2022 Annual Report
Winner Medical Co., Ltd.
Annual Report
To Shareholders
Dear shareholders and partners:
It's time to release our annual report again.
I am glad to share with you face to face what we have achieved over the past year and our strategic plan for the next three
years. On behalf of our Board of Directors and the management team, I would like to take this opportunity to express our
sincere gratitude to our investors, customers, suppliers, employees, and partners for their long-term trust and support for
Winner Medical.
The past year has been a year of changes. The uncertainty of the environment leads to instability of work, which futher causes
changes to the plan. One of the primary problems that the management team faces is how to maximize business growth
despite of uncontrollable external disturbance. What we do is to stay calm, boost morale and respond quickly. Under the
leadership of the top management and adhering to the enterprise spirit of striving to work under demanding conditions, the
medical business team responds quickly to the urgent demands of emergency events to help address social problems and
contribute to social stability while achieving sales growth. As the operation of offline business is constrained by the external
environment, the management team of Consumer Goods guides the offline consumption to online portal with O2O mode.
Thanks to these measures, our online business grows rapidly through the channel of mini program of online shop. Since the
customers are unable to personally experience or feel the products in the mode of online shopping, we take multiple measures
to strengthen their online experience. In this way, we can meet the personalized needs of consumers, complement offline
experience with online measures, and prevent performance decline on a year-on-year basis. With the unremitting efforts of
Medical team and Consumer Goods team, the Group has achieved a revenue of 11.351 billion yuan, an increase of 41% year-
on-year, of which the medical consumables business accounts for 7.203 billion yuan, an increase of 84% year-on-year, and
the healthy consumer goods accounts for 4.055 billion yuan, basically flat year-on-year. The net profit attributable to
shareholders of the listed company is 1.651 billion yuan, an increase of 33% year-on-year.
In 2022, although our supply chain undertook unprecedented pressure, Winner Medical and Purcotton ensured the terminal
supply to the maximum regardless of cost, and donated a large amount of medical supplies to frontline health care
professionals and some communities in Shenzhen, Shanghai, Henan, Beijing and Hong Kong. This is a reflection of our core
business principle of “social value over corporate value”.
In 2022, despite heavy workload and inconvenient traffic, the management team went to Deqing, Lixian, and Guilin from
Shenzhen multiple times by driving, and successfully completed the acquisition of Longterm Medical, Hunan Pingan, Guilin
Latex and other excellent enterprises. These acquisitions have expanded the coverage of our medical products from three
dimensions, increased our business channels and customers both at home and abroad, and further improved the strategic
layout of one-stop medical consumables solutions, laying a solid foundation for high-speed growth in the future.
I often say in the company, it is an extraordinary achievement for a person to take ordinary things to the extreme.
In the past three years, our volume of production and sale doubled. However, we still have realized zero quality incident, for
we have accumulated extensive quality management experience and significantly improved our ability during the past 30
years. It is an extraordinary achievement to satisfy both the health care professionals in respect of clinical application and the
consumers in respect of daily use.
In the past three years, the pressure on our production capacity has increased several times with the dramatical increase of
demand for medical supplies in the market; meanwhile, as the customers’ demand for speed and accuracy of delivery has
become more stringent, the pressure on our logistics has increased several times. While addressing these “emergency
demands”, our employees have improved their ability to adapt to changes, and our IT and digital operation capacity also have
been enhanced. As a result, our customer satisfaction scores are much higher than the industry average, which is also an
extraordinary achievement.
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2022 Annual Report
In the past three years, the emerging brand of Purcotton has seen an unprecedented public health incident. Since then, we
boldly explore a variety of new operation models, and seek in-depth understanding of consumer and market changes. With
the inherent advantages of medical background, all-cotton concept and quality gene, Purcotton firmly adheres to the concept
of comfort, health and environmental protection. Through unswerving innovation in basic materials, and product
development from the perspective of consumers, we have launched a number of new products that are highly popular among
consumers. We developed the first-of-its-kind ultra-soft and ultra-thick beauty pure cotton tissue of high cleaning power, the
first disposable period panties and sanitary pads with organic cotton surface, the new super crinkle cotton gauze towels of
zero softener additive, bath towels, air-conditioning quilts, 95% cotton socks and so on. This is also an extraordinary
achievement to take the application of cotton fiber to the extreme.
Looking back, both I and the management team have identified the areas to be improved. Both in the medical field and the
field of consumer goods, the benchmark companies of the industry feature more outstanding operation, and our peers have
better performance in some segments, which mounts a lot of pressure on me. As one of the leading companies in the field of
medical consumables, we must establish cooperation with more hospitals, especially with the secondary and tertiary hospitals.
To this end, we need to give full play to our advantages of comprehensive categories, elaborate services, and user
engagement. In the international market, we will rapidly improve our ODM and OEM operation and sales capacities to lay a
solid foundation for going global. Purcotton needs to learn from the international brands in respect of product operations,
improve the response speed of the supply chain, increase the seasonal sell-out rate, and reduce inventory. In respect to brand
operation and marketing, we need to stay closer to consumers, speak the language that consumers (especially young
consumers) understand, develop products that our loyal users and the younger generation love, design products that are
popular but not vulgar, beautiful but not fancy, comfortable but not clumsy, to meet the pursuit of consumers for a better life.
In the next three years, China's economy faces both opportunities and challenges. In the future, we will directly respond to all
kinds of environmental changes with an open mind, embrace new challenges and new opportunities, develop new
technologies, launch new products, and adapt to new consumption. We will apply the capabilities developed in the past three
years into our daily operation, and “turn the impossible into possible”.
In the next three years, our strategy is “product leadership and operation excellence”, and we will advance towards high-
quality development. Product leadership means that we will continue to be consumer-centric and market-oriented, creating
best-selling products that are popular among consumers and will be circulated in the social media. Operation excellence
means applying new technologies (such as AI technology) to achieve smart manufacturing, digital management of the entire
chain of R&D, design, production, warehousing, marketing and delivery, and maximizing management, efficiency and
effectiveness.
In the next three years, in order to ensure the smooth implementation of the “product leadership and operation excellence”
strategy, we have established the “four high” talent strategy - “high quality, high efficiency, high performance and high
reward” to increase talent density and accelerate organizational evolution so as to achieve our strategic goals.
Panning for gold from grains of sand is strenuous work. We will always keep hard-working, stick to industry and innovation,
focus on our main business and operate pragmatically, promoting high-speed and sustainable development of our company.
Finally, once again, I would like to thank all shareholders and investors, customers and consumers, partners and all social
sectors for their trust, support and encouragement. Thank all employees for their efforts and dedication! I would also like to
express my gratitude for all people pursuing the cause of health, environmental protection and sustainability!
Thank you!
Li Jianquan
Chairman and general manager of Winner
Medical
April 23, 2023
3
Brand Ambassador of Purcotton
Guo Jingjing
01
Important Notes,
Contents, and Definitions
Improve life quality
and reduce environment pollution with cotton products
We protect the environment with cotton products
4.22 World Earth Day
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2022 Annual Report
Important Notes
The board of directors, the board of supervisors and directors, supervisors and senior management of the Company hereby
guarantee that no false or misleading statement or major omission was made to the materials in this report and that they will
assume all the responsibility, individually and jointly, for the authenticity, accuracy and completeness of the contents of the
annual report.
Li Jianquan, the head of the Company, Fang Xiuyuan, the head of accounting work, and Wu Kezhen, the head of accounting
body (accountant in charge), guarantee the authenticity, accuracy, and completeness of the financial report in the current year
report.
All directors of the Company personally attended the board meeting for reviewing this report.
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 preplanned profit distribution deliberated and approved by the board of directors is as follows: taking 419,737,649 as the
radix, the Company will send cash dividends of 19.00 yuan (tax included) and 0 bonus share (tax included) to all
shareholders for every 10 shares, converting capital reserve into 4 share capital for every 10 shares.
5
Contents
Section I Important Notes, Contents, and Definitions ............................................................................. 4
Section II Company Profile and Major Financial Indicators ................................................................. 10
Section III Management Discussion and Analysis .................................................................................16
Section IV Corporate Governance ......................................................................................................... 88
Section V Environment and Social Responsibility .............................................................................. 110
Section VI Important Matters ...............................................................................................................122
Section VII Changes in Shares and Shareholders ................................................................................ 134
Section VIII Preferred Shares .............................................................................................................. 141
Section IX Information Related to Bonds ............................................................................................ 142
Section X Financial Report .................................................................................................................. 143
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2022 Annual Report
Document Catalog
(I) Financial statements containing the signatures and seals of the person in charge of the Company, the accounting head,
and the person in charge of the accounting body (accounting manager).
(II) The original audit reports with the seal of the accounting firm and the signatures and seals of the certified public
accountants.
(III) The originals of all Company documents and announcements publicly disclosed during the reporting period.
7
Definitions
Term Refers to Definition
Company, Winner
Refers to Winner Medical Co., Ltd.
Medical
Winner Group Refers to Winner Group Limited, a controlling shareholder of the Company
Beijing Sequoia Xinyuan Equity Investment Center (L.P.), a pre-IPO shareholder of the
Sequoia Xinyuan Refers to
Company
Xiamen Leyuan Investment Partnership (Limited Partnership), a pre-IPO shareholder of the
Xiamen Leyuan Refers to
Company
Xiamen Yutong Investment Partnership (limited Partnership), a pre-IPO shareholder of the
Xiamen Yutong Refers to
Company
Xiamen Huikang Investment Partnership (Limited Partnership), a pre-IPO shareholder of
Xiamen Huikang Refers to
the Company
Xiamen Zepeng Investment Partnership (limited partnership), a pre-IPO shareholder of the
Xiamen Zepeng Refers to
Company
Winner Medical
Refers to Winner Medical (Chongyang) Co., Ltd., a wholly-owned subsidiary of the Company
(Chongyang)
Winner Medical
Refers to Winner Medical (Jiayu) Co., Ltd., a wholly-owned subsidiary of the Company
(Jiayu)
Winner Medical
Refers to Winner Medical (Jingmen) Co., Ltd., a wholly-owned subsidiary of the Company
(Jingmen)
Winner Medical
Refers to Yichang Winner Medical Textile Co., Ltd., a wholly-owned subsidiary of the Company
(Yichang)
Winner Medical
Refers to Winner Medical (Huanggang) Co., Ltd., a wholly-owned subsidiary of the Company
(Huanggang)
Winner Medical
Refers to Winner Medical (Tianmen) Co., Ltd., a wholly-owned subsidiary of the Company
(Tianmen)
Shenzhen Purcotton Refers to Shenzhen Purcotton Technology Co., Ltd., a wholly-owned subsidiary of the Company
Guangzhou Guangzhou Purcotton Medical Technology Co., Ltd., a wholly-owned subsidiary of
Refers to
Purcotton Shenzhen Purcotton
Beijing Purcotton Refers to Beijing Purcotton Technology Co., Ltd., a wholly-owned subsidiary of Shenzhen Purcotton
Shanghai Purcotton Technology Co., Ltd., a wholly-owned subsidiary of Shenzhen
Shanghai Purcotton Refers to
Purcotton
Shenzhen Qianhai Purcotton E-Commerce Co., Ltd., a wholly-owned subsidiary of
Qianhai Purcotton Refers to
Shenzhen Purcotton
Shenzhen Purunderwear Sci-Tech Innovation Co., Ltd., a wholly-owned subsidiary of
Purunderwear Refers to
Shenzhen Purcotton
Winner (Huanggang) Winner (Huanggang) Cotton Processing & Trading Co., Ltd., a wholly-owned subsidiary of
Refers to
Cotton Winner Medical (Huanggang)
Winner Medical
Refers to Winner Medical Malaysia Sdn. Bhd., a subsidiary controlled by the Company
Malaysia
Winner Medical
Refers to Winner Medical (Hong Kong) Ltd., a subsidiary controlled by the Company
(Hong Kong)
Winner Medical
Refers to Winner Medical (Heyuan) Co., Ltd., a wholly-owned subsidiary of the Company
(Heyuan)
Winner Medical
Refers to Winner Medical (Wuhan) Co., Ltd., a wholly-owned subsidiary of the Company
(Wuhan)
Pure HB (Shanghai) Refers to Pure HB (Shanghai) Co., Ltd., a wholly-owned subsidiary of the Company
Chengdu Wenjian Chengdu Wenjian Likang Medical Products Co., Ltd., a wholly-owned subsidiary of the
Refers to
Likang Company
Galaxy Real Estate Refers to Shenzhen Galaxy Real Estate Development Co., Ltd.
Reporting period Refers to 2022: January 1, 2022 to December 31, 2022
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2022 Annual Report
Zhejiang Longterm Medical Technology Co., Ltd., of which the Company intends to
Longterm Medical Refers to
acquire 55% equity
Winner Medical Winner Medical (Hunan) Co., Ltd., of which the Company holds 68.70% equity after
Refers to
(Hunan) acquisition and capital increment
Winner Guilin Refers to Winner Guilin Latex Co., Ltd., of which the Company has acquired 100.00% equity
Shenzhen Junjian Medical Device Co., Ltd., of which the Company has acquired 100%
Junjian Medical Refers to
equity
9
Brand Ambassador of Purcotton
Sun Qian
02
Company Profile and
Major Financial
Indicators
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2022 Annual Report
I. Company Information
Stock abbreviation Winner Medical Stock code 300888
Company name in Chinese Winner Medical Co., Ltd.
Chinese abbreviation of the
Winner Medical
Company
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
F42, Building 2, Huilong Business Center, Shenzhen North Railway Station Area,
Registered address: Minzhi Subdistrict, Longhua District, Shenzhen City; Winner Industrial Park, No.660
Bulong Road, Longhua District, Shenzhen City
Postal code of the Company’s
518131
registered address
On June 1, 2021, the Company completed the registration of industrial and commercial
change of registered address from “Winner Industrial Park, No. 660 Bulong Road,
Change history of the company's
Longhua New District, Shenzhen City” to “F42, Building 2, Huilong Business Center,
registered address
Shenzhen North Railway Station Area, Minzhi Subdistrict, Longhua District, Shenzhen
City; Winner Industrial Park, No.660 Bulong Road, Longhua District, Shenzhen City”
F42, Building 2, Huilong Business Center, Shenzhen North Railway Station Area,
Office address of the Company
Minzhi Subdistrict, Longhua District, Shenzhen City
Postal code of the Company’s
518131
office address
Website http://www.winnermedical.com
Email investor@winnermedical.com
II. Contacts and contact information
Secretary to the Board of Directors Securities affairs representative
Name Chen Huixuan Liu Yanxiang, Zhang Heng
F42, Building 2, Huilong Business Center, F42, Building 2, Huilong Business Center,
Contact address Shenzhen North Railway Station Area, Minzhi Shenzhen North Railway Station Area, Minzhi
Subdistrict, Longhua District, Shenzhen City Subdistrict, Longhua District, Shenzhen City
Tel 0755-28066858 0755-28066858
Fax 0755-28134688 0755-28134688
Email investor@winnermedical.com investor@winnermedical.com
11
III. Information disclosure and keeping place
Website of the stock exchange where the
http://www.szse.cn/
company discloses its annual report
STCN, China Securities Journal, Shanghai Securities News, Securities
Name and websites of the media on which the
Daily
Company discloses its annual report
http://www.cninfo.com.cn/new/index
Place of preparation of the Company’s annual
Securities Department of the Company
report
IV. Other Relevant Information
Accounting firm engaged by the Company
BDO CHINA SHU LUN PAN CERTIFIED PUBLIC ACCOUNTANTS
Name of the accounting firm
LLP
Office address of the accounting firm 4th Floor, No.61 Nanjing East Road, Huangpu District, Shanghai
Name of signatory accountant Cheng Jin, Wu Lihong
The sponsor institution engaged by the Company to perform the continuous supervision responsibility during the reporting
period
√ApplicableNot applicable
Name of sponsor Name of sponsor
Office address of sponsor institution Continuous supervision period
institution representative
China International 27th and 28th Floors, China World
Shen Lulu, Wang From the date of initial public offering
Capital Corporation Office 2, No. 1 Jianguomenwai
Shenchen to December 31, 2023
Limited Avenue, Chaoyang District, Beijing
The financial advisor engaged by the Company to perform the continuous supervision responsibility during the reporting
period
Applicable √ Not applicable
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2022 Annual Report
V. Major Accounting Data and Financial Indicators
Whether the Company needs to retroactively adjust or restate the accounting data of the previous years
Yes √No
Increase/decrease
this year
2022 2021 2020
compared to the
previous year
Operating income (yuan) 11,351,331,545.08 8,037,420,812.91 41.23% 12,533,945,946.63
Net profits attributable to shareholders
1,650,582,427.43 1,239,320,067.26 33.18% 3,810,412,504.40
of listed companies (yuan)
Net profits attributable to shareholders
of the listed company after deduction
1,560,914,973.08 1,029,005,582.98 51.69% 3,750,822,797.63
of non-recurring profits and losses
(yuan)
Net cash flow from operating activities
2,983,472,230.27 871,689,901.93 242.26% 4,767,496,287.39
(yuan)
Basic EPS (yuan/share) 3.90 2.91 34.02% 9.8
Diluted EPS (yuan/share) 3.90 2.91 34.02% 9.79
Weighted average return on net assets 14.89% 11.76% 3.13% 64.68%
Increase/decrease
at the end of this
End of 2022 End of 2021 year compared to End of 2020
the end of the
previous year
Total assets (yuan) 18,237,749,401.56 13,266,610,200.37 37.47% 13,002,251,764.44
Net assets attributable to shareholders
11,704,606,570.71 10,674,912,166.80 9.65% 10,453,934,045.43
of listed companies (yuan)
The Company’s net profits before or after the deduction of non-recurring profit and loss for the last three fiscal years,
whichever is lower, is negative, and the auditor’s report for the latest year shows that there are uncertainties about the
Company’s sustainable operation ability.
Yes √No
The net profits before or after the deduction of non-recurring profit and loss, whichever is lower, is negative
Yes √No
Total assets (100 million yuan) Net Asset (100 million yuan)
13
VI. Key Quarterly Financial Indicators
Unit: yuan
Q1 Q2 Q3 Q4
Operating income 2,322,337,445.27 2,835,607,050.45 2,484,372,974.44 3,709,014,074.92
Net profits attributable to
357,101,020.81 535,722,482.33 357,469,296.76 400,289,627.53
shareholders of listed companies
Net profits attributable to
shareholders of the listed
328,127,955.96 492,430,811.27 328,157,282.62 412,198,923.23
company after deduction of non-
recurring profits and losses
Whether there is significant difference between the above financial indicators or the total sum of them and the financial
indicators related to the quarterly report and semiannual report disclosed by the Company
Yes √No
VII. Differences in Accounting Data under Domestic and Foreign Accounting
Standards
1. The difference between net profits and net assets in financial statements disclosed according to the International
Accounting Standards (IAS) and Chinese Accounting Standards simultaneously
Applicable √ Not applicable
No difference between net profits and net assets in financial statements disclosed according to the International Accounting
Standards (IAS) and Chinese Accounting Standards during the reporting period.
2. The difference between net profits and net assets in financial statements disclosed according to the Overseas
Accounting Standards (IAS) 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.
Operating income (100 million yuan) Net profits (100 million yuan)
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2022 Annual Report
Non-recurring Profit and Loss Items and Amount
√Applicable Not applicable
Unit: yuan
Item Amount in 2022 Amount in 2021 Amount in 2020
Descrip
tion
Profits and losses on the disposal of non-current assets
(including the write-off part of the provision for asset (39,993,220.64) (9,080,387.29) (25,914,736.75)
impairment)
Government subsidies included into current profits and
losses, except the government subsidies which are closely
related to the normal business operations of the Company
84,859,103.35 105,132,971.30 74,592,796.36
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 tradable
financial assets and tradable financial liabilities, as well 78,921,808.85 158,186,445.51 28,197,958.34
as the investment income from disposal of tradable
financial assets, tradable financial liabilities, and
available-for-sale financial assets.
Income and expenditure other than those mentioned
(13,810,132.25) (2,530,827.65) (4,844,628.50)
above
Less: Amount affected by income tax 17,067,455.98 41,394,596.42 12,117,518.33
Amount of minority shareholders' equity affected (after
3,242,648.98 (878.83) 324,164.35
tax)
Total 89,667,454.35 210,314,484.28 59,589,706.77 --
Other profit and loss items that are consistent with the definition of non-recurring profit and loss:
Applicable √ Not applicable
There was no other profit and loss items that are consistent with the definition of non-recurring profit and loss.
Explanation on defining the non-recurring profit and loss items enumerated in the Interpretative Announcement No. 1 on
Information Disclosure of Public Securities Issuing Companies - Non-recurring Profits and Losses as recurring profit and loss
items
Applicable √ Not applicable
No definition of non-recurrent profit and loss items enumerated in the “Interpretative Announcement No. 1 on Information
Disclosure of Public Securities Issuing Companies - Non-recurrent Profits and Losses” as recurring profit and loss items
during the reporting period.
15
03
Management
Discussion and Analysis
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2022 Annual Report
I. The industry in which we operate
1. Industry definition
According to the Classification Rules of Medical Devices (2015) (Order No. 15 of the China Food and Drug Administration)
and the Classification Catalogue of Medical Devices (Notice No. 104 of the China Food and Drug Administration in 2017),
the medical dressings produced and sold by the Company belong to the nursing and protective devices in medical devices.
According to the Industry Classification of National Economy (GB/T4754-2017) and the Industry Classification Guidelines
for Listed Companies (revised in 2012), the industry of the Company is special equipment manufacturing industry (C35) in
manufacturing industry (C).
The products of the Company's healthy consumer goods include pure cotton tissues, sanitary pads with pure cotton surface,
cotton wet tissues and other non-woven consumer goods, baby supplies, baby clothing, adult clothing and other textile
consumer goods. According to the Industry Classification of National Economy (GB/T4754-2017) and the Industry
Classification Guidelines for Listed Companies (revised in 2012), the consumer goods operated by the Company mainly
belong to the textile industry (C17) and the textile and apparel industry (C1 8) in the manufacturing industry (C).
2. Development of the industry
With the strengthening of the national policy support for the medical device industry, the substitution of imported medical
device with domestic products has gradually accelerated in recent years. Meanwhile, global aging and chronic disease are
becoming increasingly prominent. According to the United Nations World Population Prospects 2022, the global fertility
rates continue to decline. In the 1950s, women in the world had around 5 children each. In 2021, this has dropped to 2.3.
According to the National Bureau of Statistics, an estimated 280 million people in China will be aged 60 and over,
representing 19.8% of the population in 2022. Adapting the social medical environment to the demand of aging population is
becoming a major trend. This has provided new space for the development of the medical device industry and will drive the
innovation of the medical device industry.
(1) Development of medical consumables industry at home and abroad
Medical consumables refer to the medical and health materials used in the process of clinical diagnosis and nursing, testing
and repair. With a wide variety of models and wide application, they are important materials for medical institutions to carry
out daily medical and nursing work. From the perspective of value, medical consumables can be divided into high-value
medical consumables and low-value medical consumables.
Size of medical consumables market in China from 2015 to 2025 (100 million yuan)
Data source: China Medical Consumables Market Conditions and Investment Prospect Survey Report 2021-2026, China
Medical Device Blue Book, Chinese Medicine, IBM Report
17
Size of low-value medical consumables market in China from 2015 to 2025 (100 million yuan)
Data source: China Medical Device Blue Book , Chinese Medicine, Magna Information Centre, IBM Report
Compared with high-value medical consumables, low-value medical consumables are mainly medical hygiene materials and
dressings, injection and punching, medical polymer materials and products, medical disinfection materials, anesthetic
consumables, consumables in the operating room and medical technology consumables, with low entry threshold and fierce
market competition. Due to the wide application and benefit from the improvement of people’s living standards and the
continuous growth of medical demand in China, the market space of low-value medical consumables is huge, and will
continue to maintain high-speed growth in the future. According to the research and analysis of IBM, it is estimated that the
market scale of low-value medical consumables in China will reach 221.3 billion yuan by 2025 (Terminal market price). In
addition to medical technology consumables, the existing business of Winner Medical has covered six of the seven major
categories of low-value medical consumables. The Company's medical business is positioned as a leader in the medical
consumables field, providing one-stop medical consumables solutions. Low-value medical consumables have the
characteristics of rigid demand and high usage frequency. Relying on good brand reputation, channel coverage and strong
manufacturing capability, the Company will continue to increase its share in the international and domestic markets.
1 Market development of operating room infection control products
Due to the growth of the number of surgical operations and the strengthening of infection control measures, the market of
operating room infection control products is growing continuously. According to the statistics of CMI, the domestic market
size of operating room infection control products is expected to reach USD 3.688 billion in 2026, with an average annual
compound growth rate of 4.9%.
Operating room infection control products can be divided into reusable products and disposable products. Compared with the
reusable products, the disposable operating room infection control products can significantly reduce the risk of cross infection.
According to Coherent, disposable operating room infection control products can reduce the risk of cross infection during
surgery by 60%. The Guide to Operating Room Nursing Practice compiled by the Operating Room Professional Committee
of Chinese Nursing Association also recommends the use of disposable aseptic products in the operating room to reduce the
risk of cross infection during surgery. At the same time, disposable operating room infection control products also have
advantages in convenience compared with reusable products, which makes the demand for disposable products more active.
Compared with individual products, customized surgical package products may be customized according to the type of
surgery and doctor's needs. Therefore, it may improve surgical efficiency and safety, avoid waste of surgical devices and
materials and reduce hospital costs and environmental burdens. For these reasons, the market of customized surgical package
is growing rapidly. According to the statistics of CMI, the market size of global customized surgical packs is expected to
grow to USD 21.347 billion in 2026, with an average annual compound growth rate of 10.2%. In China, the market size of
customized surgical packs is expected to rise to USD 1.504 billion, with an average compound annual growth rate of 12.2%,
which is quite promising.
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2022 Annual Report
2 Market development of advanced wound dressing products
Compared to the traditional wound dressings, advanced wound dressings are able to control exudate and have better
breathability. In addition, it does not adhere to the wound, does not destroy new tissue, and may avoid bacterial infection. The
typical products include hydrogel dressings, hydrocolloid dressings, transparent film dressings, foam dressings, alginate
dressings, etc. Judging from the global trend, the demand for high value-added and multifunctional medical dressings made
of new materials is increasing, and the advanced medical dressing industry will usher in good development opportunities.
According to the research compiled by QYResearch, the global advanced wound dressings market size reached USD 5.846
billion in 2020, and is expected to reach USD 7.230 billion in 2027.
The market size in China is growing rapidly and the major factors contributing to the growth of the advanced wound
dressings market include increasing aging population, increasing awareness of advanced wound dressings, increasing number
of road accidents and burn cases, and high incidence of diabetic wounds and chronic infections.
Most of the sales of the advanced wound dressing enterprises in Chinaadvanced are still from overseas markets. After years
of development, the product quality has reached a higher level and gained recognition in the international market. With the
increase of consumption by domestic residents, the rising awareness of medical care, the popularization of domestic home
care system, and the gradual convergence with international advanced medical care knowledge, the advanced wound
dressings market in China will embrace a promising future.
In recent years, the relevant government departments and agencies have introduced supporting policies, indicating a general
trend of replacement of international brands by domestic brands. There will also be a greater space in the advanced medical
dressings field for domestic products, and the market concentration in China will futher increase.
3 Development status of injection and puncture devices market
The injection and puncture device industry is divided into two categories: infusion and puncture. The main products in the
infusion category are infusion sets, syringes and other infusion devices. Most of them are disposable medical supplies of high
demand. As one of the most conventional medical devices, syringes are mainly used for injecting medicine into human
muscles, subcutaneous tissue and vein. Puncture products mainly refer to puncture needle, and are rich in categories such as
nursing and specialist categories.
According to QYResearch, at present, China's injection and puncture devices industry mainly presents three major
development trends. From the perspective of market concentration, with the rise of volume procurement for medical injection
and puncture devices at the provincial and municipal level, large enterprises are expected to occupy more market by virtue of
scale advantage, and the market of small and medium-sized enterprises will be further compressed. Therefore, the industry
concentration will continue to increase. From the perspective of application scenarios, it is extending from the dominant
infusion scenarios to more scenarios. The demand for puncture needle products arising from the clinical needs mainly
includes advanced multi-site advancedbiopsy needles, and needles for assisted reproduction such as egg retrieval. From the
technical point of view, advanced, intelligence and safety will become the technical development trend of infusion and
puncture devices.
QYResearch estimates that the sales of injection and puncture devices in China will reach 36.75 billion yuan in 2026.
4 Development status of medical latex gloves market
Medical gloves are mainly divided into latex gloves, nitrile gloves, polyethylene (PE) gloves and polyvinyl chloride (PVC)
gloves according to the material; according to the application scenarios, they are divided into medical surgical gloves and
medical examination gloves. Latex gloves feature high elasticity and skin-friendliness, and occupy an important position in
medical gloves. According to QYResearch data, the global market size of disposable medical gloves reached $23.014 billion
in 2021, with a latex gloves market size of $6.99 billion, accounting for 30%. Latex gloves are expected to grow at a CAGR
of 5.84% during 2021-2027 and will reach a market size of $9,829 million by 2027.
19
(2) Development of consumer goods segmentation industry
In recent years, as people grow more confident on the national culture, the domestic goods have injected new vitality into the
national economy, becoming an important driving force of consumption and domestic demand. At the same time, consumers
are increasingly concerned about the environmental performance and sustainability of products, and the rise of environmental
protection and low carbon concept is also driving the transformation and upgrading of the consumer goods industry. In
January 2022, the National Development and Reform Commission and other departments issued the Implementation Plan for
Promoting Green Consumption to comprehensively promote the green transformation of consumption in key areas. It is
mentioned in one of the main goals of the plan that by 2025, the concept of green consumption will be deeply rooted in
people's minds; by 2030, green consumption will become a conscious choice of the public and green low-carbon products
will become the mainstream of the market.
1 Development of cotton tissues
Because of its more environmental protection and less sensitization, pure cotton tissues can replace traditional paper products
and towels with increasing market penetration. According to the “China’s Cotton Tissues Industry Status and Development
Trend Research Report 2019-2025” published by the ChinaIRN Industry Research Institute, based on product attributes,
production efficiency, environmental protection and other advantages, the customers groups of infants, maternity, people
with sensitive skin and people with frequent beauty makeup and skin care needs are more willing to pay higher prices for
high-quality products. So the consumer awareness for cotton tissue product is rapidly increasing, promoting the rapid growth
of market demand. According to Euromonitor statistics, China’s cotton tissues market demand reached 48.76 billion pieces in
2022, and is in a high-speed growth phase.
The Company developed a new product category for cotton tissues and led the rapid growth of the cotton tissues segment. In
2021, as the first drafting unit, Purcotton participated in the development of national standards for cotton tissues. Thanks to
the increasingly strict environmental regulation, this segmentation will become more mature and standardized.
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2022 Annual Report
2 Development of disposable sanitary products industry
According to Euromonitor statistics, the market of absorptive care products in China increased from 151.1 billion yuan to
170.6 billion in 2017-2022, with an average annual compound growth rate of 2.5%.
Among them, female health care products increased from 82.3 billion yuan in 2017 to 99.1 billion yuan in 2022, with an
average annual compound growth rate of 3.8%. As Chinese women’s health care awareness and consumption ability continue
to rise, consumers are paying more attention to product quality, functionality, material safety and product experience, leading
to the increasing proportion of medium- and advanced sanitary napkin consumption.
The market scale of infant diapers decreased from 58.3 billion yuan in 2017 to 52.8 billion yuan in 2022, with an average
annual compound growth rate of -2.0%.
The market scale of adult incontinence products increased from 3.7 billion yuan in 2017 to 6.0 billion yuan in 2022, with an
average annual compound growth rate of 10.3%. Since the overall development of adult incontinence products in China is
lagging behind the feminine sanitary pads and infant diapers market, it is still in the introduction period. Considering multiple
factors such as growing life expectancy per capita, increasing number of elderly population, increasing disposable income per
capita and increasing hygiene and health awareness, China’s adult incontinence products market is at a stage of rapid growth
in sales and market penetration.
The market scale of wet tissues increased from 6.7 billion yuan in 2017 to 12.6 billion yuan in 2022, with an average annual
compound growth rate of 13.4%. At present, the market is dominated by baby wet tissues and general-purpose wet tissues.
Female hygiene wet tissues, makeup removal wet tissues, home cleaning wet tissues and other categories account for a
relatively small proportion, so there is a large market space to develop.
3 Development of textile industry and textile clothing and apparel industry
The sales of specialized retail goods of textiles, clothing and daily necessities increased from 70.302 billion yuan in 2007 to
773.864 billion yuan in 2021, with an average compound annual growth rate of 18.7%. Among them, the sales of textile,
clothing and daily necessities in chain retail enterprises have increased rapidly in recent years, reaching 168.973 billion yuan
in 2021.
The development of e-commerce industry also led to the transformation and upgrading of textile, clothing and daily
necessities industries. According to the statistics of China National Textile And Apparel Council, the total volume of e-
commerce transactions of textile and clothing in China in 2020 was 7.29 trillion yuan, accounting for 19.59% of the total
volume of national e-commerce transactions.
The market size of China's children's clothing industry fluctuated up from 2016 to 2021, with slight decline in 2020 and 2022
under the influence of public health events. With reference to the rapid recovery of the children's clothing market in 2021, it
is expected to recover rapidly in 2023. As of 2022, China's children's clothing market size is about 237.4 billion yuan. In the
future, under the influence of the continuous promotion of the three-child policy and the growing attitude of “exquisite child
raising”, the children's clothing industry still has a large development potential.
As people's demand for health and comfort continues to rise, the market of intimate apparel (in the broad sense of underwear,
meaning clothing worn close to the skin or under outerwear, including underwear, warm clothing, loungewear, socks, etc.) is
also evolving in the direction of high quality and comfort. According to the customer group, underwear can be divided into
three categories: men's underwear, women's underwear and children's underwear, of which women's underwear occupies a
dominant position, accounting for about half of the overall market share. According to
the “Chinese Lingerie Industry Development Blue Book” released by CIC, the market size of women's lingerie will reach
217.14 billion yuan and men's lingerie will reach 84.91 billion yuan by 2026, and the overall market size of men's and
women's lingerie will increase at a CAGR of 5.2% from 2020 to 2026.
21
The Company needs to comply with the disclosure requirements of the “Textile and Apparel Business” stipulated in the No. 3
Guideline of Shenzhen Stock Exchange for Self-regulatory of Listed Companies - Industry Information Disclosure.
II. Main Business of the Company during Reporting Period
The Company needs to comply with the disclosure requirements of the “Medical Device Business” in the No. 4 Guideline of
Shenzhen Stock Exchange for Self-regulatory of Listed Companies - Information Disclosure by Growth Enterprises.
Winner Medical is a health enterprise developing both medical and consumption products under its brands of “Winner” and
“Purcotton”. Specifically, the Company has 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.
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2022 Annual Report
Traditional wound Medical cotton, gauze, bandages, etc.
care and wound
Winner High-end wound Silicone dressings, alginate dressings,
dressing products superabsorbent dressings etc.
Medical
Consumables in the Surgical gloves, surgical packs, surgical
Medical Longterm operating room gowns, etc.
consumabl Medical Infection protection Masks, protective clothing, isolation
es gowns, etc.
Winner Health & personal Incontinence care, oral and nasal
Medical care products, hands-free disinfection gel,
etc.
Injection and puncture products, test
Winner
Other Products
kits, etc.
Wet and dry cotton Cotton tissues, wet tissues etc.
tissues
Sanitary pads Sanitary pads,disposable period panties
etc.
Healthy Other non-woven Facial mask, makeup cotton, cotton
consumer Purcotton products diapers etc.
Baby clothing and Baby's leisure wear, bath towels and
goods supplies quilts etc.
Adult clothing Adult's leisure wear, outing costume,
underwear etc.
Other woven products Bedding, bathroom accessories, etc.
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 health & personal care. The specific products include advanced wound dressing
products, traditional wound care and dressing products, consumable products in operating room, infection prevention
products and health & personal care products.
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The Company is one of the earliest medical consumables enterprises in China to establish a full industrial chain covering
cotton procurement, R&D, production, and direct export. The Company’s products have been certified by the EU CE
certification, the US FDA certification and the Japanese Ministry of Health, Labour and Welfare certification, and exported
to Europe, America, Japan and other countries. In 2005, “Winner” brand entered the domestic hospital and drugstore market.
With its excellent product quality and service, Winner Medical gradually established a good brand and reputation in domestic
hospitals and drugstores. Since the outbreak of public health incident, the “Winner” brand epidemic prevention products have
entered the hospital and the civilian market. Thanks to its public commitment not to increase prices and the quality of its
products, it has won the unanimous praise at home and abroad, from government units and the public, and the brand
reputation and popularity have been greatly improved.
In terms of products, Winner Medical focuses on market demand, is close to clinical and terminal, is driven by R&D and
innovation, and constantly improves product layout. Its business scope extends from sales of single wound care products such
as cotton gauze to sales of integrated solutions of wound care, infection prevention, and health & personal care products.
Disposable operating room consumables can more effectively reduce nosocomial infection than reusable medical products.
With more attention of the state and hospitals to nosocomial infection and residents’ attention to personal health environment,
disposable operating room consumables are gradually accepted by the domestic market. Winner Medical's medical dressing
product line has been expanded from traditional dressing products mainly focusing on gauze products to advanced 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 advanced wound dressings has been in the forefront of the industry, and is expected
to become the core products for the development of Winner Medical.
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2022 Annual Report
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.
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 advanced pure cotton tissues, female care, baby care,
adult clothing, home textile products, etc.
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(II) Main Products and Purposes
With the expansion of the Company's business scope, the product categories have become more abundant. Therefore, the
Company has readjusted the caliber of the product categories in this report. The product categories of the medical
consumables segment are divided into traditional wound care and dressing, advanced wound dressing, consumables in the
operating room, infection prevention, health and personal care and other products; the product categories of the healthy
consumer products segment are divided into wet and dry wipes, sanitary pads, other non-woven products, baby apparel and
products, adult apparel and other textile products.
The main categories and images of some products under the Company's medical consumables section are as follows:
Traditional wound care and High-end wound dressing
products Consumables in the operating room
wound dressing products
Main Purpose: Main Purpose: Main Purpose:
For absorbing wound exudate, dressing For creating a moisture balance at the wound For preventing infections in the operating
wounds, and sports protection interface to optimize its benefits for wound room
healing, reduce the frequency of dressing
Product: replacement, and reduce secondary damage Product:
Medical cotton, gauze, bandages, etc. Product: Surgical gloves, surgical packs, surgical
gowns, etc.
Silicone dressings, alginate dressings,
superabsorbent dressings etc.
Infection protection Health & personal care Other Products
Main Purpose: Main Purpose: Main Purpose:
For occupational protection of medical staff For wound cleaning and disinfection, and For health management to meet their medical
and patient isolation daily health care needs
Product: Product: Product:
Masks, protective clothing, isolation gowns, Incontinence care, oral and nasal products, Injection and puncture products, test kits,
gloves, foot straps, hats, etc. hands-free disinfection gel, alcohol etc.
disinfection tablets, band-aids, etc
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2022 Annual Report
The main categories and images of some products under the company's healthy consumer goods section are as follows:
Wet and dry cotton tissue Sanitary pads Other non-woven products
Product: Product: Product:
Cotton tissues, wet tissues etc. Sanitary pads,disposable period panties etc. Facial mask, makeup cotton, cotton diapers,
disposable underwear, etc.
Baby clothing and supplies Adult clothing Other woven products
Product: Product: Product:
Baby's leisure wear, outing costume, Adult's leisure wear, outing costume, Bedding, bathroom accessories, etc.
underwear, bath towels, handkerchiefs and underwear, footwear, etc.
quilts, etc.
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(III) Main Operating Modes
1. Procurement mode
The Company promotes digital platform management and has established a robust procurement management system,
procurement process, and risk control platform. Procurement is driven by planning, with procurement plans and strategies
formulated based on annual, quarterly, and monthly demands. Different modes of procurement are implemented according to
the types of materials required, including strategic procurement, centralized procurement, and decentralized procurement.
Based on purchasing requirements, technical standards are determined through a combination of research and development,
product analysis, and quality assessment. Procurement plans are then developed which include vendor selection, price
negotiations, quota allocation, arrival schedules and payment terms. In the pursuit of a sustainable supply chain ecosystem,
collaborative suppliers across product development, manufacturing, procurement fulfillment and other domains remain
steadfast in their commitment to achieving low carbon emissions, cost-effectiveness, transparency and social responsibility.
1) Responsible procurement: The Company mandates that the demand department submits procurement requests based on
customer orders, sales plans, and production plans. Upon approval of these requests and analysis of market conditions
for raw materials and auxiliary supplies, the purchasing department will develop appropriate strategies for procuring
different materials. These group purchasing strategies may include strategic procurement, bidding procurement,
centralized procurement and decentralized procurement. For example, adopt strategic sourcing rules for bulk raw
materials (e.g. cotton, cotton yarn, etc.); implement risk level management for outsourced materials, and provide
standard technical documents and quality testing standards for each product. From demand identification, sourcing,
quotation comparison and selection, contract negotiation and signing, purchase order issuance and approval, goods
receipt and warehousing management to invoice reconciliation and payment application, the entire procurement process
is visualized for easy supervision. All procurement activities must be strictly implemented in accordance with the
established procurement management system.
2) Purchasing control process: The principle of transparency and quality priority is adopted to ensure the reliability of
product quality and stability of supply, while also maintaining the ability to respond to changes in the external market
and support ongoing enterprise development. 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.
3) Supply resources classification management: according to the Company's development, match the corresponding
supplier resources, cooperate with suppliers to seek win-win result, adopt different supplier cooperation strategies and
reserve corresponding supply resources for different materials. Perform classification and dynamic management of
existing and new suppliers, prioritize cooperation with suppliers with higher evaluation scores, and ensure that key
materials are provided at least by two qualified suppliers, thereby reducing supply risk through competition among
multiple suppliers. We also regularly assess material supply risks and timely adjust our procurement strategy to
supplement our reserve suppliers and minimize supply risks.
4) Qualification review: For new suppliers, the Company has made strict selection criteria and supplier development and
process management systems, including supplier qualification review, and on-site inspection on suppliers (such as
medical production license, medical production registration certificate, ISO13485, TUV or CE certification); for
suppliers with poor or even unqualified annual performance, the Company will add them to the key watch list or
eliminate them.
5) Sustainable supply chain: The Company keeps improving its green and sustainable development, such as cooperation
with schools and hospitals. We are also working with the upstream and downstream of the supply chain to further
promote sustainable development. For example, we have promoted the project of product package de-plasticization;
multiple categories of Purcotton products have obtained carbon footprint certification; we optimize product process to
minimize the use of energy, and upgrade the production equipment to enable energy recovery and reuse.
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2022 Annual Report
2. Production mode
Aligned with the Company's business strategy objectives, and directed by the Company-level S & OP sales and operation
plan, we formulate medium and long-term strategic plans and short-term production and procurement plans according to the
Company's development and customer demand. We also coordinate all related upstream and downstream departments to
ensure the balance from front-end demand to supply and delivery. In the process of order fulfillment, we match capacity
according to the characteristics of different demands and in combination of the actual supply of human, machine, material,
method and environment. Through the flexible deployment of different production modes (MTO (Make to Order), MTS
(Make to Store), ETO (Design to Order) and ATO (Assemble to Order)), we continuously improve our service level to meet
customer demands and create value for customers.
1) In the production mode of Make to Order MTO, products are produced according to the customer's original product
design; procurement is performed according to the BOM for the accepted order. Therefore, inventory basically remains
zero. For OEM customer orders, as the market constantly reduces delivery cycle, it is common now to combine MTO &
MTS production modes.
2) In the production mode of Make to Stock MTS, products are not customized for specific customers, and are usually
delivered to different customers; production plans are formulated according to market demand and existing inventory.
Safe inventory is determined for such products according to the production cycle and the frequency of demand to
ensure that products are available when the customer places order.
3) In the mode of Engineer to Order, specific design requirements from a single customer can be met, usually for small
production lots; in the production process, the value mainly lies in product and packaging design work. Support for
custom design is an important part of this production mode. Inventory basically remains zero.
4) In the Assemble to Order mode, the components required for the production of finished products are stocked in advance.
When the customer places order, products can be assembled quickly to meet flexible delivery demands. Common
materials are stocked in advance to maintain balance between rapid delivery and inventory.
3. Sales mode
The Company sells products through multiple channels. The main sales channels are shown in the following figure:
Third-party B2C platforms, such as Tmall,
Online channels JD.com and Amazon
Medical Hospitals
consumabl Domestic sales Pharmacy/convenience stores
es
Government and enterprise
Offline platform
channels
Private brand
Overseas sales
Winner OEM/ODM sales
Tmall, JD.com and other traditional e-
commerce platforms
E-commerce
Online channels platforms
TikTok, Kuaishou and other interest e-
commerce platforms
Official shopping mall and Wechat
Healthy mini programs of Purcotton
consumer
goods
Directly operated and franchised chain
Offline stores
Real stores
channels Supermarkets, convenience stores and
beauty stores
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4. Marketing mode
The Company is developing its products under the Winner Medical and Purcotton in a coordinated way. With 30 years of
experience in the production of medical supplies, Winner is a leading medical consumables brand in the Chinese market and
a brand with a global vision. With “caring for health and life, making a better world” as its vision and industry-leading
product quality as the cornerstone of its brand value, the product marketing and promotion for the brand rely more on its
brand reputation. With pure cotton products as its label, Purcotton ad opts unique, differentiated strategies to build its brand.
By integrating multiple promotion channels such as directly-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.
(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, and medical and healthcare improve, the global medical
consumables market is showing a steady growth trend. 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 advanced wound dressings, and it is expected to replace
imported dressings by domestic dressings step by step. After the occurrence of public health incident, the government, health
care professionals, and consumers pay more attention to health protection and quality, and the demand for masks has
increased significantly compared to the pre-public health incident. The medical consumables market in China is growing
rapidly, creating a good external environment for enterprise development.
On October 25, 2021, the CPC Central Committee and the State Council officially announced the “Opinions on the complete,
accurate and comprehensive implementation of the new development concept to achieve carbon peak and carbon neutrality”.
It is pointed out that strengthening China's green and low-carbon technological innovation and continuously expanding green
and low-carbon industries will accelerate the formation of new drivers and sustainable growth poles of green economy. We
will significantly improve the quality and efficiency of economic and social development and provide strong impetus to build
China into a great modern socialist country in all respects. On December 4, 2021, the National Development and Reform
Commission, together with nine departments including the Ministry of Ecology and Environment, jointly issued the “14th
Five-Year Plan for Promoting Clean Production”, with the core objectives of basically establishing the system of clean
production, significantly improving the overall level of clean production, and growing the clean production industry. It is of
positive significance to help achieve the goal of carbon peak, carbon neutrality, and promote green development. In recent
years, the total retail sales of consumer goods in China has been rising steadily. As people grow more confident on the
national culture, the domestic goods have injected new vitality into the national economy, becoming an important driving
force to promote consumption and expand domestic demand. At the same time, consumers are increasingly concerned about
the environmental performance and sustainability of products, and the rise of environmental protection and low carbon
awareness is also driving the transformation and upgrading of the consumer goods industry.
2. High-quality products and precise brand positioning enhance brand value
The Company is one of the earliest medical consumables enterprises in China to establish a full industrial chain covering
cotton procurement, R&D, production, and direct export. The Company is one of the early companies that established a
medical-grade quality management system in the industry, and has passed the ISO13485 Medical Devices Quality
Management System Certification. Its product quality complies with the European, American, Japanese, and Chinese
standards. Winner Medical enjoys a high brand reputation and recognition. In May 2021, Winner Medical was selected by the
Federation of Shenzhen Industries as the “Benchmarking Enterprise in China's Medical Consumables Sector” and at the same
time recognized as an “International Renowned Brand” by the United Nations Industrial Development Organization. In
December 2021, “pure cotton spunlace non-woven fabrics and its products” of Winner Medical was awarded as the national
single champion of manufacturing industry. In April 2022, Winner Medical was awarded the honor of “National Pioneer
Worker” by the All-China Federation of Trade Unions. Winner Medical has expanded its business from the medical field to
the consumer goods field, which has also increased the brand value of its consumer products.
Purcotton is committed to fulfilling consumers’ demand for high-quality products which are “comfortable, healthy, and
environmentally friendly”. Constantly winning recognition from consumers since its launch in 2009, Purcotton has rapidly
grown into a top brand of maternal and child products on Tmall, and has gained greater market shares in the field of maternal
and child consumer products. In October 2019, Purcotton won the reputation of “70 Brand of the 70th Anniversary of the
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2022 Annual Report
Founding of New China” sponsored by CCTV. In January 2021, Purcotton was honored as one of the “Shenzhen Top
Brands” by Federation of Shenzhen Industries. In April 2021, Purcotton was included into the list of the second “Shenzhen
Top 100 Brands” announced by Shenzhen Quality City Promotion Association.
In conclusion, with high brand value, the Winner Medical and Purcotton brands will help the Company enhance customer
loyalty, stabilize product prices, and expand its market share in the competitive market, thereby ensuring its sustainable and
stable profitability.
The Company needs to comply with the disclosure requirements of the “Textile and Apparel Business” stipulated in the No. 3
Guideline of Shenzhen Stock Exchange for Self-regulatory of Listed Companies - Industry Information Disclosure.
III. Analysis of Core Competitiveness
1. Advantages of Business Philosophy and Corporate Culture
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 quality and innovations, and making
its way into the medical consumables and advanced medical dressing market. Through the “internal growth+ external
growth” approach, the Company is committed to taking the lead in the field of medical consumables and providing one-stop
medical consumables solutions. With its corporate vision of “changing the world with pure cotton”, Purcotton advocates a
lifestyle with pure cotton by applying “comfortable, healthy, and environmentally friendly” in all aspects of daily life, and
deliver the brand concept of “reassurance, happiness and sustainability” to consumers. Sticking to the “cotton fiber only”
principle in its operation, Purcotton aims to develop recyclable and renewable resources, gradually replace chemical fibers
with natural fibers, and give full play to the use value and environmental protection value of cotton fibers, following the path
of low carbon, environmental friendly and sustainable development. The visions and business philosophies regarding the
Company's two brands are focused on human health, environmental protection, and improving the quality of life, which are
in line with humans' sustainable development strategy.
The Company will always uphold its core operating principle of “prioritizing quality over profit, brand over speed, and social
value over corporate value”, and stick by its core values of “hard work, self-criticism, exploration and innovation, 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 public health incident, 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. The Company provided a large number of epidemic prevention and control supplies to hospitals,
epidemic prevention agencies, pharmacies and the public.
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 advanced wet wound dressing is specially designed for the vulnerable skin of the elderly with chronic diseases.
It may facilitate the observation of wound healing and reduction of pain with dressing change, 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 masks protective clothing, surgical gowns, and isolation gowns, has
not only alleviated the shortage of raw materials during the public health incident 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
31
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, 2021, 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. In February 2023, together with
Soochow University, the Company established Health Sleep Product Industry Technology Innovation Center of Shenzhen
Purcotton Technology Co., Ltd. affiliated to the College of Textile and Clothing Engineering, with Lu Yehu as the director of
the center.
As of December 31, 2022, the Company has obtained 76 patents for inventions, 662 patents for utility models, and 349
design patents in China; and obtained 54 patents for inventions and 8 patents for utility models overseas. The Company was
regarded as a “Leading Enterprise in Independent Innovation” by the Shenzhen Municipal People's Government, and a
“Shenzhen Enterprise with Intellectual Property Advantages” by the Shenzhen Administration for Market Regulation.
3. Advantages of quality control
With a history of more than 30 years since its establishment, Winner Medical has achieved sustainable development and
maintained a leading position in the industry. It is inseparable from the Company's three core principles of “quality over
profit, brand over speed, social value over corporate value”. In this context, the quality policy of “Rigorous work, strict
compliance with laws and regulations, and continuously improve to win the full trust of customers” was formed and has been
implemented to date. Based on this guideline, Winner Medical Group has adopted EN ISO13485:2016 (ISO13485:2016),
China's Medical Device Manufacturing Quality Management Practice, the United States 21 CFR Part 820, and the European
Union MDD (DIRECTIVE 93/42/EEC), EU MDR (REGULATION (EU) 2017/745) and EU PPE (REGULATION (EU)
2016/425) as cornerstones, forming a quality management system model based on process management. Under this model,
Winner Medical focuses on the research of product quality standards and regulatory requirements of different
countries/regions, and actively passes the corresponding product registration/certification procedures. It has obtained product
access qualifications in China, EU, USA, Japan, UK, Switzerland, Russia, Australia, Malaysia, Thailand, Saudi Arabia and
other countries/regions, providing domestic and foreign customers with high quality products and good after-sales service. At
the same time, Winner Medical has been committed to building professional, reliable and comprehensive product quality
testing capabilities. The Company's R&D center laboratory and Jingmen Winner Laboratory have been accredited by the
China National Accreditation Service for Conformity Assessment (CNAS). With professional and reliable product testing
capabilities, it not only provides guarantee for product quality control, but also serves as a source of data for continuous
product improvement.
To ensure the safety of raw materials for its products, Purcotton uses high-quality cotton from around the world to produce its
core products, such as its pure cotton tissue, sanitary pads with pure cotton surface, and pure cotton wet tissues. All the
workshops are managed according to the management requirements for the workshops of medical dressings, which can help
strictly control bacterial contamination and pollution sources. With its strict quantity management control system, Purcotton
is able to provide customers with high-quality consumer goods that are safe and environmentally friendly. Adhering to the
concept of “medicine close to life, Purcotton care for health”, Purcotton not only applies quality natural cotton but also
attaches importance to the environmental friendly weaving and finishing process. To ensure that its products are ecologically
safe, no fluorescent brighteners are added to its products. Some of its products are OEKO-TEX Standard 100 certified. Some
non-woven products have passed the testing performed in accordance with the EU AP (2002) 1 and EC1935/2004 EU Food
Contact Materials Regulation.
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2022 Annual Report
4. Product advantages
(1) Medical consumables
The Company's product categories include advanced wound dressing products, traditional wound care and dressing products,
consumable products in operating room, infection protection products and health & personal care products, covering
application scenarios like clinical and medical institutions and families, which can better meet clients' needs of one-stop
procurement. In addition to traditional wound care products and dressing products, the Company has also developed
representative advanced 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 changing 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 protective products, the Company has successfully developed
and marketed biodegradable masks, N95 medical protective masks of high permeability and other products, providing
solutions for the environmental attributes of mask products and greatly enhancing the comfort of mask products. In the field
of home care, the Company provides professional products for clinical use such as hyaluronic acid masks, saline cleaning
pads, hydrocolloid band-aids and medical sheet masks to consumers through portable, sterilized and diversified packages.
These professional health care products and services in daily home care help customers reduce the frequency of going to the
hospital.
(2) Healthy consumer goods
The Company's healthy consumer goods consist of non-woven consumer goods and apparel textile consumer goods. The
non-woven consumer goods include cotton tissues, sanitary pads, and wet wipes; the apparel textile consumer goods include
baby supplies, adult clothing, and bedding. Cotton fiber has ten prominent advantages, including natural, safe, comfortable,
naturally degradable, high output ratio, drought-resistant, salt and alkali-resistant, environmentally friendly, time-honored, as
well as great economic and social value. The Company takes the lead in proposing the innovative concept of replacing
chemical fibers with cotton and getting rid of chemical stimulation, and provides consumers with healthy, comfortable and
environmentally friendly consumer goods. And its cotton tissues are pioneering tissues in the industry, which can partially
replace household paper. Pure cotton tissues are made of degradable cotton after physical processing. There are less chemical
stimulation and the tissues can be reused. The tissues are more comfortable, safe, and environmentally friendly, so consumer
acceptance of the tissues has been significantly improved, and there are many imitators in the market. For pure cotton wet
tissues 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. 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 Industrial Development Organization.
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(2) Brand advantages in the field of healthy consumer goods
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. Purcotton is creating new categories and lifestyles by applying cotton materials in its core products ,
including pure cotton wet tissues, sanitary pads with pure cotton surface, BBNice, as well as gauze textile products and
clothing. It has shaped an brand image of “new Chinese products” with cotton as the core material and excellent product
quality. Its brand awareness is increasing and its reputation is improving year by year, forming effective competition barriers
and bringing powerful added value of products for Purcotton.
6. Advantages of sales channels
(1) Advantages of online channels
In terms of online channels, the Company's “Winner Medical” and “Purcotton” have completed the deployment of
mainstream third-party e-commerce platforms, including Tmall, Jd.com, Pinduoduo 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 Kuaishou, which helps it open up new sales growth channels.
(2) Advantages of offline channels
In the medical consumables section, the Company has covered more than 5,000 medical institutions and 150,000 retail
pharmacies in China; foreign medical business customers and distributors have covered more than a hundred of countries and
regions such as Europe, Japan and the United States.
In the healthy consumer goods section, as of December 31, 2022, Purcotton has opened 340 offline stores (including 26
franchisees) in more than 70 mid- and advanced shopping malls in Shenzhen, Shanghai, Beijing, Guangzhou and other key
cities in China. The Company integrates its brand concept into its store design. It hires well-known designers at home and
abroad to upgrade its store image and to enhance its consumer experience with an exhibition-style product display balancing
both aesthetics and richness of products. It also adds an experience area to highlight product display and consumer experience,
which has helped increase the Company's sales revenue and further increase its brand awareness.
As for offline terminals like chain stores and supermarkets, based on Purcotton's positioning of high-quality consumer goods,
the Company mainly deploys Purcotton products in well-known supermarket chain, advanced boutique supermarkets, local
leading supermarkets and chain convenient stores. 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 11,000 outlets of China Resources Vanguard, Rt-Mart 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 stores, third-party e-commerce platforms, and mobile e-commerce channels. In such form, the
convenience of online channels and the consumer experience of offline channels can complement each other. Having a deep
insight into the development trend of integrating online and offline channels, the Company thoroughly optimized and
integrated various channels to integrate traffic and sales of offline stores and online Wechat 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
December 31, 2022, the number of Purcotton users has exceeded 43.35 million, including over 21 million registered members
of its private platforms (9 million store registered members, and over 12 million registered members of its official website
and WeChat mini programs).
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2022 Annual Report
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 eleven 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, advanced medical dressings and medical infection control protection products. In 2022, the Company
acquired three sister companies, i.e. Longterm Medical, Winner Guilin, and Winner Medical (Hunan), to solidify the key
foundation for building the capability of one-stop medical consumables solution. Through continuous construction and
improvement, the daily management system within the factory was optimized through lean management, standardization,
automation, digitalization and greening. In future, the Company is also going to explore and build smart factories. It will
realize “unmanned production, process-based management, and process digitalization” step by step.
IV. Main business analysis
1. Overview
(I) Business analysis
In 2022, the domestic and international economic situation is complex and volatile under the influence of once-in-a-century
global changes and the public health events. Facing the complex and severe external environment, Winner Medical, as a
medical and health enterprise that realizes the coordinated development of medical and consumption sectors, always maintain
strategic focus. Rooted in the two major sectors of medical supplies and healthy consumer goods, and guided by the three
core business principles of “Quality over profit, brand over speed, and social value over corporate value”, the Company has
responded positively and risen to the challenge. In 2022, we achieve an operating income of 11.35 billion yuan, an increase
of 41.2% year-on-year; the proportion of revenue contributed by private brands increases to 49.1% of the overall revenue; the
annual net profit attributable to shareholders of listed companies achieves 1.65 billion yuan, and the net profit after deduction
of non-recurring profit and loss reaches 1.56 billion yuan, representing 33.2% and 51.7% year-on-year growth, respectively.
The Company insists on independent innovation and research and development of basic materials, sticks to product
leadership, focuses on core best-selling products and further promotes the development of channels. Thanks to these
measures, our brand awareness and reputation are continuously improved, and the business performance and management
quality also demonstrate excellent results.
(1) Medical consumables business: “internal growth + external growth” together drive development, and
conventional products business realizes rapid growth
In recent years, under the influence of tightening global medical regulation and accelerated process of population aging and
chronic disease, the medical device industry has ushered in a golden period of rapid development. The medical consumables
sector is in a rapid development stage for its high frequency of use and low industry penetration rate. Compared with the
global market, China's medical consumables market is more promising in terms of scale and growth rate.
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Our medical consumables brand, Winner Medical, has been cultivating the medical consumables industry for more than 30
years and has steadily went through several rounds of economic and industry development cycles. In the face of public health
events in the past three years, the Company has made every effort to guarantee the supply of medical supplies. While making
due contributions to society, its brand awareness and reputation have been significantly improved. Our channels have been
further consolidated, laying a solid foundation for the regular products to enter the hospital and the improvement of C-end
sales performance. In 2022, the medical segment achieved sales revenue of 7.20 billion yuan, up by 83.7% year-on-year.
Among them, the revenue of infection protection products grows by 99.1% year-on-year, and the revenue of conventional
products grows by 59.8% year-on-year. Driven by the dual approach of “internal growth + external growth”, our product
lines are further enriched through integration, merger and acquisition, which provides a solid foundation for the Company's
development. The Company's strategic positioning of “leading the field of medical consumables and providing one-stop
medical consumables solutions” has taken a solid step forward.
1 Products
The Company is committed to becoming a one-stop solution provider for medical consumables, covering advanced wound
dressing products, traditional wound care and dressing products, consumable products in operating room, infection protection
products and health & personal care products. With the changing situation of public health incidents at home and abroad, the
demand for epidemic prevention products increased significantly during the year. The operating income of infection
protection products is 4.74 billion yuan, of which the mask and protective clothing products contribute 4.48 billion yuan,
becoming the main products of the medical segment in the year.
Leveraging the brand awareness and reputation strengthened by masks and protective clothing, our conventional products,
driven by the dual factors of “internal growth + external growth”, achieved revenue of 2.47 billion yuan during the reporting
period, an increase of 59.8% year-on-year, with sales revenue of advanced wound dressing products increasing by more than
3.7 times, an increase of 108.4% after excluding M&A; the sales revenue of consumable products in the operating room
increased by 46.8%; the sales revenue of health and personal care products increased by 34.9%. As of the end of the reporting
period, we hold 680 patents in the medical consumables segment and 319 medical product registrations (including 22
registrations of Category III medical products).
Through the acquisition of Longterm Medical, Winner Medical (Hunan), Winner Guilin and other companies, the Company
increased product lines in the fields of advanced wound dressings, injection and puncture consumables, latex gloves and
condoms, which strongly improved its industrial layout. During the year (from the date of equity acquisition to the end of the
reporting period), the M&A companies contributed a total revenue of 810 million yuan. In the future, the Company will
continue to strengthen the in-depth integration of M&A companies in multiple fields such as capacity enhancement, product
technology, brand channels and operation management to help the relevant production lines make greater contributions to the
Company.
2 Channel
In 2022, the channel structure of medical consumable business revenue has changed significantly. During the reporting
period, the sales revenue of foreign sales channels was 1.24 billion yuan. In 2020, some orders were delivered through inter-
shipment. In 2021, the revenue of the current period decreased by 18.2 compared with the same period last year under the
background of the high increase in the revenue base. The three major channels, B-end- hospitals and C-end - e-commerce and
pharmacies, contributed 3.62 billion yuan, 940 million yuan and 580 million yuan respectively in revenue in 2022, with year-
on-year growth rates of 190.6%, 39.1% and 76.7%, respectively.
In terms of hospital section, the situation of public health incident is severe in 2022. In order to ensure the safety and health
of front-line health care professionals with limited medical resources, the Company prioritizes the supply of epidemic
prevention products to hospitals and controls the resources of other channels to a certain extent. As a result, the overall
revenue of the hospital section increases significantly. In addition to the increase of brand recognition thanks to the epidemic
prevention products, the Company has also consolidated its professional brand image through a series of academic
conferences and academic promotion activities, which has strongly enhanced the hospital coverage rate. By the end of 2022,
the Company has covered more than 5,000 medical institutions with remarkable expansion effect.
In 2022, C-end sales exceeded 1.5 billion yuan, up by 51.4% compared to 2021, demonstrating vigorous growth momentum.
In terms of e-commerce, the Company has outstanding performance on traditional third-party online sales platforms
including Tmall, Jingdong and Vipshop, and ranked top three in the core major single product category on the cross-border e-
commerce platform of Amazon; by the end of the reporting period, the cumulative number of fans on domestic e-commerce
platforms was 13.44 million, with 4.2 million added during the year, and the sales performance on e-commerce platforms
remained leading in the industry. As for pharmacies, 150,000 OTC pharmacies were covered by the end of the period, with
30,000 new ones added during the year.
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2022 Annual Report
(2) Healthy consumer goods business: cotton technology realizes differentiation, and the revenue remains stable
against the trend
Since the occurrence of public health incident, the lifestyle, consumption habits and income levels of people have been
profoundly affected. According to the data released by the National Bureau of Statistics, the total retail sales of consumer
goods in 2022 was 43.97 trillion yuan, down 0.2% year-on-year; the national per capita consumer spending was 24,538 yuan,
down 0.2% in real terms excluding price factors; the total retail sales of consumer goods and the actual growth rate of
consumer spending fell slightly year-on-year. In such a market environment, the track of national brand of maternal and
infant products that the Company stays is in line with the general trend of modern exquisite child care and the vigorous
development of national tide economy, showing strong resilience of development.
Purcotton, the Company's healthy consumer goods brand, focuses on the upgrading market of maternal and infant
consumption. Backed by the parent company with a medical background of more than 30 years, it starts with the technology
of cotton spunlace non-woven fabric, and continuously enrich its product categories. The consumption scene has expanded
from maternal and infant to the whole family consumption of women and home. With comfortable, healthy and
environmentally friendly materials, medical background, customer base of high loyalty and excellent product quality, the
brand established significant competitive advantage of differentiation. In 2022, facing a weak domestic consumer market,
Purcotton actively responded to the challenge, and achieved sales revenue of 4.05 billion yuan during the reporting period,
maintaining stability against the trend. Compared with 2019, the revenue grew by 34.8%, with a three-year business scale
CAGR of 10.5%.
1 Products
Guided by the principle of “cotton fiber only”, Purcotton continuously invests in technology research and development, and
has built up a differentiated product matrix. The Company's consumer products include non-woven products and woven
products, which contributed to the operating income of 2.17 billion yuan and 1.89 billion yuan respectively during the
reporting period, with year-on-year changes of 1.4% and -1.5% respectively.
In terms of non-woven products, Purcotton has created special advantages of cotton material through a variety of patented
technologies and actively innovated. In 2022, it has strived to enhance product competitiveness through upgrading basic
materials and innovating product categories. The Company created the first cotton soft towel category in 2009, and Purcotton
led the formulation of the national standard of “Soft Towels” in 2021, further promoting its position in the industry. The first
patent of sanitary napkins of Purcotton is to replace the core body of wood pulp with 100% cotton, which is skin-friendly and
not sensitive. Within the year, the dry and refreshing of the cotton surface layer is further improved, and the technical barrier
of the product is created. In 2022, against the background of overall weak consumption, the Company is also confronted with
the low-price competition from chemical fiber materials substitutes and cotton competitors. It promotes the advantages of
cotton through the brand release conference of “Sheyu Gongsheng”, the original IP series video of “What She Changed”, the
spokesperson's official announcement, and the documentary of “What Is Cotton”, etc., in an effort to protect the market share.
During the reporting period, wet and dry cotton towel and sanitary napkin products achieved operating income of 1.16 billion
yuan and 570 million yuan respectively, representing a steady to slight increase compared to 2021. By the end of the
reporting period, Purcotton has obtained a total of 469 patents, 134 new patents during the year, and won the China Green
Product and carbon footprint certification, leading the green development of the industry.
In terms of textile products, Purcotton centers around the of middle and advanced value positioning, focusing on delicate
mothers and high-quality and high-yield groups. With the safety, comfort and skin-friendly features of cotton material, it
meets the needs of maternal and infant markets and accumulates ultra-sticky customer groups. Through the expansion of
product categories, the consumption scene is extended to adult clothing and home textiles. In 2022, the sales revenue of baby
and child clothing, adult clothing and household textile consumer goods reached 850 million yuan, 690 million yuan and 350
million yuan respectively, with gauze bath towels, saliva towels and baby and child cuddles occupying a leading market share.
As the main channel for sales of baby products, stores were closed temporarily and frequently during the year, resulting in a
2.6% year-on-year decline in revenue from baby apparel and supplies. The overall revenue of adult apparel remained stable.
2 Channel
Purcotton has diversified online and offline channels, including traditional third-party platforms such as Tmall, Jingdong,
Vipshop, e-commerce platforms such as TikTok Interest, and its own platforms such as official website and mini program. In
terms of the offline channel, it takes the strategy of increasing the density of offline direct-sale stores in first-tier and second-
tier cities, and accelerating the development of high-quality franchisees; At the same time, through the mode of offline
experience and online re-purchase, deep integration of multiple channels, complementary advantages of multiple platforms,
Omni-channel layout was established. By the end of the reporting period, the number of members in the region exceeded 43
million, and the number of omnichannel members increased by 23.7% year-on-year. During the year, Purcotton continued to
explore its online channels, looking for breakthroughs from the four dimensions of new products, popular products, new
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customers and service. It improves its fine operation ability, focuses on the matrix of new products and popular products, and
strengthens the mutual penetration among categories. Through brand activities, content community, membership system and
other in-depth operation, the conversion rate of new customers and old customers are increased. In 2022, online channels
achieved sales revenue of 2.57 billion yuan, an increase of 0.9% over the previous year.
In 2022, due to the direct impact of public health incident on the offline consumption industry, the pressure of store operation
increased significantly. By the end of 2022, the Company had 340 offline stores (including 314 directly operated stores and
26 franchised stores), opened 45 new stores (39 new directly operated stores and 6 franchised stores) and closed 25
inefficient and loss-making stores (22 directly operated stores and 3 franchised stores); the annual sales revenue of offline
stores was 1.18 billion yuan, down 4.1% year-on-year. In the face of challenges, the Company took the initiative to optimize
the existing store structure, and actively expanded O2O channels and launched ultra-fast service for stores. It promoted the
cooperation between offline stores and online platforms such as Meituan, Jingdong Daojia and Ele. me, which not only
increased the visibility and customer flow, but also enhanced the customer experience and the offline sales performance. The
development of supermarket channels seeks progress while maintaining stability. More than 400 new large stores, more than
4,500 beauty stores and more than 8,000 convenience stores have been added in the year. Besides, dry and wet cotton soft
towels and disposable travel products have been gradually introduced. In 2022, supermarket channels contributed 230 million
yuan in revenue, up 14.1% year on year.
The natural material and excellent quality bring together loyal customer base who value the material, natural, comfortable
and environmental protection, and the re-purchase rate of the brand maintains a high level. In 2022, the re-purchase rate of
Purcotton stores is nearly 50%, and the re-purchase rate of official website channels is nearly 45%.
(3) Company profitability analysis
Affected by the decline in the global sales price of medical protection products and the increase in the proportion of business
to the company's overall sales, the gross margin of infection protection products decreased by 5.8 percentage points, dragging
the overall gross margin down by 2.5 percentage points to 47.4% during the reporting period. In 2022, the Company
vigorously carried out cost reduction and efficiency improvement actions. Through end-to-end cost reduction of products and
vigorous reduction of the number of SKUs, the cost control effect was remarkable, and the marketing expense rate was
significantly reduced. The Company attaches great importance to research and development and continuously increases the
investment in R&D expenses. The rate of research and development expense increased from 3.7% to 4.3% in the year, and
made remarkable achievements such as continuous breakthrough in core technology, increasing the number of patents and
registration certificates of medical products. Under the influence of the above factors, the Company achieved a net profit
attributable to shareholders of the listed company of 1.65 billion yuan in 2022, representing a year-on-year increase of 33.2%.
After excluding the impact of government subsidies, investment income of trading financial assets and other non-recurring
items on net profit, the Company achieved non-GAAP net profit of 1.56 billion yuan, an increase of 51.7%.
(II) Overview of operation and management
(1) Brand building
Winner Medical consistently enhances brand recognition through compelling brand storytelling, behaves as an influential
figure in academics and marketing through clinical promotion, optimizes end-to-end marketing transformation through
content operation, creates brand values through public welfare activities, and achieves corporate strategies by leveraging
brand marketing as a catalyst.
As to branding, Winner Medical cooperated and engaged with leading media and business magnates to co-create positive
communications and actively build its brand image. The advertising on Weibo, WeChat, Xiaohongshu, Douyin, elevator ads,
and other channels generated an overall exposure of over 1.4 billion. The Company showcased its latest products and cutting-
edge technologies to domestic and international customers and consumers by participating in five exhibitions throughout the
year.
Regarding communications, Winner Medical affected the professional market through academic conferences at all levels,
participating in over 85 educational activities at each level in the whole year, such as the Wound Care Training Base of
Winner Medical Academy established jointly by the Company and the Second Affiliated Hospital of Guangzhou Medical
University to provide theoretical and practical training for clinical workers in the field of professional wound care. Winner
Medical launched cross-industry cooperation with various To C young brands, and the co-branded products were sold out
online in 3 weeks, while 3 online cross-industry campaigns generated an overall exposure of over 45 million. In 2022, the
company played a pivotal role in driving traffic and sales for a total of 7,000+ end stores.
