash asset transferred out or the liability undertaken) is recorded in current profit and loss.
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 assets 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 on a single or combined basis.
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.
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
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the loss provision resulting therefrom shall be recorded into the current profit and loss as an impairment loss or
profit.
By comparing the risk of default of financial instruments on the balance sheet date with the risk of default on the
initial recognition date, the Company determines the change of the default risk during the expected duration of the
financial instruments, so as to assess whether the credit risks of financial instruments have significantly increased
since the initial recognition. In general, the Company will consider that the credit risks of the financial instrument
has increased significantly if it is more than 30 days overdue, unless there is conclusive evidence that the credit
risks of such financial instrument have not increased significantly since the initial recognition.
If the credit risks of the financial instrument 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 there is objective evidence that a certain financial asset has suffered credit impairment, the Company shall make
provision for the impairment of the financial asset on an individual basis.
For receivables and contract assets formed by transactions regulated by Accounting Standards for Business
Enterprises No.14 - Revenue (2017), the Company always measures its loss provision at an amount equivalent to
the expected credit loss over the entire duration, whether o r not it contains major financing components.
For lease receivable, the Company shall always measure its loss provision according to the amount equivalent to
the expected credit loss within the entire duration.
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.
11. Notes receivable
Please refer to "12. Accounts receivable".
12. Accounts receivable
1) Impairment of notes receivable and accounts receivable
For notes receivable and accounts receivable, whether or not they contain major financing components, the
Company always measures its loss provision at an amount equivalent to the expected credit loss over the entire
duration, and the increase or reversal amount of the loss provision thus formed is recorded into the current profit
and loss as impairment loss or gain.
For notes receivable, the Company shall always measure its loss provision according to the amount equivalent to
the expected credit loss within the entire duration. Based on the credit risk characteristics of notes receivable, it is
divided into different portfolios:
Item Basis for recognition of combination and accrual method of provision for bad debt
If the acceptor is a bank with higher credit rating (such as large state-owned commercial banks and listed joint-
Banker's stock commercial banks), no provision for bad debts shall be made; if the acceptor is another bank or financial
acceptance bill company, 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 are transferred to notes receivables, the age of accounts is calculated continuously).
The Company combines the notes receivable-trade acceptance, accounts receivable (except in the consolidation)
and prepayments with similar credit risk characteristics (aging), and estimates the proportion of bad debt provision
for notes receivable -trade acceptance, accounts receivable and prepayments based on all reasonable and informed
information, including forward-looking information, as follows:
Accruing proportion of Accruing proportion of trade Accruing proportion of prepaid
Aging
accounts receivable (%) acceptance (%) accounts (%)
Within 1 year (including 1 year) 5 5 0
1-2 years 10 10 0
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2-3 years 30 30 50
3-4 years 50 50 100
4-5 years 80 80 100
More than 5 years 100 100 100
If there is objective evidence that a certain note receivable, account receivable or prepayment has incurred credit
impairment, the Company shall make a provision for bad debts for the note receivable or account receivable or
prepayment separately and recognize the expected credit loss.
2) Other receivables
For the measurement of impairment loss of other receivables other than accounts receivable and notes receivable
(including other receivables, long-term receivables, etc.), it shall be treated by referring to the "V. 10. Financial
instruments 6) Test method and accounting treatment method of financial assets (excluding receivables)
impairment".
13. Amounts receivable financing
Please refer to "10. Financial instruments".
14. Other receivables
Recognition method and accounting treatment method of the expected credit loss of other receivables
For the measurement of impairment loss of other receivables other than accounts receivable and notes receivable
(including other receivables, long-term receivables, etc.), it shall be treated by referring to the "V. 10. Financial
instruments 6) Test method and accounting treatment method of financial assets (excluding receivables)
impairment".
15. Inventory
1) Classification and cost of inventories
The inventories are classified as raw materials, low priced and easily worn articles, merchandise inventory, work in
progress, goods shipped in transit, goods processed by commission, wrappage, etc.
Inventories are initially measured at cost. The inventory cost includes procurement costs, processing costs, and other
expenses incurred to bring the inventory to its current location and condition.
2) Valuation method of delivered inventory
The sales of purchased finished products are priced according to the moving weighted average method at the time
of shipment; the sales of self-produced products are priced according to the standard cost method at the time of
shipment, and the difference between the actual cost and the standard cost shall be apportioned according to the
inventory and sales ratio at the end of the period.
3) Recognition basis of net realizable value of different types of inventories
The inventories shall be measured on the balance sheet date according to the cost of inventories or net realizable
value, whichever is lower. If the cost of the inventories is higher than the net realizable value, the inventory falling
price reserves shall be withdrawn. The net realizable value of inventories is the amount of the estimated sale price
of the inventories subtracted by the estimated cost about to occur in completion, estimated selling expenses and
related taxes in daily activities.
For the finished products, merchandise inventory, materials for sale and other merchandise inventories directly used
for sale, the net realizable value is recognized by the amount of the estimated sale price of the inventories subtracted
by the estimated selling expenses and related taxes in normal production and operation process; for the material
inventory required to be processed, the net realizable value is recognized by the amount of the estimated sale price
of the finished products subtracted by the estimated cost about to occur in completion, estimated selling expenses
and related taxes in normal production and operation process; for the inventories held to perform the sales contract
or labor contract, the net realizable value is calculated on the basis of contract price. If the number of the inventories
held is greater than the quantity ordered in the sales contract, the net realizable value of the excessive inventories is
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calculated on the basis of general sale price.
If the influence factors writing down the inventory value before have disappeared after withdrawal of the inventory
falling price reserves, resulting in the net realizable value of the inventories higher than the book value, the amount
written down is reversed within the originally withdrawn amount of inventory falling price reserves and the amount
reversed is included in current profits and losses.
4) Inventory system
The perpetual inventory system is adopted.
5) Amortization methods of low priced and easily worn articles and wrappage
(1) The 50-50 amortization method is adopted for low-value consumables;
(2) The packaging adopts the one-time write-off method.
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.
2) Recognition method and accounting treatment method of the expected credit loss of contractual assets
For the recognition methods and accounting treatment methods of the expected credit loss of the contract assets,
please refer to Note "V. 10. Financial Instruments 6) Test method and accounting treatment method of financial
assets impairment (excluding receivables)".
17. Contract cost
Contract cost includes the contract performance cost and the contract acquisition cost.
If the cost incurred by the Company for the performance of the contract is not within the scope of relevant standards
for inventory, fixed assets or intangible assets, it shall be recognized as an asset as a contract performance cost when
the following conditions are met:
The cost is directly related to a current or anticipated contract.
The cost increases the Company's future resources to meet its performance obligations.
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
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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.
18. Assets 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, deferred income tax assets, investment
properties that are subsequently measured at fair value, 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, and the impairment provision
for assets held for sale shall be made at the same time.
19. Debt investment
Please refer to "10. Financial instruments".
20. Other debt investments
Please refer to "10. Financial instruments".
21. Long-term receivables
N/A
22. Long-term equity investments
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.
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
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to offset, the retained earnings shall be adjusted. Where it implements the control upon the invested entity under the
same control due to additional investment or other reasons, the difference between the initial investment cost of the
long-term equity investment recognized according to the above principle and the sum of the book value of the long-
term equity investment before the combination plus the book value of the new consideration for the acquisition of
further shares on the merging date shall adjust the capital stock premium. If the capital stock premium is insufficient
to offset, the retained earnings shall be offset.
For the long-term equity investment in a subsidiary formed by business combination not under common control,
the combined cost recognized on the acquisition date is regarded as the initial cost of the long-term equity investment.
Where it implements the control upon the invested entity not under the same control due to additional investment
and other reasons, the sum of the book value of the original equity investment plus the new investment cost is taken
as the initial investment cost.
(2) Long-term equity investment acquired by means other than business combination
If the long-term equity investment is acquired by means of cash payment, the initial investment cost shall be the
purchase price actually paid.
If the long-term equity investment is acquired by issuing equity securities, the initial investment cost shall be the
fair value of the equity securities issued.
3) Subsequent Measurement and Approach for the Determination of Profit and Loss
(1) Long-term equity investment checked by cost method
The long-term equity investment made by the Company in its subsidiaries adopts the cost method, unless the
investment meets the conditions of holding for sale. Except for cash dividends or profits already declared but not
yet paid that are included in the price or consideration actually paid upon acquisition of the investment, the Company
recognize the investment income in current period in accordance with the attributable share of cash dividends or
profit distributions declared by the invested entity.
(2) Long-term equity investment checked by equity method
The long-term equity investment of joint ventures and cooperative enterprises shall be calculated by the equity
method. The initial in vestment cost of the long-term equity investment is not adjusted if it is greater than the
difference between the fair value share of the net identifiable assets of the invested entity in the investment; if the
initial investment cost of the long-term equity investment is less than the difference between the fair value share of
the net identifiable assets of the invested entity in the investment, it is recorded in current profit and loss and the
cost of the long-term equity investment is adjusted.
The Company recognizes the investment income and other comprehensive income according to its share of net
profit or loss and other comprehensive income of the invested entity, and adjusts the boot value of the long-term
equity investment accordingly; the Company decreases the book value of the long-term equity investment
accordingly in accordance with the share of the profit distribution or cash dividends declared by the invested entity;
for changes in owner's equity of the invested entity other than those arising from its net profit o r 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.
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
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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 properties
N/A
24. Fixed assets
(1) Recognition conditions
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 when
meeting 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.
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(2) Depreciation method
Class Depreciation method Depreciation life Residual rate Yearly depreciation
Straight-line
Houses and building 10-35 years 10.00% 2.57%-9%
depreciation
Straight-line
Machinery equipment 2-15 years 10.00% 6%-45%
depreciation
Transportation Straight-line
3-10 years 10.00% 9%-30%
equipment depreciation
Electronic equipment
Straight-line
and office equipment, 2-10 years 10.00% 9%-45%
depreciation
etc.
Depreciation of fixed assets is calculated by straight-line depreciation method and the depreciation rate is
determined according to the category, expected useful life and expected net residual rate of the fixed assets. For
fixed assets with provision for impairment, the amount of depreciation shall be recognized in future periods
according to the book value after deducting the provision for impairment and based on the usable life. If the
components of the fixed assets have different useful life or provide economic benefits for the Company in different
ways, the depreciation is calculated respectively by different depreciation rates or depreciation methods.
(3) Recognition basis, valuation and depreciation methods of fixed assets under financing lease
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.
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 properties, inventories and other
assets which can reach the intended usable or marketable status only after quite a long time of construction or
production activities.
2) Capitalization period of borrowing costs
Capitalization period refers to the period from the time point at which borrowing costs begin to be capitalized to the
time point at which borrowing costs cease to be capitalized, excluding the period during which the capitalization of
borrowing costs is suspended.
Capitalization begins when borrowing costs meet the following conditions:
(1) Asset expenditures have been incurred, including expenditures incurred in the form of cash payment, transfer
of non-cash assets or undertaking interest-bearing liabilities for the purchase and construction of or production
of assets eligible for capitalization;
(2) Borrowing costs have been incurred;
(3) The purchase, construction or production activities which are necessary to prepare the asset for its intended
use or sale have started.
When the purchase, construction or production of assets that meet the capitalization conditions reach the
predetermined usable or marketable state, the capitalization of borrowing costs shall cease.
3) Capitalization suspension period
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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. Right-of-use assets
Please refer to Note "V. 42: Lease".
30. Intangible assets
(1) Valuation method, service life and impairment test
1) Pricing methods for intangible assets
① The intangible assets are initially measured according to the cost;
The costs of purchased intangible assets include the purchase price, related taxes as well as other expenses incurred
to make the assets reach the intended serviceable conditions and attributable to the assets.
② Subsequent measurement
The Company analyzes and judges the useful life of the intangible assets when obtaining.
The intangible assets with limited useful life are amortized within the period when the intangible assets bring
economic benefits to the Company; the intangible assets that cannot be expected to bring economic benefits to the
Company are deemed to have uncertain life and are not amortized.
2) Estimation of useful life of intangible assets with limited life
Item Expected useful life Basis
Term of use specified in the land-use right
Land use right 50
certificate
Software use right 2-8 Useful life estimated by the management
Trademark right 5-10 Benefit period specified in the certificate of
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Item Expected useful life Basis
trademark use
Benefit period specified in the certificate of
Patent right 5-10
patent use
Franchised use right 3 Term of use stipulated in the contract
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) Accounting policy of expenditure for internal research and development
1) 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.
2) Specific conditions for the capitalization of expenditures in the development stage
The expenditure at the research stage is charged to the current profit and loss in occurrence. The expenditure at the
development stage can be recognized as intangible assets only when meeting the following conditions and charged
to the current profit and loss if not meeting the following conditions:
① Technically feasible to complete the intangible assets, so that they can be used or sold;
② It is intended to finish and use or sell the intangible assets;
③ Ways of intangible assets to generate economic benefits, including those can prove that the products generated
by the intangible assets can be sold or the intangible assets themselves can be sold and prove that the intangible
assets to be used internally are useful;
④ It is able to finish the development of the intangible assets, and able to use or sell the intangible assets, with
the support of sufficient technologies, financial resources and other resources; and
⑤ The development expenditures of the intangible assets can be reliably measured
If the expenditure at the research stage and the expenditure at the development stage cannot be distinguished, the
R&D expenditure incurred is fully charged to the current profit and loss.
The Company needs to comply with the disclosure requirements of the "Medical Device Business" in the No. 4
Guideline of Shenzhen Stock Exchange for Self-regulatory of Listed Companies - Information Disclosure by Growth
Enterprises.
31. Long-term assets impairment
Long-term assets such as long-term equity investment, 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
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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 the 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.
32. Long-term unamortized expenses
Long-term unamortized expenses refer to the expenses that have occurred but shall be burdened in current period
and later periods with the apportionment period more than one year.
Amortization method: long-term unamortized expenses are amortized on an average basis over the benefit period.
33. 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.
34. 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.
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② Defined benefit plan
The Company attributes the welfare obligations generated from the defined benefit plan to the period when the
employees provide services by the formula recognized according to the expected cumulative welfare unit method
and includes in current profits and losses or related asset costs.
The deficit or surplus formed from the present value of the defined benefit plan obligation subtracted by the fair
value of the defined benefit plan assets is recognized as a net liability or net asset of the defined benefit plan. In case
of surplus in the defined benefit plan, the Company measures the net assets of the defined benefit plan according to
the lower of the surplus and asset upper limits of the defined benefit plan.
All defined benefit plan obligations, including the obligations for payment within 12 months after the end of the
expected annual reporting period in which the employees provide services, are discounted according to the national
debts matching the defined benefit plan obligatory term and currency or the market return of the high-quality
corporation bonds active in the market on the balance sheet date.
The service costs generated from the defined benefit plan and the net interest of the net liabilities or net assets of
the defined benefit plan are included in current profits and losses or related asset costs; the changes from re-
measurement of the net liabilities or net assets of the defined benefit plan are included in other comprehensive
income and not written back to the profits and losses in subsequent accounting period. Upon the termination of the
original defined benefit plan, the part originally recorded into other comprehensive income within the scope of
rights and interests shall be carried forward to undistributed profit.
In the settlement of the defined benefit plan, the settlement profits or losses are recognized according to the balance
between the present value of the defined benefit plan obligation and the settlement price recognized on the
settlement date.
(3) Termination benefits accounting method
When providing dismission welfare, the Company shall recognize the employee compensation liabilities arising
from the dismission welfare and record it in the current profit and loss whenever is earlier below: when the Company
fails to unilaterally withdraw the dismission welfare due to termination of labor relation plan or downsizing
suggestions; when the Company recognizes the costs or expenses related to restructuring involving payment of
dimission welfare.
(4) Other long-term employee benefits accounting method
N/A
35. Lease liabilities
Please refer to Note "V. 42: Lease".
36. 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:
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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.
37. 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 share-based payment settled by cash 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.
38. 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
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in the issued preferred stock / perpetual bond, and not solely in legal form.
In case that the financial instrument such as perpetual bond / preferred stock issued by the Company meet one of
the following conditions, it, in whole or in part thereof, is classified as financial liabilities at the time of initial
recognition:
(1) There are contractual obligations which the Company cannot unconditionally avoid fulfilling by delivering
cash or other financial assets;
(2) It contains contractual obligations of delivering a variable number of its own equity instruments for settlement;
(3) It contains derivative instrument (such as equity transfer, etc.) that is settled with its own equity, and such
derivative instrument does not exchange a fixed number of its own equity instruments for a fixed amount of
cash or other financial assets for settlement;
(4) There are contract clauses that indirectly form contractual obligations;
(5) When the issuer liquidates, the perpetual bonds are in the same order of liquidation as the ordinary bonds and
other debts issued by the issuer.
In case that the financial instrument such as perpetual bond / preferred stock issued by the Company does not meet
one of the above conditions, it, in whole or in part thereof, is classified as equity instrument at the time of initial
recognition.
39. 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
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in accordance with the performance progress during that period, except where the performance progress cannot be
reasonably determined. Taking into account the nature of the goods or services, the Company will use the output
method or input method to determine the performance schedule. If the performance schedule cannot be reasonably
determined and the cost already incurred is expected to be compensated, the Company shall recognize the income
according to the cost already incurred until the performance schedule can be reasonably determined.
For performance obligations performed at a certain time point, the Company recognizes income at the time point
when the customer acquires control of the relevant goods or services. In determining whether the customer has
acquired control of goods or services, the Company considers the following indications:
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.
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.
Differences in income recognition accounting policies caused by different business modes for the same business
40. 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
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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.
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-operating income);
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.
41. Deferred income tax assets and deferred income tax liabilities
The income tax includes current income tax and deferred income tax. Except for the income tax arising from the
business combination and the transaction or item directly booked into the owners' equity (including other
comprehensive income), the Company will record the current income tax and deferred income tax into the current
profit and loss.
Deferred income tax assets and deferred income tax liabilities shall be calculated and recognized on the basis of the
difference (temporary difference) between the tax basis of the assets and liabilities and their book value.
For the deferred income tax assets recognized through deductible temporary difference, it is limited to the amount
of taxable income which is likely to be obtained to offset the deductible temporary difference in the future period.
For the deductible loss and tax deduction that can be carried forward to the subsequent year, the corresponding
deferred income tax assets are recognized within the limit of the future taxable income amount that is possibly
obtained to deduct the deductible loss and tax deduction.
For taxable temporary differences, except in special circumstances, the deferred income tax liability is recognized.
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Special circumstances in which deferred income tax assets or deferred income tax liabilities are not recognized
include:
Initial recognition of goodwill;
Transaction or item that is neither a business combination nor does it affect accounting profit and taxable income
(or deductible loss) at the time of occurrence.
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:
The tax payer has the legal right to settle the current income tax assets and current income tax liabilities on a net
basis;
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.
42. Leased
(1) Accounting treatment method of operating lease
Accounting policy effective on January 1, 2021.
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.
For rent concessions, such as rent reduction and deferred payment, directly caused by the COVID-19 epidemic and
agreed on the existing lease contracts, where the following conditions are satisfied, the Company shall adopt a
simplified method for all lease options, and shall not assess on whether there is a lease change or reevaluate the
lease classification:
1) The lease consideration after the concession is reduced or essentially unchanged compared with that before the
concession, where the lease consideration can not be discounted or discounted at the discount rate before
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concession;
2) The concession is only made for lease payments payable before June 30, 2022; If the lease payments payable
after June 30, 2022 is increased, it shall not affect the condition satisfaction; If the lease payments payable
after June 30, 2022 is decreased, it shall not satisfy this condition; The other terms and conditions of the lease
were found to be unchanged after considering qualitative and quantitative factors.
1. The Company acts as the lessee:
(1) Right-of-use assets
On the commencement date of the lease period, the Company recognizes right-of-use assets for leases other than
short-term leases and leases of low-value assets. The right-of-use assets is initially measured at cost. The cost
includes:
1) The initial measurement amount of the lease liabilities;
2) If there is a lease incentive for the lease payment paid on or before the start of the lease term, the amount of
the granted lease incentive shall be deducted;
3) The initial direct expenses incurred by the Company;
4) Costs expected to be incurred by the Company to disassemble and remove a leased asset, restore the site where
the leased asset is located, or restore the leased asset to the condition agreed upon under the terms of the lease
(excluding costs incurred to produce inventory).
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. 31. 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.
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After the commencement date of the lease term, in case of the following circumstances, the Company shall
remeasure the lease liabilities and adjust the corresponding right-of-use assets. If the book value of the right-of-use
assets has been reduced to zero, but the lease liabilities still need to be further reduced, the difference shall be
included in the current profit and loss:
1) In case of any change in the appraisal results of the purchase option, lease renewal option or termination option,
or the actual exercise of the aforementioned options is inconsistent with the original appraisal result, the
Company shall remeasure the lease liability according to the present value which is calculated based on the
changed lease payment and the revised discount rate;
2) In case of any change in substantial fixed payment, the estimated payable amount of the residual value of the
guarantee, or the index or ratio used to determine the lease payment, the Company shall remeasure the lease
liability according to the present value which is calculated based on the changed lease payment and the revised
discount rate. However, if the changes in lease payment results from the changes in floating interest rate, a
revised discount rate shall be used for calculation of the present value.
