Semi-Annual Report 2023
Stock Code: 603605 Stock Abbreviation: Proya
Bond Code: 113634 Bond Abbreviation: Proya convertible bond
Proya Cosmetics Co., Ltd.
Semi-Annual Report 2023
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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
Based on the total share capital as at the record date on which equity distribution is implemented, the
Company proposes to distribute to all shareholders registered a cash dividend of RMB3.80 (tax
inclusive) per 10 shares. Based on the total share capital of 396,928,515 shares on June 30, 2023, it is
estimated that the cash dividend to be distributed will amount to RMB150,832,835.70 (tax inclusive).
No the capital reserve will be converted into share capital and no bonus shares will be given.
In case of a change in the Company’s total share capital due to the conversion of convertible bonds
before the record date for equity distribution, the Company maintains the said distribution ratios and yet
adjusts the total distribution and conversion amounts.
VI. Risk declaration for the forward-looking statements
√ Applicable □ Not applicable
The Report contains forward-looking statements that 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 grantee 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
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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 ................................................................................................................................... 5
Section II Company Profile and Key Financial Indicators ......................................................................... 5
Section III Management Discussion and Analysis ...................................................................................... 9
Section IV Corporate Governance ............................................................................................................ 24
Section V Environmental and Social Responsibility ................................................................................ 26
Section VI Important Matters.................................................................................................................... 28
Section VII Shareholders and Changes in Shares ..................................................................................... 53
Section VIII Information on Preference Shares ........................................................................................ 59
Section IX Information on Bonds ............................................................................................................. 59
Section X Financial Report ....................................................................................................................... 64
Financial statements signed and sealed by the legal representative, the CFO of the
Documents
Company, and the head of accounting department
Available
Original copies of all documents and announcements of the Company publicly disclosed in
for
newspapers designated by China Securities Regulatory Commission during the Reporting
Inspection
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
refers to Proya Cosmetics Co., Ltd.
the Company
CSRC refers to China Securities Regulatory Commission
SSE refers to Shanghai Stock Exchange
Articles of Association of Proya Cosmetics Co.,
Articles of Association refers to
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 珀莱雅化妆品股份有限公司
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 City,
Zhejiang Province 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 For details, please see Announcement on Revision of the Articles of
Company’s registered address 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
Company website http://www.proya-group.com
Email proyazq@proya.com
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Index for query of changes during
Not applicable
the Reporting Period
IV. Changes in Information Disclosure and Places for Inspection
Name of designated newspapers for
Shanghai Securities News, Securities Times
information disclosure by the Company
Website for the publication of the
http://www.sse.com.cn
Semi-Annual Report
Place for inspection of the Semi-Annual Board of Director’s Office, Proya Building, No.588 Xixi
Report of the Company Road, Xihu District, Hangzhou City, Zhejiang Province
Index for query of changes during the
Not applicable
Reporting Period
V. Stock Overview
Stock abbreviation
Stock class Stock exchange Stock abbreviation Stock code
prior to change
A share Shanghai Stock Exchange Proya 603605 None
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
In the Reporting
Same period of Year-on-year
Key accounting data Period
prior year change (%)
(Jan - Jun)
Operating revenue 3,626,991,878.22 2,625,943,244.29 38.12
Net profit attributable to shareholders of
499,493,997.71 296,939,515.54 68.21
the listed company
Net profit attributable to shareholders of
the listed company, after deducting 478,891,852.27 280,897,418.53 70.49
non-recurring gains or losses
Net cash flows from operating activities 1,181,268,072.03 713,782,130.38 65.49
End of the Year-on-year
End of prior year
Reporting Period change (%)
Net assets attributable to shareholders of
3,830,453,154.15 3,524,488,659.96 8.68
the listed company
Total assets 6,669,650,520.45 5,778,071,824.19 15.43
(II) Key financial indicators
In the Reporting Same period of Year-on-year
Key financial indicators
Period prior year change (%)
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(Jan - Jun)
Basic EPS (RMB/share) 1.25 1.06 17.92
Diluted EPS (RMB/share) 1.24 1.04 19.23
Basic EPS after deducting non-recurring
1.20 1.00 20.00
gains or losses (RMB/share)
Up by 3.19
Weighted average ROE (%) 13.29 10.10
percentage points
Weighted average ROE after deducting Up by 3.18
12.74 9.56
non-recurring gains or losses (%) percentage points
Notes to key accounting data and financial indicators
□ Applicable √ Not applicable
VIII. Differences in Accounting Data under Chinese and International Accounting Standards
□ Applicable √ Not applicable
IX. Items and Amounts of Non-recurring Gains and Losses
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Non-recurring gains and losses item Amount Notes (if applicable)
Gains or losses on disposal of non-current
-217,694.21
assets
Tax refund or reduction approved beyond
authority or without official approval or on an
occasional basis
Government grants as included in the gains or
losses of current period (note: Government
grants that are closely related to the normal
business, in compliance with the relevant 34,639,076.23
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 gains and losses
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
invested entity at the time of acquisition
Gains and losses on non-monetary assets
exchange
Gains and losses on authorizing others to
invest or manage assets
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Provisions for various asset impairments due
to force majeure factors such as natural
disasters
Gains and losses on restructuring of debts
Corporate restructuring expenses, such as
re-settlement expenses and integration cost
Gains and losses in excess of the fair value
generated from obviously unfairly priced
transactions
Net gains and losses of subsidiaries generated
from the merger of companies under common
control from the beginning of the period to
the date of merger
Gains and losses arising from contingent
events unrelated to the Company’s normal
operations
Gains and losses 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 421,794.92
tested for impairment
Gains or losses from entrusted loans
Gains and losses 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
gains and losses according to the
requirements of tax and accounting laws and
regulations on the current gains and losses
Custody fee income from entrusted operations
Other non-operating revenue and expenses
-873,327.35
other than the above items
Other gains and losses items under the
definition of non-recurring gains and losses
Less: Income tax impact 7,638,568.45
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Impact of minority shareholders’ equity
5,729,135.70
(after tax)
Total 20,602,145.44
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
gains and losses 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
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 the R&D, production and sales of cosmetic products. Main brands owned by the Company
include Proya, TIMAGE, Off&Relax, Hapsode, CORRECTORS, INSBAHA, UZERO and ANYA. The
Company’s own brands cover fields such as popular exquisite skincare, make-up, 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 RMB200-500, 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 RMB50-150, and mainly sold online.
2. Make-up
TIMAGE, a professional make-up brand with a new Chinese style, is generally priced between
RMB150-300, and only sold online.
3. Body&hair
Off&Relax, developed and produced in Japan, focuses on scalp health. 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 between RMB260-600, and 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.
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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
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 issued by the CSRC,
the Company falls under chemical raw material and chemical product manufacturing (classification code:
C26); according to Industrial Classifications for National Economic Activities (GB/T 4754-2017), the
Company falls under the category of manufacturing of daily chemical products (C268), as well as
manufacture of cosmetics (C2682).
According to the National Bureau of Statistics, from January to June 2023, the total retail sales of
consumer goods reached RMB22,758.8 billion, a YOY increase of 8.2%; the total retail sales of
cosmetics reached RMB207.1 billion, a YOY increase of 8.6% (the retail sales value from the businesses
above a certain size).
II. Analysis of Core Competitiveness during the Reporting Period
√ Applicable □ Not applicable
In the face of rapid changes in the external market environment, the Company was firmly committed to
the leadership and implementation of the 6*N Strategy. We established a precise operation management
system highlighting “R&D, products, content, operations”, and built a self-driven organization
highlighting “culture-strategy-mechanism-talent”.
We continued to make our “hero products” more competitive, and developed and improved the portfolio
of “hero products” based on our keen insight into consumer needs. This was possible because of our
strong R&D strength and our ability to rapidly respond to internal organizational requirements.
A self-driven agile organization was built to serve the second-brand product pipeline and the brands at
the incubation stage. By building our own MCN team and content marketing team, we strengthened the
internal circular ecology and fostered the external ecosystem of Proya brand.
III. Business Discussion and Analysis
(I) Finance analysis
1. Year-on-year growth in operating revenue
Operating revenue RMB3.627 billion, a YOY increase of 38.12%
Including: primary operating revenue of RMB3.619 billion, a YOY increase of 38.36%
Other operating revenue of RMB8 million
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Primary operating revenue:
(1) Breakdown by channel
Change
Amount in H1 Change in Change in Change in Proportion
Proportion Proportion Proportion
By channel (RMB100 2023 2022 YOY 2021 YOY 2020 YOY of H1
of 2022 of 2021 of 2020
million) YOY (%) (%) (%) 2023 (%)
(%) (%) (%)
(%)
Direct sales 26.59 52.36 59.79 76.16 79.63 73.49 70.40 60.66 42.45
Online Distribution 6.71 19.04 16.79 8.56 34.36 18.54 20.58 24.27 27.56
Subtotal 33.30 44.23 47.50 49.54 58.59 92.03 90.98 84.93 70.01
Cosmetics
2.41 5.64 -11.96 -40.52 -19.28 6.66 6.96 10.88 22.56
stores
Offline -39.15 1.31
Others 0.48 -32.32 -30.50 -32.81 2.06 4.19 7.43
Subtotal 2.89 -5.81 -17.62 -38.03 -23.12 7.97 9.02 15.07 29.99
Total 36.19 38.36 37.69 23.28 20.26 100.00 100.00 100.00 100.00
Note: The percentage of sales from each channel is the proportion of its sales in primary operating
revenue.
(2) Breakdown by brand
Amount Change in Change Change in Change in Proportion Proportion Proportion
Proportion
By brand (RMB100 H1 2023 in 2022 2021 2020 of H1 of 2022 of 2021
of 2020 (%)
million) YOY (%) YOY (%) YOY (%) YOY (%) 2023 (%) (%) (%)
Proya 28.92 35.86 37.46 28.25 12.43 79.87 82.74 82.87 79.66
TIMAGE 4.14 78.65 132.04 103.48 - 11.45 8.99 5.33 -
Own OR 0.97 94.17 509.93 - - 2.69 1.98 - -
brands Hapsode 1.32 64.80 188.27 - - 3.64 2.94 - -
Other brands 0.84 10.71 -60.11 -5.96 36.91 2.35 2.57 8.85 11.59
Subtotal 36.19 41.02 40.74 26.63 19.11 100.00 99.22 97.05 94.48
Agency Cross-border
0.00 -100.00 -63.01 -34.04 44.09 0.00 0.78 2.95 5.52
brands agency brands
Total 36.19 38.36 37.69 23.28 20.26 100.00 100.00 100.00 100.00
Note: The percentage of sales of each brand is the proportion of its sales in primary operating revenue.
The sales of OR and Hapsode were incorporated into other brands for 2021 and prior years, but they
have been shown separately since 2022.
(3) Breakdown by category
Amount Change in Change in Change in Change in Proportion Proportion Proportion Proportion
By category (RMB100 H1 2023 2022 YOY 2021 YOY 2020 YOY of H1 2023 of 2022 of 2021 of 2020
million) YOY (%) (%) (%) (%) (%) (%) (%) (%)
Skincare
(including 30.56 38.06 38.56 22.70 11.38 84.44 86.20 86.10 86.50
cleansing)
Make-up 4.66 32.30 21.70 32.97 181.91 12.87 11.82 13.38 12.41
Body&hair 0.97 94.17 509.93 - - 2.69 1.98 - -
Others 0.00 0.00 -100.00 -41.05 0.47 0.00 0.00 0.52 1.09
Total 36.19 38.36 37.69 23.28 20.26 100.00 100.00 100.00 100.00
Note: The sales of body&hair products were incorporated into skincare (including cleansing) for 2021
and prior years, but they have been shown separately since 2022.
2. Year-on-year growth in net profit
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The net profit attributable to shareholders of the listed company amounted to RMB499 million, a YOY
increase of 68.21%
The net profit attributable to shareholders of the listed company after deducting non-recurring profits or
losses amounted to RMB479 million, a YOY increase of 70.49%
Indicator H1 2023 2022 2021 2020 Notes
Mainly due to the increase in
gross profit margin and the
1. Net profit margin 14.56% 13.02% 12.02% 12.04%
decrease in provision for
asset impairment loss.
Primary reasons:
1. Increased percentage of
2. Gross profit margin 70.51% 69.70% 66.46% 63.55%
online direct sales;
2. Hero product strategy.
3. Sales expense ratio 43.56% 43.63% 42.98% 39.90%
Including: image
37.92% 37.90% 36.12% 32.68%
promotion fee rate
4. Administrative
5.30% 5.13% 5.12% 5.44%
expense ratio
Primary reasons:
1. R&D expenses increased
by 49.87% or RMB30.45
million YOY;
2. The parent company’s
5. R&D expense ratio 2.52% 2.00% 1.65% 1.92%
R&D expense ratio for
January to June 2023 was
5.10% (compared with
4.69% for the same period
last year).
Primary reasons:
1. Operating revenue for
January to June 2023
6. Accounts receivable
74.05 53.04 21.88 15.53 recorded a YOY increase;
turnover rate (times)
2. Decline of the average
balance of accounts
receivable.
7. Accounts receivable
4.86 6.79 16.45 23.18
turnover days (days)
8. Inventory turnover
3.43 3.46 3.39 3.50
rate (times)
9. Inventory turnover
105.08 103.91 106.19 102.86
days (days)
(II) Discussion and analysis of business conditions
1. New product strategy
Proya:
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During the Reporting Period, we deepened the “hero product strategy” by focusing on three family series
products, namely Elastic Brightening Series, Deep Ocean Energy Series and Advanced Original Repair
Series. For the “Elastic Brightening Series”, the core hero product, Elastic Brightening Energy Essence,
has been upgraded to version 3.0. The establishment of exclusive ingredient barriers has significantly
enhanced the product’s efficacy and user experience. We have also improved its sustainability, thereby
increasing its irreplaceability among young consumers. The Elastic Brightening Series make-up water
and lotion cream have been upgraded and adjusted to better meet the efficacy needs of “young skin”,
which have continuously reinforced the customer mindset of the Elastic Brightening Series. Regarding
the “Deep Ocean Energy Series”, the Deep Ocean Energy Facial Mask and Deep Ocean Energy Firming
Eye Cream have both launched 2.0 versions. The Deep Ocean Energy Moisture Lotion has also been
upgraded to provide a more enriched product experience, catering to consumers’ diverse needs from
multiple dimensions. In addition, the “Recycling Series” featuring moisturizing effects and the “Sun
Around Skin Care Mineral Sunscreen Serum” single product for sensitive skin were launched.
In the first half of 2023, the Proya brand ranked first in the essence category, second in the face cream
category, second in the face mask category, and fifth in the eye cream category on the Tmall platform.
TIMAGE:
During the Reporting Period, TIMAGE constantly broadened market horizons and improved category
arrangement. While maintaining a leading position in core hero products such as highlighters,
contouring, concealers, primers, and setting sprays within the existing advantageous product categories,
we continuously increased market share.
In March, we introduced the brand new “Vigorous and Flowing Jade Series” and launched three new
products: the “Tri-color Blush Palette”, the “All-in-one Brow Palette”, and the “Matte Lipstick”. Among
them, the flagship product “Tri-color Blush Palette” has shown remarkable performance, ranking second
in the blush category on Tmall in the first half of 2023. During the “618” shopping festival, we launched
the all-new “Original Radiant Cushion Foundation” and upgraded the “Matte Glow Pressed Powder”,
both of which received positive market feedback.
Off&Relax (OR):
During the Reporting Period, we continued to increase the market penetration of our star hero products,
“OR Spa Shampoo Refresh” and “OR Spa Hair Mask”. During the “618” shopping festival, the shampoo
ranked second on Tmall’s best-selling list for international imported shampoos, while the hair masque
ranked first on the best-selling list for hair masques.
We have continuously nurtured a consumer mindset that recognizes us as an “expert in scalp health”.
We launched a new pre-shampoo category called “Purifying Scalp Cleanser” to meet the needs of
middle-and high-end consumers who prioritize a superior cleansing experience for their scalp. During
the “618” shopping festival, our “Purifying Scalp Cleanser” ranked second in the pre-shampoo category
on Tmall.
Hapsode:
During the Reporting Period, we focused on building our product categories and enhancing consumer
awareness that recognizes Hapsode as an “expert in oily skin care”. We introduced the upgraded
products: Cleansing Honey 2.0, Multi-Acid Clay Mask 2.0 and Olive Oil Face Mask 2.0. We also
re-launched three core products of our oil-control family: Oil Control Essence 2.0, Pore Refining Serum
and Oil Control Loose Powder. These improvements aim to enhance the overall skincare routine for oily
skin.
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2. New marketing strategy
Proya:
During the Reporting Period, the Proya brand has centered its brand strategy around two brand keywords:
“youthfulness” and “technological prowess”. Embracing the “spirit of exploration”, the brand has
addressed the multifaceted factors behind specific skin concerns. The following brand marketing
initiatives have been undertaken:
(1) “Thank You for Participation” in January. In this event, we expressed the most important “thank you”
to our users through short films posted in user stories and offline user story exhibitions. We expressed
our gratitude to them for their being with us throughout 2022.
(2) “Just the Right Warmth of Love” on Valentine’s Day in February. In this event, we joined hands
with Jingdezhen Royal Kiln Museum to create a customized collection of “Royal Kiln Duo Cups”.
These cups are designed to deliver the perfect temperature to every perfect couple out there, and to
anyone who dares to try something new.
(3) “Gender is not the borderline, prejudice is” on Women’s Day in March. In this event, we created
educational picture books focusing on gender equality, produced thematic short films adapted from real
stories, and collaborated with law firms to launch the “Proya Public Welfare Labor Legal Consultation
Service”. Through concrete efforts, we not only encouraged mention and discussion of “gender equality”
on Women's Day, but helped push for the issues to be considered on all other days of the year.
(4) On Mother’s Day in May, we showed care for mothers and acknowledged both the visible physical
labor and the invisible mental labor they undertake in as they support their families. We mentioned that
“Moms can take care of the family, but every family member can do the same”. Through the short film
“More Than Just Moms”, we called on every family member to not only recognize the goodness of
mothers but also collectively take on family responsibilities.
(5) “Scientific Formulas, Scientific Choices for the Skin” in June. In this event, we organized 7 “Day
Coffee and Night Alcohol Pop-Up stores” in 6 cities around China. The purpose of these pop-up stores
was to communicate the brand’s concept of “scientific formulas” to consumers. Through offline
interactions between the stores and consumers, participants had the opportunity for in-depth experience
of the products and technological concepts.
TIMAGE:
During the Reporting Period, TIMAGE continued to present the concept of “Chinese make-up, original
beauty” with craftsmanship and professionalism. TIMAGE carried out the following brand marketing
events:
(1) Newly launched the “Vigorous and Flowing Jade” series colorful brilliance products in March. In
this event, we defined Chinese aesthetics. The concept advertisement of the new “Vigorous and Flowing
Jade” series was unveiled. Instructor TANG Yi hosted a master class, collaborating with beauty bloggers
to create the “Vigorous and Flowing Jade Make-up” and sparking a trend of imitation make-up. An
offline Vigorous and Flowing Jade press conference was held in collaboration with celebrities GAO Ye
and MA Sichun appearing in person to show their support.
(2) “Beyond Love” in May. In this event, we joined hands with three couples who have been together for
a long time to shoot a short film that explores how to draw energy from the inherent beauty of life in our
fast-paced era, and how to better love our partners, ourselves, and life. We also launched the TIMAGE
520 gift box, which enabled the brand to convey emotions and provide special treatment, expanding the
brand’s value.
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Off&Relax (OR):
During the Reporting Period, OR conducted a series of brand activities centered around the brand
philosophy of “Purifying from the skin to the body and mind”. These activities encompassed various
aspects such as physical and mental well-being, and embracing nature. Relevant events are as follows:
(1) In January, we joined hands with the “Cao Sichuan Ride-Hailing” app platform to launch the
“Switching to off mode on the way home” event, allowing everyone to find release from the fatigue of
the year and taking a relaxing trip back home.
(2) In March, we introduced a limited edition Sakura Season package, and collaborated with young
illustrator SUN Yijia to create it. Through the “Chasing Spring Blossoms, let’s set off immediately”
campaign, we invited everyone to immerse themselves in nature and pursue the essence of spring.
(3) In April, in celebration of Earth Day, we launched the “Off&Relax recycling program”. For this
project, we collaborated with key opinion leaders (KOLs) and ordinary individuals to unlock the
“second life” of empty bottles and transform them into a meaningful part of daily life through creative
endeavors. We also advocated for the purchase of refillable products to reduce the generation of empty
bottles.
(4) In June, during the “618” shopping festival, we jointly launched the “Guide for Life Metabolism”
campaign, advocating for busy urban people to instantly let their troubles go and reclaim their lives. In
addition, we collaborated to launch the OffNight bar, a “life metabolism” book list, and sound
meditation classes to provide everyone with various ways to “let it go”.
3. New channel strategy
Proya:
Online:
(1) Tmall flagship store
During the Reporting Period, we continued to consolidate the “hero product” portfolio strategy and
develop star hero products. We strengthened the category penetration of the Deep Ocean Energy Cream
and Elastic Brightening Face Masks, solidified the position of the Elastic Brightening Essence 3.0 as a
super hero product, and further enhanced the penetration rate of high-value customers. We reduced costs
and improved efficiency, optimized the advertising structure, and deepened collaboration between
on-site and off-site audiences. We continued to optimize the product structure, focused on expanding our
customer base, increased customer retention among existing customers, and significantly improved
customer satisfaction with customer service and logistics.
During the “618” shopping festival in 2023, the gross merchandise volume (GMV) of Proya’s Tmall
flagship store ranked fourth on Tmall Beauty, and ranked first among Chinese products. In the first half
of 2023, the GMV of Proya’s Tmall flagship store ranked fourth on Tmall Beauty, and ranked first
among Chinese products.
(2) TikTok
During the Reporting Period, we strengthened the comprehensive operations of TikTok, optimized the
three major series of portfolio accounts (Elastic Brightening Series, Deep Ocean Energy Series,
Advanced Original Repair Series), and increased the proportion of product cards. We enhanced the
refined operation of the platform, upgraded the product structure, and improved the conversion rate of
influencers and product recommendations. We also promoted the increase in the number of members
and raised the average customer spending.
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During the “618” shopping festival in 2023, the GMV of Proya ranked sixth on TikTok Beauty, and
ranked first among Chinese products. In the first half of 2023, the GMV of Proya ranked third on
TikTok Beauty, and ranked first among Chinese products.
(3) JD
During the Reporting Period, we steadily advanced our strategy of focusing on key hero products,
continuously and efficiently increased our market share, and enhanced brand visibility. We improved
our product structure, with a focus on star hero products, and improved the ranking of our core product
categories. We valued the refined operation of our target audience, optimized our promotion methods,
and improved the effectiveness of our promotions. We optimized our user operation system, efficiently
attracted new customers, and increased customer retention rate among existing customers.
During “38” activity and the “618” shopping festival in 2023, the GMV of Proya ranked first among
Chinese products on JD Beauty; In the first half of 2023, the GMV of Proya ranked seventh on JD
Beauty, and ranked first among Chinese products.
Offline:
(1) Cosmetics store channels: Leveraging the strength of the Proya brand, we expanded cooperation
with new multi-brand stores. During holidays such as Women’s Day (March 8) and the International
Labor Day (May 1), we enhanced the retail management of store activities. In addition, the launch of our
new anti-aging star product, the Capture Totale Series, has helped retail stores achieve an increase in
average transaction value.
(2) Department stores channel: We further invested in the construction of counters in department
stores, and simultaneously promoted direct cooperation with multiple retail systems nationwide. We also
enhanced online and offline integration, maintained the brand’s “Science-based Formula” theme, and
conducted offline pop-up activities of “Day Coffee and Night Alcohol Pop-Up stores” in multiple cities
and locations.
4. New organizational strategy
(1) Organization: We continued to optimize the brand planning strategy by establishing a collaborative
model between product, delivery middle office and agile front-end processes. We deepened the
application of digital technology, and built a flexible and efficient organizational optimization
mechanism through platform and digitization empowerment.
(2) Talent: We promoted the talent supply chain mechanism for young and international talent based on
business needs, and increased the introduction of R&D, design and brand development talent. By taking
an approach that encourages learning through practice, and which combines training with application,
we rapidly identified promising young talent to build teams that are aligned with the company values,
vibrant, highly competitive, and self-driven. Through dual-channel management, we enhanced talent
density, promoted talent development and built an olive-shaped talent pipeline.
(3) System: We continued to deepen 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 (monthly, 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 that
includes company, divisional and departmental levels, to work on the end-to-end main value chain
process development and internal control projects and continue to consolidate organizational
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capabilities.
5. New R&D strategy
During the Reporting Period, the Company continued to advance the establishment of the International
Academy of Sciences, focusing on researching skin texture, design of active ingredients, and efficacy
verification. The R&D Innovation Center maintained its dedication to the research and development of
skincare and new cosmetic products. Currently, the Longwu R&D Center in Hangzhou and Shanghai
R&D Center are under construction, and preparation is underway for the Japan R&D Center.
