Semi-Annual Report 2022
Stock Code: 603605 Abbreviation: Proya
Bond Code: 113634 Bond Abbreviation: Proya convertible bond
Proya Cosmetics Co., Ltd.
Semi-Annual Report 2022
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Important Notes
I. The Board of Directors, Board of Supervisors, directors, supervisors and senior management
of the Company warrant that the content of the Semi-Annual Report is authentic, accurate
and complete, free from false records, misleading statements and major omissions, and shall
be jointly and severally liable therefore.
II. All directors of the Company attended the Board meeting.
III. The Semi-Annual Report has not been audited.
IV. HOU Juncheng, chairman of the Company, and WANG Li, CFO (and Head of the Accounting
Department) of the Company represent and warrant that the financial report in the
Semi-Annual Report is authentic, accurate and complete.
V. Profit distribution plan or plan for conversion of capital reserve to share capital approved by
the Board during the Reporting Period
No profit distribution plan or plan for conversion of capital reserve to share capital during the
Reporting Period.
VI. Risk declaration for the forward-looking statements
√ Applicable □ Not applicable
The Report contains forward-looking statements which involve the future plans, development
strategies, etc. of the Company, yet do not constitute substantive undertakings of the Company to
investors. Investors should exercise caution prior to making investment decisions.
VII. Are there any non-operating capital occupation by the controlling shareholder and its related
parties？
No
VIII. Is there any external guarantee provided in violation of the specified decision-making
procedures?
No
IX. Are the majority of the directors unable to warrant the authenticity, accuracy and
completeness of the Semi-Annual Report disclosed by the Company？
No
X. Disclosure of major risks
The Company has disclosed the existing risks in this Report. These risks are discussed in detail in (I)
Potential risks, V. Other disclosures, Section III Management Discussion and Analysis.
XI. Others
□ Applicable√ Not applicable
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Contents
Section I Definitions .......................................................................................................................... 4
Section II Company Profile and Key Financial Indicators ............................................................. 4
Section III Management Discussion and Analysis ............................................................................. 8
Section IV Corporate Governance ................................................................................................... 21
Section V Environmental and Corporate Social Responsibility ................................................... 23
Section VI Major Events ................................................................................................................... 25
Section VII Changes in Share Capital and Shareholders ................................................................ 52
Section VIII Information on Preference Shares ................................................................................. 59
Section IX Information on Bonds ..................................................................................................... 59
Section X Financial Report .............................................................................................................. 63
Financial statements signed and sealed by the legal representative, the CFO of the
Documents Company, and the head of accounting department
Available for Original copies of all documents and announcements of the Company publicly disclosed
Inspection in newspapers designated by China Securities Regulatory Commission during the
Reporting Period
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Section I Definitions
In this report, unless the context otherwise requires, the following terms shall have the following
meanings:
Definition
Proya Cosmetics, this Company or the Company refers to Proya Cosmetics Co., Ltd.
CSRC refers to China Securities Regulatory Commission
SSE refers to Shanghai Stock Exchange
Articles of Association refers to Articles of Association of Proya
Cosmetics Co., Ltd.
RMB/RMB ’0,000 refers to Renminbi Yuan/Renminbi 10,000 Yuan
Section II Company Profile and Key Financial Indicators
I. Company Information
Chinese name of the Company Proya Cosmetics Co., Ltd.
Abbreviation of the Chinese name 珀莱雅
English name of the Company Proya Cosmetics Co., Ltd.
Abbreviation of the English name Proya
Legal representative of the Company HOU Juncheng
II. Contact Details
Board Secretary Securities Affairs Representative
Name WANG Li WANG Xiaoyan
Contact address 10/F, Proya Building, No. 588 Xixi 10/F, Proya Building, No. 588 Xixi
Road, Xihu District, Hangzhou City, Road, Xihu District, Hangzhou
Zhejiang Province City, Zhejiang Province
Telephone 0571-87352850 0571-87352850
Fax 0571-87352813 0571-87352813
Email proyazq@proya.com proyazq@proya.com
III. Changes in General Information
Registered address No. 588, Xixi Road, Liuxia Neighborhood, Xihu
District, Hangzhou City, Zhejiang Province
Historical changes in the Company's registered For details, please see “Announcement on
address Revision of the Articles of Association and
Change in Business Registration” (Announcement
No. 2019-008) disclosed by the Company in the
designated information disclosure media on
February 27, 2019
Office address of the Company Proya Building, No.588 Xixi Road, Xihu District,
Hangzhou City, Zhejiang Province
Postal code of the office address 310023
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Company website http://www.proya-group.com
Email proyazq@proya.com
Index changes during the Reporting Period Not applicable
IV. Changes in Information Disclosure and Places for Inspection
Name of designated newspapers for information Shanghai Securities News, Securities Times
disclosure by the Company
Website for the publication of the Semi-Annual Report http://www.sse.com.cn
Place for inspection of the Semi-Annual Report of the Board of Director's Office, Proya Building,
Company No.588 Xixi Road, Xihu District, Hangzhou
City, Zhejiang Province
Index for query of changes during the Reporting Period Not applicable
V. Stock Overview
Stock class Listed on Stock abbreviation Stock code Stock abbreviation
prior to change
A share Shanghai Stock 珀莱雅 603605 None
Exchange
VI. Other Relevant Information
□ Applicable √ Not applicable
VII. Key Accounting Data and Financial Indicators of the Company
(I) Key accounting data
Unit: Yuan Currency: RMB
Reporting period Same period of Year-on-year
Key accounting data
(Jan - Jun) prior year change (%)
Operating income 2,625,943,244.29 1,917,718,497.60 36.93
Net profit attributable to shareholders of 296,939,515.54 226,101,313.86 31.33
the listed company
Net profit attributable to shareholders of 280,897,418.53 220,280,393.28 27.52
the listed company, after deducting
non-recurring gains or losses
Net cash flows from operating activities 713,782,130.38 266,175,578.82 168.16
End of the Year-on-year
End of prior year
Reporting Period change (%)
Net assets attributable to shareholders of 2,959,511,918.70 2,876,975,835.98 2.87
the listed company
Total assets 5,071,158,684.26 4,633,049,783.03 9.46
(II) Key financial indicators
In the Reporting
Same period of Year-on-year
Key financial indicators Period
prior year change (%)
(Jan - Jun)
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Basic EPS (RMB/share) 1.06 1.13 -6.19
Diluted EPS (RMB/share) 1.04 1.12 -7.14
Basic EPS after deducting non-recurring 1.00 1.10 -9.09
gains or losses (RMB/share)
Weighted average ROE (%) 10.10 9.10 Up by 1
percentage point
Weighted average ROE after deducting 9.56 8.86 Up by 0.7
non-recurring gains or losses (%) percentage points
Accounts receivable turnover rate 49.40 16.71 195.63
(times/year)
Inventory turnover rate (times/year) 3.41 3.37 1.19
Notes to key accounting data and financial indicators
√ Applicable □ Not applicable
1. The year-on-year decrease in the three financial indicators namely basic earnings per share, diluted
earnings per share and basic earnings per share after deducting non-recurring gains or losses, is due
to the increase of 80,403,986 shares by issuing 4 shares for every 10 shares to all shareholders
through capitalization of the capital reserve in accordance with the resolution of the Fifth Meeting
of the Third Session of the Board of Directors of the Company in 2022 and the resolution of the
Annual General Meeting of Shareholders in 2021.
2. The year-on-year increase of 195.63% in the accounts receivable turnover rate is mainly attributed
to: (1) revenue in H1 2022 increased by 36.93% YOY; (2) accounts receivable as of the end of H1
2022 decreased by RMB64.62 million or 46.62% from the beginning of the year; thus increasing
accounts receivable turnover rate.
VIII. Differences in Accounting Data under Chinese and International Accounting Standards
□ Applicable √ Not applicable
IX. Items and Amounts of Non-recurring Profit and Loss
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Non-recurring profit and loss item Amount Notes (if applicable)
Gain or loss on disposal of non-current assets
Tax refund or reduction approved beyond authority or
without official approval or on an occasional basis
Government grants as included in the profit or loss of
current period (note: Government grants that are closely
related to the normal business, in compliance with the 20,440,098.37
relevant policies and continuously entitled with specific
amount according to certain standards are not included)
Fund occupation fees charged from non-financial
businesses included in the current profit and loss
Gains arising from investment costs for acquisition of
subsidiaries, associates and joint ventures less than the
fair values of attributable identifiable net assets of the
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invested entity at the time of acquisition
Gain and loss on non-monetary assets exchange
Gain and loss on authorizing others to invest or manage
assets
Provisions for various asset impairments due to force
majeure factors such as natural disasters
Gain and loss on restructuring of debts
Corporate restructuring expenses, such as re-settlement
expenses and integration cost
Profit and loss in excess of the fair value generated from
obviously unfairly priced transactions
Net profit and loss of subsidiaries generated from the
merger of companies under common control from the
beginning of the period to the date of merger
Profit and loss arising from contingent events unrelated
to the Company's normal operations
Profit and loss from changes in fair value arising from
financial assets held for trading, derivative financial
assets, financial liabilities held for trading and derivative
financial liabilities, and investment gain from disposal of
financial assets held for trading, derivative financial
assets, financial liabilities held for trading, derivative
financial liabilities and other debt investments, except for
effective hedging related to the Company's normal
operations
Reversal of provision for impairment of receivables and
contract assets individually tested for impairment
Profit and loss from entrusted loans
Profit and loss arising from changes in the fair value of
investment property subsequently measured with the fair
value model
Impact of one-time adjustments on the current profit and
loss according to the requirements of tax and accounting
laws and regulations on the current profit and loss
Custody fee income from entrusted operations
Other non-operating revenue and expenses other than the
281,474.51
said items
Other profit and loss items under the definition of
non-recurring profit and loss
Less: Income tax impact 3,609,209.54
Impact of minority shareholders' equity (after tax) 1,070,266.33
Total 16,042,097.01
Explanation of non-recurring profit and loss items listed in the Explanatory Announcement on
Information Disclosure for Companies Offering Their Securities to the Public No.1--Non-recurring
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Gains and Losses as recurring gain and loss items.
□ Applicable √ Not applicable
X. Others
□ Applicable√ Not applicable
Section III Management Discussion and Analysis
I. Description of the Industry in Which the Company Operates and Primary Businesses of the
Company during the Reporting Period
(I) Primary businesses and products
The Company is committed to building a new domestic cosmetics industry platform, and is primarily
engaged in R&D, production and sales of cosmetic products. Main brands owned by the Company
include Proya, TIMAGE, Off&Relax, Hapsode, CORRECTORS, UZRO and Hanya. The Company's
own brands cover fields such as popular skincare, makeup, body & hair, and high-efficiency skincare:
1. Popular exquisite skincare
(1) Proya, focusing on skincare technology, is designed for young white-collar female customers. Its
products are generally priced between RMB200-400, and sold both online and offline.
(2) Hapsode, customized for young skin, focuses on college students and other young female customers.
Its products are generally priced between RMB50-100, and mainly sold online.
2. Makeup
TIMAGE, a professional make-up brand with a new Chinese style.Its products are generally priced
between RMB150-200, and only sold online.
3. Body & hair
Off&Relax, developed and produced in Japan, focuses on scalp care. Its products are generally priced
between RMB150-200, and mainly sold online.
4. High-efficiency skincare
CORRECTORS, a high-efficiency skincare brand, is generally priced at RMB260-600, and is only sold
online.
(II) Business models
1. Sales models
Mainly online sales, supplemented by offline sales.
Online sales are mainly conducted through direct sales and distribution. Direct sales are mainly based on
platforms such as Tmall, TikTok, JD, Kwai, and Pinduoduo, and distribution is based on platforms
including Taobao, JD, and Vipshop.
Offline sales are mainly operated through dealers. Channels include cosmetics franchise stores,
supermarkets, and single-brand stores.
2. Production/R&D models
Self-production is the main production model of the Company, supplemented by OEM production. The
skincare products of the Company are self-produced and OEM-produced. The Company has built
skincare and make-up factories.
Independent R&D is the main R&D model of the Company, supplemented by
industry-university-research cooperation. The Company maintains R&D cooperation with front-end
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research institutions and high-quality raw material suppliers including Institute of Microbiology,
Chinese Academy of Sciences, Zhejiang University of Technology, BASF China, Ashland China, DSM
Shanghai, LIPOTRUE S.L., and Shenzhen Siyomicro Bio-tech.
(III) Industry overview
According to the Guidelines for the Industry Classification of Listed Companies by the CSRC, the
Company falls under chemical raw material and chemical product manufacturing (classification code:
C26); according to Industrial Classifications and Codes of National Economic Activities (GB/T
4754-2011), the Company falls under manufacturing of daily chemical products (C268) and further
under manufacture of cosmetics (C2682).
According to the National Bureau of Statistics, from January to June 2022, the total retail sales of
consumer goods reached RMB21,043.2 billion, a YOY decrease of 0.7%; the total retail sales of
cosmetics reached RMB190.5 billion, a YOY decrease of 2.5% (retail sales value from the businesses
above a certain size).
II. Analysis of Core Competitiveness during the Reporting Period
√ Applicable □ Not applicable
Where our core strength lies:
We establish a precise operation management system highlighting "R&D, products, contents,
operations". We keep developing and improving a portfolio of "hero products" based on efforts in
improving independent R&D capabilities and integrating global R&D resources and our keen insight
into consumer needs. We build a self-driven organization highlighting
"culture-strategy-mechanism-talents". In addition, we develop a value-creation-oriented operation and
performance management mechanism based on corporate culture and strategy to increase vitality and
efficiency of our organization.
III. Business Discussion and Analysis
(I) Finance analysis
1. Year-on-year growth in operating income
Operating income amounted to RMB2.626 billion, a YOY increase of 36.93%
Of which: primary operating income of RMB2.616 billion, a YOY increase of 36.87%
other operating revenue of RMB10.02 million
Primary operating income:
(1) Breakdown by channel
Change
Change Change Change
Amount in H1 Proportion Proportion Proportion Proportion
in 2021 in 2020 in 2019
By channel (RMB100 2022 of H1 of 2021 of 2020 of 2019
YOY YOY YOY
million) YOY 2022 (%) (%) (%) (%)
(%) (%) (%)
(%)
Direct sales 17.46 60.00 76.16 79.63 88.25 66.73 60.66 42.45 28.42
Online Distribution 5.63 24.21 8.56 34.36 37.95 21.54 24.27 27.56 24.67
Subtotal 23.09 49.49 49.54 58.59 60.97 88.27 84.93 70.01 53.09
Offline Cosmetics 2.28 -14.79 -40.52 -19.28 4.42 8.73 10.88 22.56 33.61
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stores
Others 0.79 -20.45 -30.50 -32.81 26.33 3.00 4.19 7.43 13.30
Subtotal 3.07 -16.31 -38.03 -23.12 9.82 11.73 15.07 29.99 46.91
Total 26.16 36.87 23.28 20.26 32.11 100.00 100.00 100.00 100.00
Note: The percentage of sales from each channel is the proportion of its sales in primary operating
revenue.
(2) Breakdown by brand
Change
Change Change Change
Amount in H1 Proportion Proportion Proportion Proportion
in 2021 in 2020 in 2019
By brand (RMB100 2022 of H1 of 2021 of 2020 of 2019
YOY YOY YOY
million) YOY 2022 (%) (%) (%) (%)
(%) (%) (%)
(%)
Proya 21.28 43.12 28.25 12.43 26.81 81.36 82.87 79.66 85.21
Own Timage 2.32 110.57 103.48 - - 8.87 5.33 3.23 0.00
brands Other brands 2.06 19.70 -5.96 36.91 19.74 7.87 8.85 11.59 10.18
Subtotal 25.66 38.50 26.63 19.11 26.02 98.10 97.05 94.48 95.39
Cross-border
Agency
agency 0.50 -14.89 -34.04 44.09 - 1.90 2.95 5.52 4.61
brands
brands
Total 26.16 36.87 23.28 20.26 32.11 100.00 100.00 100.00 100.00
Note: The percentage of sales of each brand is the proportion of its sales in primary operating revenue.
(3) Breakdown by category
Change
Change Change Change
Amount in H1 Proportion Proportion Proportion Proportion
By in 2021 in 2020 in 2019
(RMB100 2022 of H1 of 2021 of 2020 of 2019
category YOY YOY YOY
million) YOY 2022 (%) (%) (%) (%)
(%) (%) (%)
(%)
Skincare
(including 22.64 38.91 22.70 11.38 24.89 86.54 86.10 86.50 93.40
cleansing)
Make-up 3.52 30.03 32.97 181.91 482.43 13.46 13.38 12.41 5.29
Others -100.00 -41.05 0.47 - 0.52 1.09 1.31
Total 26.16 36.87 23.28 20.26 32.11 100.00 100.00 100.00 100.00
2. Year-on-year growth in net profit
The net profit attributable to shareholders of the listed company amounted to RMB297 million, a YOY
increase of 31.33%
The net profit attributable to shareholders of the listed company after deducting non-recurring profits or
losses amounted to RMB281 million, a YOY increase of 27.52%
Indicator H1 2022 2021 H1 2021 2020 2019 Notes
1. Net profit margin 11.75% 12.02% 10.88% 12.04% 11.73%
2. Gross profit margin 68.12% 66.46% 63.73% 63.55% 63.96% 1. Increased percentage of
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online sales; 2.Hero
product strategy.
3. Sales expense ratio 42.53% 42.98% 42.09% 39.90% 39.16%
Of which: image
34.84% 36.12% 33.95% 32.68% 26.86%
promotion fee rate
4. Administrative
4.84% 5.12% 6.06% 5.44% 6.25%
expense ratio
R&D expenses increased
by RMB29.70 million
YOY. The parent
company's R&D expense
5. R&D expense ratio 2.33% 1.65% 1.64% 1.92% 2.39%
ratio in H1 2022 was
4.69% (compared with
3.76% for the same period
last year).
Primary reasons: (1)
Revenue in H1 2022
increased by 36.93%
YOY; (2) Accounts
6. Accounts receivable as of the end of
receivable turnover 49.40 21.88 16.71 15.53 21.74 H1 2022 decreased by
rate (times/year) RMB64.62 million or
46.62% from the
beginning of the year; thus
increasing the accounts
receivable turnover rate.
7. Accounts
receivable turnover 7.29 16.45 21.54 23.18 16.56
days (days)
8. Inventory turnover
3.41 3.39 3.37 3.50 4.12
rate (times/year)
9. Inventory turnover
105.57 106.19 106.82 102.86 87.38
days (days)
(II) Discussion and analysis of business conditions
1. New product strategy
Proya:
During the Reporting Period, we comprehensively optimized the product structure, continued to deepen
the “hero product strategy”, and built a core product family to create a stronger brand.
(1) Based on the increasingly mature digital management of the whole product life cycle, The Proya
brand continuously upgraded and expanded the matrix of the existing hero products and related series,
and launched a brand new series of hero products. We continuously strengthened the industry position of
core hero products such as Deep Ocean Energy Essence, Elastic Brightening Youth Essence, PROYA
Ultimate Repairing Ampoules (skin repairing), Elastic Brightening Youth Dual-Action Mask and Deep
Ocean Energy Wrinkless and Firming Eye Cream, and upgraded the ingredients, formulas, and
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packaging materials of Deep Ocean Energy Wrinkless and Firming Moisture Cream and Elastic
Brightening Youth Activating Eye Cream to launch version 2.0. Moreover, we focused on creating new
hero products such as PROYA Ultimate Brightening Ampoules Serum (vitamin C serum), Advanced
Original Repair Concentrating Essence Cream and Advanced Original Soothing Concentrating Mask. By
enhancing the competitiveness of hero products and building a portfolio of different efficacy skincare
products, we gradually built up product reputation and thus enhanced user loyalty and brand reputation.
(2) We conducted more precise strategic adjustments in promotion, providing consumers with more
valuable content to guide them in decision-making; optimized the whole process in terms of consumer
reach, order fulfillment and after-sales; and deepened partnerships and broadened cooperation with
influencers, identified more product use scenarios and selling points, and formed two-way and in-depth
communication with target users. With our strong product competitiveness and a more efficient
advertising model, Proya is shaping up to be a national product trendsetter and a new benchmark in the
"scientific skin care" industry.
Timage:
During the Reporting Period, Timage continued to build its portfolio of facial makeup products and
strengthen the consumer impression of the “professional makeup artist” with a number of innovative
new products.
(1) In terms of product types, we extended our brand strength in facial makeup and created two
sub-segments, “contour” and “base makeup”, based on the major category of facial makeup. With our
high-light powder hero products, “tri-color contouring compact” and “duo high-light powder compact”,
we led a robust brand growth, deepened the penetration of such a product type in the market, whilst also
taking a share of the market; as for the base makeup product line, we launched a Timage tri-color
concealer compact and setting sprays designed for different skin types, deepening the brand image of the
“professional”. In terms of product function, design and usage, from primer to foundation, and further on
to concealer and powder, our goal is for Timage products to be part of every makeup step for users.
(2) Leveraging the high-quality content of the personal IP of the founder “Tang Yi", we promoted the
recognition of the product’s professionalism among consumers, thus enhancing consumer reach. In
respect of product marketing, we promoted the confidence in Chinese products and highlighted the core
of “Chinese makeup, original beauty” of our products combining product function, makeup effect and
technique. In addition, we further developed and tapped into the Generation Z market. We selected
influencers that fit the brand’s tone to produce promotional content recognized by the target users, and
delivered the content in a multi-dimensional manner, so as to efficiently and precisely shape the brand
image of Timage as China's “professional makeup artist”.
2. New marketing strategy
Proya:
During the Reporting Period, Proya continuously built its brand around the “spirit of discovery”,
focusing on important social issues such as gender equality and mental health, and intimate relationships,
and creating long-term brand content and mass communication on issues that are closely related to the
target audience, such as the growth of young people. The Company carried out brand marketing events
as follows:
(1) “Next Stop, Decisive Turn” in January. In this event we held a poetry exhibition in a subway station,
conveying good wishes for the New Year through poetry to the audience.
(2) “Gender is not the Borderline, Prejudice is” on Women’s Day in March. In this event we once again
pursued gender equality, and invited WANG Shuang, a national female soccer player and the Nanxing
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Hexingtang Lion Dancing Team to participate in a documentary recording, striving for the vision of
“Towards a Gender-equal World” using a practical approach. In addition, we cooperated with 7 brands to
raise our voice.
(3) “Visible Only to Moms” on Mother’s Day in May. In this event we did not only focus on “moms”,
one of our brand’s key audience groups, we also extended our attitude and narrative towards all family
members. We invited experts and scholars from different fields to participate in the discussion of the
topic, which differs from our previous event, “Be Thankful to Mother”. “Visible Only to Moms”
triggered a broader discussion on “family division of labor and responsibility”.
Timage:
During the Reporting Period, Timage comprehensively deepened the brand recognition of “Chinese
makeup, original beauty” and communicated with Chinese female consumers with its distinctive
professionalism and aesthetic attitude. Through a series of activities such as cross-field cooperation,
cultural celebrity artists and brand events, we completed our brand strategy for this phase, enhanced
brand image and figurative brand cognition, and conveyed our commitment to social responsibility. The
Company carried out brand marketing events as follows:
(1) “Unfiltered You” on Women’s Day in March. In this event we invited LUO Yang, an international
female photography artist, to export the viewpoint of “original beauty”, raise the same voice as we do,
interpreting original beauty from a female artist's perspective and presenting the brand concept and
aesthetic tone of original beauty with “filter” as the starting point of insight.
(2) “Witness the Original Beauty” in April. In this event we launched cross-field cooperation with
HIMO, a professional photography company, to create “original beauty” ID photo makeup. HIMO set
up exclusive makeup tables in its 180 offline stores, placed large screen ads offline in 5 major cities, and
created trending topics online to encourage consumers to share their makeup before and after pictures
during ID photo shoots over the years.
(3) “Life Turns Out to be Beautiful” in June. In this event we started a topic online with One Way Street
Library in which many literary artists, music critics, directors, writers and screenwriters shared and
exported positive contents through their own experiences in the form of words and photos, etc. Timage
also made scented candles and sent them to consumers in the areas affected by the pandemic, hoping to
rekindle their passion for life.
3. New channel strategy
Online:
(1) Tmall flagship store:
During the Reporting Period, we continued to consolidate the “hero product” portfolio strategy and
create superstar hero products of the brand; implemented precise operation for store live stream;
deepened the running of store membership to significantly improve the member repurchase rate and
premium capacity; targeted users more carefully to improve the brand's share among first-and
second-tier brands and the proportion of high-value users; and continued to optimize service experience
and strengthen full-contact services to raise reputation among customers. During “38”(Women's Day)
and the “618” shopping festivals, the gross merchandise volume (GMV) of Proya ranked fifth on Tmall
Beauty, as well as for Chinese products on Tmall Beauty, was ranked first.
(2) TikTok and Kwai:
During the Reporting Period, we continued seize the opportunities that self live streaming presents,
opened hero product portfolio accounts and transformed hero product operations on TikTok; conducted
annual frame cooperation with high-quality live streamers and in-depth cooperation with high-quality
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vertical field influencers, fully leveraging the combined effect of promotion and sales; and enhanced
member and fan traffic on TikTok to increase sales of hero products and achieve continuous post-click
business, building a healthy sales structure within the channel. During the “618” shopping festival, the
GMV of Proya ranked first among Chinese Beauty products on TikTok.
(3) JD:
During the Reporting Period, we implemented the “hero product” strategy and further increased the
proportion of sales of hero products through multi-platform operations; rebuilt the membership system
to enhance the store's capability to attract new customers and promote repurchasing among previous
buyers; and strengthened the precise operation in various traffic channels such as in-site search, paid
promotion and self live stream. During the “618” shopping festival, the GMV of Proya ranked first
among Chinese Beauty products on JD.
Offline:
(1) Cosmetics store channels: We classified our stores by sales level and city level, and provided
different service content and activity programs according to different types of customer profiles, thus
making sales more precise. We strengthened sales process management, increased business skills
training, and tracked and reviewed the products for sale and sales process of various stores monthly, thus
improving sales efficiency.
(2) Supermarket channels: We enhanced cooperation with key retail systems and key stores. Driven by
brand power and product power, we continued to explore new traffic, expand the young user base, and
further iterated the store image. We also standardized the store experience process and provided
excellent services to retain customers and increase repurchases, maximizing traffic sources near offline
stores, reducing costs and increasing efficiency.
4. New organizational strategy
(1) Organization: We constantly optimized our organizational structure, built a management model
integrating a product and delivery capability-focused “middle platform” and an agile “front, continued to
deepen the application of digital technology, and promoted the incubation and growth of new business
through platform and digital empowerment.
(2) Talent: We continuously promoted the talent supply chain mechanism for young and international
talents based on business needs, increased the introduction of R&D and IT talents, accurately and
rapidly identified, and efficiently utilized talents, and gradually built a dynamic, competent and
self-driven talent team through practical tasks and the combination of practical tasks and trainings.
Through dual-channel management, we enhanced talent density, promoted talent development and built
a talent pipeline.
(3) System: We deepened the performance culture featuring high investment, high performance and high
returns; enhanced the performance management system emphasizing targets, process and results; and
based on our business strategy, flexibly used the diversified incentive system covering short-term
(quarterly performance and project incentives), middle-term (annual performance dividends) and
long-term (equity incentives and partnership) incentives. We comprehensively applied the project
system and built a three-level project management system, including the company level, the divisional
level and the departmental level, to work on the end-to-end main value chain process building and
internal control projects and continue to consolidate organizational capabilities.
5. New R&D strategy:
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(1) R&D progress: During the Reporting Period, Proya Cosmetics International Academy of sciences
has gradually built laboratories for fermentation, plant extraction and organic synthesis to further
enhance the independent development capability of core efficacy ingredients, while actively developing
basic skin research and developing, validating and applying in vitro evaluation methodology; and our
Proya Hangzhou Longwu R&D Center, which will focus on core ingredient development, scientific
research on skin and cosmetic formula development, and product efficacy evaluation, is currently under
construction,.
(2) Patents: During the Reporting Period, the Company obtained 12 nationally authorized invention
patents and applied for 17 new invention patents and 4 design patents. As of the end of the Reporting
Period, the Company had 104 nationally authorized invention patents.
(3) Standards building: As the first drafter, we published a group standard “Method for assessment on
the hair anagen/telogen ratio” TZHCA 017-2022.
(4) Awards and Achievements: The Company was awarded the honorary title of “Hangzhou Kunpeng
Enterprise” in June; and at the IFSCC International Cosmetic Science Conference, the Company
presented a number of its scientific achievements.
(5) Strategic cooperation: The Company entered into a strategic cooperation agreement with Zhejiang
Peptites Biotech Co., Ltd. to cooperate in the development of peptides for cosmetics.
6. New supply chain guarantee:
(1) During the Reporting Period, against the impact of the domestic pandemic and the international raw
material shortage, the Company's supply chain system integrated data and information from various
information platforms, measured raw material demand in a timely manner according to terminal demand,
and synchronized information on suppliers' inventory, procurement cycle and logistics shipments. The
information was finally delivered to various departments accurately and quickly through the supply
chain information platform, which handled terminal sales and production capacity very well and
provided the support for the Company's 618 promotion.
(2) The Huzhou Production Base Expansion Project is progressing smoothly; the Logistics Center and
the Information Department jointly created the TMS logistics transportation management system to
realize the digital management of the entire logistics chain in terms of digital vehicle scheduling, loading,
in-transit tracking, etc.
(3) The Huzhou Factory is implementing the supply chain green recycling box project. In this project,
items for recycling are collected around the entire route in the factory and the third-party logistics
warehouses, creating the first green recycling benchmark for packaging boxes in the domestic cosmetics
industry.
(4) The supply chain procurement department, in conjunction with suppliers, implements sustainable
packaging, with significant results in plastic reduction, use of environment-friendly materials, packaging
reduction, etc. In the packaging of certain hero products, some plastics are replaced with aluminum to
reduce the use of plastic.
Material changes in business conditions of the Company during the Reporting Period and matters
that occurred during the Reporting Period that had and are expected to have significant impacts
on business conditions of the Company
□ Applicable √ Not applicable
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IV. Overview of Business Operations during the Reporting Period
(I) Analysis of primary business
1 Analysis of changes in items related to financial statements
Unit: Yuan Currency: RMB
Amount for the
Amount for the
Item same period in the Change (%)
current period
previous year
Operating revenue 2,625,943,244.29 1,917,718,497.60 36.93
Operating costs 837,034,743.80 695,558,289.19 20.34
Selling expenses 1,116,921,650.63 807,204,631.76 38.37
General and administrative 127,140,154.83 116,191,173.05 9.42
expenses
Financial expenses -14,804,776.98 -1,864,128.79 Not applicable
R&D expenses 61,066,694.07 31,371,344.46 94.66
Net cash flows from operating 713,782,130.38 266,175,578.82 168.16
activities
Net cash flows from investing -176,651,474.45 -190,628,459.71 Not applicable
activities
Net cash flow from financing -220,919,542.24 -248,631,053.62 Not applicable
activities
Reasons for changes in operating revenue: Mainly due to increased online sales YOY.
Reasons for change in operating costs: Mainly due to increased operating revenue.
Reasons for changes in selling expenses: Selling expenses for H1 2022 amounted to RMB1.117 billion,
with a rate of 42.53% (42.09% for the same period last year) which basically remains unchanged.
Selling expenses increased by RMB310 million, a YOY increase of 38.37%, which is mainly a
corresponding increase as a result of revenue growth. Of this, image promotion expenses increased by
RMB264 million， a YOY increase of 40.52%, mainly due to the increase in image promotion expenses
for new brand incubation (e.g. TIMAGE, OR) and re-branding (e.g. Hapsode).
Reasons for changes in general and administrative expenses: General and administrative expenses
for H1 2022 amounted to RMB127 million, with a rate of 4.84% (6.06% for the same period last year).
The decrease in the rate was mainly due to the higher YOY growth rate of revenue than that of
administrative expenses. Administrative expenses increased by RMB10.95 million，a YOY increase of
9.42%, mainly due to the YOY increase in employee compensation.
Reasons for changes in financial expenses: Mainly due to the YOY increase in interest income.
Reasons for changes in R&D expenses: Mainly due to the increase in R&D investment, resulting in
increased R&D labor costs, direct investment and outsourcing costs, etc.
Reasons for changes in net cash flow from operating activities: Net flow increased by RMB448
million YOY, mainly due to: 1. The increase in cash: Cash inflow from operating activities increased by
RMB790 million, mainly due to a YOY increase of RMB774 million in “cash received from sales of
goods and rendering of services” (reflected in the YOY increase in revenue); and 2. The decrease in cash:
Cash outflow from operating activities increased by RMB342 million, mainly due to a YOY increase of
RMB149 million in “other cash paid relating to operating activities” (mainly due to the YOY increase in
image promotion expenses); and a YOY increase of RMB107 million in taxes and fees paid (taxes and
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fees deferred at the beginning of the period were paid during the period).
Reasons for changes in net cash flow from investment activities: Insignificant YOY change.
Reasons for changes in net cash flow from financing activities: Insignificant YOY change.
2 Details of material changes in business type, components or source of profits during the
current period
□ Applicable √ Not applicable
(II) Description on material changes in profits caused by non-primary business activities
□ Applicable √ Not applicable
(III) Analysis of assets and liabilities
√ Applicable □ Not applicable
1. Assets and liabilities
Unit: RMB
Closing amount Change
Closing amount To total To total
Item of the previous ratio Cause
of the period assets (%) assets (%)
period YOY (%)
Accounts 74,004,643.37 1.46 138,626,627.90 2.99 -46.62 Mainly because: 1.
receivable The Company settled
with offline dealers as
usual with decline
further credit support,
thus the balance of
accounts receivable
as of H1 2022
decreased; 2. The
product recall of
Proya SUN
AROUND UV
Protective Sunscreen
Serum occurred
during the period and
the balance of
accounts receivable
decreased
Receivables 8,727,916.00 0.17 3,242,000.00 0.07 169.21 Mainly due to the
financing increased balance of
bank acceptance
notes as of the end of
the period
Prepayments 114,722,216.21 2.26 58,406,647.11 1.26 96.42 Mainly due to the
increased prepaid
image promotion
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fees, etc.
Other 27,908,294.86 0.55 66,043,707.81 1.43 -57.74 Mainly because the
receivables annual rebates
receivable from
certain e-commerce
platforms at the
beginning of the
period were
recovered during the
period
Investments 146,402,400.00 2.89 56,402,400.00 1.22 159.57 Mainly due to the
in other new equity
equity investment of
instruments RMB90 million in
Hangzhou Golong
Holdings Co., Ltd.
during the period.
Construction 155,648,709.93 3.07 108,678,896.27 2.35 43.22 Mainly due to the
in progress additional investment
in Huzhou Production
Base Expansion
Project (Phase I) and
Longwu R&D Center
Construction Project
Deferred 19,740,438.97 0.39 38,796,018.02 0.84 -49.12 Mainly because the
income tax final tranche of
assets restricted shares
under the equity
incentive plan
implemented in 2018
was unlocked in
January 2022 and the
deferred income tax
assets originally
recognized were
reduced accordingly
Other 4,621,667.82 0.09 44,167,303.56 0.95 -89.54 Mainly because
non-current RMB39.9 million for
assets trademarks
(SINGULADERM)
included in the
opening balance was
transferred to
intangible assets after
the registration of
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trademark rights
transfer during the
period
Notes payable 52,985,397.00 1.04 79,156,771.40 1.71 -33.06 Mainly due to the
reduced bank notes
payable
Accounts 758,217,516.91 14.95 404,026,241.16 8.72 87.67 Mainly due to the
payable YOY increase in
sales, resulting in an
increase of RMB230
million in payables
for goods and an
increase of RMB110
million in expenses
payable
Estimated 6,818,443.69 0.13 10,812,084.88 0.23 -36.94 Mainly due to a
liabilities decrease in expected
product returns
Other description
None
2. Overseas assets
√ Applicable □ Not applicable
(1) Scale of assets
Including overseas assets of RMB 155,883.7 thousand, accounting for 3.07% of the total assets.
(2) Statement on high proportion of overseas assets
□ Applicable √ Not applicable
Other description
None
3. Restrictions on prime assets as of the end of the Reporting Period
√ Applicable □ Not applicable
Currency: RMB
Item Carrying value at the end of Cause for restrictions
the period
Monetary Including transformer deposit, Pinduoduo deposit, Tmall
5,656,688.40
capital deposit and Alipay deposit, etc.
Total 5,656,688.40
4. Other description
□ Applicable √ Not applicable
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(IV) Analysis of investment
1. Overall analysis of external equity investments
√ Applicable □ Not applicable
Currency: RMB
Closing balance Opening balance
Item Provision for Carrying Provision for Carrying
Book balance Book balance
impairment amount impairment amount
Investment
in joint 3,068,944.66 3,068,944.66 3,074,758.68 3,074,758.68
ventures
Investment
192,088,171.43 52,351,201.99 151,337,086.78 181,555,246.18 14,670,468.59 166,884,777.59
in associates
Total 195,157,116.09 52,351,201.99 154,406,031.44 184,630,004.86 14,670,468.59 169,959,536.27
For details, see description in 17. Long-term equity investments, VII. Notes to the Items of Consolidated
Financial Statements, Section X Financial Report.
(1) Major equity investments
□ Applicable √ Not applicable
(2) Major non-equity investments
□ Applicable √ Not applicable
(3) Financial assets measured at fair value
□ Applicable √ Not applicable
(V) Sale of major assets and equity
□ Applicable √ Not applicable
(VI) Analysis of major controlled and invested companies
√ Applicable □ Not applicable
Unit: RMB ’0,000
Major Nature of Major Registered Total Net Net Holding or
subsidiary business products capital assets assets profit shareholding
and
services
Hangzhou Cosmetics Cosmetics 5,000.00 22,433.27 11,641.80 905.99 Holding
Proya Trade sales
Co., Ltd.
Zhejiang Cosmetics Cosmetics 1,000.00 48,375.55 20,445.69 4,505.08 Holding
Meiligu sales
Electronic
Commerce
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Co., Ltd.
(VII) Structured entities controlled by the Company
□ Applicable √ Not applicable
V. Other matters for disclosure
(I) Potential risks
√ Applicable □ Not applicable
1. Industry competition risks
(1) Given the intensified competition among various brands in the industry, the Company's brand
strategy and channel strategy fail to match up to expectations.
(2) Given the intensified competition for marketing investment, the control of digital and refined
investment costs may fail to reach the expected goal.
2. Project incubation risks
(1) New brand incubation risk: performance fails to match up to expectations despite heavy investment
in marketing;
(2) New category cultivation risk: as the operation modes for different categories of products differ
greatly, the team may be unable to meet the requirements and the performance may fail to match the
expected goal.