(3) Short-term leases and low-value asset leases
The Company chooses not to recognize right-of-use assets and lease liabilities for short-term leases and low-value
asset leases, and includes the relevant lease payments in the current profit and loss or related asset costs on a straight-
line basis over each period of the lease term. Short-term leases refer to the leases with a lease term of not more than
12 months and excluding purchase options on the commencement date of the lease term. Low-value asset leases
refers to the leases with a lower value when the single leased asset is a new asset. Where the Company subleases or
expects to sublease the leased assets, the original lease will not be a low-value asset lease.
(4) Lease changes
In case of any lease changes that meet the following conditions, the Company shall treat the lease change as a
separate lease for accounting treatment:
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.
(5) Rent concessions related to COVID-19
If the simplified method of rent concessions related to COVID-19 is adopted, the Company will not assess whether
there is any lease change, continues to calculate the interest expense of the lease liability at the same discount rate
as that before the concession and include it in the current profit and loss, and continues to withdraw the depreciation
of the right-of-use asset with the same method as that before the concession. In case of rent reduction or exemption,
the Company will treat the reduced rent as variable lease payment amount. When the original rent payment
obligation is relieved by reaching a concession agreement, the Company will offset the relevant asset costs or
expenses by the undiscounted amount or the amount discounted at the discount rate before concession, and adjust
the lease liabilities accordingly; In case of delayed payment of rent, the Company will offset the lease liabilities
recognized in the previous period upon actual payment.
For short-term leases and low-value asset leases, the Company will continue to credit the original contract rent into
relevant asset costs or expenses in the same manner as that before the concession. In case of rent reduction or
exemption, the Company will treat the rent reduced as variable lease payment amount and offset the relevant asset
costs or expenses during the reduction or exemption period; In case of deferred payment of rent, the Company will
recognize the rent payable as account payable in the original payment period, and offset the account payable
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recognized in the previous period upon actual payment.
2. The Company acts as the lessor:
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 in current profit or loss
or when they are actually incurred. In case of any change in the operating lease, the Company shall treat it as a new
lease for accounting treatment from the effective date of the change, and the advance receipts or lease receivables
related to the lease before the change shall be deemed to be the amount received for the new lease.
(2) Accounting for finance lease
On the commencement date of the lease term, the Company recognizes finance lease receivables for finance leases
and terminates the recognition of the finance lease assets. When the Company initially measures the finance lease
receivables, the net lease investment is regarded as the entry value of the finance lease receivables. The net lease
investment is the sum of the unguaranteed residual value and the present value of the lease receipts that have not
been received at the commencement date of the lease, discounted at the interest rate implicit in the lease.
The Company calculates and recognizes the interest income during each period of the lease term at a fixed periodic
rate. The derecognition and impairment of finance lease receivables shall be accounted for in accordance with Note
"V. 10. 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 that meet the following conditions, the Company shall treat the change as a separate lease
for accounting treatment:
1) The change expands the lease scope by adding the right to use one or more leased assets;
2) The increased consideration is equivalent to the amount of the separate price of the expanded part of the lease
upon adjustment based on the contract.
In case that the change of a financial lease is not accounted for as a separate lease, the Company shall deal with the
changed lease under the following circumstances:
1) If the change takes effect on the commencement date of the lease term, and the lease is classified as an operating
lease, the Company will account for it as a new lease from the effective date of the lease change, and take the
net lease investment before the effective date of the lease change as the book value of the leased asset;
2) If the change takes effect on the commencement date of the lease term, and the lease is classified as a financial
lease, the Company will conduct accounting treatment according to the policy in Note "V. 10. Financial
instruments" regarding the modification or renegotiation of contracts.
(3) Rent concessions related to COVID-19
For the operating leases for which the simplified method of rent concessions related to COVID-19 is adopted, the
Company will continue to recognize the original contract rent as lease income in the same method as that before the
concessions; In case of rent reduction or exemption, the Company will treat the rent reduced as variable lease
payment amount and offset the lease income during the reduction or exemption period; In case of deferred payment
of rent, the Company will recognize the rent receivable as account receivable in the original payment period, and
offset the account receivable recognized in the previous period when the rent is actually received.
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For the finance leases for which the simplified method of rent concessions related to COVID-19 is adopted, the
Company will continue to calculate the interest at the same discount rate as that before the concession and recognize
it as lease income. In case of rent reduction or exemption, the Company will treat the reduced rent as variable lease
payment amount. When the original rent collection right is waived by reaching a concession agreement, the
Company will offset the previously recognized lease income by the undiscounted amount or the amount discounted
at the discount rate before concession (the part insufficient to offset will be included in the investment income), and
adjust the finance lease receivables accordingly; In case of delayed collection of rent, the Company will offset the
finance lease receivables recognized in the previous period upon actual receipt.
3. Sale-and-leaseback transaction
The Company evaluates and determines whether the asset transfer in the sale and leaseback transaction is a sale in
accordance with the principles described in the Note "V. 39. Revenue".
(1) As a lessee
If the transfer of an asset in a sale-and-leaseback transaction is a sale, the Company, as the lessee, measures the
right-of-use asset resulting from the sale-and-leaseback at the portion of the original asset's book value that relates
to the right to use acquired by the leaseback, and recognizes a gain or loss related to the right transferred to the
lessor only; if the transfer of an asset in a sale-and-leaseback transaction is not a sale, the Company, as the lessee,
continues to recognize the transferred asset and at the same time recognizes a financial liability equal to the transfer
income. Please refer to the Note "V. 10 Financial instruments" for the accounting treatment of financial liabilities.
(2) As a lessor
If the transfer of assets in a sale-and-leaseback transaction is a sale, the Company, as a lessor, accounts for the
purchase of the assets, and accounts for the lease of the assets in accordance with the aforementioned policy of "2.
The Company as a lessor"; if the transfer of assets in a sale-and-leaseback transaction is not a sale, the Company,
as a lessor, does not recognize the transferred assets, but recognizes a financial asset equal to the transfer income.
Please refer to the Note "V. 10 Financial instruments" for the accounting treatment of financial assets.
Accounting policy before January 1, 2021
Leases are classified into finance lease and operating lease. Finance lease refers to the lease where all risks and
rewards related to asset ownership have been substantively transferred. Operating leases refer to leases other than
financial leases.
For rent concessions, such as rent reduction and deferred payment, directly caused by the COVID-19 epidemic and
agreed on the existing lease contracts, where the following conditions are satisfied, the Company shall adopt a
simplified method for all lease options (reminder: if not adopted for all leases, the nature of the lease contracts
treated with the simplified method shall also be disclosed, but the selection of the simplified method shall be
consistently applied to similar lease contracts), and shall not assess on whether there is a lease change or reevaluate
the lease classification:
The lease consideration after the concession is reduced or essentially unchanged compared with that before the
concession, where the lease consideration can not be discounted or discounted at the discount rate before concession;
The concession is only made for lease payments payable before June 30, 2021; If the lease payments payable after
June 30, 2021 is increased, it shall not affect the condition satisfaction; If the lease payments payable after June 30,
2021 is decreased, it shall not satisfy this condition;
The other terms and conditions of the lease were found to be unchanged after considering qualitative and
quantitative factors.
1. Accounting for operating lease
(1) The lease payments made by the Company for leased assets shall be amortized on a straight-line basis over the
entire lease term without deducting the rent-free period and included in the current expense. The initial direct
expenses paid by the Company in connection with the lease transaction are included in the current expenses.
When the lessor of the asset bears the lease-related expenses that should be borne by the Company, the Company
shall deduct such expenses from the total rent, apportion the deducted rent expenses in the lease term and record
them into the current expenses.
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For the operating lease for which the simplified method of rent concessions related to COVID-19 is adopted, the
Company will continue to include the original contract rent in the relevant asset costs or expenses in the same
manner as that before the concession. In case of rent reduction or exemption, the Company will treat the rent reduced
as contingent rent and record it in profit and loss during the reduction or exemption period; In case of deferred
payment of rent, the Company will recognize the rent payable as account payable in the original payment period,
and offset the account payable recognized in the previous period upon actual payment.
(2) The lease payments received by the Company for leasing assets shall be amortized on a straight-line basis over
the entire lease term without deducting the rent-free period and recognized as lease-related income. The initial
direct expenses paid by the Company in connection with the lease transaction shall be included in the current
expenses; if the amount is large, it will be capitalized and recorded into the current income by stages according
to the same basis as the lease-related income recognition throughout the lease period.
When the Company bears the lease-related expenses that should be borne by the leasee, the Company shall deduct
such expenses from the total rental income, apportion them according to the deducted rental expenses during the
lease period.
For the operating leases for which the simplified method of rent concession related to COVID-19 is adopted, the
Company will continue to recognize the original contract rent as lease income in the same method as that before the
concession; In case of rent reduction or exemption, the Company will treat the rent reduced as contingent rent and
offset the lease income during the reduction or exemption period; In case of deferred payment of rent, the Company
will recognize the rent receivable as account receivable in the original payment period, and offset the account
receivable recognized in the previous period when the rent is actually received.
(2) Accounting treatment method of finance lease
(1) Assets acquired under finance leases: on commencement of the lease term, the Company takes the lower of the
fair value of the leased asset and the present value of the minimum lease payment as the entry value of the
leased asset, and the minimum lease payment as the entry value of the long-term payables, and their balance
as the unrecognized financial expenses. The Company adopts the effective interest rate method to amortize the
unrecognized financing costs within the period of the asset lease and record them into financial expenses. The
initial direct expenses incurred by the Company shall be included in the value of the leased assets.
For the finance leases for which the simplified method of rent concessions related to COVID-19 is adopted, the
Company will continue to recognize unrecognized financial expenses as current financial expenses at the same
discount rate as that before the concession and recognize it as lease income, and continue to withdraw the
depreciation of the assets acquired under finance leases with the same method as that before concession; In case of
rent reduction or exemption, the Company will treat the reduced rent as contingent rent, include it in current profit
and loss when the original rent payment obligation is relieved by reaching a concession agreement, and adjust long-
term payables accordingly, or make a discount at the pre-concession discount rate before concession and include it
in current profit and loss and adjust the unrecognized financial expenses; In case of delayed payment of rent, the
Company will offset the long-term payables recognized in the previous period upon actual payment.
(2) Assets rent out under finance leases: upon commencement of the lease, the Company recognizes the difference
between the s um of the receivable finance lease amount and the unguaranteed residual value and its present
value as unrealized financing income, and recognizes it as rental income in each period in which the rent is
received in the future. The initial direct expenses incurred by the Company in connection with the leasing
transaction shall be included in the initial measurement of the finance lease receivable, and the amount of
income recognized during the lease term shall be reduced.
For the finance leases for which the simplified method of rent concessions related to COVID-19 is adopted, the
Company will continue to recognize the unrealized financing income as lease income at the same interest rate
implicit in the lease as that before the concession. In case of rent reduction or exemption, the Company will treat
the reduced rent as contingent rent. When the original rent collection right is waived by reaching a concession
agreement, the Company will offset the previously recognized lease income with the part insufficient to offset will
be included in the investment income, and adjust the long-term receivables accordingly, or make a discount at the
pre-concession discount rate before concession and include it in current profit and loss and adjust the unrecognized
financial expenses accordingly; In case of delayed collection of rent, the Company will offset the long-term
receivables recognized in the previous period upon actual receipt.
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43. Other significant accounting policy and accounting estimate
1) Discontinued operation
Termination of 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.
2) Hedge accounting
(1) Classification of hedging
1) A fair value hedge refers to a hedge of the fair value change risk of an asset or liability that has been recognized
and a certain commitment that has not been recognized (except foreign exchange risk).
2) A cash flow hedge refers to a hedge of the risk of changes in cash flow arising from a particular type of risk
relating to a recognized asset or liability, an anticipated transaction that is likely to occur, or the foreign
exchange risk contained in an unrecognized firm commitment
3) A hedge of net investment in overseas operations refers to a hedge of foreign exchange risks of net investment
of overseas operations. Net investment in overseas operations refers to the equity share of the enterprise in the
net assets of overseas operations.
(2) Designation of hedging relationship and identification of hedging effectiveness
At the beginning of the hedging relationship, the Company has a formal designation of the hedging relationship and
has prepared formal written documents on the hedging relationship, risk management objectives and hedging
strategies. The documents specify the nature and quantity of the hedging instrument, the nature and quantity of the
hedged items, the nature of the hedged risk, type of hedging, and the Company's evaluation of the effectiveness of
the hedging instrument. Hedging effectiveness refers to the degree to which the change in the fair value or cash flow
of the hedging instrument can offset the change in the fair value or cash flow of the hedged item caused by the
hedged risk.
The Company continuously evaluates the effectiveness of hedging and judges whether the hedging meets the
requirements of hedging accounting for effectiveness during the accounting period in which the hedging relationship
is designated. If it is not satisfied, the hedging relationship shall be terminated.
The application of hedge accounting shall meet the following requirements for the effectiveness of hedging:
1) There is an economic relationship between the hedged item and the hedging instrument.
2) In the value changes caused by the economic relationship between the hedged item and the hedging instrument,
the influence of credit risk does not play a dominant role.
3) Adopting the appropriate hedge ratio will not cause the imbalance between the relative weight of the hedged
item and the hedging instrument, thus generating accounting results inconsistent with the hedge accounting
objectives. If the hedge ratio is no longer appropriate, but the hedging risk management objectives have not
changed, the number of hedged items or hedging instruments shall be adjusted to make the hedge ratio meet
the requirements of effectiveness again.
(3) Hedge accounting treatment methods
1) Fair value hedging
Changes in the fair value of hedge derivative instruments are recorded in the current profit and loss. Changes formed
by the fair value of the hedged item due to the hedging risk shall be included in the current profit and loss, and the
book value of the hedged item shall be adjusted simultaneously.
For fair value hedging related to financial instruments measured at amortized cost, the adjustments to the book value
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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).
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.
3) 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 the components of the Company that meet the following conditions at the same time:
(1) The component is able to generate revenue and incur expenses in its daily activities; (2) The management of the
Company can regularly evaluate the operating results of the component to determine the allocation of resources to
it and evaluate its performance; (3) The Company can obtain relevant accounting information such as the financial
position, operating results and cash flow of the component. If two or more operating segments have similar
economic characteristics and meet certain conditions, they may be merged into one operating segment.
4) 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
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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.
44. Significant accounting policy and accounting estimate change
(1) Changes in significant accounting policies
□ Applicable Not applicable
(2) Changes in major accounting estimates
□ Applicable Not applicable
45. Other
NA
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
Added value tax the tax law. After deduction of the 13%, 9%, 6%, 3%
withholdings on VAT allowed to deduct in
current period, the balance is the VAT
payable
Consumption tax N/A N/A
Actual paid value added tax (including the
Urban maintenance and construction tax 7%, 5%
exemption part) and consumption tax
Corporate income tax Levied by income tax payable 25%, 16.5%, 15%, 2.5%
Actual paid value added tax (including the
Education surcharge 3%
exemption part) and 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
15.00%
(Chongyang), Winner Medical (Jiayu), Qianhai Purcotton,
Longterm Medical, Guilin Latex
Winner Medical (Hong Kong) 16.50%
Hangzhou Shengyi, Xi'an Longtemu, Deqing Longterm See 2. Tax preference (8)
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, corporate income tax can be paid at a preferential
tax rate of 15.00%.
(2) According to the Notice on Publicizing the List of the Second Batch of High-tech Enterprises to be Identified
in Hubei Province in 2019, Winner Medical (Huanggang) was identified as the second batch of high-tech
enterprises with the certificate number GR201942002414. From 2019 to 2021, Winner Medical (Huanggang)
could pay corporate income tax at the preferential tax rate of 15.00%.
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(3) Qianhai Purcotton was established on July 21, 2015, with its domicile located in Shenzhen Qianhai Shenzhen-
Hong Kong Cooperation Zone. According to the Notice of Enterprise Income Tax Preferential Policies and
Preferential Directory in Shenzhen Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone
of Hengqin New Fujian Pingtan Comprehensive Experimental Area (C.S. [2014] No. 26) issued by the
Ministry of Finance and State Taxation Administration, Qianhai Purcotton pays its enterprise income tax at the
tax rate of 15.00%.
(4) According to the Notice on Publicizing the List of Fourth Batch of High-tech Enterprises to be Identified in
Hubei Province in 2021 issued by the Leading Group Office of National High-tech Enterprise Accreditation
Administration on December 23, 2021, Winner Medical (Jingmen) obtained the High-tech Enterprise
Certificate (Certificate No.: GR202142004475) on December 03, 2021. From 2021 to 2023, corporate income
tax can be paid at a preferential tax rate of 15.00%.
(5) According to the Notice on Publicizing the List of Fifth Batch of High-tech Enterprises to be Identified in
Hubei Province in 2021 issued by the Leading Group Office of National High-tech Enterprise Accreditation
Administration on December 23, 2021, Winner Medical (Jiayu) obtained the High-tech Enterprise Certificate
(Certificate No.: GR202142005582) on December 17, 2021. From 2021 to 2023, corporate income tax can be
paid at a preferential tax rate of 15.00%.
(6) According to the Notice on Publicizing the List of Second Batch of High-tech Enterprises to be Identified in
Hubei Province in 2021 on December 15, 2021, Winner Medical (Chongyang) and Winner Medical (Tianmen)
obtained the High-tech Enterprise Certificates (Certificate No.: GR202142000579, GR202142002367) on
November 15, 2021. The prepayment of corporate income tax shall be at a rate of 15.00% in 2021.
(7) Longterm Medical was recognized as a high-tech enterprise on November 13, 2017 to pay corporate income
tax at a preferential tax rate of 15% with a validity period of three years until November 13, 2020. Longterm
Medical obtained an updated high-tech enterprise qualification certificate on December 1, 2020 to pay
corporate income tax at a preferential tax rate of 15% with a validity period of three years until November 30,
2023.
(8) 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%. At present, the annual
taxable income of these three companies is less than RMB 1 million, and the actual tax rate is 2.5%.
(9) According to the Notice on Publicizing the List of First Batch of Identified High-tech Enterprises in Guangxi
Zhuang Autonomous Region in 2027 (G. K. G. Z [2017] No. 280), Guilin Latex was recognized as a high-tech
enterprise to pay corporate income tax at a preferential tax rate of 15% with a validity period of three years
until July 30, 2020. Guilin Latex obtained an updated high-tech enterprise qualification certificate on October
23, 2020 to pay corporate income tax at a preferential tax rate of 15% with a validity period of three years until
October 22, 2023.
3. Other
NA
VII. Notes to items in consolidated financial statements
1. Monetary capital
Unit: yuan
Item Closing Balance Beginning balance
Cash on hand 125,582.80 65,897.39
Bank deposit 4,143,197,161.70 4,088,546,364.65
Other monetary capital 70,345,764.26 185,326,064.78
Total 4,213,668,508.76 4,273,938,326.82
Where: total amount deposited
16,799,464.52 11,841,008.78
abroad
Total amount of funds with 70,122,981.84 185,326,064.78
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restrictions on use due to mortgage, pledge
or freeze
Other description
Wherein, the breakdown of monetary funds that are restricted in use due to mortgages, pledges or freezes, restricted in withdrawal due
to centralized management of funds, as well as those placed outside China with restrictions on repatriation of funds, is as follows:
Item Closing Balance Beginning balance
L/C deposit*1 50,672,072.00 27,597,366.13
Deposit for bank acceptance bill*2 11,119,000.00 -
Performance bond*3 2,354,080.27 2,162,025.10
Balance of other restricted monetary funds * 4 5,977,829.57 155,566,673.55
Total 70,122,981.84 185,326,064.78
*1 L/C deposit refers to the deposit deposited by Winner Medical and Winner Medical (Tianmen) to for the processing of letters of
credit.
*2 Deposit for bank acceptance bill refers to the deposit deposited by Longterm Medical for issuance of acceptance bill.
*3 The performance bond is the deposit deposited by Winner Medical (Hong Kong) in the bank for transactions with customers.
*4 Balance of other restricted monetary funds refers to the balance of special deposit accounts for restricted non-budget units opened
by Shenzhen Purcotton and PureH2B in accordance with the regulations of prepaid card issuance formulated by the Ministry of
Commerce.