38
2022 Annual Report
Purcotton continued to deepen its communication with consumers by effectively conveying the numerous advantages of
"cotton" in terms of environmental protection and sustainable development. This was accomplished through the endorsement
of spokespersons, the creation of high-quality original content, offline exhibition tours, and press conferences. By promoting
culture output to reach emotional resonance with consumers, the company demonstrated its commitment to delivering brand
humanistic care and improving brand awareness and reputation.
On March 1, Purcotton officially announced Guo Jingjing, a former national diving team athlete, as the brand spokesperson.
Since March 2022, Purcotton, together with China Women's News and Xin Shixiang, has created the original brand character
documentary series “Her Changes”, presenting stories of Luo Haixiang, Shui Qingxia and Xu Ying. The spirit of the times
was recorded through the experience of real people, so Purcotton was deeply connected with the spirit and values of users and
the brand's own content IP was created. 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 introduce
the environmental protection value of cotton and convey the brand's sustainable development vision to consumers through
online live broadcasts.
In addition, during “818 Seasonal Membership Campaign” in 2022, Purcotton announced that three classic products,
including its 100% pure cotton tissues, obtained SGS carbon-footprint certification on Members' Day themed “Hearing
Blooms and Meeting with Peaceful Minds”. In September, Purcotton conducted a quality traceability journey, and told stories
about four cotton keepers on “perseverance”, “faith”, and “innovation”, interpreting its deep understanding of the spirit of
cotton.
(2) Product R&D
The Company sticks to independent innovation and development of basic materials. In medical wound care, the Company has
been upgrading and iterating functional wound dressings, allowing products to be recognized by customers at home and
abroad. The Company is also accelerating the arrangements for access to domestic and foreign product documents to prepare
for the changes in EU regulations and the supply of locally-produced alternatives for domestic hospitals. As the first batch of
the Company's products, several independently-developed wet dressing products have been approved by FDA, while more
than a dozen wet dressing products are applying for CE, FDA and domestic registration, expecting to obtain certificates in
2023. The Company has successfully developed and marketed biodegradable masks, face mask series with cotton lining,
highly breathable N95 medical protective face masks, etc., providing solutions for eco-friendly masks and making mask
wearing more comfortable.
In health consumer goods, the air pleated yarn cotton fabric, pioneered by the Company in the industry and featured with
fluffy, comfortable, skin-friendly and soft feelings, has been applied to home wear, bath towels, and bedding suites. The
cotton sunscreen 3.0 developed by the Company not only has a super sunscreen effect of UPF50 +, but is thinner, lighter,
more breathable, and comfortable, with an upgraded function of peppermint cooling. Also, core products of the Company,
such as cotton tissues, wet tissues and gauze products, were successfully certified as green products, generally only available
to the Top 5% of enterprises in the industry. Cotton tissues obtained the first green product certificate in China. The
Company therefore encourages all enterprises to jointly “achieve the carbon peak and carbon neutrality goals, and protect
lucid waters and lush mountains”. The Company has also started the carbon footprint certification of core cotton products.
The total amount of greenhouse gas emissions of products can be quantitatively calculated through the carbon footprint
certification of cotton tissues, wet tissues, gauze baby clothes, four-piece bedding sets, and T-shirts. Implementing carbon
footprint certification marks an important step to meet all cotton products' carbon peak and carbon neutrality goals.
Regarding industry-university-research collaboration, the Company worked with Huazhong Agricultural University to
establish the Cotton Research Institute. It appointed Professor Zhang Xianlong as the Chief Cotton Scientist of Purcotton to
conduct cotton breeding and research and development projects for spunlace. Meanwhile, the Company and Soochow
University jointly founded the Soochow University-Purcotton Technology Co., Ltd. Technology Innovation Center for
Healthy Sleep Products Industry, allowing for research and development of healthy sleep bedding products to meet the health
needs of consumers. Also in 2022, the Company, along with the National Environmental Protection Engineering and
Technology Center for Textile Industry Pollution Reduction, Donghua University, carried out the analysis and testing of
microplastic release from textile materials, and called for deplasticization among consumers by showcasing shreds of
evidence of scientific testing.
(3) Digital transformation
39
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. It effectively promoted the whole industrial chain of the group to drive and
lead the overall business change and innovation from top to bottom. The Company advanced digitalization projects in 2022
as follows: ① The Company continuously upgrades digital operation capability for all categories of commodities: building a
full-dimensional commodity cost-volume-profit (CVP) model based on the full-lifecycle operation integration of
commodities, and effectively achieving optimal solutions for commodity gross profit and inventory through AI technologies,
such as algorithm engines and machine learning. The forecasting model optimized and improved the accuracy of commodity-
channel-consumer matching, balanced production capacity through algorithmic automatic distribution and replenishment
forecasting, and automatically modeled and generated good-selling element labels to improve the overall commodity
operation capability further. 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.
In 2022, the Company completed the connection of all members. In the future, the Company will further promote the
building of the CDP-MA marketing cloud and strive to accelerate the digital operation capability of omni-channel consumers
comprehensively. 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. In 2022, the Company's
independently-developed WMS helped complete the upgrading of the automated three-dimensional warehouse of Huanggang
Logistics, which has been promoted and contributed to the upgrading of the automated three-dimensional warehouse of
Tianmen Logistics. ④ The Company accelerated the building of digital operation capabilities for intelligent manufacturing.
Based on the new-generation ICT technologies such as Big Data, cloud computing, IoT, and AI, the Win+ Intelligent
Manufacturing Digital Operation Platform consists of 4 major applications, namely Advanced Planning & Scheduling System
(APS), Manufacturing Execution System (MES), Quality Management System (QMS) and Internet of Things Platform (IoT).
With over 300 functions, it covers various functions, such as planning and scheduling, manufacturing execution, quality
management, equipment monitoring, energy management, enabling digital management of quality, cost, delivery and
efficiency. By the end of 2022, the Win+ Platform has successfully gone live in 3 plants to improve the overall
competitiveness of manufacturing.
2. Revenues and Costs
(1) Composition of operating income
Overall operating income
Unit: yuan
2022 2021
Year-on-
Proportion Proportion
year
Amount in operating Amount in operating
increase/de
income income
crease
Total operating income 11,351,331,545.08 100% 8,037,420,812.91 100% 41.23%
By industries
Medical consumables 7,202,766,247.84 63.46% 3,922,006,868.38 48.80% 83.65%
Healthy consumer goods 4,054,985,562.16 35.72% 4,054,214,732.21 50.44% 0.02%
Others 93,579,735.08 0.82% 61,199,212.32 0.76% 52.91%
By products
Medical consumables - traditional
wound care and wound dressing 1,077,558,999.19 9.49% 924,789,927.57 11.51% 16.52%
products
Medical consumables - advanced
466,329,531.98 4.11% 98,746,452.60 1.23% 372.25%
wound dressing products
Medical consumables - operating room
471,737,488.55 4.16% 321,442,554.19 4.00% 46.76%
consumables
Medical consumables - infection
4,735,248,687.64 41.72% 2,377,805,588.44 29.58% 99.14%
prevention products
40
2022 Annual Report
Medical consumables - health &
268,849,070.13 2.37% 199,222,345.58 2.48% 34.95%
personal care products
Medical consumables - other products 183,042,470.35 1.61% 0.00 0.00% 100.00%
Healthy consumer goods - wet and dry
1,155,141,187.50 10.18% 1,140,041,080.92 14.18% 1.32%
cotton tissues
Healthy consumer goods - sanitary
569,333,764.43 5.02% 548,455,495.71 6.82% 3.81%
pads
Healthy consumer goods - other non-
441,125,708.69 3.89% 447,206,583.29 5.56% -1.36%
woven products
Healthy consumer goods - baby
848,630,484.33 7.48% 871,487,147.78 10.84% -2.62%
clothing and supplies
Healthy consumer goods - adult
687,219,850.71 6.05% 679,999,664.91 8.46% 1.06%
clothing
Healthy consumer goods - other woven
353,534,566.50 3.11% 367,024,759.60 4.57% -3.68%
products
Other businesses 93,579,735.08 0.82% 61,199,212.32 0.76% 52.91%
2022 2021
Year-on-
Proportion Proportion
year
Amount in operating Amount in operating
increase/d
income income
ecrease
By regions
Domestic 10,044,710,560.59 88.49% 6,343,778,322.52 78.93% 58.34%
Abroad 1,306,620,984.49 11.51% 1,693,642,490.39 21.07% -22.85%
By sales modes
Medical consumables - direct sales 1,454,564,874.56 12.81% 1,247,971,768.24 15.53% 16.55%
Medical consumables - distribution 4,539,719,035.77 40.01% 1,494,353,752.08 18.59% 203.79%
Medical consumables - agency 267,075,893.05 2.35% 502,684,789.51 6.25% -46.87%
Medical consumables - e-commerce 941,406,444.46 8.29% 676,996,558.55 8.42% 39.10%
Healthy consumer goods - e-commerce 2,565,052,802.59 22.60% 2,541,320,964.05 31.62% 0.93%
Healthy consumer goods - offline stores 1,184,292,470.95 10.43% 1,234,967,801.51 15.37% -4.10%
Healthy consumer goods - supermarket
231,766,054.19 2.04% 203,037,328.70 2.53% 14.15%
channels
Healthy consumer goods - key accounts 73,874,234.43 0.65% 74,888,637.95 0.93% -1.35%
Other businesses 93,579,735.08 0.82% 61,199,212.32 0.76% 52.91%
(2) Industries, products, regions and sales patterns that account for more than 10% of the Company's operating
income or operating profits
√ Applicable Not applicable
Unit: yuan
Year-on-
Year-on- Year-on-
year
year year
Gross increase/d
increase/d increase/d
Operating income Operating costs profit ecrease of
ecrease of ecrease of
margin gross
operating operating
profit
income cost
margin
By industries
Medical consumables 7,202,766,247.84 3,996,133,140.99 44.52% 83.65% 94.09% -2.98%
41
Healthy consumer goods 4,054,985,562.16 1,914,013,438.24 52.80% 0.02% -1.15% 0.56%
By products
Medical consumables - infection
4,735,248,687.65 2,441,987,072.10 48.48% 99.14% 123.98% -5.71%
prevention products
Healthy consumer goods - wet
1,155,141,187.50 585,437,456.89 49.32% 1.32% 1.05% 0.14%
and dry cotton tissues
Year-on-
Year-on- Year-on-
year
year year
Gross increase/d
increase/d increase/d
Operating income Operating costs profit ecrease of
ecrease of ecrease of
margin gross
operating operating
profit
income cost
margin
By regions
Domestic 10,044,710,560.59 5,225,576,005.36 47.98% 58.34% 64.01% -1.80%
Abroad 1,306,620,984.49 747,224,811.93 42.81% -22.85% -11.27% -7.47%
By sales modes
Medical consumables - direct
1,454,564,874.56 795,477,797.59 45.31% 16.55% 18.16% -0.74%
sales
Medical consumables -
4,539,719,035.78 2,633,795,605.22 41.98% 203.79% 203.05% 0.14%
distribution
Healthy consumer goods - e-
2,565,052,802.59 1,322,606,097.28 48.44% 0.93% -0.31% 0.65%
commerce
Healthy consumer goods -
1,184,292,470.95 467,012,543.64 60.57% -4.10% -6.83% 1.16%
offline stores
If the statistical caliber of the Company's main business data is adjusted in the reporting period, the Company shall follow the
primary business data in the past year changed by the caliber at the end of the reporting period
√ Applicable Not applicable
Unit: yuan
Year-on-
Year-on- Year-on-
year
year year
Gross increase/d
increase/d increase/d
Operating income Operating costs profit ecrease of
ecrease of ecrease of
margin gross
operating operating
profit
income cost
margin
By industries
By products
Medical consumables -
traditional wound care and 1,077,558,999.19 721,435,653.89 33.05% 16.52% 14.77% 1.02%
wound dressing products
Medical consumables -
advanced wound dressing 466,329,531.98 214,388,590.22 54.03% 372.25% 451.20% -6.58%
products
Medical consumables -
471,737,488.55 324,986,710.26 31.11% 46.76% 54.99% -3.66%
operating room consumables
Medical consumables - infection
4,735,248,687.65 2,441,987,072.10 48.48% 99.14% 123.98% -5.71%
prevention products
Medical consumables - health & 268,849,070.13 160,887,989.85 40.16% 34.95% 73.75% -13.36%
42
2022 Annual Report
personal care products
Medical consumables - other
183,042,470.35 132,447,124.66 27.64% / / /
products
By regions
By sales modes
Reasons for change of statistical caliber
With the expansion of the Company's business scope, the product categories have become more diversified. In this report, the
Company reclassified the product categories according to application scenarios, and adjusted the year-on-year data based on
the same caliber.
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
Year-on-
Year-on- Year-on-
year
year year
Gross increase/d
increase/d increase/d
Operating income Operating costs profit ecrease of
ecrease of ecrease of
margin gross
operating operating
profit
income cost
margin
By industries
Medical consumables 7,202,766,247.84 3,996,133,140.98 44.52% 83.65% 94.09% -2.98%
Healthy consumer goods 4,054,985,562.16 1,914,013,438.24 52.80% 0.02% -1.15% 0.56%
By products
Medical consumables - infection
4,735,248,687.65 2,441,987,072.10 48.48% 99.14% 123.98% -5.71%
prevention products
Healthy consumer goods - wet
1,155,141,187.50 585,437,456.89 49.32% 1.32% 1.05% 0.14%
and dry cotton tissues
By regions
Domestic 10,044,710,561.08 5,225,576,005.36 47.98% 58.34% 64.01% -1.80%
Abroad 1,306,620,984.00 747,224,811.93 42.81% -22.85% -11.27% -7.47%
If the statistical caliber of the Company's primary business data is adjusted in the reporting period, the Company shall follow
the primary business data in the past year changed by the caliber at the end of the reporting period
Applicable √ Not applicable
Whether the Company has sales terminals in brick-and-mortar stores
√ Yes No
Distribution of brick-and-mortar stores
Number of
Number of new
stores closed at
Types of Number of stores during Reasons for store
Area of stores the end of the Brands involved
stores stores the reporting closings
reporting
period
period
Voluntarily store
Direct-sale closing because of Consumer goods
314 111,393 39 47
stores expiration of the stores
contract or subjective
43
wishes
Franchises 26 5,913 6 3
Note: 50 stores were closed at the end of the reporting period, namely, 25 stores for Purcotton, 15 stores for Purunderwear and 10
stores for PureH2B.
Total area and performances of direct-sale stores
Average year-
on-year
Operating income
Levels of Number of Same period increase/decrea
Total area in 2022 ('0,000 Reasons
areas stores last year se in
yuan)
performance of
stores
300m2 or less 130 28,622.15 34,611.27 38,255.92 -9.53%
300-500m2 85 31,494.59 31,344.82 34,344.48 -8.73%
500-800m2 45 27,786.19 21,053.33 22,809.54 -7.70%
800m or 2
14 13,292.48 8,056.85 8,442.06 -4.56%
more
Significant drop in store
traffic, store closures, lower
Total 274 101,195.41 95,066.26 103,852.01 -8.46%
logistics efficiency due to
public health events
Note: The above stores are Purcotton's stores opened for more than 12 months as of December 31, 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 Income
Average performance
S/N Name of stores Opening date Operating income (yuan)
of the store
1 First October 25, 2017 13,486,774.07 33,399.64
2 Second August 6, 2012 10,976,200.41 18,769.47
3 Third September 19, 2014 9,909,370.81 13,177.35
4 Fourth January 18, 2018 9,889,774.79 7,419.19
5 Fifth November 11, 2017 9,255,081.79 14,227.64
Total 53,517,201.88 14,370.54
New stores of listed companies
√ Yes No
Busin Property Numb
Name of Address Opening Contract area Investment Busines
Product Category ess ownership er of
stores of stores time (m2) amount (yuan) s model
type status stores
Direct-
Direct-
sale stores North Healthy Purcotton
2022 1,694.96 15,070,595.23 Retail sale 7
of China consumer goods leasing
stores
Purcotton
Direct-
Direct-
sale stores East Healthy Purcotton
2022 1,460.78 10,106,474.33 Retail sale 6
of China consumer goods leasing
stores
Purcotton
44
2022 Annual Report
(Continued)
Busin Property Numb
Name of Address Opening Contract Investment Busines
Product Category ess ownership er of
stores of stores time area (m2) amount (yuan) s model
type status stores
Direct-
Direct-
sale stores South Healthy Purcotton
2022 1,400.70 10,540,034.07 Retail sale 6
of China consumer goods leasing
stores
Purcotton
Direct-
Direct-
sale stores West Healthy Purcotton
2022 1,857.02 14,016,787.56 Retail sale 7
of China consumer goods leasing
stores
Purcotton
Direct-
Direct-
sale stores Central Healthy Purcotton
2022 3602.08 23,672,260.89 Retail sale 13
of China consumer goods leasing
stores
Purcotton
Purcotton
South Healthy Franchi Purcotton
franchisee 2022 251.00 601,331.06 Retail 1
China consumer goods sees franchisees
s
Purcotton
West Healthy Franchi Purcotton
franchisee 2022 848.53 2,734,366.97 Retail 4
China consumer goods sees franchisees
s
Purcotton
Central Healthy Franchi Purcotton
franchisee 2022 297.00 613,550.31 Retail 1
China consumer goods sees franchisees
s
Total 11,412.07 77,355,400.42 45
Note: Investment amount includes: stores' inventory balance, renovation costs, renovation deposit, 6-month lease and personnel costs
at the end of the reporting period.
Does the Company disclose the information on the Top 5 franchises
Yes √ No
(3) Whether the Company's physical sales revenue is greater than the labor service revenue
√ Yes No
Year-on-year
Classification of sectors Item Unit 2022 2021 increase/decr
ease
Sales
ton 7,173.86 5,919.75 21.19%
volume
Medical consumables - gauze
Output ton 6,957.17 6,039.90 15.19%
Inventory ton 779.24 995.93 -21.76%
Sales
ton 3,066.79 3,899.88 -21.36%
volume
Medical consumables - cotton
Output ton 3,220.10 3,989.77 -19.29%
Inventory ton 795.22 641.92 23.88%
Sales
'0,000 pieces 596,641.63 337,060.18 77.01%
volume
Medical consumables - masks
Output '0,000 pieces 606,491.33 368,638.00 64.52%
Inventory '0,000 pieces 70,141.19 60,291.48 16.34%
45
(Continued)
Year-on-year
Classification of sectors Item Unit 2022 2021 increase/decr
ease
Sales
'0,000 suits 4,832.64 1,476.6 227.28%
Medical consumables - volume
protective clothing Output '0,000 suits 4,975.97 1,485.69 234.93%
Inventory '0,000 suits 210.94 67.61 211.99%
Sales
'0,000 suits 1,525.87 1,380.46 10.53%
Medical consumables - volume
surgical gowns Output '0,000 suits 1,489.54 1,389.60 7.19%
Inventory '0,000 suits 93.15 129.48 -28.06%
Sales
Medical consumables - pure ton 5,460.52 4,785.61 14.10%
volume
cotton spunlace non-woven
Output ton 5,438.90 4,780.12 13.78%
fabrics
Inventory ton 205.95 227.57 -9.50%
Sales
'0,000 kits 17,751.57 17,903.66 -0.85%
Healthy consumer goods - volume
cotton tissues Output '0,000 kits 16,558.21 15,682.89 5.58%
Inventory '0,000 kits 2,253.98 3,447.34 -34.62%
Sales
'0,000 pieces 69,709.59 68,805.68 1.31%
Healthy consumer goods - volume
sanitary pads Output '0,000 pieces 71,338.37 65,430.61 9.03%
Inventory '0,000 pieces 19,255.54 17,626.76 9.24%
Reasons for a YoY change of 30% or above in relevant data
√ Applicable Not applicable
① The increase in sales and production of medical consumables - masks was mainly due to the rise in demand for masks
because of public health events in 2022; ② The increase in sales, production and inventory of medical consumables -
protective clothing was mainly due to the rise in demand because of public health events, leading to an increase in production,
sales and inventory; ③ The decrease in production and inventory of medical consumables - cotton was mainly due to the
decrease in sales orders; ④ The decrease in inventory of healthy consumer goods - cotton tissues was mainly due to the
continuous decline in cotton prices since the second half of 2022. To control the inventory cost, reduce the risk of declining
cotton prices, accelerate capital turnover, the production capacity was adjusted to consume the inventory at the beginning of
the reporting period and reduce the inventory at the end.
(4) Performance of significant sales contracts and significant procurement contracts entered into by the Company
up to the current reporting period
Applicable √ Not applicable
46
2022 Annual Report
(5) Composition of operating costs
Classification of sectors and products
Unit: yuan
2022 2021
Year-on-
Classification of Proportion year
Item Proportion
sectors in
Amount Amount in operating increase/d
operating ecrease
costs
costs
Medical
Direct material cost 2,967,805,720.35 74.27% 1,553,548,646.80 75.45% 92.35%
consumables
Medical
Direct labor cost 566,440,550.52 14.17% 277,697,042.31 13.49% 95.46%
consumables
Medical
Manufacturing cost 461,886,870.12 11.56% 227,705,543.44 11.06% 104.24%
consumables
Subtotal of medical
3,996,133,140.99 100.00% 2,058,951,232.55 100.00% 94.09%
consumables
Healthy consumer
Direct material cost 1,450,783,972.93 75.80% 1,304,267,858.71 67.36% 10.03%
goods
Healthy consumer
Direct labor cost 189,156,042.76 9.88% 249,417,648.37 12.88% -16.68%
goods
Healthy consumer
Manufacturing cost 274,073,422.55 14.32% 382,661,654.23 19.76% -29.15%
goods
Healthy consumer
1,914,013,438.24 100.00% 1,936,347,161.31 100.00% -1.15%
goods
Other businesses 62,654,238.06 1.05% 32,948,252.31 0.82% 90.16%
Total 5,972,800,817.29 100.00% 4,028,246,646.17 100.00% 48.27%
Unit: yuan
2022 2021
Year-on-
Classification of Proportion year
Item Proportion
products in
Amount Amount in operating increase/d
operating ecrease
costs
costs
Traditional wound
Medical
care and wound 721,435,653.90 12.08% 628,614,229.19 15.61% 14.77%
consumables
dressing products
Medical Advanced wound
214,388,590.22 3.59% 38,895,080.43 0.97% 451.20%
consumables dressing products
Medical Operating room
324,986,710.26 5.44% 209,676,565.58 5.21% 54.99%
consumables consumables
Medical Infection prevention
2,441,987,072.10 40.88% 1,089,169,415.21 27.04% 124.21%
consumables products
Medical Health & personal
160,887,989.85 2.69% 92,595,942.18 2.30% 73.75%
consumables care products
Medical
Other products 132,447,124.66 2.22% 0.00 0.00% 100.00%
consumables
Subtotal of medical
3,996,133,140.99 66.90% 2,058,951,232.59 51.11% 94.09%
consumables
47
(Continued)
2022 2021
Year-on-
Classification of Proportion year
Item Proportion
products in
Amount Amount in operating increase/d
operating ecrease
costs
costs
Healthy consumer Wet and dry
585,437,456.89 9.80% 579,380,996.20 14.38% 1.05%
goods cotton tissues
Healthy consumer
Sanitary pads 208,924,450.61 3.50% 196,483,663.31 4.88% 6.33%
goods
Healthy consumer Other non-woven
269,200,370.42 4.51% 272,665,609.95 6.77% -1.27%
goods products
Healthy consumer Baby clothing
399,427,311.55 6.69% 422,346,957.04 10.48% -5.43%
goods and supplies
Healthy consumer
Adult clothing 283,748,829.92 4.75% 285,951,444.13 7.10% -0.77%
goods
Healthy consumer Other woven
167,275,018.85 2.80% 179,518,490.68 4.46% -6.82%
goods products
Healthy consumer
1,914,013,438.24 32.05% 1,936,347,161.31 48.07% -1.15%
goods
Subtotal
Other businesses 62,654,238.06 1.05% 32,948,252.31 0.82% 90.16%
Total 5,972,800,817.29 100.00% 4,028,246,646.21 100.00% 48.27%
Note: None
(6) Whether the consolidation scope changes in the reporting period
√ Yes No
For details, see Section X. Financial Statements “Note 9. Interests in other entities”.
(7) Major changes or adjustments of business, products or services of the Company during the reporting period
Applicable √ Not applicable
(8) Major customers and major suppliers
The Company's major customers
Total sales amount of the Top 5 customers (Rmb) 1,526,443,834.48
The proportion of Top 5 customers' combined sales amount in total annual sales 13.45%
The proportion of related party sales in the total annual sales of the Top 5
0.00%
customers
48
2022 Annual Report
Top 5 key accounts of the Company
Proportion in total annual
S/N Name of customer Sales (Rmb)
sales
1 First 643,525,748.95 5.67%
2 Second 349,925,422.12 3.08%
3 Third 200,560,115.56 1.77%
4 Fourth 199,259,087.05 1.76%
5 Fifth 133,173,460.80 1.17%
Total -- 1,526,443,834.48 13.45%
Other descriptions of major customers
Applicable √ Not applicable
The Company's major suppliers
The total purchase amount of the Top 5 suppliers (Rmb) 1,081,466,989.77
The proportion of Top 5 suppliers' combined purchase amount in total annual purchase 22.59%
The proportion of related party purchases in the total annual purchases of the Top 5 suppliers 0.00%
Information of Top 5 suppliers of the Company
Proportion in total annual
S/N Name of supplier Purchase amount (Rmb)
purchases
1 First 460,689,750.42 9.62%
2 Second 290,238,365.78 6.06%
3 Third 166,559,747.13 3.48%
4 Fourth 88,601,159.02 1.85%
5 Fifth 75,377,967.42 1.57%
Total -- 1,081,466,989.77 22.59%
Other descriptions of major supplier
Applicable √ Not applicable
49
3. Cost
Unit: yuan
Year-on-
year
2022 2021 Description of significant changes
increase/de
crease
Selling
2,050,176,407.46 1,989,167,789.56 3.07% No major changes
expenses
Resulting mainly from
1. the increase in employee compensation;
2. the addition of other administrative
Administrativ
633,614,634.95 454,389,948.90 39.44% expenses of the acquired company;
e expenses
3. increase in amortization due to the asset
valuation appreciation of the acquired
company
Financial
(122,574,572.07) (107,499,361.11) 14.02% No major changes
expenses
Resulting mainly from the increase in R&D
R&D employee compensation, investment in R&D
487,583,652.11 298,162,366.16 63.53%
expenses materials and the addition of R&D expenses
of the acquired company
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.
Composition of selling expenses:
Year-on-
year
Selling expenses 2022 2021 Description of significant changes
increase/dec
rease
Employee
649,605,092.33 535,320,245.23 21.35% No major changes
compensation
Travel expenses 12,266,843.44 14,589,718.50 -15.92% No major changes
Office
Resulting mainly from the increase in
communication 17,665,180.74 12,577,824.48 40.45%
network service fees
costs
Sales commission 213,988,639.15 222,716,753.83 -3.92% No major changes
Insurance
5,076,079.44 5,302,498.97 -4.27% No major changes
premiums
Resulting mainly from the increase in
Depreciation and
82,408,480.44 52,193,907.26 57.89% renovation losses due to upgrades in healthy
amortization
consumer goods stores
Advertising and
promotion 600,156,113.14 692,445,882.66 -13.33% No major changes
expenses
Lease and
property
152,186,000.56 152,728,211.40 -0.36% No major changes
management
expenses
Material Resulting mainly from the increase in the
29,027,854.76 5,212,855.45 456.85%
consumption consumption of auxiliary materials
Water/electricity
12,817,521.54 11,632,395.90 10.19% No major changes
fee
Service fees 7,485,101.27 6,522,845.03 14.75% No major changes
Depreciation of 188,658,565.69 191,875,674.76 -1.68% No major changes
50
2022 Annual Report
Right-of-use
assets
Others 78,834,934.96 86,048,976.09 -8.38% No major changes
Total 2,050,176,407.46 1,989,167,789.56 3.07% No major changes
4. Other information required by industry disclosure guidelines
The Company needs to comply with the disclosure requirements of the “Textile and Apparel Business” stipulated in the No. 3
Guideline of Shenzhen Stock Exchange for Self-regulatory of Listed Companies - Industry Information Disclosure.
(1) Production capacity
The Company's production capacity
Current reporting period Same period last year
More than 10% YoY change in production capacity utilization rate
√ Yes No
Percentag
Product Producti
e of
ion on Change
change in
Business Product Production capabili Production capabilit reason
Unit Output Output productio
category Category capacity ty capacity y descript
n capacity
utilizati utilizati ion
utilization
on rate on rate
rate
No
Gauze ton 10,395.55 7,055.55 67.87% 9486.75 6690.26 70.52% -2.65% major
changes
No
Cotton ton 2,745.60 2,378.60 86.63% 2,745.60 2,197.40 80.03% 6.60% major
changes
No
'0,000
Mask 726,709.71 590,693.27 81.28% 467,322.00 366,435.00 78.41% 2.87% major
pieces
changes
Medical No
consumabl Protective '0,000 4,992.00 4,966.00 99.48% 1,386.00 1,367.08 98.63% 0.85% major
es clothing suits
changes
No
Surgical '0,000
1,664.00 1,448.15 87.03% 1,850.00 1,764.00 95.35% -8.32% major
gowns suits
changes
Pure
cotton
No
spunlace
ton 54,329.97 29,922.41 55.08% 48,018.43 25,602.88 53.32% 1.76% major
non-
changes
woven
fabric
No
Cotton '0,000
34,794.86 16,558.21 47.59% 32,067.08 15,682.89 48.91% -1.32% major
Healthy tissues kits
changes
consumer
goods No
Sanitary '0,000
50,079.74 44,857.87 89.57% 50,079.74 40,403.97 80.68% 8.89% major
pads pieces
changes
Note: The capacity and production in this table are based on the statistics of self-produced capacity and output, while the output in
the Sales-output Ratio Table includes self-produced and purchased outputs, where the output of sanitary pads under “healthy
consumer goods” is lower than that in the Sales-output Ratio Table, which is mainly due to the outsourced processing of some
models of sanitary pads. Additionally, the output of 100% cotton spunlace nonwoven fabrics is the total output, including the output
51
for direct external sales and that for self-consumption.
Is there overseas production capacity?
Yes √ No
(2) Sales model and channels
Sales channels and actual operation of products
The Company's healthy consumer goods are involved in the textile and apparel industries. The sales channels for healthy
consumer goods include online sales, offline stores, supermarkets, key accounts.
Unit: yuan
Year-on-year Year-on-year Year-on-year
Gross
Sales increase/decreas increase/decreas increase/decreas
Operating income Operating costs profit
channels e of operating e of operating e of gross profit
margin
income (%) cost (%) margin (%)
Online sales 2,565,052,802.59 1,322,606,097.28 48.44% 0.93% -0.31% 0.65%
Offline
1,184,292,470.95 467,012,543.64 60.57% -4.10% -6.83% 1.16%
stores
Supermarke
231,766,054.19 87,028,653.85 62.45% 14.15% 23.89% -2.95%
t channels
Key
73,874,234.43 37,366,143.48 49.42% -1.35% -1.95% 0.31%
accounts
Total 4,054,985,562.16 1,914,013,438.24 52.80% 0.02% -1.15% 0.56%
Reason for changes: No significant change
(3) Franchising and distribution
The proportion of franchisees' and distributors' sales revenues exceeds 30%
Yes √ No
Top 5 franchisees
A related party or Level of
S/N Name of franchisee Time of cooperation Total sales (yuan)
not franchisee
1 First November 9, 2020 No 4,626,335.28 Primary
2 Second June 10, 2021 No 2,868,660.97 Primary
3 Third June 12, 2020 No 2,433,737.84 Primary
4 Fourth June 11, 2021 No 2,427,854.82 Primary
5 Fifth June 26, 2021 No 2,200,046.11 Primary
Total -- -- -- 14,556,635.03 --
Top 5 distributors
A related party or
S/N Name of franchisee Time of cooperation Total sales (yuan)
not
52
2022 Annual Report
(4) Online sales
The proportion of online sales in sales revenues exceeds more than 30%
Yes √ No
Is there a self-built sales platform?
√ Yes No
Operation starting time January 6, 2014
Number of registered users 9,746,833
The average number of monthly active users 1,984,000
Does it work with a third-party sales platform?
√ Yes No
Unit: yuan
Name of platform Transaction amount during the reporting period Return rate
Taobao (healthy consumer goods) 1,287,888,521.62 2.12%
Opening or closing online sales channels by the Company
Applicable √ Not applicable
Description of the impact on the current and future development of the Company
(5) Agency operation
Does it adopt agency operation?
Yes √ No
(6) Inventory
Inventory
YoY
Inventory
Main Inventory increase/decrease
turnover in Inventory amount Reasons
products aging in inventory
days
balance
Raw
materials
Resulting mainly from the
and goods
387,842,479.28 142,197,768.93 increase in cotton and goods
processed by
processed by the commission
the
commission
Resulting mainly from the
Work in
163,543,012.72 (4,849,227.33) decrease in semi-finished products
process
in process
Merchandise Resulting mainly from the
930,274,287.35 (225,997,610.26)
inventory decrease in merchandise inventory
Semi- Resulting mainly from the
finished 61,390,112.12 44,546,478.24 increase in inventories shipped but
products not eligible for revenue
53
shipped in recognition
transit
Low-priced
Resulting mainly from the
and easily 15,873,681.90 5,649,119.80
increase in low-consumable items
worn articles
Resulting mainly from the
Total 108 1,558,923,573.37 (38,453,470.62)
decrease in merchandise inventory
Provision accrual for inventory depreciation
Amount decreased in current
Amount increased in current period
Beginning period
Item Closing Balance
balance Reversal or write-
Accrual Others Others
back
Raw
5,117,956.28 56,175,356.31 6,383,009.45 12,844,856.54 0.00 54,831,465.50
materials
Work in
4,599,718.11 14,094,137.36 299,165.66 9,808,171.36 0.00 9,184,849.77
process
Merchandise
100,692,345.17 284,993,058.41 9,585,323.75 136,478,084.23 112,262.36 258,680,380.74
inventory
Semi-
finished
products 3,451,151.74 3,320,922.96 0.00 130,228.78
shipped in
transit
Low-priced
and easily 1,852.99 1,519,534.71 161,351.99 90,751.34 0.00 1,591,988.35
worn articles
Total 110,411,872.55 356,782,086.79 19,880,002.59 162,542,786.43 112,262.36 324,418,913.14
Inventory information of end channels such as franchises or distributors
The Purcotton franchisees, selling the Company's healthy consumer goods, had 26 stores. Its business model requires
franchisees to be responsible for store construction and daily operation while Purcotton provides goods and supply chain
supports. After the sales of stores, Purcotton and the franchisees obtain their respective profits through sharing; the franchise
store inventory ownership belongs to Purcotton. As of December 31, 2022, the inventory balance were 16.22 million yuan, or
620,000 yuan on average in each store.
(7) Brand building
Whether the company is involved in the production and sales of branded clothing, apparel and home textile products
√ Yes No
Private brand
Main
Tradem Main
Brand Target market Level of
ark product Features Main product price bands
name customers territor cities
name types
y
Made of 100% high-
quality natural cotton Second-
All-age
Purcotto Purcotto Cotton without fluorescent Nation and third-
customer 5-30 yuan/pack (100 pieces)
n n tissues whitening agent; mild and wide tier cities
base
non-irritating; meeting the and above
daily needs of consumers
Purcotto Nice Sanitary 100% cotton surface layer The female 1.99-3.99 yuan/piece Nation Second-
54
2022 Annual Report
n Princess pads (surface layer, spacer, population wide and third-
sanitary wing surface at tier cities
layer) appropriate and above
ages
100% cotton surface
layer; unique in the
Second-
market; made from
Purcotto Cotton Parental Nation and third-
BBNice natural cotton; 2mm ultra- 3.32-4.14 yuan/piece
n diapers population wide tier cities
thin core with 28 times
and above
ultra-high absorption
capacity
Second-
100% cotton material; soft All-age
Purcotto Purcotto Wet Nation and third-
and non-slippery; gentle customer 20-40 yuan/pack
n n tissues wide tier cities
and non-irritating base
and above
100% cotton material Expecting
Second-
Baby without fluorescent nor mothers,
Purcotto Purcotto Nation and third-
products/ formaldehyde; the unique newborns, 100-500 yuan/piece
n n wide tier cities
clothing gauze fabric provides babies,
and above
more comfortable care toddlers
Outwear: 150-800
Adult
100% cotton material; yuan/piece;
clothing:
high-quality cotton Home wear: 200-800
Adult adult men Second-
without fluorescent nor yuan/piece;
Purcotto Purcotto clothing/i and women Nation and third-
formaldehyde; soft to the Thermal underwear: 200-
n n ntimate of all ages; wide tier cities
touch; the unique gauze 600 yuan/piece;
apparel Intimate and above
fabrics to provide more Underwear: 48-128
apparel: all
comfortable care yuan/piece (pack);
age groups
Socks: 20-40 yuan/pair
Expecting Children's bedding: 268-
100% cotton material;
mothers, 1,698 yuan/set;
high-quality cotton
newborns, Toddlers' bedding: 198- Second-
without fluorescent nor
Purcotto Purcotto Bedding, babies, 1,098 yuan/set Nation and third-
formaldehyde; soft to the
n n toiletries toddlers and Adult bedding: 268-3,198 wide tier cities
touch; the unique gauze
adult yuan/set; and above
fabrics to provide more
customer Bathroom products: 38-398
comfortable care
base yuan/piece
Partner brands
Coop
Main Brand and Coop
Main Target Main eratio
Brand Trademar Featu product Level of trademark Partner eratio
product custom market n
name k name res price cities rights name n
types ers territory perio
bands ownership mode
d
55
Licensed brand
Main Exclusi
Main Target Main
Brand Trademar product Level of License ve
product Features custo market Licensor
name k name price cities period license
types mers territory
bands or not
Party A:
Koni
The product Infants Culture
Purcotton, Purcotton is made from and (Beijing)
China , China Baby 100% cotton young Second- Co., Ltd. 2021.9.15
198-458
Aerospace' Aerospac clothing material and childre Nationw and third- Party B: -
yuan No
s “Twelve e and designed n ide tier cities Hangzhou 2023.10.1
/piece
Heavenly modeling supplies with China custo and above Qianxi 4
Palace” figures Aerospace mer Culture
image group Communica
tion Co.,
Ltd.
The product
is made from
Purcotton Cotton
100% cotton All- Shanghai
, tissues, Second-
material and age 21.8-298 Character
Purcotton, Ultraman wet Nationw and third- 2021.9.1-
designed custo yuan/pie License No
Ultraman modeling tissues, ide tier cities 2024.1.31
with mer ce Administrat
character bath and above
Ultraman base ive Co,.Ltd.
s towels
cartoon
image
Marketing and operation of each brand during the reporting period
Please refer to the “1. Overview” in “IV. Analysis of Main Business” of “Section 3 Management Discussion and Analysis”
for details.
Cases involved in trademark ownership disputes
Applicable √ Not applicable
(8) Others
Whether the Company is engaged in apparel design-related business
√ Yes No
The number of fashion designers in The number of contracted fashion
33 1
the Company designers
The operation of the built designer
PLM syetem, 3D design platform and digital color tool Coloro Creative Intelligence
platform
Did the company hold an order meeting?
Yes √ No
56
2022 Annual Report
5. R&D expenses
√ Applicable Not applicable
Name of major Project Expected impacts on the
Project purpose Objectives
R&D projects progress Company
The pioneered cotton sunscreen
products, featured with a super Use cotton to replace
R&D of high- Improve the defects of
sunscreen effect of UPF50+, chemical fiber to improve the
elastic sunscreen traditional sunscreen
quality of outdoor clothing,
“breathable” pure clothing, which is stuffy and Launched are made of absorbent and
breathable cotton material, leading the technological
cotton fabrics and not breathable, and make it
which is thinner, lighter and upgrading and development
product more comfortable.
more comfortable. of cotton products
Develop functional cotton
R&D of outdoor products with new
microencapsulated To relieve the summer heat, Develop summer cotton technology to improve
antibacterial the cool fabrics and
Launched products with a natural cool product performance and
cotton product products bring people a cool feeling and antibacterial enhance the competitive
with natural “ice” wearing experience. function. advantage of the Company's
feeling products
Analyze the microfiber
Analysis of Reinforce Purcotton's microplastics generated from
microplastic philosophy of advocating using similar cotton and Strengthen brand values,
release from sustainable branding, and chemical fiber materials emphasizing Purcotton's
Closed
textile materials strengthen the guidance of products through scientific philosophy of advocating
and investigation consumers' awareness of tests, and reinforce Purcotton's sustainable branding.
of its impacts deplasticization. philosophy of advocating
sustainable branding.
The total amount of
Assess the greenhouse gas greenhouse gas emissions of
emissions of core cotton products can be quantitatively
Project outcomes will produce
products by identifying and calculated through carbon
a carbon footprint certification
quantifying the energy footprint certification,
Carbon footprint report and label for each
consumption, material highlighting improvement
research and product, and consumers may
consumption and waste Closed priorities in the product's
application of core check the carbon footprint
emissions associated with production process, providing
cotton products information in real-time by
the assessed objects, basis and direction for
scanning the QR code tag on
providing a basis and sustainable product
the product.
direction for sustainable improvement, and playing a
product development. positive role in promoting
product and brand values.
When selecting materials for
Development of
the fall and winter thermal Enhance the added value of
ginger and spicy Develop fall and winter intimate apparel series, cotton products, increase the variety
fiber cotton intimate thermal apparel Launched fabrics are chosen for of fall and winter products,
fabrics with products to withstand the comfortable, healthy, and and improve their market
antibacterial and cold environmentally friendly while competitiveness.
thermal properties
keeping warm.
Enhance the Company's core
Develop environmentally- technologies, drive green,
Ensure the high protective
friendly biodegradable resource-saving development
Biodegradable performance of masks while
masks to protect the earth Launched of the Company's core
masks keeping the biodegradation rate
and reduce environmental product categories, and make
of masks ≥ 95%;
pollution the Company's masks more
influential
Ensure the high protection
Ultra-breathable Develop ultra-breathable performance of masks while Expand mask categories and
flat masks to enhance the Launched enhance their market
flat masks improving the breathability to
comfort of wearing enhance the comfort of wearing competitiveness
Low-resistance Develop N95 protective Ensure the high protection
Launched Expand mask categories and
N95 protective masks with low breathing performance of masks while
57
masks resistance to enhance the improving the breathability of enhance their market
comfort of long-time N95 protective masks and competitiveness
wearing enhancing the comfort of
wearing
Improve the moisture
Develop high moisture Upgrade the Company's core
High moisture permeability of protective
permeability protective technologies while enhancing
permeability R&D clothing products to improve
clothing to enhance the the market competitiveness of
protective clothing comfort of wearing the comfort of long-time
protective clothing products
wearing
Develop antibacterial and
Anti-bacterial and antiviral surgical and N95 Mass Upgrade the Company's core
Endow mask products with
anti-viral surgical protective masks to enhance productio antibacterial and antiviral technologies while enhancing
and N95 the safety of protective n the market competitiveness of
capabilities to make them safer
protective masks products further mask products
Develop 3D perforated PC Meet industry demand, enrich
R&D and materials for use in the Mass Improve the aesthetics and
product categories, and
application of 3D surface layer of sanitary productio comfort of sanitary products, enhance the core
perforated PC products to improve their n and diversify product
competitiveness of PC
materials comfort and aesthetics categories
materials
Upgrade the Company's core
Upgrading of dry Develop dryer PC material Use PC material for the top
Mass technologies further to
PC material for for the top layer of diapers layer of diapers to enhance the
productio enhance the market
the surface layer to improve the comfort of continuous dryness and
n competitiveness of cotton
of diapers wearing comfort
diaper products
Research on
Upgrade the Company's core
environmental Continuously improve the
Improve the utilization rate technologies, and promote the
protection, energy recycling rate of de-bleaching
of the recycled de-bleaching green, environmentally-
saving and R&D liquid, lower the temperature
liquid and reduce energy friendly and resource-saving
emission reduction of de-bleaching to reduce
consumption development of the
of non-woven energy consumption
Company's core process
materials
Expand the application of
independently-developed
silicone gel technology to
Develop a tape with mild Mass Achieve painless peeling, no
R&D of medical replace the traditional acrylic
adhesion for the care of productio residual adhesive and a
silicone tapes submineral tapes, thus
people with sensitive skin n repeatable adhesive effect
enhancing the added value of
products and improving
profitability
Develop a foam dressing
R&D of highly Mass Improve product performance
product with high Improve product market share
breathable foam productio indicators and market sales at
breathability to improve and increase sales
dressing products n home and abroad
product performance
R&D personnel of the Company
Proportion of
2022 2021
change
Number of R&D personnel (people) 1,588 1,386 14.57%
Proportion of R&D personnel 10.63% 11.47% -0.84%
Educational background of R&D
personnel
Bachelor 413 429 -3.73%
Master 102 59 72.88%
Age composition of R&D personnel
Under 30 316 396 -20.20%
30 - 40 732 649 12.79%
58
2022 Annual Report
The amount of R&D investment and the proportion of operating income in the past three years
2022 2021 2020
R&D investment amount (RMB) 487,583,652.11 298,162,366.16 411,383,173.80
The proportion of R&D investment in
4.30% 3.71% 3.28%
operating income
Capitalized amount of R&D expenditure
0.00 0.00 0.00
(RMB)
The proportion of capitalized R&D
0.00% 0.00% 0.00%
expenditure in R&D investment
The proportion of capitalized R&D
0.00% 0.00% 0.00%
expenditure in current net prot
Reasons for and effects of significant changes in the composition of the Company's R&D personnel
Applicable √ Not applicable
Reasons for significant changes in the proportion of total R&D investment in operating income compared to the previous
year
Applicable √ Not applicable
Reasons for significant changes in capitalization rate of R&D investment and its reasonable explanation
Applicable √ Not applicable
The Company needs to comply with the “Medical Device Business” disclosure requirements in the No. 4 Guideline of
Shenzhen Stock Exchange for Self-regulatory of Listed Companies - Information Disclosure by Growth Enterprises.
Information on medical device products
√ Applicable Not applicable
(I) Statistics on the number of registration certificates for medical devices
Statistics on the number of domestic product registration certificate
Registration
Opening balance Number of additions Number of failures Closing balance
Categories
Class I 83 27 0 110
Category II 110 16 0 126
Category III 21 1 0 22
Total 214 44 0 258
Statistics on the number of foreign product registration certificate
Registration
Opening balance Number of additions Number of failures Closing balance
Categories
Abroad 42 19 0 61
Note: The statistical caliber of new registration certificates is that of new certificates in the Company's consolidated financial
statements at the end of 2022.
59
(II) Newly obtained certificates of medical devices in 2022
1. Domestic
Regist
Product record
Name of ration Date of
S/N Certificate owner number/registrat For clinical purpose Validity
certificates catego issuance
ion number
ries
It is used to block body
Guangdong &
fluids, blood splashes
Medical Shenzhen
Catego Winner Medical or spills in the December 20,
1 isolation Medical Device /
ry I Co., Ltd. examination and 2022
masks Record No.
treatment at medical
20220113
institutions.
Guangdong &
Disposable It is used for sample
Shenzhen
virus Catego Winner Medical collection,
2 Medical Device July 8, 2022 /
sampling ry I Co., Ltd. transportation and
Record No.
tube storage.
20221039
It is used by medical
staff in medical
Guangdong & institutions to prevent
Medical Shenzhen exposure to potentially
Catego Winner Medical October 25,
3 isolation Medical Device infectious patient /
ry I Co., Ltd. 2022
shoe covers Record No. blood, body fluids,
20221491 secretions, etc., and
acts as a barrier and
protection.
It is used as an aid in
improving pathological
Hubei Medical
Silicone gel skin scars and
Winner Medical Device
scar Catego preventing the January 4,
4 (Huanggang) Co., Registration January 5, 2022
treatment ry II formation of 2027
Ltd. Certificate No.
strips pathological skin scars,
20222143585
but not for unhealed
wounds
It is used as an aid in
improving pathological
Hubei Medical
skin scars and
Winner Medical Device
Silicone Catego preventing the
5 (Huanggang) Co., Registration April 15, 2022 April 14, 2027
scar gel ry II formation of
Ltd. Certificate No.
pathological skin scars,
20222143749
but not for unhealed
wounds
Hubei
It provides binding
Huanggang
Tubular Catego Winner Medical force to wound
6 (Huanggang) Co., Medical Device April 24, 2022 /
Bandage ry I dressings to achieve
Ltd. Record No.
dressing and fixation.
20220019
Hubei
Winner Medical Huanggang It is used for skin and
Cotton Catego
7 (Huanggang) Co., Medical Device wound cleaning June 2, 2022 /
tablets ry I
Ltd. Record No. treatment.
20220031
Hubei
It is used to provide
Winner Medical Huanggang
Cotton Catego binding force to wound
8 Medical Device June 15, 2022 /
bandage ry I (Huanggang) Co., dressings to achieve
Ltd. Record No.
dressing and fixation.
20220035
9 Medical Catego Winner Medical Hubei It is worn on the hands December 5, /
60
2022 Annual Report
film gloves ry I(Huanggang) Co., Huanggang of doctors to examine 2022
Ltd. Medical Device or palpate patients'
Record No. conditions.
20220056
Hubei Medical It is a disposable
Disposable
Winner Medical Device product for staff of
sterile-care Catego January 27, January 26,
10 (Chongyang) Co., Registration medical departments to
catheterizati ry II 2022 2027
Ltd. Certificate No. perform
on kit
20222143621 catheterization.
It is used for nursing
Disposable
Hubei Medical departments in
central
Winner Medical Device healthcare facilities to
venous Catego
11 (Chongyang) Co., Registration puncture central venous July 11, 2022 July 10, 2027
catheter ry II
Ltd. Certificate No. catheters placed
puncture
20222143842 through peripheral
care kit
veins.
Hubei Medical It is a disposable
Disposable Winner Medical Device product for staff in
Catego
12 isolation (Chongyang) Co., Registration medical units to July 6, 2022 July 5, 2027
ry II
gowns Ltd. Certificate No. perform general
20222143837 isolation.
It is used to cover the
surface of the patient's
body to reduce the
migration of the
infection source from
the non-surgical part of
the patient's skin to the
surgical part, and
prevent the patient's
Hubei Medical
post-operative wound
Disposable Winner Medical Device
Catego from getting infected,
13 surgical (Chongyang) Co., Registration July 8, 2022 July 7, 2027
ry II or to cover the
sheets Ltd. Certificate No.
instrument table,
20222143838
operating table and
display screen in the
operating room to avoid
the infection of the
patient's wound caused
by the surgeon touching
the instruments
mentioned above
during surgery.
It provides binding
Hubei Xianning
force to wound
Cotton Catego Winner Medical Medical Device
14 dressings or limbs to March 31, 2022 /
bandage ry I (Chongyang) Co., Record No.
Ltd. achieve dressing and
20220011
fixation.
It collects disposable
drainage of bodily
fluids (blood, gastric
Hubei Xianning fluid, etc.), secretions
Winner Medical
Drainage Catego Medical Device (sputum, flushing fluid, September 9,
15 (Chongyang) Co., /
bags ry I Record No. etc.) and human 2022
Ltd.
20220069 excretions from patients
in clinical departments
of hospitals and during
or after surgery.
Iodophor Hubei Medical It is used for
Catego Winner Medical March 31,
16 disinfectant Device disinfection of intact April 1, 2022
ry II (Jiayu) Co., Ltd. 2027
pads Registration skin before injection
61
Certificate No. and infusion.
20222143733
Hubei Medical
It is used for
Iodophor Device
Catego Winner Medical disinfection of intact March 31,
17 disinfectant Registration April 1, 2022
ry II (Jiayu) Co., Ltd. skin before injection 2027
cotton balls Certificate No.
and infusion.
20222143734
Hubei Xianning It is used for sample
Disposable Catego Winner Medical Medical Device collection,
18 April 1, 2022 /
sampler ry I (Jiayu) Co., Ltd. Record No. transportation and
20220012 storage.
It is used for first aid
Hubei Xianning and temporary dressing
Hydrogel Catego Winner Medical Medical Device of minor wounds,
19 April 22, 2022 /
band-aid ry I (Jiayu) Co., Ltd. Record No. abrasions, cuts and
20220023 other superficial
wounds.
Hubei Xianning
It is used for stoma
Stoma skin Catego Winner Medical Medical Device October 31,
20 cleaning, care and skin /
protectors ry I (Jiayu) Co., Ltd. Record No. 2022
care around the stoma.
20220077
It is used by medical
staff in medical
Hubei Jingmen institutions to prevent
Medical Winner Medical
Catego Medical Device exposure to potentially March 23,
21 isolation (Jingmen) Co., /
ry I Record No. infectious patient blood, 2022
shoe covers Ltd.
20220047 body fluids, secretions,
etc., and act as a barrier
and protection.
It is used for the basic
protection of medical
Hubei Medical
staff or relevant
Medical Winner Medical Device
Catego personnel and against
22 surgical (Tianmen) Co., Registration July 26, 2022 July 25, 2027
ry II the transmission of
masks Ltd. Certificate No.
body fluids and splashes
20222143862
during invasive
operations.
Hubei Wuhan
It is used for skin and
Cotton Catego Winner Medical Medical Device
23 wound cleaning May 5, 2022 /
tablets ry I (Wuhan) Co., Ltd. Record No.
treatment.
20220254
National
Disposable
Medical Device This product applies to
sterile-care Catego Winner Medical
24 Registration human injection after June 28, 2022 June 27, 2027
insulin ry III (Hunan) Co., Ltd.
Certificate No. aspiration of insulin.
syringe
20223140827
Hunan Medical
Disposable Device
Catego Winner Medical It applies to the clinical
25 sterile-care Registration April 2, 2022 April 1, 2027
ry II (Hunan) Co., Ltd. ENT for flushing.
flushers Certificate No.
20222140570
It is used for taking
Hunan Medical biological samples from
Disposable
Device natural cavities of
sterile-care Catego Winner Medical
26 Registration human body, such as August 5, 2022 August 4, 2027
sampling ry II (Hunan) Co., Ltd.
Certificate No.
nasal cavity, oral cavity,
swabs
20222221527 throat, vagina and
urethra.
Disposable Catego Winner Medical Hunan Medical It is used along with September 30, September 29,
27
inert gas- ry II (Hunan) Co., Ltd. Device disposable intravenous 2022 2027
62
2022 Annual Report
protected Registration blood collection
blood Certificate No. needles, applicable to
collection 20222221843 the clinical collection of
tubes blood samples in
medical institutions.
It is used along with
Disposable
Hunan Medical disposable intravenous
nitrogen-
Device blood collection
protected Catego Winner Medical September 30, September 29,
28 Registration needles, applicable to
blood ry II (Hunan) Co., Ltd. 2022 2027
Certificate No. the clinical collection of
collection
20222221844 blood samples in
tube
medical institutions.
Hunan
Changde It is used for the
Circumcisio Catego Winner Medical December 30,
29 Medical Device circumcision of the /
n rings ry I (Hunan) Co., Ltd. 2022
Record No. penile foreskin.
20220097
Zhejiang
Zhejiang It is used with absorbent
Silicone Medical Device
Catego Longterm Medical dressings for exudative
30 adhesive Registration June 9, 2022 June 8, 2027
ry II Technology Co., wounds on the body
dressing Certificate No.
Ltd. surface.
20222140282
Hydrocolloi Zhejiang It is used for covering
Zhejiang
d Medical Device wounds on the body
Catego Longterm Medical
31 polyurethan Registration surface, and absorbing July 29, 2022 July 28, 2027
ry II Technology Co.,
e foam Certificate No. exudate from non-
Ltd.
dressing 20222140351 chronic wounds.
Infant and Zhejiang It is used to protect and
Zhejiang
child Medical Device care for the traumatic
Catego Longterm Medical December 14, December 13,
32 umbilical Registration area of the umbilical
ry II Technology Co., 2022 2027
protection Certificate No. cord of infants and
Ltd.
patch 20222140482 children.
Zhejiang It is used for stoma
Zhejiang
Huzhou cleaning, care and
Catego Longterm Medical
33 Stoma belt Medical collection of excretions, July 15, 2022 /
ry I Technology Co.,
Device Record and skin care around the
Ltd.
No. 20220052 stoma.
Zhejiang It is used to provide
Zhejiang
Medical Huzhou binding force to wound
Catego Longterm Medical November 1,
34 stretch Medical dressings or limbs to /
ry I Technology Co., 2022
mesh hat Device Record achieve dressing and
Ltd.
No. 20220061 fixation.
Zhejiang
Zhejiang It is used to wrap the
Huzhou
First aid Catego Longterm Medical limbs of injured persons November 1,
35 Medical /
blanket ry I Technology Co., in the field to keep warm 2022
Device Record
Ltd. or insulate heat.
No. 20220062
Zhejiang
Zhejiang
Huzhou
Dressing Catego Longterm Medical It is used for shearing November 1,
36 Medical /
shears ry I Technology Co., instruments. 2022
Device Record
Ltd.
No. 20220063
Zhejiang
Zhejiang Doctors wear it on the
Medical Huzhou
Catego Longterm Medical hands or fingers to November 1,
37 examination Medical /
ry I Technology Co., examine or palpate 2022
gloves Device Record
Ltd. patients' conditions.
No. 20220064
Disposable Zhejiang Zhejiang It is used for clamping
Catego November 1,
38 dressing Longterm Medical Huzhou instruments and /
ry I 2022
forceps Technology Co., Medical dressings.
63
Ltd. Device Record
No. 20220065
Zhejiang It is used for local
Zhejiang
Huzhou cooling for fever
Medical ice Catego Longterm Medical November 1,
39 Medical patients. It is only used /
bags ry I Technology Co., 2022
Device Record for complete skin on
Ltd.
No. 20220066 body surface.
Zhejiang
Zhejiang
Fracture Huzhou It is used for external
Catego Longterm Medical November 1,
40 fixation Medical fixation of fracture or /
ry I Technology Co., 2022
splints Device Record soft tissue injury.
Ltd.
No. 20220067
Zhejiang
Zhejiang
Huzhou
Catego Longterm Medical It is used for the simple December 8,
41 First aid kit Medical /
ry I Technology Co., treatment of accidents. 2022
Device Record
Ltd.
No. 20220077
Zhejiang It is used for first aid
Zhejiang
Huzhou and temporary dressing
Waterproof Catego Longterm Medical
42 Medical of minor wounds, May 7, 2022 /
band-aid ry I Technology Co.,
Device Record abrasions, cuts and other
Ltd.
No. 20220033 superficial wounds.
Zhejiang It is used for first aid
Zhejiang
Huzhou and temporary dressing
Breathable Catego Longterm Medical
43 Medical of minor wounds, April 29, 2022 /
band-aid ry I Technology Co.,
Device Record abrasions, cuts and other
Ltd.
No. 20220031 superficial wounds.
Zhejiang It is used to affix
Self- Zhejiang
Huzhou dressings to wounds or
adhesive Catego Longterm Medical
44 Medical fix other medical April 19, 2022 /
silicone ry I Technology Co.,
Device Record devices to specific body
tapes Ltd.
No. 20220027 parts.
64
2022 Annual Report
2. Abroad
Registrati
Name of Certificate Date of
Region S/N Certificate No on Product Validity
certificates owner issuance
categories
Registration Winner Synthetic non-
The United 2022060901266
1 Confirmation IIa Medical woven fabrics June 9, 2022 /
Kingdom 050
Letter Co., Ltd. with threads
Super
absorbent and
Registration Winner
The United 2022102101281 hydrocolloid October 21,
2 Confirmation IIb Medical /
Kingdom 600 dressing with 2022
Letter Co., Ltd.
activated
carbon
Winner
GC2468022- MDA
Malaysia 3 Class A Medical Foam Dressing June 17, 2022 June 16, 2027
94818 Certification
Co., Ltd.
Winner Silicone
GC4381322- MDA
Malaysia 4 Class A Medical Wound June 17, 2022 June 16, 2027
96394 Certification
Co., Ltd. Contact Layer
Activated
Winner Charcoal
GC7992122- MDA
Malaysia 5 Class A Medical Super June 20, 2022 June 19, 2027
96394 Certification
Co., Ltd. absorbent
dressing
Winner
GC8284722- MDA Hydrocolloid
Malaysia 6 Class A Medical June 17, 2022 June 16, 2027
96392 Certification Dressing
Co., Ltd.
Winner
GC8135122- MDA Silicone foam
Malaysia 7 Class A Medical July 18, 2022 July 17, 2027
97997 Certification dressing
Co., Ltd.
Winner Super
GC8985822- MDA
Malaysia 8 Class A Medical absorbent July 22, 2022 July 21, 2027
98783 Certification
Co., Ltd. dressing
Winner Silicone super
GC9180022- MDA
Malaysia 9 Class A Medical absorbent July 22, 2022 July 21, 2027
98783 Certification
Co., Ltd. dressing
Winner
GC7893622- MDA Alginate August 11, August 10,
Malaysia 10 Class A Medical
101503 Certification dressing 2022 2027
Co., Ltd.
Winner
GA5356322- MDA Wound
Malaysia 11 Class A Medical July 18, 2022 July 17, 2027
97346 Certification Dressing
Co., Ltd.
Winner
GA5585622- MDA Silicone scar
Malaysia 12 Class A Medical July 27, 2022 July 26, 2027
98539 Certification repair sheet
Co., Ltd.
Winner
GA10116322- MDA Non-Sterile
Malaysia 13 Class A Medical July 18, 2022 July 17, 2027
97480 Certification Surgical Mask
Co., Ltd.
Winner Non-sterile
GA3707122- MDA
Malaysia 14 Class A Medical Bandage and July 18, 2022 July 17, 2027
97402 Certification
Co., Ltd. Tape Products
65
(Continued)
Registra
Name of tion Certificate Date of
Region S/N Certificate No. Product Validity
certificates categori owner issuance
es
Malays GA4150922- MDA Winner Medical Sterile Gauze August 11, August 10,
15 Class A
ia 100539 Certification Co., Ltd. Product 2022 2027
Malays GA4877222- MDA Winner Medical Sterile Cotton August 29, August 28,
16 Class A
ia 102575 Certification Co., Ltd. Ball 2022 2027
Sterile Gauze
Malays GB8845922- MDA Winner Medical Product with X- September 19, September 18,
17 Class B
ia 104134 Certification Co., Ltd. ray Detectable 2022 2027
Element
Malays GA4994122- MDA Winner Medical Non-sterile September 15, September 14,
18 Class A
ia 103643 Certification Co., Ltd. Gauze Product 2022 2027
Malays GA3803522- MDA Winner Medical Non-sterile September 15, September 14,
19 Class A
ia 103533 Certification Co., Ltd. Cotton Products 2022 2027
Non-sterile
Malays GA2282022- MDA October 25, October 24,
20 Class A Winner Medical Procedure Mask
ia 106328 Certification Co., Ltd. 2022 2027
Level 1
Non-sterile
Malays GA8656722- MDA November 8, November 7,
21 Class A Winner Medical Procedure Mask
ia 107753 Certification Co., Ltd. 2022 2027
Type II
Non-sterile
Malays GA6558622- MDA Winner Medical December 13, December 12,
22 Class A Cotton
ia 111080 Certification Co., Ltd. 2022 2027
Applicator
Thailan 65-2-3-2- TFDA Winner Medical Sterile scar August 18, August 17,
23 Class 1
d 0012558 Certification Co., Ltd. treatment strips 2022 2027
Non-sterile
Thailan 65-2-3-2- TFDA Winner Medical November 22, November 21,
24 Class 1 hydrocolloid
d 0017301 Certification Co., Ltd. 2022 2027
band-aids
Austral ARTG Class Winner Medical
25 387962 Foam dressing May 4, 2022 May 26, 2024
ia Certificate IIb Co., Ltd.
Austral ARTG Class Winner Medical Silicone Foam
26 387963 May 4, 2022 May 26, 2024
ia Certificate IIb Co., Ltd. Dressing
Austral ARTG Winner Medical Silica gel super
27 387964 Class Iib May 4, 2022 May 26, 2024
ia Certificate Co., Ltd. absorbent pad
Austral ARTG Winner Medical Superabsorbent
28 387966 Class Iib May 4, 2022 May 26, 2024
ia Certificate Co., Ltd. Dressing
Austral ARTG Class Winner Medical Silicone Wound
29 387967 May 4, 2022 May 26, 2024
ia Certificate IIb Co., Ltd. Contact Layer
66
2022 Annual Report
(Continued)
Registr
Certificate Name of ation Certificate Date of
Region S/N Product Validity
No. certificates categor owner issuance
ies
Winner
Austral Class Hydrocolloid
30 388191 ARTG Certificate Medical Co., May 9, 2022 May 26, 2024
ia IIb dressings
Ltd.
Super
Winner
Austral Class absorbent pad
31 387970 ARTG Certificate Medical Co., May 4, 2022 May 26, 2024
ia IIb with activated
Ltd.
carbon
Winner
Austral
32 387340 ARTG Certificate Class I Medical Co., Silicone tapes April 21, 2022 /
ia
Ltd.
Winner
Austral Scar treatment
33 387291 ARTG Certificate Class I Medical Co., April 20, 2022 /
ia strips
Ltd.
Winner Wound
Austral
34 391592 ARTG Certificate Class I Medical Co., dressing (non- June 30, 2022 /
ia
Ltd. sterile)
Winner Wound
Austral
35 388016 ARTG Certificate Class Is Medical Co., dressing May 5, 2022 May 26, 2024
ia
Ltd. (sterile)
Winner
Austral Class Alginate
36 387969 ARTG Certificate Medical Co., May 4, 2022 May 26, 2024
ia IIb dressings
Ltd.
Notification of
LR-20227-C- Winner
Saudi Low-Risk Medical
37 1258-- Class I Medical Co., Silicone tape July 19, 2022 July 18, 2023
Arabia Device
SFDA-3794 Ltd.
Registration
Notification of
LR-20227-C- Winner
Saudi Low-Risk Medical Adhesive
38 1258-- Class I Medical Co., July 17, 2022 July 16, 2023
Arabia Device Remover pad
SFDA-3741 Ltd.
Registration
Notification of
LR-20227-C- Winner
Saudi Low-Risk Medical Silicone scar
39 1258-- Class I Medical Co., July 26, 2022 July 25, 2023
Arabia Device repair sheet
SFDA-3991 Ltd.
Registration
Notification of
LR-20227-C- Winner Skin
Saudi Low-Risk Medical
40 1258-- Class I Medical Co., Protective July 26, 2022 July 25, 2023
Arabia Device
SFDA-3982 Ltd. Barrier
Registration
Notification of
LR-20227-C- Winner hydrogel
Saudi Low-Risk Medical
41 1258-- Class I Medical Co., wound July 27, 2022 July 26, 2023
Arabia Device
SFDA-4060 Ltd. dressing
Registration
Zhejiang
The Longterm Longterm
United 42 K211571 510K II Medical foam dressing May 3, 2022 /
States Technology kit
Co., Ltd.
67
6. Cash flow
Unit: yuan
Year-on-year
Item 2022 2021 increase/decreas
e
Subtotal of cash inflow from operating
12,542,790,330.22 8,810,925,953.61 42.35%
activities
Subtotal of cash outflow from
9,559,318,099.95 7,939,236,051.68 20.41%
operating activities
Net cash flow from operating activities 2,983,472,230.27 871,689,901.93 242.26%
Subtotal of cash inflow from
8,238,580,617.85 7,465,119,663.87 10.36%
investment activities
Subtotal of cash outflow from
12,056,695,936.67 6,986,313,228.36 72.58%
investment activities
Net cash flow from investing activities (3,818,115,318.82) 478,806,435.51 -897.42%
Subtotal of cash inflow from financial
2,276,661,290.38 100.00%
activities
Subtotal of cash outflow from
1,159,153,982.55 1,409,637,239.29 -17.77%
financial activities
Net cash flow from financing activities 1,117,507,307.83 (1,409,637,239.29) -179.28%
Net increase in cash and cash
282,209,696.13 (61,122,432.34) 561.71%
equivalents
Explanation of the main influencing factors of significant changes on a year-on-year basis in relevant data
√ Applicable Not applicable
1. The increase in cash inflow and outflow from operating activities and net amount was mainly due to the rise in the
Company's performance during the reporting period, the adoption of a credit policy of prepayment for infection
protection products and the extension of the payment period for external purchases.
2. The decrease in cash inflow from investing activities was mainly due to the decrease in financial products redeemed
during the reporting period; and the decrease in net cash flow from investing activities was mainly due to the
acquisition of Longterm Medical, Winner Guilin, Winner Medical (Hunan) and Junjian Medical during the reporting
period.
3. The increase in net cash and cash equivalents was mainly due to increased net cash flow from operating activities.
Explanation of the reason for the significant difference between the Company's net cash flow generated from operating
activities during the reporting period and the net profit in the current year
Applicable √ Not applicable
68
2022 Annual Report
V. Non-main operations
√ Applicable Not applicable
Unit: yuan
Proportion in
Amount Formation reasons Is it sustainable
total profits
It is mainly due to the gain on the
Investment income from
maturity of financial products and the
Investment income 51,470,767.16 2.68% joint ventures Yes,
recognition of investment income from
others No
joint ventures.
It is mainly due to the changes in fair
Prot/los from
32,148,876.44 1.67% value of financial products (such as No
changes in fair value
structured deposits).
It is mainly due to the provision for
Impairment of assets (362,869,340.23) -18.90% impairment of inventories and fixed No
assets.
It is mainly due to receiving
Non-operating
10,569,559.38 0.55% government subsidies unrelated to No
income
operating activities.
Non-operating It is mainly due to the losses on the
67,613,275.63 3.52% No
expenses scrapping of non-current assets.
It is mainly due to the expected credit
Credit impairment
(63,943,322.52) -3.33% losses on the accrual of accounts No
Loss
receivable and other receivables.
Gains from asset It is mainly due to the losses on
3,726,204.37 0.19% No
disposal disposal of non-current assets.
It is mainly due to receiving
Other incomes 84,373,262.34 4.40% government subsidies related to No
operating activities.
VI. Analysis of assets and liabilities
1. Major changes in asset composition
Unit: yuan
End of 2022 Early 2022
The Increase/dec
The Description of significant
proportio rease in
Amount proportion in Amount changes
n in total proportions
total assets
assets
It is mainly due to the
increase in total assets and
Cash and cash
4,526,877,578.90 24.82% 4,273,938,326.82 32.22% -7.40% the decrease in the
equivalents
proportion of monetary
funds.
Accounts
932,642,061.04 5.11% 775,546,589.42 5.85% -0.74% No major changes
receivable
It is mainly due to the
increase in total assets and
Inventory 1,558,923,573.37 8.55% 1,597,377,043.99 12.04% -3.49%
the decrease in the
proportion of inventories.
Investment
8,747,014.25 0.05% 0.05% No major changes
real estates
Long-term
equity 21,747,635.99 0.12% 16,949,801.24 0.13% -0.01% No major changes
investment
69
(Continued)
End of 2022 Early 2022
The The Increase/dec
Description of significant
proportion proportio rease in
Amount Amount changes
in total n in total proportions
assets assets
It is mainly due to the
Fixed assets 2,312,982,598.88 12.68% 1,477,320,848.63 11.14% 1.54% increase in newly acquired
companies.
It is mainly due to
increased infrastructure
Construction in
765,009,910.63 4.19% 216,096,622.30 1.63% 2.56% projects and uninstalled
progress
equipment in the reporting
period.
Right-of-use
472,356,125.64 2.59% 531,735,443.44 4.01% -1.42% No major changes
assets
It is mainly due to the
Short-term loans 2,295,218,930.85 12.58% 12.58%
increase in borrowings
It is mainly due to the
Contract increased consideration
566,819,254.08 3.11% 341,175,665.42 2.57% 0.54%
liabilities received in advance from
customers.
Long-term loans 0.00%
Lease liabilities 326,459,697.90 1.79% 381,808,925.09 2.88% -1.09% No major changes
It is mainly due to the
Tradable increased purchase of
4,378,789,960.23 24.01% 3,130,529,709.10 23.60% 0.41%
financial assets structured deposits and
other financial products.
It is mainly due to the
Notes receivable 51,001,784.57 0.28% 0.28% increased use of bills to
settle payments for goods.
Amounts It is mainly due to the
receivable 93,093,113.79 0.51% 9,940,272.21 0.07% 0.44% increased use of bills to
financing settle payments for goods.
It is mainly due to the
Advances to
229,225,273.09 1.26% 110,462,594.38 0.83% 0.43% increase in prepayment for
suppliers
material purchases.
Other non- It is mainly due to the
current financial 40,000,000.00 0.22% 0.22% purchase of long-term
assets financial assets.
It is mainly due to the
Intangible assets 1,033,109,803.45 5.66% 265,700,890.65 2.00% 3.66% increase in newly acquired
companies.
It is mainly due to the
Goodwill 1,044,674,814.01 5.73% 5.73% increase in newly acquired
companies.
It is mainly due to the
increase in deferred
Deferred income
196,993,751.80 1.08% 122,716,382.99 0.93% 0.15% income tax assets
tax assets
recognized for asset
impairment.
It is mainly due to the
Notes payable 24,760,000.00 0.14% 36,200,130.04 0.27% -0.13% decrease in bankers'
acceptances payable.
