2022 Annual Report
Stock Code: 603833 Stock Abbr: Oppein Home Group
Oppein Home Group Inc.
2022 Annual Report
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2022 Annual Report
Important Statements
I. The board of directors, the board of supervisors, directors, supervisors and senior managers of the Company
guarantee the authenticity, accuracy and completeness of the contents of the annual report, and there are no
false records, misleading statements or major omissions, and bear individual and joint legal liabilities.
II. All directors of the Company attend the meeting of the board of directors.
III. Huaxing Certified Public Accounts LLP (Special General Partnership) has issued a standard unqualified audit
report for the Company.
IV. Yao Liangsong, the person in charge of the Company, Yao Liangsong, the person in charge of accounting, and
Wang Huan, the person in charge of accounting institutions (Accounting Supervisor), declare that the
financial report in the annual report is true, accurate and complete.
V. Profit distribution plan or provident fund conversion into share capital plan approved by the board of directors
during the reporting period
The Company intends to distribute a total cash dividend of CNY 1.075 billion (tax inclusive) to all shareholders
based on the total share capital on the registration date of equity distribution less the number of shares in the Company's
share repurchase account, accounting for 40% of the net profit attributable to shareholders of the parent company in 2022.
If the total share capital of the Company changes before the equity registration date for the implementation of equity
distribution, the Company intends to maintain the total profit distribution unchanged and adjust the profit distribution
ratio per share accordingly.
VI. Risk statements for forward-looking statements
√ Applicable □ Not applicable
The forward-looking statements such as the company's future plans and development strategies involved in this
report do not constitute the company's substantial commitment to investors, and investors are advised to emphasize
investment risks.
VII. Is there any non-operating occupation of funds by controlling shareholders and other related parties
No
VIII. Is there any violation of the prescribed decision-making procedures to provide guarantees to the outside
world
No
IX. Whether more than half of the directors can not guarantee the authenticity, accuracy and completeness of the
annual report disclosed by the Company
No
X. Major risk warning
For details, see "VI. Discussion and analysis of the Company's future development (IV) possible risks" in "Section
III Management Discussion and Analysis" of this report.
XI. Other
□ Applicable √ Not applicable
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Contents
Section I Definitions ............................................................................................................................................. 4
Section II Company profile and key financial indicators ................................................................................... 4
Section III Management discussion and analysis .................................................................................................. 9
Section IV Corporate governance ........................................................................................................................ 45
Section V Environmental and social responsibility........................................................................................... 64
Section VI Important matters .............................................................................................................................. 68
Section VII Changes in shares and shareholders ................................................................................................. 96
Section VIII Preferred shares................................................................................................................................ 102
Section IX Bonds ................................................................................................................................................. 102
Section X Financial Reports .............................................................................................................................. 104
1. Accounting statements bearing the signatures and seals of the person in charge of the
Company, the person in charge of accounting work and the person in charge of
accounting institutions.
List of documents for future 2. During the reporting period, the originals of all company documents and
reference announcements publicly disclosed on the information disclosure carrier designated by
the CSRC.
3. The original audit report bearing the seal of the accounting firm and the signature
and seal of the certified public accountant.
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Section I Definitions
I. Definitions
In this report, unless the context otherwise requires, the following words have the following meanings:
Definition of common words
The Company, company, the joint stock
company, Oppein Group, Group, Oppein means Oppein Home Group Inc.
Home, Oppein, Oppein Home Group
Oppein Integration means Guangzhou Oppein Integration Home Co., Ltd.
Oppein Sanitary means Guangzhou Oppein Sanitary Ware Co., Ltd.
Tianjin Oppein means Tianjin Oppein Integration Home Co., Ltd.
Wuxi Oppein means Wuxi (Jiangsu) Oppein Integration Home Co., Ltd.
Qingyuan Oppein means Qingyuan Oppein Integration Home Co., Ltd.
Chengdu Oppein means Chengdu Oppein Smart Home Co., Ltd.
Oppolia means Guangzhou Oppolia Smart Home Co., Ltd.
Ouboni means Guangzhou Ouboni Integration Home Co., Ltd.
Owell means Guangzhou Owell Decoration Material Co., Ltd.
Company Law means Company Law of the People's Republic of China
Securities Law means Securities Law of the People's Republic of China
Articles of Association means Articles of Association of Oppein Home Group Inc.
Rules of Procedure of the Board of Rules of Procedure of the Board of Directors of Oppein Home
means
Directors Group Inc.
Rules of Procedure of the Board of Rules of Procedure of the Board of Supervisors of Oppein
means
Supervisors Home Group Inc.
Rules of Procedure of General Meetings Rules of Procedure of General Meetings of the Shareholders of
means
of Shareholders Oppein Home Group Inc.
Prospectus of Oppein Home Group Inc.
Prospectus means
for Public Offering of Convertible Company Bond
CSRC means China Securities Regulatory Commission
Guotai Junan Securities means Guotai Junan Securities Co., Ltd.
Accountant, Huaxing, Huaxing Certified Huaxing Certified Public Accounts LLP (Special General
means
Public Accounts LLP Partnership)
SSE means Shanghai Stock Exchange
China Securities Depository and Clearing Co., Ltd. Shanghai
CSDC means
Branch
Convertible bonds means Convertible corporation bonds
Current reporting period, current period
means January 1, 2022 to December 31, 2022
and current year
Previous period means January 1, 2021 to December 31, 2021
Section II Company profile and key financial indicators
I. Company information
Chinese name of the Company Oppein Home Group Inc.
Chinese abbreviation of the Company Oppein Home
English name of the Company Oppein Home Group Inc.
English abbreviation of the Company OPPEIN
Legal representative of the Company Yao Liangsong
II. Contacts and contact information
Secretary of the board Securities representative
Name Ou Yingying Ou Yingying
Contact address No. 366 Guanghua Third Road, Baiyun No. 366 Guanghua Third Road,
District, Guangzhou Baiyun District, Guangzhou
Tel. 020-36733399 020-36733399
Fax 020-36733645 020-36733645
E-mail oppeinir@oppein.com oppeinir@oppein.com
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III. Basic information
Registered address of the Company No. 366 Guanghua Third Road, Baiyun District, Guangzhou
Historical changes in the registered address of None
the Company
Office address of the Company No. 366 Guanghua Third Road, Baiyun District, Guangzhou
Postal code of office address of the Company 510450
Company website www.oppein.com
E-mail oppeinir@oppein.com
IV. Disclosure and storage location
Media name and website of where the Company China Securities Journal, Shanghai Securities News,
discloses its annual report Securities Times and Securities Daily
Website of the stock exchange where the Company
www.sse.com.cn
discloses its annual report
Storage location of the Company's annual report Office of Securities Affairs Department of the Company
V. Company stock profile
Company stock profile
Stock listing Stock abbreviation
Stock class Stock abbreviation Stock code
exchange before change
Shanghai Stock
A shares Oppein Home 603833 N/A
Exchange
VI. Other relevant information
Huaxing Certified Public Accounts LLP (Special
Name
General Partnership)
Accounting firm hired by the F/7-9, Tower B, Zhongshan Tower, No. 152 Hudong
Office address
Company (domestic) Road, Gulou District, Fuzhou City, Fujian Province
Name of signatory
Feng Jun, Fu Peng
accountant
Name Guotai Junan Securities Co., Ltd.
F/43, New World Center, No. 6009 Yitian Road,
Office address
Futian District, Shenzhen
Sponsor performing continuous
Name of sponsor
supervision duties during the
representative Xia Qi, Li Ning
reporting period
signing
Period of continuous
September 1, 2022 to December 31, 2023
supervision
VII. Main accounting data and financial indicators in the past three years
(I) Key accounting data
Unit: CNY
Increase
or
decrease
in the
current
Key accounting data 2022 2021 period 2020
over the
same
period last
year
(%)
Operating income 22,479,503,474.56 20,441,604,591.50 9.97 14,739,690,238.09
Net profit attributable to
shareholders of listed 2,688,425,483.50 2,665,588,441.38 0.86 2,062,629,441.88
companies
Net profit attributable to 2,592,339,337.77 2,510,354,529.21 3.27 1,935,193,531.48
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shareholders of listed
companies after
deducting non-recurring
profits and losses
Net cash flows from
2,409,760,167.55 4,045,966,670.39 -40.44 3,889,455,693.03
operating activities
Increase
or
decrease
at the end
of the
At the end of 2022 At the end of 2021 period At the end of 2020
over the
end of the
same
period last
year (%)
Net asset attributable to
shareholders of listed 16,508,147,251.70 14,408,790,729.40 14.57 11,925,427,990.33
companies
Total assets 28,611,007,188.61 23,392,733,365.23 22.31 18,843,631,132.18
(II) Key financial indicators
Increase or
decrease in the
current period
Key financial indicators 2022 2021 2020
over the same
period last year
(%)
Basic earnings per share (CNY/share) 4.41 4.40 0.23 3.47
Diluted earnings per share (CNY/share) 4.38 4.40 -0.45 3.47
Basic earnings per share after deducting
non-recurring profits and losses 4.26 4.14 2.90 3.26
(CNY/share)
Weighted average return on net assets Decrease by
17.37 20.14 19.26
(%) 2.77%
Weighted average after deducting non-
Decrease by
recurring profits and losses 16.75 18.97 18.07
2.22%
Return on equity (%)
Description of main accounting data and financial indicators of the Company in the first three years at the end of the
reporting period
□ Applicable √ Not applicable
VIII. Differences in accounting data under domestic and foreign accounting standards
(I) The difference between net profit and net assets attributable to shareholders of listed companies in financial
reports disclosed in accordance with International Accounting Standards and Chinese Accounting Standards
□ Applicable √ Not applicable
(II) The difference between net profit and net assets attributable to shareholders of listed companies in financial
reports disclosed in accordance with Overseas Accounting standards and Chinese Accounting Standards
□ Applicable √ Not applicable
(III) Explanation of differences between domestic and foreign accounting standards:
□ Applicable √ Not applicable
IX. Main financial data by quarter in 2022
Unit: CNY
First quarter Second quarter Third quarter Fourth quarter
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(January-March) (April-June) (July-September) (October-December)
Operating income 4,144,232,594.92 5,549,128,458.83 6,575,349,522.57 6,210,792,898.24
Net profit attributable
to shareholders of 253,132,676.23 765,145,238.65 972,190,528.01 697,957,040.61
listed companies
Net profit attributable
to shareholders of
listed companies after
233,509,316.79 747,526,059.30 939,524,185.96 671,779,775.72
deducting non-
recurring profits and
losses
Net cash flows from
-323,902,855.05 1,266,097,134.70 1,021,443,443.69 446,122,444.21
operating activities
Explanation of differences between quarterly data and disclosed periodic report data
□ Applicable √ Not applicable
X. Items and amounts of non-recurring profits and losses
√ Applicable □ Not applicable
Unit: CNY
Notes (if
Non-recurring profits and losses Amount in 2022 Amount in 2021 Amount in 2020
applicable)
Profits and losses on disposal of non-
-267,179.73 / -6,782,217.94 87,230.83
current assets
Ultra vires examination and approval, or
no formal approval documents, or
/
occasional tax return, reduction and
exemption
Government subsidies included in the
current profits and losses, except those
closely related to the normal business of
the Company, which are in line with 106,255,630.20 / 85,902,420.45 79,335,865.73
national policies and regulations and
continue to be enjoyed in accordance
with certain standards or quotas
Capital occupancy fees charged to non-
financial enterprises included in current /
profits and losses
The investment cost of subsidiaries,
associates and associated enterprise
obtained by the enterprise is less than the
/
income from the fair value of the
identifiable net assets of the investee at
the time of obtaining the investment
Profits and losses on non-monetary asset
/
exchange
Profits and losses from entrusting others
/
to invest or manage assets
Provision for impairment of assets due
to force majeure, such as natural /
disasters
Profits and losses on debt restructuring /
Enterprise restructuring costs, such as
expenses for resettling employees and /
integration costs
Profits and losses exceeding fair value
arising from transactions with /
significantly unfair transaction prices
Current net profits and losses of /
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subsidiaries arising from business
merger under the same control from the
beginning of the period to the merger
date
Profits and losses arising from
contingencies unrelated to the normal /
business operation of the Company
In addition to the effective hedging
business related to the normal business
of the Company, the profits and losses
from changes in fair value arising from
the holding of trading financial assets,
derivative financial assets, trading
financial liabilities and derivative -15,064,653.29 / 77,026,005.71 61,144,309.96
financial liabilities, as well as the
investment income from the disposal of
trading financial assets, derivative
financial assets, trading financial
liabilities, derivative financial liabilities
and other creditor's rights investments
Reversal of provision for impairment of
receivables and contract assets subject /
to independent impairment test
Profits and losses from entrusted loans /
Profits and losses arising from changes
in the fair value of investment real
/
estate measured subsequently using the
fair value model
The impact of one-time adjustment of
current profits and losses on current
profits and losses according to the /
requirements of tax, accounting and
other laws and regulations
Custody fee income from entrusted
/
operation
Other non-operating income and
11,468,590.83 / 14,929,914.65 5,345,460.23
expenses other than the above items
Other profit and loss items that meet the
definition of non-recurring profits and 19,781,431.38 / 5,339,654.99 7,190,026.21
losses
Less: income tax impact 26,077,389.56 / 21,181,865.70 25,666,982.56
Minority shareholders' equity impact
10,284.10 /
(after tax)
Total 96,086,145.73 / 155,233,912.16 127,435,910.40
The reasons shall be explained for the non-recurring profits and losses defined by the Company in accordance with the
definition of Explanatory Announcement on Information Disclosure of Companies Offering Securities to the Public No.1
- Non-recurring Profits and Losses, and the non-recurring profits and losses listed in Explanatory Announcement on
Information Disclosure of Companies Offering Securities to the Public No.1 - Non-recurring Profits and Losses as
recurring profits and losses.
□ Applicable √ Not applicable
XI. Items measured at fair value
√ Applicable □ Not applicable
Unit: CNY
Amount of impact
Item Beginning balance Ending balance Current changes
on current profits
Trading financial
1,677,354,882.08 803,050,958.90 -874,303,923.18 11,627,612.42
assets
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Investment in
other equity 310,310,218.60 369,234,888.05 58,924,669.45 6,251,775.00
instruments
Other non-
current financial 60,339,938.23 18,968,837.07 -41,371,101.16 -36,815,234.41
assets
Total 2,048,005,038.91 1,191,254,684.02 -856,750,354.89 -18,935,846.99
XII. Other
□ Applicable √ Not applicable
Section III Management discussion and analysis
I. Business discussion and analysis
2022 was an extremely difficult year. During the reporting period, the downward pressure on the national real estate
market was unprecedented. Although the central and local governments continued to release positive signals to stabilize
the real estate market, favorable policies were introduced, and the housing credit environment was continuously optimized,
the policy effect was not yet appeared in the short term; faced with the interweaving impact of multiple external
unexpected adverse factors such as the continuous downturn of the real estate industry and the slowdown of economic
growth, the expectations and sentiment of home buyers were constantly suppressed; consumer online shopping habits had
been strengthened in the past three years, a new home appliances and services retail format of attracting clients online,
experiencing the product and placing the order offline is forming accelerately.
Faced with the business environment of real estate development risk spillover and in-depth adjustment, intensified
competition in the home industry, fluctuations in raw material supply, economic downturn and diversification of home
channels, Oppein still shows strong combat effectiveness, and strives for steady progress through the effective
implementation of large home furnishing business model innovation, intelligent manufacturing and organizational
structure optimization throughout the year. During the reporting period, the Company realized business income of CNY
22.480 billion, an increase of 9.97% over the same period last year, and realized net profit of CNY 2.688 billion, an
increase of 0.86% over the same period last year.
(I) During the reporting period, the marketing system was not afraid of the storm, guarding the existing
market, grabbing new market share and increasing average client purchase value, and made every effort to break
the ice under the background of the overall cold of real estate. The Company's operating income achieved a rare
year-on-year nearly double-digit positive growth
1. The leading position of the whole house marketing business (wardrobe) industry is more prominent and
stable, which is the main engine driving the growth of the Company's operating income in the current period:
First, the breakthrough upgrading of net aldehyde 3.0, realizing the transformation from net aldehyde in the whole
wardrobe to net aldehyde in space (wardrobe door wall integration), building a more environmentally friendly living
space, and starting a wave of health and environmental protection upgrading; second, creatively putting forward the 2.0
strategy of whole home customization, customizing the overall solutions of the six spaces of the whole house for users,
and leading the industry to upgrade from whole house customization to the era of whole house customization; third,
sensitively capturing the market consumption trend, providing consumers with more diversified product package upgrade
series, and breaking through the whole single value ceiling; fourth, constantly exploring the innovation of integrated
marketing model, and continuously carrying out online and offline linkage sales activities throughout the year to drive
terminal sales; fifth, multi-dimensional development of new channels and new models, bag check/home decoration/whole
house decoration/new retail/online cloud stores etc., enabling terminals to broaden the traffic acquisition entrance.
2. Kitchen marketing business fought with challenges, and achieved the annual internal management
objectives in a hard way:
First, the channel layout is multipronged to enhance market share, including 440+ new decoration stores in retail
channels, 4,000+ cooperative decoration enterprises in retail system, 170+ new stores in integrated kitchen business model,
and 100+ cities with supermarket large home furnishing; second, deeply cultivate the field of cabinet specialization,
develop space solutions for like living room and dining room, transform old kitchens, and deepen kitchen supply chain
cooperation; third, promote the process of large home furnishing, integrate kitchen and bathroom marketing and pan large
home furnishing business, and create the second growth curve; fourth, create products that meet the needs of consumers,
such as "Healthy Kitchen 3.0" and "Oppein Changeable Western Kitchen", to lead the high-quality development of
people's living standards.
3. The whole house decoration & furnishing business is flying, and the annual performance is growing rapidly:
First, driven by the dual brands of Oppein and Baunis, it dances with the head decoration enterprises, consolidates
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the Company's leading position in the whole decoration track, and opens up a new blue ocean of growth; second, we will
continue to promote the innovation of V8 operation system and "operation 1+8" system, comprehensively help decoration
enterprises innovate traffic acquisition methods, model tactics and operation capabilities, enable decoration enterprises to
reduce costs and increase efficiency, and enhance market competitiveness; third, we will continue to promote the core of
Oppein/Baunis whole house decoration & furnishing customization products + supply chain product integration + two
leading enterprises alliance product upgrading, meet the needs of users for "decorating a home", and build a moat of
supporting capabilities for decoration enterprises; fourth, we will create, share, achieve win-win and co-evolute with
decoration enterprises, steadily promote the strategies of "strong business", "supporting new business" and "fine
investment" throughout the year, and constantly consolidate and expand the Company's leading advantages in the field of
whole decoration.
4. For bulk business, we will strictly control risks, be calm and down-to-earth, and good at balance to ensure
that the Company's overall revenue achieves quality growth:
First, we will give full play to the advantages of multi-category R&D and large home furnishing supporting,
cooperate with high-quality strategic customers to upgrade from products to content, and actively promote the whole case
hardcover loading business; second, we will give full play to the advantages of large-scale non-standard manufacturing,
constantly broaden the width of product application scenarios, and extend from traditional hardcover housing to various
public construction projects such as schools, hospitals and industrial parks; third, we will continue to cultivate new bulk
projects such as talent housing, affordable housing and the transformation of old residential areas.
5. Oppolia's business closely follows the market trend, continues to give full play to its natural ability to
integrate categories into large home furnishing, and grows healthily:
First, through live broadcasting, design of master IP live broadcasting activities, variety, high-quality KOL&KOC
recommendation matrix and so on, we can raise the strength of brand in an all-round way and continuously enhance the
brand's strength; second, we will actively lay out localization empowerment, and firefly plan and pilot plan to effectively
empower dealers to enhance their online customer acquisition and transformation capabilities; third, the e-commerce
channel is strongly enabled to distribute orders for terminals 300,000+ times, boosting the continuous improvement of
performance; fourth, we will continue to strengthen the design ability of the whole case, and the newly developed products
won many awards such as the 2022 Italian A'Design Award; fifth, during the reporting period, Oppolia opened 1,000
stores for the first time, reaching 1,054, and comprehensively optimized the layout and display, followed the trend of
whole decoration, developed projects such as bag check, 1,000 residential buildings and 100 orders, as well as 10 million
output value projects frequently, helping the steady growth of performance.
6. Ouboni leads the industry trend of door, wall and cabinet integration and achieves steady growth in
performance:
First, deepen the professional strength of products, first promote formaldehyde free wooden doors, set off the
environmental protection upgrading of doors and walls, continue to consolidate the six core functions of noise prevention,
fire prevention, moisture prevention, theft prevention and intelligence, and build a professional moat; second, expand the
category map horizontally, and complete the brand leap with "door and wall customization, overall home furnishing, new
luxury entry door"; third, marketing efforts, complete a number of Star Tour Live Broadcast and top anchor live
broadcasting with goods annually, establish TikTok self-broadcast system, to achieve online and offline reputation and
order performance transformation; fourth, continue to optimize the product structure, develop and produce wood wall
products suitable for the strategic layout of the Company's large home furnishing, help the business expansion of bulk
and integrated home decoration channels, continuously improve production efficiency, and achieve high-quality growth
of performance.
7. Oppein retail large home furnishing business sets sail against the trend and embarks on a new journey:
First, the Company's Large Home Furnishing Marketing Department has led the retail system to climb the new peak
of large home furnishing by transforming the whole decoration track through innovative store formats, standard displays,
sales model building and other enabling retail systems. By the end of 2022, Oppein retail system had started the
construction of 102 large home furnishing stores; second, the Company innovatively puts forward the "decoration
housekeeper" model, with the theme of "solving decoration pain points for end consumers and eliminating decoration
phobia", implementing policies according to the city and cooperating with manufacturers to build an "independent third-
party" platform supervision system with Oppein as the core. During the reporting period, the average net recommendation
value of large home furnishing store customers exceeded 9 points (out of 10 points); third, the original P9 decoration sales
system will gradually standardize the highly non-standard "home decoration design" and "construction organization", so
that retail dealers who "do not understand, do not want and do not dare to engage in decoration" can easily enter the whole
decoration.
(II) During the reporting period, the manufacturing system improved production efficiency and effectively
controlled the total cost through the effective implementation of organizational streamlining, lean improvement,
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intelligent manufacturing, large home furnishing and information strategy, met the increasingly stringent needs
of customers for quality, price and delivery time, and provided a strong guarantee for the realization of the
Company's performance objectives
1. Comprehensively build precise delivery of orders and professional enabling terminals:
First, the promotion of direct delivery model has achieved remarkable results, greatly alleviating the shortage of base
resources and reducing operating costs, where: the direct delivery rate of integrated retail multi category (full set) is close
to 50%, the on-time rate is nearly 98%, the project direct delivery rate is more than 96%, and the on-time rate is more
than 93%; second, the deepening of dry warehouse distribution model and the promotion and application of TIMS have
achieved new phased results: The national network service capacity has exceeded 50%; TIMS system has completed the
full coverage of dry warehouse distribution business; third, the market-oriented service model and engineering gold nanny
service have been unanimously praised by dealers.
2. R&D and design lead the industry leading level:
First, the Company won 9 domestic and foreign design awards, such as "Guangzhou High-level Enterprise Research
Institute" and Muse Design Gold Award in the United States, A'desig in Italy and IF in Germany; second, the Company
has successfully completed the research and development of 600+ new products in 2023, while reducing the R&D cycle
of new products; third, the Company establishes a new track for door, wall and cabinet integration, builds standards,
builds systems, and helps new products take off; fourth, the product system has been upgraded in an all-round way, greatly
integrated and streamlined, and the proportion of product series and material color reduction exceeds double digits.
3. Significant improvement effect of manufacturing management:
First, new breakthroughs have been made in the standardization of the whole single level and cabinet level of kitchen
cabinets, which greatly improves the cost and shortens the delivery time; second, the wardrobe has been upgraded to the
whole cabinet net aldehyde and space net aldehyde, comprehensively promoting product standardization, greatly
shortening the launch cycle of new products, and the project of door, wall and cabinet integration has achieved remarkable
results to achieve the full integration of wardrobe and wood door; third, the level of door panel powder spraying and UV
manufacturing has been continuously improved, and new technologies such as laser engraving, "industrialization" and
"flexible" printing have been developed and mass-produced; fourth, the operation improvement of major bases has
achieved remarkable results.
4. Continue to promote automation and intelligent upgrading and transformation, improve efficiency and
reduce costs:
First, the wardrobe has completed the automation improvement of robot electronic cutting saw, edge sealing wiring,
automatic loading and unloading wiring of row drill, automatic sorting and packaging line of cabinet body, and back plate
suit cut, so as to further promote the specialized production model of cabinet body, door plate and back plate; second,
kitchen cabinets and bathrooms have completed the promotion, upgrading and transformation of the automation of edge
sealing and drilling lines, and kitchen appliances have achieved the industry's first laser automatic welding, grinding free
and single piece continuous production process; third, the rhythm of wood door paint free automation production line has
been improved by double digits, some base paint free 3.0 automation workshops have been put into operation, and the
automation level of door and wall production has been significantly improved; fourth, in terms of door panels, blister
upgrades one-driven-three processing centers, spray glue connection automation process, spray powder investment in the
flexible processing technology of double powder rooms in the accumulation chain, solving the industry problems of color
change difficulties.
5. Fruitful achievements in information construction:
First, achieve the opening of design and production of the whole category, helping to promote the implementation
of large home furnishing strategy; second, the efficiency of order circulation has been greatly improved, with the first
pass rate of design exceeding 95% and the exemption rate exceeding 85%; third, the background service is pre-positioned
to vigorously improve the design quality and break through the bottleneck of terminal empowerment; fourth, fully realize
the delivery of orders in the whole chain and online collaboration of capital settlement; fifth, new breakthroughs have
been made in the benchmarking of PLM/MRP/MPCS projects, large versions of the basic framework of core systems
such as BPM/MSCS have been upgraded, and 100 billion scale information infrastructure support capacity building has
been planned.
6. Won the 7th Guangdong Provincial Government Quality Award
The Company has been consumer centered to improve products and services, build an integrated quality assurance
system, make breakthroughs in self-developed informatization, patent application and localization of testing technology,
lead environmental protection upgrading, compile industry standards, upgrade supply chains, and promote the quality
improvement of customized product chains. During the reporting period, the review expert group of "Guangdong
Provincial Government Quality Award" evaluated and discussed the Company in multiple dimensions through listening
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to reports, consulting materials, on-site visits and on-site communication. With its outstanding performance in leadership,
quality, innovation, brand and efficiency, the Company stands out among many manufacturing enterprises and won the
7th Guangdong Provincial Government Quality Award, the highest honor in the provincial quality system.
(III) During the reporting period, the Company's functional system has always maintained a sense of vigilance
and worry, facing difficulties, firmly believing in moving forward, self-reflection, reform and innovation, and did
not hesitate to seek all opportunities for development
All departments of the functional system perform their respective duties and become a strong guarantee, support,
energy storage and transmission base for the marketing and manufacturing system. First, optimize the total remuneration
and compilation control rules, refine dynamic control, and effectively balance the relationship between human cost and
personnel growth rate; second, establish a multi-dimensional and multi-perspective financial operation analysis system to
help business reduce costs and save consumption, continue to build intelligent and automated financial management, and
promote 20+ information projects as a whole; third, in extreme environments, ensure the supply of raw materials by
multiple means, implement procurement cost control by multiple measures, and establish and optimize a number of key
procurement systems and processes; fourth, innovate and establish a system process integration management model that
fits the reality of Oppein, complete a comprehensive sorting of business process architecture, and clarify 200+ cross
business domain process interfaces; fifth, strengthen institutional governance, legal management and regulatory
verification functions, firmly abide by the bottom line of compliance, and strive to create a compliance culture with
Oppein characteristics; sixth, improve and upgrade service software and hardware, introduce a number of innovative
service projects, and provide high-quality service guarantee for 20,000+ employees of the Company.
II. Industry situation of the Company during the reporting period
(I) Basic situation of the industry
1. According to the Industrial Classification for National Economic Activities (GB/T4754-2017) issued by the
National Bureau of Statistics in 2019, the Company is engaged in wood furniture manufacturing industry (C211) in
furniture manufacturing industry (C21).
2. Affected by the pressure of economic growth, real estate sales and other factors, from January to December 2022,
the total retail sales of furniture in China was CNY 163.5 billion, down 7.5% year-on-year, and the year-on-year growth
rate of various categories of commodity retail temporarily ranked last. Meanwhile, the annual operating income of
furniture manufacturing enterprises above designated size in 2022 was CNY 762.41 billion, down 8.1% year-on-year
from 2021. With the transition of the furniture industry from a period of rapid development to a period of mature
development, the overall growth rate of the industry has slowed down. Affected by the "three red lines" control of the
early real estate financing policy, the new development investment of real estate on the supply side shows a downward
trend. In 2022, the national real estate development investment was CNY 13,289.5 billion, down 10.0% from the same
period last year; Among them, residential investment was CNY 10,064.6 billion, down 9.5% year-on-year; the completed
residential area was 625.39 million m2, down 14.3% year-on-year. The real estate development boom index dropped from
100.28 in December 2021 to 94.35 in December 2022, showing a rapid decline in the early stage and a slow decline in
the later stage. Affected by the slowdown in the growth of a number of real estate data, furniture companies have
contracted and controlled their engineering business layout.
Figure: Real Estate Development Boom Index
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February
May
July
January 2022
March
December 2021
September
October
November
December
April
June
August
Source: National Bureau of Statistics
Customized home furnishing industry is moving from single category sales to multi-category integration. Non-
standard customized wood furniture products, standardized building materials products and personalized soft decoration
products penetrate each other, and the category melee has escalated again. With the youth of the main group of home
decoration consumption and the frequent demand for decoration, it further promotes the transformation from simple
product integration to more complex decoration service integration. Products and services are no longer a separate link in
the whole chain of home decoration services, cross-border integration has become an industry trend, and the single value
of customers and the flat efficiency of single stores have been improved to a certain extent. The category boundary of
customized furniture industry is further blurred, showing category diversification and channel diversification, and the
industry competition pattern is constantly changing and updating.
3. Online and offline integrated sales model has become a trend. From the perspective of BHI national building
materials home terminal store prosperity index, affected by multiple factors such as economic downturn, real estate
downturn and purchasing power decline, BHI showed a trend of "stability previously and decline later" in 2022.
Customized home enterprises enhance the popularity of terminal stores through new retail formats of online promotion
and traffic acquisition, offline experience and turnover of customer stores.
(II) Industry characteristics
1. Cyclical and seasonal
Customized furniture is optional consumer goods and is part of the home building material market. From the perspective
of cyclical characteristics, the industry is affected by macroeconomic growth, industry policies, real estate related policies
and investment and financing, changes in consumer ideas, intergenerational changes in the main consumption force, and
life cycle differences in various categories of customized furniture. The growth rate of furniture retail sales is closely
related to the growth of completed housing area, which has a strong periodicity.
Figure: Relationship between the Year-On-Year Growth of Furniture Retail Sales and the Year-On-Year
Growth of Completed House Construction Area
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China: retail sales: furniture: China: completed housing area:
cumulative year-on-year (%) cumulative year-on-year (%)
Source: WIND
From the perspective of seasonal characteristics, affected by the traditional Spring Festival, the climate differences
between South and North China and the differences in living habits, the decoration has certain seasonal characteristics,
which will lead to the delay of installation and delivery and the delayed release of purchase demand at a specific time and
environment, so there are also some seasonal fluctuations at the performance level.
2. Low industry concentration
The market pattern of customized furniture industry as a whole is relatively dispersed. According to the estimates of
securities firms and industry data, by the end of 2021, CR8 (caliber of listed companies) was 10.73%. Although the market
share of leading enterprises is gradually increasing, it is still relatively low compared with mature industries such as home
appliances, the regional decentralization of dealers, the large number of market participants, the low threshold of industry
entry and exit, the passenger flow dispersion continue to intensify, and the industry concentration needs to be further
improved. In the future, with the promotion of the whole decoration business and the concentration of dispersed passenger
flow, it is expected to further increase the market share of leading enterprises.
3. Blurring of industry boundaries
In recent years, the industry has shown a trend of multi-category and multi-brand integrated sales, and has gradually
become the mainstream and consensus of the industry. In the traditional furniture stores with customized furniture
enterprise layout, customization, soft decoration, electrical appliances and other categories fully meet the one-stop
shopping demand of consumers through package integration, supporting product sales and other forms. In terms of multi-
brand, it is mainly divided into two forms: cultivation within the system and integration outside the system. In terms of
cultivation within the system, it expands the second and third brands by expanding the target consumer groups, extending
the price band and building a new brand image, so as to achieve the expansion and layout of new growth points; in terms
of integration outside the system, multi-brand layout is realized through brand strategic alliance or brand integration.
Meanwhile, through the change of channel model, it can achieve in-depth cooperation with home decoration and
decoration companies, pre-position the marketing and customer acquisition process, and provide customers with one-stop
whole process services covering home decoration, building materials, furniture, soft decoration, electrical appliances and
so on. Customized furniture industry companies are no longer limited to selling a single whole house customized cabinet,
soft decoration and other categories, but to expand the direction of integrated sales of decoration services and products.
(III) Industry position of the Company
The Company is a leading one-stop high-quality home integrated service provider in China. Its operating income
and net profit scale are in the leading position in the same industry. It leads the industry in an all-round way in terms of
forward-looking strategic layout. It is a pioneer in the expansion of new models and the excavation of new channels in
the industry. It dares to be the first among the multiple changes and uncertainties in the industry and firmly moves forward
to the direction of large home furnishing. In terms of categories, by the end of 2022, the Company's cabinet and wardrobe
revenue scale ranked first in the industry. The growth rate of the Company's operating income is not limited to the driving
force of the new real estate cycle, but more reflected in the promotion and development of its own strategic cycle through
channel expansion (cooperation with whole decoration companies) sales, multi-brand cooperation and cross category
sales. The brand influence of "Oppein" has been continuously strengthened among various categories, and the competitive
advantage has been continuously highlighted.
Figure: Relationship between the Growth Rate of the Company's Operating Income and the Growth Rate of
Completed House Construction Area and Sales Area
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Growth rate of
Growth rate of Oppein Growth rate of sales area (%)
completed area (%)
home revenue (%)
Source: the Company's periodic report data and WIND
(IV) The newly announced laws, administrative regulations, departmental rules and industry policies have a
significant impact on the industry
1. China continues to promote high-quality quantification, production and manufacturing informatization
and industrial cluster of home industry products. In April 2022, the General Office of the State Council issued the
Opinions on Further Releasing Consumption Potential and Promoting Sustainable Recovery of Consumption to cultivate
and strengthen new consumption formats such as "Internet+home decoration"; vigorously develop green home decoration,
and encourage consumers to replace or buy new green energy-saving home appliances, environmental protection furniture
and other household products. In August 2022, the Ministry of Industry and Information Technology, the Ministry of
Housing and Urban-Rural Development, the Ministry of Commerce and the State Administration for Market Regulation
jointly issued the Action Plan to Promote High-quality Development of Home Furnishing Industry (hereinafter referred
to as the Action Plan). The Action Plan proposes that by 2025, the innovation ability of the home industry will be
significantly enhanced, the supply of high-quality products will be significantly increased, and a higher level virtuous
circle of supply creating demand and demand pulling supply will be initially formed. Innovative platforms such as
manufacturing innovation center and digital transformation promotion center will be cultivated in household appliances,
lighting appliances and other industries, the integration level of key industries will reach 65%, and a number of 5G fully
connected factories, intelligent manufacturing demonstration factories and excellent application scenarios will be
cultivated. The proportion of personalized customization such as reverse customization, whole house customization and
scenario integrated customization has steadily increased, the supply of green, intelligent and health products has increased
significantly, and new formats such as smart home have accelerated their development. About 50 well-known brands and
10 home ecological brands will be cultivated in the home industry, a number of excellent products will be promoted, 500
smart home experience centers will be established, and 15 high-level characteristic industrial clusters will be cultivated,
so as to promote the quality consumption of home brands with high-quality supply.
2. In order to promote the steady and healthy development of the real estate market, under the premise of
unchanged positioning of "no speculation in housing", China continued to introduce a number of policies on the
implementation of guaranteed delivery, financing needs of high-quality credit real estate enterprises, and rigid
and improved housing needs in 2022.
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(1) "Guarantee the delivery of buildings" was written into the meeting documents of the Political Bureau of
the Central Committee of the CPC for the first time. In July 2022, the meeting of the Political Bureau of the Central
Committee of the CPC stressed the need to "consolidate the responsibilities of local governments, guarantee the delivery
of buildings and stabilize people's livelihood". Since August, Shijiazhuang, Zhengzhou and other places have introduced
relevant measures to "guarantee the delivery of buildings", including "one-on-one assistance", the establishment of bail-
out funds, the acquisition of unsalable housing as resettlement housing and so on.
(2) The financing policy of real estate enterprises continued to relax, the "16 financial articles" were
introduced, and real estate welcomed the strongest policy support in 2022. Taking November 2022 as a watershed,
the regulatory attitude towards the financing of real estate enterprises was fundamentally shifted, and the direction of
relief changed from "saving projects" to "saving projects and saving enterprises". First of all, three arrows supporting real
estate enterprises: the "first arrow" credit financing field, the "second arrow" bond issuance, and the "third arrow" equity
financing. Meanwhile the "16 financial articles" were introduced, involving a total of 16 measures, such as real estate
development loans, personal loans, stock financing extension, trust financing, bond financing, special loans for "guarantee
the delivery of buildings", personal credit protection, extension of loan centralization, and housing rental finance.
(3) Real estate has once again become a "pillar industry", boosting industry confidence. In December 2022,
vice premier Liu He pointed out that "real estate is the pillar industry of the national economy. In view of the current
downward risks, we have issued some policies and are considering new measures to improve the assets and liabilities of
the industry and guide market expectations and confidence to recover."
(4) Reduce the interest rates of personal commercial loans and provident fund loans. In terms of commercial
loans, LPR was lowered three times in 2022, the largest number of times since 2019. In January 2022, the one-year LPR
decreased by 10 basis points to 3.70%, and five-year LPR decreased by 5 basis points to 4.60%. In May, the five-year+
LPR was sharply reduced by 15 basis points to 4.45%. In August, the one-year LPR was lowered from 3.70% to 3.65%,
and the five-year LPR was lowered from 4.45% to 4.3%. In September, the People's Bank of China and the China Banking
and Insurance Regulatory Commission made it clear that eligible city governments could independently decide to
maintain, lower or abolish the lower limit of commercial mortgage interest rates for the first set of housing. In terms of
provident fund loans, the People's Bank of China announced its decision to lower the interest rate of the first personal
housing provident fund loan by 0.15% from October 1, 2022.
(5) Some cities have liberalized the purchase restriction policy to varying degrees. In December 2022, Tianjin,
Chengdu, Chongqing and other cities successively issued real estate policies: Dongguan and Foshan fully liberalized
purchase restrictions, Chongqing, Tianjin and other places loosened policies in terms of long rent of their own housing
not included in the number of units, and loosening of the upper limit of housing provident fund loans. Shaoxing proposes
to continue to promote housing demolition and reform and the use of housing purchase tickets, implement the role of bail-
out funds, make every effort to guarantee the delivery of buildings, and extend the application time of some real estate
policies to the end of 2023.
III. Business of the Company during the reporting period
(I) Main business of the Company
Founded in 1994, Oppein Home is a leading one-stop high-quality home integrated service provider in China. The
Company is mainly engaged in personalized design, R&D, production, sales, installation and interior decoration services
of whole house home products. The Company started from customized cabinets and extended from cabinets to whole
house products, covering the overall kitchen, overall wardrobe (whole house customization), overall bathroom,
customized wood door system, metal doors and windows, soft decoration, furniture matching and other overall home
products. The Company is committed to customizing a unique home for each family, so that more families can enjoy
high-quality home life experience.
Integrated cabinets
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Customized wardrobes (whole house customization)
Customized wardrobes (whole house customization)
Oppein large home furnishing
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Ouboni door and wall system
Whole bathroom customization
(II) The Company's main business model
The products operated by the Company mainly adopt the order based production model, and "customization" is the
core of the Company's business model. The staff of the Company's exclusive stores designs corresponding solutions
according to customers' housing space layout and size, personalized preferences, functions and other needs, and renders
renderings through the Company's self-developed information sales system for customers to make consumption decisions;
after the customer confirms the design scheme, the order is directly transmitted to the Company's Production Department
through the information system. The Company organizes production according to the content of the order, and finally
realizes the delivery and installation of customized home products. The Company adopts a vertically integrated business
model, covering raw material procurement, design and development, production and manufacturing, brand building,
product sales and other links, to achieve effective control of the whole industrial chain.
Build Oppein into a world excellent home furnishing enterprise
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Fair and Pursuit of
bright perfection
Technol Product
Talent ogy
Home and Love
Mech Business Continuous
innovation
anism philosoph Service
y Model
Steer Manage
ment
Interlocking hearts brings love to families
Agile Personali Order Full set Worry
Flexibilit Warm
R&D ty Analysis Distributi free
y Installati
Design Quality on
Quality Manufact on After-
Quality Quality sales
ure Quality
Quality Quality
Consumer centered, home building in the spirit of building aircraft
System capability Self-developed informatization Oppein lean six sigma
1. Procurement model
(1) The Company's procurement process and procurement links
The Company has formulated a complete management system and standard system for the procurement process to
realize the unification of internal material specifications and procurement technology and quality standards, so as to form
the basis of large-scale procurement; establish a two-level procurement model between headquarters and bases, improve
the effectiveness of comprehensive supply chain management, strengthen procurement plan management, timely and
effectively supply, and reduce sluggish materials. The products purchased by the Company mainly include plates,
functional hardware and other production raw materials, product accessories, as well as kitchen appliances and other
household supporting products.
From the perspective of purchasing links, the Company's purchasing business can be subdivided into front end
business and back end business. The Supply Chain Management Center and the Procurement Center of the Group are
responsible for the front-end business. The Supply Chain Management Center is responsible for the selection, assessment
and evaluation of suppliers and the management of purchase prices, so as to realize the unification of supply channels for
the same kind of materials in various business sectors. For materials and equipment whose annual consumption reaches
a certain scale, the Company adopts on-site bidding to issue Invitation for Bid to qualified suppliers. Through on-site
bidding, the best is selected from the best, achieving the expected purchase objectives; the Procurement Center is
responsible for classifying and summarizing the consumption of materials in the Group, coordinating the implementation
of centralized purchase in each production base, and giving full play to the scale advantages of purchase. The back end
business of purchase is the execution of specific purchase orders and material acceptance, which is mainly implemented
by the Material Control Department under each product manufacturing line.
(2) Raw material inventory arrangement
In order to strengthen the management of raw materials, ensure the continuous supply of materials, reasonably
control inventory, standardize the warehousing process, and maintain the safety and integrity of assets, the Company has
formulated relevant systems for raw material inventory management.
According to the Company's purchase implementation management measures, the Material Management
Department sets up safety stocks. The person in charge of inventory shall analyze the rationality and effectiveness of the
arrival of materials through data and inventory arrangement. If there is any abnormality, he shall feed back to the Purchase
Department in time to modify the relevant material items, so as to ensure that the inventory of each material is controlled
in the best state that neither production "shutdown for materials" nor material inventory expansion are allowed, and ensure
that the turnover times of stored materials meet the predetermined requirements. Meanwhile, we should strengthen the
management of inventory period, set effective storage period for all kinds of raw materials and materials, distribute
materials in strict accordance with the principle of first in first out, and strictly follow the 5S management and safety
management norms in the warehouse in daily work. In the ex-warehouse management link, each production workshop
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counts the material demand according to the daily production task, and the Inventory Management Department issues the
material after receiving the valid collection certificate.
2. R&D model
Market Trial New
Product Sample Market
research productio Product sample
planning promotion sample
n of new review introducti
samples on
R&D process of Oppein home products
The Company has set up a home product R&D center to coordinate the Company's new product R&D and technology
development management. At the same time, the Company's overall kitchen cabinet, overall wardrobe, overall bathroom,
customized wooden doors, doors and windows and whole decoration large home furnishing and other business sectors
have established product planning and R&D departments.
As the leader of the domestic customized home furnishing industry, the Company's annual R&D expenditure is in
the forefront of the industry, so that the Company's customized home furnishing products can always lead the industry.
The Company attaches great importance to the construction of R&D team, with more than 3,000 R&D personnel, forming
a R&D team with high education and pioneering spirit. Relying on strong R&D capabilities, Oppein Home has built up
the core competitiveness of its own product and process innovation, which can quickly respond to the demand for new
materials downstream and provide new impetus for the Company's sustained growth.
The Company has always adhered to original design. In addition to having a number of high-level design teams
inside, it has set up a R&D and Design Center in Milan, Italy, and actively promoted external exchanges and industry-
university-research cooperation. For example, Columbus, a professor at the University of Milan, Italy, has been hired in
the field of technology to guide the structural problems of furniture technology. In the field of stone, experts in automatic
production and formulation of quartz from South Korea have been hired to carry out automatic line process design and
formula re-sorting, carry out basic research with South China University of Technology on the utilization of quartz waste
residue, reach strategic cooperation alliances with many famous Italian designers in the field of design, and continuously
launch customized home products according to market needs (including overseas markets).
The Company has a CNAS certification laboratory, and in recent years has won the titles of National Industrial
Design Center, Guangdong Provincial Government Quality Award, and Guangzhou High-level Enterprise Research
Institute and so on. Mature product R&D management system and perfect R&D process design make the Company's
R&D level and innovation ability always at the leading level in the customized home industry, and rely on Oppein's
"National Industrial Design Center" to continuously innovate product design and development model, enhance the core
technology of product design, drive Guangdong China customized home design to the world, and create
Guangdong China design business card.
3. Production model
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Full case top-level Product & service dual track promotion
design Product integrationDesign integration Service uniformity
Package solution
Style Spatial Consistent
Whole home planning uniformity integration positioning
Unified brand setting Design trends, pop Hot selling house Image products, main
and planning colors type, lifestyle sales products
Category integration Integration Share and
Multi-category
Kitchen and bathroom Cabinet electricity interconnection
collaborative R&D integration, wardrobe and integration, door wall Material share and process
Integration design and wood door integration cabinet integration interconnection
underlying unification
Home House
Cabinet Furniture
Single category appliances accessories Hard decoration
professional platform Full case design
Category basic process
Customized module Soft decoration
Bathroom and balcony Door and
Functional platform wall
Unlike the production of standard home products, customized home enterprises generally have a series of difficulties
in order processing, high information requirements, huge amount of data and high accuracy of processing requirements
in the production and manufacturing process, resulting in a high threshold for large-scale home customization production.
Meanwhile, with the arrival of the era of digital integration, the division of labor in the industrial chain is more in-depth,
and intelligent manufacturing has become a new development direction of the customized home industry.
In order to conform to the development trend of modern manufacturing industry, break through the bottleneck of
production, focus on the 2025 pattern of Oppein manufacturing, and achieve another breakthrough in information
construction, Oppein fully absorbs the production model of TPS; based on the characteristics of customized home industry,
around the three end-to-end processes of product engineering data flow (from product design to production), production
information flow (from customer demand to production instructions) and production process flow (from incoming
materials to finished product shipment), and taking the self-developed information management system as a link to open
up, it opens up and integrates efficiently. To achieve the opening up of design and digital production and manufacturing,
the integration of the whole business chain information system, the integration of production process, equipment
automation and intellectualization, and maintain the leading advantage of Oppein manufacturing informatization in the
home industry.
4. Sales model
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The Company adopts a compound sales model dominated by dealer exclusive stores, supplemented by bulk business,
direct stores and exports.
(1) Dealer exclusive store sales model
a. Traditional dealer model
The sales model of dealers' exclusive stores is the main sales model in the customized home furnishing industry. It
refers to that manufacturers select and cultivate dealers who recognize their own brand value, strong financial strength,
good market reputation and rich market experience, sign the Cooperation Agreement with them, authorize them to set up
exclusive stores to sell the products produced by enterprises in specific areas, and the dealers bear the operational risks
themselves. In the process of production and operation, the Company timely gives assistance and empowerment to dealer
personnel in terms of training, operation and management. The advantage of the dealer exclusive store model is that
enterprises can make full use of the experience and social resources of dealers, quickly build sales channels and networks,
refine market terminal marketing, and form a marketing strategy highly in line with the local market environment, which
is conducive to the rapid expansion of market share.
b. Whole decoration large home furnishing model
With the continuous development and growth of domestic decoration business, as a more advanced demand flow
entrance, the impact and diversion of demand flow in the traditional retail channels of the furniture industry are becoming
more and more obvious. In order to lay out the whole decoration channel and broaden the source of customers, the
Company took the lead in cultivating the whole decoration channel business in the industry, and began to pilot and
promote the business model of the whole decoration large home furnishing in 2018. At present, the Company's double
brand operation of the whole decoration large home furnishing is "Oppein" and "Baunis" to meet the differentiated needs
of different channel partners and users.
Oppein's whole decoration large home furnishing refers to the Company's direct selection of high-quality home
decoration companies with large scale and good reputation to carry out agency and distribution cooperation, make full
use of the Company's advantages such as high brand awareness, rich customized product categories and supply chain
platform, supplemented by the Company's mature information sales system, quickly introduce the terminals of decoration
enterprises, greatly improve terminal efficiency, shorten the running-in period, and carry out synchronous empowerment
of brand, flow, management and products. In the whole customer service link, the Company is responsible for the
production, manufacturing and marketing support of products, and the home decoration company is responsible for
providing customized home design and installation services and home decoration design landing construction.
The expansion of the whole decoration business is conducive to the Company to expand passenger flow channels
and seize market share in the new market environment. The Company actively implemented measures such as traffic
acquisition and marketing assistance for decoration dealers to speed up the development of decoration channels and the
construction of marketing terminal model. Meanwhile, the Company actively guides traditional retail dealers to carry out
various forms of business cooperation with local home decoration and whole decoration channel companies, promotes
retail and decoration dealers to join hands to activate the consumption of customized home products in the local market,
and strives to complete the sales expansion of the local home market of Oppein and enhance the overall share of Oppein
brand.
(2) Direct-sale store sales model
The sales model of direct-sale stores refers to the business model in which the Company uses its own funds to open
"Oppein", "Oppolia" and "Oubonii" series brand exclusive stores in large-scale stores, shopping centers and street
storefronts to sell the Company's products (including Oppein cabinets, Oppein wardrobes, Oubonii bathroom, Oubonii
whole house, Oppolia whole house customization, etc.). At present, the Company has opened direct-sale stores in some
areas of Guangzhou and Dongguan, Guangdong Province.
(3) Bulk business sales model
In this business, the Company signs product supply and installation contracts with real estate developers or
engineering contractors. The Company is responsible for the production of goods involved in the contract, and the
engineering service provider is the actual operator of project performance, responsible for the design, transportation,
installation and after-sales of related products. The Company signs agreements with engineering service providers, and
supervises engineering service providers to implement projects according to the contract and deliver products according
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to the Company's quality standards.
(4) Export sales model
Product exports mainly include foreign bulk business sales and foreign retail sales. Foreign bulk business sales refer
to the Company's independent participation in project negotiation, contract conclusion and performance; foreign retail
sales refer to the Company's whole home products sold through retail channels or by choosing foreign dealers.
5. Brand building model
The Company attaches great importance to the construction of series brands of Oppein Home, which is mainly
conducted through several aspects:
(1) Brand planning. Based on the research of enterprises, brands, industries and consumers, the Company's brand
building is elevated to the height of enterprise business strategy, and the medium and long-term development strategy of
enterprise brand is put forward to guide the specific brand marketing tactics in the future. Deeply tap the core value system
of the brand, take it as the center, establish a strong brand identification system, and bring strong associations to consumers.
(2) Brand publicity. In order to standardize the Company's brand publicity, improve brand management, promote
brand development, effectively protect the brand and maximize brand value, the Company has formulated a detailed brand
management system, implemented various public welfare brand publicity advertisements, hard advertisements and soft
news publicity in various media channels, and actively participated in various public welfare sponsorship activities, and
has organized various celebrations, press conferences, promotion and exhibition activities.
(3) Channel layout and promotion. It fully implements the "10+1" terminal business model, displays the overall
image of the Company through a wide range of distribution stores, unified and tidy design and decoration and well-trained
professionals, and improve the popularity and reputation of "Oppein", "Oppolia", "Ouboni", "Baunis" and "miform" series
brands. The Company has a complete assessment, supervision and early warning mechanism for the operating results and
service quality of dealers to maximize the protection of the interests of end consumers and maintain the reputation of
Oppein brand. The Company's dealer management level has always been ahead of the same industry.
6. Sales logistics and warehousing model
In order to standardize the internal and external logistics processes of various products of the Company, the Company
has formulated relevant systems covering warehousing, shipping, trunk line and distribution management, and set up
logistics centers under the manufacturing system to be responsible for the logistics management of the whole link of the
Group's products. Meanwhile, in view of the lack of in-transportation management in the industry, the high transportation
damage caused by multiple trans-shipments and the problem of wrong and missing goods, the Company actively explores
a new logistics business model for customized home products by means of informatization.
IV. Analysis of core competitiveness during the reporting period
√ Applicable □ Not applicable
(I) Strong brand influence
Since its establishment 29 years ago, Oppein has always regarded consumer satisfaction as the essence of enterprise
survival and adhered to consumer centered improvement of products and services. "Oppein" brand has occupied brand
awareness and influence in the hearts of consumers, and is gradually transforming into reputation and trust. The
advertising language of "home, love and Oppein" has been deeply rooted in the hearts of the people. From 2016 to 2022,
Oppein was selected into the list of China's Top 500 Brand Value Enterprises for seven consecutive years by virtue of its
strong brand strength. In 2023, the Company was listed on the list of China's Top 500 Most Valuable Brands in 2022 with
a brand value of CNY 57.806 billion, and the brand value increased year by year. In addition, the Company has been
selected as one of Chinese Manufacturing 500 Strong and the Top 500 Private Enterprises in Hurun China for four
consecutive years, and as one of the Top 500 Private Manufacturing Enterprises in China for six consecutive years.
(II) Strong terminal sales system
After years of channel investment and construction, the Company has established the largest marketing service
network in the home industry, which cooperates closely with the Group, grows together and spreads all over the country,
and has the most powerful dealer (service provider) resources in the industry, with 7,000+ distribution stores. In terms of
terminal management, since its establishment, the Company has adhered to the concept of dealer roots, pioneered and
effectively implemented perfect dealer management systems such as 1,000 point assessment mechanism, "10+1" Oppein
terminal marketing system, double 50 theory and store 4S management. Meanwhile, the Company conforms to the
development trend of the industry, deepens the omni-channel development strategy, and builds a more mature channel
operation model with retail and whole decoration channels as the backbone, engineering and e-commerce channels as the
two wings, and direct-sale and foreign trade channels as the important support.
(III) Advantages of informatization, customization and intellectualization
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Chairman Yao Liangsong of the Company said that "first-class informatization may not achieve first-class
enterprises, and first-class enterprises must have first-class informatization". As the world's largest single product
customized cabinet and whole house customized double champion manufacturer, after five years of enterprise
transformation and upgrading, Oppein has provided the whole process of information transformation and construction,
established a global and capable information development team including the Group's Marketing Information Center,
Manufacturing Information Center, Functional Information Center and professional software company (Beijing Jiaju
Science and Technology), and independently created marketing support software MTDS, design software CAXA, MSCS,
MOM\MES, TIMS and other core systems mark that the intelligent technology platform with cloud design, big data
application and robot flexible manufacturing as the core has entered the stage of practical application, and informatization,
customization and intellectualization will promote "building Oppein into a world excellent home group". In the past five
years, Oppein informatization has taken the integration of informatization and intellectualization of product design and
manufacturing as its R&D direction, focusing on the construction goal of "design and manufacturing integration,
centralized planning and multi-base collaborative production, intelligent manufacturing system support". The Company
has successfully built a large-scale non-standard customized home intelligent manufacturing support technology platform
and industrial Internet platform, and built a full three-dimensional information model integrating large home furnishing
design, display and manufacturing, and established the data middleground and business middleground of marketing and
manufacturing. It has realized the comprehensive informatization and cloudization of marketing, design, production and
delivery links, formed a closed-loop data link, and realized the informatization management of the whole process from
design to after-sales of customized products through the digital intelligence center.
(IV) Mature and efficient systematic operation advantages
The Company attaches great importance to system construction and implementation, with a total of more than 700
business systems, covering three major system businesses of function, manufacturing and marketing. Based on the
customization attributes of the Company's products, in order to cope with the personalized needs of customers and the
rapid changes in channels, the Company timely adjusts its business strategy to obtain first mover advantages at the time
of channel reform, integration and industry shuffling, and takes the systematic collaborative guarantee mechanism
oriented by front-line marketing demand as the terminal to escort product competition, channel occupation, strategy
adjustment and management upgrading, and continues to empower, and always maintain the strong competitiveness of
the Oppein system. Mr. Yao Liangsong, the controlling shareholder of Oppein Home, and the core management of the
Company have rich industry experience in the home industry, and have a good judgment and grasp of the strategic trend
of the industry, the development direction of the enterprise, the employment mechanism and incentive measures. With
the increasing stability of the Company's leading position in the industry, the Company's talent introduction strategy of
"nesting and attracting phoenix" has also been carried out smoothly, attracting more high-quality industry talents to join
Oppein, and working together to achieve the grand goal of "building Oppein into a world excellent home enterprise".
(V) Strong R&D and innovation capabilities of products and processes
The Company adheres to innovation to promote development, constantly develops independently, gets rid of the
stale and brings forth the fresh, and unremittingly develops new products, new materials, new processes and new
technologies, so that the Company's process and R&D level are always in the forefront of the industry. In order to meet
the market demand, the Company has continuously studied and explored in the fields of product process structure design,
new material development and application, process quality management and so on. The Company's leading technology
level provides a strong technical guarantee for the production of high-quality customized furniture products. The
Company continuously improves and innovates production technology, takes informatization as a tool and means to
promote the improvement of process technology, establishes an incentive and assessment mechanism for technical
personnel guided by results, and establishes a perfect process level process control system. After years of efforts, the
Company's product development has gradually transitioned from single product customization to whole home
customization and whole home customization, and from single new product design to new product design, extension
design and functional design. As of December 31, 2022, the Company and its holding subsidiaries have 798 patents and
92 computer software copyrights.
(VI) Flexible large-scale non-standard customization production capacity
In the early 1990s, Oppein took the lead in introducing the concept of European "integrated kitchen" into China,
creating a precedent for China's industrial production of modern cabinets, and is known as the advocate of China's "kitchen
revolution". With the Company's continuous R&D investment for many years, deep technological reserves, leading
household R&D strength, upstream and downstream bargaining power of the industrial chain, the Company has explored
a large-scale non-standard customized product manufacturing model with Oppein characteristics. At present, the total
production scale of the Company's customized furniture products ranks first in the industry. The Company's capacity
design is based on the national layout and large home furnishing strategy, and relying on production and manufacturing,
it builds four major production bases in the East (Wuxi Base), the South (Qingyuan Base), the West (Chengdu Base) and
the North (Tianjin Base), forming a national production capacity radiating East, South, West and North China.
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V. Main operating conditions during the reporting period
During the reporting period, the operating income was CNY 22.480 billion, an increase of 9.97% over the same
period last year, and the net profit attributable to shareholders of listed companies was CNY 2.688 billion, an increase of
0.86% over the same period last year.
(I) Main business analysis
1. Analysis of Changes in Related Subjects in Profit Statement and Cash Flow Statement
Unit: CNY
Amount of the same Change ratio
Subject Current period balance
period last year (%)
Operating income 22,479,503,474.56 20,441,604,591.50 9.97
Operating cost 15,374,184,716.14 13,978,340,522.59 9.99
Selling expenses 1,678,894,114.14 1,385,772,778.03 21.15
Administrative expenses 1,335,732,876.37 1,131,445,694.80 18.06
Financial expenses -247,399,167.99 -115,480,875.88 -114.23
R&D expense 1,123,248,931.13 907,758,166.73 23.74
Net cash flows from operating
2,409,760,167.55 4,045,966,670.39 -40.44
activities
Net cash flows from investing
-7,146,174,752.94 -2,065,130,017.73 -246.04
activities
Net cash flows from financing
2,985,316,174.67 -187,037,166.66 1,696.11
activities
Reasons for changes in sales expenses: The increase over the same period last year was mainly due to the increase in
advertising and publicity fees and employee remuneration
Reasons for changes in financial expenses: The decrease over the same period last year was mainly due to the increase in
interest income.
Reasons for changes in R&D expenses: The increase over the same period last year was mainly due to the increase in
R&D investment.
Reasons for changes in net cash flow from operating activities: The decrease over the same period last year was mainly
due to the increase in cash paid for purchasing goods and receiving services
Reasons for changes in net cash flow from investment activities: The decrease over the same period last year was mainly
due to the increase in cash paid for investment.
Reasons for changes in net cash flow from financing activities: The increase over the same period last year was mainly
due to the issuance of convertible bonds.
Detailed description of major changes in the Company's business type, profit composition or profit source in the current
period
□ Applicable √ Not applicable
2. Revenue and cost analysis
√ Applicable □ Not applicable
During the reporting period, the Company's main business income was CNY 22,000,522,428.80, an increase of 9.21%
over the same period last year, and the main business cost was CNY 15,144,117,735.57, an increase of 9.54% over the
same period last year.
(1) Main business by industry, product, region and sales model
Unit: CNY
Main business by industry
Increase Increase or Increase or
or decrease in decrease in
Gross
decrease operating gross profit
profit
By industry Operating income Operating cost in costs over margin over
margin
operating the the previous
(%)
income previous year
over the year (%) (%)
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previous
year (%)
Furniture Decrease by
22,000,522,428.80 15,144,117,735.57 31.16 9.21 9.54
manufacturing 0.20%
Main business by product
Increase
or
Increase or Increase or
decrease
Gross decrease in decrease in
in
profit operating gross profit
By product Operating income Operating cost operating
margin costs over margin over
income
(%) the previous the previous
over the
year (%) year (%)
previous
year (%)
Kitchen Decrease by
7,173,091,365.63 4,732,790,483.06 34.02 -4.73 -4.26
cabinets 0.33%
Wardrobes
Decrease by
and 12,139,192,500.13 8,281,753,525.39 31.78 19.34 20.07
0.41%
accessories
Increase by
Bathroom 1,034,631,973.88 763,599,926.60 26.20 4.63 3.51
0.80%
Wood Increase by
1,345,660,384.59 1,125,190,957.38 16.38 8.85 5.62
door 2.56%
Increase by
Other 307,946,204.57 240,782,843.14 21.81 40.64 32.33
4.91%
Decrease by
Total 22,000,522,428.80 15,144,117,735.57 31.16 9.21 9.54
0.20%
Main business by region
Increase
or
Increase or Increase or
decrease
Gross decrease in decrease in
in
profit operating gross profit
By region Operating income Operating cost operating
margin costs over margin over
income
(%) the previous the previous
over the
year (%) year (%)
previous
year (%)
Decrease by
East China 7,046,147,510.89 4,766,040,886.99 32.36 10.86 11.32
0.28%
South Decrease by
3,985,127,886.24 2,590,868,114.75 34.99 8.89 9.40
China 0.30%
North Decrease by
3,040,585,260.42 2,164,221,878.52 28.82 8.90 9.50
China 0.39%
Central Decrease by
2,343,241,631.60 1,675,242,197.43 28.51 14.57 15.15
China 0.36%
Southwest Decrease by
2,773,369,636.04 1,984,564,458.12 28.44 7.43 8.06
China 0.41%
Northeast Decrease by
1,055,540,913.25 753,916,966.05 28.58 -8.62 -8.07
China 0.42%
Northwest Decrease by
1,538,342,253.09 1,081,853,088.58 29.67 13.92 14.84
China 0.56%
Overseas Increase by
218,167,337.27 127,410,145.13 41.60 6.47 -12.48
regions 12.64%
Decrease by
Total 22,000,522,428.80 15,144,117,735.57 31.16 9.21 9.54
0.20%
Main business by sales model
Sales Gross Increase Increase or Increase or
Operating income Operating cost
model profit or decrease in decrease in
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2022 Annual Report
margin decrease operating gross profit
(%) in costs over margin over
operating the previous the previous
income year (%) year (%)
over the
previous
year (%)
Stores Increase by
18,287,627,470.08 12,496,049,191.05 31.67 12.42 12.19
Total 0.14%
Direct-sale Decrease by
705,526,346.13 314,290,952.36 55.45 20.12 49.16
stores 8.67%
Dealership Increase by
17,582,101,123.95 12,181,758,238.69 30.72 12.13 11.48
stores 0.41%
Bulk Decrease by
3,494,727,621.45 2,520,658,399.39 27.87 -4.85 -0.83
business 2.92%
Online
0.00 0.00 / / / /
sales
Increase by
Other 218,167,337.27 127,410,145.13 41.60 6.47 -12.48
12.64%
Decrease by
Total 22,000,522,428.80 15,144,117,735.57 31.16 9.21 9.54
0.20%
Description of main business by industry, product, region and sales model
In 2022, the Company's main business income accounted for 97.87% of its business income, where: From the
perspective of products, the sales income of integrated kitchen cabinets, wardrobes and supporting furniture products is
the main source of the Company's main business income, accounting for more than 85% of the main business income;
regionally, 99% of the Company's main business income mainly comes from domestic; in terms of channels, the operating
income contributed by the sales channels of dealer exclusive stores accounts for nearly 80% of the main business income.
(2) Analysis of Production and Sales
√ Applicable □ Not applicable
Increase
Increase Increase
or
or or
decrease
decrease decrease
in
in sales in
Main products Unit Production Sales volume Inventory production
over the inventory
over the
previous over the
previous
year previous
year
(%) year (%)
(%)
Integrated
Set 829,141.00 850,845.00 9,501 -9.74 -4.65 -69.55
cabinets
Wardrobes and
supporting
Set 3,176,281.00 3,271,426.00 37,505.00 8.40 15.79 -71.73
furniture
products
Integrated
Set 642,080.00 627,889.00 19,248.00 7.82 3.14 280.62
bathroom
Integrated wood
Nos. 1,099,655.00 1,096,858.00 8,206.00 7.06 7.01 51.71
door
(3) Performance of major purchase contracts and major sales contracts
□ Applicable √ Not applicable
(4) Cost analysis
Unit: CNY
By industry
Cost Amount of Proportio Amount of the Proportio Change Informatio
By industry
component current period n of same period last n of total proportio n note
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2022 Annual Report
items current year cost in n of
period to the same current
total cost period amount
(%) last year over the
(%) same
period
last year
(%)
12,149,585,944. 10,948,675,149.
Material 80.23 79.19 10.97 /
46 93
Furniture
1,337,334,677.1 1,329,237,132.5
manufacturi Labor 8.83 9.61 0.61 /
8 4
ng
Manufactu 1,657,197,113.9 1,547,642,487.8
10.94 11.19 7.08 /
re cost 3 0
15,144,117,735. 13,825,554,770.
Total 100.00 100.00 9.54 /
57 27
By product
Change
proportio
Proportio
Proportio n of
n of total
n of current
Cost Amount of the cost in
Amount of current amount Informatio
By product component same period last the same
current period period to over the n note
items year period
total cost same
last year
(%) period
(%)
last year
(%)
3,637,835,955.4 3,827,216,585.6
Material 24.02 27.68 -4.95 —
9 1
Cabinet Labor 372,514,707.48 2.46 382,168,118.82 2.76 -2.53 —
Manufactu
722,439,820.09 4.77 733,873,366.67 5.31 -1.56 —
re cost
Wardrobes 6,943,967,793.6 5,678,210,364.5
Material 45.85 41.07 22.29 —
and 7 8
supporting Labor 713,262,042.15 4.71 702,118,015.47 5.08 1.59 —
furniture Manufactu
624,523,689.57 4.12 516,961,134.63 3.74 20.81 —
products re cost
Material 616,046,961.56 4.07 597,116,971.32 4.32 3.17 —
Labor 78,849,365.48 0.52 77,026,772.43 0.56 2.37 —
Bathroom
Manufactu
68,703,599.57 0.45 63,548,966.66 0.46 8.11 —
re cost
Material 724,054,798.02 4.78 675,563,682.60 4.89 7.18 —
Labor 162,473,264.71 1.07 158,448,875.90 1.15 2.54 —
Wood door
Manufactu
238,662,894.65 1.58 231,339,475.09 1.67 3.17 —
re cost
Material 227,680,435.73 1.50 170,567,545.82 1.23 33.48 —
Labor 10,235,297.36 0.07 9,475,349.92 0.07 8.02 —
Other
Manufactu
2,867,110.05 0.02 1,919,544.75 0.01 49.36 —
re cost
15,144,117,735. 13,825,554,770.
Total 100.00 100.00 9.54 —
57 27
(5) Changes in the scope of consolidation due to changes in equity of major subsidiaries during the reporting period
□ Applicable √ Not applicable
(6) Major changes or adjustments in the Company's business, products or services during the reporting period
□ Applicable √ Not applicable
(7) Major sales customers and major suppliers
A. Major sales customers of the Company
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2022 Annual Report
√ Applicable □ Not applicable
The sales of the top five customers were CNY 1,336.398 million, accounting for 5.94% of the total annual sales;
among the top five customers, the sales of related parties were CNY 0.00, accounting for 0.00% of the total annual sales.
During the reporting period, the proportion of sales to a single customer exceeded 50% of the total, and there were new
customers in the top five customers or serious dependence on a small number of customers
□ Applicable √ Not applicable
B. Main suppliers of the Company
√ Applicable □ Not applicable
The purchase amount of the top five suppliers was CNY 2,066,225,500, accounting for 16.02% of the total annual
purchasing amount; among the top five suppliers, the purchase amount of related parties is CNY 0.00, accounting for
0.00% of the total annual purchase amount.