2. Trading financial assets
Unit: yuan
Item Closing Balance Beginning balance
Financial assets measured with fair value
and with the changes included in current 2,726,914,556.35 3,130,529,709.10
profit and loss
Including:
Bank financial products 1,413,871,232.59 1,778,361,521.42
Forward foreign exchange contract 0.00 6,334,756.86
Trust products 1,313,043,323.76 1,345,833,430.82
Including:
Total 2,726,914,556.35 3,130,529,709.10
Other description:
3. Derivative financial assets
Unit: yuan
Item Closing Balance Beginning balance
Other description:
4. Notes receivable
(1) Classified presentation of notes receivable
Unit: yuan
Item Closing Balance Beginning balance
Unit: yuan
Closing Balance Beginning balance
Book balance Provision for bad debt Book balance Provision for bad debt
Class Book Book
Proportio Accruing value Proportio Accruing value
Amount Amount Amount Amount
n proportion n proportion
Including:
Including:
If the bad debt provision of notes receivable is withdrawn according to the general model of expected credit loss, please refer to the
disclosure method of other receivables to disclose the relevant information of bad debt provision:
□ Applicable Not applicable
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(2) Provision, recovery or reversal of bad debt reserves in the current period
Provision for bad debts in current period:
Unit: yuan
Amount of change in current period
Beginning
Class Recovered or Closing Balance
balance Accrual Write-off Other
reversed
Where the amount of bad debt provision recovered or reversed is important:
□ Applicable Not applicable
(3) Notes receivable pledged by the Company at the end of the period
Unit: yuan
Item Pledged amount at the end of the period
(4) 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 Amount with recognition not terminated at
Item
end of the period the end of the period
(5) Notes transferred to accounts receivable by the Company at the end of the period due to failure of the
drawer to perform
Unit: yuan
Amount transferred to accounts receivable at the end of the
Item
period
Other description
(6) Notes receivable actually written off at the current period
Unit: yuan
Item Amount written off
Write-off of important notes receivable:
Unit: yuan
Write-off Whether the
Nature of notes Reasons for write-
Unit name Amount written off procedures payments arise from
receivable off
performed related transactions
Description of write-off notes receivable:
5. Accounts receivable
(1) Classified disclosure of accounts receivable
Unit: yuan
Closing Balance Beginning balance
Book balance Provision for bad debt Book balance Provision for bad debt
Class Book Book
Proportio Accruing value Proportio Accruing value
Amount Amount Amount Amount
n proportion n proportion
Includi
ng:
Accounts
receivable
of
1,056,460 53,698,39 1,002,762 816,650,6 41,104,05 775,546,5
provision 100.00% 5.08% 100.00% 5.03%
,600.44 1.15 ,209.29 41.20 1.78 89.42
for bad
debt by
combinati
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on
Includi
ng:
1,056,460 53,698,39 1,002,762 816,650,6 41,104,05 775,546,5
Total 100.00% 5.08% 100.00% 5.03%
,600.44 1.15 ,209.29 41.20 1.78 89.42
Provision for bad debt by combination: aging analysis method
Unit: yuan
Closing Balance
Name
Book balance Provision for bad debt Accruing proportion
Within 1 year (including 1
1,046,576,065.98 52,328,803.29 5.00%
year)
1~2 years (including 2 years) 8,784,226.49 878,422.65 10.00%
2~3 years (including 3 years) 650,385.68 195,115.71 30.00%
3~4 years (including 4 years) 266,722.93 133,361.47 50.00%
4~5 years (including 5 years) 102,556.66 82,045.33 80.00%
More than 5 years 80,642.70 80,642.70 100.00%
Total 1,056,460,600.44 53,698,391.15
Description of the basis for determining the combination:
Recognition criteria and description of bad debts by combination: On June 30, 2022, 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, 2022 is estimated based on
the aging of accounts and estimated at the original loss ratio.
If the bad debt provision of accounts receivable is withdrawn according to the general model of expected credit loss, please refer to
the disclosure method of other receivables to disclose the relevant information of bad debt provision:
□ Applicable Not applicable
Disclosure by aging
Unit: yuan
Aging Closing Balance
Within 1 year (including 1 year) 1,046,576,065.98
1~2 years 8,784,226.49
2~3 years 650,385.68
More than 3 years 449,922.29
3~4 years 266,722.93
4~5 years 102,556.66
More than 5 years 80,642.70
Total 1,056,460,600.44
(2) Provision, recovery or reversal of bad debt reserves in the current period
Provision for bad debts in current period:
Unit: yuan
Amount of change in current period
Beginning
Class Recovered or Closing Balance
balance Accrual Write-off Other
reversed
Provision for bad
debt of accounts 41,104,051.78 18,659,980.51 5,879,391.59 186,249.55 53,698,391.15
receivable
Total 41,104,051.78 18,659,980.51 5,879,391.59 186,249.55 53,698,391.15
Where the amount of bad debt provision recovered or reversed is important:
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Unit: yuan
Unit name Amount recovered or reversed Recovery way
(3) Accounts receivable actually written off at the current period
Unit: yuan
Item Amount written off
Irrecoverable balance receivable 186,249.55
Write-off of important accounts receivable:
Unit: yuan
Write-off Whether the
Nature of accounts Reasons for write-
Unit name Amount written off procedures payments arise from
receivable off
performed related transactions
Description of write-off accounts receivable:
(4) Accounts receivable with Top 5 ending balances by debtor
Unit: yuan
Ending balance of accounts Proportion in total other ending Ending balance of bad debt
Unit name
receivable balance of accounts receivable provision
First 43,760,936.31 4.14% 2,188,046.82
Second 32,648,629.50 3.09% 1,632,431.48
Third 26,752,033.96 2.53% 1,337,601.70
Fourth 25,220,932.55 2.39% 1,261,046.63
Fifth 24,028,702.91 2.27% 1,201,435.15
Total 152,411,235.23 14.42%
(5) Accounts receivable derecognized due to transfer of financial assets
NA
(6) Amount of assets and liabilities formed by transferring accounts receivables and continuing
involvement
NA
Other description:
6. Amounts receivable financing
Unit: yuan
Item Closing Balance Beginning balance
Notes receivable - banker's acceptance bill 29,770,412.07 9,940,272.21
Total 29,770,412.07 9,940,272.21
Changes in the increase and decrease of receivables financing and changes in the fair value in the current period
□ Applicable Not applicable
If the impairment provision of receivables financing is withdrawn according to the general model of expected credit loss, please refer
to the disclosure method of other receivables to disclose the relevant information of impairment provision:
□ Applicable Not applicable
Other description:
7. Advances to suppliers
(1) Presentation of advances to suppliers by aging
Unit: yuan
Aging Closing Balance Beginning balance
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Amount Proportion Amount Proportion
Within 1 year 419,561,887.69 99.71% 104,201,209.67 94.33%
1~2 years 1,225,327.68 0.29% 6,261,384.71 5.67%
Total 420,787,215.37 110,462,594.38
Reasons for non-timely settlement of important advances from customers with the aging more than 1 year:
Not applicable.
(2) Advances to suppliers with Top 5 ending balances by prepayment object
Proportion in total ending
Advance object Closing Balance
balance of advances (%)
First 233,196,958.77 55.42%
Second 26,352,196.69 6.26%
Third 19,256,447.50 4.58%
Fourth 9,237,549.34 2.20%
Fifth 5,686,389.90 1.35%
Total 293,729,542.20 69.81%
Other description:
8. Other receivables
Unit: yuan
Item Closing Balance Beginning balance
Other receivables 321,798,808.08 329,179,077.01
Total 321,798,808.08 329,179,077.01
(1) Interest receivable
1) Classification of interest receivable
Unit: yuan
Item Closing Balance Beginning balance
2) Important overdue interest
Unit: yuan
Whether there is
Borrower Closing Balance Overdue time Overdue reason impairment and its
judgment basis
Other description:
3) Provision for bad debt
□ Applicable Not applicable
(2) Dividends receivable
1) Classification of dividends receivable
Unit: yuan
Project (or invested unit) Closing Balance Beginning balance
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) Provision for bad debt
□ Applicable Not applicable
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Other description:
(3) Other receivables
1) Other receivables classified by nature
Unit: yuan
Nature of payment Ending book balance Beginning book balance
Compensation for investment and
233,655,320.00 238,655,320.00
construction project of Heyuan Winner
Margin and deposit 110,776,324.02 112,419,848.22
Export drawback 7,309,079.43
Employee pretty cash 4,325,411.77 3,238,544.33
Other 25,445,142.44 15,766,563.91
Total 374,202,198.23 377,389,355.89
2) Provision for bad debt
Unit: yuan
Stage 1 Stage 2 Stage 3
Expected credit losses Expected credit losses
Provision for bad debt Expected credit losses over the entire duration over the entire duration Total
over the next 12 months (no credit impairment (credit impairment has
occurred) occurred)
Balance on January 1,
36,469,649.34 11,740,629.54 48,210,278.88
2022
Balance on January 1,
2022 in the current
period
Accrual in current
5,306,099.38 5,306,099.38
period
Reversal in current
1,112,988.11 1,112,988.11
period
Balance on June 30,
40,662,760.61 11,740,629.54 52,403,390.15
2022
Changes in book balance with significant changes in the current period of provision for loss
□ Applicable Not applicable
Disclosure by aging
Unit: yuan
Aging Closing Balance
Within 1 year (including 1 year) 44,171,307.73
1~2 years 27,133,898.82
2~3 years 244,245,037.51
More than 3 years 58,651,954.17
3~4 years 15,598,377.40
4~5 years 34,010,114.42
More than 5 years 9,043,462.35
Total 374,202,198.23
3) Provision, recovery or reversal of bad debt reserves in the current period
Provision for bad debts in current period:
Unit: yuan
Amount of change in current period
Beginning
Class Recovered or Closing Balance
balance Accrual Write-off Other
reversed
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Provision for bad
debts of other 48,210,278.88 5,306,099.38 1,112,988.11 52,403,390.15
receivables
Total 48,210,278.88 5,306,099.38 1,112,988.11 52,403,390.15
Where the amount of bad debt provision reversed or recovered is important:
Unit: yuan
Unit name Amount reversed or recovered Recovery way
4) Other receivable actually written off at the current period
Unit: yuan
Item Amount written off
Write-off of important other receivables:
Unit: yuan
Write-off Whether the
Nature of other Reasons for write-
Unit name Amount written off procedures payments arise from
receivables off
performed related transactions
Description of write-off of other receivables
5) Other receivables with Top 5 ending balances by debtor
Unit: yuan
Proportion in total
Ending balance of
Unit name Nature of payment Closing Balance Aging other ending
bad debt provision
balance receivable
Receivables related
First 233,655,320.00 2-3 62.44% 35,048,298.00
to Heyuan project
Receivable advance
Second 5,870,314.77 1-2 1.57% 5,870,314.77
payments
Third Margin and deposit 5,088,270.42 1-2 1.36% 254,413.51
Fourth Margin and deposit 2,746,332.73 1-2 0.73% 137,316.64
Fifth Margin and deposit 2,311,115.80 1-2 0.62% 115,555.79
Total 249,671,353.72 66.72% 41,425,898.71
6) Accounts receivable involving government subsidies
Unit: yuan
Name of government Estimated collection
Unit name Closing Balance Ending aging
subsidy project time, amount and basis
Not applicable.
7) Other receivables derecognized due to transfer of financial assets
Not applicable.
8) Amount of assets and liabilities formed by transferring other receivables and continuing involvement
Not applicable.
Other description:
9. Inventory
Does the Company need to follow the disclosure requirements of real estate industry
No
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(1) Inventory classification
Unit: yuan
Closing Balance Beginning balance
Inventory falling Inventory falling
price reserves or price reserves or
Item provision for provision for
Book balance impairment of Book value Book balance impairment of Book value
contract contract
performance performance
costs costs
Raw materials 340,448,507.55 10,087,607.17 330,360,900.38 250,762,666.63 5,117,956.28 245,644,710.35
Work in process 177,205,514.74 5,233,445.24 171,972,069.50 172,991,958.16 4,599,718.11 168,392,240.05
Merchandise
1,387,049,883.22 126,935,379.76 1,260,114,503.46 1,256,964,242.78 100,692,345.17 1,156,271,897.61
inventory
Semi-finished
products shipped 29,319,155.18 29,319,155.18 16,843,633.88 16,843,633.88
in transit
Low priced and
easily worn 17,293,152.94 4,768.48 17,288,384.46 10,226,415.09 1,852.99 10,224,562.10
articles
Total 1,951,316,213.63 142,261,200.65 1,809,055,012.98 1,707,788,916.54 110,411,872.55 1,597,377,043.99
(2) Inventory falling price reserves and provision for impairment of contract performance costs
Unit: yuan
Amount increased in current period Amount decreased in current period
Beginning
Item Reversal or Closing Balance
balance Accrual Other Other
write-back
Raw materials 5,117,956.28 10,629,905.21 5,660,254.32 10,087,607.17
Work in process 4,599,718.11 4,963,356.07 4,329,628.94 5,233,445.24
Merchandise
100,692,345.17 79,537,814.77 53,294,780.18 126,935,379.76
inventory
Low priced and
easily worn 1,852.99 5,015.13 2,099.64 4,768.48
articles
Total 110,411,872.55 95,136,091.18 63,286,763.08 142,261,200.65
(3) Description of ending balance of inventory containing the capitalized amount of borrowing costs
(4) Description of current amortization amount of contract performance cost
10. Contract assets
Unit: yuan
Closing Balance Beginning balance
Item Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
Amount and reason of significant change in the book value of contract assets in current period:
Unit: yuan
Item Amount of change Reason for change
If the impairment provision of contract assets is accrued according to the general model of expected credit loss, please refer to the
disclosure method of other receivables to disclose the relevant information of impairment provision:
□ Applicable Not applicable
Provision for impairment of contract assets in current period:
Unit: yuan
Accrual in current Reversal in current Write off/verification in
Item Reasons
period period current period
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Other description
11. Assets held for sales
Unit: yuan
Ending book Provision for Ending book Estimated Estimated
Item Fair value
balance impairment value disposal cost disposal time
Other description
12. Non-current assets due within a year
Unit: yuan
Item Closing Balance Beginning balance
Important debt investments/other debt investments
Unit: yuan
Closing Balance Beginning balance
Debt item Maturity Maturity
Book value Coupon rate Actual rate Book value Coupon rate Actual rate
date date
Other description:
13. Other current assets
Unit: yuan
Item Closing Balance Beginning balance
Return cost receivable 761,415.68 733,984.30
Interest on fixed deposit / large deposit 67,754,605.45 50,158,601.37
VAT input tax to be deducted / uncertified
15,059,421.72 43,055,676.36
input tax
Prepaid corporate income tax 3,513,266.27 17,873,716.95
Unamortized expenses 26,395,912.04 5,174,471.98
Other 2,598,416.58 1,763,374.60
Total 116,083,037.74 118,759,825.56
Other description:
14. Debt investment
Unit: yuan
Closing Balance Beginning balance
Item Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
Important debt investments
Unit: yuan
Closing Balance Beginning balance
Debt item Maturity Maturity
Book value Coupon rate Actual rate Book value Coupon rate Actual rate
date date
Provision for impairment
Unit: yuan
Stage 1 Stage 2 Stage 3
Expected credit losses Expected credit losses
Provision for bad debt Expected credit losses over the entire duration over the entire duration Total
over the next 12 months (no credit impairment (credit impairment has
occurred) occurred)
Balance on January 1,
2022 in the current
period
Changes in book balance with significant changes in the current period of provision for loss
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□ Applicable Not applicable
Other description:
15. Other debt investments
Unit: yuan
Accumulate
d provision
Fair value
Accumulate for loss
Beginning Accrued change in Closing
Item Cost d fair value recognized Remark
balance interest current Balance
change in other
period
comprehensi
ve income
Important other debt investments
Unit: yuan
Closing Balance Beginning balance
Other debt
item Maturity Maturity
Book value Coupon rate Actual rate Book value Coupon rate Actual rate
date date
Provision for impairment
Unit: yuan
Stage 1 Stage 2 Stage 3
Expected credit losses Expected credit losses
Provision for bad debt Expected credit losses over the entire duration over the entire duration Total
over the next 12 months (no credit impairment (credit impairment has
occurred) occurred)
Balance on January 1,
2022 in the current
period
Changes in book balance with significant changes in the current period of provision for loss
□ Applicable Not applicable
Other description:
16. Long-term receivables
(1) Long-term receivables
Unit: yuan
Closing Balance Beginning balance
Discount rate
Item Provision for Provision for
Book balance Book value Book balance Book value range
bad debt bad debt
Impairment of provision for bad debt
Unit: yuan
Stage 1 Stage 2 Stage 3
Expected credit losses Expected credit losses
Provision for bad debt Expected credit losses over the entire duration over the entire duration Total
over the next 12 months (no credit impairment (credit impairment has
occurred) occurred)
Balance on January 1,
2022 in the current
period
Changes in book balance with significant changes in the current period of provision for loss
□ Applicable Not applicable
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(2) Long-term receivables derecognized due to transfer of financial assets
(3) Amount of assets and liabilities formed by transferring long-term receivables and continuing
involvement
Other description:
17. Long-term equity investments
Unit: yuan
Increase or decrease in current period
Balance
Investme of
Beginnin nt gains Adjustm Declared Ending impairm
Invested g balance Further and ent of payment Provisio balance ent
Changes
unit (book investme Capital losses other
in other
of cash n for
Other (book provision
value) reduction recogniz compreh dividend impairm value) at the
nt equity
ed by the ensive s or ent end of
equity income profits period
method
I. Cooperative enterprise
II. Joint venture
Chengdu 16,949,8 2,408,20 19,358,0
Winner 01.24 9.89 11.13
16,949,8 2,408,20 19,358,0
Subtotal
01.24 9.89 11.13
16,949,8 2,408,20 19,358,0
Total
01.24 9.89 11.13
Other description
18. Other equity instrument investments
Unit: yuan
Item Closing Balance Beginning balance
Itemized disclosure of the current non-trading equity instrument investment
Unit: yuan
Reasons for
designating to be
Reasons for
Amount of other measured at fair
other
comprehensive value and its
Recognized Accumulated Accumulated comprehensive
Item income changes are
dividend income gains losses income
transferred into recorded into
transferring into
retained income other
retained income
comprehensive
income
Other description:
19. Other non-current financial assets
Unit: yuan
Item Closing Balance Beginning balance
Other description:
20. Investment real estates
(1) Investment real estates using cost measurement mode
□ Applicable Not applicable
(2) Investment real estates using fair value measurement mode
□ Applicable Not applicable
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(3) Investment real estates without certificate of title
Unit: yuan
Reasons for not obtaining the certificate of
Item Book value
title
Other description
21. Fixed assets
Unit: yuan
Item Closing Balance Beginning balance
Fixed assets 1,924,347,463.68 1,477,320,848.63
Total 1,924,347,463.68 1,477,320,848.63
(1) Fixed assets
Unit: yuan
Electronic
Machinery Transportation equipment and
Item Houses and building Total
equipment equipment office equipment,
etc.
