Annual Report 2020
Stock Code: 688007 Stock Short Name: Appotronics
Appotronics Corporation Limited
Annual Report 2020
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Hold Fast to Long-term Value Whenever to Change or Persevere
Dear Shareholders,
Like many other companies, Appotronics has experienced an extraordinary year of
2020. Our performance has inevitably been affected under the circumstances of the
pandemic.
The good news is that most of our business sectors were advancing steadily in the first
half of the year and the cinema sector quickly rebounded in the second half of the year.
And the overall annual revenue was basically the same as the previous year, which is more
than RMB100 million, demonstrating good resilience.
Instead of the figures in the annual report, I would like to share with you where such
strong resilience comes from, what we have done to seek a breakthrough in those days
when we were “besieged” by the pandemic, and what we have done to prepare for the next
year and even longer term.
Insist on Technology Innovation for Long-term Value
In 2020, the pandemic brought tremendous uncertainty to the world. For companies
like Appotronics who pursues long-term values, we experienced unprecedented pressure to
adhere to our original goal, which is insisting on technology innovation and striving to
continuous evolution. We believe that only by meeting basic needs of customers and
creating long-term profits for investors can we go through the ups and downs in this
turbulent market.
Since the original invention of ALPD fluorescent laser display technology in 2007,
Appotronics has never stopped the evolution of this technology. We launched the world’s
first laser TV in 2013, installed the world’s first ALPD laser cinema projector in 2014,
introduced the world’s first laser TV priced under RMB10,000 in 2017, became the first
company in China to manufacture laser digital cinema projectors with DCI certification in
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2019, and launched the world’s first highly profitable Fresnel flexible screen in 2020, all of
which cannot materialize without the long-term technology innovation that we have been
pursuing.
While completing a number of “0 to 1” technological breakthroughs, we also
promoted the market applications, such as in the fields of cinema, engineering, education
and household markets, thus creating new fast-growing tracks.
Our efforts in technology innovation can be evidenced by the following figures: From
2016 to 2019, Appotronics invested RMB70.12 million, RMB93.30 million, RMB136
million and RMB201 million in R&D, respectively. Even in 2020, we still invested
RMB204 million in R&D, accounting for 10.49% of our annual revenue despite the
performance pressure.
By the end of 2020, Appotronics had a total of 2,191 patent applications worldwide, of
which about 70% are invention patents. The original ALPD technology has been regarded
as the development direction of new-generation laser display by the international industry,
and has been cited by the industry and domestic and foreign enterprises more than 600
times.
From ALPD 1.0 to ALPD 4.0, Appotronics has continuously iterated and upgraded
the technology, not only by significantly improving visual effects such as brightness,
contrast ratio and color gamut, but also by achieving high efficiency in many areas such as
safety, energy saving and environmental protection, and industrialization. We are
developing ALPD5.0 and ALPD6.0 technologies, which will strengthen the laser
display effect and further reduce the cost of laser display, truly realizing the value creation
for users through continuous technology innovation.
All of the above builds up the confidence that we can maintain our profitability
fundamentals, adjust quickly in the crisis, and find a new growth curve in the midst of the
major changes brought about by the pandemic in 2020.
Capture Industry Trends and Explore New Growth Curves
In the first half of 2020, we kept an eye on the changes in the market. With the rise of
the “In-house Economy”, large-screen displays such as laser TVs and smart pico-projectors
begun to attract public attentions although the laser projection business, which has always
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been our advantage, was greatly affected by the pandemic, and the global economic
downturn caused by the pandemic also affected our overseas business.
From this perspective, we continued to strengthen our advantages in core devices,
actively adjusted our business structure and focused on TO C business, recording revenue
of more than RMB1 billion from our consumer business during the year, accounting for
more than 50% of our total revenue for the first time.
We adopted the business division system for our operation. On the one hand, we
implemented separate accounting for each business unit, which can strengthen internal
competition, enhance the ability of independent management and decision-making, and
speed up our market response, improve our business resilience and flexibility under the
pandemic. On the other hand, we realized the interconnection of information systems,
improving the coordination efficiency between supply, production and sales within the
business divisions.
In the meantime, we have completed the optimization of the R&D organizational
structure. While retaining the research institute that continues to focus on long-term
technology development, we have established R&D centers that correspond to business
units, which have been divided into TO B, TO C and Solution Departments to integrate the
operation of R&D, product and sales, thus forming a two-wheel-driven management model
of upgrading R&D driven by market demand and promoting sales with R&D.
We are striving to establish a dynamic and entrepreneurial team. In the past year, we
continued to attract and retain young talents and teams that would support the long-term
development of our core business, and enhanced their sense of ownership through equity
incentives and other means. In addition, we consciously improved the structure of our
management layer by attracting more young talents to stimulate its vitality.
In the context of “De-globalization” catalyzed by the pandemic, we realize that
professional IP operation will be an effective means to protect our own products, which has
prompted us to pay more attention to IP protection and management. The year of 2020 has
also witnessed a breakthrough in IP operation. We look forward to working with more
partners to make the industry bigger and stronger.
It has to be admitted that the pandemic has slowed down the momentum of our rapid
development in the past few years. However, we have also further optimized our
organizational structure, improved our operational efficiency, and adjusted our
development direction as we move forward under pressure. And we adjusted the
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development direction, improved the strategic position of TO C business and find a new
growth curve based on our judgment of future market trends.
Time tells everything
Although the pandemic hit the macro economy badly, it also gave rise to many new
growth oppotunities in the field of technology innovation. The pandemic was more like an
“accelerator” for Appotronics , pushing us to transform strategically in pain.
We are effectively executing the strategic transformation of our consumer business
with productization and commercialization at the core. We are working harder than ever to
identify opportunities in overseas markets and we are placing the highest priority on market
growth as we believe that a certain level of scale is the most central foundation for realizing
our business model.
Looking ahead to 2021, innovation and change will remain the key words of our
development, while technology and commercialization will be the main focus of our
development.
We will continue to devote ourselves to the breakthrough innovation, productization
and industrialization promotion of laser display technology, so as to develop a technology
reserve and patent layout of the whole technology chain of laser display from key system
structure, core devices to key algorithms.
We will focus on technology development and services that can bring long-term usage
value to users, provide more excellent products and applications for our consumers,
promote the expansion of application scenarios of ALPD technology in the household
field, and enhance our profitability.
We will continue to increase our IP asset-based operations, combine IP layout, IP
protection, IP licensing with disruptive innovation to maintain our innovation edge, and
conduct IP operations with an open mind and seek cooperation with head companies in
various fields worldwide. Meanwhile, we will work with more partners to explore overseas
markets and look for the next growth curve.
As a corporate citizen, we will also optimize our corporate governance, improve our
technology innovation, make adequate information disclosure, and assume our social
responsibility to our investors, customers and other stakeholders.
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We believe that the stock market should be a weighing machine instead of air-blower
for a company that pursues long-termism, which means the stock market can weigh the real
value of a company worthy of investment sooner or later. We have been working hard to
make us “a heavier company” that can maintain vitality and continuous progress despite the
ever-changing external environment.
After more than a decade of development, Appotronics has developed a complete
corporate governance system and has an excellent management team led by Mr. Bo
Lianming. As the leader of R&D, I will devote more energy to R&D and lead the technical
team to promote industrial development with continuous enthusiasm for innovation in the
future.
It would be a great honor for us to continue to create more value for our company, for
our shareholders, and for the world!
Last but not least, I would like to thank all shareholders and friends who have been
caring for Appotronics! Please believe that when you are optimistic about a track and a
company, time will prove it.
Time tells everything!
Li ,Yi
April 2021
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Important Note
I. The Board of Directors, the Board of Supervisors, directors, supervisors and senior officers of
the Company hereby warrant that the information contained in this Annual Report is true,
accurate and complete and this Annual Report is free from any misrepresentation, misleading
statement or material omission, and agree to assume joint and several liability for this Annual
Report.
II. Alert of significant risks
The Company has described in detail the risks that may exist in the production and operation of the
Company. Please refer to “Section IV Discussion and Analysis of Business Situations - Risk factors” for
the relevant risks. We draw the attention of investors to such risks in making investments.
III. All directors of the Company attended the meeting of the Board of Directors.
IV. Pan-China Certified Public Accountants (Special General Partnership) issued a standard
unqualified auditor’s report to the Company.
V. BO Lianming, Principal of the Company, ZHAO Ruijin, Person in Charge of the Accounting
Body and LIU Jie, Chief Accountant, hereby represent that the financial statements contained
in this Annual Report are true, accurate and complete.
VI. Profit distribution proposal or proposal for capitalization of capital reserve approved by the
Board of Directors during the reporting period
Upon consideration at the 31st meeting of the 1st Board of Directors of the Company, it is approved
to make profit distribution on the basis of the total shares on the record date of interest distribution - the
Company proposed to distribute to all shareholders a cash dividend of RMB 0.55 (tax inclusive) for
every 10 shares. As of December 31, 2020, the Company has a total of 452,756,901 shares, leading to
the total cash dividend of RMB 24,901,629.56 (tax inclusive). The cash dividends proposed by the
Company for this year account for 21.87% of the net profits attributable to the shareholders of the listed
company in the current consolidated financial statements of the Company. No capitalization of the
capital reserve or bonus shares will be made or distributed in the profit distribution.
The preliminary plan for profit distribution is still subject to approval at the general meeting of
shareholders of the Company.
VII.Is there any material event concerning any special arrangement of corporate governance?
□ Applicable√ N/A
VIII. Risk statement regarding forward-looking statements
√ Applicable□ N/A
The forward-looking statements contained herein regarding the future plans, development strategies
or other matters of the Company do not constitute any substantive covenant made by the Company to the
investors. The investors should be aware of the risk of investment.
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IX. Is there any non-operating occupation of funds by the controlling shareholder or its affiliates?
No
X. Is there any external guarantee provided in contravention of the stipulated decision-making
procedure?
No
XI. Whether more than half of the directors unable to guarantee the truthfulness, accuracy and
completeness of the Annual Report disclosed by the Company
No
XII.Other information
□ Applicable√ N/A
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Table of Contents
Section I Definitions ....................................................................................................................... 10
Section II Company Profile and Main Financial Indicators............................................................... 11
Section III Business Overview...... ...................................................................................................... 16
Section IV Discussion and Analysis of Business Situations ............................................................... 34
Section V Significant Matters ...... ...................................................................................................... 53
Section VI Changes in Shares and Shareholders ................................................................................. 95
Section VII Preferred Shares........... ................................................................................................... 109
Section VIII Directors, Supervisors, Senior Officers and Employees ................................................. 110
Section IX Corporate Governance .................................................................................................... 126
Section X Corporate Bonds.............................................................................................................. 131
Section XI Financial Report........... ................................................................................................... 132
Section XII List of Documents Available for Inspection .................................................................... 311
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Section I Definitions
I. Definitions
For purpose of this report, unless the context otherwise requires, the following terms shall have the
meanings indicated below:
Definitions of frequently-used terms
Company or
means Appotronics Corporation Limited
Appotronics
Appotronics
means Appotronics Corporation Ltd., the former name of the Company
Ltd.
CINEAPPO means CINEAPPO Laser Cinema Technology (Beijing) Co., Ltd.
Formoive means Formoive (Beijing) Technology Co., Ltd.
Appotronics HK means Appotronics Hong Kong Limited
Appotronics
means Shenzhen Appotronics Daye Investment Partnership (LP)
Daye
Appotronics
means Shenzhen Appotronics Deye Consulting Partnership (LP)
Deye
Appotronics
means Shenzhen Appotronics Hongye Investment Partnership (LP)
Hongye
Blackpine means Blackpine Investment Corp. Ltd.
Jinleijing means Shenzhen Jinleijing Investment Limited Partnership (LP)
Appotronics
means Shenzhen Appotronics Chengye Consulting Partnership (LP)
Chengye
Appotronics
means Shenzhen Appotronics Holdings Limited
Holdings
Huatai Appotronics Employee Stock Ownership Plan - Jiayuan I
Jiayuan I means
Collective Asset Management Plan
CINIONIC means Cinionic Limited (previously known as Barco Cineappo Limited)
GDC means GDC Technology Limited (British Virgin Islands)
IMB means Integrated Media Block, embedded inside a digital projector
Feng Dynamic Page, dynamic page architecture developed
FDP means
independently by Appotronics
DCI means Digital Cinema Initiatives of the United States
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Section II Company Profile and Main Financial Indicators
I. Company profile
Chinese name 深圳光峰科技股份有限公司
Short name in Chinese 光峰科技
English name Appotronics Corporation Limited
Short name in English Appotronics
Legal representative BO Lianming
20-22/F, Hi-tech Zone Union Tower, No. 63 Xuefu Road, Yuehai
Registered address
Street, Nanshan District, Shenzhen
Postal code of registered address 518052
20-22/F, Hi-tech Zone Union Tower, No. 63 Xuefu Road, Yuehai
Office address
Street, Nanshan District, Shenzhen
Postal code of office address 518052
Website http://www.appotronics.com
Email ir@appotronics.cn
II. Contact person and contact information
Board Secretary (Domestic representative for
Securities affairs representative
information disclosure)
Name YAN Li CHEN Yasha
20-22/F, Hi-tech Zone Union Tower, No. 63 20-22/F, Hi-tech Zone Union Tower, No.
Address Xuefu Road, Yuehai Street, Nanshan District, 63 Xuefu Road, Yuehai Street, Nanshan
Shenzhen District, Shenzhen
Telephone 0755-32950536 0755-32950536
Facsimile 0755-86186299 0755-86186299
Email ir@appotronics.cn ir@appotronics.cn
III. Information disclosure and place of reports prepared for inquiry
Designated media for information disclosure China Securities Journal, Shanghai Securities News,
Securities Times, Securities Daily
Websites designated by the China Securities www.sse.com.cn
Regulation Commission for publishing the
annual reports
Place for keeping the annual reports Office of the Board of Directors
IV. Stock and depository receipts of the Company
(I) Stock of the Company
√ Applicable□ N/A
Stock of the Company
Stock exchange Former stock short
Type of stock Stock short name Stock code
and board name
Shanghai Stock
A-shares Exchange, STAR Appotronics 688007 N/A
Market
(II) Depository receipts of the Company
□ Applicable√ N/A
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V. Other related information
Pan-China Certified Public Accountants
Name
(Special General Partnership)
Domestic accounting firm 9/F, No. 128 Xixi Road, Xihu District,
Office address
appointed by the Company Hangzhou, Zhejiang
Accountants
YANG Kejing, NIU Chunjun
signing the report
Name Huatai United Securities Co., Ltd.
5/F (01A, 02, 03 and 04), 17A, 18A, 24A, 25A
and 26A, Hong Kong China Travel Service
Office address
Building, Central Plaza, Futian District,
Sponsor performing the duty of Shenzhen
continuous supervision within Sponsor
the reporting period representatives ZHANG Guanfeng, QIN Lin
signing the report
Period of
continuous From July 22, 2019 to December 31, 2022
supervision
VI. Main accounting data and financial indicators in the past three years
(I) Main accounting data
In RMB
% Change
Main accounting data 2020 2019 (2020 v 2018
2019)
Operating income 1,948,884,176.83 1,979,148,918.89 -1.53 1,385,727,211.09
Net profit attributable to
shareholders of the 113,847,873.06 186,457,276.71 -38.94 176,971,092.49
listed company
Net profit attributable to
shareholders of the
listed company after
40,289,988.80 134,218,640.96 -69.98 165,011,362.18
deduction of
non-recurring profit or
loss
Net cash flow from
52,390,430.42 243,000,903.71 -78.44 117,773,454.30
operating activities
% Change
December 31,
December 31, 2019 (2020 v December 31, 2018
2020
2019)
Net assets attributable
to shareholders of the 2,091,599,671.75 1,974,559,837.64 5.93 715,913,478.56
listed company
Total assets 3,226,204,326.69 3,099,508,090.85 4.09 2,073,471,490.56
(II) Main financial indicators
Main financial indicators 2020 2019 % Change (2020 v 2019) 2018
Basic earnings per share
0.25 0.45 -44.44 0.73
(RMB/share)
Diluted earnings per share
0.25 0.45 -44.44 0.73
(RMB/share)
Basic earnings per share after 0.09 0.33 -72.73 0.68
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deduction of non-recurring
profit or loss (RMB/share)
Weighted average return on net
5.62 14.84 -9.22 percentage points 41.25
assets (%)
Weighted average return on net
assets after deduction of 1.99 10.68 -8.69 percentage points 38.49
non-recurring profit or loss (%)
Proportion of R&D investments
10.49 10.19 +0.30 percentage points 9.79
to operating income (%)
Explanation about the main accounting data and main financial indicators in the past three years
√ Applicable□ N/A
1. During the reporting period, the net profit attributable to shareholders of the listed company and
the net profit attributable to shareholders of the listed company after deduction of non-recurring profit or
loss decreased by 38.94% and 69.98%, respectively; the basic earnings per share, diluted earnings per
share, and basic earnings per share after deduction of non-recurring profit or loss decreased by 44.44%,
44.44%, and 72.73%, primarily due to the following:
(1) Under the impact of COVID-19, revenues from the cinema business with a higher profit margin
decreased despite the substantial increase in revenues from the household business, which reduced the
consolidated gross margin. As a result, the gross profits decreased although the revenues remained at the
same level due to the changes in the product portfolio of the Company.
(2) During the reporting period, the year-on-year increase in non-recurring profit or loss was
primarily due to the gains of RMB 18.6249 million from wealth management products purchased with
temporarily idle funds, and the government grants of RMB 40.7508 million recognized in the profit or
loss for the current period.
2. The decrease in the net cash flow from operating activities by 78.44% year on year was primarily
due to the reduction in revenues from the cinema service business under the impact of COVID-19, and
the increase in payments for procurement of risk-based stocks.
VII. Differences in accounting data between domestic and overseas accounting standards
(I) Differences in net profit and net assets attributable to shareholders of the listed company
disclosed on the financial statements according to the international accounting standards and
the Chinese accounting standards
□ Applicable√ N/A
(II) Differences in net profit and net assets attributable to shareholders of the listed company
disclosed on the financial statements according to the overseas accounting standards and the
Chinese accounting standards
□ Applicable√ N/A
(III) Explanation about the difference between domestic and overseas accounting standards
□ Applicable√ N/A
VIII. Main financial indicators in 2020 by quarter
In RMB
1st quarter 2nd quarter 3rd quarter 4th quarter
(Jan. - Mar.) (Apr. - Jun.) (Jul. - Sep.) (Oct. - Dec.)
Operating income 306,900,748.84 409,124,458.50 522,373,501.53 710,485,467.96
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Net profit
attributable to
13,322,216.29 1,005,226.67 29,810,782.27 69,709,647.83
shareholders of the
listed company
Net profit
attributable to
shareholders of the
listed company after -7,989,708.14 -22,242,786.99 18,410,451.42 52,112,032.51
deduction of
non-recurring profit
or loss
Net cash flow from
-38,289,185.55 101,295,247.35 50,310,681.49 -60,926,312.87
operating activities
From the 3rd quarter, the cinema projector business recovered gradually, and in the 4th quarter, the
sales of laser TVs and smart mini projectors, among other To C products, increased rapidly, leading to
substantial increase in both the operating income and gross profits. This resulted in the increase by
133.84% and 183.06% quarter on quarter in the net profit attributable to shareholders of the listed
company and increase in the net profit attributable to shareholders of the listed company after deduction
of non-recurring profit or loss, respectively.
Explanation about the difference between quarterly data and the data disclosed on regular reports
□ Applicable√ N/A
IX. Items and amounts of non-recurring profit or loss
√ Applicable□ N/A
In RMB
Item of non-recurring profit or Note (if
2020 2019 2018
loss applicable)
Gain or loss on disposal of
-1,112,121.13 -3,214,488.06 -1,711,797.47
non-current assets
Government grants recognized in
profit or loss for the current
period (excluding government
grants that are closely related to
the business of the Company and 40,750,823.51 25,782,112.48 24,032,705.76
are provided in fixed amount or
quantity continuously according
to the applicable polices and
standards of the country)
Profit or loss on entrusted
investments or assets 18,624,853.96
management
Net profit or loss of subsidiaries
from the beginning of the period
up to the business combination
date recognized as a result of 23,593,500.83 23,321,528.06 18,765,375.86
business combination of
enterprises involving enterprises
under common control
Profit or loss on changes in the
fair value of held-for-trading
financial assets, derivative 9,552,990.98
financial assets, held-for-trading
financial liabilities and derivative
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financial liabilities and
investment income on disposal of
held-for-trading financial assets,
derivative financial assets,
held-for-trading financial
liabilities, derivative financial
liabilities and other debt
investments, other than those
used in the effective hedging
activities relating to normal
operating business
Reversal of impairment loss on
accounts receivable and contract
238,836.00
assets tested for impairment
individually
Other non-operating income and
2,429,083.25 2,981,778.07 1,182,062.52
expenses
Other gains or losses meeting the
definition of non-recurring profit 323,003.17 -22,338,042.90
or loss
Effect of minority interests -1,982,929.14 -1,891,481.86 -3,860,005.15
Effect of income taxes -9,068,330.19 -4,532,639.92 -4,110,568.31
Total 73,557,884.26 52,238,635.75 11,959,730.31
X. Items at fair value
√ Applicable□ N/A
In RMB
Effect on profit
Item Opening balance Closing balance Change for the current
period
Held-for-trading 540,000,000.00 114,000,000.00 -426,000,000.00 18,624,853.96
financial assets
Investment in other 11,975,419.38 11,975,419.38
equity instruments
Total 551,975,419.38 125,975,419.38 -426,000,000.00 18,624,853.96
XI. Explanation about performance indicators not under the Accounting Standards for Business
Enterprises
□ Applicable√ N/A
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Section III Business Overview
I. Main business, business model, status of industry and R&D activities during the reporting
period
(I) Main business and main products or services
1. Main business
As a leading laser display technology enterprise in the world, we mainly engage in the research,
development, and production of high-end semiconductor display light sources and the provision of solid
light source solutions based on ALPD laser display technology and architecture.
Since our innovative invention of the ALPD technology in 2007, we have created new laser
display architecture, built core intellectual properties, and mastered the designing and manufacturing of
core devices. We have upgraded the ALPD technology continuously, and relying on the advanced
ALPD technology, promoted the industrial applications of laser display, and gradually extended the
application of laser display from laser cinema projection and other high-end applications to large venue,
business education, laser TV, smart mini projector and other display applications.
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2. Main products
Our diversified products may be classified into core laser display devices and complete laser
display equipment, wherein the core devices can be further classified into laser light source (cinema light
source and large venue light source), laser TV light generator and laser projection screen, and complete
laser display equipment can be further classified into laser cinema projector, large venue laser projector,
laser video wall, laser education projector, laser TV and smart mini projector.
(1) Products of core devices
Our core devices, including the laser light source and light generator, reflect various advantages and
characteristics of ALPD technology, such as high brightness, wide color gamut, high contrast and
relatively low cost. The quality and performance of such products have received recognition of
downstream customers, which helps us establish our position as a core supplier on the industry chain of
laser display.
Figure 1: Laser light source and laser light generator
Figure 2: Technical effects of the ALFA screen
(2) Products of complete equipment
1) Products for the commercial market
On the basis of laser light source and light generators, we have further developed complete
equipment, which has been widely used in cinema projection, cultural and tourism lighting, security and
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surveillance, education and training, and other commercial applications, and become the mainstream
choice for high-quality projection display technology.
- In the field of cinema projection, we have created a product portfolio of laser cinema light sources
covering multiple ranges of lumens from 5,000 lumens to 55,000 lumens, which are compatible with all
projection equipment brands on the market for wide application in large-sized, medium-sized and
small-sized cinemas. Thanks to the low operating power, the laser cinema light source reduces electricity
consumption by 50% compared with the xenon lamp; moreover, since no bulb replacement is required, it
helps cinemas to minimize their operating costs. We have more than 20,000 laser cinema light sources
installed throughout China.
Figure 3: More than 20,000 halls chose Appotronics’s ALPD laser projection solutions
- On the large venue display market, Appotronics’s DLP large venue projector series covers the
range of 5,000-60,000 lumens, hence suitable for outdoor lighting, cultural and tourism lighting, theme
exhibition halls, corporate exhibition rooms, theater performance, 4D dining hall, conference control,
rail transit, and other scenarios.
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Figure 4: Appotronics’s laser high-brightness S4K series products
- On the education market, in line with the national implementation plan of “Internet + education”,
the Company has developed a series of solutions for smart classrooms, including laser smart all-in-one
teaching device, laser synchronous classroom solution, laser interconnected dual-board solution,
high-definition high-brightness conference system, etc., making its contribution to promote the building
of education IT systems with users at the center.
Figure 5: Appotronics multi-screen interactive smart classroom
2) Products for the household market
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In recent years, laser TV, smart mini projector and other household projector products have been
developing rapidly, due to the ever increasing acceptance of the new mode of movie watching by the
consumers, and rapid decrease of the costs and prices and better performance of products. During the
reporting period, Formoive laser TV and smart mini projector continue to gain market shares, leading to
the rapid growth in our household equipment business.
Figure 6: Formoive household laser cinema
(II) Main business model
We are mainly engaged in the R&D, production, sale and light source projection of core laser
display devices and complete laser display equipment, and provision of customized R&D and
manufacturing services to customers, and have an independent and complete procurement, sales,
production and service system.
1. R&D mode
We mainly adopt the independent R&D mode, and separate technology development from product
development in organization structure and development process.
Our technology development focuses on creating and mastering core technologies and key
technologies. When a kind of technology becomes relatively mature, it will be applied in product
development. Our technology development team comprises a large number of creative scientists, who
follow up the progress of frontier technology in the industry, focus on the key technical problems that
urgently need to be solved in our business development, and develop the technologies required for our
products to be launched in the next three years with reference to the prevailing trend of market demands
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from the perspective of user requirements on product designing, so as to maintain the Company’s core
competitive edge in technology and leading position in the industry.
Our product development is driven by product planning, and mainly divided into stages of
feasibility, EVT, DVT, PVT and MP. We set up product lines and product development teams by market
segment, and develop series products based on product platform, to rapidly respond to market demands.
Our product development team is responsible for developing the products that will be put into mass
production within about one year. The product development team is divided into optical, structure,
software, hardware, thermal and other technical departments by profession. Such technical departments
share technologies and platforms with each other.
Through matrix management, we realize flexible allocation and sharing of human, operating and
other resources among different products, to optimize resource allocation and improve R&D efficiency
and professional and technical capability.
2. Procurement mode
Our Resources Development Department and Supply Chain Center Planning Management
Department are responsible for procurement, of which, the Resources Development Department is
responsible for the selection of suppliers, determination of purchasing prices, building of business
system and supplier platform and other front-end procurement affairs, and the Planning Management
Department is responsible for the preparation and implementation of procurement plans and other
back-end procurement affairs. We have formulated the Supplier Development, Management and Control
Process and other policies, to manage the development of suppliers, implementation of procurement
plans, inspection of incoming materials and other business.
3. Production mode
We mainly reply on own production, supplemented by OEM, mainly because of the different
production capacity required by different manufacturing processes and different products and
consideration of cost-effectiveness. Our core devices sold or used to provide projection services are
manufactured by us. Laser TV and smart mini projector products are assembled by OEMs. Other
complete equipment products are also manufactured by us.
With respect to the products manufactured by us, we schedule production pursuant to purchase
orders, taking into account the requirement of safety stock. The production of standard spare parts is
scheduled according to the requirement of safety stock and relevant production plans.
With respect to OEM products, we appoint third parties to manufacture PCBA, coating and other
semi-finished products, and assemble laser TV, smart mini projector and other complete equipment.
4. Sales mode
Our sales mode is classified into product sales and provision of projection services, as described
below:
(1) Product sales mode
Our products include core laser display devices and complete laser display equipment: the sale of
core devices is implemented in the mode of customized development and direct sale; the sale of
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complete equipment has three modes, which are customized direct sale, non-customized direct sale and
distribution; large venue laser projectors are sold mainly using the off-line direct sale mode; Formoive
branded laser TV and smart mini projector products are sold both at the online retail stores on Tmall, JD,
Youpin, Pinduoduo and other platforms, and off-line physical stores; and laser teaching machine
products are sold through distributors.
(2) Mode of projection services
CINEAPPO, a controlled subsidiary of the Company, provides laser cinema projection services to
downstream cinema customers (“laser as a service”), and charges service fees according to the length of
use of light source by the cinemas (the fees are charged by the hour or a certain period of time), while
the cinemas do not need to purchase light source equipment, thereby effectively easing their capital
pressure and reducing their labor and maintenance costs.
(III) Industry in which the Company operates
1. Development stage, basic characteristics and main technical barriers of the industry
As an emerging industry, laser display is at the early stage of rapid development. The application of
laser display technology in TV and other household products is a wholly new creation.
Currently, picture display technologies are mostly implemented by using DLP, 3LCD, and LCOS
display chips as the picture modulator, achieving greatly different actual display effects depending on
the light source. In 2007, the ALPD technology created by Appotronics’s R&D team made a
breakthrough in the application of core devices and imaging solutions of laser display, hence becoming
the mainstream technical route for the laser projector industry and widely used in movie, TV, business
education, and large venue fields.
In terms of core technologies, certain companies in the industry may face the problems of lack of
R&D capability and core technology, and reliance on supply chain for core patents and core devices,
rendering them unable to compete with leading domestic or international companies that have their
proprietary IP or core technologies and core devices.
In terms of specific applications, the technical barriers for To C market are high efficiency, small
size and low cost, and the technical barriers for To B market are continuous upgrading of performance.
2. Analysis of the position of the Company in the industry and changes therein
At the beginning of the industrialization of laser display technology, as one of the leading
companies in the field of laser display, Appotronics has mastered core technologies. After multiple
iterations, our ALPD technology architecture has gained relatively solid technical advantages in terms
of performance, cost, efficiency and size. We have not only created the fundamental key architecture for
laser phosphor display technology, but also built a proprietary IP protection system through patent
applications in China, the United States, Japan, Europe and other countries. On the principle of being
open for cooperation and striving for win-win development, Appotronics has become a leading supplier
of core devices in the laser display industry based on its intellectual property rights and core devices,
hence driving the development of the entire industry and ecology.
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According to the Research Report on Chinese Laser Projector Market 2020 issued by AVC, blue
laser + phosphor powder technology architecture, represented by ALPD, is still the mainstream light
source technical route for the laser display industry at present.
3. Development of new technologies, new industries, new types of operation and new modes
during the reporting period and future trend
(1) Projectors are expanding into the household consumer market at a rapid growth rate in the
market segment
Given the rapid technical advancement and high household demand on large-screen displays, smart
projector devices have become the largest market segment for projector devices in China on the basis of
the rapid increase in sales thanks to their cost effectiveness and portability compared with large-screen
TVs. According to AVC, despite the impact of pandemic in 2020, the sales of laser TVs increased by
15.5% year on year; laser TVs will become a new product type with “millions” installation in two or
three years. In the Guidelines for Myopia Prevention in Children and Adolescents during COVID-19
pandemic (Updated Version) released by the National Health Commission, projectors are recommended
as the first choice of devices for use during the teaching sessions. Compared with conventional liquid
crystal screens, some projectors equipped with advanced laser technologies can protect consumers
during long-time online work and study and reduce the harm due to eye fatigue. According to IDC, it is
expected that the projector device market of China will grow at the compound growth rate of 14%
between 2020 and 2024.
(2) The accelerated technical upgrade in the smart mini projector industry leads to a promising
prospect for the application of laser light sources
The projector light sources are gradually evolving from bulbs to semiconductor solid light sources.
The Report of Market Research and Investment Forecast Analysis of China Projector Industry released
by Forward Industry Research Institute revealed the rapid growth of projectors within the range of
1500-2000 lumens with a rapidly increasing share of smart projectors, and the development trend of
high-definition, high-brightness, and smart projects. With respect to market demands, it is expected that
projectors within the range of 1500-2000 lumens will gain increasing shares in projectors, which may
further reducing the survival space of low-brightness projectors. In the future, on the basis of the
development in fundamental hardware technologies such as light sources, lighting technologies, and lens
technologies, the optimization of overall device design, and the development of software technologies
such as smart sensing capabilities and image quality optimization technologies, the smart projector
market will further expand thanks to the greatly improved display performance and use experience of
projector devices, technical upgrade, and reduced costs.
(3) Laser display is integrated with new technologies for expansion into new display fields
Given the compatibility between the laser display technology and cutting-edge technologies,
including human-machine interaction, smart recognition, Internet of Things, cloud platform, and big data,
the wide application of 5G mobile phones will create potential demands for supporting laser display
products. Therefore, it’s expected there will be huge market demands for supporting mobile products
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featuring high efficiency, small size and low cost in the future. In the short term, the development
priority of the current display market will witness the development of laser display technology towards
advantages in cost-performance ratio, high portability, high dynamic range, wide color gamut, and high
brightness for integration with ultra short throw and anti-ambient light screen technologies.
(4) In the recovery of the movie industry, the global film industry may transform into an asset-light
operating mode
According to the data of China Film Administration, with the box office receipts of USD 2.983
billion, and total cinema visits of 548 million in urban cinemas, Chinese film market surpassed North
America to become the largest film market on the world. In 2020, despite the impact of the pandemic,
China still maintained the growth trend in the total number of screens - with 5,794 additional screens,
the total number of screens reached 75,581 in China, up by 8.30% on the basis of the 69,787 screens in
2019.
Considering the shut-down of cinemas both in and outside of China during the pandemic, more
cinemas realized the importance of cash flow and digitalized management. Appotronics released the
projection service mode of “laser as a service”, for which service fees are charged according to the
length of use of light source by the cinemas (the fees are charged by the hour or a certain period of time).
This service mode eases the cinemas’ capital pressure caused by purchasing of cinema equipment, hence
driving cinema transformation from input of factors to inherent efficiency.
(IV) Core technologies and progress in R&D of technologies
1. Core technologies and their advancement, and changes during the reporting period
We have been committed in the breakthroughs, innovations, commercialization and
industrialization of laser display technology, and created technology reserves and patent portfolios
covering the whole technology chain of laser display from key system architecture, core devices to key
algorithm. With the ALPD4.0 technology matured and the ALPD 5.0 and 6.0 technology under
development and trial operation at the same time, we constantly maintain our leading advantages
compared with followers and competitors in the industry. In addition, as a Leader Level Member of the
Laser Illuminated Projector Association (LIPA), we have participated in and led the preparation of the
international laser display standard.
During the reporting period, we have poured substantial R&D resources in the preparation and
processing of thin film materials, micro- & nano- optical structure technology, light source architecture,
dynamic control, complete equipment structure, machine perception, miniaturization of laser display
system, and battery-powered high-performance mini laser projector technology. The big data, algorithm
and design solutions accumulated by us over the years will enable us to rapidly develop products and
solutions meeting the requirements of different application scenarios, such as cinema projection, home
entertainment, outdoor exhibition, ultra large-sized display, and immersive display.
In terms of cutting-edge technologies, the Company has started the development of the ALPD 5.0
and 6.0 technology at the same time. The ALPD 5.0 technology will make use of the characteristics of
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laser with reference to the creation of content to achieve high dynamic range display and improve visual
experience. The ALPD 6.0 is planned to make breakthrough in the existing display architecture to
further reduce the cost of laser display systems. By now, with the prototype developed successfully, the
Company is conducting further optimization. This technology has the prospect of entering the stage of
product development.
2. R&D achievements during the reporting period
During the reporting period, the Company made the following achievements in product innovation:
1. Core devices
The Company independently developed the advanced light shaping and light absorption ALFA
technology, and with the micro- & nano- structure and nanometer coating, released Fabulus series
products - the first 100-inch flexible Fresnel anti-light screen on the world. Being made with multiple
layers of nanometer optical films, the screen has superior performance and greatly improves display
effects. Thanks to its foldable design and small size, it solves the transportation difficulty of large-screen
laser TVs in the industry; moreover, we offer the integrated DIY installation solution to make household
cinema more light-weighted and more convenient. We are far ahead of conventional products of flexible
anti-ambient light screens in terms of costs and performance; being combined with our core devices, the
screen can further improve the space for reducing the costs of the complete equipment. We have filed a
total of 138 domestic and foreign patent applications (including PCT applications) for the ALFA screen
technology, including 87 Chinese patent applications, 12 overseas patent applications, and 39 PCT
international patent applications, of which 24 have been granted covering multiple fields including
optical designing, structure, process, and materials.
During the reporting period, we completed the product development for the ALPD RGB+
technology based on ALPD 4.0, including the trichromatic laser cinema light source platform and the
trichromatic laser TV light generator platform, hence providing more abundant and more competitive
solutions of core devices for the cinema industry and the laser TV industry. Meanwhile, in an effort to
create the track of smart mini projectors, we developed various laser smart mini projection light
generators embedded with the ALPD technology, which greatly upgrade the brightness and energy
efficiency while improving color effects.
We developed a new-generation cinema RGB+ light source suitable for almost all cinema
application scenarios from small-sized projection halls to giant screens. The latest heat radiation
technology integrated not only reduced the size and costs of the light source, but also reduced the
maintenance and use costs of the light source, helping cinema customers reduce operating costs and
enhance profitability.
2. Software
Our independently developed projector integrated media block (DCMB/IMB), which has passed the
DCI certification, has the capabilities of the independently developed cinema media block and media
server.
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Formoive, a controlled subsidiary of the Company, released the Feng OS operating system, which
upgraded the experience in page performance by employing the independently developed browser and
core standard components on the basis of the independently developed Feng Dynamic Page (FDP)
technical architecture, and provided modular, professional, and customized function experience, hence
enhanced the flexibility in content operation, improved the capability of continuous delivery in agile
operation, and realized more complex interaction functions.
3. Complete equipment
We developed high-, medium-, and low-end laser TV products to cater for different user demands
on the household market. Having the highest brightness of 4,000 lumens, covering the REC.709, DCI,
and REC.2020 color gamuts, and with the maximum color gamut area of 158% NTSC, our products are
at the highest level in the industry.
On the commercial market, we developed the ultra-high bright large venue projector S4K60, which
can reach the highest brightness of 60,000 lumens in the industry; we continuously improved the
performance of ultra short throw business education projector devices on the basis of the previous
generation of light generators and developed the 4K resolution ultra short throw business education
projector equipment with the brightness improved by 50% and screen size increased from 100 inch to
150 inch, which further improved the application scope and competitiveness of the products.
List of intellectual property rights acquired during the reporting period
Newly added in the current year Total
Applications (pcs) Granted (pcs) Applications (pcs) Granted (pcs)
Patent for 183 113 1,352 601
invention
Patent for utility 71 72 429 396
model
Patent for design 31 36 153 139
Software 40 33 88 81
copyright
Others 157 97 868 654
Total 482 351 2,890 1,871
Note: 1. “Others” in the table above refer to trademarks of the Company; 2. During the reporting period,
the Company filed 257 PCT international patent applications.
3. R&D investments
In RMB
Current year Last year Change (%)
R&D investments expensed 204,443,369.10 201,697,766.26 1.36
R&D investments capitalized 0.00 0.00 N/A
Total R&D investments 204,443,369.10 201,697,766.26 1.36
Proportion of R&D investments to 10.49 10.19 0.30
operating income (%)
Proportion of R&D investments 0.00 0.00 N/A
capitalized (%)
Reason for the material change in the total R&D investments compared with last year
□ Applicable√ N/A
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Reasons of the great change in the proportion of R&D investments capitalized and explanation
about the rationality thereof
□ Applicable√ N/A
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4. R&D projects
√ Applicable□ N/A
In RMB
Progress
Specific
N Estimated total Investment in the Aggregate or Technological
Item Goals application
o. investment current period investment interim level
scenario
results
This project will research the
This project will This project will
industrialization of the
greatly promote build a
technology of RGB
the industrial demonstration
Trichromati trichromatic laser with
upgrading of production line for
c Laser phosphor to satisfy the market
trichromatic laser trichromatic laser
Display demands for RGB trichromatic
display display complete
Complete Laborato laser display, build a mass
1 102,840,000.00 15,131,388.57 24,535,107.34 technology, and equipment, with an
Equipment ry test production line for
gain international annual production
Production trichromatic laser display
competitive edge capacity of
Demonstrati complete equipment, acquire
for proprietary 200,000 sets of
on Line proprietary IP, and realize
trichromatic laser trichromatic laser
large-scale application of
display display complete
trichromatic laser display
technology. equipment.
products.
4K laser TV with a new
generation of light generator
technologies, with the
Mass
independently developed Feng Take the lead in
2 Laser TV 49,770,000.00 46,460,846.84 46,460,846.84 producti Household market
OS system, achieves great the industry
on
improvement in color gamut,
brightness, cost effectiveness,
and ease of use.
By employing the fourth Take the lead in Upgrading of light
generation of light generator the industry; the source for
Mass
Core technologies and making use cost small-sized cinema
3 40,890,000.00 38,765,825.33 38,765,825.33 producti
devices of the advantages of the APLD effectiveness, projectors, laser
on
technology, create a new color gamut, TV and other
generation of high-end but light effect, and fields.
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Progress
Specific
N Estimated total Investment in the Aggregate or Technological
Item Goals application
o. investment current period investment interim level
scenario
results
inexpensive light generator other
products, so as to reduce the performance are
cost, improve the color gamut greatly
and brightness, hence improve improved, to
the cost effectiveness of better satisfy the
cinema light sources. demands of
customers.
30,000-lumen, large-size, and
wide-color gamut large venue The high-end
Other projectors and S4 business large venue
High-end large
complete projectors with higher projector and
Mass venue projector,
equipment brightness and cost business
4 41,920,000.00 36,629,898.45 36,629,898.45 producti business education
(large venue effectiveness, which are education
on projector and other
+ business models for expanding the projector take the
fields.
education) high-end market in the large lead in the
venue and business education industry.
fields.
The first
Laser Mass DCI-compliant overseas small proprietary
Expand to overseas
5 cinema 35,060,000.00 31,533,935.11 31,533,935.11 producti cinema projector meeting DCI-compliant
markets.
projector on overseas standards. cinema projector
in China.
Development of laser Through
Key phosphor display optical transformation of
Enterprise engine, high-performance lab R&D results,
Laboratory fluorescent materials and develop multiple
Take the lead in
6 for Laser 34,000,000.00 9,815,926.16 16,040,897.81 Pilot test fluorescent components, laser display
the industry.
Display in portable laser display terminal products,
Guangdong technology, and laser display and promote the
Province technology with high contrast development of the
and high color reproduction. entire display
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Progress
Specific
N Estimated total Investment in the Aggregate or Technological
Item Goals application
o. investment current period investment interim level
scenario
results
industry chain.
Smart mini
New generation of mini projector with
High-perfor Mass projector products with greatly the highest
Smart mini
7 mance mini 18,540,000.00 17,661,161.77 17,661,161.77 producti improved cost effectiveness by brightness-to-siz
projector market.
projector on employing a new generation of e ratio to take the
platform display technology. lead in the
industry.
Applied in
Low cost, high reflection
household laser
Mass efficiency, anti-ambient light
Take the lead in products in
8 Screen 8,830,000.00 8,444,386.87 8,444,386.87 producti TV screen, the first flexible
the industry. combination with
on Fresnel anti-light screen for
existing laser
laser TV on the world
display.
T
ot / 331,850,000.00 204,443,369.10 220,072,059.52 / / / /
al
Remark
The Trichromatic Laser Display Complete Equipment Production Demonstration Line is under the “Strategic Advanced Electronic Materials” in the National
Key Research and Development Programs, for which Appotronics is the undertaking unit, while Formoive and CINEAPPO are the cooperating units. The
expenditure budgets planned by the three companies are RMB 95.18 million, RMB 4.22 million, and RMB 3.44 million, respectively.
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5. R&D staff
In RMB 0’000
Basic information
Current period Previous period
Number of R&D staff (persons) 369 387
Proportion of R&D staff to total employees of 31.54 31.06
the Company (%)
Total compensation of R&D staff 12,090.48 11,805.40
Average compensation of R&D staff 32.77 30.50
Education background
Academic background Number (persons) Percentage (%)
Doctor 19 5.15
Master 98 26.56
Undergraduate 202 54.74
College or below 50 13.55
Total 369 100.00
Age structure
Age range Number (persons) Percentage (%)
30 years of age or below 153 41.46
30-40 years of age 177 47.97
40 years of age or above 39 10.57
Total 369 100.00
6. Other issues
□ Applicable√ N/A
II. Material changes in the main assets during the reporting period
√ Applicable□ N/A
The total assets of the Company increased by 4.09% during the reporting period. For specific
changes, refer to “Section IV Discussion and Analysis of Business Situations - III. Main business
activities during the reporting period - (III) Analysis of assets and liabilities”.
Where: overseas assets RMB 387,072,800.58, representing 12.00% of the total assets.
III. Analysis of core competitiveness during the reporting period
(I) Analysis of core competitiveness
√ Applicable□ N/A
1. Advantage in proprietary technologies
Since we invented the ALPD technology, the fundamental key technology architecture has been
gradually formed and improved. On the basis of this technology, we have established rich product lines,
which have a remarkable substitution effect on the traditional products in cinema, TV, business
education, large venue and other fields. The ALPD technology has become the mainstream technical
route for laser display. By relying on fundamental research and original innovation rather than
consumption of resources, we have realized rapid development, continuously improved the performance
and cost-performance ratio of our products, and maintained the competitive advantages in the industry.
2. Sound IP protection system
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With our core patents covering laser phosphor display technologies, we have gradually built up a
patent system containing the largest number of patents covering the widest scope with the highest
quality in the industry. This patent system safeguards our fundamental research and original innovation.
With key core patents at the center, we have built a united whole patent system, and is hard to be
simulated fully or broken by the competitors.
3. Advantage in full coverage of laser display scenarios
Our ALPD technology has certain demonstration effect in the field of laser display, and its
application covers professional market and mass market, and high-end market and low-end market. Our
multiple product series can satisfy the demands of various scenarios. In addition, we adopted the
differential development strategy and upgraded ALPD technology from multiple angles, so as to
provide solutions to satisfy the demands of different market segments and applications.
4. Advantage in layout in the whole industry chain
We have layout in the whole laser display industry - from the development and manufacturing of
independently developed core devices and complete equipment to laser display solutions. For core
devices, we have released the cinema light source, large venue light source, laser light generator, and
laser projection screen; for complete equipment, we have products for laser cinema projector, large
venue laser projector, laser video wall, laser education projector, laser TV and smart mini projector; our
solutions are widely used in cinemas, cultural and tourism lighting, security and surveillance, education
interaction, commercial applications, household cinema, and consumer electronic products.
5. Advantage in product performance
Through more than ten years of R&D efforts, our technical advantages have been given full play in
cinema, household, large venue and other fields. Our products show superior performance in brightness,
service life, color gamut, removal of speckle and other aspects. Through sufficient validation at R&D
and quality labs and on-site use for a long time, our product models have become mature. Since its
installation in June 2014, the first set of ALPD cinema light source has been stably operating for over
six years. Our products in other fields have also won trust on the market with their outstanding
performance and reliable quality.
6. Advantage in talents and teams
Our founder and Chairman, Dr. LI Yi, is a well-known expert in the field of laser display. Our
General Manager, Dr. BO Lianming is a well-known leader in the display industry. Under the leadership
of our outstanding management team, we now have a sound corporate governance system and strong
internal controls, and have greatly improved our management level and risk prevention capability. In
addition, we have a group of high-quality R&D talents, including a lot of doctors and masters graduated
from famous domestic and foreign universities. Our R&D team has taken the lead in the research of laser
display technology in the industry. Through the combination of technology and management, we are
able to precisely catch the development trend of the display industry, and continuously release new laser
display products with prominent prospects in response to market demands.
7. Advantage in business model
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For the cinema projector market, based on our advanced technology and stable product
performance, we took the lead in releasing the “projection service mode” for cinema laser light sources
in the industry. Under this mode, a cinema only needs to pay for the duration in use instead of
purchasing a light source. This not only effectively reduced their fund pressure and maintenance cost of
the cinema, but also maintained the long-term and stable revenues for the Company while promoting the
rapid application of the ALPD technology on the cinema projection market.
(II) Events occurred during the reporting period that have a material effect on the Company’s
core competitiveness, analysis of the effect and countermeasures
□ Applicable√ N/A
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Section IV Discussion and Analysis of Business Situations
I. Discussion and analysis of business situations
(I) Analysis of the overall business situation during the reporting period
The year 2020 is an extraordinary year - a year of challenge to the Company; however, we
achieved the performance better than expectation by making response to the crisis actively.
Our projection service business was hit badly by the shut-down of cinemas throughout China for
half a year due to COVID-19. The operating income decreased by 56.85% year on year, and the gross
margin rate decreased by 28.76 percentage points compared with last year. In 2020, thanks to the active
adjustment in the operating strategy in an attempt to eliminate the impact of the pandemic, we achieved
stable development of the non-cinema business, especially the rapid growth in the household business
and core device business, which enhanced the Company’s resistance to material risks. The gradual
recovery of the cinema service business resumed the growth of our performance in the 4th quarter.
During the reporting period, our operating income was RMB 1.949 billion, substantially the same
as that of last year; the total assets of the Company at the end of the reporting period was RMB 3.226
billion, up by 4.09% from the beginning of the reporting period; and the equity attributable to owners of
the Parent Company was RMB 2.092 billion, up by 5.93% from the beginning of the reporting period. In
the 4th quarter, our operating income was RMB 710 million, up by 13.25% year on year; the net profit
attributable to the Parent Company was RMB 69.7096 million, up by 11.85% year on year, and the net
profit attributable to the Parent Company after deduction of non-recurring profit or loss was RMB
52.1120 million, up by 18.27% year on year.
The year 2020 was also an important year for the Company to improve our internal strength
and further enhance the foundation in pursuit of a new growth curve.
1. Explore intellectual property operation to scale up and strengthen the ecology of the laser
display industry
Given the enhanced top-level design on the protection of intellectual property rights and emphasis
on technology innovation on the national level, the creation, protection, and exploitation of intellectual
property rights will become normal operating activities of strategic emerging technology enterprises. As
of December 31, 2020, Appotronics has obtained 1,136 patents throughout the world, had 798 domestic
and foreign patents pending (including 751 patent applications for invention) and 257 PCT patents
pending, owning a total of 2,191 patents pending and granted throughout the world.
As of December 31, 2020, a total of 23 cases of petition for invalidation were brought up by
domestic and foreign entities against our core patents. By now, we have received the examination results
from China National Intellectual Property Administration (CNIPA) for 22 of the cases, in all of which
the validity of our patent rights were maintained. Since 2013, Appotronics initiated a total of 49 patent
lawsuits against domestic and foreign enterprises during the industrialization of our core technologies
and intellectual property rights, and received favorable results in the 22 cases that have been decided,
involving the total amount of RMB 40.45 million as compensation for infringement, settlement fees, or
patent license fees.
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On the principle of being open for cooperation and striving for win-win development, and based on
our intellectual property rights and core devices, the Company is exploring the mode of patent operation
to establish and gradually improve the ecology of the laser display industry chain, showing the
commercial values of step by step. During the reporting period, the Company entered into Patent
License Agreements and Strategic Cooperation Agreements with partners to grant licenses of our patents
and providing such partners with advanced and highly efficient core devices. In addition, in response to
the current complicated environment of international trade, our strong system of intellectual property
rights safeguards not only our business development but also the overseas business of our partners.
In the future, we will continue our efforts in building our system of intellectual property rights,
enhancing patent operation and management, and constantly promoting the formulation of industrial
technical standards to continuously maintain our competitive advantages in the industry, drive the
overall development of the industry ecology, and scale up and strengthen the laser display industry with
our core devices and technical advantages.
2. Focus on the household business to create new momentum for continuous growth
During the reporting period, our household business (laser TV and smart mini projector) realized
the revenue of RMB 1.065 billion, up by 60.88% year on year, accounting for 54.65% in the total
operating income, up by 21.20 percentage points compared with the last year. The smart mini projector
business realized the revenue of RMB 518 million, up by nearly 100% year on year with the gross
margin rate improved by 1.80 percentage points, showing improved profitability. Formoive, a controlled
subsidiary of the Company, independently developed the Feng OS operating system to provide users
with innovative and concise large-screen human-machine interaction experience and a variety of
convenient online services; meanwhile, Formoive introduced a strategic investor and raised the share
capital of RMB 200 million by issuing additional shares, which capital will be used to enhance R&D and
market expansion to promote the overall development of the Company.
3. Continuously improve the R&D strength to promote the development of the core device
business
The pandemic in 2020 accelerated the online transformation of consumption all over the world,
hence creating a new development opportunity for cross-border e-commerce business. During the
reporting period, the Company realized rapid growth in the core device business through business
cooperation with cross-border e-commerce operators by providing customized development services of
laser TV light generators and complete equipment to build up our experience for the overseas market;
moreover, with the help of cross-border e-commerce, our products have entered multiple countries and
regions in Europe, North America, and Southeast Asia in our active layout for overseas markets.
Furthermore, during the reporting period, we continued to improve our R&D strength and make
breakthroughs in R&D. We independently developed the core technology for the ALFA screen, built the
world’s first 100-inch flexible Fresnel anti-light screen with a thickness of only 500 um to facilitate
installation and transportation, and solved many pain points in conventional projection screens, such as
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low gain, bright spots, “image sticking”, transportation of hard screens, to greatly improve display
effects and promote the development of the core device business.
4. Enhance the management and control over period expenses to maintain the overall profits
in large venue and business education fields
During the reporting period, we actively and rapidly adjusted our services, improved operation
quality, implemented the scheme of “broadening sources of incomes and reducing expenses”, improved
operating efficiency, and enhanced expense management and control. The sales expense ratio is 6.85%,
down by 0.81 percentage points year on year; the administration expense ratio is 6.97%, down by 0.75
percentage points year on year, and the financial expense ratio is 0.47%, down by 1.02 percentage points
year on year.
We rapidly caught the opportunity of the recovery on the commercial market and actively adjusted
our product portfolio to maintain the overall profitability. With the revenues from business education
and large venue services of RMB 370 million, down by 5.46% year on year, we achieved the gross
profits of RMB 130 million, up by 8.98% year on year, leading to the consolidated gross margin of
34.81%, up by 4.61 percentage points year on year.
(II) Completion of other key tasks during the reporting period
During the reporting period, we achieved favorable results in R&D innovation, operation
management, production operation, and capability building:
1. Insist on making investments in R&D to enhance innovations in product application
Technical innovation is the foundation of an enterprise as well as the industry. Given the adverse
situation in which the cinema business was shut down due to the pandemic, we still insisted on making
investments in R&D - invested RMB 204 million in R&D this year, up by 1.36% year on year. We
continuously upgraded the ALPD technology, stably increased our patents, and released multiple new
products for the household, business education, and large venue portfolio to continuously improve our
sales and market shares.
2. The operation in the form of business units went on well, and the information-based
corporate operation became more healthy
During the reporting period, all the business units operated well with improved independent
decision-making and accelerated market response capabilities. Our business gradually expanded via the
online channel by enhancing online promotion, training, and channel certification; we constantly
released industrial standards and solutions to build our position as a professional expert; and proactively
took opportunities of recovery to show the resilience of our business under the impact of COVID-19.
Meanwhile, we optimized our procedures and systems to intensify informatization efforts. On the basis
of the further upgraded ERP system, we implemented the sales management system CRM, improved the
product life cycle management system PLM, and connected the various information systems to eliminate
information islands, hence laying the ground for reflecting the true operating conditions in our financial
data and management data and improving the operating efficiency of the overall business procedures.
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3. Build the supply chain profit center to reduce costs while improving efficiency, and build
the quality information system
We built an agile and efficient supply chain system in pursuit of high standards, high quality, and
high efficiency. We implemented balanced production scheduling to ensure product delivery; carried out
full lean production to involve every employee in fine improvement; and built a quality information
system to create a platform-based, information-oriented, visualized, and IT-based quality system, so as
to stably improve customer satisfaction and enhance the competitiveness of our supply chain.
II. Risk factors
(I) Risk of not making a profit
□ Applicable√ N/A
(II) Risk of significant decrease in operating performance or loss
□ Applicable√ N/A
(III) Risk related to core competitiveness
√ Applicable□ N/A
Risk of the technology R&D and innovation falling short of expectations
The core of our development is technical innovation. If we fail to effectively judge the direction of
technical innovations, or to make continuous technical innovations, or to make effective R&D
investments due to limited funds, or to successfully commercialize the technologies developed by us, our
core competitiveness in technical innovation may be impaired, and we may encounter technological
risks in future development.
(IV) Operating risk
√ Applicable□ N/A
1. Risk related to the supply of important raw materials
The key components of our products include laser devices, chips and lenses, which are mainly
purchased from some key suppliers of the United States and Japan. If such suppliers significantly change
the prices for such components, or are unable to supply such components in a timely manner with both
quality and quantity guaranteed, or fall into difficulties in operation, or are unable to supply such
components in a normal manner due to trade dispute between the relevant countries or any other reason,
it may have an adverse effect on our production and operation.
2. Risks related to government grants
During the reporting period, we have received certain government grants pursuant to the applicable
policies of the country. Along with the growth of our operating performance, though the effect of
government grants on our current net profit decreases year by year, and our operating results do not rely
on government grants, the decrease in our revenue from government grants may affect our profit.
3. Risk of unsustainability of rapid growth driven by the mode of cooperation
We adopt the business strategy of joint venture and cooperation, which combines the advantages
and resources of all partners. If our technical and product innovations slow down and cannot satisfy the
market demands, or our innovation capability decreases continuously as a result of which our products
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Annual Report 2020
are surpassed by our competitors, such cooperation may bring lower benefits, or become unable to drive
our rapid growth or unable to continue.
4. Risk related to the management of cinema light source
In our light source service, we enter into an agreement with a customer, pursuant to which, we
charge a service fee on the customer based on the duration of use of the light source, while the customer
uses the light source and pays fees therefor, and is responsible for the day-to-day safekeeping and
maintenance of the light source and damages thereto, but we do not collect any deposit or other similar
fees for the light source. The cinemas will use their best endeavors to maintain the light source in good
condition in order to ensure normal projection of films and continuity of their business operation.
However, we still face the risk of impairment of assets due to damage or loss of light source caused by
improper safekeeping on the part of the cinemas.
5. Risk of impairment of inventories
Our inventories mainly comprise raw materials and goods in stock. At the end of the reporting
period, the carrying amount of our inventories was RMB 418.8121 million, accounting for 12.98% of
our assets, where 33.91% of the inventories are finished goods on hand. If any significant change in the
competition pattern of the industry, material innovation in laser display technology and products or the
impact of COVID-19 results in a large quantity of unsalable products, the recoverable amount of the
inventories will be lower than their carrying amount. The impairment of inventories will have a negative
effect on our earnings.
6. Risk of impairment of accounts receivable
Our products are generally delivered after receiving the payment therefor. We give certain credit
period to some major customers. At the end of the reporting period, the carrying amount of our accounts
receivable was RMB 341.6608 million, accounting for 10.59% of our total assets. In case of any material
adverse change in the business condition of our customers, we may be unable to recover certain accounts
receivable, which may have an adverse effect on our operating performance in the future.
7. Management risks from rapid operating scale expansion
The increase of sales revenue and rapid growth of assets and number of employees put forward
challenges for our management level, structure of corporate governance and effective implementation of
internal controls. In the future, if our management fails to effectively overcome the difficulties in
management caused by continuous expansion of the scale of operation, or to effectively implement
internal controls, we may face management risks during rapid business development, such as
out-of-control in management, loss of assets, brain drain, and decrease in operating performance.
8. Risk of IP litigation
IP protection and management includes protection of our proprietary and core technologies, and
prevention of infringement on third-party IP. On the one hand, the process of patent application often
lasts a long time and requires continuous and huge investment. If any proprietary IP in the process of
patent application is infringed by any third party, it may have an adverse effect on our production and
operation. On the other hand, due to the increasingly fierce competition in the industry, many
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Annual Report 2020
manufacturers wish to gain competitive advantages through developing core laser phosphor display
technology. If we fail to effectively prevent infringement on our proprietary IP, or inadvertently infringe
on any IP of others during the development of products, we may face IP litigations or disputes, which
may have an adverse effect on our business development and financial condition.
9. Risk of business development on the overseas market
As the outbreak of Covid-19 has not been effectively put under control in the world, the stagnation
of economic activities abroad will have certain effect on our export, the business development of
Cinionic and GDC on the overseas market, and the efficient operation and marketing of our subsidiaries
in Hong Kong and the United States, as a result of which our business development abroad may fall
short of expectations.
(V) Industrial risk
√ Applicable□ N/A
Risk of increasingly fierce market competition
Laser display is a new and thriving field in the display device industry. A lot of international and
domestic companies have entered the field, further heating up the market competition. If we cannot
maintain our competitive advantages in technology, product, cost, service and other areas, or the
competitors combine their advantages and resources through acquisition and merger, or the top
technology companies in the world increase their investment in the field of laser display, we may face
the risks of decrease in the profitability and market share.
(VI) Risk of macro-environment
√ Applicable□ N/A
By now, the pandemic in China has been alleviated. Given the successful development of the
vaccine, the domestic economic condition will be further stabilized and improved. However, the
prevention and control of the pandemic on the world remain grim, which increased the uncertainty in our
production and operation.
(VII) Risk related to depository receipts
□ Applicable√ N/A
(VIII) Other significant risks
√ Applicable□ N/A
1. Risk of outflow of key technical personnel
The laser display industry is a technology intensive industry. Along with the rapid development of
the laser display industry, the competition for high-end technical personnel has been increasingly fierce.
If we cannot maintain the stability of the existing R&D staff, continuously train technical personnel, and
attract outstanding talents in the world, we may be unable to maintain our technical advantages in the
industry, and the stability and sustainability of our business operation. The outflow of key technical
personnel may cause disclosure of know-how, slow-down of R&D process, weakening of competitive
advantage and other risks, which may have an adverse effect on our ability to operate continuously.
2. Risk of loss on external investments
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Annual Report 2020
We attempt to expand the business operation through merger, acquisition or otherwise according to
the development situation of the industry to improve our overall competitiveness. If the environments or
policies in respect of the industry in which the investee operates undergo any material change, or the
technological level and market expansion of the investee falls short of our expectation, or the operating
performance of the investee decreases sharply due to poor management, the profits on investment in the
investee may fall short of expectation and we may need to recognize an impairment loss on the
long-term equity investment. If we fail to achieve a synergy effect through acquisition of the investee,
our strategic plan may be unable to be implemented as scheduled.