3. Uncertain impact of COVID-19 on operations
4. Impact of the uncertainties of the international situation on the supply chain
(II) Other disclosures
□ Applicable √ Not applicable
Section IV Corporate Governance
I. General Meetings of Shareholders
Query index of the
Resolution
Session of Date of designated website
disclosure Meeting Resolution
meeting meeting where the resolution
date
is published
2021 Annual May 12, Announcement No. May 13, 2022 The meeting considered and
General 2022 2022-027 on SSE approved proposals including
Meeting of website the Company's Annual Report
Shareholders (www.sse.com.cn) 2021 and its Summary, and the
Company's 2021 Annual Profit
Distribution Plan and Capital
Reserve Capitalization Plan.
For details, see the
Announcement on Resolutions
of the 2021 Annual General
Meeting of Shareholders (No.:
2022-027) released on the SSE
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website
(http://www.sse.com.cn) on
May 13, 2022 and relevant
information disclosure media
Meili.
Holders of Preferred Shares with Resumed Voting Rights Requesting to Hold Extraordinary
General Meeting
□ Applicable√ Not applicable
Descriptions of the General Meeting of Shareholders
□ Applicable√ Not applicable
II. Changes in Directors, Supervisors and Senior Management of the Company
□ Applicable √ Not applicable
Description of changes in directors, supervisors and senior management of the Company
□ Applicable √ Not applicable
III. Profit Distribution or Capital Reserve Capitalization Plan
Profit distribution plan and plan for conversion of capital reserve into share capital proposed for
the first six months of 2022
Distribution or conversion or not No
Number of bonus shares to be distributed for every 0
ten shares (share)
Amount of cash dividend for every 10 shares 0
(RMB) (tax inclusive)
Number of shares converted for every 10 shares 0
(share)
Description of profit distribution plan and plan for conversion of capital reserve into share capital
Not applicable
IV. Equity Incentive Schemes, Employee Share Ownership Schemes or Other Employee
Incentives of the Company and Their Impact
(I) Relevant equity incentive matters disclosed in the interim announcement and with no
progress or change in subsequent implementation
□ Applicable√ Not applicable
(II) Incentives not disclosed in the interim announcement or with subsequent progress
Particulars of equity incentives
□ Applicable√ Not applicable
Other description
□ Applicable √ Not applicable
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Particulars of employee stock ownership plans
□ Applicable √ Not applicable
Other incentives
□ Applicable √ Not applicable
Section V Environmental and Corporate Social Responsibility
I. Environmental Information
(I) Environmental issues of companies and their major subsidiaries belonging to key pollutant
discharging units as announced by the environmental protection department
□ Applicable√ Not applicable
(II) Statement on environmental protection information of the Company not included in the list of
Key Pollutant Discharging Units
√ Applicable □ Not applicable
1. Administrative penalties imposed due to environmental issues
□ Applicable√ Not applicable
2. Other environmental information disclosed by referencing to key pollutant discharging units
√ Applicable □ Not applicable
During the Reporting Period, the Company responded actively to the goals of carbon peaking and carbon
neutrality by continuously advancing low-carbon environmental protection and green manufacturing
measures, including utilizing highly sophisticated VOCs gas collection devices. These measures helped
effectively reduce disorganized gas emissions from enterprises, cut pollution and improve air quality,
allowing the Company to do its part in protecting the atmosphere. Additionally, we implemented
performance excellence and precise management. In the first half of the year, our staff put forward more
than 100 reasonable suggestions, and these helped us to lower energy consumption and scrap rate,
improve the efficiency of raw material usage and reduce carbon emissions.
3. Reason for non-disclosure of other environmental information
□ Applicable √ Not applicable
(III) Statement on subsequent progress or change in environmental information disclosed during
the Reporting Period
□ Applicable √ Not applicable
(IV) Relevant information contributing to ecological protection, pollution prevention and control,
and fulfillment of environmental responsibilities
√ Applicable □ Not applicable
During the Reporting Period, the Company offered safety trainings for employees. The factory's
employees learned about work safety-related laws and regulations through trainings, so that their
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awareness of potential safety hazards was enhanced and their ability of handling safety emergencies was
improved. The Huzhou factory introduced the autonomous fire management platform developed by the
provincial fire rescue corps. Since then, the factory managed the fire prevention and control work with a
whole set of system processes, following the working policy of “prevention first, then extinguishing”.
The “Three Autonomous Capabilities” of independent risk assessment, independent safety inspection
and independent correction of hidden dangers were achieved against the inspection standards of the
management platform.
(V) Measures taken to reduce carbon emissions during the Reporting Period and their effects
□ Applicable √ Not applicable
II. Detailed Information on Consolidation and Expansion of Achievements in Poverty Alleviation
and Rural Revitalization
□ Applicable √ Not applicable
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Section VI Major Events
I. Fulfillment of Undertakings
(I) Undertakings fulfilled during the Reporting Period or not yet fulfilled as of the Reporting Period by the parties to the commitment such as actual
controllers, shareholders, related parties, acquirers of the Company and the Company
√□ Applicable □ Not applicable
The next
Specific
Commitment step in the
Background Any time reasons
Type of Party of Content of Date and strictly event of
of line for for failure
commitment commitment commitment duration fulfilled in failure of
commitment performance in timely
time or not timely
fulfillment
fulfillment
(1) During their terms as the Company's
director/senior management, they shall not
transfer more than 25% of their total
shares directly or indirectly held in the
Company each year. Within six months
HOU Commitment
after leaving office, they shall not transfer
Juncheng, date:
their shares directly or indirectly held in
FANG Yuyou November
Restrictions the Company; (2) If their shares in the
IPO-related and CAO 15, 2017 Not Not
on sales of Company are sold within two years upon No Yes
commitments Liangguo, Duration: applicable applicable
shares expiration of the lock-up period, the
Directors and November
selling price shall not be lower than the
Senior 15, 2017 to
offering price. If the closing price of the
Management long-term
Company's shares is lower than the
offering price for 20 consecutive trading
days within 6 months after the Company's
IPO, or the closing price as of the end of
the 6-month period after the Company's
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IPO is lower than the offering price, the
lock-up period for their shares in the
Company will be automatically extended
for 6 months. Their commitments above
shall survive job change and resignation;
(3) Should any of them/their partnership
violate the said share lock-up
commitments, the lock-up period for
their/their partnership's shares in the
Company will be automatically extended
for 6 months
(1) Within 12 months from the date of the
Company's IPO, he shall not transfer or
authorize any other person to manage his
shares directly or indirectly held in the
Company or have the Company
repurchase such shares; (2) During his
Commitment
term in the Company's senior
date: April
management, he shall not transfer more
Restrictions JIN Yanhua, 16, 2018
than 25% of his total shares directly or Not Not
on sales of Senior Duration: No Yes
indirectly held in the Company each year. applicable applicable
shares Management April 16,
Within six months after leaving office, he
2018 to
shall not transfer his shares directly or
long-term
indirectly held in the Company; (3) If his
shares in the Company are sold within two
years upon expiration of the lock-up
period, the selling price shall not be lower
than the offering price. If the closing price
of the Company's shares is lower than the
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offering price for 20 consecutive trading
days within 6 months after the Company's
IPO, or the closing price as of the end of
the 6-month period after the Company's
IPO is lower than the offering price, the
lock-up period for his shares in the
Company will be automatically extended
for 6 months. His commitments above
shall survive job change and resignation;
(4) Should he/his partnership violate the
said share lock-up commitments, the
lock-up period for his/his partnership's
shares in the Company will be
automatically extended for 6 months.
(1) Within 12 months from the date of the
Company's IPO, she shall not transfer or
authorize any other person to manage her
shares directly or indirectly held in the
Commitment
Company or have the Company
date:
repurchase such shares; (2) During her
September
Restrictions WANG Li, term in the Company's senior
03, 2018 Not Not
on sales of Senior management, she shall not transfer more No Yes
Duration: applicable applicable
shares Management than 25% of her total shares directly or
September
indirectly held in the Company each year.
03, 2018 to
Within six months after leaving office, she
long-term
shall not transfer her shares directly or
indirectly held in the Company; (3) If her
shares in the Company are sold within two
years upon expiration of the lock-up
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period, the selling price shall not be lower
than the offering price. If the closing price
of the Company's shares is lower than the
offering price for 20 consecutive trading
days within 6 months after the Company's
IPO, or the closing price as of the end of
the 6-month period after the Company's
IPO is lower than the offering price, the
lock-up period for her shares in the
Company will be automatically extended
for 6 months. Her commitments above
shall survive job change and resignation;
(4) Should she/her partnership violate the
said share lock-up commitments, the
lock-up period for her/her partnership's
shares in the Company will be
automatically extended for 6 months.
(1) Within 24 months upon expiration of
the lock-up period, they shall not directly
or indirectly reduce their shares in the Commitment
HOU
Issuer by more than 6% of the total date:
Juncheng and
number of shares of the issuer before such November
Restrictions FANG Aiqin,
IPO; (2) They must sell shares in the 15, 2017 Not Not
on sales of controlling No Yes
Company through methods including but Duration: applicable applicable
shares shareholder
not limited to collective trading through November
and actual
bidding at the stock exchange, block 15, 2017 to
controller
trading and transfer by agreement in line long-term
with applicable laws, regulations and
rules; (3) Before selling the Company's
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shares, they shall announce the same three
trading days in advance, discharge the
obligation to disclose information in a
timely and accurate manner as per the
rules of the securities exchange, except to
the extent that his or her shares in the
Company are less than 5%; (4) Should
they fail to perform the said intent of
share reduction, they must explain the
cause for failing to do so in the
Company's General Meeting of
Shareholders and media designated by the
CSRC and publicly apologize to the
Company's shareholders and public
investors.
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(1) Upon expiration of the lock-up period,
should they intend to reduce their
shareholding, they should fully comply
with the relevant regulations of the CSRC
and the stock exchange on shareholders'
shareholding reduction, prudently
formulate a shareholding reduction plan
taking into account the needs of the
Company to stabilize the share price,
carry out operation and capital operation,
and gradually reduce their shareholding
FANG Commitment
after the expiration of the lock-up period;
Yuyou, LI date:
(2) They must sell shares in the Company
Xiaolin, November
Restrictions through methods including but not limited
shareholders 15, 2017 Not
on sales of to collective trading through bidding at No Yes
directly Duration: applicable
shares the stock exchange, block trading and
holding more November
transfer by agreement in line with
than 5% of the 15, 2017 to
applicable laws, regulations and rules; (3)
shareholding long-term
Before selling the Company's shares, they
shall announce the same three trading
days in advance, discharge the obligation
to disclose information in a timely and
accurate manner as per the rules of the
securities exchange, except to the extent
that his or her shares in the Company are
less than 5%; (4) Should they fail to
perform the said intent of share reduction,
they must explain the cause for failing to
do so in the General Meeting of
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Shareholders and media designated by the
CSRC and publicly apologize to the
Company's shareholders and public
investors.
When the preconditions for enabling the Commitment
share price stabilization plan are met, if date:
the Company fails to take specific November
measures to stabilize the share price, the 15, 2017 Not Not
Others The Company No Yes
Company must explain the reasons for Duration: applicable applicable
failing to do so in the Company's General November
Meeting of Shareholders and media 15, 2017 to
designated by the CSRC and publicly long-term
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apologize to the Company's shareholders
and public investors. In the event of losses
to investors not as a result of force
majeure, the Company will be liable for
compensation to investors by law, and be
liable otherwise as required by laws,
regulations and the regulators; if due to
force majeure, the Company shall work
out a plan in the shortest possible time to
minimize losses to investors and submit it
to the General Meeting of Shareholders
for consideration, so as to protect the
interests of the Company's investors as
much as possible. Within three years from
the date of the Company's IPO, if the
Company appoints new directors and
senior management, the Company will
require such new directors and senior
management to fulfill the commitments
made by the directors and senior
management at the time of the Company's
IPO.
When the preconditions for enabling the Commitment
The
share price stabilization plan are met, if date:
Company's
failing to take specific measures to November
controlling Not Not
Others stabilize the share price, they must explain 15, 2017 No Yes
shareholders applicable applicable
the reasons for failing to do so at the Duration:
and actual
Issuer's General Meeting of Shareholders November
controllers
and the media designated by the CSRC 15, 2017 to
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and publicly apologize to the issuer's long-term
shareholders and public investors. Where
no such commitment is made, they will
not receive shareholder dividends from
the issuer within 5 working days from the
date of the said incident, and they will not
be able to transfer his or her shares until
they have taken and carried out measures
to stabilize the share price as per the said
plan.
When the preconditions for enabling the
share price stabilization plan are met, if
there is a failure to take specific measures
to stabilize the share price as per the plan
to stabilize the share price, they must
explain the reasons for failing to do so at
The Commitment
the Issuer's General Meeting of
Company's date:
Shareholders and the media designated by
directors November
the CSRC and publicly apologize to the
(excluding 15, 2017 Not Not
Others Issuer's shareholders and public investors. No Yes
independent Duration: applicable applicable
Where no such commitment is made, they
directors) and November
will not receive remuneration and
senior 15, 2017 to
shareholder dividends (if any) from the
management long-term
Issuer within 5 working days from the
date of the said incident, and they will not
be able to transfer his or her shares until
they have taken and carried out measures
to stabilize the share price as per the said
plan.
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If the Company's prospectus contains any
false records, misleading statements or
major omissions, which causes investors
to suffer losses in securities transactions,
the Company will compensate investors
for such losses by law. After such
violations are identified by the CSRC or
the stock exchange or the judicial
authorities where the Company is located,
the Company will actively compensate
investors for direct economic losses
Commitment
incurred therefore by settling with
date:
investors with respect to measurable
November
economic losses directly incurred to
15, 2017 Not Not
Others The Company investors, mediating with investors No Yes
Duration: applicable applicable
through a third party and establishing an
November
investor compensation fund based on the
15, 2017 to
principles of simplifying procedures,
long-term
actively negotiating, compensating in
advance, and effectively protecting the
interests of investors, especially small and
medium investors. If found to have
violated the said commitments, the
Company will publicly apologize to
shareholders and public investors for
failing to perform the said compensation
measures at the General Meeting of
Shareholders and the media designated by
the CSRC and compensate investors for
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actual losses identified by the CSRC and
the judicial authorities.
If the Issuer's prospectus contains any
false records, misleading statements or
major omissions, which causes investors
to suffer losses in securities transactions,
they will compensate investors for such
losses by law. After such violations are
identified by the CSRC or the stock
exchange or the judicial authorities where
the Company is located, the Company will
actively compensate investors for direct
Commitment
economic losses incurred therefore by
date:
The Issuer's settling with investors with respect to
November
controlling measurable economic losses directly
15, 2017 Not Not
Others shareholders incurred to investors, mediating with No Yes
Duration: applicable applicable
and actual investors through a third party and
November
controllers establishing an investor compensation
15, 2017 to
fund based on the principles of
long-term
simplifying procedures, actively
negotiating, compensating in advance, and
effectively protecting the interests of
investors, especially small and medium
investors. If found to have violated the
said commitments, the Company's
controlling shareholders and actual
controllers will publicly apologize to the
issuer's shareholders and public investors
for failing to perform the said
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compensation measures at the Issuer's
General Meeting of Shareholders and the
media designated by the CSRC and will
not receive shareholder dividends from
the Issuer within 5 working days from the
date of the said commitments, and their
shares in the Issuer will not be transferred
until they have taken and carried out
compensation measures as per the said
commitments.
If the Issuer's prospectus contains any
false records, misleading statements or
major omissions, which causes investors
to suffer losses in securities transactions,
they will compensate investors for such
losses by law. After such violations are
Commitment
identified by the CSRC or the stock
date:
exchange or the judicial authorities where
Directors, November
the Company is located, the Company will
supervisors 15, 2017 Not Not
Others actively compensate investors for direct No Yes
and senior Duration: applicable applicable
economic losses incurred therefore by
management November
settling with investors with respect to
15, 2017 to
measurable economic losses directly
long-term
incurred to investors, mediating with
investors through a third party and
establishing an investor compensation
fund based on the principles of
simplifying procedures, actively
negotiating, compensating in advance, and
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effectively protecting the interests of
investors, especially small and medium
investors. If found to have violated the
said commitments, the Company's
directors, supervisors and senior
management will publicly apologize to the
Issuer's shareholders and public investors
for failing to perform the said
compensation measures at the Issuer's
General Meeting of Shareholders and the
media designated by the CSRC and will
not receive remuneration (or allowances)
and shareholder dividends (if any) from
the Issuer within 5 working days from the
date of the said commitments, and their
shares in the Issuer (if any) will not be
transferred until they have taken and
carried out compensation measures as per
the said commitments.
In order to ensure the effective use of the
proceeds from the IPO, effectively Commitment
prevent the risk of diluting immediate date:
returns and improve future returns, the November
Company intends to take measures 15, 2017 Not Not
Others The Company No Yes
including tightening operation Duration: applicable applicable
management and internal control, November
accelerating the progress of fundraising 15, 2017 to
projects, and strengthening the investor long-term
return mechanism, so as to improve asset
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quality, increase operations revenue, raise
future earnings, and achieve sustainable
development to fill the diluted immediate
returns. The Company promises to
continuously improve various measures to
fill the diluted immediate returns in
accordance with the implementation rules
issued by the CSRC and the SSE. If found
to have violated the said commitments,
the Company will promptly announce the
facts and cause of such violation, except
for force majeure or other reasons not
attributable to the Company, apologize to
the Company's shareholders and public
investors, make supplementary
commitments or substitute commitments
to investors to protect the interests of
investors as much as possible, and
implement such supplementary
commitments or substitute commitments
subject to approval by the Company's
General Meeting of Shareholders.
HOU In order to ensure that the Company's Commitment
Juncheng and measures to fill the diluted immediate date:
FANG Aiqin, returns can be effectively performed, they, November
Not Not
Others controlling as the Company's controlling shareholder 15, 2017 No Yes
applicable applicable
shareholder and actual controller, promise that: (1) Duration:
and actual Under no circumstances will they abuse November
controller the position as the controlling shareholder 15, 2017 to
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and actual controller by ultra vires long-term
interfering with the Company's operation
and management activities or encroaching
on the Company's interests; (2) After the
CSRC and the SSE have otherwise
released opinions and implementation
rules on measures to fill the diluted
immediate returns and such commitments,
if the Company's relevant provisions and
his or her commitments contradict such
rules, they will immediately make
supplementary commitments in line with
such rules of the CSRC and the SSE, and
actively promote the Company to issue
new commitments or measures to comply
with the requirements of the CSRC and
the SSE; (3) They will fully, completely
and timely perform the Company's
measures regarding filling the diluted
immediate returns and his or her
commitments regarding the measures to
fill the diluted immediate returns. If found
to have violated such commitments,
which causes losses to the Company or
shareholders, they are willing to: ①
explain the cause and apologize at the
General Meeting of Shareholders and the
media designated by the CSRC; ② be
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liable for compensation to the Company
and/or shareholders by law; ③
unconditionally accept the penalties or
regulatory measures taken by the CSRC
and/or the SSE and other securities
regulators as per relevant regulations and
rules. The said measures to fill the diluted
immediate returns shall not be deemed to
constitute a guarantee for the Company's
future profits.
In order to ensure that the Company's
measures to fill the diluted immediate
returns can be effectively performed, they,
as the Company's director and senior
management, promise that: (1) They will
not offer benefits to other entities or
Commitment
individuals for free or on unfair terms, or
date:
otherwise harm the Company's interests;
November
Directors, (2) They will strictly follow the
15, 2017 Not Not
Others senior Company's budget management by No Yes
Duration: applicable applicable
management limiting his or her duty consumption to
November
the extent required, subject to the
15, 2017 to
Company's supervision, free from wastes
long-term
or excessive consumption; (3) They will
not use the Company's assets to engage in
investment and consumption activities
unrelated to his or her duties; (4) They
will actively promote the Company to
improve the compensation system, so as
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to be more in line with the requirements
for filling the diluted immediate returns;
support the Company's Board of Directors
or Remuneration Committee linking the
implementation of the Company's
measures to fill the diluted immediate
returns in developing, revising and
supplementing the Company's
compensation system; promise that the
vesting conditions for the Company's
equity incentives will be linked to the
implementation of the Company's
measures to fill the diluted immediate
returns; (5) After the CSRC and the SSE
otherwise release the opinions and
implementation rules on the measures to
fill the diluted immediate returns and their
commitments, if the Company's relevant
provisions and his or her commitments
contradict such rules, they will
immediately make supplementary
commitments in line with such rules of the
CSRC and the SSE, and actively promote
the Company to make new commitments
or take new measures to comply with the
requirements of the CSRC and the SSE;
(6) They will fully, completely and timely
perform the Company's measures
regarding filling the diluted immediate
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returns and his or her commitments
regarding the measures to fill the diluted
immediate returns. If found to have
violated such commitments, which causes
losses to the Company or shareholders,
they are willing to: ① explain the cause
and apologize at the General Meeting of
Shareholders and the media designated by
the CSRC; ② be liable for compensation
to the Company and/or shareholders by
law; ③ unconditionally accept the
penalties or regulatory measures taken by
the CSRC and/or the SSE and other
securities regulators as per relevant
regulations and rules. The said measures
to fill the diluted immediate returns shall
not be deemed to constitute a guarantee
for the Issuer's future profits.
1. They do not and will not directly or
indirectly engage in any activities Commitment
HOU
constituting horizontal competition with date:
Juncheng and
the existing and future businesses of the November
Avoiding FANG Aiqin,
Company and its holding subsidiaries, 15, 2017 Not Not
horizontal controlling No Yes
including but not limited to the R&D, Duration: applicable applicable
competition shareholder
production and sale of any products same November
and actual
as or similar to those of the Company and 15, 2017 to
controller
its holding subsidiaries. They shall be long-term
liable for the economic losses caused by
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violation of the above commitments to the
Company. 2. For the enterprises under his
or her control, they will perform their
obligations under such commitments
through the agencies and personnel
(including but not limited to directors and
managers), and they shall be liable for the
economic losses caused by violation of
the above commitments to the Company.
3. From the date of signing this letter of
commitment, if the Company further
expands its product and business scope,
they or the enterprises under his or her
control shall not compete with the
Company within the expanded product or
business scope, or will, in case of any
possible competition with the Company
within the expanded product or business
scope, withdraw from the competition by:
(1) stopping the production of competing
or potentially competing products; (2)
stopping the operation of competing or
potentially competing business; (3)
transferring the competing business to the
Company; or (4) transferring the
competing business to an unrelated third
party. 4. Their shareholding companies,
including Hangzhou Huazhuang Industrial
Investment Co., Ltd. and Huzhou Mogan
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Wangshu Cosmetics Industry Phase I
Venture Capital Partnership (Limited
Partnership), and companies that they
invest in engage in no cosmetics business
or upstream and downstream business
thereof. If these companies engage in such
businesses in the future, they commit that
they will withdraw their investment in the
enterprises through equity transfer and
other means, and that the Company will
be given priority to invest in the said
enterprises according to legal provisions
and the consent of other shareholders of
such enterprises.
In order to ensure that the Company's
recovery measures to fill the dilution on
immediate returns can be effectively
performed, they commit that: 1. They will
HOU not interfere with the Company's Commitment
Juncheng and operation and management activities date: April
Commitments FANG Aiqin, beyond their authority or encroach on the 21, 2021
Not Not
on Others controlling Company's interests; 2. From the date of Duration: No Yes
applicable applicable
refinancing shareholder making these commitments to the April 21,
and actual completion of the Company's public 2021 to
controller offering of A-share convertible corporate long-term
bonds, to the extent that CSRC makes
other new regulatory requirements
regarding the measures to fill returns and
the commitments thereof, and if the above
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commitments cannot satisfy such
requirements of the CSRC, they will make
supplementary commitments as per the
latest requirements of the CSRC at that
time; 3. They will effectively implement
the Company's recovery measures against
dilution and their commitments in this
regard, and if found to have violated such
commitments, which causes losses to the
Company or investors, they are willing to
be liable for compensation to the
Company or investors by law. As one of
the parties responsible for the measures
against dilution, should they violate or
refuse to fulfill the above commitments,
they shall be subject to the punishment or
relevant regulatory measures imposed on
them by the securities regulatory
authorities such as the CSRC and the SSE
in accordance with the relevant
regulations and rules.
In order to ensure that the Company's
Commitment
measures to fill the diluted immediate
date: April
returns can be effectively performed, they
Directors, 21, 2021
commit that: 1. They will not offer Not Not
Others senior Duration: No Yes
benefits to other entities or individuals for applicable applicable
management April 21,
free or on unfair terms, or otherwise harm
2021 to
the Company's interests; 2. They will limit
long-term
their post related consumption behaviors;
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3. They will not use the Company's assets
to engage in investment and consumption
activities unrelated to his or her duties; 4.
They will link the remuneration system
established by the Board of Directors or
the Remuneration and Appraisal
Committee to the implementation of the
Company's recovery measures for filling
returns; 5. If the Company implements
equity incentives in the future, the vesting
conditions for the Company's equity
incentives will be linked to the
implementation of the Company's
measures to fill the returns; 6. From the
date of this commitment to the completion
of the Company's public offering of
A-share convertible bonds, if the CSRC
makes other new regulatory requirements
regarding the measures to fill returns and
the commitments thereof, and if the above
commitments cannot satisfy such
requirements of the CSRC, they will make
supplementary commitments as per the
latest requirements of the CSRC. As one
of the parties responsible for the measures
to fill returns, should they violate or
refuse to fulfill the above commitments,
they shall be subject to the punishment or
relevant regulatory measures imposed on
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him or her by the securities regulatory
authorities such as the CSRC and the SSE
in accordance with the relevant
regulations and rules.
II. Non-operating Use of Funds by the Controlling Shareholders and Other Related Parties during the Reporting Period
□ Applicable √ Not applicable
III. Information on Illegal guarantees
□ Applicable √ Not applicable
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IV. Audit of the Semi-annual Report
□ Applicable √ Not applicable
V. Information on Changes and Handling of Matters related to Non-standard Audit Opinions in
the Annual report for the Previous Year
□ Applicable √ Not applicable
VI. Matters related to Bankruptcy Reorganization
□ Applicable √ Not applicable
VII. Material Litigations and Arbitration Matters
□ The Company had material litigations and arbitrations during the Reporting Period √The Company
had no material litigations and arbitrations during the Reporting Period
VIII. Information on Punishment and Rectification of the Listed Company and its Directors,
Supervisors, Senior Management, Controlling Shareholders, and Actual Controllers due to
Violations of Laws and Regulations
□ Applicable √ Not applicable
IX. Integrity of the Company and Its Controlling Shareholders and Actual Controllers during the
Reporting Period
√ Applicable □ Not applicable
During the Reporting Period, the Company and its controlling shareholders and actual controllers acted
in good faith.
X. Significant related Party Transactions
(I) Related-party transactions related to the ordinary course of business
1. Matters that have been disclosed in the interim announcement without progress or change in
subsequent implementation
□ Applicable √ Not applicable
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2. Matters that have been disclosed in the interim announcement with progress or changes in the
subsequent implementation
√ Applicable □ Not applicable
The 5th meeting of the third session of Board of Directors and the 2021 annual general meeting of
shareholders were held by the Company on April 20, 2022 and May 12, 2022 respectively, at which the
Proposal on the Estimated Amount of Daily Related-party Transactions in 2022 was considered and
approved. For details, please refer to the Announcement on the Estimated Amount of Daily Related-party
Transactions in 2022 (Announcement No.: 2022-020) disclosed on the website of the SSE
(www.sse.com.cn) on April 22, 2022. In H1 2022, the amount of daily related-party transactions of the
Company did not exceed the amount estimated at the beginning of the year.
The estimated and actual amounts of the Company's daily related-party transactions in 2022 were as
follows:
Category of January to June
Estimated amount
related-party Related party 2022
in 2022
transaction Actual amount
Deposits in bank Daily limit of
accounts opened Zhejiang Yueqing Rural Commercial RMB150 million
RMB146,667,700
with the related Bank Co., Ltd. Not exceeding RMB
party 150,000,000
Related-party Huzhou Beauty Town Technology
RMB1,800,000 RMB817,600
lease Incubation Park Co., Ltd.
Note: As Zhejiang Yueqing Rural Commercial Bank Co., Ltd. was no longer recognized as a related
legal entity of the Company with effect from March 16, 2022, the “actual amount in January to June
2022” represents the balance in the accounts as of March 15, 2022. From the beginning of 2022 to
March 15, 2022, the Company obtained deposit interest of RMB1,444,900 from Zhejiang Yueqing Rural
Commercial Bank Co., Ltd.
3. Matters not disclosed in the interim announcement
□ Applicable √ Not applicable
(II) Related party transactions relating to assets or equity acquisition and disposal
1. Matters that have been disclosed in the interim announcement without progress or change in
subsequent implementation
□ Applicable √ Not applicable
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2. Matters that have been disclosed in the interim announcement with progress or changes in the
subsequent implementation
□ Applicable √ Not applicable
3. Matters not disclosed in the interim announcement
□ Applicable √ Not applicable
4. In case of performance agreement, information on performance realization during the
Reporting Period shall be disclosed
□ Applicable √ Not applicable
(III) Significant related party transactions related to joint external investment
1. Matters that have been disclosed in the interim announcement without progress or change in
the subsequent implementation
□ Applicable √ Not applicable
2. Matters that have been disclosed in the interim announcement with progress or changes in the
subsequent implementation
□ Applicable √ Not applicable
3. Matters not disclosed in the interim announcement
□ Applicable √ Not applicable
(IV) Credits and debits with related parties
1. Matters that have been disclosed in the interim announcement without progress or change in
the subsequent implementation
□ Applicable √ Not applicable
2. Matters that have been disclosed in the interim announcement with progress or changes in the
subsequent implementation
□ Applicable √ Not applicable
3. Matters not disclosed in the interim announcement
□ Applicable √ Not applicable
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(V) Financial business among the Company, related financial companies and holding financial
companies controlled by the Company, and related parties
□ Applicable √ Not applicable
(VI) Other significant related party transactions
□ Applicable √ Not applicable
(VII) Others
□ Applicable √ Not applicable
XI. Material Contracts and Their Enforcement
1 Custody, contracting and leasing
□ Applicable √ Not applicable
2 Significant guarantees that have been performed or outstanding during the Reporting Period
□ Applicable √ Not applicable
3 Other material contracts
□ Applicable √ Not applicable
XII. Explanations on Other Significant Matters
□ Applicable √ Not applicable
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Section VII Changes in Share Capital and Shareholders
I. Changes in Share Capital
(I) Table of changes in shares
1. Table of changes in shares
Unit: ’0,000 shares
Before this change Increase or decrease (+ or -) due to this change After this change
Shares
Issuance
Percentage Bonus converted Percentage
Number of new Others Subtotal Number
(%) shares from capital (%)
shares
reserve
I. Shares subject to selling restrictions 34.7201 0.1727 -34.7201 -34.7201 0.00 0.00
1. Shares held by state government
2. Shares held by state-owned legal
persons
3. Shares held by other domestic funds 34.7201 0.1727 -34.7201 -34.7201 0.00 0.00
Including: Shares held by domestic
non-state-owned legal
persons
Shares held by domestic
34.7201 0.1727 -34.7201 -34.7201 0.00 0.00
natural persons
4. Shares held by foreign funds
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Including: Shares held by foreign legal
persons
Shares held by foreign
natural persons
II. Shares not subject to selling 8,075.33 28,141.
20,066.2765 99.8273 8,040.3986 34.9409 100.00
restrictions 95 6160
1. Ordinary RMB Shares 8,075.33 28,141.
20,066.2765 99.8273 8,040.3986 34.9409 100.00
95 6160
2. Foreign-funded shares listed
domestically
3. Foreign-funded shares listed
overseas
4. Others
III. Total number of shares 8,040.61 28,141.
20,100.9966 100.00 8,040.3986 0.2208 100.00
94 6160
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2. Explanation on changes in shares
√ Applicable □ Not applicable
On January 12, 2022, the Company held the 4th meeting of the third session of Board of Directors and
the 4th meeting of the third session of Board of Supervisors, reviewing and approving the Proposal on
the Satisfaction of Conditions for Releasing the Sales Restrictions for the third Release Period of the
Restricted Shares Granted for the First Time and with Reserve under the 2018 Restricted Share
Incentive Plan, and agreeing to handle the release procedures for the incentive participants who meet the
conditions for releasing the sales restrictions. A total of 347,201 restricted shares were released from the
sales restrictions. These were allowed to be listed and circulated on January 20, 2022. The number of the
shares not subject to selling restrictions of the Company increased from 200,662,765 before the listing to
201,009,966, while the number of the shares in circulation subject to restrictions decreased from 347,201
before the listing to 0.
On May 12, 2022, the Company held the 2021 Annual General Meeting of Shareholders, and reviewed
and approved the 2021 Annual Profit Distribution and Capital Reserve Conversion to Share Capital
Plan. Based on the total share capital as at the record date for equity distribution, all registered
shareholders on the record date were distributed a cash dividend of RMB8.60 (tax inclusive) per 10
shares. In addition, the capital reserve was converted into share capital in the proportion of 4 shares for
every 10 shares, totaling 80,403,986 shares. The new shares not subject to selling restrictions were listed
on May 31, 2022. The number of shares not subject to selling restrictions of the Company increased
from 201,009,966 before the listing to 281,413,952.
With the Approval of the China Securities Regulatory Commission, namely, the Reply on Approving
Proya Cosmetics Co., Ltd.'s Public Issuance of Convertible Corporate Bonds (Zheng Jian Xu Ke [2021]
No. 3408), on December 8, 2021, the Company publicly issued 7,517,130 convertible bonds with a
nominal value of RMB100 per share, a total nominal value of RMB751,713,000, and a term of 6 years.
With the approval of the Shanghai Stock Exchange's Self-Regulatory Supervision Decision Letter [2021]
No. 503, the Company's convertible corporate bonds amounting to RMB751,713,000 were listed and
traded on the Shanghai Stock Exchange from January 4, 2022. The bond is referred to as "Proya
Convertible Bond", with the bond code of "113634". Proya Convertible Bonds began to be converted
into shares on June 14, 2022. As of June 30, 2022, a total of RMB313,000 of Proya Convertible Bonds
had been converted into A shares of the Company, and the number of shares converted was 2,208 shares.
The number of shares not subject to selling restrictions of the Company increased from 281,413,952
before the conversion to 281,416,160 after.
3. Impact of share changes on earnings per share, net assets per share and other financial
indicators from the end of the Reporting Period to the disclosure date semi-annual report (if any)
□ Applicable√ Not applicable
4. Other information that the Company deems necessary or as required by the securities
regulators
□ Applicable √ Not applicable
(II) Changes in shares with selling restrictions
√ Applicable □ Not applicable
Unit: Share
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Semi-Annual Report 2022
Number of Number of
Number of Number of
shares with shares with
shares with shares with
selling selling Date of
selling selling
Name of restrictions restrictions Reason for selling releasing
restrictions restrictions at
shareholder at the released restrictions the sales
increased during the end of the
beginning during the restrictions
the Reporting Reporting
of the Reporting
Period Period
period Period
JIN Yanhua 39,320 39,320 0 0 Initial grant under January
the 2018 20, 2022
Restricted Stock
Incentive Plan
WANG Li 22,382 22,382 0 0 The grant with January
reserve under 2018 20, 2022
Restricted Stock
Incentive Plan
16 persons 239,379 239,379 0 0 Initial grant under January
granted for the 2018 20, 2022
the first time Restricted Stock
under 2018 Incentive Plan
Restricted
Stock
Incentive
Plan
4 persons 46,120 46,120 0 0 The grant with January
granted with reserve under 2018 20, 2022
reserve under Restricted Stock
2018 Incentive Plan
Restricted
Stock
Incentive
Plan
Total 347,201 347,201 0 0 / /
II. Shareholders
(I) Total number of shareholders
Total number of shareholders of ordinary shares as at the end of the Reporting Period 14,331
Total number of shareholders of preferred shares whose voting rights have been 0
restored as at end of the Reporting Period
(II) Table of shareholdings of the top ten shareholders and the top ten shareholders of outstanding
shares (or shareholders without selling restrictions) as at the end of the Reporting Period
Unit: share
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Semi-Annual Report 2022
Shareholdings of the top ten shareholders
Number of Pledged, placed
Change Number of
Name of shares held with mark, lock-up
during the Percentage shares held Nature of
shareholder as at the end or not
Reporting (%) with selling shareholder
(full name) of the Share
Period restrictions Number
period status
Domestic
HOU Juncheng 27,905,926 97,670,741 34.71 0 None natural
person
Hong Kong
Securities
Clearing
19,188,092 66,344,132 23.58 0 None Others
Company
Limited("HKS
CC")
Domestic
FANG Yuyou 14,539,137 50,886,980 18.08 0 None natural
person
China
Construction
Bank Co., Ltd.
- Yinhua Fuyu
5,800,165 5,800,165 2.06 0 None Others
Themed Hybrid
Securities
Investment
Fund
Domestic
CAO Liangguo 15,372 3,785,310 1.35 0 None natural
person
China
Construction
Bank Co., Ltd.
- China
Universal
1,000,035 2,400,118 0.85 0 None Others
Consumer
Industry Hybrid
Securities
Investment
Fund
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Industrial and
Commercial
Bank of China
Limited -
Invesco Great
680,000 2,380,000 0.85 0 None Others
Wall Emerging
Growth Hybrid
Securities
Investment
Fund
Aberdeen
Standard
Investment
Management
(Asia) Limited 679,730 2,379,053 0.85 0 None Others
- Aberdeen
Standard -
China A-Share
Fund
Industrial and
Commercial
Bank of China
Limited - GF
Multi-Factor
Flexible -313,002 2,100,000 0.75 0 None Others
Allocation
Hybrid
Securities
Investment
Fund
China
Construction
Bank Co., Ltd.