During the reporting period, the proportion of purchases from a single supplier exceeded 50% of the total, and there
were new suppliers in the top five suppliers or serious dependence on a small number of suppliers
□ Applicable √ Not applicable
3. Expenses
√ Applicable □ Not applicable
Year-on-year
increase or
Item 2022 2021 Description of changes
decrease
(%)
Mainly due to the
Selling increase in advertising
1,678,894,114.14 1,385,772,778.03 21.15
expenses and publicity fees and
employee remuneration
Administrative
1,335,732,876.37 1,131,445,694.80 18.06 /
expenses
Mainly due to the
R&D expense 1,123,248,931.13 907,758,166.73 23.74 increase in R&D
investment
Mainly due to the
Financial
-247,399,167.99 -115,480,875.88 -114.23 increase in interest
expenses
income
4. R&D investment
(1) Table of R&D investment
√ Applicable □ Not applicable
Unit: CNY
Current costed R&D investment 1,123,248,931.13
Current capitalized R&D investment 0.00
Total R&D investment 1,123,248,931.13
Proportion of total R&D investment in 5.00
operating income (%)
Proportion of R&D investment capitalization 0.00
(%)
(2) Table of R&D personnel
√ Applicable □ Not applicable
Number of R&D personnel 3,024
Proportion of R&D personnel in the total number of the Company (%) 12.33
Education structure of R&D personnel
Education structure category Number of people of education structure
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2022 Annual Report
PhD 0
Master's degree 70
Bachelor's degree 1,450
Junior college 1,493
High school and below 11
Age structure of R&D personnel
Age structure category Number of people of age structure
Under 30 years old (excluding 30) 1,173
30 - 40 years old (including 30 years old, excluding 40 years old) 1,546
40 - 50 years old (including 40 years old, excluding 50 years old) 266
50 - 60 years old (including 50 years old, excluding 60 years old) 38
60 years old and above 1
(3) Information note
□ Applicable √ Not applicable
(4) Reasons for major changes in the composition of R&D personnel and their impact on the Company's future
development
□ Applicable √ Not applicable
5. Cash flow
√ Applicable □ Not applicable
Unit: CNY
Year-on-year
Amount in the previous increase or
Item Closing balance
year decrease
(%)
Sub-total of cash inflow from
25,003,315,997.04 24,959,794,327.17 0.17
operating activities
Sub-total of cash outflow from
22,593,555,829.49 20,913,827,656.78 8.03
operating activities
Net cash flows from operating
2,409,760,167.55 4,045,966,670.39 -40.44
activities
Sub-total of cash inflow from
7,182,276,346.74 3,406,213,978.12 110.86
investing activities
Sub-total of cash outflow from
14,328,451,099.68 5,471,343,995.85 161.88
investing activities
Net cash flows from investing
-7,146,174,752.94 -2,065,130,017.73 -246.04
activities
Sub-total of cash inflow from
8,483,617,108.80 3,677,975,159.74 130.66
financing activities
Sub-total of cash flows from
5,498,300,934.13 3,865,012,326.40 42.26
financing activities
Net cash flows from financing
2,985,316,174.67 -187,037,166.66 1,696.11
activities
(1) Net cash flow from operating activities: The decrease over the same period last year was mainly due to the increase
in cash paid for purchasing goods and receiving services.
(2) Subtotal of cash inflow from investment activities: The increase over the same period last year was mainly due to the
increase in cash received from investment recovery.
(3) Subtotal of cash outflow from investment activities: The increase over the same period last year was mainly due to
the increase in cash paid for investment.
(4) Net cash flow from investment activities: The decrease over the same period last year was mainly due to the increase
in cash paid for investment.
(5) Subtotal of cash inflow from financing activities: The increase over the same period last year was mainly due to the
increase in cash received from absorbing investment and the increase in cash received from obtaining loans.
(6) Subtotal of cash outflow from financing activities: The increase over the same period last year was mainly due to the
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2022 Annual Report
increase in cash paid for debt repayment.
(7) Net cash flow from financing activities: The increase over the same period last year was mainly due to the issuance
of convertible bonds.
(II) Description of significant changes in profits caused by non-main business
□ Applicable √ Not applicable
(III) Analysis of assets and liabilities
√ Applicable □ Not applicable
1. Assets and liabilities
Unit: CNY
Change
proportion
Proportion Proportion of amount
of ending of ending at the end
balance of balance of of the
Ending balance of the Ending balance of the current Information
Item Name
the current period current the last period previous period note
period in period in over the
total total end of the
assets (%) assets (%) previous
period
(%)
Mainly due to
the public
issuance of
convertible
corporation
Cash and bank bonds, the
8,269,801,977.25 28.90 6,561,937,418.36 28.05 26.03
balances accumulation
of operating
results and the
increase of
short-term
loans.
Mainly due to
the decrease in
Trading the purchase of
803,050,958.90 2.81 1,677,354,882.08 7.17 -52.12
financial assets corporate
financial
products
Due to the
decrease in bill
settlement
Notes volume
110,434,205.93 0.39 206,073,671.76 0.88 -46.41
receivable adopted by the
Company and
engineering
customers
Mainly due to
the increase in
Accounts accounts
1,356,804,850.55 4.74 1,011,693,187.67 4.32 34.11
receivable receivable from
engineering
customers
Mainly due to
the decrease of
Prepayments 107,436,378.36 0.38 148,345,992.40 0.63 -27.58
prepaid land
transfer fees,
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2022 Annual Report
materials and
advertising fees
Mainly due to
Other the increase in
197,101,668.61 0.69 95,586,738.83 0.41 106.20
receivables margin
receivable
Mainly due to
the increase in
Non-current
long-term fixed
assets due 922,210,739.68 3.22 - - /
time deposits
within one year
due within one
year
Mainly due to
the increase of
Other current VAT input tax
199,747,707.68 0.70 78,826,684.25 0.34 153.40
assets to be deducted
and certified by
the Company
Mainly due to
the decrease in
investment
Long-term
profits and
equity 10,518,308.44 0.04 15,543,367.11 0.07 -32.33
losses
investments
recognized
under the
equity method
Mainly due to
Other non-
the decrease in
current 18,968,837.07 0.07 60,339,938.23 0.26 -68.56
foreign equity
financial assets
investment
Mainly due to
the increase in
Construction in
1,430,244,831.22 5.00 347,455,504.19 1.49 311.63 investment in
progress
base
construction
Mainly due to
Right-of-use
143,259,299.38 0.50 24,976,072.05 0.11 473.59 the increase in
assets
store leasing
Mainly due to
the increase in
Long-term decoration
prepaid 100,563,403.28 0.35 79,715,027.09 0.34 26.15 expenses to be
expenses amortized at
the current
period
Mainly due to
the increase of
Other non- fixed time
3,964,225,445.14 13.86 2,143,540,620.17 9.16 84.94
current assets deposits for
more than one
year
Mainly due to
the increase in
Short-term
4,584,695,003.58 16.02 2,389,126,170.93 10.21 91.90 bill financing
loans
loans and
liquidity loans
Mainly due to
the decrease of
Notes payable 70,366,124.74 0.25 139,951,771.71 0.60 -49.72
the Company's
bill business
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2022 Annual Report
Mainly due to
the decrease in
Receipts in
364,393,984.51 1.27 885,811,485.23 3.79 -58.86 advance
advance
receipts from
dealers
Mainly due to
Contract the increase in
782,289,860.99 2.73 1,202,994,206.12 5.14 -34.97
liabilities customer order
conversion
Mainly due to
Other payables 840,531,618.28 2.94 667,841,099.64 2.85 25.86 the increase in
margin payable
Non-current Mainly due to
liabilities due 241,730,653.70 0.84 13,286,652.37 0.06 1,719.35 the increase in
within one year store leasing
Mainly due to
Other current the decrease of
98,158,653.53 0.34 144,631,995.61 0.62 -32.13
liabilities VAT to be
resold
Mainly due to
the increase in
Long-term
5,122,020.57 0.02 - - / borrowing for
loans
more than one
year
Mainly due to
Debentures the issuance of
1,601,701,819.31 5.60 - - /
payable convertible
bonds
Mainly due to
Lease
101,476,366.50 0.35 12,665,970.28 0.05 701.17 the increase in
liabilities
store leasing
Mainly due to
the increase in
interest
Deferred
provision for
income tax 134,412,062.70 0.47 96,615,466.91 0.41 39.12
fixed time
liabilities
deposits and
financial
management
Mainly due to
Other equity the issuance of
424,351,185.44 1.48 - - /
instruments convertible
bonds
Mainly due to
the increase in
Other
investment
comprehensive 111,426,682.00 0.39 59,580,680.56 0.25 87.02
gains on non-
income
tradable equity
instruments
2. Overseas assets
√ Applicable □ Not applicable
(1) Asset size
Including: overseas assets 362,779,065.34 (Unit: CNY), accounting for 1.27% of the total assets.
(2) Relevant instructions on the relatively high proportion of overseas assets
□ Applicable √ Not applicable
3. Restrictions on major assets by the end of the reporting period
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2022 Annual Report
√ Applicable □ Not applicable
Unit: CNY
Item Ending book value Reasons for restriction
Bank acceptance bill margin, letter of credit margin,
letter of guarantee margin, external guarantee margin,
Cash and bank balances 312,566,682.72
court ruling to freeze, restricted funds used by e-
commerce platforms
There is a redemption period and a closure period for
Trading financial assets 803,050,958.90
financial products
Fixed assets 49,699,840.67 There is mortgage guarantee for house property
Intangible assets 39,497,528.36 There is mortgage guarantee for intangible assets
Notes receivable 39,114,681.94 Pledged for business needs
Total 1,243,929,692.59 —
4. Others
□ Applicable √ Not applicable
(IV) Industry operational information analysis
√ Applicable □ Not applicable
The Company is engaged in wood furniture manufacturing industry (C211) in furniture manufacturing industry
(C21).
Analysis of operational information in furniture manufacturing industry
1 Physical stores during the reporting period
√ Applicable □ Not applicable
Number at the Newly opened Number at the
Closed this year
Store type end of last year this year end of this year
(Nos.)
(Nos.) (Nos.) (Nos.)
Oppein kitchen cabinet (including
2,459 361 341 2,479
kitchen and wardrobe)
Oppein wardrobe (whole home
2,201 352 343 2,210
customization)
Oppein Sanitary 805 73 62 816
Direct-sale stores of the Company 47 16 5 58
Oppolia 989 266 201 1,054
Ouboni 1,021 242 207 1,056
Note: The statistical caliber of Oppein kitchen cabinet stores and dealers includes Oppein kitchen cabinet single category
dealers, kitchen cabinet stores and comprehensive dealers and kitchen cabinet and wardrobe comprehensive stores acting
for Oppein kitchen cabinets and wardrobes at the same time.
(1) Store and dealer information during the reporting period
Unit: nos.
Number of Number of
Number of dealers at Number of dealers
Category stores at the end stores at the end
the end of 2021 at the end of 2022
of 2021 of 2022
Oppein kitchen cabinet
(including kitchen and 1,609 1,516 2,459 2,479
wardrobe)
Oppein wardrobe (whole
1,079 1,062 2,201 2,210
home customization)
Oppolia 852 899 989 1,054
Oppein Sanitary 641 655 805 816
Ouboni 931 902 1,021 1,056
(2) Oppein dealers and stores by market level
Unit: nos.
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Oppein kitchen cabinet (including Oppein wardrobe
Ouboni
Market level kitchen and wardrobe) (independent)
Dealer Store Dealer Store Dealer Store
A 67 517 29 428 84 169
B 355 756 226 602 311 365
C 1,094 1,206 807 1,180 507 522
Total 1,516 2,479 1,062 2,210 902 1,056
Oppein Sanitary Oppolia
Market level
Dealer Store Dealer Store
A 30 44 28 103
B 259 337 196 244
C 366 435 675 707
Total 655 816 899 1,054
(3) Store and dealer information by region
Unit: nos.
Oppein kitchen cabinet
Oppein wardrobe
(including kitchen and Ouboni
Region (independent)
wardrobe)
Dealer Store Dealer Store Dealer Store
East China 338 638 258 544 247 273
Central China 297 447 225 388 149 159
South China 160 297 116 257 75 94
North China 222 341 144 343 161 198
Northwest
112 189 93 204 93 119
China
Southwest
278 397 177 338 108 128
China
Northeast
109 170 49 136 69 85
China
Total 1,516 2,479 1,062 2,210 902 1,056
Oppein Sanitary Oppolia
Region
Dealer Store Dealer Store
East China 176 223 243 298
Central China 116 135 159 175
South China 79 90 84 93
North China 88 116 163 180
Northwest China 26 42 52 72
Southwest China 116 153 130 153
Northeast China 54 57 68 83
Total 655 816 899 1,054
2 Profitability of each product type during the reporting period
√ Applicable □ Not applicable
Unit: CNY
Increase
Increase or
or
Increase or decrease in
decrease
Gross decrease in gross
in
Product profit operating profit
Operating income Operating cost operating
type margin costs over the margin
income
(%) previous year over the
over the
(%) previous
previous
year (%)
year (%)
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Kitchen
7,173,091,365.63 4,732,790,483.06 34.02 -4.73 -4.26 -0.33
cabinets
Wardrobes
and 12,139,192,500.13 8,281,753,525.39 31.78 19.34 20.07 -0.41
accessories
Bathroom 1,034,631,973.88 763,599,926.60 26.20 4.63 3.51 0.80
Wood
1,345,660,384.59 1,125,190,957.38 16.38 8.85 5.62 2.56
door
Other 307,946,204.57 240,782,843.14 21.81 40.64 32.33 4.91
3 Production and sales of each product type during the reporting period
√ Applicable □ Not applicable
Increase or
Purchased
Self-produced Outsourced decrease in
finished Other sources Sales volume
Product type products production sales over the
products ('0,000 nos.) ('0,000 nos.)
('0,000 nos.) ('0,000 nos.) previous year
('0,000 nos.)
(%)
Integrated
82.91 / / / 85.08 -4.65
cabinets
Wardrobes and
supporting
317.63 / / / 327.14 15.79
furniture
products
Integrated
64.21 / / / 62.79 3.14
bathroom
Integrated
109.97 / / / 109.69 7.01
wood door
4 Profitability of each brand during the reporting period
√ Applicable □ Not applicable
Unit:CNY '0,000
Operating Operating
Increase or
income ratio cost ratio
decrease in
Gross profit Increase or Increase or
gross profit
Brand Operating income Operating cost margin decrease in decrease in
margin over the
(%) the previous the previous
previous year
year year
(%)
(%) (%)
Oppein 1,881,382.29 1,280,613.87 31.93 7.77 8.68 -0.58
Oppolia 184,110.84 121,278.81 34.13 29.13 27.27 0.96
Ouboni 134,559.11 112,519.10 16.38 8.85 5.62 2.56
5 Profitability of each sales channel during the reporting period
√ Applicable □ Not applicable
Unit:CNY ‘0,000
Increase or
Increase or Increase or decrease in
Gross decrease in decrease in gross profit
Operating profit operating operating margin
Sales channel Operating cost
income margin income over costs over the over the
(%) the previous previous year previous
year (%) (%) year
(%)
Total stores 1,828,762.75 1,249,604.92 31.67 12.42 12.19 0.14
Direct-sale
70,552.63 31,429.10 55.45 20.12 49.16 -8.67
stores
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Dealership 1,758,210.11 1,218,175.82 30.72 12.13 11.48 0.41
Bulk business 349,472.76 252,065.84 27.87 -4.85 -0.83 -2.92
Online sales / / / / / /
Other 21,816.73 12,741.01 41.60 6.47 -12.48 12.64
Total 2,200,052.24 1,514,411.77 31.16 9.21 9.54 -0.20
(V) Investment analysis
Overall analysis of foreign equity investment
√ Applicable □ Not applicable
I. The Company has set up 12 holding subsidiaries and sub-subsidiaries such as Chengdu Oppein Creative Large
Home Furnishing Co., Ltd. and Handan Oppein Large Home Furnishing Sales Co., Ltd., with a total investment amount
of about CNY 51 million (calculated according to the investment obligations of each company's registered capital).
II. Oppein (Hong Kong) International Trade Company Limited, a wholly-owned subsidiary of the Company,
completed the purchase of 100% equity interest in FORMER S.R.L. held by FASA S.R.L. of Italy at a transaction
consideration of 4.63 million euros.
1. Significant equity investments
□ Applicable √ Not applicable
2. Significant non-equity investments
√ Applicable □ Not applicable
"Oppein Home Intelligent Manufacturing Base in Central China" plans to build a new smart home production line
and supporting facilities such as cabinets, wardrobes, wooden doors and bathrooms. About CNY 630 million was invested
in the reporting period. Where: In terms of infrastructure construction, 1. The main structure or secondary structure of
most factories has been completed; the secondary structure construction of some factories is in progress; the wall
decoration of some factories has been completed and is in the stage of installation engineering; 2. The main body of the
three-dimensional warehouse and the steel structure roof have been completed, and the secondary mechanism construction
is being implemented; 3. The construction of external wall related works of some supporting facilities has been completed,
and the construction of waterproof works has been completed; some supporting facilities are still in the main construction
stage. In terms of equipment purchase progress, the equipment such as cutting and edge sealing required for the production
of wardrobes and kitchen cabinets has been paid in the early stage, and the performance of the equipment purchase
contract is normal.
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3. Financial assets measured at fair value
√ Applicable □ Not applicable
Unit: CNY
Profits and losses Cumulative Impairment
Sale/redemption
Asset on changes in fair changes in fair accrued in Purchase amount in
Beginning balance amount in the Other changes Closing balance
category value in the value recognized the current the current period
current period
current period in equity period
Other 1,677,354,882.08 3,050,958.90 1,100,000,000.00 1,977,354,882.08 803,050,958.90
Other 310,310,218.60 143,805,165.93 5,572,715.38 64,497,384.83 369,234,888.05
Other 60,339,938.23 -36,815,234.41 1,000,000.00 5,555,866.75 18,968,837.07
Total 2,048,005,038.91 -33,764,275.51 143,805,165.93 0.00 1,101,000,000.00 1,988,483,464.21 64,497,384.83 1,191,254,684.02
Notes:
1. The first line of "other": other trading financial assets, bank financial product data;
2. The second line of "other": other are investments in other equity instruments, where "other changes" are 64.4974 million fair value changes included in other comprehensive income
in the current period
3. The third line of "other": other are other non-current financial assets.
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Securities investment
□ Applicable √ Not applicable
Private equity investment
□ Applicable √ Not applicable
Derivatives investment
□ Applicable √ Not applicable
4. Specific progress of major asset restructuring and integration during the reporting period
□ Applicable √ Not applicable
(VI) Disposal of material assets and equity
□ Applicable √ Not applicable
(VII) Analysis of major holding and shareholding companies
√ Applicable □ Not applicable
Unit: CNY, '0,000
Principal Registered Total Operating Operating
Net assets Net profit
activities Capital assets income profit
Tianjin Oppein
Integration Manufacturing 5,000.00 179,799.96 102,097.30 235,452.26 18,498.67 16,688.49
Home Co., Ltd.
Guangzhou
Oppein
Manufacturing 10,000.00 782,199.72 243,966.06 884,835.34 65,326.00 57,112.50
Integration
Home Co., Ltd.
Guangzhou
Oppein Creative
Design service 1,000.00 214,484.40 158,362.86 95,516.24 40,766.62 34,958.41
Home Design
Co., Ltd.
Zhuhai Oppein
Creative Home Design service 1,000.00 121,511.18 100,484.59 75,050.61 55,873.72 47,697.80
Design Co., Ltd.
(VIII) Structured subjects controlled by the Company
□ Applicable √ Not applicable
VI. Discussion and analysis of the Company's future development
(I) Industry structure and trend
√ Applicable □ Not applicable
1. With the adjustment of demand structure, the proportion of stock housing market gradually increases
According to the data of the National Bureau of Statistics, the growth of the new housing market has declined, and
the users of stock housing and second-hand housing have become the growth point of the furniture industry. The "14th
five year plan" proposes that the urbanization rate of China's permanent population will increase to 65%, and by the end
of 2022, the urbanization rate of China's population was 65.22%, an increase of 0.50% over 2021. China's rapid
urbanization exceeds the expected progress of the original target, forming a good foundation for the support of the demand
side.
China's average building age of the stock houses continues to rise, the demand for demolition also increases
accordingly. According to the data of the seventh census, by 2020, households living in houses with housing age of less
than 10 years/11-20 years/21-30 years/31-40 years/41-50 years/above 50 years accounted for
36.7%/32.03%/19.65%/8.63%/1.91%/1.08% respectively. From the perspective of the facilities of stock houses,
according to the data of the seventh national census, the proportion of stock houses without kitchens or shared kitchens
with other households in houses was 4.23%, and the proportion of stock houses without piped tap water was 3.50%. At
present, there is still lots of room for optimization of the quality of some houses, and the demand for inventory renovation
is expected to provide new incremental demand for the home decoration industry.
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Figure: Stock Housing Facilities in 2020
No bathing facilities in the house
No flush toilet in the house
No kitchen or sharing with other households in the house
No piped tap water in the house
Source: China Census Yearbook 2020, National Bureau of Statistics, compiled by Beike Research Institute
According to the calculation of Beike Research Institute, during 2022-2030, the total demand for housing decoration
in China will be between 3-5 billion m2 per year. Under neutral conditions, the total demand for housing decoration in
China will reach 3.971 billion m2 in 2025 and 4.596 billion m2 in 2030. According to the hard decoration data of complete
sets of housing in SD Home Decoration covered cities and the adjustment calculation of Beike Research Institute, the
average expenditure of home decoration in China in 2022 is CNY 1,040 per m2 from the beginning of decoration to the
completion and occupancy. Based on the forecast of demand and decoration unit price, in the neutral case, the scale of
China's home decoration market will reach CNY 4.78 trillion in 2025 and CNY 7.06 trillion in 2030.
Table: Forecast of Home Decoration and Home Furnishing Market Size
Year 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E
Market Conservative 3.51 3.88 4.30 4.51 4.80 5.12 5.42 5.78 6.58
scale of Neutral 3.69 4.12 4.52 4.78 5.12 5.47 5.80 6.19 7.06
home
decoration
and home
Optimistic 3.88 4.35 4.79 5.06 5.42 5.80 6.23 6.62 7.54
furnishing
(CNY
trillion)
Source: Calculation of Beike Research Institute
According to the classification of CBN The Rising Lab, Beike Research Institute divides cities into six categories:
first tier, new first tier, second tier, third tier, fourth tier and fifth tier cities. According to the forecast of regional market
scale, the home decoration market in third tier cities is the largest and the main source of demand. Under the neutral
assumption, the third tier home decoration market will be CNY 1.23 trillion in 2025 and CNY 1.82 trillion in 2030. In
addition, the decoration of stock house has become the main source of demand in the home decoration market, and its
proportion in the total market size has continued to increase. In the neutral case, the market size of incremental house
decoration will reach CNY 1.50 trillion in 2025 and CNY 1.92 trillion in 2030.
Table: Forecast of Market Size of Incremental House and Stock House Decoration
Year 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E
Market size Conservative 1.12 1.13 1.20 1.24 1.26 1.32 1.35 1.41 1.43
of Neutral 1.30 1.37 1.42 1.50 1.58 1.67 1.73 1.82 1.92
incremental
housing
Optimistic 1.49 1.60 1.70 1.78 1.89 2.00 2.15 2.25 2.39
decoration
(CNY
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trillion)
Market size of stock
2.39 2.75 3.09 3.28 3.54 3.80 4.07 4.37 5.15
housing decoration
Source: Calculation of Beike Research Institute
2. The demand for one-stop decoration continues to increase, and the whole home and decoration have gradually
become the mainstream and consensus of the industry
Passenger flow structure continues to adjust, traditional channel growth is under pressure, and the integration of
traffic fragmentation has become a medium and long-term trend; in terms of categories, many categories are integrated
and penetrated into each other, and the boundaries between categories are gradually blurred. One stop decoration can "fast
and economically" solve the decoration needs of consumers, allow consumers choose from a certain number of principal
and auxiliary material brands and colors and materials, and effectively reduce the cost of information search. Meanwhile,
it can reduce the information asymmetry between consumers, decoration enterprises and building materials brands,
shorten the decision-making cycle and promote the transformation of transactions, and make the whole home
customization and whole decoration gradually develop from market cultivation to market popularization. The whole
decoration channel has become an important direction in the development planning of many customized home furnishing
enterprises. The whole decoration companies and customized home furnishing enterprises promote the market share from
scattered long-tail to concentration in the form of professional division of labor.
In order to meet the needs of stock house, second-hand house user renovation and consumer one-stop decoration,
the Company, with its outstanding capabilities in product R&D, supply chain integration, efficient channel operation,
digital marketing, large-scale intelligent manufacturing and other aspects precipitated for many years, has put forward
"one-stop good appearance whole home customized decoration solutions". In 2022, the Company quickly iterated the
whole home customization to "the whole home customization 2.0", upgraded the model of "six space consulting planning
of the whole home + cabinet, door and wall products + menu pricing", and truly solved the pain points of consumers'
whole home demand. The Company's whole home brand "Baunis" took the lead in putting forward the vision of "one-
stop super integrated service provider" in the industry, and continued to open up a new path and model for whole
decoration large home furnishing on the basis of "increasing traffic, expanding channels and increasing unit value".
Meanwhile, the Company cooperates with pan-home head brands, including the whole chain of home appliances,
principal materials, base materials, soft decoration and other home products, to provide consumers with big brands and
cost-effective products. In 2023, the Company will build a system to serve decoration enterprises, increase the expansion
of whole decoration channels, and comprehensively launch the "thousand cities and ten billion yuan" plan to help the
output value of decoration enterprises continue to break through. In addition to strengthening the advantages of
customized kitchen cabinets, customized wardrobes and other core categories, the Company continues to expand in
integrated kitchens, soft decoration facilities, kitchen appliances and other aspects.
3. The furniture industry is extending from "industry brand" to "consumer brand"
Furniture industry is a durable consumer goods with low frequency and high unit price. Consumers' awareness of
brand is still gradually building, and the industry as a whole is developing from "industry brand" to "consumer brand".
At present, the furniture industry is showing a situation of brand melee. In different types of target markets and consumer
groups, there are many brands competing with each other, and companies seize market share and hope to stabilize their
position. Multi-brand strategy is an important measure for home enterprises to open up the growth ceiling and break
through their original boundaries. Based on their own strategic advantages, management advantages, product advantages,
channel advantages and other comprehensive competitiveness, the Company continues to break through in building
consumer brands in the furniture industry, and strengthens the core brand image of "Oppein style". At the same time,
according to the structure of different consumer groups, it launched high-end, mid-to-high end, younger and other brands
with different levels of user needs, such as Oppolia, Baunis, FITZCARL, miform and other series, to further expand the
coverage of market segments and end consumers, provide full choices for consumers, and further enhance the
comprehensive strength of market competition, which will help to open up the growth space in an all-round way.
4. Informatization helps to upgrade experience, improve the efficiency of the whole process, and continue to
tap the space for cost reduction and efficiency enhancement
With the continuous promotion of the furniture industry, the development of informatization, which goes deep into
all links and businesses of the furniture industry chain, is a key factor to improve the operating efficiency of enterprises
and reduce production costs. To a certain extent, it can help the landing and implementation of enterprise development
strategies, and the importance of building strong informatization capabilities and barriers is becoming increasingly
prominent. Informatization capacity is an important basis for the upgrading and improvement of the whole process of
furniture consumption experience. The construction of informatization capacity in the furniture industry continues to
advance from the design and rendering of front end renderings, the optimization of disassembly and review processes,
the design drawings to the one-click connection at the factory end, and provides customized furniture users with
WYSIWYG, efficient and timely response, process improvement and other high-quality experiences. After years of
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development and market cultivation, the work efficiency of front end designers has been greatly improved, and consumers
can see design drawings close to the real scene and effect in a relatively short period of time, which promotes the
transformation from intended customers to transaction customers to a certain extent. In the future, the development of
informatization will further focus on the production links at the factory side, through the transformation and upgrading of
machinery, equipment and production systems, process sorting and efficiency optimization, it will fully tap the
optimization space, transfer more profits excavated at the back end to consumers, and promote the further improvement
of the cost performance ratio of consumers' home consumption. Around informatization, the Company designs a
marketing service management system with the help of MTDS terminal to realize the transformation from "human
command machine" to "machine command machine", reduce dependence on people and further improve human efficiency.
The Company's informatization advantages are reflected in active investment and comprehensive opening up, from
catching up to surpassing, and continuously driving the efficiency improvement and cost optimization of front and back
end order design and production and all links of the whole category.
(II) Company development strategy
√ Applicable □ Not applicable
"Home, love and Oppein" is not only a well-known advertising slogan, but also the glory and goal of our 29-year
struggle. The Company's corporate vision is positioned to "build Oppein into a world excellent home furnishing
enterprise". Looking at the present, in the face of the rapid change of the industry and the world of great change, only by
following the trend can we remain in the forefront. To this end, the Company will continue to work around the "three
horses and one vehicle" strategy:
1. Informatization strategy: The successful application of Oppein informatization, first, improves the user experience,
users can feel the future home through three-dimensional model browsing, high-definition rendering, 720°rendering and
small video in the design stage; second, the direct application of design data greatly improves the accuracy and efficiency
of quotation, ordering, splitting, technical review, price review and settlement; third, the improvement of the accuracy
and efficiency of these links means the shortening of order design, order conversion cycle, product delivery cycle, and
fewer errors. In addition, Oppein informatization conforms to the development needs of the future decoration business of
the whole Group. In the future, Oppein informatization will also empower dealers to expand new formats through
innovative technological means such as Internet, big data, cloud computing, AI artificial intelligence and supply chain
collaboration, reconstruct the business ecology, industry chain and value chain of large home furnishing, innovate and
transform the traditional customization model and upgrade it into a modern, one-stop delivery and new generation of
large home furnishing business model.
2. Building a large home furnishing model: Oppein is the first enterprise in the industry to put forward a breakthrough
development strategy for large home furnishing. The core of the strategy is to grow from a single product provider to a
home integration solution provider to solve the demand pain points of consumers and channel providers. Driven by the
dual advantages of first mover advantage and enterprise organization and operation coordination ability, Oppein's large
home furnishing strategy will continue to move forward: On the one hand, we will quickly perceive and deepen the
research and building of various large home furnishing models, and explore a large home furnishing development path
that conforms to the situation of Oppein and adapts to the market situation; on the other hand, we will continue to explore
innovative business models for the integration of cabinets and bathrooms, the customization of good appearance whole
home, whole decoration large home furnishing, retail large home furnishing and other categories.
3. Oppein manufacturing 2025: Based on the Company's informatization strategy and large home furnishing strategy,
the manufacturing side efficiently realizes the continuous evolution of products from single channel to multi-channel,
from whole home customization to whole case customization, effectively promotes the landing of large home furnishing
strategy from the source of products and services, continuously deepens the integration of design and production, and
continuously upgrades the underlying architecture of CAXA to create an integrated design software more suitable for
large home furnishing scenarios, comprehensively improves the overall level of intelligent and automated manufacturing,
focuses on the construction of digital factory cloud, and builds Oppein manufacturing 2025 digital lighthouse factory.
4. Comprehensive optimization of terminals: While maintaining the advantages and status of the original channels,
the Company will actively lay out home decoration, whole decoration, bag check, online and foreign trade channel
business, channel management, system management and innovation management in parallel, constantly optimize
management methods, pilot new models multi-dimensionally, and constantly enrich and upgrade terminal sales forms.
5. Brand building: At present, the main home decoration and home furnishing consumers show outstanding
characteristics such as youth, branding, health, intellectualization and one-stop, which is the new direction of brand
promotion strategy in the future. The Company will gradually build the original "product brand" to "platform brand". As
one of the core elements of enterprise development, brand reputation will bring better customer stickiness to the products
and services of brand enterprises, and also bring broader imagination space to the development of brand enterprises. The
Company will continue to carry out brand building and management through multiple channels and forms, so as to make
"home, love and Oppein" more deeply rooted in the hearts of the people.
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(III) Business plan
√ Applicable □ Not applicable
Entering 2023, we are pleased to see that the production and living order of the whole society has gradually returned
to normal, governments at all levels have introduced various economic stimulus and protection policies, and consumption
will probably gradually recover. Faced with the current situation, we generally maintain cautious optimism, and Oppein
people will work towards the same goal, gather the strength of the masses, and strive to break through! In 2023, the
Company strives to achieve a year-on-year increase in operating income of 10%-15% and a year-on-year increase in net
profit of 10%-15%. (Special note: The above indicators are intended to clarify the Company's operating and internal
management control objectives, and do not represent the Company's performance guidance or profit forecast for 2023, let
alone its performance commitment to investors. Whether the above objectives can be achieved is affected by many factors,
such as macroeconomic environment, market conditions, industry development and management team efforts, and there
are certain uncertainties. Investors are advised to pay attention to risks.) The specific plans are as follows:
1. Continuously deepen management innovation, use "system" to stimulate the vitality of the whole
organization and cope with various changes and challenges
"Extreme climate will force extreme pressure, and under extreme pressure, most enterprises will be crushed into the
dust of history, and only a few enterprises will undergo atomic deconstruction and remodeling, just as graphite carbon
becomes diamond"! In 2022, the extreme operating pressure forced the Company to reflect deeply and comprehensively.
Based on a series of in-depth self-analysis, the Company launched a new round of comprehensive reform. In 2023, the
Company will continue to practice, revise and enhance the support capacity of middleground operation, and consolidate
the foundation of high-quality development management:
First, the Company should strengthen the construction and reform of the system and incentive mechanism more
thoroughly and sparingly, and use the "system" to stimulate and activate the whole organization to cope with various
changes and challenges. The Company will fully activate the organization by implementing measures such as the reform
of incentive mechanism for timed posts, functional assessment at the Group level and the reform and optimization of
incentive policies, stimulate the maximum creativity of various posts, and form a joint force of enterprises to overcome
difficulties in overall competitiveness; second, the Company should build a systematic operation capability that matches
the strategy with process governance, so as to achieve the construction of end-to-end business capability and support
capability of organizational strategic objectives.
2. Continue to explore and practice the road of climbing the peak of large home furnishing strategy on both
sides. Oppein whole decoration large home furnishing and a wider range of retail large home furnishing are the
two sides of the peak of large home furnishing and the main way to reach the top
(1) Oppein/Baunis whole decoration large home furnishing "advances forward with two wings and collaborates
globally". First, the Company should further give full play to the system advantages of the Company's large home
furnishing production and management, create a "new whole decoration" strategy, and continue to lead cross-industry
integration breakthroughs; second, the Company should fully enable terminals, continue to promote the innovation of V8
operation system and "operation 1+8" system, and enhance terminal traffic acquisition and operation capabilities; third,
the Company should further optimize investment promotion, cooperate with the existing business model and enabling
system through investment promotion, and transport them to more potential high-quality partners; fourth, product
extension, on the premise of having a better sales foundation for kitchen cabinets and wardrobes, through product R&D,
package integration, mechanism guidance to increase the sales proportion of wooden doors, bathrooms, supporting
products and other products in the whole decoration channel, so as to promote the sustained growth of performance.
(2) Retail large home furnishing is divided into two ways, one way to the Red Sea and the other way to the blue sea.
First, conform to the trend of home passenger flow fragmentation, promote online and offline integration, extend the
customer acquisition scenarios of traditional stores through "1+N+X", and enhance the customer acquisition ability in all
dimensions; second, speed up the integration of categories, provide consumers with the convenience of integrated design,
one-stop purchase and package completion of home space through the integration of kitchen and bathroom and the further
upgrading of the whole business, enhance the competitive threshold of home industry, and accelerate the expansion of
the Company's leading edge; third, the "professional+service" enabling retail system of Oppein large home furnishing is
transformed into the whole decoration track, so as to further consolidate and promote Oppein retailer to become the leader
of the whole decoration track (blue sea).
3. Forge ahead and deepen the road of Oppein informatization
First, continue to deepen the integration of design and production, upgrade the underlying architecture of CAXA,
and build an integrated design software more suitable for large home furnishing scenarios; second, focus on the
construction of digital factory cloud and build Oppein manufacturing 2025 digital lighthouse factory; third,
comprehensively plan, design, develop and deep integrate automatic sorting, testing, transshipment, packaging,
warehousing, processing data acquisition modules and work division management in the workshop; fourth, promote the
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transformation of loading and unloading automation, robot electronic saw transformation, drilling line, sorting/packaging
automation transformation and other projects, and comprehensively improve the overall level of intelligent manufacturing.
4. Strengthen the core competitiveness of products, continue to iterate and upgrade, and timely meet the needs
of consumers for the appearance, function, supporting, quality, cost performance and delivery time of home
products
First, increase R&D and reserves of technology and process, and effectively transform products; second, build a
complete delivery management system for the whole category, and establish a plan management model and delivery
service standards to meet customer needs; third, reconstruct the quality management system in an all-round way, focusing
on promoting the Group's quality reform project, terminal design and installation quality assistance and design problem
prevention system construction project.
(IV) Possible risks
√ Applicable □ Not applicable
1. Risk of changes in market demand
In 2023, throughout the international community, the economic downturn in the past three years, the haze of risk
spillover in the domestic real estate industry has not yet completely dispersed, the economic situation is still in a relatively
weak state, the society has begun to be active due to circulation, and the economy has gradually recovered due to activity,
but the operating environment and supply chain of domestic and foreign markets also face uncertainty, which will bring
uncertainty to the Company's production and operation objectives in 2023.
Through the analysis of consumer demand portraits, the Company will accurately grasp the "consumer demand for
the transformation of second-hand houses and stock houses" and "consumer demand for new houses (rough, partial
decoration, fine decoration)", through the rectification of the whole house, local rectification, hard decoration and bag
check, with the whole home package as the starting point, Oppein whole decoration large home furnishing and retail large
home furnishing models should be carried out simultaneously to provide consumers with integrated design, one-stop
matching and a package of services, to meet the needs of consumers for "better, faster and more economically", improve
the consumption experience of home decoration consumers, and stimulate and awaken their consumption demand.
2. Risk of increased market competition
The Company's customized furniture industry belongs to the furniture subdivision industry. As the industry leader,
the Company has strong advantages in design and development, brand, service and channel. However, due to the fact that
the customized furniture industry is in a shift period from high speed to medium-high speed growth, coupled with the
increase of cross-border entrants in the industry, the release of production capacity of listed companies' investment
projects, and the fragmentation of passenger flow, the change of internal and external factors will lead to the industry
competition from the low-level competition of product price to the compound competition level composed of brand,
network, service, talent, management and scale.
The Company will continue to promote the iteration of business model, optimize its organizational structure, meet
the whole decoration business, improve the layout of industrial chain, implement the Company's large home furnishing
strategy in multiple dimensions, constantly polish product packages to meet the needs of traditional retail customers, and
increase cooperation with decoration enterprises based on the general direction of "product decoration", seize traffic
entrances in multiple directions, and obtain incremental traffic.
3. Risk of fluctuations in raw material prices
The raw materials of customized furniture products produced by the Company include particleboard, MDF,
functional hardware, quartz plate and some purchased electrical appliances. In the past three years, the Company's direct
material cost accounts for a high proportion of production cost, and the change of raw material price has a greater impact
on the Company's production cost. Since the end of 2020, the prices of major raw materials have risen, and up to now
they are still running at a high level. If the purchase prices of raw materials fluctuate sharply in the future, it may have an
uncertain impact on the Company's profitability.
As the largest enterprise in the production and marketing of kitchen cabinets and wardrobes (whole house
customization) in the world, under the adverse procurement situation of fluctuations in raw materials and commodity
markets in recent years, the Company actively employs its advantages of large purchase scale and abundant operating
cash flow to expand and innovate a variety of cost control ideas. The supply chain management center focuses on the four
major aspects of "lock strategy", "control rhythm", "optimize structure" and "sustainability" to control the direct impact
of sharp fluctuations in raw material prices on the Company's purchase costs.
4. Dealer management risk
Dealer exclusive store sales are the main sales model in the customized furniture industry. The sales model of dealer
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exclusive stores is conducive to customized furniture enterprises to expand their marketing network with the help of the
regional resource advantages of dealers, effectively penetrate the markets at all levels and improve the market share of
products. Although the Company and dealers have agreed on each other's rights and obligations in the cooperation
agreement signed, and have unified management of dealers in terms of store image design, personnel training and product
pricing, if individual dealers fail to sell and publicize in accordance with the agreement, it may have an uncertain impact
on the Company's brand image.
The Company is in a cooperative relationship with dealers. On the premise of conforming to the changing trend of
the market and combining with the overall business promotion of the Company, the Company will provide all-round
empowerment and supervision for the daily operation and customer service of distributors in a multi-dimensional way,
including but not limited to flow empowerment, management empowerment, model empowerment and strategic
empowerment. At present, the Company has a relatively perfect dealer introduction, assessment and withdrawal system
guarantee, operating in long term, continuously upgrading and iterating on the premise of respecting the law of market
change, effectively implementing and landing, which is conducive to more efficient, closer and stable cooperation
between headquarters and dealers to jointly provide consumers with better products and services. In addition, the
Company has formulated an early warning mechanism for abnormal operation of dealers, and when there are abnormal
indications, there will be timely management measures to follow up and effectively safeguard the rights and interests of
consumers.
(V) Other
□ Applicable √ Not applicable
VII. The Company fails to disclose the situation and reasons in accordance with the standards due to non
application of the standards or special reasons such as state secrets and trade secrets
□ Applicable √ Not applicable
Section IV Corporate governance
I. Notes on corporate governance
√ Applicable □ Not applicable
During the reporting period, the Company strictly complied with the requirements of laws, regulations, departmental
rules and normative documents such as the Company Law, the Securities Law, the Guidelines for the Governance for
Listed Companies, the Measures for the Administration of Information Disclosure of Listed Companies, and the Rules for
the Listing of Stocks on the Shanghai Stock Exchange. In line with the actual situation of the Company, the Company
continuously improved the corporate governance structure, strengthened the management of insider information,
strengthened the awareness of responsibility for information disclosure, attached importance to the management of
investor relations and earnestly safeguarded the legitimate rights and interests of the Company and shareholders. There is
no difference between the corporate governance status and the requirements for Guidelines for the Governance for Listed
Companies, as follows:
(I) About shareholders and general meetings of shareholders
The Company shall convene the general meetings of shareholders in strict accordance with the provisions and
requirements of the Guidelines for the Governance for Listed Companies, the Articles of Association and the Rules of
Procedure for General Meetings of Shareholders. The deliberation procedures of various proposals shall be open and
transparent, the decision-making shall be fair and equitable, and the resolutions shall be legal and effective. There is no
situation in which major matters of the Company have not been deliberated by the general meetings of shareholders, nor
is there a situation in which they are implemented first and then deliberated. During the reporting period, the Company
held three general meetings of shareholders in 2022, and the specific resolutions are detailed in the "Brief introduction to
the general meeting of shareholders". Each meeting adopted a combination of on-site voting and online voting to facilitate
the participation of minority shareholders in decision-making, ensure the right of minority shareholders to know,
participate and vote on major matters of the Company, and fully protect the interests of the majority of minority investors.
(II) About the Company and controlling shareholders
The controlling shareholders of the Company enjoy the rights of investors through the general meetings of
shareholders in accordance with the law, and do not directly or indirectly interfere with the Company's production
decisions and business activities beyond the general meetings of shareholders. The Company has independent business
and independent operation ability, the controlling shareholders can strictly regulate their own behavior, the Company has
no related party transactions with the controlling shareholders, the Company and the controlling shareholders have
achieved complete independence in personnel, assets, business, institutions, finance and other aspects, and the Company's
board of directors, board of supervisors and internal institutions can operate independently. Since the listing of the
Company, there was no situation that major shareholder occupies the Company's funds and assets.
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(III) About directors and the board of directors
During the reporting period, the board of directors of the Company was able to conscientiously perform its duties,
make prudent and scientific decisions, and effectively implement the relevant decisions of the general meetings of
shareholders in strict accordance with the provisions of the Company Law, the Articles of Association and the Rules of
Procedure of the Board of Directors. During the reporting period, the board of directors held 12 meetings, and the
convening of each meeting met the requirements of relevant regulations. During the reporting period, the Company
completed the election of the new board of directors, and the fourth board of directors was composed of 7 directors,
including 3 independent directors. The selection and appointment procedures shall be carried out in strict accordance with
the provisions of the Articles of Association, and the number and composition of the board of directors of the Company
shall meet the requirements of laws and regulations.
The board of directors has four committees: Strategy Committee, Audit Committee, Nomination Committee and
Remuneration and Assessment Committee. In accordance with the provisions of their respective rules of work, the special
committees shall fulfill their duties diligently, conscientiously and responsibly, and promote the scientific decision-
making and standardized operation of the board of directors.
During the reporting period, the resolutions of the board of directors and each committee of the Company are detailed
in "relevant information of the board of directors held during the reporting period" and "special committees under the
board of directors".
(IV) About supervisors and the board of supervisors
During the reporting period, in line with the attitude of being responsible to the Company and all shareholders, the
board of supervisors conscientiously performed its duties in accordance with the relevant provisions and requirements of
the Company Law, the Articles of Association, the Rules of Procedure of the Board of Supervisors and other relevant
provisions and requirements, attended the general meetings of shareholders and the board of directors, convened the board
of supervisors, and exercised its supervisory powers in accordance with the law, supervised corporate governance,
material matters, financial condition and compliance with the duties performed by directors, managers and other senior
managers of the Company and promoted the legitimate and standardized operation of the Company. In 2022, the Company
held 11 meetings of the board of supervisors, and the convening of each meeting met the requirements of relevant
regulations. During the reporting period, the Company conducted a new election of the board of supervisors, and the
fourth board of supervisors set up three supervisors, including one employee representative supervisor. The structure of
the members of the board of supervisors is reasonable, and the qualifications and selection procedures meet the
requirements of relevant laws, regulations and the Articles of Association.
(V) About information disclosure and transparency
The Company's information disclosure work has been evaluated by the Shanghai Stock Exchange for class A again,
and has been evaluated by class A for four consecutive years. During the reporting period, the Company also implemented
stock option incentive plans, employee stock ownership plans, re-public issuance of convertible bonds and other major
projects. The above projects and other daily temporary announcements are in strict accordance with the Company Law,
the Securities Law, the Measures for the Administration of Information Disclosure of Listed Companies, and the Rules
for the Listing of Stocks on the Shanghai Stock Exchange and other relevant laws and regulations, as well as the Articles
of Association, the Management System for Information Disclosure of Oppein Home Group, and the Regulations on the
Administration of Major Information Submission within Oppein Home Group, fulfill the obligation of information
disclosure, and manage the registration and submission of insider information at various stages according to regulations.
(VI) About investor relations management
Temporary announcements are an important channel for investors to learn about the daily operation of the Company
and the progress of major matters, and periodic reports are an important reference for investors to make value judgments
and investment decisions on the Company's stock. During the reporting period, the Company disclosed periodic reports
and various temporary announcements in accordance with regulations, which would truthfully, accurately, completely,
timely and fairly disclose information that may have a significant impact on the Company's production and operation and
on the Company's stock price. In each periodic report and quarterly report, the Company combines the industry policy
and market dynamics, deeply compares and analyzes the Company's industry development trend, business model, core
competitiveness, business plan and other industry and operational information, and discloses the social responsibility
report (Chinese and English Edition) to the market for the first time in 2022 to further convey the Company's value to
domestic and foreign investors.
After the disclosure of each periodic report and quarterly report, the Company held a performance presentation by
combining live network broadcasting with telephone access, with the active participation of the president of the Company,
the person in charge of finance and other management, so that investors can have a more intuitive and in-depth
understanding of the Company's current operation. The total number of views viewed by online investors at each
performance presentation exceeded 100,000. During the reporting period, the Company won the new wealth annual best
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IR team award, outstanding IR enterprise, performance presentation diligence award, excellent IR team, small and
medium-sized investor relations interaction award and best new media operation award.
In 2022, the Company did not fulfill the review procedures for important matters or timely fulfill the information
disclosure procedures. Whether there are significant differences between corporate governance and laws, administrative
regulations and the provisions of the CSRC on the governance of listed companies; if there are major differences, the
reasons shall be explained
□ Applicable √ Not applicable
II. Specific measures taken by the controlling shareholders and actual controllers of the Company to ensure the
independence of the Company's assets, personnel, finance, institutions and business, as well as solutions, work
progress and follow-up work plans taken to affect the independence of the Company
□ Applicable √ Not applicable
The controlling shareholders, actual controllers and other units under their control engage in the same or similar business
as the Company, as well as the impact of horizontal competition and major changes in interbank competition on the
Company, the solutions taken, the progress of solutions and the follow-up solutions
□ Applicable √ Not applicable
III. Brief introduction to general meetings of shareholders
Disclosure
Search index of designated date
Session Date websites published in the published Resolution of the meeting
resolution in the
resolution
The following proposals were deliberated
and approved:
1. Proposal on Adjusting the Application of
the Company and Its Holding Subsidiaries
for Comprehensive Credit Line from
Banks in 2021-2022
The first 2. Proposal on the First Phase of Excellent
provisional Shanghai Stock Employee Stock Ownership Plan (Draft) of
general February Exchangewww.sse.com.cn, February Oppein Home Group Inc. and its summary
meeting of 16, 2022 Announcement No.: 2022- 17, 2022 3. Proposal on the Measures for the
shareholders 012 Administration of the First Phase of
in 2022 Excellent Employee Stock Ownership Plan
(Draft) of Oppein Home Group Inc.
4. Proposal on Submitting to the General
Meeting of Shareholders to Authorize the
Board of Directors to Handle Matters
Related to the First Phase of the Company's
Excellent Employee Stock Ownership Plan
The following proposals were deliberated
and approved:
1. Report on the Work of the Board of
Directors of the Company in 2021
2. Report on the Work of the Board of
Supervisors of the Company in 2021
3. Proposal on the Annual Report of the
Annual
Shanghai Stock Exchange Company for 2021 and Its Summary
General
May 27, www.sse.com.cn, May 28, 4. Annual Financial Statement of the
Meetings of
2022 Announcement No.: 2022- 2022 Company for 2021
Shareholders
037 5. Financial Budget Report of the
2021
Company for 2022
6. Proposal on Profit Distribution Plan of
the Company for 2021
7. Proposal on Determining the External
Guarantee Quota of the Company and Its
Holding Subsidiaries
8. Proposal on Confirming the
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Remuneration of Non-independent
Directors of the Company in 2021
9. Proposal on the Renewal of Huaxing
Certified Public Accounts LLP (Special
General Partnership) as the Company's
Audit Institution in 2022
The following proposals were deliberated
and approved:
1. Proposal on Allowance for Independent
Directors of the Fourth Board of Directors
2. Proposal on Reformulating the
Management System of Raised Funds of
Oppein Home Group Inc.
The second
3. Proposal on Providing Performance
provisional Shanghai Stock Exchange
Guarantee for Wholly-owned Subsidiaries
general September www.sse.com.cn, September
4. Proposal on Amending Some Provisions
meeting of 29, 2022 Announcement No.: 2022- 30, 2022
of the Articles of Association
shareholders 080
5. Proposal on Amending Some Provisions
in 2022
of the Rules of Procedure of the Board of
Directors of Oppein Home Group Inc.
6. Proposal on the Election of Non-
independent Directors
7. Proposal on the Election of Independent
Directors
8. Proposal on the Election of Supervisors
Preferred shareholders whose voting rights have been restored request the convening of a provisional general meeting of
shareholders
□ Applicable √ Not applicable
Information note of general meetings of shareholders
√ Applicable □ Not applicable
The convening procedures of the above-mentioned general meetings of shareholders shall comply with the relevant
laws, regulations, normative documents such as the Company Law, the Rules for General Meetings and the relevant
provisions of the Articles of Association; the qualifications of the personnel attending the meeting and the convener are
legal and effective; the voting procedures and results of each general meeting of shareholders are legal and effective.
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IV. Directors, supervisors and senior managers
(I) Shareholding changes and remuneration of current and resignation directors, supervisors and senior managers during the reporting period
√ Applicable □ Not applicable
Unit: nos.
Total pre-tax
remuneration Whether to
Number of Number of Increase and Reasons received from obtain
Term started Term ended shares held at shares held at decrease of for the Company remuneration
Name Post (note) Gender Age
on on the beginning the end of the shares in the increase or during the from related
of the year year year decrease reporting parties of the
period (CNY Company
'0,000)
Yao
Chairman Male 58 2022/9/29 2025/9/29 403,200,000 403,200,000 0 / 96.71 No
Liangsong
Tan Vice
Male 58 2022/9/29 2025/9/29 1,444,380 1,444,380 0 / 929.65 No
Qinxing chairman
Yao Vice
Male 53 2022/9/29 2025/9/29 51,578,316 51,578,316 0 / 195.64 No
Liangbai chairman
Liu
Director Male 46 2022/9/29 2025/9/29 16,544 16,544 0 / 36.42 No
Shunping
Independent
Qin Shuo Male 54 2022/9/29 2025/9/29 0 0 0 / 12.83 No
director
Independent
Jiang Qi Male 42 2022/9/29 2025/9/29 0 0 0 / 12.83 No
director
Li Independent
Male 55 2022/9/29 2025/9/29 0 0 0 / 3.75 No
Xinquan director
Chairman of
Zhu
board of Male 44 2022/9/29 2025/9/29 0 0 0 / 33.34 No
Yaojun
supervisors
Zhao Lili Supervisor Female 45 2022/9/29 2025/9/29 0 0 0 / 26.27 No
Employee
Meng
representative Male 37 2022/9/29 2025/9/29 0 0 0 / 9.38 No
Qingwei
supervisor
Wang Financial
Female 51 2022/9/29 2025/9/29 307,251 307,251 0 / 136.27 No
Huan administrator
Ou Secretary of
Female 42 2022/9/29 2025/9/29 800 800 0 / 9.33 No
Yingying the board
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Independent
Chu
director Male 67 2019/9/30 2022/9/29 0 0 0 / 9.08 No
Xiaoping
(resignation)
Chairman of
Zhong the board of
Male 54 2019/9/30 2022/9/29 558,719 558,719 0 / 374.92 No
Huawen supervisors
(resignation)
Supervisor
Xie Hang Male 58 2019/9/30 2022/5/27 0 0 0 / 209.11 No
(resignation)
Employee
representative
Li Lan Female 41 2019/9/30 2022/9/29 0 1,000 1,000 / 74.71 No
supervisor
(resignation)
Secretary of
Yang the board of
Male 58 2019/9/30 2022/9/29 664,617 664,617 0 / 107.91 No
Yaoxing directors
(resignation)
Total / / / / / 457,770,627 457,771,627 1,000 / 2,278.17 /
Notes: 1. The "total pre-tax remuneration received from the Company during the reporting period" in the above Table is calculated on the basis of the actual working hours of directors,
supervisors and senior executives; the difference in total is due to rounding.
2. The "number of shares held at the beginning of the year" in the above Table is based on the actual tenure of directors, supervisors and senior executives.
Name Major work experience
Male, born in August 1964, Chinese nationality, without permanent overseas residency, Han nationality, graduated from Beihang University in 1986, with a
bachelor's degree in machinery manufacturing, a senior manager. He was a teacher of Jingdezhen (Jiangxi Province) Changhe Aircraft Manufacturing Factory
Technical School, director of Guangzhou Office of Yanliang (Xi'an) Wireless Power Plant, chairman of Guangzhou Kexin New Technology Development Co.,
Yao
Ltd., chairman of Oppein Kitchen Cabinet, vice chairman of the Ninth CPPCC National Committee in Baiyun District, Guangzhou, executive chairman of the
Liangsong
China Furniture & Decoration Chamber of Commerce, chairman of the Kitchen Cabinet Professional Committee of the China Furniture & Decoration Chamber
of Commerce, founding chairman of the Guangdong Furnishing Industry Federation, vice chairman of Guangdong Entrepreneurs Council and vice chairman of
Guangzhou General Chamber of Commerce. He is currently the chairman and president of the Company.
Male, born in April 1964, Chinese nationality, without permanent overseas residency, Han nationality, bachelor of aircraft manufacturing engineering. He was
deputy director and senior engineer of Aircraft Technology Department of Jingdezhen (Jiangxi) Changhe Aircraft Industry Co., Ltd., general manager and
Tan Qinxing
manufacturing president of Kitchen and Wardrobe Business Department of Oppein Home Group. He is currently the vice chairman, vice president and executive
president of the Company.
Male, born in April 1969, Chinese nationality, without permanent overseas residency, Han nationality, bachelor of philosophy. He was a teacher of Guangdong
Yao Liangbai Institute for Nationalities (now Guangdong Polytechnic Normal University), director of Administrative Department and assistant president of Oppein Home
Group. He is currently secretary of the party committee, vice chairman and vice president of the Company.
Male, born in August 1976, Chinese nationality, without permanent overseas residency, Han nationality, master of business administration, China Europe
Liu Shunping
International Business School. He once served as general manager of Cabinet Business Department of Oppein Home Group, general manager of marketing of
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Oppein Home Group, general manager of Whole Decoration Large Home Furnishing Business Department of Oppein Home Group and vice president of
Marketing of Oppein Home Group; He is currently the general manager of the Whole Home Marketing Department of Oppein.
Male, born in December 1968, Chinese nationality, without permanent overseas residency, Han nationality, bachelor of arts, doctor of management. He was the
editor in chief of Guangzhou South Wind Window magazine, the editor in chief of Yicai Media Group and the general manager of Shanghai China Business
Qin Shuo
News Media Co., Ltd. He is currently an independent director of the Company, CEO of Shanghai Nalati Network Technology Co., Ltd. and an independent
director of China Industrial Securities International Financial Group Limited.
Male, born in July 1980, Chinese nationality, without permanent overseas residency, Han nationality, bachelor of law. He was a certified public accountant of
Guangdong Branch of Asia Pacific (Group) CPAs (Special General Partnership). He is currently a partner of Guangzhou Chenchang Accounting Firm (General
Jiang Qi
Partnership). In addition to serving as an independent director of the Company, Mr. Jiang Qi is also an independent director of Shenzhen Xinyichang
Technology Co., Ltd. and Guangzhou Sie Consulting Co., Ltd.
Male, born in November 1967, Chinese nationality, without permanent overseas residency, Han nationality, master of arts. He was deputy secretary general of
Guangzhou Municipal Committee, secretary of Shufu County Committee, member of the Standing Committee of Qingyuan Municipal Committee, executive
vice mayor, member of the Party Group and deputy director of Human Resources and Social Security Department of Guangdong Province, vice chairman of
Li Xinquan
Guangdong Federation of Trade Unions (part-time) and deputy general manager of CAS Venture Capital; He is currently an independent director of the
Company, the chairman and general manager of Guoke Life Sciences (Guangdong) Co., Ltd., and the chairman of Guoao (Guangdong) Science and Technology
Co., Ltd.
Male, born in January 1978, Chinese nationality, without permanent overseas residency, Han nationality, bachelor of engineering. He was deputy general
Zhu Yaojun manager of bathroom manufacturing of Oppein Home Group, general manager of cabinet manufacturing of Oppein Home Group and general manager of
Integrated Home Business Department of Oppein Home Group; He is currently the chairman and vice president of the board of supervisors of the Company.
Female, born in December 1977, Chinese nationality, without permanent overseas residency, Han nationality, bachelor of economics and master of business
Zhao Lili administration. He was the chief financial officer of Xiwei (China) Investment Co., Ltd. in China; He is currently a supervisor of the Company and an
administrative assistant to the president of the Group.
Male, born in June 1985, Chinese nationality, without permanent overseas residency, Manchu, bachelor of law. He was the legal manager of Honz
Meng Qingwei
Pharmaceutical Co., Ltd.; He is currently the employee representative supervisor, company lawyer and Legal Department manager of Oppein Home Group.
Female, born in November 1971, Chinese nationality, without permanent overseas residency, bachelor's degree, major in financial management. He was deputy
Wang Huan financial manager, financial manager and deputy general manager of Financial Center of Oppein Home, and is currently the general manager of Financial Center
of the Company.
Female, born in August 1980, Chinese nationality, without permanent overseas residency, Han nationality, master's degree, bachelor of law and master of
Ou Yingying business administration. He was the chief of the Securities Department of Guangzhou Iron and Steel Co., Ltd. and the manager of the Securities Affairs
Department of Oppein Home Group. He is currently the secretary of the board of directors and the director of the Securities Affairs Department of the Company.
Male, born in September 1955, Chinese nationality, without permanent overseas residency, Han nationality, doctor of management, professor and doctoral
supervisor. He was once a professor, vice president and dean of Business School of Shantou University, an independent director of Guangzhou Baiyunshan
Chu Xiaoping Pharmaceutical Holdings Co., Ltd., an independent director of Lafang Household Chemicals Co., Ltd., a professor and doctoral supervisor of Lingnan College
(resignation) Sun Yat-Sen University. During the reporting period, he served as an independent director of the third board of directors of the Company, an independent
director of Guangdong Shengyi Technology Co., Ltd., an independent director of Guangzhou Golden Sea Professional Equipment Ltd. and an independent
director of Times Neighborhood Holdings Limited.
Zhong Born in March 1968, Chinese nationality, without permanent overseas residency, Han nationality, bachelor of machinery manufacturing technology and
Huawen equipment. He was the technical director of Changzheng Machinery Factory of Sichuan Academy of Aerospace Technology, the factory director of Hong Kong
(resignation) Qingfa Lighting Co., Ltd., the manager of the Production Department of Jiangmen Yeebo Semiconductor Co., Ltd. and the general manager of Oppein Home
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Kitchen Cabinet Manufacturing. During the reporting period, he served as the chairman of the third board of supervisors of the Company and is currently the
vice president of the Group.
Male, born in August 1964, Chinese nationality, without permanent overseas residency, Han nationality, double bachelor's degree in literature and law. He
Xie Hang
worked in the Meizhou municipal government department. During the reporting period, he served as a supervisor of the third board of supervisors of the
(departing)
Company.
Female, born in December 1981, Chinese nationality, without permanent overseas residency, Han nationality, once served as director of property control of
Li Lan Oppein Home Kitchen Cabinet, director of administrative and internal affairs of Supply Chain Management Department and manager of Supply Chain Planning,
(resignation) Management and Operation Department. During the reporting period, he served as the employee representative supervisor of the third board of supervisors and
is currently the manager of Qingyuan Purchase Department.
Male, born in April 1964, Chinese nationality, without permanent overseas residency, Han nationality, bachelor's degree, master's degree in business
administration, engineer, senior economist. He was an engineer of the Planning and Control Department of Guangzhou Iron and Steel Co., Ltd., secretary of the
Yang Yaoxing Party Committee Office, deputy manager of the Securities Department, deputy director of the General Manager Office, director of the Work Department of the
(resignation) board of directors and secretary of the board of directors of the Company. During the reporting period, he served as secretary of the board of directors of the
third board of directors and is currently the deputy general manager of administration, the chairman of the Labor Union and the instructor of master's degree
students of Guangzhou University.
Other information note
√ Applicable □ Not applicable
In accordance with the Company Law of the People's Republic of China, the Securities Law of the People's Republic of China and other relevant laws and regulations, as well as
the Articles of Association of Oppein Home Group Inc., the Company held the second provisional general meeting of shareholders in 2022 on September 29, 2022, at which the directors
of the fourth board of directors and non-employee representative supervisors of the fourth board of supervisors of the Company were elected. On the same day, the Company held the
first meeting of the fourth board of directors and the first meeting of the fourth board of supervisors, completed the election of chairman and vice chairman of the fourth board of
directors and chairman of supervisor meeting, confirmed the composition of special committees of the board of directors and appointed senior managers. For details, see the
Announcement of Oppein Home on the Completion of the General Election of the Board of Directors and the Board of Supervisors and the Appointment of Senior Managers
(announcement No.: 2022-083).
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(II) Current and resignation directors, supervisors and senior managers during the reporting period
1. Employment in shareholders
□ Applicable √ Not applicable
2. Employment in other companies
√ Applicable □ Not applicable
Positions held in
Name of employee Name of other companies Term started on Term ended on
other companies
Guangzhou Ouerben
Yao Liangsong Supervisor March 2016 -
Investment Co., Ltd.
Beijing Jiaju Technology
Yao Liangsong Chairman January 2019 -
Co., Ltd.
Legal
Meizhou Yuanling
representative,
Yao Liangbai Investment Industry Co., August 2018 -
manager and
Ltd.
executive director
Guangzhou Red Star
Yao Liangbai Macalline Expo Home Plaza Chairman November 2019 -
Co., Ltd.
Zhongju Hejia (Beijing)
Yao Liangbai Investment Fund Director October 2017 -
Management Co., Ltd.
Legal
Shanghai Nalati Network
Qin Shuo representative and September 2015 -
Technology Co., Ltd.
executive director
China Taiping Insurance
Qin Shuo Director February 2019 -
Holdings Company Limited
Ningbo Lanfan Jingshuo Legal
Qin Shuo Venture Capital Partnership representative and March 2017 -
(Limited Partnership) partner
Shanghai Jiai Hospital
Qin Shuo Director December 2017 -
Management Co., Ltd.
China Industrial Securities
Independent
Qin Shuo International Financial July 2016 -
director
Group Limited
Guangzhou Mircrodream
Qin Shuo Media Culture Director December 2015 -
Communication Co., Ltd.
Qin Shuo Wind Information Co., Ltd. Director October 2007 -
Guangzhou Wan'gong
Qin Shuo Enterprise Management Director February 2018 -
Consulting Co., Ltd.
Wanxun Network
Qin Shuo Technology (Guangzhou) Supervisor March 2018 -
Co., Ltd.
Guangzhou Yuanchuan
Qin Shuo Information Technology Supervisor September 2016 -
Co., Ltd.
Guangzhou Chenchang
Jiang Qi Accounting Firm (General Executive partner August 2018 -
Partnership)
Guangzhou Runyan
Jiang Qi Information Technology Supervisor October 2021 -
Co., Ltd.
Guangdong Zhenyuan
Jiang Qi Private Equity Fund Supervisor April 2021 -
Management Co., Ltd.
Guangzhou Runyan
Jiang Qi Supervisor October 2021 -
Enterprise Management
53/259
2022 Annual Report
Positions held in
Name of employee Name of other companies Term started on Term ended on
other companies
Consulting Co., Ltd.
Guangzhou Runyan
Jiang Qi Supervisor January 2018 -
Consulting Co., Ltd.
Guangzhou Zhonggong
Jiang Qi Intellectual Property Service Supervisor April 2017 -
Co., Ltd.
Shenzhen Xinyichang Independent
Jiang Qi June 2019 -
Technology Co., Ltd. director
Guangdong Phonpa Home Independent
Jiang Qi August 2020 -
Technology Co., Ltd. director
Guangzhou Tongxin Sports Independent
Jiang Qi December 2020 -
Co., Ltd. director
Guangdong Tongli Independent
Jiang Qi July 2020 -
Customization Corp Ltd. director
Huizhou Dongjin Independent
Jiang Qi March 2022 -
Agriculture Co., Ltd. director
Guangzhou Sie Consulting Independent
Jiang Qi March 2022 -
Co., Ltd. director
Chu Xiaoping Guangdong Shengyi Independent
April 2017 -
(resignation) Technology Co., Ltd. director
Chu Xiaoping Guangzhou Golden Sea Independent
July 2019 July 2022
(resignation) Professional Equipment Ltd. director
Guangzhou Baiyunshan
Biological Products Co.,
Chu Xiaoping Ltd. (formerly known as
Director September 2020 -
(resignation) Guangzhou Nuocheng
Biological Products Co.,
Ltd.)
Chu Xiaoping Times Neighborhood Independent
December 2019 -
(resignation) Holdings Limited director
Explanation of
employment in other None
units
(III) Remuneration of directors, supervisors and senior managers
√ Applicable □ Not applicable
The remuneration of non-independent directors, supervisors and senior
managers of the Company is related to their employment in the Company. The
Company shall implement it in accordance with the relevant systems and
regulations such as the Remuneration Management System of Oppein Home
Group, the Measures for the Administration of Remuneration and Performance
Decision-making procedures for Appraisal of Directors (Non-independent directors) and Senior Managers of
remuneration of directors, the Company, and its remuneration shall be submitted to the board of directors
supervisors and senior managers and the general meeting of shareholders of the Company for deliberation and
determination after approval by the Remuneration and Assessment Committee
of the Company; non-independent directors and supervisors of the Company
have no post allowance; the allowance for independent directors was
deliberated and determined by the second provisional general meeting in 2019
and the second provisional general meeting in 2022.
The remuneration of directors, supervisors and senior managers of the
Company is related to their employment in the Company, and the remuneration
is determined by combining basic remuneration with performance
Basis for determining the
remuneration. The basic remuneration is determined by referring to the
remuneration of directors,
remuneration level of the same industry and combining the position, ability and
supervisors and senior managers
work intensity; performance compensation is based on the remuneration
management system, combined with the Company's performance, personal
performance, work completion and contribution. The allowance for
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2022 Annual Report
independent directors shall be determined by reference to the allowance level
for independent directors of listed companies and other factors.
Actual payment of remuneration of The remuneration of non-independent directors, supervisors and senior
directors, supervisors and senior managers of the Company shall be paid on a monthly basis; the allowance for
managers independent directors is paid quarterly.
Total actual remuneration received
by all directors, supervisors and
CNY 22.7817 million
senior managers at the end of the
reporting period
(IV) Changes in directors, supervisors and senior managers of the Company
√ Applicable □ Not applicable
Name Positions held Changes Reasons for changes
Liu Shunping Non-independent director Election General election
Li Xinquan Independent director Election General election
Chu Xiaoping Independent director Resignation General election
Chairman of board of
Zhu Yaojun Election General election
supervisors
Zhao Lili Supervisor Election General election
Employee representative
Meng Qingwei Election General election
supervisor
Chairman of board of
Zhong Huawen Resignation Term expires
supervisors
Xie Hang Supervisor Resignation Resigned on May 27, 2022
Employee representative
Li Lan Resignation Term expires
supervisor
Yang Yaoxing Secretary of the board Resignation Term expires
Ou Yingying Secretary of the board Appointment General election
(V) Explanation of punishment by securities regulatory authorities in the past three years
□ Applicable √ Not applicable
(VI) Others
□ Applicable √ Not applicable
V. Relevant information of the board of directors held during the reporting period
Session Date Resolution of the meeting
The following proposals were deliberated and approved: 1. Proposal on
Adjusting the Plan for the Public Issuance of Convertible Corporate
Bonds by the Company; 2. Proposal on the Plan for the Public Issuance of
Convertible Corporate Bonds by the Company (Revised Draft); 3.
Proposal on the Feasibility Analysis Report on the Use of Funds Raised
by the Company's Public Issuance of Convertible Corporation Bonds
(Revised Draft); 4. Bill on the Dilution of Spot Returns and Filling
Measures for the Public Issuance of Convertible Corporate Bonds by the
The 20th meeting of Company and the Commitments of Relevant Subjects (Revised Draft); 5.
January 24,
the third board of Proposal on Adjusting the Application of the Company and Its Holding
2022
directors Subsidiaries for Comprehensive Credit Line from Banks in 2021-2022; 6.
Proposal on the First Phase of Excellent Employee Stock Ownership Plan
(Draft) of Oppein Home Group Inc. and its summary; 7. Proposal on the
Measures for the Administration of the First Phase of Excellent Employee
Stock Ownership Plan (Draft) of Oppein Home Group Inc.; 8. Proposal
on Submitting to the General Meeting of Shareholders to Authorize the
Board of Directors to Handle Matters Related to the First Phase of the
Company's Excellent Employee Stock Ownership Plan; 9. Proposal on
Convening the First Provisional General Meeting in 2022.
