Annual Report 2023
Stock Code: 603899 Short Name: M&G Corporation
SHANGHAI M&G STATIONERY INC.
Annual Report 2023
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Annual Report 2023
Staying True to Original Aspiration and Forging Ahead
Letter to Shareholders
The year 2023 presented formidable challenges. Internationally, we confronted a
complex environment and a sluggish economic recovery. Domestically, we grappled with
diminishing external demand and subdued domestic consumption, exacerbated by a mix of
cyclical and structural issues. Despite these trials, M&G remained steadfast and united,
successfully navigating these challenges and maintaining robust and steady operations.
The year 2023 was the third in the Company's new five-year strategy. Moreover, it
marked a point of transition. During the course of the year, we were steadfast in our
long-term perspective. By focusing on model stores, advancing our omni-channel layout
and nurturing innovative product capabilities, we ensure stable growth for our core
traditional business. Meanwhile, our new business, including direct office supplies and
large retail store, maintained rapid growth. We worked hard to advance policy development,
doing so with a focus on the M&G Business System (MBS), digitalization and talent
cultivation. This boosted our operational efficiency and laid a solid foundation for the
Company's sustainable development.
In 2023, the Company recorded revenue of RMB23.35 billion, an increase of 16.78%,
and a net profit attributable to its shareholders of RMB1.52 billion, an increase of 19.05%.
We also celebrated Jiumu Store's seventh anniversary in 2023, a year in which we
flourished. Jiumu Store recorded revenue of RMB1.24 billion, an increase of 52.58%, and a
net profit of RMB25.72 million. Furthermore, the total number of Jiumu Stores exceeded
600. Finally, after seven years of dedicated effort, we have built Jiumu Store a bridgehead.
In 2023, we emphasized quality over quantity in product development, dedicating
ourselves to elevating the quality of the products we offered. We addressed consumer pain
points, and studied their satisfactory points and points of posts in pursuit of greater
consumer satisfaction. At M&G, we value every detail throughout the consumer experience,
endeavouring to "embrace" each customer with products designed with care and warmth.
In 2024, we'll remain committed to our mission of "make study and work more joyful
and effective". We'll focus on our core business as we enhance the efficiency of
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collaboration. Upholding our customer-centric philosophy, we will keep improving our
capability in technological innovation. We will strengthen the competitive edges in our core
traditional business, while continuing to expand the new business. Also, we will advance
strategies and measures such as product and technological innovation, channel
transformation, online improvement and internationalization. We'll adhere to our strategies
despite external uncertainties. We'll also advance organizational reform to sustain the
Company's healthy, high-quality development. By doing so, we aim to strengthen our
presence and competitiveness in the global stationery and office supplies sector.
Work hard and you will be rewarded and win in the future. We'll continue to do the
tough but right things in the belief that our dedication and efforts will be rewarded. We
would like to extend our heartfelt gratitude to our employees. They have been dedicated
and hard working in 2023. We also want to thank our partners and continue our journey
together towards a brighter future. We're thankful to our customers for their unwavering
support. Your trust keeps driving our growth. Last but not least, we extend heartfelt
gratitude to our shareholders. M&G is ready to work with all of you to promote sound,
sustainable, high-quality development. We'll strive to create greater value for each and
every shareholder.
Our mission is to take responsibility and strive to create a brighter future. And we'll
keep striving towards a world-class M&G!
Board of Directors of Shanghai M&G Stationery Inc.
28 March 2024
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Annual Report 2023
Important Notice
I. The Board of Directors, Supervisory Committee, directors, supervisors and senior management
of the Company warrant that the contents of this report are true, accurate and complete, without
any misrepresentation, misleading statements or material omissions, and severally and jointly bear
the legal responsibilities thereof.
II. All directors of the Company attended the Board meeting.
III. BDO China Shu Lun Pan CPAs (LLP) has issued the audit report with unqualified opinions to
the Company.
IV. Chen Huwen, the chairman of the Company, Tang Xianbao, CFO of the Company and Zhai Yu,
the head of the accounting department (person in charge of accounting), warrant the truthfulness,
accuracy and completeness of the financial report in this annual report.
V. Profit distribution plan or plan to convert surplus reserves into share capital approved by the
Board of Directors during the Reporting Period
The Company proposes to distribute cash dividend of RMB8.00 (tax inclusive) per 10 shares based
on the Company's total share capital (exclusive of shares in the Company’s special securities account for
repurchased shares) registered as at the registration date for the implementation of dividend distribution.
The profit distribution plan is subject to being submitted to the Company's 2023 annual general meeting
of shareholders for deliberation.
VI. Risks statement of the forward-looking statements
√ Applicable □ Not applicable
Forward-looking statements including future plans and development strategies involved in this
annual report do not constitute the Company's substantive commitments to investors. The investors are
advised to pay attention to investment risks.
VII. Is there any non-operating misappropriation of funds of the Company by any controlling
shareholders and their related parties
No
VIII. Has the Company provided any external guarantees in violation of the decision-making
procedures
No
IX. Are there more than half of the directors who cannot warrant the truthfulness, accuracy and
completeness of the annual report disclosed by the Company
No
X. Warning on significant risks
The Company has illustrated various risks and corresponding measures that the Company might
face in the production and operation. Please refer to the "Potential Challenges and Risks" set out in
"Section III Management Discussion and Analysis". Investors are advised to pay attention to risk of
investment.
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XI. Others
□ Applicable √ Not applicable
本报告分别以中、英文编制，在对中外文文本的理解上发生歧义时，以中文文本为准。
This English version is converted from the Chinese version.
In case of any discrepancy between the Chinese version and the English version, the
Chinese version shall prevail.
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Contents
Section I Definition ............................................................................................................................ 7
Section II Company Profile and Key Financial Indicators .................................................................. 8
Section III Management Discussion and Analysis .............................................................................. 12
Section IV Corporate Governance ...................................................................................................... 37
Section V Environmental and Social Responsibility ......................................................................... 53
Section VI Major Events ..................................................................................................................... 56
Section VII Changes in Shares and Shareholders................................................................................. 68
Section VIII Preferred Shares ................................................................................................................ 76
Section IX Bonds ................................................................................................................................ 77
Section X Financial Report ................................................................................................................ 78
Financial statements signed and sealed by the legal representative, the person in
charge of accounting work, and the person in charge of the accounting agency.
Original of the auditor's report with the seal of the accounting firm and the
References
signature and seal of the certified public accountant.
Originals of all company documents and announcements publicly disclosed on the
designated information disclosure media by CSRC during the Reporting Period.
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Section I Definition
I. Definition
In this report, unless the content requires otherwise, the following terms shall have the following
meanings:
Definition of common terms
The Report Refers to Annual Report 2023
Company, the Company, M&G
Refers to SHANGHAI M&G STATIONERY INC.
Stationery, M&G Corporation
M&G Group Refers to M&G Holdings (Group) Co., Ltd.
M&G Colipu Refers to Shanghai M&G Colipu Office Supplies Co., Ltd.
M&G Life Enterprise Management Co., Ltd.（晨光生活馆企
M&G Life（晨光生活馆） Refers to
业管理有限公司）/Large retail store of the Company
Shanghai Colipu Information Technology Co., Ltd.（上海科力
Colipu Information Technology Refers to
普信息科技有限公司）
Shanghai M&G Information Technology Co., Ltd.（上海晨光
M&G Technologies Refers to
信息科技有限公司）
Jiekui Investment Refers to Shanghai Jiekui Investment Management Firm (L.P.)
Keying Investment Refers to Shanghai Keying Investment Management Office (L.P.)
Jiumu M&G Store Enterprise Management Co., Ltd.（九木杂
Jiumu Store（九木杂物社） Refers to
物社企业管理有限公司）/Large retail store of the Company
M&G Office Stationery（晨光办公） Refers to Shanghai M&G Office Stationery Co., Ltd.
Axus Stationery Refers to Axus Stationery (Shanghai) Company Ltd.
Back to School Holding AS, a Norwegian subsidiary that is
Beckmann Refers to
principally engaged in schoolbags
Shanghai Qizhihaowan Culture and Creativity Co., Ltd.（上海
Qizhihaowan（奇只好玩） Refers to
奇只好玩文化创意有限公司）
Maintenance, repair and operation, i.e. industrial consumables
MRO Refers to required by an industrial enterprise to ensure normal
production, except raw materials
Key Account, usually referring to large cross-regional retailers
KA Refers to with large operating space and dense customer flow, including
RT-MART, Walmart, Carrefour, and Hualian Supermarket.
The designing, developing, manufacturing and selling writing
instruments, student stationery, office supplies and other
Core traditional business Refers to
products under M&G brands, and also the e-commerce
business M&G Technologies
New business Refers to Large retail store business and direct office supplies business
Reporting period Refers to Year 2023, from 1 January 2023 to 31 December 2023
Yuan, ten thousand Yuan, hundred
Refers to RMB, RMB10,000, RMB100 million
million Yuan
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Section II Company Profile and Key Financial Indicators
I. Company Information
Chinese name of the Company 上海晨光文具股份有限公司
Short name of the Company in Chinese 晨光股份
English name of the Company SHANGHAI M&G STATIONERY INC.
Abbreviation of English name of the Company M&G
Legal representative of the Company Chen Huwen
II. Contact Information
Board Secretary Securities Affairs Representative
Name Bai Kai
No.5, Lane 288, Qianfan Road, Xinqiao
Office address
Town, Songjiang District, Shanghai
Telephone 021-57475621
Fax 021-57475621
E-mail ir@mg-pen.com
III. Introduction to General Information
Registered address Building 3, No. 3469 Jinqian Road, Fengxian District, Shanghai
Historical change of the Company's
No
registered address
No.5, Lane 288, Qianfan Road, Xinqiao Town, Songjiang
Office address
District, Shanghai
Postal code of office address 201612
Website of the Company http://www.mg-pen.com
E-mail ir@mg-pen.com
IV. Information Disclosure and Place for Obtaining the Report
Shanghai Securities News, China Securities Journal,
Media for the Company's information disclosure
Securities Daily, Securities Times
CSRC's designated website for the Company's
www.sse.com.cn
Annual Report disclosure
The Company's Annual Report may be obtained at Board of Directors’ Office
V. Stock Information
Stock Information
Exchanges on which Stock short name
Share class Stock short name Stock code
the stocks are listed before change
Shanghai Stock
A share M&G Corporation 603899 M&G Stationery
Exchange
VI. Other Relevant Information
Name BDO China Shu Lun Pan CPAs (LLP)
Auditor of the Company Office address 4F, No. 61, Nanjing East Road, Shanghai
(domestic) Name of the signing
Chen Luying, Fang Ning
accountant
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VII. Major Accounting Data and Financial Indicators for the Past Three Years
(I) Major accounting data
Unit: Yuan Currency: RMB
Year-on-year
Major accounting data 2023 2022 2021
change (%)
Revenue 23,351,304,328.03 19,996,315,623.32 16.78 17,607,403,250.12
Net profit attributable
to shareholders of the 1,526,801,727.16 1,282,456,788.17 19.05 1,517,866,131.16
listed companies
Net profit attributable
to shareholders of the
listed companies, net 1,398,219,856.97 1,155,560,793.33 21.00 1,349,538,372.72
of non-recurring gains
and losses
Net cash flow
generated from 2,616,600,617.09 1,351,783,827.08 93.57 1,561,196,420.77
operating activities
Year-on-year
End of 2023 End of 2022 End of 2021
change (%)
Net assets attributable
to shareholders of the 7,833,178,803.52 6,849,334,531.67 14.36 6,194,891,978.00
listed companies
Total assets 15,313,962,312.00 13,022,593,379.49 17.60 11,424,387,930.33
(II) Key financial indicators
Year-on-year
Key financial indicators 2023 2022 2021
change (%)
Basic earnings per share
1.6577 1.3874 19.48 1.6450
(Yuan/share)
Diluted earnings per share
1.6577 1.3874 19.48 1.6425
(Yuan/share)
Basic earnings per share, net of
non-recurring gains and losses 1.5181 1.2499 21.46 1.4623
(Yuan/share)
Increase by 1.37
Weighted average ROE (%) 20.97 19.60 26.82
percentage points
Weighted average ROE, net of Increase by 1.54
19.20 17.66 23.84
non-recurring gains and losses (%) percentage points
Explanation of major accounting data and financial indicators for the past three years by the end of the
Reporting Period
√ Applicable □ Not applicable
Net cash flow generated from operating activities increased primarily driven by the increased sales and
cash inflows.
VIII. Difference in the Accounting Information under the PRC Accounting Standards for Business
Enterprise ("PRC GAAP") and Overseas Accounting Standards
(I) Difference in net profit and net asset attributable to shareholders of the listed company in
financial reports disclosed under International Accounting Standards and PRC GAAP
□ Applicable √ Not applicable
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(II) Differences in net profit and net assets attributable to shareholders of the listed company in
financial reports disclosed under International Accounting Standards and PRC GAAP
□ Applicable √ Not applicable
(III) Explanation on the differences between PRC GAAP and Overseas Accounting Standards:
□ Applicable √ Not applicable
IX. Key Financial Data for the Year of 2023 by Quarter
Unit: Yuan Currency: RMB
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
(January - March) (April - June) (July - September) (October - December)
Revenue 4,881,597,128.81 5,079,159,607.47 5,899,006,541.60 7,491,541,050.15
Net profit attributable to
shareholders of the listed 333,575,984.76 270,916,653.58 489,658,451.67 432,650,637.15
companies
Net profit attributable to
shareholders of the listed
294,952,415.84 247,752,748.10 453,839,490.26 401,675,202.77
company after
non-recurring profit or loss
Net cash flow generated
135,347,440.80 540,964,797.25 670,832,865.07 1,269,455,513.97
from operating activities
Explanation on difference between information by quarter and information disclosed in periodical
reports
□ Applicable √ Not applicable
X. Items and Amounts of Non-recurring Gains or Losses
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Items of Non-recurring Gains or Amounts in Amounts in Amounts in
Notes (if applicable)
Losses 2023 2022 2021
Gains or losses on disposal of
Mainly due to the gains on
non-current assets (inclusive of 4,135,364.06 -31,622.53 6,098,090.22
the disposal of fixed assets
impairment allowance write-offs)
Government subsidies included in
profits and losses for the current Mainly including
period, excluding those that are closely government subsidies
related to the Company's normal received during the
business operations and given in 148,088,250.88 Reporting Period and 137,680,656.90 163,887,877.43
accordance with defined criteria and in government subsidies
compliance with government policies, transferred from deferred
and have a continuing impact on the income
Company's profits or losses
Gains or losses on fair-value changes
in financial assets and liabilities held
by a non-financial enterprise, as well
Revenue generated from
as on disposal of financial assets and
28,908,931.81 purchase of wealth 33,850,421.52 43,557,663.15
liabilities (exclusive of the effective
management products
portion of hedges that is related to the
Company's normal business
operations)
Mainly due to the provision
Reversal of provision for impairment
reversal of bad debts on
of receivables which are individually 3,232,256.86 2,418,576.03 20,000,000.00
individual receivables
tested for impairment.
during the Reporting Period
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Gain equal to the amount by which
investment costs for the Company to
obtain subsidiaries, associates and
joint ventures are lower than the 7,479.07
Company’s enjoyable fair value of
identifiable net assets of investees
when making investments
Other net non-operating income and Mainly due to donation
-2,669,713.78 4,698,497.40 -11,127,909.82
expenses, other than the above items payments
Minus: Effect of income tax 33,479,316.16 33,704,873.59 33,537,580.85
Effect of minority equity (after
19,633,903.48 18,023,139.96 20,550,381.69
tax)
Total 128,581,870.19 126,895,994.84 168,327,758.44
Items unlisted in the Explanatory Announcement on Information Disclosure by Companies Offering
Securities to the Public No. 1: Non-Recurring Profits and Losses are identified as non-recurring profit
and loss items and the items are of a significant amount, and non-recurring profit and loss items listed in
the Explanatory Announcement on Information Disclosure by Companies Offering Securities to the
Public No. 1: Non-Recurring Profits and Losses are defined as recurring profits and losses
□ Applicable √ Not applicable
XI. Items Measured at Fair Values
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Changes in the Effect on profit
Items Opening balance Closing balance
Period for the Period
Held-for-trading
1,627,645,879.64 1,402,518,595.12 -225,127,284.52 31,431,746.76
financial assets
Receivables
21,664,621.88 39,533,283.51 17,868,661.63
financing
Derivative financial
assets
Other debt
investments
(including other
current assets)
Other non-current
financial assets
Investments in other
8,411,887.95 9,175,073.42 763,185.47
equity instruments
Held-for-trading
financial liabilities
Derivative financial
881,465.28 1,357,106.71 475,641.43
liabilities
Non-current
liabilities due within 16,715,043.39 35,878,223.18 19,163,179.79 -4,241,121.34
one year
Estimated liabilities 14,922,058.45 -14,922,058.45
Total 1,690,240,956.59 1,488,462,281.94 -201,778,674.65 27,190,625.42
XII. Others
□ Applicable √ Not applicable
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Section III Management Discussion and Analysis
I. Discussion and Analysis of Operation
The year 2023 was the third in the Company's new, five-year strategy. Moreover, it marked a point
of transition. The international environment became increasingly complex and uncertain, and the
domestic market saw weak expectations and sluggish demand. In the domestic market, changing
consumer preferences, buying habits and consumption scenarios, as well as the recovering market and
demographic trends, brought new challenges and opportunities. In response, the Company adhered to its
strategies, upheld long-term development, and promoted steady implementation of its development
strategies. In terms of core traditional business, it maintained a leading position industry-wide, and
advanced high-end upgrading, channel transformation and online improvement. Large retail store
business saw a record high of both revenue and profit, becoming a new growth point for the Company.
Direct office supplies business continued to grow rapidly, with continuously improving operating
capacity. Meanwhile, the Company actively explored the international market, empowered organisation
with digital tools, and kept promoting organisational upgrading and reform, with its core
competitiveness further enhanced.
In the Reporting Period, revenue reached RMB23.35 billion, an increase of 16.78%, and the net
profit attributable to the Company’s shareholders was RMB1.52 billion, an increase of 19.05%.
Operation of the Company in 2023 is reported as follows:
1. Core traditional business focused on product capability enhancement
During the Reporting Period, the Company emphasized quality over quantity in product
development to increase the on-shelf ratio and sales contribution of single products while improving the
survival rate of new products. Moreover, the Company optimised the product structure and streamlined
the category composition of existing products to increase the on-shelf ratio of must-have products and
improve the capability of product categories. Being customer-centric, the Company carried out in-depth
study of consumer pain points, and thus enhanced the functional design of products and kept upgrading
the writing experience of consumers. The Company also promoted the combination of internal
independent cultivation and collaboration with external IPs to diversify the product category. This has
further boosted the Company's product capability.
Mass market stationery segment. The Company developed and managed products centring on
customers, so as to bring customers a full range of stationery products of reliable quality and essential
functions, and kept optimising the product structure and enhancing product capability. In terms of
segmented categories, the Company effectively increased its market share through "exploitation of
potential" and "collaboration". By tapping the potential for marketing of classic products in different
channels, the Company increased the on-shelf ratio of products. Coordination was made with online
channels to tap the potential for diversifying high-quality online products and form individual
best-selling products for distribution. During the Reporting Period, the Company improved the on-shelf
ratio of long-selling paper products and key paper products, and the Meeboki-series products enjoyed
popularity in the market.
Premium stationery segment. The Company highlighted the development and cultivation of
leading products. It optimised the product structure, increased the on-shelf ratio of best-selling products
at key offline stationery shops, exerted efforts in the arrangements, promotion, and cultivation of
products in all categories in the online market, and focused on developing the best-selling products and
delving into leading shops. Additionally, it developed new products for consumers in diversified
scenarios and at diversified contact points and in line with the premium tonality, in order to provide
consumers with more high-quality products.
Arts and kids drawing segment. The Company identified different selling points of products
based on consumer preferences and user experience, continued to develop high-end products and
promoted the product offering of "food-grade, easy-to-clean, and anti-bacterial" high-end products.
"Boron-free" clay, rice colour clay, acrylic markers were welcomed by the market. In the offline market,
it focused on building special zones of arts and kids drawing products in key stationery shops, as well as
refined arrangements and operations of the shops. Moreover, the Company seized market opportunities
to expand professional art and educational products.
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Office stationery segment. The Company redoubled efforts at the development and promotion of
office supplies, focused on delving into key categories and continuously developing products with high
product capabilities, volume, and shop profitability, continued to expand M&G office stores and model
office stores, advance channel transformation and empower services, and kept enhancing the service
capabilities in order to meet the demands of professional channels. In terms of category extension, the
Company seized the consumption trends and demands of target consumers, intensified the customer
side's awareness of sports products and user interaction through online channels, and enhanced the
presence and popularity of sports products.
2. Core traditional business continued omni-channel, and improved retail service capabilities
During the Reporting Period, the Company continued to promote omni-channel development of its
core traditional business. Based on changes in consumer demand and habits, the Company continued to
optimize retail operation towards a channel structure with a multi-level distribution system as core. This
omni-channel and multiple contact point enabled more direct access to customers through new offline
channels, online channels and direct supply channels. Further the change from a wholesaler toward a
brand retail service provider.
Develop traditional channels with a focus on improving the quality of single stores and
on-shelf ratio of active single products. The Company improved the operational quality and sale of
model stores (namely stationery stores featuring larger areas and operational quality) and single stores to
enhance customer engagement, introduced more accurate and effective product configuration standards,
optimised the product structure of stationery stores, further enhanced the construction of category
positions based on the categories prioritised by the Company, and effectively increased the proportions
of must-have and high-value products in the sales of stationery stores. To maintain the structural
integrity of products, the Company sorted out the product offering that had been verified through online
channels or the market, met market requirements, was sufficiently competitive and could increase the
sales of stationery stores, and improved the on-shelf ratio of active single products.
Improve the operational efficiency of channels with digital tools. M&G Alliance APP's role of
linking the headquarters to stationery store owners was continuously leveraged to improve store
engagement, with the store activity of the primary market continuing to rise. Through "JUBAOPEN",
the Company followed up on the business of target products and stationery shops, thus empowering the
real-time promotion decisions on business of stationery shops and enhancing their capability in "the
right match between right shops and right products". Operational efficiency was constantly boosted by
information-based channels and effective data.
Actively promote direct model. Continued efforts were made to promote headquarters direct
supply, partner direct supply, office direct supply and premium stationery to create incremental sales.
The office direct supply model further empowered business and developed and tapped the potential of
offline professional channels. The premium stationery segment focused on core customers, and intended
to set a benchmark for large stores of premium products, scale up and increase premium stationery
channels through the premium direct supply model, and lead the ways of high-quality stores next to
schools. The Company output the product offerings of large stores at retail summits to enhance the
cooperative engagement with leading large stores in the industry.
Increase online channels. The Company vigorously developed online business and worked with
different segments to establish the pace, standards, and procedures for the development of online
products. The efficiency was improved through "multi-store + flagship store" refined operation, and
online sales were improved through the online battle map, the exploitation of product line arrangements
and product capability of online categories and the expansion of categories for distribution and online
channels. Additionally, the Company continued to promote Pinduoduo and Douyin, Kuaishou and other
new channel businesses. During the Reporting Period, M&G Technologies' revenue was RMB857
million, representing an increase of 30% from the previous year.
3. Continue to strengthen brand presence
During the Reporting Period, the Company adhered to the “consumer-centric” philosophy and
delved into and communicated content, consolidated the brand reputation, and built the unique brand
identity. Via products, the Company pressed ahead with brand communication and consumer interaction,
and kept up with the inner world of young consumers, continuously and steadily output emotional value,
thus building more profound connection and communication with users, reshaping higher-quality,
younger and warmer consumer relations and ceaselessly emphasising the brand identity of M&G as
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"good stationery with warmth". For three consecutive years, the Company won the titles of "China
Annual No.1 Stationery Brand Award" and "China's 500 Most Valuable Brands".
M&G has been well recognized among consumers, is the designated stationery supplier of the Boao
Forum for Asia, and once attended China International Consumer Products Expo 2023, Gifts & Home
Shenzhen, Shanghai Bookfair, China Brand Day, Shanghai Good Products Exhibition, World Design
Cities Conference 2023 and a number of other grand fairs, showcasing the power of Chinese stationery
brands and continuously enhancing M&G's industry-wide leadership and worldwide presence.
4. Consolidate and improve the Company's middle-end and back-end platform capabilities
Promote design and R&D. Adhering to the "consumer-centric" philosophy, the Company actively
performed forward-looking research and design, focused on the pain points, satisfactory points, and
points of posts of consumers and strengthened the functional design of products to improve the use
experience of consumers, and also highlighted the capability of technological innovation and
accelerating the speed of technological progress and results transformation. For example, M&G Youwo
series targeted beginners, and developed pens more suitable for beginners based on the core idea of
"Make it a Habit to Write Properly", and the new-generation Youwo series won the golden prize in
China Stationery Innovative Design Competitive (CSID) 2023. The Company adjusted the annual plans
and roll-out frequency of new products from two to four, and employed domestic and foreign design
resources to improve the capability of international design and facilitate its global landscape.
M&G Business System (MBS). The Company continuously promoted lean management and
implemented cost reduction and efficiency enhancement. In the production segment, the Company
promoted all-employee improvement, enhanced quality and efficiency on all fronts, further developed
production in all directions, and continuously improved production site efficiency, quality, business flow
and management capability. In the business segment, the principle of using the MBS for issue
addressing and flow improvement was combined with the Company's business model to improve all
employees' capability of solving problems and making improvements through the MBS thought, and a
lean talent management model was developed.
Coordinate supply chain. The Company proactively promoted the application of intelligent
manufacturing technologies in the production and testing processes of the stationery industry, as well as
the application of machine vision technology in key links, thus significantly improving production and
testing efficiency and setting a model for the industry's transformation from extensive management to
refined management. During the Reporting Period, the Company won the title of "Five-star Green
Factory in Shanghai". The quality assurance procedures were optimised, and the development of the
supply chain quality system was refined by enhancing the quality of core supply chains. The
cost-effectiveness of products was improved on an ongoing basis through lean production, optimisation
of resource supply, local supply, and optimisation of raw materials.
Logistics support. The Company is committed to building a logistics service system that can
support multiple business models. According to requirements of different business models and diverse
business scenarios, the Company provides differentiated, refined and efficient logistics service support
for each business segment. The Company reasonably planned the logistics and capacity across the
country to support business development, and achieved the nationwide layout and shipment covering
East China, South China, and North China, significantly enhancing the operation and cost control
capabilities of all warehouses.
Digitalization development. The Company highlighted information-based transformation and
digitalisation, and kept accelerating digital transformation and stepping up technological innovation. In
line with corporate strategy, the Company built the foundation for M&G's data governance, and
improved the data analysis capability for each business segment, so as to better drive business
improvement by virtue of data and keep advancing digital management, data collection and integration,
data analysis and decision-making support, customer experience and digital interaction in the business
process.
Construction of organization and talent. Organization and talents are an important basis for
realizing our strategy. The Company is committed to building an active organisation (with a refined
talent cultivation mechanism and enabling total improvement and self-refinement). Based on the needs
of employees at different positions, the Company provided matching resources to support leader echelon
building and leadership development of managers. Centring on the "striver-oriented" corporate culture
and the underlying logic of "benefiting others", the Company took customer-centred, open and inclusive,
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sincere, focused and win-win spirits as the corporate value. Doing so helped the Company build a
corporate culture with M&G's characteristics through value iteration and consolidation.
5. Large retail store business robustly developed
Jiumu Store has a clear positioning in the Company’s new five-year strategy, which is to become
the bridgehead for the M&G brand and product upgrading, and also to become a national leading
premium recreation and creativity retail brand. More exposure of the M&G brand can help drive
development of M&G's premium stationery products, strengthen retail capabilities, and provide timely
consumer insights.
During the Reporting Period, Jiumu Store saw quick recovery of its offline outlets and continuously
improving operation quality, as the number of consumers at shopping malls picked up. The retail
operation capacity accumulated in the past three years came into play, empowering better product mixes,
more refined operations and better consumer insights and services of Jiumu Store and continuous
expansion of offline channels.
The creative stationery category is becoming the core category of Jiumu Store's products, and is
going to undertake the role of the bridgehead for the M&G brand and product upgrading, empowering
and back-feeding the headquarters' core traditional business to some extent. The sales volume in online
public domains and new channels, such as Pinduoduo, Douyin, community e-commerce and WeChat
applets, grew steadily, and the total online sales volume kept rising as Jiumu Store exerted more efforts
in private domain WeChat group operations and home delivery community e-commerce. The Straight-A
Student membership operation system was continuously upgraded and it ran soundly. Through life-cycle
management, Jiumu Store improved customer experience and activity, and has received more than 1
million Straight-A Student members.
During the Reporting Period, M&G Life (including Jiumu Store) recorded revenue of RMB1.33
billion, an increase of 51%, among which Jiumu Store’s revenue was RMB1.24 billion, an increase of
52%, and its net profit was RMB 25.72 million, achieving profit for the first time. As of the end of the
Reporting Period, the Company had 659 large retail stores in China, of which 618 were Jiumu Stores
(417 own stores and 201 franchised stores) and 41 were M&G Life stores.
Unit: RMB 0'000
M&G Life (including
2023 2022 2021 3-year average
Jiumu Store)
Revenue 133,535.55 88,414.44 105,406.13 109,118.71
Net profit 2,291.32 -3,513.84 -2,108.65 -1,110.39
Of which, Jiumu Store 2023 2022 2021 3-year average
Revenue 124,043.08 81,299.30 94,949.81 100,097.40
Net profit 2,572.81 -3,650.09 -2,255.78 -1,111.02
6. Continued rapid growth of direct office supplies business
Boasting a professional electronic transaction system, smart warehousing logistics management
system, high-quality product supply chains, and personalised services, M&G Colipu has evolved into a
pioneer and industry leader in procurement digitalisation for enterprises, significantly enhancing M&G's
market position and influence and further consolidating its dominant in the industry.
In terms of business scenarios, M&G Colipu focused on four business segments, including one-stop
office supplies procurement, MRO industrial products, marketing gifts, and employee benefits, as well
as the development of core suppliers and manufacturers in core areas and the categories of MRO
industrial products and marketing gifts.
In terms of customer development, M&G Colipu successfully established business relationships
with new central state-owned enterprises in power, automobile and energy industries, such as China
Electrical Equipment Group, FAW and Dongfeng Motor, and continued to tap the potential of existing
partners and extended new business with State Grid, China South Power Grid, Sinopec, etc., adhering to
the professional spirit of "digging 10,000 meters deep from a 1-meter-wide opening". As for government
customers, M&G Colipu successfully joined the projects initiated by institutions directly under CPC
Central Committee, and successfully renewed the projects in cooperation with the State Taxation
Administration and 81.cn; as for financial customers, M&G Colipu was shortlisted for projects of
Industrial Bank Co., Ltd., Rui Insurance and Guotai Junan Securities, further reinforcing its dominant
position in the financial sector; as for MRO customers, M&G Colipu was shortlisted for projects of
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China South Power Grid, Datang Corporation and China Aerospace Science and Technology
Corporation.
Middle-end and back-end platforms. M&G Colipu further boosted multi-business platforms and
customer expansion, exerted more efforts in developing and operating new platforms, and kept
strengthening its platform management capability. The nationwide layout and efficiency of warehousing
were improved, and the warehouse in Northwest China was put into official operation. By developing an
innovative digital platform system to optimise business procedures, M&G Colipu stepped up digital
construction, empowered the centralized procurement of governments and enterprises with digital
capability, and realised cost reduction and efficiency improvement. By piloting electronic invoices with
corporate customers and upgrading the five major self-developed engines, M&G Colipu assisted
customers' digital transformation with its own digital capability.
During the Reporting Period, challenging as the environment was, M&G Colipu still maintained
steady growth in operating results. It recorded revenue of RMB13.30 billion, an increase of 21%; and a
net profit of RMB401 million, an increase of 8%.
Unit: RMB 0'000
M&G Colipu 2023 2022 2021 3-year average
Revenue 1,330,699.41 1,092,965.31 776,565.05 1,066,743.26
Net profit 40,120.65 37,156.87 24,198.53 33,825.35
7. Actively promote overseas markets layout
During the Reporting Period, the Company sped up the expansion of overseas markets. Based on
local characteristics, the Company developed localized products to enhance overseas competitiveness of
its products, and sorted out the product development process and improved product management
efficiency for prompt satisfaction with consumers' needs in overseas markets. Shouldering the mission of
"providing affordable stationery for local students", the Company continued to explore the African
market, and carried out product promotion activities and made donations to schools, enabling more
students to use cost-effective products of M&G. In the Southeast Asian market, the Company made
positive channel arrangements, improved operation quality, and further enhanced the influence of M&G
brand. Amid the changing external environment, the Company saw rapid growth of overseas sales and
continuously improving product competitiveness, brand influence and channel development capability,
with the overall operation, management and team-building capabilities in overseas markets significantly
boosted.
8. M&A progress
Noteworthy Axus Stationery turnaround. During the Reporting Period, Axus Stationery continued
to optimise its operation quality, made reasonable configuration of the production capacity and resources
of its production bases, improved the supply chain strategy to reduce procurement and manufacturing
costs, and took positive measures to increase income and reduce expenditure in all business segments.
As for overseas sales, it took the initiative to increase overseas orders while boosting online and offline
development of domestic business, seeing a noteworthy turnaround.
Beckmann, a Norwegian brand, developed steadily. During the Reporting Period, Beckmann's
business developed steadily, seeing revenue of approximately RMB150 million. It also recorded stable
operation in overseas markets, and sold products in China through online flagship stores on platforms
such as Tmall, JD, and Douyin, as well as offline stores of Jiumu Store and M&G Life, enjoying
popularity among domestic consumers.
9. Protect shareholders' rights and interests
Due to confidence in its future development and corporate value, the Company launched a share
repurchase plan to protect the interests of the Company and its shareholders, improve the Company's
long-term incentive mechanism, and fully mobilise the enthusiasm of employees. The repurchased
shares would be used as equity incentives or in employee stock ownership plans. From November 2022
to February 2023, the Company repurchased, through the stock exchange, a total of 2.85 million shares
with RMB0.15 billion.
The Company safeguards shareholders' rights and interests and adopts a consistent dividend policy.
It brings investors long-lasting and stable return on investment through cash dividends and other profit
distribution ways, and shares with shareholders the operating results of the Company. The Company's
cash dividend per share for 2023 is expected to be RMB0.8 (to be deliberated by the general meeting of
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shareholders), and cash dividends and share repurchases are expected to account for 50% of the net
profit attributable to the parent company. Since the Company went public in 2015, including the profit
distribution plan for 2023, the cumulative cash distribution has exceeded RMB3.5 billion.
10. Sustainable development
During the Reporting Period, the Company continued to advance sustainable development centring
on its four major strategic pillars, and its MSCI ESG rating was upgraded to "BBB". In terms of
sustainable products, it rolled out the first Carbon Neutrality series of stationery; in response to climate
change, it verified Scope 1 and Scope 2 greenhouse gas emissions methodically; in terms of sustainable
supply chain, it revised and refined the ESG assessment standards for suppliers, as for employee and
community empowering, it took multiple measures to enhance employees' well-being and continuously
carried out charitable donation and public welfare projects.
The Company made constant progress in green innovation and R&D, in a bid to disseminate the
sustainability value and concept to consumers, offer more green products and services, lead the
sustainable development of the industry, and forge ahead steadily on the way to the joint-creation of
sustainable business development in the future. The Company's sustainable consumption practice was
included in the Progress Report on the Global Sustainable Consumption Initiative, and was awarded as a
"Best ESG Practice Case of Listed Company in 2023" by the China Association for Public Companies.
II. Industry Situation of the Company during the Reporting Period
1. Industry situation of the Company
According to Industrial Classification and Codes for National Economic Activities (GB/T
4754-2017) issued by the National Bureau of Statistics, the Company is classified to stationery, arts,
sports and entertainment products industry in the manufacturing sector. The Company is a member of
China Stationery & Sporting Goods Association, and China Writing Instrument Association.
Between January and November 2023, 245 enterprises above designated size in the China Writing
Instrument Association recorded RMB13.6 billion of revenue, showing an increase of 2.9% from
previous year. (Source: China Writing Instrument Association). According to data from the relevant
e-commerce platform, stationery sales on Taobao grew 7% in 2023.
The demand for stationery and office supplies were affected due to the joint release of Opinions on
Further Reducing the Burden of Homework and Off-Campus Training in Compulsory Education by the
General Office of the Central Committee of the CPC and the General Office of the State Council in July
2021 ("Double Reduction"). Meanwhile, China encourages aesthetic education and quality education for
students, deepens the integration of sports and education, and promotes the healthy development of
teenagers, which brings about new development opportunities for painting and calligraphy supplies,
educational books, cultural and creative student supplies, digital and intelligent stationery, and
teenagers’ sports equipment suitable for physical exercise on campus.
The market of the direct office supplies has been growing very fast in China. According to the
China Public Procurement Development Report (2022) compiled and released by China Federation of
Logistics & Purchasing, the scale of public procurement transactions in China in 2022 exceeded RMB48
trillion. This indicates that the rate of centralised procurement aiming to improve efficiency and save
costs has grown year by year.
2. Industry features
(1) Periodicity
Writing instruments, student stationery and office supplies are less affected by economic
fluctuations. With low unit price, writing instruments and student stationery are more of necessity goods
with relatively low income elasticity, relatively less sensitive to economic fluctuations.
(2) Seasonality
There is seasonality in the demand for student stationery. Months before a new semester (summer
and winter vacation) is what the stationery industry calls "schooling peak season", during which sales of
student stationery usually peaks. Students and their parents will buy a lot of stationery in advance and
stationery manufacturers promote their products.
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There is less seasonality in the demand for student stationery. However, the demand for office
stationery in the second half of the year might be slightly higher than that in the first half, as some
companies bought stationery at the end of the year.
3. Development trend of the industry
With the changes in the way of life and consumption habit of consumers, China’s retail industry
entered a new stage of redevelopment and innovation. Stationery industry faces challenges with
uncertainty of external environment, diversification of retail channels, and more individualized demands
from main customers group (now being the post-90s and post-00s). With the changing demographics of
China in particular the decreasing birth rate, stationery industry revenue growth comes less from by unit
volume growth, and more from consumption upgrade and product upgrade. Domestic market demand
for mid- to high-end stationery products keeps increasing, reshaping market structure dominated by
low-end products. This provides opportunities for mid- to high-end stationery products with better
quality and higher price. China's population of 1.4 billion accounts for about 18% of global population,
while leading stationery companies in China can continue to mostly rely on the huge domestic market,
they also have room for international expansion in international markets, which could reinforce each
other under favorable conditions.
Leading enterprises focused on building omni-channel operation capabilities and implemented
refined management. With the popularity of the Internet, smart phones, and online transactions, people's
consumption habits and consumption scenarios have changed. Consumers' access to information is
becoming more fragmented, and new-generation marketing means are becoming more diversified,
including online media platforms (such as Weibo, WeChat, Xiaohongshu, and Douyin) and IP topic
creation, which further tests enterprises' ability to make quick response to industry trends. Compared
with small- and medium-sized enterprises, leading enterprises boast stronger and richer whole network
marketing and operation capabilities. They formulate refined marketing strategies by city to reach
consumers. In addition to online traffic, offline channels are also required to realize refined management
by empowering channels through organizational reform and information system. According to the
National Bureau of Statistics, online retail sales across the country recorded RMB15 trillion in 2023, an
increase of 11%. Outstanding companies in the consumer industry seized the development opportunities
of online consumption and achieved continuous sales growth through online and offline integration.
Traditional retail stationery shops nearby school are still the dominant channel for China’s
stationery industry, and shares of other retail formats are increasing faster. Sales terminals and channels
of the industry are becoming more diversified, upgrading and competition in channels becomes more
obvious. Domestic consumption for stationery in China becomes more brand conscious, innovative,
individualized and more premium. There is a growing demand for premium cultural and creative
products, stationery products are moving from those primarily focus on functionality towards those with
more cultural and creative elements catering to customers. There are around thousands of stationery
manufacturers in China's domestic stationery industry and the industry is quite decentralized. There are a
few leading companies for most sub-category stationery products, with continued development in the
stationery industry, there could be higher industry consolidation, and leading companies could gain
larger market shares.
In recent years, in the context of the digital economy, thanks to favorable factors such as policy
driving, the rapid advancement of centralized procurement by large- and medium-sized enterprises, and
the competition among various digital procurement service providers, great progress has been made in
the digitalization, e-commerce and centralization of public procurement in China, which have become
the main form of public resource transactions from central to local governments. According to the China
Public Procurement Development Report (2022) compiled and released by China Federation of
Logistics & Purchasing, the scale of public procurement transactions in China in 2022 exceeded RMB48
trillion. This indicates that the rate of centralised procurement aiming to improve efficiency and save
costs has grown year by year. According to the measurement of www.chyxx.com, the market size of
office supplies in China exceeds RMB2 trillion. In addition, the market size of employee benefits and
other categories is also quite large.
According to the 2022 Digitalized Procurement Development Report compiled and released by the
China Federation of Logistics & Purchasing, central state-owned enterprises have grown into the leader
of digitalised procurement in China, driving China's digitalised procurement into the vigorous
innovation stage. This is a novel exemplar of various medium and large enterprises in digitalised
procurement and has encouraged the servicers and suppliers to speed up digital transformation and
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upgrading. As a result, a group of new digitalised procurement platforms are growing, attracting capital
into the real economy and thus supporting the innovation of industrial and supply chains.
With the further development and application of information technology, data have become a new
production element. Industrial digitisation is becoming a major pillar of the digital economy, and
traditional industries are actively gaining new development momentum through digital empowerment.
The investment in the manufacturing industry has shifted from the investment in equipment and
assembly lines to the transformation of digital processes and digital transformation of products, in a bid
to apply digital technology to reduce channel costs and management costs and become a digital-driven
modern enterprise.
With smart technology and products upgrade, promotion of national education informatization and
the development of the online education market, smart stationery products have developed rapidly in the
past few years. Technology-empowered smart pens and smart books are widely adopted in online
education, providing an increasingly better user experience. Technology-empowered smart pens and
smart books are widely adopted in online education, providing a better user experience.
4. Company position in the industry
As a leader of "own brand + domestic demand" in China's stationery industry, the Company has a
strong first-mover and leading advantage, with a wide and deep distribution network coverage in China's
stationery market. At the end of the Reporting Period, the Company has a national distribution network
covering approximately 70,000 retail stationery shops using the store sign "M&G Stationery" across
China, enabling the Company to establish market leading position for its own brand products amidst
competitions. The Company ranked first in "Top Ten Enterprises in China's Light Industry and Writing
Instrument" for 12 consecutive years.
M&G Colipu is a leader in the field of B2B e-commerce procurement in China. After 11 years
since its start, thanks to its electronic transaction system, intelligent warehousing logistics management
system, high-quality supply chain management and customized service, M&G Colipu has become one of
the industry leaders of digital enterprise procurement service provider. For many years, M&G Colipu
has won many awards such as the Outstanding E-commerce Platform in China's Stationery and Office
Supplies Industry, the Outstanding Supplier of Government Procurement, and the Most Influential
E-commerce Platform in Financial Procurement.
III. The Company's Businesses during the Reporting Period
1. Principal business
M&G Stationery is a comprehensive stationery supplier and an office servicer. The Company
integrates the value of creativity into its products and service advantages, advocates fashionable
stationery lifestyle, and provides solutions for study and work. Its core traditional businesses include
designing, developing, manufacturing and selling writing instruments, student stationery, office supplies
and other products under brands, and also the e-commerce business M&G Technologies;
its new businesses mainly comprise of large retail store business - Jiumu Store and M&G Life, and
direct office supplies business - M&G Colipu. During the Reporting Period, there were no significant
changes in the Company's operation model. In recent years, the Company's new business has been
growing rapidly, and the proportion of new business revenue to total revenue has been increasing year
by year. The Company will continue to focus on its core traditional business and expand its
competitiveness in the global stationery industry in the new five-year strategy.
2. Principal operation model
The Company has an independent and complete operation from design and development of brands
and products, procurement of raw materials and accessories, product manufacturing, supply chain
management and warehouse and logistics, to distribution network management. The Company is capable
of performing independent operation of business in the market. For R&D model, the Company has an
"entire design system" covering the whole process starting from customer value proposition to product
design, product mold to brand image design, incorporating trend-, theme and experience-oriented R&D
model to develop new products with a comprehensive categories approach based on consumer insight.
For manufacturing model, the Company uses the brand manufacturing model that features sales-driven
production, in-house and OEM outsourcing. The Company has an independent system from raw material
procurement to manufacturing and selling, and has established its brands in the market. We have the
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advantages from participating in the whole value chain from design, research and developing,
manufacturing and selling stationery. For sales model, based on features of stationery products and
current situations of domestic stationery consumption, the Company has developed its sales model that
relies on regional distributors, complemented by direct sales to offices 2B customers, direct-sale store,
KA sales, online sales, as well as international distribution. We are the one of leading companies in
China’s stationery business that engage in large-scale brand sales management and franchise
management. In addition to operations on platforms such as Tmall, JD, and Pinduoduo, M&G
Technologies also conducts live streaming on platforms such as Douyin and Kuaishou through its own
live streaming room or cooperation with KOLs on the platforms. M&G Technologies is also responsible
for online full platform marketing and management of authorized online stores.
M&G large retail store businesses include two store types: Jiumu Store and M&G Life. Targeting
female consumers aged 15-29, Jiumu Store primarily sells stationery, cultural and recreative products,
educational and entertainment products, and daily household and home products. Jiumu Stores are
mostly located in high-quality shopping malls in prime urban districts. Jiumu Store represents the
Company's ongoing exploration in new retail model in lifestyle products with a distinct cultural element.
Jiumu Store started franchising in July 2018, where franchisees pay contract deposit and decoration fee
according to contracts, and store rent, store staff salary, utilities and other costs incurred in franchising
stores. M&G Life mainly targets students aged 8-15, primarily selling stationery products. M&G Life
stores are mostly located in Xinhua Bookstore and compound bookstores. M&G Life represents the
Company's efforts to move beyond the dominant traditional channels of retail stationery shops nearby
schools.
In the direct office supplies business, M&G Colipu provides central government-owned enterprises,
governments, public institutions, Fortune Global 500 companies and other SMEs with cost-effective
one-stop supplies procurement service. M&G Colipu has a rich product offering, covering four major
business divisions—one-stop office supplies, MRO industrial products, marketing gifts, and employee
benefits, which include more than one million product categories such as office paper, office stationery,
office supplies, office equipment, computers and accessories, digital and communications, office
appliances, daily necessities, labor protection industrial supplies, food and beverages, business gifts and
office furniture. By shortening the supply chain, M&G Colipu provides customers with cost-effective
procurement and customized value-added services.
With changing demographics of China in particular the decreasing birth rate, it becomes
increasingly difficult to achieve revenue growth from unit volume growth in the future, and stationery
industry growth is increasingly driven by consumption upgrade and product upgrade. The Company’s
core traditional businesses are challenged with changing demands from more individualized population
born after 1990 and 2000. Stationery consumption in China is becoming more brand conscious,
innovative, individualized and more premium. There is a clear growth in demand for better cultural and
creative products, which accelerates industry transformation towards one with more cultural and creative
elements. M&G Technologies reflects channel diversification trend and helps the Company's
omni-channel strategy by expansion of online business. Jiumu Store serves as the Company's bridgehead
to continue products and channels upgrading of its core traditional business, and it plays an important
role in promoting the Company's brands and products upgrade. M&G Colipu's direct office supplies
business meets demands for purchasing office supplies from large corporations and institutions, which
helps boosting the sales of writing instruments and office stationery of the Company's core traditional
business.
3. Major driver for revenue growth
Driven by market force
With the changes in the way of life and consumption habit of consumers, the mix of "people,
product, and place" in retail industry has been reconstructed, sales channels have become more
diversified, and channel upgrades and channel competition have become increasingly fierce. As the
domestic market demand for mid- to high-end stationery products keeps increasing, this provides
opportunities for mid- to high-end stationery products. China has a population of around 1.4 billion,
accounting for about 18% of the global population, while leading stationery companies in China can
continue to mostly rely on the huge domestic market, they also have room for international expansion in
international markets, which could reinforce each other under favorable conditions.
Driven by innovation
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Innovation as one of driving forces for continuous development with a focusing on consumers. The
Company continued to promote technological innovation, product innovation, channel innovation and
business model innovation. Through product innovation and business model innovation, the Company
has formed a pattern of coordinated development, high-quality development and sustainable
development of multi-business model. Meanwhile, it actively promoted the high-end, intelligent and
green transformation in its business operations, and coordinated the upgrading of traditional businesses,
the growth of emerging businesses and the cultivation of future businesses.
Driven by the Company's competitive advantages
With professional teams, market insights, unique brand advantages, channel advantages, supply
chain advantages, R&D and design advantages, the Company continued to promote technological
innovation and product innovation, and maintained a strong forward driving force through high-end,
omni-channel, digital empowerment, lean production and dynamic organization.
Driven by policy
The continuous investment of the state in education, the three-child policy and a favorable policy
context for the development of the cultural industry encourage and promote the integrated development
of the cultural industry and upstream and downstream industries, invigorate economic transformation
and social development, and drive the steady development of the stationery industry. A series of national
policies on the centralized procurement industry have been promulgated, rapid progress was made in
centralized procurement of large- and medium-sized enterprises, various digital procurement service
providers competed with each other, the transparency of procurement information and the competitive
mechanism of centralized procurement promoted the concentration of office supplies industry and
promoted the vigorous development of direct office supplies industry.
Driven by industry integration
With continued development in the market, market concentration of stationery industry becomes
greater, leaving more room for industry consolidation. Leading companies in the stationery industry with
good brand recognition are in a strong position, and more market share is gained by leading companies.
Through mergers and acquisitions of high-quality targets at home and abroad, the Company further
enhanced its competitiveness and brand power in segmented categories.
IV. Analysis on Core Competitiveness during the Reporting Period
√ Applicable □ Not applicable
As one of the largest stationery manufacturers in the world, the Company enjoys unique
competitive advantages in terms of brand, channel, supply chain, design, and R&D in its core traditional
business. As for the direct office supplies business, M&G Colipu leads the way as a supplier for
governments and enterprises in the online channel. During the Reporting Period, no significant change
occurred to the core competitive edges of the Company, which are summarized as follows:
1. Corporate culture and team
M&G is a company with a strong sense of mission and social responsibility. With the mission of
"make study and work more joyful and effective", it is committed to providing Chinese students with
affordable good domestic stationery, and continues to devote itself to various social welfare
undertakings, thereby promoting its continuous development. At the same time, the Company has
cultivated a team that highly recognizes the Company's values, has passion and technology, is
competitive in the industry, is united and enterprising, and keeps unremitting struggle.
2. Brand advantage
As a leader of "own brand + domestic demand" in China's stationery industry, the Company has
established a leading position for its own brand products amidst competitions of domestic market. The
Company ranked the first in "Top Ten Enterprises in China's Light Industry and Writing Instrument" for
12 consecutive years. M&G brand has sound brand recognition among consumers, and served as the
designated stationery brand for Boao Forum for Asia for many years. The Company has won the title of
"China Annual No.1 Stationery Brand Award" and "China's 500 Most Valuable Brands" for three
straight years, winning international praise with excellent quality and brand reputation and showing the
brand value of Chinese stationery to the world.
3. Channel advantage
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The Company has a strong first-mover and leading advantage with a wide and deep coverage of
distribution network across China. The Company has established an efficient distribution management
system and a domestic terminal network with deep penetration. During the Reporting Period, the
Company continued to broaden and deepen the national network and perfected online and offline
channels, forming an omni-channel, multi-level and multi-contact marketing network. At the end of the
Reporting Period, the Company has 36 tier-one distributor partners, and about 1,200 tier-two and
tier-three distributor partners across China, covering approximately 70,000 retail stationery shops with
"M&G Stationery" logo across China, over 600 large retail stores, and more than one thousand of
authorized stores in Taobao system, JD.com, Pinduoduo and other e-commerce channels.
4. Supply chain advantage
The Company benefits from experience of large-scale manufacturing accumulated throughout the
past years, independent mold development capability, stable supply chain, sound quality control system
and introduction of various information management systems. The Company has the capability of
large-scale manufacturing with high quality control standard. The good and stable product quality has
won general recognition and favorable comments from consumers. The Company promotes the
application of intelligent manufacturing technology in the production and inspection links of the
stationery industry, and applies machine vision technology in various key links to greatly improve the
efficiency of production and inspection, thus serving as a benchmark and demonstration role for
transforming the extensive industrial mode into an intensive one.
With the idea of partnership in its business operation, the Company has strived to build a high
standard supply chain ecosystem. The Company keeps iterating and upgrading its scientific management
for supply chain, and has obtained new practice achievements in information collaboration across the
value chain, inventory optimization, financial support for supply chain, management informatization of
quality and order, and optimization of supplier performance to help business partners get stronger
operation system and simultaneously improve both loyalty and operation capability of our business
partners.
5. Design and R&D advantage
The Company has the capability to respond timely to market and strong R&D capacity for new
products. The Company conducts market research for new product development and identifies market
trends. The Company launches about one thousand new products each year to meet consumer needs. The
Company has been awarded with such four major international industrial design awards as German iF
Award, Red Dot Design Award, G-mark, and IDEA for its product design. The Company has a design
studio in Israel, highlighting the world-class design capabilities of M&G Stationery. M&G Self-stopping
Steel Tape Pro Measure is a winner of the 2023 Contemporary Good Design Gold Award, and M&G
Blackblade Pro Hobby Knife is a winner of the 2023 Contemporary Good Design Award. As of the end
of the Reporting Period, the Company owned more than 1,200 patents for invention, design and utility
models.
The Company has broken through the foreign technical barriers and got hold of the raw material
formula and production technology with domestic independent intellectual property rights, greatly
enhancing the percentage of home-made raw materials and finished products. The Company has been
recognized as a national high-tech enterprise since 2010, and has built a number of national or provincial
level technology platforms such as National Industrial Design Center, China Key Laboratory of Light
Industry and Writing Instrument Engineering Technology, Shanghai Writing Instrument Engineering
Technology Research Center. The testing laboratory of the Company had CNAS certification
qualification and its testing capabilities have reached a world-class level. During the Reporting Period,
the Company participated in the formulation of 25 national, industry and group standards, expanding its
presence from the pen industry to stationery, sporting goods, calligraphy and other industries.
6. M&G Colipu's competitive advantages
M&G Colipu is committed to providing one-stop procurement service solutions for customers in
five categories including government, State-owned Key Enterprises and state-owned enterprises, finance,
intermediate market (top 500 private enterprises), and MA (Fortune Global 500), with business scenarios
covering one-stop office supplies, MRO industrial products, marketing gifts, and employee benefits.
Currently, M&G Colipu has evolved into a leading supplier for governments and enterprises in the
online channel, enjoying high brand influence in the industry and being widely recognised by customers
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Annual Report 2023
and suppliers regarding reputation.
Over the years, M&G Colipu has made meticulous arrangements for the supply chain of
manufacturers. Its product development covers well-known brands at home and abroad, with more than
millions of product categories. It selects well-reputed manufacturers and brands at home and abroad to
achieve direct supply, which omits the intermediary distribution process. Moreover, M&G Colipu boasts
a well-developed qualification and licence system, of which the coverage ranges from food safety to
medical devices.
Additionally, M&G Colipu enjoys a nationwide logistic distribution network. It also has an
industry-leading intelligent main warehousing system, "Automated Storage and Retrieval System
(AS/RS) System", and a new intelligent warehouse in East China, covering the whole country and
allowing efficient and rapid order response. Furthermore, M&G Colipu is equipped with intelligent
logistic systems, such as automated guide vehicles (AGVs), to provide timely and accurate services for
customers.
As a pioneer and industry leader in procurement digitalisation, M&G Colipu has won the titles of
National E-commerce Demonstration Enterprise and Shanghai E-commerce Demonstration Enterprise. It
has a technical R&D team of approximately one hundred members. M&G Colipu has a business cloud
system that allows comprehensive digital management such as online organisation, communication,
business, and management. M&G Colipu has independently developed a digital transaction system and
rapid and professional system integration development technology, which has been certified as
Information System Security Protection Grade III, allowing it to provide a variety of personalised
value-added services for different customers, ensure the security and completeness of transaction data,
and achieve system integration with key customers.
M&G Colipu has a professional team of nearly 2,000 people with enterprising spirit and years of
industry experience, providing end-to-end services from pre-sales to after-sales across 31 provinces,
municipalities and autonomous regions in China. Relying on a strong brand presence, strong financial
strength, and rich product strength, M&G Colipu adheres to the information-based construction of an
integrated, transparent and efficient procurement system. With the application of software and hardware
intelligent technology and strong system integration technical support, such procurement system meets
the diversified, complex and digital procurement needs of customers, keeps increasing comprehensive
competitiveness, and continues to create value for customers.
V. Financial Performance during the Reporting Period
In 2023, the Company’s revenue was RMB23,351 million, representing a year-on-year increase of
16.78%. The net profit attributable to shareholders of the listed company amounted to RMB1,526
million, representing a year-on-year increase of 19.05%, while net profit attributable to shareholders of
the listed company after deducting non-recurring profit and loss amounted to RMB1,398 million,
representing a year-on-year increase of 21.00%. As at the end of 2023, the total asset of the Company
amounted to RMB15,313 million, representing a year-on-year increase of 17.60%. The net asset
attributable to shareholders of the listed company amounted to RMB7,833 million, representing a
year-on-year increase of 14.36%. The Company has maintained healthy growth and its assets are in a
good condition.
(I) Analysis of principal operation
1. Analysis of change in certain items in income statement and cash flow statement
Unit: Yuan Currency: RMB
Amount in the current Amount in the same Change in the
Item
period period last year proportion (%)
Revenue 23,351,304,328.03 19,996,315,623.32 16.78
Operation cost 18,946,902,789.11 16,124,239,558.86 17.51
Selling expenses 1,550,242,913.35 1,358,215,903.43 14.14
Administrative expenses 817,243,965.61 794,196,566.05 2.90
Financial expenses -54,677,552.48 -41,367,225.24 Not applicable
R&D expenses 177,525,143.59 183,553,643.90 -3.28
Net cash flow generated from
2,616,600,617.09 1,351,783,827.08 93.57
operating activities
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Annual Report 2023
Net cash flow generated from
30,115,778.76 -151,492,348.67 Not applicable
investing activities
Net cash flow from financing
-771,123,342.97 -922,149,601.16 Not applicable
activities
Investment income -3,932,454.66 275,500.09 -1527.39
Losses on credit impairment -21,830,178.85 7,200,691.02 -403.17
Losses on assets impairment 11,744,806.55 -18,667,188.79 Not applicable
Gains from asset disposal 3,588,809.94 -31,622.53 Not applicable
Explanation on the reason for change in financial expenses: The interest income during the
Reporting Period increased compared with the same period last year.
Explanation on the reason for change in net cash flow generated from operating activities: The sales
and cash inflow increased during the Reporting Period.
Explanation on the reason for change in net cash flow from investing activities: The net cash inflow
from investing activities during the Reporting Period increased compared with the same period last year,
mainly because the net redeemed amount of bank financial products during the Reporting Period
increased compared with the same period last year.
Explanation on the reason for change in investment income: The losses on investments in associates
increased compared with the same period last year.
Explanation on the reason for change in losses on credit impairment: The expected credit losses
increased during the Reporting Period mainly due to the increased accounts receivable of M&G Colipu
(reversal of expected credit losses in the same period last year), and because changes occurred to
accounting estimates relating to security deposits for property leases. For further information, see the
Announcement of Shanghai M&G Stationery Inc. on Changes in Accounting Estimates (Announcement
No. 2022-030) disclosed by the Company on the website of the Shanghai Stock Exchange on 1 July
2022.
Explanation on the reason for change in losses on assets impairment: The sales increased during the
Reporting Period, resulting in faster inventory turnover and decreased inventory valuation allowances.
Explanation on the reason for change in income from asset disposal: Asset disposal generated
income during the Reporting Period, while it incurred loss in the same period last year.
A detailed description of the major changes in the Company's business type, profit composition or profit
source in the current period
□ Applicable √ Not applicable
2. Analysis of revenue and cost
√ Applicable □ Not applicable
During the Reporting Period, exclusive of related-party transactions, the Company's core traditional
business increased by 6% as compared to the corresponding period of last year, and new business
increased by 24% as compared to the corresponding period of last year.
(1) Result of principal business by industry, product, region and sales model
Unit: Yuan Currency: RMB
Result of principal business by industry
Change in Change in Change in gross
Gross
revenue cost from profit margin
By industry Revenue Operation cost margin
from last last year from last year
(%)
year (%) (%) (%)
Increase by 1.43
Manufacturing and sales of
9,051,114,445.63 6,077,325,987.81 32.86 7.20 4.96 percentage
stationery and office supplies
points
Decrease by 0.57
Retail industry 14,249,716,005.72 12,834,514,791.81 9.93 23.46 24.25
percentage point
Service industry 1,825,471.64 / / 158.00 / /
Result of principal business by product
Change in Change in Change in gross
Gross
revenue cost from profit margin
By product Revenue Operation cost margin
from last last year from last year
(%)
year (%) (%) (%)
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Annual Report 2023
Increase by 2.35
Writing instruments 2,273,272,616.04 1,319,857,248.91 41.94 4.83 0.75 percentage
points
Increase by 1.58
Student stationery 3,466,456,140.76 2,286,895,433.46 34.03 8.58 6.04 percentage
points
Increase by 1.31
Office stationery 3,510,698,230.28 2,540,457,217.01 27.64 8.91 6.97 percentage
points
Increase by 0.34
Other products 743,409,402.45 409,554,808.88 44.91 57.71 56.75
percentage point
Decrease by 1.20
Direct office supplies 13,306,994,061.82 12,355,076,071.36 7.15 21.75 23.34 percentage
points
Management fee for
1,825,471.64 / / 158.00 / /
franchising
Result of principal business by region
Change in Change in Change in gross
Gross
revenue cost from profit margin
By geography Revenue Operation cost margin
from last last year from last year
(%)
year (%) (%) (%)
Decrease by 0.68
China 22,448,395,918.68 18,296,035,315.91 18.50 16.41 17.39
percentage point
Increase by 4.06
Other countries and regions 854,260,004.31 615,805,463.71 27.91 21.61 15.13 percentage
points
Principal business by industry, product, region, and sales model
1. Revenue from principal business of the Company includes revenue from manufacturing and selling
stationery and office supplies, revenue from retail industry and revenue from service industry.
