Annual Report 2022
Stock Code: 603605 Stock Abbreviation: Proya
Bond Code: 113634 Bond Abbreviation : Proya Convertible Bond
Proya Cosmetics Co., Ltd.
Annual Report 2022
Annual Report 2022
Important Notes
I. The Board of Directors, Board of Supervisors, directors, supervisors and senior management
of the Company warrant that the content of the Annual Report is authentic, accurate and
complete, free from false records, misleading statements and major omissions, and shall be
jointly and severally liable therefore.
II. All directors of the Company attended the meeting of the Board of Directors.
III. Pan-China Certified Public Accountants (Special General Partnership) has issued a standard
unqualified audit report to the Company.
IV. HOU Juncheng, chairman of the Company, and WANG Li, CFO of the Company and Head
of Accounting Department, represent and warrant that the financial report in the Annual
Report is authentic, accurate and complete.
V. The profit distribution plan or capital reserve capitalization plan for the Reporting Period
approved by the Board of Directors
Based on the total share capital as of the record date on which equity distribution is implemented, the
Company proposes to distribute to all shareholders registered a cash dividend of RMB8.7 (tax inclusive)
per 10 shares, and convert the capital reserve into share capital in the proportion of 4 shares for every 10
shares held, but give no bonus shares. Based on the total share capital of 283,519,469 shares on December
inclusive) and a total of 113,407,788 shares will be converted.
In case of a change in the Company's total share capital due to the conversion of convertible bonds before
the record date for equity distribution, the Company maintain the said distribution and conversation ratios
and yet adjust the total distribution and conversion amounts.
VI. Disclosure of risks involved in forward-looking statements
√ Applicable □ Not applicable
Any future plan, development strategy and other descriptions contained in the forward-looking statements
herein shall not be deemed as the Company's substantial commitments to investors. Investors should note
that investment involves risks.
VII. Whether there is any non-operating capital occupation by a controlling shareholder and
other related parties
No
VIII. Whether there is any external guarantee provided in violation of specified decision-making
procedures
No
Annual Report 2022
IX. Whether the majority of the directors are unable to warrant the authenticity, accuracy and
completeness of the Annual Report disclosed by the Company
No
X. Major risk tips
The Company has described the existing risks in details in this Report. Refer to "(IV) Possible risks", "VI.
Discussion and Analysis of the Company's Future Development", "Section III Management Discussion
and Analysis".
XI. Other
□ Applicable √ Not applicable
Annual Report 2022
Contents
Financial statements signed and sealed by the Legal Representative, CFO of the Company,
Documents and person in charge of Accounting Department
Available Original copy of the audit report stamped by the accounting firm and signed and sealed by
for certified public accountants.
Inspection Original copies of all documents and announcements of the Company disclosed during the
Reporting Period in newspapers designated by China Securities Regulatory Commission.
Annual Report 2022
Section I Definitions
I. Definitions
In this report, unless the context otherwise requires, the following terms have the following meanings:
Definition
Proya Cosmetics, this
refers to Proya Cosmetics Co., Ltd.
Company, or the Company
Huzhou Branch of Proya Cosmetics Co., Ltd., a branch of the
Huzhou Branch refers to
Company
Shanghai Branch of Proya Cosmetics Co., Ltd., a branch of the
Shanghai Branch refers to
Company
Hangzhou Proya Trade Co., Ltd., a wholly-owned subsidiary
Proya Trade refers to
of the Company
Hanna Cosmetics Co., Ltd., a wholly-owned subsidiary of the
Korea Hanna refers to
Company
Anya (Huzhou) Cosmetics Co., Ltd., a wholly-owned
Anya (Huzhou) refers to
subsidiary of Korea Hanna
Yueqing Laiya Trading Co., Ltd., a wholly-owned subsidiary
Yueqing Laiya refers to
of the Company
Huzhou UZERO Trading Co., Ltd., a wholly-owned
Huzhou UZERO refers to
subsidiary of the Company
Mijing Siyu (Hangzhou) Cosmetics Co., Ltd., a wholly-owned
Mijing Siyu (Hangzhou) refers to
subsidiary of the Company
Zhejiang Meiligu Electronic Commerce Co., Ltd., a wholly-
Meiligu refers to
owned subsidiary of the Company
Huzhou Chuangdai E-commerce Co., Ltd., a wholly-owned
Chuangdai Electronics refers to
subsidiary of Meiligu
Hangzhou Boxin Trading Co., Ltd., a wholly-owned
Hangzhou Boxin refers to
subsidiary of Meiligu
Hapsode (Hangzhou) Cosmetics Co., Ltd., a wholly-owned
Hapsode (Hangzhou) refers to
subsidiary of the Company
Hapsode Co., Ltd., a wholly-owned subsidiary of Hapsode
Korea Hapsode refers to
(Hangzhou)
Huzhou Hapsode Trading Co., Ltd., a wholly-owned
Huzhou Hapsode refers to
subsidiary of Hapsode (Hangzhou)
Danyang Hapsode Cosmetics Trading Co., Ltd., a wholly-
Danyang Hapsode refers to
owned subsidiary of Hapsode (Hangzhou)
Hangzhou Proya Commercial Management Co., Ltd., a
Proya Commercial refers to
wholly-owned subsidiary of the Company
Hangzhou Tiedingxian Catering Management Co., Ltd., a
Tiedingxian refers to
holding subsidiary of Proya Commercial
Hangzhou Tielexin Aini Catering Management Co., Ltd., a
Tielexin Aini refers to
wholly-owned subsidiary of Proya Commercial
Hangzhou Xiake Bar Catering Management Co., Ltd., a
Xiake Bar refers to
wholly-owned subsidiary of Proya Commercial
Annual Report 2022
Hangzhou Luxiaotie Fitness Co., Ltd., a wholly-owned
Luxiaotie refers to
subsidiary of Proya Commercial
Hangzhou Donghai Wangchao Catering Management Co.,
Donghai Wangchao refers to
Ltd., a wholly-owned subsidiary of Proya Commercial
Hong Kong Keshi Trading Co., Ltd., a holding subsidiary of
Hong Kong Keshi refers to
the Company
Hongkong Xinghuo Industry Limited, a wholly-owned
Hongkong Xinghuo refers to
subsidiary of the Company
Hong Kong Zhongwen Electronic Commerce Co., Limited, a
Hong Kong Zhongwen refers to
wholly-owned subsidiary of Hongkong Xinghuo
Hong Kong Xuchen Trading Limited, a wholly-owned
Hong Kong Xuchen refers to
subsidiary of Hongkong Xinghuo
Proya Europe SARL, a wholly-owned subsidiary of Hongkong
Proya Luxembourg refers to
Xinghuo
Shanghai Zhongwen Electronic Commerce Co., Ltd., a
Shanghai Zhongwen refers to
wholly-owned subsidiary of the Company
Huzhou Niuke Technology Co., Ltd., a holding subsidiary of
Huzhou Niuke refers to
the Company
Hangzhou Wanyan Culture Media Co., Ltd., a wholly-owned
Hangzhou Wanyan refers to
subsidiary of Huzhou Niuke
Hong Kong Wanyan Electronic Commerce Co., Limited, a
Hong Kong Wanyan refers to
wholly-owned subsidiary of Huzhou Niuke
Huzhou Younimi Cosmetics Co., Ltd., a wholly-owned
Huzhou Younimi refers to
subsidiary of the Company
Korea Younimi Cosmetics Co., Ltd., a holding subsidiary of
Korea Younimi refers to
the Company
Ningbo TIMAGE Cosmetics Co., Ltd., a holding subsidiary of
Ningbo TIMAGE refers to
the Company
Hangzhou TIMAGE Cosmetics Co., Ltd., a wholly-owned
Hangzhou TIMAGE refers to
subsidiary of Ningbo TIMAGE
Ningbo Keshi Trading Limited, a holding subsidiary of the
Ningbo Keshi refers to
Company
Zhejiang Beute Cosmetics Co., Ltd., a wholly-owned
Zhejiang Beute refers to
subsidiary of the Company
Ningbo Proya Enterprise Consulting Management Co., Ltd., a
Ningbo Proya refers to
wholly-owned subsidiary of the Company
Zhejiang Qingya Culture Art Communication Co., Ltd., a
Zhejiang Qingya refers to
holding subsidiary of the Company
Boya (Hong Kong) Investment Management Co., Limited, a
Boya (Hong Kong) refers to
wholly-owned subsidiary of the Company
Japan OR refers to O&R Co., Ltd., a holding subsidiary of Boya (Hong Kong)
Ningbo Tangyu Trading Co., Ltd., a wholly-owned subsidiary
Ningbo Tangyu refers to
of Japan OR
Hangzhou Weiluoke Cosmetics Co., Ltd., a wholly-owned
Hangzhou Weiluoke refers to
subsidiary of the Company
Annual Report 2022
Hangzhou Yizhuo Culture Media Co., Ltd., a wholly-owned
Hangzhou Yizhuo refers to
subsidiary of the Company
Hangzhou Oumisi Trading Co., Ltd., a wholly-owned
Hangzhou Oumisi refers to
subsidiary of the Company
Guangzhou Qianxi Network Technology Co., Ltd., a wholly-
Guangzhou Qianxi refers to
owned subsidiary of the Company
Proya (Hainan) Cosmetics Co., Ltd., a wholly-owned
Proya (Hainan) refers to
subsidiary of the Company
Shenggelan (Hangzhou) Cosmetics Co., Ltd., a wholly-owned
Singuladerm (Hangzhou) refers to
subsidiary of the Company
Xuzhou Laibo Information Technology Co., Ltd., a wholly-
Xuzhou Laibo refers to
owned subsidiary of the Company
Proya (Zhejiang) Cosmetics Co., Ltd., a wholly-owned
Proya (Zhejiang) refers to
subsidiary of the Company
CSRC refers to China Securities Regulatory Commission
SSE refers to Shanghai Stock Exchange
Pan-China Certified Public Accountants (Special General
Pan-China refers to
Partnership)
CSC refers to China Securities Co., Ltd.
Company Law refers to Company Law of the People's Republic of China
Securities Law refers to Securities Law of the People's Republic of China
Articles of Association refers to Articles of Association of Proya Cosmetics Co., Ltd.
RMB/RMB’0,000 refers to Renminbi Yuan/Renminbi 10,000 Yuan
Reporting Period refers to January 1, 2022 to December 31, 2022
Section II Company Profile and Key Financial Indicators
I. Company Information
Chinese name of the Company Proya Cosmetics Co., Ltd.
Short name of the Company in Chinese 珀莱雅
English name of the Company Proya Cosmetics Co., Ltd.
Abbreviation of English name of the
Proya
Company
Legal representative of the company HOU Juncheng
II. Contact Details
Board Secretary Securities Affairs Representative
Name WANG Li WANG Xiaoyan
Mailing address Xihu District, Hangzhou City, Zhejiang Road, Xihu District, Hangzhou City,
Province Zhejiang Province
Telephone 0571-87352850 0571-87352850
Fax 0571-87352813 0571-87352813
Email proyazq@proya.com proyazq@proya.com
Annual Report 2022
III. General Information
No. 588, Xixi Road, Liuxia Street, Xihu District,
Registered address
Hangzhou City, Zhejiang Province
For details, please refer to the Announcement on
Amending the Articles of Association and Applying for
Historical changes in the Company's
Changing Business Registration (No.2019-008) disclosed
registered address
by the Company on the designated media on February 27,
Proya Building, No. 588 Xixi Road, Xihu District,
Office address of the Company
Hangzhou City, Zhejiang Province
Postal code of the registered office address 310023
Company website http://www.proya-group.com
Email proyazq@proya.com
IV. Information Disclosure and Place for Obtaining the Report
Media for the Company's information
Shanghai Securities News, Securities Times
disclosure
CSRC's designated website for the
http://www.sse.com.cn
Company's Annual Report disclosure
The Company's Annual Report may be Board of Director's Office, Proya Building, No. 588 Xixi
obtained at Road, Xihu District, Hangzhou City, Zhejiang Province
V. Stock Information
Stock Information
Stock abbreviation
Stock class Stock exchange Stock abbreviation Stock code
before changes
Shanghai Stock
A share Proya 603605 None
Exchange
VI. Other Relevant Information
Pan-China Certified Public Accountants (Special
Name
General Partnership)
Auditor of the
Block B, China Resources Building, No. 1366,
Company Office address
Qianjiang Road, Jianggan District, Hangzhou
(domestic)
Name of the signing
YIN Zhibin, WANG Xiaokang
accountant
Sponsor Name China Securities Co., Ltd.
performing Room 2203, North Tower, Shanghai Securities
Office address
continuous Building, No. 528, Pudong South Road, Shanghai
supervisory Names of the sponsor's
GE Liang, WANG Zhan
duty during the signing representatives
Reporting Period of continuous January 4, 2022 - December 31, 2023
Annual Report 2022
Period supervision
VII. Major Accounting Data and Financial Indicators for the Past Three Years
(I) Major Accounting Data
Unit: Yuan Currency: RMB
Major accounting Year-on-year
data change (%)
Operating revenue 6,385,451,424.00 4,633,150,538.43 37.82 3,752,386,849.02
Net profit
attributable to
shareholders of the
listed company
Net profit
attributable to
shareholders of the
listed company net
of non-recurring
profit or loss
Net cash flow from
operating activities
As of the end of As of the end of Year-on-year As of the end of
Net assets
attributable to
shareholders of the
listed company
Total assets 5,778,071,824.19 4,633,049,783.03 24.71 3,636,882,185.29
(II) Key Financial Indicators
Year-on-year
Key financial indicators 2022 2021 2020
change (%)
Basic earnings per share
(RMB/share)
Diluted earnings per share
(RMB/share)
Basic earnings per share net of
non-recurring profit and loss 2.80 2.83 -1.06 2.34
(RMB/share)
Weighted average ROE (%) Up by 3.70
percentage points
Weighted average ROE net of Up by 3.09
non-recurring profit and loss (%) percentage points
Explanation on the Company's major accounting data and financial indicators for the recent three years as
Annual Report 2022
of the end of the Reporting Period
□ Applicable √ Not applicable
VIII. Differences in Accounting Data under Chinese and International Accounting Standards
(I) Difference in net profit and net assets attributable to shareholders of the listed company in the
financial report disclosed in accordance with International accounting standards and Chinese
accounting standards
□ Applicable √ Not applicable
(II) Differences in net profit and net assets attributable to shareholders of the listed company in
the financial report disclosed in accordance with International accounting standards and
Chinese accounting standards
□ Applicable √ Not applicable
(III) Description of differences between international and Chinese accounting standards:
□ Applicable √ Not applicable
IX. Major Financial Data for 2022 by Quarter
Unit: Yuan Currency: RMB
Q1 Q2 Q3 Q4
(January - March) (April - June) (July - September) (October - December)
Operating revenue 1,254,357,336.99 1,371,585,907.30 1,336,130,787.67 2,423,377,392.04
Net profit
attributable to
shareholders of the
listed company
Net profit
attributable to
shareholders of the
listed company net
of non-recurring
profit and loss
Net cash flow from
operating activities
Description of differences between quarterly data and disclosed regular report data
□ Applicable √ Not applicable
X. Non-recurring Profit and Loss Items and Amounts
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount for Note (if Amount for Amount for
Non-recurring profit and loss item
Gain or loss on disposal of non-current
assets
Unauthorized approval, no formal
Annual Report 2022
Amount for Note (if Amount for Amount for
Non-recurring profit and loss item
approval, or occasional tax refund or
reduction
Government grants recognized in profit or
loss for the current period (excluding
government grants that are closely related
to the Company's business operations and
gained at a fixed amount or quantity
according to national standards)
Capital occupation fees charged to the non-
financial enterprises and included in profit
or loss for the current period
Gains when the investment cost of
acquiring a subsidiary, an associate and a
joint venture is less than the fair value of the
identifiable net assets of the invested entity
Gains or losses from exchange of non-
monetary assets
Gains or losses from entrusting others with
investment or asset management
Asset impairment provision accrued for
force majeure such as natural disasters
Gains or losses from debt restructuring
Enterprise restructuring fees, such as
staffing expenses and integration fees
Profit and loss of the part exceeding fair
value generated from transaction with
unreasonable transaction price
Current net gains or losses of subsidiaries
established by business combination
involving enterprises under common
control from the beginning of the period to
the combination date
Gains or losses on contingencies that have
no relation with the normal operation of the
Company
Gains or losses from change in fair value by
held-for-trading financial assets, derivative
financial assets, held-for-trading financial
liabilities and derivative financial
liabilities, and investment income from
disposal of held-for-trading financial
assets, derivative financial assets, held-for-
trading financial liabilities, derivative
Annual Report 2022
Amount for Note (if Amount for Amount for
Non-recurring profit and loss item
financial liabilities and other debt
investments, excluding the effective
hedging businesses related with normal
operations of the Company
Reversal of provision for impairment of
receivables and contract assets individually 2,782,350.76
tested for impairment
Gains or losses from outward entrusted
loaning
Gains or losses from changes in the fair
values of Investment real estate that are
subsequently measured using the fair value
model
Impact of a one-time adjustment on current
profit and loss according to the
requirements of tax and accounting laws
and regulations
Custody fees of entrusted operation
Other non-operating revenue and expenses
-2,926,959.81 -3,078,442.83 -6,810,805.57
besides the above items
Other items that conform to the definition
of non-recurring profit or loss
Less: Effect of income tax 3,689,885.55 1,917,310.27 1,042,102.64
Effect of minority equity (after tax) 5,802,406.15 2,314,480.49 688,969.45
Total 28,886,986.92 8,026,545.18 6,073,394.19
The reasons should be explained for the non-recurring profit and loss items defined by the Company
according to the definition of the Explanatory Announcement No.1 on Information Disclosure for
Companies Offering Their Securities to the Public: Non-recurring Profit and Loss, and the definition of
the non-recurring profit and loss items listed in the Explanatory Announcement No.1 on Information
Disclosure for Companies Offering Their Securities to the Public: Non-recurring Profit and Loss as
recurring profit and loss items.
□ Applicable √ Not applicable
XI. Items Measured at Fair Value
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount of impact
Item Opening balance Ending balance Current change
on the current profit
Receivable 0.00
financing
Other equity 56,402,400.00 146,402,400.00 90,000,000.00 0.00
Annual Report 2022
instrument
investments
Total 59,644,400.00 146,402,400.00 86,758,000.00 0.00
XII. Other
□ Applicable √ Not applicable
Section III Management Discussion and Analysis
I. Business Discussion and Analysis
RMB6.385 billion operating revenue, up by 37.82% YOY
including RMB6.362 billion prime operating revenue, up by 37.69% YOY
RMB23 million non-operating revenue
Prime operating revenue:
(1) By channel
Change in
Change in Change in
Amount 2020 over Proportion Proportion Proportion
Channel (RMB100 the previous of 2022 of 2021 of 2020
previous year previous year
million) year (%) (%) (%)
YOY (%) YOY (%)
YOY (%)
Direct sales 44.78 59.79 76.16 79.63 70.40 60.66 42.45
Online Distribution 13.10 16.79 8.56 34.36 20.58 24.27 27.56
Subtotal 57.88 47.50 49.54 58.59 90.98 84.93 70.01
Household
chemicals
Offline
Others 1.31 -32.32 -30.50 -32.81 2.06 4.19 7.43
Subtotal 5.74 -17.62 -38.03 -23.12 9.02 15.07 29.99
Total 63.62 37.69 23.28 20.26 100.00 100.00 100.00
Note: The percentage of sales from each channel is the proportion of its sales in the prime operating
revenue.
(2) By brand
Change in
Change in Change in
Amount 2020 over Proportion Proportion Proportion
Brand (RMB100 the previous of 2022 of 2021 of 2020
previous year previous year
million) year (%) (%) (%)
YOY (%) YOY (%)
YOY (%)
Proya 52.64 37.46 28.25 12.43 82.74 82.87 79.66
Self-
TIMAGE 5.72 132.04 103.48 - 8.99 5.33 -
owned
OR 1.26 509.93 - - 1.98 - -
brands
Hapsode 1.87 188.27 - - 2.94 - -
Annual Report 2022
Other
brands
Subtotal 63.12 40.74 26.63 19.11 99.22 97.05 94.48
Cross-
Agency border
brands agency
brands
Total 63.62 37.69 23.28 20.26 100.00 100.00 100.00
Note: The proportion of sales of each brand is the proportion of its sales in the prime operating revenue;The
data of OR and Hapsode is incorporated into that of other brands in 2021 and therebefore, but is separately
listed in 2022 and thereafter.
(3) By category
Change in Change in Change in 2020
Amount Proportion Proportion Proportion
Category (RMB100 of 2022 of 2021 of 2020
previous year previous year previous year
million) (%) (%) (%)
YOY (%) YOY (%) YOY (%)
Skincare
(including 54.84 38.56 22.70 11.38 86.20 86.10 86.50
cleansing)
Make-up
cosmetics
Body & hair 1.26 509.93 - - 1.98 - -
Others 0.00 -100.00 -41.05 0.47 0.00 0.52 1.09
Total 63.62 37.69 23.28 20.26 100.00 100.00 100.00
Note: The " Body & hair " category is included in the "Skincare (including cleansing)" category before
RMB817 million net profit attributable to shareholders of the listed company, up by 41.88% YOY
RMB789 million net profit attributable to shareholders of the listed company net of non-recurring profit
and loss, up by 38.80% YOY
Indicator 2022 2021 2020 Notes
Mainly due to the increased
gross profit margin.
Mainly due to:
online direct sales; 2. Hero
product strategy;
Mainly due to:
as Hapsode) and increased
Annual Report 2022
spending in image
promotion.
Of which: image promotion fee
rate
Mainly due to:
increased by 67.15% YOY
(an absolute increase of
RMB51.43 million);
R&D expense ratio was
with 3.55% for the same
period last year).
Mainly due to:
rate (time/year) 2. Decreased average
balance of accounts
receivable.
days (days)
(time/year)
II. The Company's Industry Situation during the Reporting Period
According to the Guidelines for the Industry Classification of Listed Companies by the CSRC, the
Company falls under chemical raw material and chemical product manufacturing (classification code:
C26); according to the Industrial Classification for National Economic Activities (GB/T 4754-2017), the
Company falls under the manufacturing of daily chemical products (C268) and further under the
manufacturing of cosmetics (C2682).
According to statistics from the National Bureau of Statistics, in 2022, the total retail sales of consumer
goods reached RMB43,973.3 billion, down by 0.2% YOY; the total retail sales of cosmetics reached
RMB393.6 billion, down by 4.5% YOY (covering consumer goods above designated units).
III. The Company's Business Operations during the Reporting Period
(I) Main business
The Company seeks to build a new domestic cosmetics industry platform, and is primarily engaged in
R&D, production and sales of cosmetic products. Main brands owned by the Company include Proya,
TIMAGE, Off&Relax, Hapsode, CORRECTORS, INSBAHA, UZERO and Anya. The Company's own
brands have covered fields such as popular skincare, make-up, body & hair, and high-efficiency skincare:
Annual Report 2022
(1) Proya, focusing on technology skincare, designed for young white-collar female customers, priced at
RMB200 to RMB500, sold both online and offline.