(1) Patents: During the Reporting Period, we have filed 5 new national invention patents, 2 utility
model patents, and 11 design patents, totaling 18 new patent applications. Additionally, we have been
granted 4 national invention patents, 5 utility model patents, and 8 design patents, totaling 17 newly
acquired patents. As of the end of the Reporting Period, the Company owned 111 nationally authorized
invention patents, 24 utility model patents, and 99 appearance patents, totaling 234 patents.
(2) Standard release: During the Reporting Period, as a drafter, we participated in the release of 2
national standards: “Validation criteria for analytical results of cosmetics using chromatographic
techniques” GB/T 42462-2023, and “Determination of dichlorobenzyl alcohol and chlorophensin in
cosmetics - High performance liquid chromatography” GB/T 42423-2023. Additionally, we have also
participated in the release of 2 group standards: “Efficacy Evaluation Method for Facial Pore-Tightening
Cosmetics” T/ZHCA023-2023, and “Whitening Moisturizing Cream” T/ZZB 0948-2023. As of the end
of the Reporting Period, the Company had led or participated in the development of 16 national
standards, 3 industry standards, and 18 group standards.
(3) Awards and achievements: During the Reporting Period, the Company received several awards at
the China Fragrance, Flavor and Cosmetics Technology Conference, including “Outstanding R&D Team
in the Cosmetics Industry”, “Outstanding Engineer in the Cosmetics Industry”, and “Emerging Engineer
in the Cosmetics Industry”. We were honored with the Excellence Participation Award at the
“2020-2022 Zhejiang Province Cosmetics Safety Popular Science Week” by Zhejiang Provincial
Medical Products Administration. In addition, we released a research paper on core technological
research on Deep Ocean Energy Series in the periodical Skin Health and Disease, published by the
British Association of Dermatologists.And the research paper Research on preparation and properties of
crystalline amino acid cleaning cream was published in the periodical DETERGENT & COSMETICS.
(4) Strategic cooperation: During the Reporting Period, we further deepened our existing strategic
partnerships and enhanced collaborations with Zhejiang University and Hangzhou Dianzi University in
areas such as materials, functional active substances, and skin texture.
6. New supply chain guarantee
(1) During the Reporting Period, the supply chain achieved complete digital management from product
development to product delivery. This was achieved through data interconnection and communication
between various collaborative systems such as SRM, SAP, APS, MFS, MES, WMS, and TMS. It
resulted in transparent material procurement, transparent production processes, transparent product
inspections, transparent equipment operations, and transparent logistics delivery throughout the supply
chain. In addition, the intelligentization of the procurement platform, production scheduling and logistics
operations has improved the efficiency of data transmission and business collaboration between the
supply chain business sectors. This continuous improvement has aided brand promotions and campaigns.
(2) During the Reporting Period, Huzhou production site of the Company added multiple automated
production lines for facial masks and purchased 2 units of 2-ton German EKATO emulsifying pots. We
optimized the factory area’s road planning, strengthened the construction of the safety risk control
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system, and improved the standardization of safety management. We organized all staff to actively
participate in fire safety education, training, and assessment. The intelligent logistics warehouse was
officially put into trial operation, with over 95% of the business operations inside the warehouse
achieving unmanned operation. Our smart logistics has become an industry benchmark.
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
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 3,626,991,878.22 2,625,943,244.29 38.12
Operating costs 1,069,489,813.93 837,034,743.80 27.77
Selling expenses 1,579,997,275.26 1,116,921,650.63 41.46
General and administrative
192,127,158.56 127,140,154.83 51.11
expenses
Financial expenses -30,353,566.91 -14,804,776.98 Not applicable
R&D expenses 91,520,865.15 61,066,694.07 49.87
Net cash flows from operating
1,181,268,072.03 713,782,130.38 65.49
activities
Net cash flows from investing
-102,775,712.36 -176,651,474.45 Not applicable
activities
Net cash flows from financing
-252,230,919.73 -220,919,542.24 Not applicable
activities
Reasons for changes in operating revenue: Mainly due to increased online sales.
Reasons for changes in operating costs: Mainly due to corresponding increased operating revenue.
Reasons for changes in selling expenses: Selling expenses for January to June 2023 amounted to
RMB1.580 billion, accounting for 43.56% of operating revenue (compared with 42.53% for the same
period last year). Selling expenses increased by RMB463 million, a YOY increase of 41.46%, which is
primarily because image promotion expenses increased by RMB460 million, a YOY increase of 50.34%,
mainly due to new brand incubation, and the exploration of offline and overseas channels.
Reasons for changes in general and administrative expenses: General and administrative expenses for
January to June 2023 amounted to RMB192 million, accounting for 5.30% of operating revenue
(compared with 4.84% for the same period last year). General and administrative expenses increased by
RMB64.99 million, a YOY increase of 51.11%, mainly due to the YOY increase in restricted share
equity incentive fees.
Reasons for changes in financial expenses: Mainly due to a decrease in financial expenses of RMB14.86
million as a result of the combined effect of interest income and exchange gains and losses.
Reasons for changes in R&D expenses: R&D expenses for January to June 2023 amounted to
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RMB91.52 million, a YOY increase of RMB30.45 million, accounting for 2.52% of operating revenue
(compared with 2.33% for the same period last year). The parent company’s R&D expense ratio for
January to June 2023 was 5.10% (compared with 4.69% for the same period last year).
Reasons for changes in net cash flows from operating activities: Mainly due to: 1. A YOY increase in
operating revenue and the increase in cash received from the sale of goods; 2. The decrease in the
payment for goods; 3. The increase in the payment for image promotion expenses.
Reasons for changes in net cash flows from investing activities: Net flow increased by RMB73.88
million YOY, mainly due to the new equity investment of RMB90 million in Hangzhou Golong
Holdings Co. Ltd. (renamed Gaolang Holdings Co., Ltd. ) in the previous period, which did not occur in
the current period.
Reasons for changes in net cash flows 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 of 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: Yuan
Closing amount To total Closing amount To total Change
Item of the current assets of the previous assets ratio YOY Cause
period (%) period (%) (%)
Mainly due to the
Receivables Not increased balance of bank
1,350,925.86 0.02
financing applicable acceptance notes as of the
end of the period.
Mainly because the annual
rebates receivable from
Other certain e-commerce
10,143,560.07 0.15 73,564,083.63 1.27 -86.21
receivables platforms for the previous
year were recovered
during the current period.
Mainly due to the
Right-of-use additionally leased
15,947,216.77 0.24 6,410,634.25 0.11 148.76
assets business premises during
the current period.
Mainly due to the increase
in deferred tax assets
provided for impairment
Deferred tax
67,181,222.24 1.01 48,305,338.82 0.84 39.08 of inventories, internal
assets
unrealized gains and
losses and the effect of
share-based payments
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during the current period.
Mainly due to the increase
Other
in prepayments for
non-current 16,869,569.52 0.25 5,554,726.06 0.10 203.70
long-term asset purchase
assets
funds.
Mainly due to the YOY
increase in sales, resulting
Accounts
1,063,096,364.64 15.94 475,427,484.23 8.23 123.61 in an increase of RMB510
payable
million in payables for
goods.
Mainly due to the opening
Employee amount of the period
benefits 79,784,211.66 1.20 124,938,749.36 2.16 -36.14 includes the unpaid
payable year-end bonus payable
for the year 2022.
Non-current
Mainly due to the transfer
liabilities
3,864,732.04 0.06 2,549,452.14 0.04 51.59 of lease liabilities due
due within
within one year.
one year
Mainly due to the
Lease additionally leased
11,281,561.28 0.17 3,718,119.41 0.06 203.42
liabilities business premises during
the current period.
Mainly due to the
increased efforts in
adjusting the department
store channel, refinement
Estimated
9,143,868.44 0.14 59,282,928.68 1.03 -84.58 of the cosmetics store
liabilities
channel and contraction of
the supermarket channel
during the previous
period.
Mainly due to the
Paid-in Company’s
capital (or implementation of a
396,928,515 0.06 283,519,469 0.05 40.00
share capital reserve
capital) capitalization plan during
the current period.
Mainly due to the increase
in net profit earned by our
Minority subsidiary Ningbo
39,401,771.32 0.01 12,734,670.33 0.00 209.41
interests TIMAGE Cosmetics Co.,
Ltd. during the current
period.
Other description
None
2. Overseas assets
√ Applicable □ Not applicable
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(1) Scale of assets
Including overseas assets of RMB225,520.9 thousand, accounting for 3.38% of 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
Book value as of the end of
Item Cause for restrictions
the period
Including transformer deposit, Pinduoduo deposit, Tmall
Monetary capital 7,362,952.89
deposit and Alipay deposit, etc.
Total 7,362,952.89
4. Other description
□ Applicable √ Not applicable
(IV) Analysis of investment
1. Overall analysis of external equity investments
√ Applicable □ Not applicable
Currency: RMB
Closing amount Opening amount
Item Provision for Carrying Provision for Carrying
Book balance Book balance
impairment amount impairment amount
Investments in
other equity 146,402,400.00 146,402,400.00 146,402,400.00 146,402,400.00
instruments
Investment in
3,066,898.78 3,066,898.78 3,068,948.16 3,068,948.16
joint ventures
Investment in
221,895,173.25 92,018,511.89 129,876,661.36 216,906,642.52 81,442,213.22 135,464,429.30
associates
Total 371,364,472.03 92,018,511.89 279,345,960.14 366,377,990.68 81,442,213.22 284,935,777.46
For details, see description in “17. Long-term equity investments” and “18. Investments in other equity
instruments”, “VII. Notes to the Items of Consolidated Financial Statements”, “Section X Financial
Report”.
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(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
Unit: Yuan Currency: RMB
Gains and
Cumulative
losses from Provision for Amount
amount of Purchase
Category of Opening changes in fair impairment sold/redeemed
changes in fair amount for the Other changes Closing amount
assets amount value during during the for the current
value stated as current period
the current current period period
equity
period
Others 146,402,400.00 146,402,400.00
Total 146,402,400.00 146,402,400.00
Investment in securities
□ Applicable √ Not applicable
Description of investment in securities
□ Applicable √ Not applicable
Investment in private equity fund
□ Applicable √ Not applicable
Investment in derivatives
□ Applicable √ Not applicable
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(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 products Registered Total Holding or
Net assets Net profit
subsidiary business and services capital assets shareholding
Zhejiang
Meiligu
Cosmetics
Electronic Cosmetics 1,000.00 86,967.52 32,657.69 14,073.65 Holding
sales
Commerce
Co., Ltd.
Hangzhou
Cosmetics
Proya Trade Cosmetics 5,000.00 26,605.75 9,660.07 3,953.24 Holding
sales
Co., Ltd.
(VII) Structured entities controlled by the Company
□ Applicable √ Not applicable
V. Other Disclosures
(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 meet 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 performance may fall short of
expectations.
(II) Other disclosures
□ Applicable √ Not applicable
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Section IV Corporate Governance
I. General Meetings of Shareholders
Query index of the
Session of Date of designated website Resolution
Meeting resolution
meeting meeting where the resolution disclosure date
is published
The meeting considered
and approved proposals
including the Company’s
Annual Report 2022 and
its Summary, and the
Company’s 2022 Annual
Profit Distribution and
Capital Reserve
Conversion to Share
Announcement No.
2022 Annual Capital Plan. For
2023-026 on SSE
General Meeting May 11, 2023 May 12, 2023 details, see the
website
of Shareholders Announcement on
(www.sse.com.cn)
Resolutions of the 2022
Annual General Meeting
of Shareholders (No.:
2023-026) released on
the SSE website
(http://www.sse.com.cn)
on May 12, 2023 and
relevant information
disclosure media.
Holders of preferred shares with resumed voting rights requesting to hold extraordinary general
meeting
□ Applicable √ Not applicable
Description 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 Conversion Plan
Profit distribution plan and plan for conversion of capital reserve into share capital proposed for
the first half of 2023
Distribution or conversion or not Yes
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Number of bonus shares to be distributed per 10 shares (share) 0
Amount of cash dividends per 10 shares (RMB) (tax inclusive) 3.80
Number of shares converted per 10 shares (share) 0
Description of profit distribution plan and plan for conversion of capital reserve into share capital
Based on the total share capital as at the record date on which equity distribution is implemented, the
Company proposes to distribute to all shareholders registered a cash dividend of RMB3.80 (tax
inclusive) per 10 shares. Based on the total share capital of 396,928,515 shares on June 30, 2023, it is
estimated that the cash dividend to be distributed will amount to RMB150,832,835.70 (tax inclusive).
No the capital reserve will be converted into share capital and no bonus shares will be given.
In case of a change in the Company’s total share capital due to the conversion of convertible bonds
before the record date for equity distribution, the Company maintains the said distribution ratios and
yet adjusts the total distribution and conversion amounts.
IV. Equity Incentive Plan, Employee Stock Ownership Plan 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
Matter Reference
Matters related to adjustment of the
price and quantity of restricted Announcement No. 2023-036 disclosed on SSE website,
shares repurchased under the 2022 Shanghai Securities News, Securities Times on June 21, 2023
Restricted Share Incentive Plan
Matters related to the repurchase and
Announcement No. 2023-037 disclosed on SSE website,
cancellation of certain equity
Shanghai Securities News, Securities Times on June 21, 2023
incentive restricted shares
Matters related to notifying creditors
Announcement No. 2023-038 disclosed on SSE website,
of the repurchase and cancellation of
Shanghai Securities News, Securities Times on June 21, 2023
certain restricted shares
Matters related to the announcement
on the implementation of repurchase
Announcement No. 2023-044 disclosed on SSE website,
and cancellation of certain restricted
Shanghai Securities News, Securities Times on August 22, 2023
shares under the 2022 Restricted
Share Incentive Plan
(II) Incentives not disclosed in the interim announcement or with subsequent progress
Particulars of equity incentives
□ Applicable √ Not applicable
Other description
□ Applicable √ Not applicable
Particulars of employee stock ownership plan
□ Applicable √ Not applicable
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Other incentives
□ Applicable √ Not applicable
Section V Environmental and 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 of companies 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 key pollutant discharging units
√ Applicable □ Not applicable
During the Reporting Period, Proya factories took the initiative to excavate, replace, repair and retest
some damaged rain and sewage pipes in the factory area in accordance with the 2022 rain and sewage
pipe inspection report issued by CCTV.
Proya factories actively responded to government requirements on the inspection of pollutant prevention
and control in key enterprises. With the intention to protect the environment and fulfill social
responsibilities, they carried out soil pollution (groundwater) prevention and control, conducted on-site
exploration and sampling for analysis, and prepared compliance testing reports.
At present, new laws and regulations issued by the government’s environmental protection departments
are imposing stricter requirements. Proya factories have made extensive efforts to remain at the forefront
of interpretation of new environmental regulations, conduct preemptive strategic planning for green and
low-carbon factories, and raise the level of environmental, occupational and health management systems
throughout the industry. For example, the factories implemented environmental protection project-based
management, and signed environmental protection comprehensive butler services with third-party
qualified units. Leveraging the professional, practical and service capabilities of the third-party system,
they avoided risks and conducted more reasonable environmental management planning and feasible
suggestions, helping factories to make their environmental protection work more professional, secure,
low-carbon and green.
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
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(IV) Relevant information contributing to ecological protection, pollution prevention and control,
and fulfillment of environmental responsibilities
□ Applicable √ Not applicable
(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
In mid-March 2023, in response to the “Special Action to Support the High-Quality Development of 26
Districts and Counties in Mountainous Areas” initiative of Zhejiang Province, Proya traveled to Yunhe
County, Lishui City to participate in paired-up exchanges and assistance actions under the unified
organization of the Zhejiang Federation of Industry and Commerce. We provided local government
officials and business representatives with a detailed introduction of our resources and advantages in the
field of platform e-commerce and live e-commerce operation. And we announced our cooperation
intention to boost the online development of the “children’s toy industry” with local characteristics in
Yunhe through financial assistance, personnel training, experience sharing, project cooperation, etc.
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Section VI Important 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 the
Company’s actual controllers, shareholders, related parties, acquirers and the Company
√ Applicable □ Not applicable
Commitment The next
Specific
strictly step in the
Background Any time reasons
Type of Party of Date and fulfilled event of
of Content of commitment line for for failure
commitment commitment duration according to failure of
commitment performance of on-time
schedule or on-time
fulfillment
not fulfillment
IPO-related Restrictions HOU (1) During their terms as the Company’s Commitment No Yes Not Not
commitments on sales of Juncheng, director/senior management, they shall not date: applicable applicable
shares FANG transfer more than 25% of their total shares November
Yuyou and directly or indirectly held in the Company 15, 2017
CAO each year. Within six months after leaving Duration:
Liangguo, office, they shall not transfer their shares November
director and directly or indirectly held in the Company; 15, 2017 to
senior (2) If their shares in the Company are sold long-term
management 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 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
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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
changes and resignation; (3) If they or their
partnerships violate the said share lock-up
commitments, the lock-up period for
their/their partnerships’ shares in the
Company will be automatically extended for
6 months.
Restrictions JIN Yanhua, (1) Within 12 months from the date of the Commitment No Yes Not Not
on sales of senior Company’s IPO, he shall not transfer or date: April applicable applicable
shares management authorize any other person to manage his 16, 2018
shares directly or indirectly held in the Duration:
Company or let the Company repurchase April 16,
such shares; (2) During his term as the 2018 to
Company’s senior management, he shall not long-term
transfer more than 25% of his total shares
directly or indirectly held in the Company
each year. Within six months after leaving
office, he shall not transfer his shares
directly or 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 offering price for 20 consecutive trading
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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.
Restrictions WANG Li, (1) Within 12 months from the date of the Commitment No Yes Not Not
on sales of senior Company’s IPO, she shall not transfer or date: applicable applicable
shares management authorize any other person to manage her September 3,
shares directly or indirectly held in the 2018
Company or let the Company repurchase Duration:
such shares; (2) During her term as the September 3,
Company’s senior management, she shall 2018 to
not transfer more than 25% of her total long-term
shares directly or indirectly held in the
Company each year. Within six months
after leaving office, she 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 period, the selling price shall not
be lower than the offering price. If the
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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.
Restrictions HOU (1) Within 24 months upon expiration of the Commitment No Yes Not Not
on sales of Juncheng lock-up period, they shall not directly or date: applicable applicable
shares and FANG indirectly reduce their shares in the Issuer November
Aiqin, by more than 6% of the total number of 15, 2017
controlling shares of the Issuer before such IPO; (2) Duration:
shareholder They must sell their shares in the Company November
and actual through methods including but not limited 15, 2017 to
controller to collective trading through bidding at the long-term
stock exchange, block trading and transfer
by agreement in line with applicable laws,
regulations and rules; (3) Before selling the
Company’s shares, they shall announce the
same three trading days in advance, and
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discharge the obligation to disclose
information in a timely and accurate manner
as per the rules of the stock exchange,
except to the extent that they hold less than
5% of the Company’s shares; (4) Should
they fail to perform the said intent of share
reduction, they must explain the reason 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.
Restrictions FANG (1) If they intend to reduce shares after the Commitment No Yes Not Not
on sales of Yuyou and lock-up period expires, they will prudently date: applicable applicable
shares LI Xiaolin, make a share reduction plan as necessary for November
shareholders the Company to stabilize the share price and 15, 2017
directly conduct operations and capital operations as Duration:
holding required by the CSRC and the exchange on November
more than shareholders for share reduction, whereby 15, 2017 to
5% of the shares shall be reduced gradually upon long-term
Company’s expiration of the lock-up period; (2) They
shares must sell shares in the Company through
methods including but not limited to
collective trading through bidding at the
stock exchange, block trading and transfer
by agreement in line with applicable laws,
regulations and rules; (3) Before selling the
Company’s shares, they shall announce the
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same three trading days in advance, and
discharge the obligation to disclose
information in a timely and accurate manner
as per the rules of the stock exchange,
except to the extent that they hold less than
5% of the Company’s shares; (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.
Others The When the preconditions for enabling the Commitment No Yes Not Not
Company share price stabilization plan are met, if the date: applicable applicable
Company fails to take specific measures to November
stabilize the share price, the Company must 15, 2017
explain the reasons for failing to do so in the Duration:
Company’s General Meeting of November
Shareholders and media designated by the 15, 2017 to
CSRC and publicly apologize to the long-term
Company’s shareholders and public
investors. In the event of losses to investors
not resulting from force majeure, the
Company will be liable for compensation to
investors according to law, and be liable
otherwise as required by laws, regulations
and the regulators; if losses are due to force
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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 the
new directors and senior management to
fulfill the commitments made by the
directors and senior management at the time
of the Company’s IPO.
Others The When the preconditions for enabling the Commitment No Yes Not Not
Company’s share price stabilization plan are met, if they date: applicable applicable
controlling fail to take specific measures to stabilize the November
shareholders share price according to the plan, they must 15, 2017
and actual explain the reasons for failing to do so at the Duration:
controllers Issuer’s General Meeting of Shareholders November
and in the media designated by the CSRC 15, 2017 to
and publicly apologize to the Issuer’s long-term
shareholders and public investors. Where no
such commitment is fulfilled, 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
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have taken and carried out measures to
stabilize the share price as per the said plan.
Others The When the preconditions for enabling the Commitment No Yes Not Not
Company’s share price stabilization measures are met, if date: applicable applicable
directors there is a failure to take specific measures as November
(excluding per the plan to stabilize the share price, they 15, 2017
independent must explain the reasons for failing to do so Duration:
directors) at the Issuer’s General Meeting of November
and senior Shareholders and in the media designated by 15, 2017 to
management the CSRC and publicly apologize to the long-term
Issuer’s shareholders and public investors.
Where no such commitment is fulfilled,
they will not receive remuneration and
shareholder dividends (if any) 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.
Others The If the Company’s prospectus contains any Commitment No Yes Not Not
Company false records, misleading statements or date: applicable applicable
major omissions which cause investors to November
suffer losses in securities transactions, the 15, 2017
Company will compensate investors for Duration:
such losses according to law. After such November
violations are identified by the CSRC or the 15, 2017 to
stock exchange where the Company is listed long-term
or the judicial authorities, they will actively
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compensate investors for direct economic
losses incurred therefrom by settling with
investors with respect to measurable
economic losses directly incurred by
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
effectively protecting the interests of
investors, especially small and medium
investors. If it is 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 actual losses identified by the
CSRC and the judicial authorities.
Others The Issuer’s If the Issuer’s prospectus contains any false Commitment No Yes Not Not
controlling records, misleading statements or major date: applicable applicable
shareholders omissions, which causes investors to suffer November
and actual losses in securities transactions, they will 15, 2017
controllers compensate investors for such losses Duration:
according to law. After such violations are November
identified by the CSRC or the stock 15, 2017 to
exchange where the Company is listed or long-term
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the judicial authorities, they will actively
compensate investors for direct economic
losses incurred therefrom by settling with
investors with respect to measurable
economic losses directly 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
effectively protecting the interests of
investors, especially small and
medium-sized 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
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 violation, and their shares in the
Issuer will not be transferred until they have
taken and carried out compensation
measures as per the said commitments.
Others Directors, If the Issuer’s prospectus contains any false Commitment No Yes Not Not
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supervisors records, misleading statements or major date: applicable applicable
and senior omissions, which causes investors to suffer November
management losses in securities transactions, they will 15, 2017
compensate investors for such losses Duration:
according to law. After such violations are November
identified by the CSRC or the stock 15, 2017 to
exchange where the Company is listed or long-term
the judicial authorities, they will actively
compensate investors for direct economic
losses incurred therefrom by settling with
investors with respect to measurable
economic losses directly 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
effectively protecting the interests of
investors, especially small and
medium-sized investors. If it is 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
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(or allowances) and shareholder dividends
(if any) from the Issuer within 5 working
days from the date of the said violation, 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.
Others The In order to ensure the effective use of the Commitment No Yes Not Not
Company proceeds from the IPO, effectively prevent date: applicable applicable
the risk of diluting immediate returns and November
improve future returns, the Company 15, 2017
intends to take measures including Duration:
tightening operation, management and November
internal control, accelerating the progress of 15, 2017 to
fundraising projects, and strengthening the long-term
investor return mechanism, so as to improve
asset quality, increase operating revenue,
increase future earnings, and achieve
sustainable development to compensate for
the diluted immediate returns. The
Company promises to continuously improve
various measures to fill the diluted
immediate returns in accordance with the
implementation rules subsequently issued
by the CSRC and the SSE. If it is found to
have violated the said commitments, the
Company will promptly announce the facts
and causes of such violation, except for
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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.
Others HOU In order to ensure that the Company’s Commitment No Yes Not Not
Juncheng measures to fill the diluted immediate date: applicable applicable
and FANG returns can be effectively performed, they, November
Aiqin, as the Company’s controlling shareholder 15, 2017
controlling and actual controller, promise that: (1) Duration:
shareholder Under no circumstances will they abuse November
and actual their position as the controlling shareholder 15, 2017 to
controller 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
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will immediately make supplementary
commitments in line with such rules of the
CSRC and the SSE, and actively work
towards the Company’s issuing of new
commitments or measures to comply with
the requirements of the CSRC and the SSE;
(3) They will fully, completely and
promptly perform the Company’s measures
regarding compensation for the diluted
immediate returns and his or her
commitments regarding the measures to
compensate for the diluted immediate
returns. If found to have violated such
commitments, which causes losses to the
Company or shareholders, they are willing
to: explain the cause and apologize at the
General Meeting of Shareholders and the
media designated by the CSRC; be held
liable for compensation to the Company
and/or shareholders by law;
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.