2. Revenue from retail industry refers to revenue gained by M&G Colipu and M&G Life through selling
non-M&G products.
3. Revenue from service industry refers to management fee for franchising. The increase in revenue
from services during the Reporting Period was mainly due to the increased number of new franchised
stores opened by Jiumu Store as compared to the same period last year.
4. Writing instruments refer to products of writing utensil sold by the Company (excluding M&G
Colipu).
5. Student stationery refers to products of student stationery sold by the Company (excluding M&G
Colipu).
6. Office stationery refers to products of office supplies sold by the Company (excluding M&G Colipu).
7. Other products refer to products sold by the Company (excluding M&G Colipu) apart from writing
instruments, student stationery and office supplies. During the Reporting Period, the increased revenue
and operation cost of other products were mainly due to the increased sales of Jiumu Store.
8. Direct office supplies refer to products in all categories sold by M&G Colipu.
Unit: RMB 0'000
Result of revenue by business
Business Revenue in 2023 Revenue in 2022 Change in amount Change
Core traditional
913,583.84 849,450.59 64,133.25 8%
business
Direct office
1,330,699.41 1,092,965.31 237,734.10 22%
supplies business
Large retail store
133,535.55 88,414.44 45,121.11 51%
business
Transactions offset -42,688.36 -31,198.78 -11,489.58 Not applicable
Total 2,335,130.43 1,999,631.56 335,498.87 17%
(2) Analysis of production and sales volume
√ Applicable □ Not applicable
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Annual Report 2023
Change
Change in Change in
in sales
production inventory
Major products Unit Production Sales Inventory from
from last from last
last year
year (%) year (%)
(%)
Writing instruments Piece 1,906,548,849 1,950,063,062 513,354,914 -2.90 -2.75 -7.81
Student stationery Piece 5,439,484,457 5,471,333,888 604,183,892 2.02 2.06 -5.01
Office stationery Piece 1,915,216,751 1,899,571,587 176,260,915 7.20 6.18 9.74
Other products Piece 20,909,207 19,603,430 9,132,579 53.00 46.52 16.68
Direct office supplies Numbers 507,567,235 516,806,148 15,127,923 -13.67 -11.71 -37.92
Explanation on production and sales volume
The production and sales of other products increased mainly due to the increased sales of Jiumu Store.
The inventory of direct office supplies decreased mainly due to the decreased inventory of M&G Colipu.
(3) Performance of major procurement contracts and major sales contracts
□ Applicable √ Not applicable
(4) Analysis of cost
Unit: RMB Yuan
By industry
Percentage
change in
the
Percentage
Percentage amount for
of total
of total the current Explanation
Amount in the Amount in the same costs for
By industry Cost item costs for period as on the
current period period last year the same
the current compared situation
period last
period (%) to the
year (%)
same
period last
year (%)
Manufacturing and
Cost of principal
sales of stationery 6,077,325,987.81 32.14 5,790,028,407.81 35.92 4.96
business
and office supplies
Cost of principal
Retail industry 12,834,514,791.81 67.86 10,329,869,794.11 64.08 24.25
business
Service industry / / / / / /
By product
Percentage
change in
the
Percentage
Percentage amount for
of total
of total the current Explanation
Amount in the Amount in the same costs for
By product Cost item costs for period as on the
current period period last year the same
the current compared situation
period last
period (%) to the
year (%)
same
period last
year (%)
Cost of principal
Writing instruments 1,319,857,248.91 6.98 1,310,085,322.72 8.13 0.75
business
Cost of principal
Student stationery 2,286,895,433.46 12.09 2,156,659,331.50 13.38 6.04
business
Cost of principal
Office stationery 2,540,457,217.01 13.43 2,374,864,626.63 14.73 6.97
business
Cost of principal
Other products 409,554,808.88 2.17 261,286,252.03 1.62 56.75
business
Cost of principal
Direct office supplies 12,355,076,071.36 65.33 10,017,002,669.04 62.14 23.34
business
Management fee for
/ / / / / /
franchising
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Annual Report 2023
Explanation on other situations of cost analysis
Cost increased simultaneously with sales. The increase in operation cost of other products is mainly due
to the increased sales of Jiumu Store.
(5) Change in the scope of consolidation due to change in the equity of major subsidiaries during
the Reporting Period
□ Applicable √ Not applicable
(6) Major change in or adjustment to the Company's business, products or services during the
Reporting Period
□ Applicable √ Not applicable
(7) Major customers and suppliers
A. Major customers of the Company
Sales of the top 5 customers amounted to RMB6,005.71 million, accounting for 25.72% of the total
annual sales. Of the sales of the top 5 customers, sales of related parties amounted to RMB0, accounting
for 0% of the total annual sales.
Unit: RMB Yuan
Rank Customer name Sales amount As % of the annual total sales
1 First 1,992,246,494.88 8.53
2 Second 1,818,941,131.54 7.79
3 Third 901,373,596.40 3.86
4 Fourth 661,694,062.54 2.83
5 Fifth 631,452,680.05 2.71
Total 6,005,707,965.41 25.72
During the Reporting Period, the sales attributable to a single customer exceeded 50% of the total sales,
there are new customers among the top 5 customers, or a small number of customers were heavily
depended on.
□ Applicable √ Not applicable
B. Major suppliers of the Company
Purchase amount of the top 5 suppliers amounted to RMB1,634.18 million, accounting for 8.60% of the
total annual purchase amount. Of the purchase amount of the top 5 suppliers, purchase amount of related
parties amounted to RMB0, accounting for 0% of the total annual purchase amount.
Unit: RMB Yuan
As % of the annual total
Rank Supplier name Procurement amount
procurement
1 First 432,425,516.22 2.28
2 Second 412,548,319.42 2.17
3 Third 302,696,787.56 1.59
4 Fourth 299,172,513.72 1.57
5 Fifth 187,336,738.45 0.99
Total 1,634,179,875.37 8.60
During the Reporting Period, the procurement from a single supplier exceeded 50% of the total amount,
and there were new suppliers among the top 5 suppliers or a small number of suppliers were heavily
depended on.
□ Applicable √ Not applicable
Other descriptions
No
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Annual Report 2023
3. Expenses
√ Applicable □ Not applicable
Unit: RMB Yuan
Amount in the Amount in the last Change in the
Item in statement Reason for change
current period period proportion (%)
Selling expenses 1,550,242,913.35 1,358,215,903.43 14.14
Administrative
817,243,965.61 794,196,566.05 2.90
expenses
R&D expenses 177,525,143.59 183,553,643.90 -3.28
The interest income during the
Reporting Period increased
Financial expenses -54,677,552.48 -41,367,225.24 Not applicable
compared with the same period
last year.
4. R&D investment
(1) Table of R&D investment
√ Applicable □ Not applicable
Unit: RMB Yuan
Expensed R&D investment in the current period 177,525,143.59
Capitalized R&D investment in the current period 0.00
Total R&D investment 177,525,143.59
Proportion of total R&D investment in revenue (%) 0.76
Percentage of capitalized R&D investment (%) 0.00
(2) Details of R&D personnel
√ Applicable □ Not applicable
Number of the Company's R&D staff 503
Percentage of the number of R&D staff to the Company's total
8.61
number of employees (%)
Educational background structure of R&D personnel
Category Number of people
Doctor's degree 0
Master's degree 37
Bachelor 292
College degree 111
High school and below 63
Age structure of R&D personnel
Category Number of people
< 30 years old (exclusive) 247
30 - 40 years old (including 30 years old, excluding 40 years old) 184
40 - 50 years old (including 40 years old, excluding 50 years old) 48
50 - 60 years old (including 50 years old, excluding 60 years old) 24
> 60 years old 0
(3) Explanation
√ Applicable □ Not applicable
The total R&D investment of the parent company accounted for 3.43% of the parent company's revenue.
(4) Reasons for the major changes in the composition of R&D personnel and the impact on the
future development of the Company
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Annual Report 2023
□ Applicable √ Not applicable
5. Cash flow
√ Applicable □ Not applicable
Unit: RMB Yuan
Change in
Amount in the Amount in the same the
Item Reason for change
current period period last year proportion
(%)
Net cash flow
generated from The sales and cash inflows increased during
2,616,600,617.09 1,351,783,827.08 93.57
operating the Reporting Period.
activities
The net cash inflow from investing
activities during the Reporting Period
Net cash flow
increased compared with the same period
generated from Not
30,115,778.76 -151,492,348.67 last year, and the net redeemed amount of
investing applicable
bank financial products during the
activities
Reporting Period increased compared with
the same period last year.
Net cash flow
Not
from financing -771,123,342.97 -922,149,601.16
applicable
activities
(II) Explanation on significant change of profit caused by non-core business
□ Applicable √ Not applicable
(III) Analysis of assets and liabilities
√ Applicable □ Not applicable
1. Assets and liabilities
Unit: RMB Yuan
Change in
Percentage
Percentage of percentage
of total
Amount as at the total assets at for the
Amount as at the assets at
Items end of the the end of current Explanation
end of last period the end of
current period current period period over
last period
(%) the last
(%)
period (%)
During the Reporting Period, net cash
Cash and
5,239,121,517.08 34.21 3,363,089,177.24 25.83 55.78 flow generated from operating and
equivalents
investing activities increased.
During the Reporting Period, the balance
Receivables of M&G Colipu’s commercial bills
39,533,283.51 0.26 21,664,621.88 0.17 82.48
financing increased compared with the beginning
of the year.
During the Reporting Period, equipment
Construction to be installed and unfinished
95,391,194.19 0.62 71,901,168.18 0.55 32.67
in progress engineering increased compared with the
beginning of the year.
Other During the Reporting Period,
non-current 12,202,603.55 0.08 7,054,811.39 0.05 72.97 prepayments for engineering increased
assets compared with the beginning of the year.
Derivative During the Reporting Period, losses on
financial 1,357,106.71 0.01 881,465.28 0.01 53.96 fair value changes of forward foreign
liabilities exchange contracts increased.
The increase in both revenue and gross
Taxes payable 312,264,527.42 2.04 198,479,439.43 1.52 57.33 profit in the fourth quarter resulted in an
increase in commodity turnover tax and
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Annual Report 2023
corporate income tax payable.
Other current The increased sales resulted in an
114,591,240.07 0.75 79,340,113.68 0.61 44.43
liabilities increase in expected product returns.
During the Reporting Period, Axus
Long-term
30,027,500.01 0.20 / / / Stationery’s long-term borrowings
borrowings
increased.
During the Reporting Period, along with
Lease the business development of M&G
198,614,205.74 1.30 144,951,146.72 1.11 37.02
liabilities Colipu and Jiumu Store, leases
increased.
The repurchase obligations on minority
shareholders of Back to School Holding
Estimated
/ / 14,922,058.45 0.11 -100.00 AS were reclassified to non-current
liabilities
liabilities due within one year during the
Reporting Period.
This is mainly due to the effect of
Other differences in the translation of the
Not applic
comprehensive -945,577.17 -0.01 -307,971.25 0.00 financial statements of Back to School
able
income Holding AS in foreign currencies during
the Reporting Period.
Other descriptions
No
2. Overseas assets
√ Applicable □ Not applicable
(1) Asset size
Including: overseas assets of 348,684,040.66 (unit: Yuan, currency: RMB), accounting for 2.28% of the
total assets.
(2) Explanation for the high proportion of overseas assets
□ Applicable √ Not applicable
3. Major restricted assets as at the end of the Reporting Period
√ Applicable □ Not applicable
1. The subsidiary, Axus Stationery (Shanghai) Company Ltd., entered into the Maximum Mortgage
Contract numbered ZD9874202200000005 with Shanghai Pudong Development Bank Co., Ltd.
Fengxian Sub-branch on 15 September 2022, under which it pledges its lands and plants under Property
HFDQ Zi (2013) No. 015437, Property HFDQ Zi (2013) No. 013396 and Property HFDQ Zi (2015) No.
015718 at the maximum principal limit of RMB200 million and for the term of credit line from 15
September 2022 to 14 September 2025.
2. The subsidiary Jiangsu Marco Pen Co., Ltd. (江苏马可笔业有限公司) entered into the
Maximum Mortgage Contract numbered BD133202302270002428 with Jiangsu Siyang Rural
Commercial Bank Co., Ltd. on 27 February 2023, under which it pledges its lands and plants under Su
(2019) Siyang County Real Estate No. 0018047, Su (2019) Siyang County Real Estate No. 0018032, Su
(2019) Siyang County Real Estate No. 0017990 and Su (2019) Siyang County Real Estate No. 0017993
at the maximum principal limit of RMB45,122,200 and for the term of credit line from 27 February
2023 to 22 November 2025.
3. As of the end of the Reporting Period, the Company had restricted monetary funds of
RMB1,531,036,380.25, mainly including letter of credit deposit, performance bond, and fixed deposit
over 3 months.
4. Other descriptions
□ Applicable √ Not applicable
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Annual Report 2023
(IV) Analysis on industry operating information
√ Applicable □ Not applicable
For details, see "II. Description of the Company's industry conditions during Reporting Period" in
"Section III Management Discussion and Analysis" of this report.
(V) Analysis of investment
Overall analysis of external equity investment
√ Applicable □ Not applicable
During the Reporting Period, the Company made external investments.
In January 2023, subsidiary Shanghai M&G Stationery & Gift Co., Ltd. (上海晨光文具礼品有限
公司) disposed of its 100% equity interests in Luoyang M&G Stationery Sales Co., Ltd. (洛阳晨光文具
销售有限公司) for RMB20 million.
In July 2023, the Company acquired 100% equity interests in Hubei Chaoxin Real Estate Co., Ltd.
(湖北潮信置业有限公司) for RMB47.54 million.
1. Significant equity investment
□ Applicable √ Not applicable
2. Significant non-equity investment
□ Applicable √ Not applicable
3. Financial assets measured at fair value
□ Applicable √ Not applicable
Securities investment
□ Applicable √ Not applicable
Description of securities investment
□ Applicable √ Not applicable
Private equity fund investment
□ Applicable √ Not applicable
Derivatives investment
□ Applicable √ Not applicable
4. Progress of major asset restructuring and integration during the Reporting Period
□ Applicable √ Not applicable
(VI) Sale of significant assets and equity interests
□ Applicable √ Not applicable
(VII) Analysis of major controlled companies and shareholding companies
√ Applicable □ Not applicable
Unit: 0'000 Currency: RMB
Nature of the Major products and Registered
Company Name Total asset Net assets Net profit
business services capital
Shanghai M&G Zhenmei Stationery
Co., Ltd.（上海晨光珍美文具有限 Wholesale and Stationery and office
1,000.00 4,356.17 289.66 -100.96
retail supplies
公司）
Shanghai M&G Colipu Office Wholesale and
Office supplies 66,000.00 590,756.76 158,690.16 40,120.65
Supplies Co., Ltd. retail
Shanghai M&G Stationery & Gift Wholesale and Stationery and office 19,941.94 154,360.39 72,665.96 9,818.85
31 / 224
Annual Report 2023
Co., Ltd.（上海晨光文具礼品有限 retail supplies
公司）
M&G Life Enterprise Management
Wholesale and Stationery and office
Co., Ltd.（晨光生活馆企业管理有 10,000.00 104,577.92 -4,050.34 2,291.32
retail supplies
限公司）
Shanghai M&G Jiamei Stationery Manufacturing,
Co., Ltd.（上海晨光佳美文具有限 Stationery and office
wholesale and 3,000.00 4,465.50 4,108.46 100.17
supplies
公司） retail
Shanghai M&G Information
Technology Co., Ltd.（上海晨光信 Wholesale and
Office supplies 5,000.00 31,981.17 1,865.09 -578.30
retail
息科技有限公司）
Shenzhen Erya Creative and
Cultural Development Co., Ltd.（深 Design and so Design, office
2,000.00 1,496.60 1,055.98 -43.84
forth supplies and so forth
圳尔雅文化创意发展有限公司）
Shanghai M&G Office Stationery Wholesale and
Office supplies 5,000.00 72,616.40 45,124.86 11,167.03
Co., Ltd. retail
Axus Stationery (Shanghai) Production, sale Stationery and office
8,100.00 63,722.39 2,848.28 -1,072.50
Company Ltd. and so forth supplies
Shanghai Chenxun Enterprise
Information
Management Co., Ltd.（上海晨讯企 Service 22,000.00 34,055.94 24,495.08 2,252.03
Consultation
业管理有限公司）
Shanghai Qizhihaowan Culture and
Creativity Co., Ltd.（上海奇只好玩 Service Creative service 10,000.00 4,975.13 3,088.31 -316.46
文化创意有限公司）
Guangdong South China M&G
Stationery Co., Ltd. (广东华南晨光 Wholesale and Stationery and office
5,000.00 10,586.64 4,650.81 391.40
retail supplies
文教用品有限公司)
General goods
Hubei Chaoxin Real Estate Co., Stationery and office
warehousing 6,000.00 5,938.70 5,932.82 -29.11
Ltd. (湖北潮信置业有限公司) supplies
services
(VIII) Structured entities controlled by the Company
□ Applicable √ Not applicable
VI. Discussion and Analysis on Future Development of the Company
(I) Industry pattern and trend
√ Applicable □ Not applicable
With the changes in the way of life and consumption habit of consumers, China’s retail industry
entered a new stage of redevelopment and innovation. Stationery industry faces challenges with
uncertainty of external environment, diversification of retail channels, and more individualized demands
from main customers group (now being the post-90s and post-00s). With the changing demographics of
China in particular the decreasing birth rate, stationery industry revenue growth comes less from by unit
volume growth, and more from consumption upgrade and product upgrade. Domestic market demand
for mid- to high-end stationery products keeps increasing, reshaping market structure dominated by
low-end products. This provides opportunities for mid- to high-end stationery products with better
quality and higher price. China's population of 1.4 billion accounts for about 18% of global population,
while leading stationery companies in China can continue to mostly rely on the huge domestic market,
they also have room for international expansion in international markets, which could reinforce each
other under favorable conditions.
Leading enterprises focused on building omni-channel operation capabilities and implemented
refined management. With the popularity of the Internet, smart phones, and online transactions, people's
consumption habits and consumption scenarios have changed. Consumers' access to information is
becoming more fragmented, and new-generation marketing means are becoming more diversified,
including online media platforms (such as Weibo, WeChat, Xiaohongshu, and Douyin) and IP topic
creation, which further tests enterprises' ability to make quick response to industry trends. Compared
with small- and medium-sized enterprises, leading enterprises boast stronger and richer whole network
marketing and operation capabilities. They formulate refined marketing strategies by city to reach
consumers. In addition to online traffic, offline channels are also required to realize refined management
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by empowering channels through organizational reform and information system. According to the
National Bureau of Statistics, online retail sales across the country recorded RMB15 trillion in 2023, a
year-on-year increase of 11%. Outstanding companies in the consumer industry seized the development
opportunities of online consumption and achieved continuous sales growth through online and offline
integration.
Traditional retail stationery shops nearby school are still the dominant channel for China’s
stationery industry, and shares of other retail formats are increasing faster. Sales terminals and channels
of the industry are becoming more diversified, upgrading and competition in channels becomes more
obvious. Domestic consumption for stationery in China becomes more brand conscious, innovative,
individualized and more premium. There is a growing demand for premium cultural and creative
products, stationery products are moving from those primarily focus on functionality towards those with
more cultural and creative elements catering to customers. There are around thousands of stationery
manufacturers in China's domestic stationery industry and the industry is quite decentralized. There are a
few leading companies for most sub-category stationery products, with continued development in the
stationery industry, there could be higher industry consolidation, and leading companies could gain
larger market shares.
In recent years, in the context of the digital economy, thanks to favorable factors such as policy
driving, the rapid advancement of centralized procurement by large- and medium-sized enterprises, and
the competition among various digital procurement service providers, great progress has been made in
the digitalization, e-commerce and centralization of public procurement in China, which have become
the main form of public resource transactions from central to local governments. According to the China
Public Procurement Development Report (2022) compiled and released by China Federation of
Logistics & Purchasing, the scale of public procurement transactions in China in 2022 exceeded RMB48
trillion. This indicates that the rate of centralised procurement aiming to improve efficiency and save
costs has grown year by year. According to the measurement of www.chyxx.com, the market size of
office supplies in China exceeds RMB2 trillion. In addition, the market size of employee benefits and
other categories is also quite large.
According to the 2022 Digitalized Procurement Development Report compiled and released by the
China Federation of Logistics & Purchasing, central state-owned enterprises have grown into the leader
of digitalised procurement in China, driving China's digitalised procurement into the vigorous
innovation stage. This is a novel exemplar of various medium and large enterprises in digitalised
procurement and has encouraged the servicers and suppliers to speed up digital transformation and
upgrading. As a result, a group of new digitalised procurement platforms are growing, attracting capital
into the real economy and thus supporting the innovation of industrial and supply chains.
With the further development and application of information technology, data have become a new
production element. Industrial digitisation is becoming a major pillar of the digital economy, and
traditional industries are actively gaining new development momentum through digital empowerment.
The investment in the manufacturing industry has shifted from the investment in equipment and
assembly lines to the transformation of digital processes and digital transformation of products, in a bid
to apply digital technology to reduce channel costs and management costs and become a digital-driven
modern enterprise.
With smart technology and products upgrade, promotion of national education informatization and
the development of the online education market, smart stationery products have developed rapidly in the
past few years. Technology-empowered smart pens and smart books are widely adopted in online
education, providing an increasingly better user experience. Technology-empowered smart pens and
smart books are widely adopted in online education, providing a better user experience.
(II) Development strategy of the Company
√ Applicable □ Not applicable
1. Business strategy
To consolidate competitive advantages of core businesses by adhering to the mission of "make
study and work more joyful and effective", being consumer centric, and emphasizing on innovation of
technology and products; to further expand new businesses of one-stop office supplies service and direct
retail; to actively expand international market; and to promote digitalization, organization development
and talents, and investment and mergers and acquisitions with synergy. With continued efforts in those
four areas, the Company will realize the vision of becoming a "world-class M&G".
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2. Sustainable development strategy
In order to realize the vision of “World-class M&G”, M&G has developed a sustainable
development strategy together with its business strategy. With its vision of “Writing a Sustainable
Business Future”, M&G aims to lead the sustainable development of the industry by focusing on four
pillars: sustainable products, response to climate change, sustainable supply chain and empowering
employees and communities.
(III) Operation plan
√ Applicable □ Not applicable
In the face of changing consumer preferences, buying habits and consumption scenarios, as well as
the recovering market and demographic trends in the domestic market, M&G will improve development
quality and efficiency with the new development concept, steadily advance its development strategy,
promote the stable development of core traditional business in all directions, continue to expand new
business, beef up organisational upgrading and reform, and proactively exploit the global market, in
order to maintain sustainable, healthy and high-quality development of the Company and keep forging
ahead toward its vision of becoming a "world-class M&G".
In 2024, the Company plans revenue of RMB27.5 billion, a year-on-year increase of 18%, mainly
through the following:
1. Products and channels of the core traditional business
Continue to advance product optimisation
The Company will reduce the quantity and improve the quality of product development, improve
the on-shelf ratio and sales contribution of the single product, and focus on shared marketing of classic
and best-selling products. Meanwhile, it will adhere to the "consumer-centric" philosophy and the
principle of developing the best-selling products. Moreover, the product structure will be optimised by
developing and cultivating high-quality and high-performance products and improving the on-shelf ratio
of daily necessities. The brand portfolio will be further expanded and the product offerings will be
enriched. The combination of internal independent cultivation and collaboration with external IPs will be
promoted to improve international design capabilities and provide consumers with more diversified
choices of products.
Promote omni-channel offerings
The Company will focus on key stationery shops to improve single store quality, upgrade channels,
and strengthen the royalty of key stationery shops. Besides, the Company will also strengthen promotion
for key categories, increase the on shelf ratio of must-have and classic best-selling products, increase
presence in business districts, and expand market share. In addition, continued efforts will be made to
promote direct supply of office products and premium stationery products both at headquarters and
partners level to create incremental sales. The Company will also explore new online distribution
management models to realise the full potential of online growth. M&G Technologies will join in hands
with product segments to launch online products and build a standard process for online product
development, and use multi-store + flagship store for refined operations to improve efficiency. Also, it
will accelerate the development of new channel business to quickly seize market share.
2. Develop the middle-end and back-end platform capabilities
Through structural reforms and capability platform building, as well as lean operations driven by
efficiency enhancement, the Company will enhance the quality of operations, reduce costs, and improve
efficiency and quality, thereby averting risks and safeguarding the existing business. It will also support
the upgrading of products, services, and business forms in the industry and shore up the extended,
value-added, and innovative services using digital means, thereby unleashing the potential for
incremental development. The Company will strengthen the continuous construction of the big data
platform, comprehensively capture and deeply analyse the key data of each business, market and
customer, provide a strong and scientific basis for business decision-making, and better drive business
improvement by virtue of data. Also, it will promote the overall improvement of digital management
capability, as well as create an open, inclusive and diverse talent system.
3. Continue to develop the large retail store business
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Adhering to the strategies of “Straight-A Student Members, Structure Adjustment, and Quality
Improvement”, the Company will continue to exert efforts on the optimization of membership operation
and store operation standards, maintain the rapid growth of offline channels and the multi-channel
growth of the online business, and increase the repurchase rate and customer unit price. As M&G's
bridgehead in upgrading its products and channels, Jiumu Store will work with the Company to increase
the sales ratio of high-end products in this channel. M&G Life will improve the quality of existing single
stores, and promote the new business model together with the premium stationery direct supply segment.
4. Continue to grow M&G Colipu
M&G Colipu follows requirements on well-informed, open and transparent government
procurement, and meets requirements that enterprises desire to increase procurement efficiency and
reduce procurement costs for non-production office and administration supplies. It will continue to
intensify core competitiveness by improving service quality, enriching product categories, further
identifying customers, increasing internal proportions and building a nationwide supply chain system. It
will also enhance the development of core suppliers and manufacturers in core areas and the categories
of MRO industrial products and marketing gifts and, based on the one-stop procurement solutions for
office supplies, continue to expand such business scenarios as the MRO industrial products, marketing
gifts and employee benefits. By developing an innovative digital platform system to optimise business
procedures, M&G Colipu will step up digital construction, empower the centralized procurement of
governments and enterprises with digital capability, and realise cost reduction and efficiency
improvement, and will also improve the nationwide layout and efficiency of warehousing and strengthen
the construction of the organisational capabilities.
(IV) Potential risks
√ Applicable □ Not applicable
1. Risks in operation management
With the great growth in the scale of assets and sale of the Company, the Company faces new
challenges in operation management system, internal control system and staff management. Although
the Company has developed operation management system and internal control system that accord with
features of its business and technology in its development, and has recruited and cultivated stable core
management team, operation of the Company will be adversely affected if the aforesaid management
system and management staff fail to promptly adapt to the rapid expansion of the Company. Therefore,
the Company will keep improving its management system and internal control system, and adopt various
measures to improve qualification of management staff.
2. Market risks
With social transformation and consumption upgrading, stationery market presents opportunities
for structure-based development. The stationery industry is facing the challenges of shrinking demand,
weaker expectations and increasing downward pressure. If the Company is unable to anticipate market
trends in time and adapt to market changes from aspects of product innovation and upgrading, quality
management to sale strategy, the Company will encounter certain risks in market competition. Having
been aware of the problem, the Company enhanced product R&D under the guidance of the market,
optimized product structure, and developed a sounder quality management and control system. Market
strategies are formulated based on market survey, analysis of big data and management discussion.
3. Risks from fiscal and taxation
According to Article 28 of Enterprise Income Tax Law of the People's Republic of China, the
enterprise income tax on important high- and new-tech enterprises that are necessary to be supported by
the state shall be levied at the reduced tax rate of 15%. The Company was re-recognized as a national
high- and new-tech enterprise on 15 November 2022, and started to implement the policy of reduced
enterprise income tax rate of 15% on 1 January 2022 for 3 years. If the state adjusts preferential income
tax policy for high- and new-tech enterprises, or the Company fails to pass the review after its
qualification of high- and new-tech enterprise expires, operation performance of the Company will be
adversely affected. As such, the Company performs strict control according to assessment standards for
high- and new-tech enterprises to ensure that it meets all indicators, and qualifies and passes the annual
review and renewal for high- and new-tech enterprises.
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4. Risks from macro policy
In July 2021, the release of the Opinions on Further Reducing the Burden of Homework and
Off-Campus Training in Compulsory Education has a certain impact on the K12 education and training
industry. The Company will continue to pay attention to the impact of the "Double Reduction" policy
and actively take countermeasures.
(V) Others
□ Applicable √ Not applicable
VII. Explanation on the Failure to Disclose as per Rules due to Inapplicability or Special Reasons
such as State Secrets and Business Secrets and the Reasons Thereof
□ Applicable √ Not applicable
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Section IV Corporate Governance
I. Particulars on Corporate Governance
√ Applicable □ Not applicable
During the Reporting Period, the Company, in strict compliance with the Company Law, the
Securities Law, and other applicable laws and regulations, as well as the relevant regulatory documents
promulgated by the China Securities Regulatory Commission and the Shanghai Stock Exchange,
continuously optimized the corporate governance structure of the Company and improved the
operational level of the Company, strengthened the management of insider information, and enhanced
the awareness of information disclosure responsibility, to ensure continuous, stable and high-quality
development and effectively protect the legitimate rights and interests of investors and relevant
stakeholders. The specific governance situation was as follows:
1. Shareholders and general shareholders' meetings: The Company holds general shareholders'
meetings in strict accordance with the requirements of the Company Law, the Articles of Association,
and the Rules of Procedure of the General Shareholders' Meeting. Proposals, procedures, and voting at
the general shareholders' meetings were strictly implemented in accordance with the relevant provisions.
When considering proposals related to related-party transactions, related shareholders avoided voting to
ensure fair and reasonable related-party transactions. For the convenience of the Company's shareholders,
general shareholders' meetings allow its shareholders to vote on site or online. This ensures the minority
shareholders have the right to stay informed about and vote on major issues of the Company and
participate in the operation of the company and this also helps protect the interests of minority
shareholders. Resolutions adopted at general shareholders’ meetings met the requirements of laws and
regulations, and complied with the lawful rights and interests of all shareholders, especially minority
shareholders.
2. Controlling shareholders and the listed companies: the Company and the controlling shareholders
achieved "five independences" in finance, personnel, assets, business, and organization, and the
Company's Board of Directors, Supervisory Committee and internal control institutions operated
independently; the Company's related transaction procedures were legal and the price was fair, and the
obligation of information disclosure was fulfilled; the controlling shareholders had a normative behavior,
and did not directly or indirectly interfere with the Company's decision-making and business activities
by manipulating the general shareholders' meetings.
3. Directors and the Board of Directors: All directors of the Company could, in accordance with the
Rules of Procedure of the Board of Directors and other systems, earnestly perform their duties as
directors and make prudent and scientific decisions. The convening of each meeting met the
requirements of relevant regulations. The Company's Board of Directors had four special committees,
namely, the Strategy Committee, the Audit Committee, the Remuneration and Appraisal Committee, and
the Nomination Committee. Each special committee carried out work in accordance with the relevant
provisions of the implementation rules, gave full play to the professional role of each special committee,
strengthened the democratic and scientific decision-making of the Board of Directors, and ensured the
sound development of the Company.
4. Supervisors and the Supervisory Committee: The Supervisory Committee of the Company was
responsible for the Company and its shareholders, strictly implemented the relevant provisions of the
Company Law, the Articles of Association and the Rules of Procedure of the Supervisory Committee,
earnestly fulfilled its duties, convened the meetings of the Supervisory Committee by law, attended the
general meeting of shareholders and the meetings of the Board of Directors, and exercised supervisory
functions and powers in accordance with the law, supervising corporate governance, major issues,
financial conditions, and the compliance with rights and regulations of the Company's directors and
senior management in performing their duties, and promoting the legal and standardized operations of
the Company.
5. Information disclosure and transparency: The Company adhered to the principle of "truth,
accuracy, completeness, timeliness, and fairness", and strictly followed the requirements of temporary
announcement and periodic report format guidelines for information disclosure. To help investors get
familiar with the situation of the Company, the content to be disclosed must be concise, clear, and easy
to understand and must truly and duly reflect the operating status of the Company.
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Whether there are significant differences between corporate governance and laws, administrative
regulations and the requirements of the relevant regulations of the China Securities Regulatory
Commission on the governance of listed company; if there are significant differences, the reasons should
be explained
□ Applicable √ Not applicable
II. Measures taken by the controlling shareholders and actual controllers of the Company to
ensure the independence of the Company's assets, personnel, finance, organization, and business,
as well as the solutions taken to address the impact on the Company's independence, work
progress and follow-up work plans
√ Applicable □ Not applicable
The Company was completely separated from the controlling shareholders in assets, personnel,
finance, organization and business, possessing independent and complete business and the ability to
operate independently.
1. Asset independence
The Company had business premises that are independent from the controlling shareholders and
had an independent and complete asset structure. The Company had complete control over all assets, and
no asset or fund was occupied by controlling shareholders to damage the interests of the Company.
2. Personnel independence
The personnel and remuneration management of the Company were completely independent. The
directors, supervisors and senior management of the Company were elected and appointed in strict
accordance with the relevant provisions of the Company Law and the Articles of Association. The
president, vice president, chief financial officer and secretary of the Board of Directors of the Company
did not receive remuneration from the controlling shareholders and their affiliated enterprises and held
any positions other than directors and supervisors.
3. Financial independence
The Company had an independent financial and accounting department, has established an
independent accounting system and financial management system, and made financial decisions
independently. The Company's chief financial officer and financial accounting personnel are all full-time
staff and do not hold part-time jobs in the controlling shareholder or their affiliated enterprises. The
Company opened a basic deposit account independently and paid taxes independently.
4. Organizational independence
The Company has established a sound organizational system, which operates independently and has
no affiliation with the controlling shareholders or their functional departments.
5. Business independence
The Company's business is independent from the controlling shareholders and their affiliated
enterprises. The Company has an independent and complete design, R&D, manufacturing and sales
system, conducts business independently, and does not rely on shareholders or any other related parties.
Engagement of controlling shareholders, actual controllers and other organizations under their control in
the same or similar business as the Company, as well as the impact of horizontal competition or major
changes in horizontal competition on the Company, measures taken, progress of the resolution and the
follow-up resolution
□ Applicable √ Not applicable
III. Brief Introduction to General Shareholders' Meetings
Disclosure
Query index of the date when
Convenin designated website on the
Session number Resolution of meeting
g date which the resolution resolution
is published is
published
Considered and approved 11 proposals, including the 2022
2022 annual Work Report of the Board of Directors, the 2022 Work Report
general 20 April 21 April of the Supervisory Committee, the 2022 Financial Settlement
www.sse.com.cn
shareholders' 2023 2023 Report, the 2022 Profit Distribution Plan, the 2022 Annual
meeting Report and Summary, and the Proposal on the Expected Daily
Related Transactions in 2023, the 2023 Annual Financial Budget
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Report, the Proposal on the Remuneration Criteria of the
Company's Directors in 2023, the Proposal on the Appointment
of the Company's 2023 Financial Report Audit Organization and
Internal Control Audit Organization, the Proposal on the
Dividend Payout Plan for the Next Three Years (2023-2025), the
Proposal on Allowances for Independent Directors of the Sixth
Board of Directors, the Proposal on the Election of Directors,
the Proposal on the Election of Independent Directors, and the
Proposal on the Election of Supervisors
Holders of the preferred shares with restored voting power request for convening extraordinary general
shareholders' meetings
□ Applicable √ Not applicable
Particulars on general shareholders' meetings
□ Applicable √ Not applicable
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IV. Information on Directors, Supervisors and Senior Management
(I) Shareholding change and remuneration of directors, supervisors and senior management currently employed and retired during the Reporting Period
√ Applicable □ Not applicable
Unit: share
Total pre-tax
remuneration
Whether to get
Number of Number of from the
remuneration
shares held at shares held at Change in share Reasons for Company
Name Position Gender Age From To from related
the beginning of the end of the of the year change during the
parties of the
the year year Reporting
Company
Period (RMB
0'000)
Chen Huwen Chairman Male 54 2014-6-12 2026-4-19 13,609,300 13,609,300 0 170.39 No
Vice Chairman and
Chen Huxiong Male 54 2014-6-12 2026-4-19 13,609,300 13,609,300 0 208.65 No
President
Director and Vice
Chen Xueling Female 57 2014-6-12 2026-4-19 8,100,000 8,100,000 0 123.53 No
President
Director and Vice
Fu Chang Male 54 2018-3-23 2026-4-19 108,016 108,016 0 57.34 No
President
Yu Weifeng Independent Director Male 53 2023-4-20 2026-4-19 0 0 0 15.00 No
Pan Jian Independent Director Male 48 2023-4-20 2026-4-19 0 0 0 15.00 No
Pan Fei Independent director Male 68 2022-4-20 2026-4-19 0 0 0 18.75 No
Chairman of the
Zhu Yiping Female 65 2014-6-12 2026-4-19 0 0 0 0.00 Yes
Supervisory Committee
Guo Limin Supervisor Male 44 2023-4-20 2026-4-19 0 0 0 0.00 Yes
Zhang Chaohua Employee Supervisor Female 45 2020-5-8 2026-4-19 0 0 0 29.28 No
Zhou Yonggan Vice President Male 49 2020-5-8 2026-4-20 93,172 93,172 0 107.55 No
Tang Xianbao Chief Financial Officer Male 42 2023-4-21 2026-4-20 0 0 0 93.36 No
Bai Kai Board Secretary Male 41 2023-4-21 2026-4-20 12,906 12,906 0 30.11 No
Zhang Jingzhong Independent director Male 61 2017-5-11 2023-4-19 / / / 5.00 No
Chen Jingfeng Independent director Male 56 2017-5-11 2023-4-19 / / / 5.00 No
Han Lianhua Supervisor Female 46 2014-6-12 2023-4-19 / / / 0.00 Yes
Quan Qiang Board Secretary Male 51 2017-3-31 2023-4-20 / / / 33.71 No
Total / / / / / 35,532,694 35,532,694 0 / 912.67 /
Note: The term of office of Chen Huxiong, Chen Xueling and Fu Chang as directors will expire on 19 April 2026, and their term of office as senior management
will expire on 20 April 2026.
Name Main working experience
Born in July 1970, male, Chinese nationality, no permanent residency abroad, Master’s degree granted by the School of Economics and Management, Tsinghua University, and doctorate degree granted by the Carlson
School of Management, University of Minnesota. Has been involved in the stationery and office manufacturing industry since 1997, PE equity investment since 2007, and stock and bond financial investment since
Chen Huwen
2015 and is one of the founders of M&G Holdings (Group) Co., Ltd. Once worked as General Manager of Shanghai Sino-Korean M&G Stationery Manufacturing Co., Ltd. Now works as the chairman of Shanghai
M&G Stationery Inc. and the chairman of Shanghai M&G Colipu Office Supplies Co., Ltd. Has won honors such as the Model Worker in China Light Industry and the "Top Ten Brand Leaders" in Shanghai in 2013.
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Born in July 1970, male, Chinese nationality, permanent residency in Singapore, Executive MBA, Cheung Kong Graduate School of Business. Has been involved in the stationery manufacturing industry since 1995.
Worked as General Manager of Shanghai Sino-Korean M&G Stationery Manufacturing Co., Ltd. from 2001 to 2004, and Chairman of Shanghai Sino-Korean M&G Stationery Manufacturing Co., Ltd. from 2004 to
Chen Huxiong
2009. Now works as Vice Chairman and President of Shanghai M&G Stationery Inc., and is also Vice Chairman of China Writing Instrument Association, Deputy Director of Ballpoint Pen Professional Committee of
China Writing Instrument Association, and Chairman of China Writing Instrument Industry Technology Innovation Alliance. Won the "Nominated Award of Outstanding Entrepreneur of Shanghai in 2019-2020".
Born in October 1967, female, Chinese nationality, no permanent residency abroad, holding a junior college degree; has been involved in the stationery manufacturing industry since 1997 and is one of the founders of
Chen Xueling
M&G Holdings (Group) Co., Ltd.; once worked as Deputy General Manager of Shanghai M&G Stationery Inc.'s Production Center, and now works as a director and Vice President of Shanghai M&G Stationery Inc.
Born in January 1970, male, Chinese nationality, no permanent residency abroad, holding a master's degree in business administration (EMBA); once worked as General Manager of Wuhan Maxleaf Stationery Ltd.;
Fu Chang joined M&G Stationery in May 2006 and successively served as Deputy Director of Marketing Centre and Director of Production Centre; now works as a director and Vice President of the Company. and now works
as a director and Vice President of Shanghai M&G Stationery Inc.
Born in November 1971, male, Chinese nationality, no permanent residency abroad, a first-class lawyer; has over 27 years of experience a Weifang practicing lawyer, received his LL.B. degree from Fudan University
in June 1995, received his MBA degree from China Europe International Business School in October 2015, and completed the Executive Leadership Program of Harvard Business School in July 2019; has been a
Yu Weifeng partner of Shanghai Links Law Offices since December 1998; now concurrently serves as Director of the Foreign Affairs Committee of the All China Lawyers Association, President of the Shanghai Arbitration
Association, a member of the Administrative Reconsideration Committee of the Shanghai Municipal People's Government, a member of the Shanghai Arbitration Commission, and an arbitrator and mediator in a
number of arbitration institutions and mediation institutions.
Born in January 1976, male, Hong Kong permanent resident of China, holding a master's degree from the University of Chicago; once worked as a director and Vice President of Contemporary Amperex Technology
Pan Jian Co., Ltd., a consultant of Kearney and Bain & Company, Vice President of MBK Partners, a director of Amperex Technology Ltd., a non-executive director of Luye Pharma, a director of Shanghai M&G Stationery
Inc., and a director of Ceva Sante Animale Group; now works as a director of Contemporary Amperex Technology Co., Ltd.
Born in August 1956, male, Chinese nationality, no permanent residency abroad, doctor, professor, and doctoral advisor in management, a member of the American Accounting Association, a member of the
Accounting Society of China, a member of the Management Accounting Committee of the Accounting Society of China, Vice President of the Shanghai Cost Research Society, and Distinguished Editor at Modern
Accounting. Pan Fei graduated from the School of Accountancy, Shanghai University of Finance and Economics, in 1983 and was awarded a doctoral degree in accountancy in 1998. Since 2000, he has received
Pan Fei
awards and honours, including the Shanghai Educator Award, the National Outstanding Individuals in Accounting, the Fifth Shanghai Renowned Teacher Award, and the Shanghai Excellent Teaching Team Award. In
January 2018, Pan Fei was rated by the Shanghai University of Finance and Economics as a senior professor. In January 2019, he was approved as an expert eligible for special government allowances of the State
Council.
Born in March 1959, female, Chinese nationality, graduated from junior college. Once worked as Deputy General Manager of Jiangsu Life Group Co., Ltd. and Deputy General Manager of Shanghai Yuhui Industrial
Zhu Yiping Co., Ltd. Joined M&G in May 2003 and served successively as Chief Financial Officer of Shanghai Sino-Korean M&G Stationery Manufacturing Co., Ltd., and Deputy General Manager of the Financial Center of
Shanghai M&G Stationery Inc. Now works as the person in charge of internal control of M&G Holdings (Group) Co., Ltd..
Born in December 1980, male, Chinese nationality, holding a bachelor's degree; once worked as a senior auditor of Deloitte, a senior manager of Zhongrong International Trust, a senior manager of Wins Investment, a
Guo Limin trust manager of Lujiazui International Trust, and Deputy General Manager of China Universal Asset Management; joined M&G in February 2022; once worked as Director of the Risk Management Department of
M&G Holdings (Group) Co., Ltd.; now works as Chief Financial Officer of M&G Holdings (Group) Co., Ltd.
Born in April 1979, female, Chinese nationality, holder of a bachelor’s degree. Once worked as Business Commissioner of Shanghai Sino-Korean M&G Stationery Manufacturing Co., Ltd., Manager of Shanghai
Zhang Chaohua
Apollo Machinery Co., Ltd., and Deputy Manager of M&G Holdings (Group) Co., Ltd. Now works as Deputy Manager of Shanghai M&G Stationery Inc.
Born in October 1975, male, Chinese nationality, no permanent residency abroad, holder of a master’s degree from Shangahi Maritime University and an EMBA degree from Peking University. Joined M&G
Zhou Yonggan Stationery in August 2005 and successively served as Assistant to the Chairman, Deputy Director, Director of the Marketing Center, and General Manager of the Office Business Department. Now works as Vice
President of Shanghai M&G Stationery Inc.
Born in January 1982, male, Chinese nationality, no permanent residency abroad, holding a bachelor's degree; once worked as Human Resources Director, Board Secretary, President of the Capital Operation
Tang Xianbao Headquarters and President of the Financial Headquarters of Deppon Logistics Co., Ltd., and Vice President and Senior Vice President of Deppon Group; now works as Chief Financial Officer of Shanghai M&G
Stationery Inc.
Born in December 1983, male, Chinese nationality, no permanent residency abroad, holding a postgraduate degree; joined M&G Stationery in 2011, and once worked as an officer of the Board and Securities Affairs
Bai Kai
Representative; now works as Board Secretary of Shanghai M&G Stationery Inc.
Particulars on other information
□ Applicable √ Not applicable
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(II) Employment of directors, supervisors and senior management currently employed and retired
during the Reporting Period
1. Employment in shareholders’ companies
√ Applicable □ Not applicable
Position held in
Name of shareholder's
Name of person employed shareholder's From To
company
company
Chen Huwen M&G Group President 10 May 2007
Chen Huwen Keying Investment General partner 18 February 2011
Chen Huxiong M&G Group Chairman 10 May 2007
Chen Huxiong Jiekui Investment General partner 18 February 2011
Chen Xueling M&G Group Director 10 May 2007
Person in charge of
Zhu Yiping M&G Group 1 January 2020
internal control
Chief Financial
Guo Limin M&G Group 7 February 2022
Officer
Particulars on employment Save for the personnel disclosed above, none of other directors, supervisors and senior
in shareholders' companies management of the Company were employed by the shareholders' companies.
2. Employment in other companies
√ Applicable □ Not applicable
Name of person Position held in
Name of other companies From To
employed other companies
Shanghai Chenguang Venture
Chen Huwen General partner 12 May 2011
Capital Center (L.P.)
Shanghai Chenguang Sanmei General
Chen Huwen 26 May 2008
Property Investment Co., Ltd. Manager
Shanghai Chenguang Venture
Chen Huxiong Limited Partner 12 May 2011
Capital Center (L.P.)
Shanghai Chenguang Sanmei
Chen Huxiong Chairman 26 May 2008
Property Investment Co., Ltd.
Shanghai Chenguang Venture
Chen Xueling Limited Partner 12 May 2011
Capital Center (L.P.)
Shanghai Chenguang Sanmei
Chen Xueling Director 26 May 2008
Property Investment Co., Ltd.
Yu Weifeng Llinks Law Offices Partner December 1998
Independent
Yu Weifeng Shenergy Company Limited 30 June 2020
Director
Independent
Yu Weifeng Sinopharm Group Co., Ltd. 18 September 2020
Director
Contemporary Amperex
Pan Jian Director 5 June 2017 29 December 2024
Technology Co., Ltd.
Beijing Wandong Medical Independent
Pan Fei 19 June 2021 18 June 2024
Technology Co., Ltd. director
Shanghai Zhonggu Logistics Independent
Pan Fei 18 December 2023 28 September 2024
Co., Ltd. director
Zhang
Zhejiang T & C Law Firm Director October 1988
Jingzhong
Gansu Huangtai
Zhang Independent
Wine-Marketing Industry Co., October 2020 November 2023
Jingzhong director
Ltd.
Independent
Zhang Sundy Service Group Co.,
non-executive January 2021 January 2024
Jingzhong Ltd.
director
Zhang Poly Developments and Independent
May 2022 April 2023
Jingzhong Holdings Group Co., Ltd. director
Chen Jingfeng Zhongyun Capital Chairman October 2017
Particulars on
Save for the personnel disclosed above, none of other directors, supervisors and senior management of
employment in
the Company were employed by other related companies.
other companies
42 / 224
Annual Report 2023
(III) Remuneration of directors, supervisors and senior management
√ Applicable □ Not applicable
According to the Articles of Association, the remuneration of directors and
Decision-making procedures for the
supervisors is determined by the general shareholders' meeting; and the
remuneration of directors, supervisors
remuneration of senior management is determined by the Board of
and senior management
Directors.
Whether a director steps aside in the
Board's discussion of his/her No
remuneration matters
Recommendations by the Remuneration
and Appraisal Committee or the special
The remuneration of directors, supervisors and senior management should
meeting of independent directors on
be determined with reference to the industry as well as regional levels,
matters relating to the remuneration of
taking into account the actual situation of the Company.
directors, supervisors and senior
management
The allowances of independent directors of the Company are considered
and approved by the general shareholders' meeting. Other directors,
Determination basis for the supervisors and senior management who receive remuneration from the
remuneration of directors, supervisors Company are subject to the operation performance appraisal on an annual
and senior management basis and the pre-paid base salary on a monthly basis, and the annual
remuneration is settled after the Company's annual operation target is
completed.
Actual payment of the remuneration of
directors, supervisors and senior RMB9.1267 million
management
Total remuneration actually received by
all directors, supervisors and senior
RMB9.1267 million
management at the end of the Reporting
Period
(IV) Changes in directors, supervisors and senior management of the Company
√ Applicable □ Not applicable
Name Office title Change Reason for change
Chen Huwen Chairman Elected Re-elected upon expiry of the office term
Chen Huxiong Vice Chairman Elected Re-elected upon expiry of the office term
Chen Xueling Director Elected Re-elected upon expiry of the office term
Fu Chang Director Elected Re-elected upon expiry of the office term
Yu Weifeng Independent Director Elected Re-elected upon expiry of the office term
Pan Jian Independent Director Elected Re-elected upon expiry of the office term
Pan Fei Independent director Elected Re-elected upon expiry of the office term
Chairman of the
Zhu Yiping Supervisory Elected Re-elected upon expiry of the office term
Committee
Guo Limin Supervisor Elected Re-elected upon expiry of the office term
Zhang Chaohua Employee Supervisor Elected Re-elected upon expiry of the office term
Chen Huxiong President Appointed Re-appointed upon expiry of the office term
Chen Xueling Vice President Appointed Re-appointed upon expiry of the office term
Fu Chang Vice President Appointed Re-appointed upon expiry of the office term
Zhou Yonggan Vice President Appointed Re-appointed upon expiry of the office term
Tang Xianbao Chief Financial Officer Appointed Re-appointed upon expiry of the office term
Bai Kai Board Secretary Appointed Re-appointed upon expiry of the office term
Zhang Jingzhong Independent Director Resigned Expiry of the office term
Chen Jingfeng Independent director Resigned Expiry of the office term
Han Lianhua Supervisor Resigned Expiry of the office term
Quan Qiang Board Secretary Resigned Expiry of the office term
(V) Particulars on punishments by securities regulatory authorities in the past three years
□ Applicable √ Not applicable
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Annual Report 2023
(VI) Others
□ Applicable √ Not applicable
V. Meetings of the Board of Directors held during the Reporting Period
Session number Convening date Resolution of meeting
1. Considered and approved the 2022 Work Report of the Board of Directors
2. Considered and approved the 2022 Work Report of the President
3. Considered and approved the 2022 Financial Settlement Report
4. Considered and approved the 2022 Profit Distribution Plan
5. Considered and approved the 2022 Auditor’s Report
6. Considered and approved the 2022 Annual Report and Summary
7. Considered and approved the 2022 Work Report of Independent Directors
8. Considered and approved the 2022 Performance Report of the Audit
Committee under the Board of Directors
9. Considered and approved the 2022 Internal Control Evaluation Report
10. Considered and approved the 2022 Environmental, Social and Governance
Report
11. Considered and approved the Proposal on Determining the Annual Audit
Remuneration in 2022
12. Considered and approved the Proposal on the Expected Daily Related
Transactions in 2023
13. Considered and approved the 2023 Annual Financial Budget Report
14. Considered and approved the Proposal on the Remuneration Criteria of the
Company's Directors in 2023
The 19th meeting of
15. Considered and approved the Proposal on the Remuneration Criteria of the
the 5th session of 29 March 2023
Company's Senior Management in 2023
Board of Directors
16. Considered and approved the Proposal on the Appointment of the Company'
2023 Financial Report Audit Organization and Internal Control Audit
Organization
17. Considered and approved the Proposal on Using Some Owned Funds for
Investment and Financial Management
18. Considered and approved the Proposal on the Dividend Payout Plan for the
Next Three Years (2023-2025)
19. Considered and approved the Proposal on Repurchase and Cancellation of
Some Restricted Shares
20. Considered and approved the Proposal on Amendments to the Rules of Work
for the Strategy Committee of the Board of Directors
21. Considered and approved the Proposal on Appointment of a New Senior
Executive
22. Considered and approved the Proposal on Re-election of the Board of
Directors
23. Considered and approved the Proposal on Allowances for Independent
Directors for the 6th Session of Board of Directors
24. Considered and approved the Proposal to Hold the Company's 2022 Annual
General Shareholders' Meeting
1. Considered and approved the Proposal on Election of Chairman and Vice
The 1st meeting of the Chairman for the 6th Session of Board of Directors
6th session of Board 21 April 2023 2. Considered and approved the Proposal on Setting up the Professional
of Directors Committee of the 6th Session of Board of Directors
3. Considered and approved the Proposal on Appointment of Senior Management
The 2nd meeting of 1. Considered and approved the Report for the First Quarter of 2023
the 6th session of 27 April 2023 2. Considered and approved the Proposal on Adjusting the Repurchase Price of
Board of Directors Restricted Shares
The 3rd meeting of the
25 August
6th session of Board Considered and approved the 2023 Semi-annual Report and Summary
2023
of Directors
The 4th meeting of the
27 October
6th session of Board Considered and approved the Report for the Third Quarter of 2023
2023
of Directors
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Annual Report 2023
VI. Performance of Functions and Duties by Directors
(I) Attendance of directors at board meetings and general shareholders' meetings
Attendance
at general
Attendance at board meetings
shareholders'
meetings
Director Independent
Number of
Name director Number Number Two
Number of Number of Number attendance
of of consecutive
attendance attendance by of at general
attendance attendance absences in
required communication absence shareholders'
in person by proxy person
meetings
Chen Huwen No 5 5 3 0 0 No 1
Chen Huxiong No 5 5 3 0 0 No 0
Chen Xueling No 5 5 3 0 0 No 0
Fu Chang No 5 5 3 0 0 No 0
Yu Weifeng Yes 4 4 3 0 0 No 0
Pan Jian Yes 4 4 4 0 0 No 0
Pan Fei Yes 5 5 3 0 0 No 1
Zhang
Jingzhong
Yes 1 1 0 0 0 No 0
(having
resigned)
Chen Jingfeng
(having Yes 1 1 0 0 0 No 0
resigned)
Particulars on two consecutive absences in person from board meetings
□ Applicable √ Not applicable
Number of board meetings held during the year 5
Including: on site 2
by communication 4
on site and by communication 1
(II) Directors' objections to the Company's related matters
□ Applicable √ Not applicable
(III) Others
□ Applicable √ Not applicable
VII. Special Committees under the Board of Directors
√ Applicable □ Not applicable
(I) Members of special committees under the Board of Directors
Type Name of member
Audit Committee Pan Fei, Chen Huwen, Yu Weifeng
Nomination Committee Yu Weifeng, Chen Huwen, Pan Jian
Remuneration and Appraisal Committee Pan Fei, Chen Huxiong, Yu Weifeng
Strategy Committee Chen Huxiong, Yu Weifeng, Pan Jian
(II) During the Reporting Period, the Audit Committee held 5 meetings
Convening Important comments and
Contents of meetings Other performance of duties
date recommendations
Debriefed and reviewed the work
1. Considered and approved the Work
summary for this year and the next
First meeting of the Summary of the Audit Department in
21 March year's work plan of the Company's
Audit Committee in 2022
2023 Internal Audit Department, and
2023 2. Considered and approved the Work
guided the operation of the Internal
Plan of the Audit Department in 2023
Audit Department.
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Annual Report 2023
1. Considered and approved the 2022
Performance Report of the Audit During the preparation of the
Committee under the Board of annual report, the Audit Committee
Directors under the Board of Directors
2. Considered and approved the 2022 communicated with BDO China
Auditor's Report Shu Lun Pan CPAs (LLP), which
3. Considered and approved the 2022 was responsible for the Company's
Internal Control Evaluation Report annual audit, on the composition of
Second meeting of the 4. Considered and approved the the annual audit working group,
29 March
Audit Committee in Proposal on Determining the Annual audit plan, risk judgment and audit
2023
2023 Audit Remuneration in 2022 priorities, and continued to pay
5. Considered and approved the attention to the preparation of the
Proposal on the Expected Daily Related Company's annual financial report.
Transactions in 2023 Debriefed and reviewed the work
6. Considered and approved the summary for this year and the next
Proposal on the Appointment of the year's work plan of the Company's
Company’ 2023 Financial Report Audit Audit Department, and guided the
Organization and Internal Control operation of the Audit Department.
Audit Organization
Third meeting of the
26 April Considered and approved the Report for
Audit Committee in No
2023 the First Quarter of 2023
2023
Fourth meeting of the
25 August Considered and approved the 2023
Audit Committee in No
2023 Semi-annual Report and Summary
2023
Fifth meeting of the
26 October Considered and approved the Report for
Audit Committee in No
2023 the Third Quarter of 2023
2023
(III) During the Reporting Period, the Nomination Committee held 3 meetings
Convening Important comments and
Contents of meetings Other performance of duties
date recommendations
First meeting of the Considered and approved the Proposal on
22 March
Nomination Committee the Review Opinion for the Qualifications No
2023
in 2023 of Candidate for Director
Considered and approved the Proposal on
Second meeting of the
29 March the Review Opinion for the Qualifications
Nomination Committee No
2023 of Tang Xianbao, Candidate for Chief
in 2023
Financial Officer
Considered and approved the Proposal on
Third meeting of the
12 April the Review Opinion for the Qualifications
Nomination Committee No
2023 of Candidates for President and Other
in 2023
Senior Management
(IV) During the Reporting Period, the Remuneration and Appraisal Committee held 1 meeting
Convening Important comments and
Contents of meetings Other performance of duties
date recommendations
1. Considered and approved the Proposal
on the Remuneration Criteria of the
Company's Directors in 2023
2. Considered and approved the Proposal
First meeting of the on the Remuneration Criteria of the
29 March Remuneration and Company's Senior Management in 2023
No
2023 Appraisal Committee in 3. Considered and approved the Proposal
2023 on Allowances for Independent Directors
for the 6th Session of Board of Directors
4. Considered and approved the Proposal
on Repurchase and Cancellation of Some
Restricted Shares
(V) During the Reporting Period, the Strategy Committee held 1 meeting
Convening Important comments and
Contents of meetings Other performance of duties
date recommendations
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Annual Report 2023
1. Considered and approved the Proposal
First meeting of the on the Company's 2023 Business Plan
29 March
Strategy Committee in 2. Considered and approved the 2022 No
2023
2023 Environmental, Social and Governance
Report
(VI) Details of the matter in question
□ Applicable √ Not applicable
VIII. Particulars on Risks in the Company Identified by the Supervisory Committee
□ Applicable √ Not applicable
The Supervisory Committee has no objection to the supervision matters during the Reporting Period.
IX. Employee of Parent Company and the Principal Subsidiaries of the Company at the End of the
Reporting Period
(I) Employees
Number of employees in the parent company 2,583
Number of employees in major subsidiaries 3,256
Number of employees 5,839
Number of retirees of whom the parent company and
major subsidiaries are responsible for the expenses
Professional structure
Category Number
Production personnel 1,427
Sales personnel 1,464
Technical personnel 503
Finance personnel 208
Administration personnel 332
Management personnel 1,333
Others 572
Total 5,839
Education background
Category Number (person)
University (including college) and above 3,621
High school, technical secondary school 964
Others 1,254
Total 5,839
(II) Remuneration policy
√ Applicable □ Not applicable
To conform to the Company's organizational strategy, the Company implements a competitive
remuneration policy where the employees' remuneration is determined considering the job value,
person-job fit and performance. By establishing and improving competitive remunerations and benefits,
performance appraisal systems and incentive systems, the Company attracted all kinds of professional
talents and formed healthy competitive work environment to stimulate the vitality and potential of
employees, build a stable, professional team, and ensure the growth of the Company's performance.
(III) Training program
√ Applicable □ Not applicable
The Company attached great importance to the development of talents in the organization,
especially the establishment of leadership talent echelon and the cultivation of managers at all levels and
personnel for strategic key positions. The Company will establish a management curriculum system and
internal trainer team, develop hybrid learning projects, such as the new manager transformation project
and the training project for management trainees, and leverage the online learning platforms to improve
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Annual Report 2023
the management capabilities of the Management and accumulate forces. Additionally, employees' core
expertise will be improved through centralised training and guidance from superiors. The training under
the production and manufacturing system will focus on the training and accumulation of core skilled
workers. Moreover, hierarchical and classified management will be implemented to refine the job
qualification and certification training system, and "learn by working and vice versa" will be promoted.