I. Original book
value:
1. Beginning
995,105,302.17 1,150,719,865.14 24,268,054.46 125,370,729.10 2,295,463,950.87
balance
2. Amount
increased in current 327,519,322.75 285,385,530.40 6,410,989.58 37,546,834.23 656,862,676.96
period
(1) Purchase 14,800,560.38 126,644,435.06 2,563,730.54 17,827,298.19 161,836,024.17
(2) Transfer from
construction in 17,062,082.99 9,605,229.66 292,035.40 26,959,348.05
progress
(3) Increase by
business 295,656,679.38 149,135,865.68 3,847,259.04 19,427,500.64 468,067,304.74
combination
3. Amount
decreased in current 5,602,517.04 11,022,972.08 2,039,488.03 4,039,706.83 22,704,683.98
period
(1) Disposal or
5,602,517.04 11,022,972.08 2,039,488.03 4,039,706.83 22,704,683.98
scrap
4. Closing Balance 1,317,022,107.88 1,425,082,423.46 28,639,556.01 158,877,856.50 2,929,621,943.85
II. Accumulated
depreciation
1. Beginning
236,817,072.10 404,994,040.98 12,158,907.47 56,370,318.49 710,340,339.04
balance
2. Amount
increased in current 52,378,173.52 122,253,316.39 3,844,345.66 17,476,518.45 195,952,354.02
period
(1) Accrual 21,744,316.91 52,425,745.03 1,136,872.10 9,239,553.57 84,546,487.61
(2) Increase by
business 30,633,856.61 69,827,571.36 2,707,473.56 8,236,964.88 111,405,866.41
combination
3. Amount
decreased in current 2,106,887.24 2,501,836.59 1,791,342.77 1,245,263.24 7,645,329.84
period
(1) Disposal or
2,106,887.24 2,501,836.59 1,791,342.77 1,245,263.24 7,645,329.84
scrap
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4. Closing Balance 287,088,358.38 524,745,520.78 14,211,910.36 72,601,573.70 898,647,363.22
III. Provision for
impairment
1. Beginning
45,682,191.02 61,985,265.65 135,306.53 107,802,763.20
balance
2. Amount
increased in current 1,346,409.85 0.00 0.00 1,346,409.85
period
(1) Accrual 1,346,409.85 1,346,409.85
3. Amount
decreased in current 2,519,194.81 2,861.29 0.00 0.00 2,522,056.10
period
(1) Disposal or
2,519,194.81 2,861.29 2,522,056.10
scrap
4. Closing Balance 43,162,996.21 63,328,814.21 0.00 135,306.53 106,627,116.95
IV. Book value
1. Ending book
986,770,753.29 837,008,088.47 14,427,645.65 86,140,976.27 1,924,347,463.68
value
2. Beginning book
712,606,039.05 683,740,558.51 12,109,146.99 68,865,104.08 1,477,320,848.63
value
(2) Fixed assets that are temporarily idle
Unit: yuan
Accumulated Provision for
Item Original book value Book value Remark
depreciation impairment
Machinery
745,242.33 611,498.76 84,482.78 49,260.79 Not needed for now
equipment
Electrical
14,664.80 12,641.28 2,023.52 Not needed for now
equipment
Total 759,907.13 624,140.04 84,482.78 51,284.31
(3) Fixed assets leased out by operating lease
Unit: yuan
Item Ending book value
(4) Fixed assets without certificate of title
Unit: yuan
Reasons for not obtaining the certificate of
Item Book value
title
Main plant of Phase II Spunlace Non- The formalities have not yet been
15,995,217.15
woven Fabric of Tianmen Winner completed
Tianmen Winner Medical Building 1st The formalities have not yet been
9,316,365.54
Floor completed
Tianmen Winner Medical Building 2nd The formalities have not yet been
5,609,288.05
Floor completed
Tianmen Winner No.3 Workshop for The formalities have not yet been
3,451,995.65
finished products (Mask Workshop) completed
Other description
(5) Liquidation of fixed assets
Unit: yuan
Item Closing Balance Beginning balance
Other description:
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22. Construction in progress
Unit: yuan
Item Closing Balance Beginning balance
Construction in progress 531,760,298.29 216,096,622.30
Total 531,760,298.29 216,096,622.30
(1) Construction in progress
Unit: yuan
Closing Balance Beginning balance
Item Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
Tianmen
infrastructure 97,029,056.67 97,029,056.67 28,206,760.19 28,206,760.19
project
Huanggang
Winner
69,122,685.24 69,122,685.24 264,970.51 264,970.51
Engineering
Project
Jiayu Winner
engineering 15,925,565.46 15,925,565.46 4,821,946.07 4,821,946.07
project
Wuhan Winner
engineering 293,116,022.30 293,116,022.30 75,214,244.85 75,214,244.85
project
Jingmen Winner
Engineering 18,469,250.42 18,469,250.42
Project
Other equipment
to be installed
39,558,126.04 1,460,407.84 38,097,718.20 109,049,108.52 1,460,407.84 107,588,700.68
and sporadic
projects
Total 533,220,706.13 1,460,407.84 531,760,298.29 217,557,030.14 1,460,407.84 216,096,622.30
(2) Current changes in major projects under construction
Unit: yuan
Includin
Amount Proporti Accumu g: Interest
Amount carried Other on of lated interest capitaliz
Beginni increase forward decrease total Progress amount capitaliz ation
Project Budget Closing Source
ng d in to fixed s in project of of ation rate in
name number Balance of funds
balance current assets in current input to works interest funds in the
period current period the capitaliz the current
period budget ation current period
period
Huangg
ang
Winner
-
Producti
50,000, 20,927, 20,927,
on Line 41.85% 45.00% Other
000.00 430.33 430.33
4 and
Line 5
for
Sanitary
Pads
Huangg
ang
90,000, 48,195, 48,195,
Winner 53.55% 50.00% Other
000.00 254.91 254.91
-
Compre
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hensive
Worksh
op
Jingmen
Winner
-
Automa 60,000, 15,869, 15,869,
26.45% 40.00% Other
ted 000.00 748.44 748.44
Plant -
Southw
est
Tianme
n
Winner
-
Intellige
nt 3D e-
86,600, 7,096,1 34,454, 41,550,
commer 47.98% 50.00% Other
000.00 81.97 460.85 642.82
ce
warehou
se for
pure
cotton
business
Tianme
n
Winner 73,500, 10,817, 44,566, 55,384,
75.35% 80.00% Other
- 000.00 198.26 875.97 074.23
Spunlac
e Line 7
Jiayu
Winner
980,000 4,810,8 10,564, 15,375,
- New 1.57% 2.00% Other
,000.00 84.12 828.48 712.60
Factory
Project
Wuhan
Winner
Phase II
268,000 10,000, 119,908 129,908
1-3 48.47% 50.00% Other
,000.00 000.00 ,256.93 ,256.93
Sorting
Center
Project
Wuhan
Winner
110,871 49,892, 30,515, 80,407,
Phase II 72.52% 75.00% Other
,722.11 274.96 152.88 427.84
Main
Project
1,718,9
82,616, 325,002 407,618
Total 71,722. 0.00 0.00
539.31 ,008.79 ,548.10
11
(3) Provision for impairment of construction in progress in current period
Unit: yuan
Item Current accrued amount Reason for accrual
Other description
(4) Engineering materials
Unit: yuan
Closing Balance Beginning balance
Item Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
Other description:
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23. Productive biological assets
(1) Productive biological assets using cost measurement mode
□ Applicable Not applicable
(2) Biological assets using fair value measurement mode
□ Applicable Not applicable
24. Oil and gas assets
□ Applicable Not applicable
25. Right-of-use assets
Unit: yuan
Item Houses and building Total
I. Original book value
1. Beginning balance 1,046,616,109.25 1,046,616,109.25
2. Amount increased in current period 128,675,744.76 128,675,744.76
(1) New lease 127,983,810.86 127,983,810.86
(2) Increase by business combination 691,933.90 691,933.90
3. Amount decreased in current period 204,890,720.86 204,890,720.86
Disposal 204,890,720.86 204,890,720.86
4. Closing Balance 970,401,133.15 970,401,133.15
II. Accumulated depreciation
1. Beginning balance 514,880,665.81 514,880,665.81
2. Amount increased in current period 114,858,188.74 114,858,188.74
(1) Accrual 114,777,463.11 114,777,463.11
(2) Increase by business combination 80,725.63 80,725.63
3. Amount decreased in current period 132,957,308.47 132,957,308.47
(1) Disposal 132,957,308.47 132,957,308.47
4. Closing Balance 496,781,546.08 496,781,546.07
III. Provision for impairment
1. Beginning balance
2. Amount increased in current period
(1) Accrual
3. Amount decreased in current period
(1) Disposal
4. Closing Balance
IV. Book value
1. Ending book value 473,619,587.07 473,619,587.08
2. Beginning book value 531,735,443.44 531,735,443.44
Other description:
26. Intangible assets
(1) Intangible assets
Unit: yuan
Land use Nonpatented Trademark Software use Franchised Client
Item Patent right Total
right technology right right use right relations
I. Original
book value
1. Beginning 266,174,018. 1,573,637.86 1,710,590.99 57,653,383.2 10,228,226.5 337,339,857.
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balance 88 9 3 55
2. Amount
increased in 147,702,289. 296,866,627. 48,890,133.0 61,750,000.0 555,214,440.
5,390.00
current 42 89 8 0 39
period
28,460,748.0 25,829,859.1 54,290,607.1
(1) Purchase
0 7 7
(2) Internal
R&D
(3) Increase
119,241,541. 296,866,627. 23,060,273.9 61,750,000.0 500,923,833.
by business 5,390.00
42 89 1 0 22
combination
3. Amount
decreased in
current
period
(1) Disposal
4. Closing 413,876,308. 298,440,265. 106,543,516. 10,228,226.5 61,750,000.0 892,554,297.
1,715,980.99
Balance 30 75 37 3 0 94
II. Accumula
ted
amortization
1. Beginning 28,039,117.1 30,449,311.1 10,228,226.5 71,638,966.9
1,247,454.39 1,674,857.66
balance 8 4 3 0
2. Amount
increased in 12,887,021.9 21,888,929.0
4,981,841.98 7,046.52 4,013,018.65
current 2 7
period
11,264,308.3
(1) Accrual 3,418,167.85 4,650,458.67 6,700.00 3,188,981.83
5
(2) Increase
10,624,620.7
by business 9,468,854.07 331,383.31 346.52 824,036.82
2
combination
3. Amount
decreased in
current
period
(1) Disposal
4. Closing 40,926,139.1 34,462,329.7 10,228,226.5 93,527,895.9
6,229,296.37 1,681,904.18
Balance 0 9 3 7
III. Provisio
n for
impairment
1. Beginning
balance
2. Amount
increased in
current
period
(1) Accrual
3. Amount
decreased in
current
period
(1) Disposal
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4. Closing
Balance
IV. Book
value
1. Ending 372,950,169. 292,210,969. 72,081,186.5 61,750,000.0 799,026,401.
34,076.81
book value 20 38 8 0 97
2. Beginning 238,134,901. 27,204,072.1 265,700,890.
326,183.47 35,733.33
book value 70 5 65
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%
(2) Land use right without certificate of title
Unit: yuan
Reasons for not obtaining the certificate of
Item Book value
title
Other description
27. Development expenditure
Unit: yuan
Beginning Closing
Amount increased in current period Amount decreased in current period
balance Balance
Item Internal Recognized Transfer to
Beginning Closing
development Other as intangible current profit
balance Balance
expenditure assets and loss
Total
Other description
28. Goodwill
(1) Original book value of goodwill
Unit: yuan
invested entity Increase in current period Decrease in current period Closing Balance
name or Beginning Formed by
goodwill balance business Disposal Closing Balance
forming matter combination
Business
combination not
under common
2,681,232.09 2,681,232.09
control -
Acquisition of
Malaysia Winner
Business
combination not
under common
390,417,857.50 390,417,857.50
control -
Acquisition of
Longterm Health
Business
combination not
under common
198,467,513.68 198,467,513.68
control -
Acquisition of
Guilin Latex
Total 2,681,232.09 588,885,371.18 591,566,603.27
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(2) Provision for impairment of goodwill
Unit: yuan
invested entity Increase in current period Decrease in current period Closing Balance
name or Beginning
goodwill balance Accrual Disposal Closing Balance
forming matter
Business
combination not
under common
2,681,232.09 2,681,232.09
control -
Acquisition of
Malaysia Winner
Total 2,681,232.09 2,681,232.09
Information relating to the asset group or asset group combination of goodwill
Explain the goodwill impairment test process, key parameters (such as forecast period growth rate at the present value of expected
future cash flow, steady period growth rate, profit margin, discount rate, forecast period, etc.) and recognition method of goodwill
impairment loss:
Impact of goodwill impairment tests
Other description
29. Long-term unamortized expenses
Unit: yuan
Amortization
Amount increased
Item Beginning balance amount in current Other decreases Closing Balance
in current period
period
Decoration cost 43,725,887.73 22,232,950.85 18,937,489.95 283,018.87 46,738,329.76
Decoration
expenses for
131,059,883.10 35,810,406.28 28,613,763.85 29,150,971.61 109,105,553.92
operating leased
fixed assets
Total 174,785,770.83 58,043,357.13 47,551,253.80 29,433,990.48 155,843,883.68
Other description
30. Deferred income tax assets and deferred income tax liabilities
(1) Unoffset deferred income tax assets
Unit: yuan
Closing Balance Beginning balance
Item Deductible temporary Deferred income tax Deductible temporary Deferred income tax
differences assets differences assets
Provision for
344,543,642.72 62,442,938.37 308,989,374.25 55,407,470.14
impairment of assets
Unrealized profit of
114,388,686.49 23,660,535.47 114,388,686.49 23,660,535.47
internal transaction
Deductible loss 113,962,501.30 28,272,447.37 60,670,842.73 15,167,710.69
Dismission welfare 2,315,103.48 347,265.52 2,315,103.48 347,265.52
Deferred income 99,203,761.08 16,109,546.16 109,625,401.82 17,710,015.89
Member points 10,309,457.59 2,577,364.40 10,319,207.78 2,579,801.95
Expected return,
3,101,202.39 775,300.60 1,881,955.47 410,114.78
Accrued expenses
Advertising expenses in
excess of the tax 15,439,719.70 2,315,957.95 39,046,992.53 5,857,048.88
deductible limit
Equity incentive fee 10,509,464.48 1,576,419.67
Total 703,264,074.75 136,501,355.84 657,747,029.03 122,716,382.99
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(2) Unoffset deferred income tax liabilities
Unit: yuan
Closing Balance Beginning balance
Item Taxable temporary Deferred income tax Taxable temporary Deferred income tax
differences liabilities differences liabilities
Asset evaluation
increment for business
440,280,645.62 66,042,096.84
combination not under
common control
Changes in fair value of
30,794,000.09 4,636,565.77 27,097,991.08 4,242,794.56
trading financial assets
Depreciation of fixed
43,558,481.15 7,702,940.68 52,132,715.97 9,094,365.12
assets
Asset evaluation
11,991,604.40 1,798,740.66
increment restructure
Total 526,624,731.26 80,180,343.95 79,230,707.05 13,337,159.68
(3) Deferred income tax assets or liabilities presented as net amount after offset
Unit: yuan
Ending balance of Beginning balance of
Ending offset amount of Beginning offset amount
deferred income tax deferred income tax
Item deferred income tax of deferred income tax
assets and liabilities assets and liabilities
assets and liabilities assets and liabilities
after offset after offset
Deferred income tax
136,501,355.84 122,716,382.99
assets
Deferred income tax
80,180,343.95 13,337,159.68
liabilities
(4) Details of unrecognized deferred income tax assets
Unit: yuan
Item Closing Balance Beginning balance
Deductible loss 259,682,230.82 206,266,023.76
Provision for impairment of assets and
11,390,552.21 5,372,991.42
amortization of depreciation
Total 271,072,783.03 211,639,015.18
(5) Deductible losses on unrecognized deferred income tax assets will expire in the following year
Unit: yuan
Year Closing balance Beginning amount Remark
2022 13,908,108.66 14,402,997.46
2023 25,574,944.59 25,574,944.59
2024 48,794,287.92 48,810,687.88
2025 44,675,230.79 44,934,541.40
2026 65,783,169.18 65,783,169.18
2027 53,948,512.86
No maturity date 6,997,976.82 6,759,683.25
Total 259,682,230.82 206,266,023.76
Other description
31. Other non-current assets
Unit: yuan
Closing Balance Beginning balance
Item Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
Advance project 121,928,531.03 121,928,531.03 115,571,001.80 115,571,001.80
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payment /
equipment
purchase
payment /
advance store
engineering and
decoration
payment
Advance equity
payment for
130,384,300.00 130,384,300.00
Pingan Medical
Device
Total 252,312,831.03 252,312,831.03 115,571,001.80 115,571,001.80
Other description:
32. Short-term debt
(1) Classification of short-term loans
Unit: yuan
Item Closing Balance Beginning balance
Guaranteed borrowing 10,000,000.00
Debt of honor 106,244,942.26
Bill Discount Credit 930,000,000.00
Assurance + Mortgage 95,000,000.00
Borrowing interest 231,791.67
Total 1,141,476,733.93
Description of classification of short-term borrowing:
(2) short-term loans unpaid overdue
The total amount of overdue short-term borrowings at the end of the period is RMB 0.00, 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. Trading financial liabilities
Unit: yuan
Item Closing Balance Beginning balance
Including:
Including:
Other description:
34. Derivative financial liabilities
Unit: yuan
Item Closing Balance Beginning balance
Other description:
35. Notes payable
Unit: yuan
Type Closing Balance Beginning balance
Banker's acceptance bill 146,065,963.57 36,200,130.04
Total 146,065,963.57 36,200,130.04
The total amount of notes payable due and have not been paid at the end of current period is RMB 0.00.
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36. Accounts payable
(1) Presentation of accounts payable
Unit: yuan
Item Closing Balance Beginning balance
Within 1 year (including 1 year) 958,493,036.41 714,681,791.55
1~2 years (including 2 years) 24,845,986.18 16,519,858.09
2~3 years (including 3 years) 9,430,201.31 2,213,757.41
More than 3 years 4,191,523.06 1,106,083.55
Total 996,960,746.96 734,521,490.60
(2) Important accounts payable with the aging more than 1 year
Unit: yuan
Reasons for failure of payment or
Item Closing Balance
carryover
Other description:
37. Advance from customers
(1) Presentation of advance from customers
Unit: yuan
Item Closing Balance Beginning balance
(2) Important advances from customers with the aging more than 1 year
Unit: yuan
Reasons for failure of payment or
Item Closing Balance
carryover
Other description:
38. Contract liabilities
Unit: yuan
Item Closing Balance Beginning balance
Customer consideration received 310,485,345.15 330,856,457.64
Member points 10,309,457.59 10,319,207.78
Total 320,794,802.74 341,175,665.42
Amount and reasons for significant changes in book value during the reporting period
Unit: yuan
Amount
Item Reason for change
of change
39. Payroll payable
(1) Presentation of payroll payable
Unit: yuan
Increase in current Decrease in current
Item Beginning balance Closing Balance
period period
I. Short-term
174,579,726.18 774,710,310.27 743,921,517.69 205,368,518.76
compensation
II. Welfare after
dismission - defined 7,786,354.86 51,303,324.94 51,595,869.62 7,493,810.18
contribution plan
III. Dismission welfare 2,315,103.48 5,834,517.52 4,734,075.83 3,415,545.17
Total 184,681,184.52 831,848,152.73 800,251,463.14 216,277,874.11
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(2) Presentation of short-term compensation
Unit: yuan
Increase in current Decrease in current
Item Beginning balance Closing Balance
period period
1. Salary, bonus,
171,917,627.57 728,899,297.88 696,616,036.73 204,200,888.72
allowance and subsidy
2. Welfare expenses for
1,898,566.41 5,878,955.09 7,354,221.09 423,300.41
employees
3. Social security 583,615.98 24,672,967.96 24,835,303.12 421,280.82
Including: medical
391,727.18 22,276,564.46 22,422,720.49 245,571.15
insurance premium
Industrial
injury insurance 127,114.57 1,175,408.69 1,180,066.59 122,456.67
premium
Birth
64,774.23 1,220,994.81 1,232,516.04 53,253.00
insurance premium
4. Housing accumulation
5,184.00 14,909,362.35 14,872,755.35 41,791.00
fund
5. Union dues and staff
174,732.22 349,726.99 243,201.40 281,257.81
education fund
Total 174,579,726.18 774,710,310.27 743,921,517.69 205,368,518.76
(3) Presentation of defined contribution plans
Unit: yuan
Increase in current Decrease in current
Item Beginning balance Closing Balance
period period
1. Basic endowment
7,669,900.83 49,647,179.30 49,928,202.75 7,388,877.38
insurance
2. Unemployment
116,454.03 1,656,145.64 1,667,666.87 104,932.80
insurance premium
Total 7,786,354.86 51,303,324.94 51,595,869.62 7,493,810.18
Other description
40. Taxes payable
Unit: yuan
Item Closing Balance Beginning balance
Added value tax 47,691,221.78 4,177,794.77
Corporate income tax 118,878,264.76 80,626,257.39
Individual income tax 3,136,081.77 2,915,638.55
Urban maintenance and construction tax 4,262,872.30 484,733.91
Housing property tax 3,050,422.73 2,544,714.33
Education surcharge and local education
3,239,295.22 365,615.00
surcharge
Land use tax 1,370,278.75 1,462,224.90
Stamp duty 654,514.96 1,260,046.05
Other 1,207,225.97 22,044.78
Total 183,490,178.24 93,859,069.68
Other description
41. Other payables
Unit: yuan
Item Closing Balance Beginning balance
Other payables 451,898,553.42 443,946,028.46
Total 451,898,553.42 443,946,028.46
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(1) Interest payable
Unit: yuan
Item Closing Balance Beginning balance
Important overdue and unpaid interest:
Unit: yuan
Borrower Overdue amount Overdue reason
Other description:
(2) Dividends payable
Unit: yuan
Item Closing Balance Beginning balance
Other explanations, including important dividends payable that have not been paid for more than 1 year, shall disclose the reasons for
non-payment:
(3) Other payables
1) Other payables listed by nature
Unit: yuan
Item Closing Balance Beginning balance
Intercourse funds of the third parties 21,515,400.83 20,895,856.79
Margin and deposit 170,181,127.48 162,215,690.65
Provision of commission 30,615,588.75 76,615,789.42
Freight, advertising expenses and other
202,730,644.78 176,844,834.39
accrued expenses
Other 26,855,791.58 7,373,857.21
Total 451,898,553.42 443,946,028.46
2) Important other payable with the aging more than 1 year
Unit: yuan
Reasons for failure of payment or
Item Closing Balance
carryover
Other description
42. Liabilities held for sales
Unit: yuan
Item Closing Balance Beginning balance
Other description
43. Non-current liabilities due within one year
Unit: yuan
Item Closing Balance Beginning balance
Lease liabilities due within one year 220,429,023.53 216,181,531.82
Long-term payroll payable due within one
373,656.36
year
Total 220,802,679.89 216,181,531.82
Other description:
44. Other current liabilities
Unit: yuan
Item Closing Balance Beginning balance
Refund payable 3,101,202.39 2,012,198.90
Output tax to be transferred 23,949,973.07 22,153,201.60
Total 27,051,175.46 24,165,400.50
153
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Increase/decrease of short-term bonds payable:
Unit: yuan
Amortiza
Accrued
tion of Current
Name of Book Issue Maturity Issue Beginnin Current interest Closing
premium repayme
bond value date of bond amount g balance issue at book Balance
and nt
value
discount
Total
Other description:
45. Long-term loans
(1) Classification of long-term borrowing
Unit: yuan
Item Closing Balance Beginning balance
Mortgage 28,000,000.00
Total 28,000,000.00
Description of classification of long-term borrowing:
Longterm Health and Zhejiang Deqing Rural Commercial Bank Co., Ltd. signed a long-term loan contract with the contract number
8811120180040452 on December 2018 with a loan amount of RMB28 million and a maturity date on December 20, 2023. It is agreed
that the interest will be paid in installments and the principal will be repaid at maturity with the borrowing rate of 4.90%. The mortgaged
amount is RMB53,712,324.86, and the mortgage contract numbered 8811320210000908 is signed with the real estate certificate [No.