It is mainly due to the
Accounts payable 1,119,574,518.58 6.14% 734,521,490.60 5.54% 0.60% increase in trade payables
to suppliers.
70
2022 Annual Report
It is mainly due to the
increased number of
Payroll payable 312,450,241.38 1.71% 184,681,184.52 1.39% 0.32%
employees and
compensation.
It is mainly due to
increased tax payable and
Taxes payable 322,255,874.61 1.77% 93,859,069.68 0.71% 1.06% better performance during
the current reporting
period.
It is mainly due to the non-
derecognition of outstanding
Other current
59,604,591.85 0.33% 24,165,400.50 0.18% 0.15% endorsed notes receivable
liabilities
and the increased sales tax
to be transferred.
It is mainly due to the
Long-term
8,579,637.94 0.05% 0.05% increase in newly acquired
payroll payable
companies.
It is mainly due to the
increase in deferred income
Deferred income tax liabilities corresponding
133,677,102.81 0.73% 13,337,159.68 0.10% 0.63%
tax liabilities to the increase in valuation
increment of assets of the
newly acquired companies.
Less: treasury It is mainly due to share
500,082,734.11 2.74% 257,992,366.68 1.94% 0.80%
stock repurchase.
It is mainly due to the
Minority equity 478,161,435.74 2.62% 12,196,045.94 0.09% 2.53% increase in newly acquired
companies.
High percentage of foreign assets
Applicable √ Not applicable
2. Assets and liabilities measured at fair value
√ Applicable Not applicable
Unit: yuan
Impai
Accum
rment
ulated
in the Ot
fair
Gain/loss accru her
value Purchase amount Sales amount
from changes al of ch
Item Opening balance change during the during the Closing balance
in fair value the an
s reporting period reporting period
for the period curre ge
include
nt s
d in
perio
equity
d
Financial assets
1. Tradable
financial
assets
(excluding 3,130,529,709.10 32,148,876.44 8,728,645,000.00 7,447,646,820.00 4,378,789,960.23
derivative
financial
assets)
Financial assets
3,130,529,709.10 32,148,876.44 8,728,645,000.00 7,447,646,820.00 4,378,789,960.23
subtotal
Total of the
3,130,529,709.10 32,148,876.44 8,728,645,000.00 7,447,646,820.00 4,378,789,960.23
above
71
Financial
0.00 0.00
liabilities
Other changes
Whether there were any significant changes in the measurement attributes of the Company's primary assets during the
reporting period
Yes √ No
3. Restricted rights to assets as of the end of the reporting period
For details, see Section X. Financial Statements “\7. Notes to consolidated financial statements \81. Assets with Restricted
Ownership or Use Rights”.
VII. Analysis of investment
1. Overall situation
√ Applicable Not applicable
Investment amount in the reporting Investment amount in the same period of the
Change percentage
period (yuan) previous year (yuan)
12,418,231,649.20 7,201,614,958.67 72.44%
2. Significant equity investments acquired during the reporting period
√ Applicable Not applicable
Unit: yuan
Inv
Name Inve Esti olv Date
Princip Sour Progress
of the stm Shareh Invest Prod mat Current ed of Disclosure
al Investment ce of Partne as of the
invested ent olding ment uct ed investment in disclos index (if
operatio amount fund r balance
compan met ratio period type inco profit and loss liti ure (if any)
n s sheet date
y hod me gat any)
ion
CNINFO.c
om:
Product Announce
Self-
ion and ment on the
Longter Acq own April
sales of 55.00 Acquisition
m uisit 727,540,000.00 ed N/A N/A N/A Completed 0.00 70,390,069.32 No 11,
medical % of 55%
Medical ion fund 2022
consum Equity
s
ables Interest in
Longterm
Medical
CNINFO.c
om:
Announce
ment on
Self-
Rubber Acquiring
Acq own
Winner product 100.00 June 8, 100%
uisit 450,000,000.00 ed N/A N/A N/A Completed 0.00 44,729,822.83 No
Guilin s % 2022 Equity
ion fund
industry Interest in
s
Winner
Guilin
Latex Co.,
Ltd.
Winner Product Acq 751,921,500.00 68.70 Self- N/A N/A N/A Completed 0.00 7,913,174.25 No May CNINFO.c
72
2022 Annual Report
Medical ion and uisit % own 18, om:
(Hunan) sales of ion ed 2022 Announce
medical fund ment on the
consum s Acquisition
ables of
Controlling
Interest in
Winner
Medical
(Hunan)
Co., Ltd.
and the
Increase in
Capital
Total -- -- 1,929,461,500.00 -- -- -- -- -- -- 0.00 33,033,066.40 -- -- --
3. Significant non-equity investments in progress during the reporting period
√ Applicable Not applicable
Unit: yuan
Cumula Reasons
tive for not
Invest
Inve Industries Investment Cumulative Esti realized meeting Disclo
ment Sour Date of
stme involved amount in the actual investment Project mat gains as the sure
in ce of disclos
Project name nt in current amount as of the progres ed of the scheduled index
fixed fund ure (if
meth investmen reporting end of the s inco end of progress (if
assets s any)
od t projects period reporting period me the and any)
or not
reportin projected
g period earnings
Advanced
dressing Inde Medical
Proc
production line pend Yes consumab 83,746,816.88 115,730,519.32 53.37% 0.00 0.00 N/A
eeds
construction ent les
project
Marketing
Inde Healthy
network Proc
pend Yes consumer 89,944,628.53 308,325,953.01 49.89% 0.00 0.00 N/A
construction eeds
ent goods
project
Medical
consumab
R&D Center Inde
les + Proc
construction pend Yes 50,213,535.21 123,954,171.97 52.65% 0.00 0.00 N/A
Healthy eeds
project ent
consumer
goods
Medical
consumab
Digital Inde
les + Proc
management pend Yes 19,840,207.89 120,213,520.64 44.72% 0.00 0.00 N/A
Healthy eeds
system project ent
consumer
goods
Winner Industrial Inde Medical
Proc
Park (Jiayu) pend Yes consumab 189,414,893.90 241,529,257.22 60.38% 0.00 0.00 N/A
eeds
Project ent les
Medical
Phase II
consumab
Expansion Inde
les + Proc
Project of pend Yes 319,243,764.12 526,086,950.57 87.68% 0.00 0.00 N/A
Healthy eeds
Winner Medical ent
consumer
Wuhan
goods
Total -- -- -- 752,403,846.53 1,435,840,372.73 -- -- 0.00 0.00 -- -- --
73
4. Investment in financial assets
(1) Securities investment
√ Applicable Not applicable
Unit: yuan
Accoun Accumulate
Gain/loss from Profit or loss
ting d fair value Purchase amount Sales amount Accounti Source
Categ Abbrevi Initial investment Beginning book changes in fair for the Ending book
Code measur changes during the during the ng of
ory ation cost value value for the reporting value
ement included in reporting period reporting period account funds
period period
mode equity
Fair
Trust Tradable Self-
value
produ N/A N/A 1,330,000,000.00 1,345,833,430.82 11,258,920.46 1,440,000,000.00 1,430,000,000.00 22,354,653.22 1,351,258,920.46 financial owned
measur
cts assets funds
ement
Fair Owned
Tradable
Other value +
N/A N/A 1,770,996,820.00 1,784,696,278.28 20,889,955.98 7,630,042,000.00 6,309,043,820.00 24,418,279.43 3,027,531,039.77 financial
s measur raised
assets
ement funds
Other
Fair
non- Self-
value
Funds N/A N/A 0.00 40,000,000.00 40,000,000.00 current owned
measur
financial funds
ement
assets
Total 3,100,996,820.00 -- 3,130,529,709.10 32,148,876.44 0.00 9,110,042,000.00 7,739,043,820.00 46,772,932.65 4,418,789,960.23 -- --
(2) Derivatives investment
Applicable √ Not applicable
1) Derivative investments for hedging purposes during the reporting period
Applicable √ Not applicable
There were no derivative investments for hedging purposes during the reporting period.
2) Derivative investments for speculative purposes during the reporting period
Applicable √ Not applicable
There were no derivative investments for speculative purposes during the reporting period.
74
2022 Annual Report
5. The use of proceeds
√ Applicable Not applicable
(1) The overall use of proceeds
√ Applicable Not applicable
Unit: '0,000 yuan
Total Proportion
Total Total
accumulate of total
Total accumulate amount of Total Amount
d amount amount of
amount of d amount proceeds amount of Usage and of
of proceeds proceeds
proceeds of for proceeds purposes of proceeds
Total for for
Meth used proceeds alteration proceeds not that have
Year amount of during the alteration alteration not used
od used purposes been idle
proceeds purposes purposes during the used during the
current during the during the current current reporting for more
during the during the
reporting current current reporting period than two
current current
period reporting reporting period years
reporting reporting
period period
period period
Of which: the
balance of cash
management
was 780.00
million yuan,
2020 IPO 355,884.93 137,872.81 270,116.47 9,102.13 9,102.13 2.56% 98,363.61 0
and the balance
deposited in the
proceeds
account was
203.6361 yuan.
Total -- 355,884.93 137,872.81 270,116.47 9,102.13 9,102.13 2.56% 98,363.61 -- 0
Description of the overall use of proceeds
The China Securities Regulatory Commission (CSRC) approved that, in its “CSRC License [2020] No. 1822” document, the
Company made an initial public offering of 50 million yuan ordinary shares (A shares) at an offer price of 74.30 yuan per
share, and the total proceeds amounted to 3,715.0000 million yuan. After deducting issuance fees of 156.1507 million yuan
(excluding tax), net proceeds totaled 3,558.8493 million yuan. The proceeds mentioned above were verified by BDO CHINA
SHU LUN PAN CERTIFIED PUBLIC ACCOUNTANTS LLP with a “Capital Verification Report” (Xin Kuai Shi Bao Zi
[2020] No. ZI10584). In 2022, the Company mobilized 1.3787281 billion yuan of proceeds, of which: 1.3787281 billion yuan
of proceeds were used by the fundraising projects (including 626.3243 million yuan for replenishment of working capital).
By the end of 2022, the Company mobilized a total of 2.7011647 billion yuan of proceeds, of which: 1.4358404 billion yuan
of proceeds were used for fundraising projects (including a total of 1.1019489 billion yuan of proceeds invested in fund-
raising projects and 333.8914 million yuan of funds pre-invested in fund-raising projects by replacing self-financing funds),
and a total of 1.2653243 billion yuan of idle proceeds for permanently replenishing the working capital.
75
(2) Committed proceeds projects
√ Applicable Not applicable
Unit: '0,000 yuan
Benefi
Whether Cumula
Cumulativ Investme ts
the tive
Committed e nt realize Whether
project Total Investment The project benefits Whether
investment Adjusted investment progress d in there is a
has been investment amount in reaches the realized projecte
projects and total amount as as of the the significant
changed in the current intended as of d
investment of investment of the end end of the curren change in
(includi committed reporting usable status the end benefits
over-raised (1) of the reporting t project
ng proceeds period date of the are met
proceeds reporting period (3) reporti feasibility
partial reportin
period (2) = (2)/(1) ng
change) g period
period
Committed
investment
projects
Advanced
dressing
September 30,
production line No 21,685.86 21,685.86 8,374.68 11,573.05 53.37% 0 0 N/A No
2024
construction
project
Marketing
network September 30,
Yes 70,456.87 61,804.04 8,994.46 30,832.6 49.89% 0 0 N/A No
construction 2024
project
R&D Center
September 30,
construction No 23,542.15 23,542.15 5,021.35 12,395.42 52.65% 0 0 N/A No
2024
project
Digital
September 30,
management No 26,881.05 26,881.05 1,984.02 12,021.35 44.72% 0 0 N/A No
2024
system project
Bolster working
No 9,102.13 9,102.13 9,102.13 0 0 N/A No
capital
Subtotal of
committed
-- 142,565.93 143,015.23 33,476.64 75,924.55 -- -- 0 0 -- --
investment
projects
Investment of
over-raised
proceeds
Winner
Industrial Park No 40,000 18,941.49 24,152.93 60.38% June 30, 2023 0 0 N/A No
(Jiayu) Project
Phase II
Expansion
December 31,
Project of No 60,000 31,924.38 52,608.70 87.68% 0 0 N/A No
2023
Winner Medical
Wuhan
Bolster working
-- 117,430.3 53,530.3 117,430.3 100.00% -- -- -- -- --
capital (if any)
Subtotal use of
over-raised -- 217,430.3 104,396.17 194,191.92 -- -- -- --
proceeds
Total -- 142,565.93 360,445.53 137,872.81 270,116.47 -- -- 0 0 -- --
76
2022 Annual Report
(Continued)
Description of and reasons for not
meeting the scheduled progress or
projected earnings by projects
N/A
(including the reasons for selecting
“Not applicable” for “Whether
projected benefits are met”)
Description of significant changes in
N/A
project feasibility
Applicable
On October 12, 2020, the 13th meeting of the Second Board of Directors and the seventh meeting of
the Second Board of Supervisors of the Company reviewed and approved the “Proposal Regarding
the Use of Some Over-raised Proceeds To Permanently Supplement the Working Capital”, and
agreed that the Company could allocate RMB 639 million of the over-raised proceeds to supplement
the working capital permanently. The Fifth Extraordinary General Meeting of 2020 held on October
29, 2020, considered and approved the proposal. As of November 2, 2020, 639 million yuan of over-
raised proceeds were used for replenishing the working capital.
On November 27, 2020, the 15th meeting of the Second Board of Directors and the 9th meeting of
the Second Board of Supervisors of the Company reviewed and approved the “Proposal Regarding
the Use of Over-raised Proceeds for the Investment in Winner Industrial Park (Jiayu) Project”. The
proposal was considered and approved by the 6th Extraordinary General Meeting of Shareholders in
2020, held on December 15, 2020. The main body of the Proposal is as follows: The Company plans
to allocate RMB 400.0000 million of the over-raised proceeds to the investment in the Winner
Industrial Park (Jiayu) Project. The total investment in Winner Industrial Park (Jiayu) Project is
estimated at RMB 900.0000 million, and the implementing entity is Winner Medical (Jiayu) Co.,
Ltd. The project is located in Hubei Jiayu Economic Development Zone, adjacent to the Park's 2nd
Road in the north, 3rd Road in the south, Jiayu Avenue in the east, and Shijingpu Road in the west.
The total land area is about 451 mu. The project relies on independent research and development of
patented technology achievements, and based on the existing advantages of the Company in the
industry, considers natural cotton as the primary raw material to innovate and improve degreasing
and spunlace technology. It adopts comprehensive use of high-pressure “water needle” and other
Amount, purpose and progress of use high-efficiency production technologies, and plans to build production projects about spunlace, wash
of over-raised proceeds care, wet wipes, medical cotton/gauze/nonwoven fabrics, hand sanitizer and other products. As of
December 31, 2022, the total amount invested in the above project was 241.5293 million yuan.
On November 27, 2020, the 15th meeting of the Second Board of Directors and the 9th meeting of
the Second Board of Supervisors of the Company reviewed and approved the “Proposal Regarding
the Use of Over-raised Proceeds for the Phase II Expansion Project of Winner Medical Wuhan”. The
main body of the Proposal is as follows: The Company plans to allocate RMB 600.0000 million of
the over-raised proceeds to the investment in the Phase II Expansion Project of Winner Medical
Wuhan. The total investment in the Phase II Expansion Project of Winner Medical Wuhan totals
RMB 1,500.0000 million, and the implementing entity is Winner Medical (Wuhan) Co., Ltd. The
project includes non-woven coil center, sterilization processing center, domestic medical sales and
marketing center, intelligent distribution center of Hubei regional headquarters, regional
headquarters in Central China and the second R&D center of the Group, which are fully invested and
independently operated by the Company. Thanks to the project construction, the Company's
production capacity and market share will be increased, enabling it to become a global leader in
overall technical level and product quality scale. As of December 31, 2022, the total amount invested
in the above project was 526.0870 million yuan.
The Company held the sixth meeting of the third session of the Board of Directors and the fifth
meeting of the third session of the Board of Supervisors on April 20, 2022, and reviewed and
approved the “Proposal Regarding the Use of Some Over-raised Proceeds to Supplement the
Working Capital Permanently”, and agreed that the Company could allocate 494.19 million yuan of
the over-raised proceeds and the corresponding cash proceeds to permanently supplement the
working capital. The 2021 Annual General Meeting held on May 13, 2022 considered and approved
the proposal.
Applicable
Occurred in the previous year
On November 27, 2020, the 15th meeting of the Second Board of Directors and the 9th meeting of
the Second Board of Supervisors of the Company reviewed and approved the “Proposal Regarding
Capital Increase in Wholly Owned Subsidiaries with Some of the Proceeds, Changes to
Change of location for the Implementing Entity of the Fundraising Projects, and Addition of Implementation Sites of Some
implementation of the proceeds Fundraising Projects”. The main body of the Proposal is as follows: To further improve the
investment project production, management efficiency and comprehensive utilization rate of resources, seize market
development opportunities, and better promote the implementation of fundraising projects, the
Company plans to use some of the proceeds to increase the capital of the wholly-owned subsidiaries
and change the implementing entity of the fundraising projects, and add new implementation sites
for the fundraising projects. Where the original implementing entity of “The R&D Center
Construction Project” was Winner Medical (Wuhan) Co., Ltd. Based on the corporate development
strategies and actual business needs, it is proposed to add Winner Medical Co., Ltd. as the
77
implementing entity of “R&D Center Construction Project”, and add “Winner Industrial Park, No.
660 Bulong Road, Longhua New District, Shenzhen City” as the project implementation location
accordingly.
Adjustment of the implementation Applicable
mode of the proceeds investment Occurred during the reporting period
project
The Company held the sixth meeting of the third session of the Board of Directors and the fifth
meeting of the third session of the Board of Supervisors on April 20, 2022, and reviewed and
approved the “Proposal on Adjusting the Implementation Mode, Extending the Construction Period
and Permanently Bolstering the Working Capital of Some Fund Raising Projects”, which became
effective after the consideration of the 2021 Annual General Meeting of Shareholders held on May
13, 2022. The main contents of the proposal were as follows: To quickly respond to market changes
and improve the utilization efficiency of proceeds, the marketing network building project increased
the investment related to online marketing of Shenzhen Purcotton Technology Co., Ltd., a wholly-
owned subsidiary. Also, due to strategic adjustments, the marketing network building project
terminated the investment related to network building of Shenzhen PureH2B Technology Co., Ltd., a
wholly-owned subsidiary.
Applicable
On February 26, 2021, the 18th meeting of the Second Board of Directors and the 12th meeting of
the Second Board of Supervisors of the Company reviewed and approved the “Proposal to Open
Bank Accounts and Replace the Self-financing Funds Pre-invested in New Projects with Excess
Funds Raised”, respectively, and agreed that the Company could replace the self-raised funds pre-
invested in the fundraising project with 100.1742 million yuan of proceeds. The Company's
investment in the project was verified by BDO CHINA SHU LUN PAN CERTIFIED PUBLIC
ACCOUNTANTS LLP with a “Special Audit Report on the Replacement of Proceeds by Winner
Medical Co., Ltd.” (Xin Kuai Shi Bao Zi [2021] No. ZI10031) issued on February 23, 2021. Among
them: the actual investment amount of the Company's self-raised funds pre-invested in the proceeds
investment project is 100.1742 million yuan, of which: 85.8942 million yuan was invested in the
Wuhan Phase II expansion project, and 14.28 million yuan was invested in Winner Industrial Park
(Jiayu) Project. In February and March 2021, the Company transferred 14.28 million yuan and
85.8942 million yuan, respectively from the special account for proceeds to replace the self-raised
Pre-investment and replacement of the funds that had been invested in advance in the proceeds project.
proceeds investment project On October 12, 2020, the 13th meeting of the Second Board of Directors and the seventh meeting of
the Second Board of Supervisors of the Company reviewed and approved the “Proposal Regarding
the Use of Proceeds to Replace Self-raised Funds Pre-invested in the Fundraising Project”,
respectively, and agreed that the Company could replace the self-raised funds pre-invested in the
fundraising project with 233.7173 million yuan of proceeds. The Company's investment in the
project was verified by BDO CHINA SHU LUN PAN CERTIFIED PUBLIC ACCOUNTANTS
LLP with a “Special Audit Report on the Replacement of Proceeds by Winner Medical Co., Ltd.”
(Xin Kuai Shi Bao Zi [2020] No. ZI10635) issued on October 12, 2020. Among them: the actual
investment amount of the Company's self-raised funds pre-invested in the proceeds investment
project is 233.7173 million yuan, of which: 26.5062 million yuan was invested in advanced dressing
production line construction project, 110.0794 million yuan was invested in marketing network
building project, 50.2174 million yuan was invested in R&D center construction project, 46.9143
million yuan was invested in digital management system project. In October and November 2020,
the Company transferred 73.4204 million yuan and 160.2968 million yuan, respectively from the
special account for proceeds to replace the self-raised funds that had been invested in advance in the
proceeds project.
Temporary replenishment of working
N/A
capital with idle proceeds
Amount of and reasons for the
balance of proceeds resulting from N/A
project implementation
Usage and purposes of proceeds not As of December 31, 2022, the balance of unused proceeds of the Company was 983.6361 million
used during the current reporting yuan, of which: the balance of cash management was 780 million yuan, and the balance of 203.6361
period million yuan was deposited in the account for proceeds.
Problems or other circumstances in
None
the use and disclosure of proceeds
78
2022 Annual Report
(3) Changes in proceeds projects
√ Applicable Not applicable
Unit: '0,000 yuan
Actual
Benefit Whet Whether
Total Actual cumulativ
Investment s her there is a
amount of investmen e The project
Correspondi progress as realized proje significant
proceeds to t amount investmen reaches the
Project after ng original of the end of in the cted change in
be invested in the t amount intended
change committed the reporting current benef the
in the current as of the usable status
projects period (3) = reportin its feasibility of
changed reporting end of the date
(2)/(1) g are the changed
project (1) period reporting
period met project
period (2)
Marketing Marketing
network network September
61,804.04 8,994.46 30,832.6 49.89% 0 N/A No
construction construction 30, 2024
project project
Total -- 61,804.04 8,994.46 30,832.6 -- -- 0 -- --
The Company held the sixth meeting of the third session of the Board of Directors
and the fifth meeting of the third session of the Board of Supervisors on April 20,
2022, and reviewed and approved the “Proposal on Adjusting the Implementation
Mode, Extending the Construction Period and Permanently Bolstering the Working
Capital of Some Fund Raising Projects”, which became effective after the
Reasons for change, decision-making consideration of the 2021 Annual General Meeting of Shareholders held on May
procedures and information disclosure 13, 2022. The investment on the marketing network building project of PureH2B
(by specific project) was terminated. The remaining proceeds not used for the marketing network
building project amounted to approximately 89.6426 million yuan (including the
income of financial products), which will be used for permanently replenishing the
working capital (the actual amount to be replenished together with the proceeds of
the financial products will be 91.0213 million yuan). (Announcement No.: 2022-
021)
Information on and reasons for not
The fund-raising capital investment project has not been completed and the benefits
meeting the scheduled progress or
generated by the fund-raising capital investment project cannot be calculated yet
projected earnings (by specific project)
Description of significant changes in the The feasibility of the marketing network building project has not changed
feasibility of the changed project significantly
79
VIII. Sales of significant assets 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
Total assets Net assets Operating income Operating profit Net profit
name type operation capital
Mainly
Winner
responsible for
Medical
Subsidiari the production
(Huangga 259,459,200.00 1,646,058,376.73 1,264,635,787.39 2,092,775,559.60 419,812,428.81 362,064,616.42
es of large rolls of
ng) Co.,
cotton and
Ltd.
cotton tissues
Acquisition and disposal of subsidiaries during the reporting period
√ Applicable Not applicable
Method of acquisition and disposal of Impact on overall production operations
Company name
subsidiaries during the reporting period and performances
Business combinations not under common
Longterm Medical No significant direct impacts
control
Business combinations not under common
Winner Guilin No significant direct impacts
control
Business combinations not under common
Winner Medical (Hunan) No significant direct impacts
control
Business combinations not under common
Junjian Medical No significant direct impacts
control
Pure HB (Shanghai) Cancellation No significant direct impacts
Description of major holding companies and joint stock companies
80
2022 Annual Report
X. Structured subjects controlled by the Company
Applicable √ Not applicable
XI. Prospects of the Company
(I) Strategic planning:
Since its foundation 31 years ago, Winner Medical has always kept in mind the development vision of “caring for health and
life, making a better world”, and taken “To lead the healthcare trend and achieve harmony between people and the
environment” as its mission, which are the cornerstone and guidance for the Company to go further. The Company firmly
adheres to four corporate values of “hard-working & perseverance, pioneering & innovation, self-criticism, and long-
termism”. In terms of medium and long-term strategic development, the Company has formed the strategic guidelines of
“with leading products as the direction, innovative R&D as the core, brand marketing as the driver, digital operation as the
foundation, intelligent manufacturing as the weapon, and high-quality, high-efficiency, high-performance and high-return
talents as the guarantee, to build a new chapter of high-quality development”.
1. Medical consumables business
In 2022, the Company put forward the strategic goal of “leading in medical consumables and providing one-stop medical
consumables solutions”, and planned the strategic development and upgrading with four themes: “insisting on product
innovation, focusing on channel development, building intelligence via brand marketing, and enhancing capabilities with
excellent operation”. This would help cope with the complex, ever-changing external environment and stride forward on the
new journey of high-quality development.
Meanwhile, the strategic acquisitions of Longterm Medical, Winner Guilin, Winner Medical (Hunan) and Junjian Medical
have solidified and provided key capabilities and superior support for the medical business to build a one-stop medical
consumables solution capacity and one-stop sales service platform.
2. Healthy living consumer product business
Purcotton has been committed to fulfilling its vision of “Purcotton Changes the World”, its mission of “leading a healthy
lifestyle to become a credible Chinese brand” and its core values of “delighting users, caring employees, working hard and
innovating for changes” for 13 years. It has always followed the brand management principles of “prioritizing quality over
profit, brand over speed and social value over corporate value”. In 2022, the Company put forward the strategic goals of
“creating a lifestyle with pure cotton, and becoming a safe, happy and sustainable brand for consumers”, and formulated
strategic guidelines of “building brand as the driver, leading products as the core, marketing + sales as the channel,
operational excellence as the means” to “prioritize competitive cotton products while developing mass cotton products by
combining non-woven and woven businesses”, thus achieving the strategic blueprint for the global development of all-cotton
product category.
Purcotton will adhere to the delivery of its initial mission of “Purcotton Changes the World” and its brand values, and
prioritize changing consumer perception to help consumers understand and identify the concept of “security, happiness and
sustainability” in a comprehensive, multifaceted manner. The Company has been supported by three core values of “Medical
background, Purcotton philosophy, Quality DNA” to build brand intelligence and establish Purcotton as one of the global
preferred brands.
81
(II) FY2023 business plans
1. Medical consumables business
In the current external business environment, opportunities and challenges coexist. The Company has to deal with more
severe market and performance challenges. Winner Medical proposes four business strategies, namely “product upgrading,
technology breakthrough, in-depth marketing + sales strategies, operation efficiency improvement”, to develop four solutions
-- “surgical supplies, sensory protection supplies, wound care and health care” -- as well as best sellers, and tap into key
channels to win market shares. The Company has increased its strategic-level project resource investment and pressure
management, focused on short-term operational breakthroughs as well as medium- and long-term capacity building, and
followed its overall strategies to achieve its operational goals.
(1) Product and technology strategy: Focus and upgrade the traditional product portfolio, create best-sellers such as
surgical packs, masks and foam dressings, and improve product competitiveness based on three core characteristics in
the current reporting period; promote R&D innovation and industry-university-research innovation projects, build
technological barriers based on the R&D outcomes of basic materials, and firmly implement the strategies of product
first.
(2) Marketing strategy: Build professional medical brand intelligence, connect with model academic experts, key
distributors and platforms, tap into and open marketing channels to create a service chain, win and control the end
market, and enable domestic and international trades to go hand in hand.
(3) Operation strategy: Improve the competitiveness of cost, manufacturing and operation thanks to cost reduction and
efficiency improvement, efficient and flexible supply chain, intelligent manufacturing planning and arrangements,
digital transformation and upgrading, and firmly realize the strategic development idea of operational excellence.
(4) Organizational development: Establish an efficient integrated operational organization, focusing on high-quality, high-
efficiency, high-performance and high-return talents, while matching with performance evaluation and incentive
mechanisms that guide sales, growth promotion and benefit sharing, to revitalize and improve organizational
effectiveness.
New business directions and strategies have been proposed for new businesses (mergers and acquisitions). Make
breakthroughs in operations in the short term and enhance basic capabilities in the medium and long term, thus taking
advantage of products and channels to unite the Group and strive to be No. 1 in the market segment. Keep up with policy
development, build differentiated absolute competitive advantages in product planning and development, channel expansion
and in-depth development.
2. Healthy living consumer product business
Based on the strategic goal of 2025, 2023 is the year of consumption recovery and the turnaround year for Purcotton to
resume high growth. As to new markets, consumption and opportunities, we will increase strategic investment and refine
strategic project process management, formulate annual development plans and medium-term capacity-building strategies,
promote the achievement of business goals, and make steady progress toward high-quality development.
(1) In terms of corporate strategy, uphold the business strategy of “leading products with operational excellence”.
(2) In terms of audience targeting, focus on elegant mothers, middle and upper-class groups and new white-collar workers
based on the brand's mid-to-advanced value positioning.
(3) Regarding product scenarios, focus on baby, female, and household supplies.
(4) In terms of products, adhere to the concept of “comfort, health, environmental protection” + fashionable products, and
focus on increasing the R&D investment in basic materials and fabrics in the fields of pure cotton spunlace non-woven
fabric and gauze, enabling R&D technology reserve to be 3-5 years ahead of the industry and driving the development
of core competitiveness of products in the long run. Adhere to the top-selling product strategy, covering three product
scenarios, improve the contribution of core categories, and establish the absolute market share dominance and occupy
the competitive position of best-sellers, thus driving the development of all-category cotton products.
82
2022 Annual Report
(5) As for marketing, focus on serving Purcotton's consumer base, build the capacity of “top brand as the driver,
commodity marketing as the goal” to integrate the quality with effectiveness through continuous consumer
communication, and improving user loyalty and increasing repurchase rates while raising brand reputation and
awareness.
(6) As for channels, accelerate the expansion of new stores, and refine basic management details to enhance user service
and experience.
(7) As for operation management, enhance organizational capabilities, establish standards for high-efficiency, high-
performance and high-return talents, and ensure talent density in the value plateau. Also, we should move faster to
make breakthroughs in digital transformation capacity building, empower private domain growth through refined
operations, and complete the digital system upgrading that incorporates a digital product system, digital consumer
system and digital channel system, to build core business integration processes to achieve simplicity, visualization and
standardization.
Unremitting efforts are required for perfection. Looking ahead, 2023 marks a key year of strategic upgrading and
development for the Company, and it is the year of growth. In the face of the complex, ever-changing external market
environment, all employees will be more positive and open-minded, actively seek development, boldly move forward, and
strive to write a new chapter of growth for Winner Medical!
The above business plan does not constitute a commitment by the Company to investors. Investors are advised to invest
rationally, be aware of investment risks and understand the differences between business plans and commitments.
(III) Possible risks to the Company
1. Risk of raw material price fluctuations and countermeasures
The Company's main raw materials are cotton, cotton yarn, and cotton greige fabric for medical use made from cotton.
Cotton prices are affected by multiple factors such as planting area, natural production, inventory cycle, agricultural price
policy of origin, consumer demand and even futures prices. In addition, the prices of imported cotton are also affected by
other factors such as international trade policies and exchange rate fluctuations. If the purchase price of raw materials such as
cotton continues to rise in the future, it will have a greater cost pressure on the Company's production and operation. If the
Company fails to adjust the sales price with that of raw material price, it may negatively impact 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.
2. Risks of lower market demand for infection prevention products and countermeasures
Thanks to its three brands, i.e., “Winner Medical” and “Purcotton”, the Company realized the 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
health and environmental protection. Therefore, the Company's downstream demand may be affected by the sluggish
macroeconomic situation, the decline in national per capita disposable income or purchasing power, and the uncertainty of
the expected economic outlook. The revenue related to infection prevention products accounted for a higher percentage in
2022, but the demand for such products may decrease. If revenue from conventional medical products does not grow well, it
will harm the Company's results.
To cope with the risk of lower market demand for infection prevention products, the Company has increased the categories of
medical consumables through independent R&D and strategic M&A in the medical consumables business segment, to enrich
product lines, optimize product structures, and provide one-stop medical consumables solutions for medical staff.
3. Exchange rate risks and countermeasures
Medical consumables are the main exports of the Company, which are settled in major international currencies such as US
dollars. In 2022, the Company's foreign sales amount in the overall revenue accounted for 11%. In recent years, with the
accelerated pace of China Yuan internationalization and further marketization of the China Yuan exchange rate formation
mechanism, the exchange rate flexibility of China Yuan against the above currencies has increased. Fluctuations in the China
Yuan exchange rate will, on the one hand, affect the Company's product export sales prices; on the other hand, it will also
cause the Company to generate exchange gains and losses. Suppose there is a significant appreciation of China Yuan in the
83
future. In that case, it will affect the Company's price competitiveness in overseas markets, and cause exchange losses, which
will adversely affect the Company's operating income and profits.
To reduce the impact of exchange rate fluctuations on the Company's performance, (1) for long-term stable customers, the
Company has an agreed price adjustment mechanism, and in case of significant fluctuations in key elements affecting the
price, the price shall be adjusted generally according to the agreed price adjustment mechanism; and at the same time, the
Company adjusts the quotation cycle for new orders received, shortens the quotation cycle, and adjusts the quotation
exchange rate in a timely manner; (2) the Company carries out forward settlement and sale of foreign exchange for the
purpose of hedging, and locks the forward settlement exchange rate in advance to reduce the risk and hedge the exchange rate
risk in international business; and (3) The Company will strengthen its research and analysis of exchange rates, pay attention
to changes in the international market environment in real time, and adjust its business strategies in a timely manner to
minimize the risk of exchange rate fluctuations.
4. Risk of changes in industry policies and standards
Medical device, which directly affects users' life and health safety, has been a key supervised industry. In recent years, as
China further deepens the reform of the medical and health system, relevant government departments have introduced a
series of regulations and policies on industry standards, bidding, price formation mechanisms, circulation systems, etc., which
have a wide and profound impact on the development of the medical device industry. Affected by global public health events,
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 impact the Company's operations.
5. Risk of not receiving reimbursement for the Medical Investment Project of Winner Medical (Heyuan) and
countermeasures
Due to the planning of the square of Heyuan High-speed Railway Station and the surrounding high-speed railway new town
along the Jiangxi-Shenzhen High-speed Railway, the "Agreement on Investment and Construction of Medical 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 550 million yuan, with 50% to be paid by the People's Government of
Zijin County by December 31, 2019 and 50% by February 29, 2020. As of the disclosure date of the report, the Company has
received a land transfer deposit of 3 million yuan and a compensation payment of 328 million yuan returned by the People's
Government of Zijin County. There is a risk that the remaining amount of 225 million yuan may not be received on time in
accordance with the “Award”. The Company has made a provision for bad debts of 112 million yuan in accordance with the
accounting policy. The Company is currently closely following up on the subsequent payment plan of the People's
Government of Zijin County, Heyuan City.
6. Impairment risk of goodwill and other assets and countermeasures
As of December 31, 2022, the Company acquired Longterm Medical, Winner Medical (Hunan) and Winner Guilin to
improve its industrial chain. As of December 31, 2022, the carrying value of goodwill amounted to 1.045 billion yuan,
accounting for 8.93% of its net assets. In case of subsequent underperformance of the aforementioned acquired company, the
Company will take an impairment on the goodwill, which may ultimately harm the Company's performance.
At the end of each year, the Company performs an impairment test on participating companies or companies consolidated
under non-common control (whether or not there is an indication of impairment). The Company will make provision for
impairment, if any, based on the impairment test results. The existence of the case mentioned above will likely have an
impact on the Company's annual net profit. To deal with the risk of impairment of assets such as goodwill, the Company will
make more efforts to strengthen its business management, improve its business performance and reduce the risk of asset
impairment.
84
2022 Annual Report
7. Risks of proceeds projects and countermeasures
The Company plans to allocate the proceeds from this issuance to the construction projects of advanced wound dressing
production lines, a marketing network, an R&D Center and a digital management system. Such projects' development
progress and operation will contribute to the Company's development and profitability in the next few years.
Based on the future market forecast, the Company has conducted a prudential and sufficient feasibility study and
demonstration of the proceeds investment project. Thanks to the Company's rich business experience and market foundation
accumulated over the years, it is expected that the proceeds investment project could realize good investment income.
However, suppose there are changes in external factors such as the industry market. In that case, it cannot rule out that some
projects may not be implemented as scheduled or the actual investment returns may be lower than expected. Following
changes in the external market and the internal control and management system of proceeds projects, the Company will
strictly control the progress of capital investment in various projects and keep an eye on project investment risk.
XII. Registration forms for receptions of surveys, communication, interviews and other
activities during the reporting period
√ Applicable Not applicable
Main contents of Basic
Types
discussions and information
Time Location Method of Objects
documents index of
objects
provided surveys
For details,
Telephone 85 investors, including Business please refer
Headquarter Instituti
January 7, 2022 communic Rongtong Fund, Alpha overview and to SZSE
conference rooms ons
ation Fund and Fullgoal Fund operation Interactive
Ease
For details,
Telephone 102 investors, including GF Business please refer
Headquarter Instituti
February 8, 2022 communic Fund, ChinaAMC, Bosera overview and to SZSE
conference rooms ons
ation Funds operation Interactive
Ease
For details,
Telephone 18 investors, including Business please refer
Guojin Securities Instituti
February 28, 2022 communic Springs Capital, Minghe overview and to SZSE
Strategy Meeting ons
ation Investment operation Interactive
Ease
For details,
Huachuang Telephone 37 investors, including Business please refer
Instituti
March 2, 2022 Securities communic Fullgoal Fund, GF Fund, overview and to SZSE
ons
Strategy Meeting ation ABC-CA Fund operation Interactive
Ease
Changjiang
Securities & For details,
47 investors, including
Orient Securities Telephone Business please refer
Instituti ChinaAMC, Invesco Great
March 4, 2022 Strategy Meeting communic overview and to SZSE
ons Wall Funds, China
and ation operation Interactive
Southern Fund
UBS telephone Ease
survey
For details,
please refer
April 22, 2022 Webcast platform Others Others Online investor FY2021 operation to SZSE
Interactive
Ease
Telephone 79 investors, including Business For details,
Headquarter Instituti
April 26, 2022 communic BlackRock, PAG Fund, overview and please refer
conference rooms ons
ation UBS operation to SZSE
85
Interactive
Ease
For details,
35 investors, including
Telephone FY2021 please refer
Headquarter Instituti China Universal Asset,
April 27, 2022 communic performance to SZSE
conference rooms ons Aegon-industrial Fund,
ation communication Interactive
BOCOM Schroders
Ease
For details,
9 investors, including
Telephone FY2021 please refer
Headquarter Instituti Huafu Fund, BOC
April 28, 2022 communic performance to SZSE
conference rooms ons Investment, Guolian
ation communication Interactive
Securities
Ease
For details,
FY2021 please refer
Headquarter Field Instituti 2 investors, including China
April 29, 2022 performance to SZSE
conference rooms surveys ons Merchants Securities
communication Interactive
Ease
For details,
Business please refer
May 10, 2022 Interactive Ease Others Others All online investors overview and to SZSE
operation Interactive
Ease
For details,
84 investors, including
Telephone please refer
Headquarter Instituti Invesco Great Wall Funds,
May 19, 2022 communic Company M&A to SZSE
conference rooms ons China Southern Fund, Great
ation Interactive
Wall Fund
Ease
For details,
Business please refer
Headquarter Field Individ
May 27, 2022 Various individual investors overview and to SZSE
conference rooms surveys ual
operation Interactive
Ease
For details,
60 investors, including
Telephone please refer
Headquarter Instituti Perseverance Asset, Aegon-
June 9, 2022 communic Company M&A to SZSE
conference rooms ons industrial Fund and King
ation Interactive
Time Investment
Ease
For details,
Telephone 137 investors, including Business please refer
Headquarter Instituti
July 11, 2022 communic BOCOM Schroders, overview and to SZSE
conference rooms ons
ation Fullgoal Fund and GF Fund operation Interactive
Ease
For details,
151 investors, including
Telephone Business please refer
Headquarter Instituti China Universal Asset
August 18, 2022 communic overview and to SZSE
conference rooms ons Fund, GF Securities and
ation operation Interactive
Fullgoal Fund
Ease
For details,
Business please refer
Headquarter Field Individ
August 19, 2022 Various individual investors overview and to SZSE
conference rooms surveys ual
operation Interactive
Ease
For details,
77 investors, including
Telephone Business please refer
Headquarter Instituti China Southern Fund,
September 8, 2022 communic overview and to SZSE
conference rooms ons Fullgoal Fund and Aegon-
ation operation Interactive
industrial Fund
Ease
6 investors, including Business For details,
Headquarter Field Instituti
September 28, 2022 Guosen Securities, Qianhai overview and please refer
conference rooms surveys ons
Alliance Asset Management operation to SZSE
86
2022 Annual Report
and Evergrande Life Interactive
Ease
For details,
141 investors, including
Telephone Business please refer
Headquarter Instituti Harvest Fund, BOCOM
October 25, 2022 communic overview and to SZSE
conference rooms ons Schroders and China
ation operation Interactive
Southern Fund
Ease
For details,
24 institutions, including
Telephone Business please refer
Headquarter Instituti Cinda Securities, GF
November 23, 2022 communic overview and to SZSE
conference rooms ons Securities and China
ation operation Interactive
Securities
Ease
For details,
163 investors, including
Telephone Business please refer
Headquarter Instituti Penghua Fund, China
December 6, 2022 communic overview and to SZSE
conference rooms ons Southern Fund and China
ation operation Interactive
Universal Asset
Ease
For details,
143 investors, including
Telephone Business please refer
Headquarter Instituti Aegon-industrial Fund,
December 13, 2022 communic overview and to SZSE
conference rooms ons China Southern Fund and
ation operation Interactive
Wanjia Asset
Ease
87
04
Corporate Governance
88
2022 Annual Report
I. Basic State of Corporate Governance
The Company strictly complies with the Company Law of the People's Republic of China, the Securities Law of the People's
Republic of China, the Code of Corporate Governance for Listed Companies, the Shenzhen Stock Exchange GEM Listing
Rules, the Standardized Operation of Listed Companies in the No. 2 Guideline of Shenzhen Stock Exchange Self-Regulatory
Guidelines for Listed Companies, and other relevant laws and regulations promulgated by the CSRC and Shenzhen Stock
Exchange, and formulates the Articles of Association and other internal control rules and regulations to standardize the
Company's behavior. The corporate governance structure conforms to relevant normative documents on listed corporate
governance issued by China Securities Regulatory Commission.
1. Shareholders and general meeting of shareholders
In strict accordance with the Company Law of the People's Republic of China, the Securities Law of the People's Republic of
China, the Rules of Shareholders' Meeting of Listed Companies, the Articles of Association and the Rules of Procedure of
Shareholders' Meeting, the Company standardizes the procedures of convening, holding and voting, etc. of the general
meeting of shareholders, treats all investors equally, and enables them to fully exercise their rights to ensure the rights and
interests of minority shareholders. The Company engages lawyers to attend the General Meeting of Shareholders and issue
legal opinions on the convening and voting procedures of the meetings, fully respecting and safeguarding the legitimate
rights and interests of all shareholders.
2. Company and controlling shareholders, actual controller
The Company has independent and complete main business and independent management ability, independent from the
controlling shareholders and actual controllers in personnel, assets, business, management organization and financial
accounting system, and can independently operate, independently manage and bear responsibilities and risks. The controlling
shareholders and actual controllers of the Company can exercise their rights and undertake corresponding obligations in
accordance with the law. During the reporting period, there was no behavior directly or indirectly interfering in the
Company's decision-making and business activities and using its controlling position to infringe on the interests of other
shareholders beyond the authorization of the general meeting of shareholders and the board of directors, which had no
adverse impact on the corporate governance structure and independence.
3. Directors and Board of Directors
The directors of the Company do not have the circumstances that they are not allowed to be directors of the Company as
stipulated in Article 146 of the Company Law. Their appointment and removal strictly comply with the board of directors'
approval procedures and the shareholders' general meeting, and there is no conflict with relevant laws, regulations or the
Articles of Association. All directors work strictly and diligently during their tenure, can continuously pay attention to the
Company's operating conditions, actively participate in relevant training, and improve the standard operation level; actively
participate in the board meetings, give full play to their own professional expertise, make prudent decisions and safeguard the
interests of the Company and the majority of shareholders.
The convening and holding procedures of the board meeting of the Company meet the requirements of relevant regulations;
the contents of previous board meeting minutes are true, accurate, complete and under safe preservation; the resolutions of
the meetings are fully, accurately and timely disclosed. Under the Board of Directors is a Strategy and Social Responsibility
Committee, a Nomination Committee, a Remuneration and Assessment Committee and an Audit Committee.
4. Supervisors and Board of Supervisors
The supervisors of the Company do not have the circumstances that they are not allowed to be supervisors of the Company as
stipulated in Article 146 of the Company Law. Their qualifications meet the relevant requirements of the Articles of
Association. The procedures for convening, holding and voting of the board of supervisors' meetings of the Company
conform to the Rules of Procedure of the Board of Supervisors.
The Company's supervisors can exercise the functions and powers of the board of supervisors and fulfill their duties
diligently.
89
5. Performance evaluation and incentive and restraint mechanisms
Through performance evaluation, the Company can effectively make a comprehensive evaluation on each employee, and
further understands each employee's work ability and expertise, so as to effectively adjust the appropriate position and
achieve the goal of performance evaluation. The Company is gradually improving its performance evaluation mechanism.
Senior and middle management remuneration is linked to the Company's operating performance indicators. The Company
has established an enterprise performance evaluation and incentive system. The performance evaluation standards and
evaluation procedures of directors, supervisors and senior managers are fair and transparent. Their income is linked to the
Company's operating performance. The appointment of senior managers is open and transparent, complying with the
provisions of laws and regulations.
6. Information disclosure and transparency
During the reporting period, the Company disclosed the Company's information truthfully, accurately, completely, timely and
fairly in strict accordance with the requirements of relevant laws and regulations, Articles of Association and Management
System of Information Disclosure Affairs. The Company has designated China Securities Journal, Shanghai Securities News,
Securities Times and Securities Daily as the designated paper media for information disclosure of the Company, and
CNINFO.com (http://www.cninfo.com.cn) is the website specified for the information disclosure to ensure that all
shareholders have fair access to the Company's information.
7. Investor relations management
Following the requirements of relevant laws and regulations and the Investor Relations Management System, the Company
designates the secretary of the board of directors as the person in charge of investor relations management, responsible for
coordinating investor relations, receiving shareholders' visits, answering investors' inquiries, providing investors with the
information disclosed by the Company, etc. The Company responds to investors' inquiries through telephone, e-mail, investor
relations interactive platform, investor reception day and other forms, which strengthens information communication,
promotes benign interaction with investors, and effectively improves the transparency of the Company.
8. Stakeholders
The Company fully respects and safeguards the legitimate rights and interests of relevant stakeholders, realizes the
coordination and balance of interests of the shareholders, employees, doctors and patients, society and other parties, pays
attention to environmental protection and actively participates in public welfare undertakings while realizing the sustainable
and healthy development of the Company and the interests of shareholders.
9. Establishment and implementation of an internal audit system
An audit committee is set up under the board of directors to establish an internal audit system, and is responsible for the
communication, supervision, meeting organization and verification of the Company's internal and external audit. The Internal
Audit Department under the audit committee is the daily office. Under the leadership of the audit committee, it independently
exercises its functions and powers to inspect and supervise the establishment and implementation of the Company's internal
control system, the authenticity and integrity of the Company's financial information, and the efficiency and effect of
business activities.
Whether there is a significant difference between the actual situation of corporate governance and the rules on listed
corporate governance prescribed by laws, administrative regulations and the China Securities Regulatory Commission
Yes √ No
There is no significant difference between the actual situation of corporate governance and the rules on listed corporate
governance prescribed by laws, administrative regulations and the China Securities Regulatory Commission
90
2022 Annual Report
II. Independence of the Company from its controlling shareholders and actual
controllers in terms of guaranteeing assets, personnel, finance, institutions and
business
Since its establishment, the Company has standardized its operation in accordance with the Company Law of the People's
Republic of China, the Securities Law of the People's Republic of China and other relevant laws and regulations as well as
the requirements of the Articles of Association, established and improved the corporate governance structure, completely
separated from the existing shareholders in business, assets, personnel, organizations and finance, and has a complete
business system and the ability to operate independently in the market.
1. Asset independence
The Company has independent and total assets with clear ownership, a separate production system, auxiliary production
system and supporting facilities, and has legal right of plants, land, equipment, trademarks, patents, non-patented technology
and other assets related to production and operation. It has complete control over all the assets of the Company, and there is
no behavior of controlling shareholders and actual controllers occupying the assets of the Company.
2. Personnel independence
The Company has signed labor contracts with its employees, has independent labor, personnel, salary and welfare systems,
and maintains independence with its controlling shareholders, actual controllers and other enterprises under their control. The
Company has established a sound corporate governance structure, and the directors, supervisors and senior managers are
legally selected in strict accordance with the Company Law, Articles of Association and other relevant provisions. The
general manager, deputy general manager, financial chief, secretary of the board of directors and other senior managers of the
Company do not hold any other positions except directors, supervisors and limited partners in the controlling shareholders,
actual controllers and other enterprises controlled by them, and do not receive a salary in the controlling shareholders, actual
controllers and other enterprises controlled by them. The financial personnel of the Company do not work part-time in the
enterprises of controlling shareholders, actual controllers or other enterprises controlled by them.
3. Financial independence
The Company has set up an independent financial department, equipped with full-time financial personnel, and has
established an independent financial accounting system. The Company can make financial decisions independently, and has a
standardized financial accounting system and internal control system, such as internal financial management system for
branches and subsidiaries. There is no situation of controlling shareholders interfering in using the Company's funds. The
Company has an independent bank account and does not share the bank account with the controlling shareholders, actual
controllers and other enterprises controlled by them. As an independent tax payer, the Company makes tax returns and fulfills
its payment obligations independently in accordance with the law. There is no situation of mixed tax payment with the
controlling shareholders, actual controllers and other enterprises controlled by them. The Company's financial operation is
independent of the controlling shareholders, actual controllers and other enterprises controlled by them.
4. Organization independence
In strict accordance with the Company Law of the People's Republic of China, Articles of Association and other relevant
provisions, the Company has established and improved the General Meeting of Shareholders, the Board of Directors, the
Board of Supervisors, the management department and the corresponding rules of procedure of the three meetings, and
formed a perfect corporate governance structure and standardized operation system. According to the development needs of
production and operation, the Company has set up corresponding offices and production and operation organizations, and
independently exercised the operating management authority, and has complete procurement, R&D, production, sales
systems and supporting departments. The Company's production, operation and office are strictly separated from the
controlling shareholders, actual controllers and other enterprises controlled by them, and there is no mixed operation or joint
office with the controlling shareholders, actual controllers and other enterprises controlled by them.
91
5. Business independence
The Company has the corresponding qualifications required for operation, independent and complete business system,
information system and management system, etc. necessary to engage in operating business, and independent and complete
R&D, production capacity, procurement and sales business systems. The business of the Company is independent of the
controlling shareholders, actual controllers and other enterprises controlled by them. There is no dependence on the
controlling shareholders, actual controllers and other enterprises controlled by them. There is no horizontal competition or
unfair related transaction with the controlling shareholders, actual controllers and other enterprises controlled by them.
III. Horizontal competition
Applicable √ Not applicable
IV. Information about the annual general meeting of shareholders and extraordinary
general meeting of shareholders held during the reporting period
1. General meeting of shareholders during the reporting period
Investor
Meeting Meeting participati Convening Date of
Resolutions of the meeting
session type on date disclosure
proportion
2021 Annual Annual
Proposal on the Company's 2021 Annual Report and
General general May 13, May 13,
77.06% Its Abstract, Proposal on the Company's 2021
Meeting of meeting of 2022 2022
Annual Profit Distribution Plan, etc.
Shareholders shareholders
2. The preferred shareholders with voting rights restored request an extraordinary general meeting of
shareholders
Applicable √ Not applicable
V. The company has a voting rights differential arrangement
Applicable √ Not applicable
VI. Corporate governance in the red-chip structure
Applicable √ Not applicable
92
2022 Annual Report
VII. Directors, Supervisors and Senior Management
1. Basic information
Numb
er of Numbe
shares Number Number Other r of
held at of shares of shares increas shares Causes
Stat
the increase decrease es and held at for
us of Gen Start date of End date of
Name Position Age beginn d in d in decrea the end change
servi der tenure tenure
ing of current current ses of the in
ce
the period period (shares period shares
period (shares) (shares) ) (shares
(share )
s)
Chairman and Incu
Li Mal
General mbe 66 May 18, 2015 July 12, 2024 0 0 0 0 0 N/A
Jianquan e
Manager nt
Director, Increas
Deputy e in
General Incu shares
Fang Mal
Manager, mbe 55 May 18, 2015 July 12, 2024 0 40,000 0 0 40,000 in the
Xiuyuan e
Chief nt second
Financial ary
Officer market
Incu
Xu Fem
Director mbe 35 May 18, 2015 July 12, 2024 0 0 0 0 0 N/A
Xiaodan ale
nt
Incu
Guo Mal
Director mbe 39 June 28, 2018 July 12, 2024 0 0 0 0 0 N/A
Zhenwei e
nt
Incu
Peng Independent Mal
mbe 62 July 13, 2021 July 12, 2024 0 0 0 0 0 N/A
Jianfeng director e
nt
Incu
Independent Fem
Xie Jiawei mbe 50 July 13, 2021 July 12, 2024 0 0 0 0 0 N/A
Director ale
nt
Incu
Key Ke Independent Mal
mbe 59 July 13, 2021 July 12, 2024 0 0 0 0 0 N/A
Liu Director e
nt
Chairman of Incu
Zhang Fem
the Board of mbe 37 July 13, 2021 July 12, 2024 0 0 0 0 0 N/A
Tingting ale
Supervisors nt
Increas
e in
Incu shares
Wang Fem
Supervisor mbe 41 May 18, 2015 July 12, 2024 0 30,000 0 0 30,000 in the
Ying ale
nt second
ary
market
Employee Incu
Fem
Liu Hua Representativ mbe 50 July 13, 2021 July 12, 2024 0 0 0 0 0 N/A
ale
e Supervisor nt
Increas
Deputy
e in
General
Incu shares
Chen Manager, Fem
mbe 41 May 18, 2015 July 12, 2024 0 5,300 0 0 5,300 in the
Huixuan Secretary to ale
nt second
the Board Of
ary
Directors
market
Deputy Incu
Fem
Zhang Li general mbe 45 July 13, 2021 July 12, 2024 0 0 0 0 0 N/A
ale
manager nt
Total -- -- -- -- -- -- 0 75,300 0 0 75,300 --
93
Dismissal of directors, supervisors and senior management in the term of office during the reporting period
Yes √ No
Change of directors, supervisors and senior management
Applicable √ Not applicable
2. Service status
Professional background, main work experience and main responsibilities currently in the Company of current directors,
supervisors and senior management of the Company
Mr. Li Jianquan, born in 1957, Chinese, a permanent resident of the Hong Kong Special Administrative Region; College
degree. He created two brands of “Winner Medical” and “Purcotton” and served as the Chairman and General Manager of
Winner Medical Co., Ltd., as well as the Chairman and General Manager of Shenzhen Purcotton Technology Co., Ltd. He
was awarded the title of “Innovative and Entrepreneurial Figures and Advanced Models for the 40th Anniversary of the
Establishment of the Shenzhen Special Economic Zone”.
Mr. Fang Xiuyuan, born in August 1968, Chinese, without permanent residency abroad; College degree, Chinese Certified
Public Accountant. From July 1988 to April 1998, he served as the Accountant and Chief of Finance Department of Hubei
Medical and Health Products Import and Export Corporation. Since 2000, he has been the Director, Deputy General Manager
and Chief Financial Officer of Winner Medical Co., Ltd. Mr. Fang Xiuyuan concurrently holds the posts of Chairman of
Zhejiang Longterm Medical Technology Co., Ltd. as well as an Executive Partner of Shenzhen Purcotton Technology Co.,
Ltd., Shenzhen Qianhai Purcotton E-Commerce Co., Ltd., Winner Medical (Huanggang) Co., Ltd., Winner Medical
(Chongyang) Co., Ltd., Winner Medical (Jiayu) Co., Ltd., Winner Medical (Jingmen) Co., Ltd., Yichang Winner Medical
Textile Co., Ltd., Winner Medical (Tianmen) Co., Ltd., Winner Medical (Wuhan) Co., Ltd. and Xiamen Leyuan Investment
Partnership (L.P.). Mr. Fang Xiuyuan is currently a member of the 7th Shenzhen Committee of the CPPCC and Vice
Chairman of the Federation of Industry and Commerce of Shenzhen Longhua District.
Ms. Xu Xiaodan, born in 1987, Chinese, without permanent residency abroad; Bachelor degree. She joined the Company in
2010; from August 2013 to January 2015, she was the Purchasing Manager of the Procurement Department of Shenzhen
Purcotton Technology Co., Ltd.; from January 2015 to January 2020, she served as the Director of Commodity Center of
Shenzhen Purcotton Technology Co., Ltd.; from May 2015 to now, she has been a Director of Winner Medical Co., Ltd.; and
from February 2020 to now, she has been the Director of Strategic Planning Center of Winner Medical Co., Ltd. At present,
Ms. Xu Xiaodan is also a Director of Winner Medical (Heyuan) Co., Ltd. and Winner Medical (Wuhan) Co., Ltd.
Mr. Guo Zhenwei, born in 1984, Chinese, without permanent residency abroad; Bachelor degree of Central University of
Finance and Economics, EMBA Master Degree of China Europe International Business School. From July 2007 to
September 2009, he was an Senior Auditor of Deloitte Touche Tohmatsu Limited; from September 2009 to July 2010, he was
a researcher of China International Capital Corporation Limited; from July 2010 to now, he has been working at Sequoia
Capital China and is currently the managing director; from June 2018 to now, he has been a director of Winner Medical Co.,
Ltd. At present, Mr. Guo Zhenwei is also a director of Shijiazhuang Junlebao Dairy Co., Ltd., Shanghai Buy Quickly
Technology and Services Co., Ltd., Liuliu Orchard Group Co., Ltd., Hangzhou Dahiti Science & Technology Co., Ltd.,
Deqing Jiajun Beverage Co., Ltd., Sichuan Vanov New Material Co. Ltd., Shanghai Shouquanzhai E-commerce Co., Ltd.,
LOHO Holding Inc., Dynamics China Holding Company, Shanghai Ruishu Electronic Commerce Co., Ltd., and Genki
Forest Technology Group Holdings Limited, as well as a supervisor of Shanghai Qiyao Automobile Technology Co., Ltd.
Mr. Key Ke Liu, born in 1964, American, Bachelor and Master degree in Chemical Engineering of Northwest University,
Doctorate of City University of New York, USA, Master of Management of Rensselaer Polytechnic Institute, USA, foreign
academician of Australian National Academy of Engineering. He was a Chief Scientist of GE Global Research, a director of
Power Environment and Energy Research Center (PEER) of the California Institute of Technology, a director of the
International Pittsburgh Coal Conference (PCC) Organization, a member of PCC Organization, an independent director of
Konfoong Materials International Co., Ltd., Shenzhen Hifuture Information Technology Co., Ltd., and Hunan Yussen Energy
Technology Co., Ltd. He also has worked for many years with well-known multinational companies such as Exxon-Mobil
and UTC. He is currently the dean of the School of Innovation and Entrepreneurship, President of the Clean Energy Research
Institute and chair professor of the Department of Chemistry, Southern University of Science and Technology, standing
director and deputy director of Center for China and Globalization (CCG), director of Carnegie–Tsinghua Center, and
director of Puritek Company Ltd.. After returning to China, he was appointed as the deputy director and Chief Technology
Officer (CTO) of National Institute of Clean-and-Low-Carbon Energy. He was awarded the Top Fifty China Overseas-
educated Scholars in Innovation and Entrepreneurship in 2015, Pitt Award in 2013 and Emerald Honors Special Recognition
Award in 2006.
94
2022 Annual Report
Mr. Peng Jianfeng, born in 1961, Chinese, without permanent residency abroad; master degree of Renmin University of
China. Since 1986, he has successively served as lecturer, associate professor and professor in the School of Labor and
Human Resources of Renmin University of China; previously, he had successively served as the independent director of
Telling Telecommunication Holding Co., Ltd., Sunward Intelligent Machinery Co., Ltd., Goertek Co., Ltd., Chinese Universe
Publishing and Media Group Co., Ltd., Haier Smart Home Co., Ltd., China Merchants Shekou Industrial Zone Holdings Co.,
Ltd. and Chow Tai Seng Jewellery Co., Ltd.; currently the independent director of Jinko Power Technology Co., Ltd., non-
independent director of Hytera Communications Corporation Limited, director of CCB Trust Co., Ltd., executive director of
China Stone Management Consulting Ltd. and executive director of China Stone (Beijing) Corporation Culture Management
Consulting Co., Ltd. Mr. Peng Jianfeng has been deeply involved in enterprises for a long time to provide consulting services.
He has been employed as a senior management consultant and an expert group leader by Shenzhen Huawei, Guangdong
Midea Group, Shandong Liuhe Group, ENN Group, etc.. The expert team led by him has provided consulting services for
hundreds of famous enterprises, and the management consulting team led by him has created the Huawei Basic Law, Charter
of OCT, TCL Fights Scale with Speed, The Third Road of Midea, Samsung (China) Culture, Meager Profit Management and
Service Marketing of Shandong Liuhe Group, Three Mechanisms and Six Systems of Human Resources of Baisha Group,
Joint Programme of Action of Dongfeng Nissan, Lenovo Cultural Studies and Jingdong Culture. He was awarded the “Top
Ten Figures” of the second China Human Resource Management Award and the “Top Ten Respectable Management
Consulting Experts” by the Management Consulting Committee of China Enterprise Confederation.
Ms. Xie Jiawei, born in 1973, Chinese, without permanent residency abroad; Bachelor degree, certified public accountant and
tax accountant. Previously, she successively served as the Deputy Director of Beijing Zhongtian Huazheng Certified Public
Accountants Co., Ltd., Deputy Director of Shenzhen Branch of BDO China Shu Lun Pan Certified Public Accountants LLP,
Vice Chairman of the 6th Council of Shenzhen Institute of Certified Public Accountants, and Independent Director of
Shenzhen Guangju Energy Co., Ltd., Shenzhen Topband Co., Ltd., Guangdong Xinhui Meida Nylon Co., Ltd., and Shenzhen
Dynanonic Co., Ltd., as well as Independent Director of Shenzhen Heungkong Holding Co., Ltd., and a core member of
Vanho Securities. She is currently a partner of Dahua Certified Public Accountants Co., Ltd., a member of the 6th Council of
Guangdong Institute of Certified Public Accountants, an off-campus supervisor for graduate students of Shenzhen University,
and an independent director of Han's Laser Technology Industry Group Co., Ltd.
(2) Board of Supervisors
Ms. Zhang Tingting, born in 1986, Chinese, without permanent residency abroad; Bachelor degree. She joined the company
in November 2010 and
successively served as the Manager of the Supplier Management Department, Domestic Trade Drugstore Management
Department, Distributor Management Department, Product Development Department and E-commerce Commodity
Department from July 2014 to January 2021. She is currently the Category Manager of the Company. She is concurrently a
member of the Longhua Street CPC Working Committee on Non-Public Economic and Social Organizations, Secretary of the
Party Committee, Chairman of the Women's Federation, Secretary of the Youth League Committee, and Party Representative
of Longhua District. She has been awarded the title of “Shenzhen Outstanding Communist Party Member” by the Shenzhen
Municipal Committee of CPC.
Ms. Liu Hua, born in 1973, Chinese, without permanent residency abroad; MBA and Master degree of Tongji University.
From April 2004 to September 2009, she was the Manager of the International Trade Department of Winner Industries
(Shenzhen) Co., Ltd.; from September 2009 to November 2011, she served as the Director of Operation Center of Shenzhen
Purcotton Technology Co., Ltd.; from November 2011 to April 2021, she served as the Deputy General Manager of
Shenzhen Purcotton Technology Co., Ltd.; since January 2015, she has been a Director of Shenzhen Purcotton Technology
Co., Ltd.; and since April 2021, she has been the Vice President of Shenzhen Purcotton Technology Co., Ltd.
Ms. Wang Ying, born in 1982, Chinese, without permanent residency abroad; Bachelor degree. She joined the Company in
July 2005. From January 2013 to May 2014, she was the Manager of Foreign Trade Department of Winner Industries
(Shenzhen) Co., Ltd.; from May 2014 to July 2016, she served as Deputy Director of Winner Medical Co., Ltd. and its
predecessor, International Trade Department; since May 2015, she has been a Supervisor of Winner Medical Co., Ltd.; from
July 2016 to December 2017, she was the Director of Marketing Department of Winner Medical Co., Ltd.; from September
2017 to February 2018, she was the Rotating CEO of Winner Medical Co., Ltd.; from January 2018 to December 2022, she
served as the Director and Deputy General Manager of Shenzhen PureH2B Technology Co., Ltd. She is now the Senior
Director of Commodity Department V of Winner Medical Co., Ltd. Currently, she also serves as Executive Partner of
Xiamen Yutong Investment Partnership (L.P.) and Supervisor of Winner Medical (Heyuan) Co., Ltd.
95
(3) Other senior management
Ms. Zhang Li, born in 1978, Chinese, without permanent residency abroad; Bachelor's degree. She joined Winner Medical
Co., Ltd. in September 2010 and
served as the Medical Business Marketing Director, R&D Director, Overseas Marketing Director, Sales Director and
Rotating CEO from September 2010 to June 2021. Currently, she is the Vice President for medical business marketing of the
Company.
Ms. Chen Huixuan, born in 1982, Chinese, without permanent residency abroad; Master's degree in Finance, University of
Glasgow, UK. From February 2007 to June 2009, she was an Analyst Assistant of Brean Murray, Carret & Co.; from
September 2009 to May 2015, she served as a Manager of the Investment Management Department of Winner Industries
(Shenzhen) Co., Ltd.; since May 2015, she has been the Deputy General Manager and Secretary to the Board of Directors of
Winner Medical Co., Ltd. At present, she also serves as an Executive Partner of Xiamen Huikang Investment Partnership
(L.P.) and Director of Chengdu Winner Likang Medical Products Co., Ltd. Ms. Chen Huixuan is currently a member of
Investor Relations Management Committee of Shenzhen Public Companies Association. She was awarded 5A (Highest) for
Performance Evaluation of Board Secretaries of Listed Companies by China Association for Pubilc Companies, and the 18th
and 19th New Fortune Gold Board Secretary.
Service status in the shareholder unit
√ Applicable Not applicable
Whether to
receive
Name of Position held in End date of
Shareholder unit name Start date of tenure remuneration or
staff shareholder unit tenure
allowance in the
shareholder unit
Li
Winner Group Limited Director April 8, 2003 No
Jianquan
Fang Xiamen Leyuan Investment Partnership
Executive partner May 2, 2013 No
Xiuyuan (limited partnership)
Wang Xiamen Yutong Investment Partnership
Executive partner May 2, 2013 No
Ying (limited partnership)
Chen Xiamen Huikang Investment
Executive partner May 2, 2013 No
Huixuan Partnership (limited partnership)
Description of service status in the shareholder unit None
Service status in other unit
√ Applicable Not applicable
Whether to
receive
Position held in End date of
Name of staff Other unit name Start date of tenure remuneration or
other unit tenure
allowance in
other unit
Li Jianquan Glory Ray Holdings Limited Director April 11, 2012 No
Li Jianquan Glory Ray Limited Director May 4, 2012 No
Shenzhen Purcotton Technology Chairman, general
Li Jianquan December 7, 2009 No
Co., Ltd. manager
Shenzhen Qianhai Purcotton E-
Li Jianquan Chairman July 21, 2015 No
commerce Co., Ltd.
Li Jianquan Winner Medical Malaysia Co., Ltd. Director July 17, 2013 No
96
2022 Annual Report
(Continued)
Whether to
receive
Position held in End date
Name of staff Other unit name Start date of tenure remuneration or
other unit of tenure
allowance in
other unit
Winner Medical (Hong Kong)
Li Jianquan Director January 14, 2008 No
Limited
Shenzhen PureH2B Technology Chairman, general
Li Jianquan January 25, 2018 No
Co., Ltd. manager
Shenzhen Cotton Lining
Li Jianquan Chairman July 9, 2019 No
Technology Innovation Co., Ltd.
Fanyu Innovation Holding
Li Jianquan Supervisor September 18, 2021 No
(Shenzhen) Co., Ltd.
Shenzhen Purcotton Technology
Fang Xiuyuan Director December 7, 2009 No
Co., Ltd.
Shenzhen Qianhai Purcotton E-
Fang Xiuyuan Director July 21, 2015 No
commerce Co., Ltd.
Winner Medical (Huanggang) Co.,
Fang Xiuyuan Director January 14, 2005 No
Ltd.
Huanggang Winner Cotton Industry
Fang Xiuyuan Director October 18, 2010 No
Co., Ltd.
Winner Medical (Chongyang) Co.,
Fang Xiuyuan Director November 13, 2001 No
Ltd.
Fang Xiuyuan Winner Medical (Jiayu) Co., Ltd. Director February 20, 2001 No
Winner Medical (Jingmen) Co.,
Fang Xiuyuan Director December 15, 1995 No
Ltd.
Yichang Winner Medical Textile
Fang Xiuyuan Director April 22, 1999 No
Co., Ltd.
Winner Medical (Tianmen) Co.,
Fang Xiuyuan Director February 23, 2001 No
Ltd.
Fang Xiuyuan Winner Medical (Heyuan) Co., Ltd. Director May 18, 2016 No
Fang Xiuyuan Winner Medical (Wuhan) Co., Ltd. Director January 23, 2017 No
Winner Medical (Hong Kong)
Fang Xiuyuan Director January 14, 2008 No
Limited
Chengdu Winner Likang Medical
Fang Xiuyuan Director May 31, 2009 No
Products Co., Ltd.
Shenzhen PureH2B Technology
Fang Xiuyuan Director January 25, 2018 No
Co., Ltd.
Shenzhen Cotton Lining
Fang Xiuyuan Director July 9, 2019 No
Technology Innovation Co., Ltd.
Zhejiang Longterm Medical
Fang Xiuyuan Chairman May 10, 2022 No
Technology Co., Ltd.
Xu Xiaodan Winner Medical (Heyuan) Co., Ltd. Director May 18, 2016 No
Xu Xiaodan Winner Medical (Wuhan) Co., Ltd. Director January 23, 2017 No
Director, general
Guo Zhenwei Sequoia Capital China October 1, 2010 Yes
manager
Guo Zhenwei Deqing Jiajun Beverage Co., Ltd. Director April 22, 2015 No
Sichuan Vanov New Material Co.
Guo Zhenwei Director December 5, 2017 No
Ltd.
Shanghai Shouquanzhai E-
Guo Zhenwei Director July 13, 2018 No
commerce Co., Ltd.
Guo Zhenwei LOHO Holding Inc. Director July 2, 2018 No
97
(Continued)
Whether to receive
Position held in End date remuneration or
Name of staff Other unit name Start date of tenure
other unit of tenure allowance in other
unit
New Dynamics China Holding
Guo Zhenwei Director September 2, 2019 No
Company
Shijiazhuang Junlebao Dairy Co.,
Guo Zhenwei Director March 16, 2020 No
Ltd.
Guo Zhenwei Lium Group Co., Ltd. Director January 14, 2020 No
Hangzhou Dahiti Science &
Guo Zhenwei Director May 21, 2020 No
Technology Co., Ltd.
Genki Forest Technology Group
Guo Zhenwei Director December 1, 2020 No
Holdings Limited
Shanghai Ruishu Electronic
Guo Zhenwei Director August 26, 2020 No
Commerce Co., Ltd.
Shanghai Wanwuyouyang Catering
Guo Zhenwei Director April 8, 2021 No
Management Co., Ltd.
Shanghai Huaqiao Catering
Guo Zhenwei Director July 5, 2021 No
Management Co., Ltd.
Sichuan Haocaitou Industrial Co.,
Guo Zhenwei Director March 30, 2020 No
Ltd.