Also, the training system for skilled workers will be built.
(IV) Labor outsourcing
√ Applicable □ Not applicable
Total working hours of labor outsourcing 19,080,037 hours
Total remuneration paid for labor outsourcing RMB733,776,950
X. Profit Distribution or Capital Accumulation Plan
(I) Formulation, implementation or adjustment of the cash dividend policy
√ Applicable □ Not applicable
1. The existing profit distribution policy of the Company is implemented after it was passed at the
19th meeting of the 5th session of the Board of Directors and 2022 annual shareholders' meeting.
2. Principle in profit distribution of the Company: The Company implements the dividend
distribution policy which entitles the shareholders to the same rights and same dividends, under which
shareholders are entitled to receive dividends and other kinds of distribution of interests based on the
number of shares held by them. The Company adopts active profit distribution policy, which emphasizes
investors' reasonable investment returns while maintaining sustainability and stability. The Company is
allowed to distribute profit in cash or shares, but its profit distribution shall not exceed the range of the
accumulated distributable profits or affect the Company's ability to continue as a going concern.
3. Overall approaches to distribute profit of the Company: The Company distributes dividends in
cash or shares, or cash-and-shares, and if the Company satisfies the conditions for cash dividends,
priority should be given to profit distribution by means of cash dividends.
4. Specific conditions and proportion for cash dividends: The Company primarily adopts cash
dividend as its profit distribution policy. The Company may distribute cash dividend when it makes a
profit in the current year and the distributable profits are positive after making up losses, contributing to
the statutory reserves and surplus reserves, but the profit distribution shall not exceed the range of the
accumulated distributable profits. In general, if there are no material investment plans or significant cash
expenditure, the Company may distribute profit in cash for a single year not less than 20% of the
distributable profit realized in the current year.
In addition, as for the proportion of cash dividends to the total profit distribution, the Board of
Directors shall take into full account of various factors such as features of the industries where the
Company operates, the stage of development, its own business model, level of profitability, and whether
there is significant capital expenditure arrangement, to distinguish the following situations and
determine differentiated cash dividend proportion in accordance with the procedures as required by the
Articles of Association:
(1) If the Company is at a mature stage of development and has no significant capital expenditure
arrangement, the proportion of cash dividends in the profit distribution shall be at least 80% when the
profit distribution is made;
(2) If the Company is at a mature stage of development and has significant capital expenditure
arrangement, the proportion of cash dividends in the profit distribution shall be at least 40% when the
profit distribution is made;
(3) If the Company is at a growing stage of development and has no significant capital expenditure
arrangement, the proportion of cash dividends in the profit distribution shall be at least 30% when the
profit distribution is made;
(4) If the Company is at a growing stage of development and has significant capital expenditure
arrangement, the proportion of cash dividends in the profit distribution shall be at least 20% when the
profit distribution is made.
The aforesaid "significant investment plans" or "significant cash expenditure" refers to one of the
following:
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Annual Report 2023
(1) The proposed external investment, acquisition of assets or purchase of equipment by the
Company in the coming twelve months with accumulated expenses amounting to or exceeding 50% of
the latest audited net assets of the Company and exceeding RMB50 million;
(2) The proposed external investment, acquisition of assets or purchase of equipment by the
Company in the coming twelve months with accumulated expenses amounting to or exceeding 30% of
the latest audited total assets of the Company.
Significant investment plans or significant cash expenditure that meets the above conditions shall
be reviewed and approved at the general meeting after being reviewed by the Board meeting.
5. During the Reporting Period, the formulation and implementation of the cash dividend policy has
complied with the Articles of Association and the resolutions of the general meetings. The dividend
distribution standards and proportions are clearly stated, and relevant decision-making procedures and
systems are complete. Independent directors have diligently served their obligations, and played their
roles. As minority shareholders have opportunities to fully express their opinions and appeals, their
legitimate interests have been fully protected.
(II) Special description of the cash dividend policy
√ Applicable □ Not applicable
Does it meet the requirements of the Company's Articles of Association or the
√Yes □No
resolutions adopted at the Annual General Meeting of Shareholders:
Are the dividend criteria and ratio definite and clear: √Yes □No
Are the relevant decision-making procedures and mechanisms complete √Yes □No
Do the independent directors perform their duties and play their due role √Yes □No
Do the minority shareholders have the opportunity to fully express their opinions
√Yes □No
and requests, and whether their legitimate rights and interests get fully protection
(III) If the Company records profit distributable to shareholders of the Company during the
Reporting Period is positive but there is no proposal for cash dividend, the Company shall disclose
the reasons, the usage and the utilization plan of the undistributed profits in detail
□ Applicable √ Not applicable
(IV) Profit distribution and bonus issue from capital reserves for the Reporting Period
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Bonus issue from profit (share/10 shares) 0
Cash dividend/10 shares (RMB Yuan) (tax inclusive) 8
Bonus issue from capital reserves (share/10 shares) 0
Cash dividends (tax inclusive) 738,990,821.60
Net profit attributable to ordinary shareholders of the listed
company in the consolidated financial statements of the 1,526,801,727.16
dividend year
Cash dividends as % of net profit attributable to ordinary
shareholders of the listed company in the consolidated 48.40
financial statements
Dividends in form of share repurchases in cash 35,719,468.96
Total dividends (tax inclusive) 774,710,290.56
Total dividends as % of net profit attributable to ordinary
shareholders of the listed company in the consolidated 50.74
financial statements
49 / 224
Annual Report 2023
XI. Equity Incentive Plan, Employee Shareholding Plan or Other Employee Incentive Measures of
the Company and Their Impacts
(I) Incentive matters disclosed in temporary announcements and without further progress or
change in subsequent implementation
√ Applicable □ Not applicable
Item Query index
Announcement on Resolutions of the 19th Meeting of the
5th Session of Board of Directors numbered 2023-004
Announcement on Resolutions of the 17th Meeting of the
On 29 March 2023, the Company held the 19th meeting of
5th Session of Supervisory Committee numbered
the 5th session of Board of Directors and the 17th meeting of
2023-005
the 5th session of Supervisory Committee, and considered
Announcement on Repurchase and Cancellation of Some
and approved the Proposal on Repurchase and Cancellation
Restricted Shares numbered 2023-010
of Some Restricted Shares.
Announcement on Notifying Creditors of Repurchase
and Cancellation of Some Restricted Shares numbered
2023-011
Announcement on Resolutions of the 2nd Meeting of the
On 27 April 2023, the Company held the 2nd meeting of the 6th Session of Board of Directors numbered 2023-019
6th session of Board of Directors and the 2nd meeting of the Announcement on Resolutions of the 2nd Meeting of the
6th session of Supervisory Committee, and considered and 6th Session of Supervisory Committee numbered
approved the Proposal on Adjusting the Repurchase Price of 2023-020
Restricted Shares. Announcement on Adjusting the Repurchase Price of
Restricted Shares numbered 2023-021
On 9 June 2023, the Company completed the cancellation of Announcement on the Implementation of Repurchase
some restricted stocks with China Securities Depository and and Cancellation of Restricted Share for Equity
Clearing Corporation Limited Shanghai Branch. Incentive numbered 2023-024
(II) Incentive matters which have not been disclosed in temporary announcements or with further
progress
Equity incentive
□ Applicable √ Not applicable
Other descriptions
□ Applicable √ Not applicable
Employee shareholding plan
□ Applicable √ Not applicable
Other incentive measures
□ Applicable √ Not applicable
(III) Equity incentives granted to directors and senior management during the Reporting Period
□ Applicable √ Not applicable
(IV) Establishment and implementation of appraisal mechanism and the incentive mechanism for
senior management during the Reporting Period
√ Applicable □ Not applicable
The Company has established a relatively perfect performance evaluation and incentive system.
Based on the principle that the income of senior management is linked to the business performance of
the enterprise, the Company followed an open, fair and impartial process to appoint senior management,
and continuously and timely improved the assessment mechanism. The Company has established a
compensation system in line with the development needs of the Company and the actual situation of the
industry to ensure the enthusiasm of senior management.
The Company implemented the 2020 Restricted Share Incentive Plan to provide long-term
incentives for senior management and core technicians, and formulated corresponding assessment
methods to carry out scientific, standardized and institutionalized assessment management for senior
management and core technicians included in restricted share incentive plan. The Company has
guaranteed the stability of the core team and key employees and mobilizing their enthusiasm by virtue of
50 / 224
Annual Report 2023
a reasonable, sound, flexible and effective remuneration and welfare system, and a long-term benefit
mechanism based on the supporting equity incentive plan.
XII. Construction and implementation of internal control system during the Reporting Period
√ Applicable □ Not applicable
During the Reporting Period, the Company has established a strict internal control management
system in strict accordance with the requirements of the Company Law, the Securities Law, the Stock
Listing Rules of the Shanghai Stock Exchange, and other applicable laws, regulations and regulatory
documents, as well as the Articles of Association. The Company has set up an Audit Committee under
the Board of Directors to review the internal control of the Company, supervise the effective
implementation of internal control and self-evaluation of internal control, and guide and coordinate
internal audit and other related matters. The Company has set up an Audit Department to independently
carry out audit under the guidance of the Audit Committee under the Board of Directors. The Audit
Department is accountable to the Audit Committee. The Audit Department evaluates the efficiency,
results and effectiveness of the design and implementation of internal control through internal control
audits, business management audits, special audits and economic responsibility audits, and promotes the
Company's continuous improvement and enhancement of the quality of internal control. The Audit
Department reports the internal control defects found in the audit to the Supervisory Committee, the
Audit Committee or the management according to the seriousness of the problems, and urges the
relevant departments to take active measures to rectify them. According to the identification of major
defects in the Company's internal control, in 2023, the Company had no significant defects and
important defects in the internal control of financial reporting and non-financial reporting. The Company
has continuously improved the internal control system. Therefore, the internal control operation
mechanism is effective, which has achieved the expected internal control objectives and protected the
interests of the Company and all shareholders.
Particulars on major defects in the internal control during the Reporting Period
□ Applicable √ Not applicable
XIII. Management and Control over the Subsidiaries during the Reporting Period
√ Applicable □ Not applicable
During the Reporting Period, the Company has implemented the Management System for Holding
Subsidiaries, stipulating the control measures and the responsibilities and authority of the parent
company and the subsidiaries in the subsidiary's articles of association, personnel appointment and
removal, financial management, operation decision, information management, inspection and
assessment, so as to ensure that the various businesses of the subsidiaries meet the requirements of the
Company's overall development strategy, ensure that the financial position of the subsidiaries is
effectively monitored by the Company, prevent significant operating risks of the subsidiaries, and
protect the security and integrity of assets.
Problems
Measures Resolution Follow-up
Company Name Integration plan Integration progress encountered in
taken progress resolution plan
integration
Integration of The integration of
Hubei Chaoxin organization, organizational
Real Estate Co., management structure, management
Ltd. (湖北潮信置 No No No No
system, operation system, operation
业有限公司) mode and mode and business has
business been completed.
XIV. Particulars on the Auditor's Report on Internal Control
√ Applicable □ Not applicable
The Company engaged BDO China Shu Lun Pan CPAs (LLP) to audit the implementation of
internal control in its 2023 financial statements and the Audit Report on Internal Control was issued. For
the full text of the report, see 2023 Audit Report on Internal Control disclosed on the website of the
Shanghai Stock Exchange (www.sse.com.cn) on 30 March 2024.
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Annual Report 2023
Whether to disclose the audit report on internal control: yes
Opinion type of the audit report on internal control: With unqualified opinion
XV. Self-inspection and Rectification of Problems in the Special Action on Governance of Listed
Companies
Not applicable
XVI. Others
□ Applicable √ Not applicable
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Annual Report 2023
Section V Environmental and Social Responsibility
I. Environmental Information
Whether an environmental protection mechanism
Yes
has been put in place
Expenditure on environmental protection during
239
the Reporting Period (Unit: RMB 0’000)
(I) Explanation on environmental protection of the companies and their major subsidiaries falling
into the category of key pollutant discharging organizations designated by the environmental
protection authorities
□ Applicable √ Not applicable
(II) Explanation on environmental protection of companies other than key pollutant discharging
units
√ Applicable □ Not applicable
The Company does not belong to the key pollutant discharging units published by national
environmental protection authorities. The Company pays great attention to environmental protection,
strictly abides by the Environmental Protection Law of the People's Republic of China and other
relevant laws and regulations, and keeps refining its environmental management system. The Company's
production base in Shanghai has passed the ISO14001 environmental management system certification.
In routine management, the Company strengthens the monitoring and handling of "three wastes" and
ensures that they are discharged as per the requirements.
All solid waste from the manufacturing process of the Company has been properly disposed of in
accordance with relevant laws, regulations and discharge standards to ensure compliant discharge and
treatment of waste. The Company keeps monitoring water consumption data to ensure compliant
wastewater discharge and that domestic wastewater is treated in accordance with local regulations on
sewage treatment. It also manages waste gas in strict accordance with relevant laws, regulations and
standards, and keeps upgrading and optimising the facilities for waste gas pollution control to eliminate
or relieve the adverse impacts of waste gas on the atmospheric environment to the greatest extent.
1. Administrative penalties for environmental issues
√ Applicable □ Not applicable
Axus Stationery was fined RMB100,000 for failure to maintain the proper operation of air pollutant
treatment facilities according to the Written Decision of Administrative Penalty issued by Shanghai
Municipal Bureau of Ecology and Environment on 23 October 2023. It has paid the fine in full amount,
and has completed the remediation as required.
2. Disclosing other environmental information with reference to key pollutant discharging units
□ Applicable √ Not applicable
3. Reason for not disclosing other environmental information
□ Applicable √ Not applicable
(III) Information that is conducive to ecological protection, pollution prevention and control, and
fulfillment of environmental responsibility
√ Applicable □ Not applicable
The Company attaches great importance to the impact of its operation on the environment, and
takes the initiative to shoulder the responsibility for environmental protection. It actively promoted the
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Annual Report 2023
implementation of strategies to cope with climate change, continuously intensified the management of
environmental operation footprints and, in 2023, won the title of "Five-star Green Factory" co-granted
by Shanghai Municipal Commission of Economy and Informatization and Shanghai Municipal
Development & Reform Commission.
Starting from consumer insights, the Company kept developing innovative and sustainable products,
adopted sustainable raw material procurement, and actively promoted green and innovative product
packaging. Through marketing channels, product publicity and consumer interaction, it popularised the
importance of plastic reduction, low carbon and biodiversity protection among young consumers and
enhanced the public's awareness and engagement in sustainable development.
For more details, see the 2023 Environmental, Social and Governance Report disclosed by the
Company on the website of the Shanghai Stock Exchange (www.sse.com.cn) on 30 March 2024.
(IV) Measures taken to reduce carbon emissions during the Reporting Period and their effects
Whether to adopt carbon reduction measures Yes
Reduction of carbon dioxide-equivalent (Unit: ton) 6,059
Types of carbon reduction measures (for example,
Using PV to generate electricity, improving the
using clean energy to generate electricity, using
energy conservation of equipment in the
carbon reduction technology in the production
manufacturing process, and developing and
process, and developing and producing new
producing low-carbon products
products to assist carbon reduction.)
Detailed description
√ Applicable □ Not applicable
The Company continued to tap the potential for energy conservation and carbon emission reduction
by initiating a number of projects themed on photovoltaic power generation, gas conservation via air
compressors, heat recovery, energy conservation via injection moulding equipment, and optimisation of
water pump motors, gaining significant benefits from carbon emission reduction.
In terms of photovoltaic power generation, the Company has been carrying out a photovoltaic
power generation project in its production and logistics base in Shanghai since 2020, and the subsidiary
Axus Stationery has been building distributed photovoltaic power generators on the roofs of its factories
in Shanghai and Siyang. As of the end of 2023, the installed capacity of photovoltaic power generation
has totalled 15,700 kW, and the annual consumption of photovoltaic power has totalled 13.22 million
kWh.
For more details, see the 2023 Environmental, Social and Governance Report disclosed by the
Company on the website of the Shanghai Stock Exchange (www.sse.com.cn) on 30 March 2024.
II. Overview of Social Responsibility
(I) Whether a social responsibility report, sustainability report or ESG report is disclosed
separately
√ Applicable □ Not applicable
The Company has disclosed the 2023 Environmental, Social and Governance Report on the website
of the Shanghai Stock Exchange (www.sse.com.cn) on 30 March 2024.
(II) Particulars on the fulfillment of social responsibility
√ Applicable □ Not applicable
Donations and public welfare
Number/content Description
activities
Total expenditure (RMB 0’000) 608
Of which: Funds (RMB 0’000) 303
Worth of supplies and
305
materials (RMB 0’000)
Number of people benefited 430,000
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Annual Report 2023
Detailed description
√ Applicable □ Not applicable
The Company always undertakes social responsibilities of its own accord. During the Reporting
Period, Shanghai M&G Charity Foundation continued to give play to the superior resources of the
Company, highlighted and deeply engaged in rural aesthetic education, special population development
and other public welfare activities, and continued to further foster the "Golden Seed" student aid
program, "Beautiful Time, Aesthetic Class" rural aesthetic education program, "M&G Star Kids"
program for autistic people and other public welfare programs, gathering forces from all walks of life to
follow up on social topics to care for children's childhood and power the development of a harmonious
society.
For more details, see the 2023 Environmental, Social and Governance Report disclosed by the
Company on the website of the Shanghai Stock Exchange (www.sse.com.cn) on 30 March 2024.
III. Consolidation and Expansion of the Achievements of Poverty Alleviation and Rural
Revitalization
√ Applicable □ Not applicable
Poverty alleviation and rural
Number/content Description
revitalization activities
Total expenditure (RMB 0’000) 383
Of which: Funds (RMB 0’000) 100
Worth of supplies and
283
materials (RMB 0’000)
Number of people benefited 430,000
Way of support (by industrial
By educational
development, job creation,
development
educational development, etc.)
Detailed description
√ Applicable □ Not applicable
Shanghai M&G Charity Foundation actively responded to the state's call for rural aesthetic
education, integrated social resources and initiated the "Beautiful Time, Aesthetic Class" rural aesthetic
education program based on the status quo of scattered resources for aesthetic education, promoting the
creation of industrial ecology for rural aesthetic education for children and beefing up rural revitalisation
and local aesthetic quality through aesthetic education. Joining hands with a number of partners,
Shanghai M&G Charity Foundation has been delivering M&G public art classes in 153 rural primary
schools and the children service stations in 20 communities, and organised rural painting competitions
attended by nearly 120,000 rural children by intensively integrating its business strengths and public
welfare courses.
For more details, see the 2023 Environmental, Social and Governance Report disclosed by the
Company on the website of the Shanghai Stock Exchange (www.sse.com.cn) on 30 March 2024.
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Annual Report 2023
Section VI Major Events
I. Performance of Undertakings
(I) Undertakings by the Company's beneficial controllers, shareholders, related parties, acquirers, the Company and other related parties during or
subsisted in the Reporting Period
√ Applicable □ Not applicable
If not
Whether If not
performed
Whether strictly performed
Background in time,
Type of Undertaking Time of the there is Term of the performed in time,
of Contents of the undertaking describe
undertakings party undertaking deadline for undertaking in a describe
undertakings the
performance timely plans in
specific
manner next steps
reasons
Undertaking for restriction on sale of shares and voluntary lockup undertaking by Keying Investment
Keying and Jiekui Investment, shareholders holding more than 5% of the equity
Restriction
Investment (1) The proportion of shares unlocked every year shall not exceed 25% of the total shares held by the 22 April
on sale of No Permanent Yes
Jiekui Company; 2014
shares
Investment (2) Notwithstanding any change in the position of some of the partners in the joint venture or their
departure from the joint venture, the joint venture will strictly perform the above undertakings.
Shareholding and intention to reduce shareholding of the controlling shareholder—M&G Group
(1) M&G Group advocates that shares of the Company should be held in the long term to ensure that
M&G Group shares operation achievements of the Company on a continuous basis. Therefore, M&G Group
has the intention to hold shares of the Company for a long term.
(2) After the lockup period of the Company's shares held by M&G Group expires, it is possible that
M&G Group might reduce shareholding of the Company appropriately for the development requirement of
M&G Group. In this situation, M&G Group is expected to reduce its shareholdings by no more than 5% of
Undertakings the total shares of the Company held by M&G Group within the first year after the lockup period expires
related to with the price of the shareholding reduction not lower than the offering price of the Company's initial public
initial public M&G offering. The shareholding reduction shall not exceed 10% of the total shares of the Company held by M&G 22 April
Others No Permanent Yes
offering Group Group within the second year after the lockup period expires with the price of the shareholding reduction not 2014
lower than the offering price of the Company's initial public offering at the time of the offering and the
listing. If there are any ex-rights or ex-dividends events, such as the declaration of dividends, bonus issue,
and capitalization from capital reserve to share capital in the Company before the reduction of the aforesaid
shares, the price of the shareholding reduction for M&G Group should not be lower than the adjusted
offering price of the Company's initial public offering shares at the time of the offering and the listing.
(3) If M&G Group intends to reduce shareholding of the Company, it will announce its reduction plan 3
transaction days before reducing the shareholding. Furthermore, the reduction will be performed legally
according to rules of Shanghai Stock Exchange in the form of block trade, auction transaction as well as
other methods recognized by China Securities Regulatory Commission.
Keying Shareholding and intention to reduce shareholding of Keying Investment and Jiekui Investment,
Investment shareholders holding more than 5% of the equity 22 April
Others No Permanent Yes
Jiekui (1) The joint venture, which is an employee-owned enterprise established by officials and important 2014
Investment business professionals of the Company, advocates that shares of the Company should be held in the long
56 / 224
Annual Report 2023
term to ensure that operation achievements of the Company are shared on a continuous basis. Therefore, the
joint venture has the intention to hold shares of the Company for a long term.
(2) After the lockup period of the Company's shares held by joint venture expires, it is possible that the
joint venture might reduce shareholding of the Company appropriately for the development requirement of
the joint venture. In this situation, the joint venture is expected to reduce its shareholdings by no more than
25% of the total shares of the Company held by the joint venture within the first year after the lockup period
expires with the price of the shareholding reduction not lower than the offering price of the Company's
initial public offering. The shareholding reduction shall not exceed 25% of the total shares of the Company
held by joint venture within the second year after the lockup period expires with the price of the
shareholding reduction not lower than the offering price of the Company's initial public offering. If there are
any ex-rights or ex-dividends events, such as the declaration of dividends, bonus issue, and capitalization
from capital reserve to share capital before the joint venture reduces its holding of the aforesaid shares, the
price of the shareholding reduction for the joint venture should not be lower than the adjusted offering price
of the Company's initial public offering shares at the time of the offering and the listing;
(3) If the joint venture intends to reduce shareholding of the Company, it will announce its reduction
plan 3 transaction days before reducing the shareholding. Furthermore, the reduction will be performed
legally according to rules of Shanghai Stock Exchange in the form of block trade, auction transaction as well
as other methods recognized by China Securities Regulatory Commission.
Undertaking in relation to non-competition by M&G Group, Keying Investment and Jiekui Investment
(1) The enterprise and other enterprises (except the Company and enterprises controlled by it)
controlled and (or) invested by it currently have not engaged in any form of business or activity that
constitutes or may constitute a direct or indirect competition relationship with principal businesses of the
Company and enterprises controlled by it.
(2) After the initial public offering and listing of the Company, the enterprise and other enterprises
(except the Company and enterprises controlled by it) controlled and (or) invested by it will not:
① engage in any form of business or activity that constitutes or may constitute a direct or indirect
competition relationship with current or future principal businesses that the Company and enterprises
M&G controlled by it specialize in;
Group, ② support other enterprises other than the Company and enterprises controlled by it in any form of
Address
Keying business or activity that constitutes or may constitute a direct or indirect competition relationship with 15
competition
Investment current or future principal businesses that the Company and enterprises controlled by it specialize in; February No Permanent Yes
between
and ③ interfere in any form of business or activity that constitutes or may constitute a direct or indirect 2012
counterparts
Jiekui
competition relationship with current or future principal businesses that the Company and enterprises
Investment
controlled by it specialize in.
Apart from the aforesaid undertaking, the enterprise further guarantees that it will
① ensure its independence in assets, businesses, employees, finance and institution according to
relevant rules of laws and regulations;
② adopt legal and effective measures to stop companies, enterprises and other economic organizations
that the enterprise has control right from engaging directly or indirectly in the same or similar businesses
with the Company;
③ not take advantage of its position as the controlling shareholder of the Company to carry out any
other activities that may harm the rights of the Company and other shareholders.
Address Chen Undertaking in relation to non-competition by beneficial controllers—Chen Huwen, Chen Huxiong,
15
competition Huwen, and Chen Xueling
February No Permanent Yes
between Chen (1) I currently hold no position in other companies or economic organizations that have the same or
2012
counterparts Huxiong, similar business with the Company or enterprises controlled by it.
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Annual Report 2023
and Chen (2) Other enterprises (except the Company and enterprises controlled by it) which are controlled by me
Xueling independently and/ or in which I am one of the beneficial shareholders currently have not engaged in any
form of business or activity that constitutes or may constitute a direct or indirect competition relationship
with principal businesses of the Company and enterprises controlled by it.
(3) After the initial public offering and listing of the Company, other enterprises (except the Company
and enterprises controlled by it) which are controlled by me independently and/ or in which I am one of the
beneficial shareholders will not:
① engage in any form of business or activity that constitutes or may constitute a direct or indirect
competition relationship with current or future principal businesses that the Company and enterprises
controlled by it specialize in;
② support other enterprises other than the Company and enterprises controlled by it in any form of
business or activity that constitutes or may constitute a direct or indirect competition relationship with
current or future principal businesses that the Company and enterprises controlled by it specialize in;
③ interfere in any form of business or activity that constitutes or may constitute a direct or indirect
competition relationship with current or future principal businesses that the Company and enterprises
controlled by it specialize in.
Apart from the aforesaid undertaking, I further guarantee that I will:
① ensure its independence in assets, businesses, employees, finance and institution according to
relevant rules of laws and regulations;
② adopt legal and effective measures to stop companies, enterprises and other economic organizations
that I have control right from engaging directly or indirectly in the same or similar businesses with the
Company;
③ not take advantage of the position as the beneficial controller of the Company to carry out any other
activities that may harm the rights of the Company and other shareholders.
Undertaking on the binding measures in case of the failure to fulfill the undertaking by M&G
Stationery
(1) The Company will strictly perform various obligations and responsibilities set out in all public
undertaking issues (hereinafter referred to as "Undertaking Issues") in the initial public offering and listing.
(2) If the Company fails to perform various obligations and responsibilities set out in the undertaking
issues, the Company undertakes to take the following measures for restrictions:
① Compensate public investors for direct losses suffered by relying on relevant undertakings to
implement transactions through self-owned capital with the amount of compensation being determined
M&G according to negotiation between the Company and investors, or the method or amount determined by the 22 April
Others No Permanent Yes
Stationery securities supervision and administration department and the judicial authority; 2014
② Within 12 months after the date when the Company fully eliminates the adverse effect due to failure
on related undertaking issues, the Company shall not issue securities, including but not limited to shares,
corporate bonds, convertible corporate bonds and other types of securities approved by securities regulatory
authorities;
③ The Company shall not increase the salary or allowance of our directors, supervisors and senior
management in any form until the Company has fully eliminated the adverse effect due to failure on related
undertaking issues.
Undertaking on the binding measures in case of the failure to fulfill the undertaking by the controlling
M&G shareholder—M&G Group 22 April
Others No Permanent Yes
Group (1) M&G Group will strictly perform various obligations and responsibilities set out in all public 2014
undertaking issues (hereinafter referred to as "Undertaking Issues") in the initial public offering and listing
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Annual Report 2023
of M&G Stationery.
(2) If M&G Group fails to perform various obligations and responsibilities set out in the aforesaid
undertaking issues, M&G Group undertakes to take the following measures for restrictions:
① Compensate public investors for direct losses suffered by relying on relevant undertakings to
implement transactions through self-owned capital with the amount of compensation being determined
according to negotiation between M&G Group and investors, or the method or amount determined by the
securities regulatory authorities and the judicial authority;
② The lockup period of M&G Stationery's shares held by M&G Group will be automatically extended
to the date when M&G Group fully eliminates the adverse effect due to failure on related undertaking issues.
Undertaking on the binding measures in case of the failure to fulfill the undertaking by beneficial
controllers—Chen Huwen, Chen Huxiong, and Chen Xueling
(1) I will strictly perform various obligations and responsibilities set out in all public undertaking issues
(hereinafter referred to as "Undertaking Issues") in the initial public offering and listing of M&G Stationery.
(2) If I fail to perform various obligations and responsibilities set out in the aforesaid undertaking
Chen issues, I undertake to take the following measures for restrictions:
Huwen, ① Compensate public investors for direct losses suffered by relying on relevant undertakings to
Chen implement transactions through self-owned capital with the amount of compensation being determined 22 April
Others according to negotiation between investors and me, or the method or amount determined by the securities No Permanent Yes
Huxiong, 2014
and Chen regulatory authorities and the judicial authority;
Xueling ② The lockup period of M&G Stationery's shares held by me directly or indirectly will be
automatically extended to the date when I fully eliminate the adverse effect due to failure on related
undertaking issues.
③ I shall not require M&G Stationery to increase my salary or allowance in any form, nor shall I
accept the increase of salary or allowance by M&G Stationery in any form until I have fully eliminated the
adverse effect due to failure on related undertaking issues.
Undertaking on the binding measures in case of the failure to fulfill the undertaking by Keying
Investment and Jiekui Investment, shareholders holding more than 5% of the equity
(1) The joint venture will strictly perform various obligations and responsibilities set out in all public
undertaking issues (hereinafter referred to as "Undertaking Issues") in the initial public offering and listing
of M&G Stationery.
Keying (2) If the joint venture fails to perform various obligations and responsibilities set out in the aforesaid
Investment undertaking issues, the joint venture undertakes to take the following measures for restrictions: 22 April
Others ① Compensate public investors for direct losses suffered by relying on relevant undertakings to No Permanent Yes
Jiekui 2014
Investment implement transactions through self-owned capital with the amount of compensation being determined
according to negotiation between the joint venture and investors, or the method or amount determined by the
securities regulatory authorities and the judicial authority;
② The lockup period of M&G Stationery's shares held by the joint venture will be automatically
extended to the date when the joint venture fully eliminates the adverse effect due to failure on related
undertaking issues.
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Annual Report 2023
(II) Where the Company has profit forecasts on assets or projects, and the Reporting Period was
within the term of profit forecasts, the Company has to state whether such profit forecasts on
assets or projects are fulfilled and the reasons thereof
□Fulfilled □Unfulfilled √ Not applicable
(III) Execution of the performance undertakings and its impact on the goodwill impairment
testing
□ Applicable √ Not applicable
II. Non-operating Misappropriation of Funds of the Company by any Controlling Shareholders
and Their Related Parties during the Reporting Period
□ Applicable √ Not applicable
III. Illegal Guarantee
□ Applicable √ Not applicable
IV. Explanation of the Company's Board of Directors on the "Auditor's Report with Modified
Audit Opinions" Issued by the CPA
□ Applicable √ Not applicable
V. Analysis and Explanation from the Company on the Reasons and Impact of the Change of
Accounting Policies, Accounting Estimates or Correction on Significant Accounting Errors
(I) Analysis and explanation from the Company on the reasons and impact of the change of
accounting policies or accounting estimates
□ Applicable √ Not applicable
(II) Analysis and explanation from the Company on the reasons and impact of the correction on
significant accounting errors
□ Applicable √ Not applicable
(III) Communication with the previous accounting firm
□ Applicable √ Not applicable
(IV) Approval process and other descriptions
□ Applicable √ Not applicable
VI. Appointment and Dismissal of the Accounting Firm
Unit: 0'000 Currency: RMB
Current accounting firm
Name of domestic accounting firm BDO China Shu Lun Pan CPAs (LLP)
Remuneration of domestic accounting firm 170
Term of office of domestic accounting firm 14
Names of certified public accountants of domestic
Chen Luying, and Fang Ning
accounting firm
How many consecutive years the certified public
Chen Luying: 3 years
accountants of the domestic accounting firm have
Fang Ning: 1 year
provided audit service for the Company
Name Remuneration
Internal control audit accounting firm BDO China Shu Lun Pan CPAs (LLP) 90
60 / 224
Annual Report 2023
Explanation on appointment and dismissal of the accounting firm
√ Applicable □ Not applicable
During the Reporting Period, the BDO China Shu Lun Pan CPAs (LLP) was re-appointed as the audit
institution.
Explanation on the change of accounting firm during the auditing period
□ Applicable √ Not applicable
Explanation on any over 20% (inclusive) reduction in audit fee compared to last year
□ Applicable √ Not applicable
VII. Risk of Suspension of Listing
(I) Causes of suspension of listing
□ Applicable √ Not applicable
(II) Measures to be taken by the Company
□ Applicable √ Not applicable
(III) Situation and causes for termination of listing
□ Applicable √ Not applicable
VIII. Matters Related to Bankruptcy and Reorganization
□ Applicable √ Not applicable
IX. Material Litigation and Arbitration
□ The Company had material litigation and arbitration during the year
√ The Company did not have material litigation and arbitration during the year
X. Suspected Violation of Laws and Regulations, Punishment and Rectification to the Listed
Company, Its Directors, Supervisors, Senior Management, Controlling Shareholders, and Actual
Controllers
□ Applicable √ Not applicable
XI. Explanation on Credibility Status of the Company, Its Controlling Shareholders and Beneficial
Controllers during the Reporting Period
√ Applicable □ Not applicable
During the Reporting Period, since the Company, its controlling shareholders and beneficial
controllers maintained sound credibility, there had been no refusal to implement effective judgments of a
court or default of any material overdue debt.
XII. Major Related Transactions
(I) Related transactions in relation to daily operation
1. Events disclosed in temporary announcements and without further progress or change in
subsequent implementation
□ Applicable √ Not applicable
2. Events disclosed in temporary announcements and with further progress or change in
subsequent implementation
√ Applicable □ Not applicable
The 19th meeting of the 5th session of Board of Directors and 2022 annual general meeting of the
Company considered and approved the Proposal on the Expected Daily Related Transactions in 2023,
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Annual Report 2023
and issued the Announcement on the Implementation of Expected Daily Related Transactions in 2023
(number: 2023-007) on 31 March 2023.
In 2023, the estimated income from selling goods to the sales entities controlled by Guo Weilong
amounted to RMB500,000,000.00. It was estimated that fees for leasing the houses of M&G Group
(including office buildings, workshops, parking space, warehouses and dormitories) amounted to
RMB4,621,000.00; fees for leasing the office buildings and parking space of M&G Group amounted to
RMB700,000.00; utilities amounted to RMB5,600,000.00. It was estimated that the expenses incurred
by M&G Colipu in leasing M&G Group's office building and parking space amounted to
RMB10,652,000.00, the expenses incurred by Colipu Information Technology in leasing M&G Group's
office building amounted to RMB2,820,000.00, and the expenses incurred by Qizhihaowan in leasing
M&G Group's office building amounted to RMB1,063,000.00.
In 2023, the actual income from selling goods to the sales entities controlled by Guo Weilong
amounted to RMB280,620,675.09. The actual fees for leasing the houses of M&G Group (including
office buildings, workshops, parking space, warehouses and dormitories) amounted to
RMB4,620,952.39; fees for leasing the office buildings and parking space of M&G Group amounted to
RMB528,033.71; utilities amounted to RMB5,667,002.15. The actual expenses incurred by M&G
Colipu in leasing M&G Group's office building and parking space amounted to RMB10,691,879.11, the
actual expenses incurred by Colipu Information Technology in leasing M&G Group's office building
amounted to RMB2,813,180.16, and the actual expenses incurred by Qizhihaowan in leasing M&G
Group's office building amounted to RMB1,234,174.86.
3. Events not disclosed in temporary announcements
□ Applicable √ Not applicable
(II) Related transactions as a result of acquisition and disposal of assets or equity
1. Events disclosed in temporary announcements and without further progress or change in
subsequent implementation
□ Applicable √ Not applicable
2. Events disclosed in temporary announcements and with further progress or change in
subsequent implementation
□ Applicable √ Not applicable
3. Events not disclosed in temporary announcements
□ Applicable √ Not applicable
4. Disclosable performance achievements during the Reporting Period when involved with
agreed-upon performance
□ Applicable √ Not applicable
(III) Major related transactions in joint external investment
1. Events disclosed in temporary announcements and without further progress or change in
subsequent implementation
□ Applicable √ Not applicable
2. Events disclosed in temporary announcements and with further progress or change in
subsequent implementation
□ Applicable √ Not applicable
3. Events not disclosed in temporary announcements
□ Applicable √ Not applicable
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Annual Report 2023
(IV) Creditor’s rights and debts with related parties
1. Events disclosed in temporary announcements and without further progress or change in
subsequent implementation
□ Applicable √ Not applicable
2. Events disclosed in temporary announcements and with further progress or change in
subsequent implementation
□ Applicable √ Not applicable
3. Events not disclosed in temporary announcements
□ Applicable √ Not applicable
(V) Financial business between the Company and the affiliated financial companies, the
Company's holding financial company and the related party
□ Applicable √ Not applicable
(VI) Others
□ Applicable √ Not applicable
XIII. Material Contracts and Their Performance
(I) Trusteeship, contracting and leasing matters
1. Trusteeship
□ Applicable √ Not applicable
2. Contracting
□ Applicable √ Not applicable
3. Leasing
□ Applicable √ Not applicable
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Annual Report 2023
(II) Guarantees
□ Applicable √ Not applicable
(III) Entrusting others to manage cash assets
1. Entrusted wealth management
(1) Overall condition of entrusted wealth management
√ Applicable □ Not applicable
Unit: 0'000 Currency: RMB
Types Source of fund Amount incurred Undue balance Overdue uncollected amount
Bank financial product Raised capital
Bank financial product Self-owned capital 220,000 136,800
Others
□ Applicable √ Not applicable
(2) Individual entrusted wealth management
√ Applicable □ Not applicable
Unit: 0'000 Currency: RMB
Wheth
er
Amou
there
Beginni Termina Whether nt of
Method is a
Type of Amount of ng date tion Usa it has provis
to Overdue future
entruste entrusted of date of ge Restrict Annual Expecte gone ion for
Source of determi Actual gains Undue uncollec entrust
Trustee d wealth wealth entruste entruste of ed or rate of d return through the
fund ne or loss amount ted ed
manage manageme d wealth d wealth fun not return (if any) a legal impair
return amount wealth
ment nt manage manage d procedur ment
way manag
ment ment e or not (if
ement
any)
plan or
not
Agricultural Bank of
Bank
China Limited 2021/9/ 2023/5/ Self-owned
financial 25,000 No 2.77% 1,147.71 0 0 Yes Yes
Shanghai Guangming 30 29 capital
product
Sub-branch
Agricultural Bank of Bank 2021/10 2023/5/ Self-owned
10,000 No 2.79% 457.83 0 0 Yes Yes
China Limited financial /8 29 capital
64 / 224
Annual Report 2023
Shanghai Guangming product
Sub-branch
Agricultural Bank of
Bank
China Limited 2021/10 Self-owned
financial 45,000 No 45,000 0 Yes Yes
Shanghai Guangming /13 capital
product
Sub-branch
Shanghai Pudong
Bank
Development Bank 2022/10 2023/1/ Self-owned
financial 10,000 No 3.50% 86.30 0 0 Yes Yes
Co., Ltd. Fengxian /8 6 capital
product
Sub-branch
Shanghai Pudong
Bank
Development Bank 2022/12 2023/1/ Self-owned
financial 20,000 No 3.20% 52.60 0 0 Yes Yes
Co., Ltd. Fengxian /30 29 capital
product
Sub-branch
Shanghai Pudong
Bank
Development Bank 2022/12 2023/1/ Self-owned
financial 20,000 No 3.20% 52.60 0 0 Yes Yes
Co., Ltd. Fengxian /30 29 capital
product
Sub-branch
Shanghai Pudong
Bank
Development Bank 2023/3/ 2023/4/ Self-owned
financial 45,000 No 3.35% 123.90 0 0 Yes Yes
Co., Ltd. Fengxian 29 28 capital
product
Sub-branch
Shanghai Pudong
Bank
Development Bank 2023/5/ 2023/6/ Self-owned
financial 45,000 No 3.00% 114.66 0 0 Yes Yes
Co., Ltd. Fengxian 12 12 capital
product
Sub-branch
Shanghai Pudong
Bank
Development Bank 2023/6/ 2023/7/ Self-owned
financial 45,000 No 3.00% 110.96 0 0 Yes Yes
Co., Ltd. Fengxian 14 14 capital
product
Sub-branch
Shanghai Pudong
Bank
Development Bank 2023/7/ 2023/8/ Self-owned
financial 45,000 No 3.00% 114.66 0 0 Yes Yes
Co., Ltd. Fengxian 14 14 capital
product
Sub-branch
Agricultural Bank of
Bank
China Limited 2023/8/ 2023/12 Self-owned
financial 30,000 No 1.67% 194.70 0 0 Yes Yes
Shanghai Guangming 8 /28 capital
product
Sub-branch
Agricultural Bank of Bank
2023/8/ 2023/12 Self-owned
China Limited financial 5,000 No 2.06% 39.98 0 0 Yes Yes
8 /28 capital
Shanghai Guangming product
65 / 224
Annual Report 2023
Sub-branch
Agricultural Bank of
Bank
China Limited 2023/8/ 2023/11 Self-owned
financial 20,000 No 1.40% 76.94 0 0 Yes Yes
Shanghai Guangming 8 /16 capital
product
Sub-branch
Shanghai Pudong
Bank
Development Bank 2023/8/ 2023/9/ Self-owned
financial 10,000 No 2.90% 23.84 0 0 Yes Yes
Co., Ltd. Fengxian 8 7 capital
product
Sub-branch
Shanghai Pudong
Bank
Development Bank 2023/8/ Self-owned
financial 25,000 No 25,000 0 Yes Yes
Co., Ltd. Fengxian 8 capital
product
Sub-branch
Shanghai Pudong
Bank
Development Bank 2023/8/ Self-owned
financial 10,000 No 10,000 0 Yes Yes
Co., Ltd. Fengxian 8 capital
product
Sub-branch
Shanghai Pudong
Bank
Development Bank 2023/12 Self-owned
financial 26,800 No 26,800 0 Yes Yes
Co., Ltd. Fengxian /29 capital
product
Sub-branch
China Merchants
Bank Co., Ltd. Bank
2022/3/ Self-owned
Shanghai Branch financial 10,000 No 10,000 0 Yes Yes
29 capital
Wujiaochang product
Sub-branch
China Merchants
Bank Co., Ltd. Bank
2022/4/ Self-owned
Shanghai Branch financial 5,000 No 5,000 0 Yes Yes
8 capital
Wujiaochang product
Sub-branch
Agricultural Bank of
Bank
China Limited 2022/7/ Self-owned
financial 10,000 No 10,000 0 Yes Yes
Shanghai Guangming 12 capital
product
Sub-branch
China Merchants
Bank Co., Ltd. Bank
2022/9/ Self-owned
Shanghai Branch financial 5,000 No 5,000 0 Yes Yes
22 capital
Wujiaochang product
Sub-branch
66 / 224
Annual Report 2023
Others
□ Applicable √ Not applicable
(3) Provision for the impairment of entrusted wealth management
□ Applicable √ Not applicable
2. Entrusted loans
(1) Overall condition of entrusted loans
□ Applicable √ Not applicable
Others
□ Applicable √ Not applicable
(2) Individual entrusted loans
□ Applicable √ Not applicable
Others
□ Applicable √ Not applicable
(3) Provision for the impairment of entrusted loans
□ Applicable √ Not applicable
3. Others
□ Applicable √ Not applicable
(IV) Other material contracts
□ Applicable √ Not applicable
XIV. Progress on the use of raised capital
□ Applicable √ Not applicable
XV. Explanation of Other Major Events that Have a Material Impact on Investors' Value Judgments and Investment Decisions
□ Applicable √ Not applicable
67 / 224
Annual Report 2023
Section VII Changes in Shares and Shareholders
I. Changes in Share Capital
(I) Statement of changes in shares
1. Statement of changes in shares
Unit: share
Before the change Increase/decrease of the change (+, -) After the change
Issue
Capital
Percentage of Bonus Percentage
Quantity reserve-converted Others Subtotal Quantity
(%) new shares (%)
shares
shares
I. Restricted shares 3,104,630 0.33 -336,480 -336,480 2,768,150 0.30
1. State-owned shares
2. Shares held by state-owned legal
person
3. Other domestic shares 3,104,630 0.33 -336,480 -336,480 2,768,150 0.30
Including: Shares held by domestic
non-state-owned legal person
Shares held by domestic
3,104,630 0.33 -336,480 -336,480 2,768,150 0.30
natural person
4. Overseas shares
Including: Shares held by foreign
legal person
Shares held by overseas
natural person
II. Non-restricted circulating shares 923,828,420 99.67 923,828,420 99.70
1. Ordinary RMB shares 923,828,420 99.67 923,828,420 99.70
2. Domestically listed foreign shares
3. Overseas listed foreign shares
4. Others
III. Total number of shares 926,933,050 100.00 -336,480 -336,480 926,596,570 100.00
2. Explanation of changes in shares
√ Applicable □ Not applicable
According to the Company's 2020 Restricted Share Incentive Plan and the authorization of the
2019 Annual General Meeting of Shareholders：
Upon consideration and approval at the 19th meeting of the 5th session of Board of Directors and
the 17th meeting of the 5th session of Supervisory Committee, the Company completed the cancellation
of part of the restricted shares under such Incentive Plan with China Securities Depository and Clearing
Corporation Limited Shanghai Branch on 9 June 2023, repurchasing and canceling 336,480 restricted
shares of 44 incentive objects. After the completion of the repurchase and cancellation, the total shares
of the Company decreased from 926,933,050 shares to 926,596,570 shares.
3. Impact of changes in shares on the earnings per share, net asset value per share and other
financial indicators in the last year and period (if any)
√ Applicable □ Not applicable
(1) Basic earnings per share
Basic earnings per share are based on the combined net profit attributable to the ordinary
shareholders of the parent company divided by the weighted mean of the Company's outstanding
ordinary shares:
Unit: RMB
Item Amount in the current Amount in the last
period period
Combined net profit attributable to ordinary shareholders of the
1,526,801,727.16 1,280,594,010.17
parent company
Weighted mean of the Company's outstanding ordinary shares 921,056,004.08 923,037,570.00
Basic earnings per share 1.6577 1.3874
Including: Basic earnings per share from continuing as a going
1.6577 1.3874
concern
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Annual Report 2023
Basic earnings per share from not continuing as a
going concern
(2) Diluted earnings per share
Diluted earnings per share are based on the combined net profit (diluted) attributable to the ordinary
shareholders of the parent company divided by the weighted mean (diluted) of the Company's
outstanding ordinary shares:
Unit: RMB
Item Amount in the current Amount in the last
period period
Combined net profit (diluted) attributable to ordinary
1,526,801,727.16 1,282,456,788.17
shareholders of the parent company
Weighted mean of the Company's outstanding ordinary
921,056,004.08 923,819,770.41
shares(diluted)
Diluted earnings per share 1.6577 1.3874
Including: Diluted earnings per share from continuing as a
1.6577 1.3874
going concern
Diluted earnings per share from not continuing as
a going concern
4. Other contents that the Company deems necessary and the securities regulatory authorities
require disclosing
□ Applicable √ Not applicable
(II) Changes in restricted shares
√ Applicable □ Not applicable
Unit: share
Number of
Number of Increase in Number of
restricted
restricted number of restricted Reason for Date of lifting
Name of shares
shares at the restricted shares at the selling of selling
shareholder removed
beginning shares during end of the restrictions restrictions
during the
of the year the year year
year
Incentive Equity
objects of incentive
3,104,630 336,480 2,768,150
restricted shares selling
in 2020 restrictions
Total 3,104,630 336,480 2,768,150 / /
Note: " Number of restricted shares removed during the year " in the above table includes 336,480
shares repurchased and cancelled. The cancellation date is 9 June 2023.
II. Issuance and Listing of Securities
(I) Issuance of securities as at the Reporting Period
□ Applicable √ Not applicable
Explanation on issuance of securities as at the Reporting Period (please provide separate explanation on
the bonds with different interest rates during their duration):
□ Applicable √ Not applicable
(II) Changes in the total number of ordinary shares and shareholder structure of the Company
and changes in the structure of assets and liabilities of the Company
□ Applicable √ Not applicable
(III) Existing internal employee shares
□ Applicable √ Not applicable
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Annual Report 2023
III. Shareholder and Beneficial Controller
(I) Total number of shareholders
Total number of shareholders of ordinary shares as at the end of the
30,104
Reporting Period
Total number of shareholders of ordinary shares at the end of last month
30,622
prior to the disclosure date of this annual report
Total number of shareholders of preferred shares whose voting rights have
0
been restored as at the end of the Reporting Period
Total number of shareholders of preferred shares whose voting rights have
been restored at the end of last month prior to the disclosure date of this 0
annual report
(II) Table of shareholdings of the top ten shareholders and the top ten shareholders of shares in
circulation (or shareholders not subject to selling restrictions) as at the end of the Reporting
Period
Unit: share
Shareholdings of the top ten shareholders (exclusive of shares lent in refinancing)
Number of Pledged, marked, or
Number of shares shares held frozen
Name of shareholder Change during the Percentage Nature of
held as at the end subject to
(full name) Reporting Period (%) Status of shareholder
of the period selling Quantity
share
restrictions
Domestic
M&G Holdings (Group) Co.,
0 536,000,000 57.85 0 No 0 nonstate-owned
Ltd.
legal person
Hong Kong Securities
-26,046,207 41,055,987 4.43 0 No 0 Others
Clearing Company Limited
Industrial and Commercial
Bank of China
Limited-Invesco Great Wall
Emerging Mature and Hybrid
Equity Investment Funds（中 458,000 29,957,915 3.23 0 No 0 Others
国工商银行股份有限公司
－景顺长城新兴成长混合
型证券投资基金）
Bank of China
Limited-Invesco Great Wall
Ding Yi Hybrid Security
Investment Fund (LOF)（中 0 14,671,302 1.58 0 No 0 Others
国银行股份有限公司－景
顺长城鼎益混合型证券投
资基金）
Shanghai Keying Investment
0 14,662,558 1.58 0 No 0 Others
Management Office (L.P.)
Shanghai Jiekui Investment
0 14,493,900 1.56 0 No 0 Others
Management Firm (L.P.)
Domestic
Chen Huxiong 0 13,609,300 1.47 0 No 0
natural person
Domestic
Chen Huwen 0 13,609,300 1.47 0 No 0
natural person
China Construction Bank
Corporation －Lombarda
China Senior Care Industry
Mixed Securities Investment 13,408,237 13,408,237 1.45 0 No 0 Others
Fund (中国建设银行股份有
限公司－中欧养老产业混
合型证券投资基金)
Kuwait Investment Authority
1,529,266 9,534,553 1.03 0 No 0 Others
－Own Capital
Shareholdings of the top ten shareholders of non-restricted circulating shares
Number of non-restricted circulating shares Type and number of shares
Name of shareholder
held Type Quantity
Ordinary
M&G Holdings (Group) Co., Ltd. 536,000,000 536,000,000
RMB Shares
Ordinary
Hong Kong Securities Clearing Company Limited 41,055,987 41,055,987
RMB Shares
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Annual Report 2023
Industrial and Commercial Bank of China
Limited-Invesco Great Wall Emerging Mature and
Hybrid Equity Investment Funds（中国工商银行股 Ordinary
29,957,915 29,957,915
RMB Shares
份有限公司－景顺长城新兴成长混合型证券投
资基金）
Bank of China Limited-Invesco Great Wall Ding Yi
Hybrid Security Investment Fund (LOF)（中国银行 Ordinary
14,671,302 14,671,302
股份有限公司－景顺长城鼎益混合型证券投资 RMB Shares
基金）
Shanghai Keying Investment Management Office Ordinary
14,662,558 14,662,558
(L.P.) RMB Shares
Shanghai Jiekui Investment Management Firm Ordinary
14,493,900 14,493,900
(L.P.) RMB Shares
Ordinary
Chen Huxiong 13,609,300 13,609,300
RMB Shares
Ordinary
Chen Huwen 13,609,300 13,609,300
RMB Shares
China Construction Bank Corporation －Lombarda
China Senior Care Industry Mixed Securities Ordinary
13,408,237 13,408,237
Investment Fund (中国建设银行股份有限公司－ RMB Shares
中欧养老产业混合型证券投资基金)
Ordinary
Kuwait Investment Authority－Own Capital 9,534,553 9,534,553
RMB Shares
Special repurchase account of the top ten
Not applicable
shareholders
Explanation on the above-mentioned shareholders'
entrusting voting rights, accepting voting rights Not applicable
entrusted and waiver of voting rights
There is related relationship among the shareholders—M&G Group, Keying Investment,
Jiekui Investment, Chen Huwen, and Chen Huxiong. Chen Huwen and Chen Huxiong are
Explanation on the related relationship or parties
parties acting in concert. Save as the above, the Company is not aware of any related
acting in concert among the above shareholders
relationship or parties acting in concert as set out in Measures for the Administration of the
Takeover of Listed Companies among the aforesaid shareholders.
Explanation on the preference shareholders with
Not applicable
voting rights restored and their shareholdings
Top ten shareholders involved in refinancing shares lending
□ Applicable √ Not applicable
Changes in the top ten shareholders compared with the prior period
√ Applicable □ Not applicable
Unit: share
Changes in the top ten shareholders compared with the end of the prior period
Newly added Shares in the common account and credit
Shares lent in refinancing and not yet
to/exiting from account plus shares lent in refinancing and
the top ten returned at the period-end
Full name of shareholder not yet returned at the period-end
shareholders in
the Reporting As % of total share As % of total share
Period Total shares Total shares
capital capital
China Construction Bank
Corporation －Lombarda China
Senior Care Industry Mixed
Securities Investment Fund (中 Newly added 0 0 13,408,237 1.45
国建设银行股份有限公司－中
欧养老产业混合型证券投资基
金)
Kuwait Investment Authority－
Newly added 0 0 9,534,553 1.03
Own Capital
Aberdeen Standard Investments
(Asia) Limited - Aberdeen Exiting 0 0 8,685,369 0.94
Standard - China A Share Fund
Chen Xueling Exiting 0 0 8,100,000 0.87
Shareholdings of the top ten shareholders subject to trading moratorium and the condition of trading
moratorium
√ Applicable □ Not applicable
Unit: share
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Annual Report 2023
Available-for-listing-and-trading
conditions of shares held subject
to selling restriction
Number of shares
Name of shareholder subject to selling Number of Selling
No. held subject to selling
restrictions Available-for-l new restrictions
restrictions
isting-and-tradi available-for-li
ng time sting-and-tradi
ng shares
Equity
incentive
1 Incentive objects of restricted shares in 2020 2,768,150
selling
restrictions
Explanation on the related relationship or parties acting
Not applicable
in concert among the above shareholders
Note: The restricted stocks granted by the equity incentive plan implemented in 2020 must be
unlocked in batches in accordance with the Company's 2020 Restricted Share Incentive Plan.
(III) Strategic investors or general legal persons becoming the top ten shareholders because of
placing of new shares
□ Applicable √ Not applicable
IV. Controlling Shareholder and Beneficial Controllers
(I) Controlling shareholder
1 Legal person
√ Applicable □ Not applicable
Name M&G Holdings (Group) Co., Ltd.
Person in charge of the Company or legal
Chen Huxiong
representative
Establishment date 2007-5-10
Industrial investment, infrastructure investment, consultation for
investment information (except broker), consultation for enterprise
Main operation businesses management and relevant businesses, domestic trade (excluding projects
with national special approval) (For the above items subject to licensing or
permit, relevant approval must be obtained prior to operation)
Equity interests of other domestic and
overseas listed companies controlled or No
invested during the Reporting Period
Other explanations No
2 Natural person
□ Applicable √ Not applicable
3 Special explanation on the Company not having controlling shareholders
□ Applicable √ Not applicable
4 Explanation of the change in controlling shareholders during the Reporting Period
□ Applicable √ Not applicable
5 Diagram of the ownership and controlling relationship between the Company and its
controlling shareholders
√ Applicable □ Not applicable
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Annual Report 2023
M&G Group
57.85%
M&G Stationery
(II) Beneficial controllers
1 Legal person
□ Applicable √ Not applicable
2 Natural person
√ Applicable □ Not applicable
Name Chen Huwen
Nationality China
Acquire right of residence in other countries
No
or regions or not
Chairman of the Board of Shanghai M&G Stationery
Main job and title
Inc.
Shareholdings in other domestic or overseas
No
listed companies over the past 10 years
Name Chen Huxiong
Nationality China
Acquire right of residence in other countries
Yes
or regions or not
Vice-chairman of the Board and CEO of Shanghai
Main job and title
M&G Stationery Inc.
Shareholdings in other domestic or overseas
No
listed companies over the past 10 years
Name Chen Xueling
Nationality China
Acquire right of residence in other countries
No
or regions or not
Chairman of the Board and vice president of Shanghai
Main job and title
M&G Stationery Inc.
Shareholdings in other domestic or overseas
No
listed companies over the past 10 years
3 Special explanation on the Company not having beneficial controllers
□ Applicable √ Not applicable
4 Explanation of the change of the Company's control during the Reporting Period
□ Applicable √ Not applicable
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Annual Report 2023
5 Diagram of the ownership and controlling relationship between the Company and its
beneficial controllers
√ Applicable □ Not applicable
Chen Chen Chen
Xueling Huwen Huxiong
M&G Keying Jiekui
Group Investment Investment
57.85% 1.58% 1.56%
M&G
Stationery
6 Control of the Company by beneficial controllers by way of trust or other means of asset
management
□ Applicable √ Not applicable
(III) Other explanation regarding the controlling shareholders and the beneficial controllers
□ Applicable √ Not applicable
V. The Total Shares Pledged by the Controlling Shareholder or the First Majority Shareholder and
the Person Acting in Concert Account for More Than 80% of the Company’s Shares Held by
Them
□ Applicable √ Not applicable
VI. Other Legal Person Shareholders with More Than 10% Shareholdings
□ Applicable √ Not applicable
VII. Explanation on Limitation on Reduction of Shareholding
□ Applicable √ Not applicable
VIII. Implementation of Share Repurchase during the Reporting Period
√ Applicable □ Not applicable
Unit: 00’000’000 Currency: RMB
Plan for Share Repurchase through the Stock
Name of the share repurchase plan
Exchange
Date of the disclosure of the share repurchase plan 29 October 2022
Number of shares to be repurchased and that as %
0.25-0.50
of the total share capital
Amount to be used for the share repurchase 1.5-3.0
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Annual Report 2023
Within 6 months starting from the date of the
Planned repurchase period share repurchase plan’s approval at the 18th
meeting of the 5th session of Board of Directors
To be used as equity incentives or in employee
Purpose of the repurchased shares
stock ownership plans
Number of shares that have been repurchased 657,975
Number of shares that have been repurchased as %
of the total underlying shares of the equity incentive
plan (if any)
Progress on reduction of repurchased shares through
Not applicable
the stock exchange
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Annual Report 2023
Section VIII Preferred Shares
□ Applicable √ Not applicable
76 / 224
Annual Report 2023
Section IX Bonds
I. Enterprise Bonds, Corporate Bonds and Non-financial Enterprise Debt Financing Instruments
□ Applicable √ Not applicable
II. Convertible Corporate Bonds
□ Applicable √ Not applicable
77 / 224
Annual Report 2023
Section X Financial Report
I. Auditor’s Report
√ Applicable □ Not applicable
Xin Kuai Shi Bao Zi [2024] No. ZA10382
To the shareholders of Shanghai M&G Stationery Inc.:
I. Audits' Opinion
We have audited the accompanying financial statements of Shanghai M&G Stationery Inc.
(hereinafter referred to as "M&G"), which comprise the consolidated and parent company's balance
sheets as at 31 December 2023, the consolidated and parent company's income statements, the
consolidated and parent company's cash flow statements, and the consolidated and parent company's
statements of changes in shareholders' equity for the year of 2023, as well as notes to financial
statements.
In our opinion, the accompanying financial statements were prepared in accordance with the
Accounting Standards for Business Enterprises in all material aspects and give a true and fair view of the
consolidated and parent company's financial position of M&G as at 31 December 2023 and of its
consolidated and parent company's operating results and cash flows for the year of 2023.
II. Basis of Auditors' Opinion
We have conducted our audit in accordance with the Chinese Auditing Standards for Certified
Public Accountants. The "Responsibilities of Certified Public Accountants for Auditing of Financial
Statements" in the auditor's report further illustrate our responsibilities under those standards. In
accordance with the Code of Professional Ethics of Chinese Certified Public Accountants, we are
independent of M&G and have performed other responsibilities in respect of professional ethics. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
III. Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial statements for the current period. These matters were addressed in the context
of our audit of the financial statements as a whole and, in forming our opinion thereon, we do not
provide a separate opinion on these matters.