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2022 Annual Report
The following proposals were deliberated and approved: 1. Report on the
Work of the Board of Directors of the Company in 2021; 2. Business
Report of the General Manager of the Company in 2021; 3. Report on the
Work of Independent Directors of the Company in 2021; 4. Report on the
Performance of the Audit Committee of the Board of Directors of the
Company in 2021; 5. Proposal on the Annual Report of the Company for
2021 And Its Summary; 6. Annual Financial Statement of the Company
for 2021; 7. Financial Budget Report of the Company for 2022; 8.
Proposal on Profit Distribution Plan of the Company for 2021; 9. Internal
The 21st meeting of
Control Evaluation Report of the Company in 2021; 10. Proposal on
the third board of April 21, 2022
Determining the External Guarantee Quota of the Company and Its
directors
Holding Subsidiaries; 11. Proposal on Determining the Amount of Cash
Management by the Company and Its Holding Subsidiaries Using Their
Own Funds; 12. Proposal on Confirming the Remuneration of Non-
independent Directors of the Company in 2021; 13. Proposal on
Confirming the Remuneration of Senior Managers of the Company in
2021; 14. Proposal on the Renewal of Huaxing Certified Public Accounts
LLP (Special General Partnership) as the Company's Audit Institution in
2022; 15. Social Responsibility Report 2021; 16. Proposal on Convening
the Annual General Meeting of Shareholders of the Company in 2021.
The 22nd meeting of
The Proposal on the First Quarter Report of the Company in 2022 was
the third board of April 28, 2022
deliberated and approved
directors
The 23rd meeting of
The Proposal on Granting Reserved Stock Options for the 2021 Stock
the third board of June 23, 2022
Option Incentive Plan to Incentive Targets was deliberated and approved
directors
The following proposals were deliberated and approved: 1. Proposal on
Amending the 2021 Stock Option Incentive Plan of Oppein Home Group
Inc. and Some Provisions of Its Summary; 2. Proposal on Adjusting the
Exercise Price of the Company's Stock Option Incentive Plan in 2021; 3.
The 24th meeting of
Proposal on the Achievement of Exercise Conditions in the First Exercise
the third board of July 13, 2022
Period of the First Grant of Stock Options under the Company's Stock
directors
Option Incentive Plan in 2021; 4. Proposal on Cancellation of Some Stock
Options First Granted by the Company's Stock Option Incentive Plan in
2021; 5. Proposal on Reformulating the Investor Relations Management
System of Oppein Home Group Inc.
The following proposals were deliberated and approved: 1. Proposal on
Further Clarifying the Plan for the Public Issuance of Convertible
The 25th meeting of Corporation Bonds by the Company; 2. Proposal on the Public Issuance
the third board of August 2, 2022 and Listing of Convertible Corporation Bonds by the Company; 3.
directors Proposal on Opening A Special Account for Raising Funds by Publicly
Issuing Convertible Corporation Bonds and Signing A Regulatory
Agreement.
The 26th meeting of
August 19, Proposal on the Use of Idle Raised Funds for Cash Management was
the third board of
2022 deliberated and approved
directors
The 27th meeting of
August 29, Proposal on the Company's Semi Annual Report for 2022 And Its
the third board of
2022 Summary was deliberated and approved
directors
The following proposals were deliberated and approved: 1. Proposal on
the General Election of the Board of Directors; 2. Proposal on Allowance
for Independent Directors of the Fourth Board of Directors; 3. Proposal
on reformulating the fund raising management system of Europa home
furnishing Group Co., Ltd; 4. Proposal on Amending Some Provisions of
The 28th meeting of
September 13, the Guidelines for the Management of Shareholdings and Changes of
the third board of
2022 Directors, Supervisors and Senior Managers of Oppein Home Group Inc.;
directors
5. Proposal on Providing Performance Guarantee for Wholly-owned
Subsidiaries; 6. Proposal on Amending Some Provisions of the Articles of
Association; 7. Proposal on Amending Some Provisions of the Rules of
Procedure of the Board of Directors of Oppein Home Group Inc.; 8.
Proposal on Convening the Second Provisional General Meetings of
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2022 Annual Report
Shareholders the Company in 2022.
The following proposals were deliberated and approved: 1. Proposal on
Electing Yao Liangsong as Chairman of the Fourth Board of Directors of
the Company; 2. Proposal on Electing Tan Qinxing as Vice Chairman of
the Fourth Board of Directors of the Company; 3. Proposal on Electing
Yao Liangbai as Vice Chairman of the Fourth Board of Directors of the
Company; 4. Proposal on Renewing Yao Liangsong as General Manager
The 1st meeting of
September 29, (President) of the Company; 5. Proposal on Renewing Tan Qinxing as
the fourth board of
2022 Deputy General Manager (Vice President) of the Company; 6. Proposal
directors
on the Appointment of Yao Liangbai as Deputy General Manager (Vice
President) of the Company; 7. Proposal on Renewing Wang Huan as the
Financial Administrator of the Company; 8. Proposal on the Appointment
of Ou Yingying as Secretary of the Board of Directors of the Company; 9.
Proposal on the Election of Members of Special Committees under the
Fourth Board of Directors.
The following proposals were deliberated and approved: 1. Report of the
The 2nd meeting of Third Quarter of 2022 of Oppein Home Group Inc.; 2. Proposal on the
October 27,
the fourth board of Use of Raised Funds to Replace Self-raised Funds Invested in Advance; 3.
2022
directors Proposal on the Scheme of Repurchasing Shares by Means of Centralized
Bidding Transactions.
The 3rd meeting of
November 10, Proposal on Not Downward Amending the Conversion Price of "Oppein
the fourth board of
2022 22 Convertible Bonds" was deliberated and adopted
directors
VI. Performance of directors' duties
(I) Directors' attendance in board meetings and general meetings of shareholders
Attendance
in the
general
Attendance in the board of directors
meetings of
shareholder
s
Independen
Name of Number Whether
t director or
director of board to fail to Number of
not Number Number of Number
of Number attend attendance
of attendance by of
director of meeting in general
attendanc means of attendanc
s absence s in meetings of
e in communicatio e by
meeting s person shareholder
person n proxy
s due twice in s
this year a row
Yao
Liangson No 12 12 7 0 0 No 2
g
Tan
No 12 12 7 0 0 No 2
Qinxing
Yao
No 12 12 7 0 0 No 3
Liangbai
Liu
No 3 3 2 0 0 No 1
Shunping
Qin Shuo Yes 12 12 12 0 0 No 2
Jiang Qi Yes 12 12 11 0 0 No 2
Li
Yes 3 3 2 0 0 No 1
Xinquan
Chu
Yes 9 9 9 0 0 No 0
Xiaoping
Instructions for failing to attend the meeting of the board of directors in person for two consecutive times
□ Applicable √ Not applicable
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2022 Annual Report
Number of meeting of the board of directors held during 12
the year
Including: number of on-site meetings 0
Number of meetings held by means of communication 7
Number of meetings held on site in combination with 5
communication
(II) Objections raised by directors to relevant matters of the Company
□ Applicable √ Not applicable
(III) Other
□ Applicable √ Not applicable
VII. Special committees under the board of directors
√ Applicable □ Not applicable
(1) Members of special committees under the board of directors
Category of special committee Name of member
Audit Committee Jiang Qi, Yao Liangbai, Li Xinquan
Nomination Committee Qin Shuo, Tan Qinxing, Li Xinquan
Remuneration and Assessment
Li Xinquan, Jiang Qi, Liu Shunping
Committee
Strategy Committee Yao Liangsong, Yao Liangbai, Qin Shuo
(2) During the reporting period, the Audit Committee held 4 meetings
Important
Other
comments
Date Meeting content performance
and
of duties
suggestions
Proposal on the Annual Report of the Company for 2021 and Its Expressed
Summary, Internal Control Evaluation Report of the Company in 2021 explicit
April 21,
and Proposal on the Renewal of Huaxing Certified Public Accounts agreement /
2022
LLP (Special General Partnership) as the Company's Audit Institution with each
in 2022 were deliberated and approved proposal
Expressed
April 28, The Proposal on the First Quarter Report of the Company in 2022
explicit /
2022 was deliberated and approved
agreement
Expressed
August 29, Proposal on the Company's Semi Annual Report for 2022 And Its
explicit /
2022 Summary was deliberated and approved
agreement
Expressed
October Report of the Third Quarter of 2022 of Oppein Home Group Inc. was
explicit /
27, 2022 deliberated and approved
agreement
(3) During the reporting period, the Remuneration and Assessment Committee held 5 meetings
Important
Other
comments
Date Meeting content performance
and
of duties
suggestions
Proposal on the First Phase of Excellent Employee Stock Ownership
Expressed
Plan (Draft) of Oppein Home Group Inc. and Its Summary and Related
explicit
January Proposal on the Measures for the Administration of the First Phase of directors
agreement
24, 2022 Excellent Employee Stock Ownership Plan (Draft) of Oppein Home recuse from
with each
Group Inc. of Oppein Home Group Inc. were deliberated and voting
proposal
approved
Proposal on Confirming the Remuneration of Non-independent Expressed Related
April 21,
Directors of the Company in 2021 and Proposal on Confirming the explicit directors
2022
Remuneration of Senior Managers of the Company in 2021 were agreement recuse from
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2022 Annual Report
deliberated and approved with each voting
proposal
Proposal on the List of Incentive Targets Reserved for Grant under the Expressed
June 23,
Company's Stock Option Incentive Plan in 2021 was deliberated and explicit /
2022
approved agreement
Proposal on the Achievement of Exercise Conditions in the First Related
Expressed
July 13, Exercise Period of the First Grant of Stock Options under the directors
explicit
2022 Company's Stock Option Incentive Plan in 2021 was deliberated and recuse from
agreement
approved voting
Expressed
September Proposal on Allowance for Independent Directors of the Fourth Board
explicit /
13, 2022 of Directors was deliberated and approved
agreement
(4) During the reporting period, the Nomination Committee held 1 meeting
Important
Other
comments
Date Meeting content performance
and
of duties
suggestions
Expressed
September Proposal on the General Election of the Board of Directors was
explicit /
13, 2022 deliberated and approved
agreement
(5) Details of objections
□ Applicable √ Not applicable
VIII. Description of risks found by the board of supervisors
□ Applicable √ Not applicable
The board of supervisors has no objection to the supervision matters during the reporting period.
IX. Employees of the parent company and major subsidiaries at the end of the reporting period
(I) Employees
Number of active employees of the parent company 3,836
Number of active employees in major subsidiaries 20,691
Total number of active employees 24,527
Number of retired employees to be borne by the parent
63
company and major subsidiaries
Specialty composition
Specialty composition category Number of people of specialty composition
Production personnel 15,525
Sales personnel 3,231
Technical personnel 3,024
Financial personnel 174
Administrative personnel 2,573
Total 24,527
Education background
Education background category Quantity (person)
Master's degree and above 147
Bachelor's degree 4,343
Junior college 3,970
High school and technical secondary school 1,434
Junior school or below 14,633
Total 24,527
(II) Remuneration policy
√ Applicable □ Not applicable
The Company's overall remuneration policy is closely related to the achievement of the Company's strategic
objectives. In order to give full play to the incentive of Remuneration, the Company implements different incentive
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2022 Annual Report
policies for employees of different categories and positions. The remuneration of employees not only reflects the value
of the post, but also is closely related to the achievement of personal performance and the performance objectives of their
business scope. By establishing a remuneration management and performance appraisal system, the Company fully
mobilizes the enthusiasm of employees, so that the actual income of employees is highly related to the Company's
performance, personal performance and incentive objectives. The higher the target achievement rate, the higher the
income of employees, and vice versa. The income level of the Company's employees is highly competitive in the market,
and the remuneration payment meets the requirements of relevant national laws and regulations.
(III) Training plan
√ Applicable □ Not applicable
In 2022, according to the overall deployment of Human Resources Center and related key work requirements, the
Group's training work continued to rely on the "6+1" model, made every effort to create a "double engine" for training
and development, refined talent training, and further promoted the construction of talent echelon; through innovative
empowerment, it focused on the pain points of marketing and manufacturing business, quickly builded a business talent
training system close to business and efficient empowerment, and helped business units improve their ability to undertake
business plans to better support the realization of performance objectives; it continuously improved the "whole process,
targeted and three-dimensional" talent learning and development ecosystem with perfect system and remarkable results,
and by taking talents as the cornerstone, business as the driving force and value as the orientation, it supported the
realization and transcendence of organizational objectives and personal achievements.
In 2023, the training work took "talent delivery, organizational management upgrading and comprehensive market-
oriented operation" as its new orientation, focused on the three key words of "talent empowerment, skill empowerment
and business empowerment", comprehensively cultivated the internal training system, and constantly explored external
services, so as to build a more systematic, scientific, precise and market-oriented training and development work.
Internally, it strengthened the basic training management by means of "rammed earth wall", realized the upgrading of
internal management system in line with the times, and gradually covered the dealer system and enabled terminals; it
carried out the business of "entering Oppein" and "grading and certification of skilled talents" to achieve the
comprehensive output of curriculum system, evaluation system and examination system, flexibly carried out various
practical training projects, improved the quality of internal talent supply for key positions, efficiently enabled business
development, and enhanced the internal "hematopoietic" ability of enterprises.
(IV) Labor outsourcing
□ Applicable √ Not applicable
X. Profit distribution or capital reserve conversion plan
(I) Formulation, implementation or adjustment of cash dividend policy
√ Applicable □ Not applicable
1. Formulation of profit distribution policy
In order to improve the Company's scientific, sustained, stable and transparent dividend policy and supervision
mechanism, and actively and effectively return investors, according to relevant laws and regulations, the Company has
formulated relevant provisions on profit distribution in the Articles of Association, clarified the specific conditions,
proportion, distribution form and stock dividend distribution conditions of the Company's profit distribution, especially
cash dividend, and clarified the decision-making procedures and mechanisms of the Company's profit distribution, and
the adjustment principle of profit distribution policy, which strengthens the protection mechanism of the rights and
interests of small and medium-sized investors.
2. Profit distribution decisions for the year
The Company intends to distribute a total cash dividend of CNY 1.075 billion (tax inclusive) to all shareholders
based on the total share capital on the registration date of equity distribution less the number of shares in the Company's
share repurchase account, accounting for 40% of the net profit attributable to shareholders of the parent company in 2022.
If the total share capital of the Company changes before the equity registration date for the implementation of equity
distribution, the Company intends to maintain the total profit distribution unchanged and adjust the profit distribution
ratio per share accordingly.
(II) Special instructions on cash dividend policy
√ Applicable □ Not applicable
Whether it conforms to the provisions of the Articles of Association or the requirements of √ Yes □ No
the resolution of the general meetings of shareholders
Are the dividend standard and proportion clear √ Yes □ No
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2022 Annual Report
Are the relevant decision-making procedures and mechanisms complete √ Yes □ No
Whether independent directors perform their duties and play their due role √ Yes □ No
Whether minority shareholders have the opportunity to fully express their opinions and √ Yes □ No
demands, and whether their legitimate rights and interests have been fully protected
(III) If it makes profits during the reporting period and the profits available to shareholders of the parent company
are positive, but no cash profit distribution plan is put forward, the Company shall disclose in detail the
reasons and the purpose and use plan of the undistributed profits
□ Applicable √ Not applicable
(IV) Profit distribution and conversion of capital reserve into equity during the reporting period
√ Applicable □ Not applicable
Unit: CNY
Number of bonus shares per 10 shares (share) 0
Dividend per 10 shares (CNY) (tax inclusive) 17.68
Increase per 10 shares (share) 0
Cash dividend amount (tax inclusive) 1,075,370,193.40
Net profit attributable to ordinary shareholders of listed
2,688,425,483.50
companies in the consolidated statement of dividend year
Ratio to net profit attributable to ordinary shareholders
40
of listed companies in the consolidated statements (%)
Amount of shares repurchased in cash to be included in
0
the cash dividend
Total dividend amount (tax inclusive) 1,075,370,193.40
Ratio of the total dividend amount to net profit
attributable to ordinary shareholders of listed companies 40
in the consolidated statements (%)
Notes: 1. Parameter basis for calculation of relevant data in the above Table: (1) On March 31, 2023, the total share
capital of the Company was 609,152,327 shares; (2) On March 31, 2023, the Company repurchased 837,180 shares in the
special account for shares;
2. If the total share capital of the Company changes before the equity registration date for the implementation of
equity distribution, the Company intends to maintain the total profit distribution unchanged and adjust the profit
distribution ratio per share accordingly.
XI. The situation and impact of the Company's equity incentive plan, employee stock ownership plan or other
employee incentive measures
(I) Relevant incentives have been disclosed in the interim announcement and there is no progress or change in the
follow-up implementation
√ Applicable □ Not applicable
Overview Query index
The Announcement of Oppein Home on
Granting Reserved Stock Options for the
On June 23, 2022, the reserved stock options of the 2021 stock 2021 Stock Option Incentive Plan to
option incentive plan were granted to the incentive targets, with a Incentive Targets (2022-039) and the
number of 1,232,055 granted, a grant price of CNY 146.97 yuan per Announcement of the Resolution of the 15th
share and 174 people granted. Meeting of the Third Board of Supervisors of
Oppein Home (2022-040) disclosed on the
website of Shanghai Stock Exchange.
The 24th meeting of the third board of directors was held on July 13, Announcement on the Resolution of the 24th
2022. The following proposals were deliberated and approved: (1) Meeting of the Third Board of Directors of
Proposal on Amending the 2021 Stock Option Incentive Plan of Oppein Home (2022-045), Announcement on
Oppein Home Group Inc. and Some Provisions of Its Summary; (2) the Summary of Oppein Home's 2021 Stock
Proposal on Adjusting the Exercise Price of the Company's Stock Option Incentive Plan (Revised Draft) (2022-
Option Incentive Plan in 2021, agreeing that the exercise price of the 046), Announcement on the Adjustment of
incentive plan will be adjusted from CNY 146.97 per share to CNY the Exercise Price of Oppein Home's 2021
145.22 per share; (3) Proposal on the Achievement of Exercise Stock Option Incentive Plan (2022-047),
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2022 Annual Report
Conditions in the First Exercise Period of the First Grant of Stock Announcement of Oppein Home on the First
Options under the Company's Stock Option Incentive Plan in 2021, Exercise Period of the First Grant of Stock
agreeing that 439 incentive targets meet the exercise conditions in Options under the Company's Stock Option
the first exercise period and 1,042,576 stock options are exercisable. Incentive Plan in 2021 Meeting the Exercise
This stock option adopts the independent exercise model, and the Conditions (2022-048), Announcement of
exercisable date is from the date of completion of relevant Oppein Home on the Cancellation of Some
procedures; (4) Proposal on Cancellation of Some Stock Options Stock Options First Granted under the
First Granted by the Company's Stock Option Incentive Plan in Company's Stock Option Incentive Plan in
2021, agreeing to cancel a total of 1,841,982 stock options. After the 2021 (2022-049), Announcement of
completion of the cancellation, the incentive targets first granted by Resolutions of the 16th Meeting of the Third
the Company's stock option incentive plan in 2021 will be changed Board of Supervisors of Oppein Home
from 500 to 452; the number of initial stock options granted will be (2022-050)
changed from 5,290,951 to 3,448,969.
Announcement of Oppein Home on the
Completion of the Cancellation of Some
The Company completed the cancellation of 1,841,982 first granted Stock Options First Granted by the
stock options. Company's Stock Option Incentive Plan in
2021 (2022-051) disclosed on the website of
Shanghai Stock Exchange
On July 27, 2022, the registration of reserved grant was completed.
During the period from the date of this reserved grant to the Announcement of Oppein Home on the
completion of the registration of stock option grant, three incentive Completion of Registration of Reserved
targets lost their qualifications to participate in the incentive plan due Grant Stock Options for 2021 Stock Option
to resignation and other reasons, involving a total of 21,358 stock Incentive Plan (2022-053) disclosed on the
options. The actual number of grants was 171, and the actual number website of Shanghai Stock Exchange
of shares granted was 1,210,697.
On September 21, 2022, 439 incentive targets who met the exercise Announcement on the Implementation of the
conditions in the first exercise period of the first grant of options First Exercise Period of the First Grant of
under the Company's stock option incentive plan in 2021 were Stock Options under the Company's Stock
eligible for exercise. The exercise method was independent exercise, Option Incentive Plan in 2021 (2022-077)
the exercise price was CNY 145.22 per share, and the number of disclosed on the website of Shanghai Stock
exercises was 1,042,576. Exchange
During the period from September 21, 2022 to September 30, 2022,
Announcement on Quarterly Independent
the number of exercise and completion of share transfer registration
Exercise Results and Share Changes of the
of stock option incentive targets was 6 shares, accounting for
Company's Stock Option Incentive Plan in
0.0006% of the total number of exercisable stock options in that
2021 (2022-084)
period.
Combined with the disclosure plan of the Company's third quarter Indicative Announcement of Oppein Home
report in 2022, the Company's restricted exercise period is from on the Restricted Exercise Period of the
October 18, 2022 to October 27, 2022, during which all incentive Company's Stock Option Incentive Plan in
targets will be restricted. 2021 (2022-085)
Combined with the disclosure plan of the Company's annual Indicative Announcement of Oppein Home
performance forecast for 2022, the restricted exercise period is from on the Restricted Exercise Period of the
January 7, 2023 to January 16, 2023, during which all incentive Company's Stock Option Incentive Plan in
targets will be restricted. 2021 (2022-105)
(II) Incentives not disclosed in the provisional announcement or with follow-up progress
Equity incentives
□ Applicable √ Not applicable
Others
□ Applicable √ Not applicable
Employee stock ownership plans
□ Applicable √ Not applicable
Other incentives
□ Applicable √ Not applicable
(III) Equity incentives granted to directors and senior managers during the reporting period
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2022 Annual Report
√ Applicable □ Not applicable
Unit: share
Number
Number of Stock Number Market
of stock
new stock Exercisable option Exercise of stock price at
options
options shares exercise price of options the end
held at
Name Post granted during the shares stock held at of the
the
during the reporting during the options the end reporting
beginning
reporting period reporting (CNY) of the period
of the
period period period (CNY)
year
Vice
Tan
chairman and 94,923 0 23,023 0 145.22 70,484 121.53
Qinxing
vice president
Liu
Director 47,462 0 14,160 0 145.22 37,891 121.53
Shunping
Deputy
general
manager of
Yang
administration 25,629 0 3,520 0 145.22 16,334 121.53
Yaoxing
and secretary
of the board
of directors
Ou Secretary of
9,018 0 2,273 0 145.22 6,782 121.53
Yingying the board
Total / 177,032 0 42,976 0 / 131,491 /
(IV) Evaluation mechanism for senior managers during the reporting period, as well as the establishment and
implementation of incentive mechanism
√ Applicable □ Not applicable
Combined with the Company's business philosophy and management model, the Company has established a set of
fair, transparent and effective performance evaluation standards and incentive and restraint mechanisms. During the
reporting period, the Company conducted a comprehensive evaluation of senior managers in accordance with the relevant
systems and regulations such as the Remuneration Management System of Oppein Home Group, the Performance
Management Regulations of Oppein Home Group, the Measures for the Administration of Remuneration and
Performance Appraisal of Directors (Non-independent directors) and Senior Managers of the Company. The Human
Resources Center of the Group will comprehensively formulate its remuneration plan for this year in combination with
the Company's performance, the completion of senior managers' personal performance work and their contribution, which
will be reviewed and approved by the Company's Remuneration and Assessment Committee and then submitted to the
board of directors and general meeting of shareholders the Company for deliberation and determination.
XII. Construction and implementation of internal control system during the reporting period
√ Applicable □ Not applicable
In order to continuously promote the implementation of the internal control system and the improvement of the
internal control management level, the Company takes the management of the business approval process as the starting
point, and realizes the integration of business, system, process and IT by implementing the information control process
and implementation, so as to promote the effective integration of the Company's system and process. 2022 is the first year
for the Company to start process construction. On the one hand, the Company pays attention to "management, approval
and governance" to improve "management efficiency" and on the other hand, it pays attention to "business process
governance". On the basis of existing system construction, it breaks through from 0 to establish an internal control
management model integrating system and process that suits the Company's actual situation.
In 2022, the Company innovated three staffing models in system design to help business departments improve system
quality: ① Establish the guidance model of "structured compilation of system content elements", ② Pilot the model of
"cross departmental project system improvement team"; ③ Design "similar system compilation framework model" to
further strengthen and enhance the institutionalization, normalization and standardization of business management, so as
to continuously enhance the Company's overall business synergy and risk resistance. In terms of system implementation
and control, the Company regularly carries out system review, and gradually carries out business structure development,
system construction, formulation of establishment, reform and abolishment plan, and revision of management systems
based on "company strategic planning/business control mode → following system construction model", so as to
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effectively promote the scientific and effective implementation of various systems.
Description of major defects in internal control during the reporting period
□ Applicable √ Not applicable
XIII. Management control of subsidiaries during the reporting period
√ Applicable □ Not applicable
The Company implements the important principle of "compliance with the system is also an important
competitiveness" from top to bottom, and has always attached importance to system construction and system governance.
This year, the Company and its subsidiaries strictly followed the existing internal system of the Group and the newly
issued process management supporting mechanism, adhered to risk prevention as the orientation, process improvement
and management efficiency as the goal, and grasped the three cores of "accountability, efficiency enhancement and
downstream" through decentralization and accountability, streamline administration and institute decentralization,
ineffectiveness cleanup and consumption reduction and low value, so as to realize the internal control management model
of system and process integration, thus, the effective operation of the Company's internal management can be standardized,
and the overall operation efficiency and anti-risk ability of the Company can be improved. During the reporting period,
there was no loss of control of subsidiaries.
XIV. Description of internal control audit report
□ Applicable √ Not applicable
Whether to disclose the internal control audit report: Yes
Type of opinion on internal control audit report: standard unqualified opinion
XV. Rectification of self-inspection problems in special actions for governance of listed companies
None
XVI. Other
□ Applicable √ Not applicable
Section V Environmental and social responsibility
I. Environmental information
Whether to establish environmental protection related Yes
mechanisms
Environmental protection funds invested during the 3,308
reporting period (Unit: CNY '0,000)
(I) Environmental protection information of the Company and its main subsidiaries belonging to the key pollutant
discharge units announced by the Environmental Protection Department
√ Applicable □ Not applicable
During the reporting period, among the Company and its holding subsidiaries, Qingyuan Oppein, Tianjin Oppein
and Wuxi Oppein were among the key pollutant discharge units announced by the Environmental Protection Department.
1. Pollutant discharge information
√ Applicable □ Not applicable
1. Wastewater treatment: The Company has formulated a sewage discharge management system to strictly control
domestic sewage and production wastewater, regularly monitor the operation and maintenance of sewage treatment
facilities, and actively apply new sewage treatment equipment and online water quality monitoring technology to ensure
that the concentration and total amount of pollutants discharged meet national and local standards.
A. Domestic sewage: The domestic sewage in the living area is discharged into the municipal sewage pipe network
after being pretreated by the septic tank in the living area (The oily sewage in the canteen is first separated by the oil
separation tank) and the domestic sewage in the production area is discharged into the municipal sewage pipe network
after being pretreated by the septic tank in the production area, and then discharged after centralized treatment by the
sewage treatment plant in the industrial park.
B. Production wastewater: The painting wastewater of the painting line is recycled in the water curtain paint mist
treatment system and replaced regularly. The replacement wastewater is treated by the self-built painting sewage
treatment station (adopting the treatment process of "pre-treatment system (coagulation reaction + air flotation) - pre-
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physical and chemical treatment system (Fenton oxidation + coagulation reaction precipitation) - biochemical treatment
system (hydrolytic acidification + contact oxidation) - post physical and chemical coagulation and precipitation"). After
being treated by the self-built stone wastewater precipitation treatment system, the wastewater generated in the production
process of the table is reused in other links except water knife cutting, and is discharged regularly. The production
wastewater of quartz blank plate workshop is discharged into the precipitation treatment system set outside the plant for
flocculent precipitation treatment, and then recycled without being discharged.
2. Waste gas treatment: The main air pollutants discharged by the Company in production and operation include
dust, organic waste gas (VOCs, toluene and xylene, styrene, etc.) and kitchen fumes. Wood processing dust generated in
the production process is collected by the central dust collection system after being collected by the gas collecting hood,
and the central dust collection device uses the bag dust removal process to control the dust and then passes through the
exhaust funnel to meet the standard; spray paint waste gas is treated by automatic water curtain cabinet and paint mixing
waste gas. After drying, the waste gas is collected and treated by "multistage filtration + runner adsorption concentration
+ RTO treatment system" before being discharged at high altitude. The kitchen fumes in the living area is planned to be
treated by the electrostatic oil smoke removal process, which will be led to the roof of the building by a special smoke
exhaust pipe after reaching the standard of the Emission Standard of Cooking Fume (GB18483-2001).
3. Noise treatment: The Company's noise pollution sources mainly come from the cutting, polishing, air compressor
operation and motor vehicle operation in the production process, and the operation of fans and water pumps in sewage
treatment stations. In view of the noise from different sources, the Company and its subsidiaries take different control
measures to control the noise, including selecting low-noise production equipment and taking silencing and sound
insulation measures for individual high-noise equipment; high noise equipment shall be kept away from the plant
boundary as far as possible; greening and isolation shall be implemented around the plant boundary.
4. Solid waste treatment: The harmless solid waste generated by the Company includes domestic waste and general
industrial solid waste. Household waste is collected in garbage cans and handed over to the Environmental Sanitation
Department for transportation, treatment and disposal. General industrial solid wastes such as wood scraps, dust, glass,
table scraps and aluminum scraps are classified and temporarily stored in the general industrial solid waste temporary
storage warehouse, and regularly handed over to qualified solid waste treatment units for treatment. At the same time, the
storage site is standardized for construction, maintenance and use in accordance with the requirements of the Standards
for Pollution Control on the Storage and Disposal Site for General Industrial Solid Wastes (GB18599-2001).
The hazardous wastes generated by the Company include hazardous wastes in the National List of Hazardous Wastes,
such as waste paint slag, waste activated carbon, grinding dust and sludge from sewage treatment stations, which are
classified and temporarily stored in the temporary storage of hazardous wastes in the plant area, and are transported and
disposed of by units with hazardous waste treatment qualifications every month. The temporary storage of hazardous
waste is designed in strict accordance with the requirements of the Standard for Pollution Control of Hazardous Waste
Storage (GB 18597-2001), all of which are subject to anti-seepage and anti-corrosion treatment, and are equipped with
trenches or cofferdams after anti-seepage and anti-corrosion treatment.
2. Construction and operation of pollution prevention and control facilities
√ Applicable □ Not applicable
Key pollutant discharge units affiliated to the Company shall carry out feasibility study approval, project approval
and construction in accordance with national laws and regulations; all of them apply for pollutant discharge licenses in
accordance with the regulations, and discharge pollutants in accordance with the types of pollutants, control indicators
and prescribed methods approved by the licenses. As of the disclosure date of this report, the environmental protection
facilities of the Company and its subsidiaries are operating normally.
3. Environmental impact assessment of construction projects and other administrative permits for
environmental protection
√ Applicable □ Not applicable
Key pollutant discharge units affiliated to the Company have obtained environmental impact assessment reports and
obtained the approval of local environmental protection departments.
4. Emergency plan for environmental emergencies
√ Applicable □ Not applicable
All units affiliated to the Company have formulated corresponding emergency plans for environmental emergencies
and submitted them to the local competent authorities for filing.
5. Environmental self-monitoring program
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√ Applicable □ Not applicable
According to the requirements of the environmental self-monitoring guidelines, the Company formulated a self-
monitoring plan to clarify the testing points and monitoring frequency. Units lacking self-monitoring conditions shall
adopt the method of entrusted monitoring, and carry out self-monitoring in strict accordance with the requirements of the
national environmental monitoring technical specifications and environmental monitoring management regulations. The
automatic monitoring equipment adopted has passed the acceptance of the Environmental Protection Department, and
regularly upload the environmental monitoring results to the pollution source monitoring data release platform for
environmental information disclosure.
6. Administrative penalties for environmental problems during the reporting period
√ Applicable □ Not applicable
During the reporting period, the Company and its subsidiaries were not subject to administrative penalties for
environmental problems.
7. Other environmental information that should be made public
□ Applicable √ Not applicable
(II) Statement on environmental protection of companies other than key pollutant discharge units
√ Applicable □ Not applicable
1. Administrative penalties for environmental problems
□ Applicable √ Not applicable
2. Disclosure of other environmental information with reference to key pollutant discharge units
√ Applicable □ Not applicable
Other subsidiaries of the Company conscientiously implement laws and regulations related to environmental
protection in their daily production and operation, effectively implement environmental protection measures and fulfill
environmental protection responsibilities.
3. Reasons for not disclosing other environmental information
□ Applicable √ Not applicable
(III) Relevant information conducive to protecting ecology, preventing and controlling pollution and fulfilling
environmental responsibilities
√ Applicable □ Not applicable
This year, the Company began to introduce the environmental assessment dimension to screen new suppliers, with
a screening ratio of 14.84% (142/957). In the introduction stage, the Company requires suppliers to provide environmental
management system and environmental assessment documents during plant audit, conducts a secondary plant audit for
suppliers who change their plant sites to investigate the environmental protection data certification and environment of
their new sites. For suppliers with poor environment and no strict environmental protection control system, measures shall
be taken to rectify, re-evaluate or not adopt.
(IV) Measures taken to reduce its carbon emissions during the reporting period and their effects
Whether to take carbon reduction measures Yes
Reduce carbon dioxide emission equivalent 21,460
(unit: ton)
Types of carbon reduction measures (such as After the Company put into use the roof photovoltaic power station
using clean energy to generate electricity, of Wuxi Base Plant in 2018, Qingyuan base plant roof photovoltaic
using carbon reduction technologies in the power station and Tianjin base plant roof photovoltaic power station
production process, R&D and production of were also officially put into operation in 2022.
new products to help reduce carbon, etc.)
Specific statement
√ Applicable □ Not applicable
In 2021, Oppein cooperated with CEEC Guangdong Institute to pilot the construction of roof photovoltaic power
generation project in Qingyuan base, with a total investment of about CNY 76.5388 million and an area of 180,000m2,
which is the largest roof photovoltaic project ever completed in Guangdong Province. The installed capacity of the project
is about 4,266.1kWp, and the generated electricity is preferentially supplied to Oppein for use, adopting the model of
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"self-use and surplus electricity on the grid". The project is expected to be connected to the grid at full capacity by May
1, 2023. In 2022, the total power generation of roof photovoltaic equipment in Qingyuan, Wuxi and Tianjin bases of the
Company was about 37,632,880 kWh, which was equivalent to reducing carbon dioxide emissions by about 21,460 tons.
II. Social responsibility work
(I) Are social responsibility reports, sustainability reports or ESG reports disclosed separately
√ Applicable □ Not applicable
For details, please refer to the ESG Report for 2022 disclosed by the Company on the website of Shanghai Stock
Exchange on the same day.
(II) Details of social responsibility work
√ Applicable □ Not applicable
External donations and public welfare Quantity/content Information note
projects
Total investment (CNY '0,000) 140.00 -
Including: capital (CNY '0,000) 140.00 -
Material discount (CNY - -
'0,000)
Number of beneficiaries (person) - -
Specific statement
√ Applicable □ Not applicable
In 2022, the Company helped Liujia Village, Huaqi Town, Zhijin County, Bijie City, Guizhou Province, to promote
rural revitalization through Guangzhou Oppein Public Welfare Foundation, directionally helped Xiaosheng Town,
Fengshun County, Meizhou City, to repair rural internal roads, and donated to Guyuan No. 1 Middle School.
III. Consolidate and expand the achievements of poverty alleviation and rural revitalization
□ Applicable √ Not applicable
Specific statement
□ Applicable √ Not applicable
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Section VI Important matters
I. Performance of commitments
(I) Commitments made by the actual controllers, shareholders, related parties, acquirers and the Company during the reporting period or continuing into the reporting
period
√ Applicable □ Not applicable
Whether
If it fails to If it fails to
it is
Is there a perform in time, perform in
carried
Commitment Commitment Commitment Commitment time time limit the specific time, the
Commitment content out in a
context type party and period for reasons for the next step
timely
performance failure to perform plan shall be
and strict
shall be explained explained
manner
During the period
During my tenure as director and supervisor
Yao of serving as
of the Company, the number of shares of the
Commitments Liangsong, director,
Company held by me shall not exceed 25%
related to Share controlling supervisor and
of the total shares of the Company held by Yes Yes N/A N/A
initial public restrictions shareholder senior manager of
me every year, and I will not transfer the
offerings of the the Company and
shares of the Company held by me within six
Company within six months
months of my resignation.
after resignation,
Yao if the Company's shares are reduced within
Commitments Liangsong, two years after the expiration of the lockup
Within two years
related to controlling period, the reduction price shall not be lower
Other after the lockup Yes Yes N/A N/A
initial public shareholder than the issue price. The commitment shall
period expires
offerings of the not be terminated due to job change or
Company resignation.
During the period
During my tenure as director, supervisor and
of serving as
Yao senior manager of the Company, the number
Commitments director,
Liangbai, of shares of the Company held by me shall
related to Share supervisor and
shareholder not exceed 25% of the total shares of the Yes Yes N/A N/A
initial public restrictions senior manager of
of the Company held by me every year, and I will
offerings the Company and
Company not transfer the shares of the Company held
within six months
by me within six months of my resignation.
after resignation,
Commitments Yao if the Company's shares are reduced within Within two years
related to Other Liangbai, two years after the expiration of the lockup after the lockup Yes Yes N/A N/A
initial public shareholder period, the reduction price shall not be lower period expires
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offerings of the than the issue price. The commitment shall
Company not be terminated due to job change or
resignation.
During the period
During my tenure as director, supervisor and
Wang Huan, of serving as
senior manager of the Company, the number
Commitments a shareholder director,
of shares of the Company held by me shall
related to Share who is a supervisor and
not exceed 25% of the total shares of the Yes Yes N/A N/A
initial public restrictions senior senior manager of
Company held by me every year, and I will
offerings manager of the Company and
not transfer the shares of the Company held
the Company within half a year
by me within six months of my resignation.
of resignation
During the period
During my tenure as director, supervisor and
of serving as
Tan Qinxing, senior manager of the Company, the number
Commitments director,
a shareholder of shares of the Company held by me shall
related to Share supervisor and
who is a not exceed 25% of the total shares of the Yes Yes N/A N/A
initial public restrictions senior manager of
director of Company held by me every year, and I will
offerings the Company and
the Company not transfer the shares of the Company held
within half a year
by me within six months of my resignation.
of resignation
During the period
Yang During my tenure as director, supervisor and
of serving as
Yaoxing, a senior manager of the Company, the number
Commitments director,
shareholder of shares of the Company held by me shall
related to Share supervisor and
who is a not exceed 25% of the total shares of the Yes Yes N/A N/A
initial public restrictions senior manager of
senior Company held by me every year, and I will
offerings the Company and
manager of not transfer the shares of the Company held
within half a year
the Company by me within six months of my resignation.
of resignation
During the period
During my tenure as director, supervisor and
Zhong of serving as
senior manager of the Company, the number
Commitments Huawen, a director,
of shares of the Company held by me shall
related to Share shareholder supervisor and
not exceed 25% of the total shares of the Yes Yes N/A N/A
initial public restrictions who is a senior manager of
Company held by me every year, and I will
offerings supervisor of the Company and
not transfer the shares of the Company held
the Company within half a year
by me within six months of my resignation.
of resignation
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The issuer
The prospectus and its abstract do not
Commitments and all its
contain false records, misleading statements
related to directors,
Other or major omissions, and bear individual and Long term Yes Yes N/A N/A
initial public supervisors
joint legal liabilities for its authenticity,
offerings and senior
accuracy and completeness.
managers
If the prospectus of the Company is
determined by the relevant regulatory
authorities to have false records, misleading
statements or major omissions, which has a
significant and substantial impact on judging
whether the Company meets the issuance
conditions stipulated by law, the Company
will repurchase all the new shares of the
initial public offering according to law at the
issuance price. The specific procedures shall
be handled in accordance with the provisions
of the CSRC and the Shanghai Stock
Exchange. If the Company's prospectus
Commitment contains false records, misleading
related to the statements or major omissions, resulting in
Other Issuer Long term Yes Yes N/A N/A
initial public losses to investors in securities trading, it
offering will compensate investors for losses
according to law. The qualification of
investors entitled to compensation, the
identification of the scope of investor losses,
the division of liability among the subjects
of compensation and the reasons for
exemption shall be implemented in
accordance with the Securities Law of the
People's Republic of China, the Provisions
of the Supreme People's Court on Hearing
Civil Compensation Cases Arising from
False Statements in the Securities Market
(FS [2003] No. 2) and other relevant laws
and regulations.
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If the prospectus of the Company is
determined by the relevant regulatory
authorities to have false records, misleading
statements or major omissions, which has a
significant and substantial impact on judging
whether the Company meets the issuance
conditions prescribed by law, I will
repurchase the transferred original restricted
shares according to law. The specific
procedures shall be handled in accordance
with the provisions of the CSRC and the
Shanghai Stock Exchange. If the issuer's
prospectus contains false records,
Commitments Yao
misleading statements or major omissions,
related to Liangsong,
Other resulting in losses to investors in securities Long term Yes Yes N/A N/A
initial public controlling
trading, I will compensate investors for
offerings shareholder
losses in accordance with the law. The
qualification of investors entitled to
compensation, the identification of the scope
of investor losses, the division of liability
among the subjects of compensation and the
reasons for exemption shall be implemented
in accordance with the Securities Law of the
People's Republic of China, the Provisions
of the Supreme People's Court on Hearing
Civil Compensation Cases Arising from
False Statements in the Securities Market
(FS [2003] No. 2) and other relevant laws
and regulations.
If the prospectus of the Company is
The issuer determined by the relevant regulatory
Commitments
directors, authorities to have false records, misleading
related to
Other supervisors statements or major omissions, resulting in Long term Yes Yes N/A N/A
initial public
and senior losses to investors in securities trading, I will
offerings
managers compensate investors for losses in
accordance with the law.
Commitments Shareholders There are two shareholders holding more Long term or
related to holding more than 5% of the Company's shares, Yao within two years
Other Yes Yes N/A N/A
initial public than 5% of Liangsong, the controlling shareholder, and after the lockup
offerings the shares Yao Liangbai, the shareholder. Yao period expires
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Liangsong and Yao Liangbai issued
commitments on their shareholding
intention and reduction intention
respectively, as follows: 1. I intend to hold
the Company's shares for a long time; 2. If I
intend to reduce my holdings after the
expiration of the lockup period, I will
conscientiously abide by the relevant
provisions of the CSRC and the stock
exchange on shareholder reduction,
prudently formulate a share reduction plan in
light of the Company's needs to stabilize
stock prices, carry out business and capital
operation, and gradually reduce my holdings
after the expiration of the lockup period; 3.
The reduction of the Company's shares shall
comply with the provisions of relevant laws,
regulations and rules, including but not
limited to the centralized bidding trading
mode, bulk trading mode and agreement
transfer mode of the exchange; 4. Before
reducing the Company's shares, I shall make
an announcement three trading days in
advance, and fulfill the obligation of
information disclosure in a timely and
accurate manner in accordance with the rules
of the stock exchange; unless I hold less than
5% of the Company's shares; 5. If, within
two years after the expiration of the lockup
period, I intend to reduce my shareholding,
the reduction price shall not be lower than
the issue price (referring to the issue price of
the issuer's initial public offering of shares.
If the Company distributes cash dividends,
shares, equity conversion, additional
issuance of new shares and other reasons
after listing, it shall be treated as ex-rights
and ex-dividend in accordance with the
relevant provisions of the stock exchange).
Within two years after the expiration of the
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lockup period, the total number of shares of
the Company held by me shall not exceed
9% of the total number of shares registered
in my name on the last trading day of the
previous year. If the Company's shares in the
Company change due to equity distribution,
capital reduction and stock reduction, the
base of shares transferred in the
corresponding year shall be changed
accordingly; 6. If I fail to fulfill the above
intention to reduce my holdings, I will
publicly explain the specific reasons for my
failure to fulfill my commitments at the
general meetings of shareholders and the
disclosure media designated by the CSRC,
and apologize to the shareholders of the
Company and public investors; 7. If I fail to
fulfill the above reduction intention, my
shares in the Company shall not be reduced
within six months from the date of my failure
to fulfill the above reduction intention.
Yao Liangsong, the controlling shareholder
and actual controller of the Company, leased
5.12 mu (3,411m2) and 3.50 mu (2,333m2) of
land next to the Company's plant area, and
built employee No. 3 canteen and employee
Yao dormitory, covering a total area of about
Solve land
Commitments Liangsong, 1,902m2. The two buildings have not yet
and other
related to controlling applied for the property ownership
property Long term Yes Yes N/A N/A
initial public shareholder certificate. In view of the above situation,
rights
offerings and actual Yao Liangsong, the controlling shareholder
defects
controller and actual controller of the Company,
promised: "if the issuer is punished by the
relevant administrative departments for the
employee canteen and employee dormitory,
I will unconditionally bear the responsibility
for paying the relevant fines or losses."
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Some houses leased by the issuer and its
subsidiaries have not yet obtained the
property ownership certificate, or have not
yet gone through the filing and registration
of house leasing. In view of this situation,
Yao Liangsong, the controlling shareholder
and actual controller of the Company,
promised: "During the lease term, if the
house leased by Oppein Group or its
Yao
Solve land subsidiaries is subject to relevant ownership
Commitments Liangsong,
and other disputes, overall planning demolition,
related to controlling
property administrative penalties or other Long term Yes Yes N/A N/A
initial public shareholder
rights circumstances affecting the normal
offerings and actual
defects operation of the Company, resulting in the
controller
inability of Oppein Group or its subsidiaries
to continue to use the house normally or
suffer losses, I will bear the losses caused by
Oppein Group or its subsidiaries, including
but not limited to all direct and indirect
losses caused by the litigation or arbitration,
suspension of production or termination of
business, finding alternative places,
relocation or punishment. "
1. As at the date of this letter of commitment,
neither I nor my immediate family/other
economic entities controlled by me or my
Yao immediate family have produced or
Liangsong, developed any products that compete or
the actual potentially compete with products produced
controller of by Oppein Group and its subsidiaries, or
Commitments
Resolving the directly or indirectly operate any business
related to
horizontal Company, that competes or potentially competes with Long term Yes Yes N/A N/A
initial public
competition and his the existing business of Oppein Group and
offerings
brothers Yao its subsidiaries, or invested in any other
Liangbai and enterprise that competes or potentially
Yao competes with the existing business and
Liangsheng products of Oppein Group and its
subsidiaries. 2. From the date of this letter of
commitment, I and my immediate
family/other economic entities controlled by
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me and my immediate family will not
produce or develop any products that
compete or potentially compete with the
products produced by Oppein Group and its
subsidiaries, not directly or indirectly
operate any business that competes or
potentially competes with the business of
Oppein Group and its subsidiaries, and not
participate in investing in any other
enterprise that competes or potentially
competes with the products or operations of
Oppein Group and its subsidiaries. 3. From
the date of signing this letter of commitment,
if Oppein Group and its subsidiaries further
expand their products and business scope in
the future, and the expanded products
compete with the business scope and other
economic entities of me and my immediate
family/controlled by me and my immediate
family in terms of products or business, then
I and my immediate family/other economic
entities controlled by me and my immediate
family will actively take the following
measures to avoid horizontal competition:
(1) Stop the production of competitive or
potentially competitive products; (2) Cease
to operate a competing or potentially
competing business; (3) Incorporate
competing or potentially competing
businesses into the business system of
Oppein Group; (4) Transfer competing or
potentially competing businesses to
unrelated independent third-party for
operations. 4. This letter of commitment
shall come into force as of the date of signing
and shall remain valid and irrevocable
during the period when Yao Liangsong is the
actual controller of Oppein Group. If the
interests and other shareholders' rights and
interests of Oppein Group are damaged due
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to the violation of the above commitments
by me and my immediate family/other
economic entities controlled by me and my
immediate family, I agree to bear the
corresponding liability for damages.
1. I and my immediate family/other
economic entities controlled by me and my
immediate family will avoid and minimize
related party transactions with Oppein
Group; 2. For related party transactions that
cannot be avoided or occur for reasonable
reasons, I and my immediate family
members/other economic entities controlled
by me and my immediate family members
will follow the commercial principles of
equality, voluntariness, equivalence and
compensation, and strictly follow the
relevant provisions on related party
transactions in laws, regulations and
normative documents such as the Articles of
Yao Association (Draft) of Oppein Home Group Actual controller
Commitments
Resolve Liangsong, Inc. and the Measures for the Administration of Oppein
related to
related party actual of Related Party Transactions. By signing a Group/during his Yes Yes N/A N/A
initial public
transactions controller of formal related party transaction agreement tenure in Oppein
offerings
the Company with Oppein Group, the price of related party Group
transactions is guaranteed to be fair and the
transactions are carried out under fair,
reasonable and normal commercial
transaction conditions. I and my immediate
family/other economic entities controlled by
me and my immediate family will not
require or accept more favorable transaction
conditions from Oppein Group than
independent third parties in the course of the
transaction, so as to effectively safeguard the
actual interests of Oppein Group and other
shareholders. 3. I guarantee that I will not
use my position in Oppein Group to damage
the interests of Oppein Group and the
legitimate rights and interests of other
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2022 Annual Report
shareholders through related party
transactions. 4. If I and my immediate
family/other economic entities controlled by
me and my immediate family violate the
above commitments, resulting in damage to
the interests of Oppein Group or the
legitimate rights and interests of other
shareholders, I will bear the corresponding
liability for compensation according to law.
The above commitments shall remain in
force while I am the actual controller of
Oppein Group/in Oppein Group.
As the actual controller of Oppein Group,
Yao Liangsong makes the following
commitments on avoiding the occupation of
Oppein Group's funds: I will strictly abide by
the requirements and provisions of relevant
laws, regulations, normative documents and
articles of association, and ensure that the
assets and resources of Oppein Group will
not be occupied or transferred in any way
(including but not limited to loans, debt
compensation and advances, etc.). I will
Yao cause other economic entities, if any, that I
Commitments Liangsong, directly or indirectly control to comply with
As the actual
related to controlling the above commitments. If I or other
Other controller of Yes Yes N/A N/A
initial public shareholder economic entities under my control violate
Oppein Group
offerings and actual the above commitments, resulting in damage
controller to the rights and interests of Oppein Group
or its shareholders, I will bear the
corresponding liability for compensation
according to law. During the period when I
am the controlling shareholder and actual
controller of Oppein Group, the above
commitments shall remain valid. This letter
of commitment shall be governed by the
laws of the People's Republic of China, shall
come into force as of the date of signing, and
shall remain valid and irrevocable during my
period as the actual controller of Oppein
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Group.
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Yao Liangsong, the controlling shareholder
and actual controller, issued the Letter of
Commitment on Employees of Oppein Group
to Pay Social Security and Housing
Provident Fund: "(1) I will urge Oppein
Group and its subsidiaries to fully
implement the relevant systems of housing
provident fund, maternity, pension,
unemployment, industrial injury and
medical insurance (hereinafter referred to as
"five social insurances and one housing
Yao
fund") stipulated in laws, regulations and
Commitments Liangsong,
rules, establish accounts for all registered
related to controlling
Other employees of Oppein Group and its Long term Yes Yes N/A N/A
initial public shareholder
subsidiaries and deposit "five social
offerings and actual
insurances and one housing fund"; (2) If
controller
Oppein Group and its subsidiaries are
required to make up the unpaid or underpaid
"five social insurances and one housing
fund" for their employees, or are punished
by relevant government departments due to
the payment of "five social insurances and
one housing fund", I will bear all direct and
indirect losses caused by the supplementary
payment or punishment in full, and ensure
that Oppein Group and its subsidiaries will
not suffer any losses as a result.
1. I will urge Oppein Group and its
subsidiaries to fully implement the current
effective Interim Provisions on Labor
Dispatch and the relevant provisions of
Yao relevant laws and regulations; 2. If Oppein
Commitments
Liangsong, Group and its subsidiaries are punished by
related to
Other actual relevant government departments for failing Long term Yes Yes N/A N/A
initial public
controller of to comply with the relevant provisions of the
offerings
the Company Interim Provisions on Labor Dispatch in the
past or in the future, I will bear all direct and
indirect losses incurred due to the
punishment in full, and ensure that Oppein
Group and its subsidiaries will not suffer any
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losses as a result.
1. I will not transfer benefits to other units or
individuals free of charge or under unfair
conditions, nor will I damage the interests of
the Company in other ways. 2. I will strictly
abide by the budget management of the
Company, and any consumption behavior of
my position will occur within the scope
necessary to perform my duties, and strictly
accept the supervision and management of
the Company to avoid waste or excessive
consumption. 3. I will not use the Company's
assets to engage in investment and
consumption activities unrelated to the
Commitments
All directors performance of my duties. 4. I will exercise
related to
Other and senior due diligence to link the remuneration Long term Yes Yes N/A N/A
initial public
managers system established by the board of directors
offerings
or the compensation committee to the
implementation of the Company's measures
to fill returns. 5. I will exercise my due
diligence to link the exercise conditions, if
any, of the Company's equity incentives to
be announced by the Company in the future
to the implementation of the Company's
measures to fill returns. 6. I will do my best
to promote the realization of the Company's
measures to fill the immediate return, will
support the relevant bills linked to the
implementation of the Company's measures
to fill returns, and am willing to vote in favor
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(if entitled to vote). After the date of
issuance of this commitment, if the
regulatory authorities make other
requirements for the relevant provisions on
measures to fill returns and their
commitments, and the above commitments
fail to meet the relevant requirements of the
regulatory authorities, I promise to issue
supplementary commitments in accordance
with the relevant provisions at that time.
In order to ensure that the Company's
measures to fill returns can be effectively
implemented, all directors and senior
managers of the Company make the
following commitments: 1. Promise not to
transfer benefits to other units or individuals
free of charge or under unfair conditions, nor
to damage the interests of the Company in
other ways; 2. Promise to restrict my job
consumption behavior; 3. Promise not to use
the Company's assets to engage in
investment and consumption activities
unrelated to the performance of their duties;
Directors and 4. Promise that the remuneration system
Commitments During the
senior formulated by the board of directors or the
related to Other duration of Yes Yes N/A N/A
managers of Remuneration and Assessment Committee
refinancing convertible bonds
the Company will be linked to the implementation of the
Company's measures to fill returns; 5. If the
Company implements a new equity
incentive plan in the future, it is promised
that the exercise conditions of the equity
incentive plan to be announced will be
linked to the implementation of the
Company's remuneration measures. As one
of the responsible subjects for measures to
fill returns, if I violate the above
commitments or refuse to fulfill the above
commitments, I agree to bear the relevant
penalties or management measures imposed
on me by the securities regulatory authorities
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such as the CSRC and the Shanghai Stock
Exchange in accordance with the relevant
provisions and rules formulated or issued by
them, and am willing to bear the
corresponding legal liabilities.
In order to ensure that the Company's
measures to fill returns can be effectively
implemented, the controlling shareholders
and actual controllers of the Company make
the following commitments: "I will not
interfere with the operation and management
activities of listed companies beyond my
authority and will not infringe on the
Controlling
interests of listed companies. As one of the
shareholder During the
responsible subjects for measures to fill
Other and actual duration of Yes Yes N/A N/A
returns, if I violate the above commitments
controller of convertible bonds
or refuse to fulfill the above commitments, I
the Company
agree to bear the relevant penalties or
management measures imposed on me by
the securities regulatory authorities such as
the CSRC and the Shanghai Stock Exchange
in accordance with the relevant provisions
and rules formulated or issued by them, and
am willing to bear the corresponding legal
liabilities."
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1. After confirmation on the first day of the
issuance of convertible bonds (the
announcement date of the prospectus), I will
inspect whether I and my spouse, parents and
children have reduced their holdings of the
issuer's shares within six months before the
first day of issuance by myself: (1) If there is
a reduction, I and my spouse, parents and
children will not participate in the issuance
and subscription of convertible bonds, nor
will I entrust other subjects to participate in
the issuance and subscription of convertible
bonds; (2) If there is no reduction, I or my
Shareholders,
spouse, parents and children will participate Commitment
directors,
in the issuance and subscription of period before
supervisors
Commitments convertible bonds. If the subscription is confirmation on
and senior
related to Other successful, I, my spouse, parents and the first day of Yes Yes N/A N/A
managers
refinancing children will strictly abide by the relevant issuance of
holding more
provisions of short-term trading, that is, not convertible
than 5% of
to reduce the issuer's shares and convertible bonds: long term
the shares
corporation bonds issued within six months
from the first day of the issuance of
convertible bonds. 2. If I or my spouse,
parents or children reduce our holdings in
violation of regulations, the proceeds thus
obtained shall belong to the issuer and we
will bear the legal liabilities arising
therefrom in accordance with the law. 3. I
guarantee that I, my spouse, parents and
children will strictly abide by the Securities
Law and the relevant provisions of the CSRC
and the Shanghai Stock Exchange on short-
term trading.
will not provide loans and other forms of
Commitments Validity period of
financial assistance for incentive targets to
related to The stock option
Other obtain relevant stock options under this Yes Yes N/A N/A
equity Company incentive plan in
incentive plan, including providing
incentives 2021
guarantees for its loans.
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If the Company does not conform to the
arrangement for granting rights and interests
or exercising rights and interests due to false
records, misleading statements or major
Stock option Validity period of
omissions in the information disclosure
incentive stock option
Other documents, the incentive targets shall return Yes Yes N/A N/A
targets in incentive plan in
all the benefits obtained from the equity
2021 2021
incentive plan to the Company after the
relevant information disclosure documents
are confirmed to have false records,
misleading statements or major omissions.
1. Directors, supervisors and senior
managers undertake to: (1) Abide by and
urge the Company to abide by laws,
administrative regulations, departmental
rules, etc., and fulfill the obligations of
loyalty and diligence; (2) Comply with and
The fourth cause the Company to comply with these
board of rules and other provisions of the Exchange During the term of
directors, and accept the supervision of the Exchange; office of the
Other board of (3) Comply with and cause the Company to fourth board of
Other Yes Yes N/A N/A
commitments supervisors comply with the Articles of Association; 2. directors and
and senior The supervisors undertake to supervise board of
managers of directors and senior managers to abide by supervisors
the Company their commitments. 3. The senior managers
undertake to report to the board of directors
in a timely manner any matters arising from
the operation or finance of the Company that
may have a greater impact on the trading
price of the Company's shares and their
derivatives.
(II) If there is a profit forecast for the Company's assets or projects, and the reporting period is still in the profit forecast period, the Company shall explain whether
the assets or projects meet the original profit forecast and the reasons
□ Met □ Not met √ Not applicable
(III) Completion of performance commitments and its impact on goodwill impairment test
□ Applicable √ Not applicable
II. Non operating occupation of funds by controlling shareholders and other related parties during the reporting period
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2022 Annual Report
□ Applicable √ Not applicable
III. Illegal guarantee
□ Applicable √ Not applicable
85/259
2022 Annual Report
IV. Description of the board of directors of the Company on the "non-standard opinion audit report" of the
accounting firm
□ Applicable √ Not applicable
V. The Company's analysis and description of the reasons and impact of changes in accounting policies, accounting
estimates or corrections of major accounting errors
(I) The Company's analysis and description of the reasons and impact of changes in accounting policies and
accounting estimates
√ Applicable □ Not applicable
This change in accounting policy is a reasonable change made by the Company in accordance with the requirements
of the Interpretation of Accounting Standards for Business Enterprises No. 15 (CK [2021] No. 35) and the Interpretation
of Accounting Standards for Business Enterprises No. 16 (CK [2022] No. 31) issued by the Ministry of Finance. The
changed accounting policy can more objectively and fairly reflect the Company's financial situation, operating results and
cash flow, which is in line with the interests of the Company and all shareholders. This change in accounting policy does
not involve retrospective adjustment of the Company's previous years, has no significant impact on the Company's
financial situation, operating results and cash flow, and does not damage the interests of the Company and all shareholders,
especially minority shareholders.
(II) Analysis and description of the Company's reasons and impact for the correction of major accounting errors
□ Applicable √ Not applicable
(III) Communication with previous accounting firms
□ Applicable √ Not applicable
(IV) Other instructions
□ Applicable √ Not applicable
VI. Appointment and dismissal of accounting firms
Unit: '0,000 Currency: CNY
Current appointment
Name of domestic accounting firms Huaxing Certified Public Accounts LLP (Special
General Partnership)
Remuneration of domestic accounting firms 234
Audit years of domestic accounting firms 3
Name of certified public accountant of domestic Feng Jun, Fu Peng
accounting firms
Continuous years of audit services provided by certified 3
public accountant of domestic accounting firms
Note: Feng Jun, an accountant, provides audit services for the Company for one consecutive year.
Name Remuneration
Internal control audit accounting Huaxing Certified Public Accounts
80
firms LLP (Special General Partnership)
Description of the appointment and dismissal of accounting firms
√ Applicable □ Not applicable
On May 27, 2022, the Company held the 2021 annual general meetings of shareholders, which deliberated and
approved the Proposal on the Renewal of Huaxing Certified Public Accounts LLP (Special General Partnership) as the
Company's Audit Institution in 2022, and the Company hired Huaxing Certified Public Accounts LLP (Special General
Partnership) as the audit institution for 2022.
Description of the change of accounting firm during the audit period
□ Applicable √ Not applicable
VII. Situations at risk of delisting
(I) Reasons for delisting risk warning
□ Applicable √ Not applicable
86/259
2022 Annual Report
(II) Measures to be taken by the Company
□ Applicable √ Not applicable
(III) Circumstances and reasons for termination of listing
□ Applicable √ Not applicable
VIII. Matters related to bankruptcy reorganization
□ Applicable √ Not applicable
IX. Major litigation and arbitration matters
□ The Company has major litigation and arbitration matters this year √ The Company has no major litigation and
arbitration matters this year
(I) The litigation and arbitration matters have been disclosed in the interim announcement and there is no follow-
up progress
□ Applicable √ Not applicable
(II) Litigation and arbitration that are not disclosed in the interim announcement or have follow-up progress
□ Applicable √ Not applicable
(III) Other notes
□ Applicable √ Not applicable
X. Listed companies and their directors, supervisors, senior managers, controlling shareholders and actual
controllers are suspected of violating laws and regulations, being punished and rectified
□ Applicable √ Not applicable
XI. Description of the integrity of the Company, its controlling shareholders and actual controllers during the
reporting period
√ Applicable □ Not applicable
During the reporting period, the Company, the controlling shareholder and the actual controller of the Company, Mr.
Yao Liangsong, did not have bad faith such as outstanding debts due.
XII. Material related party transactions
(I) Related party transactions related to day-to-day operation
1. Matters that have been disclosed in the interim announcement and have no progress or change in subsequent
implementation
□ Applicable √ Not applicable
2. Matters that have been disclosed in the interim announcement but have progress or change in subsequent
implementation
□ Applicable √ Not applicable
3. Matters not disclosed in the provisional announcement
□ Applicable √ Not applicable
(II) Related party transactions arising from the acquisition and sale of assets or equity
1. Matters that have been disclosed in the interim announcement and have no progress or change in subsequent
implementation
□ Applicable √ Not applicable
2. Matters that have been disclosed in the interim announcement but have progress or change in subsequent
implementation
□ Applicable √ Not applicable
3. Matters not disclosed in the provisional announcement
□ Applicable √ Not applicable
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2022 Annual Report
4. If the performance agreement is involved, the performance realization during the reporting period shall be
disclosed
□ Applicable √ Not applicable
(III) Major related party transactions of joint foreign investment
1. Matters that have been disclosed in the interim announcement and have no progress or change in subsequent
implementation
□ Applicable √ Not applicable
2. Matters that have been disclosed in the interim announcement but have progress or change in subsequent
implementation
□ Applicable √ Not applicable
3. Matters not disclosed in the provisional announcement
□ Applicable √ Not applicable
(IV) Related creditor's rights and debts
1. Matters that have been disclosed in the interim announcement and have no progress or change in subsequent
implementation
□ Applicable √ Not applicable
2. Matters that have been disclosed in the interim announcement but have progress or change in subsequent
implementation
□ Applicable √ Not applicable
3. Matters not disclosed in the provisional announcement
□ Applicable √ Not applicable
(V) Financial business between the Company and related financial companies, the Company's holding financial
companies and related parties
□ Applicable √ Not applicable
(VI) Others
□ Applicable √ Not applicable
XIII. Major contracts and their performance
(I) Trusteeship, contracting and leasing
1. Trusteeship
□ Applicable √ Not applicable
2. Contracting
□ Applicable √ Not applicable
3. Leasing
□ Applicable √ Not applicable
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2022 Annual Report
(II) Guarantees
√ Applicable □ Not applicable
Unit: CNY
External guarantees of the Company (excluding guarantees to subsidiaries)
Guarante
Whether
Relationsh e
Guarante Has the Is the Guarante to
ip between Guarante occurrenc Guarante Type of Counter Relevance
Guarant Guarantee e Collatera guarante guarante e guarante
guarantor e e date e start guarante guarante relationshi
or d party expiratio l, if any e been e overdue e for
and listed amount (agreeme date e e p
n date fulfilled overdue amount related
company nt signing
parties
date)
Total amount of guarantees incurred during the reporting period (excluding
guarantees to subsidiaries)
Total guarantee balance at the end of the reporting period (A) (excluding
guarantees to subsidiaries)
Guarantees provided by the Company and its subsidiaries to subsidiaries
Total amount of guarantees to subsidiaries during the reporting period 2,204,332,837.12
Total guarantee balance to subsidiaries at the end of the reporting period (B) 988,765,204.81
Total guarantee amount of the Company (including guarantee to subsidiaries)
Total guarantee (A+B) 988,765,204.81
Proportion of total guarantee to net assets of the Company (%) 5.99
Of which:
Amount of guarantee provided for shareholders, actual controllers and their
0.00
related parties (C)
Amount of debt guarantee directly or indirectly provided for the guaranteed
18,385,260.74
object with an asset liability ratio of more than 70% (D)
Amount of the total guarantee exceeding 50% of the net assets (E) 0.00
Total amount of the above three guarantees (C+D+E) 18,385,260.74
Description of possible joint and several liability for repayment of unexpired
None
guarantee
Guarantee description None
89/259
2022 Annual Report
(III) Entrust others to manage cash assets
1. Entrusted financial management
(1) General situation of entrusted financial management
√ Applicable □ Not applicable
Unit:CNY ‘0,000
Type Source of funds Amount incurred Outstanding balance Overdue uncollected amount
Bank financing Own funds 55,000.00 50,000.00 0.00
Bank financing Fund raising 55,000.00 30,000.00 0.00
Other circumstances
□ Applicable √ Not applicable
(2) Single entrusted financial management
√ Applicable □ Not applicable
Unit:CNY ‘0,000
Is there
Whether Amount
Amount Start date Terminati Actu an
Remunerat Expect it has of
of of on date of Sour al entrusted
Type of entrusted Capital ion ed Actual gone provisio
entrusted entrusted entrusted ce of Annuali gains financial
Trustee financial investm determinat earnin recover through n for
financial financial financial fund zed yield or managem
management ent ion gs (if y legal impairm
managem managem managem s losse ent plan
method any) procedu ent (if
ent ent ent s in the
res any)
future
China
China Merchants
Merchant
Bank Company Own
s Bank 2021/5/2 2021/12/ 431. Recove
Dingding A Type fund Contract 4.00% - Yes Yes -
Guangzh 6 9 78 ry
65170 financial s
ou
management plan
Branch
20,000.00
China
China Merchants
Merchant
Bank Company Own
s Bank 2021/5/2 2022/1/1 69.9 Recove
Dingding A Type fund Contract 4.00% - Yes Yes -
Guangzh 6 0 3 ry
65170 financial s
ou
management plan
Branch
90/259
2022 Annual Report
China
China Merchants
Merchant
Bank Company Own
s Bank 2021/5/2 2022/2/1 Recove
Dingding A Type fund Contract 4.00% - Yes Yes -
Guangzh 6 4 ry
65170 financial s
ou
management plan
Branch
ICBC wealth
management Wi
shful life core
ICBC preferred fixed
Guangzh income closed net
Own
ou value special 2021/7/2 2022/7/2 603. Recove
30,000.00 fund Contract 3.80% - Yes Yes -
Tianpingj account 1 0 00 ry
s
ia Sub- customized
branch wealth
management
products
(21GS5309)
Bank of
China
Guangzh Own
Linked structured 2021/8/2 194. Recove
ou 10,000.00 2022/3/1 fund Contract 3.80% - Yes Yes -
deposits 6 68 ry
Jianggao s
Sub-
branch
ICBC wealth
management.