III. Main business activities during the reporting period
During the reporting period, our operating income was RMB 1.949 billion, substantially the same
as that of last year; the net profits attributable to the shareholders of the listed company was RMB 114
million, down by 38.94% year on year; the total assets of the Company at the end of the reporting period
was RMB 3.226 billion, up by 4.09% from the beginning of the reporting period; and the net assets
attributable to shareholders of the listed company was RMB 2.092 billion, up by 5.93% from the
beginning of the reporting period.
(I) Analysis of main business
1. Analysis of changes in statement of income and statement of cash flows lines
In RMB
Item Corresponding
Current period period in prior Changes (%)
year
Operating income 1,948,884,176.83 1,979,148,918.89 -1.53
Operating costs 1,393,075,043.93 1,183,650,635.25 17.69
Selling expenses 133,588,234.60 151,760,111.00 -11.97
Administrative expenses 135,757,276.26 152,626,530.61 -11.05
R&D expenses 204,443,369.10 201,697,766.26 1.36
Financial expenses 9,224,974.20 29,491,223.42 -68.72
Net cash flow from operating 52,390,430.42 243,000,903.71 -78.44
activities
Net cash flows from investment 205,906,256.46 -772,857,910.07 N/A
activities
Net cash flows from financing -99,126,552.86 884,616,830.77 -111.21
activities
2. Analysis of revenue and costs
√ Applicable□ N/A
During the reporting period, our operating income was RMB 1.949 billion, substantially the same
as that of last year. Except for the cinema business, all other business achieved stable growth.
(1). Main business by sector, product and region
In RMB 0’000
Main business by sector
Operating Gross Change in Change in Change in
Sector Operating costs
income margin operating operating gross
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Annual Report 2020
(%) income (%) cost (%) margin (%)
Laser -11.67
display 194,888.42 139,307.50 28.52 -1.53 17.69 percentage
points
Main business by product
Gross Change in Change in Change in
Operating
Product Operating costs margin operating operating gross
income
(%) income (%) cost (%) margin (%)
1. Sales -7.46
174,412.32 128,143.44 26.53 12.27 24.96 percentage
points
(1) Laser -8.56
optical 20,270.75 8,152.95 59.78 -38.44 -21.79 percentage
engine points
(2)
-2.58
Complete
146,519.56 115,178.71 21.39 31.39 35.85 percentage
laser
points
projector
Laser -9.80
cinema 2,969.46 1,536.48 48.26 -51.57 -40.26 percentage
projector points
Laser TV +0.52
54,742.37 39,860.14 27.19 35.97 35.01 percentage
points
Laser
+3.35
business
26,867.45 19,271.26 28.27 -10.85 -14.83 percentage
education
points
projector
Laser large +4.31
venue 10,172.23 4,875.04 52.08 12.50 3.22 percentage
projector points
Smart mini +1.80
projector 51,768.06 49,635.79 4.12 99.54 95.87 percentage
points
(3) Other +4.14
products 7,622.01 4,811.78 36.87 -30.08 -34.38 percentage
points
2. Lease -28.76
service 17,173.26 10,775.31 37.26 -56.85 -20.34 percentage
points
+71.01
3. Other
3,302.83 388.75 88.23 19.17 -83.06 percentage
business
points
-11.67
Total 194,888.42 139,307.50 28.52 -1.53 17.69 percentage
points
Main business by region
Gross Change in Change in Change in
Operating
Region Operating costs margin operating operating gross
income
(%) income (%) cost (%) margin (%)
-10.59
Domestic 185,561.99 135,605.70 26.92 4.23 21.88 percentage
points
-3.95
Overseas 9,326.43 3,701.80 60.31 -53.07 -47.89 percentage
points
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Annual Report 2020
-11.67
Total 194,888.42 139,307.50 28.52 -1.53 17.69 percentage
points
Explanation about main business by sector, product and region
1. Our laser display products have been applied in cinema projection, home entertainment,
education interaction, commercial applications, outdoor exhibition and other fields. Under the impact of
COVID-19, the cinema service business decreased by 56.85% year on year. However, due to the strong
consumer demands on the domestic market and driven by the sales of household To C products, our
operating income in 2020 substantially the same as that of the last year.
2. Our overall gross margin rate was 28.52% in 2020, a decrease of 11.67 percentage points
compared with 2019. The decrease was primarily caused by the change in the product portfolio - To C
products with lower gross margin rates increased greatly in terms of both incomes and proportion;
meanwhile, under the impact of COVID-19, there was no income from the cinema service business
despite the high fixed costs such as depreciation, reducing the gross margin rate by 28.76 percentage
point.
3. Other business mainly covers the patent license fees received in this year.
4. Our business was mostly operated in China, with the incomes from China and outside China
accounting for 95.21% and 4.79%, respectively. For the overseas business, the sales of laser optical
engine products decreased year on year under the impact of COVID-19.
(2). Analysis of output and sales volume
√ Applicable□ N/A
Change in
Main Sales Change in sales Change in
Unit Output Stock
products volume output (%) volume stock (%)
(%)
Optical
engine
and Set 354,890.00 360,152.00 26,861.00 41.16 52.42 -16.38
complete
equipment
Explanation about output and sales volume
We supplied part of laser light source produced under operating leases, which was not included in
the sales volume and stock, and used part of laser TV light generators produced to manufacture laser TV
products, which were not included in the production and sales volume.
(3). Analysis of costs
In RMB 0’000
Costs by sector
Ratio in Ratio in Situa
Change
Amount for total costs Amount for total costs tion
Component in
Sector the current for the the prior for the Desc
s of cost amount
period current period prior riptio
(%)
period (%) period n
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Annual Report 2020
(%)
Laser Operating 139,307.50 100 118,365.06 100 17.69
display costs
Costs by product
Ratio in
Ratio in Situa
total costs Change
Amount for total costs Amount for tion
Produc Component for the in
the current for the the prior Desc
t s of cost prior amount
period current period riptio
period (%)
period (%) n
(%)
1. Direct
114,782.91 89.57 89,655.34 87.43 28.03
Sales materials
Direct labor 3,144.71 2.45 2,673.66 2.61 17.62
Manufacturi
10,215.82 7.98 10,215.69 9.96 0.00
ng expenses
Subtotal 128,143.44 100 102,544.69 100 24.96
2. Depreciatio
Lease n of light 7,484.65 69.46 6,759.98 49.98 10.72
service source
Software
844.05 7.83 2,399.51 17.74 -64.82
license fee
Technical
2,070.54 19.22 3,917.01 28.96 -47.14
service fee
Labor cost 376.07 3.49 449.53 3.32 -16.34
Subtotal 10,775.31 100 13,526.03 100 -20.34
3.
Other
388.75 100 2,294.34 100 -83.06
busines
s
Total 139,307.50 100 118,365.06 100 17.69
Explanation about cost analysis
1. Sales costs mainly comprise direct materials, direct labor and manufacturing expenses, of which,
the costs of direct materials account for 89.57%. Compared with the prior period, the proportion of
manufacturing expenses decreased while the proportion of direct materials increased mainly due to the
change in the product portfolio for the sales business.
2. The lease service business was hit by COVID-19. In 2020, cinema operating hours decreased
compared with the prior year, leading to corresponding decrease in variable cost items such as technical
service fees and software license fees.
(4). Main customers and main suppliers
A. The Company's major customers of the sales
The sales to top 5 customers were RMB 1,088.2434 million, representing 55.84% of the total
annual sales, of which the sales to related parties were RMB 778.7607 million, representing 39.96% of
the total annual sales.
Top 5 customers
√ Applicable□ N/A
In RMB 0’000
No. Customer Sales of total annual sales (%)
1 Customer 1 65,054.20 33.38
2 Customer 2 14,340.69 7.36
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Annual Report 2020
3 Customer 3 11,189.20 5.74
4 Customer 4 9,251.20 4.75
5 Customer 5 8,989.05 4.61
Total / 108,824.34 55.84
Description of the change in the constitution of top 5 customers
Customer 2 and customer 3 were newly counted in the top 5 customers.
B. Information on major suppliers of the Company
The purchases from top 5 suppliers were RMB 653.4916 million, representing 38.97% of the total
annual purchase cost, of which the purchases from related parties were RMB 205.8851 million,
representing 12.28% of the total annual purchase cost.
Top 5 suppliers
√ Applicable□ N/A
In RMB 0’000
Procurement of total annual purchase cost
No. Supplier
cost (%)
1 Supplier 1 20,588.51 12.28
2 Supplier 2 13,943.93 8.31
3 Supplier 3 13,191.79 7.87
4 Supplier 4 12,164.36 7.25
5 Supplier 5 5,460.57 3.26
Total / 65,349.16 38.97
Description of the change in the constitution of top 5 suppliers
Supplier 4 and supplier 5 were newly counted in the top 5 suppliers.
3. Expenses
√ Applicable□ N/A
Unit: In RMB
Item Corresponding period
Current period Change (%)
in prior year
Selling 133,588,234.60 151,760,111.00 -11.97
expenses
Administrative 135,757,276.26 152,626,530.61 -11.05
expenses
R&D expenses 204,443,369.10 201,697,766.26 1.36
Financial 9,224,974.20 29,491,223.42 -68.72
expenses
(1) The total selling expenses were RMB 133.5882 million in 2020, decreased by 11.97% year on
year because the advertising and business promotion expenses, travel expenses, and business
entertainment expenses decreased due to the pandemic, and the after-sale repair expenses provided for
product warranty decreased year on year;
(2) The total administrative expenses were RMB 135.7573 million in 2020, decreased by 11.05%
year on year, in which rent expenses and travel expenses decreased greatly due to the pandemic, the
amortization of land use rights meeting the capitalization criteria was recognized as construction in
progress, the amortization of expenses decreased year on year, and the share-based payment expenses
increased in 2020 because such expenses were recognized from October 2019.
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Annual Report 2020
(3) The total R&D expenses were RMB 204.4434 million in 2020, increased by 1.36% year on year,
primarily due to the increase in the depreciation and amortization of the equipment and software in use
for R&D;
(4) The total financial expenses were RMB 9.2250 million in 2020, decreased by 68.72% year on
year, primarily because the decrease in loans and capital costs led to the reduction in interest expenses
by 39.41% while the interests on deposits increased.
4. Cash flow
√ Applicable□ N/A
Unit: In RMB
Corresponding period
Item Current period Change (%)
in prior year
Net cash flow from operating
52,390,430.42 243,000,903.71 -78.44
activities
Net cash flows from investment
205,906,256.46 -772,857,910.07 N/A
activities
Net cash flows from financing
-99,126,552.86 884,616,830.77 -111.21
activities
Description of reasons for changes in the net cash flows from operating activities: the net cash flow
from operating activities was RMB 52.3904 million, decreased by RMB 190.6105 million compared
with last year. This was primarily due to the reduction in revenues from the cinema service business
under the impact of COVID-19, and the increase in payments for procurement of risk-based stocks.
Description of reasons for changes in the net cash flows from investment activities: the net cash
flow from investing activities was RMB 205.9063 million, increased by RMB 978.7642 million
compared with last year, primarily because the structural deposits purchased became mature and were
recovered in the current period.
Description of reasons for changes in the net cash flow from financing activities: the net cash flow
from financing activities activities was RMB -99.1266 million, decreased by RMB 983.7434 million
compared with last year, primarily due to the proceeds from the IPO of the Company on the STAR
Market in the previous reporting period.
(II) Explanation about material change in profit due to non-main business
□ Applicable√ N/A
(III) Analysis of assets and liabilities
√ Applicable□ N/A
1. Status of assets and liabilities
In RMB
Proport
ion of Proportio
total n of total
Change
assets Balance as at assets as
Balance at the in
Item at the December 31, at Explanation
end of the period amount
end of 2019 Decembe
(%)
the r 31,
period 2019 (%)
(%)
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Annual Report 2020
Proport
ion of Proportio
total n of total
Change
assets Balance as at assets as
Balance at the in
Item at the December 31, at Explanation
end of the period amount
end of 2019 Decembe
(%)
the r 31,
period 2019 (%)
(%)
Held-f Primarily due to
or-tradi the wealth
ng management
114,000,000.00 3.53 540,000,000.00 17.42 -78.89
financi products purchased
al with idle funds
assets
Primarily due to
the impact of the
relocation and
Accou changes in
nts business and tax
341,660,832.43 10.59 176,035,155.24 5.68 94.09
receiva registration of
ble Formoive, which
resulted in the
great increase in
the closing balance
Primarily due to
Receiv
the increase in
ables
11,959,000.00 0.37 1,980,500.00 0.06 503.84 bank's acceptance
financi
bills received
ng
during this period
Primarily due to
the increase in
Prepay advance payments
47,447,601.43 1.47 35,070,999.13 1.13 35.29
ments for goods during
the reporting
period
Primarily due to
the increase in
compensation
Other
receivable in
receiva 12,534,062.15 0.39 9,618,750.08 0.31 30.31
connection with
bles
patent litigations
during the
reporting period
Primarily due to
the increase in the
risk stock and the
Invent increase in the
418,812,140.80 12.98 299,966,170.35 9.68 39.62
ories inventories
prepared for the
growing household
business
Primarily due to
Contra
the implementation
ct 3,744,655.50 0.12 - - N/A
of the new revenue
assets
standard
Other 13,002,195.46 0.40 44,405,513.30 1.43 -70.72 Primarily due to
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Annual Report 2020
Proport
ion of Proportio
total n of total
Change
assets Balance as at assets as
Balance at the in
Item at the December 31, at Explanation
end of the period amount
end of 2019 Decembe
(%)
the r 31,
period 2019 (%)
(%)
current the decrease in the
assets reclassified input
VAT to be
deducted
Long-t Primarily due to
erm the increase in
accoun patent license fees
13,196,087.78 0.41 - - N/A
ts by installment
receiva during the
ble reporting period
Long-t Primarily due to
erm the investment in
equity 262,744,772.48 8.14 139,534,371.94 4.50 88.30 GDC
invest
ment
Primarily due to
the increase in the
Constr
investment for the
uction
construction in
in 51,576,850.72 1.60 20,132,004.07 0.65 156.19
progress of the
progres
headquarters
s
building during the
reporting period
Primarily due to
Long-t
the amortization of
erm
long-term prepaid
prepaid 11,572,346.79 0.36 16,908,070.34 0.55 -31.56
expenses during
expens
the reporting
es
period
Primarily due to
Other the settlement of
non-cu some advanced
6,299,781.06 0.20 11,420,185.94 0.37 -44.84
rrent payments for fixed
assets assets from the
prior period
Primarily due to
the increase in
Notes
settlement by
payabl 116,822,674.67 3.62 37,335,841.79 1.20 212.90
bank's acceptance
e
bills during the
reporting period
Primarily due to
the reclassification
Contra
of receipts in
ct
31,518,312.59 0.98 - - N/A advance to contract
liabiliti
liabilities under the
es
implementation of
the new revenue
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Annual Report 2020
Proport
ion of Proportio
total n of total
Change
assets Balance as at assets as
Balance at the in
Item at the December 31, at Explanation
end of the period amount
end of 2019 Decembe
(%)
the r 31,
period 2019 (%)
(%)
standard
Primarily due to
the decreased
payment of
Taxes
enterprise income
payabl 19,871,846.94 0.62 42,924,647.79 1.38 -53.71
tax for the prior
e
period and the
decline in taxes in
the current period
Primarily due to
the funds borrowed
by the subsidiary
CINEAPPO from a
Other
minority
payabl 59,848,053.83 1.86 14,364,076.43 0.46 316.65
shareholder and the
es
increase in the
share transfer
amount pending
payment
Non-cu Primarily due to
rrent the increase in the
liabiliti long-term
es due 181,417,412.46 5.62 64,968,795.02 2.10 179.24 borrowings due
within within one year
one
year
Primarily due to
the increase in the
output taxes
Other
corresponding to
current
3,045,831.07 0.09 - - N/A contract liabilities
liabiliti
under the
es
implementation of
the new revenue
standard
Primarily due to
the reclassification
Long-t
of long-term
erm
64,845,281.53 2.01 279,615,107.27 9.02 -76.81 borrowings to
borrow
non-current
ings
liabilities due
within one year
Other information
None
48 / 311
Annual Report 2020
2. Encumbrances on assets as of the end of the reporting period
√ Applicable□ N/A
In RMB
Item Amount Reason
Other monetary funds 14,057,949.58 Margins
Bank deposits 40,000,000.00 Term deposits
Land use rights 303,077,499.90 Loan mortgage
3. Other issues
□ Applicable√ N/A
(IV) Analysis of operation information of the industry
□ Applicable√ N/A
(V) Analysis of investments
1. Overall analysis of external equity investments
√ Applicable□ N/A
At the end of the reporting period, the balance of long-term equity investments was RMB
262,744,772.48. During the reporting period, the Company acquired 36% equity interests in GDC
Technology Limited (British Virgin Islands) at about USD 18.11 million. The transaction has been
completed by the end of the reporting period.
(1) Material equity investments
√ Applicable□ N/A
In the 20th session of the First Board of Directors held on December 6, 2019, the Proposal on
Proposed Additional Capital Contribution to the Wholly-owned Subsidiary and Foreign Investments in
GDC was discussed and approved, according to which it was agreed to make additional capital
contribution of USD 18.2 million to the Company’s wholly-owned subsidiary APPOTRONICS HONG
KONG LIMITED for acquisition of 36% shares of GDC Technology Limited (British Virgin Islands).
Please refer to the Announcement No. 2019-029 issued by the Company on www.sse.com.cn and the
designated media for information disclosure on December 7, 2019.
In March 2020, the Company completed the approval and filing procedures for overseas
investments by National Development and Reform Commission and Ministry of Commerce. After
meeting the precedent closing conditions of this acquisition, on April 9, 2020, the Company paid the
total consideration of approximately USD 18.11 million by its own funds. During the reporting period,
the Company holds 36% equity interests in GDC BVI, namely, 93,071,822 ordinary shares of GDC BVI.
According to the Share Transfer Agreement, GDC BVI made the the following performance
covenants: the audited net profit after deduction of non-recurring profit or loss in 2020 shall be no less
than USD 9.35 million; if it fails to achieve the performance objective above, GDC Cayman, the
shareholder of GDC BVI, shall make compensation within 15 working days from the submission date of
GDC BVI’s annual auditor’s report within the limit of USD 5.60 million or 46,535,911 ordinary shares
of GDC BVI.
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According to the 2020 auditor’s report of GDC BVI issued by Deloitte, GDC BVI achieved the net
profit of USD 926,800 in 2020, and failed to achieve the performance covenant for the year 2020, hence
triggering the performance compensation provisions.
By now, we have officially required GDC Cayman to make performance compensation in
accordance with the provisions. As of the disclosure date of this report, we have reached no consensus
with GDC Cayman on this matter.
(2) Material non-equity investments
□ Applicable√ N/A
(3) Financial assets at fair value
√ Applicable□ N/A
As of December 31, 2020, the balance of held-for-trading financial assets was RMB
114,000,000.00, which was structured deposits.
The balance of investment in other equity instruments was RMB 11,975,419.38, which was
investment in two investee companies with zero change in the fair value during the reporting period.
(VI) Sales of significant assets and equity interests
□ Applicable√ N/A
(VII) Analysis of significant controlled and investee companies
√ Applicable□ N/A
In RMB 0’000
Registered Shareholding Total Net Operating Net
Company Main business
capital percentage assets assets income profit
Provision of
cinema laser light
CINEAPPO source lease 10,000.00 63.20% 93,130.04 37,858.00 28,869.92 335.81
service and sales
of projectors
R&D and sale of
Formoive household display 5,000.00 55% 61,940.36 -7,804.64 100,677.01 -4,974.48
products
Appotronics R&D and sale of
16,357.75 100% 37,604.45 32,377.48 7,925.27 -2,550.72
HK laser light source
The operating income and net profit of CINEAPPO decreased by 51.32% and 97.68% year on year,
respectively, primarily because under the impact of COVID-19, there was no income from the cinema
service business despite the high fixed costs such as depreciation.
The operating income of Formoive increased by 43.71% year on year, primarily due to the high
demands on the household market and the rapid growth in the sales of To C products.
The operating income and net profit of Appotronics HK decreased by 58.16% and 178.09% year on
year, respectively, primarily because the overseas sales of laser light source products decreased under
the impact of COVID-19.
(VIII) Structured entities under control of the Company
□ Applicable√ N/A
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Annual Report 2020
IV. Discussion and analysis of future development of the Company
(I) Structure and trend of the industry
√ Applicable□ N/A
(1) Main market spaces
1. A promising prospect for the household market
In the household field, the application scenarios for home drawing room are of great value, and
have remarkable advantages in large-screen content and human-machine interaction. At present, there
are more and more ultra high definition TV programs; some films have their premiere on line; some
online TV plays and entertainment programs are exclusively broadcast on streaming media, and there’s
rich content available. According to AVC, the sales volume of laser TV will exceed 1 million sets on the
Chinese market, so the outlook for the market is promising.
Smart projector is becoming a new information access terminal. Through this “entertainment
center”, users can search all kinds of network resources, hold remote meetings, watch online videos and
carry out other operations. At present, young consumers are the main users of smart projectors. The
market is still at the blue sea growth period and has great potentials.
2. Further expansion space for the cinema industry
We will continue to promote the penetration of laser projection to further improve the market
shares of laser projection. With respect to the overseas market, considering the 130,000 existing markets,
we will promote the new mode of Cinema as a Service (CaaS) through CINIONIC to provide customers
with a comprehensive digital projection solution, hence effectively reducing the pressure on cash flows
caused by the pandemic and improving the profitability of cinemas. This helps to achieve rapid
development after the pandemic. Furthermore, besides the growth space on the urban cinema market, the
digital cinema projector C5 we released is also suitable for non-urban cinemas, such as new application
scenarios including household cinemas and community cinemas.
(2) Development trend of the industry
The laser display industry is developing along the trend of using laser, being smart, being
content-oriented, and being solution-based:
1. As an emerging technology, laser display technology is upgrading and substituting the traditional
projection industry on cinema, large venue, education, business and other markets. Laser light source has
become increasingly popular. All projector manufacturers have entered the era of laser.
2. The smart products have become more and more practical, and now can provide rapid data
transmission; the Internet of Things realized via wireless connection and smart hi-fi system provide
perfect audio & video experience. In addition, such products are embedded with app stores. The smart
products also provide video conference systems, online education and other functions, so they have
gradually become popular consumer electronic products.
3. The software and hardware integration and cross boundary have become the trend. Simple
product functions cannot satisfy the demands of consumers, and must provide content support. A
channel from the content side to the technology side will provide core competitiveness for a company.
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4. The industrial solutions have been well accepted. As experience economy has become popular in
the world, the outlook for the high-quality image solutions is promising.
(II) Development strategy of the Company
√ Applicable□ N/A
For the future, Appotronics is committed to becoming a promoter of the display industry, and under
our mission of “New light, New life”, with our persistence on the orientation of customer demands and
persistence on dual-drivers of “technology + market”, we will make use of disruptive technical
innovations to create new consumption demands and a new growth curve, hence creating value for users
and promoting in-depth industrialization of laser display technologies.
We will intensify efforts on the household market and the layout of the overseas business with a
focus on providing users with products and services capable of creating long-term value, and based on
the innovation of core technologies and IP operation, build an open operating platform for the
development of the core device business to scale up and strengthen the ecology of the laser display
industry.
(III) Business plan
√ Applicable□ N/A
With the adjustment and preparation made in 2020, the year 2021 is a key year for the Company to
achieve leapfrog development in the next three years. As a result, an essential task of the Company for
2021 is to take the opportunity of the economy recovery of the world and work along the development
trend of the industry, hence achieving rapid growth in all businesses.
We will focus on the following aspects:
1. Continue to increase the R&D investments in core devices to enhance our leading advantages in
technology, to establish leading advantages in products centering on customers, and to create a new
product field to become a leading supplier of core devices in the laser display industry; insist on patent
layout and IP operation to further explore and realize the value of patents, hence establishing and
gradually improving the ecology of the laser display industry.
2. Intensify efforts on the household market by developing and releasing new products, accelerating
product upgrade and iteration, and improving product and service experience; take the opportunity on
the emerging market to create a new product field, and release new product models, including laser TVs,
smart mini projectors, and anti-ambient light screens, in consideration of layered consumption to cover
more consumers.
3. Improve and enhance our competitive advantages in the field of cinema services, intensify
cooperation with partners, make full use of the synergy effects between domestic and foreign cinema
markets and the technology team to release more cost-effective cinema light source products while
actively exploring community cinema and household cinema markets to accelerate the trend of laser
projection.
4. Steadily promote the layout of the overseas business. By now, our products have penetrated into
many countries and regions in Europe, North America, and Southeast Asia. We plan to further enhance
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Annual Report 2020
the efforts of channel building and marketing for overseas markets to take the opportunity of rapid
development on overseas markets.
5. Continue to build an agile and efficient supply chain system in response to the risks of tension
supply of upstream raw materials, hence guaranteeing product delivery and optimizing the stock
structure.
(IV) Other information
□ Applicable√ N/A
V. Information not disclosed according to the standard due to inapplicability of the standard,
involving State secrets or trade secrets or other reasons, and explanation about the relevant
reasons
□ Applicable√ N/A
Section V Significant Matters
I. Proposals for profit distribution on ordinary shares and capitalization of the capital reserve
(I) Establishment, implementation or adjustment of the cash dividend policy
√ Applicable□ N/A
1. Cash dividend policy
Pursuant to our Articles of Association and the Statement of Appotronics Corporation Limited
Regarding the Initial Public Offering of RMB-denominated Ordinary Shares (A-shares) and the Plan for
Distribution of Dividends to Shareholders within Three Years Following the Listing on the STAR
Market, we will focus on long-term and sustainable development, and establish a clear profit distribution
policy taking into consideration our strategic development plan, actual business situation, development
objectives, future profitability, status of cash flows, shareholder return, cost of social capital, external
financing environment and other relevant factors, and the balance between the reasonable returns on
investment for shareholders and our sustainable development, to ensure the consistency and stability of
the profit distribution policy and ensure that we are able to operate continuously and healthily in the long
run.
Subject to the satisfaction of the conditions for distributing cash dividends, we will distribute not
less than 10% of the distributable profit made in each year in cash.
The Board of Directors will adopt the following differential cash dividend policy according to the
procedures set forth in our Articles of Association, giving comprehensive consideration to the
characteristics of the industry in which we operate, our development stage, business model and earnings,
material capital expenditure arrangements and other relevant factors:
(1) If the Company is at the mature stage and does not have any material capital expenditure
arrangement, at least 80% of the distributable profit will be distributed in cash;
(2) If the Company is at the mature stage and has certain material capital expenditure arrangements,
at least 40% of the distributable profit will be distributed in cash;
(3) If we are at the growth stage and have certain material capital expenditure arrangements, at least
20% of the distributable profit will be distributed in cash.
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If it is hard to determine the development stage but there are certain material capital expenditure
arrangements, the policy set forth above may apply.
We will formulate or adjust the shareholder returns plan subject to the profit distribution policy set
forth above, according to our actual situations and the opinions of the shareholders (in particular, the
minority shareholders) and the independent directors.
2. Preliminary plan on profit distribution for 2020
According to our consolidated financial statements 2019 as audited by Pan-China Certified Public
Accountants (Special General Partnership), Appotronics Corporation Limited (hereinafter referred to as
the “Company”) realized the net profit of RMB 86,657,198.57 in the consolidated financial statements
for 2020, including the net profit attributable to the shareholders of the listed company of RMB
113,847,873.06, and the distributable profit of the parent company is RMB 289,684,566.58.
In accordance with the provision of the Notice of China Securities Regulatory Commission on
Further Implementing Cash Dividend Distribution by Listed Companies, the Guidelines of Shanghai
Stock Exchange on Cash Dividend Distribution by Listed Companies, Regulatory Guidelines for Listed
Companies No. 3 - Cash Dividend Distribution by Listed Companies, and the Articles of Association, in
consideration of the current overall operation and development stage, the Company proposes to
distribute the cash dividend of RMB 0.55 (tax inclusive) per 10 shares to all shareholder. As of
December 31, 2020, the Company has a total of 452,756,901 shares, leading to the total cash dividend of
RMB 24,901,629.56 (tax inclusive). The cash dividends proposed by the Company for this year account
for 21.87% of the net profits attributable to the shareholders of the listed company in the current
consolidated financial statements of the Company. No capitalization of the capital reserve or bonus
shares will be made or distributed in the profit distribution.
If, prior to the record date of interest distribution, changes are caused to the total shares of the
Company due to conversion of convertible bonds/repurchase of shares/granting of share incentives/share
repurchase and cancellation/share repurchase and cancellation for material assets restructuring, the
Company intends to maintain the total distribution amount unchanged, and correspondingly adjust the
distribution ratio per share. In the event of changes in the total shares, an announcement will be
separately released to disclose the specific adjustment.
Reasons for distribution of cash dividends lower than 30% of the distributable profit: Being in the
growth stage, the Company needs a large amount of funds. We plan to use the retained profit to satisfy
the working capital requirements in our R&D and marketing activities and day-to-day management, and
support the implementation of our medium-to-long term development strategy and continuous and
healthy development.
The profit distribution proposal for the year of 2020 has been approved at the 31st meeting of the
first Board of Directors and the 18th meeting of the first Board of Supervisors of the Company. The
independent directors of the Company have reviewed the preliminary plan on profit distribution,
expressed their independent opinions on and given explicit consent to the proposal. The preliminary plan
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Annual Report 2020
for profit distribution is still subject to approval at the annual general meeting of shareholders of the
Company.
3. Implementation of the policy on cash dividend distribution
During the reporting period, we have strictly complied with the dividend principles and policies.
Our dividend distribution criteria and ratio are clear, and the relevant decision-making procedures and
mechanism comply with the applicable regulations. Our independent directors have duly performed their
duties in the review of the preliminary plan on profit distribution by the Board of Directors, to ensure
that the legitimate rights and interests of the minority shareholders are fully protected.
(II) Proposals for profit distribution on ordinary shares and capitalization of the capital reserve in
the past three years (including the reporting period)
In RMB
Proportion of
the net profit
Net profit
attributable
attributable to
to the
the
Cash shareholders
Number Number shareholders of
dividends of ordinary
of bonus of shares ordinary shares
distributed Amount of shares of the
Distribution shares distributed of the listed
per 10 cash dividends listed
year distributed out of the company
shares (Tax inclusive) company
per 10 capital reported in the
(inclusive reported in
shares reserve consolidated
of tax) the
financial
consolidated
statements for
financial
the year
statements
(%)
2020 0 0.55 0 24,901,629.56 113,847,873.06 21.87
2019 0 0.75 0 33,866,580.83 186,457,276.71 18.16
2018 0 0 0 0 176,971,092.49 0
(III) Repurchase of shares by cash included in cash dividends
□ Applicable√ N/A
(IV) If the Company made a profit in the reporting period and there’s profit distributable by the
parent company to the shareholders of its ordinary shares, but the Company does not propose
to distribute profits on ordinary shares in cash, the Company shall explain the reason in detail
and use of the undistributed profit.
□ Applicable√ N/A
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Annual Report 2020
II. Fulfillment of covenants
(I) Covenants made by the actual controller, shareholders, affiliates and acquirer of the Company, the Company itself and other related parties during
the reporting period or the outstanding covenants made by them in the prior periods
√ Applicable□ N/A
Whether Whether
there’s a the Reason for Action plan
Validity time limit covenant failure to fulfill if failing to
Covenant Covenant
Background of covenant Covenantor period of for the has been the covenant on fulfill the
Type Content
covenant fulfillment strictly time (if covenant on
of the fulfilled applicable) time
covenant on time
Covenant by the
controlling
shareholder
regarding restriction 36 months
on the sale of shares after
Restriction held by him, completion of
Refer to IPO
Covenant relating to IPO on the sale voluntary lock-up of the IPO and Yes Yes N/A N/A
Prospectus
of shares such shares, the extended
extension of lock-up period stated
period, intention to below
hold and dispose of
shares and other
issues
Covenant by the 36 months
actual controller after
regarding restriction completion of
on the sale of shares the IPO and
Restriction
held by him, Refer to IPO the extended
Covenant relating to IPO on the sale Yes Yes N/A N/A
voluntary lock-up of Prospectus period stated
of shares
such shares, below, and 6
extension of lock-up months after
period, intention to termination of
hold and dispose of employment
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Annual Report 2020
shares and other with the
issues Company
Covenant by the
concert parties of the
actual controller
regarding restriction 36 months
on the sale of shares after
Restriction held by them, completion of
Refer to IPO
Covenant relating to IPO on the sale voluntary lock-up of the IPO and Yes Yes N/A N/A
Prospectus
of shares such shares, the extended
extension of lock-up period stated
period, intention to below
hold and dispose of
shares and other
issues
Covenant by the
directors regarding
restriction on the sale 12 months
of shares held by after
Restriction them, voluntary completion of
Refer to IPO
Covenant relating to IPO on the sale lock-up of such the IPO and Yes Yes N/A N/A
Prospectus
of shares shares, extension of the extended
lock-up period, period stated
intention to hold and below
dispose of shares and
other issues
Covenant by the
supervisors regarding
restriction on the sale
12 months
Restriction of shares held by
Refer to IPO after
Covenant relating to IPO on the sale them, voluntary Yes Yes N/A N/A
Prospectus completion of
of shares lock-up of such
the IPO
shares, extension of
lock-up period,
intention to hold and
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Annual Report 2020
dispose of shares and
other issues
Covenant by HU Fei,
as a senior officer 12 months
and member of key after
technical staff, completion of
regarding restriction the IPO and
on the sale of shares the extended
Restriction
held by him, Refer to IPO period stated
Covenant relating to IPO on the sale Yes Yes N/A N/A
voluntary lock-up of Prospectus below, and 6
of shares
such shares, months after
extension of lock-up termination of
period, intention to employment
hold and dispose of with the
shares and other Company
issues
Covenant by the
senior officers BO
Lianming, WU Bin,
LI Lu, ZHAO Ruijin
and XIAO Yangjian 12 months
regarding restriction after
Restriction on the sale of shares completion of
Refer to IPO
Covenant relating to IPO on the sale held by them, the IPO and Yes Yes N/A N/A
Prospectus
of shares voluntary lock-up of the extended
such shares, period stated
extension of lock-up below
period, intention to
hold and dispose of
shares and other
issues
Covenant by the key 12 months
Restriction
technical staff YU Refer to IPO after
Covenant relating to IPO on the sale Yes Yes N/A N/A
Xin, WU Xiliang, Prospectus completion of
of shares
WANG Lin and the IPO and
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Annual Report 2020
GUO Zuqiang listing of
regarding restriction stock and the
on the sale of shares extended
held by them, period stated
voluntary lock-up of below
such shares,
extension of lock-up
period, intention to
hold and dispose of
shares and other
issues
Covenant by the
holders of more than
5% shares regarding
restriction on the sale 12 months
of shares held by after
Restriction
them, voluntary Refer to IPO completion of
Covenant relating to IPO on the sale Yes Yes N/A N/A
lock-up of such Prospectus the IPO and
of shares
shares, extension of listing of
lock-up period, stock
intention to hold and
dispose of shares and
other issues
Covenant by the
other shareholders
regarding restriction
on the sale of shares 12 months
held by them, after
Restriction
voluntary lock-up of Refer to IPO completion of
Covenant relating to IPO on the sale Yes Yes N/A N/A
such shares, Prospectus the IPO and
of shares
extension of lock-up listing of
period, intention to stock
hold and dispose of
shares and other
issues
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Annual Report 2020
Covenant by senior
officers and core
employees
participating in
strategic allotment
At least 12
regarding restriction
months after
Restriction on the sale of shares
Refer to IPO completion of
Covenant relating to IPO on the sale held by him, Yes Yes N/A N/A
Prospectus the IPO and
of shares voluntary lock-up of
listing of
such shares,
stock
extension of lock-up
period, intention to
hold and dispose of
shares and other
issues
Issuer’s plan for
stabilizing the 36 months
Company’s stock after
price and covenant Refer to IPO completion of
Covenant relating to IPO Others Yes Yes N/A N/A
regarding share Prospectus the IPO and
repurchase measures listing of
within three years stock
after the listing
Controlling
shareholder and the
actual controller’s 36 months
plan for stabilizing after
the Company’s stock Refer to IPO completion of
Covenant relating to IPO Others Yes Yes N/A N/A
price and covenant Prospectus the IPO and
regarding share listing of
repurchase measures stock
within three years
after the listing
Directors and senior Refer to IPO 36 months
Covenant relating to IPO Others Yes Yes N/A N/A
officers’ plan for Prospectus after
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Annual Report 2020
stabilizing the completion of
Company’s stock the IPO and
price and covenant listing of
regarding share stock
repurchase measures
within three years
after the listing
Issuer’s covenant
Refer to IPO
Covenant relating to IPO Others regarding measures Permanent No Yes N/A N/A
Prospectus
against fraud in IPO
Controlling
shareholder, actual
controller and their
Refer to IPO
Covenant relating to IPO Others concert parties’ Permanent No Yes N/A N/A
Prospectus
covenant regarding
measures against
fraud in IPO
Directors,
supervisors and
senior officers’ Refer to IPO
Covenant relating to IPO Others Permanent No Yes N/A N/A
covenant regarding Prospectus
measures against
fraud in IPO
Issuer’s covenant
regarding remedial
Refer to IPO
Covenant relating to IPO Others measures for diluted Permanent No Yes N/A N/A
Prospectus
earnings in the
current period
Controlling
shareholder, actual
controller and their
Refer to IPO
Covenant relating to IPO Others concert parties’ Permanent No Yes N/A N/A
Prospectus
covenant regarding
remedial measures
for diluted earnings
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Annual Report 2020
in the current period
Directors,
supervisors and
senior officers’
Refer to IPO Term of
Covenant relating to IPO Others covenant regarding No Yes N/A N/A
Prospectus office
remedial measures
for diluted earnings
in the current period
Issuer’s covenant
Refer to IPO
Covenant relating to IPO Others regarding profit Permanent No Yes N/A N/A
Prospectus
distribution policy
Issuer’s covenant
regarding restraint
measures and
Refer to IPO
Covenant relating to IPO Others liability for Permanent No Yes N/A N/A
Prospectus
compensation in the
event of failure to
fulfill its covenants
Controlling
shareholder, actual
controller and their
concert parties’
covenant regarding Refer to IPO
Covenant relating to IPO Others Permanent No Yes N/A N/A
restraint measures Prospectus
and liability for
compensation in the
event of failure to
fulfill their covenants
Directors,
supervisors and
senior officers’
Refer to IPO Term of
Covenant relating to IPO Others covenant regarding No Yes N/A N/A
Prospectus office
restraint measures
and liability for
compensation in the
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Annual Report 2020
event of failure to
fulfill their covenants
Controlling
shareholder’s
covenant on avoiding
Resolve
horizontal
horizontal Refer to IPO
Covenant relating to IPO competition and Permanent No Yes N/A N/A
competition Prospectus
regulating and
issues
reducing
related-party
transactions
Actual controller’s
covenant on avoiding
Resolve horizontal
related-party competition and Refer to IPO
Covenant relating to IPO Permanent No Yes N/A N/A
transaction regulating and Prospectus
issues reducing
related-party
transactions
Covenant by the Refer to the 2019
grantee of share Restricted Share
Others incentives regarding Incentive Plan Permanent No Yes N/A N/A
information (Draft) of the
Covenant related to share disclosure documents Company
incentives Refer to the 2019
Company’s covenant
Restricted Share
on refraining from
Others Incentive Plan Permanent No Yes N/A N/A
providing financial
(Draft) of the
assistance
Company
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Annual Report 2020
(II) If the Company has made any profit forecast on its assets or project and the reporting
period falls within the period of such profit forecast, explanation about whether the goal has
been achieved and the relevant reasons
□ Reached√ Not reached□ N/A
According to the Share Transfer Agreement, GDC made the the following performance covenants:
The net profit after deduction of non-recurring profit or loss shall be no less than USD 9.35 million in
2020. According to the 2020 auditor’s report of GDC issued by Deloitte, GDC achieved the net profit of
USD 0.9268 million in 2020, and failed to achieve the performance covenant for the year 2020.
(III) Fulfillment of performance covenant and the relevant effect on goodwill impairment test
√ Applicable□ N/A
According to the 2020 auditor’s report of GDC issued by Deloitte, GDC achieved the net profit of
USD 0.9268 million in 2020, and failed to achieve the performance covenant for the year 2020.
The Company holds 36% equity interests in GDC, which were recognized as long-term equity
investments. At the beginning of 2021, the Company made impairment test on the long-term equity
investment in the GDC asset group. According to the Assets Evaluation Report issued by Shenzhen
Pengxin Assets Land and Real Estate Appraisal Co., Ltd. (Peng Xin Zi Ping Bao [2021] No. S064), the
evaluation of the 36% equity interests held by the Company in GDC was USD 21.06 million. Therefore,
the Company made no provision for impairment with respect to the long-term equity investment in the
GDC asset group.
III. Occupation of funds during the reporting period and return of such funds
□ Applicable√ N/A
IV. Explanation about the “Modified Audit Opinion” issued by the accounting firm
□ Applicable√ N/A
V. Explanation about the reasons and effect of changes in accounting policies and accounting
estimates and correction of material accounting errors
(I) Analysis of the reasons of changes in accounting policies and accounting estimates and the
relevant effect
√ Applicable□ N/A
Refer to “Section XI. Financial Report - V. Significant accounting policies and accounting
estimates - 44 Changes in significant accounting policies and accounting estimates”.
(II) Explanation about the reasons and effect of correction of material accounting errors
□ Applicable√ N/A
(III) Communication with the former accounting firm
□ Applicable√ N/A
(IV) Other information
□ Applicable√ N/A
64 / 311
Annual Report 2020
VI. Appointment and termination of appointment of accounting firm
In RMB
Current accounting firm
Name of domestic accounting firm Pan-China Certified Public Accountants (Special
General Partnership)
Fee payable to domestic accounting firm 950,000
Audit period of domestic accounting firm 5 years
Name Fee
Sponsor Huatai United Securities Co., /
Ltd.
Explanation about the appointment and termination of appointment of accounting firm
√ Applicable□ N/A
The annual general meeting of shareholders of the Company for the year of 2019 approved the
resolution to continue to appoint Pan-China Certified Public Accountants (Special General Partnership)
as the auditor of the Company for the year of 2020 for a term of one year. Pan-China Certified Public
Accountants (Special General Partnership) has issued auditor’s reports for the Company between 2016
to 2019.
Explanation about re-appointment of accounting firm during the audit period
□ Applicable√ N/A
VII. Risk of delisting and the reason
□ Applicable√ N/A
VIII. Matters relating to bankruptcy and reorganization
□ Applicable√ N/A
65 / 311
Annual Report 2020
IX. Material litigations and arbitrations
√ The Company was involved in material litigations or arbitration during the current year
□ The Company was not involved in material litigations or arbitration during the current year
(I) Litigations and arbitrations already disclosed in interim announcements about which no new information is available
√ Applicable□ N/A
Summary and type of case Reference
I. Cases of dispute over infringement on patents for invention [2019] Yue 03 Min Chu No.
2942-2951
In July 2019, the Company initiated a civil litigation on the ground that Delta Electronics, Inc Refer to the Announcement on Litigation disclosed on July 31,
infringed the patent for invention ZL200810065225.X and ZL200880107739.5 owned by the 2019 (No. 2019-006).
Company, requesting the court to order to stop the acts of infringing the Company’s patent right
and the damages for infringement in the amount of RMB 56.00 million.
II. Case for changing the inventor of patent 19-cv-00466-RGD-LRL in the United States District
Court for the Eastern District of Virginia
The Company brings a suit against Delta in the United States District Court for the Eastern
District of Virginia for breach of non-disclosure agreement, wrongful appropriation of the Refer to the Announcement on Litigation disclosed on
technical solutions actually invented by the Company’s employees LI Yi and HU Fei, and filing September 9, 2019 (No. 2019-012).
for patent application in the United States without authorization, and petitions the court to order
that the inventors of the patent-in-suit US 9,024,241 shall be changed from WANG Bo, ZHANG
Kesu and HUA Jianhao into LI Yi and HU Fei.
III. Cases of dispute over infringement on patents for invention [2019] Jing 73 Min Chu No.
1275, 1276, and 1278
In September 2019, Delta Electronics, Inc. initiated a civil litigation on the ground that the Refer to the Announcement on Litigation disclosed on
Company and its controlled subsidiary Formoive infringed the patent for invention September 21, 2019 (No. 2019-014), and the Announcement
ZL201410249663.7, ZL201610387831.8, and ZL201010624724.5, requesting the court to order on Litigation disclosed on June 13, 2020 (No. 2020-022).
to stop the acts of infringing the patent rights and the damages for infringement in the amount of
RMB 48.03 million.
IV. Case of dispute over title to patents [2019] Yue 03 Min Chu No. 4309
In November 2019, the Company initiated a civil litigation, alleging that the Delta Electronics,
Inc. filed a patent application in respect of the technical solution owned by the Plaintiff and
Refer to the Announcement on Litigation disclosed on
named WANG Bo, ZHANG Kesu and HUA Jianhao as the inventors of such technical solution
November 8, 2019 (No. 2019-028).
without authorization, thereby infringed on the technical achievements made by the Plaintiff and
the right of authorship of LI Yi and HU Fei, the actual inventors, and petitions the court to
declare that the patent ZL201610387831.8 “phosphor color wheel and its applicable light source
66 / 311
Annual Report 2020
system” is owned by the Company.
V. (2020) Yue 73 Min Chu No. 1335-1341, 1353, 1355-1361
In July 2019, the Company initiated a civil litigation on the ground that Delta Electronics, Inc Refer to the Announcement on Litigation Against Delta
infringed the patent for invention ZL200880107739.5 and ZL200810065225.X owned by the Electronics (Shanghai) Co., Ltd. and Other Entities disclosed
Company, requesting the court to order to stop the acts of infringing the Company’s patent right on August 11, 2020 (No. 2020-037).
and the damages for infringement in the amount of RMB 80.00 million.
(II) Litigations and arbitrations that have not been disclosed in interim announcements or about which there’s new information available
√ Applicable□ N/A
In RMB 0’000
During the reporting period:
Whethe
r any
provisio Enforcement
Type of
Plaintiff/cla Defendant/res Party jointly and Amount n is Result and of
litigation/arbi Background Status
imant pondent severally liable claimed recogni effect judgment/aw
tration
zed and ard
the
amount
[2019] Yue 73 Zhi Min
Chu No. 662, the
Plaintiff alleges that it
is the owner of the
RMB 10.00
patent for invention
Delta Appotronics Futian SPN Projector Infringement million
ZL201610387831.8
Electronics, Corporation & Video System on patent for 1,614.53 No released Stayed
and the Defendant
Inc. Limited Firm of Shenzhen invention and trial
infringed such patent
suspended
for invention of the
Plaintiff and caused
economic losses to the
Plaintiff.
[2019] Yue 73 Zhi Min Trial of the Judgment
Delta Appotronics Futian SPN Projector Infringement
Chu No. 663, the first of first
Electronics, Corporation & Video System on patent for 1,614.53 No
Plaintiff alleges that it instance instance:
Inc. Limited Firm of Shenzhen invention
is the owner of the completed All claims
67 / 311
Annual Report 2020
patent for invention made by
ZL201310017478.0 the
and the Defendant Plaintiff
infringed such patent were
for invention of the dismissed.
Plaintiff and caused
economic losses to the
Plaintiff.
[2019] Yue 73 Zhi Min
Chu No. 664, the
Judgment
Plaintiff alleges that it
of first
is the owner of the
instance:
patent for invention Trial of the
Delta Appotronics Futian SPN Projector Infringement All claims
ZL20310625063.1 and first
Electronics, Corporation & Video System on patent for 1,614.53 No made by
the Defendant instance
Inc. Limited Firm of Shenzhen invention the
infringed such patent completed
Plaintiff
for invention of the
were
Plaintiff and caused
dismissed.
economic losses to the
Plaintiff.
[2019] Jing 73 Min
Chu No. 1277, the
Plaintiff alleges that it Ruling of
is the owner of the the first
Formoive patent for invention Trial of the instance
Delta Infringement
(Beijing) Appotronics ZL201310017478.0 first The case
Electronics, on patent for 1,601.00 No
Technology Corporation Limited and the Defendant instance of the
Inc. invention
Co., Ltd. infringed such patent completed Plaintiff
for invention of the was
Plaintiff and caused rejected.
economic losses to the
Plaintiff.
Chengdu Chengdu Infringement [2020] Chuan 01 Zhi The
Formoive (Beijing)
Jimi Jingying on patent for Min Chu No. 252, the 5,000.00 No Settled Plaintiff
Technology Co., Ltd.
Technology Times invention Plaintiff alleges that the withdraw
68 / 311
Annual Report 2020
Co., Ltd. Communicatio Defendant infringed its case,
n Device Co., such patent for and the
Ltd. invention of the court has
Plaintiff and caused issued a
economic losses to the civil
Plaintiff. ruling
[2020] Chuan 01 Min The
Chu No. 4391 unfair Plaintiff
competition case, the withdraw
Chengdu
Appotronics Plaintiff alleged that its case,
Jimi Formoive (Beijing) Unfair
Corporation the Defendant 1,000.00 No Settled and the
Technology Technology Co., Ltd. competition
Limited conducted unfair court has
Co., Ltd.
competition and caused issued a
economic losses to the civil
Plaintiff. ruling
[2020] Zhe 01 Zhi Min
Chu No. 540, the
The
Plaintiff alleges that it
Plaintiff
is the owner of the
Haining Shenzhen withdraw
Appotronics patent for invention The
Ningjia Appotronics Infringement its case,
Corporation Limited; ZL200710037859X Plaintiff
Electronics Xiaoming on patent for 205.00 No and the
Zhejiang Tmall and the Defendant withdraw
Technology Technology invention court has
Network Co., Ltd. infringed such patent its case
Co., Ltd. Co., Ltd. issued a
for invention of the
civil
Plaintiff and caused
ruling
economic losses to the
Plaintiff.
In the cases of dispute The
over infringement on Plaintiff
AV Design (Beijing) patents for invention withdraw
Casio Appotronics Infringement
Technology [2016] Jing 73 Min its case,
Computer Corporation on patent for 2,049.95 No Settled
Development Co., Chu No. 59-60, the and the
Co., Ltd. Limited invention
Ltd. Plaintiff alleges that it court has
is the owner of the issued a
patents for invention civil
69 / 311
Annual Report 2020
201210334155.X and ruling
201010293730.7, and
the production, sale
and offer for sale of
Laser TV APUS-20(S)
by Defendant 1 and
Defendant 2 for
purpose of production
and operation has
infringed on such
patents for invention of
the Plaintiff and caused
economic losses to the
Plaintiff.
Judgment
In the cases of dispute of second
over infringement on instance:
patents for invention The
In March
[2018] Yue 03 Min Defendant
2021, the
Chu No. 1899-1907, should
Company
the Plaintiff alleges that stop its act
received the
the production, sale of
compensatio
Appotronic Dehao and offer for sale of a Trial of the infringem
Shenzhen Super Infringement n and
s Electronic variety of projector second ent and
Network Technology on patent for 2,081.52 No reasonable
Corporatio Technology products by Defendant instance pay the
Co., Ltd. invention expenditures
n Limited Ltd. 1 and Defendant 2 for completed Plaintiff
paid by the
purpose of production for the
Defendant in
and operation has economic
the amount
infringed on the losses and
of RMB
Plaintiff’s patent for reasonable
3,577,279.61.
invention and caused expenses,
economic losses to the RMB
Plaintiff. 3,577,279.
61 in total.
Appotronic Dehao Shenzhen Super Infringement In the cases of dispute 2,081.52 No Trial of the The
70 / 311
Annual Report 2020
s Electronic Network Technology on patent for over infringement on second Plaintiff
Corporatio Technology Co., Ltd. invention patents for invention instance withdraw
n Limited, Ltd. [2018] Yue 03 Min completed its case,
and Chu No. 1891-1898 and the
Shenzhen and 1940, the Plaintiff court has
YLX alleges that the issued a
Technology production, sale and civil
Developme offer for sale of a ruling
nt Co., Ltd. variety of projector
products by Defendant
1 and Defendant 2 for
purpose of production
and operation has
infringed on the
Plaintiff’s patent for
invention and caused
economic losses to the
Plaintiff.
[2018] Jing 73 Min
Chu No. 1239 and
1240, the Plaintiff The
alleges that it is the Plaintiff
owner of the patent for withdraw
Appotronic Casio (China) Co.,
Casio Infringement invention its case,
s Ltd. and Beijing
Computer Co., on patent for ZL200810065225.X 760.00 No Settled and the
Corporatio Hongyang Jiye
Ltd. invention and the Defendant court has
n Limited Technology Co., Ltd.
infringed such patent issued a
for invention of the civil
Plaintiff and caused ruling
economic losses to the
Plaintiff.
Formoive Chengdu (2020) Jin 03 Zhi Min The
Infringement
(Beijing) XGIMI Vision Chengdu Jimi Chu No. 159, case of Plaintiff
on patent for 4,600.00 No Settled
Technology E-commerce Technology Co., Ltd. dispute over withdraw
invention
Co., Ltd. Co., Ltd. infringement on patents its case,
71 / 311
Annual Report 2020
Tianjin for invention, the and the
Second Plaintiff alleges that the court has
Branch Defendant infringed issued a
rights of the Plaintiff civil
and caused economic ruling
losses to the Plaintiff.
(2020) Min 01 Min
The
Chu No. 1312, case of
Plaintiff
dispute over
withdraw
Formoive infringement on patents
Chengdu Jimi Fuding Juqiyi Infringement its case,
(Beijing) for invention, the
Technology Electronic Product on patent for 200.00 No Settled and the
Technology Plaintiff alleges that the
Co., Ltd. Operation invention court has
Co., Ltd. Defendant infringed
issued a
rights of the Plaintiff
civil
and caused economic
ruling
losses to the Plaintiff.
(III) Other issues
√ Applicable□ N/A
A total of 14 invalidation petitions has been raised against the Company’s patent for invention ZL200880107739.5, and a total of 9 invalidation petitions has
been raised against the Company’s patent for invention ZL200810065225.X. At the end of the reporting period, 22 invalidation cases with the Company as the
patentee have been decided by the National Intellectual Property Administration, with the patent sustained, or withdrawn by the petitioner, and only 1 case is in trial
at the National Intellectual Property Administration. At the end of the reporting period, there was 1 invalidation case where the Company acted as a petitioner. The
case is in trial at the National Intellectual Property Administration, and is related to the invalidation petition against patents held by Delta Electronics, Inc.
72 / 311
Annual Report 2020
X. Penalties imposed on the listed company and its directors, supervisors, senior officers,
controlling shareholder, actual controller and acquirer and rectification of the relevant
violations
□ Applicable√ N/A
XI. Credit standing of the Company and its controlling shareholder and actual controller during
the reporting period
□ Applicable√ N/A
XII. Share incentive plan, employee stock ownership plan and other employee incentive measures
of the Company and their effect
(I) Overview of share incentives
√ Applicable□ N/A
1. Share incentive plan during the reporting period
In RMB
Number of Proportion of Price of
Name of Type of Number of Proportion of
target target shares target shares
plan incentive grantees grantees (%)
shares (%) granted
2019
Restricted Type II
Share restricted 5,500,000 1.21 206 17.61% 17.425
Incentive shares
Plan
Note: The proportion of grantees is calculated with the total number of employees of the Company
as of December 31, 2020 as the denominator.
2. Implementation progress of the share incentive during the reporting period
√ Applicable□ N/A
1. On October 13, 2020, the Company held the 27th meeting of the first Board of Directors and the
14th meeting of the first Board of Supervisors, at which the Proposal on Adjusting the Grant Price of
Restricted Shares under the 2019 Restricted Share Incentive Plan and the Proposal on Granting
Reserved Restricted Shares to Grantees of Share Incentives under the 2019 Restricted Share Incentive
Plan were reviewed and passed.
(1) Considering that the 2019 profit distribution plan of the Company has been completely
implemented, in accordance with the relevant provisions of the incentive plan, the Company made
corresponding adjustment to the grant price of restricted shares to adjust the grant price from RMB 17.5
to RMB 17.425.
(2) The vesting conditions for reserved restricted shares have been met; therefore, October 13, 2020
was determined as the grant date to grant 1.10 million restricted shares to 38 grantees of share
incentives.
2. On October 27, 2020, the Company held the 28th meeting of the first Board of Directors and the
15th meeting of the first Board of Supervisors, at which the Proposal on Invalidating Partial Granted but
Not Vested 2019 Restricted Shares and the Proposal on Vesting Criteria for the First Vesting Period in
the Initial Grant under 2019 Restricted Share Incentive Plan were reviewed and passed.
73 / 311
Annual Report 2020
(1) Considering that 13 grantees of share incentives in the initial grant under the 2019 Restricted
Share Incentive Plan have left the Company, in accordance with the relevant provisions of the incentive
plan, such grantees are no longer qualified as grantees. Therefore, the restricted shares granted but not
vested should not be vested, but should be invalidated by the Company. The grantees of restricted shares
in the initial grant are adjusted from 169 to 156, the number of restricted shares in the initial grant is
adjusted from 4.40 million to 4.1283 million, with 0.2717 million invalidated.
(2) Substantial vesting conditions for the first vesting period with respect to the 156 grantees in the
initial grant under the 2019 incentive plan have been met. Therefore, the Company vested 1.23849
million restricted shares to the 156 qualified grantees.
3. As of November 11, 2020, the Company has received the subscription amount of RMB
20,953,388.25 paid in cash by 147 grantees, including RMB 1,202,490.00 recognized as the share
capital, and RMB 19,750,898.25 recognized as the capital reserve. On November 24, 2020, the share
registration formalities for the first vesting period of the initial grant under the 2019 Restricted Share
Incentive Plan have been completed, and China Securities Depository and Clearing Corporation Limited
Shanghai Branch has issued the Certificate of Securities Change Registration. After the vesting of the
restricted share, the total shares of the Company increased from 451,554,411 to 452,756,901, with
1,202,490 additional tradable shares.
3. Share-based payment recognized due to the share incentive during the reporting period
In RMB
Total share-based payment recognized for the 20,581,939.14
current period
(II) Incentives already disclosed in the interim announcements about which no new information
is available
√ Applicable□ N/A
Summary Reference
On October 13, 2020, the Company held the 27th meeting of
the first Board of Directors and the 14th meeting of the first
Refer to the relevant announcement
Board of Supervisors, at which the Proposal on Adjusting
issued by the Company on
the Grant Price of Restricted Shares under the 2019
www.sse.com.cn and the designated
Restricted Share Incentive Plan and the Proposal on
media for information disclosure on
Granting Reserved Restricted Shares to Grantees of Share
October 14, 2020.
Incentives under the 2019 Restricted Share Incentive Plan
were reviewed and passed.
On October 27, 2020, the Company held the 28th meeting of
the first Board of Directors and the 15th meeting of the first Refer to the relevant announcement
Board of Supervisors, at which the Proposal on Invalidating issued by the Company on
Partial Granted but Not Vested 2019 Restricted Shares and www.sse.com.cn and the designated
the Proposal on Vesting Criteria for the First Vesting Period media for information disclosure on
in the Initial Grant under 2019 Restricted Share Incentive October 29, 2020.
Plan were reviewed and passed.
On November 24, 2020, the share registration formalities for Refer to the relevant announcement
the first vesting period of the initial grant under the 2019 issued by the Company on
Restricted Share Incentive Plan have been completed, and www.sse.com.cn and the designated
China Securities Depository and Clearing Corporation media for information disclosure on
Limited Shanghai Branch has issued the Certificate of November 25, 2020.
74 / 311
Annual Report 2020
Securities Change Registration. After the vesting of the
restricted share, the total shares of the Company increased
from 451,554,411 to 452,756,901.
Other information
□ Applicable√ N/A
Employee stock ownership plan
□ Applicable√ N/A
Other incentives
□ Applicable√ N/A
XIII. Material related-party transactions
(I) Related-party transactions in connection with day-to-day operation
1. Matters already disclosed in the interim announcements about which no new information is
available
√ Applicable□ N/A
Summary Reference
On April 28, 2020, the Company held the 21st
meeting of the first Board of Directors, at which
the Proposal on Daily Related-party Transactions Refer to the Announcement No. 2020-014
in 2020 was reviewed and passed. This proposal “Announcement on expected routine related-party
has been reviewed and passed on May 22, 2020 at transactions in 2020” issued by the Company on
the annual general meeting of shareholders in www.sse.com.cn and the designated media for
2019. It’s expected that the Company will have information disclosure on April 29, 2020.
daily related-party transactions in the amount of
RMB1.2531 billion in 2020.
On October 27, 2020, the Company held the 28th
meeting of the first Board of Directors and the 15th
meeting of the first Board of Supervisors, at which Refer to the Announcement No. 2020-059
the Proposal on Increasing the Amount of Daily “Announcement on increasing the amount of
Related-party Transactions in 2020 was reviewed related-party transactions in 2020” issued by the
and passed. This proposal has been reviewed and Company on www.sse.com.cn and the designated
passed on November 13, 2020 at the third interim media for information disclosure on October 29,
general meeting of shareholders in 2020, 2020.
approving to increase the amount of related-party
transactions by RMB 40.00 million for 2020.
2. Matters already disclosed in the interim announcements about which there’s new information
available
□ Applicable√ N/A
3. Matters that have not been disclosed in any interim announcement
□ Applicable√ N/A
(II) Related-party transactions involving acquisition or sale of assets or equities
1. Matters already disclosed in the interim announcements about which no new information is
available
□ Applicable√ N/A
75 / 311
Annual Report 2020
2. Matters already disclosed in the interim announcements about which there’s new information
available
□ Applicable√ N/A
3. Matters that have not been disclosed in any interim announcement
√ Applicable□ N/A
In RMB
Reaso
n for
great
Impac
differe
t of
nce
the
betwe
transa
Inco en the
ction
me transa
Carryi on the
Evalu fro ction
ng operat
Subj ation Meth m price
Pricing amoun Transf ing
Related Relatio Ty ect of od of the and
princip t of er results
party nship pe matt assets settle tran the
le assets price and
er transf ment sfer carryi
transfe financ
erred of ng
rred ial
asse amou
condit
ts nt,
ions
evalua
of the
tion,
Comp
or
any
marke
t fair
value
Sal
Shenzh Related es
en YLX person of
Technol (same ass Fixe Revita
ogy Chairm ets d Negoti 740,61 740,61 lize
N/A Cash 0 N/A
Develo an as exc asse ation 7.73 7.73 the
pment the ept ts assets
Co., Compa for
Ltd. ny) goo
ds
Description of related-party transactions involving acquisition or sale of assets
In December 2020, the Company sold idle fixed assets in the amount of RMB 740,617.73 to its
related party Shenzhen YLX Technology Development Co., Ltd., whose actual controller is Mr. Li Yi.