The key audit matters identified in our audit are summarized as follows:
Key audit matters How our audit addressed the key audit matter
(I) Recognition of the revenue
Please refer to notes to financial statements for 1. We understood and evaluated design of the key internal
accounting policies set out in "III Significant control designed by management and we tested the
Accounting Policies and Accounting Estimates" effectiveness of implementing key controls;
(XXV) and "V Notes to Consolidated Financial 2. We inspected customer contracts, on a sample basis, to
Statements" (XXXXI). identify terms and conditions related to the transfer of control
M&G mainly specializes in selling stationery and over the goods, and assessed the timing of revenue
office supplies. recognition with reference to the requirements of prevailing
In 2023, M&G's revenue from principal business accounting standards;
in sales recognition amounted to RMB23,302.6559 3. We selected samples for revenue transactions recorded
million. during the current year, with invoices, sales contracts, goods
M&G recognized revenue based on the expected delivery notes or transport documents to assess whether the
amount of consideration that it is entitled to related revenue was recognized in accordance with M&G's
78 / 224
Annual Report 2023
receive when the customer obtains control of the revenue recognition accounting policies;
relevant products or services. 4. We performed analytical procedures on revenue and cost,
Since revenue is one of the key performance including analysis of revenue, cost, gross profit margin
indicators of M&G, there is possibly inherent risk fluctuations in each month of the current period, and
of inappropriately recognizing revenue to reach performed analysis on sales model to observe whether there is
specific purpose in revenue recognition made any abnormal transaction;
based on the sales group of distributor; there is 5. We took samples from revenue transactions that took place
possibly potential risk of material misstatement in shortly before and after the balance sheet date, by checking
revenue recognition made based on the sales group delivery orders and other supportive documents to assess
of end customer because it involves many whether revenue was recognized in the correct accounting
transactions with small amount for each period.
transaction, so we recognized revenue recognition 6. We evaluated the accuracy and authenticity of the revenue
as a key audit matter. amount by implementing the letter verification procedure
based on the balances of accounts receivable from major
customers and checking goods return after the period.
(II) Anticipated credit loss of accounts receivable
Please refer to notes to financial statements for
accounting policies set out in "III Significant 1. We understood and evaluated design of the key internal
Accounting Policies and Accounting Estimates" control regarding impairment of financial assets (including
(X) and "V Notes to Consolidated Financial accounts receivable) designed by management and we tested
Statements" (IV). the effectiveness of implementing key controls;
As at 31 December 2023, balance of accounts 2. We evaluated rationality of the estimation on anticipated
receivable amounted to RMB3,656.5116 million, credit loss of accounts receivable, including judgment of
and provision made for credit impairment loss of forward-looking information; basis of estimation on
accounts receivable amounted to RMB69.0418 anticipated credit loss made on a single item, and basis of
million. estimation on anticipated credit loss made on portfolio,
M&G measured provision for loss of accounts including rationality of the division for portfolio;
receivable in accordance with amount of 3. We reviewed credit risk assessment performed by the
anticipated credit loss in the entire lifetime. The management on internal and external environment of M&G's
anticipated credit loss requires the management to operation, integrity of different customers, repayment history,
take into consideration of forward-looking repayment capacity, and historical experience in credit loss;
information apart from combining historical 4. We recalculated to check whether measurement of
experience and current situations, involving lots of provision for loss made by the management on single and
estimation and judgment, so we recognized portfolio accounts receivable is consistent with the amount of
anticipated credit loss of accounts receivable as a anticipated credit loss in the entire existing period.
key audit matter.
IV. Other Information
The management of M&G (hereinafter referred to as the "management") is responsible for the other
information which comprises all the information covered in M&G 2023 Annual Report other than the
financial statements and this auditor's report.
Our audit opinion on the financial statements does not cover the other information and we do not
express any form of assurance conclusion thereon.
In conjunction with our audit to the financial statements, our responsibility is to read the other
information. During the process, we considered whether there is material inconsistency or there is likely
material misstatement between the other information and the financial statements or the information we
obtained during the audit.
As we have performed the work on the other information obtained before the date of our auditor's
report, we shall report if we confirmed there was a material misstatement among the other information.
We have nothing needed to be reported on this case.
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Annual Report 2023
V. Responsibilities of the Management and Governing Bodies for the Financial Statements
The management shall be responsible for the preparation of financial statements in accordance with
the Accounting Standards for Business Enterprises to enable them to be fairly reflected, and to design,
implement and maintain the necessary internal controls so that there is no material misstatement due to
fraud or error in the financial statements.
In the preparation of the financial statements, the management is responsible for assessing M&G's
continuous operating capacity, disclosing matters relating to continuous operations (if applicable), and
applying the continuing operating assumptions unless the management plans to perform liquidation,
cease operation or otherwise has no realistic choice.
The governing bodies are responsible for overseeing the financial reporting process of M&G.
VI. Responsibilities of CPA for the Audit of the Financial Statements
Our objective is to obtain reasonable assurance of the financial statements as a whole whether there
is a material misstatement due to fraud or error and to issue an auditor's report containing audit opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with China Standards on Auditing will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of these financial statements.
As part of an audit in accordance with the auditing standards, we exercised professional judgment
and maintained professional skepticism throughout the audit. We also performed the following works:
(1) to identify and assess the risks of material misstatement of the financial statements, whether due
to fraud or error; design and perform audit procedures responsive to those risks; and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
(2) to understand the internal control related to the audit to design the appropriate audit procedures.
(3)to evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the management.
(4) to draw a conclusion on the appropriateness of the management's use of the going concern basis
of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the ability of M&G to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in our
auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate,
to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditor's report. However, future events or conditions may cause M&G to cease to continue as a going
concern.
(5) to evaluate the overall presentation, structure and content (including disclosure) of the financial
statements, and to assess whether the financial statements reflect the related transactions and events
fairly.
(6) to obtain sufficient and appropriate audit evidence of the financial information of the entity or
business activity of the M&G in order to express an opinion on the consolidated financial statements.
We are responsible for directing, supervising and performing group audits. We take full responsibility
for the audit opinion.
We communicated with the governing bodies regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies in internal
control that we identify during the audit.
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We also provided a statement to management on compliance with ethical requirements related to
independence, and communicated with governing bodies about all relationships and other matters that
may be reasonably considered to affect our independence, as well as related precautions.
From the matters we had discussed with the governing bodies, we confirmed which matters were
most important to the audit of the financial statements for the current period and thus constituted the key
audit matters. We set out these matters in the auditor's report. Unless the disclosure of these matters are
forbidden by the laws and regulations, or, in rare cases, if it is reasonably expected that the negative
impacts caused by discussing certain matters in the auditor's report would be larger than the benefits for
public interest, we shall not disclose the matters in the auditor's report under such circumstances.
BDO China Shu Lun Pan CPAs Chinese Certified Public Accountant: Chen Luying
(LLP) (Engagement Partner)
Chinese Certified Public Accountant: Fang Ning
Shanghai China 28 March 2024
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Annual Report 2023
II. Financial Statements
Consolidated Balance Sheet
31 December 2023
Prepared by: Shanghai M&G Stationery Inc.
Unit: Yuan Currency: RMB
Item Notes 31 December 2023 31 December 2022
Current assets:
Cash and equivalents VII. 1 5,239,121,517.08 3,363,089,177.24
Transaction settlement funds
Lending funds
Held-for-trading financial assets VII. 2 1,402,518,595.12 1,627,645,879.64
Derivative financial assets
Bills receivable VII. 4 38,196,088.94 37,460,749.20
Accounts receivable VII. 5 3,587,469,805.30 2,956,650,584.96
Receivables financing VII. 7 39,533,283.51 21,664,621.88
Prepayment VII. 8 72,862,234.83 83,452,245.56
Premium receivable
Reinsurance premium receivable
Reserves for reinsurance contract
receivable
Other receivables VII. 9 226,419,933.52 208,957,374.58
Including: Interest receivable
Dividend receivable
Financial assets purchased under
agreements to resell
Inventories VII. 10 1,578,089,411.98 1,625,162,456.68
Contract assets
Held for sale assets
Non-current assets due within one
VII. 12 1,360,640.55 1,360,640.55
year
Other current assets VII. 13 90,964,160.29 72,438,325.58
Total current assets 12,276,535,671.12 9,997,882,055.87
Non-current assets:
Loans and advances to customers
Debt investment
Other debt investment
Long-term receivables
Long-term equity investments VII. 17 37,232,112.47 39,726,537.12
Investments in other equity
VII. 18 9,175,073.42 8,411,887.95
instruments
Other non-current financial assets
Investment real estate
Fixed assets VII. 21 1,634,646,959.11 1,744,358,557.28
Construction in progress VII. 22 95,391,194.19 71,901,168.18
Productive biological assets
Oil and gas assets
Right-of-use assets VII. 25 400,835,370.95 335,796,074.68
Intangible assets VII. 26 447,302,419.37 417,768,644.64
Development expenses
Goodwill VII. 27 63,529,740.20 63,529,740.20
Long-term prepaid expenses VII. 28 114,101,678.30 120,284,544.92
Deferred income tax assets VII. 29 223,009,489.32 215,879,357.26
Other non-current assets VII. 30 12,202,603.55 7,054,811.39
Total non-current assets 3,037,426,640.88 3,024,711,323.62
Total assets 15,313,962,312.00 13,022,593,379.49
Current liabilities:
Short-term borrowings VII. 32 190,174,166.67 189,350,225.65
Borrowings from central bank
Placements from banks and other
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Annual Report 2023
financial institutions
Held-for-trading financial
liabilities
Derivative financial liabilities VII. 34 1,357,106.71 881,465.28
Bills payable
Accounts payable VII. 36 4,854,339,509.13 3,998,633,387.71
Accounts received in advance
Contract liabilities VII. 38 106,038,218.29 81,745,797.60
Financial assets sold under
repurchase agreements
Deposits from customers and other
banks
Brokerage for trading securities
Brokerage for underwriting
securities
Employee benefits payable VII. 39 196,177,758.05 181,863,963.94
Taxes payable VII. 40 312,264,527.42 198,479,439.43
Other payables VII. 41 537,102,511.17 492,874,360.46
Including: Interest payable
Dividend payable
Fees and commissions payable
Reinsured accounts payable
Held-for-sale liabilities
Non-current liabilities due within
VII. 43 222,168,448.30 190,502,470.68
one year
Other current liabilities VII. 44 114,591,240.07 79,340,113.68
Total current liabilities 6,534,213,485.81 5,413,671,224.43
Non-current liabilities:
Reserves for insurance contracts
Long-term borrowings VII. 45 30,027,500.01
Bonds payable
Including: Preference shares
Perpetual bonds
Lease liabilities VII. 47 198,614,205.74 144,951,146.72
Long-term payable
Long-term employee benefits
payable
Estimated liabilities VII. 50 14,922,058.45
Deferred income VII. 51 34,349,803.59 46,210,203.99
Deferred income tax liabilities VII. 29 165,592,520.47 150,660,684.23
Other non-current liabilities
Total non-current liabilities 428,584,029.81 356,744,093.39
Total liabilities 6,962,797,515.62 5,770,415,317.82
Owner's equity (or shareholders' equity):
Share capital VII. 53 926,596,570.00 926,933,050.00
Other equity instruments
Including: Preference shares
Perpetual bonds
Capital reserve VII. 55 373,093,781.49 427,940,233.12
Less: Treasury shares VII. 56 216,941,657.70 191,842,243.44
Other comprehensive income VII. 57 -945,577.17 -307,971.25
Special reserve
Surplus reserve VII. 59 464,201,654.91 464,201,654.91
General risk provision
Undistributed profit VII. 60 6,287,174,031.99 5,222,409,808.33
Total equity attributable to the
7,833,178,803.52 6,849,334,531.67
owners of the parent company
Minority equity 517,985,992.86 402,843,530.00
Total owners' equity (or
8,351,164,796.38 7,252,178,061.67
shareholders' equity)
Total liabilities and owner's
15,313,962,312.00 13,022,593,379.49
equity (or shareholders' equity)
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The chairman of the Company: Chen Huwen CFO of the Company: Tang Xianbao
Person in charge of Accounting Department: Zhai Yu
Parent Company's Balance Sheet
31 December 2023
Prepared by: Shanghai M&G Stationery Inc.
Unit: Yuan Currency: RMB
Item Notes 31 December 2023 31 December 2022
Current assets:
Cash and equivalents 2,810,505,828.98 1,855,707,174.82
Held-for-trading financial assets 1,098,679,879.15 1,326,556,840.76
Derivative financial assets
Bills receivable
Accounts receivable XIX. 1 218,745,403.54 167,299,219.56
Receivables financing
Prepayment 14,820,327.83 11,224,884.39
Other receivables XIX. 2 921,226,487.12 781,222,709.03
Including: Interest receivable
Dividend receivable
Inventories 407,860,444.17 438,133,785.64
Contract assets
Held for sale assets
Non-current assets due within one
1,360,640.55 1,360,640.55
year
Other current assets 160,219,377.77 156,495,400.96
Total current assets 5,633,418,389.11 4,738,000,655.71
Non-current assets:
Debt investment
Other debt investment
Long-term receivables
Long-term equity investments XIX. 3 1,643,810,516.06 1,579,882,367.34
Investments in other equity
9,175,073.42 8,411,887.95
instruments
Other non-current financial assets
Investment real estate
Fixed assets 1,312,651,259.59 1,406,922,226.18
Construction in progress 80,558,035.05 60,741,537.96
Productive biological assets
Oil and gas assets
Right-of-use assets 45,649,712.84 13,284,607.91
Intangible assets 167,005,889.18 168,644,888.50
Development expenses
Goodwill
Long-term prepaid expenses 35,648,356.38 49,798,955.29
Deferred income tax assets 11,745,589.36 15,690,882.38
Other non-current assets 3,281,493.90 3,908,784.84
Total non-current assets 3,309,525,925.78 3,307,286,138.35
Total assets 8,942,944,314.89 8,045,286,794.06
Current liabilities:
Short-term borrowings
Held-for-trading financial
liabilities
Derivative financial liabilities
Bills payable
Accounts payable 256,315,615.85 216,401,089.09
Accounts received in advance
Contract liabilities 38,565,610.35 28,395,398.24
Employee benefits payable 112,383,035.60 95,792,215.59
84 / 224
Annual Report 2023
Taxes payable 140,462,466.72 80,191,373.52
Other payables 1,444,091,922.61 1,157,206,059.07
Including: Interest payable
Dividend payable
Held-for-sale liabilities
Non-current liabilities due within
19,133,612.70 5,894,935.53
one year
Other current liabilities 4,534,103.70 3,347,508.96
Total current liabilities 2,015,486,367.53 1,587,228,580.00
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: Preference shares
Perpetual bonds
Lease liabilities 22,215,282.52 5,655,050.39
Long-term payable 252,000,000.00 252,000,000.00
Long-term employee benefits
payable
Estimated liabilities
Deferred income 24,881,079.81 25,253,594.01
Deferred income tax liabilities 12,285,699.82 6,698,000.50
Other non-current liabilities
Total non-current liabilities 311,382,062.15 289,606,644.90
Total liabilities 2,326,868,429.68 1,876,835,224.90
Owner's equity (or shareholders' equity):
Share capital 926,596,570.00 926,933,050.00
Other equity instruments
Including: Preference shares
Perpetual bonds
Capital reserve 558,113,091.00 616,012,396.67
Less: Treasury shares 216,941,657.70 191,842,243.44
Other comprehensive income 5,790,535.88 5,187,211.48
Special reserve
Surplus reserve 463,872,795.00 463,872,795.00
Undistributed profit 4,878,644,551.03 4,348,288,359.45
Total owners' equity (or
6,616,075,885.21 6,168,451,569.16
shareholders' equity)
Total liabilities and owner's
8,942,944,314.89 8,045,286,794.06
equity (or shareholders' equity)
The chairman of the Company: Chen Huwen CFO of the Company: Tang Xianbao
Person in charge of Accounting Department: Zhai Yu
Consolidated Income Statement
January - December 2023
Unit: Yuan Currency: RMB
Item Notes 2023 2022
I. Total revenue 23,351,304,328.03 19,996,315,623.32
Including: Revenue VII. 61 23,351,304,328.03 19,996,315,623.32
Interest income
Premium received
Handling fee and commission income
II. Total operating costs 21,534,011,700.75 18,494,426,971.33
Including: Operating cost VII. 61 18,946,902,789.11 16,124,239,558.86
Interest expenses
Handling fee and commission
expenses
Payment on surrenders
Net compensation expenses
Net provision drawn for insurance
85 / 224
Annual Report 2023
contract
Policy dividend expenses
Reinsurance expenses
Taxes and surcharges VII. 62 96,774,441.57 75,588,524.33
Selling expenses VII. 63 1,550,242,913.35 1,358,215,903.43
Administrative expenses VII. 64 817,243,965.61 794,196,566.05
R&D expenses VII. 65 177,525,143.59 183,553,643.90
Financial expenses VII. 66 -54,677,552.48 -41,367,225.24
Including: Interest expenses 24,995,988.63 14,760,179.42
Interest income 76,346,842.50 38,938,757.91
Add: Other gains VII. 67 96,557,027.08 85,981,142.12
Income from investment ("-" refers to
VII. 68 -3,932,454.66 275,500.09
loss)
Including: Investment income from
-6,197,315.17 -1,731,132.47
associates and joint ventures
Derecognition of income from
financial assets at amortized cost
Exchange gains ("-" refers to loss)
Net gain on exposure hedging ("-"
refers to loss)
Gain on change in fair value ("-"
VII. 70 27,190,625.42 31,843,788.96
refers to loss)
Losses on credit impairment ("-"
VII. 71 -21,830,178.85 7,200,691.02
refers to loss)
Losses on assets impairment ("-"
VII. 72 11,744,806.55 -18,667,188.79
refers to loss)
Gains from asset disposal ("-" refers
VII. 73 3,588,809.94 -31,622.53
to loss)
III. Operating profits ("-" refers to loss) 1,930,611,262.76 1,608,490,962.86
Add: Non-operating profits VII. 74 59,663,963.46 68,537,627.40
Less: Non-operating expenses VII. 75 10,802,453.44 12,132,136.15
IV. Total profits ("-" refers to total loss) 1,979,472,772.78 1,664,896,454.11
Less: Income tax expenses VII. 76 335,533,770.88 309,517,621.73
V. Net profits ("-" refers to net loss) 1,643,939,001.90 1,355,378,832.38
(I) Classified by operation continuity
1. Net profits from continuing activities
1,643,939,001.90 1,355,378,832.38
("-" refers to net loss)
2. Net profits from discontinuing
activities ("-" refers to net loss)
(II) Classified by ownership
1. Net profits attributable to
shareholders of the parent company ("-" 1,526,801,727.16 1,282,456,788.17
refers to net loss)
2. Profit or loss attributable to minority
117,137,274.74 72,922,044.21
shareholders ("-" refers to net loss)
VI. Net amount of other comprehensive
-812,726.67 -461,439.48
income after tax
(I) Net amount of other comprehensive
income after tax attributable to owners of the -637,605.92 -572,013.39
parent company
1. Other comprehensive income not to
648,707.65 1,416,512.94
be reclassified into profit or loss
(1) Change in re-measurement of defined
benefit plans
(2) Other comprehensive income that may
not be reclassified to profit or loss under
equity method
(3) Change in fair value of investments in
648,707.65 1,416,512.94
other equity instruments
(4) Change in fair value of enterprise's
own credit risk
2. Other comprehensive income to be
-1,286,313.57 -1,988,526.33
reclassified into profit or loss
(1) Other comprehensive income that may -45,383.25 -55,032.21
86 / 224
Annual Report 2023
be reclassified to profit or loss under equity
method
(2) Change in fair value of other debt
investments
(3) Amount included in other
comprehensive income on reclassification of
financial assets
(4) Credit impairment provisions of other
debt investments
(5) Cash flow hedging reserve 155,407.12 -1,231,612.34
(6) Exchange differences from translation
-1,396,337.44 -701,881.78
of financial statements
(7) Others
(II) Net amount of other comprehensive
income after tax attributable to minority -175,120.75 110,573.91
shareholders
VII. Total comprehensive income 1,643,126,275.23 1,354,917,392.90
(I) Total comprehensive income
1,526,164,121.24 1,281,884,774.78
attributable to owners of the parent company
(II) Total comprehensive income
116,962,153.99 73,032,618.12
attributable to minority shareholders
VIII. Earnings per share:
(I) Basic earnings per share (Yuan/share) 1.6577 1.3874
(II) Diluted earnings per share
1.6577 1.3874
(Yuan/share)
In case of business combination under common control, net profit realized by the combined before the
combination in the period was nil; net profit realized by the combined in the previous period was nil.
The chairman of the Company: Chen Huwen CFO of the Company: Tang Xianbao
Person in charge of Accounting Department: Zhai Yu
Income Statement of the Parent Company
January - December 2023
Unit: Yuan Currency: RMB
Item Notes 2023 2022
I. Revenue XIX. 4 4,172,771,481.68 3,933,024,934.46
Less: Operating cost XIX. 4 2,310,747,422.30 2,098,941,558.83
Taxes and surcharges 38,660,604.35 33,602,007.79
Selling expenses 271,931,282.04 232,058,903.83
Administrative expenses 423,189,963.28 487,836,035.59
R&D expenses 143,152,332.78 150,455,614.86
Financial expenses -69,111,348.72 -58,452,112.33
Including: Interest expenses 2,186,262.69 3,736,490.90
Interest income 62,635,566.35 48,906,629.71
Add: Other gains 7,653,397.73 12,791,665.26
Income from investment ("-" refers to
XIX. 5 4,391,935.55 610,779.67
loss)
Including: Investment income from
-1,275,439.03 -1,283,553.86
associates and joint ventures
Derecognition of income from
financial assets at amortized cost
Net gain on exposure hedging ("-"
refers to loss)
Gain on change in fair value ("-"
24,422,433.76 24,238,011.48
refers to loss)
Losses on credit impairment ("-"
1,152,223.14 -1,553,929.01
refers to loss)
Losses on assets impairment ("-"
1,810,119.96 -4,096,298.20
refers to loss)
Gains from asset disposal ("-" refers
1,515,065.96 569,278.29
to loss)
II. Operating profits ("-" refers to loss) 1,095,146,401.75 1,021,142,433.38
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Annual Report 2023
Add: Non-operating profits 56,350,575.24 53,039,286.31
Less: Non-operating expenses 2,390,650.65 4,712,088.11
III. Total profits ("-" refers to total loss) 1,149,106,326.34 1,069,469,631.58
Less: Income tax expenses 156,712,631.26 141,658,287.94
IV. Net profits ("-" refers to net loss) 992,393,695.08 927,811,343.64
(I) Net profits from continuing activities
992,393,695.08 927,811,343.64
("-" refers to net loss)
(II) Net profits from discontinuing
activities ("-" refers to net loss)
V. Net amount of other comprehensive
603,324.40 1,361,480.73
income after tax
(I) Other comprehensive income not to be
648,707.65 1,416,512.94
reclassified into profit or loss
1. Change in re-measurement of defined
benefit plans
2. Other comprehensive income that
may not be reclassified to profit or loss under
equity method
3. Change in fair value of investments in
648,707.65 1,416,512.94
other equity instruments
4. Change in fair value of enterprise's
own credit risk
(II) Other comprehensive income to be
-45,383.25 -55,032.21
reclassified into profit or loss
1. Other comprehensive income that
may be reclassified to profit or loss under -45,383.25 -55,032.21
equity method
2. Change in fair value of other debt
investments
3. Amount included in other
comprehensive income on reclassification of
financial assets
4. Credit impairment provisions of other
debt investments
5. Cash flow hedging reserve
6. Exchange differences from
translation of financial statements
7. Others
VI. Total comprehensive income 992,997,019.48 929,172,824.37
VII. Earnings per share:
(I) Basic earnings per share
(Yuan/share)
(II) Diluted earnings per share
(Yuan/share)
The chairman of the Company: Chen Huwen CFO of the Company: Tang Xianbao
Person in charge of Accounting Department: Zhai Yu
Consolidated Cash Flow Statement
January - December 2023
Unit: Yuan Currency: RMB
Item Notes 2023 2022
I. Cash flow from operating activities:
Cash received from sales of goods or
25,681,461,458.93 21,340,101,499.49
rendering of services
Net increase in customer and
interbank deposits
Net increase in borrowings from
central bank
Net increase in placements from
banks and other financial institutions
Cash received from premiums under
original insurance contract
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Annual Report 2023
Net cash received from reinsurance
business
Net increase in deposits of policy
holders and investments
Cash received from interest, fees and
commissions
Net increase in borrowings
Net increase in repurchase business
capital
Net cash received from securities
trading agency services
Tax rebates 22,563,944.69 20,549,280.25
Other cash received from operating
VII. 78 2,087,543,362.67 1,923,748,053.94
activities
Sub-total of cash inflows from
27,791,568,766.29 23,284,398,833.68
operating activities
Cash paid for goods and services 20,222,036,076.91 16,993,054,882.62
Net increase in customer loans and
advances
Net increase in deposits with PBOC
and interbank deposits
Cash paid for compensation
payments under original insurance
contract
Net increase in funds for lending
Cash paid for interests, handling
charges and commissions
Cash paid for policy dividends
Cash paid to and on behalf of
1,125,985,637.99 1,059,233,938.69
employees
Taxes and fees paid 888,950,487.89 1,018,359,606.33
Cash paid for other operating
VII. 78 2,937,995,946.41 2,861,966,578.96
activities
Sub-total of cash outflows from
25,174,968,149.20 21,932,615,006.60
operating activities
Net cash flow generated from
2,616,600,617.09 1,351,783,827.08
operating activities
II. Cash flow from investing activities:
Cash received from disposal of
3,301,251,726.23 2,000,000,000.00
investments
Cash received from returns on
30,231,597.67 11,907,562.97
investments
Net cash received from disposal of
fixed assets, intangible assets and other 4,235,188.00 937,920.34
long-term assets
Net cash received from disposal of
19,980,758.01
subsidiaries and other operating entities
Other cash received relating to
VII. 78 3,214,522.06
investing activities
Sub-total of cash inflows from
3,355,699,269.91 2,016,060,005.37
investing activities
Cash paid for purchase and
construction of fixed assets, intangible 208,425,441.63 162,552,354.04
assets and other long-term assets
Cash paid for investment 3,073,000,000.00 2,005,000,000.00
Net increase in pledged loans
Net cash paid for acquiring
44,158,049.52
subsidiaries and other operating entities
Other cash paid relating to investing
activities
Sub-total of cash outflows from
3,325,583,491.15 2,167,552,354.04
investing activities
Net cash flow generated from
30,115,778.76 -151,492,348.67
investing activities
III. Cash flow generated from financing activities:
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Annual Report 2023
Proceeds received from financing
1,500,000.00
activities
Including: Proceeds received by
subsidiaries from minority shareholders' 1,500,000.00
investment
Cash received from borrowings 281,955,762.18 355,693,735.65
Other cash received from
financing-related activities
Sub-total of cash inflows from
281,955,762.18 357,193,735.65
financing activities
Cash repayments of borrowings 251,129,987.83 343,130,117.46
Dividends paid, profit distributed or
469,820,485.84 563,214,251.05
interest paid
Including: Dividend and profit paid
by subsidiaries to minority shareholders
Other cash paid for financing-related
VII. 78 332,128,631.48 372,998,968.30
activities
Sub-total of cash outflows from
1,053,079,105.15 1,279,343,336.81
financing activities
Net cash flow from financing
-771,123,342.97 -922,149,601.16
activities
IV. Effects of exchange rate
fluctuations on cash and cash 4,472,840.91 10,392,751.10
equivalents
V. Net increase in cash and cash
1,880,065,893.79 288,534,628.35
equivalents
Add: Cash and cash equivalents at the
1,828,019,243.04 1,539,484,614.69
beginning of the period
VI. Cash and cash equivalents at the
3,708,085,136.83 1,828,019,243.04
end of the period
The chairman of the Company: Chen Huwen CFO of the Company: Tang Xianbao
Person in charge of Accounting Department: Zhai Yu
Cash Flow Statement of the Parent Company
January - December 2023
Unit: Yuan Currency: RMB
Item Notes 2023 2022
I. Cash flow from operating activities:
Cash received from sales of goods or
4,441,324,613.84 4,268,406,963.86
rendering of services
Tax rebates 1,321,673.23
Other cash received from operating
1,489,601,241.95 1,151,255,589.19
activities
Sub-total of cash inflows from
5,930,925,855.79 5,420,984,226.28
operating activities
Cash paid for goods and services 2,362,608,779.17 2,211,589,298.25
Cash paid to and on behalf of
543,052,695.19 530,587,450.71
employees
Taxes and fees paid 319,990,692.12 419,366,244.01
Cash paid for other operating
1,275,677,186.75 1,486,214,809.44
activities
Sub-total of cash outflows from
4,501,329,353.23 4,647,757,802.41
operating activities
Net cash flow generated from
1,429,596,502.56 773,226,423.87
operating activities
II. Cash flow from investing activities:
Cash received from disposal of
3,300,000,000.00 1,800,000,000.00
investments
Cash received from returns on
25,966,769.95 8,036,532.48
investments
Net cash received from disposal of
2,657,117.43 6,696,003.94
fixed assets, intangible assets and other
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Annual Report 2023
long-term assets
Net cash received from disposal of
subsidiaries and other operating entities
Other cash received relating to
1,951,654.45
investing activities
Sub-total of cash inflows from
3,328,623,887.38 1,816,684,190.87
investing activities
Cash paid for purchase and
construction of fixed assets, intangible 120,641,964.87 88,125,567.05
assets and other long-term assets
Cash paid for investment 3,093,000,000.00 1,740,000,000.00
Net cash paid for acquiring
47,547,771.00
subsidiaries and other operating entities
Other cash paid relating to investing
activities
Sub-total of cash outflows from
3,261,189,735.87 1,828,125,567.05
investing activities
Net cash flow generated from
67,434,151.51 -11,441,376.18
investing activities
III. Cash flow generated from financing activities:
Proceeds received from financing
activities
Cash received from borrowings
Other cash received from
financing-related activities
Sub-total of cash inflows from
financing activities
Cash repayments of borrowings
Dividends paid, profit distributed or
464,614,476.85 556,647,354.00
interest paid
Other cash paid for financing-related
72,922,497.88 145,913,502.15
activities
Sub-total of cash outflows from
537,536,974.73 702,560,856.15
financing activities
Net cash flow from financing
-537,536,974.73 -702,560,856.15
activities
IV. Effects of exchange rate
fluctuations on cash and cash 4,693,544.62 9,361,830.08
equivalents
V. Net increase in cash and cash
964,187,223.96 68,586,021.62
equivalents
Add: Cash and cash equivalents at the
852,461,455.25 783,875,433.63
beginning of the period
VI. Cash and cash equivalents at the
1,816,648,679.21 852,461,455.25
end of the period
The chairman of the Company: Chen Huwen CFO of the Company: Tang Xianbao
Person in charge of Accounting Department: Zhai Yu
91 / 224
Annual Report 2023
Consolidated Statements of Changes in Owners' Equity
January - December 2023
Unit: Yuan Currency: RMB
2023
Equity attributable to owners of the parent company
Item Total equity
Minority equity
Other equity instruments Other General attributable to owners
Paid-up capital (or Less: Treasury Special
Capital reserve comprehensive Surplus reserve risk Undistributed profit Others Subtotal
Preference Perpetual
share capital) shares reserve
Others income provision
shares bonds
I. Balance at the end of last
926,933,050.00 427,940,233.12 191,842,243.44 -307,971.25 464,201,654.91 5,222,409,808.33 6,849,334,531.67 402,843,530.00 7,252,178,061.67
year
Add: Changes in
accounting policies
Correction for
previous errors
Others
II. Balance at the beginning
926,933,050.00 427,940,233.12 191,842,243.44 -307,971.25 464,201,654.91 5,222,409,808.33 6,849,334,531.67 402,843,530.00 7,252,178,061.67
of the year
III. Increase and decrease
for the period ("-" for -336,480.00 -54,846,451.63 25,099,414.26 -637,605.92 1,064,764,223.66 983,844,271.85 115,142,462.86 1,098,986,734.71
decrease)
(I) Total comprehensive
-637,605.92 1,526,801,727.16 1,526,164,121.24 116,962,153.99 1,643,126,275.23
income
(II) Owner's contribution
-336,480.00 -54,846,451.63 25,099,414.26 -80,282,345.89 -1,819,691.13 -82,102,037.02
and capital reduction
1. Ordinary shares
-336,480.00 -9,237,846.00 25,099,414.26 -34,673,740.26 -34,673,740.26
contributed by the owners
2. Capital contributions by
other equity instrument
holders
3. Amount of share-based
payments credited to -42,193,526.85 -42,193,526.85 -42,193,526.85
owners' equity
4. Others -3,415,078.78 -3,415,078.78 -1,819,691.13 -5,234,769.91
(III) Profit distribution -462,037,503.50 -462,037,503.50 -462,037,503.50
1. Withdrawal of surplus
reserve
2. Withdrawal of general
risk provision
3. Distribution to owners
-462,037,503.50 -462,037,503.50 -462,037,503.50
(or shareholders)
4. Others
(IV) Internal carry-forward
of owners' equity
1. Transfer of capital
reserve to capital (or share
capital)
2. Transfer of surplus
reserve to capital (or share
capital)
3. Surplus reserve to cover
loss
92 / 224
Annual Report 2023
4. Changes in defined
benefit scheme carried
forward to retained
earnings
5. Carry-forward of other
comprehensive income to
retained earnings
6. Others
(V) Special reserve
1. Withdrawal for the
period
2. Utilization for the period
(VI) Others
IV. Balance at the end of
926,596,570.00 373,093,781.49 216,941,657.70 -945,577.17 464,201,654.91 6,287,174,031.99 7,833,178,803.52 517,985,992.86 8,351,164,796.38
the period
2022
Equity attributable to owners of the parent company
Item Total equity
Other General Minority equity
Other equity instruments attributable to owners
Paid-up capital (or Less: Treasury Special
Capital reserve comprehensive Surplus reserve risk Undistributed profit Others Subtotal
share capital) Preference Perpetual shares reserve
Others
shares bonds income provision
I. Balance at the end of last
927,745,590.00 454,186,790.79 148,106,474.00 264,042.14 464,201,654.91 4,496,600,374.16 6,194,891,978.00 328,399,213.56 6,523,291,191.56
year
Add: Changes in
accounting policies
Correction for
previous errors
Others
II. Balance at the beginning
927,745,590.00 454,186,790.79 148,106,474.00 264,042.14 464,201,654.91 4,496,600,374.16 6,194,891,978.00 328,399,213.56 6,523,291,191.56
of the year
III. Increase and decrease
for the period ("-" for -812,540.00 -26,246,557.67 43,735,769.44 -572,013.39 725,809,434.17 654,442,553.67 74,444,316.44 728,886,870.11
decrease)
(I) Total comprehensive
-572,013.39 1,282,456,788.17 1,281,884,774.78 73,032,618.12 1,354,917,392.90
income
(II) Owner's contribution
-812,540.00 -26,246,557.67 43,735,769.44 -70,794,867.11 1,411,698.32 -69,383,168.79
and capital reduction
1. Ordinary shares
-812,540.00 -20,649,630.21 43,735,769.44 -65,197,939.65 1,500,000.00 -63,697,939.65
contributed by the owners
2. Capital contributions by
other equity instrument
holders
3. Amount of share-based
payments credited to 2,002,637.09 2,002,637.09 2,002,637.09
owners' equity
4. Others -7,599,564.55 -7,599,564.55 -88,301.68 -7,687,866.23
(III) Profit distribution -556,647,354.00 -556,647,354.00 -556,647,354.00
1. Withdrawal of surplus
reserve
2. Withdrawal of general
risk provision
3. Distribution to owners
-556,647,354.00 -556,647,354.00 -556,647,354.00
(or shareholders)
93 / 224
Annual Report 2023
4. Others
(IV) Internal carry-forward
of owners' equity
1. Transfer of capital
reserve to capital (or share
capital)
2. Transfer of surplus
reserve to capital (or share
capital)
3. Surplus reserve to cover
loss
4. Changes in defined
benefit scheme carried
forward to retained
earnings
5. Carry-forward of other
comprehensive income to
retained earnings
6. Others
(V) Special reserve
1. Withdrawal for the
period
2. Utilization for the period
(VI) Others
IV. Balance at the end of
926,933,050.00 427,940,233.12 191,842,243.44 -307,971.25 464,201,654.91 5,222,409,808.33 6,849,334,531.67 402,843,530.00 7,252,178,061.67
the period
The chairman of the Company: Chen Huwen CFO of the Company: Tang Xianbao Person in charge of Accounting Department: Zhai Yu
Parent Company's Statement of Changes in Owners' Equity
January - December 2023
Unit: Yuan Currency: RMB
2023
Other equity instruments
Item Paid-up capital (or Less: Treasury Other comprehensive Special Undistributed Total equity attributable
Capital reserve Surplus reserve
share capital) Preference Perpetual shares income reserve profit to owners
Others
shares bonds
I. Balance at the end of last year 926,933,050.00 616,012,396.67 191,842,243.44 5,187,211.48 463,872,795.00 4,348,288,359.45 6,168,451,569.16
Add: Changes in accounting policies
Correction for previous errors
Others
II. Balance at the beginning of the year 926,933,050.00 616,012,396.67 191,842,243.44 5,187,211.48 463,872,795.00 4,348,288,359.45 6,168,451,569.16
III. Increase and decrease for the period ("-" for decrease) -336,480.00 -57,899,305.67 25,099,414.26 603,324.40 530,356,191.58 447,624,316.05
(I) Total comprehensive income 603,324.40 992,393,695.08 992,997,019.48
(II) Owner's contribution and capital reduction -336,480.00 -57,899,305.67 25,099,414.26 -83,335,199.93
1. Ordinary shares contributed by the owners -336,480.00 -9,237,846.00 25,099,414.26 -34,673,740.26
2. Capital contributions by other equity instrument
holders
3. Amount of share-based payments credited to owners'
-42,193,526.85 -42,193,526.85
equity
4. Others -6,467,932.82 -6,467,932.82
(III) Profit distribution -462,037,503.50 -462,037,503.50
1. Withdrawal of surplus reserve
94 / 224
Annual Report 2023
2. Distribution to owners (or shareholders) -462,037,503.50 -462,037,503.50
3. Others
(IV) Internal carry-forward of owners' equity
1. Transfer of capital reserve to capital (or share capital)
2. Transfer of surplus reserve to capital (or share capital)
3. Surplus reserve to cover loss
4. Changes in defined benefit scheme carried forward to
retained earnings
5. Carry-forward of other comprehensive income to
retained earnings
6. Others
(V) Special reserve
1. Withdrawal for the period
2. Utilization for the period
(VI) Others
IV. Balance at the end of the period 926,596,570.00 558,113,091.00 216,941,657.70 5,790,535.88 463,872,795.00 4,878,644,551.03 6,616,075,885.21
2022
Other equity instruments
Item Paid-up capital (or Less: Treasury Other comprehensive Special Undistributed Total equity attributable
Capital reserve Surplus reserve
share capital) Preference Perpetual shares income reserve profit to owners
Others
shares bonds
I. Balance at the end of last year 927,745,590.00 638,242,426.13 148,106,474.00 3,825,730.75 463,872,795.00 3,977,124,369.81 5,862,704,437.69
Add: Changes in accounting policies
Correction for previous errors
Others
II. Balance at the beginning of the year 927,745,590.00 638,242,426.13 148,106,474.00 3,825,730.75 463,872,795.00 3,977,124,369.81 5,862,704,437.69
III. Increase and decrease for the period ("-" for decrease) -812,540.00 -22,230,029.46 43,735,769.44 1,361,480.73 371,163,989.64 305,747,131.47
(I) Total comprehensive income 1,361,480.73 927,811,343.64 929,172,824.37
(II) Owner's contribution and capital reduction -812,540.00 -22,230,029.46 43,735,769.44 -66,778,338.90
1. Ordinary shares contributed by the owners -812,540.00 -20,649,630.21 43,735,769.44 -65,197,939.65
2. Capital contributions by other equity instrument
holders
3. Amount of share-based payments credited to owners'
2,002,637.09 2,002,637.09
equity
4. Others -3,583,036.34 -3,583,036.34
(III) Profit distribution -556,647,354.00 -556,647,354.00
1. Withdrawal of surplus reserve
2. Distribution to owners (or shareholders) -556,647,354.00 -556,647,354.00
3. Others
(IV) Internal carry-forward of owners' equity
1. Transfer of capital reserve to capital (or share capital)
2. Transfer of surplus reserve to capital (or share capital)
3. Surplus reserve to cover loss
4. Changes in defined benefit scheme carried forward to
retained earnings
5. Carry-forward of other comprehensive income to
retained earnings
6. Others
(V) Special reserve
1. Withdrawal for the period
2. Utilization for the period
(VI) Others
IV. Balance at the end of the period 926,933,050.00 616,012,396.67 191,842,243.44 5,187,211.48 463,872,795.00 4,348,288,359.45 6,168,451,569.16
The chairman of the Company: Chen Huwen CFO of the Company: Tang Xianbao Person in charge of Accounting Department: Zhai Yu
95 / 224
Annual Report 2023
III. General Information about the Company
1. Company profile
√ Applicable □ Not applicable
Shanghai M&G Stationery Inc. (hereinafter referred to as "Company" or the "Company") is a
limited company that was approved by the Approval for the Initial Public Offering of Shanghai M&G
Stationery Inc. in [2015] No. 15 securities regulatory license of China Securities Regulatory
Commission in January 2015. The Company's business license No.: 91310000677833266F. In January
2015, the Company was listed on Shanghai Stock Exchange. The industry where the Company operates
is manufacturing industry in products for stationery, arts, sports and entertainment.
As of 31 December 2023, the Company issued a total of 926,596,570 shares accumulatively,
including 2,768,150 restricted shares, and its registered capital amounted to RMB926,596,570. The
registered address of the Company is Building 3, No. 3469 Jinqian Road, Fengxian District, Shanghai.
The principal operations of the Company include the design, development, manufacturing and marketing
of writing instruments, student stationery, office supplies and other products, the direct office supplies
business and the new retail business.
The parent company of the Company is M&G Holdings (Group) Co., Ltd., and the beneficial
controllers are Chen Huwen, Chen Huxiong, and Chen Xueling.
The financial statements were approved for submission by the Board of Directors on 28 March
2024.
IV. Preparation Basis of Financial Statements
1. Preparation basis
The Company prepared financial statements in accordance with the Accounting Standards for
Business Enterprises - Basic Standards, and various specific account standards, application guidance for
accounting standards for business enterprises, interpretations of the accounting standards for business
enterprises and other relevant regulations (hereinafter collectively referred to as "Accounting Standards
for Business Enterprises") promulgated by the Ministry of Finance, and the disclosure requirements in
the Preparation Convention of Information Disclosure by Companies Offering Securities to the Public
No.15 - General Provisions on Financial Report issued by China Securities Regulatory Commission.
2. Going concern
√ Applicable □ Not applicable
These financial statements have been prepared on a going concern basis.
V. Significant Accounting Policies and Accounting Estimates
Notes to specific accounting policies and accounting estimates:
√ Applicable □ Not applicable
The following disclosures cover the specific accounting policies and accounting estimates
formulated by the Company according to the characteristics of its production and operation. For details,
please refer to Notes "V (11) Financial Instruments", "V (21) Fixed Assets", "V (26) Intangible Assets",
"V (28) Long-term Deferred Expenses", "V (34) Income", and "V (36) Government Subsidies".
1. Statement of compliance of accounting standards for business enterprises
The financial statements are in compliance with the Accounting Standards for Business Enterprises
promulgated by the Ministry of Finance, and truly and completely present the consolidated and parent
company's financial position of the Company as at 31 December 2023, as well as the consolidated and
parent company's operating results and cash flows for the year then ended.
2. Accounting period
The accounting period of the Company is from 1 January to 31 December of each calendar year.
3. Operating cycle
√ Applicable □ Not applicable
Notes to financial statements Page 96
Annual Report 2023
The Company's operating cycle is 12 months.
4. Reporting currency
RMB is adopted by the Company as the bookkeeping currency. Each subsidiary of the Company
determines its own reporting currency based on the primary economic environment where it runs
business. The reporting currency of Back to School Holding AS and Beckmann AS is NOK; the
reporting currency of Beckmann Norway GmbH (Germany) is EUR; the reporting currency of
Beckmann Norway Inc. is USD; the recording currency of Beckmann Norway GmbH (Austria) is EUR;
the recording currency of Axus Stationery (Hong Kong) Company Ltd. is HKD; and the recording
currency of International stationery company is VND. The financial statement herein is presented in
RMB.
5. Methods for determining materiality standards and selection basis
√ Applicable □ Not applicable
Item Materiality standard
Material accounts receivable where bad The amount of a provision separately accrued accounts for
debt provisions are accrued separately over 0.5% of total assets
The amount of a single write-off accounts for over 0.5% of
Write-off of material accounts receivable
total assets
Material bad debt provision amounts
The amount of a single recovery or reversal accounts for over
recovered or reversed in the accounts
0.5% of total assets
receivable in the current period
Other material accounts receivable where The amount of a provision separately accrued accounts for
bad debt provisions are accrued separately over 0.5% of total assets
Write-off of other material accounts The amount of a single write-off accounts for over 0.5% of
receivable total assets
Material bad debt provision amounts
The amount of a single recovery or reversal accounts for over
recovered or reversed in other accounts
0.5% of total assets
receivable in the current period
Material prepayments by amount that have The amount of a single prepayment that has aged over one
aged over one year year accounts for over 0.5% of total assets
Changes in material construction in
The budget of a single project exceeds 3% of total assets
progress in the current period
Material accounts payable that have aged The amount of a single account payable that has aged over one
over one year or are overdue year accounts for over 0.5% of total assets
Material contract liabilities that have aged The amount of a single contract liability that has aged over one
over one year year accounts for over 0.5% of total assets
Other material accounts payable that have The amount of a single other account payable that has aged
aged over one year or are overdue over one year accounts for over 0.5% of total assets
The Company recognises the payments related to equity
Cash received in connection with material
disposal that occur in amounts greater than 5% of net assets as
investing activities
cash received in connection with material investing activities
The Company recognises the payments related to equity
Cash paid in connection with material
acquisition that occur in amounts greater than 5% of net assets
investing activities
as cash paid in connection with material investing activities
The Company recognises overseas operating entities whose
total assets/gross profits/revenues exceed 15%/10%/15% of
Material overseas operating entities
total consolidated assets/total consolidated profits/consolidated
revenues as material overseas operating entities.
The Company recognises non-wholly-owned subsidiaries
whose total assets/gross profits/revenues exceed
Material non-wholly-owned subsidiary 15%/10%/15% of total consolidated assets/total consolidated
profits/consolidated revenues as material non-wholly-owned
subsidiaries.
Material joint ventures or associated The Company recognises joint ventures or associated
Notes to financial statements Page 97
Annual Report 2023
enterprises enterprises whose total assets/gross profits/revenues exceed
15%/10%/15% of total consolidated assets/total consolidated
profits/consolidated revenues as material joint ventures or
associated enterprises.
6. Accounting treatments for business combination under or not under common control
√ Applicable □ Not applicable
Business combination under common control: the assets and liabilities acquired by the Company in
business combination (including goodwill incurred in the acquisition of the acquiree by ultimate
controlling party) shall be measured at the carrying amount of the assets and liabilities of the acquiree in
the consolidated financial statements of the ultimate controlling party at the date of combination. The
difference between the carrying amount of the net assets obtained and the carrying amount of the
consideration paid for the merger (or total nominal value of the issued shares) is adjusted to capital
premium in capital reserve. If the capital premium in capital reserve is not sufficient to offset the
difference, the remaining balance is adjusted against retained earnings.
Business combination not under common control: the cost of business combination is the fair value
of the assets paid by the acquirer to obtain the control right of the acquiree, the liabilities incurred or
assumed, and the equity securities issued at the date of purchase. Where the cost of business
combination is higher than the fair value of the identifiable net assets acquired from the acquiree in
business combination, the Company shall recognize such difference as goodwill; where the cost of
business combination is less than the fair value of the identifiable net assets acquired from the acquiree
in business combination, such difference shall be included in the current profit or loss. The identifiable
assets, liabilities and contingent liabilities of the acquiree obtained in the business combination that meet
the recognition conditions are measured at their fair values at the date of purchase.
The direct expenses incurred in business combination shall be included the current profit or loss;
transaction costs associated with the issue of equity or debt securities for the business combination shall
be included in the initially recognized amounts of the equity or debt securities.
7. Control judgment criteria and preparation of consolidated financial statements
√ Applicable □ Not applicable
(1) Control judgment criteria
The consolidation scope of consolidated financial statements is determined on the basis of control,
including the Company and all of its subsidiaries. The term "control" refers to the power held by the
Company over the invested enterprise, through which the Company is capable of enjoying variable
return by participating in relevant activities of the invested enterprise, and having the ability to influence
the amount of return via such control.
(2) Consolidation procedure
The Company regards the entire enterprise group as an accounting entity and prepares the
consolidated financial statements in accordance with unified accounting policies to reflect the overall
financial status, operating results and cash flow of the enterprise group. The influence of internal
transactions between the Company and its subsidiaries and among the subsidiaries shall be offset. If
internal transactions indicate that the relevant assets have suffered impairment losses, the losses shall be
fully recognized. In preparing the consolidated financial statements, where the accounting policies and
the accounting periods are inconsistent between the Company and its subsidiaries, the financial
statements of the subsidiaries are adjusted in accordance with the accounting policies and accounting
period of the Company.
The owners' equity, the net profit or loss and the comprehensive income attributable to minority
shareholders of a subsidiary of the current period are presented separately under the owners' equity in the
consolidated balance sheet, the net profit and the total comprehensive income in the consolidated income
statement respectively. Where losses attributable to the minority shareholders of a subsidiary exceed the
minority shareholders' interest entitled in the shareholders' equity of the subsidiary at the beginning of
the period, the excess is allocated against the minority equity.
① Addition of subsidiary or business
During the Reporting Period, if there is an addition of subsidiary or business due to business
combination under common control, the operating results and cash flows of the subsidiary or business
Notes to financial statements Page 98
Annual Report 2023
combination from the beginning of the current period to the end of the Reporting Period are included
into the consolidated financial statements, and at the same time, the amount at the end of the period of
the consolidated financial statements and the relevant items in the comparative statements are adjusted
as if the reporting entity after combination had been existing since the control of the ultimate controlling
party started.
Where control over the investee under common control is obtained due to reasons such as increase
in investments, for equity investment held before the control over the acquiree is obtained, profit or loss,
other comprehensive income and other changes in net assets recognized from the later of the acquisition
of the original equity interest and the date when the acquirer and the acquiree were placed under
common control until the date of combination are offset against the retained profit at the beginning of
the period of the comparative statements or the profit or loss of the current period respectively.
During the Reporting Period, if there is an addition of subsidiary or business due to business
combination not under common control, it shall be included in the consolidated financial statements on
the basis of the fair value of the identifiable assets, liabilities and contingent liabilities determined at the
date of purchase.
Where control over the investee not under common control is obtained due to reasons such as
increase in investments, for the equity interest of the acquiree held before the date of purchase, the
Company remeasures the equity interest at its fair value as at the date of purchase, and any difference
between the fair value and its book value will be accounted for as investment gains of the current period.
Where equity interest of the acquiree held before the date of purchase is related to other comprehensive
income that can be reclassified into profit and loss in the future and other changes in owners’ equity
under the equity method, such equity interest is transferred to investment gains of the period to which
the date of purchase belongs.
② Disposal of subsidiaries
A. General treatment for disposal
When control over the investee is lost due to the disposal of part of the equity investment or other
reasons, the Company remeasures the remaining equity investment at fair value as at the date on which
control is lost. The difference between the sum of the consideration received from equity disposal and
the fair value of the remaining equity interest and the sum of the net assets of the subsidiary
proportionate to the original shareholding accumulated from the date of purchase or combination and
goodwill is included in investment gains of the period during which the control is lost. Other
comprehensive income that is related to the equity investment in the original subsidiary and can be
reclassified into profit and loss in the future and other changes in owners’ equity under the equity
method, are transferred to investment gains of the period during which the control is lost.
B. Stepwise disposal of subsidiary
In respect of stepwise disposal of equity investment in a subsidiary through multiple transactions
until control is lost, if the terms, conditions and economic effects of the transactions of equity investment
in the subsidiary satisfy one or more of the following conditions, the transactions are normally accounted
for as a basket of transactions:
i. these transactions were entered into simultaneously or after considering the effects of each other;
ii. these transactions constituted a complete commercial result as a whole;
iii. one transaction was conditional upon at least one of the other transaction;
iv. one transaction was not economical on its own but was economical when considering together
with other transactions.
Where the transactions constitute a basket of transactions, the Company accounts for the
transactions as a transaction of disposal of a subsidiary until control is lost; the difference between the
amount received each time for disposal before control is lost and the net assets of such 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 control is
lost upon loss of control.
Where the transactions do not constitute a basket of transactions, before the loss of control, the
transactions are accounted for using the policies related to partial disposal of equity investment in a
subsidiary where no control is lost; when control is lost, they are accounted for using the general method
for disposal of subsidiaries.
③ Purchase of minority interests in subsidiary
For the difference between the long-term equity investment newly acquired due to the purchase of
minority interests by the Company and the share of net assets of the subsidiary calculated according to
Notes to financial statements Page 99
Annual Report 2023
the new shareholding accumulated from the date of purchase (or date of combination), share premium of
the capital reserve in the consolidated balance sheet will be adjusted; where share premium of the capital
reserve is insufficient for the write-down, retained profit will be adjusted.
④ Partial disposal of equity investment in subsidiaries without losing control
For the difference between the disposal consideration and the net assets of the subsidiary
corresponding to the disposal of long-term equity investment accumulated from the date of purchase or
date of combination, share premium of the capital reserve in the consolidated balance sheet will be
adjusted; where share premium of the capital reserve is insufficient for the write-down, retained profit
will be adjusted.
8. Classification of joint arrangements and accounting treatment of joint operations
√ Applicable □ Not applicable
Joint arrangements are divided into joint operations and joint ventures.
A joint operation is a joint arrangement whereby the party to joint arrangement has rights to the
assets, and obligations for the liabilities related to the arrangement.
The Company recognises the following items in connection with the interest share in joint
operation:
(1) Assets solely held by the Company, and assets jointly held under the Company's shares;
(2) Liabilities solely assumed by the Company, and liabilities jointly assumed under the Company's
shares;
(3) Revenues from the sale of the Company's share in the output of joint operation;
(4) Revenues from the sale of the output from the joint operation recognised under the Company's
share;
(5) Expenses solely incurred, and expenses incurred from the joint operation recognised under the
Company's share.
The Company's investments in joint ventures are accounted for by equity method. For details,
please refer to Note "V (19) Long-term Equity Investment".
9. Determination of cash and cash equivalents
Cash refers to the cash on hand and deposits that are available for payment of the Company. Cash
equivalents refer to investments held by the Company that are short-term, highly liquid, readily
convertible to known amounts of cash and subject to an insignificant risk of changes in value.
10. Foreign currency transactions and translation of foreign currency financial statements
√ Applicable □ Not applicable
(1) Foreign currency transactions
Foreign currency transactions shall be translated into RMB at the spot exchange rate on the day
when the transactions occur.
Balance of monetary items in foreign currency as at the balance sheet date is translated at the spot
rates prevailing at the balance sheet date, and any translation difference arising therefrom is included in
profit or loss of the period except for the translation difference arising from dedicated borrowings in
foreign currency related to the construction of assets qualified for capitalisation which is accounted for
under the principle of capitalisation of borrowing expenses.
(2) Translation of foreign currency financial statements
Asset and liability items in the balance sheet are translated at the spot rates prevailing at the balance
sheet date. Owners' equity items other than "undistributed profit" adopt the spot rates on the dates when
transactions are incurred. Income and expense items in the income statement are translated at the
approximate rates prevailing at the transaction dates.
On disposal of a foreign operation, the exchange differences in the financial statements in foreign
currency relating to that foreign operation are transferred from owners' equity to profit or loss of the
period during which the disposal occurs.
11. Financial instruments
√ Applicable □ Not applicable
Notes to financial statements Page 100
Annual Report 2023
The Company recognises a financial asset, financial liability or equity instrument when it becomes
a party to a financial instrument contract.
(1) Classification of the financial instruments
According to the business model of the Company’s management of financial assets and the
contractual cash flow characteristics of financial assets, financial assets are classified at the initial
recognition as: financial assets at amortized cost, financial assets at fair value through profit or loss, and
other financial assets at fair value through current profit or loss.
The Company classifies financial assets that simultaneously meet the following conditions and are
not designated as financial assets at fair value through current profit or loss as financial assets measured
at amortized cost:
- the business model aims at collecting contractual cash flows; and
- contractual cash flows are only the payment made based on the principal and the interest of the
outstanding principal amount.
The Company classifies financial assets that simultaneously meet the following conditions and are
not designated as financial assets at fair value through current profit or loss as financial assets (debt
instruments) at fair value through other comprehensive income:
- the business model aims at both collecting contractual cash flows and selling the financial assets;
and
- contractual cash flows are only the payment made based on the principal and the interest of the
outstanding principal amount.
For non-trading equity instrument investments, the Company irrevocably designates them as
financial assets (equity instruments) at fair value through other comprehensive income at the time of
initial recognition. The designation is made on the basis of a single investment, and the related
investment meets the definition of an equity instrument from the issuer's perspective.
Except for the above-mentioned financial assets measured at amortized cost and at fair value
through other comprehensive income, the Company classifies all other financial assets as financial assets
at fair value through current profit or loss. At the time of initial recognition, if accounting mismatches
can be eliminated or significantly reduced, the Company can irrevocably designate financial assets that
should be classified as financial assets measured at amortized cost or at fair value through other
comprehensive income as financial assets at fair value through current profit or loss.
Financial liabilities at the initial recognition are classified into financial liabilities at fair value
through current profit or loss, and financial liabilities at amortized cost.
Financial liabilities at the initial recognition can be designated as financial liabilities at fair value
through current profit or loss if one of the following conditions can be met:
① Such designation can eliminate or significantly reduce accounting mismatches.
② According to the enterprise risk management or investment strategy stated in the official written
document, management and evaluation of the financial liabilities portfolio or financial assets and
financial liabilities portfolio are based on fair value which will be used as the basis for reporting to the
key management personnel.
③ The financial liabilities include embedded derivatives that need to be split separately.
(2) Recognition and measurement of financial instruments
① Financial assets at amortized cost
Financial assets at amortized cost include notes receivable, accounts receivable, other receivables,
long-term receivables and debt investment, which are initially measured at fair value, and related
transaction costs are included in the initial recognition amount. The accounts receivable of major
financing components and the accounts receivable of the Company's decision not to consider the
financing component with the term less than one year are initially measured at the contract transaction
price.
Interest calculated by the effective interest method during the period of holding is included in the
current profit or loss.
Notes to financial statements Page 101
Annual Report 2023
Upon recovery or disposal, the difference between the acquisition price and the carrying amount of
the financial asset shall be included in the current profit or loss.
② Financial assets at fair value through other comprehensive income (debt instruments)
Financial assets (debt instruments) at fair value through other comprehensive income, including
receivables financing and other debt investments, are initially measured at fair value, and related
transaction costs are included in the initial recognition amount. The financial assets are subsequently
measured at fair value. Changes in fair value are included in other comprehensive income, except for
interest, impairment losses or gains and exchange gain or loss calculated using the effective interest
method.
When the recognition is terminated, the accumulated gain or loss previously included in other
comprehensive income is transferred from other comprehensive income and included in the current
profit or loss.
③ Financial assets (equity instruments) at fair value through other comprehensive income
Financial assets (equity instruments) at fair value through other comprehensive income, including
other equity instruments, are initially measured at fair value, and related transaction costs are included in
the initial recognition amount. The financial assets are subsequently measured at fair value, and changes
in fair value are included in other comprehensive income. The dividends obtained are included in the
current profit and loss.
When the recognition is terminated, the accumulated gain or loss previously included in other
comprehensive income is transferred from other comprehensive income and included in retained
earnings.
④ Financial assets at fair value through the current profit or loss
Financial assets at fair value through the current profit or loss, including held-for-trading financial
assets, derivative financial assets and other non-current financial assets, are initially measured at fair
value, and related transaction costs are included in the current profit or loss. The financial assets are
subsequently measured at fair value, and changes in fair value are included in the current profit or loss.
⑤ Financial liabilities at fair value through current profit or loss
Financial liabilities at fair value through current profit or loss, including held-for-trading financial
liabilities, and derivative financial liabilities, are initially measured at fair value, and related transaction
costs are included in the current profit or loss. The financial liabilities are subsequently measured at fair
value, and changes in fair value are included in the current profit or loss.
When the recognition is terminated, the difference between the carrying amount and consideration
paid is included in the current profit and loss.
⑥ Financial liabilities at amortized cost
Financial liabilities at amortized cost, including short-term borrowings, bills payable and accounts
payable, other payables, long-term borrowings, bonds payable, long-term payables, are initially
measured at fair value, and related transaction costs are included in the initial recognition amount.
Interest calculated by the effective interest method during the period of holding is included in the
current profit or loss.
When the recognition is terminated, the difference between consideration paid and the carrying
amount of the financial liabilities is included in the current profit and loss.
(3) Recognition basis and measurement methods for derecognition of financial assets and transfer
of financial assets
The Company derecognizes financial assets when one of the following conditions is met:
- the contractual rights to collect the cash flows from the financial assets expire;
- the financial assets have been transferred and nearly all the risks and rewards related to the
ownership of the financial assets have been transferred to the transferee; or
- the financial assets have been transferred, and the Company have neither transferred nor retained
almost all risks and rewards related to the ownership of the financial assets, but did not retain control
over the financial assets.
Notes to financial statements Page 102
Annual Report 2023
When the Company modifies or renegotiates a contract with a counterparty in a manner that
constitutes a material modification, the original financial asset is derecognised and a new financial asset
is recognised in accordance with the modified terms.
Where a financial asset is transferred, it shall not be derecognized if the Company has retained
nearly all the risks and rewards related to the ownerships of the financial asset.
The substance-over-form principle shall be adopted while making a judgment on whether the
transfer of financial assets satisfies the above conditions for derecognition.