Zhejiang (2021) Deqing County Real Estate No. 0001524] of its own No.1-6 Building. The loan has not been repaid as of June 30,
2022.
Other descriptions, including interest rate range:
46. Bonds payable
(1) Bonds payable
Unit: yuan
Item Closing Balance Beginning balance
(2) Increase and decrease of bonds payable (excluding preferred shares, perpetual bonds and other
financial instruments classified as financial liabilities)
Unit: yuan
Amortiza
Accrued
tion of Current
Name of Book Issue Maturity Issue Beginnin Current interest Closing
premium repayme
bond value date of bond amount g balance issue at book Balance
and nt
value
discount
Total ——
(3) Description of conditions and time of conversion of convertible corporate bonds
(4) Description of other financial instruments classified as financial liabilities
Basic information of the outstanding preferred shares, perpetual bonds and other financial instruments at the end of the period
Table of changes in outstanding financial instruments, such as preferred shares, perpetual bonds at the end of the period
Unit: yuan
Outstanding The beginning of the period Increase in current period Decrease in current period The end of the period
financial
instruments Quantity Book value Quantity Book value Quantity Book value Quantity Book value
Description of the basis for the classification of other financial instruments into financial liabilities
154
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Other description
47. Lease liabilities
Unit: yuan
Item Closing Balance Beginning balance
Lease payments 358,823,599.66 431,547,562.69
Unrecognized financing expenses （42,297,662.69） （49,738,637.60）
Total 316,525,936.97 381,808,925.09
Other description:
48. Long-term payable
Unit: yuan
Item Closing Balance Beginning balance
(1) Long-term payables listed by nature
Unit: yuan
Item Closing Balance Beginning balance
Other description:
(2) Special accounts payable
Unit: yuan
Increase in current Decrease in current
Item Beginning balance Closing Balance Causes
period period
Other description:
49. Long-term payroll payable
(1) Table of long-term payroll payable
Unit: yuan
Item Closing Balance Beginning balance
Retirement welfare and Dismissal
9,303,066.32
payments
Total 9,303,066.32
(2) Changes in defined benefit plan
Present value of defined benefit plan obligations:
Unit: yuan
Item Amount incurred in current period Amount incurred in previous period
Planned assets:
Unit: yuan
Item Amount incurred in current period Amount incurred in previous period
Net liabilities (net assets) of defined benefit plan
Unit: yuan
Item Amount incurred in current period Amount incurred in previous period
Description of the content of defined benefit plan and its related risks, impact on the Company's future cash flow, time and
uncertainty:
Description of significant actuarial assumptions and sensitivity analysis results of defined benefit plan:
Other description:
155
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50. Estimated liabilities
Unit: yuan
Item Closing Balance Beginning balance Causes
Other descriptions, including relevant important assumptions and estimation descriptions of important estimated liabilities:
51. Deferred income
Unit: yuan
Increase in current Decrease in current
Item Beginning balance Closing Balance Causes
period period
Government
Government
109,625,401.82 1,349,807.52 11,771,448.26 99,203,761.08 subsidies related to
subsidies
assets
Total 109,625,401.82 1,349,807.52 11,771,448.26 99,203,761.08
Projects involving government subsidies:
Unit: yuan
Amount Amount
included offsettin
Amount of
in Amount included g the Asset/in
Liability additional Other
Beginning balance current in other income cost in Closing Balance come
item subsidy in changes
non- in current period the related
current period
operating current
income period
Subsidy for
Huanggang
Chibi
Avenue
demolition Asset
2,377,019.38 52,822.64 2,324,196.74
company related
planning
change -
Huanggang
Winner
Subsidy
funds for
municipal
government
project Asset
8,856,862.50 206,775.00 8,650,087.50
infrastructur related
e
construction
- Chongyang
Winner
Subsidy
funds for
land and
subsidy
Asset
funds for 9,802,666.67 203,416.66 9,599,250.01
related
sewage
treatment -
Jiayu
Winner
Automatic
transformati
on of
surgical Asset
1,023,000.00 93,000.00 930,000.00
consumables related
production
line - the
Company
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Second
batch of
traditional
industry
Asset
transformati 1,098,165.26 104,587.14 993,578.12
related
on subsidy
in 2017 -
Huanggang
Winner
Technical
innovation
subsidy for
the
Purcotton Asset
4,325,520.65 83,183.10 4,242,337.55
Phase II related
Expansion
Project -
Jingmen
Winner
2018
provincial
traditional
industry
transformati
on and
upgrading
special funds Asset
1,339,047.62 26,428.57 1,312,619.05
for the related
second batch
of
liquidation
block fund
subsidies -
Jiayu
Winner
Provincial
traditional
industry
transformati
on and
upgrading
special funds
for the first Asset
1,024,137.94 68,275.86 955,862.08
batch of related
block funds
allocation
plan in
Tianmen
City in 2019
- Tianmen
Winner
2020
technical
transformati
on project of
Shenzhen
COVID-19
epidemic Asset
17,500,000.00 1,000,000.00 16,500,000.00
prevention related
and control
key material
production
enterprises -
the
Company
157
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Production
subsidy for
COVID-19
epidemic
Asset
prevention 3,420,000.00 3,420,000.00 0
related
materials in
2020 -
Huanggang
Winner
Surgical
gown
production
Asset
line project 3,279,279.27 216,216.22 3,063,063.05
related
subsidy -
Chongyang
Winner
Funds
subsidy for
purchasing
epidemic
prevention
equipment in Asset
4,979,327.73 281,848.74 4,697,478.99
key related
enterprises
of "Three
Batches" -
Chongyang
Winner
Project on
implementin
g the
technical
reformation
policy of
"Zero Land"
in Wuhan
and the
municipal
industrial
investment
and
technical Asset
7,126,566.91 291,144.36 6,835,422.55
transformati related
on special
fund project
of Bureau
for Science,
Technology
and
Economic
Information
Technology
of Xinzhou
District -
Hubei
Winner
Subsidy of
COVID-19
epidemic
prevention
Asset
and control 2,779,116.66 295,860.16 2,483,256.50
related
materials
production
enterprise
for capacity
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expansion &
technical
upgrading
project -
Wuhan
Winner
Subsidy for
purchasing
equipment in
key
enterprise
Asset
"Three 2,522,692.27 2,522,692.27 0
related
Batches" at
provincial
levels -
Huanggang
Winner
2020 special
funds for the
high-quality
development
Asset
of 2,691,588.78 168,224.30 2,523,364.48
related
manufacturi
ng -
Huanggang
Winner
2021 urban
technical
transformati Asset
1,040,625.00 56,250.00 984,375.00
on fund - related
Huanggang
Winner
2021
equipment
subsidies
during the Asset
5,525,000.00 850,000.00 4,675,000.00
COVID-19 related
pandemic -
Jingmen
Winner
Annual
equipment
investment
subsidies Asset
15,000,000.00 15,000,000.00
(Spunlace related
Phase III) -
Tianmen
Winner
Received
subsidies
from the
development
of the central
government
emergency
Asset
material 1,558,860.54 22,465.06 1,536,395.48
related
security
system for
production
capacity
improvemen
t - Wuhan
Winner
Asset
Other 12,355,924.64 1,349,807.52 0 1,808,258.18 0 0 11,897,473.98
related
159
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Total 109,625,401.82 1,349,807.52 0 11,771,448.26 0 0 99,203,761.08
Other description:
52. Other non-current liabilities
Unit: yuan
Item Closing Balance Beginning balance
Other description:
53. Capital stock
Unit: yuan
Increase/decrease (+, -)
Beginning Share capital Closing
balance New issue of Balance
Share donation increase from Other Subtotal
shares
reserved funds
Total amount 426,492,308.0 426,492,308.0
of shares 0 0
Other description:
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 The beginning of the period Increase in current period Decrease in current period The end of the period
financial
instruments Quantity Book value Quantity Book value Quantity Book value Quantity Book value
The increase and decrease of other equity instruments in current period, the reasons for the change, and the basis of relevant
accounting treatment:
Other description:
55. Capital reserve
Unit: yuan
Increase in current Decrease in current
Item Beginning balance Closing Balance
period period
Capital premium (capital
4,457,762,555.30 4,457,762,555.30
stock premium)
Other capital surplus 91,858,541.51 42,396,249.94 134,254,791.45
Total 4,549,621,096.81 42,396,249.94 4,592,017,346.75
Other description, including current increase/decrease and change reasons:
56. Treasury stock
Unit: yuan
Increase in current Decrease in current
Item Beginning balance Closing Balance
period period
Treasury stock 257,992,366.68 242,090,367.43 500,082,734.11
Total 257,992,366.68 242,090,367.43 500,082,734.11
Other description, including current increase/decrease and change reasons:
57. Other comprehensive income
Unit: yuan
Amount incurred in current period
Beginning Amount Less: Less: Attributable Attributable Closing
Item Less:
balance before amount amount to the parent to minority Balance
Income tax
current included in included in company shareholders
expenses
income other other after tax after tax
160
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tax comprehensi comprehensi
ve income in ve income in
previous previous
period period
transferred transferred
into profit into retained
and loss in income in
current current
period period
II. Other
comprehensi
ve income
（1,556,935.43 1,457,76 （682,771.8
that will be 874,163.62 583,602.24
reclassified ） 5.86 1）
into profit
and loss
Balance
arising from
the
translation of （1,556,935.43 1,457,76 （682,771.8
874,163.62 583,602.24
foreign ） 5.86 1）
currency
financial
statements
Total other
（1,556,935.43 1,457,76 （682,771.8
comprehensi 874,163.62 583,602.24
ve income ） 5.86 1）
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
Increase in current Decrease in current
Item Beginning balance Closing Balance
period period
Other description, including current increase/decrease and change reasons:
59. Surplus reserve
Unit: yuan
Increase in current Decrease in current
Item Beginning balance Closing Balance
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:
60. Undistributed profit
Unit: yuan
Item Current period Prior period
Undistributed profit at the end of previous
5,538,135,285.97 5,126,630,011.14
period before adjustment
Total undistributed profits at the beginning
of the adjustment period (+ for increase （60,128,638.03）
and - for decrease)
Undistributed profits at the beginning of
5,538,135,285.97 5,066,501,373.11
the period after adjustment
Plus: Net profits attributable to the owners
892,823,503.14 1,239,320,067.26
of parent company in the current period
Common stock dividends payable 377,763,884.10 767,686,154.40
Undistributed profits at the end of the
6,053,194,905.01 5,538,135,285.97
period
161
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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, RMB0.00 of the
undistributed profit at the beginning of the period was affected.
2) Due to the change of accounting policy, RMB0.00 of the undistributed profit at the beginning of the period was affected.
3) Due to the correction of major accounting errors, RMB0.00 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, RMB0.00 of the undistributed profit at the beginning of
the period was affected.
5) RMB0.00 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 current period Amount incurred in previous period
Item
Income Cost Income Cost
Main business 5,113,877,083.65 2,613,729,979.52 4,015,254,836.74 1,899,194,820.44
Other businesses 44,067,412.07 26,826,584.12 44,610,818.18 22,594,882.03
Total 5,157,944,495.72 2,640,556,563.64 4,059,865,654.92 1,921,789,702.47
Income related information:
Unit: yuan
Medical consumables Healthy consumer goods
Contract classification Total
(segment 1) (segment 2)
Type of goods
Including:
Main business 3,232,806,937.04 1,881,070,146.61 5,113,877,083.65
Other businesses 44,067,412.07 44,067,412.07
Classified by operating
area
Including:
Domestic sales 2,530,164,761.53 1,881,070,146.61 4,411,234,908.14
Overseas sales 746,709,587.58 746,709,587.58
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:
162
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NA
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 RMB0.00, of which RMB0.00 is expected to be recognized as revenue in year, RMB0.00 is expected to be
recognized as revenue in year, and RMB0.00 is expected to be recognized as revenue in year.
Other description
62. Taxes and surcharges
Unit: yuan
Item Amount incurred in current period Amount incurred in previous period
Urban maintenance and construction tax 18,495,175.61 13,351,264.31
Education surcharge 8,259,222.82 6,083,856.56
Housing property tax 4,020,316.15 4,009,111.81
Land use tax 1,666,760.16 3,601,190.09
Vehicle and vessel use tax 8,823.96 5,699.53
Stamp duty 3,124,207.56 1,751,155.99
Surcharge for local education 5,505,078.38 4,282,630.01
Environmental protection tax 79,776.79 71,770.68
Total 41,159,361.43 33,156,678.98
Other description:
NA
63. Sales expenses
Unit: yuan
Item Amount incurred in current period Amount incurred in previous period
Employee compensation 322,603,966.58 229,922,405.33
Travel expenses 3,848,684.40 5,786,992.03
Office communication costs 8,396,979.22 3,075,901.11
Sales commission 118,542,577.52 98,622,807.60
Insurance premiums 3,018,944.71 2,574,426.91
Depreciation and amortization 156,566,925.78 113,209,102.14
Advertising and promotion expenses 235,198,138.16 233,984,397.50
Rent 66,454,933.41 85,737,804.97
Other 35,540,974.96 52,891,982.98
Total 950,172,124.74 825,805,820.57
Other description:
NA
64. Administrative expenses
Unit: yuan
Item Amount incurred in current period Amount incurred in previous period
Employee compensation 153,347,954.56 102,543,267.30
Equity incentive fee 42,396,249.94 142,429,497.69
Depreciation and amortization charge 31,523,347.61 17,278,124.21
Consultant and intermediary service fees 17,011,517.75 5,420,967.74
Maintenance cost 15,965,110.27 7,113,384.60
Communication and network services,
10,844,678.10 27,088,830.21
cloud service fees, etc.
Water/electricity fee 4,826,421.80 2,270,363.17
Material consumption 2,583,067.32 2,792,481.93
Recruitment fee 2,138,742.55 1,834,795.43
163
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Other 44,754,793.42 1,880,839.36
Total 325,391,883.32 310,652,551.64
Other description
65. R&D expenses
Unit: yuan
Item Amount incurred in current period Amount incurred in previous period
Employee compensation 80,616,282.16 60,924,410.97
Depreciation and amortization 9,034,205.00 8,456,760.23
Material 97,340,715.49 81,191,111.26
Other miscellaneous expenses 51,653,295.97 39,344,983.01
Total 238,644,498.62 189,917,265.47
Other description
NA
66. Financial expenses
Unit: yuan
Item Amount incurred in current period Amount incurred in previous period
Interest expenditure 5,765,880.43 379,713.89
Interest expense of lease liabilities 13,353,482.15 13,560,020.61
Less: Interest revenue 62,087,089.05 35,424,028.29
Exchange gain or loss （31,671,165.22） 8,101,623.57
Other 1,019,739.35 766,213.42
Total （73,619,152.34） （12,616,456.80）
Other description
67. Other incomes
Unit: yuan
Other sources of income Amount incurred in current period Amount incurred in previous period
Government subsidies 28,747,393.29 86,754,859.99
68. Investment income
Unit: yuan
Item Amount incurred in current period Amount incurred in previous period
Long-term equity investment gains
2,408,209.89 1,655,597.53
measured by employing the equity method
Investment income from purchasing
29,043,980.01 48,417,662.28
financial products
Total 31,452,189.90 50,073,259.81
Other description
NA
69. Net exposure hedging
Unit: yuan
Item Amount incurred in current period Amount incurred in previous period
Other description
70. Income from changes in fair value
Unit: yuan
Sources of gains from fair value change Amount incurred in current period Amount incurred in previous period
Income from structured deposits of bank
35,182,098.83 31,408,220.30
financial products and trust products
164
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Total 35,182,098.83 31,408,220.30
Other description:
NA
71. Credit impairment Loss
Unit: yuan
Item Amount incurred in current period Amount incurred in previous period
Loss on bad debts of other receivables 571,417.02 13,360,426.19
Loss on bad debts of accounts receivable （8,320,585.13） （1,552,019.48）
Total （7,749,168.11） 11,808,406.71
Other description
The credit impairment loss cannot be cross-checked with the provision for bad debts and the provision for bad debts reversed in the
current period in the notes of other receivables and accounts receivable. The difference is mainly due to the impact of the balance of
bad debt provision on the purchase date of Longterm Health and Guilin Latex, which were newly included in the scope of consolidation
in the current period.
72. Assets impairment losses
Unit: yuan
Item Amount incurred in current period Amount incurred in previous period
II. Inventory falling price loss and
impairment loss of contract performance （71,699,155.49） （52,186,443.71）
costs
V. Impairment loss of fixed assets （1,346,409.85） （8,411,088.88）
Total （73,045,565.34） （60,597,532.59）
Other description:
73. Gains from asset disposal
Unit: yuan
Source of income from disposal of assets Amount incurred in current period Amount incurred in previous period
Loss on disposal of non-current assets （547,132.74） （37,621.25）
Including: Loss on disposal of fixed assets （547,132.74） （37,621.25）
74. Non-operating income
Unit: yuan
Amounts recorded in the non-
Amount incurred in current Amount incurred in previous
Item recurring gains and losses of
period period
the current period
Government subsidies 8,545.43 36,262.29 8,545.43
Non-current assets scrap gains 755,380.00 14,489.12 755,380.00
Income from compensation or
509,551.22 498,130.83 509,551.22
fines
Other 879,459.00 1,790,581.70 879,459.00
Total 2,152,935.65 2,339,463.94 2,152,935.65
Government subsidies recorded in current profit and loss
Unit: yuan
Whether the
subsidy Amount Amount
Special
Subsidized Granting Granting Type of affects the incurred in incurred in Asset/incom
subsidy or
project subject reason nature profit and current previous e related
not
loss of period period
current year
Other description:
165
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75. Non-operating expenses
Unit: yuan
Amounts recorded in the non-
Amount incurred in current Amount incurred in previous
Item recurring gains and losses of
period period
the current period
External donations 956,452.02 208,387.94 956,452.02
Loss on damage and scrap of
2,609,947.50 7,968,231.63 2,609,947.50
non-current assets
Including: Loss on scrap of
2,609,947.50 7,968,231.63 2,609,947.50
fixed assets
Other 5,067,322.57 326,184.85 5,067,322.57
Total 8,633,722.09 8,502,804.42 8,633,722.09
Other description:
76. Income tax expenses
(1) Income tax expense table
Unit: yuan
Item Amount incurred in current period Amount incurred in previous period
Current income tax expenses 158,472,538.37 152,217,622.09
Deferred income tax expenses （12,007,847.00） （15,926,486.89）
Adjustment of the previous annual income
（794,409.03） 6,995,272.56
tax amount in the current period
Total 145,670,282.34 143,286,407.76
(2) Accounting profit and income tax expense adjustment process
Unit: yuan
Item Amount incurred in current period
Total profit 1,043,198,245.70
Income tax expenses calculated at the appropriate/applicable tax
156,479,736.86
rate
Impact of different tax rates applied on subsidiaries （8,373,278.31）
Impact of income tax before adjustment （794,409.03）
Impact of non-deductible costs, expenses and losses 8,252,480.79
Impact of deductible losses on unrecognized deferred income tax
-123,722.20
assets in the prior period
Impact of temporary difference or deductible losses on
13,599,533.22
unrecognized deferred income tax assets in the current period
Impact of weighted deduction of R&D costs -23,370,058.99
Income tax expenses 145,670,282.34
Other description:
NA
77. Other comprehensive income
See Note 57 for details
78. Cash flow statement items
(1) Other cash received related to operating activities
Unit: yuan
Item Amount incurred in current period Amount incurred in previous period
Deposit, margin and quality guarantee
14,529,056.53 5,168,682.39
deposit received
Interest income received 7,191,289.35 35,424,028.29
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Government subsidies received 18,335,704.11 107,535,255.10
Other 16,052,169.59 2,288,712.53
Total 56,108,219.58 150,416,678.31
Explanation on other cash received related to operating activities:
(2) Other cash paid related to operating activities
Unit: yuan
Item Amount incurred in current period Amount incurred in previous period
Management and development costs paid
130,183,042.11 40,188,212.76
in cash
Selling expenses paid in cash 117,260,516.70 146,432,180.23
Deposit, margin and quality guarantee
16,980,843.60 36,326,773.36
deposit paid
Bank handling charge 1,019,739.35 766,213.42
Other 101,105,657.83 63,370,409.09
Total 366,549,799.59 287,083,788.86
Description of other cash paid related to operating activities
(3) Other cash received related to investment activities
Unit: yuan
Item Amount incurred in current period Amount incurred in previous period
Description of other cash received related to investment activities:
(4) Other cash paid related to investment activities
Unit: yuan
Item Amount incurred in current period Amount incurred in previous period
Description of other cash paid related to investment activities:
(5) Other cash received related to financing activities
Unit: yuan
Item Amount incurred in current period Amount incurred in previous period
Description of other cash received related to financing activities:
(6) Other cash paid related to financing activities
Unit: yuan
Item Amount incurred in current period Amount incurred in previous period
Lease liability principal and interest paid
128,085,353.13 103,492,521.01
on lease payments
Treasury stock repurchase paid 242,090,367.43
L/C loan deposit paid 50,000,000.00
Total 420,175,720.56 103,492,521.01
Description of other cash paid related to financing activities:
79. Further information on cash flow statement
(1) Further information on cash flow statement
Unit: yuan
Further information Current amount Last term amount
1. Reconciliation from net profits to cash
flows from operating activities
Net profit 897,527,963.36 761,119,937.32
Plus: Provision for impairment of assets 80,794,733.45 48,789,125.89
Depreciation of fixed assets, oil
and gas assets and productive biological 84,546,487.61 79,903,000.47
assets
Depreciation of Right-of-use assets 114,777,463.11 99,318,820.49
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Amortization of intangible assets 11,264,308.35 4,688,455.41
Amortization of long-term deferred
34,480,229.33 25,521,431.94
expenses
Losses on disposal of fixed assets,
intangible assets and other long-term 547,132.74 37,621.25
assets (gains expressed with “-”)
Loss on retirement of fixed assets
1,854,567.50 7,968,231.63
(gains expressed with “-”)
Loss from fair value change (gains
（35,182,098.83） （31,408,220.30）
expressed with “-”)
Financial expenses (gains
（63,381,020.43） 13,939,734.50
expressed with “-”)
Investment losses (gains expressed
（31,452,189.90） （50,073,259.81）
with “-”)
Decreased in deferred income tax
（10,159,727.35） （6,463,163.49）
assets (increase expressed with “-”)
Increase in deferred income tax
（1,977,084.09） 1,307,851.74
liabilities (decrease expressed with “-”)
Decrease in inventories (increase
（61,057,169.21） （100,165,058.76）
expressed with “-”)
Decrease in operating receivables
（395,035,590.30） （202,353,385.01）
(increase expressed with “-”)
Increase in operating payables
141,628,284.84 （606,929,030.07）
(decrease expressed with “-”)
Other 31,974,609.20 152,402,772.57
Net cash flow from operating
801,150,899.38 197,604,865.77
activities
2. Significant investment and financing
activities not involving cash deposit and
withdrawal
Conversion of debt into capital
Convertible bonds due within 1 year
Fixed assets under financing lease
3. Net changes in cash and cash
equivalents:
Ending balance of cash 4,143,545,526.92 4,660,333,761.86
Less: Beginning balance of cash 4,088,612,262.04 4,149,734,694.38
Plus: Ending balance of cash
equivalents
Less: Ending balance of cash
equivalents
Net increase in cash and cash
54,933,264.88 510,599,067.48
equivalents
(2) Net cash paid for obtaining subsidiaries in current period
Unit: yuan
Amount
Cash or cash equivalents paid in the current period for business
1,177,540,000.00
combinations occurred in current period
Including:
Longterm Medical 727,540,000.00
Guilin Latex 450,000,000.00
Less: Cash and cash equivalents held by the company on the
173,677,127.71
acquisition date
Including:
Longterm Medical 57,724,670.60
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Guilin Latex 115,952,457.11
Including:
Net cash paid for obtaining subsidiaries 1,003,862,872.29
Other description:
(3) Net cash from disposal of subsidiaries in current period
Unit: yuan
Amount
Cash or cash equivalents received by disposal of subsidiaries in
39,868.87
the current period
Including:
Mifu Shanghai 39,868.87
Less: Cash and cash equivalents held by the company on the
39,868.87
date of losing the control right
Including:
Mifu Shanghai 39,868.87
Including:
Net cash from disposal of subsidiaries 0.00
Other description:
(4) Composition of cash and cash equivalents
Unit: yuan
Item Closing Balance Beginning balance
I. Cash 4,143,545,526.92 4,088,612,262.04
Including: cash on hand 125,582.80 65,897.39
Bank deposit readily available for
4,143,197,161.70 4,088,546,364.65
payment
Other monetary capital readily
222,782.42
available for payment
III. Balance of cash and cash equivalents
4,143,545,526.92 4,088,612,262.04
at end of period
Other description:
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:
Not applicable.