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Others Directors, In order to ensure that the Company’s Commitment No Yes Not Not
senior measures to compensate for the diluted date: applicable applicable
management immediate returns can be effectively November
performed, they, as the Company’s directors 15, 2017
and senior management, promise that: (1) Duration:
They will not offer benefits to other entities November
or individuals for free or on unfair terms, or 15, 2017 to
otherwise harm the Company’s interests; (2) long-term
They will strictly follow the Company’s
budget management by limiting his or her
duty consumption to the extent required,
subject to the Company’s supervision and
free from wastes 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 work towards the
improvement of the Company’s
compensation system, so as to be more in
line with the requirements for filling the
diluted immediate returns; support the
Company’s Board of Directors or
Remuneration Committee in linking the
implementation of the Company’s measures
to fill the diluted immediate returns to
developing, revising and supplementing the
Company’s compensation system; promise
that the vesting conditions for the
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Company’s equity incentives to be
announced will be linked to the
implementation of the Company’s measures
to fill the 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 the rules of the CSRC and the SSE,
and actively work towards the Company’s
making of new commitments or taking new
measures to comply with the requirements
of the CSRC and the SSE; (6) They will
fully, completely and promptly 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: explain
the cause and apologize at the General
Meeting of Shareholders and the media
designated by the CSRC; be held liable
for compensation to the Company and/or
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shareholders by law; 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 as constituting a guarantee for
the Issuer’s future profits.
Avoiding HOU 1. They do not and will not directly or Commitment No Yes Not Not
horizontal Juncheng indirectly engage in any activities date: applicable applicable
competition and FANG constituting horizontal competition with the November
Aiqin, existing and future businesses of the 15, 2017
controlling Company and its holding subsidiaries, Duration:
shareholder including but not limited to the R&D, November
and actual production and sale of any products that are 15, 2017 to
controller the same as or similar to those of the long-term
Company and its holding subsidiaries. They
shall be liable for economic losses caused
by 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
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commitment, if the Company further
expands the scope of products and business,
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 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
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priority to decide whether to invest in the
said enterprises according to legal
provisions and the consent of other
shareholders of such enterprises.
Commitments Others HOU In order to ensure that the Company’s Commitment No Yes Not Not
on Juncheng measures to fill the immediate returns can date: April applicable applicable
refinancing and FANG be effectively performed, they commit that: 21, 2021
Aiqin, 1. They will not interfere with the Duration:
controlling Company’s operation and management April 21,
shareholder activities beyond their authority or encroach 2021 to
and actual on the Company’s interests; 2. From the long-term
controller date of making these commitments to the
completion of the Company’s public
offering of A-share convertible corporate
bonds, to the extent that 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 at that
time; 3. They will effectively implement the
Company’s measures to fill returns and their
commitments in this regard, and if found to
have violated such commitments, which
results in losses to the Company or
investors, they are willing to be liable for
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compensation to the Company or investors
according to law. 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 them by the securities
regulatory authorities such as the CSRC and
the SSE in accordance with the relevant
regulations and rules.
Others Directors, In order to ensure that the Company’s Commitment No Yes Not Not
senior measures to fill the immediate returns can date: April applicable applicable
management be effectively performed, they commit that: 21, 2021
1. They will not offer benefits to other Duration:
entities or individuals for free or on unfair April 21,
terms, or otherwise harm the Company’s 2021 to
interests; 2. They will restrict their long-term
post-related consumption behaviors; 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 measures
for filling returns; 5. If the Company
implements equity incentives in the future,
the vesting conditions for the Company’s
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equity incentives to be announced 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 corporate
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 them 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 Litigation and Arbitration Matters
"□ The Company had material litigation and arbitration matters during the Reporting Period"
"√ The Company had no material litigation and arbitration matters 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 relevant to the ordinary course of business
1. Matters that have been disclosed in the interim announcement without progress or changes 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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(II) Related-party transactions relevant to asset acquisition or equity acquisition and disposal
1. Matters that have been disclosed in the interim announcement without progress or changes 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
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 relevant to joint external investment
1. Matters that have been disclosed in the interim announcement without progress or changes 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 debts with related parties
1. Matters that have been disclosed in the interim announcement without progress or changes 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
(V) Financial business among the Company, related financial companies and holding financial
companies, and related parties
□ Applicable √ Not applicable
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(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
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2 Significant guarantees that have been performed or outstanding during the Reporting Period
□ Applicable √ Not applicable
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3 Other material contracts
□ Applicable √ Not applicable
XII. Explanations on Other Significant Matters
□ Applicable √ Not applicable
Section VII Shareholders and Changes in Shares
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
Issuance Shares
Percentage Bonus Percentage
Number of new converted from Others Subtotal Number
(%) shares (%)
shares capital reserve
I. Shares subject
to selling 210 0.7407 84 84 294 0.7407
restrictions
1. Shares held by
state government
2. Shares held by
state-owned legal
persons
3. Shares held by
other domestic 210 0.7407 84 84 294 0.7407
funds
Including: Shares
held by domestic
non-state-owned
legal persons
Shares
held by domestic 210 0.7407 84 84 294 0.7407
natural persons
4. Shares held by
foreign funds
Including: Shares
held by foreign
legal persons
Shares
held by foreign
natural persons
II. Shares not
subject to selling 28,141.9469 99.2593 11,256.8136 0.0910 11,256.9046 39,398.8515 99.2593
restrictions
1. Ordinary RMB
28,141.9469 99.2593 11,256.8136 0.0910 11,256.9046 39,398.8515 99.2593
shares
2. Foreign-funded
shares listed
domestically
3. Foreign-funded
shares listed
overseas
4. Others
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III. Total number
28,351.9469 100.00 11,340.8136 0.0910 11,340.9046 39,692.8515 100.00
of shares
2. Explanation on changes in shares
√ Applicable □ Not applicable
On May 11, 2023, the Company held the 2022 Annual General Meeting of Shareholders, and reviewed
and approved the 2022 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 shareholders were
distributed a cash dividend of RMB8.70 (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 113,408,136 shares.
Among them, the number of shares subject to selling restrictions increased by 840,000 shares, and the
number of shares not subject to selling restrictions increased by 112,568,136 shares.
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 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. During the Reporting Period, a total of RMB127,000 of Proya Convertible
Bonds had been converted into A shares of the Company, and the number of shares converted was 910
shares. The number of shares not subject to selling restrictions of the Company increased by 910 shares.
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 of the interim report (if any)
√ Applicable □ Not applicable
On June 20, 2023, the 12th meeting of the third session of Board of Directors of the Company reviewed
and approved the Proposal on Repurchasing and De-registering Part of Restricted Incentive Shares, and
the total number of restricted shares repurchased and de-registered was 105,350 shares. The Company
completed the repurchase and cancellation procedures in August 2023, which did not have a material
impact on earnings per share, net assets per share and other financial indicators.
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
Number of Number of Number of Number of
Date of
shares with shares with shares with shares with
Name of Reason for selling releasing
selling selling selling selling
shareholder restrictions the sales
restrictions restrictions restrictions restrictions at
restrictions
at the released during increased the end of the
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beginning of the Reporting during the Reporting
the period Period Reporting Period
Period
2022 Restricted
JIN Yanhua 140,000 0 56,000 196,000 Stock Incentive -
Plan
2022 Restricted
WANG Li 180,000 0 72,000 252,000 Stock Incentive -
Plan
99 persons
granted under
2022 Restricted
2022
1,780,000 0 712,000 2,492,000 Stock Incentive -
Restricted
Plan
Stock
Incentive Plan
Total 2,100,000 0 840,000 2,940,000 / /
Note: The increase in the number of shares with selling restrictions by shareholders in the above table is
mainly due to the completion of the Company's equity distribution in 2022. Based on the total share
capital as at the record date for equity distribution, the capital reserve was converted into share capital in
the proportion of 4 shares for every 10 shares to all shareholders.
II. Shareholders
(I) Total number of shareholders:
Total number of shareholders of ordinary shares as at the end of
18,526
the Reporting Period
Total number of shareholders of preference shares whose voting
0
rights have been 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
Shareholdings of the top ten shareholders
Number of Pledged, placed with
Change Number of
shares held mark, lock-up or not
Name of shareholder during the shares held Percentage Nature of
with
(full name) Reporting as at the end (%) Share shareholder
selling Number
Period of the period status
restrictions
Domestic
HOU Juncheng 39,068,296 136,739,037 34.45 0 None natural
person
Hong Kong
Securities Clearing 25,248,690 89,722,159 22.60 0 None Others
Company Limited
Domestic
FANG Yuyou 13,852,788 59,625,258 15.02 0 Frozen 17,041,269 natural
person
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China Construction
Bank Co., Ltd. -
Yinhua Fuyu
816,677 6,617,978 1.67 0 None Others
Themed Hybrid
Securities
Investment Fund
Aberdeen Standard
Investment
Management (Asia)
2,505,720 5,058,013 1.27 0 None Others
Limited - Aberdeen
Standard - China
A-Share Fund
China Construction
Bank Co., Ltd. -
China Universal
1,300,005 4,400,018 1.11 0 None Others
Consumer Industry
Hybrid Securities
Investment Fund
Industrial and
Commercial Bank of
China Limited -
Invesco Great Wall 952,000 3,332,000 0.84 0 None Others
Emerging Growth
Hybrid Securities
Investment Fund
TEMASEK
FULLERTON 2,348,469 2,507,469 0.63 0 None Others
ALPHA PTE LTD
Domestic
CAO Liangguo 545,015 1,907,552 0.48 0 None natural
person
Bank of
Communications
Co., Ltd. - China
Universal Mid Cap 900,106 1,700,131 0.43 0 None Others
Value Selected
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
RMB
HOU Juncheng 136,739,037 ordinary 136,739,037
shares
RMB
Hong Kong Securities Clearing Company Limited 89,722,159 ordinary 89,722,159
shares
RMB
FANG Yuyou 59,625,258 ordinary 59,625,258
shares
RMB
China Construction Bank Co., Ltd. - Yinhua Fuyu
6,617,978 ordinary 6,617,978
Themed Hybrid Securities Investment Fund
shares
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Aberdeen Standard Investment Management RMB
(Asia) Limited - Aberdeen Standard - China 5,058,013 ordinary 5,058,013
A-Share Fund shares
China Construction Bank Co., Ltd. - China RMB
Universal Consumer Industry Hybrid Securities 4,400,018 ordinary 4,400,018
Investment Fund shares
Industrial and Commercial Bank of China Limited RMB
- Invesco Great Wall Emerging Growth Hybrid 3,332,000 ordinary 3,332,000
Securities Investment Fund shares
RMB
TEMASEK FULLERTON ALPHA PTE LTD 2,507,469 ordinary 2,507,469
shares
RMB
CAO Liangguo 1,907,552 ordinary 1,907,552
shares
Bank of Communications Co., Ltd. - China RMB
Universal Mid Cap Value Selected Hybrid 1,700,131 ordinary 1,700,131
Securities Investment Fund shares
Notes on the special repurchase account among
None
the top ten shareholders
Description of the above shareholders involved in
entrustment/entrusted voting rights and waiver of None
voting rights
FANG Yuyou is the younger brother of HOU Juncheng's spouse
Explanation on the related relationship or parties
FANG Aiqin, therefore HOU Juncheng and FANG Yuyou are
acting in concert among the above shareholders
related.
Description of the shareholders of preference
shares with voting rights restored and the number None
of preference shares
Shareholdings and sales restrictions of the top ten shareholders with selling restrictions
√ Applicable □ Not applicable
Unit: Share
Listing and trading of shares with selling
Number of
restrictions
Serial Name of shareholder with shares with Selling
Number of
number selling restrictions selling Time for listing restrictions
additional shares to
restrictions held and trading
be listed and traded
See note
1 Equity incentive object 2,940,000
for details
Explanation on the related relationship or
parties acting in concert among the above None
shareholders
Note: The restricted shares held by the equity incentive objects are the shares granted under the
Company's 2022 Restricted Stock Incentive Plan, and the shares that the Company has completed the
2022 Equity Distribution and converted from capital reserve. The restricted period is 12 months, 24
months and 36 months from the completion of registration (September 6, 2022) of the restricted shares
granted with the Shanghai Branch of China Securities Depository and Clearing Corporation Limited.
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(III) Strategic investors or general legal persons becoming the top ten shareholders through
placement of new shares
□ Applicable √ Not applicable
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
Unit: Share
Number of Number of Change in
shares held at shares held at shares during Reason for the
Name Position
the beginning the end of the the Reporting change
of the period period Period
Capital reserve
HOU
Chairman 97,670,741 136,739,037 39,068,296 conversion to share
Juncheng
capital
Capital reserve
Director, conversion to share
FANG
General 45,772,470 59,625,258 13,852,788 capital and reduction
Yuyou
Manager of personal capital
needs
Deputy Capital reserve
JIN
General 216,973 303,762 86,789 conversion to share
Yanhua
Manager capital
CFO, Deputy Capital reserve
General conversion to share
WANG Manager, capital and increase
225,251 315,491 90,240
Li Secretary of in shareholding by
the Board of centralized bidding
Directors trading
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
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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 share 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 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”. 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.
According to the relevant regulations and the agreement of the Public Issuance of Convertible Corporate
Bonds of A Shares of Proya Cosmetics Co., Ltd., the “Proya Convertible Bond” issued by the Company
can be converted into the Company’s shares from June 14, 2022, with the conversion period from June
14, 2022 to December 7, 2027. The initial conversion price is RMB195.98 per share, and the latest
conversion price is RMB98.61 per share. Historical adjustments to the conversion price are as follows:
1. Due to the Company’s implementation of 2021 Equity Distribution Plan, the conversion price of
Proya convertible bond has been adjusted to RMB139.37 per share since May 30, 2022. For details,
please refer to the Announcement of Proya Cosmetics Co., Ltd. on Adjusting the Conversion Price of
Convertible Bonds in Relation to the 2021 Equity Distribution (Announcement No.: 2022-029) disclosed
by the Company on the website of Shanghai Stock Exchange (www.sse.com.cn) on May 24, 2022.
2. Due to the Company’s completion of the registration of restricted shares granted under the 2022
Restricted Share Incentive Plan, the conversion price of Proya convertible bond has been adjusted to
RMB138.92 per share since September 9, 2022. For details, please refer to the Announcement of Proya
Cosmetics Co., Ltd. on Adjusting the Conversion Price of “Proya Convertible Bonds” in Relation to the
Granting of Additional Shares of Restricted Shares (Announcement No.: 2022-052) disclosed by the
Company on the website of Shanghai Stock Exchange (www.sse.com.cn) on September 8, 2022.
3. Due to the Company’s implementation of 2022 Equity Distribution Plan, the conversion price of
Proya convertible bond has been adjusted to RMB98.61 per share since May 29, 2023. For details,
please refer to the Announcement of Proya Cosmetics Co., Ltd. on Adjusting the Conversion Price of
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Convertible Bonds in Relation to the 2022 Equity Distribution (Announcement No.: 2023-030) disclosed
by the Company on the website of Shanghai Stock Exchange (www.sse.com.cn) on May 23, 2023.
4. Due to the Company’s completion of the repurchase and cancellation of certain equity incentive
restricted shares, the conversion price of Proya convertible bond has been adjusted to RMB98.62 per
share since August 29, 2023. For details, please refer to the Announcement of Proya Cosmetics Co., Ltd.
on Completing the Repurchase and Cancellation of Certain Equity Incentive Restricted Shares and
Adjusting the Conversion Price of “Proya Convertible Bonds” (Announcement No.: 2023-045)
disclosed by the Company on the website of Shanghai Stock Exchange (www.sse.com.cn) on August 28,
2023.
(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 of the period 9,249
Guarantors of convertible bonds of the Company None
Material changes in the profitability, asset conditions and credit
None
conditions of the guarantors
The top ten holders of convertible bonds are as follows:
Value of bonds
held as at the end Holding
Name of holders of convertible corporate bonds
of the period ratio (%)
(RMB)
Soochow Securities Co., Ltd. 71,677,000 9.55
Dajia Assets - China CITIC Bank - Dajia Assets Houkun No.40
31,601,000 4.21
Collective Asset Management Products
Dajia Assets - Postal Savings Bank - Dajia Assets - Wenjian Selected
30,806,000 4.10
No.6 (Tranche 2) Collective Asset Management Products
National Social Security Fund 201 Portfolio 30,119,000 4.01
Agricultural Bank of China Co., Ltd. - South Xiyuan Convertible
26,790,000 3.57
Bond Securities Investment Fund
Industrial and Commercial Bank of China Limited － South Guangli
24,664,000 3.28
Return Bond Securities Investment Fund
Bank of China Co., Ltd. - South Changyuan Convertible Bond
23,567,000 3.14
Securities Investment Fund
China Galaxy Securities Co., Ltd. 21,494,000 2.86
Sinokorea Life Insurance Co., Ltd. - Traditional Insurance 19,868,000 2.65
China Southern Asset Management Ningkang Convertible Bonds
19,561,000 2.61
Fixed-benefit Pension Products - Bank of China Co., Ltd.
(III) Changes in convertible bonds during the Reporting Period
Unit: Yuan Currency: RMB
Name of Increase or decrease due to this change
Before this After this
convertible Share
change Redemption Repurchase change
corporate bonds conversion
Proya 750,937,000 127,000 0 0 750,810,000
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Semi-Annual Report 2023
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
127,000
during the Reporting Period (RMB)
Number of shares converted from convertible
910
bonds during the Reporting Period (Share)
Accumulative number of shares converted from
6,427
convertible bonds (Share)
Accumulative number of shares converted from
convertible bonds accounting for the total number
0.0023
of issued shares of the Company before the
conversion (%)
Value of bonds not yet converted (RMB) 750,810,000
Proportion of unconverted convertible bonds to the
99.8799
total issuance of convertible bonds (%)
(V) Historical adjustments to the conversion price
Unit: Yuan Currency: RMB
Name of convertible corporate bonds Proya convertible bond
Date of
adjusting Price of Explanation on
Disclosure
the convertible shares Disclosure media adjusting the conversion
date
conversion after adjustment price
price
May 30, RMB139.37/share May 24, SSE website Due to the Company’s
2022 2022 (http://www.sse.com.cn), implementation of 2021
Shanghai Securities News, Equity Distribution
Securities Times Plan, the conversion
price of Proya
convertible bond has
been adjusted to
RMB139.37 per share
since May 30, 2022. For
details, please refer to
the Announcement of
Proya Cosmetics Co.,
Ltd. on Adjusting the
Conversion Price of
Convertible Bonds in
Relation to the 2021
Equity Distribution
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(Announcement No.:
2022-029) disclosed by
the Company on the
website of Shanghai
Stock Exchange
(www.sse.com.cn) on
May 24, 2022.
September RMB138.92/share September SSE website Due to the Company’s
9, 2022 8, 2022 (http://www.sse.com.cn), completion of the
Shanghai Securities News, registration of restricted
Securities Times shares granted under the
2022 Restricted Share
Incentive Plan, the
conversion price of
Proya convertible bond
has been adjusted to
RMB138.92 per share
since September 9,
2022. For details, please
refer to the
Announcement of Proya
Cosmetics Co., Ltd. on
Adjusting the
Conversion Price of
“Proya Convertible
Bonds” in Relation to
the Granting of
Additional Shares of
Restricted Shares
(Announcement No.:
2022-052) disclosed by
the Company on the
website of Shanghai
Stock Exchange
(www.sse.com.cn) on
September 8, 2022.
May 29, RMB98.61/share May 23, SSE website Due to the Company’s
2023 2023 (http://www.sse.com.cn), implementation of 2022
Shanghai Securities News, Equity Distribution
Securities Times Plan, the conversion
price of Proya
convertible bond has
been adjusted to
RMB98.61 per share
since May 29, 2023. For
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Semi-Annual Report 2023
details, please refer to
the Announcement of
Proya Cosmetics Co.,
Ltd. on Adjusting the
Conversion Price of
Convertible Bonds in
Relation to the 2022
Equity Distribution
(Announcement No.:
2023-030) disclosed by
the Company on the
website of Shanghai
Stock Exchange
(www.sse.com.cn) on
May 23, 2023.
The latest conversion price as at
RMB98.61/share
the end of the Reporting Period
Description: Due to the Company’s completion of the repurchase and cancellation of certain equity
incentive restricted shares, the conversion price of Proya convertible bond has been adjusted to
RMB98.62 per share since August 29, 2023. For details, please refer to the Announcement of Proya
Cosmetics Co., Ltd. on Completing the Repurchase and Cancellation of Certain Equity Incentive
Restricted Shares and Adjusting the Conversion Price of “Proya Convertible Bonds” (Announcement
No.: 2023-045) disclosed by the Company on the website of Shanghai Stock Exchange
(www.sse.com.cn) on August 28, 2023.
(VI) The Company’s liabilities, changes in credit and cash arrangements for debt repayment in
future years
As of June 30, 2023, the Company’s total assets were RMB6,669,650,520.45, and its liabilities totaled
RMB2,799,795,594.98, with a gearing ratio of 41.98%. On June 16, 2023, the rating agency China
Lianhe Credit Rating Co., Ltd. issued the 2023 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, 2023
Prepared by: Proya Cosmetics Co., Ltd.
Unit: Yuan Currency: RMB
Item Notes June 30, 2023 December 31, 2022
Current assets:
Monetary capital VII. 1 3,960,227,111.24 3,161,003,085.05
Provision for settlement
Loans to banks and other
financial institutions
Financial assets held for
trading
Derivative financial assets
Notes receivable
Accounts receivable VII. 5 125,495,812.05 102,157,898.41
Receivables financing VII. 6 1,350,925.86
Prepayments VII. 7 91,897,478.31 91,483,523.15
Premiums receivable
Reinsurance accounts
receivable
Provision for reinsurance
contract receivable
Other receivables VII. 8 10,143,560.07 73,564,083.63
Including: Interest receivable
Dividend receivable
Financial assets purchased
under resale agreements
Inventory VII. 9 730,021,306.83 669,051,326.73
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Contract assets
Assets held for sale
Non-current assets due within
one year
Other current assets VII. 13 48,455,696.25 49,735,996.57
Total current assets 4,967,591,890.61 4,146,995,913.54
Non-current assets:
Loans and advances to
customers
Debt investments
Other debt investments
Long-term receivables
Long-term equity VII. 17 132,943,560.14 138,533,377.46
investments
Investments in other equity VII. 18 146,402,400.00 146,402,400.00
instruments
Other non-current financial
assets
Investment property VII. 20 66,302,354.38 68,654,700.81
Fixed assets VII. 21 559,647,512.15 570,376,309.67
Construction in progress VII. 22 267,796,910.29 207,378,935.86
Productive biological assets
Oil and gas assets
Right-of-use assets VII. 25 15,947,216.77 6,410,634.25
Intangible assets VII. 26 411,690,785.95 420,316,883.26
Development expenditure
Goodwill
Long-term deferred expenses VII. 29 17,277,098.40 19,142,604.46
Deferred tax assets VII. 30 67,181,222.24 48,305,338.82
Other non-current assets VII. 31 16,869,569.52 5,554,726.06
Total non-current assets 1,702,058,629.84 1,631,075,910.65
Total assets 6,669,650,520.45 5,778,071,824.19
Current liabilities:
Short-term borrowings VII. 32 200,155,555.56 200,195,890.41
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Semi-Annual Report 2023
Loans from the central bank
Loans from banks and other
financial institutions
Financial liabilities held for
trading
Derivative financial liabilities
Notes payable VII. 35 56,801,810.60 69,626,352.12
Accounts payable VII. 36 1,063,096,364.64 475,427,484.23
Receipts in advance VII. 37 351,138.49 464,328.26
Contract liabilities VII. 38 213,456,941.60 174,602,833.91
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 79,784,211.66 124,938,749.36
Taxes payable VII. 40 167,087,805.43 152,918,871.45
Other payables VII. 41 211,974,456.13 216,392,183.41
Including: Interest payable
Dividends payable
Fees and commissions
payable
Reinsurance accounts
payable
Held-for-sale liabilities
Non-current liabilities due VII. 43 3,864,732.04 2,549,452.14
within one year
Other current liabilities VII. 44 12,821,142.71 10,820,499.59
Total current liabilities 2,009,394,158.86 1,427,936,644.88
Non-current liabilities:
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Semi-Annual Report 2023
Insurance contract reserves
Long-term borrowings
Bonds payable VII. 46 740,666,717.66 724,491,557.93
Including: Preference shares
Perpetual bonds
Lease liabilities VII. 47 11,281,561.28 3,718,119.41
Long-term payables
Long-term employee benefits
payable
Estimated liabilities VII. 50 9,143,868.44 59,282,928.68
Deferred income VII. 51 5,360,266.33 6,399,811.33
Deferred tax liabilities VII. 30 23,949,022.41 19,019,431.67
Other non-current liabilities
Total non-current 790,401,436.12 812,911,849.02
liabilities
Total liabilities 2,799,795,594.98 2,240,848,493.90
Owner’s equity (or shareholders’ equity):
Paid-in capital (or share VII. 53 396,928,515.00 283,519,469.00
capital)
Other equity instruments VII. 54 50,895,410.14 50,903,510.12
Including: Preference shares
Perpetual bonds
Capital reserve VII. 55 851,451,398.25 914,815,786.22
Less: Treasury shares VII. 56 163,149,000.00 164,976,000.00
Other comprehensive income VII. 57 -648,969.71 -1,918,603.07
Special reserve
Surplus reserve VII. 59 141,759,734.50 141,759,734.50
General risk reserve
Undistributed profit VII. 60 2,553,216,065.97 2,300,384,763.19
Total owner’s equity (or 3,830,453,154.15 3,524,488,659.96
shareholders’ equity)
attributable to the parent
company
Minority interests 39,401,771.32 12,734,670.33
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Semi-Annual Report 2023
Total owner’s equity (or 3,869,854,925.47 3,537,223,330.29
shareholders’ equity)
Total liabilities and 6,669,650,520.45 5,778,071,824.19
owners’ equity (or
shareholders’ equity)
The chairman of the Company: HOU Juncheng CFO of the Company: WANG Li
Head of Accounting Department: WANG Li
Parent Company’s Balance Sheet
June 30, 2023
Prepared by: Proya Cosmetics Co., Ltd.