(2) Hapsode, customized for young skin, especially for college students and other young female customers,
priced at RMB50 to RMB150, sold mainly online.
TIMAGE, a professional make-up brand with a new Chinese style, priced at RMB150 to RMB300, sold
online.
Off&Relax, developed and made in Japan, focusing on scalp care, priced at RMB150 to RMB200, sold
mainly online.
CORRECTORS, a high-efficiency skincare brand, priced at RMB260 to RMB600, sold online.
(II) Business models
Mainly online sales, supplemented by offline sales.
Online sales are mainly operated through direct sales and distribution. Direct sales are mainly carried out
on platforms such as Tmall, TikTok, JD, Kwai, and Pinduoduo. Distribution platforms include Taobao,
JD, and Vipshop.
Offline sales are mainly operated through dealers. Channels include cosmetics franchise stores,
supermarkets, and single-item stores.
Self-production is the main production model of the Company, supplemented by OEM production. The
skincare products of the Company are self-produced while make-up products are both self-produced and
OEM-produced. The Company has self-built skincare and make-up factories.
Independent R&D is the main R&D model of the Company, supplemented by industry-university-research
cooperation. The Company has maintained R&D cooperation with front-end research institutions and
high-quality raw material suppliers including the Institute of Microbiology, Chinese Academy of Sciences,
Zhejiang University of Technology, BASF China, Ashland China, Royal DSM Shanghai, LIPOTRUE
S.L., and Shenzhen Siyomicro Bio-tech.
IV. Analysis of Core Competitiveness during the Reporting Period
√ Applicable □ Not applicable
The Company's core competitiveness is mainly embodied by:
The Company adheres to the guidance of the 6*N strategy and puts it into practice amid the rapidly
changing market; consolidates and deepens the refined operation management system highlighting "R&D,
products, contents, operation"; constructs a self-driven organization featuring "culture-strategy-
mechanism-talents".
With a keen insight into consumers' needs, the Company keeps sharpening the strengths of hero products,
as well as building and improving the matrix of core hero products based on R&D and relying on quick
response and organizational capabilities.
The Company has built a self-driven and agile organization to serve brands in the second echelon that
have taken shape as well as brands under incubation. By building our own MCN team and content
Annual Report 2022
marketing team, the Company strengthens the internally circular ecosystem and connects Proya brands
with the external ecosystem.
V. Main Operations during the Reporting Period
Proya:
During the Reporting Period, Proya continued to deepen the "Hero Product Strategy"; primarily expanded
and upgraded the categories and efficacy of Elastic Brightening Youth Essence, Ruby Essence, and
Advanced Original product families; launched Advanced Original Face Cream, Advanced Original Face
Mask, and other new products; upgraded the Elastic Brightening Youth Activating Eye Cream, the Deep
Ocean Energy Wrinkless and Firming Moisture Cream, and the Advanced Original Essence to version 2.0,
which further solidified the mindset of the three product families; continued to explore high-end product
categories by launching the Inaugurating Nourishing Face Oil. These products give consumers more
options and better product experiences.
In 2022, Proya ranked 1st in the essence category, 4th in the mask category, 4th in the eye cream category,
and 9th in the face cream category on Tmall.
TIMAGE:
During the Reporting Period, TIMAGE further completed the deployment of facial make-up product lines,
and strengthened the impression of a "professional make-up artist" for consumers. Based on the facial
make-up category, TIMAGE created two segments of "Contour Line" and "Base Make-up". In addition
to contour, highlighter, and primer, TIMAGE created another six categories including liquid foundation,
concealer, and setting spray. The large base make-up category was supplemented while maintaining
advantages in contour lines, so that the base make-up category could establish a wider presence.
In 2022, the "tri-colored contour palette" and "dual-colored highlighter palette" of TIMAGE maintained
their advantages in the highlighter category, led the growth for the brand aggressively, improved product
penetration, and brought a large number of new customers to the brand. The tri-colored contour palette
ranked 1st in the highlighter category on Tmall. The dual-colored highlighter palette ranked 2nd in the
highlighter category on Tmall. The face primer ranked 1st in the sun block/primer category on Tmall. The
newly-launched tri-colored concealer palette ranked 1st in the concealer category on Tmall. The newly-
launched setting spray ranked top 10 in the setting spray category on Tmall.
Off&Relax (OR):
During the Reporting Period, the Company continued to optimize the product structure and facilitated the
construction of a scalp health care system for the brand.
Making scalp health a focus for the brand penetrating the market, OR solves users' pain points by rapidly
building two flagship products "Off&Relax Hot Spring Water SPA Shampoo" and "Off&Relax Hot Spring
Water Hair Mask". Based on the existing market environment and the characteristics of Japanese brands,
OR sorts out product selling points, provides various scalp and hair care products for high-net-value
consumers, who care user experience of cleansing and care products, to satisfy the demands of different
consumers.
Hapsode:
During the Reporting Period, Hapsode focused on building two cleansing products: Amino Acid Crystal
and Multiple Acids Purely Cleansing Mud Musk. Cleansing products allow the Company to rapidly reach
Annual Report 2022
young consumers with oily skin. Also, Hapsode completes the brand and category portfolio by launching
highly-effective skin cleansing products such as the "Ultra Soothing Facial Mask " and the "Oil Control
Balanced Serum", builds up a pyramid-typed product system for oily skin, and gradually improves
consumers' recognition of Hapsode as "an expert for the care of oily skin".
Proya:
During the Reporting Period, the Proya brand continuously built its brand around the "spirit of discovery",
focused on socially important issues such as gender equality, mental health and intimate relationships, and
created and communicated brand content on issues related to young people's growth and the target
audience for long-lasting effects. The Company carried out brand marketing events as follows:
(1) "Next Stop, Decisive Turn" in January: Proya delivered the hope for the new year with poems and
gave the audience a beautiful wish for good luck by organizing a subway poetry exhibition.
(2) "Gender is Not the Borderline, Prejudice is" on Women's Day in March: Aiming at gender equality
once again, Proya invited the female soccer WANG Shuang and the Nanxing Hexingtang Lion Dance
Team to shoot a documentary. Efforts were made to unite with seven brands to continuously strive for "a
gender equal world" with concrete actions.
(3) "Visible Only to Moms" on Mother's Day in May: Proya told the stories of "mothers", who are one of
the target consumer groups of the brand, to all family members, and invited experts of different fields to
participate in topic discussions. Differentiated from the "Thank You Mother" topic in the same period, the
event drummed up more discussions about the "division of household labor and responsibilities".
(4) "Dare to love, dare not to love" on the Chinese Valentine's Day in August: Proya worked with
FUJIFILM and photographers to discuss with consumers the form of self presentation in love in the way
of pictures and texts. Meanwhile, the Company proposed the brand technology mindset of "A Scientific
Choice for Skin" while working with the original content platform Zhihu to seek the answer to the question
"what is the best scientific choice for skin", and better help consumers understand the knowledge of
scientific skin care so they can choose products more wisely.
(5) "The Smallest Thing Is Important" in September: Proya advocated for school bullying victims, held
the attention to the signs of campus bullying that seem "insignificant", and called on the public to realize
the "multi-faced look" of campus bullying, so as to light up the road ahead for those growing amidst bullies.
(6) World Mental Health Day in October: Proya continued on the "Echo Project" brand marketing
campaign, paid sustaining attention to the mental health of young people, and output the brand attitude of
Proya. Joining hands with Beijing New Sunshine Charity Foundation, Douban, Owspace, Fangsuo
Commune, The Mind, Xiaoyuzhou Podcast APP, and xinli001.com, Proya presented everyone the
multiple possibilities of "emotional outlets".
(7) Pop-up series at 9 stores in 8 cities across China in November: By understanding the youngsters'
“Coffee & Alcohol Pop Up” mindset, Proya effectively integrated its hero products into a popular lifestyle
of young people, delivering a young brand image by catering to a lifestyle that better suits young
consumers.
TIMAGE:
During the Reporting Period, TIMAGE comprehensively deepened the brand recognition of "Chinese
make-up, original beauty" and had a dialog with Chinese female consumers with its unique
professionalism and aesthetics. By means of cross-border marketing, brand responsibility and care, and
brand values delivery, TIMAGE carried out the following marketing events:
Annual Report 2022
(1) "Unfiltered You" on Women's Day in March: Photographers were invited to output the opinions of
"original beauty", speak out for the brand, and interpret the concept of original beauty as female artists.
Starting from the insight into "filters", the event presents the brand concept and aesthetic tonality of
original beauty.
(2) "Witness the Original Beauty" in April: TIMAGE worked with Hippocampus, a professional
photography organization, to provide ID photo make-up of "original beauty". Hippocampus set up special
make-up tables at its 180 stores. Large-screen advertisements were launched in 5 major cities and online
topics were promoted to most searched hashtags to encourage consumers to share their changes in the
make-up before taking an ID photo over the years.
(3) "Life is Beautiful" in June: TIMAGE collaborated with the One Way Street Library to start topics.
Many art workers, music critics, directors, writers, and screenwriters sent articles and photos of their
experiences to share and output positive content. TIMAGE also produced peripheral sachets and gave
them to consumers for free.
(4) "Origin at the Beginning of Autumn" in August: TIMAGE produced a video with three female content
KOLs to present the life attitude that "It is Never too Late to Do" and encourage everyone to find more
possibilities in life.
(5) "You Are Beautiful in Every Single Way" in October: TIMAGE released the first high-quality brand
promotion film to set the latest visual identity of the brand, complete the full-chain communication loop
from "original beauty" to "Chinese make-up", and showcase the brand tonality of TIMAGE as well as its
attitude toward women's intrinsic growth.
(6) "See Your Beauty" in December: By producing thank-you letters and peripheral gifts, TIMAGE
interacted with fans to express its gratitude for the support of fans.
Proya:
Online:
(1) Tmall flagship store
During the Reporting Period, the Company continued to consolidate the hero product matrix strategy and
created super-hero products throughout the Internet. Combining factors of consumers, goods, and venues,
the Company deeply maintains the members and regular customers of stores, improves their possibilities
of repurchase and per customer transaction, increases the penetration into populations and high-value users
in tier 1 and tier 2 cities; heightens the ranking in core categories and draws the attention of consumers;
values the operation of self live-streaming and improves the proportion of self live-streaming. During
the "6.18" and "11.11" shopping festivals in 2022, the gross merchandise volume (GMV) of Proya
Flagship Store ranked 5th on Tmall Beauty and 1st among all Chinese products. In 2022, the GMV of
Proya Flagship Store ranked 4th on Tmall Beauty and 1st among all Chinese products.
(2) TikTok
During the Reporting Period, the Company strengthened self live-streaming and multi-matrix account
operation: increased the consumer maintenance efficiency while stepping up the maintenance of members
and fans; optimized the product structure, and dramatically increased the proportion of hero products and
the per customer transaction of stores. During the "6.18" and "11.11" shopping festivals in 2022, Proya
ranked 1st both on TikTok Beauty and among all Chinese products. In 2022, Proya ranked 3rd on TikTok
Beauty and 1st among all Chinese products.
(3) JD
Annual Report 2022
During the Reporting Period, the Company deeply implemented the hero product strategy and further
improved the sales proportion of hero products through efficient operation; improved the experience of
members, attracted new high-value customers, and increased the repurchase ratio to have a better insight
into the population and lock target consumers; optimized the quality of advertisement content, expanded
advertisement channels, and operated various channels in a more refined manner. During the "6.18" and
"11.11" shopping festivals in 2022, Proya ranked 1st both on JD Beauty and among all Chinese products.
In 2022, Proya ranked 10th on JD Beauty, and ranked 1st among all Chinese products.
Offline:
(1) Household chemicals: Corresponding rating systems are matched for strongly influential areas and
weekly influential areas of the brand to manage outlets in an targeted and differentiated manner. The
business logic is now driven by "dynamic sales" instead of "channel policies", so as to optimize bad
inventory in channels, ensure maximum benefits for retailers, and keep close eyes on the fund, inventory,
and benefits of retailers.
(2) Supermarkets: The brand power enables the department store channel to improve existing counters,
upgrade the image, and enhance the efficiency. The "Coffee & Alcohol Pop Up" initiative is held through
brand marketing campaigns at 9 stores in 8 cities including Hangzhou, Shenzhen, Ningbo, Suzhou,
Wenzhou, and Xi'an, so as to reach young target customers, strengthen the communication with the young
population, and promote the strategic cooperation between the brand and key systems. Also, the
cooperation with supermarkets is shrunk strategically.
(1) Organization: The Company continuously improves the organizational structure, opens up the brand
planning mode that connects both the upper level and the lower level, builds a management mode
integrating a product and delivery capability-focused "middle platform" and an "agile front", continues to
deepen the application of digital technologies, and promotes the incubation and growth of new businesses
through the empowerment of platforms and digitalization.
(2) Talents: The Company continuously promotes the talent supply chain mechanism for young and
international talents based on business needs, steps up the introduction of talents for research, development,
and information application, accurately and rapidly identifies, and efficiently utilizes talents, and gradually
builds a dynamic, competent and self-driven talent team through the combination of training and practices.
Through the dual-channel management, the Company improves the talent density, facilitates talent
development, and builds a talent echelon.
(3) Mechanism: The Company deepens a performance culture featuring high investment, high
performance and high returns, improves a performance management system emphasizing targets, process
and results; flexible utilizes the diversified incentive system covering short-term (quarterly performance
and project incentives), middle-term (annual performance dividends) and long-term (equity incentives and
partners) incentives. Also, the Company deepens the application of the project system, builds up a three-
level project management system consisting of the Company, business divisions, and departments, and
puts efforts on the end-to-end value chain and internal control projects to continuously hone the
organization capability.
During the Reporting Period, the Company took the R&D Innovation Center and the International
Academy of Sciences as the engine for innovation; improved the R&D of all key stages from raw material
to finished products, including fundamental research, formula development, physical and chemical
Annual Report 2022
analysis, raw material and product efficacy evaluation, etc. The Company continues to push the
construction of the International Academy of Sciences to conduct the research of skin texture, design
active substances, and verify their efficacy. The R&D Innovation Center continues to focus on researching
and developing new skin care and make-up products. Now the Shanghai R&D Center is under construction
and the Japan R&D Center is under preparation.
(1) Patents: During the Reporting Period, the Company newly applied for 21 national invention patents,
licensed invention patents and 17 design patents, totaling 32 patents obtained. As of the end of the
Reporting Period, the Company had 107 nationally licensed invention patents, 19 utility model patents,
and 99 design patents, totaling 225 patents obtained.
(2) Standard releasing: During the Reporting Period, the Company participated the drafting of two newly
released group standards, namely the TZHCA 017-2022 Hair Growth and Rest Period Quantity Ratio Test
Method and the T/ZHCA 019-2022 Cosmetics Anti-dandruff Efficacy Test Method. As of the end of the
Reporting Period, the Company had led or participated in the development of 14 national standards, 3
industry standards, and 14 group standards.
(3) Achievements and awards: During the Reporting Period, the Company was granted the following
honorable titles, including the Hangzhou "Kunpeng" Enterprise, One of the Top Ten Enterprise in China's
Light Industry ad Cosmetics Industry, One of the Top 100 Enterprises in Hangzhou Manufacturing
Industry, Third Prize in National Commercial Technology Advancement Award, Top Ten Make-up
Brands of Zhejiang in 2021. At the IFSCC International Cosmetic Science Conference, the Company
presented a number of its scientific achievements.
(4) Strategic cooperation: During the Reporting Period, the Company deepened the strategic cooperation
with existing partners, and performed strategic cooperation with Zhejiang Peptites Biotech Co., Ltd.
(1) Procurement and planning:
During the Reporting Period, the Company's supply chain system integrated the data and information from
various information platforms and timely calculated the demand for raw materials based on the demand
at the terminal while synchronizing inventory of suppliers, procurement cycle, and logistic information.
In the end, these information is accurately and agilely transmitted to all departments through the supply
chain information platform to reach a balance between terminal sales and productivity and provide a back-
end support for promotions on 6.18 and 11.11.
The Company has organized multiple training sessions for suppliers in terms of sustainable development,
actively adopts sustainable packaging, and achieves remarkable effect in reducing plastics, using
environmentally-friendly materials, and minimizing packaging.
(2) Production:
Based on market sales and needs, the Company makes productivity arrangement in advance, adheres to
lean manufacturing, and keeps improving production efficiency by using automated, intelligent, and
digital technologies. During the Reporting Period, the Company expanded some workshops, added
multiple production lines, and enhanced productivity to meet the demands during the 6.18 and 11.11
shopping festivals. In addition, the Company further strengthened the full-process quality management
and risk management, regularly held communication meetings of quality experiences for consumers,
received market feedback as soon as possible, and implemented project-specific management and closed-
loop tracking.
During the Reporting Period, the Company completed the "Massive Safety Training For A Million
Employees" program, allowing all employees to master and grasp laws and regulations related to safe
Annual Report 2022
production, enhance their awareness safe production hazards, and improve the safety emergency response
capability. The Huzhou Factory installed the independent fire control and management platform of the
provincial fire and rescue corps to systematically manage the fire control work. The Company upgraded
and renovated the fire-fighting system to control the whole process of smoke exhaust.
(3) Logistics:
During the Reporting Period, the Company continued to improve the logistics management system and
initiated the installation of the automated three-dimensional warehouse equipment. The Company was
rated as the winner of the "China Logistics Industry Golden Ant Award 2021 and 2022" by the organizing
committee of the LET-a CeMAT ASIA
(I) Analysis of main business
Unit: Yuan Currency: RMB
Amount for the
Amount for the
Account same period last Change ratio (%)
current period
year
Operating revenue 6,385,451,424.00 4,633,150,538.43 37.82
Operating cost 1,934,850,203.65 1,554,155,646.61 24.50
Selling expenses 2,785,837,352.95 1,991,534,076.73 39.88
General and administrative
expenses
Financial expenses -40,996,523.01 -7,484,395.13 447.76
Research and development
expenses
Net cash flow from operating
activities
Net cash flow from investing
-298,215,550.57 -341,823,618.60 Not applicable
activities
Net cash flow from financing
-65,251,320.73 489,615,295.96 -113.33
activities
Cause for change in operating revenue: mainly due to increased online sales.
Cause for change in operating cost: mainly due to increased operating costs resulting from the increase of
operating revenue.
Cause for change in sales expenses: In 2022, sales expenses amounted to RMB2.786 billion, accounting
for 43.63% of the operating revenue (compared with 42.98% for the same period last year). Selling
expenses increased by RMB794 million or 39.88% YOY, mainly due to an increase of RMB746 million
or 44.60% YOY in the image promotion expenses in the current period (used for the incubation of new
brands such as TIMAGE, OR, and brand re-shaping).
Cause for change in general and administrative expenses: In 2022, administrative expenses amounted to
RMB327 million, accounting for 5.13% of the operating revenue (compared with 5.12% for the same
period last year). General and administrative expenses increased by RMB90.31 million or 38.11% YOY,
mainly due to increased equity incentive expense for restricted shares, employee compensation, and
service fees.
Cause for change in financial expenses: The general impact of interest income and foreign exchange gains
and losses reduced financial expenses by RMB33.51 million.
Annual Report 2022
Cause for change in R&D expenses: In 2022, R&D expenses amounted to RMB128.01 million, an increase
of RMB51.43 million YOY, accounting for 2.00% of the operating revenue (compared with 1.65% for the
same period last year). In 2022, the parent company's R&D expense ratio was 4.31% (compared with 3.55%
for the same period last year).
Cause for change in net cash flow from operating activities: 1. mainly due to the YOY increase in the
operating revenue and the increase in cash received from commodity sales; 2. increased payment for goods;
Cause for change in net cash flow from investment activities: a YOY increase of RMB44million, mainly
due to decreased cash flow from investment activities caused by the disposal of the 52% equity of
Shanghai Healthlong Biochemical Technology Co., Ltd in the previous period. The event is not recognized
in the current period.
Causes for change in net cash flow from financing activities: a YOY decrease of RMB555 million, mainly
due to that (1) the cash received from absorbing investment (equity incentive expense for restricted shares)
is increased by RMB165 million; (2) the cash received from reclaiming borrowings is decreased by
RMB647 million (RMB747million of fund raised in the previous period by issuing the "Proya Convertible
Bond"); (3) the cash paid related to financing activities is increased by RMB43 million; (4) the cash paid
to distribute dividends, profits, or repay interest is increased by RMB28 million.
A detailed description of major changes in the Company's activities, profit composition or sources of profit
during the current period
□ Applicable √ Not applicable
√ Applicable □ Not applicable
For details, see the analysis in "1. Analysis of changes in accounts in the Income Statement and the Cash
Flow Statement", "(I) Analysis of main business", "V. Main Operations during the Reporting Period",
"Section III Management Discussion and Analysis" of this report.
(1). Main business activities by industry, product, region and sales model
Unit: Yuan Currency: RMB
Main business activities by industry
Gross Change in Change in Change in
profit operating operating gross profit
Industry Operating revenue Operating cost
margin revenue cost YOY margin YOY
(%) YOY (%) (%) (%)
Household Up by 3.32
chemicals 6,361,763,550.69 1,916,352,535.29 69.88 37.69 24.03 percentage
industry points
Main business activities by product
Gross Change in Change in Change in
profit operating operating gross profit
Product Operating revenue Operating cost
margin revenue cost YOY margin YOY
(%) YOY (%) (%) (%)
Skincare 5,483,643,868.53 1,616,998,071.19 70.51 38.56 29.68 Up by 2.02
Annual Report 2022
(including percentage
cleansing) points
Up by 9.16
Make-up
cosmetics
points
Up by 11.73
Body & hair 125,659,396.08 47,687,457.85 62.05 509.93 365.92 percentage
points
Others 0.00 0.00 - -100.00 -100.00
Up by 3.32
Total 6,361,763,550.69 1,916,352,535.29 69.88 37.69 24.03 percentage
points
Main business activities by region
Gross Change in Change in Change in
profit operating operating gross profit
Region Operating revenue Operating cost
margin revenue cost YOY margin YOY
(%) YOY (%) (%) (%)
Up by 0.03
Northeast
China
points
Up by 6.61
North China 69,783,559.44 26,385,241.51 62.19 9.94 -6.42 percentage
points
Up by 8.26
East China 712,780,874.13 298,564,036.15 58.11 4.34 -12.84 percentage
points
Up by 2.51
South China 44,924,050.01 18,046,419.43 59.83 -41.91 -45.33 percentage
points
Decreased by
Central China 149,971,246.18 61,852,910.54 58.76 -15.39 -11.34
percentage
points
Up by 0.22
Northwest
China
points
Up by 1.09
Southwest
China
points
Up by 46.97
Hong Kong
and overseas
points
Up by 0.90
Others (e-
commerce)
points
Annual Report 2022
Up by 3.32
Total 6,361,763,550.69 1,916,352,535.29 69.88 37.69 24.03 percentage
points
Main business activities by sales model
Gross Change in Change in Change in
profit operating operating gross profit
Sales model Operating revenue Operating cost
margin revenue cost YOY margin YOY
(%) YOY (%) (%) (%)
Up by 2.63
Online 5,788,034,421.87 1,684,190,321.43 70.90 47.50 35.26 percentage
points
Up by 2.60
Offline 573,729,128.82 232,162,213.86 59.53 -17.62 -22.60 percentage
points
Up by 3.32
Total 6,361,763,550.69 1,916,352,535.29 69.88 37.69 24.03 percentage
points
Description of main business activities by industry, product, region and sales model
(1) Description of growth in household chemicals: The growth in prime operating revenue this year was
mainly due to RMB5.788 billion online sales (accounting for 90.98% of the prime operating revenue), an
increase of RMB1.864 billion or 47.50% YOY.