The transfer of financial assets could be classified into entire transfer and partial transfer. 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 The carrying amount of the financial assets transferred;
② The consideration received as a result of the transfer, plus the accumulative amount of the
change in fair value previously included into the owners’ equity (in cases where the transferred financial
assets are financial assets (debt instruments) at fair value through other comprehensive income).
If the partial transfer of financial assets satisfies the conditions for derecognition, the overall
carrying amount of the transferred financial assets shall be apportioned according to their respective
relative fair value between the portion of derecognized part and the remaining part, and the difference
between the two amounts below shall be included in the current profit or loss:
① The carrying amount of the derecognized portion;
② The consideration of the derecognized portion, plus the corresponding derecognized portion of
accumulated change in fair value previously included in owners’ equity (in cases where the transferred
financial assets are financial assets (debt instruments) at fair value through other comprehensive
income).
If the transfer of financial assets does not meet the conditions for derecognition, the financial assets
continue to be recognized and the consideration received is recognized as a financial liability.
(4) Derecognition of financial liabilities
When the current obligation under a financial liability is completely or partially discharged, the
whole or relevant portion of the liability is derecognized; if an agreement is entered into between the
Company and a creditor to replace the original financial liabilities with new financial liabilities with
substantially different terms, the original financial liabilities will be derecognized and the new financial
liabilities will be recognized.
If the contract terms of the original financial liabilities are substantially amended in part or in full,
the original financial liabilities will be derecognized in full or in part, and the financial liabilities whose
terms have been amended will be recognized as a new financial liability.
When financial liabilities are derecognized in full or in part, the difference between the carrying
amount of the financial liabilities derecognized and the consideration paid (including transferred
non-cash assets or new financial liability) will be included in the current profit or loss.
Where the Company repurchases part of its financial liabilities, the carrying amount of such
financial liabilities will be allocated according to the relative fair value between the continuously
recognized part and derecognized part on the repurchase date. The difference between the carrying
amount of the derecognized portion of financial liabilities and the consideration paid (including
transferred non-cash assets or new financial liability) will be included in the current profit or loss.
(5) Method of determining the fair values of financial assets and liabilities
A financial instrument with an active market determines its fair value by quoted prices in an active
market. Financial instruments that do not exist in an active market shall use valuation techniques to
determine their fair value. During the valuation process, the Company uses valuation techniques
appropriate to the prevailing circumstances with the support of sufficient data and other information
available, selects inputs consistent with the characteristics of the assets or liabilities considered in the
transactions of relevant assets or liabilities by market participants, and gives priority to relevant
observable inputs. Unobservable inputs are used only when the relevant observable inputs are not
accessible or the access to which is impracticable.
(6) Impairment test method and accounting treatment for impairment of financial instruments
Notes to financial statements Page 103
Annual Report 2023
Based on anticipated credit losses, the Company carries out accounting treatments of impairment on
financial assets measured at amortized cost, financial assets (debt instruments) at fair value through
other comprehensive income and financial guarantee contracts.
The Company considers reasonable and evidence-based information about past events, current
conditions, and forecasts of future economic conditions, and uses the risk of default as the weight to
calculate the probability-weighted amount of the present value of the difference between the contractual
cash flow receivable and the expected cash flow, and recognizes the expected credit loss.
Regarding one-year the receivables and contract assets formed from transactions regulated by the
Accounting Standards for Business Enterprises No. 14 - Revenue, regardless of whether they contain
significant financing components or not, the Company always measures their loss reserves in accordance
with the amount of anticipated credit losses for the entire lifetime.
Regarding receivables from leasing formed from transactions regulated by the Accounting
Standards for Business Enterprises No. 21 - Leases, the Company always measures their loss reserves in
accordance with the amount of anticipated credit losses for the entire lifetime.
Regarding other financial instruments, the Company assesses at each balance sheet date their credit
risk changes since initial recognition.
The Company compares the risk of default on the balance sheet date of a financial instrument with
the risk of default on the date of initial recognition to determine the relative change in the risk of default
during the expected life of the financial instrument so as to assess whether the credit risk of the financial
instrument has increased significantly since the initial recognition. Usually, after an overdue for more
than 30 days, the Company believes that the credit risk of the financial instrument has increased
significantly unless there is conclusive evidence that the credit risk of the financial instrument has not
increased significantly since the initial recognition.
If the credit risk of financial instrument at the balance sheet date is low, the Company will believe
that the credit risk of the financial instrument has not increased significantly since the initial recognition.
If the credit risk of the financial instruments has increased significantly since the initial recognition,
the Company will measure its loss provision based on the amount of anticipated credit loss for the
lifetime of the financial instruments; if the credit risk of the financial instruments has not significantly
increased since the initial recognition, the Company will measure its loss provision based on the amount
of anticipated credit loss for the financial instruments in the next 12 months. The increase or reversal of
the loss provision resulting therefrom is included in the current profit and loss as an impairment loss or
gain. Regarding financial assets at fair value through other comprehensive income (debt instruments),
the Company recognises their loss reserves through other comprehensive income and includes
impairment losses or gains in the profit or loss for the current period, without reducing the book value of
such financial assets presented in the balance sheet.
If there is any objective evidence indicating that an account receivable has incurred credit
impairment, the Company will make provision for impairment for that account receivable separately.
Apart from the above-mentioned accounts receivable where bad debt provisions are accrued
separately, the Company divides other financial instruments into several portfolios according to their
credit risk characteristics, and determines the expected credit loss of each portfolio. Portfolios of notes
receivable, accounts receivable and other receivables for provision of expected credit losses and the
basis for the Company's determination are as follows:
① Portfolios for provision of expected credit losses and the determination basis:
Item Portfolio Determination basis
Commercial acceptance bills
Notes receivable Finance company acceptance The expected credit loss is measured with
bills the default risk exposure and the expected
Receivables financing Bank acceptance bills credit loss rate for the entire lifetime based
Related parties in the scope on status quo and the forecast of future
of the consolidated financial economic conditions, by reference to
Accounts receivable historical credit loss experience.
statements
Account age analysis
Other receivables Consolidated balance of The expected credit loss is measured with
Notes to financial statements Page 104
Annual Report 2023
related-parties current the default risk exposure and the expected
accounts - provisional credit loss rate for the following 12 months
estimate of input tax or the entire lifetime based on status quo
Related parties in the scope and the forecast of future economic
of the consolidated financial conditions, by reference to historical credit
statements loss experience.
Account age analysis
House lease deposit
② Parallel table of account age portfolios and expected credit loss rates
Expected credit
Expected credit loss loss rate of Expected credit
rate of accounts accounts loss rate of
Account age
receivable (core receivable (direct other accounts
traditional business) office supplies receivable
business)
Within one year (0-6 months (inclusive)) 0.50%
5.00% 5.00%
Within one year (6-12 months (inclusive)) 5.00%
1-2 years 30.00% 10.00% 30.00%
2-3 years 60.00% 50.00% 60.00%
More than 3 years 100.00% 100.00% 100.00%
If the Company no longer reasonably expects that the contractual cash flow of a financial asset can
be recovered in whole or in part, it will directly write down the book balance of the financial asset.
12. Bills receivable
√ Applicable □ Not applicable
Determination and accounting treatment of the anticipated credit loss of notes receivable
√ Applicable □ Not applicable
For details, please refer to Note V (11) Financial Instruments.
Categories of groups for which bad debt provisions are made on a grouping basis of credit risk
characteristics and the basis for determining them
√ Applicable □ Not applicable
For details, please refer to “(6) Impairment test method and accounting treatment for impairment of
financial instruments” under Note V (11) Financial Instruments.
Aging methods for age-based recognition of a group of credit risk characteristics
□ Applicable √ Not applicable
Judgment criteria for bad debt provisions made on an individual basis
□ Applicable √ Not applicable
13. Accounts receivable
√ Applicable □ Not applicable
Determination and accounting treatment of the anticipated credit loss of accounts receivable
√ Applicable □ Not applicable
For details, please refer to Note V (11) Financial Instruments.
Categories of groups for which bad debt provisions are made on a grouping basis of credit risk
characteristics and the basis for determining them
Notes to financial statements Page 105
Annual Report 2023
√ Applicable □ Not applicable
For details, please refer to “(6) Impairment test method and accounting treatment for impairment of
financial instruments” under Note V (11) Financial Instruments.
Aging methods for age-based recognition of a group of credit risk characteristics
√ Applicable □ Not applicable
For details, please refer to “(6) Impairment test method and accounting treatment for impairment of
financial instruments” under Note V (11) Financial Instruments.
Judgment criteria for bad debt provisions made on an individual basis
√ Applicable □ Not applicable
The Company makes provision for impairment of accounts receivable separately based on
distinctive credit risk characteristics such as significantly deteriorated credit standing, low possibility of
further repayment and ongoing credit impairment of counterparties.
14. Receivables financing
√ Applicable □ Not applicable
Determination and accounting treatment of the anticipated credit loss of receivables financing
√ Applicable □ Not applicable
For details, please refer to Note V (11) Financial Instruments.
Categories of groups for which bad debt provisions are made on a grouping basis of credit risk
characteristics and the basis for determining them
√ Applicable □ Not applicable
For details, please refer to “(6) Impairment test method and accounting treatment for impairment of
financial instruments” under Note V (11) Financial Instruments.
Aging methods for age-based recognition of a group of credit risk characteristics
□ Applicable √ Not applicable
Judgment criteria for bad debt provisions made on an individual basis
□ Applicable √ Not applicable
15. Other receivables
√ Applicable □ Not applicable
Determination and accounting treatment of the anticipated credit loss of other receivables
√ Applicable □ Not applicable
For details, please refer to Note V (11) Financial Instruments.
Categories of groups for which bad debt provisions are made on a grouping basis of credit risk
characteristics and the basis for determining them
√ Applicable □ Not applicable
For details, please refer to “(6) Impairment test method and accounting treatment for impairment of
financial instruments” under Note V (11) Financial Instruments.
Aging methods for age-based recognition of a group of credit risk characteristics
√ Applicable □ Not applicable
For details, please refer to “(6) Impairment test method and accounting treatment for impairment of
financial instruments” under Note V (11) Financial Instruments.
Judgment criteria for bad debt provisions made on an individual basis
√ Applicable □ Not applicable
The Company makes provision for impairment of other receivables separately based on distinctive
credit risk characteristics such as significantly deteriorated credit standing, low possibility of further
repayment and ongoing credit impairment of counterparties.
Notes to financial statements Page 106
Annual Report 2023
16. Inventories
√ Applicable □ Not applicable
Inventory categories, issue valuation method, inventory system, amortisation method for low value
consumables and packages
√ Applicable □ Not applicable
(1) Classification and cost of inventories
Inventories are classified into materials in transit, raw materials, turnover materials, goods-in-stock,
goods in production, goods in transit, commissioned processing materials and so forth.
Inventories are initially measured at cost. The cost of inventories includes purchase cost, processing
cost and other expenditures incurred to bring inventory to its current location and state.
(2) Valuation of inventory COGS
Inventory COGS is valued using the weighted average method.
(3) Inventory system
The perpetual inventory system is adopted.
(4) Amortization of low-value consumables and packaging materials
① Low-value consumables are amortized using the immediate write-off method
② Packaging materials are amortized using the immediate write-off method
Criteria for recognising and providing for provision for decline in value of inventories
√ Applicable □ Not applicable
At the balance sheet date, the inventories are measured according to the cost or the net realizable
value, whichever is lower. If the cost of inventories is higher than the net realizable value, the provision
for decline in value of inventories is made. The net realizable value refers, in the ordinary course of
business, to the amount after deducting the estimated cost of completion, estimated sale expense and
relevant taxes from the estimated sale price of inventories.
Net realizable value of held-for-sale commodity stocks, such as finished goods, goods-in-stock, and
held-for-sale raw materials, during the normal course of production and operation, shall be determined
by their estimated selling price less the related selling expenses and taxes; the net realizable value of
material inventories, which need to be processed, during the normal course of production and operation,
shall be determined by the amount after deducting the estimated cost of completion, estimated selling
expenses and relevant taxes from the estimated selling price of finished goods; the net realizable value of
inventories held for execution of sales contracts or labor contracts shall be calculated on the ground of
the contracted price. If an enterprise holds more inventories than the quantity stipulated in the sales
contract, the net realizable value of the exceeding part shall be calculated on the ground of general
selling price.
If the factors, which cause any value write-down of the inventories, have disappeared, thus causing
the inventories’ net realizable value to be higher than their carrying amount, the amount of write-down is
reversed from the provision for the loss on decline in value of inventories which has been made. The
reversed amount is included in the profits and losses of the current period.
Categories of groups and the basis for determining the allowance for decline in value of
inventories on a grouping basis, and the basis for determining the net realisable value of different
categories of inventories
□ Applicable √ Not applicable
Calculation method and basis for determining the net realisable value of each age group for the
purpose of recognising the net realisable value of inventories based on the age of the inventories
□ Applicable √ Not applicable
17. Contract assets
□ Applicable √ Not applicable
Notes to financial statements Page 107
Annual Report 2023
18. Non-current assets or disposal groups held for sale
√ Applicable □ Not applicable
Recognition standards and accounting treatment for non-current assets or disposal groups held
for sale
√ Applicable □ Not applicable
The Company classifies a non-current asset or disposal group as held for sale when the carrying
amount of the non-current asset or disposal group will be recovered through a sale transaction (including
non-monetary asset exchange with commercial substance) rather than through continuing use.
The Company classifies non-current assets or disposal groups meeting all of the following
conditions as held for sale:
(1) Assets or disposal groups can be sold immediately under current conditions based on the
practice of selling such assets or disposal groups in similar transactions;
(2) Sales are highly likely to occur, that is, the Company has already made a resolution on a sale
plan and obtained a certain purchase commitment, and the sale is expected to be completed within one
year. The sale shall have been approved if the relevant regulations require the approval of the relevant or
regulatory authority governing the Company.
If the carrying amount of non-current assets (excluding financial assets, deferred income tax assets
or assets formed by employee remuneration) or disposal groups meeting all of the following conditions
as held for sale is higher than the fair value minus the net amount of the sale costs, the carrying amount
will be written down to the net amount of fair value minus the sale costs, the amount written down will
be recognised as asset impairment losses and included in the profit or loss for the current period, and
provision for impairment of assets held for sale will be made.
Criteria for identification and presentation of discontinued operation
√ Applicable □ Not applicable
Discontinued operation is a component that satisfies one of the following conditions and is
separately identifiable, and has been disposed of by the Company or is classified by the Company as
held for sale:
(1) It represents a separate major line of business or geographical area of operations;
(2) It is part of a single coordinated plan to dispose of a separate major line of business or
geographical area of operations; or
(3) It is a subsidiary acquired exclusively with a view to resale.
The profit and loss from continuing operations and the profit and loss from discontinued operations
are separately presented in the income statement. Operational gains and losses such as impairment losses
and reversal amounts and disposal gains and losses from discontinued operations are reported as gains
and losses from discontinued operations. For the discontinued operations reported in the current period,
the Company re-reports the information previously reported as profits and losses from continuing
operations as the profits and losses from discontinued operations for the comparable accounting period
in the current financial statements.
19. Long-term equity investments
√ Applicable □ Not applicable
(1) Joint control or significant influence criterion
Joint control is the contractually agreed sharing of control of an arrangement, and exists only when
decisions about the relevant activities of the arrangement require the unanimous consent of the parties
sharing control. The Company together with the other joint venture parties can jointly control over the
investee, and are entitled to the right of the net assets of the investee who is joint venture of the
Company.
The term "significant influences" refers to the power to participate in making decisions on the
financial and operating policies of the invested enterprise, but not to control or do joint control together
with other parties over the formulation of these policies. Where the investor can exercise significant
influence over the investee, the investee is an associate of the Company.
(2) Determination of initial investment cost
① Long-term equity investments formed through business combination of entities
Notes to financial statements Page 108
Annual Report 2023
For long-term equity investments in subsidiaries formed by business combination under common
control, the initial investment cost of long-term equity investments shall be determined based on share of
the book value of the owners’ equity of the acquiree in the consolidated financial statements of the
ultimate controlling party at the date of combination. The difference between the initial investment cost
of the long-term equity investment and the carrying value of the consideration paid is adjusted to the
equity premium in the capital reserve. If the capital premium in capital reserve is not sufficient to offset
the difference, the remaining balance is adjusted against retained earnings. In connection with imposing
control over the investee under joint control as a result of additional investment and other reasons, the
difference between the initial investment cost of the long-term equity investment recognized in
accordance with the above principles and the carrying amount of the long term equity investment before
the combination and the sum of carrying amount of newly paid consideration for additional shares
acquired on the date of combination is adjusted to equity premium. If the capital premium in capital
reserve is not sufficient to offset the difference, the remaining balance is adjusted against retained
earnings.
For long-term equity investment in subsidiaries formed by business combination not under common
control, the cost of the combination ascertained on the date of acquisition shall be taken as the initial
investment cost of the long-term equity investments. In connection with imposing control over the
investee not under joint control as a result of additional investment and other reasons, the initial
investment cost is the sum of the carrying amount of the equity investment originally held and the newly
increased initial investment cost.
② Long-term equity investments acquired by means other than business combination
The initial investment cost of a long-term equity investment obtained by the Company by cash
payment shall be the purchase cost paid actually.
The initial investment cost of a long-term equity investment obtained by the Company by means of
issuance of equity securities shall be the fair value of the equity securities issued.
(3) Subsequent measurement and recognition of profit or loss
① Long-term equity investment accounted for by cost method
Long-term equity investment in subsidiaries of the Company is accounted for by cost method,
unless the investment meets the conditions for holding for sale. except for the actual consideration paid
for the acquisition of investment or the declared but not yet distributed cash dividends or profits which
are included in the consideration, investment gains are recognized as the Company’s shares of cash
dividends or profits declared by the investee.
② Long-term equity investment accounted for by equity method
Long-term equity investments of associates and joint ventures are accounted for by equity method.
Where the initial investment cost of a long-term equity investment exceeds the investor’s interest in the
fair value of the investee’s identifiable net assets at the date of acquisition, no adjustment is made to the
initial investment cost of long-term equity investments; where the initial investment cost is less than the
investor’s interest in the fair value of the investee’s identifiable net assets at the date of acquisition, the
difference is included in the profits or losses of the current period, and the cost of the long-term equity
investment is adjusted simultaneously.
The Company recognizes the investment income and other comprehensive income according to the
shares of net profit or loss and other comprehensive income realized by the investee which it shall be
entitled or shared respectively, and simultaneously makes adjustment to the carrying amount of
long-term equity investments; the carrying amount of long-term equity investments shall be reduced by
attributable share of the profit or cash dividends for distribution declared by the investee. In relation to
other changes of owners’ equity except for net profit and loss, other comprehensive income and profit
distributions of the investee (hereinafter referred to as "other changes in owners’ equity"), the carrying
amount of long-term equity investments shall be adjusted and included in the owners’ equity.
When determining the amount of proportion of net profit or loss, other comprehensive income and
other changes in owners’ equity in the investee which it entitles, fair value of each identifiable assets of
the investee at the time when the investment is obtained shall be used as the basis, and adjustment shall
be made to the net profit and other comprehensive income of the investee according to the accounting
policies and accounting period of the Company.
The unrealized profit or loss resulting from transactions between the Company and its associates or
joint ventures shall be offset in proportion to the investor’s equity interest of investee, based on which
investment income or loss shall be recognized. However, the situation that the assets invested or sold
Notes to financial statements Page 109
Annual Report 2023
constitute business is excluded. Any losses resulting from internal transactions, which are attributable to
impairment of assets, shall be fully recognized.
The Company shall recognize the net losses of the joint ventures or associates until the book value
of the long-term equity investment and other long-term rights and interests which substantially form the
net investment made to the invested entity are reduced to zero, unless the joint ventures or associates
have the obligation to undertake extra losses. If the joint ventures or associates realize net profits in the
future, the Company resumes recognizing its share of profits after the share of profits makes up for the
share of unrecognized losses.
③ Disposal of long-term equity investments
For disposal of long-term equity investment, the difference between the carrying amount and the
consideration actually received shall be included in the current profit or loss.
For partial disposal of long-term equity investments accounted for by the equity method, if the
remaining equity is still accounted for by the equity method, the other comprehensive income calculated
and recognized by the original equity method shall be carried forward in corresponding proportion by
using the same basis as the investee used for direct disposal of relevant assets or liabilities. Other
changes in owners’ equity shall be carried forward to the profits or losses of the current period on a pro
rata basis.
When the joint control or material influence over the investee is lost due to disposal of equity
investment and other reasons, other comprehensive income recognized in the original equity investment
due to the use of the equity method shall, when it is no longer calculated by the equity method, be
subject to the accounting treatment on the same basis as the investee used for direct disposal of relevant
assets or liabilities. Other changes in owners’ equity shall be all transferred into the profits or losses of
the current period when they are no longer calculated by the equity method.
When the control over the investee is lost due to partial disposal of equity investment and other
reasons, the remaining equities after disposal shall be accounted for by equity method in preparing
individual financial statements provided that joint control or material influence over the investee can be
imposed, and shall be adjusted as if such remaining equities has been accounted for by the equity
method since they are obtained. The other comprehensive income recognized before the control over the
investee is obtained shall be carried forward in proportion by using the same basis as the investee used
for direct disposal of relevant assets or liabilities, and the other changes in owners’ equity calculated and
recognized using the equity method shall be carried forward to the profits or losses of the current period
on a pro rata basis. Where the remaining equities after disposal cannot impose joint control or material
influence over the investee, they shall be recognized as financial assets, and the difference between fair
value and the carrying amount on the date when control is lost shall be included in the profits or losses
of the current period. All other comprehensive income and other changes in owners’ equity recognized
before the control over the investee is obtained shall be carried forward.
In respect of stepwise disposal of equity investment in a subsidiary through multiple transactions
until control is lost, where the transactions constitute a basket of transactions, the Company accounts for
the transactions as a transaction of disposal of a subsidiary until control is lost; however, the difference
between the amount received each time for disposal before control is lost and the carrying amount of
long-term equity investments corresponding to the disposal of equity is recognized as other
comprehensive income in the individual financial statements, and is transferred to the profits or losses of
the current period during which control is lost upon loss of control. Where the transactions do not
constitute a basket of transactions, each transaction shall be accounted for separately.
20. Investment real estate
Not applicable
21. Fixed assets
(1).Recognition conditions
√ Applicable □ Not applicable
Fixed assets are tangible assets that are held for use in the production or supply of goods or services,
for rental to others, or for administrative purposes; and have a useful life of more than one accounting
year. Fixed assets are recognized when they meet the following conditions:
Notes to financial statements Page 110
Annual Report 2023
① It is probable that the economic benefits associated with the fixed assets will flow to the
enterprise;
② The cost of fixed assets can be reliably measured.
A fixed asset is initially measured at its cost (and considering the impact of expected abandonment
cost factors).
Subsequent expenditures related to fixed assets are included in the cost of fixed assets when their
related economic benefits are likely to flow in to the Company and their costs can be reliably measured;
the book value of the replaced part is derecognized; all other subsequent expenditures are included in the
profits or losses of the current period at the time of occurrence.
(2).Method for depreciation
√ Applicable □ Not applicable
Fixed assets are depreciated by categories using the straight-line method, and the depreciation rates
are determined by categories based upon their estimated useful lives and their estimated residual value.
For fixed assets with provision for impairment accrued, the depreciation amount shall be determined
according to the book value after deduction of the impairment provision and the remaining useful life in
the future period. Where the parts of a fixed asset have different useful lives or cause economic benefits
for the enterprise in different ways, different depreciation rates or depreciation methods shall be applied,
and each part shall be depreciated separately.
The methods for depreciation, useful lives of depreciation, residual value and annual depreciation
rates of various categories of fixed assets are as follows:
Method for Useful lives of Residual value Annual
Category
depreciation depreciation (year) ratio depreciation rate
Property and buildings Straight-line method 20 5% 4.75%
Machinery and equipment Straight-line method 10 5-10% 9.5-9%
Transportation vehicles Straight-line method 4-10 0-10% 25-9%
Other equipment Straight-line method 2-10 0-10% 47.5-9.5%
Note: physical assets newly acquired through the increase of capital by M&G Holdings (Group)
Co., Ltd. to the Company in 2010 are stated at valuation, and depreciated at the remaining useful life.
22. Construction in progress
√ Applicable □ Not applicable
Construction in progress is measured at the actual cost incurred. Actual cost includes construction
cost, installation cost, borrowing expense qualified for capitalization, and other necessary expenditures
incurred before the construction in progress reaches its intended use status. When the construction in
progress reaches the intended use status, it shall be transferred to fixed assets and its depreciation shall
be accrued from the next month. The standards and time point for carrying forward the Company's
construction in progress to fixed assets are as follows:
Category Standards and time point for carrying forward them to fixed assets
(1) The construction project and ancillary projects are substantially completed; (2) the
construction project meets the predetermined design requirements and is accepted by units
responsible for surveying, design, construction, supervision, etc.; (3) the construction project is
Houses, buildings
accepted by fire department, land department, planning department or other external authorities if
and decoration of
such acceptance is required; (4) if the construction project has reached the predetermined state for
fixed assets
use but the final account for completion has not been made, the project shall be carried forward to
fixed assets at the value estimated according to the actual cost of the project from the date when it
reaches the predetermined state for use.
Machines and other
equipment that need (1) The equipment and supporting facilities are installed; (2) the equipment can maintain normal
to be installed and and stable operation for a period of time after commissioning; (3) the production equipment can
commissioned and stably output qualified products in a period of time; (4) the equipment is accepted by asset
other long-term management personnel and users.
assets
23. Borrowing costs
√ Applicable □ Not applicable
(1) Criteria for recognition of capitalized borrowing costs
Notes to financial statements Page 111
Annual Report 2023
For borrowing costs incurred by the Company that are directly attributable to the acquisition,
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 expense in the
period in which they incur and are included in the current profit or loss.
Assets qualified for capitalization are assets (fixed assets, investment property, inventories, etc.)
that necessarily take a substantial period of time for acquisition, construction or production to get ready
for their intended use or sale.
(2) Capitalization period of borrowing costs
The capitalization period shall refer to the period between the commencement and the cessation of
capitalization of borrowing costs, excluding the period in which capitalization of borrowing costs is
temporarily suspended.
Capitalization of borrowing costs begins when the following three conditions are fully satisfied:
① expenditures for the assets (including cash paid, transferred non-currency assets or expenditure
for holding debt liability for the acquisition, construction or production of assets qualified for
capitalization) have been incurred;
② borrowing costs have been incurred;
③ acquisition, construction or production that are necessary to enable the asset reach its intended
usable or saleable condition have commenced.
Capitalization of borrowing costs shall be suspended during periods in which the qualifying asset
under acquisition and construction or production ready for the intended use or sale.
(3) Suspension of capitalization period
Capitalization of borrowing costs shall be suspended during periods in which the acquisition,
construction or production of a qualifying asset is interrupted abnormally, when the interruption is for a
continuous period of more than 3 months; if the interruption is a necessary step for making the
qualifying asset under acquisition and construction or production ready for the intended use or sale, the
capitalization of the borrowing costs shall continue. The borrowing costs incurred during such
suspension period shall be recognized as the current profit or loss. When the acquisition and construction
or production of the asset resumes, the capitalization of borrowing costs commences.
(4) Calculation of capitalization rate and amount of borrowing costs
For specific borrowings for the acquisition, construction or production of assets qualified for
capitalization, the amount of borrowing costs for capitalization is determined through borrowing costs of
the specific borrowings actually incurred in the current period minus the interest income earned on the
unused borrowing loans as a deposit in the bank or as investment income earned from temporary
investment.
For general borrowings for the acquisition, construction or production of assets qualified for
capitalization, the to-be-capitalized amount of interests on the general borrowings shall be calculated and
determined by multiplying the weighted average asset disbursement of the part of the accumulative asset
disbursements minus the specifically borrowed loans by the capitalization rate of the general borrowings
used. The capitalization rate shall be calculated and determined according to the weighted average actual
interest rate of the general borrowings.
During the capitalization period, the exchange difference between the principal and interest of
dedicated borrowings in foreign currency is capitalized and included in the cost of the assets qualified
for capitalization. Exchange differences arising from the principal and interest of borrowings in foreign
currency other than dedicated borrowings in foreign currency are included in the profits or losses of the
current period.
24. Biological assets
□ Applicable √ Not applicable
25. Oil and gas assets
□ Applicable √ Not applicable
Notes to financial statements Page 112
Annual Report 2023
26. Intangible assets
(1).Useful life and the basis for its determination, estimation, amortisation method or review
procedure
√ Applicable □ Not applicable
① Valuation method of intangible assets
A. Intangible assets are initially measured at cost upon acquisition by the Company;
The costs of externally purchased intangible assets include the purchase price, relevant taxes and
expenses paid, and other expenditures directly attributable to putting the asset into condition for its
intended use.
B. Subsequent measurement
The useful life of intangible assets shall be analyze and judged upon acquisition.
As for intangible assets with finite useful life, they are amortized over the term in which economic
benefits are brought to the enterprise; if the term in which economic benefits are brought to the
enterprise by intangible assets cannot be estimated, the intangible assets shall be regarded as intangible
assets with indefinite useful life, and shall not be amortized.
② Estimated useful lives for the intangible assets with finite useful life
Amortization Residual Basis for determining expected
Item Estimated useful lives
method value ratio useful life
Straight-line
Land use rights 50 years 0 Certificate of land use rights
method
Image identification Straight-line
12 months to 64 months 0 License contract
rights method
Straight-line
Software 3 to 10 years 0 Expected years of benefit
method
Straight-line
Patent right 10 years 0 Patent right certificate
method
19 months to 120 Straight-line
Others 0 Expected years of benefit
months method
Note: land use rights newly acquired through the increase of capital by M&G Holdings (Group) Co.,
Ltd. to the Company in 2010 are stated at valuation, and amortized at the remaining useful life.
(2). Scope of R&D expenditures and corresponding accounting treatment methods
√ Applicable □ Not applicable
① Scope of R&D expenditures
The Company classifies all expenses in direct connection with R&D activities as R&D
expenditures, including the remuneration and benefits for R&D staff, inventory consumption, design and
sample costs, and depreciation and amortisation expenses.
A. Remuneration and benefits
Remuneration and benefits refer to the wages and salaries, basic endowment insurance premiums,
basic medical insurance premiums, unemployment insurance premiums, work-related injury insurance
premiums, maternity insurance premiums and housing provident funds for the Company's R&D staff,
and the labour costs of external R&D personnel.
B. Inventory consumption
Inventory consumption refers to the expenditures actually incurred by the Company in carrying out
R&D activities, including the costs of directly consumed materials, fuel and power.
C. Depreciation and amortisation expenses
Depreciation and amortisation charges refer to the expenses incurred from the depreciation of
instruments and equipment used in R&D activities, and the expenses amortisatised for software,
intellectual property, and non-patented technologies (proprietary technologies, licenses, design and
calculation methods, etc.).
D. Design and sample costs
Design and sample costs refer to the costs incurred in the conception, development and
manufacturing of new products and new processes, and the design of processes, technical specifications,
procedures and operational characteristics, including the costs incurred in creative design activities for
the acquisition of innovative, creative and breakthrough products.
Notes to financial statements Page 113
Annual Report 2023
② Specific criteria for the division of research phase and development phase
The expenses for internal research and development projects of the Company are divided into
expenses in the research phase and expenses in the development phase.
Research phase: scheduled, innovative investigations and research activities to obtain and
understand scientific or technological knowledge.
Development phase: apply the research outcomes or other knowledge to a plan or design prior to a
commercial production or use in order to produce new or essentially-improved materials, devices,
products, etc.
③ Specific criteria for capitalization at development phase
Expenditure in the research phase is included in the profit or loss for the current period at the time
of occurrence. Expenses in the development phase are recognized as an intangible asset when all of the
following conditions are satisfied, otherwise are included in the current profit or loss:
i. it is technically feasible to complete the intangible asset so that it will be available for use or sale;
ii. there is an intention to complete the intangible asset for use or sale;
iii. the intangible asset can produce economic benefits, including there is evidence that the products
produced using the intangible asset has a market or the intangible asset itself has a market; if the
intangible asset is for internal use, there is evidence that there exists usage for the intangible asset;
iv. there is sufficient support in terms of technology, financial resources and other resources in
order to complete the development of the intangible asset, and there is capability to use or sell the
intangible asset;
v. the expenses attributable to the development stage of the intangible asset can be measured
reliably.
If it is impossible to distinguish the expenses in the research phase from the expenses in the
development phase, all the incurred research and development expenses shall be included in the current
profit or loss.
27. Impairment of long-term assets
√ Applicable □ Not applicable
Long-term assets, such as long-term equity investment, fixed assets, construction in progress,
right-of-use assets, intangible assets with finite useful life, and oil and gas assets are tested for
impairment if there is any indication that an asset may be impaired at the balance sheet date. If the result
of the impairment test indicates that the recoverable amount of the asset is less than its carrying amount,
the difference shall be used to make impairment provision and an impairment loss are recognized. The
recoverable amount is the higher of the net amount of asset’s fair value less costs to sell and the present
value of the future cash flows expected to be derived from the asset. Provision for asset impairment is
determined and recognized on the individual asset basis. If it is not possible to estimate the recoverable
amount of an individual asset, the recoverable amount of a group of assets to which the asset belongs to
is determined. An assets group is the smallest group of assets that is able to generate cash inflow
independently.
Impairment test to goodwill formed by business combination, intangible assets with indefinite
useful life and intangible assets not ready to use shall be carried out at least at the end of each year,
regardless of whether there are any indications of impairment.
When the Company carries out impairment test to goodwill, the Company shall, as of the
purchasing day, allocate on a reasonable basis the carrying amount of the goodwill formed by enterprise
merger to the relevant asset groups, or if there is a difficulty in allocation, the Company shall allocate it
to the portfolio of asset groups. Relevant asset groups or portfolio of asset groups refer to the asset
groups or portfolio of asset groups that can benefit from the synergistic effect of business combination.
For the purpose of impairment test to the relevant asset groups or portfolio of asset groups
containing goodwill, if any evidence shows that the impairment of asset groups or portfolio of asset
groups related to goodwill exists, an impairment test will be made firstly on the asset groups or portfolio
of asset groups not containing goodwill, thus calculating the recoverable amount and comparing it with
the relevant carrying amount so as to recognize the corresponding impairment loss. Then the Company
will make an impairment test to the asset groups or portfolio of asset groups containing goodwill, and
compare their carrying value with their recoverable amount. Where the recoverable amount is lower than
Notes to financial statements Page 114
Annual Report 2023
the carrying value thereof, the amount of impairment loss is first deducted and allocated to the carrying
value of goodwill in the asset groups or portfolio of asset groups, and then the carrying value of other
assets other than goodwill in the asset groups or portfolio of asset groups is deducted according to the
percentages of the carrying value of such other assets.
Once the above asset impairment loss is recognized, it will not be reversed in the subsequent
accounting periods.
28. Long-term prepaid expenses
√ Applicable □ Not applicable
Long-term prepaid expenses are expenses which have occurred with amortization period over 1
year and shall be borne by the current period and subsequent periods.
Amortization periods and amortization methods of various expenses are as follows:
Item Amortization period Amortization method
Decoration fee 3 to 5 years Expected years of benefit
Others 2 years Expected years of benefit
29. Contract liabilities
√ Applicable □ Not applicable
The Company presents contract assets or contract liabilities in the balance sheet based on the
relationship between performance obligations and customer payments. The Company's obligation to
transfer goods or provide services to customers for consideration received or receivable from customers
is presented as contract liabilities. Contract assets and contract liabilities under the same contract are
presented in net amounts.
30. Employee benefits
(1).Accounting treatment of short-term benefits
√ Applicable □ Not applicable
During the accounting period when employees provide service, the Company will recognize the
short-term benefits actually incurred as liabilities, and the liabilities will be included in the current profit
or loss or relevant costs of assets.
The Company will pay social insurance and housing funds for the employees, and will make
provision of trade union funds and employee education costs in accordance with the requirements.
During the accounting period when employees provide service, the Company will determine relevant
amount of employee benefits in accordance with the required provision basis and provision ratios.
The employee welfare expenses incurred by the Company are included in the current profit or loss
or related asset costs based on the actual amounts when they actually occur. Among them, non-monetary
benefits are measured at fair value.
(2).Accounting treatment of post-employment benefits
√ Applicable □ Not applicable
① Defined contribution scheme
The Company will pay basic pension insurance and unemployment insurance in accordance with
the relevant provisions of the local government for the employees. During the accounting period when
employees provide service, the Company will calculate the amount payable which will be recognized as
liabilities in accordance with the local stipulated basis and proportions, and the liabilities will be
included in the current profit or loss or costs of related assets.
② Defined benefit scheme
The welfare responsibilities generated from defined benefit scheme based on the formula
determined by projected unit credit method will be vested to the service period of employees and
included into the current profit or costs of related assets.
The deficit or surplus generated from the present value of obligations of the defined benefit scheme
minus the fair value of the assets of defined benefit scheme is recognized as net liabilities or net assets.
When the defined benefit scheme has surplus, the Company will measure the net assets of the defined
benefit scheme at the lower of the surplus of defined benefit scheme and the upper limit of the assets.
Notes to financial statements Page 115
Annual Report 2023
All obligations of the defined benefit plan, including the expected duty of payment within 12
months after the end of annual reporting period during which employees provide service, shall be
discounted based on the bond market yield of sovereign bond matching the term of obligations of the
defined benefit plan and currency or corporate bonds of high quality in the active market on the balance
sheet date.
The service cost incurred by defined benefit scheme and the net interest of the net liabilities and net
assets of the defined benefit scheme will be included in the current profit or loss or costs of relevant
assets. The changes as a result of re-measurement of the net defined benefit liabilities or assets shall be
recognized in other comprehensive income and shall not be reversed to profit or loss at subsequent
accounting period. When the original defined benefit plan is terminated, amount originally included in
other comprehensive income shall be transferred to undistributed profit in the scope of equity.
When the defined benefit scheme is settled, the gain or loss is confirmed based on the difference
between the present value of obligations and the settlement price of the defined benefit scheme as at the
balance sheet date.
(3).Accounting treatment of termination benefits
√ Applicable □ Not applicable
Where the Company provides termination benefits to its employees, the employee benefits
liabilities resulting from termination benefits are recognized on the following date (whichever is earlier)
and are included in the current profit or loss: when the Company cannot unilaterally withdraw the
termination benefits provided due to the cancellation of the labor relationship with the employees or the
layoff proposal; or when the Company recognizes the costs or expenses of reorganization relating to
payment of termination benefits.
(4).Accounting treatment of other long-term employees' benefits
□ Applicable √ Not applicable
31. Estimated liabilities
√ Applicable □ Not applicable
The Company shall recognize the obligations related to contingencies when all of the following
conditions are satisfied:
(1) obligation is a present obligation of the Company;
(2) it is probable that an outflow of economic benefits of the Company will be required to settle the
obligation; and
(3) the amount of the obligation can be measured reliably.
Estimated liabilities shall be initially measured at the best estimate of the expenses required to settle
the related present obligation.
Factors pertaining to a contingency such as risk, uncertainties, and time value of money shall be
taken into account as a whole in getting the best estimate. Where the effect of the time value of money is
material, the best estimate shall be determined by discounting the related future cash outflow.
Where the expenses required have a successive range and the possibilities of occurrence of each
result are the same in the range, the best estimate shall be determined according to the median value
within the range; in other cases, the best estimate shall be determined as below:
If contingencies involve a single item, the best estimate shall be determined according to the most
possible occurrence amount.
If contingencies involve multiple items, the best estimate shall be calculated and determined in
accordance with various possible outcomes and related possibilities.
Where some or all of the expenses required to settle an estimated liability are expected to be
reimbursed by a third party, the reimbursement is separately recognized as an asset when it is virtually
certain that the reimbursement will be received. The amount recognized for the reimbursement is limited
to the carrying amount of the liability recognized.
The Company reviews the carrying value of the estimated liabilities at the balance sheet date. If
there is any exact evidence indicating that the carrying value cannot really reflect the current best
estimate, the carrying value shall be adjusted in accordance with the current best estimate.
Notes to financial statements Page 116
Annual Report 2023
32. Share-based payments
√ Applicable □ Not applicable
Share-based payments are transactions that grant equity instruments or assume equity-instrument
based liabilities for receiving services rendered by employees or other parties. The Company’s
share-based payments included equity-settled share-based payments and cash-settled share-based
payments.
(1) Equity-settled share-based payments and equity instruments
Equity-settled share-based payments made in exchange for services rendered by employees are
measured at the fair value of equity instruments granted to employees. Share-based payment transactions
vested immediately after the date of grant shall be included in the relevant cost or expense based on the
fair value of equity instruments at the date of grant, and the capital reserve shall be increased
accordingly. For share-based payment transactions vested only when the services during the waiting
period are completed or the specified performance conditions are satisfied after the grant, the Company
shall, at each balance sheet date during the waiting period, include the services obtained during the
period in relevant cost or expense at the fair value of the date of grant, according to the best estimate of
the number of vested equity instruments, and the capital reserve shall be increased accordingly.
If the terms of the equity-settled share-based payments are amended, the Company shall recognize
the services received at least based on the situation before the amendment is made. In addition, any
amendment resulting in the increase of the fair value of the equity instrument granted or changes that are
beneficial to employees on the amendment date, will be recognized as an increase in the service
received.
During the waiting period, if the granted equity instrument is cancelled, the Company will accelerate
the vesting thereof, immediately include the remaining amount that should be recognized in the waiting
period in the current profit or loss, and recognize the capital reserve. However, if new equity instruments
are vested and they are verified at the vesting date of new equity instrument as alternatives vested to cancel
equity instruments, the treatment on the new equity instrument is in conformity with the modified
treatment on disposal of equity instrument.
(2) Cash-settled share-based payments and equity instruments
Cash-settled share-based payments are measured at the fair value of the liabilities calculated and
determined on the basis of shares or other equity instruments undertaken by the Company. Share-based
payment transactions vested immediately after the date of grant shall be included in the relevant cost or
expense based on the fair value of liabilities undertook at the date of grant, and the liabilities shall be
increased accordingly. For share-based payment transactions vested only when the services during the
waiting period are completed or the specified performance conditions are satisfied after the grant, the
Company shall include the services obtained during the period in relevant cost or expense at the fair
value of the liabilities undertook by the Company based on the best estimate of the vesting situation, and
the liabilities shall be included accordingly. At each balance sheet date before the settlement and the
settlement date of relevant liabilities, the fair value of the liabilities is remeasured, and its changes are
included in the current profit or loss.
If the Company modifies the terms and conditions of a cash-settled share-based payment agreement
so that it becomes an equity-settled share-based payment, on the date of modification (regardless of
whether it occurs within or after the vesting period), the Company measures the equity-settled
share-based payment at the fair value on the grant date of the equity instrument, and recognises the
services acquired in capital reserve, and derecognises the liability recognised for the cash-settled
share-based payment on the date of modification, with the difference between the two being recognised
in profit or loss for the period. If the vesting period is lengthened or shortened as a result of the
modification, the Company accounts for the modification in accordance with the modified vesting
period.
33. Preference shares, perpetual bonds and other financial instruments
□ Applicable √ Not applicable
Notes to financial statements Page 117
Annual Report 2023
34. Revenue
(1).Accounting policies used in recognition and measurement of revenue by type of business
√ Applicable □ Not applicable
① Accounting policies used in recognition and measurement of revenue
The Company recognizes revenue when its performance obligations in the contract are fulfilled,
that is, the control over the relevant goods or services is obtained by the customer. Obtaining control
over related goods or services means being able to lead the use of the goods or services and obtain
almost all of the economic benefits from the goods or services.
If the contract contains two or more performance obligations, the Company will, at the date of the
contract, allocate the transaction price to each individual performance obligation in accordance with the
relative proportion of the stand-alone selling price of the goods or services promised by each individual
performance obligation. The Company measures revenue based on the transaction price allocated to each
individual performance obligation.
Transaction price refers to the amount of consideration that the Company expects to be entitled to
receive due to the transfer of goods or services to customers, excluding amounts collected on behalf of
third parties and amounts expected to be returned to customers. The Company determines the transaction
price in accordance with the terms of the contract and combined with its past customary practices. When
determining the transaction price, the Company considers the impact of variable consideration, major
financing components in the contract, non-cash consideration, consideration payable to customers and
other factors. The Company determines the transaction price that includes variable consideration at an
amount that does not exceed the amount of accumulated recognized revenue that is unlikely to be
significantly reversed when the relevant uncertainty is eliminated. If there is a major financing
component in the contract, the Company determines the transaction price based on the amount payable
in cash when the customer obtains control over the goods or services, and amortizes the difference
between the transaction price and the contract consideration with the actual interest rate method during
the contract period.
The performance obligation is fulfilled during a certain period of time if one of the following
conditions is satisfied, otherwise, the performance obligation is fulfilled at a certain point in time:
the customer obtains and consumes the economic benefits brought by the Company's performance
at the same time as the Company's performance.
the customer can control the products under construction during the Company's performance.
the goods produced during the Company's performance have irreplaceable uses, and the Company
has the right to collect payment for the cumulative performance part that has been completed so far
during the entire contract period.
For performance obligations performed within a certain period of time, the Company recognizes
revenue in accordance with the performance progress during that period, except where the performance
progress cannot be reasonably determined. The Company considers the nature of the goods or services
and adopts the output method or the input method to determine the performance progress. When the
performance progress cannot be reasonably determined, and the cost incurred is expected to be
compensated, the Company recognizes the revenue according to the amount of the cost incurred until the
performance progress can be reasonably determined.
For performance obligations performed at a certain point in time, the Company recognizes revenue
at the point when the customer obtains control over the relevant goods or services. When judging
whether the customer has obtained control over goods or services, the Company considers the following
signs:
the Company has the current right to receive payment for the goods or services, that is, the
customer has the current payment obligation for the goods or services;
the Company has transferred the legal ownership of the goods to the customer, that is, the
customer has the legal ownership of the goods;
the company has transferred the goods to the customer in kind, that is, the customer has taken
possession of the goods in kind;
the company has transferred the main risks and rewards of the ownership of the goods to the
customer, that is, the customer has obtained the main risks and rewards of the ownership of the goods;
the customer has accepted the goods or services.
The Company determines whether the Company's status is that of a principal or agent when
engaging in a transaction based on whether it has control over the goods or services prior to transferring
Notes to financial statements Page 118
Annual Report 2023
them to the customer. If the Company is able to control the goods or services before transferring them to
the customer, the Company is the principal responsible party and recognizes revenue based on the total
consideration received or receivable. Otherwise, the Company shall recognize revenue as an agent based
on the amount of commissions or fees to which it is expected to be entitled.
② Disclosure of specific revenue recognition methods and measurement methods by the type of
business
A. Sale contract: The sale contract between the Company and its customers usually contains only
the performance obligation for the transfer of goods. The Company usually takes into account the
following factors in order to obtain the current right of collection of goods, the transfer of primary risks
and rewards on the ownership of the goods, the transfer of legal ownership of the goods, the transfer of
physical assets of the goods and the customer's acceptance of the goods as the time point of revenue
recognition.
B. Supply chain service: The provision of integrated logistics and supply chain services is a
performance obligation performed at a certain time point, and revenue is recognised when the
corresponding services have been provided, the payment has been collected or the right to collect
payment has been obtained, and the corresponding economic benefits are likely to flow in.
C. Others (including franchise management fee, hardware and software and material income):
Revenue is recognised at the time point when the customer obtains control over the corresponding goods
or services.
(2).Different revenue recognition and measurement methods for the same type of business
adopting different business models
□ Applicable √ Not applicable
35. Contract cost
√ Applicable □ Not applicable
Contract cost includes contract performance cost and contract acquisition cost.
If the cost incurred by the Company for the performance of the contract does not fall within the
scope of relevant standards and regulations for inventories, fixed assets or intangible assets, it shall be
recognized as an asset as the contract performance cost when the following conditions are met:
the cost is directly related to a current or expected contract;
the cost increases the Company's future resources for fulfilling its performance obligations;
the cost is expected to be recovered.
If the incremental cost incurred by the Company to obtain the contract is expected to be recovered,
it will be recognized as an asset as the cost of obtaining the contract.
Assets related to contract costs are amortized on the same basis as the revenue recognition of goods
or services related to the assets; however, if the amortization period of cost of obtaining the contract
does not exceed one year, the Company will include it in the current profit or loss when it occurs.
If the carrying value of the assets related to the contract cost is higher than the difference between
the following two items, the Company will make provision for impairment of the excess part and
recognize it as an asset impairment loss:
(1) the remaining consideration expected to be obtained due to the transfer of goods or services
related to the assets; and
(2) the costs expected to be incurred due to the transfer of the related goods or services.
If the depreciation factors in the previous period change later, causing the aforementioned
difference to be higher than the carrying value of the assets, the Company will reverse the
previously-made provision for impairment and include it in the current profit or loss, but the carrying
value of the assets after the reversal cannot exceed the carrying value of the assets at the date of reversal
under the assumption that no provision is made for the impairment.
36. Government subsidies
√ Applicable □ Not applicable
(1) Types
Notes to financial statements Page 119
Annual Report 2023
Government subsidies are monetary or non-monetary assets obtained by the Company from the
government free of charge. They are divided into government subsidies related to assets and government
subsidies related to income.
Government subsidies related to assets refer to government subsidies obtained by the Company that
are used to purchase or construct or otherwise form long-term assets. Government subsidies related to
income refer to the government subsidies other than government subsidies related to assets.
The specific standards for the Company to classify government subsidies into government subsidies
related to assets are as follows:
If obtained subsidies are used to purchase, construct or otherwise form fixed assets, intangible
assets and other long-term assets as expressly stipulated in government documents, then such subsidies
are deemed as asset-related government subsidies.
The specific standards for the Company to classify government subsidies into income-related
government subsidies are as follows:
If the government subsidies (excluding asset-related subsidies) are used to compensate relevant
costs or losses of the Company that have been already incurred or to be incurred in subsequent periods,
then such subsidies are deemed as income-related government subsidies.
Where there is no express regulation on the object of subsidies in government documents, then the
Company will classify the government subsidies as assets-related or income-related depending on the
specific purpose that the subsidies are used for.
(2) Timing of recognition
Government subsidies are recognized when the Company can meet the conditions attached and can
receive them.
(3) Accounting treatment
Government subsidies related to assets shall offset the carrying amount of relevant assets or be
recognized as deferred income. If it is recognized as deferred income, it shall be included in the current
profit and loss in a reasonable and systematic way within the useful life of the relevant assets (if it is
related to the daily activities of the Company, it shall be included in other income; otherwise, it shall be
included in the non-operating income);
Government subsidies related to income that are used for compensation for the relevant costs or
losses of the Company in subsequent periods are recognized as deferred income and are included in the
current profit or loss in the period in which the relevant costs, expenses or losses are recognized (if they
are related to the daily activities of the Company, they shall be included in other income; otherwise, they
shall be included in the non-operating income) or offset the relevant costs or losses; Government
subsidies related to income that are used for compensation for the relevant costs or losses that the
Company has already incurred shall be directly included in the current profit or loss (if they are related
to the daily activities of the Company, they shall be included in other income; otherwise, they shall be
included in the non-operating income) or offset the relevant costs or losses.
The Company's policy-based concessional loans are classified into the following two conditions
and are accounted for respectively:
① If the lending bank provides loans to the Company at a policy-based preferential interest rate
after the Ministry of Finance allocates the interest-grant funds to the lending bank, the actual borrowing
amount received is recognized as the entry value of the borrowing and the relevant borrowing expenses
are measured in accordance with the principal amount of the borrowing and policy-based preferential
interest rate.
② When the government directly distributes the interest-grant funds to the Company, the
corresponding discount will offset the relevant borrowing costs.
37. Deferred income tax assets and liabilities
√ Applicable □ Not applicable
Income taxes include current income tax and deferred income tax. Except for income tax arising
from business combination and transactions or events that are directly included in owners' equity
(including other comprehensive income), the Company includes current income tax and deferred income
tax in the current profit or loss.
Notes to financial statements Page 120
Annual Report 2023
Deferred income tax assets and deferred income tax liabilities are calculated and recognized based
on the difference (temporary difference) between the tax base of assets and liabilities and their carrying
value.
Deferred tax assets are recognized to the extent that it is probable that future taxable profits will be
available against which deductible temporary differences can be offset. For deductible losses and tax
credits that can be reversed in the future period, deferred tax assets shall be recognized to the extent that
it is probable that taxable profit will be available in the future to offset the deductible losses and tax
credits.
Save as the exceptions, deferred tax liabilities shall be recognized for the taxable temporary
difference.
The exceptions for not recognizing deferred tax assets and liabilities include:
the initial recognition of the goodwill;
other transactions or matters other than enterprise merger in which neither profit nor taxable
income (or deductible loss) will be affected when transactions occur, and the initial recognition of assets
and liabilities does not result in taxable temporary differences and deductible temporary differences of
equal amount
Deferred income tax liabilities are recognized for all taxable temporary differences arising from the
investments in subsidiaries, joint ventures and associates, except to the extent that both of the following
conditions are satisfied: the Company is able to control the timing of the reversal of the temporary
differences; and it is likely that the temporary difference will not reverse in the foreseeable future.
Deferred income tax assets are recognized for all deductible temporary differences associated with
investments in subsidiaries, joint ventures and associates if all of the following conditions are satisfied:
It is likely that the deductible temporary difference will reverse in the foreseeable future and it is likely
that taxable profit in the future will be available against which the deductible temporary difference can
be offset.
At the balance sheet date, deferred income tax assets and liabilities are measured at tax rates
expected to be applied to the period when the assets are recovered or the liabilities are settled according
to the tax law.
At the balance sheet date, the Company reviews the carrying value of deferred income tax assets.
The carrying value of the deferred income tax assets are reduced if it is unlikely to obtain sufficient
taxable income to offset the benefit of the deferred income tax assets in the future. When it is likely that
sufficient taxable income will be available, the amount of write-down is reversed.
38. Lease
√ Applicable □ Not applicable
A lease is a contract whereby the lessor conveys to the lessee the right to use an asset in exchange
for consideration. On the commencement date of the contract, the Company assesses whether the
contract is or contains a lease. A contract is, or contains, a lease if one party to the contract gives the
right to control the use of an identified asset or identified assets for a period of time in exchange for
consideration.
If the contract contains multiple separate leases simultaneously, the Company will split the contract
and conduct separate accounting treatment for each separate lease. If the contract contains lease
components and non-lease components simultaneously, the lessee and the lessor will split the lease
components and the non-lease components.
Judgemental basis and accounting treatment of short-term leases and leases of low-value assets for
which a simplified treatment is adopted as the lessee
√ Applicable □ Not applicable
The Company as the lessee
(1) Right-of-use assets
At the commencement date of the lease term, the Company recognizes right-of-use assets for leases
other than short-term leases and low-value asset leases. Right-of-use assets are initially measured at cost.
The cost comprises:
the amount of the initial measurement of the lease liability;
any lease payments made at or before the commencement date of the lease term, less any lease
incentives received;
Notes to financial statements Page 121
Annual Report 2023
any initial direct costs incurred by the Company; and
an estimate of costs to be incurred by the Company in dismantling and removing the leased asset,
restoring the site on which it is located or restoring the leased asset to the condition required by the
terms and conditions of the lease, unless those costs are incurred to produce inventories.
The Company subsequently adopts the straight-line method to depreciate the right-of-use assets. If
it can be reasonably determined that the ownership of the leased asset can be acquired upon the expiry of
the lease term, depreciation will be prepared during the remaining useful life of the leased asset;
otherwise, depreciation will be prepared during the lease term or the remaining useful life of the leased
asset whichever is shorter.
The Company determines whether the right-of-use asset has been impaired in accordance with the
principles described in Note "V (27) Impairment of long-term assets", and performs accounting
treatment for the identified impairment losses.
(2) Lease liabilities
At the commencement date of the lease term, the Company recognizes lease liabilities for leases
other than short-term leases and low-value asset leases. Lease liabilities are initially measured at the
present value of the lease payments that are not paid. Lease payments comprise:
fixed payments (including substantial fixed payments), less any lease incentives received;
variable lease payments that depend on an index or a rate;
amounts expected to be payable by the lessee under residual value guarantees provided by the
Company;
the exercise price of a purchase option if the Company is reasonably certain to exercise that option;
and
Payments for exercising an option to terminate the lease if the lease term reflects the lessee
exercising an option to terminate the lease.
The Company uses the interest rate implicit in lease as the discount rate, but if the interest rate
implicit in lease cannot be reasonably determined, the Company's incremental borrowing rate is used as
the discount rate.
The Company calculates the interest expense of the lease liability in each period of the lease term
according to the fixed periodic interest rate, and includes it in the current profit and loss or the related
asset costs.
Variable lease payments excluded in the measurement of lease liabilities are included in the current
profit and loss or the related asset costs when they are actually incurred.
After the commencement date of the lease term, the Company re-measures the lease liabilities and
adjusts the corresponding right-of-use assets under the following circumstances. If the carrying amount
of the right-of-use assets is reduced to zero, but the lease liabilities still need to be further reduced, the
difference is included in the current profit and loss:
when there is a change in the assessment result of an option to purchase, renew or terminate the
lease, or the actual exercise of the aforementioned options is inconsistent with the original assessment
result, the Company remeasures the lease liabilities at the present value calculated according to the
changed lease payments and the revised discount rate; and
When there is a change in the substantial fixed payments, a change in the amounts expected to be
payable under a residual value guarantee, or a change in an index or a rate used to determine the lease
payments, the Company remeasures the lease liabilities at the present value calculated according to the
changed lease payments and the unchanged discount rate. However, the present value is calculated
according to the revised discount rate if the change in lease payments is caused by a change in floating
interest rates.
(3) Short-term leases and low-value asset leases
The Company chooses not to recognize right-of-use assets and lease liabilities for short-term leases
and low-value asset leases, and includes relevant lease payments in the current profit and loss or related
asset costs over the lease term on straight-line basis. A short-term lease is a lease that, at the
commencement date, has a lease term of 12 months or less and does not contain a purchase option. A
low-value asset lease is a lease with a lower value when a single leased asset is a brand-new asset. If the
Company subleases or expects to sublease a leased asset, the original lease is not a low-value asset lease.
(4) Lease modifications
Notes to financial statements Page 122
Annual Report 2023
The Company accounts for a lease modification as a separate lease if the following conditions are
satisfied simultaneously:
the lease modification increases the lease scope by adding the right to use one or more lease assets;
and
the consideration for the lease increases by an amount commensurate with the stand-alone price
for the increase in scope and any appropriate adjustments to that stand-alone price to reflect the
circumstances of the particular contract.
When a lease modification is not treated as a separate lease, at the effective date of the lease
modification, the Company re-allocates the consideration of the contract after the change, re-determines
the lease term, and remeasures the lease liability at the present value calculated according to the changed
lease payments and the revised discount rate.
When a lease modification decreases the lease scope or shortens the lease term, the Company
reduces the carrying value of the right-of-use asset and includes the relevant gain or loss resulting from
partial of full termination of the lease in the current profit and loss. When other lease modifications
result in re-measurement of the lease liability, the Company adjusts the carrying value of the right-of-use
asset accordingly.
(5) Sale and leaseback
The Company assesses and determines whether the transfer of the asset in the sale and leaseback
transactions is a sale according to Note "V (34) Income".
When the transfer of the asset in the sale and leaseback transactions is a sale, the Company as the
lessor measures the right-of-use asset arising from the sale and leaseback at the proportion of the
previous carrying amount of the asset that relates to the right of use retained through leaseback, and
recognises the relevant gain or loss at the amount that relates to the rights transferred to the lessor.
When the transfer of the asset in the sale and leaseback transactions is not a sale, the Company as
the lessor continues to recognize the transferred assets and also recognizes a financial liability equal to
the transfer income. Details of accounting treatment of financial liabilities are set out in Note "V (11)
Financial Instruments".
Criteria for classification and accounting treatment of leases as the lessor
√ Applicable □ Not applicable
The Company as the lessor
At the commencement date of the lease term, the Company classifies lease into finance lease and
operating lease. Finance lease refers to a lease that has transferred in substance all the risks and rewards
related to the ownership of an asset, regardless of whether the ownership is ultimately transferred.
Operating lease refers to a lease other than a finance lease. When the Company acts as a sublease lessor,
it classifies the sublease based on the right-of-use asset arising from the original lease.
(1) Accounting treatment of operating leases
Lease receipts from operating leases are recognized as rental income over the lease term on
straight-line basis. The Company capitalizes the initial direct expenses incurred in relation to operating
leases, and amortizes and includes them in the current profit and loss on the same basis as the rental
income is recognized during the lease term. Variable lease payments excluded in lease receipts are
included in the current profit and loss when they are actually incurred. In case of any operating lease
modification, the Company will account for it as a new lease from the effective date of the modification,
and regard the lease advance or lease receivable related to the lease before the modification as the receipt
from the new lease.
(2) Accounting treatment of finance leases
At the commencement of the lease, the Company recognizes a finance lease receivable for a finance
lease, and derecognizes finance lease assets. At the initial measurement of the finance lease receivable,
the Company regards the net investment in the lease as the entry value of the finance lease receivable.
Net investment in the lease is the sum of the following items discounted at the interest rate implicit in
lease: any unguaranteed residual value; and any lease receipt which is received at the commencement of
the lease.
Notes to financial statements Page 123
Annual Report 2023
The Company calculates and recognizes the interest income over the lease term at the fixed
periodic interest rate. Derecognition and impairment of finance lease receivables are subject to the
accounting treatment in accordance with Note "V (11) Financial Instruments".
Variable lease payments excluded in net investment in the lease are included in measurement the
current profit and loss when they are actually incurred.