- China
Universal
Consumption -49 1,200,038 0.43 0 None Others
Upgrade
Hybrid
Securities
Investment
Fund
Shareholdings of the top ten shareholders without selling restrictions
Number of unrestricted Type and number of shares
Name of shareholder
tradable shares held Type Number
HOU Juncheng 97,670,741 RMB ordinary shares 97,670,741
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HKSCC 66,344,132 RMB ordinary shares 66,344,132
FANG Yuyou 50,886,980 RMB ordinary shares 50,886,980
China Construction Bank Co., Ltd. -
Yinhua Fuyu Themed Hybrid Securities 5,800,165 RMB ordinary shares 5,800,165
Investment Fund
CAO Liangguo 3,785,310 RMB ordinary shares 3,785,310
China Construction Bank Co., Ltd. -
CUAM Consumer Industry Hybrid 2,400,118 RMB ordinary shares 2,400,118
Securities Investment Fund
Industrial and Commercial Bank of China
Limited - Invesco Great Wall Emerging
2,380,000 RMB ordinary shares 2,380,000
Growth Hybrid Securities Investment
Fund
Aberdeen Standard Investment
Management (Asia) Limited - Aberdeen 2,379,053 RMB ordinary shares 2,379,053
Standard - China A-Share Fund
Industrial and Commercial Bank of China
Limited - GF Multi-Factor Flexible
2,100,000 RMB ordinary shares 2,100,000
Allocation Hybrid Securities Investment
Fund
Industrial and Commercial Bank of China
Limited - China Universal Consumption
1,200,038 RMB ordinary shares 1,200,038
Upgrade Hybrid Securities Investment
Fund
Notes on the special repurchase account
None
among the top 10 shareholders
Description of the above shareholders
involved in entrustment/entrusted voting None
rights and waiver of voting rights
Explanation on the related relationship or FANG Yuyou is the younger brother of HOU Juncheng's spouse
parties acting in concert among the above FANG Aiqin, therefore HOU Juncheng and FANG Yuyou are
shareholders related.
Description of the shareholders of
preferred shares with voting rights
None
restored and the number of preferred
shares
Shareholdings and sales restrictions of the top ten shareholders with selling restrictions
□ Applicable √ Not applicable
(III) Strategic investors or general legal persons becoming the top ten shareholders through
placement of new shares
□ Applicable √ Not applicable
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III. Information on Directors, Supervisors and Senior Management
(I) Changes in shareholdings of current directors, supervisors, and senior management and those
who resigned during the Reporting Period
□ Applicable √ Not applicable
Other description
□ Applicable √ Not applicable
(II) Equity incentives granted to directors, supervisors and senior management during the
Reporting Period
□ Applicable √ Not applicable
(III) Other description
□ Applicable √ Not applicable
IV. Changes in controlling shareholders and actual controllers
□ Applicable √ Not applicable
Section VIII Information on Preference Shares
□ Applicable √ Not applicable
Section IX Information on Bonds
I. Enterprise Bonds, Corporate Bonds and Non-financial Corporate Debt Financing
Instruments
□ Applicable √ Not applicable
II. Information on Convertible Corporate Bonds
√ Applicable □ Not applicable
(I) Issuance of convertible bonds
With the Approval of the China Securities Regulatory Commission, namely, the Reply on Approving
Proya Cosmetics Co., Ltd.'s Public Issuance of Convertible Corporate Bonds (Zheng Jian Xu Ke [2021]
No. 3408) on December 8, 2021, the Company publicly issued 7,517,130 convertible corporate bonds
with a nominal value of RMB100 per bond and a total nominal value of RMB751,713,000. These
convertible bonds were issued at nominal value with a term of 6 years. With the approval of the
Shanghai Stock Exchange's Self-Regulatory Supervision Decision Letter [2021] No. 503, the Company's
convertible corporate bonds amounting to RMB751,713,000 would be listed and traded on the Shanghai
Stock Exchange from January 4, 2022. The bond is referred to as "Proya Convertible Bond", with the
bond code of "113634". The nominal interest rate of the convertible corporate bonds issued this time was
as follows: 0.30% in the first year, 0.50% in the second year, 1.00% in the third year, 1.50% in the
fourth year, 1.80% in the fifth year, and 2.00% in the sixth year. The duration of the convertible
corporate bonds runs from December 8, 2021 to December 7, 2027.
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(II) Information on Holders and guarantors of convertible bonds during the Reporting Period
Name of convertible corporate bonds Proya convertible bond
Holders of convertible corporate bonds as at the end 28,904
of the period
Guarantors of convertible bonds of the Company None
Material changes in the profitability, asset
None
conditions and credit conditions of the guarantors
The top ten holders of convertible bonds are as follows:
Name of holders of convertible corporate bonds Value of bonds held as Holding ratio (%)
at the end of the period
(RMB)
China Construction Bank Co., Ltd. - China - Europe 56,043,000 7.46
New Blue Chip Flexible Allocation Hybrid
Securities Investment Fund
Fuguofuyi Progressive Fixed-benefit Pension 32,700,000 4.35
Products-Industrial and Commercial Bank of China
Limited
Industrial and Commercial Bank of China Limited - 20,795,000 2.77
South Guangli Return Bond Securities Investment
Fund
China Merchants Bank Co., LTD. - Huabao 19,186,000 2.55
Convertible Bond Securities Investment Fund
Industrial and Commercial Bank of China Limited - 18,246,000 2.43
China Huitianfu Consumption Upgrade Hybrid
Securities Investment Fund
China National Petroleum Corporation Employer 16,947,000 2.26
Pension Plan - Industrial and Commercial Bank of
China Limited
Industrial and Commercial Bank of China Limited - 16,163,000 2.15
Fuguo Tianxing Return Hybrid Securities
Investment Fund
China Everbright Bank Co., LTD. - Boshi CB 14,517,000 1.93
Enhanced Bond Securities Investment Fund
Guoyuan International Holdings Limited - Client 13,405,000 1.78
Funds (Exchange)
China International Capital Corporation Limited 12,591,000 1.68
(III) Changes in convertible bonds during the Reporting Period
Unit: Yuan Currency: RMB
Name of Increase or decrease (+ or -) due to this change
convertible Before this Share Redemption Repurchase After this
corporate change conversion change
bonds
Proya 751,713,000 313,000 0 0 751,400,000
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convertible
bond
(IV) Accumulative conversion of convertible bonds into shares during the Reporting Period
Name of convertible corporate bonds Proya convertible bond
Value of shares converted from convertible bonds 313,000
during the Reporting Period (RMB)
Number of shares converted from convertible 2,208
bonds during the Reporting Period (Share)
Accumulative number of shares converted from 2,208
convertible bonds during the Reporting Period
(Share)
Accumulative number of shares converted from 0.0008
convertible bonds accounting for the total number
of issued shares of the Company before the
conversion (%)
Value of bonds not yet converted (RMB) 751,400,000
Proportion of unconverted convertible bonds to the 99.9584
total issuance of convertible bonds (%)
(V) Historical adjustments to the conversion price
Unit: Yuan Currency: RMB
Name of convertible corporate bonds Proya convertible bond
After
Date of
adjustment
adjusting the Disclosure Explanation on adjusting
Price of Disclosure media
conversion date the conversion price.
convertible
price
shares
May 30, 2022 139.37 May 24, 2022 SSE website Due to the Company's
(http://www.sse.com.cn), implementation of profit
Shanghai Securities distribution in 2021, the
News, Securities Times conversion price of
Proya convertible bond
has been adjusted from
RMB195.98 per share to
RMB139.37 per share.
The latest conversion price as 139.37
at the end of the Reporting
Period
(VI) The Company's liabilities, changes in credit and cash arrangements for debt repayment in
future years
As of June 30, 2022, the Company's total assets were RMB5,071,158,684.26, and its liabilities totaled
RMB2,089,592,037.97, with a gearing ratio of 41.21%. On June 6, 2022, the rating agency China Lianhe
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Credit Rating Co., Ltd. issued the 2022 Tracking Rating Report on the Public Issuance of Convertible
Corporate Bonds by Proya Cosmetics Co., Ltd. The main long-term credit rating of the Company is
"AA", the credit rating of Proya convertible bond is "AA", and the rating outlook is "stable". The results
of this rating remain consistent with the previous rating.
(VII) Other explanations on convertible bonds
None
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Section X Financial Report
I. Audit Report
□ Applicable √ Not applicable
II. Financial statements
Consolidated Balance Sheet
June 30, 2022
Prepared by: Proya Cosmetics Co., Ltd.
Unit: Yuan Currency: RMB
Item Notes Closing balance Opening balance
Current assets:
Cash and cash equivalents VII. 1 2,699,953,453.09 2,391,048,249.81
Provision for settlement
The amount of capital lent
Financial assets held for trading
Derivative financial assets
Notes receivable
Accounts receivable VII. 5 74,004,643.37 138,626,627.90
Receivables financing VII. 6 8,727,916.00 3,242,000.00
Prepayments VII. 7 114,722,216.21 58,406,647.11
Premiums receivable
Reinsurance accounts receivable
Provision for reinsurance contract
receivables
Other receivables VII. 8 27,908,294.86 66,043,707.81
Including: Interest receivable
Dividends receivable
Financial assets purchased under resale
agreements
Inventories VII. 9 535,221,140.74 447,938,758.29
Contract assets
Assets held for sale
Non-current assets due within one year
Other current assets VII. 13 44,594,427.91 53,534,962.39
Total current assets 3,505,132,092.18 3,158,840,953.31
Non-current assets:
Loans and advances to customers
Debt investments
Other debt investments
Long-term receivables
Long-term equity investments VII. 17 154,406,031.44 169,959,536.27
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Investments in other equity instruments VII. 18 146,402,400.00 56,402,400.00
Other non-current financial assets
Investment properties VII. 20 68,783,466.09 70,321,868.00
Fixed assets VII. 21 563,214,939.96 558,981,209.20
Construction in progress VII. 22 155,648,709.93 108,678,896.27
Productive biological assets
Oil and gas assets
Right-of-use assets
Intangible assets VII. 26 428,714,891.30 397,145,124.29
Development expenditure
Goodwill
Long-term deferred expenses VII. 29 24,494,046.57 29,756,474.11
Deferred tax assets VII. 30 19,740,438.97 38,796,018.02
Other non-current assets VII. 31 4,621,667.82 44,167,303.56
Total non-current assets 1,566,026,592.08 1,474,208,829.72
Total assets 5,071,158,684.26 4,633,049,783.03
Current liabilities:
Short-term borrowings VII. 32 200,251,506.85 200,251,506.85
Loans from the central bank
Loans from banks and other financial
institutions
Financial liabilities held for trading
Derivative financial liabilities
Notes payable VII. 35 52,985,397.00 79,156,771.40
Accounts payable VII. 36 758,217,516.91 404,026,241.16
Receipts in advance VII. 37 94,226.63 173,769.85
Contract liabilities VII. 38 104,237,600.21 91,151,985.32
Financial assets sold under repurchase
agreements
Customer deposits and deposits from
banks and other financial institutions
Brokerage for trading securities
Brokerage for underwriting securities
Employee benefits payable VII. 39 99,877,047.61 78,649,049.72
Taxes payable VII. 40 71,356,352.93 99,893,176.97
Other payables VII. 41 61,385,996.69 62,162,153.55
Including: Interest payable
Dividends payable
Fees and commissions payable
Reinsurance accounts payable
Held-for-sale liabilities
Non-current liabilities due within one year
Other current liabilities VII. 44 10,407,936.05 9,521,415.32
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Total current liabilities 1,358,813,580.88 1,024,986,070.14
Non-current liabilities:
Insurance contract reserves
Long-term borrowings
Bonds payable VII. 46 711,060,173.61 695,586,778.80
Including: Preference shares
Perpetual bonds
Lease liabilities
Long-term payables
Long-term employee benefits payable
Estimated liabilities VII. 50 6,818,443.69 10,812,084.88
deferred income VII. 51 5,376,718.33 6,416,263.33
Deferred tax liabilities VII. 30 7,523,121.46 8,408,158.81
Other non-current liabilities
Total non-current liabilities 730,778,457.09 721,223,285.82
Total liabilities 2,089,592,037.97 1,746,209,355.96
Owner's equity (or Shareholders' equity):
Paid-in capital (or share capital) VII. 53 281,416,160.00 201,009,966.00
Other equity instruments VII. 54 50,935,404.67 50,956,622.11
Including: Preference shares
Perpetual bonds
Capital reserve VII. 55 706,973,355.92 834,272,205.66
Less: Treasury shares VII. 56 5,628,128.21
Other comprehensive income VII. 57 -1,496,791.19 -1,247,674.10
Special reserve
Surplus reserve VII. 59 100,634,780.00 100,634,780.00
General risk reserve
Undistributed profits VII. 60 1,821,049,009.30 1,696,978,064.52
Total owner's equity (or shareholders' 2,959,511,918.70 2,876,975,835.98
equity) attributable to the parent company
Minority interests 22,054,727.59 9,864,591.09
Total owner's equity (or shareholders' 2,981,566,646.29 2,886,840,427.07
equity)
Total liabilities and owners' equity 5,071,158,684.26 4,633,049,783.03
(or shareholders' equity)
The chairman of the Company: CFO of the Company: WANG Li Head of Accounting Department:
HOU Juncheng WANG Li
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Parent Company's Balance Sheet
June 30, 2022
Prepared by: Proya Cosmetics Co., Ltd.
Unit: Yuan Currency: RMB
Item Notes Closing balance Opening balance
Current assets:
Cash and cash equivalents 1,944,900,609.70 1,691,858,730.42
Financial assets held for trading
Derivative financial assets
Notes receivable
Accounts receivable XVII. 1 359,884,682.64 354,196,955.99
Receivables financing 3,867,500.00 3,092,000.00
Prepayments 48,616,961.86 24,580,460.37
Other receivables XVII. 2 149,973,641.15 222,452,930.42
Including: Interest receivable
Dividends receivable
Inventories 347,671,481.60 271,436,146.45
Contract assets
Assets held for sale
Non-current assets due within one year
Other current assets 32,279,552.05 33,270,945.69
Total current assets 2,887,194,429.00 2,600,888,169.34
Non-current assets:
Debt investments
Other debt investments
Long-term receivables
Long-term equity investments XVII. 3 380,783,980.68 350,003,540.49
Investments in other equity instruments 110,580,000.00 20,580,000.00
Other non-current financial assets
Investment properties 355,574,426.10 362,657,495.17
Fixed assets 263,426,447.67 253,209,471.02
Construction in progress 154,154,427.07 105,012,647.89
Productive biological assets
Oil and gas assets
Right-of-use assets
Intangible assets 388,805,524.71 395,609,113.72
Development expenditure
Goodwill
Long-term deferred expenses 15,490,665.56 20,075,870.93
Deferred tax assets 13,647,957.81 22,968,793.93
Other non-current assets 4,844,687.21 4,493,322.95
Total non-current assets 1,687,308,116.81 1,534,610,256.10
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Total assets 4,574,502,545.81 4,135,498,425.44
Current liabilities:
Short-term borrowings 200,251,506.85 200,251,506.85
Financial liabilities held for trading
Derivative financial liabilities
Notes payable 52,985,397.00 79,156,771.40
Accounts payable 590,343,077.95 282,934,452.33
Receipts in advance
Contract liabilities 40,981,855.73 28,108,787.35
Employee benefits payable 67,947,310.35 33,926,736.55
Taxes payable 43,404,643.84 66,893,331.24
Other payables 2,163,390.08 8,546,397.66
Including: Interest payable
Dividends payable
Held-for-sale liabilities
Non-current liabilities due within one year
Other current liabilities
Total current liabilities 998,077,181.80 699,817,983.38
Non-current liabilities:
Long-term borrowings
Bonds payable 711,060,173.61 695,586,778.80
Including: Preference shares
Perpetual bonds
Lease liabilities
Long-term payables
Long-term employee benefits payable
Estimated liabilities
deferred income 5,376,718.33 6,416,263.33
Deferred tax liabilities 7,511,212.40 8,395,198.23
Other non-current liabilities
Total non-current liabilities 723,948,104.34 710,398,240.36
Total liabilities 1,722,025,286.14 1,410,216,223.74
Owner's equity (or Shareholders' equity):
Paid-in capital (or share capital) 281,416,160.00 201,009,966.00
Other equity instruments 50,935,404.67 50,956,622.11
Including: Preference shares
Perpetual bonds
Capital reserve 753,906,363.60 834,563,920.32
Less: Treasury shares 5,628,128.21
Other comprehensive income
Special reserve
Surplus reserve 100,634,780.00 100,634,780.00
Undistributed profits 1,665,584,551.40 1,543,745,041.48
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Total owner's equity (or shareholders' 2,852,477,259.67 2,725,282,201.70
equity)
Total liabilities and owners' equity (or 4,574,502,545.81 4,135,498,425.44
shareholders' equity)
The chairman of the Company: CFO of the Company: WANG Li Head of Accounting Department:
HOU Juncheng WANG Li
Consolidated Income Statement
January to June 2022
Unit: Yuan Currency: RMB
Item Notes H1 2022 H1 2021
I. Gross revenue 2,625,943,244.29 1,917,718,497.60
Including: Operating revenue VII. 61 2,625,943,244.29 1,917,718,497.60
Interest income
Premiums earned
Fees and commission income
II. Total operating costs 2,152,787,578.39 1,667,751,364.94
Including: Operating costs VII. 61 837,034,743.80 695,558,289.19
Interest expenses
Fees and commissions expenses
Surrender value
Net compensation expenses
Net provisions drawn for insurance
contracts
Insurance policy dividend expenses
Reinsurance expenses
Taxes and surcharges VII. 62 25,429,112.04 19,290,055.27
Selling expenses VII. 63 1,116,921,650.63 807,204,631.76
General and administrative expenses VII. 64 127,140,154.83 116,191,173.05
R&D expenses VII. 65 61,066,694.07 31,371,344.46
Financial expenses VII. 66 -14,804,776.98 -1,864,128.79
Including: Interest expenses 6,535,131.18 5,082,866.57
Interest income 24,330,282.91 11,723,066.05
Add: Other income VII. 67 20,627,971.50 10,159,807.90
Investment income (“-” for losses) VII. 68 -3,658,316.04 -2,378,652.94
Including: Income from investment in -3,658,316.04 -2,375,106.70
associates and joint ventures
Gains from derecognition of
financial assets measured at
amortized cost (“-” for losses)
Foreign exchange gains (“-” for losses)
Net exposure hedging gains (“-” for
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losses)
Income from changes in fair value (“-” for
losses)
Credit impairment losses (“-” for losses) VII. 71 875,552.05 2,955,792.59
Asset impairment losses (“-” for losses) VII. 72 -89,555,181.24 -8,625,168.59
Gains from disposal of assets (“-” for -1,416.28
losses)
III. Operating profit (“-” for losses) 401,445,692.17 252,077,495.34
Add: Non-operating revenue VII. 74 308,882.06 114,443.12
Less: Non-operating expenses VII. 75 550,781.27 60,174.49
IV. Total profit (“-” for total losses) 401,203,792.96 252,131,763.97
Less: Tax expenses VII. 76 92,647,427.04 43,482,270.58
V. Net profit (“-” for net losses) 308,556,365.92 208,649,493.39
(I) Categorized by the nature of continuing operations
1. Net profit from continuing operations (“-” for 308,556,365.92 208,649,493.39
net losses)
2. Net profit from discontinuing operations (“-”
for net losses)
(II) Classification by ownership
1. Net profit attributable to shareholders of the 296,939,515.54 226,101,313.86
parent company (“-” for net losses)
2. Minority interest income (“-” for net losses) 11,616,850.38 -17,451,820.47
VI. Other comprehensive income, net of tax -249,117.09 -396,595.34
(I) Other comprehensive income (net of tax) -249,117.09 -396,595.34
attributable to owners of the parent company
1. Other comprehensive income that cannot be
reclassified to profit or loss
(1) Changes arising from the re-measurement of
defined benefit plans
(2) Other comprehensive income that cannot be
reclassified into profit or loss under the equity
method
(3) Changes in the fair value of other investments
in equity instrument
(4) Changes in the fair value of the Company's
own credit risks
2. Other comprehensive income to be reclassified -249,117.09 -396,595.34
into profit or loss
(1) Other comprehensive income that can be
reclassified into profit or loss under the equity
method
(2) Changes in the fair value of other debt
investments
(3) Amount of financial assets reclassified into
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other comprehensive income
(4) Credit impairment provisions of other debt
investments
(5) Cash flow hedging reserve
(6) Conversion differences of financial statements -249,117.09 -396,595.34
denominated in foreign currencies
(7) Others
(II) Other comprehensive income (net of tax)
attributable to minority shareholders
VII. Total comprehensive income 308,307,248.83 208,252,898.05
(I) Total comprehensive income attributable to 296,690,398.45 225,704,718.52
owners of the parent company
(II) Total comprehensive income attributable to 11,616,850.38 -17,451,820.47
minority shareholders
VIII. Earnings per share:
(I) Basic earnings per share (RMB/share) 1.06 1.13
(II) Diluted earnings per share (RMB/share) 1.04 1.12
For business combinations involving enterprises under common control in the current period, the net
profit realized by the acquirees before the combination is RMB0.00, and the net profit realized thereby
in the prior period was RMB0.00.
The chairman of the Company: CFO of the Company: WANG Head of Accounting
HOU Juncheng Li Department: WANG Li
Parent Company's Income Statement
January to June 2022
Unit: Yuan Currency: RMB
Item Notes H1 2022 H1 2021
I. Operating Revenue XVII. 4 1,338,618,165.34 896,751,013.59
Less: Operating costs XVII. 4 616,362,778.04 456,588,246.62
Taxes and surcharges 10,380,101.33 9,582,635.63
Selling expenses 213,869,474.60 81,296,635.42
General and administrative expenses 98,835,341.03 93,298,483.53
R&D expenses 62,747,420.22 33,738,875.24
Financial expenses -18,381,341.10 -5,242,699.84
Including: Interest expenses 6,439,386.65 3,673,688.51
Interest income 19,969,174.65 11,002,950.08
Add: Other income 14,152,667.95 2,487,852.60
Investment income (“-” for losses) XVII. 5 -3,474,371.02 -2,511,473.64
Including: Income from investment in -3,474,371.02 -2,511,473.64
associates and joint ventures
Gains from derecognition of
financial assets measured at
amortized cost (“-” for losses)
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Net exposure hedging gains (“-” for
losses)
Income from changes in fair value (“-” for
losses)
Credit impairment losses (“-” for losses) 61,920,164.56 -29,471,176.41
Asset impairment losses (“-” for losses) -78,282,507.05 -1,596,258.57
Gains from disposal of assets (“-” for
losses)
II. Operating profit (“-” for losses) 349,120,345.66 196,397,780.97
Add: Non-operating revenue 6,939.37 5,363.22
Less: Non-operating expenses 34,601.49 9,975.00
III. Total profit (“-” for total losses) 349,092,683.54 196,393,169.19
Less: Tax expenses 54,384,602.86 27,106,176.79
IV. Net profit (“-” for net losses) 294,708,080.68 169,286,992.40
(I) Net profit from continuing operations (“-” for 294,708,080.68 169,286,992.40
net loss)
(II) Net profit from discontinuing operations (“-”
for net loss)
V. Other comprehensive income，net of tax
(I) Other comprehensive income that cannot be
reclassified into profit and loss
1. Changes arising from the re-measurement of
defined benefit plans
2. Other comprehensive income that cannot be
reclassified into profit or loss under the equity
method
3. Changes in the fair value of other investments
in equity instrument
4. Changes in the fair value of the Company's
own credit risks
(II) Other comprehensive income that will be
reclassified into profit or loss
1. Other comprehensive income that can be
reclassified into profit or loss under the equity
method
2. Changes in the fair value of other debt
investments
3. Amount of financial assets reclassified into
other comprehensive income
4. Credit impairment provisions of other debt
investments
5. Cash flow hedging reserve
6. Foreign exchange differences from translation
of financial statements
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7. Others
VI. Total comprehensive income 294,708,080.68 169,286,992.40
VII. Earnings per share:
(I) Basic earnings per share (RMB/share)
(II) Diluted earnings per share (RMB/share)
The chairman of the Company: CFO of the Company: WANG Li Head of Accounting Department:
HOU Juncheng WANG Li
Consolidated Cash Flow Statement
January to June 2022
Unit: Yuan Currency: RMB
Item Notes H1 2022 H1 2021
I. Cash flows from operating activities:
Cash receipts from sales of goods and 2,996,503,490.56 2,222,119,171.48
rendering of services
Net increase in customer deposits and deposits
from banks and other financial institutions
Net increase in loans from the central bank
Net increase in loans from other financial
institutions
Cash receipts from premiums under original
insurance contracts
Net cash receipts from reinsurance business
Net increase in deposits and investments from
policyholders
Cash receipts from interest, fees and
commissions
Net increase in loans from banks and other
financial institutions
Net increase in repurchase business capital
Net cash receipts from securities trading
agency services
Receipts of tax refunds 1,438,462.09 8,644,521.51
Other cash receipts relating to operating VII. 78 (1) 64,342,142.15 41,759,657.98
activities
Subtotal of cash inflows from operating 3,062,284,094.80 2,272,523,350.97
activities
Cash payment for goods and services 775,028,311.27 715,847,620.70
Net increase in customer loans and advances
Net increase in deposits with the central bank
and other banks
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Cash payments for compensation payments
under original insurance contract
Net increase in loans to banks and other
financial institutions
Cash payments for interest, fees and
commissions
Cash payments for policy dividends
Cash payments to and on behalf of employees 263,654,300.60 237,264,313.77
Payments of various types of taxes 315,679,187.15 208,417,814.87
Other cash payments relating to operating VII. 78 (2) 994,140,165.40 844,818,022.81
activities
Subtotal of cash outflows from operating 2,348,501,964.42 2,006,347,772.15
activities
Net cash flows from operating activities 713,782,130.38 266,175,578.82
II. Cash flows from investing activities:
Cash receipts from returns on investments
Cash receipts from investments income
Net cash receipts from disposal of fixed assets, 1,000.00
intangible assets and other long-term assets
Net cash receipts from the disposal of
subsidiaries and other business units
Other cash receipts relating to investing
activities
Subtotal of cash inflows from investing 1,000.00
activities
Cash payments for purchase and construction 72,466,047.18 98,334,802.52
of fixed assets, intangible assets and other
long-term assets
Cash payments for investments 104,185,427.27 31,206,800.00
Net increase in pledged loans
Net cash payments for acquisition of
subsidiaries and other operating entities
Other cash payments relating to investing VII. 78 (4) 61,087,857.19
activities
Subtotal of cash outflows from investing 176,651,474.45 190,629,459.71
activities
Net cash flows from investing activities -176,651,474.45 -190,628,459.71
III. Cash flows from financing activities:
Cash receipts from capital contributions 700,000.00 450,000.00
Including: Cash receipts by subsidiaries from 700,000.00 450,000.00
minority shareholders’ investment
Cash receipts from borrowings 200,000,000.00 200,000,000.00
Other cash receipts relating to financing
activities
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Subtotal of cash inflows from financing 200,700,000.00 200,450,000.00
activities
Cash payments for debt repayment 200,000,000.00 299,000,000.00
Cash payments for distribution of dividends, 176,619,542.24 149,594,422.10
profits or payment of interest expenses
Including: Dividends and profits paid by
subsidiaries to minority shareholders
Other cash payments relating to financing VII. 78 (6) 45,000,000.00 486,631.52
activities
Subtotal of cash outflows from financing 421,619,542.24 449,081,053.62
activities
Net cash flows from financing activities -220,919,542.24 -248,631,053.62
IV. Effect of changes in foreign exchange rates -249,117.09 -396,595.34
on cash and cash equivalents
V. Net increase in cash and cash equivalents 315,961,996.60 -173,480,529.85
Add: Opening balance of cash and cash 2,378,334,768.09 1,401,850,754.88
equivalents
VI. Closing balance of cash and cash 2,694,296,764.69 1,228,370,225.03
equivalents
The chairman of the Company: CFO of the Company: WANG Head of Accounting
HOU Juncheng Li Department: WANG Li
Parent Company's Cash Flow Statement
January to June 2022
Unit: Yuan Currency: RMB
Item Notes H1 2022 H1 2021
I. Cash flows from operating activities:
Cash receipts from sales of goods and rendering 1,560,499,082.76 1,080,660,581.18
of services
Tax refund receipts 2,938,756.09
Other cash receipts relating to operating 132,070,257.42 68,370,736.09
activities
Subtotal of cash inflows from operating 1,692,569,340.18 1,151,970,073.36
activities
Cash payment for goods and services 589,859,418.74 553,972,561.93
Cash payments to and on behalf of employees 113,360,200.45 94,985,032.15
Payments of various types of taxes 160,233,972.59 88,642,861.24
Other cash payments relating to operating 170,292,344.51 172,843,455.28
activities
Subtotal of cash outflows from operating 1,033,745,936.29 910,443,910.60
activities
Net cash flows from operating activities 658,823,403.89 241,526,162.76
II. Cash flows from investing activities:
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Cash receipts from returns on investments 506,383.08
Cash receipts from investments income
Net cash receipts from disposal of fixed assets,
intangible assets and other long-term assets
Net cash receipts from the disposal of
subsidiaries and other operating entities
Other cash receipts relating to investing
activities
Subtotal of cash inflows from investing 506,383.08
activities
Cash payments for purchase and construction of 71,839,761.78 92,347,046.32
fixed assets, intangible assets and other
long-term assets
Cash payments for investments 150,335,427.27 32,256,800.00
Net cash payments for acquisition of subsidiaries
and other business units
Other cash payments relating to investing
activities
Subtotal of cash outflows from investing 222,175,189.05 124,603,846.32
activities
Net cash flows from investing activities -222,175,189.05 -124,097,463.24
III. Cash flows from financing activities:
Cash receipts from capital contributions
Cash receipts from borrowings 200,000,000.00 200,000,000.00
Other cash receipts relating to financing
activities
Subtotal of cash inflows from financing 200,000,000.00 200,000,000.00
activities
Cash payments for debt repayment 200,000,000.00 200,000,000.00
Cash payments for distribution of dividends, 176,619,542.24 148,641,547.10
profits or payment of interest expenses
Other cash payments relating to financing
activities
Subtotal of cash outflows from financing 376,619,542.24 348,641,547.10
activities
Net cash flows from financing activities -176,619,542.24 -148,641,547.10
IV. Effect of changes in foreign exchange rates
on cash and cash equivalents
V. Net increase in cash and cash equivalents 260,028,672.60 -31,212,847.58
Add: Opening balance of cash and cash 1,684,565,248.70 484,019,222.50
equivalents
VI. Closing balance of cash and cash equivalents 1,944,593,921.30 452,806,374.92
The chairman of the Company: CFO of the Company: WANG Li Head of Accounting Department:
HOU Juncheng WANG Li
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Consolidated Statements of Changes in Owners' Equity
January to June 2022
Unit: Yuan Currency: RMB
H1 2022
Equity attributable to owners of the parent company
Total equity
Item Minority
Paid-up capital Other equity instruments Less: Other General attributable to
Special Undistributed interests
(or share Capital reserve Treasury comprehensive Surplus reserve risk Others Subtotal owners
Preference Perpetual reserve profits
capital) Others shares income reserve
shares bonds
I. Closing 201,009,966.00 50,956,622.11 834,272,205.66 5,628,128.21 -1,247,674.10 100,634,780.00 1,696,978,064.52 2,876,975,835.98 9,864,591.09 2,886,840,427.07
balance of the
previous
period
Add: Changes
in accounting
policies
Correction for
previous errors
Business
combinations
under common
control
Others
II. Opening 201,009,966.00 50,956,622.11 834,272,205.66 5,628,128.21 -1,247,674.10 100,634,780.00 1,696,978,064.52 2,876,975,835.98 9,864,591.09 2,886,840,427.07
balance of the
current year
III. Movement 80,406,194.00 -21,217.44 -127,298,849.74 -5,628,128.21 -249,117.09 124,070,944.78 82,536,082.72 12,190,136.50 94,726,219.22
over the
current period
(“-” for
decrease)
(I) Total -249,117.09 296,939,515.54 296,690,398.45 11,616,850.38 308,307,248.83
comprehensive
income
(II) Owner's 2,208.00 -21,217.44 302,521.21 283,511.77 700,000.00 983,511.77
contribution or
capital
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reduction
1. Ordinary 700,000.00 700,000.00
shares
contributed by
owners
2. Capital
contributions
by other
equity
instrument
holders
3. Amount of
share-based
payments
credited to
owners' equity
4. Others 2,208.00 -21,217.44 302,521.21 283,511.77 283,511.77
(III) Profit -172,868,570.76 -172,868,570.76 -172,868,570.76
distribution
1. Withdrawal
of surplus
reserve
2. Withdrawal
of general risk
reserve
3. Distribution -172,868,570.76 -172,868,570.76 -172,868,570.76
to owners (or
shareholders)
4. Others
(IV) Transfer 80,403,986.00 -127,601,370.95 -5,628,128.21 -41,569,256.74 -126,713.88 -41,695,970.62
within owners'
equity
1. Transfer of 80,403,986.00 -80,403,986.00
capital reserve
to capital (or
share capital)
2. Transfer of
surplus reserve
to capital (or
share capital)
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3. Surplus
reserve to
cover loss
4. Changes in
defined benefit
scheme carried
forward to
retained
earnings
5. Other
comprehensive
income
transferred to
retained
earnings
6. Others -47,197,384.95 -5,628,128.21 -41,569,256.74 -126,713.88 -41,695,970.62
(V) Special
reserve
1. Withdrawal
for the period
2. Utilization
for the period
(VI) Others
IV. Closing 281,416,160.00 50,935,404.67 706,973,355.92 -1,496,791.19 100,634,780.00 1,821,049,009.30 2,959,511,918.70 22,054,727.59 2,981,566,646.29
balance of the
current period
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H1 2021
Equity attributable to owners of the parent company
Total equity
Item Minority
Paid-up capital Other equity instruments Less: Other General attributable to
Special Undistributed interests
(or share Capital reserve Treasury comprehensive Surplus reserve risk Others Subtotal owners
Preference Perpetual reserve profits
capital) Others shares income reserve
shares bonds
I. Closing 201,116,925.00 837,034,836.69 12,653,905.25 -269,066.13 100,634,780.00 1,265,671,865.63 2,391,535,435.94 90,326,830.19 2,481,862,266.13
balance of the
previous year
Add: Changes
in accounting
policies
Correction for
previous errors
Business
combinations
under common
control
Others
II. Opening 201,116,925.00 837,034,836.69 12,653,905.25 -269,066.13 100,634,780.00 1,265,671,865.63 2,391,535,435.94 90,326,830.19 2,481,862,266.13
balance at the
beginning of
the current
year
III. Movement 3,997,313.48 -5,291,971.65 -396,595.34 81,297,127.86 90,189,817.65 -79,685,445.01 10,504,372.64
for the current
period (“-” for
decrease)
(I) Total -396,595.34 226,101,313.86 225,704,718.52 -17,451,820.47 208,252,898.05
comprehensive
income
(II) Owner's 2,262,118.91 -5,291,971.65 7,554,090.56 700,000.00 8,254,090.56
contribution
and capital
reduction
1. Ordinary -5,291,971.65 5,291,971.65 700,000.00 5,991,971.65
shares
contributed by
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owners
2. Capital
contributions
by other
equity
instrument
holders
3. Amount of 2,262,118.91 2,262,118.91 2,262,118.91
share-based
payments
credited to
owners' equity
4. Others
(III) Profit -144,804,186.00 -144,804,186.00 -144,804,186.00
distribution
1. Withdrawal
of surplus
reserve
2. Withdrawal
of general risk
reserve
3. Distribution -144,804,186.00 -144,804,186.00 -144,804,186.00
to owners (or
shareholders)
4. Others
(IV) Internal
transfer within
owners' equity
1. Transfer of
capital reserve
to capital (or
share capital)
2. Transfer of
surplus reserve
to capital (or
share capital)
3. Surplus
reserve to
cover loss
4. Changes in
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defined benefit
scheme carried
forward to
retained
earnings
5. Transfer of
other
comprehensive
income to
retained
earnings
6. Others
(V) Special
reserve
1. Withdrawal
for the period
2. Utilization
for the period
(VI) Others 1,735,194.57 1,735,194.57 -62,933,624.54 -61,198,429.97
IV. Closing 201,116,925.00 841,032,150.17 7,361,933.60 -665,661.47 100,634,780.00 1,346,968,993.49 2,481,725,253.59 10,641,385.18 2,492,366,638.77
balance of the
current period
The chairman of the Company: HOU Juncheng CFO of the Company: WANG Li Head of Accounting Department: WANG Li
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Statement of Changes in Owners' Equity of the Parent Company
January to June 2022
Unit: Yuan Currency: RMB
H1 2022
Other equity instruments Other Total equity
Item Paid-up capital Less: Treasury Special Undistributed
Preference Perpetual Capital reserve comprehensive Surplus reserve attributable to
(or share capital) Others shares reserve profit
shares bonds income owners
I. Closing balance of 201,009,966.00 50,956,622.11 834,563,920.32 5,628,128.21 100,634,780.00 1,543,745,041.48 2,725,282,201.70
the previous year
Add: Changes in
accounting policies
Correction for
previous errors
Others
II. Opening balance of 201,009,966.00 50,956,622.11 834,563,920.32 5,628,128.21 100,634,780.00 1,543,745,041.48 2,725,282,201.70
the current year
III. Movement for the 80,406,194.00 -21,217.44 -80,657,556.72 -5,628,128.21 121,839,509.92 127,195,057.97
current period (“-” for
decrease)
(I) Total comprehensive 294,708,080.68 294,708,080.68
income
(II) Owner's 2,208.00 -21,217.44 302,521.21 283,511.77
contribution and capital
reduction
1. Ordinary shares
contributed by the
owners
2. Capital contributions
by other equity
instrument holders
3. Amount of
share-based payments
credited to owners'
equity
4. Others 2,208.00 -21,217.44 302,521.21 283,511.77
(III) Profit distribution -172,868,570.76 -172,868,570.76
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1. Withdrawal of
surplus reserve
2. Distribution to -172,868,570.76 -172,868,570.76
owners (or
shareholders)
3. Others
(IV) Transfer within 80,403,986.00 -80,403,986.00
owners' equity
1. Transfer of capital 80,403,986.00 -80,403,986.00
reserve to capital (or
share capital)
2. Transfer of surplus
reserve to capital (or
share capital)
3. Surplus reserve to
cover loss
4. Changes in defined
benefit scheme carried
forward to retained
earnings
5. Transfer of other
comprehensive income
to retained earnings
6. Others
(V) Special reserve
1. Withdrawal for the
period
2. Utilization for the
period
(VI) Others -556,091.93 -5,628,128.21 5,072,036.28
IV. Closing balance for 281,416,160.00 50,935,404.67 753,906,363.60 100,634,780.00 1,665,584,551.40 2,852,477,259.67
the current period
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H1 2021
Other equity instruments Less: Other Total equity
Item Paid-up capital Special Undistributed
Preference Perpetual Capital reserve Treasury comprehensive Surplus reserve attributable to
(or share capital) Others reserve profit
shares bonds shares income owners
I. Closing balance of the previous 201,116,925.00 837,075,425.32 12,653,905.25 100,634,780.00 1,134,989,843.29 2,261,163,068.36
period
Add: Changes in accounting
policies
Correction for previous errors
Others
II. Opening balance of the current 201,116,925.00 837,075,425.32 12,653,905.25 100,634,780.00 1,134,989,843.29 2,261,163,068.36
year
III. Movement for the current 931,539.28 -5,291,971.65 24,482,806.40 30,706,317.33
period (“-” for decrease)
(I) Total comprehensive income 169,286,992.40 169,286,992.40
(II) Owner's contribution and 707,296.73 -5,291,971.65 5,999,268.38
capital reduction
1. Ordinary shares contributed by -5,291,971.65 5,291,971.65
the owners
2. Capital contributions by other
equity instrument holders
3. Amount of share-based payments 707,296.73 707,296.73
credited to owners' equity
4. Others
(III) Profit distribution -144,804,186.00 -144,804,186.00
1. Withdrawal of surplus reserve
2. Distribution to owners (or -144,804,186.00 -144,804,186.00
shareholders)
3. Others
(IV) Internal transfer within owners'
equity
1. Transfer of capital reserve to
capital (or share capital)
2. Transfer of surplus reserve to
capital (or share capital)
3. Surplus reserve to cover loss
4. Changes in defined benefit
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scheme carried forward to retained
earnings
5. Transfer of other comprehensive
income to retained earnings
6. Others
(V) Special reserve
1. Withdrawal for the period
2. Utilization for the period
(VI) Others 224,242.55 224,242.55
IV. Closing balance of the current 201,116,925.00 838,006,964.60 7,361,933 .60 100,634,780.00 1,159,472,649.69 2,291,869,385.69
period
The chairman of the Company: HOU Juncheng CFO of the Company: WANG Li Head of Accounting Department: WANG Li
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III. General Information about the Company
1. Company profile
√ Applicable □ Not applicable
Proya Cosmetics Co., Ltd. (hereinafter referred to as “Company” or the “Company”), formerly known as
Proya (Huzhou) Cosmetics Co., Ltd., was registered in Wuxing Branch of Huzhou Municipal
Administration for Industry and Commerce on May 24, 2006. Our corporate headquarters are located in
Hangzhou, Zhejiang province. The Company currently holds the business license with the unified social
credit code of 91330100789665033F. The total number of current shares is 281,416,160.00 (par value of
RMB1 per share). From these shares, there are zero A shares with restrictions in circulation, and
281,416,160.00 A shares that are not subject to restriction in circulation. The shares of the Company
were listed for trading on SSE on November 15, 2017.