Unit: Yuan Currency: RMB
Item Notes June 30, 2023 December 31, 2022
Current assets:
Monetary capital 2,818,164,027.86 2,169,179,716.12
Financial assets held for
trading
Derivative financial assets
Notes receivable
Accounts receivable XVII. 1 353,922,507.08 289,883,063.24
Receivables financing
Prepayments 103,156,688.46 34,908,418.05
Other receivables XVII. 2 137,185,024.99 141,574,549.59
Including: Interest receivable
Dividend receivable
Inventory 398,433,957.16 458,341,886.37
Contract assets
Assets held for sale
Non-current assets due within
one year
Other current assets 38,520,431.16 32,667,616.71
Total current assets 3,849,382,636.71 3,126,555,250.08
Non-current assets:
Debt investments
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Semi-Annual Report 2023
Other debt investments
Long-term receivables
Long-term equity XVII. 3 417,241,390.52 394,321,950.41
investments
Investments in other equity 110,580,000.00 110,580,000.00
instruments
Other non-current financial
assets
Investment property 341,242,193.53 348,408,309.83
Fixed assets 271,178,537.15 278,011,361.35
Construction in progress 267,252,826.91 206,756,324.14
Productive biological assets
Oil and gas assets
Right-of-use assets 15,250,672.29 5,707,540.03
Intangible assets 376,044,847.80 382,584,698.57
Development expenditure
Goodwill
Long-term deferred expenses 13,530,516.04 13,494,337.73
Deferred tax assets 16,895,311.59 11,372,733.52
Other non-current assets 17,092,588.91 4,916,417.58
Total non-current assets 1,846,308,884.74 1,756,153,673.16
Total assets 5,695,691,521.45 4,882,708,923.24
Current liabilities:
Short-term borrowings 200,155,555.56 200,195,890.41
Financial liabilities held for
trading
Derivative financial liabilities
Notes payable 56,801,810.60 69,626,352.12
Accounts payable 610,338,918.25 217,330,371.42
Receipts in advance
Contract liabilities 360,346,848.33 68,099,041.17
Employee benefits payable 44,344,709.28 58,246,111.22
Taxes payable 62,211,979.04 69,952,710.78
Other payables 168,532,109.47 167,125,433.78
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Semi-Annual Report 2023
Including: Interest payable
Dividends payable
Held-for-sale liabilities
Non-current liabilities due 3,390,001.54 2,210,449.03
within one year
Other current liabilities
Total current liabilities 1,506,121,932.07 852,786,359.93
Non-current liabilities:
Long-term borrowings
Bonds payable 740,666,717.66 724,491,557.93
Including: Preference shares
Perpetual bonds
Lease liabilities 11,288,783.54 3,354,028.30
Long-term payables
Long-term employee benefits
payable
Estimated liabilities
Deferred income 5,360,266.33 6,399,811.33
Deferred tax liabilities 22,661,366.04 18,758,960.23
Other non-current liabilities
Total non-current 779,977,133.57 753,004,357.79
liabilities
Total liabilities 2,286,099,065.64 1,605,790,717.72
Owner’s equity (or shareholders’ equity):
Paid-in capital (or share 396,928,515.00 283,519,469.00
capital)
Other equity instruments 50,895,410.14 50,903,510.12
Including: Preference shares
Perpetual bonds
Capital reserve 901,272,578.97 964,613,342.84
Less: Treasury shares 163,149,000.00 164,976,000.00
Other comprehensive income
Special reserve
Surplus reserve 141,759,734.50 141,759,734.50
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Semi-Annual Report 2023
Undistributed profit 2,081,885,217.20 2,001,098,149.06
Total owner’s equity (or 3,409,592,455.81 3,276,918,205.52
shareholders’ equity)
Total liabilities and 5,695,691,521.45 4,882,708,923.24
owners’ equity (or
shareholders’ equity)
The chairman of the Company: HOU Juncheng CFO of the Company: WANG Li
Head of Accounting Department: WANG Li
Consolidated Income Statement
January to June 2023
Unit: Yuan Currency: RMB
Item Notes H1 2023 H1 2022
I. Gross revenue 3,626,991,878.22 2,625,943,244.29
Including: Operating revenue VII. 61 3,626,991,878.22 2,625,943,244.29
Interest income
Premiums earned
Fees and commission income
II. Total operating costs 2,941,251,103.74 2,152,787,578.39
Including: Operating costs VII. 61 1,069,489,813.93 837,034,743.80
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 38,469,557.75 25,429,112.04
Selling expenses VII. 63 1,579,997,275.26 1,116,921,650.63
General and administrative VII. 64 192,127,158.56 127,140,154.83
expenses
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R&D expenses VII. 65 91,520,865.15 61,066,694.07
Financial expenses VII. 66 -30,353,566.91 -14,804,776.98
Including: Interest expenses 5,817,515.18 6,535,131.18
Interest income 34,019,097.62 24,330,282.91
Add: Other income VII. 67 35,532,621.58 20,627,971.50
Investment income (“-” for VII. 68 -1,164,626.88 -3,658,316.04
losses)
Including: Income from -1,831,700.47 -3,658,316.04
investment in 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 losses)
Income from changes in fair
value (“-” for losses)
Credit impairment losses (“-” VII. 71 6,753,856.82 875,552.05
for losses)
Asset impairment losses (“-” VII. 72 -52,178,199.75 -89,555,181.24
for losses)
Gains from disposal of assets VII. 73 -217,694.21
(“-” for losses)
III. Operating profit (“-” for losses) 674,466,732.04 401,445,692.17
Add: Non-operating revenue VII. 74 1,359,664.17 308,882.06
Less: Non-operating expenses VII. 75 2,913,343.62 550,781.27
IV. Total profit (“-” for total losses) 672,913,052.59 401,203,792.96
Less: Income tax expenses VII. 76 144,644,731.37 92,647,427.04
V. Net profit (“-” for net losses) 528,268,321.22 308,556,365.92
(I) Categorized by the nature of continuing operations
1. Net profit from continuing 528,268,321.22 308,556,365.92
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Semi-Annual Report 2023
operations (“-” for net losses)
2. Net profit from discontinuing
operations (“-” for net losses)
(II) Classification by ownership
1. Net profit attributable to 499,493,997.71 296,939,515.54
shareholders of the parent company
(“-” for net losses)
2. Minority interest income (“-” 28,774,323.51 11,616,850.38
for net losses)
VI. Other comprehensive income, net 1,269,633.36 -249,117.09
of tax
(I) Other comprehensive income 1,269,633.36 -249,117.09
(net of tax) attributable to owners of
the parent company
1. Other comprehensive income
that cannot be reclassified into 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 instruments
(4) Changes in the fair value of the
Company’s own credit risks
2. Other comprehensive income 1,269,633.36 -249,117.09
to 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
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reclassified into other comprehensive
income
(4) Credit impairment provisions of
other debt investments
(5) Cash flow hedging reserve
(6) Conversion differences of financial 1,269,633.36 -249,117.09
statements denominated in foreign
currencies
(7) Others
(II) Other comprehensive income
(net of tax) attributable to minority
shareholders
VII. Total comprehensive income 529,537,954.58 308,307,248.83
(I) Total comprehensive income 500,763,631.07 296,690,398.45
attributable to owners of the parent
company
(II) Total comprehensive income 28,774,323.51 11,616,850.38
attributable to minority shareholders
VIII. Earnings per share:
(I) Basic earnings per share 1.25 1.06
(RMB/share)
(II) Diluted earnings per share 1.24 1.04
(RMB/share)
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: HOU Juncheng CFO of the Company: WANG Li
Head of Accounting Department: WANG Li
Parent Company’s Income Statement
January to June 2023
Unit: Yuan Currency: RMB
Item Notes H1 2023 H1 2022
I. Operating Revenue XVII. 4 1,730,545,125.09 1,338,618,165.34
Less: Operating costs XVII. 4 823,776,575.95 616,362,778.04
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Taxes and surcharges 15,808,311.59 10,380,101.33
Selling expenses 265,242,258.63 213,869,474.60
General and administrative 137,869,495.89 98,835,341.03
expenses
R&D expenses 88,272,258.48 62,747,420.22
Financial expenses -29,081,987.57 -18,381,341.10
Including: Interest expenses 79,333.44 6,439,386.65
Interest income 1,254.56 19,969,174.65
Add: Other income 4,808,666.20 14,152,667.95
Investment income (“-” for XVII. 5 -4,145,129.34 -3,474,371.02
losses)
Including: Income from -1,600,000.00 -3,474,371.02
investment in associates and joint
ventures
Gains from
derecognition of financial assets
measured at amortized cost (“-” for
losses)
Net exposure hedging gains
(“-” for losses)
Income from changes in fair
value (“-” for losses)
Credit impairment losses (“-” 10,624,149.77 61,920,164.56
for losses)
Asset impairment losses (“-” -50,071,970.30 -78,282,507.05
for losses)
Gains from disposal of assets 30,842.94
(“-” for losses)
II. Operating profit (“-” for losses) 389,904,771.39 349,120,345.66
Add: Non-operating revenue 189,623.01 6,939.37
Less: Non-operating expenses 1,904,339.55 34,601.49
III. Total profit (“-” for total losses) 388,190,054.85 349,092,683.54
Less: Income tax expenses 60,740,291.78 54,384,602.86
IV. Net profit (“-” for net losses) 327,449,763.07 294,708,080.68
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(I) Net profit from continuing 327,449,763.07 294,708,080.68
operations (“-” for net losses)
(II) Net profit from discontinuing
operations (“-” for net losses)
V. Other comprehensive income, net of
tax
(I) Other comprehensive income
that cannot be reclassified into 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
(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
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statements
7. Others
VI. Total comprehensive income 327,449,763.07 294,708,080.68
VII. Earnings per share:
(I) Basic earnings per share
(RMB/share)
(II) Diluted earnings per share
(RMB/share)
The chairman of the Company: HOU Juncheng CFO of the Company: WANG Li
Head of Accounting Department: WANG Li
Consolidated Cash Flow Statement
January to June 2023
Unit: Yuan Currency: RMB
Item Notes H1 2023 H1 2022
I. Cash flows from operating activities:
Cash receipts from sales of 4,012,341,644.34 2,996,503,490.56
goods and 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
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institutions
Net increase in repurchase
business capital
Net cash receipts from
securities trading agency services
Tax refund receipts 1,438,462.09
Other cash receipts relating to VII. 78 (1) 139,316,229.94 64,342,142.15
operating activities
Subtotal of cash inflows from 4,151,657,874.28 3,062,284,094.80
operating activities
Cash payments for goods and 799,703,317.01 775,028,311.27
services
Net increase in customer loans
and advances
Net increase in deposits with
the central bank and other banks
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 338,318,620.54 263,654,300.60
of employees
Payments of various types of 462,196,371.81 315,679,187.15
taxes
Other cash payments relating to VII. 78 (2) 994,140,165.40
1,370,171,492.89
operating activities
Subtotal of cash outflows 2,348,501,964.42
2,970,389,802.25
from operating activities
Net cash flows from 1,181,268,072.03 713,782,130.38
operating activities
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II. Cash flows from investing activities:
Cash receipts from returns on
investments
Cash receipts from investments
338,439.51
income
Net cash receipts from disposal
of fixed assets, intangible assets 3,018,142.61
and other long-term assets
Net cash receipts from disposal
of subsidiaries and other business
units
Other cash receipts relating to
investing activities
Subtotal of cash inflows from 3,356,582.12
investing activities
Cash payments for purchase 99,314,112.66 72,466,047.18
and construction of fixed assets,
intangible assets and other
long-term assets
Cash payments for investments 6,818,181.82 104,185,427.27
Net increase in pledged loans
Net cash payments for
acquisition of subsidiaries and
other business units
Other cash payments relating to
investing activities
Subtotal of cash outflows 106,132,294.48 176,651,474.45
from investing activities
Net cash flows from -102,775,712.36 -176,651,474.45
investing activities
III. Cash flows from financing activities:
Cash receipts from capital 700,000.00
contributions
Including: Cash receipts by 700,000.00
subsidiaries from minority
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Semi-Annual Report 2023
shareholders’ investment
Cash receipts from borrowings 100,000,000.00 200,000,000.00
Other cash receipts relating to
financing activities
Subtotal of cash inflows from 100,000,000.00 200,700,000.00
financing activities
Cash payments for debt 100,000,000.00 200,000,000.00
repayment
Cash payments for distribution 249,213,328.27 176,619,542.24
of dividends, profits or payment
of interest expenses
Including: Dividends and
profits paid by subsidiaries to
minority shareholders
Other cash payments relating to VII. 78 (6) 3,017,591.46 45,000,000.00
financing activities
Subtotal of cash outflows 352,230,919.73 421,619,542.24
from financing activities
Net cash flows from -252,230,919.73 -220,919,542.24
financing activities
IV. Effect of changes in foreign 1,269,633.36 -249,117.09
exchange rates on cash and cash
equivalents
V. Net increase in cash and cash 827,531,073.30 315,961,996.60
equivalents
Add: Opening balance of cash 3,125,333,085.05 2,378,334,768.09
and cash equivalents
VI. Closing balance of cash and 3,952,864,158.35 2,694,296,764.69
cash equivalents
The chairman of the Company: HOU Juncheng CFO of the Company: WANG Li
Head of Accounting Department: WANG Li
Parent Company’s Cash Flow Statement
January to June 2023
Unit: Yuan Currency: RMB
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Semi-Annual Report 2023
Item Notes H1 2023 H1 2022
I. Cash flows from operating activities:
Cash receipts from sales of 2,184,341,066.74 1,560,499,082.76
goods and rendering of services
Tax refund receipts
Other cash receipts relating to 103,874,829.15 132,070,257.42
operating activities
Subtotal of cash inflows 2,288,215,895.89 1,692,569,340.18
from operating activities
Cash payments for goods and 559,795,926.80 589,859,418.74
services
Cash payments to and on 153,659,418.21 113,360,200.45
behalf of employees
Payments of various types of 200,776,457.67 160,233,972.59
taxes
Other cash payments relating 338,218,749.52 170,292,344.51
to operating activities
Subtotal of cash outflows 1,252,450,552.20 1,033,745,936.29
from operating activities
Net cash flows from operating 1,035,765,343.69 658,823,403.89
activities
II. Cash flows from investing activities:
Cash receipts from returns on 2,540,410.44
investments
Cash receipts from
investments income
Net cash receipts from disposal
of fixed assets, intangible assets
and other long-term assets
Net cash receipts from disposal
of subsidiaries and other business
units
Other cash receipts relating to
investing activities
Subtotal of cash inflows 2,540,410.44
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Semi-Annual Report 2023
from investing activities
Cash payments for purchase 96,289,876.84 71,839,761.78
and construction of fixed assets,
intangible assets and other
long-term assets
Cash payments for investments 11,318,181.82 150,335,427.27
Net cash payments for
acquisition of subsidiaries and
other business units
Other cash payments relating
to investing activities
Subtotal of cash outflows 107,608,058.66 222,175,189.05
from investing activities
Net cash flows from -105,067,648.22 -222,175,189.05
investing activities
III. Cash flows from financing activities:
Cash receipts from capital
contributions
Cash receipts from borrowings 100,000,000.00 200,000,000.00
Other cash receipts relating to
financing activities
Subtotal of cash inflows 100,000,000.00 200,000,000.00
from financing activities
Cash payments for debt 100,000,000.00 200,000,000.00
repayment
Cash payments for distribution 249,213,328.27 176,619,542.24
of dividends, profits or payment
of interest expenses
Other cash payments relating 2,500,055.46
to financing activities
Subtotal of cash outflows 351,713,383.73 376,619,542.24
from financing activities
Net cash flows from -251,713,383.73 -176,619,542.24
financing activities
IV. Effect of changes in foreign
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Semi-Annual Report 2023
exchange rates on cash and
cash equivalents
V. Net increase in cash and 678,984,311.74 260,028,672.60
cash equivalents
Add: Opening balance of cash 2,138,929,716.12 1,684,565,248.70
and cash equivalents
VI. Closing balance of cash and 2,817,914,027.86 1,944,593,921.30
cash equivalents
The chairman of the Company: HOU Juncheng CFO of the Company: WANG Li
Head of Accounting Department: WANG Li
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Semi-Annual Report 2023
Consolidated Statements of Changes in Owners’ Equity
January to June 2023
Unit: Yuan Currency: RMB
H1 2023
Equity attributable to owners of the parent company
Total equity
Item Minority
attributable to
Paid-in capital Other equity instruments Other General interests
Less: Treasury Special Undistributed owners
(or share Capital reserve comprehensive Surplus reserve risk Others Subtotal
Preference Perpetual shares reserve profit
capital) Others income reserve
shares bonds
I. Closing 283,519,469.00 50,903,510.12 914,815,786.22 164,976,000.00 -1,918,603.07 141,759,734.50 2,300,384,763.19 3,524,488,659.96 12,734,670.33 3,537,223,330.29
balance of the
previous year
Add: Changes
in accounting
policies
Correction for
previous errors
Business
combinations
under common
control
Others
II. Opening 283,519,469.00 50,903,510.12 914,815,786.22 164,976,000.00 -1,918,603.07 141,759,734.50 2,300,384,763.19 3,524,488,659.96 12,734,670.33 3,537,223,330.29
balance of the
current year
III. Movement 113,409,046.00 -8,099.98 -63,364,387.97 -1,827,000.00 1,269,633.36 252,831,302.78 305,964,494.19 26,667,100.99 332,631,595.18
for the current
period (“-” for
decrease)
(I) Total 1,269,633.36 499,493,997.71 500,763,631.07 28,774,323.51 529,537,954.58
comprehensive
income
(II) Owner’s 910.00 -8,099.98 50,088,937.85 -1,827,000.00 51,908,747.87 51,908,747.87
contribution
and capital
reduction
1. Ordinary -1,827,000.00 1,827,000.00 1,827,000.00
shares
contributed by
owners
2. Capital
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Semi-Annual Report 2023
contributions by
other equity
instrument
holders
3. Amount of 49,961,246.32 49,961,246.32 49,961,246.32
share-based
payments
credited to
owners’ equity
4. Others 910.00 -8,099.98 127,691.53 120,501.55 120,501.55
(III) Profit -246,662,694.93 -246,662,694.93 -246,662,694.93
distribution
1. Withdrawal
of surplus
reserve
2. Withdrawal
of general risk
provision
3. Distribution -246,662,694.93 -246,662,694.93 -246,662,694.93
to owners (or
shareholders)
4. Others
(IV) Internal 113,408,136.00 -113,408,136.00
transfer within
owners’ equity
1. Transfer of 113,408,136.00 -113,408,136.00
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
scheme carried
forward to
retained
earnings
5. Transfer of
other
comprehensive
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Semi-Annual Report 2023
income to
retained
earnings
6. Others
(V) Special
reserve
1. Withdrawal
for the current
period
2. Utilization
for the current
period
(VI) Others -45,189.82 -45,189.82 -2,107,222.52 -2,152,412.34
IV. Closing 396,928,515.00 50,895,410.14 851,451,398.25 163,149,000.00 -648,969.71 141,759,734.50 2,553,216,065.97 3,830,453,154.15 39,401,771.32 3,869,854,925.47
balance of the
current period
H1 2022
Equity attributable to owners of the parent company
Total equity
Item Minority
Other equity instruments Less: Other General attributable to
Paid-in capital Special Undistributed interests
Capital reserve Treasury comprehensive Surplus reserve risk Others Subtotal owners
(or share capital) Preference Perpetual reserve profit
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 year
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
for the current
period (“-” for
decrease)
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Semi-Annual Report 2023
(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 and
capital
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
provision
3. Distribution -172,868,570.76 -172,868,570.76 -172,868,570.76
to owners (or
shareholders)
4. Others
(IV) Internal 80,403,986.00 -127,601,370.95 -5,628,128.21 -41,569,256.74 -126,713.88 -41,695,970.62
transfer 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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Semi-Annual Report 2023
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 -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 current
period
2. Utilization
for the current
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
The chairman of the Company: HOU Juncheng CFO of the Company: WANG Li Head of Accounting Department: WANG Li
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Semi-Annual Report 2023
Statement of Changes in Owners’ Equity of the Parent Company
January to June 2023
Unit: Yuan Currency: RMB
H1 2023
Paid-in capital Other equity instruments Other Total equity
Item Less: Treasury Special Undistributed
(or share Preference Perpetual Capital reserve comprehensive Surplus reserve attributable to
Others shares reserve profit
capital) shares bonds income owners
I. Closing balance of the previous 283,519,469.00 50,903,510.12 964,613,342.84 164,976,000.00 141,759,734.50 2,001,098,149.06 3,276,918,205.52
year
Add: Changes in accounting
policies
Correction for previous
errors
Others
II. Opening balance of the current 283,519,469.00 50,903,510.12 964,613,342.84 164,976,000.00 141,759,734.50 2,001,098,149.06 3,276,918,205.52
year
III. Movement for the current 113,409,046.00 -8,099.98 -63,340,763.87 -1,827,000.00 80,787,068.14 132,674,250.29
period (“-” for decrease)
(I) Total comprehensive income 327,449,763.07 327,449,763.07
(II) Owner’s contribution and 910.00 -8,099.98 50,088,937.85 -1,827,000.00 51,908,747.87
capital reduction
1. Ordinary shares contributed by -1,827,000.00 1,827,000.00
owners
2. Capital contributions by other
equity instrument holders
3. Amount of share-based 49,961,246.32 49,961,246.32
payments credited to owners’
equity
4. Others 910.00 -8,099.98 127,691.53 120,501.55
(III) Profit distribution -246,662,694.93 -246,662,694.93
1. Withdrawal of surplus reserve
2. Distribution to owners (or -246,662,694.93 -246,662,694.93
shareholders)
3. Others
(IV) Internal transfer within 113,408,136.00 -113,408,136.00
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Semi-Annual Report 2023
owners’ equity
1. Transfer of capital reserve to 113,408,136.00 -113,408,136.00
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 current
period
2. Utilization for the current
period
(VI) Others -21,565.72 -21,565.72
IV. Closing balance of the current 396,928,515.00 50,895,410.14 901,272,578.97 163,149,000.00 141,759,734.50 2,081,885,217.20 3,409,592,455.81
period
H1 2022
Paid-in capital Other equity instruments Other Total equity
Item Less: Treasury Special Undistributed
(or share Preference Perpetual Capital reserve comprehensive Surplus reserve attributable to
Others shares reserve profit
capital) shares bonds income owners
I. Closing balance of the previous 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
year
Add: Changes in accounting
policies
Correction for previous
errors
Others
II. Opening balance of the current 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
year
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III. Movement for the current 80,406,194.00 -21,217.44 -80,657,556.72 -5,628,128.21 121,839,509.92 127,195,057.97
period (“-” for decrease)
(I) Total comprehensive income 294,708,080.68 294,708,080.68
(II) Owner’s contribution and 2,208.00 -21,217.44 302,521.21 283,511.77
capital reduction
1. Ordinary 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
(III) Profit distribution -172,868,570.76 -172,868,570.76
1. Withdrawal of surplus reserve
2. Distribution to owners (or
-172,868,570.76 -172,868,570.76
shareholders)
3. Others
(IV) Internal transfer within 80,403,986.00 -80,403,986.00
owners’ equity
1. Transfer of capital reserve to 80,403,986.00 -80,403,986.00
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 current
period
2. Utilization for the current
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period
(VI) Others -556,091.93 -5,628,128.21 5,072,036.28
IV. Closing balance of the current 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
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 the “Company” or this “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 is located in
Hangzhou, Zhejiang province. The Company now holds the business license with the unified social
credit code of 91330100789665033F. The current registered capital is RMB283,513,952.00, and paid-in
capital is RMB396,928,515.00. (The paid-in capital is RMB113,414,563.00 more than the registered
capital, which is due to the fact that the change in industrial and commercial registration have not been
completed in the shares conversion from capital reserve and convertible bonds.) And the total number of
shares is 396,928,515 shares (par value of RMB1 per share). Among these shares, there are 2,940,000 A
shares with restrictions in circulation, and 393,988,515 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. The Company is 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 13th meeting of the third session
of the Board of Directors on August 28, 2023.