Core preferred
ICBC
fixed income
Guangzh
closed net value Own
ou 2021/8/3 2022/8/2 318. Recove
special account 20,000.00 fund Contract 3.80% - Yes Yes -
Tianpingj 0 9 00 ry
customized s
ia Sub-
wealth
branch
management
products
21GS5256
China China Own
2021/9/2 103. Recove
Construct Construction 10,000.00 2022/1/5 fund Contract 3.61% - Yes Yes -
2 85 ry
ion Bank Bank "Qianyuan - s
91/259
2022 Annual Report
Guangzh Huizhong"
ou (Purchase by
Jianggao daily subscription
Sub- and redemptions
branch are made
quarterly) open
net value CNY
financial products
China
Bohai China Bohai
Bank Bank No. 21060
Own
Tianjin closed fixed 2021/9/2 2022/3/2 414. Recove
20,000.00 fund Contract 4.20% - Yes Yes -
Pilot Free income non-net 9 8 25 ry
s
Trade value financial
Zone products
Branch
China
Construction
China
Bank "Qianyuan -
Construct
Huizhong"
ion Bank
(Purchase by Own
Guangzh 2021/10/ 140. Recove
daily subscription 15,000.00 2022/1/5 fund Contract 3.63% - Yes Yes -
ou 12 19 ry
and redemptions s
Jianggao
are made
Sub-
quarterly) open
branch
net value CNY
financial products
China
Construction
China
Bank "Qianyuan -
Construct
Huizhong"
ion Bank
(Purchase by Own
Guangzh 2021/10/ 225. Recove
daily subscription 25,000.00 2022/1/5 fund Contract 3.63% - Yes Yes -
ou 12 09 ry
and redemptions s
Jianggao
are made
Sub-
quarterly) open
branch
net value CNY
financial products
China China 25,000.00 2021/10/ 2022/1/5 Own Contract 3.63% - 225. Recove Yes Yes -
92/259
2022 Annual Report
Construct Construction 12 fund 09 ry
ion Bank Bank "Qianyuan - s
Guangzh Huizhong"
ou (Purchase by
Jianggao daily subscription
Sub- and redemptions
branch are made
quarterly) open
net value CNY
financial products
CGB's "salary
increase No.16"
W Type 99th
CNY structural
CGB Own
deposit in 2021 2021/12/ 2022/1/2 Recove
Qingyuan 5.00 fund Contract 3.25% - 0.02 Yes Yes -
(institutional 23 7 ry
Branch s
version) (linked
to Euro - dollar
euro binary
bearish structure)
Ping An Bank's
public structured
Ping An deposits (100%
Bank principal Own
2022/7/2 Recove
Guangzh guaranteed linked 5,000.00 2022/8/4 fund Contract 1.82% - 1.99 Yes Yes -
9 ry
ou interest rate) s
Branch rolling open 7-
day 2020 Issue 01
TGA20000001
China
Construct
ion Bank
CNY customized Own
Guangzh
structured 50,000.00 2022/9/2 2023/3/6 fund Contract 3.55% - - — Yes Yes -
ou
deposits s
Jianggao
Sub-
branch
China China Merchants 2022/9/2 2022/12/ Fund 142. Recove
20,000.00 Contract 2.85% - Yes Yes -
Merchant Bank Zhihui 0 20 raisi 11 ry
93/259
2022 Annual Report
s Bank series aggressive ng
Guangzh bearish three-tier
ou interval three-
Branch month structural
deposits
China Merchants
Bank Zhihui
series aggressive
bearish three-tier
China
interval one-
Merchant
month structural Fund
s Bank 2022/11/ 2022/12/ 11.4 Recove
deposit product 5,000.00 raisi Contract 2.70% - Yes Yes -
Guangzh 11 12 7 ry
description ng
ou
structured deposit
Branch
product
description
(Product Code:
FGZ00011)
China Merchants
China Bank Zhihui
Merchant series bullish
Fund
s Bank three-tier interval 2022/12/ 2023/1/3
30,000.00 raisi Contract 2.90% - - — Yes Yes -
Guangzh 33-day structural 28 0
ng
ou deposit risk
Branch disclosure
FGZ00012
Other circumstances
□ Applicable √ Not applicable
94/259
2022 Annual Report
(3) Provision for impairment of entrusted financial management
□ Applicable √ Not applicable
2. Entrusted loan
(1) General situation of entrusted loan
□ Applicable √ Not applicable
Other circumstances
□ Applicable √ Not applicable
(2) Single entrusted loan
□ Applicable √ Not applicable
Other circumstances
□ Applicable √ Not applicable
(3) Provision for impairment of entrusted loan
□ Applicable √ Not applicable
3. Other circumstances
□ Applicable √ Not applicable
(IV) Other major contracts
□ Applicable √ Not applicable
XIV. Descriptions of other major matters that have a significant impact on investors' value judgments and
investment decisions
□ Applicable √ Not applicable
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2022 Annual Report
Section VII Changes in shares and shareholders
I. Changes in equity
(I) Statement of Changes in Shares
1. Statement of changes in shares
Unit: nos.
Before this change Increase or decrease in this change (+, -) After this change
Provident
Proportion New Sub- Proportion
Quantity Dividend fund Other Quantity
(%) issue total (%)
conversion
I. Shares with
limited
0 0 0 0 0 0 0 0 0
conditions of
sale
1. Shares held
0 0 0 0 0 0 0 0 0
by State
2. Shares held
by State-owned 0 0 0 0 0 0 0 0 0
legal persons
3. Shares held
by other 0 0 0 0 0 0 0 0 0
domestic capital
Including:
shares held by
domestic non 0 0 0 0 0 0 0 0 0
state-owned
legal persons
Shares
held by
domestic 0 0 0 0 0 0 0 0 0
natural
persons
4. Foreign
0 0 0 0 0 0 0 0 0
shareholding
Including:
shares held by
0 0 0 0 0 0 0 0 0
overseas legal
persons
Shares
held by
overseas 0 0 0 0 0 0 0 0 0
natural
person
II. Unrestricted
609,151,948 100 6 0 0 0 6 609,151,954 100
tradable shares
1. CNY
609,151,948 100 6 0 0 0 6 609,151,954 100
ordinary share
2. Domestic
listed foreign 0 0 0 0 0 0 0 0 0
share
3. Overseas
listed foreign 0 0 0 0 0 0 0 0 0
share
4. Other 0 0 0 0 0 0 0 0 0
III. Total shares 609,151,948 100 6 0 0 0 6 609,151,954 100
2. Description of changes in shares
√ Applicable □ Not applicable
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During the period from September 21, 2022 to September 30, 2022, the number of incentive targets who met the
exercise conditions and completed the registration of share transfer in the first exercise period of stock options granted
by the Company for the first time was 6 shares, accounting for 0.0006% of the total number of exercisable stock options
in that period. For details, please refer to the Announcement on Quarterly Independent Exercise Results and Share
Changes of the Company's Stock Option Incentive Plan in 2021 (2022-084) disclosed by the Company on the website of
Shanghai Stock Exchange.
3. Impact of share changes on financial indicators such as earnings per share and net assets per share in the latest
year and the latest period (if any)
√ Applicable □ Not applicable
During the reporting period, due to the impact of stock option exercise, the Company's total equity at the end of the
period increased by 6 shares compared with the total equity at the beginning of the period, which had little dilution effect
on earnings per share and net assets per share in the latest period.
4. Other contents deemed necessary by the Company or required to be disclosed by the securities regulatory
authority
□ Applicable √ Not applicable
(II) Changes in restricted shares
□ Applicable √ Not applicable
II. Securities issuance and listing
(I) Securities issuance as of the reporting period
√ Applicable □ Not applicable
Unit: share Currency: CNY
Number of
Issue price Transaction
Types of stocks and Number of transactions
Issue date (or interest Listing date termination
their derivatives issues approved for
rate) date
listing
Convertible corporation bonds and convertible bonds with separate transactions
Oppein 22 August 5, September 1, August 4,
100 20 million 20 million
convertible bonds 2022 2022 2028
Other derivative securities
Option for the first
exercise period of September September
145.22 1,042,576 1,042,576 July 1, 2023
the first grant of 21, 2022 21, 2022
stock options
Notes on the issuance of securities during the reporting period (please explain separately for bonds with different interest
rates during the duration):
√ Applicable □ Not applicable
1. With the approval of "ZJXK [2022] No.1328" of CSRC, the Company publicly issued 20 million convertible
corporation bonds on August 5, 2022, with a face value of CNY 100 each and a total issuance amount of CNY 2 billion.
The term of the bonds is six years from the date of issuance (from August 5, 2022 to August 4, 2028). The coupon rate
of the bonds is 0.30% in the first year, 0.50% in the second year, 1.00% in the third year, 1.50% in the fourth year, 1.80%
in the fifth year and 2.00% in the sixth year.
On September 1, 2022, "Oppein 22 convertible bonds" (Bond Code: 113655) were listed and traded on the Shanghai
Stock Exchange. The initial conversion price of "Oppein 22 convertible bonds" was CNY 125.46 per share, and the
conversion time was from February 13, 2023 to August 4, 2028 (in case of legal holidays or rest days, it was postponed
to the first working day thereafter).
2. In the first exercise period of the first grant of stock options under the Company's stock option incentive plan in
2021, 439 incentive targets met the exercise conditions, totaling 1,042,576 exercisable stock options. The exercise time
was from September 21, 2022 to July 1, 2023. The exercise method was independent exercise, and the exercise price was
CNY 145.22 per share. During the period from September 21, 2022 to September 30, 2022, the number of exercise and
completion of share transfer registration of stock option incentive targets was 6 shares, accounting for 0.0006% of the
total number of exercisable stock options in that period.
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(II) Changes in the total number of shares and shareholder structure of the Company and changes in the structure
of assets and liabilities of the Company
√ Applicable □ Not applicable
During the reporting period, due to the impact of stock option exercise, the Company's total equity at the end of the
period increased by 6 shares compared with the total equity at the beginning of the period, which had little impact on the
Company's asset and liability structure.
(III) Existing internal employee stocks
□ Applicable √ Not applicable
III. Shareholders and actual controllers
(I) Total shareholders
Total number of ordinary shareholders (nos.) by the end 9,668
of the reporting period
Total number of ordinary shareholders (nos.) at the end of 10,365
the previous month before the disclosure date of the
annual report
Total number of preferred shareholders whose voting 0
rights were restored by the end of the reporting period
(nos.)
Total number of preferred shareholders whose voting 0
rights were restored at the end of last month before the
disclosure date of the annual report (nos.)
(II) By the end of the reporting period, the shareholding of the top ten shareholders and the top ten circulating
shareholders (or shareholders with unlimited selling conditions)
Unit: share
Shareholding of the top ten shareholders
Number Pledge, marking or
Increase or
Number of of shares freezing
Name of decrease
holdings at Proportion with Nature of
shareholder (full during the
the end of the (%) limited Share shareholder
name) reporting Quantity
period conditions status
period
of sale
Domestic
Yao Liangsong 0 403,200,000 66.19 0 None 0 natural
person
Domestic
Yao Liangbai 0 51,578,316 8.47 0 None 0 natural
person
Hong Kong
Securities
-16,562,487 27,504,266 4.52 0 None 0 Unknown
Clearing
Company Limited
Agricultural Bank
of China Limited -
Yifangda
-450,002 8,607,719 1.41 0 None 0 Other
consumer industry
stock securities
investment fund
ICBC - Guangfa
steady growth
1,300,000 6,800,000 1.12 0 None 0 Other
securities
investment fund
National Social
Security Fund 115 1,450,000 5,350,000 0.88 0 None 0 Other
portfolio
Social Security 526,195 2,853,322 0.47 0 None 0 Other
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Fund of the
People's Republic
of China 114
portfolio
Basic endowment
insurance fund 350,000 2,650,000 0.44 0 None 0 Other
805 portfolio
ICBC - Guangfa
steady return
914,120 2,316,620 0.38 0 None 0 Other
hybrid securities
investment fund
Kuwait
Investment
1,529,251 1,763,212 0.29 0 None 0 Other
Authority - own
funds
Shareholding of the top ten shareholders with unlimited selling conditions
Number of tradable shares with Class and number of shares
Name of shareholder
unrestricted conditions Classification Quantity
CNY ordinary
Yao Liangsong 403,200,000 403,200,000
share
CNY ordinary
Yao Liangbai 51,578,316 51,578,316
share
Hong Kong Securities Clearing CNY ordinary
27,504,266 27,504,266
Company Limited share
Agricultural Bank of China
Limited - Yifangda consumer CNY ordinary
8,607,719 8,607,719
industry stock securities share
investment fund
ICBC - Guangfa steady growth CNY ordinary
6,800,000 6,800,000
securities investment fund share
National Social Security Fund 115 CNY ordinary
5,350,000 5,350,000
portfolio share
Social Security Fund of the
CNY ordinary
People's Republic of China 114 2,853,322 2,853,322
share
portfolio
Basic endowment insurance fund CNY ordinary
2,650,000 2,650,000
805 portfolio share
ICBC - Guangfa steady return CNY ordinary
2,316,620 2,316,620
hybrid securities investment fund share
Kuwait Investment Authority - CNY ordinary
1,763,212 1,763,212
own funds share
Description of repurchase account
N/A
among the top ten shareholders
Description on the entrusting
voting rights, entrusted voting
rights and waiver of voting rights Unknown
of the above-mentioned
shareholders
Among the top ten shareholders with unlimited selling conditions, Yao
Liangsong is the actual controller of the Company, Yao Liangbai is a close
Description of the above family member of Yao Liangsong, and Yao Liangsong and Yao Liangbai
shareholder's association or constitute a relationship. The Company does not know whether there is a
concerted action related relationship between other social shareholders, nor does it know
whether other social shareholders belong to the concerted actors stipulated in
the Measures for the Administration of the Acquisition of Listed Companies.
Description of preferred
shareholders with voting rights
N/A
restored and the number of shares
held
Number of shares held by the top ten shareholders with limited selling conditions and restricted selling conditions
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□ Applicable √ Not applicable
(III) Strategic investors or general legal persons become the top 10 shareholders due to the placement of new shares
□ Applicable √ Not applicable
IV. Controlling shareholders and actual controllers
(I) Controlling shareholders
1 Legal person
□ Applicable √ Not applicable
2 Natural Persons
√ Applicable □ Not applicable
Name Yao Liangsong
Nationality China
Have you obtained residency in other
No
countries or regions
Main occupation and position Chairman and president of the Company
3 Special description about no controlling shareholder of the Company
□ Applicable √ Not applicable
4 Description of changes in controlling shareholders during the reporting period
□ Applicable √ Not applicable
5 Block diagram of property rights and control relationship between the Company and controlling
shareholders
√ Applicable □ Not applicable
Yao
Liangsong
Oppein Home Group Inc.
(II) Actual controllers
1 Legal person
□ Applicable √ Not applicable
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2 Natural Persons
√ Applicable □ Not applicable
Name Yao Liangsong
Nationality China
Have you obtained residency in other
No
countries or regions
Main occupation and position Chairman and general manager
Domestic and foreign listed companies
N/A
that have controlled in the past 10 years
3 Special description about no actual controller of the Company
□ Applicable √ Not applicable
4 Description of changes in the Company's control rights during the reporting period
□ Applicable √ Not applicable
5 Block diagram of property rights and control relationship between the Company and actual controller
√ Applicable □ Not applicable
Yao
Liangsong
Oppein Home Group Inc.
6 The actual controller controls the Company through trust or other asset management methods
□ Applicable √ Not applicable
(III) Other information about controlling shareholders and actual controllers
□ Applicable √ Not applicable
V. The controlling shareholder or the largest shareholder of the Company and its concerted actors have pledged
more than 80% of the Company's shares
□ Applicable √ Not applicable
VI. Other corporate shareholders holding more than 10% of the shares
□ Applicable √ Not applicable
VII. Description of share restriction and reduction
□ Applicable √ Not applicable
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VIII. Specific implementation of share repurchase during the reporting period
√ Applicable □ Not applicable
Unit: CNY
Oppein Home's plan to repurchase the Company's shares through centralized
Name of share repurchase plan
bidding transactions
Disclosure time of share
October 28, 2022
repurchase plan
Number of shares to be
repurchased and proportion in 0.27
total equity (%)
Proposed repurchase amount ≥ CNY 125,000,000 and ≤ CNY 250,000,000
Within 12 months from the date of approval of the share repurchase plan at the
Proposed repurchase period
second meeting of the fourth board of directors
Repurchase purpose Employee stock ownership plan, equity incentive, convertible bond conversion
Number of repurchased shares 0
Proportion of repurchased
quantity to the underlying shares
—
involved in the equity incentive
plan (%) (if any)
Progress of the Company's
reduction of repurchased shares
—
by means of centralized bidding
transactions
Note: "The number of shares to be repurchased and the proportion (%) to the total equity" is calculated based on the
repurchase price not exceeding CNY 155 per share. If all shares are repurchased, it is estimated that the number of
repurchased shares will be about 1,612,903 shares, accounting for about 0.27% of the Company's total equity.
Section VIII Preferred shares
□ Applicable √ Not applicable
Section IX Bonds
I. Corporate bonds, corporation bonds and non-financial corporate debt financing instruments
□ Applicable √ Not applicable
II. Convertible corporation bonds
√ Applicable □ Not applicable
(I) Issuance of convertible bonds
√ Applicable □ Not applicable
With the approval of "ZJXK [2022] No.1328" of CSRC, the Company publicly issued 20 million convertible
corporation bonds on August 5, 2022, with a face value of CNY 100 each and a total issuance amount of CNY 2 billion.
The term of the bonds is six years from the date of issuance (from August 5, 2022 to August 4, 2028). The coupon rate
of the bonds is 0.30% in the first year, 0.50% in the second year, 1.00% in the third year, 1.50% in the fourth year, 1.80%
in the fifth year and 2.00% in the sixth year.
On September 1, 2022, "Oppein 22 convertible bonds" (Bond Code: 113655) were listed and traded on the Shanghai
Stock Exchange. The initial conversion price of "Oppein 22 convertible bonds" was CNY 125.46 per share, and the
conversion time was from February 13, 2023 to August 4, 2028 (in case of legal holidays or rest days, it was postponed
to the first working day thereafter).
(II) Holders and guarantors of convertible bonds during the reporting period
√ Applicable □ Not applicable
Name of convertible corporation Oppein 22 convertible bonds
bonds
Number of convertible bond holders 11,313
at the end of the period
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2022 Annual Report
Guarantor of the Company's None
convertible bonds
The top ten convertible bond holders are as follows:
Name of convertible corporation Number of bonds held at the end of
Holding ratio (%)
bond holders the period (CNY)
Yao Liangsong 1,323,706,000 66.19
Yao Liangbai 169,332,000 8.47
Agricultural Bank of China Limited -
Yifangda consumer industry stock 32,002,000 1.60
securities investment fund
CNPC enterprise annuity plan -
Industrial and Commercial Bank of 19,544,000 0.98
China Limited
PSBC Wealth Management Co., Ltd.
- PSBC wealth bonds issue 299,
13,589,000 0.68
2018 (bimonthly fixed growth net
value type)
China Merchants Bank Co., Ltd. -
Huabao convertible bond securities 11,923,000 0.60
investment fund
China Construction Bank Co., Ltd. -
Zheshang Fengli enhanced bond 10,000,000 0.50
securities investment fund
Harvest new opportunity fixed
income pension product - China 10,000,000 0.50
Construction Bank Co., Ltd.
China Life Asset Management -
PSBC - CLAM - steady profit and
8,353,000 0.42
fixed income enhanced 2276 asset
management products
Agricultural Bank of China -
8,056,000 0.40
Dacheng bond investment fund
(III) Changes in convertible bonds during the reporting period
□ Applicable √ Not applicable
Cumulative conversion of convertible bonds during the reporting period
□ Applicable √ Not applicable
(IV) Previous adjustments to conversion prices
□ Applicable √ Not applicable
(V) The Company's liabilities, credit changes and cash arrangements for debt repayment in future years
√ Applicable □ Not applicable
At the end of the reporting period, the Company's total liabilities were CNY 12.097 billion, of which current
liabilities were CNY 9.675 billion, non-current liabilities were CNY 2.422 billion, and the balance of liabilities to be
repaid in the next year was CNY 6.977 billion. As of December 31, 2022, the monetary funds that can be withdrawn at
any time were CNY 3.631 billion, the time deposits were CNY 8.877 billion, with small liquidity risk. The Company's
operation is stable in all aspects, its asset structure is reasonable, and its credit standing is good, which can provide stable
and sufficient funds for the payment of convertible corporation bonds interest or the repayment of bond principal in the
coming years.
(VI) Other information on convertible bonds
□ Applicable √ Not applicable
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2022 Annual Report
Section X Financial Reports
I. Audit report
√ Applicable □ Not applicable
All shareholders of Oppein Home Group Inc.:
I. Opinion
We have audited the financial statements of Oppein Home Group Inc. (hereinafter referred to as "Oppein Home"),
including the consolidated and parent company's balance sheet as of December 31, 2022, the consolidated and parent
company's profit statement, the consolidated and parent company's cash flow statement, the consolidated and parent
company's Statement of Changes in Equity and notes to relevant financial statements as of 2022.
In our opinion, the accompanying financial statements have been prepared in accordance with the provisions of the
Accounting Standards for Business Enterprises in all material aspects and fairly reflect the consolidation of Oppein Home
and parent company's financial position as of December 31, 2022, as well as the consolidation and parent company's
operating results and cash flows as of 2022.
II. Basis for Opinion
We performed the audit in accordance with the Chinese Certified Public Accountants Auditing Standards. The
section of "CPA's Responsibility for Auditing Financial Statements" of the audit report further elaborated our
responsibilities under these standards. We are independent of Oppein Home in accordance with the Code of Ethics for
Professional Accountants of the Chinese Institute of Certified Public Accountants ("CICPA Code"), and we have fulfilled
our other ethical responsibilities in accordance with the CICPA Code. We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for issuing an audit opinion.
III. Key audit matters
Key audit matters are the most important matters we believe to audit the current financial statements according to
our professional judgment. The response to these matters is based on the audit of the financial statements as a whole and
the formation of an audit opinion, and we do not express an opinion on these matters separately.
(I) Revenue recognition
1. Description of matters
As described in Section X Financial report "V. Important accounting policies and accounting estimates 38. Revenue"
and "Section X Financial report VII. Notes to major items in the consolidated financial statements 61. Operating income
and operating costs", Oppein Home sales model is mainly divided into dealer exclusive store sales model, direct-sale
exclusive store sales model, bulk user business model and export sales model. In 2022, the operating income was CNY
22.480 billion, and compared with the previous year, operating income increased by 9.97%. As income is the key
operating indicator of Oppein Home, there is an inherent risk that management manipulates revenue recognition in order
to achieve specific goals or expectations. Therefore, we identify revenue recognition as a key audit item.
2. Audit response
The main audit procedures we performed for the revenue recognition of Oppein Home include, but are not limited
to:
(1) Understand and evaluate the internal control design related to Oppein Home income, and test the effectiveness
of the implementation of internal control;
(2) For different sales models, identify the relevant contract terms and conditions related to the transfer of commodity
control, and evaluate whether the revenue recognition time of different sales models meets the requirements of Accounting
Standards for Business Enterprises;
(3) Analytically review the different product categories, sales models and regional sales of Oppein Home, and
analyze the rationality of changes in sales revenue and gross profit margin;
(4) Check the supporting documents related to revenue recognition, including sales contracts, orders, sales invoices,
product delivery orders and logistics transportation documents;
(5) Sample the current sales and balance of customers to verify the authenticity, accuracy and completeness of
revenue;
(6) Perform a cutoff test on revenue and confirm whether revenue is included in the correct accounting period.
(II) Book value of fixed assets and construction in progress
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1. Description of matters
As described in Section X Financial report "V. Important accounting policies and accounting estimates 23. Fixed
assets, 24. Construction in progress" and "VII. Notes to major items in the consolidated financial statements 21. Fixed
assets, 22. Construction in progress", as of December 31, 2022, the total book value of fixed assets and construction in
progress of Oppein Home was CNY 8.119 billion, accounting for 28.38% of the total assets of Oppein Home, mainly the
plant, equipment and engineering of six production bases in Guangzhou, Qingyuan, Tianjin, Wuxi, Chengdu and Wuhan,
which are an important part of Oppein Home assets. As the determination of the book value of fixed assets and
construction in progress involves management judgment and has a significant impact on the financial statements, we
determine the book value of fixed assets and construction in progress of Oppein Home as a key audit item.
2. Audit response
For the book value of fixed assets and construction in progress, our main audit procedures include but are not limited
to:
(1) Understand and test the effectiveness of key internal control design and operation related to the integrity,
existence and accuracy of fixed assets and construction in progress;
(2) Check the project acceptance report or project progress report to evaluate whether the fixed assets are confirmed
in an appropriate period;
(3) Check the new project cost in this period, check the project contract, settlement documents, progress payment
application, invoices and payment vouchers, and check whether the amount of construction in progress is accurate; check
the new fixed assets in the current period, and check the supporting documents such as contracts, invoices and acceptance
certificates;
(4) Check the construction in progress and fixed assets on the spot, implement the fixed assets supervision procedures,
check the status and use of construction in progress and fixed assets, understand whether the construction in progress has
reached the usable status, understand whether there are problems such as backward technology and long-term idleness of
fixed assets, and value about the load rate of fixed assets;
(5) Evaluate the management's estimate of the economic useful life and residual value rate of fixed assets, recalculate
the cumulative depreciation provision amount of fixed assets and check the book records, and check the accuracy of the
cumulative depreciation provision amount;
(6) Check the rationality and accuracy of capitalized expenditure and expensed expenditure, check the capitalized
expenditure incurred during the reporting period by checking the capitalized expenditure with relevant supporting
documents, and evaluate whether it meets the relevant conditions of capitalization.
IV. Other information
The management of Oppein Home (hereinafter referred to as the management) is responsible for other information.
The other information comprises the information included in the 2022 Report of Oppein Home, but does not include the
financial statements and our audit report thereon.
Our audit opinions published in the financial statements do not cover other information and we do not publish any
form of assured conclusion on other information.
In combination with our audit of the financial statements, our responsibility is to read other information. In the
process, we consider whether there is significant inconsistency in other information with the financial statements or what
we have learned during the audit process, or other material misstatement existed.
Based on the work we have performed, if we determine that there is a material misstatement of other information,
we should report that fact. In this regard, we have nothing to report. In this regard, we have nothing to report.
V. Responsibilities of management and governance for the financial statements
The management is responsible for the preparation of financial statements that give a fair view in accordance with
the Accounting Standards for Business Enterprises and for such internal control as management determines is necessary
to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the statements, the management is responsible for assessing the Oppein Home's ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern assumption unless
the management either intends to liquidate Oppein Home or to cease operations, or has no realistic alternative but to do
so.
The governance is responsible for overseeing Oppein Home's financial reporting process.
VI. CPA's responsibilities for the audit of the financial statements
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2022 Annual Report
Our objective is to obtain reasonable assurance as to whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an audit report containing an audit opinion. Reasonable
assurance is a high-level assurance, but it does not guarantee that an audit performed in accordance with auditing standards
can always be discovered when a major misstatement exists. Misstatement may be caused by fraud or error and is
generally considered material if it is reasonably expected that the misstatement, individually or collectively, may affect
the economic decisions made by the users of the financial statements on the basis of the financial statements.
In the process of conducting audit work in accordance with auditing standards, we use professional judgment and
maintain professional suspicion. At the same time, we also perform the following tasks: At the same time, we also perform
the following tasks:
(1) 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. Since fraud may involve collusion, falsification, intentional omission, misrepresentation
or override of internal controls, the risk of failing to detect a material misstatement due to fraud is higher than the risk of
failure to detect a material misstatement due to an error.
(2) Understand the audit-related internal control to design appropriate audit procedures.
(3) Evaluate the appropriateness of accounting policies selected by the Management Layer and the reasonableness
of accounting estimates and related disclosures.
(4) Conclude on the appropriateness of Management's use of the going concern basis of accounting and, based on
the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant
doubt on Oppein Home's ability to continue as a going concern. If we conclude that there is material uncertainty, audit
standards require us to bring the relevant disclosures in the financial statements to the attention of the users of the
statements in the audit report; if the disclosure is insufficient, we should issue a modified opinion. Our conclusions are
based on the information available as of the date of the audit report. However, future events or conditions may cause
Oppein Home to cease to continue as a going concern.
(5) 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.
(6) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within Oppein Home to express an opinion on the financial statements. We are responsible for directing,
supervising and executing the audits on the Group and assume full responsibility for audit opinions.
We communicated with the governance layer of CCCC First Navigation Co., Ltd. on planned audit scope, schedule,
and major audit findings, including communication of the internal control deficiencies that we identified during the audit.
We also provide a statement to the management that we have complied with ethical requirements related to
independence and communicate with the management all relationships and other matters that may reasonably be
considered to affect our independence, as well as related precautions, if applicable.
From the matters communicated with the governance, we determine which matters are most important to the audit
of the current financial statements, thus constituting key audit matters. We describe these matters in the audit report unless
laws and regulations prohibit public disclosure of these matters, or in rare cases, if the negative consequences of
communicating a matter in the audit report are reasonably expected to exceed the benefits in the public interest, we
determine that the matter should not be communicated in the audit report.
Huaxing Certified Public Accounts LLP Certified Public Accountant of China: Feng
(Special General Partnership) Jun
(Project partner)
Certified Public Accountant of China: Fu
Peng
Fuzhou, China April 24, 2023
II. Financial statements
Consolidated Balance Sheet
December 31, 2022
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2022 Annual Report
Prepared by: Oppein Home Group Inc.
Unit: CNY
Item Notes December 31, 2022 December 31, 2021
Current assets:
Cash and bank balances 8,269,801,977.25 6,561,937,418.36
Balances with clearing
companies
Loans to banks and other
financial institutions
Trading financial assets 803,050,958.90 1,677,354,882.08
Derivative financial assets
Notes receivable 110,434,205.93 206,073,671.76
Accounts receivable 1,356,804,850.55 1,011,693,187.67
Financing of accounts receivable
Prepayments 107,436,378.36 148,345,992.40
Premiums receivable
Reinsurance accounts receivable
Reinsurance contract reserves
receivable
Other receivables 197,101,668.61 95,586,738.83
Including: Interest receivable
Dividend receivable
Financial assets purchased under
resale agreements
Inventories 1,414,007,319.05 1,463,127,856.96
Contract assets
Assets held for sale
Non-current assets due within 922,210,739.68
one year
Other current assets 199,747,707.68 78,826,684.25
Total current assets 13,380,595,806.01 11,242,946,432.31
Non-current assets:
Disbursement of loans and
advances
Debt investment
Investment in other creditor's
rights
Long-term receivables
Long-term equity investments 10,518,308.44 15,543,367.11
Investment in other equity 369,234,888.05 310,310,218.60
instruments
Other non-current financial assets 18,968,837.07 60,339,938.23
Investment properties 1,298,575,277.50 1,334,165,016.86
Fixed assets 6,688,959,701.47 6,648,220,021.88
Construction in progress 1,430,244,831.22 347,455,504.19
Productive biological assets
Oil and gas assets
Right-of-use assets 143,259,299.38 24,976,072.05
Intangible assets 1,060,621,773.48 1,064,392,442.29
Capitalized development
expenditure
Goodwill
Long-term prepaid expenses 100,563,403.28 79,715,027.09
Deferred income tax assets 145,239,617.57 121,128,704.45
Other non-current assets 3,964,225,445.14 2,143,540,620.17
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2022 Annual Report
Item Notes December 31, 2022 December 31, 2021
Total non-current assets 15,230,411,382.60 12,149,786,932.92
TOTAL ASSETS 28,611,007,188.61 23,392,733,365.23
Current liabilities:
Short-term loans 4,584,695,003.58 2,389,126,170.93
Borrowings from central bank
Loans from other banks and other
financial institutions
Trading financial liabilities
Derivative financial liabilities
Notes payable 70,366,124.74 139,951,771.71
Accounts payable 1,908,743,254.29 2,018,248,874.11
Receipts in advance 364,393,984.51 885,811,485.23
Contract liabilities 782,289,860.99 1,202,994,206.12
Financial assets sold under
repurchase agreements
Absorption of deposits and
interbank deposits
Receivings from vicariously
traded securities
Receivings from vicariously sold
securities
Employee benefits payable 514,648,710.27 561,430,166.62
Taxes payable 269,205,746.47 261,332,987.33
Other payables 840,531,618.28 667,841,099.64
Including: Interest payable
Dividend payable
Handling charges and
commissions payable
Accounts payable for reinsurance
Liabilities held for sale
Non-current liabilities due within 241,730,653.70 13,286,652.37
one year
Other current liabilities 98,158,653.53 144,631,995.61
Total current liabilities 9,674,763,610.36 8,284,655,409.66
Non-current liabilities:
Reserves for insurance contracts
Long-term loans 5,122,020.57
Debentures payable 1,601,701,819.31
Of which: preferred shares
Perpetual bond
Lease liabilities 101,476,366.50 12,665,970.28
Long-term payables
Long-term employee benefits
payable
Estimated liabilities 43,770.00 59,715.00
Deferred income 469,701,073.18 471,292,317.05
Deferred income tax liabilities 134,412,062.70 96,615,466.91
Other non-current liabilities 109,986,691.00 118,488,814.29
Total non-current liabilities 2,422,443,803.26 699,122,283.53
TOTAL LIABILITIES 12,097,207,413.62 8,983,777,693.20
Owners' equity (or stockholders' equity):
Paid-in capital (or equity capital) 609,151,954.00 609,151,948.00
Other equity instruments 424,351,185.44
Of which: preferred shares
Perpetual bond
108/259
2022 Annual Report
Item Notes December 31, 2022 December 31, 2021
Capital reserve 4,360,144,069.29 4,361,363,807.54
Less: treasury stock
Other comprehensive income 111,426,682.00 59,580,680.56
Special reserve
Surplus reserve 304,575,977.00 304,575,974.00
General risk reserve
Undistributed profits 10,698,497,383.97 9,074,118,319.30
Owners' equity (or shareholders' 16,508,147,251.70 14,408,790,729.40
equity) attributable to the parent
company
Non-controlling interests 5,652,523.29 164,942.64
Total owners' equity (or 16,513,799,774.99 14,408,955,672.04
stockholders' equity)
Total liabilities and owners' 28,611,007,188.61 23,392,733,365.23
equity (or stockholders' equity)
Principal of the Company: Yao Liangsong Principal of accounting: Yao Liangsong Principal of accounting
institution: Wang Huan
109/259
2022 Annual Report
Balance Sheet of Parent Company
December 31, 2022
Prepared by: Oppein Home Group Inc.
Item Notes December 31, 2022 December 31, 2021
Current assets:
Cash and bank balances 6,557,734,232.20 5,229,686,023.69
Trading financial assets 300,071,506.85 971,205,892.83
Derivative financial assets
Notes receivable 109,434,205.93 206,073,671.76
Accounts receivable 1,213,959,851.27 952,202,553.97
Financing of accounts receivable
Prepayments 67,726,582.85 59,493,828.98
Other receivables 6,733,661,374.43 5,433,781,485.95
Including: Interest receivable
Dividend receivable
Inventories 308,854,288.51 405,727,821.66
Contract assets
Assets held for sale
Non-current assets due within 271,289,972.61
one year
Other current assets 62,619,813.82 37,934,970.98
Total current assets 15,625,351,828.47 13,296,106,249.82
Non-current assets:
Debt investment
Investment in other creditor's
rights
Long-term receivables
Long-term equity investments 1,135,214,838.43 726,910,984.40
Investment in other equity 1,015,000.00 1,015,000.00
instruments
Other non-current financial assets
Investment properties 1,298,575,277.50 1,334,165,016.86
Fixed assets 559,154,142.42 582,971,078.72
Construction in progress 18,547,824.67 6,851,735.24
Productive biological assets
Oil and gas assets
Right-of-use assets 16,364,613.01 10,764,315.24
Intangible assets 108,516,973.13 111,757,531.13
Capitalized development
expenditure
Goodwill
Long-term prepaid expenses 15,382,947.15 17,614,583.37
Deferred income tax assets 45,622,433.68 37,265,949.79
Other non-current assets 2,670,545,901.40 773,392,446.15
Total non-current assets 5,868,939,951.39 3,602,708,640.90
TOTAL ASSETS 21,494,291,779.86 16,898,814,890.72
Current liabilities:
Short-term loans 738,607,920.25 1,015,126,170.93
Trading financial liabilities
Derivative financial liabilities
Notes payable 2,885,404,773.60 1,251,055,572.70
Accounts payable 870,752,585.97 790,524,285.54
Receipts in advance 197,885,660.31 427,872,118.87
Contract liabilities 373,876,519.62 577,505,868.61
110/259
2022 Annual Report
Item Notes December 31, 2022 December 31, 2021
Employee benefits payable 144,113,112.86 137,160,220.43
Taxes payable 51,253,871.73 88,494,253.07
Other payables 5,382,917,460.93 4,373,451,321.57
Including: Interest payable
Dividend payable
Liabilities held for sale
Non-current liabilities due within 206,984,890.59 6,645,581.30
one year
Other current liabilities 48,849,360.04 69,444,917.14
Total current liabilities 10,900,646,155.90 8,737,280,310.15
Non-current liabilities:
Long-term loans
Debentures payable 1,601,701,819.31
Of which: preferred shares
Perpetual bond
Lease liabilities 8,953,901.07 4,790,224.81
Long-term payables
Long-term employee benefits
payable
Estimated liabilities 43,770.00 59,715.00
Deferred income 53,562,327.24 75,137,379.17
Deferred income tax liabilities 31,434,480.85 11,683,357.75
Other non-current liabilities 109,986,691.00 118,488,814.29
Total non-current liabilities 1,805,682,989.47 210,159,491.02
TOTAL LIABILITIES 12,706,329,145.37 8,947,439,801.18
Owners' equity (or stockholders' equity):
Paid-in capital (or equity capital) 609,151,954.00 609,151,948.00
Other equity instruments 424,351,185.44
Of which: preferred shares
Perpetual bond
Capital reserve 4,347,036,614.94 4,348,256,353.19
Less: treasury stock
Other comprehensive income
Special reserve
Surplus reserve 304,575,977.00 304,575,974.00
Undistributed profits 3,102,846,903.11 2,689,390,814.35
Total owners' equity (or 8,787,962,634.49 7,951,375,089.54
stockholders' equity)
Total liabilities and owners' 21,494,291,779.86 16,898,814,890.72
equity (or stockholders' equity)
Principal of the Company: Yao Liangsong Principal of accounting: Yao Liangsong Principal of accounting
institution: Wang Huan
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2022 Annual Report
Consolidated Profit Statement
January - December 2022
Unit: CNY
Item Notes 2022 2021
I. Revenue from operations 22,479,503,474.56 20,441,604,591.50
Of which: operating income 22,479,503,474.56 20,441,604,591.50
Interest income
Premium earned
Revenue from handling charges and
commissions
II. Total operating cost 19,432,679,782.07 17,430,601,165.22
Of which: operating cost 15,374,184,716.14 13,978,340,522.59
Interest expense
Expenses from handling charges
and commissions
Surrender value
Net amount of compensation payout
Net provisions for policy reserves
Policy dividend expenses
Reinsurance expenses
Tax and surcharge 168,018,312.28 142,764,878.95
Selling expenses 1,678,894,114.14 1,385,772,778.03
Administrative expenses 1,335,732,876.37 1,131,445,694.80
R&D expense 1,123,248,931.13 907,758,166.73
Financial expenses -247,399,167.99 -115,480,875.88
Of which: interest expenses 152,770,445.92 132,807,862.73
Interest income 380,881,220.85 266,051,753.30
Add: other income 119,639,886.58 91,106,575.44
Return on investment ("-" for loss) 23,426,338.55 20,576,163.13
Including: return on investment in -1,525,058.67 -6,461,645.66
associates and joint ventures
Income from derecognition of
financial assets measured at amortized cost
Exchange gains (loss expressed with
"-")
Net exposure hedging income (loss
expressed with "-")
Income from change in fair value ("- -33,764,275.51 52,292,566.27
" for loss)
Credit impairment loss (loss -99,787,553.98 -108,305,951.75
expressed with "-")
Asset impairment loss (loss
expressed with "-")
Asset disposal income (loss -267,179.73 -6,782,217.94
expressed with "-")
III. Operating profit ("-" for loss) 3,056,070,908.40 3,059,890,561.43
Add: non-operating income 26,533,945.10 32,385,628.55
Less: non-operating expenses 14,919,954.27 17,320,213.90
IV. Total profit ("-" for loss) 3,067,684,899.23 3,074,955,976.08
Less: income tax expenses 385,171,835.08 410,802,592.06
V. Net profit ("-" for net loss) 2,682,513,064.15 2,664,153,384.02
(I) Classification by business continuity
1. Net profit from continuing 2,682,513,064.15 2,664,153,384.02
operations (net loss expressed with "-")
2. Net profit from discontinued
operations (net loss expressed with "-")
112/259
2022 Annual Report
Item Notes 2022 2021
(II) Classification by ownership
1. Net profit attributable to 2,688,425,483.50 2,665,588,441.38
shareholders of the parent company (net
loss expressed with -)
2. Minority shareholders' profit and -5,912,419.35 -1,435,057.36
loss (net loss expressed with "-")
VI. Other comprehensive income - after tax 53,815,494.61 29,623,688.67
(I) Net after tax of other 53,815,494.61 29,623,688.67
comprehensive income attributable to the
owner of the parent company
1. Other comprehensive income that 50,342,531.78 29,903,289.16
cannot be reclassified into profits and losses
(1) Remeasurement of changes in
defined benefit plans
(2) Other comprehensive income that
cannot be transferred to profit and loss
under equity method
(3) Change in fair value of other equity 50,342,531.78 29,903,289.16
instrument investments
(4) Change in fair value of enterprise's
own credit risk
2. Other comprehensive income to be 3,472,962.83 -279,600.49
reclassified into profits and losses
(1) Other comprehensive income of
transferable profit and loss under equity
method
(2) Change in fair value of other debt
investments
(3) Amount of financial assets
reclassified into other comprehensive
income
(4) Provision for credit impairment of
other debt investments
(5) Cash flow hedging reserve
(6) Translation difference of foreign 3,472,962.83 -279,600.49
currency financial statements
(7) Other
(II) Net of tax of other comprehensive
income attributable to minority
shareholders
VII. Total comprehensive income 2,736,328,558.76 2,693,777,072.69
(I) Total comprehensive income 2,742,240,978.11 2,695,212,130.05
attributable to owners of the parent
company
(II) Total comprehensive income -5,912,419.35 -1,435,057.36
attributable to minority shareholders
VIII. Earnings per share (EPS):
(I) Basic earnings per share (CNY/share) 4.41 4.40
(II) Diluted earnings per share (CNY/share) 4.38 4.40
In the event of a business merger under the same control in the current period, the net profit realized by the merged party
before the merger is CNY 0.00, and the net profit realized by the combined party in the previous period is CNY 0.00.
Principal of the Company: Yao Liangsong Principal of accounting: Yao Liangsong Principal of accounting
institution: Wang Huan
113/259
2022 Annual Report
Profit Statement of Parent Company
January - December 2022
Unit: CNY
Item Notes 2022 2021
I. Operating revenue 11,328,325,920.48 10,741,019,908.28
Less: operating cost 9,026,484,085.30 8,335,436,524.34
Tax and surcharge 48,513,540.77 41,081,445.16
Selling expenses 867,008,084.54 653,092,411.77
Administrative expenses 260,061,063.81 246,076,265.62
R&D expense 404,196,243.18 340,632,238.04
Financial expenses -208,351,097.19 -80,190,047.66
Of which: interest expenses 111,591,807.97 84,369,868.45
Interest income 291,122,527.61 179,494,407.47
Add: other income 20,602,877.38 16,074,419.51
Return on investment ("-" for loss) 704,642,873.65 -3,745,892.24
Of which: return on investment in -4,149,938.51 -6,461,645.66
associates and joint ventures
Income from derecognition of
financial assets measured at amortized cost
Net exposure hedging income (loss
expressed with "-")
Income from change in fair value ("-" 71,506.85 15,911,156.14
for loss)
Credit impairment loss (loss expressed -76,213,355.39 -103,599,879.64
with "-")
Asset impairment loss (loss expressed
with "-")
Asset disposal income (loss expressed 73,596.50 265,524.11
with "-")
II. Operating profit (loss expressed with "- 1,579,591,499.06 1,129,796,398.89
")
Add: non-operating income 14,180,566.07 22,062,774.96
Less: non-operating expenses 5,492,773.23 8,553,000.88
III. Total profits (total losses expressed with 1,588,279,291.90 1,143,306,172.97
"-")
Less: income tax expenses 108,807,291.14 157,970,798.95
IV. Net profit (net loss expressed with "-") 1,479,472,000.76 985,335,374.02
(I) Net profit from continuing 1,479,472,000.76 985,335,374.02
operations (net loss expressed with "-")
(II) Net profit from discontinued
operations (net loss expressed with "-")
V. Net of tax of other comprehensive
income
(I) Other comprehensive income not
reclassified into profit or loss subsequently
1. Remeasure changes in defined
benefit plans
2. Other comprehensive income that
cannot be transferred to profit or loss under
the equity method
3. Change in fair value of other
equity instrument investments
4. Changes in fair value of the
Company's own credit risk
(II) Other comprehensive income
that will be reclassified into profit or loss
1. Other comprehensive income that
114/259
2022 Annual Report
Item Notes 2022 2021
can be converted to profit or loss under the
equity method
2. Change in fair value of other debt
investments
3. Amount of financial assets
reclassified into other comprehensive
income
4. Provision for credit impairment of
other creditor's right investment
5. Cash flow hedging reserve
6. Translation difference of foreign
currency financial statements
7. Other
VI. Total comprehensive income 1,479,472,000.76 985,335,374.02
VII. Earnings per share:
(I) Basic earnings per share
(CNY/share)
(II) Diluted earnings per share
(CNY/share)
Principal of the Company: Yao Liangsong Principal of accounting: Yao Liangsong Principal of accounting
institution: Wang Huan
115/259
2022 Annual Report
Consolidated Cash Flow Statement
January - December 2022
Unit: CNY
Item Notes 2022 2021
I. Cash flows from operating activities:
Cash received from sale of goods or 24,493,758,108.70 24,453,251,450.26
rendering of services
Net increase in deposits from
customers and deposits in banks and
other financial institutions
Net increase in borrowings from
central bank
Net increase in loans from other
financial institutions
Cash received from receiving
insurance premiums of original
insurance contracts
Net cash received from reinsurance
business
Net increase in deposits and
investments from policyholders
Cash received from interest,
handling charges and commissions
Net increase in loans from banks and
other financial institutions
Net capital increase in repurchase
business
Net cash received from vicariously
traded securities
Tax refunds 21,099,815.48
Cash received relating to other 488,458,072.86 506,542,876.91
operating activities
Sub-total of cash inflow from 25,003,315,997.04 24,959,794,327.17
operating activities
Cash paid to purchase goods or 15,650,359,672.31 14,937,583,277.60
accept labor services
Net increase in loans and advances to
customers
Net increase in deposits in central
bank and other banks and financial
institutions
Cash paid for original insurance
contract claims
Net increase in loans to banks and
other financial institutions
Cash paid for interest, handling
charges and commissions
Cash paid for policy dividends
Cash paid to and for employees 3,805,430,961.82 3,254,598,408.64
Taxes and fees paid 1,419,087,955.16 1,302,770,073.53
Other cash payments relating to 1,718,677,240.20 1,418,875,897.01
operating activities
Sub-total of cash outflow from 22,593,555,829.49 20,913,827,656.78
operating activities
Net cash flows from operating 2,409,760,167.55 4,045,966,670.39
activities
II. Cash flows from investing activities:
Cash received from disposal of 7,048,238,715.44 3,320,615,263.32
116/259
2022 Annual Report
Item Notes 2022 2021
investments
Cash received from returns on 31,543,690.29 38,736,831.64
investments
Net cash received from the disposal 10,996,064.30 3,463,541.11
of fixed assets, intangible assets and
other long term assets
Net cash received from the disposal
of subsidiaries and other business
entities
Other cash received relating to 91,497,876.71 43,398,342.05
investing activities
Sub-total of cash inflow from 7,182,276,346.74 3,406,213,978.12
investing activities
Cash paid to acquire fixed assets, 2,257,299,834.51 1,234,793,995.85
intangible assets and other long-term
assets
Cash paid to acquire investments 11,937,991,000.00 4,236,550,000.00
Net increase in pledge loans
Net cash paid to acquire subsidiaries 33,160,265.17
and other business units
Other cash paid relating to investing 100,000,000.00
activities
Sub-total of cash outflow from 14,328,451,099.68 5,471,343,995.85
investing activities
Net cash flows from investing -7,146,174,752.94 -2,065,130,017.73
activities
III. Cash flows from financing activities:
Cash received from capital 2,006,400,871.32 1,600,000.00
contribution
Of which: cash received by the 11,400,000.00 1,600,000.00
subsidiary from absorbing the
investments of minority stockholders
Cash received from borrowings 6,473,997,889.26 3,675,893,338.14
Other cash received relating to 3,218,348.22 481,821.60
financing activities
Sub-total of cash inflow from 8,483,617,108.80 3,677,975,159.74
financing activities
Cash paid for settlement of debt 4,071,309,737.10 2,920,830,972.93
Cash payments for interest expenses 1,229,680,952.88 843,199,431.22
and distribution of dividends or profits
Of which: dividends and profits paid
to minority stockholders by the
subsidiary
Other cash payments relating to 197,310,244.15 100,981,922.25
financing activities
Sub-total of cash flows from financing 5,498,300,934.13 3,865,012,326.40
activities
Net cash flows from financing 2,985,316,174.67 -187,037,166.66
activities
IV. Effect of exchange rate changes 39,711,066.92 -10,450,359.35
on cash and cash equivalents
V. Net increase in cash and cash -1,711,387,343.80 1,783,349,126.65
equivalents
Add: opening balance of cash and 5,341,817,438.33 3,558,468,311.68
cash equivalents
VI. Closing balance of cash and cash 3,630,430,094.53 5,341,817,438.33
equivalents
Principal of the Company: Yao Liangsong Principal of accounting: Yao Liangsong Principal of accounting
117/259
2022 Annual Report
institution: Wang Huan
118/259
2022 Annual Report
Cash Flow Statement of Parent Company
January - December 2022
Unit: CNY
Item Notes 2022 2021
I. Cash flows from operating activities:
Cash received from sale of goods or 12,088,681,859.20 11,890,961,591.54
rendering of services
Tax refunds
Cash received relating to other 216,180,891.80 2,216,632,556.05
operating activities
Sub-total of cash inflow from 12,304,862,751.00 14,107,594,147.59
operating activities
Cash paid to purchase goods or 8,090,005,136.27 8,337,870,244.46
accept labor services
Cash paid to and for employees 828,168,197.12 703,592,135.61
Taxes and fees paid 478,460,499.69 453,102,031.63
Other cash payments relating to 1,077,760,152.58 603,108,750.87
operating activities
Sub-total of cash outflow from 10,474,393,985.66 10,097,673,162.57
operating activities
Net cash flows from operating 1,830,468,765.34 4,009,920,985.02
activities
II. Cash flows from investing activities:
Cash received from disposal of 5,771,620,536.68 1,938,615,263.32
investments
Cash received from returns on 715,939,088.46 6,028,835.62
investments
Net cash received from the disposal 9,682,417.77 6,995,814.43
of fixed assets, intangible assets and
other long term assets
Net cash received from the disposal
of subsidiaries and other business
entities
Other cash received relating to 91,497,876.71 43,398,342.05
investing activities
Sub-total of cash inflow from 6,588,739,919.62 1,995,038,255.42
investing activities
Cash paid to acquire fixed assets, 169,420,688.89 433,805,436.45
intangible assets and other long-term
assets
Cash paid to acquire investments 10,900,841,000.00 2,646,100,000.00
Net cash paid to acquire subsidiaries
and other business units
Other cash paid relating to investing 100,000,000.00
activities
Sub-total of cash outflow from 11,170,261,688.89 3,079,905,436.45
investing activities
Net cash flows from investing activities -4,581,521,769.27 -1,084,867,181.03
III. Cash flows from financing activities:
Cash received from capital 1,995,000,871.32
contribution
Cash received from borrowings 2,627,997,889.26 2,301,893,338.14
Other cash received relating to
financing activities
Sub-total of cash inflow from 4,622,998,760.58 2,301,893,338.14
financing activities
Cash paid for settlement of debt 2,696,576,242.49 2,122,830,972.93
Cash payments for interest expenses 1,150,984,625.97 793,484,789.52
119/259
2022 Annual Report
Item Notes 2022 2021
and distribution of dividends or profits
Other cash payments relating to 123,016,539.83 72,676,433.65
financing activities
Sub-total of cash flows from financing 3,970,577,408.29 2,988,992,196.10
activities
Net cash flows from financing 652,421,352.29 -687,098,857.96
activities
IV. Effect of exchange rate changes 39,495,530.91 -10,130,340.77
on cash and cash equivalents
V. Net increase in cash and cash -2,059,136,120.73 2,227,824,605.26
equivalents
Add: opening balance of cash and cash 4,061,868,195.49 1,834,043,590.23
equivalents
VI. Closing balance of cash and cash 2,002,732,074.76 4,061,868,195.49
equivalents
Principal of the Company: Yao Liangsong Principal of accounting: Yao Liangsong Principal of accounting
institution: Wang Huan
120/259
2022 Annual Report
Consolidated Statement of Changes in Equity
January - December 2022
Unit: CNY
2022
Owners' equity attributable to the parent
Other equity instruments Less
Gen Non-
Paid-in : Other Spe Total
Item eral controlli
capital Prefer Perpe Capital treas comprehe cial Surplus Undistribut Ot owners'
risk Sub-total ng
(or equity ence tual Other reserve ury nsive rese reserve ed profits her equity
reser interests
capital) shares bond stoc income rve
ve
k
I. Closing
balance of 609,151, 4,361,363, 59,580,6 304,575, 9,074,118,3 14,408,790, 164,942. 14,408,955,
previous 948.00 807.54 80.56 974.00 19.30 729.40 64 672.04
year
Add:
Change in
accounting
policy
Correction
of
previous
errors
A business
combinati
on
involving
enterprises
under
common
control
Other
II. Balance
at the
609,151, 4,361,363, 59,580,6 304,575, 9,074,118,3 14,408,790, 164,942. 14,408,955,
beginning
948.00 807.54 80.56 974.00 19.30 729.40 64 672.04
of this
year
III. 6.00 424,351, - 51,846,0 3.00 1,624,379,0 2,099,356,5 5,487,58 2,104,844,1
121/259
2022 Annual Report
Amount 185.44 1,219,738. 01.44 64.67 22.30 0.65 02.95
increase/d 25
ecrease of
the current
period ("-"
for
decreases)
(I) Total
-
comprehen 53,815,4 2,688,425,4 2,742,240,9 2,736,328,5
5,912,41
sive 94.61 83.50 78.11 58.76
9.35
income
(II)
Contributi
-
on and 424,351, 423,131,45 11,400,0 434,531,45
6.00 1,219,738.
withdrawa 185.44 3.19 00.00 3.19
25
l of capital
by owners
1.
Common
stock 424,351, 424,352,05 11,400,0 435,752,05
6.00 865.32
contribute 185.44 6.76 00.00 6.76
d by
owners
2. Capital
invested
by holders
of other
equity
instrument
s
3. Share-
based
- - -
payment
1,220,603. 1,220,603.5 1,220,603.5
recognized
57 7 7
in owners'
equity
4. Others
(III) Profit - - -
3.00
distributio 1,066,015,9 1,066,015,9 1,066,015,9
122/259
2022 Annual Report
n 12.00 09.00 09.00
1.
Provision
3.00 -3.00
for surplus
reserve
2.
Withdrawa
l of
general
risk
reserves
3.
Distributio
- - -
n to
1,066,015,9 1,066,015,9 1,066,015,9
owners (or
09.00 09.00 09.00
shareholde
rs)
4. Others
(IV)
Internal -
1,969,493.1
carryover 1,969,49
7
of owner's 3.17
equity
1. Capital
surplus
transfer to
capital (or
equity
capital)
2. Surplus
reserve
transfer to
capital (or
equity
capital)
3. Surplus
reserve
offsetting
losses
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2022 Annual Report
4. Changes
in defined
benefit
plans
carried
forward to
retained
earnings
5.
Retained
income
carried -
1,969,493.1
forward 1,969,49
7
from other 3.17
comprehen
sive
income
6. Others
(V)
Special
reserve
1.
Withdraw
of the
current
period
2. Use of
the current
period
(VI)
Others
IV. Ending
balance of 609,151, 424,351, 4,360,144, 111,426, 304,575, 10,698,497, 16,508,147, 5,652,52 16,513,799,
current 954.00 185.44 069.29 682.00 977.00 383.97 251.70 3.29 774.99
period
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2022 Annual Report
2021
Owners' equity attributable to the parent
Other equity instruments Less
Gen Non-
Paid-in : Other Spe Total
Item eral controlli
capital Prefer Perpe Capital treas compreh cial Surplus Undistribu Ot owners'
risk Sub-total ng
(or equity ence tual Other reserve ury ensive rese reserve ted profits her equity
reser interests
capital) shares bond stoc income rve
ve
k
I. Closing
balance of 601,531,9 112,041,7 3,743,673, 29,956,9 288,523,4 7,149,700, 11,925,427, 11,925,427,
previous 02.00 43.43 599.49 91.89 69.29 284.23 990.33 990.33
year
Add: error
correction
in the early
stage of
accounting
policy
change
A business
combinatio
n
involving
enterprises
under
common
control
Other
II. Balance
at the 601,531,9 112,041,7 3,743,673, 29,956,9 288,523,4 7,149,700, 11,925,427, 11,925,427,
beginning 02.00 43.43 599.49 91.89 69.29 284.23 990.33 990.33
of this year
III.
Amount
-
increase/de 7,620,046 617,690,20 29,623,6 16,052,50 1,924,418, 2,483,362,7 164,942 2,483,527,6
112,041,7
crease of .00 8.05 88.67 4.71 035.07 39.07 .64 81.71
43.43
the current
period ("-"
125/259
2022 Annual Report
for
decreases)
(I) Total
-
comprehen 29,623,6 2,665,588, 2,695,212,1 2,693,777,0
1,435,0
sive 88.67 441.38 30.05 72.69
57.36
income
(II)
Contributi
on and 7,620,046 617,690,20 625,310,25 1,600,0 626,910,25
withdrawal .00 8.05 4.05 00.00 4.05
of capital
by owners
1.
Common
stock 7,620,046 605,954,75 613,574,79 1,600,0 615,174,79
contribute .00 1.65 7.65 00.00 7.65
d by
owners
2. Capital
invested
by holders
of other
equity
instrument
s
3. Share-
based
payment 11,735,456 11,735,456. 11,735,456.
recognized .40 40 40
in owners'
equity
4. Others
(III) Profit - - -
16,052,50
distributio 741,170,40 725,117,90 725,117,90
4.71
n 6.31 1.60 1.60
1.
-
Provision 16,052,50
16,052,504
for surplus 4.71
.71
reserve
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2022 Annual Report
2.
Withdrawa
l of
general
risk
reserves
3.
Distributio
- - -
n to
725,117,90 725,117,90 725,117,90
owners (or
1.60 1.60 1.60
shareholde
rs)
4. Others
(IV)
Internal
carryover
of owner's
equity
1. Capital
surplus
transfer to
capital (or
equity
capital)
2. Surplus
reserve
transfer to
capital (or
equity
capital)
3. Surplus
reserve
offsetting
losses
4. Changes
in defined
benefit
plans
carried
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2022 Annual Report
forward to
retained
earnings
5.
Retained
income
carried
forward
from other
comprehen
sive
income
6. Others
(V)
Special
reserve
1.
Withdraw
of the
current
period
2. Use of
the current
period
- - -
(VI)
112,041,7 112,041,74 112,041,74
Others
43.43 3.43 3.43
IV. Ending
balance of 609,151,9 4,361,363, 59,580,6 304,575,9 9,074,118, 14,408,790, 164,942 14,408,955,
current 48.00 807.54 80.56 74.00 319.30 729.40 .64 672.04
period
Principal of the Company: Yao Liangsong Principal of accounting: Yao Liangsong Principal of accounting institution: Wang Huan
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2022 Annual Report
Statement of Changes in Equity of the Parent Company
January - December 2022
Unit: CNY
2022
Paid-in Other equity instruments Speci
Less: Other
Item capital (or al Surplus Undistributed Total owners'
Preferen Perpetu Capital reserve treasur comprehensi
equity Other reserv reserve profits equity
ce shares al bond y stock ve income
capital) e
I. Closing
609,151,948. 4,348,256,353. 304,575,974. 2,689,390,814. 7,951,375,089.
balance of
00 19 00 35 54
previous year
Add: Change
in accounting
policy
Correctio
n of
previous
errors
Other
II. Balance at
609,151,948. 4,348,256,353. 304,575,974. 2,689,390,814. 7,951,375,089.
the beginning
00 19 00 35 54
of this year
III. Amount
increase/decrea
se of the 424,351,185.
6.00 - - -1,219,738.25 - - - 3.00 413,456,088.76 836,587,544.95
current period 44
("-" for
decreases)
(I) Total
1,479,472,000. 1,479,472,000.
comprehensive
76 76
income
(II)
Contribution
424,351,185.
and withdrawal 6.00 -1,219,738.25 423,131,453.19
44
of capital by
owners
1. Common 424,351,185.
6.00 865.32 424,352,056.76
stock 44
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2022 Annual Report
contributed by
owners
2. Capital
invested by
holders of
other equity
instruments
3. Share-based
payment
-1,220,603.57 -1,220,603.57
recognized in
owners' equity
4. Others
- -
(III) Profit
3.00 1,066,015,912. 1,066,015,909.
distribution
00 00
1. Provision for
3.00 -3.00
surplus reserve
2. Distribution - -
to owners (or 1,066,015,909. 1,066,015,909.
shareholders) 00 00
3. Others
(IV) Internal
carryover of
owner's equity
1. Capital
surplus transfer
to capital (or
equity capital)
2. Surplus
reserve transfer
to capital (or
equity capital)
3. Surplus
reserve
offsetting
losses
4. Changes in
defined benefit
plans carried
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2022 Annual Report
forward to
retained
earnings
5. Retained
income carried
forward from
other
comprehensive
income
6. Others
(V) Special
reserve
1. Withdraw of
the current
period
2. Use of the
current period
(VI) Others
IV. Ending
609,151,954. 424,351,185. 4,347,036,614. 304,575,977. 3,102,846,903. 8,787,962,634.
balance of
00 44 94 00 11 49
current period
2021
Paid-in Other equity instruments Speci
Less: Other
Item capital (or al Surplus Undistributed Total owners'
Preferen Perpetu Capital reserve treasur comprehensi
equity Other reserv reserve profits equity
ce shares al bond y stock ve income
capital) e
I. Closing
601,531,902. 112,041,743. 3,730,566,145. 288,523,469. 2,445,225,846. 7,177,889,106.
balance of
00 43 14 29 64 50
previous year
Add: Change
in accounting
policy
Correctio
n of
previous
errors
Other
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2022 Annual Report
II. Balance at
601,531,902. 112,041,743. 3,730,566,145. 288,523,469. 2,445,225,846. 7,177,889,106.
the beginning
00 43 14 29 64 50
of this year
III. Amount
increase/decrea
-
se of the 16,052,504.7
7,620,046.00 112,041,743. 617,690,208.05 244,164,967.71 773,485,983.04
current period 1
43
("-" for
decreases)
(I) Total
comprehensive 985,335,374.02 985,335,374.02
income
(II)
Contribution
and withdrawal 7,620,046.00 617,690,208.05 625,310,254.05
of capital by
owners
1. Common
stock
7,620,046.00 605,954,751.65 613,574,797.65
contributed by
owners
2. Capital
invested by
holders of
other equity
instruments
3. Share-based
payment
11,735,456.40 11,735,456.40
recognized in
owners' equity
4. Others
(III) Profit 16,052,504.7 - -
distribution 1 741,170,406.31 725,117,901.60
1. Provision
16,052,504.7
for surplus -16,052,504.71
1
reserve
2. Distribution
- -
to owners (or
725,117,901.60 725,117,901.60
shareholders)
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2022 Annual Report
3. Others
(IV) Internal
carryover of
owner's equity
1. Capital
surplus transfer
to capital (or
equity capital)
2. Surplus
reserve transfer
to capital (or
equity capital)
3. Surplus
reserve
offsetting
losses
4. Changes in
defined benefit
plans carried
forward to
retained
earnings
5. Retained
income carried
forward from
other
comprehensive
income
6. Others
(V) Special
reserve
1. Withdraw of
the current
period
2. Use of the
current period
-
-
(VI) Others 112,041,743.
112,041,743.43
43
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2022 Annual Report
IV. Ending
609,151,948. 4,348,256,353. 304,575,974. 2,689,390,814. 7,951,375,089.
balance of
00 19 00 35 54
current period
Principal of the Company: Yao Liangsong Principal of accounting: Yao Liangsong Principal of accounting institution: Wang Huan
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2022 Annual Report
III. Basic information of the Company
1. Company overview
√ Applicable □ Not applicable
Oppein Home Group Inc. (hereinafter referred to as the "company"), formerly known as Guangzhou Kangjie Kitchen
Equipment Co., Ltd., was invested and established by Hu Xuhui and Yao Liangbai with monetary funds of CNY 450,000
and CNY 50,000 respectively on July 1, 1994.
In May 1997, Yao Liangsong increased his capital by CNY 1 million with monetary funds, and the registered capital
of the Company was changed to CNY 1.5 million after the capital increase; in October 1997, Hu Xuhui transferred CNY
350,000 and CNY 100,000 of his CNY 450,000 shares to Yao Liangsong and Yao Liangbai respectively. After this equity
change, Yao Liangsong and Yao Liangbai held 90% and 10% respectively.
From 2001 to 2011, Yao Liangsong and Yao Liangbai increased their capital by CNY 88.65 million and CNY 9.85
million respectively, and the registered capital after the capital increase was CNY 100 million, of which Yao Liangsong
invested CNY 90 million, accounting for 90.00% of the registered capital of the Company, and Yao Liangbai invested
CNY 10 million, accounting for 10.00% of the registered capital of the Company. The name of the Company was changed
to Guangdong Oppein Home Group Co., Ltd., with the registration number of enterprise legal person business license of
440101000002519.
In October 2013, according to the approved sponsor agreement and articles of association, Yao Liangsong and Yao
Liangbai, the former shareholders, were the sponsors to reorganize Guangdong Oppein Home Group Co., Ltd. into a joint
stock limited company. The Company converted audited net assets as of August 31, 2013 into 320 million shares, with a
par value of CNY 1 per share. After the change, the registered capital of the Company was CNY 320 million, of which
Yao Liangsong contributed CNY 288 million, accounting for 90.00% of the Company's registered capital, and Yao
Liangbai contributed CNY 32 million, accounting for 10.00% of the Company's registered capital.
In November 2013, other 111 natural persons including Yao Liangbai increased their capital by CNY 23,503,096.00,
and the registered capital after the increase was CNY 343,503,096.00. Including: Yao Liangsong contributed CNY
288,000,000.00, accounting for 83.8420% of the registered capital after the change; Yao Liangbai contributed CNY
36,841,654.00, accounting for 10.7253% of the registered capital after the change; other 110 natural persons including
Tan Qinxing contributed CNY 18,661,442.00, accounting for 5.4327% of the registered capital after the change.
In December 2013, Hongxing Xizhao Investment Co., Ltd., Ganzhou Tianou Investment Partnership (Limited
Partnership) and Beijing MidSky Investment Management Co., Ltd. increased their capital by CNY 18,641,697.00, CNY
7,886,872.00 and CNY 3,549,447.00 respectively, and the cumulative paid in capital after the increase was CNY
373,581,112.00. Including: Yao Liangsong contributed CNY 288,000,000.00, accounting for 77.0917% of the registered
capital after the change; Yao Liangbai contributed CNY 36,841,654.00, accounting for 9.8618% of the registered capital
after the change; Hongxing Xizhao Investment Co., Ltd. contributed CNY 18,641,697.00, accounting for 4.9900% of the
registered capital after the change; Ganzhou Tianou Investment Partnership (Limited Partnership) contributed CNY
7,886,872.00, accounting for 2.1112% of the registered capital after the change; Beijing MidSky Investment Management
Co., Ltd. contributed CNY 3,549,447.00, accounting for 0.9501% of the registered capital after the change; 110 natural
persons including Tan Qinxing contributed CNY 18,661,442.00, accounting for 4.9952% of the registered capital after
the change.
In March 2017, according to the Reply on the Approval of the Initial Public Offering of Shares of Oppein Home
Group Inc. issued by the CSRC (ZJXK [2017] No. 311), the Company publicly issued 41,510,000.00 CNY ordinary
shares (A shares) to the public, and the Company's share capital was changed to 415,091,112.00 shares after issuance.
In June 2017, according to the resolution of the general meeting of shareholders and the resolution of the board of
directors of the Company, the Company granted 5,505,352.00 shares of CNY restricted shares to 835 equity incentive
targets, and the share capital of the Company was changed to 420,596,464.00 shares after the grant.
In June 2018, the Company repurchased and cancelled 313,010 restricted shares granted to 48 resignation incentive
targets but not yet lifted the restrictions on sales, and completed the registration procedures for industrial and commercial
changes to reduce registered capital in October 2018. After the completion of this repurchase, the Company's share capital
was changed to 420,283,454.00 shares.
In January 2019, the Company repurchased and cancelled 91,903 restricted shares granted to 33 resignation incentive
targets but not yet lifted the restrictions on sales, and completed the registration procedures for industrial and commercial
changes to reduce registered capital in March 2019. After the completion of this repurchase, the Company's share capital
was changed to 420,191,551.00 shares.
In May 2019, the Company repurchased and cancelled 21,386 restricted shares granted to 8 resignation incentive
targets but not yet lifted the restrictions on sales, and completed the registration procedures for industrial and commercial
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2022 Annual Report
changes to reduce registered capital in November 2019. After the completion of this repurchase, the Company's share
capital was changed to 420,170,165.00 shares.
In August 2019, with the approval of "ZJXK [2019] No. 475" of the CSRC, the Company publicly issued 14.95
million convertible corporation bonds with a total issuance amount of CNY 1.495 billion. The "Oppein convertible bonds"
issued this time can be converted into shares from February 24, 2020. In 2020, a total of 13,292,696.00 convertible bonds
were converted into shares.
In July 2020, according to the profit distribution plan for 2019 deliberated and approved by the general meeting of
shareholders of the Company, the Company increased 0.4 shares per share and 168,069,041.00 shares to all shareholders
based on the total capital stock of the Company before the implementation of the profit distribution plan of 420,172,603
shares (including the number of convertible bonds converted before the implementation of the profit distribution plan).
At the end of 2020, after the Company's equity distribution and convertible bond conversion, the Company's share
capital was changed to 601,531,902.00 shares.
In 2021, the Company's convertible bonds were converted into 7,620,046 shares, and after the conversion, the
Company's total share capital increased to 609,151,948.00 shares.
In July 2021, according to the resolution of the general meeting of shareholders and the resolution of the board of
directors of the Company, the Company granted stock options to the incentive targets. In September 2022, the incentive
targets exercised 6 shares, and the Company's share capital was changed to 609,151,954.00 shares after exercise.
2. Scope of consolidated financial statements
√ Applicable □ Not applicable
The Company includes all subsidiaries in the scope of consolidated financial statements. In 2022, 12 newly
established subsidiaries of the Company were included in the scope of consolidated financial statements from the date of
establishment, one subsidiary was acquired and included in the scope of consolidated financial statements from the date
of acquisition, and there was no cancellation of subsidiaries in the current period. For details, see "Section X Financial
report VIII. Change of consolidation scope" and "Section X Financial report IX. Rights and interests in other entities".
IV. Basis of preparation of financial statements
1. Basis of preparation
On the basis of continuous operation, according to the actual transactions and events, the Company shall recognize
and measure them in accordance with the Accounting Standards for Business Enterprises - Basic Standards and other
specific accounting standards, application guidelines, interpretation of standards and other relevant provisions (hereinafter
collectively referred to as the accounting standards for business enterprises). On this basis, the financial statements are
prepared in accordance with the provisions of the Rules for the Compilation and Reporting of Information Disclosure of
Companies Offering Securities Publicly No.15 - General Provisions on Financial Reporting (revised in 2014) of the
CSRC.