(2) Description of growth in make-up cosmetics: mainly due to RMB572 million sales of TIMAGE that
falls under the make-up cosmetics category during the Reporting Period, an increase of RMB326million
or 132.04% YOY.
(3) Description of growth in body and hair: mainly due to RMB126 million sales of OR that falls under
the Body & hair category during the Reporting Period, an increase of RMB105 million or 509.93% YOY.
(4) Description of growth in others: No income of other categories is reported this year, mainly due to that
the Company no longer operated the cross-border brand agency business.
(5) Description by region: The sales of other regions declined, except e-commerce, Hong Kong and
overseas, East China, and North China, mainly due to a YOY fall in offline sales.
(2). Analysis table of production and sales
√ Applicable □ Not applicable
Change in Change Change in
Major
Unit Production Sales Inventory production in sales inventory
products
YOY (%) YOY (%) YOY (%)
Household
Piece 314,064,556 276,025,390 90,180,032 42.44 27.66 72.95
chemicals
Description of production and sales
The quantities in the above table include self-produced and OEM products, excluding the quantity of
products produced through cross-border brand agency.
(3). Performance of major purchase contracts and major sales contracts
□ Applicable √ Not applicable
Annual Report 2022
(4). Cost statement analysis
Unit: RMB
Statement by industry
Proportio
Proportion n% in
% in total Amount for the total cost YOY Descri
Cost Amount for the
Industry cost for same period for the change ption
composition current period
the current last year current ratio (%)
period (%) period
(%)
Raw materials 66.20 63.18 29.97
Labor and
manufacturing 107,432,847.50 5.61 81,119,950.03 5.25 32.44
Household cost
chemicals 316,528,909.0
Outsourcing 302,956,467.34 15.81 20.49 -4.29
industry 8
Freight 237,269,640.00 12.38 11.09 38.49
Subtotal 100.00 100.00 24.03
Statement by product
Proportio
Proportion n in total
in total Amount for the cost for YOY Descri
Cost Amount for the
Product cost for same period the same change ption
composition current period
the current last year period ratio (%)
period (%) last year
(%)
Raw materials 75.97 73.31 34.39
Labor and
manufacturing 101,753,659.87 6.29 74,591,026.00 5.98 36.42
Skincare cost
(including 113,127,555.8
Outsourcing 92,297,157.26 5.71 9.07 -18.41
cleansing) 1
Freight 194,513,686.83 12.03 11.64 34.08
Subtotal 100.00 100.00 29.68
Raw materials 40,084,933.46 15.93 62,041,264.64 23.55 -35.39
Make-up
Labor and
cosmetics 5,679,187.63 2.26 6,528,924.03 2.48 -13.01
manufacturing
Annual Report 2022
cost
Outsourcing 174,194,228.29 69.21 64.91 1.88
Freight 31,708,656.87 12.60 23,869,561.68 9.06 32.84
Subtotal 251,667,006.25 100.00 100.00 -4.46
Raw materials 175,079.76 0.37 - - -
Labor and
manufacturing - 0.00 - - -
Body &
cost
hair
Outsourcing 36,465,081.79 76.46 8,307,839.73 81.17 338.92
Freight 11,047,296.30 23.17 1,927,244.65 18.83 473.22
Subtotal 47,687,457.85 100.00 10,235,084.38 100.00 365.92
Raw materials - - - - -
Labor and
manufacturing - - - - -
Others cost
Outsourcing - - 24,114,635.62 98.16 -100.00
Freight - - 452,529.45 1.84 -100.00
Subtotal - - 24,567,165.07 100.00 -100.00
Other explanations
None
(5). Changes in consolidation due to changes in the equity of major subsidiaries during the
Reporting Period
√ Applicable □ Not applicable
For details, see "VIII. Changes in the Consolidation Scope", "Section X Financial Report".
(6). Significant changes or adjustments to the Company's business activities, products or services
during the Reporting Period
□ Applicable √ Not applicable
(7). Major sales customers and major suppliers
A. The Company's major customers
√ Applicable □ Not applicable
The sales of top five customers amounted to RMB798.31million, accounting for 12.55% of the total annual
sales; the sales of related parties of such top five customers amounted to RMB0, accounting for 0.00% of
the total annual sales.
Circumstances where a single customer contributed to more than 50% of the total sales, top 5 customers
included a new customer, or the Company relied heavily on a small number of customers during the
Reporting Period
□ Applicable √ Not applicable
Annual Report 2022
B. The Company's major suppliers
√ Applicable □ Not applicable
The purchase amount of top 5 suppliers amounted to RMB393.25million, accounting for 20.57% of the
total annual purchase amount; the purchase amount of related parties of such top 5 suppliers amounted to
RMB0, accounting for 0.00% of the total annual purchase amount.
Circumstances where a single supplier accounted for more than 50% of the total procurement, top 5
suppliers included a new supplier, and the Company relied heavily on a small number of suppliers during
the Reporting Period
□ Applicable √ Not applicable
Other explanations
None
√ Applicable □ Not applicable
Unit: RMB
Change for the
Expense item 2022 2021 Growth rate (%)
current period
Selling
expenses
General and
administrative 327,296,749.37 236,988,519.23 90,308,230.14 38.11
expenses
Research and
development 128,009,104.49 76,583,650.83 51,425,453.66 67.15
expenses
Financial
-40,996,523.01 -7,484,395.13 -33,512,127.88 Not applicable
expenses
(1). Statement of R&D investment
√ Applicable □ Not applicable
Unit: RMB
Expensed R&D investment for the 128,009,104.49
current period
Capitalized R&D investment for the 0.00
current period
Total R&D investment 128,009,104.49
Total R&D investment in operating 2.00
revenue (%)
Capitalization of R&D investment (%) 0.00
(2). Statement of R&D personnel
√ Applicable □ Not applicable
Annual Report 2022
Number of R&D personnel 229
Percentage of R&D personnel (%) 7.21
Educational background structure
Educational level Number of persons
PhD 4
Master 69
Bachelor 123
Associate 31
High school and below 2
Age structure
Age range Number of persons
Under 30 (exclusive) 100
(3). Description
□ Applicable √ Not applicable
(4). Cause for significant changes in the composition of R&D personnel and the impact on the future
development of the Company
□ Applicable √ Not applicable
√ Applicable □ Not applicable
Unit: RMB
Amount for the
Amount for the Growth rate
Item same period Description
current period (%)
last year
Mainly due to:
operating revenue and the
Net cash flow
increase in cash received from
from
operating
activities
goods;
image promotion fees.
Net cash flow Mainly due to the disposal of
from - Not the 52% equity of Shanghai
-298,215,550.57
investing 341,823,618.60 applicable Healthlong Biochemical
activities Technology Co., Ltd. in the
Annual Report 2022
previous period. The event is
not recognized in the current
period.
Mainly due to:
absorbing investment (equity
incentive expense for
restricted shares) is increased
by RMB165 million;
reclaiming borrowings is
Net cash flow decreased by RMB647million
from (RMB747million of fund
-65,251,320.73 489,615,295.96 -113.33
financing raised for the previous period
activities by issuing the "Proya
Convertible Bond");
financing activities is
increased by RMB43 million;
dividends, profits, or repay
interest is increased by
RMB28 million.
Cash received
from the sale
of goods and 7,088,465,997.21 38.17
the rendering
of services
Other cash
Mainly due to the increased
received
bank interest and government
related to 99,500,140.40 54,614,521.56 82.19
subsidies received in the
operating
current period.
activities
Cash paid for
Mainly due to the expanded
goods
purchased 2,241,842,834.78 38.69
and services
production.
received
Payments of Mainly due to the expanded
various types 660,096,624.31 432,668,333.55 52.56 sales scale and the improved
of taxes profitability of the Company.
Other cash Mainly due to the expanded
paid related to 1,864,985,801. sales scale and the increased
operating 02 payment for image promotion
activities expenses.
Annual Report 2022
Net cash
received from
disposal of Mainly due to the increased
fixed assets, cash receipts from disposals
intangible of fixed assets in the current
assets and period
other long-
term assets
Mainly due to the new equity
investment of RMB90 million
Cash paid for
investments
Holdings Co., Ltd. in the
current period.
Mainly due to the disposal of
equity in Shanghai Healthlong
Biochemical Technology Co.,
Other cash
Ltd. and payment of other
paid related to
investing
investment activities in the
activities
previous period. The event is
not recognized for the current
period.
Mainly due to the receipt of
payment for the equity
Cash received
incentive expense for
from capital 165,676,000.00 700,000.00 23,568.00
restricted shares from
contributions
employees in the current
period.
Mainly due to the issuance of
“Proya Convertible Bond” in
Cash received
the previous period for
from 300,000,000.00 946,996,018.87 -68.32
RMB747 million. This event
borrowings
is not recognized in the
current period.
Mainly due to the payment for
Other cash
acquisition of minority equity
paid related to
financing
Cosmetics Co., Ltd. in the
activities
current period.
(II) Description on significant changes in profit caused by non-primary business activities
□ Applicable √ Not applicable
(III) Analysis of assets and liabilities
√ Applicable □ Not applicable
Annual Report 2022
Unit: RMB
Amount as
Amount as
of the end in total in total YOY
of the end of
Item of the assets assets change Description
the previous
current （%） （%） ratio (%)
period
period
Mainly due to
increased cash
Cash and cash 3,161,003, 2,391,048,24
equivalents 085.05 9.81
operating activities
in the current period.
Mainly due to the
reduced balance of
Receivable
financing
bills as of the end of
the current period.
Mainly due to the
increased
prepayment for
Prepayments 1.58 1.26 56.63 image promotion
.15 1
expenses as of the
end of the current
period.
Mainly due to the
increased stock
quantity for 1Q2023
Inventories 11.58 9.67 49.36 arising from the
expanded sales
scope of the
Company.
Mainly due to the
new equity
Other equity investment of
instrument 2.53 1.22 159.57 RMB90 million to
investments Hangzhou Gaolang
Holdings Co., Ltd.
in the current period.
Mainly due to the
additional
investment in the
Construction 207,378,93 108,678,896.
in progress 5.86 27
Production Base
Construction Project
(Phase I) and the
Annual Report 2022
Amount as
Amount as
of the end in total in total YOY
of the end of
Item of the assets assets change Description
the previous
current （%） （%） ratio (%)
period
period
Longwu R&D
Center Construction
Project.
Mainly due to the
addition of an office
Right-of-use 6,410,634. Not
assets 25 applicable
of lease contracts in
the current period.
Long-term Mainly due to the
prepaid 0.33 0.64 -35.67 amortization of
.46 1
expenses renovation costs.
Mainly due to that
the trademark
amount of
RMB39.90 million
(SINGULADERM)
in the beginning
Other non- 5,554,726. 44,167,303.5
current assets 06 6
transferred to
intangible assets
since the trademark
transfer registration
is completed in the
current period.
Mainly due to the
increase of the
Contract 174,602,83 91,151,985.3
liabilities 3.91 2
and the point
conversion rate.
Mainly due to the
increased benefits
payable to
employees at the
Employee
compensation 2.16 1.70 58.86
payable
expanded operation
scale and continuous
staffing adjustment
in the current period.
Taxes 152,918,87 2.65 99,893,176.9 2.16 53.08 Mainly due to the
Annual Report 2022
Amount as
Amount as
of the end in total in total YOY
of the end of
Item of the assets assets change Description
the previous
current （%） （%） ratio (%)
period
period
payable 1.45 7 expanded sales scale
and the improved
profitability of the
Company.
Mainly due to
increased restricted
Other 216,392,18 62,162,153.5
payables 3.41 5
obligations at the
end of the period.
Non-current Mainly due to the
liabilities due 2,549,452. Not transfer of lease
within one 14 applicable liabilities due within
year one year.
Mainly due to the
addition of an office
Lease 3,718,119. Not
liabilities 41 applicable
of lease contracts in
the current period.
Mainly due to the
adjustment of
offline channels, the
intensified
adjustment of the
department store
Estimated 59,282,928 10,812,084.8
liabilities .68 8
optimization of
household
chemicals outlets,
and the shrinking of
the supermarket
channel.
Mainly due to the
increased deferred
Deferred income tax
income tax 0.33 8,408,158.81 0.18 126.20 liabilities accrued
.67
liabilities for one-time
depreciation of fixed
assets.
Share capital 4.91 4.34 41.05
Annual Report 2022
Amount as
Amount as
of the end in total in total YOY
of the end of
Item of the assets assets change Description
the previous
current （%） （%） ratio (%)
period
period
implemented the
plan for the
capitalization of
capital reserves and
the 2022 restricted
share incentive plan.
Mainly due to that
the Company
implemented the
incentive plan,
Treasury 164,976,00
stock 0.00
liabilities for
repurchase
obligations and
included them in the
treasury stock.
Mainly due to the
changes in
Other - translation
- Not
comprehensiv 1,918,603. -0.03 -0.03 difference of
e income 07 financial statements
denominated in
foreign currencies.
Mainly due to the
withdrawal of
statutory surplus
reserve according to
the net profit of the
parent company.
Surplus 141,759,73 100,634,780. The statutory
reserve 4.50 00 surplus reserve does
not need to be
withdrawn if the
cumulative amount
reaches fifty percent
or more of the
registered capital.
Retained 2,300,384, 1,696,978,06 Mainly due to
profits 763.19 4.52 increased net profit
Annual Report 2022
Amount as
Amount as
of the end in total in total YOY
of the end of
Item of the assets assets change Description
the previous
current （%） （%） ratio (%)
period
period
in the current period.
Other explanations
None
√ Applicable □ Not applicable
(1) Scale of assets
Including RMB216.10million of overseas assets, accounting for 3.74% of the total assets.
(2) Description of a high percentage of overseas assets
□ Applicable √ Not applicable
√ Applicable □ Not applicable
Unit: RMB
Item Ending book value Cause for restrictions
Cash and cash Including transformer deposit, Pinduoduo deposit,
equivalents L/C deposit, Tmall deposit, and Alipay deposit, etc.
Total 35,670,000.00
□ Applicable √ Not applicable
(IV) Analysis of industry operational information
√ Applicable □ Not applicable
Refer to the "Analysis of chemical operational information" below
Annual Report 2022
Analysis of chemical operational information
(1).Industry policies and changes
□ Applicable √ Not applicable
(2).Major sub-industries and industrial status of the Company
√ Applicable □ Not applicable
See the description in "(I) Industry pattern and trends", "VI. Discussion and Analysis of the Company's
Future Development", "Section III Management Discussion and Analysis".
Industrial status of the Company:
According to comprehensive industry data analysis, the Company has gained some market share in the
domestic cosmetics market.
(1). Major business models
√ Applicable □ Not applicable
See the description of business models in "III. Business Activities Carried out by the Company during the
Reporting Period", "Section III Management Discussion and Analysis".
Adjusted business models during the Reporting Period
□ Applicable √ Not applicable
(2). Major products
√ Applicable □ Not applicable
Major upstream raw Major downstream Major price
Products Sub-industry
materials application areas influencing factors
Humectant, active
Personal income,
Skincare substance, grease
skin type, lifestyle
(including Skincare wax, emulsifier, Skincare, cleansing
habits, brand
cleansing) surfactant, essence,
preference
packaging
Grease wax, Personal income,
Make-up Make-up, beauty,
Make-up emulsifier, toner, living habits, brand
cosmetics contour
essence, packaging preference
Personal income,
Surfactant,
skin type, lifestyle
Body & hair Body & hair humectant, essence, Body & hair
habits, brand
packaging
preference
(3). R&D innovation
√ Applicable □ Not applicable
See "5. New R&D strategy", "V. Main Operations during the Reporting Period", "Section III Management
Discussion and Analysis".
Annual Report 2022
(4). Production technologies and process
√ Applicable □ Not applicable
The Company's products are mainly divided into skincare (including cleansing) and make-up cosmetics.
Their production processes are shown as follows:
Skincare raw Functional
materials components
Heat
Heating to Homogeneous preservation Cooling Filtration and
dissolve emulsification and mixing discharge
Inspection
of semi-
finished
products
Warehousing Cartoning Packing Filling Storage
Inspection of
finished products
Cleansing
raw materials
Heat
Heating and preservation Cooling Filtration and
mixing and mixing discharge
Inspection
of semi-
finished
products
Warehousing Cartoning Packing Filling Storage
Inspection of
finished products
(1) Cosmetic powder blocks:
Annual Report 2022
Powder raw Functional Inspection of
materials components semi-finished
products
Mixing Toning Crushing and Discharge Powder storage
sieving
Warehousing Cartoning Packing Forming Filling
Aluminum plate
Inspection of Visual
finished inspection
products
(2) Lipstick cosmetics
Wax-based Functional
raw materials components
Heating to Toning Defoaming Filtration and
dissolve discharge
Inspection
of semi-
finished
products
Warehousing Cartoning Packing Molding Storage
Inspection of Visual
finished inspection
products
(3) Eyelashes and eyeliners
Basic raw Functional
materials components
Heating to Homogeneous Toning Cooling Discharge
dissolve emulsification Inspection
of semi-
finished
products
Warehousing Cartoning Packing Filling Storage
Inspection of
finished
products
(5). Production capacity and operation status
√ Applicable □ Not applicable
Unit: RMB ’0,000 Currency: RMB
Annual Report 2022
Amount of Estimated time
Capacity Capacity investment in of completion
Main plant or Designed
utilization under capacity of capacity
project capacity
ratio (%) construction under under
construction construction
Huzhou Skincare 300million 86.67 101.18 16,801.64 December 2024
Factory pcs million pcs
Huzhou 40 million pcs 25.06
Cosmetics
Factory
Change in production capacity
□ Applicable √ Not applicable
Adjustment of product line and optimization of capacity structure
□ Applicable √ Not applicable
Unexpected shutdown
□ Applicable √ Not applicable
(1). Basic information on major raw materials
√ Applicable □ Not applicable
YOY price
Major raw Settlement Purchase
Purchase model change ratio Consumption
materials method quantity
(%)
Mainly by
Settle
competitive
within the About 1,560
Packaging procurement, About 1,510
payment -14.77 million
materials except for some million pieces
period as pieces
strategic
agreed
suppliers
Mainly by
competitive
procurement,
while Settle
establishing within the
Raw About 2,052 About 1,953
long-term payment 5.31
material_humectant tons tons
strategic period as
cooperation agreed
with
advantageous
suppliers
Raw Mainly by price Settle About 754 About 720
material_active inquiry and within the tons tons
Annual Report 2022
substance comparison, payment
while period as
performing agreed
diversified
cultivation of
suppliers with a
single source of
supply
Mainly by
competitive
procurement,
while Settle
Raw establishing within the
About 850 About 810
material_grease long-term payment 24.62
tons tons
wax strategic period as
cooperation agreed
with
advantageous
suppliers
Mainly by
competitive
procurement,
Settle
while
within the
Raw cooperating About 160 About 150
payment 31.46
material_emulsifier with industry- tons tons
period as
leading
agreed
suppliers on
some raw
materials
Mainly by
competitive
procurement,
while Settle
establishing within the
Raw About 102
long-term payment 2.89 About 92 tons
material_sunscreen tons
strategic period as
cooperation agreed
with
advantageous
suppliers
Impact of changes in the prices of major raw materials on the Company's operating costs: Rising prices of
raw materials increase operating costs.
(2). Basic information on major sources of energy
√ Applicable □ Not applicable
Annual Report 2022
YOY price
Purchase Settlement Purchase
Major energy change ratio Consumption
model method quantity
(%)
Prepayment and
monthly
Fixed settlement or
agreement with payment on
Water 0.00 201,279 tons 201,279 tons
the local water demand
company according to the
local
requirements
Prepayment and
monthly
Fixed
settlement or
agreement with
payment on 11.76 million 11.76 million
Electricity the local power 0.00
demand kwh kwh
supply
according to the
company
local
requirements
Prepayment and
monthly
Fixed
settlement or
agreement with
payment on
Gas the local gas 38.67 368,936 cbm 368,936 cbm
demand
supply
according to the
company
local
requirements
Impact of changes in the prices of major energy on the Company's operating costs: The price of gas is
increased by 38.67%, resulting in a slight increase in operating cost since the consumption of gas only
takes up a small part in the energy structure.
(3). Countermeasures for risks of fluctuations in the prices of raw materials
Major financial products such as derivatives
□ Applicable √ Not applicable
(4). Basic information on other methods adopted such as staged reserves
□ Applicable √ Not applicable
(1). Basic information on the Company's primary business activities by sub-industry
√ Applicable □ Not applicable
Unit: RMB ’0,000 Currency: RMB
Change Gross profit
Sub- Operating Operating Gross Change in Change in
in gross margin for
industry revenue cost profit operating operating
profit products in
Annual Report 2022
margin revenue cost YOY margin the same
(%) YOY (%) (%) YOY (%) industry and
field
Skincare No public
(including 70.51 38.56 29.68 2.02 information
cleansing) available
No public
Make-up
cosmetics
available
No public
Body &
hair
available
No public
Others 0.00 0.00 - -100.00 -100.00 - information
available
(2). Basic information on the Company's primary business activities by sales channel
√ Applicable □ Not applicable
Unit: RMB ’0,000 Currency: RMB
Change in operating revenue
Sales channel Operating revenue
YOY (%)
Online 578,803.44 47.50
Offline 57,372.91 -17.62
Statement of accounting policies
□ Applicable √ Not applicable
(1). Basic information on major work safety accidents of the Company during the Reporting Period
□ Applicable √ Not applicable
(2). Major environmental violations
□ Applicable √ Not applicable
Annual Report 2022
(V) Analysis of investment
Overall analysis of external equity investments
√ Applicable □ Not applicable
Ending amount Beginning amount
Item Impairment Impairment
Carrying amount Book value Carrying amount Book value
provision provision
Other equity instrument
investments
Investment in joint
ventures
Investment in associates 216,906,642.52 81,442,213.22 135,464,429.30 181,555,246.18 14,670,468.59 166,884,777.59
Total 366,377,990.68 81,442,213.22 284,935,777.46 241,032,404.86 14,670,468.59 226,361,936.27
For details, see the description in "17. Long-term equity investments" and "18. Other equity instrument investments ", "VII. Notes to the Items in Consolidated
Financial Statements", "Section X Financial Report" of this report.