2. Scope of consolidated financial statements
√ Applicable □ Not applicable
The Company has incorporated 44 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 a 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
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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 Company and its domestic subsidiaries use RMB as their recording currency. Hapsode Co., Ltd.,
Hanna Cosmetics Co., Ltd., Japan OR and other overseas subsidiaries choose the currency in the main
economic environment where they operate as their recording currency.
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 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 final 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, the 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 proportion of the net
identifiable assets acquired from the acquiree in the merger on the acquisition date, the measurement of
the acquired fair value of the acquiree’s identifiable assets, liabilities or contingent liabilities, as well as
the cost of merger shall be rechecked. If the cost of the merger remains lower than the fair value
proportion of the net identifiable assets acquired from the acquiree in the merger after the recheck, the
difference shall be included in the current profit or loss.
6. Preparation of consolidated financial statements
√ Applicable □ Not applicable
1. The parent company incorporates all subsidiaries under its control into consolidation scope of the
consolidated financial statements. The consolidated financial statements are based on the financial
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statements of the parent company and its subsidiaries, and prepared by the parent company in
accordance with the Accounting Standards for Business Enterprises No.33 - Consolidated Financial
Statements, based on other relevant information.
2. Accounting treatment methods for buying and then selling, or selling and then buying the equity of
the same subsidiary in two consecutive fiscal years: the acquisition of the equity of the acquiree is 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 is included in the consolidation scope of the
consolidated financial statements. Due to changes in the Company’s business plan arrangements, etc., if
the equity of the acquiree is disposed of in the second fiscal year to the point of losing control over it, it
will be excluded from the consolidation scope of the consolidated financial statements when the control
is lost.
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 (generally the expiration is within three
months from the date of purchase) 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 the 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
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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
rates of the spot rates on the transaction dates. Any balance 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.
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3) Equity 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 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: loss provisions determined according to regulations on impairment of financial
instruments; 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:
The contract right to collect cash flow from the financial assets has been terminated;
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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.
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
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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
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
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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
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 on a portfolio basis and expected credit loss
measured under three-stage model
Item Basis for determining the Method for measurement of expected credit
portfolio loss
Calculating the expected credit loss by the
default risk exposure and the expected credit
Other receivables - aging loss rate in the next 12 months or in the whole
Account age
portfolio duration by referring to 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 under simplified measurement
approach and on a portfolio basis
1) Portfolio details and method for measurement of expected credit loss
Item Basis for determining the Method for measurement of expected credit loss
portfolio
Calculating the expected credit loss by the
default risk exposure and the expected credit
Receivables financing - bank loss rate in the whole duration by referring to
Note type
acceptance note historical experience 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 loss rate
Accounts receivable - aging
Account age in the whole duration by referring to historical
portfolio
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
Account age
Expected credit loss rate (%)
Within 1 year (inclusive, same for below) 5
1-2 years 30
2-3 years 50
Above 3 years 100
6. Offset of financial assets and financial liabilities
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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 the 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
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
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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
1. Joint control or significant influence criterion
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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 items belong to 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
items belong to 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
is determined based on the Accounting Standards for Business Enterprises No.7 - Exchange of
Non-monetary Assets.
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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 losing of control upon disposal of investment to subsidiaries through multiple
transactions
(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 losing 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 Residual Annual
Category
depreciation depreciation (year) value rate depreciation rate
Property and
Straight-line method 10 or 30 5% 9.50% or 3.17%
buildings
General equipment Straight-line method 3-10 5% 9.50% or 3.17%
Dedicated equipment Straight-line method 5-10 5% 19.00% -9.50%
Transportation
Straight-line method 5 5% 19.00%
vehicles
(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
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)
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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
Refer to “42. Lease” in “V. Significant Accounting Policies and Accounting Estimates” of “Section X
Financial Report” of this report for details.
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:
Useful lives of
Item
amortization (year)
Land use rights 40 or 50
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Non-patented technology 5
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 are transferred into the current
profit or loss.
32. Contract liabilities
Recognition method of contract liabilities
√ Applicable □ Not applicable
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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
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.
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(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
Refer to “42. Lease” in “V. Significant Accounting Policies and Accounting Estimates” of “Section X
Financial Report” of this report for details.
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 is 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.
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;
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if the reliable measurement of the fair value of other parties’ services is impossible, but that of the equity
instruments is possible, they 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. Preference shares, perpetual bonds and other financial instruments
√ Applicable □ Not applicable
According to the relevant standards for financial instruments and the Regulations on Relevant
Accounting Treatment of Perpetual Bonds (Ministry of Finance [2019] No. 2), 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
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
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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, they will be deemed to be 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.
(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
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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 policies 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 stocks, 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.
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
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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 be incurred 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 clear 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.
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
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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
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 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 is conclusive evidence
proving that it is very likely to obtain sufficient taxable income in future periods to deduct the deductible
temporary differences, the deferred tax assets not recognized yet in previous accounting periods shall be
recognized.
3. If the carrying value of the deferred 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 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 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) transactions 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.
(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
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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 financing 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) Financing lease
On the start date of the lease term, the Company recognizes the financing 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
implicit in lease), and derecognizes financing 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.
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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
(2). Changes in significant accounting estimates
□ Applicable √ Not applicable
(3). Adjustments to financial statements at the beginning of the year upon the first adoption of
new accounting standards or interpretation of standards from 2023
□ 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
The output tax is calculated on the basis of
the income from sales of products and
taxable income from rendering of services
calculated according to the provisions of
Value added tax (“VAT”) 13%, 9%, 6%, 1%
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.
Consumption tax Taxable sales (volume) 15%
In the case of ad valorem taxation, it is
calculated and paid as per 1.2% of the
remaining value after 30% of the original
Property tax value of the property is deducted in a lump 12%, 1.2%
sum; in the case of taxation according to a
lease, it is calculated and paid as per 12%
of the rental income.
Urban maintenance and
Actual turnover tax paid 7%, 5%
construction tax
Education surcharge Actual turnover tax paid 3%
Surcharge for local education Actual turnover tax paid 2%
Enterprise income tax Taxable income [Note]
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[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. 5
Xuzhou Laibo Information Technology Co., Ltd. 5
Hangzhou Boxin Trading Co., Ltd. 5
Danyang Hapsode Cosmetics Trading Co., Ltd. 5
Hangzhou Weiluoke Cosmetics Co., Ltd. 5
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
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 from 2020 to 2022. The Company is applying for a review of its qualification as a high-tech
enterprise in 2023. The Company will be temporarily subject to the enterprise income tax at the
preferential rate of 15% in 2023.
According to the relevant provisions of the Announcement of Preferential Income Tax Policies for Small
and Micro Enterprises and Individual Industrial and Commercial Households (Announcement No. 6 of
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the Ministry of Finance and the State Taxation Administration in 2023), from January 1, 2023 to
December 31, 2024, small and micro enterprises would 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 annual taxable
income not exceeding RMB1 million. According to the relevant provisions of the Announcement of the
Ministry of Finance and the State Taxation Administration 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), from January 1, 2022 to December 31, 2024, small and
micro enterprises would 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 annual taxable income exceeding RMB1 million
but not exceeding RMB3 million. Huzhou Niuke Technology Co., Ltd., Xuzhou Laibo Information
Technology Co., Ltd., Hangzhou Boxin Trading Co., Ltd., Danyang Hapsode Cosmetics Trading Co.,
Ltd., and Hangzhou Weiluoke Cosmetics Co., Ltd., subsidiaries of the Company, comply with the
criteria for tax payment of small and micro enterprises, and will pay the enterprise income tax as per the
tax rate of 5% in 2023.
According to the provisions of Article 3 (2) of the Announcement of the Ministry of Finance and the
State Taxation Administration on Defining Policies for Reducing and Exempting VAT for Small-scale
VAT Taxpayers (Announcement No. 1 of the Ministry of Finance and the State Taxation Administration
in 2023), for taxpayers engaged in consumer-oriented service industries, the input tax deductible in the
current period plus 10% would be used for deducting the tax payable from January 1, 2023 to December
31, 2023. Taxpayers engaged in consumer-oriented service industries refer to taxpayers whose sales
from providing consumer-oriented service account for more than 50% of the total sales. Hangzhou Proya
Commercial Management Co., Ltd., a subsidiary of the Company, complies with the conditions for
general taxpayers 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 January 1, 2023 to December
31, 2023.
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
Item Closing balance Opening balance
Cash on hand 21,976.11 20,176.08
Cash at bank 3,933,070,722.34 3,078,501,723.18
Other monetary capital 27,134,412.79 82,481,185.79
Total 3,960,227,111.24 3,161,003,085.05
Of which: Total cash deposited
92,213,212.06 73,162,153.00
outside China
Deposits with Finance Company
Other description:
At the end of the period, the scope of restricted use covered the margin for fixed-term deposits of
transformers of RMB250,000.00 in bank deposits, as well as ETC vehicle deposit of RMB70,000.00,
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Pinduoduo deposit of RMB5,000,000.00 and Tmall and Alipay deposits of RMB2,042,952.89 in other
monetary capital.
At the beginning of the period, the scope of restricted use covered fixed-term deposits of
RMB30,000,000.00 in bank deposits, the margin for fixed-term deposits of transformers of
RMB250,000.00, as well as the 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 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
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
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Within 1 year 128,845,808.66
Sub-total within 1 year 128,845,808.66
1-2 years 1,922,881.09
2-3 years 4,561,375.07
Above 3 years 14,031,186.12
3-4 years
4-5 years
Above 5 years
Total 149,361,250.94
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(2). Disclosed by method of provision for bad debts
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Closing balance Opening balance
Category Book balance Provision for bad debts Book balance Provision for bad debts
Carrying value Carrying value
Percentage Provision Percentage Provision
Amount Amount Amount Amount
(%) ratio (%) (%) ratio (%)
Provision 13,180,540.21 8.82 13,180,540.21 100.00 13,574,973.09 10.79 13,574,973.09 100.00
for bad
debts by
item
Including:
Provision 136,180,710.73 91.18 10,684,898.68 7.85 125,495,812.05 112,285,497.89 89.21 10,127,599.48 9.02 102,157,898.41
for bad
debts by
portfolio
Including:
Aging 136,180,710.73 91.18 10,684,898.68 7.85 125,495,812.05 112,285,497.89 89.21 10,127,599.48 9.02 102,157,898.41
portfolio
Total 149,361,250.94 / 23,865,438.89 / 125,495,812.05 125,860,470.98 / 23,702,572.57 / 102,157,898.41
Provision for bad debts by item:
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Closing balance
Name Provision for bad Provision ratio
Book balance Reason for accrual
debts (%)
Provision for bad Expected as unable
13,180,540.21 13,180,540.21 100.00
debts by item to recover
Total 13,180,540.21 13,180,540.21 100.00 /
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 136,180,710.73 10,684,898.68 7.85
Total 136,180,710.73 10,684,898.68 7.85
Recognition standard and explanation of provision for bad debts made by portfolio:
√ Applicable □ Not applicable
Account age Closing amount
Book balance Provision for bad debts Provision ratio (%)
Within 1 year 128,845,808.66 6,470,977.58 5.00
1-2 years 1,922,881.09 576,864.32 30.00
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2-3 years 3,549,928.39 1,774,964.19 50.00
Above 3 years 1,862,092.59 1,862,092.59 100.00
Subtotal 136,180,710.73 10,684,898.68 7.85
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
written-back write-off
Provision for
bad debts by 13,574,973.09 102,076.15 421,794.92 74,714.11 13,180,540.21
item
Provision for
bad debts by 10,127,599.48 692,047.70 53,023.83 81,724.67 10,684,898.68
portfolio
Total 23,702,572.57 794,123.85 421,794.92 127,737.94 81,724.67 23,865,438.89
The other decrease of RMB81,724.67 in the provision for bad debts by portfolio in the current period is
the disposal of the equity of Hangzhou Xiake Bar Catering Management Co., Ltd. (hereinafter referred
to as “Hangzhou Xiake Bar Company”) and Hangzhou Tiedingxian Catering Management Co., Ltd.
(hereinafter referred to as “Hangzhou Tiedingxian Company”), and the bad debt provision for account
receivables is transferred out accordingly.
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
Unit: Yuan Currency: RMB
Item Written off amount
Accounts receivable actually written off 127,737.94
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 ending balances collected by debtor
√ Applicable □ Not applicable
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Unit: Yuan Currency: RMB
Proportion of total
Closing balance
balance of accounts
Company name Closing balance of bad debt
receivable at the end of
provision
the period (%)
Beijing Jingdong Century Trading
76,260,712.77 51.06 3,813,035.64
Co., Ltd.
Vipshop (China) Co., Ltd. 30,824,131.18 20.64 1,541,206.56
Zhejiang Haochao Network
9,014,731.83 6.04 450,736.59
Technology Co., Ltd.
Hangzhou Zhishang Technology Co.,
2,630,324.26 1.76 131,516.21
Ltd.
Hangzhou Fahema Import & Export
2,079,936.42 1.39 1,039,968.21
Trading Co., Ltd.
Total 120,809,836.46 80.89 6,976,463.21
(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
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Bank acceptance notes 1,350,925.86
Total 1,350,925.86
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
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Item Recognized amount terminated at the end of the period
Bank acceptance notes 1,950,000.00
Subtotal 1,950,000.00
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 88,967,528.26 96.80 88,898,806.55 97.18
1-2 years 2,201,962.94 2.40 1,696,085.16 1.85
2-3 years 501,729.07 0.55 829,263.44 0.91
Above 3 years 226,258.04 0.25 59,368.00 0.06
Total 91,897,478.31 100.00 91,483,523.15 100.00
Explanation of reasons why prepayments with more than 1 year’s age and significant amount are not
settled in time:
There are no significant unsettled prepayments with an age of more than 1 year at the end of the period.
(2). Prepayments of the top five closing balances collected by prepaid objects
√ Applicable □ Not applicable
Proportion of total ending
Company name Closing balance
balance of prepayment (%)
Shanghai Vision Star Media Co., Ltd. 12,588,511.07 13.70
Zhejiang Alibaba Communication
17,772,204.46 19.34
Technology Co., Ltd.
Guangxi Jingdong Qingchuan
14,548,908.42 15.83
E-commerce Co., Ltd.
Wuhan Juliang Xingtu Technology
11,957,774.42 13.01
Co., Ltd.
Shanghai Zhuiji Information
7,757,929.91 8.44
Technology Co., Ltd.
Total 64,625,328.28 70.32
Other description
□ Applicable √ Not applicable
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8. Other receivables
List by item
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Interest receivable
Dividend receivable
Other receivables 10,143,560.07 73,564,083.63
Total 10,143,560.07 73,564,083.63
Other description:
□ Applicable √ Not applicable
Interest receivable
(1). Classification of interest receivable
□ 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
(1). Dividend receivable
□ Applicable √ Not applicable
(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
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Within 1 year 9,913,470.33
Sub-total within 1 year 9,913,470.33
1-2 years 220,303.21
2-3 years 27,552,437.52
Above 3 years 5,534,893.76
3-4 years
4-5 years
Above 5 years
Total 43,221,104.82
(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 7,582,210.19 22,781,728.37
Suspense payment receivables 29,137,807.19 90,500,345.08
Reserve funds 652,910.33 552,985.89
Others 5,848,177.11 325,990.72
Total 43,221,104.82 114,161,050.06
(6). Provision for bad debts
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
First stage Second stage Third stage
Expected credit Expected credit loss
Provision for bad Expected credit loss for the entire for the entire
Total
debts loss over the duration (credit duration (credit
next 12 months impairment not impairment
occurred) occurred)
Balance as at
3,293,145.99 4,430,510.11 32,873,310.33 40,596,966.43
January 1, 2023
Balance as at
January 1, 2023 is
in the current
period
-Transferred to the
-11,015.16 11,015.16
second stage
-Transferred to the
-342,930.62 342,930.62
third stage
-Written-back to
the second stage
-Written-back to
the first stage
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Accrual in the
-2,733,212.85 -4,032,503.69 -360,469.21 -7,126,185.75
current period
Written-back in
the current period
Written-off in the
current period
Charge off in the
-2,000.00 -339,991.49 -341,991.49
current period
Other changes -51,244.44 -51,244.44
Balance as at June
495,673.54 66,090.96 32,515,780.25 33,077,544.75
30, 2023
[Note]: Other changes are the disposal of the equity of Hangzhou Xiake Bar Company and Hangzhou
Tiedingxian Company, and the bad debt provision for other receivables is transferred out accordingly.
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
Among them, significant amount of bad-debt provision written-back or withdrawn in the current period:
□ Applicable √ Not applicable
(8). Other receivables actually write-off in the current period
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Written off amount
Other receivables actually written off 341,991.49
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 of
Provision for bad
Nature of Closing total closing
Company name Account age debts
payment balance balance in other
Closing balance
receivables (%)
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EURL Suspense 18,356,261.04 2-3 years 42.47 18,356,261.04
PHARMATICA payment
receivables
SIKEROM Suspense 8,053,074.41 2-3 years 18.63 8,053,074.41
EURPOE payment
GMBH receivables
Hangzhou Security 4,708,614.72 Above 3 10.89 4,708,614.72
Property deposits years
Maintenance
Fund
Management
Center
Hangzhou Others 3,000,000.00 Within 1 year 6.94 150,000.00
Xiake Bar
Catering
Management
Co., Ltd.
Zhejiang Security 878,000.00 Within 1 year 2.03 43,900.00
Qiaoxing deposits
Construction
Group Co., Ltd.
Total / 34,995,950.17 / 80.96 31,311,850.17
(10). Receivables involving government grants
□ 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
Item Closing balance Opening balance
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Inventory falling Inventory falling
price price
reserves/Provision Carrying reserves/Provision Carrying
Book balance Book balance
for impairment of amount for impairment of amount
contract contract
performance cost performance cost
Raw materials 54,807,838.48 1,813,163.07 52,994,675.41 80,114,114.87 1,703,611.59 78,410,503.28
Packaging 44,645,222.82 7,002,690.94 37,642,531.88 42,300,426.18 1,016,137.11 41,284,289.07
Goods in process 11,545,472.56 467,206.41 11,078,266.15 18,952,830.41 134,093.52 18,818,736.89
Outsourcing gifts 13,357,978.64 495,569.76 12,862,408.88 12,011,197.41 65,685.51 11,945,511.90
Inventory
659,726,539.17 59,489,358.74 600,237,180.43 546,279,426.61 37,780,598.48 508,498,828.13
commodities
Low value
15,802,217.22 595,973.14 15,206,244.08 10,474,077.34 380,619.88 10,093,457.46
consumables
Total 799,885,268.89 69,863,962.06 730,021,306.83 710,132,072.82 41,080,746.09 669,051,326.73
(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 Written-back balance
Accrual Others Others
or charge-off
Raw
1,703,611.59 1,975,674.67 1,866,123.19 1,813,163.07
materials
Packaging 1,016,137.11 7,159,582.19 1,173,028.36 7,002,690.94
Goods in
134,093.52 341,646.02 8,533.13 467,206.41
process
Outsourcing
65,685.51 498,298.20 68,413.95 495,569.76
gifts
Inventory
37,780,598.48 30,983,450.13 9,274,689.87 59,489,358.74
commodities
Low value
380,619.88 643,249.87 427,896.61 595,973.14
consumables
Total 41,080,746.09 41,601,901.08 12,818,685.11 69,863,962.06
(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 the 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 carrying amount 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 2,193,531.03 8,782,156.33
Advance payment of taxes 174,948.49 4,009,626.89
Input VAT to be deducted 46,087,216.73 36,944,213.35
Total 48,455,696.25 49,735,996.57
Other description:
None
14. Debt investments
(1). Description of debt investments
□ Applicable √ Not applicable
(2). Significant debt investments at the end of the period
□ Applicable √ Not applicable
(3). Impairment provision accrual
□ Applicable √ Not applicable
15. Other debt investments
(1). Description of other debt investments
□ Applicable √ Not applicable
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(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
17. Long-term equity investments
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Changes in the current period
Recognized Declared Closing
Other Other
Opening investment payment Closing balance of
Invested entity Additional Investment comprehensive changes Provision for
balance gains and of cash Others balance impairment
investment decrease income in impairment
losses under dividends provision
adjustments equity
equity method or profits
I. Joint Venture
Huzhou Panrui 3,068,948.16 -2,049.38 3,066,898.78
Industry
Investment
Partnership
(Limited
Partnership)
Subtotal 3,068,948.16 -2,049.38 3,066,898.78
II. Affiliated enterprises
Xiongke 2,649,619.70 -14,687.84 2,634,931.86
Culture Media
(Hangzhou)
Co., Ltd.
Metis Info 6,066,423.66 -231,700.47 5,834,723.19
Tech
(Guangzhou)
Co., Ltd.
Jiaxing 111,253,221.93 6,818,181.82 -1,546,592.11 116,524,811.64
Woyong
Investment
Partnership
(Limited
Partnership)
Zhuhai 10,576,298.67 10,576,298.67 92,018,511.89
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Healthlong
Biotechnology
Co., Ltd.
Beijing Xiushi 4,918,865.34 -36,670.67 4,882,194.67
Culture
Development
Co., Ltd.
Subtotal 135,464,429.30 6,818,181.82 -1,829,651.09 10,576,298.67 129,876,661.36 92,018,511.89
Total 138,533,377.46 6,818,181.82 -1,831,700.47 10,576,298.67 132,943,560.14 92,018,511.89
Other description
None
18. Investments in other equity instruments
(1). Description of investments in other equity instruments
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Hangzhou Regenovo Biotechnology., Ltd. 20,580,000.00 20,580,000.00
LIPOTRUE,S.L. 35,822,400.00 35,822,400.00
Golong Holdings Co., Ltd. [Note] 90,000,000.00 90,000,000.00
Total 146,402,400.00 146,402,400.00
[Note] Hangzhou Golong Holdings Co. Ltd. changed its name to Golong Holdings Co. Ltd. in April
2023
(2). Description of non-transactional equity instrument investments
□ Applicable √ Not applicable
Other description:
√ Applicable □ Not applicable
Based on the purpose of strategic investment, the Company makes external equity investment, and the
investee regards the acquired investment of the Company as an equity instrument. Therefore, the
Company designates this part of the equity instrument investment as a financial asset measured at fair
value through other comprehensive income.
19. Other non-current financial assets
□ Applicable √ Not applicable
20. Investment property
Measurement mode of investment property
(1). Investment property adopting cost measurement model
Unit: Yuan Currency: RMB
Property and Construction in
Item Land use rights Total
buildings progress
I. Original book value
1. Opening balance 78,781,143.26 78,781,143.26
2. Amount increased in the
current period
132 / 210
Semi-Annual Report 2023
(1) Outsourcing
(2) Transfer-in of
inventory\fixed
assets\construction in process
(3) Increase in enterprise
mergers
3. Amount decreased in
the current period
(1) Disposal
(2) Others transferred out
4. Closing balance 78,781,143.26 78,781,143.26
II. Accumulated depreciation and accumulated amortization
1. Opening balance 10,126,442.45 10,126,442.45
2. Amount increased in
2,352,346.43 2,352,346.43
the current period
(1) Provision or
2,352,346.43 2,352,346.43
amortization
3. Amount decreased in
the current period
(1) Disposal
(2) Others transferred out
4. Closing balance 12,478,788.88 12,478,788.88
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
66,302,354.38 66,302,354.38
end of the period
2. Carrying amount at the
68,654,700.81 68,654,700.81
beginning of the period
(2). Investment property with pending proprietorship certificate:
□ Applicable √ Not applicable
Other description
□ Applicable √ Not applicable
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21. Fixed assets
List by item
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Fixed assets 559,647,512.15 570,376,309.67
Disposal of fixed assets
Total 559,647,512.15 570,376,309.67
Other description:
None
Fixed assets
(1). Description of fixed assets
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Property and General Dedicated Means of
Item Total
buildings equipment equipment transportation
I. Original book value:
1. Opening balance 539,295,502.97 80,477,003.52 249,649,332.67 20,584,593.97 890,006,433.12
2. Amount increased
413,512.99 9,426,908.46 2,899,075.10 5,081,088.53 17,820,585.08
in the current period
(1) Purchase 13,054.27 4,664,817.63 1,927,676.85 4,585,867.27 11,191,416.02
(2) Transfer from
400,458.72 4,762,090.83 971,398.25 495,221.26 6,629,169.06
construction in progress
(3) Increase in
enterprise mergers
3. Amount
decreased in the current 3,921,197.11 132,339.00 391,990.86 4,445,526.97
period
(1) Disposal or
666,818.52 132,339.00 391,990.86 1,191,148.38
scrapping
(2) Other
3,254,378.59 3,254,378.59
decreases [Note]
4. Closing balance 539,709,015.96 85,982,714.86 252,416,068.77 25,273,691.64 903,381,491.23
II. Accumulated depreciation
1. Opening balance 127,549,692.50 41,778,273.42 133,987,291.36 16,314,866.18 319,630,123.45
2. Amount increased
8,475,679.88 4,885,069.48 10,435,898.86 1,535,456.31 25,332,104.53
in the current period
(1) Provision 8,475,679.88 4,885,069.48 10,435,898.86 1,535,456.31 25,332,104.53
3. Amount
decreased in the current 815,098.38 40,759.20 372,391.32 1,228,248.90
period
(1) Disposal or
633,477.57 40,759.20 372,391.32 1,046,628.09
scrapping
134 / 210
Semi-Annual Report 2023
(2) Other 181,620.81 181,620.81
decreases [Note]
4. Closing balance 136,025,372.38 45,848,244.51 144,382,431.02 17,477,931.17 343,733,979.08
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
403,683,643.58 40,134,470.35 108,033,637.75 7,795,760.47 559,647,512.15
at the end of the period
2. Carrying amount
at the beginning of the 411,745,810.47 38,698,730.10 115,662,041.31 4,269,727.79 570,376,309.67
period
[Note] Other decreases of the original value of fixed assets of RMB3,254,378.59 and other decreases of
accumulated depreciation of RMB181,620.81 are due to the disposal of the equity of Hangzhou Xiake
Bar Company and Hangzhou Tiedingxian Company, and the original value of fixed assets and
accumulated depreciation are transferred out accordingly.