2. Going concern
√ Applicable □ Not applicable
The Company has the ability to continue as a going concern for at least 12 months from the end of the reporting
period, and there are no major events affecting the ability to continue as a going concern.
V. Significant accounting policies and accounting estimates
Tips on specific accounting policies and accounting estimates:
√ Applicable □ Not applicable
The Company determines the specific accounting policies and accounting estimates according to the actual
production and operation characteristics, which are mainly reflected in Section X Financial report V. Bad debt provision
method of receivables in important accounting policies and estimates, inventory valuation and provision for depreciation,
depreciation of fixed assets and amortization of intangible assets, revenue recognition, etc.
1. Statement on Compliance with 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 financial situation and
operating results, changes in shareholders' equity, cash flow and other information.
2. Accounting period
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2022 Annual Report
The fiscal year of the Company is from January 1 to December 31 of the Gregorian calendar.
3. Operating cycle
√ Applicable □ Not applicable
The Company takes 12 months as a business cycle.
4. Functional currency
The Company's bookkeeping V base currency is CNY.
5. Accounting treatment methods of business merger under the common control and not under the common
control
√ Applicable □ Not applicable
1. Business merger under the same control: The assets and liabilities obtained by the Company in the business merger
shall be measured according to the book value of the assets and liabilities of the merged party (including the goodwill
formed by the acquisition of the merged party by the final controller) in the consolidated financial statements of the final
controller on the merger date. The difference between the book value of net assets obtained in the merger and the book
value of the merger consideration paid (or the total face value of the shares issued) shall be adjusted for the capital
premium or equity premium in the capital reserve. If the capital premium or equity premium in the capital reserve is
insufficient to offset, the retained income shall be adjusted.
2. Business merger not under the same control: On the acquisition date, the Company shall measure the assets paid,
liabilities incurred or assumed as the consideration for business combination at fair value, and the difference between the
fair value and its book value shall be included in the current profits and losses. The Company recognizes the difference
between the merger cost and the fair value share of the identifiable net assets of the acquiree obtained in the merger as
goodwill; the difference between the merger cost and the fair value share of the identifiable net assets of the acquiree
obtained in the merger shall be reviewed for the fair value of the assets and liabilities obtained in the merger, the non-
cash assets as merger consideration or the equity securities issued. The review results show that the fair value of the
identifiable assets and liabilities determined is appropriate. The difference between the cost of business merger and the
fair value share of the identifiable net assets obtained by the acquiree shall be included in the non-operating income of
the current period of merger.
The business merger not under the same control is realized step by step through multiple transactions, and the merger
cost is the sum of the consideration paid on the acquisition date and the fair value of the equity of the acquiree held before
the acquisition date on the acquisition date; the equity of the acquiree held before the acquisition date shall be re measured
at the fair value on the acquisition date, and the difference between the fair value and its book value shall be included in
the current investment income. Other comprehensive income of the long-term equity investment of the acquiree held
before the acquisition date under the equity method shall be accounted for on the same basis as the direct disposal of
related assets or liabilities by the investee. Changes in shareholders' equity other than net profit and loss, other
comprehensive income and profit distribution shall be transferred to the current profits and losses on the acquisition date.
For other equity instrument investments held by the acquiree before the acquisition date, the changes in fair value of the
equity instrument investment accumulated in other comprehensive income before the acquisition date are transferred to
retained profits and losses.
3. Treatment of related expenses in business merger: Intermediary expenses such as audit, legal services, evaluation
and consultation and other related management expenses incurred in business merger shall be included in the current
profits and losses when incurred; the transaction costs of equity securities or debt securities issued as merger consideration
are included in the initial recognition amount of equity securities or debt securities.
6. Preparation method for the consolidated financial statements
√ Applicable □ Not applicable
1. Scope of preparation of consolidated statements
The scope of consolidation of the consolidated financial statements is determined on the basis of control, including
not only subsidiaries determined based on voting rights (or similar rights) themselves or in combination with other
arrangements, but also structured entities determined based on one or more contractual arrangements. Control means the
investor has the power over the investee and enjoys the variable return through participating in activities related to the
investee, and has the ability to the investor's return by using the power over the investee.
2. Procedures for consolidation
The consolidated financial statements are prepared on the basis of the financial statements of the Company and its
subsidiaries and in accordance with other relevant information.
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2022 Annual Report
The Company unifies the accounting policies and accounting periods adopted by subsidiaries to make the accounting
policies and accounting periods adopted by subsidiaries consistent with the Company. In the preparation of the
consolidated financial statements, the principle of materiality shall be followed to offset the internal transactions, intra-
transactions and equity investment projects between the parent company and subsidiaries, and between subsidiaries and
subsidiaries.
The equity and profits and losses attributable to minority shareholders of subsidiaries are listed separately under the
owner's equity item in the consolidated balance sheet and the net profit item in the consolidated income statement. If the
current losses shared by a minority shareholder of a subsidiary exceed the balances arising from the shares enjoyed by
the minority shareholder in the owners' equity of the subsidiary at the beginning of the period, minority equity will be
offset accordingly.
(1) Increase subsidiaries or business
During the reporting period, the opening balance of the consolidated balance sheet shall be adjusted when the
consolidated balance sheet is prepared for subsidiaries or businesses increased due to business merger under the same
control; when preparing the profit statement, the income, expenses and profits of the subsidiary or business from the
beginning of the current period to the end of the reporting period shall be included in the consolidated profit statement;
when consolidating the cash flow statement, the cash flow of the subsidiary or business from the beginning of the current
period to the end of the reporting period shall be included in the consolidated cash flow statement; at the same time, the
relevant items of the comparative statement shall be adjusted, and the consolidated reporting entity shall be deemed to
have existed since the time when the final controller began to control.
During the reporting period, the opening balance of the consolidated balance sheet shall not be adjusted when the
consolidated balance sheet is prepared for subsidiaries or businesses increased by business merger or other means not
under the same control. When preparing the income statement, the income, expenses and profits of the subsidiary or
business from the acquisition date to the end of the reporting period shall be included in the consolidated income statement.
When preparing the cash flow statement, the cash flow of the subsidiaries from the acquisition date to the end of the
reporting period shall be included in the consolidated cash flow statement.
The Company prepares the consolidated financial statements based on the amount of identifiable assets, liabilities
and contingent liabilities determined on the basis of fair value on the acquisition date as reflected in the individual
financial statements of subsidiaries on the balance sheet date of the current period. The difference between the merger
cost and the fair value share of the identifiable net assets of the acquiree obtained in the merger is recognized as goodwill.
The difference between the merger cost and the fair value share of the identifiable net assets of the acquiree obtained in
the merger shall be included in the current profits and losses after review.
If the business merger not under the same control is realized step by step through multiple transactions, in the
consolidated financial statements, the equity of the acquiree held before the acquisition date shall be re-measured
according to the fair value of the equity on the acquisition date, and the difference between the fair value and its book
value shall be included in the current investment income. Other comprehensive income of the long-term equity investment
of the acquiree held before the acquisition date under the equity method shall be accounted for on the same basis as the
direct disposal of related assets or liabilities by the investee. Changes in shareholders' equity other than net profit and loss,
other comprehensive income and profit distribution shall be transferred to the current profits and losses on the acquisition
date. For other equity instrument investments held by the acquiree before the acquisition date, the changes in fair value
of the equity instrument investment accumulated in other comprehensive income before the acquisition date are
transferred to retained profits and losses.
(2) Disposal of subsidiaries or businesses
A. General treatment method
During the reporting period, if the Company disposed of a subsidiary or business, the income, expenses and profits
of the subsidiary or business from the beginning of the period to the disposal date were included in the consolidated
income statement; the cash flow of the subsidiary or business from the beginning of the period to the disposal date is
included in the consolidated cash flow statement.
If the Company loses its control over the original subsidiary due to the disposal of part of the equity investment and
other reasons, in the consolidated financial statements, the remaining equity shall be re-measured at its fair value on the
date of loss of control. The difference between the sum of the consideration obtained from the disposal of equity and the
fair value of the remaining equity minus the share of the net assets of the original subsidiary continuously calculated from
the acquisition date or the merger date calculated according to the original shareholding ratio shall be included in the
investment income of the current period when the control right is lost, and the goodwill shall be offset. Other
comprehensive income related to equity investment in the original subsidiary shall be accounted for on the same basis as
the direct disposal of related assets or liabilities by the subsidiary when the control right is lost. Shareholders' equity
recognized due to changes in other shareholders' equity related to the original subsidiary other than net profit and loss,
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2022 Annual Report
other comprehensive income and profit distribution shall be transferred to current profits and losses when the control right
is lost.
B. Disposal of equity step by step to loss of control
Where an enterprise disposes of equity investment in a subsidiary step by step through multiple transactions until it
loses control, if the transactions of disposing of equity investment in a subsidiary until it loses control belong to a package
transaction, the transactions shall be accounted for as a transaction of disposing of a subsidiary and losing control;
however, before the loss of control, the difference between each disposal price and the share of net assets of the subsidiary
corresponding to the disposal of investment shall be recognized as other comprehensive income in the consolidated
financial statements, and shall be transferred to the profits and losses of the current period when the control is lost.
If the terms, conditions and economic impact of the disposal of equity investments in subsidiaries conform to one or
more of the following circumstances, it usually indicates that multiple transactions should be accounted for as a package
transaction:
(A) These transactions were entered into simultaneously or with mutual influence in mind;
(B) These transactions as a whole can achieve a complete business outcome;
(C) The occurrence of one transaction depends on the occurrence of at least one other transaction;
(D) One transaction is uneconomical when considered alone, but it is economical when considered with other
transactions.
(3) Purchase of minority shares of subsidiaries
The difference between the long-term equity investment newly obtained by the Company due to the purchase of
minority equity and the share of identifiable net assets attributable to the subsidiary calculated according to the new
shareholding ratio from the purchase date (or the merger date) shall be adjusted for the capital premium or equity premium
in the capital reserve in the consolidated balance sheet. If the capital premium or equity premium in the capital reserve is
insufficient to offset, the retained earnings shall be adjusted.
(4) Disposal of partial equity investment in subsidiaries without loss of control
Without losing control, the difference between the disposal price obtained from the partial disposal of long-term
equity investment in subsidiaries and the share of net assets continuously calculated by subsidiaries from the acquisition
date or the merger date corresponding to the disposal of long-term equity investment shall be adjusted for the capital
premium or equity premium in the capital reserve in the consolidated balance sheet. If the capital premium or equity
premium in the capital reserve is insufficient to offset, the retained earnings shall be adjusted.
7. Classification of joint venture arrangements and accounting treatment of joint operations
√ Applicable □ Not applicable
A joint venture arrangement is an arrangement jointly controlled by two or more participants. Joint arrangement can
be classified into joint operations and joint ventures.
1. Joint operation refers to the joint venture arrangement in which the Company enjoys the assets related to the
arrangement and undertakes the liabilities related to the arrangement. The following items related to the quantum of
interest in joint operation are recognized by the Company:
(1) Recognize the assets held separately and the assets held jointly according to their shares;
(2) Recognize the liabilities assumed separately and the liabilities assumed jointly according to their shares;
(3) Recognize the income generated by the sale of its share of joint operating output;
(4) Recognize the income generated by the sale of output in the joint operation according to its share;
(5) Recognize the expenses incurred separately and the expenses incurred in joint operation according to their share.
2. A joint venture refers to a joint venture arrangement in which the Company has rights only to the net assets of the
arrangement. The Company shall account for the investment of joint ventures in accordance with the provisions of equity
method accounting for long-term equity investment.
8. Determination standards for cash and cash equivalents
When preparing the cash flow statement, the Company recognizes the cash on hand and deposits that can be used
for payment at any time as cash. Investments with short term (generally due within three months from the purchase date),
strong liquidity, easy conversion to known amounts of cash and little risk of value change are recognized as cash
equivalents. Restricted bank deposits are not used as cash and cash equivalents in the cash flow statement.
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9. Accounting method and translation method for foreign currency transactions and statements
√ Applicable □ Not applicable
1. Foreign currency business
When foreign currency business occurs, the amount of foreign currency is converted into CNY at the spot exchange
rate on the date of transaction, and foreign currency monetary items and foreign currency non-monetary items are treated
according to the following methods at the end of the period:
(1) Foreign currency monetary items are translated at the spot exchange rate on the balance sheet date. The exchange
difference arising from the difference between the spot exchange rate on the balance sheet date and the spot exchange
rate on the initial recognition or the previous balance sheet date shall be included in the current profits and losses.
(2) Non-monetary items in foreign currencies measured at historical cost shall still be converted at the spot exchange
rate on the date of transaction, and the amount of their functional currency shall not be changed.
(3) Non-monetary items in foreign currencies measured at fair value shall be converted at the spot exchange rate on
the date of determination of fair value, and the difference between the amount of the converted bookkeeping functional
currency and the amount of the original bookkeeping functional currency shall be included in the current profits and losses
or other comprehensive income according to the nature of non monetary items.
(4) Foreign currency exchange gains and losses, except for exchange gains and losses arising from special foreign
currency borrowings related to the purchase and construction or production of assets eligible for capitalization, shall be
included in the cost of assets eligible for capitalization before the assets reach the expected usable or saleable state, and
the rest shall be included in the current profits and losses.
2. Translation of foreign currency financial statements
(1) The assets and liabilities in the balance sheet shall be translated at the spot exchange rate on the balance sheet
date; except for the "undistributed profit" item, other items of owner's equity are converted at the spot exchange rate at
the time of occurrence.
(2) The income and expense items in the profit statement are translated at the approximate exchange rate of the spot
exchange rate.
(3) The translation difference of foreign currency financial statements arising from the above conversion is included
in other comprehensive income. Upon the disposal of overseas businesses, the translation differences of foreign currency
financial statements related to overseas businesses should be transferred from owners' equity to the disposal of current
profit and loss.
(4) The cash flow statement is translated at the approximate exchange rate of the spot exchange rate. The impact of
exchange rate changes on cash is listed separately in the cash flow statement as a reconciliation item.
10. Financial instruments
√ Applicable □ Not applicable
When the Company becomes a party to the financial instrument contract, a financial asset or financial liability related
to it is recognized.
1. Classification, recognition basis and measurement method of financial assets
According to the business model of the financial assets under management and the contractual cash flow
characteristics of the financial assets, the Company divides the financial assets into three categories: financial assets
measured at amortized cost, financial assets measured at fair value with changes included in other comprehensive income,
and financial assets measured at fair value with changes included in current profits and losses.
Financial assets are measured at fair value on initial recognition. For financial assets measured at fair value through
current profits and losses, the related transaction expense is directly recognized in current profits and losses. For other
types of financial assets, related transaction costs are included in the initial recognition amount. If the accounts receivable
initially recognized by the Company does not include a significant financing component as defined in the Accounting
Standards for Business Enterprises No. 14 - Revenues or does not consider the financing component in a contract not
exceeding one year in accordance with the Accounting Standards for Enterprises No. 14 - Revenues, the initial
measurement shall be made according to the transaction price of the consideration expected to be entitled to receive.
(1) Financial assets measured at amortized costs
The Company's business model for managing such financial assets is to collect contract cash flow, and the cash flow
generated on a specific date is only the payment of principal and interest based on the outstanding principal amount. The
Company adopts the effective interest rate method for such financial assets, which are subsequently measured at amortized
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cost, and the gains or losses arising from amortization or impairment are included in the current profits and losses.
(2) Financial assets measured at fair value with changes included in other comprehensive income
The Company's business model for managing such financial assets is to target both the receipt of contract cash flow
and the sale, and the cash flow generated on a specific date is only the payment of principal and interest based on the
outstanding principal amount. Such financial assets are measured at fair value and the changes are included in other
comprehensive income, but impairment losses or gains, exchange gains and losses and interest income calculated
according to the effective interest rate method are included in the current profits and losses.
For non-tradable equity instrument investments, the Company may irrevocably designate them as financial assets
measured at fair value and whose changes are included in other comprehensive income at initial recognition. The
designation is made on the basis of a single investment, which conforms to the definition of equity instruments from the
perspective of the issuer. The Company includes the dividend income related to such financial assets in the current profits
and losses, and the change in fair value in other comprehensive income. When the financial assets are derecognised, the
accumulated gains or losses previously recognised in other comprehensive income are transferred from other
comprehensive income to retained earnings, which are not recognised in current profits or losses.
(3) Financial assets measured at fair value with changes included in current profits and losses
Except for the above-mentioned financial assets measured at amortized cost and financial assets measured at fair
value and whose changes are included in other comprehensive income, the Company classifies all other financial assets
as financial assets measured at fair value and whose changes are included in current profits and losses. In addition, at the
time of initial recognition, in order to eliminate or significantly reduce accounting mismatches, the Company designates
some financial assets as financial assets measured at fair value and whose changes are included in the current profits and
losses. Such financial assets are subsequently measured at fair value, and changes in fair value are included in current
profits and losses.
2. Classification, recognition basis and measurement method of financial liabilities
At the time of initial recognition, the Company's financial liabilities are classified as: financial liabilities measured
at fair value with changes included in the current profits and losses, and other financial liabilities. For financial liabilities
measured at fair value through current profits and losses, the related transaction expense is directly recognised in current
profits and losses. The related transaction expense of other financial liabilities is included in the initial recognition amount.
(1) Financial liabilities measured at fair value with changes included in current profits and losses
Financial liabilities measured at fair value with changes included in current profits and losses include trading
financial liabilities (including derivatives belonging to financial liabilities) and financial liabilities designated at fair value
with changes included in current profits and losses.
Transactional financial liabilities (including derivatives that are financial liabilities) are subsequently measured at
fair value. In addition to related to hedge accounting, changes in fair value are recognised in current profits and losses. At
the time of initial recognition of financial liabilities, the Company is designated as financial liabilities measured at fair
value and whose changes are included in the current profits and losses,
Changes in fair value caused by changes in the Company's own credit risk are included in other comprehensive
income, and when the liability is terminated, the cumulative changes in fair value caused by changes in its own credit risk
included in other comprehensive income are transferred to retained earnings. Other changes in fair value are included in
the current profits and losses. If the impact of changes in the credit risk of such financial liabilities is treated in the above
manner, which will cause or expand the accounting mismatch in profits and losses, the Company will include all gains or
losses of such financial liabilities (including the amount affected by changes in the credit risk of the enterprise itself) in
the current profits and losses.
(2) Other financial liabilities
Financial liabilities other than financial liabilities and financial guarantee contracts formed by the transfer of financial
assets that do not meet the conditions for termination of recognition or continue to be involved in the transferred financial
assets are classified as financial liabilities measured at amortized cost, which are subsequently measured at amortized
cost, and the gains or losses arising from termination of recognition or amortization are included in the current profits and
losses.
3. Determination method of fair value of financial assets and financial liabilities
For a financial instrument with active market, its fair value shall be recognized based on its price in the active market.
For a financial instrument without active market, its fair value shall be recognized by adopting the estimation technique.
During estimation, the Company adopts the estimation technique that is currently applicable and is supported by sufficient
available data and other information, and selects the input value with characteristics consistent with the assets or liabilities
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considered by market participants in relevant transactions of assets or liabilities. The related observable input value is
preferred. The non-observable input value can be used only when it is impossible or not feasible to obtain relevant
observable input value.
4. Recognition basis and measurement method of transfer of financial assets
Recognition of transfer of financial assets
. Recognition results
Almost all the risks and rewards of ownership of transferred financial assets Termination of recognition of the
It abandons its control of the financial asset (recognition of new
financial asset assets/liabilities)
It neither transfers nor retains
Relevant assets and liabilities are
almost all the risks and rewards of
It does not abandon its control over recognized according to the degree of
ownership of financial assets
the financial asset continued involvement in the transferred
financial assets
It retains almost all the risks and
It continues to recognize the financial asset and recognizes the consideration
rewards of ownership of financial
received as a financial liability
assets
The Company divides the transfer of financial assets into entire transfer and partial transfer.
(1) If the overall transfer of financial assets meets the conditions for termination of recognition, the difference
between the following two amounts shall be included in the current profits and losses: The book value of the transferred
financial assets on the date of termination of recognition; the sum of the consideration received from the transfer of
financial assets and the cumulative amount of changes in fair value originally directly included in other comprehensive
income (The financial assets involved in the transfer are classified as financial assets measured at fair value and whose
changes are included in other comprehensive income in Article 18 of Accounting Standards for Business Enterprises No.
22 - Recognition and Measurement of Financial Instruments).
(2) If a part of a financial asset is transferred and the transferred part as a whole meets the conditions for termination
of recognition, the overall book value of the financial asset before transfer shall be apportioned between the part of
termination of recognition and the part of continuing recognition (In this case, the retained service assets shall be regarded
as part of continuing recognition of financial assets) according to their respective relative fair values on the transfer date,
and the difference between the following two amounts shall be included in the current profits and losses: the book value
of the part whose recognition is terminated on the date of recognition; the consideration received for the derecognition
portion (including all new assets acquired less all new liabilities assumed), and the sum of the amount corresponding to
the termination of recognition in the cumulative amount of changes in fair value originally included in other
comprehensive income (financial assets involving partial transfer are classified as financial assets measured at fair value
and whose changes are included in other comprehensive income in Article 18 of Accounting Standards for Business
Enterprises No. 22 - Recognition and Measurement of Financial Instruments).
If the transfer of financial assets does not meet the conditions for termination of recognition, the overall financial
assets transferred shall continue to be recognized, and the consideration received shall be recognized as a financial liability.
5. Conditions for termination of recognition of financial liabilities
If the current obligation of a financial liability (or part of it) has been discharged, the recognition of the financial
liability (or part of it) shall be terminated. If the following conditions exist:
(1) Where the Company transfers assets used to repay financial liabilities to an institution or establishes a trust, and
the obligation to repay debts still exists, the recognition of the financial liabilities shall not be terminated.
(2) If the Company (borrower) enters into an agreement with the lender to replace the original financial liability (or
part of it) by assuming a new financial liability, and the terms of the contract are substantially different, the Company
shall terminate the recognition of the original financial liability (or part of it) and recognize a new financial liability.
Where a financial liability (or part of it) is derecognized, the Company shall include the difference between its book
value and the consideration paid (including non-cash assets transferred out or liabilities assumed) in the current profits
and losses.
6. Impairment of financial assets
(1) Recognition method of impairment provision
The Company conducts impairment accounting treatment and recognizes loss reserves for financial assets (including
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receivables) measured at amortized cost, debt instrument investments and lease receivables measured at fair value and
whose changes are included in other comprehensive income on the basis of expected credit losses. In addition, for contract
assets, loan commitments and financial guarantee contracts, provision for impairment and recognition of credit
impairment losses are also made in accordance with the accounting policies described in this part.
Expected credit losses refer to the weighted average value of credit losses of financial instruments weighted by the
risk of default. Credit loss refers to the difference between all contractual cash flows receivable from the contract and all
cash flows expected to be received by the Company at the original effective interest rate, that is, the present value of all
cash shortages.
Except for financial assets purchased or originated that have suffered credit impairment, the Company assesses
whether the credit risk of related financial assets has increased significantly since initial recognition on each balance sheet
date. If the credit risk has not increased significantly since initial recognition and is in the first stage, the Company
measures the loss reserve according to the amount equivalent to the expected credit loss of the financial asset in the next
12 months; if the credit risk has increased significantly since initial recognition but has not been impaired, it is in the
second stage, the Company shall measure the loss reserve according to the amount equivalent to the expected credit loss
of the financial asset throughout its life; if a financial asset has suffered credit impairment since its initial recognition, it
is in the third stage, and the Company measures the loss reserve according to the amount equivalent to the expected credit
loss during the whole duration of the financial asset. In assessing the expected credit losses, the Company considers
reasonable and evidence-based information about past events, current conditions and forecasts of future economic
conditions, including forward-looking information, which can be obtained without unnecessary additional costs or efforts
at the balance sheet date.
The expected credit loss in the next 12 months refers to the expected credit loss caused by the possible default of
financial assets within 12 months after the balance sheet date (if the expected duration of financial assets is less than 12
months, it is the expected duration), which is part of the expected credit loss for the whole duration.
For financial instruments with lower credit risk on the balance sheet date, the Company assumes that its credit risk
has not increased significantly since the initial recognition, and measures the loss according to the expected credit losses
in the next 12 months.
For financial assets in the first and second stages and with low credit risk, the Company calculates interest income
according to their book balance and effective interest rate without deducting impairment provisions. For financial assets
in the third stage, interest income shall be calculated according to the amortized cost and effective interest rate of their
book balance minus the provision for impairment.
(2) Financial assets that have been impaired
When one or more events that the expected future cash flow of a financial asset has an adverse impact occur, the
financial asset becomes a financial asset with credit impairment. Evidence of credit impairment of financial assets includes
the following observable information:
A. Significant financial difficulties of the issuer or the debtor;
B. The debtor violates the contract, such as default or overdue payment of interest or principal;
C. The creditor grants concessions that the debtor would not otherwise make for economic or contractual reasons
related to the debtor's financial difficulties;
D. The debtor is likely to go bankrupt or undergo other financial restructuring;
E. The financial difficulties of the issuer or the debtor lead to the disappearance of the active market of the financial
asset;
F. A financial asset is purchased or originated at a substantial discount that reflects the fact that a credit loss has
occurred.
The credit impairment of financial assets may be caused by the joint action of multiple events, not necessarily by
individually identifiable events.
(3) Purchased or originated financial assets with credit impairment
For financial assets purchased or originated by the Company that have suffered credit impairment, only the
cumulative changes in expected credit losses during the whole duration after initial recognition are recognized as loss
reserves on the balance sheet date. On each balance sheet date, the change amount of expected credit loss during the
whole duration shall be included in the current profits and losses as impairment losses or gains. Even if the expected
credit loss determined on the balance sheet date for the whole duration is less than the amount of the expected credit loss
reflected in the estimated cash flow at the time of initial recognition, the favorable change in the expected credit loss is
recognized as impairment gains.
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(4) Criteria for a significant increase in credit risk
If the probability of default of a financial asset during the expected duration determined on the balance sheet date is
significantly higher than the probability of default during the expected duration determined at the time of initial
recognition, it indicates that the credit risk of the financial asset has increased significantly. Except for special
circumstances, the Company adopts the change of default risk in the next 12 months as a reasonable estimate of the change
of default risk in the whole duration to determine whether the credit risk has increased significantly since initial
recognition.
(5) Methods for evaluating expected credit losses of financial assets
The Company assesses the expected credit losses of financial assets based on individual and portfolio. Credit risk is
assessed individually for financial assets with significantly different credit risks, such as accounts receivable from related
parties; receivables from government agencies; receivables that have obvious signs that the debtor is likely to be unable
to fulfill its repayment obligations.
In addition to financial assets for which credit risk is assessed individually, the Company divides financial assets
into different groups based on common risk characteristics, and assesses the credit risk on the basis of such groups.
(6) Accounting treatment of impairment of financial assets
The Company calculates the estimated credit losses of various financial assets on the balance sheet date, and the
increase or reversal of loss reserves thus formed is included in the current profits and losses as impairment losses or gains.
If the Company actually incurred credit losses and determined that the relevant financial assets could not be
recovered and approved to be written off, the book balance of the financial assets shall be directly written down. If the
written down financial assets are recovered later, they shall be included in the profits and losses of the current period as
a reversal of impairment losses.
7. Financial guarantee contract
A financial guarantee contract refers to a contract in which the issuer pays a specific amount to the contract holder
who has suffered losses when the debtor is unable to pay its debts at maturity in accordance with the terms of the original
or revised debt instrument. Financial guarantee contracts are measured at fair value at the time of initial recognition.
Financial guarantee contracts that are not designated as financial liabilities measured at fair value and whose changes are
included in the current profits and losses shall be subsequently measured according to the balance of the expected credit
loss reserve amount determined on the balance sheet date and the initial recognition amount after deducting the
accumulated amortization amount determined in accordance with the revenue recognition principle, whichever is higher.
8. Offset of financial assets and financial liabilities
Financial assets and financial liabilities are listed separately in the balance sheet and do not offset each other.
However, if the following conditions are met at the same time, the net amount after mutual offset shall be listed in the
balance sheet:
(1) The Company has the legal right to offset the recognized financial assets and financial liabilities, and such legal
right is now enforceable;
(2) The Company plans to settle at a net amount, or realize the financial assets and settle the financial liabilities at
the same time.
9. Equity instruments
Equity instruments refer to contracts that can prove the ownership of the Company's remaining equity in assets after
deducting all liabilities. The issuance (including refinancing), repurchase, sale or cancellation of equity instruments by
the Company shall be treated as changes in equity. The Company does not recognize changes in fair value of equity
instruments. Transaction costs related to equity transactions are deducted from equity.
The Company's various distributions to the holders of equity instruments (excluding stock dividends) shall be used
as profit distribution to reduce the owner's equity. The stock dividend issued does not affect the total owner's equity.
10. Determination method of fair value of financial instruments
The Company measures the fair value of related assets or liabilities at the price of the main market. If there is no
main market, the Company measures the fair value of related assets or liabilities at the price of the most favorable market.
The main market refers to the market with the largest trading volume and the highest trading activity of related assets
or liabilities; the most favorable market refers to the market that can sell related assets at the highest amount or transfer
related liabilities at the lowest amount after considering transaction costs and transportation costs. The Company adopts
the assumptions used by market participants to maximize their economic benefits when pricing the asset or liability.
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(1) Valuation technology
The Company adopts valuation technologies applicable in the current situation and supported by sufficient available
data and other information, and the valuation technologies used mainly include market method, income method and cost
method. The Company uses one or more valuation technologies to measure fair value. If multiple valuation technologies
are used to measure fair value, considering the rationality of each valuation result, the amount that can best represent fair
value in the current situation is selected as fair value.
In the application of valuation technology, the Company gives priority to the use of relevant observable inputs, and
only when the relevant observable inputs can not be obtained or are not feasible can the unobservable inputs be used.
Observable input value refers to the input value that can be obtained from market data. This input value reflects the
assumptions used by market participants in pricing related assets or liabilities. Unobservable input values refer to input
values that cannot be obtained from market data. The input value is obtained based on the best information available on
the assumptions used by market participants in pricing related assets or liabilities.
(2) Fair value hierarchy
The Company divides the input values used in fair value measurement into three levels, and first uses the first level
of input values, followed by the second level of input values, and finally uses the third level of input values. The first
level of input is an unadjusted quote for the same asset or liability that can be obtained on the measurement date in an
active market. The second level input value is an input value that is directly or indirectly observable for related assets or
liabilities other than the first level input value. Input value at Hierarchy III refers to unobservable input value of relevant
assets or liabilities.
11. Notes receivable
Determination method and accounting treatment method of expected credit loss of notes receivable
√ Applicable □ Not applicable
The Company measures the loss provision for bills receivable according to the expected credit loss amount during
the entire duration. The Company believes that the acceptance bank credit rating of the bank acceptance bill held by it is
high, there is no significant credit risk, and no provision for loss is made. The determination method and accounting
treatment method of the expected credit loss of the commercial acceptance bills held by the Company are consistent with
the determination method and accounting treatment method of the expected credit loss of accounts receivable. Based on
the credit risk characteristics of bills receivable, they are divided into different portfolios:
Item Basis for determining portfolio
Notes receivable portfolio 1 Bank acceptance draft
Notes receivable portfolio 2 Commercial acceptance draft
12. Accounts receivable
Determination method and accounting treatment method of expected credit loss of accounts receivable
√ Applicable □ Not applicable
The Company shall measure its loss reserve at an amount equivalent to the expected credit loss during the whole
duration of the receivables specified in the Accounting Standards for Business Enterprises No. 14 - Revenues and
excluding major financing components (including the financing components in contracts not exceeding one year
according to the standards).
Based on the common risk characteristics, the Company divides accounts receivable into different groups according
to the common credit risk characteristics such as customer categories:
Item Basis for determining portfolio
Accounts receivable portfolio 1 Franchised dealers
Accounts receivable portfolio 2 Engineering clients
Accounts receivable portfolio 3 Other clients
Accounts receivable portfolio 4 Related parties within the scope of consolidation
13. Receivables financing
√ Applicable □ Not applicable
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Receivables financing reflects notes receivable and accounts receivable measured at fair value at the balance sheet date
and whose changes are included in other comprehensive income. For the accounting treatment method, please refer to 10.
Financial instruments of this accounting policy, which are classified as financial assets measured at fair value and whose
changes are included in other comprehensive income.
14. Other receivables
Determination method and accounting treatment method of expected credit loss of other receivables
√ Applicable □ Not applicable
For other receivables, the expected credit loss is determined according to historical experience data and forward-
looking information. The Company adopts the amount equivalent to the expected credit loss in the next 12 months or the
whole duration to measure the impairment loss according to whether the credit risk of other receivables has increased
significantly since initial recognition.
Based on the common risk characteristics, the Company divides other receivables into different groups:
Item Basis for determining portfolio
Other receivables portfolio 1 Interest receivable
Other receivables portfolio 2 Dividend receivable
Other receivables portfolio 3 Margin receivable
Other receivables portfolio 4 Reserve for business receivables
Other receivables portfolio 5 Deposit receivables
Other receivables portfolio 6 Receivables from consolidated related parties
Other receivables portfolio 7 Other receivables
15. Inventory
√ Applicable □ Not applicable
1. Classification of inventory
The Company's inventory refers to the materials or supplies held for sale in the process of production and operation,
or still in the process of production, or will be consumed in the process of production or provision of labor services,
including all kinds of raw materials, products in progress, finished products (inventory commodities), issued commodities,
etc.
2. Valuation method for acquisition and delivery of inventory
Cost method is employed for initial measurement of inventories. Inventory costs include purchase cost, processing
cost and other costs. Borrowing costs that shall be included in inventory costs shall be treated in accordance with the
Accounting Standards for Business Enterprises No. 17 - Borrowing Costs. The cost of inventory invested by an investor
shall be determined according to the value stipulated in the investment contract or agreement, except that the value
stipulated in the contract or agreement is unfair.
Valuation method of issued inventory: Weighted average method is adopted for accounting.
3. Inventory taking system
A perpetual inventory system is adopted.
4. Amortization method of low-value consumables and packaging materials
The "one-time amortization method" is adopted for accounting.
5. Basis for determining the net realizable value of inventory and method for withdrawing inventory depreciation
reserves
Inventory at the end of the period shall be valued at the lower of cost and net realizable value. If the net realizable
value of inventory at the end of the period is lower than the book cost, the provision for inventory depreciation shall be
made according to the difference. Net realizable value refers to the amount of the estimated selling price of inventory in
daily activities after deducting the estimated cost to be incurred at completion, the estimated selling expenses and related
taxes.
(1) Basis for determining the net realizable value of inventory: materials held for production, etc., the net realizable
value of finished products produced by them is higher than the cost, and the materials are still measured at cost; if the
decline in the price of materials indicates that the net realizable value of finished products is lower than the cost, the
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materials shall be measured at the net realizable value.
The net realizable value of inventories held for the execution of sales contracts or labor contracts shall be calculated
on the basis of the contract price. If the quantity of inventory held by the enterprise is more than the quantity ordered in
the sales contract, the net realizable value of the excess inventory shall be calculated on the basis of the general sales
price.
(2) Provision method for inventory falling price reserves: Provision for inventory falling price shall be made
according to the lower of the cost and net realizable value of a single inventory item; however, for inventory with large
quantity and low unit price, provision for inventory depreciation shall be made according to inventory category.
16. Contract assets
(1) Recognition method and standard of contract assets
√ Applicable □ Not applicable
Contract assets refer to the right of the Company to receive consideration for the transfer of goods to customers, and
the right depends on other factors other than the passage of time.
(2) Determination method and accounting treatment method of expected credit loss of contract assets
√ Applicable □ Not applicable
For contract assets, whether they contain significant financing components, the Company always measures its loss
reserve at an amount equivalent to the expected credit loss during the whole duration, and the increase or reversal of the
loss reserve thus formed is included in the current profits and losses as impairment losses or gains.
The Company calculates the expected credit loss of contract assets on the balance sheet date, and if the expected
credit loss is greater than the carrying amount of the current provision for impairment of contract assets, the difference is
recognized as an impairment loss; the expected credit loss is remeasured on each balance sheet date, and the reversal
amount of the loss provision thus formed is recognized as impairment gains.
17. Held-for-sale assets
√ Applicable □ Not applicable
1. Basis for classification as held-for-sale
The Company recognizes the components (or non-current assets) that meet the following conditions as held-for-sale
categories at the same time:
(1) In accordance with the practice of selling such assets or disposal groups in similar transactions, they can be sold
immediately under current conditions;
(2) The sale is likely to occur, that is, the enterprise has made a decision on a sale plan and obtained a definite
purchase commitment, and the sale is expected to be completed within one year. If the relevant provisions require the
approval of the relevant authorities or regulatory authorities of the enterprise before it can be sold, it shall have been
approved.
The determined purchase commitment refers to the legally binding purchase agreement signed between the enterprise
and other parties, which contains important clauses such as transaction price, time and sufficiently severe penalty for
breach of contract, so that the possibility of major adjustment or cancellation of the agreement is extremely small.
2. Accounting treatment of held-for-sale
When the Company initially measures or remeasures the non-current assets or disposal groups held for sale on the
balance sheet date, if the book value is higher than the net value of fair value minus selling expenses, the book value shall
be written down to the net value of fair value minus selling expenses, and the amount written down shall be recognized
as asset impairment loss and included in the current profits and losses. At the same time, provision for impairment of
assets held for sale shall be made. If the net amount of the fair value of non-current assets held for sale minus the selling
expenses increases on the subsequent balance sheet date, the amount previously written down shall be restored and
reversed within the amount of asset impairment loss recognized after being classified as held for sale, and the reversed
amount shall be included in the current profits and losses. The impairment loss of assets recognized before being classified
as held for sale shall not be reversed.
For the amount of asset impairment loss recognized by the disposal group held for sale, the book value of goodwill
in the disposal group shall be offset first, and then the book value of non-current assets in the disposal group shall be
offset proportionally according to the proportion of the book value of non-current assets in the disposal group. The
subsequent reversal amount of asset impairment losses recognized by the disposal group held for sale shall be increased
proportionally according to the proportion of the book value of non-current assets other than goodwill in the disposal
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group.
The non-current assets held for sale or the non-current assets of the disposal group are not depreciated or amortized,
and the interest on debt and other fees of the disposal group held for sale shall be recognized further.
When the Company terminates the recognition of non-current assets or disposal groups held for sale, the
unrecognized gains or losses shall be included in the current profits and losses.
When non-current assets or disposal groups are no longer classified as held for sale categories or non-current assets
are removed from the disposal groups held for sale because they no longer meet the classification conditions of held for
sale categories, they shall be measured according to the lower of the following two:
(1) The book value before being classified as held for sale is adjusted according to the depreciation, amortization or
impairment that should have been recognized under the assumption that it is not classified as held for sale;
(2) Recoverable amount.
18. Debt investment
(1) Determination method and accounting treatment method of expected credit loss of creditor's rights investment
√ Applicable □ Not applicable
For creditor's rights investment and other creditor's rights investment, the Company determines the expected credit
loss on each balance sheet date according to the various types of counterparties and risk exposures, taking into account
historical defaults and industry forward-looking information or various external actual and expected economic
information. For the determination method and accounting treatment method of expected credit loss, please refer to 10.
Financial instruments of accounting policy.
19. Other debt investments
(1) Determination method and accounting treatment method of expected credit loss of other creditor's rights
investment
√ Applicable □ Not applicable
For creditor's rights investment and other creditor's rights investment, the Company determines the expected credit loss
on each balance sheet date according to the various types of counterparties and risk exposures, taking into account
historical defaults and industry forward-looking information or various external actual and expected economic
information. For the determination method and accounting treatment method of expected credit loss, please refer to 10.
Financial instruments of accounting policy.
20. Long-term receivables
(1) Determination method and accounting treatment method of expected credit loss of long-term receivables
□ Applicable √ Not applicable
21. Long-term equity investments
√ Applicable □ Not applicable
1. Basis for determining joint control and significant impact on the investee
Joint control refers to the common control over an arrangement in accordance with relevant agreements, and the
relevant activities of the arrangement must be agreed upon by the participants sharing control rights before decisions can
be made. In judging whether there is joint control, we shall first judge whether all participants or a combination of
participants collectively control the arrangement. If all participants or a group of participants must act together to
determine the relevant activities of an arrangement, all participants or a group of participants are considered to collectively
control the arrangement. Secondly, it is judged whether the decision-making of the activities related to the arrangement
must be unanimously agreed by the participants who collectively control the arrangement, and joint control can be formed
only when the decision-making of the activities requires the unanimous consent of the participants who collectively
control the arrangement. If there are two or more combinations of participants who can collectively control an
arrangement, it does not constitute joint control. When determining whether there is joint control, the protective rights
enjoyed are not taken into account.
Significant impact means that the investor has the power to participate in the decision-making of the financial and
operating policies of the investee, but is not able to control or jointly control the formulation of these policies with other
parties. When determining whether it can exert significant impact on the investee, the impact of the investor's direct or
indirect holding of the voting shares of the investee and the current enforceable potential voting rights held by the investor
and other parties on the assumption of conversion into equity of the investee, including the impact of the current
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convertible warrants, share options and convertible corporation bonds issued by the investee. When the foreign investment
meets the following conditions, it is generally determined to have a significant impact on the investor: ① Send
representatives to the board of directors or similar authorities of the investee; ② Participate in the formulation process of
financial and operating policies of the investee; ③ Important transactions with the investee; ④ Dispatch managers to the
investee; ⑤ Provide key technical data to the investee. It is generally considered to have a significant impact on the
investee when it directly or indirectly owns more than 20% but less than 50% of the voting shares of the invested enterprise
through subsidiaries.
2. Determination of initial investment cost
(1) Long-term equity investment formed by business merger
A. For the business merger under the same control, if the consideration of the merger is to pay cash, transfer non-
cash assets or bear debts, and to issue equity securities, the share of the book value of the owner's equity of the merged
party in the consolidated financial statements of the final controller shall be regarded as the initial investment cost of the
long-term equity investment on the merger date. If the investee under the same control can be controlled due to additional
investment and other reasons, the initial investment cost of long-term equity investment shall be determined on the merger
date according to the share of the book value of the net assets of the merged party in the consolidated financial statements
of the final controller after the merger. The difference between the initial investment cost of the long-term equity
investment on the merger date and the sum of the book value of the long-term equity investment before the merger plus
the book value of the new payment consideration for the shares obtained on the merger date shall be adjusted for the
capital premium or equity premium. If the capital premium or equity premium is insufficient to offset, the retained
earnings shall be offset.
B. For the business merger not under the same control, the merger cost determined in accordance with the relevant
provisions of the Accounting Standards for Business Enterprises No. 20 - Business Merger on the acquisition date shall
be regarded as the initial investment cost of long-term equity investment. If the investee not under the same control can
be controlled due to additional investment and other reasons, the sum of the book value of the equity investment originally
held and the new investment cost shall be regarded as the initial investment cost calculated according to the cost method.
(2) In addition to the long-term equity investment formed by the business merger, the initial investment cost of long-
term equity investment obtained by other means shall be determined in accordance with the following provisions:
A. A long-term equity investment obtained by paying cash shall be regarded as the initial investment cost according
to the actual purchase price paid. The initial investment cost includes expenses, taxes and other necessary expenses
directly related to the acquisition of long-term equity investment.
B. For long-term equity investment obtained by issuing equity securities, the fair value of issuing equity securities
shall be regarded as the initial investment cost.
C. The initial investment cost of long-term equity investment obtained through the exchange of non-monetary assets
shall be determined in accordance with the Accounting Standards for Business Enterprises No. 7 - Exchange of Non-
monetary Assets.
D. The initial investment cost of long-term equity investment obtained through debt restructuring shall be determined
in accordance with the Accounting Standards for Business Enterprises No.12 - Debt Restructuring.
3. Subsequent measurement and profit and loss recognition method
(1) Cost method accounting: long-term equity investment that can control the investee shall be accounted for by cost
method. When the cost method is adopted for accounting, the cost of long-term equity investment shall be adjusted by
adding or recovering investment. For long-term equity investments accounted for by the cost method, in addition to the
declared but not yet distributed cash dividends or profits included in the actual payment or consideration when obtaining
the investment, the Company shall recognize the investment income according to the cash dividends or profits declared
by the investee, and no longer divide whether it belongs to the net profit realized by the investee before and after
investment.
(2) Equity method accounting: For long-term equity investment jointly controlled or significantly affected by the
investee, in addition to equity investment in associated enterprises, part of which is indirectly held through venture capital
institutions, mutual funds, trust companies or similar entities including investment linked insurance funds, regardless of
whether the above entities have a significant impact on this part of investment. In accordance with the relevant provisions
of Accounting Standards for Business Enterprises No.22 - Recognition and Measurement of Financial Instruments, the
Company chooses to measure this part of the investment indirectly held at fair value and the changes are included in
profits and losses, and adopts the equity method for accounting. When the equity method is adopted for accounting, after
the Company obtains the long-term equity investment, the investment income and other comprehensive income shall be
recognized respectively according to the share of net profit and loss and other comprehensive income realized by the
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investee that should be enjoyed or shared, and the book value of the long-term equity investment shall be adjusted; the
Company shall calculate the attributable part according to the profits or cash dividends declared to be distributed by the
investee, and reduce the book value of long-term equity investment accordingly; the Company shall adjust the book value
of long-term equity investment and include it in the owner's equity for other changes in the owner's equity of the invested
entity other than net profits and losses, other comprehensive income and profit distribution. The Company recognizes the
net loss incurred by the investee to the extent that the book value of the long-term equity investment and other long-term
rights and interests that substantially constitute the net investment in the investee are written down to zero, except where
the Company has the obligation to bear additional losses. If the investee realizes net profit in the future, the Company
shall resume the recognition of income sharing after the income sharing makes up for the unrecognized loss sharing.
When the Company confirms its share of the net profit and loss of the investee, it shall adjust the net profit of the investee
on the basis of the fair value of the identifiable assets of the investee at the time of acquisition of investment, and offset
the internal transaction gains and losses between the Company and associates and joint ventures, on which the investment
profits and losses are recognized. Internal transaction losses between the Company and the investee shall be recognized
in full if they belong to asset impairment losses in accordance with the Accounting Standards for Business Enterprises
No. 8 - Asset Impairment and other provisions. If the accounting policy and accounting period adopted by the investee
are inconsistent with those of the Company, the financial statements of the investee shall be adjusted in accordance with
the accounting policy and accounting period of the Company, and the investment profits and losses shall be recognized.
For the long-term equity investment in associates and joint ventures held before the first execution date, if there is a
debit balance of equity investment related to the investment, it shall be amortized according to the straight line method of
the original remaining period, and the amortization amount shall be included in the current profits and losses.
(3) For the disposal of long-term equity investment, the difference between its book value and the actual price
obtained shall be included in the current profits and losses. If a long-term equity investment accounted for by the equity
method is included in the owner's equity due to other changes in the owner's equity of the investee other than the net
profits and losses, the part originally included in the owner's equity shall be transferred to the current profits and losses
according to the corresponding proportion when disposing of the investment, except for other comprehensive income
arising from the change of net liabilities or net assets of the newly measured and defined benefit plan by the investee.
22. Investment properties
(1) If the cost measurement model is adopted:
Depreciation or amortization method
Investment properties refer to the assets holding for capital appreciation or lease earning as well as the aims of both.
It mainly includes leased land use rights, land use rights held and ready to be transferred after appreciation, and leased
buildings. When the Company can obtain rental income or value-added income related to investment real estate and the
cost of investment real estate can be reliably measured, the Company will initially measure it according to the actual
expenditure on purchase or construction.
The Company adopts the cost model for subsequent measurement of investment real estate on the balance sheet date.
Under the cost model, the Company measures, depreciates or amortizes investment real estate in accordance with 23.
Fixed assets and 29. Intangible assets of this accounting policy. When an investment real estate is disposed of, or
permanently withdrawn from use and is not expected to obtain economic benefits from its disposal, the recognition of the
investment real estate shall be terminated. When the Company sells, transfers or scraps investment real estate or damages
investment real estate, the amount of disposal income after deducting its book value and relevant taxes and fees shall be
included in the current profits and losses.
23. Fixed assets
(1) Confirmation conditions
√ Applicable □ Not applicable
Fixed assets refer to tangible assets held for the production of commodities, the provision of labor services, the rental
or operation and management with a service life of more than one fiscal year.
(2) Depreciation method
√ Applicable □ Not applicable
Depreciable life Annual depreciation
Category Depreciation method Residual value rate
(years) rate
Property and
Straight-line method 20 years 3-10 4.5-4.85
building
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Machinery and
Straight-line method 10 years 3-10 9-9.70
equipment
Transportation
Straight-line method 5 years 3-10 18-19.40
equipment
Other equipment Straight-line method 5 years 3-10 18-19.40
At the end of each year, the Company reviews the service life, estimated net residual value and depreciation method
of fixed assets.
(3) Recognition basis, valuation and depreciation method of fixed assets under financing lease
□ Applicable √ Not applicable
24. Construction in progress
√ Applicable □ Not applicable
Construction in progress is valued at actual cost. Where the loan interest expenditure and foreign currency conversion
difference incurred for construction projects shall be capitalized or included in the current profits and losses in accordance
with the relevant provisions of the Accounting Standards for Business Enterprises No. 17 - Borrowing Costs. From the
date when the construction in progress reaches the expected state of use, whether the final settlement of the project is
handled, it will be transferred to fixed assets, and the adjustment will be made after the completion settlement procedures
are handled.
For the recognition standard and provision method of provision for impairment of construction in progress, please
refer to 30. Notes on impairment of long-term assets of this accounting policy.
25. Borrowing costs
√ Applicable □ Not applicable
1. Recognition principles for capitalization of borrowing costs
Borrowing costs include interest, amortization of discounts or premiums incurred on borrowings and ancillary costs,
as well as exchange differences incurred on foreign currency borrowings. Borrowing costs incurred by the Company that
can be directly attributable to the purchase, construction or production of assets eligible for capitalization shall be
capitalized and included in the cost of related assets; other borrowing costs are recognized as expenses according to the
amount incurred and included in the current profits and losses.
Assets that meet the capitalization conditions include fixed assets, investment real estate, inventory and other assets
that require considerable time for purchase and construction or production activities to reach the intended usable or
saleable state.
Borrowing costs shall be capitalized when the following conditions are met at the same time:
(1) Asset expenditure has occurred, including expenditure incurred in the form of cash payment, transfer of non-cash
assets or assumption of interest bearing debts for the purchase and construction or production of assets eligible for
capitalization;
(2) Borrowing costs have been incurred;
(3) The acquisition and construction or production activities necessary to make the assets reach the expected usable
or saleable state have begun.
2. Period of capitalization of borrowing costs
Borrowing costs incurred for the acquisition and construction or production of assets that meet the capitalization
conditions shall be included in the cost of the asset if they meet the above capitalization conditions and occur before the
asset reaches the intended usable or saleable state. If the acquisition and construction or production activities of the asset
are interrupted abnormally for more than three consecutive months, the capitalization of borrowing costs shall be
suspended and recognized as current expenses, until the acquisition and construction of assets or production activities
resume; when the assets purchased, constructed or produced reach the expected usable or sales state, the capitalization of
their borrowing costs shall be stopped. Borrowing costs incurred after reaching the expected usable or saleable state are
directly included in financial expenses in the current period.
3. Calculation methods for capitalized amount of borrowing costs
During the capitalization period, the capitalization amount of interest (including amortization of discount or premium)
in each accounting period shall be determined in accordance with the following provisions:
(1) Where a special loan is borrowed for the purchase and construction or production of assets eligible for
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capitalization, it shall be determined by the amount of the interest expenses actually incurred in the current period of the
special loan minus the interest income obtained by depositing the unused loan funds in the bank or the investment income
obtained by temporary investment.
(2) If a general loan is occupied for the purchase and construction or production of assets that meet the capitalization
conditions, the interest amount that should be capitalized on the general loan shall be calculated and determined according
to the weighted average of the asset expenditure of the part of the cumulative asset expenditure exceeding the special loan
multiplied by the capitalization rate of the general loan occupied.
26. Biological assets
□ Applicable √ Not applicable
27. Oil and gas assets
□ Applicable √ Not applicable
28. Right of use assets
√ Applicable □ Not applicable
On the beginning date of the lease term, the Company, as the lessee, recognizes the right to use the leased assets
during the lease term as the right of use assets, except for short-term leases and low value asset leases.
1. The recognition of right of use assets is based on the initial measurement of right of use assets at cost, which
includes:
(1) The initial measurement amount of the lease liability;
(2) For the lease payment paid on or before the beginning date of the lease term, if there is a lease incentive, the
relevant amount of the lease incentive that has been enjoyed shall be deducted;
(3) Initial direct costs incurred;
(4) The costs expected to occur for the purpose of dismantling and removing the leased assets, restoring the site
where the leased assets are located or restoring the leased assets to the agreed state of the lease terms, except for those
incurred for the production of inventory.
2. Depreciation method and impairment of right of use assets
(1) The Company adopts the cost model for subsequent measurement of right of use assets.
(2) The Company adopts the straight line method for depreciation of various right of use assets.
If the Company can reasonably determine the ownership of the leased assets at the expiration of the lease term,
depreciation shall be accrued within the remaining service life of the leased assets; if it is impossible to reasonably
determine that the ownership of the leased asset can be obtained at the expiration of the lease term, depreciation shall be
accrued within the shorter of the lease term and the remaining service life of the leased asset. If the right of use assets are
impaired, the Company shall make subsequent depreciation according to the book value of the right of use assets after
deducting impairment losses.
(3) When the Company remeasures the lease liabilities according to the present value of the changed lease payment
and adjusts the book value of the right of use assets accordingly, if the book value of the right of use assets has been
reduced to zero, but the lease liabilities still need to be further reduced, the remaining amount shall be included in the
current profits and losses.
(4) For the impairment test method and impairment provision method of right of use assets, please refer to Item (26)
Impairment of long-term assets of this accounting policy.
29. Intangible assets
(1) Valuation method, service life and impairment test
√ Applicable □ Not applicable
Intangible assets are measured at actual cost. The cost of purchased intangible assets includes the purchase price,
relevant taxes and other expenses directly attributable to the intended use of the assets. If intangible assets are purchased
by installments, and the price of intangible assets purchased is delayed beyond the normal credit conditions, which
actually has the nature of financing, the cost of intangible assets is the present value of the purchase price. The cost of
intangible assets invested by investors shall be determined according to the value stipulated in the investment contract or
agreement. If the value stipulated in the investment contract or agreement is unfair, it shall be recorded according to the
fair value of intangible assets. The initial investment cost of intangible assets obtained through the exchange of non-
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monetary assets shall be determined in accordance with the Accounting Standards for Business Enterprises No. 7 -
Exchange of Non-Monetary Assets. The initial investment cost of intangible assets obtained through debt restructuring
shall be determined in accordance with the Accounting Standards for Business Enterprises No.12 - Debt Restructuring.
The entry value of intangible assets obtained by absorption and merger of enterprises under the same control shall be
determined according to the book value of the merged party; the entry value of intangible assets obtained by absorption
and merger of enterprises not under the same control shall be determined at fair value.
The Company shall analyze and judge the service life of intangible assets when obtaining them. Intangible assets
with limited service life are amortized averagely by stages using the straight line method from the time when the intangible
assets are available for use to the time when they are no longer recognized as intangible assets, and are included in profits
and losses. Intangible assets with uncertain service life are not amortized.
At the end of each year, the Company reviews the service life and amortization method of intangible assets with
limited service life. If the service life and amortization method of intangible assets are different from previous estimates,
the amortization period and amortization method shall be changed. The Company reviews the service life of intangible
assets with uncertain service life in each accounting period. If there is evidence that the service life of intangible assets is
limited, its service life shall be estimated and disposed of in accordance with the above provisions.
For the impairment test method and impairment provision method of intangible assets, please refer to Item (26)
Related notes on impairment of long-term assets of this accounting policy.
(2) Accounting policy for internal R&D expenditure
√ Applicable □ Not applicable
Criteria for dividing research stage expenditure and development stage expenditure of R&D projects: research stage
expenditure refers to the expenditure incurred by original and planned investigation to acquire and understand new
scientific or technological knowledge; expenditure in the development stage refers to the expenditure incurred in applying
research results or other knowledge to a plan or design to produce new or substantially improved materials, devices and
products before commercial production or use.
The expenditure of intangible assets independently developed by the Company in the research stage of R&D projects
shall be included in the current profits and losses when incurred. Expenditures in the development stage of development
projects can be recognized as intangible assets only if the following conditions are met at the same time:
(1) It is technically feasible to complete the intangible asset so that it can be used or sold;
(2) It has the intention to complete the intangible assets for use or sale;
(3) The ways in which intangible assets generate economic benefits include proving that there is a market for the
products produced by using the intangible assets or for the intangible assets themselves, and that the intangible assets will
be used internally, their usefulness shall be proved;
(4) There are sufficient technical, financial and other resources to complete the development of the intangible assets,
and is the ability to use or sell the intangible assets;
(5) The expenditure attributable to the development stage of the intangible asset can be reliably measured. The
expenditure of the development stage that has been costed in the previous period will not be adjusted.
30. Long-term assets impairment
√ Applicable □ Not applicable
If long-term equity investment, investment real estate, fixed assets, construction in progress, intangible assets, right
of use assets and other long-term assets measured by cost model show signs of impairment on the balance sheet date,
impairment test shall be carried out. If the result of the impairment test indicates that the recoverable amount of the asset
is lower than its book value, an impairment provision shall be made according to the difference and included in the
impairment loss. The recoverable amount is the higher of the fair value of the asset less disposal costs and the present
value of the asset's estimated future cash flows. The provision for asset impairment shall be calculated and recognized on
an individual basis. If it was difficult to estimate the recoverable amount of any individual asset, its recoverable amount
shall be determined based on the asset group to which the concerned asset belongs. The group of assets is the minimum
group of assets forming a cash-generating unit.
Goodwill is tested for impairment at least at the end of each year. The Company conducts goodwill impairment test.
The book value of goodwill due to a business combination is amortized to a related asset group using a reasonable method
at the acquisition date; where it is not possible for the book value of goodwill to be amortized to related asset groups, the
book value thereof is amortized to related portfolio of asset groups. When the book value of goodwill is apportioned to
the relevant asset group or asset group portfolio, it shall be apportioned according to the proportion of the fair value of
each asset group or asset group portfolio to the total fair value of the relevant asset group or asset group portfolio. If the
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fair value is difficult to measure reliably, it shall be apportioned according to the proportion of the book value of each
asset group or asset group portfolio to the total book value of the relevant asset group or asset group portfolio. When
conducting impairment tests on the related asset portfolio or portfolio of asset groups that contain(s) goodwill, if there are
indications of impairment, test the asset groups or groups of asset groups that do(es) not contain goodwill firstly and
calculate the recoverable amount, and compare it with the related book value to confirm the corresponding impairment
loss. Then conduct an impairment test on the asset group or asset group portfolio containing goodwill, and compare the
book value (including the book value of the apportioned goodwill) of these relevant asset groups or asset group portfolios
with their recoverable amount. If the recoverable amount of the relevant asset group or asset group portfolios is lower
than its book value, the impairment loss of goodwill shall be recognized.
Once the above asset impairment losses are recognized, they shall not be reversed in subsequent accounting periods.
31. Long-term unamortized expenses
√ Applicable □ Not applicable
Long-term unamortized expenses refer to the expenses incurred by the Company but should be shared in the current
and subsequent periods with an amortization period of more than one year, which are recorded as actual expenses and
amortized by the straight line method within its expected benefit period. If the long-term unamortized expense item can
not benefit the subsequent accounting period, the amortized value of the item that has not yet been amortized will be
transferred to the current profits and losses.
32. Contractual liabilities
(1) Recognition method of contract liabilities
√ Applicable □ Not applicable
Contract liabilities reflect the obligation of the Company to transfer goods to customers for consideration received
or receivable from customers. If the customer has paid the contract consideration or the Company has obtained the right
to collect the contract consideration unconditionally before the Company transfers the goods to the customer, the contract
liabilities shall be recognized according to the amount received or receivable at the earlier of the actual payment by the
customer and the due payment.
Contract assets and contract liabilities under the same contract are presented on a net basis, and those under different
contracts are not offset.
33. Employee remuneration
(1) Accounting treatment of short-term remuneration
√ Applicable □ Not applicable
Employee remuneration refers to various forms of remuneration or compensation given by the Company to obtain
services provided by employees or terminate labor relations. The welfare provided by the enterprise to the spouses,
children, dependents, survivors of deceased employees and other beneficiaries of employees also belongs to the employee
remuneration. Employee remuneration mainly includes short-term remuneration, post employment benefits, termination
benefits and other long-term employee benefits.
Accounting treatment of short-term remuneration:
Short-term remuneration refers to the remuneration of employees that the Company needs to pay in full within 12
months after the end of the annual reporting period for employees to provide relevant services, except for post employment
benefits and termination benefits. During the accounting period when employees provide services, the Company
recognizes the short-term remuneration actually incurred as liabilities, and includes it in the relevant asset costs and
expenses according to the beneficiary of the services provided by employees.
(2) Accounting treatment of post employment benefits
√ Applicable □ Not applicable
Post employment benefits refer to various forms of remuneration and benefits provided by the Company after the
retirement of employees or the termination of labor relations with the Company in order to obtain the services provided
by employees, except short-term remuneration and termination benefits. The post employment welfare plan includes a
defined contribution plan and a defined benefit plan. Where the defined contribution plan is a post employment welfare
plan in which the Company will no longer assume further payment obligations after paying fixed fees to an independent
fund; a defined benefit plan refers to a post employment benefit plan other than a defined contribution plan.
(1) Defined contribution plan
The defined contribution plan includes basic endowment insurance and unemployment insurance. During the
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accounting period when employees provide services to the Company, the amount payable shall be calculated according
to the payment base and proportion stipulated locally, recognized as liabilities, and included in the current profits and
losses or related asset costs.
During the accounting period when employees provide services, the amount payable calculated according to the
defined contribution plan is recognized as a liability and included in the current profits and losses or related asset costs.
(2) Defined benefit plan
The Company shall attribute benefit obligations under a defined benefit plan to periods of service provided by
employees according to the formula determined by projected unit credit method, and include them in current profits and
losses or the related cost of assets. The cost of employee remuneration caused by the Company's defined benefit plan
includes the following components:
A. Service costs include current service costs, past service costs and settlement gains or losses. Where the current
service cost refers to the increase in the present value of the obligations of the defined benefit plan caused by the provision
of services by employees in the current period; the past service cost refers to the increase or decrease in the present value
of the obligations of the defined benefit plan related to the services of employees in the previous period caused by the
revision of the defined benefit plan.
B. The net interest on the net liabilities or assets of the defined benefit plan includes the interest income of the plan
assets, the interest expenses of the defined benefit plan obligations and the interest affected by the asset ceiling.
C. Changes in net liabilities or net assets of the defined benefit plan are remeasured.
Unless other accounting standards require or allow the cost of employee welfare to be included in the cost of assets,
the Company will include Items A and B above in the current profits and losses; Item C is included in other comprehensive
income and will not be reversed to profits and losses in subsequent accounting periods, but these amounts recognized in
other comprehensive income can be transferred within equity.
(3) Accounting treatment of termination benefits
√ Applicable □ Not applicable
Termination benefits refer to the compensation given to employees by the Company to terminate the labor
relationship with employees before the expiration of their labor contracts, or to encourage employees to voluntarily accept
layoffs. If the Company provides termination benefits to employees, the employee remuneration liabilities arising from
termination benefits shall be recognized as soon as possible, whichever is the following, and shall be included in the
current profits and losses: When the Company cannot unilaterally withdraw the termination benefits provided due to the
termination of labor relations plans or layoffs; when the Company confirms the costs or expenses related to the
reorganization involving the payment of termination benefits.
(4) Accounting treatment of other long-term employee benefits
√ Applicable □ Not applicable
Other long-term employee benefits refer to all employee remuneration except short-term salaries, post employment
benefits and termination benefits, including long-term paid absenteeism, long-term disability benefits, long-term profit
sharing plans, etc. Other long-term employee benefits provided by the Company to employees that meet the conditions
of the defined contribution plan shall be dealt with in accordance with the relevant provisions of the defined contribution
plan; for other long-term employee welfare except for the above circumstances, the net liabilities or net assets of other
long-term employee welfare shall be recognized and measured in accordance with the relevant provisions of the defined
benefit plan. At the end of the reporting period, the Company attributed the welfare obligations arising from other long-
term employee welfare to the period when employees provided services and included them in the current profits and
losses or related asset costs.
34. Lease liabilities
√ Applicable □ Not applicable
On the beginning date of the lease term, the Company recognizes the present value of the unpaid lease payments as
a lease liability, except for short-term leases and low-value asset leases.
In calculating the present value of the lease payment, the Company, as the lessee, adopts the embedded interest rate
of the lease as the discount rate; if the embedded interest rate of the lease cannot be determined, the incremental borrowing
rate of the Company shall be used as the discount rate.
The Company calculates the interest expense of the lease liabilities during each period of the lease term at a fixed
cyclical interest rate and includes it in the current profits and losses. The amount of variable lease payments not included
in the measurement of lease liabilities is included in the current profits and losses when actually incurred.
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After the beginning date of the lease term, when the substantial fixed payment changes, the estimated amount payable
of the guaranteed residual value changes, the index or ratio used to determine the lease payment changes, the evaluation
results or actual exercise of the purchase option, renewal option or termination option changes, the Company remeasures
the lease liabilities according to the present value of the changed lease payment.
35. Estimated liabilities
√ Applicable □ Not applicable
If the Company's obligations related to contingencies meet the following conditions at the same time, they will be
recognized as liabilities: (1) The obligation is the current obligation undertaken by the Company; (2) The performance of
this obligation may lead to the outflow of economic benefits; (3) The amount of the obligation can be reliably measured.
It is expected that all or part of the expenses required for liabilities will be compensated by a third party or other
parties, and the amount of compensation will be recognized separately as an asset when it is basically determined that it
can be received, and the amount of compensation recognized will not exceed the book value of the recognized liabilities.
The estimated liabilities are initially measured according to the best estimate of the expenditure required to fulfill the
relevant current obligations, and factors such as risks, uncertainties and time value of money related to contingencies are
taken into account. If the time value of money has a significant impact, the best estimate is determined by discounting the
relevant future cash outflows.
On the balance sheet date, the Company reviews the book value of estimated liabilities, and if there is conclusive
evidence that the book value cannot truly reflect the current best estimate, the book value shall be adjusted according to
the current best estimate.
36. Share-based payments
√ Applicable □ Not applicable
1. Types of share-based payments
The share-based payment of the Company is divided into cash settled share-based payment and equity settled share-
based payment.
The share-based payment settled by equity shall be measured at the fair value of the equity instruments granted to
employees. If the right is exercisable immediately after the grant, it shall be included in the relevant costs or expenses
according to the fair value of the equity instruments on the grant date, and the capital reserve shall be increased
accordingly. If the right can be exercised only after completing the services within the waiting period or meeting the
prescribed performance conditions, on each balance sheet date within the waiting period, the services obtained in the
current period shall be included in the relevant costs or expenses and capital reserves on the basis of the best estimate of
the number of equity instruments exercisable and according to the fair value on the grant date of equity instruments. After
the exercisable date, the recognized relevant costs or expenses and the total amount of owner's equity will not be adjusted.
Cash settled share-based payments are measured at the fair value of the liabilities assumed by the Company
calculated and determined on the basis of shares or other equity instruments. If the right is exercisable immediately after
the grant, the fair value of the Company's liabilities shall be included in the relevant costs or expenses on the date of grant,
and the liabilities shall be increased accordingly. For cash settled share-based payment that can be exercised only after
completing the services in the waiting period or meeting the prescribed performance conditions, on each balance sheet
date in the waiting period, based on the best estimate of the exercisable rights, the services obtained in the current period
shall be included in the cost or expense and the corresponding liabilities according to the fair value amount of the
Company's liabilities. On each balance sheet date and settlement date before the settlement of relevant liabilities, the fair
value of liabilities shall be re-measured, and the changes shall be included in the current profits and losses.
2. Accounting treatment for the implementation, modification and termination of share-based payment plans
No matter how the terms and conditions of the equity instruments granted are modified, or even the grant of the
equity instruments is cancelled or the equity instruments are settled, the Company shall at least recognize the
corresponding services obtained by measuring the fair value of the equity instruments granted on the grant date, unless
the right is not exercisable due to the failure to meet the exercisable conditions of the equity instruments (except market
conditions).
If the Company cancels the granted equity instruments or settles the granted equity instruments during the waiting
period (except those cancelled due to failure to meet the exercisable conditions), the treatment is as follows:
(1) Cancel or settle as accelerated exercisable and immediately confirm the amount that should have been confirmed
in the remaining waiting period.
(2) All payments to employees at the time of cancellation or settlement shall be treated as repurchase of equity, and
the part paid for repurchase that is higher than the fair value of the equity instrument on the repurchase date shall be
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included in the current expenses.
(3) If a new equity instrument is granted to an employee and it is determined on the grant date of the new equity
instrument that the new equity instrument granted is used to replace the cancelled equity instrument, the Company shall
deal with the granted alternative equity instrument in the same way as the terms and conditions of the original equity
instrument are amended.
37. Preferred shares, perpetual bonds and other financial instruments
□ Applicable √ Not applicable
38. Revenue
(1) Accounting policies adopted for revenue recognition and measurement
√ Applicable □ Not applicable
Revenue is the total inflow of economic benefits formed in the daily activities of the Company, which lead to the
increase of owner's equity and are unrelated with the capital invested by the owner.
The Company recognizes revenue when it performs its performance obligations under the contract, that is, when the
customer obtains control of the relevant goods. Obtaining control of relevant goods means being able to dominate the use
of the goods and obtain almost all economic benefits from it, including the ability to prevent other parties from dominating
the use of the goods and obtaining almost all economic benefits from it.