□ Applicable √ Not applicable
□ Applicable √ Not applicable
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Profit and loss Impairment
Beginning Accumulated Amount of Amount of
Asset category from changes accrued for the Other changes Ending amount
amount change in fair purchase for sale/redemption
in fair value current period
Annual Report 2022
for the current value included the current for the current
period in equities period period
Other 56,402,400.00 90,000,000.00 146,402,400.00
Total 56,402,400.00 90,000,000.00 146,402,400.00
For details, refer to the particulars contained in "18. Description of other equity instrument investments" in "VII. Notes to the Items of Consolidated Financial
Statements", of "Section X Financial Report" of this report
Description of securities investment
□ Applicable √ Not applicable
Description of private equity investment
□ Applicable √ Not applicable
Description of derivatives investment
□ Applicable √ Not applicable
Annual Report 2022
□ Applicable √ Not applicable
(VI) Sale of major assets and equity
□ Applicable √ Not applicable
(VII) Analysis of major holding companies
√ Applicable □ Not applicable
Unit: RMB’0,000
Major
Major Nature of products Registered Total Net Holding or
Net assets
subsidiary business and capital assets profit shareholding
services
Zhejiang
Meiligu
Cosmetics
Electronic Cosmetics 1,000.00 62,360.91 25,376.57 8,238.00 Holding
sales
Commerce
Co., Ltd.
Hangzhou
Proya Cosmetics -
Cosmetics 5,000.00 27,637.31 5,554.91 Holding
Trade Co., sales 5,333.47
Ltd.
(VIII) Structured entities controlled by the Company
□ Applicable √ Not applicable
VI. Discussion and Analysis of the Company's Future Development
(I) Industry pattern and trends
√ Applicable □ Not applicable
According to statistics from the National Bureau of Statistics, in 2022, the total retail sales of consumer
goods reached RMB43,973.3 billion, down by 0.2% YOY; the total retail sales of cosmetics reached
RMB393.6 billion, down by 4.5% YOY (covering consumer goods above designated units).
(II) Development strategy of the Company
√ Applicable □ Not applicable
Winning Now Winning Later, "6*N" strategy, enhanced core competence, and enriched brand matrix.
"6" represents new consumption, new marketing, new organization, new mechanism, new technology,
new intelligent manufacturing; "N" represents N brands created
(1) New consumption: Innovative services to meet more consumer needs and consumer value;
(2) New marketing: Digital marketing, fine omni-channel operation, and accurate and advanced consumer
insight. Focus on future marketing possibilities in new areas and make preparations;
(3) New organization: An efficient organization that is flat, platform-based, self-driven and collaborative;
(4) New mechanism: A flexible, diversified, business-oriented incentive mechanism to be established;
Annual Report 2022
(5) New technology: The focus on basic scientific research and the actions taken to establish the presence
of new raw materials and new R&D technologies, develop more R&D partners and resources in different
fields to form a global R&D landscape, provide technological guarantee for targeted product enhancement,
and create a sustainable and unique R&D technological competitiveness; measures taken to further
improve the intelligent operation management system and carry out targeted transformation toward digital
intelligence and informatization to improve operational refinement and management efficiency in business
and organization and achieve process transparency and accurate decision-making;
(6) New intelligent manufacturing: Creation of an agile and flexible supply chain to serve the hero product
matrix and the application of the digital management system to improve production quality, strengthen the
supply chain supervision, and guarantee product quality.
- The core connotation of "6*N" is to enable or incubate different brands that meet different needs of
different consumers based on the above six capabilities.
While Proya, as the main brand, maintains rapid and steady development, the Company creates, replicates,
enables and incubates different brands to meet the different needs of different consumers based on the
successful experience and core competence, enlarges the customer base, extends the demand coverage of
the life cycle of customers, gradually builds and improves the multi-brand matrix, and achieves long-term
sustainable growth.
(III) Business plan
√ Applicable □ Not applicable
I. Construction of a multi-category and multi-brand matrix
Proya:
(1) Brand: Better establish the brand awareness of "A Scientific Choice for Skin" by more scientific
product portfolios, better and more delicate product experiences, and the output of the reasonable concept
of skincare, thus taking the brand to a new level. Maintain outstanding products as the core driver of the
brand, and make satisfactory services and experiences consumers' reason for choice. Dig deeper into the
brand's insistence on products and belief in scientific formula, communicate with consumers in an all-
around manner, deliver needed products and great experiences to consumers, and make Proya a leader in
the era of "home-made products".
(2) Product: Better upgrade the product in formula, efficacy, design, and use experiences around the core
mid-end product line, consolidate the status of hero products; better divide the needs of users with different
skin types, reserve richer and more detailed efficacy and categories, and expand the coverage to more
consumers to satisfy their needs for skin care.
(3) Marketing: 1) In 2023, Proya will keep carving the brand by taking "exploration and discovery" as
the core, continuously express our opinions in gender equality, family responsibility, intimate relationships,
young people's growth, mental health, and other socially important issues, so as to expand the impact of
brand long-termism beyond brand incidents. 2) Based on the brand identity of the year, Proya will build
its own online public welfare platform to carry long-term public welfare actions and content under the
brand's core projects and extend care of the brand.
(4) Channel:
products, penetrate into the market of the essence category as the core of the brand, enhance the penetration
of face cream, face mask, facial care kits, and other core categories, further improve the proportion of
high-value users, better refine the operation, improve services, and lift the brand mindset.
Annual Report 2022
achieve integrated operation of brand recommendation and purchase, improve the overall operation
efficiency, establish presence in the shelf e-commerce on TikTok, better work with high-quality KOLs,
and achieve diversified and healthy brand development in TikTok.
cooperation to realize resonance inside and outside the site; change to user-based operation for the
membership section with the focus on improving service level and user experiences and maintaining user
loyalty; continuously strengthen the refined operation of all traffic channels.
products and primarily aim at the direction of basic moisturizing and anti-aging products; beef up the
digitalization capability to empower offline sales, improve product turnover rate, and raise the satisfaction
of channel customers. Department stores: Focus on influential business district and large department store
groups, explore the new "online+offline" sales mode, and increase the repurchase rate and per customer
transaction.
Hapsode:
(1) Brand: Continuously consolidate the strategy of hero cleansing products, take the existing advantage
in the oil remover category, expand the customer base of Hapsode, and increase brand penetration in the
young population.
(2) Product: Complete the layout of the full cleansing product line based on Hapsode's pyramid-typed
product system for oily skin. Keep improving the product efficacy of oil control in 2023 as the core
competitiveness of an oily skin care brand; create the product combo for oily and sensitive skin for the
soothing product line around the Ultra Soothing Facial Mask and the Ultra Soothing Serum.
(3) Marketing: Keep focusing on college students as the core target consumers and carry out serial brand
events to deliver Hapsode's young and dynamic brand image.
(4) Channel: Focus on TikTok and Tmall and put more efforts on self live-streaming.
(1) Brand: Focus on building a professional brand of "Chinese make-up" around the brand core of
"Chinese make-up, original beauty" to deliver "original beauty" experiences to consumers. Consolidate
brand professionalism with marketing content, improve brand services by seeing through the target
customer group, and enhance the brand's sense of value by innovating in brand peripherals and gifts.
(2) Product: Further expand the "Contour Line" advantages and keep increasing the brand penetration.
Continue to establish presence in the large make-up base category, reserve sub-categories such as liquid
foundation, cream foundation, cushion, and powder & pact, complete the make-up base mindset, and
create a "professional" brand image.
(3) Marketing: Carry out content marketing around new product launch, festival topics, and IP
cooperation.
(4) Channel: Focus on Tmall and TikTok.
(1) Brand: Establish the brand image of a scalp health expert from Japan, stabilize the product strength,
and strengthen the core brand efficacy as "a scalp health solution", allowing core consumers to recognize
the brand values of OR.
(2) Product: Further bring together international R&D capabilities and complete the global supply chain
system. Rely on Japan's leading fundamental research and technological development advantages to erect
Annual Report 2022
a technological barrier and offer consumers a complete scalp health solution. Make further presence in the
scalp solution market, upgrade hair masks, hair care essence oil, and other hair care products, and create
a new flagship product line.
(3) Marketing: Output the brand personality and accumulate brand assets by communicating OR's brand
trait as a "professional scalp health care expert". Launch product marketing based on the core mindset of
a top Japanese brand and a scalp health expert, allow consumers to better understand the conditions of
their scalp, and help them build up the basic scalp health knowledge base; continue with the "tiny but
beautiful" brand marketing, advocate a lifestyle from scalp health to mental and physical health, penetrate
into the core population, and enhance the brand likability among target consumers.
(4) Channel: Focus on Tmall (Tmall Global, Tmall Flagship Store) and TikTok in the Chinese Mainland;
make more breakthroughs in physical stores in Japan while increasing the online traffic.
II. R&D construction
In 2023, the Company will keep adopting the internationalization strategy, complete and upgrade the
research and development system, introduce high-level and cross-discipline talents with a global vision
covering chemistry, chemical engineering, pharmacology, dermatology, statistics, and computational
biology; establish research and development laboratories at home and abroad based on R&D advantages
in all regions across the globe. While completing the system of consumer and technology insight,
technology development, raw material development, formula, product development, and efficacy
evaluation, the Company also strengthens strategic partnerships with globally-leading research institutions
specializing in biotechnologies, life sciences, cytology, and dermatology.
(1) Fundamental research: Continue to plan for the development pipeline of new technologies and new
raw materials, and develop advanced enabling technologies in computational biology, genomics, and
proteomics.
(2) Applied research: Guided by market demand, develop skin care and make-up products of various levels
with obvious efficacy, great skin feel and favorable costs, and complete the technological layout for future
iterations of all hero products.
(3) Clinical research: Continue with the clinical research and verification of products, explore new
methods to verify the efficacy of raw materials and products, and develop new efficacy testing methods
by using advanced instruments and statistics.
(IV) Possible risks
√ Applicable □ Not applicable
(1) The Company's brand strategy and channel strategy fail to come up to expectations due to intensified
competition from various brands in the industry;
(2) The control of digital and precise delivery costs fails to come up to expectations due to intensified
competition in marketing and ads delivery.
(1) New brand incubation risk: Performance fails to come up to expectations despite big investment in
marketing;
(2) New category cultivation risk: Performance fails to come up to expectations due to different operation
modes for different categories and the incompetent team.
Annual Report 2022
(V) Other
□ Applicable √ Not applicable
VII. Circumstances Where the Company Fails to Disclose Due to Non-applicability or Special
Reasons Such as State Secrets and Trade Secrets and Statement of Reasons
□ Applicable √ Not applicable
Section IVCorporate Governance
I. Description of Corporate Governance
√ Applicable □ Not applicable
During the Reporting Period, the Company continuously improved its standard operation and corporate
governance structure based on the actual situation pursuant to applicable laws and regulations, including
the Company Law, the Securities Law, the Listing Rules of the Shanghai Stock Exchange and the Code of
Corporate Governance of Listed Companies as well as the Articles of Association. The Company has set
up the general meeting of shareholders, Board of Directors, Board of Supervisors and special committees
under the Board of Directors as required and developed corresponding rules of procedure. Such rules
define the duties, powers, procedures and obligations of organizations at all levels in terms of decision-
making, supervision and implementation. They form a scientific and effective governance structure
featuring clear rights and responsibilities, mutual checks and balances, and mutual coordination. During
the Reporting Period, the Company consciously fulfilled the obligation for information disclosure,
managed investor relationships, and promoted the Company to continuously improve its standard
operation. The corporate governance status complies with the requirements of the normative documents
on the governance of listed companies issued by the CSRC.
Whether there are significant differences between the Company's corporate governance and the
requirements of laws, administrative regulations and CSRC's regulations on the governance of listed
companies; if so, explain the reasons.
□ Applicable √ Not applicable
II. Specific measures taken by the Company's controlling shareholders and actual controllers to
ensure the Company's independence in assets, personnel, finance, organization and business
activities as well as solutions, work progress and subsequent work plans taken due to influence
on the Company's independence
□ Applicable √ Not applicable
Circumstances where any controlling shareholders, actual controllers and other entities under their control
engage in the same or similar business activities, as well as the impact of horizontal competition or major
changes in horizontal competition on the Company, resolutions taken, progress and follow-up resolutions
□ Applicable √ Not applicable
Annual Report 2022
III. Meetings of the General Meeting of Shareholders during the Reporting Period
Session Date Reference Date of release Resolution
The meeting approved proposals
including the Company's Annual
Report 2021 and its Summary, and
the Plan for Annual Profit
Distribution and Capitalization of
Capital Reserves for 2021. For
General May 12, 2022-027 on SSE
May 13, 2022 details, see the Announcement on
Meeting of 2022 website
Resolutions of the 2021 Annual
Shareholders (www.sse.com.cn)
General Meeting of Shareholders
(No.: 2022-027) released on the
SSE website on May 13, 2022
(http://www.sse.com.cn) and
relevant media.
The meeting approved proposals
including the Proposal on 2022
Restricted Share Incentive Plan of
the Company (Draft) and Its
Summary, and the Proposal on
Extraordinary Announcement No. Management Method for the 2022
General July 25, 2022-041 on SSE Restricted Share Incentive Plan.
July 26, 2022
Meeting of 2022 website For details, see the Announcement
Shareholders (www.sse.com.cn) on Resolutions of the 2022 First
in 2022 Extraordinary General Meeting of
Shareholders (No.: 2022-041)
released on the SSE website on
July 26, 2022
(http://www.sse.com.cn) and
relevant media.
Request of preferred shareholders with restored voting rights for convening an extraordinary general
meeting
□ Applicable √ Not applicable
Description of the General Meeting of Shareholders
□ Applicable √ Not applicable
Annual Report 2022
IV. Directors, Supervisors and Senior Management
(I) Changes in shareholding and remuneration of current and resigned directors, supervisors and senior management during the Reporting Period
√ Applicable □ Not applicable
Unit: share
Total pre-tax
remuneration Any
Number of
Number of Change in received from remuneration
shares held
Position Term start Term end shares held shares Cause for the Company from the
Name Gender Age at the
(Note) date date at the end of during the change during the Company's
beginning of
the year year Reporting related
the year
Period parties
(RMB’0,000)
Shares
Chairman of
HOU converted
the Board of Male 59 7/30/2015 9/8/2024 69,764,815 97,670,741 27,905,926 162.94 No
Juncheng from capital
Directors
reserve
Shares
converted
from capital
Director,
FANG reserve and
General Male 54 7/30/2015 9/8/2024 36,347,843 45,772,470 9,424,627 162.94 No
Yuyou shares
Manager
reduced for
personal
capital need
HOU
Director Male 35 9/9/2021 9/8/2024 0 0 0 48.06 No
Yameng
HOU Deputy
Male 35 9/15/2021 9/8/2024 0 0 0 0.00 No
Yameng General
Annual Report 2022
Manager
MA Independent
Male 53 5/13/2021 9/8/2024 0 0 0 15.00 No
Dongming Director
GE Independent
Male 48 9/9/2021 9/8/2024 0 0 0 15.00 No
Weijun Director
HOU
Supervisor Female 34 5/2/2018 9/8/2024 0 0 0 22.28 No
Luting
FANG
Supervisor Female 33 5/8/2018 9/8/2024 0 0 0 32.02 No
Qin
HU Lina Supervisor Female 35 9/9/2021 9/8/2024 0 0 0 17.19 No
Shares
converted
from capital
Deputy reserve and
JIN
General Male 61 4/16/2018 9/14/2024 54,981 216,973 161,992 grant of 70.79 No
Yanhua
Manager 2022
restricted
stock
incentive
Shares
converted
from capital
reserve and
WANG Li CFO Female 45 9/3/2018 9/14/2024 32,322 225,251 192,929 grant of 120.17 No
restricted
stock
incentive
Annual Report 2022
Deputy
General
Manager,
WANG Li Female 45 9/15/2021 9/14/2024 0 0 0 0.00 No
Secretary of
the Board of
Directors
Total / / / / / 106,199,961 143,885,435 37,685,474 / 666.40 /
Notes:
The total pre-tax remuneration received by the above directors, supervisors and the senior management from the Company during the Reporting Period is the total
pre-tax remuneration during their term of office in the Reporting Period.
Name Working experience
He once worked in Yiwu Liaoyuan Daily Chemical Co., Ltd., Hangzhou Proya Cosmetics Co., Ltd., and Hangzhou Proya Holding Co., Ltd. Since
August 2012, he has served as Chairman of the Company and its predecessor. As of the end of the Reporting Period, he concurrently served as
Executive Director and General Manager of Proya Trade, Executive Director of Meiligu, Executive Director of Chuangdai Electronics, Executive
Director of Yueqing Laiya, Inside Director and Representative Director of Korea Hanna, Executive Director and General Manager of Hapsode
HOU
(Hangzhou), Executive Director and General Manager of Huzhou Hapsode, Executive Director and General Manager of Danyang Hapsode,
Juncheng
Executive Director and General Manager of Mijing Siyu (Hangzhou), Executive Director and General Manager of Huzhou Younimi, Executive
Director of Proya (Hainan), Executive Director of Proya (Zhejiang), Chairman and General Manager of Hangzhou Kunyi Industrial Co., Ltd.,
Chairman of CBIC, Executive Director and General Manager of Huzhou Beauty Town Technology Incubation Park Co., Ltd., Director of Xinjiang
Huanyu New Silk Road Investment Development Co., Ltd., Director of Yongxinou (Ningbo) International Trading Co., Ltd., and Executive
Director of Zhejiang Zhujin Enterprise Management Co., Ltd.
He once worked in Shijiazhuang Liaoyuan Cosmetics Co., Ltd., Hangzhou Proya Cosmetics Co., Ltd., and Hangzhou Proya Holdings Co., Ltd.
Since 2007, he has been working in the Company and its predecessor. Since August 2012, he has served as Director and General Manager of the
FANG Company and its predecessor. As of the end of the Reporting Period, he concurrently served as General Manager of Meiligu, General Manager of
Yuyou Yueqing Laiya, Inside Director of Korea Hanna, Director of Hongkong Xinghuo, Executive Director and General Manager of Hangzhou Fangxiake
Investment Co., Ltd., Director of Hangzhou Kunyi Industrial Co., Ltd., Director of Hangzhou Tairentang Biotechnology Co., Ltd., Supervisor of
Zhejiang Boweihui Grapevine Technology Co., Ltd., and Director of Jiangsu Lenong Weimei Agricultural Technology Development Co., Ltd.
Annual Report 2022
He once worked in the E-commerce Department of Proya Cosmetics Co., Ltd., and has served as Director and Deputy General Manager of the
HOU
Company since September 2021. As of the end of the Reporting Period, he concurrently served as Executive Director and General Manager of
Yameng
Hainan Mengya Enterprise Consulting Co., Ltd. and Executive Director and General Manager of Hangzhou TIMAGE.
He used to be Deputy Director and Director of CSRC Zhejiang Branch, Director of the Commissioner's Office of CSRC Shanghai Branch, and
MA Deputy General Manager and Secretary of the Board of Directors of Yongan Futures Co., Ltd. Since May 2021, he has served as Independent
Dongming Director of the Company. As of the end of the Reporting Period, he concurrently served as Independent Director of Transwarp Technology
(Shanghai) Co., Ltd., Independent Director of Zhejiang Shuangyuan Technology Co., Ltd., and Independent Director of Merit Interactive Co., Ltd.
He once worked in Zhejiang Xingyun Law Firm and Xingyun Law Firm Shanghai Branch. From February 2006 to December 2021, he served as
Professor, Doctoral Supervisor, and Legal Adviser of Shanghai University of Finance and Economics. Since January 2022, he has served as a full-
time teacher (professor) at the Law School of Fudan University. Since September 2021, he has served as Independent Director of the Company.
He also serves as Arbitrator at the China International Economic and Trade Arbitration Commission, Arbitrator at the Shanghai International
Economic and Trade Arbitration Commission, Arbitrator at Shanghai Arbitration Commission ,Arbitrator at Shenzhen Court of International
GE Weijun
Arbitration, Executive Officer of the China Commercial Law Society, Vice President of the Commercial Research Branch of the Shanghai Judicial
Think Tank, Vice President of the Commercial Law Research Association of the Shanghai Law Society, Vice President of the Cultural Law
Research Association of the Shanghai Law Society, Independent Director of Shanghai Huace Navigation Technology Ltd., Independent Director
of Changzhou ECTEK Automotive Electronics System Co., Ltd., Independent Director of Hangzhou EZVIZ Network Co., Ltd. and Independent
Director of Zheshang Development Group Co., Ltd.
From July 2013 to January 2014, she served as an expatriate financial specialist at Zhonghui Accounting Firm. From February 2014 to June 2017,
she served as a packaging material procurement specialist at the Purchasing Department of the Company. From June 2017 to April 2019, she served
HOU Luting as a raw material procurement specialist at the Purchasing Department of the Company. From April 2019 to March 2021, she served as a raw
material evaluation engineer. From March 2021 to December 2022, she served as a deputy price review manager. From December 2022 to present,
she has served as a price review manager. Since May 2018, she has served as Supervisor of the Company.
From November 2008 to January 2018, she served as Director of the Planning Department of the Company and its predecessor. From January 2018
FANG Qin to July 2022, she served as Planning Strategy Manager of the Company. Since July 2022, she has served as Senior Planning Strategy Manager of
the Company. Since May 2018, she has served as Supervisor of the Company.
She once worked in Pan-China Certified Public Accountants (Special General Partnership), and has served as Strategy Supervisor at the Company
HU Lina
since 2013, and has served as Supervisor of the Company since September 2021.
JIN Yanhua He once worked in Zhejiang Sanmen Fertilizer Factory, Zhejiang InBev Yandangshan Beer Co., Ltd., Zhejiang InBev Jinhua Beer Co., Ltd.,
Annual Report 2022
Hangzhou Proya Cosmetics Co., Ltd., and Hangzhou Proya Holding Co., Ltd. From 2007 to August 2012, he served as General Manager of the
Huzhou Factory under the Company and its predecessor. Since August 2012, he has served as General Manager of the Company's Supply Chain
Management Center; since April 2018, he has served as Deputy General Manager of the Company. As of the end of the Reporting Period, he
concurrently served as Executive Director of Hanya (Huzhou), Executive Director of Huzhou UZERO, Manager of Chuangdai Electronics,
Executive Director and General Manager of Proya Commercial, Executive Director and General Manager of Huzhou Niuke, Executive Director
and General Manager of Hangzhou Wanyan, Executive Director and General Manager of Zhejiang Beute, Executive Director of Shanghai
Zhongwen, Executive Director and General Manager of Ningbo Proya, Chairman of Ningbo Keshi, Chairman of Ningbo TIMAGE, Director of
Hong Kong Keshi, Director of Hong Kong Wanyan, Director of Hong Kong Zhongwen, Executive Director of Zhejiang Qingya, Executive Director
of Luxiaotie, Executive Director and General Manager of Hangzhou Yizhuo, Executive Director and General Manager of Hangzhou Weiluoke,
Executive Director and General Manager of Hangzhou Oumisi, Director of Japan OR, Executive Director and General Manager of Guangzhou
Qianxi, Director of Ningbo Xiyou Interactive Entertainment Culture Media Co., Ltd., General Manager of Proya (Hainan), Director of Korea
Hapsode, Executive Director and General Manager of Xuzhou Laibo, Executive Director and General Manager of Shenggelan (Hangzhou),
Chairman and General Manager of Ningbo Tangyu, Manager of Proya (Zhejiang), Executive Director and General Manager of Hangzhou Boxin,
Executive Director and General Manager of Huzhou Keyan Trading Co., Ltd.