(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
135 / 210
Semi-Annual Report 2023
Item Closing balance Opening balance
Construction in progress 267,796,910.29 207,378,935.86
Project goods and material
Total 267,796,910.29 207,378,935.86
Other description:
None
Construction in progress
(1). Description of construction in progress
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Closing balance Opening balance
Item Provision for Provision for
Book balance Carrying amount Book balance Carrying amount
impairment impairment
Huzhou
Production Base
158,595,879.28 158,595,879.28 141,886,053.44 141,886,053.44
Expansion
Project (Phase I)
Longwu R&D
Center
75,707,305.82 75,707,305.82 34,804,789.71 34,804,789.71
Construction
Project
Decoration
4,198,401.85 4,198,401.85 5,282,700.29 5,282,700.29
Engineering
Information
System Upgrade 6,224,928.29 6,224,928.29 4,266,606.14 4,266,606.14
Project
Make-up
14,406,085.10 14,406,085.10 14,323,636.47 14,323,636.47
Factory
Other sporadic
8,664,309.95 8,664,309.95 6,815,149.81 6,815,149.81
projects
Total 267,796,910.29 267,796,910.29 207,378,935.86 207,378,935.86
(2). Changes of items under important construction in progress in the current period
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Including:
Amount
Proportion Amount of
transferred
Amount Other of interest Interest
Accumulated
Opening increased to fixed decreased Closing accumulated capitalizat
Item Budget Progress amount of capitalizatio ion rate in Source
in the amount in project
balance assets in balance of project interest of fund
current the current investment n in the the current
capitalization
period the current period to budget period (%)
(%) current
period
period
Huzhou RMB416.7 141,886,0 18,509,560. 1,799,734.4 158,595,8 41.27 41.27% 16,252,002.95 5,860,615.41 4.57 Raised
Production 833 53.44 32 8 79.28 funds
Base million and
Expansion owned
Project funds
(Phase I)
136 / 210
Semi-Annual Report 2023
Longwu RMB128.6 34,804,78 41,830,834. 928,318.61 75,707,30 59.59 58.05% 10,645,888.94 3,757,557.59 4.57 Raised
R&D Center 113 9.71 72 5.82 funds
Construction million and
Project owned
funds
Information RMB112.3 4,266,606. 2,170,839.5 212,517.41 6,224,928. 5.73 5.16% 3,921,244.04 1,285,201.46 4.57 Raised
System 95 million 14 6 29 funds
Upgrade and
Project owned
funds
Make-up RMB66.11 14,323,63 2,147,325.4 2,064,876.8 14,406,08 93.95 98.79%
Factory million 6.47 9 6 5.10
RMB723.8 195,281,0 64,658,560. 5,005,447.3 254,934,1 / / 30,819,135.93 10,903,374.4 / /
Total 996 85.76 09 6 98.49 6
million
(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
Unit: Yuan Currency: RMB
Item Property and buildings Total
I. Original book value
1. Opening balance 7,481,934.15 7,481,934.15
2. Amount increased in the current period 12,032,718.40 12,032,718.40
1) Lease-in 12,032,718.40 12,032,718.40
3. Amount decreased in the current period
4. Closing balance 19,514,652.55 19,514,652.55
II. Accumulated depreciation
1. Opening balance 1,071,299.90 1,071,299.90
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Semi-Annual Report 2023
2. Amount increased in the current period 2,496,135.88 2,496,135.88
(1) Provision 2,496,135.88 2,496,135.88
3. Amount decreased in the current period
(1) Disposal
4. Closing balance 3,567,435.78 3,567,435.78
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 the end of the period 15,947,216.77 15,947,216.77
2. Carrying amount at the beginning of the 6,410,634.25 6,410,634.25
period
Other description:
None
26. Intangible assets
(1). Description of intangible assets
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Customer
Office Patent Non-patented Trademark
Item Land use rights resources Total
software rights technology rights
I. Original book value
1. Opening 472,400,130.10 24,280,278.43 475,089.70 563,293.07 12,833,684.00 39,897,000.00 550,449,475.30
balance
2. 385,431.92 385,431.92
Amount
increased in
the current
period
(1) 246,983.64 246,983.64
Purchase
(2)
Internal
R&D
(3)
Increases in
business
mergers
(4) 138,448.28 138,448.28
Transfer
from
construction
in progress
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Semi-Annual Report 2023
3. Amount 4,000.00 4,000.00
decreased
in the
current
period
(1)
Disposal
(2) 4,000.00 4,000.00
Other
decreases
[Note]
4. Closing 472,400,130.10 24,665,710.35 475,089.70 563,293.07 12,833,684.00 39,893,000.00 550,830,907.22
balance
II. Accumulated amortization
1. 92,279,870.46 21,721,920.25 430,621.47 539,820.37 12,819,610.79 2,340,748.70 130,132,592.04
Opening
balance
2. 6,007,884.87 999,112.64 3,144.66 2,995.40 1,995,091.66 9,008,229.23
Amount
increased in
the current
period
(1) 6,007,884.87 999,112.64 3,144.66 2,995.40 1,995,091.66 9,008,229.23
Provision
3. 700.00 700.00
Amount
decreased
in the
current
period
(1)
Disposal
(2) 700.00 700.00
Other
decreases
[Note]
4. 98,287,755.33 22,721,032.89 433,766.13 539,820.37 12,822,606.19 4,335,140.36 139,140,121.27
Closing
balance
III. Provision for impairment
1.
Opening
balance
2.
Amount
increased in
the current
period
(1)
Provision
3.
Amount
139 / 210
Semi-Annual Report 2023
decreased
in the
current
period
(1)
Disposal
4.
Closing
balance
IV. Carrying amount
1. Carrying 374,112,374.77 1,944,677.46 41,323.57 23,472.70 11,077.81 35,557,859.64 411,690,785.95
amount at
the end of
the period
2. Carrying 380,120,259.64 2,558,358.18 44,468.23 23,472.70 14,073.21 37,556,251.30 420,316,883.26
amount at
the
beginning
of the
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%.
(2). The land use right without the property ownership certificate
□ Applicable √ Not applicable
Other description:
□ Applicable √ Not applicable
27. Development expenditure
□ 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
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(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
Item increased in the amount in the decreased Closing balance
balance
current period current period amount
Renovation
19,109,585.61 5,392,301.77 6,361,736.13 879,562.23 17,260,589.02
costs
Software
33,018.85 16,509.47 16,509.38
service fee
Total 19,142,604.46 5,392,301.77 6,378,245.60 879,562.23 17,277,098.40
Other description:
None
30. Deferred tax assets/deferred tax liabilities
(1). Deferred 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
73,222,637.62 18,305,659.40 42,025,801.32 10,506,450.33
internal transactions
Deductible loss
Government grants related
5,360,266.33 804,039.95 6,399,811.33 959,971.70
to assets
Unused membership credits 89,939,268.13 22,484,817.04 83,272,601.46 20,818,150.36
Anticipated return losses 4,541,544.49 1,135,386.13 4,541,544.48 1,135,386.12
Lease charges 449,832.92 67,474.94
Advertising fees and
3,258,145.25 814,536.31 3,258,145.25 814,536.31
business promotion fees
Provisions for bad debts of
15,372,900.91 3,843,194.22 14,181,029.90 3,545,098.74
accounts receivable
Provision for obsolete
56,141,300.99 9,042,822.05 24,366,081.72 4,518,122.80
inventory
Impact of share-based 56,996,057.82 10,695,362.68 31,280,678.91 5,940,147.52
141 / 210
Semi-Annual Report 2023
payments
Total 304,832,121.54 67,125,817.78 209,775,527.29 48,305,338.82
(2). Deferred 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 debt investments
Changes in the fair value of
other investments in equity
instrument
One-time deduction for
156,226,399.14 23,949,022.41 126,101,620.56 19,019,431.67
depreciation of fixed assets
Total 156,226,399.14 23,949,022.41 126,101,620.56 19,019,431.67
(3). Deferred tax assets or liabilities listed in net amount after offset
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Offset amount of
Offset amount of Closing balance Opening balance
deferred tax
deferred tax of deferred tax of deferred tax
assets and
Item assets and assets and assets and
liabilities at the
liabilities at the liabilities after liabilities after
beginning of the
end of the period offsetting offsetting
period
Deferred tax assets 2,263,290.36 55,404.46
Deferred tax liabilities
(4). Details of unrecognized deferred tax assets
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Deductible temporary difference 152,450,062.18 218,452,946.39
Deductible loss 415,477,977.81 393,391,257.51
Total 567,928,039.99 611,844,203.90
142 / 210
Semi-Annual Report 2023
(5). The deductible loss of unrecognized deferred tax assets will expire in the following years
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Year Closing amount Opening amount Remarks
2023 35,615,368.24 44,562,908.90
2024 72,738,168.38 89,520,734.89
2025 62,952,836.45 66,686,117.23
2026 59,479,346.58 63,349,129.45
2027 127,093,665.49 129,272,367.04
2028 57,598,592.67
Total 415,477,977.81 393,391,257.51 /
Other description:
□ Applicable √ Not applicable
31. Other non-current assets
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Closing balance Opening balance
Provision Provision
Item Carrying Book Carrying
Book balance for for
amount balance amount
impairment impairment
Contract
acquisition
cost
Contract
performance
cost
Return cost
receivable
Contract
assets
Other
long-term 7,598,619.42 7,598,619.42 5,554,726.06 5,554,726.06
assets
Prepaid for
long-term
asset 9,270,950.10 9,270,950.10
purchase
funds
Total 16,869,569.52 16,869,569.52 5,554,726.06 5,554,726.06
Other description:
None
143 / 210
Semi-Annual Report 2023
32. Short-term 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 200,155,555.56 200,195,890.41
Total 200,155,555.56 200,195,890.41
Explanation on classification of short-term borrowings:
None
(2). Overdue and outstanding short-term borrowings
□ Applicable √ Not applicable
Other description:
□ Applicable √ Not applicable
33. Financial liabilities held for trading
□ Applicable √ Not applicable
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 56,801,810.60 69,626,352.12
Total 56,801,810.60 69,626,352.12
The total amount of outstanding notes payable due at the end of the current period is RMB0.00.
36. Accounts payable
(1). List by accounts payable
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Payment for goods 762,167,654.73 252,113,782.78
Expenses payable 237,660,741.42 213,566,905.71
Payment for engineering equipment 63,267,968.49 9,746,795.74
Total 1,063,096,364.64 475,427,484.23
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(2). Significant accounts payable with an aging of more than one year
□ Applicable √ Not applicable
Other description:
□ Applicable √ Not applicable
37. Receipts in advance
(1). List by advance accounts
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Rents receivable in advance 351,138.49 464,328.26
Total 351,138.49 464,328.26
(2). Significant advance accounts with an aging of more than one year
□ Applicable √ Not applicable
Other description:
□ Applicable √ Not applicable
38. Contract liabilities
(1). Description of contract liabilities
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Advance payment 114,487,238.02 83,234,612.24
Unused membership credits 98,969,703.58 91,368,221.67
Total 213,456,941.60 174,602,833.91
(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 benefits payable
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Increase in the Decrease in the
Item Opening balance Closing balance
current period current period
I. Short-term
124,278,743.01 317,385,935.24 362,687,803.57 78,976,874.68
compensation
II. Post-employment 660,006.35 10,486,485.34 10,339,154.71 807,336.98
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benefits - defined
contribution plans
III. Dismissal benefit
IV. Other benefits
due within one year
Total 124,938,749.36 327,872,420.58 373,026,958.28 79,784,211.66
(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,
123,139,326.87 291,380,593.72 336,258,851.51 78,261,069.08
allowances and subsidies
II. Welfare expenses of
9,797,429.34 9,790,737.78 6,691.56
employees
III. Social insurance
764,855.85 7,100,941.70 7,265,605.80 600,191.75
premium
Including: Medical
747,556.58 6,648,544.12 6,824,569.83 571,530.87
insurance premium
Industrial injury
13,253.30 434,070.11 419,238.79 28,084.62
insurance premium
Maternity insurance
4,045.97 18,327.47 21,797.18 576.26
premium
IV. Housing provident fund 374,560.29 7,599,205.80 7,864,843.80 108,922.29
V. Trade union fund and
1,507,764.68 1,507,764.68
staff education fund
VI. Short-term compensated
absences
VII. Short-term profit
sharing plan
Total 124,278,743.01 317,385,935.24 362,687,803.57 78,976,874.68
(3). List by defined contribution plan
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Opening Increase in the Decrease in the Closing
Item
balance current period current period balance
1. Basic endowment insurance 637,429.90 10,122,170.53 9,979,916.89 779,683.54
2. Unemployment insurance
22,576.45 364,314.81 359,237.82 27,653.44
expense
3. Enterprise annuity payment
Total 660,006.35 10,486,485.34 10,339,154.71 807,336.98
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Other description:
□ Applicable √ Not applicable
40. Taxes payable
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Enterprise income tax 95,000,869.96 111,162,751.37
Value added tax 56,320,974.02 27,112,038.46
Property tax 2,855,180.41 6,689,657.49
Withholding of personal income tax 1,497,040.34 4,226,657.07
Urban maintenance and construction tax 6,697,207.17 1,288,999.75
Surtax for education expenses 2,609,649.12 1,003,854.07
Stamp tax 349,503.93 796,591.64
Surcharge for local education 1,739,766.08 619,094.66
Disabled security fund 17,614.40 19,226.94
Total 167,087,805.43 152,918,871.45
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 211,974,456.13 216,392,183.41
Total 211,974,456.13 216,392,183.41
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
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Item Closing balance Opening balance
Security deposits 41,089,622.51 46,394,144.19
Restricted stock repurchase obligations 163,149,000.00 164,976,000.00
Others 7,735,833.62 5,022,039.22
Total 211,974,456.13 216,392,183.41
(2). Significant other payables with an aging of more than one year
□ Applicable √ Not applicable
Other description:
□ Applicable √ Not applicable
42. Held-for-sale liabilities
□ Applicable √ Not applicable
43. Non-current liabilities due within one year
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Long-term borrowings due within one year
Bonds payable due within one year
Long-term payables due within one year
Lease liabilities due within one year 3,864,732.04 2,549,452.14
Total 3,864,732.04 2,549,452.14
Other description:
None
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 12,821,142.71 10,820,499.59
Total 12,821,142.71 10,820,499.59
Changes in short-term bonds payable:
□ Applicable √ Not applicable
Other description:
□ Applicable √ Not applicable
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45. Long-term borrowings
(1). Classification of long-term borrowings
□ 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 740,666,717.66 724,491,557.93
Total 740,666,717.66 724,491,557.93
(2). Changes of bonds payable (excluding other financial instruments such as preference shares
and perpetual bonds classified as financial liabilities)
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Interest Repayment
Issuance in Premium or Effect of
Face Issuance Bond Issuance Opening accrued in the Closing
Bond name the current discount share
value date period amount balance by face current balance
period amortization conversion
value period
Proya 100.0 December 6 years 751,713,0 724,491,5 1,862,600 14,136,701.91 175,857.80 740,66
convertible 0 8, 2021 00.00 57.93 .02 6,717.6
bond 6
Total / / / 751,713,0 724,491,5 1,862,600 14,136,701.91 175,857.80 740,66
00.00 57.93 .02 6,717.6
6
(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 date is the anniversary of the date of initial offering of
convertible bonds. The Company will, no later than five trading days after the interest payment date 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 outstanding 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
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initial conversion price shall be RMB195.98 per share, not 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-rights 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-rights 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 upward.
In 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 convertible bond was adjusted to RMB139.37 per share from RMB195.98 per share, which took
effect since May 30, 2022 (the ex-dividend date).
In September 2022, the Company completed the registration of the Restricted Shares granted under the
2022 Restricted Stock Incentive 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 convertible bond was adjusted
to RMB138.92 per share from RMB139.37 per share, which took effect since September 9, 2022.
In May 2023, the Company completed the 2022 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 convertible bond was adjusted to RMB98.61 per share from RMB138.92 per share, which took
effect since May 29, 2023 (the ex-dividend date).
In 2022, there were 7,760 shares converted from convertible corporate bonds, the share capital increased
by RMB5,517.00, capital reserves (equity premium) increased by RMB754,813.50, and other equity
instruments reduced by RMB53,111.99.
During the current period, there were 1,270 shares converted from convertible corporate bonds, the share
capital increased by RMB910.00, capital reserves (equity premium) increased by RMB127,691.53, and
other equity instruments decreased by RMB8,099.98.
(4). Explanation on other financial instruments classified as financial liabilities
Basic information of other financial instruments such as preference shares and perpetual bonds that are
outstanding at the end of the period
□ Applicable √ Not applicable
Statement of changes in financial instruments such as preference shares and perpetual bonds that are
outstanding 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
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Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Operating leases payable 12,673,933.97 3,814,629.83
Unrecognized financing expense -1,392,372.69 -96,510.42
Total 11,281,561.28 3,718,119.41
Other description:
None
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
Restructuring obligation
Loss-making contract to be
performed
Estimated future
Return payment payable 59,282,928.68 9,143,868.44
potential return losses
Others
Total 59,282,928.68 9,143,868.44 /
Other explanations, including key assumptions and estimates concerning estimated significant liabilities:
None
51. Deferred income
Information of deferred income
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
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Decrease in
Opening Increase in the Closing Cause of
Item the current
balance current period balance formation
period
Government Funded by the
6,399,811.33 1,039,545.00 5,360,266.33
grants government
Total 6,399,811.33 1,039,545.00 5,360,266.33 /
Items involving government grants:
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount Amount
Amount
of new included in
included in
Liability Opening subsidies non-operating Other Closing Asset-related/
other income
item balance in the revenue of changes balance income-related
in the current
current the current
period
period period
Subsidies
for
modified 6,399,811.33 1,039,545.00 5,360,266.33 Asset-related
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 Items in the
Consolidated Financial Statements”, “Section X Financial Report”.
52. Other non-current liabilities
□ Applicable √ Not applicable
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53. Share capital
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Increase or decrease in the change (+, -)
Shares
Issuance
Opening converted Closing
of new Bonus
balance from capital Others Subtotal balance
shares shares
reserve
Total
283,519,469 113,408,136 910 113,409,046 396,928,515
shares
Other description:
(1) Changes in equity
Shares converted from capital reserve increased by 113,408,136 shares, which was decided at the 11th
meeting of the third session of the Board of Directors of the Company held in 2023 and 2022 Annual
General Meeting, based on the total share capital of 283,520,339 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 RMB113,408,136.
Other shares increased by 910 shares, which was due to the conversion of convertible corporate bonds of
the Company totaled 1,270 shares in the current period. After the conversion, the share capital increased
by RMB910.00.
(2) Description of share freezing
Name of Number of shareholding Frozen shares
Type of freezing
shareholder (shares) (shares)
FANG Yuyou 59,625,258 17,041,269 Judicial freezing
Subtotal 59,625,258 17,041,269
54. Other equity instruments
(1) Basic information of other financial instruments such as preference shares and perpetual
bonds that are outstanding at the end of the period
□ Applicable √ Not applicable
(2) Statement of changes in financial instruments such as preference shares and perpetual bonds
that are outstanding 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 7,509,370 50,903,510.12 1,270 8,099.98 7,508,100 50,895,410.14
bond
Total 7,509,370 50,903,510.12 1,270 8,099.98 7,508,100 50,895,410.14
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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
The decrease in the current period amounted to RMB8,099.98, which was due to 1,270 shares converted
from convertible corporate bonds. The share capital increased by RMB910.00, capital reserves (equity
premium) increased by RMB127,691.53, and other equity instruments decreased by RMB8,099.98.
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
858,188,638.87 127,691.53 113,408,136.00 744,908,194.40
(Equity premium)
Other capital
56,627,147.35 49,961,246.32 45,189.82 106,543,203.85
reserves
Total 914,815,786.22 50,088,937.85 113,453,325.82 851,451,398.25
Other explanations, including the increase and decrease in the current period and the explanation on the
reasons for the changes:
1) Increase/decrease in capital premium
The capital premium (equity premium) of the current period increased by RMB127,691.53, which was
due to the conversion of convertible corporate bonds in the current period. For details, please see the
particulars contained in “46. Bonds payable”, “VII. Notes to the Items of Consolidated Financial
Statements”, “Section X Financial Report”.
The capital premium (equity premium) of the current period decreased by RMB113,408,136.00, which
was due to the conversion of capital reserve into share capital of the Company. For details, please see the
particulars contained in “53. Share capital”, “VII. Notes to the Items of Consolidated Financial
Statements”, “Section X Financial Report”.
2) Increase/decrease in other capital reserves
Other capital reserves of the current period increased by RMB49,961,246.32, which was due to the
restricted stock incentives of RMB49,961,246.32 recognized under the Equity Incentive Plan and
calculated into other capital reserves;
Other capital reserves of the current period decreased by RMB45,189.82, which was due to the deferred
tax assets accrued for the part of restricted share incentives recognized after writing back amounts
deductible before tax for expected future periods and offsetting other capital reserves.
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56. Treasury stock
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Increase in the Decrease in the
Item Opening balance Closing balance
current period current period
Restricted shares
with repurchase 164,976,000.00 1,827,000.00 163,149,000.00
obligation
Total 164,976,000.00 1,827,000.00 163,149,000.00
Other explanations, including the increase and decrease in the current period and the explanation on the
reasons for the changes:
The treasury stock of the current period decreased by RMB1,827,000.00, which was due to treasury
stock offset by dividends distributed on unlocked 2,100,000 restricted shares and the corresponding
adjustment of other accounts payable.
57. Other comprehensive income
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount incurred in the current period
Less: Included Less: Included
in other in other
Amount
comprehensive comprehensive
incurred Less: Attributed to Attributed to
Opening income for the income for the Closing
Item before Income parent minority
balance previous period previous period balance
income tax in tax company shareholders
and transferred and transferred
the current expenses after tax after tax
in profit or loss in retained
period
for the current earnings for the
period current period
I. Other
comprehensive
income that
cannot be
reclassified into
profit or loss
Including:
Changes
arising from the
re-measuremen
t of defined
benefit plans
Other
comprehensive
income that
cannot be
reclassified into
profit or loss
under equity
method
Changes in
the fair value of
other
investments in
equity
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instrument
Changes in
fair value of the
Company's
own credit risks
II. Other
comprehensive
income to be -1,918,603.07 1,269,633.36 1,269,633.36 -648,969.71
reclassified into
profit or loss
Including:
Other
comprehensive
income that can
be converted
into profit or
loss under the
equity method
Changes in
the fair value of
other debt
investments
Amount of
financial assets
reclassified into
other
comprehensive
income
Credit
impairment
provisions for
other debt
investments
Cash flow
hedging reserve
Conversion
differences of
financial
statements -1,918,603.07 1,269,633.36 1,269,633.36 -648,969.71
denominated in
foreign
currencies
Total other
comprehensive -1,918,603.07 1,269,633.36 1,269,633.36 -648,969.71
income
Other explanations, including the adjustment of the effective part of cash flow hedging profit or loss into
the initially recognized amount of the hedged item:
None
58. Special reserve
□ Applicable √ Not applicable
59. Surplus reserve
√ Applicable □ Not applicable
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Unit: Yuan Currency: RMB
Item Opening balance Increase in the Decrease in the Closing balance
current period current period
Legal surplus 141,759,734.50 141,759,734.50
reserve
Discretionary
surplus reserve
Reserve fund
Enterprise
development fund
Others
Total 141,759,734.50 141,759,734.50
Explanation on surplus reserves, including the increase and decrease in the current period and the
explanation on the reasons for the changes:
None
60. Undistributed profit
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item In the current period Previous year
Undistributed profit at the end of the
2,300,384,763.19 1,696,978,064.52
previous period before adjustment
Total undistributed profit at the beginning
of the adjustment period (+ for increase, -
for decrease)
Unappropriated earnings at the beginning
2,300,384,763.19 1,696,978,064.52
of period after adjustment
Plus: Net profit attributable to the owner of
499,493,997.71 817,400,223.93
the parent company in the current period
Less: Withdrawal of statutory surplus
41,124,954.50
reserve
Withdrawal of any surplus reserves
Withdrawal of general risk provision
Dividends payable on common stock 246,662,694.93 172,868,570.76
Common stock dividends converted to
share capital
Undistributed profit at the end of the period 2,553,216,065.97 2,300,384,763.19
According to the Resolution of the 2022 Annual General Meeting of the Company, the Company
distributed cash dividend of RMB8.70 (tax inclusive) per 10 shares to all shareholders based on the total
share capital of 283,520,339 shares registered on the registration date of dividend-paying equity, totaling
RMB246,662,694.93 (tax inclusive).