The Company accounts for a finance lease modification as a separate lease if the following
conditions are satisfied simultaneously:
the modification increases the lease scope by adding the right to use one or more lease assets; and
the consideration for the lease increases by an amount commensurate with the stand-alone price
for the increase in scope and any appropriate adjustments to that stand-alone price to reflect the
circumstances of the particular contract.
When a finance lease modification is not treated as a separate lease, the Company accounts for the
modified lease as follows:
if the lease would have been classified as an operating lease had the modification been in effect at
the commencement date, the Company accounts for the lease modification as a new lease from the
effective date of the modification, and measures the carrying value of the lease asset as the net
investment in the lease immediately before the effective date of the lease modification.
if the lease would have been classified as an finance lease had the modification been in effect at
the commencement date, the Company accounts for the lease modification according to the policies for
modification or renegotiation of contracts in Note "V (11) Financial Instruments".
(3) Sale and leaseback transactions
The Company assesses and determines whether the transfer of the asset in the sale and leaseback
transactions is a sale according to Note "V (34) Income".
When the transfer of the asset in the sale and leaseback transactions is a sale, the Company as the
lessor accounts for the purchase of the asset, and accounts for the lease of the asset in accordance with
the aforementioned policy; When the transfer of the asset in the sale and leaseback transactions is not a
sale, the Company as the lessor does not recognize the transferred asset, but recognizes a financial asset
equal to the transfer income. Details of accounting treatment of financial assets are set out in Note "V
(11) Financial Instruments".
39. Other significant accounting policies and accounting estimates
□ Applicable √ Not applicable
40. 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 the opening items and amounts of the financial statements for the year of the
first implementation due to the first implementation of new accounting standards, standard
interpretations, etc. from 2023
□ Applicable √ Not applicable
41. Others
√ Applicable □ Not applicable
Hedge accounting
(1) Classification of hedging
① Fair value hedge is a hedge of the exposure to changes in fair value of a recognized asset or
liability or an unrecognized firm commitment (except for foreign exchange risk).
Notes to financial statements Page 124
Annual Report 2023
② Cash flow hedge is a hedge of the exposure to changes in cash flows. Such changes in cash
flows mainly come from a specific type of risk related to a recognized asset or liability or an expected
transaction that is likely to occur, or the foreign exchange risk included in an unrecognized firm
commitment.
③ Hedge of net investment in an overseas operation is a hedge of the foreign exchange exposure
arising from net investment in an overseas operation. Net investment in an overseas operation refers to
an enterprise's equity proportion in the net assets in an overseas operation.
(2) Designation of hedging relationship and confirmation of hedging effectiveness
At the commencement of the hedging relationship, the Company shall specify the hedging
relationship formally and prepare a formal written document on the hedging relationship, risk
management objectives and the strategies of hedging. This document shall at least specify the contents
and number of the hedging instruments, the nature and number of the hedged items, the nature of the
hedged risk, the type of hedge and the evaluation of the Company on the effectiveness of the hedging
instruments. Hedging effectiveness refers to the extent that the changes in the fair value or cash flow of a
hedging instrument may offset the changes resulted from the hedging risks in the fair value or cash flow
of a hedged item.
The Company shall continuously evaluate the hedging effectiveness to determine whether the
hedging meets the requirements on effectiveness for using hedging accounting within the accounting
period when the hedging relationship is specified. If the hedging fails to meet the requirements, the use
of hedging relationship shall be terminated.
The use of hedge accounting shall meet the following requirements for the hedging effectiveness:
① There is an economic relationship between the hedged item and the hedging instrument.
② In the value change caused by the economic relationship between the hedged item and the
hedging instrument, the influence of credit risk is not dominant.
③ An appropriate hedging ratio is adopted, and this ratio will not form an imbalance in the relative
weight of the hedged item and the hedging instrument, thereby generating accounting results that are
inconsistent with the hedge accounting objectives. If the hedging ratio is no longer appropriate, but the
hedging risk management objectives have not changed, the number of hedged items or hedging
instruments shall be adjusted so that the hedging ratio meets the requirements on effectiveness again.
(3) Accounting treatment method of hedge
① Fair value hedge
Changes in the fair value of hedging derivatives are included in the current profit and loss. Changes
in the fair value of a hedged item due to hedging risk are included in the current profit and loss, while
adjusting the book value of the hedged item.
For fair value hedges related to financial instruments measured at amortized cost, adjustments to
the carrying value of the hedged item are amortized in the remaining period between the adjustment date
and the maturity date and are included in the current profit and loss. Amortization carried out in
accordance with the effective interest rate method can begin immediately after the adjustment of the
carrying value, and shall not be later than the adjustment made due to the changes in the fair values
caused by the hedging risk after the hedged item is terminated.
If the hedged item is derecognized, the un-amortized fair value is recognized as current profit or
loss.
If the hedged item is a unrecognized firm commitment, the accumulated changes in the fair value of
the firm commitment caused due to the hedged risk is recognized as an asset or liability, and the related
gains or losses are included in the current profit and loss. Changes in the fair value of hedging
instruments are also included in the current profit and loss.
② Cash flow hedge
The portion of the gains or losses from hedging instruments, which belongs to the effective hedge,
shall be directly recognized as other comprehensive income, and the portion which belongs to the
ineffective hedge shall be included in the current profit and loss.
If the hedged transaction affects the current profit or loss, for example, when the hedged financial
income or financial expense is confirmed or the expected sale occurs, the amount recognized in other
comprehensive income will be transferred to the current profit and loss. If the hedged item is the cost of
a non-financial asset or liability, the amount originally recognized in other comprehensive income is
Notes to financial statements Page 125
Annual Report 2023
transferred out and included in the initial recognition amount of the non-financial asset or liability (or the
amount originally recognized in other comprehensive income is transferred out in the same period in
which the non-financial asset or liability affects the profit and loss, and included in the current profit and
loss).
If the expected transaction or firm commitment is not expected to occur, the cumulative gains or
losses of hedging instruments previously included in other comprehensive income are transferred out
and included in the current profit or loss. If the hedging instrument expires, is sold, terminated or
exercised (but has not been replaced or extended), or the designation of the hedging relationship is
revoked, the amount previously included in other comprehensive income will not be transferred out until
the expected transaction or firm commitment affects the current profit and loss.
③ Hedge of net investment in an overseas operation
Hedge of net investment in an overseas operation, including hedge of monetary items as part of net
investment, is handled similarly to cash flow hedge. The portion of the gains or losses from hedging
instruments, which is recognized as effective hedge, shall be recorded in other comprehensive income,
and the portion which is recognized as ineffective hedge shall be included in the current profit and loss.
When disposing of overseas operations, any accumulated gains or losses included in other
comprehensive income are transferred out and included in the current profit or loss.
Repurchase of the Company's shares
The Company manages the repurchased shares as treasury shares before cancellation or transfer,
and transfers all the expenses for the repurchase to the costs of treasury shares. The consideration and
transaction costs paid for the repurchase reduce the owner's equity, and no gain or loss is recognized
when the Company's shares are repurchased, transferred or cancelled.
(1) Where the Company's shares are acquired for reasons such as reduction of registered capital or
reward to employees, they will be treated as treasury shares based on the amount actually paid for the
repurchase and also be registered for future reference. If the repurchased shares are cancelled, the
difference between the total nominal value of the shares calculated based on the nominal value and
number of the cancelled shares and the amount actually paid for the repurchase will be offset against the
capital reserve, and if the capital reserve is insufficient to offset, the remaining difference will be offset
against the retained earnings. If the repurchased shares are awarded to employees of the Company as
equity-settled share-based payment, when receiving the price from the exercise by the employees of the
option to purchase the Company's shares, the Company resells and delivers the cost of employees'
treasury shares and the accumulated amount of capital reserves (other capital reserves) during the
waiting period, and adjusts the capital reserve (share premium) based on the difference between them.
(2) For the shares repurchased in accordance with the equity incentive plan, the Company will
repurchase and cancel the restricted stocks that fail to meet the unlocking conditions. For the stocks
required to be repurchased due to failure to unlocking conditions for restricted stocks, the Company
debits them to "Other payables - Repurchase obligations of restricted stocks" and other subjects and
credits them to "Bank deposits" and other subjects. At the same time, the Company debits the amount of
share capital corresponding to the number of cancelled restricted stocks in the subject of "Share capital",
credits the carrying value of the treasury stocks corresponding to the number of cancelled restricted
stocks in the subject of "Treasury shares", and debits the difference of them to the subject of "Capital
Reserve - Share premium".
Debt reorganisation
(1) The Company as the creditor
The Company terminates the recognition of claims when the contractual right to receive the cash
flow from claims terminates. In the event of debt reorganisation by means of extinguishing debts with
assets or converting debts into equity instruments, the Company recognises the corresponding assets
when they meet the definition and the conditions for recognition.
In the event of debt reorganisation by means of extinguishing debts with assets, the Company
measures the transferred non-financial assets at cost upon initial recognition. The cost of inventory
includes the fair value of waived claims and other costs directly attributable to the asset such as taxes,
transportation and handling fees, insurance premiums and other costs incurred in bringing the asset to its
current position and condition. The cost of an investment in an associated enterprise or joint venture
includes other costs such as the fair value of waived claims and taxes directly attributable to the asset.
The cost of an investment property includes the fair value of waived claims and other costs, such as
Notes to financial statements Page 126
Annual Report 2023
taxes, directly attributable to the asset. The cost of a fixed asset includes the fair value of waived claims
and other costs directly attributable to the asset such as taxes, transportation, handling and installation
fees, service fees to professionals and other costs incurred in bringing the asset to the predetermined
state for use. The cost of a biological asset includes the fair value of waived claims and other costs, such
as taxes, directly attributable to the asset. The cost of an intangible asset includes the fair value of
waived claims and other costs, such as taxes, incurred in bringing the asset to its intended use. Where
debt reorganisation by converting debts into equity instruments causes creditors to convert their claims
into equity investments in an associated enterprise or joint venture, the Company measures the initial
investment cost at the fair value of waived claims and other costs, such as taxes, directly attributable to
the asset. The difference between the fair value of waived claims and the carrying amount is included in
the profit or loss for the current period.
For debt reorganisation by means of modifying other terms, the Company recognises and measures
reorganised claims according to Note "V (11) Financial Instruments".
For debt reorganisation by means of extinguishing debts with multiple assets or by multiple means,
the Company first recognises and measures transferred financial assets and reorganised claims according
to Note "V (11) Financial Instruments", and then distributes the net fair value of waived claims after
deducting the recognised amounts of transferred financial assets and reorganised claims according to the
proportion of the fair value of the assets other than the transferred financial assets and, on that basis,
separately determines the cost of each asset according to the aforementioned method. The difference
between the fair value of waived claims and the carrying amount is included in the profit or loss for the
current period.
(2) The Company as the debtor
The Company terminates the recognition of debts when its current obligation for debts is
discharged.
In the event of debt reorganisation by means of extinguishing debts with assets, the Company
terminates recognition when the corresponding assets and the debts to be extinguished meet the
conditions for termination of recognition, and the difference between the carrying amount of the debts to
be extinguished and that of transferred assets is included in the profit or loss for the current period.
In the event of debt reorganisation by means of converting debts into equity instruments, the
Company terminates recognition when the debts to be extinguished meet the conditions for termination
of recognition. Upon initial recognition of equity instruments, the Company measures at the fair value of
the equity instruments. If the fair value of equity instruments cannot be reliably measured, the Company
measures at the fair value of the debts to be extinguished. The difference between the carrying amount of
the debts to be extinguished and the recognised amounts of equity instruments shall be included in the
profit or loss for the current period.
For debt reorganisation by means of modifying other terms, the Company recognises and measures
reorganised debts according to Note "V (11) Financial Instruments".
For debt reorganisation by means of extinguishing debts with multiple assets or by multiple means,
the Company recognises and measures equity instruments and reorganised debts according to the
aforementioned methods, and includes the difference between the carrying amount of the debts to be
extinguished and the sum of the carrying amount of transferred assets and the recognised amounts of
equity instruments and debts to be extinguished in the profit or loss for the current period.
Segment reporting
The Company determines the operating segment based on the internal organizational structure,
management requirements, and internal reporting system, and determines the reporting segment based
on the operating segment and discloses segment information.
Operating segment refers to the component of the Company that meets the following conditions
simultaneously: (1) the component can generate income and incur expenses in daily activities; (2) the
management of the Company can regularly evaluate the operating results of the component to decide to
allocate resources to it and evaluate its performance; and (3) the Company can obtain relevant
accounting information such as the financial status, operating results and cash flow of the component. If
two or more operating segments have similar economic characteristics and meet certain conditions, they
can be combined into one operating segment.
Notes to financial statements Page 127
Annual Report 2023
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 the tax
Value added tax ("VAT") 13%, 9%, 6%, 5%
law. The difference between the output tax and the input tax
which is allowed to be deductible in the current period is
the payable VAT
Consumption tax
Business tax
Urban maintenance and Calculated and paid according to the actually-paid VAT
7%, 5%, 1%
construction tax and consumption tax
15%, 20%, 25%, 22%,
Enterprise income tax Calculated and paid according to the taxable income 31%, 17%, 16.5%, 24%,
21%
Particulars on disclosure of taxpayers with different enterprise income tax rates
√ Applicable □ Not applicable
Income tax rate
Name of taxpayer
(%)
Shanghai M&G Stationery Inc. 15
Shanghai M&G Zhenmei Stationery Co., Ltd.（上海晨光珍美文具有限公司） 25
Shanghai M&G Colipu Office Supplies Co., Ltd. 25
Lianyungang Colipu Office Supplies Co., Ltd.（连云港市科力普办公用品有限公司） 20
Shenyang M&G Colipu Office Supplies Co., Ltd.（沈阳晨光科力普办公用品有限公司） 20
Shanghai M&G Stationery & Gift Co., Ltd.（上海晨光文具礼品有限公司） 25
Shanghai M&G Stationery Sales Co., Ltd.（上海晨光文具销售有限公司） 25
Guangzhou M&G Stationery&Gifts Sales Co., Ltd.（广州晨光文具礼品销售有限公司） 25
Yiwu Chenxing Stationery Co., Ltd.（义乌市晨兴文具用品有限公司） 25
Harbin M&G Sanmei Stationery Co., Ltd.（哈尔滨晨光三美文具有限公司） 25
Zhengzhou M&G Stationery&Gifts Co., Ltd.（郑州晨光文具礼品有限责任公司） 25
M&G Life Enterprise Management Co., Ltd.（晨光生活馆企业管理有限公司） 25
Shanghai M&G Jiamei Stationery Co., Ltd.（上海晨光佳美文具有限公司） 20
Jiangsu M&G Life Enterprise Management Co., Ltd.（江苏晨光生活馆企业管理有限公司） 20
Zhejiang New M&G Life Enterprise Management Co., Ltd.（浙江新晨光生活馆企业管理有限公司） 20
Jiumu M&G Store Enterprise Management Co., Ltd.（九木杂物社企业管理有限公司） 25
Shanghai M&G Information Technology Co., Ltd.（上海晨光信息科技有限公司） 25
Shenzhen Erya Creative and Cultural Development Co., Ltd.（深圳尔雅文化创意发展有限公司） 25
Shanghai M&G Office Stationery Co., Ltd. 25
Hangzhou Sanmei M&G Stationery Co., Ltd.（杭州三美晨光文具有限公司） 25
Shanghai Qizhihaowan Culture and Creativity Co., Ltd.（上海奇只好玩文化创意有限公司） 20
Shanghai Chenxun Enterprise Management Co., Ltd.（上海晨讯企业管理有限公司） 25
Shanghai Colipu Information Technology Co., Ltd.（上海科力普信息科技有限公司） 25
Axus Stationery (Shanghai) Company Ltd. 15
Jiangsu Marco Pen Co., Ltd.（江苏马可笔业有限公司） 25
Changchun Macro Stationery Co., Ltd.（长春马可文教用品有限公司） 25
Yili Senlai Wood Co., Ltd.（伊犁森徕木业有限公司） 25
Axus Stationery (Hong Kong) Company Ltd. 16.5
Notes to financial statements Page 128
Annual Report 2023
International stationery company 20
Shanghai Meixin Stationery Co., Ltd. (上海美新文具有限公司) 25
SHANGHAI M&G STATIONERY (SINGAPORE) PTE.LTD. 17
M&G Jiumu Enterprise Management (Beijing) Co., Ltd. (晨光九木企业管理（北京）有限公司) 20
Back to School Holding AS 22
Beckmann AS 22
Beckmann Norway GmbH (Germany) 31
Beckmann Norway Inc 21
Beckmann Norway GmbH (Austria) 24
Zhejiang Benwei Technology Co., Ltd. (浙江本味科技有限公司) 20
Guangdong South China M&G Stationery Co., Ltd. (广东华南晨光文教用品有限公司) 25
Hubei Chaoxin Real Estate Co., Ltd. (湖北潮信置业有限公司) 25
Shanghai M&G Colipu Technology Development Co., Ltd. (上海晨光科力普科技发展有限公司) 20
Shanghai Yichengxiang E-commerce Co., Ltd. (上海益诚祥电子商务有限公司) 20
2. Tax preference
√ Applicable □ Not applicable
On 15 November 2022, the Company obtained the High- and New-tech Enterprise Certificate
(certificate number GR202231001425, valid for 3 years) issued jointly by Shanghai Municipal Science
and Technology Commission, Shanghai Finance Bureau and Shanghai Municipal Tax Service, State
Taxation Administration.
On 24 September, 2021, the subsidiary Axus Stationery (Shanghai) Company Ltd. ("Axus
Stationery") obtained the High- and New-tech Enterprise Certificate (certificate number
GR201831003575, valid for 3 years) issued jointly by Shanghai Municipal Science and Technology
Commission, Shanghai Finance Bureau and Shanghai Municipal Tax Service, State Taxation
Administration.
The Company and the subsidiary Axus Stationery paid the enterprise income tax at the rate of 15%
this year.
According to the Notice of the Ministry of Finance and the State Taxation Administration on the
Preferential Income Tax Policies for Micro and Small Enterprises and Individual Industrial and
Commercial Households (Notice No. 6 of the Ministry of Finance and the State Taxation Administration
in 2023), for the part of small low-profit enterprises' annual taxable income not exceeding
RMB1,000,000, the enterprise income tax at 20% shall apply based on 25% of the taxable income, with
an effective period from 1 January 2023 to 31 December 2024. According to the Notice on Implementing
Further Income Tax Preference Policies for Micro and Small Enterprises (Notice No. 13 of the Ministry
of Finance and the State Taxation Administration in 2022), for the part of small low-profit enterprises'
annual taxable income between RMB1,000,000 and RMB3,000,000, the enterprise income tax at 20%
shall apply based on 25% of the taxable income, with an effective period from 1 January 2022 to 31
December 2024. Pursuant to the Announcement on Further Supporting Small and Micro Enterprises and
Individual Industrial and Commercial Businesses through Relevant Tax and Fee Policies
(Announcement No. 12 of 2023 of the Ministry of Finance and the State Taxation Administration). Tax
on natural resources (excluding tax on water resources), urban maintenance and construction tax, real
estate tax, urban land use tax, stamp tax (excluding stamp tax on securities transactions), agriculture land
tax, educational surcharge and local education surcharge on small-scale VAT taxpayers, small-sized
low-profit enterprises and individual industrial and commercial households are deducted by half from 1
January 2023 to 31 December 2027. The enterprise income tax at 20% shall apply based on 25% of the
taxable income for small-sized low-profit enterprises, with the effective period extended till 31
December 2027. Subsidiaries M&G Jiumu Enterprise Management (Beijing) Co., Ltd. (晨光九木企业
管理（北京）有限公司), Zhejiang New M&G Life Enterprise Management Co., Ltd.（浙江新晨光生
活馆企业管理有限公司）, Jiangsu M&G Life Enterprise Management Co., Ltd.（江苏晨光生活馆企
业管理有限公司）, Shanghai Qizhihaowan Culture and Creativity Co., Ltd.（上海奇只好玩文化创意
有限公司）, Lianyungang Colipu Office Supplies Co., Ltd.（连云港市科力普办公用品有限公司）,
Shenyang M&G Colipu Office Supplies Co., Ltd.（沈阳晨光科力普办公用品有限公司）, Shanghai
M&G Colipu Technology Development Co., Ltd. (上海晨光科力普科技发展有限公司), Zhejiang
Notes to financial statements Page 129
Annual Report 2023
Benwei Technology Co., Ltd. (浙江本味科技有限公司), Shanghai M&G Jiamei Stationery Co., Ltd.
（上海晨光佳美文具有限公司） and Shanghai Yichengxiang E-commerce Co., Ltd. (上海益诚祥电子
商务有限公司) meet the tax declaration requirements for micro and small enterprises, and declare the
enterprise income tax at the tax rate of 20%.
In accordance with the Notice of the Ministry of Finance and the State Administration of Taxation
on Value-Added Tax Policies for Software Products (Cai Shui [2011] No. 100), the subsidiary Shanghai
Colipu Information Technology Co., Ltd. (Hereinafter referred to as "Colipu Information Technology")
was granted the tax incentive regarding the refund upon payment of VAT by Shanghai Xuhui District
Tax Service, State Taxation Administration on software products on 9 June 2020, with a valid period
from 1 April 2020 to 31 March 2070.
According to the Notice of the Ministry of Finance and the State Administration of Taxation on
Enterprise Income Tax Policies for Further Encouraging the Development of Software Industry and
Integrated Circuit Industry (Cai Shui [2012] No.27), an eligible software company shall be exempted
from enterprise income tax for the first 2 years as of the first profit-making year and shall pay enterprise
income tax at half of the statutory tax rate of 25% for the third to the fifth years until the expiry of the
preferential period. As such, Colipu Information Technology was entitled to a preferential corporate
income tax rate of 12.5% for the current year.
3. Others
□ Applicable √ Not applicable
VII. Notes to the Items of Consolidated Financial Statements
1. Cash and equivalents
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Cash on hand 612,487.27 764,880.86
Cash at bank 5,144,131,897.40 3,249,065,541.16
Other cash and equivalents 94,377,132.41 113,258,755.22
Deposits in finance company
Total 5,239,121,517.08 3,363,089,177.24
Including: Total cash
67,735,912.35 10,480,461.66
deposited outside China
Other descriptions
No
2. Held-for-trading financial assets
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Reasons and basis for
Item Closing balance Opening balance
designation
Financial assets at fair value
1,402,518,595.12 1,627,645,879.64 /
through profit or loss
Including:
Debt instrument
/
investment
Equity instrument
/
investment
Derivative financial
/
assets
Others 1,402,518,595.12 1,627,645,879.64 /
Financial assets designated at
fair value through profit or loss
Notes to financial statements Page 130
Annual Report 2023
Including:
Debt instrument
investment
Others
Total 1,402,518,595.12 1,627,645,879.64 /
Other descriptions:
√ Applicable □ Not applicable
Other bank wealth management products purchased for the Company.
3. Derivative financial assets
□ Applicable √ Not applicable
4. Bills receivable
(1). Bills receivable presented by category
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Finance company acceptance bills 31,549,469.04 34,345,789.16
Commercial acceptance bills 8,768,551.36 4,736,930.40
Less: Bad debt provisions of bills receivable -2,121,931.46 -1,621,970.36
Total 38,196,088.94 37,460,749.20
(2). Bills receivable pledged by the Company at the end of the period
□ Applicable √ Not applicable
(3). Bills receivable endorsed or discounted by the Company at the end of the period but not due
yet at the balance sheet date
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount derecognised at the Amount not derecognised at the
Item
end of the Period end of the period
Finance company acceptance bills 15,945,243.71
Commercial acceptance bills 2,706,627.49
Total 18,651,871.20
(4). Disclosure by accruing method for bad debt provisions
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Closing balance Opening balance
Carrying balance Bad debt provisions Carrying balance Bad debt provisions
Category Accruing Carrying Accruing Carrying
Percentage value Percentage value
Amount Amount percentage Amount Amount percentage
(%) (%)
(%) (%)
Bad debt
provisions
accrued
separately
Including:
Bad debt
provisions
accrued
40,318,020.40 100.00 2,121,931.46 5.26 38,196,088.94 39,082,719.56 100.00 1,621,970.36 4.15 37,460,749.20
according to
the
combination
Including:
Notes to financial statements Page 131
Annual Report 2023
Account age
40,318,020.40 100.00 2,121,931.46 5.26 38,196,088.94 39,082,719.56 100.00 1,621,970.36 4.15 37,460,749.20
analysis
Total 40,318,020.40 / 2,121,931.46 / 38,196,088.94 39,082,719.56 / 1,621,970.36 / 37,460,749.20
Bad debt provisions accrued separately:
□ Applicable √ Not applicable
Bad debt provisions accrued according to the combination:
√ Applicable □ Not applicable
Combination item: Account age analysis
Unit: Yuan Currency: RMB
Closing balance
Item
Bills receivable Bad debt provisions Accruing percentage (%)
Finance company
31,549,469.04 1,721,268.96 5.46
acceptance bills
Commercial
8,768,551.36 400,662.50 4.57
acceptance draft
Total 40,318,020.40 2,121,931.46
Notes to bad debt provisions accrued according to the combination
□ Applicable √ Not applicable
Bad debt provisions accrued according to the general model of expected credit losses
□ Applicable √ Not applicable
Basis of classification of stages and percentage of provision for bad debts
No
Notes to the significant changes in the book balance of bills receivable arising from changes in the
provision for losses in the current period:
□ Applicable √ Not applicable
(5). Particulars on bad debt provisions
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Change of the current period
Opening
Category Recovered Resold or Other Closing balance
balance Accrued
or reversed written-off changes
Finance
company 1,431,485.48 289,783.48 1,721,268.96
acceptance bills
Commercial
190,484.88 210,177.62 400,662.50
acceptance draft
Total 1,621,970.36 499,961.10 2,121,931.46
Significant bad debt provision amounts recovered or reversed in the current period:
□ Applicable √ Not applicable
Other descriptions:
No
(6). Particulars on notes receivable actually written-off in the current period
□ Applicable √ Not applicable
Including: Write-off of significant notes receivable:
□ Applicable √ Not applicable
Notes to financial statements Page 132
Annual Report 2023
Notes to the write-off of notes receivable:
□ Applicable √ Not applicable
Other descriptions
□ Applicable √ Not applicable
5. Accounts receivable
(1).Disclosure by account age
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Carrying balance at the end of the Carrying balance at the beginning
Account age
period of the period
Within one year
Including: Sub-item within one year
Within one year 3,596,158,530.17 2,982,697,246.23
Sub-total within one year 3,596,158,530.17 2,982,697,246.23
One to two years 47,189,044.02 24,648,697.52
Two to three years 9,916,131.28 4,137,539.06
Above three years 3,247,920.65 738,641.97
Three to four years
Four to five years
Above five years
Total 3,656,511,626.12 3,012,222,124.78
(2).Disclosure by accruing method for bad debt provisions
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Closing balance Opening balance
Carrying balance Bad debt provisions Carrying balance Bad debt provisions
Category Accruing Carrying Accruing Carrying
Percentage value Percentage value
Amount Amount percentage Amount Amount percentage
(%) (%)
(%) (%)
Bad debt
provisions
8,947,233.20 0.24 8,947,233.20 100.00 10,212,919.44 0.34 10,212,919.44 100.00
accrued
separately
Including:
Bad debt
provisions
accrued
3,647,564,392.92 99.76 60,094,587.62 1.65 3,587,469,805.30 3,002,009,205.34 99.66 45,358,620.38 1.51 2,956,650,584.96
according to
the
combination
Including:
Account
3,647,564,392.92 99.76 60,094,587.62 1.65 3,587,469,805.30 3,002,009,205.34 99.66 45,358,620.38 1.51 2,956,650,584.96
age analysis
Total 3,656,511,626.12 / 69,041,820.82 / 3,587,469,805.30 3,012,222,124.78 / 55,571,539.82 / 2,956,650,584.96
Bad debt provisions accrued separately:
□ Applicable √ Not applicable
Bad debt provisions accrued according to the combination:
√ Applicable □ Not applicable
Combination item: Account age analysis
Unit: Yuan Currency: RMB
Closing balance
Item
Accounts receivable Bad debt provisions Accruing percentage (%)
Account age analysis 3,647,564,392.92 60,094,587.62 1.65
Notes to financial statements Page 133
Annual Report 2023
Total 3,647,564,392.92 60,094,587.62
Description on bad debt provisions accrued according to the combination:
□ Applicable √ Not applicable
Bad debt provisions accrued according to the general model of expected credit losses
□ Applicable √ Not applicable
Basis of classification of stages and percentage of provision for bad debts
No
Notes to the significant changes in the book balance of accounts receivable arising from changes in the
provision for losses in the current period:
□ Applicable √ Not applicable
(3).Particulars on bad debt provisions
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Change of the current period
Opening Closing
Category Recovered Resold or Other
balance Accrued balance
or reversed written-off changes
Bad debt
provisions 10,212,919.44 4,422,654.97 3,232,256.86 2,456,084.35 8,947,233.20
accrued
separately
Account age 45,358,620.38 15,066,297.87 223,147.79 -107,182.84 60,094,587.62
analysis
Total 55,571,539.82 19,488,952.84 3,232,256.86 2,679,232.14 -107,182.84 69,041,820.82
Significant bad debt provision amounts recovered or reversed in the current period:
□ Applicable √ Not applicable
Other descriptions:
In the bad debt provision for the current year, there is an impact of RMB-37,211.83 due to the
exchange rate difference in the conversion of foreign currency financial statements, as well as a
reduction in the bad debt provision for the disposal of Luoyang M&G Stationery Sales Co., Ltd. (洛阳晨
光文具销售有限公司) during this period, amounting to RMB-69,971.01. The bad debt provision
recognized for the current year includes an amount of RMB3,232,256.86 recovered or reversed from the
provision for bad debts previously recognized, with the actual provision for bad debts being
RMB16,256,695.98.
(4).Particulars on 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 2,679,232.14
Writing-off of significant accounts receivable
□ Applicable √ Not applicable
Description on writing-off of accounts receivable:
□ Applicable √ Not applicable
(5).Particulars on top five accounts receivable and contract assets in terms of the balance at the
end of the period based on debtors
√ Applicable □ Not applicable
Notes to financial statements Page 134
Annual Report 2023
Unit: Yuan Currency: RMB
Percentage
(%) in the
Closing total Balance of bad
Closing balance of
Company balance of balance at debt provisions
Closing balance accounts receivable
name contract the end of at the end of the
and contract assets
assets the period period
of accounts
receivable
First 576,741,401.26 576,741,401.26 15.77 2,883,707.01
Second 509,888,643.62 509,888,643.62 13.94 2,932,584.75
Third 273,568,209.01 273,568,209.01 7.48 4,319,389.68
Fourth 122,110,762.99 122,110,762.99 3.34 985,158.44
Fifth 109,017,286.68 109,017,286.68 2.98 587,700.13
Total 1,591,326,303.56 1,591,326,303.56 43.51 11,708,540.01
Other descriptions
No
Other descriptions:
□ Applicable √ Not applicable
6. Contract assets
(1).Particulars on contract assets
□ Applicable √ Not applicable
(2).Amount of and reason for significant changes in carrying value during the Reporting Period
□ Applicable √ Not applicable
(3).Disclosure by accruing method for bad debt provisions
□ Applicable √ Not applicable
Bad debt provisions accrued separately:
□ Applicable √ Not applicable
Description on bad debt provisions accrued separately:
□ Applicable √ Not applicable
Bad debt provisions accrued according to the combination:
□ Applicable √ Not applicable
Bad debt provisions accrued according to the general model of expected credit losses
□ Applicable √ Not applicable
Basis of classification of stages and percentage of provision for bad debts
No
Notes to the significant changes in the book balance of contract assets arising from changes in the
provision for losses in the current period:
□ Applicable √ Not applicable
(4).Provision set aside for bad debts on contract assets in the current period
□ Applicable √ Not applicable
Notes to financial statements Page 135
Annual Report 2023
Significant bad debt provision amounts recovered or reversed in the current period:
□ Applicable √ Not applicable
Other descriptions:
No
(5).Contract assets written off in the current period
□ Applicable √ Not applicable
Including: Write-off of significant contract assets
□ Applicable √ Not applicable
Notes to write-off of contract assets:
□ Applicable √ Not applicable
Other descriptions:
□ Applicable √ Not applicable
7. Accounts receivable financing
(1). Classified presentation of accounts receivables financing
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Bills receivable 39,533,283.51 21,664,621.88
Factoring of accounts receivable
Accounts receivable
Total 39,533,283.51 21,664,621.88
(2). Accounts receivables financing pledged by the Company at the end of the period
□ Applicable √ Not applicable
(3). Accounts receivables financing endorsed or discounted by the Company at the end of the
period but not due yet at the balance sheet date
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount derecognised at the end Amount not derecognised at the
Item
of the period end of the period
Bank acceptance bills 14,783,368.02
Total 14,783,368.02
(4). Disclosure by accruing method for bad debt provisions
□ Applicable √ Not applicable
Bad debt provisions accrued separately:
□ Applicable √ Not applicable
Description on bad debt provisions accrued separately:
□ Applicable √ Not applicable
Bad debt provisions accrued according to the combination:
□ Applicable √ Not applicable
Bad debt provisions accrued according to the general model of expected credit losses
Notes to financial statements Page 136
Annual Report 2023
□ Applicable √ Not applicable
Basis of classification of stages and percentage of provision for bad debts
No
Notes to the significant changes in the book balance of accounts receivables financing arising from
changes in the provision for losses in the current period:
□ Applicable √ Not applicable
(5). Particulars on bad debt provisions
□ Applicable √ Not applicable
Significant bad debt provision amounts recovered or reversed in the current period:
□ Applicable √ Not applicable
Other descriptions:
No
(6). Particulars on accounts receivable financing actually written-off in the current period
□ Applicable √ Not applicable
Including: Significant write-off of accounts receivables financing
□ Applicable √ Not applicable
Notes on write-off:
□ Applicable √ Not applicable
(7). Changes in receivables financing during the current period and changes in fair value:
√ Applicable □ Not applicable
Accumulated losses
Balance at the Increased in the Derecognition of Other Closing
Item recognized in other
end of the year current period the current period changes balance
comprehensive income
Bills
21,664,621.88 112,506,318.82 94,637,657.19 39,533,283.51
receivable
(8). Other descriptions:
□ Applicable √ Not applicable
8. Prepayment
(1).Advance payment presented by account age
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Closing balance Opening balance
Account age
Amount Percentage (%) Amount Percentage (%)
Within one year 70,580,071.90 96.86 82,051,410.79 98.32
One to two years 1,811,662.07 2.49 1,336,396.27 1.60
Two to three years 470,500.86 0.65 64,438.50 0.08
Above three years
Total 72,862,234.83 100.00 83,452,245.56 100.00
Description on the reasons for failure to settle the advance payment with an account age over one year
and a significant amount:
No
Notes to financial statements Page 137
Annual Report 2023
(2).Particulars on top 5 advance payments in terms of the balance at the end of the period
according to the concentration of parties to which the advance payments are made
√ Applicable □ Not applicable
Percentage (%) in the total
Company name Closing balance balance at the end of the period of
advance payment
First 10,700,656.74 14.69
Second 5,413,218.48 7.43
Third 5,235,812.87 7.19
Fourth 3,467,663.89 4.76
Fifth 2,448,119.22 3.36
Total 27,265,471.20 37.43
Other descriptions
No
Other descriptions
□ Applicable √ Not applicable
9. Other receivables
Presented by item
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Interest receivable
Dividend receivable
Other receivables 226,419,933.52 208,957,374.58
Total 226,419,933.52 208,957,374.58
Other descriptions:
□ Applicable √ Not applicable
Interest receivable
(1). Classification of interest receivable
□ Applicable √ Not applicable
(2). Important overdue interest
□ Applicable √ Not applicable
(3). Disclosure by accruing method for bad debt provisions
□ Applicable √ Not applicable
Bad debt provisions accrued separately:
□ Applicable √ Not applicable
Description on bad debt provisions accrued separately:
□ Applicable √ Not applicable
Bad debt provisions accrued according to the combination:
□ Applicable √ Not applicable
Notes to financial statements Page 138
Annual Report 2023
(4). Bad debt provisions accrued according to the general model of expected credit losses
□ Applicable √ Not applicable
Basis of classification of stages and percentage of provision for bad debts
No
Notes to the significant changes in the book balance of interest receivable arising from changes in the
provision for losses in the current period:
□ Applicable √ Not applicable
(5). Particulars on bad debt provisions
□ Applicable √ Not applicable
Significant bad debt provision amounts recovered or reversed in the current period:
□ Applicable √ Not applicable
Other descriptions:
No
(6). Particulars on interest receivable actually written-off in the current period
□ Applicable √ Not applicable
Including: Write-off of significant interest receivable
□ Applicable √ Not applicable
Notes on write-off:
□ Applicable √ Not applicable
Other descriptions:
□ Applicable √ Not applicable
Dividend receivable
(1). Dividend receivable
□ Applicable √ Not applicable
(2). Important dividend receivable with the account age over one year
□ Applicable √ Not applicable
(3). Disclosure by accruing method for bad debt provisions
□ Applicable √ Not applicable
Bad debt provisions accrued separately:
□ Applicable √ Not applicable
Description on bad debt provisions accrued separately:
□ Applicable √ Not applicable
Bad debt provisions accrued according to the combination:
□ Applicable √ Not applicable
(4). Bad debt provisions accrued according to the general model of expected credit losses
□ Applicable √ Not applicable
Notes to financial statements Page 139
Annual Report 2023
Basis of classification of stages and percentage of provision for bad debts
No
Notes to the significant changes in the book balance of dividends receivable arising from changes in the
provision for losses in the current period:
□ Applicable √ Not applicable
(5). Particulars on bad debt provisions
□ Applicable √ Not applicable
Significant bad debt provision amounts recovered or reversed in the current period:
□ Applicable √ Not applicable
Other descriptions:
No
(6). Particulars on dividend receivable actually written-off in the current period
□ Applicable √ Not applicable
Including: Write-off of significant dividend receivable
□ Applicable √ Not applicable
Notes on write-off:
□ Applicable √ Not applicable
Other descriptions:
□ Applicable √ Not applicable
Other receivables
(1). Disclosure by account age
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Carrying balance at the end of Carrying balance at the
Account age
the period beginning of the period
Within one year
Including: Sub-item within one year
Within one year 165,563,284.02 168,410,800.27
Sub-total within one year 165,563,284.02 168,410,800.27
One to two years 39,844,384.24 24,291,850.81
Two to three years 17,409,340.53 30,215,722.06
Above three years 42,422,223.31 19,794,386.51
Three to four years
Four to five years
Above five years
Less: Bad debt provisions -38,819,298.58 -33,755,385.07
Total 226,419,933.52 208,957,374.58
(2). Particulars on classification by amount nature
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Carrying balance at the end of Carrying balance at the
Amount nature
the period beginning of the period
Personal loans and petty cash 10,318,174.21 10,057,590.14
Amount paid for materials 45,159,020.33 45,511,365.72
Notes to financial statements Page 140
Annual Report 2023
Consolidated balance of related-parties
43,432,125.94 48,721,963.13
current accounts - provisional input tax
Non-housing deposit and margin 59,149,069.50 46,899,705.91
Housing deposit and margin 73,213,647.38 61,576,770.10
Others 33,967,194.74 29,945,364.65
Total 265,239,232.10 242,712,759.65
(3). Particulars on accruing of bad debt provisions
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Phase 1 Phase 2 Phase 3
Expected credit loss Expected credit loss
Bad debt Expected credit
for the entire duration for the entire duration Total
provisions losses in the
(no credit impairment (credit impairment
next 12 months
occurred) occurred)
Balance as at 1
20,755,385.07 13,000,000.00 33,755,385.07
January 2023
Balance as of 1
January 2023 in the
current period
- Transferred into
Phase 2
- Transferred into
Phase 3
- Reversed into
Phase 2
- Reversed into
Phase 1
Accrued in the
5,073,521.77 5,073,521.77
current period
Reserved in the
current period
Resold in the
current period
Written-off in the
current period
Other Changes -9,608.26 -9,608.26
Balance as at 31
25,819,298.58 13,000,000.00 38,819,298.58
December 2023
Basis of classification of stages and percentage of provision for bad debts
No
Notes to the significant changes in the book balance of other receivables arising from changes in the
provision for losses in the current period:
√ Applicable □ Not applicable
Phase 1 Phase 2 Phase 3
Expected
credit loss for Expected credit
Expected credit the entire loss for the entire
Carrying balance Total
losses in the next 12 duration (no duration (credit
months credit impairment
impairment occurred)
occurred)
Balance as at 1 January 229,712,759.65 13,000,000.00 242,712,759.65
Notes to financial statements Page 141
Annual Report 2023
2023
Balance as of 1 January
2023 in the current period
- Transferred into Phase 2
- Transferred into Phase 3
- Reversed into Phase 2
- Reversed into Phase 1
Increased in the Current
1,283,531,485.17 1,283,531,485.17
Period
Derecognition of the
1,259,924,588.91 1,259,924,588.91
current period
Other Changes 1,080,423.81 1,080,423.81
Balance as at 31 December
252,239,232.10 13,000,000.00 265,239,232.10
2023
Amount of bad debt provisions accrued for the current period and the basis for assessing whether the
credit risk of financial instruments has increased significantly:
□ Applicable √ Not applicable
(4). Particulars on bad debt provisions
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Change of the current period
Opening Closing
Category Recovered Resold or Other
balance Accrued balance
or reversed written-off changes
Bad debt
provisions
13,000,000.00 13,000,000.00
accrued
separately
Account age
17,676,546.56 4,491,677.80 -9,608.26 22,158,616.10
analysis
Deposit for
3,078,838.51 581,843.97 3,660,682.48
housing lease
Total 33,755,385.07 5,073,521.77 -9,608.26 38,819,298.58
Significant bad debt provision amounts reversed or recovered in the current period:
□ Applicable √ Not applicable
Other descriptions
The other changes in the bad debt provision for the current year consist of a foreign exchange
translation difference of RMB-2,007.50 in the financial statements and a reduction in the bad debt
provision due to the disposal of Luoyang M&G Stationery Sales Co., Ltd. during this period, amounting
to RMB-7,600.76.
(5). Particulars on other receivables actually written-off in the current period
□ Applicable √ Not applicable
Including: Write-off of significant other receivables:
□ Applicable √ Not applicable
Notes to the write-off of other receivables:
□ Applicable √ Not applicable
Notes to financial statements Page 142
Annual Report 2023
(6). Particulars on top 5 other receivables in terms of the balance at the end of the period based
on debtors
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Percentage (%)
in the total
Bad debt
Company balance at the Account
Closing balance Account age provisions
name end of the nature
closing balance
period of other
receivables
Consolidated
balance of
related-parties
First 43,432,125.94 16.37 current Within one year
accounts -
provisional
input tax
Above three
Second 13,000,000.00 4.90 Others 13,000,000.00
years
Within one year
Housing
3,962,600
Third 7,975,770.00 3.01 deposit and 398,788.50
One to two years
margin
4,013,200
Fourth 6,627,634.54 2.50 Others Within one year 331,381.73
Fifth 6,136,781.42 2.31 Others Within one year 306,839.07
Total 77,172,311.90 29.09 / / 14,037,009.30
(7). Other receivables reported due to centralised management of funds
□ Applicable √ Not applicable
Other descriptions:
□ Applicable √ Not applicable
10. Inventories
(1).Classification of inventories
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Closing balance Opening balance
Provision for the Provision for the
loss on decline in loss on decline in
value of value of
Item inventories/ inventories/
Carrying balance Carrying value Carrying balance Carrying value
provision for the provision for the
impairment of impairment of
contract contract
performance cost performance cost
Raw materials 211,999,112.35 295,700.00 211,703,412.35 218,765,255.88 260,231.80 218,505,024.08
Work-in-process 38,723,366.52 38,723,366.52 38,759,893.74 426,844.96 38,333,048.78
Finished
1,343,825,313.39 67,142,882.21 1,276,682,431.18 1,385,031,556.91 81,988,636.69 1,303,042,920.22
products
Revolving
10,425,912.90 246,715.31 10,179,197.59 12,423,975.70 262,851.54 12,161,124.16
materials
Expendable
9,605,089.97 9,605,089.97 12,394,562.86 12,394,562.86
biological assets
Contract
Notes to financial statements Page 143
Annual Report 2023
performance
cost
Materials in
4,894,908.48 7,997.87 4,886,910.61
transit
Consigned
processing 6,916,598.85 6,916,598.85 7,598,696.70 7,598,696.70
materials
Shipped goods 24,279,315.52 24,279,315.52 28,240,169.26 28,240,169.26
Total 1,645,774,709.50 67,685,297.52 1,578,089,411.98 1,708,109,019.54 82,946,562.86 1,625,162,456.68
(2).Devaluation provisions of inventories and impairment provisions of contract performance
cost
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Increase amount of the Decrease amount of the
Opening current period current period Closing
Item
balance Reversed balance
Accrued Others Others
or resold
Raw materials 260,231.80 35,494.03 25.83 295,700.00
Work-in-process 426,844.96 -426,844.96
Finished products 81,988,636.69 -11,337,319.39 3,508,435.09 67,142,882.21
Revolving 262,851.54 -16,136.23 246,715.31
materials
Expendable
biological assets
Contract
performance cost
Materials in transit 7,997.87 7,997.87
Total 82,946,562.86 -11,744,806.55 3,516,458.79 67,685,297.52
Additional notes: The other changes in the provision for inventory impairment for the current year
include a foreign exchange translation difference of RMB10,396.28 in the financial statements, as well
as a reduction in the provision for inventory impairment due to the disposal of Luoyang M&G Stationery
Sales Co., Ltd. (洛阳晨光文具销售有限公司) during this period, amounting to RMB3,506,062.51.
Reasons for reversal or write-off of provision for inventories impairment in the current period
□ Applicable √ Not applicable
Inventories impairment provisions accrued according to the combination
□ Applicable √ Not applicable
Criteria for inventories impairment provisions accrued according to the combination
□ Applicable √ Not applicable
(3).Capitalisation amount of the borrowing expenses included in the balance of inventories at the
end of the period and the criteria and basis for its calculation
□ Applicable √ Not applicable
(4).Description on amortization amount of the current period of contract performance cost
□ Applicable √ Not applicable
Other descriptions
□ Applicable √ Not applicable
Notes to financial statements Page 144
Annual Report 2023
11. Held for sale assets
□ Applicable √ Not applicable
12. Non-current assets due within one year
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Debt investment due within one year
Other debt investments due within one year
Long-term receivables due within one year 1,360,640.55 1,360,640.55
Total 1,360,640.55 1,360,640.55
Debt investment due within one year
□ Applicable √ Not applicable
Other debt investments due within one year
□ Applicable √ Not applicable
Additional notes to non-current assets due within one year
No
13. Other current assets
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Contract acquisition cost
Receivable return cost 70,145,155.05 49,434,039.49
VAT input tax to be verified 885,763.39 759,099.33
VAT input tax to be deducted 17,957,651.08 17,395,435.31
Pre-paid enterprise income tax 245,142.45 4,344,134.90
Pre-paid value added tax 183.13
Others 1,730,448.32 505,433.42
Total 90,964,160.29 72,438,325.58
Other descriptions
No
14. Debt investment
(1).Particulars on debt investment
□ Applicable √ Not applicable
Changes in provision for impairment on debt investments in the current period
□ Applicable √ Not applicable
(2).Important debt investment at the end of the period
□ Applicable √ Not applicable
(3).Particulars on accruing of impairment provisions
□ Applicable √ Not applicable
Basis of classification of stages and percentage of impairment provision
No
Notes to financial statements Page 145
Annual Report 2023
Notes to the significant changes in the book balance of debt investments arising from changes in the
provision for losses in the current period:
□ Applicable √ Not applicable
Bases for determining the amount of provision set aside for impairment and assessing whether the credit
risk of financial instruments has increased substantially in the current period
□ Applicable √ Not applicable
(4).Particulars on debt investment actually written-off in the current period
□ Applicable √ Not applicable
Including: Write-off of significant debt investments
□ Applicable √ Not applicable
Notes to write-off of debt investments:
□ Applicable √ Not applicable
Other descriptions
□ Applicable √ Not applicable
15. Other debt investment
(1).Other debt investment
□ Applicable √ Not applicable
Changes in provision for impairment on other debt investments in the current period
□ Applicable √ Not applicable
(2).Important other debt investments at the end of the period
□ Applicable √ Not applicable
(3).Particulars on accruing of impairment provisions
□ Applicable √ Not applicable
Basis of classification of stages and percentage of impairment provision
No
Notes to the significant changes in the book balance of other debt investments arising from changes in
the provision for losses in the current period:
□ Applicable √ Not applicable
Bases for determining the amount of provision set aside for impairment and assessing whether the credit
risk of financial instruments has increased substantially in the current period
□ Applicable √ Not applicable
(4).Particulars on other debt investments actually written-off in the current period
□ Applicable √ Not applicable
Including: Write-off of other significant debt investments
□ Applicable √ Not applicable
Notes to write-off of other debt investments:
□ Applicable √ Not applicable
Other descriptions:
Notes to financial statements Page 146
Annual Report 2023
□ Applicable √ Not applicable
16. Long-term receivables
(1).Long-term receivables
□ Applicable √ Not applicable
(2).Disclosure by accruing method for bad debt provisions
□ Applicable √ Not applicable
Bad debt provisions accrued separately:
□ Applicable √ Not applicable
Description on bad debt provisions accrued separately:
□ Applicable √ Not applicable
Bad debt provisions accrued according to the combination:
□ Applicable √ Not applicable
(3).Bad debt provisions accrued according to the general model of expected credit losses
□ Applicable √ Not applicable
Basis of classification of stages and percentage of provision for bad debts
No
Notes to the significant changes in the book balance of long-term receivables arising from changes in the
provision for losses in the current period:
□ Applicable √ Not applicable
Bases for determining the amount of provision set aside for bad debts and assessing whether the credit
risk of financial instruments has increased substantially in the current period
□ Applicable √ Not applicable
(4).Particulars on bad debt provisions
□ Applicable √ Not applicable
Significant bad debt provision amounts recovered or reversed in the current period:
□ Applicable √ Not applicable
Other descriptions:
No
(5).Particulars on long-term receivables actually written-off in the current period
□ Applicable √ Not applicable
Including: Write-off of significant long-term receivables
□ Applicable √ Not applicable
Notes to the write-off of long-term receivables:
□ Applicable √ Not applicable
Other descriptions
□ Applicable √ Not applicable
Notes to financial statements Page 147
Annual Report 2023
17. Long-term equity investments
(1). Long-term equity investments
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Change of the current period
Investment Declaration Balance of
At the
gains and Adjustment to on impairment
Invested beginning of Other Accruing of Closing
Additional Withdrawn losses other distribution provisions at
company the period equity impairment Others balance
investment investment recognised comprehensive of cash the end of
balance changes provisions
under the income dividends or the period
equity method profits
I. Joint venture
Subtotal
II. Associate
Ningbo
Zhongchen
Equity
Investment 31,423,824.34 -673,689.41 -45,383.25 30,704,751.68
Partnership
(Limited
Partnership)
Shanghai
Pen-making
Technology
Services Co., 3,750,291.39 -601,749.62 3,148,541.77
Ltd.（上海制笔
技术服务有限
公司）
Shanghai
Momobanzhang
Enterprise 2,359,494.02 5,000,000.00 -3,980,675.00 3,378,819.02
Management
Co., Ltd.
Anhui
Pinhetongchen
Enterprise
Management 2,192,927.37 1,251,726.23 -941,201.14
Co., Ltd.（安徽
品合同晨企业
管理有限公司）
Subtotal 39,726,537.12 5,000,000.00 1,251,726.23 -6,197,315.17 -45,383.25 37,232,112.47
Total 39,726,537.12 5,000,000.00 1,251,726.23 -6,197,315.17 -45,383.25 37,232,112.47
(2). Impairment test of long-term equity investments
□ Applicable √ Not applicable
Other descriptions
No
Notes to financial statements Page 148
Annual Report 2023
18. Investments in other equity instruments
(1).Particulars on other equity instrument investments
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Change of the current period
Dividend Accumulated Reason for
Accumulated Accumulated
Gains included income losses designation as
losses included gains included in
Opening in other Closing recognised included in at fair value
Item Additional Withdrawn in other other
balance comprehensive Others balance in the other through other
investment investment comprehensive comprehensive
income in the current comprehensive comprehensive
income in the income
current period period income income
current period
Shanghai
The Company
M&G
held the
Culture
8,411,887.95 763,185.47 9,175,073.42 5,575,073.42 investment for
and
non-trading
Creativity
purposes
Co., Ltd.
Total 8,411,887.95 763,185.47 9,175,073.42 5,575,073.42 /
(2).Amount derecognised in the current period
□ Applicable √ Not applicable
Other descriptions:
□ Applicable √ Not applicable
Notes to financial statements Page 149
Annual Report 2023
19. Other non-current financial assets
□ Applicable √ Not applicable
Other descriptions:
□ Applicable √ Not applicable
20. Investment real estate
Measurement model of investment real estate
Not applicable
(1).Impairment test of investment real estate measured at cost
□ Applicable √ Not applicable
21. Fixed assets
Presented by item
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Fixed assets 1,634,646,959.11 1,744,358,557.28
Disposal of fixed assets
Total 1,634,646,959.11 1,744,358,557.28
Other descriptions:
□ Applicable √ Not applicable
Fixed assets
(1). Particulars on fixed assets
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Property and Machinery and Means of Other
Item Total
buildings equipment transportation equipment
I. Original carrying value:
1. Balance at the
1,720,394,149.04 924,195,667.99 63,548,975.56 401,795,849.93 3,109,934,642.52
beginning of the period
2. Increase amount
520,673.07 70,703,011.14 8,289,567.17 41,933,868.29 121,447,119.67
of the current period
(1) Acquisition 182,526.68 5,675,978.68 73,418.98 6,727,380.75 12,659,305.09
(2) Transfer-in
from construction in 338,146.39 65,027,032.46 8,216,148.19 35,206,487.54 108,787,814.58
progress
(3) Increase for
business combination
3. Decrease
amount of the current 2,194,031.18 32,525,371.70 10,612,261.64 25,433,436.26 70,765,100.78
period
(1) Disposal or
2,973,438.07 30,986,390.57 10,133,127.81 25,639,238.21 69,732,194.66
scraping
(2) Disposal of
563,629.24 179,546.16 743,175.40
subsidiaries
(3) Translation
difference of
-779,406.89 1,538,981.13 -84,495.41 -385,348.11 289,730.72
foreign-currency
statements
Notes to financial statements Page 150
Annual Report 2023
4. Balance at the
1,718,720,790.93 962,373,307.43 61,226,281.09 418,296,281.96 3,160,616,661.41
end of the period
II. Accumulated depreciation
1. Balance at the
486,428,888.87 526,245,553.46 47,934,942.73 303,020,540.97 1,363,629,926.03
beginning of the period
2. Increase amount
90,445,205.56 77,595,402.52 4,574,110.64 49,810,654.17 222,425,372.89
of the current period
(1) Accruing 90,445,205.56 77,595,402.52 4,574,110.64 49,810,654.17 222,425,372.89
3. Decrease
amount of the current 2,143,789.40 25,877,756.76 9,548,559.84 24,461,649.83 62,031,755.83
period
(1) Disposal or
2,109,288.88 25,078,191.60 9,375,291.62 24,401,464.03 60,964,236.13
scraping
(2) Disposal of
387,256.63 170,849.63 558,106.26
subsidiaries
(3) Translation
difference of
34,500.52 799,565.16 -213,988.41 -110,663.83 509,413.44
foreign-currency
statements
4. Balance at the
574,730,305.03 577,963,199.22 42,960,493.53 328,369,545.31 1,524,023,543.09
end of the period
III. Impairment provisions
1. Balance at the
1,946,159.21 1,946,159.21
beginning of the period
2. Increase amount
of the current period
(1) Accruing
3. Decrease
amount of the current
period
(1) Disposal or
scraping
4. Balance at the
1,946,159.21 1,946,159.21
end of the period
IV. Carrying value
1. Carrying value
1,143,990,485.90 382,463,949.00 18,265,787.56 89,926,736.65 1,634,646,959.11
at the end of the period
2. Carrying value
at the beginning of the 1,233,965,260.17 396,003,955.32 15,614,032.83 98,775,308.96 1,744,358,557.28
period
Other descriptions: For fixed assets used as collaterals, see “1. Important Commitments” under
Note “XVI. Commitments and Contingencies”.
(2). Particulars on temporary idle fixed assets
□ Applicable √ Not applicable
(3). Particulars on fixed assets leased in under finance leases
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Closing carrying value
Property and Buildings 46,429,899.85
Notes to financial statements Page 151
Annual Report 2023
(4). Fixed assets without proper certificates of title
□ Applicable √ Not applicable
(5). Impairment test of fixed assets
□ Applicable √ Not applicable
Other descriptions:
□ Applicable √ Not applicable
Disposal of fixed assets
□ Applicable √ Not applicable
22. Construction in progress
Presented by item
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Construction in progress 95,391,194.19 71,901,168.18
Engineering materials
Total 95,391,194.19 71,901,168.18
Other descriptions:
□ Applicable √ Not applicable
Construction in progress
(1). Particulars on construction in progress
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Closing balance Opening balance
Item Carrying Impairment Carrying Carrying Impairment Carrying
balance provisions value Balance provisions value
Fixed assets not
yet installed and 71,960,914.66 71,960,914.66 36,984,476.82 36,984,476.82
put into use
Others 23,430,279.53 23,430,279.53 34,916,691.36 34,916,691.36
Total 95,391,194.19 95,391,194.19 71,901,168.18 71,901,168.18
(2). Changes in important construction in progress projects in the current period
□ Applicable √ Not applicable
(3). Particulars on impairment provisions accrued for construction in progress in the current
period
□ Applicable √ Not applicable
(4). Impairment test of construction in progress
□ Applicable √ Not applicable
Other descriptions
□ Applicable √ Not applicable
Notes to financial statements Page 152
Annual Report 2023
Engineering materials
(1). Particulars on engineering materials
□ Applicable √ Not applicable
23. Productive biological assets
(1).Productive biological assets using cost measurement model
□ Applicable √ Not applicable
(2).Impairment test of productive biological assets using cost measurement model
□ Applicable √ Not applicable
(3).Productive biological assets using fair value measurement model
□ Applicable √ Not applicable
Other descriptions
□ Applicable √ Not applicable
24. Oil and gas assets
(1) Particulars on oil and gas assets
□ Applicable √ Not applicable
(2) Impairment test of oil and gas assets
□ Applicable √ Not applicable
Other descriptions:
No
25. Right-of-use assets
(1) Particulars on right-of-use assets
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Property and Transportation Machinery and
Item Total
buildings vehicles equipment
I. Original carrying value
1. Balance at the
713,879,408.22 2,679,653.36 716,559,061.58
beginning of the period
2. Increase amount of
334,487,302.89 -1,885.49 170,119.08 334,655,536.48
the current period
(1) New leases 338,541,245.40 170,119.08 338,711,364.48
(2) Revaluation
-4,053,942.51 -1,885.49 -4,055,828.00
adjustment
3. Decrease amount of
316,855,235.59 316,855,235.59
the current period
(1) Disposal 313,994,913.45 313,994,913.45
(2) Disposal of
2,860,322.14 2,860,322.14
subsidiaries
4. Balance at the end of
731,511,475.52 2,677,767.87 170,119.08 734,359,362.47
the period
II. Accumulated depreciation
1. Balance at the
379,370,678.03 1,392,308.87 380,762,986.90
beginning of the period
Notes to financial statements Page 153
Annual Report 2023
2. Increase amount of
241,622,911.58 531,817.82 14,176.60 242,168,906.00
the current period
(1) Accrual 241,622,911.58 531,817.82 14,176.60 242,168,906.00
3. Decrease amount of
289,419,359.82 -11,458.44 289,407,901.38
the current period
(1) Disposal 288,242,636.87 288,242,636.87
(2) Disposal of
1,235,882.75 1,235,882.75
subsidiaries
(3) Translation
difference of -59,159.80 -11,458.44 -70,618.24
foreign-currency statements
4. Balance at the end of
331,574,229.79 1,935,585.13 14,176.60 333,523,991.52
the period
III. Impairment provisions
1. Balance at the
beginning of the period
2. Increase amount of
the current period
(1) Accrual
3. Decrease amount of
the current period
(1) Disposal
4. Balance at the end of
the period
IV. Carrying value
1. Carrying value at the
399,937,245.73 742,182.74 155,942.48 400,835,370.95
end of the period
2. Carrying value at the
334,508,730.19 1,287,344.49 335,796,074.68
beginning of the period
(2) Impairment test of right-of-use assets
□ Applicable √ Not applicable
Other descriptions:
No
26. Intangible assets
(1).Particulars on intangible assets
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Image
Unpatented Trademark use
Item Land use right Patent right identification Software Others Total
technology rights
rights
I. Original carrying value
1. Balance at the
337,260,255.54 16,585,109.59 93,989.00 97,905,332.20 39,129,063.08 37,296,978.79 528,270,728.20
beginning of the period
2. Increase amount
43,066,999.47 2,274,487.73 5,161,555.33 165,943.15 50,668,985.68
of the current period
(1) Acquisition 2,274,487.73 1,935,911.38 165,943.15 4,376,342.26
(2) Internal R&D
(3) Increase for
43,066,999.47 43,066,999.47
business combination
(4) Transfer-in
from construction in 3,225,643.95 3,225,643.95
progress
Notes to financial statements Page 154
Annual Report 2023
3. Decrease amount
113,385.79 93,989.00 923,178.16 23,345.10 1,153,898.05
of the current period
(1) Disposal 93,989.00 93,989.00
(2) Translation
difference of
113,385.79 923,178.16 23,345.10 1,059,909.05
foreign-currency
statements
4. Balance at the end
380,213,869.22 18,859,597.32 96,982,154.04 44,290,618.41 37,439,576.84 577,785,815.83
of the period
II. Accumulated amortisation
1. Balance at the
57,152,400.55 6,072,813.99 93,989.00 10,296,136.98 25,596,122.56 11,290,620.49 110,502,083.57
beginning of the period
2. Increase amount
8,009,899.17 1,178,835.03 1,710,825.44 4,174,304.15 5,143,501.87 20,217,365.66
of the current period
(1) Accruing 8,009,899.17 1,178,835.03 1,710,825.44 4,174,304.15 5,143,501.87 20,217,365.66
3. Decrease amount
16,303.10 93,989.00 -629,712.29 755,472.95 236,052.76
of the current period
(1) Disposal 93,989.00 93,989.00
(2) Translation
difference of
16,303.10 -629,712.29 755,472.95 142,063.76
foreign-currency
statements
4. Balance at the end
65,145,996.62 7,251,649.02 12,636,674.71 29,770,426.71 15,678,649.41 130,483,396.47
of the period
III. Impairment provisions
1. Balance at the
beginning of the period
2. Increase amount
of the current period
(1) Accruing
3. Decrease amount
of the current period
(1) Disposal
4. Balance at the end
of the period
IV. Carrying value
1. Carrying value at
315,067,872.61 11,607,948.30 84,345,479.33 14,520,191.70 21,760,927.43 447,302,419.37
the end of the period
2. Carrying value at
the beginning of the 280,107,855.00 10,512,295.60 87,609,195.22 13,532,940.52 26,006,358.30 417,768,644.64
period
Other descriptions: For intangible assets used as collaterals, see “1. Important Commitments” under
Note “XVI. Commitments and Contingencies”.