She once served as CFO of Guangzhou Yingtai Digital Power Technology Co., Ltd., Financial Representative of US CELLSTAR (Phonest Star),
Financial Manager of Shanghai Ruili Sports Co., Ltd., Financial Director of Vgrass Fashion Co., Ltd., Financial Director of Zhuoshang Clothing
WANG Li (Hangzhou) Co., Ltd., and Financial Director of Jiangsu Sunport Power Corp., Ltd. Since April 2023, she has served as Independent Director of
Zhejiang Wazam New Materials Co., Ltd. She is currently Deputy General Manager, Secretary of the Board of Directors, and CFO of Proya
Cosmetics Co., Ltd.
Other explanations
□ Applicable √ Not applicable
Annual Report 2022
(II) Positions of current and resigned directors, supervisors and senior management during the
Reporting Period
√ Applicable □ Not applicable
Name of Name of shareholder Position held in
Term start date Term end date
employee entity shareholder entity
Peixian Deyi Network
JIN Yanhua Technology Partnership Executive Partner August 2019 February 2022
(Limited Partnership)
Description of None
position held in
shareholder
entities
Notes: Peixian Deyi Network Technology Partnership (Limited Partnership) was deregistered in February
√ Applicable □ Not applicable
Name of Position held in
Name of another entity Term start date Term end date
employee shareholder entity
Executive Director and
Proya Trade June 2011
General Manager
November
Meiligu Executive Director
December
Chuangdai Electronics Executive Director
September
Yueqing Laiya Executive Director
Inside Director and November
Korea Hanna
Representative Director 2011
Executive Director and
Hapsode (Hangzhou) February 2018
General Manager
HOU
Executive Director and
Juncheng Huzhou Hapsode May 2016
General Manager
Executive Director and December
Danyang Hapsode
General Manager 2016
Executive Director and
Mijing Siyu (Hangzhou) February 2018
General Manager
Chairman of the Board of November
Huzhou Younimi March 2019
Directors 2022
Executive Director and November
Huzhou Younimi
General Manager 2022
Proya (Hainan) Executive Director January 2021
Proya (Zhejiang) Executive Director May 2022
Hangzhou Kunyi Chairman and General April 2014
Annual Report 2022
Name of Position held in
Name of another entity Term start date Term end date
employee shareholder entity
Industrial Co., Ltd. Manager
Cosmetics Industry
Chairman of the Board of December
(Huzhou) Investment
Directors 2018
Development Co., Ltd.
Huzhou Beauty Town
Executive Director and
Technology Incubation January 2019
General Manager
Park Co., Ltd.
Xinjiang Huanyu New
Silk Road Investment Director March 2021
Development Co., Ltd.
Yongxinou (Ningbo)
International Trading Director May 2022
Co., Ltd.
Zhejiang Zhujin
September
Enterprise Management Executive Director
Co., Ltd.
November
Meiligu General Manager
September
Yueqing Laiya General Manager
November
Korea Hanna Inside Director
Hongkong Xinghuo Director March 2019
November
Huzhou Younimi Director March 2019
Hangzhou Fangxiake Executive Director and
FANG May 2018
Investment Co., Ltd. General Manager
Yuyou
Hangzhou Kunyi
Director April 2014
Industrial Co., Ltd.
Hangzhou Tairentang December
Director
Biotechnology Co., Ltd. 2014
Zhejiang Boweihui
November
Grapevine Technology Supervisor
Co., Ltd.
Jiangsu Lenong Weimei
Agricultural Technology Director May 2022
Development Co., Ltd.
Hangzhou Yishan September
Supervisor January 2022
Design Co., Ltd. 2017
HOU Hainan Mengya
Executive Director and November
Yameng Enterprise Consulting
General Manager 2021
Co., Ltd.
Hangzhou TIMAGE Executive Director and March 2022
Annual Report 2022
Name of Position held in
Name of another entity Term start date Term end date
employee shareholder entity
General Manager
Particle Culture
Technology Group Independent Director October 2020 March 2022
(Hangzhou) Co., Ltd.
Transwarp Technology December
Independent Director
MA （Shanghai）Co., Ltd. 2020
Dongming Zhejiang Shuangyuan
December
Science & Technology Independent Director
Development Co., Ltd.
Merit Interactive Co.,
Independent Director May 2022
Ltd.
Wuxi Genecast
Independent Director January 2020 August 2022
Biotechnology Co., Ltd.
Shanghai Huace
December
Navigation Technology Independent Director
Ltd.
Changzhou ECTEK
GE Weijun September
Automotive Electronics Independent Director
System Co., Ltd.
Hangzhou EZVIZ
Independent Director March 2022
Network Co., Ltd.
Zheshang Development
Independent Director May 2022
Group Co., Ltd.
December
Anya (Huzhou) Executive Director
Huzhou UZERO Executive Director January 2018
Chuangdai Electronics Manager February 2018
Executive Director and September
Proya Commercial
General Manager 2018
Executive Director and December
Huzhou Niuke
General Manager 2018
Executive Director and
Hangzhou Wanyan January 2019
JIN General Manager
Yanhua Executive Director and
Zhejiang Beute March 2019
General Manager
Chairman of the Board of
Shanghai Zhongwen April 2019
Directors
Executive Director and December
Ningbo Proya
General Manager 2019
September
Ningbo Keshi Director
Ningbo TIMAGE Director July 2019
Peixian Deyi Network Executive Partner August 2019 February 2022
Annual Report 2022
Name of Position held in
Name of another entity Term start date Term end date
employee shareholder entity
Technology Partnership
(Limited Partnership)
Hong Kong Keshi Director March 2019
Hong Kong Wanyan Director October 2019
Hong Kong Zhongwen Director July 2019
Zhejiang Qingya Executive Director May 2020
Luxiaotie Executive Director August 2020
Executive Director and
Hangzhou Yizhuo July 2020
General Manager
Executive Director and
Hangzhou Weiluoke July 2020
General Manager
Executive Director and
Hangzhou Oumisi August 2020
General Manager
Japan OR Director August 2020
Executive Director and
Guangzhou Qianxi October 2020
General Manager
Ningbo Xiyou
Interactive September
Director
Entertainment Culture 2020
Media Co., Ltd.
Proya (Hainan) General Manager January 2021
Korea Hapsode Director of the Company June 2021
Executive Director and
Xuzhou Laibo January 2022
General Manager
Executive Director and September
Huzhou Boyun August 2022
General Manager 2020
Xuzhou Proya
Executive Director and
Information Technology January 2021 July 2022
General Manager
Co., Ltd.
Singuladerm Executive Director and
October 2021
(Hangzhou) General Manager
Chairman and General
Ningbo Tangyu October 2021
Manager
Proya (Zhejiang) Manager May 2022
Executive Director and December
Hangzhou Boxin
General Manager 2022
Huzhou Keyan Trading Executive Director and
March 2023
Co., Ltd. General Manager
Zhejiang Wazam New
WANG Li Independent Director April 2023
Materials Co., Ltd.
Description
of position None
held in
Annual Report 2022
Name of Position held in
Name of another entity Term start date Term end date
employee shareholder entity
other
entities
(III) Remuneration of directors, supervisors and senior management
√ Applicable □ Not applicable
The remuneration of directors and supervisors of the Company shall
be approved by the Remuneration and Appraisal Committee, the
Decision-making procedures for
Board of Directors and the Board of Supervisors respectively. Then,
remuneration of directors,
the remuneration plan shall be submitted to the general meeting of
supervisors and senior
shareholders for deliberation. The remuneration of senior
management
management shall be deliberated by the Remuneration and
Appraisal Committee and the Board of Directors.
Basis for determination of
The annual remuneration of the Company's directors, supervisors
remuneration of directors,
and senior management shall be paid based on basic pay and
supervisors and senior
performance appraisal results.
management
Actual payment of remuneration
of directors, supervisors and Paid.
senior management
Total remuneration actually During the Reporting Period, the Company's directors, supervisors
received by all directors, and senior management actually received a total remuneration of
supervisors and senior RMB6.6640 million from the Company (including current and
management as of the end of the resigned supervisors and senior management during the Reporting
Reporting Period Period).
(IV) Changes in the Company's directors, supervisors and senior management
□ Applicable √ Not applicable
(V) Description of punishments by the CSRC in the past three years
□ Applicable √ Not applicable
(VI) Other
□ Applicable √ Not applicable
V. Meetings of the Board of Directors held during the Reporting Period
Session Date Resolution
The meeting approved proposals including the Proposal on
third session of January 12, 2022 Restrictions for the Third Release Period of the Restricted
Board of Directors Shares Granted for the First Time and with Reserve under
the 2018 Restricted Share Incentive Plan, the Proposal on the
Annual Report 2022
Use of Raised Funds to Replace Self-raised Funds Already
Invested in Fundraising Projects, and the Proposal on Using
Some Idle Raised Fund for Cash Management. For details,
see the Announcement on Resolutions of the 4th Meeting of
the Third Session of Board of Directors (No.: 2022-002)
disclosed by the Company on the SSE website
(http://www.sse.com.cn) and relevant media on January 13,
The meeting approved proposals including the Company's
Annual Report 2021 and its Summary, the Company's ESG
Report 2021, and the Company's Plan for Profit Distribution
third session of April 20, 2022 see the Announcement on Resolutions of the 5th Meeting of
Board of Directors the Third Session of Board of Directors (No.: 2022-014)
disclosed by the Company on the SSE website
(http://www.sse.com.cn) and relevant media on April 22,
The meeting approved proposals including the Proposal on
and Its Summary, and the Proposal on Formulating the
Assessment Management Method for the 2022 Restricted
third session of July 8, 2022
Share Incentive Plan. For details, see the Announcement on
Board of Directors
Resolutions of the 6th Meeting of the Third Session of Board
of Directors (No.: 2022-033) released on the SSE website on
July 9, 2022 (http://www.sse.com.cn) and relevant media.
The meeting approved the Proposal on the Granting of
third session of July 25, 2022 Announcement on Granting of Restricted Shares to Incentive
Board of Directors Recipients (No.: 2022-044) released on the SSE website on
July 26, 2022 (http://www.sse.com.cn) and relevant media.
The meeting approved proposals including the Company's
Special Report on the Semi-annual Storage and Actual Use
of Raised Fund. For details, see the Announcement on
third session of August 24, 2022
Resolutions of the 8th Meeting of the Third Session of Board
Board of Directors
of Directors (No.: 2022-045) disclosed by the Company on
the SSE website (http://www.sse.com.cn) and relevant media
on August 26, 2022.
The meeting approved the Company's 2022 Third Quarter
third session of October 27, 2022 disclosed by the Company on the SSE website
Board of Directors (http://www.sse.com.cn) and relevant media on October 28,
Annual Report 2022
VI. Performance of Duties by Directors
(I) Directors attending meetings of the Board of Directors and general meetings of shareholders
Attendance at
general
Attendance at meetings of the Board of Directors
meetings of
shareholders
Number
Number Number Number
of Fail to attend
Director Independent of Number of of of
meetings two Number of
name director or not meetings meetings of the meetings meetings
of the consecutive general
of the Board of of the of the
Board of meetings of meetings of
Board of Directors Board of Board of
Directors the Board of shareholders
Directors attended by Directors Directors
to be Directors or attended
attended communication attended absent
attended not
in person by proxy from
this year
HOU
No 6 6 0 0 0 No 2
Juncheng
FANG
No 6 6 0 0 0 No 2
Yuyou
HOU
No 6 6 0 0 0 No 2
Yameng
MA
Yes 6 6 6 0 0 No 2
Dongming
GE
Yes 6 6 6 0 0 No 2
Weijun
Explanation on absence from two consecutive meetings of the Board of Directors
□ Applicable √ Not applicable
Number of meetings of the Board of Directors held
during the year
Including: number of on-site meetings 0
Number of meetings held by communication 0
Number of meetings held both on site and by
communication
(II) Circumstances where directors object to the Company's relevant matters
□ 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
Name of member
committee
Audit Committee HOU Yameng, MA Dongming, GE Weijun
Nomination Committee HOU Juncheng, MA Dongming, GE Weijun
Remuneration and
FANG Yuyou, MA Dongming, GE Weijun
Appraisal Committee
Annual Report 2022
Strategy Committee HOU Juncheng, MA Dongming, GE Weijun
(2). Four meetings held by the Audit Committee during the Reporting Period
Important
Other
comments
Date Description performance
and
of duties
suggestions
The 3rd meeting of the third session of the Audit
Committee was held to deliberate on and approve the
Company's Annual Report 2021 and its Summary, the
Company's 2022 Q1 Report, the Company's Annual
Financial Final Report 2021, the Performance Report
Approve
these
of Directors, the Company's Internal Control Evaluation
proposals and
Report 2021, the 2021 Special Report on the Annual
agree to
April 20, Storage and Actual Use of Raised Fund, the Company's
submit them None
to the Board
Reserves for 2021, the Proposal on Payment of Audit
of Directors
Fees for 2021 and Further Employment of the Accounting
for
Firm for 2022, the Proposal on the Estimated Amount of
deliberation
Daily Related-party Transactions for 2022, the Proposal
on the Accrual of Asset Impairment Provision for 2021,
the Proposal on the Adjustment of the Conversion Price
of "Proya Convertible Bond", and the Company's Annual
Internal Audit Work Report 2021.
Approve
these
proposals and
The 4th meeting of the third session of Audit Committee
agree to
July 8, was held to deliberate on and approve the Proposal on
submit them None
to the Board
(Draft) and Its Summary.
of Directors
for
deliberation
Approve
The 5th meeting of the third session of Audit Committee these
was held to deliberate on and approve the proposals and
Company's 2022 Semi-annual Report and its Summary, agree to
August
the 2022 Special Report on the Semi-annual Storage and submit them None
Actual Use of Raised Fund, and the Proposal on the to the Board
Adjustment of the Conversion Price of "Proya of Directors
Convertible Bond". for
deliberation
Annual Report 2022
Approve
these
proposals and
The 6th meeting of the third session of Audit Committee agree to
October
was held to deliberate on and approve the Company's submit them None
of Directors
for
deliberation
(3). Three meetings held by the Remuneration and Appraisal Committee during the Reporting
Period
Important
Other
comments
Date Description performance
and
of duties
suggestions
Approve
The 1st meeting of the third session of Remuneration and these
Appraisal Committee was held to deliberate on and proposals and
approve the Proposal on the Satisfaction of Conditions agree to
January
for Releasing the Sales Restrictions for the Third Release submit them None
Period of the Restricted Shares Granted for the First to the Board
Time and with Reserve under the 2018 Restricted Share of Directors
Incentive Plan. for
deliberation
Approve
these
The 2nd meeting of the third session of Remuneration and proposals and
Appraisal Committee was held to deliberate on and agree to
April 20,
approve the Proposal on Confirming the Remuneration of submit them None
Directors for 2021 and the Proposal on Confirming the to the Board
Remuneration of Senior Management for 2021. of Directors
for
deliberation
Approve
The 3rd meeting of the third session of Remuneration and
these
Appraisal Committee was held to deliberate on and
proposals and
approve the Proposal on 2022 Restricted Share Incentive
agree to
July 8, Plan of the Company (Draft) and Its Summary, the
submit them None
to the Board
Method for the 2022 Restricted Share Incentive Plan, and
of Directors
the Proposal on Verifying the List of Incentive Recipients
for
for the 2022 Restricted Share Incentive Plan.
deliberation
(4). One meeting held by the Strategy Committee during the Reporting Period
Annual Report 2022
Important
Other
comments
Date Description performance
and
of duties
suggestions
Approve
these
proposals and
The 2nd meeting of the third session of Strategy
agree to
April 20, Committee was held to deliberate on and approve the
submit them None
to the Board
of Directors
for
deliberation
(5). Dissenting matters
□ Applicable √ Not applicable
VIII. Explanation on the Company's Risks Identified by the Board of Supervisors
□ Applicable √ Not applicable
The Board of Supervisors had no objection to matters supervised during the Reporting Period.
IX. Employees of the Parent Company and Major Subsidiaries as of the End of the Reporting
Period
(I) Employees
Number of current employees of the parent 1,129
company
Number of current employees of major 2,048
subsidiaries
Total number of employees 3,177
Number of retired employees to be supported by 4
the parent company and major subsidiaries
Specialty composition
Category Number of employees
Production workers 276
Sales specialists 2,370
Management 302
R&D personnel 229
Total 3,177
Educational background
Education level Number (persons)
Bachelor and above 1,217
Associate 724
High school and below 1,236
Total 3,177
Annual Report 2022
(II) Remuneration policy
√ Applicable □ Not applicable
Value creation is the Company's basis for salary distribution. Performance is an intuitive reflection of
value. By establishing a comprehensive and objective performance evaluation system, the Company
combines salary distribution and performance evaluation of employees with an aim to fully guide and
motivate employees to create value.
(III) Training program
√ Applicable □ Not applicable
The Company adheres to the goal of gathering and training outstanding professionals by always
considering staff learning and growth as a primary task, and continuously innovating in and optimizing
training research, training topics, training forms, training implementation, training evaluation and
improvement, and trainer management. In terms of the form of learning, the Company combines internal
and external learning and fully improves the engagement of employees in training, thus making the
training more effective.
(IV) Labor outsourcing
√ Applicable □ Not applicable
Total man-hours for labor outsourcing
Total remuneration paid for labor outsourcing RMB53,644,979.66
Labor Service Co., Ltd. to outsource auxiliary services including canteen, greening, cleaning, and goods
handling, loading and unloading, and packaging to the latter and pay consideration for the agreed
quantities.
Enterprise Management Co., Ltd. to outsource services such as partial goods handling, loading and
unloading, combined packaging, and mask folding to the latter, and pay consideration for the agreed
quantities.
X. Profit Distribution or Capital Reserve Conversion Plan
(I) Development, implementation or adjustment of the cash dividend distribution policy
√ Applicable □ Not applicable
The Company held the 16th meeting of the second session of Board of Directors and the 3rd extraordinary
General Meeting of Shareholders on October 12, 2020 and October 28, 2020 respectively and approved
the Proposal on the Company's Planning for Dividends to Shareholders for the Next Three Years (2020-
I. Factors considered in developing the planning for dividend distribution to shareholders
To promote the long-term and sustainable development, based on a comprehensive analysis of the
corporate development strategy, shareholder requirements and expectations, social capital costs, and
external financing environment, the Company has solicited and listened to the requirements and
expectations of shareholders, especially small and medium shareholders, fully considered the Company's
current and future profitability, cash flow, development stage, project investment capital needs, and bank
credit, balanced the short-term and long-term interests of shareholders, and made institutional
Annual Report 2022
arrangements for profit distribution, so as to establish a sustainable and stable mechanism for dividend
distribution to investors to ensure the continuity and stability of the Company's profit distribution policy.
II. Principles for planning for dividend distribution to shareholders
The Company implements a continuous and stable profit distribution policy, attaches importance to
reasonable investment returns to investors while considering sustainable development, and has established
a continuous and stable mechanism for returns to investors in combination with the Company's
profitability and actual needs for the future development strategy. The Company shall make a profit
distribution plan in accordance with the Articles of Association. The Company's Board of Directors, Board
of Supervisors and General Meeting of Shareholders shall fully consider the opinions of independent
directors, supervisors and public investors in deciding and demonstrating the profit distribution policy.
III. Planning for dividend distribution to shareholders (2020-2022)
reasonable investment returns to investors as well as the Company's actual operating conditions and
sustainable development for the current year in profit distribution.
by laws and regulations. The distribution shall not exceed the accumulated distributable profits, and shall
not undermine the Company's ability to continue as a going concern. When eligible for cash dividends,
the Company shall distribute profits first in cash.
When eligible for cash dividends under the Company's Articles of Association, the Company shall, in
principle, distribute profits in cash on a yearly basis. The Company's Board of Directors may propose that
the Company should distribute interim cash dividends according to the Company's profitability and capital
needs. The Company shall maintain the continuity and stability of the profit distribution policy, and
distribute every year at least 20% of the distributable profits achieved for the current year. The Company's
Board of Directors shall propose a differentiated cash dividend policy in line with the procedure under the
Company's Articles of Association after a comprehensive analysis of factors such as industry
characteristics, development stage, its own business mode, profitability, and major spending arrangements.
(1) The Company shall evaluate the implemented plan for dividend distribution to shareholders once every
three years. According to applicable laws and regulations, the Company's operating conditions, and the
opinions of shareholders (especially small and medium investors) and independent directors, the Company
may modify its current profit distribution policy when necessary and make a new plan for dividend
distribution to shareholders. Upon adjustment, the plan for dividend distribution to shareholders shall be
approved by voting at the General Meeting of Shareholders.
(2) The Company's Board of Directors shall make an appropriate annual distribution plan or an interim
profit distribution plan as necessary for development after fully considering the Company's profitability,
cash flow, development capital needs, financing costs, and the external financing environment, and
implement them upon the approval by the Company's General Meeting of Shareholders.
During the Reporting Period, the Company approved the 2021 annual profit distribution plan at the 2021
Annual General Meeting of Shareholders, whereby distributing a cash dividend of RMB8.60 (tax inclusive)
for each 10 shares to all shareholders registered as of the record date on the basis of the total share capital
as of the record date for dividend distribution for a total of RMB172,868,570.76 (tax inclusive). The said
dividend distribution was completed on May 30, 2022.
(II) Special description of the cash dividend policy
√ Applicable □ Not applicable
Annual Report 2022
Is the cash dividend policy acceptable under the Company's Articles of Association or
√Yes □No
as required by resolutions at the General Meeting of Shareholders?
Are dividend distribution standard and ratio clearly defined? √Yes □No
Are decision-making procedures and mechanisms complete? √Yes □No
Do independent directors fulfill their duties and play their roles diligently? √Yes □No
Do minority shareholders have the opportunity to fully express their opinions and
√Yes □No
demands, and are their legitimate rights and interests fully protected?
(III) Where the Company made profits and the parent company could provide positive profits
available to shareholders for distribution but did not propose a cash profit distribution plan
during the Reporting Period, the Company shall disclose the reasons in details and the purpose
and use of undistributed profits.