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.
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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 revenue and operating cost
(1). Information of operating revenue 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 3,619,374,788.36 1,061,937,769.29 2,615,919,115.33 830,689,997.38
Other business 7,617,089.86 7,552,044.64 10,024,128.96 6,344,746.42
Total 3,626,991,878.22 1,069,489,813.93 2,625,943,244.29 837,034,743.80
(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:
1) For details on income breakdown by brand, please see the particulars contained in “6. Segment
information”, “XVI. Other Significant Matters”, “Section X Financial Report”.
2) 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 3,619,396,232.21 2,624,582,336.26
Income recognized within a period of time 7,595,646.01 1,360,908.03
Subtotal 3,626,991,878.22 2,625,943,244.29
62. Taxes and surcharges
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
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Amount incurred in the current Amount incurred in the previous
Item
period period
Consumption tax 184,238.97 10,616.45
Urban maintenance and
18,641,207.09 12,367,541.47
construction tax
Education surcharge 8,646,048.99 6,098,531.01
Surcharge for local education 5,764,032.69 4,065,687.34
Stamp tax 1,427,080.88 861,783.14
Property tax 3,793,909.73 2,020,782.23
Vehicle and vessel use tax 13,039.40 4,170.40
Total 38,469,557.75 25,429,112.04
Other description:
None
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 1,375,271,382.64 914,789,856.38
Employee remuneration 160,955,637.56 176,935,767.31
Office allowances 18,803,085.77 11,157,885.89
Travel expenses 6,410,208.59 5,239,809.36
Conference fees 4,299,563.82 1,369,251.43
Equity incentive expense for restricted shares 2,582,590.71
Survey consulting fees 6,319,252.31 3,284,713.25
Others 5,355,553.86 4,144,367.00
Total 1,579,997,275.26 1,116,921,650.63
Other description:
None
64. General and administrative expenses
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount incurred in the Amount incurred in the
Item
current period previous period
Employee remuneration and service fees 78,175,887.74 71,686,202.20
Office allowance and business entertainment
34,943,670.30 24,577,036.46
expenses
Expenses for depreciation, amortization and
21,646,521.25 21,559,690.88
leases
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Equity incentive expense for restricted
42,040,845.63
shares
Consultation and intermediary fees 6,340,974.78 5,676,074.62
Travel expense and conference fees 4,740,467.63 1,708,872.35
Others 4,238,791.23 1,932,278.31
Total 192,127,158.56 127,140,154.83
Other description:
None
65. R&D expenses
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount incurred in the Amount incurred in the
Item
current period previous period
Labor cost 36,691,200.82 30,174,033.12
Outsourced R&D expense 31,341,477.15 21,504,716.33
Direct input cost 8,855,671.21 6,836,001.15
Expenses for depreciation, amortization and leases 4,277,735.35 1,820,592.19
Equity incentive expense for restricted shares 5,337,809.98
Others 5,016,970.64 731,351.28
Total 91,520,865.15 61,066,694.07
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 income -34,019,097.62 -24,330,282.91
Interest expenses 5,817,515.18 6,535,131.18
Handling fees 317,082.93 286,819.54
Exchange gains and losses -2,469,067.40 2,703,555.21
Total -30,353,566.91 -14,804,776.98
Other description:
None
67. Other incomes
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
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Semi-Annual Report 2023
Amount incurred in the Amount incurred in the
Item
current period previous period
Government grants 34,639,076.23 20,440,098.37
Refund of service charges for withholding
680,352.10 523,373.72
personal income tax
Additional deduction of input VAT 213,193.25 -335,500.59
Total 35,532,621.58 20,627,971.50
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 Items of Consolidated Financial
Statements”, “Section X Financial Report”.
68. Investment income
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount incurred
Amount incurred in the
Item in the current
previous period
period
Long-term equity investment income measured by
-1,831,700.47 -3,658,316.04
equity method
Investment income from disposal of long-term
667,073.59
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 financial assets
held for trading
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 -1,164,626.88 -3,658,316.04
Other description:
None
69. Net exposure hedging gains
□ Applicable √ Not applicable
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70. Income from changes in fair value
□ Applicable √ Not applicable
71. Credit impairment losses
√ 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 -372,328.93 813,881.14
Bad debt loss on other receivables 7,126,185.75 61,670.91
Impairment losses of debt investment
Other impairment losses of debt investment
Bad debt loss on long-term receivables
Loss from impairment of contract assets
Total 6,753,856.82 875,552.05
Other description:
None
72. Assets impairment loss
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount incurred in the Amount incurred in the
Item
current period previous period
I. Loss on bad debts
II. Loss of inventory falling price and
-41,601,901.08 -63,474,565.18
impairment loss of contract performance cost
III. Impairment loss of long-term equity
-10,576,298.67 -26,080,616.06
investment
IV. Impairment loss of investment property
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 -52,178,199.75 -89,555,181.24
Other description:
162 / 210
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None
73. Income from disposal of assets
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount incurred in the current Amount incurred in the previous
Item
period period
Gains on disposal of fixed assets -217,694.21
Total -217,694.21
Other description:
□ Applicable √ Not applicable
74. Non-operating revenue
√ 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 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 grants
Amounts not required to be paid 819,297.29 819,297.29
Revenue from fines and
80,499.36 50,000.00 80,499.36
liquidated damages
Others 459,867.52 258,882.06 459,867.52
Total 1,359,664.17 308,882.06 1,359,664.17
Government grants included in current profits and losses
□ Applicable √ Not applicable
Other description:
□ Applicable √ Not applicable
75. Non-operating expenses
√ Applicable □ Not applicable
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Unit: Yuan Currency: RMB
Amount included in
Amount incurred in the Amount incurred in the
Item current non-recurring
current period previous 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
External donation 459,615.00 34,600.00 459,615.00
Late payment fees 2,347,897.07 2,347,897.07
Loss on retirement of
100,854.99 100,854.99
non-current assets
Others 4,976.56 516,181.27 4,976.56
Total 2,913,343.62 550,781.27 2,913,343.62
Other description:
None
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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 158,636,450.28 85,324,305.00
Deferred income tax expense -13,991,718.91 7,323,122.04
Total 144,644,731.37 92,647,427.04
(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 672,913,052.59
Income tax expense calculated at statutory/applicable
168,228,263.15
tax rate
Influence of different tax rates applied to subsidiaries -41,375,352.13
Influence of adjusting income tax in previous periods -1,045,113.54
Influence of non-taxable income
Influence of non-deductible costs, expenses and
2,874,985.49
losses
Influence of deductible loss of unrecognized deferred
-8,877,968.09
income tax assets in the previous period
Influence of deductible temporary differences or
deductible losses of unrecognized deferred income 31,792,050.31
tax assets in the current period
Additional deduction of R&D expenses -6,952,133.82
Income tax expense 144,644,731.37
Other description:
□ Applicable √ Not applicable
77. Other comprehensive income
√ Applicable □ Not applicable
For the details, please see the particulars contained in “57. Other comprehensive income”, “VII. Notes to
the Items of Consolidated Financial Statements”, “Section X Financial Report”.
78. Items in cash flow statement
(1). Other cash received relating to operating activities
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
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Item Amount incurred in the current Amount incurred in the
period previous period
Interest income from bank deposits 34,019,097.62 24,233,809.41
Government grants 33,499,531.23 19,400,553.37
Receivables, payables and others 71,797,601.09 20,707,779.37
Total 139,316,229.94 64,342,142.15
Explanation on other cash received relating to operating 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
Expenses paid in cash 1,352,917,250.79 969,394,367.73
Receivables, payables and others 17,254,242.10 24,745,797.67
Total 1,370,171,492.89 994,140,165.40
Explanation on other cash paid relating to operating activities:
None
(3). Other cash received relating to investing activities
□ Applicable √ Not applicable
(4). Other cash paid relating to investing activities
□ Applicable √ Not applicable
(5). Other cash received relating to financing activities
□ Applicable √ Not applicable
(6). Other cash paid relating to financing activities
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Amount incurred in the Amount incurred in the
current period previous period
Operating lease rentals paid 3,017,591.46
Amount for acquisition of minority equity 45,000,000.00
Total 3,017,591.46 45,000,000.00
Other cash paid relating to financing activities:
None
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79. Supplementary information to cash flow statement
(1) Supplementary information to cash flow statement
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount of the previous
Supplementary information Amount of the current period
period
1. Reconciliation of net profit to cash flows from operating activities:
Net profit 528,268,321.22 308,556,365.92
Add: Provision for impairment of 52,178,199.75 89,555,181.24
assets
Credit impairment losses -6,753,856.82 -875,552.05
Depreciation of fixed assets, depletion 25,408,239.42
of oil and gas assets and depreciation 17,248,552.10
of productive biological assets
Amortization of right-of-use assets 1,734,279.12
Amortization of intangible assets 9,008,229.23 8,420,860.43
Amortization of long-term deferred 6,398,143.87 8,386,299.09
expenses
Losses on disposal of fixed assets, 217,694.21
intangible assets and other long-term
assets (“-” for income)
Loss on retirement of fixed assets (“-” 100,854.99
for income)
Losses on changes in fair value (“-”
for income)
Financial expenses (“-” for income) 5,817,515.18 6,535,131.18
Investment loss (“-” for income) 1,164,626.88 3,658,316.04
Decrease in deferred tax assets (“-” for -18,921,309.65 7,323,122.04
increase)
Increase in deferred tax liabilities (“-” 4,929,590.74 -885,037.35
for decrease)
Decrease in inventory (“-” for -138,821,424.14
-102,571,881.18
increase)
Decrease of operating receivable items 42,008,373.99
69,128,299.79
(“-” for increase)
Increase in operational payables (“-” 354,512,254.57
563,359,566.28
for decrease)
Others 49,961,246.32
Net cash flows from operating 1,181,268,072.03 713,782,130.38
activities
2. Major investing and financing activities that do not involve cash receipts and payments:
Conversion of debt into capital
Convertible corporate bonds due
within one year
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Fixed assets under finance lease
3. Net changes in cash and cash equivalents:
Closing balance of cash 3,952,864,158.35 2,694,296,764.69
Less: Opening balance of cash 3,125,333,085.05 2,378,334,768.09
Add: Closing balance of cash
equivalents
Less: Opening balance of cash
equivalents
Net increase in cash and cash 827,531,073.30 315,961,996.60
equivalents
(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
Unit: Yuan Currency: RMB
amount
Cash or cash equivalents received from disposal of subsidiaries in the current
5,000,000.00
period
Including: Hangzhou Xiake Bar Catering Management Co., Ltd. 3,500,000.00
Hangzhou Tiedingxian Catering Management Co., Ltd. 1,500,000.00
Less: Cash and cash equivalents held by subsidiary on date of losing control 1,981,857.39
Including: Hangzhou Xiake Bar Catering Management Co., Ltd. 1,294,311.74
Hangzhou Tiedingxian Catering Management Co., Ltd. 687,545.65
Add: Cash or cash equivalents received in the current period from disposal of
subsidiaries in previous periods
Net cash received from disposal of subsidiaries 3,018,142.61
Other description:
None
(4) Composition of cash and cash equivalents
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
I. Cash 3,952,864,158.35 3,125,333,085.05
Including: Cash in vault 21,976.11 20,176.08
Bank deposits that can be used 3,933,070,722.34 3,048,251,723.18
for payment at any time
Other monetary capital that can 19,771,459.90 77,061,185.79
be used for payment at any time
Funds deposited with the central
bank for payment
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Deposits in other banks
Funds for interbank lending
II. Cash equivalents
Including: Bond investment due
within three months
III. Closing balance of cash and cash 3,952,864,158.35 3,125,333,085.05
equivalents
Including: Cash and cash equivalents
with restricted use by the parent
company or a subsidiary of the group
Other description:
√ Applicable □ Not applicable
Balance of Cash and cash
Time point Difference Causes of difference
monetary capital equivalents
Fixed-term deposit margin for
transformers of RMB250,000.00,
as well as ETC vehicle deposit of
June 30, RMB70,000.00, Pinduoduo
3,960,227,111.24 3,952,864,158.35 7,362,952.89
2023 deposit of RMB5,000,000.00 and
Tmall and Alipay deposits of
RMB2,042,952.89 in other
monetary capital.
Fixed-term deposits of
RMB30,000,000.00, fixed-term
deposit margin for transformers
of RMB250,000.00, ETC vehicle
December
3,161,003,085.05 3,125,333,085.05 35,670,000.00 deposit of RMB70,000.00,
31, 2022
Pinduoduo deposit of
RMB5,000,000.00 as well as
Tmall and Alipay deposits of
RMB350,000.00.
80. Notes on items in the change statement of owner's equity
Explanation on the name of “Others” item for adjusting the closing balance of the previous year and
adjustment amounts:
□ Applicable √ Not applicable
81. Assets with limited ownership or use rights
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Carrying amount at the end of the
Item Cause for restrictions
period
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Fixed-term deposit margin for
transformers, Pinduoduo
Monetary capital 7,362,952.89
deposit, as well as Tmall and
Alipay deposits
Notes receivable
Inventory
Fixed assets
Intangible assets
Total 7,362,952.89 /
Other description:
None
82. Foreign currency monetary items
(1). Foreign currency monetary items
√ Applicable □ Not applicable
Unit: Yuan
RMB balance
Closing foreign Converted exchange converted at the end
Item
currency balance rate of period
Monetary capital - - 84,393,047.26
Including: SF 22,953.62 8.0614 185,038.31
EUR 4,539,846.21 7.8771 35,760,822.58
HKD 32,893,119.75 0.9220 30,326,798.55
JPY 165,227,935.00 0.0501 8,276,928.18
KRW 57,791,646.00 0.0055 317,588.87
SGD 9,646.04 5.3442 51,550.37
USD 1,310,973.29 7.2258 9,472,830.80
VND 4,805,159.00 0.0003 1,489.60
Accounts receivable - - 2,477,505.48
Including: EUR 218,942.52 7.8771 1,724,632.12
HKD 1,603.06 0.9220 1,477.99
JPY 14,999,708.00 0.0501 751,395.37
Other receivables - - 23,373,011.55
Including: EUR 2,865,596.08 7.8771 22,572,586.88
JPY 15,978,454.00 0.0501 800,424.67
Accounts payable 7,841,975.24
Including: EUR 876,165.02 7.8771 6,901,639.48
HKD 22,500.00 0.9220 20,744.55
JPY 18,357,312.45 0.0501 919,591.21
Other payables - - 302,922.31
Including: HKD 5,975.00 0.9220 5,508.83
JPY 52,200.00 0.0501 2,614.91
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KRW 53,644,495.00 0.0055 294,798.57
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. and Hanna 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. P.R.O Co., Ltd. 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 grants
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount included in
Type Amount Reported items
current profits and losses
Government grants related to assets 1,039,545.00 Other incomes 1,039,545.00
Government grants related to
33,599,531.23 Other incomes 33,599,531.23
income
(2). Return of government grants
□ Applicable √ Not applicable
Other description
(1) Details
1) Government grants related to assets
Amortization
Deferred New
Amortization Closing in the current
income at the subsidies
Item in the current deferred period Notes
beginning of in the
period income reported
the period current
items
period
Subsidies for Other
6,399,811.33 1,039,545.00 5,360,266.33
modified incomes
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Amortization
Deferred New
Amortization Closing in the current
income at the subsidies
Item in the current deferred period Notes
beginning of in the
period income reported
the period current
items
period
cosmetic
technology
Subtotal 6,399,811.33 1,039,545.00 5,360,266.33
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 the
technical 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 Bureau and Huzhou Economy
and Information Technology Commission, the technical transformation subsidy of RMB2,350,000.00
was paid by Huzhou Finance Bureau 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 the Development, Reform and Economy
Commission of Wuxing District, Huzhou and the Finance Bureau of Wuxing District, the 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 Bureau and Huzhou Economy and
Information Technology Commission, the technical transformation subsidy of RMB1,379,500.00 was
paid by Huzhou Finance Bureau 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 Bureau
and the Development, Reform and Economic Information Technology Bureau of Wuxing District, the
technical transformation subsidy 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.
According to the Investment Construction and Land Use Agreementsigned between Wuxing District
Daixi Town People's Government of Huzhou City and the Company, RMB2,062,638.00 was granted by
the People's Government of Daixi Town, Wuxing District, Huzhou City in January 2022 as subsidy for
construction works. As of June 30, 2023, the works had not been completed.
2) Government grants related to income and used to compensate the Company for relevant costs or
losses incurred
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Reported
Item Amount Notes
items
According to the Notice of Opinions on
Implementing the High-quality Development of
Enterprise Manufacturing industry in Wuxing District
Other
development 28,420,000.00 (2020-2024) Issued by the Office of Wuxing
incomes
support funds District People's Government (WZBF [2022]
No. 42), it was paid by the Finance Bureau of
Wuxing District, Huzhou City.
Enterprise
Other Paid by the Finance Bureau of Daixi Town,
development 2,062,638.00
incomes Wuxing District, Huzhou.
support funds
According to the investment promotion contract
Enterprise signed with the Finance Bureau of Ningbo
Other
development 1,000,000.00 Meishan Free Trade Port, it was paid by the
incomes
support funds Finance Bureau of Ningbo Meishan Free Trade
Port.
According to the XFGJX [2023] No. 19 Issued
by the Development, Reform and Economic
Enterprise Information Technology Bureau and the Finance
Other
development 700,000.00 Bureau of Xihu District, it was paid by the
incomes
support funds Development, Reform and Economic
Information Technology Bureau of Xihu
District, Hangzhou.
According to the Letter of Huzhou Housing and
Urban-Rural Development Bureau on Applying
Subsidies for
Other for the Early Grant of Subsidies for the 2023
low-income housing 695,200.00
incomes Government-Financed Urban Affordable
Programs
Housing Programs, it was paid by the Finance
Bureau of Wuxing District, Huzhou.
According to the Notice on Facilitating Special
Fund Management Measures of Ningbo
Southern Affairs Issued by Ningbo Municipal
Bureau of Commerce and Ningbo Finance
Commercial Bureau (YYSWCH [2021] No. 14) and the
enterprise Other Notice on the Issuance of the Purchase and
423,600.00
development incomes Implementation Opinions to Promote the
support funds Development of Commercial Enterprises by
Ningbo Municipal Bureau of Commerce and
Ningbo Finance Bureau (Trial) (JSWSM [2022]
No. 115), it was paid by Ningbo Finance
Bureau.
E-commerce According to the WZBF [2019] No. 65 Issued
Other
economy 100,000.00 by the Office of Wuxing District People's
incomes
development Government of Huzhou and New Ten
173 / 210
Semi-Annual Report 2023
Reported
Item Amount Notes
items
support funds Supportive Policies on Accelerating the
E-Commerce Development of Huzhou, it was
paid by the Finance Bureau of Wuxing District.
According to the term of “encouraging
enterprises to stabilize posts and keep workers
Stabilization for undisrupted production” set out in the Notice
Other
employment 100,000.00 on Measures for Supporting Enterprises in
incomes
subsidy Stabilizing Production, Expanding Investment
and Increasing Investments, it was paid by the
Finance Bureau of Wuxing District.
It was paid by Hangzhou Xihu District Market
Intellectual property Supervision Administration, Sub-district Office
subsidies, Party of Xihu District People's Government of
Other
organization funds, 98,093.23 Hangzhou, the Development, Reform and
incomes
and patent support Economic Information Technology Bureau of
funds Wuxing District, Huzhou, and the Finance
Bureau of Wuxing District.
Subtotal 33,599,531.23
(2) The amount of government grants included in the profits and losses in the current period is
RMB34,639,076.23.
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85. Others
□ Applicable √ Not applicable
VIII. Change of Combination Scope
1. Business combinations not under common control
□ Applicable √ Not applicable
2. Business combinations under common control
□ Applicable √ Not applicable
3. Reversed purchase
□ Applicable √ Not applicable
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4. Disposal of subsidiaries
Is there a single disposal of investment in a subsidiary leading to the loss of control
√ Applicable□ Not applicable
Unit: Yuan Currency: RMB
Difference in net The Amount of
assets of the determination other
subsidiary at the Carrying method and comprehensive
The basis for Ratio of Fair value of Gain or loss
consolidated amount of main income related
Time determining remaining remaining from
Payment for Equity Equity financial remaining assumption of to the equity
Name of point of the time equity on equity on the remaining
equity disposal disposal statement level equity on the the fair value investment of
subsidiary losing point when the date of date of equity
disposal ratio (%) method corresponding to date of of the previous
control the control losing losing re-measured at
the disposal losing remaining subsidiaries
right is lost control (%) control fair value
price and control equity on the transferred to
disposal date of loss of the investment
investment control profit and loss
Hangzhou 3,500,000.00 100.00 Disposal February Losing -11,332.08
Xiake Bar 2023 control upon
Catering the transfer
Management of property
Co., Ltd. rights
Hangzhou 1,500,000.00 80.00 Disposal February Losing -12,828.43
Tiedingxian 2023 control upon
Catering the transfer
Management of property
Co., Ltd. rights
Other description:
□ Applicable √ Not applicable
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Semi-Annual Report 2023
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 of subsidiaries, etc.) and the
specific information:
√ Applicable □ Not applicable
1. Increase of consolidation scope
Time point of equity
Company name Equity acquisition method Amount of contribution Contribution ratio
acquisition
Huzhou Keyan Trading Co., Ltd. New subsidiaries March 2023 100.00%
2. Decrease in consolidation scope
Net profits from the
Time point of equity Net assets as at the
Company name Equity disposal method beginning of the period
disposal disposal date
to the disposal date
Korea Younimi Cosmetics Co., Ltd. Cancel April 2023 3,532,993.47 -1,740,215.20
Hangzhou Donghai Wangchao Catering
Cancel June 2023
Management Co., Ltd.
6. Others
□ Applicable √ Not applicable
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IX. Interests in other entities
1. Interests in subsidiaries
(1). Composition of enterprise group
√ Applicable □ Not applicable
Main Holding ratio (%)
Subsidiary Registration Nature of Mode of
place of
name place business Direct Indirect acquisition
business
Hangzhou Proya Trade Hangzhou Hangzhou Wholesale 100.00 Establishment
Co., Ltd. and retail
Zhejiang Meiligu Hangzhou Hangzhou Wholesale 100.00 Establishment
Electronic Commerce and retail
Co., Ltd.
Huzhou Chuangdai Huzhou Huzhou Wholesale 100.00 Establishment
E-commerce Co., Ltd. and retail
Hapsode (Hangzhou) Hangzhou Hangzhou Wholesale 100.00 Establishment
Cosmetics Co., Ltd. and retail
Huzhou UZERO Huzhou Huzhou Wholesale 100.00 Establishment
Trading Co., Ltd. and retail
Hong Kong Xinghuo Hong Hong Kong Wholesale 100.00 Establishment
Industry Limited Kong and retail
Mijing Siyu Wholesale 100.00 Establishment
(Hangzhou) Cosmetics Hangzhou Hangzhou and retail
Co., Ltd.
Ningbo TIMAGE Ningbo Ningbo Wholesale 71.36 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:
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
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Unit: Yuan Currency: RMB
Gain or loss Dividends declared
Shareholding ratio Balance of
attributable to and distributed to
Name of of the minority minority interests
minority minority
subsidiary shareholder at the end of the
shareholders in the shareholders in the
(%) period
current period current period
Ningbo
TIMAGE
28.64 28,172,384.54 46,454,503.27
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
(3). Main financial information of important non-wholly-owned subsidiaries
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Closing balance Opening balance
Name of
Current Non-curren Total Current Non-curren Total Current Non-current Total Current Non-current Total
subsidiary
assets t assets assets liabilities t liabilities liabilities assets assets assets liabilities liabilities liabilities
Ningbo 302,697 6,398,29 309,095,8 142,668,6 1,672,65 144,341,31 173,712,882 5,198,059. 178,910, 112,248, 1,672,655. 113,921,
TIMAGE ,597.36 7.92 95.28 61.73 5.27 7.00 .33 78 942.11 423.70 27 078.97
Cosmetics
Co., Ltd.
Amount incurred in the current period Amount incurred in the previous period
Cash flows Cash flows
Name of Total generated Total generated
Operating Operating
subsidiary Net profit comprehensive from Net profit comprehensive from
revenue revenue
income operating income operating
activities activities
Ningbo 429,841,111.95 98,618,452.96 98,618,452.96 77,958,227.70 234,672,214.61 40,846,250.55 40,846,250.55 24,728,583.15
TIMAGE
Cosmetics
Co., Ltd.