The Company is a beauty and personal care company, mainly engaged in cosmetics research and
development, production, and sales. The products are mainly cosmetics.
The financial statements were approved for external disclosure by the 8th meeting of the third session of
the Board of Directors on August 24, 2022.
2. Scope of consolidated financial statements
√ Applicable □ Not applicable
The Company has incorporated 47 subsidiaries, including Hangzhou Proya Trade Co., Ltd., Anya
(Huzhou) Cosmetics Co., Ltd., Zhejiang Meiligu Electronic Commerce Co., Ltd., Huzhou Chuangdai
E-commerce Co., Ltd., Yueqing Laiya Trading Co., Ltd. and Hapsode (Hangzhou) Cosmetics Co., Ltd.,
into the consolidated financial statements of the Reporting Period. See “VIII. Change in Consolidation
Scope” and “IX. Equity in Other Entities” in “Section X Financial Report” of this report for details.
IV. Preparation Basis of Financial Statements
1. Preparation basis
The financial statements of the Company are prepared on the going-concern basis.
2. Going concern
√ Applicable □ Not applicable
There are no matters or situations that may substantially affect the going-concern ability of the Company
within 12 months since the end of the Reporting Period.
V. Significant Accounting Policies and Accounting Estimates
Notes to specific accounting policies and accounting estimates:
√ Applicable □ Not applicable
Refer to “44. Changes in significant accounting policies and accounting estimates” in “V. Significant
accounting policies and accounting estimates”
of “Section X Financial Report” of this report.
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1. Statement of compliance with the Accounting Standards for Business Enterprises
The financial statements have been prepared by the Company in compliance with the China Accounting
Standards for Business Enterprises, and give an accurate and complete view of the Company's financial
position, operating results, changes in shareholders' equity, cash flow and other related information.
2. Accounting period
The accounting year of the Company is from January 1 to December 31 of each calendar year.
3. Operating cycle
√ Applicable □ Not applicable
The operating cycle of the Company's businesses is short; the Company adopts 12 months as the
liquidity classification criteria for assets and liabilities.
4. Recording currency
The recording currency of the Company is RMB.
5. Accounting treatment for business combinations (mergers) involving enterprises under
common control and business combinations involving enterprises not under common control
√ Applicable □ Not applicable
1. Accounting treatments for enterprise mergers under common control
The assets and liabilities acquired by the Company through an enterprise merger are measured at the
carrying value of the acquiree in the consolidated financial statements of the ultimate controlling party at
the date of the merger. The Company adjusts the capital reserve in accordance with the difference
between the carrying value of the owner's equity of the acquiree in the consolidated financial statements
of the ultimate controlling party and the carrying value of the consideration paid for the merger or the
total nominal value of the issued shares. If the capital reserve is insufficient to offset the difference,
retained earnings shall be adjusted.
2. Accounting treatments for enterprise mergers not under common control
Where the cost of the merger is higher than the fair value proportion of the net identifiable assets
acquired from the acquiree in the merger on the acquisition date, the Company recognizes such
difference as goodwill. Where the cost of merger is lower than the fair value of the net identifiable assets
acquired from the acquiree in the merger on the acquisition date, the Company shall recheck the
measurement of the acquired fair value of the acquiree's identifiable assets, liabilities or contingent
liabilities, as well as the cost of merger. If the cost of the merger remains lower than the fair value of the
net identifiable assets acquired from the acquiree in the merger after the recheck, the difference shall be
included in the current period's profit or loss.
6. Preparation of consolidated financial statements
√ Applicable □ Not applicable
1. The parent company incorporates all subsidiaries under its control into the consolidated financial
statements. Based on the financial statements of the parent company and its subsidiaries, the
consolidated financial statements are prepared by the parent company in accordance with the Accounting
Standards for Business Enterprises No. 33 - Consolidated Financial Statements.
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2. Relevant accounting treatment of acquisition and disposal of or disposal and acquisition of equity of
the same subsidiary in two consecutive accounting years: the acquisition of the equity of the acquiree is
made with aims to control its operating and financial policies and to obtain long-term benefits from its
operating activities. When the right to control the acquiree is acquired, it shall be included in the
consolidated financial statements. Due to changes in the Company's business plan arrangements, etc., if
the Company disposes of the equity of the acquiree in the next accounting year to the extent of losing
control over it, the acquiree will be excluded from the consolidated financial statements when it is no
longer controlled by the Company.
7. Classification of joint arrangement and accounting treatment for joint operation
√ Applicable □ Not applicable
1. A joint arrangement can be divided into joint operation and joint venture.
2. When the Company is involved in a joint operation, the following items related to the share of interest
in joint operation are recognized:
(1) The solely-held assets, and jointly owned assets according to the shareholding;
(2) The solely-assumed liabilities, and jointly undertaken liabilities according to the shareholding;
(3) Income incurred from disposing of the Company's share of output under the joint operation;
(4) Income incurred from disposing of assets of joint operation according to the Company's share;
(5) The solely-incurred expenses, and expenses incurred from joint operation according to the
Company's share.
8. Standards for determination of cash and cash equivalents
Cash presented in the cash flow statement refers to cash on hand and deposits that can be readily
withdrawn on demand. Cash equivalents refer to the short-term and highly liquid investments that are
readily convertible to known amounts of cash and subject to an insignificant risk of change in value.
9. Foreign currency transactions and translation of foreign-currency statements
√ Applicable □ Not applicable
1. Translation of foreign currency transactions
Foreign currency transactions are translated into RMB at the approximate spot rate on the transaction
date during initial recognition. On the balance sheet date, the foreign currency monetary items are
translated based on the spot rate on the balance sheet date. The exchange difference arising from the
different exchange rate is included in the current profit or loss, except the exchange difference between
the principal and interest of the foreign currency borrowed for meeting capitalization requirements. The
foreign currency non-monetary items measured at historical cost are also translated based on the
approximate rate of the spot rate on the transaction date, and the RMB amount is not changed. The
foreign currency non-monetary items measured at fair value are translated based on the spot rate on the
determination date of the fair value, and the difference is included in the current profit or loss or other
comprehensive income.
2. Translation of foreign-currency financial statements
Assets and liabilities items in the balance sheet are translated at the spot rates prevailing at the balance
sheet date. Owners' equity items other than “undistributed profit” are translated at the spot rates on the
transaction dates. Income and expense items in the income statement are translated at the approximate
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rates of the spot rates on the transaction dates. Any difference incurred from the translation of
foreign-currency financial statements by the above method is included in other comprehensive income.
10. Financial instruments
√ Applicable □ Not applicable
1. Classification of financial assets and financial liabilities
Financial assets are classified into the following three categories during initial recognition: (1) financial
assets measured at amortized cost; (2) financial assets measured at fair value with changes included in
other comprehensive income; (3) financial assets measured at fair value with changes included in current
profit or loss.
Financial liabilities are divided into the following four categories during initial recognition: (1) financial
liabilities measured at fair value with changes included in current profit or loss; (2) financial liabilities
from failure of transfer of financial assets to meet the derecognition conditions or continued involvement
in transferred financial assets; (3) Financial guarantee contracts not belonging (1) or (2) above, and loan
commitments that are given at a rate lower than the market interest rate, and not in the case described in
(1) above; (4) financial liabilities measured at amortized cost.
2. Recognition basis, measurement method and derecognition conditions for financial assets and
financial liabilities
(1) Recognition basis and initial measurement method for financial assets and financial liabilities
One financial asset or financial liability is recognized when the Company becomes one party of a
financial instrument contract. The financial assets or financial liabilities are measured at the fair value
during initial recognition. For financial assets and financial liabilities measured at fair value with
changes included in current profit or loss, relevant transaction expenses are directly included in the
current profit or loss; for other kinds of financial assets or financial liabilities, relevant transaction
expenses are included in the amount of initial recognition. However, where the accounts receivable
initially recognized by the Company do not contain a significant financing component or the Company
does not consider the financing component in the contract of less than one year, the initial measurement
is made according to the transaction price defined in the Accounting Standards for Business Enterprises
No. 14 – Revenue.
(2) Subsequent measurement of financial assets
1) Financial assets measured at amortized cost
Such financial assets are subsequently measured at amortized cost using the effective interest method.
The gains and losses incurred by the financial assets measured at amortized cost but not belonging to
any hedging relationship are included in the current profit or loss during derecognition, reclassification,
amortization according to the effective interest method or impairment recognition.
2) Debt instrument investment measured at fair value with changes included in other comprehensive
income
The method of subsequent measurement at the fair value is adopted. The interest, impairment losses or
gains, and exchange gains and losses based on the effective interest method are included in the current
profit or loss, and other gains or losses are included in other comprehensive income. During
derecognition, the accumulated gains or losses previously included in other comprehensive income are
transferred from other comprehensive income to the current profit or loss.
3) Equity instrument investment measured at fair value with changes included in other comprehensive
income
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The method of subsequent measurement at the fair value is adopted. The dividends obtained (except for
the part from investment cost recovery) shall be included in the current profit or loss, and other gains or
losses are included in other comprehensive income. During derecognition, the accumulated gains or
losses previously included in other comprehensive income are transferred from other comprehensive
income and included in retained earnings.
4) Financial assets measured at fair value with changes included in the current profit or loss
The method of subsequent measurement at fair value is adopted. The generated gains or losses
(including interest and dividend income) are included in the current profit or loss, unless the financial
assets belong to part of a hedging relationship.
(3) Subsequent measurement of financial liabilities
1) Financial liabilities measured at fair value with changes included in the current profit or loss
Such financial liabilities include financial liabilities held for trading (including derivative instruments
belonging to financial liabilities) and those designated as financial liabilities measured at fair value with
changes included in the current profit or loss. As for such financial liabilities, the method of subsequent
measurement at the fair value is adopted. The fair value changes of financial liabilities measured at fair
value with said change included in the current profit or loss due to an adjustment in the Company's own
credit risk are included in other comprehensive income, unless the treatment will cause or enlarge the
accounting mismatch in the profit or loss. Other gains or losses generated from such financial liabilities
(including interest expense, except the fair value changes arising from the credit risk adjustment of the
Company) shall be included in the current profit or loss, unless the financial liabilities belong to part of
the hedging relationship. During derecognition, the accumulated gains or losses previously included in
other comprehensive income are transferred from other comprehensive income and included in retained
earnings.
2) Financial liabilities from failure of transfer of financial assets to meet the derecognition conditions or
continued involvement in transferred financial assets
Measurement shall be performed in accordance with the Accounting Standards for Business Enterprises
No. 23 - Transfer of Financial Assets.
3) Financial guarantee contracts not belonging (1) or (2) above, and loan commitments that are given at
a rate lower than the market interest rate, and not in the case described in (1) above;
The subsequent measurement is made at the higher one of the following two amounts, after initial
recognition: ① loss provisions determined according to regulations on impairment of financial
instruments; ② balance of the initially recognized amount after deducting cumulative amortization
recognized in accordance with the regulations set out in the Accounting Standards for Business
Enterprises No. 14 – Revenue.
4) Financial liabilities measured at amortized cost
The measurement at amortized cost using the effective interest method is adopted. The gains and losses
incurred by the financial liabilities measured at amortized cost but not belonging to any hedging
relationship are included in the current profit or loss during derecognition or amortization in accordance
with the effective interest method.
(4) Derecognition of financial assets and financial liabilities
1) Financial assets satisfying one of the following conditions are derecognized:
① The contract right to collect cash flow from the financial assets has been terminated;
② The financial assets have been transferred and such transfer meets the provisions for derecognition of
financial assets in the Accounting Standards for Business Enterprises No. 23 - Transfer of Financial
Assets.
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2) When the existing obligations under the financial liabilities (or part thereof) are released, such
financial liabilities (or that part thereof) are derecognized.
3. Recognition basis and measurement method for transfer of financial assets
If the Company has transferred almost all the risks and rewards related to the ownership of financial
assets, the financial assets are derecognized, and the rights and obligations resulting from or retained in
the transfer are separately recognized as assets or liabilities. In case that almost all the risks and rewards
related to the ownership of the financial assets are retained, the recognition of the transferred financial
assets is continued. In the case that almost all the risks and rewards related to the ownership of the
financial assets are neither transferred nor retained, it shall be treated in the following scenarios: (1) if
control over the financial assets is not retained, the financial assets shall be derecognized, and the rights
and obligations resulting from or retained in the transfer are separately recognized as the assets or
liabilities; (2) if control over the financial assets is retained, the relevant financial assets are recognized
according to the degree of continued involvement in the transferred financial assets, and the relevant
liabilities are recognized accordingly.
If the transfer of an entire financial asset satisfies the conditions for derecognition, the difference
between the two amounts below shall be included in the current profit or loss: (1) Carrying value of the
transferred financial assets at the date of derecognition; (2) The sum of consideration received for the
transfer of the financial asset, plus the corresponding derecognized portion of accumulated change in fair
value previously included in other comprehensive income (in cases where the transferred financial asset
is debt instrument investment measured at fair value with changes included in other comprehensive
income). If part of the financial asset is transferred and the transfer satisfies the conditions for
derecognition, the overall carrying value before the transfer of the financial asset is allocated according
to their respective relative fair value at the transfer date between the portion of the derecognized part and
the remaining part, and the difference between the two amounts below is included in the current profit or
loss: (1) carrying value of the derecognized part; (2) the sum of consideration for the derecognized part,
plus the corresponding derecognized part of accumulated change in fair value previously included in
other comprehensive income (in cases where the transferred financial assets are debt instrument
investments measured at fair value with changes included in other comprehensive income).
4. Method of determining the fair value of financial assets and financial liabilities
The Company adopts valuation techniques appropriate to the prevailing circumstances with the support
of sufficient data and other information available, to determine the fair value of relevant financial assets
and financial liabilities. The Company divides the inputs for the estimation technique into the following
levels and uses them in turn:
(1) The input of the first level is the unadjusted quotation of the same assets or liabilities that can be
obtained on the measurement date in the active market;
(2) The input of the second level is the directly or indirectly observable input of related assets or
liabilities except the input of the first level, including: the quotation of similar assets or liabilities in an
active market; the quotation of the same or similar assets or liabilities in an inactive market; other
observable inputs other than quotation, such as the interest rate and yield curves that can be observed
during the normal quotation intervals; and the inputs for market validation;
(3) The input of the third level is the unobservable input of related assets or liabilities, including interest
rates that cannot be observed directly or cannot be verified according to observable market data, stock
volatility, future cash flows of retirement obligations borne during the business merger, and financial
forecasts based on its own data.
5. Impairment of financial instruments
(1) Impairment measurement and accounting treatment of financial instruments
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Based on the expected credit loss, the Company carries out accounting treatment for impairment and
recognizes the loss provision for the financial assets measured at amortized cost, the debt instrument
investment measured at fair value with changes included in other comprehensive income, contract assets,
lease receivables, loan commitment other than financial liabilities measured at fair value with changes
included in the current profit or loss, and the financial guarantee contracts of financial liabilities not
measured at fair value with changes included in the current profit or loss or financial liabilities not from
failure of transfer of financial assets to meet the derecognition conditions or continued involvement in
transferred financial assets.
Expected credit loss refers to the weighted average of credit losses of financial instruments weighted by
the risk of default. Credit loss refers to the balance between all contractual cash flows discounted
according to the original effective interest rate and receivables under contract by the Company and all
cash flows expected to be collected, i.e. the present value of all cash shortages. The purchased or
underlying financial assets of the Company with credit impairment incurred shall be discounted
according to their effective interest rate upon credit adjustment.
For purchased or underlying financial assets with credit impairment incurred, only the accumulative
changes in the expected credit loss in the whole duration after initial recognition shall be recognized by
the Company as loss provision on the balance sheet date.
For receivables and contract assets from transactions in accordance with the Accounting Standards for
Business Enterprises No. 14 - Revenue, excluding significant financing components or without
consideration, by the Company, to financing components in the contract of no more than one year, the
Company measures the loss provision according to the amount equal to the expected credit loss in the
whole duration by applying the simplified measurement method.
For lease receivables as well as receivables and contract assets from transactions in accordance with the
Accounting Standards for Business Enterprises No. 14 - Revenue, including significant financing
components, the Company measures the loss provision according to the amount equal to the expected
credit loss in the whole duration by applying the simplified measurement method.
For financial assets other than the above measurement methods, the Company shall, on each balance
sheet date, assess whether their credit risk has increased significantly since initial recognition. If the
credit risk has increased significantly since the initial recognition, the Company will measure the loss
provision based on the amount of expected credit loss in the whole duration; if the credit risk has not
significantly increased since the initial recognition, the Company will measure the loss provision based
on the amount of expected credit loss for the financial instruments in the next 12 months.
The Company determines whether the credit risk of financial instruments has increased significantly
since initial recognition by utilizing the available, reasonable and well-grounded information, including
forward-looking information, and comparing the default risks of the financial instruments on the balance
sheet date and on the initial recognition date.
If the Company determines that the financial instruments bear a low credit risk on the balance sheet date,
it assumes that the credit risk of the financial instruments has not increased significantly since initial
recognition.
The Company evaluates the expected credit risk and measures the expected credit loss based on single
financial instruments or portfolio of financial instruments. When based on the portfolio of financial
instruments, the Company divides financial instruments into different portfolios on the basis of their
common risk characteristics.
The Company re-measures the expected credit loss on each balance sheet date, and the increased or
reversed amount of the loss provision arising therefrom, as losses or gains from impairment, shall be
included in the current profit or loss. For financial assets measured at amortized cost, the loss provision
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deducts the carrying value of the financial assets listed in the balance sheet; for the debt investment
measured at fair value with changes included in other comprehensive income, the Company recognizes
its loss provision in other comprehensive income without deducting the carrying value of the financial
assets.
(2) Financial instruments with expected credit risk assessed and expected credit loss measured on a
portfolio basis
Item Basis for determining the Method for measurement of
portfolio expected credit loss
Calculating the expected credit
loss by the default risk exposure
and the expected credit loss rate
in the next 12 months or in the
Other receivables - aging
Age whole duration by referring to
portfolio
historical experience in credit
loss and according to the current
situation and the forecast on
future economic conditions
(3) Receivables and contract assets with expected credit loss measured by portfolio
1) Portfolio details and method for measurement of expected credit loss
Item Basis for determining the Method for measurement of
portfolio expected credit loss
Calculating the expected credit
loss by the default risk exposure
and the expected credit loss rate
in the whole duration by
Receivables financing - bank
Note type referring to historical experience
acceptance note
in credit loss and according to
the current situation and the
forecast on future economic
conditions
Calculating the expected credit
loss by preparing a comparison
table between age of accounts
receivable and expected credit
Accounts receivable - aging loss rate in the whole duration
Age
portfolio by referring to historical
experience in credit loss and
according to the current situation
and the forecast on future
economic conditions
2) Accounts receivable - the comparison table between age of aging portfolio and expected credit loss
rate in the whole duration
Accounts receivable
Age
Expected credit loss rate (%)
Within 1 year (inclusive, same for below) 5
1-2 years 30
2-3 years 50
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Above 3 years 100
6. Offset of financial assets and financial liabilities
The financial assets and financial liabilities are listed in the balance sheet respectively without offsetting.
However, when the following conditions are met, the financial assets and liabilities are presented at the
net amount after mutual offset in the balance sheet: (1) the Company has the legal right of offsetting the
recognized amount and such legal right is currently enforceable; (2) the Company plans to settle by net
amount or simultaneously realize the financial assets and clear off the financial liabilities.
When the financial assets that do not meet derecognition conditions are transferred, the Company does
not offset the transferred financial assets with the relevant liabilities.
11. Notes receivable
Determination and accounting treatment of the expected credit loss of notes receivable
□ Applicable√ Not applicable
12. Accounts receivable
Determination and accounting treatment of the expected credit loss of accounts receivable
√ Applicable □ Not applicable
Refer to “10. Financial instruments” in “V. Significant accounting policies and accounting estimates” of
“Section X Financial Report” of this report for details.
13. Receivables financing
√ Applicable □ Not applicable
Refer to “10. Financial instruments” in “V. Significant accounting policies and accounting estimates” of
“Section X Financial Report” of this report for details.
14. Other receivables
Determination and accounting treatment of the expected credit loss of other receivables
√ Applicable □ Not applicable
Refer to “10. Financial instruments” in “V. Significant accounting policies and accounting estimates” of
“Section X Financial Report” of this report for details.
15. Inventory
√ Applicable □ Not applicable
1. Classification of inventories
Inventories include finished goods or commodities held for sale in the ordinary course of business,
goods in process during the production, materials consumed in the course of production and rendering of
labor services.
2. Valuation method of delivered inventories
The moving weighted average method is adopted for delivered inventories.
3. Basis for the determination of net realizable value of inventories
At the balance sheet date, inventories are measured at the lower of cost and net realizable value, and
provision for impairment of inventories is made based on the positive difference between a single
inventory cost and its net realizable value. The net realizable value of inventories directly for sale is
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determined by the amount of the estimated selling price after deducting the estimated selling expenses
and relevant taxes during the ordinary course of production and business; the net realizable value of
inventories required to be processed is determined by the amount of the estimated selling price of the
finished products after deducting the estimated cost to completion, the estimated selling expenses and
relevant taxes during the ordinary course of production and business. On the balance sheet date, the net
realizable value is determined separately for the two parts of the same inventory with or without contract
price, and is compared with the relevant costs to separately determine the amount withdrawn or reversed
for provision for impairment of inventories.
4. Inventory system
The Company adopts a perpetual inventory system.
5. Amortization of low-value consumables and packaging materials
(1) Low-value consumables
Amortization is performed by the immediate write-off method.
(2) Packaging materials
Amortization is performed by the immediate write-off method.
16. Contract assets
(1). Recognition methods and standards of contract assets
√ Applicable □ Not applicable
The rights of the Company to collect consideration from the customer unconditionally (i.e. only
depending on time) are presented as receivables; the rights (depending on other factors than time) to
collect consideration for transferring goods to the customer are presented as contract assets.
(2). Determination and accounting treatment of the expected credit loss of contract assets
□ Applicable√ Not applicable
17. Assets held for sale
□ Applicable √ Not applicable
18. Debt investments
Determination and accounting treatment of the expected credit loss of debt investments
□Applicable√ Not applicable
19. Other debt investments
Determination and accounting treatment of the expected credit loss of other debt investments
□ Applicable√ Not applicable
20. Long-term receivables
Determination and accounting treatment of the expected credit loss of long-term receivables
□ Applicable√ Not applicable
21. Long-term equity investments
√ Applicable □ Not applicable
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1. Joint control or significant influence criterion
Joint control is the contractually agreed sharing of control of an arrangement. It exists only when
decisions about the relevant activities of the arrangement require the unanimous consent of the parties
sharing control. Significant influence refers to the power to participate in the decision-making process
on the financial and operating policies of the investee. It cannot control or jointly control the formulation
of such policies with other parties.
2. Determination of investment cost
(1) For an enterprise merger under common control: where the merging party pays cash, transfers
non-cash assets, bears debts or issues equity securities as consideration of the merger, the initial
investment cost is the share with reference to the carrying value of the owners' equity of the acquiree in
the consolidated financial statements of the ultimate controlling party on the date of merger. The
difference between the initial investment cost of long-term equity investment and the carrying value of
the consideration paid for the merger or total nominal value of the issued shares is adjusted to capital
reserve. If the capital reserve is not sufficient to offset the difference, the retained earnings are adjusted.
The Company judges whether the item is a “package deal” via long-term equity investment formed by
an enterprise merger under common control through multiple transactions. For the “package deal”,
multiple deals are subject to accounting treatment as one deal with control rights having been acquired.
For items that do not belong to the “package deal”, the initial investment cost is determined on the basis
of the share with reference to the carrying value of the net assets of the acquiree in the consolidated
financial statements of the ultimate controlling party on the date of merger. The difference between
initial investment cost of long-term equity investment at the date of merger and the sum of the carrying
amount of long-term equity investment before merger and carrying value of newly paid consideration for
additional shares acquired on the date of merger is to adjust capital reserve. If the capital reserve is
insufficient to offset the difference, the retained earnings are adjusted.
(2) For the business merger not under common control, the fair value of consideration paid for merger is
regarded as the initial investment cost on the acquisition date.
For the long-term equity investment achieved by the Company via business merger not under common
control through several transactions, the relevant accounting treatment is based on individual financial
statements or consolidated financial statements:
1) In individual financial statements, the initial investment cost calculated by the cost method instead is
the sum of the carrying value of the equity investment originally held and the newly increased
investment cost.
2) In the consolidated financial statements, the item is determined whether it is a “package deal”. For the
“package deal”, multiple deals are subject to accounting treatment as one deal with control rights having
been acquired. For items that do not belong to the “package deal”, the equity of the acquiree held before
the acquisition date is re-measured at the fair value of this equity on the acquisition date, and the
difference between the fair value and its carrying value is included in the current investment income. If
the equity of the acquiree held before the acquisition date is related to other comprehensive income
under the equity method, the other related comprehensive income is converted into the current income
on the acquisition date, excluding the other comprehensive income derived from changes of net
liabilities or net assets due to re-measurement on defined benefit plan by the investee.
(3) For cases other than business merger: If it is acquired with cash, the initial investment cost shall be
the actual payment. If it is acquired through issuing equity securities, the initial investment cost is the
fair value of the equity securities in issue. If it is acquired through debt restructuring, the initial
investment cost is determined based on the Accounting Standards for Business Enterprises No. 12 - Debt
Restructuring. If it is acquired through the exchange of non-monetary assets, the initial investment cost
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is determined based on the Accounting Standards for Business Enterprises No. 7 - Exchange of
Non-monetary Assets.
3. Subsequent measurement and recognition of profit or loss
For long-term equity investment controlled by the investee, the cost method is adopted for accounting.
For the long-term equity investment of associates and joint ventures, the equity method is adopted for
accounting.
4. Treatment of disposal through several transactions until the loss of control of investment in
subsidiaries
(1) Individual financial statements
For disposal of equity, the difference between the carrying value and the consideration actually received
is included in the current profit or loss. The accounting of remaining equity is completed by the equity
method in case of significant influence on the investee or implementation of joint control with other
parties. However, in case of no control, joint control or significant influence on the investee, the
accounting of remaining equity must comply with the relevant provisions of the Accounting Standards
for Business Enterprises No.22 - Recognition and Measurement of Financial Instruments.
(2) Consolidated financial statements
1) Loss of control upon disposal of investment in subsidiary through multiple transactions, and not
belonging to the “package deal”
Before the loss of control, the difference between the price of disposal and the subsidiary's share of net
assets entitled from the disposal of long-term equity investment cumulatively calculated from the
acquisition date or the date of merger, is adjusted to capital reserve (capital premium). If the capital
premium is insufficient to offset the difference, the retained earnings are adjusted.
When control over the original subsidiary is lost, the remaining equity is re-measured at fair value as at
the date on which the control is lost. The difference between the sum of the consideration received from
equity disposal and the fair value of the remaining equity minus the share of the net assets of the original
subsidiary proportionate to the original shareholding accumulated from the date of acquisition or merger
is included in investment gains of the period during which the control is lost, and meanwhile, the
goodwill is offset. Other comprehensive income related to the equity investment in the original
subsidiary is transferred to investment gains of the period during which the control is lost.
2) Loss of control upon disposal of investment to subsidiaries through multiple transactions, and
belonging to the “package deal”
Accounting treatment is made by taking each transaction as one transaction disposing the subsidiary and
losing the control right. However, the difference between the amount received each time for disposal
before the control is lost and the net assets of said subsidiary corresponding to the disposal of investment
is recognized as other comprehensive income in the consolidated financial statements, and is transferred
to profit or loss of the period during which the control is lost upon loss of control.
22. Investment property
(1). In case of cost measurement model:
Depreciation or amortization method
1. Investment property includes leased land use rights, land use rights held for transfer upon appreciation,
and rental buildings.
2. The cost method is employed for initial measurement of investment property, and cost model for
subsequent measurement. Depreciation or amortization shall be withdrawn using the same method as
that for fixed assets and intangible assets.
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23. Fixed assets
(1). Conditions for recognition
√ Applicable □ Not applicable
Fixed assets are tangible assets that are held for the sake of production of goods, rendering of services,
lease or business management, with a service life of more than one accounting year. A fixed asset is
recognized when related economic benefits are likely to flow into the Company and the cost of this fixed
asset can be measured reliably.
(2). Method for depreciation
√ Applicable □ Not applicable
Method for Useful lives of Annual
Category Residual value
depreciation depreciation (year) depreciation rate
Property and Straight-line 10 or 30 5% 9.50% or 3.17%
buildings method
General Straight-line 3-10 5% 31.67%-9.50%
equipment method
Special Straight-line 3-10 5% 19.00%-9.50%
equipment method
Transportation Straight-line 5 5% 19.00%
vehicles method
(3). Recognition basis, valuation and depreciation method of fixed assets under financial lease
□ Applicable√ Not applicable
24. Construction in progress
√ Applicable □ Not applicable
1. Construction in progress is recognized when the following conditions are satisfied at the same time:
economic benefits are likely to flow into the Company; and the costs of such construction in progress
can be measured reliably. Construction in progress is measured at the actual cost incurred to make the
assets ready for their intended use.
2. Construction in progress is transferred to fixed assets at the actual cost when it meets the expected
condition for service. When construction in progress has achieved serviceable conditions but final
settlement has not been finished yet, it is first transferred to fixed assets as per estimated value. After
final settlement is finished, the estimated value is adjusted based on actual cost, but the depreciated
amount will not be adjusted.
25. Borrowing costs
√ Applicable □ Not applicable
1. Criteria for recognition of capitalized borrowing costs
For borrowing costs incurred by the Company that are directly attributable to the acquisition and
construction or production of assets qualified for capitalization, the costs will be capitalized and
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included in the costs of the related assets. Other borrowing costs shall be recognized as expenses as they
are incurred and are included in the current profit or loss.
2. Capitalization period of borrowing costs
(1) Capitalization of borrowing costs begins when the following three conditions are fully satisfied: 1)
expenditures for the assets have been incurred; 2) borrowing costs have been incurred; 3) acquisition and
construction or production that are necessary to make the assets ready for the intended use or sale have
begun.
(2) Where abnormal interruption of the assets eligible for capitalization occurs during the acquisition and
construction or production process and such interruption has lasted for more than 3 consecutive months,
the capitalization of borrowing costs is suspended; the borrowing costs during the interruption are
recognized as expenses of the current period till resumption of acquisition and construction or
production of the assets.
(3) Capitalization of borrowing costs is suspended during periods in which the asset qualified for
capitalization under acquisition and construction or production is ready for the intended use or sale.
3. Capitalization rate and amount of borrowing costs
In case of special borrowing for the acquisition and construction or production of assets meeting the
capitalization conditions, the interest amount to be capitalized is recognized after deducting the bank
interests for the unused portion or the investment income for temporary investment from the interest
costs (including recognized depreciation or amortization of premium under effective interest method)
actually incurred in the current period of specific borrowing; for general borrowing occupied for the
acquisition and construction or production of assets meeting the capitalization conditions, the interest
amount to be capitalized shall be determined by the result obtained by multiplying the capitalization rate
of occupied general borrowing with the weighted average value of the asset expenditure for the
accumulated expenditure exceeding the specific borrowing portion.
26. Biological assets
□ Applicable √ Not applicable
27. Oil and gas assets
□ Applicable √ Not applicable
28. Right-of-use assets
□ Applicable √ Not applicable
29. Intangible assets
(1). Valuation method, useful life and impairment test
√ Applicable □ Not applicable
1. Intangible assets, including land use rights, patent rights and non-patented technologies, are measured
at cost.
2. Amortization for the intangible assets with limited useful life is reasonably performed in the expected
realization pattern according to economic benefits related to the intangible assets within its useful life; if
the expected realization pattern cannot be reliably determined, the straight-line method shall be adopted
for amortization. The specific year information is shown as below:
Item Useful lives of
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amortization (year)
Land use rights 40 or 50
Non-patented 5
technology
Office software 3-10
Patent rights 5
Customer resources 3
Trademark rights 10
(2). Accounting policy regarding the expenditure on the internal research and development
√ Applicable □ Not applicable
Expenses incurred during the research phase of the internal research and development projects are
included in the current profit or loss. Expenses in the development phase are recognized as intangible
assets when all of the following conditions are satisfied: (1) It is technically feasible to complete the
intangible assets so that it will be available for use or sale; (2) there is an intention to complete the
intangible assets for use or sale; (3) the intangible assets can produce economic benefits, including that
there is evidence that the products produced using the intangible assets has a market or the intangible
assets itself has a market; if the intangible assets is for internal use, there is evidence that there exists
usage for the intangible assets; (4) there is sufficient support in terms of technology, financial resources
and other resources in order to complete the development of the intangible assets, and there is capability
to use or sell the intangible assets; (5) the expenses attributable to the development phase of the
intangible assets can be measured reliably.
30. Impairment of long-term assets
√ Applicable □ Not applicable
For such long-term assets as long-term equity investment, investment properties measured by the cost
model, fixed assets, construction in progress and intangible assets with limited useful life, in case that
there are signs indicating impairment on the balance sheet date, the recoverable amount shall be
estimated. Whether there is a sign of impairment or not, the goodwill acquired in the enterprise merger
and intangible assets with indefinite useful life is tested for impairment each year. The impairment test
on goodwill is carried out in combination with its related asset group or asset group portfolio.
In case the recoverable amount of the above long-term assets is less than its carrying value, the provision
for asset impairment is recognized according to its differences and included in the current profit or loss.
31. Long-term deferred expenses
√ Applicable □ Not applicable
The long-term deferred expenses involve all expenses already paid with amortization period of more
than 1 year (excluding 1 year). Long-term deferred expenses are entered in an account at the actual
amounts, and are amortized by even amortization within the benefit period or prescribed amortization
period. If the long-term deferred expenses cannot provide benefit to future accounting periods, then all
of the amortized value of the unamortized long-term deferred expenses is transferred into the current
profit or loss.
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32. Contract liabilities
Recognition method of contract liabilities
√ Applicable □ Not applicable
The Company recognizes the obligation to transfer goods to customers for the consideration received or
receivable from the customers as contract liabilities.
33. Employee remuneration
(1). Accounting treatment for short-term remuneration
√ Applicable □ Not applicable
During the accounting period when employees provide service for the Company, the short-term
remuneration actually incurred will be recognized as liabilities, and will be included in the current profit
or loss or the costs of the related assets.
(2). Accounting treatment for post-employment benefits
√ Applicable □ Not applicable
Post-employment benefits are divided into the defined contribution plan and defined benefit plan.
(1) During the accounting period when employees provide service for the Company, the amount to be
deposited as calculated according to the defined contribution plan shall be recognized as liabilities, and
will be included in the current profit or loss or the costs of the related assets.
(2) The accounting treatment for the defined benefit plan generally comprises the following steps:
1) According to the expected cumulative benefit unit method, the demographic variables, financial
variables, etc. shall be estimated through unbiased and mutually consistent actuarial assumption, so as to
measure the obligations arising from the defined benefit plan and determine the period of relevant
obligations. In addition, the obligations generated from the defined benefit plan shall be discounted, so
as to determine the present value of defined benefit plan obligations and current service cost;
2) In case of assets in the defined benefit plan, the deficit or surplus generated from the present value of
obligations of the defined benefit plan minus the fair value of the assets of defined benefit plan is
recognized as net liabilities or net assets in the defined benefit plan. When the defined benefit plan has a
surplus, the net assets of the defined benefit plan are measured at the lower of the surplus of the defined
benefit plan and the asset caps;
3) At the end of the period, the employee remuneration costs generated by the defined benefit plan are
recognized as three parts, i.e., service costs, net interest of the net liabilities or net assets of the defined
benefit plan, and the changes generated by re-measurement of the net liabilities or net assets of the
defined benefit plan, in which the service costs and the net interest of the net liabilities or net assets of
the defined benefit plan are included in the current profit or loss or the costs of the related assets, and the
changes generated by re-measurement of the net liabilities or net assets of the defined benefit plan are
included in other comprehensive income, and cannot be reversed to profit or loss in the subsequent
accounting period. However, the amount recognized in other comprehensive income can be transferred
within the equity scope.
(3). Accounting treatment for termination benefits
√ Applicable □ Not applicable
If termination benefits are provided to employees, the employee remuneration liabilities arising from the
termination benefits are recognized on the earlier date of the following and included in the current profit
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or loss: (1) when the Company cannot unilaterally withdraw the termination benefits provided due to
termination of labor relation plan or layoff proposal; (2) when the Company recognizes the cost or
expenses related to the restructuring involving payment of termination benefits.