In accordance with Article 132 of the Articles of Association, this transaction did not reach the
disclosure standard and was not subject to the approval by the Board of Directors or general meeting,
and may be implemented with the internal approval of the Company.
4. Fulfillment of performance covenants (if any) during the reporting period
□ Applicable√ N/A
76 / 311
Annual Report 2020
(III) Related-party transactions involving joint external investments
1. Matters already disclosed in the interim announcements about which no new information is
available
√ Applicable□ N/A
Summary Reference
The Company held the 24th meeting of the first
Board of Directors on August 17, 2020 and the
Refer to the Announcement No. 2020-038
second interim general meeting for 2020 on
“Announcement on Increasing the Capital of a
September 3, 2020, at which the Proposal on
Controlled Subsidiary by Issuing Additional
Increasing the Capital of a Controlled
Shares & Related-party Transaction” issued by
Subsidiary by Issuing Additional Shares and
the Company on www.sse.com.cn on August 18,
Introducing a Strategic Investor was reviewed
2020.
and passed, approving the controlled subsidiary
Formoive to introduce a strategic investor.
2. Matters already disclosed in the interim announcements about which there’s new information
available
√ Applicable□ N/A
As of February 2021, the plan of capital increase by issuing additional shares has not been duly
implemented. The parties negotiated to optimize and adjust the original transaction plan. In February
2021, the Company held the 29th meeting of the first Board of Directors and the first interim general
meeting for 2021, at which the Proposal on Adjusting the Plan of Increasing the Capital of a Controlled
Subsidiary by Issuing Additional Shares & Related-party Transaction was reviewed and passed. Refer to
the Announcement No. 2021-002 “Announcement on Adjusting the Plan for Increasing the Capital of a
Controlled Subsidiary by Issuing Additional Shares & Related-party Transaction” issued by the
Company on www.sse.com.cn on February 10, 2021.
3. Matters that have not been disclosed in any interim announcement
□ Applicable√ N/A
(IV) Accounts receivable from and payable to related parties
1. Matters already disclosed in the interim announcements about which no new information is
available
□ Applicable√ N/A
2. Matters already disclosed in the interim announcements about which there’s new information
available
□ Applicable√ N/A
3. Matters that have not been disclosed in any interim announcement
□ Applicable√ N/A
(V) Others
□ Applicable√ N/A
XIV. Material contracts and performance thereof
(I) Trusteeship, contracting and lease
1. Trusteeship
□ Applicable√ N/A
77 / 311
Annual Report 2020
2. Contracting
□ Applicable√ N/A
3. Lease
√ Applicable□ N/A
In RMB 0’000
Impac
Basis t of
Amo
Leas for lease Related-
Name Name Lease unt of Lease Lease
e determi incom party Relation
of of d lease start end
inco ning e on transacti ship
lessor lessee assets d date date
me lease the on or not
assets
income Comp
any
Office
Shenz
,
hen
Appotro R&D,
Meish Dece Nove
nics factor
eng 1,265 mber mber
Corpora y, / / / No None
Indust .96 1, 30,
tion emplo
ry 2018 2022
Limited yee
Co.,
dormit
Ltd.
ory
Description of lease
None
(II) Guarantees
√ Applicable□ N/A
In RMB 0’000
Total amount of guarantees provided during the
reporting period (excluding those provided for 0
the subsidiaries)
Balance of guarantees at the end of the
reporting period (excluding those provided for 0
the subsidiaries) (A)
Guarantees provided by the Company or its subsidiaries for the subsidiaries of the Company
Whet
Whet
Relatio Relati her
Commen her Amo Whe
nship onship the
cement the unt of ther
betwee betwe Ince oblig
date of Expir Type oblig the there
n the en the Guara ption ation
guarante y date of ation overd ’s a
Guara guaran Oblig obligo nteed date guara
e of guar guara ue coun
ntor tor and or r and amou of nteed
(signing guara ante nteed oblig ter
the the nt guar has
date of ntee e has ation guar
listed listed antee beco
agreeme been guara ante
compa compa me
nt) disch nteed e
ny ny overd
arged
ue
Appot CINE Three Joint
Contro
ronics APPO May years and
Headq lled 70,00 May 31,
Corpo Laser 31, after seve No No No
uarters subsid 0 2020
ration Cinem 2020 the ral
iary
Limite a due liabil
78 / 311
Annual Report 2020
d Techn date ity
ology for
(Beiji the
ng) oblig
Co., ations
Ltd. under
the
maste
r
contr
act
CINE
APPO
Laser
Appot Joint
Cinem
ronics Contro and
a June June
Corpo Headq lled June 27, seve
Techn 6,000 27, 26, No No No
ration uarters subsid 2019 ral
ology 2019 2023
Limite iary liabil
(Beiji
d ity
ng)
Co.,
Ltd.
Two
Formo years
Appot ive after Joint
ronics (Beiji Contro Octo the and
Corpo Headq ng) lled 16,50 October ber due seve
No No No
ration uarters Techn subsid 0 21, 2019 21, date ral
Limite ology iary 2019 for liabil
d Co., the ity
Ltd. oblig
ations
Initia
l Two
utiliz years
ation after
Formo date the
Appot ive or latest Joint
ronics (Beiji Contro actua due and
Corpo Headq ng) lled 10,00 Decembe l date date seve
No No No
ration uarters Techn subsid 0 r 1, 2020 of of the ral
Limite ology iary utiliz loans liabil
d Co., ation under ity
Ltd. unde the
r the finan
finan cing
cing letter
letter
Three
Formo
years
Appot ive Joint
after
ronics (Beiji Contro and
July the
Corpo Headq ng) lled 10,00 July 1, seve
1, due No No No
ration uarters Techn subsid 0 2020 ral
2020 date
Limite ology iary liabil
for
d Co., ity
the
Ltd.
oblig
79 / 311
Annual Report 2020
ations
under
the
maste
r
contr
act
Total amount of guarantees provided for the
42,030
subsidiaries during the reporting period
Balance of guarantees provided for the
subsidiaries at the end of the reporting period 39,938
(B)
Total amount of guarantees provided by the Company (including those provided for the subsidiaries)
Total amount guaranteed (A+B) 39,938
Proportion of total amount guaranteed to the
19.09
net assets of the Company (%)
Where:
Total amount of guarantees provided for the
shareholders, actual controller and their 0
affiliates (C)
Total amount of debt guarantees directly or
indirectly provided for the obligors whose 36,500
equity-debt ratio exceeds 70% (D)
Total amount guaranteed in excess of 50% of
0
the net assets of the Company (E)
Total amount guaranteed (C+D+E) 36,500
Explanation about outstanding guarantees for
which the Company may assume joint and N/A
several liability
Explanation about guarantees N/A
(III) Entrusted cash asset management
1. Entrusted wealth management
(1) Overall situation of entrusted wealth management
√ Applicable□ N/A
In RMB
Outstanding
Type Source of funds Total amount Overdue amount
amount
Bank wealth
Offering
management 584,000,000 114,000,000 0
proceeds
amount
Bank wealth
Self-funded
management 50,000,000 0 0
capital
amount
Other information
□ Applicable√ N/A
(2) Single entrusted wealth management
□ Applicable√ N/A
Other information
□ Applicable√ N/A
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Annual Report 2020
(3) Provision for impairment of entrusted wealth management products
□ Applicable√ N/A
2. Entrusted loans
(1) Overall situation of entrusted loans
□ Applicable√ N/A
Other information
□ Applicable√ N/A
(2) Single entrusted loans
□ Applicable√ N/A
Other information
□ Applicable√ N/A
(3) Provision for impairment of entrusted loans
□ Applicable√ N/A
3. Other information
□ Applicable√ N/A
(IV) Other material contracts
□ Applicable√ N/A
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Annual Report 2020
XV. Use of offering proceeds
√ Applicable□ N/A
In RMB 0’000
Total offering proceeds used in this
Total offering proceeds 106,247.08 12,624.40
year
Total offering proceeds with the
0
purpose changed Cumulative total offering proceeds
45,223.24
Proportion of total offering proceeds used
0
with the purpose changed (%)
Differenc
e between
the
cumulativ Date for
Investme
e amount the
Change Committe nt
Cumulativ invested project Benefit Whethe Material
d Total d progress
Amount e amount and the to reach s r changes
Investment project, offering Post-adjustme investmen by the
invested invested committe the realize exceed in the
project includin proceeds nt total t amount end of the
in this by the end d working d in the expecte project
promised g partial committe investment by the end period
year of the investmen conditio current d feasibilit
change d of the (%)
period② t amount n for its year benefits y
(if any) period① ④=②/
by the end intended
①
of the use
period
③=②-
①
R&D and
industrializatio
n of new No -22,428.5 March
31,300.00 31,300.00 31,300.00 5,725.36 8,871.47 28.34 - N/A No
generation of change 3 2022
laser display
products
R&D center at
the head office No -27,092.9 August
28,400.00 28,400.00 28,400.00 1,044.70 1,307.10 4.6 N/A N/A No
of change 0 2022
Appotronics
82 / 311
Annual Report 2020
Information
system No March
7,000.00 7,000.00 7,000.00 750.61 1,505.17 -5,494.83 21.5 N/A N/A No
upgrade and change 2022
building
Supplementar
No
y working 33,300.00 33,300.00 33,300.00 5,103.73 33,539.50 100.72 N/A N/A N/A No
change
capital
100,000.0 100,000.0 12,624.4 -55,016.2
Total - 100,000.00 45,223.24 - - - -
0 0 0 6
1. The head office of the Company is still in construction; as a result, the R&D center at the head office
and the information system upgrade and building cannot be implemented in a large scale.
Reason for not reaching the planned progress (by 2. Under the impact of COVID-19, during the implementation of the R&D and industrialization of new
specific investment project) generation of laser display products, based on the principle of ensuring quality, controlling costs, and
reducing risks, the Company acted more diligently in the specific planning and use of funds for the
projects, which delayed the overall implementation progress expected.
Description of material changes in project feasibility No material change
On July 29, 2019, the Proposal on Replacing Early Funds Invested with Offering Proceeds was reviewed
and passed at the 16th meeting of the first Board of Directors, approving the Company to replace the
invested funds of RMB 18.9584 million as of July 19, 2019 with the offering proceeds, and replace the
Early investment and replacement of offering proceeds offering expenses paid in the amount of RMB 3.1056 million with the offering proceeds. The matters
above have been assured by Pan-China Certified Public Accountants (Special General Partnership),
which issued the Assurance Report on Replacement of Funds with Offering Proceeds by Appotronics
Corporation Limited (Tian Jian Shen [2019] No. 7-393).
Supplement the working capital with idle offering
None
proceeds
On July 29, 2019, the Proposal on Cash Management of Temporarily Idle Offering Proceeds was
reviewed and passed at the 16th meeting of the first Board of Directors. It was approved that, without
affecting the normal implementation of the investment plan for offering proceeds, a maximum of RMB
900 million temporarily idle offering proceeds may be put under cash management to purchase
Cash management of idle offering proceeds, and investment products featuring high security, good liquidity, and guarantee of the principal (including but
investment in relevant products not limited to structural deposits, agreement deposits, notice deposits, term deposits, large-amount
deposit note, and return notes), where the total amount for purchasing return notes shall be no more than
RMB 200 million for no more than 12 months, which shall be effective within 12 months from the
review and approval by the Board of Directors and Board of Supervisors. On July 21, 2020, the Proposal
on Cash Management of Temporarily Idle Offering Proceeds was reviewed and passed at the 23rd
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Annual Report 2020
meeting of the first Board of Directors. It was approved that, without affecting the normal
implementation of the investment plan for offering proceeds, a maximum of RMB 670 million
temporarily idle offering proceeds may be put under cash management to purchase investment products
featuring high security, good liquidity, and guarantee of the principal (including but not limited to
structural deposits, agreement deposits, notice deposits, term deposits, large-amount deposit note, and
return notes), where the total amount for purchasing return notes shall be no more than RMB 200 million
for no more than 12 months, which shall be effective within 12 months from the review and approval by
the Board of Directors and Board of Supervisors.
Supplement working capital or repay bank loans with
None
excess offering proceeds
Balance of offering proceeds and reasons thereof N/A
Other use of offering proceeds None
[Note] During the project, the total wealth management returns of RMB 2.3950 million were realized from the special account of supplementary working capital,
which have been put into use in the project (supplementary working capital). As of the date of approval for issue of this Report, the special account (Huaxia Bank
Co., Ltd. Houhai Branch, account number: 10869000000251463) has been deregistered. The interest RMB 1,418.11 incurred after the project has been paid to the
basic account of the Company to be used as supplementary working capital.
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Annual Report 2020
XVI. Other significant matters
□ Applicable√ N/A
XVII. Active performance of social responsibilities
(I) Poverty alleviation of listed companies
□ Applicable√ N/A
(II) Performance of social responsibilities
1. Protection of the rights and interests of shareholders and creditors
√ Applicable□ N/A
1. Welcome regulations and make compliant disclosure to respond to concerns of
shareholders
The Board Secretary of the Company is responsible for external information disclosure. The
Company has designated Shanghai Securities News, China Securities Journal, Securities Times, and
Securities Daily as the newspaper and website for information disclosure. During the reporting period,
we have always duly performed our obligation of information disclosure in accordance with the Rules
Governing the Listing of Stocks on the Sci-tech Innovation Board of the Shanghai Stock Exchange, the
Guidelines on the Application of Self-Regulation Rules for Companies Listed on the STAR Market No. 1
- Regulated Operation and other applicable laws and regulations, and our Information Disclosure Policy,
to ensure that all shareholders and other stakeholders have equal access to the information of the
Company. In 2020, we disclosed 4 true, accurate, and complete regular reports; promptly disclosed 147
interim announcements on the resolutions of the general meeting and use of offering proceeds, and
voluntarily disclosed the English version of our regular reports, announcement on the recovery of the
cinema business, and social responsibility report. We performed the information disclosure obligations
in accordance with law to promptly notify investors of significant operating updates of the Company and
progress of major matters, hence protecting the legitimate rights of investors.
2. Innovate channels for communicating with investors to deliver the investment value of the
company from multiple perspectives
In 2020, we made 30+ roadshows in the form of strategy meetings with securities companies,
on-site reception at the Company, teleconferences, online Q&A, etc., and communicated with 110+
buyer and seller institutions and over 240 person-times. We held performance briefings via video or
telephone for the annual report, semiannual report, and third quarter report to build the bridge for
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Annual Report 2020
communication between the management of the Company and the capital market. We communicated
with and answered the queries of 190+ investors via the investor hotline. We received 30+ queries in
SSE E-Interaction, and replied to all the queries. Meanwhile, in consideration of the video dissemination,
we opened a WeChat video account to deliver performance interpretation, business progress,
management interview, and other updates of the Company to investors more vividly.
3. Improve the profit distribution policy and enhance the mechanism of returns to investors
The Company reviews the shareholder returns plan at least once every three years, make
appropriate and necessary amendments to its profit distribution policy and decide on the shareholder
returns plan for the giving period according to the opinions of the shareholders (in particular, holders of
public shares), the independent directors and supervisors, subject to the applicable laws, rules,
regulations and normative documents.
2. Protection of the rights and interests of employees
√ Applicable□ N/A
2.1 Employee structure
At the end of 2020, we have a total of 1,170 employees at the average age of 32, including 456
employees below 30, representing 44% of the total employees. The ratio of male to female employees is
7:3. Male employees are slightly more than female employees, which is in line with the characteristics of
the technology industry.
The company has 369 R&D persons, accounting for 31.54% of the total number of employees.
31.71% R&D persons hold a master or doctor degree, while nearly 90% R&D persons hold a bachelor’s
or higher degree. The core R&D team is led by the internationally leading talent in the laser display field,
and attracted R&D staff graduated from well-known domestic and foreign universities covering optical,
electronics, materials, physics, mechanical designing, fine manufacturing, etc.
2.2 Compensation and benefits of employees
Based on the development objective and talent policy of the Company, we regulate the
remuneration management on the basic idea of “matching the market environment, reflecting the value
of talents, and achieving incentive effects”. We combine guaranteed benefits with incentives in balanced
consideration of internal fairness and market competitiveness to achieve “consistency between
responsibilities and rights, consistency between capabilities and value, and consistency between
performance and benefits” in the allotment of employee remunerations.
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Annual Report 2020
With reference to the operating conditions, objective achievement, and business characteristics of
the Company, we have formulated a corresponding incentive plan focusing on performance to inspire
teams and individuals with outstanding performance, containing profit sharing bonus, patent rewards,
major innovation rewards, sales commissions, sales rewards, ranking rewards (outstanding employee,
quarterly/annual honour awards), and talent spotter rewards.
2.3 Career development of employees
We classified all positions into 5 position groups according to the position contribution, nature of
work, and the professional knowledge and skills required - management group, technology group,
professional group, marketing group, and operation group, set separate career development channels for
different position groups, and formulated the Provisions on Employee Promotion Management to
provide effective guidelines for the development of employees.
Meanwhile, we make every effort for resource building, helping talents to achieve rapid
development on the Appotronics platform. After the efforts for years, we have gradually established a
sound talent training system: the “Star Light Program” for the development of college graduates, the
“Sharp Light Program” for the development of grassroots managers, and the “Polar Light Program” for
the development of middle managers. The continuous talent input and intensive culture inheritance in
the training at both the primary and middle level effectively support the stable development of the
Company.
2.4 Diversified training mechanisms
We comprehensively implement the three-level training management system - training programs at
the Company level, universal capability training at the central level, and field-specific capability training
at the department level. The layered and multiple-perspective trainings provide a learning and exchange
platform for employees, hence cultivating all-round talents required by our business and achieving
win-win results of corporate development and personal development. In 2020, we organized 608 training
sessions for a total of 16,500 training hours, which effectively meet the demands for employee personal
capability development and organization capability improvement, which received the employee
satisfaction of 9 out of 10 scores.
2.5 Other employee benefits
2.5.1 Elect employee representatives to participate in the governance of the Company
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Annual Report 2020
The trade union started the registration of representative candidates for the “Second Meeting of
Employee Representatives” on April 29, 2020 and carried out the election on May 7, 2020 to elect 100
employee representatives and 27 representative candidates. During the term of three years, employee
representatives exercise democratic management rights and participate in the review of policies and
rules involving employee interests. All regular employees are qualified for the election.
2.5.2 Safeguarding the travel safety at night
We have enabled the Didi corporate version so that all employees may call for cars free of charge
by using the Didi corporate version; this solves the safety concerns of employees after overtime work at
night. To ensure equal benefits for employees driving to work, the Company negotiated with the
property management company to provide employees leaving at night with the benefit of free parking
for the day.
2.5.3 Annual physical examination for all employees
We cooperate with physical examination institutions to provide all employees with health physical
examination. In 2020, under the impact of COVID-19, the physical examination of all employees is
planned between the middle of December to the middle of March 2021. All employees who have joined
the Company for three months are qualified for this benefit.
2.5.4 Free dinner
We provide free dinners for all employees. Employees may claim for a dinner ticket after 6:30 in
the evening to take the free dinner at the designated dining hall with the ticket.
3. Protection of the rights and interests of suppliers, customers and consumers
√ Applicable□ N/A
1. Implement strict quality control to ensure quality output
We are committed to providing the customers with high-quality products through strict quality
control. Our production base has passed ISO9001 quality management system certification. The
contracts executed by us with the customers generally contain quality assurance clauses, pursuant to
which we have the obligation to repair the products sold by us that are found to have quality problems
during the warranty period (which is 1-3 years generally) free of charge.
2. Continuously optimize services to improve customer experience
Our service team implements the service idea of “customer foremost” and abide by the national
standard Evaluation System for After-sales Service of Commodity and our internal after-sales service
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Annual Report 2020
management requirements to carryout internal inspection and management review, constantly optimize
the service procedure, enhance monitoring and management, and continuously improve the service
system. We safeguard the legitimate rights and interests of the suppliers, customers and consumers
through the measures stated above.
3. Innovate the service mode to support customers in reducing costs and improving efficiency
For the cinema projector market, we took the lead in releasing “Laser as a Service” for cinema laser
light sources in the industry. The cinemas just need to pay rents according to the length of use, without
needing to purchase light sources, which will help the cinemas not only effectively reduce equipment
purchase costs, labor costs and maintenance costs, but also improve their market competitiveness
through the high luminance, wide color gamut, high contrast and good picture quality and other
technical advantages provided by the laser light source of Appotronics, therefore truly achieve “cost
reduction and efficiency improvement”.
4. Product safety
√ Applicable□ N/A
We attach great importance to ensuring safety of products, and have passed the following product
safety certifications in the manufacturing field at home and abroad, which provides assurance for the
safety of our products.
Abbr
eviati Description
on
China Compulsory Certification, a compulsory safety certification required by the
CCC Certification and Accreditation Administration of the People’s Republic of China for the
products covered.
Electrical Testing Laboratories, a generally accepted product safety certification in the
ETL
North America.
CE Conformite Europeenne, a compulsory certification required by EU.
Federal Communications Commission, a certification required by the Federal
FCC Communications Commission for the radio products, communication products and digital
products entering the American market.
Certification Bodies, a global system established by the International Electrotechnical
CB Commission (IECEE). CB test reports and CB test certificates are recognized in all member
states of IECEE.
Technischer berwachungs-Verein, a generally accepted safety certification of electronic
TUV
components in Germany and Europe.
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Annual Report 2020
4. Public relations and public welfare activities
√ Applicable□ N/A
1. Good faith in operation
We insist on good faith in our operation. During the reporting period, neither the Company nor any
director, supervisor, or senior officer was subject to investigation by a competent authority, enforcement
by a judicial or disciplinary authority, or transferred to judicial authority or investigated for criminal
liabilities.
2. Actively perform the duties as a corporate citizen
2.1 Compliant operation and tax payment. We abide by the relevant national laws and
regulations, operate in compliance with requirements, obey the management of the local government,
accept the supervision of local regulatory authorities, and strictly fulfill our obligations as a taxpayer.
2.2 Continuously promote employment. We strictly abide by relevant provisions of the Labor
Law and the Labor Contract Law, attach importance to the protection of employee rights and interests,
follow the principles of equality, voluntariness, and coordination to provide employees with equal
employment opportunities in accordance with law, so as to establish a regulated and orderly, mutually
beneficial, harmonious and stable relationship to make our contributions for the national objective of
“stable employment”.
3. Healthcare for employees in prevention of COVID-19
At the beginning of COVID-19, we made quick judgement to establish the “pandemic-fighting
Panel” to implement preventive measures such as environment sterilization, issuance of facial masks, etc.
We implemented comprehensive control and prevention measures on an ongoing basis as normal
activities, so as to provide employees with prevention instructions, materials, and mental care to
safeguard the health and lives of all employees. None of our employees were verified or suspected of
being infected in 2020.
4. Take the lead in resume production to facilitate economy recovery
With a series of prevention measures and preparation made, Appotronics duly resumed production
on February 10 as one of the first high-tech enterprises resuming production in Shenzhen, hence setting
an exemplary role in resuming production and promoting economy recovery with safety guaranteed. On
March 3, 2020, European Pressphoto Agency (EPA) took a picture of Appotronics’s cinema product
shop, depicting our employees inspecting products carefully with text description. After being forwarded
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Annual Report 2020
by Wall Street Journal, the Guardian, Bajapress, ShuttersStock, The Top 10 News, and other
authoritative media, this picture was widely disseminated in the western world as the “Chinese power”
amid the pandemic.
5. Donate materials to empower scientific pandemic prevention and controlling
After the occurrence of the pandemic, we immediately offered our support to the front line by
providing large laser display screens to Shenzhen Disease Control Center to facilitate visualization of
medical data, hence offering our help in releasing pandemic information, patient diagnosis, and tracking
of suspected patients and traces in real time, and in video conferences with governments at various
levels and medical institutions.
Meanwhile, we donated customized laser smart projectors equipped with keyboards and mouse for
interaction to medical teams went to Wuhan. Such mobile, portable, high-definition, and high-brightness
smart mini projectors adopt the principle of reflection display, hence generating no direct lights to eyes
and no blue lights to avoid visual fatigue after viewing for a long period of time. During the period of
preventing and controlling the pandemic, smart mini projectors may be used as auxiliary devices for
online education to help children of those went to Wuhan take “online lessons” in a safe way, solving
the concerns of the medical staff so that they may focus on fighting COVID-19 without worrying about
their home, and being a reassuring and hart-warming “rear area” for the frontline soldiers fighting the
pandemic.
6. Care eyes with laser display to protect the vision of teenagers
At the beginning of 2020, student learning never stopped despite the shut down of schools. Parents
were worried about the eyes of children since children had to take lessons using display screens. The
People’s Daily, Health Times, and many ophthalmology professions and education experts advocated
high-definition projector for taking online lessons, and recommended, in order, projectors, liquid crystal
TVs, and LED displays. Formoive, a subsidiary of Appotronics, intensified efforts on smart mini
projector products to release Formoive projector Smartpro, Voguepro, and other products. Such products
have the features of reflection light and diffuse reflection for eyes, hence protecting teenagers from blue
light damages from mobile phones, tablet computers, liquid crystal display screens, helping children take
lessons effectively while caring for eyes, so parents are more reassured.
7. Innovate application scenarios for laser display to care about the mental health of children
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Annual Report 2020
In 2020, Appotronics cooperated with Shenzhen Children’s Hospital to build a creative anesthesia
induction room with laser display technologies. The integrated solution created a virtual 3D dynamic
space for children to achieve the natural and immersive effects, hence realizing “no physical pain” and
“no mental hurt” in children anesthesia. Children may be accompanied by their parents through a
“underwater world” before entering the operating room and go into sleep step by step. Such drugless
anesthesia induction effectively relieves the anxiety of children to protect their mental health.
8. Establish a system to support social welfare as normal activities
By combining the strategic objectives with the actual requirements for social development, the
Company made a plan for social welfare to support industry development, environment protection,
education grants, charity donation, and employee care. We make the plan and budget for social welfare
activities every year, which activities will be implemented and organized by the trade union and the
Human Resources Department.
9. Be awarded as the “Most Socially Responsible Listed Company”
In November 2020, National Business Daily released the 10th ranking of Chinese listed companies
covering companies listed on Chinese mainland, Hong Kong, and US stock markets. Appotronics
distinguished itself as the “Most Socially Responsible Listed Company” on the ranking of Chinese listed
companies. Moreover, at the Second Social Responsibility Forum of Shenzhen Enterprises & Award
Ceremony sponsored by Nanfang Daily, Appotronics was granted the “Award of Social Responsibility”.
(III) Environment
1. Environmental protection information of the Company and its major subsidiaries that are
identified as major polluters by the environmental protection authority
□ Applicable√ N/A
2. Environmental protection information of the Company that is not identified as a major
polluter
√ Applicable□ N/A
We have not been identified as a major polluter during the reporting period. We attach importance
to environmental protection and have taken the following environmental protection measures to fulfill
our social responsibility:
Disposal of solid wastes
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Annual Report 2020
Our solid wastes include consumer wastes, general industrial solid wastes and hazardous wastes.
The consumer wastes are collected and then handed over to the environmental sanitation entity for
centralized treatment. The general industrial solid wastes mainly consist of leadless waste scruff and
waste packing materials generated in the production process, which are collected by category and then
handed over to the relevant resource recycling entities for recycling. The hazardous wastes mainly
consist of waste active carbon generated in the waste gas treatment process, and wastes containing
industrial alcohol and waste packing materials containing cleaning agents that are generated in the
production process, which are collected and then handed over to the qualified entities for treatment.
Sewage treatment
Our sewage includes domestic sewage and industrial sewage. The domestic sewage is pre-treated
through septic tank or otherwise, and after meeting the relevant standard, discharged to the municipal
sewage treatment pipelines and sewage treatment plant. The industrial sewage is handed over to the
qualified entities for treatment. In addition, we have optimized the technologies currently used to reduce
the sewage discharged. We appoint a third party to inspect our domestic sewage every year.
Waste gas treatment
Our waste gas mainly includes waste gas containing tin and organic waste gas generated in the
production process. We have built a waste gas treatment system, comprising UV photolysis, active
carbon adsorption plant, air purification equipment and other equipment. After the treatment, the
concentration of tin and NmHc in the waste gas discharged by us to the air meets the local standard for
Atmospheric Pollutant Emission Limit. In addition, we appoint a third party to conduct the relevant
inspections every year.
Certifications relating to environmental protection
We passed ISO14001 environmental management system certification in 2008, and has maintained
such certification to date. In 2019, we passed QC080000 hazardous substance process management
system certification. All of our products are green products and have passed RoHS, REACH and China
environmental labeling product certification, among others.
3. Reason for failure to disclose environmental protection information of the Company that is
not identified as a major polluter
□ Applicable√ N/A
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Annual Report 2020
4. New information about the environmental protection information disclosed during the
reporting period
□ Applicable√ N/A
(IV) Other information
□ Applicable√ N/A
XVIII Convertible corporate bonds
□ Applicable√ N/A
94 / 311
Annual Report 2020
Section VIChanges in Shares and Shareholders
I. Changes in ordinary shares
(I) Statement of changes in ordinary shares
1. Statement of changes in ordinary shares
Unit: Share
Before the change +/- After the change
Capitalization
Percentage New Bonus Percentage
Number of capital Others Subtotal Number
(%) shares shares (%)
reserve
I. Non-tradable shares 394,361,498 87.33 -224,904,732 -224,904,732 169,456,766 37.43
1. Shares held by the State
2. Shares held by State-owned
corporations
3. Shares held by other
243,665,462 53.96 -78,202,707 -78,202,707 165,462,755 36.55
domestic investors
Where: Shares held by
domestic non-stated-owned 233,615,923 51.73 -68,153,168 -68,153,168 165,462,755 36.55
corporations
Shares held by
10,049,539 2.23 -10,049,539 -10,049,539 0 0.00
domestic natural persons
4. Shares held by foreign
150,696,036 33.37 -146,702,025 -146,702,025 3,994,011 0.88
investors
Where: Shares held by foreign
135,203,427 29.94 -131,209,416 -131,209,416 3,994,011 0.88
corporations
Shares held by foreign 15,492,609 3.43 -15,492,609 -15,492,609 0 0.00
95 / 311
Annual Report 2020
natural persons
II. Tradable shares 57,192,913 12.67 1,202,490 224,904,732 226,107,222 283,300,135 62.57
1. RMB-denominated
57,192,913 12.67 1,202,490 224,904,732 226,107,222 283,300,135 62.57
ordinary shares
2. Foreign
currency-denominated shares
listed domestically
3. Foreign
currency-denominated shares
listed overseas
4. Others
III. Total ordinary shares 451,554,411 100 1,202,490 1,202,490 1,202,490 452,756,901 100
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Annual Report 2020
2. Explanation about changes in ordinary shares
√ Applicable□ N/A
During the reporting period, we completed the share registration for the first vesting period in the
initial grant of the restricted share incentive plan 2019. On November 27, 2020, 147 grantees of share
incentives completed vesting registration with 1.20249 million shares eligible for trading on the market,
representing 0.27% of the Company total shares prior to the vesting. After this vesting was completed,
the total shares of the Company changed from 451,554,411 shares to 452,756,901 shares. For details,
refer to the Announcement of Appotronics Corporation Limited on the Vesting Result for the First
Vesting Period in the Initial Grant of the Restrict Share Incentive Plan 2019 and Listing of Shares
published on www.sse.com.cn on November 25, 2020 (No. 2020-067).
1. Effect of the changes in ordinary shares on the earnings per share, net assets per share and
other financial indicators of the most recent year and the most recent reporting period (if any)
√ Applicable□ N/A
During the reporting period, we completed the share registration for the first vesting period in the
initial grant of the restricted share incentive plan 2019, which increased the share capital by RMB
1,202,490 and the capital reserve by RMB 19,750,898.25.
In RMB
Item 2020 2020 (calculated on the same
basis) (Note)
Basic earnings per share 0.25 0.25
Diluted earnings per share 0.25 0.25
Net assets per share attributable 4.62 4.59
to the shareholders of ordinary
shares of the listed company
Note: The basic earnings per share, diluted earnings per share and net assets per share attributable
to the shareholders of ordinary shares of the listed company in 2020 calculated on the same basis are
calculated supposing that the ordinary shares remained unchanged in 2020.
2. Other information disclosed as the Company deems necessary or required by the securities
regulatory authority
□ Applicable√ N/A
(II) Changes in non-tradable shares
√ Applicable□ N/A
Unit: Share
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Annual Report 2020
Numbe
r of Balance of
Balance of Number of
non-tra non-tradab
non-tradable non-tradable
dable le shares Reason for Unlock
Shareholder shares as at shares
shares as at restriction date
January 1, unlocked in
increas December
2020 2020
ed in 31, 2020
2020
SAIF IV Hong
Non-tradabl
Kong (China July 22,
62,980,676 62,980,676 0 0 e pre-IPO
Investments) 2020
shares
Limited
CITIC PE
Non-tradabl
Investment (Hong July 22,
41,774,562 41,774,562 0 0 e pre-IPO
Kong) 2016 2020
shares
Limited
Fuzhou Haixia
Non-tradabl
Appotronics July 22,
25,064,737 25,064,737 0 0 e pre-IPO
Investment 2020
shares
Partnership (LP)
Non-tradabl
Green Future July 22,
16,504,518 16,504,518 0 0 e pre-IPO
Holdings Limited 2020
shares
Changzhou
Non-tradabl
Lisheng Equity July 22,
11,667,635 11,667,635 0 0 e pre-IPO
Investment 2020
shares
Partnership (LP)
Shenzhen
Guochuang
Chenggu Capital
Non-tradabl
Management Co., July 22,
10,443,640 10,443,640 0 0 e pre-IPO
Ltd. - Shenzhen 2020
shares
Chengguhui
Equity Investment
Partnership (LP)
Non-tradabl
July 22,
CAI Kunliang 10,049,539 10,049,539 0 0 e pre-IPO
2020
shares
Non-tradabl
July 22,
CUI Jingtao 9,658,792 9,658,792 0 0 e pre-IPO
2020
shares
Smart Team Non-tradabl
July 22,
Investment 6,799,660 6,799,660 0 0 e pre-IPO
2020
Limited shares
98 / 311
Annual Report 2020
Non-tradabl
July 22,
ZHENG Yongshi 5,833,817 5,833,817 0 0 e pre-IPO
2020
shares
Shenzhen
Non-tradabl
Liansong Capital July 22,
5,833,817 5,833,817 0 0 e pre-IPO
Management 2020
shares
Partnership (LP)
Shenzhen
Non-tradabl
Shanqiao Capital July 22,
5,320,000 5,320,000 0 0 e pre-IPO
Management 2020
shares
Partnership (LP)
Huatai
Appotronics Non-tradabl
Employee Stock e strategic
July 22,
Ownership Plan - 4,548,685 4,548,685 0 0 allotted
2020
Jiayuan I shares in
Collective Asset IPO
Management Plan
Non-tradabl
LIGHTZONE July 22,
3,150,000 3,150,000 0 0 e pre-IPO
LIMITED 2020
shares
Shenzhen Hongtu
Non-tradabl
Kongque Venture July 22,
1,736,252 1,736,252 0 0 e pre-IPO
Capital Investment 2020
shares
Co., Ltd.
Non-tradabl
e off-line January
Off-line allotment
3,538,402 3,538,402 0 0 allotted 22,
plan
shares in 2020
IPO
Total 224,904,732 224,904,732 0 0 / /
II. Issuance and listing of securities
(I) Securities issued during the reporting period
□ Applicable√ N/A
Explanation about the securities issued during the reporting period (in case of any outstanding bonds
with different interest rates, please explain separately):
□ Applicable√ N/A
(II) Changes in total number of ordinary shares, shareholding structure, and structure of assets
and liabilities of the Company
√ Applicable□ N/A
99 / 311
Annual Report 2020
During the reporting period, we completed the share registration for the first vesting period in the
initial grant of the restricted share incentive plan 2019. On November 27, 2020, 147 grantees of share
incentives completed vesting registration with 1.20249 million shares eligible for trading on the market,
representing 0.27% of the Company total shares prior to the vesting. After this vesting was completed,
the total shares of the Company changed from 451,554,411 shares to 452,756,901 shares. For details,
refer to the Announcement of Appotronics Corporation Limited on the Vesting Result for the First
Vesting Period in the Initial Grant of the Restrict Share Incentive Plan 2019 and Listing of Shares
published on www.sse.com.cn on November 25, 2020 (2020-067).
III. Shareholders and actual controller
(I) Total number of shareholders
Total number of shareholders of ordinary shares as of the end of the 15,616
reporting period
Total number of shareholders of ordinary shares as of the end of the 13,653
month immediately prior to the issue date of this annual report
Total number of shareholders of preferred shares whose voting right 0
has been restituted as of the end of the reporting period
Total number of shareholders of preferred shares whose voting right 0
has been restituted as of the end of the month immediately prior to the
issue date of this annual report
Number of holders of depository receipts
□ Applicable√ N/A
(II) Shares held by top 10 shareholders and top 10 holders of tradable shares as of the end of the
reporting period
Unit: Share
Shares held by top 10 shareholders
Number of Shares
non-tradable pledged or
Balance of
shares held, frozen Share
Change shares held
Percent Number of including holde
Shareholder during the as at the end N
age non-tradable the shares r
(Full name) reporting of the u
(%) shares held lent out Share natur
period reporting m
under the status e
period be
refinancing
r
arrangement
100 / 311
Annual Report 2020
Dom
estic
Shenzhen non-s
Appotronics tated
0 79,762,679 17.62 79,762,679 79,762,679 None 0
Holdings owne
Limited d
corpo
ration
SAIF IV
Forei
Hong Kong
gn
(China -9,066,941 53,913,735 11.91 0 0 None 0
corpo
Investments)
ration
Limited
CITIC PE
Forei
Investment
gn
(Hong -4,361,530 37,413,032 8.26 0 0 None 0
corpo
Kong) 2016
ration
Limited
Dom
Nantong estic
Strait non-s
Appotronics tated
0 25,064,737 5.54 0 0 None 0
Investment owne
Partnership d
(LP) corpo
ration
Shenzhen Dom
Yuanshi estic
Laser non-s
Industrial tated
0 24,139,500 5.33 24,139,500 24,139,500 None 0
Investment owne
Consulting d
Partnership corpo
(LP) ration
Dom
Shenzhen estic
Appotronics non-s
Daye tated
0 20,430,250 4.51 20,430,250 20,430,250 None 0
Investment owne
Partnership d
(LP) corpo
ration
101 / 311
Annual Report 2020
GREEN Forei
FUTURE gn
0 16,504,518 3.65 0 0 None 0
HOLDINGS corpo
LIMITED ration
Dom
Shenzhen estic
Appotronics non-s
Hongye tated
0 15,662,374 3.46 15,662,374 15,662,374 None 0
Investment owne
Partnership d
(LP) corpo
ration
Dom
Shenzhen estic
Jinleijing non-s
Investment tated
0 12,353,106 2.73 12,353,106 12,353,106 None 0
Limited owne
Partnership d
(LP) corpo
ration
Dom
Shenzhen estic
Chengguhui non-s
Equity tated
0 10,443,640 2.31 0 0 None 0
Investment owne
Partnership d
(LP) corpo
ration
Shares held by top 10 holders of tradable shares
Type and number of shares
Shareholder Number of tradable shares held
Category Number
SAIF IV Hong Kong (China RMB-denominated
53,913,735 53,913,735
Investments) Limited ordinary share
CITIC PE Investment RMB-denominated
37,413,032 37,413,032
(Hong Kong) 2016 Limited ordinary share
Nantong Strait Appotronics RMB-denominated
25,064,737 25,064,737
Investment Partnership (LP) ordinary share
GREEN FUTURE RMB-denominated
16,504,518 16,504,518
HOLDINGS LIMITED ordinary share
Shenzhen Chengguhui
RMB-denominated
Equity Investment 10,443,640 10,443,640
ordinary share
Partnership (LP)
Smart Team Investment RMB-denominated
6,799,660 6,799,660
Limited ordinary share
102 / 311
Annual Report 2020
RMB-denominated
CAI Kunliang 6,096,243 6,096,243
ordinary share
ShenZhen Xiaoxiang Junyi
Asset Management Co.,
RMB-denominated
Ltd. - Junyi Hongcheng 5,849,872 5,849,872
ordinary share
Private Securities
Investment Fund
Shenzhen Liansong Capital
RMB-denominated
Management Partnership 5,833,817 5,833,817
ordinary share
(LP)
Huaxia SSE STAR Market
50 Constituent Trading RMB-denominated
4,713,113 4,713,113
Open-end Index Securities ordinary share
Investment Fund
1. As of December 31, 2020, among our top 10 shareholders, Appotronics
Holdings, Yuanshi, Appotronics Daye, Appotronics Hongye and Jinleijing
Affiliates or concert parties are concert parties. We have not received any notice about affiliates or
among the shareholders concert parties among other shareholders stated above.
stated above 2. We are not aware whether there are affiliates or concert parties as defined
in the Administrative Measures for the Acquisition of the Listed Companies
among other shareholders.
Holders of preferred shares
whose voting right has been
N/A
restituted and the number of
shares held by them
Top 10 holders of non-tradable shares and lock-up period
√ Applicable□ N/A
Unit: Share
Unlocking of non-tradable
Number of shares
Lock-up
No. Holder of non-tradable shares non-tradable Number of
period
shares held Unlock date shares newly
unlocked
36 months
Shenzhen Appotronics
1 79,762,679 July 22, 2022 0 after the
Holdings Limited
listing date
Shenzhen Yuanshi Laser 36 months
2 Industrial Investment 24,139,500 July 22, 2022 0 after the
Consulting Partnership (LP) listing date
36 months
Shenzhen Appotronics Daye
3 20,430,250 July 22, 2022 0 after the
Investment Partnership (LP)
listing date
103 / 311
Annual Report 2020
Shenzhen Appotronics 36 months
4 Hongye Investment 15,662,374 July 22, 2022 0 after the
Partnership (LP) listing date
Shenzhen Jinleijing 36 months
5 Investment Limited 12,353,106 July 22, 2022 0 after the
Partnership (LP) listing date
Shenzhen Appotronics 36 months
6 Chengye Consulting 10,394,846 July 22, 2022 0 after the
Partnership (LP) listing date
36 months
BLACKPINE Investment
7 3,994,011 July 22, 2022 0 after the
Corp. Limited
listing date
24 months
Huatai Venture Capital
8 2,720,000 July 22, 2021 0 after the
Investment Co., Ltd.
listing date
As of December 31, 2020, among the shareholders of the
restricted shares above, Appotronics Holdings, Yuanshi,
Appotronics Daye, Appotronics Hongye, Jinleijing,
Affiliates or concert parties among
Appotronics Chengye, and BLACKPINE Investment Corp.
the shareholders stated above
Limited are concert parties. We have not received any notice
about affiliates or concert parties among other shareholders
stated above.
Statement of top 10 holders of domestic depository receipts as of the end of the reporting period
□ Applicable√ N/A
Number of non-tradable depository receipts held by top 10 holders and lock-up period
□ Applicable√ N/A
(III) Statement of top 10 shareholders by number of votes held as of the end of the reporting
period
□ Applicable√ N/A
(IV) Strategic investors or general corporations that become top shareholders as a result of
allotment of new shares/depository receipts
□ Applicable√ N/A
(V) Strategic allotment in IPO
1. Participation by any special asset management plan established by senior officers and key
employees in the strategic allotment in IPO
√ Applicable□ N/A
Unit: Share
Number of Changes during the Closing number
Shareholder Unlock date
shares/depository reporting period of non-tradable
104 / 311
Annual Report 2020
receipts allotted shares held,
including the
shares/depository
receipts lent out
under the
refinancing
arrangement
Huatai
Appotronics
Employee
Stock
Ownership July 22,
4,548,685 0 4,548,685
Plan - Jiayuan I 2020
Collective
Asset
Management
Plan
2. Participation by any subsidiary of the sponsor in the strategic allotment in IPO
√ Applicable□ N/A
Unit: Share
Closing number
of non-tradable
shares held,
Changes
Relationship Number of including the
during the
Shareholder with the shares/depository Unlock date shares/depository
reporting
sponsor receipts allotted receipts lent out
period
under the
refinancing
arrangement
Huatai
Venture Subsidiary
Capital of the 2,720,000 July 22, 2021 0 2,720,000
Investment sponsor
Co., Ltd.
IV. Controlling shareholder and actual controller
(I) Controlling shareholder
1 Legal person
√ Applicable□ N/A
Name Shenzhen Appotronics Holdings Limited
Principal or legal representative LI Yi
105 / 311
Annual Report 2020
Date of establishment January 17, 2014
Main business Investment holding
Shares held in other domestic or
foreign listed companies during the None
reporting period
Other information N/A
2 Natural person
□ Applicable√ N/A
3 Special explanation if the Company does not have a controlling shareholder
□ Applicable√ N/A
4 Reference to and date of change in the controlling shareholder during the reporting period
□ Applicable√ N/A
5 Block diagram of the controlling shareholder’s ownership of and control over the Company
√ Applicable□ N/A
Appotronics
Holdings
Appotronics
(II) Actual controller
1 Legal person
□ Applicable√ N/A
2 Natural person
√ Applicable□ N/A
Name LI Yi
Nationality China
Whether or not have right of
residence in any other country or Yes
region
Main occupation and title Chairman of Appotronics
Whether or not control any domestic
or foreign listed company in the past None
10 years
106 / 311
Annual Report 2020
3 Special explanation if the Company does not have an actual controller
□ Applicable√ N/A
4 Reference to and date of change in the actual controller during the reporting period
□ Applicable√ N/A
5 Illustration of shareholding and controlling relation between the Company and its ultimate
controlling shareholder
√ Applicable□ N/A
LI Yi
Appotronics Yuanshi Appotronics Appotronics Jinleijing Appotronics
Holdings Daye Hongye Chengye
Appotronics
6 The actual controller controls the Company by means of trust or other assets management
□ Applicable√ N/A
(III) Other information about the controlling shareholder and the actual controller
□ Applicable√ N/A
V. Other corporate shareholders holding more than 10% shares
√ Applicable□ N/A
In RMB
Regis Main
Date of
Principal or legal Organizati tered business or
Corporate shareholder establishme
representative on code capita management
nt
l activity
SAIF IV Hong Kong (China YAN Yan, August 9, Equity
N/A N/A
Investments) Limited PakTaoWan 2013 investment
Explanation N/A
VI. Restrictions on the disposal of shares/depository receipts
□ Applicable√ N/A
VII. Implementation of and changes in arrangements relating to depository receipts during the
reporting period
□ Applicable√ N/A
107 / 311
Annual Report 2020
VIII.Shares with special voting rights
□ Applicable√ N/A
108 / 311
Annual Report 2020
Section VII Preferred Shares
□ Applicable√ N/A
109 / 311
Annual Report 2020
Section VIII Directors, Supervisors, Senior Officers and Employees
I. Changes in shareholding and remunerations
(I) Changes in shareholding and remunerations of current directors, supervisors, senior officers and key technical staff and the former directors,
supervisors, senior officers and key technical staff who left the Company during the reporting period
√ Applicable□ N/A
Unit: Share
Total
remuneratio
Number n (inclusive Whether or
Number
of shares of tax) not receive
Beginning Expiry of shares
Whether key held as Change in received any
Title Gend date of date of held as Cause of
Name technical Age at shareholdi from the remuneration
(Note) er term of term of at change
staff Decembe ng Company from any
office office January
r 31, during the affiliate of
1, 2020
2020 reporting the Company
period (in
RMB 0’000)
Chairman
of the
Board of
July 18, July 17,
LI Yi Directors Yes Male 50 / / / / 319.39 No
2018 2021
& key
technical
staff
YAN July 18, July 17,
Director No Male 64 / / / / 10.00 Yes
Yan 2018 2021
July 18, July 17,
WU Bin Director No Male 50 / / / / 0.00 Yes
2018 2021
Director
BO
& July 18, July 17, Share
Lianmin No Male 58 0 30,000 30,000 332.40 No
General 2018 2021 incentive
g
Manager
NING Independ July 18, July 17,
No Male 55 / / / / 17.00 No
Xiangdo ent 2018 2021
110 / 311
Annual Report 2020
ng director
Independ
TANG July 18, July 17,
ent No Male 58 / / / / 17.00 No
Guliang 2018 2021
director
Independ
ZHANG July 18, July 17,
ent No Male 45 / / / / 17.00 No
Wei 2018 2021
director
Deputy
July 18, July 17, Share
WU Bin General No Male 56 0 30,000 30,000 100.05 No
2018 2021 incentive
Manager
Deputy
General
Manager July 18, July 17, Share
HU Fei Yes Male 40 0 30,000 30,000 157.68 No
& key 2018 2021 incentive
technical
staff
Deputy
July 18, July 18, Share
LI Lu General No Male 50 0 30,000 30,000 142.56 No
2018 2021 incentive
Manager
ZHAO Financial July 18, July 17, Share
No Male 43 0 15,000 15,000 70.27 No
Ruijin Director 2018 2021 incentive
Board Fema May 19, July 17, Share
YAN Li No 37 0 15,000 15,000 58.29 No
Secretary le 2020 2021 incentive
Chairman
of the
GAO Fema July 18, July 17,
Board of No 41 / / / / 96.99 No
Lijing le 2018 2021
Superviso
rs
LIANG Superviso July 18, July 17,
No Male 50 / / / / 52.35 No
Rong r 2018 2021
WANG Superviso Fema July 18, July 17,
No 44 / / / / 39.40 No
Yanyun r le 2018 2021
Key
Share
YU Xin technical Yes Male 41 / / 0 15,000 15,000 76.96 No
incentive
staff
111 / 311
Annual Report 2020
Key
WU Share
technical Yes Male 46 / / 0 9,000 9,000 53.74 No
Xiliang incentive
staff
Key
WANG Share
technical Yes Male 40 / / 0 15,000 15,000 58.03 No
Lin incentive
staff
Key
GUO Share
technical Yes Male 31 / / 0 12,000 12,000 64.10 No
Zuqiang incentive
staff
Former
ZENG Deputy April 16, January
No Male 45 / / / / 9.89 No
Luhai General 2019 23, 2020
Manager
Former
Board
XIAO Secretary July 18, May 19,
No Male 37 / / / / 22.84 No
Yangjian & Deputy 2018 2020
General
Manager
Total / / / / / / / 201,000 201,000 / 1,715.94 /
Note: The table above shows shares directly held by the directors, supervisors, senior officers, and key technical staff personally in the Company.
At the end of the reporting period, indirect shareholding is as follows: LI Yi holds shares as described in “Section VI IV (II) Actual controller”; YAN Yan
holds shares in the Company indirectly through Light Zone; BO Lianming holds shares in the Company by directly and indirectly holding shares in Appotronics
Daye; WU Bin holds shares in the Company indirectly through Appotronics Hongye, Liansong Capital, and Jinleijing; HU Fei, GAO Lijing, LIANG Rong, WANG
Yanyun, and WU Xiliang hold shares in the Company through Appotronics Hongye and by indirectly holding shares in Appotronics Daye; ZHAO Ruijin holds
shares in the Company by indirectly holding shares in Appotronics Daye; YU Xin and GUO Zuqiang hold shares in the Company indirectly through Appotronics
Daye; WANG Lin holds shares in the Company indirectly through Appotronics Hongye. No change occurred to the indirect shareholding above during the reporting
period. During the reporting period, LI Yi, BO Lianming, WU Bin, LI Lu, and GAO Lijing participated in the IPO strategic allotment through “Jiayuan I”.
Name Main work experience
Mr. LI Yi holds a bachelor’s degree from Tsinghua University, and a master’s degree and a doctor’s degree from the University of Rochester. He
LI Yi was previously CTO of O-Net Communications (HK) Limited. In October 2006, LI Yi founded Appotronics Corporation Ltd. He has served as
Chairman of the Company since December 2010.
112 / 311
Annual Report 2020
Mr. YAN Yan holds a master’s degree from Princeton University. He was previously Economist of Washington Headquarter of the World Bank,
researcher of American Thinker Hudson Institute, Director of Strategic Planning and Business Development of Sprint International Corporation in
YAN Yan Asia Pacific, Managing Director of Emerging Markets Partnership in the Management Company of AIG Asian Infrastructure Investment Fund and
Director of Hong Kong Office. He has served as Founding Managing Partner of SAIF Partners since October 2001. He has been a Director of the
Company since December 2016.
Mr. WU BIN holds a master’s degree from Stanford University. He was previously Global Associate Director of McKinsey & Company and Chief
WU Bin Inspector of Legend Holdings Corporation. He has served as Managing Director of CITIC Private Equity Funds since 2010. He has been a Director
of the Company since December 2016.
Mr. BO Lianming holds a doctor’s degree from Xi’an Jiaotong University. He was previously Chief Accountant of Shenzhen Airlines Co., Ltd.,
President and CEO of Shenzhen Chinastar Optoelectronic Co., Limited, Director and President of TCL Technology Group Corporation and
BO Lianming Chairman and CEO of TCL Multimedia Technology Holdings Limited. He joined the Company in March 2018, responsible for the management
and operation of the Company. He has been a Director and General Manager of the Company since July 2018, and Legal Representative of the
Company since December 2018.
Mr. NING Xiangdong holds a doctor’s degree from Tsinghua University. He previously served as teaching assistant, lecturer and associate
NING professor at Tsinghua University and Executive Deputy Director of National Center for Economic Research, Tsinghua University, and currently is a
Xiangdong professor and doctoral tutor of Tsinghua University, School of Economic and Management. He has been an independent director of the Company
since July 2018.
Mr. TANG Guliang holds a doctor’s degree from Chinese Academy of Fiscal Sciences. He previously served as Dean and professor of Beijing
TANG Technology and Business University, School of Accounting (formerly known as Beijing College of Commerce), and currently is a professor and
Guliang doctoral tutor of the Business School, University of International Business and Economics. He has been an independent director of the Company
since July 2018.
Mr. ZHANG Wei holds a doctor’s degree from Indiana University. He was previously Legal Director of Legend Holdings Corporation and General
ZHANG Wei Manager of the Legal Affairs Department of China Vanke Co., Ltd. He has served as Vice President, Legal Affairs of Qifei International
Development Co., Limited since February 2019. He has been an independent director of the Company since July 2018.
Mr. WU Bin holds a master’s degree from Party School of the CPC. He was previously a non-executive director of Shenzhen Gotonly Investment
WU Bin
Ltd. and Vice President of Shenzhen Lighting Institute. He has been Deputy General Manager of the Company since October 2018.
Mr. HU Fei holds a bachelor’s degree and a master’s degree from Tsinghua University and a master’s degree from Rensselaer Polytechnic Institute.
He was previously a software engineer at Optical Research Associates, and Deputy President, R&D of Shenzhen YLX Technology Development
HU Fei
Co., Ltd. and Appotronics Ltd. He has served as CTO of the Company since February 2018, and Deputy General Manager of the Company since
July 2018.
Mr. LI Lu holds a master’s degree from Cheung Kong Graduate School of Business. He was previously Deputy President of TCL Multimedia
Technology Holdings Limited., General Manager of TCL (China) Sales Company, and General Manager of White Goods Business Division of TCL
LI Lu
Technology Group Corporation. He has been Deputy General Manager of the Company since October 2018, and Legal Representative and
Chairman of Formoive since December 2018.
Mr. ZHAO Ruijin holds a master’s degree from Peking University. He was previously Financial Manager of ZTE Corporation, Financial Director
ZHAO Ruijin
and Assistant to General Manager of Shenzhen ZNV Technology Co., Ltd. He joined the Company in February 2018 as Director of the Department
113 / 311
Annual Report 2020
of Financial Management, and has been Financial Director of the Company since July 2018.
Ms. YAN Li, Chinese, holding no overseas permanent residence rights, holds a bachelor’s degree. She previously worked as the securities affairs
YAN Li representative at Midea Appliances (000527) and Midea Group (000333), and board secretary at Yinghe Technology (300457). She joined
Appotronics in May 2017, and has been working as the Board Secretary since May 2020.
Ms. GAO Lijing holds a bachelor’s degree from Tianjin University of Technology and Education. She previously worked at Southern China IP
Office of Foxconn Technology Group, and Center for IP and Legal Affairs of Netac Technology Co., Ltd. She has served as a supervisor of Netac
GAO Lijing
Technology Co., Ltd. from 2008 to 2020, and Director of IP and Legal Department of the Company since May 2017, and a Supervisor of the
Company since July 2018.
Mr. LIANG Rong holds a master’s degree from Shanghai University of Finance and Economics. He joined the Company in 2013, and served as
LIANG Rong Assistant to Chairman of Appotronics Ltd. He has been Director of Public Affairs of the Company since March 2018, and a Supervisor of the
Company since November 2017.
WANG Ms. WANG Yanyun holds a bachelor’s degree from Tianjin University of Commerce. She has been a senior manager of the Company since July
Yanyun 2013, and a Supervisor of the Company since July 2018.
Mr. YU Xin holds a doctor’s degree from Tsinghua University. He was previously a senior software engineer at Schlumberger Ltd. and senior
YU Xin researcher at Shenzhen Lighting Institute. He has been a senior researcher and Software Director of the R&D Center of the Company since February
2018.
Mr. WU Xiliang holds a bachelor’s degree from Huazhong University of Science and Technology. He served as R&D Manager and Technology
WU Xiliang
Director of the Company between 2007 and 2016, and has been Deputy General Manager of Formoive since 2016.
Mr. WANG Lin holds a bachelor’s degree from University of Science and Technology of China, a master’s degree from Tsinghua University, and a
WANG Lin doctor’s degree from Universidad Politécnica de Madrid. He was previously a senior optical engineer at Shanghai Phillips Lighting (China)
Investment Co., Ltd. He has been a senior optical research of the Company since February 2017.
GUO Mr. GUO Zuqiang holds a master’s degree from Tsinghua University. He was previously an optical engineer at Shenzhen YLX Technology
Zuqiang Development Co., Ltd. He has been R&D Manager of the Company since March 2017.
Other information
□ Applicable√ N/A
(II) Share incentives granted to directors, senior officers and key technical staff during the reporting period
1. Share options
□ Applicable√ N/A
2. Type I restricted shares
□ Applicable√ N/A
3. Type II restricted shares
√ Applicable□ N/A
Unit: Share
114 / 311
Annual Report 2020
Number of Number of Number of
Market price
restricted shares Number of restricted restricted Number of
Exercise price of as of the end
already granted restricted shares shares that shares restricted shares
the restricted of the
Name Title as at the granted during could be actually already granted as
shares granted reporting
beginning of the reporting vested in the vested in the of the end of the
(RMB per share) period (RMB
the reporting period reporting reporting reporting period
per share)
period period period
Director &
BO
General 100,000 0 17.425 30,000 30,000 70,000 18.55
Lianming
Manager
Deputy General
WU Bin 100,000 0 17.425 30,000 30,000 70,000 18.55
Manager
Deputy General
HU Fei Manager & 100,000 0 17.425 30,000 30,000 70,000 18.55
CTO
Deputy General
LI Lu 100,000 0 17.425 30,000 30,000 70,000 18.55
Manager
ZHAO Financial
50,000 0 17.425 15,000 15,000 35,000 18.55
Ruijin Director
YAN Li Board Secretary 50,000 100,000 17.425 15,000 15,000 135,000 18.55
Key technical
YU Xin 50,000 0 17.425 15,000 15,000 35,000 18.55
staff
Key technical
WANG Lin 50,000 0 17.425 15,000 15,000 35,000 18.55
staff
GUO Key technical
40,000 0 17.425 12,000 12,000 28,000 18.55
Zuqiang staff
WU Key technical
30,000 0 17.425 9,000 9,000 21,000 18.55
Xiliang staff
Total / 670,000 100,000 / 201,000 201,000 569,000 /
II. Posts held by current directors, supervisors and senior officers and the former directors, supervisors and senior officers who left the Company during
the reporting period
(I) Posts held at corporate shareholders of the Company
√ Applicable□ N/A
Name Corporate shareholder Posts held at corporate Beginning date of Expiry date of
115 / 311
Annual Report 2020
shareholder term of office term of office
Executive Director & General
LI Yi Shenzhen Appotronics Holdings Limited January 2014 /
Manager
Representative of Managing
LI Yi Shenzhen Appotronics Daye Investment Partnership (LP) October 2016 /
Partner
Representative of Managing
LI Yi Shenzhen Appotronics Hongye Investment Partnership (LP) December 2015 /
Partner
Representative of Managing
LI Yi Shenzhen Jinleijing Investment Limited Partnership (LP) October 2016 /
Partner
Shenzhen Yuanshi Laser Industrial Investment Consulting Representative of Managing
LI Yi June 2016 /
Partnership (LP) Partner
Representative of Managing
LI Yi Shenzhen Appotronics Chengye Consulting Partnership (LP) July 2017 /
Partner
LI Yi Blackpine Investment Corp. Limited Director September 2018 /
YAN Yan SAIF IV Hong Kong (China Investments) Limited Director August 2013
YAN Yan Light Zone Limited Director March 2017
WU Bin Beijing Panmao Consulting Co., Ltd. Managing Director January 2010
Explanation about
the posts held at
corporate None
shareholders of the
Company
(II) Posts held at other entities
√ Applicable□ N/A
Beginning date of Expiry date of
Name Other entity Posts held at other entity
term of office term of office
Representative of Managing
LI Yi Shenzhen Appotronics Deye Consulting Partnership (LP) May 2018
Partner
LI Yi CINIONIC Director November 2018
Executive Director & General
LI Yi Shenzhen Appotronics Technical Consulting Co., Ltd. October 2017
Manager
LI Yi Jiangsu Yisheng Technology Co., Ltd. Chairman September 2017
LI Yi Shenzhen YLX Technology Development Co., Ltd. Chairman January 2007
LI Yi Shenzhen Qingda Yifeng Equity Investment Fund General Manager & Executive January 2017
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Annual Report 2020
Management Enterprise (LP) Director
Shenzhen Qingda Yifeng Investment Consulting Partnership
LI Yi Managing Partner October 2016
(LP)
LI Yi Shenzhen Lighting Institute Director & Sponsor November 2016 October 2019
LI Yi APEX Fund Managed Limited Director November 2013
LI Yi Atria Light Ltd. Director April 2018
LI Yi Atria Light Hong Kong Limited Director April 2018
LI Yi Long Pine Investment Ltd. Director September 2016
LI Yi Longpines Financial Investment Ltd. Director May 2018
LI Yi YLX (Hong Kong) Limited Director June 2008
LI Yi WeCast Technology Corp. Executive Director August 2020
YAN Yan SAIF Partners Founding Managing Partner October 2001
YAN Yan Atria Light Ltd. Director May 2018
SAIF Investment Management Consulting (Shanghai) Co.,
YAN Yan General Manager June 2002
Ltd.