Guo Zhenwei Pucheng Dairy (Group) Co., Ltd. Supervisor March 12, 2021 No
College Dean
Southern University of Science and
Key Ke Liu and Chair February 19, 2016 Yes
Technology
Professor
Key Ke Liu Puritek Company Ltd. Director January 1, 2019 Yes
Key Ke Liu Carnegie–Tsinghua Center Director January 1, 2015 No
International Pittsburgh Coal
Key Ke Liu Director January 1, 2015 No
Conference Organization
Honorary
Key Ke Liu Zhejiang University Professor and January 1, 2014 No
Doctorial tutor
Key Ke Liu Center for China and Globalization Vice Chairman January 1, 2012 No
Peng Jianfeng Renmin University of China Professor September 1, 1996 Yes
Independent
Peng Jianfeng Jinko Power Technology Co., Ltd. June 29, 2017 Yes
Director
Hytera Communications Corporation
Peng Jianfeng Director December 6, 2019 Yes
Limited
Peng Jianfeng CCB Trust Co., Ltd. Director March 25, 2020 Yes
China Stone Management Consulting Executive
Peng Jianfeng January 12, 2006 No
Ltd. director
Hunan Happy Times Network
Peng Jianfeng Director December 31, 2015 No
Technology Co., Ltd.
Siwod Education Technology Co.,
Peng Jianfeng Director January 17, 2018 No
Ltd.
Jiangxi Siwod Commercial
Peng Jianfeng Director November 18, 2014 No
Development Co., Ltd.
Executive
China Stone (Beijing) Corporation
Director,
Peng Jianfeng Culture Management Consulting Co., November 16, 2004 No
General
Ltd.
Manager
Beijing China Stone Human Resource Executive
Peng Jianfeng October 30, 2003 No
Consulting Co., Ltd. director
98
2022 Annual Report
(Continued)
Whether to receive
Position held in End date remuneration or
Name of staff Other unit name Start date of tenure
other unit of tenure allowance in other
unit
Hangzhou China Stone Management
Peng Jianfeng Director May 6, 2009 No
Consulting Co., Ltd.
Beijing Ice Smart Technology Co.,
Peng Jianfeng Director June 1, 2012 No
Ltd.
Beijing China Stone Hunting
Peng Jianfeng Supervisor July 9, 2019 No
Network Technology Co., Ltd.
Beijing China Stone Human
Peng Jianfeng Resources Management Services Co., Supervisor April 21, 2016 No
Ltd.
Beijing 51 Newbie Education
Peng Jianfeng Supervisor November 13, 2015 No
Technology Co., Ltd.
Dahua Certified Public Accountants
Xie Jiawei Partner May 4, 2010 Yes
Co., Ltd. Shenzhen Branch
Han's Laser Technology Industry Independent
Xie Jiawei June 28, 2017 Yes
Group Co., Ltd. Director
Shenzhen PureH2B Technology Co.,
Wang Ying Director January 25, 2018 No
Ltd.
Wang Ying Winner Medical (Heyuan) Co., Ltd. Supervisor May 18, 2016 No
Shenzhen Purcotton Technology Co., Director and
Liu Hua January 5, 2015 No
Ltd. Vice President
Chengdu Winner Likang Medical
Chen Huixuan Director May 1, 2018 No
Products Co., Ltd.
Description of service status in other unit None
Punishment of current directors, supervisors and senior management of the Company and those who left during the reporting
period by securities regulators in recent three years
Applicable √ Not applicable
3. Remuneration of Directors, Supervisors and Senior Management
Decision-making procedures, determination basis and actual payment of remuneration of directors, supervisors and senior
management
The remuneration of directors, supervisors and senior managers consists of wages, allowances and bonuses. The Company's
board of directors has a remuneration and assessment committee responsible for formulating performance evaluation
standards, procedures, systems, and main schemes and rewards and punishments. The remuneration plans of directors,
supervisors and senior managers have all gone through the corresponding deliberation procedures in accordance with the
Articles of Association, Remuneration Management System and other corporate governance systems.
99
Remuneration of directors, supervisors and senior management during the reporting period
Unit: '0,000 yuan
Whether to get
Total pretax
remuneration
Status of remuneration
Name Position Gender Age from related
service received from the
parties of the
Company
Company
Li Jianquan Chairman and General Manager Male 66 Incumbent 368.92 No
Fang Director, Deputy General
Male 55 Incumbent 175.98 No
Xiuyuan Manager, Chief Financial Officer
Xu Xiaodan Director Female 35 Incumbent 146.37 No
Guo
Director Male 39 Incumbent 0 No
Zhenwei
Peng
Independent Director Male 62 Incumbent 18 No
Jianfeng
Xie Jiawei Independent Director Female 50 Incumbent 18 No
Key Ke Liu Independent Director Male 59 Incumbent 18 No
Zhang Chairman of the Board of
Female 37 Incumbent 66.54 No
Tingting Supervisors
Wang Ying Supervisor Female 41 Incumbent 103.49 No
Employee Representative
Liu Hua Female 50 Incumbent 133.46 No
Supervisor
Zhang Li Deputy general manager Female 45 Incumbent 187.93 No
Deputy General Manager,
Chen
Secretary to the Board Of Female 41 Incumbent 107.92 No
Huixuan
Directors
Total -- -- -- -- 1,344.61 --
VIII. Performance of duties by directors during the reporting period
1. Board of Directors during the reporting period
Meeting session Convening date Date of disclosure Resolutions of the meeting
Deliberated and approved the “Proposal on the
The 5th meeting of the Third
April 8, 2022 April 11, 2022 Acquisition of 55% Equity Interest In
Board of Directors
Longterm Medical”
Deliberated and approved the “Proposal on the
The 6th meeting of the Third
April 20, 2022 April 22, 2022 2021 Annual Report and Its Abstract” and
Board of Directors
other matters
Deliberated and approved the “Proposal on the
The 7th meeting of the Third Acquisition of Controlling Interest in Winner
May 17, 2022 May 18, 2022
Board of Directors Medical (Hunan) Co., Ltd. and the Increase in
Capital”
The 8th meeting of the Third Deliberated and approved the “Proposal on the
June 2, 2022 June 6, 2022
Board of Directors 2021 Corporate Social Responsibility Report”
Deliberated and approved the “Proposal on the
The 9th meeting of the Third
August 16, 2022 August 18, 2022 2022 Semi-Annual Report and Its Abstract”
Board of Directors
and other matters
The 10th meeting of the Deliberated and approved the “Proposal on the
October 24, 2022 October 25, 2022
Third Board of Directors Q3 2022 Report”
100
2022 Annual Report
2. Attendance of directors at the board meetings and the general meeting of shareholders
Attendance of directors at the board meetings and the general meeting of shareholders
Times of Times of
Times of
attending the Times of attending the Times of Times of Whether he has
attending
board attending the board attending the absences from not attended two
Name of the general
meetings board meetings board the board consecutive
Directors meeting of
during this meetings on using meetings by meetings by board meetings
shareholder
reporting site communicatio proxy proxy in person
s
period n
Li Jianquan 6 3 3 0 0 No 1
Fang
6 3 3 0 0 No 1
Xiuyuan
Xu Xiaodan 6 3 3 0 0 No 1
Guo
6 0 6 0 0 No 1
Zhenwei
Peng
6 0 6 0 0 No 1
Jianfeng
Xie Jiawei 6 0 6 0 0 No 1
Key Ke Liu 6 0 6 0 0 No 1
Explanation of not attending the board meeting in person for two consecutive times
N/A
3. Objections made by directors on relevant matters
Whether the director raises any objection to the relevant matters of the Company
Yes √ No
During the reporting period, the directors did not raise any objection to the relevant matters of the Company.
4. Other descriptions of the performance of duties by the directors
Whether the relevant suggestions of the director to the Company have been adopted
√ Yes No
Explanation of the relevant suggestions of the director to the Company have or have not been adopted
During the reporting period, the Company's directors could faithfully and diligently perform their duties in strict accordance
with the Company Law of the People's Republic of China, the Securities Law of the People's Republic of China, other
relevant laws and regulations and the Articles of Association,
actively attend relevant meetings on time, and seriously deliberate various proposals By telephone, email, site visits and other
forms, the independent directors kept communication with other directors, senior management and related personnel of the
Company, actively acquire the Company's production and operation situation and financial position, put forward positive
suggestions on the Company's development strategy and improvement of corporate governance, and expressed independent
opinions on the Company's periodic reports, remuneration of directors and senior management and other matters,
guaranteeing the fairness and objectivity of the decisions made by the Company's Board of Directors. The directors of the
Company fulfilled their duties faithfully and diligently, strove to safeguard the overall interests of the Company and the
legitimate rights and interests of the majority of minority shareholders, and played a positive role in the standardized
operation and healthy development of the Company.
101
IX. Situation of special committees under the Board of Directors during the reporting
period
Numb Details
Important Performan
Name of er of Conveni of
Members Content comments and ce of other
committee meeti ng date objection
suggestions duties
ngs (if any)
Ensure that the
Review the
financial
Audit Company's
statements truly,
Committe Xie Jiawei, 1. Internal Audit Work Report for Q4 2021 financial
Februar accurately and
e of the Key Ke Liu 2. Internal Audit Work Plan for Q1 2022 data and
1 y 7, completely None
Third and Fang 3. Summary Report of Audit Committee for Q4 related
2022 reflect the
Board of Xiuyuan 2021 written
Company's
Directors reports on
overall financial
site
position
Ensure that the
1. Proposal on the 2021 Annual Report and Its Review the
financial
Audit Abstract Company's
statements truly,
Committe Xie Jiawei, 2. Proposal on the Q1 2022 Report financial
accurately and
e of the Key Ke Liu April 8, 3. Proposal on the Renewal of the Appointment data and
1 completely None
Third and Fang 2022 of the Accounting Firm for the Year 2022 related
reflect the
Board of Xiuyuan 4. Internal Audit Work Report for Q1 2022 written
Company's
Directors 5. Internal Audit Work Plan for Q2 2022 reports on
overall financial
6. Audit Committee Work Report for Q1 2022 site
position
Ensure that the
Review the
financial
Audit Company's
1. Proposal on the 2022 Semi-Annual Report statements truly,
Committe Xie Jiawei, financial
August and Its Abstract accurately and
e of the Key Ke Liu data and
1 12, 2. Internal Audit Work Report for Q2 2022 completely None
Third and Fang related
2022 3. Internal Audit Work Plan for Q3 2022 reflect the
Board of Xiuyuan written
4. Audit Committee Work Report for Q2 2022 Company's
Directors reports on
overall financial
site
position
Ensure that the
Review the
financial
Audit 1. Proposal on the Q3 2022 Report Company's
statements truly,
Committe Xie Jiawei, 2. Proposal on the Use of Part of Idle Proceeds financial
October accurately and
e of the Key Ke Liu for Cash Management data and
1 21, completely None
Third and Fang 3. Internal Audit Work Report for Q3 2022 related
2022 reflect the
Board of Xiuyuan 4. Internal Audit Work Plan for Q4 2022 written
Company's
Directors 5. Audit Committee Work Report for Q3 2022 reports on
overall financial
site
position
Actively
follow the
Strategy Li Jianquan,
The Company progress of
and Social Fang
shall actively undertakin
Responsib Xiuyuan,
undertake social g social
ility Xu
May 30, Proposal on the 2021 Corporate Social responsibility responsibil
Committe Xiaodan, 1 None
2022 Responsibility Report and practice ity and the
e of the Guo
environmental preparation
Third Zhenwei
protection progress of
Board of and Peng
concept the social
Directors Jianfeng
responsibil
ity report
Remunerat 1. Proposal on the Confirmation of the Understand
ion Peng Remuneration of Non-Independent Directors Ensure that the the
Committe Jianfeng, April in 2021 salary level is in formulatio
e of the Xie Jiawei 1 18, 2. Proposal on the Confirmation of the line with the n process None
Third and Li 2022 Remuneration of Senior Management in 2021 company of the
Board of Jianquan 3. Proposal on the Revocation of Part of performance remunerati
Directors Granted Restricted Shares Not Yet Vested on scheme
X. Work of the Board of Supervisors
102
2022 Annual Report
Does the board of supervisors find any risks in the supervision activities of the Company during the reporting period
Yes √ No
The Board of Supervisors has no objection to the supervisory matters during the reporting period
XI. Company Employees
1. Number of employees, professional composition and educational background
Number of employees in the parent company at the end of the reporting period
1,965
(person)
Number of employees in main subsidiaries at the end of the reporting period
12,977
(person)
Total number of employees at the end of the reporting period (person) 14,942
Total number of employees receiving salary in the current period (person) 14,942
Number of retired employees whose expenses need to be borne by the parent
45
company and major subsidiaries (person)
Professional composition
Professional composition categories Number of professionals (person)
Production personnel 7,491
Sales personnel 3,733
Technical personnel 1,588
Financial personnel 160
Administrative personnel 1,970
Total 14,942
Education background
Education background categories Number (person)
Master's degree or above 206
Bachelor 1,898
Bachelor's degree or below 12,838
Total 14,942
Production
personnel
Sales personnel Master degree
or above
Professional Education
Technical composition Bachelor
background
personnel
Financial Bachelor
personnel degree or below
Administrative
personnel
103
2. Pay policy
Match the Company's strategic intent and BP target upgrading strategy, adjust from target bonus system to performance
sharing system, enhance teams' sense of acquisition, improve the sense of responsibility and mission of core and backbone
employees, and implement the business partner mechanism. Design a remuneration and incentive system, which should be
built based on position ranking system and post-value assessment, keep the fixed salary in line with the market level, target
the 50th - 75th percentiles salary for core and backbone employees, and be favorable for employees with excellent
performance. The remuneration scheme follows the principle of “ranking by position, setting salary by ranks, paying by
performance, adjusting salary by post changes”, and conducts evaluation and distribution based on final contributions.
Highlight integrated teamwork rather than sharing individual contributions, build a closed performance management
mechanism from strategy, organization to individuals, adopt a balanced scorecard for organizational performance, and link
individual performance to organizational KPIs, while the performance results can be used as the basis for bonus distribution.
Variable compensation employs the distribution logic of stock and excess bonuses, with high incentive for excess business
and shared revenue. The design logic encourages ambitious, high-quality and high-efficiency growth, and promotes the
overall pursuit of short- and long-term benefits, building the capacity of daring to compete and being able to win. Introduce
supplementary insurance on top of the basic social insurance, such as personal accident insurance and supplemental medical
insurance. The Company gradually improves the employee welfare system, starting from basic needs such as: transportation
and catering subsidies, to higher-level needs such as: reunion and anniversary gifts, and provides various forms of welfare to
enhance employees' sense of security, happiness and identity.
3. Training plan
The Company puts forward the concept of “high-quality, high-efficiency, high-performance and high-return talents” as the
targets of talent attraction and training. It constantly upgrades talent structure, enhances talent team building, improves talent
density, and continues to strengthen the capacity building and training of leading talents and professionals. First, a dual-
channel development mechanism and qualification system has been set up, encouraging professionals to conduct further
research and create value in their areas of expertise to meet the Company's growing demand for professional capacity
enhancement and caring of professionals, and promote talent specialization and diversification. Second, conduct talent
inventory to identify potential outstanding talents, set benchmarks, and improve talent density in the value plateau. Third,
carry out extensive “industry-university-research collaboration”, strengthen cooperation and exchange with universities and
research institutions, continuously introduce top technical talents, improve the comprehensive quality and professional ability
of talent teams, improve innovation in technology R&D to be a true influencer in the medical industry. Fourth, take the
initiative to build training and development systems, carry out special training on leadership, skills for product line/marketing
line, cost reduction and efficiency, team leaders, corporate culture interpretation and promotion, general knowledge, etc.,
allowing for the empowerment of key areas and posts, talent development, and improvement of generalist skills in all areas of
expertise available throughout the system. Finally, the Company attaches great importance to the new generation of
employees. It systematically promotes the training and development of college students, including camp training, assignment
of mentors, rotational practice, and fixed-term development. This forms a closed-loop management for the training and
development of young talents, comprehensively improves their multi-dimensional development, such as cultural integration,
product knowledge, professional skills and professionalism, helping them transform from students in campus to elites in
workplace. All kinds of training systems, covering management, professional and general training systems, have been
prepared for all professional fields. We focus on annual strategic planning and capacity building of key positions by offering
special training. Internal training and external training can be combined to enrich the existing curriculum. Moreover, the
Company integrates online platform resources with offline practical projects to provide rich training resources, continuously
iterate the curriculum system according to the development and changes of the business, and keep on expanding the faculty to
help build the talent team and improve professional capabilities, to support the achievement of the Company's business goals.
4. Labor outsourcing
Applicable √ Not applicable
104
2022 Annual Report
XII. Profit distribution and share capital increase from capital surplus
Profit distribution policy during the reporting period, especially the formulation, implementation or adjustment of cash
dividend policy
Applicable √ Not applicable
The Company's profit distribution plan and capital surplus converted into a share capital plan in the reporting period are
consistent with the relevant provisions of the articles of association and dividend management measures
√ Yes No Not applicable
The Company's profit distribution plan and capital surplus converted into a share capital plan in the reporting period conform
to the relevant provisions of the articles of association. Profit distribution and share capital increase from capital surplus in
current year
Bonus shares per 10 shares (shares) 0
Dividend per 10 shares (RMB) (tax included) 19.00
Increase shares per 10 shares (shares) 4
Share capital base in distribution plan (shares) 419,737,649
Amount of cash dividend (RMB) (including tax) 797,501,533.10
Amount of cash dividend in other forms (e.g. share repurchase) (RMB) 242,041,693.07
Total cash dividends (including other methods) (RMB) 1,039,543,226.17
Distributive profit (RMB) 4,868,449,855.81
Proportion of total cash dividends (including other methods) in total profit
100.00%
distribution
This cash dividends
Others
Detailed description of the proposal of profit distribution or share capital increase from accumulation fund
According to the Audit Report of Winner Medical Co., Ltd. in 2022 issued by BDO CHINA SHU LUN PAN CERTIFIED
PUBLIC ACCOUNTANTS LLP, the net profit attributable to the shareholders of the parent company in the consolidated
statements of the Company in 2022 is RMB 1,650,582,427.43, and the net profit of the income statement of the parent
company in 2022 is RMB 1,854,821,524.21. As of December 31, 2022, the parent company's profit available for distribution
is RMB 4,868,449,855.81.
In line with the principle of repaying shareholders and sharing the Company's operating results with shareholders, taking into
account the reasonable return of investors and the long-term development of the Company, and on the premise of ensuring
the normal business development of the Company, the annual profit distribution plan for 2022 is proposed as follows: on the
date of disclosure of the distribution plan, the total capital stock of the Company is 426,492,308, of which, 6,754,659 is held
in the special securities account for repurchase. Based on the capital stock of 419,737,649 after deducting the repurchased
shares, it is planned to distribute cash dividends of RMB 19.00 (tax included) per 10 shares to all shareholders by the transfer
of 4 shares for every 10 shares excluding bonus shares, with total cash dividends of RMB 797,501,533.10 (accounting for
about 48.32% in the net profit attributable to the shareholders of the parent company in the consolidated statements). After
implementing the above profit distribution plan, the remaining undistributed profit of the parent company is RMB
4,070,948,322.71, which will continue to be retained by the Company to support the Company's business development.
In case of any change from the disclosure to the implementation of the distribution plan due to the listing of new shares, the
granting and exercising of equity incentive, the conversion of convertible bonds into shares, share repurchase, etc., the
proportion will be adjusted according to the principle that the proportion of cash dividends will remain unchanged but the
total amount of cash dividends will change.
The Company made profits during the reporting period and the profits available for distribution to shareholders of the parent
company were positive, but no distribution plan for cash dividends.
Applicable √ Not applicable
105
XIII. Implementation of the Company's equity incentive plan, employee stock ownership
plan or other employee incentive measures
√ Applicable Not applicable
1. Share Incentive
The Company held the 15th meeting of the Second Board of Directors and the 9th meeting of the Second Board of
Supervisors on November 27, 2020, as well as the 6th Extraordinary General Meeting of Shareholders 2020 on December 15,
2020, respectively, deliberated and approved the “Proposal on the 2020 Restricted Stock Incentive Plan (Draft) and Its
Abstract” and related matters. The General Meeting of Shareholders authorized the Board of Directors to determine the grant
date of restricted shares, and relevant matters which is necessary to grant restricted shares to the incentive object and go
through the procedures for granting restricted shares when the incentive object meets the conditions. For details, please refer
to relevant announcements disclosed by the Company on CNINFO.com (http://www.cninfo.com.cn) on December 16, 2020
and November 30, 2020.
On December 18, 2020, the Company held the 17th meeting of the Second Board of Directors and the 11th meeting of the
Second Board of Supervisors respectively, deliberated and approved the “Proposal on the Matters Related to the Adjustment
of 2020 Restricted Shares Incentive Plan” and the “Proposal on the First Grant of Restricted Shares to the Incentive Objects”,
and determined that December 18, 2020 will be the grant date of the incentive plan, 5.833 million restricted shares will be
granted to 1,036 eligible incentive objects. For details, please refer to relevant announcement disclosed by the Company on
CNINFO.com (http://www.cninfo.com.cn) on December 22, 2020.
The Company held the 6th meeting of the Third Board of Directors and the 5th meeting of the Third Board of Supervisors on
April 20, 2022, as well as the Annual General Meeting of Shareholders 2021 on May 13, 2021, respectively, deliberated and
approved the “Proposal on the Revocation of Partially Granted Restricted Shares Not Yet Vested”. 3.366925 million granted
but unvested restricted shares were revoked, because some incentive recipients could not meet the incentive conditions due to
their demission or holding the post of supervisors, while the Company failed to complete the incentive assessment targets for
2021. For details, please refer to relevant announcements disclosed by the Company on CNINFO.com
(http://www.cninfo.com.cn) on April 22, 2022.
Equity incentive granted to directors and senior management
√ Applicable Not applicable
Unit: share
Numb
Numb Number
Number er of Exercise Market Numb
Number er of Numbe of Number Number
of new shares price of price at er of
of stock exerci r of restricte of new Grant of
stock exerci shares the end shares
options sable stock d shares restricted price of restricte
options sed exercised of the unloc
held at shares options held at shares restricted d shares
Name Position granted durin during the reporti ked in
the durin held at the granted shares held at
during g the reporting ng the
beginni g the the end beginni during the (RMB / the end
the report period period curren
ng of report of the ng of reporting share) of the
reportin ing (RMB / (RMB / t
the year ing period the period period
g period perio share) share) period
period period
d
Li Chairman
Jianq , general 0 0 0 0 0 0 71.5 80,000 0 0 0 40,000
uan manager
Director,
deputy
Fang general
Xiuyu manager, 0 0 0 0 0 0 71.5 50,000 0 0 0 25,000
an chief
financial
officer
Xu
Xiaod Director 0 0 0 0 0 0 71.5 30,000 0 0 0 15,000
an
Chen Deputy
Huixu general 0 0 0 0 0 0 71.5 30,000 0 0 0 15,000
an manager,
106
2022 Annual Report
secretary
to the
Board of
Directors
Deputy
Zhan
general 0 0 0 0 0 0 71.5 40,000 0 0 0 20,000
g Li
manager
Total -- 0 0 0 0 -- 0 -- 230,000 0 0 -- 115,000
Remark (if any) None
Evaluation mechanism and incentive of senior management
The Company has established a target accountability evaluation system for senior management and an annual performance
appraisal system for senior management teams, examined and evaluated the senior management according to the examination
and evaluation system, taking into account the long-term development needs of the Company from the Company's business
performance, individual level and scientific perspective
2. Implementation of Employee Stock Ownership Plan
Applicable √ Not applicable
3. Other Employee Incentive Measures
Applicable √ Not applicable
XIV. XIV. Establishment and implementation of internal control system in the reporting
period
1. Establishment and implementation of internal control
During the reporting period, the Company adhered to the risk-oriented principle. It continually improved and optimized the
Company's internal control system on the basis of daily supervision and special supervision of internal control according to
the Basic Norms of Enterprise Internal Control and its supporting guidelines and other internal control supervision
requirements, combined with the internal control system and evaluation methods to constantly adapt to the changes in the
external environment and the requirements of internal management. According to the operation, analysis and evaluation of
the internal control system, the Company effectively prevented risks in management and promoted the realization of internal
control objectives.
2. Details of significant internal control defects discovered during the reporting period
Yes √ No
XV. Management and control of the Company over its subsidiaries during the
reporting period
Problems Follow-
Company Solutio
Integration plan Integration progress encounter Progress up
name ns taken
ed solution
Longterm Build and improve the corporate The Company sets out clear
None N/A N/A N/A
Medical governance structures for requirements through the
107
Winner subsidiaries, assign directors, authority and responsibility
Medical supervisors and financial officers operation manual that, for
(Hunan) to the subsidiaries, and appoint material matters related to
general managers. Clarify the corporate governance structure
Winner General Manager Responsibility and system, strategic planning,
Guilin System under the Group's control investment and financing
structure; formulate effective activities, asset leasing and
plans for business empowerment, transfer, financial management,
control and synergy according to human resources, compliance and
the business conditions of risk control, information
subsidiaries; improve the technology projects and other
efficiency of corporate operations, operational activities, subsidiaries
Junjian and promote the subsidiaries' shall, in accordance with the
Medical compliance as well as orderly, authorization system, report to the
steady development. Company for approval before
implementation, and submit such
material matters to the Company's
Board of Directors for review and
approval as per regulations.
XVI. Self-evaluation report or audit report of internal control
1. Internal control self-evaluation report
Disclosure date of full text of internal control evaluation report April 25, 2023
Disclosure index of full text of internal control evaluation report CNINFO.com (http://www.cninfo.com.cn)
The proportion of the total assets of the unit included in the scope of
evaluation in the total assets of the Company's consolidated financial 98.47%
statements
The proportion of the operating income of the unit included in the scope of
evaluation in the operating income of the Company's consolidated financial 91.24%
statements
Defect identification standard
Class Financial report Non-financial report
Significant defect: Significant defects: lack of democratic
1) The control environment is invalid; decision-making process; the decision-making
2) The directors, supervisors and senior management of the process leads to major errors, the important
Company commit fraud and cause significant losses and business lacks system control or is
adverse effects to the Company; systematically invalid, and lack of effective
3) The certified public accountant finds that there is material compensatory control; the loss of middle and
misstatement in the current financial report, which is not senior managers and senior technicians is
found by the internal control in the process of operation; serious; the results of internal control
4) The supervision of the Company's Audit Committee and the evaluation, especially the significant defects,
internal audit institution over the internal control is invalid. have not been rectified; other situations that
Major defects: have a significant negative impact on the
Qualitati 1) Failure to select and apply accounting policies in Company.
ve accordance with generally accepted accounting principles; Major defects: democratic decision-making
standard 2) No anti-fraud procedures and control measures have been process exists but is not perfect; the decision-
established; making process leads to general errors; there
3) There is no corresponding control mechanism established or are defects in important business systems or
no implementation of and no corresponding compensatory system; the loss of business personnel in key
control for the accounting treatment of non-routine or positions is serious; the results of internal
special transactions; control evaluation, especially the major
4) There are one or more defects in the control of the financial defects, have not been rectified; other
reporting process at the end of the period, and it can not situations that have a large negative impact on
reasonably guarantee the prepared financial statements to the Company.
achieve the true and accurate goal. Common defects: the decision-making
Common defects: Other internal control defects that do not process is inefficient; the general business
constitute significant defects or major defects. systems or system has defects; the loss of
108
2022 Annual Report
business personnel in general positions is
serious; general defects have not been
rectified.
Significant defects:
1. potential misstatement of operating income ≥ 2% of the total
operating income in the consolidated financial statement;
2. potential misstatement of total profit ≥ 5% of the total profit
in the consolidated financial statement;
3. potential misstatement of total assets ≥ 2% of the total assets
in the consolidated statement
Major defects:
1. 1% of the operating income in the consolidated financial Significant defects: the amount of loss
statement ≤ potential misstatement of operating income ＜ accounted for 5% or more of the total profit in
2% of the operating income in the consolidated financial the audited consolidated financial statement of
statement; the previous year;
2. 2% of the total profit in the consolidated financial statement Major defects: the amount of loss accounted
Quantitat
≤ potential misstatement of the total profit < 5% of the total for 2% (included) to 5% of the total profit in
ive
profit in the consolidated financial statement; the audited consolidated financial statement of
standards
3. 1% of the total assets in the consolidated financial statement the previous year;
≤ potential misstatement of total assets < 2% of the total Common defects: the amount of loss is less
assets in the consolidated financial statement. than 2% of the total profit in the audited
Common defects: consolidated financial statement of the
1. potential misstatement of operating income < 1% of the total previous year
operating income in the consolidated financial statement;
2. potential misstatement of total profit < 2% of the total profit
in the consolidated financial statement
3. potential misstatement of total assets < 1% of the total assets
in the consolidated statement
When the potential misstatement caused by an internal control
defect affects multiple indexes, the nature of the defect shall be
determined according to the principle of which is lower.
Number of significant defects in financial report 0
Number of significant defects in non-financial report 0
Number of major defects in financial report 0
Number of major defects in non-financial report 0
2. Internal control audit report or authentication report
N/A
XVII. Rectification of self-inspection problems in the special action on governance of
listed companies
Not applicable.
109
05
Environment and
Social Responsibility
110
2022 Annual Report
I. Major environmental issues
Whether the listed company and its subsidiaries are key pollutant discharging units announced by environmental protection
authorities
√ Yes No
Environmental protection-related policies and industry standards
The Company strictly complies with environmental protection related laws and regulations in its daily production and
operation, including the Environmental Protection Law of the People's Republic of China, the Law of People's Republic of
China on Environmental Impact Assessment and Protection, the Law of the People's Republic of China on the Prevention and
Control of Atmospheric Pollution, the Law of the People's Republic of China on Prevention and Control of Environmental
Pollution by Solid Waste, the Water Pollution Prevention and Control Law of the People's Republic of China, the Law of the
People's Republic of China on the Prevention and Control of Environmental Noise Pollution, Regulations on Administration
of Pollutant Discharge Permits, and the Measures for the Management of Automatic Pollution Sources Monitoring and
Guidelines for Automatic Pollution Sources Monitoring and Management Technology of Hubei Province; and strictly
implements relevant national emission standards, including the Discharge Standards of Water Pollutants for Dyeing and
Finishing of Textile Industry (GB4287-2012), the Integrated Wastewater Discharge Standard (GB8978-1996), the Integrated
Emission Standard of Air Pollutants (GB16297-1996), the Emission Standard of Air Pollutants for Boiler (GB 13271-2014),
the Emission Standards for Odorous Pollutants (GB14554-1993), and the Emission Standard for Industrial Enterprises Noise
at Boundary (GB 12348—2008).
Pollutant discharge permit for environmental protection
All subsidiaries of the Company have applied for discharge permits in accordance with relevant technical specifications,
including Technical Specifications for the Application and Issuance of Pollutant Permit - General Rules (HJ942-2018),
Technical Specifications for the Application and Issuance of Pollutant Permit - Textile and Dyeing Industry (HJ 861—2017),
Technical Specifications for the Application and Issuance of Pollutant Permit - Boiler (HJ953—2018), Technical
Specifications for the Application and Issuance of Pollutant Permit - General Wastewater Treating Process (HJ1120—2020),
Self-monitoring Technology Guidelines for Pollution Sources - General Rules (HJ 819-2017), Technical Specifications for
Environmental Management Ledger and Emission Permit Implementation Report for Pollution Sources - General Rules
(Trial) (HJ944-2018), Self-monitoring Technology Guidelines for Pollution Sources - Textile and Dyeing Industry (HJ 879-
2017), and Self-monitoring Technology Guidelines for Pollution Sources - Thermal Power Generation and Boiler (HJ 820-
2017).
The status of emission permits for each branch and subsidiary is as follows:
Date of registration
Subsidiaries Closing date Validity Certificate No. Remark
and issuance
Chongyang
August 12, 2020 August 12, 2020 August 11, 2023 91421223732699160U003P Registered
Plant I
Chongyang
April 28, 2020 April 28, 2020 April 27, 2025 91421223732699160U001P Registered
Plant II
Chongyang
April 28, 2020 April 28, 2020 April 27, 2025 91421223732699160U002w Applied
Plant III
September 22, September 21,
September 22, 2020 91421100767435675X001V Applied
2020 2023
Winner Medical
September 21,
(Huanggang) May 27, 2021 September 22, 2020 91421100767435675X001V Re-applied
2023
Co., Ltd.
September 21,
August 27, 2021 September 22, 2020 91421100767435675X001V Changed
2023
Winner Medical
August 21, 2020 August 21, 2020 August 20, 2023 914212217261049092001V Applied
(Jiayu) Co., Ltd.
Winner Medical August 27, 2020 August 27, 2020 August 26, 2023 914208006158216140001P Applied
(Jingmen) Co., June 29, 2021 August 27, 2020 August 26, 2023 914208006158216140001P Changed
Ltd. March 11, 2022 August 27, 2020 August 26, 2023 914208006158216140001P Re-applied
111
(Continued)
Date of registration
Subsidiaries Closing date Validity Certificate No. Remark
and issuance
August 01, 2020 August 06, 2020 August 05, 2023 914290067261112368001P Applied
Winner Medical
September 1, 2022 August 31, 2022 August 30, 2027 914290067261112368001P Re-applied
(Tianmen) Co.,
Ltd. December 13,
August 31, 2022 August 30, 2027 914290067261112368001P Changed
2022
Winner Medical September 1, 2020 September 1, 2020 August 31, 2023 91420000MA48TD7BXB001V Applied
(Wuhan) Co.,
Ltd. July 18, 2022 September 1, 2020 August 31, 2023 91420000MA48TD7BXB001V Changed
Yichang Winner
Medical Textile April 30, 2020 April 30, 2020 April 29, 2025 91420583706860379K001W Registered
Co., Ltd.
July 27, 2020 July 27, 2020 July 26, 2023 914503008988813841001U Applied
Winner Guilin
March 04, 2022 July 27, 2020 July 26, 2023 914503008988813841001U Re-applied
Latex Co., Ltd.
July 20, 2022 July 27, 2020 July 26, 2023 914503008988813841001U Changed
First
June 05, 2020 June 5, 2020 June 4, 2025 91430723565949803B001X
registration
Winner Medical
Change of
(Hunan) Co., May 5, 2022 June 5, 2020 June 4, 2025 91430723565949803B001X
registration
Ltd.
Change of
August 27, 2022 June 5, 2020 June 4, 2025 91430723565949803B001X
registration
Zhejiang First
May 29, 2020 May 29, 2020 May 28, 2025 91330500051340478U001Z
Longterm registration
Medical
Technology Co., November 11, Change of
May 29, 2020 May 28, 2025 91330500051340478U001Z
Ltd. 2021 registration
Administrative license 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 (Chong E.P.B [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 an annual production of 800 tons” obtained the EIA
approval from the 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 EIA approval (Jiayu E.P.B. Letter [2014] No. 083) from the Environmental
Protection Bureau of Jiayu County on December 25, 2014, and passed the environmental protection acceptance after
completion of the Environmental Protection Bureau of Jiayu County on September 28, 2017. The environmental impact
assessment report of the Winner Industrial Park (Jiayu) Project was approved by Xianning Ecological Environment Bureau
on March 15, 2021 (Xianning E.E.B. Letter [2021] No. 21), and construction is currently underway.
Yichang Winner Medical Textile Co., Ltd.: “Medical gauze project with an annual output of 90 million meters” obtained EIA
approval from the Environmental Protection Bureau of Zhijiang City on December 19, 2014, and passed the environmental
protection acceptance after completion of the Environmental Protection Bureau of Zhijiang City on October 14, 2015.
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2022 Annual Report
Winner Medical (Tianmen) Co., Ltd.: “Cotton spun laced non-woven fabric and medical dressing products production
project” obtained the EIA approval (Tianmen E.E.B. Letter [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 the Environmental Protection Bureau of Tianmen City on January 25, 2017; the
independent acceptance of phase II will be completed on May 10, 2020. “Production Line Automation Upgrading Project of
Medical Dressings” obtained EIA approval (Tianmen E.E.B. Letter [2016] No. 23) from the Environmental Protection
Bureau of Tianmen City on January 19, 2016, and passed the independent acceptance on March 23, 2018. “Medical Products
Sterilization Center Project” received approval from the Tianmen Ecological Environment Bureau on January 17, 2022
(Tianmen E.E.B. Letter [2022] No. 4), and passed the independent acceptance of the project on December 31, 2022.
Winner Medical (Jingmen) Co., Ltd.: “30 million meters per year medical gauze bleaching and refining production line
expansion project” obtained the EIA approval from 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; “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 the acceptance
together with the construction project of Purcotton on September 27, 2017; “Winner Purcotton construction project” obtained
the EIA approval (Dongbao E.P.B. Letter [2016] No. 138) from Environmental Protection Bureau of Jingmen City on
October 19, 2016, and passed the environmental protection acceptance after completion 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 (Jingmen E.E.B. Letter [2020] No. 112) from Jingmen Ecological Environment
Bureau 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 (Hubei E.P.D. Letter [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 (Hubei
E.P.D. Letter [2012] No. 348) of Environmental Protection Department of Hubei Province on May 8, 2012. The Phase II
project obtained the EIA approval (Huanggang E.P.D. Letter [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 (Huanggang E.P.D. Letter [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 (Huanggang E.P.D. Letter [2018] No. 20) from
Environmental Protection Bureau of Huanggang City on January 29, 2018, and completed the independent acceptance on
November 14, 2019; the “foam coiled material production line project (expansion)” obtained the EIA approval (Huanggang
E.P.D. Letter [2018] No. 26) from Environmental Protection Bureau of Huanggang City on February 5, 2018, and completed
the independent acceptance of the project on October 8, 2018; the “construction project of advanced wound dressing
production line” obtained the EIA approval (Huanggang E.P.D. [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 (Huanggang E.P.D. [2020]
No. 109) from Huanggang Municipal Bureau of Ecology and Environment on July 20, 2020 and completed the 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 (New Approval Letter [2017] No. 68) from the Administrative Approval Bureau of
Xinzhou District, Wuhan City on July 12, 2017, and completed the independent acceptance of phase I on January 18, 2020;
“R&D center construction project” obtained the EIA approval (New Approval Letter [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 (Wuhan E.P.B. Letter [2018] No. 5) from
Wuhan Environmental Protection Bureau on January 15, 2018. The project was constructed in two phases. The independent
acceptance of phase I was completed on May 15, 2020 and of phase II was completed on November 19, 2021. The “medical
protective product upgrading project” environmental impact report form was approved by Administrative Approval Bureau
of Xinzhou District on May 7, 2021, with the approval number of New Approval Letter [2021] No. 95. The project is not yet
completed. “Winner Medical Phase II Expansion Project” was approved by Wuhan Ecological Environment Bureau and
Wuhan Administrative Approval Bureau on June 21, 2022 (Wuhan E. P. Xinzhou B. Approval Letter [2022] No. 27), the
project is currently under construction. The “Innovation Research Institute Construction Project” was approved by Wuhan
Ecological Environment Bureau and Wuhan Administrative Approval Bureau on August 9, 2022 (Wuhan E. P. Xinzhou B.
[2022] No. 43), the project is currently under construction.
Winner Guilin Latex Co., Ltd.: “Production line expansion technology transformation project of medical gloves” was
approved by Administrative Approval Bureau of Guilin City (Guilin A.A.B. Approval Letter [2020] No. 35) on December 30,
113
2020, and passed the environmental protection acceptance in March 2022.
Winner Medical (Hunan) Co., Ltd.: “Off-site production line expansion project of self-destructing sterile-care medical
devices with an annual output of 300 million sets of Hunan Pingan Medical Device Technology Co., Ltd.” was approved by
Environmental Protection Bureau of Li County on April 5, 2005; the Phase II production line expansion project of self-
destructing sterile-care medical devices with an annual output of 300 million sets was approved by Environmental Protection
Bureau of Li County (Changde E.E.B. Letter [2009] No. 28) in April 2009; the “industrialization project of new ultrasonic
ozone therapy equipment, probes and ultrasonic ozone clearing and sterilizing treatment instrument” was approved by
Environmental Protection Bureau of Li County (Hunan Environment Rating Table [2011] No. 134) on December 11, 2011;
and the Phase III expansion project was approved by Changde Ecological Environment Bureau (Changde E.E.B. Letter [2011]
No. 0623) on September 18, 2021. The project passed the independent acceptance in May 2022.
Zhejiang Longterm Medical Technology Co., Ltd.: Medical hygiene materials and dressings with an annual output of 300
million pieces; disinfectant with an annual output of 5 million bottles; Categories I and II medical care supplies and infection
control medical consumables with an annual output of 15 million pieces,; sanitary products with an annual output of 10
million packs/pieces; rehabilitation therapy instruments and equipment with an annual output of 20,000 sets/pieces; skin
cleansing and care products with an annual output of 100,000 units/pieces; minimally invasive surgical consumables with an
annual output of 5.7 million sets/pieces were approved by Huzhou Ecological Environment Bureau Deqing Branch (Deqing
Approval on Environment Record [2019] No. 17) on March 4, 2019; while iodophor cotton swabs with an annual output of
1.2 billion pieces; disinfectant with an annual output of 35 million bottles; isolation gowns with an annual output of 1 million
sets; protective clothing with an annual output of 11 million sets; masks with an annual output of 350 million pieces were
approved by Huzhou Ecological Environment Bureau Deqing Branch (Huzhou E.E.B. Deqing Letter[2021] No. 35) on June
15, 2021, and passed the environmental protection acceptance in February 2022.
Industry emission standards and details of pollutant emissions involved in production and operation activities
Category Names of
of main main Numb
Company Emis Distribut Pollutant
pollutants pollutants er of Emission Total Emissions
or sion ion of emission
and and discha concentration/i Total emissions emissions beyond
subsidiary mod discharg standards
characteri characteri rge ntensity approved standards
name e e outlets implemented
stic stic outlets
pollutants pollutants
Winner
Not
Medical Boiler 6.2mg/m3, 20mg/m3, NOX:
Gaseous PM, SO2, NOX: 2.473T, exceeding
(Chongya / 1 discharg <3mg/m3, 50mg/m3, 13.28T/a, SO2:
pollutants NOX SO2: 0.058T the
ng) Co., e outlet 162mg/m3 200mg/m3 3.32 T/a
standard
Ltd.
Winner
PH, COD, Dire 7.6, 52mg/L, 6-9, 80mg/L, Not
Medical Sewage COD: 57.6T/a,
Liquid BOD, ct 12.5mg/L, 20mg/L, COD: 19.308T, exceeding
(Chongya 1 discharg NH3-N: 7.27
pollutants NH3-N, disch 1.34mg/L, 10mg/L, NH3-N: 0.408T the
ng) Co., e outlet T/a
SS arge 9mg/L 50mg/L standard
Ltd.
Winner NOX: Not
Boiler 8.3mg/m3, 20mg/m3,
Medical Gaseous PM, SO2, NOX: 2.809T, unlicensed, exceeding
/ 1 discharg <3mg/m3, 50mg/m3,
(Jiayu) pollutants NOX SO2: 0.084T SO2: the
e outlet 85mg/m3 200mg/m3
Co., Ltd. unlicensed standard
6-9,
Winner PH, COD, Dire 8.2, 48mg/L, COD: Not
Sewage 100mg/L,
Medical Liquid BOD, ct 14.2mg/L, COD: 8.019T, 34.29T/a, exceeding
1 discharg 20mg/L,
(Jiayu) pollutants NH3-N, disch 0.15mg/L, NH3-N: 0.073T NH3-N: 1.19 the
e outlet 15mg/L,
Co., Ltd. SS arge 11mg/L T/a standard
70mg/L
Winner
1#2# Not
Medical 10.6/8.0mg/m3, 20mg/m3, 50 NOX:
Gaseous PM, SO2, boiler NOX: 12.452T, exceeding
(Huangga / 2 <3 mg/m3, mg/m3, 23.52T/a, SO2:
pollutants NOX discharg SO2: 0.0133T the
ng) Co., 128/45mg/m3 200mg/m3 unlicensed
e outlet standard
Ltd.
114
2022 Annual Report
(Continued)
Category Names of
Num
of main main
Company Emis ber of Distribut Pollutant
pollutants pollutants Emission Total Emissions
or sion disch ion of emission
and and concentration/i Total emissions emissions beyond
subsidiar mod arge discharg standards
characteri characteris ntensity approved standards
y name e outlet e outlets implemented
stic tic
s
pollutants pollutants
Winner 6-9,
PH, COD, Indir 7.8, 74mg/L, Not
Medical Sewage 500mg/L, COD: 90T/a,
Liquid BOD, ect 14.8mg/L, COD: 61.216T, exceeding
(Huangga 1 discharg 300mg/L, NH3-N: 13.5
pollutants NH3-N, disch 1.07mg/L, NH3-N: 0.666T the
ng) Co., e outlet 45mg/L, T/a
SS arge 10mg/L standard
Ltd. 400mg/L
Winner
Not
Medical Boiler 2.8mg/m3, 20mg/m3, NOX:
Gaseous PM, SO2, NOX: 4.774T, exceeding
(Tianmen / 1 discharg <3mg/m3, 50mg/m3, 16.235T/a,
pollutants NOX SO2: 0.123T the
) Co., e outlet 100mg/m3 200mg/m3 SO2: 4.059T/a
standard
Ltd.
Winner 6-9,
PH, COD, Indir 7.6, 64mg/L, COD: Not
Medical Sewage 400mg/L,
Liquid BOD, ect 19.2mg/L, COD: 16.118T 132.52T/a, exceeding
(Tianmen 1 discharg 150mg/L,
pollutants NH3-N, disch 1.18mg/L, NH3-N: 0.379T NH3-N: 16.57 the
) Co., e outlet 30mg/L,
SS arge 16mg/L T/a standard
Ltd. 250mg/L
Winner Not
Medical Gaseous PM, SO2, No boiler, no exceeding
/ / / / / /
(Wuhan) pollutants NOX license the
Co., Ltd. standard
PH, COD,
Winner Indir 6-9, Not
BOD, Sewage 7.6, 183mg/L,
Medical Liquid ect 500mg/L, COD: 40.153T, COD: 61T/a, exceeding
NH3-N, 1 discharg 39.8mg/L,
(Wuhan) pollutants disch 300mg/L, NH3-N: 2.963T NH3-N: 6.1T/a the
chromatici e outlet 7.66mg/L, 7
Co., Ltd. arge 45mg/L, 64 standard
ty
Winner Not
Boiler 1.9mg/m3, <3 20mg/m3, NOX:
Medical Gaseous PM, SO2, NOX: 1.939T, exceeding
/ 1 discharg mg/m3 , 50mg/m3, 10.83T/a, SO2:
(Jingmen) pollutants NOX SO2: 0.085T the
e outlet 75mg/m3 150mg/m3 3.11T/a
Co., Ltd. standard
6-9,
Winner PH, COD, Indir 8.1, 43mg/L, COD: Not
Sewage 200mg/L,
Medical Liquid BOD, ect 7.0mg/L, COD: 10.530T, 19.48T/a, exceeding
1 discharg 50mg/L,
(Jingmen) pollutants NH3-N, disch 0.54mg/L, NH3-N: 1.053T NH3-N: the
e outlet 20mg/L,
Co., Ltd. SS arge 12mg/L 1.95T/a standard
100mg/L
Yichang
Winner Boiler 20mg/m3, 2022
Gaseous PM, SO2,
Medical / 1 discharg / 50mg/m3, Unlicensed Unlicensed Out of
pollutants NOX
Textile e outlet 150mg/m3 service
Co., Ltd.
115
(Continued)
Category Names of
Num
of main main
Company Emis ber of Distribut Pollutant
pollutants pollutants Emission Total Emission
or sion disch ion of emission
and and concentration/i Total emissions emissions s beyond
subsidiar mod arge discharg standards
characteri characteris ntensity approved standards
y name e outlet e outlets implemented
stic tic
s
pollutants pollutants
Yichang 6-9,
PH, COD, Indir 7.6, 131mg/L, Not
Winner Sewage 500mg/L,
Liquid BOD, ect 39.3mg/L, exceeding
Medical 1 discharg 300mg/L, Unlicensed Unlicensed
pollutants NH3-N, disch 12.5mg/L, the
Textile e outlet 45mg/L,
SS arge 45mg/L standard
Co., Ltd. 400mg/L
6-9,
Winner PH, COD, Indir 7.4, 54mg/L, Not
Sewage 300mg/L,
Guilin Liquid BOD, ect 16mg/L, exceeding
1 discharg 80mg/L, Unlicensed Unlicensed
Latex pollutants NH3-N, disch 4.2mg/L, the
e outlet 30mg/L,
Co., Ltd. SS arge 110mg/L standard
150mg/L
Winner Indir Not
Sewage
Medical Liquid Residual ect exceeding
1 discharg 0.2mg/L - Unlicensed Unlicensed
(Hunan) pollutants chlorine disch the
e outlet
Co., Ltd. arge standard
Zhejiang
Longterm Indir Not
Sewage 6-9,
Medical Liquid PH, COD, ect 7.3, 300mg/L, exceeding
1 discharg 500mg/L, Unlicensed Unlicensed
Technolo pollutants NH3-N disch 0.195mg/L the
e outlet 45mg/L
gy Co., arge standard
Ltd.
Processing of pollutants
1 Winner Medical (Jiayu) Co., Ltd.
It is a key wastewater discharge enterprise, and the wastewater mainly includes domestic sewage and production wastewater.
Domestic sewage (including canteen wastewater) is first treated in oil separation tank and septic tank, and then mixed with
production wastewater to enter the sewage treatment station in the plant. The sewage treatment station adopts “hydrolysis
acidification + biological contact oxidation method” for treatment, and then discharged from the drainage outlet through
pipeline after reaching the standard. The wastewater has been installed with on-line monitoring. The sewage treatment station
passed the environmental protection acceptance after the Environmental Protection Bureau of Jiayu County was completed
on September 28, 2017, implementing the limit value of Discharge Standards of Water Pollutants for Dyeing and Finishing of
Textile Industry (GB4287-2012). The sewage plant were concrete structures with a service life of 20 years, and the
environmental protection equipment has a service life of 10 years.
Solid waste is mainly domestic waste of employees; impurities (cotton residue, cotton dust and cotton batting) generated in
the production process and cotton dust collected by dust removal equipment; the leftover materials produced in the slicing
process; sludge from sewage treatment station; the hazardous waste generated is chemical material packaging barrel. For
general solid wastes, disposal agreements are signed with disposal units; for hazardous wastes, disposal agreements are
signed with qualified disposal units.
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2022 Annual Report
2 Winner Medical (Chongyang) Co., Ltd.
It is a key wastewater discharge enterprise. The project's wastewater mainly includes domestic, production, and experimental
wastewater. The production wastewater is discharged into the wastewater treatment station (hydrolysis acidification +
biological contact oxidation method), and the treatment reaches the standard; the experimental wastewater is hazardous waste
and has been entrusted to a third party company for treatment. The domestic sewage of the employees and production
wastewater generated by the enterprise are directly discharged into the sewage treatment plant and discharged after reaching
the standard. Online wastewater monitoring has been installed, and the sewage station completed independent acceptance on
March 20, 2017, implementing the limit value of Discharge Standards of Water Pollutants for Dyeing and Finishing of
Textile Industry (GB4287-2012). The sewage plant were concrete structures with a service life of 20 years, and the
environmental protection equipment has a service life of 10 years.
Solid waste mainly includes office and domestic waste of employees, dust, leftover materials and unqualified products
produced in production. For domestic waste and general solid waste, disposal agreements are signed with disposal units, and
for hazardous waste, entrustment agreements are signed with third parties.
3 Yichang Winner Medical Textile Co., Ltd.:
No production wastewater discharge, domestic wastewater enters the municipal pipe network, and clean energy natural gas is
used as fuel. The gas boiler was decommissioned in 2022.
4 Winner Medical (Tianmen) Co., Ltd.
It is a key wastewater discharge enterprise. The wastewater mainly comes from the production wastewater produced by the
degreasing and bleaching workshop and the domestic sewage in the plant area. The main pollutants are pH, COD, suspended
solids and BOD5. The production wastewater is discharged to the sewage treatment station (hydrolysis acidification +
biological contact oxidation method), and the treatment reaches the standard; domestic sewage enters the sewage treatment
station and is treated with the production wastewater. Online monitoring of wastewater has been installed, and the phase I
project of the sewage station completed independent acceptance on March 23, 2018, implementing the limit value of
Discharge Standards of Water Pollutants for Dyeing and Finishing of Textile Industry (GB4287-2012). The sewage plant
were concrete structures with a service life of 20 years, and the environmental protection equipment has a service life of 10
years.
Treatment agreements are signed with disposal units for general solid waste and domestic waste. Hazardous solid waste is
mainly chemical material packaging barrels, which raw material suppliers recycle, and no hazardous waste is transferred for
disposal.
5 Winner Medical (Jingmen) Co., Ltd.
It is a key wastewater discharge enterprise, and the wastewater discharged by the enterprise is mainly production wastewater
and domestic sewage. The production wastewater mainly comes from the scouring and bleaching process. The PH value of
the wastewater is obviously alkaline and the COD value is high, but there is no harmful poisonous substance in it. The
wastewater is discharged into the self-built sewage station, treated by “flocculation precipitation + hydrolysis acidification +
biological contact oxidation method + biological aerated filter”, and then discharged into the downstream municipal sewage
plant. After simple treatment in septic tank, domestic sewage will be treated in self-built sewage station. The sewage station
has been built, online wastewater monitoring has been installed, and the pollutant discharge permit has been obtained. It is to
be accepted. It implements the limit value of Discharge Standards of Water Pollutants for Dyeing and Finishing of Textile
Industry (GB4287-2012). The sewage plant were concrete structures with a service life of 20 years, and the environmental
protection equipment has a service life of 10 years.
For domestic waste and general solid wastes, disposal agreements are signed with disposal units, and for hazardous wastes,
transfer agreements are signed with third-party disposal units.
6 Winner Medical (Huanggang) Co., Ltd.
It is a key wastewater discharge enterprise, and the wastewater discharged by the enterprise is mainly production wastewater
and domestic sewage. The wastewater mainly comes from spun lace forming, degreasing / bleaching, and soft water
preparation processes. Most of the wastewater from spun lace forming process is reused for production after being treated by
water treatment circulation system, while a small part of the wastewater are discharged into the self-built sewage station with
that from degreasing / bleaching process, and then discharged after being treated by “hydrolysis acidification + biological
contact oxidation” and reaching the standard. After simple treatment in septic tank, domestic sewage will be treated in self-
built sewage station. Online monitoring of wastewater has been installed, and the sewage station passed the environmental
117
protection acceptance after completion of Environmental Protection Bureau of Huanggang City on January 24, 2017,
implementing the level III standard limit in Table 4 of Integrated Wastewater Discharge Standard (GB8978-1996). The
sewage plant were concrete structures with a service life of 20 years, and the environmental protection equipment has a
service life of 10 years.
The solid wastes of the project include general solid wastes, other solid wastes and hazardous solid wastes. The general solid
wastes are mainly cotton impurities, leftover materials, defective products, boiler coal cinders, sludge from sewage treatment
facilities, etc. generated in the production process. Other solid wastes are domestic wastes generated from office and life.
Among them, cotton impurities, leftover materials and defective products are sold for comprehensive utilization; after the
sludge is dehydrated, it will be treated by the environmental sanitation department together with the domestic waste.
Hazardous solid wastes are mainly chemical waste packaging barrels, which raw material suppliers recycle, and the waste oil
is stored in the plant area, and delivered to qualified units for disposal after reaching the transportation volume.
7 Winner Medical (Wuhan) Co., Ltd.
It is a key wastewater discharge enterprise. The project's wastewater mainly includes preparation, spun laced, degreasing,
bleaching, domestic water, etc. The wastewater discharge of the project is 2126.93t/d after the completion of phase I,
4067.11t/d after phase II, and 6004.5t/d after phase III. The process treats the wastewater 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 were concrete structures with a
service life of 20 years, and the environmental protection equipment has a service life of 10 years.
The solid wastes of the project are mainly divided into general solid wastes, other solid wastes and hazardous solid wastes.
Among them, cotton impurities, leftover materials, defective products and fiber dust are purchased and recycled, and the
environmental sanitation department disposes sludge and domestic waste.
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 existing three-stage septic tank treats the domestic wastewater of employees and then enters the comprehensive
sewage treatment station together with the pretreated production wastewater. The company's integrated wastewater treatment
station adopts air flotation + filtration process, and discharges the treated wastewater into the municipal wastewater treatment
plant. The exhaust gas from compound preparation, pre-vulcanization tank, latex parking tank, latex dipping drying and post-
vulcanization is collected and discharged after treatment by exhaust gas treatment system (water spray + dehumidification +
activated carbon adsorption).
General industrial solid waste is waste rubber, unqualified products, waste packaging shall be taken up by the latex supplier
for regular recycling, sludge and domestic waste shall be taken up by the local sanitation department for unified cleaning and
disposal. Hazardous wastes are waste resin and waste activated carbon. They shall be collected centrally and entrusted to
units with corresponding hazardous waste treatment qualifications for disposal.
9 Winner Medical (Hunan) Co., Ltd.
A small amount of production wastewater and domestic sewage is discharged, among which production wastewater mainly
includes cleaning wastewater, workshop cleaning wastewater, ethylene oxide exhaust absorption wastewater and pure water
preparation wastewater. The wastewater, including the cleaning wastewater and workshop cleaning wastewater treated by
sedimentation tank, the ethylene oxide exhaust absorption wastewater treated by adsorption method, and the canteen
wastewater pretreated by grease trap, will be discharged to septic tank for treatment, and to Li County Wastewater Treatment
Plant for further treatment through municipal pipeline network. The waste gas, including the Injection molding waste gas,
organic waste gas volatilized from printing process, and organic waste gas from bonding, will be collected and treated by lye
spraying tower, and then sent to the UV photolysis + activated carbon adsorption device for treatment. After treatment, the
waste gas will be discharged through a 15m exhaust pipe.
The general industrial solid waste consists of waste fabric and waste packaging materials, which are collected and recycled
118
2022 Annual Report
by the material company for comprehensive purposes. Hazardous wastes are waste raw material drums, waste activated
carbon, waste mineral oil, waste UV photolysis lamps and waste adsorbent, which are collected centrally after classification
and disposed of by units entrusted with the corresponding hazardous waste treatment qualification.
10 Zhejiang Longterm Medical Technology Co., Ltd.
Cleaning wastewater, concentrated water for pure water preparation and domestic sewage are discharged. The septic tank in
the factory pretreats domestic sewage, and then piped to Deqing Hengfeng Sewage Treatment Co., Ltd for centralized
treatment with the concentrated water for pure water preparation and domestic sewage. Process exhaust gas is treated by one
photo-oxidation catalytic treatment equipment set and then discharged through a 15m exhaust funnel. Process dust is treated
by 1 set of cloth bag dust collectors and then discharged through a 15m exhaust funnel.
The solid wastes are mainly the waste from the daily life of employees and solid wastes from the canteen are disposed of by
sanitation department, the trimmings and defective products generated in the production process, waste packaging bags
generated from raw and auxiliary materials are sold to material recycling companies; hazardous wastes are waste activated
carbon generated in the process of waste gas treatment and ethylene oxide waste liquid generated in the process of
sterilization, which is entrusted to corresponding qualified companies for treatment.
Emergency plan for environmental emergencies
In order to further improve the emergency management system of environmental pollution accidents, improve the ability to
deal with major environmental pollution accidents to ensure the safety of production and operation, improve the ability of
employees to deal with accidents, standardize the Company's emergency management and corresponding emergency
procedures, and implement emergency rescue work in a timely and effective manner, prevent and reduce the occurrence of
accidents to the greatest extent, branches and subsidiaries of Winner Medical Co., Ltd. have set up an environmental accident
emergency leading group and formulated the Emergency Plan for Environmental Accidents.
Environmental self-monitoring scheme
All companies have applied for discharge permits, of which the self-monitoring programs are formulated in accordance with
the relevant industry norms. Pollutants are mainly detected through a combination of manual laboratory tests + commissioned
monitoring + online monitoring. The 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
company is made public on the national pollutant discharge permit management platform.
Investment in environmental treatment and protection and related information on payment of environmental protection tax
In FY2022, the amount of environmental protection tax paid by the Company and its subsidiaries accounted for 151,000 yuan.
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. A carbon emission management
system has been established, and carbon footprint accounting for some products are carried out. Administrative penalties
imposed due to environmental issues during the reporting period
Rectification
Company or Reasons for Impacts on the production and
Violations Punishment measures of the
subsidiary name penalty operation of listed companies
Company
N/A N/A N/A N/A N/A N/A
Other environmental information that should be disclosed
None
Other information related to environmental protection
119
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.
Information on environmental accidents of listed companies
NA
II. Social responsibility
Winner Medical upholds the visions of “caring for health and life, making a better world” and “Purcotton Changes the
World”, and takes the initiative to disclose its social responsibility efforts thanks to the leadership of its Strategy and Social
Responsibility Committee, identifying and analyzing substantive issues related to corporate social responsibility in a more
scientific manner, so as to strengthen its social responsibility governance capacity continuously.
The Company lays emphasis on safeguarding the legitimate rights and interests of shareholders, employees, consumers,
partners, governments, society and other stakeholders, and insists on working together with all parties to contribute to the
sustainable development of the environment and society.
1. Products and customer responsibilities
In terms of research and innovation, the Company insists on empowering production and operation with digitalization,
continuously improving industrial automation, and establishing and perfecting the “excellent production operation” system.
In terms of green and healthy products, the Company has developed and launched the first 100% biodegradable masks and
biodegradable paper packaging in China, and has been actively carrying out green packaging initiatives with the “Zero Plastic
Plan” as the core. In addition, the Company also attaches importance to the research and development of green and healthy
products. It keeps expanding the product categories covered by the environmental dyeing process, while increasing the use of
organic cotton in its products.
In terms of customer service, the Company advocates the business principle of “quality before profit”, always putting
customer perception first and winning customers by providing them with quality products and services. Meanwhile, for
responsible marketing and consumer education, the Company conducts diversified public welfare campaigns for the general
public, including themes such as paying tribute to healthcare workers, reducing the use of plastic packaging, and reducing the
burden on the global environment.
2. Environmental health and safety responsibility
In terms of energy saving and carbon reduction, Purcotton, a subsidiary, has conducted carbon footprint verification for 100%
pure cotton tissues, baby hand and mouth wet tissues, baby robes and other products, and obtained the statement certificate of
ISO 14067 product carbon footprint verification. It is the first brand in China to obtain SGS product carbon footprint
certification in the same category.
The Company is further expanding the use of clean energy such as photovoltaic, optimizing energy use structure, and
improving energy efficiency through equipment renovation and other approaches. In addition, the Company also focuses on
green product development and production, as well as green factory construction and certification, aiming to put its corporate
environmental and safety responsibilities into practice.
3. Responsibilities of employees and communities
The Company cares about employees' career, and physical and mental health, and takes initiatives to provide various welfare
and training programs for them. In 2022, the Company continued to drive comprehensive, healthy development of employees
from four segments, namely, “Win+ energy”, “Win+ honors”, “Win+ caring” and “Win+ Vitality”.
In terms of public welfare, the company has always adhered to the core principle of “social value before corporate value”,
and continues to fulfill its corporate social responsibility and deliver the value of social welfare. To this end, the Company
has set up the “Winner Caring Association” to carry out various donation and support activities.
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2022 Annual Report
III. Consolidating and expanding the achievements of poverty alleviation and rural
revitalization
The Company actively implemented the major strategic deployment of the national poverty alleviation efforts. In February
2022, Purcotton, a subsidiary, together with the China Women's Development Foundation, China Women's News and brand
spokesperson Guo Jingjing's studio, went to the Baigu Village in Yunwu Town, Guiding County, Qiannan Prefecture,
Guizhou Province, to provide practical and effective care and assistance to local women and children, donating materials
worth more than RMB 1.1 million, including reassuring packages (incl. 8,000 pieces of maternity kits, sanitary pads, and
cotton diapers) and two Mother's Health Express vehicles.
121
06
Important Matters
122
2022 Annual Report
I. Performance in fulfilling commitments
1. Commitments fulfilled within and not fulfilled by the end of the reporting period by the Company's actual
controller, shareholders, related parties, acquirer and other commitment parties
√ Applicable Not applicable
Time Degree
Commit Commit
Commitme limit for of
ment Commitment party Commitment content ment
nt type acceptanc perform
reason time
e ance
36
Within 36 months from the date of listing and trading
months
of the Company's shares, the Company shall not
from the
Winner Group, Li transfer or entrust others to manage the shares directly Septemb In
IPO lock- date of
Jianquan, Xie Ping, or indirectly held by the Company that have been er 17, perform
up listing of
Li Xiaoyuan issued before the initial public offering of the 2020 ance
the
Company's shares, nor shall the Company repurchase
Company'
such shares
s shares
1. If the shares held are reduced within two years after
the lock-up period, the reduction price shall not be
lower than the issue price; 2. Within 6 months after
the listing of the Company, if the closing price of the
Winner Group, Li
Company's shares for 20 consecutive trading days is Within
Jianquan, Xie Ping,
lower than the issue price (if the right or dividend is two years
Li Xiaoyuan, Fang
excluded during this period, the issue price will be Septemb after the In
Xiuyuan, Xu IPO
adjusted accordingly), or the closing price of the er 17, expiration perform
Xiaodan, Liu reduction
Company's shares is lower than the issue price (if the 2020 of the ance
Weiwei, Wang
right or dividend is excluded during this period, the lock-up
Ying, Chen
issue price will be adjusted accordingly) at the end of period
Huixuan
6 months after the listing (March 17, 2021, it will be
postponed in case of non-trading day), the lock-up
period of the issuer shares held by the Company is
automatically extended for 6 months
Commit
The Company guarantees that it will abide by the
ment
relevant laws, regulations, departmental rules and
made at
normative documents in force at that time on reducing
the time
shareholders' shares of the listed company. When
of IPO
Winner Group, Li reducing the shares of the Company that held by the Long-
or Septemb In
Jianquan, Xiamen IPO enterprise issued prior to the IPO, the enterprise will term
refinanc er 17, perform
Leyuan, Sequoia reduction inform the Company in advance of the reduction performa
ing 2020 ance
Xinyuan intention and the number of shares to be reduced in nce
written form, The Company shall make an
announcement three trading days in advance, except
when the corporate shares held by the Company are
less than 5%.
There is no fraudulent issuance in the process of this
public offering and listing on GEM; if the securities
regulatory authority, the stock exchange or the judicial
authority determines that the Company has fraudulent
issuance behavior, which has a significant and
substantial impact on judging whether the issuer meets
Share
the issuance conditions stipulated by law, the Long-
Winner Medical, repurchase Septemb In
securities regulatory authority will punish the term
Winner Group, Li upon IPO er 17, perform
Company, the stock exchange or the judicial authority performa
Jianquan fraudulent 2020 ance
Within 5 working days from the date when the illegal nce
listing
facts are finally confirmed by the stock exchange or
the judicial authority and other competent authority,
the stock repurchase plan shall be formulated in
accordance with the relevant laws and regulations and
the Articles of Association, and all the new shares
issued and listed shall be repurchased
Winner Medical, Commitme The prospectus has no false records, misleading Septemb Long- In
Winner Group, Li nt to statements or major omissions. We assume individual er 17, term perform
123
Jianquan, Fang assume and joint legal liabilities for its authenticity, accuracy 2020 performa ance
Xiuyuan, Xu compensati and integrity. nce
Xiaodan, Liu on liability
Weiwei, Wang according
Ying, Chen to law
Huixuan, Yin
Wenling, Bi Qun,
Zhou Xiaoxiong,
Liang Wenzhao,
Guo Zhenwei, Ye
Yangjing
Suppose the stock price of the Company is lower than
the net assets per share within three years after listing.
In that case, the Company and the relevant responsible
parties can choose to implement the following
measures separately or comprehensively to stabilize 36
Winner Medical, Commitme
the stock price according to the actual situation of the months
Winner Group, Li nt to
Company and the stock market when the from the
Jianquan, Fang stabilize Septemb In
preconditions for starting the measures to stabilize the date of
Xiuyuan, Xu the er 17, perform
stock price are met: 1. The Company repurchases the listing of
Xiaodan, Chen Company's 2020 ance
shares; 2. The controlling shareholders and actual the
Huixuan, Yin share price
controllers increase their holdings of the Company's Company'
Wenling in IPO
shares; 3. Non-independent directors and senior s shares
managers who hold posts and receive remuneration in
the Company increase their holdings of the Company's
shares; 4. Laws, administrative regulations, normative
documents and other methods approved by CSRC.
In order to reduce the impact of the diluted immediate
return of this issuance, we promise to take the
following measures: (I) accelerate the investment
Measures
progress of the investment projects with raised funds
and
and strive to achieve the expected benefits of the
commitme Long-
project as soon as possible; (II) Strengthen the Septemb In
nts to make term
Winner Medical supervision of investment projects with raised funds to er 17, perform
up for the performa
ensure the reasonable and legal use of raised funds; 2020 ance
Commit diluted nce
(III) Strengthen the operating management and
ment immediate
internal control, improve the operating efficiency and
made at return
profitability; (IV) Ensure a sustainable and stable
the time profit distribution system and strengthen the return
of IPO mechanism for investors
or
refinanc I/Our company shall not interfere in the Company's
ing operation and management activities beyond my/our
authority, encroach on the Company's interests,
transfer interests to other units or individuals free of
Measures
charge or under unfair conditions, damage the
and
Company's interests in other ways, or use the
commitme Long-
Company's assets to engage in investment and Septemb In
Winner Group, Li nts to make term
consumption activities unrelated to my/our er 17, perform
Jianquan up for the performa
performance of duties. I/the Company promises to 2020 ance
diluted nce
fully, completely and timely perform measures of
immediate
making up for return established by the Company and
return
any commitment on measures of making up for return.
If I / our company violates such commitment, I / our
company is willing to bear corresponding legal
responsibility according to law.
1. Shall not transfer interests to other units or
individuals free of charge, under unfair conditions, or
Measures
Fang Xiuyuan, Xu damage the Company's interests in other ways. 2.
and
Xiaodan, Chen Restrict my duty consumption behavior as a director,
commitme Long-
Huixuan, Yin supervisor and senior manager of the Company. 3. Septemb In
nts to make term
Wenling, Bi Qun, Shall not use the Company's assets to engage in er 17, perform
up for the performa
Zhou Xiaoxiong, investment and consumption activities unrelated to my 2020 ance
diluted nce
Liang Wenzhao, performance of the duties of a director, supervisor and
immediate
Guo Zhenwei, senior manager. 4. Actively promote the improvement
return
of the Company's salary system. 5. When introducing
the Company's equity incentive scheme (if any), the
124
2022 Annual Report
vesting conditions of equity incentive shall be linked
with implementing the Company's measures to make
up for the return. 6. I promise that I will issue
supplementary commitments in accordance with the
latest provisions of the CSRC, and actively promote
the Company to make new provisions. 7. I promise to
fully, completely and timely perform measures of
making up for return established by the Company and
any commitment I have made to make up for return.
In order to better protect the legitimate rights and
interests of investors, the Company deliberated and
passed the revised Articles of Association (Draft) at
the second extraordinary general meeting of
36
shareholders in 2020. The Company determines the
months
dividend return plan for the next three years: on the
Commitment Septembe from the
premise that the net profit attributable to the In
on profit r 17, date of
Winner Medical shareholders of the parent company is positive in the perform
distribution 2020 listing of
current year, the Company will make profit ance
policy the
distribution at least once a year, and the board of
Company'
directors may propose the Company to make interim
s shares
profit distribution according to the Company's profit
and capital demand. The Company shall prioritize
cash dividend for profit distribution when it is under
the conditions of cash dividend.
1. As of the date of this letter of commitment, our
company / I do not and will not engage in or
participate in the same or similar business and
activities as the Company's main business in any
form, and will not engage in or participate in the same
or similar business and activities as the Company's
main business through investment in other
companies. 2. Our company / I undertake not to
engage in or participate in any business or activities
that are the same or similar to the Company's main
Commit
business. 3. If the Company further expands its
ment
Commitment business scope based on its existing business, and Septembe Long-
made at In
Winner Group, on avoiding other enterprises under our company's / my control at r 17, term
the time perform
Li Jianquan horizontal that time have already produced and operated the 2020 performa
of IPO ance
competition business, the other enterprises under our company's / nce
or
my control at that time shall sell the relevant
refinanc
business, and the Company has the priority to
ing
purchase the relevant business under the same
commercial conditions. 4. In case that the Company
further expands its business scope based on its
existing business scope, and the other enterprises
controlled by the Company/I at that time have not yet
carried out production or operation in this regard, the
other enterprises controlled by the Company/I at that
time will not engage in the same or similar business
and activities as such new business of the Company.
The social security and housing provident fund
management departments of the Company and its
major subsidiaries have issued the Certificate,
confirming that from January 1, 2017 to December
Commitment 31, 2019, the Company and its subsidiaries have no
to indemnity records of administrative punishment for violating
for the laws and regulations related to labor, social security Septembe Long-
In
Winner Group, recovery of and housing provident fund. If Winner Medical and r 17, term
perform
Li Jianquan social its subsidiaries are required to make up the social 2020 performa
ance
security insurance premium or housing provident fund that nce
accumulation should be paid by Winner Medical and its
fund subsidiaries for their employees or claimed by their
employees, or if litigation, arbitration and
administrative punishment from relevant
administrative departments occur therefrom, our
company / I shall unconditionally bear the full
125
amount of the fees that should be made up and bear
the corresponding liability for compensation, to
ensure that Winner Medical and its subsidiaries will
not suffer any losses as a result. The controlling
shareholders and the company's actual controller, Li
Jianquan, are jointly and severally liable to each
other.