The transaction price is the amount of consideration that the Company is expected to be entitled to receive as a result
of the transfer of goods to customers, excluding payments received on behalf of third parties and payments that the
Company expects to return to customers. In determining the contract transaction price, if there is a variable consideration,
the Company determines the best estimate of the variable consideration according to the expected value or the most likely
amount, and includes it in the transaction price at an amount not exceeding the amount that is most likely not to be
significantly reversed when the relevant uncertainties are eliminated. If there is a significant financing component in the
contract, the Company will determine the transaction price according to the amount payable in cash when the customer
obtains the control over the goods. The difference between the transaction price and the contract consideration will be
amortized by the effective interest rate method during the contract period. If the interval between the customer obtaining
the control over the goods and the customer paying the price is not more than one year, the Company will not consider
the financing component. When the consideration that the Company is entitled to collect from the customer due to the
transfer of goods is in the form of non-cash, the Company shall determine the transaction price according to the fair value
of the non-cash consideration on the contract start date. Where the fair value of the non-cash consideration cannot be
reasonably estimated, the Company indirectly determines the transaction price with reference to the separate selling price
of the goods it undertakes to transfer to customers. The Company expects to refund the amount to the customer by
offsetting the consideration payable against the transaction price in addition to obtaining other clearly identifiable goods
from the customer. If the consideration payable to customers exceeds the fair value of clearly distinguishable goods
obtained from customers, the excess amount shall be used as the consideration payable to customers to offset the
transaction price. If the fair value of clearly distinguishable goods obtained from customers cannot be reasonably
estimated, the Company will offset the transaction price in full with the consideration payable to customers. In the
accounting treatment of the transaction price offset by the consideration payable to customers, the Company offsets the
current income at the later of the recognition of relevant income and the payment (or commitment to pay) of customer
consideration.
If the contract contains two or more performance obligations, the Company shall, on the commencement date of the
contract, apportion the transaction price to each individual performance obligation according to the relative proportion of
the individual selling price of the goods promised by each individual performance obligation, and measure the income
according to the transaction price apportioned to each individual performance obligation. In case of subsequent changes
in the transaction price, the Company shall apportion the amount of such subsequent changes to the performance
obligations in the contract on the basis adopted on the commencement date of the contract. The transaction price will not
be redistributed due to the change of the separate selling price after the contract start date.
If one of the following conditions is met, the Company shall fulfill its performance obligations within a certain period
of time; otherwise, it belongs to the performance obligation at a certain point:
(1) Customers obtain and consume the economic benefits brought by the Company's performance at the same time
as the Company's performance;
(2) Customers can control the goods under construction in the process of performance of the Company;
(3) The goods produced in the process of performance by the Company have irreplaceable uses, and the Company
has the right to collect payments for the accumulated performance so far during the whole contract period.
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For the performance obligations within a certain period of time, the Company recognizes the revenue in accordance
with the performance progress during the period, except that the performance progress cannot be determined reasonably.
The Company determines the performance progress of providing services in accordance with the investment method.
When the performance progress cannot be reasonably determined, if the cost incurred by the Company is expected to be
compensated, the revenue shall be recognized according to the amount of cost incurred until the performance progress
can be reasonably determined.
For the performance obligations performed at a certain time point, the Company recognizes revenue at the time when
the customer obtains control over the relevant goods. In determining whether customers have obtained control of goods,
the Company will consider the following signs:
(1) The Company enjoys the current collection right in respect of the goods, that is, the customer has the current
payment obligation in respect of the goods;
(2) The Company has transferred the legal ownership of the goods to the customer, that is, the customer has owned
the legal ownership of the goods;
(3) The Company has transferred the physical goods to the customer, that is, the customer has occupied the physical
goods;
(4) The Company has transferred the main risks and rewards of the ownership of the goods to the customer, that is,
the customer has obtained the main risks and rewards of the ownership of the goods;
(5) The customer has accepted the product;
(6) Other signs that customers have gained control of the goods.
2. Specific recognition methods related to the main activities of the Company to obtain revenue
The Company's sales model is mainly divided into four modes: dealer exclusive store sales, direct-sale exclusive
store sales, bulk user business sales and export sales. The specific methods for recognizing sales revenue are as follows:
(1) Dealer exclusive store sales: sales through exclusive stores opened by dealers. After receiving customer orders
and collecting a certain proportion of deposits from customers (the proportion of deposits shall be decided by the dealers
themselves), the exclusive stores opened by the dealers shall send the sales orders confirmed by customers to the Company,
and pay all the payment to the Company according to the settlement price. The Company will begin to organize production
according to the orders. After the Company completes the production of products, the products are transported to the
delivery place designated by the logistics company corresponding to the dealers, that is, the sales revenue is recognized;
dealers in the Pearl River Delta region can choose to pick up their own products according to their own resource allocation
conditions, and the Company recognizes sales revenue when delivering products.
(2) Direct exclusive store sales: sales through exclusive stores established by the Company as subsidiaries and
branches. After collecting a certain proportion of the deposit, the direct exclusive store sends the sales order confirmed
by the customer to the Company, and the Company arranges production according to the order. The direct exclusive store
shall notify the Company to deliver the goods after receiving the remaining payment from the customer, and the Company
shall be responsible for the installation. After the Company receives all the payment for goods, the revenue is recognized
when the installation is completed.
(3) Bulk user business sales: the Company produces and sells supporting overall household products for large-scale
real estate projects. The Company recognizes revenue when the customer obtains control of the goods and the Company
has actually obtained the inflow of economic benefits related to the goods.
(4) Export sales: The Company shall recognize the sales revenue when it has completed the customs declaration
procedures, the goods have crossed the ship's rail (the contract stipulates that the goods have been traded at FOB), obtained
the bill of lading and completed the delivery procedures with the bank.
(2) The adoption of different business models in similar businesses leads to differences in accounting policies for
revenue recognition
□ Applicable √ Not applicable
39. Contract costs
√ Applicable □ Not applicable
Contract costs include incremental costs incurred in obtaining contracts and contract performance costs.
The incremental cost incurred to obtain the contract refers to the cost (such as sales commission) that will not occur
if the Company does not obtain the contract. If the cost is expected to be recovered, the Company recognizes it as an asset
as the cost of contract acquisition. Other expenses incurred by the Company for the acquisition of contracts other than the
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incremental costs expected to be recovered shall be included in the current profits and losses when incurred.
If the cost incurred for the performance of the contract is not applicable to the scope of relevant standards such as
inventory, fixed assets or intangible assets, and the following conditions are met at the same time, the Company shall
recognize it as an asset as the cost of contract performance:
(1) The cost is directly related to a current or expected contract, including direct labor, direct materials,
manufacturing expenses (or similar expenses), costs clearly borne by the customer and other costs incurred solely as a
result of the contract;
(2) This cost increases the resources that the enterprise will use to fulfill its performance obligations in the future;
(3) The cost is expected to be recovered.
The assets recognized at the cost of contract acquisition and the assets recognized at the cost of contract performance
are amortized on the same basis as the recognition of goods or services related to the assets and included in the current
profits and losses.
If the book value of assets related to contract costs is higher than the difference between the following two items,
the Company shall make provision for impairment of the excess part and recognize it as an asset impairment loss:
(1) The remaining consideration expected to be obtained by the enterprise due to the transfer of goods related to the
asset;
(2) The estimated cost to be incurred for the transfer of the related goods.
If the factors of impairment in the previous period change after that, so that the difference between (1) and (2) is
higher than the book value of the asset, the original provision for asset impairment shall be reversed and included in the
current profits and losses, but the book value of the asset after the reversal shall not exceed the book value of the asset on
the reversal date assuming that no provision for impairment is made.
40. Government subsidies
√ Applicable □ Not applicable
1. Types of government subsidies
Government subsidies refer to monetary assets or non-monetary assets obtained by the Company from the
government free of charge, including government subsidies related to assets and government subsidies related to income.
Government subsidies related to assets refer to government subsidies obtained by the Company for purchase and
construction or other forms of long-term assets.
The government subsidies related to income refer to other government subsidies other than those related to assets.
2. Recognition principle and time point of government subsidies
Recognition principle of government subsidies:
(1) The Company can meet the conditions attached to government subsidies;
(2) The Company can receive government subsidies.
Government subsidies can only be recognized when the above conditions are met at the same time.
3. Measurement of government subsidies
(1) If the government subsidy is a monetary asset, the Company shall measure it according to the amount received
or receivable;
(2) If the government subsidy is a non-monetary asset, the Company shall measure it at fair value; if the fair value
cannot be obtained reliably, it shall be measured at the nominal amount (the nominal amount is 1 yuan).
4. Accounting treatment of government subsidies
(1) Government subsidies related to assets shall be offset against the book value of related assets or recognized as
deferred income at the time of acquisition. If it is recognized as deferred income, it shall be included in profits and losses
by stages in accordance with a reasonable and systematic method within the service life of the relevant assets. Government
subsidies measured at their nominal amounts are directly included in the current profits and losses.
(2) Government subsidies related to income shall be handled according to the following circumstances:
A. If it is used to compensate the Company for related costs or losses in subsequent periods, it shall be recognized
as deferred income at the time of acquisition, and shall be included in the current profits and losses or offset related costs
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during the period when the relevant costs or losses are recognized.
B. If it is used to compensate the relevant costs or losses incurred by the Company, it shall be directly included in
the current profits and losses or offset the relevant costs at the time of acquisition.
(3) For government subsidies included in both asset related parts and income related parts, if they can be
distinguished, they will be accounted for separately in different parts; those that are difficult to distinguish are classified
as income related government subsidies as a whole.
(4) Government subsidies related to the daily operation of the Company shall be included in other income or offset
against related costs and expenses according to the essence of economic business. Governmental subsidies unrelated to
the Company's daily activities are included in non-operating income and expenditure. If the finance allocates the discount
funds directly to the Company, the Company will offset the relevant borrowing costs with the corresponding discount.
(5) If the confirmed government subsidies need to be returned, they shall be dealt with according to the following
circumstances:
A. If the book value of the relevant assets is offset at the time of initial recognition, the book value of the assets shall
be adjusted.
B. If there are relevant deferred income, the book amount of relevant deferred income shall be offset, and the excess
part shall be included in the current profits and losses.
C. In other cases, it shall be directly included in the current profits and losses.
41. Deferred tax assets/deferred tax liabilities
√ Applicable □ Not applicable
The Company shall determine its tax basis when obtaining assets and liabilities. If there is a temporary difference
between the book value of assets and liabilities and their tax basis, the resulting deferred income tax assets or deferred
income tax liabilities shall be recognized in accordance with the regulations.
1. Recognition of deferred income tax assets
(1) The Company recognizes the deferred income tax assets arising from the deductible temporary differences to the
extent that it is likely to obtain the taxable income used to offset the deductible temporary differences. However, deferred
income tax assets arising from the initial recognition of assets or liabilities in transactions with the following
characteristics are not recognized: ① The transaction is not a business merger; ② At the time of transaction, neither
accounting profit nor taxable income (or deductible loss) will be affected.
(2) The Company shall recognize the corresponding deferred income tax assets if the deductible temporary
differences related to the investment of subsidiaries, associates and joint ventures meet the following conditions at the
same time: ① The temporary differences are likely to be reversed in the foreseeable future; ② It is likely to obtain the
taxable income used to deduct the deductible temporary difference in the future.
(3) For the deductible losses and tax credits that can be carried forward to subsequent years in accordance with the
tax law, they shall be treated as deductible temporary differences, and the corresponding deferred income tax assets shall
be recognized to the extent that it is likely to obtain future taxable income to offset the deductible losses and tax credits.
2. Recognition of deferred income tax liabilities
(1) Except for the deferred income tax liabilities arising from the following transactions, the Company recognizes
all deferred income tax liabilities arising from taxable temporary differences: ① Initial recognition of goodwill; ② Initial
recognition of assets or liabilities arising from transactions that meet the following characteristics at the same time: The
transaction is not a business merger; at the time of transaction, neither accounting profit nor taxable income (or deductible
loss) will be affected.
(2) The Company recognizes corresponding deferred income tax liabilities for taxable temporary differences related
to investments in subsidiaries, associates and joint ventures. However, except that the following conditions are met at the
same time: ① The investment enterprise can control the time for the reversal of temporary differences;
② The temporary difference is likely not to reverse in the foreseeable future.
42. Leasing
(1) Accounting treatment of operating leasing
□ Applicable √ Not applicable
(2) Accounting treatment of financial leasing
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□ Applicable √ Not applicable
(3) Determination method and accounting treatment method of lease under the new lease standards
√ Applicable □ Not applicable
Lease refers to a contract in which the lessor transfers the right to use assets to the lessee for consideration within a
certain period of time.
1. Identification of leases
On the commencement date of the contract, the Company evaluates whether the contract is a lease or includes a
lease. A contract is a lease or includes a lease if a party transfers the right to control the use of one or more identified
assets for a period of time in exchange for consideration. In order to determine whether the contract transfers the right to
control the use of the identified assets within a certain period of time, the Company makes the following assessment:
(1) Whether the contract involves the use of the identified assets. The identified asset may be explicitly designated
by contract or implicitly designated when the asset is available for use by the customer, and the asset is physically
distinguishable, or if part of the production capacity or other parts of the asset are physically indistinguishable but
represent substantially all of production capacity of the asset, thus enabling the customer to obtain almost all the economic
benefits arising from the use of the asset. If the supplier of the asset has the right to substantially replace the asset
throughout the use period, the asset is not an identified asset;
(2) Whether the lessee is entitled to almost all the economic benefits arising from the use of the identified assets
during the use period;
(3) Whether the lessee has the right to dominate the use of the identified assets during the use period.
2. Spinoff and consolidation of leases
If the contract includes multiple separate leases at the same time, the Company will split the contract and conduct
accounting treatment for each separate lease.
If the following conditions are met at the same time, the right to use the identified assets constitutes a separate lease
in the contract:
(1) The lessee may profit from the use of the asset alone or in conjunction with other readily available resources;
(2) The asset is not highly dependent or highly related to other assets in the contract.
3. As lessee
(1) Right of use assets
See Item (24) Right of use assets of this accounting policy for determination method and accounting treatment
method of right of use assets.
(2) Lease liabilities
See item (30) Lease liabilities of this accounting policy for the determination method and accounting treatment
method of lease liabilities.
(3) Assessment of lease term
The lease term is the irrevocable period during which the Company, as the lessee, has the right to use the leased
assets.
The Company has a renewal option, that is, the right to choose to renew the asset, and if it is reasonably determined
that the option will be exercised, the lease term also includes the period covered by the renewal option. The Company has
the option to terminate the lease, that is, the option to terminate the lease of the asset, but it is reasonably determined that
the option will not be exercised, and the lease period includes the period covered by the option to terminate the lease.
If a material event or change occurs within the Company's control and affects whether the Company reasonably
determines that it will exercise the corresponding option, the Company reassesses whether it reasonably determines that
it will exercise the renewal option, the purchase option or not to exercise the termination option.
(4) Lease change
If the lease changes and meets the following conditions at the same time, the Company will treat the lease change as
a separate lease for accounting treatment:
A. The lease change expands the scope of the lease by increasing the right to use one or more leased assets;
B. The increased consideration is equivalent to the amount of the separate price for most of the expansion of the
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lease adjusted for the circumstances of the contract.
(5) Short-term leases and low-value asset leases
Short-term lease refers to a lease with a lease term of no more than 12 months and excluding the purchase option on
the beginning date of the lease term. Low value asset lease refers to the lease with lower value when the single leased
asset is a brand-new asset. Where the Company sublets or expects to sublet leased assets, the original lease does not
belong to the lease of low-value assets.
The Company chooses not to recognize the right of use assets and lease liabilities for short-term leases and low-
value asset leases, and the relevant lease payments are included in the current profit and loss or relevant asset costs
according to the straight-line method in each period of the lease term.
4. As lessor
On the lease commencement date, the Company divides the lease into financial lease and operating lease. Finance
lease refers to a lease that essentially transfers almost all the risks and rewards related to the ownership of leased assets
regardless of whether the ownership is finally transferred or not. Operating leases refer to leases other than finance leases.
When the Company is the sublessee lessor, the sublease is classified based on the use right assets generated from the
original lease.
(1) Accounting treatment of for operating leasing
The lease receipts from operating leases are recognized as rental income on a straight-line basis in each period of the
lease term. The Company capitalizes the initial direct expenses related to operating leases, and allocates them into the
current profits and losses on the same basis as the recognition of rental income during the lease term. The amount of
variable lease payments not included in the lease receipts shall be included in the current profits and losses when actually
incurred.
(2) Accounting treatment of financial leasing
On the lease commencement date, the Company recognizes the finance lease receivables for the finance lease and
terminates the recognition of the finance lease assets. When the Company initially measures the finance lease receivables,
the net amount of the lease investment is taken as the entry value of the finance lease receivables. The net lease investment
is the sum of the unguaranteed residual value and the present value of the lease receipts not received on the beginning
date of the lease term discounted at the interest rate embedded in the lease.
The Company calculates and recognizes the interest income of each period within the lease term according to the
fixed periodic interest rate. For the termination of recognition and impairment of financial leasing receivables, please
refer to 10. Notes on financial instruments of this accounting policy.
The amount of variable lease payments not included in the measurement of net lease investment shall be included in
the current profit and loss when it actually occurs.
5. After-sale leaseback transactions
The Company assesses and determines whether the transfer of assets in the after-sale leaseback transaction is a sale
in accordance with the provisions of 38. Revenue recognition method of this accounting policy.
(1) As lessee
If the transfer of assets in the after-sale leaseback transaction is a sale, the Company measures the right of use assets
formed by the after-sale leaseback according to the part of the book value of the original assets related to the right of use
obtained by the leaseback, and only recognizes the relevant gains or losses on the rights transferred to the lessor.
If the fair value of the sale consideration is different from the fair value of the asset, or the lessor does not collect
rent at the market price, the Company will account for the amount of the sale consideration lower than the market price
as prepaid rent, and the amount higher than the market price as additional financing provided by the lessor to the lessee;
at the same time, the relevant sales gains or losses are adjusted according to the fair value.
If the transfer of assets in the after-sale leaseback transaction does not belong to sales, the Company will continue to
recognize the transferred assets and recognize a financial liability equivalent to the transfer income.
(2) As lessor
If the transfer of assets in the after-sale leaseback transaction belongs to sales, the Company shall conduct
corresponding accounting treatment according to the purchase of assets, and shall conduct accounting treatment for the
lease of assets according to the leasing standards.
If the fair value of the sales consideration is different from the fair value of the asset, or the Company does not collect
rent at the market price, the Company will account for the amount of the sales consideration lower than the market price
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as rent received in advance, and the amount higher than the market price as additional financing provided by the Company
to the lessee; at the same time, the rental income is adjusted according to the market price.
If the transfer of assets in the after-sale leaseback transaction does not belong to sales, the Company recognizes a
financial asset equal to the transfer income.
43. Other significant accounting policies and accounting estimates
√ Applicable □ Not applicable
Other comprehensive income refers to the gains and losses that the Company has not recognized in the current profits
and losses in accordance with other accounting standards. They are presented in the following two categories:
1. Other comprehensive income items that cannot be reclassified into profits and losses in subsequent accounting
periods mainly include changes caused by the re-measurement of net liabilities or net assets of defined benefit plans, the
share of other comprehensive income that cannot be reclassified into profits or losses in the investee's subsequent
accounting periods accounted for in accordance with the equity method, and changes in the fair value of financial assets
designated to be measured at fair value and whose changes are included in other comprehensive income.
2. Other comprehensive income items that will be reclassified into profits and losses when the prescribed conditions
are met in the subsequent accounting period mainly include the share of other comprehensive income that the investee
will be classified into profits and losses when the prescribed conditions are met in the subsequent accounting period, the
part of gains or losses arising from cash flow hedging instruments that belongs to effective hedging, and the translation
difference of foreign currency financial statements.
44. Changes in significant accounting policies and accounting estimates
(1) Changes in significant accounting policies
√ Applicable □ Not applicable
Remarks (name
and amount of
Contents and reasons for changes in accounting policies Approval procedure statement items
significantly
affected)
In December 2021, the Ministry of Finance issued the
Interpretation of Accounting Standards for Business
Enterprises No. 15 (CK [2021] No. 35) (hereinafter referred
to as "Interpretation No.15"). The contents of "Accounting According to the relevant See other
treatment of products or by-products produced before fixed provisions of the Rules for the instructions
assets reach the predetermined usable state or during Listing of Stocks on the (1)
research and development" and "Judgment on loss-making Shanghai Stock Exchange
contracts" shall come into force as of January 1, 2022. The (revised in February 2023), if
Company shall implement it from the date of regulation. the accounting policy is
In November 2022, the Ministry of Finance issued the changed in accordance with
Interpretation of Accounting Standards for Business laws and regulations or the
Enterprises No. 16 (CK [2022] No. 31) (hereinafter referred requirements of the unified
to as "interpretation No.16"). The contents of "accounting national accounting system, it
treatment of the income tax impact on dividends related to may be directly announced See other
financial instruments classified by the issuer as equity without the deliberation of the instructions
instruments" and "accounting treatment of the enterprise's board of directors and the (2)
modification of stock payment settled in cash into stock general meeting of shareholders
payment settled in equity" shall enter into force as of the date
of promulgation. The Company shall implement it from the
date of regulation.
Others
(1) On December 30, 2021, the Ministry of Finance issued Interpretation No.15, "accounting treatment for the
external sales of products or by-products produced by enterprises before their fixed assets reach the expected usable state
or in the process of R&D" and "judgment on loss contracts", which shall be implemented by the Company from January
1, 2022.
A. Accounting treatment of trial operation sales
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Interpretation No. 15 clarifies the accounting treatment and presentation of the external sales of products or
byproducts produced before the fixed assets reach the expected usable state or in the process of R&D, and stipulates that
the net amount of revenue related to trial operation sales after offsetting the relevant costs shall not be used to offset the
cost of fixed assets or R&D expenditure. The provisions shall come into force on January 1, 2022, and retroactively adjust
and compare the financial statements for trial sales between the beginning of the earliest period for the presentation of
financial statements and January 1, 2022.
B. Judgment on loss making contracts
Interpretation No. 15 clarifies that the "cost of performing the contract" considered by an enterprise in judging
whether a contract constitutes a loss making contract shall include the incremental cost of performing the contract and
the apportionment amount of other costs directly related to the performance of the contract. The provisions shall come
into force on January 1, 2022, and shall be implemented for contracts that have not fulfilled all their obligations on January
1, 2022. The cumulative impact shall be adjusted to the retained earnings and other related financial statement items at
the beginning of the year on the implementation date, and the data of comparative financial statements in the previous
period shall not be adjusted.
The adoption of Interpretation No. 15 by the Company has not had a material impact on the financial position and
results of operations of the Company.
(2) On November 30, 2022, the Ministry of Finance issued the Accounting Standards for Business Enterprises
Interpretation No. 16 (hereinafter referred to as "Interpretation No. 16"), and the Company shall implement the contents
of "accounting treatment on the income tax impact of dividends related to financial instruments classified by the issuer as
equity instruments" and "accounting treatment on the revision of cash settled share-based payment by enterprises to equity
settled share-based payment" from the date of promulgation.
A. Accounting treatment on the income tax impact of dividends related to financial instruments classified as equity
instruments by the issuer
Interpretation No. 16 clarifies that for financial instruments classified as equity instruments, if the relevant dividend
expenditure is deducted before enterprise income tax in accordance with the relevant provisions of tax policies, the
enterprise shall recognize the income tax impact related to dividends when confirming dividends payable. The provisions
shall come into effect on November 30, 2022. If the dividends payable of financial instruments classified as equity
instruments were recognized before January 1, 2022 and the recognition of related financial instruments was not
terminated on January 1, 2022, retrospective adjustment and comparison of financial statements shall be made.
B. Accounting treatment of amending cash settled share-based payment to equity settled share-based payment
Interpretation No. 16 clarifies that if the terms and conditions of the cash settled share-based payment agreement are
amended to make it an equity settled share-based payment, on the date of amendment, the enterprise shall measure the
equity settled share-based payment at the fair value on the date of grant of equity instruments, record the services obtained
into the capital reserve, and terminate the recognition of the liabilities recognized on the date of amendment for cash
settled share-based payment. The difference between the two is included in the current profits and losses. The provisions
shall come into force on November 30, 2022, and the cumulative impact shall be adjusted to the retained earnings and
other related financial statement items on January 1, 2022, and the information of comparable periods shall not be adjusted.
The adoption of Interpretation No. 16 by our company did not have a significant impact on the Company's financial
condition and operating results.
(2) Changes in significant accounting estimates
□ Applicable √ Not applicable
(3) The first implementation of new accounting standards or standard interpretations starting from 2022 involves
adjusting the financial statements at the beginning of the year of the first implementation
□ Applicable √ Not applicable
45. Other
□ Applicable √ Not applicable
VI. Taxation
1. Main taxes and tax rates
Main taxes and tax rates
√ Applicable □ Not applicable
Taxes Tax calculation basis Tax rates
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Value added generated during the
Value added tax process of selling goods or providing 6%, 9%, 13%
taxable services
Urban maintenance and
Value added tax payable 5%, 7%
construction tax
Corporate income tax Taxable income 15%, 8.25%, 20%, 24%, 25%
Education surcharges Value added tax payable 3%
Local education surcharges Value added tax payable 2%
Where there are taxpayers with different enterprise income tax rates for tax payment, the disclosure is as follows:
√ Applicable □ Not applicable
Name of Taxpayer Income Tax Rate (%) Remarks
Oppein Home Group Inc. 15 Note 1
Tianjin Oppein Integration Home Co., Ltd. (hereinafter referred to as "Tianjin
15 Note 2
Oppein")
Guangzhou Oppein Integration Home Co., Ltd. (hereinafter referred to as
15 Note 3
"Guangzhou Integration")
Dongguan Oppein Integration Home Sales Co., Ltd. (hereinafter referred to as
25
"Dongguan Oppein Sales")
Dongguan Oppein Integration Home Design Co., Ltd. (hereinafter referred to as
25
"Dongguan Oppein Design")
Guangzhou Oppein Sanitary Ware Co., Ltd. (hereinafter referred to as "Dongguan
25
Oppein Sanitary Ware")
Guangzhou Ouboni Integration Home Co., Ltd. (hereinafter referred to as
25
"Ouboni")
Oppein (Guangzhou) Soft Decoration Design Co., Ltd. (hereinafter referred to as
25
"Oppein Soft Decoration")
Oppein (Hong Kong) International Trade Company Limited (hereinafter referred
8.25 Note 4
to as "Oppein (Hong Kong) ")
FORMER S.R.L. 24 Note 8
Jiangsu Wuxi Oppein Integration Home Co., Ltd. (hereinafter referred to as 15 Note 5
"Wuxi Oppein")
Jiangsu Oppein Overall Custom Home Co., Ltd. (hereinafter referred to as 25
"Jiangsu Oppein Custom")
Qingyuan Oppein Integration Home Co., Ltd. (hereinafter referred to as 15 Note 6
"Qingyuan Oppein")
Guangzhou Oppolia Smart Home Co., Ltd. (hereinafter referred to as 25
"Guangzhou Oppolia")
Guangzhou Owell Decoration Material Co., Ltd. (hereinafter referred to as 25
"Gunagzhou Owell")
Wuhan Oppein Mingda Home Products Co., Ltd. (hereinafter referred to as 20 Note 11
"Wuhan Countertop Factory")
Xi'an Oulian Home Products Co., Ltd. (hereinafter referred to as "Xi'an 20 Note 11
Countertop Factory")
Oppein United (Tianjin) Home Sales Co., Ltd. (hereinafter referred to as 25
"Oppein United")
Guangzhou Oppein Creative Home Design Co., Ltd. (hereinafter referred to as 15 Note 7
"Oppein Creative")
OPPEIN ITALY ACADEMY S.R.L. (hereinafter referred to as "ITALY 24 Note 8
ACADEMY")
Chengdu Oppein Smart Home Co., Ltd. (hereinafter referred to as "Chengdu 15 Note 9
Oppein")
Nanchang Oupai Home Products Co., Ltd. (hereinafter referred to as "Nanchang 20 Note 11
Countertop Factory")
Kunming Oppolia Smart Home Products Co., Ltd. (hereinafter referred to as 20 Note 11
"Kunming Countertop Factory")
Chengdu Shuangliu Oppein Loading and Unloading Service Co., Ltd. 25
(hereinafter referred to as "Chengdu Loading and Unloading")
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2022 Annual Report
Name of Taxpayer Income Tax Rate (%) Remarks
Meizhou Oppein Investment Industry Co., Ltd. (hereinafter referred to as 25
"Meizhou Oppein")
Meizhou Zheling Investment Industry Co., Ltd. (hereinafter referred to as 25
"Meizhou Zheling")
Guangzhou Oppein Home Design Institute Co., Ltd. (hereinafter referred to as 25
"Guangzhou Design Institute")
Zhuhai Oppein Creative Home Design Co., Ltd. (hereinafter referred to as 15 Note 10
"Zhuhai Oppein")
Hangzhou Oppein Large Home Furnishing Co., Ltd. (hereinafter referred to as 25
"Hangzhou Large Home Furnishing")
Chengdu Oppein Creative Large Home Furnishing Co., Ltd. (hereinafter 25
referred to as "Chengdu Large Home Furnishing")
Chongqing Oppein Large Home Furnishings Co., Ltd. (hereinafter referred to as 25
"Chongqing Large Home Furnishings")
Handan Oppein Large Home Furnishing Sales Co., Ltd. (hereinafter referred to 25
as "Handan Large Home Furnishing")
Luzhou Oppein Large Home Furnishing Co., Ltd. (hereinafter referred to as 25
"Luzhou Large Home Furnishing")
Nanning Oppein Large Home Furnishing Co., Ltd. (hereinafter referred to as 25
"Nanning Large Home Furnishing")
Guangzhou Huadu Oppein Creative Home Furnishing Co., Ltd. (hereinafter 25
referred to as "Huadu Large Home Furnishing")
Shenzhen Oppein Creative Home Furnishing Co., Ltd. (hereinafter referred to as 25
"Shenzhen Large Home Furnishing")
Xingpai Commercial Property Management (Guangzhou) Co., Ltd. (hereinafter 25
referred to as "Xinpai Property")
Wuhan Oppein Smart Home Co., Ltd. (hereinafter referred to as "Wuhan 25
Oppein")
2. Tax incentives
√ Applicable □ Not applicable
Note 1: The Company was recognized as a high-tech enterprise in November 2011 (YKG Zi [2012] No. 47). In
December 2020, the Company passed the review and audit of high-tech enterprises and obtained the Certificate of High-
tech Enterprise (No. GR202044001249). According to the relevant provisions of the Enterprise Income Tax Law of the
People's Republic of China and the Administrative Measures for the Determination of High and New Tech Enterprises
issued in 2007, starting from January 1, 2020, the enterprise income tax shall be calculated and paid at a reduced tax rate
of 15% for three years.
Note 2: Tianjin Oppein was recognized as a high-tech enterprise in November 2016. In November 2022, the
Company passed the review and audit of high-tech enterprises and obtained the Certificate of High-tech Enterprise (No.
GR202212000723). According to the relevant provisions of the Enterprise Income Tax Law of the People's Republic of
China and the Administrative Measures for the Determination of High and New Tech Enterprises issued in 2007, starting
from January 1, 2022, the enterprise income tax shall be calculated and paid at a reduced tax rate of 15% for three years.
Note 3: Guangzhou Integration was recognized as a high-tech enterprise in October 2014. In December 2020, the
Company passed the review and audit of high-tech enterprises and obtained the Certificate of High-tech Enterprise (No.
GR202044007253). According to the relevant provisions of the Enterprise Income Tax Law of the People's Republic of
China and the Administrative Measures for the Determination of High and New Tech Enterprises issued in 2007, starting
from January 1, 2020, the enterprise income tax shall be calculated and paid at a reduced tax rate of 15% for three years.
Note 4: According to the Taxation (Amendment) (No. 3) Ordinance 2018 (Amendment Ordinance) in Hong Kong,
the first profit of HKD 2 million from Hong Kong Oppein should be taxed at 8.25%, and subsequent profits should
continue to be taxed at 16.50%.
Note 5: Wuxi Oppein was recognized as a high-tech enterprise in November 2021 and obtained the Certificate of
High-tech Enterprise (No. GR202132010146). According to the relevant provisions of the Enterprise Income Tax Law
of the People's Republic of China and the Administrative Measures for the Determination of High and New Tech
Enterprises issued in 2007, starting from January 1, 2021, the enterprise income tax shall be calculated and paid at a
reduced tax rate of 15% for three years.
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2022 Annual Report
Note 6: Qingyuan Oppein was recognized as a high-tech enterprise in December 2019. In December 2022, the
Company passed the review and audit of high-tech enterprises and obtained the Certificate of High-tech Enterprise (No.
GR202244005073). According to the relevant provisions of the Enterprise Income Tax Law of the People's Republic of
China and the Administrative Measures for the Determination of High and New Tech Enterprises issued in 2007, starting
from January 1, 2022, the enterprise income tax shall be calculated and paid at a reduced tax rate of 15% for three years.
Note 7: Oppein Creative was recognized as a high-tech enterprise in December 2021 and obtained the Certificate of
High-tech Enterprise (No. GR202144004151). According to the relevant provisions of the Enterprise Income Tax Law
of the People's Republic of China and the Administrative Measures for the Determination of High and New Tech
Enterprises issued in 2007, starting from January 1, 2021, the enterprise income tax shall be calculated and paid at a
reduced tax rate of 15% for three years.
Note 8: ITALY ACADEMY and FORMER S.R.L. pay enterprise income tax (IRES) at a tax rate of 24.00% in
accordance with relevant Italian tax laws.
Note 9: Chengdu Oppein was recognized as a high-tech enterprise in October 2021 and obtained the Certificate of
High-tech Enterprise (No. GR202151000449). According to the relevant provisions of the Enterprise Income Tax Law
of the People's Republic of China and the Administrative Measures for the Determination of High and New Tech
Enterprises issued in 2007, starting from January 1, 2021, the enterprise income tax shall be calculated and paid at a
reduced tax rate of 15% for three years.
Note 10: According to the Notice of the Public Finance Department and the State Taxation Bureau on Forwarding
the Notice of the Ministry of Finance and the State Administration of Taxation on the Preferential Enterprise Income Tax
Policies and the Catalogue of the Enterprise Income Tax Preferences for Guangdong Hengqin New Area, Fujian Pingtan
Comprehensive Experimental Zone, and Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone (CS
[2014] No. 26) (hereinafter referred to as the "Preferential Catalogue") issued by the Public Finance Department and the
State Taxation Bureau, the encouraged industrial enterprises located in Hengqin New Area, Pingtan Comprehensive
Experimental Zone, and Qianhai Shenzhen Hong Kong Modern Service Industry Cooperation Zone will be subject to
corporate income tax at a reduced rate of 15%, and Zhuhai Oppein will calculate and pay corporate income tax at a 15%
tax rate accordingly.
Note 11: According to the Announcement of the Ministry of Finance and the State Taxation Administration on
Implementing the Preferential Income Tax Policies for Micro and Small Enterprises and Individual Industrial and
Commercial Households (Announcement No. 8 of the State Administration of Taxation in 2021) and the Announcement
of the Ministry of Finance and the State Taxation Administration on Further Implementing the Preferential Income Tax
Policies for Micro and Small Enterprises (Announcement No. 13 of the State Administration of Taxation in 2022), Wuhan
Countertop Factory and Kunming Countertop Factory are small and low-profit enterprises that meet the conditions. The
annual taxable income does not exceed CNY 1 million, and is included in the taxable income at a reduced rate of 12.5%.
The enterprise income tax is paid at a 20% tax rate. Wuhan Countertop Factory and Kunming Countertop Factory are
small and low-profit enterprises that meet the conditions. For the portion of taxable income that does not exceed CNY 1
million per year, a reduction of 12.5% will be included in the taxable income and corporate income tax will be paid at a
20% tax rate; and the portion of annual taxable income exceeding CNY 1 million but not exceeding CNY 3 million shall
be included in the taxable income at a reduced rate of 25%, and enterprise income tax shall be paid at a tax rate of 20%.
3. Other
□ Applicable √ Not applicable
VII. Notes to Consolidated Financial Statements
1. Monetary fund
√ Applicable □ Not applicable
Unit: CNY
Item Ending balance Beginning balance
Cash in hand 12,648.66 7,433.29
Bank deposit 7,961,430,489.83 6,377,833,798.29
Other monetary fund 308,358,838.76 184,096,186.78
Total 8,269,801,977.25 6,561,937,418.36
Of which: Total amount of
17,055,935.38 4,496,288.33
funds deposited abroad
Others
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2022 Annual Report
1. The ending balance of bank deposits includes time deposits that can be withdrawn at any time.
2. The ending balance of bank deposits increased by CNY 1,583,596,691.54 or 24.83% compared to the beginning
balance, mainly due to the public issuance of convertible corporation bonds, the accumulation of operating results and
the increase of short-term loans.
3. Bank deposits are deposited in the name of the Company and its subsidiaries within the scope of the consolidated
financial statements at financial institutions such as banks.
4. The ending balance of other monetary funds includes loan deposit of CNY 284,100,000.00, bank acceptance
deposit of CNY 3,256,052.63, securities account fund of CNY 4,991,193.63, guarantee deposit of CNY 1,456,807.71,
and e-commerce platform balance of CNY 12,539,901.88. The Company carries out the "Pudong Development Bank
Quick Loan" business, where the Company recommends merchant loans to the bank and assumes a prudent
recommendation obligation of CNY 2,014,882.91 for the recommended merchant's repayment ability.
5. The Company's subsidiary Tianjin Oppein Integration Home Co., Ltd. was involved in a contract dispute case for
the plaintiff filed an application for property preservation, and the court ruled to freeze the Company's CNY 13,805,779.47.
As of December 31, 2022, this payment is still in a frozen state.
6. Due to a contract dispute, the plaintiff filed an application for property preservation, and the court ruled to freeze
the company for CNY 4,062,160.00. As of December 31, 2022, this payment is still in a frozen state.
7. The Company's subsidiary Guangzhou Oppein Creative Home Design Co., Ltd. was involved in a contract dispute
case for the plaintiff filed an application for property preservation, and the court ruled to freeze the subsidiary Guangzhou
Oppein Creative Home Design Co., Ltd. for CNY 2,800,000.00. As of December 31, 2022, this payment is still in a frozen
state.
8. The total amount of CNY 1,071,000.00 in the e-commerce platform of the company and its subsidiaries,
Guangzhou Oppolia Smart Home Co., Ltd., Guangzhou Oppein Creative Home Design Co., Ltd., Guangzhou Ouboni
Integration Home Co., Ltd., and Guangzhou Oppein Sanitary Ware Co., Ltd. is the platform transaction deposit, which is
limited in use.
2. Trading financial assets
√ Applicable □ Not applicable
Unit: CNY
Item Ending balance Beginning balance
Financial assets at fair value through profit or
803,050,958.90 1,677,354,882.08
loss
Of which:
Financial products 803,050,958.90 1,677,354,882.08
Total 803,050,958.90 1,677,354,882.08
Other descriptions
□ Applicable √ Not applicable
3. Derivative financial assets
□ Applicable √ Not applicable
4. Notes receivable
(1) Notes receivables listed by category
√ Applicable □ Not applicable Unit: CNY
Item Ending balance Beginning balance
Banker's acceptance 15,064,465.16 34,973,540.89
Trade acceptance 95,369,740.77 171,100,130.87
Total 110,434,205.93 206,073,671.76
(2) Notes receivable pledged by the company at the end of the period
√ Applicable □ Not applicable
Unit: CNY
Item Pledged amount at the end of the period
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2022 Annual Report
Banker's acceptance 2,549,874.14
Trade acceptance 36,564,807.80
Total 39,114,681.94
(3) Notes receivable which have been endorsed or discounted by the Company at the end of the period but not yet
due on the balance sheet date
√ Applicable □ Not applicable
Unit: CNY
Amount derecognized at the end of Amount not derecognized at the end
Item
the period of the period
Banker's acceptance 9,500,000.00 2,549,874.14
Trade acceptance 0.00 37,368,780.23
Total 9,500,000.00 39,918,654.37
(4) Notes transferred to accounts receivable by the Company due to the issuer's failure to perform at the end of the period
√ Applicable □ Not applicable
Unit: CNY
Item Closing amount transferred to accounts receivable
Trade acceptance 134,976,515.03
Total 134,976,515.03
(5) Classified disclosure by bad debt provision method
√ Applicable □ Not applicable
Unit: CNY
Ending balance Beginning balance
Book balance Bad debt provision Book balance Bad debt provision Book value
Perc Perc
enta enta
Categor Prop ge Prop ge
y Amou ortio of Book value ortio of
Amount Amount Amount
nt n prov n prov
(%) isio (%) isio
n n
(%) (%)
Withdr
awing
bad
debt 22,570
18.0 6,771,106.3 30.0 15,799,248.2 33,782,604.4 13.8 23,647,823. 70.0 10,134,781.3
reserve ,354.5
5 7 0 1 2 4 09 0 3
s by 8
individ
ual item
Of which:
Bad
debt
reserve 102,48
81.9 7,847,411.4 94,634,957.7 210,269,400. 86.1 14,330,510. 195,938,890.
withdra 2,369. 7.66 6.82
5 5 2 88 6 45 43
wn by 17
portfoli
o
Of which:
Bank
15,064
accepta 12.0 15,064,465.1 34,973,540.8 14.3 34,973,540.8
,465.1
nce 5 6 9 3 9
6
draft
Comme
87,417
rcial 69.9 7,847,411.4 79,570,492.5 175,295,859. 71.8 14,330,510. 160,965,349.
,904.0 8.98 8.18
accepta 0 5 6 99 3 45 54
1
nce
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2022 Annual Report
draft
125,05
14,618,517. 110,434,205. 244,052,005. 37,978,333. 206,073,671.
Total 2,723. / / / /
82 93 30 54 76
75
Withdrawing bad debt reserves by individual item:
√ Applicable □ Not applicable
Unit: CNY
Ending balance
Name Percentage of
Book balance Bad debt provision Reason for provision
provision (%)
Some bill acceptors
Received commercial are unable to repay
acceptance bills from 22,570,354.58 6,771,106.37 30.00 their due debts or
engineering clients have a downgrade in
their credit rating
Total 22,570,354.58 6,771,106.37 30.00 /
Explanation of withdrawing bad debt reserves by individual item:
□ Applicable √ Not applicable
Provision for bad debts by combination:
√ Applicable □ Not applicable
Combined provision item: commercial acceptance bill
Unit: CNY
Ending balance
Name Percentage of provision
Notes receivable Bad debt provision
(%)
Commercial acceptance
87,417,904.01 7,847,411.45 8.98
draft
Total 87,417,904.01 7,847,411.45 8.98
Recognition criteria and instructions for withdrawing bad debts by combination
□ Applicable √ Not applicable
If the provision for bad debts is made based on the expected credit loss general model, refer to the disclosure of other
accounts receivable:
□ Applicable √ Not applicable
(6) Information of bad debt reserves
√ Applicable □ Not applicable
Unit: CNY
Current period change amount
Category Beginning balance Write-off or Ending balance
Provision Return or reversal
cancellation
Commercial
37,978,333.54 23,359,815.72 14,618,517.82
acceptance draft
Total 37,978,333.54 23,359,815.72 14,618,517.82
The amount of bad debt reserves recovered or reversed in the current period is significant:
□ Applicable √ Not applicable
(7) Actual verification of notes receivable in the current period
□ Applicable √ Not applicable
Others
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2022 Annual Report
□ Applicable √ Not applicable
5. Accounts receivable
(1) Disclosure by aging
√ Applicable □ Not applicable
Unit: CNY
Aging Closing book balance
within 1 year
Where: sub items within 1 year
within 1 year 1,115,026,340.54
Subtotal within 1 year 1,115,026,340.54
1-2 years 358,934,902.76
2-3 years 83,519,413.38
More than 3 years
3-4 years 36,953,939.54
4-5 years 8,416,004.78
Over 5 years 9,212,352.30
Total 1,612,062,953.30
(2) Classified disclosure by bad debt provision method
√ Applicable □ Not applicable
Unit: CNY
Ending balance Beginning balance
Book
Book balance Bad debt provision Book balance Bad debt provision
value
Categor Perce Perce
y ntage ntage
Propor Book value Propor
of of
Amount tion Amount Amount tion Amount
provi provi
(%) (%)
sion sion
(%) (%)
Single
item
28,199,712. 43,944,407. 30,761,08 13,183,
provisio 97,449,570.08 6.05 69,249,857.96 71.06 3.83 70.00
12 15 5.00 322.15
n for bad
debts
Of which:
Bad debt
reserve
1,514,613,383. 1,328,605,1 1,103,564,9 105,055,0 998,509
withdra 93.95 186,008,244.79 12.28 96.17 9.52
22 38.43 46.13 80.61 ,865.52
wn by
portfolio
Of which:
1,011,6
1,612,062,953. 1,356,804,8 1,147,509,3 135,816,1
Total 100.00 255,258,102.75 15.83 100.00 11.84 93,187.
30 50.55 53.28 65.61
67
Withdrawing bad debt reserves by individual item:
√ Applicable □ Not applicable
Unit: CNY
Ending balance
Name Percentage of
Book balance Bad debt provision Reason for provision
provision (%)
Some engineering
clients are unable to
Engineering clients 97,449,570.08 69,249,857.96 71.06 repay their due debts
or have a downgrade
in their credit rating
Total 97,449,570.08 69,249,857.96 71.06 /
Explanation of withdrawing bad debt reserves by individual item:
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2022 Annual Report
□ Applicable √ Not applicable
Provision for bad debts by combination:
√ Applicable □ Not applicable
Portfolio provision item: expected credit loss
Unit: CNY
Ending balance
Name Percentage of provision
Accounts receivable Bad debt provision
(%)
Engineering clients 1,250,065,123.08 144,280,363.72 11.54
Franchised dealers 171,999,455.19 21,568,270.28 12.54
Other clients 92,548,804.95 20,159,610.79 21.78
Total 1,514,613,383.22 186,008,244.79 12.29
Recognition criteria and instructions for withdrawing bad debts by combination:
□ Applicable √ Not applicable
If the provision for bad debts is made based on the expected credit loss general model, refer to the disclosure of other
accounts receivable:
□ Applicable √ Not applicable
(3) Situation of bad debt reserves
√ Applicable □ Not applicable
Unit: CNY
Current period change amount
Return
Category Beginning balance Write-off or Other Ending balance
Provision or
cancellation changes
reversal
Single item
provision for 30,761,085.00 38,488,772.96 69,249,857.96
bad debts
Bad debt
reserve
105,055,080.61 83,117,123.31 2,163,959.13 186,008,244.79
withdrawn
by portfolio
Total 135,816,165.61 121,605,896.27 2,163,959.13 255,258,102.75
The amount of bad debt reserves recovered or reversed in the current period is significant:
□ Applicable √ Not applicable
(4) Actual verification of accounts receivable in the current period
√ Applicable □ Not applicable
Unit: CNY
Item Write-off amount
Accounts receivable actually written off 2,163,959.13
Important accounts receivable verification status
□ Applicable √ Not applicable
Explanation of accounts receivable verification:
□ Applicable √ Not applicable
(5) Accounts receivable from top five borrowers classified based on the ending balance
√ Applicable □ Not applicable
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2022 Annual Report
Unit: CNY
Proportion in the total
Bad debt provision of
Company name Ending balance ending balance of accounts
ending balance
receivable (%)
Shanghai Aifeidi Building
33,956,605.00 2.11 4,910,032.29
Materials Trading Co., Ltd
Shenzhen Evergrande
Materials and Equipment 33,878,453.40 2.10 23,714,917.38
Co., Ltd.
Shenzhen Lingchao
Supply Chain Management 32,873,802.16 2.04 2,034,888.35
Co., Ltd.
Guangzhou Yuantong E-
commerce Technology 24,445,569.47 1.52 1,513,180.75
Co., Ltd.
Shenzhen Branch of China
Construction Science &
22,208,196.28 1.38 1,374,687.35
Technology Group Co.,
Ltd.
Total 147,362,626.31 9.15 33,547,706.12
(6) Accounts receivable derecognized due to transfer of financial assets
□ Applicable √ Not applicable
(7) The amount of assets and liabilities formed by transferring accounts receivable and continuing to be involved
□ Applicable √ Not applicable
Other descriptions
□ Applicable √ Not applicable
6. Receivables financing
□ Applicable √ Not applicable
7. Prepayments
(1) Advances to suppliers under the aging analysis method are as follow
√ Applicable □ Not applicable
Unit: CNY
Ending balance Beginning balance
Aging
Amount Proportion (%) Amount Proportion (%)
within 1 year 104,762,057.64 97.51 143,531,786.66 96.75
1-2 years 1,301,987.85 1.21 2,118,049.05 1.43
2-3 years 549,360.96 0.51 937,046.99 0.63
More than 3
822,971.91 0.77 1,759,109.70 1.19
years
Total 107,436,378.36 100.00 148,345,992.40 100.00
(2) Prepayments of the top five ending balances collected by prepayment object
√ Applicable □ Not applicable
Proportion to the total
Company name Ending balance ending balance of
prepayments (%)
Jiaxing Milan Image Furniture Co., Ltd. 5,683,525.47 5.29
Wuxi Power Supply Branch of State Grid Jiangsu
4,054,223.12 3.77
Electric Power Co., Ltd.
Chongqing Tianhe Yiren Film and Television
2,918,632.09 2.72
Culture Media Co., Ltd.
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Tianfu New Area Power Supply Company of State
2,738,794.57 2.55
Grid Sichuan Electric Power Company
Jinran China Resource Gas Co., Ltd. 2,625,359.36 2.44
Total 18,020,534.61 16.77
Others
□ Applicable √ Not applicable
8. List of other receivables
√ Applicable □ Not applicable
Unit: CNY
Item Ending balance Beginning balance
Interest receivable 0.00 0.00
Dividend receivable 0.00 0.00
Other receivables 197,101,668.61 95,586,738.83
Total 197,101,668.61 95,586,738.83
Other descriptions
□ Applicable √ Not applicable
Interest receivable
(1) Classification of interest receivable
□ Applicable √ Not applicable
(2) Significant overdue interest
□ Applicable √ Not applicable
(3) Provision for bad debts
□ Applicable √ Not applicable
Other descriptions
□ Applicable √ Not applicable
Dividend receivable
(1) Dividend receivable
□ Applicable √ Not applicable
(2) Important dividends receivable with an aging of over 1 year
□ Applicable √ Not applicable
(3) Provision for bad debts
□ Applicable √ Not applicable
Other descriptions
□ Applicable √ Not applicable
Other receivables
(1) Disclosure by aging
√ Applicable □ Not applicable
Unit: CNY
Aging Closing book balance
within 1 year
Where: sub items within 1 year
Within 1 year 178,299,635.44
Subtotal within 1 year 178,299,635.44
174/259
2022 Annual Report
1-2 years 11,499,228.40
2-3 years 9,110,309.20
More than 3 years
3-4 years 5,237,756.66
4-5 years 1,112,663.85
Over 5 years 3,569,329.66
Total 208,828,923.21
(2) Classification by nature of funds
√ Applicable □ Not applicable
Unit: CNY
Nature of payment Closing book balance Opening book balance
Deposit 168,106,198.55 68,787,540.41
Business reserve fund 5,284,935.96 4,782,114.52
Security Deposits 25,098,863.80 19,650,038.22
Other 10,338,924.90 12,543,422.77
Total 208,828,923.21 105,763,115.92
(3) Provision for bad debts
√ Applicable □ Not applicable
Unit: CNY
Phase I Phase Ⅱ Phase Ⅲ
ECL over the Expected credit loss
Expected credit
Bad debt provision entire duration (no within whole duration Total
loss (ECL) in the
credit impairment (credit impairment has
next 12 months
occurs) occurred)
Balance as of January 1,
9,726,968.76 0.00 449,408.33 10,176,377.09
2022
Balance as of January 1,
2022 in the current period
- Transfer to Phase Ⅱ
- Transfer to Phase Ⅲ
- Return to Phase Ⅱ
- Return to Phase I
Provision in current
2,107,700.65 96,000.00 2,203,700.65
period
Reversals in the current
647,823.14 5,000.00 652,823.14
period
Write-off in current
period
Canceled after
verification in the current
period
Other changes
Balance as of December
11,186,846.27 540,408.33 11,727,254.60
31, 2022
Explanation of significant changes in the book balance of other accounts receivable with changes in loss provisions in the
current period:
□ Applicable √ Not applicable
The basis for calculating the amount of bad debt reserves for the current period and evaluating whether the credit risk of
financial instruments has significantly increased:
□ Applicable √ Not applicable
(4) Information of bad debt reserves
√ Applicable □ Not applicable
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2022 Annual Report
Unit: CNY
Current period change amount
Beginning Write-off
Category Return or Other Ending balance
balance Provision or
reversal changes
cancellation
Bad debt
reserve
9,726,968.76 2,107,700.65 647,823.14 11,186,846.27
withdrawn by
portfolio
Single item
provision for 449,408.33 96,000.00 5,000.00 540,408.33
bad debts
Total 10,176,377.09 2,203,700.65 652,823.14 11,727,254.60
The significant amount of bad debt reserves reversed or recovered in the current period:
□ Applicable √ Not applicable
(5) Other accounts receivable actually written off in the current period
□ Applicable √ Not applicable
(6) Other accounts receivable with the top five ending balances collected by the debtor
√ Applicable □ Not applicable
Unit: CNY
Proportion
to the total
ending
Bad debt
Nature of balance of
Company name Ending balance Aging provision of
payment other
ending balance
accounts
receivable
(%)
Guangzhou Hejing
Deposit 145,000,000.00 within 1 year 69.43
Holding Group Co., Ltd.
Guangzhou Red Star
Security Within 3
Macalline Expo Home 5,667,862.40 2.71 1,133,572.48
Deposits years
Plaza Co., Ltd.
Beijing Easyhome Joint
Investment Management Other 2,957,085.20 within 1 year 1.42 591,417.04
Center (L.P.).
Xiaoshan Branch of
GREENTOWN REAL
Deposit 2,092,419.90 2-3 years 1.00 313,862.99
ESTATE GROUP CO,
LTD.
Nanchang New Huarui Security
1,756,708.80 3-4 years 0.84 351,341.76
Clothing Co., Ltd. Deposits
Total / 157,474,076.30 / 75.40 2,390,194.27
(7) Receivables involving government subsidies
□ Applicable √ Not applicable
(8) Other receivables derecognized due to transfer of financial assets
□ Applicable √ Not applicable
(9) The amount of assets and liabilities formed by transferring other receivables and continuing to be involved
□ Applicable √ Not applicable
Other descriptions
176/259
2022 Annual Report
□ Applicable √ Not applicable
9. Inventory
(1) Inventory classification
√ Applicable □ Not applicable
Unit: CNY
Ending balance Beginning balance
Inventory Inventory
falling falling
price price
provision / provision /
provision provision
Item
Book balance for Book value Book balance for Book value
impairmen impairmen
t of t of
contract contract
performan performan
ce cost ce cost
Raw 1,110,361,485.2 1,110,361,485.
849,290,050.96 849,290,050.96
materials 6 26
Products
134,747,487.38 134,747,487.38 128,460,954.78 128,460,954.78
in process
Inventory
/ / / /
goods
Finished
168,898,346.41 168,898,346.41 485,376,851.22 485,376,851.22
goods
1,414,007,319.0 1,414,007,319.
Total 1,463,127,856.96 1,463,127,856.96
5 05
(2) Inventory depreciation reserves and contract performance cost impairment reserves
□ Applicable √ Not applicable
(3) Explanation of the capitalized amount of borrowing costs included in the ending balance of inventory
□ Applicable √ Not applicable
(4) Explanation of the current amortization amount of contract performance cost
□ Applicable √ Not applicable
Others
□ Applicable √ Not applicable
10. Contract assets
(1) Contract asset situation
□ Applicable √ Not applicable
(2) Amount and reasons for significant changes in book value during the reporting period
□ Applicable √ Not applicable
(3) Provision for impairment of contract assets in this period
□ Applicable √ Not applicable
If the provision for bad debts is made based on the expected credit loss general model, refer to the disclosure of other
accounts receivable:
□ Applicable √ Not applicable
Other descriptions
□ Applicable √ Not applicable
11. Held-for-sale assets
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□ Applicable √ Not applicable
12. Non-current assets due within one year
√ Applicable □ Not applicable
Unit: CNY
Item Ending balance Beginning balance
Long-term fixed deposits and interest
922,210,739.68 0.00
provision
Total 922,210,739.68 0.00
Important debt investments and other debt investments at the end of the period:
□ Applicable √ Not applicable
13. Other current assets
√ Applicable □ Not applicable
Unit: CNY
Item Ending balance Beginning balance
Prepaid corporate income tax 1,742,358.04 80,151.80
Bank financial products 0.00 0.00
Input tax for value-added tax to be
135,348,001.07 43,757,286.00
deducted and certified
Short-term fixed deposits and interest
62,619,813.82 34,878,627.65
provision
Other prepaid taxes and fees 37,534.75 110,618.80
Total 199,747,707.68 78,826,684.25
14. Debt investment
(1) Debt investment situation
□ Applicable √ Not applicable
(2) Important debt investments at the end of the period:
□ Applicable √ Not applicable
(3) Provision for impairment
□ Applicable √ Not applicable
The basis for calculating the amount of provision for impairment or the current period and evaluating whether the credit
risk of financial instruments has significantly increased
□ Applicable √ Not applicable
Others
□ Applicable √ Not applicable
15. Other debt investments
(1) Information of other debt investments
□ Applicable √ Not applicable
(2) Other important debt investments at the end of the period:
□ Applicable √ Not applicable
(3) Provision for impairment
□ Applicable √ Not applicable
The basis for calculating the amount of provision for impairment or the current period and evaluating whether the credit
risk of financial instruments has significantly increased
□ Applicable √ Not applicable
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2022 Annual Report
Other descriptions
□ Applicable √ Not applicable
16. Long-term receivables
(1) Long-term receivables
□ Applicable √ Not applicable
(2) Provision for bad debts
□ Applicable √ Not applicable
The basis for calculating the amount of bad debt reserves for the current period and evaluating whether the credit risk of
financial instruments has significantly increased
□ Applicable √ Not applicable
(3) Long-term receivables derecognized due to transfer of financial assets
□ Applicable √ Not applicable
(4) The amount of assets and liabilities formed by transferring long-term receivables and continuing to be involved
□ Applicable √ Not applicable
Others
□ Applicable √ Not applicable
17. Long-term equity investments
√ Applicable □ Not applicable
Unit: CNY
Increase or decrease in current period
Investm
Closing
ent gains
The Other Cash balance
Beginni and Chan
investe Additi comprehe divide Impair of
Negative losses ges in Ending
d ng onal nsive nds or ment Oth
balance
impair
investme recogniz other
compan balance invest income profits provisi er ment
nt ed under intere
y ment adjustmen declar on provisi
the sts
ts ed to on
equity
pay
method
I. Joint ventures
Guangz
hou
Red
Star
-
Macalli 12,328,75 3,500,00
8,828,75
ne Expo 6.91 0.00
6.91
Home
Plaza
Co.,
Ltd.
-
Sub- 12,328,75 3,500,00
8,828,75
total 6.91 0.00
6.91
II. Associated enterprise
Beijing
Jiaju
Technol 3,214,610 7,303,69 10,518,30
ogy .20 8.24 8.44
Co.,
Ltd.
Sub- 3,214,610 7,303,69 10,518,30
total .20 8.24 8.44
-
15,543,36 3,500,00 10,518,30
Total 1,525,05
7.11 0.00 8.44
8.67
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2022 Annual Report
18. Other equity instrument investments
(1) Investment in other equity instrument
√ Applicable □ Not applicable
Unit: CNY
Item Ending balance Beginning balance
Keeson Technology Corporation Limited 23,806,462.00 48,177,180.00
Guangzhou Rural Commercial Bank 1,015,000.00 1,015,000.00
Tianhai Oukang Technology Information (Xiamen)
0.00 0.00
Co., Ltd.
Harbin Sayyas Windows Co., Ltd. 46,125,000.00 31,123,051.57
Zhongju Hejia (Beijing) Investment Fund
4,811,404.66 1,885,380.04
Management Co., Ltd.
Fernz (Guangzhou) Co., Ltd. 0.00 0.00
Guangzhou Lazy Cat Wood Balcony Decoration
0.00 0.00
Engineering Co., Ltd.
Guangzhou Qingtai Investment Development Co.,
782,280.12 843,417.88
Ltd.
Guangdong Deerma Technology Co., Ltd. 113,846,741.27 104,884,825.51
DeRucci Healthy Sleep Co., Ltd. 178,848,000.00 122,381,363.60
Total 369,234,888.05 310,310,218.60
(2) Investment in non-trading equity instruments
√ Applicable □ Not applicable
Unit: CNY
Reasons
Reasons for
for the
Amount designation as
Dividend transfer
transferred measured at
income of other
from other fair value with
recognized Accumulated Accumulated compreh
Item comprehens changes
in the profits losses ensive
ive income recognized in
current income
to retained other
period to
earnings comprehensive
retained
income
earnings
Keeson Based on the
Technology 1,813,858.6 management's Equity
745,200.00 11,379,177.38
Corporation 9 intention to disposal
Limited hold
TIANHAI
OUKANG Based on the
TECHNOLOGY management's
25,000,000.00 None
INFORMATION intention to
(XIAMEN) Co., hold
Ltd.
Based on the
Harbin Sayyas
management's
Windows Co., 23,607,562.50 None
intention to
Ltd.
hold
Zhongju Hejia
Based on the
(Beijing)
management's
Investment Fund 2,811,404.66 None
intention to
Management
hold
Co., Ltd.
Based on the
Guangzhou Rural
management's
Commercial None
106,575.00 intention to
Bank
hold
180/259
2022 Annual Report
Based on the
Fernz
management's Equity
(Guangzhou) 17,000,000.00 155,634.48
intention to disposal
Co., Ltd.
hold
Guangzhou Lazy
Cat Wood Based on the
Balcony management's
6,170,000.00 None
Decoration intention to
Engineering Co., hold
Ltd.
Guangzhou
Based on the
Qingtai
management's
Investment 217,719.88
intention to None
Development
hold
Co., Ltd.
Guangdong Based on the
Deerma management's
53,846,741.27 None
Technology Co., intention to
Ltd. hold
Based on the
DeRucci Healthy 5,400,000.0 management's
100,548,000.00 None
Sleep Co., Ltd. 0 intention to
hold
6,251,775.0 1,969,493.1
Total 192,192,885.81 48,387,719.88
0 7
Other descriptions
□ Applicable √ Not applicable
19. Other non-current financial assets
√ Applicable □ Not applicable
Unit: CNY
Item Ending balance Beginning balance
Beijing Easyhome Joint Investment
17,968,837.07 60,339,938.23
Management Center (L.P.).
Wuxi Craftsman Huiyu Management
1,000,000.00
Consulting Partnership (LP)
Total 18,968,837.07 60,339,938.23
Other descriptions
□ Applicable √ Not applicable
20. Investment properties
Measurement model of investment real estate
(1) Investment property adopting cost measurement model
Unit: CNY
Houses and Construction
Item Land use right Total
buildings in progress
I. Original book value
1. Beginning Balance 917,156,576.08 522,803,394.00 1,439,959,970.08
2. Increase in this period 19,829,632.78 19,829,632.78
(1) Outsourcing
(2) Transferred from
19,829,632.78 19,829,632.78
inventory, fixed assets, and
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2022 Annual Report
construction in progress
(3) Increase in business
merger
3. Current decrease
317,308.39 317,308.39
amount
(1) Disposal
(2) Other transfers out 317,308.39 317,308.39
4. Ending balance 916,839,267.69 542,633,026.78 1,459,472,294.47
II. Accumulated depreciation and accumulated amortization
1. Beginning Balance 105,794,953.22 105,794,953.22
2. Increase in this period 44,482,093.92 10,619,969.83 55,102,063.75
(1) Provision or
44,482,093.92 10,619,969.83 55,102,063.75
amortization
3. Current decrease
amount
(1) Disposal
(2) Other transfers out
4. Ending balance 44,482,093.92 116,414,923.05 160,897,016.97
III. Provision for impairment
1. Beginning Balance
2. Increase in this period
(1) Provision
3. Current decrease
amount
(1) Disposal
(2) Other transfers out
4. Ending balance
IV. Book value
1. Ending book value 872,357,173.77 426,218,103.73 1,298,575,277.50
2. Beginning book value 917,156,576.08 417,008,440.78 1,334,165,016.86
(2) Investment real estate without completed property ownership certificate
□ Applicable √ Not applicable
Others
□ Applicable √ Not applicable
21. List of fixed asset items
√ Applicable □ Not applicable
Unit: CNY
Item Ending balance Beginning balance
Fixed assets 6,688,959,701.47 6,648,220,021.88
Liquidation of fixed assets 0.00
Total 6,688,959,701.47 6,648,220,021.88
Other descriptions
□ Applicable √ Not applicable
Fixed assets
(1) Fixed assets
√ Applicable □ Not applicable
Unit: CNY
Item Property and Machinery and Transportatio Other equipment Total
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2022 Annual Report
building equipment n vehicles
I. Original book value:
1. Beginning
4,663,561,018.23 3,759,095,701.70 45,407,670.93 331,806,497.45 8,799,870,888.31
Balance
2. Increase in this
190,613,651.93 470,726,598.68 1,787,134.74 38,796,299.69 701,923,685.04
period
(1) Purchase 3,099,916.74 48,266,223.83 1,787,134.74 37,045,679.78 90,198,955.09
(2) Transferred
from
161,657,702.55 419,704,916.95 1,433,109.08 582,795,728.58
construction in
progress
(3) Increase in
25,856,032.64 2,755,457.90 317,510.83 28,929,001.37
business merger
3. Current
939,564.29 21,653,528.88 1,878,351.03 6,083,806.91 30,555,251.11
decrease amount
(1) Disposal or
939,564.29 21,653,528.88 1,878,351.03 6,083,806.91 30,555,251.11
retirement
4. Ending
4,853,235,105.87 4,208,168,771.50 45,316,454.64 364,518,990.23 9,471,239,322.24
balance
II. Accumulated depreciation
1. Beginning
761,727,065.92 1,159,968,567.95 29,196,574.35 200,758,658.21 2,151,650,866.43
Balance
2. Increase in this
229,393,507.17 367,739,696.85 4,425,027.01 46,980,000.85 648,538,231.88
period
(1) Provision 229,393,507.17 367,739,696.85 4,425,027.01 46,980,000.85 648,538,231.88
3. Current
490,446.78 10,807,814.74 1,680,630.65 4,930,585.37 17,909,477.54
decrease amount
(1) Disposal or
490,446.78 10,807,814.74 1,680,630.65 4,930,585.37 17,909,477.54
retirement
4. Ending
990,630,126.31 1,516,900,450.06 31,940,970.71 242,808,073.69 2,782,279,620.77
balance
III. Provision for impairment
1. Beginning
Balance
2. Increase in this
period
(1) Provision
3. Current
decrease amount
(1) Disposal or
retirement
4. Ending
balance
IV. Book value
1. Ending book
3,862,604,979.56 2,691,268,321.44 13,375,483.93 121,710,916.54 6,688,959,701.47
value
2. Beginning
3,901,833,952.31 2,599,127,133.75 16,211,096.58 131,047,839.24 6,648,220,021.88
book value
(2)Temporarily idle fixed assets
□ Applicable √ Not applicable
(3) Fixed assets leased through financial leasing
□ Applicable √ Not applicable
(4) Fixed assets leased out through operating leases
□ Applicable √ Not applicable
(5) Fixed assets with incomplete property rights certificates
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2022 Annual Report
√ Applicable □ Not applicable
Unit: CNY
Reasons for not completing the
Item Book value
property rights certificate
The property certificate is currently
Property and building 1,671,016,594.40
being handled
Other descriptions
√ Applicable □ Not applicable
1. The mortgage situation is detailed in the relevant explanations of "Section X Financial Report VII, Notes to major
items in the consolidated financial statements 32, Short-term Loans" and "Section X Financial Report VII, Notes to major
items in the consolidated financial statements 45, Long-term Loans".
2. As of December 31, 2022, the Company does not have any temporarily idle or held fixed assets for sale.
3. The original value of fixed assets transferred from construction in progress in 2022 was CNY 582,795,728.58.
4. The depreciation amount included in operating (inventory) costs, sales expenses, management expenses, and
research and development expenses in 2022 is CNY 648,538,231.88.
5. The Company conducted an itemized inspection of fixed assets at the end of the period and did not find any
situations where impairment provisions need to be made due to damage, lack of production capacity and transfer value,
long-term idleness, or outdated technology being eliminated.