Beijing Daotong Changjing Investment Management Center Representative of Managing
YAN Yan July 2011
(LP) Partner
Representative of Managing
YAN Yan Beijing SAIF Chuangyuan Investment Center (LP) August 2010
Partner
Representative of Managing
YAN Yan Beijing SAIF Hongyuan Investment Center (LP) October 2010
Partner
Representative of Managing
YAN Yan Beijing SAIF Ruiyi Investment Management Center (LP) July 2012 August 2019
Partner
Representative of Managing
YAN Yan Beijing SAIF Ruizhi Investment Center (LP) July 2012 August 2019
Partner
Representative of Managing
YAN Yan Beijing SAIF Xiangrui Investment Center (LP) April 2010
Partner
Representative of Managing
YAN Yan Changzhou SAIF High-Tech Venture Capital Center (LP) December 2009
Partner
Guangzhou SAIF Guangdong Fortune Radio and Television Representative of Managing
YAN Yan December 2011
Network Investment Limited Partnership (LP) Partner
Representative of Managing
YAN Yan Hefei SAIF Heyuan Venture Capital Center (LP) January 2011
Partner
Qingdao Haier-Saifu Intelligent Family Venture Capital Representative of Managing
YAN Yan October 2014
Center (LP) Partner
117 / 311
Annual Report 2020
SAIF Songyuan (Shanghai) Equity Investment Fund Representative of Managing
YAN Yan September 2012
Partnership (LP) Partner
Representative of Managing
YAN Yan Xiamen SAIF Equity Investment Partnership (LP) August 2012
Partner
Representative of Managing
YAN Yan Xiamen SAIF Keyuan Equity Investment Partnership (LP) August 2012
Partner
Representative of Managing
YAN Yan Xiamen SAIF Xiayuan Equity Investment Partnership (LP) November 2013 May 2019
Partner
Representative of Managing
YAN Yan Tianjin SAIF Venture Capital Fund (LP) July 2008
Partner
Representative of Managing
YAN Yan Tianjin SAIF Composite Equity Investment Center (LP) May 2010
Partner
Representative of Managing
YAN Yan Tianjin SAIF Hanyuan Equity Investment Partnership (LP) June 2010
Partner
Representative of Managing
YAN Yan Tianjin SAIF Shengyuan Investment Management Center (LP) July 2008
Partner
Legal Representative &
YAN Yan Hefei SAIF Venture Capital Management Co., Ltd. Executive Director & General November 2010
Manager
Representative of Managing
YAN Yan Nanjing SAIF Hengzhun Venture Capital Fund (LP) July 2017
Partner
Independent Non-executive
YAN Yan China Resources Land Limited July 2006
Director
Legal Representative &
YAN Yan Shanghai SAIF Yanyuan Equity Fund Management Co. Ltd. Executive Director & General January 2013
Manager
Legal Representative &
YAN Yan Tianjin Himalaya Investment Consulting Co. Ltd. June 2008
Executive Director & Manager
Legal Representative &
YAN Yan Shanghai SAIF Xinpai Investment Management Co. Ltd. March 2014
Executive Director
Legal Representative &
YAN Yan Qingdao SAIF Investment Management Co. Ltd. September 2014
Chairman & General Manager
Changzhou SAIF High-Tech Venture Capital Management Legal Representative &
YAN Yan October 2009
Co. Ltd. Chairman
YAN Yan Tianjin SAIF Zhongyuan Investment Advisory Co. Ltd. Legal Representative & July 2008
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Annual Report 2020
Chairman
Shenzhen SAIF Qianyuan Equity Investment Fund Legal Representative &
YAN Yan August 2013
Management Co. Ltd. Chairman
YAN Yan TCL Technology Group Corporation Independent director March 2015 November 2020
YAN Yan Beijing Blue Focus Brand Management Co. Ltd. Independent director March 2014 May 2020
YAN Yan Beijing Softbank SAIF Investment Advisory Co., Ltd. Chairman February 2001
YAN Yan Huangshan SAIF Fund Management Co., Ltd. Chairman November 2016
YAN Yan Youth Happy (Beijing) Business Management Co., Ltd. Chairman July 2012
YAN Yan Shanghai TopxGun Robotics Co., Ltd. Chairman September 2015
YAN Yan CYPA (Beijing) Investment Management Co., Ltd. Chairman June 2012
Foreign Tribes (Beijing) Business Management Consulting
YAN Yan Chairman September 2012 September 2019
Co., Ltd.
YAN Yan Leqicheng Technology (Beijing) Co., Ltd. Vice Chairman June 2015 May 2019
YAN Yan Suzhou Beiang Technology Co., Ltd. Vice Chairman October 2013
YAN Yan Xi’an Maike Metal International Group Co., Ltd. Vice Chairman April 2014
YAN Yan Anqing SAIF Huanxin Auto Parts Co., Ltd. Director August 2015
YAN Yan SAIF IV Mauritius (China Investment) Ltd. Director July 2010
YAN Yan ATA Creativity Global Director March 2005
Anqing SAIF Huanxin Enterprise Management Consultant
YAN Yan Director November 2014
Co., Ltd.
YAN Yan Beijing Hanyuan Capital Management Co., Ltd. Director December 2015
YAN Yan Beijing Xiaodu Entertainment Technology Co., Ltd. Director January 2018
YAN Yan Guangdong Cable Co., Ltd. Director February 2017
YAN Yan Guangzhou SAIF Heyin Asset Management Co., Ltd. Director August 2013
Guodian Technology & Environmental Protection Group Co.,
YAN Yan Non-executive Director June 2012 August 2020
Ltd.
Heilongjiang Dazheng Derun Investment Management Co.,
YAN Yan Director February 2017
Ltd.
Heilongjiang Dazheng SAIF Investment Management Co.,
YAN Yan Director November 2009
Ltd.
YAN Yan Pacoo (Beijing) Technology Co., Ltd. Director September 2016
YAN Yan Xiamen SAIF Venture Capital Management Co., Ltd. Director February 2012
YAN Yan Shanghai Wenxi Enterprise Management Co., Ltd. Director June 2017
YAN Yan Shanghai Yingxun Technology Co., Ltd. Director August 2017
YAN Yan Shenzhen Orbbec Technology Co., Ltd. Director May 2018 August 2020
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Annual Report 2020
Xinyong Computing Information Technology (Shanghai) Co.,
YAN Yan Director September 2017
Ltd.
YAN Yan Zhejiang Daily Interaction Network Technology Co., Ltd. Director December 2015 May 2019
YAN Yan COFCO Haiyou Trading Co., Ltd. Director July 2013
YAN Yan COFCO Womai Investment Co., Ltd. Director November 2018
YAN Yan Khorgos Big Color Information Technology Co., Ltd. Director November 2018 July 2019
YAN Yan Shenzhen Digital Media Technology Co., Ltd. Director October 2018
YAN Yan Yinda International Holding Company Limited Director August 2014
YAN Yan Wisers Information Holdings Company Limited Director May 2016
YAN Yan Haier Smart Home Co., Ltd. Director June 2019 November 2020
YAN Yan Shanghai Welltech Automation Co., Ltd. Director June 2019 October 2020
YAN Yan 360 Finance, Inc. Independent director July 2019
YAN Yan COFCO Haiyou (Beijing) Co., Ltd. Director November 2018
YAN Yan COFCO Youcai Kitchen Food (Shanghai) Co., Ltd. Director November 2018
WU Bin Shaanxi Xifeng Liquor Co., Ltd. Director 2012 July 2020
Shaanxi Xifeng 15-Year and 6-Year Liquor Marketing Co.,
WU Bin Director 2013
Ltd.
WU Bin Hangzhou BroadLink Electronic Technology Co., Ltd. Director 2018
WU Bin Pine Medical Limited Director 2019
WU Bin Hong Kong Excellence Limited Director 2019
NING
Tsinghua University Professor & Doctoral Tutor 1990
Xiangdong
NING
Weichai Power Co., Ltd. Independent director June 2018
Xiangdong
NING
Sinopec Sales Co., Ltd. Independent director December 2018
Xiangdong
NING
China Life Asset Management Co., Ltd. Independent director March 2018
Xiangdong
NING
Sinochem Energy Co., Ltd. Independent director August 2018
Xiangdong
NING
Xiamen Bank Co., Ltd. Director July 2017
Xiangdong
NING
Shandong Heavy Industry Group Co., Ltd. Director January 2018
Xiangdong
TANG Guliang University of International Business and Economics Professor March 2006
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Annual Report 2020
TANG Guliang China JIC Leasing Co., Ltd. Independent director April 2017
TANG Guliang Three Gorges Capital Holdings Co., Ltd. Independent director February 2018
TANG Guliang Shanghai Fosun Pharmaceutical (Group) Co., Ltd. Independent director March 2019
TANG Guliang Jointown Pharmaceutical Group Co., Ltd. Independent director November 2020
ZHANG Wei Qifei International Development Co. Limited Deputy President, Legal Affairs February 2019
ZHANG Wei AVIC Vanke Co., Ltd. Director January 2018
ZHANG Wei Hengqin Vanke Cloudland Commercial Services Co., Ltd. Director & General Manager May 2017
ZHANG Wei Shenzhen Yingda Investment Fund Management Co., Ltd. Director April 2016 August 2020
ZHANG Wei Tian’an Xincheng Development (Hengqin) Co., Ltd. Director July 2017
ZHANG Wei Shenzhen Wanhu Management Consulting Co., Ltd. Supervisor November 2017
Shenzhen Wanhu Quanyuan Management Consulting Co.,
ZHANG Wei Supervisor November 2017
Ltd.
ZHANG Wei Shenzhen Wanshuzhimiao Management Consulting Co., Ltd. Supervisor November 2017
ZHANG Wei Shenzhen Wanqing Management Consulting Co., Ltd. Supervisor November 2017
ZHANG Wei Shenzhen Wanmazhengxian Management Consulting Co., Ltd. Supervisor November 2017
ZHANG Wei Dongguan Vanke Real Estate Co., Ltd. Supervisor October 2015
ZHANG Wei Lijiang Banyan Tree Property Services Co., Ltd. Director May 2018
ZHANG Wei Lijiang Banyan Tree Hotel Co., Ltd. Director March 2018
ZHANG Wei Lijiang Banyan Tree International Travel Agency Co., Ltd. Director March 2018
ZHANG Wei Lijiang Angsana Real Estate Development Co., Ltd. Director July 2018
ZHANG Wei Huangshan Banyan Tree Property Management Co., Ltd. Director September 2018
ZHANG Wei Huangshan Banyan Tree Tourism Development Co., Ltd. Director September 2018
ZHANG Wei Chengdu Banyan Tree No. 1 Real Estate Co., Ltd. Director June 2018
ZHANG Wei Chengdu Banyan Tree No. 3 Real Estate Co., Ltd. Director June 2018
ZHANG Wei Chengdu Banyan Tree No. 4 Real Estate Co., Ltd. Director June 2018
ZHANG Wei Beijing 6.cn Technology Co., Ltd. Director December 2019 August 2020
ZHANG Wei 360 Security Technology Inc. Vice President February 2019
ZHANG Wei 360 Technology Group Co., Ltd. Director January 2021
ZHANG Wei Tianjin 360 Technology Development Co., Ltd. Director February 2021
ZHANG Wei Hangzhou Qifei Huachuang Technology Co., Ltd. Director January 2021
Executive Director & Manager
ZHANG Wei Shanghai Jiehu Network Technology Co., Ltd. January 2021
& Legal Representative
ZHANG Wei Shanghai 360 Changfeng Technology Co., Ltd. Director & Legal Representative November 2020
ZHANG Wei Shenzhen Zhuoying Technology Co., Ltd. Director June 2020
ZHANG Wei Lida Lianma (Zhuhai) Equity Investment Management Co., Director July 2020
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Annual Report 2020
Ltd.
ZHANG Wei Dongguan Vanke City Development Co., Ltd. Supervisor October 2015
ZHANG Wei Yangshuo Banyan Tree Hotel Co., Ltd. Director September 2018
ZHANG Wei Zhenro Services Group Co., Ltd. Director June 2020
GAO Lijing Netac Technology Co., Ltd. Supervisor January 2008 July 2020
LIANG Rong Shanghai QianKun Photoelectric Technology Co., Ltd. Supervisor May 2015 April 2019
WU Bin Shenzhen Shangzuo Charity Foundation Secretary-General November 2015
WU Bin Shenzhen Lighting Institute Director November 2016
Explanation
about the posts
None
held at other
entities
III. Remunerations of directors, supervisors, senior officers and key technical staff
√ Applicable□ N/A
In RMB 0’000
Pursuant to the Company’s Articles of Association, the Compensation and Performance Assessment Committee
consider and review the compensation policy and proposal for directors and senior officers; the compensation
Decision-making procedure regarding the
proposal for senior officers is implemented after being approved by the Board of Directors; the compensation
remunerations of directors, supervisors and
proposal for directors is implemented after being adopted by the Board of Directors and then approved by the
senior officers
general meeting of shareholders; and the compensation proposal for supervisors is implemented after being
adopted by the Board of Supervisors and then approved by the general meeting of shareholders.
The Company’s directors and supervisors who hold posts in the Company shall receive remunerations for such
posts pursuant to the relevant provisions of the Company, but will not receive remunerations in their capacity as
director or supervisor. Each independent director will receive a fixed amount of director’s emoluments.
Basis for determining the remunerations of Non-independent directors not holding posts in the Company will receive director’s emoluments pursuant to the
directors, supervisors and senior officers compensation proposal approved by the general meeting of shareholders. Remunerations paid to senior officers
comprise salaries and bonuses, where the salaries are paid on a monthly basis according to the ranks and duties
of the senior officers, and the bonuses are paid according to the operating results of the Company and their
performance in the given year.
Remunerations actually paid to directors, During the reporting period, the remunerations actually paid to directors, supervisors and senior officers are
supervisors and senior officers consistent with the relevant information disclosed by the Company.
Total remunerations paid to directors, 1,463.12
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Annual Report 2020
supervisors and senior officers as of the
end of the reporting period
Total remunerations paid to key technical staff
729.91
as of the end of the reporting period
Note: Dr. LI Yi, Chairman of the Company, and Dr. HU Fei, Deputy General Manager of the Company, are key technical staff of the Company, and the
remunerations actually paid to key technical staff at the end of the reporting period contain their remunerations.
IV. Changes in directors, supervisors, senior officers and key technical staff
√ Applicable□ N/A
Name Position Change Cause of change
ZENG Luhai Deputy General Manager Left the Company Personal career development
XIAO Yangjian Board Secretary & Deputy General Left the Company Personal reason
Manager
V. Penalties imposed by the securities regulatory authorities in the past three years
□ Applicable√ N/A
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Annual Report 2020
VI. Employees of the parent company and major subsidiaries
(I) Employees
Number of active employees of the parent company 858
Number of active employees of major subsidiaries 312
Total number of active employees 1,170
Number of retired employees for whom the parent 2
company and major subsidiaries need to pay certain
expenses
Profession
Category Current period Previous period
Production staff 492 473
Sales staff 138 166
R&D staff 369 387
Financial staff 35 33
Management staff and 136 187
administrative staff
Total 1,170 1,246
Education
Level of education Current period Previous period
Doctor 24 29
Master 158 154
Undergraduate 458 486
College or below 530 577
Total 1,170 1,246
(II) Compensation policy
√ Applicable□ N/A
In order to ensure the market competitiveness externally and fairness internally of our
remunerations, on the principle of performance-based distribution to create and share corporate value
and improve the effectiveness of employee incentives, we have designed a compensation system based
on post, capability and performance, according to the design concept and approaches of international
compensation system, and by reference to the compensation level on the market. Our compensation
system is based on position hierarchy, wherein different positions and ranks correspond to different
levels of compensation, so that the employees’ compensation corresponds to the value of their position
and their capability and experience. The employees’ overall compensation is linked to their performance
and contribution to the Company, thereby establishing a performance-based compensation and incentive
system. In addition to fixed salaries and bonuses, our employees enjoy a variety of benefits. We adjust
the salaries of all employees or promote certain employees to higher ranks or positions or adjust the
salaries of certain employees every year according to the compensation level on the market, changes in
the ranks of employees, performance and other relevant factors.
(III) Training programs
√ Applicable□ N/A
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Annual Report 2020
We gradually improved the talent development system, including the “Star Light Program” for the
development of college graduates, the “Sharp Light Program” for the development of grassroots
managers, and the “Polar Light Program” for the development of middle managers. The continuous
talent input and intensive culture inheritance in the training at both the primary and middle level
effectively support the stable development of the Company.
In 2020, the pandemic stimulated online learning and sharing internally. By applying the online
learning platform, combining various training forms, and integrating theory with practice in training, we
further enhance the three-level training and management system to integrate training programs at the
Company level, universal capability training at the central level, and field-specific capability training at
the department level, which received the employee satisfaction of 9 out of 10 scores. We organized 608
training sessions for a total of 16,500 training hours this year, which effectively meet the demands for
employee personal capability development and organization capability improvement. In 2020, we
intensified the efforts of improving the lecturer system - nearly 300 internal lecturers presented training
sessions for their departments or for other departments. The system of internal lecturers provides a stage
for backbone employees to share their knowledge and experience, and helps to cultivate the team
atmosphere of sharing with and learning from each other.
In 2021, we will further improve the training system - with the core objective of improving the
organization performance and product development intended for solving problems, we will empower
key personnels with capabilities to solve actual problems and develop various professional
knowledge/skill courses for backbone elites in various fields. With project-based capability development
and professional skill-based course learning, we will build a complete ecology chain of internal talent
provision within 2 years. With backbone talents trained internally combined with elites attracted
externally, we can build a hierarchical system consisting of outstanding talents with a reasonable
structure to promote the sustainable rapid development of the Company.
(IV) Outsourced workers
√ Applicable□ N/A
Total man-hours of outsourced workers 35,299 hours
Total remunerations paid to outsourced workers RMB 784,381.85
VII. Other information
□ Applicable√ N/A
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Annual Report 2020
Section IXCorporate Governance
I. Corporate governance
√ Applicable□ N/A
We have continuously improved our corporate governance structure and operated in strict
accordance with the requirement of the Company Law, the Securities Law and the relevant rules and
regulations of the CSRC and the SSE, taking into account our actual business situations, and established
a corporate governance structure comprising the general meeting of shareholders, the Board of Directors,
the Board of Supervisors and the management, and a mechanism in which the highest authority, the
decision-making body, the supervisory body and the management coordinate with and hold up each
other. We have established a sound corporate governance system, to effectively protect the interests of
investors.
(I) Shareholders and general meeting of shareholders
The general meeting of shareholders is the highest authority of the Company. During the reporting
period, we have convened and held general meetings of shareholders in strict accordance with our
Articles of Association (“AOA”), the Rules of Procedure of the General Meeting of Shareholders and
other applicable laws and regulations. The notices, convening, resolutions, voting, signing and
information disclosures in respect of the general meeting of shareholders comply with the relevant
provisions of the Company Law, the Securities Law, the CSRC and the SSE, and the resolutions of the
general meeting of shareholders are legal and valid. We have fully protected the rights of all
shareholders, especially the minority shareholders, and ensured that each shareholder can enjoy the right
to know and participate in the affairs of the Company and fully exercise his voting rights according to
law.
(II) Directors and the Board of Directors
The Board of Directors is the standing decision-making and management body of the Company,
and has set up four committees, namely the Strategy Committee, the Compensation and Performance
Assessment Committee, the Nomination Committee and the Audit Committee. During the reporting
period, the number of directors and the composition of the Board of Directors comply with the
requirements of the applicable laws and regulations and the AOA; the Board of Directors has exercised
its functions and powers in strict accordance with the requirements of the applicable laws and
regulations, the AOA, the Rules of Procedure of the Board of Directors, and the Work Regulations for
Independent Directors, and each director has been assiduous in his duties and actively received the
relevant trainings. In order to improve the objectivity and scientificness of the decisions made by the
Board of Directors, we have appointed the independent directors to participate in and supervise the
decision-making process of the Board of Directors. The independent directors have performed their
duties independently, actively safeguarded the interests of the Company and the shareholders, and
expressed their opinions on important and material matters of the Company. The committees of the
Board of Directors have fully exercised their relevant functions, to ensure that the Board of Directors
makes scientific and reasonable decisions for the Company.
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Annual Report 2020
(III) Supervisors and the Board of Supervisors
The Board of Supervisors is the supervisory body of the Company and comprises three supervisors.
The Board of Supervisors has exercised its functions and powers according to the procedures set forth in
the AOA and the Rules of Procedure of the Board of Supervisors, effectively supervised the legal and
regulatory compliance of the performance of duties by the financial staff, directors and senior officers of
the Company, and actively safeguarded the interests of the Company and the shareholders.
(IV) Management of information disclosures
During the reporting period, we have disclosed the relevant information truthfully, accurately,
promptly, fairly and completely, and duly performed our obligation of information disclosure in
accordance with the Rules Governing the Listing of Stocks on the Sci-tech Innovation Board of the
Shanghai Stock Exchange, the Administrative Measures for Information Disclosure by the Listed
Companies and other applicable laws and regulations, and our Information Disclosure Policy, to ensure
that all shareholders and other stakeholders have equal access to the information of the Company.
(V) Registration of insiders
During the reporting period, we have registered and filed the insiders in connection with the matters
disclosed in our regular reports in strict accordance with the applicable laws and regulations and our
Insider Management Policy.
During the reporting period, we have defined the respective responsibilities of the general meeting
of shareholders, the Board of Directors, the Board of Supervisors and the management. According to the
requirements of the Board of Directors, the management has continuously improved the management
cycle led by mechanism, guaranteed by system, guided by culture and supported by capacity. Our
management level and governance capability have been improved remarkably, providing further
assurance for our healthy and sustainable development. The directors, supervisors and senior officers
have been assiduous in their duties, and seriously exercised the rights and performed the obligations
under the Company Law and the AOA, to ensure the safe, steady and sustainable development of the
Company and safeguard the interests of the shareholders to the maximum extent practicable.
Control structure by agreement and other special arrangements in respect of corporate
governance
□ Applicable√ N/A
Explanation about the material deviations (if any) of the Company’s corporate governance from the
relevant requirements of the CSRC
□ Applicable√ N/A
II. General meetings of shareholders held
Reference to
resolutions Date of disclosure of
Session Date of meeting
published on the resolutions
designated website
Annual general meeting of
May 22, 2020 www.sse.com.cn May 23, 2020
shareholders in 2019
1st extraordinary general August 7, 2020 www.sse.com.cn August 8, 2020
127 / 311
Annual Report 2020
meeting of shareholders in
2020
2nd extraordinary general
meeting of shareholders in September 3, 2020 www.sse.com.cn September 4, 2020
2020
3rd extraordinary general
meeting of shareholders in November 13, 2020 www.sse.com.cn November 14, 2020
2020
Explanation about the general meetings of shareholders
√ Applicable□ N/A
All proposals submitted to the general meeting have been reviewed and passed.
III. Performance of duties by the directors
(I) Attendance by the directors of the meetings of the Board of Directors and shareholders
Attendanc
e of the
general
Attendance of the meetings of the Board of Directors meetings
of
sharehold
Whether ers
Director or not an Whether
Meetin
Name independe the
gs the Meetings General
nt director Meetin Meetin director
director attended meetings
gs gs Absen has been
should through of
attende attende ce absent
have communicati sharehold
d in d by times from two
attende on ers
person proxy consecuti
d in equipment attended
ve
2020
meetings
LI Yi No 8 2 6 0 0 No 4
YAN No 8 0 8 0 0 No 4
Yan
WU Bin No 8 1 7 0 0 No 4
BO No 8 2 6 0 0 No 4
Lianmin
g
NING Yes 8 0 8 0 0 No 4
Xiangdo
ng
TANG Yes 8 1 7 0 0 No 4
Guliang
ZHANG Yes 8 1 7 0 0 No 4
Wei
Explanation about absence from two consecutive meetings of the Board of Directors
□ Applicable√ N/A
Meetings of the Board of Directors held in 2020 8
Where: Face-to-face meetings 0
Meeting held through communication equipment 6
Meetings held both in the form of face-to-face 2
meeting and through communication equipment
128 / 311
Annual Report 2020
(II) Objections raised by the independent directors to matters of the Company
□ Applicable√ N/A
(III) Others
□ Applicable√ N/A
IV. Important opinions and suggestions put forward by the committees of the Board of Directors
during the reporting period and objections thereto (if any)
√ Applicable□ N/A
The Board of Directors has set up the Strategy Committee, the Audit Committee, the Compensation
and Performance Assessment Committee, and the Nomination Committee. Each committee has duly
exercised its functions in strict accordance with the AOA, the Rules of Procedure of the Board of
Directors, the rules of procedure of such committee and other relevant regulations. During the reporting
period, the Strategy Committee has held one meeting; the Audit Committee has held three meetings; the
Compensation and Performance Assessment Committee has held one meeting, and the Nomination
Committee has held one meeting. The members of each committee have actively attended the meetings
of such committee, been assiduous in their duties, duly exercised the functions and powers delegated by
the Board of Directors to such committee, put forward guidance and advice for the proper functioning of
such committee and the long-term development of the Company, and played active roles in improving
the corporate governance structure and promoting the development of the Company.
During the reporting period, the members of the Strategy Committee have seriously performed their
duties, fully communicated with the management of the Company with respect to the future
development direction, external investments and other affairs of the Company from the prospective of
their profession and put forward reasonable suggestions on the basis of the actual operations of the
company; the Audit Committee has duly exercised its functions, and played an active role in the
appointment of the auditor, review of regular financial reports, examination of related-party transactions,
establishment of internal controls, and other relevant affairs of the Company; the Compensation and
Performance Assessment Committee has assessed the performance of the senior officers of the Company,
examined the compensation proposal for the senior officers, and reviewed and expressed its opinions on
the 2019 restrictive share incentive plan of the Company; and the Nomination Committee has examined
the qualifications of the senior officers of the Company, and reviewed and expressed its opinions on the
criteria and procedures in respect of the appointment of the senior officers. Each committee of the Board
of Directors has duly performed the duty of care.
V. Risks of the Company identified by the Board of Supervisors
□ Applicable√ N/A
VI. Give an explanation if the Company cannot guarantee its dependence and ability to operate
independently due to its relationship with the controlling shareholder in business, personnel,
assets, organization, financial and other affairs
□ Applicable√ N/A
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Annual Report 2020
Solutions to horizontal competition with the Company (if any) and the relevant progress and subsequent
action plans
□ Applicable√ N/A
VII. Performance assessment mechanism for senior officers and the establishment and
implementation of incentive mechanism for senior officers during the reporting period
√ Applicable□ N/A
The remunerations of the senior officers comprise salaries and bonuses. The Compensation and
Performance Assessment Committee of the Board of Directors is responsible for formulating and
implementing the compensation proposal and performance assessment proposal for senior officers. The
compensation proposal for senior officers has been reviewed in accordance with the AOA and other
relevant corporate governance policies. During the reporting period, the remunerations paid to the senior
officers of the Company have been reviewed and approved by the Board of Directors. During the
reporting period, the senior officers have been assiduous in their duties in strict accordance with the
requirements of the Company Law and other applicable laws and regulations and the AOA, and
continuously enhanced internal management of the Company under the guidance of the Board of
Directors, to lay a solid foundation for future development of the Company.
VIII. Whether a self-assessment report on internal controls has been disclosed
√ Applicable□ N/A
For details, refer to the 2020 Assessment Report on Internal Controls of Appotronics Corporation
Limited disclosed on www.SSE.com.cn on April 24, 2021.
Explanation about material loopholes in internal controls during the reporting period
□ Applicable√ N/A
IX. Explanation about the auditor’s report on internal controls
√ Applicable□ N/A
For details, refer to the Audit Report on Internal Controls of Appotronics Corporation Limited
disclosed on www.SSE.com.cn on April 24, 2021.
Whether an auditor’s report on internal controls has been disclosed: Yes
Opinions in the audit report on internal controls: Standard unqualified opinion
X. Others
□ Applicable√ N/A
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Section X Corporate Bonds
□ Applicable√ N/A
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Section XIFinancial Report
I. Auditor's report
√ Applicable□ N/A
I. Opinion
We have audited the financial statements of Appotronics Corporation Limited
(hereinafter referred to as “Appotronics”), which comprise the consolidated and the Parent
Company's balance sheets as at December 31, 2020, and the consolidated and the Parent
Company's income statements, the consolidated and the Parent Company's statements of
cash flow and the consolidated and the Parent Company's statements of changes in owners'
equity for the year then ended, and the notes to the relevant financial statements.
In our opinion, the accompanying financial statements of Appotronics are prepared
and present fairly, in all material respects, the consolidated and the Parent Company's
financial position as of December 31, 2020, and the consolidated and the Parent Company's
results of operations and cash flows for the year then ended in accordance with Accounting
Standards for Business Enterprises.
II. Basis for opinion
We conducted our audit in accordance with Auditing Standards for Certified Public
Accounts of China. Our responsibilities under those standards are further described in the
“Auditors' Responsibilities for Audit of Financial Statements” section of our report. We are
independent of Appotronics Corporation in accordance with the code of ethics for Chinese
Certified Public Accountants, and we have fulfilled our other ethical responsibilities in
accordance with the Code. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
III. Key audit items
Key audit matters are those matters that, in our professional judgment, were of most
significance in our audit of the financial statements of 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, and we do not provide a separate opinion on these matters.
(I) Revenue recognition
1. Description
Details of relevant information are disclosed in V.38, VII.61, and XVI.6 of Section XI.
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Appotronics Corporation is mainly engaged in research, development, production,
sales and leasing of laser display core devices and complete equipment. In 2020, the
operating income of Appotronics Corporation amounted to RMB 1,948,884,176.83, of
which sales and other incomes were RMB 1,777,151,562.17, representing 91.19% of the
total operating income, and lease incomes were RMB 171,732,614.66, representing 8.81%
of the total operating income.
The specific methods for revenue recognition in the current period are as follows:
(1) Revenue from sales of goods
Revenue from sales of goods denotes contractual obligations to be performed at a time
point. Our sales include sales to the domestic market and sales to foreign markets.
Goods sold to the domestic market: 1) Under the direct sale model and the distribution
mode, the Company recognizes the revenue when the goods sent have been delivered to
customers with customers' receipt given to the Company. For goods sold attached with
return conditions, the Company recognizes the revenue according to the amount of the
consideration expected to be received by the Company on the basis of transferring goods to
the customer, and recognizes liabilities to write off the revenue according to the expected
amount to be refunded due to the return of goods; for goods required for installment and
inspection after sales, the Company recognizes the revenue when such goods have been
installed and inspected with customers' acceptance certificate given to the Company. If the
Company shares profits from sales of product to downstream end customers, the Company
recognizes the revenue at the goods price agreed between the parties upon the delivery of
goods to the customer and reconciliation, and recognizes shared revenue according to the
share profit reconciliation statement when the profits from sales of goods are realized. 2)
Under the commissioned sales mode, the Company recognizes the revenue when it receives
the list of commissioned sales from the customer.
Goods exported to overseas markets: The Company mainly adopts FCA for export of
goods. Under this mode, the Company recognizes revenue when it delivers goods at the
designated location with export customs clearance procedures completed.
(2) Other incomes
Other revenues of the Company denote contractual obligations to be performed at a
time point/during a specific period of time. For installation services provided by the
Company, the Company recognizes the revenue when it has completed the services and
received customers’ acceptance certificate; for repair and maintenance services provided by
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the Company, the Company recognizes the revenue when it has completed the services and
received payments; for patent license services provided by the Company, the Company
recognizes the revenue when the patent license is delivered; for technology development
services provided by the Company, the Company recognizes the revenue when it has
completed the services or when the agreed time point of service acceptance is reached.
(3) Lease incomes
The Company recognizes rents in profit or loss for the current period over the whole
lease term on a straight line basis. Contingent rents are recognized in profit or loss in the
period in which they are incurred.
As the operating income is one of Appotronics Corporation 's KPIs, there may be an
inherent risk that the management of Appotronics Corporation (hereinafter referred to as
"management”) may recognize the revenue inappropriately to achieve specific objectives or
expectations. Therefore, we identified revenue recognition as a key audit matter.
2. Description of how the key audit matter was addressed in the audit
For revenue recognition, our audit procedures include, inter alia:
(1) Understand the key internal controls related to revenue recognition, evaluate the
design of those controls, determine whether they are implemented, and test the operational
effectiveness of the relevant internal controls;
(2) Examine major sales contracts and lease contracts, understand the major provisions
or conditions thereof, and evaluate whether revenue recognition methods are appropriate;
(3) Implement analysis procedures for operating income and gross margin by month,
product, customer, etc., to identify whether there are significant or unusual fluctuations and
to find out the causes of such fluctuations;
(4) For sales income, sample supporting documents related to revenue recognition,
including sales contracts or orders, sales invoices, warehouse receipts, delivery notes,
transport information, customer signature forms, export declarations and electronic port
system information; for lease income, sample supporting documents including, among
other things, lease contracts, orders, installation orders, unit lease price per hour, and
number of hours consumed;
(5) In conjunction with accounts receivable confirmation procedures, send
confirmation to major customers to recognize the current incomes on a sample basis;
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(6) Conduct the cut-off test on the operating incomes recognized on or after the
balance sheet date to evaluate whether the operating incomes are recognized during the
appropriate period;
(7) Obtain a record of sales returns after the balance sheet date to check if there is any
instance that conditions for revenue recognition were not met at the balance sheet date;
(8) Check whether information relative to operating income is properly presented in
the financial statements.
(II) Net realizable value of inventories
1. Description
Details of relevant information are disclosed in V.15 and VII.9 of Section XI.
As of December 31, 2020, the carrying amount of inventories of Appotronics
amounted to RMB 449,109,297.76, and provisions for decline in value of inventories
amounted to RMB 30,297,156.96, hence the book value of inventories amounted to RMB
418,812,140.80.
At the balance sheet date, inventories are measured at the lower of cost and net
realisable value. If the net realisable value is below the cost of inventories, a provision for
decline in value of inventories is made. In view of the purpose of holding inventories, the
management determines the estimated selling price of inventories based on historical or
actual selling prices, and the net realizable value of inventories in accordance with the
balance of the estimated selling price less the sum of the estimated costs of completion and
the estimated costs necessary to make the sale and relevant taxes. The amount of
inventories is material and the determination of the net realizable value of inventories
involves significant management judgment, therefore, we identified the determination of
the net realizable value of inventories as a key audit matter.
2. Description of how the key audit matter was addressed in the audit
For the net realizable value of inventories, our audit procedures include, inter alia:
(1) Understand the key internal controls related to the net realizable value of
inventories, evaluate the design of those controls, determine whether they are implemented,
and test the operational effectiveness of the relevant internal controls;
(2) Review the management's forecast of the estimated selling price of inventories on
a sample basis, comparing the estimated selling price with historical data and subsequent
situations, etc.;
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(3) Evaluate the appropriateness of the management's estimates on the estimated costs
of completion of inventories and the estimated costs necessary to make the sale and
relevant taxes;
(4) Test the accuracy of the management's calculation on the net realizable value of
inventories;
(5) Evaluate the reasonableness of the management's estimates on the net realizable
value of inventories by checking inventories recognized at the end of the period in terms of
long age, obsolescence, changes in technology or market demand in conjunction with
inventory monitoring;
(6) Check whether information relative to the net realizable value of inventories is
properly presented in the financial statements.
IV. Other information
The management is responsible for other information. The other information
comprises the information included in the annual report, but does not include the financial
statements and our auditor's report thereon.
Our opinion on the financial statements does not cover the other information and we
do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read
the other information and, in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge obtained in the audit or
otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact. We have nothing
to report in this regard.
V. Responsibilities of the Management and governance with respect to the
financial statements
The management is responsible for the preparation and fair presentation of the
financial statements in accordance with Accounting Standards for Business Enterprises, and
designing, implementing and maintaining internal control that is necessary to enable the
financial statements that are free from material misstatement, whether due to fraud or error.
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In preparing the financial statements, the management is responsible for assessing
Appotronics’s ability to continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of accounting unless the
management either intends to liquidate Appotronics or to cease operations, or has no
realistic alternative but to do so.
Those charged with governance of Appotronics (hereinafter referred to as “Those
Charged with Governance”) are responsible for overseeing Appotronics’s financial
reporting process.
VI. Responsibilities of Certified Public Accountants with respect to the financial
statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to fraud or error,
and to issue an auditor's report that includes our opinion solely to you. 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 China Standards on Auditing, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:
(I) 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 that resulting from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal control.
(II) Obtain an understanding of internal control relevant to the audit in order to design
audit procedures that are appropriate in the circumstances.
(III) Evaluate the appropriateness of accounting policies used and the reasonableness
of accounting estimates and related disclosures made by the management.
(IV) Conclude on the appropriateness of the management's use of the going concern
basis of accounting. Meanwhile, based on the audit evidence obtained, whether a material
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uncertainty exists related to events or conditions that may cast significant doubt on
Appotronics Corporation's ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required by audit standards to draw users’ attention in
our auditor’s report to the related disclosures in the financial statements. If such disclosures
are inadequate, we are supposed to express an unqualified 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 Appotronics Corporation to cease to continue as a going
concern.
(V) Evaluate the overall presentation, structure and content of the financial statements,
and whether the financial statements represent the underlying transactions and events in a
manner that achieves fair presentation.
(VI) Obtain sufficient and appropriate audit evidence regarding the financial
information of the entities or business activities within Appotronics Corporation to express
an opinion on the financial statements. We are responsible for the direction, supervision
and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance 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 our audit.
We also provide those charged with governance with a statement that we have
complied with relevant ethical requirements regarding independence, and communicate
with them all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine
those matters that were of most significance in the audit of the financial statements of the
current period and are therefore the key audit matters. We describe these matters in our
auditor's report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
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Pan-China Certified Public Accountants (Special General Partnership)
Chinese Certified Public Accountant:
(Partner in Charge)
Hangzhou City, China Chinese Certified Public Accountant:
April 22, 2021
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II. Financial statements
Consolidated Balance Sheet
December 31, 2020
Prepared by: Appotronics Corporation Limited
In RMB
Item Note December 31, 2020 December 31, 2019
Current Assets:
Cash and bank balances 1 1,037,760,573.27 875,858,784.58
Balances with clearing
agencies
Placements with banks and
other financial institutions
Held-for-trading financial 2 114,000,000.00 540,000,000.00
assets
Derivative financial assets
Notes receivable 3 3,726,328.91 4,042,559.63
Accounts receivable 4 341,660,832.43 176,035,155.24
Receivables financing 5 11,959,000.00 1,980,500.00
Prepayments 6 47,447,601.43 35,070,999.13
Premiums receivable
Amounts receivable under
reinsurance contracts
Reinsurer’s share of
insurance contract reserves
Other receivables 7 12,534,062.15 9,618,750.08
Where: Interest receivable
Dividend receivable
Financial assets purchased
under resale agreements
Inventories 8 418,812,140.80 299,966,170.35
Contract assets 9 3,744,655.50
Assets held for sale
Non-current assets due within
one year
Other current assets 10 13,002,195.46 44,405,513.30
Total current assets 2,004,647,389.95 1,986,978,432.31
Non-current Assets:
Loans and advances
Debt investments
Other debt investments
Long-term accounts 11 13,196,087.78
receivable
Long-term equity investment 12 262,744,772.48 139,534,371.94
Investment in other equity 13 11,975,419.38 11,975,419.38
instruments
Other non-current financial
assets
Investment property
Fixed assets 14 447,571,328.91 471,204,340.95
Construction in progress 15 51,576,850.72 20,132,004.07
Productive biological assets
Oil and gas assets
Use right assets
Intangible assets 16 320,488,235.60 332,331,324.07
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Development expenditure
Goodwill
Long-term prepaid expenses 17 11,572,346.79 16,908,070.34
Deferred tax assets 18 96,132,114.02 109,023,941.85
Other non-current assets 19 6,299,781.06 11,420,185.94
Total non-current assets 1,221,556,936.74 1,112,529,658.54
Total assets 3,226,204,326.69 3,099,508,090.85
Current Liabilities:
Short-term borrowings 20 88,778,852.86 76,765,319.05
Loans from the central bank
Taking from banks and other
financial institutions
Held-for-trading financial
liabilities
Derivative financial liabilities
Notes payable 21 116,822,674.67 37,335,841.79
Accounts payable 22 226,494,815.90 176,624,445.46
Advance from customers 23 153,258,189.88 184,444,643.33
Contract liabilities 24 31,518,312.59
Financial assets sold under
repurchase agreements
Customer deposits and
deposits from banks and other
financial institutions
Funds from securities trading
agency
Funds from underwriting
securities agency
Employee benefits payable 25 46,105,566.15 50,586,932.71
Taxes payable 26 19,871,846.94 42,924,647.79
Other payables 27 59,848,053.83 14,364,076.43
Where: Interest payable
Dividend payable
Fees and commissions
payable
Amounts payable under
reinsurance contracts
Liabilities held for sale
Non-current liabilities due 28 181,417,412.46 64,968,795.02
within one year
Other current liabilities 29 3,045,831.07
Total current liabilities 927,161,556.35 648,014,701.58
Non-current Liabilities:
Insurance contract reserves
Long-term borrowings 30 64,845,281.53 279,615,107.27
Bonds payable
Where: Preferred shares
Perpetual bonds
Leasing liabilities
Long-term payables 31 3,262,450.00 3,488,100.00
Long-term employee benefits
payable
Estimated liabilities 32 28,799,354.65 27,072,676.49
Deferred income 33 16,723,257.15 17,108,361.69
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Annual Report 2020
Deferred tax liabilities
Other non-current liabilities
Total non-current 113,630,343.33 327,284,245.45
liabilities
Total liabilities 1,040,791,899.68 975,298,947.03
Owners’ Equity
(Shareholders’ Equity):
Paid-in capital (or share 34 452,756,901.00 451,554,411.00
capital)
Other equity instruments
Where: Preferred shares
Perpetual bonds
Capital reserve 35 1,249,020,991.15 1,207,942,318.37
Less: Treasury shares
Other comprehensive income 36 -3,214,291.93 3,287,063.85
Special reserve
Surplus reserve 37 35,242,179.57 22,800,224.13
General risk reserve
Undistributed profit 38 357,793,891.96 288,975,820.29
Total owners’ (or 2,091,599,671.75 1,974,559,837.64
shareholders’) equity
attributable to owners of the
parent company
Minority interests 93,812,755.26 149,649,306.18
Total owners’ (or 2,185,412,427.01 2,124,209,143.82
shareholders’) equity
Total liabilities and 3,226,204,326.69 3,099,508,090.85
owners’ (or shareholders’)
equity
Legal representative: BO Lianming
Chief Accountant: ZHAO Ruijin
Person in Charge of the Accounting Body: LIU Jie
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Annual Report 2020
Balance Sheet of the Parent Company
December 31, 2020
Prepared by: Appotronics Corporation Limited
In RMB
Item Note December 31, 2020 December 31, 2019
Current Assets:
Cash and bank balances 709,932,686.71 570,479,390.49
Held-for-trading financial 114,000,000.00 540,000,000.00
assets
Derivative financial assets
Notes receivable 2,314,628.91 3,542,559.63
Accounts receivable 1 567,539,506.79 299,315,776.44
Receivables financing 100,000.00 442,500.00
Prepayments 11,001,439.23 6,410,257.48
Other receivables 2 71,654,117.57 67,227,575.21
Where: Interest receivable
Dividend receivable
Inventories 169,022,971.44 135,617,379.22
Contract assets 3,720,160.50
Assets held for sale
Non-current assets due within
one year
Other current assets 1,297,388.01 12,280,164.39
Total current assets 1,650,582,899.16 1,635,315,602.86
Non-current Assets:
Debt investments
Other debt investments
Long-term accounts 13,196,087.78
receivable
Long-term equity investment 3 421,648,284.99 257,795,276.13
Investment in other equity 7,075,419.38 7,075,419.38
instruments
Other non-current financial
assets
Investment property
Fixed assets 57,409,189.33 60,391,512.92
Construction in progress 37,982,329.74 1,385,496.59
Productive biological assets
Oil and gas assets
Use right assets
Intangible assets 319,438,893.42 330,796,423.87
Development expenditure
Goodwill
Long-term prepaid expenses 9,562,162.36 12,771,126.83
Deferred tax assets 6,680,188.67 9,545,438.20
Other non-current assets 5,411,561.28 6,744,453.85
Total non-current assets 878,404,116.95 686,505,147.77
Total assets 2,528,987,016.11 2,321,820,750.63
Current Liabilities:
Short-term borrowings 11,410,560.27 10,217,738.36
Held-for-trading financial
liabilities
Derivative financial liabilities
Notes payable 32,313,678.21 37,335,841.79
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Annual Report 2020
Accounts payable 210,885,240.65 162,596,838.45
Advance from customers 2,688,210.54 11,116,659.11
Contract liabilities 20,609,190.34
Employee benefits payable 28,514,763.09 26,985,668.92
Taxes payable 5,830,858.89 1,534,242.70
Other payables 23,058,804.83 42,599,703.36
Where: Interest payable
Dividend payable
Liabilities held for sale
Non-current liabilities due 1,001,024.66
within one year
Other current liabilities 1,918,391.60
Total current liabilities 338,230,723.08 292,386,692.69
Non-current Liabilities:
Long-term borrowings 29,029,715.07
Bonds payable
Where: Preferred shares
Perpetual bonds
Leasing liabilities
Long-term payables 3,262,450.00 3,488,100.00
Long-term employee benefits
payable
Estimated liabilities 16,345,891.60 14,631,273.00
Deferred income 14,450,411.10 15,724,174.30
Deferred tax liabilities
Other non-current liabilities
Total non-current 63,088,467.77 33,843,547.30
liabilities
Total liabilities 401,319,190.85 326,230,239.99
Owners’ Equity
(Shareholders’ Equity):
Paid-in capital (or share 452,756,901.00 451,554,411.00
capital)
Other equity instruments
Where: Preferred shares
Perpetual bonds
Capital reserve 1,351,261,718.84 1,310,939,867.82
Less: Treasury shares
Other comprehensive income
Special reserve
Surplus reserve 33,964,638.84 21,522,683.40
Undistributed profit 289,684,566.58 211,573,548.42
Total owners’ (or 2,127,667,825.26 1,995,590,510.64
shareholders’) equity
Total liabilities and 2,528,987,016.11 2,321,820,750.63
owners’ (or shareholders’)
equity
Legal representative: BO Lianming
Chief Accountant: ZHAO Ruijin
Person in Charge of the Accounting Body: LIU Jie
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Annual Report 2020
Consolidated Income Statement
January to December 2020
In RMB
Item Note 2020 2019
I. Total operating income 1 1,948,884,176.83 1,979,148,918.89
Where: Operating income 1 1,948,884,176.83 1,979,148,918.89
Interest income
Premiums earned
Fee and commission income
II. Total operating costs 1,882,807,642.88 1,726,836,417.68
Where: Operating costs 1 1,393,075,043.93 1,183,650,635.25
Interest expenses
Fee and commission expenses
Surrenders
Claims and policyholder benefits
(net of amounts recoverable from
reinsurers)
Net withdrawal of insurance
contract reserves
Insurance policyholder dividends
Expenses for reinsurance accepted
Taxes and additions 2 6,718,744.79 7,610,151.14
Selling expenses 3 133,588,234.60 151,760,111.00
Administrative expenses 4 135,757,276.26 152,626,530.61
R&D expenses 5 204,443,369.10 201,697,766.26
Financial expenses 6 9,224,974.20 29,491,223.42
Where: Interest expense 20,066,451.02 33,120,484.94
Interest income 10,322,478.28 4,079,231.03
Add: Other income 7 45,255,000.90 34,124,614.12
Investment income (loss is 8 17,945,571.02 9,549,063.05
indicated by “-”)
Where: Income from investments -679,282.94 -3,927.93
in associates and joint ventures
Gains from derecognition of
financial assets at amortized assets
Foreign exchange gains (loss is
indicated by “-”)
Gains from net exposure hedges
(loss is indicated by “-”)
Gains from changes in fair values
(loss is indicated by “-”)
Losses of credit impairment (loss 9 -9,121,278.95 -3,771,572.38
is indicated by “-”)
Impairment losses of assets (loss 10 -11,590,694.43 -12,623,251.67
is indicated by “-”)
Gains from disposal of assets (loss 11 281,040.26 41,420.84
is indicated by “-”)
III. Operating profit (loss is indicated by 108,846,172.75 279,632,775.17
“-”)
Add: Non-operating income 12 4,638,435.10 3,926,066.73
Less: Non-operating expense 13 2,063,172.96 4,200,197.56
IV. Total profits (total losses are indicated 111,421,434.89 279,358,644.34
by “-”)
Less: Income tax expenses 14 24,764,236.32 54,982,221.63
V. Net profits (net losses are indicated by 86,657,198.57 224,376,422.71
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Annual Report 2020
“-”)
(I) Categorized by the continuity of operation
1. Net profits from continuing 86,657,198.57 224,376,422.71
operations (net losses are indicated by
"-")
2. Net profits from discontinued
operations (net losses are indicated by
“-”)
(II) Categorized by the ownership
1. Net profits attributable to 113,847,873.06 186,457,276.71
shareholders of the Parent Company (net
losses are indicated by "-")
2. Profits or losses attributable to -27,190,674.49 37,919,146.00
minority shareholders (net losses are
indicated by “-”)
VI. Other comprehensive income, net of 15 -6,496,909.69 2,311,885.81
tax
(I) Other comprehensive income that -6,501,355.78 2,242,360.85
can be attributable to owners of the Parent
Company, net of tax
1. Other comprehensive income that
cannot be reclassified subsequently to
profit or loss
(1) Changes from remeasurement of
defined benefit plans
(2) Other comprehensive income that
cannot be reclassified to profit or loss
under the equity method
(3) Changes in fair value of
investments in other equity instruments
(4) Changes in fair value of
enterprises’ own credit risks
2. Other comprehensive income that -6,501,355.78 2,242,360.85
will be reclassified to profit or loss
(1) Other comprehensive income that
will be reclassified to profit or loss under
the equity method
(2) Changes in fair value of other debt
investments
(3) Amount of financial assets
reclassified to other comprehensive
income
(4) Provision for credit impairment of
other debt investments
(5) Reserve for cash flow hedges
(6) Exchange differences on translation -6,501,355.78 2,242,360.85
of financial statements denominated in
foreign currencies
(7) Others
(II) Other comprehensive income that 4,446.09 69,524.96
can be attributable to minority
shareholders, net of tax
VII. Total comprehensive income 80,160,288.88 226,688,308.52
(I) Total comprehensive income that 107,346,517.28 188,699,637.56
can be attributable to owners of the Parent
Company
146 / 311
Annual Report 2020
(II) Total comprehensive income that -27,186,228.40 37,988,670.96
can be attributable to minority
shareholders
VIII. Earnings per share:
(I) Basic earnings per share 0.25 0.45
(RMB/share)
(II) Diluted earnings per share 0.25 0.45
(RMB/share)
In the event of business combinations involving enterprises under common control, the net profits
realized prior to the combination by the party being absorbed is: RMB 0, and the net profits realized in
the last period by the party being absorbed is: RMB 0.
Legal representative: BO Lianming
Chief Accountant: ZHAO Ruijin
Person in Charge of the Accounting Body: LIU Jie
147 / 311
Annual Report 2020
Income Statement of the Parent Company
January to December 2020
In RMB
Item Note 2020 2019
I. Operating income 1 1,064,149,969.51 1,070,365,243.34
Less: Operating costs 1 720,452,860.84 728,135,468.64
Taxes and additions 4,809,443.68 4,961,497.25
Selling expenses 68,169,938.33 82,052,362.77
Administrative expenses 94,065,391.84 104,579,027.77
R&D expenses 104,873,635.92 113,795,005.25
Financial expenses -16,982,053.25 -5,955,117.03
Where: Interest expense 432,518.40 4,340,274.90
Interest income 16,041,306.76 10,208,837.58
Add: Other income 34,560,094.28 13,016,565.69
Investment income (loss is 2 18,624,853.96 55,488,448.65
indicated by “-”)
Where: Income from
investments in associates and joint
ventures
Gains from
derecognition of financial assets at
amortized assets
Gains from net exposure
hedges (loss is indicated by “-”)
Gains from changes in fair
values (loss is indicated by “-”)
Losses of credit impairment -627,070.09 -1,682,540.09
(loss is indicated by “-”)
Impairment losses of assets -7,565,039.37 -11,985,107.53
(loss is indicated by “-”)
Gains from disposal of assets 1,318.53
(loss is indicated by “-”)
II. Operating profit (loss is indicated 133,754,909.46 97,634,365.41
by “-”)
Add: Non-operating income 4,409,022.52 3,686,726.20
Less: Non-operating expense 1,228,453.52 2,291,107.75
III. Total profits (total losses are 136,935,478.46 99,029,983.86
indicated by “-”)
Less: Income tax expenses 12,515,924.03 -2,015,128.17
IV. Net profits (net losses are indicated 124,419,554.43 101,045,112.03
by “-”)
(I) Net profits from continuing 124,419,554.43 101,045,112.03
operations (net losses are indicated by
“-”)
(II) Net profits from discontinued
operations (net losses are indicated by
“-”)
V. Other comprehensive income, net of
tax
(I) Other comprehensive income
that cannot be reclassified
subsequently to profit or loss
1. Changes from remeasurement
of defined benefit plans
2. Other comprehensive income
148 / 311
Annual Report 2020
that cannot be reclassified to profit or
loss under the equity method
3. Changes in fair value of
investments in other equity
instruments
4. Changes in fair value of
enterprises’ own credit risks
(II) Other comprehensive income
that will be reclassified to profit or
loss
1. Other comprehensive income
that will be reclassified to profit or
loss under the equity method
2. Changes in fair value of other
debt investments
3. Amount of financial assets
reclassified to other comprehensive
income
4. Provision for credit impairment
of other debt investments
5. Reserve for cash flow hedges
6. Exchange differences on
translation of financial statements
denominated in foreign currencies
7. Others
VI. Total comprehensive income 124,419,554.43 101,045,112.03
VII. Earnings per share:
(I) Basic earnings per share
(RMB/share)
(II) Diluted earnings per share
(RMB/share)
Legal representative: BO Lianming
Chief Accountant: ZHAO Ruijin
Person in Charge of the Accounting Body: LIU Jie
149 / 311
Annual Report 2020
Consolidated Cash Flow Statement
January to December 2020
In RMB
Item Note 2020 2019
I. Cash Flows from Operating
Activities:
Cash receipts from the sale of goods 1,974,492,309.02 2,141,322,935.57
and the rendering of services
Net increase in customer deposits and
deposits from banks and other financial
institutions
Net increase in loans from the central
bank
Net increase in taking from banks and
other financial institutions
Cash receipts from premiums under
direct insurance contracts
Net cash receipts from reinsurance
business
Net cash receipts from policyholders’
deposits and investment contract
liabilities
Cash receipts from interest, fees and
commissions
Net increase in taking from banks
Net increase in financial assets sold
under repurchase arrangements
Net cash received from securities
trading agencies
Receipts of tax refunds 6,524,647.54 9,567,790.75
Other cash receipts relating to 1 140,364,333.47 78,562,934.95
operating activities
Subtotal of cash inflows from 2,121,381,290.03 2,229,453,661.27
operating activities
Cash payments for goods purchased 1,450,758,815.22 1,318,597,298.92
and services received
Net increase in loans and advances to
customers
Net increase in balance with the central
bank and due from banks and other
financial institutions
Cash payments for claims and
policyholders' benefits under direct
insurance contracts
Net increase in placements with banks
and other financial institutions
Cash payments for interest, fees and
commissions
Cash payments for insurance
policyholder dividends
Cash payments to and on behalf of 294,069,230.11 285,393,667.92
employees
Payments of various types of taxes 79,174,713.78 125,550,662.05
Other cash payments relating to 2 244,988,100.50 256,911,128.67
operating activities
Subtotal of cash outflows from 2,068,990,859.61 1,986,452,757.56
150 / 311
Annual Report 2020
operating activities
Net cash flow from operating 52,390,430.42 243,000,903.71
activities
II. Cash Flows from Investing
Activities:
Cash receipts from disposals and 2,704,000,000.00 1,312,700,000.00
recovery of investments
Cash receipts from investment income 18,624,853.96 9,552,990.98
Net cash receipts from disposals of 1,365,554.96 257,846.73
fixed assets, intangible assets and other
long-term assets
Net cash receipts from disposals of
subsidiaries and other business units
Other cash receipts relating to investing
activities
Subtotal of cash inflows from 2,723,990,408.92 1,322,510,837.71
investing activities
Cash payments to acquire or construct 66,273,509.36 243,918,747.78
fixed assets, intangible assets and other
long-term assets
Cash payments to acquire investments 2,436,196,580.78 1,851,450,000.00
Net increase in pledged loans
receivables
Net cash payments for acquisitions of 15,614,062.32
subsidiaries and other business units
Other cash payments relating to
investing activities
Subtotal of cash outflows from 2,518,084,152.46 2,095,368,747.78
investing activities
Net cash flows from investment 205,906,256.46 -772,857,910.07
activities
III. Cash Flows from Financing
Activities:
Cash receipts from capital 20,953,388.25 1,094,215,094.34
contributions
Where: Cash receipts from capital
contributions from minority shareholders
of subsidiaries
Cash receipts from borrowings 205,991,111.29 405,787,875.56
Other cash receipts relating to 3 19,320,000.00
financing activities
Subtotal of cash inflows from 246,264,499.54 1,500,002,969.90
financing activities
Cash repayments of borrowings 290,953,213.70 541,704,799.90
Cash payments for distribution of 54,437,838.70 34,285,290.48
dividends or profits or settlement of
interest expenses
Where: Payments for distribution of
dividends or profits to minority
shareholders of subsidiaries
Other cash payments relating to 4 39,396,048.75
financing activities
Subtotal of cash outflows from 345,391,052.40 615,386,139.13
financing activities
Net cash flows from financing -99,126,552.86 884,616,830.77
activities
151 / 311
Annual Report 2020
IV. Effect of Foreign Exchange Rate -5,434,532.44 2,521,113.05
Changes on Cash and Cash
Equivalents
V. Net Increase in Cash and Cash 153,735,601.58 357,280,937.46
Equivalents
Add: Opening balance of cash and cash 829,789,487.86 472,508,550.40
equivalents
VI. Closing Balance of Cash and Cash 983,525,089.44 829,789,487.86
Equivalents
Legal representative: BO Lianming
Chief Accountant: ZHAO Ruijin
Person in Charge of the Accounting Body: LIU Jie
152 / 311
Annual Report 2020
Cash Flow Statement of the Parent Company
January to December 2020
In RMB
Item Note 2020 2019
I. Cash Flows from Operating Activities:
Cash receipts from the sale of goods and the 919,034,315.48 1,084,739,304.57
rendering of services
Receipts of tax refunds 3,108,523.77 4,102,468.55
Other cash receipts relating to operating 125,185,112.12 76,574,005.12
activities
Subtotal of cash inflows from operating 1,047,327,951.37 1,165,415,778.24
activities
Cash payments for goods purchased and 776,294,426.96 722,868,487.80
services received
Cash payments to and on behalf of 175,144,803.35 180,775,409.02
employees
Payments of various types of taxes 28,453,770.47 46,036,572.76
Other cash payments relating to operating 120,311,024.70 180,658,173.58
activities
Subtotal of cash outflows from operating 1,100,204,025.48 1,130,338,643.16
activities
Net cash flow from operating activities -52,876,074.11 35,077,135.08
II. Cash Flows from Investing Activities:
Cash receipts from disposals and recovery 2,704,000,000.00 1,313,635,457.67
of investments
Cash receipts from investment income 18,624,853.97 55,552,990.98
Net cash receipts from disposals of fixed 844,985.38 117,985.66
assets, intangible assets and other long-term
assets
Net cash receipts from disposals of
subsidiaries and other business units
Other cash receipts relating to investing 71,725,375.54 124,900,000.00
activities
Subtotal of cash inflows from investing 2,795,195,214.89 1,494,206,434.31
activities
Cash payments to acquire or construct fixed 40,725,074.65 227,902,344.94
assets, intangible assets and other long-term
assets
Cash payments to acquire investments 2,464,734,756.73 1,886,364,000.00
Net cash payments for acquisitions of
subsidiaries and other business units
Other cash payments relating to investing 75,345,631.45 166,020,000.00
activities
Subtotal of cash outflows from investing 2,580,805,462.83 2,280,286,344.94
activities
Net cash flows from investment 214,389,752.06 -786,079,910.63
activities
III. Cash Flows from Financing Activities:
Cash receipts from capital contributions 20,953,388.25 1,094,215,094.34
Cash receipts from borrowings 82,259,570.15 132,000,000.00
Other cash receipts relating to financing 114,000,000.00
activities
Subtotal of cash inflows from financing 103,212,958.40 1,340,215,094.34
activities
Cash repayments of borrowings 50,000,000.00 246,440,000.00
Cash payments for distribution of dividends 34,374,706.92 5,416,064.64
153 / 311
Annual Report 2020
or profits or settlement of interest expenses
Other cash payments relating to financing 39,403,824.29 110,396,048.75
activities
Subtotal of cash outflows from financing 123,778,531.21 362,252,113.39
activities
Net cash flows from financing -20,565,572.81 977,962,980.95
activities
IV. Effect of Foreign Exchange Rate 1,031,900.06 2,638,810.20
Changes on Cash and Cash Equivalents
V. Net Increase in Cash and Cash 141,980,005.20 229,599,015.60
Equivalents
Add: Opening balance of cash and cash 524,648,100.62 295,049,085.02
equivalents
VI. Closing Balance of Cash and Cash 666,628,105.82 524,648,100.62
Equivalents
Legal representative: BO Lianming
Chief Accountant: ZHAO Ruijin
Person in Charge of the Accounting Body: LIU Jie
154 / 311
Annual Report 2020
Consolidated Statement of Changes in Owners’ Equity
January to December 2020
2020
Equity attributable to owners of the Parent Company
Item Minority Total owner’s
Other equity instruments Less: Other General interests equity
Paid-in capital Capital Special Surplus Undistribute Other
Treasur comprehens risk Subtotal
(or share capital) Preferre Perpetu reserve reserve reserve d profit s
Others y shares ive income reserve
d shares al bonds
I. Closing 451,554,411.00 1,207,942,318 3,287,063.8 22,800,224 288,975,820. 1,974,559,837 149,649,306 2,124,209,14
balance .37 5 .13 29 .64 .18 3.82
of last
year
Add: 1,278,734.88 1,278,734.88 -646,507.57 632,227.31
Changes
in
accountin
g policies
Corr
ections of
prior
period
errors
Busi
ness
combinati
on
involving
enterprise
s under
common
control
Othe
rs
II. 451,554,411.00 1,207,942,318 3,287,063.8 22,800,224 290,254,555. 1,975,838,572 149,002,798 2,124,841,37
Opening .37 5 .13 17 .52 .61 1.13
balance
of the
current
year
III. 1,202,490.00 41,078,672.78 -6,501,355. 12,441,955 67,539,336.7 115,761,099.2 -55,190,043. 60,571,055.8
Changes 78 .44 9 3 35 8
155 / 311
Annual Report 2020
for the
year
(decrease
is
indicated
by “-”)
(I) Total -6,501,355. 113,847,873. 107,346,517.2 -27,186,228. 80,160,288.8
comprehe 78 06 8 40 8
nsive
income
(II) 1,202,490.00 41,078,672.78 42,281,162.78 -28,003,814. 14,277,347.8
Owners’ 95 3
contributi
ons and
reduction
in capital
1. 1,202,490.00 19,750,898.25 20,953,388.25 20,953,388.2
Ordinary 5
shares
contribute
d by
owners
2. Capital
contributi
on from
holders of
other
equity
instrumen
ts
3. 18,783,763.38 18,783,763.38 1,787,189.3 20,570,952.7
Share-bas 8 6
ed
payment
recognize
d in
owners’
equity
4. Others 2,544,011.15 2,544,011.15 -29,791,004. -27,246,993.1
33 8
(III) 12,441,955 -46,308,536. -33,866,580.8 -33,866,580.8
Profit .44 27 3 3
distributi
on
1. 12,441,955 -12,441,955.