(4). Accounting treatment for other long-term employees' benefits
√ Applicable □ Not applicable
Other long-term employee benefits satisfying the conditions in the defined contribution plan are treated
in accounting as stipulated in the defined contribution plan; and other long-term benefits beyond that are
treated in accounting as stipulated in the defined benefit plan. In order to simplify related accounting
treatment, the generated employee remuneration costs are recognized as the service cost. The total net
amount of item composed of the net interest of net liabilities or net assets of other long-term employee
benefits and the changes generated from re-measuring net liabilities or net assets of other long-term
employee benefits is included in the current profit or loss or the costs of the related assets.
34. Lease liabilities
□ Applicable√ Not applicable
35. Estimated liabilities
√ Applicable □ Not applicable
1. The obligations imposed by contingencies, such as providing external guarantee, lawsuits, product
quality assurance and onerous contracts, become the current obligations assumed by the Company,
which are determined by the Company as estimated liabilities when their performance is very likely to
result in economic benefit outflow from the Company and their amount can be measured reliably.
2. The estimated liabilities are initially measured by the Company based on the optimal estimate to be
paid for performing relevant current obligations and their carrying value are reviewed on the balance
sheet date.
36. Share-based payments
√ Applicable □ Not applicable
1. Types of share-based payments
There are equity-settled and cash-settled share-based payments.
2. Relevant accounting treatment of implementing, modifying and terminating the share-based payment
scheme
(1) Equity-settled share-based payments
These equity-settled share-based payments vested immediately after the grant date and exchanged for
employee services shall be included in relevant costs or expenses as per the fair value of the equity
instruments on the grant date, and the capital reserve shall be adjusted accordingly. For equity-settled
share-based payments that are vested only after the services within the waiting period are completed or
the specified performance conditions are satisfied and that are exchanged for employee services, the
services acquired in the current period are included in relevant costs or expenses as per the fair value of
the equity instruments on the grant date based on the optimal estimate of the number of vesting equity
instruments on each balance sheet date within the waiting period, and the capital reserve is adjusted
accordingly.
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The equity-settled share-based payments exchanged for services of other parties are measured as per the
fair value of the services of other parties on the date of acquisition if its reliable measurement is possible.
If the reliable measurement of the fair value of other parties' services is impossible, but that of the equity
instruments is possible, it will be measured as per the fair value of the equity instruments on the date of
acquiring the services and are included in relevant costs or expenses, and the owner's equity is increased
accordingly.
(2) Cash-settled share-based payments
These cash-settled share-based payments vested immediately after the grant date and exchanged for
employee services shall be included in relevant costs or expenses as per the fair value of the liabilities
assumed by the Company on the grant date, and the liabilities shall be increased accordingly. For these
cash-settled share-based payments that are vested only after the services within the waiting period are
completed or the specified performance conditions are satisfied and that are exchanged for employee
services, the services acquired in the current period shall be included in relevant costs or expenses and
corresponding liabilities as per the fair value of the liabilities assumed by the Company based on the
optimal estimate of the vesting conditions on each balance sheet date within the waiting period.
(3) Modifying and terminating the share-based payment scheme
If the fair value of the granted equity instruments is increased, the Company recognizes the increase of
the acquired services according to the increase of the fair value of the equity instruments. If the number
of the granted equity instruments is increased, the Company recognizes the increased fair value of the
equity instruments as the increase of the acquired services accordingly. If the Company modifies the
vesting conditions in a way favorable to employees, the Company considers the modified vesting
conditions when dealing with the vesting conditions.
If the fair value of the granted equity instruments is decreased, the Company continues to recognize the
amount of the acquired services according to the fair value of the equity instruments on the grant date,
without taking into account the decrease of the fair value of the equity instruments. If the number of the
granted equity instruments is decreased, the Company treats the decreased part as cancellation of the
granted equity instruments. If the Company modifies the vesting conditions in a way unfavorable to
employees, the Company will not consider the modified vesting conditions when dealing with the
vesting conditions.
If the Company cancels or settles the granted equity instruments within the waiting period (other than
the cancellation arising from failure to meet the vesting conditions), the cancellation or settlement is
regarded as accelerated vesting treatment to immediately recognize the amount that should be
recognized within the remaining waiting period.
37. Preferred shares, perpetual bonds and other financial instruments
√ Applicable □ Not applicable
According to the relevant standards for financial instruments and the Regulations on the Distinction
between Financial Liabilities and Equity Instruments and Relevant Accounting Treatments (Ministry of
Finance [2014] No.13), for financial instruments such as convertible corporate bonds issued, the
Company shall classify these financial instruments or their components as financial assets, financial
liabilities and equity instruments during initial recognition, based on the contractual terms of the
financial instruments issued and the economic substance they reflect, not only in legal form, but in
combination with the definitions of financial assets, financial liabilities or equity instruments.
On the balance sheet date, for financial instruments classified as equity instruments, the accounting
treatment for interest expense or dividend distribution as the Company's profit distribution, and for
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repurchase, cancellation, etc. as changes in equity is carried out; for financial instruments classified as
financial liabilities, the accounting treatment for interest expense or dividend distribution as borrowing
costs is carried out, and the gains or losses from repurchase or redemption are included in the current
profit or loss.
38. Revenue
(1). Accounting policy applied for revenue recognition and measurement
√ Applicable □ Not applicable
1. Revenue recognition principle
The Company shall, on the commencement date of the contract, evaluate the contract, identify the
individual performance obligations provided in the contract and determine whether to perform them
within a period or at a time point.
The performance obligations shall be deemed to be performed within a period if one of the following
conditions is satisfied, otherwise, it will be deemed performed at a time point: (1) The customer acquires
and consumes the economic benefits brought by the Company's performance while the Company is
performing its obligations; (2) the customer is capable to control the commodities in progress during the
Company's performance; (3) the commodities produced during the Company's performance have
irreplaceable purpose and the Company has the right to collect the amounts for the performance part
already completed to date within the whole contract term.
For the obligations performed within a period, the Company shall recognize the revenue according to the
performance progress in that period. If the performance progress cannot be determined in a reasonable
way, but the incurred costs are expected to be reimbursed, the revenue shall be recognized according to
the incurred amount of costs until the performance progress can be determined in a reasonable way. For
the obligations performed at a time point, the revenue shall be recognized at the time of the customer's
acquiring the control of related commodities or services. The Company shall take into account the
following when judging whether the customer has acquired the commodity control: (1) The Company
has the current right for collection, namely the customer has the current obligation for payment with
respect to the commodity; (2) the Company has transferred the legal title of the commodity to the
customer, namely the customer has acquired the same; (3) the Company has transferred the physical
commodity to the customer, namely the customer has physical possession of the commodity; (4) the
Company has passed the main risks and return on the commodity's title to the customer, namely the
customer has acquired the same; (5) the customer has accepted the commodity; and (6) there is other
information indicating that the customer has acquired the commodity control.
2. Revenue measurement principle
(1) The Company shall measure the revenue according to the transaction price apportioned to the
individual performance obligations. The transaction price refers to the consideration amount of which
the Company is expected to have right for collection due to transfer of commodities or services to the
customer, excluding the amounts charged on behalf of the third party and expected to refund to the
customer.
(2) In case of variable consideration in the contract, the Company shall determine the optimal estimate
of the variable consideration according to the expected value or the amount most likely to be incurred,
while the transaction price including the variable consideration shall not exceed the amount under the
circumstance where the accumulatively recognized revenue will be highly unlikely to suffer major
reversal when relevant uncertainties are eliminated.
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(3) In case of major financing composition in the contract, the Company shall determine the transaction
price according to the payable amount assumed to be paid by the customer in cash immediately after he
acquires the control of the commodities or services. The difference between the transaction price and the
contract consideration shall be amortized by the effective interest method within the contract term. If the
Company expects, on the commencement date of the contract, that the interval between the customer's
acquisition of the control of the commodities or services and its payment is not more than one year, the
major financing composition in the contract shall not be taken into account.
(4) In case of two or more performance obligations in the contract, the Company shall, on the
commencement date of the contract, apportion the transaction price to the individual performance
obligations according to the relative proportion of the individual sales price of the commodities
undertaken as per the individual performance obligations.
(2). Difference in accounting policy for revenue recognition resulting from different business
models for similar businesses
√ Applicable □ Not applicable
The Company mainly sells cosmetics. It has different sales models classified as distribution, direct
selling and sales on commission.
(1) Distribution
The sales revenue shall be recognized after the Company delivers the products to the buyer according to
the provisions of the contract and the buyer accepts the same.
(2) Direct selling
The sales revenue shall be recognized after the Company delivers the commodities to the consumer, and
the consumer confirms receipt and makes payment.
(3) Sales on commission
The sales revenue shall be recognized after the Company delivers the products to the commissioned
party according to the provisions of the contract and the commissioned party provides the list of sales on
commission to the Company upon selling the products to others.
39. Contract cost
√ Applicable □ Not applicable
The assets associated with the contract acquisition cost include the contract acquisition cost and contract
performance cost.
The incremental cost incurred by the Company for acquiring the contract that is expected to be
recoverable, as the contract acquisition cost, shall be recognized as an asset. If the amortization period of
the contract acquisition cost is no more than one year, it shall be directly included in the current profit or
loss when incurred.
The cost incurred by the Company for performing the contract that falls out of the standard scope of
relevant criteria for stock, fixed assets or intangible assets and that satisfies the following conditions, as
the contract performance cost, shall be recognized as an asset:
1. The cost is directly related to one contract acquired currently or as expected, including direct labor,
direct materials and manufacturing expenses (or similar), costs expressly borne by the customer and
other costs incurred solely in connection with the contract;
2. The cost increases the resources for the Company to perform its obligations in the future;
3. The cost is expected to be recoverable.
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The Company shall amortize the assets related to the contract cost on the same basis as for recognizing
the revenue of the commodities or services in connection with the assets and shall be charged to the
current profit or loss.
If the carrying value of the assets related to the contract cost is higher than the surplus consideration
expected to be acquired for transferring the commodities or services in connection with the assets minus
the cost expected to be incurred, the Company shall make the provision for impairment against the
exceeding part and recognize it as the assets impairment loss. If any changes in the factors for
impairment in previous periods make the surplus consideration expected to be acquired for transferring
the commodities or services in connection with the assets minus the cost expected to incur higher than
the carrying value of the assets, the provision for assets impairment made originally shall be reversed
and included in the current profit or loss, provided that the reversed carrying value of the assets is no
more than that on the reversal date without making the provision for impairment.
40. Government grants
√ Applicable □ Not applicable
1. Government grants are recognized when all of the following conditions are satisfied: (1) The
Company is able to meet the conditions attached to the government grants; (2) the Company is able to
receive the government grants. In case of government grants as monetary assets, they shall be measured
as per the amount received or receivable. In case of government grants as non-monetary assets, they
shall be measured as per the fair value; in case that the fair value cannot be acquired in a reliable way,
they shall be measured as per the nominal amount.
2. Basis of determination and accounting treatment method for government grants related to assets
These government grants that are used for purchasing and constructing or otherwise forming long-term
assets as specified in government documents are classified as government grants related to assets. In
case of no provision in government documents, the government grants shall be determined on the basis
of the essential condition required for obtaining the grants, and shall be considered as related to assets if
the essential condition is purchasing and constructing or otherwise forming long-term assets. The
government grants related to assets shall offset the carrying value of relevant assets or be recognized as
deferred income. If the government grants related to assets are recognized as deferred income, they shall
be included in the profit and loss in a reasonable and systematic way within the useful life of relevant
assets. The government grants measured as per the nominal amount shall be directly included in the
current profit or loss. If related assets are sold, transferred, scrapped or damaged before the end of their
useful life, the related deferred income balance unallocated shall be transferred into the profit and loss in
the current period of assets disposal.
3. Basis of determination and accounting treatment method for government grants related to income
The government grants other than those related to assets are classified as government grants related to
income. If it is difficult to distinguish whether the government grants containing both the part related to
assets and the part related to income are related to assets or income, they shall be entirely classified as
the government grants related to income. The government grants related to income that are used for
compensation for relevant costs or losses in subsequent periods shall be recognized as deferred income,
and included in the current profit or loss or offset relevant costs in the period in which relevant costs or
losses are recognized; those used for compensation for relevant costs or losses that have incurred shall
be directly included in the current profit or loss or offset relevant costs.
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4. The government grants related to daily business activities of the Company shall be included in other
income or offset relevant costs according to the nature of the economic business. The government grants
unrelated to the daily activities of the Company shall be included in non-operating income and expenses.
41. Deferred tax assets/liabilities
√ Applicable □ Not applicable
1. According to the difference between the carrying value of the assets and liabilities and their tax basis
(if the tax basis of the items recognized not as assets and liabilities can be determined according to the
provisions of the tax law, the difference between that tax basis and their carrying amount), the deferred
income tax assets or liabilities shall be calculated and recognized according to the tax rate applicable in
the period where it is expected to recover the assets or liquidate the liabilities.
2. Deferred income tax assets are recognized to the extent that it is very likely to obtain the taxable
income to deduct the deductible temporary differences. If on the balance sheet date, there are conclusive
evidence proving that it is very likely to obtain sufficient taxable income in future periods to deduct the
deductible temporary differences, the deferred income tax assets not recognized yet in previous
accounting periods shall be recognized.
3. If the carrying value of the deferred income tax assets is reviewed on the balance sheet date and it is
very likely to not obtain sufficient taxable income in future periods to deduct their benefits, the carrying
value of the deferred income tax assets shall be written down. When it is very likely to obtain sufficient
taxable income, the amount written down shall be reversed.
4. The current income tax and deferred income tax of the Company are included in the current profit or
loss as the income tax expense or income, except for the income tax arising from the following
circumstances: (1) business merger; (2) transaction or matters recognized directly in the owner's equity.
42. Lease
(1). Accounting treatment of operating lease
□ Applicable √ Not applicable
(2). Accounting treatment of financing lease
□ Applicable √ Not applicable
(3). Determination method and accounting treatment of lease under new lease standards
√ Applicable □ Not applicable
1. The Company as lessee
On the start date of the lease term, the Company recognizes leases with a lease term not exceeding 12
months and no purchase option as short-term leases; leases with low value when individual leased assets
are brand-new assets are recognized as leases of low-value assets. If the Company subleases or is
expected to sublease the leased assets, the original lease is not recognized as a lease of low-value assets.
For all short-term leases and leases of low-value assets, the Company records the lease payments in the
cost of related assets or the current profit or loss by straight-line method over each period of the lease
term.
Except for the above-mentioned short-term leases and leases of low-value assets that adopt simplified
treatment, the Company recognizes leases as right-of-use assets and lease liabilities, on the start date of
the lease term.
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(1) Right-of-use assets
Right-of-use assets are initially measured at cost which includes: 1) the initial measurement amount of
lease liabilities; 2) the lease payments made on or before the start date of the lease term, deducting the
amounts related to the lease incentive given if there is a lease incentive; 3) the initial direct costs
incurred by the lessee; 4) the estimated costs to be incurred by the lessee to dismantle and remove leased
assets, restore the site where the leased assets are located, or restore the leased assets to the condition
agreed upon in the lease terms.
The Company depreciates right-of-use assets by the straight-line method. If it can be reasonably
determined that the ownership of the leased assets will be acquired at the expiration of the lease term,
the Company shall accrue depreciation over the remaining useful life of the leased assets. If it cannot be
reasonably determined that the ownership of the leased assets can be acquired at the expiration of the
lease term, the Company shall accrue depreciation over the lease term or the remaining useful life of the
leased assets, whichever is shorter.
(2) Lease liabilities
On the start date of the lease term, the Company recognizes the present value of the outstanding lease
payments as lease liabilities. When calculating the present value of lease payments, the interest rate
implicit in the lease is used as the discount rate. If the interest rate implicit in the lease cannot be
determined, the Company's incremental borrowing rate is used as the discount rate. The difference
between the lease payment and its present value is regarded as the unrecognized financing expense, and
the interest expense is recognized in each period of the lease term according to the discount rate of the
present value of the recognized lease payment, and is included in the current profit or loss. Variable
lease payments that are not included in the measurement of lease liabilities are included in the current
profit or loss when actually incurred.
After the start date of the lease term, when there is a change in the actual amount of fixed payment, a
change in the estimated payable amount of the guaranteed residual value, a change in the index or ratio
used to determine the lease payment amount, or a change in the evaluation result or actual exercise of
the purchase option, renewal option or termination option, the Company re-measures the lease liabilities
according to the present value of the changed lease payments, and adjusts the carrying value of the
right-of-use assets accordingly. If the carrying value of the right-of-use assets has been reduced to zero,
but the lease liabilities still need to be further reduced, the remaining amount shall be included in the
current profit or loss.
2. The Company as lessor
On the start date of the lease term, the Company classifies the leases that have almost all the risks and
rewards related to the ownership of the leased assets substantially transferred as financial leases, and
other leases as operating leases.
(1) Operating lease
During each period of the lease term, the Company recognizes the lease receipts as rental income by the
straight-line method, capitalizes the initial direct expenses incurred and amortizes the expenses on the
same basis as for rental income recognition, to be included in the current profit or loss in installments.
The variable lease payments obtained by the Company related to operating leases but not included in the
lease receipts are included in the current profit or loss when actually incurred.
(2) Financial lease
On the start date of the lease term, the Company recognizes the financial lease receivables based on the
net lease investment (the sum of the unguaranteed residual value and the present value of the lease
receipts that have not been received on the start date of the lease term discounted at the interest rate
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implicit in lease), and derecognizes financial lease assets. During each period of the lease term, the
Company calculates and recognizes interest income based on the interest rate implicit in the lease.
The variable lease payments received by the Company that are not included in the measurement of net
lease investment are included in the current profit or loss when actually incurred.
43. Other significant accounting policies and accounting estimates
□ Applicable √ Not applicable
44. Changes in significant accounting policies and accounting estimates
(1). Changes in significant accounting policies
□ Applicable √ Not applicable
Description:
1. Since January 1, 2022, the Company has implemented the provisions on “the accounting treatment of
external sales of products or by-products produced by enterprises before the fixed assets are ready for
their intended use or during the research and development process” in the Interpretation No. 15 of the
Accounting Standards for Business Enterprises issued by the Ministry of Finance. The change of
accounting policy has no impact on the Company's financial statements
2. Since January 1, 2022, the Company has implemented the provisions on “the determination of
onerous contracts” in the Interpretation No. 15 of the Accounting Standards for Business Enterprise
issued by the Ministry of Finance. The change of accounting policy has no impact on the Company's
financial statements
(2). Changes in significant accounting estimates
□ Applicable√ Not applicable
45. Others
□ Applicable√ Not applicable
VI. Taxes
1. Major tax types and tax rates
Particulars on major tax types and tax rates
√ Applicable □ Not applicable
Tax type Taxing basis Tax rate
Value added tax The output tax is calculated on the basis of 13%, 9%, 6%, 1%
(“VAT”) the income from sales of products and
taxable income from rendering of services
calculated according to the provisions of
tax law. The difference between the output
tax and the amount after deducting the
input tax which is allowed to be deductible
in the current period is the payable VAT.
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Consumption tax Taxable sales (volume) 15%
Business tax
Urban maintenance Actual turnover tax paid 7%, 5%
and construction tax
Enterprise income tax Taxable income [Note]
Property tax In the case of ad valorem taxation, it is 12%, 1.2%
calculated and paid as per 1.2% of the
remaining value after 30% of the original
value of the property is deducted in a lump
sum; in the case of taxation according to a
lease, it is calculated and paid as per 12%
of the rental income.
Education surcharge Actual turnover tax paid 3%
Surcharge for local Actual turnover tax paid 2%
education
[Note] Descriptions on taxpayers with different enterprise income tax rates
If there are taxpayers with different enterprise income tax rates, the disclosure will be made for
description
√ Applicable □ Not applicable
Name of taxpayer Income tax rate (%)
The Company 15
Huzhou Niuke Technology Co., Ltd. 20
Xuzhou Proya Information Technology Co., Ltd. 20
Xuzhou Laibo Information Technology Co., Ltd. 20
Relevant taxes are calculated and paid according
Korea Younimi Cosmetics Co., Ltd.
to local tax regulations in South Korea
Relevant taxes are calculated and paid according
Hanna Cosmetics Co., Ltd.
to local tax regulations in South Korea
Relevant taxes are calculated and paid according
Hapsode Co., Ltd.
to local tax regulations in South Korea
Relevant taxes are calculated and paid according
Hong Kong Keshi Trading Limited
to local tax regulations in Hong Kong, China
Relevant taxes are calculated and paid according
Hong Kong Xinghuo Industry Limited
to local tax regulations in Hong Kong, China
Hong Kong Wanyan Electronic Commerce Co., Relevant taxes are calculated and paid according
Limited to local tax regulations in Hong Kong, China
Hong Kong Zhongwen Electronic Commerce Co., Relevant taxes are calculated and paid according
Limited to local tax regulations in Hong Kong, China
Relevant taxes are calculated and paid according
Hong Kong Xuchen Trading Limited
to local tax regulations in Hong Kong, China
BOYA (Hong Kong) Investment Management Co., Relevant taxes are calculated and paid according
Limited to local tax regulations in Hong Kong, China
Relevant taxes are calculated and paid according
Proya Europe SARL
to local tax regulations in Luxembourg
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Relevant taxes are calculated and paid according
Japan OR
to local tax regulations in Japan
Taxpayers other than the above 25
2. Tax preference
√ Applicable □ Not applicable
The Company was reviewed as a high-tech enterprise on December 1, 2020 and obtained the High-tech
Enterprise Certificate, with the validity of certification of 3 years and the grace period for enterprise
income tax in 2020-2022. The Company was subject to the enterprise income tax at the preferential rate
of 15% for the Reporting Period.
According to the Notice of the Ministry of Finance and the State Taxation Administration on the
Implementation of Inclusive Tax Relief Policy for Small and Micro Enterprises (CS [2019] No.13), the
Announcement of the State Taxation Administration on Relevant Issues on the Implementation of
Inclusive Tax Relief Policy for Small and Micro Enterprises (Announcement No.2 of the State Taxation
Administration in 2019), the Announcement of the Ministry of Finance and the State Taxation
Administration on the Implementation of Preferential Income Tax Policies for Small and Micro
Enterprises and Individual Industrial and Commercial Households (CS [2021] No.12), and the
Announcement on Further Implementing Preferential Income Tax Policies for Small and Micro
Enterprises (Announcement No.13 of the Ministry of Finance and the State Taxation Administration in
2022), Huzhou Niuke Technology Co., Ltd., Xuzhou Proya Information Technology Co., Ltd., Xuzhou
Laibo Information Technology Co., Ltd., etc. comply with the criteria for tax payment of small and
micro enterprises, and would calculate taxable income as per a reduced tax rate of 12.5% and pay the
enterprise income tax as per the tax rate of 20% for the portion of taxable income not exceeding RMB1
million; and calculate taxable income as per a reduced tax rate of 25% and pay the enterprise income tax
as per the tax rate of 20% for the portion of taxable income exceeding RMB1 million but not exceeding
RMB3 million.
In accordance with the Announcement on Relevant Policies for Deepening the Value-Added Tax Reform
jointly issued by the Ministry of Finance, the State Taxation Administration and the General
Administration of Customs (Announcement No.39 of the Ministry of Finance, the State Taxation
Administration and the General Administration of Customs in 2019) and the Announcement on VAT
Policy to Promote the Rescue and Development of Distressed Industries in the Service Sector
(Announcement No.11 of the Ministry of Finance and the State Taxation Administration in 2022),
Hangzhou Proya Commercial Management Co., Ltd., a subsidiary of the Company, complies with the
conditions for general tax payers engaged in consumer-oriented service industries, and the input tax
deductible in the current period plus 10% would be used for deducting the tax payable from October 1,
2019 to December 31, 2022.
3. Others
□ Applicable√ Not applicable
VII. Notes to the Items in the Consolidated Financial Statements
1. Monetary capital
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
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Item Closing balance Opening balance
Cash on hand 19,280.21 22,348.23
Cash at bank 2,645,842,882.86 2,339,040,989.92
Other monetary capital 54,091,290.02 51,984,911.66
Total 2,699,953,453.09 2,391,048,249.81
Of which: Total cash 73,705,703.81 69,786,305.02
deposited outside China
Other description:
At the end of the period, the scope of restricted use covered the margin for fixed-term deposits of
transformer of RMB306,688.40 in bank deposits, as well as Pinduoduo deposit of RMB5,000,000.00
and Tmall and Alipay deposits of RMB350,000.00 in other monetary capital.
At the beginning of the period, the scope of restricted use covered the margin for fixed-term deposits of
transformer of RMB293,481.72 in bank deposits, as well as the L/C deposit of RMB7,000,000.00, ETC
vehicle deposit of RMB70,000.00, Pinduoduo deposit of RMB5,000,000.00 and Tmall and Alipay
deposits of RMB350,000.00 in other monetary capital.
2. Financial assets held for trading
□ Applicable √ Not applicable
3. Derivative financial assets
□ Applicable √ Not applicable
4. Notes receivable
(1). List by the classification of notes receivable
□ Applicable √ Not applicable
(2). Notes receivable pledged by the Company at the end of the period
□ Applicable √ Not applicable
(3). Notes receivable endorsed or discounted by the Company at the end of the period and not yet
due on the balance sheet date
□ Applicable √ Not applicable
(4). Notes that have been transferred to accounts receivable by the Company at the end of the
period due to the non-performance of the contract of the drawer
□ Applicable √ Not applicable
(5). Disclosed by the classification of bad debt accrual method
□ Applicable √ Not applicable
(6). Information of bad-debt provision
□ Applicable √ Not applicable
(7). Notes receivable actually written off in the current period
□ Applicable √ Not applicable
Other description:
□ Applicable √ Not applicable
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5. Accounts receivable
(1). Disclosed by account age
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Account age Book balance at the end of the period
Within 1 year
Including: Subitem within 1 year
Sub-total within 1 year 73,162,554.67
1 to 2 years 6,551,229.49
2 to 3 years 10,843,929.58
Above 3 years 7,076,930.05
3 to 4 years
4 to 5 years
Above 5 years
Total 97,634,643.79
(2). Disclosed by method of provision for bad debts
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Closing balance Opening balance
Provision for bad Provision for bad
Book balance Book balance
debts debts
Category Carrying Carrying
Provision Provision
Percentage value Percentage value
Amount Amount proportion Amount Amount proportion
(%) (%)
(%) (%)
Provision for bad 16,303, 16.70 16,303,09 100.00 14,489,51 8.89 14,489,51 100.00
debts by item 090.57 0.57 2.75 2.75
Including:
Provision by item 16,303, 16.0 16,303,09 100.00 14,489,51 8.89 14,489,51 100.00
090.57 0.57 2.75 2.75
Provision for bad 81,331, 83.30 7,326,909 9.01 74,004,64 148,581,3 91.11 9,954,744 6.70 138,626,6
debts by portfolio 553.22 .85 3.37 71.95 .05 27.90
Including:
Aging portfolio 81,331, 83.30 7,326,909 9.01 74,004,64 148,581,3 91.11 9,954,744 6.70 138,626,6
553.22 .85 3.37 71.95 .05 27.90
97,634, / 23,630,00 / 74,004,64 163,070,8 / 24,444,25 / 138,626,6
Total
643.79 0.42 3.37 84.70 6.80 27.90
Provision for bad debts by item：
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Closing balance
Name Provision for Provision ratio
Book balance Reason for accrual
bad debts (%)
Provision for bad debts by 16,303,090.57 16,303,090.57 100.00 Expected as unable
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item to recover
Total 16,303,090.57 16,303,090.57 100.00 /
Explanation of bad debt provision by item:
□ Applicable √ Not applicable
Provision for bad debts by portfolio：
√ Applicable □ Not applicable
Provision by portfolio: Aging portfolio
Unit: Yuan Currency: RMB
Closing balance
Name
Accounts receivable Provision for bad debts Provision ratio (%)
Aging portfolio 81,331,553.22 7,326,909.85 9.01
Total 81,331,553.22 7,326,909.85 9.01
Standard and explanation of provision for bad debts on portfolio basis
√ Applicable □ Not applicable
Closing amount
Account age Provision for bad
Book balance Provision ratio (%)
debts
Within 1 year 73,162,554.67 3,658,127.75 5.00
1-2 years 4,741,866.38 1,422,559.91 30.00
2-3 years 2,361,819.97 1,180,909.99 50.00
Above 3 years 1,065,312.20 1,065,312.20 100.00
Subtotal 81,331,553.22 7,326,909.85 9.01
If the bad debt provision is made according to the general model of expected credit loss, please refer to
the disclosure of other receivables:
□ Applicable √ Not applicable
(3). Information of bad-debt provision
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Changes in the current period
Opening Withdrawal Charge-off Closing
Category Other
balance Accrual or or balance
changes
write-back write-off
Provision for 14,489,512.75 1,813,577.82 16,303,090.57
bad debts by
item
Provision for 9,954,744.05 -2,627,458.96 375.24 7,326,909.85
bad debts by
portfolio
Total 24,444,256.80 -813,881.14 375.24 23,630,000.42
A significant amount of bad-debt provision withdrawn or written back in the current period:
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□ Applicable √ Not applicable
(4). Accounts receivable actually written off in the current period
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Written off amount
Accounts receivable actually written off 375.24
Significant accounts receivable that are written off
□ Applicable √ Not applicable
Explanation of the write-off of accounts receivable
□ Applicable √ Not applicable
(5). Accounts receivable of the top five closing balances collected by debtor
√ Applicable □ Not applicable
Proportion of total
balance of Provision for bad
Company name Book balance
accounts debts
receivable (%)
Beijing Jingdong Century Trading
34,121,105.60 34.95 1,706,055.27
Co., Ltd.
Vipshop (China) Co., Ltd. 7,686,986.13 7.87 384,349.31
Hangzhou Yongyi Network
4,640,580.00 4.75 4,640,580.00
Technology Co., Ltd.
Suzhou Aishang Cosmetic Co.,
4,163,579.58 4.26 208,178.98
Ltd.
Shanghai Zimei Investment
3,347,142.98 3.43 167,357.15
Management Co., Ltd.
Subtotal 53,959,394.29 55.26 7,106,520.71
(6). Accounts receivable derecognized due to transfer of financial assets
□ Applicable √ Not applicable
(7). Amount of assets or liabilities for which accounts receivable have been transferred but
involvement continues in the Company.
□ Applicable √ Not applicable
Other description:
□ Applicable √ Not applicable
6. Receivables financing
√ Applicable □ Not applicable
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Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Notes receivable 8,727,916.00 3,242,000.00
Total 8,727,916.00 3,242,000.00
Changes in the current period of receivables financing and changes in fair value:
□ Applicable √ Not applicable
If the bad debt provision is made according to the general model of expected credit loss, please refer to
the disclosure of other receivables:
□ Applicable √ Not applicable
Other description:
√ Applicable □ Not applicable
Notes receivable endorsed or discounted by the Company at the end of the period and not yet due on the
balance sheet date
Recognized amount
Item terminated at the end
of the period
Bank acceptance notes 6,455,217.00
Subtotal 6,455,217.00
It is unlikely that a bank acceptance note will be overdue, as the acceptor of bank acceptance bill is a
high-credit commercial bank. Therefore, the Company has derecognized endorsed or discounted bank
acceptance bills. If any of such bills are overdue, the Company will be still jointly and severally liable to
the holder according to the Negotiable Instruments Law.
7. Prepayments
(1). Prepayments are listed by age
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Closing balance Opening balance
Account age
Amount Percentage (%) Amount Percentage (%)
Within 1 year 111,603,825.48 97.28 57,284,969.16 98.08
1 to 2 years 2,967,174.38 2.59 1,062,309.95 1.82
2 to 3 years 151,216.35 0.13 59,368.00 0.10
Above 3 years
Total 114,722,216.21 100.00 58,406,647.11 100.00
Explanation of reasons why prepayments with more than 1 year's age and significant amount are not
settled in time:
None
(2). Prepayments of the top five closing balances collected by prepaid objects
√ Applicable □ Not applicable
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Proportion of the
Company name Book balance balance of
prepayments (%)
Alipay (China) Network Technology Co., Ltd. 26,698,931.11 23.27
Beijing Linkworld Network Technology Co.,
16,896,625.42 14.73
Ltd.
Hubei Toutiao Technology Co. Ltd. 6,861,906.10 5.98
Wuhan Juliang Xingtu Technology Co., Ltd. 6,226,991.86 5.43
Guangxi Jingdong Xinjie E-commerce Co., Ltd. 5,013,149.83 4.37
Subtotal 61,697,604.32 53.78
Other description
□ Applicable √ Not applicable
8. Other receivables
List by item
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Interest receivables
Dividends receivable
Other receivables 27,908,294.86 66,043,707.81
Total 27,908,294.86 66,043,707.81
Other description:
□ Applicable √ Not applicable
Interest receivables
(1). Classification of interest receivables
□ Applicable √ Not applicable
(2). Significant overdue interest
□ Applicable √ Not applicable
(3). Provision for bad debts
□ Applicable √ Not applicable
Other description:
□ Applicable √ Not applicable
Dividend receivables
(1). Dividend receivables
□ Applicable √ Not applicable
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(2). Significant dividends receivable with an age of more than 1 year
□ Applicable √ Not applicable
(3). Provision for bad debts
□ Applicable √ Not applicable
Other description:
□ Applicable √ Not applicable
Other receivables
(4). Disclosed by account age
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Account age Book balance at the end of the period
Within 1 year
Including: Subitem within 1 year
Sub-total within 1 year 21,050,495.64
1 to 2 years 34,235,895.59
2 to 3 years 5,787,910.32
Above 3 years 1,570,554.41
3 to 4 years
4 to 5 years
Above 5 years
Total 62,644,855.96
(5). Classification by nature of payment
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Book balance at the end of the Book balance at the beginning
Nature of payment
period of the period
Security deposits 31,555,098.56 24,126,373.18
Suspense payment receivables 29,886,138.66 74,931,769.08
Reserve funds 855,440.53 624,289.31
Others 348,178.21 1,336,042.57
Total 62,644,855.96 101,018,474.14
(6). Provision for bad debts
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
First stage Second stage Third stage
Expected credit loss Expected credit loss
Provision for bad Expected credit
for the entire for the entire Total
debts loss over the
duration (credit duration (credit
next 12 months
impairment not impairment has
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occurred) occurred)
Balance as at 3,254,330.37 517,127.76 31,203,308.20 34,974,766.33
January 1, 2022
Balance as of
January 1, 2022 is
in the current
period
-Transferred to the -711,767.56 711,767.56
second stage
-Transferred to the -179,706.46 179,706.46
third stage
-Written-back to
the second stage
- Written-back to
the first stage
Accrual in the -1,745,821.02 6,205,405.97 -4,521,255.86 -61,670.91
current period
Written-back in
the current period
Written-off in the
current period
Charge off in the -1,500.00 -150,034.32 -25,000.00 -176,534.32
current period
Other changes
Balance as at June 795,241.79 7,104,560.51 26,836,758.80 34,736,561.10
30, 2022
Explanation of significant changes in the book balance of other receivables with changes in provision for
loss in the current period:
□ Applicable √ Not applicable
The amount of bad debt provision in the current period and the basis for evaluating whether the credit
risk of financial instruments increases significantly:
□ Applicable √ Not applicable
(7). Information of bad-debt provision
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Changes in the current period
Opening Withdrawal Closing
Category Charge-off Other
balance Accrual or balance
or write-off changes
write-back
Provision for 26,987,367.33 -1,721,162.94 25,266,204.39
bad debts by
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item
Provision for 7,987,399.00 1,659,492.03 -176,534.32 9,470,356.71
bad debts by
portfolio
Total 34,974,766.33 -61,670.91 -176,534.32 34,736,561.10
A significant amount of bad-debt provision is written-back or withdrawn in the current period:
□ Applicable √ Not applicable
(8). Other receivables actually written off in the current period
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Written off amount
Other accounts receivable actually written off 176,534.32
Wherein, write-off of other important receivables:
□ Applicable √ Not applicable
Explanation on write-off of other receivables:
□ Applicable √ Not applicable
(9). Other receivables of the top five closing balances collected by debtor
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
As a proportion
Provision for
Nature of Closing Account of total closing
Company name bad debts
payment balance age balance in other
Closing balance
receivables (%)
EURL Suspense 17,981,236.73 [Note 2] 28.70 17,981,236.73
PHARMATICA payment
[Note 1] receivables
Wuxing District Security 13,193,392.00 1-2 years 21.06 3,958,017.60
Daixi Town deposits
People's
Government of
Huzhou City
Beijing Space Suspense 8,019,839.96 Within 1 12.80 413,492.00
Transformation payment year
Technology receivables
Co., Ltd.
SIKEROM Suspense 7,164,967.66 1-2 years 11.44 7,164,967.66
EURPOE payment
GMBH receivables
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Hangzhou Security 4,708,614.72 2-3 years 7.52 2,354,307.37
Property deposits
Maintenance
Fund
Management
Center
Total / 51,068,051.07 / 81.52 31,872,021.36
[Note 1] EURL PHARMATICA amount is the consolidated amount of URL PHARMATICA,
PARISEZHAN HK LIMITED, SARL ORTUS and S.A.S AREDIS under the same control.
[Note 2] RMB5,145,659.94 in 1 year; RMB12,835,576.79 in 1-2 years.