Liquidation of fixed assets
□ Applicable √ Not applicable
22. Construction in process
List of items
√ Applicable □ Not applicable
Unit: CNY
Item Ending balance Beginning balance
Construction in progress 1,430,244,831.22 347,455,504.19
Total 1,430,244,831.22 347,455,504.19
Other descriptions
□ Applicable √ Not applicable
Construction in progress
(1) Information of construction in progress
√ Applicable □ Not applicable
Unit: CNY
Ending balance Beginning balance
Item Impairmen Impairmen
Book balance Book value Book balance Book value
t provision t provision
Constructio
1,430,244,831.2 1,430,244,831.2 347,455,504.1 347,455,504.1
n in
2 2 9 9
progress
1,430,244,831.2 1,430,244,831.2 347,455,504.1 347,455,504.1
Total
2 2 9 9
(2) Current changes in important ongoing construction projects
√ Applicable □ Not applicable
Unit: CNY
Bu Amount Other Prop Engi Accumula Where: C S
Beginnin Increase in Ending
Item Name dg transferr decreases in ortio neeri ted current ur o
g balance this period balance
et ed to the current n of ng amount of interest re u
184/259
2022 Annual Report
am fixed period accu prog interest capitalizat nt r
ou assets in mula ress capitalizat ion in c
nt the ted ion amount te e
current proj re o
period ect st f
inve ca f
stme pi u
nt to ta n
budg li d
et za s
(%) ti
o
n
ra
te
(
%
)
S
el
f-
fi
Tianjin
25,667,9 200,757,68 94,667, 22,441,918. 109,316,077. n
Engineerin
39.74 2.45 626.80 01 38 a
g Project
n
ci
n
g
S
el
f-
Jianggao fi
and other 18,651,0 71,292,788 47,118, 42,824,936.0 n
engineerin 87.13 .85 939.98 0 a
g projects n
ci
n
g
Oppein
80
Smart
0
Manufactu 45,616,6 181,042,15 226,658,801. 28.3 30.0
mi
ring 49.06 2.82 88 3 0
lli
Innovation
on
Project
Self-
raise
Wuxi
22,402,851. 150,971,987.9 117,620,15 d/rai
Engineering
54 1 6.04 55,754,683.41 sed
Project
fund
s
Self-
raise
Qingyuan
150,369,619 196,614,814.4 252,422,20 d/rai
Engineering
.06 6 9.68 94,562,223.84 sed
Project
fund
s
Self-
raise
Chengdu 2,113
20,580,958. 208,167,872.0 70,966,796 25,461,136.7 d/rai
Engineering millio 5,186,667.99 152,595,366.90 81.39 80.00
97 1 .08 2 sed
Project n
fund
s
Self-
Huangbian 930
55,351,010. fina
Engineering millio 54,233,510.62 109,584,521.60 11.78 15.00
98 ncin
Project n
g
Self-
raise
Wuhan 2,500
8,815,387.7 630,132,832.4 23,809,027.0 23,809,027.0 d/rai
Engineering millio 638,948,220.21 25.56 25.00
2 9 4 4 sed
Project n
fund
s
6.343
347,455,504 1,693,213,641 582,795,72 1,430,244,831.2 49,270,163.7 23,809,027.0
Total billio 27,628,586.00 / / / /
.19 .61 8.58 2 6 4
n
185/259
2022 Annual Report
(3) Current provision for impairment of construction in progress
□ Applicable √ Not applicable
Others
□ Applicable √ Not applicable
Engineering materials
(1) Engineering material situation
□ Applicable √ Not applicable
23. Productive biological assets
(1) Productive biological assets using cost measurement models
□ Applicable √ Not applicable
(2) Productive biological assets using fair value measurement model
□ Applicable √ Not applicable
Others
□ Applicable √ Not applicable
24. Oil and gas assets
□ Applicable √ Not applicable
25. Right of use assets
√ Applicable □ Not applicable
Unit: CNY
Item Property and building Total
I. Original book value
1. Beginning Balance 39,357,930.49 39,357,930.49
2. Increase in this period 166,270,067.44 166,270,067.44
(1) New lease 166,270,067.44 166,270,067.44
3. Current decrease amount 9,578,038.78 9,578,038.78
(1) Reduce lease 9,578,038.78 9,578,038.78
4. Ending balance 196,049,959.15 196,049,959.15
II. Accumulated depreciation
1. Beginning Balance 14,381,858.44 14,381,858.44
2. Increase in this period 47,986,840.11 47,986,840.11
(1) Provision 47,986,840.11 47,986,840.11
3. Current decrease amount 9,578,038.78 9,578,038.78
(1) Disposal
(2) Reduce lease 9,578,038.78 9,578,038.78
4. Ending balance 52,790,659.77 52,790,659.77
III. Provision for impairment
1. Beginning Balance
2. Increase in this period
(1) Provision
3. Current decrease amount
(1) Disposal
4. Ending balance
IV. Book value
1. Ending book value 143,259,299.38 143,259,299.38
2. Beginning book value 24,976,072.05 24,976,072.05
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26. Intangible assets
(1) Information of intangible assets
√ Applicable □ Not applicable
Unit: CNY
Patent Non-Patent
Item Land use right Software Total
rights Technology]
I. Original book value
1. Beginning
1,138,425,747.00 105,194,441.62 1,243,620,188.62
Balance
2. Increase in this
33,335,524.21 8,983,134.67 42,318,658.88
period
(1) Purchase assets 19,841,687.63 8,983,134.67 28,824,822.30
(2) Internal R&D
assets
(3) Increase in
13,493,836.58 13,493,836.58
business merger
3. Current decrease
6,572,458.51 2,166,829.38 8,739,287.89
amount
(1) Disposal 2,166,829.38 2,166,829.38
(2) Other decreases 6,572,458.51 6,572,458.51
4. Ending balance 1,165,188,812.70 112,010,746.91 1,277,199,559.61
II. Accumulated amortisation
1. Beginning
98,621,691.40 80,606,054.93 179,227,746.33
Balance
2. Increase in this
23,177,636.32 16,077,696.72 39,255,333.04
period
(1) Provision 23,177,636.32 16,077,696.72 39,255,333.04
3. Current decrease
777,740.92 1,127,552.32 1,905,293.24
amount
(1) Disposal 1,127,552.32 1,127,552.32
(2) Other decreases 777,740.92 777,740.92
4. Ending balance 121,021,586.80 95,556,199.33 216,577,786.13
III. Provision for impairment
1. Beginning
Balance
2. Increase in this
period
(1) Provision
3. Current decrease
amount
(1) Disposal
4. Ending balance
IV. Book value
1. Ending book
1,044,167,225.90 16,454,547.58 1,060,621,773.48
value
2. Beginning book 1,039,804,055.60 24,588,386.69 1,064,392,442.29
value
The proportion of intangible assets formed through internal research and development of the company to the balance of
intangible assets at the end of this period is 0.00%
(2) Information of land use rights without completed property rights certificates
□ Applicable √ Not applicable
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2022 Annual Report
Other descriptions:
√ Applicable □ Not applicable
1. The details of intangible assets pledged at the end of the period are as follows:
Category Original value of collateral Net value of collateral
Land use right 50,524,976.60 39,497,528.36
The mortgage is detailed in the relevant explanations of "Section X Financial Report VII, Notes to major items in
the consolidated financial statements 32, Short-term Loans" and "Section X Financial Report VII, Notes to major items
in the consolidated financial statements 45, Long-term Loans".
2. The amortization amount of intangible assets of the company in 2022 is CNY 39,255,333.04.
3. As of December 31, 2022, the Company has no intangible assets formed through internal research and
development.
4. As of December 31, 2022, the Company has no land use rights that have not yet obtained property rights
certificates.
5. At the end of the period, the Company conducted an itemized inspection of intangible assets and did not find any
circumstances requiring provision for impairment.
27. Development expenditure
□ Applicable √ Not applicable
28. Goodwill
(1) Original book value of goodwill
□ Applicable √ Not applicable
(2) Provision for impairment of goodwill
□ Applicable √ Not applicable
(3) Information related to the asset group or combination of asset groups where goodwill is located
□ Applicable √ Not applicable
(4) Describe the goodwill impairment test process, key parameters (such as the growth rate in the forecast period,
the growth rate in the stable period, the profit rate, the Discount rate, the forecast period, if applicable) and the
recognition method of goodwill impairment loss
□ Applicable √ Not applicable
(5) Impact of goodwill impairment testing
□ Applicable √ Not applicable
Others
□ Applicable √ Not applicable
29. Long-term amortizing expenses
√ Applicable □ Not applicable
Unit: CNY
Amortization Other
Beginning Increase in this
Item amount for the reduced Ending balance
balance period
current period amounts
Decoration
63,456,311.19 71,445,144.07 49,641,471.68 0.00 85,259,983.58
fee
Advertisement
15,138,669.97 0.00 11,779,954.44 0.00 3,358,715.53
fee
Other 1,120,045.93 13,316,353.84 2,491,695.60 0.00 11,944,704.17
Total 79,715,027.09 84,761,497.91 63,913,121.72 0.00 100,563,403.28
30. Deferred income tax assets/deferred income tax liabilities
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2022 Annual Report
(1) Deferred income tax assets not offset
√ Applicable □ Not applicable
Unit: CNY
Ending balance Beginning balance
Deductible Deductible
Item Deferred income Deferred income
temporary temporary
tax assets tax assets
difference difference
Provision for impairment
281,568,752.78 43,736,719.79 183,919,942.56 28,051,877.29
of assets
Unrealized profits from
0.00 0.00 0.00 0.00
internal transactions
Deductible losses 77,811,726.38 19,150,200.81 72,796,846.40 13,206,977.38
Deferred income 469,701,073.18 79,127,887.86 471,292,317.05 79,427,200.69
Other 19,630,895.84 3,224,809.11 2,461,558.50 442,649.09
Total 848,712,448.18 145,239,617.57 730,470,664.51 121,128,704.45
(2) Non-offsetting deferred income tax liabilities
√ Applicable □ Not applicable
Unit: CNY
Ending balance Beginning balance
Item Taxable temporary Deferred income Taxable temporary Deferred income
difference tax liabilities difference tax liabilities
Valuation and appreciation
of assets in the business
0.00 0.00 0.00 0.00
merger not under the same
control
Changes in fair value of
other creditor's right 0.00 0.00 0.00 0.00
investment
Changes in fair value of
other equity instrument 143,805,165.93 35,951,291.49 79,422,401.06 19,855,600.26
investments
Tax accelerated
333,332,694.69 50,595,395.14 288,270,559.44 43,937,337.70
amortization
Internal transaction
97,809,755.28 13,053,177.09 39,350,394.99 5,902,559.25
capitalization amount
Changes in fair value of
3,050,958.90 457,643.84 15,920,145.40 2,388,021.82
trading financial assets
Changes in fair value of
other non-current financial 3,174,703.82 793,675.96 39,989,938.23 9,997,484.56
assets
Withdrawal of fixed
deposit and wealth 223,739,194.61 33,560,879.18 96,896,422.16 14,534,463.32
management interest
Total 804,912,473.23 134,412,062.70 559,849,861.28 96,615,466.91
(3) Deferred income tax assets or liabilities listed at net amount after offset
□ Applicable √ Not applicable
(4) Details of unconfirmed deferred income tax assets
√ Applicable □ Not applicable
Unit: CNY
Item Ending balance Beginning balance
Deductible temporary difference 0.00 0.00
Deductible losses 7,666,055.40 4,883,636.12
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2022 Annual Report
Provision for impairment of assets 37,368.59 50,933.68
Total 7,703,423.99 4,934,569.80
(5) The deductible losses of unrecognized deferred income tax assets will expire in the following years
□ Applicable √ Not applicable
Other descriptions:
√ Applicable □ Not applicable
The unrecognized deferred income tax assets of the company are all formed by subsidiaries Oppein (Hong Kong)
and ITALY ACADEMY. According to relevant regulations, the operating losses of subsidiaries Oppein (Hong Kong)
and ITALY ACADEMY can be offset indefinitely.
31. Other non-current assets
√ Applicable □ Not applicable
Unit: CNY
Ending balance Beginning balance
Item Impairmen Impairmen
Book balance Book value Book balance Book value
t provision t provision
Advance
payment
for
175,316,804.03 175,316,804.03 212,922,825.66 212,922,825.66
equipment
engineerin
g
Fixed
deposit and
interest
3,788,908,641.1 3,788,908,641.1 1,912,017,794.5 1,912,017,794.5
provision
1 1 1 1
for more
than one
year
Prepaid
land 18,600,000.00 18,600,000.00
payment
3,964,225,445.1 3,964,225,445.1 2,143,540,620.1 2,143,540,620.1
Total
4 4 7 7
32. Short-term loan
(1) Classification of short-term loan
√ Applicable □ Not applicable
Unit: CNY
Item Ending balance Beginning balance
Pledge borrowings 3,785,114,681.94 1,443,427,291.26
Mortgage Loan 0.00 37,210,338.01
Guaranteed Loan 100,087,083.33 150,127,500.00
Credit borrowings 699,493,238.31 758,361,041.66
Total 4,584,695,003.58 2,389,126,170.93
Explanation of short-term loan classification:
1. As of December 31, 2022, the balance of the Company's pledged loans was CNY 3,785,114,681.94, of which
CNY 22,658,614.59 was a loan formed by discounting the commercial acceptance bill received by the company from
Guangzhou Branch of Shanghai Pudong Development Bank co. Ltd., and the Company provided CNY 22,658,614.59 of
commercial acceptance bill as collateral guarantee; CNY 13,906,193.21 was a loan formed by discounting the commercial
acceptance bill received by the company from Guangzhou Airport Road Branch of China Merchants Bank Co., Ltd. and
the Company provided CNY 13,906,193.21 of commercial acceptance bill as collateral; CNY 2,549,874.14 was a loan
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2022 Annual Report
formed by discounting the received bank acceptance bill from the Foshan Branch of Guangzhou Bank Co., Ltd. and the
Company provided CNY 2,549,874.14 of bank acceptance bill as collateral; CNY 25,000,000.00 was a loan formed by
the subsidiary Chengdu Oppein Smart Home Co., Ltd. discounting a bank acceptance bill issued by the Company to China
Construction Bank Co., Ltd. Guangzhou Jianggao Branch; CNY 300,000,000.00 was a loan formed by the subsidiary
Chengdu Oppein Smart Home Co., Ltd. discounting a domestic letter of credit issued by the company to Guangzhou
Branch of Shanghai Pudong Development Bank Co., Ltd., and the company provided a deposit of CNY 30,000,000.00 as
collateral guarantee; CNY 400,000,000.00 was a loan formed by the subsidiary Guangzhou Oppein Integration Home
Co., Ltd. discounting a bank acceptance bill issued by the company to the Kong Gang Economic Zone Branch of
Guangzhou Rural Commercial Bank, and the Company provided a deposit of CNY 40,000,000.00 as collateral guarantee;
CNY 500,000.00 was a loan formed by the subsidiary Guangzhou Oppein Integration Home Co., Ltd. discounting the
domestic letter of credit issued by the Company to Guangzhou Branch of Shanghai Pudong Development Bank Co., Ltd.,
and the company provided a deposit of CNY 50,000.00 as collateral; CNY 390,000,000.00 was a loan formed by the
subsidiary Wuxi (Jiangsu) Oppein Integration Home Co., Ltd. discounting a domestic letter of credit issued by the
Company to Guangzhou Branch of Shanghai Pudong Development Bank Co., Ltd., and the Company provided a deposit
of CNY 39,000,000.00 as collateral guarantee; CNY 200,000,000.00 was a loan formed by the subsidiary Wuxi (Jiangsu)
Oppein Integration Home Co., Ltd. discounting the domestic letter of credit issued by the subsidiary Guangzhou Oppein
Integration Home Co., Ltd. to Guangzhou Airport Road Branch of China Merchants Bank Co., Ltd.; CNY 32,000,000.00
was a loan formed by the subsidiary Oppein United (Tianjin) Home Sales Co., Ltd. discounting a bank acceptance bill
issued by the Company to Guangzhou Branch of China Minsheng Bank Co., Ltd.; CNY 200,000,000.00 was a loan formed
by the subsidiary Qingyuan Oppein Integration Home Co., Ltd. discounting a bank acceptance bill issued by the Company
to Guangzhou Baiyun Branch Bank of China Limited, and the Company provided a deposit of CNY 10,000,000.00 as
collateral guarantee; CNY 480,000,000.00 was a loan formed by the subsidiary Qingyuan Oppein Integration Home Co.,
Ltd. discounting a bank acceptance bill issued by the Company to Guangzhou Branch of Ping An Bank Co., Ltd., and the
Company provided a deposit of CNY 48,000,000.00 as collateral; CNY 150,000,000.00 was a loan formed by the
subsidiary Qingyuan Oppein Integration Home Co., Ltd. discounting a bank acceptance bill issued by the Company to
Guangzhou Jianggao Branch of Agricultural Bank of China Limited, and the Company provided a deposit of CNY
15,000,000.00 as collateral guarantee; CNY 500,000.00 was a loan formed by the subsidiary Qingyuan Oppein Integration
Home Co., Ltd. discounting a domestic letter of credit issued by the Company to Guangzhou Branch of Shanghai Pudong
Development Bank Co., Ltd., and the Company provided a deposit of CNY 50,000.00 as collateral guarantee; CNY
320,000,000.00 was a loan formed by the subsidiary Qingyuan Oppein Integration Home Co., Ltd. discounting the bank
acceptance bill issued by the subsidiary Guangzhou Oppein Integration Home Co., Ltd. to Guangzhou Branch of Shanghai
Pudong Development Bank Co., Ltd., and the subsidiary Guangzhou Oppein Integration Home Co., Ltd. provided a
deposit of CNY 32,000,000.00 as collateral guarantee; CNY 250,000,000.00 was a loan formed by the subsidiary
Qingyuan Oppein Integration Home Co., Ltd. discounting a bank acceptance bill issued by the subsidiary Guangzhou
Oppein Integration Home Co., Ltd. to Guangzhou Branch of Ping An Bank Co., Ltd., and the subsidiary Guangzhou
Oppein Integration Home Co., Ltd. provided a deposit of CNY 25,000,000.00 as collateral guarantee; CNY
200,000,000.00 was a loan formed by the subsidiary Qingyuan Oppein Integration Home Co., Ltd. discounting a domestic
letter of credit issued by the subsidiary Guangzhou Oppein Integration Home Co., Ltd. to Guangzhou Branch of Shanghai
Pudong Development Bank Co., Ltd., and the Company provides a deposit of CNY 20,000,000.00 as collateral guarantee;
CNY 350,000,000.00 was a loan formed by the discount of a bank acceptance bill issued by the subsidiary Guangzhou
Oppein Integration Home Co., Ltd., received by the subsidiary Tianjin Oppein Integration Home Co., Ltd., to the
Guangzhou Baiyun Branch of Bank of China Limited, and provided by the subsidiary Guangzhou Oppein Integration
Home Co., Ltd. with a deposit of CNY 17,500,000.00 as collateral guarantee; CNY 298,000,000.00 was a loan formed
by the subsidiary Tianjin Oppein Integration Home Co., Ltd. discounting a bank acceptance bill issued by the Company
to Guangzhou Branch of China Minsheng Bank Co., Ltd.; and CNY 150,000,000.00 was a loan formed by the subsidiary
Tianjin Oppein Integration Home Co., Ltd. discounting a bank acceptance bill issued by the subsidiary Guangzhou Oppein
Integration Home Co., Ltd. to Guangzhou Baiyun Branch of Bank of China Limited, and the subsidiary Guangzhou
Oppein Integration Home Co., Ltd. provided a deposit of CNY 7,500,000.00 as collateral guarantee.
2. As of December 31, 2022, the Company's guaranteed loan balance of CNY 100,087,083.33 was borrowed by its
subsidiary Guangzhou Oppein Integration Home Co., Ltd. from Guangzhou Tianpingjia Branch of Industrial and
Commercial Bank of China Limited, and the Company provided joint and several liability guarantees.
3. As of December 31, 2022, the Company's credit loan balance was CNY 699,493,238.31, of which CNY
100,086,111.10 was borrowed by the Company from Guangzhou Sanyuanli Branch of Agricultural Bank of China
Limited; and CNY 599,407,127.21 was a loan from Guangzhou Tianpingjia Branch of Industrial and Commercial Bank
of China Limited.
4. As of December 31, 2022, the Company does not have any overdue short-term loans.
(2) Information of overdue and unpaid short-term loans
□ Applicable √ Not applicable
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2022 Annual Report
The important outstanding short-term loans that have been overdue are as follows:
□ Applicable √ Not applicable
Other descriptions
□ Applicable √ Not applicable
33. Trading financial liabilities
□ Applicable √ Not applicable
34. Derivative financial liabilities
□ Applicable √ Not applicable
35. Notes payable
(1) List of notes payable
√ Applicable □ Not applicable
Unit: CNY
Classification Ending balance Beginning balance
Commercial acceptance
draft 0.00 0.00
Bank acceptance draft 70,366,124.74 131,915,607.89
Usance credit 0.00 8,036,163.82
Total 70,366,124.74 139,951,771.71
The total amount of unpaid notes payable at the end of this period is CNY 0.00.
As of December 31, 2022, the balance of bank acceptance bills was CNY 70,366,124.74, of which the balance of
bank acceptance bills opened by the Company at Guangzhou Branch of Shanghai Pudong Development Bank Co., Ltd.
was CNY 21,357,986.17, and the Company provided a deposit of CNY 2,135,799.00; the balance of bank acceptance
bills issued by the Company at Guangzhou Yihe Branch Industrial and Commercial Bank of China Limited was CNY
38,046,787.43, with joint liability guarantee provided by its subsidiary Guangzhou Oppein Integration Home Co., Ltd.;
the balance of bank acceptance bills issued by subsidiary Qingyuan Oppein Integration Home Co., Ltd. at Qingyuan
Branch of Guangfa Bank Co., Ltd. was CNY 6,367,520.82, and the subsidiary Qingyuan Oppein Integration Home Co.,
Ltd. provided a deposit of CNY 636,752.08, and the Company provided joint liability guarantee; and the balance of bank
acceptance bills issued by subsidiary Guangzhou Oppein Integration Home Co., Ltd. at Guangzhou Branch of Shanghai
Pudong Development Bank Co., Ltd. was CNY 4,593,830.32, and the subsidiary Guangzhou Oppein Integration Home
Co., Ltd. provided a deposit of CNY 459,383.03, and the Company provided joint liability guarantee.
36. Accounts payable
(1) Listing of accounts payable
√ Applicable □ Not applicable
Unit: CNY
Item Ending balance Beginning balance
Accounts payable 1,908,743,254.29 2,018,248,874.11
Total 1,908,743,254.29 2,018,248,874.11
(2) Significant accounts payable with the aging over 1 year
□ Applicable √ Not applicable
Others
□ Applicable √ Not applicable
37. Advance receipts
(1) List of advance receipts
√ Applicable □ Not applicable
Unit: CNY
Item Ending balance Beginning balance
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2022 Annual Report
Receipts in advance 364,393,984.51 885,811,485.23
Total 364,393,984.51 885,811,485.23
(2) Important advance payments with an aging of over 1 year
□ Applicable √ Not applicable
Others
□ Applicable √ Not applicable
38. Contract liabilities
(1). Contract liability
√ Applicable □ Not applicable
Unit: CNY
Item Ending balance Beginning balance
Advances on sales 782,289,860.99 1,202,994,206.12
Total 782,289,860.99 1,202,994,206.12
(2) Amount and reasons for significant changes in book value during the reporting period
□ Applicable √ Not applicable
Other descriptions
□ Applicable √ Not applicable
39. Payroll payable
(1) List of employee compensation payable
√ Applicable □ Not applicable
Unit: CNY
Item Beginning Increase in current Decrease in the Ending balance
balance period current period
I. Short term payroll 561,430,166.62 3,542,939,704.04 3,589,721,160.39 514,648,710.27
II. Post-employment benefit -
189,541,072.26 189,541,072.26
defined contribution plan
III. Dismissal benefit 26,699,487.78 26,699,487.78
IV. Other welfares due within
one year
Total 561,430,166.62 3,759,180,264.08 3,805,961,720.43 514,648,710.27
(2) List of short-term compensation
√ Applicable □ Not applicable
Unit: CNY
Beginning Increase in current Decrease in the
Item balance period current period Ending balance
I. Wages, salaries, bonuses,
560,629,985.50 3,308,644,119.56 3,354,964,296.77 514,309,808.29
allowances and subsidies
II. Employee benefits 557,531.00 74,724,364.79 75,281,895.79 0.00
III. Social insurance premium 0.00 110,176,840.72 110,176,840.72 0.00
Including: medical insurance
premium 0.00 91,684,979.36 91,684,979.36 0.00
Industrial injury insurance 0.00 7,878,379.00 7,878,379.00 0.00
Birth insurance premium 0.00 6,554,864.75 6,554,864.75 0.00
Other social insurance 0.00 4,058,617.61 4,058,617.61 0.00
IV. Housing fund 0.00 47,756,250.71 47,756,250.71 0.00
V. Labor union funds and
242,650.12 1,638,128.26 1,541,876.40 338,901.98
employee educationfunds
VI. Short-term compensated 0.00 0.00 0.00 0.00
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2022 Annual Report
absence
VII. Short-term profit sharing
plan 0.00 0.00 0.00 0.00
Total 561,430,166.62 3,542,939,704.04 3,589,721,160.39 514,648,710.27
(3) Presentation of defined contribution plan
√ Applicable □ Not applicable
Unit: CNY
Item Beginning Increase in current Decrease in the current Ending
balance period period balance
1. Basic endowment insurance
expense 0.00 183,792,200.50 183,792,200.50 0.00
2.Unemployment insurance 0.00 5,748,871.76 5,748,871.76 0.00
3. Corporate annuity payment 0.00 0.00 0.00 0.00
Total 0.00 189,541,072.26 189,541,072.26 0.00
Other descriptions
√ Applicable □ Not applicable
As of December 31, 2022, the Company has no outstanding employee compensation payable.
40. Taxes and dues payable
√ Applicable □ Not applicable
Unit: CNY
Item Ending balance Beginning balance
Value added tax 64,081,546.00 35,494,240.63
Corporate income tax 163,516,753.96 202,982,320.76
Individual income tax 10,116,026.05 9,594,793.44
Urban maintenance and construction 5,387,000.99 5,061,796.85
tax
Education surcharges 3,866,414.36 3,741,373.47
Other 22,238,005.11 4,458,462.18
Total 269,205,746.47 261,332,987.33
41. List of other payables
List of items√ Applicable □ Not applicable
Unit: CNY
Item Ending balance Beginning balance
Interest Payable 0.00 0.00
Dividend payable 0.00 0.00
Other payables 840,531,618.28 667,841,099.64
Total 840,531,618.28 667,841,099.64
Other descriptions
□ Applicable √ Not applicable
Interest Payable
(1) Listed by category
□ Applicable √ Not applicable
Dividend payable
(1) Listed by category
□ Applicable √ Not applicable
Other payables
(1) Other accounts payable listed by nature of payment
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2022 Annual Report
√ Applicable □ Not applicable
Unit: CNY
Item Ending balance Beginning balance
Margin for bulk business 269,351,758.62 226,257,342.16
Franchisee performance bond 286,299,620.77 236,359,065.56
Supplier quality guarantee deposit 274,205,622.44 197,973,074.57
Other 10,674,616.45 7,251,617.35
Total 840,531,618.28 667,841,099.64
(2) Other material accounts payable aged over 1 year
□ Applicable √ Not applicable
Other descriptions
□ Applicable √ Not applicable
42. Liabilities held for sale
□ Applicable √ Not applicable
43. Non-current liabilities due within one year
√ Applicable □ Not applicable
Unit: CNY
Item Ending balance Beginning balance
Long-term loans due within one
year 202,047,638.24 0.00
Lease liabilities due within one year 39,683,015.46 13,286,652.37
Total 241,730,653.70 13,286,652.37
44. Other current liabilities
Other current liabilities
√ Applicable □ Not applicable
Unit: CNY
Item Ending balance Beginning balance
Value added tax to be transferred
for sale 97,354,681.10 144,631,995.61
Unrecognized bills 803,972.43 0.00
Total 98,158,653.53 144,631,995.61
Increase or decrease in short-term payable bonds:
□ Applicable √ Not Applicable
Other descriptions
□ Applicable √ Not applicable
45. Long-term loan
(1) Classification of long-term loan
√ Applicable □ Not applicable
Unit: CNY
Item Ending balance Beginning balance
Pledge borrowings 0.00 0.00
Mortgage Loan 6,986,325.48 0.00
Guaranteed Loan 0.00 0.00
Credit borrowings 200,183,333.33 0.00
Less: long-term loan due within one
year 202,047,638.24 0.00
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2022 Annual Report
Total 5,122,020.57 0.00
Explanation of classification of long-term loan:
1. As of December 31, 2022, the Company's credit loan balance was CNY 200,183,333.33, which was a loan from
China Construction Bank Corporation, Guangzhou Baiyun Branch.
2. As of December 31, 2022, the balance of the Company's mortgage loans was CNY 6,986,325.48, of which CNY
5,946,700.98 is a loan from the subsidiary FORMER S.R.L. to Cassa Rurale ed Artigiana SOC.COOP.CRL, which is
provided by the subsidiary FORMER S.R.L. as collateral for the house and land use rights; and CNY 1,039,624.50 is a
loan from INTESA SANPAOLO SPA by FORMER S.R.L., which is secured by its subsidiary, FORMER S.R.L., with
the right to use the house and land as collateral.
Other explanations, including interest rate range:
□ Applicable √ Not applicable
46. Bonds payable
(1) Bonds payable
√ Applicable □ Not applicable
Unit: CNY
Item Ending balance Beginning balance
Convertible corporation bonds 1,601,701,819.31 0.00
Total 1,601,701,819.31 0.00
(2) Increase or decrease in payable bonds: (excluding preferred stocks, perpetual bonds, and other financial
instruments classified as financial liabilities)
√ Applicable □ Not applicable
Unit: CNY
B
e
gi
B n
o ni
Issu n n Accruing Amortization
Bond Face Ending
e d Issue amount g Current issue interest at of excess and
Name value balance
date d b face value discount
u al
ra a Curre
ti n nt
o c repay
n e ment
Oppein
22 6
converti Aug y
100.0 2,000,000,000.0 1,990,871,567.8 2,500,000.0 32,681,436.9 1,601,701,
ble ust e
0 0 3 0 2 819.31
bonds 5, ar
(113655 202 s
) 2
2,000,000,000.0 1,990,871,567.8 2,500,000.0 32,681,436.9 1,601,701,
Total / / /
0 3 0 2 819.31
(3) Explanation of conversion conditions and conversion time for convertible corporation bonds
√ Applicable □ Not applicable
With the approval of "ZJXK [2022] No.1328" of CSRC, the Company publicly issued 20,000,000.00 convertible
corporation bonds on August 5, 2022, with a face value of CNY 100 each and a total issuance amount of CNY
2,000,000,000.00. The term of the bonds is six years.
The coupon rate of the bonds issued by the Company is 0.3% in the first year, 0.5% in the second year, 1.0% in the
third year, 1.5% in the fourth year, 1.8% in the fifth year and 2.0% in the sixth year. The convertible corporation bonds
issued this time adopt an annual interest payment method, and the starting date for interest calculation is the first day of
the convertible corporation bond issuance. The annual interest payment date is the day of each full year from the first day
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of the issuance of convertible corporation bonds. The conversion period starts from the first trading day six months after
the end of the issuance of convertible corporation bonds and ends on the maturity date of convertible corporation bonds.
The initial conversion price for convertible corporation bonds at the time of issuance is CNY 125.46 per share.
(4) Description of other financial instruments classified as financial liabilities
Basic information of preferred shares, perpetual bonds and other financial instruments issued to the public at the end of
the period
□ Applicable √ Not applicable
Statement of changes in financial instruments such as preferred shares and perpetual bonds issued to the public at the end
of the period
□ Applicable √ Not applicable
Description of the basis for dividing other financial instruments into financial liabilities:
□ Applicable √ Not applicable
Other descriptions
□ Applicable √ Not applicable
47. Lease liabilities
√ Applicable □ Not applicable
Unit: CNY
Item Ending balance Beginning balance
Lease liabilities 101,476,366.50 12,665,970.28
Total 101,476,366.50 12,665,970.28
48. Long-term accounts payable
List of items
□ Applicable √ Not applicable
Other descriptions
□ Applicable √ Not applicable
Long-term payables
(1) Long-term accounts payable listed by nature of payment
□ Applicable √ Not applicable
Special accounts payables
(1) List special accounts payable by nature
□ Applicable √ Not applicable
49. Long-term employee compensation payable
□ Applicable √ Not applicable
50. Estimated liabilities
√ Applicable □ Not applicable
Unit: CNY
Beginning Ending
Item balance balance Cause of formation
The Company carried out the carries out the "Pudong
Development Bank Quick Loan" business to recommend
merchants to banks for loans, and assumed a prudent
Estimated
59,715.00 43,770.00 recommendation obligation to banks for the recommended
liabilities
merchants' repayment ability. The Company referred to the bank's
provision for loan impairment of 1.5% for normal loans, and
prudently recommended liability losses.
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Total 59,715.00 43,770.00 /
Other descriptions, including important assumptions and estimation explanations related to important estimated liabilities:
As of December 31, 2022, the estimated balance of liabilities is CNY 43,770.00, for that the Company carried out
the carries out the "Pudong Development Bank Quick Loan" business to recommend merchants to banks for loans, and
assumed a prudent recommendation obligation to banks for the recommended merchants' repayment ability. The
Company referred to the bank's provision for loan impairment of 1.5% for normal loans, and prudently recommended
liability losses.
51. Deferred income
Information of deferred income
√ Applicable □ Not applicable
Unit: CNY
Item Beginning balance Increase in current Decrease in the Ending balance Cause of
period current period formation
Government
subsidies 471,292,317.05 61,519,100.00 63,110,343.87 469,701,073.18
Total 471,292,317.05 61,519,100.00 63,110,343.87 469,701,073.18 /
Items involving government subsidies:
√ Applicable □ Not applicable
Unit: CNY
Amoun
t
include
Amount
d in
included in
Beginnin Newly added non- Related to
Liability other Ending
g subsidy amount operati Other changes assets/related
items income in balance
balance in this period ng to returns
the current
income
period
for the
current
period
Project
construction 254,152, 16,981,68 286,547,3 Assets-
49,376,400.00
support 674.50 5.83 88.67 related
funds
Special
funds for
technologic 214,470, 32,243,04 180,778,0 Assets-
12,142,700.00 13,592,407.50
al 771.59 6.20 17.89 related
transformati
on
Special
funds for
2,668,87 293,204.3 2,375,666. Assets-
pollution
0.96 4 62 related
prevention
and control
Other descriptions
√ Applicable □ Not applicable
1. Projects supported by project construction support funds:
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2022 Annual Report
Amount
included
Amount
Newly added in non-
included in
Beginning subsidy operating Other
Liability items other income Ending balance
balance amount in this income changes
in the current
period for the Related to
period
current assets/related
period to returns
Construction of
the "Investment
Agreement"
Project by the
Management Assets-
40,116,973.84 3,769,686.12 36,347,287.72
Committee of related
Tianjin Jinghai
Economic
Development
Zone
Support funds
Wuxi Huishan
District People's
Government's
Assets-
Investment 29,678,515.88 2,012,102.88 27,666,413.00
related
Agreement Project
Construction
Support Fund
Funds for the
Oppein Chengdu
Assets-
Base Site Leveling 60,440,447.92 1,320,877.20 59,119,570.72
related
and Fixed Asset
Subsidy Project
Chengdu Oppein
Smart Home
Project Assets-
3,416,666.54 500,000.04 2,916,666.50
Construction related
Phase I Support
Fund
Special funds for
industrial co-
construction 70,500,070.32 35,896,400.00 9,158,005.63 97,238,464.69
projects in the Assets-
southern base related
Construction
Phase I Support
Assets-
Fund of Wuhan 50,000,000.00 50,000,000.00
related
Oppein Smart
Home Co., Ltd.
Paid-in Registered
Capital Award of
Assets-
Wuhan Oppein 8,000,000.00 8,000,000.00
related
Smart Home Co.,
Ltd.
Special funds for
affordable rental 5,480,000.00 221,013.96 5,258,986.04 Assets-
housing related
Total 254,152,674.50 49,376,400.00 16,981,685.83 286,547,388.67
2. Projects subsidized with special funds for technological transformation:
Amount
included
Newly Amount
in non-
added included in
Beginning operating Other
Liability items subsidy other income Ending balance
balance income changes
amount in in the current
for the Related to
this period period
current assets/related
period to returns
Quartz stone 20,320,700.32 8,780,133.95 11,540,566.37 Assets-
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2022 Annual Report
countertop related
flexible
manufacturing
intelligent
upgrade and
transformation
project
Furniture
Production
Line
Distributed
Assets-
Workshop Top 9,001,133.19 1,986,023.88 7,015,109.31
related
ES System
Technical
Renovation
Project
Technical
renovation
project for a
flexible
customized
Assets-
production line 21,648,917.21 3,651,887.40 17,997,029.81
related
with an annual
output of
150,000 sets of
furniture
products
Expansion of
production
technology
transformation Assets-
10,055,723.87 3,112,108.57 6,943,615.30
project for related
high-end
bathroom
products
Subsidy for
customized
furniture
intelligent Assets-
4,904,911.67 769,872.69 4,135,038.98
production line related
technology
transformation
project
Technical
Transformation
Project for
Expanding
Production and
Assets-
Construction of 13,083,371.45 1,373,999.76 11,709,371.69
related
500,000 sets of
High end
Wardrobe
Products per
Year
Technical
Transformation
Project for
Expanding the Assets-
607,002.80 100,374.60 506,628.20
Production of related
150,000 sets of
Cabinets Per
Year
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Amount
Amount
included
Newly included
in non- Related
added in other
Beginning operating to
Liability items subsidy income in Other changes Ending balance
balance income assets/r
amount in the
for the elated
this period current
current to
period
period returns
Technical
Transformatio
n Project for
the
Construction 385,408.2 Assets-
2,203,339.26 1,817,931.06
of Automatic 0 related
Blister Door
Panel
Production
Line
Customized
Furniture
Product
Automation
Flexible
101,253.6 Assets-
Spraying 696,239.13 594,985.53
0 related
Production
Line Upgrade
Technology
Transformatio
n Project
High-End
Wooden Door
Product
Flexible
Manufacturing 1,322,204. Assets-
8,179,547.32 6,857,343.28
Production 04 related
Line
Technology
Transformatio
n Project
Technical
Transformatio
n Project of
Home 738,817.5 Assets-
4,767,986.61 4,029,169.05
Furnishing 6 related
Product
Production
Line
Technical
Renovation
Project for the
Production
Line of 219,371.8 Assets-
2,102,717.38 1,883,345.50
500,000 sets of 8 related
Kitchen
Electrical
Appliances
Per Year
Oppein Home
Furnishing
Enterprise 1,212,771.
8,489,403.39 7,276,631.43
Research 96
Institute Assets-
Project related
Large-scale
Non-standard
1,258,892. Assets-
Customized 8,237,816.71 6,978,924.55
16 related
Packaged
Cabinet
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2022 Annual Report
Flexible
Production
Line
Technology
Transformatio
n Project
Tianjin
Intelligent 1,132,413.
7,059,310.40 5,926,896.68
Manufacturing 72 Assets-
Special Fund related
Modern
Industrial
Development
Fund Project - 604,032.9 Assets-
4,499,356.76 3,895,323.77
Enterprise 9 related
Intelligent
Transformatio
n Project
Wuxi City
Technical
406,048.3
Transformatio 2,950,125.33 2,544,077.01
2
n Guidance Assets-
Fund related
Upgraded
Technical
Transformatio
n Project for 104,117.6 Assets-
1,099,797.08 995,679.44
the Production 4 related
Line of Blister
Door Panels
(Guangzhou)
Guangzhou
City
Development
Housing
1,838,199. Assets-
Rental Market 62,223,021.00 13,592,407.50 46,792,414.50
00 related
Special Fund
Award and
Supplement
Project
Special Funds
for the
Renovation
Project of the
Rapid Coating Assets-
783,635.29 88,952.04 694,683.25
Production related
Line for
Cabinet
Furniture Paint
Products
Special Funds
for the
Technical
Transformatio
n Project of
Flexible 2,364,371. Assets-
20,332,232.47 17,967,860.71
Production 76 related
Line with an
Annual Output
of 1.5M sets of
Wooden Door
Products
Automation
Technology
106,948.4 Assets-
Transformatio 982,175.26 875,226.82
4 related
n Project for
Blister Door
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2022 Annual Report
Panel
Production
Line
Amount
included Amount
in non- included in
Newly added
Liability operating other Ending Related
Beginning balance subsidy amount Other changes
items income income in balance to
in this period
for the the current assets/rel
current period ated to
period returns
Special
funds for the
third batch
of municipal Assets-
242,307.69 83,076.84 159,230.85
industrial related
developmen
t fund
projects
Chengdu
Municipal
Bureau of
Economic
and
Information Assets-
2,182,700.00 18,189.17 2,164,510.83
Technology related
2021
Citywide
Technical
Transformat
ion Subsidy
Special
funds for the
first batch of
provincial-
Assets-
level 3,180,000.00 3,180,000.00
related
industrial
developmen
t fund
projects
Intelligent
Manufacturi
ng and
483,576.0
Industrial 6,780,000.00 6,296,423.97
3
Internet
Developme Assets-
nt Project related
32,243,04 80,778,017.8
Total 214,470,771.59 12,142,700.00 13,592,407.50
6.20 9
3. Projects subsidized by special funds for pollution prevention and control:
Newly Amount
added Amount included in Related
subsidy included in non- other Ending to
Liability items Beginning balance
amount in operating income in balance assets/rel
this income for the the current Other ated to
period current period period changes returns
Tianjin
Atmospheric
2,040,000
Physics Prevention 2,295,000.00 255,000.00
.00
and Control Special Assets-
Fund related
Special Funds for
335,666.6 Assets-
Construction of 373,870.96 38,204.34
2 related
VOCs Waste Gas
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2022 Annual Report
Treatment System
in Wooden Door
Factory
2,375,666
Total 2,668,870.96 293,204.34
.62
52. Other non-current liabilities
√ Applicable □ Not applicable
Unit: CNY
Item Ending balance Beginning balance
Red Star Macalline Pazhou Project
Purchase Deposit 109,986,691.00 118,488,814.29
Total 109,986,691.00 118,488,814.29
Other descriptions
The deposit for purchasing a house by Red Star Macalline is a deposit received by the Company in advance for the
purchase of part of the property rights of the Pazhou Oppein headquarters building by Red Star Macalline.
53. Equity
√ Applicable □ Not applicable
Unit: CNY
Increase/decrease in this change (+, -)
New issue Provident
Beginning balance Sub- Ending balance
Dividend fund Other
total
conversion
Total
609,151,948.00 6.00 6.00 609,151,954.00
Shares
Other descriptions
The new shares issued by the Company in this period are due to the exercise of stock options granted by employees in
the previous period. Please refer to the relevant explanation in Section X "III. Basic Information of the Company 1.
Company Overview" for details.
54. Other equity instruments
(1) Basic information of preferred shares, perpetual bonds and other financial instruments issued to the public at
the end of the period
√ Applicable □ Not applicable
Beginning Increase in the current Decrease in the
Ending balance
balance period current period
Item
Book Book
Quantity Quantity Book value Quantity Quantity Book value
value value
Oppein 22
20
convertible 424,351,185.44 20 million 424,351,185.44
million
bonds
20
Total 424,351,185.44 20 million 424,351,185.44
million
(2) Statement of changes in financial instruments such as preferred shares and perpetual bonds issued to the public
at the end of the period
□ Applicable √ Not applicable
Explanation of the current increase or decrease in other equity instruments, the reasons for the changes, and the basis for
relevant accounting treatment:
□ Applicable √ Not Applicable
Other descriptions
□ Applicable √ Not applicable
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55. Capital reserve
√ Applicable □ Not applicable
Unit: CNY
Increase in current Decrease in the
Item Beginning balance Ending balance
period current period
Capital premium
(share capital 4,349,628,351.14 925.83 0.00 4,349,629,276.97
premium)
Other capital
11,735,456.40 0.00 1,220,664.08 10,514,792.32
reserve
Total 4,361,363,807.54 925.83 1,220,664.08 4,360,144,069.29
Other descriptions, including changes in current period and reasons for changes:
The increase of CNY 925.83 in share capital premium is due to employees exercising stock options granted in the
previous period, and the amount of paid capital exceeding the share capital is CNY 865.32. After the exercise, other
capital reserves recognized by the company due to equity incentive expenses in the previous period of CNY 60.51 are
transferred to the capital premium; and other capital reserves decreased by CNY 1,220,664.08, except for the impact of
employee stock option exercise mentioned above, due to the Company's failure to meet the non market unlocking
conditions in the second phase of the 2021 employee stock option incentive plan, and the company's reversal of previously
recognized share-based payment expenses.
56. Treasury stock
□ Applicable √ Not applicable
57. Other comprehensive income
√ Applicable □ Not applicable
Unit: CNY
Amount incurred in current period
Less: the
net Less:
amount Previous
that is period
included included
in other in other
Amount
Beginni comprehe comprehe Attributable to
incurred before Ending
Item ng nsive nsive Less: income parent
income tax in balance
balance profits of income, tax expenses company after Attribu
the current
prior current tax table to
period
period and period minorit
transferre transferre y
d into the d to shareh
current retained older
profits and earnings after
loss tax
I. Other
comprehen
sive income
that cannot 59,480, 2,625,990 16,124,346.2 107,853,87
67,123,375.72 48,373,038.61
be 835.83 .89 2 4.44
transferred
to profit or
loss
Where: Re-
measureme
nt of
changed
amount of
defined
benefit plan
Other
comprehen
205/259
2022 Annual Report
sive income
that cannot
be
transferred
to profit or
loss under
the equity
method
Changes in
fair value of
other equity 59,480, 2,625,990 16,124,346.2 107,853,87
67,123,375.72 48,373,038.61
instrument 835.83 .89 2 4.44
investment
s
Changes in
the fair
value of the
Company's
own credit
risk
II. Other
comprehen
sive income
99,844. 3,572,807.
that will be 3,472,962.83 3,472,962.83
73 56
reclassified
into profit
or loss
Where:
Other
comprehen
sive income
that can be
transferred
to profits or
losses
under the
equity
method
Changes in
fair value of
other
creditor's
right
investment
Amount of
financial
assets
reclassified
into other
comprehen
sive income
Provision
for credit
impairment
of other
creditor's
right
investment
206/259
2022 Annual Report
Amount incurred in current period
Less: the net
amount that
is included Less: Previous
Amount
in other period included
incurred
comprehens in other
before
Beginning ive profits of comprehensive Attributable to Ending
Item income Less: income
balance prior period income, current parent company balance
tax in tax expenses
and period after tax Attributa
the
transferred transferred to ble to
current
into the retained minority
period
current earnings sharehold
profits and er after
loss tax
Cash
flow
hedgi
ng
reserv
e
Trans
lation
differ
ence
of
foreig
3,472,9 3,572,80
n 99,844.73 3,472,962.83
62.83 7.56
curre
ncy
finan
cial
state
ments
Total
of
other
comp 59,580,680. 70,596, 111,426,
2,625,990.89 16,124,346.22 51,846,001.44
rehen 56 338.55 682.00
sive
inco
me
58. Special reserve
□ Applicable √ Not applicable
59. Special reserve
√ Applicable □ Not applicable
Unit: CNY
Increase in current Decrease in the
Item Beginning balance period current period Ending balance
Legal surplus
reserve 304,575,974.00 3.00 0.00 304,575,977.00
Discretionary
surplus reserve 0.00 0.00 0.00 0.00
Reserve funds 0.00 0.00 0.00 0.00
Enterprise
expansion fund 0.00 0.00 0.00 0.00
Other 0.00 0.00 0.00 0.00
Total 304,575,974.00 3.00 0.00 304,575,977.00
Other descriptions of surplus, including changes in current period and reasons for changes:
The surplus reserve is formed by withdrawing 10% of the parent company's net profit from the statutory surplus reserve,
and the withdrawal amount is limited to 50% of the Company's share capital
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2022 Annual Report
60. Undistributed profit
√ Applicable □ Not applicable
Unit: CNY
Item Current period Previous period
Undistributed profits before adjustment at
end of the previous period 9,074,118,319.30 7,149,700,284.23
Total undistributed profits in the adjustment
beginning period (increase in +, decrease in 0.00 0.00
–)
Undistributed profit at the end of the
adjustment period 9,074,118,319.30 7,149,700,284.23
Plus: Net profits attributable to parent
2,688,425,483.50 2,665,588,441.38
company in this period
Item Current period Previous period
Plus: Income from disposal of equity
designated as measured at fair value with
1,969,493.17 0.00
changes recognized in other comprehensive
income
Less: withdrawal of legal surplus reserves 3.00 16,052,504.71
Withdrawal of discretionary surplus reserve 0.00 0.00
Withdrawal of general risk reserves 0.00 0.00
Dividends payable on ordinary shares 1,066,015,909.00 725,117,901.60
Common stock dividends converted into
share capital 0.00 0.00
Undistributed profit at the end of the period 10,698,497,383.97 9,074,118,319.30
Details of undistributed profits at the beginning of the adjustment period:
1. Due to the retrospective adjustment of the Accounting Standards for Business Enterprises and related new
regulations, the undistributed profit at the beginning of the period was affected by CNY 0.00.
2. Due to changes in accounting policies, the undistributed profit at the beginning of the period was CNY 0.00.
3. Due to significant accounting error correction, the undistributed profit at the beginning of the period was CNY
0.00.
4. Due to changes in the scope of consolidation caused by the same control, the undistributed profit at the beginning
of the period was CNY 0.00.
5. The total impact of other adjustments on the undistributed profit at the beginning of the period was CNY 0.00.
61. Operating income and operating cost
(1) Operating income and operating cost
√ Applicable □ Not applicable
Unit: CNY
The amount incurred in current period Amount incurred in last period
Item
IncomIncomee Cost IncomIncomee Cost
Main
22,000,522,428.80 15,144,117,735.57 20,144,967,469.42 13,825,554,770.27
business
Other
478,981,045.76 230,066,980.57 296,637,122.08 152,785,752.32
businesses
Total 22,479,503,474.56 15,374,184,716.14 20,441,604,591.50 13,978,340,522.59
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2022 Annual Report
(2) Information of income generated by the contract
□ Applicable √ Not applicable
Description of income generated by the contract:
□ Applicable √ Not applicable
(3) Description of performance obligations
√ Applicable □ Not applicable
As of December 31, 2022, the corresponding transaction price for performance obligations that have been signed but
have not yet been fulfilled or completed was CNY 1,009,019,870.23. Revenue is expected to be recognized between 2023
and 2024.
(4) Description of allocation to remaining performance obligations
□ Applicable √ Not applicable
62. Tax and surcharges
√ Applicable □ Not applicable
Unit: CNY
The amount incurred in current
Item period Amount incurred in last period
Urban maintenance and
construction tax 59,228,200.76 53,309,354.32
Education surcharges 25,424,444.24 23,349,776.47
Local education surcharges 16,903,221.26 15,566,517.66
Property tax 45,739,904.54 36,690,061.98
Land use tax 5,983,879.81 4,986,531.00
Stamp duty 13,724,195.34 8,716,003.29
Other 1,014,466.33 146,634.23
Total 168,018,312.28 142,764,878.95
63. Sales expense
√ Applicable □ Not applicable
Unit: CNY
The amount incurred in current
Item period Amount incurred in last period
Advertising exhibition fees 643,925,038.82 507,928,041.71
Employee benefits 734,218,701.43 613,653,488.05
Business office expenses 185,165,124.31 171,737,452.68
Rental and decoration fees 101,244,607.38 71,485,160.83
Export expenses 6,860,613.20 12,653,476.45
Other 7,480,029.00 8,315,158.31
Total 1,678,894,114.14 1,385,772,778.03
64. Administrative expenses
√ Applicable □ Not applicable
Unit: CNY
The amount incurred in current Amount incurred in last
Item period period
Employee benefits 752,197,741.76 609,625,156.76
Office expenses 236,940,805.62 193,125,060.25
Depreciation and amortization expenses 256,642,914.27 253,992,293.81
Car expenses 19,416,712.27 17,104,917.30
Other 71,755,306.02 45,862,810.28
Equity incentive expenses -1,220,603.57 11,735,456.40
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2022 Annual Report
Total 1,335,732,876.37 1,131,445,694.80
65. R&D expenses
√ Applicable □ Not applicable
Unit: CNY
The amount incurred in current Amount incurred in last
Item period period
Employee benefits 592,127,705.37 468,891,799.33
Material consumption 432,410,933.68 345,504,415.91
Depreciation and amortization expenses 42,224,204.93 40,009,867.45
Other 56,486,087.15 53,352,084.04
Total 1,123,248,931.13 907,758,166.73
66. Financial expenses
√ Applicable □ Not applicable
Unit: CNY
The amount incurred in current Amount incurred in last
Item period period
Interest expense 152,770,445.92 132,807,862.73
Less: interest income 380,881,220.85 266,051,753.30
Exchange profits and losses -33,261,629.49 9,717,426.37
Other 13,973,236.43 8,045,588.32
Total -247,399,167.99 -115,480,875.88
67. Other income
√ Applicable □ Not applicable
Unit: CNY
Item The amount incurred in current Amount incurred in last period
period
Government subsidies related to
assets 49,517,936.37 39,990,918.13
Grants related to income 56,592,293.83 45,776,002.32
Refund of individual income tax
handling fee 2,411,938.79 1,802,824.49
Value added tax reduction and
exemption 11,117,717.59 3,536,830.50
Total 119,639,886.58 91,106,575.44
Other descriptions:
1. The details of government subsidies included in the current profits and losses during the reporting period are as
follows:
The amount
Amount incurred in
No. Name of government subsidy project incurred in current
last period
period
Support Fund for Construction of the Investment Agreement
1 Project by the Management Committee of Tianjin Jinghai 3,769,686.12 3,769,686.12
Economic Development Zone
Furniture Production Line Distributed Workshop MES System
2 1,986,023.88 2,000,878.40
Technical Renovation Project
Technical renovation project for a flexible customized
3 production line with an annual output of 150,000 sets of 3,651,887.40 3,651,887.40
furniture products
Technical Transformation Project of Home Furnishing Product
4 738,817.56 738,817.56
Production Line
Expansion of production technology transformation project for
5 3,112,108.57 2,536,588.87
high-end bathroom products
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2022 Annual Report
The amount
Amount incurred in
No. Name of government subsidy project incurred in current
last period
period
High-End Wooden Door Product Flexible Manufacturing
6 1,322,204.04 1,095,524.69
Production Line Technology Transformation Project
Wuxi Huishan District People's Government's Investment
7 2,012,102.88 2,012,102.88
Agreement Project Construction Support Fund
Subsidy for customized furniture intelligent production line
8 769,872.69 840,087.86
technology transformation project
9 Wuxi City Technical Transformation Guidance Fund 406,048.32 395,946.72
Funds for the Oppein Chengdu Base Site Leveling and Fixed
10 1,320,877.20 1,320,877.20
Asset Subsidy Project
Chengdu Oppein Smart Home Project Construction Phase I
11 500,000.04 500,000.04
Support Fund
Quartz Stone Countertop Flexible Manufacturing Intelligent
12 8,780,133.95 8,801,812.72
Upgrade and Transformation Project
Technical Renovation Project for the Production Line of
13 311,514.48 242,407.53
500,000 sets of Kitchen Electrical Appliances Per Year
14 Oppein Home Furnishing Enterprise Research Institute Project 1,212,771.96 1,212,771.96
Upgraded Technical Transformation Project for the Production
15 164,958.84 119,220.57
Line of Blister Door Panels (Guangzhou)
Technical Transformation Project for Expanding Production
16 and Construction of 500,000 sets of High end Wardrobe 1,373,999.76 1,373,999.76
Products per Year
Technical Transformation Project for the Construction of
17 385,408.20 385,408.20
Automatic Blister Door Panel Production Line
Technical Transformation Project for Expanding the Production
18 100,374.60 100,374.60
of 150,000 sets of Cabinets Per Year
Customized Furniture Product Automation Flexible Spraying
19 101,253.60 101,253.60
Production Line Upgrade Technology Transformation Project
Large-scale Non-standard Customized Packaged Cabinet
20 1,258,892.16 1,258,892.20
Flexible Production Line Technology Transformation Project
Special Funds for the Renovation Project of the Rapid Coating
21 88,952.04 88,952.04
Production Line for Cabinet Furniture Paint Products
Transfer of the Third Batch of Tianjin Intelligent Manufacturing
22 1,132,413.72 1,132,413.74
Special Fund in 2019
Special Funds for the Technical Transformation Project of
23 Flexible Production Line with an Annual Output of 1.5 million 2,364,371.76 1,857,767.53
sets of Wooden Door Products
Automation Technology Transformation Project for Blister
24 106,948.44 17,824.74
Door Panel Production Line
Special funds for industrial co-construction projects in the
25 9,158,005.63 3,585,429.68
southern base
Special funds for the third batch of municipal industrial
26 83,076.84 27,692.31
development fund projects
Tianjin Atmospheric Physics Prevention and Control Special
27 255,000.00 255,000.00
Fund
Special Funds for Construction of VOCs Waste Gas Treatment
28 38,204.34 6,129.04
System in Wooden Door Factory
Modern Industrial Development Fund Project - Enterprise
29 604,032.99 561,170.17
Intelligent Transformation Project
Guangzhou City Development Housing Rental Market Special
30 1,685,215.20
Fund Award and Supplement Project
Special Funds for Intelligent Manufacturing and Industrial
31 483,576.03
Internet Development
32 Special funds for affordable rental housing 221,013.96
33 2021 Citywide Technical Transformation Subsidy 18,189.17
Subtotal of government subsidies related to assets 49,517,936.37 39,990,918.13
34 Internship subsidy 46,896.00 87,596.00
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The amount
Amount incurred in
No. Name of government subsidy project incurred in current
last period
period
Subsidy for 2018 Tianjin Intelligent Manufacturing Special
35 437,900.00
Encourage Enterprises to Increase R&D Investment Projects
36 Guangzhou High-tech Enterprises Recognized and Awarded 900,000.00
37 Stabilization allowance 11,814,932.88 13,259,077.32
38 Advance Subsidy for New Apprenticeship Training 302,500.00 1,559,150.00
39 Subsidy for Job Training 67,000.00 1,439,994.00
40 Work as training subsidy 20,898,660.00
41 Huishan District Qianzhou Street Pioneer Talent Funding Fund 440,000.00
42 One-time Employment Subsidies for College Graduates 24,000.00
43 Other Employment Subsidies 15,000.00
Intellectual Property Award from the Finance Bureau of
44 15,925.00
Qingcheng District, Qingyuan City
45 Subsidy for Skill Training for Millions of Workers 338,500.00
46 Industrial Technology Development Subsidies 1,200,000.00
47 Rewards for Supporting Key Enterprises 2,000,000.00
48 Headquarters Enterprise Reward Funds 4,350,000.00 509,200.00
Reward and Subsidy Funds for High-end Professional Service
49 30,000.00
Industry
Subsidy for Intelligent Renovation of Modern Industrial
50 240,000.00
Development in Qianzhou Street
51 Unemployment Dynamic Detection and Investigation Fee 1,000.00
52 Tax preferential support for Qianzhou Street 27,125,000.00 2,039,000.00
Qianzhou Street Enterprise Supporting Action Subsidy (Top 10
53 180,000.00
Value Added Tax Paid in Current Year)
54 Subsidy Funds for Promoting Rural Revitalization 71,000.00
55 Special Funds for Foreign Economic and Trade Development 140,000.00 64,683.00
Special Fund for Business Development in Guangzhou (Import
56 25,317.00
and Export Fair Trade Matters)
57 Tax Preferential Support for Jinghai County, Tianjin 5,000,000.00
58 The 7th Guangdong Provincial Government Quality Award 2,000,000.00
Funds for the full process data management and display
59 platform of customized home furnishings based on the new big 1,820,000.00
data framework
60 Recruitment subsidies 1,042,474.41
Guangdong Province Employment and Entrepreneurship
61 482,149.51
Subsidy
62 Vocational Skills Training Subsidies 409,200.00
63 One-time Job Expansion Subsidy 403,044.06
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2022 Annual Report
The amount
Amount incurred in
No. Name of government subsidy project incurred in current
last period
period
64 Employment Subsidy for Poverty Alleviation Population 162,408.07
Guangdong Provincial Government Quality Award Reward
65 300,000.00
Fund
Huishan District Science and Technology Bureau's Second
66 Batch of Provincial High-tech Enterprise Cultivation Funds for 300,000.00
2021
2022 Wuxi Industrial Transformation and Upgrading Fund
67 250,000.00
(Second Batch) Support Project Fund
Chengdu Industrial Enterprise Stable Production and Increasing
68 218,300.00
Production Incentive Project
Reward for the "Shuangliu Growth of 50 Items" Project
69
Management Team 100,000.00
70 Subsidy for Standard Formulation and Revision 57,000.00
Rewards for enterprises above the designated quota added to the
71 wholesale industry with special funds for business development 50,000.00
in Guangzhou in 2021
72 Rural revitalization and poverty alleviation subsidy 39,600.00
Subsidy for employment and entrepreneurship of college
73 graduates and those facing employment difficulties in 39,586.71
Guangdong Province
74 Financial counterpart assistance funds 30,000.00
75 Technology insurance premium subsidy 20,300.00
Filing and registration of social security subsidies for
76 15,238.04
impoverished labor force
77 Patent funding 4,500.00
78 Subsidy for dynamic monitoring of unemployment in 2022 1,200.00
79 Stamp duty refund 964.15
Subtotal of government subsidies related to income 56,592,293.83 45,776,002.32
Total 106,110,230.20 85,766,920.45
2. All government subsidy projects mentioned above are included in non-recurring profits and losses.
68. Income from investment
√ Applicable □ Not applicable
Unit: CNY
The amount incurred in Amount incurred in
Item current period last period
Long-term equity investment income accounted by Equity
method -1,525,058.67 -6,461,645.66
Investment income from disposal of long-term equity investment 0.00 0.00
Investment income during the holding of transactional financial
assets 0.00 0.00
Dividend income obtained from other equity instrument
investments during the holding period 6,251,775.00 893,000.00
Interest income obtained from debt investments during the
holding period
Bet returns on performance obtained during the holding period of
0.00 1,034,631.75
other equity instrument investments
Dividend income obtained from other non current financial assets
during the holding period 795,116.38 376,737.60
Other interest income obtained from debt investments during the
holding period
Investment income from disposal of trading financial assets 7,040,900.10 24,733,439.44
Investment income from disposal of other equity instrument
investments
Investment income from disposal of debt investments
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Investment income from disposal of other debt investments
Profits on debt restructuring
Investment income from disposal of other non-current financial
10,863,605.74 0.00
assets
Total 23,426,338.55 20,576,163.13
69. Net exposure hedging income
□ Applicable √ Not applicable
70. Income from changes in fair value
√ Applicable □ Not applicable
Unit: CNY
Sources of income from changes in fair The amount incurred in current
value period Amount incurred in last period
Trading financial assets 3,050,958.90 24,395,812.07
Where: Income from changes in fair value
generated by derivative financial 0.00 0.00
instruments
Trading financial liabilities 0.00 0.00
Investment real estate measured at fair
value 0.00 0.00
Other non-current financial assets -36,815,234.41 27,896,754.20
Total -33,764,275.51 52,292,566.27
71. Credit impairment loss
√ Applicable □ Not applicable
Unit: CNY
Item The amount incurred in current Amount incurred in last period
period
Bad debt loss on notes receivable 23,359,815.72 -24,992,807.49
Bad debt loss on accounts receivable -121,602,989.43 -81,720,232.63
Bad debt losses on other receivables -1,544,380.27 -1,592,911.63
Impairment losses on debt investments 0.00 0.00
Impairment losses on other debt investments 0.00 0.00
Bad debt losses on long-term receivables 0.00 0.00
Impairment loss from contract assets 0.00 0.00
Total -99,787,553.98 -108,305,951.75
72. Assets impairment loss
□ Applicable √ Not applicable
73. Asset disposal income
√ Applicable □ Not applicable
Unit: CNY
The amount incurred in current
Item period Amount incurred in last period
Income from disposal of fixed assets -2,205,162.14 -6,782,217.94
Income from disposal of intangible
assets 1,937,982.41 0.00
Total -267,179.73 -6,782,217.94
74. Non-operating income
Information of non-operating income
√ Applicable □ Not applicable
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2022 Annual Report
Unit: CNY
Amount included in current
The amount incurred in Amount incurred in
Item non-recurring profit and
current period last period
loss
Total gains on disposal of non-
current assets 0.00 0.00 0.00
Including: fixed asset disposal
gains 0.00 0.00 0.00
Gains from disposal of intangible
assets 0.00 0.00 0.00
Gains from non-monetary asset
exchange 0.00 0.00 0.00
Donations 0.00 0.00 0.00
Government subsidies 145,400.00 135,500.00 145,400.00
Penalty income 11,980,057.86 13,331,742.43 11,980,057.86
Other 14,408,487.24 18,918,386.12 14,408,487.24
Total 26,533,945.10 32,385,628.55 26,533,945.10
Governmental subsidies recognized in profits and losses of current period
√ Applicable □ Not applicable
Unit: CNY
Amount incurred in Amount incurred in Related to assets/related to
Subsidy Item
current period the previous period returns
Statistics office subsidies 1,400.00 1,300.00 Earning-related
Funding for the election work of
the congress 84,200.00 Earning-related
Funding for Party building work
in two new party organizations 144,000.00 50,000.00 Earning-related
Total 145,400.00 135,500.00
Other descriptions:
□ Applicable √ Not applicable
75. Non-operating expenditure
√ Applicable □ Not applicable
Unit: CNY
Amount included in current
The amount incurred in Amount incurred in
Item non-recurring profit and
current period last period
loss
Total loss on disposal of non
current assets 8,750,883.65 14,141,159.49 8,750,883.65
Where: loss on disposal of fixed
assets 8,750,883.65 14,141,159.49 8,750,883.65
Amount included in current
The amount incurred in Amount incurred in
Item non-recurring profit and
current period last period
loss
Loss on disposal of intangible
assets 0.00 0.00 0.00
Loss on exchange of non
monetary assets 0.00 0.00 0.00
External donations 1,400,000.00 105,836.30 1,400,000.00
Other 4,769,070.62 3,073,218.11 4,769,070.62
Total 14,919,954.27 17,320,213.90 14,919,954.27
76. Income tax expenses
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(1) Income tax expense statement
√ Applicable □ Not applicable
Unit: CNY
The amount incurred in current
Item period Amount incurred in last period
Current income tax expense 383,796,557.60 442,085,157.84
Deferred income tax expense 1,375,277.48 -31,282,565.78
Total 385,171,835.08 410,802,592.06
(2) Accounting profit and income tax expense adjustment process
√ Applicable □ Not applicable
Unit: CNY
The amount incurred
Item in current period
Total profits 3,067,684,899.23
Income tax expenses calculated based on statutory/applicable tax rates 460,152,734.87
The impact of different tax rates applicable to subsidiaries -4,889,136.17
The impact of adjusting previous period income tax -7,401,943.81
The impact of non-taxable income -2,485,079.10
The impact of non-deductible costs, expenses, and losses 5,430,433.13
The impact of deductible losses on unrecognized deferred income tax assets in the prior
period of use -1,243.12
The impact of deductible temporary differences or deductible losses on unrecognized
deferred income tax assets in the current period 396,622.53
The impact of additional deductions on expenses -66,030,553.25
Income tax expense 385,171,835.08
Other descriptions
□ Applicable √ Not applicable
77. Other comprehensive income
√ Applicable □ Not applicable
See Notes for details
The amount incurred Amount incurred in
Item
in current period last period
Net of tax of other comprehensive income attributable to the
53,815,494.61 29,623,688.67
shareholders of the parent company
(I) Other comprehensive income not reclassified into profit or loss
50,342,531.78 29,903,289.16
subsequently
Where: Profits and losses from changes in fair value of other equity
50,342,531.78 29,903,289.16
instrument investments
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The amount incurred Amount incurred in
Item
in current period last period
(II) Other comprehensive income that will be reclassified into profit
3,472,962.83 -279,600.49
or loss
Where: Translation difference of foreign currency financial
3,472,962.83 -279,600.49
statements
After-tax net amount of other comprehensive incomes attributable to
0.00 0.00
the minority shareholders
Total 53,815,494.61 29,623,688.67
78. Cash flow statement items
(1) Other cash received related to operating activities
√ Applicable □ Not applicable
Unit: CNY
The amount incurred in current
Item period Amount incurred in last period
Interest income 268,525,515.81 214,805,909.58
Government subsidies 118,256,793.83 227,947,955.82
Deposit and business deposit 71,784,879.33 27,714,279.54
Other 29,890,883.89 36,074,731.97
Total 488,458,072.86 506,542,876.91
(2) Other cash paid relating to operating activities
√ Applicable □ Not applicable
Unit: CNY
The amount incurred in current Amount incurred in last
Item period period
Advertising expenses paid in cash 643,925,038.82 507,928,041.71
Other sales expenses other than advertising
expenses paid in cash 237,226,035.92 243,070,146.64
Management expenses paid in cash 333,854,765.45 256,092,787.83
Other 503,671,400.01 411,784,920.83
Total 1,718,677,240.20 1,418,875,897.01
(3) Other cash received related to investment activities
√ Applicable □ Not applicable
Unit: CNY
The amount incurred in current
Item period Amount incurred in last period
Red Star Macalline Pazhou Project
Purchase Deposit 91,497,876.71 43,398,342.05
Total 91,497,876.71 43,398,342.05
(4) Other cash paid relating to investment activities
√ Applicable □ Not applicable
Unit: CNY
The amount incurred in current Amount incurred in last
Item period period
Refund of Red Star Macalline Pazhou Project
Purchase Deposit 100,000,000.00
Total 100,000,000.00
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2022 Annual Report
(5) Other cash received related to financing activities
√ Applicable □ Not applicable
Unit: CNY
Item The amount incurred in current Amount incurred in last period
period
Financing margin 3,218,348.22 481,821.60
Total 3,218,348.22 481,821.60
(6) Other cash paid in connection with financing activities
√ Applicable □ Not applicable
Unit: CNY
The amount incurred in current
Item period Amount incurred in last period
Financing margin 139,824,778.24 86,367,619.17
Payment of fees related to convertible
bond issuance 4,128,432.17 0.00
Repayment of principal and interest on
lease liabilities 53,357,033.74 14,614,303.08
Total 197,310,244.15 100,981,922.25
79. Supplementary information of cash flow statement
(1) Supplementary information of cash flow statement
√ Applicable □ Not applicable
Unit: CNY
Amount of previous
Further information Amount of current period period
1. Reconciliation of net profit to cash flows from operating activities:
Net profit 2,682,513,064.15 2,664,153,384.02
Plus: provision for asset impairment 0.00
Losses from credit impairment 99,787,553.98 108,305,951.75
Depreciation of fixed assets, depletion of oil and gas assets,
648,451,950.83 592,561,143.97
and depreciation of productive biological assets
Depreciation of right of use assets 47,986,840.11 14,381,858.44
Depreciation and amortization of investment real estate 55,102,063.75 881,624.61
Amortization of intangible assets 39,254,700.85 54,429,214.59
Amortisation of long-term unamortized expense 63,913,121.72 48,602,717.91
Loss from disposal of fixed assets, intangible assets and
267,179.73 6,782,217.94
other long-term assets ("-" for gains)
Fixed asset retirement loss (gains expressed with "-") 8,750,883.65 14,141,159.49
Loss on change in fair value (gains expressed with "-") 33,764,275.51 -52,292,566.27
Financial cost (gains expressed with "-") 130,315,284.45 144,219,819.00
Investment losses (gains expressed with "-") -23,426,338.55 -20,576,163.13
Decrease of deferred income tax assets ("-" for increases) -20,325,627.08 -25,258,212.43
Increases of deferred income tax liabilities ("-" for gains) 21,700,904.56 -6,024,353.35
Decrease of inventory ("-" for increases) 49,491,682.91 -654,467,996.69
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2022 Annual Report
Further information Amount of current period Amount of previous
period
Decreases of operational receivables ("-" for increases) -525,861,893.35 -700,134,584.78
Increases of operating payables ("-" for decreases) -893,864,603.43 1,862,704,145.36
Other -6,840,272.67 -18,178,146.44
Incentive expenses of restricted stock -1,220,603.57 11,735,456.40
Net cash flows from operating activities 2,409,760,167.55 4,045,966,670.39
2. Major investment and financial activities not involving cash:
Conversion of debt into capital 0.00 0.00
Convertible corporate bonds due within one year 0.00 0.00
Financing leased fixed assets 0.00 0.00
3. Changes of cash and cash equivalents:
Closing balance of cash 3,630,430,094.53 5,341,817,438.33
Less: opening balance of cash 5,341,817,438.33 3,558,468,311.68
Plus: closing balance of cash equivalents 0.00 0.00
Less: opening balance of cash equivalents 0.00 0.00
Net increase in cash and cash equivalents -1,711,387,343.80 1,783,349,126.65
(2) Net cash paid for acquiring subsidiaries in the current period
√ Applicable □ Not applicable
Unit: EUR
FORMER S.R.L. Amount
Cash or cash equivalents paid for business merger in the current period 4,632,499.38
Where: FORMER S.R.L. 4,632,499.38
Less: Cash and cash equivalents held by the Company on the date of
purchase 13,275.56
Where: FORMER S.R.L. 13,275.56
Cash or cash equivalents paid for business combinations in previous periods 0.00
Net cash paid for acquiring subsidiaries 4,619,223.82
(3) Net cash received from disposal of subsidiaries in the current period
□ Applicable √ Not applicable
(4) Formation of cash and cash equivalents
√ Applicable □ Not applicable
Unit: CNY
Item Ending balance Beginning balance
I. Cash 3,630,430,094.53 5,341,817,438.33
Including: cash in hand 12,648.66 7,433.29
Bank deposit that can be used for payment at any
time 3,613,957,350.36 5,312,904,437.86
Other monetary fund available for payment at any
time 16,460,095.51 28,905,567.18
Available fund that is deposited into the Central
Bank for payment 0.00 0.00
Interbank deposits 0.00 0.00
Interbank loans 0.00 0.00
II. Cash equivalents 0.00 0.00
Including: investment in bonds to be matured in 3
months 0.00 0.00
III. Balance of cash and cash equivalents at the end of
the period 3,630,430,094.53 5,341,817,438.33
Including: restricted cash and cash equivalents used by
0.00 0.00
parent company or subsidiaries of the group
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2022 Annual Report
Other descriptions
□ Applicable √ Not applicable
80. Notes to items in the statement of changes in owner's equity
Explain the names and adjusted amounts of "other" items that have been adjusted to the ending balance of the previous
year:
□ Applicable √ Not applicable
81. Assets with restricted ownership or use right
√ Applicable □ Not applicable
Unit: CNY
Item Ending book value Reasons for restriction
Cash and bank Bank acceptance bill margin, letter of credit margin, letter of
balances 312,566,682.72 guarantee margin, external guarantee margin, court ruling to freeze,
restricted funds used by e-commerce platforms
Trading financial There is a redemption period and a closure period for financial
803,050,958.90
assets products
Fixed assets 49,699,840.67 There is mortgage guarantee for house property
Intangible assets 39,497,528.36 There is mortgage guarantee for intangible assets
Notes receivable 39,114,681.94 Pledged for business needs
Total 1,243,929,692.59 /
82. Foreign currency monetary items
(1) Foreign currency monetary items
√ Applicable □ Not applicable
Closing foreign Converted exchange Closing balance
Item
currency balance rate converted into CNY
Cash and bank balances - -
Where: USD 66,503,492.26 6.9646 463,170,222.20
EUR 264,704.49 7.4229 1,964,874.95
HKD 147,748.55 0.8933 131,983.78
AUD 571,899.28 4.7138 2,695,818.83
Accounts receivable - -
Where: USD 2,369,413.15 6.9646 16,502,014.85
EUR 40,727.75 7.4229 302,318.01
GBP 5,980.01 8.3941 50,196.80
AUD 56,946.86 4.7138 268,436.10
NZD 9,543.60 4.4162 42,146.45
Other receivables - -
Where: EUR 113,321.16 7.4229 841,171.64
AUD 7,299.00 4.7138 34,406.03
Accounts payable
Where: USD 4,298.56 6.9646 29,937.75
EUR 865,208.81 7.4229 6,422,358.48
Other payables - -
Where: EUR 27,549.53 7.4229 204,497.41
HKD 46,500.00 0.8933 41,538.45
Non-current liabilities due within
one year
Where: EUR 251,155.87 7.42 1,864,304.91
Long-term loans - -
Where: EUR 690,029.58 7.4229 5,122,020.57
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(2) Description of overseas operating entities, including for important overseas operating entities, disclosure of
their main overseas operating location, recording currency, and selection basis. Reasons for changes in the
recording currency should also be disclosed
√ Applicable □ Not applicable
Name of Subsidiaries Main business place Functional currency
Oppein (Hong Kong) International Trade Company Limited Hong Kong HK$
OPPEIN ITALY ACADEMY S. R.L. Italy EUR
FORMER S.R.L. Italy EUR
The above-mentioned subsidiaries have chosen to use the main local circulating currency as their accounting base
currency, and there have been no changes during the reporting period.