Other description:
None
(4). Major restrictions on using enterprise group assets and paying off enterprise group debts
□ Applicable √ Not applicable
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(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
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). Main 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 Beginning balance/amount
incurred in the current period incurred in the previous period
Joint ventures:
Total book value of investment 3,066,898.78 3,068,948.16
The total of the following items calculated according to the shareholding ratio
-Net profit -2,049.38 -5,814.02
-Other comprehensive income
-Total comprehensive income -2,049.38 -5,814.02
Associates:
Total book value of investment 129,876,661.36 135,464,429.30
The total of the following items calculated according to the shareholding ratio
-Net profit -1,829,651.09 -3,652,502.02
-Other comprehensive income
-Total comprehensive income -1,829,651.09 -3,652,502.02
Other description
None
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(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 in joint ventures
□ Applicable √ Not applicable
(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
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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:
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.
Receivables financing; and 8. Other receivables”, “VII. Notes to the Items in the Consolidated Financial
Statements”, “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 their 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, 2023, there was certain credit
concentration risk in the Company and 80.89% (December 31, 2022: 68.05%) of the accounts receivable
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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 carrying amount 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
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 balance 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
Short-term
200,155,555.56 203,990,000.00 203,990,000.00
borrowings
Notes
56,801,810.60 56,801,810.60 56,801,810.60
payable
Accounts
1,063,096,364.64 1,063,096,364.64 1,063,096,364.64
payable
Other
211,974,456.13 211,974,456.13 211,974,456.13
payables
Bonds
740,666,717.66 899,470,380.00 3,754,050.00 18,770,250.00 876,946,080.00
payable
Lease
11,281,561.28 11,281,561.28 11,281,561.28
liabilities
Non-current
liabilities
3,864,732.04 3,864,732.04 3,864,732.04
due within
one year
Subtotal 2,287,841,197.91 2,450,479,304.69 1,543,481,413.41 30,051,811.28 876,946,080.00
(Continued)
Balance at the end of the previous year
Item Undiscounted
Carrying amount Within 1 year 1-3 years Above 3 years
contract value
Short-term
200,195,890.41 201,900,886.94 201,900,886.94
borrowings
Notes
69,626,352.12 69,626,352.12 69,626,352.12
payable
Accounts
475,427,484.23 475,427,484.23 475,427,484.23
payable
Other
216,392,183.41 216,392,183.41 216,392,183.41
payables
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Balance at the end of the previous year
Item Undiscounted
Carrying amount Within 1 year 1-3 years Above 3 years
contract value
Bonds
724,491,557.93 900,552,174.00 3,754,685.00 18,773,425.00 877,094,416.00
payable
Lease
3,718,119.41 3,718,119.41 3,718,119.41
liabilities
Non-current
liabilities
2,549,452.14 2,549,452.14 2,549,452.14
due within
one year
Subtotal
1,692,401,039.65 1,870,166,652.25 969,651,043.84 22,491,544.41 877,094,416.00
(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
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 may
fluctuate due to changes in foreign exchange rates. 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. Foreign currency monetary items”, “VII. Notes to the
Items in the Consolidated Financial Statements”, “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) Financial assets held for
trading
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1. Financial assets
measured at fair value with
changes included in the
current profit or loss
(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
the current profit or loss
(1) Debt instrument
investment
(2) Equity instrument 146,402,400.00 146,402,400.00
investment
(II) Other debt investments
(III) Other equity
instrument investments
(IV) Investment property
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
Total assets consistently 146,402,400.00 146,402,400.00
measured at fair value
(VI) Financial liabilities
held for trading
1. Financial liabilities
measured at fair value with
changes included in the
current profit or loss
Including: Trading bonds
issued
Derivative financial
liabilities
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Others
2. Financial liabilities
designated as measured at
fair value and the changes
of which are accounted in
current profit or loss
Total liabilities
consistently measured at
fair value
II. Non-continuous fair
value measurement
(I) Assets held for sale
Total assets measured by
non-continuous fair value
Total liabilities measured
by non-continuous fair
value
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 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 carrying amount 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
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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”.
3. Information on joint ventures and associates of the Company
See the notes for details of the significant joint ventures or associates 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
Relationship between other related parties and the
Name of other related parties
Company
Huzhou Beauty Town Technology Incubation
Others
Park Co., Ltd.
Cosmetics Industry (Huzhou) Investment Others
Development Co., Ltd.
Hangzhou Tiedingxian Catering Management Co.,
Others
Ltd.
Hangzhou Xiake Bar Catering Management Co.,
Others
Ltd.
Shaoxing Keqiao Qingteng Culture Investment
Others
Co., Ltd.
PARISEZHAN HK LIMITED Others
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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
Beauty Hi-tech Innovation Co., Ltd. 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
Amount Amount
Approved Exceeding the
Details of incurred incurred
transaction transaction limit
Related parties related party in the in the
amount (if or not (if
transaction current previous
applicable) applicable)
period period
Hangzhou Xiake Bar Catering 71.43
Catering Management Co., service fee
Ltd.
Hangzhou Tiedingxian Catering 83.52
Catering Management Co., service fee
Ltd.
Beauty Hi-tech Innovation Agent 250.47
Co., Ltd. operation
service fee
Statement of sales of goods/rendering of service
√ Applicable □ Not applicable
Unit:’0,000 Currency: RMB
Amount Amount
Details of related
Related parties incurred in the incurred in the
party transaction
current period previous period
Shanghai Youke Jiabei Technology Co., Ltd. Sales of goods 3,361.65
Shanghai Youke Brand Management Co., Ltd. Sales of goods 1,228.90
Ningbo Weiman Cosmetics Co., Ltd. Sales of goods 63.08
Cosmetics Industry (Huzhou) Investment Sales of goods 0.53
Development Co., Ltd.
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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 lesser:
√ Applicable □ Not applicable
Unit: ’0,000 Currency: RMB
Lease income Lease income
Types of leased
Name of lessee recognized in the current recognized in the
assets
period previous year
Hangzhou Xiake Bar Catering Site 15.12
Management Co., Ltd.
Hangzhou Tiedingxian Catering Site 15.36
Management Co., Ltd.
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The Company as the lessee:
√ Applicable □ Not applicable
Unit: ’0,000 Currency: RMB
Variable lease
Simple short-term
payments not included Interest expense
lease and low-value Increased right-of-use
in the measurement of Rent paid assumed on lease
asset rental expense (if assets
lease liability (if liability
applicable)
Name of Types of leased applicable)
lesser assets Amount Amount Amount Amount Amount Amount Amount Amount Amount
Amount
incurred incurred incurred incurred incurred incurred incurred incurred incurred
incurred in
in the in the in the in the in the in the in the in the in the
the current
current previous current previous previous current previous current previous
period
period period period period period period period period period
Huzhou
Beauty Town
Technology
Site 517,536.00 13,976.20
Incubation
Park 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
654.49 449.45
personnel
[Note] Excludes related compensation recognized for share-based payment
(8). Other related party transactions
□ Applicable √ Not applicable
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
Hangzhou Xiake 58,056.75 2,902.84
Bar Catering
Management
Co., Ltd.
Hangzhou 51,670.51 2,583.53
Tiedingxian
Catering
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Management
Co., Ltd.
Subtotal 109,727.26 5,486.37
Prepayments
Huzhou Beauty 43,000.00
Town
Technology
Incubation Park
Co., Ltd.
Subtotal 43,000.00
Other
receivables
EURL 18,431,261.04 18,431,261.04 18,232,635.52 18,232,635.52
PHARMATICA
[Note]
Huzhou Beauty 132,568.20 132,568.20 133,568.20 133,568.20
Town
Technology
Incubation Park
Co., Ltd.
Hangzhou Xiake 3,000,000.00 150,000.00
Bar Catering
Management
Co., Ltd.
Beauty Hi-tech 82,571.59 82,571.59
Innovation Co.,
Ltd.
Subtotal 21,646,400.83 18,796,400.83 18,366,203.72 18,365,503.72
[Note] The amount of EURL PHARMATICA is from PAN Xiang and the consolidated statistics of
EURL PHARMATICA, PARISEZHAN HK LIMITED, SARL ORTUS and S.A.S AREDIS under the
control of PAN Xiang.
(2). Payable items
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Book balance at Book balance at
Item Related parties the end of the the beginning of
period the period
Accounts
payable
S.A.S AREDIS 258,504.52 258,504.52
Ningbo Weiman Cosmetics Co., Ltd. 121,884.94
Hangzhou Tiedingxian Catering Management Co., 19.00
Ltd.
Subtotal 380,408.46 380,408.46
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Receipts in
advance
Subtotal
Other payables
Hangzhou Tiedingxian Catering Management Co., 20,000.00
Ltd.
Cosmetics Industry (Huzhou) Investment 8,057.00
Development Co., Ltd.
Subtotal 28,057.00
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
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 The grant price of restricted shares granted is
instrument options issued by the Company at the RMB78.56 per share, and the term is 48 months
end of the period and their remaining periods of from the grant date
contracts
Other description
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 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.
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 up to 2,100,000 restricted
shares to incentive objects. The 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
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(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 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 48 months. The granted restricted
shares will be released in three tranches (30%, 30% and 40%) over 36 months after the end of 12 months
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 2021, the growth rate of operating revenue
and net profit in 2022 was no less than 25% and 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% and 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% and 87.58%,
respectively.
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
in the current period and estimation in the previous Not applicable
period
Accumulative amount of equity-settled share-based
97,318,367.56
payment included in capital reserves
Total recognized expenses of equity-settled
49,961,246.32
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, 2023, 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
Expansion Project (Phase 43,752.54 33,850.00 20,768.63 2011-330502-04-01-178735
I)
Longwu R&D Center
21,774.45 19,450.00 15,960.58 2101-330106-04-02-307916
Construction Project
Information System
11,239.50 9,050.00 1,658.42
Upgrade Project
Additional working capital 18,000.00 12,821.30 12,533.15
Total 94,766.49 75,171.30 50,920.78
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
Unit: Yuan Currency: RMB
Profits or dividends to be distributed 150,832,835.70
Profits or dividend declared after
deliberation and approval
According to the 13th meeting of the third session of Board of Directors on August 28, 2023, based on
the total share capital as at the record date on which equity distribution is implemented, the Company
proposes to distribute to all shareholders registered a cash dividend of RMB3.80 (tax inclusive) per 10
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shares. Based on the total share capital of 396,928,515 shares on June 30, 2023, it is estimated that the
cash dividend to be distributed will amount to RMB150,832,835.70 (tax inclusive). In case of a change
in the Company’s total share capital due to the conversion of convertible bonds before the record date
for equity distribution, the Company maintains the said distribution ratios and yet adjusts the total
distribution and conversion amounts. The matter above is to be deliberated and approved by the General
Meeting.
3. Sales return
□ Applicable √ Not applicable
4. Explanation of other events after the balance sheet date
□ Applicable √ Not applicable
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
5. Termination of operation
□ Applicable √ Not applicable
6. Segment information
(1). Determination basis and accounting policy of reportable segment
√ Applicable □ Not applicable
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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 2023
Brand Income from main business Costs of main business Gross profit
Proya brand 2,891,721,842.83 828,597,188.97 2,063,124,653.86
Other brands 727,652,945.53 233,340,580.32 494,312,365.21
Subtotal 3,619,374,788.36 1,061,937,769.29 2,557,437,019.07
January to June 2022
Brand Income from main business Costs of main business Gross profit
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
(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
1. The Company as lessee
(1) For details of the right-of-use assets, please see the particulars contained in “25. Right-of-use assets”,
“VII. Notes to the Items in the Consolidated Financial Statements”, “Section X Financial Report”.
(2) 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
Accounting Estimates”, “Section X Financial Report”. Short term lease charges and low value asset
lease charges included in current profits and losses are as below:
Amount for the same
Amount for the
Item period in the
current period
previous year
Short term lease charges 1,522,375.17
Low value asset lease charges (except for short term
238,389.59 85,154.60
lease charges)
Total 238,389.59 1,607,529.77
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(3) Current profit and loss and cash flows related to the lease
Amount for the same
Amount for the
Item period in the
current period
previous year
Interest expenses on the lease liabilities 116,147.15
Variable lease payments that are not included in the
measurement of lease liabilities are included in the
current profit or loss
Income from sub-leasing of right-of-use assets
Total cash outflows related to the lease 3,166,110.79
Related profit and loss arising from sale and leaseback
transactions
(4) For the maturity analysis of lease liabilities and the corresponding liquidity risk management, please
see the particulars contained in “X. Risks Related to Financial Instruments”, “Section X Financial
Report”.
2. The Company as lessor
Operating lease
(1) Lease Revenue
Amount for the current Amount for the same period
Item
period in the previous year
Lease income 816,122.40 796,423.81
(2) Assets under operating lease
Balance at the end of the
Item Closing amount
previous year
Investment property 66,302,354.38 68,654,700.81
Subtotal 66,302,354.38 68,654,700.81
For the details on the operation and rent-out of investment property, please see the particulars contained
in “20. Investment property”, “VII. Notes to the Items in the Consolidated Financial Statements”,
“Section X Financial Report”.
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
Within 1 year 364,655,531.02
Sub-total within 1 year 364,655,531.02
1-2 years 10,713,932.31
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2-3 years
Above 3 years
3-4 years
4-5 years
Above 5 years
Total 375,369,463.33
(2). Disclosed by classification of bad debt accrual method
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Closing balance Opening balance
Provision for bad Carrying
Book balance Provision for bad debts Book balance
debts amount
Category Carrying
Percentage Provision amount Percentage Provision
Amount Amount Amount Amount
(%) ratio (%) (%) ratio (%)
Provision
for bad
debts by
item
Including:
Provision
for bad 375,369,463.3 21,446,95 353,922,5 34,434,38 289,883,06
100.00 5.71 324,317,444.15 100.00 10.62
debts by 3 6.25 07.08 0.91 3.24
portfolio
Including:
Aging 375,369,463.3 100.00 21,446,95 5.71 353,922,5 324,317,444.15 100.00 34,434,38 10.62 289,883,06
portfolio 3 6.25 07.08 0.91 3.24
375,369,463.3 / 21,446,95 / 353,922,5 324,317,444.15 / 34,434,38 / 289,883,06
Total
3 6.25 07.08 0.91 3.24
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 364,655,531.02 18,232,776.56 5.00
1-2 years 10,713,932.31 3,214,179.69 30.00
Total 375,369,463.33 21,446,956.25 5.71
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:
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□ 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
written-back write-off
Provision 34,434,380.91 -12,987,424.66 21,446,956.25
for bad
debts by
portfolio
Total 34,434,380.91 -12,987,424.66 21,446,956.25
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 ending balances collected by debtor
√ Applicable □ Not applicable
Proportion of
Provision for
Company name Book balance accounts receivable
bad debts
balance (%)
Huzhou Hapsode Trading Co., Ltd. 113,353,159.61 30.20 5,667,657.98
Huzhou UZERO Trading Co., Ltd. 69,204,107.61 18.44 3,460,205.38
Hangzhou Proya Commercial
44,351,306.05 11.82 4,435,130.61
Management Co., Ltd.
Proya(Zhejiang) Cosmetics Co., Ltd. 42,709,775.17 11.38 2,135,488.76
Hangzhou Proya Trade Co., Ltd. 35,464,726.52 9.45 1,773,236.33
Subtotal 305,083,074.96 81.29 17,471,719.06
(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 receivable
Dividend receivable
Other receivables 137,185,024.99 141,574,549.59
Total 137,185,024.99 141,574,549.59
Other description:
□ Applicable √ Not applicable
Interest receivable
(1). Classification of interest receivable
□ 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
Within 1 year 34,315,573.68
Sub-total within 1 year 34,315,573.68
1-2 years 44,794,534.68
2-3 years 146,458,111.45
Above 3 years 4,761,614.72
3-4 years
4-5 years
Above 5 years
Total 230,329,834.53
(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
Current accounts receivable 220,626,230.89 210,637,812.50
Security deposits 5,639,614.72 18,833,006.72
Suspense payment receivables 1,412,395.89 2,334,148.44
Others 2,651,593.03 551,116.58
Total 230,329,834.53 232,356,084.24
(9). Provision for bad debts
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
First stage Second stage Third stage
Expected credit Expected credit loss
Provision for bad Expected credit loss for the entire for the entire Total
debts loss over the duration (credit duration (credit
next 12 months impairment not impairment
occurred) occurred)
Balance as at 1,692,824.12 18,797,846.68 70,290,863.86 90,781,534.65
January 1, 2023
Balance as of
January 1, 2023 is
in the current
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period
-Transferred to the -2,239,726.73 2,239,726.73
second stage
-Transferred to the -43,937,433.44 43,937,433.44
third stage
-Written-back to
the second stage
-Written-back to
the first stage
Accrual in the 2,262,681.30 36,338,220.43 -36,237,626.85 2,363,274.89
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 1,715,778.69 13,438,360.40 77,990,670.45 93,144,809.54
30, 2023
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
Among them, significant amount of bad-debt provision written-back or withdrawn in the current period:
□ Applicable √ Not applicable
(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
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As a proportion of Closing balance
Nature of Closing Account
Company name total closing balance in of bad debt
payment balance age
other receivables (%) provision
Hong Kong Current 160,611,460.14 [Note 1] 68.99 73,380,619.79
Xinghuo Industry accounts
Limited receivable
BOYA (Hong Current 37,810,080.00 [Note 2] 16.24 10,300,584.00
Kong) Investment accounts
Management Co., receivable
Limited
Ningbo Keshi Current 7,022,833.46 [Note 3] 3.02 704,391.70
Trading Limited accounts
receivable
Hangzhou Yizhuo Current 6,355,939.55 [Note 4] 2.73 1,440,405.31
Culture Media accounts
Co., Ltd. receivable
Hangzhou Security 4,708,614.72 Above 3 2.02 4,708,614.72
Property deposits years
Maintenance Fund
Management
Center
Total / 216,508,927.87 / 93.00 90,534,615.52
[Note 1] RMB13,247,905.35 in 1 year; RMB4,817,764.35 in 1-2 years; RMB142,545,790.44 in 2-3
years.
[Note 2] RMB4,169,760.00 in 1 year; RMB33,640,320.00 in 1-2 years.
[Note 3] RMB5,609,833.36 in 1 year; RMB1,413,000.10 in 1-2 years.
[Note 4] RMB1,865,506.22 in 1 year; RMB4,490,433.33 in 1-2 years.
(13). Receivables involving government grants
□ Applicable √ Not applicable
(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
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Semi-Annual Report 2023
Closing balance Opening balance
Item Provision for Carrying Provision for
Book balance Book balance Carrying amount
impairment amount impairment
Investments in
332,632,553.57 42,500,000.00 290,132,553.57 304,354,996.61 42,500,000.00 261,854,996.61
subsidiaries
Investments in
associates and 219,127,348.84 92,018,511.89 127,108,836.95 213,909,167.02 81,442,213.22 132,466,953.80
joint ventures
Total 551,759,902.41 134,518,511.89 417,241,390.52 518,264,163.63 123,942,213.22 394,321,950.41
(1) Investments in subsidiaries
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Provision
for
Closing balance of
Increase in the Decrease in the impairment
Invested entity Opening balance Closing balance impairment
current period current period in the
provision
current
period
Hangzhou Proya Trade Co.,
32,241,059.09 50,742.51 32,291,801.60
Ltd.
Hanna Cosmetics Co., Ltd. 2,094,048.00 2,094,048.00
Zhejiang Meiligu Electronic
26,913,422.69 12,073,781.97 38,987,204.66
Commerce Co., Ltd.
Yueqing Laiya Trading Co.,
1,000,000.00 1,000,000.00
Ltd.
Hapsode (Hangzhou)
42,500,000.00
Cosmetics Co., Ltd.
Mijing Siyu (Hangzhou)
18,000,000.00 18,000,000.00
Cosmetics Co., Ltd.
Huzhou UZERO Trading
5,460,276.70 5,460,276.70
Co., Ltd.
Huzhou Niuke Technology
3,500,000.00 3,500,000.00
Co., Ltd.
Hangzhou Proya
Commercial Management 5,000,000.00 5,000,000.00
Co., Ltd.
Huzhou Younimi Cosmetics
21,393,476.00 21,393,476.00
Co., Ltd.
Shanghai Zhongwen
Electronic Commerce Co., 5,929,948.75 599,504.52 6,529,453.27
Ltd.
Korea Younimi Cosmetics
5,046,455.61 5,046,455.61
Co., Ltd.
Hong Kong Keshi Trading
24,736,491.00 24,736,491.00
Limited
Hong Kong Xinghuo
10,185,924.00 10,185,924.00
Industry Limited
Ningbo TIMAGE Cosmetics
61,330,669.19 484,705.77 61,815,374.96
Co., Ltd.
Ningbo Keshi Trading
520,000.00 520,000.00
Limited
Zhejiang Beute Cosmetics
10,181,983.21 10,181,983.21
Co., Ltd.
Ningbo Proya Enterprise 19,558,487.33 15,487,723.66 35,046,210.99
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Consulting Management
Co., Ltd.
Hangzhou Yizhuo Culture
1,000,000.00 1,000,000.00
Media Co., Ltd.
Hangzhou Oumisi Trading
3,900,000.00 3,900,000.00
Co., Ltd.
Guangzhou Qianxi Network
1,000,000.00 1,000,000.00
Technology Co., Ltd
Zhejiang Qingya Culture Art
1,650,000.00 1,650,000.00
Communication Co., Ltd
Hangzhou Weiluoke
500,000.00 500,000.00
Cosmetics Co., Ltd.
Singuladerm (Hangzhou)
500,000.00 4,500,000.00 5,000,000.00
Cosmetics Co., Ltd.
Proya (Hainan) Cosmetics
100,000.00 100,000.00
Co., Ltd.
Hangzhou TIMAGE
112,755.04 127,554.14 240,309.18
Cosmetics Co., Ltd.
Total 261,854,996.61 33,324,012.57 5,046,455.61 290,132,553.57 42,500,000.00
(2) Investments in associates and joint ventures
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Changes in the current period
Recognized Declared Closing
Other Other
Investment Opening investment payment Closing balance of
Additional Investment comprehensive changes Provision for
unit balance gain and loss of cash Others balance impairment
investment decrease income in impairment
under equity dividends provision
adjustments equity
method or profits
I. Joint Venture
Huzhou 3,068,948.16 -2,049.38 3,066,898.78
Panrui
Industry
Investment
Partnership
(Limited
Partnership)
Subtotal 3,068,948.16 -2,049.38 3,066,898.78
II. Associates
Xiongke 2,649,619.70 -14,687.84 2,634,931.86
Culture Media
(Hangzhou)
Co., Ltd.
Jiaxing 111,253,221.93 6,818,181.82 -1,546,592.11 116,524,811.64
Woyong
Investment
Partnership
(Limited
Partnership)
Zhuhai 10,576,298.67 10,576,298.67 92,018,511.89
Healthlong
Biotechnology
Co., Ltd.
Beijing Xiushi 4,918,865.34 -36,670.67 4,882,194.67
Culture
Development
Co., Ltd.
Subtotal 129,398,005.64 6,818,181.82 -1,597,950.62 10,576,298.67 124,041,938.17 92,018,511.89
Total 132,466,953.8 6,818,181.82 -1,600,000.00 10,576,298.67 127,108,836.95 92,018,511.89
Other description:
□ Applicable √ Not applicable
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4. Operating revenue and operating cost
(1). Information of operating revenue 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 1,710,497,142.80 814,221,197.64 1,338,252,463.90 608,471,644.94
Other business 20,047,982.29 9,555,378.31 365,701.44 7,891,133.10
Total 1,730,545,125.09 823,776,575.95 1,338,618,165.34 616,362,778.04
(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:
Breakdown information by major categories of revenue arising from contracts with customers
(1) 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 1,713,705,273.22 1,338,554,957.83
Income recognized within a period of time 16,839,851.87 63,207.51
Subtotal 1,730,545,125.09 1,338,618,165.34
(2) Revenue recognized in the current period included in the opening carrying amount of contract
liabilities is RMB68,099,041.17.
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
measured by cost method
Long-term equity investment income -1,600,000.00 -3,474,371.02
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Semi-Annual Report 2023
measured by equity method
Investment income from disposal of -2,545,129.34
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
financial assets held for trading
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 -4,145,129.34 -3,474,371.02
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 -217,694.21
Tax refund or reduction approved beyond
authority or without official approval or on an
occasional basis
Government grants included in the current profit
and loss (except those that are closely related to
the enterprise’s business, in compliance with the
34,639,076.23
relevant policies and enjoy in accordance with the
national unified standard quota or quantitative
amount)
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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 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 421,794.92
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
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current profit and loss
Custody fee income from entrusted operations
Other non-operating revenue and expenses other
-873,327.35
than the above items
Other gains and losses items under the definition
of non-recurring gains and losses
Less: Income tax impact 7,638,568.45
Effect of minority shareholders’ equity (after
5,729,135.70
tax)
Total 20,602,145.44
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
gains and losses 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
ordinary shareholders of the 13.29 1.25 1.24
Company
Net profit attributable to
ordinary shareholders of the
12.74 1.20 1.19
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 28, 2023
Revision information
□ Applicable √ Not applicable
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