Transfer .44 44
to surplus
156 / 311
Annual Report 2020
reserve
2.
Transfer
to general
reserve
3. -33,866,580. -33,866,580.8 -33,866,580.8
Distributi 83 3 3
ons to
owners
(or
sharehold
ers)
4. Others
(IV)
Transfers
within
owners’
equity
1.
Capitaliza
tion of
capital
reserve
2.
Capitaliza
tion of
capital
reserve
3. Loss
offset by
surplus
reserve
4.
Retained
earnings
carried
forward
from
changes
in defined
benefit
plans
5.
Retained
earnings
carried
forward
157 / 311
Annual Report 2020
from
other
comprehe
nsive
income
6. Others
(V)
Special
reserve
1.
Transfer
to special
reserve in
the period
2.
Amount
utilized in
the period
(VI)
Others
IV. 452,756,901.00 1,249,020,991 -3,214,291. 35,242,179 357,793,891. 2,091,599,671 93,812,755. 2,185,412,42
Closing .15 93 .57 96 .75 26 7.01
balance
of the
current
year
In RMB
2019
Equity attributable to owners of the Parent Company
Item Minority Total owner
Paid-in capital Other equity instruments Less: Other General interests equity
Special Surplus Undistributed
(or share Capital reserve Treasury comprehensive risk Others Subtotal
Preferred Perpetual reserve reserve profit
capital) Others shares income reserve
shares bonds
I. Closing 383,554,411.00 205,995,596.85 1,044,703.00 12,695,712.93 112,623,054.78 715,913,478.56 110,985,548.13 826,899,026
balance of last
year
Add: Changes in
accounting
policies
Corrections
of prior period
errors
158 / 311
Annual Report 2020
Business
combination
involving
enterprises under
common control
Others
II. Opening 383,554,411.00 205,995,596.85 1,044,703.00 12,695,712.93 112,623,054.78 715,913,478.56 110,985,548.13 826,899,026
balance of the
current year
III. Changes for 68,000,000.00 1,001,946,721.52 2,242,360.85 10,104,511.20 176,352,765.51 1,258,646,359.08 38,663,758.05 1,297,310,117
the year (decrease
is indicated by
“-”)
(I) Total 2,242,360.85 186,457,276.71 188,699,637.56 37,988,670.96 226,688,308
comprehensive
income
(II) Owners’ 68,000,000.00 1,001,946,721.52 1,069,946,721.52 675,087.09 1,070,621,808
contributions and
reduction in
capital
1. Ordinary 68,000,000.00 994,470,797.73 1,062,470,797.73 1,062,470,797
shares
contributed by
owners
2. Capital
contribution from
holders of other
equity
instruments
3. Share-based 7,475,923.79 7,475,923.79 675,087.09 8,151,010
payment
recognized in
owners’ equity
4. Others
(III) Profit 10,104,511.20 -10,104,511.20
distribution
1. Transfer to 10,104,511.20 -10,104,511.20
surplus reserve
2. Transfer to
general reserve
3. Distributions
to owners (or
shareholders)
4. Others
(IV) Transfers
within owners’
equity
159 / 311
Annual Report 2020
1. Capitalization
of capital reserve
2. Capitalization
of capital reserve
3. Loss offset by
surplus reserve
4. Retained
earnings carried
forward from
changes in
defined benefit
plans
5. Retained
earnings carried
forward from
other
comprehensive
income
6. Others
(V) Special
reserve
1. Transfer to
special reserve in
the period
2. Amount
utilized in the
period
(VI) Others
IV. Closing 451,554,411.00 1,207,942,318.37 3,287,063.85 22,800,224.13 288,975,820.29 1,974,559,837.64 149,649,306.18 2,124,209,143
balance of the
current year
Legal representative: BO Lianming Chief Accountant: ZHAO Ruijin Person in Charge of the Accounting Body: LIU Jie
160 / 311
Annual Report 2020
Statement of Changes in Owners’ Equity of the Parent Company
January to December 2020
In RMB
2020
Other equity instruments Less: Other Total
Item Paid-in capital (or Capital Special Undistributed
Preferred Perpetual Treasury comprehensiv Surplus reserve owner’s
share capital) Others reserve reserve profit
shares bonds shares e income equity
I. Closing balance of last year 451,554,411.00 1,310,939, 21,522,683.40 211,573,548.42 1,995,590,5
867.82 10.64
Add: Changes in accounting
policies
Corrections of prior
period errors
Others
II. Opening balance of the 451,554,411.00 1,310,939, 21,522,683.40 211,573,548.42 1,995,590,5
current year 867.82 10.64
III. Changes for the year 1,202,490.00 40,321,85 12,441,955.44 78,111,018.16 132,077,314
(decrease is indicated by “-”) 1.02 .62
(I) Total comprehensive 124,419,554.43 124,419,554
income .43
(II) Owners’ contributions 1,202,490.00 40,321,85 41,524,341.
and reduction in capital 1.02 02
1. Ordinary shares contributed 1,202,490.00 19,750,89 20,953,388.
by owners 8.25 25
2. Capital contribution from
holders of other equity
instruments
3. Share-based payment 20,570,95 20,570,952.
recognized in owners’ equity 2.77 77
4. Others
(III) Profit distribution 12,441,955.44 -46,308,536.27 -33,866,580.
83
1. Transfer to surplus reserve 12,441,955.44 -12,441,955.44
2. Distributions to owners (or -33,866,580.83 -33,866,580.
shareholders) 83
3. Others
(IV) Transfers within owners’
equity
1. Capitalization of capital
reserve
161 / 311
Annual Report 2020
2. Capitalization of capital
reserve
3. Loss offset by surplus
reserve
4. Retained earnings carried
forward from changes in
defined benefit plans
5. Retained earnings carried
forward from other
comprehensive income
6. Others
(V) Special reserve
1. Transfer to special reserve
in the period
2. Amount utilized in the
period
(VI) Others
IV. Closing balance of the 452,756,901.00 1,351,261, 33,964,638.84 289,684,566.58 2,127,667,8
current year 718.84 25.26
2019
Other equity instruments Less: Other Total
Item Paid-in capital (or Special Surplus Undistributed
Preferred Perpetual Capital reserve Treasury comprehensive owner’s
share capital) Others reserve reserve profit
shares bonds shares income equity
I. Closing balance of last year 383,554,411.00 308,318,059.21 11,418,172 120,632,947. 823,923,590.
.20 59 00
Add: Changes in accounting
policies
Corrections of prior
period errors
Others
II. Opening balance of the 383,554,411.00 308,318,059.21 11,418,172 120,632,947. 823,923,590.
current year .20 59 00
III. Changes for the year 68,000,000.00 1,002,621,808.6 10,104,511 90,940,600.8 1,171,666,92
(decrease is indicated by “-”) 1 .20 3 0.64
(I) Total comprehensive 101,045,112. 101,045,112.
income 03 03
(II) Owners’ contributions 68,000,000.00 1,034,366,105.2 1,102,366,10
and reduction in capital 2 5.22
162 / 311
Annual Report 2020
1. Ordinary shares contributed 68,000,000.00 1,026,215,094.3 1,094,215,09
by owners 4 4.34
2. Capital contribution from
holders of other equity
instruments
3. Share-based payment 8,151,010.88 8,151,010.88
recognized in owners’ equity
4. Others
(III) Profit distribution 10,104,511 -10,104,511.2
.20 0
1. Transfer to surplus reserve 10,104,511 -10,104,511.2
.20 0
2. Distributions to owners (or
shareholders)
3. Others
(IV) Transfers within owners’
equity
1. Capitalization of capital
reserve
2. Capitalization of capital
reserve
3. Loss offset by surplus
reserve
4. Retained earnings carried
forward from changes in
defined benefit plans
5. Retained earnings carried
forward from other
comprehensive income
6. Others
(V) Special reserve
1. Transfer to special reserve
in the period
2. Amount utilized in the
period
(VI) Others -31,744,296.61 -31,744,296.
61
IV. Closing balance of the 451,554,411.00 1,310,939,867.8 21,522,683 211,573,548. 1,995,590,51
current year 2 .40 42 0.64
163 / 311
Annual Report 2020
Legal representative: BO Lianming Chief Accountant: ZHAO Ruijin Person in Charge of the Accounting Body: LIU Jie
164 / 311
Annual Report 2020
III. Company profile
1. Profile
√ Applicable□ N/A
Appotronics Corporation Limited (hereinafter referred to as “Company” or “the Company”),
formally named as Shenzhen Appotronics Optoelectronics Technology Inc. (hereinafter referred to as
“Appotronics Inc.”), was jointly invested and established by LI Yi and XU Yanzheng and registered in
Nanshan Branch of Market Supervision and Regulation Bureau of Shenzhen Municipality on October 24,
2006 with the business license numbered in 4403011245637. Upon establishment, the registered capital
of Appotronics Inc. was RMB 100,000. On May 31, 2018, the benchmark date, Appotronics Inc was
changed into a company limited by shares entirety. On July 20, 2018, the Company completed the
registration in Nanshan Branch of Market Supervision and Regulation Bureau of Shenzhen Municipality
and headquartered in Shenzhen City, Guangdong Province. The Company holds the business license
bearing the credibility code 91440300795413991N. The Company’s registered capital is RMB
452,756,901.00 divided into 452,756,901 shares (RMB 1 Yuan per share), including 169,456,766
outstanding shares subject to sale restrictions and 283,300,135 outstanding shares not subject to sale
restrictions. The Company’s shares were listed for trading on Shanghai Stock Exchange on July 22,
2019.
The Company can be classified into the computer, communication and other electronic equipment
manufacturing industry. It mainly engages in research and development, production, sales and leasing of
laser display core devices and whole machines, and can provide customers with technical research and
development services and customized products. Its products mainly include laser business and education
projectors, smart mini projectors, laser TV, laser large venue projector and laser digital cinema projector.
This financial statements have been approved by the Company’s 31st session of the first board of
directors on April 22, 2021 for public disclosure.
2. Scope of consolidated financial statements
√ Applicable□ N/A
The Company has included 21 subsidiaries into the consolidated financial statements for the current
period, including Appotronics Timewaying (Beijing) Technology Co., Ltd., Shenzhen Appotronics
Software Technology Co., Ltd., Shenzhen City Appotronics Xiaoming Technology Co., Ltd., Beijing
Orient Appotronics Technology Co., Ltd., Formoive (Beijing) Technology Co., Ltd., CINEAPPO Laser
Cinema Technology (Beijing) Co., Ltd., Shenzhen Appotronics Laser Display Technology Co., Ltd.,
Shenzhen Appotronics Laser Technology Co., Ltd., Qingda Appotronics (Xiamen) Technology Co., Ltd.,
Shenzhen Appotronics Home Line Technology Co., Ltd., Appotronics Hong Kong Limited, Appotronics
USA, Inc., Fabulus Technology Hong Kong Limited, JoveAI Limited, JoveAI Innovation, Inc.,
FORMOVIE TECHNOLOGY INC, WEMAX LLC, Shenzhen Appotronics Display Device Co., Ltd.,
JoveAI Asia Company Limited, Tianjin Bonian Film Partnership (LP) and other subsidiaries. Refer to
descriptions in VIII and IX of Section XI for details.
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IV. Basis of preparation of financial statements
1. Basis of preparation
The Company’s financial statements are prepared on a going-concern basis.
2. Going concern
√ Applicable□ N/A
The Company has detected no events or circumstances that may cast significant doubt upon its
ability to continue as a going concern within 12 months from the reporting period.
V. Significant accounting policies and accounting estimates
Specific accounting policies and accounting estimates:
√ Applicable□ N/A
Important note: The Company establishes the specific accounting policies and makes the specific
accounting estimates with respect to the impairment of financial instruments, depreciation of fixed assets,
amortization of intangible assets, recognition of revenues and other transactions and events according to
the actual production and operation characteristics of the Company.
1. Statement of compliance with the Accounting Standards for Business Enterprises
The financial statements prepared by the Company conform to the requirements of the Accounting
Standards for Business Enterprises and truly and completely reflect the Company’s financial position,
operating results, changes in shareholders' equity, cash flows and other related information.
2. Accounting period
The Company’s accounting year is from January 1 to December 31 of each calendar year.
3. Operating cycle
√ Applicable□ N/A
The Company has a relatively short operating cycle, and determines the liquidity of assets and
liabilities on the basis of 12 months.
4. Functional currency
The Company adopts RMB as its functional currency.
5. The accounting treatment of business combinations involving entities under common control
and not involving entities under common control
√ Applicable□ N/A
1. Accounting method for business combinations involving enterprises under common control
Assets and liabilities acquired from a business combination by the Company are measured at the
carrying amounts of the assets and liabilities of the acquiree in the consolidated financial statements of
the ultimate controller at the date of combination. The Company made adjustment to capital reserves
according to the differences between the shares in the owners' equity of the combined party on the
consolidated financial statements of the ultimate controlling party and the book value of paid
combination considerations or the face value of issued shares; In case the capital reserve is not sufficient
to absorb the difference, the remaining balance is adjusted against the retained earnings.
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2. Accounting method for business combinations not involving enterprises under common control
Where the cost of combination exceeds the Company’s interest in the fair value of the acquiree’s
identifiable net assets, the difference is recognized as goodwill. Where the cost of combination is less
than the Company’s interest in the fair value of the acquiree’s identifiable net assets, the Company
firstly reassesses the fair values of the acquiree’s identifiable assets, liabilities and contingent liabilities
and the measurement of the cost of combination. If after that reassessment, the cost of combination is
still less than the Company’s interest in the fair value of the acquiree’s identifiable net assets, the
acquirer recognizes the remaining difference immediately in profit or loss for the current period.
6. Method of preparation of consolidated financial statements
√ Applicable□ N/A
The parent company includes all of its controlled subsidiaries in its consolidated financial
statements. The consolidated financial statements are prepared by the parent company in accordance
with the Accounting Standards for Business Enterprises No. 33 -- Consolidated Financial Statements, on
the basis of the respective financial statements of the parent company and its subsidiaries, by reference
to other relevant data.
7. Classification of joint arrangements and accounting treatment of joint operations
√ Applicable□ N/A
1. Joint arrangements are classified into joint operations and joint ventures.
2. When the Company is a party to a joint operation, the Company recognizes the following items
relating to its interest in the joint operation:
(1) the assets individually held by the Company, and the Company’s share of the assets held jointly;
(2) the liabilities incurred individually by the Company, and the Company’s share of the liabilities
incurred jointly;
(3) the Company’s revenue from the sale of its share of output of the joint operation;
(4) the Company’s share of revenue from the sale of assets by the joint operation; and
(5) the expenses incurred individually by the Company, and the Company’s share of the expenses
incurred jointly.
8. Recognition of cash and cash equivalents
Cash represented in the statement of cash flows comprises cash on hand and deposits that can be
readily withdrawn on demand. Cash equivalents are the Group's short-term (generally due within 3
months from the acquisition date), highly liquid investments that are readily convertible to known
amounts of cash and which are subject to an insignificant risk of changes in value.
9. Translation of transactions and financial statements denominated in foreign currencies
√ Applicable□ N/A
1. Transactions denominated in foreign currencies
A foreign currency transaction is recorded in RMB, on initial recognition, by applying the spot
exchange rate on the date of the transaction. At the balance sheet date, foreign currency monetary items
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are translated into RMB using the spot exchange rates at the balance sheet date. Exchange differences
arising from such translations are recognized in profit or loss for the current period, except for those
attributable to foreign currency borrowings that have been taken out specifically for the acquisition or
construction of qualifying assets and accrued interest. Non-monetary items denominated in foreign
currencies that are measured at historical cost are translated using the foreign exchange rates ruling at
the transaction dates, without adjusting the amounts in RMB. Non-monetary items denominated in
foreign currencies that are measured at fair value are translated using the foreign exchange rates
prevailing at the dates when the fair value was determined, with exchange differences arising from such
translations recognized in profit or loss for the current period or other comprehensive income.
2. Translation of financial statements denominated in foreign currencies
Asset and liability items on the balance sheet are translated at the spot exchange rate prevailing at
the balance sheet date; shareholders' equity items other than "undistributed profits” are translated at the
spot exchange rates at the dates on which such items arose; income and expense items in the income
statement are translated at the exchange rates that approximate the actual spot exchange rates on the
dates of the transactions. Exchange differences arising from such translations are recognized in other
comprehensive income.
10. Financial instruments
√ Applicable□ N/A
1. Classification of financial assets and financial liabilities
On initial recognition, the Company’s financial assets are classified into three categories, including
(1) financial assets at amortized cost; (2) financial assets at fair value through other comprehensive
income; and (3) financial assets at fair value through profit or loss for the current period.
Upon initial recognition, the Company’s financial liabilities are classified into four categories,
including (1) financial liabilities at fair value through profit or loss for the current period; (2) financial
liabilities arising as a result of the transfer of financial assets not meeting the criteria for derecognition or
continuing involvement in the financial assets transferred; (3) financial guarantee contracts not falling
under Clauses (1) and (2), and loan commitments not falling under Clause (1) and below market interest
rate; and (4) financial liabilities at amortized cost.
2. Recognition, measurement and derecognition of financial assets and financial liabilities
(1) Recognition and initial measurement of financial assets and financial liabilities
When the Company becomes a party to a financial instrument contract, a financial asset or liability
is recognized. Financial assets and liabilities are initially measured at fair value. Transaction costs
relating to financial assets or liabilities at fair value through profit or loss are directly recognized in
profit or loss for the current period. Transaction costs relating to other kinds of financial assets or
liabilities are included in their initially recognized amount. However, the accounts receivable, if do not
contain any significant financing component or are recognized by the Company without taking into
consideration the financing components under the contracts with a term of less than one year upon initial
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recognition, are initially measured at transaction price defined in Accounting Standards for Business
Enterprises No.14 - Revenue.
(2) Subsequent measurement of financial assets
1) Financial assets at amortized cost
Financial assets at amortized cost are subsequently measured at amortized cost using the effective
interest method. Gains or losses arising from financial assets at amortized cost that do not belong to any
hedging relationship are recognized in profit or loss for the current period upon derecognition,
reclassification, amortization using the effective interest method or recognition of impairment.
2) Investments in debt instruments at fair value through other comprehensive income
Investments in debt instruments at fair value through other comprehensive income are subsequently
measured at fair value. Interest, impairment losses or gains and exchange gains or losses calculated
using the effective interest method are recognized in profit or loss for the current period, and other gains
or losses are recognized in other comprehensive income. Upon derecognition, the aggregate gains or
losses previously recognized in other comprehensive income are transferred to profit or loss for the
current period.
3) Investments in equity instruments at fair value through other comprehensive income
Investments in debt instruments at fair value through other comprehensive income are subsequently
measured at fair value. Dividends received (other than those received as recovery of investment cost) are
recognized in profit or loss for the current period, and other gains or losses are recognized in other
comprehensive income. Upon derecognition, the accumulated gains or losses previously recognized in
other comprehensive income are transferred to retained earnings.
4) Financial assets at fair value through profit or loss for the current period
Financial assets at fair value through profit or loss for the current period are subsequently measured
at fair value, with gains or losses arising therefrom, including interest and dividend income, recognized
in profit or loss for the current period, except the financial assets belonging to any hedging relationship.
(3) Subsequent measurement of financial liabilities
1) Financial liabilities at fair value through profit or loss for the current period
Financial liabilities at fair value through profit or loss for the current period include financial
liabilities held for trading (including derivatives classified as financial liabilities), and financial liabilities
directly designated as at fair value through profit or loss for the current period. Such financial liabilities
are subsequently measured at fair value. Changes in the fair value of financial liabilities designated as at
fair value through profit or loss for the period arising out of changes in the Company’s own credit risk
are recognized in other comprehensive income, unless such treatment will result in or increase any
accounting mismatch in profit or loss. Other gains or losses arising from such financial liabilities,
including interest expenses and changes in fair value not arising out of changes in the Company’s own
credit risk, are recognized in profit or loss for the current period, except the financial liabilities
belonging to any hedging relationship. Upon derecognition, the accumulated gains or losses previously
recognized in other comprehensive income are transferred to retained earnings.
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2) Financial liabilities arising as a result of the transfer of financial assets not meeting the criteria
for derecognition or continuing involvement in the financial assets transferred
Such financial liabilities are measured in accordance with the Accounting Standards for Business
Enterprises No. 23 -- Transfer of Financial Assets.
3) Financial guarantee contracts not falling under Clauses 1) and 2), and loan commitments not
falling under Clause 1) and below market interest rate
Such financial liabilities are subsequently measured at the higher of ① provision for impairment
losses determined according to the policy for impairment of financial instruments; and ② balance of the
initially recognized amount after deduction of the accumulated amortization determined in accordance
with the relevant provisions of the Accounting Standards for Business Enterprises No.14 - Revenue.
4) Financial liabilities at amortized cost
Financial liabilities at amortized cost are subsequently measured at amortized cost using the
effective interest method. Gains or losses on financial liabilities at amortized cost that do not belong to
any hedging relationship are recognized in profit or loss for the current period upon derecognition or
amortization using the effective interest method.
(4) Derecognition of financial assets and financial liabilities
1) Financial assets are derecognized when:
① the contractual right to receive cash flows from the financial assets has expired; or
② the financial assets have been transferred and such transfer meets the criteria for derecognition
of financial assets as set forth in the Accounting Standards for Business Enterprises No. 23 -- Transfer of
Financial Assets.
2) A financial liability (or part thereof) is derecognized when all or part of the outstanding
obligations thereon have been discharged.
3. Recognition and measurement of financial assets transferred
When a financial asset of the Company is transferred, if substantially all the risks and rewards
incidental to the ownership of the financial asset have been transferred, the financial asset is
derecognized, and the rights and obligations incurred or retained in such transfer are separately
recognized as assets or liabilities (as the case may be); if substantially all the risks and rewards
incidental to the ownership of the financial asset have been retained, the financial asset transferred
continues to be recognized. If the Company neither transferred nor retained a substantial portion of all
risks and rewards incidental to the ownership of the financial asset, then: (1) if the Company does not
retain control over the financial asset, the financial asset is derecognized, and the rights and obligations
incurred or retained in such transfer are separately recognized as assets or liabilities (as the case may be);
and (2) if the Company retains control over the financial asset, the financial asset continues to be
recognized to the extent of the Company’s continuing involvement in the financial asset transferred, and
a corresponding liability is recognized.
If an entire transfer of a financial asset meets the criteria for derecognition, the difference between
(1) the carrying amount of the financial asset transferred at the date of derecognition; and (2) the sum of
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the consideration received from the transfer and the portion of the accumulated amount of changes in
fair value directly recorded as other comprehensive income originally that corresponds to the part
derecognized (where the financial asset transferred is an investment in debt instruments at fair value
through other comprehensive income) is recognized in profit or loss for the current period. If part of a
financial asset is transferred and the part transferred entirely meets the criteria for derecognition, the
total carrying amount of the financial asset immediately prior to the transfer is allocated between the part
derecognized and the part not derecognized in proportion to their relative fair value at the date of
transfer, and the difference between (1) the carrying amount of the part derecognized; and (2) the sum of
the consideration received from the transfer of the part derecognized and the portion of the accumulated
amount of changes in fair value directly recorded as other comprehensive income originally that
corresponds to the part derecognized (where the financial asset transferred is an investment in debt
instruments at fair value through other comprehensive income) is recognized in profit or loss for the
current period.
4. Determination of fair value of financial assets and financial liabilities
The Company adopts the valuation techniques applicable to the current situations and with
sufficient data available and support of other information, to determine the fair value of financial assets
and financial liabilities. The Company classifies the inputs used by the valuation techniques in the
following levels and uses them in turn:
(1) Level 1 inputs: quoted market price (unadjusted) in an active market for an identical asset or
liability available at the date of measurement;
(2) Level 2 inputs: inputs other than inputs included within Level 1 that are observable directly or
indirectly. This category includes quoted prices for similar assets or liabilities in active markets, quoted
prices for identical or similar assets or liabilities in inactive markets, observable inputs other than quoted
prices (such as interest rate and yield curves observable during regular intervals of quotation), and inputs
validated by the market;
(3) Level 3 inputs: inputs that are unobservable. This category includes interest rate or stock
volatility that cannot be directly observed or validated by observable market data, future cash flows from
retirement obligation incurred in business combinations, and financial forecasts made using own data.
5. Impairment of financial instruments
(1) Measurement and accounting treatment of impairment of financial instruments
The Company determines the impairment and assesses provision for impairment losses of financial
assets at amortized cost, investments in debt instruments at fair value through other comprehensive
income, contract assets, lease receivable, loan commitments other than financial liabilities designated at
fair value through profit or loss for the current period, and financial guarantee contracts other than
financial liabilities designated at fair value through profit or loss for the current period and financial
liabilities arising as a result of the transfer of financial assets not meeting the criteria for derecognition or
continuing involvement in the financial assets transferred, on the basis of expected credit losses.
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Expected credit loss is the weighted average of credit losses on financial instruments taking into
account the possibility of default. Credit loss is the difference between all contractual cash flows
receivable under the contract and estimated future cash flows discounted at the original effective interest
rate, i.e. the present value of all cash shortage, wherein the Company’s purchased or originated financial
assets that have become credit impaired are discounted at their credit-adjusted effective interest rate.
With respect to purchased or originated financial assets that have become credit impaired, at the
balance sheet date, the Company recognizes a loss allowance equal to the accumulated amount of
changes in lifetime expected credit losses since initial recognition.
With respect to accounts receivable and contract assets that are formed from transactions under the
Accounting Standards for Business Enterprises No.14 - Revenue and do not contain any significant
financing component or are recognized by the Company without taking into consideration the financing
components under the contracts with a term of less than one year, the Company uses the simple
measurement method and recognizes a loss allowance equal to the lifetime expected credit loss.
With respect to lease receivable, accounts receivable and contract assets that are formed from
transactions under the Accounting Standards for Business Enterprises No. 14 - Revenue and contain
significant financing component, the Company uses the simple measurement method and recognizes a
loss allowance equal to the lifetime expected credit loss.
With respect to financial assets not using the measurement methods stated above, at each balance
sheet date, the Company assesses whether the credit risk has increased significantly since initial
recognition, and recognizes a loss allowance equal to the lifetime expected credit loss if the credit risk
has increased significantly since initial recognition, or to the expected credit losses within the next 12
months if the credit risk has not increased significantly since initial recognition.
The Company uses reasonable and supportable information, including forward-looking information,
and compares the possibility of default at the balance sheet date with the possibility of default upon
initial recognition, to determine whether the credit risk of the financial instruments has increased
significantly since initial recognition.
At the balance sheet date, if the Company determines that a financial instrument only has low credit
risk, the Company assumes that its credit risk has not increased significantly since initial recognition.
The Company assesses expected credit risk and measures expected credit losses of financial
instruments individually or collectively. When assessing the financial instruments collectively, the
Company includes the financial instruments in different groups according to their common risk
characteristics.
At each balance sheet date, the Company re-assesses the expected credit losses, with the amount of
increase in or reversal of loss allowance recognized in profit or loss for the current period as impairment
losses or gains. With respect to a financial asset at amortized cost, its carrying amount recorded in the
balance sheet is written off against the loss allowance. With respect to an investment in debt instruments
at fair value through other comprehensive income, the Company recognizes the loss allowance in other
comprehensive income, without reducing its carrying amount.
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(2) Financial instruments for which expected credit risk is assessed and expected credit losses are
measured collectively
Item Basis for Method for measuring expected credit losses
determining
a group
Other receivables
- group of deposit
and security
receivable Nature of
Other receivables- receivables
group of
withholding
receivable
By reference to historic credit loss experience, and taking into
Other receivables Receivables
account the current situations and prediction of future economic
- group of from related
conditions, calculate the expected credit losses according to the
receivables from parties in the
default risk exposure and 12-month or rate of lifetime expected
related parties in scope of
credit loss.
the scope of consolidatio
consolidation n
Other receivables
- grouping by Aging
aging
Long-term
receivables - Aging
grouping by aging
(3) Accounts receivable for which expected credit losses are measured collectively and contract
assets
1) Groups and method for measuring expected credit losses
Item Basis for determining a group Method for measuring expected
credit losses
Bank acceptance bills receivable By reference to historic credit
loss experience, and taking into
Commercial acceptance bills Type of notes
account the current situations and
receivable prediction of future economic
conditions, calculate the
Accounts receivable - group of expected credit losses according
Receivables from related parties to the default risk exposure and
receivables from related parties
in the scope of consolidation rate of lifetime expected credit
in the scope of consolidation
loss.
By reference to historic credit
loss experience, and taking into
account the current situations and
Accounts receivable - grouping prediction of future economic
Aging conditions, prepare a comparison
by aging
table of the aging of accounts
receivable and rate of lifetime
expected credit loss, and
calculate the expected credit
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losses.
By reference to historic credit
loss experience, and taking into
account the current situations and
Contract assets - group of Receivables from related parties prediction of future economic
receivables from related parties conditions, calculate the
in the scope of consolidation
in the scope of consolidation expected credit losses according
to the default risk exposure and
rate of lifetime expected credit
loss.
By reference to historic credit
loss experience, and taking into
account the current situations and
prediction of future economic
Contract assets - group of aging Aging conditions, prepare a comparison
table of the aging of contract
assets and rate of lifetime
expected credit loss, and
calculate the expected credit
losses.
2) Accounts receivable - comparison table of the age of accounts receivable and rate of lifetime
expected credit loss
Accounts receivable
Aging Rate of expected credit loss for accounts
receivable (%)
Within 1 year (including, the same below) 5.00
1-2 years 25.00
2-3 years 50.00
Over 3 years 100.00
6. Offsetting of financial assets and financial liabilities
Financial assets and financial liabilities are presented in the balance sheet separately, without
offsetting each other. However, the Company may represent the financial assets and financial liabilities
on a net basis in the balance sheet only if: (1) the Company has a legal right that is currently enforceable
to set off the recognized financial assets and financial liabilities, and (2) the Company intends either to
settle on a net basis, or to realize the financial asset and settle the financial liability simultaneously.
With respect to the transfer of financial assets not meeting the criteria for derecognition, the
Company does not offset the financial assets transferred against the relevant liabilities.
11. Notes receivable
Method for recognition of expected credit losses of notes receivable and relevant accounting
treatments
√ Applicable□ N/A
The Company's method for recognition of expected credit losses of notes receivable and relevant
accounting treatments are disclosed in V. 10 of Section XI in details.
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12. Accounts receivable
Method for recognition of expected credit losses of accounts receivable and relevant accounting
treatments
√ Applicable□ N/A
The Company's method for recognition of expected credit losses of accounts receivable and relevant
accounting treatments are disclosed in V. 10 of Section XI in details.
13. Receivables financing
√ Applicable□ N/A
The Company's accounting policies on receivables financing are disclosed in V. 10 of Section XI in
details.
14. Other receivables
Method for recognition of expected credit losses of other receivables and relevant accounting
treatments
√ Applicable□ N/A
The Company's method for recognition of expected credit losses of other receivables and relevant
accounting treatments are disclosed in V. 10 of Section XI in details.
15. Inventories
√ Applicable□ N/A
1. Categories of inventories
Inventories mainly include finished goods or commodities held for sale in the ordinary course of
businesses, work in progress in the process of production or materials and supplies consumed in the
process of production or rendering service.
2. Valuation method of inventories upon delivery
The actual cost of inventories upon delivery is calculated using the moving weighted average
method.
3. Basis for determining net realizable value of inventories
At the balance sheet date, inventories are measured at the lower of cost and net realisable value. If
the net realisable value is below the cost of inventories, a provision for decline in value of inventories is
made. For inventories directly used for sale, the net realizable value is determined as the estimated
selling price in the ordinary course of business less the estimated costs necessary to make the sale and
relevant taxes. For inventories required for processing, the net realizable value is determined as the
estimated selling price of finished goods in the ordinary course of business less the estimated costs of
completion, and the estimated costs necessary to make the sale and relevant taxes. As at the balance
sheet date, if in the same item of inventories, some are agreed with contractual prices while the others
are not, the net realizable value for such inventories is determined separately, and compared with the
costs of the two parts of inventories distinctively, as to determine the provisions or reversal of provisions
for decline in value of inventories separately.
4. Inventory count system
The perpetual inventory system is maintained for stock system.
5. Amortization method for low cost and short-lived consumable items and packaging materials
(1) Low cost and short-lived consumable items
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Low cost and short-lived consumable items are amortized using the immediate write-off method.
(2) Packaging materials
Low cost and short-lived consumable items are amortized using the immediate write-off method.
16. Contract assets
(1). Recognition method and criteria of contract assets
√ Applicable□ N/A
The Company presents contract assets or contract liabilities in the balance sheet according to the
relationship between the performance of contractual obligations and payment by customers. Contract
assets and contract liabilities under a same contract are presented at the net amount after offsetting each
other.
Rights owned by the Company for unconditionally collecting the consideration from customers (that is,
depending only on the time) are presented as receivables, and rights for collecting the consideration for
goods that have been transferred to customers (depending on other factors than the time) are presented as
contract assets.
(2). Method for recognition of expected credit losses of contract assets and relevant accounting
treatments
√ Applicable□ N/A
The method for recognition of expected credit losses of contract assets and relevant accounting
treatments are disclosed in V. 10 of Section XI in details.
17. Held-for-sale assets
□ Applicable√ N/A
18. Debt investments
(1). Method for recognition of expected credit losses of debt investments and relevant accounting
treatments
□ Applicable√ N/A
19. Other debt investments
(1). Method for recognition of expected credit losses of other debt investments and relevant
accounting treatments
□ Applicable√ N/A
20. Long-term receivables
(1). Method for recognition of expected credit losses of long-term receivables and relevant
accounting treatments
√ Applicable□ N/A
The method for recognition of expected credit losses of long-term receivables and relevant accounting
treatments are disclosed in V10 of Section XI in details.
21. Long-term equity investments
√ Applicable□ N/A
1. Judgments on joint control and significant influence
Joint control is the contractually agreed sharing of control of an arrangement, which exists only
when decisions about the relevant activities of such arrangement require unanimous consent of the
parties sharing control. Significant influence is the power to participate in the financial and operating
policy making of an entity, but does not control or jointly control over those policies.
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2. Determination of investment cost
(1) In case of an equity investment acquired through a business combination involving entities
under common control, if the acquirer pays consideration for the business combination by cash, transfer
of non-monetary assets, assumption of liabilities or issuance of equity securities, the initial investment
cost of the long-term equity investment is the Company’s share of the carrying amount of the owners’
equity of the acquiree in the consolidated financial statements of the ultimate controller at the date of
combination. The difference between: (i) the initial investment cost of the long-term equity investment;
and (ii) the carrying amount of the consideration paid for the combination or the total par value of the
shares issued is treated as an adjustment to the capital reserve. In case the capital reserve is not sufficient
to absorb the difference, the remaining balance is adjusted against the retained earnings.
For a long-term equity investment acquired through business combination involving enterprises
under common control that is achieved through multiple transactions by steps, the Company shall judge
whether such transactions constitute “a package deal”. If such transactions constitute “a package deal”,
the Company accounts for such transactions as one transaction to acquire control. If such transactions do
not constitute “a package deal”, the initial investment cost is the Company’s share of the carrying
amount of the owners’ equity of the acquiree in the consolidated financial statements of the ultimate
controller at the date of combination. The difference between: (i) the initial investment cost of the
long-term equity investment at the date of combination; and (ii) the sum of the carrying amount of
long-term equity investment before the combination and the carrying amount of the consideration paid
for acquisition of the additional shares at the date of combination is adjusted against the capital reserve.
In case the capital reserve is not sufficient to absorb the difference, the remaining balance is adjusted
against the retained earnings.
(2) In case of an equity investment acquired through a business combination not involving entities
under common control, the initial investment cost is the fair value of the carrying amount of the
consideration paid for the combination at the date of acquisition.
For a long-term equity investment acquired through a business combination not involving entities
under common control and achieved through multiple transactions by steps, the accounting treatment
thereof in the separate financial statements is different from that in the consolidated financial statements
as stated below:
1) In the separate financial statements, the sum of the carrying amount of the equity investment
originally held in the acquiree and the additional investment cost incurred is recorded as the initial
investment cost of the equity investment changed into the cost method.
2) In the consolidated financial statements, it is required to judge whether such transactions
constitute “a package deal”. If such transactions constitute “a package deal”, the Company accounts for
such transactions as one transaction to acquire control. If such transactions do not constitute “a package
deal”, the Company re-measures the fair value of the equity held in the acquiree prior to the date of
acquisition, and records the difference between the fair value and the carrying amount as investment
income for the current period; if the equity held in the acquiree prior to the date of acquisition involves
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other comprehensive income under equity method, such other comprehensive income is transferred to
the income of the period in which the date of acquisition falls, except for other comprehensive income
arising from re-measurement of changes in net liabilities or net assets of defined benefit plans.
(3) In the event of no business combination: The initial investment cost is the purchase price
actually paid if it is acquired by cash, or the fair value of the equity securities issued if it is acquired
through issuance of equity securities, or determined in accordance with the Accounting Standards for
Business Enterprises No. 12 -- Debt Restructuring if it is acquired through debt restructuring, or
determined in accordance with the Accounting Standards for Business Enterprises No. 7 -- Exchange of
Non-monetary Assets if it is acquired through exchange of non-monetary assets.
3. Subsequent measurement and recognition of profit or loss
Long-term equity investments in investees are measured using the cost method. Long-term equity
investments in associates and joint ventures are measured using the equity method.
4. Disposal of investment in a subsidiary through multiple transactions by steps until loss of control
over the subsidiary
(1) Separate financial statements
The difference between the carrying amount of the equity disposed of and the proceeds of disposal
actually received is recognized in profit or loss for the current period. If the remaining equity empowers
the Company to exercise significant influence or joint control over the investee, the remaining equity is
accounted for using the equity method; if the remaining equity does not empower the Company to
exercise control, joint control or significant influence over the investee, the remaining equity is
accounted for in accordance with the Accounting Standards for Business Enterprises No. 22 --
Recognition and Measurement of Financial Instruments.
(2) Consolidated financial statements
1) Disposal of investment in a subsidiary through multiple transactions by steps until loss of control
over the subsidiary which does not constitute “a package deal”
Prior to the loss of control, the difference between the proceeds from disposal and the share owned
by the Company in the net assets of the subsidiary in relation to the long-term equity investment
disposed of that is calculated continuously from the date of acquisition or combination is adjusted
against the capital reserve (capital premium). In case the capital premium is not sufficient to absorb the
difference, the remaining balance is adjusted against the retained earnings.
When losing control over a subsidiary, the remaining equity is re-measured at its fair value at the
date of loss of control. The sum of the consideration received from the disposal of the equity and the fair
value of the remaining equity, net of the share owned by the Company in the net assets of the subsidiary
in relation to the long-term equity investment disposed of as calculated continuously from the date of
acquisition or combination according to the previous shareholding ratio, is recognized in the investment
income for the period in which the control is lost, and the goodwill is reduced accordingly. Other
comprehensive income relating to the equity investment in the subsidiary is transferred to the investment
income for the current period in which the control is lost.
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2) Disposal of investment in a subsidiary through multiple transactions by steps until loss of control
over the subsidiary which constitutes a package deal
The Company accounts for such transactions as one transaction to dispose of and lose its control
over the subsidiary. However, the difference between the proceeds from each disposal before loss of
control and the share owned by the Company in the net assets of the subsidiary in relation to the
investment disposed of is recognized in other comprehensive income in the consolidated financial
statements, which is wholly transferred to the profit or loss in the current period in which the control is
lost.
22. Investment properties
N/A
23. Fixed assets
(1). Criteria for recognition
√ Applicable□ N/A
Fixed assets are tangible assets held for production of goods, rendering of service, lease or
operation and management with a useful life of more than one accounting year. A fixed asset is
recognized if the economic benefits relating to it are very likely to flow to the Company and its cost can
be reliably measured.
(2). Method of depreciation
√ Applicable□ N/A
Annual
Depreciation Residual value rate
Category Depreciation depreciation rate
period (years) (%)
(%)
Machinery and Straight line 5 5.00 19.00
equipment method
Transportation Straight line 5 5.00 19.00
equipment method
Electronic Straight line 3-5 5.00 19.00-31.67
equipment and method
others
Operating leased Straight line 3, 7 5.00 31.67, 13.57
equipment method
(3). Identification basis, valuation method and depreciation method for fixed assets acquired
under finance leases
□ Applicable√ N/A
24. Construction in progress
√ Applicable□ N/A
1. A construction in progress is recognized if the economic benefits relating to it are very likely to
flow to the Company and its cost can be reliably measured. A construction in progress is measured at the
actual cost incurred before it is completed and ready for intended use.
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2. When a construction in progress is ready for intended use, it is transferred to fixed assets at its
actual construction cost. A construction in progress that is ready for intended use but the final settlement
of which has not yet been completed is transferred to fixed assets at estimated value first, and after the
completion of final settlement, the estimated value is adjusted according to the actual cost, but the
accrued depreciation is not adjusted.
25. Borrowing costs
□ Applicable√ N/A
26. Biological assets
□ Applicable√ N/A
27. Oil and gas assets
□ Applicable√ N/A
28. Use right assets
□ Applicable√ N/A
29. Intangible assets
(1). Measurement, service life and impairment test
√ Applicable□ N/A
1. Intangible assets include land use rights, patents, and software etc. and are measured at cost
initially.
2. An intangible asset with a finite useful life is amortized over its useful life in a systematical and
rational expected realization of economic benefits relative to the intangible asset, or is amortized using
the straight-line method if it is impossible to determine expected realization reliably. The specific years
are as follows:
Item Amortization period (years)
Land use rights 30
Patents 10
Software 3-5
(2). Accounting policy on internal research and development expenditures
□ Applicable√ N/A
30. Impairment of long-term assets
√ Applicable□ N/A
For long-term equity investments, fixed assets, construction in progress, intangible assets with a
finite useful life and other long-term assets, if there’s an indication of impairment at the balance sheet
date, the Company assesses their recoverable amount. Goodwill arising from business combinations and
intangible assets with an infinite useful life are tested for impairment every year regardless of whether
there’s an indication of impairment. Goodwill is tested for impairment together with the relevant groups
of assets or combinations of groups of assets.
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If the recoverable amount of a long-term asset is less than its carrying amount, the difference is
measured as impairment loss of the asset and recognized in profit or loss for the current period.
31. Long-term prepaid expenses
√ Applicable□ N/A
Long-term prepaid expenses are expenses that have already been incurred but should be amortized
over a period of more than one year (excluding one year). Long-term prepaid expenses are stated as the
amount actually incurred and shall be amortized evenly by stages within the benefit period or specified
period. If an item of long-term prepaid expenses will not benefit the subsequent periods, the amortized
value of the item that has not yet been amortized is wholly transferred to profit or loss for the current
period.
32. Contract liabilities
(1). Recognition method for contract liabilities
√ Applicable□ N/A
The Company presents contract assets or contract liabilities in the balance sheet according to the
relationship between the performance of contractual obligations and payment by customers. Contract
assets and contract liabilities under a same contract are presented at the net amount after offsetting each
other.
The obligations of the Company for transferring goods to customers corresponding to
considerations that have been received or receivable are presented as contract liabilities.
33. Employee benefits
(1). Accounting treatment of short-term employee benefits
√ Applicable□ N/A
1. Employee benefits include short-term benefits, post-employment benefits, termination benefits
and other long-term employee benefits.
2. Accounting treatment of short-term employee benefits
The short-term employee benefits actually incurred are recognized as liabilities in the accounting
period during which employee services are rendered, and included in profit or loss for the current period
or the cost of related assets.
(2). Accounting treatment of post-employment benefits
√ Applicable□ N/A
Post-employment benefits are classified into defined contribution plans and defined benefit plans.
(1) In the accounting period during which employee services are rendered, the amount in
contribution as calculated according to the defined contribution plan is recognized as liabilities and
included in profit or loss for the current period or the cost of related assets.
(2) The accounting treatment of a defined benefit plan generally involves the following steps:
1) According to the projected unit credit method, use the unbiased and consistent actuarial
assumptions to estimate demographic variables and financial variables, measure the obligation arising
from the defined benefit plan and determine the period to which the relevant obligation belongs.
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Meanwhile, discount the obligation arising from the defined benefit plan, in order to determine the
present value of the defined benefit plan obligation and the current service cost;
2) If the defined benefit plan has assets, the deficit or surplus resulting after reducing the present
value of the defined benefit plan obligation by the fair value of the defined benefit plan is recognized as
a net liability or asset of the defined benefit plan. If the defined benefit plan has a surplus, the net assets
of the defined benefit plan are measured at the lower of surplus in the defined benefit plan and asset
ceiling;
3) At the end of the reporting period, the cost of employee benefits arising from the defined benefit
plan is recorded as service cost, net interest on the net liabilities or net assets of the defined benefit plan,
and changes arising from re-measurement of the net liabilities or net assets of the defined benefit plan,
wherein the service cost and the net interest on the net liabilities or net assets of the defined benefit plan
are included in profit or loss for the current period or the cost of related assets, and the changes arising
from re-measurement of the net liabilities or net assets of the defined benefit plan are included in other
comprehensive income, which will not be reserved to profit or loss in subsequent periods, but may be
transferred within the scope of equity.
(3). Accounting treatment of termination benefits
√ Applicable□ N/A
When the Company can no longer withdraw the offer of termination benefits as a result of
termination of employment or redundancy, or recognizes the restructuring costs or expenses relating to
payment of termination benefits, whichever the earlier, the employee benefit liabilities arising from
recognition of termination benefits are recognized in profit or loss for the current period.
(4). Accounting treatment of other long-term employee benefits
√ Applicable□ N/A
Other long-term employee benefits are accounted for in accordance with the provisions applicable
to defined contribution plans if they are qualified as defined contribution plans, otherwise, are accounted
for in accordance with the provisions applicable to defined benefit plans. In order to simplify the
accounting treatment, the total net amount of the cost of employee benefits arising from the defined
benefit plans that is recorded as service cost, net interest on the net liabilities or net assets of other
long-term employee benefits, changes arising from re-measurement of the net liabilities or net assets of
other long-term employee benefits and other components is included in profit or loss for the current
period or the cost of related assets.
34. Leasing liabilities
□ Applicable√ N/A
35. Provisions
√ Applicable□ N/A
1. An obligation arising from any external guarantee, litigation, product quality warranty, onerous
contract or other contingencies is recognized as a provision if it is a present obligation assumed by the
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Company, and it is probable that an outflow of resources embodying economic benefits will be required
to settle the obligation, and the amount of the obligation can be reliably measured.
2. The amount recognized as a provision is the best estimate of the consideration required to settle
the present obligation. The carrying amount of provisions is reviewed at the balance sheet date.
36. Share-based payments
√ Applicable□ N/A
1. Categories of share-based payments
Share-based payments include equity-settled share-based payments and cash-settled share-based
payments.
2. Accounting treatment for implementation, modification and termination of share-based payment
plan
(1) Equity-settled share-based payments
Equity-settled share-based payments in exchange for services rendered by employees that can be
executed immediately upon being granted, are measured at the fair value of the equity instruments at the
grant date, and recognized as related costs or expenses with a corresponding adjustment to capital
reserve. At each balance sheet date during the vesting period, equity-settled share-based payments in
exchange for services rendered by employees that cannot be executed until services in the vesting period
are completed or required performance conditions are satisfied, are measured at the fair value of the
equity instruments at the grant date based on the best estimate of exercisable numbers of equity
instruments, and recognized as related costs or expenses with a corresponding adjustment to capital
reserve.
For equity-settled share-based payments in exchange for services rendered by other parties, if the
fair value of services from other parties can be measured reliably, they are measured at the fair value of
services from other parties at the date when such services are received. If the fair value of services from
other parties cannot be measured reliably but the fair value of the equity instruments can be measured
reliably, they are measured at the fair value of the equity instruments at the date when such services are
received. The fair value of the equity instruments are recognized as related costs or expenses, with a
corresponding increase in owners' equity.
(2) Cash-settled share-based payments
Cash-settled share-based payments in exchange for services rendered by employees that can be
executed immediately upon being granted, are recognized as related costs or expenses based on the fair
value of liabilities assumed by the Company at the grant date, with a corresponding increase in liability.
At each balance sheet date during the vesting period, cash-settled share-based payments in exchange for
services rendered by employees that cannot be executed until services in the vesting period are
completed or required performance conditions are satisfied, are measured at the fair value of liabilities
assumed by the Company based on the best estimate of exercisable conditions, and recognized as related
costs or expenses and relevant liabilities.
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(3) Modification and termination of share-based payment plan
In case the Company modifies a share-based payment plan, if the modification increases the fair
value of the equity instruments granted, the Company will include the incremental fair value of the
equity instruments granted in the measurement of the amount recognized for services received. If the
modification increases the number of the equity instruments granted, the Company will include the fair
value of additional equity instruments granted in the measurement of the amount recognized for services
received. If the Company modifies the exercisable conditions of the share-based payment plan in a
manner beneficial to the employee, the Company will consider the modified exercisable conditions when
dealing with exercisable conditions.
If the modification decreases the fair value of the equity instruments granted, the Company will
continue to measure the amount recognized for services received at the fair value of the equity
instruments at the grant date without including the decremental fair value of the equity instruments. If
the modification decreases the number of the equity instruments granted, the Company will treat the
decreased number as the cancelled number of equity instruments granted. If the Company modifies the
exercisable conditions in a manner unbeneficial to the employee, the Company will not consider the
modified exercisable conditions when dealing with exercisable conditions.
If cancellation or settlement of the equity instruments granted occurs (not due to unsatisfaction of
exercisable conditions) during the vesting period, the Company will account for the cancellation or
settlement of the equity instruments granted as an acceleration of vesting, and recognize immediately the
amount that otherwise would have been recognized over the remainder of the vesting period.
37. Preferred shares, perpetual bonds and other financial instruments
□ Applicable√ N/A
38. Income
(1). Accounting policies adopted for income recognition and measurement
√ Applicable□ N/A
1. Principles for revenue recognition
At the beginning date of a contract, the Company assesses the contract to identify individual
performance obligations contained in the contract and determine whether individual obligations are to be
performed during a period of time or at a specific time point.
An obligation meeting one of the following conditions is one to be performed within a period of
time, and the remaining are obligations to be performed at a specific time point: (1) the customer
receives and consumes the economic benefits from the performance of the Company when the Company
performs its obligations; (2) the customer can control the goods in progress during the performance of
the Company; or (3) the goods generated during the performance process of the Company have
irreplaceable uses, and the Company is entitled to payment for the portion completed during the entire
contract term.
The Company recognizes revenue according to the performance progress during the period of time
for obligations to be performed during a period of time. If the performance progress cannot be
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determined reasonably, and the Company is expected to be paid based on the costs incurred, the
Company recognizes revenue according to the amount of costs incurred until the performance progress
can be determined reasonably. For obligations to be performed at a specific time point, the Company
recognizes revenue when the customer receives the control over the relevant goods or services. The
following will be considered when determining whether the customer has obtained the control over the
goods: (1) the Company has the present rights of receiving payments for such goods, that is, the
customer has the present obligation of making payment for the goods; (2) the Company has transferred
the legal title in the goods to the customer, that is, the customer has acquired the legal title in the goods;
(3) the Company has transferred the physical goods to the customer, that is, the customer is in
possession of the physical goods; (4) the Company has transferred major risks and rewards of the legal
title in the goods to the customer, that is, the customer has acquired the major risks and rewards of the
legal title in the goods; (5) the customer has accepted the goods; and (6) there are other signs indicating
that the customer has acquired the control over the goods.
2. Principles of revenue measurement
(1) The Company measures the revenue according to the transaction price allocated to individual
performance obligations. The transaction price refers to the amount of the consideration expected to be
received by the Company on the basis of transferring goods or providing services to the customer,
excluding amounts collected on behalf of a third party and amounts expected to be refunded to the
customer.
(2) If a contract contains a variable consideration, the Company determines the best estimate of the
variable consideration according to the expected value or the most likely amount; however, the
transaction price containing the variable consideration does not exceed the amount for which no material
reversal of recognized revenue is highly probable when relevant uncertainty is eliminated.
(3) If a contract contains a major financing portion, the Company determines the transaction price
as the amount payable in cash when the customer obtains the control over the goods or services. The
difference between the transaction price and contract consideration is amortized using the effective
interest method during the term of the contract. If the Company expects that the interval between the
acquisition of the goods or services by the customer and the payment of prices by the customer will not
exceed one year from the commencement date of the contract, no significant financing factor is
considered.
(4) If a contract contains two or more performance obligations, at the beginning date of the contract,
the Company allocates the transaction price to individual performance obligations according to the
relative proportion of the individual sale prices of the goods promised under such individual
performance obligations.
3. Specific methods for revenue recognition
(1) Revenue from sales of goods
Revenue from sales of goods denotes contractual obligations to be performed at a time point. Our
sales include sales to the domestic market and sales to foreign markets.
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Goods sold to the domestic market: 1) Under the direct sale model and the distribution mode, the
Company recognizes the revenue when the goods sent have been delivered to customers with customers'
receipt given to the Company. For goods sold attached with return conditions, the Company recognizes
the revenue according to the amount of the consideration expected to be received by the Company on the
basis of transferring goods to the customer, and recognizes liabilities to write off the revenue according
to the expected amount to be refunded due to the return of goods; for goods required for installment and
inspection after sales, the Company recognizes the revenue when such goods have been installed and
inspected with customers' acceptance certificate given to the Company. If the Company shares profits
from sales of product to downstream end customers, the Company recognizes the revenue at the goods
price agreed between the parties upon the delivery of goods to the customer and reconciliation, and
recognizes shared revenue according to the share profit reconciliation statement when the profits from
sales of goods are realized. 2) Under the commissioned sales mode, the Company recognizes the
revenue when it receives the list of commissioned sales from the customer.
Goods exported to overseas markets: The Company mainly adopts FCA for export of goods. Under
this mode, the Company recognizes revenue when it delivers goods at the designated location with
export customs clearance procedures completed.
(2) Other incomes
Other revenues denote contractual obligations to be performed at a time point/during a specific
period of time. For installation services provided by the Company, the Company recognizes the revenue
when it has completed the services and received customers’ acceptance certificate; for repair and
maintenance services provided by the Company, the Company recognizes the revenue when it has
completed the services and received payments; for patent license services provided by the Company, the
Company recognizes the revenue when the patent license is delivered; for technology development
services provided by the Company, the Company recognizes the revenue when it has completed the
services or when the agreed time point of service acceptance is reached.
(2). Description of differences in the accounting policies in revenue recognition due to different
operating modes adopted for the same business type
□ Applicable√ N/A
39. Contract costs
□ Applicable√ N/A
40. Government grants
√ Applicable□ N/A
1. Government grants are recognized if (1) the Company meets the conditions attaching to the
government grants; and (2) the Company will receive the government grants. Government grants in the
form of monetary assets are measured at the amount received or receivable. Government grants in the
form of non-monetary assets are measured at fair value, or if their fair value is unavailable, at nominal
amount.
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2. Determination and accounting treatment of government grants related to assets
Government grants related to assets are government grants which are offered for purchasing,
constructing or otherwise acquiring long-term assets as provided by the applicable government
documents. In the absence of such express provision in the applicable government documents,
government grants related to assets are those with a primary condition that the Company should
purchase, construct or otherwise acquire long-term assets. Government grants related to assets are offset
against the carrying amount of the relevant assets or recognized as deferred income. Government grants
related to assets recognized as deferred income shall be included in profit or loss over the service life of
the relevant assets on a reasonable and systemic basis. Government grants measured at nominal amount
are directly recognized in profit or loss for the current period. In case of sale, transfer, retirement or
damage of the relevant assets before the end of intended service life, the balance of the unallocated
deferred income is transferred to profit or loss for the period in which the assets are disposed of.
3. Determination and accounting treatment of government grants related to income
Government grants related to income are government grants other than those related to assets.
Government grants related to both assets and income in which it is difficult to make a distinction
between the portion related to assets and the portion related to income are wholly classified as
government grants related to income. Government grants related to income as compensation for
expenses or losses to be incurred in subsequent periods are recognized as deferred income and in the
period for recognizing the relevant costs, expenses or losses, included in profit or loss for the current
period or offset against the relevant costs. Government grants related to income as compensation for
expenses or losses already incurred are directly included in profit or loss for the current period or offset
against the relevant costs.
4. Government grants related to daily operations of the Company are recognized in other income or
offset against the relevant costs and expenses depending on the nature of economic business.
Government grants not related to daily operations of the Company are recognized in non-operating
income or expenses.
5. Accounting treatment of policy preferential loans and interest subsidies
(1) If the Ministry of Finance appropriates the interest subsidies to the lending bank, who then
grants the loan to the Company at the policy preferential rate, the loan is stated as the amount actually
received, and the borrowing cost is calculated according to the principal of the loan and the policy
preferential rate.
(2) If the Ministry of Finance directly appropriates the interest subsidies to the Company, the
interest subsidies are offset against the borrowing cost.
41. Deferred tax assets and deferred tax liabilities
√ Applicable□ N/A
1. The difference between the tax base of an asset or liability and its carrying amount (or in case of
an item not recognized as asset or liability whose tax base can be determined according to the applicable
tax law, the difference between its tax base and carrying amount) is recognized as a deferred tax asset or
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deferred tax liability according to the tax rate applicable to the period in which the asset or liability is
expected to be recovered or settled.
2. Deferred tax assets are recognized to the extent of the amount of income tax payable that will be
available in future periods against which deductible temporary differences are deductible. At the balance
sheet date, deferred tax assets not recognized in prior periods are recognized if there’s conclusive
evidence that it is probable that sufficient taxable income will be available in future periods against
which the deductible temporary differences are deductible.
3. At the balance sheet date, the carrying amount of deferred tax assets is reviewed and reduced to
the extent that it is no longer probable that sufficient taxable income will be available in future periods to
allow the benefit of the deferred tax assets to be utilized. If it is probable that sufficient taxable income
will be available, the reduced amount is reversed.
4. The income taxes and deferred income taxes are included in profit or loss for the current period
as income tax expenses or gains, except the income taxes arising from any: (1) business combination; or
(2) transaction or event directly recognized in owners’ equity.
42. Leases
(1). Accounting treatment of operating leases
√ Applicable□ N/A
If the Company is a lessee, the rents paid by the Company are included in the costs of the relevant
assets or in profit or loss for the current period over the whole lease term on a straight line basis. The
initial direct cost incurred by the Company is directly recognized in profit or loss for the current period.
Contingent rents are recognized in profit or loss in the period in which they are incurred.
If the Company is a lessor, the rents received by the Company are recognized in profit or loss for
the current period over the whole lease term on a straight line basis. The initial direct cost incurred by
the Company is directly recognized in profit or loss for the current period. However, if such initial direct
cost is of a large amount, the initial direct cost is capitalized and recognized in profit or loss by
installments. Contingent rents are recognized in profit or loss in the period in which they are incurred.
(2). Accounting treatment of finance leases
√ Applicable□ N/A
If the Company is a lessee, the lower of the fair value of the leased asset at the inception of the
lease and the present value of the minimum lease payments is recorded as the carrying amount of the
rented assets, with the minimum lease payments as the carrying amount of long-term payables and the
difference charged to unrecognized financing fees at the commencement date of the lease term. The
initial direct cost incurred by the Company is directly recognized in the value of the rented assets. In
each period of the lease term, the financing fees for the period is recognized by using the effective
interest method.
If the Company is a lessor, the aggregate of the minimum lease receivable at the inception of the
lease and the initial direct costs is recognized as the carrying amount of the finance lease receivable and
the unguaranteed residual value is recorded at the same time at the commencement date of the lease term;
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the difference between the aggregate of the minimum lease receivable, the initial direct costs and the
unguaranteed residual value, and the aggregate of their present values is recognized as unearned
financing income. In each period of the lease term, the financing income for the period is recognized by
using the effective interest method.