The land and real estate authorities of Yichang
Winner issued a certificate to confirm that the
relevant subsidiaries did not violate laws and rules
during the reporting period; moreover, the total area
of the two properties accounts for a small proportion
Compensatio
of the total area of the Company's and its subsidiaries'
n
properties. Even if there is a risk of demolition, it will
commitment Long-
not significantly impact the production and operation Septembe In
Winner Group, for term
of the Company and its subsidiaries. In response to r 17, perform
Li Jianquan demolition of performa
the relocation risk of the two properties, the 2020 ance
Yichang nce
controlling shareholders and the actual controller of
Winner's
the issuer commit: “if such properties are required to
properties
be demolished within a time limit by the competent
government department, the controlling shareholders
and the actual controller agree to timely,
unconditionally and fully compensate all losses
caused to the Company.”
Suppose we fail to fulfill the relevant commitments
disclosed in the prospectus. In that case, we will
publicly explain the specific reasons for our failure to
fulfill the commitments in the general meeting of
shareholders and the information disclosure media
Commit designated by the CSRC, and apologize to all
ment shareholders and public investors. If we fail to fulfill
made at the relevant public commitments, the proceeds will
the time belong to the Company. Suppose we cause losses to
of IPO the Company, its shareholders, or other investors due
or to our failure to fulfill the relevant public
refinanc commitments. In that case, we will compensate the
Winner Medical,
ing relevant losses to the Company or its shareholders or
Winner Group,
other investors in accordance with the law. At the
Li Jianquan,
same time, we shall not transfer the shares (if any) of
Fang Xiuyuan,
the issuer directly or indirectly held by us during the
Xu Xiaodan, Liu Restraint
period of assuming the compensation above liability. Long-
Weiwei, Wang measures for Septembe In
Suppose we fail to bear the above compensation term
Ying, Chen IPO failure to r 17, perform
liability. In that case, we will stop receiving salary (if performa
Huixuan, Yin perform the 2020 ance
any) within 10 days after the occurrence of the above nce
Wenling, Bi Qun, contract
matters until I fulfill the relevant public
Zhou Xiaoxiong,
commitments. If we fail to fulfill, have been unable to
Liang Wenzhao,
fulfill or have been unable to fulfill our commitments
Guo Zhenwei,
on time due to objective reasons beyond our control,
Ye Yangjing
such as changes of relevant laws and regulations,
policy, natural disasters and other external factors, we
will take the following measures: (1) timely and fully
disclose the specific reasons why we fail to fulfill,
have been unable to fulfill or have been unable to
fulfill our commitments on time; (2) Put forward
supplementary commitments or alternative
commitments to the Company's investors (relevant
commitments shall be subject to relevant approval
procedures in accordance with laws, regulations and
Articles of Association), so as to protect the rights
and interests of investors as far as possible.
Whether the commitment is fulfilled on
No
time
2. In case the Company's asset or project saw earning expectation, and the term of the earning expectation still
126
2022 Annual Report
covers the reporting period, the Company shall make a statement about the asset or project fulfilling the original
expectation and the reasons thereof
Applicable √ Not applicable
II. Non-operating occupation of funds of listed companies by controlling shareholders
and their related parties
Applicable √ Not applicable
No non-operating occupation of funds of listed companies by controlling shareholders and their related parties during the
reporting period.
III. Illegal external guarantee
Applicable √ Not applicable
No illegal external guarantee of the Company during the reporting period.
IV. Statement of the board of directors on the latest “non-standard audit report”
Applicable √ Not applicable
V. Statement of the Board of Directors, the Board of Supervisors and Independent
Directors (if any) on the “non-standard audit report” of the accounting firm
during the reporting period
Applicable √ Not applicable
VI. Statement of the Board of Directors on accounting policy, accounting estimate
change or significant accounting error correction in the reporting period
Applicable √ Not applicable
VII. Explanation of changes in the scope of combined financial statements when
compared with financial statements of the previous fiscal year
√ Applicable Not applicable
For details, please refer to “Section X. Financial Statements \ VIII. Consolidation scope changes”
127
VIII. Appointment of and dismissal of accounting firms
Accounting firm currently appointed
BDO CHINA SHU LUN PAN CERTIFIED PUBLIC
Name of domestic accounting firm
ACCOUNTANTS LLP
Remuneration of domestic accounting firm (RMB 10,000) 230
Continuous years of audit services of domestic accounting firm 9
Name of certified public accountant of domestic accounting firm Cheng Jin, Wu Lihong
Continuous years of audit services provided by certified public
2
accountants of domestic accounting firm
Name of overseas accounting firm (if any) None
Remuneration of overseas accounting firm (RMB 10,000) (if any) 0
Continuous years of audit services of overseas accounting firm (if
None
any)
Name of certified public accountant of overseas accounting firm (if
None
any)
Continuous years of audit services provided by certified public
None
accountants of overseas accounting firm (if any)
Has the accounting firm been changed?
Yes √ No
Engagement of internal control audit accounting firm, financial consultant or sponsor
Applicable √ Not applicable
IX. Delisting confronted upon disclosure of the annual report
Applicable √ Not applicable
X. Bankruptcy reorganization
Applicable √ Not applicable
No bankruptcy reorganization of the Company during the reporting period.
128
2022 Annual Report
XI. Major litigation, arbitration matters
√ Applicable Not applicable
Date Disc
Basic Amount Whether to Implementation
Trial result and of losu
information of involved form Progress of litigation of litigation
influence of litigation discl re
litigation (RMB estimated (arbitration) (arbitration)
(arbitration) osur inde
(arbitration) 10,000) liabilities judgment
e x
The ruling of Case
No.: (2019) Jiangxi As of the
National Arbitration disclosure date of
Letter No. 095 the report, the
confirmed that the Company has
original Investment received the land
Agreement was transfer deposit
terminated, and the of RMB 3
People's Government million and
of Zijin County had to compensation of
Winner return RMB 3 million RMB 328 million
Medical v. of land transfer deposit (excl. the
People's The People's Government of to the Company, and lawyer's fees and
Government of Zijin County has not yet paid the compensate for legal costs)
Zijin County, full amount of compensation to economic losses of returned and paid
arbitration case 55,565.5 the Company in accordance with RMB 550 million as by the People's
No
of contract 3 the award, and the Company has well as the lawyer's Government of
dispute [Case applied to the court for fees and legal costs. Zijin County.
No.: (2019) enforcement and has been The land, above- The Company
Gan Guo accepted by the court. ground buildings, has handed over
Zhong Zi No. equipment and the project land,
095] facilities and relevant above-ground
supporting materials of buildings,
Heyuan Winner equipment and
investment and facilities and
construction project relevant
were handed over to supporting
the People's materials to the
Government of Zijin People's
County. There will be Government of
no adverse impact on Zijin County.
the Company.
On June 2, 2020, the
Reexamination and Invalidation
Department of the Patent Office
of China National Intellectual
If the lawsuit does not
Property Administration issued
Winner support the plaintiff's
the Decision on Examination of
Medical claim, the patent is
Invalidation Request, which
(Tianmen), finally invalid. The
decided to declare the patent
Shenzhen reason for the patent
right of “production method of
Purcotton, invalidation decision is
cotton non-woven medical
Winner not that the Company
dressings” (Patent No.
Medical and/or the patent
ZL200510033147.1, valid until
(Huanggang) v. infringes the rights of
0 No February 6, 2025) invalid. On N/A
China National others. Therefore, the
August 26, 2020, Winner
Intellectual Company can still use
Medical (Tianmen), Shenzhen
Property the technology and
Purcotton, Winner Medical
Administration will not have a
(Huanggang) filed a lawsuit to
, administrative significant adverse
Beijing Intellectual Property
dispute case of impact on the normal
Court in accordance with the
patent production and
provisions of the Patent Law for
invalidation operation of the
revocation of the patent
company
invalidation decision. On August
28, 2020, Beijing Intellectual
Property Court issued the Notice
of Acceptance of Administrative
129
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 this report's
disclosure date, the court has not
yet announced the result of the
second trial.
Summary of
other small
lawsuits in
which the In progress according to the
Company or its litigation/arbitration process, No significant impacts Executed
subsidiaries are some cases have not yet been on the Company's according to
8,029.93 No
plaintiffs that concluded, and the concluded production and litigation/arbitrati
do not meet the cases are executed according to operation on process
criteria for the process
disclosure of
material
litigation
Summary of
other small
lawsuits in
which the In progress according to the
Company or its litigation/arbitration process, No significant impacts Executed
subsidiaries are some cases have not yet been on the Company's according to
2,318.77 No
defendants that concluded, and the concluded production and litigation/arbitrati
do not meet the cases are executed according to operation on process
criteria for the process
disclosure of
material
litigation
XII. Punishment and rectification
Applicable √ Not applicable
No punishment or rectification of the Company during the reporting period.
XIII. Credit conditions of the Company, its controlling shareholders and actual
controllers
Applicable √ Not applicable
XIV. Major related transactions
1. Connected transactions related to daily operation
Applicable √ Not applicable
There were no connected transactions related to the Company's daily operation during the reporting period.
2. Connected transactions arising from the acquisition or sale of assets or equity
130
2022 Annual Report
Applicable √ Not applicable
No connected transactions arise from the company's acquisition or sale of assets or equity during the reporting period.
3. Connected transaction of joint foreign investments
Applicable √ Not applicable
No connected transactions of joint foreign investment of the Company during the reporting period.
4. Related credit and debt transactions
Applicable √ Not applicable
No related claims and debts of the Company during the reporting period.
5. Transactions with related finance companies
Applicable √ Not applicable
There is no deposit, loan, credit or other financial business between the Company and the finance company with which it is
affiliated and the related parties.
6. Transactions between finance companies controlled by the Company and related parties
Applicable √ Not applicable
There is no deposit, loan, credit or other financial business between the finance companies controlled by the Company and
related parties.
7. Other major connected transactions
Applicable √ Not applicable
No other major connected transactions of the Company during the reporting period.
XV. Major contracts and their performance
1. Trusteeship, contracting and lease
(1) Trusteeship
Applicable √ Not applicable
No trusteeship of the Company during the reporting period.
(2) Contracting
Applicable √ Not applicable
No contracting of the Company during the reporting period.
(3) Lease
131
√ Applicable Not applicable
Lease description
The Company's major leased assets are self-operated store leases, all of which have been recognized as right-of-use assets in
accordance with the requirements of the new leasing standards, and there are no other significant leased assets. For details,
see Section 10. Financial Statements \7. Notes to consolidated financial statements \25. Right-of-use assets.
Project bringing the profits or losses more than 10% of the total profits of the Company in the reporting period to the
Company
Applicable √ Not applicable
No lease project brings the profits or losses more than 10% of the company's total profits during the reporting period to the
Company during the reporting period.
2. Major guarantee
Applicable √ Not applicable
No major guarantees of the Company during the reporting period.
3. Entrusted cash asset management
(1) Information of entrusted financial management
√ Applicable Not applicable
Overview of entrusted financial management during the reporting period
Unit: '0,000 yuan
The amount of
Source of funds for Amount incurred in
Outstanding Overdue amount not impairment for
Specific type entrusted financial entrusted financial
balance recovered overdue financial
management management
management
Bank financial
Proceeds 234,367 49,300 0 0
products
Bank financial
Self-owned funds 528,637.2 254,899.5 0 0
products
Trust financial
Self-owned funds 144,000 134,000 0 0
products
Total 907,004.2 438,199.5 0 0
Specific circumstance of high-risk entrusted financing with significant single amount or with low security and poor liquidity
Applicable √ Not applicable
The entrusted financing is expected not to recover the principal or has other circumstances that may cause impairment
Applicable √ Not applicable
(2) Information of entrusted loans
Applicable √ Not applicable
The Company had no entrusted loan during the reporting period.
132
2022 Annual Report
4. Other major contracts
Applicable √ Not applicable
No other major contracts of the Company during the reporting period.
XVI. Description of other important events
Applicable √ Not applicable
The Company needs to explain no other significant matters in the reporting period.
XVII. Major events of subsidiaries
Applicable √ Not applicable
133
07
Changes in Shares and
Shareholders
134
2022 Annual Report
I. Changes in Shares
1. Changes in shares
Unit: share
Before this change Increase/decrease (+, -) After this change
Share
New capital
Share
Proportio issue increase Proporti
Quantity donat Others Subtotal Quantity
n of from on
ion
shares reserve
d funds
I. Restricted shares 290,438,848 68.10% 56,475 56,475 290,495,323 68.11%
1. State shareholding
2. State legal person
shareholding
3. Other domestic
56,475 56,475 56,475 0.01%
holdings
Wherein: domestic legal
person shareholding
Domestic natural
person 56,475 56,475 56,475 0.01%
shareholding
4. Foreign shareholding 290,438,848 68.10% 290,438,848 68.10%
Wherein: foreign legal
290,438,848 68.10% 290,438,848 68.10%
person shareholding
Foreign natural
person
shareholding
II. Unrestricted shares 136,053,460 31.90% (56,475) (56,475) 135,996,985 31.89%
1. RMB common share 136,053,460 31.90% (56,475) (56,475) 135,996,985 31.89%
2. Foreign shares listed
in China
3. Foreign shares listed
abroad
4. Others
III. Total amount of shares 426,492,308 100.00% 0 0 426,492,308 100.00%
Causes for change in shares
√ Applicable Not applicable
Some directors, supervisors and senior managers of the Company increased their holdings of the Company's shares through
bidding transactions in the secondary market in 2022, resulting in an increase of 56,475 restricted shares in 2022.
Approval of changes in shares
Applicable √ Not applicable
Transfer of share changes
Applicable √ Not applicable
135
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 shares
Number of
Number of restricted released
restricted
Sharehold restricted shares shares from Reasons for The date of lifting the restricted
shares at the
er's name at the beginning increased restricted restricted sale sale
end of the
of the period in current sale in
period
period current
period
Winner Restricted
Group 290,438,848 0 0 290,438,848 shares before September 17, 2023
Limited IPO
Shares locked Unlock 25% of the total number of
by directors, shares held at the beginning of
Fang
0 30,000 0 30,000 supervisors and each year, until the number of
Xiuyuan
senior shares held does not exceed 1,000
management shares.
Shares locked Unlock 25% of the total number of
by directors, shares held at the beginning of
Wang
0 22,500 0 22,500 supervisors and each year, until the number of
Ying
senior shares held does not exceed 1,000
management shares.
Shares locked Unlock 25% of the total number of
by directors, shares held at the beginning of
Chen
0 3,975 0 3,975 supervisors and each year, until the number of
Huixuan
senior shares held does not exceed 1,000
management shares.
Total 290,438,848 56,475 0 290,495,323 -- --
II. Securities Issuance and Listing
1. Securities issuance during the reporting period (excluding preferred shares)
Applicable √ Not applicable
2. Changes in the total number of shares and shareholder structure of the Company, as well as the changes in the
Company's asset and liability structure
Applicable √ Not applicable
3. Existing internal employee shares
136
2022 Annual Report
Applicable √ Not applicable
III. Shareholders and Actual Controllers
1. Number and shareholding of the Company's shareholders
Unit: share
Total number
Total
of common Total number of
number of Total number of preferred Total number
shareholders as preferred
common shareholders with voting of
of the end of shareholders with
shareholde 30,6 rights restored as of the end of shareholders
the previous 28,105 voting rights 0 0 0
rs at the 24 the previous month before the holding
month before restored at the end of
end of the disclosure date of the annual special voting
the disclosure the reporting period
reporting report shares (if any)
date of the (if any) (see Note 9)
period
annual report
Shareholding of stockholders with more than 5% of the shares or the top 10 shareholders
Number of Pledged, tagged
Number of Increase or Number of
shares held or frozen shares
Shareh shares held decrease shares held
Shareholder with
Shareholder's name olding at the end of during the with limited
nature unlimited Status Quant
ratio the reporting reporting sales of
sales ity
period period conditions
conditions shares
Overseas legal
Winner Group Limited 68.10% 290,438,848 0 290,438,848 0
person
Beijing Sequoia Xinyuan
Domestic non-
Equity Investment Center 5.19% 22,134,142 (7,013,958) 0 22,134,142
state legal person
(Limited Partnership)
Xiamen Leyuan Investment
Domestic non-
Partnership (Limited 3.23% 13,762,175 (3,899,325) 0 13,762,175
state legal person
Partnership)
Xiamen Yutong Investment
Domestic non-
Partnership (Limited 1.72% 7,324,573 (2,040,862) 0 7,324,573
state legal person
Partnership)
Xiamen Huikang Investment
Domestic non-
Partnership (Limited 1.04% 4,418,062 (1,237,901) 0 4,418,062
state legal person
Partnership)
Hong Kong Securities Clearing Overseas legal
0.72% 3,072,592 2,067,281 0 3,072,592
Company Limited person
Xiamen Zepeng Investment
Domestic non-
Partnership (Limited 0.52% 2,231,988 (671,300) 0 2,231,988
state legal person
Partnership)
National Social Security Fund
Others 0.37% 1,564,000 1,564,000 0 1,564,000
101 Portfolio
Basic Endowment Insurance
Others 0.29% 1,235,980 1,235,980 0 1,235,980
Fund 808 Portfolio
Domestic natural
Zheng Junhui 0.27% 1,161,700 1,161,700 0 1,161,700
person
Strategic investors or general legal persons
becoming the top 10 shareholders due to the None
allotment of new shares (if any) (see note 4)
Description of the above-mentioned shareholder
None
association or concerted action
Description of the above shareholders involved in
entrusting / entrusted voting right and waiver of None
voting right
Special note on the existence of repurchase special As of December 31, 2022, the Company's repurchased 6,754,659 shares of the
accounts among the top 10 shareholders (if any) Company held in the “special securities account for the repurchase of Winner
(see Note 10) Medical Co., Ltd.”
137
Shareholding of top 10 shareholders with unlimited sales
Number of shares with unlimited Share type
Shareholder's name sales conditions held at the end of
the reporting period Share type Quantity
Beijing Sequoia Xinyuan Equity Investment
22,134,142 RMB common share 22,134,142
Center (Limited Partnership)
Xiamen Leyuan Investment Partnership
13,762,175 RMB common share 13,762,175
(Limited Partnership)
Xiamen Yutong Investment Partnership
7,324,573 RMB common share 7,324,573
(Limited Partnership)
Xiamen Huikang Investment Partnership
4,418,062 RMB common share 4,418,062
(Limited Partnership)
Hong Kong Securities Clearing Company
3,072,592 RMB common share 3,072,592
Limited
Xiamen Zepeng Investment Partnership
2,231,988 RMB common share 2,231,988
(Limited Partnership)
National Social Security Fund 101 Portfolio 1,564,000 RMB common share 1,564,000
Basic Endowment Insurance Fund 808
1,235,980 RMB common share 1,235,980
Portfolio
Zheng Junhui 1,161,700 RMB common share 1,161,700
Agricultural Bank of China Limited - CSI500
915,100 RMB common share 915,100
Index Open-ended Fund
Description of the association or concerted action between top 10 public shareholders with unlimited
sales conditions, and between top 10 public shareholders with unlimited sales conditions and top 10 None
shareholders
Participation in the securities margin trading (if any) (see Note 5) None
Whether the Company has arrangements for differences in voting rights
Applicable √ Not applicable
Whether the Company's top 10 common shareholders and op 10 common shareholders with unlimited sales conditions agreed
on a repurchase transaction during the reporting period
Yes √ No
The Company's top 10 common shareholders and op 10 common shareholders with unlimited sales conditions did not agree
on a repurchase transaction during the reporting period
2. Controlling shareholder of the Company
Nature of the controlling shareholder: foreign controlled
Type of shareholder: legal person
Name of the controlling Legal representative / Organization
Date of establishment Main business
shareholder principal code
Investment
Winner Group Limited Li Jianquan April 08, 2003 124887
management
Equity of other domestic and
foreign listed companies
controlled and invested by None
controlling shareholder during
the reporting period
138
2022 Annual Report
Change of controlling shareholders during the reporting period
Applicable √ Not applicable
There was no change in controlling shareholders during the reporting period.
3. Actual controller of the Company and the person acting in concert
Nature of actual controller: overseas natural person
Type of actual controller: natural person
Relationship with actual Granted with the right of residence in
Name of actual controller Nationality
controller other countries or regions
Li Jianquan Himself Hong Kong, China No
Chairman and General
Main occupation and position
Manager
Winner Medical was listed on the Over-the-Counter Bulletin Board of United States on
Domestic and foreign listed December 16, 2005, switched to the New York Stock Exchange on October 8, 2009,
companies controlled in the switched to the NASDAQ Stock Exchange on April 6, 2010, and delisted on December 26,
past 10 years 2012. Li Jianquan holds more than 50% of the voting rights of Winner Medical, constituting
an actual control over Winner Medical.
Changes in actual controller during the reporting period
Applicable √ Not applicable
There was no change in actual controller during the reporting period.
Block diagram of the property rights and control relationship between the Company and the actual controller
Li Jianquan
Winner Group Limited
Winner Medical Co., Ltd.
The actual controller controls the Company through trust or other asset management
Applicable √ Not applicable
139
4. The cumulative number of pledged shares of the controlling shareholder or the largest shareholder of the
Company and the person acting in concert accounts for 80% of the total number of shares held by them in the
Company
Applicable √ Not applicable
5. Other corporate shareholders holding more than 10% of the shares
Applicable √ Not applicable
6. Restriction and reduction of the shares of controlling shareholders, actual controllers, reorganization parties
and other promised entities
Applicable √ Not applicable
IV. Specific Implementation of Share Repurchase in the Reporting Period
Implementation progress of share repurchase
√ Applicable Not applicable
Proportion of
Proposed repurchased shares
Number of Proportion to Proposed Repurcha Number of
Scheme repurchase to the underlying
proposed total share repurchase se repurchase
disclosure amount shares involved in
repurchase shares capital period purpose d shares
time (10,000 the equity incentive
(shares) (shares)
yuan) plan (if any)
Based on the
Based on the upper limit of
Not more than
upper limit of the the proposed
12 months
proposed repurchase
from the date
repurchase price price and the No less
of the
and the range of range of than RMB
resolution of
repurchase repurchase 300 million Equity
September the third
amount, the amount, the and no incentive 6,754,659
22, 2021 meeting of the
number of shares proportion of more than or ESOP
Third Board
to be repurchased shares to be RMB 500
of Directors
shall not be less repurchased million
held on
than 2,586,200 shall not be less
September 17,
and not more than than 0.6064%
2021
4,310,300. and not more
than 1.0107%
Implementation progress of reducing repurchased shares by centralized bidding transactions
Applicable √ Not applicable
140
2022 Annual Report
08
Preferred Shares
Applicable √ Not applicable
There was no preferred shares of the Company during the
reporting period.
141
09
Information Related to
Bonds
Applicable √ Not applicable
142
2022 Annual Report
10
Financial Report
143
I. Audit Report
Type of audit opinion Standard unqualified opinion
Date of signing the audit report April 23, 2023
Name of audit institution BDO CHINA SHU LUN PAN CERTIFIED PUBLIC ACCOUNTANTS LLP
Audit report document number X.K.S.B.Zi [2023] No. ZI10233
Name of certified public accountants Cheng Jin, Wu Lihong
Audit Report Text
I. Audit Opinion
We have audited the accompanying financial statements of Winner Medical Co., Ltd. (hereinafter referred to “Winner
Medical”), including the consolidated and parent company balance sheet as of December 31, 2022, as well as the
consolidated and parent company income statement, consolidated and parent company cash flow statement and consolidated
and parent company statement of change in equity for the year 2022 and notes to financial statements.
In our opinion, the attached financial statements of Winner Medical have been prepared in accordance with the provisions of
the Accounting Standards for Business Enterprises and give a true and fair view of the consolidated and parent company
financial position as of December 31, 2022 and the consolidated and parent company financial performance and cash flows
for the year 2022 in all significant terms.
II. Basis for Audit Opinion
We conducted our audit in accordance with the China Registered Accountants Auditing Standards (CRAAS). The section
titled “Responsibility of certified public accountants for audit of financial statements” in the audit report further set forth our
responsibility under the Standards. We were independent of Winner Medical and fulfill other responsibilities in terms of
professional ethics according to the code of professional ethics. We believe that the audit evidence we have obtained is
sufficient and appropriate to act as a basis for our audit opinion.
III. Key Audit Items
The key audit items are those that we consider most important to audit the financial statements of the current period in our
professional judgment. The response to these items is based on the audit of the financial statements as a whole and the
formation of an audit opinion. We do not comment on these items separately.
144
2022 Annual Report
The key audit items we identified in the audit are summarized as follows:
Key audit items How is the item handled in the audit
Existence of monetary funds and trading
financial assets
Our main audit procedures for the existence of monetary funds and trading
Please refer to Notes III, (X) and Notes V, financial assets include:
(I), (II) to the consolidated financial 1. Understand the key internal controls related to the existence of
statements. monetary funds and trading financial assets, evaluate the design of these
On December 31, 2022, the balance of controls, determine whether they are implemented, and test the
Winner Medical's monetary funds and trading operation effectiveness of the relevant internal controls;
financial assets was about RMB 8.906 2. Obtain the bank account statements and check with the book balance.
billion, accounting for 48.83% of the total Obtain the bank reconciliation statements for the items with differences,
assets; On December 31, 2021, the balance of understand the nature of the reconciliation items, and test the major
Winner Medical's monetary funds and trading reconciliation items;
financial assets was approximately RMB 3. Implement confirmation procedures for monetary funds and trading
7.404 billion, accounting for 55.81% of the financial assets, and calculate according to the latest net value as of the
total assets, which is important to the balance sheet date provided by the bank.
financial statements. We still need to pay 4. Check large amounts of monetary funds; inspect product specifications
attention to whether there is a risk of material and purchase receipts for trading financial assets;
misstatement in the existence of monetary 5. Obtain corporate credit reports and check whether there are pledge
funds, trading financial assets and other guarantee matters related to monetary funds;
current assets. 6. Implement the bank settlement account information inquiry procedure
to confirm the accuracy and completeness of the bank settlement
account provided to us by the management.
Recognition of operating income
Our main audit procedures for the operating income recognition of Winner
Medical include:
1. Understand the key internal controls related to the recognition of
income, evaluate the design of these controls, determine whether they
are implemented, and test the operation effectiveness of the relevant
internal controls;
2. Check the major sales contracts, understand the terms or conditions of
For details of the accounting policies for the major contracts, and evaluate whether the income recognition policy
income recognition and the analysis of conforms to the provisions of the Accounting Standards for Business
income, please refer to Notes III, (XXVIII) Enterprises;
and Notes V, (XXXIX) to the consolidated 3. Implement substantive analysis procedures for income and gross profit
financial statements. margin according to major products, identify whether there are
The income of Winner Medical mainly significant or abnormal fluctuations, and find out the causes of
comes from the sales business of medical fluctuations;
consumables and health consumer goods. 4. Confirm current sales to main customers by sampling combined with
Compared with the previous period, due to the confirmation of accounts receivable;
frequent occurrence of public health events 5. For domestic sales income, check supporting documents related to
and the tightened government's epidemic income recognition by sampling, including sales contract, order, sales
prevention policies in China, the income of invoice, delivery note and customer receipt, etc.; for export income,
medical consumables realized a year-on-year check supporting documents such as sales contract, export declaration
increase of approximately 83.65%, which form, bill of landing by sampling;
was a significant changes in revenue. 6. Implement an analytical review procedure for e-commerce sales
Therefore, we determine income recognition income, select the Tao system, JD.com and official website with the
as a key audit issue. highest proportion of e-commerce, obtain the sales data of each
platform for consumption behavior analysis, and compare it with the
carrying amount of Company's sales income;
7. Check the capital flow of third-party payment platforms such as Alipay
and check it with the carrying amount;
8. Carry out cutoff test on the income recognized before and after the
balance sheet date to evaluate whether the income is recognized in the
appropriate period.
145
(continued)
Key Audit Items How is the item handled in the audit
Accounting of fixed assets and construction in
progress
Please refer to Notes III, (XVII), (XVIII) and Notes
Our main audit procedures for the accounting of fixed assets and
V, (XIII), (XIV) to the consolidated financial
construction in progress of Winner Medical include:
statements.
1. Check the progress of important fixed assets and construction in
As of December 31, 2022, the net amount of fixed
progress on the basis of sampling, to determine their existence
assets and construction in progress was RMB 3.078
and pay attention to whether there are idle or damaged fixed
billion, accounting for approximately 16.88% of the
assets;
total assets; As of December 31, 2021, the net amount
2. Select samples of fixed assets and construction in progress
of fixed assets and construction in progress was RMB
increased or decrease in current year, and check supporting
1.693 billion, accounting for approximately 12.76%
documents such as contracts, invoices, acceptance certificates,
of the total assets, representing a year-on-year
collection or payment orders, etc.;
increase of approximately RMB 1.385 billion
3. Check the ownership or control of fixed assets;
(including a net increase of approximately RMB 636
4. Check whether the depreciation policies and methods comply
million due to corporate combination).
with the standards, whether the estimated service life and
estimated net residual value are reasonable, and calculate
Fixed assets and construction in progress are an
whether the depreciation is correct;
important part of the consolidated balance sheet of
5. On the basis of sampling, check the date of acceptance report,
Winner Medical. The time point when the
check debugging and production records, and judge the
construction in progress reaches the predetermined
appropriateness of the time point when the construction in
usable condition and transfer into the fixed assets, the
progress is transferred into fixed assets.
method of depreciation calculation of the fixed assets,
6. Make matching analysis on the project progress and payment
the judgment of the useful life of the fixed assets and
progress of large-scale projects to determine whether there are
the net realizable value of the fixed assets will impact
any abnormal situations, and confirm relevant economic matters
the book value of the fixed assets and construction in
(contract terms, receipt and payment, invoicing, transaction
progress, and they are of importance to the
balance, project progress) through correspondence.
consolidated financial statements.
Potential impairment of goodwill
Our main audit procedures for potential impairment of Winner
Medical's goodwill include:
Please refer to Notes V, (XVII), VI, (I) to the
1. Evaluate and test the design and execution effectiveness of
consolidated financial statements.
internal controls related to goodwill impairment test;
2. Compare the data used in the cash flow forecast with historical
As of December 31, 2022, the net amount of goodwill
data to evaluate the rationality of the data used;
was RMB 1.045 billion, accounting for
3. Compare the income growth rate of the detailed forecast period
approximately 5.73% of the total assets, which was
with the historical income growth rate to evaluate its rationality.
formed by the acquisition of subsidiaries in the
Understand the basis for the management to determine the
current period. During the evaluation of goodwill
income growth rate in the subsequent forecast period, and
impairment, the apply key assumptions such as
evaluate its rationality;
income growth rate, gross profit margin and discount
4. Compare the gross profit margin of the detailed forecast period
rate. Due to the importance of goodwill to the overall
with the historical gross profit margin, and analyze the
financial statements and the involvement of
rationality of the gross profit margin of the detailed forecast
management's subjective judgments and significant
period;
estimates in impairment test, which are inherently
5. Review the rationality of the valuation model and key
uncertain and may be affected by management's bias,
parameters used by management in impairment tests with the
we regard goodwill and its impairment test as
assistance of internal valuation experts;
significant risks.
6. Review the adequacy and completeness of the disclosure of
impairment of goodwill in the notes to financial statements.
146
2022 Annual Report
IV. Other information
The management of Winner Medical (hereinafter referred to as the management) is responsible for other information,
including the information covered in Winner Medical's annual report for 2022, but excluding the financial statements and our
audit report.
Our audit opinion on the financial statements does not involve other information and we does not made any form of
verification conclusions on other information.
Combined with our audit of the financial statements, it's our responsibility to read other information. In this process, we shall
consider whether material inconsistency or material misstatement of other information with the financial statements or the
situation understood by us in the audit process.
Based on the work that has been done by us, we should report the fact of material misstatement confirmed in other
information. We have nothing to report in this regard.
V. Responsibility of management and government for the financial statements
The management is responsible for preparing the financial statements in accordance with the provisions of the Accounting
Standards for Business Enterprises and giving a true and fair view; designing, implementing and maintaining necessary
internal control, so that the financial statements are free from material misstatement, whether due to fraud or error.
When preparing the financial statements, the management is responsible for evaluating the going-concern ability of Winner
Medical, disclosing the matters related to the going-concern (if applicable) and using the going-concern assumption, unless
the management plans to liquidate Spectrum Chemical or stop operation or no other realistic options.
The government is responsible for supervising the financial reporting process of Winner Medical.
VI. Responsibility of certified public accountants for the audit of financial statements
Our goal is to obtain reasonable guarantee on inexistence of the material misstatement of the financial statements whether
due to fraud or error and to issue an audit report including audit opinion. Reasonable guarantee is high level guarantee, but it
cannot guarantee that a material misstatement of the audit executed according to the auditing standards will always be found.
Misstatement may be caused by fraud or error. If the reasonable expected misstatements may affect the economic decision
made by the financial statement user according to the financial statements, whether individually or collectively, the
misstatement is generally believed material.
We made professional judgment and maintained professional skepticism in the audit process according to the auditing
standards. We also performed the following:
(I) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design
and implement audit procedures to address these risks, and obtain sufficient and appropriate audit evidence as the basis
for audit opinion. Since the fraud may involve collusion, forge, intentional omission, false statement or above internal
control, the risk of material misstatement caused by fraud is higher than that caused by error.
(II) Understand internal control related to the audit in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control.
(III) Evaluate the appropriateness of the accounting policies being used by the management and the reasonableness of
accounting estimates and relevant disclosure being made by the management.
147
(IV) Draw a conclusion about the appropriateness of the going-concern assumption used by the management. Meanwhile,
draw a conclusion about the major uncertainty of the matters or circumstances possibly resulting in major concerns
about the going-concern ability of Winner Medical according to the audit evidence obtained. If we draw a conclusion
that major uncertainty exists, the auditing standards require us to request the statement user to notice relevant disclosure
in the financial statements in the audit report; in case of insufficient disclosure, we should issue a modified audit report.
Our conclusion is made on the basis of the information available as of the audit report date. However, the future matters
or circumstances may result in going concern failure of Winner Medical.
(V) Evaluate the overall presentation (including disclosure), structure and content of the financial statements and evaluate
whether the financial statements give a true and fair view of relevant transactions and matters.
(VI) Obtain adequate and appropriate audit evidence for the financial information of Winner Medical entity or business
activities to express an opinion on the consolidated financial statements. We are responsible for guiding, supervising
and implementing the group audit and take full responsibility for the audit opinions.
We communicate with the governance on the planned audit scope, time arrangement and major audit findings, including the
internal control defects identified by us in the audit and worthing attention.
We also provide the governance with a statement of compliance with the ethical requirements relating to our independence
and communicate with the governance with respect to all relations and other matters that may reasonably be considered to
affect our independence and the relevant precautions (if applicable).
From the items communicated with the governance, we determine which items are most important to the audit of current
financial statements and thus constitute the key audit items. We describe these items in our audit report, unless the disclosure
of these matters is prohibited by law or regulation, or, in rare circumstances, we determine that we should not communicate
the items in our audit report if it is reasonably expected that the negative consequences of communicating an item outweigh
the benefits in the public interest.
BDO CHINA SHU LUN PAN CERTIFIED PUBLIC Chinese Certified Public Accountant (Project Partner):
ACCOUNTANTS LLP Cheng Jin
Shanghai, China Chinese Certified Public Accountant: Wu Lihong
April 23, 2023
148
2022 Annual Report
II. Financial Statements
Unit of statements in financial notes: RMB
1. Consolidated Balance Sheet
Prepared by: Winner Medical Co., Ltd. December 31, 2022 Unit: yuan
Item December 31, 2022 January 1, 2022
Current assets:
Cash and cash equivalents 4,526,877,578.90 4,273,938,326.82
Deposit reservation for balance
Lending funds
Tradable financial assets 4,378,789,960.23 3,130,529,709.10
Derivative financial assets
Notes receivable 51,001,784.57
Accounts receivable 932,642,061.04 775,546,589.42
Amounts receivable financing 93,093,113.79 9,940,272.21
Advances to suppliers 229,225,273.09 110,462,594.38
Premiums receivables
Reinsurance accounts receivable
Provision of cession receivable
Other receivables 236,298,390.78 329,179,077.01
Including: Interest receivable
Dividends receivable
Redemptory monetary capital for sale
Inventory 1,558,923,573.37 1,597,377,043.99
Contract assets
Assets held for sales
Non-current assets due within a year
Other current assets 119,059,084.47 118,759,825.56
Total current assets 12,125,910,820.24 10,345,733,438.49
Non-current assets:
Loans and advances
149
(continued)
Item December 31, 2022 January 1, 2022
Debt investment
Other debt investments
Long-term receivables
Long-term equity investment 21,747,635.99 16,949,801.24
Other equity instrument investments
Other non-current financial assets 40,000,000.00
Investment real estates 8,747,014.25
Fixed assets 2,312,982,598.88 1,477,320,848.63
Construction in progress 765,009,910.63 216,096,622.30
Productive biological assets
Oil and gas assets
Right-of-use assets 472,356,125.64 531,735,443.44
Intangible assets 1,033,109,803.45 265,700,890.65
Development expenditure
Goodwill 1,044,674,814.01
Long-term unamortized expenses 132,692,286.03 174,785,770.83
Deferred income tax assets 196,993,751.80 122,716,382.99
Other non-current assets 83,524,640.64 115,571,001.80
Total non-current assets 6,111,838,581.32 2,920,876,761.88
Total assets 18,237,749,401.56 13,266,610,200.37
Current liabilities:
Short-term loans 2,295,218,930.85
Borrowings from central bank
Borrowing funds
Trading financial liabilities
Derivative financial liabilities
Notes payable 24,760,000.00 36,200,130.04
Accounts payable 1,119,574,518.58 734,521,490.60
Advance from customers
150
2022 Annual Report
(continued)
Item December 31, 2022 January 1, 2022
Contract liabilities 566,819,254.08 341,175,665.42
Financial assets sold for repurchase
Deposits from customers and interbank
Acting trading securities
Acting underwriting securities
Payroll payable 312,450,241.38 184,681,184.52
Taxes payable 322,255,874.61 93,859,069.68
Other payables 570,843,242.88 443,946,028.46
Including: Interest payable
Dividends payable
Fees and commissions payable
Dividend payable for reinsurance
Liabilities held for sales
Non-current liabilities due within one year 215,946,889.32 216,181,531.82
Other current liabilities 59,604,591.85 24,165,400.50
Total current liabilities 5,487,473,543.55 2,074,730,501.04
Non-current liabilities:
Reserve fund for insurance contracts
Long-term loans
Bonds payable
Including: preferred stock
Perpetual bond
Lease liabilities 326,459,697.90 381,808,925.09
Long-term payable
Long-term payroll payable 8,579,637.94
Estimated liabilities
Deferred income 98,791,412.91 109,625,401.82
Deferred income tax liabilities 133,677,102.81 13,337,159.68
Other non-current liabilities
151
(continued)
Item December 31, 2022 January 1, 2022
Total non-current liabilities 567,507,851.56 504,771,486.59
Total liabilities 6,054,981,395.11 2,579,501,987.63
Owner's equity:
Capital stock 426,492,308.00 426,492,308.00
Other equity instruments
Including: preferred stock
Perpetual bond
Capital reserve 4,546,247,611.24 4,549,621,096.81
Less: treasury stock 500,082,734.11 257,992,366.68
Other comprehensive income 782,778.15 (1,556,935.43)
Special reserve
Surplus reserve 420,212,778.13 420,212,778.13
General risk provision
Undistributed profit 6,810,953,829.30 5,538,135,285.97
Total owners' equities attributable to the owners of
11,704,606,570.71 10,674,912,166.80
parent company
Minority equity 478,161,435.74 12,196,045.94
Total owners' equities 12,182,768,006.45 10,687,108,212.74
Total liabilities and owners' equities 18,237,749,401.56 13,266,610,200.37
Head of accounting institution:
Legal representative: Li Jianquan Head of accounting work: Fang Xiuyuan
Wu Kezhen
152
2022 Annual Report
2. Balance Sheet of Parent Company
Prepared by: Winner Medical Co., Ltd. Unit: yuan
Item December 31, 2022 January 1, 2022
Current assets:
Cash and cash equivalents 3,657,596,762.00 3,580,157,428.37
Tradable financial assets 3,937,805,999.74 2,234,720,701.50
Derivative financial assets
Notes receivable 15,100,060.05
Accounts receivable 454,131,329.85 502,217,638.86
Amounts receivable financing 72,766,987.70 13,669,076.67
Advances to suppliers 1,247,948,057.70 1,991,853,374.17
Other receivables 123,628,108.60 218,099,656.42
Including: Interest receivable
Dividends receivable
Inventory 335,624,519.05 297,766,006.91
Contract assets
Assets held for sales
Non-current assets due within a year
Other current assets 100,484,526.44 54,582,482.01
Total current assets 9,945,086,351.13 8,893,066,364.91
Non-current assets:
Debt investment
Other debt investments
Long-term receivables
Long-term equity investment 3,547,654,880.31 921,600,485.39
Other equity instrument investments
Other non-current financial assets 40,000,000.00
Investment real estates
Fixed assets 99,683,983.66 65,889,542.40
Construction in progress 28,127,353.45 2,671,206.77
153
(continued)
Item December 31, 2022 January 1, 2022
Productive biological assets
Oil and gas assets
Right-of-use assets 73,896,162.36 61,525,338.09
Intangible assets 37,561,928.32 10,941,470.75
Development expenditure
Goodwill
Long-term unamortized expenses 20,782,444.19 27,181,217.32
Deferred income tax assets 38,862,577.13 15,829,010.17
Other non-current assets 24,649,870.57 50,585,930.78
Total non-current assets 3,911,219,199.99 1,156,224,201.67
Total assets 13,856,305,551.12 10,049,290,566.58
Current liabilities:
Short-term loans 1,010,087,083.33
Trading financial liabilities
Derivative financial liabilities
Notes payable 980,000,000.00
Accounts payable 868,496,158.04 744,765,121.01
Advance from customers
Contract liabilities 464,022,623.08 274,656,460.55
Payroll payable 123,859,226.02 57,013,025.70
Taxes payable 145,381,044.31 68,694,400.06
Other payables 346,143,459.66 257,073,388.79
Including: Interest payable
Dividends payable
Liabilities held for sales
Non-current liabilities due within one year 22,369,924.68 14,395,962.64
Other current liabilities 44,098,604.24 13,678,129.69
Total current liabilities 4,004,458,123.36 1,430,276,488.44
154
2022 Annual Report
(continued)
Item December 31, 2022 January 1, 2022
Non-current liabilities:
Long-term loans
Bonds payable
Including: preferred stock
Perpetual bond
Lease liabilities 54,991,421.86 48,977,325.26
Long-term payable
Long-term payroll payable
Estimated liabilities
Deferred income 17,434,675.44 20,071,043.26
Deferred income tax liabilities 1,510,415.96 3,648,582.23
Other non-current liabilities
Total non-current liabilities 73,936,513.26 72,696,950.75
Total liabilities 4,078,394,636.62 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 4,571,654,373.59 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
Undistributed profit 4,868,449,855.81 3,391,392,215.70
Total owners' equities 9,777,910,914.50 8,546,317,127.39
Total liabilities and owners' equities 13,856,305,551.12 10,049,290,566.58
Head of accounting institution:
Legal representative: Li Jianquan Head of accounting work: Fang Xiuyuan
Wu Kezhen
155
3. Consolidated Statement of Income
Prepared by: Winner Medical Co., Ltd. Unit: yuan
Item Year 2022 Year 2021
I. Total operating income 11,351,331,545.08 8,037,420,812.91
Including: Operating income 11,351,331,545.08 8,037,420,812.91
Interest revenue
Premium earned
Fee and commission income
II. Operating cost 9,119,688,180.06 6,727,857,440.84
Including: Operating costs 5,972,800,817.29 4,028,246,646.17
Interest expenditure
Fee and commission expense
Surrender value
Net payments for insurance claims
Net reserve fund extracted for insurance liability
contracts
Bond insurance expense
Reinsurance costs
Taxes and surcharges 98,087,240.32 65,390,051.16
Selling expenses 2,050,176,407.46 1,989,167,789.56
Administrative expenses 633,614,634.95 454,389,948.90
R&D expenses 487,583,652.11 298,162,366.16
Financial expenses (122,574,572.07) (107,499,361.11)
Including: interest expenditure 50,057,668.71 29,988,617.24
Interest revenue 123,909,561.75 137,186,581.16
Plus: other incomes 84,373,262.34 102,353,195.81
Income from investment (loss expressed with “-”) 51,470,767.16 103,237,547.98
Including: Income from investment of joint venture
4,697,834.75 3,525,570.83
and cooperative enterprise
Income from derecognition of financial assets
measured at amortized cost
Exchange gain (loss expressed with “-”)
Net exposure hedging gain (loss expressed with “-”)
156
2022 Annual Report
(continued)
Item Year 2022 Year 2021
Income from fair value changes (loss expressed with “-”) 32,148,876.44 58,474,468.36
Credit impairment losses (loss expressed with “-”) (63,943,322.52) (574,000.57)
Assets impairment losses (loss expressed with “-”) (362,869,340.23) (100,665,232.92)
Income from disposal of assets (loss expressed with “-”) 3,726,204.37 3,250,448.27
III. Operating profit (loss to be filled out with the minus sign “-
1,976,549,812.58 1,475,639,799.00
”)
Plus: Non-operating income 10,569,559.38 6,040,019.07
Less: Non-operating expenditure 67,613,275.63 18,919,306.79
IV. Total profit (total loss to be filled out with the minus sign “-
1,919,506,096.33 1,462,760,511.28
”)
Less: Income tax expenses 245,301,544.88 225,315,643.94
V. Net profit (net loss to be filled out with the minus sign “-”) 1,674,204,551.45 1,237,444,867.34
(I) Classified by business continuity
1. Net profits from going concern (net loss expressed
1,674,204,551.45 1,237,444,867.34
with “-”)
2. Net profits from discontinuing operation (net loss
expressed with “-”)
(II) Classified by ownership
1. Net profits attributable to shareholders of parent
1,650,582,427.43 1,239,320,067.26
company
2. Minority interest income 23,622,124.02 (1,875,199.92)
VI. Net amount of other comprehensive income after tax 3,547,462.46 (830,700.50)
Net amount of other comprehensive income after tax
2,339,713.58 (445,900.35)
attributed to parent company owners
(I) Other comprehensive income that can't be reclassified
601,000.00
into profit and loss
1. Remeasure the variation of net indebtedness or net
601,000.00
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. Others
(II) Other comprehensive income that will be reclassified
1,738,713.58 (445,900.35)
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
157
(continued)
Item Year 2022 Year 2021
5. Cash flow hedging reserve
6. Balance arising from the translation of foreign
1,738,713.58 (445,900.35)
currency financial statements
7. Others
Net amount of other comprehensive income after tax
1,207,748.88 (384,800.15)
attributed to minority shareholders
VII. Total comprehensive income 1,677,752,013.91 1,236,614,166.84
Total comprehensive income attributed to parent company
1,652,922,141.01 1,238,874,166.91
owners
Total comprehensive income attributed to minority
24,829,872.90 (2,260,000.07)
shareholders
VIII. Earnings Per Share
(I) Basic earnings per share 3.90 2.91
(II) Diluted earnings per share 3.90 2.91
In case of business combination involving enterprises under common control in the 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.
Head of accounting institution: Wu
Legal representative: Li Jianquan Head of accounting work: Fang Xiuyuan
Kezhen
158
2022 Annual Report
4. Income Statement of Parent Company
Prepared by: Winner Medical Co., Ltd. Unit: yuan
Item Year 2022 Year 2021
I. Operating income 6,524,892,771.82 3,797,082,652.58
Subtract: Operating costs 4,161,507,373.94 2,437,724,491.05
Taxes and surcharges 36,034,584.59 18,109,856.84
Selling expenses 452,754,200.04 296,170,387.31
Administrative expenses 334,694,723.83 275,874,409.29
R&D expenses 204,606,781.00 120,590,517.01
Financial expenses (124,366,125.15) (128,801,099.82)
Including: interest expenditure 22,677,277.27 3,052,877.00
Interest revenue 112,771,887.57 127,719,496.31
Plus: other incomes 20,759,967.82 48,122,477.41
Income from investment (loss expressed with “-”) 727,290,299.21 88,870,284.00
Including: Income from investment of joint venture
4,692,894.92 3,525,570.83
and cooperative enterprise
Income from derecognition of financial
assets measured at amortized cost (loss
expressed with “-”)
Net exposure hedging gain (loss expressed with “-”)
Income from fair value changes (loss expressed with “-”) 29,434,882.75 52,211,519.29
Credit impairment losses (loss expressed with “-”) (72,175,899.92) 8,818,449.70
Assets impairment losses (loss expressed with “-”) (105,473,198.20) (17,532,150.78)
Income from disposal of assets (loss expressed with “-”) (94,094.68)
II. Operating profit (loss to be filled out with the minus
2,059,403,190.55 957,904,670.52
sign “-”)
Plus: Non-operating income 1,353,390.78 1,934,410.40
Less: Non-operating expenditure 17,761,666.63 1,734,395.59
III. Total profit (total loss to be filled out with the minus
2,042,994,914.70 958,104,685.33
sign “-”)
Less: Income tax expenses 188,173,390.49 148,546,547.62
IV. Net profit (net loss to be filled out with the minus sign “-
1,854,821,524.21 809,558,137.71
”)
(I) Net profits from going concern (net loss expressed
1,854,821,524.21 809,558,137.71
with “-”)
(II) Net profits from discontinuing operation (net loss
expressed with “-”)
159
(continued)
Item Year 2022 Year 2021
V. Net amount of other comprehensive income after tax
(I) Other comprehensive income that can't be
reclassified into profit and loss
1. Remeasure the variation of net indebtedness or net
asset of defined benefit plan
2. Other comprehensive income 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. Others
(II) Other comprehensive income that will be
reclassified into profit and loss
1. Other comprehensive income that will be
reclassified into profit and loss in the invested
enterprise under equity method
2. 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. Balance arising from the translation of foreign
currency financial statements
7. Others
VI. Total comprehensive income 1,854,821,524.21 809,558,137.71
VII. Earnings per share:
(I) Basic earnings per share
(II) Diluted earnings per share
Head of accounting institution: Wu
Legal representative: Li Jianquan Head of accounting work: Fang Xiuyuan
Kezhen
160
2022 Annual Report
5. Consolidated Statement of Cash Flow
Prepared by: Winner Medical Co., Ltd. Unit: yuan
Item Year 2022 Year 2021
I. Cash flow from financing activities:
Cash from selling goods or offering labor 12,313,842,633.16 8,561,473,154.33
Net increase of customer deposit and deposit from other banks
Net increase of borrowings from central bank
Net increase of borrowing funds from other financial
institutions
Cash from obtaining original insurance contract premium
Cash received from insurance premium of original insurance
contract
Net increase of deposit and investment of insured
Cash from interest, handling charges and commissions
Net increase of borrowing funds
Net increase of repurchase of business funds
Net cash from acting trading securities
Refund of tax and levies 13,034,931.53 62,719,156.18
Other cash received related to operating activities 215,912,765.53 186,733,643.10
Subtotal of cash inflow from operating activities 12,542,790,330.22 8,810,925,953.61
Cash paid for selling goods or offering labor 6,458,046,080.74 5,249,732,073.57
Net increase of customer loans and advances
Net increase of amount due from central bank and interbank
Cash paid for original insurance contract claims payment
Net increase of lending funds
Cash paid for interest, handling charges and commissions
Cash paid for policy dividend
Cash paid to and for employees 1,775,089,609.22 1,324,315,606.64
Taxes and fees paid 723,930,241.85 897,686,267.95
Other cash paid related to operating activities 602,252,168.14 467,502,103.52
Subtotal of cash outflow from operating activities 9,559,318,099.95 7,939,236,051.68
Net cash flow from operating activities 2,983,472,230.27 871,689,901.93
161
(continued)
Item Year 2022 Year 2021
II. Cash flow from investment activities:
Cash from investment withdrawal 8,019,668,619.78 7,090,000,000.00
Cash from investment income 155,708,427.23 184,186,882.84
Net cash from disposal of fixed assets, intangible assets and
63,203,570.84 190,932,781.03
other long-term assets
Net cash received from the disposal of subsidiaries and other
business entities
Other cash received related to investment activities
Subtotal of cash inflow from investment activities 8,238,580,617.85 7,465,119,663.87
Cash paid for the purchase and construction of fixed assets,
1,199,381,228.11 743,269,761.70
intangible assets and other long term assets
Cash paid for investment 9,180,242,000.00 6,243,043,466.66
Net cash received from reinsurance business
Net cash paid for obtaining subsidiaries and other business
1,677,072,708.56
units
Other cash paid related to investment activities
Subtotal of cash outflow from investment activities 12,056,695,936.67 6,986,313,228.36
Net cash flow from investing activities (3,818,115,318.82) 478,806,435.51
III. Cash flow from financing activities:
Receipts from equity securities
Including: Cash received from subsidies' absorption of
minority shareholders' investment
Cash received from borrowings 2,276,661,290.38
Other cash received related to financing activities
Subtotal of cash inflow from financial activities 2,276,661,290.38
Cash repayments of amounts borrowed 149,941,702.35 150,000,000.00
Cash paid for distribution of dividends or profits and for
400,990,321.44 768,192,416.04
interest expenses
Including: Dividends and profits paid by subsidiaries to
minority shareholders
Other cash paid related to financing activities 608,221,958.76 491,444,823.25
Subtotal of cash outflow from financial activities 1,159,153,982.55 1,409,637,239.29
Net cash flow from financing activities 1,117,507,307.83 (1,409,637,239.29)
IV. Impact of exchange rate movements on cash and cash
(654,523.15) (1,981,530.49)
equivalents
V. Net increase in cash and cash equivalents 282,209,696.13 (61,122,432.34)
Plus: Balance of cash and cash equivalents at the beginning of
4,088,612,262.04 4,149,734,694.38
the period
VI. Balance of cash and cash equivalents at end of period 4,370,821,958.17 4,088,612,262.04
Head of accounting institution: Wu
Legal representative: Li Jianquan Head of accounting work: Fang Xiuyuan
Kezhen
162
2022 Annual Report
6. Cash Flow Statement of Parent Company
Prepared by: Winner Medical Co., Ltd. Unit: yuan
Item Year 2022 Year 2021
I. Cash flow from financing activities:
Cash from selling goods or offering labor 7,024,626,852.61 3,868,882,685.84
Refund of tax and levies 8,723,940.00 59,750,226.81
Other cash received related to operating activities 45,569,799.37 88,410,542.05
Subtotal of cash inflow from operating activities 7,078,920,591.98 4,017,043,454.70
Cash paid for selling goods or offering labor 3,123,159,254.41 2,919,880,528.57
Cash paid to and for employees 488,580,185.70 320,386,520.67
Taxes and fees paid 314,821,144.26 436,826,117.76
Other cash paid related to operating activities 165,828,956.84 730,441,492.58
Subtotal of cash outflow from operating activities 4,092,389,541.21 4,407,534,659.58
Net cash flow from operating activities 2,986,531,050.77 (390,491,204.88)
II. Cash flow from investment activities:
Cash from investment withdrawal 6,428,041,223.52 5,769,000,000.00
Cash from investment income 120,343,865.20 162,879,612.33
Net cash from disposal of fixed assets, intangible assets and
41,772,465.29 153,159,514.85
other long-term assets
Net cash received from the disposal of subsidiaries and other
business entities
Other cash received related to investment activities
Subtotal of cash inflow from investment activities 6,590,157,554.01 6,085,039,127.18
Cash paid for the purchase and construction of fixed assets,
129,095,084.78 208,912,097.78
intangible assets and other long term assets
Cash paid for investment 7,550,845,323.13 4,563,112,014.62
Net cash paid for obtaining subsidiaries and other business
2,020,549,500.00
units
Other cash paid related to investment activities
Subtotal of cash outflow from investment activities 9,700,489,907.91 4,772,024,112.40
Net cash flow from investing activities (3,110,332,353.90) 1,313,015,014.78
III. Cash flow from financing activities:
Receipts from equity securities
Cash received from borrowings 1,010,000,000.00
163
(continued)
Item Year 2022 Year 2021
Other cash received related to financing activities
Subtotal of cash inflow from financial activities 1,010,000,000.00
Cash repayments of amounts borrowed 120,000,000.00
Cash paid for distribution of dividends or profits and for
397,234,965.83 768,050,437.64
interest expenses
Other cash paid related to financing activities 377,499,720.17 271,738,213.27
Subtotal of cash outflow from financial activities 774,734,686.00 1,159,788,650.91
Net cash flow from financing activities 235,265,314.00 (1,159,788,650.91)
IV. Impact of exchange rate movements on cash and cash
(1,231,353.71) (1,910,420.71)
equivalents
V. Net increase in cash and cash equivalents 110,232,657.16 (239,175,261.72)
Plus: Balance of cash and cash equivalents at the beginning of
3,430,110,781.71 3,669,286,043.43
the period
VI. Balance of cash and cash equivalents at end of period 3,540,343,438.87 3,430,110,781.71
Head of accounting institution: Wu
Legal representative: Li Jianquan Head of accounting work: Fang Xiuyuan
Kezhen
164
2022 Annual Report
7. Consolidated Statement on Changes in Owners' Equity
Prepared by: Winner Medical Co., Ltd. Current amount Unit: yuan
Year 2022
Owners' equities attributable to the owners of parent company
Other equity
instruments
Special reserve
General risk
Item Minority Total owners'
provision
Other
Others
Less: treasury Undistributed equity equities
Capital stock Capital reserve comprehensive Surplus reserve Subtotal
Perpetual
Preferred
stock profit
Others
stock
bond
income
I. Ending balance of previous year 426,492,308.00 4,549,621,096.81 257,992,366.68 (1,556,935.43) 420,212,778.13 5,538,135,285.97 10,674,912,166.80 12,196,045.94 10,687,108,212.74
Plus: Changes in accounting
policies
Prior period error
correction
Business combination
under common control
Others
II. Beginning balance in current
426,492,308.00 4,549,621,096.81 257,992,366.68 (1,556,935.43) 420,212,778.13 5,538,135,285.97 10,674,912,166.80 12,196,045.94 10,687,108,212.74
year
III. Increase/decrease in the current
period (less to be filled out with 2,339,713.58 1,272,818,543.33 1,029,694,403.91 465,965,389.80 1,495,659,793.71
(3,373,485.57) 242,090,367.43
the minus sign “-)
(I) Total comprehensive income 2,339,713.58 1,650,582,427.43 1,652,922,141.01 24,829,872.90 1,677,752,013.91
(II) Owner's invested and decreased
(3,373,485.57) (3,373,485.57) 0.00 (3,373,485.57)
capital
1. Common stock invested by the
owner
2. Capital invested by other equity
instrument holders
3. Amount of share-based
payment included in the owner's (3,373,485.57) (3,373,485.57) (3,373,485.57)
equity
4. Others
(III) Profit distribution (377,763,884.10) (377,763,884.10) (377,763,884.10)
1. Withdrawal of surplus reserves
2. Withdrawal of general risk
preparation
3. Distribution of owners (or
(377,763,884.10) (377,763,884.10) (377,763,884.10)
shareholders)
4. Others
(IV) Internal transfer of owner's
equity
1. Capital surplus transfer to paid-
in capital (or capital stock)
2. Earned surplus transfer to paid-
in capital (or capital stock)
3. Earned surplus covering the
deficit
4. Carryforward retained earnings
in variation of defined benefit
plan
5. Carryforward retained earnings
of other comprehensive income
6. Others
(V) Special reserve
1. Draw in this current
2. Use in this current
(VI) Others 242,090,367.43 (242,090,367.43) 441,135,516.90 199,045,149.47
IV. Balance at the end of current
426,492,308.00 4,546,247,611.24 500,082,734.11 782,778.15 420,212,778.13 6,810,953,829.30 11,704,606,570.71 478,161,435.74 12,182,768,006.45
period
Head of accounting
Legal representative: Li Jianquan Head of accounting work: Fang Xiuyuan
institution: Wu Kezhen
165
7. Consolidated Statement on Changes in Owners' Equity
(continued)
Prepared by: Winner Medical Co., Ltd. Last term amount Unit: yuan
Year 2021
Owners' equities attributable to the owners of parent company
Other equity
instruments
Special reserve
General risk
Item Minority Total owners'
provision
Other
Others
Less: treasury Undistributed equity equities
Capital stock Capital reserve comprehensive Surplus reserve Subtotal
Perpetual
Preferred
stock profit
Others
stock
bond
income
I. Ending balance of previous year 426,492,308.00 4,481,709,983.24 (1,111,035.08) 420,212,778.13 5,126,630,011.14 10,453,934,045.43 14,456,046.01 10,468,390,091.44
Plus: Changes in accounting
(60,128,638.03) (60,128,638.03) (60,128,638.03)
policies
Prior period error
correction
Business combination
under common control
Others
II. Beginning balance in current
426,492,308.00 4,481,709,983.24 (1,111,035.08) 420,212,778.13 5,066,501,373.11 10,393,805,407.40 14,456,046.01 10,408,261,453.41
year
III. Increase/decrease in the current
period (less to be filled out with 67,911,113.57 257,992,366.68 (445,900.35) 471,633,912.86 281,106,759.40 (2,260,000.07) 278,846,759.33
the minus sign “-)
(I) Total comprehensive income (445,900.35) 1,239,320,067.26 1,238,874,166.91 (2,260,000.07) 1,236,614,166.84
(II) Owner's invested and decreased
67,911,113.57 67,911,113.57 67,911,113.57
capital
1. Common stock invested by the
owner
2. Capital invested by other equity
instrument holders
3. Amount of share-based
payment included in the owner's 67,911,113.57 67,911,113.57 67,911,113.57
equity
4. Others
(III) Profit distribution (767,686,154.40) (767,686,154.40) (767,686,154.40)
1. Withdrawal of surplus reserves
2. Withdrawal of general risk
preparation
3. Distribution of owners (or
(767,686,154.40) (767,686,154.40) (767,686,154.40)
shareholders)
4. Others
(IV) Internal transfer of owner's
equity
1. Capital surplus transfer to paid-
in capital (or capital stock)
2. Earned surplus transfer to paid-
in capital (or capital stock)
3. Earned surplus covering the
deficit
4. Carryforward retained earnings
in variation of defined benefit
plan
5. Carryforward retained earnings
of other comprehensive income
6. Others
(V) Special reserve
1. Draw in this current
2. Use in this current
(VI) Others 257,992,366.68 (257,992,366.68) (257,992,366.68)
IV. Balance at the end of current
426,492,308.00 4,549,621,096.81 257,992,366.68 (1,556,935.43) 420,212,778.13 5,538,135,285.97 10,674,912,166.80 12,196,045.94 10,687,108,212.74
period
Head of accounting
Legal representative: Li Jianquan Head of accounting work: Fang Xiuyuan
institution: Wu Kezhen
166
2022 Annual Report
8. Statement on Changes in Owners' Equity of Parent Company
Prepared by: Winner Medical Co., Ltd. Current amount Unit: yuan
Year 2022
Other equity
instruments Other Spec
Item Less:
compreh ial Undistributed Othe Total owners'
Capital stock Capital reserve treasury Surplus reserve
Perpetual
Preferred
ensive reser profit rs equities
Others
stock
bond
stock
income ve
I. Ending balance of previous 257,992,36 3,391,392,215.
426,492,308.00 4,575,027,859.16 411,397,111.21 8,546,317,127.39
year 6.68 70
Plus: Changes in accounting
policies
Prior period error
correction
Others
II. Beginning balance in current 257,992,36 3,391,392,215.
426,492,308.00 4,575,027,859.16 411,397,111.21 8,546,317,127.39
year 6.68 70
III. Increase/decrease in the
current period (less to be 242,090,36 1,477,057,640.
(3,373,485.57) 1,231,593,787.11
filled out with the minus sign 7.43 11
“-)
1,854,821,524.
(I) Total comprehensive income 1,854,821,524.21
21
(II) Owner's invested and
(3,373,485.57) (3,373,485.57)
decreased capital
1. Common stock invested by
the owner
2. Capital invested by other
equity instrument holders
3. Amount of share-based
payment included in the (3,373,485.57) (3,373,485.57)
owner's equity
4. Others
(377,763,884.1
(III) Profit distribution (377,763,884.10)
0)
1. Withdrawal of surplus
reserves
2. Distribution of owners (or (377,763,884.1
(377,763,884.10)
shareholders) 0)
3. Others
(IV) Internal transfer of owner's
equity
1. Capital surplus transfer to
paid-in capital (or capital
stock)
2. Earned surplus transfer to
paid-in capital (or capital
stock)
3. Earned surplus covering the
deficit
4. Carryforward retained
earnings in variation of
defined benefit plan
5. Carryforward retained
earnings of other
comprehensive income
6. Others
(V) Special reserve
1. Draw in this current
2. Use in this current
242,090,36
(VI) Others (242,090,367.43)
7.43
IV. Balance at the end of current 500,082,73 4,868,449,855.
426,492,308.00 4,571,654,373.59 411,397,111.21 9,777,910,914.50
period 4.11 81
Head of accounting work: Fang Head of accounting institution: Wu
Legal representative: Li Jianquan
Xiuyuan Kezhen
167
8. Statement on Changes in Owners' Equity of Parent Company
(continued)
Prepared by: Winner Medical Co., Ltd. Last term amount Unit: yuan
Year 2021
Other equity
instruments Other Spec
Item Less:
compreh ial Undistributed Othe Total owners'
Capital stock Capital reserve treasury Surplus reserve
Perpetual
Preferred
ensive reser profit rs equities
Others
stock
bond
stock
income ve
I. Ending balance of previous 3,349,520,232.
426,492,308.00 4,507,116,745.59 411,397,111.21 8,694,526,397.19
year 39
Plus: Changes in accounting
policies
Prior period error
correction
Others
II. Beginning balance in current 3,349,520,232.
426,492,308.00 4,507,116,745.59 411,397,111.21 8,694,526,397.19
year 39
III. Increase/decrease in the
current period (less to be 257,992,36
67,911,113.57 41,871,983.31 (148,209,269.80)
filled out with the minus sign 6.68
“-)
(I) Total comprehensive income 809,558,137.71 809,558,137.71
(II) Owner's invested and
67,911,113.57 67,911,113.57
decreased capital
1. Common stock invested by
the owner
2. Capital invested by other
equity instrument holders
3. Amount of share-based
payment included in the 67,911,113.57 67,911,113.57
owner's equity
4. Others
(767,686,154.4
(III) Profit distribution (767,686,154.40)
0)
1. Withdrawal of surplus
reserves
2. Distribution of owners (or (767,686,154.4
(767,686,154.40)
shareholders) 0)
3. Others
(IV) Internal transfer of owner's
equity
1. Capital surplus transfer to
paid-in capital (or capital
stock)
2. Earned surplus transfer to
paid-in capital (or capital
stock)
3. Earned surplus covering the
deficit
4. Carryforward retained
earnings in variation of
defined benefit plan
5. Carryforward retained
earnings of other
comprehensive income
6. Others
(V) Special reserve
1. Draw in this current
2. Use in this current
257,992,36
(VI) Others (257,992,366.68)
6.68
IV. Balance at the end of current 257,992,36 3,391,392,215.
426,492,308.00 4,575,027,859.16 411,397,111.21 8,546,317,127.39
period 6.68 70
Head of accounting work: Fang Head of accounting institution: Wu
Legal representative: Li Jianquan
Xiuyuan Kezhen
168
2022 Annual Report
III. Basic Information of the Company
Winner Medical Co., Ltd. (hereinafter referred to as the “Company” or “our Company”), formerly known as Winner Industry
(Shenzhen) Co., Ltd. (hereinafter referred to as “Winner Industry”), is a wholly foreign-owned enterprise established on
August 24, 2000 with the approval of Shenzhen Municipal Administration for Industry and Commerce. The original business
license number of the Company is: Q.D.Y.S.Z.Zi No.307199. The original registered capital is HKD 30 million, and the total
investment is HKD 60 million. The Company is wholly owned by Winner International Trading Corporation. The registered
capital was invested in three installments. On April 2, 2001, the registered capital of HKD 18,023,154.30 was invested in
monetary funds, which was verified by the capital verification report (Z.T.Z.T. No.Y2001-1133) of Zhuhai Zhongtuo
Zhengtai Accounting Firm. The business scope of the original company is: the production and operation of sanitary materials,
dressings and their products, medical clothing, textiles, non-woven products and moulded packaging (excluding the products
subject to national export license management).
On May 18, 2001, the board of directors of the Company decided to increase the registered capital from HKD 30.00 million
to HKD 60.00 million, and the total investment from HKD 60.00 million to HKD 120.00 million, which was paid in three
installments since the date of registration of the Company. On June 5, 2001, the Company obtained the changed business
license of the enterprise legal person issued by Shenzhen Municipal Bureau for Industry and Commerce and amended the
Articles of Association accordingly.
As of December 21, 2001, it has received the second installment of the registered capital paid by Winner International
Trading Corporation. Winner International Trading Corporation contributed HKD 31,445,194.91 in monetary funds, and this
investment was verified by Shenzhen Zhongpeng Certified Public Accountants, Ltd. (S.P.K.Y. Zi [2002] No.037 capital
verification report). As of February 21, 2002, it has received the third installment of the registered capital totaling HKD
6,005,722.20 paid by Winner International Trading Corporation, including HKD 3,665,722.20 in currency and HKD
2,340,000.00 in kind. This investment was verified by Shenzhen Lishang Certified Public Accountants Co., Ltd. (S.L.S.Y. Zi
[2002] No.039 capital verification report)
On October 8, 2002, the board of directors of the Company decided to increase the Company's registered capital from HKD
60.00 million to HKD 70.00 million, and the total investment from HKD 120.00 million to HKD 134.00 million. December
10, 2002, the Company obtained the changed business license of the enterprise legal person issued by Shenzhen Municipal
Bureau for Industry and Commerce and amended the Articles of Association accordingly. As of May 27, 2003, it has
received the fourth installment of the registered capital totaling HKD 14,525,928.59 paid by (Hong Kong) Winner
International Trading Corporation. This capital increase was verified by Shenzhen Yuehua Certified Public Accountants Co.,
Ltd. (S.Y.H.Y. Zi [2003] No.339 capital verification report).
On May 25, 2003, with the approval of the board of directors of the Company, the shareholder Winner International Trading
Corporation signed the Equity Transfer Agreement with Winner Group Limited, under which Winner International Trading
Corporation transferred 100% of its equity to Winner Group Limited. On July 28, 2003, the Company obtained the changed
business license of the enterprise legal person issued by Shenzhen Municipal Bureau for Industry and Commerce and
amended the Articles of Association accordingly.
On June 8, 2006, the board of directors of the Company decided to increase the Company's registered capital from HKD
70.00 million to HKD 126.00 million, and the total investment from HKD 134.00 million to HKD 270.00 million. The newly
increased registered capital of HKD 56.00 million was transferred from the undistributed profits after tax of the Company,
and such newly increased registered capital was invested within half a year after registration of the change. On June 30, 2006,
the Company obtained the changed business license of the enterprise legal person issued by Shenzhen Municipal Bureau for
Industry and Commerce and amended the Articles of Association accordingly.
As of August 30, 2006, the Company transferred undistributed profits HKD 49,423,804.00 to paid-in capital, and the paid-in
capital after the change was HKD 119,423,804.00. This capital increase was verified by the Shenzhen Branch of Beijing
Zhonglian Certified Public Accountants Co., Ltd. (Z.L.S.S.Y. Zi [2007] No.043 capital verification report).
On December 2, 2006, the board of directors of the Company decided to change the original investment period of the
shareholders from June 30, 2006 to December 31, 2006 into June 30, 2006 to June 30, 2007. On December 6, 2006, the
Company was approved by General Administration for Industry and Commerce of Shenzhen to change its corporate type
from a wholly foreign-owned enterprise into a limited liability company (wholly owned by foreign legal person) and change
its business term.
169
As of March 15, 2007, the Company transferred undistributed profits of 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 issued by Shenzhen Administration for Market Regulation (since September 9, 2009,
Shenzhen Municipal Bureau for Industry and Commerce has been integrated into Shenzhen Administration for Market
Regulation) and amended the Articles of Association accordingly.
On April 27, 2011, with the approval of General Administration for Industry and Commerce of Shenzhen, the Company
changed its residence address from No. 1 Wenjian Avenue, Bulong Road, Longhua Street, Baoan District, Shenzhen to
Winner Industrial Park beside Bulong Road, Longhua Street, Bao'an District, Shenzhen.
On February 20, 2013, the board of directors of the Company decided and agreed to increase the Company's registered
capital by HKD 4,271,300. The registered capital after the change was HKD 19,6271,300, and the total investment was still
HKD 380.00 million.
The shareholder, Winner Group Limited made capital contribution with its equity in the six enterprises. The equity
contribution is as follows:
Amount of
equity
Amount of Amount
Book value of contribution
equity included in
Proporti equity (convert to
Name of invested entity contribution capital surplus
on (%) contribution net HKD 10,000)
(RMB 10,000) (RMB 10,000)
assets (a) (d) = (b) *
(b) (c) = (a) - (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 100.00 3,520.95 35.21 3,485.74 43.50
Textile Co., Ltd.”)
Winner Medical (Jingmen) Co., Ltd.
(formerly known as “Jingmen Winner 100.00 2,527.24 25.27 2,501.97 31.22
Medical Textile Co., Ltd.”)