□ Applicable √ Not applicable
(IV) Profit distribution and capitalization of capital reserves during the Reporting Period
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Number of bonus shares distributed per 10 shares
(shares)
Dividends per 10 shares (RMB) (tax included) 8.70
Conversions per 10 shares (shares) 4
Amount of cash dividends (tax included) 246,661,938.03
Net profit attributable to ordinary shareholders of
the Company in the annual consolidated statement 817,400,223.93
of dividends
Proportion in the net profit attributable to ordinary
shareholders of the Company in the consolidated 30.18
statement (%)
Amount of shares repurchased in cash included in
cash dividends
Total dividend amount (tax included) 246,661,938.03
Proportion of the dividend amount in the net profit
attributable to ordinary shareholders of the 30.18
Company in the consolidated statement (%)
XI. The Company's Equity Incentive Plans, Employee Stock Ownership Plans or Other Employee
Incentives and Their Impact
(I) Relevant incentive matters disclosed in the temporary announcement and with no progress
or changes in subsequent implementation
√ Applicable □ Not applicable
Matter Reference
Announcement on the Satisfaction
SSE website, Shanghai Securities News, Securities Times on
of Conditions for Releasing the
January 13, 2022
Sales Restrictions for the Third
Annual Report 2022
Release Period of the Restricted
Shares Granted for the First Time
and with Reserve under the 2018
Restricted Share Incentive Plan
and Listing
Announcement on 2022
Restricted Share Incentive Plan of SSE website, Shanghai Securities News, Securities Times on July
the Company (Draft) and Its 9, 2022
Summary
Announcement on the Granting of
SSE website, Shanghai Securities News, Securities Times on July
Restricted Shares to Incentive
Recipients
Announcement on the Granting
SSE website, Shanghai Securities News, Securities Times on
Result of the 2022 Restricted
September 8, 2022
Stock Incentive Plan
(II) Incentives not disclosed in the interim announcement or with subsequent progress
Equity incentives
□ Applicable √ Not applicable
Other explanations
□ Applicable √ Not applicable
Employee stock ownership plans
□ Applicable √ Not applicable
Other incentives
□ Applicable √ Not applicable
(III) Equity incentives granted to directors and senior management during the Reporting Period
□ Applicable √ Not applicable
√ Applicable □ Not applicable
Unit: share
Number of Number
Number
newly of Market price
of Price of
granted restricted as of the end
restricted restricted Unloc
restricted Locked shares of the
Name Position shares shares ked
shares shares held at the Reporting
held at the granted shares
during the end of the Period
beginning (RMB)
Reporting Reporting (RMB)
of the year
Period Period
JIN Deputy 54,981 140,000 78.56 76,97 140,000 216,973 36,338,638.0
Yanhua General 3 4
Manager
WANG Deputy 32,322 180,000 78.56 45,25 180,000 225,251 37,725,037.4
Annual Report 2022
Li General 1 8
Manager,
Secretary
of the
Board of
Directors,
CFO
/ 87,303 320,000 / 122,2 320,000 442,224 /
Total
Note: The Company implemented the 2021 Equity Distribution Plan on May 30, 2022, in which the
Company distributed to all shareholders a cash dividend of RMB8.60 (tax inclusive) per 10 shares based
on the total share capital as of the record date on which equity distribution is implemented and issued 4
shares for every 10 shares to all shareholders through capitalization of the capital reserve. The "unlocked
shares" and "number of restricted shares held at the end of the period" mentioned in the table above include
the shared converted through the capitalization of the capital reserve in 2021.
(IV) Evaluation mechanism for senior management as well as the establishment and
implementation of the incentive mechanism during the Reporting Period
√ Applicable □ Not applicable
During the Reporting Period, the Company's General Manager and other senior management were
evaluated based on performance indicators and their annual performance remuneration was submitted by
the Remuneration and Appraisal Committee to the Board of Directors for deliberation.
XII. Construction and Implementation of the Internal Control System during the Reporting Period
√ Applicable □ Not applicable
The Company has developed relevant systems including the Internal Audit System, the External
Guarantee Decision-making Management System, the Related-party Transaction Management System,
the Raised Funds Management System, and the Information Disclosure Management System, and
established processes for company establishment/investment/change applications, entrusted wealth
management application, and guarantee application. The Company continuously improves the internal
control system and related processes, regulates the implementation of the internal control system,
strengthens the supervision and inspection of internal control, and promotes the healthy and sustainable
development of the Company.
Description on Material deficiencies in internal control during the Reporting Period
□ Applicable √ Not applicable
XIII. Management and Control of Subsidiaries during the Reporting Period
√ Applicable □ Not applicable
The Company has developed systems including the External Investment and Operation Decision-making
System and the Subsidiary Management System to implement centralized control over subsidiaries. The
Company HQ is responsible for its finance, asset operation and overall strategic planning while all
subsidiaries develop their strategic plans based on the Company's overall strategic planning.
XIV. Description of the Internal Control Audit Report
√ Applicable □ Not applicable
Annual Report 2022
During the Reporting Period, Pan-China Certified Public Accountants (Special General Partnership), the
Company's internal control auditing firm, issued the Internal Control Audit Report (Tian Jian Shen [2023]
No.3129), in which opinion the Company had maintained effective internal control over financial
reporting in all material aspects as of December 31, 2022 pursuant to the Basic Rules for Internal Control
and other applicable provisions.
Whether to disclose the internal control audit report: Yes
Type of opinion in the internal control audit report: standard unqualified opinion
XV. Correction of Problems Identified in the Special Campaign for Governance of Listed
Companies
None
XVI. Other
□ Applicable √ Not applicable
Section V Environmental and Social Responsibility
I. Environmental Information
Whether to establish the environmental protection
Yes
mechanism
Investment in environmental protection during the
Reporting Period (Unit: RMB’0,000)
(I) Environmental issues of the Company and major subsidiaries included in the list of primary
pollutant discharge entities announced by the environmental authority
□ Applicable √ Not applicable
(II) Environmental issues of the Company not included in the list of primary pollutant discharge
entities
√ Applicable □ Not applicable
□ Applicable √ Not applicable
entities
√ Applicable □ Not applicable
During the Reporting Period, the Company passed the ISO14001:2015 Environmental Management
System certification (valid until February 14, 2025). The emission of greenhouse gases and discharge of
industrial wastewater, air emissions, and residues mainly occur from product production.
The wastewater produced by the Company mainly comes from domestic sewage and production
wastewater and is discharged to landscape water pools or to the outside through a consolidated water pipe
after being treated by the sewage treatment station. The air emissions produced mainly comes from boilers.
The Company has formulated the Sewage Treatment Management System, the Boiler Management System,
Annual Report 2022
and other management documents to strictly control the discharge of wastewater and air emissions. During
the Reporting Period, the Company discharged wastewater and air emissions up to standards.
Main administrative measures taken during the Reporting Period include:
(1) Wastewater:
The Company installed the Multi Vision COD online automatic monitoring instrument, and monitored the
COD in treated water 24 hours a day to ensure class-A sewage discharge; constructed a sewage treatment
system to make sure treated sewage is highly purified and recycled; renovated environmental protection
technologies in the production park:
① Underground pipeline CCTV detection system: Consisting of crawlers, lenses, cable reels, and a
control system, the underground pipeline CCTV detection system is used to clear the blockage in the
pipeline inside the park and maintain and repair the pipeline network, so as to prevent the risk of sewage
leakage due to outdated pipeline and provide reliable technological support for zero sewage discharge;
② Perform technological transformation on the anaerobic tower of the sewage treatment station to
improve the biological anaerobic effect;
③ Increase the capacity and efficiency of the air flotation tank of the sewage treatment station to 10 tons;
improve the capability of treating gas explosion of sewage in the air flotation tank, and enhance the clean
water treatment capacity on the original basis.
(2) Air emissions:
① Huzhou production base (skincare factory): A air emissions treatment facility for the cream production
line was added to reduce the emission of dust and organic air emissions. After being use, the facility can
collect 99% dust and remove 75% organic air emissions. A highly-precise volatile organic chemical (VOC)
gas collection device was installed to effectively reduce unorganized gas emission;
② Huzhou production base (make-up factory): A Swiss-made VOC gas and dust treatment facility was
added.
(3) The Company properly disposes of solid waste generated in production and operations. The Company
manages solid wastes in a macroscopical manner and our factories can track the whole process data on
solid wastes and prevent risks by requesting to report the amount of generated hazardous waste on the
National Information System Platform for the Management of Solid Wastes and Chemicals every year,
selecting hazardous waste treatment service providers through open bidding on the platform, and
requesting for the treatment of hazardous wastes on the platform.
□ Applicable √ Not applicable
(III) The Company's performance in helping protect the environment, prevent pollution and fulfill
environmental responsibilities
√ Applicable □ Not applicable
The emission of greenhouse gases and discharge of industrial wastewater, air emissions, and residues
mainly occur from product production. Moreover, the consumption of energy, raw materials, and other
resources principally occurs when products are made. Therefore, sustainable production can improve the
usage efficiency of resources and energy in production processes, reduce pollutants and greenhouse gas
emissions, and build a resource-saving and eco-friendly production system.
During the Reporting Period, the Company carried out a new round of audits on cleaner production in the
Huzhou Production Base (skincare factory). We investigated the current situation of pollutant emissions,
Annual Report 2022
energy management, and environmental protection, and also developed several cleaner production
implementation programs according to the investigation results.
During the Reporting Period, the Huzhou Production Base (skincare factory) planned and implemented
(1) Reduced waste water discharge by 4,400 tons;
(2) Reduced COD emission by 0.17 tons and ammonia nitrogen emission by 0.001 tons;
(3) Reduced the generation of hazardous waste by 3 tons;
(4) Reduced carbon dioxide emissions by 322.73 tons;
(5) Saved electricity by 565.9 MWh;
(6) Saved raw materials worth RMB108 thousand;
(7) Saved natural gas by 3,000 Nm?;
(8) Saved water by 4,600 m?.
(IV) Measures taken to reduce carbon emissions during the Reporting Period and their effects
Whether to take carbon emission
Yes
reduction measures
Carbon dioxide emission equivalent
reduced (unit: ton)
policies to suppliers, cooperate with them to reduce carbon
emissions in the stage of procurement, and prioritize
suppliers with low carbon emissions.
(1) Regularly collect carbon emissions data, invite
professional third parties to conduct data audits, and make
improvements to correct deviations inside the Company;
(2) Carry out energy-saving and technology upgrade
Type of carbon emission reduction
projects to improve energy efficiency;
measures (such as electricity generation
(3) Carry out clean energy replacement and increase the
with clean energy, carbon reduction
proportion of clean energy use through photovoltaic power
technologies used in production, or the
generation and the purchase of green electricity.
development and production of new
products that help reduce carbon
reduce carbon emissions after packaging disposal through
emissions)
packaging usage reduction, packaging recycling, and other
methods.
and logistics system to reduce energy consumption in the
process of warehousing and logistics by rationally arranging
warehouses and planning transportation routes.
sustainable consumption to consumers to provide them with
more sustainable choices.
Specific description
□ Applicable √ Not applicable
Annual Report 2022
II. Social Responsibility
(I) Whether to independently disclose social responsibility reports, sustainable development
reports, or ESG reports
√ Applicable □ Not applicable
For details, see the Proya Sustainable Development & Environmental, Social, and Governance (ESG)
Report 2022 disclosed by the Company on the SSE website (www.sse.com.cn) disclosed on the same day.
(II) Description of social responsibilities
√ Applicable □ Not applicable
External donation and charity
Quantity/content Description
projects
Include funds and materials donated by the
Total investment (RMB’0,000) 143.46 Company to various community philanthropy
and charitable activities
Shanghai Adream Foundation for the "One
County, One Dream" charity project.
Village, Jiulong County, Ganzi Prefecture,
Sichuan Province, and donated RMB100,000
Including: fund (RMB’0,000) 140.00
to village school so they could buy stationery
and books;
to the charity project jointly operated by the
Wuxing District Charity Federation of
Huzhou and Proya.
The Company donated anti-epidemic supplies
Cash value of materials
(RMB’0,000)
Hangzhou
Number of beneficiaries
(person)
Specific description
□ Applicable √ Not applicable
III. Poverty Alleviation and Rural Revitalization Progress
√ Applicable □ Not applicable
Poverty alleviation and rural
Quantity/content Description
revitalization project
to Shanghai Adream Foundation for the
Total investment (RMB’0,000) 110 "One County, One Dream" charity
project.
Annual Report 2022
Liwu Village, Jiulong County, Ganzi
Prefecture, Sichuan Province, and
donated RMB100,000 to village school
so they could buy stationery and books;
Including: fund (RMB’0,000) 110
Cash value of materials
(RMB’0,000)
Number of beneficiaries (person) 8,085
Form of support (such as
industrial support, employment Education support
support, education support, etc.)
Specific description
□ Applicable √ Not applicable
Annual Report 2022
Section VI Important Matters
I. Fulfillment of Commitments
(I) Commitments made by the Company's actual controllers, shareholders, related parties, acquirers and the Company and other relevant parties during
the Reporting Period or continuing to the Reporting Period
√ Applicable □ Not applicable
The next
Whether the Cause for step in
Any commitment any the event
Date and
Background Type Promisor Description deadline for is timely failure to of failure
duration
performance and strictly perform to
performed in time perform
in time
Restrictions Directors, (1) During their terms as the Company's Date: No Yes Not Not
on sales senior director/senior management, they shall not November applicable applicable
management transfer more than 25% of their total shares 15, 2017
HOU directly or indirectly held in the Company each Duration:
Juncheng, year. Within six months after leaving office, November
FANG they shall not transfer their shares directly or 15, 2017
Yuyou and indirectly held in the Company. (2) If their to long-
IPO-related CAO shares in the Company are sold within two term
commitments Liangguo years upon expiration of the lock-up period,
the selling price shall not be lower than the
offering price. If the closing price of the
Company's shares is lower than the offering
price for 20 consecutive trading days within 6
months after the Company's IPO, or the
closing price as of the end of the 6-month
period after the Company's IPO is lower than
Annual Report 2022
the offering price, the lock-up period for their
shares in the Company will be automatically
extended for 6 months. Their commitments
above shall survive job change and
resignation. (3) Should any of them/their
partnership violate the said share lock-up
commitments, the lock-up period for
their/their partnership's shares in the Company
will be automatically extended for 6 months.
Restrictions Senior (1) Within 12 months from the date of the Date: No Yes Not Not
on sales management Company's IPO, they shall not transfer or April 16, applicable applicable
JIN Yanhua authorize any other to manage their shares 2018
directly or indirectly held in the Company or Duration:
have the Company repurchase such shares. (2) April 16,
During their terms as the Company's senior 2018 to
management, they shall not transfer more than long-term
held in the Company each year. Within six
months after leaving office, they shall not
transfer their shares directly or indirectly held
in the Company. (3) If their shares in the
Company are sold within two years upon
expiration of the lock-up period, the selling
price shall not be lower than the offering price.
If the closing price of the Company's shares is
lower than the offering price for 20
consecutive trading days within 6 months after
the Company's IPO, or the closing price as of
the end of the 6-month period after the
Annual Report 2022
Company's IPO is lower than the offering
price, the lock-up period for their shares in the
Company will be automatically extended for 6
months. Their commitments above shall
survive job change and resignation. (4) Should
any of them/their partnership violate the said
share lock-up commitments, the lock-up
period for their/their partnership's shares in the
Company will be automatically extended for 6
months.
Restrictions Senior (1) Within 12 months from the date of the Date: No Yes Not Not
on sales management Company's IPO, they shall not transfer or September applicable applicable
WANG Li authorize any other to manage their shares 3, 2018
directly or indirectly held in the Company or Duration:
have the Company repurchase such shares. (2) September
During their terms as the Company's senior 3, 2018 to
management, they shall not transfer more than long-term
held in the Company each year. Within six
months after leaving office, they shall not
transfer their shares directly or indirectly held
in the Company. (3) If their shares in the
Company are sold within two years upon
expiration of the lock-up period, the selling
price shall not be lower than the offering price.
If the closing price of the Company's shares is
lower than the offering price for 20
consecutive trading days within 6 months after
the Company's IPO, or the closing price as of
Annual Report 2022
the end of the 6-month period after the
Company's IPO is lower than the offering
price, the lock-up period for their shares in the
Company will be automatically extended for 6
months. Their commitments above shall
survive job change and resignation. (4) Should
any of them/their partnership violate the said
share lock-up commitments, the lock-up
period for their/their partnership's shares in the
Company will be automatically extended for 6
months.
Restrictions Controlling (1) Within 24 months upon expiration of the Date: No Yes Not Not
on sales shareholder lock-up period, they shall not directly or November applicable applicable
and actual indirectly reduce their shares in the Issuer by 15, 2017
controller more than 6% of the total number of shares of Duration:
HOU the Issuer before such IPO. (2) They must sell November
Juncheng shares in the Company through methods 15, 2017
and FANG including but not limited to collective trading to long-
Aiqin through bidding, block trading, and transfer by term
agreement and transfer by agreement in line
with applicable laws, regulations and rules. (3)
Before selling the Company's shares, they
shall announce the same three trading days in
advance, discharge the obligation to disclose
information in a timely and accurate manner as
per the rules of the securities exchange, except
to the extent that their shares in the Company
are less than 5%. (4) Should they fail to
perform the said intent of share reduction, they
Annual Report 2022
must explain the cause for failing to do so in
the Company's General Meeting of
Shareholders and the media designated by the
CSRC and publicly apologize to the
Company's shareholders and public investors.
Restrictions Shareholders (1) If they intend to reduce shares after the Date: No Yes Not Not
on sales FANG lock-up period expires, they will prudently November applicable applicable
Yuyou and make a share reduction plan as necessary for 15, 2017
LI Xiaolin the Company to stabilize the share price and Duration:
directly conduct operations and capital operations as November
holding required by the CSRC and the exchange on 15, 2017
more than shareholders for share reduction, whereby to long-
the the lock-up period. (2) They must sell shares
Company in the Company with methods including but
not limited to collective trading through
bidding, block trading, and transfer by
agreement in line with applicable laws,
regulations and rules. (3) Before selling the
Company's shares, they shall announce the
same three trading days in advance, discharge
the obligation to disclose information in a
timely and accurate manner as per the rules of
the securities exchange except to the extent
that their shares in the Company are less than
intent of share reduction, they must explain the
cause for failing to do so in the Company's
General Meeting of Shareholders and the
Annual Report 2022
media designated by the CSRC and publicly
apologize to the Company's shareholders and
public investors.
Other The When the preconditions for enabling the share Date: No Yes Not Not
Company price stabilization plan are met, if the November applicable applicable
Company fails to take specific measures to 15, 2017
stabilize the share price, the Company must Duration:
explain the cause for failing to do so in the November
Company's General Meeting of Shareholders 15, 2017
and the media designated by the CSRC and to long-
publicly apologize to the Company's term
shareholders and public investors. In the event
of losses to investors not as a result of force
majeure, the Company will be liable for
compensation to investors by law, and be
liable otherwise as required by laws,
regulations and competent regulators; if the
losses are caused due to force majeure, the
Company shall work out a plan in the shortest
possible time to minimize losses to investors
and submit it to the General Meeting of
Shareholders for deliberation, so as to protect
the interests of the Company's investors as
much as possible. Within three years from the
date of the Company's IPO, if the Company
appoints new directors and senior
management, the Company will require such
new directors and senior management to fulfill
the commitments made by the directors and
Annual Report 2022
senior management at the time of the
Company's IPO.
Other The When the preconditions for enabling the share Date: No Yes Not Not
Company's price stabilization plan are met, if failing to November applicable applicable
controlling take specific measures to stabilize the share 15, 2017
shareholders price, they must explain the cause for failing to Duration:
and actual do so at the Issuer's General Meeting of November
controllers Shareholders and the media designated by the 15, 2017
CSRC and publicly apologize to the Issuer's to long-
shareholders and public investors. Where the term
commitment is not fulfilled, they will not
receive shareholder dividends from the Issuer
within 5 working days from the date when the
said incident occurs, and they will not be able
to transfer their shares until they take measures
to stabilize the share price as per the said plan
and achieve results.
Other The When the preconditions for enabling the share Date: No Yes Not Not
Company's price stabilization plan are met, if failing to November applicable applicable
directors take specific measures to stabilize the share 15, 2017
(excluding price as per the plan to stabilize the share price, Duration:
independent they must explain the cause for failing to do so November
directors) at the Issuer's General Meeting of 15, 2017
and senior Shareholders and the media designated by the to long-
management CSRC and publicly apologize to the Issuer's term
shareholders and public investors. Where the
commitment is not fulfilled, they will not
receive remuneration and shareholder
dividends (if any) from the Issuer within 5
Annual Report 2022
working days from the date when the said
incident occurs, and they will not be able to
transfer their shares until they take measures to
stabilize the share price as per the said plan and
achieve results.
Other The If the Company's prospectus contains false Date: No Yes Not Not
Company records, misleading statements or major November applicable applicable
omissions, which causes investors to suffer 15, 2017
losses in securities transactions, the Company Duration:
will compensate investors for such losses by November
law. After the illegal facts mentioned above 15, 2017
are identified by the CSRC or the stock to long-
exchange or the judicial authority where the term
Company is located, the Company will
actively compensate investors for direct
economic losses incurred therefrom by settling
with investors with respect to measurable
economic losses directly incurred to investors,
mediating with investors through a third party
and establishing an investor compensation
fund based on the principles of procedure
simplification, active negotiation,
compensation in advance, and effective
protection of investors' interests, especially
small and medium investors. If found to have
violated the said commitments, the Company
will publicly apologize to shareholders and
public investors for failing to perform the said
compensation measures at the General
Annual Report 2022
Meeting of Shareholders and the media
designated by the CSRC and compensate
investors for the actual losses identified by the
CSRC and the judicial authority.
Other The Issuer's If the Issuer's prospectus contains false Date: No Yes Not Not
controlling records, misleading statements or major November applicable applicable
shareholders omissions, which causes investors to suffer 15, 2017
and actual losses in securities transactions, they will Duration:
controllers compensate investors for such losses by law. November
After the illegal facts mentioned above are 15, 2017
identified by the CSRC or the stock exchange to long-
or the judicial authority where the Company is term
located, the Company will actively
compensate investors for direct economic
losses incurred therefrom by settling with
investors with respect to measurable economic
losses directly incurred to investors, mediating
with investors through a third party and
establishing an investor compensation fund
based on the principles of procedure
simplification, active negotiation,
compensation in advance, and effective
protection of investors' interests, especially
small and medium investors. If found to have
violated the said commitments, the Company's
controlling shareholders and actual controllers
will publicly apologize to the Issuer's
shareholders and public investors for failing to
perform the said compensation measures at the
Annual Report 2022
Issuer's General Meeting of Shareholders and
the media designated by the CSRC and will not
receive shareholder dividends from the Issuer
within 5 working days from the date when the
said commitments are violated, and their
shares in the Issuer will not be transferred until
they take compensation measures as per the
said commitments and achieve results.
Other Directors, If the Issuer's prospectus contains false Date: No Yes Not Not
supervisors records, misleading statements or major November applicable applicable
and senior omissions, which causes investors to suffer 15, 2017
management losses in securities transactions, they will Duration:
compensate investors for such losses by law. November
After the illegal facts mentioned above are 15, 2017
identified by the CSRC or the stock exchange to long-
or the judicial authority where the Company is term
located, the Company will actively
compensate investors for direct economic
losses incurred therefrom by settling with
investors with respect to measurable economic
losses directly incurred to investors, mediating
with investors through a third party and
establishing an investor compensation fund
based on the principles of procedure
simplification, active negotiation,
compensation in advance, and effective
protection of investors' interests, especially
small and medium investors. If found to have
violated the said commitments, the Company's
Annual Report 2022
directors, supervisors and senior management
will publicly apologize to the Issuer's
shareholders and public investors for failing to
perform the said compensation measures at the
Issuer's General Meeting of Shareholders and
the media designated by the CSRC and will not
receive remuneration (or allowances) and
shareholder dividends (if any) from the Issuer
within 5 working days from the date when the
said commitments are violated, and their
shares in the Issuer will not be transferred until
they take compensation measures as per the
said commitments and achieve results.