81. Assets with ownership or use rights restricted
Unit: yuan
Item Ending book value Causes for restriction
For details, see Section X. Financial
Monetary capital 70,122,981.84 Statements "\7. Notes to consolidated
financial statements \1. Monetary Funds".
For details, please refer to Section X.
Financial Statements "\XVI. Other
Important Issues \7. Other Important
Fixed assets 6,320,201.24
Transactions and Events that Affect
Investors’ Decisions 1. Urban Renewal
Project of Winner Industrial Park".
Total 76,443,183.08
Other description:
169
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82. Foreign currency monetary items
(1) Foreign currency monetary items
Unit: yuan
Ending balance in foreign Ending balance converted to
Item Conversion exchange rate
currency RMB
Monetary capital 313,057,448.52
Including: USD 43,410,193.68 6.7114 291,343,173.86
EUR 816,600.39 7.0084 5,723,062.17
HKD 18,581,344.23 0.8552 15,890,765.59
Yen 97,323.00 0.0491 4,778.56
Ringgit 62,733.34 1.5250 95,668.34
Accounts receivable 254,102,893.25
Including: USD 36,147,256.23 6.7114 242,598,695.46
EUR 1,024,452.51 7.0084 7,179,772.97
HKD 5,048,285.94 0.8552 4,317,294.14
Yen 145,227.73 0.0491 7,130.68
Long-term loans
Including: USD
EUR
HKD
Other receivables 7,041,898.35
Including: USD 62,500.00 6.7114 419,462.50
HKD 7,743,727.61 0.8552 6,622,435.85
Accounts payable 1,681,802.35
Including: USD 66,588.65 6.7114 446,903.07
EUR 119,403.49 7.0084 836,827.42
HKD 446,151.00 0.8552 381,548.34
Yen 336,528.00 0.0491 16,523.52
Other payables 45,095,601.17
Including: USD 5,578,404.06 6.7114 37,438,901.01
EUR 28,890.51 7.0084 202,476.25
HKD 8,716,351.63 0.8552 7,454,223.91
Other description:
NA
(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
83. Hedge
Disclose the qualitative and quantitative information of hedging items, related hedging instruments and hedged risks according to the
hedging category:
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84. Government subsidies
(1) Basic information of government subsidies
Unit: yuan
Amount recorded in current
Type Amount Presented item
profit and loss
1. Government subsidies
related to assets
Subsidy of 2014 Hubei
provincial science and
technology support plan project 1,500,000.00 Deferred income 75,000.00
(the second batch) -
Huanggang Winner
Subsidy for Huanggang Chibi
Avenue demolition company
3,169,359.20 Deferred income 52,822.64
planning change - Huanggang
Winner
Second batch of traditional
industry transformation subsidy 1,900,000.00 Deferred income 104,587.14
in 2017 - Huanggang Winner
First batch of traditional
subsidies in 2019 - Huanggang 1,210,000.00 Deferred income 60,500.00
Winner
Municipal Economic and
Information Bureau on the
issuance of emergency material
support system construction 1,440,000.00 Deferred income 375,648.00
technical transformation
special subsidy - Huanggang
Winner
Production subsidy for
COVID-19 epidemic
11,400,000.00 Deferred income 3,420,000.00
prevention materials in 2020 -
Huanggang Winner
Subsidy for purchasing
equipment in key enterprise
9,370,000.00 Deferred income 2,522,692.27
"Three Batches" at provincial
levels - Huanggang Winner
2020 special funds for the
high-quality development of
3,000,000.00 Deferred income 168,224.30
manufacturing - Huanggang
Winner
2021 urban technical
transformation fund - 1,050,000.00 Deferred income 56,250.00
Huanggang Winner
Technology Center R & D
4,070,932.05 Deferred income 106,394.88
project subsidy - the Company
Automatic transformation of
surgical consumables 1,860,000.00 Deferred income 93,000.00
production line - the Company
20180311 Subsidies for
research, science and
innovation on the technology
1,200,000.00 Deferred income 120,377.36
of thermo-responsive self-
curing wound regeneration and
repair materials - the Company
2020 technical transformation
project of Shenzhen COVID-
19 epidemic prevention and 20,000,000.00 Deferred income 1,000,000.00
control key material production
enterprises - the Company
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Technical innovation subsidy
for the Purcotton Phase II
4,755,300.00 Other incomes 83,183.10
Expansion Project - Jingmen
Winner
2021 equipment subsidies
during the COVID-19 6,800,000.00 Deferred income 850,000.00
pandemic - Jingmen Winner
Key technical reform and
expansion project (cotton
1,000,000.00 Deferred income 54,054.00
spunlunge wipes production
line project) - Tianmen Winner
Production line project with an
annual output of 120 million
930,000.00 Deferred income 53,653.86
bales of cotton fabric in 2017 -
Tianmen Winner
Provincial traditional industry
transformation and upgrading
special funds for the first batch
1,320,000.00 Deferred income 68,275.86
of block funds allocation plan
in Tianmen City in 2019 -
Tianmen Winner
Annual equipment investment
subsidies (Spunlace Phase III) - 15,000,000.00 Deferred income 0.00
Tianmen Winner
Key technical transformation
and expansion projects
(Spunlace production line 1,000,000.00 Deferred income 49,999.98
project Phase II) - Tianmen
Winner
Project on implementing the
technical reformation policy of
"Zero Land" in Wuhan and the
municipal industrial investment
and technical transformation
8,000,000.00 Deferred income 291,144.36
special fund project of Bureau
for Science, Technology and
Economic Information
Technology of Xinzhou
District - Wuhan Winner
Subsidy of COVID-19
epidemic prevention and
control materials production
enterprise for capacity 3,645,000.00 Deferred income 295,860.16
expansion & technical
upgrading project - Wuhan
Winner
1 million provincial special
funds for the development of
1,000,000.00 Deferred income 31,413.39
manufacturing - Wuhan
Winner
Received subsidies from the
development of the central
government emergency
1,600,000.00 Deferred income 2,740.44
material security system for
production capacity
improvement - Wuhan Winner
Subsidy funds for municipal
government project
12,406,500.00 Deferred income 206,775.00
infrastructure construction -
Chongyang Winner
Subsidies for first batch of
technological transformation 1,000,000.00 Deferred income 53,078.56
award of industrial enterprises
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in 2018 - Chongyang Winner
Surgical gown production line
project subsidy - Chongyang 4,000,000.00 Deferred income 216,216.22
Winner
Funds subsidy for purchasing
epidemic prevention equipment
5,590,000.00 Deferred income 281,848.74
in key enterprises of "Three
Batches" - Chongyang Winner
Award for technical upgrading
600,000.00 Deferred income 32,727.27
project - Chongyang Winner
2020 Provincial special funds
for the high-quality
1,000,000.00 Deferred income 52,631.58
development of manufacturing
- Jiayu Winner
Subsidy funds for land and
subsidy funds for sewage 11,265,000.00 Deferred income 203,416.66
treatment - Jiayu Winner
Xianning finance provincial
traditional industry
1,480,000.00 Deferred income 26,428.57
transformation and upgrading
fund - Jiayu Winner
2019 fund project of the
transformation and upgrading
750,000.00 Deferred income 13,392.85
of traditional industries - Jiayu
Winner
Other 7,718,055.23 Deferred income 749,111.08
Total 152,030,146.48 11,771,448.26
2. Government subsidies
related to income
0117 2021 Tax fee refund
453,393.92 Other incomes 453,393.92
received - the Company
0111 Special fund for scientific
and technological innovation 429,537.00 Other incomes 429,537.00
received - the Company
0111 2021 Special fund by
Longhua District for industry
development received - The 801,294.00 Other incomes 801,294.00
first batch in 2020 - the
Company
0111 2021 Special fund by
Longhua District for industry
development received - The 457,735.00 Other incomes 457,735.00
second batch in 2019 - the
Company
0330 Subsidy by the
Information Technology
Bureau for the single champion 2,000,000.00 Other incomes 2,000,000.00
of manufacturing received - the
Company
0425 Special subsidy against
epidemic by Shenzhen Institute
750,000.00 Other incomes 750,000.00
of Advanced Technology
received - the Company
0428 Special fund by Shenzhen
Longhua District Science and
Technology Innovation Bureau
489,000.00 Other incomes 489,000.00
for scientific and technological
innovation received - the
Company
0531 Subsidy by Commerce
1,540,000.00 Other incomes 1,540,000.00
Bureau of Shenzhen
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Municipality for a premium
from Jan. to Jun. in 2021
received - the Company
0628 2022 Special fund for the
development of epidemic
137,900.00 Other incomes 137,900.00
prevention industry received -
the Company
Xinjiang Finance - Subsidies
for shipping cotton out of 675,700.00 Other incomes 675,700.00
Xinjiang - Huanggang Winner
Award for high-tech enterprise
200,000.00 Other incomes 200,000.00
- Tianmen Winner
2021 Subsidies for shipping
cotton out of Xinjiang - 253,300.00 Other incomes 253,300.00
Tianmen Winner
Subsidy for no shutdown and
early resumption of work
206,100.00 Other incomes 206,100.00
during the 2022 Spring Festival
- Tianmen Winner
Tax Contribution Award -
500,000.00 Other incomes 500,000.00
Chongyang Winner
Social security subsidies for
people with enterprise
602,114.00 Other incomes 602,114.00
employment difficulty -
Chongyang Winner
Export Performance Award -
276,900.00 Other incomes 276,900.00
Chongyang Winner
Overtime subsidy for enterprise
during the Spring Festival - 254,500.00 Other incomes 254,500.00
Chongyang Winner
Special fund by the central
government for foreign trade
200,000.00 Other incomes 200,000.00
development - Chongyang
Winner
Recruitment of key groups for
employment - Chongyang 514,800.00 Other incomes 514,800.00
Winner
Incentive funds for scientific
and technological innovation
(Municipal-level joint
innovation by enterprise and 325,000.00 Other incomes 325,000.00
university / Transformation of
scientific and technological
achievements) - Jiayu Winner
2020 Incentive funds for
invisible champion enterprise 100,000.00 Other incomes 100,000.00
in Jiayu county - Jiayu Winner
Special fund by Longhua
District Industry and
Information Technology 1,192,300.00 Other incomes 1,192,300.00
Bureau for industry
development - PurCotton
Other 4,616,371.11 Other incomes 4,616,371.11
Total 16,975,945.03 16,975,945.03
(2) Return of government subsidies
□ Applicable Not applicable
Other description:
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85. Other
VIII. Consolidation scope changes
1. Business combination not under common control
(1) Business combination not under common control occurred in current period
Unit: yuan
Income of Net profit of
Basis for the acquiree the acquiree
Time of Cost of Equity Method of determinatio from the from the
Name of the Acquisition
equity equity acquisition equity n of acquisition acquisition
acquiree date
acquisition acquisition ratio acquisition acquisition date to the date to the
date end of the end of the
period period
Zhejiang
Longterm Actual
April 30, 727,540,000. April 30, 86,191,160.1
Medical 55.00% Acquisition control right 8,898,577.33
2022 00 2022 1
Technology obtained
Co., Ltd.
Winner Actual
June 30, 450,000,000. June 30,
Guilin Latex 100.00% Acquisition control right 0.00 0.00
2022 00 2022
Co., Ltd. obtained
Other description:
The net profit of Zhejiang Longterm Medical Technology Co., Ltd. from the purchase date to the end of the period is the net profit of
the acquiree calculated continuously based on the fair value of identifiable net assets on the purchase date (April 30, 2022)
(2) Combination cost and goodwill
Unit: yuan
Combination cost Longterm Medical Guilin Latex
--Cash 727,540,000.00 450,000,000.00
--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 727,540,000.00 450,000,000.00
Loss: the share of the fair value of identifiable net assets acquired 337,122,142.50 251,532,486.32
The amount of goodwill / combination cost less than the share of the fair value
390,417,857.50 198,467,513.68
of identifiable net assets acquired
Determination method of fair value of combination cost, contingent consideration and explanation of its changes:
Not applicable.
Main reasons for the formation of large amount of goodwill:
Other description:
NA
(3) Identifiable assets and liabilities of the acquiree on the acquisition date
Unit: yuan
Longterm Medical Guilin Latex
Fair value on the Book value on the Fair value on the Book value on the
acquisition date acquisition date acquisition date acquisition date
Assets: 1,000,483,007.30 691,579,798.72 427,163,795.13 289,256,819.04
Monetary capital 68,842,612.15 68,842,612.15 115,952,457.11 115,952,457.11
Accounts receivable payments 69,693,735.14 69,693,735.14 9,223,748.32 9,223,748.32
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Inventory 83,199,252.80 76,423,001.15 83,232,113.75 71,013,902.10
Fixed assets 373,892,189.76 364,324,320.78 56,493,495.59 34,935,720.80
Intangible assets 343,100,504.54 50,178,817.10 147,365,520.92 43,234,531.27
Long-term unamortized expenses 2,531,712.35 2,894,311.84
Other assets 59,223,000.56 59,223,000.56 14,896,459.44 14,896,459.44
Debt: 387,533,657.30 341,198,176.02 175,631,308.81 154,945,262.40
Loan 176,996,912.90 176,996,912.90 0.00
Account payable payments 43,109,810.82 43,109,810.83 20,528,701.09 20,528,701.09
Deferred income tax liabilities 46,335,481.29 0.00 20,686,046.41 0.00
Notes payable 56,030,000.00 56,030,000.00 0.00 0.00
Contract liabilities 16,984,188.90 16,984,188.90 48,572,857.70 48,572,857.70
Other debts 48,077,263.39 48,077,263.39 85,843,703.61 85,843,703.61
Net assets 612,949,350.00 350,381,622.70 251,532,486.32 134,311,556.64
Loss: Minority equity 275,827,207.50 157,671,730.22 0.00 0.00
Net assets acquired 337,122,142.50 192,709,892.49 251,532,486.32 134,311,556.64
Determination method of fair value of identifiable assets and liabilities:
Contingent liabilities of the acquiree incurred in business combination
Not applicable.
Other description:
(4) Gains or losses arising from remeasurement of equity held prior to the acquisition date at fair value
Whether there are transactions that realize the business combination step by step through multiple transactions and obtain control
right during the reporting period
□Yes No
(5) Relevant description of the combination consideration or the fair value of the identifiable assets and
liabilities of the acquiree that cannot be reasonably determined on the acquisition date or at the end of
current period of the combination
(6) Other description
2. Business combination under common control
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
Whether there is a single disposal of investment in subsidiaries, i.e. loss of control right
□Yes No
Whether there is a situation that the investment in subsidiaries is disposed step by step through multiple transactions and the control
right is lost in current period
□Yes No
5. Change of merger scope for other reasons
Explain the changes in the scope of combination caused by other reasons (such as the establishment of new subsidiaries, liquidation
of subsidiaries, etc.) and relevant information:
Pure HB (Shanghai) was deregistered on February 21, 2022.
6. Other
NA
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IX. Interests in other entities
1. Interests in a subsidiary
(1) Composition of enterprise group
Main operation Registration Shareholding ratio
Subsidiary name Business nature Way of obtaining
site place Direct Indirect
Shenzhen City, Shenzhen City,
Shenzhen Sale of Purcotton
Guangdong Guangdong 100.00% Establishment
Purcotton products
Province Province
Beijing Sale of Purcotton
Beijing Beijing 100.00% Establishment
Purcotton products
Guangzhou City, Guangzhou City,
Guangzhou Sale of Purcotton
Guangdong Guangdong 100.00% Establishment
Purcotton products
Province Province
Shanghai Sale of Purcotton
Shanghai Shanghai 100.00% Establishment
Purcotton products
Shenzhen City, Shenzhen City,
Qianhai Sale of Purcotton
Guangdong Guangdong 100.00% Establishment
Purcotton products
Province Province
Production and
sales of cotton
spun laced non- Business
Winner Medical Huanggang City, Huanggang City, woven fabric, combination
100.00%
(Huanggang) Hubei Province Hubei Province medical under common
consumables and control
Purcotton
products
Production and
Business
sales of medical
Winner Medical Jingmen City, Jingmen City, combination
consumables and 100.00%
(Jingmen) Hubei Province Hubei Province under common
Purcotton
control
products
Business
Chongyang Chongyang Production and
Winner Medical combination
County, Hubei County, Hubei sales of medical 100.00%
(Chongyang) under common
Province Province consumables
control
Production and
Business
sales of medical
Winner Medical Jiayu County, Jiayu County, combination
consumables and 100.00%
(Jiayu) Hubei Province Hubei Province under common
Purcotton
control
products
Business
Production and
Winner Medical Zhijiang City, Zhijiang City, combination
sales of medical 100.00%
(Yichang) Hubei Province Hubei Province under common
gray cloth
control
Production and
sales of cotton Business
Winner Medical Tianmen City, Tianmen City, spun laced non- combination
100.00%
(Tianmen) Hubei Province Hubei Province woven fabric and under common
Purcotton control
products
Business
Sales of medical
Winner Medical combination
Hong Kong Hong Kong consumables and 60.00%
(Hong Kong) under common
consumer goods
control
Business
Winner
Huanggang City, Huanggang City, combination
(Huanggang) Cotton trade 100.00%
Hubei Province Hubei Province under common
Cotton
control
Winner Medical Malaysia Malaysia There is no 100.00% Business
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Malaysia actual business combination not
operation under common
control
There is no
Heyuan City, Heyuan City,
Winner Medical actual business
Guangdong Guangdong 100.00% Establishment
(Heyuan) operation at
Province Province
present
Production and
sterilization of
cotton spun laced
Winner Medical Wuhan City, Wuhan City,
non-woven 100.00% Establishment
(Wuhan) Hubei Province Hubei Province
fabric and
Purcotton
products
Shenzhen City, Shenzhen City, Sales of personal
PureH2B Guangdong Guangdong care and other 100.00% Establishment
Province Province products
Shenzhen City, Shenzhen City,
Sales of Cotton
Purunderwear Guangdong Guangdong 100.00% Establishment
Lining products
Province Province
Huanggang Huanggang City, Huanggang City, Sale of Purcotton
100.00% Establishment
Purcotton Hubei Province Hubei Province products
Business
Production and
Longterm Huzhou, Huzhou, combination not
sales of medical 55.00%
Medical Zhejiang Zhejiang under common
consumables
control
Technology Business
Hangzhou Hangzhou, Hangzhou, promotion and combination not
55.00%
Shengyi Zhejiang Zhejiang application under common
service industry control
Software and Business
Xi’an Long Information combination not
Xi’an, Shaanxi Xi’an, Shaanxi 55.00%
Temu Technology under common
Services Industry control
Business
Rubber and
Deqing combination not
Deqing, Zhejiang Deqing, Zhejiang plastic products 55.00%
Longterm under common
industry
control
Business
United States Georgia, United Georgia, United combination not
No business yet 55.00%
Longterm States States under common
control
Business
combination not
Guilin Latex Guilin, Guangxi Guilin, Guangxi Rubber products 100.00%
under common
control
Difference between the shareholding ratio and the voting right ratio in the subsidiary:
Not applicable.