When preparing consolidated financial statements, the financial statements of overseas operating entities of the
enterprise are translated into the parent company's bookkeeping currency, and the conversion exchange rate used is listed
as follows:
Assets and liability items on the Income and expense items in
Item Paid-in capital
balance sheet the income statement
Converted
Spot exchange rate on the balance Approximate exchange rate Historical spot exchange
exchange
sheet date on transaction date rate
rate
83. Hedging
□ Applicable √ Not applicable
84. Government subsidies
(1) Information of government subsidies
√ Applicable □ Not applicable
Unit: CNY
Amount included in
Classification Amount Listed items current profits and
losses
Assets-related 61,519,100.00 Deferred income, other income 49,517,936.37
Other income, non-operating
Earning-related 56,737,693.83 income 56,737,693.83
(2) Return of government subsidies
√ Applicable □ Not applicable
Unit: CNY
Item Amount Reasons
Guangzhou City Development Refund of pre allocated bonus funds,
Housing Rental Market Special Fund and subsequent application for
13,592,407.50
Award and Supplement Project allocation according to payment
nodes
85. Other
□ Applicable √ Not applicable
VIII. Change of Merger range
1. Business merger not under common control
√ Applicable □ Not applicable
(1) Business merger under the different control in the current period
√ Applicable □ Not applicable
Unit: EUR
Name of Time point Cost for Percentage Mea Acquisition Determination Revenu Net profit of
the acquiree for equity equity of acquired ns date basis for e of the the acquiree
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acquisition acquisition equity (%) for acquisition date acquire from the
equit e from acquisition
y the date to the
acqui acquisit end of term
sition ion date
to the
end of
term
FORMER May 10, 4,632,499.38 100.00 Purc May 10, ① The equity -381,597.54
S. R. L. 2022 hase 2022 transfer
agreement has
been signed; ②
The equity
transfer payment
has been paid; ③
The industrial
and commercial
change
registration has
been completed;
(2) Merger costs and goodwill
□ Applicable □ Not applicable
Unit: EUR
Merger costs FORMER S.R.L.
--Cash 4,632,499.38
-- Fair value of non-cash assets
-- Fair value of debt issued or assumed
-- Fair value of equity securities issued
-- Fair value of contingent consideration
-- Fair value of equity(held prior to acquisition date) on
acquisition date
-- Other
Merger cost in total 4,632,499.38
Less: fair value shares of obtained net identifiable assets 4,632,499.38
The amount of goodwill/merger cost less than the fair value
share of identifiable net assets obtained
(3) The identifiable assets and liabilities of the acquiree on acquisition date
√ Applicable □ Not applicable
Unit: EUR
FORMER S.R.L.
Fair value on the acquisition date Book value at the acquisition date
Asset: 6,796,625.00 6,796,625.00
Cash and bank balances 13,275.56 13,275.56
Accounts receivable 40,633.91 40,633.91
Inventories 50,000.00 50,000.00
Fixed assets 4,150,145.09 4,150,145.09
Intangible assets 1,935,821.39 1,935,821.39
Other receivables 97,150.00 97,150.00
Other current assets 1,058.00 1,058.00
Deferred income tax assets 508,541.05 508,541.05
Liabilities: 2,164,125.62 2,164,125.62
Long-term loans 1,044,516.38 1,044,516.38
Payables 919,072.58 919,072.58
Deferred income tax
0.00 0.00
liabilities
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Taxes payable 200,536.66 200,536.66
Net assets 4,632,499.38 4,632,499.38
Minus: minority interest 0.00 0.00
Acquired net asset 4,632,499.38 4,632,499.38
(4) Gains or losses arising from remeasuring equity held before the purchase date at fair value
Is there any transaction that achieves business merger through multiple transactions and obtains control during the
reporting period
□ Applicable √ Not applicable
(5) Description on the inability to reasonably determine the merger consideration or the fair value of identifiable
assets and liabilities of the acquiree on the acquisition date or at the end of the merger period
□ Applicable √ Not applicable
(6) Other descriptions:
□ Applicable √ Not applicable
2. Business merger under common control
□ Applicable √ Not applicable
3. Counter purchase
□ Applicable √ Not applicable
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4. Disposal of subsidiaries
Is there a situation where a single disposal of investment in a subsidiary results in loss of control
□ Applicable √ Not applicable
Other descriptions
□ Applicable √ Not applicable
5. Changes in the scope of consolidation due to other reasons
Description of changes in the scope of consolidation caused by other reasons (for example, establishing new subsidiaries, liquidating subsidiaries, etc.) and their related situations:
√ Applicable □ Not applicable
Subsidiaries acquired through establishment or investment during the reporting period
Actual Consoli
Registered contribution dated
Date of Registration Businessnatur capital at the end of Shareholdi Voting rights financi
Name of company
Establishment place e (CNY the period ng (%) ratio (%) al
'0,000) (CNY stateme
'0,000) nts
Dongguan Oppein Integration Home Sales Co., Consoli
March 4, 2022 Dongguan City Sales 200.00 110.00 70 70
Ltd. dation
Dongguan Oppein Integration Home Design Technical Consoli
March 4, 2022 Dongguan City 100.00 30.00 70 70
Co., Ltd. service dation
Jiangsu Oppein Overall Custom Home Co., Consoli
July 14, 2022 Wuxi City Sales 1,000.00 70.00 100 100
Ltd. dation
Chengdu Shuangliu Oppein Loading and Residential Consoli
January 11, 2022 Chengdu City 5.00
Unloading Service Co., Ltd. services 100.00 100 100 dation
Hangzhou Oppein Large Home Furnishing Co., Consoli
August 16, 2022 Hangzhou City Sales 480.00
Ltd. 800.00 80 80 dation
Chengdu Oppein Creative Large Home Consoli
May 25, 2022 Chengdu City Sales 800.00 568.00 71 71
Furnishing Co., Ltd. dation
Chongqing Oppein Large Home Furnishing Chongqing Consoli
October 21, 2022 Sales 130.00
Co., Ltd. Municipality 600.00 80 80 dation
Handan Oppein Large Home Furnishing Sales Consoli
June 17, 2022 Handan City Sales 600.00 468.00 78 78
Co., Ltd. dation
Luzhou Oppein Large Home Furnishing Co., Consoli
October 20, 2022 Luzhou City Sales 700.00 195.00 65 65
Ltd. dation
Nanning Oppein Large Home Furnishing Co., July 20, 2022 Nanning City Sales 600.00 432.00 72 72 Consoli
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Actual Consoli
Registered contribution dated
Date of Registration Businessnatur capital at the end of Shareholdi Voting rights financi
Name of company
Establishment place e (CNY the period ng (%) ratio (%) al
'0,000) (CNY stateme
'0,000) nts
Ltd. dation
Guangzhou Huadu Oppein Creative Home Guangzhou Consoli
July 14, 2022 Sales 600.00 370.00 70 70
Furnishing Co., Ltd. City dation
Shenzhen Oppein Creative Home Furnishing Consoli
July 15, 2022 Shenzhen City Sales 600.00 330.00 55 55
Co., Ltd. dation
Various newly established subsidiaries of the Company will be included in the scope of financial statement consolidation from the date of their establishment.
6. Other
□ Applicable √ Not applicable
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IX. Interest in other entities
1. Equities in Subsidiaries
(1) Composition of the enterprise group
√ Applicable □ Not applicable
Main Acquisitionmet
Registration Businessnatur Shareholding (%)
Name of Subsidiaries business hod
place e
place Direct Indirect
Establishment
Tianjin Oppein Integration Manufacturin
Tianjin Tianjin 100 of capital
Home Co., Ltd. g
contribution
Establishment
Guangzhou Oppein Guangz Guangzhou Manufacturin
70 30 of capital
Integration Home Co., Ltd. hou City g
contribution
Dongguan Oppein Establishment
Donggu Dongguan
Integration Home Sales Co., Sales 70 of capital
an City
Ltd. contribution
Dongguan Oppein Establishment
Donggu Dongguan Technical
Integration Home Design 70 of capital
an City service
Co., Ltd. contribution
A business
combination
Guangzhou Oppein Sanitary Guangz Guangzhou Manufacturin involving
100
Ware Co., Ltd. hou City g enterprises
under common
control
Establishment
Guangzhou Ouboni Guangz Guangzhou Manufacturin
100 of capital
Integration Home Co., Ltd. hou City g
contribution
Establishment
Oppein (Guangzhou) Soft Guangz Guangzhou Manufacturin
100 of capital
Decoration Design Co., Ltd. hou City g
contribution
Oppein (Hong Kong) Establishment
Hong
International Trade Hong Kong Trade 100 of capital
Kong
Company Limited contribution
A business
combination
involving
FORMERS.R.L. Italy Italy Sales 100
enterprises not
under common
control
Establishment
Wuxi (Jiangsu) Oppein Manufacturin
Wuxi Wuxi City 100 of capital
Integration Home Co., Ltd. g
contribution
Establishment
Jiangsu Oppein Overall
Wuxi Wuxi City Sales 100 of capital
Custom Home Co., Ltd.
contribution
Establishment
Qingyuan Oppein Integration Qingyua Qingyuan Manufacturin
100 of capital
Home Co., Ltd. n City g
contribution
Establishment
Guangzhou Oppolia Smart Guangz Guangzhou
Sales 100 of capital
Home Co., Ltd. hou City
contribution
Guangzhou Owell Establishment
Guangz Guangzhou
Decoration Material Co., Sales 100 of capital
hou City
Ltd. contribution
Establishment
Wuhan Oppein Mingda Manufacturin
Wuhan Wuhan City 100 of capital
Home Products Co., Ltd. g
contribution
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Establishment
Xi'an Oulian Home Products Manufacturin
Xi'an Xi'an City 100 of capital
Co., Ltd. g
contribution
Establishment
Oppein United (Tianjin)
Tianjin Tianjin City Sales 100 of capital
Home Sales Co., Ltd.
contribution
Establishment
Guangzhou Oppein Creative Guangz Guangzhou Technical
100 of capital
Home Design Co., Ltd. hou City service
contribution
Technical Establishment
OPPEINITALYACADEMY
Italy Italy services and 100 of capital
S.R.L.
trade contribution
Establishment
Chengdu Oppein Smart Chengd Manufacturin
Chengdu City 100 of capital
Home Co., Ltd. u g
contribution
Establishment
Nanchang Oppein Home Nanchan Nanchang Manufacturin
100 of capital
Products Co., Ltd. g City g
contribution
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Establishment
Kunming Oppolia Smart Kunmin Kunming Manufacturin
100 of capital
Home Products Co., Ltd. g City g
contribution
Chengdu Shuangliu Oppein Establishment
Chengd Residential
Loading and Unloading Chengdu City 100 of capital
u services
Service Co., Ltd. contribution
Establishment
Meizhou Oppein Investment Commercial
Meizhou Meizhou City 100 of capital
Industry Co., Ltd. services
contribution
Establishment
Meizhou Zheling Investment Commercial
Meizhou Meizhou City 100 of capital
Industry Co., Ltd. services
contribution
Establishment
Guangzhou Oppein Home Guangz Guangzhou Residential
100 of capital
Design Institute Co., Ltd. hou City services
contribution
Establishment
Zhuhai Oppein Creative Residential
Zhuhai Zhuhai City 100 of capital
Home Design Co., Ltd. services
contribution
Establishment
Hangzhou Oppein Large Hangzh Hangzhou
Sales 80 of capital
Home Furnishing Co., Ltd. ou City
contribution
Chengdu Oppein Creative Establishment
Chengd
Large Home Furnishing Co., Chengdu City Sales 71 of capital
u
Ltd. contribution
Establishment
Chongqing Oppein Large Chongqi Chongqing
Sales 80 of capital
Home Furnishing Co., Ltd. ng Municipality
contribution
Establishment
Handan Oppein Large Home
Handan Handan City Sales 78 of capital
Furnishing Sales Co., Ltd.
contribution
Establishment
Luzhou Oppein Large Home
Luzhou Luzhou City Sales 65 of capital
Furnishing Co., Ltd.
contribution
Establishment
Nanning Oppein Large
Nanning Nanning City Sales 72 of capital
Home Furnishing Co., Ltd.
contribution
Guangzhou Huadu Oppein Establishment
Guangz Guangzhou
Creative Home Furnishing Sales 70 of capital
hou City
Co., Ltd. contribution
Establishment
Shenzhen Oppein Creative Shenzhe Shenzhen
Sales 55 of capital
Home Furnishing Co., Ltd. n City
contribution
Xingpai Commercial Establishment
Guangz Guangzhou Commercial
Property Management 68 of capital
hou City services
(Guangzhou) Co., Ltd. contribution
Establishment
Wuhan Oppein Smart Home Manufacturin
Wuhan Wuhan City 100 of capital
Co., Ltd. g
contribution
Other descriptions
1. The Company directly holds 70% of the equity of Guangzhou Integration, and indirectly holds 30% of the equity
of Guangzhou Integration through Oppein (Hong Kong), resulting in a voting rights ratio of 100%.
2. The Company indirectly holds 70% equity in Dongguan Oppein Integration Home Sales Co., Ltd. and Dongguan
Oppein Integration Home Design Co., Ltd. through its subsidiary Guangzhou Integration; indirectly holds 100% equity
in FORMERS.R.L. through its subsidiary Oppein (Hong Kong); indirectly holds 100% equity of Jiangsu Oppein Overall
Custom Home Co., Ltd. through its subsidiary Wuxi Oppein; indirectly holds 100% equity of Guangzhou Oppein Smart
Home Co., Ltd. and Guangzhou Owell Decoration Material Co., Ltd. through its subsidiary Qingyuan Oppein, a
subsidiary of Guangzhou Oppein Integration Home Co., Ltd.; indirectly holds 100% equity of Nanchang Oupai Home
Products Co., Ltd. and Chengdu Shuangliu Oppein Loading and Unloading Service Co., Ltd. through its subsidiary
Chengdu Oppein; indirectly holds 100% equity of Meizhou Zheling Investment Industry Co., Ltd. through its subsidiary
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Meizhou Oppein; and indirectly holds 80% equity of Hangzhou Oppein Large Home Furnishing Co., Ltd., 71% equity of
Chengdu Oppein Creative Large Home Furnishing Co., Ltd., 80% equity of Chongqing Oppein Large Home Furnishing
Co., Ltd., 78% equity of Handan Oppein Large Home Furnishing Sales Co., Ltd., 65% equity of Luzhou Oppein Large
Home Furnishing Co., Ltd., 72% equity of Nanning Oppein Large Home Furnishing Co., Ltd., 70% equity of Guangzhou
Huadu Oppein Creative Home Furnishing Co., Ltd., and 55% equity of Shenzhen Oppein Creative Home Furnishing Co.,
Ltd. through its subsidiary Zhuhai Creative. Wuhan Oppein Mingda Home Products Co., Ltd. and Xi'an Oulian Home
Products Co., Ltd. are subsidiaries of Guangzhou Owell Decoration Material Co., Ltd. Kunming Oppolia Smart Home
Products Co., Ltd., originally a subsidiary of Guangzhou Owell Decoration Material Co., Ltd., transferred 100% of its
equity to Chengdu Oppein Smart Home Co., Ltd., a wholly-owned subsidiary of Oppein Home in 2022.
(2) Important partly-owned subsidiaries
□ Applicable √ Not applicable
(3) Main financial information of important non-wholly-owned subsidiaries
□ Applicable √ Not applicable
(4) Significant restrictions on the use of enterprise group assets and the repayment of enterprise group debts
□ Applicable √ Not applicable
(5) Financial or other support provided to structured entities included in the scope of consolidated financial
statements
□ Applicable √ Not applicable
Other descriptions
□ Applicable √ Not applicable
2. Transactions where the share of owner's equity in a subsidiary changes and the subsidiary is still
controlled
□ Applicable √ Not applicable
3. Equity in joint ventures or associates
√ Applicable □ Not applicable
(1) Important joint ventures or associates
□ Applicable √ Not applicable
(2) Main financial information of important joint ventures
□ Applicable √ Not applicable
(3) Major financial information of the important associated enterprise
□ Applicable √ Not applicable
(4) Summary financial information of unimportant joint ventures and associated enterprises
√ Applicable □ Not applicable
Unit: CNY
Closing balance/current amount Opening balance/amount incurred in
incurred the previous period
Joint venture:
Total investment book value 0.00 12,328,756.91
The total number of the following items calculated based on shareholding ratio
-- Net profit -8,828,756.91 -2,258,529.79
-- Other comprehensive income
--Total comprehensive incomes -8,828,756.91 -2,258,529.79
Associated enterprise:
Total investment book value 10,518,308.44 3,214,610.20
The total number of the following items calculated based on shareholding ratio
-- Net profit 7,303,698.24 -4,203,115.87
-- Other comprehensive income
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2022 Annual Report
--Total comprehensive incomes 7,303,698.24 -4,203,115.87
(5) Description of significant limitations on the ability of joint ventures or associated enterprises to transfer funds
to the company
□ Applicable √ Not applicable
(6) Excess losses incurred by joint ventures or associated enterprises
√ Applicable □ Not applicable
Unit: CNY
Accumulated
unrecognized Unrecognized losses in the Accumulated
Name of joint venture or
losses current period (or net profit unrecognized losses at the
associated enterprise
accumulated in the shared in the current period) end of this period
previous period
Guangzhou Red Star Macalline 4,851,707.11 4,851,707.11
Expo Home Plaza Co., Ltd.
(7) Unrecognized commitments related to joint venture investments
□ Applicable √ Not applicable
(8) Contingent liabilities related to investments in joint ventures or associates
□ Applicable √ Not applicable
4. Important joint operations
□ Applicable √ Not applicable
5. Equity in structured entities not included in the scope of consolidated financial statements
Description of structured entities not included in the scope of consolidated financial statements:
□ Applicable √ Not applicable
6. Others
□ Applicable √ Not applicable
X. Risks related to financial instruments
√ Applicable □ Not applicable
The Company faces various risks related to financial instruments during its operation, mainly including credit risk,
market risk, and liquidity risk. The management team of the Company is fully responsible for determining risk
management objectives and policies, and assumes ultimate responsibility for risk management objectives and policies.
The overall goal of risk management is to develop risk management policies that minimize risks as much as possible
without excessively affecting the Company's competitiveness and resilience.
1. Credit risk
The Company's bank deposits are mainly deposited in state-owned banks and other large and medium-sized listed
banks. It is expected that there will be no significant credit risk in the Company's bank deposits.
The Company has established a management system for accounts receivable and product sales, which clearly
stipulates pricing principles, credit standards and distribution conditions, payment methods, and the responsibilities and
authorities of institutions and personnel involved in sales business. As of December 31, 2022, the book value of accounts
receivable was CNY 1,356,804,900, accounting for 4.74% of the total assets.
During the reporting period, the Company continuously strengthened its management of accounts receivable, mainly
consisting of engineering accounts receivable from bulk business customers. The installation and after-sales service of
bulk business have been transferred to dealers, and after linking the payment collection with the dealer's business deposit,
efforts have been increased to collect accounts receivable, to ensure that the overall credit risk of the Company is within
a controllable range.
2. Market risk
(1) Interest rate risk
Fixed interest rate financial instruments:
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2022 Annual Report
Unit: CNY '0,000
Ending balance Beginning balance
Item Effective
Amount Effective interest rate Amount
interest rate
Financial assets:
Cash and bank
1.70% 79,500.00 0.66% 2,500.00USD
balances
Cash and bank
3.80% 115,000.00 0.75% 1,300.00USD
balances
Cash and bank
3.85% 265,000.00 3.65% 60,000.00
balances
Cash and bank
4.83% 5,500.00USD 3.70% 190,000.00
balances
Cash and bank
5.26% 700.00USD 4.00% 45,000.00
balances
Cash and bank
4.18% 5,000.00
balances
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2022 Annual Report
Ending balance Beginning balance
Item Effective
Amount Effective interest rate Amount
interest rate
Non-current assets
3.57% 40,000.00
due within one year
Non-current assets
3.62% 10,000.00
due within one year
Non-current assets
3.65% 35,000.00
due within one year
Other non-current
assets 3.20% 10,000.00 2.75% 50,000.00
Other non-current
assets 3.25% 90,000.00 3.57% 40,000.00
Other non-current
3.298% 30,000.00 3.62% 10,000.00
assets
Other non-current
assets 3.40% 60,000.00
Other non-current
assets 3.45% 20,000.00
Other non-current
assets 3.60% 30,000.00 3.65% 35,000.00
Other non-current
assets 3.80% 20,000.00 3.80% 20,000.00
Other non-current
3.85% 110,000.00 3.85% 30,000.00
assets
Total 957,680.52 509,227.66
Financial liabilities:
Short-term loans 1.45% 60,000.00 0.94% 10,000.00
Short-term loans 1.50% 40,000.00 1.11% 9,500.00
Short-term loans 1.55% 20,000.00 1.30% 20,400.00
Short-term loans 1.60% 32,000.00 1.34% 22,000.00
Short-term loans 1.65% 15,000.00 2.42% 5,900.00
Short-term loans 1.70% 15,000.00 2.60% 9,600.00
Short-term loans 1.75% 56,500.00 2.80% 45,000.00
Short-term loans 1.80% 52,000.00 2.82% 15,000.00
Short-term loans 1.85% 7,000.00 3.06% 15,012.75
Short-term loans 2.25% 20,000.00 3.35% 79,557.14
Short-term loans 2.28% 25,000.00 4.40% 384.85
Short-term loans 2.30% 32,000.00
Short-term loans 2.50% 100.00 4.50% 398.42
Short-term loans 2.85% 65,445.57 4.80% 4,910.35
Short-term loans 2.95% 4,503.85 5.90% 1,249.12
Short-term loans 3.10% 10,008.61
Short-term loans 4.50% 118.64
Short-term loans 4.60% 1,271.98
Short-term loans 4.80% 2,265.86
Non-current
liabilities due within 3.30% 20,018.33
one year
Non-current
liabilities due within 5.45% 17.97EUR
one year
Non-current
liabilities due within 6.12% 7.14EUR
one year
Long-term loans 6.12% 69.00EUR
Total 478,931.41 238,912.63
Floating rate financial instruments:
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2022 Annual Report
Unit: CNY '0,000
Ending balance Beginning balance
Item Effective interest
Amount Effective interest rate Amount
rate
Financial assets:
Trading financial assets 1.65%-2.90% 30,007.15 1.52%-3.80% 10,132.22
Trading financial assets 1.80%-3.55% 50,297.95 1.50%-3.25% 5.00
Closed end private
Trading financial assets equity financing 81,978.03
Open net worth wealth
Trading financial assets management 75,620.24
Total 80,305.10 167,735.49
Financial liabilities:
Debentures payable 0.30%-2.00% 160,170.18
Total 160,170.18
The finance department of the company continuously monitors the group's interest rate level. An increase in interest
rates will increase the cost of new interest bearing debt and affect the level of financial returns on idle funds of the
Company. The management will make timely adjustments based on the latest market conditions.
(2) Exchange rate risks
The amount of foreign currency financial assets and foreign currency financial liabilities converted into CNY of the
Company is listed as follows:
Unit: CNY '0,000
Ending balance
Item
USD HK$ EUR AUD GBP NZD Total
Foreign currency
financial assets
Cash and bank
balances 46,317.02 13.20 196.49 269.58 46,796.29
Accounts
receivable 1,650.20 30.23 26.84 5.02 4.21 1,716.50
Other accounts
receivable 84.12 3.44 87.56
Total 47,967.22 13.20 310.84 299.86 5.02 4.21 48,600.35
Foreign currency
financial
liabilities
Accounts
payable 2.99 642.24 645.23
Other payables 4.15 20.45 24.60
Non-current
liabilities due 186.43 186.43
within one year
Long-term loans 512.20 512.20
Total 2.99 4.15 1,361.32 1,368.46
(Continued)
Beginning balance
Item
USD HK$ EUR AUD GBP NZD Total
Foreign currency
financial assets
Cash and bank
44,726.99 8.42 234.97 354.35 45,324.73
balances
Accounts
54.15 4.16 58.31
receivable
Other accounts 25.47 3.37 28.84
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2022 Annual Report
receivable
Total 44,726.99 8.42 314.59 357.72 45,411.88
Foreign currency
financial
liabilities
Accounts payable 2.74 683.22 685.96
Notes payable 803.62 803.62
Other payables 24.48 24.48
Total 2.74 1,511.32 1,514.06
The Company's board and functional hardware are mainly imported from abroad, and payment is generally made
through letter of credit. The Company's products are exported in small quantities to foreign countries, and import and
export transactions are settled in foreign currencies. The impact of exchange rate fluctuations on the Company's operating
results is limited. As of December 31, 2022, the main foreign currency assets will increase or decrease by CNY
23,982,114.96 if the CNY depreciates or appreciates by 5% against the USD while all other variables remain unchanged;
and the Company's assets will increase or decrease by CNY 525,240.84 if the CNY appreciates or depreciates by 5%
against the EUR.
(3) Other price risks
The main raw materials required for the Company's production are sheet metal, functional hardware, and supporting
electrical appliances. When the price of raw materials increases, the Company can increase the selling price of the product,
and when it decreases, the Company will lower the selling price of the product. Therefore, with the determination of
production capacity and sales volume, there is a risk that the Company's operating income may fluctuate due to
fluctuations in the prices of major raw materials.
3. Liquidity risk
The various financial liabilities of the Company are presented as undiscounted contract cash flows at maturity as
follows:
Unit: CNY '0,000
Ending balance Beginning balance
Item
within 1 year More than 1 year within 1 year More than 1 year
Short-term loans 458,469.50 238,912.62
Notes payable 7,036.61 13,995.18
Accounts payable 172,769.80 18,165.59 198,305.08 3,519.81
Other payables 39,190.94 44,862.22 52,559.74 14,224.37
Non-current liabilities
20,204.76
due within one year
Long-term loans 512.20
Total 697,671.61 63,540.01 503,772.62 17,744.18
As of December 31, 2022, the balance of various liabilities to be repaid within the next year was CNY 6,976,716,100;
as of December 31, 2022, the monetary funds that can be withdrawn at any time was CNY 3,631,141,100, and the fixed
deposit was CNY 8,876,805,200, indicating a relatively low liquidity risk.
XI. Disclosure of fair value
1. Ending fair value of assets and liabilities measured at fair value
√ Applicable □ Not applicable
Unit: CNY
Fair value at the end of the period
Third level fair
Item First level fair value Second level fair
value Total
measurement value measurement
measurement
I. Continuous fair value
measurement
(I) Trading financial 803,050,958.90 803,050,958.90
assets
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2022 Annual Report
Fair value at the end of the period
Third level fair
Item First level fair value Second level fair
value Total
measurement value measurement
measurement
1. Financial assets
measured at fair value
with changes included in
current profits and losses
(1) Debt instrument
investment
(2) Equity instrument
investment
(3) Derivative financial
assets
(4) Bank financial
products 803,050,958.90 803,050,958.90
2. Financial assets
designated at fair value
through profits or losses
(1) Debt instrument
investment
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2022 Annual Report
Fair value at the end of the period
Third level fair
Item First level fair value Second level fair
value Total
measurement value measurement
measurement
(2) Equity instrument
investment
(II) Other debt
investments
(III) Other equity
248,779,462.00 113,846,741.27 6,608,684.78 369,234,888.05
instrument investments
(IV) Investment
properties
1. Land use rights for
lease
2. Leased buildings
3. Land use rights held
and prepared for transfer
after appreciation
(V) Biological assets
1. Consumable biological
assets
2. Productive biological
assets
(VI) Other non-current
17,968,837.07 1,000,000.00 18,968,837.07
financial assets
Total assets
continuously measured 248,779,462.00 934,866,537.24 7,608,684.78 1,191,254,684.02
at fair value
(VI) Trading financial
liabilities
1. Financial liabilities
measured at fair value
with changes included in
current profits and losses
Where: Trading bonds
issued
Derivative
financial
liabilities
Other
2. Financial liabilities
designated at fair value
through profits or losses
Total liabilities
continuously measured
at fair value
II. Continuous fair
value measurement
(I) Held-for-sale assets
Total assets measured
at fair value non-
continuously
Total liabilities
measured at fair value
non-continuously
2. Basis for determining the market value of continuous and non-continuous first level fair value measurement
items
√ Applicable □ Not applicable
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2022 Annual Report
The Company holds 1,975,600 shares of Keeson Technology Corporation Limited, with the fair value at the end of
the period determined to be CNY 23,806,462.00 based on the closing price of CNY 12.05 in the securities market on
December 30, 2022 (December 31, 2022 is a non-trading day); the Company holds 1.5 million shares of Harbin Sayyas
Windows Co., Ltd., with the fair value at the end of the period determined to be CNY 46,125,000.00 based on the closing
price of CNY 30.75 in the securities market on December 30, 2022; and the Company holds 5.4 million shares of DeRucci
Healthy Sleep Co., Ltd., with the fair value at the end of the period determined to be CNY 178,848,000.00 based on the
closing price of CNY 33.12 in the securities market on December 30, 2022.
3. Qualitative and quantitative information on valuation techniques and important parameters used for
continuous and non-continuous second level fair value measurement items
√ Applicable □ Not applicable
1. Qualitative and quantitative information on valuation techniques and important parameters used
Important parameters
Fair value at the end of Valuation
Item Qualitative information Quantitative
the period techniques
information
Income Contract or comparable
Trading financial assets 803,050,958.90 Rate
approach expected return
Investment in other 113,846,741.27 Market Recent financing prices P/E ratio
equity instruments approach
Other non-current Market value of listed Closing price of
Market
financial assets 17,968,837.07 companies/recent securities market
approach
financing prices /P/E ratio/net assets
2. The Company holds CNY 803,050,958.90 of floating income financial products at the end of period, with a yield linked
to fluctuations in foreign currency exchange rates. At the end of the period, according to the contract agreement, the
applicable rate of return is determined based on the volatility of the linked target, and the fair value at the end of the
period is calculated.
3. The Company holds 1.90% of the shares of Guangdong Deerma Technology Co., Ltd. At the end of the period, the
value of the target company's equity held by the Company is calculated based on the P/E ratio of the most recent equity
transfer of the investee and the net profit of the invested unit in 2022.
4. The Company holds 10% of the shares of the Beijing Easyhome Joint Investment Management Center (L.P.) fund. The
companies invested by the partnership include both listed and unlisted companies, and the value of the shares invested by
listed companies is recognized based on the closing price of the securities market on December 31, 2022; and the value
of shares invested by unlisted companies is calculated based on the price to earnings ratio of the most recent equity
transfer, as well as the net profit and net assets for the year 2022. The Company calculates the equity value of the
partnership enterprise held by the Company based on the ratio of the overall share value of the fund company's external
investment to the Company's investment in the partnership enterprise.
4. Qualitative and quantitative information on valuation techniques and important parameters used for
continuous and non-continuous third level fair value measurement items
√ Applicable □ Not applicable
Fair value at the end Unobservable
Item Valuation techniques
of the period input value
Investment in other equity instruments 6,608,684.78 Income approach Net assets
Other non-current financial assets 1,000,000.00 Income approach Net assets
5. Continuous third level fair value measurement items, adjustment information between opening and closing
book values, and sensitivity analysis of unobservable parameters
□ Applicable √ Not applicable
6. Continuous fair value measurement items that undergo conversion between different levels during the
current period, the reasons for conversion, and the policy for determining the conversion time point
□ Applicable √ Not applicable
7. Changes in valuation techniques and reasons for such changes during the current period
□ Applicable √ Not applicable
8. Fair value of financial assets and financial liabilities not measured at fair value
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2022 Annual Report
□ Applicable √ Not applicable
9. Other
□ Applicable √ Not applicable
XII. Related parties and related transactions
1. Information of the parent company of this enterprise
□ Applicable √ Not applicable
2. Information of subsidiaries of this enterprise
Refer to the notes for the details of the subsidiaries of this enterprise
√ Applicable □ Not applicable
The situation of the Company's subsidiaries is detailed in "Section III Management Discussion and Analysis V. Main
operating conditions during the reporting period (V) Investment Analysis".
3. Information of joint ventures and associated enterprises of the Company
Important joint ventures or associates of the Company are detailed in the notes
□ Applicable √ Not applicable
Related party transactions with the Company occurred in the current period, the information of other joint ventures or
associated enterprises that have formed balances through related party transactions with the Company in the early stage
is as follows
√ Applicable □ Not applicable
Name of joint venture or associated enterprise Relationship with the Company
Guangzhou Red Star Macalline Expo Home Plaza The Company holds 50% of its shares
Co., Ltd.
Beijing Jiaju Technology Co., Ltd. The Company holds 41% of its shares
Others
□ Applicable √ Not applicable
4. Conditions of other related parties
√ Applicable □ Not applicable
Names of other related parties Relationship between other related parties and the Company
Companies controlled by Yao Liangbai, a shareholder holding
Meizhou Yuanling Investment Industry Co., Ltd. more than 5% of the shares
Wind Information Co., Ltd. Company where independent director Qin Shuo serves as a
director
5. Related party transactions
(1) Related party transactions for purchasing and selling goods, providing and receiving labor services
Table of Purchasing Goods/Accepting Labor Services
√ Applicable □ Not applicable
Unit: CNY
Does it
Approved
The amount exceed the
Content of related transaction Amount incurred
Related parties incurred in current transaction
party transaction limit (if in last period
period limit (if
applicable)
applicable)
Software service
fee and
50,343,882.60 No 24,801,432.51
Beijing Jiaju information
Technology Co., Ltd. service fee
Wind Information Software service
No 64,150.95
Co., Ltd. fee
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2022 Annual Report
Guangzhou Red Star Property fees,
Macalline Expo Home publicity fees, and 1,856,783.69 No
Plaza Co., Ltd. electricity fees
Total 52,200,666.29 24,865,583.46
Selling goods/rendering labor service
√ Applicable □ Not applicable
Unit: CNY
Content of related party The amount incurred in Amount incurred in last
Related parties
transaction current period period
Guangzhou Red Star Property management
Macalline Expo Home Plaza fees, electricity fees, water 10,108,204.08 60,534.59
Co., Ltd. fees, and service fees
Total 10,108,204.08 60,534.59
Description of related party transactions for purchasing and selling goods, providing and receiving labor services
□ Applicable √ Not applicable
(2) Related entrusted management/contracting and entrusted management/outsourcing situation
Table of entrusted management/contracting situation of the Company:
□ Applicable √ Not applicable
Description of related custody/contracting situation
□ Applicable √ Not applicable
The Company's Entrusted Management/Outsourcing Situation
□ Applicable √ Not applicable
Description of related management/outsourcing situation
□ Applicable √ Not applicable
(3) Related leasing situation
As the lessor, the Company:
√ Applicable □ Not applicable
Unit: CNY
Confirmed rental Rental income
Types of leased
Name of leasee income in the current recognized in the
assets
period previous period
Meizhou Yuanling Investment Industry Co., Ltd. Transport means 49,646.04 49,646.01
Guangzhou Red Star Macalline Expo Home Plaza Houses and
Co., Ltd. parking spaces 9,868,363.29 0.00
Total 9,918,009.33 49,646.01
As the leasee, the Company:
√ Applicable □ Not applicable
Unit: CNY
Variable
lease
payments
Interest
Types Simplified rental fees not
expense Increased
of for short-term leases included
Name of lessor Rent paid on lease use rights
leased and low value asset in the
liabilities assets
assets leases (if applicable) measurem
assumed
ent of
lease
liabilities
239/259
2022 Annual Report
(if
applicable
)
The The The
Am am Am Am am Am am Am
oun oun oun oun oun oun oun oun
t t t t t t t t
The amount inc inc inc The amount inc inc inc inc inc
incurred in urre urre urre incurred in urre urre urre urre urre
current period d in d in d in current period d in d in d in d in d in
last curr last last curr last curr last
peri ent peri peri ent peri ent peri
od peri od od peri od peri od
od od od
Guangzhou
Red Star
Booth
Macalline 2,083,605.88 2,083,605.88
rental
Expo Home
Plaza Co., Ltd.
Information of related leasing situation
□ Applicable √ Not applicable
(4) Information of related party guarantee
As the guarantor, the Company
□ Applicable √ Not applicable
As the guarantor, the Company
□ Applicable √ Not applicable
Description of related party guarantees
□ Applicable √ Not applicable
(5) Related party fund borrowing and lending
□ Applicable √ Not applicable
(6) Asset transfer and debt restructuring of related parties
□ Applicable √ Not applicable
(7) Compensation for key management personnel
√ Applicable □ Not applicable
Unit: CNY
Amount incurred in last
Item The amount incurred in current period period
Compensation for key management
personnel 22,781662.23 22,403,023.49
(8) Other related party transactions
□ Applicable √ Not applicable
6. Accounts receivable and payable to related parties
(1) Accounts receivable
√ Applicable □ Not applicable
Unit: CNY
Ending balance Beginning balance
Item Name Related parties Bad debt Bad debt
Book balance Book balance
provision provisio
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2022 Annual Report
n
Guangzhou Red Star
Accounts
Macalline Expo Home 19,322,987.20 4,167,968.34 0.00 /
receivable
Plaza Co., Ltd.
Guangzhou Red Star
Prepayment
Macalline Expo Home 139,928.10 / 0.00 /
s
Plaza Co., Ltd.
Prepayment Beijing Jiaju Technology
349,433.96 / 0.00 /
s Co., Ltd.
Other Guangzhou Red Star
receivables Macalline Expo Home 5,667,862.40 1,133,572.48 0.00 /
Plaza Co., Ltd.
Other Meizhou Yuanling
receivables Investment Industry Co., 56,100.00 11,220.00 0.00 /
Ltd.
(2) Accounts payable
√ Applicable □ Not applicable
Unit: CNY
Item Name Related parties Closing book balance Opening book balance
Receipts in Guangzhou Red Star Macalline
0.00 692,893.04
advance Expo Home Plaza Co., Ltd.
7. Related party commitments
□ Applicable √ Not applicable
8. Other
□ Applicable √ Not applicable
XIII. Share-based payments
1. Overall information of share-based payment
√ Applicable □ Not applicable
Unit: share Currency: CNY
The total amount of
various equity
instruments granted by 1,210,697.00
the Company in this
period
The total amount of
various equity
instruments exercised by 6.00
the Company in the
current period
The total amount of
various equity
instruments that have 4,853,794.00
expired in the current
period of the Company
The 16th meeting of the third board of directors of the Company reviewed and approved
the Proposal on Adjusting the List of Incentive Targets and Number of Options Granted
The range of exercise for the First Time in the 2021 Stock Option Incentive Plan, the Proposal on Adjusting the
prices for stock options Exercise Price of the 2021 Stock Option Incentive Plan and the Proposal on Granting Stock
issued by the Company Options to Incentive Targets for the First Time, agreed to grant 5,367,837 stock options to
at the end of the period 510 incentive recipients on July 2, 2021, with an exercise price of CNY 146.97 per share.
and the remaining term The exercise period is divided into two stages. Provided that the exercise conditions set by
of the contract the company are met, from the first trading day 12 months after the completion date of the
initial authorization of the stock option to the last trading day within 24 months after the
completion date of the initial authorization of the stock option, the incentive targets may
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2022 Annual Report
exercise 50% of the total number of incentive stock options granted; from the first trading
day 24 months after the grant date to the last trading day within 36 months from the grant
date, the remaining 50% of the exercisable rights shall remain. During the period from the
first grant date to the completion of stock option grant registration, 10 incentive recipients
lost their eligibility to participate in this incentive plan due to reasons such as resignation,
involving a total of 76,886 stock options. Therefore, the actual number of incentive
recipients granted for the first time in this incentive plan is 500, and the actual number of
stock options granted for the first time is 5,290,951. Where: a total of 2,645,604 stock
options were granted to the incentive targets during the first stage of exercise,
Due to resignation and unsatisfactory performance evaluation, 1,603,028 shares were
cancelled. In the first stage, the non market unlocking conditions met the standards, and a
total of 1,042,576 million shares were planned to be exercised. The exercise period was
from September 21, 2022 to July 1, 2023, and 6 shares had been exercised as of December
31, 2022; In the second stage, a total of 2,645,347 stock options were issued. Due to
resignation, 238,954 stock options in the second stage have been cancelled in 2022. As of
December 31, 2022, all 2,406,393 pharmaceutical products have become invalid due to non
market unlocking conditions not meeting the standards.
The 23rd meeting of the third board of directors of the Company reviewed and approved
the Proposal on Granting Reserved Stock Options for the 2021 Stock Option Incentive Plan
to Incentive Targets, and agreed to grant CNY 1,232,055 pre reserved stock options to 174
incentive objects on June 23, 2022 as the grant date. During the period from the reserved
grant date to the completion of stock option grant registration, three incentive objects lost
their eligibility to participate in this incentive plan due to resignation or other reasons,
involving a total of 21,358 stock options. Therefore, the actual number of incentive
recipients granted this time is 171, and the actual number of stock options granted is
1,210,697, with an exercise price of CNY 145.22 per share. The exercise period is divided
into two stages, provided that the exercise conditions set by the company are met.
From the first trading day 12 months after the completion date of the initial authorization
of the stock option to the last trading day within 24 months after the completion date of the
initial authorization of the stock option, the incentive targets may exercise 50% of the total
number of incentive stock options granted; from the first trading day 24 months after the
grant date to the last trading day within 36 months from the grant date, the remaining 50%
of the exercisable rights shall remain.
Where: in the first stage, a total of 605,419 copies were released, but due to non market
unlocking conditions not meeting the standards, they have all become invalid as of
December 31, 2022.
The range of exercise
prices for other equity
instruments issued by
the Company at the end
of the period and the
remaining term of the
contract
2. Equity settled share-based payments
√ Applicable □ Not applicable
Unit: CNY
Method for determining the fair value of equity instruments The fair value of stock options is estimated using the
on the grant date Black-Scholes stock option model
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2022 Annual Report
On each balance sheet date, the number of equity
instruments that can be unlocked is confirmed based on
subsequent information such as the latest changes in the
Basis for determining the number of exercisable equity number of incentive targets who have obtained feasible
instruments rights, assessment status, etc. After the implementation
of the equity incentive plan, the expected number of
unlocked equity instruments is consistent with the actual
number of unlocked instruments.
Reasons for significant differences between the current
None
estimate and the previous estimate
Accumulated amount of equity settled share-based
10,514,852.83
payments recognized in capital reserve
The total amount of expenses recognized for equity settled
-1,220,603.57
share-based payments in this period
3. Cash settled share-based payments
□ Applicable √ Not applicable
4. Modification and termination of share-based payment
□ Applicable √ Not applicable
5. Other
□ Applicable √ Not applicable
XIV. Commitment and contingency
1. Important commitments
□ Applicable √ Not applicable
2. Contingencies
(1) Significant contingencies on the balance sheet date
□ Applicable √ Not applicable
(2) The company should also provide a description if there are no important contingencies that need to be disclosed:
√ Applicable □ Not applicable
1. Other contingent liabilities and their financial impact
The Company and Shanghai Pudong Development Bank Co., Ltd. carry out the "Pudong Development Bank Quick
Loan" business, where the Company recommends merchants to the bank and assumes a prudent recommendation
obligation to the bank regarding the recommended merchant's repayment ability. If the loan of the merchant is overdue
for 60 days (inclusive), it is deemed that the Company has not fulfilled the obligation of prudent recommendation, which
constitutes a breach of contract. The bank has the right to directly deduct the prudent recommendation performance bond
deposited by the Company to pay liquidated damages. The cumulative total amount of liability for breach of contract
shall not exceed 2% of the cumulative total amount of loans of the merchant actually recommended by the bank to the
Company. As of the end of the reporting period, the cumulative loan amount recommended by the Company to the bank
for merchants was CNY 21.17 million. There has been no default on matured loans, and the outstanding loan balance was
CNY 2,918,000. The Company has made a prudent recommendation liability loss based on the bank's provision for 1.5%
loan impairment on normal loans. The provision amount is detailed in "Section X Financial Report VII, Notes to major
items in the consolidated financial statements 50- Estimated Liabilities".
2. As of December 31, 2022, there are no other contingencies that need to be disclosed by the Company.
3. Other
□ Applicable √ Not applicable
XV. Events After the Balance Sheet Date
1. Important non adjustment matters
□ Applicable √ Not applicable
2. Profit distribution situation
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2022 Annual Report
√ Applicable □ Not applicable
Unit: '00 million Currency: CNY
Proposed profits or dividends to be distributed 10.75
Profit or dividend declared for distribution after /
review and approval
According to the profit distribution plan for 2022 passed at the board meeting of the company on April 25, 2023, the
Company intends to distribute a total cash dividend of CNY 1.075 billion (tax inclusive) to all shareholders based on the
total share capital on the registration date of equity distribution less the number of shares in the Company's share
repurchase account, accounting for 40% of the net profit attributable to shareholders of the parent company in 2022. If
the total share capital of the Company changes before the equity registration date for the implementation of equity
distribution, the Company intends to maintain the total profit distribution unchanged and adjust the profit distribution
ratio per share accordingly. This plan still needs to be reviewed and approved by the general meeting of shareholders.
3. Sales return
□ Applicable √ Not applicable
4. Description of other events after the balance sheet date
□ Applicable √ Not applicable
XVI. Other important items
1. Correction of accounting errors in previous period
(1) Retrospective restatement
□ Applicable √ Not applicable
(2) Prospective application
□ Applicable √ Not applicable
2. Debt restructurings
□ Applicable √ Not applicable
3. Asset replacement
(1) Exchange of non-monetary assets
□ Applicable √ Not applicable
(2) Replacement of other assets
□ Applicable √ Not applicable
4. Pension plan
□ Applicable √ Not applicable
5. Discontinued operations
□ Applicable √ Not applicable
6. Segment information
(1) Basis for determining reporting segments and accounting policies
□ Applicable √ Not applicable
(2) Financial information of the reporting segment
□ Applicable √ Not applicable
(3) If the Company has no reporting segments or cannot disclose the total assets and liabilities of each
reporting segment, the reason should be explained
√ Applicable □ Not applicable
The reasons why the Company did not prepare and present segment information reports are as follows:
1. The Company's main business is the production and sales of products such as cabinets, wardrobes, wooden doors,
bathrooms, etc. According to the Industrial Classification for National Economic Activities issued by the National Bureau
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2022 Annual Report
of Statistics in 2017, the industry the Company is engaged in is the wooden furniture manufacturing industry (C211) in
the furniture manufacturing industry (C21), and the company does not have multiple business situations;
2. The products produced by the company are all different products of customized furniture, with similar economic
characteristics. The management considers this type of business to be managed as a whole, and some business expenses
are incurred benefiting from various categories of products, making it impossible to evaluate the specific operating results
of individual products.
(4). Other descriptions:
□ Applicable √ Not applicable
7. Other important transactions and matters that have an impact on investor decision-making
□ Applicable √ Not applicable
8. Other
□ Applicable √ Not applicable
XVII. Notes to Main Items of the Parent Company's Financial Statements
1. Accounts receivable
(1) Disclosure by aging
√ Applicable □ Not applicable
Unit: CNY
Aging Closing book balance
within 1 year
Where: sub items within 1 year
within 1 year 978,445,389.08
Subtotal within 1 year 978,445,389.08
1-2 years 336,454,977.23
2-3 years 79,523,378.72
More than 3 years
3-4 years 28,453,949.63
4-5 years 8,253,722.47
Over 5 years 8,553,285.59
Total 1,439,684,702.72
(2) Classified disclosure by bad debt provision method
√ Applicable □ Not applicable
Unit: CNY
Ending balance Beginning balance
Bad debt Bad debt
Book balance Book balance
provision provision
Per Per
cen cen
Cate
Prop tag Pro tag Book
gory Book value
ortio e of port e of value
Amount Amount Amount Amount
n pro ion pro
(%) visi (%) visi
on on
(%) (%)
Singl
e
item
provi 94,518.2 68,124,1 72. 26,394,074. 43,592,586. 4.0 30,514,81 70. 13,077,775
6.57
sion 66.26 92.24 08 02 33 4 0.43 00 .90
for
bad
debts
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2022 Annual Report
Of which:
Bad
debt
reser
ve
1,345,16 93.4 157,600,6 11. 1,187,565,7 1,036,445,8 95. 97,321,11 9.3 939,124,77
with
6,436.46 3 59.21 72 77.25 94.40 96 6.33 9 8.07
draw
n by
portf
olio
Of which:
1,439,68 100. 225,724,8 15. 1,213,959,8 1,080,038,4 127,835,9 11. 952,202,55
100
Total 4,702.72 00 51.45 68 51.27 80.73 26.76 84 3.97
Withdrawing bad debt reserves by individual item:
√ Applicable □ Not applicable
Unit: CNY
Ending balance
Name Percentage of
Book balance Bad debt provision provision (%) Reason for provision
Some engineering
clients are unable to
Engineering clients 94,518,266.26 68,124,192.24 72.08 repay their due debts
or have a downgrade
in their credit rating
Total 94,518,266.26 68,124,192.24 72.08 /
Description of withdrawing bad debt reserves by individual item
□ Applicable √ Not applicable
Provision for bad debts by combination:
√ Applicable □ Not applicable
Portfolio provision item: expected credit loss
Unit: CNY
Ending balance
Name Accounts receivable Bad debt provision Percentage of provision
(%)
Engineering clients 1,222,050,018.19 139,524,468.74 11.42
Franchised dealers 64,275,805.01 8,289,718.47 12.90
Other clients 58,840,613.26 9,786,472.00 16.63
Total 1,345,166,436.46 157,600,659.21 11.72
Recognition criteria and instructions for withdrawing bad debts by combination:
□ Applicable √ Not applicable
If the provision for bad debts is made based on the expected credit loss general model, refer to the disclosure of other
accounts receivable:
□ Applicable √ Not applicable
(3) Situation of bad debt reserves
√ Applicable □ Not applicable
Unit: CNY
246/259
2022 Annual Report
Current period change amount
Ret
urn Othe
Category Beginning balance or Write-off or r Ending balance
Provision
rev cancellation chan
ers ges
al
Accounts
receivable
with single 30,514,810.43 37,609,381.81 68,124,192.24
provision for
bad debts
Bad debt
reserve
97,321,116.33 61,804,592.76 1,525,049.88 157,600,659.21
withdrawn by
portfolio
Total 127,835,926.76 99,413,974.57 1,525,049.88 225,724,851.45
The amount of bad debt reserves recovered or reversed in the current period is significant:
□ Applicable √ Not applicable
(4) Actual verification of accounts receivable in the current period
□ Applicable √ Not applicable
Important accounts receivable verification status
□ Applicable √ Not applicable
(5) Accounts receivable from top five borrowers classified based on the ending balance
√ Applicable □ Not applicable
Unit: CNY
Proportion in the total
Bad debt provision of
Company name Ending balance ending balance of accounts
ending balance
receivable (%)
Shanghai Aifeidi Building
33,956,605.00 2.32 4,910,032.29
Materials Trading Co., Ltd
Shenzhen Evergrande
Materials and Equipment 33,878,453.40 2.31 23,714,917.38
Co., Ltd.
Shenzhen Lingchao Supply
Chain Management Co., 32,873,802.16 2.24 2,034,888.35
Ltd.
Guangzhou Yuantong E-
commerce Technology 24,445,569.47 1.67 1,513,180.75
Co., Ltd.
Shenzhen Branch of China
Construction Science &
22,208,196.28 1.52 1,374,687.35
Technology Group Co.,
Ltd.
Total 147,362,626.31 10.06 33,547,706.12
(6) Accounts receivable derecognized due to transfer of financial assets
□ Applicable √ Not applicable
(7) The amount of assets and liabilities formed by transferring accounts receivable and continuing to be involved
□ Applicable √ Not applicable
Other descriptions
□ Applicable √ Not applicable
2. List of other receivables
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2022 Annual Report
List of items
√ Applicable □ Not applicable
Unit: CNY
Item Ending balance Beginning balance
Interest receivable 0.00 0.00
Dividend receivable 0.00 0.00
Other receivables 6,733,661,374.43 5,433,781,485.95
Total 6,733,661,374.43 5,433,781,485.95
Other descriptions
□ Applicable √ Not applicable
Interest receivable
(1) Classification of interest receivable
□ Applicable √ Not applicable
(2) Significant overdue interest
□ Applicable √ Not applicable
(3) Provision for bad debts
□ Applicable √ Not applicable
Other descriptions
□ Applicable √ Not applicable
Dividend receivable
(4) Dividend receivable
□ Applicable √ Not applicable
(5) Important dividends receivable with an aging of over 1 year
□ Applicable √ Not applicable
(6) Provision for bad debts
□ Applicable √ Not applicable
Other descriptions
□ Applicable √ Not applicable
Other receivables
(1) Disclosure by aging
√ Applicable □ Not applicable
Unit: CNY
Aging Closing book balance
within 1 year
Where: sub items within 1 year
within 1 year 4,544,819,743.26
Subtotal within 1 year 4,544,819,743.26
1-2 years 1,432,560,353.41
2-3 years 661,358,189.62
More than 3 years
3-4 years 97,776,776.45
4-5 years 868,619.25
Over 5 years 2,927,230.68
Total 6,740,310,912.67
(2) Classification by nature of funds
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2022 Annual Report
√ Applicable □ Not applicable
Unit: CNY
Nature of payment Closing book balance Opening book balance
Transactions with affiliated
subsidiaries 6,558,275,532.55 5,354,618,237.38
Deposit 164,849,609.41 67,301,239.61
Business reserve fund 2,571,679.97 1,896,820.79
Security Deposits 8,392,507.56 8,616,326.79
Other 6,221,583.18 7,839,203.08
Total 6,740,310,912.67 5,440,271,827.65
(3) Provision for bad debts
√ Applicable □ Not applicable
Unit: CNY
Phase I Phase Ⅱ Phase Ⅲ
ECL over the entire Expected credit loss
Expected credit
Bad debt provision duration (no credit within whole duration Total
loss (ECL) in the
impairment occurs) (credit impairment has
next 12 months
occurred)
Balance as of January
1, 2022 6,090,933.37 399,408.33 6,490,341.70
Balance as of January
1, 2022 in the current
period
- Transfer to Phase Ⅱ
- Transfer to Phase Ⅲ
- Return to Phase Ⅱ
- Return to the Phase
I
Provision in current
period 68,196.54 96,000.00 164,196.54
Reversals in the
current period 5,000.00 5,000.00
Write-off in current
period
Canceled after
verification in the
current period
Other changes
Balance as of
6,159,129.91 490,408.33 6,649,538.24
December 31, 2022
Description of significant changes in the book balance of other accounts receivable with changes in loss provisions in the
current period:
□ Applicable √ Not applicable
The basis for calculating the amount of bad debt reserves for the current period and evaluating whether the credit risk of
financial instruments has significantly increased:
□ Applicable √ Not applicable
(4) Information of bad debt reserves
√ Applicable □ Not applicable
Unit: CNY
Current period change amount
Beginning Return or Write-off
Category Other Ending balance
balance Provision reversal or
changes
cancellatio
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2022 Annual Report
n
Single item
provision for 399,408.33 96,000.00 5,000.00 490,408.33
bad debts
Bad debt
reserve
6,090,933.37 68,196.54 6,159,129.91
withdrawn by
portfolio
Total 6,490,341.70 164,196.54 5,000.00 6,649,538.24
The significant amount of bad debt reserves reversed or recovered in the current period: □ Applicable √ Not applicable
(5) Other accounts receivable actually written off in the current period
□ Applicable √ Not applicable
(6) Other accounts receivable with the top five ending balances collected by the debtor
√ Applicable □ Not applicable
Unit: CNY
Proportion to
Bad debt
the total ending
Nature of provision
Company name Ending balance Aging balance of other
payment of ending
accounts
balance
receivable (%)
Qingyuan Oppein Transactions
Within 2
Integration Home Co., with affiliated 2,837,802,925.65 42.10
years
Ltd. subsidiaries
Chengdu Oppein Transactions
Within 4
Smart Home Co., Ltd. with affiliated 1,357,874,413.14 20.15
years
subsidiaries
Wuxi (Jiangsu) Transactions
Within 2
Oppein Integration with affiliated 1,162,880,489.29 17.25
years
Home Co., Ltd. subsidiaries
Tianjin Oppein Transactions
within 1
Integration Home Co., with affiliated 393,786,809.62 5.84
year
Ltd. subsidiaries
Guangzhou Oppein Transactions
Within 3
Home Design Institute with affiliated 391,426,000.00 5.81
years
Co., Ltd. subsidiaries
Total 6,143,770,637.70 91.15
(7) Receivables involving government subsidies
□ Applicable √ Not applicable
(8) Other receivables derecognized due to transfer of financial assets
□ Applicable √ Not applicable
(9) The amount of assets and liabilities formed by transferring other receivables and continuing to be involved
□ Applicable √ Not applicable
Other descriptions
□ Applicable √ Not applicable
3. Long-term equity investments
√ Applicable □ Not applicable
Unit: CNY
Ending balance Beginning balance
Item Im Im
Book balance Book value Book balance Book value
pa pa
250/259
2022 Annual Report
ir ir
m m
en en
t t
pr pr
ov ov
isi isi
on on
Investment in
1,124,696,529.99 1,124,696,529.99 711,367,617.29 711,367,617.29
subsidiaries
Investment in
affiliated and 10,518,308.44 10,518,308.44 15,543,367.11 15,543,367.11
joint ventures
Total 1,135,214,838.43 1,135,214,838.43 726,910,984.40 726,910,984.40
(1) Investment in subsidiaries
√ Applicable □ Not applicable
Unit: CNY
Pr
ov
isi
on Cl
fo os
r in
im g
pa ba
ir la
m nc
Decrease in
Increase in current en e
The invested company Beginning balance the current Ending balance
period t of
period
in im
th pa
e ir
cu m
rr en
en t
t pr
pe ov
ri isi
od on
Tianjin Oppein
Integration Home Co., 56,706,428.19 61,111.72 56,645,316.47
Ltd.
Guangzhou Oppein
Integration Home Co., 53,817,062.09 44,274.90 53,772,787.19
Ltd.
Guangzhou Oppein
Sanitary Ware Co., 17,448,629.40 170,605.07 17,278,024.33
Ltd.
Guangzhou Ouboni
Integration Home Co., 8,688,544.94 91,186.75 8,597,358.19
Ltd.
Oppein (Guangzhou)
Soft Decoration 3,515,365.72 78,389.66 3,436,976.06
Design Co., Ltd.
Oppein (Hong Kong)
International Trade 21,432,084.32 21,432,084.32
Company Limited
Wuxi (Jiangsu) Oppein 52,101,428.58 30,701.23 52,132,129.81
251/259
2022 Annual Report
Integration Home Co.,
Ltd.
Qingyuan Oppein
Integration Home Co., 100,658,748.30 158,743.81 100,500,004.49
Ltd.
Oppein United
(Tianjin) Home Sales 1,000,000.00 1,000,000.00
Co., Ltd.
OPPEINITALYACA
2,568,895.00 2,568,895.00
DEMYS.R.L.
Guangzhou Oppein
Creative Home Design 3,682,525.33 55,759.36 3,738,284.69
Co., Ltd.
Chengdu Oppein
100,197,905.42 3,235.98 100,194,669.44
Smart Home Co., Ltd.
Meizhou Oppein
Investment Industry 100,000,000.00 100,000,000.00
Co., Ltd.
252/259
2022 Annual Report
Guangzhou Oppein
Home Design Institute 100,000,000.00 100,000,000.00
Co., Ltd.
Xingpai Commercial
Property Management 3,400,000.00 3,400,000.00
(Guangzhou) Co., Ltd.
Wuhan Oppein Smart
86,150,000.00 413,850,000.00 500,000,000.00
Home Co., Ltd.
Zhuhai Oppein
Creative Home Design
Co., Ltd.
Total 711,367,617.29 413,936,460.59 607,547.89 1,124,696,529.99
(2) Investment in affiliated and joint ventures
√ Applicable □ Not applicable
Unit: CNY
Increase or decrease in current period
O
th
er
C
co Clo
h
m sin
A a
pr g
dd n
eh Decl bal
iti Investment g Im
en are anc
on gains and es pair
si cash e of
Beginning al losses in me Ending
Investor Negative ve divid Oth imp
balance in recognized ot nt balance
investment in ends er air
ve under the h pro
co or me
st equity er visi
m profi nt
m method in on
e ts pro
en te
ad visi
t re
ju on
st
st
s
m
en
ts
I. Joint ventures
Guangz
hou Red
Star
Macalli
-
ne Expo 12,328,756.91 3,500,000.00 0.00
8,828,756.91
Home
Plaza
Co.,
Ltd.
Sub- -
total 12,328,756.91 3,500,000.00 8,828,756.91
II. Associated enterprise
Beijing
Jiaju
10,518,308.4
Technol 3,214,610.20 7,303,698.24
4
ogy Co.,
Ltd.
Sub- 10,518,308.4
total 3,214,610.20 7,303,698.24 4
- 10,518,308.4
Total 15,543,367.11 3,500,000.00 1,525,058.67 4
253/259
2022 Annual Report
4. Operating income and operating cost
(1) Operating income and operating cost
√ Applicable □ Not applicable
Unit: CNY
The amount incurred in current period Amount incurred in last period
Item
IncomIncomee Cost IncomIncomee Cost
Main
10,835,087,887.82 8,542,342,870.66 10,268,664,320.18 7,889,158,909.12
business
Other
493,238,032.66 484,141,214.64 472,355,588.10 446,277,615.22
businesses
Total 11,328,325,920.48 9,026,484,085.30 10,741,019,908.28 8,335,436,524.34
254/259
2022 Annual Report
(2) Information of income generated by the contract
□ Applicable √ Not applicable
(3) Description of performance obligations
√ Applicable □ Not applicable
As of December 31, 2022, the corresponding transaction price for performance obligations that have been signed
but have not yet been fulfilled or completed was CNY 600,606,528.86. Revenue is expected to be recognized between
2023 and 2024.
(4) Description of allocation to remaining performance obligations
□ Applicable √ Not applicable
5. Investment income
√ Applicable □ Not applicable
Unit: CNY
The amount incurred in current
Item period Amount incurred in last period
Income from long-term equity investment
accounted with cost method 0.00 0.00
Long-term equity investment income
accounted by Equity method -1,525,058.67 -6,461,645.66
Investment income from disposal of long-term
equity investment 0.00 0.00
Investment income during the holding of
0.00 0.00
transactional financial assets
Dividend income obtained from other equity
instrument investments during the holding 106,575.00 203,000.00
period
Interest income obtained from debt
0.00 0.00
investments during the holding period
Other interest income obtained from debt
0.00 0.00
investments during the holding period
Investment income from disposal of trading
6,061,357.32 2,512,753.42
financial assets
Investment income from disposal of other
0.00 0.00
equity instrument investments
Investment income from disposal of debt
investments 0.00 0.00
Investment income from disposal of other
debt investments 0.00 0.00
Profits on debt restructuring 0.00 0.00
Cost method accounting for dividend income
during the holding period of long-term equity 700,000,000.00 0.00
investments
Total 704,642,873.65 -3,745,892.24
6. Other
□ Applicable √ Not applicable
XVIII. Further information
1. Detailed statement of profits and losses and losses for the current period
√ Applicable □ Not applicable
Unit: CNY
Item Amount Notes
Profits and losses on disposal of non-current assets -267,179.73 /
Ultra vires examination and approval, or no formal approval documents, tax /
255/259
2022 Annual Report
Item Amount Notes
return, reduction and exemption
Government subsidies included in the current profits and losses (closely related
to enterprise business, except for government subsidies enjoyed in accordance 106,255,630.20 /
with national unified standards or quotas)
Capital occupancy fees charged to non-financial enterprises included in current
profits and losses /
The investment cost of subsidiaries, associates and joint ventures obtained by
the enterprise is less than the income from the fair value of the identifiable net /
assets of the investee at the time of obtaining the investment
256/259
2022 Annual Report
Item Amount Notes
Profits and losses on non-monetary asset exchange /
Profits and losses from entrusting others to invest or manage assets /
Provision for impairment of assets due to force majeure, such as natural
disasters /
Profits and losses on debt restructuring /
Enterprise restructuring costs, such as expenses for resettling employees and /
integration costs
Profits and losses exceeding fair value arising from transactions with
significantly unfair transaction prices /
Current net profits and losses of subsidiaries arising from business merger under
the same control from the beginning of the period to the merger date /
Profits and losses arising from contingencies unrelated to the normal business
operation of the Company /
In addition to the effective hedging business related to the normal business of the
Company, the profits and losses from changes in fair value arising from the
holding of trading financial assets, derivative financial assets, trading financial
liabilities and derivative financial liabilities, as well as the investment income -15,064,653.29 /
from the disposal of trading financial assets, derivative financial assets, trading
financial liabilities, derivative financial liabilities and other creditor's rights
investments
Reversal of provision for impairment of receivables and contract assets subject
to independent impairment test /
Profits and losses from entrusted loans /
Profits and losses arising from changes in the fair value of investment real estate
/
measured subsequently using the fair value model
The impact of one-time adjustment of current profits and losses on current profits
and losses according to the requirements of tax, accounting and other laws and /
regulations
Custody fee income from entrusted operation /
Other non-operating income and expenses other than the above items 11,468,590.83 /
Other profit and loss items that meet the definition of non-recurring profits and
losses 19,781,431.38 /
Less: income tax impact 26,077,389.56 /
Minority interest impact 10,284.10 /
Total 96,086,145.73 /
The reasons shall be explained for the non-recurring profits and losses defined by the Company in accordance with the
definition of Explanatory Announcement on Information Disclosure of Companies Offering Securities to the Public No.1
- Non-recurring Profits and Losses, and the non-recurring profits and losses listed in Explanatory Announcement on
Information Disclosure of Companies Offering Securities to the Public No.1 - Non-recurring Profits and Losses as
recurring profits and losses.
□ Applicable √ Not applicable
2. Net return on assets and earnings per share
√ Applicable □ Not applicable
Weighted average Earnings per share
Profit during the reporting period return on net assets
(%) Basic EPS Diluted EPS
Net profit attributable to common
17.37 4.41 4.38
shareholders of the Company
Net profit attributable to common
shareholders of the Company after
16.75 4.26 4.22
deducting non-recurring profits and
losses
3. Differences in accounting data under domestic and foreign accounting standards
□ Applicable √ Not applicable
4. Other
257/259
2022 Annual Report
□ Applicable √ Not applicable
Chairman: Yao Liangsong
Approval and submission date of the board of directors: April 24, 2023
Revision Information
□ Applicable √ Not applicable
258/259