(10). Receivables involving government subsidies
□ Applicable √ Not applicable
(11). Other receivables derecognized due to transfer of financial assets
□ Applicable √ Not applicable
(12). The amount of assets and liabilities formed by transferring other receivables and continuing
to be involved
□ Applicable √ Not applicable
Other description:
□ Applicable √ Not applicable
9. Inventory
(1). Classification of inventories
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Closing balance Opening balance
Inventory
Inventory falling falling price
price reserves/ reserves/
Item Provision for Provision for
Book balance Carrying amount Book balance Carrying amount
impairment of impairment of
contract contract
performance cost performance
cost
Raw materials 87,870,902.73 13,061,934.06 74,808,968.67 29,764,865.65 1,131,843.45 28,633,022.20
Goods in 17,754,957.26 572,955.58 17,182,001.68 13,001,345.50 168,931.64 12,832,413.86
process
Inventory 425,637,161.96 60,411,185.80 365,225,976.16 373,318,017.14 25,067,162.01 348,250,855.13
commodities
Turnover
materials
Consumable
biological
assets
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Performance
cost
Packaging 64,028,802.72 4,460,872.56 59,567,930.16 37,042,703.68 650,080.09 36,392,623.59
Low value 3,766,652.13 290,512.25 3,476,139.88 7,337,309.01 300,823.91 7,036,485.10
consumables
Outsourcing 15,131,643.13 171,518.94 14,960,124.19 14,904,454.81 111,096.40 14,793,358.41
gifts
Total 614,190,119.93 78,968,979.19 535,221,140.74 475,368,695.79 27,429,937.50 447,938,758.29
(2). Inventory falling price reserves and provision for impairment of contract performance cost
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount increased in the Amount decreased in the
Opening current period current period Closing
Item
balance Write-back or balance
Accrual Others Others
charge-off
Raw 1,131,843.45 12,083,065.66 152,975.05 13,061,934.06
materials
Goods in 168,931.64 426,333.31 22,309.37 572,955.58
process
Inventory 25,067,162.01 44,366,253.68 9,022,229.89 60,411,185.80
commodities
Turnover
materials
Consumable
biological
assets
Performance
cost
Packaging 650,080.09 6,496,833.64 2,686,041.17 4,460,872.56
Low value 300,823.91 22,052.04 32,363.70 290,512.25
consumables
Outsourcing 111,096.40 80,026.85 19,604.31 171,518.94
gifts
Total 27,429,937.50 63,474,565.18 11,935,523.49 78,968,979.19
(3). Explanation on the closing balance of inventory containing the capitalized amount of
borrowing costs
□ Applicable √ Not applicable
(4). Explanation on amortization amount of contract performance cost in current period
□ Applicable √ Not applicable
Other description:
□ Applicable √ Not applicable
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10. Contract assets
(1). Description of contract assets
□ Applicable √ Not applicable
(2). The amount and reasons for significant changes in book value during the Reporting Period
□ Applicable √ Not applicable
(3). Provision for impairment of contract assets in the current period
□ Applicable √ Not applicable
Other description:
□ Applicable √ Not applicable
11. Assets held for sale
□ Applicable √ Not applicable
12. Non-current assets due within one year
□ Applicable √ Not applicable
13. Other current assets
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Contract acquisition cost
Return cost receivable 2,245,392.52 3,425,429.44
Input VAT to be deducted 36,177,028.74 39,013,811.93
Advance payment of taxes 6,172,006.65 11,095,721.02
Total 44,594,427.91 53,534,962.39
Other description:
None
14. Debt investments
(1). Description of debt investment
□ Applicable √ Not applicable
(2). Significant debt investments at the end of the period
□ Applicable √ Not applicable
(3). Impairment provision accrual
□ Applicable √ Not applicable
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15. Other debt investments
(1). Description of other debt investments
□ Applicable √ Not applicable
(2). Other significant debt investments at the end of the period
□ Applicable √ Not applicable
(3). Impairment provision accrual
□ Applicable √ Not applicable
Other description:
□ Applicable √ Not applicable
16. Long-term receivables
(1) Description of long-term receivables
□ Applicable √ Not applicable
(2) Provision for bad debts
□ Applicable √ Not applicable
(3) Long-term receivables derecognized due to transfer of financial assets
□ Applicable √ Not applicable
(4) Assets or liabilities formed by the continuing involvement of transferred long-term
receivables
□ Applicable √ Not applicable
Other description:
□ Applicable √ Not applicable
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17. Long-term equity investments
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Changes in the current period
Recognized Declared Closing
Other
Opening investment Other payment of Closing balance of
Invested entity Additional Investment comprehens Provision for
balance gain and loss changes in cash Others balance impairment
investment decrease ive income impairment
under equity equity dividends or provision
adjustments
method profits
I. Joint Venture
Huzhou Panrui 3,074,758.68 -5,814.02 3,068,944.66
Industry
Investment
Partnership
(Limited
Partnership)
Subtotal 3,074,758.68 -5,814.02 3,068,944.66
II. Affiliated enterprises
Xiongke 2,789,460.66 -111,660.67 2,677,799.99
Culture Media
(Hangzhou)
Co., Ltd.
Metis Info 6,575,008.81 -183,945.02 6,391,063.79
Tech
(Guangzhou)
Co., Ltd.
Jiaxing 72,681,733.3 14,185,427.27 -2,103,426.11 84,763,734.5
Woyong 8 4
Investment
Partnership
(Limited
Partnership)
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Zhuhai 79.41 -982,064.32 26,080,616.06 52,351,201.9 40,751,084
Healthlong 3,882.37 9 .65
Biotechnology
Co., Ltd.
Beijing Xiushi 5,424,692.37 -271,405.90 5,153,286.47
Culture
Development
Co., Ltd.
Subtotal 166.8 14,185,427.27 -3,652,502.02 26,080,616.06 151,337,086. 40,751,084
84.77 78 .65
7.59
169.9 14,185,427.27 -3,658,316.04 26,080,616.06 154,406,031. 40,751,084
Total 59.53 44 .65
6.27
Other description
None
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18. Investments in other equity instruments
(1). Description of investment in other equity instruments
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Hangzhou Regenovo Biotechnology., 20,580,000.00 20,580,000.00
Ltd.
LIPOTRUE,S.L. 35,822,400.00 35,822,400.00
Hangzhou Golong Holdings Co. Ltd. 90,000,000.00
Total 146,402,400.00 56,402,400.00
(2). Description of non-transactional equity instrument investments
□ Applicable √ Not applicable
Other description:
□ Applicable √ Not applicable
19. Other non-current financial assets
□ Applicable √ Not applicable
20. Investment property
Measurement mode of investment real estate
(1). Investment real estate adopting cost measurement model
Unit: Yuan Currency: RMB
Building and Construction in
Item Land use rights Total
construction progress
I. Original book value
1. Opening balance 77,820,579.40 77,820,579.40
2. Amount increased in the 17,825.04 17,825.04
current period
(1) Outsourcing 17,825.04 17,825.04
(2) Transfer-in of
inventory\fixed
assets\construction in
process
(3) Increase in enterprise
merger
3. Amount decreased in
the current period
(1) Disposal
(2) Others transferred out
4. Closing balance 77,838,404.44 77,838,404.44
II. Accumulated depreciation and accumulated amortization
1. Opening balance 7,498,711.40 7,498,711.40
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2. Amount increased in the 1,556,226.95 1,556,226.95
current period
(1) Provision or 1,556,226.95 1,556,226.95
amortization
3. Amount decreased in
the current period
(1) Disposal
(2) Others transferred out
4. Closing balance 9,054,938.35 9,054,938.35
III. Provision for impairment
1. Opening balance
2. Amount increased in the
current period
(1) Provision
3. Amount decreased in
the current period
(1) Disposal
(2) Others transferred out
4. Closing balance
IV. Carrying amount
1. Carrying amount at the 68,783,466.09 68,783,466.09
end of period
2. Carrying amount at the 70,321,868.00 70,321,868.00
beginning of period
(2). Real estate held for investment with pending proprietorship certificate
□ Applicable √ Not applicable
Other description
□ Applicable √ Not applicable
21. Fixed assets
List by item
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Fixed assets 563,214,939.96 558,981,209.20
Disposal of fixed assets
Total 563,214,939.96 558,981,209.20
Other description:
None
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Fixed assets
(1). Description of fixed assets
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Property and Dedicated Means of General
Item Total
buildings equipment transportation equipment
I. Original book value:
1. Opening balance 539,801,215.99 196,651,852.38 19,877,806.90 74,636,230.21 830,967,105.48
2. Amount increased
2,221,307.82 23,590,019.37 61,592.92 2,212,823.12 28,085,743.23
in the current period
(1) Purchase 1,637,595.52 3,923,198.36 61,592.92 1,549,807.44 7,172,194.24
(2) Transfer from
construction in 583,712.30 19,666,821.01 663,015.68 20,913,548.99
progress
(3) Increase in
enterprise merger
3. Amount decreased
in the current period
(1) Disposal or
scrapping
4. Closing balance 542,022,523.81 220,241,871.75 19,939,399.82 76,849,053.33 859,052,848.71
II. Accumulated depreciation
1. Opening balance 107,920,939.15 117,135,329.26 14,033,797.27 32,895,830.60 271,985,896.28
2. Amount increased
10,384,121.05 8,501,317.09 1,384,562.52 3,582,011.81 23,852,012.47
in the current period
(1) Provision 10,384,121.05 8,501,317.09 1,384,562.52 3,582,011.81 23,852,012.47
3. Amount decreased
in the current period
(1) Disposal or
scrapping
4. Closing balance 118,305,060.20 125,636,646.35 15,418,359.79 36,477,842.41 295,837,908.75
III. Provision for impairment
1. Opening balance
2. Amount increased
in the current period
(1) Provision
3. Amount decreased
in the current period
(1) Disposal or
scrapping
4. Closing balance
IV. Carrying amount
1. Carrying amount at
423,717,463.61 94,605,225.40 4,521,040.03 40,371,210.92 563,214,939.96
the end of period
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2. Carrying amount at
the beginning of 431,880,276.84 79,516,523.12 5,844,009.63 41,740,399.61 558,981,209.20
period
(2). Description of temporarily idle fixed assets
□ Applicable √ Not applicable
(3). Description of fixed assets rented through financial leasing
□ Applicable √ Not applicable
(4). Fixed assets leased out through operating lease
□ Applicable √ Not applicable
(5). Fixed assets without property right certificate
□ Applicable √ Not applicable
Other description:
□ Applicable √ Not applicable
Disposal of fixed assets
□ Applicable √ Not applicable
22. Construction in progress
List by item
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Construction in progress 155,648,709.93 108,678,896.27
Project goods and material
Total 155,648,709.93 108,678,896.27
Other description:
None
Construction in progress
(1). Description of construction in progress
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Closing balance Opening balance
Provision Provision
Item Carrying Carrying
Book balance for Book balance for
amount amount
impairment impairment
Huzhou 90,406,350.83 90,406,35 55,292,163.04 55,292,163.04
Production Base 0.83
Expansion Project
(Phase I)
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Makeup Factory 26,640,273.70 26,640,27 26,447,530.33 26,447,530.33
3.70
Longwu R&D 17,823,944.67 17,823,94 7,157,088.81 7,157,088.81
Center 4.67
Construction
Project
Decoration 5,823,245.11 5,823,245 5,374,335.45 5,374,335.45
engineering .11
Information 2,142,599.44 2,142,599 641,190.64 641,190.64
System Upgrade .44
Project
Other sporadic 12,812,296.18 12,812,29 13,766,588.00 13,766,588.00
projects 6.18
155,648,709.9 155,648,7 108,678,896.2 108,678,896.2
Total
3 09.93 7 7
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(2). Changes of items under important construction in progress in the current period
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Proportion Including:
Amount
Amount Other of Accumulate Amount of Interest
transferred
increased decreased accumulate d amount of interest capitalizatio
Initial to fixed Closing Progress of Source of
Item Budget in the amount in d project interest capitalizati n rate in the
balance assets in balance project fund
current the current investment capitalizati on in the current
current
period period to budget on current period (%)
period
(%) period
Huzhou RMB416 55,292,16 46,367,192 101,659,35 24.39 24.39 8,014,032.2 7,097,784.8 4.57 Raised
Production .7833 3.04 .01 5.05 4 4 funds and
Base million owned
Expansion funds
Project
(Phase I)
Makeup RMB66. 26,447,53 192,743.37 26,640,273 90.99 97.62 Self-owned
Factory 11 0.33 .70 capital
million
Longwu RMB128 7,157,088 10,475,396 17,632,485 13.71 13.71 4,604,813.2 4,078,343.1 4.57 Raised
R&D Center .6113 .81 .88 .69 1 4 funds and
Constructio million owned
n Project funds
Information RMB112 641,190.6 1,897,635. 2,538,825. 2.26 2.26 2,142,599.4 1,897,635.2 4.57 Raised
System .395 4 22 86 4 2 funds and
Upgrade million owned
Project funds
RMB723 89,537,97 58,932,967 148,470,94 / / 14,761,444. 13,073,763. / /
Total .8996 2.82 .48 0.30 89 20
million
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(3). Provision for impairment of construction in progress in the current period
□ Applicable √ Not applicable
Other description
□ Applicable √ Not applicable
Project goods and material
□ Applicable √ Not applicable
23. Productive biological assets
(1). Productive biological assets with cost measurement mode
□ Applicable √ Not applicable
(2). Productive biological assets with fair value econometric mode
□ Applicable √ Not applicable
Other description
□ Applicable √ Not applicable
24. Oil and gas assets
□ Applicable √ Not applicable
25. Right-of-use assets
□ Applicable √ Not applicable
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26. Intangible assets
(1). Description of intangible assets
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Non-patented Customer Trademark
Item Land use rights Software Patent right Total
technology resources right
I. Original book value
1. Opening balance 472,400,130.10 23,546,496.96 446,367.92 563,293.07 12,833,684.00 137,131.75 509,927,103.80
2. Amount increased 93,627.44 39,897,000.00 39,990,627.44
in the current period
(1) Purchase 93,627.44 39,897,000.00 39,990,627.44
(2) Internal R&D
(3) Increased in
business mergers
3. Amount decreased
in the current period
(1) Disposal
4. Closing balance 472,400,130.10 23,546,496.96 539,995.36 563,293.07 12,833,684.00 40,034,131.75 549,917,731.24
II. Accumulated amortization
1. Opening balance 80,337,918.89 19,671,238.01 423,582.17 533,063.88 11,764,210.33 51,966.23 112,781,979.51
2. Amount increased 6,071,109.61 917,512.95 6,490.40 13,030.32 1,069,473.67 343,243.48 8,420,860.43
in the current period
(1) Provision 6,071,109.61 917,512.95 6,490.40 13,030.32 1,069,473.67 343,243.48 8,420,860.43
3. Amount decreased
in the current period
(1) Disposal
4. Closing balance 86,409,028.50 20,588,750.96 430,072.57 546,094.20 12,833,684.00 395,209.71 121,202,839.94
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III. Provision for impairment
1. Opening balance
2. Amount increased
in the current period
(1) Provision
3. Amount decreased
in the current period
(1) Disposal
4. Closing balance
IV. Carrying amount
1. Carrying amount at 385,991,101.60 2,957,746.00 109,922.79 17,198.87 39,638,922.04 428,714,891.30
the end of period
2. Carrying amount at 392,062,211.21 3,875,258.95 22,785.75 30,229.19 1,069,473.67 85,165.52 397,145,124.29
the beginning of
period
At the end of this period, the proportion of intangible assets formed through internal research and development of the Company to the balance of intangible assets is
0.00%.
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(2). The land use right without the property ownership certificate
□ Applicable √ Not applicable
Other description:
□ Applicable √ Not applicable
27. Development cost
□ Applicable √ Not applicable
28. Goodwill
(1). Original book value of goodwill
□ Applicable √ Not applicable
(2). Provision for impairment of goodwill
□ Applicable √ Not applicable
(3). Relevant information regarding the asset portfolio and set of asset portfolios to which the
goodwill belongs
□ Applicable √ Not applicable
(4). Descriptions of the process of goodwill impairment testing, key parameters (such as the
growth rate of the forecast period, the growth rate of the stable period, the profit rate, the
discount rate and the forecast period, etc. when the present value of future cash flows are
expected, if applicable) and the recognition method of the impairment losses on goodwill
□ Applicable √ Not applicable
(5). Impact of goodwill impairment test
□ Applicable √ Not applicable
Other description:
□ Applicable √ Not applicable
29. Long-term deferred expenses
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount
Amortized Other
Opening increased in
Item amount in the decreased Closing balance
balance the current
current period amount
period
Renovation 28,035,222.52 3,123,871.55 6,893,598.57 24,265,495.50
costs
Endorsement 1,297,168.97 1,297,168.97
fee
Garage use 192,950.56 96,474.96 96,475.60
fee
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Software 231,132.06 99,056.59 132,075.47
service fee
Total 29,756,474.11 3,123,871.55 8,386,299.09 24,494,046.57
Other description:
None
30. Deferred income tax assets/deferred income tax liabilities
(1). Deferred income tax assets without offset
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Closing balance Opening balance
Deductible Deductible
Item Deferred tax Deferred tax
temporary temporary
assets assets
difference difference
Provision for impairment
of assets
Unrealized profit from 29,534,841.23 6,558,438.08 51,427,566.52 11,315,875.56
internal transactions
Deductible loss 4,398,260.74 1,099,565.19 24,661,711.36 6,165,427.84
Provisions for bad debts 6,889,318.52 1,721,495.34 12,133,125.37 3,033,245.75
of accounts receivable
Provision for obsolete 56,568,027.23 8,807,093.71 13,851,297.64 2,192,173.55
inventory
Impact of share-based 64,709,836.24 13,951,922.23
payments
Government subsidies 5,376,718.33 806,507.75 6,416,263.33 962,439.50
related to assets
Anticipated return losses 2,989,355.63 747,338.91 4,699,734.32 1,174,933.59
Total 105,756,521.68 19,740,438.97 177,899,534.78 38,796,018.02
(2). Deferred income tax liabilities without offset
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Closing balance Opening balance
Taxable Taxable
Item Deferred tax Deferred tax
temporary temporary
liabilities liabilities
difference difference
Asset appreciation
assessment in businesses
consolidation not under
common control
Changes in the fair value
of other creditors'
investment
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Changes in the fair value
of other investments in
equity instrument
One-time deduction for 50,122,385.52 7,523,121.46 56,019,830.45 8,408,158.81
depreciation of fixed
assets
Total 50,122,385.52 7,523,121.46 56,019,830.45 8,408,158.81
(3). Deferred income tax assets or liabilities listed in net amount after offset
□ Applicable √ Not applicable
(4). Details of unrecognized deferred income tax assets
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Deductible temporary 91,454,919.85 86,680,894.07
difference
Deductible loss 232,291,889.02 328,350,840.97
Total 323,746,808.87 415,031,735.04
(5). The deductible loss of unrecognized deferred income tax assets will expire in the following
years
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Year Closing balance Opening balance Remarks
2022 4,961,006.16 36,720,246.07
2023 28,495,760.10 54,275,434.81
2024 89,202,557.01 92,977,432.81
2025 57,083,884.31 80,408,649.72
2026 40,944,474.93 63,969,077.56
2027 11,604,206.51
Total 232,291,889.02 328,350,840.97 /
Other description:
□ Applicable √ Not applicable
31. Other non-current assets
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Closing balance Opening balance
Provision Provision
Item Book Carrying Carrying
for Book balance for
balance amount amount
impairment impairment
Contract
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acquisition
cost
Contract
performance
cost
Return cost
receivable
Contract
assets
Prepaid for
long-term
asset 39,897,000.00 39,897,000.00
purchase
funds
Other
long-term 4,621,667.82 4,621,667.82 4,270,303.56 4,270,303.56
assets
Total 4,621,667.82 4,621,667.82 44,167,303.56 44,167,303.56
Other description:
None
32. Short-term bank borrowings
(1). Classification of short-term borrowings
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Pledge loans
Mortgage loan
Guaranteed loan
Credit loans 200,251,506.85 200,251,506.85
Total 200,251,506.85 200,251,506.85
Classification of short-term borrowings
None
(2). Overdue and outstanding short-term borrowings
□ Applicable √ Not applicable
Other description:
□ Applicable √ Not applicable
33. Trading financial liabilities
□ Applicable √ Not applicable
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34. Derivative financial liabilities
□ Applicable √ Not applicable
35. Notes payable
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Type Closing balance Opening balance
Trade acceptance notes
Bank acceptance notes 52,985,397.00 79,156,771.40
Total 52,985,397.00 79,156,771.40
The total amount of outstanding bills payable due at the end of this period is RMB0.00.
36. Accounts payable
(1). List by account payable
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Payment for goods 543,588,809.58 309,697,429.86
Expenses payable 193,768,991.53 84,316,536.83
Payment for engineering 20,859,715.80 10,012,274.47
equipment
Total 758,217,516.91 404,026,241.16
(2). Significant accounts payable with an aging of more than one year
□ Applicable √ Not applicable
Other description:
□ Applicable √ Not applicable
37. Accounts received in advance
(1). List by advance accounts
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Rents receivable in advance 94,226.63 173,769.85
Total 94,226.63 173,769.85
(2). Significant advance accounts with an aging of more than one year
□ Applicable √ Not applicable
Other description:
□ Applicable √ Not applicable
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38. Contract liabilities
(1). Description of contract liabilities
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Advance payment 92,571,980.97 82,548,148.92
Unused membership credits 11,665,619.24 8,603,836.40
Total 104,237,600.21 91,151,985.32
(2). The amount and reasons for significant changes in book value during the Reporting Period
□ Applicable √ Not applicable
Other description:
□ Applicable √ Not applicable
39. Employee benefits payable
(1).List by employee pay payable
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Opening Increase in the Decrease in the
Item Closing balance
balance current period current period
I. Short-term compensation 78,069,805.10 272,786,621.93 251,612,825.54 99,243,601.49
II. Post-employment 579,244.62 11,418,644.54 11,364,443.04 633,446.12
benefits - defined
contribution plans
III. Dismissal Benefit
IV. Other benefits due
within one year
Total 78,649,049.72 284,205,266.47 262,977,268.58 99,877,047.61
(2).List by short-term compensation
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Opening Increase in the Decrease in the
Item Closing balance
balance current period current period
I. Salaries, bonuses, 77,170,134.07 250,027,917.30 228,791,855.31 98,406,196.06
allowances and subsidies
II. Welfare expenses of 6,691.56 8,993,967.79 8,993,967.79 6,691.56
employees
III. Social insurance 518,125.19 7,374,799.70 7,419,425.30 473,499.59
premium
Incl.: Medical insurance 484,798.88 7,019,291.45 7,050,679.90 453,410.43
premium
Industrial injury 13,009.69 300,349.84 303,779.89 9,579.64
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insurance premium
Maternity insurance 20,316.62 55,158.41 64,965.51 10,509.52
premium
IV. Housing provident fund 374,854.28 5,715,701.25 5,733,341.25 357,214.28
V. Trade union fund and 674,235.89 674,235.89
staff education fund
VI. Short-term compensated
absences
VII. Short-term profit
sharing plan
Total 78,069,805.10 272,786,621.93 251,612,825.54 99,243,601.49
(3).List by defined contribution plan
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Opening Increase in the Decrease in the
Item Closing balance
balance current period current period
1. Basic endowment 555,518.72 11,041,457.44 10,984,089.51 612,886.65
insurance
2. Unemployment 23,725.90 377,187.10 380,353.53 20,559.47
insurance expense
3. Enterprise annuity
payment
Total 579,244.62 11,418,644.54 11,364,443.04 633,446.12
Other description:
□ Applicable √ Not applicable
40. Tax payable
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Value added tax (“VAT”) 31,801,241.06 23,812,907.23
Consumption tax 3,547.12
Business tax
Enterprise income tax 26,522,512.21 63,190,175.54
Personal income tax 3,742,305.74 1,481,039.09
Urban maintenance and 3,977,559.56 4,705,718.03
construction tax
Property tax 2,050,058.69 2,133,274.27
Surtax for education expenses 1,832,989.69 2,598,933.67
Surcharge for local education 1,221,993.13 1,732,622.45
Stamp tax 146,137.63 175,861.55
Disabled security fund 16,632.72 14,175.52
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Land use tax 44,922.50 44,922.50
Total 71,356,352.93 99,893,176.97
Other description:
None
41. Other payables
List by item
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Interest payable
Dividends payable
Other payables 61,385,996.69 62,162,153.55
Total 61,385,996.69 62,162,153.55
Other description:
None
Interest payable
□ Applicable √ Not applicable
Dividends payable
□ Applicable √ Not applicable
Other payables
(1). List other payables by nature of payment
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Security deposits 53,269,535.34 52,827,845.96
Restricted stock repurchase 5,628,128.21
obligations
Others 8,116,461.35 3,706,179.38
Total 61,385,996.69 62,162,153.55
(2). Significant other payables with an aging of more than one year
□ Applicable √ Not applicable
Other description:
□ Applicable √ Not applicable
42. Holding liabilities for sale
□ Applicable √ Not applicable
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43. Non-current liabilities due within one year
□ Applicable √ Not applicable
44. Other current liabilities
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Short-term bonds payable
Return payment payable
Tax on items to be resold 10,407,936.05 9,521,415.32
Total 10,407,936.05 9,521,415.32
Changes in short-term bonds payable:
□ Applicable √ Not applicable
Other description:
□ Applicable √ Not applicable
45. Long-term loans
(1). Classification of long-term loans
□ Applicable √ Not applicable
Other explanations, including the range of interest rate:
□ Applicable √ Not applicable
46. Bonds payable
(1). Bonds payable
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Convertible corporate bonds 711,060,173.61 695,586,778.80
Total 711,060,173.61 695,586,778.80
(2). Increase and decrease of bonds payable: (excluding other financial instruments such as
preferred shares and perpetual bonds classified as financial liabilities)
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
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Premi
um or Conver Repaym
Issuanc Interest
Issuanc Bond disco sion in ent in
Bond Face Issuance Opening e in the accrued Closing
e perio unt the the
name value amount balance current by face balance
date d amort current current
period value
izatio period period
n
Proya 100.0 Decem 6 751,713,00 695,586,778.8 1,117,77 14,66 313,000 711,060,17
Converti 0 ber 08, years 0.00 0 4.42 8,620 .00 3.61
ble 2021 .39
Corporat
e Bond
Total / / / 751,713,00 695,586,778.8 1,117,77 14,66 313,000 711,060,17
0.00 0 4.42 8,620 .00 3.61
.39
(3). Explanation on conversion conditions and tranches of convertible bonds
√ Applicable □ Not applicable
With the approval issued by China Securities Regulatory Commission in the Approval on Public Issue of
Convertible Corporate Bonds of Proya Cosmetics Co., Ltd. (ZJXK [2021] No. 3408), on December 8,
2021, the Company issued 7,517,130 convertible corporate bonds to unspecified targets at RMB100.00
par value per share for total consideration of RMB751,713,000.00.
The coupon rate of the aforesaid convertible corporate bonds is 0.30% for the first year, 0.50% for the
second year, 1.00% for the third year, 1.50% for the fourth year, 1.80% for the fifth year and 2.00% for
the sixth year. Annual interest payment dates are anniversaries of the date of initial offering of
convertible bonds. The Company will, no later than five trading days after the interests payment day of
each year, pay the interests of the year and, no later than five trading days after the maturity date of
convertible corporate bonds, redeem all unconverted convertible bonds from investors at a price of
115% of the par value of the convertible bonds issued this time (including the annual interests of the last
tranche).
The convertible period of convertible bonds starts from the first trading day after the expiration of 6
months from the issuance date of convertible bonds until the maturity date of convertible bonds. The
initial conversion price shall be RMB195.98 per share, lower than the average trading price of A shares
of the Company in the twenty trading days prior to the publication of the prospectus (if the stock price is
adjusted for ex-dividend or ex-dividend in the twenty trading days, the closing price of the trading day
before such adjustment is calculated according to the price after the ex-dividend or ex-dividend
adjustment) or the average trading price of A shares of the Company in the previous trading day, and
shall not be adjusted up.
As at May 2022, the Company completed the 2021 Equity Distribution Plan. According to the relevant
terms of Public Issuance of Convertible Corporate Bonds of A Shares of Proya Cosmetics Co., Ltd. and
relevant requirements of CSRC on issuance of convertible corporate bonds, the price of conversion of
Proya of convertible corporate bonds was adjusted to RMB139.37 per share from RMB195.98 per share,
which took effect since May 30 2022 (the ex-dividend date).
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During the period, there were 3,130 shares converted from convertible corporate bonds，the share capital
increased by RMB2,208.00, capital reserves (equity premium) increased by RMB302,521.21, and other
equity instruments reduced by RMB21,217.44.
(4). Explanation on other financial instruments classified as financial liabilities
Basic information of other financial instruments such as preferred stocks and perpetual bonds issued at
the end of the period
□ Applicable √ Not applicable
Statement of changes in financial instruments such as preferred stocks and perpetual bonds issued at the
end of the period
□ Applicable √ Not applicable
Explanation on the basis of classifying other financial instruments into financial liabilities:
□ Applicable √ Not applicable
Other description:
□ Applicable √ Not applicable
47. Lease liabilities
□ Applicable√ Not applicable
48. Long-term payables
List by item
□ Applicable √ Not applicable
Long-term payables
□ Applicable √ Not applicable
Special accounts payable
□ Applicable √ Not applicable
49. Long-term employee benefits payable
□ Applicable √ Not applicable
50. Estimated liabilities
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Opening balance Closing balance Cause of formation
Provide external guarantees
Pending litigations
Product quality assurance
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Restructuring obligation
Loss-making contract to
be performed
10,812,084.88 6,818,443.69 Estimated future potential
Return payment payable
return losses
Others
Total 10,812,084.88 6,818,443.69 /
Other particulars, including the particulars on key assumptions and estimates concerning estimated
significant liabilities:
None
51. deferred income
Information of deferred income
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Decrease in
Opening Increase in the Closing Cause of
Item the current
balance current period balance formation
period
Government 6,416,263.33 1,039,545.00 5,376,718.33 Funded by the
grant Government
Total 6,416,263.33 1,039,545.00 5,376,718.33 /
Items involving government subsidies:
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount
Amou included
Amount
nt of in
included
new non-oper
Liability Opening in other Other Closing Asset-related/
subsidi ating
item balance income in changes balance income-related
es in revenue
current
current of the
period
period current
period
Grants for 6,416,26 1,039,545. 5,376,718.33 Asset-related
modified 3.33 00
cosmetic
technology
Other description:
√ Applicable □ Not applicable
For the details on inclusion of government grants of the current period into profit or loss of the current
period, please see the particulars contained in “84. Government Grants”, “VII. Notes to the Consolidated
Financial Accounts”, “Section X Financial Report”.
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52. Other non-current liabilities
□ Applicable √ Not applicable
53. Share capital
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Increase or decrease in the change (+, -)
Shares
conversion
Issuance
Opening from Closing
of new Bonus
balance capital Others Subtotal balance
shares shares
reserve
Share
conversion
Total 201,009,966 80,403,986 2,208 80,406,194 281,416,160
shares
Other description:
Shares converted from capital reserve increased by 80,403,986 shares, which decided at the fifth
meeting of the third session of the board of directors of the Company held in 2022 and 2021 Annual
General Meeting, based on the total share capital of 201,009,966 shares of the Company as of the
dividend payment date of record. Four shares will be issued for every ten shares to all shareholders
through capitalization of the capital reserve and share capital increased by RMB80,403,986.
Other shares increased by 2,208 shares, which was the conversion of convertible corporate bonds of the
Company in the period. For the details on the convertible bonds, please see the particulars contained in
“46. Bonds Payable”, “VII. Notes to the Consolidated Financial Accounts”, “Section X Financial
Report”.
54. Other equity instruments
(1) Basic information of other financial instruments such as preferred stocks and perpetual
bonds issued at the end of the period
□ Applicable √ Not applicable
(2) Statement of changes in financial instruments such as preferred stocks and perpetual bonds
issued at the end of the period
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Increase in the Decrease in the
Outstanding Opening Closing
current period current period
financial
Carrying Carrying Carrying Carrying
instruments Number Number Number Number
amount amount amount amount
Proya
convertible 7,517,130 50,956,622.11 3,130 21,217.44 7,514,000 50,935,404.67
corporate
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bonds
Total 7,517,130 50,956,622.11 3,130 21,217.44 7,514,000 50,935,404.67
Changes of other equity instruments in the current period, Explanation on reasons for changes, and basis
for relevant accounting treatment:
□ Applicable √ Not applicable
Other description:
√ Applicable □ Not applicable
For the details on the convertible corporate bonds of the Company issued in the period, please see the
particulars contained in “46. Bonds Payable”, “VII. Notes to the Consolidated Financial Accounts”,
“Section X Financial Report”.
55. Capital reserve
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Increase in the Decrease in the
Item Opening balance Closing balance
current period current period
Capital premium 799,674,532.76 10,822,025.82 125,277,272.12 685,219,286.46
(Equity
premium)
Other capital 34,597,672.90 12,843,603.44 21,754,069.46
reserves
Total 834,272,205.66 10,822,025.82 138,120,875.56 706,973,355.92
Other explanations, including the increase and decrease in the current period and the explanation on the
reasons for the changes:
The increase of RMB10,822,025.82 in capital premium (share premium) of the current period includes:
1) RMB10,519,504.61, involving the released part of restricted shares issued under the equity incentive
plan, for which other capital reserve recognized during the waiting period is transferred to share
premium; 2) RMB302,521.21, involving the convertible corporate bonds of the Company issued in the
period. For the details, please see the particulars contained in “46. Bonds Payable”, “VII. Notes to the
Consolidated Financial Accounts”, “Section X Financial Report”.
The decrease of RMB125,277,272.12 in capital premium (share premium) of the current period includes:
1) RMB80,403,986.00, involving the capital reserve capitalization. For the details, please see the
particulars contained in “53. Share Capital”, “VII. Notes to the Consolidated Financial Accounts”,
“Section X Financial Report”; 2) RMB44,873,286.12, involving the difference between the payment
made for acquiring minority shares of the subsidiaries, Ningbo Timage Cosmetics Co., Ltd., and the
identifiable share of net assets of the subsidiaries, as calculated at the newly-increased shareholding ratio,
for which the capital reserve is written down by RMB44,873,286.12.
The decrease of RMB12,843,603.44 in other capital reserves of the current period includes: 1)
RMB10,519,504.61, involving the released portion of restricted shares issued under the equity incentive
plan, for which other capital reserves recognized during the waiting period are transferred to equity
premium; 2) RMB2,324,098.83, involving the adjustment of capital reserves for the difference between
the actual pre-tax deductible amount of the released portion and the recognized amount of previous
years.
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56. Treasury stock
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Opening Increase in the Decrease in the
Item Closing balance
balance current period current period
Restricted shares with 5,628,128.21 5,628,128.21 0.00
repurchase obligation
Total 5,628,128.21 5,628,128.21 0.00
Other explanations, including the increase and decrease in the current period and the explanation on the
reasons for the changes:
The decrease of RMB5,628,128.21 in the current period involves the Company's release of 347,201
restricted shares according to the Proposal on the Satisfaction of Conditions for Releasing the Sales
Restrictions for the Third Release Period of the Restricted Shares Granted for the First Time and
Reserved Grant under the 2018 Restricted Share Incentive Plan deliberated and approved at the 4th
meeting of the Third session of board of directors of the Company held on January 12, 2022, with the
grant price after distributed cash dividends are deducted being RMB16.21 per share.
57. Other comprehensive income
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount incurred in the current period
Less:
Less:
Included in
Included
other
in other
comprehen
comprehe
sive
Amount nsive
income for
incurred income for Less: Attributed Attributed to
Opening the Closing
Item before the income to parent minority
balance previous balance
income tax previous tax company shareholders
period and
in the current period and expenses after tax after tax
transferred
period transferred
in retained
in profit or
earnings
loss for
for the
the current
current
period
period
I. Other comprehensive
income that will not be
subsequently
reclassified into profit
and loss
Including: Re-measure
the variation amount of
defined benefit plan
Other comprehensive
income that can't be
reversed through profit
and loss under equity
method
Changes in the fair
value of other
investments in equity
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instrument
Changes in fair value
of enterprise's own
credit risk
II. Other -1,247,674.10 -249,117.09 -249,117.09 -1,496,79
comprehensive income 1.19
that will be reclassified
into profit or loss
Including: other
comprehensive income
that can be converted
into gains and losses
under the equity
method
Changes in the fair
value of other creditors'
investment
The amount of
financial assets
reclassified into other
comprehensive income
Credit impairment
provision for other
credits investment
Cash flow hedge
reserve
Difference from -1,247,674.10 -249,117.09 -249,117.09 -1,496,79
translation of financial 1.19
statements in foreign
currency
Total other -1,247,674.10 -249,117.09 -249,117.09 -1,496,79
comprehensive income 1.19
Other explanations, including the adjustment of the effective part of cash flow hedging gains and losses
into the initially recognized amount of the hedged item:
None
58. Special reserve
□ Applicable √ Not applicable
59. Surplus reserve
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Opening balance Increase in the Decrease in the Closing balance
current period current period
Legal surplus 100,634,780.00 100,634,780.00
reserve
Discretionary
surplus reserve
Reserve fund
Enterprise
development fund
Others
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Total 100,634,780.00 100,634,780.00
Explanation on surplus reserves, including the increase and decrease in the current period and the
explanation on the reasons for the change:
None
60. Undistributed profit
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Current period Last year
Undistributed profit at the end of last period before 1,696,978,064.52 1,265,671,865.63
adjustment
Total undistributed profit at the beginning of the
adjustment period (+ for increase, - for decrease)
Un-appropriated earnings at the beginning of period after 1,696,978,064.52 1,265,671,865.63
adjustment
Plus: net profit attributable to the owner of the parent 296,939,515.54 576,119,025.56
company in the current period
Less: withdrawal of statutory surplus reserve
Withdrawal of any surplus reserves
Withdrawal of general risk provision
Dividends payable on common stock 172,868,570.76 144,804,186.00
Common stock dividends converted to share capital
Other decreases 8,640.67
Undistributed profit at the end of the period 1,821,049,009.30 1,696,978,064.52
Details of the adjustment of the undistributed profit at the beginning of the period:
1. The undistributed profit affected by the retroactive adjustment in accordance with Accounting
Standards for Business Enterprises and its related new regulations at the beginning of the period is
RMB0.00.
2. The undistributed profit affected by the change of accounting policy at the beginning of the period is
RMB0.00.
3. The undistributed profit affected by the correction of major accounting errors at the beginning of the
period is RMB0.00.
4. The undistributed profit affected by the change of combination scope caused by the common control
at the beginning of the period is RMB0.00.