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:
Not applicable.
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:
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(2) Important non-wholly owned subsidiary
Unit: yuan
Current profits and Current dividends
Minority shareholding Ending balance of
Subsidiary name losses attributable to declared to minority
ratio minority equity
minority shareholders shareholders
Difference between the shareholding ratio and the voting right ratio of the minority shareholders of the subsidiary:
Not applicable.
Other description:
Not applicable.
(3) Main financial information of important non-wholly owned subsidiaries
Unit: yuan
Closing Balance Beginning balance
Subsidia Non- Non-
Non- Current Total Non- Current Total
ry name Current current
Total
liabilitie
current
liabilitie
Current
current
Total
liabilitie
current
liabilitie
assets assets liabilitie assets assets liabilitie
assets s s assets s s
s s
Unit: yuan
Amount incurred in current period Amount incurred in previous period
Subsidiary Cash flow Cash flow
Total Total
name Operating from Operating from
Net profit comprehensi Net profit comprehensi
income financing income financing
ve income ve income
activities activities
Other description:
(4) Major restrictions on the use of enterprise group assets and the settlement of enterprise group debts
Not applicable.
(5) Financial or other support provided to structured entity included in the consolidated financial
statements
Not applicable.
Other description:
Not applicable.
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
Not applicable.
(2) Impact of transactions on minority shareholders' equity and owners' equities attributable to the
owners of parent company
Unit: yuan
Purchase cost / Disposal consideration
--Cash
--Fair value of non-cash assets
Total purchase cost / Disposal consideration
Loss: The share of the net asset of a subsidiary calculated based
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on the proportion of equity acquired/disposed
Balance
Including: Capital reserve adjusted
Surplus reserve adjusted
Undistributed profit adjusted
Other description
Not applicable.
3. Equity in joint venture arrangement or joint venture
(1) Important cooperative enterprises or joint ventures
Shareholding ratio Accounting
treatment
Important
method of
cooperative Main operation Registration
Business nature investment in
enterprises or site place Direct Indirect cooperative
joint ventures
enterprises or
joint ventures
Difference between the shareholding ratio and the voting right ratio in the cooperative enterprise or joint venture:
Not applicable.
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:
Not applicable.
(2) Major Financial Information about Important Cooperative Enterprises
Unit: yuan
Ending balance/amount incurred in current Beginning balance/amount incurred in
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
The fair value of equity investments in
joint ventures with publicly quoted prices
Operating income
Financial expenses
Income tax expenses
Net profit
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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 current Beginning balance/amount incurred in
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
Operating income
Net profit
Net profit of discontinued operation
Other comprehensive income
Total comprehensive income
Dividends received from cooperative
enterprises in current year
Other description
(4) Summary of financial information of unimportant cooperative enterprises and joint ventures
Unit: yuan
Ending balance/amount incurred in current Beginning balance/amount incurred in
period previous period
Cooperative enterprise:
Total book value of investment 19,358,011.13 16,949,801.24
Total number of following items by
shareholding ratio
- Joint venture:
Total number of following items by
shareholding ratio
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- Net profit 2,408,209.89 3,525,570.83
- Total comprehensive income 2,408,209.89 3,525,570.83
Other description
(5) Significant restrictions on the ability of cooperative enterprises and joint ventures to transfer funds to
the Company
Not applicable.
(6) Excess losses of cooperative enterprise or joint venture
Unit: yuan
Unrecognized loss in current Accumulated unrecognized
Name of cooperative enterprise Accumulated unrecognized
period (or net profit shared in losses at the end of current
or joint venture losses in the previous period
current period) period
Other description
Not applicable.
(7) Unconfirmed commitments related to investment in cooperative enterprise
Not applicable.
(8) Contingent liabilities related to investment in cooperative enterprise or joint venture
Not applicable.
4. Important pooling of interests
Name of joint Shareholding ratio / share enjoyed
Main operation site Registration place Business nature
operation Direct Indirect
Difference between the shareholding ratio or share enjoyed and the voting right ratio in joint operation:
Not applicable.
If the joint operation is a separate entity, it shall be classified as the basis of joint operation:
Not applicable.
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
Not applicable.
6. Other
Not applicable.
X. Risks associated with financial instruments
The Company faces various financial risks in the process of operation: credit risk, market risk and liquidity risk.
The board of directors of the Company is fully responsible for the determination of risk management objectives and
policies and ultimately responsible for the risk management objectives and policies, provided that the board of
directors has authorized the Company’s internal audit department to design and implement procedures to ensure the
effective implementation of risk management objectives and policies. The board reviews the effectiveness of the
procedures implemented and the reasonableness of risk management objectives and policies through monthly
reports submitted by the internal audit supervisor.
The overall objective of the Company’s risk management is to develop risk management policies to minimize risk
without overly affecting the Company' s competitiveness and strain capacity.
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(I) 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 is mainly faced with the customer credit risk caused by credit sales. Prior to signing a new contract,
the Company will assess the credit risk of a new customer, including external credit ratings and, in some cases, bank
reference letter (when such information is available). The Company sets a credit sales limit for each customer, which
is the maximum amount that does not require additional approval.
The Company ensures that the overall credit risk of the Company is under control by quarterly monitoring of the
credit rating of existing customers and monthly review of the aging analysis of accounts receivable. When
monitoring the credit risk of customers, they are grouped according to their credit characteristics. Customers rated
as “high risk” are placed on the Restricted Customer List and can only be sold on credit for a future period with
additional approval, or they must be required to pay in advance.
(II) 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.
The Company’s various financial liabilities are shown as follows in terms of undiscounted contract cash flows on
maturity dates:
Closing Balance
Item Immediate More than
Within 1 year 1-2 years 2-5 years Total
repayment 5 years
Short-term debt 1,141,476,733.93 1,141,476,733.93
Notes payable 146,065,963.57 146,065,963.57
Accounts
996,960,746.96 996,960,746.96
payable
Other payables 451,898,553.42 451,898,553.42
Long-term
28,000,000.00 28,000,000.00
loans
Lease liabilities 220,429,023.53 172,727,158.22 186,096,441.44 578,908,208.74
Total 2,956,831,021.41 200,727,158.22 186,096,441.44 3,343,310,206.62
Beginning balance
Item Immediate More than
Within 1 year 1-2 years 2-5 years Total
repayment 5 years
Notes payable 36,200,130.04 36,200,130.04
Accounts
734,521,490.60 734,521,490.60
payable
Other payables 443,946,028.46 443,946,028.46
Lease liabilities 240,795,667.26 189,493,128.55 808,798,827.96 1,239,087,623.77
Total 1,455,463,316.36 189,493,128.55 808,798,827.96 2,453,755,272.87
(III) Market risk
Market risk of financial instruments refers to the risk that the fair value or future cash flow of financial instruments
fluctuates due to the change of market price, including exchange rate risk, interest rate risk and other price risk.
1. Interest rate risk
Interest rate risk refers to the risk that the fair value or future cash flow of financial instruments fluctuates due to
the change of market interest rate.
The interest rate risk that the Company faces mainly comes from the bank's long-term borrowing.
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2. Exchange rate risk
Exchange rate risk refers to the risk that the fair value or future cash flow of financial instruments fluctuates due to
the change of foreign exchange rate.
The Company continuously monitors foreign currency transactions and the scale of foreign currency assets and
liabilities to minimize foreign exchange risks. In addition, the Company may enter into forward foreign exchange
contracts or currency exchange contracts to achieve the purpose of avoiding the exchange rate risk. The Company
has not signed any forward foreign exchange contracts or currency swap contracts during the current period and the
previous period.
The exchange rate risk faced by the Company mainly comes from financial assets and financial liabilities
denominated in USD. The amounts of foreign currency financial assets and foreign currency financial liabilities
converted into RMB are listed as follows:
Closing Balance
Item
USD EUR HKD Yen Ringgit Total
Foreign currency
financial assets
Monetary capital 291,343,173.86 5,723,062.17 15,890,579.77 4,782.06 95,670.85 313,057,268.71
Accounts
242,598,695.46 7,179,772.97 4,317,243.65 7135.91 254,102,847.99
receivable
Other
419,462.50 6,622,358.41 7,041,820.91
receivables
Subtotal 534,361,331.82 12,902,835.14 26,830,181.83 11,917.97 95,670.85 574,201,937.61
Foreign currency
financial 0.00
liabilities
Accounts
446,903.07 836,827.42 381,543.87 16,535.64 1,681,810.00
payable
Other payables 37,438,901.01 202476.25 7,454,136.75 45,095,514.01
Subtotal 37,885,804.08 1,039,303.67 7,835,680.62 16,535.64 - 46,777,324.01
（4,617.67
Net amount 496,475,527.74 11,863,531.47 18,994,501.21 95,670.85 527,424,613.60
）
On 30 June 2022, if the RMB appreciates or depreciates by 5% against USD / EUR / HKD / Yen / Ringgit, all other
variables being held constant, the net profit of the Company will be reduced or increased by RMB22,683,384.59.
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.
XI. 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) Trading financial
1,413,871,232.59 1,313,043,323.76 2,726,914,556.35
assets
1. Financial assets
measured with fair value
1,413,871,232.59 1,313,043,323.76 2,726,914,556.35
and with the changes
included in current profit
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and loss
(1) Debt instruments
1,413,871,232.59 1,313,043,323.76 2,726,914,556.35
investment
(2) Amounts receivable
29,770,412.07 29,770,412.07
financing
Total assets
continuously measured 1,443,641,644.66 1,313,043,323.76 2,756,684,968.42
at 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
current period, the reasons for the conversion and the policies for determining the conversion time
point
7. Valuation technology change and reason of change in current period
8. Fair value of financial assets and financial liabilities not measured at fair value
9. Other
XII. Related parties and connected transactions
1. Parent company of the Company
Shareholding ratio
Voting right ratio of
Parent company of the parent
Registration place Business nature Registered capital the parent company
name company in the
in the Company
Company
Equity investment
Winner Group HKD
Cayman Islands and management 68.10% 68.10%
Limited 1,143,000.00
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:
NA
2. Subsidiaries of the Company
See Note "IX. Interests in other entities" for information on the subsidiaries of the Company.
3. Cooperative enterprises and joint ventures
See Note "IX. Interests in other entities" for important cooperative enterprises or joint ventures of the Company.
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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 Joint venture
Other description
4. Situation of other related parties
Name of other related parties Relationship of other related parties with the Company
Shareholder of the Company, holding 6.83% of the Company’s
Sequoia Xinyuan
shares
Shareholder of the Company, holding 4.14% of the Company’s
Xiamen Leyuan Investment Partnership (limited partnership)
shares
Shareholder of the Company, holding 2.20% of the Company’s
Xiamen Yutong Investment Partnership (limited partnership)
shares
Shareholder of the Company, holding 1.99% of the Company’s
SCGC
shares
Shareholder of the Company, holding 1.33% of the Company’s
Xiamen Huikang Investment Partnership (limited partnership)
shares
Shareholder of the Company, holding 0.68% of the Company’s
Xiamen Zepeng Investment Partnership (limited partnership)
shares
Wuhan Zhuoling Packaging Co., Ltd. ((hereinafter referred to as A company controlled by close family members of the
“Wuhan Zhuoling”) Company’s key managers
Glory Ray Holdings Limited A company controlled by the actual controller
Shenzhen Breo Technology Co., Ltd. (hereinafter referred to as A company with the Company’s independent director Liang
“Breo”) Wenzhao as an independent director
Shenzhen Ellassay Fashion Co., Ltd. (hereinafter referred to as A company with the Company’s independent director Zhou
“Ellassay”) Xiaoxiong as an independent director
Li Jianquan Actual controller of the company
Shareholder of the Company, holding 13.94% of the Company’s
Xie Ping
shares
Shareholder of the Company, holding 6.32% of the Company’s
Li Xiaoyuan
shares
Fang Xiuyuan Director, deputy general manager, chief financial officer
Xu Xiaodan Director
Guo Zhenwei Director
Liang Wenzhao Independent director, left in the last period
Zhou Xiaoxiong Independent director, left in the last period
Bi Qun Independent director, left in the last period
Liu Weiwei Chairman of the Board of Supervisors, left in the last period
Ye Yangjing Independent director, left in the last period
Key Ke Liu (Liu Ke) Independent director
Peng Jianfeng Independent director
Xie Jiawei Independent director
Zhang Tingting Chairman of the board of supervisors
Liu Hua Supervisor
Wang Ying Supervisor
Yin Wenling Deputy general manager, left in the last period
Zhang Li Deputy general manager
Chen Huixuan Deputy general manager, secretary to the board of directors
Song Haibo Key technical personnel
Wang Huan Key technical personnel
Other description
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5. Connected transaction
(1) Connected transaction of purchases and sales of goods, provision and acceptance of services
Purchase of goods/acceptance of services
Unit: yuan
Whether the
Related transaction Amount incurred in Approved Amount incurred in
Related party transaction quota is
content current period transaction quota previous period
exceeded
Wuhan Zhuoling Purchasing goods or
37,624,707.33 No 10,406,270.74
Packaging Co., Ltd. services
Purchasing goods or
Chengdu Winner 343,008.97 No 88,633.66
services
Purchasing goods or
Breo 0.00 No 124,234.00
services
Selling commodities/offering labor
Unit: yuan
Amount incurred in current Amount incurred in previous
Related party Related transaction content
period period
Chengdu Winner Selling goods or services 5,497,777.06 2,362,509.36
SCGC Selling goods or services 59,350.00 28,238.94
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
Fiduciary
Pricing basis of income /
Name of Name of Entrusted / Fiduciary / Fiduciary /
fiduciary income contracting
entrusting party / entrusting party / contracting asset contracting start contracting
/ contracting income
subcontractor contractor type date termination date
income recognized in
current period
Associated fiduciary/contracting
Not applicable.
Entrustment management/subcontracting of the Company:
Unit: yuan
Pricing basis of Fiduciary fee /
Name of Name of Entrusted / Entrusted / Entrusted /
fiduciary fee / subcontracting
entrusting party / entrusting party / subcontracting subcontracting subcontracting
subcontracting fee recognized in
subcontractor contractor asset type start date termination date
fee current period
Associated management/subcontracting
Not applicable.
(3) Related-party lease
The Company as the lessor:
Unit: yuan
Lease income recognized in the Lease income recognized in the
Name of lessee Type of leased assets
current period previous period
The Company as the lessee:
Unit: yuan
Simplified Variable lease
Type of Interest expenses
Name of processing of short- payments that are Right-of-use assets
leased Rent paid incurred on lease
lessor term leases and not included in the increased
assets liabilities
rental expenses of measurement of the
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low-value asset lease liabilities (if
leases (if applicable) applicable)
Amount Amount Amount Amount Amount Amount Amount Amount Amount Amount
incurred incurred incurred incurred incurred incurred incurred incurred incurred incurred
in in in in in in in in in in
current previous current previous current previous current previous current previous
period period period period period period period period period period
Related-party lease description
Not applicable.
(4) Related-party guarantee
The Company as the guarantor
Unit: yuan
Whether the guarantee
Secured party Amount guaranteed Guarantee start date Guarantee maturity date
has been fulfilled
The Company as the secured party
Unit: yuan
Whether the guarantee
Guarantor Amount guaranteed Guarantee start date Guarantee maturity date
has 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 current Amount incurred in previous
Related party Related transaction content
period period
(7) Key management personnel remuneration
Unit: yuan
Item Amount incurred in current period Amount incurred in previous period
Key management personnel remuneration 5,879,069.64 4,653,199.81
(8) Other connected transactions
NA
6. Accounts receivable and payable by related parties
(1) Receivables
Unit: yuan
Closing Balance Beginning balance
Project name Related party Provision for bad Provision for bad
Book balance Book balance
debt debt
Accounts receivable Chengdu Winner 0.00 0.00 1,925,119.44 96,255.97
Accounts receivable SCGC 0.00 0.00 35,880.00 1,794.00
(2) Payables
Unit: yuan
Project name Related party Ending book balance Beginning book balance
Accounts payable Chengdu Winner 4,172.20 69,711.48
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Accounts payable Wuhan Zhuoling 17,701,619.71 17,557,893.52
Contract liabilities SCGC 11,946.90 11,946.90
Contract liabilities Chengdu Winner 751,931.29 0.00
7. Related party commitment
NA
8. Other
NA
XIII. Share-based payment
1. Overall status of share-based payment
Applicable □ Not applicable
Unit: yuan
Total amount of equity instruments granted by the company
508,824,220.00
during the current period
Total amount of equity instruments exercised by the company
0.00
during the current period
Total amount of equity instruments invalidated by the company
0.00
during the current period
In case of the audited operating income in 2021 ≥ RMB 12
billion, the ownership proportion at the Company level is 100%;
in case of RMB 10 billion ≤ the audited operating income in
2021 < RMB 12 billion, the ownership proportion at the
Company level is 80%; in case of the audited business income in
2021 < RMB 10 billion, the restricted stock planned to be vested
by the incentive object shall not be vested and become invalid.
Range of the exercise price of the Company’s stock options In case of the audited operating income in 2022 ≥ the audited
outstanding at the end of the period and the remaining term of operating income in 2021 * (1+30%), the ownership proportion
the contract at the Company level is 100%; in case of the audited operating
income in 2021 * (1+20%) ≤ the audited operating income in
2022 < the audited operating income in 2021 * (1+30%), the
ownership proportion at the Company level is 80%; in case of
the audited business income in 2022 < the audited operating
income in 2021 * (1+20%), the restricted stock planned to be
vested by the incentive object shall not be vested and become
invalid.
Range of the exercise price of the Company’s other equity
instruments outstanding at the end of the period and the None
remaining term of the contract
Other description
2020 Restricted Stock Incentive Plan
1. Number of restricted stock granted
On November 27, 2020, the Company held the 15th meeting of the second Board of Directors and the 9th meeting
of the second Board of Supervisors, deliberated and passed the Proposal on the Company’s 2020 Restricted Stock
Incentive Plan (Draft) and Its Abstract. On December 15, 2020, the Company held the sixth extraordinary general
meeting of shareholders in 2020 to deliberate and pass the Proposal on the Company’s 2020 Restricted Stock
Incentive Plan (Draft) and Its Abstract. According to the above proposal, the number of restricted stock (Class II
restricted stock) to be granted in this incentive plan is 6.5 million, and the underlying stock involved is A -share
common stock, accounting for about 1.52% of the total capital stock of the Company at the time of announcement
of the draft incentive plan. Among them, 5.9 million shares were granted for the first time, accounting for about
1.38% of the total capital stock 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,
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senior managers, and other persons deemed to need incentives by the Board of Directors.
On December 18, 2020, the Company’s 17th meeting of the second Board of Directors and the 11th meeting of the
second Board of Supervisors deliberated and adopted the Proposal on First Granting Restricted Stocks to 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.
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 arrangement Vesting period Vesting ratio
From the first trading day of 17 months from the date of the first grant to the last
First vesting period 50%
trading day within 29 months from the date of the first grant
From the first trading day of 29 months from the date of the first grant to the last
Second vesting period 50%
trading day within 41 months from the date of the first grant
If the restricted stock corresponding to the reserved part is granted within 2020, the vesting arrangement for granting
restricted stocks reserved in this incentive plan is consistent with the vesting arrangement for the first grant of
restricted stock.
If the restricted stock corresponding to the reserved part is granted within 2021, the vesting arrangement for granting
restricted stocks reserved in this incentive plan is shown in the following table:
Vesting arrangement Vesting period Vesting ratio
From the first trading day of 12 months from the date of reserved granting to the last
First vesting period 50%
trading day within 24 months from the date of reserved granting
From the first trading day of 24 months from the date of reserved granting to the last
Second vesting period 50%
trading day 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.