(3). Method for determination and accounting treatments of lease under new lease standards
□ Applicable√ N/A
43. Other significant accounting policies and accounting estimates
□ Applicable√ N/A
44. Changes in significant accounting policies and accounting estimates
(1). Changes in significant accounting policies
√ Applicable□ N/A
Remarks (name and amount of
Changes in accounting policies line items in financial statements
Approval procedures
and associated reasons that have been materially
affected)
Implement the Accounting Approved by the management Refer to the table below for
Standards for Business details
Enterprises No. 14 - Revenue
amended and released by the
Ministry of Finance
Implement the Interpretation of Approved by the management None
the Accounting Standards for
Business Enterprises No. 13
Other information
(1) Changes in accounting policies caused by changes in the Accounting Standards for Business
Enterprises
1) The Company has implemented the Accounting Standards for Business Enterprises No. 14 -
Revenue (hereinafter referred to as the New Revenue Standard) revised by the Ministry of Finance since
January 1, 2020. As required by transition provisions to adopt the New Revenue Standard, information
in the comparative period cannot be adjusted, but the opening balances of retained earnings in the report
or other relevant amounts in the financial statements shall be adjusted retrospectively for any cumulative
impact of the new standards at the first implementation date.
The New Revenue Standard mainly causes the following influences to the Company’s financial
statements as at January 1, 2020:
Balance sheet
December 31, 2019 Adjustment influence of January 1, 2020
Item
the New Revenue
Standard
Accounts 176,035,155.24 15,587,556.77 191,622,712.01
receivable
Inventories 299,966,170.35 -16,355,310.22 283,610,860.13
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Contract assets 3,740,605.96 3,740,605.96
Other current 44,405,513.30 -2,340,625.20 42,064,888.10
assets
Advance from 184,444,643.33 -16,910,443.03 167,534,200.30
customers
Contract 15,777,305.81 15,777,305.81
liabilities
Other current 1,133,137.22 1,133,137.22
liabilities
Undistributed 288,975,820.29 1,278,734.88 290,254,555.17
profit
Total equity
attributable to
1,974,559,837.64 1,278,734.88 1,975,838,572.52
owners of the
parent company
Minority 149,649,306.18 -646,507.57 149,002,798.61
interests
2) The Company has implemented the Interpretation of the Accounting Standards for Business
Enterprises No. 13 released in 2019 by the Ministry of Finance since January 1, 2020. This change in the
accounting policy is handled by using the prospective application method.
(2). Changes in significant accounting estimates
□ Applicable√ N/A
(3). Description of adjustments in opening balances of line items in financial statements of the
year due to the first implementation of the New Revenue Standard and new lease standard
since 2020
√ Applicable□ N/A
Consolidated Balance Sheet
In RMB
Item December 31, 2019 January 1, 2020 Adjusted amount
Current Assets:
Cash and bank balances 875,858,784.58 875,858,784.58
Balances with clearing agencies
Placements with banks and
other financial institutions
Held-for-trading financial assets 540,000,000.00 540,000,000.00
Derivative financial assets
Notes receivable 4,042,559.63 4,042,559.63
Accounts receivable 176,035,155.24 191,622,712.01 15,587,556.77
Receivables financing 1,980,500.00 1,980,500.00
Prepayments 35,070,999.13 35,070,999.13
Premiums receivable
Amounts receivable under
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reinsurance contracts
Reinsurer’s share of insurance
contract reserves
Other receivables 9,618,750.08 9,618,750.08
Where: Interest receivable
Dividend receivable
Financial assets purchased under
resale agreements
Inventories 299,966,170.35 283,610,860.13 -16,355,310.22
Contract assets 3,740,605.96 3,740,605.96
Assets held for sale
Non-current assets due within
one year
Other current assets 44,405,513.30 42,064,888.10 -2,340,625.20
Total current assets 1,986,978,432.31 1,987,610,659.62 632,227.31
Non-current Assets:
Loans and advances
Debt investments
Other debt investments
Long-term accounts receivable
Long-term equity investment 139,534,371.94 139,534,371.94
Investment in other equity 11,975,419.38 11,975,419.38
instruments
Other non-current financial
assets
Investment property
Fixed assets 471,204,340.95 471,204,340.95
Construction in progress 20,132,004.07 20,132,004.07
Productive biological assets
Oil and gas assets
Use right assets
Intangible assets 332,331,324.07 332,331,324.07
Development expenditure
Goodwill
Long-term prepaid expenses 16,908,070.34 16,908,070.34
Deferred tax assets 109,023,941.85 109,023,941.85
Other non-current assets 11,420,185.94 11,420,185.94
Total non-current assets 1,112,529,658.54 1,112,529,658.54
Total assets 3,099,508,090.85 3,100,140,318.16 632,227.31
Current Liabilities:
Short-term borrowings 76,765,319.05 76,765,319.05
Loans from the central bank
Taking from banks and other
financial institutions
Held-for-trading financial
liabilities
Derivative financial liabilities
Notes payable 37,335,841.79 37,335,841.79
Accounts payable 176,624,445.46 176,624,445.46
Advance from customers 184,444,643.33 167,534,200.30 -16,910,443.03
Contract liabilities 15,777,305.81 15,777,305.81
Financial assets sold under
repurchase agreements
Customer deposits and deposits
from banks and other financial
191 / 311
Annual Report 2020
institutions
Funds from securities trading
agency
Funds from underwriting
securities agency
Employee benefits payable 50,586,932.71 50,586,932.71
Taxes payable 42,924,647.79 42,924,647.79
Other payables 14,364,076.43 14,364,076.43
Where: Interest payable
Dividend payable
Fees and commissions payable
Amounts payable under
reinsurance contracts
Liabilities held for sale
Non-current liabilities due 64,968,795.02 64,968,795.02
within one year
Other current liabilities 1,133,137.22 1,133,137.22
Total current liabilities 648,014,701.58 648,014,701.58
Non-current Liabilities:
Insurance contract reserves
Long-term borrowings 279,615,107.27 279,615,107.27
Bonds payable
Where: Preferred shares
Perpetual bonds
Leasing liabilities
Long-term payables 3,488,100.00 3,488,100.00
Long-term employee benefits
payable
Estimated liabilities 27,072,676.49 27,072,676.49
Deferred income 17,108,361.69 17,108,361.69
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities 327,284,245.45 327,284,245.45
Total liabilities 975,298,947.03 975,298,947.03
Owners’ Equity (Shareholders’ Equity):
Paid-in capital (or share capital) 451,554,411.00 451,554,411.00
Other equity instruments
Where: Preferred shares
Perpetual bonds
Capital reserve 1,207,942,318.37 1,207,942,318.37
Less: Treasury shares
Other comprehensive income 3,287,063.85 3,287,063.85
Special reserve
Surplus reserve 22,800,224.13 22,800,224.13
General risk reserve
Undistributed profit 288,975,820.29 290,254,555.17 1,278,734.88
Total owners’ (or shareholders’) 1,974,559,837.64 1,975,838,572.52 1,278,734.88
equity attributable to owners of the
parent company
Minority interests 149,649,306.18 149,002,798.61 -646,507.57
Total owners’ (or 2,124,209,143.82 2,124,841,371.13 632,227.31
shareholders’) equity
Total liabilities and 3,099,508,090.85 3,100,140,318.16 632,227.31
owners’ (or shareholders’) equity
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Description of adjustments on each line item:
√ Applicable□ N/A
In accordance with the Accounting Standards for Business Enterprises No. 14 - Revenue (Cai Kuai
[2017] No. 2) issued by the Ministry of Finance on July 5, 2017, for enterprises listed in domestic and
oversea stock exchange concurrently and enterprises listed overseas with the financial statements
prepared under international financial reporting standards or accounting standards for business
enterprises, the New Revenue Standard shall be implemented from January 1, 2018; and for other
enterprises listed in domestically, the New Revenue Standard shall be implemented from January 1,
2020. As a domestic listed company, the Company adopted the New Revenue Standard as at January 1,
2020, and made adjustment on the opening balance of relevant item recognized in the financial
statements, but the data in comparable period can be unadjusted: (1) the goods payments received in
advance originally qualified for conditions of “receipts in advance” were charged to the line item of
“contract liability”; (2) the rights of the Company for collecting the considerations for goods that have
been transferred to customers, which rights depend on factors other than the lapse of time, were
presented as “contract assets”; and (3) in the goods sales mode of “profit sharing”, the revenue that has
been received by the customer but has not been recognized at the beginning of the period was
recognized according to the New Revenue Standard.
Balance Sheet of the Parent Company
In RMB
Item December 31, 2019 January 1, 2020 Adjusted amount
Current Assets:
Cash and bank balances 570,479,390.49 570,479,390.49
Held-for-trading financial 540,000,000.00 540,000,000.00
assets
Derivative financial assets
Notes receivable 3,542,559.63 3,542,559.63
Accounts receivable 299,315,776.44 295,616,359.63 -3,699,416.81
Receivables financing 442,500.00 442,500.00
Prepayments 6,410,257.48 6,410,257.48
Other receivables 67,227,575.21 67,227,575.21
Where: Interest receivable
Dividend receivable
Inventories 135,617,379.22 135,617,379.22
Contract assets 3,699,416.81 3,699,416.81
Assets held for sale
Non-current assets due within
one year
Other current assets 12,280,164.39 12,280,164.39
Total current assets 1,635,315,602.86 1,635,315,602.86
Non-current Assets:
Debt investments
Other debt investments
Long-term accounts receivable
Long-term equity investment 257,795,276.13 257,795,276.13
Investment in other equity 7,075,419.38 7,075,419.38
instruments
Other non-current financial
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assets
Investment property
Fixed assets 60,391,512.92 60,391,512.92
Construction in progress 1,385,496.59 1,385,496.59
Productive biological assets
Oil and gas assets
Use right assets
Intangible assets 330,796,423.87 330,796,423.87
Development expenditure
Goodwill
Long-term prepaid expenses 12,771,126.83 12,771,126.83
Deferred tax assets 9,545,438.20 9,545,438.20
Other non-current assets 6,744,453.85 6,744,453.85
Total non-current assets 686,505,147.77 686,505,147.77
Total assets 2,321,820,750.63 2,321,820,750.63
Current Liabilities:
Short-term borrowings 10,217,738.36 10,217,738.36
Held-for-trading financial
liabilities
Derivative financial liabilities
Notes payable 37,335,841.79 37,335,841.79
Accounts payable 162,596,838.45 162,596,838.45
Advance from customers 11,116,659.11 4,387,326.61 -6,729,332.50
Contract liabilities 6,485,831.14 6,485,831.14
Employee benefits payable 26,985,668.92 26,985,668.92
Taxes payable 1,534,242.70 1,534,242.70
Other payables 42,599,703.36 42,599,703.36
Where: Interest payable
Dividend payable
Liabilities held for sale
Non-current liabilities due
within one year
Other current liabilities 243,501.36 243,501.36
Total current liabilities 292,386,692.69 292,386,692.69
Non-current Liabilities:
Long-term borrowings
Bonds payable
Where: Preferred shares
Perpetual bonds
Leasing liabilities
Long-term payables 3,488,100.00 3,488,100.00
Long-term employee benefits
payable
Estimated liabilities 14,631,273.00 14,631,273.00
Deferred income 15,724,174.30 15,724,174.30
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities 33,843,547.30 33,843,547.30
Total liabilities 326,230,239.99 326,230,239.99
Owners’ Equity (Shareholders’ Equity):
Paid-in capital (or share 451,554,411.00 451,554,411.00
capital)
Other equity instruments
Where: Preferred shares
Perpetual bonds
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Capital reserve 1,310,939,867.82 1,310,939,867.82
Less: Treasury shares
Other comprehensive income
Special reserve
Surplus reserve 21,522,683.40 21,522,683.40
Undistributed profit 211,573,548.42 211,573,548.42
Total owners’ (or 1,995,590,510.64 1,995,590,510.64
shareholders’) equity
Total liabilities and 2,321,820,750.63 2,321,820,750.63
owners’ (or shareholders’) equity
Description of adjustments on each line item:
√ Applicable□ N/A
In accordance with the Accounting Standards for Business Enterprises No. 14 - Revenue (Cai Kuai
[2017] No. 2) issued by the Ministry of Finance on July 5, 2017, for enterprises listed in domestic and
oversea stock exchange concurrently and enterprises listed overseas with the financial statements
prepared under international financial reporting standards or accounting standards for business
enterprises, the New Revenue Standard shall be implemented from January 1, 2018; and for other
enterprises listed in domestically, the New Revenue Standard shall be implemented from January 1,
2020. As a domestic listed company, the Company adopted the New Revenue Standard as at January 1,
2020, and made adjustment on the opening balance of relevant item recognized in the financial
statements, but the data in comparable period can be unadjusted: (1) the goods payments received in
advance originally qualified for conditions of “receipts in advance” were charged to the line item of
“contract liability”; (2) the rights of the Company for collecting the considerations for goods that have
been transferred to customers, which rights depend on factors other than the lapse of time, were
presented as “contract assets”.
(4). Description of retrospective adjustments on comparable data in previous periods upon the
first adoption of the New Revenue Standard and new lease standard from 2020
□ Applicable√ N/A
45. Others
□ Applicable√ N/A
VI. Taxes
1. Major categories of taxes and tax rates
Description of major categories of taxes and tax rates
√ Applicable□ N/A
Category of tax Basis of tax computation Tax rate
Value-added tax (VAT) VAT payable is the difference of 3%, 6%, 9%, 13%
the output tax calculated based on
the incomes from selling goods
and taxable services in accordance
with the Tax Law, less the input
tax allowed to be reduced in the
period
City maintenance and Turnover tax payable 5%, 7%
construction tax
195 / 311
Annual Report 2020
Education surcharges Turnover tax payable 3%
Local education surcharges Turnover tax payable 2%
Enterprise income tax Taxable income 8.25%, 8.70%, 8.84%, 12.5%,
15%, 16.5%, 20%, 21%, 25%
Disclosure of taxpayers with different rates of enterprise income tax:
√ Applicable□ N/A
Taxpayer Rate of enterprise income tax (%)
Appotronics Corporation Limited 15.00
Formoive (Beijing) Technology Co., Ltd. 15.00
Shenzhen Appotronics Software Technology Co., 12.50
Ltd.
Appotronics Hong Kong Limited 8.25, 16.50
Beijing Orient Appotronics Technology Co., Ltd. 20.00
Fabulus Technology HongKong Limited 16.50
JoveAI Innovation, Inc. 8.70, 8.84, 21.00
Appotronics USA, Inc. 21.00
FORMOVIE TECHNOLOGY INC 21.00
JoveAI Limited Tax exemption
WEMAXLLC 21.00
Shenzhen Appotronics Display Device Co., Ltd. 20.00
Appotronics Technology (Changzhou) Co., Ltd. 20.00
Appotronics Timewaying (Beijing) Technology 20.00
Co., Ltd.
Qingda Appotronics (Xiamen) Technology Co., 20.00
Ltd.
Shenzhen Appotronics Home Line Technology Co., 20.00
Ltd.
Shenzhen Appotronics Laser Technology Co., Ltd. 20.00
Shenzhen Appotronics Xiaoming Technology Co., 20.00
Ltd.
JoveAI Asia Company Limited 20.00
Tianjin Bonian Film Partnership (LP) Tax exemption
Other taxpayers except above 25.00
Note:
1. Appotronics Hong Kong Limited, as domiciled in Hong Kong, one of which can apply the
two-level income tax system, namely, applying the tax rate of 8.25% for the first HKD 2 million taxable
income and 16.50% for the remaining taxable income.
2. JoveAI Limited, as domiciled in the Cayman Islands, is exempt from enterprise income tax.
3. Appotronics USA, Inc., as domiciled in the United States, applies the federal enterprise income
tax rate of 21%.
4. JoveAI Innovation, Inc., as domiciled in the United States, applies the federal enterprise income
tax rate of 21%, the California state enterprise income tax rate of 8.84%, and the Delaware state
enterprise income tax rate of 8.70%.
5. FORMOVIE TECHNOLOGY INC, as domiciled in the United States, applies the federal
enterprise income tax rate of 21%.
6. JoveAI Asia Company Limited, as domiciled in Vietnam, applies the enterprise income tax rate
of 20%.
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Annual Report 2020
7. WEMAX LLC, as domiciled in the United States, applies the federal enterprise income tax rate
of 21%.
2. Tax incentives
√ Applicable□ N/A
1. On December 9, 2019, the Company obtained the High-tech Enterprise Certificate (Certificate
No.: GR201944204257) jointly issued by Shenzhen Science and Technology Innovation Commission,
Shenzhen Finance Bureau and Shenzhen Tax Service of State Taxation Administration with a valid term
of three years. Therefore, the Company can pay the enterprise income tax at a rate of 15% from 2019 to
2021.
2. On November 30, 2018, Formoive (Beijing) Technology Co., Ltd. obtained the High-tech
Enterprise Certificate (Certificate No.: GR201811009590) jointly issued by Beijing Municipal Science
and Technology Commission, Beijing Finance Bureau and Beijing Tax Service of State Taxation
Administration with a valid term of three years. It can pay the enterprise income tax at a rate of 15%
since 2019.
3. In accordance with 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 and
Integrated Circuit Industries (Cai Shui (2012) No. 27), commencing from the first year of earning
profits prior to December 31,2017, a qualified company can be exempted from the enterprise income tax
for the first two years and enjoy a 50% tax reduction on the statutory tax rate of 25% from the third to
the fifth year until the tax incentive period expires. Therefore, Shenzhen Appotronics Software
Technology Co., Ltd. is qualified for the tax incentive policy of “exemption from income tax for the first
two years and 50% reduction for next three years”, which means, it can be exempted from enterprise
income tax from 2016 to 2017, and pay the enterprise income tax at a rate of 12.5% from 2018 to 2020.
4. 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), for
self-developed and produced software products sold by general VAT taxpayers, the
tax-refund-upon-collection policy is applicable to the part of their actual VAT burden in excess of 3%
after the VAT has been collected at a tax rate of 17%. Shenzhen Appotronics Software Technology Co.,
Ltd. is qualified for enjoying such tax incentive from January 1, 2015.
5. In accordance with Article 1 (26) of Annex 3 of the Notice of the Ministry of Finance and the
State Administration of Taxation on Implementing the Pilot Program of Replacing Business Tax with
Value-Added Tax in an All-round Manner (Cai Shui [2016] No. 36), taxpayers are exempted from VAT
if they provide technology transfer, technology development, and technology consultation and services
in connection therewith. The Company is qualified for enjoying such tax incentive from January 26,
2018.
6. In accordance with the Notice of the Ministry of Finance and the State Administration of
Taxation on Implementing the Inclusive Tax Deduction and Exemption Policies for Micro and Small
Enterprises (Cai Shui [2019] No. 13), the annual taxable income of a small low-profit enterprise that is
197 / 311
Annual Report 2020
not more than RMB 1 million shall be levied with the enterprise income tax rate at a discount of 25%,
namely, for which the applicable enterprise income tax rate is 20%; The following companies are
qualified for enjoying such tax incentives: Beijing Orient Appotronics Technology Co., Ltd., Shenzhen
Appotronics Display Device Co., Ltd., Appotronics Technology (Changzhou) Co., Ltd., Appotronics
Timewaying (Beijing) Technology Co., Ltd., Qingda Appotronics (Xiamen) Technology Co., Ltd.,
Shenzhen Appotronics Home Line Technology Co., Ltd., Shenzhen Appotronics Laser Technology Co.,
Ltd., and Shenzhen City Appotronics Xiaoming Technology Co., Ltd.
3. Others
□ Applicable√ N/A
VII. Notes to items in the consolidated financial statements
1. Cash and bank balances
√ Applicable□ N/A
In RMB
Item Closing balance Opening balance
Cash on hand 5,858.56 3,348.57
Bank deposits 1,020,747,657.62 857,708,997.58
Other monetary funds 17,007,057.09 18,146,438.43
Total 1,037,760,573.27 875,858,784.58
Where: Total oversea 78,611,378.23 132,334,643.95
deposits
Other information
In other monetary funds, an amount of RMB 14,057,949.58, as security deposits, is subject to
restriction in use; in bank deposits, an amount of RMB 40,000,000.00, as 3-year term deposits, is subject
to restriction in use, including the the deposit interests of RMB 177,534.25 which have been recognized
yet not matured.
2. Held-for-trading financial assets
√ Applicable□ N/A
In RMB
Item Closing balance Opening balance
Financial assets at fair value through 114,000,000.00 540,000,000.00
profit or loss
Where:
Structural deposits 114,000,000.00 540,000,000.00
Total 114,000,000.00 540,000,000.00
Other information:
□ Applicable√ N/A
3. Derivative financial assets
□ Applicable√ N/A
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Annual Report 2020
4. Notes receivable
(1). Categories of notes receivable
√ Applicable□ N/A
In RMB
Item Closing balance Opening balance
Bank acceptances 950,000.00 3,891,456.00
Commercial acceptances 2,776,328.91 151,103.63
Total 3,726,328.91 4,042,559.63
(2). Notes receivable pledged by the Company at the end of the period
□ Applicable√ N/A
(3). Notes receivable which are undue as at the balance sheet date but endorsed or discounted by
the Company at the end of the period
□ Applicable√ N/A
(4). Notes transferred to accounts receivable due to drawer's failure in cashing at the end of the
period
□ Applicable√ N/A
(5). Disclosure by categories of provision for bad debts
√ Applicable□ N/A
In RMB
Closing balance Opening balance
Bad debt Bad debt
Carrying amount Carrying amount
provision provision
Pe
rce
Per
nta
Catego cent
ge
Book age Book
ry Perce of Perce
value Amoun of value
Amount ntage Amount pr Amount ntage
t pro
(%) ov (%)
visi
isi
on
on
(%)
(%
)
3,872,451.48 100.00 146,122.57 3.77 3,726,328.91 4,050,512.45 100.00 7,952.82 0.20 4,042,559.63
Provisi
on for
bad
debts
made
by
group
Where:
950,000.00 24.53 950,000.00 3,891,456.00 96.07 3,891,456.00
Bank
accepta
nce
bills
2,922,451.48 75.47 146,122.57 5.00 2,776,328.91 159,056.45 3.93 7,952.82 5.00 151,103.63
Comm
ercial
accepta
nce
bills
3,872,451.48 / 146,122.57 / 3,726,328.91 4,050,512.45 / 7,952.82 / 4,042,559.63
Total
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Annual Report 2020
Provision for bad debts made individually:
□ Applicable√ N/A
Provision for bad debts made by group:
√ Applicable□ N/A
Item by group: Commercial acceptance bills and bank acceptance bills
In RMB
Closing balance
Name Proportion of provision
Notes receivable Bad debt provision
(%)
Commercial 2,922,451.48 146,122.57 5.00
acceptance bills
Bank acceptance bills 950,000.00
Total 3,872,451.48 146,122.57 3.77
Recognition criterion to make the bad debt provision by group and explanation
□ Applicable√ N/A
If a provision for bad debts of accounts receivable is made in accordance with the general model of ECL,
please disclose relevant information subject to the disclosure of the bad debt provision for other
receivables:
□ Applicable√ N/A
(6). Provision for bad debts
√ Applicable□ N/A
In RMB
Changes for the current period
Opening Closing
Category Recovery or Write off or
balance Provision balance
reversal cancellation
Commercial 7,952.82 138,169.75 146,122.57
acceptance bills
Total 7,952.82 138,169.75 146,122.57
Including significant amounts recovered or reversed from the current provision for bad debts:
□ Applicable√ N/A
Other information:
None
(7). Notes receivable actually canceled in the current period
□ Applicable√ N/A
Other information
□ Applicable√ N/A
5. Accounts receivable
(1). Disclosure by aging
√ Applicable□ N/A
In RMB
Aging Closing balance of carrying amount
Within 1 year
Where: Subitems within 1 year
Subtotal of items within 1 year 356,184,003.08
1 to 2 years 3,172,319.46
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Annual Report 2020
2 to 3 years 1,813,579.86
Over 3 years 176,358.49
Total 361,346,260.89
(2). Disclosure by categories of provision for bad debts
√ Applicable□ N/A
In RMB
Closing balance Opening balance
Carrying amount Bad debt provision Carrying amount Bad debt provision
Category Percentage Percentage
Book B
Percentage of Percentage of
Amount Amount value Amount Amount va
(%) provision (%) provision
(%) (%)
361,346,260.89 100.00 19,685,428.46 5.45 341,660,832.43 203,746,783.87 100.00 12,124,071.86 5.95 191,6
Provision
for bad
debts
made by
group
Where:
361,346,260.89 100.00 19,685,428.46 5.45 341,660,832.43 203,746,783.87 100.00 12,124,071.86 5.95 191,6
Accounts
receivable
for which
the
provision
for bad
debts is
made by
aging
group
361,346,260.89 19,685,428.46 341,660,832.43 203,746,783.87 12,124,071.86 191,6
Total / / / /
Provision for bad debts made individually:
□ Applicable√ N/A
Provision for bad debts made by group:
√ Applicable□ N/A
Item by group: Amounts for which provisions for bad debts are made by aging group
In RMB
Closing balance
Name Proportion of provision
Accounts receivable Bad debt provision
(%)
Within 1 year 356,184,003.08 17,809,200.17 5.00
1-2 years 3,172,319.46 793,079.87 25.00
2-3 years 1,813,579.86 906,789.93 50.00
Over 3 years 176,358.49 176,358.49 100.00
Total 361,346,260.89 19,685,428.46 5.45
Recognition criterion to make the bad debt provision by group and explanation:
√ Applicable□ N/A
[Note]: The difference between the opening balance of the year and the closing balance of the prior year
(as of December 31, 2019) can refer to V.44 of Section XI for details.
201 / 311
Annual Report 2020
If a provision for bad debts of accounts receivable is made in accordance with the general model of ECL,
please disclose relevant information subject to the disclosure of the bad debt provision for other
receivables:
□ Applicable√ N/A
(3). Provision for bad debts
√ Applicable□ N/A
In RMB
Changes for the current period
Opening Recovery Closing
Category Write off or Other
balance Provision or balance
cancellation changes
reversal
Provision 12,124,071.86 7,932,055.78 370,699.18 19,685,428.46
for bad
debts made
by group
Total 12,124,071.86 7,932,055.78 370,699.18 19,685,428.46
Including significant amounts recovered or reversed from the current provision for bad debts:
□ Applicable√ N/A
(4). Accounts receivable actually canceled in the current period
√ Applicable□ N/A
In RMB
Item Cancellation amount
Accounts receivable actually canceled 370,699.18
Accounts receivable actually canceled in the current period are RMB 370,699.18.
In which significant amounts canceled are described as below:
□ Applicable√ N/A
Description of accounts receivable cancellation:
□ Applicable√ N/A
(5). Top five closing balances of accounts receivable categorized by debtors
√ Applicable□ N/A
Proportion to
the balance of
Entity Carrying amount Bad debt provision
accounts
receivable (%)
Xiaomi Communications Technologies Co.,
248,915,862.75 68.89 12,445,793.14
Ltd. and its affiliates
Beijing Jingdong Century Trading Co., Ltd. 28,421,997.22 7.87 1,421,099.86
Shenzhen Sunvalley Technology Development 22,790,393.35 6.31 1,139,519.67
Co., Ltd.
CFEC and its affiliates 6,125,422.64 1.70 306,402.16
BARCO 5,797,205.70 1.60 289,860.29
Subtotal 312,050,881.66 86.37 15,602,675.12
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Annual Report 2020
The total of top five closing balances of accounts receivable is RMB 312,050,881.66, representing
86.37% of the total closing balance of accounts receivable; the total provision for bad debts is RMB
15,602,675.12.
(6). Accounts receivable derecognized due to transfer of financial assets
□ Applicable√ N/A
(7). Assets and liabilities arising from transfer of accounts receivable and continued involvement
□ Applicable√ N/A
Other information:
□ Applicable√ N/A
6. Receivables financing
√ Applicable□ N/A
In RMB
Item Closing balance Opening balance
Bank acceptance bills receivable 11,959,000.00 1,980,500.00
Total 11,959,000.00 1,980,500.00
Changes in amount and fair value of receivables financing:
□ Applicable√ N/A
If a provision for bad debts of accounts receivable is made in accordance with the general model of ECL,
please disclose relevant information subject to the disclosure of the bad debt provision for other
receivables:
□ Applicable√ N/A
Other information:
√ Applicable□ N/A
1) Receivables financing for which provision for impairment is made by group
Closing balance
Item Percentage of provision
Carrying amount Provision for impairment
(%)
Group of bank
11,959,000.00
acceptance bills
Subtotal 11,959,000.00
2) Receivables financing which is undue as at the balance sheet date but endorsed or discounted by
the Company at the end of the period
Item Amount derecognized at the end of the Amount not derecognized at the
period end of the period
Group of bank acceptance 1,014,000.00
bills
Subtotal 1,014,000.00
The acceptors of bank acceptance bills are commercial banks. Because commercial banks always have
high credit ratings, it is less probable that bank acceptance bills will not get paid upon maturity;
therefore, the Company has derecognized endorsed or discounted bank acceptance bills. However, if
such notes are unable to be paid at maturity, the Company will still be jointly and severally liable to the
note holders pursuant to the Negotiable Instruments Law.
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Annual Report 2020
7. Prepayments
(1). Disclosure of prepayments by aging
√ Applicable□ N/A
In RMB
Closing balance Opening balance
Aging
Amount Percentage (%) Amount Percentage (%)
Within 1 43,761,018.81 92.23 34,948,314.45 99.65
year
1 to 2 years 3,686,582.62 7.77 122,684.68 0.35
Total 47,447,601.43 100.00 35,070,999.13 100.00
Reasons for overdue settlement of prepayments with significant amounts aged more than 1 year:
Entity Closing balance Reason for not settled
CFEC and its affiliates 2,341,035.38 Not mature
Subtotal 2,341,035.38
(2). Top five closing balances of prepayments categorized by receivers
√ Applicable□ N/A
Proportion to the
Entity Carrying amount balance of prepayments
(%)
CVTE and its affiliates 22,408,429.84 47.23
Soraa Laser Diode, Inc 5,872,410.00 12.38
CFEC and its affiliates 3,107,696.59 6.55
GDC and its affiliates 2,883,384.53 6.08
Shenzhen Colorwin Optical Technology Co., Ltd. 1,263,328.23 2.66
Subtotal 35,535,249.19 74.90
Other information
□ Applicable√ N/A
8. Other receivables
Presented by items
√ Applicable□ N/A
In RMB
Item Closing balance Opening balance
Interest receivable
Dividend receivable
Other receivables 12,534,062.15 9,618,750.08
Total 12,534,062.15 9,618,750.08
Other information:
□ Applicable√ N/A
204 / 311
Annual Report 2020
Interest receivable
(1). Categories of interest receivable
□ Applicable√ N/A
(2). Significant interests overdue
□ Applicable√ N/A
(3). Provision for bad debts
□ Applicable√ N/A
Other information:
□ Applicable√ N/A
Dividends receivable
(4). Dividends receivable
□ Applicable√ N/A
(5). Dividends receivable with significant amounts aged more than 1 year
□ Applicable√ N/A
(6). Provision for bad debts
□ Applicable√ N/A
Other information:
□ Applicable√ N/A
Other receivables
(7). Disclosure by aging
√ Applicable□ N/A
In RMB
Aging Closing balance of carrying amount
Within 1 year
Where: Subitems within 1 year
Subtotal of items within 1 year 6,425,814.44
1 to 2 years 5,229,091.10
2 to 3 years 551,775.00
Over 3 years 967,062.60
Total 13,173,743.14
(8). Categories by the nature of other receivables
√ Applicable□ N/A
In RMB
Closing balance of carrying Opening balance of carrying
Nature of other receivables
amount amount
Deposits/margins/petty cash 8,832,850.67 8,772,420.22
Withholding 380,123.97 1,275,175.63
Temporary receivables 383,488.89 10,289.71
Compensation receivable 3,577,279.61
Total 13,173,743.14 10,057,885.56
(9). Provision for bad debts
√ Applicable□ N/A
In RMB
205 / 311
Annual Report 2020
Stage I Stage II Stage III
Bad debt Lifetime ECL
12-month ECL Lifetime ECL (with Total
provision (without credit
in the future credit impairment)
impairment)
Balance as at 439,035.48 100.00 439,135.48
January 1, 2020
Balance as at
January 1, 2020 in
the current period
--transferred to
Stage II
--transferred to -6,300.00 6,300.00
Stage III
--reversed to Stage
II
--reversed to Stage 100.00 -100.00
I
Provision 206,845.51 206,845.51
Reversal
Write-off
Cancellation 6,300.00 6,300.00
Other changes
Balance as at 639,680.99 639,680.99
December 31,
2020
Description of significant changes in the balance of other receivables with changed provisions for losses
in the current period:
□ Applicable√ N/A
Basis for recognizing the amount of bad debt provisions and evaluating whether the credit risk of
financial instruments has been increased significantly in the current period:
□ Applicable√ N/A
(10). Provision for bad debts
√ Applicable□ N/A
In RMB
Changes for the current period
Opening Closing
Category Recovery Write off or Other
balance Provision balance
or reversal cancellation changes
Provision for 439,135.48 206,745.51 100.00 6,300.00 639,680.99
bad debts made
by group
Total 439,135.48 206,745.51 100.00 6,300.00 639,680.99
Including significant amounts recovered or reversed from the current provision for bad debts:
□ Applicable√ N/A
(11). Other receivables actually canceled in the current period
√ Applicable□ N/A
In RMB
Item Cancellation amount
Other receivables actually canceled 6,300.00
In which significant amounts canceled are described as below:
□ Applicable√ N/A
206 / 311
Annual Report 2020
Description of other receivables cancellation:
□ Applicable√ N/A
(12). Top five closing balances of other receivables categorized by debtors
√ Applicable□ N/A
In RMB
Proportion to
Closing
the balance of
Nature of other Closing balance of
Entity Aging other
receivables balance bad debt
receivables
provision
(%)
Creator Compensation 3,577,279.61 Within 27.15 178,863.98
Community receivable 1 year
(Guangzhou)
Co., Ltd.
Shenzhen Deposits/margins/petty 3,574,618.00 2-3 27.13 178,730.89
Meisheng cash years
Industry Co.,
Ltd.
Shenzhen Deposits/margins/petty 1,310,675.20 Within 9.95 65,533.76
Science and cash 1 year,
Technology 1-3
Assessment years,
Management over 3
Center years
Hong Kong Deposits/margins/petty 1,022,956.60 1-2 7.77 51,147.86
Science & cash years
Technology
Parks
Corporation
Beijing Deposits/margins/petty 652,594.38 Within 4.95 32,629.72
Dongsheng cash 1 year
Bozhan
Technology
Development
Co., Ltd.
Total / 10,138,123.79 / 76.95 506,906.21
(13). Accounts receivable involving government grants
□ Applicable√ N/A
(14). Other receivables derecognized due to transfer of financial assets
□ Applicable√ N/A
(15). Assets and liabilities arising from transfer of other receivables and continued involvement
□ Applicable√ N/A
Other information:
□ Applicable√ N/A
207 / 311
Annual Report 2020
9. Inventories
(1). Categories of inventories
√ Applicable□ N/A
In RMB
Closing balance Opening balance
Provision for Provision for
decline in value of decline in value of
Item Carrying Book Carrying Book
inventories/impair inventories/impair
amount value amount value
ment of contract ment of contract
performance cost performance cost
Raw 243,262,463. 12,343,116.67 230,919,347. 169,021,593. 18,901,716.15 150,119,877.
77 10 23 08
material
s
Work in 23,130,163.7 533,475.37 22,596,688.3 12,337,519.0 686,431.07 11,651,087.9
2 5 2 5
progress
Goods 152,306,656. 17,204,698.44 135,101,957. 95,889,640.2 20,855,142.36 75,034,497.9
10 66 9 3
on hand
Goods 15,345,357.0 15,345,357.0 40,421,349.5 40,421,349.5
8 8 1 1
upon
delivery
Material 15,064,657.0 215,866.48 14,848,790.6 6,405,637.99 21,590.33 6,384,047.66
9 1
s for
consigne
d
processi
ng
Total 449,109,297. 30,297,156.96 418,812,140. 324,075,740. 40,464,879.91 283,610,860.
76 80 04 13
[Note]: The difference between the opening balance of the year and the closing balance of the prior
year (as of December 31, 2019) can refer to V.44 of Section XI for details.
(2). Provision for decline in value of inventories and impairment of contract performance cost
√ Applicable□ N/A
In RMB
Increase Decrease
Opening Closing
Item Reversal or
balance Provision Others Others balance
write-off
18,901,716.15 1,311,601.56 7,870,201.04 12,343,116.67
Raw materials
686,431.07 549,183.59 702,139.29 533,475.37
Work in progress
20,855,142.36 8,112,748.17 11,763,192.09 17,204,698.44
Goods on hand
21,590.33 200,516.97 6,240.82 215,866.48
Materials for
consigned
processing
40,464,879.91 10,174,050.29 20,341,773.24 30,297,156.96
Total
Specify reasons for specific determination basis of net realizable value, and reversal or write-off of the
provision for decline in value of inventories
Reason for writing off the
provisions for decline in
Item Specific basis for determining the net realizable value
value of inventories in the
current period
208 / 311
Annual Report 2020
The Company has
The net realizable value of raw materials is determined as the consumed/sold the
historical average selling price or actual average selling price of inventories for which a
Raw
finished goods in the ordinary course of business less the provision for decline in
materials
estimated costs of completion, and the estimated costs value has been made at the
necessary to make the sale and relevant taxes. beginning of the current
period.
The Company has consumed
The net realizable value of work in progress is determined as
the inventories for which a
the historical average selling price or actual average selling
Work in provision for decline in
price of finished goods in the ordinary course of business less
progress value has been made at the
the estimated costs of completion, and the estimated costs
beginning of the current
necessary to make the sale and relevant taxes.
period.
The Company has
consumed/sold the
For inventories directly used for sale, the net realizable value is
Goods on inventories for which a
determined as the historical average selling price or actual
provision for decline in
hand average selling price less the estimated costs necessary to make
value has been made at the
the sale and relevant taxes.
beginning of the current
period.
(3). Description of capitalized amount of borrowing costs included in the closing balance of
inventories
□ Applicable√ N/A
(4). Description of amortization of contract performance cost during the period
□ Applicable√ N/A
Other information
□ Applicable√ N/A
10. Contract assets
(1). Description of contract assets
√ Applicable□ N/A
In RMB
Closing balance Opening balance
Provision
Item Carrying Provision for Carrying
Book value for Book value
amount impairment amount
impairment
Warranty 492,467.50 181,635.38 310,832.12 150,233.80 7,511.69 142,722.11
security
receivable
Goods 4,842,771.16 1,408,947.78 3,433,823.38 3,787,246.16 189,362.31 3,597,883.85
payment
Total 5,335,238.66 1,590,583.16 3,744,655.50 3,937,479.96 196,874.00 3,740,605.96
[Note]: The difference between the opening balance of the year and the closing balance of the prior
year (as of December 31, 2019) can refer to V.44 of Section XI for details.
Amount and reasons of major changes in the book value during the reporting period
□ Applicable√ N/A
(2). Description of provision for impairment made on contract assets during the period
√ Applicable□ N/A
In RMB
Item Provision Reversal Write-off/cancellation Reason
209 / 311
Annual Report 2020
in the period
Provision made by 1,393,709.16
group
Total 1,393,709.16 /
If a provision for bad debts of accounts receivable is made in accordance with the general model of
ECL, please disclose relevant information subject to the disclosure of the bad debt provision for other
receivables:
□ Applicable√ N/A
Other information:
√ Applicable□ N/A
Contract assets for which provision for impairment is made by aging group
Closing balance
Aging
Carrying amount Bad debt provision Percentage of provision (%)
Within 1 year 163,132.50 8,156.63 5.00
1-2 years 4,014,506.16 1,003,626.53 25.00
2-3 years 1,157,600.00 578,800.00 50.00
Subtotal 5,335,238.66 1,590,583.16 29.81
11. Held-for-sale assets
□ Applicable√ N/A
12. Non-current assets due within one year
□ Applicable√ N/A
Debt investments and other debt investments with significant amounts at the end of the period
□ Applicable√ N/A
Other information
None
13. Other current assets
√ Applicable□ N/A
In RMB
Item Closing balance Opening balance
Cost of returned goods receivable 1,381,990.01
Input VAT to be deducted 11,338,961.82 37,976,562.19
Prepaid enterprise income tax 281,243.63 4,088,325.91
Total 13,002,195.46 42,064,888.10
Other information
[Note]: The difference between the opening balance of the year and the closing balance of the prior year
(as of December 31, 2019) can refer to V.44 of Section XI for details.
14. Debt investments
(1). Description of debt investments
□ Applicable√ N/A
210 / 311
Annual Report 2020
(2). Debt investments with significant amounts at the end of the period
□ Applicable√ N/A
(3). Description of provision for impairment
□ Applicable√ N/A
Basis for recognizing the amount of provisions for impairment and evaluating whether the credit risk of
financial instruments has been increased significantly in the current period
□ Applicable√ N/A
Other information
□ Applicable√ N/A
15. Other debt investments
(1). Description of other debt investments
□ Applicable√ N/A
(2). Other debt investments with significant amounts at the end of the period
□ Applicable√ N/A
(3). Description of provision for impairment
□ Applicable√ N/A
Basis for recognizing the amount of provisions for impairment and evaluating whether the credit risk of
financial instruments has been increased significantly in the current period
□ Applicable√ N/A
Other information:
□ Applicable√ N/A
16. Long-term receivables
(1). Description of long-term receivables
√ Applicable□ N/A
In RMB
Closing balance Opening balance Range
of
Item Carrying Bad debt Carrying Bad debt Book
Book value discount
amount provision amount provision value
rate
Goods sold on 15,000,000.00 750,000.00 14,250,000.00
installment payment
Less: Financing 1,053,912.22 1,053,912.22
income not realized
Total 13,946,087.78 750,000.00 13,196,087.78 /
(2). Provision for bad debts
√ Applicable□ N/A
In RMB
Stage I Stage II Stage III
Bad debt Lifetime ECL
12-month ECL Lifetime ECL (with Total
provision (without credit
in the future credit impairment)
impairment)
Balance as at
January 1, 2020
Balance as at
January 1, 2020 in
the current period
211 / 311
Annual Report 2020
--transferred to
Stage II
--transferred to
Stage III
--reversed to Stage
II
--reversed to Stage
I
Provision 750,000.00 750,000.00
Reversal
Write-off
Cancellation
Other changes
Balance as at 750,000.00 750,000.00
December 31,
2020
Description of significant changes in the balance of long-term receivables with changed provisions for
losses in the current period:
□ Applicable√ N/A
Basis for recognizing the amount of bad debt provisions and evaluating whether the credit risk of
financial instruments has been increased significantly in the current period
□ Applicable√ N/A
(3). Long-term receivables derecognized due to transfer of financial assets
□ Applicable√ N/A
(4). Assets and liabilities arising from transfer of long-term receivables and continued
involvement
□ Applicable√ N/A
Other information
□ Applicable√ N/A
212 / 311
Annual Report 2020
17. Long-term equity investments
√ Applicable□ N/A
In RMB
Changes for the current period Closing
Investmen Declared balance of
Adjustment in Other Provision
Opening Decreased t profit or cash Closing provision
Investees Additional other equity for
Balance investmen loss under dividend Others Balance for
investment comprehensiv change impairmen
t equity s or impairmen
e income s t
method profits t
I. Joint venture
Subtotal
II. Associates
Cinionic 139,534,371.9 -1,301,454.86 2,313,729.34 -9,140,221.7 131,406,424.6
Limited 8 4
4
GDC 809,247.05 12,332,520.01 131,338,347.8
118,196,580.7
Technolog 4
y Limited 8
(BVI)
Subtotal 139,534,371.9 118,196,580.7 -492,207.81 14,646,249.35 -9,140,221.7 262,744,772.4
4 8 8 8
139,534,371.9 118,196,580.7 -492,207.81 14,646,249.35 -9,140,221.7 262,744,772.4
Total
4 8 8 8
Other information
None
213 / 311
Annual Report 2020
18. Other equity instrument investments
(1). Description of other equity instrument investments
√ Applicable□ N/A
In RMB
Item Closing balance Opening balance
Shen Zhen Timewaying Technology 7,075,419.38 7,075,419.38
Co., Ltd.
Shenzhen Bevix Technology Co., Ltd. 4,900,000.00 4,900,000.00
Total 11,975,419.38 11,975,419.38
(2). Description of equity investments not held for trading
√ Applicable□ N/A
In RMB
Reasons for
Reasons for
Dividends Amounts to designating
transferring
income retained as financial
to retained
recognize Accumulate Accumulate earnings from assets at fair
Item earnings from
d for the d gains d losses other value through
other
current comprehensiv other
comprehensiv
period e income comprehensiv
e income
e income
Shen Zhen Subject to the
Timewayin management'
g s intention of
Technolog holding
y Co., Ltd.
Shenzhen Subject to the
Bevix management'
Technolog s intention of
y Co., Ltd. holding
Other information:
√ Applicable□ N/A
The Company's equity investments in Shen Zhen Timewaying Technology Co., Ltd. and Shenzhen
Bevix Technology Co., Ltd. are mainly for promoting future business cooperation rather than making
transactions, hence they are designated as investments in equity instruments at fair value through other
comprehensive income.
19. Other non-current financial assets
□ Applicable√ N/A
214 / 311
Annual Report 2020
Other information:
□ Applicable√ N/A
20. Investment properties
Measurement mode of investment properties
N/A
21. Fixed assets
Presented by items
√ Applicable□ N/A
In RMB
Item Closing balance Opening balance
Fixed assets 447,571,328.91 471,204,340.95
Disposal of fixed assets
Total 447,571,328.91 471,204,340.95
Other information:
□ Applicable√ N/A
Fixed assets
(1). Description of fixed assets
√ Applicable□ N/A
In RMB
Electronic
Machinery and Transportation Operating leased
Item equipment Total
equipment equipment equipment
and others
I. Cost
1. Opening
82,619,598.35 1,020,400.05 31,265,315.39 525,597,112.41 640,502,426.20
balance
2. Increase 29,428,206.55 9,038,415.39 47,985,469.41 86,452,091.35
(1) Purchase 28,891,627.63 8,898,200.65 37,789,828.28
(2) Transfer
from
47,985,469.41 47,985,469.41
construction in
progress
(3) Transfer
536,578.92 140,214.74 676,793.66
from inventories
3. Decrease 8,153,090.95 2,985,169.50 10,288,683.02 21,426,943.47
(1) Disposal or
4,074,815.63 2,830,201.69 1,728,450.18 8,633,467.50
retirement
(2) Transfer to
4,078,275.32 154,967.81 8,560,232.84 12,793,475.97
inventories
4. Closing
103,894,713.95 1,020,400.05 37,318,561.28 563,293,898.80 705,527,574.08
balance
215 / 311
Annual Report 2020
II. Accumulated
depreciation
1. Opening
29,391,420.36 292,223.86 12,083,558.96 127,530,882.07 169,298,085.25
balance
2. Increase 17,784,983.00 155,448.37 6,892,606.16 74,396,648.69 99,229,686.22
(1) Provision 17,784,983.00 155,448.37 6,892,606.16 74,396,648.69 99,229,686.22
3. Decrease 5,647,833.21 1,866,778.03 3,056,915.06 10,571,526.30
(1) Disposal or
3,425,829.91 1,734,910.89 545,039.96 5,705,780.76
retirement
(2) Transfer to 2,222,003.30 131,867.14 2,511,875.10 4,865,745.54
inventories
4. Closing
41,528,570.15 447,672.23 17,109,387.09 198,870,615.70 257,956,245.17
balance
III. Provision for
impairment
1. Opening
balance
2. Increase
(1) Provision
3. Decrease
(1) Disposal or
retirement
4. Closing
balance
IV. Book value
1. Closing
62,366,143.80 572,727.82 20,209,174.19 364,423,283.10 447,571,328.91
balance
2. Opening
53,228,177.99 728,176.19 19,181,756.43 398,066,230.34 471,204,340.95
balance
(2). Temporarily idle fixed assets
□ Applicable√ N/A
(3). Fixed assets acquired under finance lease
□ Applicable√ N/A
(4). Fixed assets leased out under operating lease
√ Applicable□ N/A
In RMB
Item Closing balance of carrying amount
Operating leased equipment 364,423,283.10
Total 364,423,283.10
216 / 311
Annual Report 2020
(5). Fixed assets of which certificates of title have not been obtained
□ Applicable√ N/A
Other information:
□ Applicable√ N/A
Disposal of fixed assets
□ Applicable√ N/A
22. Construction in progress
Presented by items
√ Applicable□ N/A
In RMB
Item Closing balance Opening balance
Construction in progress
51,576,850.72 20,132,004.07
Materials for construction
Total 51,576,850.72 20,132,004.07
Other information:
□ Applicable√ N/A
Construction in progress
(1). Description of construction in progress
√ Applicable□ N/A
In RMB
Closing balance Opening balance
Provision Provision
Item Carrying for Carrying for
Book value Book value
amount impairmen amount impairmen
t t
Headquarte 37,982,329.7 37,982,329.7 1,385,496.59 1,385,496.59
r buildings 4 4
Light 13,594,520.9 13,594,520.9 18,746,507.4 18,746,507.4
sources to 8 8 8 8
be leased
51,576,850.72 51,576,850.72 20,132,004.0 20,132,004.0
Total
7 7
(2). Changes in significant constructions in progress for the current period
√ Applicable□ N/A
In RMB
217 / 311
Annual Report 2020
Amo
unt Whe
Am
injec Amo re: Intere
ount
ted unt of Capit st
Op tran
Oth as a Const accu alize capita
Bud eni sferr Clos
er prop ructio mulat d lizatio Sour
get ng Incr ed ing
Item dec ortio n ed inter n rate ce of
amo bal ease to bala
reas n of progr capita est for funds
unt anc fixe nce
es budg ess lized for the
e d
et intere the period
asse
amo st perio (%)
ts
unt d
(%)
Hea 534,6 1,385, 36,59 37,98 7.10 7.10 Self-
dqua 35,20 496.5 6,833. 2,329. fund
rter 0.00 9 15 74 ed
build capit
ings al
Ligh 18,74 42,83 47,98 13,59 Self-f
t 6,507. 3,482. 5,469. 4,520. unded
sour 48 91 41 98 capita
ces l
to be
lease
d
534,6 20,13 79,43 47,98 51,57 / / / /
Tota
35,20 2,004. 0,316. 5,469. 6,850.
l
0.00 07 06 41 72
(3). Provision for impairment losses for construction in progress in the current period
□ Applicable√ N/A
Other information
□ Applicable√ N/A
Materials for construction
(4). Description of materials for construction
□ Applicable√ N/A
23. Productive biological assets
(1). Productive biological assets measured at cost
□ Applicable√ N/A
218 / 311
Annual Report 2020
(2). Productive biological assets measured at fair value
□ Applicable√ N/A
Other information
□ Applicable√ N/A
24. Oil and gas assets
□ Applicable√ N/A
25. Use right assets
□ Applicable√ N/A
26. Intangible assets
(1). Description of intangible assets
√ Applicable□ N/A
In RMB
Item Land use rights Patents Software Total
I. Cost
1. Opening 330,630,000.00 23,247,800.00 10,196,548.78 364,074,348.78
balance
2. Increase 3,799,807.03 3,799,807.03
(1) Purchase 3,799,807.03 3,799,807.03
3. Decrease
(1) Disposal
4. Closing balance 330,630,000.00 23,247,800.00 13,996,355.81 367,874,155.81
II. Accumulated
amortization
1. Opening 16,531,500.06 12,535,490.06 2,676,034.59 31,743,024.71
balance
2. Increase 11,021,000.04 2,324,780.04 2,297,115.42 15,642,895.50
(1) Provision 11,021,000.04 2,324,780.04 2,297,115.42 15,642,895.50
3. Decrease
(1) Disposal
4. Closing balance 27,552,500.10 14,860,270.10 4,973,150.01 47,385,920.21
III. Provision for
impairment
1. Opening
balance
2. Increase
(1) Provision
3. Decrease
(1) Disposal
219 / 311
Annual Report 2020
4. Closing balance
IV. Book value
1. Closing balance 303,077,499.90 8,387,529.90 9,023,205.80 320,488,235.60
2. Opening 314,098,499.94 10,712,309.94 7,520,514.19 332,331,324.07
balance
The proportion of intangible assets generated by the Company's internal research and development to the
balance of intangible assets at the end of the period is 0.
(2). Land use rights of which certificates of title have not been obtained
□ Applicable√ N/A
Other information:
□ Applicable√ N/A
27. Development expenditure
□ Applicable√ N/A
28. Goodwill
(1). Original book value of goodwill
□ Applicable√ N/A
(2). Impairment provision of goodwill
□ Applicable√ N/A
(3). Relevant information of groups of assets or combinations of groups of assets where the
goodwill is recognized
□ Applicable√ N/A
(4). Specify test procedure, key parameters of impairment of goodwill (such as increase rate at the
projection period, increase rate at the steady period, profit rate, discount rate, and projection
period upon the estimates of the presented value of future cash flow) as well as recognition
method for impairment loss
□ Applicable√ N/A
(5). Impacts on test of goodwill impairment
□ Applicable√ N/A
Other information
□ Applicable√ N/A
29. Long-term prepaid expenses
√ Applicable□ N/A
220 / 311
Annual Report 2020
In RMB
Item Opening Increase Amortization Other Closing balance
balance decreases
Renovation 16,908,070.34 943,824.91 6,831,616.68 11,020,278.57
costs
Leased 844,339.62 292,271.40 552,068.22
software
Total 16,908,070.34 1,788,164.53 7,123,888.08 11,572,346.79
Other information:
None
30. Deferred tax assets and deferred tax liabilities
(1). Deferred tax assets that are not offset
√ Applicable□ N/A
In RMB
Closing balance Opening balance
Deductible Deductible
Item Deferred tax Deferred tax
temporary temporary
assets assets
difference difference
Provision for 28,773,276.08 4,625,714.28 35,664,470.56 5,836,098.21
impairment of assets
Unrealized profits for 343,108,987.56 85,451,876.99 382,370,535.17 95,185,982.07
insider transactions
Deductible losses 3,339,193.87 834,798.46
Estimated liabilities 24,854,195.43 4,578,959.70 25,267,517.71 4,667,623.73
Deferred income 15,797,285.68 2,504,280.31 16,475,547.96 2,546,469.56
Share-based payment 639,138.44 101,038.96 4,987,200.41 787,768.28
expenses
Total 416,512,077.06 98,096,668.70 464,765,271.81 109,023,941.85
(2). Deferred tax liabilities that are not offset
√ Applicable□ N/A
In RMB
Closing balance Opening balance
Taxable Taxable
Item Deferred tax Deferred tax
temporary temporary
liabilities liabilities
differences differences
Appreciation from
valuation of assets from
business combination not
involving enterprises
221 / 311
Annual Report 2020
under common control
Changes in fair value of
other debt investments
Changes in fair value of
investments in other
equity instruments
Long-term accounts 13,097,031.17 1,964,554.68
receivable
Total 13,097,031.17 1,964,554.68
(3). Deferred tax assets and deferred tax liabilities that are presented at the net amount after
offset
√ Applicable□ N/A
In RMB
Closing set-off Closing balance Opening set-off Opening balance
amounts of of deferred tax amount of of deferred tax
Item deferred tax assets or deferred tax assets or
assets and liabilities after assets and liabilities after
liabilities set-off liabilities set-off
Deferred tax assets 1,964,554.68 96,132,114.02 109,023,941.85
Deferred tax liabilities
(4). Details of unrecognized deferred tax assets
√ Applicable□ N/A
In RMB
Item Closing balance Opening balance
Deductible temporary 47,569,632.05 32,593,450.49
differences
Deductible losses 275,961,696.98 155,147,494.11
Total 323,531,329.03 187,740,944.60
(5). Deductible losses, for which no deferred tax assets are recognized, will expire in the following
years
√ Applicable□ N/A
In RMB
Year Closing balance Opening balance Remark
2021 9,487,530.31 9,487,530.31
2022 11,900,329.00 11,900,329.00
2023 47,115,450.59 47,115,450.59
2024 86,745,720.01 86,644,184.21
2025 120,712,667.07
Total 275,961,696.98 155,147,494.11 /
222 / 311
Annual Report 2020
Other information:
□ Applicable√ N/A
31. Other non-current assets
√ Applicable□ N/A
In RMB
Closing balance Opening balance
Carrying Provision Carrying Provision
Item amount for amount for
Book value Book value
impairmen impairmen
t t
Prepaymen 6,299,781.0 6,299,781.0 11,420,185.9 11,420,185.9
t for 6 6 4 4
purchase of
long-term
assets
6,299,781.0 6,299,781.0 11,420,185.9 11,420,185.9
Total
6 6 4 4
Other information:
None
32. Short-term borrowings
(1). Categories of short-term borrowings
√ Applicable□ N/A
In RMB
Item Closing balance Opening balance
Pledge borrowings
Mortgage borrowings
Guaranteed loans 77,223,937.39 50,000,000.00
Credit loans 11,299,169.33
Credit and pledge borrowings 10,000,000.00
Guaranteed loans and loans 16,337,875.56
against collateral
Interest payable 255,746.14 427,443.49
Total 88,778,852.86 76,765,319.05
Description for categories of short-term borrowings:
None
(2). Short-term borrowings overdue but not yet repaid
□ Applicable√ N/A
223 / 311
Annual Report 2020
Of which the significant overdue short-term borrowings are described as below:
□ Applicable√ N/A
Other information
□ Applicable√ N/A
33. Held-for-trading financial liabilities
□ Applicable√ N/A
34. Derivative financial liabilities
□ Applicable√ N/A
35. Notes payable
Presented by notes payable
√ Applicable□ N/A
In RMB
Category Closing balance Opening balance
Commercial acceptance
bills
Bank acceptance bills 116,822,674.67 37,335,841.79
Total 116,822,674.67 37,335,841.79
Total notes payable matured but not paid yet is RMB 0 at the end of the period.
36. Accounts payable
(1). Presented by accounts payable
√ Applicable□ N/A
In RMB
Item Closing balance Opening balance
Amounts payable for purchase 226,494,815.90 176,624,445.46
Total 226,494,815.90 176,624,445.46
(2). Accounts payable with significant amounts aged more than 1 year
□ Applicable√ N/A
Other information
□ Applicable√ N/A
37. Receipts in advance
(1). Presented by receipts in advance
√ Applicable□ N/A
In RMB
Item Closing balance Opening balance
224 / 311
Annual Report 2020
Advance payments of recharge 153,258,189.88 167,534,200.30
fees and others
Total 153,258,189.88 167,534,200.30
(2). Receipts in advance with significant amounts aged more than 1 year
√ Applicable□ N/A
In RMB
Reasons for not repaid or
Item Closing balance
carried-forward
Jiangsu Happy Blue Sea Cinema Lease payments received in
29,654,090.00
Development Co., Ltd. advance
Total 29,654,090.00
Other information
√ Applicable□ N/A
The difference between the opening balance of the year and the closing balance of the prior year (as of
December 31, 2019) can refer to V.44 of Section XI for details.
38. Contract liabilities
(1). Description of contract liabilities
√ Applicable□ N/A
In RMB
Item Closing balance Opening balance
Goods payment 31,518,312.59 15,777,305.81
Total 31,518,312.59 15,777,305.81
(2). Amount and reasons of major changes in the book value during the reporting period
□ Applicable√ N/A
Other information:
√ Applicable□ N/A
The difference between the opening balance of the year and the closing balance of the prior year (as of
December 31, 2019) can refer to V.44 of Section XI for details.
39. Employee benefits payable
(1). Presented by employee benefits payable
√ Applicable□ N/A
In RMB
Item Opening balance Increase Decrease Closing balance
I. Short-term benefits 50,334,348.08 281,970,084.14 286,272,801.05 46,031,631.17
II. Post-employment 240,147.90 1,199,173.75 1,365,386.67 73,934.98
225 / 311
Annual Report 2020
benefits-defined
contribution plan
III. Termination 12,436.73 6,038,236.08 6,050,672.81
benefits
IV. Other benefits due
within one year
Total 50,586,932.71 289,207,493.97 293,688,860.53 46,105,566.15
(2). Presented by short-term employee benefits
√ Applicable□ N/A
In RMB
Item Opening balance Increase Decrease Closing balance
I. Wages or salaries, 50,091,330.65 254,103,055.46 258,237,950.81 45,956,435.30
bonuses, allowances
and subsidies
II. Staff welfare 5,629,232.83 5,629,232.83
III. Social security 60,144.93 8,164,533.26 8,170,691.67 53,986.52
contributions
Where: Medical 46,782.99 7,934,349.77 7,927,949.68 53,183.08
insurance
Work injury 4,733.59 18,477.01 22,424.14 786.46
insurance
Maternity 8,628.35 211,706.48 220,317.85 16.98
insurance
IV. Housing funds 2,113.00 13,279,496.28 13,280,620.28 989.00
V. Union running costs 180,759.50 793,766.31 954,305.46 20,220.35
and employee
education costs
VI. Short-term paid
leaves
VII. Short-term profit
sharing plan
Total 50,334,348.08 281,970,084.14 286,272,801.05 46,031,631.17
(3). Presented by defined contribution plan
√ Applicable□ N/A
In RMB
Opening
Item Increase Decrease Closing balance
balance
1. Basic pensions 232,248.74 1,274,384.40 1,432,746.16 73,886.98
226 / 311
Annual Report 2020
2. Unemployment 7,899.16 -75,210.65 -67,359.49 48.00
insurance
3. Enterprise annuity
contribution
Total 240,147.90 1,199,173.75 1,365,386.67 73,934.98
Other information:
□ Applicable√ N/A
40. Taxes payable
√ Applicable□ N/A
In RMB
Item Closing balance Opening balance
Value-added tax (VAT) 12,205,136.88 776,108.18
Enterprise income tax 5,477,611.87 39,874,754.97
Individual income tax 1,067,512.87 1,447,882.44
City maintenance and
478,213.88 364,569.72
construction tax
Stamp duty 294,612.70 200,925.53
Education surcharges 204,948.80 156,244.17
Local education surcharges 136,632.54 104,162.78
Annual franchise right tax 7,177.40
Total 19,871,846.94 42,924,647.79
Other information:
None
41. Other payables
Presented by items
√ Applicable□ N/A
In RMB
Item Closing balance Opening balance
Interest payable
Dividend payable
Other payables 59,848,053.83 14,364,076.43
Total 59,848,053.83 14,364,076.43
Other information:
□ Applicable√ N/A
227 / 311
Annual Report 2020
Interest payable
(1). Presented by categories
□ Applicable√ N/A
Dividends payable
(2). Presented by categories
□ Applicable√ N/A
Other payables
(1). Other payables presented by nature
√ Applicable□ N/A
In RMB
Item Closing balance Opening balance
Withholding 110,389.10 145,265.79
Deposits/margins 6,600,475.05 2,626,034.93
Withdrawals in advance 22,153,008.25 11,539,286.03
Amount of equity transfer 11,548,387.32
payable
Borrowings 19,343,613.33
Temporary receipts payable 92,180.78 53,489.68
Total 59,848,053.83 14,364,076.43
(2). Other payables with significant amounts aged more than 1 year
□ Applicable√ N/A
Other information:
□ Applicable√ N/A
42. Liabilities held for sale
□ Applicable√ N/A
43. Non-current liabilities due within one year
√ Applicable□ N/A
In RMB
Item Closing balance Opening balance
Long-term borrowings due 181,057,099.90 64,841,740.00
within one year
Interest payable 360,312.56 127,055.02
Total 181,417,412.46 64,968,795.02
Other information:
None
228 / 311
Annual Report 2020
44. Other current liabilities
Description of other current liabilities
√ Applicable□ N/A
In RMB
Item Closing balance Opening balance
Taxes to be written off 3,045,831.07 1,133,137.22
Total 3,045,831.07 1,133,137.22
Changes in short-term bonds payable:
□ Applicable√ N/A
Other information:
√ Applicable□ N/A
The difference between the opening balance of the year and the closing balance of the prior year (as of
December 31, 2019) can refer to V.44 of Section XI for details.