5. The undistributed profit affected by other adjustments at the beginning of the period is RMB0.00.
61. Operating income and operating cost
(1). Information of operating income and operating cost
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount incurred in the current period Amount incurred in the previous period
Item
Revenue Cost Revenue Cost
Main business 2,615,919,115.33 830,689,997.38 1,911,280,464.91 690,938,535.18
Other 10,024,128.96 6,344,746.42 6,438,032.69 4,619,754.01
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business
Total 2,625,943,244.29 837,034,743.80 1,917,718,497.60 695,558,289.19
(2). Information of income generated by the contract
□ Applicable √ Not applicable
(3). Explanation on performance obligations
□ Applicable √ Not applicable
(4). Explanation on remaining performance obligations allocated
□ Applicable √ Not applicable
Other description:
Income breakdown by goods or service transfer time
Amount for the same
Amount for the
Item period in the
current period
previous year
Income recognized at a certain point 2,624,582,336.26 1,915,899,293.37
Income recognized within a period of time 1,360,908.03 1,819,204.23
Subtotal 2,625,943,244.29 1,917,718,497.60
62. Taxes and surcharges
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount incurred in the current Amount incurred in the previous
Item
period period
Consumption tax 10,616.45 56,425.63
Business tax
Urban maintenance and 12,367,541.47 7,913,902.31
construction tax
Education surcharge 6,098,531.01 3,977,896.25
Resource tax
Property tax 2,020,782.23 4,052,644.03
Land use tax
Vehicle and vessel use tax 4,170.40 2,670.00
Stamp tax 861,783.14 634,586.22
Surcharge for local education 4,065,687.34 2,651,930.83
Total 25,429,112.04 19,290,055.27
Other description:
None
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63. Selling expenses
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount incurred in the Amount incurred in the
Item
current period previous period
Image promotion expense 914,789,856.38 651,005,247.16
Employee remuneration 176,935,767.31 127,270,225.97
Travel expenses 5,239,809.36 6,519,683.82
Conference fees 1,369,251.43 5,684,285.16
Office allowances 11,157,885.89 14,176,924.87
Survey consulting fees 3,284,713.25 513,801.62
Others 4,144,367.00 2,034,463.16
Total 1,116,921,650.63 807,204,631.76
Other description:
None
64. Administrative expenses
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Amount incurred in the Amount incurred in the
current period previous period
Employee remuneration and service fees 71,686,202.20 64,177,881.74
Share-based payments 2,262,118.91
Expenses for depreciation, amortization and 21,559,690.88 22,632,216.20
leases
Office allowance and business entertainment 24,577,036.46 16,334,487.33
expenses
Consultation and intermediary fees 5,676,074.62 4,861,065.35
Travel expense and conference fees 1,708,872.35 996,613.03
Others 1,932,278.31 4,926,790.49
Total 127,140,154.83 116,191,173.05
Other description:
None
65. R&D expenses
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Amount incurred in the Amount incurred in the
current period previous period
Labor cost 30,174,033.12 20,466,648.49
Outsourced R&D expense 21,504,716.33 8,826,262.44
Expenses for depreciation, amortization and 1,820,592.19 1,053,552.11
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leases
Direct input cost 6,836,001.15 785,036.60
Others 731,351.28 239,844.82
Total 61,066,694.07 31,371,344.46
Other description:
None
66. Financial expenses
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Amount incurred in the Amount incurred in the
current period previous period
Interest expenses 6,535,131.18 5,082,866.57
Interest income -24,330,282.91 -11,723,066.05
Handling fees 286,819.54 406,429.79
Exchange gains and losses 2,703,555.21 4,369,640.90
Total -14,804,776.98 -1,864,128.79
Other description:
None
67. Other incomes
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Amount incurred in the Amount incurred in the
current period previous period
Government grants 20,440,098.37 9,370,319.81
Refund of handling fees 523,373.72 467,054.66
VAT input tax addition and reduction -335,500.59 322,433.43
Total 20,627,971.50 10,159,807.90
Other description:
For the details on government grants included in other income of the current period, please see the
particulars contained in “84. Government Grants”, “VII. Notes to the Consolidated Financial Accounts”,
“Section X Financial Report”.
68. Investment income
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount incurred in the Amount incurred in the
Item
current period previous period
Return on long-term equity investments -3,658,316.04 -2,375,106.70
measured by the equity method
Investment income from disposal of -3,546.24
long-term equity investment
Investment income of tradable financial
155 / 207
Semi-Annual Report 2022
assets during the holding period
Dividend income from investment in
other equity instruments during the
holding period
Interest income from debt investment
during the holding period
Interest income from other debt
investments during the holding period
Investment income from disposal of
tradable financial asset
Investment income from disposal of
investment in other equity instruments
Investment income from disposal of
debt investment
Investment income from disposal of
other debt investments
Gains of debt restructuring
Total -3,658,316.04 -2,378,652.94
Other description:
None
69. Net exposure hedging income
□ Applicable √ Not applicable
70. Income from the change in fair value
□ Applicable √ Not applicable
71. Credit impairment loss
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount incurred in the Amount incurred in the
Item
current period previous period
Bad debt loss on notes receivable
Bad debt loss on accounts receivable 813,881.14 3,785,095.76
Bad debt loss on other receivables 61,670.91 -829,303.17
Impairment losses of creditors'
investment
Other impairment losses of creditors'
investment
Bad debt loss on long-term receivables
Loss from impairment of contract assets
Total 875,552.05 2,955,792.59
Other description:
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None
72. Assets impairment loss
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount incurred in the Amount incurred in the previous
Item
current period period
I. Loss on bad debts
II. Loss of inventory falling price and -63,474,565.18 -8,625,168.59
impairment loss of contract
performance cost
III. Impairment loss of long-term -26,080,616.06
equity investment
IV. Impairment loss of investment
real estate
V. Fixed asset impairment losses
VI. Impairment loss from
construction materials
VII. Impairment loss of projects
under construction
VIII. Impairment loss of productive
biological assets
IX. Loss of impairment of oil and gas
assets
X. Impairment loss of intangible
assets
XI. Impairment loss of goodwill
XII. Others
Total -89,555,181.24 -8,625,168.59
Other description:
None
73. Income from disposal of assets
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Amount incurred in the current Amount incurred in the previous
period period
Gains on disposal of fixed assets -1,416.28
Total -1,416.28
Other description:
□ Applicable √ Not applicable
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74. Non-operating revenue
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount included in
Amount incurred in Amount incurred in
Item current non-recurring
the current period the previous period
gains and losses
Total profit from disposal of
non-current assets
Including: Gains from
disposal of fixed assets
Gains from disposal of
intangible assets
Revenue from debt
restructuring
Non-monetary asset
exchange profits
Accepting donations
Government grant
Revenue from fines and 50,000.00 54,435.00 50,000.00
liquidated damages
Others 258,882.06 60,008.12 258,882.06
Total 308,882.06 114,443.12 308,882.06
Government subsidies included in current profits and losses
□ Applicable √ Not applicable
Other description:
□ Applicable √ Not applicable
75. Non-operating expenditure
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount incurred Amount included in
Amount incurred in
Item in the previous current non-recurring
the current period
period gains and losses
Total loss from disposal of
non-current assets
Including: Loss from disposal
of fixed assets
Loss on disposal of intangible
assets
Loss from debt restructuring
Non-monetary asset exchange
losses
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External donation 34,600.00 34,600.00
Others 516,181.27 60,174.49 516,181.27
Total 550,781.27 60,174.49 550,781.27
Other description:
None
76. Income tax expenses
(1) Income tax expense statement
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount incurred in the current Amount incurred in the previous
Item
period period
Current income tax expense 85,324,305.00 46,005,920.10
Deferred income tax expense 7,323,122.04 -2,523,649.52
Total 92,647,427.04 43,482,270.58
(2) Adjustment process of accounting profit and income tax expense
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Amount incurred in the current period
Total profit 401,203,792.96
Income tax expense calculated at statutory/applicable 100,300,948.24
tax rate
Influence of different tax rates applied to subsidiaries -34,909,268.35
Influence of adjusting income tax in previous periods 26,907,736.41
Influence of non-taxable income
Influence of non-deductible costs, expenses and losses 5,002,567.47
Influence of deductible loss of unrecognized deferred -30,183,999.10
income tax assets in previous period
Influence of deductible temporary differences or 25,736,010.77
deductible losses of unrecognized deferred income tax
assets in this period
Additional deductions for R&D expenditures -7,529,690.43
Income tax expenses 85,324,305.00
Other description:
□ Applicable √ Not applicable
77. Other comprehensive income
√ Applicable □ Not applicable
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For the details, please see the particulars contained in “57. Other Comprehensive Income”, “VII. Notes
to the Consolidated Financial Accounts”, “Section X Financial Report”.
78. Items in cash flow statement
(1). Other cash receipts relating to operating activities
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Amount incurred in the current Amount incurred in the
period previous period
Interest income from bank deposits 24,233,809.41 11,723,066.05
Government grant 19,400,553.37 2,840,774.81
Receivables, payables and others 20,707,779.37 27,195,817.12
Total 64,342,142.15 41,759,657.98
Explanation on other cash received related to business activities:
None
(2). Other cash paid relating to operating activities
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Amount incurred in the current Amount incurred in the
period previous period
Image promotion expense 816,333,343.00 629,544,186.17
Other expenses paid in cash 153,061,024.73 165,528,596.63
Receivables, payables and others 24,745,797.67 49,745,240.01
Total 994,140,165.40 844,818,022.81
Explanation on other cash paid related to business activities:
None
(3). Other cash receipts relating to investing activities
□ Applicable √ Not applicable
(4). Other cash paid related to investment activities
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Amount incurred in the current Amount incurred in the
period previous period
Net cash amount from disposal of 61,087,857.19
subsidiaries
Total 61,087,857.19
Other cash paid related to investment activities:
None
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(5). Other cash received related to financing activities
□ Applicable √ Not applicable
(6). Other cash payments related to financing activities
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Amount incurred in the current Amount incurred in the
period previous period
Amount for acquisition of minority 486,631.52
equity 45,000,000.00
Total 45,000,000.00 486,631.52
Other cash payments relating to financing activities:
None
79. Supplementary information to cash flow statement
(1) Supplementary information to cash flow statement
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount for the current Amount of the previous
Supplementary information
period period
1. Reconciliation of net profit to cash flows from operating activities:
Net profit 308,556,365.92 208,649,493.39
Add: provision for impairment of assets 89,555,181.24 8,625,168.59
Credit impairment loss -875,552.05 -2,955,792.59
Depreciation of fixed assets, depletion of 25,408,239.42 23,362,185.03
oil and gas assets and depreciation of
productive biological assets
Amortization of right to use assets
Amortization of intangible assets 8,420,860.43 8,723,991.87
Amortization of long-term unamortized 8,386,299.09 16,417,226.16
expenses
Losses on disposal of fixed assets, 1,416.28
intangible assets and other long-term
assets (“-” for income)
Loss on retirement of fixed assets (“-”
for income)
Losses on changes in fair value (“-” for
income)
Financial expenses (“-” for income) 6,535,131.18 5,082,866.57
Investment loss (“-” for income) 3,658,316.04 2,378,652.94
Decrease in deferred income tax assets 7,323,122.04 -1,790,877.02
(“-” for increase)
Increase in deferred income tax -885,037.35 -732,772.50
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liabilities (“-” for decrease)
Decrease in inventory (“-” for increase) -138,821,424.14 94,250,565.71
Decrease of operating receivable items 42,008,373.99 49,348,525.29
(“-” for increase)
Increase in operational payables (“-” for 354,512,254.57 -145,185,070.90
decrease)
Others
Net cash flow from operating activities 713,782,130.38 266,175,578.82
2. Major investment and financing activities that do not involve cash receipts and payments:
Conversion of debt into capital
Convertible corporate bonds due within
one year
Fixed assets under finance lease
3. Net changes in cash and cash equivalents:
Closing balance of cash 2,694,296,764.69 1,228,370,225.03
Less: Opening balance of cash 2,378,334,768.09 1,401,850,754.88
Add: Closing balance of cash
equivalents
Less: Opening balance of cash
equivalents
Net increase in cash and cash equivalents 315,961,996.60 -173,480,529.85
(2) Net cash paid to acquire subsidiaries in the current period
□ Applicable √ Not applicable
(3) Net cash received from disposal of subsidiaries in the current period
□ Applicable √ Not applicable
(4) Composition of cash and cash equivalents
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
I. Cash 2,694,296,764.69 2,378,334,768.09
Including: cash in vault 19,280.21 22,348.23
Bank deposits that can be used for 2,645,536,194.46 2,338,747,508.20
payment at any time
Other monetary fund that can be 48,741,290.02 39,564,911.66
used for payment at any time
Funds deposited with the central
bank for payment
Deposits in other banks
Funds for interbank lending
II. Cash equivalents
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Semi-Annual Report 2022
Including: Bond investment due
within three months
III. Closing balance of cash and cash 2,694,296,764.69 2,378,334,768.09
equivalents
Including: Cash and cash equivalents
with restricted use by the parent
company or a subsidiary of the group
Other description:
√ Applicable □ Not applicable
Supplementary information to cash flow statement
Time point Balance of Cash and cash Difference Causes of difference
monetary capital equivalents
RMB306,688.40
fixed-term deposit
margin for transformers,
2,694,296,764.
June 30, 2022 2,699,953,453.09 5,656,688.40 RMB5,000,000.00
69
Pinduoduo deposit, and
RMB350,000.00 Tmall
and Alipay deposits.
RMB293,481.72
fixed-term deposit
margin for transformers,
RMB7,000,000.00 L/C
2,378,334,768. deposit, RMB70,000.00
December 31, 2021 2,391,048,249.81 12,713,481.72
09 ETC vehicle deposit,
RMB5,000,000.00
Pinduoduo deposit, and
RMB350,000.00 Tmall
and Alipay deposits.
80. Notes on items in the change statement of owner's equity
Explanation on the names of “other” items for adjusting the closing balance of last year and adjustment
amounts:
□ Applicable √ Not applicable
81. Assets with limited ownership or use rights
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Book value as of the end of the Cause for restrictions
period
Monetary capital 5,656,688.40 Including transformer deposit,
Tmall deposit and Alipay
deposit
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Notes receivable
Inventory
Fixed assets
Intangible assets
Total 5,656,688.40 /
Other description:
None
82. Foreign currency monetary items
(1). Foreign currency monetary items
√ Applicable □ Not applicable
Unit: RMB
Converted RMB at
Closing foreign Converted exchange
Item the end of period
currency balance rate
balance
Monetary capital - - 57,788,421.17
Including: USD 1,461,417.51 6.7114 9,808,157.48
EUR 2,575,972.75 7.0084 18,053,447.42
HKD 16,336,384.85 0.8552 13,970,876.32
KRW 2,899,541,120.81 0.0052 15,077,613.83
JPY 146,319,650.00 0.0049 716,966.29
SF 22,953.36 7.0299 161,359.83
Accounts receivable - - 5,901,539.89
Including: EUR 225,216.98 7.0084 1,578,410.68
HKD 2,532,982.81 0.8552 2,166,181.57
KRW 396,021,722.83 0.0052 2,059,312.96
JPY 19,920,276.00 0.0049 97,609.35
Long-term borrowing - -
Including: USD
EUR
HKD
Other receivables - - 21,240,327.49
Including: EUR 2,955,596.08 7.0084 20,713,999.57
HKD 300,000.00 0.8552 256,560.00
USD 31,578.67 6.7114 211,937.09
KRW 499,000.00 0.0052 2,594.80
JPY 11,272,659.25 0.0049 55,236.03
Accounts payable - - 6,616,020.03
Including: EUR 876,165.02 7.0084 6,140,514.93
HKD 46,500.00 0.8552 39,766.34
KRW 46,376,921.75 0.0052 239,093.27
JPY 40,020,655.40 0.0049 196,645.49
Other payables - - 374,959.11
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Including: HKD 437,972.65 0.8552 374,554.21
JPY 82,633.00 0.0049 404.90
Other description:
None
(2). Descriptions of overseas operating entities, including disclosure of the main overseas
business locations, functional currency and the basis for selection of important overseas
operating entities, and the reasons for changes in functional currency (if any)
√ Applicable □ Not applicable
Hapsode Co., Ltd., Hanna Cosmetics Co., Ltd. and Korea Younimi Cosmetics Co., Ltd. are located in
South Korea, with business income and expenditures denominated in Korean Won which is used as their
accounting currency. Hong Kong Xinghuo Industry Limited, Hong Kong Zhongwen Electronic
Commerce Co., Limited, Hong Kong Xuchen Trading Limited, Hong Kong Keshi Trading, Ltd., Boya
(Hong Kong) Investment Management Co., Ltd. and Hong Kong Wanyan Electronic Commerce Co.,
Ltd. are located in Hong Kong and use RMB as their accounting currency. Japan OR. is located in Japan,
with business income and expenditures denominated in Japanese Yen, and adopts JPY as its accounting
currency.
83. Hedging
□ Applicable √ Not applicable
84. Government grants
1. Basic information of government subsidies
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount included in
Type Amount Reported items current profits and
losses
Asset-related 1,039,545.00 Other incomes 1,039,545.00
government subsidies
Benefit-related 19,400,553.37 Other incomes 19,400,553.37
government subsidies
2. Return of government subsidies
□ Applicable √ Not applicable
Other description
1) Government subsidies related to assets
New Amortization
Initial subsidy Amortization in Closing in the current
Item deferred in the the current deferred period Notes
income current period income Reported
period items
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New Amortization
Initial subsidy Amortization in Closing in the current
Item deferred in the the current deferred period Notes
income current period income Reported
period items
Grants for
modified Other
6,416,263.33 1,039,545.00 5,376,718.33
cosmetic incomes
technology
Subtotal 6,416,263.33 1,039,545.00 5,376,718.33
According to the Decision on the Award for Technical Transformation of Proya Cosmetics Co., Ltd.
Huzhou Branch issued by the People's Government of Daixi Town, Huzhou, the Company received
technical a transformation subsidy of RMB14,561,400.00 from the Government of Daixi Town in 2014,
and apportioned the subsidy on an average basis over the service life of the asset. RMB728,070.00 was
recorded under Other Income in the current period.
According to the Notice on Issuing Construction and Development Fund (First Batch) for Powerful
Industrial City in 2015 (HCQ [2015] No. 150) issued by Huzhou Finance and Huzhou Economy and
Information Bureau, the technical transformation subsidy of RMB2,350,000.00 was paid by Huzhou
Finance in 2015. The Company apportioned the subsidy on an average basis over the service life of the
asset. RMB117,500.00 was recorded under Other Income in the current period.
According to the Notice on Issuing Special Funds (Second Batch) for the “Machine Substitution for
Humans” Project in 2014 (WFG [2015] No. 18) issued by Development and Reform Commission of
Wuxing District, Huzhou and the Finance Bureau of Wuxing District, a technical transformation subsidy
of RMB500,000.00 was paid by the Finance Bureau of Wuxing District, Huzhou in 2015. The Company
apportioned the subsidy on an average basis over the service life of the asset. RMB25,000.00 was
recorded under Other Income in the current period.
According to the Notice on Issuing Special Funds (Second Batch) for Industrial Development in Huzhou
in 2018 (HCQ [2018] No. 319) issued by Huzhou Finance and Huzhou Economy and Information
Bureau, the technical transformation subsidy of RMB1,379,500.00 was paid by Huzhou Finance in
December 2018. The Company apportioned the subsidy on an average basis over the service life of the
asset. RMB68,975.00 was recorded under Other Income in the current period.
According to the Notice on Appropriating Special Subsidy Fund for Demonstration Intelligent Workshop
in Wuxing District in 2019 (WCQH [2020] No. 145) issued by the Huzhou Finance and Development,
Reform and Economic Information Technology Commission of Wuxing District, the special subsidy
fund for demonstration intelligent workshop of RMB2,000,000.00 was paid by the Finance Bureau of
Wuxing District, Huzhou in May 2020. The Company apportioned the subsidy on an average basis over
the service life of the asset. RMB100,000.00 was recorded under Other Income in the current period.
2) Government subsidies related to income and used to compensate the Company for relevant costs or
losses incurred
Reported
Item Amount Notes
items
Paid by the Finance Bureau of
Financial subsidies for the Other
9,325,700.00 Daixi Town, Wuxing District,
development of SMEs incomes
Huzhou
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Paid by the Finance Bureau of
Other
support fund for industry 5,740,000.00 Ningbo Meishan Free Trade
incomes
Port
Paid by the Finance Bureau of
Bonus of kicking off the Other
2,062,638.00 Daixi Town, Wuxing District,
work incomes
Huzhou
According to the Letter on
Proposing the Appropriation
of Municipal Special
Special incentive subsidy Incentive Subsidy Fund for
Other
fund for innovation and 600,000.00 Innovation and Application of
incomes
application of supply chain Supply Chain in 2021 issued
by the Huzhou Commerce
Bureau, it was paid by the
Huzhou Finance Bureau
According to the Notice on
Issuing Special Funds (Fifth
Batch) for Science and
Technology Development in
2022 Special Funds (Fifth
Hangzhou in 2022 issued by
Batch) for Science and Other
200,000.00 Hangzhou Finance and
Technology Development in incomes
Hangzhou Science and
Hangzhou
Technology Bureau, it was
paid by the Xihu District
Science and Technology
Bureau of Hangzhou
According to the Rules for
Implementation of Policy on
Supporting Service Business
to Promote Development
(WFGJF [2022] No. 6) issued
by Development, Reform and
Economic Information
Subsidy for supporting
Other Technology Bureau of
service business to promote 200,000.00
incomes Wuxing District, Huzhou and
development
the Finance Bureau of
Wuxing District, Huzhou, it
was paid by the Development,
Reform and Economic
Information Technology
Bureau of Wuxing District,
Huzhou
Position stability subsidy They were paid by the
Other
and special fund for 1,272,215.37 Wuxing District Human
incomes
municipal patents in Resources and Social Security
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Hangzhou Bureau of Huzhou City, the
Hangzhou Employment
Management Service Center,
and the Xihu District
Administration for Market
Regulation of Hangzhou, etc.
Subtotal 19,400,553.37
The amount of government subsidies included in the current profits and losses in the current period is
RMB20,440,098.37.
85. Others
□ Applicable√ Not applicable
VIII. Change of Combination Scope
1. Business combination not under common control
□ Applicable √ Not applicable
2. Business combination under common control
□ Applicable √ Not applicable
3. Counter purchase
□ Applicable √ Not applicable
4. Disposal of subsidiaries
Is there a single disposal of investment in a subsidiary leading to the loss of control
□ Applicable √ Not applicable
Other description:
□ Applicable √ Not applicable
5. Change of combination scope for other reasons
Description of the changes in the combination scope caused by other reasons (for example, newly
established subsidiaries, liquidation subsidiaries, etc.) and the specific information:
√ Applicable □ Not applicable
Increase of consolidation scope
Equity
Time point of Amount of Contribution
Company name acquisition
equity acquisition contribution ratio
method
Xuzhou Laibo Information New
January 2022 100.00%
Technology Co., Ltd. subsidiaries
Hangzhou Timage Cosmetics New
March 2022 1,000,000.00 100.00%
Co., Ltd. subsidiaries
Proya(Zhejiang) Cosmetics Co., New
May 2022 100.00%
Ltd. subsidiaries
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6. Others
□ Applicable√ Not applicable
IX. Interests in Other Entities
1. Interests in subsidiaries
(1). Composition of enterprise group
√ Applicable □ Not applicable
Shareholding
Subsidiary Main place Registration Nature of Mode of
ratio (%)
Name of business place business Acquisition
Direct Indirect
Hangzhou Proya Hangzhou Hangzhou Wholesale 100.00 Establishment
Trade Co., Ltd. and retail
Zhejiang Meiligu Hangzhou Hangzhou Wholesale 100.00 Establishment
Electronic and retail
Commerce Co., Ltd.
Huzhou Chuangdai Huzhou Huzhou Wholesale 100.00 Establishment
E-commerce Co., and retail
Ltd.
Hapsode Hangzhou Hangzhou Wholesale 100.00 Establishment
(Hangzhou) and retail
Cosmetics Co., Ltd.
Huzhou UZERO Huzhou Huzhou Wholesale 100.00 Establishment
Trading Co., Ltd. and retail
Hong Kong Hong Kong Hong Kong Wholesale 100.00 Establishment
Xinghuo Industry and retail
Limited
Hong Kong Keshi Hong Kong Hong Kong Wholesale 52.00 Establishment
Trading Limited and retail
Ningbo Keshi Ningbo Ningbo Wholesale 52.00 Establishment
Trading Limited and retail
Ningbo Timage Ningbo Ningbo Wholesale 71.36 Establishment
Cosmetics Co., Ltd. and retail
Huzhou Younimi Huzhou Huzhou Wholesale 51.00 Establishment
Cosmetics Co., Ltd. and retail
Explanation on the shareholding ratio in subsidiaries different from the voting ratio;
None
Basis for holding 50% or less of voting rights but still controlling the investee, and holding more than
50% of voting rights but not controlling the investee:
None
Basis for controlling the important structured entities included in the combination scope:
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None
Basis for determining whether a company is an agent or a principal:
None
Other description:
None
(2). Significant non-wholly owned subsidiaries
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Shareholding Gain or loss Dividends declared
Balance of
ratio of the attributable to and distributed to
minority
Name of subsidiary minority minority minority
interests at the
shareholder shareholders in the shareholders in the
end of the period
Percentage (%) current period current period
Ningbo Timage 28.64 13,051,241.34 8,186,640.20
Cosmetics Co., Ltd.
Explanation on the shareholding ratio of minority shareholder in subsidiaries different from the voting
ratio:
□ Applicable √ Not applicable
Other description:
□ Applicable √ Not applicable
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(3). Major financial information of important non-wholly-owned subsidiaries
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Closing balance Opening balance
Non-
Name of
Non-curr Non- curren
subsidiar Current Non-curre Current Total Current Total Current Total
Total assets ent current t
y assets nt assets liabilities liabilities assets assets liabilities liabilities
liabilities assets liabilit
ies
Ningbo 144,529,43 255,329 144,784,765. 120,285,164. 120,285,16 83,031,78 94,867.2 83,126,65 94,774,66 94,774,6
Timage 5.60 .58 18 93 4.93 5.97 2 3.19 6.19 66.19
Cosmetic
s Co.,
Ltd.
Amount incurred in the current period Amount incurred in the previous period
Name of Cash flows Cash flows
Total Total
subsidiar Operating generated from Operating generated from
Net profit comprehensive Net profit comprehensive
y revenue operating revenue operating
income income
activities activities
Ningbo 234,672,214. 40,846,250.55 40,846,250.55 24,728,583.15 116,044,099.29 -8,463,875.97 -8,463,875.97 -2,465,779.00
Timage 61
Cosmetic
s Co.,
Ltd.
Other description:
None
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(4). Major restrictions on using enterprise group assets and paying off enterprise group debts
□ Applicable √ Not applicable
(5). Financial support or other support provided to structured entities included in the scope of
consolidated financial statements
□ Applicable √ Not applicable
Other description:
□ Applicable √ Not applicable
2. The share of owner's equity in the subsidiary has changed and still controls the transactions
of the subsidiary
√ Applicable □ Not applicable
(1). Explanation on changes in the share of owners' equity in subsidiaries on equity
√ Applicable □ Not applicable
Shareholding ratio Shareholding ratio
Name of subsidiary Time of change
before change after change
Ningbo Timage Cosmetics Co.,
March 2022 61.36% 71.36%
Ltd.
(2). The impact of transactions on minority shareholders' equity and the equity attributable to the
parent company
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Ningbo Timage Cosmetics Co., Ltd.
Purchase cost/disposal consideration
- Cash 45,000,000.00
- Fair value of non-cash assets
Total purchase cost/disposal consideration 45,000,000.00
Less: The net asset share of a subsidiary calculated 126,713.88
according to the proportion of the equity
acquired/disposed of
Difference 44,873,286.12
Including: adjustment of capital reserves 44,873,286.12
Adjusted surplus reserve
Undistributed profits after adjustment
Other description
□ Applicable √ Not applicable
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3. Rights and interests in joint ventures or associates
√ Applicable □ Not applicable
(1). Significant joint ventures or associates
□ Applicable √ Not applicable
(2). Main financial information of significant joint ventures
□ Applicable √ Not applicable
(3). Major financial information of significant associates
□ Applicable √ Not applicable
(4). Summary of financial information of insignificant joint ventures or associates
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Closing balance/amount incurred Beginning balance/amount
in current period incurred in previous period
Joint ventures:
Total book value of investment 3,068,944.66 3,301,050.94
The total of the following items calculated according to the shareholding ratio
-Net profit -5,814.02 -5,579.63
-Other comprehensive income
-Total comprehensive income -5,814.02 -5,579.63
Associates:
Total book value of investment 155,226,385.44 183,291,583.06
The total of the following items calculated according to the shareholding ratio
-Net profit -3,652,502.02 -2,369,527.07
-Other comprehensive income
-Total comprehensive income -3,652,502.02 -2,369,527.07
Other description
None
(5). Statement of significant restrictions on the ability of joint ventures or associates to transfer
capital to the Company
□ Applicable √ Not applicable
(6). Excess losses incurred by joint ventures or associates
□ Applicable √ Not applicable
(7). Unconfirmed commitments related to the investment to joint ventures
□ Applicable √ Not applicable
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(8). Contingent liabilities related to investments in joint ventures or associates
□ Applicable √ Not applicable
4. Important joint operation
□ Applicable √ Not applicable
5. Rights and interests in structured entities not included in the scope of consolidated financial
statements
Explanation on structured entities not included in the scope of consolidated financial statements:
□ Applicable √ Not applicable
6. Others
□ Applicable√ Not applicable
X. Risks related to Financial Instruments
√ Applicable □ Not applicable
The Company's risk management aims to reach a balance between risks and benefits, to minimize the
negative impact of risks on the Company's operating results, and to maximize the interests of
shareholders and other equity investors. Based on these risk management goals, the Company's basic
strategy for risk management is to determine and analyze various risks faced by the Company, establish
an appropriate risk tolerance bottom line and conduct risk management, and supervise various risks in a
timely and reliable manner to control the risks within a limited scope.
The Company faces various risks related to financial instruments in its daily activities, including credit
risk, liquidity risk and market risk. The management has deliberated and approved the policing
governing these risks as outlined below:
(I) Credit risk
Credit risk refers to the risk that one party of a financial instrument fails or is unable to fulfill its
obligations, resulting in financial losses to the other party.
1. Approach to credit risk
(1) Assessment method of credit risk
The Company, on each balance sheet date, assesses whether the credit risk of relevant financial
instruments has increased significantly since initial recognition. In determining whether the credit risk
has increased significantly since initial recognition, the Company takes into account the reasonable and
well-founded information available without unnecessary additional costs or efforts, including qualitative
and quantitative analysis based on historical data, external credit risk rating and forward-looking
information. The Company determines the changes that may result in default risk of financial
instruments within their expected duration by comparing the default risk of the financial instruments on
the balance sheet date and the initial recognition date based on an individual financial instrument or the
combined financial instruments with similar credit risk characteristics.
The Company deems that the credit risk of the financial instruments has increased significantly if any
one or more of the following quantitative and qualitative standards are triggered:
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1) The main quantitative standard is that the probability of default within the remaining duration on the
balance sheet date has increased by more than a certain proportion compared with that at the initial
recognition;
2) The main qualitative standard is that there are material adverse changes occurring to the business or
financial conditions of the debtor and changes in the exiting or anticipated technology, market, economic
or legal environment which have a material adverse effect on the debtor's ability to make repayment to
the Company.
(2) Definitions of default and assets with credit impairment
If the financial instruments meet any one or more of the following conditions, the Company defines the
financial assets as in default, with its standard consistent with the definition of credit impairment:
1) The debtor faces major financial difficulties;
2) The debtor breaches the provisions governing it in the contract;
3) The debtor is very likely to become bankrupt or go into other financial restructuring proceedings;
4) The creditor makes a concession to the debtor which it will not make under any other circumstances
for the economic or contractual considerations in connection with the debtor's financial difficulties.
2. Measurement of expected credit loss
The key parameters for measurement of expected credit loss include the probability of default, loss given
default and default risk exposure. The Company builds the models of probability of default, loss given
default and default risk exposure considering the quantitative analysis of historical statistical data (such
as counterparty rating, guarantee type, category of collateral and pledge, repayment method) and
forward-looking information.
3. For the details on the Reconciliation Statement of Beginning Balance and Closing balance of
Financial Instrument Loss Reserve, please see the particulars contained in “5. Account Receivable; 6.
Receivable Financing; and 8. Other Receivables”, “VII. Notes to the Consolidated Financial Accounts”,
“Section X Financial Report”.
4. Credit risk exposure and credit risk concentration
The credit risk of the Company is derived mainly from the monetary capital and accounts receivable. To
control the above related risk, the Company has respectively taken the following measures.
(1) Monetary capital
Bank deposits and other monetary capital of the Company were deposited with financial institutions with
high credit rating; therefore, the credit risk was low.
(2) Accounts receivable
The Company continuously carries out credit assessment on customers who trade in credit. According to
the result of credit assessment, the Company deals with approved and credible customers, and monitors
the balance of its accounts receivable, so as to prevent significant bad debt risk.
No guarantee is required as the Company only transacts with recognized and reputable third parties.
Credit risk concentration is managed as per customers. As of June 30, 2022, there was certain credit
concentration risk in the Company and 55.26% (December 31, 2021: 77.35%) of the accounts receivable
of the Company were concentrated on top five customers in the balance of account receivable. The
Company had no guarantee or other credit enhancement on the balance of the accounts receivable.
The maximum credit risk exposure of the Company is the book value of the financial assets in the
balance sheet.
(II) Liquidity risk
Liquidity risk refers to the risk of shortage of funds when the Company fulfills its obligation to settle by
delivering cash or other financial assets. Liquidity risk may arise from the inability to sell financial
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assets at fair value as soon as possible, the counterparty's inability to pay off its contractual debt, the
acceleration of debt or the inability to generate expected cash flow.
To control such risk, the Company applies various financing methods, such as bill settlement and bank
loans, in appropriate combination of long-term and short-term financing ways to optimize the financing
structure and keep the balancing between financing sustainability and flexibility. The Company has
obtained lines of credit from several commercial banks to satisfy its working capital demands and capital
expenditure.
Classification of financial liabilities by the remaining due days
Closing amount
Item Undiscounted
Carrying amount Within 1 year 1-3 years Above 3 years
contract value
Bank
200,251,506.85 207,400,000.00 207,400,000.00
loans
Notes
52,985,397.00 52,985,397.00 52,985,397.00
payable
Accounts
758,217,516.91 758,217,516.91 758,217,516.91
payable
Other
61,385,996.69 61,385,996.69 61,385,996.69
payables
Bonds
711,060,173.61 902,431,400.00 4,132,700.00 15,028,000.00 883,270,700.00
payable
1,982,420,310.
Subtotal 1,783,900,591.06 1,084,121,610.60 15,028,000.00 883,270,700.00
60
(Continued)
Balance at the end of the previous year
Item Undiscounted
Carrying amount Within 1 year 1-3 years Above 3 years
contract value
Bank
200,251,506.85 201,745,068.49 201,745,068.49
loans
Bills
79,156,771.40 79,156,771.40 79,156,771.40
payable
Accounts
404,026,241.16 404,026,241.16 404,026,241.16
payable
Other
62,162,153.55 62,162,153.55 62,162,153.55
payables
Bonds
695,586,778.80 902,807,313.00 2,255,139.00 11,275,695.00 889,276,479.00
payable
Subtotal 1,441,183,451.76 1,649,897,547.60 749,345,373.60 11,275,695.00 889,276,479.00
(III) Market risk
Market risk refers to the fact that the fair value or future cash flow of financial instruments may fluctuate
due to changes in market prices. Market risks include interest rate and foreign exchange risks.
1. Interest rate risk
Interest rate risk refers to that the fair value or future cash flow of financial instruments may fluctuate
due to changes in market interest rates. The interest-bearing financial instruments with a fixed interest
rate cause the interest rate risk of fair value, and those with a floating interest rate cause the interest rate
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risk of cash flow. The Company determines the proportion of financial instruments with a fixed interest
rate and financial instruments with a floating interest rate according to the market environment, and
maintains an appropriate combination of financial instruments through regular review and monitoring.
2. Foreign exchange risk
Foreign exchange risk refers to that the fair value or future cash flow of financial instruments will
fluctuate due to the change of foreign exchange rate. The risk of changes in foreign exchange rates faced
by the Company is mainly related to the Company's foreign currency assets and liabilities. The Company
carries out most of its business in the Chinese mainland, and therefore has main activities valuated in
RMB. Therefore, the market risk of foreign exchange changes faced by the Company is minor.
For the details on the monetary assets and liabilities in foreign currency of the Company at the end of the
period, please see the particulars contained in "82. Monetary Items in Foreign Currency", "VII. Notes to
the Consolidated Financial Accounts", "Section X Financial Report".
XI. Disclosure of Fair Value
1. The closing fair value of assets and liabilities measured at fair value
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Closing fair value
The first level of The second level The third level of
Item
fair value of fair value fair value Total
measurement measurement measurement
I. Continuous fair value
measurement
(I)Tradable financial assets
1. Financial assets
measured at fair value with
changes included in current
profits and losses
(1) Debt instrument
investment
(2) Equity instrument
investment
(3) Derivative financial
assets
2. Financial assets
designated as measured at
fair value and the changes
of which are accounted in
current profit or loss
(1) Debt instrument
investment
(2) Equity instrument
investment
(II)Other debt investments
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(III) Other equity 146,402,400.00 146,402,400.00
instrument investments
(IV)Investment real estate
1. Land use right for lease
2. Leased buildings
3. Land use rights that are
held for transfer upon
appreciation
(V) Biological assets
1. Consumable biological
assets
2. Productive biological
assets
Receivables financing 8,727,916.00 8,727,916.00
Total assets consistently 155,130,316.00 155,130,316.00
measured at fair value
(VI) Financial liabilities
held for trading
1. Financial liabilities
measured at fair value
through profit or loss
Including: Trading bonds
issued
Derivative
financial
liabilities
Others
2. Financial liabilities
designated to be measured
at fair value through profit
or loss
Total liabilities
continuously measured in
terms of fair value
II. Non-continuous Fair
Value Measurement
(1) Assets held for sale
Total assets measured by
non-continuous fair value
Total liabilities not
continuously measured in
terms of fair value
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2. Determination basis for the market price of continuous and non-continuous first-level fair
value measurement items
□ Applicable √ Not applicable
3. Qualitative and quantitative information on the valuation techniques and important
parameters used in continuous and non-continuous second-level fair value measurement
items
□ Applicable √ Not applicable
4. Qualitative and quantitative information on the valuation techniques and important
parameters used in continuous and non-continuous third-level fair value measurement items
√ Applicable □ Not applicable
The fair value of notes receivable held by the Company is determined according to their nominal amount.
The fair value of other equity instrument investments is determined according to their historic cost.
5. Adjustment information and sensitivity analysis of non-observable parameters between
beginning and closing book value for continuous third-level fair value measurement items
□ Applicable √ Not applicable
6. For continuous fair value measurement items, if the conversion occurs among different levels
within the current period, the reasons for the conversion and the policy for determining the
conversion time point
□ Applicable √ Not applicable
7. Changes in valuation techniques during the current period and the reasons for the changes
□ Applicable √ Not applicable
8. Fair value of financial assets and financial liabilities not measured at fair value
□ Applicable √ Not applicable
9. Others
□ Applicable√ Not applicable
XII. Related Parties and Related Transactions
1. Information about the parent company of the Company
□ Applicable √ Not applicable
2. Information on subsidiaries of the Company
See the notes for details of the subsidiaries of the Company
√ Applicable □ Not applicable
For the details on subsidiaries of the Company, please see the particulars contained in “IX. Interests in
Other Entities”, “Section X Financial Report”.
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3. Information on joint ventures and associated entities of the Company
See the notes for details of the significant joint ventures or associated entities of the Company
□ Applicable √ Not applicable
Information about other joint ventures or associates that have related transactions with the Company in
the current period, or have balance resulting from related transactions with the Company in the previous
period is as follows
□ Applicable √ Not applicable
4. Information of other related parties
√ Applicable □ Not applicable
Name of other related parties Relationship between other related
parties and the Company
Zhejiang Yueqing Rural Commercial Bank Co., Ltd. Others
Huzhou Beauty Town Technology Incubation Park Co., Ltd. Others
Xiongke Culture Media (Hangzhou) Co., Ltd. Others
Metis Info Tech (Guangzhou) Co., LTD. Others
Ningbo Weiman Cosmetics Co., Ltd. Others
Cosmetics Industry (Huzhou) Investment Development Co., Others
Ltd.