2. Equity-settled share-based payments
Applicable □ Not applicable
Unit: yuan
The fair value of the restricted stock is calculated using the
Black-Scholes model option pricing formula; the fair value of
Method for determining the fair value of equity instruments on
other employee restricted stocks is determined by reference to
the grant date
the stock closing price on the grant date without taking into
account the liquidity discount.
Basis for the determination of the number of viable equity
None
instruments
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Reasons for significant differences between the current and
None
previous estimates
Accumulated amount of equity-settled share-based payments
134,254,791.45
recorded in capital reserves
Total amount of expenses recognized by equity-settled share-
42,396,249.94
based payments in current period
Other description
The first vesting period shall become invalid if it falls to meet the performance conditions.
3. Cash-settled share-based payments
□ Applicable Not applicable
4. Modification and termination of share-based payment
NA
5. Other
NA
XIV. Commitment and contingencies
1. Important commitment issues
Important commitments on balance sheet date
(1) Large-scale outsourcing contracts that have been signed or are about to be performed and their financial
implications
As of Thursday, June 30, 2022, the outstanding contracts among the large-value contracts signed by the Company
and its subsidiaries that are being or are about to be performed are as follows:
Project name Amount
Purcotton - Smart Logistics 11,427,862.00
Huanggang Winner - Packaging and production line for sanitary pads 7,420,000.00
Huanggang Winner - Sanitary pads production equipment 15,890,000.00
Huanggang Winner - Comprehensive Workshop 57,800,000.00
Jiayu Winner - Workshop development 258,340,000.00
Tianmen Winner - Intelligent 3D e-commerce warehouse for pure
28,460,636.70
cotton business
Wuhan Winner - Project payment Phase II 185,789,572.20
Total 565,128,070.90
2. Contingencies
(1) Important contingencies on balance sheet date
As of June 30, 2022, the Company has no important contingencies to be disclosed.
(2) Explanation is also required if the Company has no important contingencies to be disclosed
The Company has no important contingencies to be disclosed.
3. Other
NA
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XV. Post-balance sheet events
1. Important non-adjustment items
Unit: yuan
Influence number of financial Reasons for influence number
Item Description
position and operating results cannot be estimated
2. Profit distribution
Unit: yuan
3. Sales return
The Company has no significant sales returns after the balance sheet date.
4. Other post-balance sheet events
NA
XVI. Other important issues
1. Correction of previous accounting errors
(1) Retrospective restatement
Unit: yuan
Content of accounting error Report item name of each
Processing procedures Cumulative influence number
correction affected comparison period
(2) Prospective application
Reason for adopting prospective
Content of accounting error correction Approval procedures
application
2. Debt restructuring
Not applicable.
3. Assets replacement
(1) Exchange of non-monetary assets
Not applicable.
(2) Other asset replacement
4. Pension plan
Not applicable.
5. Discontinued operation
Unit: yuan
Profit from
discontinued
Income tax operations
Item Income Cost Total profit Net profit
expenses attributable to
the owners of
parent company
Other description
Not applicable.
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
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system, two reporting segments have been determined, respectively: medical consumables, health 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
Medical
Healthy consumer Offset between
Item consumables Unallocated Total
goods (segment 2) segments
(segment 1)
Operating income 3,276,874,349.09 1,881,070,146.63 5,157,944,495.72
Operating costs 1,761,683,682.74 878,872,880.90 2,640,556,563.64
Assets impairment
loss & credit 27,589,830.16 53,204,903.29 80,794,733.45
impairment loss
Depreciation
expense and
46,449,128.24 150,675,350.15 197,124,478.39
amortization
expense
Operating profit /
779,613,976.01 206,682,696.75 63,382,359.38 1,049,679,032.14
loss
Non-operating
（6,480,786.44） （6,480,786.44）
income and expense
Assets and liabilities
Total assets 5,909,996,547.66 3,431,793,583.51 6,180,704,833.34 15,522,494,964.51
Total liabilities 1,378,796,616.09 1,248,798,572.38 1,610,436,628.17 4,238,031,816.64
(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
7. Other important transactions and matters affecting the decision-making of investors
1. 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. At present, the above target land and part of the building are not mortgaged.
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.
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(2) Cooperation mode
The Company agrees to entrust the target land and building to Xinghe Real Estate for application for approval of
the urban renewal unit plan, and accepts the relocation compensation of Xinghe Real Estate according to the
conditions agreed in this agreement. Xinghe 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
Xinghe 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:
RMB400 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
Up to now, Galaxy Real Estate has paid the first margin of RMB50 million and the second advance compensation
of RMB100 million for demolition to the Company according to the agreement. The project has been publicized on
September 2019, and approved on December 2019. The special regulations have been approved by the office
meeting of the Update Bureau, and are waiting for the review and approval of the leadership group meeting of
Longhua District. Subsequent progress will be made in accordance with the procedures stipulated by the government,
and the specific progress will be subject to the government's approval.
According to the agreement, if the project fails to obtain the approval of the renewal unit plan due to government
policy or force majeure, either party has the right to terminate the contract, and the amount collected by the Company
will be returned to Galaxy Real Estate without interest within 30 days after the termination of the contract.
2. Heyuan investment and construction project
(1) Problem background
In 2016, under the guidance and promotion of Shenzhen Longhua District Committee and District Government, the
Company plans to transfer part of the production and logistics functions to Heyuan Zijin Linjiang Industrial Park in
response to the policy of supporting Heyuan City as a counterpart of Shenzhen City. In May 2016, the Company
and the People’s Government of Zijin County of Heyuan City signed the Agreement on Investment and Construction
of Medical Package and Cotton Household Goods Production Project (hereinafter referred to as the "Investment
Agreement"), with the construction land of the project covering 200,000 m2
After the agreement was signed and the Land Use Notice was obtained, the Company submitted the planning plan,
project application and approval form as required, and started the construction. In August 2016, Winner Medical
(Heyuan) obtained the Record Certificate of Enterprise Investment Projects in Guangdong Province issued by the
Development and Reform Bureau of Zijin County. In June 2017, Environmental Protection Bureau of Zijin County
issued the Approval on the Environmental Impact Report Form of the Construction Project of Winner Medical
(Heyuan) Co., Ltd. In accordance with the agreement, the Zijin County Government assisted in obtaining a series
of licenses such as state-owned land use right certificate and construction land planning permit.
After the project was signed and started construction, the government required all construction projects under
construction in Zijin Linjiang Industrial Park to stop due to land conflicts between the project site and the planned
Heyuan East Station of Jiangxi-Shenzhen High-speed Railway and the High-speed Railway New Town. Meanwhile,
the relevant land use procedures were suspended.
(2) Current progress
In June 2019, the Regulatory Detailed Planning and Constructional Detailed Urban Design of the Core Area of
Heyuan High-speed Railway New Town was published to the public from June 22, 2019 to July 22, 2019. According
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to the final publicity content, it is determined that the square in front of Heyuan East Station of High-speed Railway,
National Highway 205 and the High-speed Railway New Town overlap with the project land of Winner Medical
(Heyuan).
In October 2019, the Company signed a tripartite agreement with the People's Government of Zijin County and the
Management Committee of Heyuan Jiangdong New District to clarify the overall disposal plan. The land used for
Winner Medical (Heyuan)’s project and its above-ground buildings will be recovered by the People’s Government
of Zijin County, and the three parties agree to determine the amount of compensation through arbitration. The
People’s Government of Zijin County paid RMB30 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 RMB2,655,320.00. The land
transfer deposit of RMB3 million shall be returned to t he Company and compensate for the economic loss of
RMB550 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, 2022, the Company has received the land transfer deposit
of RMB3 million returned by the People's Government of Zijin County and paid the compensation of RMB319
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
Heyuan Winner'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 Hubei Winner, and the production
of medical package has been transferred to the Company's subsidiary Chongyang Winner. Hubei Winner and
Chongyang Winner have sufficient capacity to undertake the aforementioned production, logistics and warehousing
business originally intended to be undertaken by Heyuan Winner. The above matters of Heyuan Winner have not
caused significant adverse impact on the normal production and operation of the Company.
8. Other
NA
XVII. Notes on main items of parent company's financial statement
1. Accounts receivable
(1) Classified disclosure of accounts receivable
Unit: yuan
Closing Balance Beginning balance
Book balance Provision for bad debt Book balance Provision for bad debt
Class Book Book
Proportio Accruing value Proportio Accruing value
Amount Amount Amount Amount
n proportion n proportion
Includi
ng:
Accounts
receivable
of
provision 659,391,2 33,092,98 626,298,2 528,512,6 26,295,00 502,217,6
100.00% 5.02% 100.00% 4.98%
for bad 78.10 2.36 95.74 38.89 0.03 38.86
debt by
combinati
on
Includi
ng:
Aging
analysis 652,636,4 33,092,98 619,543,4 521,018,9 26,295,00 494,723,9
98.98% 5.07% 98.58% 5.05%
combinati 67.43 2.36 85.07 55.26 0.03 55.23
on
Other 6,754,810 1.02% 6,754,810 7,493,683 1.42% 7,493,683
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combinati .67 .67 .63 .63
on
659,391,2 33,092,98 626,298,2 528,512,6 26,295,00 502,217,6
Total 100.00% 5.02% 100.00% 4.98%
78.10 2.36 95.74 38.89 0.03 38.86
Provision for bad debt by combination: other combination - related parties within the group
Unit: yuan
Closing Balance
Name
Book balance Provision for bad debt Accruing proportion
Other combination - related
6,754,810.67 0.00 0.00%
parties within the group
Total 6,754,810.67 0.00
Description of the basis for determining the combination:
According to the Company's accounting policy, the related parties within the group do not make provision for bad debts.
Provision for bad debt by combination: aging analysis combination
Unit: yuan
Closing Balance
Name
Book balance Provision for bad debt Accruing proportion
Within 1 year (including 1
646,351,977.70 32,317,598.89 5.00%
year)
1~2 years (including 2 years) 7,439,964.88 743,996.49 10.00%
3~4 years (including 4 years) 50,000.00 25,000.00 50.00%
More than 5 years 70,169.20 70,169.20 100.00%
Total 653,912,111.78 33,156,764.57
Description of the basis for determining the combination:
On June 30, 2022, 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, 2022 is estimated based on the aging of accounts and estimated at the original loss ratio.
If the bad debt provision of accounts receivable is withdrawn according to the general model of expected credit loss, please refer to
the disclosure method of other receivables to disclose the relevant information of bad debt provision:
□ Applicable Not applicable
Disclosure by aging
Unit: yuan
Aging Closing Balance
Within 1 year (including 1 year) 651,831,144.02
1~2 years 7,439,964.88
More than 3 years 120,169.20
3~4 years 50,000.00
More than 5 years 70,169.20
Total 659,391,278.10
(2) Provision, recovery or reversal of bad debt reserves in the current period
Provision for bad debts in current period:
Unit: yuan
Amount of change in current period
Beginning
Class Recovered or Closing Balance
balance Accrual Write-off Other
reversed
Provision for bad
26,295,000.03 7,376,614.91 392,383.03 186,249.55 33,092,982.36
debt of accounts
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receivable
Total 26,295,000.03 7,376,614.91 392,383.03 186,249.55 33,092,982.36
Where the amount of bad debt provision recovered or reversed is important:
Unit: yuan
Unit name Amount recovered or reversed Recovery way
Not applicable.
(3) Accounts receivable actually written off at the current period
Unit: yuan
Item Amount written off
Irrecoverable balance receivable 186,249.55
Write-off of important accounts receivable:
Unit: yuan
Write-off Whether the
Nature of accounts Reasons for write-
Unit name Amount written off procedures payments arise from
receivable off
performed related transactions
Description of write-off accounts receivable:
Not applicable.
(4) Accounts receivable with Top 5 ending balances by debtor
Unit: yuan
Ending balance of accounts Proportion in total other ending Ending balance of bad debt
Unit name
receivable balance of accounts receivable provision
First 43,760,936.31 6.64% 2,188,046.82
Second 26,752,033.96 4.06% 1,337,601.70
Third 16,781,715.04 2.55% 839,085.75
Fourth 24,028,702.91 3.64% 1,201,435.15
Fifth 32,648,629.50 4.95% 1,632,431.48
Total 143,972,017.72 21.84%
(5) Accounts receivable derecognized due to transfer of financial assets
NA
(6) Amount of assets and liabilities formed by transferring accounts receivables and continuing
involvement
NA
Other description:
NA
2. Other receivables
Unit: yuan
Item Closing Balance Beginning balance
Other receivables 206,866,953.22 218,099,656.42
Total 206,866,953.22 218,099,656.42
(1) Interest receivable
1) Classification of interest receivable
Unit: yuan
Item Closing Balance Beginning balance
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2) Important overdue interest
Unit: yuan
Whether there is
Borrower Closing Balance Overdue time Overdue reason impairment and its
judgment basis
Other description:
3) Provision for bad debt
□ Applicable Not applicable
(2) Dividends receivable
1) Classification of dividends receivable
Unit: yuan
Project (or invested unit) Closing Balance Beginning balance
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) Provision for bad debt
□ Applicable Not applicable
Other description:
(3) Other receivables
1) Other receivables classified by nature
Unit: yuan
Nature of payment Ending book balance Beginning book balance
Compensation for investment and
233,655,320.00 238,655,320.00
construction project of Heyuan Winner
Export drawback 7,187,293.68
Margin and deposit 6,382,203.51 5,370,048.01
Employee pretty cash 341,256.17 333,170.12
Other 2,280,542.69 2,795,640.07
Total 242,659,322.37 254,341,471.88
2) Provision for bad debt
Unit: yuan
Stage 1 Stage 2 Stage 3
Expected credit losses Expected credit losses
Provision for bad debt Expected credit losses over the entire duration over the entire duration Total
over the next 12 months (no credit impairment (credit impairment has
occurred) occurred)
Balance on January 1,
36,241,815.46 36,241,815.46
2022
Balance on January 1,
2022 in the current
period
Reversal in current
449,446.31 449,446.31
period
Balance on June 30,
35,792,369.15 35,792,369.15
2022
Changes in book balance with significant changes in the current period of provision for loss
□ Applicable Not applicable
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Disclosure by aging
Unit: yuan
Aging Closing Balance
Within 1 year (including 1 year) 4,118,451.36
1~2 years 4,855,251.01
2~3 years 233,655,320.00
More than 3 years 30,300.00
3~4 years 30,300.00
Total 242,659,322.37
3) Provision, recovery or reversal of bad debt reserves in the current period
Provision for bad debts in current period:
Unit: yuan
Amount of change in current period
Beginning
Class Recovered or Closing Balance
balance Accrual Write-off Other
reversed
Provision for bad
debts of other 36,241,815.46 449,446.31 35,792,369.15
receivables
Total 36,241,815.46 449,446.31 35,792,369.15
Where the amount of bad debt provision reversed or recovered is important:
Unit: yuan
Unit name Amount reversed or recovered Recovery way
Not applicable.
4) Other receivable actually written off at the current period
Unit: yuan
Item Amount written off
Write-off of important other receivables:
Unit: yuan
Write-off Whether the
Nature of other Reasons for write-
Unit name Amount written off procedures payments arise from
receivables off
performed related transactions
Description of write-off of other receivables:
Not applicable.
5) Other receivables with Top 5 ending balances by debtor
Unit: yuan
Proportion in total
Ending balance of
Unit name Nature of payment Closing Balance Aging other ending
bad debt provision
balance receivable
Receivables related
First 233,655,320.00 2-3 years 96.29% 35,048,298.00
to Heyuan project
Second Deposit 2,544,135.21 1-2 years 1.05% 127,206.76
Third Deposit 2,311,115.80 1-2 years 0.95% 115,555.79
Fourth Deposit 1,000,000.00 Within 1 year 0.41% 50,000.00
Fifth Deposit 399,599.00 Within 1 year 0.16% 19,979.95
Total 239,910,170.01 98.86% 35,361,040.50
6) Accounts receivable involving government subsidies
Unit: yuan
Unit name Name of government Closing Balance Ending aging Estimated collection
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subsidy project time, amount and basis
Not applicable.
7) Other receivables derecognized due to transfer of financial assets
Not applicable.
8) Amount of assets and liabilities formed by transferring other receivables and continuing involvement
Other description:
3. Long-term equity investments
Unit: yuan
Closing Balance Beginning balance
Item Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
Investment in
2,086,177,678.63 4,086,994.48 2,082,090,684.15 908,737,678.63 4,086,994.48 904,650,684.15
subsidiaries
Investment in
associated
19,358,011.13 19,358,011.13 16,949,801.24 16,949,801.24
enterprises and
joint enterprises
Total 2,105,535,689.76 4,086,994.48 2,101,448,695.28 925,687,479.87 4,086,994.48 921,600,485.39
(1) Investment in subsidiaries
Unit: yuan
Increase or decrease in current period Balance of
Beginning Ending impairment
Invested unit balance (book Further Capital Provision for balance (book provision at
value) Other value) the end of
investment reduction impairment
period
Winner
267,491,627.7 267,491,627.7
Medical
9 9
(Huanggang)
Winner
Medical 27,242,761.31 27,242,761.31
(Jingmen)
Shenzhen 130,000,000.0 130,000,000.0
Purcotton 0 0
Winner
Medical 33,629,806.08 33,629,806.08
(Chongyang)
Winner
Medical 36,436,595.28 36,436,595.28
(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 0.00 0.00 4,086,994.48
Malaysia
Winner
100,000,000.0 100,000,000.0
Medical
0 0
(Heyuan)
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Full Text of 2022 Semi-annual Report of Winner Medical Co., Ltd.
Winner
100,000,000.0 100,000,000.0
Medical
0 0
(Wuhan)
150,000,000.0 150,000,000.0
PureH2B
0 0
Mifu Shanghai 100,000.00 100,000.00 0.00
Longterm 727,540,000.0 727,540,000.0
Medical 0 0
450,000,000.0 450,000,000.0
Guilin Latex
0 0
904,650,684.1 1,177,540,000. 2,082,090,684.
Total 100,000.00 4,086,994.48
5 00 15
(2) Investment in associated enterprises and joint enterprises
Unit: yuan
Increase or decrease in current period
Balance
Investme of
Beginnin nt gains Adjustm Declared Ending impairm
Invested g balance Further and ent of payment Provisio balance ent
Changes
entity (book investme Capital losses other
in other
of cash n for
Other (book provision
value) reduction recogniz compreh dividend impairm value) at the
nt equity
ed by the ensive s or ent end of
equity income profits period
method
I. Cooperative enterprise
II. Joint venture
Chengdu 16,949,8 2,408,20 19,358,0
Winner 01.24 9.89 11.13
16,949,8 2,408,20 19,358,0
Subtotal
01.24 9.89 11.13
16,949,8 2,408,20 19,358,0
Total
01.24 9.89 11.13
(3) Other description
NA
4. Revenue and cost
Unit: yuan
Amount incurred in current period Amount incurred in previous period
Item
Income Cost Income Cost
Main business 3,058,391,903.35 1,930,682,989.44 2,129,805,774.91 1,233,799,517.75
Other businesses 40,133,344.65 3,940,215.49 22,965,185.06 3,550,383.03
Total 3,098,525,248.00 1,934,623,204.93 2,152,770,959.97 1,237,349,900.78
Income related information:
Unit: yuan
Contract classification Segment 1 Segment 2 Total
Type of goods
Including:
Classified by operating
area
Including:
Type of markets or
clients
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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:
NA
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 RMB0.00, of which RMB0.00 is expected to be recognized as revenue in year 0, RMB0.00 is expected to be
recognized as revenue in year 0, and RMB0.00 is expected to be recognized as revenue in year 0.
Other description:
5. Investment income
Unit: yuan
Item Amount incurred in current period Amount incurred in previous period
Long-term equity investment income
700,000,000.00
checked by cost method
Long-term equity investment gains
2,408,209.89 1,655,597.53
measured by employing the equity method
Investment income from disposal of long-
（60,131.13）
term equity investment
Investment income from purchasing
15,644,141.24 43,948,199.51
financial products
Total 717,992,220.00 45,603,797.04
6. Other
NA
XVIII. Further information
1. Current non-recurring gain and loss statement
Applicable □ Not applicable
Unit: yuan
Item Amount Description
Profit and loss on disposal of non-current
（2,401,700.24）
assets
Government subsidies included into
current profits and losses, except the 28,755,938.72
government subsidies which are closely
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related to the normal business operations
of the Company and conform to the
national policies and regulations, and
continuously granted in accordance with a
certain standard quota or amount.
In addition to the effective hedging
business related to the company's normal
business operations, the profit and loss
from fair value changes arising from
holding trading financial assets, trading 64,226,078.84
financial liabilities, as well as the
investment income from disposal of
trading financial assets, trading financial
liabilities, and salable financial assets.
Income and expenditure other than those
（4,634,764.37）
mentioned above
Less: Amount affected by income tax 13,612,940.25
Amount of minority shareholders'
67,876.79
equity affected
Total 72,264,735.91 --
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 shareholders of the 8.17% 2.1193 2.1193
Company
Net profit attributable to
common shareholders of the
Company after deduction of 7.51% 1.9478 1.9478
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
Not applicable.
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4. Other
NA
In case of a divergence of the interpretation the Chinese version of the annual report shall prevail.
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