Other The In order to ensure the effective use of the Date: No Yes Not Not
Company proceeds from the IPO, effectively prevent the November applicable applicable
risk of diluting immediate returns and improve 15, 2017
future returns, the Company intends to take Duration:
measures including tightening operation November
management and internal control, accelerating 15, 2017
the progress of fundraising projects, and to long-
strengthening the investor return mechanism, term
so as to improve asset quality, increase
operation revenue, raise future earnings, and
achieve sustainable development to fill the
diluted immediate returns. The Company
promises to continuously improve various
measures to fill the diluted spot returns in
accordance with the implementation rules
issued by the CSRC and Shanghai Stock
Annual Report 2022
Exchange. If found to have violated the said
commitments, the Company will promptly
announce the facts and cause of such violation,
except for force majeure or other reasons not
attributable to the Company, apologize to the
Company's shareholders and public investors,
make supplementary commitments or
substitute commitments to investors to protect
the interests of investors as much as possible,
and implement such supplementary
commitments or substitute commitments
subject to the approval by the Company's
General Meeting of Shareholders.
Other Controlling In order to ensure that the Company's Date: No Yes Not Not
shareholder measures to fill the diluted immediate returns November applicable applicable
and actual can be effectively performed, they, as the 15, 2017
controller Company's controlling shareholder and actual Duration:
HOU controller, promise that: (1) Under no November
Juncheng circumstances will they abuse the position as 15, 2017
and FANG the controlling shareholder and actual to long-
Aiqin controller by ultra vires interfering with the term
Company's operation and management
activities or encroaching on the Company's
interests; (2) After the CSRC and Shanghai
Stock Exchange have otherwise released
opinions and implementation rules on
measures to fill the diluted immediate returns
and relevant commitments, if the Company's
relevant provisions and their commitments
Annual Report 2022
contradict such rules, they will immediately
make supplementary commitments in line with
such rules of the CSRC and Shanghai Stock
Exchange, and actively promote the Company
to issue new commitments or measures up to
the requirements of the CSRC and Shanghai
Stock Exchange; (3) They will fully,
completely and timely perform the Company's
measures to fill the diluted immediate returns
and their commitments regarding the measures
to fill the diluted immediate returns. If found
to have violated such commitments, which
causes losses to the Company or shareholders,
they are willing to: ① state the cause and
apologize at the General Meeting of
Shareholders and the media designated by the
CSRC; ② be liable for compensation to the
Company and/or shareholders by law; ③
unconditionally accept the penalties or
regulatory measures taken by the CSRC and/or
Shanghai Stock Exchange and other securities
regulators as per their current rules. The said
measures to fill the diluted immediate returns
shall not be deemed to constitute a guarantee
for the Company's future profits.
Other Directors, In order to ensure that the Company's Date: No Yes Not Not
senior measures to fill the diluted immediate returns November applicable applicable
management can be effectively performed, they, as the 15, 2017
Annual Report 2022
Company's directors and senior management, Duration:
promise that: (1) They will not offer benefits November
to other entities or individuals for free or on 15, 2017
unfair terms, or otherwise harm the Company's to long-
interests; (2) They will strictly follow the term
Company's budget management by limiting
their duty-related consumption to the extent
required, subject to the Company's
supervision, and free from waste or
extravagance; (3) They will not use the
Company's assets to engage in investment and
consumption activities unrelated to their
duties; (4) They will actively promote the
improvement of the Company's compensation
system to better meet the requirements for
filling the diluted immediate returns; support
the Company's Board of Directors or
Remuneration Committee to link the
development, revision, and supplementation of
the Company's compensation system with the
implementation of the measures to fill the
diluted immediate returns; promise that the
vesting conditions for the Company's equity
incentives will be linked to the implementation
of the Company's measures to fill the diluted
immediate returns; (5) After the CSRC and
Shanghai Stock Exchange have otherwise
released the opinions and implementation
rules on the measures to fill the diluted
Annual Report 2022
immediate returns and relevant commitments,
if the Company's relevant provisions and their
commitments contradict such rules, they will
immediately make supplementary
commitments in line with such rules of the
CSRC and Shanghai Stock Exchange, and
actively promote the Company to issue new
commitments or measures up to the
requirements of the CSRC and Shanghai Stock
Exchange; (6) They will fully, completely and
timely perform the Company's measures to fill
the diluted immediate returns and their
commitments regarding the measures to fill the
diluted immediate returns. If found to have
violated such commitments, which causes
losses to the Company or shareholders, they
are willing to: ① state the cause and
apologize at the General Meeting of
Shareholders and the media designated by the
CSRC; ② be liable for compensation to the
Company and/or shareholders by law; ③
unconditionally accept the penalties or
regulatory measures taken by the CSRC and/or
Shanghai Stock Exchange and other securities
regulators as per their current rules. The said
measures to fill the diluted immediate returns
shall not be deemed to constitute a guarantee
for the Issuer's future profits.
Annual Report 2022
Avoiding Controlling 1. They do not and will not directly or Date: No Yes Not Not
horizontal shareholder indirectly engage in any activities constituting November applicable applicable
competition and actual horizontal competition with the existing and 15, 2017
controller future businesses of the Company and its Duration:
HOU holding subsidiaries, including but not limited November
Juncheng to the R&D, production and sale of any 15, 2017
and FANG products same as or similar to those of the to long-
Aiqin Company and its holding subsidiaries. They term
shall be liable for the economic losses to the
Company caused by violation of the above
commitments. 2. For the enterprises under
their control, They will perform their
obligations under such commitments by
assigning agencies and personnel (including
but not limited to directors and managers), and
They shall be liable for the economic losses to
the Company caused by violation of the above
commitments. 3. From the date of signing this
letter of commitment, if the Company further
expands its product and business scope, the
enterprises under their control shall not
compete with the Company within the
expanded product or business scope, or will, in
case of any possible competition with the
Company within the expanded product or
business scope, withdraw from the
competition by: (1) stopping the production of
competing or potentially competing products;
(2) stopping the operation of competing or
Annual Report 2022
potentially competing business; (3)
transferring the competing business to the
Company; or (4) transferring the competing
business to an unrelated third party. 4. Their
shareholding companies, including Hangzhou
Huazhuang Industrial Investment Co., Ltd.,
Huzhou Mogan Wangshu Cosmetics Industry
Phase I Venture Capital Partnership (Limited
Partnership), and companies that they invest
in, engage in no cosmetics business or related
upstream and downstream business. If they
engage in such businesses in the future, They
commit that they will withdraw their
investment in those business through equity
transfer and other means, and that the
Company will be given priority to invest in the
said enterprises according to legal provisions
and the consent of other shareholders of those
enterprises.
Other Controlling Commitments on the effective fulfillment of Date: No Yes Not Not
shareholder the Company's measures to fill the diluted April 21, applicable applicable
and actual immediate returns: 1. Under no circumstances 2021
controller will they interfere with the Company's Duration:
Commitments
HOU operation and management activities or April 21,
on
Juncheng encroach on the company's interests by ultra 2021 to
refinancing
and FANG vires; 2. From the date of the issuance of these long-term
Aiqin commitments to the date of the Company's
public issuance of A-share convertible
corporate bonds, if the CSRC releases new
Annual Report 2022
regulatory rules on the measures to fill the
diluted immediate returns and relevant
commitments and the above-mentioned
commitments can no longer satisfy the new
regulatory rules, they will make
supplementary commitments in line with the
latest rules of the CSRC; 3. They will
practically fulfill the Company's measures for
filling the diluted immediate returns and their
commitments regarding the measures to fill the
diluted immediate returns. Where they violate
those commitments, causing losses to the
Company or investors, they will assume the
compensation liability to the Company or
investors according to law. As one of the
parties responsible for the measures to fill the
immediate returns, should they violate or
refuse to fulfill the above commitments, they
shall be subject to the punishment or relevant
regulatory measures imposed on them by the
securities regulatory authorities such as the
CSRC and the SSE in accordance with the
relevant regulations and rules.
Other Directors, Commitments on the effective fulfillment of Date: No Yes Not Not
senior the Company's measures to fill the diluted April 21, applicable applicable
management immediate returns: 1. They will not offer 2021
benefits to other entities or individuals for free Duration:
or on unfair terms, or otherwise harm the April 21,
Company's interests; 2. They will limit their
Annual Report 2022
duty-related consumption; 3. They will not use 2021 to
the Company's assets to engage in investment long-term
and consumption activities unrelated to their
duties; 4. The compensation system developed
by the Board of Directors and the
Remuneration and Appraisal Committee will
be linked to the implementation of the
measures for filling the diluted immediate
returns; 5. If the Company issues equity
incentives in the future, the vesting conditions
for the Company's equity incentives will be
linked to the implementation of the Company's
measures to fill the diluted immediate returns;
commitments to the date of the Company's
public issuance of A-share convertible
corporate bonds, if the CSRC releases new
regulatory rules on the measures to fill the
diluted immediate returns and relevant
commitments and the above-mentioned
commitments can no longer satisfy the new
regulatory rules, they will make
supplementary commitments in line with the
latest rules of the CSRC. As one of the parties
responsible for the measures to fill the
immediate returns, should they violate or
refuse to fulfill the above commitments, they
shall be subject to the punishment or relevant
regulatory measures imposed on them by the
Annual Report 2022
securities regulatory authorities such as the
CSRC and the SSE in accordance with the
relevant regulations and rules.
Annual Report 2022
(II) Statement of whether the Company's assets or projects fulfilled the original profit forecast
and its reason where the Company had profit forecasts on assets or projects and the Reporting
Period fell within the term of profit forecasts
□Fulfilled □Unfulfilled √Not applicable
(III) Execution of the performance undertakings and their impact on the goodwill impairment
testing
□ Applicable √ Not applicable
Annual Report 2022
II. Non-operating Occupation of Funds by the Controlling Shareholders and Other Related Parties during the Reporting Period
□ Applicable √ Not applicable
III. Illegal Guarantee
□ Applicable √ Not applicable
Annual Report 2022
IV. Explanation of the Company's Board of Directors on the "Non-standard Audit Report" from
the Accounting Firm
□ Applicable √ Not applicable
V. Analysis and Explanation from the Company on the Reasons and Impact of Changes in
Accounting Policies, Accounting Estimates or Correction on Significant Accounting Errors
(I) Analysis and explanation from the Company on the reasons and impact of changes in
accounting policies or accounting estimates
√ Applicable □ Not applicable
For details, see the description in "44. Changes in significant accounting policies and accounting
estimates", "V. Significant Accounting Policies and Accounting Estimates", "Section X Financial Report".
(II) Analysis and explanation from the Company on the reasons and impact of the correction on
significant accounting errors
□ Applicable √ Not applicable
(III) Communication with the previous accounting firm
□ Applicable √ Not applicable
(IV) Other explanations
□ Applicable √ Not applicable
VI. Appointment and Dismissal of the Accounting Firm
Unit: Yuan Currency: RMB
Current accounting firm
Pan-China Certified Public Accountants
Name of the domestic accounting firm
(Special General Partnership)
Remuneration of the domestic accounting firm 1,400,000
Term of office of the domestic accounting firm 12
Names of CPAs from the domestic accounting firm YIN Zhibin, WANG Xiaokang
YIN Zhibin: 3 years of continual term of
Continual term of audit service provided by the CPAs audit service
from the in the domestic accounting firm WANG Xiaokang: 5 years of continual
term of audit service
Name Remuneration
Pan-China Certified Public
Accounting firm for internal
Accountants (Special General 200,000
control and audit
Partnership)
Explanation on appointment and dismissal of the accounting firm
□ Applicable √ Not applicable
Annual Report 2022
Explanation on the change of accounting firm during the Auditing Period
□ Applicable √ Not applicable
VII. Particulars on Risk of Delisting
(I) Reasons for the delisting risk warning
□ Applicable √ Not applicable
(II) Measures to be taken by the Company
□ Applicable √ Not applicable
(III) Situation and causes for termination of listing
□ Applicable √ Not applicable
VIII. Matters Related to Bankruptcy and Reorganization
□ Applicable √ Not applicable
IX. Material Litigations and Arbitrations
□ The Company had material litigations and arbitrations during the year √ The Company had no material
litigations and arbitrations during the year
X. Suspected Violations, Penalties and Rectifications of the Company and Its Directors,
Supervisors, Senior Management, Controlling Shareholders and Actual Controllers
□ Applicable √ Not applicable
XI. Integrity of the Company and Its Controlling Shareholders and Actual Controllers During the
Reporting Period
√ Applicable □ Not applicable
During the Reporting Period, the Company and its controlling shareholders and actual controllers
were in good faith.
XII. Significant Related-party Transactions
(I) Related-party transactions pertaining to daily operation
the follow-up implementation
□ Applicable √ Not applicable
follow-up implementation
√ Applicable □ Not applicable
The 5th meeting of the third session of Board of Directors and the 2021 annual General Meeting of
Shareholders were held by the Company on April 20, 2022 and May 12, 2022 respectively to deliberate
Annual Report 2022
on and approve the Proposal on the Estimated Amount of Daily Related-party Transactions for 2022. For
details, see the Announcement on the Estimated Amount of Daily Related-party Transactions for 2022
(No.: 2022-020) disclosed by the Company on the SSE website (www.sse.com.cn) on April 22, 2022. The
number of daily related-party transactions of the Company in 2022 does not exceed the estimated number
at the beginning of the year.
The estimated and actual amounts of the Company's daily related-party transactions in 2022 are as follows:
Category of
Actual amount in
related-party Related party Estimated amount in 2022
transactions
Deposits in
Zhejiang Yueqing Rural No more than RMB150
bank accounts
Commercial Bank Co., million for daily amount RMB146.67million
opened with the
Ltd.
related party
Huzhou Beauteville
Information of
Technology Incubator RMB1.8 million RMB1.12million
related lease
Co., Ltd.
Note: The "actual amount in 2022" represents the balance in the accounts as of March 15, 2022 as Zhejiang
Yueqing Rural Commercial Bank Co., Ltd. has no longer been identified as an affiliated entity of the
Company since March 16, 2022. From January 1, 2022 to March 15, 2022, the Company obtained a deposit
interest of RMB1.44million from Zhejiang Yueqing Rural Commercial Bank Co., Ltd.
□ Applicable √ Not applicable
(II) Related-party transactions arising from acquisition and disposal of assets or equity
the follow-up implementation
□ Applicable √ Not applicable
follow-up implementation
□ Applicable √ Not applicable
□ Applicable √ Not applicable
performance
□ Applicable √ Not applicable
(III) Significant related-party transactions pertaining to joint external investment
the follow-up implementation
□ Applicable √ Not applicable
Annual Report 2022
follow-up implementation
□ Applicable √ Not applicable
□ Applicable √ Not applicable
(IV) Credits and debits with related parties
the follow-up implementation
□ Applicable √ Not applicable
follow-up implementation
□ Applicable √ Not applicable
□ Applicable √ Not applicable
(V) Financial business between the Company and related financial companies, holding financial
companies and related parties
□ Applicable √ Not applicable
(VI) Other
□ Applicable √ Not applicable
XIII. Significant Contracts and Their Performance
(I) Trusteeship, contracting and leasing
□ Applicable √ Not applicable
□ Applicable √ Not applicable
□ Applicable √ Not applicable
Annual Report 2022
(II) Guarantee
□ Applicable √ Not applicable
Annual Report 2022
(III) Entrusting others to manage cash assets
(1) Overall condition of entrusted wealth management
□ Applicable √ Not applicable
Others
□ Applicable √ Not applicable
(2) Individual entrusted wealth management
□ Applicable √ Not applicable
Others
□ Applicable √ Not applicable
(3) Impairment provisions of entrusted wealth management
□ Applicable √ Not applicable
(1) Overall condition of entrusted loans
□ Applicable √ Not applicable
Others
□ Applicable √ Not applicable
(2) Individual entrusted loans
□ Applicable √ Not applicable
Others
□ Applicable √ Not applicable
(3) Impairment provisions of entrusted loans
□ Applicable √ Not applicable
□ Applicable √ Not applicable
(IV) Other material contracts
□ Applicable √ Not applicable
XIV. Other Major Matters That Have A Significant Impact on Investors' Value Judgments and
Investment Decisions
□ Applicable √ Not applicable
Annual Report 2022
Section VII Shareholders and Changes in Shares
I. Changes in Share Capital
(I) Table of changes in shares
Unit: ’0,000 shares
Before this change Increase or decrease (+ or -) due to this change After this change
Shares
Issuance converted
Percent Bonus Percentage
Number of new from Other Subtotal Number
age (%) shares (%)
shares capital
reserve
I. Restricted
shares
by the state
by state-owned
legal persons
by other 34.7201 0.1727 210 -34.7201 175.2799 210 0.7407
domestic funds
Wherein: Shares
held by
domestic non-
state-owned
legal persons
Shares held by
domestic natural 34.7201 0.1727 210 -34.7201 175.2799 210 0.7407
persons
by foreign funds
Wherein: Shares
held by foreign
legal persons
Shares
held by foreign
natural persons
II. Unrestricted
outstanding 99.8273 8,040.3986 35.2718 99.2593
shares
Ordinary Shares 2765 04 469
funded shares
listed
domestically
funded shares
listed overseas
Annual Report 2022
III. Total shares 20,100. 8,250.95 28,351.9
√ Applicable □ Not applicable
On January 12, 2022, the 4th meeting of the third session of Board of Directors and the 4th meeting of the
third session of Board of Supervisors were held to deliberate on and approve the Proposal on the
Satisfaction of Conditions for Releasing the Sales Restrictions for the Third Release Period of the
Restricted Shares Granted for the First Time and with Reserve under the 2018 Restricted Share Incentive
Plan, agreeing that the Company may handle the release procedure for the incentive recipients who meet
the conditions for releasing the sales restrictions. A total of 347,201 restricted shares were released from
the sales restriction. The circulation date of released shares is January 20, 2022. The number of the
unrestricted circulating shares of the Company increased from 200,662,765 before the listing to
listing to 0.
On May 12, 2022, the 2021 annual General Meeting of Shareholders was held to deliberate on and approve
the Company's Plan for Profit Distribution and Capitalization of Capital Reserves for 2021, in which the
Company distributed to all shareholders a cash dividend of RMB8.60 (tax inclusive) per 10 shares based
on the total share capital as of the record date on which equity distribution is implemented and issued 4
shares for every 10 shares to all shareholders through capitalization of the capital reserve, totaling
number of the unrestricted circulating shares of the Company increased from 201,009,966 before the
listing to 281,413,952.
On July 25, 2022, the 7th meeting of the third session of Board of Directors and the 7th meeting of the
third session of Board of Supervisors were held to deliberate on and approve the Proposal on the Granting
of Restricted Shares to Incentive Recipients, which considered that the granting conditions specified in the
restricted shares would be granted to 101 eligible incentive recipients at the consideration of
RMB78.56/share on July 25, 2022, which is considered the grant day. On September 6, 2022, the Company
completed the registration of the grant under the 2022 Restricted Share Incentive Plan at CSDC Shanghai
Branch. The number of the restricted circulating shares of the Company increased from 0 before the listing
to 2,100,000.
With the Approval of the CSRC, namely, the Reply on Approving Proya Cosmetics Co., Ltd.'s Public
Issuance of Convertible Corporate Bonds (Zheng Jian Xu Ke [2021] No. 3408), on December 8, 2021,
the Company publicly issued 7,517,130 convertible bonds with a face value of RMB100 per share and a
total face value of RMB751,713,000, with a term of 6 years. With the approval of the SSE's Self-
Regulatory Supervision Decision Letter [2021] No. 503, the convertible corporate bonds issued by the
Company amounting to RMB751,713,000 would be listed and traded on the Shanghai Stock Exchange
from January 4, 2022, with the short name of "Proya Convertible Bond" and the bond code of "113634".
The Proya Convertible Bond started conversion on June 14, 2022. As of December 31, 2022, RMB776,000
of Proya Convertible Bond had been converted to A-share stocks of the Company, generating 5,517 shares.
The number of the unrestricted circulating shares of the Company increased by 5,517.
Annual Report 2022
financial indicators in the last year and period (if any)
√ Applicable □ Not applicable
Implementation of the 2021 plan for capitalization of capital reserves: calculated based on the diluted total
share capital after the capitalization of capital reserves.
Changes in other shares: no material impact.
authority requires
□ Applicable √ Not applicable
(II) Changes in restricted shares
√ Applicable □ Not applicable
Unit: Share
Number of Number of Number of
Number of
restricted restricted restricted Date of
restricted Reason for
Name of shares at shares shares releasing
shares at the sales
shareholder the released increased the sales
end of the restriction
beginning during the during the restriction
year
of the year year year
Restricted
JIN Yanhua 39,320 39,320 140,000 140,000 -
Stock
Incentive Plan
Restricted
WANG Li 22,382 22,382 180,000 180,000 -
Stock
Incentive Plan
granted for The grant for
the first time the first time
under 2018 under 2018 January
Restricted Restricted 20, 2022
Stock Stock
Incentive Incentive Plan
Plan
granted with The grant with
reserve under reserve under
Restricted Restricted 20, 2022
Stock Stock
Incentive Incentive Plan
Plan
Annual Report 2022
granted under
Restricted
Restricted 0 0 1,780,000 1,780,000 -
Stock
Stock
Incentive Plan
Incentive
Plan
Total 347,201 347,201 2,100,000 2,100,000 / /
II. Issuance and Listing of Securities
(I) Issuance of securities as of the Reporting Period
√ Applicable □ Not applicable
Unit: Share Currency: RMB
Number of
Issue
Category of shares
price (or Issue Circulation Termination
shares and their Issue date available for
interest quantity date date
derivatives circulation
rate)
and trading
Convertible corporate bonds and warrant bonds
Convertible
corporate bonds
Issuance of securities in the Reporting Period (provide separate explanation on bonds with different
interest rates in their duration):
√ Applicable □ Not applicable
With the Approval of the CSRC, namely, the Reply on Approving Proya Cosmetics Co., Ltd.'s Public
Issuance of Convertible Corporate Bonds (Zheng Jian Xu Ke [2021] No. 3408), on December 8, 2021,
the Company publicly issued 7,517,130 convertible bonds with a face value of RMB100 per share and a
total face value of RMB751,713,000. These convertible bonds were issued at face value with a term of 6
years.
With the approval of the SSE's Self-Regulatory Supervision Decision Letter [2021] No. 503, the
convertible corporate bonds issued by the Company amounting to RMB751,713,000 would be listed and
traded on the Shanghai Stock Exchange from January 4, 2022, with the short name of "Proya Convertible
Bond" and the bond code of "113634". The nominal interest rate of the convertible corporate bonds issued
this time was as follows: 0.30% in the first year, 0.50% in the second year, 1.00% in the third year, 1.50%
in the fourth year, 1.80% in the fifth year, and 2.00% in the sixth year. The duration of the convertible
corporate bonds runs from December 8, 2021 to December 7, 2027.