45. Long-term borrowings
(1). Categories of long-term borrowings
√ Applicable□ N/A
In RMB
Item Closing balance Opening balance
Guaranteed loans 29,000,000.00
Credit loans 2,043,500.81
Guaranteed loans and loans 33,693,828.00 279,060,423.10
against collateral
Interest payable 107,952.72 554,684.17
Total 64,845,281.53 279,615,107.27
Description for categories of long-term borrowings:
None
Other description, including interest range:
□ Applicable√ N/A
46. Bonds payable
(1). Bonds payable
□ Applicable√ N/A
(2). Changes in bonds payable: (excluding other financial instruments such as preference shares,
perpetual bonds and others classified as financial liabilities)
□ Applicable√ N/A
(3). Description of converting terms and period of convertible corporate bonds
□ Applicable√ N/A
229 / 311
Annual Report 2020
(4). Description of other financial instruments classified as financial liabilities
Basic information of other financial instruments including outstanding preferred shares and perpetual
bonds at the end of the period
□ Applicable√ N/A
Changes in financial instruments including outstanding preferred shares and perpetual bonds at the end
of the period
□ Applicable√ N/A
Other financial instruments classified as financial liabilities:
□ Applicable√ N/A
Other information:
□ Applicable√ N/A
47. Leasing liabilities
□ Applicable√ N/A
48. Long-term payables
Presented by items
√ Applicable□ N/A
In RMB
Item Closing balance Opening balance
Long-term payables 3,262,450.00 3,488,100.00
Special payables
Total 3,262,450.00 3,488,100.00
Other information:
□ Applicable√ N/A
Long-term payables
(1). Long-term payables presented by nature
√ Applicable□ N/A
In RMB
Item Opening balance Closing balance
Purchase of patent use rights by 3,488,100.00 3,262,450.00
installment
Other information:
None
230 / 311
Annual Report 2020
Special payables
(2). Special payables presented by nature
□ Applicable√ N/A
49. Long-term employee benefits payable
□ Applicable√ N/A
(1). Long-term employee benefits payable
□ Applicable√ N/A
(2). Changes in defined benefit plan
Present value of the obligations under the defined benefit plan:
□ Applicable√ N/A
Assets under the plan:
□ Applicable√ N/A
Net liabilities (net assets) under the defined benefit plan
□ Applicable√ N/A
Description of the impact of the content of the defined benefit plan and associated risks on the future
cash flow, time, and uncertainty of the Company:
□ Applicable√ N/A
Description of major actuarial assumptions and sensitivity analysis result for the defined benefit plan
□ Applicable√ N/A
Other information:
□ Applicable√ N/A
50. Provisions
√ Applicable□ N/A
In RMB
Item Opening balance Closing balance Reason
Product quality 27,072,676.49 27,240,470.53 Expenses for “three
warranty guarantees” services
Amounts payable for 1,558,884.12
goods returned
Total 27,072,676.49 28,799,354.65 /
Other description, including significant assumptions and estimates relative to material provisions:
None
51. Deferred income
Description of deferred income
√ Applicable□ N/A
231 / 311
Annual Report 2020
In RMB
Opening Closing
Item Increase Decrease Reason
balance balance
Government 17,108,361.69 15,736,600.00 16,121,704.54 16,723,257.15
grants
Total 17,108,361.69 15,736,600.00 16,121,704.54 16,723,257.15 /
Items relating to government grants:
√ Applicable□ N/A
In RMB
Amount
Amount
Increased recognized
recognize
governme in
d in other Other Related to
Opening nt grants non-operati Closing
Liabilities income chang assets/inco
balance for the ng income balance
for the es me
current for the
current
period current
period
period
8K Ultra
High
Definition
Laser
Related to
Display 2,000,000.00 300,812.65 1,699,187.35
assets
Technology
Engineering
Research
Center
High
Performance
Resin and
Composite
Materials Related to
18,125.06 18,125.06
Preparation income
Technique
for Additive
Manufacturin
g
Key
Enterprise
4,820,417.3 4,820,417.3 Related to
Laboratory
1 1 income
for Laser
Display in
232 / 311
Annual Report 2020
Guangdong
Province
Ultra-high
Brightness
Laser Light
Source 2,142,818.8 2,250,000.0 2,708,945.6 1,683,873.2 Related to
Engineering 7 0 1 6 income
Technology
Research
Center
Trichromatic
Laser
Display
Complete 7,694,753.4 9,901,800.0 4,256,356.8 13,340,196. Related to
Equipment 3 0 9 54 income
Production
Demonstratio
n Line
Key
Technology
of
Trichromatic
Laser 2,210,000.0 2,642,247.0 Related to
432,247.02
Display 0 2 income
Complete
Equipment
Industrializati
on
2019 Special
Funds for the
Development
1,374,800.0 1,374,800.0 Related to
of Cultural
0 0 income
Industry in
Shunyi
District
17,108,361. 15,736,600. 16,121,704. 16,723,257.
Total
69 00 54 15
Other information:
√ Applicable□ N/A
[Note]: Government grants included in the current profit or loss are disclosed in VII.84 of Section XI in
details.
233 / 311
Annual Report 2020
52. Other non-current liabilities
□ Applicable√ N/A
53. Share capital
√ Applicable□ N/A
In RMB
Changes (+, -)
Issue Bonu Capitalizatio
Opening Closing
new s n
balance Others Subtotal balance
shar share of capital
e s reserve
Total
451,554,411.0 1,202,490.0 1,202,490.0 452,756,901.0
share
0 0 0 0
s
Other information:
On October 13, 2020, the Company held the 27th meeting of the first Board of Directors and the
14th meeting of the first Board of Supervisors, at which the Proposal on Adjusting the Grant Price of
Restricted Shares under the 2019 Restricted Share Incentive Plan and the Proposal on Granting
Reserved Restricted Shares to Grantees of Share Incentives under the 2019 Restricted Share Incentive
Plan were reviewed and passed, approving to adjust the grant price of restricted shares from RMB 17.5
per share to RMB 17.425 per share. On October 29, 2020, the Company held the 28th meeting of the first
Board of Directors and the 15th meeting of the first Board of Supervisors, at which the Proposal on
Invalidating Partial Granted but Not Vested 2019 Restricted Shares and the Proposal on Vesting
Criteria for the First Vesting Period in the Initial Grant under 2019 Restricted Share Incentive Plan
were reviewed and passed. On November 11, 2020, the Company received the additional investment of
RMB 20,953,388.25 in total paid by 147 qualified grantees of share incentives, including RMB
1,202,490.00 recognized as share capital and RMB 19,750,898.25 recognized as capital premium (share
premium). BDO China Shu Lun Pan Certified Public Accountants LLP audited this capital increase and
issued a Capital Verification Report (Xin Kuai Shi Bao Zi [2020] No. ZL10495).
234 / 311
Annual Report 2020
54. Other equity instruments
(1). Basic information of other financial instruments including outstanding preferred shares and
perpetual bonds at the end of the period
□ Applicable√ N/A
(2). Changes in financial instruments including outstanding preferred shares and perpetual bonds
at the end of the period
□ Applicable√ N/A
Changes of other equity instruments in the current period, reasons for such change and basis for related
accounting treatments:
□ Applicable√ N/A
Other information:
□ Applicable√ N/A
55. Capital reserve
√ Applicable□ N/A
In RMB
Item Opening balance Increase Decrease Closing balance
Capital premium
1,200,466,394.58 40,736,025.50 1,241,202,420.08
(Share premium)
Other capital 7,475,923.79 18,783,763.38 18,441,116.10 7,818,571.07
reserve
Total 1,207,942,318.37 59,519,788.88 18,441,116.10 1,249,020,991.15
Other description, including changes in the current period and reasons for changes:
1) On November 11, 2020, the Company received the additional investment of RMB 20,953,388.25
in total paid for restricted shares, including RMB 1,202,490.00 recognized as share capital and RMB
19,750,898.25 recognized as capital premium (share premium). In addition, because the first vesting
period meets the vesting criteria for the initial grant under the restricted share incentive plan, RMB
18,441,116.10 was transferred from capital reserve (other capital reserve) to capital premium (share
premium).
2) On December 23, 2020, the Company acquired minority interests by paying the consideration of
RMB 27,226,384.00 for the shares, and acquired shares in the fair value of the identifiable net assets in
the amount of RMB 29,770,395.15, while the difference RMB 2,544,011.15 was recognized as capital
premium (share premium).
3) On October 14, 2019, the Company held the 18th meeting of the first Board of Directors and the
8th meeting of the first Board of Supervisors, at which resolutions on matters related to the 2019
235 / 311
Annual Report 2020
Restricted Share Incentive Plan were reviewed and passed; as the Company’s implementation of this
incentive plan was approved in the general meeting of shareholders, it was determined that 4.4 million
shares of restricted shares were granted to 169 grantees of share incentives who met the grant conditions
at a grant price of RMB 17.5 per share on the grant date of October 14, 2019. On October 13, 2020, the
Company held the 27th meeting of the first Board of Directors and the 14th meeting of the first Board of
Supervisors, at which the Proposal on Adjusting the Grant Price of Restricted Shares under the 2019
Restricted Share Incentive Plan and the Proposal on Granting Reserved Restricted Shares to Grantees
of Share Incentives under the 2019 Restricted Share Incentive Plan were reviewed and passed,
approving to adjust the grant price of restricted shares from RMB 17.5 per share to RMB 17.425 per
share. On October 14, 2020, the Company held the 27th meeting of the first Board of Directors and the
14th meeting of the first Board of Supervisors, at which the proposal on granted reserved restricted
shares to grantees of share incentives under the 2019 restricted share incentive plan was reviewed and
passed; as the Company’s implementation of this incentive plan was approved in the general meeting of
shareholders, it was determined that 1.1 million shares of restricted shares were granted to 38 grantees of
share incentives who met the grant conditions at a grant price of RMB 17.425 per share on the grant date
of October 13, 2020. The total expense of equity-settled share-based payments amounted to RMB
20,570,952.76, in which RMB 18,783,763.38 was recognized in the capital reserve (other capital reserve)
and RMB 1,787,189.38 was charged to the amount attributable to minority interests.
56. Treasury shares
□ Applicable√ N/A
57. Other comprehensive income
√ Applicable□ N/A
In RMB
Amount recognized in the current period
Amou Less: Less: Attributa
Attributa
Openin nt Amount Amount Less: ble to
ble to
g incurr previously previously Incom owners Closing
Item minority
balanc ed for included in included in e tax of the balance
sharehold
e curren other other expens parent
ers after
t comprehen comprehen es company
tax
period sive sive after tax
236 / 311
Annual Report 2020
before income and income and
tax transferred transferred
to profit or to retained
loss for the earnings
period for the
period
I. Other
comprehen
sive
income that
cannot be
reclassified
subsequentl
y to profit
or loss
II. Other
comprehen
sive
income that 3,287,063 -6,496,909 -6,501,355.7 -3,214,291
4,446.09
will be .85 .69 8 .93
reclassified
to profit or
loss
Where:
Exchange
differences
on
translation 3,287,063 -6,496,909 -6,501,355.7 -3,214,291
4,446.09
of financial .85 .69 8 .93
statements
denominate
d in foreign
currencies
Total other
comprehen 3,287,063 -6,496,909.6 -6,501,355.7 -3,214,291
4,446.09
sive .85 9 8 .93
income
Other description, including adjustments on transferring effective portion of cash flow hedges to amount
upon initial recognition of the hedged item:
None
237 / 311
Annual Report 2020
58. Special reserve
□ Applicable√ N/A
59. Surplus reserve
√ Applicable□ N/A
In RMB
Item Opening balance Increase Decrease Closing balance
Statutory surplus 21,522,683.40 12,441,955.44 33,964,638.84
reserve
Surplus reserve
recovered through
business
combination 1,277,540.73 1,277,540.73
involving entities
under common
control
Total 22,800,224.13 12,441,955.44 35,242,179.57
Surplus reserve description, including changes in the current period and reasons for changes:
The Company made provisions for statutory surplus reserves at 10% of the net profits realized by the
parent company in the period.
60. Undistributed profits
√ Applicable□ N/A
In RMB
Item Current period Prior period
Undistributed profits at the end of 288,975,820.29 112,623,054.78
prior period before adjustment
Total adjusted undistributed profits at
the beginning of the period (Add: +; 1,278,734.88
Less: -)
Undistributed profits at the beginning
290,254,555.17 112,623,054.78
of the period after adjustment
Add: Net profit attributable to owners
113,847,873.06 186,457,276.71
of the parent company for the period
Less: Appropriation to statutory
12,441,955.44 10,104,511.20
surplus reserve
Appropriation to discretionary
surplus reserve
Appropriation to general risk
reserve
Declaration of dividends on
ordinary shares
Conversion of ordinary shares'
dividends into share capital
238 / 311
Annual Report 2020
Distributed dividend 33,866,580.83
Undistributed profits at the end of the 357,793,891.96 288,975,820.29
period
On May 22, 2020, at the 2019 annual general meeting of shareholders, the Proposal on Preliminary
Plan on Profit Distribution for 2019 was reviewed and passed, approving to make profit distribution on
the basis of the total shares on the record date of interest distribution - the Company proposed to
distribute to all shareholders a cash dividend of RMB 0.75 (tax inclusive) for every 10 shares. The total
cash dividend to be paid is RMB 33,866,580.83.
For the total adjusted undistributed profits at the beginning of the period, refer to the description in
V.44 of Section XI.
Details of adjustments to undistributed profits at the beginning of the period:
1) As a result of the retrospective adjustment of the Accounting Standards for Business Enterprises and
related new regulations, undistributed profits at the beginning of the period were affected by RMB
1,278,734.88.
2. Undistributed profits at the beginning of the period were affected by RMB 0 due to changes in
accounting policies.
3. Undistributed profits at the beginning of the period were affected by RMB 0 due to the correction of
significant accounting errors.
4. Undistributed profits at the beginning of the period were affected by RMB 0 due to changes in the
scope of consolidation resulting from business combination involving entities under common control.
5. Undistributed profits at the beginning of the period were affected by RMB 0 in total due to other
adjustments.
61. Operating income and operating costs
(1). Description of operating income and operating costs
√ Applicable□ N/A
In RMB
Amount for the current period Amount for the prior period
Item
Income Cost Income Cost
Main business 1,948,884,176.83 1,393,075,043.93 1,979,148,918.89 1,183,650,635.25
Total 1,948,884,176.83 1,393,075,043.93 1,979,148,918.89 1,183,650,635.25
(2). Description of incomes from contracts
□ Applicable√ N/A
Description of incomes from contracts:
□ Applicable√ N/A
(3). Description of performance obligations
□ Applicable√ N/A
(4). Description of allocation to remaining performance obligations
□ Applicable√ N/A
239 / 311
Annual Report 2020
Other information:
Breakdown of revenue by category
Item Subtotal
Principal operation place
Domestic 1,683,887,300.96
Overseas 93,264,261.21
Subtotal 1,777,151,562.17
By product
Laser optical engine 202,707,478.10
Complete laser projector 1,465,195,649.90
Others 109,248,434.17
Subtotal 1,777,151,562.17
Revenue recognition time
Goods (transferred at a time point) 1,744,123,232.35
Services (provided during a specific period of 33,028,329.82
time)
Subtotal 1,777,151,562.17
Note: The revenue breakdown information presented in the table above is the revenue amount excluding
rents and other amounts not subject to the New Revenue Standard.
62. Taxes and levies
√ Applicable□ N/A
In RMB
Item Amount for the current period Amount for the prior period
City maintenance and 2,867,426.89 3,070,823.26
construction tax
Education surcharges 1,245,187.55 1,336,864.61
Local education surcharges 830,125.05 879,366.01
Others 1,776,005.30 2,323,097.26
Total 6,718,744.79 7,610,151.14
Other information:
None
240 / 311
Annual Report 2020
63. Selling expenses
√ Applicable□ N/A
In RMB
Item Amount for the current period Amount for the prior period
Employee benefits 57,290,923.11 52,472,593.05
Marketing fees 39,666,919.06 36,724,064.18
Service fees 10,032,772.59 7,249,578.52
After-sale repair expenses 6,175,382.08 17,690,062.80
Advertising and business promotion
4,839,376.53 6,865,906.71
expenses
Travel expenses 2,561,838.29 6,806,740.43
Business entertainment expenses 1,671,853.12 3,015,283.66
Other expenses 11,349,169.82 20,935,881.65
Total 133,588,234.60 151,760,111.00
Other information:
None
64. Administrative expenses
√ Applicable□ N/A
In RMB
Item Amount for the current Amount for the prior
period period
Employee benefits 59,421,774.51 70,126,183.15
Rent expense 7,449,392.71 15,153,597.68
Travel expenses 471,610.48 3,940,279.50
Service fees 31,845,756.88 27,332,463.20
Depreciation and amortization expenses 9,094,503.87 14,945,520.79
Share-based payment expenses 20,581,939.14 8,146,719.12
Other expenses 6,892,298.67 12,981,767.17
Total 135,757,276.26 152,626,530.61
Other information:
None
65. R&D expenses
√ Applicable□ N/A
In RMB
Item Amount for the current Amount for the prior
period period
Employee benefits 120,904,809.23 118,054,037.18
Material consumption expenses 21,280,414.59 30,630,477.60
Rent expense 8,983,285.74 9,706,785.26
Service fees 8,549,326.63 10,229,627.72
Depreciation and amortization expenses 13,073,784.95 8,883,535.17
241 / 311
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Testing expenses 5,234,158.17 4,161,556.69
Patent fees 6,808,589.82 11,169,391.10
Other expenses 19,608,999.97 8,862,355.54
Total 204,443,369.10 201,697,766.26
Other information:
None
66. Financial expenses
√ Applicable□ N/A
In RMB
Item Amount for the current Amount for the prior
period period
Interest expenses 20,066,451.02 33,120,484.94
Less: Interest income -10,322,478.28 -4,079,231.03
Exchange profit or loss -2,227,674.26 -799,344.64
Bank service charges 1,708,675.72 1,249,314.15
Total 9,224,974.20 29,491,223.42
Other information:
None
67. Other income
√ Applicable□ N/A
In RMB
Item Amount for the current period Amount for the prior period
Government grants related to 300,812.65 8,000,000.00
assets
Government grants related to 41,782,494.35 22,467,052.33
income
Refund of transaction fees for 323,003.17
withholding individual income
taxes
Additional deduction of input 2,848,690.73 3,657,561.79
VAT
Total 45,255,000.90 34,124,614.12
Other information:
Government grants recognized in other income in the current period are disclosed in VII.84 of Section
XI in details.
68. Investment income
√ Applicable□ N/A
In RMB
Item Amount for the current Amount for the prior period
242 / 311
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period
Long-term equity investment accounted -679,282.94 -3,927.93
for using the equity method
Investment income from disposal of 18,624,853.96 9,552,990.98
held-for-trading financial assets
Total 17,945,571.02 9,549,063.05
Other information:
None
69. Gains from net exposure hedges
□ Applicable√ N/A
70. Gains from changes in fair values
□ Applicable√ N/A
71. Losses of credit impairment
√ Applicable□ N/A
In RMB
Amount for the current
Item Amount for the prior period
period
Bad debt losses -9,121,278.95 -3,771,572.38
Total -9,121,278.95 -3,771,572.38
Other information:
None
72. Impairment losses of assets
√ Applicable□ N/A
In RMB
Amount for the current
Item Amount for the prior period
period
I. Decline in value of inventories -10,196,985.27 -12,623,251.67
II. Impairment losses of contract -1,393,709.16
assets
Total -11,590,694.43 -12,623,251.67
Other information:
None
73. Gains from disposal of assets
√ Applicable□ N/A
243 / 311
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In RMB
Item Amount for the current period Amount for the prior period
Gains from disposal of fixed 281,040.26 41,420.84
assets
Total 281,040.26 41,420.84
Other information:
None
74. Non-operating income
Description of non-operating income
√ Applicable□ N/A
In RMB
Amount included in
Amount for the current Amount for the prior
Item non-recurring profit
period period
or loss for the period
Total gains from disposal of
non-current assets
Where: Gains from disposal
of fixed assets
Gains from disposal
of intangible assets
Gains from debt
restructuring
Gains from exchange of
non-monetary assets
Donation receipts
Government grants 1,539,340.28 1,539,340.28
Amounts not required for 275,714.05 1,876,501.15 275,714.05
payment
Indemnity 2,793,056.81 2,005,696.00 2,793,056.81
Others 30,323.96 43,869.58 30,323.96
Total 4,638,435.10 3,926,066.73 4,638,435.10
Government grants included in profit or loss for the period
√ Applicable□ N/A
In RMB
Amount for the current Amount for the prior
Grant project Related to assets/income
period period
Grant from Hong
139,340.28 Related to income
Kong government for
244 / 311
Annual Report 2020
the semiconductor
R&D project of Hong
Kong University of
Science and
Technology
Enterprise Listing
Financing Incentive
Program of Shenzhen
Nanshan District 1,400,000.00 Related to income
Industry and
Information
Technology Bureau
Other information:
□ Applicable√ N/A
75. Non-operating expenses
√ Applicable□ N/A
In RMB
Amount included in
Amount for the current Amount for the prior
Item non-recurring profit
period period
or loss for the period
Total losses from disposal
of non-current assets
Where: Losses from
disposal of fixed assets
Losses from
disposal of intangible assets
Losses from debt
restructuring
Losses from exchange of
non-monetary assets
Losses from damage and 1,393,161.39 3,255,908.90 1,393,161.39
retirement of non-current
assets
Penalties and overdue fines 76,700.50 212,581.48 76,700.50
External donations 593,309.76 715,387.87 593,309.76
Others 1.31 16,319.31 1.31
Total 2,063,172.96 4,200,197.56 2,063,172.96
245 / 311
Annual Report 2020
Other information:
None
76. Income tax expense
(1). Statement of income tax expense
√ Applicable□ N/A
In RMB
Item Amount for the current period Amount for the prior period
Income tax expense in the current 11,910,373.50 64,508,782.78
period
Deferred income tax expenses 12,853,862.82 -9,526,561.15
Total 24,764,236.32 54,982,221.63
(2). Reconciliation of income tax expenses to the accounting profit:
√ Applicable□ N/A
In RMB
Item Amount for the current period
Total profit 111,421,434.89
Income tax expense calculated based on
16,713,215.24
statutory/applicable tax rate
Effect of different tax rates of subsidiaries
563,787.37
operating in other jurisdictions
Effect of income tax for the period before
-178,204.59
adjustment
Effect of non-taxable income -659,450.33
Effect of non-deductible cost, expense and loss 3,210,951.55
Effect of utilizing deductible loss not recognized
-29,537.27
for deferred tax assets for prior period
Effect of deductible temporary difference or
deductible loss not recognized for deferred tax 25,161,016.39
assets for the current period
Change in the balance of opening deferred tax
88,229.77
assets caused by tax rate adjustment
Effect of additional deduction of R&D expenses -20,105,771.81
Income tax expenses 24,764,236.32
Other information:
□ Applicable√ N/A
77. Other comprehensive income
√ Applicable□ N/A
Other comprehensive income net of tax is disclosed in VII.57 of Section XI in details.
246 / 311
Annual Report 2020
78. Items in cash flow statement
(1). Other cash receipts relating to operating activities
√ Applicable□ N/A
In RMB
Item Amount for the current period Amount for the prior period
Government grants 40,365,718.97 28,765,309.74
Non-operating income 1,127,368.51 3,841,224.18
Interest income 10,382,950.88 2,049,565.58
Other monetary funds-margins 51,523,088.26 37,531,542.28
Receivables and payables 6,965,206.85 6,375,293.17
Bank deposits-frozen funds due to
litigation 30,000,000.00
Total 140,364,333.47 78,562,934.95
Description of other cash receipts relating to operating activities:
None
(2). Other cash payments relating to operating activities
√ Applicable□ N/A
In RMB
Item Amount for the current period Amount for the prior period
Selling expenses paid in cash 77,288,028.15 75,178,450.72
Administrative and R&D expenses 103,583,598.35 101,950,001.38
paid in cash
Financial expenses paid in cash 1,708,675.72 1,249,314.15
Non-operating expenses 670,011.57 944,288.66
Other monetary funds-margins 49,749,747.97 41,702,174.11
Bank deposits-frozen funds due to 30,000,000.00
litigation
Receivables and payables 11,988,038.74 5,886,899.65
Total 244,988,100.50 256,911,128.67
Description of other cash payments relating to operating activities:
None
(3). Other cash receipts relating to investing activities
□ Applicable√ N/A
(4). Other cash payments relating to investing activities
□ Applicable√ N/A
(5). Other cash receipts relating to financing activities
247 / 311
Annual Report 2020
√ Applicable□ N/A
In RMB
Item Amount for the current period Amount for the prior period
Shareholder borrowings 19,320,000.00
Total 19,320,000.00
Description of other cash receipts relating to financing activities:
None
(6). Other cash payments relating to financing activities
√ Applicable□ N/A
In RMB
Item Amount for the current period Amount for the prior period
Issue expenses 39,396,048.75
Total 39,396,048.75
Description of other cash payments relating to financing activities:
None
79. Supplementary information to the cash flow statement
(1). Supplementary information to the cash flow statement
√ Applicable□ N/A
In RMB
Supplemental information Amount for the current period Amount for the prior period
1. Reconciliation of net profit to
cash flow from operating activities:
Net profit 86,657,198.57 224,376,422.71
Add: Provision for impairment of 11,590,694.43 12,623,251.67
assets
Losses of credit impairment 9,121,278.95 3,771,572.38
Depreciation of fixed assets, depletion
of oil and gas assets, depreciation of 99,229,686.22 80,539,152.68
productive biological assets
Amortization of use right assets
Amortization of intangible assets 7,377,145.47 14,703,595.57
Amortization of long-term prepaid
7,123,888.08 4,870,707.84
expenses
Losses on disposal of fixed assets,
intangible assets and other long-term -281,040.26 -41,420.84
assets (gains are indicated by “－”)
Losses on retirement of fixed assets
1,393,161.39 3,255,908.90
(gains are indicated by “－”)
Losses on changes in fair values
248 / 311
Annual Report 2020
(gains are indicated by “－”)
Financial expenses (income is
17,838,776.76 33,561,732.74
indicated by “－”)
Investment losses (income is indicated
-17,945,571.02 -9,549,063.05
by “－”)
Decrease in deferred tax assets
12,853,862.82 -9,530,966.11
(increase is indicated by “-”)
Increase in deferred tax liabilities
(decrease is indicated by “-”)
Decrease in inventories (increase is
-172,605,815.49 -101,935,742.75
indicated by “－”)
Decrease in receivables from
operating activities (increase is -128,184,406.23 -73,469,932.05
indicated by “－”)
Increase in payables from operating
activities (decrease is indicated by 96,596,705.75 51,678,964.90
“－”)
Others 21,624,864.98 8,146,719.12
Net cash flow from operating
52,390,430.42 243,000,903.71
activities
2. Significant investing and
financing activities that do not
involve cash receipts and payments:
Conversion of debt into capital
Convertible corporate bonds due
within one year
Fixed assets acquired under finance
leases
3. Net changes in cash and cash
equivalents:
Closing balance of cash 983,525,089.44 829,789,487.86
Less: Opening balance of cash 829,789,487.86 472,508,550.40
Add: Closing balance of cash
equivalents
Less: Opening balance of cash
equivalents
Net increase in cash and cash 153,735,601.58 357,280,937.46
equivalents
(2). Net cash paid to acquire subsidiaries for the period
√ Applicable□ N/A
In RMB
249 / 311
Annual Report 2020
Amount
Cash or cash equivalents paid in the period for business 15,677,996.68
combination occurring in the period
Where: Tianjin Bonian Film Partnership (LP) 15,677,996.68
Less: Cash and cash equivalents held by subsidiaries at the 63,934.36
acquisition date
Where: Tianjin Bonian Film Partnership (LP) 63,934.36
Net cash paid for acquiring subsidiaries 15,614,062.32
Other information:
None
(3). Net cash receipts from disposal of subsidiaries for the current period
□ Applicable√ N/A
(4). Composition of cash and cash equivalents
√ Applicable□ N/A
In RMB
Item Closing balance Opening balance
I. Cash 983,525,089.44 829,789,487.86
Where: Cash on hand 5,858.56 3,348.57
Bank deposits that can be paid at any 980,570,123.37 827,470,990.73
time
Other monetary funds that can be 2,949,107.51 2,315,148.56
paid at any time
Deposits in the central bank that can
be used for payments
Deposits made with other banks
Placements with banks
II. Cash equivalents
Where: Investments in debt securities due
within three months
III. Closing balance of cash and cash 983,525,089.44 829,789,487.86
equivalents
Where: Restricted cash and cash
equivalents of the parent company or
subsidiaries within the Group
Other information:
□ Applicable√ N/A
250 / 311
Annual Report 2020
80. Notes to items in the statement of changes in owners' equity
Describe matters such as the names and the adjusted amounts of the items included in “others” in respect
of adjustments to the closing balances of the prior year:
□ Applicable√ N/A
81. Assets with limited ownership or use right
√ Applicable□ N/A
In RMB
Item Closing balance of carrying Reason
amount
Other monetary funds 14,057,949.58 Margins
Bank deposits 40,000,000.00 Term deposits
Land use rights 303,077,499.90 Mortgage collateral
Total 357,135,449.48 /
Other information:
None
82. Foreign currency monetary items
(1). Foreign currency monetary items
√ Applicable□ N/A
In RMB
Closing balance of
Closing balance of
Item Exchange rate RMB equivalent
foreign currency
balance
Cash and bank balances - - 84,403,281.41
Where: USD 12,801,308.81 6.5249 83,527,259.85
GBP 365.96 8.8903 3,253.49
HKD 626,935.22 0.84164 527,653.76
VND 1,215,191,249.88 0.000284 345,114.31
Accounts receivable 7,071,872.19
Where: USD 1,083,828.44 6.5249 7,071,872.19
Short-term borrowings 11,410,560.27
Where: USD 1,748,771.67 6.5249 11,410,560.27
Accounts payable 46,949,935.01
Where: USD 7,195,502.61 6.5249 46,949,935.01
Long-term borrowings 2,057,124.15
Where: USD 315,272.90 6.5249 2,057,124.15
Other information:
None
251 / 311
Annual Report 2020
(2). Description of overseas operating entities, including significant overseas operating entities, of
which the major operation place, functional currency and choosing basis as well as the reason for
change of functional currency should be disclosed:
√ Applicable□ N/A
Major overseas Functional Basis of
Item
operation place currency choice
Common
Appotronics Hong Kong Limited Hong Kong USD
currency
Common
Appotronics USA, Inc. USA USD
currency
Common
Fabulus Technology Hong Kong Limited Hong Kong USD
currency
JoveAI Limited Common
Cayman Islands USD
currency
Common
JoveAI Innovation, Inc. USA USD
currency
Common
FORMOVIE TECHNOLOGY INC USA USD
currency
Local
JoveAI Asia Company Limited Vietnam VND
currency
Common
WEMAX LLC USA USD
currency
83. Hedge
□ Applicable√ N/A
84. Government grants
(1). Basic information of government grants
√ Applicable□ N/A
In RMB
Amount recognized in
Category Amount Item presented
current profit or loss
252 / 311
Annual Report 2020
Government grants
Deferred income 300,812.65
related to assets
Government grants
related to income and
used for compensation
15,736,600.00 Other income 15,820,891.89
of the Company’s
relevant costs or losses
in subsequent periods
Government grants
related to income and
used for compensation
26,261,602.46 Other income 26,261,602.46
of the Company’s
relevant costs or losses
that have been incurred
Government grants
related to income and
used for compensation
1,539,340.28 Non-operating income 1,539,340.28
of the Company’s
relevant costs or losses
that have been incurred
Interest subsidies 544,300.00 Financial expenses 544,300.00
Note: The amount refers to government grants actually received in the current period.
1) Government grants related to assets
Opening Closing Amortization
Item deferred Increase Amortization deferred item Description
income income presented
Project Contract of 8K
8K Ultra Ultra High Definition
High Laser Display
Definition Technology
Laser Engineering Research
Display 2,000,000.00 300,812.65 1,699,187.35 Other income Center
Technology (XMHT20190101023),
Engineering Development and
Research Reform Commission
Center of Shenzhen
Municipality
Subtota
2,000,000.00 300,812.65 1,699,187.35
l
2) Government grants related to income and used for compensation of the Company’s relevant
costs or losses in subsequent periods
253 / 311
Annual Report 2020
Carrying
Opening Closing
Increase Carrying forward
Item deferred deferred Description
forward item
income income
presented
High Research and
Performance Development
Resin and Cooperation
Composite Contract
Other
Materials 18,125.06 18,125.06 (2016YFB1100802),
income
Preparation Institute of
Technique for Chemistry, Chinese
Additive Academy of
Manufacturing Sciences
Project Contract for
Science and
Technology Plan of
Key Laboratory of
Laser Display
Enterprises in
Guangdong
Province (Yue Ke
Gui Cai Zi [2018]
No. 233),
Department of
Science and
Technology of
Key Enterprise
Guangdong
Laboratory for Other Province; Notice of
Laser Display 4,820,417.31 4,820,417.31
income Shenzhen Science,
in Guangdong
Technology and
Province
Innovation
Commission on the
Issuance of Grants
to Provincial Key
Laboratory in 2018
and 2019 (Shen Ke
Ji Chuang Xin
[2019] No. 333),
Science, Technology
and Innovation
Commission of
Shenzhen
Municipality
254 / 311
Annual Report 2020
Project Contract for
Shenzhen
Ultra-high Municipality Science
Brightness and Technology
Laser Light Plan (Shen Ke Ji
Source Other Chuang Xin [2019]
2,142,818.87 2,250,000.00 2,708,945.61 1,683,873.26
Engineering income No. 33), Science,
Technology Technology and
Research Innovation
Center Commission of
Shenzhen
Municipality
Notice on the
Establishment of
2018 Annual
Projects for
Strategic Advanced
Electronic Materials
Trichromatic
in the National Key
Laser Display
Research and
Complete Other Development
Equipment 7,694,753.43 9,901,800.00 4,256,356.89 13,340,196.54
income Programs (Guo Ke
Production
Gao Fa Ji Zi [2018]
Demonstration
No. 41), High
Line
Technology
Research and
Development
Center, Ministry of
Science and
Technology
Task Statements for
Research and
Key Development
Technology of Program in Key
Trichromatic Other Fields of
Laser Display 432,247.02 2,210,000.00 2,642,247.02 Guangdong
Complete income Province
Equipment (2019B010926001),
Industrialization Finance Bureau of
Shenzhen
Municipality
2019 Special Other Announcement of
Funds for the 1,374,800.00 1,374,800.00 Shunyi Publicity
Development of income Department on
255 / 311
Annual Report 2020
Cultural Candidate Projects
Industry in for 2019 Special
Shunyi District Funds for the
Development of
Cultural Industry in
Shunyi District,
Shunyi Publicity
Department
Subtotal 15,736,600.0
15,108,361.69 15,820,891.89 15,024,069.80
0
3) Government grants related to income and used for compensation of the Company’s relevant
costs or losses that have been incurred
Item
Item Amount Description
presented
Maternity Grants from Provisions of Guangdong for Maternity
Shenzhen Social Security 432,674.41 Other income Insurance of Employees, Shenzhen Social
Bureau Insurance Fund Administration
Supplementary Announcement on 2020
2019 Talent Housing Rent
Talent Housing Rent Allowance of the
Allowance of the Housing
896,885.00 Other income Housing and Construction Bureau of
and Construction Bureau of
Nanshan District, Shenzhen Nanshan District
Nanshan District, Shenzhen
Industry and Information Technology Bureau
2020 Special Funds for Building the Service
System of Intellectual Property Operation in
Level 3 Grants for Shenzhen (Batch 1) & Candidate Objects of
High-value Patent Portfolio Grants for Intellectual Property-Pledged
from Shenzhen 271,428.60 Other income Financing with Special Funds under
Administration for Market Intellectual Property Authority Delegated by
Regulation Guangdong Province to Cities and Counties,
Shenzhen Administration for Market
Regulation
Refund of unemployment Announcement on the Refund of
insurance by Shenzhen Social Unemployment Insurance to Participating
2,710,583.94 Other income
Insurance Fund Enterprises in Shenzhen (Batch 3), Shenzhen
Administration Social Insurance Fund Administration
Refund of unemployment
Announcement on the Refund of
insurance by Beijing Social
104,409.09 Other income Unemployment Insurance to Participating
Insurance Fund
Enterprises in Beijing
Administration
Grants to the Second Batch Notice of Shenzhen Administration for
3,689,840.00 Other income
of Patent Application from Market Regulation on Claiming the Grants to
256 / 311
Annual Report 2020
Shenzhen Administration for the Second Batch of Patent Application in
Market Regulation in 2018 2018, Shenzhen Administration for Market
Regulation
Notice of Shenzhen Administration for
Market Regulation on the Disclosure of 2019
2019 Special Funds for
Project List (Batch 2) Proposed to be Funded
Intellectual Property Rights
500,000.00 Other income by the Intellectual Property Special Funds
of Shenzhen Administration
under the Approval System and the
for Market Regulation
Assessment System, Shenzhen Administration
for Market Regulation
Plan of Rewards and Notice on 2020 Nanshan District Independent
Supports for Intellectual Innovation Industry Development Special
Property Operation of Fund - Science, Technology and Innovation
100,000.00 Other income
Shenzhen Nanshan District Sub-Fund (Batch 1) (Shen Nan Ke [2020]
Science, Technology and No. 35), Shenzhen Nanshan District Science,
Innovation Bureau Technology and Innovation Bureau
2019 Special Funds for 2019 Allocation Plan of Special Funds for
Promoting High-quality Promoting High-quality Economy
Economy Development of 300,000.00 Other income Development of Guangdong Administration
Shenzhen Administration for for Market Regulation (Batch 3), Shenzhen
Market Regulation (Batch 3) Administration for Market Regulation
Disclosure of the Second Batch of Entities
Patent Support Plan of that Nanshan District Independent Innovation
Shenzhen Nanshan District 3,532,500.00 Other income Industry Development Special Fund proposes
Finance Bureau to support in 2020, Shenzhen Nanshan
District Finance Bureau
Nanshan District Independent Innovation
Industry Development Special Fund -
Patent Support Plan of
Science, Technology and Innovation
Shenzhen Nanshan District 2,431,500.00 Other income
Sub-Fund - Patent Support Plan Application
Finance Bureau
(2020), Shenzhen Nanshan District Finance
Bureau
Notice of the Service Bureau for Small and
Medium-sized Enterprises of Shenzhen on
Grant for Domestic Market
Paying Grants for Domestic Market
Expansion by Enterprises
Expansion under the Innovative Development
from Service Bureau for 95,430.00 Other income
Cultivation and Support Plan by Private and
Small and Medium-sized
Small and Medium-sized Enterprises of
Enterprises of Shenzhen
Shenzhen in 2020, Service Bureau for Small
and Medium-sized Enterprises of Shenzhen
2019 Scheme for Grants to Notice of Shenzhen Science, Technology and
Enterprise Research and Innovation Commission on Disclosure of the
2,043,000.00 Other income
Development of the First Batch of Enterprises proposed to be
High-technology funded under 2019 Enterprise Research and
257 / 311
Annual Report 2020
Department, Science, Development Subsidy Scheme, Science,
Technology and Innovation Technology and Innovation Commission of
Commission of Shenzhen Shenzhen Municipality
Municipality
Disclosure of the Third Batch of Entities that
Plan of Shenzhen Nanshan
Nanshan District Independent Innovation
District Science, Technology
Industry Development Special Fund proposes
and Innovation Bureau on 100,000.00 Other income
to support in 2020, Shenzhen Nanshan
Support to National
District Science, Technology and Innovation
High-tech Enterprises
Bureau
Announcement of Shenzhen Administration
Special Funds for Protected for Market Regulation on 2019 Candidate
Fields of Shenzhen Entities and Projects for the Intellectual
500,000.00 Other income
Administration for Market Property Special Funds for Protected Fields,
Regulation Shenzhen Administration for Market
Regulation
Plan of Shenzhen Nanshan Notice on Application for the Rewards to
District Science, Technology National High-tech Enterprises in Nanshan
and Innovation Bureau on 50,000.00 Other income District, Shenzhen 2019, Shenzhen Nanshan
Rewards to National District Science, Technology and Innovation
High-tech Enterprises Bureau
Disclosure of the Fourth Batch of Entities
Enterprise Listing Financing
that Nanshan District Independent Innovation
Incentive Program of Non-operating Industry Development Special Fund Proposes
Shenzhen Nanshan District 1,400,000.00
income to Support in 2020, Shenzhen Nanshan
Industry and Information
District Industry and Information Technology
Technology Bureau
Bureau
Announcement of Shenzhen Administration
20th Patent Award for Market Regulation on Candidate Entities
(Excellence Award) of for Supporting Rewards of Intellectual
500,000.00 Other income
Shenzhen Administration for Property (20th China Patent Award, 2018
Market Regulation Shenzhen Patent Award), Shenzhen
Administration for Market Regulation
Announcement of Shenzhen Administration
for Market Regulation on Candidate Entities
2018 Shenzhen Patent Award
for Supporting Rewards of Intellectual
of Shenzhen Administration 200,000.00 Other income
Property (20th China Patent Award, 2018
for Market Regulation
Shenzhen Patent Award), Shenzhen
Administration for Market Regulation
Level 1 Grants for Announcement of Shenzhen Administration
High-value Patent Portfolio for Market Regulation on 2020 Special Funds
from Shenzhen 108,571.40 Other income for Building the Service System of Intellectual
Administration for Market Property Operation in Shenzhen (Batch 1) &
Regulation Candidate Objects of Grants for Intellectual
258 / 311
Annual Report 2020
Property-Pledged Financing with Special
Funds under Intellectual Property Authority
Delegated by Guangdong Province to Cities
and Counties (Shen Shi Jian Tong Gao
(2020) No. 76), Shenzhen Administration for
Market Regulation
2018 12th Settlement for the Notice of Shenzhen Administration for
Second Batch of Overseas Market Regulation on Claiming the Grants to
Trademarks by Shenzhen 17,000.00 Other income the Second Batch of Overseas Trademarks in
Administration for Market 2018, Shenzhen Administration for Market
Regulation 571-2178 Regulation
2018 10th Settlement for the Notice of Shenzhen Administration for
Second Batch of Computer Market Regulation on Claiming the Grants to
Software Copyright by 1,800.00 Other income the Second Batch of Computer Software
Shenzhen Administration for Copyright in 2018, Shenzhen Administration
Market Regulation 133-1046 for Market Regulation
Plan of Supports for Science
Project Application under the Plan of
and Technology Rewards of
Supports for Science and Technology
Shenzhen Nanshan District 200,000.00 Other income
Rewards (2020), Shenzhen Nanshan District
Science, Technology and
Science, Technology and Innovation Bureau
Innovation Bureau
Notice on 2020 Nanshan District Independent
Plan of Supports for Science
Innovation Industry Development Special
and Technology Rewards of
Fund - Science, Technology and Innovation
Shenzhen Nanshan District 600,000.00 Other income
Sub-Fund (Batch 1) (Shen Nan Ke [2020]
Science, Technology and
No. 35), Shenzhen Administration for Market
Innovation Bureau
Regulation
Grants for Daily Announcement on Candidate Entities for
Expenditures of Post-doctor Grants for Daily Management Expenditures
Stations in Shenzhen from 300,000.00 Other income of Post-doctor Stations in Shenzhen (Batch 1
Shenzhen Human Resources for 2020), Shenzhen Human Resources and
and Social Security Bureau Social Security Bureau
Notice of the Commerce Bureau of Shenzhen
SONG Jiali 2019 Central
Municipality on the Disclosure of Projects on
Special Funds for Foreign
Matters for Supporting Foreign Trade SMEs
Trade (Supporting Foreign 495,163.00 Other income
to Expand Markets Funded by Central
Trade SMEs to Expand
Special Funds for Foreign Trade in 2019,
Markets) Batch 1
Commerce Bureau of Shenzhen
Employment Assurance
List of Enterprises for Grants of Employment
Scheme of Hong Kong 188,133.62 Other income
Assurance, Hong Kong Government
Government
Refunds of value-added taxes 3,416,123.77 Other income
Grants for maintaining job 437,377.63 Other income
259 / 311
Annual Report 2020
position
Application Form for Qualification of Elite
2020 Support Funds for Elite
Talents of Shunyi Airport Economy,
Talents of Airport Economy 300,000.00 Other income
Organization Department of CPC Shunyi
under the “Wutong Program”
Committee, Beijing
Several Opinions of Shunyi District on
Promoting the Development of the Cultural
and Creative Industry (Shun Zhen Fa 2013]
No. 13), Shunyi People's Government,
Beijing
2019 Shunyi District Cultural
1,488,000.00 Other income Measures for Administration of Special
and Creativity Fund Awards
Funds for the Development of Cultural and
Creative Industries in Shunyi District
(Revised) (Shun Yi Fa [2016] No. 6),
Publicity Department of CPC Shunyi
Committee, Beijing
Several Measures of Shunyi District on
Intensifying Efforts to Fight COVID-19 and
Support Enterprises to “Control COVID-19
and Stabilize Growth” (Shun Zhen Ban Fa
Science and Technology [2020] No. 3), General Office of Shunyi
Support Funds of Shunyi People’s Government, Beijing
100,000.00 Other income
Science and Technology Implementation Measures of Shunyi District
Association on Accelerating Science and Technology
Innovation and Promoting the
Transformation of Science and Technology
Achievements (Shun Zheng Fa [2019] No. 9),
Shunyi People’s Government, Beijing
Implementation Measures of Shunyi District
Patent Promotion and on Patent Promotion and Protection (Shun
9,000.00 Other income
Protection Funds of Shunyi Zheng Fa [2019] No. 10), Shunyi People’s
Government, Beijing
Administration Measures of Beijing on
Implementing Link of “Investment and Loan
Award” in the Cultural and Creative Industry
Investment and Loan Award 142,182.00 Other income to Promote Integration between Culture and
Finance (for Trial Implementation), Jing Wen
Ling Ban Wen [2017] No. 3, Beijing Cultural
Reform and Development Leadership Panel
Government refunds for
donation to Hong Kong Non-operating
government for the 139,340.28
semiconductor R&D project income
of Hong Kong University of
260 / 311
Annual Report 2020
Science and Technology
Subtotal 27,800,942.74
4) Interest subsidies
Carrying
Opening Closing
Carrying forward
Item deferred Increase deferred Description
forward item
income income
presented
Disclosure of the Third Batch
Interest of Entities that Nanshan
subsidy for District Independent Innovation
short-term Financial Industry Development Special
139,900.00 139,900.00
liquid loans of expenses Fund Proposes to Support in
listed 2020, Office of Nanshan
enterprises Leadership Panel for Special
Funds
Notice of Shenzhen Service
Bureau for Small and
Interest
Medium-sized Enterprises of
subsidy for
Shenzhen on the Fifth Grants
loans of
for Interest Subsidy for Loans
micro-, small-, Financial of Micro-, Small-, and
and 200,000.00 200,000.00
expenses Medium-sized Enterprises
medium-sized
during COVID-19 (Shen Zhong
enterprises
Xiao Qi Zi [2020] No. 91),
during
Service Bureau for Small and
COVID-19
Medium-sized Enterprises of
Shenzhen
Interest
subsidy for Financial
204,400.00 204,400.00
loans during expenses
COVID-19
Subtotal 544,300.00 544,300.00
Government grants included in profit or loss for the period amounted to RMB 44,166,947.28.
(2). Refund of government grants
√ Applicable□ N/A
In RMB
Item Amount Reason
Subsidies for high-tech 300,000.00 No longer qualified for the
qualifications grants due to changes in
business registration
261 / 311
Annual Report 2020
Other information:
None
85. Others
□ Applicable√ N/A
VIII. Changes in scope of consolidation
1. Business combination not involving enterprises under common control
√ Applicable□ N/A
(1). Business combinations not involving enterprises under common control in the current period
√ Applicable□ N/A
In RMB
Incomes Net profit
of the of the
Ratio of Basis for
Time acquiree acquiree
acquired Method of determining
Name of point of Cost of equity Acquisition from the from the
equity obtaining the
acquiree obtaining acquisition date acquisition acquisition
interests equity acquisition
equity date to the date to the
(%) date
end of the end of the
period period
Tianjin
Bonian Share
December December
Film 27,226,384.00 100 Acquisition Transfer
23, 2020 23, 2020
Partnership Agreement
(LP)
Other information:
None
(2). Combination costs and goodwill
√ Applicable□ N/A
In RMB
Combination costs Tianjin Bonian Film Partnership (LP)
-- Cash 27,226,384.00
-- Fair value of non-cash assets
-- Fair value of debts issued or undertaken
-- Fair value of equity securities issued
-- Fair value of contingent consideration
-- Fair value at the acquisition date of the equity
interests held prior to the acquisition date
--Others
262 / 311
Annual Report 2020
Total combination costs 27,226,384.00
Less: Acquired shares in the fair value of the 29,770,395.15
identifiable net assets
Differences between amounts of
goodwill/combination costs and the acquired shares -2,544,011.15
in the fair value of the identifiable net assets
Description of the method for determining the fair value of combination costs, and the contingent
considerations and changes thereof:
N/A.
Other information:
During the reporting period, the Company acquired Tianjin Bonian Film Partnership (LP) through
business combination not involving enterprises under common control. In essence, this transaction is
acquiring the minority interests held by the subsidiary CINEAPPO Laser Cinema Technology (Beijing)
Co., Ltd. The difference above is recognized in capital reserve - share premium.
(3). Identifiable assets and liabilities of the acquiree at the acquisition date
√ Applicable□ N/A
In RMB
Tianjin Bonian Film Partnership (LP)
Fair value at the acquisition date Carrying amount at the acquisition date
Assets: 29,854,938.69 8,310,934.36
Cash and bank 63,934.36 63,934.36
balances
Long-term 29,791,004.33 8,247,000.00
equity
investments
Liabilities: 84,543.54 84,543.54
Other payables 84,543.54 84,543.54
Net assets 29,770,395.15 8,226,390.82
Acquired net 29,770,395.15 8,226,390.82
assets
Method for determining the fair value of identifiable assets and liabilities:
Long-term equity investments are determined according to the net assets and shareholding ratio of the
investee, and other assets and liabilities are determined according to the carrying amounts.
Contingent liabilities of the acquiree that are taken in the business combination:
None
Other information:
263 / 311
Annual Report 2020
None
(4). Gains or losses from the equity interests held prior to the acquisition date that are remeasured at fair
value
Whether there are transactions for the purpose of implementing business combination via multiple
transactions and obtaining the control during the reporting period
□ Applicable√ N/A
(5). Description about the failure in reasonably determining the combination considerations or the fair
values of the identifiable assets and liabilities of the acquiree at the acquisition date or at the end of
the combination period
□ Applicable√ N/A
(6). Other information
□ Applicable√ N/A
2. Business combination involving enterprises under common control
□ Applicable√ N/A
(7). Business combinations involving enterprises under common control in the current period
□ Applicable√ N/A
(8). Combination costs
□ Applicable√ N/A
(9). Carrying amounts of assets and liabilities of the combined party at the combination date
□ Applicable√ N/A
Other information:
None
3. Counter purchase
□ Applicable√ N/A
264 / 311
Annual Report 2020
4. Disposal of subsidiaries
Single disposal of investments in subsidiaries, i.e. the loss of control
□ Applicable√ N/A
Other information:
□ Applicable√ N/A
5. Changes in scope of consolidation for other reasons
Description of changes in the scope of consolidation for other reasons (e.g., new subsidiary establishment, subsidiary liquidation, etc.) and the relevant information:
√ Applicable□ N/A
Company Method of
obtaining Time point of obtaining equity Capital contribution Proportion of contribution
equity
Shenzhen Appotronics Display Device Co., Ltd. Newly February 13, 2020 3,000,000.00 100%
established
WEMAX LLC Newly March 17 2020 2,050,770.00 100%
established
JoveAI Asia Company Limited Newly April 24, 2020 USD 100,000 64.29%
established
6. Others
□ Applicable√ N/A
265 / 311
Annual Report 2020
IX. Equity in other entities
1. Equity in subsidiaries
(1). Composition of enterprise group
√ Applicable□ N/A
Proportion of
Principal shareholding
Registration Acquisition
Subsidiaries operation Business nature (%)
place method
place
Direct Indirect
Appotronics Sales;
Timewaying technology
(Beijing) Beijing Beijing development, 90.00 Establishment
Technology Co., consulting
Ltd.
Shenzhen Technology
Appotronics development and
Software sales of
Shenzhen Shenzhen 100.00 Establishment
Technology Co., computer
Ltd. software and
hardware
Beijing Orient Technology
Appotronics promotion;
Technology Co., computer
Beijing Beijing 59.00 Establishment
Ltd. systems,
application
software services
Shenzhen Development,
Appotronics consultation and
Xiaoming Shenzhen Shenzhen transfer of laser 100.00 Establishment
Technology Co., display
Ltd. technology
Formoive (Beijing) Technology and
Technology Co., Beijing Beijing software 55.00 Establishment
Ltd. development
Shenzhen R&D and sales Business
Appotronics Laser of laser display combination
Display products involving
Technology Co., Shenzhen Shenzhen 100.00 enterprises
Ltd. under
common
control
CINEAPPO Laser Research and
Cinema development, Business
Technology production, combination
(Beijing) Co., Ltd. technical involving
Beijing Beijing services, sales 24.84 38.36 enterprises
and lease of laser under
cinema common
projection control
equipment
Qingda Information
Appotronics technology
(Xiamen) Shenzhen Xiamen consulting 51.00 Establishment
Technology Co., services
Ltd.
Shenzhen Software
Shenzhen Shenzhen 100.00 Establishment
Appotronics Laser development for
266 / 311
Annual Report 2020
Technology Co., semiconductor
Ltd. optoelectronic
devices
Shenzhen Software
Appotronics Home development
Line Technology related to
Shenzhen Shenzhen 100.00 Establishment
Co., Ltd. semiconductor
optoelectronic
products
Appotronics Hong Production,
Kong Limited research, and
development of
semiconductor
optoelectronic
Hong
Hong Kong products, sales 100.00 Establishment
Kong
and consulting,
investment and
video content
value-added
services
Appotronics USA, R&D, Business
Inc. manufacture and combination
sales of involving
USA USA semiconductor 100.00 enterprises
optoelectronic under
products common
control
Fabulus R&D,
Hong
Technology Hong Hong Kong manufacture and 100.00 Establishment
Kong
Kong Limited sales of screens
JoveAI Limited No specific
Cayman Cayman
business 64.29 Establishment
Islands Islands
conducted
JoveAI Innovation, R&D of laser
Inc. USA USA display software 64.29 Establishment
system
Appotronics Technical
Technology research and
(Changzhou) Co., development of
Ltd. projection
Changzhou Changzhou 100.00 Establishment
equipment,
screen and
electronic
computer
FORMOVIE No specific
TECHNOLOGY USA USA business 55.00 Establishment
INC conducted
JoveAI Asia Technical
Company Limited research and
development of
projection
Vietnam Vietnam 64.29 Establishment
equipment,
screen and
electronic
computer
Tianjin Bonian Tianjin Tianjin No specific 99.00 1.00 Business
267 / 311
Annual Report 2020
Film Partnership business combination
(LP) conducted not involving
enterprises
under
common
control
Shenzhen Technical
Appotronics development,
Display Device sales, and
Co., Ltd. technical
Shenzhen Shenzhen 100.00 Establishment
services for
display products;
import and
export business
WEMAX LLC Sales of laser
USA USA 100.00 Establishment
equipment
Description of the difference between the proportion of shareholding and the proportion of voting rights
in a subsidiary:
None
Basis for holding half of the voting rights or below but still controlling the investee, and holding over
half voting rights but having no control over the investee:
None
Basis for controls over significant structured entities included in consolidation scope:
None
Basis to determine the company acts as the agent or the principal:
None
Other information:
None
(2). Significant non-wholly subsidiaries
√ Applicable□ N/A
In RMB
Profit or loss Dividends declared
Shareholding ratio attributable to for distribution to Closing balance
Subsidiaries by minority minority minority of minority
shareholders shareholders for the shareholders in the interests
current period current period
Formoive
(Beijing)
45.00% -22,385,152.39 -35,120,901.11
Technology
Co., Ltd.
CINEAPPO
Laser Cinema
Technology 36.80% 1,009,034.92 139,317,448.20
(Beijing) Co.,
Ltd.
Description of the difference between the proportion of shareholding by minority shareholders and their
proportion of voting rights in a subsidiary:
□ Applicable√ N/A
Other information:
268 / 311
Annual Report 2020
□ Applicable√ N/A
269 / 311
Annual Report 2020
(3). Significant financial information of significant non-wholly subsidiaries
√ Applicable□ N/A
In RMB
Closing balance Opening balance
Non-curr Total
Subsidiaries Current Non-curre Total Current Non-current Total Current Non-current Total Current
ent liabilitie
assets nt assets assets liabilities liabilities liabilities assets assets assets liabilities
liabilities s
Formoive
(Beijing) 602,500,64 16,903,557. 619,404,20 692,687,62
4,763,026.34
697,450,652.7 253,973,931.3
7,968,567.46
261,942,49 288,180,19 2,437,972 290,618,16
Technology 7.92 91 5.83 6.41 5 9 8.85 1.85 .51 4.36
Co., Ltd.
CINEAPPO
Laser Cinema
218,942,34 712,358,02 931,300,36 509,106,72 552,720,340.9 255,777,103.2 789,861,645.4 1,045,638,7 383,085,23 289,141,4 672,226,67
Technology 2.82 0.45 3.27 0.26
43,613,620.72
8 9 3 48.72 1.40 41.68 3.08
(Beijing) Co.,
Ltd.
Amount for the current period Amount for the prior period
Cash flow
Total Total Cash flow
Subsidiaries Operating from Operating
Net profit comprehensive Net profit comprehensive from operating
income operating income
income income activities
activities
Formoive (Beijing)
Technology Co., 1,006,770,096.44 -49,744,783.09 -49,744,783.09 81,046,874.46 700,577,662.64 -47,481,133.43 -47,481,133.43 -99,566,333.52
Ltd.
CINEAPPO Laser
Cinema Technology 288,699,197.97 3,358,107.97 3,358,107.97 85,283,246.66 593,020,861.03 144,802,587.21 144,802,587.21 173,475,022.15
(Beijing) Co., Ltd.
Other information:
None
270 / 311
Annual Report 2020
(4). Significant limitations on use of the group assets and pay-off the group debts
□ Applicable√ N/A
(5). Financial or other support provided to structured entities included in consolidated financial
statements:
□ Applicable√ N/A
Other information:
□ Applicable√ N/A
2. Changes of shares of owners' equity in subsidiaries but continue to remain control over transactions
of subsidiaries
√ Applicable□ N/A
(1). Description of changes in the share in the owner's equity of subsidiaries
√ Applicable□ N/A
Subsidiaries Shareholding ratio prior to Shareholding ratio after
Date of change
change change
CINEAPPO Laser
Cinema Technology December 23, 2020 55.20% 63.20%
(Beijing) Co., Ltd.
(2). Impact of the transaction on minority interests and owners' interests attributable to owners of the
parent company
√ Applicable□ N/A
In RMB
Item CINEAPPO Laser Cinema Technology (Beijing)
Co., Ltd.
Acquisition cost/disposal consideration 27,226,384.00
-- Cash 27,226,384.00
-- Fair value of non-cash assets
Total acquisition cost/disposal consideration 27,226,384.00
Less: Share in net assets of subsidiaries calculated 29,770,395.15
based on the acquired/disposed shareholding ratio
Difference -2,544,011.15
Where: Adjustment to capital reserves -2,544,011.15
Adjustment to surplus reserves
Adjustment to undistributed profits
Other information
□ Applicable√ N/A
3. Equity in joint ventures or associates
√ Applicable□ N/A
(1). Important joint ventures or associates
√ Applicable□ N/A
In RMB
Proportion of Accounting
shareholding (%) treatment
Principal
Associates or joint Registration Business method for
operation
ventures place nature investments in
place Direct Indirect
joint ventures or
associates
GDC Technology Asia and British R&D, 36.00 Accounting for
271 / 311
Annual Report 2020
Limited (BVI) North Virgin production, under equity
America Islands and sales of method
digital
cinema
servers and
cinema
management
system
Description of the difference between the proportion of shareholding and the proportion of voting rights
in joint ventures or associates:
None
Basis that the company owns less than 20% voting rights but may exercise major impact, or that the
company owns 20% or over voting rights but does not has major impact:
None
(2). Major financial information of significant joint ventures
□ Applicable√ N/A
(3). Major financial information of significant associates
√ Applicable□ N/A
In RMB
Item Closing balance/Amount for Opening balance/Amount
the current period for the prior period
Company GDC [Note 1]
Current assets 553,504,350.37
Non-current assets 72,596,748.61
Total assets 626,101,098.98
Current liabilities 379,295,268.80
Non-current liabilities 41,349,472.31
Total liabilities 420,644,741.11
Minority interests
Interests attributable to shareholders 205,456,357.87
of the parent company
Share of net assets calculated by 73,964,288.83
ownership percentage
Adjustment 62,044,191.37
--Goodwill 62,560,946.33
--Unrealized profits for insider -516,754.96
transactions
--Others
Carrying amount of investment of 131,338,347.84
associates
Fair values of equity investments in
associates having publicly quoted
prices
Operating income 251,049,184.00
Net profit 6,256,577.59
272 / 311
Annual Report 2020
Net profit of discontinued operations
Other comprehensive income 26,383,768.27
Total comprehensive income 32,640,345.86
Dividends received from associates in
the current year
Other information
Note 1: During the reporting period, the equity investment in GDC Technology Limited (BVI) was made
on April 9, 2020. The data disclosed in the table above is the audited data of GDC Technology Limited
(BVI) for 2020.