Yichang Winner Medical Textile Co., Ltd. 100.00 1,800.69 18.01 1,782.68 22.25
Winner Medical (Huanggang) Co., Ltd. 75.00 19,729.30 197.29 19,532.01 243.76
Winner Medical (Tianmen) Co., Ltd.
(formerly known as “Hubei Winner Textile 100.00 3,760.89 37.61 3,723.28 46.46
Co., Ltd.”)
Total 34,572.00 345.72 34,226.28 427.13
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2022 Annual Report
After the capital increase, the original shareholders still have 100% of the Company's equity, and the above six companies
become the Company's subsidiaries. On July 25, 2013, the Company obtained the changed business license of the enterprise
legal person issued by Shenzhen Municipal Bureau for Industry and Commerce and amended the Articles of Association
accordingly. This capital increase was verified by the Shenzhen Branch of Zhonglian Certified Public Accountants Co., Ltd.
(Z.L.S.S.Y. Zi [2013] No.102 capital verification report).
On September 2, 2013, the board of directors of the Company decided to increase the Company's registered capital by HKD
18,068,200. The registered capital after the change was HKD 214,339,500, and the total investment was still HKD
380,000,000. The new investment was subscribed by Shenzhen Kangsheng Investment Partnership (Limited Partnership)
(renamed as Shenzhen Leyuan Investment Partnership (Limited Partnership) during the reporting period, hereinafter referred
to as the “Leyuan Investment”), Shenzhen Kangxin Investment Partnership (Limited Partnership) (renamed as Xiamen
Yutong Investment Partnership (Limited Partnership) during the reporting period, hereinafter referred to as the “Yutong
Investment”), Shenzhen Kanglong Investment Partnership (Limited Partnership) (renamed as Xiamen Huikang Investment
Partnership (Limited Partnership) during the reporting period, 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
Investor Proportion (%)
10,000)
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, Baoan District, Shenzhen to Winner Industrial Park, No. 660 Bulong Road, Longhua
New District, Shenzhen. On November 4, 2013, the Company completed the industrial and commercial registration of
changes, obtained the changed business license of the enterprise legal person issued by Shenzhen Municipal Bureau for
Industry and Commerce and amended the Articles of Association accordingly.
On July 1, 2014, the board of directors of the Company decided and agreed to increase the Company's registered capital by
HKD 3,640,000. The registered capital after the change was HKD 217,986,100, and the total investment was still HKD
380.00 million. The capital increase was made by the original shareholder, 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
Investor Proportion (%)
10,000)
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
171
On July 24, 2014, the Company obtained the changed business license of the enterprise legal person issued by Shenzhen
Administration for Market Regulation and amended the Articles of Association accordingly. This capital increase was
verified by Shenzhen Hengping Certified Public Accountants LLP (S.H.P.S.Y. Zi [2014] No.030 and S.H.P.S.Y. Zi [2015]
No.003 capital verification reports).
On July 28, 2014, the Board of Directors of the Company decided to agree that the shareholder of the Company, 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 (Limited Partnership) (renamed as Xiamen Zepeng
Investment Partnership (Limited Partnership) during the reporting period, 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
Investor Proportion (%)
10,000)
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 380.00 million. The new registered capital was subscribed by Beijing Sequoia Xinyuan Equity Investment Center
(Limited Partnership) (hereinafter referred to as “Sequoia Xinyuan”) with RMB 300.00 million. After the completion of the
capital increase, the Company's ownership structure was changed as follows:
Capital contribution amount (HKD
Investor Proportion (%)
10,000)
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 6,
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).
172
2022 Annual Report
On April 30, 2015, through the resolution of the board of directors of the Company, with February 28, 2015 as the base date,
Winner Industry was wholly changed into a limited liability Company, with a registered capital of RMB 368 million. In
accordance with the provisions of the Sponsorship Agreement and Articles of Association, the shareholders converted their
audited net assets as of February 28, 2015 of RMB 1,058,194,956.32 into 368 million shares at a ratio of 1:0.3478, par value
of each share was RMB 1, and the total share capital was RMB 368 million and held separately by the original shareholders
in accordance with their original proportions; the remaining RMB 690,194,956.32 was included in the capital surplus (due to
the change of calculation policy of Company's receivables bad debt provision during the reporting period, the audited net
assets of the Company as of the base date of share reform were adjusted to RMB 1,050,812,354.45, and the corresponding
share conversion ratio was adjusted to 1: 0.3502). On June 4, 2015, with the approval of Economy, Trade and Information
Commission of Shenzhen Municipality, Winner Industry was wholly changed into a limited liability company, renamed as
“Winner Medical Co., Ltd.”, and obtained the business license of enterprise legal person with the registration number of
440306503230896.
On May 28, 2018, after being voted through and approved by the extraordinary general meeting of shareholders, the
Company agreed to increase the registered capital by RMB 8,492,308, with the registered capital after the change of RMB
376,492,308. The new registered capital was subscribed by Shenzhen Capital Group Co., Ltd. (hereinafter referred to as
“SCGC”) with RMB 300.00 million. After the completion of the capital increase, the Company's ownership structure was
changed as follows:
Investor Amount of contribution (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 RMB 50 million of
common shares to the public, which was listed on the Shenzhen Stock Exchange on September 17, 2020. Upon completion of
the issuance, the registered capital of the Company was RMB 426,492,308.
173
Business term: sustainable operation.
Business scope: production and operation of class II, III 6864 medical hygiene materials, medical biological materials,
dressings and products, medical clothing, protective articles, textiles, 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; engaging in wholesale, import and export, retail (including online sales) and other
related ancillary businesses of all Class I medical devices, all Class II medical devices (excluding in vitro diagnostic reagents),
Class III medical devices: medical hygiene materials and dressings, medical suture materials and adhesives, medical polymer
materials and products (except disposable transfusion apparatus (needle)), general diagnostic instruments, medical cold
treatment, low temperature, refrigerating equipment and tools, cotton household articles, cotton clothing, cotton costume,
cotton spun laced non-woven fabric and its manufactured products, cotton, disinfection products, daily necessities, cosmetics,
protective equipment and instruments and meters (if it does not involve goods subject to state trading, or involves goods
subject to quotas, license management and other special provisions, it shall apply in accordance with relevant regulations of
the state); provide the technical consulting, technical services and after-sales services of above-mentioned products;
sterilization technical services (if it needs to obtain relevant qualifications to operate, it shall apply in accordance with
relevant regulations); enterprise management consulting, business information consulting, economic information consulting,
warehouse services (excluding hazardous chemicals, precursor chemicals, refined oil and other dangerous goods), own
property leasing (it can be operated only with the legal real estate ownership certificate under the Company's name). The
above business scope does not include the items subject to special administrative measures for access stipulated by the state,
and those involving the record and licensing qualifications need to obtain the relevant certificates before operation.
Domicile of the Company: F42, Building 2, Huilong Business Center, Shenzhen North Railway Station Area, Minzhi
Subdistrict, Longhua District, Shenzhen; Winner Industrial Park, No.660 Bulong Road, Longhua New District, Shenzhen.
The financial statements were approved by the Board of Directors of the Company on April 23, 2023.
As of December 31, 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 “Winner Medical (Hong Kong)”)
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)”)
174
2022 Annual Report
(continued)
Subsidiary name
Winner Medical (Wuhan) Co., Ltd. (hereinafter referred to as “Winner Medical (Wuhan)”) (former name: Hubei Winner
Medical Co., Ltd.)
Shenzhen PureH2B Technology Co., Ltd. (hereinafter referred to as “PureH2B”)
Pure HB (Shanghai) Co., Ltd. (hereinafter referred to as “Pure HB (Shanghai)”)
Shenzhen Purunderwear Sci-Tech Innovation Co., Ltd. (hereinafter referred to as “Purunderwear”)
Huanggang Purcotton Ltd. (hereinafter referred to as “Huanggang Purcotton”)
Winner Medical Technology (Foshan) Co., Ltd. 1* (hereinafter referred to as “Winner Medical (Foshan)”)
Zhejiang Longterm Medical Technology Co., Ltd. 2* (hereinafter referred to as “Zhejiang Longterm”)
Xi'an Longtemu Medical Technology Co., Ltd. 3* (hereinafter referred to as “Xi'an Longtemu”)
Hangzhou Shengyi Technology Co., Ltd. 4* (hereinafter referred to as “Hangzhou Shengyi”)
Deqing Longterm Medical Silica Gel Products Co., Ltd. 5* (hereinafter referred to as “Deqing Longterm”)
Longterm Medical US LLC 6* (hereinafter referred to as “American Longterm”)
Winner (Guilin) Latex Products Co., Ltd. 7* (hereinafter referred to as “Winner (Guilin)”)
Winner Pingan Medical (Hunan) Co., Ltd. 8* (hereinafter referred to as “Winner Pingan”)
Hunan Ruian Medical Device Technology Co., Ltd. 9* (hereinafter referred to as “Ruian Medical Device”)
Shenzhen Junjian Medical Device Co., Ltd. 10* (hereinafter referred to as “Junjian Medical”)
1*: Winner Medical (Foshan) was establised on September 20, 2022.
2*: Zhejiang Longterm was merged in the Company and added with capital on April 30, 2022.
3*: Xi'an Longtemu is a subsidiary of Zhejiang Longterm.
4*: Hangzhou Shengyi is a subsidiary of Zhejiang Longterm.
5*: Deqing Longterm is a subsidiary of Zhejiang Longterm.
6*: American Longtemu is a subsidiary of Zhejiang Longterm.
7*: Winner (Guilin) was merged in the Company and added with capital on June 30, 2022.
8*: Winner Pingan was merged in the Company and added with capital on July 1, 2022.
9*: Ruian Medical Device is a subsidiary of Winner Pingan.
10*: Junjian Medical was merged in the Company and added with capital on October 31, 2022.
The scope of the consolidated financial statements for this reporting period and its changes are detailed in the notes “VIII.
Consolidation scope changes” and “IX. Interests in other entities”.
175
IV. Preparation Basis of Financial Statements
1. Preparation basis
This financial statement is prepared in accordance with the Accounting Standard for Business Enterprises -- Basic Standard
issued by the Ministry of Finance, various special accounting standards, guideline for application of accounting standard for
business enterprises, ASBE interpretations and other relevant regulations (hereinafter collectively referred to as “Accounting
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 Policies and Accounting Estimates
Specific accounting policy and accounting estimate:
The following significant accounting policy and accounting estimate of the Company are formulated in accordance with the
Accounting Standards for Business Enterprises. The business not mentioned is implemented in accordance with the relevant
accounting policies in the Accounting Standards for Business Enterprises.
1. Statement of compliance with Accounting Standards for Business Enterprises
These financial statements comply with the requirements of the Accounting Standards for Business Enterprises issued by the
Ministry of Finance, and truly and completely reflect the consolidated and parent company financial position of the Company
on December 31, 2022 and the business performance and cash flows of the Company in 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 Renminbi.
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2022 Annual Report
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.
6. Methods of preparing consolidated financial statements
1) Scope of consolidation
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.
177
During the reporting period, if subsidiaries or business are increased due to business combination of enterprises not under the
same control, it shall be included in the consolidated financial statements as of the acquisition date on the basis of the fair
value of all identifiable assets, liabilities and contingent liabilities determined on the acquisition date.
If it is able to exercise control over the invested entity that is not under the same control due to additional investment or other
reasons, the equity held by the acquiree before the acquisition date shall be re-measured according to the fair value of the
equity on the acquisition date, and the difference between the fair value and the book value shall be included into the current
investment income. Other comprehensive income, which can be reclassified into profit and loss in the future, and other
changes in owners' equity under the equity method as related to the acquiree's equity held before the acquisition date are
converted to the investment income of the current period as of the acquisition date.
(2) Disposal of subsidiary
1 General disposal method
When the Company loses the control right over the invested entity due to disposal of part of the equity investment or other
reasons, the residual equity investment after the disposal shall be re-measured at its fair value on the date of losing the control
right. The difference between the sum of the consideration acquired by disposal of the equity and the fair value of the residual
equity, minus the sum of the share of the net assets of the original subsidiary continuously calculated from the acquisition
date or the merging date and the goodwill according to the original shareholding ratio, shall be included in the investment
income in the period of lose of the control right. Other comprehensive income related to the equity investment of the original
subsidiary that can be reclassified into profit and loss in the future, and other changes in owners' equity under the equity
method are converted to the investment income in the period of lose of the control right.
2 Disposal of subsidiary by steps
For disposal of the equity investment in the subsidiary by steps through multiple transactions till loss of the control right, the
terms, conditions and economic impact of the disposal on each transaction in respect of the equity investment of the
subsidiary are subject to one or more of the following circumstances, which generally indicate that the multiple transactions
are package deals:
i. The transactions were entered into simultaneously or with consideration of their mutual influence;
ii. These transactions as a whole can only achieve a complete business result;
iii. The occurrence of one transaction depends on the occurrence of at least one other transaction;
iv. A transaction is not economical alone, but economic when considered with other transactions.
If each transaction belongs to a package deal, each transaction shall be subject to accounting treatment as a deal for disposal
of subsidiary and loss of the control right; the difference between the disposal price and the share of net assets of the
subsidiary corresponding to the disposal of investment before the loss of control right is recognized as other comprehensive
income in the consolidated financial statements and transferred into the current profit and loss in the period of loss of control
right.
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.
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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 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 “undistributed profits”, others items 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.
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The Company classifies the financial assets that meet the following conditions and are not designated to be measured at fair
value and whose changes are recorded into the profits and losses of the current period as financial assets measured at the
amortized cost:
— The business model is aimed at collecting contract cash flows;
— The contract cash flow is only the payment of the principal and interest based on the outstanding principal amount.
The Company classifies the financial assets that meet the following conditions and are not designated to be measured at fair
value and whose changes are recorded into the profits and losses of the current period as financial assets measured at fair
value of which changes are recorded into other comprehensive income (debt instrument):
— The business model is aimed at collecting contract cash flows and the sale of such financial assets;
— The contract cash flow is only the payment of the principal and interest based on the outstanding principal amount.
For non-trading equity instrument investments, the Company may, at the time of initial recognition, irrevocably designate
them as financial assets measured at fair value of which changes are recorded into other comprehensive income (equity
instrument). The designation is made on a single investment basis and the related investments meet the definition of an equity
instrument from an issuer's perspective.
Except the above financial assets measured at the amortized cost and the financial assets measured at fair value of which
changes are recorded into other comprehensive income, the Company classifies all other financial assets as financial assets at
fair value of which changes are recorded in current profit and loss. Upon initial recognition, if accounting mismatches can be
eliminated or significantly reduced, the Company may irrevocably designate the financial assets that should have been
classified as those measured at the 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 the changes are included in other comprehensive income (debt
instrument)
Financial assets measured at fair value of which the changes are included in other comprehensive income (debt instrument),
including receivables financing and other debt investments, are initially measured at fair value and related transaction costs
are included in the initial recognized amount. The financial asset is subsequently measured at its fair value, and changes in
the fair value are recorded in other comprehensive income, except the interest, impairment loss or gains and exchange gain
and loss calculated by the effective interest rate method.
Upon the de-recognition, the accumulated gains or losses previously recorded in other comprehensive income will be
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transferred from other comprehensive income to current profit and loss.
(3) Financial assets measured at fair value of which the changes are included in other comprehensive income (equity
instrument)
Financial assets measured at fair value of which changes are recorded into other comprehensive income (equity instrument),
including other equity instrument investment, are initially measured at fair value and related transaction costs are included in
the initial recognized amount. Such financial assets are subsequently measured at the fair value and the change in the fair
value is recorded into other comprehensive income. The dividends obtained are recorded in current profit and loss.
Upon the de-recognition, the accumulated gains or losses previously recorded in other comprehensive income will be
transferred from other comprehensive income to retained earnings.
(4) Financial assets measured at fair value of which the changes are included in current profit and loss
Financial assets measured at fair value of which changes are recorded in current profit and loss, including trading financial
assets, derivative financial assets, other non-current financial assets, etc., are initially measured at fair value and related
transaction expenses are recorded in current profit and loss. Such financial assets are subsequently measured at the fair value
and the change in the fair value is recorded into current profit and loss.
(5) Financial liabilities measured at fair values of which the changes are include in the current profits or losses
Financial liabilities measured at fair value of which changes are included in current profit and loss, including trading financial
liabilities, derivative financial liabilities, etc., are initially measured at fair value and related transaction expenses are
recorded in current profit and loss. Such financial liabilities are subsequently measured at the fair value and the change in the
fair value is recorded into current profit and loss.
Upon the de-recognition, the difference between its book value and the consideration paid is recorded in current profit and
loss.
(6) Financial liabilities measured at the amortized cost
Financial liabilities measured at amortized cost, including short-term 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 originally
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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 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
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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
See “12. Accounts receivable”for details.
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
Bank acceptance joint-stock commercial banks), no provision for bad debts shall be made; if the acceptor is another bank
bill or financial 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
Trade acceptance
accounts receivable are transferred to notes receivables, the age of accounts is calculated continuously).
The Company combines the notes receivable - trade acceptance, accounts receivable 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. 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
The measurement of impairment loss of other receivables other than accounts receivable and notes receivable (including
other receivables, long-term receivables, etc.), shall be made b referring to the “V. 10. Financial instruments 6) Test method
and accounting treatment method of financial assets (excluding receivables) impairment”.
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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
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 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.
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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) Testing 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 and make the difference above higher than the book value of the
asset, the Company shall reverse the withdrawn impairment provision and include it into the current profit and loss, but the
book value of the reversed asset shall not exceed the book value of such asset on the reversal date if the impairment provision
is not withdrawn.
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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 through the fair value model, 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
Not applicable.
22. Long-term equity investment
1) Criteria for determining joint control and significant influence
Joint control refers to the joint control over an arrangement in accordance with the relevant agreement, and the related
activities of the arrangement can only be decided upon the unanimous consent of the parties sharing the control. Where the
Company and other joint venture parties jointly exercise joint control over the invested entity and enjoy rights over the net
assets of the invested entity, the invested entity shall be a 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 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.
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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 issued equity securities.
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 shall be enjoyed by the Company and shall be offset. On this basis,
investment income shall be recognized, except that the assets invested or sold constitute business. The unrealized internal
deal loss between the Company and the invested entity is recognized in full amount if attributable to the assets impairment
loss.
The net loss incurred by the Company to the cooperative enterprise or joint venture, except for the liability for additional loss,
shall be written down to zero by the book value of long-term equity investment and other long-term equity substantially
constituting the net investment in the cooperative enterprise or joint venture. If the cooperative enterprise or joint venture
achieves the net profits in the later periods, the Company recovers to recognize the gain sharing amount after making up for
the unrecognized loss sharing amount with the gain sharing amount.
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(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
Cost method
Depreciation or amortization method
Investment real estate refers to real estate held for the purpose of earning rent and/or capital appreciation, including leased
land use rights, land use rights held and prepared for transfer after appreciation, leased buildings (including self-constructed
buildings and the buildings that are self built or developed for rent after completion of activities, as well as the buildings that
are under construction or development for future lease).
Subsequent expenditures related to investment real estate are recognized as investment real estate costs when the related
economic benefits are likely to flow in and their costs can be reliably measured; Otherwise, it will be included in the current
profit and loss at the time of occurrence.
The existing investment real estate are measured by our Company through the cost method. For investment real estate
measured through the cost method, buildings for lease is applicable to the same depreciation policy as the Company's fixed
assets, right of use the leased land is applicable to the same amortization policy as intangible assets.
24. Fixed assets
(1) Recognition conditions
Fixed assets refer to the tangible assets which are held for production of goods, provision of labor, lease or operating
management and whose service life exceeds a fiscal year. The fixed assets can be recognized in the following conditions:
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1 The economic benefits related to the fixed assets are likely to flow to the enterprise;
2 The cost of the fixed assets can be reliably measured.
The fixed assets are initially measured according to the cost (and the influence of the expected disposal cost factors).
Subsequent expenditure related to fixed assets, if the economic benefits related may flow in and the cost can be reliably
measured, is included in the fixed asset cost; and the book value of the replaced part is derecognized; all other subsequent
expenditures are recorded into current profit and loss when incurred.
(2) Depreciation method
Depreciation
Class Depreciation life Residual rate Yearly depreciation
method
Straight-line
Houses and building 10-38 years 5.00%-10.00% 2.37%-9.50%
depreciation
Straight-line
Machinery equipment 2-15 years 5.00%-10.00% 6.00%-47.50%
depreciation
Straight-line
Transportation equipment 3-10 years 5.00%-10.00% 9.00%-31.67%
depreciation
Electronic equipment and office Straight-line
2-10 years 5.00%-10.00% 9.00%-47.50%
equipment, etc. depreciation
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. 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. The construction in progress will be transferred into fixed assets and begin to subject to
depreciation from the following month when it reaches the intended serviceable condition.
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.
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Capitalization begins at the time when borrowing costs meet the following conditions:
(1) Asset expenditures have been incurred, including expenditures incurred in the form of cash payment, transfer of non-
cash assets or undertaking interest-bearing liabilities for the purchase and construction of or production of assets
eligible for capitalization;
(2) Borrowing costs have been incurred;
(3) The purchase, construction or production activities which are necessary to prepare the asset for its intended use or sale
have started.
When the purchase, construction or production of assets that meet the capitalization conditions reach the predetermined
usable or marketable state, the capitalization of borrowing costs shall cease.
3) Capitalization suspension period
If the assets that meet the capitalization conditions are abnormally interrupted in the process of purchase and construction or
production, and the interruption period is more than 3 consecutive months, the capitalization of borrowing costs shall be
suspended; if the interruption is necessary for the purchase, construction or production of the assets that meet the
capitalization conditions to reach the predetermined usable state or marketable state, the borrowing costs shall continue to be
capitalized. The borrowing costs incurred during the interruption period are recognized as the current profit and loss, until the
borrowing costs continue to be capitalized after the purchase and construction or the production activities of the assets are
restarted.
4) Calculation method of capitalization rate and capitalization amount of borrowing costs
For the specific borrowing for the purchase and construction or production of assets eligible for capitalization, the
capitalization amount of borrowing costs shall be recognized by the borrowing costs actually occurring in the current period
of specific borrowing, minus the amount of the interest income obtained by depositing the unused borrowing funds in the
bank or the investment income obtained by making temporary investment.
For the general borrowing occupied for the purchase, construction or production of assets that meet the capitalization
conditions, the amount of borrowing expenses to be capitalized for the general borrowing shall be calculated and recognized
according to the weighted average of the accumulated asset expenditure exceeding the specific borrowing multiplied by the
capitalization rate of the general borrowing occupied. The capitalization rate is calculated and recognized according to the
weighted average effective interest rate of the general borrowing.
During the capitalization period, the difference between the exchange of the principal and interest of the specific foreign
currency borrowing shall be capitalized and included 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
Not applicable.
28. Oil and gas assets
Not applicable.
29. Right-of-use assets
Please refer to Note “V. 42: Lease”.
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30. Intangible assets
(1) Valuation method, service life and impairment test
1) Pricing methods of 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 useful life of the intangible assets are analyzed by the Company at the time of obtaining.
The intangible assets with limited useful life shall be amortized within the period when the intangible assets bring economic
benefits to the Company; the intangible assets that cannot be expected to bring economic benefits to the Company are
deemed to have uncertain life and are not amortized.
2) Estimation of useful life of intangible assets with limited life
Item Expected service life Basis
Term of use specified in the land-use right
Land use right 38-50 years
certificate
Software use right 2-8 years Useful life estimated by the management
Benefit period specified in the certificate of
Trademark right 5-10 years
trademark use
Benefit period specified in the certificate of patent
Patent right 5-10 years
use
Franchised use right 3 Term of use stipulated in the contract
Client relations 10 years Useful life estimated by the management
3) Basis for judging intangible assets with uncertain service life and the procedures for reviewing their service life
During this reporting period, there is no intangible assets with uncertain service life in the Company .
(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 at 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 It istechnically feasible to complete the intangible assets, so that they can be used or sold;
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2 It is intended to finish and use or sell the intangible assets;
3 The 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 that have
not yet reached the usable state shall be at least subject to an impairment test at the end of each year, regardless of whether
there is any signs of impairment.
The Company conducts the goodwill impairment tests. For the book value of the goodwill formed due to business
combination, it shall be apportioned to relevant asset group by a reasonable method from the date of purchase; if it is difficult
to apportion to the relevant asset group, it shall be apportioned to the relevant asset group combination. The relevant asset
group or asset group combination is an asset group or asset group combination that can benefit from the synergies of business
combination.
At the time of 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.
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34. Employee compensation
(1) Short-term compensation accounting method
The Company shall recognize the short-term compensation incurred actually during the accounting period when the
employees provide services for the Company as the liabilities and includes in current profits and losses or related asset costs.
For the social insurance premiums and housing funds paid by the Company for the employees as wells as the labor union
expenditure and personnel education fund withdrawn according to the provisions, the corresponding employee compensation
amount is recognized according to the stipulated accruing basis and accruing proportion during the accounting period when
the employees provide services for the Company.
The employee welfare expenses incurred by the Company shall be recorded into the current profit and loss or relevant asset
cost according to the actual amount when actually incurred, and the non-monetary welfare shall be measured at its fair value.
(2) Post-employment benefits accounting method
1 Defined contribution plan
The Company pays the basic endowment insurance and unemployment insurance for the employees according to relevant
provisions of the local government, calculates the amount payable according to local payment base and proportion in the
accounting period when the employees provide services for the Company, recognizes the amount payable as the liabilities
and includes in current profits and losses or related asset costs. In addition, the Company has also participated in the
corporation pension plan / supplementary pension insurance fund approved by the relevant departments of the state. The
Company pays the fees to the pension plan / local social security institution according to a certain proportion of the total
employee wages and includes corresponding expenses in current profits and losses or related asset costs.
2 Defined benefit plan
The Company attributes the welfare obligations generated from the defined benefit plan to the period when the employees
provide services by the formula recognized according to the expected cumulative welfare unit method and includes in current
profits and losses or related asset costs.
The deficit or surplus formed from the present value of the defined benefit plan obligation subtracted by the fair value of the
defined benefit plan assets is recognized as a net liability or net asset of the defined benefit plan. In case of surplus in the
defined benefit plan, the Company measures the net assets of the defined benefit plan according to the lower of the surplus
and asset upper limits of the defined benefit plan.
All defined benefit plan obligations, including the obligations for payment within 12 months after the end of the expected
annual reporting period in which the employees provide services, are discounted according to the national debts matching the
defined benefit plan obligatory term and currency or the market return of the high-quality corporation bonds active in the
market on the balance sheet date.
The service costs generated from the defined benefit plan and the net interest of the net liabilities or net assets of the defined
benefit plan are included in current profits and losses or related asset costs; the changes from re-measurement of the net
liabilities or net assets of the defined benefit plan are included in other comprehensive income and not written back to the
profits and losses in subsequent accounting period. Upon the termination of the original defined benefit plan, the part
originally recorded into other comprehensive income within the scope of rights and interests shall be carried forward to
undistributed profit.
In the settlement of the defined benefit plan, the settlement profits or losses are recognized according to the balance between
the present value of the defined benefit plan obligation and the settlement price recognized on the settlement date.
(3) Termination benefits accounting method
Where the Company provides dismission welfare for its employees, it shall recognize the employee compensation liabilities
arising from the dismission welfare and include it in the current profit and loss on the earlier date 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
35. Lease liabilities
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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:
● 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.
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2) Cash-settled share-based payments and equity instrument
The cash-settled share-based payments will be measured according to the fair value of the liability confirmed basing on the
shares borne by the Company and other equity instruments. For share-based payment transactions with exercisable rights
immediately after the grant, the Company shall include it in the relevant costs or expenses in accordance with the fair value
of the equity instrument on the grant date, and the liabilities shall be increased accordingly. If the rights can only be exercised
after the situation that service within the waiting period is completed and set performance is achieved, the service obtained in
the current period, according to the fair value of the liabilities borne by the Company, and basing on the best estimate for the
condition of exercising rights, will be recorded into relevant costs or expenses on each and every balance sheet date during
the waiting period, and correspondingly recorded into the liabilities. Each and every balance sheet date and settlement before
relevant liability settlement, the fair value of liability will be remeasured, of which changes occurred will be counted into the
current period.
If the Company modifies the terms and conditions of the cash-settled share-based payment agreement settled in cash to
change it to equity-settled share-based payment, on the date of modification (whether during or after the waiting period), the
Company will measure the equity-settled share-based payment according to the current fair value of the granted equity
instrument, and include the services acquired in the capital reserve. At the same time, it shall terminate the recognition of
liabilities recognized on the modification date for the cash-settled share-based payment, with the difference recorded into the
current profit and loss. If the waiting period is extended or shortened due to the modification, the Company will carry out
accounting treatment according to the modified waiting period.
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 in the issued
preferred stock / perpetual bond, and not solely in legal form.
In case that the financial instrument such as perpetual bond / preferred stock issued by the Company meet one of the
following conditions, it will be classified as financial liabilities at the time of initial recognition in whole or in part:
(1) There are contractual obligations which the Company cannot unconditionally avoid fulfilling by delivering cash or
other financial assets;
(2) It contains contractual obligations of delivering a variable number of its own equity instruments for settlement;
(3) It contains derivative instrument (such as equity transfer, etc.) that is settled with its own equity, and such derivative
instrument does not exchange a fixed number of its own equity instruments for a fixed amount of cash or other financial
assets for settlement;
(4) There are contract clauses that may indirectly lead to contractual obligations;
(5) When the issuer liquidates, the perpetual bonds are in the same order of liquidation as the ordinary bonds and other
debts issued by the issuer.
In case that the financial instrument such as perpetual bond / preferred stock issued by the Company does not meet one of the
above conditions, it will be classified as equity instrument at the time of initial recognition in whole or in part.
39. Income
Accounting policies for income recognition and measurement
The Company has fulfilled its contractual obligations 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
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consideration, material financing elements in the contract, non-cash consideration, consideration payable to customers and
other factors.
The Company determines the transaction price including the variable consideration by an amount not exceeding the amount
of accumulated recognized income which is highly unlikely to be materially reversed when the relevant uncertainty is
eliminated. If there is a material financing component in the contract, the Company shall determine the transaction price
based on the amount payable in cash when the customer acquires control of the goods or services, and shall amortize the
difference between the transaction price and the contract consideration by the effective interest method during the contract
period. If one of the following conditions is satisfied, it shall be deemed to have performed its performance obligation within
a certain period of time; otherwise, it shall be deemed to have performed its performance obligation at a certain time point:
● The customer obtains and consumes the economic benefits arising from the Company's performance at the same time of
the Company's performance.
● The customer can control the goods under construction during the Company's performance.
● The goods produced by the Company during the performance are of irreplaceable use, and the Company shall be
entitled to receive payment for the accumulated part of the performance completed so far during the whole contract
period.
For the performance obligations performed within a certain period of time, the Company shall recognize the income in
accordance with the performance progress during that period, except where the performance progress cannot be reasonably
determined. Taking into account the nature of the goods or services, the Company will use the output method or input method
to determine the performance schedule. If the performance schedule cannot be reasonably determined and the cost already
incurred is expected to be compensated, the Company shall recognize the income according to the cost already incurred until
the performance schedule can be reasonably determined.
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
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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
NA
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
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.
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41. Deferred income tax assets / deferred income tax liabilities
The income tax includes current income tax and deferred income tax. Except for the income tax arising from the business
combination and the transaction or item directly booked into the owners' equity (including other comprehensive income), the
Company will record the current income tax and deferred income tax into the current profit and loss.
Deferred income tax assets and deferred income tax liabilities shall be calculated and recognized on the basis of the
difference (temporary difference) between the tax basis of the assets and liabilities and their book value.
For the deferred income tax assets recognized through deductible temporary difference, it is limited to the amount of taxable
income which is likely to be obtained to offset the deductible temporary difference in the future period. For the deductible
loss and tax deduction that can be carried forward to the subsequent year, the corresponding deferred income tax assets are
recognized within the limit of the future taxable income amount that is possibly obtained to deduct the deductible loss and tax
deduction.
For taxable temporary differences, except in special circumstances, the deferred income tax liability is recognized. Special
circumstances in which deferred income tax assets or deferred income tax liabilities are not recognized include:
● 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
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.
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For rent concessions, such as rent reduction and deferred payment, directly caused public health events 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:
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, 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:
The initial measurement amount of the lease liabilities;
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;
The initial direct expenses incurred by the Company;
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:
Fixed payments (including actual fixed payments), if there is lease incentive, the relevant amount of lease incentive shall be
deducted;
Variable lease payments that depend on an index or rate;
The amount estimated to be paid based on the residual value of the guarantee provided by the Company;
The exercise price of the purchase option, provided that the Company reasonably determines that the option will be exercised;
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:
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;
In case of any change in substantial fixed payment, the estimated payable amount of the residual value of the guarantee, or
the index or ratio used to determine the lease payment, the Company shall remeasure the lease liability according to the
present value which is calculated based on the changed lease payment and the revised discount rate. However, where the
changes in lease payment results from the change in floating interest rate, a revised discount rate will be used for calculation
of the present value.
3) Short-term leases and low-value asset leases
The Company chooses not to recognize right-of-use assets and lease liabilities for short-term leases and low-value asset
leases, and includes the relevant lease payments in the current profit and loss or related asset costs on a straight-line basis
over each period of the lease term. Short-term leases refer to the leases with a lease term of not more than 12 months and
excluding purchase options on the commencement date of the lease term. Low-value asset leases refers to the leases with a
lower value when the single leased asset is a new asset. Where the Company subleases or expects to sublease the leased
assets, the original lease will not be a low-value asset lease.
4) Lease changes
In case of any lease changes that meet the following conditions, the Company shall treat the lease change as a separate lease
for accounting treatment:
The lease change expands the lease scope by adding the right to use one or more leased assets;
The increased consideration is equivalent to the amount of the separate price of the expanded part of the lease upon
adjustment based on the contract.
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 public health events
If the simplified method of rent concessions related to public health events 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 into 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 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
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financial leases. When the Company acts as a sublease lessor, sublease classification will be made based on the right-of-use
asset arising from the original lease.
1) Accounting for operating lease
The lease receipts from operating lease are recognized as rental income on a straight-line basis over each period of the lease
term. The Company capitalizes the initial direct expenses incurred in relation to operating leases, which are amortized and
included in the current profit and loss on the same basis as the rental income is recognized during the lease term. The variable
lease payments not credited into lease receipts shall be included into current profit or loss or when they are actually incurred.
In case of any change in the operating lease, the Company shall treat it as a new lease for accounting treatment from the
effective date of the change, and the advance receipts or lease receivables related to the lease before the change shall be
deemed to be the amount received for the new lease.
2) Accounting for finance lease
On the commencement date of the lease term, the Company recognizes finance lease receivables for finance leases and
terminates the recognition of the finance lease assets. When the Company initially measures the finance lease receivables, the
net lease investment is regarded as the entry value of the finance lease receivables. The net lease investment is the sum of the
unguaranteed residual value and the present value of the lease receipts that have not been received at the commencement date
of the lease, discounted at the interest rate implicit in the lease.
The Company calculates and recognizes the interest income during each period of the lease term at a fixed periodic rate. The
derecognition and impairment of finance lease receivables shall be accounted for in accordance with Note “V. 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:
The change expands the lease scope by adding the right to use one or more leased assets;
The increased consideration is equivalent to the amount of the separate price of the expanded part of the lease upon
adjustment based on the contract.
In case that the change of a financial lease is not accounted for as a separate lease, the Company shall deal with the changed
lease under the following circumstances:
If the change takes effect on the commencement date of the lease term, and the lease is classified as an operating lease, the
Company will account for it as a new lease from the effective date of the lease change, and take the net lease investment
before the effective date of the lease change as the book value of the leased asset;
If the change takes effect on the commencement date of the lease term, and the lease is classified as a financial lease, the
Company will conduct accounting treatment according to the policy in Note “V. 10. Financial instruments” regarding the
modification or renegotiation of contracts.
3) Rent concessions related to public health events
If the change takes effect on the commencement date of the lease term, and the lease is classified as an operating lease, the
Company will account for it as a new lease from the effective date of the lease change, and take the net lease investment
before the effective date of the lease change as the book value of the leased asset;
If the change takes effect on the commencement date of the lease term, and the lease is classified as a financial lease, the
Company will conduct accounting treatment according to the policy in Note “V. 10. Financial instruments” regarding the
modification or renegotiation of contracts.
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
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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.
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
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hedged items or hedging instruments shall be adjusted to make the hedge ratio meet the requirements of effectiveness
again.
(3) Hedge accounting treatment methods
1) Fair value hedging
Changes in the fair value of hedge derivative instruments are recorded in the current profit and loss. Changes formed by the
fair value of the hedged item due to the hedging risk shall be included in the current profit and loss, and the book value of the
hedged item shall be adjusted simultaneously.
For fair value hedging related to financial instruments measured at amortized cost, the adjustments to the book value of the
hedged item are amortized during the remaining period between the adjustment to the due date and recorded in the current
profit and loss. Amortization under the effective interest rate method may commence immediately after the book value
adjustment and shall not be later than the adjustment of fair value changes in the termination of hedging risks by the hedged
item.
If the hedged item is terminated, the unamortized fair value is recognized as the current profit and loss.
Where the hedged item is a firm commitment that has not been recognized, the accumulative change in the fair value of the
firm commitment caused by the hedging risk is recognized as an asset or liability, and the relevant gains or losses are
recorded into the current profits and losses. Changes in the fair value of hedging instruments are also recorded in the current
profit and loss.
2) Cash flow hedging
The part of the gain or loss of the hedging instrument that belongs to the effective hedging shall be directly recognized as
other comprehensive income, while the part that belongs to the invalid hedging shall be recorded into the current profit and
loss.
If the hedged transaction affects the current profit and loss, such as when the hedged financial income or financial expense is
recognized or when the expected sale occurs, the amount recognized in other comprehensive income will be transferred to the
current profit and loss. If a hedged item is the cost of a non-financial asset or non-financial liability, the amount originally
recognized in other comprehensive income amount is transferred out and recorded into the amount of initial recognition of
the non-financial asset or non-financial liability (or the amount originally recognized in other comprehensive income is
transferred out during the same period as the non-financial asset or non-financial liability affecting the profit and loss, and
recorded into the current profit and loss).
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.
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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 canceled, the
total par value of the shares calculated according to the par value of the shares and the number of canceled shares shall be
debited to the “Share Capital”, and the book balance of the canceled treasury stock shall be credited to the “Treasury Stock”.
The premium originally recorded in the capital surplus at the time of stock issuance shall be offset according to the difference,
and the “Capital Surplus - capital stock premium” shall be debited. The part of the repurchase price exceeding the above
offset of “Share Capital” and “Capital Surplus - capital stock premium” shall be debited to the “Surplus Reserves” and “Profit
Distribution - undistributed profits” and other subjects in turn. If the repurchase price is lower than the share capital
corresponding to the repurchased shares, the difference between the book balance of the canceled 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 canceled 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
(1) Implementation of the Interpretation of Accounting Standards for Business Enterprises No.15
On December 30, 2021, the Ministry of Finance issued the Interpretation of Accounting Standards for Business Enterprises
No.15 (CK [2021] No.35, hereinafter referred to as “Interpretation No.15”).
1 Accounting treatment for trial operation sales
Interpretation No.15 stipulates the accounting treatment and presentation of products or by-products produced by enterprises
before their fixed assets reach a intended usable state or during the research and development process for external sales, and
stipulates that the net income related to trial operation sales after offsetting costs shall not be used to offset the cost of fixed
assets or research and development expenses. This regulation shall come into effect from January 1, 2022, and retrospective
adjustments shall be made to trial operation sales from the beginning of the earliest period for financial statement
presentation to January 1, 2022. There was no effect for our Company to implement this regulation.
2 Judgment on loss contracts
Interpretation No.15 clarifies that the “cost of performing the contract” considered by enterprises in determining whether the
contract constitutes a loss contract shall include both the incremental cost of performing the contract and the allocation
amount of other costs directly related to the performance of the contract. This regulation shall come into effect from January
1, 2022. Enterprises shall apply this regulation for the contracts with obligations have not been fulfilled in full by January 1,
2022. The cumulative impact shall be adjusted to the retained earnings and other related financial statement items at the
beginning of the year of the effective date, without any adjustment to the early comparative financial statement data. There
was no effect for our Company to implement this regulation.
(3) Implementation of the Interpretation of Accounting Standards for Business Enterprises No.16
On November 30, 2021, the Ministry of Finance published the Interpretation of Accounting Standards for Business
Enterprises No.16 (CK [2022] No.31, hereinafter referred to as “Interpretation No.16”).
1 Accounting treatment for the income tax impact of dividends related to financial instruments classified by the issuer as
equity instruments
Interpretation No. 16 stipulates that, for financial instruments classified by enterprises as equity instruments, if the relevant
dividend expenditures are deducted before corporate income tax in accordance with relevant tax policies, the income tax
impact related to the dividends shall be recognized at the time of confirming the dividends payable, and the income tax
impact of dividends shall be recorded into current profit and loss or owners' equity items (including other comprehensive
income items) under the accounting treatment which is consistent with that used in past transactions or events that generate
distributable profits.
This regulation shall come into effect from the date of promulgation, and the relevant dividends payable produced between
January 1, 2022 and the effective date shall be adjusted in accordance with this regulation;
For the dividends payable produced before January 1, 2022 when the relevant financial instruments have not been
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derecognized, retrospective adjustments shall be made. The implementation of such provisions did not have a significant
impact on the Company's financial position and operating results.
2 Accounting treatment on the modification of cash-settled share-based payments to equity-settled share-based payments
Interpretation No.16 clarifies that, if the Company modifies the terms and conditions of the cash-settled share-based payment
agreement settled in cash to change it to equity-settled share-based payment, on the date of modification (whether during or
after the waiting period), the Company will measure the equity-settled share-based payment according to the fair value of the
equity instrument on the date of modification, and include the services acquired in the capital reserve. At the same time, it
shall terminate the recognition of liabilities recognized on the modification date for the cash-settled share-based payment,
with the difference recorded into the current profit and loss.
This regulation shall come into effect from the date of promulgation, and any new transactions added from January 1, 2022 to
the implementation date shall be adjusted in accordance with this regulation; If the relevant transactions carried out before
January 1, 2022 were not processed in accordance with this regulation, retrospective adjustments shall be made, and the
cumulative impact shall be adjusted to the retained earnings and other related financial statement items on January 1, 2022,
without any adjustment to the early comparative financial statement data. The implementation of such provisions did not
have a significant impact on the Company's financial position and operating results.
(2) Changes in major accounting estimates
Applicable √ Not applicable
45. Others
NA
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VI. Taxation
1. Main tax categories and tax rates
Tax category Taxation basis Tax rate
Calculate the substituted money on VAT on the basis of the
income from selling goods and taxable services according to the
Added value tax 13%, 9%, 6%, 3%, 0%
tax law. After deduction of the withholdings on VAT allowed to
deduct in current period, the balance is the VAT payable
Consumption tax N/A N/A
Urban maintenance Levied by actual paid value added tax (including the exemption
7%, 5%
and construction tax part) and consumption tax
Corporate income tax Levied by income tax payable 25%, 20%, 16.5%, 15%
Levied by actual paid value added tax (including the exemption
Education surcharge 3%
part) and consumption tax
Note 1: Some stores of Shenzhen Purcotton, Guangzhou Purcotton, Beijing Purcotton, Shanghai Purcotton and Cotton Lining are
small-scale taxpayers, and VAT is levied at the rate of 3.00%. The VAT rate of stores for non-small-scale taxpayers will be 13.00%
in 2022, and 6.00% or 3% (small-scale taxpayers) VAT rate will be applied to some stores providing catering services. The books
sold in Shenzhen Purcotton since 2019 will be exempted from VAT according to Article 2 of the Notice on the Continuation of the
Preferred Policies on Value-added Tax of Cultural Promotion (C.S. [2018] No. 53) of Ministry of Finance and State Taxation
Administration. According to the Announcement of the Ministry of Finance and the State Administration of Taxation on the
Exemption of VAT Small-scale VAT Taxpayers (Announcement No. 15 of the Ministry of Finance and the State Administration of
Taxation in 2022), from April 1, 2022 to December 31, 2022, small-scale VAT taxpayers shall be exempt from value-added tax for
the taxable sales income which is applicable to a rate of 3%; And for the prepaid VAT items which is applicable to a pre-tax rate of
3%, prepayment of value-added tax shall be suspended.
Note 2: The VAT rate of 13.00% will be applied to the goods sold by the Company and other general taxpayer subsidiaries in 2022.
The Company and some of its subsidiaries have the right to import and export, and the VAT on export products is subject to the
export tax rebate policy of “exemption, credit and refund”.
The VAT generated by the consulting service income of the Company is levied at the rate of 6.00%, while the VAT generated by the
warehousing service income of Winner Medical (Huanggang) is levied at the rate of 6.00%.
If there are taxpayers with different enterprise income tax rates, the disclosure statement shall present
Name of taxpayer Income tax rate
Winner Medical, Winner Medical (Huanggang), Winner Medical (Tianmen), Winner Medical
(Jingmen), Winner Medical (Chongyang), Winner Medical (Jiayu), Qianhai Purcotton, Winner 15%
Medical (Wuhan), Longterm Medical, Winner Guilin, Winner Medical (Hunan)
Winner Medical (Hong Kong) 16.5%
Pure HB (Shanghai), Hangzhou Shengyi, Xi'an Longtemu, Deqing Longterm, Ruian Medical
20%
Device
2. Tax preference
(1) On December 23, 2021, according to the Notice on Publicizing the List of First Batch of High-tech Enterprises to be
Identified in Shenzhen in 2021 issued by the Leading Group Office of National High-tech Enterprise Accreditation
Administration, the Company passed the High-tech Enterprise Qualification Reexamination (Certificate No.:
GR202144202494). From 2021 to 2023, the corporate income tax can be paid at a preferential tax rate of 15.00%.
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2022 Annual Report
(2) According to the Notice on Publicizing the List of the Second Batch of High-tech Enterprises to be Identified in Hubei
Province in 2019, Winner Medical (Huanggang) was identified as the second batch of high-tech enterprises with the
certificate number of GR201942002414, and passed the qualification review of high-tech enterprises in 2022. Winner
Medical (Huanggang) is eligible to pay corporate income tax at a preferential rate of 15.00% from 2022 to 2024.
(3) Qianhai Purcotton was established on July 21, 2015, with its domicile located in Shenzhen Qianhai Shenzhen-Hong
Kong Cooperation Zone. According to the Notice of Enterprise Income Tax Preferential Policies and Preferential
Directory in Shenzhen Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone of Hengqin New
Fujian Pingtan Comprehensive Experimental Area (C.S. [2014] No. 26) issued by the Ministry of Finance and State
Taxation Administration, Qianhai Purcotton pays its enterprise income tax at the tax rate of 15.00%.
(4) According to the Notice on Publicizing the List of Fourth Batch of High-tech Enterprises to be Identified in Hubei
Province in 2021 issued by the Leading Group Office of National High-tech Enterprise Accreditation Administration
on December 23, 2021, Winner Medical (Jingmen) obtained the High-tech Enterprise Certificate (Certificate No.:
GR202142004475) on December 03, 2021. From 2021 to 2023, the 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, the 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 issued on December 15, 2021, Winner Medical (Chongyang) and Winner Medical (Tianmen)
obtained the High-tech Enterprise Certificates (Certificate No.: GR202142000579, GR202142002367) on November 15,
2021. From 2021 to 2023, the corporate income tax can be paid at a preferential tax rate of 15.00%.
(7) Pure HB (Shanghai) was established on March 16, 2018 as a small enterprise with small profits. The part with annual
taxable income not exceeding RMB 1 million shall be reduced by 12.5% and included into the taxable income, and the
corporate income tax shall be paid at the tax rate of 20%; The part with annual taxable income exceeding RMB 1
million but not exceeding RMB 3 million shall be reduced by 25% and included into the taxable income, and corporate
income tax shall be paid at the rate of 20%.
(8) According to the Notice on Publicizing the List of Second Batch of High-tech Enterprises to be Identified in Hubei
Province in 2022 issued on November 9, 2022, Winner Medical (Wuhan) obtained the High-tech Enterprise Certificate
(Certificate No.: GR202242002319) on November 9, 2022. From 2022 to 2024, the corporate income tax can be paid at
a preferential tax rate of 15.00%.
(9) Zhejiang Longterm, which was recognized as a high-tech enterprise on November 13, 2017, 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.
(10) 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 50% and included into the taxable income, and
corporate income tax shall be paid at the rate of 20%.
(11) Winner Medical (Hunan) was recognized as a high-tech enterprise in 2010 to pay corporate income tax at a preferential
tax rate of 15%. It obtained an updated high-tech enterprise qualification certificate on December 2, 2019 with a
validity period of three years until December 1, 2022, passed the high-tech enterprise certification for the third time in
2022 to obtain a certificate with number of GR202243004478 and expiration date of December 12, 2025.
(12) Hunan Ruian Medical Device Technology Co., Ltd. is a small enterprise with small profits. The part with annual
taxable income not exceeding RMB 1 million shall be reduced by 12.5% and included into the taxable income, and the
corporate income tax shall be paid at the tax rate of 20%; The part with annual taxable income exceeding RMB 1
million but not exceeding RMB 3 million shall be reduced by 50% and included into the taxable income, and corporate
income tax shall be paid at the rate of 20%. At present, the annual taxable income of Ruian Medical Device is less than
RMB 1 million, and the actual tax rate is 2.5%.
207
(13) On October 23, 2020, Winner Guilin passed the high-tech enterprise certification to obtain the high-tech enterprise
certificate with number of GR202045000476 and validity period of three years. According to the relevant preferential
policies of China for high-tech enterprises, qualified high-tech enterprises shall be subject to a corporate income tax at a
preferential tax rate of 15% for three years from the year of recognition. Winner Guilin can be entitle to this preferential
policy from 2020 to 2022.
3. Others
VII. Notes to Items in Consolidated Financial Statements
1. Cash and cash equivalents
Unit: yuan
Item Closing Balance Beginning balance
Cash on hand 246,825.76 65,897.39
Bank deposit 4,169,305,311.41 4,088,546,364.65
Other monetary capital 357,325,441.73 185,326,064.78
Total 4,526,877,578.90 4,273,938,326.82
Where: total amount deposited abroad 15,822,664.52 11,841,008.78
Total amount of funds with restrictions on use due to
156,055,620.73 185,326,064.78
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:
Closing balance of the previous
Item Closing Balance
year
Deposit for bank acceptance bill* 1 7,428,000.00
Letter of Credit deposit* 2 139,600,000.00 27,597,366.13
Performance bond* 3 2,922,681.16 2,162,025.10
Balance of other restricted monetary funds *4 6,104,939.57 155,566,673.55
Total 156,055,620.73 185,326,064.78
*1 Deposit for bank acceptance bill refers to the deposit deposited by Zhejiang Longterm to apply for bank acceptance bill.
*2 Letter of Credit deposit refers to the deposit made by Winner Medical (Tianmen) for international and domestic Letters of
Credit; the deposits deposited by Winner Medical (Shenzhen) for the domestic letters of credit to cover the payment to
subsidiaries; the deposits deposited by Shenzhen Purcotton for the domestic letters of credit to cover the payment to Winner
Medical (Huanggang).
*3 The performance bond refers to the bond deposited by Winner Medical (Hong Kong) for bidding transactions with
hospitals; the bond deposited by Zhejiang Longterm for automatic transfer of electricity charges; the bond deposited by
Winner Guilin for transactions with the Guangdong Provincial Health Commission Affairs Center.
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2022 Annual Report
*4 The balance of other restricted monetary funds refers to the receipt deposit of Winner Medical (Shenzhen); the balance of
special deposit accounts for restricted non-budget units opened by Shenzhen Purecotton in accordance with the regulations of
prepaid card issuance formulated by the Ministry of Commerce, and product deposit for the APP and mini program.
2. Tradable financial assets
Unit: yuan
Item Closing Balance Beginning balance
Financial assets measured with fair value and with the
4,378,789,960.23 3,130,529,709.10
changes included in current profit and loss
Including:
Bank financial products 3,027,531,039.77 1,778,361,521.42
Forward foreign exchange contract 6,334,756.86
Trust products 1,351,258,920.46 1,345,833,430.82
Including:
Total 4,378,789,960.23 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
Bank acceptance bill 51,001,784.57
Total 51,001,784.57
Unit: yuan
Closing Balance Beginning balance
Provision for bad Provision for bad
Book balance Book balance
Class debt Book debt Book
Accruing value Accruing value
Amount Proportion Amount Amount Proportion Amount
proportion proportion
Including:
Including:
209
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
(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 Others Closing Balance
balance Accrual Write-off
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 not
Amount with recognition terminated at the end
Item terminated at the end of the
of the period
period
Bank acceptance bill 95,314,075.78 32,671,254.70
Total 95,314,075.78 32,671,254.70
(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
Item Amount transferred to accounts receivable at the end of the 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
Nature of notes Amount Reasons for Write-off procedures Whether the payments arise
Unit name
receivable written off write-off performed from related transactions
Description of write-off notes receivable:
210
2022 Annual Report
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 Accruin
Propo Accruing Book value g Book value
Amount Amount Amount Proportion Amount
rtion proportion proporti
on
Accounts
receivable of
0.28
provision for 2,811,067.30 2,811,067.30 100.00%
%
bad debt by
single item
Including:
Accounts
receivable of
99.72 932,642,061 816,650,641.2
provision for 984,485,837.09 51,843,776.05 5.27% 100.00% 41,104,051.78 5.03% 775,546,589.42
% .04 0
bad debt by
combination
Including:
Aging
99.72 932,642,061
analysis 984,485,837.09 51,843,776.05 5.27%
% .04
method
100.0 932,642,061 816,650,641.2
Total 987,296,904.39 54,654,843.35 5.54% 100.00% 41,104,051.78 5.03% 775,546,589.42
0% .04 0
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 965,701,676.81 48,285,084.22 5.00%
1~2 years 15,169,852.52 1,516,985.25 10.00%
2~3 years 1,968,459.71 590,537.91 30.00%
3~4 years 384,218.53 192,109.27 50.00%
4~5 years 12,850.60 10,280.48 80.00%
More than 5 years 1,248,778.92 1,248,778.92 100.00%
Total 984,485,837.09 51,843,776.05
Description of the basis for determining the combination:
On December 31, 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 December 31, 2022 is estimated based on the aging of
accounts and estimated at the original loss ratio.
211
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 Book balance
Within 1 year (including 1 year) 966,089,497.52
1~2 years 15,332,065.15
2~3 years 1,968,459.71
More than 3 years 3,906,882.01
3~4 years 502,727.73
4~5 years 1,622,782.36
More than 5 years 1,781,371.92
Total 987,296,904.39
(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 Others
reversed
Provision
for bad
debt of 41,104,051.78 17,987,140.64 22,933,406.67 271,994.30 18,769,051.901 54,654,843.35
accounts
receivable
Total 41,104,051.78 17,987,140.64 22,933,406.67 271,994.30 18,769,051.90 54,654,843.35
Note: 1 The item “Others” mainly refers to the increase by business combination
Where the amount of bad debt provision recovered or reversed is important:
Unit: yuan
Unit name Amount recovered or reversed Recovery way
None
(3) Accounts receivable actually written off at the current period
Unit: yuan
Item Amount written off
Accounts receivable actually written off 271,994.30
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2022 Annual Report
Write-off of important accounts receivable:
Unit: yuan
Nature of accounts Amount Reasons for Write-off procedures Whether the payments arise
Unit name
receivable written off write-off performed from 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 balance of Ending balance of bad
Unit name
receivable accounts receivable debt provision
First 104,087,828.63 10.54% 5,204,391.43
Second 20,789,828.23 2.11% 1,039,491.41
Third 19,433,438.68 1.97% 971,671.93
Fourth 16,772,838.16 1.70% 838,641.91
Fifth 15,428,180.67 1.56% 771,409.03
Total 176,512,114.37 17.88%
(5) Accounts receivable derecognized due to transfer of financial assets
None
(6) Amount of assets and liabilities formed by transferring accounts receivables and continuing involvement
Other description:
6. Amounts receivable financing
Unit: yuan
Item Closing Balance Beginning balance
Notes receivable - bank acceptance bill 93,093,113.79 9,940,272.21
Total 93,093,113.79 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:
213
7. Advances to suppliers
(1) Presentation of advances to suppliers by aging
Unit: yuan
Closing Balance Beginning balance
Aging
Amount Proportion Amount Proportion
Within 1 year 226,208,813.98 98.32% 104,201,209.67 94.33%
1~2 years 2,922,303.77 1.27% 6,261,384.71 5.67%
2~3 years 948,358.84 0.41%
Less: Provision for bad
854,203.50
debts
Total 229,225,273.09 110,462,594.38
Reasons for non-timely settlement of important advances from customers with the aging more than 1 year:
(2) Advances to suppliers with Top 5 ending balances by prepayment object
Proportion in total ending balance of advances
Advance object Closing Balance
(%)
First 56,862,422.12 24.81
Second 38,000,000.00 16.58
Third 36,979,134.58 16.13
Fourth 12,265,221.29 5.35
Fifth 4,448,055.57 1.94
Total 148,554,833.56 64.81
Other description:
8. Other receivables
Unit: yuan
Item Closing Balance Beginning balance
Other receivables 236,298,390.78 329,179,077.01
Total 236,298,390.78 329,179,077.01
214
2022 Annual Report
(1) Interest receivable
1) Classification of interest receivable
Unit: yuan
Item Closing Balance Beginning balance
2) Important overdue interest
Unit: yuan
Whether there is impairment and its
Borrower Closing Balance Overdue time Overdue reason
judgment basis
Other description:
3) Provision for bad debt
Applicable √ Not applicable
(2) Dividends receivable
1) Classification of dividends receivable
Unit: yuan
Item Closing Balance Beginning balance
2) Important dividends receivable with the aging more than 1 year
Unit: yuan
Reason for non- Whether there is impairment and
Project (or invested unit) Closing Balance Aging
recovery its judgment basis
3) Provision for bad debt
Applicable √ Not applicable Other description:
215
(3) Other receivables
1) Other receivables classified by nature
Unit: yuan
Nature of payment Ending book balance Beginning book balance
Compensation for investment and construction
224,655,320.00 238,655,320.00
project of Heyuan Winner
Margin and deposit 107,940,240.20 112,419,848.22
Export drawback 147,743.12 7,309,079.43
Employee pretty cash 3,851,541.87 3,238,544.33
Others 20,322,649.47 15,766,563.91
Total 356,917,494.66 377,389,355.89
2) Provision for bad debt
Unit: yuan
Stage 1 Stage 2 Stage 3
Expected credit losses Expected credit
Expected credit losses
over the entire losses over the entire
Provision for bad debt over the next 12 Total
duration (without duration (with credit
months
credit impairment) impairment)
Balance on January 1, 2022 36,469,649.34 11,740,629.54 48,210,278.88
Balance on January 1, 2022 in
current period
- Carried over to Stage 3 (2,457,458.84) 2,457,458.84
Accrual in current period 89,523,641.71 89,523,641.71
Reversal in current period 20,634,053.16 20,634,053.16
Written-off in current period 2,457,458.84 2,457,458.84
Other changes 5,976,695.29 5,976,695.29
Balance on December 31, 2022 108,878,474.34 11,740,629.54 120,619,103.88
216
2022 Annual Report
Changes in book balance with significant changes in the current period of provision for loss
Applicable √ Not applicable
Disclosure by aging
Unit: yuan
Aging Book balance
Within 1 year (including 1 year) 41,891,601.58
1~2 years 20,875,710.36
2~3 years 20,538,043.37
More than 3 years 273,612,139.35
3~4 years 240,857,729.75
4~5 years 29,659,408.36
More than 5 years 3,095,001.24
Total 356,917,494.66
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 Others
reversed
Provision
for bad
debts of 48,210,278.88 89,523,641.71 20,634,053.16 2,457,458.84 5,976,695.29 120,619,103.88
other
receivables
Total 48,210,278.88 89,523,641.71 20,634,053.16 2,457,458.84 5,976,695.29 120,619,103.88
The item “Others” mainly refers to the increase by business combination.
Where the amount of bad debt provision reversed or recovered is important:
Unit: yuan
Unit name Amount reversed or recovered Recovery way
None
217
4) Other receivable actually written off at the current period
Unit: yuan
Item Amount written off
Other receivables actually written off 2,457,458.84
Write-off of important other receivables:
Unit: yuan
Nature of other Amount Reasons for Write-off procedures Whether the payments arise
Unit name
receivables written off write-off performed from related transactions
Description of write-off of other receivables
None
5) Other receivables with Top 5 ending balances by debtor
Unit: yuan
Proportion in total Ending balance
Nature of
Unit name Closing Balance Aging other ending of bad debt
payment
balance receivable provision
Intercourse
First funds with the 224,655,320.00 3-4 years 62.94% 112,327,660.00
third parties
Within 1 year: RMB
Margin and
Second 5,503,130.73 2,756,798.00; 1.54% 275,156.54
deposit
1-2 years: RMB 2,746,332.73
Margin and
Third 5,000,000.00 Within 1 year 1.40% 250,000.00
deposit
Fourth Others 2,842,949.18 Within 1 year 0.80% 142,147.46
Margin and
Fifth 2,311,115.80 Within 1 year 0.65% 115,555.79
deposit
Total 240,312,515.71 67.33% 113,110,519.79
6) Accounts receivable involving government subsidies
Unit: yuan
Name of government Estimated collection time, amount and
Unit name Closing Balance Ending aging
subsidy project basis
None
7) Other receivables derecognized due to transfer of financial assets
NA
8) Amount of assets and liabilities formed by transferring other receivables and continuing involvement
NA
Other description:
218
2022 Annual Report
9. Inventory
Whether the Company need to follow the disclosure requirements of real estate industry
(1) Inventory classification
Unit: yuan
Closing Balance Beginning balance
Inventory Inventory
falling price falling price
reserves or reserves or
Item provision for provision for
Book balance Book value Book balance Book value
impairment of impairment of
contract contract
performance performance
costs costs
Raw
442,673,944.78 54,831,465.50 387,842,479.28 250,762,666.63 5,117,956.28 245,644,710.35
materials
Work in
172,727,862.49 9,184,849.77 163,543,012.72 172,991,958.16 4,599,718.11 168,392,240.05
process
Merchandise
1,188,954,668.09 258,680,380.74 930,274,287.35 1,256,964,242.78 100,692,345.17 1,156,271,897.61
inventory
Semi-
finished
products 61,520,340.90 130,228.78 61,390,112.12 16,843,633.88 16,843,633.88
shipped in
transit
Low priced
and easily 17,465,670.25 1,591,988.35 15,873,681.90 10,226,415.09 1,852.99 10,224,562.10
worn articles
Total 1,883,342,486.51 324,418,913.14 1,558,923,573.37 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 write- Closing Balance
balance Accrual Others Others
back
Raw
5,117,956.28 56,175,356.31 6,383,009.45 12,844,856.54 0.00 54,831,465.50
materials
Work in
4,599,718.11 14,094,137.36 299,165.66 9,808,171.36 0.00 9,184,849.77
process
Merchandise
100,692,345.17 284,993,058.41 9,585,323.75 136,478,084.23 112,262.36 258,680,380.74
inventory
Semi-
finished
products 3,451,151.74 3,320,922.96 0.00 130,228.78
shipped in
transit
Low priced
and easily
1,852.99 1,519,534.71 161,351.99 90,751.34 0.00 1,591,988.35
worn
articles
Total 110,411,872.55 356,782,086.79 19,880,002.59 162,542,786.43 112,262.36 324,418,913.14
Note: Amount increased in current period - The item “Others” refers to the increase by business combination.
219
(3) Description of ending balance of inventory containing the capitalized amount of borrowing costs
NA
(4) Description of current amortization amount of contract performance cost
NA
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 bad debt 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 bad debt provision:
Applicable √ Not applicable
Provision for impairment of contract assets in current period:
Unit: yuan
Reversal in current Write off/verification in
Item Accrual in current period Reasons
period current period
Other description:
11. Assets held for sales
Unit: yuan
Provision for Estimated disposal Estimated
Item Ending book balance Ending book value Fair value
impairment cost disposal time
Other description:
12. Non-current assets due within a year
Unit: yuan
Item Closing Balance Beginning balance
Important debt investments/other debt investments
Unit: yuan
Closing Balance Beginning balance
Debt item Maturity Book Maturity
Book value Coupon rate Actual rate Coupon rate Actual rate
date value date
220
2022 Annual Report
Other description:
13. Other current assets
Unit: yuan
Item Closing Balance Beginning balance
Return cost receivable 1,181,368.44 733,984.30
Interest on fixed deposit / large deposit 101,670,459.07 50,158,601.37
VAT input tax to be deducted / uncertified input
5,863,706.62 43,055,676.36
tax
Prepaid corporate income tax 4,773,735.12 17,873,716.95
Unamortized expenses 4,853,649.47 5,174,471.98
Others 716,165.75 1,763,374.60
Total 119,059,084.47 118,759,825.56
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 Book Maturity
Book value Coupon rate Actual rate Coupon rate Actual rate
date value date
Provision for impairment
Unit: yuan
Stage 1 Stage 2 Stage 3
Provision for bad debt Expected credit Expected credit losses over Expected credit losses Total
losses over the next the entire duration (without over the entire duration
12 months credit impairment) (with credit impairment)
Balance on January 1, 2022 in
current period
Changes in book balance with significant changes in the current period of provision for loss
Applicable √ Not applicable
Other description:
221
15. Other debt investments
Unit: yuan
Fair value Accumulat
Accumulated provision for
Beginning Accrued change in Closing ed fair
Item Cost loss recognized in other Remark
balance interest current Balance value
comprehensive income
period change
Important other debt investments
Unit: yuan
Closing Balance Beginning balance
Other debt item Coupon Maturity Book Maturity
Book value Actual rate Coupon rate Actual rate
rate date value date
Provision for impairment
Unit: yuan
Stage 1 Stage 2 Stage 3
Expected credit losses
Provision for bad debt Expected credit losses Total
Expected credit losses over the entire duration
over the entire duration
over the next 12 months (without credit
(with credit impairment)
impairment)
Balance on January 1, 2022 in
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
Provision for bad debt Expected credit losses Total
Expected credit losses over the entire duration
over the entire duration
over the next 12 months (without credit
(with credit impairment)
impairment)
Balance on January 1, 2022 in
current period
Changes in book balance with significant changes in the current period of provision for loss
222
2022 Annual Report
Applicable √ Not applicable
(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 investment
Unit: yuan
Increase or decrease in current period
Endin
Adjustment g
Investment of other balanc
Beginning Declared Ending
Capi gains and comprehensi Provisio e of
balance (book payment of
Invested unit Further tal losses ve income n for Othe balance (book impair
value) cash value)
investment redu recognized by impairm rs ment
dividends
ction the equity C ent provis
or profits
method hanges in ion
other equity
I. Cooperative
enterprise
II. Joint venture
Chengdu
16,949,801.24 4,692,894.92 21,642,696.16
Winner
Hubei
Xianchuang
100,000.00 4,939.83 104,939.83
Technology
Co., Ltd.
Subtotal 16,949,801.24 100,000.00 4,697,834.75 21,747,635.99
Total 16,949,801.24 100,000.00 4,697,834.75 21,747,635.99
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
Amount of other Reasons for designating to be Reasons for other
Recognized Accu Accum
Project comprehensive measured at fair value and its comprehensive
dividend mulate ulated
name income transferred changes are recorded into other income transferring
income d gains losses
into retained income comprehensive income into retained income
Other description:
19. Other non-current financial assets
Unit: yuan
Item Closing Balance Beginning balance
Equity instrument investments 40,000,000.00
Total 40,000,000.00
223
Other description:
20. Investment real estates
(1) Investment real estates using cost measurement mode
√ Applicable Not applicable
Unit: yuan
Houses and Construction in
Item Land use right Total
buildings progress
I. Original book value
1. Beginning balance
2. Amount increased in current period 10,739,083.13 10,739,083.13
(1) Outsourcing
(2) Transfer from inventory / fixed
assets / construction in progress
(3) Increase by business combination 10,739,083.13 10,739,083.13
3. Amount decreased in current period
(1) Disposal
(2) Other roll-out
4. Closing Balance 10,739,083.13 10,739,083.13
II. Accumulated depreciation and accumulated
amortization
1. Beginning balance
2. Amount increased in current period 1,992,068.88 1,992,068.88
(1) Provision or amortization 454,955.36 454,955.36
(2) Increase by business combination 1,537,113.52 1,537,113.52
3. Amount decreased in current period
(1) Disposal
(2) Other roll-out
4. Closing Balance 1,992,068.88 1,992,068.88
III. Provision for impairment
1. Beginning balance
2. Amount increased in current period
(1) Accrual
3. Amount decreased in current period
(1) Disposal
(2) Other roll-out
4. Ending balance
IV. Book value
1. Ending book value 8,747,014.25 8,747,014.25
2. Beginning book value
224
2022 Annual Report
(2) Investment real estates using fair value measurement mode
Applicable √ Not applicable
(3) Investment real estates without certificate of title
Unit: yuan
Reasons for not obtaining the
Item Book value
certificate of title
Other description: None
21. Fixed assets
Unit: yuan
Item Closing Balance Beginning balance
Fixed assets 2,312,982,598.88 1,477,320,848.63
Total 2,312,982,598.88 1,477,320,848.63
(1) Fixed assets
Unit: yuan
Electronic
Houses and Machinery Transportation equipment and
Item Total
building equipment equipment office
equipment, etc.
I. Original book value:
1. Beginning balance 995,105,302.17 1,150,719,865.14 24,268,054.46 125,370,729.10 2,295,463,950.87
2. Amount increased in
562,202,373.32 668,211,514.54 9,861,269.42 59,051,172.08 1,299,326,329.36
current period
(1) Purchase 34,791,834.52 213,260,569.46 1,454,578.81 23,742,591.32 273,249,574.11
(2) Transfer from
construction in 88,411,404.25 145,682,236.43 2,952,587.45 237,046,228.13
progress
(3) Increase by
business 438,999,134.55 309,268,708.65 8,406,690.61 32,355,993.31 789,030,527.12
combination
3. Amount decreased in
17,551,145.04 80,097,693.01 2,086,370.07 11,324,598.12 111,059,806.24
current period
(1) Disposal or
17,551,145.04 80,097,693.01 2,086,370.07 11,324,598.12 111,059,806.24
scrap
4. Closing Balance 1,539,756,530.45 1,738,833,686.67 32,042,953.81 173,097,303.06 3,483,730,473.99
II. Accumulated depreciation
1. Beginning balance 236,817,072.10 404,994,040.98 12,158,907.47 56,370,318.49 710,340,339.04
2. Amount increased in
111,929,996.31 239,090,204.44 8,474,094.52 36,984,666.08 396,478,961.35
current period
(1) Accrual 59,795,070.89 119,759,476.95 4,223,942.76 27,041,816.34 210,820,306.94
225
(continued)
Electronic
Houses and Machinery Transportation equipment and
Item Total
building equipment equipment office
equipment, etc.
(2) Increase by
business 52,134,925.42 119,330,727.49 4,250,151.76 9,942,849.74 185,658,654.41
combination
3. Amount decreased in
6,152,141.48 46,097,351.50 1,963,844.18 5,646,794.18 59,860,131.34
current period
(1) Disposal or
6,152,141.48 46,097,351.50 1,963,844.18 5,646,794.18 59,860,131.34
scrap
4. Closing Balance 342,594,926.93 597,986,893.92 18,669,157.81 87,708,190.39 1,046,959,169.05
III. Provision for impairment
1. Beginning balance 45,682,191.02 61,985,265.65 135,306.53 107,802,763.20
2. Amount increased in
114,283.74 18,058,389.60 25,258.85 1,268,634.57 19,466,566.76
current period
(1) Accrual 114,283.74 17,934,935.93 25,258.85 1,268,634.57 19,343,113.09
(2) Increase by
business 123,453.67 123,453.67
combination
3. Amount decreased in
2,519,312.78 961,311.12 3,480,623.90
current period
(1) Disposal or
2,519,312.78 961,311.12 3,480,623.90
scrap
4. Closing Balance 43,277,161.98 79,082,344.13 25,258.85 1,403,941.10 123,788,706.06
IV. Book value
1. Ending book value 1,153,884,441.54 1,061,764,448.62 13,348,537.15 83,985,171.57 2,312,982,598.88
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
Original book Accumulated Provision for
Item Book value Remark
value depreciation impairment
Not needed for
Houses and building 36,623.93 20,875.64 15,748.29
now
Not needed for
Machinery equipment 19,344,692.84 6,728,533.02 1,577,941.09 11,038,218.73
now
Electronic equipment
Not needed for
and office equipment, 744,047.66 491,113.97 215,296.39 37,637.30
now
etc.