The proportion of intangible assets formed by the Company's internal R&D at the end of the current
period in the balance of intangible assets was 0.
(2).Particulars on use rights of land of which the property ownership certificates have not been
obtained
□ Applicable √ Not applicable
(3) Impairment test of intangible assets
□ Applicable √ Not applicable
Other descriptions:
□ Applicable √ Not applicable
27. Goodwill
(1).Original carrying value of goodwill
√ Applicable □ Not applicable
Notes to financial statements Page 155
Annual Report 2023
Unit: Yuan Currency: RMB
Increase of the current Decrease of the current
period period
Name of invested company Opening
Formed due Closing balance
or event forming goodwill balance
to business Others Disposal Others
combination
Shenzhen Erya Creative and
Cultural Development Co.,
131,001.23 131,001.23
Ltd.（深圳尔雅文化创意发
展有限公司）
Axus Stationery (Shanghai)
30,175,537.19 30,175,537.19
Company Ltd.
Beckmann Holding AS 63,529,740.20 63,529,740.20
Total 93,836,278.62 93,836,278.62
(2).Impairment provisions of goodwill
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Increase of the current Decrease of the current
Name of invested company Opening period period Closing
or event forming goodwill balance balance
Accrued Others Disposal Others
Shenzhen Erya Creative
and Cultural Development
131,001.23 131,001.23
Co., Ltd.（深圳尔雅文化创
意发展有限公司）
Axus Stationery (Shanghai)
30,175,537.19 30,175,537.19
Company Ltd.
Total 30,306,538.42 30,306,538.42
(3).Information regarding the asset group or the combination of asset groups to which goodwill
belongs
√ Applicable □ Not applicable
Composition and basis of the Whether it is
Operating segments
Item asset group or combination of consistent with
and basis
asset groups the previous year
These assets represent
The asset group comprises fixed
the core traditional
Back to School Holding assets, leasehold assets,
business activities,
AS has assessed the trademarks, and other intangible
where the Company
asset group containing assets. The cash flows generated Yes
offers various products
goodwill as of the by this asset group or
or services or engages
valuation reference date. combination are independent of
in operational activities
other assets or asset groups.
in different regions.
Changes in asset groups or combinations of asset groups
□ Applicable √ Not applicable
Other descriptions
□ Applicable √ Not applicable
(4).Specific determination method for recoverable amount
The recoverable amount is determined as the net fair value less disposal costs
□ Applicable √ Not applicable
Notes to financial statements Page 156
Annual Report 2023
The recoverable amount is determined as the present value of the expected future cash flows
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Key Key
parameters Basis for parameters
for the determining of the stable
Years
forecast the period Basis for determining
Recoverable Impairment of the
Item Carrying value period parameters (growth key parameters for
amount amount forecast
(growth for the rate, profit the stable period
period
rate, profit forecast margin,
margin, period discount
etc.) rate, etc.)
The operating
Back to
revenue growth rate
School Based on
is determined based
Holding AS the profit Steady-state
on the long-term CPI
has assessed Projected forecast operating
growth rate in the
the asset operating provided by revenue
region where the
group Five revenue the growth rate:
169,992,470.13 201,921,737.92 0.00 asset group is
containing years growth Company, 2%
located, while the
goodwill as rate: 4.9% verified and Post-tax
post-tax discount rate
of the to 13.7% validated by discount
is determined
valuation professional rate: 13%
according to the
reference institutions.
weighted average
date.
cost of capital model.
Total 169,992,470.13 201,921,737.92 0.00 / / / / /
Other descriptions: For the current year, the Company hired KPMG Asset Appraisal (Shanghai) Co.,
Ltd. to issue the Asset Appraisal Report on the Recoverable Amount of Goodwill Asset Groups of Back
to School Holding AS (Beckmann) Involved in the Goodwill Impairment Test Carried out by Shanghai
M&G Stationery Inc. for the Purpose of Financial Reporting with the report number of KPMG Ping Bao
Zi [2024] No.002 on 20 March 2024. According to the appraisal results, as of 31 December 2023, the
carrying value of the asst group or the combination of asset groups including goodwill of Beckmann
acquired by the Company was RMB169.9925 million, and the recoverable amount was not lower than
RMB201.9217 million; after the test, there was no impairment risk in the goodwill formed by the
Company's acquisition of Beckmann.
The differences between the foregoing information and the data used in impairment testing in previous
years, or external information, are due to apparent reasons
□ Applicable √ Not applicable
The reasons for the disparity between the information used in impairment testing in previous years and
the actual situation of the current year are evident for the Company
□ Applicable √ Not applicable
(5).Performance commitments and corresponding goodwill impairment
Performance commitments existed at the time goodwill was formed and are within the performance
commitment period in the current period or the previous period
□ Applicable √ Not applicable
Other descriptions
□ Applicable √ Not applicable
28. Long-term prepaid expenses
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Opening Increase Amortisation Other decrease Closing balance
Notes to financial statements Page 157
Annual Report 2023
balance amount of the amount of the amounts
current period current period
Decoration fee 106,109,878.14 53,762,458.09 59,122,844.25 100,749,491.98
Others 14,174,666.78 2,523,670.28 3,346,150.74 13,352,186.32
Total 120,284,544.92 56,286,128.37 62,468,994.99 114,101,678.30
Other descriptions:
No
29. Deferred income tax assets/Deferred income tax liabilities
(1).Unoffset deferred income tax assets
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Closing balance Opening balance
Item Deductible Deferred income Deductible Deferred income
temporary tax temporary tax
differences Assets differences Assets
Impairment provisions
122,270,919.41 29,727,339.67 119,883,535.58 28,510,998.74
of assets
Unrealised profits from
135,294,710.04 22,819,900.77 151,128,402.65 25,504,796.74
internal transactions
Deductible losses 3,688,040.49 922,010.12 9,935,404.10 2,483,851.03
Changes in fair value
of repurchase 566,964.60 85,044.69
obligations
Cash flow hedging 1,357,106.71 298,563.48 881,465.28 193,922.36
Deferred income 33,521,058.76 5,892,156.71 45,109,045.29 8,751,901.92
Depreciation or
215,241,142.48 53,798,582.23 200,572,316.33 50,139,937.56
amortisation difference
Time difference in
75,325,949.34 18,831,487.34 50,581,578.95 12,645,394.74
revenue recognition
Changes in lease
384,780,513.35 90,632,454.95 318,738,574.01 78,036,800.34
liabilities
Time difference in
59,553,417.51 9,611,753.83
equity incentive costs
Others 8,860.72 1,949.36
Total 972,055,265.90 223,009,489.32 956,383,739.70 215,879,357.26
(2).Unoffset deferred income tax liabilities
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Closing balance Opening balance
Item Deferred income Deferred income
Taxable temporary Taxable temporary
tax tax
differences differences
liabilities liabilities
Assets appreciation for
business combination
173,266,473.26 32,000,755.35 190,655,832.81 35,543,815.35
not under the common
control
Changes in fair value
of other debt
investments
Changes in fair value 5,575,073.42 836,261.01 4,811,887.95 721,783.19
Notes to financial statements Page 158
Annual Report 2023
of other equity
instrument investments
Depreciation or
70,672,762.05 15,548,007.65 72,971,387.02 16,053,705.14
amortisation difference
Time difference in cost
70,145,155.05 17,536,288.78 45,934,871.19 11,483,717.81
recognition
Changes in right-of-use
400,835,370.95 94,109,546.81 335,796,074.68 82,050,753.39
assets
Changes in fair value
of repurchase 3,674,156.71 551,123.51
obligations
Changes in fair value
of trading financial 34,518,595.12 5,561,660.87 27,645,879.64 4,255,785.84
assets
Total 755,013,429.85 165,592,520.47 681,490,090.00 150,660,684.23
(3).Deferred income tax assets or liabilities presented on a net basis after offsetting
□ Applicable √ Not applicable
(4).Details of unrecognised deferred income tax assets
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Deductible temporary
61,892,123.81 62,480,850.37
differences
Deductible losses 503,640,888.34 567,596,672.82
Total 565,533,012.15 630,077,523.19
(5).The deductible losses of unrecognised deferred income tax assets will expire in the following
years
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Year Closing balance Opening balance Note
2028 56,598,961.20
2027 165,391,111.89 156,617,072.09
2026 107,983,988.11 126,146,965.53
2025 121,699,095.49 136,313,858.06
2024 51,967,731.65 53,774,720.35
2023 94,744,056.79
Total 503,640,888.34 567,596,672.82 /
Other descriptions:
□ Applicable √ Not applicable
30. Other non-current assets
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Closing balance Opening balance
Item Carrying Impairment Carrying Impairment
Carrying value Carrying value
balance provisions balance provisions
Contract
acquisition cost
Contract
Notes to financial statements Page 159
Annual Report 2023
performance cost
Receivable
return cost
Contract assets
Prepayments for
real estate,
12,202,603.55 12,202,603.55 7,054,811.39 7,054,811.39
engineering,
equipment, etc.
Total 12,202,603.55 12,202,603.55 7,054,811.39 7,054,811.39
Other descriptions:
No
31. Assets with restricted ownership or use rights
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
At the end of the period At the beginning of the period
Item Type of Restriction Type of Restriction
Carrying balance Carrying value Carrying balance Carrying value
restriction details restriction details
Cash and
equivalents
Bills receivable
Inventories
Mortgaged Mortgaged
Fixed assets 232,833,662.80 125,596,115.11 Mortgage 232,833,662.80 130,469,933.51 Mortgage
borrowings borrowings
Intangible Mortgaged Mortgaged
113,742,703.94 94,136,860.53 Mortgage 113,742,703.94 97,214,969.13 Mortgage
assets borrowings borrowings
Performance Performance
Cash and
bonds, letter bonds, letter
equivalents -
20,025,637.33 20,025,637.33 Pledge of credit 25,069,934.20 25,069,934.20 Pledge of credit
Other cash and
deposits, deposits,
equivalents
etc. etc.
Fixed-term Fixed-term
Cash and deposits deposits
equivalents - 1,500,000,000.00 1,500,000,000.00 Frozen exceeding 1,510,000,000.00 1,510,000,000.00 Frozen exceeding
Cash at bank three three
months months
Deposits for
Cash and
bank
equivalents - 10,000,000.00 10,000,000.00 Pledge
acceptance
Cash at bank
bills
Cash and
equivalents - 1,010,742.92 1,010,742.92 Frozen Litigation
Cash at bank
Accounts Factoring
2,500,000.00 2,369,305.44 Pledge
receivable pledge
Total 1,880,112,746.99 1,753,138,661.33 / / 1,881,646,300.94 1,762,754,836.84 / /
Other descriptions:
No
32. Short-term borrowings
(1).Classification of short-term borrowings
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Pledged borrowings
Mortgaged borrowings 190,000,000.00 184,000,000.00
Guaranteed borrowings
Notes to financial statements Page 160
Annual Report 2023
Credit borrowings 5,174,225.65
Borrowing interest expenses 174,166.67 176,000.00
Total 190,174,166.67 189,350,225.65
Description on classification of short-term borrowings:
See 1. "Important Commitments" under "Note XVI. Commitments and Contingencies".
(2).Particulars on overdue but yet unrepaid short-term borrowings
□ Applicable √ Not applicable
Particulars of important overdue but yet unrepaid short-term borrowings:
□ Applicable √ Not applicable
Other descriptions
□ Applicable √ Not applicable
33. Held-for-trading financial liabilities
□ Applicable √ Not applicable
Other descriptions:
□ Applicable √ Not applicable
34. Derivative financial liabilities
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Foreign exchange derivatives - Cash flow hedging 1,357,106.71 881,465.28
Total 1,357,106.71 881,465.28
Other descriptions:
No
35. Bills payable
(1).Presentation of notes payable
□ Applicable √ Not applicable
36. Accounts payable
(1).Presentation of accounts payable
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Within one year 4,754,209,098.31 3,970,197,454.64
One to two years 91,390,676.82 27,008,487.77
Two to three years 7,499,025.52 1,427,445.30
Above three years 1,240,708.48
Total 4,854,339,509.13 3,998,633,387.71
(2).Accounts payable with the account age over one year or overdue
□ Applicable √ Not applicable
Other descriptions
□ Applicable √ Not applicable
Notes to financial statements Page 161
Annual Report 2023
37. Accounts received in advance
(1). Presentation of accounts received in advance
□ Applicable √ Not applicable
(2). Significant accounts received in advance with an age of more than one year
□ Applicable √ Not applicable
(3). Amount of and reason for significant changes in carrying value during the Reporting Period
□ Applicable √ Not applicable
Other descriptions
□ Applicable √ Not applicable
38. Contract liabilities
(1).Contract liabilities
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Loans 62,138,668.61 51,902,037.54
Membership points 19,824,160.30 12,981,932.51
Vouchers 24,075,389.38 16,861,827.55
Total 106,038,218.29 81,745,797.60
(2). Significant contract liabilities with an age of more than one year
□ Applicable √ Not applicable
(3).Amount of and reason for significant changes in carrying value during the Reporting Period
□ Applicable √ Not applicable
Other descriptions:
□ Applicable √ Not applicable
39. Employee benefits payable
(1).Presentation of employee benefits payable
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Opening Increase of the Decrease of the
Item Closing balance
balance current period current period
I. Short-term benefits 169,314,530.92 1,027,574,796.78 1,009,603,589.29 187,285,738.41
II. Post-employment benefits - 12,549,433.02 118,916,040.28 122,573,453.66 8,892,019.64
Defined contribution plans
III. Termination benefits 91,452.89 91,452.89
IV. Other benefits due within
one year
Total 181,863,963.94 1,146,582,289.95 1,132,268,495.84 196,177,758.05
(2).Presentation of short-term benefits
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Increase of the Decrease of the
Item Opening balance Closing balance
current period current period
Notes to financial statements Page 162
Annual Report 2023
I. Salary, bonus, allowance 156,143,008.41 897,241,951.25 876,093,614.89 177,291,344.77
and subsidy
II. Employee benefits 240.00 10,827,048.96 10,826,848.96 440.00
III. Social insurance 8,971,965.66 73,574,128.11 77,203,255.72 5,342,838.05
Including: Medical insurance 8,689,848.94 70,402,357.48 73,943,318.53 5,148,887.89
Work-related injury 282,116.72 2,826,343.54 2,914,510.10 193,950.16
insurance
Maternity insurance 345,427.09 345,427.09
IV. Housing provident fund 2,432,220.46 40,933,890.16 40,551,017.11 2,815,093.51
V. Labor union and 500,596.79 622,469.07 661,629.95 461,435.91
employee education funds
VI. Short-term compensated 1,264,340.14 3,818,240.02 3,710,153.45 1,372,426.71
absences
VII. Short-term profit
sharing plan
VIII. Other short-term 2,159.46 557,069.21 557,069.21 2,159.46
benefits
Total 169,314,530.92 1,027,574,796.78 1,009,603,589.29 187,285,738.41
(3).Presentation of defined contribution plans
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Increase of the Decrease of the
Item Opening balance Closing balance
current period current period
1. Basic pension 12,180,712.09 115,138,047.54 118,684,660.20 8,634,099.43
2. Unemployment insurance 368,720.93 3,777,992.74 3,888,793.46 257,920.21
3. Enterprise annuity
payment
Total 12,549,433.02 118,916,040.28 122,573,453.66 8,892,019.64
Other descriptions:
□ Applicable √ Not applicable
40. Taxes payable
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Value added tax ("VAT") 84,502,695.39 49,153,002.78
Consumption tax
Business tax
Enterprise income tax 196,506,377.39 121,751,106.11
Personal income tax 12,725,068.12 12,798,981.46
Urban maintenance and
5,754,431.07 3,342,654.01
construction tax
Property tax 3,832,665.46 3,867,521.54
Education surcharge 4,756,101.43 2,848,067.51
Land use tax 287,892.43 1,603,711.07
Stamp duty 3,870,218.42 3,103,842.61
Others 29,077.71 10,552.34
Total 312,264,527.42 198,479,439.43
Other descriptions:
No
Notes to financial statements Page 163
Annual Report 2023
41. Other payables
(1). Presented by item
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Interest payable
Dividend payable
Other payables 537,102,511.17 492,874,360.46
Total 537,102,511.17 492,874,360.46
Other descriptions:
□ Applicable √ Not applicable
(2). Interest payable
Presentation by category
□ Applicable √ Not applicable
Significant interest payable overdue:
□ Applicable √ Not applicable
Other descriptions:
□ Applicable √ Not applicable
(3). Dividend payable
Presentation by category
□ Applicable √ Not applicable
(4). Other payables
Other payables presented by amount nature
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Margin and deposit 171,635,945.59 165,796,599.90
Repurchase obligations of restricted stocks 65,381,732.00 76,756,505.00
Product license fee 16,907,000.00 16,209,000.00
Estimated fees 248,212,246.67 205,942,866.54
Engineering and decoration fund 15,743,710.03 7,185,194.49
Others 19,221,876.88 20,984,194.53
Total 537,102,511.17 492,874,360.46
Significant other payables with the account age over one year or overdue
□ Applicable √ Not applicable
Other descriptions:
□ 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
Notes to financial statements Page 164
Annual Report 2023
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 186,290,225.12 173,787,427.29
Repurchase obligations 35,878,223.18 16,715,043.39
Total 222,168,448.30 190,502,470.68
Other descriptions:
No
44. Other current liabilities
Particulars on other current liabilities
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Short-term bonds payable
Return amount payable 77,357,807.61 54,763,234.90
Output tax to be written off 6,853,079.95 5,107,775.65
Receivables that cannot be derecognized 30,380,352.51 19,469,103.13
Total 114,591,240.07 79,340,113.68
Changes in short-term bonds payable:
□ Applicable √ Not applicable
Other descriptions:
□ Applicable √ Not applicable
45. Long-term borrowings
(1). Classification of long-term borrowings
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Closing Balance Opening Balance
Pledged borrowings
Mortgaged borrowings 26,023,833.34
Guaranteed borrowings
Credit borrowings 4,003,666.67
Total 30,027,500.01
Notes to the classification of long-term borrowings:
No
Other descriptions:
□ Applicable √ Not applicable
46. Bonds payable
(1).Bonds payable
□ Applicable √ Not applicable
(2). Changes in bonds payable: (excluding other financial instruments such as preferred shares
classified as financial liabilities and perpetual bonds)
□ Applicable √ Not applicable
Notes to financial statements Page 165
Annual Report 2023
(3).Description on convertible corporate bonds
□ Applicable √ Not applicable
Accounting for transfers of equity and basis of judgment
□ Applicable √ Not applicable
(4).Description on other financial instruments classified as financial liabilities
Basic information on other financial instruments such as outstanding preferred shares and perpetual
bonds at the end of the period
□ Applicable √ Not applicable
Form of changes in financial instruments such as outstanding preferred shares and perpetual bonds at the
end of the period
□ Applicable √ Not applicable
Description on the basis for classification of other financial instruments as financial liabilities:
□ Applicable √ Not applicable
Other descriptions:
□ Applicable √ Not applicable
47. Lease liabilities
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Long-term lease liabilities 384,904,430.86 318,738,574.01
Less: Lease liabilities due within one year -186,290,225.12 -173,787,427.29
Total 198,614,205.74 144,951,146.72
Other descriptions:
No
48. Long-term payables
Presented by item
□ Applicable √ Not applicable
Other descriptions:
□ Applicable √ Not applicable
Long-term payables
(1). Long-term payables presented by amount nature
□ Applicable √ Not applicable
Special payables
(1). Special payables presented by amount nature
□ Applicable √ Not applicable
Notes to financial statements Page 166
Annual Report 2023
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
External guarantee
Pending litigation
Product quality
assurance
Restructuring
obligations
Onerous contract to be
implemented
Return amount payable
Others
Repurchase obligations 14,922,058.45 0.00
Total 14,922,058.45 0.00 /
Other descriptions, including descriptions on important assumptions and estimates related to important
estimated liabilities:
No
51. Deferred income
Particulars on deferred income
√ Applicable □ Not applicable
Currency: RMB
Unit: Yuan
Increase of the Decrease of the Cause of
Item Opening balance Closing balance
current period current period formation
Government
Government
46,210,203.99 3,750,000.00 15,610,400.40 34,349,803.59 subsidies
subsidies
received
Total 46,210,203.99 3,750,000.00 15,610,400.40 34,349,803.59 /
Other descriptions:
□ Applicable √ Not applicable
52. Other non-current liabilities
□ Applicable √ Not applicable
53. Share capital
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Increase or decrease (+ or -) due to this change
Opening Provident Closing
Issue
balance Bonus funds balance
new Others Subtotal
shares transferred
shares
shares
Total
926,933,050.00 -336,480.00 -336,480.00 926,596,570.00
shares
Notes to financial statements Page 167
Annual Report 2023
Other descriptions:
According to the Proposal on Repurchase and Cancellation of Some Restricted Shares considered
and approved at the 19th meeting of the 5th session of the Board of Directors and the 17th meeting of
the 5th session of Supervisory Committee held on 29 March 2023, it was agreed to repurchase and
cancel restricted shares that have been granted but not yet released from restriction for certain incentive
recipients. The quantity of shares repurchased and canceled in this instance amounts to 336,480 shares.
54. Other equity instruments
(1).Basic information on other financial instruments such as outstanding preferred shares and
perpetual bonds at the end of the period
□ Applicable √ Not applicable
(2).Form of changes in financial instruments such as outstanding preferred shares and perpetual
bonds at the end of the period
□ Applicable √ Not applicable
Changes in other equity instruments of the current period, reasons for changes, and basis for relevant
accounting treatment:
□ Applicable √ Not applicable
Other descriptions:
□ Applicable √ Not applicable
55. Capital reserve
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Increase of the Decrease of the
Item Opening balance Closing balance
current period current period
Capital premium
371,583,768.25 9,237,846.00 362,345,922.25
(Share premium)
Other capital
56,356,464.87 920,360.07 46,528,965.70 10,747,859.24
reserve
Total 427,940,233.12 920,360.07 55,766,811.70 373,093,781.49
Other descriptions, including descriptions on changes of the current period and reasons for changes:
1. Increase or decrease in capital premium for the current year:
As stated in Note VII (53), the capital reserve was decreased by RMB9,237,846.00 due to the
repurchase of shares.
2. Increase or decrease in other capital reserves for the current year:
(1) Due to the failure to achieve the planned performance assessment targets this year, the capital
reserve decreased by RMB419,492.07 due to the recognition of the difference between the estimated
pre-tax deductible amount of equity incentive expenses during the vesting period and the fair value of
the stock on the date of grant as deferred income tax assets for the implementation of the restricted stock
incentive plan in accordance with the relevant resolutions of the Company.
(2) Due to the failure to achieve the planned performance assessment targets this year, the capital
reserve decreased by RMB46,528,965.70 due to the recognition of the estimated pre-tax deductible
amount of equity incentive expenses during the vesting period for the implementation of the restricted
stock incentive plan in accordance with the relevant resolutions of the Company;
(3) The capital reserve increased by RMB500,868.00 due to other changes.
56. Treasury shares
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Notes to financial statements Page 168
Annual Report 2023
Increase of the Decrease of the
Item Opening balance Closing balance
current period current period
Repurchase of
77,555,184.50 10,625,773.00 66,929,411.50
restricted stocks
Repurchase
through the stock 114,287,058.94 35,725,187.26 150,012,246.20
exchange
Total 191,842,243.44 35,725,187.26 10,625,773.00 216,941,657.70
Other descriptions, including descriptions on changes of the current period and reasons for changes:
(1) According to the Proposal on the Plan for Share Repurchase through the Stock Exchange,
which was approved at the 18th meeting of the 5th session of the Board of Directors, the Company
repurchased, through the stock exchange, treasury shares with a total amount of RMB35,725,187.26 in
the current year.
(2) The total amount of treasury shares decreased by RMB10,625,773.00 due to the release of the
restrictions on and the repurchase of some restricted stocks issued by the Company.
57. Other comprehensive income
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount accounted for in the current period
Less: Included Less: Included
in other in other
Amount
comprehensive comprehensive
incurred
income in the income in the Attributable Attributable
Opening before Less: Closing
Item previous previous to the parent to minority
balance income tax Income tax balance
period and period and company shareholders
for the expenses
transferred to transferred to after the tax after the tax
current
profit or loss retained
period
in the current earnings in the
period current period
I. Other
comprehensive
income not to be 5,246,076.58 763,185.47 114,477.82 648,707.65 5,894,784.23
reclassified into
profit or loss
Including: Change
in re-measurement
of defined benefit
plans
Other
comprehensive
income that may not
1,155,971.82 1,155,971.82
be reclassified to
profit or loss under
equity method
Changes in fair
value of other
4,090,104.76 763,185.47 114,477.82 648,707.65 4,738,812.41
equity instrument
investments
Change in fair
value of enterprise's
own credit risk
II. Other
comprehensive
income to be -5,554,047.83 -1,566,075.44 -104,641.12 -1,286,313.57 -175,120.75 -6,840,361.40
reclassified into
profit or loss
Including: Other
comprehensive
-58,865.10 -45,383.25 -45,383.25 -104,248.35
income that may be
reclassified to profit
Notes to financial statements Page 169
Annual Report 2023
or loss under equity
method
Changes in fair
value of other debt
investments
Amount included
in other
comprehensive
income on
reclassification of
financial assets
Credit
impairment
provisions of other
debt investments
Cash flow
-1,122,915.64 65,388.55 -104,641.12 155,407.12 14,622.55 -967,508.52
hedging reserve
Exchange
differences from
-4,372,267.09 -1,586,080.74 -1,396,337.44 -189,743.30 -5,768,604.53
translation of
financial statements
Total other
comprehensive -307,971.25 -802,889.97 9,836.70 -637,605.92 -175,120.75 -945,577.17
income
Other descriptions, including the adjustment of the effective portion of cash flow hedging profit or loss
transferred to the initial recognition amount of the hedged item:
No
58. Special reserve
□ Applicable √ Not applicable
59. Surplus reserve
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Increase of the Decrease of the
Item Opening balance Closing balance
current period current period
Statutory surplus
464,201,654.91 464,201,654.91
reserve
Arbitrary surplus
reserve
Reserve fund
Enterprise
development fund
Others
Total 464,201,654.91 464,201,654.91
Descriptions on surplus reserve, including descriptions on changes of the current period and reasons for
changes:
The statutory surplus reserve is accrued at 10% of the parent company's net profits and is capped at 50%
of the share capital.
60. Undistributed profit
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Current period Previous period
Pre-adjustment undistributed profits at the 5,222,409,808.33 4,496,600,374.16
Notes to financial statements Page 170
Annual Report 2023
end of the previous period
Total adjustment amount of undistributed
profits at the beginning of the period ("+"
refers to increase by adjustment and "-"
refers to decrease by adjustment)
Post-adjustment amount of undistributed
5,222,409,808.33 4,496,600,374.16
profits at the beginning of the period
Add: Net profit attributable to shareholders
1,526,801,727.16 1,282,456,788.17
of the parent company in the current period
Less: Statutory surplus reserve accrued
Arbitrary surplus reserve accrued
Withdrawal of general risk provision
Dividends on common shares payable 462,037,503.50 556,647,354.00
Dividends on common shares
converted to stock capital
Undistributed profit at the end of the period 6,287,174,031.99 5,222,409,808.33
Details on adjustment of undistributed profits at the beginning of the period:
1. Due to the retrospective adjustment based on the Accounting Standards for Business Enterprises and
their related new regulations, the affected undistributed profit at the beginning of the period was RMB0.
2. Due to changes in accounting policies, the affected undistributed profit at the beginning of the period
was RMB0.
3. Due to the correction of major accounting errors, the affected undistributed profit at the beginning of
the period was RMB0.
4. Due to changes in the scope of the consolidated financial statements caused by the business
combination under common control, the affected undistributed profit at the beginning of the period was
RMB0.
5. Due to other adjustments, the affected undistributed profit at the beginning of the period was RMB0.
61. Revenue and operating costs
(1).Particulars on revenue and operating costs
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount accounted for in the current Amount accounted for in the previous
Item period period
Revenue Costs Revenue Costs
Main
23,302,655,922.99 18,911,840,779.62 19,986,262,640.35 16,119,898,201.92
operations
Other
48,648,405.04 35,062,009.49 10,052,982.97 4,341,356.94
operations
Total 23,351,304,328.03 18,946,902,789.11 19,996,315,623.32 16,124,239,558.86
Notes to financial statements Page 171
Annual Report 2023
(2).Information on the breakdown of revenue and operating costs
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Direct office supplies
Core traditional business Inter-branch offset Total
Classification business
of contracts Operating Operating Operating
Revenue Revenue Revenue Revenue Operating costs
costs costs costs
Types of goods
1. Sales of 10,241,741,904.05 6,808,150,440.29 13,306,401,500.45 12,355,076,071.36 -248,988,447.76 -251,385,732.03 23,299,154,956.74 18,911,840,779.62
goods
2. Management
fee for 1,825,471.64 1,825,471.64
franchising
3. Hardware 1,082,933.24 592,561.37 1,675,494.61
and software
4. Material 2,159,269.06 10,922.02 2,159,269.06 10,922.02
income
5. Supply chain 29,943,206.17 28,901,052.05 29,943,206.17 28,901,052.05
service
6. Others 9,361,653.00 1,973,820.38 9,361,653.00 1,973,820.38
Classification
by operation
territory
1. China 9,431,854,432.85 6,223,230,771.03 13,306,994,061.82 12,355,076,071.36 -248,988,447.76 -251,385,732.03 22,489,860,046.91 18,326,921,110.36
2. Other 854,260,004.31 615,805,463.71 854,260,004.31 615,805,463.71
countries
Classification
by the time of
goods transfer
1. Recognised
at a specific 10,286,114,437.16 6,839,036,234.74 13,306,994,061.82 12,355,076,071.36 -248,988,447.76 -251,385,732.03 23,344,120,051.22 18,942,726,574.07
point in time
2. Recognised
within a
specific time
period
Total 10,286,114,437.16 6,839,036,234.74 13,306,994,061.82 12,355,076,071.36 -248,988,447.76 -251,385,732.03 23,344,120,051.22 18,942,726,574.07
Other descriptions
□ Applicable √ Not applicable
(3).Description on performance obligations
□ Applicable √ Not applicable
(4).Description on allocation to remaining performance obligations
□ Applicable √ Not applicable
(5).Significant contract changes or significant transaction price adjustments
□ Applicable √ Not applicable
Other descriptions:
Details on revenue:
Amount in the current
Item Amount in the last period
period
Description on revenue from customer contracts 23,344,120,051.22 19,991,494,971.94
Rental income 7,184,276.81 4,820,651.38
Total 23,351,304,328.03 19,996,315,623.32
Notes to financial statements Page 172
Annual Report 2023
62. Taxes and surcharges
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount accounted for in the Amount accounted for in the
Item
current period previous period
Consumption tax
Business tax
Urban maintenance and
36,874,093.32 28,457,233.70
construction tax
Education surcharge 31,593,658.98 24,525,189.75
Resource tax
Property tax 15,552,280.02 9,658,389.33
Land use tax -294,609.04 1,182,692.61
Taxes and surcharges
Stamp duty 12,909,014.50 11,596,424.00
Others 140,003.79 168,594.94
Total 96,774,441.57 75,588,524.33
Other descriptions:
No
63. Selling expenses
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount accounted for in the Amount accounted for in the
Item
current period previous period
Salaries and benefits 461,747,483.61 419,102,211.06
Channel construction fee 128,748,286.97 108,797,588.41
Depreciation and amortization 189,443,014.45 186,670,564.42
Brand promotion fee 90,126,956.28 72,015,069.68
Business promotion fee 141,564,588.74 111,911,339.25
Others 538,612,583.30 459,719,130.61
Total 1,550,242,913.35 1,358,215,903.43
Other descriptions:
No
64. Administrative expenses
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount accounted for in the Amount accounted for in
Item
current period the previous period
Salaries and benefits 399,779,442.22 376,088,841.61
Depreciation and amortization 149,565,885.36 128,259,319.67
Office expense 16,989,750.23 19,523,321.71
Share-based Payments -48,387,010.93 3,956,675.57
Others 299,295,898.73 266,368,407.49
Total 817,243,965.61 794,196,566.05
Other descriptions:
No
Notes to financial statements Page 173
Annual Report 2023
65. R&D expenses
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount accounted for in the Amount accounted for in
Item
current period the previous period
Salaries and benefits 97,614,345.88 94,628,651.15
Inventory consumption 41,157,179.77 49,479,451.16
Others 38,753,617.94 39,445,541.59
Total 177,525,143.59 183,553,643.90
Other descriptions:
No
66. Finance expenses
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount accounted for in the Amount accounted for in
Item
current period the previous period
Interest expense 24,995,988.63 14,760,179.42
Including: Interest expense of lease liabilities 17,242,339.72 7,851,181.44
Less: Interest income -76,346,842.50 -38,938,757.91
Exchange gains and losses -10,704,793.25 -22,209,538.34
Others 7,378,094.64 5,020,891.59
Total -54,677,552.48 -41,367,225.24
Other descriptions:
No
67. Other income
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount accounted for in the Amount accounted for in the
Classification based on nature
current period previous period
Government subsidies 95,659,262.80 84,991,259.53
Handling charge on withholding
897,764.28 989,882.59
personnel income tax
Total 96,557,027.08 85,981,142.12
Other descriptions:
No
68. Investment income
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount accounted for Amount accounted for
Item
in the current period in the previous period
Long-term equity investment income accounted for
-6,197,315.17 -1,731,132.47
under the equity method
Investment income from disposal of long-term
546,554.12
equity investment
Investment income from held-for-trading financial
assets during the holding period
Dividend income from other equity instrument
investments during the holding period
Notes to financial statements Page 174
Annual Report 2023
Interest income from debt investment during the
holding period
Interest income from other debt investments during
the holding period
Investment income from disposal of held-for-trading
1,608,966.39 2,006,632.56
financial assets
Investment income from disposal of other equity
instrument investments
Investment income from disposal of debt investment
Investment income from disposal of other debt
investments
Gains from debt restructuring
Others 109,340.00
Total -3,932,454.66 275,500.09
Other descriptions:
No
69. Net gain on exposure hedging
□ Applicable √ Not applicable
70. Gain on change in fair value
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount accounted for in Amount accounted for in
Sources of income from changes in fair value
the current period the previous period
Held-for-trading financial assets 31,431,746.76 28,169,632.25
Including: Income from changes in fair value of
derivative financial instruments
Held-for-trading financial liabilities
Investment real estate measured at fair value
Changes in fair value of repurchase obligations -4,241,121.34 3,674,156.71
Total 27,190,625.42 31,843,788.96
Other descriptions:
No
71. Credit impairment losses
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount accounted for in the Amount accounted for in the
Item
current period previous period
Bad debt losses of notes receivable 499,961.10 903,576.33
Bad debt losses of accounts receivable 16,256,695.98 17,010,117.09
Bad debt losses of other receivables 5,073,521.77 -25,114,384.44
Impairment losses of debt investment
Impairment losses of other debt
investments
Bad debt losses of long-term receivables
Impairment losses related to financial
guarantee
Total 21,830,178.85 -7,200,691.02
Notes to financial statements Page 175
Annual Report 2023
Other descriptions:
No
72. Asset impairment losses
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount accounted for in the Amount accounted for in the
Item
current period previous period
I. Impairment losses of contract assets
II. Loss for decline in value of
inventories and loss for impairment of -11,744,806.55 16,955,178.28
contract performance cost
III. Impairment losses of long-term
equity investment
IV. Impairment losses of investment
real estate
V. Impairment losses of fixed assets 1,712,010.51
VI. Impairment losses of engineering
materials
VII. Impairment losses of
construction in progress
VIII. Impairment losses of productive
biological assets
IX. Impairment losses of oil and gas
assets
X. Impairment losses of intangible
assets
XI. Impairment losses of goodwill
XII. Others
Total -11,744,806.55 18,667,188.79
Other descriptions:
No
73. Gains from asset disposal
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount accounted for in the Amount accounted for in the
Item
current period previous period
Gaines or losses from disposal of
2,058,216.68 -26,233.78
fixed assets
Gaines or losses from disposal of
1,530,593.26 -5,388.75
right-of-use assets
Total 3,588,809.94 -31,622.53
Other descriptions:
No
74. Non-operating profits
Particulars on non-operating profits
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount accounted for in Amount accounted for in Amount included in the
Item
the current period the previous period current non-recurring
Notes to financial statements Page 176
Annual Report 2023
gains and losses
Total gains from
disposal of non-current 12,529.29 12,529.29
assets
Including: Gains from
disposal of fixed assets
Gains from
disposal of intangible
assets
Gains from exchange
of non-currency assets
Donations received
Government subsidies 51,531,223.80 51,699,514.78 51,531,223.80
Inventory profit 192,237.19 8,000.00 192,237.19
Liquidated damages
5,323,268.86 1,518,188.88 5,323,268.86
and fine income
Others 2,604,704.32 15,311,923.74 2,604,704.32
Total 59,663,963.46 68,537,627.40 59,663,963.46
Other descriptions:
□ Applicable √ Not applicable
75. Non-operating expenses
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount included in the
Amount accounted for in Amount accounted for in
Item current non-recurring
the current period the previous period
gains and losses
Total losses from
disposal of
non-current assets
Including: Losses
from disposal of fixed
assets
Losses from
disposal of intangible
assets
Losses from exchange
of non-currency assets
Offering of donations 4,658,536.77 5,026,224.99 4,658,536.77
Loss from damage
and retirement of 1,855,245.99 4,305,319.22 1,855,245.99
non-current assets
Fine late payment 3,877,795.12 1,688,283.64 3,877,795.12
Compensation
104,297.75 499,075.91 104,297.75
expenses
Others 306,577.81 613,232.39 306,577.81
Total 10,802,453.44 12,132,136.15 10,802,453.44
Other descriptions:
No
Notes to financial statements Page 177
Annual Report 2023
76. Income tax expenses
(1).Table of income tax expenses
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount accounted for in the Amount accounted for in the
Item
current period previous period
Current income tax expenses 327,076,490.56 320,204,998.68
Deferred income tax expenses 8,457,280.32 -10,687,376.95
Total 335,533,770.88 309,517,621.73
(2).Adjustment process of accounting profits and income tax expenses
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Amount accounted for in the current period
Total profits 1,979,472,772.78
Income tax expenses calculated at
296,920,915.92
statutory/applicable rates
Effect of applying different tax rates to
67,812,977.58
subsidiaries
Effect of adjusting income taxes of the previous
-41,695,533.97
periods
Effect of non-taxable income -570,911.06
Effect of non-deductible costs, expenses and
6,580,636.68
losses
Effect of deductible losses of deferred income tax
assets not recognised in the previous period
Tax effect of offsetting losses in previous years; -9,797,622.02
Effect of deductible temporary differences or
deductible losses of deferred income tax assets 16,283,307.75
not recognised in the current period
Income tax expenses 335,533,770.88
Other descriptions:
□ Applicable √ Not applicable
77. Other comprehensive income
√ Applicable □ Not applicable
For details, refer to Note VII (57) Other Comprehensive Income.
78. Items of the cash flow statement
(1).Cash related to operating activities
Other cash received from operating activities
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount accounted for in the Amount accounted for in the
Item
current period previous period
Recovery of current amount and advances 1,880,785,622.09 1,755,456,064.21
Special allowances and subsidies 123,163,692.08 127,381,296.13
Interest income 76,346,842.50 38,938,757.91
Non-operating profits 7,247,206.00 1,971,935.69
Total 2,087,543,362.67 1,923,748,053.94
Descriptions on other cash received from operating activities:
Notes to financial statements Page 178
Annual Report 2023
No
Cash paid for other operating activities
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount accounted for in the Amount accounted for in the
Item
current period previous period
Inter-company business 1,733,167,639.08 1,840,989,538.73
Sales expenses 850,115,497.82 720,503,239.35
Administration expenses 301,001,862.18 249,680,084.71
Financial expenses 7,289,624.92 4,962,743.50
Non-operating expenses 8,947,207.45 7,404,649.42
R&D expenses 37,474,114.96 38,426,323.24
Total 2,937,995,946.41 2,861,966,578.96
Descriptions on cash paid for other operating activities:
No
(2).Cash related to investing activities
Significant cash received related to investing activities
□ Applicable √ Not applicable
Significant cash paid related to investing activities
□ Applicable √ Not applicable
Other cash received relating to investing activities
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount accounted for in the Amount accounted for in the
Item
current period previous period
Compensation for the acquisition of
the original controlling shareholders 1,951,654.45
of Axus Stationery
Net cash received in the acquisition of
1,262,867.61
subsidiaries
Total 3,214,522.06
Description on other cash received relating to investing activities:
No
Other cash paid relating to investing activities
□ Applicable √ Not applicable
(3).Other cash received related to financing activities
Description on other cash received relating to financing activities:
□ Applicable √ Not applicable
Other cash paid for financing-related activities
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount accounted for in the Amount accounted for in the
Item
current period previous period
Repurchase payment of treasury shares 46,048,513.26 134,291,202.15
Lease payments related to the new lease
286,080,118.22 238,707,766.15
standards
Total 332,128,631.48 372,998,968.30
Notes to financial statements Page 179
Annual Report 2023
Descriptions on other cash paid for financing-related activities:
No
Changes in liabilities arising from financing activities
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Increase of the current period Decrease of the current period
Opening Closing
Item Non-cash Non-cash
balance Cash changes Cash changes balance
changes changes
Short-term 189,350,225.65 251,955,762.18 7,781,149.01 258,912,970.17 190,174,166.67
borrowings
Long-term 30,000,000.00 27,500.01 30,027,500.01
borrowings
Lease liabilities
(including 318,738,574.01 379,528,844.91 286,080,118.22 27,282,869.84 384,904,430.86
non-current liabilities
due within one year)
Other payables -
Repurchase 76,756,505.00 10,323,326.00 1,051,447.00 65,381,732.00
obligations of
restricted stocks
Treasury shares - 114,287,058.94 35,725,187.26 150,012,246.20
Stock exchange
Dividend payable 462,037,503.50 462,037,503.50
Total 699,132,363.60 317,680,949.44 849,374,997.43 1,017,353,917.89 28,334,316.84 820,500,075.74
(4).Notes to the presentation of cash flows on a net basis
□ Applicable √ Not applicable
(5).Significant activities and financial effects that do not involve current cash receipts and
payments but affect the financial position of the enterprise or may affect the enterprise's cash
flows in the future
□ Applicable √ Not applicable
79. Supplementary information for the cash flow statement
(1).Supplementary information for the cash flow statement
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Supplementary information Amount in the current period Amount in the last period
1. Reconciliation of net profit to cash flow from operating activities:
Net profit 1,643,939,001.90 1,355,378,832.38
Add: Impairment provisions of assets -11,744,806.55 18,667,188.79
Credit impairment losses 21,830,178.85 -7,200,691.02
Depreciation of fixed assets, oil and
gas assets, and productive biological 221,278,518.68 223,396,398.72
assets
Amortisation of right-of-use assets 242,168,906.00 220,354,767.27
Amortisation of intangible assets 20,217,366.34 21,503,151.71
Amortisation of long-term prepaid
62,468,994.99 70,393,392.44
expenses
Losses from disposal of fixed assets,
intangible assets and other long-term -3,588,809.94 31,622.53
assets ("-" refers to gains)
Losses from retirement of fixed assets 1,842,716.70 4,305,319.22
Notes to financial statements Page 180
Annual Report 2023
("-" refers to gains)
Losses from changes in fair value ("-"
-27,190,625.42 -31,843,788.96
refers to gains)
Financial expenses ("-" refers to
20,133,278.55 4,367,428.32
income)
Investment losses ("-" refers to gains) 3,932,454.66 -275,500.09
Decrease in deferred income tax assets
-6,766,187.97 -68,428,233.46
("-" refers to increase)
Increase in deferred income tax
15,223,468.27 57,744,773.98
liabilities ("-" refers to decrease)
Decrease in inventories ("-" refers to
44,990,472.03 -95,461,097.71
increase)
Decrease in operating receivables ("-"
181,273,120.89 244,707,130.81
refers to increase)
Increase in operating payables ("-"
186,592,569.11 -665,856,867.85
refers to decrease)
Others
Net cash flow generated from
2,616,600,617.09 1,351,783,827.08
operating activities
2. Major investing and financing activities not involving cash payment and receipts:
Debts converted to capital
Convertible company bonds due within
one year
Fixed assets acquired under financing
leases
3. Particulars on net changes in cash and cash equivalents:
Closing balance of cash 3,708,085,136.83 1,828,019,243.04
Less: Opening balance of cash 1,828,019,243.04 1,539,484,614.69
Add: Closing balance of cash
equivalents
Less: Opening balance of cash
equivalents
Net increase in cash and cash
1,880,065,893.79 288,534,628.35
equivalents
(2).Net cash amount paid for the acquisition of subsidiaries in the current period
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount
Cash or cash equivalents paid in the current period for business combinations that
47,547,771.00
occurred in the current period
Including: Hubei Chaoxin Property Co., Ltd.（湖北潮信置业有限公司） 47,547,771.00
Less: Cash and cash equivalents held by subsidiaries on the purchase date 3,389,721.48
Including: Hubei Chaoxin Property Co., Ltd.（湖北潮信置业有限公司） 3,389,721.48
Plus: Cash or cash equivalents paid in the current period for business
combinations that occurred in previous periods
Net cash paid by subsidiaries 44,158,049.52
Other descriptions:
No
(3).Net cash amount received from the disposal of subsidiaries in the current period
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Notes to financial statements Page 181
Annual Report 2023
Amount
Cash or cash equivalents received in the current period from the
20,003,204.01
disposal of subsidiaries in the current period
Including: Luoyang M&G Stationery Sales Co., Ltd. 20,003,204.01
Less: Cash and cash equivalents held by subsidiaries on the day
22,446.00
when control is lost
Including: Luoyang M&G Stationery Sales Co., Ltd. 22,446.00
Add: Cash or cash equivalents received in the current period from
the disposal of subsidiaries in previous periods
Net cash amount received from the disposal of subsidiaries 19,980,758.01
Other descriptions:
No
(4).Composition of cash and cash equivalents
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
I. Cash 3,708,085,136.83 1,828,019,243.04
Including: Cash on hand 612,487.27 764,880.86
Bank deposits readily available for
3,633,121,154.48 1,739,065,541.16
payment
Other cash and equivalents readily
74,351,495.08 88,188,821.02
available for payment at any time
Due from central bank available for
payment
Due from placements with banks and
other financial institutions
Call loan to banks and other financial
institutions
II. Cash equivalents
Including: Bond investments due within
three months
III. Closing balance of cash and cash
3,708,085,136.83 1,828,019,243.04
equivalents
Including: Cash and cash equivalents of
which the use is restricted for the parent
company or subsidiaries within the group
(5).Presentation of cash and cash equivalents with restricted use
□ Applicable √ Not applicable
(6).Monetary funds not classified as cash and cash equivalents
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount in the current Amount in the last
Item Reason
period period
Deposits for bank
10,000,000.00 Pledge
acceptance bills
Deposits for letter of credit 3,857,149.77 3,245,719.57 Pledge
Performance bond 15,715,590.36 21,427,837.65 Pledge
Fixed-term deposits Period exceeding three
1,500,000,000.00 1,510,000,000.00
exceeding three months months at maturity
Notes to financial statements Page 182
Annual Report 2023
Frozen funds 1,010,742.92 Frozen
Others 452,897.20 396,376.98 Pledge
Total 1,531,036,380.25 1,535,069,934.20 /
Other descriptions:
□ Applicable √ Not applicable
80. Notes to items of the statement of changes in owners' equity
Description on "other" item name and adjustment amount adjusted for balance at the end of the previous
year:
□ Applicable √ Not applicable
81. Foreign currency monetary items
(1).Foreign currency monetary items
√ Applicable □ Not applicable
Unit: Yuan
Foreign currency RMB translated at the
Translation foreign
Item balance at the end of end of the period
exchange rate
the period balance
Cash and equivalents - - 152,541,981.82
Including: USD 14,046,208.40 7.0827 99,485,080.26
EURO 1,295,501.64 7.8592 10,181,606.45
JPY 1,121.00 0.0502 56.29
HKD 12,198.74 0.9062 11,054.74
GBP 375.00 9.0411 3,390.41
VND 7,063,349,439.00 0.0003 2,069,560.95
NOK 42,286,701.57 0.6963 29,443,463.01
DKK 122,038.87 1.0536 128,583.78
SGD 2,079,942.35 5.3772 11,184,266.00
SEK 49,114.88 0.7110 34,919.93
Accounts receivable - - 177,051,838.29
Including: USD 22,174,642.10 7.0827 157,056,337.60
EURO 76,332.44 7.8592 599,911.91
VND 212,734,080.00 0.0003 62,331.07
NOK 27,766,424.72 0.6963 19,333,257.71
Long-term borrowings - -
Including: USD
EURO
HKD
Accounts payable - - 72,225,058.69
Including: USD 7,463,713.00 7.0827 52,863,240.07
VND 14,612,556,821.86 0.0003 4,281,478.25
NOK 21,658,384.84 0.6963 15,080,340.37
Other receivables - - 398,425.94
Including: VND 864,430,841.00 0.0003 253,278.18
USD 8,700.00 7.0827 61,619.49
HKD 87,800.00 0.9062 79,566.12
NOK 5,690.44 0.6963 3,962.15
Other payables - - 14,741,177.15
Including: USD 2,001,786.20 7.0827 14,178,051.12
VND 948,396,154.00 0.0003 277,880.01
HKD 105,800.00 0.9062 95,878.08
NOK 271,970.23 0.6963 189,367.94
Notes to financial statements Page 183
Annual Report 2023
Repurchase obligations - - 35,878,223.18
Including: NOK 51,528,304.13 0.6963 35,878,223.18
Other descriptions:
No
(2).Descriptions on overseas operating entities, including: for important overseas business
entities, their main overseas business locations, bookkeeping currency and selection basis
shall be disclosed; in case of any change in the bookkeeping currency, the reasons for such
change shall be also disclosed
□ Applicable √ Not applicable
82. Lease
(1) As a lessee
√ Applicable □ Not applicable
Variable lease payments not included in the measurement of lease liabilities
□ Applicable √ Not applicable
Rental of simplified short-term leases and leases of low-value assets
√ Applicable □ Not applicable
The simplified treatment of short-term lease expenses included in relevant asset costs or current period
expenses amounted to RMB6,952,046.63. Additionally, the simplified treatment of low-value asset lease
expenses included in relevant asset costs or current period expenses (excluding short-term lease
expenses of low-value assets) amounted to RMB514,705.94.
Sale and leaseback transactions and basis of judgment
□ Applicable √ Not applicable
Total cash outflows related to leases was 305,681,177.89 (Unit: Yuan Currency: RMB)
(2) As a lessor
Operating leases as a lessor
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Including: income relating to
Item Rental income variable lease payments not
recognised as lease receipts
Operating lease income 7,184,276.81
Total 7,184,276.81
Financial leases as a lessor
□ Applicable √ Not applicable
Reconciliation statement of undiscounted lease receipts and net investment in leases
□ Applicable √ Not applicable
Undiscounted lease receipts for the next five years
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Annual undiscounted lease receipts
Item
Closing balance Opening balance
First year 7,264,402.90 5,998,811.18
Second year 7,369,588.60 6,263,921.58
Third year 7,330,474.93 6,394,495.61
Notes to financial statements Page 184
Annual Report 2023
Fourth year 7,484,698.33 6,627,859.14
Fifth year 1,192,738.38 6,765,541.09
Total undiscounted lease receipts
0.00 1,720,828.69
after five years
(3) Profit or losses on sales recognised under finance leases as a producer or distributor
□ Applicable √ Not applicable
Other descriptions
No
83. Others
□ Applicable √ Not applicable
VIII. R&D expenses
(1). Presented based on nature of expense
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount accounted for in the Amount accounted for in
Item
current period the previous period
Employee benefits 97,614,345.88 94,628,651.15
Consumption materials 41,157,179.77 49,479,451.16
Others 38,753,617.94 39,445,541.59
Total 177,525,143.59 183,553,643.90
Including: Expensed R&D expenditure 177,525,143.59 183,553,643.90
Capitalised R&D expenditure
Other descriptions:
No
(2). Development expenses on R&D projects eligible for capitalisation
□ Applicable √ Not applicable
Significant capitalised R&D projects
□ Applicable √ Not applicable
Provision for impairment of development expenses
□ Applicable √ Not applicable
Other descriptions
No
(3). Significant outsourced ongoing research projects
□ Applicable √ Not applicable
IX. Change in Consolidation Scope
1. Business combination not under common control
□ Applicable √ Not applicable
2. Business combination not under common control
□ Applicable √ Not applicable
Notes to financial statements Page 185
Annual Report 2023
3. Reverse acquisition
□ Applicable √ Not applicable
Notes to financial statements Page 186
Annual Report 2023
4. Disposal of subsidiaries
Whether there were any transactions or events during the current period in which control of subsidiaries was lost
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Difference
between the Recognition
disposal price method and
Carrying Fair value of Amount of
and the major
value of remaining other
Proportion Disposal attributable assumptions
Residual remaining equity at the comprehensive
of method share of net Gains or losses of fair value
Control Basis for equity equity at the level of the income related
Disposal price disposals at assets of the from of remaining
right determining proportion level of the consolidated to the equity
Name of at control at control control subsidiary at re-measurement equity at the
losing control right on the date consolidated financial investments of
subsidiaries right losing right right the level of of remaining level of the
time losing time of losing financial statements former
time point losing losing consolidated equity at fair consolidated
point point control statements on on the day subsidiaries
time point time financial value financial
power (%) the day when when the transferred into
(%) point statements statements on
the control control right investment
corresponding the day when
right is lost is lost profit or loss
to the the control
investment right is lost
disposal
Luoyang M&G
Stationery Sales 1 External
Co., Ltd. (洛阳 January 20,003,204.01 100.00 Transfer of
equity 546,554.12 0.00
control
晨光文具销售 2023 transfer
有限公司)
Other descriptions:
□ Applicable √ Not applicable
Whether there was a step-by-step disposal of investments in subsidiaries through multiple transactions and loss of control during the current period
□ Applicable √ Not applicable
Other descriptions:
□ Applicable √ Not applicable
5. Changes in scope of consolidated financial statements for other reasons
Descriptions on changes in the scope of consolidated financial statements for other reasons (e.g., establishing subsidiaries, clearing subsidiaries, etc.) and their
related circumstances:
Notes to financial statements Page 187
Annual Report 2023
√ Applicable □ Not applicable
Two new subsidiary companies were established during the current period: Shanghai Yichengxiang E-commerce Co., Ltd.（上海益诚祥电子商务有限公司） and
Shanghai M&G Colipu Technology Development Co., Ltd.（海晨光科力普科技发展有限公司）
Additionally, one subsidiary company was acquired during the current period, which does not constitute a business: Hubei Chaoxin Real Estate Co., Ltd.（湖北潮信
置业有限公司）
6. Others
□ Applicable √ Not applicable
Notes to financial statements Page 188
Annual Report 2023
X. Equity in Other Entities
1. Equity in subsidiaries
(1).Composition of the corporate group
√ Applicable □ Not applicable
Unit: 0’000 Currency: RMB
Shareholding
Subsidiary Main place Registered Registered Nature of ratio (%) Acquisition
name of business capital address the business way
Direct Indirect
Shanghai M&G Colipu Office Retail,
Supplies Co., Ltd.（上海晨光科力 Shanghai 66,000.00 Shanghai wholesale, 70 Establishment
普办公用品有限公司） etc.
Shanghai M&G Stationery & Gift Production,
Co., Ltd.（上海晨光文具礼品有 Shanghai 19,941.94 Shanghai sale and so 100 Establishment
限公司） forth
Shanghai M&G Stationery Sales Retail,
Co., Ltd.（上海晨光文具销售有 Shanghai 1,300.00 Shanghai wholesale, 100 Establishment
限公司） etc.
Guangzhou M&G
Stationery&Gifts Sales Co., Ltd. Retail,
Guangzhou 3,950.00 Guangzhou wholesale, 100 Establishment
（广州晨光文具礼品销售有限公
etc.
司）
Yiwu Chenxing Stationery Co., Retail,
Ltd.（义乌市晨兴文具用品有限 Yiwu 1,800.00 Yiwu wholesale, 100 Establishment
公司） etc.
Acquired by
business
Zhejiang Benwei Technology Co., Information
combination
Yiwu 1,000.00 Yiwu technology 100
Ltd. (浙江本味科技有限公司) not under
services
common
control
M&G Life Enterprise Retail,
Management Co., Ltd.（晨光生活 Shanghai 10,000.00 Shanghai wholesale, 100 Establishment
馆企业管理有限公司） etc.
Shanghai M&G Jiamei Stationery Production,
Co., Ltd.（上海晨光佳美文具有 Shanghai 3,000.00 Shanghai sale and so 100 Establishment
限公司） forth
Shanghai M&G Information E-commerce
Technology Co., Ltd.（上海晨光 Shanghai 5,000.00 Shanghai business, 55 Establishment
信息科技有限公司） etc.
Jiangsu M&G Life Enterprise Retail,
Management Co., Ltd.（江苏晨光 Nanjing 2,000.00 Nanjing wholesale, 100 Establishment
生活馆企业管理有限公司） etc.
Zhejiang New M&G Life
Enterprise Management Co., Ltd. Retail,
（浙江新晨光生活馆企业管理有 Hangzhou 3,000.00 Hangzhou wholesale, 100 Establishment
etc.
限公司）
Jiumu M&G Store Enterprise Retail,
Management Co., Ltd.（九木杂物 Shanghai 5,000.00 Shanghai wholesale, 85 Establishment
社企业管理有限公司） etc.
Shanghai M&G Zhenmei Retail, Acquired by
Stationery Co., Ltd.（上海晨光珍 Shanghai 1,000.00 Shanghai wholesale, 100 business
美文具有限公司） etc. combination
Notes to financial statements Page 189
Annual Report 2023
under
common
control
Acquired by
Harbin M&G Sanmei Stationery business
Retail,
Co., Ltd.（哈尔滨晨光三美文具 combination
Harbin 1,900.00 Harbin wholesale, 100
under
有限公司） etc.
common
control
Acquired by
Zhengzhou M&G business
Retail,
combination
Stationery&Gifts Co., Ltd.（郑州 Zhengzhou 2,600.00 Zhengzhou wholesale, 100
under
晨光文具礼品有限责任公司） etc.
common
control
Acquired by
Shenzhen Erya Creative and business
Cultural Development Co., Ltd. Design and combination
Shenzhen 2,000.00 Shenzhen 51
（深圳尔雅文化创意发展有限公 so forth not under
司） common
control
Retail,
Shanghai M&G Office Stationery
Shanghai 5,000.00 Shanghai wholesale, 100 Establishment
Co., Ltd.
etc.
Lianyungang Colipu Office Retail,
Supplies Co., Ltd.（连云港市科力 Lianyungang 100.00 Lianyungang wholesale, 100 Establishment
普办公用品有限公司） etc.
Shenyang M&G Colipu Office Retail,
Supplies Co., Ltd.（沈阳晨光科力 Shenyang 50.00 Shenyang wholesale, 100 Establishment
普办公用品有限公司） etc.
Hangzhou Sanmei M&G Retail,
Stationery Co., Ltd.（杭州三美晨 Hangzhou 1,800.00 Hangzhou wholesale, 100 Establishment
光文具有限公司） etc.