(4). Summary financial information of insignificant joint ventures and associates
√ Applicable□ N/A
In RMB
Closing balance/Amount for the Opening balance/Amount for the
current period prior period
Joint ventures:
Total carrying amount of
investments
Total amounts calculated based on shareholding proportions
--Net profit
--Other comprehensive income
--Total comprehensive income
Associates:
Total carrying amount of 131,406,424.64 139,534,371.94
investments
Total amounts calculated based on shareholding proportions
--Net profit -1,179,972.05 4,011,243.08
--Other comprehensive income -5,001,459.87 -754,946.96
--Total comprehensive income -6,181,431.92 3,256,296.12
Other information
Main information about associates:
Proportion of
shareholding Accounting treatment
Principal Registratio
Business nature (%) method for investments in
Associates operation
n place joint ventures or
place Direc Indirect associates
t
Europe
Hong Sales of cinema Accounting for under
Cinionic Limited and 20.00
Kong projectors equity method
USA
(5). Description of significant limitations over the ability of joint ventures or associates to transfer funds
to the Company
□ Applicable√ N/A
(6). Excessive loss of joint venture or associates
□ Applicable√ N/A
273 / 311
Annual Report 2020
(7). Unrecognized commitment relating to investments in joint ventures
□ Applicable√ N/A
(8). Contingent liabilities relating to investments in joint ventures or associates
□ Applicable√ N/A
4. Significant joint operations
□ Applicable√ N/A
5. Interests in structured entities that are not included in consolidated financial statements
Description of structured entities that are not included in consolidated financial statements:
□ Applicable√ N/A
6. Others
□ Applicable√ N/A
X. Risks associated with financial instruments
√ Applicable□ N/A
The Company's risk management objectives are to achieve a proper balance between risks and yield,
minimize the adverse impacts of risks on the Company's operation performance, and maximize the
benefits of the shareholders and other stakeholders. Based on these risk management objectives, the
Company's basic risk management strategy is to identify and analyze its exposure to various risks,
establish an appropriate minimum tolerance to risk, implement risk management, and monitor regularly
and effectively these exposures to ensure the risks are monitored at a certain level.
The Company is exposed to various risks associated with financial instruments in its daily routines,
primarily including credit risk, liquidity risk and market risk. The management has reviewed and
approved policies to manage these risks, summarized as below.
(I) Credit risk
Credit risk refers to the risk that a party of the financial instrument will default on its obligations
resulting in financial loss to the counterparty.
1. Management of credit risk
(1) Evaluation of credit risk
The Company assesses at each balance sheet date whether the credit risk of the underlying financial
instruments has increased significantly since initial recognition. In determining whether the credit risk
has increased significantly since initial recognition, the Company considers reasonable and supportable
information that is available without undue cost or effort, including quantitative and qualitative analysis
based on historical data, ranking of external credit risks and forward-looking information. The Company
compares the risk of a default occurring on a financial instrument as at the balance sheet date with the
risk of a default occurring on the financial instrument as at the date of initial recognition based on
individual financial instrument or a group of financial instruments with similar credit risk characteristic,
to determine the change of the risk of a default occurring on a financial instrument over the expected
life.
274 / 311
Annual Report 2020
The Company considers the credit risk of financial instruments has increased significantly when
one or more of the following quantitative and qualitative criteria are met:
1) The quantitative criterion primarily refers to a certain percentage of increase in the probability of
default over the remaining life of the financial instruments as of the balance sheet date when comparing
with that at initial recognition of the financial instruments;
2) The qualitative criterion includes, inter alia, adverse material changes in business or financial
conditions that are expected to cause a significant decrease in the debtor's ability to meet its debt
obligations, and an actual or expected significant adverse change in the technological, market, economic,
or legal environment of the debtor that results in a significant decrease in the debtor’s ability to meet its
debt obligations.
(2) Definition of defaulted or credit-impaired assets
A financial asset is defined as defaulted when the financial instrument meets one or more
conditions stated as below, and the criterion of defining defaulted asset is consistent with that of defining
credit-impaired asset:
1) significant financial difficulty of the debtor;
2) a breach of contract terms with binding force by the debtor;
3) it is becoming probable that the debtor will enter bankruptcy or other financial reorganization;
4) the creditor of the debtor, for economic or contractual reasons relating to the debtor’s financial
difficulty, has granted to the debtor a concession(s) that the creditor would not otherwise consider.
2. Measurement of ECL
Key parameters to measure ECL include the probability of default, loss given default and the
exposure at default. The Company established models of the probability of default, loss given default
and the exposure at default on the basis of quantitative analysis on historical statistical data (such as
counterparty ranking, guarantee methods, collateral category, and repayment way) and forward-looking
information.
3. Details of reconciliation of the opening balance and the closing balance of provision for
impairment of financial instruments can refer to the description in VII.4, VII.5 and VII.8 of Section XI.
4. Credit risk exposure and credit risk concentration
The Company’s credit risk is primarily from cash and bank balances and receivables. In order to
control the risks associated with aforementioned items, the Company has taken the following measures.
(1) Cash and bank balances
The credit risk of the Company is limited because the Company has deposited bank deposits and
other monetary funds in banks with high credit ratings.
(2) Receivables
The Company regularly evaluates the creditworthiness of its customers with deals on credit, and
selects to deal with approved and creditworthy customers subject to the results of the credit assessment
with monitoring the balance of its receivables, so as to ensure that the Company is not exposed to
significant risk of bad debt.
275 / 311
Annual Report 2020
No collaterals are required since the Company only deals with third parties that are approved and
creditworthy. The concentrated credit risks are managed by customers. As of December 31, 2020, the
Company is exposed to certain concentration of credit risks, as the Company’s accounts receivable from
top 5 customers have accounted for 86.37% of the total balance of accounts receivable (December 31,
2019: 70.21%). The Company held no collateral or other credit ranking measures for the balance of
accounts receivable.
The maximum exposure to the Company is the carrying amount of each financial asset in the
balance sheet.
(II) Liquidity risk
Liquidity risk refers to the risk that the Company is in shortage of funds in performing obligations
that are settled by delivering cash or another financial asset. Liquidity risk may arise from an inability to
sell a financial asset at fair value as soon as possible, a counterparty's inability to pay its contractual
liabilities, the accelerated maturity of liabilities, or an inability to generate expected cash flows.
In order to control this risk, the Company balances the continuity and flexibility of financing by
using various financing measures such as notes settlement and bank loans comprehensively and adopting
both long-term and short-term financing methods to optimize the financing structure. The Company has
received credit facilities from a number of commercial banks to satisfy its working capital requirements
and capital expenditures.
Financial liabilities classified by remaining maturity dates
Closing balance
Item Over 2
Carrying amount Undiscounted Within 1 year 1-2 years
contract amount years
Bank
335,041,546.85 347,893,031.23 281,565,349.76 66,327,681.47
borrowings
Notes payable 116,822,674.67 116,822,674.67 116,822,674.67
Accounts
226,494,815.90 226,494,815.90 226,494,815.90
payable
Other payables 59,848,053.83 59,848,053.83 59,848,053.83
Long-term
3,262,450.00 3,572,382.75 3,572,382.75
payables
Subtotal 741,469,541.25 754,630,958.38 684,730,894.16 69,900,064.22
(Continued to above table)
Opening balance
Item Over 3
Carrying amount Undiscounted Within 1 year 1-3 years
contract amount years
Bank 421,349,221.34 444,275,984.40 159,065,657.15 285,210,327.25
borrowings
Notes payable 37,335,841.79 37,335,841.79 37,335,841.79
Accounts 176,624,445.46 176,624,445.46 176,624,445.46
276 / 311
Annual Report 2020
Opening balance
Item Over 3
Carrying amount Undiscounted Within 1 year 1-3 years
contract amount years
payable
Other payables 14,364,076.43 14,364,076.43 14,364,076.43
Long-term 3,488,100.00 3,488,100.00 3,488,100.00
payables
Subtotal 653,161,685.02 676,088,448.08 390,878,120.83 285,210,327.25
(III) Market risk
Market risk refers to the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices. Market risk mainly includes interest rate risk and currency
risk.
1. Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market interest rates. The Company is exposed to the risk of fair value
interest rate due to financial instruments with a fixed interest rate and to the risk of cash value interest rate
due to financial instruments with a floating interest rate. The Company determines the proportion
between the fixed-rate financial instruments and the floating-rate financial instruments based on market
conditions, and maintains appropriate portfolios of financial instruments through regular review and
monitoring. The cash flow interest rate risk exposed to the Company relates primarily to the Company’s
floating-rate interest-bearing bank borrowings.
As at December 31, 2020, the principal of the Company’s floating-rate interest-bearing bank
borrowings amounted to RMB 334,317,535.43 (December 31, 2019: RMB 420,240,038.66). On the
basis of the assumption that the interest rate has changed 50 basic points, where all other variables are
held constant, it will bring no material impacts on the Company's total profits and shareholders' equity.
2. Currency risk
Currency risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in foreign exchange rates. The Company's exposure to the currency risk is
primarily associated with the Company’s monetary assets and liabilities dominated in foreign currencies.
If the monetary assets and liabilities dominated in foreign currencies are imbalanced in a short time, the
Company will purchase and sell foreign currencies at the market exchange rate to keep the net risk
exposure acceptable.
The closing balance of the Company’s monetary assets and liabilities dominated in foreign
currencies is disclosed in VII.82 of Section XI in details.
XI. Disclosure of fair value
1. The closing balance of the fair value of assets and liabilities measured at fair value
√ Applicable□ N/A
277 / 311
Annual Report 2020
In RMB
Closing balance of fair value
Item
Level 1 Level 2 Level 3 Total
I. Continuous fair value
measurement
(I) Held-for-trading
financial assets
1. Financial assets at fair
value through profit or
loss
(1) Investment in debt
instrument
(2) Investment in equity
instrument
(3) Derivative financial
assets
(4) Structural deposits 114,000,000.00 114,000,000.00
2. Designated as
financial assets at fair
value through profit or
loss
(1) Investment in debt
instrument
(2) Investment in equity
instrument
3. Receivables financing 11,959,000.00 11,959,000.00
(II) Other debt
investments
(III) Other equity 11,975,419.38 11,975,419.38
instrument investments
(IV) Investment
properties
1. Land use right for
leasing purpose
2. Buildings leased
3. Land use right held for
the purpose of transfer
after value appreciation
(V) Biological assets
1. Consumable
biological assets
2. Productive biological
assets
Total assets 137,934,419.38 137,934,419.38
continuously measured
at fair value
(VI) Held-for-trading
financial liabilities
1. Financial liabilities at
fair value through profit
or loss
Where: Held-for-trading
bonds issued
Derivative
financial liabilities
Others
278 / 311
Annual Report 2020
2. Designated as
financial liabilities at fair
value through profit or
loss
Total liabilities
continuously measured
at fair value
II. Non-continuous fair
value measurement
(I) Held-for-sale assets
Total assets that are
not continuously
measured at fair value
Total liabilities that are
not continuously
measured at fair value
2. Basis for determining the market price of continuous and non-continuous level 1 fair value
measurement items
□ Applicable√ N/A
3. Valuation techniques and qualitative and quantitative information of key parameters adopted for
continuous and non-continuous level 2 fair value measurement items
□ Applicable√ N/A
4. Valuation techniques and qualitative and quantitative information of key parameters adopted for
continuous and non-continuous level 3 fair value measurement items
√ Applicable□ N/A
No public market is available for financial assets at fair value through profit or loss, receivables
financing, and investment in other equity instruments, hence the fair value of the foregoing are measured
at cost.
5. Reconciliation between opening and closing carrying amounts and sensitivity analysis of
unobservable parameters for continuous level 3 fair value measurement items
□ Applicable√ N/A
6. Where transfers among levels occurred in the period, transfer reasons and policies for determining
transfer time point for continuous fair value measurement items
□ Applicable√ N/A
7. Changes in valuation techniques in the period and reasons for changes
□ Applicable√ N/A
8. Fair value of financial assets and financial liabilities not measured at fair value
□ Applicable√ N/A
9. Others
□ Applicable√ N/A
XII. Related-party relationships and transactions
1. Parent of the Company
√ Applicable□ N/A
In RMB 0’000
279 / 311
Annual Report 2020
Proportion of the Proportion of the
Company's Company's voting
Parent Registration Business Registered
shares held by right held by the
company place nature capital
the parent parent company
company (%) (%)
Shenzhen R&D and
Appotronics sales of RMB 10
Shenzhen 17.62 17.62
Holdings semiconductor million
Limited products
Description of the parent company of the Company
None
The ultimate controlling party of the Company is LI Yi.
Other information:
None
2. Subsidiaries of the Company
Refer to the Notes for details about the subsidiaries of the Company
√ Applicable□ N/A
Refer to the description in IX.1 of Section XI for details about the subsidiaries of the Company
3. Associates and joint ventures of the Company
Information of the significant joint ventures or associates of the Company is disclosed in IX.3 of Section
XI.
□ Applicable√ N/A
Details of other joint ventures or associates having related-party transactions and balances with the
Company in the period or in prior periods:
√ Applicable□ N/A
Associates or joint ventures Relationship with the Company
Cinionic Limited Participating company
GDC Technology Limited (BVI) Participating company
Other information
√ Applicable□ N/A
Refer to the description in IX.3 of Section XI for details about the associates of the Company
4. Other related parties of the Company
√ Applicable□ N/A
Other related party Relationship between other related party and the
Company
Shenzhen Bevix Technology Co., Ltd. Holding more than 5% of shares in the company
Shenzhen YLX Technology Development Controlled by the same de facto controller
Co., Ltd.
Minority shareholders holding more than 10% shares in
CFEC and its affiliates
the subsidiary and their affiliates
Xiaomi Communications Technologies Co., Minority shareholders holding more than 10% shares in
Ltd. and its affiliates the subsidiary and their affiliates
Beijing Donview Education Technology Minority shareholders holding more than 10% shares in
Co., Ltd. and its affiliates the subsidiary and their affiliates
Other information
None
5. Related party transactions
(1). Sales and purchase of goods, rendering and receipt of services
Purchase of goods/receipt of services
√ Applicable□ N/A
280 / 311
Annual Report 2020
In RMB
Amount for the current Amount for the prior
Related party Subject matter
period period
CFEC and its affiliates Power supply, water
27,172,641.25 75,594,510.73
cooling and services
Xiaomi Communications
Electronic components
Technologies Co., Ltd. 205,885,065.38 135,947,996.69
and services
and its affiliates
Beijing Donview
Education Technology Service 36,371.68 70,302.92
Co., Ltd. and its affiliates
GDC Technology
Limited(BVI) and its Electronic components 8,703,704.00
affiliates
Subtotal 241,797,782.31 211,612,810.34
Sales of goods/rendering of services
√ Applicable□ N/A
In RMB
Amount for the current Amount for the prior
Related party Subject matter
period period
Shenzhen Bevix
Service 4,508.85
Technology Co., Ltd.
GDC Technology
Light generator engine
Limited(BVI) and its 3,740,484.98
and software
affiliates
CFEC and its affiliates Laser cinema projector
light source and lease 92,512,007.78 141,777,980.65
service
Xiaomi Communications
Laser TV, smart mini
Technologies Co., Ltd. 650,541,969.04 456,486,039.21
projector
and its affiliates
Beijing Donview
Laser business
Education Technology 26,233,035.11 74,848,453.68
education projector
Co., Ltd. and its affiliates
Cinionic Limited Laser light source 35,706,691.15 125,395,135.96
Subtotal 808,738,696.91 798,507,609.50
Description of sales and purchase of goods, rendering and receipt of services
□ Applicable√ N/A
(2). Details of trust with related parties/subcontracting and trust management/ contract-issuing
Details of trust/contracting where a group entity is the trustor/main contractor:
□ Applicable√ N/A
Description of trust/subcontracting with related parties
□ Applicable√ N/A
Details of trust/contracting where a group entity is the trustor/main contractor
□ Applicable√ N/A
Description of management/contract-issuing with related parties
□ Applicable√ N/A
(3). Leases with related parties
The Company as the lessor:
□ Applicable√ N/A
281 / 311
Annual Report 2020
The Company as the lessee:
√ Applicable□ N/A
In RMB
Type of leased Lease fees recognized in Lease fees recognized in the
Lessor
assets the current period prior period
CFEC and its affiliates Property lease 1,794,184.41 2,070,494.22
Description of leases with related parties
□ Applicable√ N/A
(4). Guarantees with related parties
The Company as a guarantor:
□ Applicable√ N/A
The Company as a guaranteed party:
□ Applicable√ N/A
Description of guarantees with related parties
□ Applicable√ N/A
(5). Borrowings/loans with related parties
√ Applicable□ N/A
In RMB
Related party Borrowing amount Start date Expiry date Description
Borrowing
CFEC and its Annual interest
19,320,000.00 2020.07.06 2021.7.5
affiliates rate of 4.00%
(6). Assets transfer/debt restructuring with related parties
√ Applicable□ N/A
In RMB
Amount for the current Amount for the prior
Related party Subject matter
period period
Shenzhen YLX
Technology Transfer of fixed assets 740,617.73
Development Co., Ltd.
(7). Compensation for key management personnel
√ Applicable□ N/A
In RMB 0’000
Amount for the prior
Item Amount for the current period
period
Compensation for key management 1,463.12 1,673.11
personnel
(8). Other related party transactions
□ Applicable√ N/A
6. Amounts due from/to related parties
(1). Amounts due from related parties
√ Applicable□ N/A
In RMB
Closing balance Opening balance
Item Related party Carrying Bad debt Carrying Bad debt
amount provision amount provision
282 / 311
Annual Report 2020
Accounts CFEC and its
6,125,422.64 306,402.16 17,494,326.54 874,716.33
receivable affiliates
Beijing
Donview
Accounts Education
3,017.00 150.85 8,829,840.85 442,339.31
receivable Technology Co.,
Ltd. and its
affiliates
Xiaomi
Communications
Accounts
Technologies 248,915,862.75 12,445,793.14 45,679,955.49 2,283,997.77
receivable
Co., Ltd. and its
affiliates
Accounts Cinionic
452,175.57 22,608.78 24,298,258.08 1,214,912.90
receivable Limited
GDC
Accounts Technology
2,283,483.24 114,174.16
receivable Limited (BVI)
and its affiliates
Subtotal 257,779,961.20 12,889,129.09 96,302,380.96 4,815,966.31
CFEC and its
Prepayments 3,107,696.59 3,350,592.41
affiliates
GDC
Technology
Prepayments 2,883,384.53
Limited (BVI)
and its affiliates
Subtotal 5,991,081.12 3,350,592.41
Other CFEC and its
296,435.00 14,821.75 290,866.00 14,543.30
receivables affiliates
Xiaomi
Communications
Other
Technologies 100,000.00 5,000.00 100,000.00 5,000.00
receivables
Co., Ltd. and its
affiliates
Subtotal 396,435.00 19,821.75 390,866.00 19,543.30
(2). Amounts due to related parties
√ Applicable□ N/A
In RMB
Item Related party Closing balance of Opening balance of carrying
carrying amount amount
CFEC and its
Accounts payable 11,595,819.93
affiliates
Subtotal 11,595,819.93
Advance from CFEC and its
14,032,071.28 15,893,424.21
customers affiliates
Subtotal 14,032,071.28 15,893,424.21
CFEC and its
Contract liabilities 1,384,955.75
affiliates
GDC Technology
Contract liabilities Limited (BVI) and its 15,108.32
affiliates
Subtotal 1,400,064.07
CFEC and its
Other payables 19,343,613.33
affiliates
283 / 311
Annual Report 2020
Xiaomi
Communications
Other payables 101,668.48
Technologies Co.,
Ltd. and its affiliates
Subtotal 19,445,281.81
7. Related party commitments
□ Applicable√ N/A
8. Other information
□ Applicable√ N/A
XIII. Share-based payments
1. Summary of share-based payment
√ Applicable□ N/A
Unit: Share, in RMB
Total number of the Company's equity instruments 1,100,000.00
granted during the period
Total number of the Company's equity instruments 1,202,490.00
executed during the period
Total number of the Company's equity instruments 2,112,970.00
lapsed during the period
Range of exercise prices and remaining Grant date: October 14, 2019; grant price: RMB
contractual life of the Company's share options 17.425/share; remaining period: 22 months
outstanding at the end of the period Grant date: October 13, 2020; grant price: RMB
17.425/share; remaining period: 22 months
Range of exercise prices and remaining None
contractual life of the Company's other equity
instruments outstanding at the end of the period
Other information
The Company granted 1.1 million shares of restricted shares during the current period.
2. Equity-settled share-based payments
√ Applicable□ N/A
In RMB
The method of determining the fair value of equity Open market quotes
instruments at the grant date
The basis of determining the number of equity Actual grant amount
instruments expected to be executed
Reasons for the significant difference between the None
estimate in the current period and that in the prior
period
Amounts of equity-settled share-based payments 26,259,687.17
accumulated in capital reserve
Total expenses recognized arising from equity-settled 20,581,939.14
share-based payments
Other information
The difference between the the total expenses recognized by equity-settled share-based payments in
the current period and the amount of share-based payments included in owners' equity arises from the
exchange rate translation difference.
3. Cash-settled share-based payments
284 / 311
Annual Report 2020
□ Applicable√ N/A
4. Modification to and termination of share-based payments
□ Applicable√ N/A
5. Others
□ Applicable√ N/A
XIV. Commitments and contingencies
1. Significant commitments
√ Applicable□ N/A
Significant external commitments, and nature and amount thereof as of the balance sheet date
Significant lease contracts which the Company has entered into or will perform and their financial
impacts are disclosed in the following table:
Rent area
Rent Rent
No. Rent address (square Rent period
purpose expense/year
meters)
Research
20/F, 21/F, 22/F, United Headquarter and
Building, High-Tech Zone, No. 63 developmen 2019.8.1-2021.1
1 6,143.79 5,617,179.71
Xuefu Road, Nanshan District, t, office 2.31
Shenzhen administrati
on
Research
and
23/F, United Headquarter Building,
developmen 2020.2.1-2025.1
2 High-Tech Zone, No. 63 Xuefu Road, 2,047.93 1,954,275.31
t, office .31
Nanshan District, Shenzhen
administrati
on
Yaochuan Industrial Zone, Tangwei
2018.12.1-2022.
3 Community, Fuhai Street, Bao'an 23,765.57 Plant 12,659,623.09
11.30
District, Shenzhen
Room101, 1/F, Building 22E, Phase III Office
2019.3.20-2022.
4 of Hong Kong Science and Technology 1,138.25 administrati 2,845,286.01
3.19
Park on
2. Contingencies
(1). Significant contingencies as of the balance sheet date
√ Applicable□ N/A
Pending litigation
1. Civil litigation and arbitration where the Company acted as the plaintiff
As of December 31, 2020, there are 27 civil litigation cases where the Company acted as a plaintiff,
specifically including:
Cause of Amount
Case No. Plaintiff Defendant Patents involved Progress
action involved
Appotronic
Correcting Delta Accepte
19-cv-00466-RGD-LR s Patent No.
L the inventor Electronics, d but not
Corporation 9,024,241
of the patent Inc. tried
Limited
Appotronic
Delta Accepte
(2019) Yue 03 Min s
Chu No. 4309 Ownership Electronics, ZL201610387831.8 d but not
Corporation
Inc. tried
Limited
285 / 311
Annual Report 2020
Cause of Amount
Case No. Plaintiff Defendant Patents involved Progress
action involved
Infringemen Appotronic Loss
(2019) Yue 03 Min t on patent s Defendant compensatio
Chu No. 2942 for Corporation 1: Delta n of RMB
invention Limited Electronics 8.00 million
Infringemen Appotronic (Shanghai) Loss
(2019) Yue 03 Min t on patent s Co., Ltd.; compensatio
Chu No. 2945 for Corporation Defendant n of RMB
invention Limited 2: Delta 8.00 million
Infringemen Appotronic Video Loss In trial
(2019) Yue 03 Min t on patent s Display compensatio of the
Chu No. 2947 ZL200880107739.5
for Corporation System n of RMB first
invention Limited (Wujiang) 4.00 million instance
Infringemen Appotronic Limited; Loss
(2019) Yue 03 Min t on patent s Defendant compensatio
Chu No. 2949 for Corporation 3: Shenzhen n of RMB
invention Limited Super 4.00 million
Infringemen Appotronic Network Loss
(2019) Yue 03 Min t on patent s Technology compensatio
Chu No. 2950 for Corporation Co., Ltd. n of RMB
invention Limited 4.00 million
Infringemen Appotronic Loss
(2019) Yue 03 Min t on patent s Defendant compensatio
Chu No. 2943 for Corporation 1: Delta n of RMB
invention Limited Electronics 8.00 million
Infringemen Appotronic (Shanghai) Loss
(2019) Yue 03 Min t on patent s Co., Ltd.; compensatio
Chu No. 2944 for Corporation Defendant n of RMB
invention Limited 2: Delta 8.00 million
Infringemen Appotronic Video Loss In trial
(2019) Yue 03 Min t on patent s Display ZL200810065225. compensatio of the
Chu No. 2946 for Corporation System X n of RMB first
invention Limited (Wujiang) 4.00 million instance
Infringemen Appotronic Limited; Loss
(2019) Yue 03 Min t on patent s Defendant compensatio
Chu No. 2948 for Corporation 3: Shenzhen n of RMB
invention Limited Super 4.00 million
Infringemen Appotronic Network Loss
(2019) Yue 03 Min t on patent s Technology compensatio
Chu No. 2951 for Corporation Co., Ltd. n of RMB
invention Limited 4.00 million
Defendant Loss
1: Delta compensatio
Infringemen Appotronic
Video n of RMB
(2020) Yue 73 Min t on patent s
Chu No. 1335 Display 3.00 million
for Corporation
System + litigation
invention Limited
(Wujiang) costs RMB In trial
Limited 0.50 million of the
ZL200880107739.5
Defendant Loss first
2: WANG compensatio instance
Infringemen Appotronic
Yuhai n of RMB
(2020) Yue 73 Min t on patent s
Defendant 6.50 million
Chu No. 1336 for Corporation
3: Hunan + litigation
invention Limited
Dehao costs RMB
Cultural and 0.50 million
286 / 311
Annual Report 2020
Cause of Amount
Case No. Plaintiff Defendant Patents involved Progress
action involved
Creative Loss
Co., Ltd. compensatio
Infringemen Appotronic
Defendant n of RMB
(2020) Yue 73 Min t on patent s
Chu No. 1337 4: Delta 2.50 million
for Corporation
Electronics + litigation
invention Limited
Business costs RMB
Managemen 0.50 million
t (Shanghai) Loss
Co., Ltd. compensatio
Infringemen Appotronic
Defendant n of RMB
(2020) Yue 73 Min t on patent s
5: 2.00 million
Chu No. 1338 for Corporation
Guangdong + litigation
invention Limited
Jianye costs RMB
Display 0.50 million
Information Loss
Technology compensatio
Infringemen Appotronic
Co., Ltd. n of RMB
(2020) Yue 73 Min t on patent s
Defendant 6.00 million
Chu No. 1340 for Corporation
6: + litigation
invention Limited
Guangzhou costs RMB
Jianye 0.50 million
Network Loss
Technology compensatio
Infringemen Appotronic
Co., Ltd. n of RMB
(2020) Yue 73 Min t on patent s
Chu No. 1341 14.00 million
for Corporation
+ litigation
invention Limited
costs RMB
0.50 million
Defendant Loss
1: Delta compensatio
Infringemen Appotronic
Electronics n of RMB
(2020) Yue 73 Min t on patent s
Chu No. 1361 Business 0.75 million
for Corporation
Managemen + litigation
invention Limited
t (Shanghai) costs RMB
Co., Ltd. 0.50 million
287 / 311
Annual Report 2020
Cause of Amount
Case No. Plaintiff Defendant Patents involved Progress
action involved
Defendant
2: WANG
Yuhai
Defendant
3: Hunan
Dehao
Cultural and
Creative
Co., Ltd.
Loss
Defendant
compensatio
Infringemen Appotronic 4: In trial
n of RMB
(2020) Yue 73 Min t on patent s Guangdong ZL200810065225. of the
Chu No. 1339 0.75 million
for Corporation Jianye X first
+ litigation
invention Limited Display instance
costs RMB
Information
0.50 million
Technology
Co., Ltd.
Defendant
5:
Guangzhou
Jianye
Network
Technology
Co., Ltd.
288 / 311
Annual Report 2020
Cause of Amount
Case No. Plaintiff Defendant Patents involved Progress
action involved
Defendant
1: Delta
Video
Display
System
(Wujiang)
Limited
Defendant
2: WANG
Yuhai
Defendant
3: Hunan
Dehao
Cultural and
Creative
Co., Ltd.
Loss
Defendant
compensatio
Infringemen Appotronic 4: Delta
n of RMB
(2020) Yue 73 Min t on patent s Electronics
Chu No. 1353 14.00 million
for Corporation Business
+ litigation
invention Limited Managemen
costs RMB
t (Shanghai)
0.50 million
Co., Ltd.
Defendant
5:
Guangdong
Jianye
Display
Information
Technology
Co., Ltd.
Defendant
6:
Guangzhou
Jianye
Network
Technology
Co., Ltd.
289 / 311
Annual Report 2020
Cause of Amount
Case No. Plaintiff Defendant Patents involved Progress
action involved
Defendant
1: Delta
Video
Display
System
(Wujiang)
Limited
Defendant
2: WANG
Yuhai
Defendant
3: Hunan
Dehao
Cultural and
Creative
Co., Ltd.
Loss
Defendant
compensatio
Infringemen Appotronic 4: Digital
n of RMB
(2020) Yue 73 Min t on patent s Protection
Chu No. 1355 6.00 million
for Corporation (Beijing)
+ litigation
invention Limited Electronics
costs RMB
Technology
0.50 million
Co., Ltd.
Defendant
5:
Guangdong
Jianye
Display
Information
Technology
Co., Ltd.
Defendant
6:
Guangzhou
Jianye
Network
Technology
Co., Ltd.
290 / 311
Annual Report 2020
Cause of Amount
Case No. Plaintiff Defendant Patents involved Progress
action involved
Defendant
1: Delta
Video
Display
System
(Wujiang)
Limited
Defendant
2: WANG
Yuhai
Defendant
3: Hunan
Dehao
Cultural and
Creative
Co., Ltd.
Loss
Defendant
compensatio
Infringemen Appotronic 4: Delta
n of RMB
(2020) Yue 73 Min t on patent s Electronics
Chu No. 1356 6.50 million
for Corporation Business
+ litigation
invention Limited Managemen
costs RMB
t (Shanghai)
0.50 million
Co., Ltd.
Defendant
5:
Guangdong
Jianye
Display
Information
Technology
Co., Ltd.
Defendant
6:
Guangzhou
Jianye
Network
Technology
Co., Ltd.
291 / 311
Annual Report 2020
Cause of Amount
Case No. Plaintiff Defendant Patents involved Progress
action involved
Defendant
1: Delta
Video
Display
System
(Wujiang)
Limited
Defendant
2: WANG
Yuhai
Defendant
3: Hunan
Dehao
Cultural and
Creative
Co., Ltd.
Loss
Defendant
compensatio
Infringemen Appotronic 4: Digital
n of RMB
(2020) Yue 73 Min t on patent s Protection
Chu No. 1357 2.50 million
for Corporation (Beijing)
+ litigation
invention Limited Electronics
costs RMB
Technology
0.50 million
Co., Ltd.
Defendant
5:
Guangdong
Jianye
Display
Information
Technology
Co., Ltd.
Defendant
6:
Guangzhou
Jianye
Network
Technology
Co., Ltd.
Defendant Loss
1: Delta compensatio
Infringemen Appotronic
Video n of RMB
(2020) Yue 73 Min t on patent s
Chu No. 1358 Display 2.00 million
for Corporation
System + litigation
invention Limited
(Wujiang) costs RMB
Limited 0.50 million
292 / 311
Annual Report 2020
Cause of Amount
Case No. Plaintiff Defendant Patents involved Progress
action involved
Defendant
2: WANG
Yuhai
Defendant
3: Hunan
Dehao
Cultural and
Creative
Co., Ltd.
Defendant
4: Delta
Electronics
Business Loss
Managemen compensatio
Infringemen Appotronic
t (Shanghai) n of RMB
(2020) Yue 73 Min t on patent s
Chu No. 1359 Co., Ltd. 3.00 million
for Corporation
Defendant + litigation
invention Limited
5: costs RMB
Guangdong 0.50 million
Jianye
Display
Information
Technology
Co., Ltd.
Defendant
6:
Guangzhou
Jianye
Network
Technology
Co., Ltd.
293 / 311
Annual Report 2020
Cause of Amount
Case No. Plaintiff Defendant Patents involved Progress
action involved
Defendant
1: Delta
Video
Display
System
(Wujiang)
Limited
Defendant
2: WANG
Yuhai
Defendant
3: Hunan
Dehao
Cultural and
Creative
Co., Ltd.
Loss
Defendant
compensatio
Infringemen Appotronic 4: Digital
n of RMB
(2020) Yue 73 Min t on patent s Protection
Chu No. 1360 3.00 million
for Corporation (Beijing)
+ litigation
invention Limited Electronics
costs RMB
Technology
0.50 million
Co., Ltd.
Defendant
5:
Guangdong
Jianye
Display
Information
Technology
Co., Ltd.
Defendant
6:
Guangzhou
Jianye
Network
Technology
Co., Ltd.
2. Civil litigation and arbitration where the Company acted as the defendant
As of December 31, 2020, there are 7 civil litigations where the Company was a defendant,
specifically including:
Cause of
Case No. Plaintiff Defendant Patents involved Amount involved Progress
action
Appotronics Loss compensation of
(2019) Yue
Corporation RMB 16.00 million +
73 Zhi Min ZL201610387831.8 Stayed
Chu No. 662 Infringement Limited; litigation costs RMB
Delta
of patent Futian SPN 145,343
Electronics,
rights of Projector & Loss compensation of Trial of
(2019) Yue Inc.
inventions Video RMB 16.00 million + the first
73 Zhi Min ZL201310017478.0
Chu No. 663 System litigation costs RMB instance
Firm of 145,343 completed
294 / 311
Annual Report 2020
Cause of
Case No. Plaintiff Defendant Patents involved Amount involved Progress
action
Shenzhen Loss compensation of Trial of
(2019) Yue
RMB 16.00 million + the first
73 Zhi Min ZL20310625063.1
Chu No. 664 litigation costs RMB instance
145,343 completed
Loss compensation of
(2019) Jing In trial of
RMB 15.00 million +
73 Min Chu ZL201610387831.8 the first
No.1275 litigation costs RMB
instance
1.01 million
Loss compensation of
(2019) Jing Formoive In trial of
RMB 15.00 million +
73 Min Chu (Beijing) ZL201410249663.7 the first
No. 1276 litigation costs RMB
Technology instance
1.01 million
Co., Ltd.;
Loss compensation of Trial of
(2019) Jing Appotronics
RMB 15.00 million + the first
73 Min Chu Corporation ZL201310017478.0
No. 1277 litigation costs RMB instance
Limited
1.01 million completed
Loss compensation of
(2019) Jing In trial of
RMB 15.00 million +
73 Min Chu ZL201010624724.5 the first
No. 1278 litigation costs RMB
instance
1.01 million
(2). Description shall also be provided even if the Company has no significant contingencies to be
disclosed:
□ Applicable√ N/A
3. Others
□ Applicable√ N/A
XV. Events after the balance sheet date
1. Material non-adjusting event
√ Applicable□ N/A
In RMB 0’000
Reasons for not being
Effects on the financial
able to estimate such
Item Content position and operating
effects
results
Significant external Acquisition of and The specific amount
investments investment in WeCast depends on the
operating results of
WeCast
Others Mortgage borrowings Cause no impact on the
profit or loss; increase
the assets and
liabilities at the same
time; the borrowing
amount is to be
determined
Others Restricted share Increase expenses and
incentives capital reserve; the
specific amount
depends on factors
such as the specific
grant date
295 / 311
Annual Report 2020
(I) External investment
On March 26, 2021, the Company held the 30th meeting of the first Board of Directors and the 17th
meeting of the first Board of Supervisors, at which the Proposal on Capital Increase by Formoive in a
Wholly-owned Subsidiary and Acquisition of 51% Equity Interests in WeCast Technology Corp. and the
Related-party Transaction was reviewed and approved, under which the Company would subscribe to
51% equity interests in WeCast Technology Corp. As of the date of approval for issue of the financial
statements, the Company has not completed the acquisition.
(II) Mortgage borrowings
On August 25, 2020, the Company held the 25th meeting of the first Board of Directors, at which
the Proposal on Mortgage Loans with Land Use Rights was reviewed and passed, approving the
Company to request the fixed assets loans of RMB 700 million for 10 years from the bank syndicate led
by China Construction Bank Co., Ltd. Shenzhen Branch with the land use rights of the Company as the
mortgage by signing relevant loan mortgage contract. The loans are intended merely for the construction
of the head office of the Company. The Company has completed the mortgage registration and handover
formalities for the land use rights by January 20, 2021.
(III) Share incentive
On March 26, 2021, the Company held the 30th meeting of the first Board of Directors and the 17th
meeting of the first Board of Supervisors, at which the Proposal on the “2021 Restricted Share Incentive
Plan (Draft)” and Summary Thereof was reviewed and passed, under which the Company intends to
grant 18.5000 million restricted shares, including 17.1000 million shares in the initial grant and 1.4000
million shares reserved. There are 224 grantees of share incentives in the initial grant at the grant prices
of RMB 17.50 per share, RMB 18.50 per share, and RMB 21.00 per share depending on circumstances
of the grantees of share incentives.
2. Profit distribution
√ Applicable□ N/A
In RMB 0’000
Proposed distributions of profits or 2,490.16
dividends
Profits or dividends declared for 2,490.16
distribution upon discussion and
approval
The Company’s 2020 preliminary plan for profit distribution is disclosed as below: the Company
proposed to distribute to all shareholders a cash dividend of RMB 0.55 (including tax) for every 10
shares on the basis of the total share capital as at the date of share registration for 2020 annual dividend
distribution, according to which the total cash dividends expected to be distributable would be RMB
24.9016 million; the Company would neither capitalize its capital reserve nor grant bonus shares. The
amount for cash dividends in the aforesaid 2020 profit distribution plan is temporarily calculated based
on the Company’s current total share capital of 452,756,901 shares, but the actual amount for cash
dividends in total should be calculated subject to the basis of the total share capital as at the date of share
296 / 311
Annual Report 2020
registration for 2020 annual dividend distribution. The Company’s 2020 preliminary plan for profit
distribution still needs to be approved by the general meeting of shareholders of the Company.
3. Sales return
□ Applicable√ N/A
4. Description of other events after the balance sheet date
□ Applicable√ N/A
XVI. Other significant events
1. Corrections of prior period errors
(1). Retrospective application
□ Applicable√ N/A
(2). Prospective application
□ Applicable√ N/A
2. Debt restructuring
□ Applicable√ N/A
3. Asset swap
(1). Exchange of non-monetary assets
□ Applicable√ N/A
(2). Other asset swap
□ Applicable√ N/A
4. Annuity plan
□ Applicable√ N/A
5. Discontinued operations
□ Applicable√ N/A
6. Segment information
(1). Determination basis and accounting policies of reporting segments
□ Applicable√ N/A
(2). Financial information of reporting segments
□ Applicable√ N/A
(3). If the Company has no reporting segments, or cannot disclose the total assets and liabilities of
reporting segments, specify the reasons.
□ Applicable√ N/A
(4). Other information
√ Applicable□ N/A
The Company has no reporting segments due to absence of diversified operations. A breakdown of
the Company's principal operating incomes and costs categorized by businesses, products and regions is
disclosed as below:
Categorized by businesses and products:
In RMB 0’000
Amount for the current period Amount for the prior period
Item Principal activity Principal activity Principal activity Principal activity
income cost income cost
297 / 311
Annual Report 2020
Item Amount for the current period Amount for the prior period
1. Sales 174,412.33 128,143.43 155,344.15 102,544.69
2. Lease service 17,173.26 10,775.31 39,799.12 13,526.03
3. Other business 3,302.83 388.76 2,771.62 2,294.34
Subtotal 194,888.42 139,307.50 197,914.89 118,365.06
Categorized by regions:
In RMB 0’000
Amount for the current period Amount for the prior period
Item Principal activity Principal activity Principal activity Principal activity
income cost income cost
Domestic 185,561.99 135,605.70 178,039.72 111,260.78
Overseas 9,326.43 3,701.80 19,875.17 7,104.28
Subtotal 194,888.42 139,307.50 197,914.89 118,365.06
7. Other significant transactions and matters having an impact on the decisions of investors
□ Applicable√ N/A
8. Others
√ Applicable□ N/A
Performance commitment
In the 20th meeting of the first Board of Directors held on December 6, 2019, the Proposal on
Proposed Additional Capital Contribution to the Wholly-owned Subsidiary and Foreign Investments in
GDC was reviewed and passed, according to which it was agreed to make additional capital contribution
of USD 18.2 million to the Company’s wholly-owned subsidiary APPOTRONICS HONG KONG
LIMITED for acquisition of 36% shares of GDC Technology Limited (British Virgin Islands). On April
9, 2020, the Company paid the total consideration of approximately USD 18.11 million by its own funds.
During the reporting period, the Company holds 36% equity interests in GDC, namely, 93,071,822
shares of GDC.
According to the Share Transfer Agreement, GDC made the the following performance covenants: the
audited net profit after deduction of non-recurring profit or loss in 2020 shall be no less than USD 9.35
million; if it fails to achieve the performance objective above, GDC Cayman, the original shareholder of
GDC, shall make compensation or submit a response within 15 working days from the submission date
of GDC’s annual auditor’s report within the limit of USD 5.60 million or 46,535,911 ordinary shares of
GDC.
According to the 2020 auditor’s report of GDC issued by Deloitte, GDC achieved the net profit of USD
0.9268 million in 2020, and failed to achieve the performance covenant for the year 2020, hence
triggering the performance compensation provisions.
By now, we have officially required GDC to make performance compensation in accordance with the
provisions. As of the disclosure date of this report, we have reached no consensus with the original
shareholder of GDC on this matter.
XVII. Notes to key items in the parent company's financial statements
1. Accounts receivable
(1). Disclosure by aging
√ Applicable□ N/A
In RMB
Aging Closing balance of carrying amount
Within 1 year
298 / 311
Annual Report 2020
Where: Subitems within 1 year
Subtotal of items within 1 year 450,871,451.43
1 to 2 years 117,087,528.49
2 to 3 years 1,490,775.02
Total 569,449,754.94
(2). Disclosure by categories of provision for bad debts
√ Applicable□ N/A
In RMB
Closing balance Opening balance
Bad debt Bad debt
Carrying amount Carrying amount
provision provision
Per Per
cent cent
Category age Book age Book
Perce Perce
Amoun of value Amoun of value
Amount ntage Amount ntage
t pro t pro
(%) (%)
visi visi
on on
(%) (%)
Provision 569,449,754 100.00 1,910,248 0.34 567,539,50 300,789,821 100.00 1,474,044 0.49 299,315,776
.94 .15 6.79 .26 .82 .44
for bad
debts made
by group
Where:
Group of 37,102,8 6.52 1,910,248 5.15 35,192,572. 21,151,263. 7.03 1,474,044 6.97 19,677,219.
.15 05 98 .82 16
aging 20.20
569,449,754 / 1,910,248 / 567,539,50 300,789,821 / 1,474,044 / 299,315,776
Total .94 .15 6.79 .26 .82 .44
Provision for bad debts made individually:
□ Applicable√ N/A
Provision for bad debts made by group:
√ Applicable□ N/A
Item by group: Group of aging
In RMB
Closing balance
Name Proportion of provision
Accounts receivable Bad debt provision
(%)
Group of aging 37,102,820.20 1,910,248.15 5.15
Group of receivables 532,346,934.74
from related parties in
the scope of
consolidation
Total 569,449,754.94 1,910,248.15 0.34
Recognition criterion to make the bad debt provision by group and explanation:
√ Applicable□ N/A
Recognition criterion to make the bad debt provision by group and explanation can refer to V.10 of
Section XI for details.
If a provision for bad debts of accounts receivable is made in accordance with the general model of ECL,
please disclose relevant information subject to the disclosure of the bad debt provision for other
receivables:
□ Applicable√ N/A
299 / 311
Annual Report 2020
(3). Provision for bad debts
√ Applicable□ N/A
In RMB
Changes for the current period
Opening Closing
Category Recovery Write off or Other
balance Provision balance
or reversal cancellation changes
Provision for 1,474,044.82 436,203.33 1,910,248.15
bad debts
made by
group
Total 1,474,044.82 436,203.33 1,910,248.15
Including significant amounts recovered or reversed from the current provision for bad debts:
□ Applicable√ N/A
(4). Accounts receivable actually canceled in the current period
□ Applicable√ N/A
In which significant amounts canceled are described as below:
□ Applicable√ N/A
(5). Top five closing balances of accounts receivable categorized by debtors
√ Applicable□ N/A
Proportion to
the balance of Bad debt
Entity Carrying amount
accounts provision
receivable (%)
Formoive (Beijing) Technology Co., Ltd. 393,022,783.43 69.02
CINEAPPO Laser Cinema Technology
71,721,879.64 12.59
(Beijing) Co., Ltd.
Appotronics Hong Kong Limited 47,383,360.55 8.32
Shenzhen Sunvalley Technology Development 22,790,393.35 4.00 1,139,519.67
Co., Ltd.
Appotronics Technology (Changzhou) Co., 14,732,081.15 2.59
Ltd.
Subtotal 549,650,498.12 96.52 1,139,519.67
(6). Accounts receivable derecognized due to transfer of financial assets
□ Applicable√ N/A
(7). Assets and liabilities arising from transfer of accounts receivables and continued involvement
□ Applicable√ N/A
Other information:
□ Applicable√ N/A
2. Other receivables
Presented by items
√ Applicable□ N/A
300 / 311
Annual Report 2020
In RMB
Item Closing balance Opening balance
Interest receivable
Dividend receivable
Other receivables 71,654,117.57 67,227,575.21
Total 71,654,117.57 67,227,575.21
Other information:
□ Applicable√ N/A
Interest receivable
(1). Categories of interest receivable
□ Applicable√ N/A
(2). Significant interests overdue
□ Applicable√ N/A
(3). Provision for bad debts
□ Applicable√ N/A
Other information:
□ Applicable√ N/A
(4). Dividend receivable
□ Applicable√ N/A
(5). Dividends receivable with significant amounts aged more than 1 year
□ Applicable√ N/A
(6). Provision for bad debts
□ Applicable√ N/A
Other information:
□ Applicable√ N/A
Other receivables
(1). Disclosure by aging
√ Applicable□ N/A
In RMB
Aging Closing balance of carrying amount
Within 1 year
Where: Subitems within 1 year
Subtotal of items within 1 year 53,288,168.30
1 to 2 years 17,561,278.00
2 to 3 years 519,433.80
Over 3 years 778,397.60
Total 72,147,277.70
(2). Categories by the nature of other receivables
√ Applicable□ N/A
In RMB
Nature of receivables Closing balance of carrying Opening balance of carrying
amount amount
Deposits/margins/petty cash 5,911,673.21 6,343,792.67
Withholding 650,484.24
Receivables from related parties 62,284,074.96 60,540,712.71
in the scope of consolidation
Compensation receivable 3,577,279.61
Temporary receivables 374,249.92 10,289.71
Total 72,147,277.70 67,545,279.33
301 / 311
Annual Report 2020
(3). Provision for bad debts
√ Applicable□ N/A
In RMB
Stage I Stage II Stage III
Bad debt Lifetime ECL
12-month ECL Lifetime ECL (with Total
provision (without credit
in the future credit impairment)
impairment)
Balance as at
317,704.12 317,704.12
January 1, 2020
Balance as at
January 1, 2020 in
the current period
--transferred to
Stage II
--transferred to -6,300.00 6,300.00
Stage III
--reversed to Stage
II
--reversed to Stage
I
Provision 181,756.01 181,756.01
Reversal
Write-off
Cancellation 6,300.00
Other changes
Balance as at
493,160.13 493,160.13
January 12, 2020
Description of significant changes in the balance of other receivables with changed provisions for losses
in the current period:
□ Applicable√ N/A
Basis for recognizing the amount of bad debt provisions and evaluating whether the credit risk of
financial instruments has been increased significantly in the current period:
□ Applicable√ N/A
(4). Provision for bad debts
√ Applicable□ N/A
In RMB
Changes for the current period
Opening Recovery Closing
Category Write off or Other
balance Provision or balance
cancellation changes
reversal
Provision
for bad
317,704.12 181,756.01 6,300.00 493,160.13
debts made
by group
Total 317,704.12 181,756.01 6,300.00 493,160.13
Including significant amounts recovered or reversed from the current provision for bad debts:
□ Applicable√ N/A
(5). Other receivable actually canceled in the current period
□ Applicable√ N/A
(6). Top five closing balances of other receivable categorized by debtors
√ Applicable□ N/A
302 / 311
Annual Report 2020
In RMB
Proportion to
Bad debt
the balance of
Nature of other Closing provision
Entity Aging other
receivables balance closing
receivables
balance
(%)
CINEAPPO
Laser
Receivables from
Cinema Within
related parties in the 33,220,686.40 46.05
Technology 1 year
scope of consolidation
(Beijing)
Co., Ltd.
Formoive
Receivables from
(Beijing) Within
related parties in the 14,532,924.37 20.14
Technology 1 year
scope of consolidation
Co., Ltd.
Shenzhen
Appotronics
Receivables from
Laser Within
related parties in the 14,169,500.00 19.64
Display 3 years
scope of consolidation
Technology
Co., Ltd.
Creator
Community Compensation Within
3,577,279.61 4.96 178,863.98
(Guangzhou) receivable 1 year
Co., Ltd.
Shenzhen
Meisheng Deposits/margins/petty 2-3
3,574,618.00 4.95 178,730.89
Industry Co., cash years
Ltd.
Total / 69,075,008.38 / 95.74 357,594.87
(7). Accounts receivable involving government grants
□ Applicable√ N/A
(8). Other receivable derecognized due to transfer of financial assets
□ Applicable√ N/A
(9). Assets and liabilities arising from transfer of other receivables and continued involvement
□ Applicable√ N/A
Other information:
□ Applicable√ N/A
3. Long-term equity investment
√ Applicable□ N/A
In RMB
Closing balance Opening balance
Provision Provision
Item Carrying Carrying
for Book value for Book value
amount amount
impairment impairment
Investments
in 467,533,569.26 45,885,284.27 421,648,284.99 303,680,560.40 45,885,284.27 257,795,276.13
subsidiaries
303 / 311
Annual Report 2020
Investments
in
associates
and joint
ventures
Total 467,533,569.26 45,885,284.27 421,648,284.99 303,680,560.40 45,885,284.27 257,795,276.13
(10). Investments in subsidiaries
√ Applicable□ N/A
In RMB
Closing
Provision balance of
Opening Closing
Investees Increase Decrease for provision
balance balance
impairment for
impairment
Appotronics
Timewaying
(Beijing) 27,000,000.00 27,000,000.00 27,000,000.00
Technology Co.,
Ltd.
Shenzhen
Appotronics
Software 516,813.05 1,131,149.17 1,647,962.22
Technology Co.,
Ltd.
Beijing Orient
Appotronics
5,900,000.00 5,900,000.00
Technology Co.,
Ltd.
Formoive
(Beijing)
28,203,950.93 1,810,685.16 30,014,636.09 6,057,491.48
Technology Co.,
Ltd.
Shenzhen
Appotronics Laser
Display 18,966,857.26 18,966,857.26
Technology Co.,
Ltd.
Shenzhen
Appotronics
3,000,000.00 3,000,000.00
Display Device
Co., Ltd.
CINEAPPO Laser
Cinema
30,767,063.78 1,809,838.68 32,576,902.46
Technology
(Beijing) Co., Ltd.
Qingda
Appotronics
(Xiamen) 5,100,000.00 5,100,000.00 827,792.79
Technology Co.,
Ltd.
Shenzhen
Appotronics
Xiaoming 12,000,000.00 12,000,000.00 12,000,000.00
Technology Co.,
Ltd.
Appotronics Hong
173,225,875.38 128,442,808.14 301,668,683.52
Kong Limited
Appotronics
Technology
2,000,000.00 2,000,000.00
(Changzhou) Co.,
Ltd.
304 / 311
Annual Report 2020
Tianjin Bonian
Film Partnership 26,954,120.20 26,954,120.20
(LP)
WEMAX LLC 24,349.32 24,349.32
Appotronics USA,
60,873.29 60,873.29
Inc.
JoveAI
619,184.90 619,184.90
Innovation, Inc
Total 303,680,560.40 163,853,008.86 467,533,569.26 45,885,284.27
(11). Investments in associates and joint ventures
□ Applicable√ N/A
Other information:
None
4. Operating income and operating costs
(12). Description of operating income and operating costs
√ Applicable□ N/A
In RMB
Amount for the current period Amount for the prior period
Item
Income Cost Income Cost
Main business 1,064,149,969.51 720,452,860.84 1,070,365,243.34 728,135,468.64
Total 1,064,149,969.51 720,452,860.84 1,070,365,243.34 728,135,468.64
(13). Description of incomes from contracts
□ Applicable√ N/A
(14). Description of performance obligations
□ Applicable√ N/A
(15). Description of allocation to remaining performance obligations
□ Applicable√ N/A
Other information:
None
5. Investment income
√ Applicable□ N/A
In RMB
Amount for the
Item Amount for the prior period
current period
Gains from long-term equity investment accounted 46,000,000.00
for using the cost method
Long-term equity investment accounted for using
the equity method
Investment income from disposal of long-term -64,542.33
equity investments
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 investments during the
holding period
Interest income from other debt investments during
the holding period
305 / 311
Annual Report 2020
Investment income from disposal of held-for-trading 18,624,853.96 9,552,990.98
financial assets
Investment income from disposal of other equity
instrument investments
Investment income from disposal of debt
investments
Investment income from disposal of other debt
investments
Total 18,624,853.96 55,488,448.65
Other information:
None
6. Others
√ Applicable□ N/A
R&D expenses
Amount for the current Amount for the prior
Item
period period
Employee benefits 57,851,800.94 55,729,731.59
Material consumption expenses 15,548,543.88 17,246,073.81
Depreciation and amortization fees 10,287,002.71 7,573,085.07
Rent expense 7,114,015.29 8,730,216.56
Patent fees 6,796,002.87 9,382,940.04
Other expenses 7,276,270.23 15,132,958.18
Total 104,873,635.92 113,795,005.25
XVIII Supplementary information
1. Breakdown of non-recurring profit or loss for the current period
√ Applicable□ N/A
In RMB
Item Amount Description
Gain or loss on disposal of non-current assets -1,112,121.13
Tax refunds or reductions with ultra vires
approval or without official approval
documents
Government grants recognized in profit or 40,750,823.51
loss (other than grants which are closely
related to the Company's business and are
either in fixed amounts or determined under
quantitative methods in accordance with the
national standard)
Income earned from lending funds to
non-financial institutions and recognized in
profit or loss
The excess of attributable fair value of
identifiable net assets over the consideration
paid for the acquisition of subsidiaries,
associates and joint ventures
306 / 311
Annual Report 2020
Profit or loss on exchange of non-monetary
assets
Profit or loss on entrusted investments or 18,624,853.96
assets management
Impairment losses on assets due to force
majeure events, e.g. natural disasters
Profit or loss on debt restructuring
Entity restructuring expenses, e.g.,
expenditure for layoff of employees,
integration expenses, etc.
Profit or loss attributable to the evidently
unfair portion of transaction price, being
transacted price in excess of fair transaction
price, of a transaction
Net profit or loss of subsidiaries from the 23,593,500.83
beginning of the period up to the business
combination date recognized as a result of
business combination of enterprises
involving enterprises under common control
Profit or loss arising from contingencies
other than those related to normal operating
business
Profit or loss on changes in the fair value of
held-for-trading financial assets, derivative
financial assets, held-for-trading financial
liabilities and derivative financial liabilities
and investment income on disposal of
held-for-trading financial assets, derivative
financial assets, held-for-trading financial
liabilities, derivative financial liabilities and
other debt investments, other than those used
in the effective hedging activities relating to
normal operating business
Reversal of impairment loss on accounts
receivable and contract assets tested for
impairment individually
Profit or loss on entrusted loans
Profit or loss on changes in the fair value of
investment properties that are subsequently
measured using the fair value model
Effects on profit or loss of one-off
adjustment to profit or loss for the period
according to the requirements of laws and
regulations in respect of tax, accounting, etc.
Custodian fees earned from entrusted
operation
Other non-operating income and expenses 2,429,083.25
Other gains or losses meeting the definition 323,003.17
of non-recurring profit or loss
Effect of income taxes -9,068,330.19
Effect of minority interests -1,982,929.14
Total 73,557,884.26
307 / 311
Annual Report 2020
It is required to specify the reason for defining items as non-recurring profit or loss items according to
Information Disclosure and Presentation Rules for Companies Making Public Offering of Securities No.
1－Non-recurring Profit or Loss, and reasons for defining non-recurring profit or loss items illustrated
in Information Disclosure and Presentation Rules for Companies Making Public Offering of Securities
No. 1－Non-recurring Profit or Loss as recurring profit or loss items.
□ Applicable√ N/A
2. Return on net assets and earnings per share
√ Applicable□ N/A
Weighted average Earnings per share
Profit for the reporting period return on net assets Basic earnings per Diluted earnings per
(%) share share
Net profit attributable to 5.62 0.25 0.25
ordinary shareholders of the
Company
Net profit after deduction of 1.99 0.09 0.09
non-recurring profits or losses
attributable to ordinary
shareholders of the Company
2. Calculation process of weighted average return on net assets
Item No. Current period
Net profit attributable to ordinary shareholders of the Company A 113,847,873.06
Non-recurring profit or loss B 73,557,884.26
Net profits after deduction of non-recurring profits or losses
C=A-B 40,289,988.80
attributable to ordinary shareholders of the Company
Opening balance of net assets attributable to ordinary shareholders
D 1,975,838,572.51
of the Company
Net assets increased due to issue of new shares or debt-to-equity
E 20,953,388.25
swap that are attributable to ordinary shareholders of the Company
Accumulated months from the month following the addition of net
F 2
assets to the end of the reporting period
Net assets reduced by repurchases or cash dividends that are
G 33,866,580.83
attributable to ordinary shareholders of the Company
Accumulated months from the month following the reduction of
H 6
net assets to the end of the reporting period
Effect of share-based payments on net assets I1 18,783,763.38
Accumulated months from the month following
the addition or reduction of net assets to the end of J1 6
the reporting period
Effect of translation of financial statements
I2 -6,501,355.78
denominated in foreign currencies on net assets
Others Accumulated months from the month following
the addition or reduction of net assets to the end of J2 6
the reporting period
Impact of acquisition of minority interests on net
assets I3 2,544,011.15
Accumulated months from the month following
the addition or reduction of net assets to the end of J3 0
the reporting period
Months of reporting period K 12
L=D+A/2+E×F/K-G×H/K
Weighted average net assets 2,025,462,653.80
±I×J/K
Weighted average return on net assets M=A/L 5.62%
308 / 311
Annual Report 2020
Weighted average return on net assets after deduction of
N=C/L 1.99%
non-recurring profit or loss
3. Calculation process of basic and diluted earnings per share
(1) Calculation process of basic earnings per share
Item No. Current period
113,847,873
Net profit attributable to ordinary shareholders of the Company A
.06
73,557,884.
Non-recurring profit or loss B
26
Net profits after deduction of non-recurring profits or losses attributable to ordinary 40,289,988.
C=A-B
shareholders of the Company 80
451,554,411
Total shares at the beginning of the period D
.00
1,202,490.0
Shares increased due to issue of new shares or debt-to-equity swap F
0
Accumulated months from the month following the addition of shares to the end of the
G 2
reporting period
Months of reporting period K 12
L=D+F×G/ 451,754,826
Weighted average number of outstanding ordinary shares
K .00
Basic earnings per share M=A/L 0.25
Basic earnings per share after deduction of non-recurring profit or loss N=C/L 0.09
(2) Calculation process of diluted earnings per share
Item No. Current period
Net profit attributable to ordinary shareholders of the Company A 113,847,873.06
Effect of diluted potential ordinary shares on net profit B
Net profits after dilution attributable to ordinary shareholders of
C=A-B 113,847,873.06
the Company
Non-recurring profit or loss D 73,557,884.26
Net profits after dilution and deduction of non-recurring profits
E=C-D 40,289,988.80
or losses attributable to ordinary shareholders of the Company
Weighted average number of outstanding ordinary shares F 451,754,826.00
Weighted average number of ordinary shares added to
G 454,025.28
warrants, share options, and convertible bonds, etc.
Weighted average number of outstanding ordinary shares after
H=F+G 452,208,851.28
dilution
Diluted earnings per share M=C/H 0.25
Diluted earnings per share after deduction of non-recurring
N=E/H 0.09
profit or loss
3. Differences in accounting data under Chinese Accounting Standards and Oversea Accounting
Standards
□ Applicable√ N/A
309 / 311
Annual Report 2020
4. Others
□ Applicable√ N/A
310 / 311
Annual Report 2020
Section XII List of Documents Available for Inspection
1. 2020 Financial and Accounting Statements with seals and signatures of the
List of Documents
principal of the Company, the person in charge of the accounting body and
Available for Inspection
the chief accountant.
2. The Auditor’s Report with seals of Pan-China Certified Public
List of Documents
Accountants (Special General Partnership) and seals and signatures of the
Available for Inspection
certified public accountant.
3. All original documents and announcements of the Company publicly
List of Documents
disclosed in the websites designated by the Company as of the reporting
Available for Inspection
period.
List of Documents 4. The above-mentioned documents are prepared in: Office of the Board of
Available for Inspection Directors of Appotronics Corporation Limited
Chairman: LI Yi
Approval for submission by the Board of Directors: April 22, 2021
Revision information
□ Applicable√ N/A
311 / 311