Total 20,125,364.43 7,240,522.63 1,793,237.48 11,091,604.32
(3) Fixed assets leased out by operating lease
Unit: yuan
Item Ending book value
226
2022 Annual Report
(4) Fixed assets without certificate of title
Unit: yuan
Reasons for not obtaining the certificate of
Item Book value
title
Winner Medical (Tianmen) - Intelligent 3D
The formalities have not yet been
e-commerce warehouse for pure cotton 47,683,114.19
completed
business
Winner Medical (Tianmen) No.2 The formalities have not yet been
12,875,182.55
Workshop for finished products completed
Other description:
(5) Liquidation of fixed assets
Unit: yuan
Item Closing Balance Beginning balance
22. Construction in progress
Unit: yuan
Item Closing Balance Beginning balance
Construction in progress 765,009,910.63 216,096,622.30
Total 765,009,910.63 216,096,622.30
(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
Winner Medical
(Wuhan) 375,173,643.40 375,173,643.40 75,214,244.85 75,214,244.85
engineering project
Winner Medical
(Jiayu) engineering 165,245,291.40 165,245,291.40 4,821,946.07 4,821,946.07
project
Winner Medical
(Huanggang) 83,828,495.28 83,828,495.28 264,970.51 264,970.51
engineering project
Jingmen
infrastructure 36,276,311.67 36,276,311.67
project
Winner Medical
(Shenzhen) 12,844,241.04 12,844,241.04
engineering project
Winner Guilin
1,877,054.35 1,877,054.35
engineering project
Tianmen
infrastructure 397,954.71 397,954.71 28,206,760.19 28,206,760.19
project
Other equipment to
be installed and 100,232,398.78 10,865,480.00 89,366,918.78 109,049,108.52 1,460,407.84 107,588,700.68
sporadic projects
227
Total 775,875,390.63 10,865,480.00 765,009,910.63 217,557,030.14 1,460,407.84 216,096,622.30
(2) Current changes in major projects under construction
Unit: yuan
Includin Interes
Proporti Accum g: t
Other
Amount on of ulated interest capital
decrea
Amount carried total amount capitaliz ization Sourc
Beginning ses in Progress
Project name Budget number increased in forward to Ending balance project of ation rate in e of
balance curren of works
current period fixed assets in input to interest funds in the funds
t
current period the capitali the curren
period
budget zation current t
period period
Integrated Workshop
Project of Winner 85,000,000.00 83,828,495.28 83,828,495.28 98.62% 80.00% Others
Medical (Huanggang)
Full Servo Straight
Pack Sanitary Napkin
Production Equipment
45,000,000.00 41,378,064.05 41,378,064.05 91.95% 80.00% Others
(Line 4, Line 5) of
Winner Medical
(Huanggang)
Winner Industrial
Park (Jiayu) Project
Construction 272,380,000.00 141,859,864.32 141,859,864.32 52.08% 57.00% Others
Engineering of
Workshop 1-4
Comprehensive
Workshop
Engineering of 73,000,000.00 36,276,311.67 36,276,311.67 49.69% 70.00% Others
Winner Medical
(Jingmen)
Pile Foundation
Works for Phase II 1-
3 Sorting Center of 268,000,000.00 10,000,000.00 174,403,669.79 184,403,669.79 68.81% 80.00% Others
Winner Medical
(Wuhan)
Winner Medical
(Wuhan) Phase II 110,871,722.11 49,892,274.96 41,653,183.68 91,545,458.64 82.57% 90.00% Others
Main Project
Automated Storage
Engineering in Phase
96,000,000.00 21,238,938.05 21,238,938.05 22.12% 10.00% Others
II Plant of Winner
Medical (Wuhan)
R&D Center Project
of Winner Medical 35,666,270.00 19,632,809.17 19,632,809.17 55.05% 70.00% Others
(Wuhan)
Shift Building and
Canteen Expansion
33,213,730.00 19,928,238.00 19,928,238.00 60.00% 75.00% Others
Project of Winner
Medical (Wuhan)
High Yield Carding
Machine and Cotton
Cleaning Workshop 16,000,000.00 15,044,247.76 15,044,247.76 100.00% Others
Equipment of Winner
Medical (Wuhan)
Spunlaced Three-line
Non-woven Fabric
Carding Machine and
37,000,000.00 36,849,434.96 36,849,434.96 100.00% Others
Spun-laced Machine
of Winner Medical
(Wuhan)
Medical Industry
Building of Winner 261,723,960.00 2,741,232.41 2,741,232.41 1.05% 2.00% Others
Medical (Shenzhen)
Chengdu Wenjiang
Plant Decoration
22,446,099.00 10,103,008.63 10,103,008.63 45.01% 50.00% Others
Project of Winner
Medical (Shenzhen)
Plant Construction
Project for Medical
180,450,000.00 1,877,054.35 1,877,054.35 1.04% 2.27% Others
Glove Production
Line Expansion and
228
2022 Annual Report
Transformation of
Winner Guilin
Infrastructure Project
for Automated
Warehouse Project of 48,000,000.00 26,422,018.34 243,683.49 26,665,701.83 100.00% Others
Winner Medical
(Tianmen)
Equipment and
Installation
Engineering for
Automated 22,950,000.00 6,092,920.35 9,139,380.53 15,232,300.88 100.00%
Warehouse Project of
Winner Medical
(Tianmen)
Spunlace Phase III
Finished Product
Workshop Project of 7,600,000.00 4,880,733.94 1,045,871.56 5,926,605.50 100.00% Others
Winner Medical
(Tianmen)
Total 1,615,301,781.11 149,181,630.31 605,349,804.98 99,718,290.93 654,813,144.36
(3) Provision for impairment of construction in progress in current period
Unit: yuan
Item Current accrued amount Reason for accrual
Belt pressing and threading Decreased market demand for N95 masks, and decreased
9,899,180.00
machine for N95 masks recoverable amount of special equipment
23 tablet machine for intelligent Decreased market demand for N95 masks, and decreased
966,300.00
manufacturing project recoverable amount of special equipment
Total 10,865,480.00 --
Other description:
NA
(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:
23. Productive biological assets
(1) Productive biological assets using cost measurement mode
Applicable √ Not applicable
(2) Productive biological assets using fair value measurement mode
Applicable √ Not applicable
24. Oil and gas assets
Applicable √ Not applicable
229
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 242,292,425.07 242,292,425.07
(1) New lease 241,242,632.81 241,242,632.81
(2) Increase by business combination 1,217,168.40 1,217,168.40
(3) Exchange rate movement (167,376.14) (167,376.14)
3. Amount decreased in current period 371,924,381.21 371,924,381.21
(1) Disposal 371,924,381.21 371,924,381.21
4. Closing Balance 916,984,153.11 916,984,153.11
II. Accumulated depreciation
1. Beginning balance 514,880,665.81 514,880,665.81
2. Amount increased in current period 215,592,225.81 215,592,225.81
(1) Accrual 215,305,161.48 215,305,161.48
(2) Increase by business combination 343,342.93 343,342.93
(3) Exchange rate movement (56,278.60) (56,278.60)
3. Amount decreased in current period 285,844,864.15 285,844,864.15
(1) Disposal 285,844,864.15 285,844,864.15
4. Closing Balance 444,628,027.47 444,628,027.47
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 472,356,125.64 472,356,125.64
2. Beginning book value 531,735,443.44 531,735,443.44
Other description:
230
2022 Annual Report
26. Intangible assets
(1) Intangible assets
Unit: yuan
Nonpat
ented Trademark Software use Franchised use
Item Land use right Patent right Client relations Total
technol right right right
ogy
I. Original book
value:
1. Beginning
266,174,018.88 1,573,637.86 1,710,590.99 57,653,383.29 10,228,226.53 337,339,857.55
balance
2. Amount
increased in
300,726,294.69 268,369,916.64 65,633,484.32 45,492,432.55 180,488,908.40 860,711,036.60
current
period
(1) Purchase 142,022,281.98 22,052,741.70 164,075,023.68
(2) Internal
R&D
(3) Increase
by
business 158,704,012.71 268,369,916.64 65,633,484.32 23,439,690.85 180,488,908.40 696,636,012.92
combinati
on
3. Amount
decreased in
253,094.34 19,400,242.27 19,653,336.61
current
period
(1) Disposal 253,094.34 19,400,242.27 19,653,336.61
4. Closing
566,900,313.57 269,943,554.50 67,090,980.97 83,745,573.57 10,228,226.53 180,488,908.40 1,178,397,557.54
Balance
II. Accumulated
amortization
1. Beginning
28,039,117.18 1,247,454.39 1,674,857.66 30,449,311.14 10,228,226.53 71,638,966.90
balance
2. Amount
increased in
23,374,782.31 21,654,886.22 5,789,170.62 20,563,375.38 5,032,605.48 76,414,820.01
current
period
(1) Accrual 8,299,689.78 19,580,214.16 3,327,542.74 19,429,103.99 5,032,605.48 55,669,156.15
(2) Increase
by
business 15,075,092.53 2,074,672.06 2,461,627.88 1,134,271.39 20,745,663.86
combinati
on
3. Amount
decreased in
86,473.90 2,679,558.92 2,766,032.82
current
period
(1) Disposal 86,473.90 2,679,558.92 2,766,032.82
4. Closing
51,413,899.49 22,902,340.61 7,377,554.38 48,333,127.60 10,228,226.53 5,032,605.48 145,287,754.09
Balance
III. Provision for
impairment
1. Beginning
balance
2. Amount
increased in
current
period
(1) Accrual
3. Amount
231
decreased in
current
period
(1) Disposal
4. Closing
Balance
IV. Book value
1. Ending book
515,486,414.08 247,041,213.89 59,713,426.59 35,412,445.97 175,456,302.92 1,033,109,803.45
value
2. Beginning
238,134,901.70 326,183.47 35,733.33 27,204,072.15 265,700,890.65
book value
The proportion of intangible assets formed through internal R & D of the Company in the balance of intangible assets at the
end of current period: 0.00%
(2) Land use right without certificate of title
Unit: yuan
Item Book value Reasons for not obtaining the certificate of title
Land and real estate are regarded as a whole, a real
Winner Medical (Shenzhen) - North Side
27,533,333.33 estate certificate can only be applied after the project
of Guifang Road, Guanlan Street Planning
completion.
Land and real estate are regarded as a whole, a real
Winner Medical (Hunan) - Infusion class
110,532,032.00 estate certificate can only be applied after the project
Phase II land
completion.
Total 138,065,365.33
Other description:
27. Development expenditure
Unit: yuan
Amount increased in current
Amount decreased in current period
period
Beginning
Item Internal Closing Balance
balance Recognized as Transfer to current
development Others
intangible assets profit and loss
expenditure
Total
Other description:
28. Goodwill
(1) Original book value of goodwill
Unit: yuan
Increase in current Decrease in
invested entity name or goodwill forming Beginning period current period
Closing Balance
matter balance Increase by business
Disposal
acquisition
Business combination not under common
2,681,232.09 2,681,232.09
control - Acquisition of Malaysia Winner
232
2022 Annual Report
Business combination not under common
390,472,978.67 390,472,978.67
control - Acquisition of Zhejiang Longterm
Business combination not under common
244,814,604.75 244,814,604.75
control - Acquisition of Winner Guilin
Business combination not under common
388,989,258.26 388,989,258.26
control- Acquisition Winner Medical (Hunan)
Business combination not under common
20,397,972.33 20,397,972.33
control - Acquisition of Junjian Medical
Total 2,681,232.09 1,044,674,814.01 1,047,356,046.10
(2) Provision for impairment of goodwill
Unit: yuan
Increase in Decrease in current
invested entity name or goodwill forming Beginning current period period Closing Balance
matter balance
Accrual Disposal
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 portfolio of goodwill
Book value of Any
Book value of asset
asset group or change in
Main composition group or asset group Recognition method
asset group the current
portfolio with goodwill
portfolio period
Where there is active markets for
Long-term assets of products produced by the asset group of
680,226,310.79 Zhejiang Longterm 1,390,177,181.10 goodwill may generate independent cash No
and its subsidiaries flows, the asset group can be identified
as a separate asset group portfolio
Where there is active markets for
Operating long-term products produced by the asset group of
152,394,391.38 assets of Winner 397,208,996.13 goodwill may generate independent cash No
Guilin flows, the asset group can be identified
as a separate asset group portfolio
Where there is active markets for
Long-term assets of
products produced by the asset group of
Winner Medical
420,236,363.62 986,450,713.34 goodwill may generate independent cash No
(Hunan) and its
flows, the asset group can be identified
subsidiaries
as a separate asset group portfolio
Where there is active markets for
products produced by the asset group of
Long-term assets of
122,612,354.43 143,010,326.76 goodwill may generate independent cash No
Junjian Medical
flows, the asset group can be identified
as a separate asset group portfolio
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:
233
(1) Goodwill impairment tests
Winner Medical
Zhejiang Longterm and
Item Winner Guilin (Hunan) and its Junjian Medical
its subsidiaries
subsidiaries
Book balance of goodwill ① 390,472,978.67 244,814,604.75 388,989,258.26 20,397,972.33
Balance of provision for
impairment of goodwill ②
Book value of goodwill ③ = ①
390,472,978.67 244,814,604.75 388,989,258.26 20,397,972.33
-②
The goodwill value that has not
been recognized as a minority 319,477,891.64 177,225,091.46
equity ④
The goodwill value that was not
recognized as a minority equity
at the beginning of the period
⑤
Adjusted book value of
goodwill 709,950,870.31 244,814,604.75 566,214,349.72 20,397,972.33
⑥=③+④+⑤
Book value of asset group ⑦ 680,226,310.79 152,394,391.38 420,236,363.62 122,612,354.43
Book value of asset group
including overall goodwill ⑧= 1,390,177,181.10 397,208,996.13 986,450,713.34 143,010,326.76
⑥+⑦
[Note] The estimated future recoverable amount of Zhejiang Longterm and its subsidiaries, Winner Guilin, Winner Medical (Hunan)
and its subsidiaries, as well as Junjian Medical will be calculated based on the present value of their estimated future cash flows,
which are based on the forecast of cash flow for the next five years approved by the Company.
(2) Important assumptions and basis, key parameters
1 Important assumptions and basis
A. The accounting policies adopted by the Company during the income forecast period are substantially consistent with
those adopted in important aspects;
B. The income forecast is based on the development plan under the condition of maintaining the existing business scope
and going concern;
C. It is assumed that the enterprise involved in the above asset group continues to operate at its current management level
on the testing base date, without considering the impact of the management level of the enterprise's future owner on its
future income;
D. It is assumed that there is no significant change in the current laws, regulations, policies and macroeconomic situation
of the country, and there is no significant change in the political, economic and social environment of the region where
the enterprise involved in the tested asset group is located;
E. There will be no significant changes in interest rates, tax bases, tax rates, policy-imposed fees, etc.
234
2022 Annual Report
2 Key parameters:
Growth Growth
rate in rate in Discoun
Item Forecast period the the Profit margin t rate
forecast stable [Note 1]
period period
Zhejiang
Longterm 2023 - 2027 (followed by stable [Note Unchan Based on projected income, costs,
12.22%
and its period) 2] ged expenses, etc
subsidiaries
Winner 2023 - 2027 (followed by stable [Note Unchan Based on projected income, costs,
11.49%
Guilin period) 3] ged expenses, etc
Winner
Medical
2023 - 2027 (followed by stable [Note Unchan Based on projected income, costs,
(Hunan) and 11.91%
period) 4] ged expenses, etc
its
subsidiaries
Junjian 2023 - 2027 (followed by stable [Note Unchan Based on projected income, costs,
11.40%
Medical period) 5] ged expenses, etc
[Note 1] The discount rate refers to the weighted average capital-cost rate (before tax) based on the capital pricing model.
[Note 2] Zhejiang Longterm and its subsidiaries are mainly engaged in the research and development, production and sales of
products related to wound care, puncture care, stoma care, disinfection, minimally invasive and others. Based on a comprehensive
analysis of its signed contracts, agreements, development plans, business trends over the years, market competition and other factors,
according to specific product categories, it is predicted that the income growth rates from 2023 to 2027 will be 18.33%, 14.45%,
11.62%, 9.71% and 7.79%, respectively. The income during the stable period is consistent with the predicted income amount in 2027.
[Note 3] Winner Guilin is mainly engaged in the research and development, production and sales of products such as medical gloves,
protective gloves and condoms. Based on a comprehensive analysis of its signed contracts, agreements, development plans, business
trends over the years, market competition and other factors, according to specific product categories, it is predicted that the income
growth rates from 2023 to 2027 will be -3.24%, 8.17%, 21.94%, 1.26% and 1.71%, respectively. The income during the stable
period is consistent with the predicted income amount in 2027.
[Note 4] Winner Medical (Hunan) and its subsidiaries are mainly engaged in the research and development, production and sales of
disposable sterile infusion medical devices. Based on a comprehensive analysis of its signed contracts, agreements, development
plans, business trends over the years, market competition and other factors, according to specific product categories, it is predicted
that the income growth rates from 2023 to 2027 will be 13.18%, 21.77%, 42.87%, 15.60% and 8.88%, respectively. The income
during the stable period is consistent with the predicted income amount in 2027.
[Note 5] Junjian Medical is mainly engaged in the sales of medical equipment. Based on a comprehensive analysis of its signed
contracts, agreements, development plans, business trends over the years, market competition and other factors, according to specific
product categories, it is predicted that the income growth rates from 2023 to 2027 will be -54.10%, -1.15%, -0.73%, -0.23% and
0.18%, respectively. The income during the stable period is consistent with the predicted income amount in 2027.
According to the test, there is no impairment in the goodwill formed by the acquisition of Zhejiang Longterm and its
subsidiaries, Winner Guilin, Winner Medical (Hunan) and its subsidiaries, and Junjian Medical during the current period.
Impact of goodwill impairment tests
There is no commitment to the business combination resulting in goodwill in the current period.
Other description:
235
29. Long-term unamortized expenses
Unit: yuan
Amount Amortization
Beginning
Item increased in amount in Other decreases Closing Balance
balance
current period current period
Decoration cost 43,725,887.73 10,993,255.06 12,360,654.97 3,584,118.63 38,774,369.19
Decoration expenses for
131,059,883.10 45,822,936.06 61,052,678.90 21,912,223.42 93,917,916.84
operating leased fixed assets
Total 174,785,770.83 56,816,191.12 73,413,333.87 25,496,342.05 132,692,286.03
Other description:
30. Deferred income tax assets / deferred income tax liabilities
(1) Unoffset deferred income tax assets
Unit: yuan
Closing Balance Beginning balance
Item Deductible Deductible
Deferred income Deferred income
temporary temporary
tax assets tax assets
differences differences
Provision for impairment of assets 635,561,435.85 113,878,209.59 308,989,374.25 55,407,470.14
Unrealized profit of internal
176,701,413.90 33,954,186.63 114,388,686.49 23,660,535.47
transaction
Deductible loss 121,028,998.43 29,902,881.36 60,670,842.73 15,167,710.69
Dismission welfare 2,858,415.48 483,093.52 2,315,103.48 347,265.52
Deferred income 98,791,412.91 14,929,042.38 109,625,401.82 17,710,015.89
Member points 9,067,179.42 2,266,794.86 10,319,207.78 2,579,801.95
Estimated liabilities 2,781,740.46 624,681.92 1,881,955.47 410,114.78
Advertising expenses in excess of the
1,176,743.33 176,511.50 39,046,992.53 5,857,048.88
tax deductible limit
Equity incentive fee 10,509,464.48 1,576,419.67
Changes in fair value of trading
5,189,000.26 778,350.04
financial assets
Total 1,053,156,340.04 196,993,751.80 657,747,029.03 122,716,382.99
236
2022 Annual Report
(2) Unoffset deferred income tax liabilities
Unit: yuan
Closing Balance Beginning balance
Item Taxable temporary Deferred income Taxable temporary Deferred income
differences tax liabilities differences tax liabilities
Asset evaluation increment for
business combination not under 665,595,964.73 109,308,421.87
common control
Changes in fair value of trading
1,983,960.49 304,114.59 27,097,991.08 4,242,794.56
financial assets
Depreciation of fixed assets 149,207,192.40 22,381,078.85 52,132,715.97 9,094,365.12
Others 11,223,250.00 1,683,487.50
Total 828,010,367.62 133,677,102.81 79,230,707.05 13,337,159.68
(3) Deferred income tax assets or liabilities presented as net amount after offset
Unit: yuan
Beginning balance
Ending offset Ending balance of Beginning offset
of deferred income
amount of deferred deferred income tax amount of deferred
Item tax assets and
income tax assets assets and liabilities income tax assets
liabilities after
and liabilities after offset and liabilities
offset
Deferred income tax assets 196,993,751.80 122,716,382.99
Deferred income tax liabilities 133,677,102.81 13,337,159.68
(4) Details of unrecognized deferred income tax assets
Unit: yuan
Item Closing Balance Beginning balance
Deductible loss 251,019,604.38 206,266,023.76
Provision for impairment of assets and
7,053,355.76 5,372,991.42
amortization of depreciation
Dismission welfare 996,517.00
Total 259,069,477.14 211,639,015.18
237
(5) Deductible losses on unrecognized deferred income tax assets will expire in the following year
Unit: yuan
Year Closing balance Beginning amount Remark
2022 14,402,997.46
2023 25,574,944.59 25,574,944.59
2024 48,794,287.92 48,810,687.88
2025 46,546,726.71 44,934,541.40
2026 74,343,804.38 65,783,169.18
2027 55,364,880.58
No maturity date 394,960.20 6,759,683.25
Total 251,019,604.38 206,266,023.76
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
payment / equipment
purchase payment /
83,524,640.64 83,524,640.64 115,571,001.80 115,571,001.80
advance store
engineering and
decoration payment
Total 83,524,640.64 83,524,640.64 115,571,001.80 115,571,001.80
Other description:
238
2022 Annual Report
32. Short-term loans
(1) Classification of short-term loans
Unit: yuan
Item Closing Balance Beginning balance
Guaranteed borrowing 5,000,000.00
Debt of honor 100,000,000.00
Bill financing 1,130,050,000.00
Trade financing (Letter of Credit, etc.) 1,000,000,000.00
Mortgage + Guaranteed borrowing 60,000,000.00
Borrowing interest 168,930.85
Total 2,295,218,930.85
Description on the classification of short-term borrowing:
Bill discount:
1. Winner Medical (Shenzhen) signed Bank Acceptance Agreements with Industrial and Commercial Bank of China
Shenzhen Longhua Branch during the period from March to May 2022: 0400000014-2022 (Acceptance Agreement) No.
00046, 0400000014-2022 (Acceptance Agreement) No. 00047, 0400000014-2022 (Acceptance Agreement) No. 00048,
0400000014-2022 (Acceptance Agreement) No. 00019, 0400000014-2022 (Acceptance Agreement) No. 00110,
0400000014-2022 (Acceptance Agreement) No. 00107, Bank Acceptance Agreements: 0400000014-2022 (Acceptance
Agreement) No. 00200, 0400000014-2022 (Acceptance Agreement) No. 00202, 0400000014-2022 (Acceptance
Agreement) No. 00757, 0400000014-2022 (Acceptance Agreement) No. 00758, 400000014-2022 (Acceptance
Agreement) No. 00756, Bank Acceptance Agreement: 0400000014-2022 (Acceptance Agreement) No. 00180,
0400000014-2022 (Acceptance Agreement) No. 00181, 0400000014-2022 (Acceptance Agreement) No. 00182, with a
total amount of RMB 480,000,000.00 and a rate of 1.20%-2.10%. As of December 31, 2022, all bills not matured have
been fully discounted.
2. Winner Medical (Shenzhen) signed Bank Acceptance Agreements with Agricultural Bank of China Shenzhen Jinxiu
Jiangnan Branch during the period from October to November 2022: 81180120220000657, 81180120220000603,
81180120220000597, with a total amount of RMB 300,000,000.00 and a rate of 1.35-1.55%. As of December 31, 2022,
all bills not matured have been fully discounted.
3. Winner Medical (Shenzhen) signed Bank Acceptance Agreements with Bank of China Limited Shenzhen Longhua
Branch during the period from May to Decemeber 2022: 02022 Z.Z.Y.H.C.S.Zi No.0024-1, 2022 Z.Z.Y.H.C.S.Zi
No.0024-2, 2022 Z.Z.Y.H.C.S.Zi No.0024-3, with a total amount of RMB 300,000,000.00 and a rate of 1.05-1.69%. As
of December 31, 2022, the matured bills of RMB 100,000,000.00 (RMB 100 million) have been repaid, while the
remaining RMB 200,000,000.00 not yet matured has been fully discounted.
4. Shenzhen Purcotton signed a Bank Acceptance Agreements with Industrial and Commercial Bank of China Shenzhen
Longhua Branch in March to May and December of 2022: 0400000014-2022 (Acceptance Agreement) No. 00203,
0400000014-2022 (Acceptance Agreement) No. 00199, 0400000014-2022 (Acceptance Agreement) No. 00760,
0400000014-2022 (Acceptance Agreement) No. 00761, 0400000014-2022 (Acceptance Agreement) No. 00759, with a
total amount of RMB 150,000,000.00 and a rate of 1.20%-1.35%. As of December 31, 2022, all bills not matured have
been fully discounted.
5. On December 27, 2022, Longterm Medical signed an export factoring financing contract with the Bank of China
Limited Deqing Branch. The contract was numbered DQ 2022 WT 034, with a value of RMB 50,000.00, the expiration
date on May 25, 2023 and an interest rate of 3.55%. As of December 31, 2022, the amount has not been returned.
239
Trade financing (Letter of Credit, etc.):
1. On February 28, 2022, Winner Medical (Shenzhen) opened a letter of credit with the number of 744101KL22000008 at
China CITIC Bank Shenzhen Branch, with an amount of RMB 100,000,000.00 and an interest rate of 2.65%. The credit
agreement was numbered 2022 S.Y.L.H.Z.Zi No. 0001, with a limit of RMB 300,000,000.00. The beneficiary was
Winner Medical (Chongyang), without relevant mortgage guarantee. As of December 31, 2022, this letter of credit not
matured has been discounted.
2. On March 24, 2022, Winner Medical (Shenzhen) opened a letter of credit with the number of 744101KL22000021 at
China CITIC Bank Shenzhen Branch, with an amount of RMB 100,000,000.00 and an interest rate of 2.50%. The credit
agreement was numbered 2022 S.Y.L.H.Z.Zi No.0001, with a limit of RMB 300,000,000.00. The beneficiary was
Winner Medical (Chongyang), without relevant mortgage guarantee. As of December 31, 2022, this letter of credit not
yet matured has been discounted.
3. On June 28, 2022, Winner Medical (Shenzhen) opened a letter of credit with the number of EL7552200358 at China
Merchants Bank Shenzhen Branch, with an amount of RMB 200,000,000.00 and an interest rate of 1.68%. The credit
agreement was numbered 755XY2022014777, with a limit of RMB 700,000,000.00. The beneficiary was Winner
Medical (Chongyang), without relevant mortgage guarantee. As of December 31, 2022, this letter of credit not matured
has been discounted.
4. On July 26, 2022, Winner Medical (Shenzhen) opened a letter of credit with the number of 744101KL22000051 at
China CITIC Bank Shenzhen Branch, with an amount of RMB 100000000.00 and an interest rate of 1.61%. The credit
agreement number is 2022 S.Y.L.H.Z.Zi No. 0001, with a limit of RMB 300,000,000.00. The beneficiary was Winner
Medical (Chongyang), without relevant mortgage guarantee. As of December 31, 2022, this letter of credit not matured
has been discounted.
5. On July 21, 2022, Winner Medical (Shenzhen) opened a letter of credit with the number of EL7552200402 at China
Merchants Bank Shenzhen Branch, with an amount of RMB 100,000,000.00 and an interest rate of 1.67%. The credit
agreement was numbered 755XY2022014777, with a limit of RMB 700,000,000.00. The beneficiary was Winner
Medical (Chongyang), without relevant mortgage guarantee. As of December 31, 2022, this letter of credit not matured
has been discounted.
6. On July 28, 2022, Winner Medical (Shenzhen) opened a letter of credit with the number of EL7552200434 at China
Merchants Bank Shenzhen Branch, with an amount of RMB 200,000,000.00 and an interest rate of 1.25%. The credit
agreement was numbered 755XY2022014777, with a limit of RMB 700,000,000. The beneficiary was Winner Medical
(Huanggang), without relevant mortgage guarantee. As of December 31, 2022, this letter of credit not matured has been
discounted.
7. On September 15, 2022, Purcotton Technology Co., Ltd. opened a letter of credit with the number of LC7552200014 at
China Merchants Bank Shenzhen Branch, with an amount of RMB 90,000,000.00 and an interest rate of 1.33%. The
credit agreement was numbered 755XY2022015269, with a limit of RMB 300000000.00 (RMB 300 million). The
beneficiary was Winner Medical (Huanggang), without relevant mortgage guarantee. As of December 31, 2022, this
letter of credit not matured has been discounted.
8. On September 16, 2022, Winner Medical (Shenzhen) opened a letter of credit with the number of LC7552200019 at
China Merchants Bank Shenzhen Branch, with an amount of RMB 110,000,000.00 and an interest rate of 1.29%. The
credit agreement was numbered 755XY2022014777, with a limit of RMB 700,000,000.00. The beneficiary was Winner
Medical (Huanggang), without relevant mortgage guarantee. As of December 31, 2022, this letter of credit not matured
has been discounted.
Credit loan:
1. On May 12, 2022, Winner Medical (Shenzhen) signed a Working Capital Loan Contract with Bank of China Limited
Shenzhen Longhua Branch (the Contract was numbered 2022 Z.Z.Y.H.J.Zi No.0024-1). The Contract was a single
agreement under the Credit Line Agreement numbered 2020 Z.Z.Y.H.E.X.Zi No.0024 signed by and between Winner
Medical Co., Ltd. and Bank of China Limited Shenzhen Longhua Branch. The loan amount was RMB 100,000,000.00,
and the interest rate was 2.85%. The loan period is from May 16, 2022 to May 16, 2023, and there is no relevant
mortgage guarantee. As of December 31, 2022, the loan has not been repaid.
Mortgage + Guaranteed borrowing:
240
2022 Annual Report
1. On January 19, 2022, Longterm Medical signed a Working Capital Loan Contract with the Deqing Branch of Hangzhou
Bank Co., Ltd. The contract was numbered 137C110202100002, with a loan amount of RMB 5,000,000.00, the
expiration date on January 18, 2023 and an interest rate of 4.2%. Wu Kangping/Huang Lepei provided guarantees for
two loans and signed a guarantee contract numbered 137C11020210000102/103/104. As of December 31, 2022, the
loan has not been repaid.
2. In 2022, Longterm Medical signed three working capital loan contracts with Bank of China Limited Deqing Branch: 1)
the contract signed on February 24, 2022, with the number of DQ 2022 R.J. 030, a loan amount of RMB 30,000,000.00,
maturity date on February 23, 2023, and an interest rate of 3.9%. As of December 31, 2022, there are still RMB
5,000,000.00 remains unrepaid; 2) the contract signed on June 16, 2022, with the number of DQ 2022 R.J. 096, a loan
amount of RMB 20,000,000.00, maturity date on June 15, 2023, and an interest rate of 3.9%. As of December 31, 2022,
it has not been repaid; 3) the contract signed on December 26, 2022, with the number of DQ 2022 R.J. 221, a loan
amount of RMB 25,000,000.00, maturity date on August 22, 2023, and an interest rate of 3.9%. As of December 31,
2022, it has not been repaid. Wu Kangping and his wife Huang Lepei provided guarantees for the above three loans and
signed a guarantee contract numbered DQ 2022 R.B. 016; Longterm Medical mortgaged the property with a value of
RMB 18,594,000.00 and signed a mortgage contract numbered DQ 2021 R.D. 010; Longterm Medical mortgaged the
industrial land and plant with a value of RMB 167,620,000.00 and signed a mortgage contract numbered DQ 2021 R.D.
002. Longterm Medical mortgaged the industrial land and plany with a value of RMB 164,670,000.00 and signed a
mortgage contract numbered DQ 2022 R.D. 074.
Guaranteed borrowing:
1. On April 8, 2022, Zhejiang Longterm signed a working capital loan contract with Huzhou Deqing Branch of Industrial
Bank Co., Ltd. The contract number was X.Y.H.D.Q.L.D. No.W20220328-1, with a loan amount of RMB 5,000,000.00,
the maturity date on April 7, 2023, and an interest rate of 3.08%. Another contract number was X.Y.H.D.Q.L.D. No.
W20220328-2, with a loan amount of RMB 5,000,000.00, maturity date on April 7, 2023, and an interest rate of 3.80%.
Wu Kangping/Huang Lepei and Longterm Medical provided guarantees for the loan and signed a guarantee contract
numbered X.Y.H.D.Q.B. No.W20210412. Longterm Medical mortgaged industrial real estate and signed a mortgage
contract numbered X.Y.H.D.Q.D. No. 20210625, with a mortgage amount of RMB 11,825,991.00. As of December 31,
2022, the above two loans have not been repaid.
(2) short-term loans unpaid overdue
The total amount of overdue short-term loans at the end of the period is RMB XXXX, of which the important overdue short-
term borrowings are as follows:
Unit: yuan
Overdue interest
Borrower Closing Balance Borrowing interest rate Overdue time
rate
Other description: N/A
33. Trading financial liabilities
Unit: yuan
Item Closing Balance Beginning balance
Including:
Including:
Other description: N/A
34. Derivative financial liabilities
Unit: yuan
Item Closing Balance Beginning balance
241
Other description: N/A
35. Notes payable
Unit: yuan
Type Closing Balance Beginning balance
Bank acceptance bill 24,760,000.00 36,200,130.04
Total 24,760,000.00 36,200,130.04
The total amount of notes payable due and unpaid at the end of current period is RMB 0.00.
36. Accounts payable
(1) Presentation of accounts payable
Unit: yuan
Item Closing Balance Beginning balance
Within 1 year (including 1 year) 1,094,753,592.92 714,681,791.55
1 to 2 years (including 2 years) 19,338,059.30 16,519,858.09
2 to 3 years (including 3 years) 2,914,279.27 2,213,757.41
More than 3 years 2,568,587.09 1,106,083.55
Total 1,119,574,518.58 734,521,490.60
(2) Important accounts payable with the aging more than 1 year
Unit: yuan
Reasons for failure of
Item Closing Balance
payment or carryover
Other description: N/A.
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
Item Closing Balance
payment or carryover
242
2022 Annual Report
38. Contract liabilities
Unit: yuan
Item Closing Balance Beginning balance
Customer consideration received 557,752,074.66 330,856,457.64
Member points 9,067,179.42 10,319,207.78
Total 566,819,254.08 341,175,665.42
Amount and reasons for significant changes in book value during the reporting period
Unit: yuan
Item Amount of change Reason for change
39. Payroll payable
(1) Presentation of payroll payable
Unit: yuan
Increase in current Decrease in current
Item Beginning balance Closing Balance
period period
I. Short-term compensation 174,579,726.18 1,786,566,427.11 1,660,006,341.53 301,139,811.76
II. Welfare after dismission -
7,786,354.86 116,237,654.55 116,568,512.27 7,455,497.14
defined contribution plan
III. Dismission welfare 2,315,103.48 12,440,659.44 10,900,830.44 3,854,932.48
IV. Other welfare due within 1
36,880.12 36,880.12
year
Total 184,681,184.52 1,915,281,621.22 1,787,512,564.36 312,450,241.38
(2) Presentation of short-term compensation
Unit: yuan
Increase in current Decrease in current
Item Beginning balance Closing Balance
period period
1. Salary, bonus, allowance and
171,917,627.57 1,650,452,245.55 1,524,704,914.13 297,664,958.99
subsidy
2. Welfare expenses for
1,898,566.41 42,631,886.13 41,741,236.48 2,789,216.06
employees
3. Social security 583,615.98 55,140,209.98 55,314,428.77 409,397.19
Including: medical insurance
391,727.18 49,177,465.94 49,336,817.71 232,375.41
premium
Industrial injury insurance
127,114.57 3,341,754.91 3,344,431.49 124,437.99
premium
Birth insurance premium 64,774.23 2,620,989.13 2,633,179.57 52,583.79
4. Housing accumulation fund 5,184.00 35,996,506.01 35,997,747.01 3,943.00
5. Union dues and staff
174,732.22 1,689,525.94 1,591,961.64 272,296.52
education fund
6. Short-term compensated
9,307.30 9,307.30
absences
7. Short-term profit sharing plan 646,746.20 646,746.20
Total 174,579,726.18 1,786,566,427.11 1,660,006,341.53 301,139,811.76
243
(3) Presentation of defined contribution plans
Unit: yuan
Increase in current Decrease in current
Item Beginning balance Closing Balance
period period
1. Basic endowment
7,669,900.83 112,500,090.67 112,819,427.16 7,350,564.34
insurance
2. Unemployment
116,454.03 3,737,563.88 3,749,085.11 104,932.80
insurance premium
Total 7,786,354.86 116,237,654.55 116,568,512.27 7,455,497.14
Other description:
40. Taxes payable
Unit: yuan
Item Closing Balance Beginning balance
Added value tax 96,897,978.48 4,177,794.77
Corporate income tax 197,571,709.68 80,626,257.39
Individual income tax 4,579,372.68 2,915,638.55
Urban maintenance and construction tax 8,167,572.37 484,733.91
Housing property tax 5,597,557.89 2,544,714.33
Education surcharge and local education surcharge 6,150,636.51 365,615.00
Land use tax 1,153,638.19 1,462,224.90
Environmental protection tax 35,809.57 22,044.78
Stamp duty 2,101,599.24 1,260,046.05
Total 322,255,874.61 93,859,069.68
Other description:
41. Other payables
Unit: yuan
Item Closing Balance Beginning balance
Other payables 570,843,242.88 443,946,028.46
Total 570,843,242.88 443,946,028.46
244
2022 Annual Report
(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
Borrower 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 with related parties outside the scope of
83,907,582.49
consolidation
Intercourse funds with the third parties 19,647,462.33 20,895,856.79
Margin and deposit 170,299,618.40 162,215,690.65
Commission 58,911,887.83 76,615,789.42
Freight and other accrued expenses 222,336,599.71 176,844,834.39
Others 15,740,092.12 7,373,857.21
Total 570,843,242.88 443,946,028.46
2) Important other payable with the aging more than 1 year
Unit: yuan
Reasons for failure of payment
Item Closing Balance
or carryover
Other description: N/A.
245
42. Liabilities held for sales
Unit: yuan
Item Closing Balance Beginning balance
Other description: N/A
43. Non-current liabilities due within one year
Unit: yuan
Item Closing Balance Beginning balance
Long-term borrowing due within one year 8,011,977.78
Long-term payables due within one year 620,000.00
Lease liabilities due within one year 207,314,911.54 216,181,531.82
Total 215,946,889.32 216,181,531.82
Other description:
Long-term borrowing due within one year:
1. Longterm Health signed a long-term loan contract numbered 8811120180040452 with Zhejiang Deqing Rural
Commercial Bank Co., Ltd. on December 31, 2018 with a loan amount of RMB 28,000,000.00, a maturity date on
December 20, 2023, and the borrowing rate of 4.00%. The mortgaged amount is RMB 53,712,324.86, and the mortgage
contract numbered 8811320210000908 is signed with the real estate certificate [No. Zhejiang (2021) Deqing County
Real Estate No. 0001524] of its Buildings No.1-6. As of December 31, 2022, the principal of the loan of RMB
8,000,000.00 remained unrepaid.
44. Other current liabilities
Unit: yuan
Item Closing Balance Beginning balance
Refund payable 3,963,108.90 2,012,198.90
Output tax to be transferred 55,641,482.95 22,153,201.60
Total 59,604,591.85 24,165,400.50
Increase/decrease of short-term bonds payable:
Unit: yuan
Amorti
zation
Accrued
of Current
Name of Book Maturity Issue Beginning Current interest at Closing
Issue date premiu repaymen
bond value of bond amount balance issue book Balance
m and t
value
discoun
t
Total
Other description:
246
2022 Annual Report
45. Long-term loans
(1) Classification of long-term borrowing
Unit: yuan
Item Closing Balance Beginning balance
Description on the classification of long-term borrowing:
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
Amorti
zation
Accrued
of Current
Name of Book Maturity Issue Beginning Current interest at Closing
Issue date premiu repaymen
bond value of bond amount balance issue book Balance
m and t
value
discoun
t
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 Decrease in current
Increase in current period The end of the period
financial period period
instruments Quantity Book value Quantity Book value Quantity Book value Quantity Book value
Description of the basis for the classification of other financial instruments into financial liabilities
Other description:
247
47. Lease liabilities
Unit: yuan
Item Closing Balance Beginning balance
Lease payments 365,030,013.20 431,547,562.69
Unrecognized financing expenses -38,570,315.30 -49,738,637.60
Total 326,459,697.90 381,808,925.09
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
I. Welfare after dismission - net liabilities of defined
9,199,637.94
benefit plan
Long-term payroll payable due within one year -620,000.00
Total 8,579,637.94
248
2022 Annual Report
(2) Changes in defined benefit plan
Present value of defined benefit plan obligations:
Unit: yuan
Amount incurred in current Amount incurred in previous
Item
period period
Planned assets:
Unit: yuan
Amount incurred in current Amount incurred in previous
Item
period period
Net liabilities (net assets) of defined benefit plan
Unit: yuan
Amount incurred in current Amount incurred in previous
Item
period 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:
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
Beginning Increase in Decrease in current
Item Closing Balance Causes
balance current period period
Government
Government subsidies 109,625,401.82 6,439,144.46 17,273,133.37 98,791,412.91 subsidies related
to assets
Total 109,625,401.82 6,439,144.46 17,273,133.37 98,791,412.91
Projects involving government subsidies:
Unit: yuan
Amount Amount Amount
Amount
of included in included in
offsetting Other
additiona current other Asset/inco
Beginning the cost in chan Closing
Liability item l subsidy non- income in me related
balance the current ges Balance
in current operating current
period
period income period
Special subsidy for provincial high-tech
Asset
industry development projects in 2012 - Winner 218,752.67 218,752.67 0.00
related
Medical (Huanggang)
Subsidy for science and technology support
249
plan projects of Hubei in 2014 (the second 562,500.00 150,000.00 412,500.00 Asset
batch) - Winner Medical (Huanggang) related
Subsidy for company planning change due to
Asset
Huanggang Chibi Avenue demolition - Winner 2,377,019.38 105,645.31 2,271,374.07
related
Medical (Huanggang)
Subsidy for R & D projects in Technology Asset
755,328.89 210,556.48 544,772.41
Center - the Company related
Reduction and exemption of the transfer fees of
land use rights in the new medical bandage Asset
609,650.00 20,320.00
factory of Winner company in Pailou Town, 589,330.00 related
Jingmen - Winner Medical (Jingmen)
Subsidy funds for infrastructure construction of
Asset
municipal government projects - Winner 8,856,862.50 413,550.00 8,443,312.50
related
Medical (Chongyang)
Subsidy funds for land and subsidy funds for Asset
9,802,666.67 406,833.24 9,395,833.43
sewage treatment - Winner Medical (Jiayu) related
Subsidy funds for extension project of cotton
spun laced non-woven fabric (Line 8) in the Asset
225,000.00 60,000.00 165,000.00
Huanggang provincial budget investment plan in related
2015 - Winner Medical (Huanggang)
Special subsidy funds for industrial
Asset
development in Huanggang City in 2014 - 93,750.00 25,000.00 68,750.00
related
Winner Medical (Huanggang)
Subsidy funds for key technical transformation
Asset
and expansion project of industrial enterprise in 212,477.00 212,477.00 0.00
related
Tianmen in 2015 - Winner Medical (Tianmen)
Special subsidy funds urban industrial
development in 2015 (construction of 2# Asset
170,000.00 40,000.00
sanitary products production line) - Winner 130,000.00 related
Medical (Huanggang)
Automatic transformation of surgical Asset
1,023,000.00 186,000.00 837,000.00
consumables production line - the Company related
Rewards for key industrial technological
Asset
transformation and expansion projects of 262,481.00 50,004.00 212,477.00
related
Tianmen in 2016 - Winner Medical (Tianmen)
Subsidy for increasing production and
Asset
expanding production in Tianmen in 2017 - 85,000.00 15,000.00 70,000.00
related
Winner Medical (Tianmen)
Subsidy for gas boilers in Yichang - Winner Asset
84,000.13 15,999.96 68,000.17
Medical (Yichang) related
Subsidy for second batch of traditional industry
Asset
transformation in 2017 - Winner Medical 1,098,165.26 209,174.28 888,990.98
related
(Huanggang)
Cotton spun laced non-woven fabric project
Asset
with the production of 15,000 tons in 2017 - 396,226.55 79,245.24 316,981.31
related
Winner Medical (Tianmen)
Key technical transformation and expansion
Asset
projects (cotton spun laced wipes production 108,108.00
594,595.00 486,487.00 related
line project) - Winner Medical (Tianmen)
Production line project with an annual output of
Asset
120 million bales of cotton wipes in 2017 - 599,134.56 107,307.72 491,826.84
related
Winner Medical (Tianmen)
Special funds for second batch of the
Asset
transformation and upgrading of traditional 156,250.12 24,999.96 131,250.16
related
industries - Winner Medical (Yichang)
Technical innovation subsidy for Phase II
Asset
Expansion Project of Purcotton - Winner 4,325,520.65 166,366.20 4,159,154.45
related
Medical (Jingmen)
Key technical transformation and expansion
Asset
projects (cotton spun laced wipes production
741,666.75 99,999.96 641,666.79 related
project) - Winner Medical (Tianmen)
20180311 Subsidies for research, science and
innovation on the technology of thermo- Asset
responsive self-curing wound regeneration and 792,714.37 239,811.33 552,903.04 related
repair materials - the Company
Special funds for provincial traditional industry
Asset
transformation and upgrading - the second batch
1,339,047.62 52,857.12 1,286,190.50 related
of liquidation block fund subsidies in 2018 -
250
2022 Annual Report
Winner Medical (Jiayu)
Subsidies for first batch of technological
Asset
transformation award of industrial enterprises in 690,375.08 106,157.11 584,217.97
related
2018 - Winner Medical (Chongyang)
Special funds for provincial traditional industry
transformation and upgrading - the first batch of Asset
block funds allocation plan in Tianmen in 2019 - 1,024,137.94 136,551.72 887,586.22 related
Winner Medical (Tianmen)
First batch of traditional subsidies in 2019 -
968,000.00 121,000.00 847,000.00 Asset related
Winner Medical (Huanggang)
Technical improvement subsidy for districts in
349,349.24 29,112.36 320,236.88 Asset related
2019 - Winner Medical (Jingmen)
Technical transformation project of key
material production enterprises for Shenzhen
17,500,000.00 2,000,000.00 15,500,000.00 Asset related
public health event prevention and control in
2020 - the Company
Special subsidy of Municipal Bureau of
Economy and Information Technology for the
issuance of technical transformation on 438,269.22 438,269.22 0.00 Asset related
emergency material support system
construction - Winner Medical (Huanggang)
Special funds from the central government's
budget for municipal financial mask business 56,470.58 56,470.58 0.00 Asset related
expansion - Winner Medical (Huanggang)
Subsidy for production of materials for public
health events in 2020 - Winner Medical 3,420,000.00 3,420,000.00 0.00 Asset related
(Huanggang)
Technical improvement subsidy for districts in
357,818.15 29,818.20 327,999.95 Asset related
2019 - Winner Medical (Jingmen)
Special funds for the transformation and
upgrading of traditional industries in 2019 - 696,428.60 26,785.68 669,642.92 Asset related
Winner Medical (Jiayu)
Subsidy for surgical gown production line
3,279,279.27 432,432.44 2,846,846.83 Asset related
project - Winner Medical (Chongyang)
Subsidy for purchase of epidemic prevention
equipment in key enterprises of “Three 4,979,327.73 563,697.48 4,415,630.25 Asset related
Batches” - Winner Medical (Chongyang)
Special funds for the project on implementing
the technical reformation policy of “Zero
Land” in Wuhan and the municipal industrial
investment and technical transformation of the 7,126,566.91 582,288.70 6,544,278.21 Asset related
Bureau for Science, Technology and
Economic Information Technology of
Xinzhou District - Winner Medical (Wuhan)
Subsidy for capacity expansion & technical
upgrading of enterprises producing materials
2,779,116.66 591,720.31 2,187,396.35 Asset related
for public health events - Winner Medical
(Wuhan)
Provincial subsidy for purchasing equipment
in key enterprise of “Three Batches” - Winner 2,522,692.27 2,522,692.27 0.00 Asset related
Medical (Huanggang)
Special funds for the high-quality
development of manufacturing in 2020 - 2,691,588.78 336,448.60 2,355,140.18 Asset related
Winner Medical (Huanggang)
Technical transformation funds for urban
1,040,625.00 470,000.00 151,666.65 1,358,958.35 Asset related
areas in 2021 - Winner Medical (Huanggang)
Equipment subsidies for public health events
5,525,000.00 1,700,000.00 3,825,000.00 Asset related
in 2021 - Winner Medical (Jingmen)
2020 Provincial special funds for the high-
quality development of manufacturing - 903,508.78 105,263.16 798,245.62 Asset related
Winner Medical (Jiayu)
Annual equipment investment subsidies
(Spunlace Phase III, warehouse establishment) 15,000,000.00 375,000.00 14,625,000.00 Asset related
- Winner Medical (Tianmen)
1 million provincial special funds for the
development of manufacturing - Winner 895,694.83 125,460.48 770,234.35 Asset related
Medical (Wuhan)
Received subsidies from the development of 1,558,860.54 400,000.00 34,910.04 1,923,950.50 Asset related
251
the emergency material security system of
central government for production capacity
improvement - Winner Medical (Wuhan)
Technical transformation funds for urban
areas in 2022 - Winner Medical (Huanggang) 4,094,200.00 4,094,200.00 Asset related
(1*)
Award for technical upgrading project -
600,000.00 65,454.55 534,545.45 Asset related
Winner Medical (Chongyang)
Industrial support funds for multi-layer baby
facial towel production projects in 2022 - 276,482.00 5,900.51 270,581.49 Asset related
Winner Medical (Yichang)
Special fund for high quality development of
manufacturing in Zhijiang in 2021 - Winner 596,100.00 14,902.50 581,197.50 Asset related
Medical (Yichang)
Others 79,371.94 2,362.46 27,566.82 54,167.58 Asset related
Total 109,625,401.82 6,439,144.46 17,273,133.37 98,791,412.91
Other description:
1*According to the Notice on Organizing the Application of Special Funds for the Transformation and Upgrading of
Traditional Industries in 2021 (H.J.XB. [2021] No. 12), and the implemented Notice of the Municipal Government Office on
Issuing the Three Year (2021-2023) Action Plan to Support the New Round of Enterprise Technological Transformation, On
December 19, 2022 and November 4, 2022, Winner Medical (Huanggang) received RMB 2,594,200.00 and RMB
1,500,000.00 from Huanggang Economic and Information Technology Bureau and Management Committee of Huanggang
High-tech Industrial Development Zone for urban technology transformation funds in 2022. The subsidy funds for this
project mainly refer to the subsidies provided for sanitary napkins on Line 4 and Line 5. The total amount of the production
line under construction is RMB 4,094,200.00, which has not been transferred to fixed assets.
52. Other non-current liabilities
Unit: yuan
Item Closing Balance Beginning balance
Other description:
53. Capital stock
Unit: yuan
Increase/decrease (+, -)
Share capital Closing
Beginning balance New issue of Share
increase from Others Subtotal Balance
shares donation
reserved funds
Total amount
426,492,308.00 426,492,308.00
of shares
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
252
2022 Annual Report
Outstanding The beginning of the
Increase in current period Decrease in current period The end of the period
financial period
instruments Quantity Book value Quantity Book value Quantity Book value Quantity Book value
The increase and decrease of other equity instruments in 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 3,373,485.57 88,485,055.94
Total 4,549,621,096.81 3,373,485.57 4,546,247,611.24
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
Less:
amount Less: amount
included in included in
other other
comprehens comprehensive Less:
Amount Attributable Attributable
ive income income in Incom
Beginning before to the parent to minority Closing
Item in previous previous e tax
balance current company shareholders Balance
period period expens
income tax after tax after tax
transferred transferred into es
into profit retained
and loss in income in
current current period
period
I. Other
comprehensiv
601,000.00 601,000.00 601,000.00
e income that
can't be
253
reclassified
into profit
and loss
Including:
Changes arising
from re-
601,000.00 601,000.00 601,000.00
measurement for
defined benefit
plans
II. Other
comprehensiv
e income that
will be (1,556,935.43) 2,946,462.46 1,738,713.58 1,207,748.88 181,778.15
reclassified
into profit
and loss
Balance arising
from the
translation of
(1,556,935.43) 2,946,462.46 1,738,713.58 1,207,748.88 181,778.15
foreign currency
financial
statements
Total other
comprehensive (1,556,935.43) 3,547,462.46 2,339,713.58 1,207,748.88 782,778.15
income
Other explanations, including the adjustment of the effective part of the cash flow hedging gains and losses transferred to the
initial recognized amount of the hedged item:
58. Special reserve
Unit: yuan
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 reserves 420,212,778.13 420,212,778.13
Total 420,212,778.13 420,212,778.13
Description of surplus reserves, including current increase/decrease and change reasons:
60. Undistributed profit
Unit: yuan
Item Current period Prior period
Undistributed profit at the end of previous period before
5,538,135,285.97 5,126,630,011.14
adjustment
254
2022 Annual Report
Total undistributed profits at the beginning of the adjustment
(60,128,638.03)
period (+ for increase and - for decrease)
Undistributed profits at the beginning of the period after
5,538,135,285.97 5,066,501,373.11
adjustment
Plus: Net profits attributable to the owners of parent company in
1,650,582,427.43 1,239,320,067.26
the current period
Common stock dividends payable 377,763,884.10 767,686,154.40
Undistributed profits at the end of the period 6,810,953,829.30 5,538,135,285.97
Details of undistributed profits at the beginning of the adjustment period:
1) Due to retroactive adjustment of Accounting Standards for Business Enterprises and relevant new regulations, RMB
0.00 of the undistributed profit at the beginning of the period was affected.
2) Due to the change of accounting policy, RMB 0.00 of the undistributed profit at the beginning of the period was
affected.
3) Due to the correction of major accounting errors, RMB 0.00 of the undistributed profit at the beginning of the period
was affected.
4) Due to the change of consolidation scope caused by the same control, RMB 0.00 of the undistributed profit at the
beginning of the period was affected.
5) RMB 0.00 of the undistributed profit at the beginning of the period was affected by the total amount of other
adjustments
61. Revenue and cost
Unit: yuan
Amount incurred in current period Amount incurred in previous period
Item
Income Cost Income Cost
Main business 11,257,751,810.00 5,910,146,579.23 7,976,221,600.59 3,995,298,393.86
Other businesses 93,579,735.08 62,654,238.06 61,199,212.32 32,948,252.31
Total 11,351,331,545.08 5,972,800,817.29 8,037,420,812.91 4,028,246,646.17
Whether the net profit deducting non-recurring profit and loss after audit is negative
Yes √ No
Income related information:
Unit: yuan
Contract classification Segment 1 Segment 2 Total
Type of goods
Including:
Main business 7,202,766,247.84 4,054,985,562.16 11,257,751,810.00
Other businesses 93,579,735.08 93,579,735.08
Classified by operating area
Including:
Domestic sales 5,989,724,998.43 4,054,985,562.16 10,044,710,560.59
Overseas sales 1,306,620,984.49 1,306,620,984.49
Type of markets or clients
Including:
255
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:
None
Information related to the transaction price apportioned to the remaining performance obligations:
The amount of income corresponding to the performance obligations signed but not yet performed or completed at the end of
this reporting period is RMB 0.00, of which RMB 0.00 is expected to be recognized as revenue in the year, RMB 0.00 is
expected to be recognized as revenue in year 0, and RMB 0.00 is expected to be recognized as revenue in year 0.
Other description:
62. Taxes and surcharges
Unit: yuan
Amount incurred in current Amount incurred in
Item
period previous period
Urban maintenance and construction tax 43,075,435.03 26,709,162.04
Education surcharge 19,248,049.13 12,172,848.90
Housing property tax 10,547,488.67 8,202,839.28
Land use tax 4,462,427.50 5,356,635.09
Stamp duty 7,410,934.06 4,334,626.82
Surcharge for local education 12,835,042.86 8,372,544.74
Vehicle and vessel tax 16,933.03 15,402.27
Environmental protection tax 490,930.04 140,942.02
Others 85,050.00
Total 98,087,240.32 65,390,051.16
Other description:
63. Selling expenses
Unit: yuan
Amount incurred in current Amount incurred in previous
Item
period period
Employee compensation 649,605,092.33 535,320,245.23
Travel expenses 12,266,843.44 14,589,718.50
Office communication costs 17,665,180.74 12,577,824.48
Sales commission 213,988,639.15 222,716,753.83
Insurance premiums 5,076,079.44 5,302,498.97
Depreciation and amortization 82,408,480.44 52,193,907.26
256
2022 Annual Report
(continued)
Amount incurred in current Amount incurred in previous
Item
period period
Advertising and promotion expenses 600,156,113.14 692,445,882.66
Lease and property management expenses 152,186,000.56 152,728,211.40
Material consumption 29,027,854.76 5,212,855.45
Water/electricity fee 12,817,521.54 11,632,395.90
Service fees 7,485,101.27 6,522,845.03
Depreciation of Right-of-use assets 188,658,565.69 191,875,674.76
Others 78,834,934.96 86,048,976.09
Total 2,050,176,407.46 1,989,167,789.56
Other description:
64. Administrative expenses
Unit: yuan
Amount incurred in current Amount incurred in previous
Item
period period
Employee compensation 356,528,450.43 298,562,603.50
Depreciation and amortization charge 93,586,310.72 35,794,417.00
Travel expenses 4,737,997.83 4,380,791.71
Office allowance 3,066,482.44 4,475,089.91
Consultant and intermediary service fees 27,481,281.65 14,590,734.04
Water/electricity fee 11,445,522.43 9,396,543.04
Communication expense 39,836,787.42 18,015,557.80
Maintenance, debugging and material consumption 35,254,976.30 30,955,528.79
Depreciation of Right-of-use assets 22,168,279.11 18,149,384.98
Others 39,508,546.62 20,069,298.13
Total 633,614,634.95 454,389,948.90
Other description:
257
65. R&D expenses
Unit: yuan
Amount incurred in current Amount incurred in previous
Item
period period
Employee compensation 164,802,423.37 126,551,089.29
Depreciation and amortization 20,937,418.03 15,510,211.39
Material 232,395,899.93 119,134,692.81
Other miscellaneous expenses 69,447,910.78 36,966,372.67
Total 487,583,652.11 298,162,366.16
Other description:
66. Financial expenses
Unit: yuan
Amount incurred in current Amount incurred in previous
Item
period period
Interest expenses 50,043,346.95 29,988,617.24
Including: Interest expense on lease liabilities 26,647,978.76 29,553,772.26
Less: Interest revenue 123,909,561.75 137,186,581.16
Financial discount interest 797,400.00
Exchange gain or loss (52,070,721.48) (607,837.15)
Others 3,362,364.21 1,103,839.96
Total (122,574,572.07) (107,499,361.11)
Other description:
67. Other incomes
Unit: yuan
Amount incurred in current Amount incurred in previous
Other sources of income
period period
Government subsidies 84,373,262.34 102,353,195.81
258
2022 Annual Report
68. Investment income
Unit: yuan
Amount incurred in current Amount incurred in previous
Item
period period
Long-term equity investment gains measured by employing the
4,697,834.75 3,525,570.83
equity method
Investment income from purchasing financial products 30,114,666.09 15,019,953.42
Investment income from the disposal of tradable financial assets 16,658,266.32 84,692,023.73
Total 51,470,767.16 103,237,547.98
Other description:
69. Net gain on exposure hedging
Unit: yuan
Amount incurred in current Amount incurred in previous
Item
period period
Other description:
70. Income from changes in fair value
Unit: yuan
Amount incurred in current Amount incurred in
Sources of gains from fair value change
period previous period
Forward foreign exchange settlement 6,334,756.86
Bank financial products and trust products 32,148,876.44 52,139,711.50
Total 32,148,876.44 58,474,468.36
Other description:
71. Credit impairment Loss
Unit: yuan
Amount incurred in current Amount incurred in
Item
period previous period
Loss on bad debts of other receivables (68,889,588.55) (3,968,251.81)
Loss on bad debts of accounts receivable 4,946,266.03 3,394,251.24
Total (63,943,322.52) (574,000.57)
Other description:
259
72. Assets impairment losses
Unit: yuan
Amount incurred in current Amount incurred in
Item
period previous period
I. Loss on bad debts (854,203.50)
II. Inventory falling price loss and impairment loss of
(331,806,543.64) (92,740,339.23)
contract performance costs
V. Impairment loss of fixed assets (19,343,113.09) (7,924,893.69)
VI. Impairment loss of construction in progress (10,865,480.00)
Total (362,869,340.23) (100,665,232.92)
Other description:
73. Gains from asset disposal
Unit: yuan
Amount incurred in current Amount incurred in
Source of income from disposal of assets
period previous period
Gains from disposal of non-current assets 4,466,739.85 3,275,886.08
Including: Gains on disposal of fixed assets 150,442.48 28,225.52
Gains from disposal of right-of-use assets 4,316,297.37 3,247,660.56
Loss on disposal of non-current assets (740,535.48) (25,437.81)
Including: Loss on disposal of fixed assets (740,535.48) (25,437.81)
Total 3,726,204.37 3,250,448.27
74. Non-operating income
Amounts recorded in the
Amount incurred in Amount incurred in
Item non-recurring gains and
current period previous period
losses of the current period
Government subsidies 485,841.01 1,982,375.49 485,841.01
Non-current assets scrap gains 1,104,717.15 1,196,285.18 1,104,717.15
Income from compensation or fines 2,923,432.97 1,348,234.56 2,923,432.97
Others 6,055,568.25 1,513,123.84 6,055,568.25
Total 10,569,559.38 6,040,019.07 10,569,559.38
260
2022 Annual Report
Government subsidies recorded in current profit and loss
Unit: yuan
Whether the
Speci
Typ subsidy Amount Amount
al
Granting Granting e of affects the incurred in incurred in Asset/inco
Subsidized project subsi
subject reason natu profit and current previous me related
dy or
re loss of period period
not
current year
Adjustment to the account of
subsidies received for the
Income
response to power supply Subsidy No No 222,371.97
related
demand - Winner Medical
(Wuhan)
Funds receivable for power Income
Subsidy No No 113,756.23
supply demand related
Exemption of value-added tax
for retired soldiers and key Income
Subsidy No No 149,712.81
groups - Winner Medical related
(Wuhan)
Export earnings incentive from
Income
government in 2020 - Winner Reward No No 180,000.00
related
Medical (Chongyang)
Financial Tax Contribution
Income
Award for Industrial Enterprises Reward No No 600,000.00
related
- Winner Medical (Chongyang)
Proceeds from Longhua District
1,000,000. Income
Quality Award in 2020 - Winner Reward No No
00 related
Medical (shenzhen)
Rewards from the Municipal
Bureau of Commerce for Income
Reward No No 197,300.00
opening up policy of foreign related
trade enterprises
Income
Others No No 5,075.49
related
1,982,375.
Total 485,841.01
49
Other description:
75. Non-operating expenses
Unit: yuan
Amounts recorded in the non-
Amount incurred in Amount incurred in
Item recurring gains and losses of the
current period previous period
current period
External donations 2,698,153.48 4,497,184.74 2,698,153.48
Loss on damage and scrap of
44,824,142.16 13,527,120.74 44,824,142.16
non-current assets
Overdue fines 5,587,691.07 5,587,691.07
Liquidated damages 11,433,314.10 11,433,314.10
Others 3,069,974.82 895,001.31 3,069,974.82
Total 67,613,275.63 18,919,306.79 67,613,275.63
Other description:
261
76. Income tax expenses
(1) Income tax expense table
Unit: yuan
Amount incurred in Amount incurred in
Item
current period previous period
Current income tax expenses 318,328,487.05 196,937,865.17
Deferred income tax expenses (72,523,142.67) 21,378,341.19
Adjustment of the previous annual income tax amount in the current
(503,799.50) 6,999,437.58
period
Total 245,301,544.88 225,315,643.94
(2) Accounting profit and income tax expense adjustment process
Unit: yuan
Amount incurred in
Item
current period
Total profit 1,919,506,096.33
Income tax expenses calculated at the appropriate/applicable tax rate 287,925,914.45
Impact of different tax rates applied on subsidiaries (7,032.76)
Impact of income tax before adjustment (503,799.50)
Impact of non-deductible costs, expenses and losses 1,556,405.71
Impact of weighted deduction of R&D costs (50,382,980.12)
Impact of temporary difference or deductible losses on unrecognized deferred income tax assets in
6,713,037.10
the current period
Income tax expenses 245,301,544.88
Other description:
77. Other comprehensive income
See Note 57 for details.
262
2022 Annual Report
78. Cash flow statement items
(1) Other cash received related to operating activities
Unit: yuan
Amount incurred in Amount incurred in
Item
current period previous period
Deposit, margin and quality guarantee deposit received 20,839,933.57 15,037,420.79
Interest income received 29,396,223.39 42,673,242.80
Government subsidies received 74,022,751.98 119,837,112.25
Others 91,653,856.59 9,185,867.26
Total 215,912,765.53 186,733,643.10
Explanation on other cash received related to operating activities:
(2) Other cash paid related to operating activities
Unit: yuan
Amount incurred in Amount incurred in
Item
current period previous period
Management and development costs paid in cash 214,977,555.82 124,259,182.05
Selling expenses paid in cash 239,471,468.15 282,879,625.34
Deposit, margin and quality guarantee deposit paid 8,316,592.48 43,490,664.87
Bank handling charge 3,348,042.45 1,103,839.96
Others 136,138,509.24 15,768,791.30
Total 602,252,168.14 467,502,103.52
Description of other cash paid related to operating activities
(3) Other cash received related to investment activities
Unit: yuan
Amount incurred in Amount incurred in
Item
current period previous period
Description of other cash received related to investment activities:
263
(4) Other cash paid related to investment activities
Unit: yuan
Amount incurred in Amount incurred in
Item
current period previous period
Description of other cash paid related to investment activities:
(5) Other cash received related to financing activities
Unit: yuan
Amount incurred in Amount incurred in
Item
current period previous period
Description of other cash received related to financing activities:
(6) Other cash paid related to financing activities
Unit: yuan
Amount incurred in Amount incurred in
Item
current period previous period
Principal and interest paid on lease liabilities 246,700,957.46 233,452,456.57
Treasury stock repurchase paid 242,090,367.43 257,992,366.68
Deposit paid on bills and letters of credit (for financing purposes) 119,430,633.87
Total 608,221,958.76 491,444,823.25
Description of other cash paid related to financing activities:
264
2022 Annual Report
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 of net profits to cash flows from operating
activities:
Net profit 1,674,204,551.45 1,237,444,867.34
Plus: Provision for impairment of assets 426,812,662.75 101,239,233.49
Depreciation of fixed assets, oil and gas assets and productive
210,820,306.94 155,898,535.48
biological assets
Depreciation of Right-of-use assets 215,248,882.88 210,025,059.74
Amortization of intangible assets 55,669,156.15 10,789,643.37
Amortization of long-term deferred expenses 73,413,333.87 55,654,548.57
Losses on disposal of fixed assets, intangible assets and other
(3,726,204.37) (3,250,448.27)
long-term assets (gains expressed with “-”)
Loss on retirement of fixed assets (gains expressed with “-”) 43,719,425.01 12,330,835.56
Loss from fair value change (gains expressed with “-”) (32,148,876.44) (58,474,468.36)
Financial expenses (gains expressed with “-”) (43,801,146.50) (62,543,190.63)
Investment losses (gains expressed with “-”) (51,470,767.16) (103,237,547.98)
Decreased in deferred income tax assets (increase expressed
(66,928,009.27) 20,206,789.76
with “-”)
Increase in deferred income tax liabilities (decrease expressed
(5,595,133.40) 1,171,551.44
with “-”)
Decrease in inventories (increase expressed with “-”) (73,528,720.88) (473,630,443.01)
Decrease in operating receivables (increase expressed with “-
42,540,286.26 (27,098,897.28)
”)
Increase in operating payables (decrease expressed with “-”) 526,247,452.59 (289,569,059.18)
Others (8,004,969.61) 84,732,891.89
Net cash flow from operating activities 2,983,472,230.27 871,689,901.93
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 4,370,821,958.17 4,088,612,262.04
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 equivalents 282,209,696.13 (61,122,432.34)
265
(2) Net cash paid for obtaining subsidiaries in current period
Unit: yuan
Amount
Cash or cash equivalents paid in the current period for business combinations occurred in current
2,020,649,500.00
period
Including:
Zhejiang Longterm 727,540,000.00
Winner Guilin 428,000,000.00
Winner Medical (Hunan) 751,921,500.00
Junjian Medical 113,188,000.00
Less: Cash and cash equivalents held by the Company on the acquisition date 343,576,791.44
Including:
Zhejiang Longterm 57,779,546.35
Winner Guilin 115,952,457.11
Winner Medical (Hunan) 151,226,071.39
Junjian Medical 18,618,716.59
Including:
Net cash paid for obtaining subsidiaries 1,677,072,708.56
Other description:
(3) Net cash from disposal of subsidiaries in current period
Unit: yuan
Amount
Including:
Including:
Including:
Other description:
266
2022 Annual Report
(4) Composition of cash and cash equivalents
Unit: yuan
Item Closing Balance Beginning balance
I. Cash 4,370,821,958.17 4,088,612,262.04
Including: cash on hand 246,825.76 65,897.39
Bank deposit readily available for payment 4,169,305,311.38 4,088,546,364.65
Other monetary capital readily available for payment 201,269,821.03
III. Balance of cash and cash equivalents at end of period 4,370,821,958.17 4,088,612,262.04
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:
81. Assets with ownership or use rights restricted
Unit: yuan
Item Ending book value Causes for restriction
Cash and cash Margin and performance deposit deposited for handling
156,055,620.73
equivalents international and domestic letters of credit
Fixed assets 189,752,483.28 See other description for details
Large plot of Longterm Medical, loan mortgage, daily production
Intangible assets 24,467,616.10
and operation needs, supplementary working capital
Buildings 7-9# of Longterm Medical, loan mortgage, daily
Investment real estates 4,766,112.61
production and operation needs, supplementary working capital
Total 375,041,832.72
Other description:
Limitation on fixed assets:
Item Description Ending book value Causes for restriction
For details, please refer to Note “XIII. Other Important
Fixed Winner Medical Matters (IV) Other Important Events that Affect Investors'
5,331,946.53
assets (Shenzhen) Decisions 2. Urban Renewal Project of Winner Industrial
Park”.
Fixed Buildings 1-6# of Loan mortgage, daily production and operation needs,
53,941,694.00
assets Longterm Medical supplementary working capital
Fixed Buildings 7-9# of Loan mortgage, daily production and operation needs,
108,035,275.78
assets Longterm Medical supplementary working capital
Fixed Room 112, Building 4, Loan mortgage, daily production and operation needs,
2,613,051.98
assets Huace Center supplementary working capital
Fixed Room 101, Building 6, Loan mortgage, daily production and operation needs,
6,610,171.67
assets Huace Center supplementary working capital
Fixed Room 201, Building 6, Loan mortgage, daily production and operation needs,
6,610,171.67
assets Huace Center supplementary working capital
Fixed Room 301, Building 6, Loan mortgage, daily production and operation needs,
6,610,171.65
assets Huace Center supplementary working capital
267
82. Foreign currency monetary items
(1) Foreign currency monetary items
Unit: yuan
Ending balance in foreign Conversion exchange Ending balance converted to
Item
currency rate RMB
Cash and cash equivalents 362,335,309.79
Including: USD 47,015,178.11 6.9646 327,441,909.50
EUR 339,791.45 7.4229 2,522,237.95
HKD 36,133,593.19 0.8933 32,278,138.80
Yen 97,363.25 0.0524 5,101.83
Ringgit 55,745.44 1.5772 87,921.71
Accounts receivable 21,239,373.14
Including: USD 2,328,075.19 6.9646 16,214,112.47
EUR
HKD 5,625,501.70 0.8933 5,025,260.67
Long-term loans
Including: USD
EUR
HKD
Other receivables 308,581.55
Including: HKD 345,440.00 0.8933 308,581.55
Accounts payable 8,200,980.93
Including: HKD 7,267,954.12 0.8933 6,492,463.42
Ringgit 1,083,259.90 1.5772 1,708,517.51
Other payables 6,675,894.22
Including: USD 84,457.12 6.9646 588,210.06
HKD 6,021,658.70 0.8933 5,379,147.72
Ringgit 449,236.90 1.5772 708,536.44
Other description:
(2) Description of overseas operating entities, including for important overseas operating entities, the main overseas
business place, recording currency and selection basis shall be disclosed, and the reasons for changes in recording
currency shall also be disclosed.