Acquired by
business
Production,
Axus Stationery (Shanghai) combination
Shanghai 8,100.00 Shanghai sale and so 56
Company Ltd. not under
forth
common
control
Acquired by
business
Jiangsu Marco Pen Co., Ltd.（江苏 Production,
combination
Siyang 5,000.00 Siyang sale and so 100
马可笔业有限公司） forth
not under
common
control
Acquired by
Changchun Macro Stationery Co., business
Production,
Ltd.（长春马可文教用品有限公 Changchun combination
4,000.00 Changchun sale and so 100
not under
司） forth
common
control
Acquired by
Production, business
Yili Senlai Wood Co., Ltd.（伊犁
Yili 2,000.00 Yili sale and so 100 combination
森徕木业有限公司） forth not under
common
Notes to financial statements Page 190
Annual Report 2023
control
Acquired by
business
Retail,
Axus Stationery (Hong Kong) combination
Hong Kong 550.00 Hong Kong wholesale, 100
Company Ltd. not under
etc.
common
control
Acquired by
business
Production,
combination
International stationery company Vietnam 100.00 Vietnam sale and so 100
not under
forth
common
control
Shanghai Qizhihaowan Culture
and Creativity Co., Ltd.（上海奇只 Creative
Shanghai 10,000.00 Shanghai 57 Establishment
service
好玩文化创意有限公司）
Shanghai Chenxun Enterprise
Management Co., Ltd.（上海晨讯 Enterprise
Shanghai 22,000.00 Shanghai 100 Establishment
management
企业管理有限公司）
Shanghai Colipu Information
Software
Technology Co., Ltd.（上海科力 Shanghai 500.00 Shanghai 100 Establishment
development
普信息科技有限公司）
Shanghai Meixin Stationery Co., Wholesale
Shanghai 5,000.00 Shanghai 100 Establishment
Ltd. (上海美新文具有限公司) and retail
SHANGHAI M&G
Enterprise
STATIONERY (SINGAPORE) Singapore 3,966.73 Singapore 100 Establishment
management
PTE. LTD.
M&G Jiumu Enterprise
Management (Beijing) Co., Ltd. Wholesale
Beijing 100.00 Beijing 100 Establishment
（晨光九木企业管理（北京）有 and retail
限公司）
Acquired by
business
Holding combination
Back to School Holding AS Norway 99.55 Norway 91.4
company not under
common
control
Acquired by
business
Production,
combination
Beckmann AS Norway 66.00 Norway sale and so 100
not under
forth
common
control
Acquired by
business
Beckmann Norway GmbH Retail,
combination
Germany 2.50 Germany wholesale, 100
（Germany） not under
etc.
common
control
Retail,
United United
Beckmann Norway Inc 0.0001 wholesale, 100 Establishment
States States
etc.
Retail,
Beckmann Norway GmbH
Austria 3.50 Austria wholesale, 100 Establishment
（Austria）
etc.
Notes to financial statements Page 191
Annual Report 2023
Guangdong South China Retail,
Stationery Co., Ltd. (广东华南文 Huizhou 5,000.00 Huizhou wholesale, 100 Establishment
教用品有限公司) etc.
Shanghai M&G Colipu
Technology Development Co., Technology
Ltd.（上海晨光科力普科技发展 Shanghai 10,000.00 Shanghai
services
100 Establishment
有限公司）
Shanghai Yichengxiang Retail,
E-commerce Co., Ltd.（上海益诚 Shanghai 50.00 Shanghai wholesale, 100 Establishment
祥电子商务有限公司） etc.
General
Acquisition
goods
Hubei Chaoxin Real Estate Co., that does not
Wuhan 6,000.00 Wuhan storage and 100
Ltd.（湖北潮信置业有限公司） constitute a
warehousing
business
services
Additional Note: The registered capital currency for Axus Stationery (Hong Kong) Company Ltd.
is HKD, International Stationery Company and Beckmann Norway Inc. is USD, SHANGHAI M&G
STATIONERY (SINGAPORE) PTE. LTD. is SGD, Back to School Holding AS and Beckmann AS is
NOK, Beckmann Norway GmbH (Germany) and Beckmann Norway GmbH (Austria) is EURO.
Descriptions on the situation that the shareholding ratio in the subsidiary is different from the share of
the voting rights:
No
Basis for holding half or less of the voting rights of the investee but still controlling the investee and
holding more than half of the voting rights but not controlling the investee:
No
Basis for controlling important structured entities included in the scope of consolidated financial
statements:
No
Basis for determining whether the Company is an agent or a principal:
No
Other descriptions:
No
(2).Important non-wholly owned subsidiaries
√ Applicable □ Not applicable
Unit: 0’000 Currency: RMB
Profits and losses Dividends declared
Minority attributable to and distributed to Minority equity
Name of
shareholding minority minority balance at the end
subsidiaries
ratio shareholders in the shareholders in the of the period
current period current period
Shanghai M&G
Colipu Office
Supplies Co.,
Ltd.（上海晨光 30.00% 12,036.20 47,607.05
科力普办公用品
有限公司）
Descriptions on the situation that the shareholding ratio of minority shareholders in the subsidiary is
different from that of the voting rights:
□ Applicable √ Not applicable
Notes to financial statements Page 192
Annual Report 2023
Other descriptions:
□ Applicable √ Not applicable
(3).Major financial information of important non-wholly owned subsidiaries
√ Applicable □ Not applicable
Unit: 0’000 Currency: RMB
Closing balance Opening balance
Name of
subsidiaries Current Non-current Total Current Non-current Total Current Non-current Total Current Non-current Total
assets assets assets liabilities liabilities liabilities assets assets assets liabilities liabilities liabilities
Shanghai
M&G
Colipu
Office
Supplies
Co., Ltd. 573,460.50 17,296.27 590,756.77 425,711.43 6,355.17 432,066.60 451,852.77 13,961.42 465,814.19 342,184.67 4,453.45 346,638.12
（上海晨
光科力普
办公用品
有限公司）
Amount accounted for in the current period Amount accounted for in the previous period
Cash
Cash flow
Name of Total flow Total
Net Net from
subsidiaries Revenue comprehensive from Revenue comprehensive
profit profit operating
income operating income
activities
activities
Shanghai M&G
Colipu Office
Supplies Co.,
Ltd.（上海晨光 1,330,699.41 40,120.65 40,120.65 63,835.84 1,092,965.31 37,156.87 37,156.87 42,994.26
科力普办公用
品有限公司）
Other descriptions:
No
(4).Significant restrictions on the use of corporate group assets and the liquidation of corporate
group debts
□ Applicable √ Not applicable
(5).Financial support or other support provided to structured entities included in the scope of
consolidated financial statements
□ Applicable √ Not applicable
Other descriptions:
□ Applicable √ Not applicable
2. Transactions which result in a change in the share of owners' equity in the subsidiary but the
Company still controls the subsidiary
□ Applicable √ Not applicable
Notes to financial statements Page 193
Annual Report 2023
3. Equity in joint ventures or associates
√ Applicable □ Not applicable
(1).Important joint ventures or associates
□ Applicable √ Not applicable
(2).Major financial information of important joint ventures
□ Applicable √ Not applicable
(3).Major financial information of important associates
□ Applicable √ Not applicable
(4).Summary financial information of unimportant joint ventures and associates
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Opening balance/Amount
Closing balance/Amount
accounted for in the previous
accounted for in the current period
period
Joint ventures:
Total carrying value of
investments
Total of the following items calculated according to the shareholding ratio
- Net profits
- Other comprehensive income
- Total comprehensive income
Associates:
Total carrying value of
37,232,112.47 39,726,537.12
investments
Total of the following items calculated according to the shareholding ratio
- Net profits -6,197,315.17 -1,731,132.47
- Other comprehensive income -45,383.25 -55,032.21
- Total comprehensive income -6,242,698.42 -1,786,164.68
Other descriptions
No
(5).Descriptions on significant limitation of the ability of a joint venture or associate to transfer
funds to the Company
□ Applicable √ Not applicable
(6).Excess losses incurred by a joint venture or associate
□ Applicable √ Not applicable
(7).Unrecognised commitments related to joint venture investment
□ Applicable √ Not applicable
(8).Contingent liabilities related to joint venture or associate investment
□ Applicable √ Not applicable
4. Important joint operations
□ Applicable √ Not applicable
Notes to financial statements Page 194
Annual Report 2023
5. Equity in structured entities not included in the consolidated financial statements
Descriptions on structured entities not included in the consolidated financial statements:
□ Applicable √ Not applicable
6. Others
□ Applicable √ Not applicable
XI. Government subsidies
1. Government subsidies recognised at the end of the current period based on amounts
receivable
□ Applicable √ Not applicable
Reasons for not receiving the projected amount of government subsidies at the projected point in time
□ Applicable √ Not applicable
2. Liability items involving government subsidies
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount Other
Subsidies
Financial recognised as Other income changes
Opening increased in Closing Related to
statement non-operating entered in the in the
balance the current balance assets/income
item income in the current period current
period
current period period
Deferred
46,210,203.99 3,750,000.00 15,610,400.40 34,349,803.59 Asset-related
income
Total 46,210,203.99 3,750,000.00 15,610,400.40 34,349,803.59 /
3. Government subsidies recognised as profit and loss of the current period
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount accounted for in the Amount accounted for in the
Type
current period previous period
Asset-related 15,610,400.40 5,582,134.73
Income-related 131,580,086.20 131,108,639.58
Total 147,190,486.60 136,690,774.31
Other descriptions:
No
XII. Risks Associated with Financial Instruments
1. Financial instrument risk
√ Applicable □ Not applicable
The Company faces various financial risks in its business operations: credit risk, liquidity risk and
market risk (including exchange rate risk, interest rate risk and other price risk). The above financial
risks and the risk management policies adopted by the Company to reduce these risks are as follows:
The Board of Directors is responsible for planning and establishing the Company's risk
management structure, formulating the Company's risk management policies and related guidelines, and
supervising the implementation of risk management measures. The Company has formulated risk
management policies to identify and analyse the risks faced by the Company. These risk management
policies clearly stipulate specific risks, covering many aspects in the management of market risk, credit
risk and liquidity risk. The Company regularly evaluates the market environment and changes in the
Company's business activities to determine whether to update the risk management policies and systems.
The Company's risk management is carried out by the Risk Management Committee in accordance with
Notes to financial statements Page 195
Annual Report 2023
the policies approved by the Board of Directors. The Risk Management Committee works closely with
other business departments of the Company to identify, evaluate and avoid related risks. The Internal
Audit Department of the Company conducts regular audits on risk management control and procedures,
and reports the audit results to the Audit Committee of the Company.
The Company diversifies the risk of financial instruments through appropriate diversified
investment and business portfolios, and reduces the risks relating to concentration in a single industry,
specific region or specific counterparty through formulation of corresponding risk management policies.
(I) Credit risk
Credit risk refers to the risk of the Company's financial losses due to the failure of the counterparty
to perform its contractual obligations.
The main sources of credit risk for the Company primarily arise from cash and equivalents, bills
receivable, accounts receivable, financing of accounts receivable, and other receivables.
The Company's monetary funds are mainly bank deposits deposited in reputable state-owned banks
and other large and medium-sized listed banks with high credit ratings, thus the Company believes that
there are no significant credit risks and almost no major losses caused by bank defaults.
In addition, for notes receivable, accounts receivable, financing receivables and other receivables,
the Company sets relevant policies to control credit risk exposure. The Company evaluates the
customer's credit qualifications and sets the corresponding credit period based on the customer's
financial status, possibility of obtaining guarantees from a third party, credit history and other factors
such as current market conditions. The Company regularly monitors customer credit records. For
customers with poor credit records, the Company uses written dunning and shortens or cancels the credit
period, etc., to ensure that the Company's overall credit risk is within the controllable range.
(II) Liquidity risk
Liquidity risk is the risk of a shortage of funds of the Company when the Company is performing
its obligation to settle in the form of delivery of cash or other financial assets.
The Company's policy is to ensure that there is sufficient cash to pay off the debts due. Liquidity
risk is centrally controlled by the Company's Finance Department. Finance Department ensures that the
Company has sufficient funds to repay debts under all reasonable forecasts by monitoring cash balances,
marketable securities at any time, and rolling forecasts of the cash flows in the coming 12 months.
Finance Department also continuously monitors whether the Company complies with the provisions of
the loan agreement and obtains commitments from major financial institutions to provide sufficient
reserve funds so as to meet short- and long-term funding needs.
Financial liabilities of the Company are presented as unrealized contractual cash flows on the
maturity date as follows:
Closing balance
Item Immediate Total undiscounted
Within one year One to two years Two to five years Above five years Carrying value
repayment contract amount
Short-term
174,166.67 190,000,000.00 190,174,166.67 190,174,166.67
borrowings
Derivative
1,357,106.71 1,357,106.71 1,357,106.71
financial liabilities
Accounts payable 4,854,339,509.13 4,854,339,509.13 4,854,339,509.13
Other payables 537,102,511.17 537,102,511.17 537,102,511.17
Non-current
liabilities due 235,994,248.56 235,994,248.56 222,168,448.30
within one year
Long-term
27,500.01 30,000,000.00 30,027,500.01 30,027,500.01
borrowings
Lease liabilities 115,943,987.99 88,789,953.19 4,726,026.03 209,459,967.21 198,614,205.74
Total 201,666.68 5,818,793,375.57 145,943,987.99 88,789,953.19 4,726,026.03 6,058,455,009.46 6,033,783,447.73
Balance at the end of the year
Two to
Item Immediate One to Above five Total undiscounted contract
Within one year five Carrying value
repayment two years years amount
years
Short-term borrowings 176,000.00 189,174,225.65 189,350,225.65 189,350,225.65
Derivative financial liabilities 881,465.28 881,465.28 881,465.28
Accounts payable 3,998,633,387.71 3,998,633,387.71 3,998,633,387.71
Other payables 492,874,360.46 492,874,360.46 492,874,360.46
Total 176,000.00 4,681,563,439.10 4,681,739,439.10 4,681,739,439.10
Notes to financial statements Page 196
Annual Report 2023
(III) Market risk
Market risk of financial instruments is the risk that the fair value or future cash flows of financial
instruments will fluctuate due to changes in market prices including exchange rate risk, interest rate risk
and other price risks.
1. Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate due to changes in market rates.
Interest-bearing financial instruments with fixed and floating rates expose the Company to fair
value interest rate risk and cash flow interest rate risk, respectively. The Company determines the
percentages of fixed interest rate instruments and floating interest rate instruments according to the
market environment, and maintains an appropriate combination of fixed interest rate instruments and
floating interest rate instruments through regular review and monitoring. When necessary, the Company
adopts interest rate swap instruments to hedge the interest rate risk.
As of 31 December 2023, assuming all other variables remain constant, a 100 basis points increase
or decrease in the borrowing interest rate calculated at a floating rate will result in a decrease or increase
of RMB2.2 million in the net profit of the Company (as of 31 December 2022: RMB1.8917 million).
Management believes that a 100 basis points change reasonably reflects the reasonable range of interest
rate fluctuations for the next year.
2. Exchange rate risk
Exchange rate risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate due to changes in foreign exchange rates.
The Company continuously monitors the scale of foreign-currency transactions and
foreign-currency assets and liabilities to minimise foreign exchange risks. In addition, the Company may
also sign forward foreign exchange contracts or currency swap contracts to avoid exchange rate risk.
Foreign exchange risk faced by the Company mainly comes from financial assets and liabilities
denominated in USD, and the amounts of foreign currency financial assets and liabilities converted into
RMB are shown below:
Closing balance Balance at the end of the year
Item Other foreign Other foreign
USD Total USD Total
currencies currencies
Cash and equivalents 99,485,080.26 53,056,901.56 152,541,981.82 91,606,085.48 41,146,285.88 132,752,371.36
Accounts receivable 157,056,337.60 19,995,500.69 177,051,838.29 141,742,280.35 22,444,761.73 164,187,042.08
Other receivables 61,619.49 336,806.45 398,425.94 475,144.01 475,144.01
Total foreign currency
256,603,037.35 73,389,208.70 329,992,246.05 233,348,365.83 64,066,191.62 297,414,557.45
financial assets
Short-term borrowings 5,174,225.65 5,174,225.65
Non-current liabilities
35,878,223.18 35,878,223.18 16,715,043.39 16,715,043.39
due within one year
Accounts payable 52,863,240.07 19,361,818.62 72,225,058.69 3,409,725.11 17,922,355.81 21,332,080.92
Other payables 14,178,051.12 563,126.03 14,741,177.15 83,473.52 867,177.79 950,651.31
Estimated liabilities 14,922,058.45 14,922,058.45
Total foreign currency
67,041,291.19 55,803,167.83 122,844,459.02 3,493,198.63 55,600,861.09 59,094,059.72
financial liabilities
As of 31 December 2023, assuming all other variables remain constant, a 5% appreciation or
depreciation of the RMB against foreign currencies will result in an increase or decrease of
RMB10.3574 million in the net profit of the Company (as of 31 December 2022: RMB11.916 million).
Management believes that a 5% change reasonably reflects the reasonable range of RMB fluctuations
against foreign currencies for the next year.
2. Hedging
(1) The Company conducts hedging operations for risk management
□ Applicable √ Not applicable
Other descriptions
□ Applicable √ Not applicable
(2) The Company conducts qualifying hedging operations and applies hedge accounting
□ Applicable √ Not applicable
Notes to financial statements Page 197
Annual Report 2023
Other descriptions
□ Applicable √ Not applicable
(3) The Company conducts hedging operations for risk management, expects to achieve its risk
management objectives, but does not apply hedge accounting
□ Applicable √ Not applicable
Other descriptions
□ Applicable √ Not applicable
3. Transfer of financial asset
(1) Classification of transfer modalities
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount of Basis for
Nature of financial
Transfer modality financial assets Derecognition determining
assets transferred
transferred derecognition
Almost all risks
and remuneration
Bank acceptance
Bill endorsement 14,783,368.02 Terminated of the ownership
bills
have been
transferred
Commercial
Bill endorsement 2,706,627.49 Non-terminated Not applicable
acceptance draft
Finance company
Bill endorsement 15,945,243.71 Non-terminated Not applicable
acceptance bills
Assignment or Digital accounts
subdivision receivable claims 9,228,481.31 Non-terminated Not applicable
transfer certificates
Factoring of Digital accounts
accounts receivable claims 2,500,000.00 Non-terminated Not applicable
receivable certificates
Total / 45,163,720.53 / /
(2) Financial assets derecognised as a result of a transfer
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Modality for the transfer Amount of financial Gains or losses related
Item
of financial assets assets derecognised to derecognition
Bank acceptance bills Bill endorsement 14,783,368.02
Total / 14,783,368.02
(3) Transferred financial assets that continue to be involved
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount of assets Amount of liabilities
Asset transfer
Item generated through generated through
modality
continuing involvement continuing involvement
Commercial acceptance
Bill endorsement 2,706,627.49 2,706,627.49
draft
Finance company
Bill endorsement 15,945,243.71 15,945,243.71
acceptance bills
Digital accounts receivable Factoring of 2,500,000.00 2,500,000.00
Notes to financial statements Page 198
Annual Report 2023
claims certificates accounts receivable
Digital accounts receivable Assignment or
9,228,481.31 9,228,481.31
claims certificates subdivision transfer
Total / 30,380,352.51 30,380,352.51
Other descriptions
□ Applicable √ Not applicable
XIII. Disclosure of Fair Value
1. Closing fair value of assets and liabilities measured at fair value
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Closing fair value
Level-2 fair Level-3 fair
Item Level-1 fair value
value value Total
measurement
measurement measurement
I. Continuous fair
value measurement
(I) Trading financial
assets
1. Financial assets at
fair value through
profit or loss
(1) Debt instrument
investment
(2) Equity instrument
investment
(3) Derivative financial
assets
(4) Others 1,402,518,595.12 1,402,518,595.12
2. Financial assets
designated as at fair
value through profit or
loss
(1) Debt instrument
investment
(2) Equity instrument
investment
(II) Other debt
investments
(III) Other equity
9,175,073.42 9,175,073.42
instrument investments
(IV) Investment real
estate
1. Land use rights used
for rent
2. Rental buildings
3. Land use rights held
and ready to be
transferred after
appreciation
(V) Biological assets
1. Consumable
biological assets
2. Productive
Notes to financial statements Page 199
Annual Report 2023
biological assets
(VI) Receivables
39,533,283.51 39,533,283.51
financing
Total assets
continuously
1,402,518,595.12 48,708,356.93 1,451,226,952.05
measured at fair
value
(VI) Trading financial
1,357,106.71 1,357,106.71
liabilities
1. Financial liabilities
at fair value through
profit or loss
Including: Trading
bonds issued
Derivative
1,357,106.71 1,357,106.71
financial liabilities
Others
2. Financial liabilities
designated as at fair
value through profit or
loss
(VII) Repurchase
35,878,223.18 35,878,223.18
obligation liabilities
Total liabilities
continuously
37,235,329.89 37,235,329.89
measured at fair
value
II. Non-continuous
fair value
measurement
(I) Assets held for sale
Total assets not
continuously
measured at fair
value
Total liabilities not
continuously
measured at fair
value
2. Basis for determining market prices of items continuously and not continuously measured at
the first-level fair value
√ Applicable □ Not applicable
The input value of the first level is the unadjusted quotation of the same asset or liability that can be
obtained on the measurement date in the active market.
3. Qualitative and quantitative information on valuation techniques and important parameters
adopted by items continuously and not continuously measured at the second-level fair value
√ Applicable □ Not applicable
The input value of the second level is the directly or indirectly observable input value of related
assets or liabilities except the input value of the first level.
4. Qualitative and quantitative information on valuation techniques and important parameters
adopted by items continuously and not continuously measured at the third-level fair value
□ Applicable √ Not applicable
Notes to financial statements Page 200
Annual Report 2023
5. Information on adjustment between the beginning carrying value and the closing carrying
value of items continuously measured at the third-level fair value and sensitivity analysis on
unobservable parameters
□ Applicable √ Not applicable
6. For items continuously measured at fair value, in case of any conversion between various
levels during the period, reasons for the conversion and policies to determine the conversion
time should be provided
□ Applicable √ Not applicable
7. Changes in valuation techniques and reasons for changes during the period
□ Applicable √ Not applicable
8. Particulars on fair value of financial assets and liabilities which are not measured at fair value
□ Applicable √ Not applicable
9. Others
□ Applicable √ Not applicable
XIV. Related Parties and Related-Party Transactions
1. Particulars on the parent company of the Company
√ Applicable □ Not applicable
Unit: 0'000 Currency: RMB
The parent
The parent
Name of the company's
Registered Nature of the Registered company's voting
parent shareholding ratio
address business capital right ratio in the
company in the Company
Company (%)
(%)
M&G
Holdings Industrial
Shanghai 30,000 57.85 57.85
(Group) Co., Investment
Ltd.
Descriptions on the parent company of the Company
No
The ultimate controlling party of the Company is Chen Huwen, Chen Huxiong and Chen Xueling
Other descriptions:
No
2. Particulars on subsidiaries of the Company
Particulars on subsidiaries of the Company are shown in the relevant notes
√ Applicable □ Not applicable
For particulars on subsidiaries of the Company, see Note X. Equity in Other Entities for details.
3. Particulars on joint ventures and associates of the Company
For important joint ventures and associates of the Company, see the Notes for details
√ Applicable □ Not applicable
For important joint ventures and associates of the Company, see Note X. "Equity in Other Entities"
for details.
Particulars on other joint ventures and associates which have related-party transactions with the
Company in the current period or had related-party transactions with the Company in the previous
period and form balances are as follows
√ Applicable □ Not applicable
Notes to financial statements Page 201
Annual Report 2023
Name of joint venture and associate Relationship with the Company
Ningbo Zhongchen Equity Investment Partnership (Limited
Associates
Partnership)
Shanghai Pen-making Technology Services Co., Ltd.（上海
Associates
制笔技术服务有限公司）
Shanghai Momobanzhang Enterprise Management Co., Ltd. Associates
Other descriptions
□ Applicable √ Not applicable
4. Particulars on other related parties
√ Applicable □ Not applicable
Relationship between other related parties
Name of other related parties
and the Company
PELEG DESIGN Ltd Others
Shanghai M&G Charity Foundation Others
Shanghai KACO Industrial Co., Ltd. Others
Guo Weilong Others
Nanjing Zhaochen Stationery Sales Co., Ltd. Others
Nanjing Chenri Stationery Sales Co., Ltd. Others
Nanjing Youchen Stationery Sales Co., Ltd. Others
Huaian Youpin Chenguang Trading Co., Ltd. (淮安优品
Others
晨光贸易有限公司)
Nanjing Liuhe District Weifeng Qichen Cultural Products
Others
Co., Ltd.
Contemporary Amperex Technology Co., Limited Others
Other descriptions
No
5. Particulars on related-party transactions
(1).Related-party transactions for the purchase and sales of goods and the rendering and receipt
of services
Table of information on the purchase of goods/the receipt of services
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount Over the Amount
Related-party Approved
accounted for transaction line accounted for in
Related party transaction transaction line
in the current or not (if the previous
content (if applicable)
period applicable) period
PELEG DESIGN Receipt of
1,190,000.00 2,801,435.30
Ltd services
Shanghai KACO Purchase of
7,214.00 1,975.89
Industrial Co., Ltd. goods
Shanghai
Momobanzhang
Purchase of
Enterprise 430,357.09 238,792.93
goods
Management Co.,
Ltd.
M&G Holdings Purchase of
148.00
(Group) Co., Ltd. goods
M&G Holdings Receipt of
75,507.80
(Group) Co., Ltd. services
Notes to financial statements Page 202
Annual Report 2023
Shanghai
Pen-making
Technology Purchase of
Services Co., Ltd. 64,672.57
goods
（上海制笔技术服
务有限公司）
Shanghai
Pen-making
Technology Receipt of
Services Co., Ltd. 1,633.66
services
（上海制笔技术服
务有限公司）
Table of information on the sale of goods/the rendering of services
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Related-party
Amount accounted for Amount accounted for
Related party transaction
in the current period in the previous period
content
Sales entities controlled by Guo
Sale of goods 280,620,675.09 355,283,148.55
Weilong
PELEG DESIGN Ltd Sale of goods 702,855.49
Shanghai Momobanzhang
Sale of goods 3,957,126.00 370,489.16
Enterprise Management Co., Ltd.
Shanghai Momobanzhang Provision of
1,038,633.42
Enterprise Management Co., Ltd. labour service
Provision of
Shanghai KACO Industrial Co., Ltd. 1,226.42
labour service
Shanghai Pen-making Technology
Services Co., Ltd.（上海制笔技术服 Provision of 1,226.42
labour service
务有限公司）
Shanghai M&G Charity Foundation Sale of goods 35,383.28 342,373.82
Shanghai Pen-making Technology
Services Co., Ltd.（上海制笔技术服 Sale of goods 288,188.24
务有限公司）
M&G Holdings (Group) Co., Ltd. Sale of goods 48,542.48
Contemporary Amperex
Sale of goods 236,216.07
Technology Co., Limited
Particulars on related-party transactions for the purchase and sales of goods and the rendering and
receipt of services
□ Applicable √ Not applicable
(2).Particulars on related-party entrusted management/contracting and entrusting
management/outsourcing
Table of information on the Company's entrusted management/contracting:
□ Applicable √ Not applicable
Particulars on related-party entrusting/contracting
□ Applicable √ Not applicable
Table of information on the Company's entrusting management/outsourcing
□ Applicable √ Not applicable
Particulars on related-party management/outsourcing
Notes to financial statements Page 203
Annual Report 2023
□ Applicable √ Not applicable
(3).Particulars on related-party leases
The Company as the lessor:
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Rental income recognised Rental income recognised in
Name of lessee Type of leased assets
in the current period the previous period
Shanghai
Momobanzhang
Self-owned office
Enterprise 200,917.43
building
Management Co.,
Ltd.
Notes to financial statements Page 204
Annual Report 2023
The Company as the lessee:
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Rental costs for Variable lease
short-term leases and payments not
Interest expense on lease
leases of low-value assets included in lease Rental payments Increase in right-of-use assets
liabilities
with simplified treatment liabilities (if
Name of Type of leased (if applicable) applicable)
lessor assets Amount Amount Amount Amount Amount
Amount Amount Amount
accounted accounted accounted Amount accounted for Amount accounted for
accounted for accounted for in accounted for
for in the for in the for in the accounted for in in the accounted for in in the
in the current the previous in the current
previous current previous the current period previous the current period previous
period period period
period period period period period
Self-owned
houses
(including
M&G office
Holdings buildings,
4,852,000.00 4,852,000.00 319,493.40 79,337.90 8,850,788.03
(Group) Co., workshops,
Ltd. parking spaces,
warehouses,
dormitory
buildings, etc.)
M&G Self-owned
Holdings office buildings
78,857.15 68,571.43 16,488,306.13 13,304,378.59 334,185.69 366,948.53 34,737,251.46 12,958,631.76
(Group) Co., and parking
Ltd. spaces
M&G
Holdings
Utilities 6,457,939.02 4,983,461.41
(Group) Co.,
Ltd.
Descriptions on related-party leases
□ Applicable √ Not applicable
Notes to financial statements Page 205
Annual Report 2023
(4).Particulars on related-party guarantees
The Company as a guarantor
□ Applicable √ Not applicable
The Company as a guaranteed party
□ Applicable √ Not applicable
Descriptions on related-party guarantees
□ Applicable √ Not applicable
(5).Related-party fund lending
□ Applicable √ Not applicable
(6).Related-party asset transfer and debt restructuring
□ Applicable √ Not applicable
(7).Compensation of key management personnel
□ Applicable √ Not applicable
(8).Other related-party transactions
□ Applicable √ Not applicable
6. Receivables from and payables to related parties
(1).Receivables
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Closing balance Opening balance
Items Related party Carrying Bad debt Carrying Bad debt
balance provisions balance provisions
Accounts Shanghai M&G
14,684.00 734.20 81,428.89 4,071.44
receivable Charity Foundation
Shanghai
Momobanzhang
Accounts
Enterprise 344,295.74 13,653.49 106,040.10 5,302.01
receivable
Management Co.,
Ltd.
Sales entities
Accounts
controlled by Guo 25,163.72 1,258.19
receivable
Weilong
Contemporary
Accounts Amperex
72,688.21 363.44
receivable Technology Co.,
Limited
Other Shanghai KACO
15.79 0.79
receivables Industrial Co., Ltd.
Shanghai
Momobanzhang
Other
Enterprise 3,543.33 177.17
receivables
Management Co.,
Ltd.
Prepaid Shanghai
1,600.00
accounts Pen-making
Notes to financial statements Page 206
Annual Report 2023
Technology
Services Co., Ltd.
（上海制笔技术
服务有限公司）
(2).Payables
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Carrying balance at Carrying balance at the
Items Related party
the end of the period beginning of the period
Sales entities controlled by Guo
Accounts payable 9,649.79 12,670.41
Weilong
Shanghai KACO Industrial Co.,
Accounts payable 836.90
Ltd.
Shanghai Momobanzhang
Accounts payable Enterprise Management Co., 238,792.82
Ltd.
Sales entities controlled by Guo
Other payables 524,000.00 700,000.00
Weilong
M&G Holdings (Group) Co.,
Other payables 1,155,958.11 1,018,493.70
Ltd.
Sales entities controlled by Guo
Contract liabilities 3,936,727.68 2,905,275.49
Weilong
M&G Holdings (Group) Co.,
Lease liabilities 26,349,112.06 1,452,194.72
Ltd.
Non-current
M&G Holdings (Group) Co.,
liabilities due 18,362,042.94 1,409,785.18
Ltd.
within one year
(3).Others
□ Applicable √ Not applicable
7. Related-party commitments
□ Applicable √ Not applicable
8. Others
□ Applicable √ Not applicable
XV. Share-based Payments
1. Various equity instruments
√ Applicable □ Not applicable
Quantity unit: Share Amount unit: Yuan Currency: RMB
Granted in the current Vested in the current Unlocked in the current
Tye of grant Expired in the current period
period period period
recipients
Quantity Amount Quantity Amount Quantity Amount Quantity Amount
Initial grant
target of
2020
Restricted 261,480.00 6,197,076.00
Share
Incentive
Plan:
Reserved
grant target 75,000.00 3,377,250.00
of 2020
Notes to financial statements Page 207
Annual Report 2023
Restricted
Share
Incentive
Plan:
Total 336,480.00 9,574,326.00
Outstanding stock options or other equity instruments at the end of the period
□ Applicable √ Not applicable
2. Particulars on equity-settled share-based payment
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Determination of the Fair Value of Equity The Closing Price of the Shares on the Date of
Instruments at the Date of Grant Grant
Important parameters of the fair value of equity
/
instruments at the date of grant
At each balance sheet date during the waiting
period, the Company will make the best estimate
Determination basis for the number of vesting based on the latest obtained follow-up information
equity instruments such as changes in the number of vesting
employees, and revise the expected number of
vesting equity instruments.
Reasons for the significant difference between the
No
current estimate and the previous estimate
Cumulative amount of equity-settled share-based
118,392,651.26
payments included in the capital reserve
Other descriptions
(1) In accordance with the Proposal on the Company's 2020 Restricted Share Incentive Plan (Draft)
and Its Summary, the Proposal on the Management Measures for the Implementation of the Company's
2020 Restricted Share Incentive Plan, and the Proposal on Requesting the General Meeting of
Shareholders to Authorize the Board of Directors to Deal with Matters Related to Restricted Stock
Incentives considered and approved at the 2019 Annual General Meeting of Shareholders held on 8 May
2020, the Company initially granted 7.4412 million restricted shares at a price of RMB23.70 per share.
As of 2023, there are still 2.5046 million shares that have not been unlocked. The incentive plan assesses
the Company's operating performance annually, with achieving the performance targets as one of the
conditions for lifting the restrictions in the incentive plan for the current year. On 15November 2022, the
resolution on the Proposal on Adjusting the 2020 Restricted Share Incentive Plan was approved at the
first Extraordinary General Meeting of Shareholders in 2022, adjusting the incentive plan. Based on
2019, the growth rate of operating revenue for 2022, which was originally set at not less than 75%, was
adjusted to 2023, and the growth rate of net profit for 2022, originally set at not less than 66%, was also
adjusted to 2023. The Company anticipates that the performance targets for the third tranche of restricted
shares to be released cannot be achieved, necessitating a reversal of the corresponding equity incentive
expenses.
(2) Regarding the 2020 Restricted Share Incentive Plan, the reserved shares were approved on 29
April 2021, at the seventh meeting of the 5th session of Board of Directors and the sixth meeting of the
5th session of Supervisory Committee. A total of 705,500 restricted shares were granted at a price of
RMB45.03 per share. As of 31 December 2023, there are still 263,550 shares that have not been released
from restriction. The incentive plan assesses the Company's operating performance annually, with
achieving the performance targets as one of the conditions for lifting the restrictions in the incentive plan
for the current year. As mentioned in (1), the Company adjusted the performance targets after relevant
deliberation on 15 November 2022. The original targets, based on 2019, were revised from a minimum
operating revenue growth rate of 75% for 2022 to 2023 and a minimum net profit growth rate of 66% for
2022 to 2023. The Company anticipates that the performance targets for the second tranche of restricted
shares to be released cannot be achieved, necessitating a reversal of the corresponding equity incentive
expenses.
Notes to financial statements Page 208
Annual Report 2023
3. Particulars on cash-settled share-based payment
□ Applicable √ Not applicable
4. share-based payment expense in the current period
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Equity-settled share-based Cash-settled share-based
Tye of grant recipients
payment expenses payment expenses
Employee -48,387,010.93
Total -48,387,010.93
Other descriptions
No
5. Particulars on modification and termination of share-based payment
□ Applicable √ Not applicable
6. Others
□ Applicable √ Not applicable
XVI. Commitments and Contingencies
1. Important commitments
√ Applicable □ Not applicable
Important external commitments, nature, and amount existing on the balance sheet date
1. Particulars on mortgaged assets
(1) The subsidiary, Axus Stationery (Shanghai) Company Ltd. (hereinafter referred to as “Axus
Stationery”), entered into the Maximum Mortgage Contract numbered ZD9874202200000005 with
Shanghai Pudong Development Bank Co., Ltd. Fengxian Sub-branch on 15 September 2022, under
which it pledges its lands and plants under Property HFDQ Zi (2013) No. 015437, Property HFDQ Zi
(2013) No. 013396 and Property HFDQ Zi (2015) No. 015718 at the maximum principal limit of
RMB200 million and for the term of credit line from 15 September 2022 to 14 September 2025.
(2) The subsidiary Jiangsu Marco Pen Co., Ltd. (江苏马可笔业有限公司) (hereinafter referred to
as “Jiangsu Marco”) entered into the Maximum Mortgage Contract numbered BD133202302270002428
with Jiangsu Siyang Rural Commercial Bank Co., Ltd. on 27 February 2023, under which it pledges its
lands and plants under Su (2019) Siyang County Real Estate No. 0018047, Su (2019) Siyang County
Real Estate No. 0018032, Su (2019) Siyang County Real Estate No. 0017990 and Su (2019) Siyang
County Real Estate No. 0017993 at the maximum principal limit of RMB45,122,200 and for the term of
credit line from 27 February 2023 to 22 November 2025.
2. Contingencies
(1).Important contingencies on the balance sheet date
□ Applicable √ Not applicable
(2).If the Company has no important contingent issues that need to be disclosed, it should also be
explained:
□ Applicable √ Not applicable
3. Others
□ Applicable √ Not applicable
Notes to financial statements Page 209
Annual Report 2023
XVII. Post-balance Sheet Date Events
1. Important non-adjustment matters
□ Applicable √ Not applicable
2. Profit distribution
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Profits or dividends proposed to be
738,990,821.60
distributed
Profits or dividends reviewed and
approved to be declared for distribution
According to the Profit Distribution Plan for 2023 reviewed and approved at the 5th meeting of the
6th session of Board of Directors held by the Company on 28 March 2024, the Company proposes to
distribute cash dividend of RMB8.00 (tax inclusive) per 10 shares based on the Company's total share
capital (exclusive of shares in the Company’s special securities account for repurchased shares)
registered as at the registration date for the implementation of dividend distribution. The remaining
distributable profits in 2023 will be carried forward to the following year.
3. Sales return
□ Applicable √ Not applicable
4. Particulars on other post-balance-sheet-date events
□ Applicable √ Not applicable
XVIII. Other Important Issues
1. Correction of previous-period accounting errors
(1).Retrospective restatement method
□ Applicable √ Not applicable
(2).Future application method
□ Applicable √ Not applicable
2. Significant debt restructuring
□ Applicable √ Not applicable
3. Asset replacement
(1).Non-monetary asset exchange
□ Applicable √ Not applicable
(2).Other asset replacement
□ Applicable √ Not applicable
4. Annuity plan
□ Applicable √ Not applicable
5. Discontinued operations
□ Applicable √ Not applicable
Notes to financial statements Page 210
Annual Report 2023
6. Segment information
(1).Basis for determining reporting segments and accounting policies
√ Applicable □ Not applicable
According to the Company's internal organisational structure, management requirements and
internal reporting system, two reporting segments are identified, namely: direct office supplies business
and core traditional business. The Company's reporting segments provide different products or services,
or engages in operational activities in different regions. Since each segment requires different technical
or marketing strategies, the management of the Company separately manages the operating activities of
each reporting segment and regularly evaluates the operating results of these reporting segments to
determine the allocation of resources to them and the evaluation of their performance.
The transfer price between segments is determined on the basis of the actual transaction price, and
the expenses indirectly attributable to each segment are grouped according to the actual share of each
segment. Allocation among segments is conducted accordingly. Assets are allocated according to the
operation of the segment and the location of the asset. Segment liabilities include liabilities that can be
attributed to the segment formed by the segment's operating activities. If the expenses associated with
liabilities shared by multiple operating segments are allocated to these operating segments, the jointly
assumed liabilities are also allocated to these operating segments.
(2).Financial information of reporting segments
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Direct office supplies Inter-segment
Item Traditional business Total
business elimination
Revenue from foreign
13,295,012,999.95 10,056,291,328.08 23,351,304,328.03
transactions
Revenue from
inter-segment 11,981,061.87 248,336,336.64 260,317,398.51
transactions
Income from investments
in associates and joint -1,275,439.03 -1,275,439.03
ventures
Credit impairment losses -22,120,977.75 290,798.90 -21,830,178.85
Asset impairment losses 502,351.70 11,242,454.85 11,744,806.55
Depreciation and
33,443,821.10 512,689,964.91 546,133,786.01
amortisation charges
Total profits (total losses) 493,267,809.30 1,483,807,679.21 -2,397,284.27 1,979,472,772.78
Income tax expenses 92,061,294.87 242,873,154.94 -599,321.07 335,533,770.88
Net profits (net losses) 401,206,514.43 1,240,934,524.27 -1,797,963.20 1,643,939,001.90
Total assets 5,907,567,612.89 9,669,789,751.92 263,395,052.81 15,313,962,312.00
Total liabilities 4,320,666,043.09 2,903,636,594.77 261,505,122.24 6,962,797,515.62
(3).If the Company does not have a reporting segment, or if it cannot disclose the total assets and
total liabilities of each reporting segment, the reason should be explained
□ Applicable √ Not applicable
(4).Other descriptions
□ Applicable √ Not applicable
7. Other important transactions and matters that have an impact on investors' decisions
□ Applicable √ Not applicable
8. Others
√ Applicable □ Not applicable
Notes to financial statements Page 211
Annual Report 2023
Key Impacts of Implementing the General Provisions of Financial Reports (Revised in 2023), Rule
15 on the Disclosure of Financial Information by Companies Issuing Securities Publicly
In preparing these financial statements, the Company has disclosed relevant financial information
in accordance with the requirements of the General Provisions of Financial Reports (Revised in 2023),
Rule 15 on the Disclosure of Financial Information by Companies Issuing Securities Publicly, as
promulgated by the China Securities Regulatory Commission on 22 December 2023. With respect to
items such as financial instruments, inventories, impairment of long-term assets, revenue, cash flows,
share-based payments, R&D expenses, government, among others, the implementation of this regulation
has not significantly impacted the disclosure format of the main financial data for other comparable
accounting periods.
XIX. Notes on the Main Items of the Parent Company's Financial Statements
1. Accounts receivable
(1).Disclosure by account age
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Carrying balance at the end of the Carrying balance at the beginning
Account age
period of the period
Within one year
Including: Sub-item within one year
Within one year 223,470,487.70 172,369,683.69
Sub-total within one year 223,470,487.70 172,369,683.69
One to two years
Two to three years 1,054,026.72
Above three years
Three to four years
Four to five years
Above five years
Total 223,470,487.70 173,423,710.41
(2).Disclosure by accruing method for bad debt provisions
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Closing balance Opening balance
Carrying balance Bad debt provisions Carrying balance Bad debt provisions
Category Accruing Carrying Accruing Carrying
Percentage value Percentage value
Amount Amount percentage Amount Amount percentage
(%) (%)
(%) (%)
Bad debt
provisions
1,054,026.72 0.61 1,054,026.72 100.00
accrued
separately
Including:
Bad debt
provisions
accrued
223,470,487.70 100.00 4,725,084.16 2.11 218,745,403.54 172,369,683.69 99.39 5,070,464.13 2.94 167,299,219.56
according to
the
combination
Including:
Account age
94,501,683.09 42.29 4,725,084.16 5.00 89,776,598.93 101,409,282.65 58.47 5,070,464.13 5.00 96,338,818.52
analysis
Related
parties in the
scope of the
128,968,804.61 57.71 128,968,804.61 70,960,401.04 40.92 70,960,401.04
consolidated
financial
statements
Total 223,470,487.70 / 4,725,084.16 / 218,745,403.54 173,423,710.41 / 6,124,490.85 / 167,299,219.56
Notes to financial statements Page 212
Annual Report 2023
Bad debt provisions accrued separately:
□ Applicable √ Not applicable
Bad debt provisions accrued according to the combination:
√ Applicable □ Not applicable
Combination item: Account age analysis
Unit: Yuan Currency: RMB
Closing balance
Item
Accounts receivable Bad debt provisions Accruing percentage (%)
Account age analysis 94,501,683.09 4,725,084.16 5.00
Total 94,501,683.09 4,725,084.16
Description on bad debt provisions accrued according to the combination:
□ Applicable √ Not applicable
Bad debt provisions accrued according to the general model of expected credit losses
□ Applicable √ Not applicable
Basis of classification of stages and percentage of provision for bad debts
No
Notes to the significant changes in the book balance of accounts receivable arising from changes in the
provision for losses in the current period:
□ Applicable √ Not applicable
(3).Particulars on bad debt provisions
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Change of the current period
Opening Closing
Category Recovered or Resold or Other
balance Accrued balance
reversed written-off changes
Bad debt
provisions 1,054,026.72 1,054,026.72
accrued
separately
Account age 5,070,464.13 -345,379.97 4,725,084.16
analysis
Total 6,124,490.85 -345,379.97 1,054,026.72 4,725,084.16
Significant bad debt provision amounts recovered or reversed in the current period:
□ Applicable √ Not applicable
Other descriptions
No
(4).Particulars on accounts receivable actually written-off in the current period
□ Applicable √ Not applicable
Writing-off of significant accounts receivable
□ Applicable √ Not applicable
Description on writing-off of accounts receivable:
□ Applicable √ Not applicable
Notes to financial statements Page 213
Annual Report 2023
(5).Particulars on top five accounts receivable and contract assets in terms of the balance at the
end of the period based on debtors
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Percentage
(%) in the
Closing Closing balance of Balance of bad
total balance
Company balance of accounts debt provisions
Closing balance at the end of
name contract receivable and at the end of the
the period of
assets contract assets period
accounts
receivable
First 38,069,697.28 38,069,697.28 17.04
Second 34,646,498.50 34,646,498.50 15.50
Third 17,125,542.07 17,125,542.07 7.66 856,277.10
Fourth 16,859,097.41 16,859,097.41 7.54 842,954.87
Fifth 12,883,707.74 12,883,707.74 5.77 644,185.39
Total 119,584,543.00 119,584,543.00 53.51 2,343,417.36
Other descriptions
No
Other descriptions:
□ Applicable √ Not applicable
2. Other receivables
Presented by item
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Closing balance Opening balance
Interest receivable
Dividend receivable
Other receivables 921,226,487.12 781,222,709.03
Total 921,226,487.12 781,222,709.03
Other descriptions:
□ Applicable √ Not applicable
Interest receivable
(1). Classification of interest receivable
□ Applicable √ Not applicable
(2). Important overdue interest
□ Applicable √ Not applicable
(3). Disclosure by accruing method for bad debt provisions
□ Applicable √ Not applicable
Bad debt provisions accrued separately:
□ Applicable √ Not applicable
Description on bad debt provisions accrued separately:
□ Applicable √ Not applicable
Notes to financial statements Page 214
Annual Report 2023
Bad debt provisions accrued according to the combination:
□ Applicable √ Not applicable
(4). Bad debt provisions accrued according to the general model of expected credit losses
□ Applicable √ Not applicable
Basis of classification of stages and percentage of provision for bad debts
No
Notes to the significant changes in the book balance of interest receivable arising from changes in the
provision for losses in the current period:
□ Applicable √ Not applicable
(5). Particulars on bad debt provisions
□ Applicable √ Not applicable
Significant bad debt provision amounts recovered or reversed in the current period:
□ Applicable √ Not applicable
Other descriptions:
No
(6). Particulars on interest receivable actually written-off in the current period
□ Applicable √ Not applicable
Including: Write-off of significant interest receivable
□ Applicable √ Not applicable
Notes on write-off:
□ Applicable √ Not applicable
Other descriptions:
□ Applicable √ Not applicable
Dividend receivable
(1). Dividend receivable
□ Applicable √ Not applicable
(2). Important dividend receivable with the account age over one year
□ Applicable √ Not applicable
(3). Disclosure by accruing method for bad debt provisions
□ Applicable √ Not applicable
Bad debt provisions accrued separately:
□ Applicable √ Not applicable
Description on bad debt provisions accrued separately:
□ Applicable √ Not applicable
Bad debt provisions accrued according to the combination:
□ Applicable √ Not applicable
Notes to financial statements Page 215
Annual Report 2023
(4). Bad debt provisions accrued according to the general model of expected credit losses
□ Applicable √ Not applicable
Basis of classification of stages and percentage of provision for bad debts
No
Notes to the significant changes in the book balance of dividends receivable arising from changes in the
provision for losses in the current period:
□ Applicable √ Not applicable
(5). Particulars on bad debt provisions
□ Applicable √ Not applicable
Significant bad debt provision amounts recovered or reversed in the current period:
□ Applicable √ Not applicable
Other descriptions:
No
(6). Particulars on dividend receivable actually written-off in the current period
□ Applicable √ Not applicable
Including: Write-off of significant dividend receivable
□ Applicable √ Not applicable
Notes on write-off:
□ Applicable √ Not applicable
Other descriptions:
□ Applicable √ Not applicable
Other receivables
(1). Disclosure by account age
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Carrying balance at the end of Carrying balance at the
Account age
the period beginning of the period
Within one year
Including: Sub-item within one year
Within one year 228,088,190.64 239,564,462.23
Sub-total within one year 228,088,190.64 239,564,462.23
One to two years 206,092,006.96 164,879,144.36
Two to three years 148,050,647.45 120,602,465.05
Above three years 340,627,308.31 257,561,120.08
Three to four years
Four to five years
Above five years
Less: Bad debt provisions -1,631,666.24 -1,384,482.69
Total 921,226,487.12 781,222,709.03
(2). Particulars on classification by amount nature
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Notes to financial statements Page 216
Annual Report 2023
Carrying balance at the end of Carrying balance at the
Amount nature
the period beginning of the period
Personal loans and petty cash 5,080,611.01 5,184,623.94
Consolidated balance of related-parties
898,888,847.17 768,968,145.05
current accounts
Amount paid for materials 11,585,777.21 3,721,731.92
Consolidated balance of related-parties
3,011,351.30 2,990,262.20
current accounts - provisional input tax
Margin and deposit 181,200.00 881,922.40
Housing deposit and margin 3,744,079.00 444,272.00
Others 366,287.67 416,234.21
Total 922,858,153.36 782,607,191.72
(3). Particulars on accruing of bad debt provisions
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Phase 1 Phase 2 Phase 3
Expected credit Expected credit
Expected credit loss for the entire loss for the entire Total
Bad debt provisions
losses in the next duration (no credit duration (credit
12 months impairment impairment
occurred) occurred)
Balance as at 1 January
1,384,482.69 1,384,482.69
2023
Balance as of 1 January
2023 in the current
period
- Transferred into Phase
2
- Transferred into Phase
3
- Reversed into Phase 2
- Reversed into Phase 1
Accrued in the current
247,183.55 247,183.55
period
Reserved in the current
period
Resold in the current
period
Written-off in the
current period
Other Changes
Balance as at 31
1,631,666.24 1,631,666.24
December 2023
Basis of classification of stages and percentage of provision for bad debts
No
Notes to the significant changes in the book balance of other receivables arising from changes in the
provision for losses in the current period:
√ Applicable □ Not applicable
Phase 1 Phase 2 Phase 3
Carrying balance Total
Expected credit losses Expected credit Expected credit
Notes to financial statements Page 217
Annual Report 2023
in the next 12 months loss for the entire loss for the entire
duration (no duration (credit
credit impairment impairment
occurred) occurred)
Balance as at 1 January 2023 782,607,191.72 782,607,191.72
Balance as of 1 January 2023 in
the current period
- Transferred into Phase 2
- Transferred into Phase 3
- Reversed into Phase 2
- Reversed into Phase 1
Increased in the Current Period 380,216,047.23 380,216,047.23
Derecognition of the current
239,965,085.59 239,965,085.59
period
Other Changes
Balance as at 31 December
922,858,153.36 922,858,153.36
2023
Amount of bad debt provisions accrued for the current period and the basis for assessing whether the
credit risk of financial instruments has increased significantly:
□ Applicable √ Not applicable
(4). Particulars on bad debt provisions
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Change of the current period
Opening Recovered
Category Resold or Other Closing balance
balance Accrued or
written-off changes
reversed
Account age
1,362,269.09 82,193.20 1,444,462.29
analysis
Deposit for
22,213.60 164,990.35 187,203.95
housing lease
Total 1,384,482.69 247,183.55 1,631,666.24
Significant bad debt provision amounts reversed or recovered in the current period:
□ Applicable √ Not applicable
Other descriptions
No
(5). Particulars on other receivables actually written-off in the current period
□ Applicable √ Not applicable
Including: Write-off of significant other receivables:
□ Applicable √ Not applicable
Notes to the write-off of other receivables:
□ Applicable √ Not applicable
(6). Particulars on top 5 other receivables in terms of the balance at the end of the period based
on debtors
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Percentage (%) Bad debt
Company Account
Closing balance in the total Account age provisions
name nature
balance at the closing
Notes to financial statements Page 218
Annual Report 2023
end of the period balance
of other
receivables
Consolidated
Within one year
balance of
RMB59.0092 million
First 321,877,192.63 34.88 related-parties
Above one year
current
RMB262.868 million
accounts
Consolidated
Within one year
balance of
RMB95.3646 million
Second 251,520,748.98 27.25 related-parties
Above one year
current
RMB156.1562 million
accounts
Consolidated
Within one year
balance of
RMB1.1464 million
Third 115,418,234.31 12.51 related-parties
Above one year
current
RMB114.2718 million
accounts
Consolidated
Within one year
balance of
RMB1.7433 million
Fourth 80,005,699.28 8.67 related-parties
Above one year
current
RMB78.2624 million
accounts
Consolidated
Within one year
balance of
RMB21.8436 million
Fifth 39,000,000.00 4.23 related-parties
Above one year
current
RMB17.1564 million
accounts
Total 807,821,875.20 87.54 / /
(7). Other receivables reported due to centralised management of funds
□ Applicable √ Not applicable
Other descriptions:
□ Applicable √ Not applicable
3. Long-term equity investments
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Closing balance Opening balance
Item Carrying Impairment Carrying Impairment
Carrying value Carrying value
balance provisions balance provisions
Investment to
1,609,957,222.61 1,609,957,222.61 1,544,708,251.61 1,544,708,251.61
subsidiaries
Investments to
associates and 33,853,293.45 33,853,293.45 35,174,115.73 35,174,115.73
joint ventures
Total 1,643,810,516.06 1,643,810,516.06 1,579,882,367.34 1,579,882,367.34
(1). Investment to subsidiaries
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Decrease Impairment Balance of
Increase of
Opening of the Closing provisions impairment
Invested company the current Others
balance current balance accrued in provisions at
period
period the current the end of the
Notes to financial statements Page 219
Annual Report 2023
period period
Shanghai M&G Colipu Office
Supplies Co., Ltd.（上海晨光 512,622,842.52 -7,298,800.00 505,324,042.52
科力普办公用品有限公司）
Shanghai M&G Zhenmei
Stationery Co., Ltd.（上海晨 13,288,599.09 13,288,599.09
光珍美文具有限公司）
Shanghai M&G Stationery &
Gift Co., Ltd.（上海晨光文具 199,419,400.00 199,419,400.00
礼品有限公司）
M&G Life Enterprise
Management Co., Ltd.（晨光 240,000,000.00 240,000,000.00
生活馆企业管理有限公司）
Shanghai M&G Jiamei
Stationery Co., Ltd.（上海晨 30,000,000.00 30,000,000.00
光佳美文具有限公司）
Shanghai M&G Information
Technology Co., Ltd.（上海晨 27,500,000.00 27,500,000.00
光信息科技有限公司）
Shenzhen Erya Creative and
Cultural Development Co.,
6,339,300.00 6,339,300.00
Ltd.（深圳尔雅文化创意发展
有限公司）
Shanghai M&G Office
Stationery Co., Ltd.（上海晨 50,000,000.00 50,000,000.00
光办公用品有限公司）
Axus Stationery (Shanghai) 177,038,110.00 177,038,110.00
Company Ltd.
Shanghai Qizhihaowan
Culture and Creativity Co.,
28,500,000.00 28,500,000.00
Ltd.（上海奇只好玩文化创意
有限公司）
Shanghai Chenxun Enterprise
Management Co., Ltd.（上海 220,000,000.00 220,000,000.00
晨讯企业管理有限公司）
Guangdong South China
Stationery Co., Ltd. (广东华 40,000,000.00 40,000,000.00
南文教用品有限公司)
Hubei Chaoxin Real Estate
Co., Ltd.（湖北潮信置业有限 72,547,771.00 72,547,771.00
公司）
Total 1,544,708,251.61 72,547,771.00 -7,298,800.00 1,609,957,222.61
(2). Investments to associates and joint ventures
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Change of the current period
Investment Balance of
Declaration
At the gains and impairment
Adjustment to on Accruing
Investment beginning of losses Other Closing provisions
Additional Withdrawn other distribution of
unit the period recognised equity Others balance at the end
investment investment comprehensive of cash impairment
balance under the changes of the
income dividends provisions
equity period
or profits
method
I. Joint venture
Notes to financial statements Page 220
Annual Report 2023
Subtotal
II. Associate
Ningbo
Zhongchen
Equity
Investment 31,423,824.34 -673,689.41 -45,383.25 30,704,751.68
Partnership
(Limited
Partnership)
Shanghai
Pen-making
Technology
Services
Co., Ltd. 3,750,291.39 -601,749.62 3,148,541.77
（上海制
笔技术服
务有限公
司）
Subtotal 35,174,115.73 -1,275,439.03 -45,383.25 33,853,293.45
Total 35,174,115.73 -1,275,439.03 -45,383.25 33,853,293.45
(3). Impairment test of long-term equity investments
□ Applicable √ Not applicable
Other descriptions:
No
4. Revenue and operating costs
(1). Particulars on revenue and operating costs
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount accounted for in the previous
Amount accounted for in the current period
Item period
Revenue Costs Revenue Costs
Main
3,991,833,680.10 2,154,460,755.11 3,842,440,076.52 2,098,459,464.66
operations
Other
180,937,801.58 156,286,667.19 90,584,857.94 482,094.17
operations
Total 4,172,771,481.68 2,310,747,422.30 3,933,024,934.46 2,098,941,558.83
(2). Information on the breakdown of revenue and operating costs
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Total
Classification of contracts
Revenue Operating costs
Types of goods
1. Sales of goods 3,991,833,680.10 2,154,460,755.11
2. Supply chain service 158,072,067.21 153,143,255.16
3. Others 3,751,113.18 283,414.59
Classification by operation territory
1. China 3,842,475,369.96 2,111,523,946.37
2. Other countries 311,181,490.53 196,363,478.49
Classification by the time of goods transfer
1. Recognised at a specific point in time 4,153,656,860.49 2,307,887,424.86
2. Recognised within a specific time period
Total 4,153,656,860.49 2,307,887,424.86
Other descriptions
□ Applicable √ Not applicable
Notes to financial statements Page 221
Annual Report 2023
(3). Description on performance obligations
□ Applicable √ Not applicable
(4). Description on allocation to remaining performance obligations
□ Applicable √ Not applicable
(5). Significant contract changes or significant transaction price adjustments
□ Applicable √ Not applicable
Other descriptions:
Details on revenue:
Item Amount in the current period Amount in the last period
Description on revenue from customer
4,153,656,860.49 3,920,289,816.34
contracts
Rental income 19,114,621.19 12,735,118.12
Total 4,172,771,481.68 3,933,024,934.46
5. Investment income
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount accounted for Amount accounted for
Item
in the current period in the previous period
Long-term equity investment income calculated by
cost method
Long-term equity investment income accounted for
-1,275,439.03 -1,283,553.86
under the equity method
Investment income from disposal of long-term equity
investment
Investment income from held-for-trading financial
assets during the holding period
Dividend income from other equity instrument
investments 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 held-for-trading
5,667,374.58 1,894,333.53
financial assets
Investment income from disposal of other equity
instrument investments
Investment income from disposal of debt investment
Investment income from disposal of other debt
investments
Gains from debt restructuring
Total 4,391,935.55 610,779.67
Other descriptions:
No
6. Others
□ Applicable √ Not applicable
Notes to financial statements Page 222
Annual Report 2023
XX. Supplementary Information
1. Table on details of non-recurring gains and losses of the current period
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Amount Description
Gains or losses on disposal of non-current assets
4,135,364.06
(inclusive of impairment allowance write-offs)
Government subsidies included in profits and
losses for the current period, excluding those that
are closely related to the Company's normal
business operations and given in accordance with 148,088,250.88
defined criteria and in compliance with
government policies, and have a continuing impact
on the Company's profits or losses
Gains or losses on fair-value changes in financial
assets and liabilities held by a non-financial
enterprise, as well as on disposal of financial assets
28,908,931.81
and liabilities (exclusive of the effective portion of
hedges that is related to the Company's normal
business operations)
Reversal of provision for impairment of
receivables which are individually tested for 3,232,256.86
impairment.
Other net non-operating income and expenses,
-2,669,713.78
other than the above items
Minus: Effect of income tax 33,479,316.16
Effect of minority equity (after tax) 19,633,903.48
Total 128,581,870.19
Items unlisted in the Explanatory Announcement on Information Disclosure by Companies Offering
Securities to the Public No. 1: Non-Recurring Profits and Losses are identified as non-recurring profit
and loss items and the items are of a significant amount, and non-recurring profit and loss items listed in
the Explanatory Announcement on Information Disclosure by Companies Offering Securities to the
Public No. 1: Non-Recurring Profits and Losses are defined as recurring profits and losses
□ Applicable √ Not applicable
Other descriptions
□ Applicable √ Not applicable
2. Return on net assets and earnings per share
√ Applicable □ Not applicable
Weighted Earnings per share
Profits during the Reporting Period average ROE Basic earnings Diluted earnings
(%) per share per share
Net profit attributable to ordinary shareholders
20.97 1.6577 1.6577
of the Company
Net profit attributable to ordinary shareholders
of the Company after deducting non-recurring 19.20 1.5181 1.5181
gains and losses
3. Difference in the Accounting Information under the PRC Accounting Standards for Business
Enterprise ("PRC GAAP") and Overseas Accounting Standards
□ Applicable √ Not applicable
Notes to financial statements Page 223
Annual Report 2023
4. Others
□ Applicable √ Not applicable
Chairman: Chen Huwen
Date of report and submission approved by the Board of Directors: 28 March 2024
Revision information
□ Applicable √ Not applicable
Notes to financial statements Page 224