Zhuhai Healthlong Biotechnology Co., Ltd. Others
Shaoxing Keqiao Qingteng Culture Investment Co., Ltd. Others
PARISEZHAN HK LIMITED Others
EURL PHARMATICA Others
SARL ORTUS Others
S.A.S AREDIS Others
Korea Youke Co., Ltd. Others
Shanghai Youke Brand Management Co., Ltd. Others
Shanghai Youke Jiabei Technology Co., Ltd. Others
Pan Xiang Others
Other description
None
5. Information of related party transactions
(1). Related party transactions of purchasing and selling goods, rendering and receiving
services
Statement of purchasing goods/receiving services
√ Applicable □ Not applicable
Unit: ’0,000 Currency: RMB
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Details of Amount incurred
Amount incurred in the
Related parties related party in the current
previous period
transaction period
Zhuhai Healthlong Biotechnology Co., Purchase of 2,456.11
Ltd. goods
Statement of sales of goods/rendering of service
√ Applicable □ Not applicable
Unit: ’0,000 Currency: RMB
Details of Amount incurred
Amount incurred in the
Related parties related party in the current
previous period
transaction period
Shanghai Youke Jiabei Technology Sales of goods 3,361.65
Co., Ltd.
Shanghai Youke Brand Management Sales of goods 1,228.90 3,485.85
Co., Ltd.
Ningbo Weiman Cosmetics Co., Ltd. Sales of goods 63.08
Cosmetics Industry (Huzhou) Sales of goods 0.53 0.30
Investment Development Co., Ltd.
Korea Youke Co., Ltd. Sales of goods 91.16
Shaoxing Keqiao Qingteng Culture Sales of goods 2.62
Investment Co., Ltd.
Zhejiang Yueqing Rural Commercial Sales of goods 1.41
Bank Co., Ltd.
Explanation on related party transactions in purchasing and selling goods, rendering and receiving
services
□ Applicable √ Not applicable
(2). Related entrusted management/contracting and entrusted management/outsourcing
Statement of entrusted management/contracting of the Company:
□ Applicable √ Not applicable
Explanation on related trusteeship/contracting
□ Applicable √ Not applicable
Statement of entrusted management/outsourcing of the Company
□ Applicable √ Not applicable
Explanation on related management/outsourcing
□ Applicable √ Not applicable
(3). Related-party lease
The Company as the lessor:
□ Applicable √ Not applicable
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The Company as the lessee:
√ Applicable □ Not applicable
Unit: ’0,000 Currency: RMB
Variable lease
Simple short-term lease
payments not included Interest expense
and low-value asset Increased right-of-use
in the measurement of Rent paid assumed on lease
rental expense (if assets
lease liability (if liability
Types of applicable)
applicable)
Name of lessor leased
Amount Amount Amount Amount Amount Amount Amount Amount Amount Amount
assets
incurred incurred incurred incurred incurred incurred incurred incurred incurred incurred
in the in the in the in the in the in the in the in the in the in the
current previous current previous current previous current previous current previous
period period period period period period period period period period
Huzhou Beauty
Town Technology
Site 81.76 48.40
Incubation Park
Co., Ltd.
Shanghai Youke
Brand
Site 23.49
Management Co.,
Ltd.
Explanation on related lease
□ Applicable √ Not applicable
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(4). Information on related guarantees
The Company as the guarantor
□ Applicable √ Not applicable
The Company as the guaranteed party
□ Applicable √ Not applicable
Explanation on related guarantee
□ Applicable √ Not applicable
(5). Borrowing of related party funds
□ Applicable √ Not applicable
(6). Information of asset transfer and debt restructuring of related parties
□ Applicable √ Not applicable
(7). Remuneration of key management personnel
√ Applicable □ Not applicable
Unit: ’0,000 Currency: RMB
Amount incurred in the current Amount incurred in the
Item
period previous period
Remuneration of key management 449.45 491.60
personnel
(8). Other related party transactions
√ Applicable □ Not applicable
The Company and its subsidiaries have opened bank accounts with Zhejiang Yueqing Rural
Commercial Bank Company Limited and collected the interests on deposits at the market interest rate.
(1) Deposits with related party banks
Unit: ’0,000 Currency: RMB
Details of related Closing Beginning
Related parties
party transaction amount amount
Zhejiang Yueqing Rural Commercial Bank Co.,
Bank deposits 14,666.77 14,645.33
Ltd.[Note]
[Note]: According to the identification rules of related party relationship, Zhejiang Yueqing Rural
Commercial Bank Co., Ltd. is no longer included in the related party statistics of the Company since
March 16, 2022, so the “closing amount” is the account balance as of March 15, 2022.
(2) Interests received from related parties
Unit: ’0,000 Currency: RMB
Amount for
Details of related Amount for the
Related parties the previous
party transaction current period
period
Zhejiang Yueqing Rural Commercial Bank Co.,
Interest income 144.49 317.84
Ltd. [Note]
[Note]: According to the identification rules of related party relationship, Zhejiang Yueqing Rural
Commercial Bank Co., Ltd. is no longer included in the related party statistics of the Company since
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March 16, 2022, so the “amount for the current period” is filled as from the beginning of 2022 to March
15, 2022, and the Company obtained deposit interest of RMB1.4449 million from Zhejiang Yueqing
Rural Commercial Bank Co., Ltd.
6. Accounts receivable and payable from related parties
(1). Receivable items
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Closing balance Opening balance
Item Related parties Provision for Provision for bad
Book balance Book balance
bad debts debts
Accounts
receivable
Ningbo 712,816.09 35,640.80 79,007.60 3,950.38
Weiman
Cosmetics Co.,
Ltd.
Subtotal 712,816.09 35,640.80 79,007.60 3,950.38
Prepayments
Huzhou Beauty 43,000.00 43,000.00
Town
Technology
Incubation Park
Co., Ltd.
Subtotal 43,000.00 43,000.00
Other
receivables
EURL 17,981,236.73 17,981,236.73 19,606,379.23 19,606,379.23
PHARMATICA
[Note]
Huzhou Beauty 133,568.20 133,568.20 133,568.20 121,334.10
Town
Technology
Incubation Park
Co., Ltd.
Subtotal 18,114,804.93 18,113,604.93 19,739,947.43 19,727,713.33
[Note] The amount of EURL PHARMATICA is the consolidated statistics of EURL PHARMATICA,
PARISEZHAN HK LIMITED, SARL ORTUS and S.A.S AREDIS under the control of the same
person.
(2). Payable items
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Related parties Book balance at the Book balance at the beginning
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end of the period of the period
Accounts payable
S.A.S AREDIS 229,996.20 236,930.48
Ningbo Weiman 121,884.94 121,884.94
Cosmetics Co., Ltd.
Subtotal 351,881.14 358,815.42
7. Commitment of related parties
□ Applicable √ Not applicable
8. Others
□ Applicable√ Not applicable
XIII. Share-based Payments
1. Overall situation of share-based payment
√ Applicable □ Not applicable
Unit: Share Currency: RMB
Total amount of equity instruments granted by the Not applicable
Company in the current period
Total amount of equity instruments exercised by the 347,201
Company in the current period
Total amount of equity instruments of the Company
which are invalid in the current period
The range of exercise pricing of stock options Not applicable
issued by the Company at the end of the period and
their remaining periods of contracts
The range of exercise pricing of other equity Not applicable
instrument options issued by the Company at the
end of the period and their remaining periods of
contracts
Other description
On July 12, 2018, according to the Proposal on 2018 Restricted Share Incentive Plan of the Company
(Draft) and Its Summary considered and approved at the First Extraordinary General Meeting of the
Company in 2018, under the Incentive Plan, the Company proposed to grant up to 1,467,200 restricted
shares to incentive objects, of which 1,201,100 shares would be initially granted and 266,100 shares
would be reserved. The initial grant date of the restricted shares is July 12, 2018. The incentive objects
include senior management, middle-level management and backbone employees working for the
Company (excluding independent directors, supervisors and shareholders or actual controllers severally
or jointly holding more than 5% shares of the Company and their spouses, parents and children), 32
persons in total, and the grant price is RMB17.95 per share. The subject shares under the Incentive Plan
are derived from the ordinary A shares of the Company privately issued by the Company to the incentive
objects. The validity period of the Incentive Plan begins from the date when the registration of the grant
of restricted shares is completed to the date when all the restricted shares granted to the incentive objects
are released or repurchased and de-registered, in no case longer than 60 months. The granted restricted
shares will be released in three tranches (30%, 30% and 40%) over 36 months after the end of 12 months
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following the initial grant of the restricted shares. The performance condition for the initial release is
that: On the basis of the operating revenue and net profit in 2017, the growth rate of operating revenue
and net profit in 2018 was no less than 30.8% and 30.1%, respectively. The performance condition for
the second release is that: On the basis of the operating revenue and net profit in 2017, the growth rate of
operating revenue and net profit in 2019 was no less than 74.24% and 71.21%, respectively. The
performance condition for the third release is that: On the basis of the operating revenue and net profit in
2017, the growth rate of operating revenue and net profit in 2020 was no less than 132.61% and
131.99%, respectively.
On July 12, 2018, the Proposal on Initial Grant of Restricted Shares to Incentive Objects was considered
and approved at the 22nd meeting of the first session of Board of Directors of the Company, determining
July 12, 2018 as the initial grant date. Some incentive objects voluntarily waived their right of
subscription in practice and the number of restricted shares actually granted by the Company was
1,096,200 shares.
On December 12, 2018, the Proposal on Grant of Reserved Part of Restricted Shares to Incentive
Objects was considered and approved at the 3rd meeting of the second session of Board of Directors of
the Company, determining December 12, 2018 as the grant date of the reserved restricted shares. The
incentive objects completed the subscription in practice and the number of restricted shares actually
granted by the Company was 266,100 shares.
On December 30, 2019, the Proposal on Satisfying the Conditions for Release from Sales Restrictions in
the First Release Period for Initially Granted Shares and Reserved Shares Under 2018 Restricted Share
Incentive Plan deliberated and approved at the 10th meeting of the second session of Board of Directors
of the Company released the 369,500 restricted shares held by the incentive objects who had satisfied
the first release conditions. The circulating date of the sales was January 6, 2020.
According to the Proposal on Repurchasing and De-registering the Granted but Unreleased Restricted
Shares of the Incentive Objects Who Become Ineligible for the Incentive deliberated and approved at the
4th meeting of the second session of Board of Directors of the Company in 2019 and the 1st
Extraordinary General Meeting of the Company in 2019 and the Proposal on Repurchasing and
De-registering Part of Restricted Incentive Shares deliberated and approved at the 8th meeting of the
second session of Board of Directors of the Company in 2019, the Company repurchased and
de-registered 92,740 restricted shares and paid the repurchase price of RMB1,657,699.80, as some
incentive objects left the Company or their performance did not satisfy the condition for releasing all the
restricted shares.
On July 6, 2020, according to the Proposal on Adjusting 2020 Company-level Performance Assessment
Indicators Under 2018 Restricted Share Incentive Plan and Related Documents deliberated and
approved at the 2nd Extraordinary General Meeting of the Company in 2020, the Company adjusted the
original three performance assessment indicators for release from sales restrictions as: On the basis of
the operating revenue in 2017, the growth rate of operating revenue in 2020 was no less than 110.22%;
and on the basis of the net profit in 2017, the growth rate of net profit in 2020 was no less than 131.99%.
According to the Proposal on Repurchasing and De-registering Part of Restricted Incentive Shares
deliberated and approved at the 15th and 16th meetings of the second session of Board of Directors of
the Company in 2020 and the 3rd Extraordinary General Meeting of the Company in 2020, the Company
repurchased and de-registered 152,635 restricted shares and paid the repurchase price of
RMB2,584,110.55 in 2020, as some incentive objects left the Company or their performance did not
satisfy the condition to release all the restricted shares.
According to the Proposal on Satisfying the Conditions for Release from Sales Restrictions in the
Second Release Period for Initially Granted Shares and Reserved Shares Under 2018 Restricted Share
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Incentive Plan deliberated and approved at the 18th meeting of the second session of Board of Directors
of the Company in 2021, the Company released the 293,265 restricted shares held by the incentive
objects who had satisfied the second release conditions. The circulating date of the sales was January 14,
2021.
According to the Proposal on Repurchasing and De-registering Part of Restricted Incentive Shares
deliberated and approved by the resolution of the 20th meeting of the second session of Board of
Directors of the Company in 2021 and by the resolution of the 1st Extraordinary General Meeting of the
Company in 2021, the Company repurchased and de-registered 106,959 restricted shares and paid the
repurchase price of RMB1,733,805.39, as some incentive objects left the Company or their performance
did not satisfy the condition for releasing all the restricted shares.
According to the Proposal on Satisfying the Conditions for Release from Sales Restrictions in the Third
Release Period for Initially Granted Shares and Reserved Shares Under 2018 Restricted Share Incentive
Plan deliberated and approved at the 4th meeting of the third session of Board of Directors of the
Company in 2022, the Company released the 347,201 restricted shares held by the incentive objects who
had satisfied the third release conditions. The circulating date of the sales was January 20, 2022.
2. Equity-settled share-based payments
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Determination method of the fair value of equity Determined as per the share price on the grant
instruments on grant date date and the grant price of restricted shares
Basis for determining the quantity of feasible equity Determined according to the estimated
instruments performance conditions in the release period
Reason for material difference between estimation Not applicable
in the current period and estimation in the previous
period
Accumulative amount of equity-settled share-based 52,284,430.56
payment included in capital reserves
Total recognized expenses of equity-settled
share-based payment in the current period
Other description
None
3. Cash-settled share-based payment
□ Applicable √ Not applicable
4. Modification and termination of share-based payment
□ Applicable √ Not applicable
5. Others
□ Applicable√ Not applicable
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XIV. Commitments and Contingencies
1. Significant commitments
√ Applicable □ Not applicable
Significant external commitments, nature and amount existing at the balance sheet date
As of June 30, 2022, the investment projects of the Company's public offering for fund raising are as
follows:
Unit: RMB’0,000
Total Closing
Fund raising Project Filing
Item investment accumulated
commitment or Approval No.
amount investment
Huzhou Production Base
43,752.54 33,850.00 10,960.95 2011-330502-04-01-178735
Expansion Project (Phase I)
Longwu R&D Center
21,774.45 19,450.00 9,586.41 2101-330106-04-02-307916
Construction Project
Information System Upgrade
11,239.50 9,050.00 476.06
Project
Additional working capital 18,000.00 12,821.30
Total 94,766.49 75,171.30 21,023.42
2. Contingencies
(1). Important contingencies on the balance sheet date
□ Applicable √ Not applicable
(2). Even if the Company does not have important contingencies to be disclosed, it shall also
state:
□ Applicable √ Not applicable
3. Others
□ Applicable √ Not applicable
XV. Events after balance sheet day
1. Important non-adjustment matters
□ Applicable √ Not applicable
2. Profit distribution
□ Applicable √ Not applicable
3. Sales return
□ Applicable √ Not applicable
4. Explanation of other events after the balance sheet date
√ Applicable □ Not applicable
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On July 25, 2022, according to the Proposal on 2022 Restricted Share Incentive Plan of the Company
(Draft) and Its Summary deliberated and approved at the First Extraordinary General Meeting of the
Company in 2022, under the Incentive Plan, the Company proposed to grant 2,100,000 restricted shares
to incentive objects. The initial grant date of the restricted shares is July 25, 2022. The incentive objects
include senior management, middle-level managers and backbone employees working for the Company
(excluding independent directors and supervisors, and the shareholders or actual controllers severally or
jointly holding more than 5% shares of the Company and their spouses, parents and children), 101
persons in total, and the grant price is RMB78.56 per share. The subject shares under the Incentive Plan
are derived from the ordinary A shares of the Company privately issued by the Company to the incentive
objects. The validity period of the Incentive Plan begins from the date when the registration of restricted
shares is completed to the date when all the restricted shares granted to the incentive objects are released
or repurchased and de-registered, in no case longer than 48 months. The granted restricted shares will be
released in three tranches (30%:30%:40%) over 36 months after the end of 12 months from the date
when the registration of the grant is completed. The performance condition for the initial release is that:
On the basis of the operating revenue and net profit in 2021, the growth rate of operating revenue and
net profit in 2022 was no less than 25%, respectively. The performance condition for the second release
is that: On the basis of the operating revenue and net profit in 2021, the growth rate of operating revenue
and net profit in 2023 was no less than 53.75%, respectively. The performance condition for the third
release is that: On the basis of the operating revenue and net profit in 2021, the growth rate of operating
revenue and net profit in 2024 was no less than 87.58%, respectively.
On July 25, 2022, the Proposal on Grant of Restricted Shares to Incentive Objects was deliberated and
approved at the 7th meeting of the third session of Board of Directors of the Company, determining July
25, 2022 as the grant date. The incentive objects completed the subscription in practice and the number
of restricted shares actually granted by the Company was 2,100,000.
XVI. Other Significant Matters
1. Correction of early accounting errors
(1). Retrospective restatement
□ Applicable √ Not applicable
(2). Prospective application
□ Applicable √ Not applicable
2. Debt restructuring
□ Applicable √ Not applicable
3. Asset replacement
(1). Exchange of non-monetary assets
□ Applicable √ Not applicable
(2). Replacement of other assets
□ Applicable √ Not applicable
4. Annuity plan
□ Applicable √ Not applicable
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5. Termination of operation
□ Applicable √ Not applicable
6. Segment information
(1). Determination basis and accounting policy of reportable segment
√ Applicable □ Not applicable
The Company does not have diversified operations or cross-regional operations, so there is no
division-based reporting. The details of main business income and main business costs of the Company
classified by brands are as follows:
January to June 2022
Brand Income from main Costs of main business Gross profit
business
Proya brand 2,128,414,002.19 632,399,637.33 1,496,014,364.86
Other brands 487,505,113.14 198,290,360.05 289,214,753.09
Subtotal 2,615,919,115.33 830,689,997.38 1,785,229,117.95
January to June 2021
Brand Income from main Costs of main business Gross profit
business
Proya brand 1,487,120,837.44 508,232,715.85 978,888,121.59
Other brands 424,159,627.47 182,705,819.33 241,453,808.14
Subtotal 1,911,280,464.91 690,938,535.18 1,220,341,929.73
(2). Financial information of the reportable segment
□ Applicable √ Not applicable
(3). If the Company has no reportable segment, or cannot disclose the total assets and liabilities
of each reportable segment, the reasons shall be explained
□ Applicable √ Not applicable
(4). Other description
□ Applicable √ Not applicable
7. Other significant transactions and matters that have an impact on investors' decisions
□ Applicable √ Not applicable
8. Others
√ Applicable □ Not applicable
For the details on accounting policies for short term leases and low value asset leases of the Company,
please see the particulars contained in “42. Lease”, “V. Significant Accounting Policies and Estimates”,
“Section X Financial Report”. Short term lease charges and low value asset lease charges included in
current profits and losses are as below:
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Amount for the same
Amount for the
Item period in the
current period
previous year
Short term lease charges 1,522,375.17 2,757,934.25
Low value asset lease charges (except for short term
85,154.60 297,177.58
lease charges)
Total 1,607,529.77 3,055,111.83
Operating lease
(1) Lease income
Amount for the same
Amount for the
Item period in the
current period
previous year
Lease income 796,423.81 1,564,096.37
(2) Assets under operating lease
Balance at the end of
Item Closing amount
last year
Investment property 68,783,466.09 70,321,868.00
Subtotal 68,783,466.09 70,321,868.00
XVII. Notes on Main Items in Financial Statements of the Parent Company
1. Accounts receivable
(1). Disclosed by account age
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Account age Book balance at the end of the period
Within 1 year
Including: Subitem within 1 year
Sub-total within 1 year 341,670,218.32
1 to 2 years 50,590,083.61
2 to 3 years
Above 3 years
3 to 4 years
4 to 5 years
Above 5 years
Total 392,260,301.93
(2). Disclosed by classification of bad debt provisions
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Category Closing balance Opening balance
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Provision for Provision for bad
Book balance Book balance
bad debts debts
Carryin Carryin
Provisi Provisio
g g
Amoun Percent Amoun on Percent n
value Amount Amount value
t age (%) t proporti age (%) proporti
on (%) on (%)
Provision for
108,670 80,084, 28,585,
bad debts by 23.32 73.69
,171.06 373.88 797.18
item
Including:
Provision by 108,670 23.32 80,084, 73.69 28,585,
item ,171.06 373.88 797.18
Provision for 359,88 325,61
392,260 32,375, 357,273 31,662,
bad debts by 100.00 8.25 4,682.6 76.68 8.86 1,158.8
,301.93 619.29 ,937.54 778.73
portfolio 4 1
Including:
Aging portfolio 392,260 100.00 32,375, 8.25 359,88 357,273 76.68 31,662, 8.86 325,61
,301.93 619.29 4,682.6 ,937.54 778.73 1,158.8
4 1
392,260 / 32,375, / 359,88 465,944 / 111,747 / 354,19
Total ,301.93 619.29 4,682.6 ,108.60 ,152.61 6,955.9
4 9
Provision for bad debts by item：
□ Applicable √ Not applicable
Provision for bad debts by portfolio：
√ Applicable □ Not applicable
Provision by portfolio: Aging portfolio
Unit: Yuan Currency: RMB
Closing balance
Name
Accounts receivable Provision for bad debts Provision ratio (%)
Within 1 year 341,209,885.17 17,060,494.26 5.00
1-2 years 51,050,416.76 15,315,125.03 30.00
Total 392,260,301.93 32,375,619.29 8.25
Recognition standard and explanation of provision for bad debts made by portfolio
□ Applicable √ Not applicable
If the bad debt provision is made according to the general model of expected credit loss, please refer to
the disclosure of other receivables:
□ Applicable √ Not applicable
(3). Information of bad-debt provision
√ Applicable □ Not applicable
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Unit: Yuan Currency: RMB
Changes in the current period
Opening Withdrawal Charge-off Closing
Category Other
balance Accrual or or balance
changes
write-back write-off
Provision 80,084,373.88 -80,084,373.88
for bad
debts by
item
Provision 31,662,778.73 712,840.56 32,375,619.29
for bad
debts by
portfolio
Total 111,747,152.61 -79,371,533.32 32,375,619.29
Among them, significant amount of bad-debt provision withdrawn or written back in the current period:
□ Applicable √ Not applicable
(4). Accounts receivable actually written off in the current period
□ Applicable √ Not applicable
(5). Accounts receivable of the top five closing balances collected by debtor
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Proportion of total
Closing balance of accounts Closing balance of
Company name
balance receivable at the end bad debt provision
of the period (%)
Huzhou Hapsode Trading Co., Ltd. 104,713,697.43 26.69 5,235,684.87
Zhejiang Meiligu Electronic 93,977,092.72 23.96 4,698,854.64
Commerce Co., Ltd.
Huzhou UZERO Trading Co., Ltd. 76,490,664.08 19.50 15,218,553.61
Hangzhou Proya Commercial 35,481,044.84 9.05 1,774,052.24
Management Co., Ltd.
Huzhou Chuangdai E-commerce 32,548,324.91 8.30 1,627,416.25
Co., Ltd.
Total 343,210,823.98 87.50 28,554,561.61
(6). Accounts receivable derecognized due to transfer of financial assets
□ Applicable √ Not applicable
(7). Amount of assets or liabilities for which accounts receivable have been transferred but
involvement continues in the Company.
□ Applicable √ Not applicable
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Other description:
□ Applicable √ Not applicable
2. Other receivables
List by item
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Interest receivables
Dividends receivable
Other receivables 149,973,641.15 222,452,930.42
Total 149,973,641.15 222,452,930.42
Other description:
□ Applicable √ Not applicable
Interest receivables
(1). Classification of interest receivables
□ Applicable √ Not applicable
(2). Significant overdue interest
□ Applicable √ Not applicable
(3). Provision for bad debts
□ Applicable √ Not applicable
Other description:
□ Applicable √ Not applicable
Dividend receivable
(4). Dividend receivable
□ Applicable √ Not applicable
(5). Significant dividends receivable with an age of more than 1 year
□ Applicable √ Not applicable
(6). Provision for bad debts
□ Applicable √ Not applicable
Other description:
□ Applicable √ Not applicable
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Other receivables
(7). Disclosed by account age
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Account age Book balance at the end of the period
Within 1 year
Including: Subitem within 1 year
Sub-total within 1 year 59,137,700.83
1 to 2 years 31,048,292.24
2 to 3 years 144,118,041.61
Above 3 years 178,855.47
3 to 4 years
4 to 5 years
Above 5 years
Total 234,482,890.15
(8). Classification by nature of payment
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Book balance at the end of the Book balance at the beginning
Nature of payment
period of the period
Inter-bank lending amount 213,945,712.85 269,104,993.77
Security deposits 18,887,006.72 19,187,006.72
Reserve fund 603,500.00 416,500.00
Others 1,046,670.58 802,310.17
Total 234,482,890.15 289,510,810.66
(9). Provision for bad debts
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
First stage Second stage Third stage
Expected credit loss Expected credit loss
Provision for bad Expected credit for the entire for the entire Total
debts loss over the duration (credit duration (credit
next 12 months impairment not impairment has
occurred) occurred)
Balance as at 4,343,549.18 57,973,623.70 4,740,707.36 67,057,880.24
January 1, 2022
Balance as of
January 1, 2022 is
in the current
period
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-Transferred to the -1,552,414.61 1,552,414.61
second stage
-Transferred to the -45,927.74 45,927.74
third stage
-Written-back to
the second stage
-Written-back to
the first stage
Accrual in the 165,750.47 21,893,397.92 -4,607,779.63 17,451,368.76
current period
Written-back in
the current period
Written-off in the
current period
Charge off in the
current period
Other changes
Balance as at June 2,956,885.04 81,373,508.49 178,855.47 84,509,249.00
30, 2022
Explanation of significant changes in the book balance of other receivables with changes in provision for
loss in the current period:
□ Applicable √ Not applicable
The amount of bad debt provision in the current period and the basis for evaluating whether the credit
risk of financial instruments increases significantly:
□ Applicable √ Not applicable
(10). Information of bad-debt provision
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Changes in the current period
Opening Withdrawal Charge-off Closing
Category Other
balance Accrual or or balance
changes
write-back write-off
Provision 67,057,880.24 17,451,368.76 84,509,249.00
for bad
debts by
portfolio
Total 67,057,880.24 17,451,368.76 84,509,249.00
Among them, significant amount of bad-debt provision written back or withdrawn in the current period:
□ Applicable √ Not applicable
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(11). Other receivables actually written off in the current period
□ Applicable √ Not applicable
Explanation on write-off of other receivables:
□ Applicable √ Not applicable
(12). Other receivables of the top five closing balances collected by debtor
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
As a proportion of
Provision for bad
Nature of Closing total closing
Company name Account age debts
payment balance balance in other
Closing balance
receivables (%)
Hong Kong Inter-bank 147,363,554.79 [Note 1] 62.85 67,515,988.00
Xinghuo lending
Industry amount
Limited
BOYA (Hong Inter-bank 33,640,320.00 Within 1 14.35 1,682,016.00
Kong) lending year
Investment amount
Management
Co., Limited
Ningbo Inter-bank 17,223,566.72 [Note 2] 7.35 6,721,006.67
TIMAGE lending
Cosmetics Co., amount
Ltd.
Wuxing Security 13,193,392.00 1-2 years 5.63 3,958,017.60
District Daixi deposits
Town People's
Government of
Huzhou City
Hangzhou Inter-bank 5,000,000.00 Within 1 2.13 250,000.00
Xiake Bar lending year
Catering amount
Management
Co., Ltd.
Total / 216,420,833.51 / 92.31 80,127,028.27
[Note 1] RMB10,925,527.79 in 1 year; RMB6,246,509.44 in 1-2 years; RMB130,191,517.56 in 2-3
years
[Note 2] RMB1,147,600.03 in 1 year; RMB6,246,509.44 in 1-2 years; RMB9,204,183.33 in 2-3 years
(13). Receivables involving government subsidies
□ Applicable √ Not applicable
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(14). Other receivables derecognized due to transfer of financial assets
□ Applicable √ Not applicable
(15). The amount of assets and liabilities formed by transferring other receivables and continuing
to be involved
□ Applicable √ Not applicable
Other description:
□ Applicable √ Not applicable
3. Long-term equity investments
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Closing balance Opening balance
Provision
Item Book Carrying Provision for Carrying
for Book balance
balance amount impairment amount
impairment
Investment 275,269,01 42,500,000. 232,769,013.03 229,119,013.03 42,500,000.00 186,619,013.03
s in 3.03 00
subsidiaries
Investment 188,766,05 40,751,084. 148,014,967.65 178,054,996.05 14,670,468.59 163,384,527.46
s in 2.30 65
associates
and joint
ventures
464,035,06 83,251,084. 380,783,980.68 407,174,009.08 57,170,468.59 350,003,540.49
Total
5.33 65
(1) Investments in subsidiaries
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Provision
Decreas for
Increase in Closing balance
Opening e in the Closing impairment
Invested entity the current of impairment
balance current balance in the
period provision
period current
period
Hangzhou 30,772,988 30,772,988.3
Proya Trade .32 2
Co., Ltd.
Hanna 2,094,048. 2,094,048.00
Cosmetics Co., 00
Ltd.
Zhejiang 14,956,877 14,956,877.1
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Meiligu .14 4
Electronic
Commerce
Co., Ltd.
Yueqing Laiya 1,000,000. 1,000,000.00
Trading Co., 00
Ltd.
Hapsode 42,500,000 42,500,000.0 42,500,000.00
(Hangzhou) .00 0
Cosmetics Co.,
Ltd.
Mijing Siyu 18,000,000 18,000,000.0
(Hangzhou) .00 0
Cosmetics Co.,
Ltd.
Huzhou 5,460,276. 5,460,276.70
UZERO 70
Trading Co.,
Ltd.
Huzhou Niuke 3,500,000. 3,500,000.00
Technology 00
Co., Ltd.
Hangzhou 5,000,000. 5,000,000.00
Proya 00
Commercial
Management
Co., Ltd.
Huzhou 20,308,163 20,308,163.0
Younimi .00 0
Cosmetics Co.,
Ltd.
Shanghai 5,400,000. 5,400,000.00
Zhongwen 00
Electronic
Commerce
Co., Ltd.
Korea 5,046,455. 5,046,455.61
Younimi 61
Cosmetics Co.,
Ltd.
Hong Kong 24,736,491 24,736,491.0
Keshi Trading .00 0
Limited
Hong Kong 10,185,924 10,185,924.0
Xinghuo .00 0
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Industry
Limited
Ningbo 15,902,200 45,000,000. 60,902,200.0
TIMAGE .00 00 0
Cosmetics Co.,
Ltd.
Ningbo Keshi 520,000.00 520,000.00
Trading
Limited
Zhejiang 10,181,983 10,181,983.2
Biyouti .21 1
Cosmetics Co.,
Ltd.
Ningbo Proya 5,353,606. 5,353,606.05
Enterprise 05
Consulting
Management
Co., Ltd.
Hangzhou 1,000,000. 1,000,000.00
Yizhuo Culture 00
Media Co.,
Ltd.
Hangzhou 2,400,000. 500,000.00 2,900,000.00
Oumisi 00
Trading Co.,
Ltd.
Guangzhou 1,000,000. 1,000,000.00
Qianxi 00
Network
Technology
Co., Ltd
Zhejiang 1,100,000. 550,000.00 1,650,000.00
Qingya Culture 00
Art
Communicatio
n Co., Ltd
Huzhou Poyun 1,200,000. 1,200,000.00
Electronic 00
Commerce
Co., Ltd.
Hangzhou 500,000.00 500,000.00
Weiluoke
Cosmetics Co.,
Ltd.
Xuzhou Proya 500,000.00 500,000.00
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Information
Technology
Co., Ltd.
Singuladerm 500,000.00 500,000.00
(Hangzhou)
Cosmetics Co.,
Ltd.
Proya (Hainan) 100,000.00 100,000.00
Cosmetics Co.,
Ltd.
229,119,01 46,150,000. 275,269,013. 42,500,000.00
Total
3.03 00 03
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(2) Investments in associates and joint ventures
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Changes in the current period
Recognized Other
Declared Closing
Addition investment comprehen
Investment Opening Investme Other payment of Provision Closing balance of
al gain and sive
Unit balance nt changes cash for Others balance impairmen
investme loss under income
decrease in equity dividends impairment t provision
nt equity adjustment
or profits
method s
I. Joint Venture
Huzhou Panrui 3,074,758. -5,814.02 3,068,944.
Industry 68 66
Investment
Partnership
(Limited
Partnership)
Subtotal 3,074,758. -5,814.02 3,068,944.
68 66
II. Affiliated entities
Xiongke 2,789,460. -111,660.6 2,677,799.
Culture Media 66 7 99
(Hangzhou)
Co., Ltd.
Jiaxing 72,681,73 14,185,4 -2,103,426. 84,763,734
Woyong 3.38 27.27 11 .54
Investment
Partnership
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(Limited
Partnership)
Zhuhai 79,413,88 -982,064.3 26,080,616 52,351,201 40,751,08
Healthlong 2.37 2 .06 .99 4.65
Biotechnology
Co., Ltd.
Beijing Xiushi 5,424,692. -271,405.9 5,153,286.
Culture 37 0 47
Development
Co., Ltd.
Subtotal 160,309,7 14,185,4 -3,468,557. 26,080,616 144,946,02 40,751,08
68.78 27.27 00 .06 2.99 4.65
163,384,5 14,185,4 -3,474,371. 26,080,616 148,014,96 40,751,08
Total
27.46 27.27 02 .06 7.65 4.65
Other description:
□ Applicable √ Not applicable
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4. Operating income and operating cost
(1). Information of operating income and operating cost
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount incurred in the current Amount incurred in the previous
Item period period
Revenue Cost Revenue Cost
Main business 1,338,252,463.90 608,471,644.94 879,711,296.91 450,100,842.12
Other business 365,701.44 7,891,133.10 17,039,716.68 6,487,404.50
Total 1,338,618,165.34 616,362,778.04 896,751,013.59 456,588,246.62
(2). Information of income generated by the contract
□ Applicable √ Not applicable
(3). Explanation on performance obligations
□ Applicable √ Not applicable
(4). Explanation on remaining performance obligations allocated
□ Applicable √ Not applicable
Other description:
Income breakdown by goods or service transfer time
Amount for the same
Amount for the
Item period in the
current period
previous year
Income recognized at a certain point 1,338,554,957.83 896,634,975.79
Income recognized within a period of time 63,207.51 116,037.80
Subtotal 1,338,618,165.34 896,751,013.59
5. Investment income
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount incurred in the Amount incurred in the
Item
current period previous period
Long-term equity investment income
calculated by cost method
Return on long-term equity investments -3,474,371.02 -2,511,473.64
measured by the equity method
Investment income from disposal of
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long-term equity investment
Investment income of financial assets
held for trading during the holding
period
Dividend income from investment in
other equity instruments during the
holding period
Interest income from debt investment
during the holding period
Interest income from other debt
investments during the holding period
Investment income from disposal of
tradable financial asset
Investment income from disposal of
investment in other equity instruments
Investment income from disposal of
debt investment
Investment income from disposal of
other debt investments
Gains of debt restructuring
Total -3,474,371.02 -2,511,473.64
Other description:
None
6. Others
□ Applicable√ Not applicable
XVIII. Supplementary Information
1. Statement of non-recurring gains and losses for the current period
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Amount Notes
Gain or loss on disposal of non-current assets
Tax refund and reduction with ultra vires approval or
without formal approval documents
Government subsidies included in the current profit and
loss (except those that are closely related to the
20,440,098.37
enterprise's business and enjoy in accordance with the
national unified standard quota or quantitative amount)
Payment for possession of fund acquired from
non-financial businesses included in the current profit
and loss
Gains arising from investment costs for acquisition of
subsidiaries, associates and joint ventures less than the
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fair values of attributable identifiable net assets of the
invested entity at the time of acquisition
Gain or loss from exchange of non-monetary assets
Gain and loss on authorizing others to invest or manage
assets
Provisions for various asset impairments due to force
majeure factors such as natural disasters
Gain and loss on restructuring of debts
Corporate restructuring expenses, such as re-settlement
expenses and integration cost
Profit and loss in excess of the fair value generated
from obviously unfairly priced transactions
Net profit and loss of subsidiaries generated from the
merger of companies under common control from the
beginning of the period to the date of merger
Profit and loss arising from contingent events unrelated
to the Company's normal operations
Profit and loss from changes in fair value arising from
financial assets held for trading, derivative financial
assets, financial liabilities held for trading and
derivative financial liabilities, and investment gain
from disposal of financial assets held for trading,
derivative financial assets, financial liabilities held for
trading, derivative financial liabilities and other debt
investments, except for effective hedging related to the
Company's normal operations
Reversal of provision for impairment of receivables and
contract assets individually tested for impairment
Profit or loss from entrusted loans
Profit and loss arising from changes in the fair value of
investment property subsequently measured with the
fair value model
Impact of one-time adjustments on the current profit
and loss according to the requirements of tax and
accounting laws and regulations on the current profit
and loss
Custody fee income from entrusted operations
Other non-operating revenue and non-operating
281,474.51
expenses other than the above items
Other profit or loss items under the definition of
non-recurring profit or loss
Less: tax impact 3,609,209.54
Effect of minority shareholders' equity (after tax) 1,070,266.33
Total 16,042,097.01
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Semi-Annual Report 2022
The reasons should be explained for the non-recurring gains and losses items defined by the Company
according to the definition of Explanatory Announcement on Information Disclosure for Companies
Offering Their Securities to the Public No.1--Non-recurring Gains and Losses, and the non-recurring
profit and loss items listed in Explanatory Announcement on Information Disclosure for Companies
Offering Their Securities to the Public No.1--Non-recurring Gains and Losses as recurring gains and
losses items.
□ Applicable √ Not applicable
2. Net assets income rate and earnings per share
√ Applicable □ Not applicable
Earnings per share
Profit during the Reporting Weighted average
Basic earnings per Diluted earnings per
Period ROE (%)
share share
Net profit attributable to 10.10 1.06 1.04
ordinary shareholders of the
Company
Net profit attributable to 9.56 1.00 0.99
ordinary shareholders of the
Company after deducting
non-recurring gains and losses
3. Differences in Accounting Data under Chinese and International Accounting Standards
□ Applicable √ Not applicable
4. Others
□ Applicable√ Not applicable
Chairman: HOU Juncheng
Date of submission approved by the Board of Directors: August 24, 2022
Revision information
□ Applicable √ Not applicable
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