Applicable √ Not applicable
268
2022 Annual Report
83. Hedge
Disclose the qualitative and quantitative information of hedging items, related hedging instruments and hedged risks
according to the hedging category:
84. Government subsidies
(1) Basic information of government subsidies
Unit: yuan
Amount recorded
Presented
Type Amount in current profit
item
and loss
1. Government subsidies related to assets
Technical transformation project of key material production enterprises Deferred
20,000,000.00 2,000,000.00
for Shenzhen public health event in 2020 - the Company income
Annual equipment investment subsidies (Spunlace Phase III, Deferred
15,000,000.00 375,000.00
warehouse establishment) - Winner Medical (Tianmen) income
Deferred
Subsidy for R & D projects in Technology Center - the Company 12,420,000.00 210,556.48
income
Subsidy funds for infrastructure construction of municipal government Deferred
12,406,500.00 413,550.00
projects - Winner Medical (Chongyang) income
Subsidy for production of materials for public health events in 2020 - Deferred
11,400,000.00 3,420,000.00
Winner Medical (Huanggang) income
Deferred
Park project construction in Yuyue Town - Winner Medical (Jiayu) 9,880,000.00 329,333.28
income
Provincial subsidy for purchasing equipment in key enterprise of Deferred
9,370,000.00 2,522,692.27
“Three Batches” - Winner Medical (Huanggang) income
Special funds for the project on implementing the technical reformation
policy of “Zero Land” in Wuhan and the municipal industrial
Deferred
investment and technical transformation of the Bureau for Science, 8,000,000.00 582,288.70
income
Technology and Economic Information Technology of Xinzhou
District - Winner Medical (Wuhan)
Equipment subsidies for public health events in 2021 - Winner Medical Deferred
6,800,000.00 1,700,000.00
(Jingmen) income
Subsidy for purchasing protective equipment in key enterprises of Deferred
5,590,000.00 563,697.48
“Three Batches” - Winner Medical (Chongyang) income
Technical innovation subsidy for Phase II Expansion Project of Deferred
4,755,300.00 166,366.20
Purcotton - Winner Medical (Jingmen) income
Technical transformation funds for urban areas in 2022 - Winner Deferred
4,094,200.00
Medical (Huanggang) income
Subsidy for surgical gown production line project - Winner Medical Deferred
4,000,000.00 432,432.44
(Chongyang) income
Subsidy for capacity expansion & technical upgrading of enterprises Deferred
3,645,000.00 591,720.31
producing materials for public health events - Winner Medical (Wuhan) income
Subsidy for company planning change due to Huanggang Chibi Avenue Deferred
3,169,359.20 105,645.31
demolition - Winner Medical (Huanggang) income
Special funds for the high-quality development of manufacturing in Deferred
3,000,000.00 336,448.60
2020 - Winner Medical (Huanggang) income
Subsidy for second batch of traditional industry transformation in 2017 Deferred
1,900,000.00 209,174.28
- Winner Medical (Huanggang) income
Automatic transformation of surgical consumables production line - the Deferred
1,860,000.00 186,000.00
Company income
Received subsidies from the development of the emergency material
Deferred
security system of central government for production capacity 1,600,000.00 74,309.77
income
improvement - Winner Medical (Wuhan)
269
Technical transformation funds for urban areas in 2021 - Winner Deferred
1,520,000.00 151,666.65
Medical (Huanggang) income
Subsidy for science and technology support plan projects of Hubei in Deferred
1,500,000.00 150,000.00
2014 (the second batch) - Winner Medical (Huanggang) income
Special subsidy of Municipal Bureau of Economy and Information
Deferred
Technology for the issuance of technical transformation on emergency 1,440,000.00 438,269.20
income
material support system construction - Winner Medical (Huanggang)
Special funds for provincial traditional industry transformation and
Deferred
upgrading - the first batch of block funds allocation plan in Tianmen in 1,320,000.00 136,551.72
income
2019 - Winner Medical (Tianmen)
First batch of traditional subsidies in 2019 - Winner Medical Deferred
1,210,000.00 121,000.00
(Huanggang) income
20180311 Subsidies for research, science and innovation on the
Deferred
technology of thermo-responsive self-curing wound regeneration and 1,200,000.00 239,811.33
income
repair materials - the Company
Key technical transformation and expansion projects (cotton spun laced Deferred
1,000,000.00 108,108.00
wipes production line project) - Winner Medical (Tianmen) income
Subsidies for first batch of technological transformation award of Deferred
1,000,000.00 106,157.11
industrial enterprises in 2018 - Winner Medical (Chongyang) income
2020 Provincial special funds for the high-quality development of Deferred
1,000,000.00 105,263.16
manufacturing - Winner Medical (Jiayu) income
1 million provincial special funds for the development of Deferred
1,000,000.00 125,460.48
manufacturing - Winner Medical (Wuhan) income
Production line project with an annual output of 120 million bales of Deferred
930,000.00 107,307.72
cotton wipes in 2017 - Winner Medical (Tianmen) income
Deferred
Others 13,497,883.36 1,264,322.88
income
Subtotal: 165,508,242.56 17,273,133.37
2. Government subsidies related to income
Preferential tax rebates for key groups in 2019-2021 - Winner Medical Other
8,516,900.00 8,516,900.00
(Huanggang) incomes
Employment of key groups for offset of value-added tax - Winner Other
3,542,750.00 3,542,750.00
Medical (Chongyang) incomes
Construction funds for Industrial Internet Analysis Medical Supplies
Other
Industry supported by Guangdong Communications Administration - 3,000,000.00 3,000,000.00
incomes
the Company
Industrial Internet development support plan in 2022 - Shenzhen Other
3,000,000.00 3,000,000.00
Purcotton incomes
Tax refund for employment of key groups in 2019-2022 - Winner Other
2,979,600.00 2,979,600.00
Medical (Jiayu) incomes
Other
Technology Innovation Award - the Company 429,537.00 429,537.00
incomes
Reward issued by Industry and Information Technology Bureau of
Other
Shenzhen Municipality for single champion in manufacturing industry - 2,000,000.00 2,000,000.00
incomes
the Company
Subsidy issued by Industry and Information Technology Bureau of Other
2,000,000.00 2,000,000.00
Longhua District for enterprise with industrial growth - the Company incomes
Subsidy issued by Industry and Information Technology Bureau of
Other
Longhua District for enterprise with steady industrial growth in three 2,000,000.00 2,000,000.00
incomes
quarters - the Company
Support plan for double promotion project of quality brand - Shenzhen Other
1,800,000.00 1,800,000.00
Purcotton incomes
Subsidy by Commerce Bureau of Shenzhen Municipality for a Other
1,540,000.00 1,540,000.00
premium from Jan. to Jun. in 2021 - the Company incomes
Other
Export credit insurance subsidy - the Company 1,259,029.00 1,259,029.00
incomes
270
2022 Annual Report
Award for stable industrial growth of Longhua District in 2021 - Other
1,192,300.00 1,192,300.00
Shenzhen Purcotton incomes
Adjustment of tax reduction and exemption for key groups from July to Other
1,084,900.00 1,084,900.00
November 2022 - the Company incomes
Subsidy issued by Industry and Information Technology Bureau of Other
1,000,000.00 1,000,000.00
Longhua District for cross-border logistics support - the Company incomes
Other
Government subsidies - Winner Medical (Chongyang) 800,000.00 800,000.00
incomes
Special funding for science and technology protection of Shenzhen Other
750,000.00 750,000.00
Institute of Advanced Technology - the Company incomes
Other
Cotton freight subsidy - Winner Medical (Huanggang) 675,700.00 675,700.00
incomes
Other
Cotton freight subsidy received in 2019 675,700.00 675,700.00
incomes
First batch of one-time employment training subsidies in 2022 - Other
652,875.00 652,875.00
Shenzhen Purcotton incomes
Subsidy issued by Industry and Information Technology Bureau of
Other
Longhua District for stable growth of foreign trade in 2021- the 639,300.00 639,300.00
incomes
Company
Social security subsidies for the people with employment difficulty in Other
602,114.00 602,114.00
the enterprise - Winner Medical (Chongyang) incomes
Special fund for scientific and technological innovation in 2022 - the Other
500,000.00 500,000.00
Winner Medical (Chongyang) incomes
Other income
/ Non-
Others 26,945,264.98 26,945,264.98
operating
income
Subtotal: 67,585,969.98 67,585,969.98
Total 233,094,212.54 84,859,103.35
(2) Return of government subsidies
Applicable √ Not applicable Other description:
85. Others
271
VIII. Consolidation scope changes
1. Business combination not under common control
(1) Business combination not under common control occurred in current period
Unit: yuan
Net profit of
Basis for Income of the
Method of the acquiree
Time of Equity determinatio acquiree from
Name of the Cost of equity equity Acquisition from the
equity acquisiti n of the acquisition
acquiree acquisition acquisitio date acquisition
acquisition on ratio acquisition date to the end
n date to the end
date of the period
of the period
Share
Longterm April 30, April 30, Acquisition
727,540,000.00 55.00% acquisitio 326,797,009.07 70,390,069.32
Medical 2022 2022 of control
n
Share
Winner June 30, Acquisition
450,000,000.00 100.00% acquisitio June 30, 2022 239,586,252.85 44,729,822.83
Guilin 2022 of control
n
Winner Share
Acquisition
Medical July 1, 2022 751,921,500.00 68.70% acquisitio July 1, 2022 146,250,227.37 17,913,174.25
of control
(Hunan) n
Share
Junjian October 31, October 31, Acquisition
192,000,000.00 100.00% acquisitio 106,185,026.80 1,115,057.88
Medical 2022 2022 of control
n
Other description:
[Note 1] According to the resolution of the board of directors of the Company, under the Equity Transfer Agreement
Concerning Zhejiang Longterm Medical Technology Co., Ltd. signed on April 8, 2022 between the Company and natural
person shareholders such as Wu Kangping, Huang Lepei, and Wu Di. The Company acquired 55.00% equity of Zhejiang
Longterm held by the above-mentioned natural person shareholders at a price of RMB 727.54 million. Zhejiang Longterm
has completed the registration procedures of industrial and commercial change on May 10, 2022, and the dispatched directors
of the Company have accounted for the majority in the new board of directors. For convenience of accounting, the purchase
date has been determined as April 30, 2022, it will be included in the scope of consolidated financial statements from April
30, 2022.
[Note 2] According to the resolution of the board of directors of the Company, under the State-owned Property Rights
Transfer Contract signed by and between the Company and China Resources Zizhu Pharmaceutical Co., Ltd. on June 6, 2022,
the Company acquired 100.00% equity of Winner Guilin held by China Resources Zizhu Pharmaceutical Co., Ltd. at a price
of RMB 450 million. Winner Guilin has completed the registration procedures of industrial and commercial change on June
27, 2022, and the dispatched directors of the Company have accounted for the majority in the new board of directors. For
convenience of accounting, the purchase date has been determined as June 30, 2022, it will be included in the scope of
consolidated financial statements from June 30, 2022.
[Note 3] According to the resolution of the board of directors of the Company, under the Investment Agreement Concerning
Winner Medical (Hunan) Co., Ltd. signed on May 18, 2022 between the Company and 17 natural person shareholders such as
Zheng Datian, Chen Sanju, and Zheng Darong, etc. The Company acquired 68.70% equity of Zhejiang Longterm held by the
above-mentioned natural person shareholders at a price of RMB 751,921,500. Winner Medical (Hunan) has completed the
registration procedures of industrial and commercial change on July 4, 2022, and the dispatched directors of the Company
have accounted for the majority in the new board of directors. For convenience of accounting, the purchase date has been
determined as July 1, 2022, it will be included in the scope of consolidated financial statements from July 1, 2022.
[Note 4] According to the resolution of the Investment Committee of the Company, the Company signed the Equity Transfer
Agreement Concerning Shenzhen Junjian Medical Device Co., Ltd. with natural person shareholders such as Zheng Junhui
and Sun Dongling on September 21, 2022. The Company acquired 100.00% equity of Junjian Medical held by the above
natural person shareholders at a price of RMB 192 million. Junjian Medical has completed the registration procedures of
industrial and commercial change on November 9, 2022, and the dispatched directors of the Company have accounted for the
majority in the new board of directors. For convenience of accounting, the purchase date has been determined as October 31,
2022, it will be included in the scope of consolidated financial statements from October 31, 2022.
272
2022 Annual Report
(2) Combination cost and goodwill
Unit: yuan
Winner Medical
Combination cost Longterm Medical Winner Guilin Junjian Medical
(Hunan)
- Cash 727,540,000.00 450,000,000.00 751,921,500.00 192,000,000.00
- 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 727,540,000.00 450,000,000.00 751,921,500.00 192,000,000.00
Less: the share of the fair value of identifiable
337,067,021.33 205,185,395.25 362,932,241.74 171,602,027.67
net assets acquired
The amount of goodwill/combination cost less
than the share of the fair value of identifiable 390,472,978.67 244,814,604.75 388,989,258.26 20,397,972.33
net assets acquired
Determination method of fair value of combination cost, contingent consideration and explanation of its changes:
Main reasons for the formation of large amount of goodwill:
The Company acquired 55.00% equity of Zhejiang Longterm Medical Technology Co., Ltd. with a merge cost of RMB
727,540,000.00. On the purchase date, the Company obtained the identifiable net assets of Zhejiang Longterm Medical
Technology Co., Ltd. with the fair value of RMB 337,067,021.33, and the difference between the merge cost and the fair
value of the identifiable net assets obtained in the merger of RMB 390,472,978.67 was recognized as goodwill.
The Company acquired 100.00% equity of Winner Guilin Latex Co., Ltd. with a merge cost of RMB 450,000,000.00. On the
purchase date, the Company obtained the identifiable net assets of Winner Guilin Latex Co., Ltd. with the fair value of RMB
205,185,395.25, and the difference between the merge cost and the fair value of the identifiable net assets obtained in the
merger of RMB 244,814,604.75 was recognized as goodwill.
The Company acquired 68.70% equity of Winner Medical (Hunan) Co., Ltd. with a merge cost of RMB 751,921,500.00
(including the subsequent capital increase of RMB 100,000,000.00 from the Company to Winner Medical (Hunan)). On the
purchase date, the Company obtained the identifiable net assets of Winner Medical (Hunan) Co., Ltd. with the fair value of
RMB 362,932,241.74, and the difference between the merge cost and the fair value of the identifiable net assets obtained in
the merger of RMB 388,989,258.26 was recognized as goodwill.
The Company acquired 100.00% equity of Shenzhen Junjian Medical Device Co., Ltd. with a merge cost of RMB
192,000,000.00. On the purchase date, the Company obtained the identifiable net assets of Shenzhen Junjian Medical Device
Co., Ltd. with the fair value of RMB 171,602,027.67, and the difference between the merge cost and the fair value of the
identifiable net assets obtained in the merger of RMB 20,397,972.33 was recognized as goodwill.
Other description:
273
(3) Identifiable assets and liabilities of the acquiree on the acquisition date
Unit: yuan
Longterm Medical Winner Guilin Winner Medical (Hunan) Junjian Medical
Book value on Fair value on Book value on Fair value on Book value on Fair value on Book value on
Fair value on the
the acquisition the acquisition the acquisition the acquisition the acquisition the acquisition the acquisition
acquisition date
date date date date date date date
Assets: 1,000,298,050.32 691,666,426.62 372,637,805.64 289,256,819.04 657,585,136.05 359,382,318.51 312,574,809.18 180,558,119.61
Cash and cash
68,842,612.15 68,842,612.15 115,952,457.11 115,952,457.11 151,226,071.39 51,226,071.39 18,618,716.59 18,618,716.59
equivalents
Accounts
receivable 69,693,735.14 69,693,735.14 21,441,959.97 9,223,748.32 78,230,459.99 78,230,459.99 148,735,230.51 148,735,230.51
payments
Inventory 83,199,252.80 76,423,001.15 71,013,902.10 71,013,902.10 48,626,681.19 40,173,488.66 16,984,516.05 9,377,826.48
Fixed assets 341,623,696.45 332,233,721.18 54,189,422.59 34,935,720.80 207,435,300.00 125,452,751.98
Intangible assets 343,093,441.26 50,265,445.00 95,143,604.43 43,234,531.27 113,174,121.00 9,506,811.77 124,479,182.37 69,182.37
Notes receivable 2,889,158.27 2,889,158.27 29,676,053.92 29,676,053.92
Amounts
receivable 1,474,263.14 1,474,263.14 12,285,561.16 12,285,561.16
financing
Advances to
19,708,978.59 19,708,978.59 4,499,004.10 4,499,004.10 6,253,493.21 6,253,493.21 810,851.95 810,851.95
suppliers
Other
32,632,189.13 32,632,189.13 8,399,520.84 8,399,520.84 3,909,030.06 3,909,030.06 601,078.43 601,078.43
receivables
Other current
279,892.16 279,892.16 19,340.02 19,340.02
assets
Investment real
4,629,650.00 529,882.24
estates
Construction in
32,090,599.60 32,090,599.60 477,876.15 477,876.15
progress
Right-of-use
611,208.27 611,208.27 262,617.20 262,617.20
assets
Long-term
unamortized 2,531,712.36 2,894,311.84
expenses
Deferred income
3,101,574.14 3,101,574.14 523,671.36 523,671.36 1,660,837.98 1,660,837.98 2,063,276.06 2,063,276.06
tax assets
Debt: 387,448,920.63 341,154,177.07 167,452,410.39 154,945,262.40 129,299,485.77 99,569,063.14 140,972,781.51 107,968,609.12
Loan 176,996,912.90 176,996,912.90
Account payable
123,161,542.32 123,161,542.32 86,907,769.43 86,907,769.43 87,426,528.12 87,426,528.12 85,936,761.96 85,936,761.96
payments
Deferred income
46,294,743.56 14,305,888.65 1,798,740.66 32,330,271.93 2,599,849.30 33,004,172.39
tax liabilities
Contract
16,984,188.90 16,984,188.90 48,572,857.70 48,572,857.70 2,180,254.92 2,180,254.92 2,713,664.69 2,713,664.69
liabilities
Taxes payable 22,177,789.84 22,177,789.84 10,975,404.29 10,975,404.29 7,193,459.28 7,193,459.28 18,754,362.48 18,754,362.48
Non-current
liabilities due
155,245.72 155,245.72 373,656.36 373,656.36 265,877.16 265,877.16
within one year
Other current
1,678,497.39 1,678,497.39 6,314,471.50 6,314,471.50 168,971.52 168,971.52 297,942.83 297,942.83
liabilities
Deferred income 2,362.46 2,362.46
Net assets 612,849,129.69 350,512,249.55 205,185,395.25 134,311,556.64 528,285,650.28 259,813,255.37 171,602,027.67 72,589,510.49
Less: Minority
275,782,108.36 157,730,512.30 165,353,408.54 81,321,548.93
equity
Net assets
337,067,021.33 192,781,737.25 205,185,395.25 134,311,556.64 362,932,241.74 178,491,706.44 171,602,027.67 72,589,510.49
acquired
274
2022 Annual Report
Fair value determination method of identifiable assets and liabilities:
The acquisition target Zhejiang Longterm Medical Technology Co., Ltd. has been appraised by Shenzhen Pengxin Asset
Appraisal and Land & Real Estate Appraisal Co., Ltd. with an issuance of the Appraisal Report on the Fair Value of
Identifiable Assets and Liabilities of Zhejiang Longterm Medical Technology Co., Ltd. Related to the Purpose of Financial
Reporting of Winner Medical Co., Ltd. (P.X.Z.P.B. [2023] No. S016) and the appraisal benchmark date of April 30, 2022.
According to the appraisal report, considering the impact of deferred income tax and the impact of the capital increase, the
fair value of the identifiable net assets of the acquired 100% equity of Zhejiang Longterm Medical Technology Co., Ltd. is
RMB 612849129.69.
The acquisition target Winner Guilin Latex Co., Ltd. has been appraised by Yinxin Appraisal Co., Ltd. with an issuance of
the Assets Appraisal Report on the Market Value Items of Various Identifiable Assets, Liabilities and Contingent Liabilities of
Winner Guilin Latex Co., Ltd. Related to the Proposed Merger Consideration Allocation of Winner Medical Co., Ltd.
(Y.X.P.B.Zi [2023] No. D00025), and the appraisal benchmark date of June 30, 2022. According to the appraisal report,
considering the impact of deferred income tax and the impact of the capital increase, the fair value of the identifiable net
assets of the acquired 100% equity of Winner Guilin Latex Co., Ltd. is RMB 205,185,395.25.
The acquisition target Winner Medical (Hunan) Co., Ltd. has been appraised by Yinxin Appraisal Co., Ltd. with an issuance
of the Assets Appraisal Report on the Market Value Items of Various Identifiable Assets, Liabilities and Contingent
Liabilities of Winner Medical (Hunan) Co., Ltd. Related to the Proposed Merger Consideration Allocation of Winner
Medical Co., Ltd. (Y.X.P.B.Zi [2023] No. D00026), and the appraisal benchmark date of June 30, 2022. According to the
appraisal report, considering the impact of deferred income tax and the impact of the capital increase, the fair value of the
identifiable net assets of the acquired 100% equity of Winner Medical (Hunan) Co., Ltd. is RMB 428,285,650.28.
The acquisition target Shenzhen Junjian Medical Device Co., Ltd. has been appraised by Yinxin Appraisal Co., Ltd. with an
issuance of the Assets Appraisal Report on the Market Value Items of Various Identifiable Assets, Liabilities and Contingent
Liabilities of Shenzhen Junjian Medical Device Co., Ltd. Related to the Proposed Merger Consideration Allocation of Winner
Medical Co., Ltd. (Y.X.P.B.Zi [2023] No. D00027), and the appraisal benchmark date of October 31, 2022. According to the
appraisal report, considering the impact of deferred income tax and the impact of the capital increase, the fair value of the
identifiable net assets of the acquired 100% equity of Shenzhen Junjian Medical Device Co., Ltd. is RMB 171,602,027.67.
Contingent liabilities of the acquiree incurred in business combination
Other description:
(4) Gains or losses arising from remeasurement of equity held prior to the acquisition date at fair value
Whether there are transactions that realize the business combination step by step through multiple transactions and obtain
control right during the reporting period
Yes √ No
(5) Relevant description of the combination consideration or the fair value of the identifiable assets and liabilities of the
acquiree that cannot be reasonably determined on the acquisition date or at the end of current period of the combination
Not applicable.
(6) Other description
NA
275
2. Business combination under common control
(1) Business combination under common control occurred in current period
Unit: yuan
Income of the Net profit of the Income of Net profit
Proportion Basis of
Basis for combined party combined party the of the
of equity business
Name of determinat from the from the combined combined
obtained in combination Merger
merged ion of beginning of beginning of party party
business under date
party merger current period current period to during the during the
combinatio common
date to the date of the date of comparison comparison
n control
combination combination period period
Other description: N/A.
(2) Combination cost
Unit: yuan
Combination cost
-- Cash
-- Book value of non-cash assets
-- Book value of debt issued or assumed
-- Book value of equity securities issued
-- Contingent consideration
Contingent consideration and explanation of its changes: N/A
Other description:
(3) Book value of assets and liabilities of the combined party on the date of combination
Unit: yuan
Merger date End of previous period
Assets:
Cash and cash equivalents
Accounts receivable payments
Inventory
Fixed assets
Intangible assets
Debt:
Loan
Account payable payments
Net assets
Less: Minority equity
Net assets acquired
276
2022 Annual Report
Contingent liabilities of the combined party incurred in business combination
Other description:
3. Reverse purchase
Basic information of transaction, basis of transaction forming reverse purchase, whether the assets and liabilities retained by
the listed company constitute business and their basis, determination of combination cost, amount and calculation of adjusted
equity in accordance with equity transaction:
4. Disposal of subsidiary
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:
The Company cancels Pure HB (Shanghai) in the current period.
6. Others
None
IX. Interests in other entities
1. Interests in a subsidiary
(1) Composition of enterprise group
Subsidiary Main operation Registration Shareholding ratio Way of
Business nature
name site place Direct Indirect obtaining
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
277
(continued)
Subsidiary Main operation Registration Shareholding ratio
Business nature Way of obtaining
name site place Direct Indirect
Shenzhen City, Shenzhen City,
Qianhai Sale of Purcotton
Guangdong Guangdong 100.00% Establishment
Purcotton products
Province Province
Production and sales of
Business
Winner Huanggang cotton spun laced non-
Huanggang City, combination
Medical City, Hubei woven fabric, medical 100.00%
Hubei Province under common
(Huanggang) Province consumables and
control
Purcotton products
Business
Winner Production and sales of
Jingmen City, Jingmen City, combination
Medical medical consumables 100.00%
Hubei Province Hubei Province under common
(Jingmen) and Purcotton products
control
Business
Winner Chongyang Chongyang
Production and sales of combination
Medical County, Hubei County, Hubei 100.00%
medical consumables under common
(Chongyang) Province Province
control
Business
Winner Production and sales of
Jiayu County, Jiayu County, combination
Medical medical consumables 100.00%
Hubei Province Hubei Province under common
(Jiayu) and Purcotton products
control
Business
Winner
Zhijiang City, Zhijiang City, Production and sales of combination
Medical 100.00%
Hubei Province Hubei Province medical gray cloth under common
(Yichang)
control
Production and sales of Business
Winner
Tianmen City, Tianmen City, cotton spun laced non- combination
Medical 100.00%
Hubei Province Hubei Province woven fabric and under common
(Tianmen)
Purcotton products control
Business
Winner Sales of medical
combination
Medical (Hong Hong Kong Hong Kong consumables and healthy 60.00%
under common
Kong) living consumer goods
control
Business
Winner Huanggang
Huanggang City, combination
(Huanggang) City, Hubei Cotton trade 100.00%
Hubei Province under common
Cotton Province
control
Business
Winner
There is no actual combination not
Medical Malaysia Malaysia 100.00%
business operation under common
Malaysia
control
Winner Heyuan City, Heyuan City, There is no actual
Medical Guangdong Guangdong business operation at 100.00% Establishment
(Heyuan) Province Province present
Production and
Winner sterilization of cotton
Wuhan City, Wuhan City,
Medical spun laced non-woven 100.00%
Hubei Province Hubei Province Establishment
(Wuhan) fabric and Purcotton
products
Shenzhen City, Shenzhen City,
Sales of personal care
PureH2B Guangdong Guangdong 100.00% Establishment
and other products
Province Province
Pure HB Import and domestic
Shanghai Shanghai 100.00% Establishment
(Shanghai)1* sales of cosmetics
Shenzhen City, Shenzhen City, Sales of Cotton Lining
Purunderwear 100.00% Establishment
Guangdong Guangdong products
278
2022 Annual Report
Province Province
Huanggang
Huanggang Huanggang City, Sale of Purcotton
City, Hubei 100.00% Establishment
Purcotton Hubei Province products
Province
Winner Foshan City, Foshan City, There is no actual
Medical Guangdong Guangdong business operation at 100.00% Establishment
(Foshan) Province Province present
Business
Hangzhou Hangzhou, Hangzhou, Other technology combination not
55.00%
Shengyi Zhejiang Zhejiang promotion services under common
control
Engineering technical Business
Xi'an Long research and combination not
Xi'an, Shaanxi Xi'an, Shaanxi 55.00%
Temu experimental under common
development control
Business
Manufacturing of
Deqing Huzhou, combination not
Huzhou, Zhejiang medical instruments, 55.00%
Longterm Zhejiang under common
equipment and device
control
Business
Manufacturing of
United States combination not
US US medical instruments, 55.00%
Longterm under common
equipment and device
control
Xiufeng District, Xiufeng District,
Business
Guilin City, Guilin City,
Winner Rubber products combination not
Guangxi Zhuang Guangxi Zhuang 100.00%
Guilin industry under common
Autonomous Autonomous
control
Region Region
Business
Winner
Production and sales of combination not
Medical Changde, Hunan Changde, Hunan 68.70%
medical consumables under common
(Hunan)
control
Engineering technical Business
Ruian
research and combination not
Medical Changsha, Hunan Changsha, Hunan 68.70%
experimental under common
Device
development control
Business
Shenzhen City, Shenzhen City,
Junjian Sales of medical combination not
Guangdong Guangdong 100.00%
Medical consumables under common
Province Province
control
Difference between the shareholding ratio and the voting right ratio in the subsidiary: N/A
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: N/A
For the important structured entity included in the combination scope, the control basis is as follows: N/A
Basis for determining whether the Company is an agent or a principal: N/A
Other description:
(2) Important non-wholly owned subsidiary
Unit: yuan
Subsidiary Minority shareholding Current profits and Current dividends Ending balance of minority
name ratio losses attributable to declared to minority equity
279
minority shareholders shareholders
Difference between the shareholding ratio and the voting right ratio of the minority shareholders of the subsidiary: N/A
Other description:
(3) Main financial information of important non-wholly owned subsidiaries
Unit: yuan
Closing Balance Beginning balance
Subsidia Curren Curren
Non- Non- Total Non- Non- Total
ry name Curren current
Total t
current liabiliti
Curren
current
Total t
current liabiliti
t assets assets liabiliti t assets assets liabiliti
assets liabilities es assets liabilities es
es es
Unit: yuan
Amount incurred in current period Amount incurred in previous period
Subsidia Cash flow Cash flow
Total Total
ry name Operating from Operating from
Net profit comprehensi Net profit comprehensi
income financing income financing
ve income ve income
activities activities
Other description:
N/A
(4) Major restrictions on the use of enterprise group assets and the settlement of enterprise group debts
N/A
(5) Financial or other support provided to structured entity included in the consolidated financial statements
N/A
Other description:
2. Transactions in which the share of ownership interest in a subsidiary changes and the subsidiary is still
controlled
(1) Description of changes in the owner's equity share in the subsidiary
N/A
(2) Impact of transactions on minority shareholders' equity and owners' equities attributable to the owners of parent
company
Unit: yuan
Purchase cost / disposal consideration
-- Cash
-- Fair value of non-cash assets
Total purchase cost / disposal consideration
Less: The share of the net asset of a subsidiary calculated based on the proportion of equity acquired/disposed
Balance
Including: Capital reserve adjusted
280
2022 Annual Report
Surplus reserve adjusted
Undistributed profit adjusted
Other description:
3. Equity in joint venture arrangement or joint venture
(1) Important cooperative enterprises or joint ventures
Name of Shareholding ratio Accounting treatment
cooperative Main operation Registration Business method of investment in
enterprise or joint site place nature Direct Indirect cooperative enterprises or
venture joint ventures
Difference between the shareholding ratio and the voting right ratio in the cooperative enterprise or joint venture:
N/A
Basis for holding less than 20% of the voting rights but having a significant impact, or holding 20% or more of the voting
rights but not having a significant impact:
(2) Major Financial Information about Important Cooperative Enterprises
Unit: yuan
Ending balance/amount incurred Beginning balance/amount
in current period incurred in previous period
Current assets
Including: Cash and cash equivalents
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Minority equity
Attributable to the parent company shareholders' equity
Share of net assets by shareholding ratio
Adjustment items
-- Goodwill
-- Unrealized profit of internal transaction
-- Others
Book value of equity investments in joint ventures
Fair value of equity investments in joint ventures with
publicly quoted prices
Operating income
Financial expenses
Income tax expenses
Net profit
Net profit of discontinued operation
281
(continued)
Ending balance/amount incurred Beginning balance/amount
in current period incurred in previous period
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 Beginning balance/amount
in current period incurred in 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:
282
2022 Annual Report
(4) Summary of financial information of unimportant cooperative enterprises and joint ventures
Unit: yuan
Ending balance/amount incurred Beginning balance/amount
in current period incurred in previous period
Cooperative enterprise:
Total number of following items by shareholding ratio
- Joint venture:
Total book value of investment 21,642,696.16 16,949,801.24
Total number of following items by shareholding ratio
-- Net profit 4,697,834.75 3,525,570.83
-- Total comprehensive income 4,697,834.75 3,525,570.83
Other description:
(5) Significant restrictions on the ability of cooperative enterprises and joint ventures to transfer funds to the Company
N/A
(6) Excess losses of cooperative enterprise or joint venture
Unit: yuan
Unrecognized loss in current Accumulated unrecognized
Name of cooperative Accumulated unrecognized
period (or net profit shared losses at the end of current
enterprise or joint venture losses in the previous period
in current period) period
Other description:
N/A
(7) Unconfirmed commitments related to investment in cooperative enterprise
N/A
(8) Contingent liabilities related to investment in cooperative enterprise or joint venture
N/A
4. Important pooling of interests
Name of joint Shareholding ratio / shares 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:
N/A
283
If the joint operation is a separate entity, it shall be classified as the basis of joint operation:
Other description:
5. Equity in the structured entity that is not included in the consolidated financial statements
Description of structured entity not included in the consolidated financial statements
N/A
6. Others
None
X. Risks associated with financial instruments
The Company is exposed to various financial risks in the process of operation: credit risk, liquidity risk and market risk,
including exchange rate risk, interest rate risk and other price risk. The above financial instruments and the risk management
policies adopted by the Company to mitigate these risks are described below:
The Board of Directors is responsible for planning and establishing the Company's risk management structure, formulating
the Company's risk management policies and relevant guidelines, and supervising the implementation of risk management
measures. The Company has formulated risk management policies to identify and analyze the risks to which the Company is
exposed. These risk management policies specify specific risks, covering various aspects such as market risk, credit risk and
liquidity risk management. The Company regularly evaluates the changes in the market environment and the Company's
operating activities to determine whether to update the risk management policies and systems. The risk management of the
Company is carried out by the Risk Management Committee in accordance with the policies approved by the Board of
Directors. The Risk Management Committee identifies, evaluates, and avoids related risks through close cooperation with
other business departments of the Company. The internal audit department of the Company conducts regular audit on the risk
management control and procedures, and reported the audit results to the Audit Committee of the Company.
The Company disperses financial instrument risks through appropriate diversified investments and business portfolios, and
reduce risks concentrated in a single industry, specific region, or specific counterparty by formulating corresponding risk
management policies.
(I) Credit risk
Credit risk refers to the risk of financial loss to the Company due to the failure of the counterparty to fulfill its contractual
obligations.
The Company's credit risk mainly arises from monetary funds, notes receivable, accounts receivable, receivables financing,
contract assets, other receivables, debt investment, other debt investments and financial guarantee contracts, as well as debt
instrument investments and derivative financial assets measured at fair value through profit or loss and not included in the
impairment assessment scope. On the balance sheet date, the book value of the Company's financial assets represents its
maximum credit risk exposure;
The Company's monetary funds are mainly deposited in state-owned banks and other large and medium-sized listed banks
with high credit rating. The Company believes that there is no significant credit risk and almost cannot cause significant
losses caused by bank default.
In addition, for notes receivable, accounts receivable, receivables financing, contractual assets and other receivables, the
Company makes relevant policies to control credit risk exposure. The Company evaluates the customers' credit qualification
and sets the corresponding credit period based on the customer's financial status, the possibility of obtaining guarantee from a
third party, credit records and other factors such as current market conditions. The Company will regularly monitor
customers' credit records. For customers with poor credit records, the Company would urge payment in writing, shorten the
credit period or cancel the credit period, etc., to ensure that the overall credit risk of the Company is under control.
284
2022 Annual Report
(II) Liquidity risk
Liquidity risk refers to the risk of capital shortage when the Company performs the obligation of settlement by cash payment
or other financial assets.
The Company's policy is to ensure that there is sufficient cash to pay the debt due. Liquidity risk is centrally controlled by the
Financial Department of the Company. By monitoring cash balances, securities that can be turned into cash at any time, and
rolling forecasting of cash flows over the next 12 months, the Finance Department ensures that the Company has sufficient
funds to repay its debts under all reasonable projections, at the same time, it continuously monitors the compliance of the
provisions of the loan agreements, and obtained commitments from major financial institutions to provide sufficient standby
capital to meet short-term and long-term capital needs.
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 loans 2,295,218,930.85 2,295,218,930.85
Notes payable 24,760,000.00 24,760,000.00
Accounts payable 1,119,574,518.58 1,119,574,518.58
Other payables 570,843,242.88 570,843,242.88
Non-current liabilities
215,946,889.32 215,946,889.32
due within one year
Lease liabilities 160,958,289.43 204,071,723.77 365,030,013.20
Total 4,226,343,581.63 160,958,289.43 204,071,723.77 4,591,373,594.83
Closing balance of the previous year
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 payable 734,521,490.60 734,521,490.60
Other payables 443,946,028.46 443,946,028.46
Non-current liabilities
216,181,531.82 216,181,531.82
due within one year
Lease liabilities 189,493,128.55 242,054,434.14 431,547,562.69
Total 1,430,849,180.92 189,493,128.55 242,054,434.14 1,862,396,743.61
(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.
285
1. Interest rate risk
Interest rate risk refers to the risk that the fair value or future cash flow of financial instruments fluctuates due to the change
of market interest rate.
The interest bearing financial instruments with fixed and floating interest rates expose the Company to fair value interest rate
risk and cash flow interest rate risk, respectively. The Company determines the ratio of fixed rate and floating rate
instruments based on the market environment, and maintains an appropriate combination of fixed rate and floating rate
instruments through regular review and monitoring. If necessary, the Company will use interest rate swap instruments to
hedge interest rate risk.
On December 31, 2022, if the other variables remain unchanged, and the borrowing rate at the floating rate rises or falls by
100 basis points, the Company's net profit will decrease or increase by RMB 1,419,254.31 (on December 31, 2021: RMB
0.00). The management considers that 100 basis points reasonably reflects a reasonable range of possible changes in interest
rate over the next year.
2. Exchange rate risk
Exchange rate risk refers to the risk that the fair value or future cash flow of financial instruments fluctuates due to the
change of foreign exchange rate.
The Company continuously monitors foreign currency transactions and the scale of foreign currency assets and liabilities to
minimize foreign exchange risks. In addition, the Company may enter into forward foreign exchange contracts or currency
exchange contracts to achieve the purpose of avoiding the exchange rate risk. The Company has not signed any forward
foreign exchange contracts or currency swap contracts during the current period and the previous period.
The exchange rate risk faced by the Company mainly comes from financial assets and financial liabilities denominated in
USD. The amounts of foreign currency financial assets and foreign currency financial liabilities converted into RMB are
listed as follows:
Closing Balance
Item
USD EUR HKD Yen Ringgit Total
Foreign currency
financial assets
Cash and cash
327,441,909.50 2,522,237.95 32,278,138.80 5,101.83 87,921.71 362,335,309.79
equivalents
Accounts receivable 16,214,112.47 5,025,260.67 21,239,373.14
Other receivables 308,581.55 308,581.55
Subtotal 343,656,021.97 2,522,237.95 37,611,981.02 5,101.83 87,921.71 383,883,264.48
Foreign currency
financial liabilities
Accounts payable 6,492,463.42 1,708,517.51 8,200,980.93
Other payables 588,210.06 5,379,147.72 708,536.44 6,675,894.22
Subtotal 588,210.06 11,871,611.14 2,417,053.95 14,876,875.15
Net amount 343,067,811.91 2,522,237.95 25,740,369.88 5,101.83 (2,329,132.24) 369,006,389.33
On December 31, 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 RMB 16,092,001.76 (on
December 31, 2021: RMB 13,738,289.79). The management considers that 5% is a reasonable reflection of the reasonable
range of possible changes in RMB against USD / EUR / HKD / Yen / Ringgit.
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2022 Annual Report
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 Measurement of Measurement of
fair value at first fair value at fair value at third Total
level second level level
I. Continuous fair value measurement -- -- -- --
(I) Tradable financial assets 3,027,531,039.77 1,351,258,920.46 4,378,789,960.23
1. Financial assets measured with fair value
and with the changes included in current 3,027,531,039.77 1,351,258,920.46 4,378,789,960.23
profit and loss
(3) Derivative financial assets 3,027,531,039.77 3,027,531,039.77
◆
(4) Trust products 1,351,258,920.46 1,351,258,920.46
Receivables financing 93,093,113.79 93,093,113.79
Total assets continuously measured at fair
3,120,624,153.56 1,351,258,920.46 4,471,883,074.02
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
The input value used in the fair value measurement is divided into three levels.
The input value of the first level is the unadjusted quotation of the same assets or liabilities on the active market that can be
obtained on the measurement day.
The input value of the second level is the direct or indirect observable input value of related assets or liabilities other than the
input value of the first level.
The input value of the third level is the non-observable input value of the relevant assets or liabilities.
The level of the fair value measurement results was determined by the lowest level of the input value that is significant to the
measurement of fair value as a whole.
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
287
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. Others
XII. Related parties and connected transactions
1. Parent company of the Company
Shareholding ratio
Voting right ratio of
Parent company Registratio of the parent
Business nature Registered capital the parent company
name n place company in the
in the Company
Company
Winner Group Cayman Equity investment and HKD
68.10% 68.10%
Limited Islands management business 1,143,000.00
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: N/A
2. Subsidiaries of the Company
See Note “IX. Interests in other entities”.
3. Cooperative enterprises and joint ventures
See the note “IX. Interests in other entities” for important cooperative enterprises or joint ventures of the Company.
Other cooperative enterprises or joint ventures that made related party transactions with the Company in the current period, or
formed the balance of related party transactions with the Company in the previous periods are as follows:
Name of cooperative enterprise or joint venture Relationship with the Company
Chengdu Winner Joint venture
Hubei Xianchuang Technology Co., Ltd. Joint venture
Other description:
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2022 Annual Report
4. Situation of other related parties
Name of other related parties Relationship of other related parties with the Company
Glory Ray Holdings Limited A company controlled by the actual controller
A company controlled by the actual controller through Glory Ray
Glory Ray Limited
Holdings
Beijing Sequoia Xinyuan Equity Investment Center
Shareholder of the Company
(Limited Partnership)
Xiamen Leyuan Investment Partnership (Limited
Shareholder of the Company
Partnership)
Xiamen Yutong Investment Partnership (Limited
Shareholder of the Company
Partnership)
Xiamen Huikang Investment Partnership (Limited
Shareholder of the Company
Partnership)
Shenzhen Capital Group Co.,Ltd. Shareholder of the Company
Xiamen Zepeng Investment Partnership (Limited
Shareholder of the Company
Partnership)
Chengdu Winner Likang Medical Products Co., Ltd. Joint venture, with 49% equity hold by the Company
A company controlled by close family members of the Company's
Wuhan Zhuoling Packaging Co., Ltd.
key managers
Glory Ray Holdings Limited A company controlled by the actual controller
A company in which the Company's original independent director
Shenzhen Breo Technology Co., Ltd.
Liang Wenzhao as an independent director
A company in which the Company's original independent director
Shenzhen Ellassay Fashion Co., Ltd.
Zhou Xiaoxiong as an independent director
Li Jianquan Actual controller of the Company
Fang Xiuyuan Director, deputy general manager, chief financial officer
Xu Xiaodan Director
Guo Zhenwei Director
Peng Jianfeng Independent Director
Xie Jiawei Independent Director
Liu Ke Independent Director
Zhang Tingting Chairman of the Board of Supervisors
Wang Ying Supervisor
Liu Hua Employee supervisor
Chen Huixuan Secretary to the board of directors, deputy general manager
Zhang Li Deputy general manager
Original shareholder and original director of Winner Medical
Huang Jun
(Hunan)
A company in which Zheng Datian, Vice Chairman of Winner
Lixian SHRCB Rural Bank Co., Ltd.
Medical (Hunan), serves as a director
A company actually controlled by Wu Kangping, a shareholder of
Jingyi Biotechnology (Shanghai) Co., Ltd. Longterm Medical
289
(continued)
Name of other related parties Relationship of other related parties with the Company
Shenzhen Nine Stars Printing and Packaging Group A company controlled by the final controller of Winner Guilin
Co., Ltd. before merge
A company controlled by the actual controller of Junjian Medical
Shenzhen Junhesheng Technology Co., Ltd.
before merge
A company controlled by the actual controller of Junjian Medical
Shenzhen Shengtianning Medical Device Co., Ltd.
before merge
A company controlled by the actual controller of Junjian Medical
Shenzhen Zhengjun Medical Device Co., Ltd.
before merge
A company actually controlled by Wu Di, a shareholder of
Zhejiang Kanglidi Medical Supplies Co., Ltd.
Longterm Medical
A company actually controlled by Wu Di, a shareholder of
ZheJiang Longmed Medical Technology Co., Ltd.
Longterm Medical
A company actually controlled by Wu Kangping, a shareholder of
ZheJiang Longrising Medical New Materials Co., Ltd.
Longterm Medical
Controlling shareholder and actual controller of Junjian Medical
Zheng Junhui
before merger
Controlling shareholder of Junjian Medical before merger and its
Wu Kangping, Huang Lepei, Wu Di
current minority shareholder
Other description:
5. Connected transaction
(1) Connected transaction of purchases and sales of goods, provision and acceptance of services
Purchase of goods/acceptance of services
Unit: yuan
Whether
the Amount
Connected Amount incurred Approved
Related party transaction incurred in
transaction in current period transaction quota
quota is previous period
exceeded
Wuhan Zhuoling Packaging Co., Purchase of goods
77,258,887.85 No 35,219,394.72
Ltd. or services
Chengdu Winner Likang Medical Purchase of goods
563,725.61 No 280,008.49
Products Co., Ltd. or services
Shenzhen Breo Technology Co., Purchase of goods
No 84,650.44
Ltd. or services
Shenzhen Shengtianning Medical Purchase of goods
668,252.32 No
Device Co., Ltd. or services
Shenzhen Nine Stars Printing and Purchase of goods
352,151.87 No
Packaging Group Co., Ltd. or services
Shenzhen Zhengjun Medical Purchase of goods
139,551.39 No
Device Co., Ltd. or services
Zhejiang Kanglidi Medical Purchase of goods
643,678.38 No
Supplies Co., Ltd. or services
ZheJiang Longrising Medical New Purchase of goods
150,642.09 No
Materials Co., Ltd. or services
ZheJiang Longmed Medical Purchase of goods
149,844.78 No
Technology Co., Ltd. or services
290
2022 Annual Report
Sell of commodities/provision of labor service
Unit: yuan
Whether
Amount
the Amount
Connected Amount incurred incurred in
Related party transaction incurred in
transaction in current period previous
quota is previous period
period
exceeded
Chengdu Winner Likang Medical Sell of goods or
11,746,826.18 No 35,219,394.72
Products Co., Ltd. services
Sell of goods or
Shenzhen Ellassay Fashion Co., Ltd. 59,342.47 No 280,008.49
services
Sell of goods or
SCGC 130,787.61 No 84,650.44
services
Lixian SHRCB Rural Bank Co., Sell of goods or
3,893.81 No
Ltd. services
ZheJiang Longrising Medical New Sell of goods or
5,532.76 No
Materials Co., Ltd. services
ZheJiang Longmed Medical Sell of goods or
468,765.43 No
Technology Co., Ltd. services
Zhejiang Kanglidi Medical Supplies Sell of goods or
6,735,072.47 No
Co., Ltd. services
Shenzhen Shengtianning Medical Sell of goods or
9,121,976.34 No
Device Co., Ltd. services
Shenzhen Zhengjun Medical Device Sell of goods or
399,011.49 No
Co., Ltd. services
Related transaction of purchases and sales of goods, provision and acceptance of services
(2) Associated fiduciary management/contracting and entrusted management/subcontracting
Entrusted management / contracting of the Company:
Unit: yuan
Name of Name of Fiduciary / Fiduciary income /
Entrusted / Fiduciary / Pricing basis of
entrusting entrusting contracting contracting income
contracting contracting fiduciary income /
party / party / termination recognized in current
asset type start date contracting income
subcontractor contractor date period
Associated fiduciary / contracting: N/A
Entrusted management / subcontracting of the Company:
Unit: yuan
Name of Name of Entrusted / Fiduciary fee /
Entrusted / Entrusted / Pricing basis of
entrusting entrusting subcontractin subcontracting fee
subcontracting subcontractin fiduciary fee /
party / party / g termination recognized in current
asset type g start date subcontracting fee
subcontractor contractor date period
Associated management / subcontracting: N/A
(3) Related-party lease
The Company as the lessor:
291
Unit: yuan
Lease income recognized in Lease income recognized in
Name of lessee Type of leased assets
the current period the previous period
ZheJiang Longmed Medical
Plant 257,033.03
Technology Co., Ltd.
The Company as the lessee:
Unit: yuan
Simplified
processing of Variable lease
short-term leases payments that are Interest expenses
not included in the Right-of-use assets
and rental Rent paid incurred on lease
measurement of the increased
expenses of low- liabilities
Type of value asset leases lease liabilities (if
Name of
leased (if applicable) applicable)
lessor
assets
Amount Amount Amount Amount Amount Amount Amount Amount Amount Amount
incurred incurred incurred incurred incurre incurred incurred incurred incurred incurred
in in in in d 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: N/A
(4) Related-party guarantee
The Company as the guarantor
Unit: yuan
Amount Guarantee maturity Whether the guarantee
Secured party Guarantee start date
guaranteed date has been fulfilled
Wu Kangping, Huang Lepei 150,000,000.00 February 23, 2022 February 22, 2026 No
Wu Kangping, Huang Lepei 60,000,000.00 April 13, 2021 April 12, 2027 No
Wu Kangping 11,000,000.00 February 07, 2021 February 06, 2025 No
Huang Lepei 11,000,000.00 February 07, 2021 February 06, 2025 No
Wu Di 11,000,000.00 February 07, 2021 February 06, 2025 No
Wu Kangping 10,000,000.00 February 24, 2022 February 23, 2025 No
Huang Lepei 10,000,000.00 February 24, 2022 February 23, 2025 No
Zhejiang Kanglidi Medical
10,000,000.00 February 24, 2022 February 23, 2025 No
Supplies Co., Ltd.
The Company as the secured party
Unit: yuan
Amount Guarantee maturity Whether the guarantee
Guarantor Guarantee start date
guaranteed date has been fulfilled
Related-party guarantee
(5) Related party loan at call
Unit: yuan
Related party Borrowing amount Start date Maturity date Description
292
2022 Annual Report
Borrowing
Lending
(6) Asset transfer and debt restructuring of related party
Unit: yuan
Amount incurred in current Amount incurred in previous
Related party Connected transaction
period period
(7) Key management personnel remuneration
Unit: yuan
Amount incurred in current Amount incurred in previous
Item
period period
Key management personnel remuneration 13,446,315.05 11,225,549.33
(8) Other connected transactions
6. Accounts receivable and payable by related parties
(1) Receivables
Unit: yuan
Closing Balance Beginning balance
Project
Related party Provision for Provision for
name Book balance Book balance
bad debt bad debt
Accounts
receivable
Chengdu Winner Likang Medical 369,395.74 18,469.79 1,925,119.44 96,255.97
Products Co., Ltd.
SCGC 35,880.00 1,794.00
Jingyi Biotechnology (Shanghai) Co., 651,786.67 220,006.76
Ltd.
Shenzhen Shengtianning Medical 7,331,532.66 366,576.63
Device Co., Ltd.
Shenzhen Zhengjun Medical Device 1,762,022.32 88,101.12
Co., Ltd.
Zhejiang Kanglidi Medical Supplies 1,837,108.40 91,855.42
Co., Ltd.
ZheJiang Longmed Medical 144,673.40 7,233.67
Technology Co., Ltd.
ZheJiang Longrising Medical New 55,964.00 2,798.20
Materials Co., Ltd.
Advances to
suppliers
Shenzhen Shengtianning Medical 274,273.56
Device Co., Ltd.
Shenzhen Zhengjun Medical Device 1,170.00
Co., Ltd.
293
(2) Payables
Unit: yuan
Beginning book
Project name Related party Ending book balance
balance
Accounts
payable
Wuhan Zhuoling Packaging Co., Ltd. 23,113,608.45 17,557,893.52
Chengdu Winner Likang Medical Products Co., Ltd. 81,750.48 69,711.48
Shenzhen Nine Stars Printing and Packaging Group Co.,
194,545.00
Ltd.
Shenzhen Shengtianning Medical Device Co., Ltd. 9,219.64
Shenzhen Zhengjun Medical Device Co., Ltd. 2,964.00
Zhejiang Kanglidi Medical Supplies Co., Ltd. 93,378.17
ZheJiang Longmed Medical Technology Co., Ltd. 10,617.60
Other
payables
Huang Jun 4,490,583.41
Shenzhen Shengtianning Medical Device Co., Ltd. 470,799.92
Shenzhen Zhengjun Medical Device Co., Ltd. 134,199.16
Zheng Junhui 78,812,000.00
Contract
liabilities
SCGC 11,946.90
7. Related party commitment
8. Others
294
2022 Annual Report
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 during the 0.00
current period
Total amount of equity instruments
exercised by the Company during the 0.00
current period
Total amount of equity instruments
invalidated by the Company during the 0.00
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
Range of the exercise price of the
vested and become invalid. In case of the audited operating income in 2022 ≥ the
Company's stock options outstanding at
audited operating income in 2021 * (1+30%), the ownership proportion at the
the end of the period and the remaining
Company level is 100%; in case of the audited operating income in 2021 *
term of the contract
(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
None
outstanding at the end of the period and
the 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,
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
295
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
Vesting period Vesting ratio
arrangement
First vesting From the first trading day of 17 months from the date of the first grant to the last trading day
50%
period within 29 months from the date of the first grant
Second vesting From the first trading day of 29 months from the date of the first grant to the last trading day
50%
period 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
Vesting period Vesting ratio
arrangement
First vesting From the first trading day of 12 months from the date of reserved granting to the last trading
50%
period day within 24 months from the date of reserved granting
Second vesting From the first trading day of 24 months from the date of reserved granting to the last trading
50%
period 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.
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2022 Annual Report
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 other
Method for determining the fair value of equity
employee restricted stocks is determined by reference to the stock
instruments on the grant date
closing price on the grant date without taking into account the
liquidity discount.
Basis for the determination of the number of viable
None
equity instruments
Reasons for significant differences between the current
None
and previous estimates
Accumulated amount of equity-settled share-based
88,485,055.94
payments recorded in capital reserves
Total amount of expenses recognized by equity-settled
-3,373,485.57
share-based payments in current period
Other description:
The first vesting period shall become invalid if it falls to meet the performance conditions; The cotton section and some
medical section in the current period shall become invalid if subsidiaries fall to meet the standards.
3. Cash-settled share-based payments
Applicable √ Not applicable
4. Modification and termination of share-based payment
None
5. Others
None
XIV. Commitment and contingencies
1. Important commitment issues
Important commitments on balance sheet date
1. Important commitments on balance sheet date
(1) Large-scale outsourcing contracts that have been signed or are about to be performed and their financial implications
297
As of December 31, 2022, the outstanding large contracts between the Company or its subsidiaries signed and in the process
of being performed or to be performed are as follows:
Project name Amount
Winner Medical (Shenzhen) - Medical Industry Building 261,723,960.00
Winner Medical (Jiayu) - Building 1-4 in New Factory 105,176,000.00
Winner Medical (Jiayu) - Building 5-8 in New Factory 91,140,000.00
Winner Medical (Wuhan) - Automatic Warehouse in Phase II Plant 72,000,000.00
Winner Medical (Wuhan) - Phase II Plant Supporting Project (1-3# Sorting
67,000,000.00
Workshops)
Winner Guilin - Buildings in 1-3# Workshops 52,800,000.00
Winner Medical (Jingmen) - Automated Workshop (four floors) 39,669,908.28
Winner Medical (Jiayu) - Power Distribution EPC in Science and Technology
36,000,000.00
Industrial Park
Winner Medical (Jiayu) - New Factory - Spunlace Line 23,200,000.00
Winner Medical (Jiayu) - Automated Storage Engineering in Science and
20,588,000.00
Technology Industrial Park
Winner Medical (Jiayu) - Sewage Treatment System in New Factory 17,595,300.00
Winner Medical (Wuhan) - Housing Construction Project for Phase II R&D
14,266,508.00
Center
Winner Medical (Wuhan) - Reconstruction Project of Shift Building and
13,285,492.00
Canteen
Winner Medical (Huanggang) - Comprehensive Workshop Engineering 11,250,000.00
Winner Medical (Wuhan) - Workshop 1, Section 1 of Phase II Project 11,087,172.20
Winner Medical (Shenzhen) - Chengdu Wenjiang Plant Decoration 8,188,699.00
Winner Medical (Huanggang) - No.4 Packaging and Production Line for
5,875,000.00
Sanitary Pads
Winner Medical (Jiayu) - New Factory - Cotton Cleaner and Carding Machine 5,040,000.00
Total 855,886,039.48
2. Contingencies
(1) Important contingencies on balance sheet date
The Company has no significant contingencies to be disclosed as of December 31, 2022.
(2) Explanation is also required if the Company has no important contingencies to be disclosed
The Company has no important contingencies to be disclosed.
3. Others
None
298
2022 Annual Report
XV. Post-balance sheet events
1. Important non-adjustment items
Unit: yuan
Influence number of financial position and Reasons for influence number
Item Description
operating results cannot be estimated
2. Profit distribution
Unit: yuan
3. Sales return
None
4. Other post-balance sheet events
None
XVI. Other important issues
1. Correction of previous accounting errors
(1) Retrospective restatement
Unit: yuan
Content of accounting error Report item name of each affected comparison Cumulative
Processing procedures
correction period influence number
(2) Prospective application
Reason for adopting prospective
Content of accounting error correction Approval procedures
application
2. Debt restructuring
N/A
3. Assets replacement
(1) Exchange of non-monetary assets
N/A
(2) Other asset replacement
299
4. Pension plan
N/A
5. Discontinued operation
Unit: yuan
Profit from discontinued operations
Income tax
Item Income Cost Total profit Net profit attributable to the owners of parent
expenses
company
Other description:
N/A
6. Segment information
(1) Determination basis and accounting policy of reporting segment
According to the Company's internal organizational structure, management requirements and internal reporting system, two
reporting segments have been determined, respectively: medical consumables, 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 7,296,345,982.92 4,054,985,562.16 11,351,331,545.08
Operating costs 4,058,787,379.05 1,914,013,438.24 5,972,800,817.29
Assets impairment loss &
161,284,732.20 188,998,568.55 76,529,362.00 426,812,662.75
credit impairment loss
Depreciation expense and
137,251,606.74 282,186,779.25 419,438,385.99
amortization expense
Operating profit / loss 1,540,701,692.03 392,129,139.40 43,718,981.15 1,976,549,812.58
Non-operating income and
(57,043,716.25) (57,043,716.25)
expense
Assets and liabilities
Total assets 9,418,198,129.61 3,051,005,127.24 5,768,546,144.71 18,237,749,401.56
Total liabilities 2,035,387,904.83 1,144,334,334.03 2,875,259,156.25 6,054,981,395.11
300
2022 Annual Report
(3) If the Company has no reporting segments, or cannot disclose the total assets and total liabilities of each reporting
segment, the reasons shall be explained.
None
(4) Other description
None
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 Xinghe Real Estate Development Co., Ltd. (hereinafter referred to as “Xinghe
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.
(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: RMB 400 million; 2)
Property right exchange (relocation): the area of property right exchange (relocation) obtained by Party B shall be determined
at 40% of the gross floor area for sale based on the gross floor area for sale determined in the final approval of the special
planning of the renewal unit of this Project.
(3) Current progress
Up to now, Galaxy Real Estate has paid the first margin of RMB 50 million and the second advance compensation of RMB
100 million for demolition to the Company according to the agreement. The project was announced in September 2019, and
the project was approved in December 2019. It is now in the stage of special planning. 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 policies or
external reasons, 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.
301
2. Heyuan investment and construction project
(1) Problem background
In 2016, under the guidance and promotion of Shenzhen Longhua District Committee and District Government, the Company
plans to transfer part of the production and logistics functions to Heyuan Zijin Linjiang Industrial Park in response to the
policy of supporting Heyuan City as a counterpart of Shenzhen City. In May 2016, the Company and the People's
Government of Zijin County of Heyuan City signed the Agreement on Investment and Construction of Medical Package and
Cotton Household Goods Production Project (hereinafter referred to as the “Investment Agreement”), with the construction
land of the project covering 200,000 m2
After the agreement was signed and the Land Use Notice was obtained, the Company submitted the planning plan, project
application and approval form as required, and started the construction. In August 2016, Winner Medical (Heyuan) obtained
the Record Certificate of Enterprise Investment Projects in Guangdong Province issued by the Development and Reform
Bureau of Zijin County. In June 2017, Environmental Protection Bureau of Zijin County issued the Approval on the
Environmental Impact Report Form of the Construction Project of Winner Medical (Heyuan) Co., Ltd. In accordance with
the agreement, the Zijin County Government assisted in obtaining a series of licenses such as state-owned land use right
certificate and construction land planning permit.
After the project was signed and started construction, the government required all construction projects under construction in
Zijin Linjiang Industrial Park to stop due to land conflicts between the project site and the planned Heyuan East Station of
Jiangxi-Shenzhen High-speed Railway and the High-speed Railway New Town. Meanwhile, the relevant land use procedures
were suspended.
(2) Current progress
In June 2019, the Regulatory Detailed Planning and Constructional Detailed Urban Design of the Core Area of Heyuan
High-speed Railway New Town was published to the public from June 22, 2019 to July 22, 2019. According to the final
publicity content, it is determined that the square in front of Heyuan East Station of High-speed Railway, National Highway
205 and the High-speed Railway New Town overlap with the project land of Winner Medical (Heyuan).
In October 2019, the Company signed a tripartite agreement with the People's Government of Zijin County and the
Management Committee of Heyuan Jiangdong New District to clarify the overall disposal plan. The land used for Winner
Medical (Heyuan)'s project and its above-ground buildings will be recovered by the People's Government of Zijin County,
and the three parties agree to determine the amount of compensation through arbitration. The People's Government of Zijin
County paid RMB 30 million to the Company as the performance bond.
In November 2019, International Arbitration Court of Ganjiang New District issued the Award ((2019) G.G.Z.Zi No.095),
which confirmed the termination of the original Investment Agreement, and the People's Government of Zijin County shall
bear the attorney fees, legal costs and other expenses totaling RMB 2,655,320.00. The land transfer deposit of RMB 3 million
shall be returned to the Company and compensate for the economic loss of RMB 550 million. The People's Government of
Zijin County shall pay 50% of the amount before December 31, 2019 and 50% before February 29, 2020. As of December 31,
2020, the Company has received the land transfer deposit of RMB 3 million returned by the People's Government of Zijin
County and paid the compensation of RMB 328 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 Winner Medical (Wuhan), and the production of medical package
has been transferred to the Company's subsidiary Winner Medical (Chongyang). Winner Medical (Wuhan) and Winner
Medical (Chongyang) have sufficient capacity to undertake the aforementioned production, logistics and warehousing
business originally intended to be undertaken by Winner Medical (Heyuan). The above matters of Winner Medical (Heyuan)
have not caused significant adverse impact on the normal production and operation of the Company.
8. Others
None
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2022 Annual Report
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 Accruing
Proportio Accruing Book value Proportio Book value
Amount Amount Amount Amount proportio
n proportion n
n
Including:
Accounts
receivable
of provision
for bad debt 475,895,954.26 100.00% 21,764,624.41 4.57% 454,131,329.85 528,512,638.89 100.00% 26,295,000.03 4.98% 502,217,638.86
by
combinatio
n
Including:
Aging
analysis 429,616,144.67 90.28% 21,764,624.41 5.07% 407,851,520.26 521,018,955.26 98.58% 26,295,000.03 5.05% 494,723,955.23
method
Other
combinatio 46,279,809.59 9.72% 46,279,809.59 7,493,683.63 1.42% 7,493,683.63
n
Total 475,895,954.26 100.00% 21,764,624.41 4.57% 454,131,329.85 528,512,638.89 100.00% 26,295,000.03 4.98% 502,217,638.86
Provision for bad debt by combination:
Unit: yuan
Closing Balance
Name
Book balance Provision for bad debt Accruing proportion
Description of the basis for determining the combination:
Provision for bad debt by combination:
Unit: yuan
Closing Balance
Name
Book balance Provision for bad debt Accruing proportion
Description of the basis for determining the combination:
If the 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
303
Disclosure by aging
Unit: yuan
Aging Book balance
Within 1 year (including 1 year) 468,679,968.14
1~2 years 4,823,718.66
2~3 years 81,233.50
More than 3 years 2,311,033.96
3~4 years 168,509.20
4~5 years 1,609,931.76
More than 5 years 532,593.00
Total 475,895,954.26
(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 Others
reversed
Provision for bad
debt of accounts 26,295,000.03 7,720,528.06 11,978,909.38 271,994.30 21,764,624.41
receivable
Total 26,295,000.03 7,720,528.06 11,978,909.38 271,994.30 21,764,624.41
Where the amount of bad debt provision recovered or reversed is important:
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
Write-off of important accounts receivable:
Unit: yuan
Nature of accounts Amount written Reasons for Write-off procedures Whether the payments arise
Unit name
receivable off write-off performed from related transactions
Description of write-off accounts receivable:
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2022 Annual Report
(4) Accounts receivable with Top 5 ending balances by debtor
Unit: yuan
Ending balance of accounts Proportion in total other ending balance of Ending balance of bad
Unit name
receivable accounts receivable debt provision
First 20,789,828.23 4.37% 1,039,491.41
Second 19,433,438.68 4.08% 971,671.93
Third 16,772,838.16 3.52% 838,641.91
Fourth 15,428,180.67 3.24% 771,409.03
Fifth 10,684,541.47 2.25% 534,227.07
Total 83,108,827.21 17.46%
(5) Accounts receivable derecognized due to transfer of financial assets
N/A
(6) Amount of assets and liabilities formed by transferring accounts receivables and continuing involvement
N/A
Other description: N/A
2. Other receivables
Unit: yuan
Item Closing Balance Beginning balance
Other receivables 123,628,108.60 218,099,656.42
Total 123,628,108.60 218,099,656.42
(1) Interest receivable
1) Classification of interest receivable
Unit: yuan
Item Closing Balance Beginning balance
2) Important overdue interest
Unit: yuan
Whether there is impairment and its
Borrower Closing Balance Overdue time Overdue reason
judgment basis
Other description:
305
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
Reason for non- Whether there is impairment and
Project (or invested unit) Closing Balance Aging
recovery 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 construction project of Heyuan
224,655,320.00 238,655,320.00
Winner
Margin and deposit 3,941,268.30 5,370,048.01
Export drawback 7,187,293.68
Employee pretty cash 592,876.83 333,170.12
Intercourse funds with related parties 4,688,603.35
Others 2,426,136.82 2,795,640.07
Total 236,304,205.30 254,341,471.88
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2022 Annual Report
2) Provision for bad debt
Unit: yuan
Stage 2
Stage 3
Stage 1 Expected credit
Expected credit
Expected credit losses over the
Provision for bad debt losses over the entire Total
losses over the next entire duration
duration (with credit
12 months (without credit
impairment)
impairment)
Balance on January 1, 2022 36,241,815.46 36,241,815.46
Balance on January 1, 2022 in current
period
Accrual in current period 88,872,051.22 88,872,051.22
Reversal in current period 12,437,769.98 12,437,769.98
Balance on December 31, 2022 112,676,096.70 112,676,096.70
Changes in book balance with significant changes in the current period of provision for loss
Applicable √ Not applicable
Disclosure by aging
Unit: yuan
Aging Book balance
Within 1 year (including 1 year) 8,925,718.50
1~2 years 2,723,166.80
More than 3 years 224,655,320.00
3~4 years 224,655,320.00
Total 236,304,205.30
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
Class Beginning balance Recovered or Closing Balance
Accrual Write-off Others
reversed
Provision for
36,241,815.46 88,872,051.22 12,437,769.98 112,676,096.70
bad debt
Total 36,241,815.46 88,872,051.22 12,437,769.98 112,676,096.70
307
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
Nature of other Amount Reasons for Write-off procedures Whether the payments arise
Unit name
receivables written off write-off performed from 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 balance
bad debt provision
receivable
Receivables related to Heyuan
First 224,655,320.00 3-4 years 95.07% 112,327,660.00
project
Intercourse funds with related
Within 1
Second parties within the scope of 4,688,603.35 1.98%
year
consolidation
Third Margin and deposit 2,311,115.80 1-2 years 0.98% 115,555.79
Within 1
Fourth Employee loan 123,539.13 0.05% 6,176.96
year
Within 1
Fifth Employee loan 120,000.00 0.05% 6,000.00
year
Total 231,898,578.28 98.13% 112,455,392.75
6) Accounts receivable involving government subsidies
Unit: yuan
Name of government subsidy Estimated collection time, amount and
Unit name Closing Balance Ending aging
project basis
None
7) Other receivables derecognized due to transfer of financial assets
8) Amount of assets and liabilities formed by transferring other receivables and continuing involvement
Other description:
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2022 Annual Report
3. Long-term equity investment
Unit: yuan
Closing Balance Beginning balance
Item Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
Investment in
3,530,099,178.63 4,086,994.48 3,526,012,184.15 908,737,678.63 4,086,994.48 904,650,684.15
subsidiaries
Investment in
associated
21,642,696.16 21,642,696.16 16,949,801.24 16,949,801.24
enterprises and
joint enterprises
Total 3,551,741,874.79 4,086,994.48 3,547,654,880.31 925,687,479.87 4,086,994.48 921,600,485.39
(1) Investment in subsidiaries
Unit: yuan
Increase or decrease in current period Ending
Beginning Ending
balance of
Invested unit balance (book Further Capital Provision for Othe balance
impairment
value) investment reduction impairment rs (book value)
provision
Winner Medical
267,491,627.79 267,491,627.79
(Huanggang)
Winner Medical
27,242,761.31 27,242,761.31
(Jingmen)
Shenzhen
130,000,000.00 130,000,000.00
Purcotton
Winner Medical
33,629,806.08 33,629,806.08
(Chongyang)
Winner Medical
36,436,595.28 200,000,000.00 236,436,595.28
(Jiayu)
Winner Medical
39,697,276.28 39,697,276.28
(Tianmen)
Winner Medical
1,456,720.00 1,456,720.00
(Hong Kong)
Winner Medical
18,595,897.41 18,595,897.41
(Yichang)
Winner Medical
4,086,994.48
Malaysia
Winner Medical
100,000,000.00 100,000,000.00
(Heyuan)
Winner Medical
100,000,000.00 300,000,000.00 400,000,000.00
(Wuhan)
PureH2B 150,000,000.00 150,000,000.00
Pure HB
100,000.00 100,000.00
(Shanghai)
Longterm
727,540,000.00 727,540,000.00
Medical
Winner Guilin 450,000,000.00 450,000,000.00
Winner Medical
751,921,500.00 751,921,500.00
(Hunan)
Junjian Medical 192,000,000.00 192,000,000.00
Total 904,650,684.15 2,621,461,500.00 100,000.00 3,526,012,184.15 4,086,994.48
309
(2) Investment in cooperative enterprise and joint ventures
Unit: yuan
Ending balance of
Increase or decrease in current period
impairment provision
Investment Adjustme
Furth Declared
Capit gains and nt of Change Provisi
Beginning er payment of Ending
Invested al losses other s in on for Othe
balance (book inves cash balance (book
entity redu recognized by comprehe other impair rs
value) tmen dividends or value)
ction the equity nsive equity ment
t profits
method income
I. Joint
ventures
II. Cooperati
ve
enterprise
Chengdu
16,949,801.24 4,692,894.92 21,642,696.16
Winner
Subtotal 16,949,801.24 4,692,894.92 21,642,696.16
Total 16,949,801.24 4,692,894.92 21,642,696.16
(3) Other description
4. Operating income and cost
Unit: yuan
Amount incurred in current period Amount incurred in previous period
Item Income Cost Income Cost
Main business 6,424,434,990.51 4,145,092,045.28 3,750,575,739.60 2,431,548,447.53
Other businesses 100,457,781.31 16,415,328.66 46,506,912.98 6,176,043.52
Total 6,524,892,771.82 4,161,507,373.94 3,797,082,652.58 2,437,724,491.05
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
Including:
Type of contracts
Including:
310
2022 Annual Report
(continued)
Contract classification Segment 1 Segment 2 Total
Sorted by time of goods transfer
Including:
Sorted by contract duration
Including:
Sorted by sales channels
Including:
Total
Information related to performance obligations: none
Information related to the transaction price apportioned to the remaining performance obligations:
The amount of income corresponding to the performance obligations signed but not yet performed or completed at the end of
this reporting period is RMB 0.00, of which RMB 0.00 is expected to be recognized as revenue in year 0, RMB 0.00 is
expected to be recognized as revenue in year 0, and RMB 0.00 is expected to be recognized as revenue in year 0.
Other description:
5. Investment income
Unit: yuan
Amount incurred in current Amount incurred in
Item
period previous period
Long-term equity investment income checked by cost method 699,939,868.87
Long-term equity investment gains measured by employing the
4,692,894.92 3,525,570.83
equity method
Investment income from the disposal of tradable financial assets 6,708,135.26 70,324,759.75
Investment income from purchasing financial products 15,949,400.16 15,019,953.42
Total 727,290,299.21 88,870,284.00
6. Others
311
XVIII. Further Information
1. Statement of current non-recurring gain and loss
√ Applicable Not applicable
Unit: yuan
Item Amount Description
Profit and loss on disposal of non-current assets (39,993,220.64)
Government subsidies included into current profits and losses, except the government
subsidies which are closely related to the normal business operations of the Company
84,859,103.35
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 financial liabilities, as well as the investment income from 78,921,808.85
disposal of trading financial assets, trading financial liabilities, and salable financial
assets.
Income and expenditure other than those mentioned above (13,810,132.25)
Less: Amount affected by income tax 17,067,455.98
Amount of minority shareholders' equity affected 3,242,648.98
Total 89,667,454.35 --
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
Earnings Per Share
Weighted average
Reporting profit Basic EPS Diluted EPS
return on net assets
(yuan/share) (yuan/share)
Net profit attributable to common shareholders of the Company 14.89% 3.90 3.90
Net profit attributable to common shareholders of the Company
14.08% 3.69 3.69
after deduction of non-recurring profits and losses
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2022 Annual Report
3. Differences in Accounting Data under Domestic and Foreign Accounting Standards
(1) The difference between net profits and net assets in the 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 the financial statements disclosed according to the Overseas
Accounting Standards 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
None
4. Others
None
V.
313