According to relevant regulations and the Prospectus of Proya Cosmetics Co., Ltd. for the Public Offering
of A-Share Convertible Corporate Bonds, this “Proya Convertible Bond” issued by the Company can be
converted to the Company's shares from June 14, 2022. The convertible period is from June 14, 2022 to
December 7, 2027. The initial conversion price is 195.98 RMB/share. The latest conversion price is 138.92
RMB/share. The historical adjustments to the conversion price are as follows:
“Proya Convertible Bond” was adjusted to RMB139.37/share on May 30, 2022. For details, see the
Announcement of Proya Cosmetics Co., Ltd. on Adjustment of Conversion Price due to 2021 Equity
Annual Report 2022
Distribution Plan (No.: 2022-029) released by the Company on the SSE website on May 24, 2022
(www.sse.com.cn).
Plan was completed, the conversion price of the “Proya Convertible Bond” has been adjusted to 138.92
RMB/share since September 9, 2022. For details, see the Announcement of Proya Cosmetics Co., Ltd. on
Adjustment of Conversion Price due to Additional Issuance from Granting of Restricted Shares (No.:
(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
The total number of the Company's ordinary shares at the beginning and end of the Reporting Period was
The Company's total assets and total liabilities at the beginning of the Reporting Period amounted to
RMB4,633,049,783.03 and RMB1,746,209,355.96 respectively, with the asset-liability ratio of 37.69%.
The Company's total assets and total liabilities at the end of the Reporting Period amounted to
RMB5,778,071,824.19 and RMB2,240,848,493.90 respectively, with the asset-liability ratio of 38.78%.
(III) Existing internal employee shares
□ Applicable √ Not applicable
III. Shareholders and Actual Controllers
(I) Total number of shareholders
Total number of shareholders of ordinary shares as
of the end of the Reporting Period
Total number of shareholders of ordinary shares at
the end of last month prior to the disclosure date 13,080
of the Annual Report
Total number of shareholders of preferred shares
whose voting rights have been restored as of the 0
end of the Reporting Period
Total number of shareholders of preferred shares
whose voting rights have been restored at the end
of last month prior to the disclosure date of the
Annual Report
(II) Table of shareholdings of the top ten shareholders and the top ten shareholders of circulating
shares (or unrestricted shareholders) as of the end of the Reporting Period
Unit: share
Shareholdings of the top ten shareholders
Name of Number of Number Pledged,
Change Percentage Nature of
shareholder shares held of marked or
during the (%) shareholder
(full name) at the end restricted frozen
Annual Report 2022
Reporting of the shares Share
Number
Period period held status
Domestic
HOU
Juncheng
person
Hong Kong
Securities
Clearing 17,317,429 64,473,469 22.74 0 None Other
Company
Limited
Domestic
FANG Yuyou 9,424,627 45,772,470 16.14 0 None natural
person
China
Construction
Bank Co.,
Ltd. - Yinhua
Fuyu Theme 5,801,301 5,801,301 2.05 0 None Other
Hybrid
Securities
Investment
Fund
China
Construction
Bank Co.,
Ltd. - CUAM
Consumer
Industry
Hybrid
Securities
Investment
Fund
Aberdeen
Standard
Investment
Management
(Asia) Co.,
Ltd. -
Aberdeen
Standard -
China A-share
Equity Fund
Annual Report 2022
Industrial and
Commercial
Bank of China
Limited -
Jingshun
Changcheng
Emerging
Growth
Hybrid
Securities
Investment
Fund
Industrial and
Commercial
Bank of China
Limited -
CUAM
Consumption 300,002 1,500,089 0.53 0 None Other
Upgrade
Hybrid
Securities
Investment
Fund
Domestic
CAO
-2,407,401 1,362,537 0.48 0 None natural
Liangguo
person
J. P. Morgan
Securities
PLC - Self-
owned Capital
Shareholdings of the top ten unrestricted shareholders
Number of unrestricted Type and number of shares
Name of shareholder
circulating shares held Type Number
HOU Juncheng 97,670,741 RMB ordinary shares 97,670,741
Hong Kong Securities
Clearing Company Limited
FANG Yuyou 45,772,470 RMB ordinary shares 45,772,470
China Construction Bank
Co., Ltd. - Yinhua Fuyu
Theme Hybrid Securities
Investment Fund
China Construction Bank
Co., Ltd. - CUAM Consumer
Industry Hybrid Securities
Investment Fund
Annual Report 2022
Aberdeen Standard
Investment Management
(Asia) Co., Ltd. - Aberdeen 2,552,293 RMB ordinary shares 2,552,293
Standard - China A-share
Equity Fund
Industrial and Commercial
Bank of China Limited -
Jingshun Changcheng 2,380,000 RMB ordinary shares 2,380,000
Emerging Growth Hybrid
Securities Investment Fund
Industrial and Commercial
Bank of China Limited -
CUAM Consumption 1,500,089 RMB ordinary shares 1,500,089
Upgrade Hybrid Securities
Investment Fund
CAO Liangguo 1,362,537 RMB ordinary shares 1,362,537
J. P. Morgan Securities PLC
- Self-owned Capital
Explanation on the special
account for repurchase
None
among the top ten
shareholders
Explanation on the above-
mentioned shareholders'
entrusting voting rights, None
entrusted voting rights and
abstention from voting rights
Explanation on the related
relationship or parties acting FANG Yuyou is the younger brother of HOU Juncheng's spouse FANG
in concert among the above Aiqin, so HOU Juncheng and FANG Yuyou are related.
shareholders
Explanation on the
shareholders of preferred
shares with voting rights None
restored and their
shareholdings
Shareholdings and sales restrictions of the top ten restricted shareholders
√ Applicable □ Not applicable
Unit: share
Number of Availability of restricted
Name of shareholder of Sales
Number restricted shares for circulation and
restricted shares restrictions
shares held trading
Annual Report 2022
Number of
Time of
new shares
availability
available
for
for
circulation
circulation
and trading
and trading
See the
explanation
below for
details
Explanation on the related relationship or
parties acting in concert among the above None
shareholders
Note: The restricted shares held by equity incentive recipients are those granted under the 2022 Restricted
Stock Incentive Plan. The restricted period was 12 months, 24 months, and 36 months from the completion
of their registration with CSDC Shanghai Branch (September 6, 2022).
(III) Strategic investors or general legal persons becoming the top ten shareholders because of
placing of new shares
□ Applicable √ Not applicable
IV. Controlling shareholders and Actual Controllers
(I) Controlling shareholders
□ Applicable √ Not applicable
√ Applicable □ Not applicable
Name HOU Juncheng and Fang Aiqin
Nationality Chinese
Acquire residence permits in other
No
countries or regions or not
HOU Juncheng and Fang Aiqin are husband and wife. HOU
Juncheng serves as the Chairman of the Company, and Fang
Main job and title
Aiqin serves as the Senior Purchasing Consultant of the
Company.
□ Applicable √ Not applicable
□ Applicable √ Not applicable
Annual Report 2022
controlling shareholders
√ Applicable □ Not applicable
(II) Actual controllers
□ Applicable √ Not applicable
√ Applicable □ Not applicable
Name HOU Juncheng and Fang Aiqin
Nationality Chinese
Acquire residence permits in other
No
countries or regions or not
HOU Juncheng and Fang Aiqin are husband and wife. HOU
Juncheng serves as the Chairman of the Company, and Fang
Main job and title
Aiqin serves as the Senior Purchasing Consultant of the
Company.
Shareholdings in other domestic or
overseas listed companies over the None
past 10 years
□ Applicable √ Not applicable
□ Applicable √ Not applicable
controllers
√ Applicable □ Not applicable
Annual Report 2022
management
□ Applicable √ Not applicable
(III) Other explanations on controlling shareholders and actual controllers
□ Applicable √ Not applicable
V. The accumulative number of pledged shares of the Company's controlling shareholders or the
largest shareholder and its persons acting in concert accounted for more than 80% of the
Company's shares held by them
□ Applicable √ Not applicable
VI. Other Legal Person Shareholders with More Than 10% Shareholdings
□ Applicable √ Not applicable
VII. Explanation on Limitation on Reduction of Shareholding
□ Applicable √ Not applicable
VIII.Specific Implementation of Share Repurchase During the Reporting Period
□ Applicable √ Not applicable
Section VIII Information on Preferred Shares
□ Applicable √ Not applicable
Annual Report 2022
Section IX Information on Bonds
I. Enterprise Bonds, Corporate Bonds and Non-financial Corporate Debt Financing Instruments
□ Applicable √ Not applicable
II. Convertible Corporate Bonds
√ Applicable □ Not applicable
(I) Issuance of convertible bonds
√ Applicable □ Not applicable
With the Approval of the CSRC, namely, the Reply on Approving Proya Cosmetics Co., Ltd.'s Public
Issuance of Convertible Corporate Bonds (Zheng Jian Xu Ke [2021] No. 3408), on December 8, 2021,
the Company publicly issued 7,517,130 convertible bonds with a face value of RMB100 per share and a
total face value of RMB751,713,000. These convertible bonds were issued at face value with a term of 6
years.
With the approval of the SSE's Self-Regulatory Supervision Decision Letter [2021] No. 503, the
convertible corporate bonds issued by the Company amounting to RMB751,713,000 would be listed and
traded on the Shanghai Stock Exchange from January 4, 2022, with the short name of "Proya Convertible
Bond" and the bond code of "113634". The nominal interest rate of the convertible corporate bonds issued
this time was as follows: 0.30% in the first year, 0.50% in the second year, 1.00% in the third year, 1.50%
in the fourth year, 1.80% in the fifth year, and 2.00% in the sixth year. The duration of the convertible
corporate bonds runs from December 8, 2021 to December 7, 2027.
According to relevant regulations and the Prospectus of Proya Cosmetics Co., Ltd. for the Public Offering
of A-Share Convertible Corporate Bonds, this “Proya Convertible Bond” issued by the Company can be
converted to the Company's shares from June 14, 2022. The convertible period is from June 14, 2022 to
December 7, 2027. The initial conversion price is 195.98 RMB/share. The latest conversion price is 138.92
RMB/share. The historical adjustments to the conversion price are as follows:
Proya Convertible Bond was adjusted to RMB139.37/share on May 30, 2022. For details, see the
Announcement of Proya Cosmetics Co., Ltd. on Adjustment of Conversion Price due to 2021 Equity
Distribution Plan (No.: 2022-029) released by the Company on the SSE website on May 24, 2022
(www.sse.com.cn).
Plan was completed, the conversion price of the Proya Convertible Bond has been adjusted to 138.92
RMB/share since September 9, 2022. For details, see the Announcement of Proya Cosmetics Co., Ltd. on
Adjustment of Conversion Price due to Additional Issuance from Granting of Restricted Shares (No.:
(II) Holders and guarantors of convertible bonds during the Reporting Period
√ Applicable □ Not applicable
Name of the convertible corporate
Proya Convertible Bond
bond
Number of holders of the convertible
corporate bond at the end of the
Annual Report 2022
Reporting Period
Guarantors of the convertible bond of
None
the Company
The top ten holders of the convertible bond are as follows:
Number of bonds held at
Name of holders of the convertible
the end of the Reporting Holding ratio (%)
corporate bond
Period (RMB)
Dajia Assets - Minsheng Bank - Dajia
Assets - Selected Conservative
Portfolio No.5 (Issue 2) Collective
Asset Management Product
China Merchants Bank Co., Ltd. -
Huabao Convertible Bond Securities 40,233,000 5.36
Investment Fund
ICBC Credit Suisse Ruixi Fixed-
income Pension Product - Bank of 26,647,000 3.55
China Limited
Industrial and Commercial Bank of
China Limited - Southern Profitable
Return Bond Securities Investment
Fund
Dajia Assets - China Merchants Bank -
Dajia Assets - Selected Conservative
Portfolio No.1 (Issue 1) Collective
Asset Management Product
Industrial and Commercial Bank of
China Limited - Yinhua Convertible 21,487,000 2.86
Bond Securities Investment Fund
Dajia Assets - China CITIC Bank -
Dajia Assets Houkun No.40 Collective 20,481,000 2.73
Asset Management Product
Generali Asset Management -
Industrial and Commercial Bank of
China - Generali Asset Management - 19,000,000 2.53
Selected Bond Asset Management
Product
Dajia Assets - Postal Savings Bank of
China - Dajia Assets - Selected
Conservative Portfolio No.6 (Issue 2)
Collective Asset Management Product
China Merchants Bank Co., Ltd. -
Oriental Juli Bond Securities 12,500,000 1.66
Investment Fund
Annual Report 2022
(III) Changes in convertible bonds during the Reporting Period
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Name of the Increase or decrease due to this change
convertible Before this After this
Share
corporate change Redemption Sell-back change
conversion
bond
Proya
Convertible 751,713,000 776,000 0 0 750,937,000
Bond
Cumulative conversion of convertible bonds during the Reporting Period
√ Applicable □ Not applicable
Name of the convertible corporate bond Proya Convertible Bond
Amount of shares converted from bonds in the
Reporting Period (RMB)
Number of shares converted from bonds in the
Reporting Period (share)
Accumulated number of shares converted from
bonds (share)
Proportion of the accumulated number of
converted shares in the total number of issued 0.0020
shares of the Company before conversion (%)
Amount of bonds not converted into shares
(RMB)
Proportion of unconverted convertible bonds in
the total amount of convertible bonds issued (%)
(IV) Historical adjustments to the conversion price
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Name of the convertible
Proya Convertible Bond
corporate bond
Date of Adjusted Time of Media of Explanation on adjustments to
adjustment conversion price disclosure disclosure the conversion price
Since the 2021 Equity
SSE website,
Distribution Plan was
Shanghai
implemented by the Company,
May 30, 139.37 May 24, Securities
the conversion price of the Proya
Convertible Bond was adjusted
Securities
to 139.37 RMB/share on May
Times
Annual Report 2022
Announcement of Proya
Cosmetics Co., Ltd. on
Adjustment of Conversion Price
due to 2021 Equity Distribution
Plan (No.: 2022-029) released
by the Company on the SSE
website on May 24, 2022
(www.sse.com.cn).
Since the registration of
restricted shares involved in the
grant under the 2022 Restricted
Stock Incentive Plan was
completed, the conversion price
of the Proya Convertible Bond
SSE website, has been adjusted to 138.92
Shanghai RMB/share since September 9,
September 138.92 September Securities 2022. For details, see the
Securities Cosmetics Co., Ltd. on
Times Adjustment of Conversion Price
due to Additional Issuance from
Granting of Restricted Shares
(No.: 2022-052) released by the
Company on the SSE website on
September 8, 2022
(www.sse.com.cn).
Latest conversion price as of the
end of the Reporting Period
(V) The Company's liabilities, changes in credit, and cash arrangements for debt repayment in
future years
□ Applicable √ Not applicable
(VI) Other explanations on convertible bonds
□ Applicable √ Not applicable
Section X Financial Report
I. Audit Report
√ Applicable □ Not applicable
Audit Report
Tian Jian Shen [2023] No.3128
To all shareholders of Proya Cosmetics Co., Ltd.:
Annual Report 2022
I. Audit Opinion
We have audited the financial statements of Proya Cosmetics Co., Ltd. (hereinafter referred to as "Proya"),
which comprise the consolidated and parent company's balance sheets as at December 31, 2022, the
consolidated and parent company's income statements, the consolidated and parent company's cash flow
statements, and the consolidated and parent company's statements of changes in shareholders' equity for
the year of 2022, as well as notes to financial statements.
In our opinion, the accompanying financial statements were prepared in accordance with the Accounting
Standards for Business Enterprises in all material aspects and give a true and fair view of the consolidated
and parent company's financial position of Proya as at December 31, 2022 and of its consolidated and
parent company's operating results and cash flows for the year of 2022.
II. Basis of Audit Opinion
We have conducted our audit in accordance with the Chinese Auditing Standards for Certified Public
Accountants. The "Responsibilities of CPAs for the Audit of the Financial Statements" herein further
illustrate our responsibilities under those standards. In accordance with the Code of Professional Ethics of
Chinese Certified Public Accountants, we are independent of Proya and have performed other
responsibilities in respect of professional ethics. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
III. Key Audit Matters
Key audit matters are, in our professional judgment, most significant in our audit of the financial
statements for the current period. These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, we do not provide a separate opinion on these
matters.
(I) Recognition of revenue
For relevant information disclosure, refer to "38. Revenue" in "V. Significant Accounting Policies and
Estimates", "61. Operating revenue and operating costs" in "VII. Notes to the Items of Consolidated
Financial Statements", and "6. Segment information" in "XVI. Other Significant Matters" of "Section X
Financial Report" herein.
The operating revenue of Proya primarily comes from the sale of cosmetics. The operating revenue for
Pursuant to the sales contract between Proya and its customer, under the distribution model, the sales
revenue is recognized by Proya when its products are delivered to and accepted by the buyers. Under the
agency sales model, the sales revenue is recognized by Proya when its products are delivered to the agent
and the agent completes the sales and issues the sales list for goods. Under the direct sales model, the sales
revenue is recognized by Proya when its products are delivered to its consumer and the consumer confirms
the receipt and makes the payment.
Since operating revenue is one of the key performance indicators of Proya, there is an inherent risk that
the management of Proya (hereinafter referred to as the "management") achieves specific goals or
expectations through inappropriate recognition of revenue. Therefore, we identify the recognition of
revenue as a key audit matter.
For recognition of revenue, we primarily implemented the following audit procedures:
Annual Report 2022
(1) To obtain an understanding of key internal controls related to the recognition of revenue, evaluate the
design of these controls, determine whether these controls were implemented, and test the operational
effectiveness of these controls;
(2) To issue letters to the main customers to confirm the sales amount in 2022 and the balance of accounts
receivable as at the end of 2022;
(3) To test details and make a spot-check on supporting documents for recognition of revenue (including
sales contracts, delivery documents, receipts, agency sales lists, and sales invoices), understand major
contract terms or conditions, and evaluate the appropriateness of the method for recognition of revenue;
(4) To implement analysis procedures, including analysis on fluctuations in revenue of each month of
(5) To obtain the rebate and subsidy policies, rebate and subsidy calculation sheets and other information,
and check whether the withholding amount of rebate and subsidy as at the end of 2022 was sufficient; to
analyze whether the amount of rebate and subsidy and the withholding amount were reasonable based on
the rebate and subsidy policy as well as the revenue in 2022; and to check the settlement after the rebate
and subsidy withholding period as at the end of 2022;
(6) To obtain the return and exchange policy, calculation sheet of provisions and other information, and
check whether the estimated future return and exchange rate is reasonable; to check the subsequent return
and exchange situation and compare it with the estimated return and exchange data;
(7) To learn about the inventory and stock age of each major dealer as at the end of 2022 and check whether
the inventory amount and structure of the dealer were reasonable;
(8) To analyze the sales data of main online chain stores by calculating the consumption per capita,
consumption per time, purchase times and repurchase information of customers of online chain stores and
comparing them with the selling prices and normal use days of Proya products, so as to judge the rationality
of the above data in combination with normal consumption habits and analyze the authenticity and
rationality of the income of online chain stores;
(9) To compare the background transaction data, Alipay receipt data and sales revenue data on financial
accounts of online chain stores, and analyze the matching attribute of data, so as to check the authenticity
of sales from the online chain stores;
(10) To check whether the information related to the operating revenue is properly presented in the
financial statements.
(II) Net realizable value of inventories
For relevant information disclosure, refer to "15. Inventories" in "V. Significant Accounting Policies and
Estimates" and "9. Inventories" in "VII. Notes to the Items of Consolidated Financial Statements" of
"Section X Financial Report" herein.
As of December 31, 2022, the book balance of inventories of Proya amounted to RMB710.13million, the
provision for devaluation of inventories amounted to RMB41.08million, and the carrying value of
inventories amounted to RMB669.05million.
At the balance sheet date, inventories are measured at the lower of cost and net realizable value, and
provision for devaluation of inventories is made if the cost of a single inventory is higher than its net
realizable value. On the basis of considering the purpose of holding inventories, the management
determines the estimated selling price based on the historical selling price, actual selling price, and future
market trends, and also determines the net realizable value based on the amount after deducting the
estimated cost of completion, estimated sale expense and relevant taxes from the estimated sale price of
inventories.
Annual Report 2022
Since the amount of inventories is significant and the determination of the net realizable value of
inventories involves significant judgment by the management, we identified the net realizable value of
inventories as a key audit matter.
For net realizable value of inventories, we primarily implemented the following audit procedures:
(1) To obtain an understanding of key internal controls related to the net realizable value of inventories,
evaluate the design of these controls, determine whether these controls were implemented, and test the
operational effectiveness of these controls;
(2) To obtain the accrual policy and calculation process for provision for devaluation of inventories, and
re-check the calculation process;
(3) To obtain the list of products that are no longer sold, count the products rolling off the production lines
in the inventories and the corresponding raw material inventories, and verify whether the provision for
devaluation of inventories was accrued for the raw material inventories;
(4) To check whether the inventories as at the end of the period had long inventory ages, outdated models
and changes in market demand in combination with the inventory monitoring, and evaluate whether the
management reasonably estimated the net realizable value;
(5) To check whether the information related to the net realizable value of inventories was properly
presented in the financial statements.
IV. Other Information
The management is responsible for the other information, which comprises all the information covered in
the Annual Report other than the financial statements and this audit report.
Our audit opinion on the financial statements does not cover the other information and we do not express
any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
V. Responsibilities of the Management and Those Charged With Governance for the Financial
Statements
The management is responsible for the preparation of financial statements that give a true and fair view in
accordance with the Accounting Standards for Business Enterprises, and for the design, implementation
and maintenance of necessary internal control to enable the preparation of financial statements that are
free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the management is responsible for assessing Proya's ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the management either intends to liquidate the Company or to cease
operations, or has no realistic alternative but to do so.
The governance of Proya (hereinafter referred to as "governance") is responsible for overseeing the
financial reporting process of Proya.
VI. Responsibilities of CPAs for the Audit of the Financial Statements
Our objective is to obtain reasonable assurance of whether there is a material misstatement in the financial
statements as a whole due to fraud or error and to issue an audit report containing audit opinion.
Annual Report 2022
Reasonable assurance is a highly reliable assurance, but is not a guarantee that an audit conducted in
accordance with China Standards on Auditing will always identify a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of these
financial statements.
As part of an audit in accordance with the auditing standards, we exercise professional judgment and
maintained professional skepticism throughout the audit. We also:
(I) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not identifying a material
misstatement resulting from fraud is higher than that of failing to detect one resulting from error, as fraud
may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control.
(II) Obtain an understanding of internal control related to the audit to design the appropriate audit
procedures.
(III) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the management.
(IV) Conclude on the appropriateness of the management's use of the going concern basis of accounting
and, based on the audit evidence obtained, determined whether a material uncertainty exists related to
events or conditions that may significantly affect Proya's ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our audit report to the
related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion.
Our conclusions are based on the audit evidence obtained up to the date of our audit report. However,
future events or conditions may cause Proya to cease to continue as a going concern.
(V) Evaluate the overall presentation, structure and content of the financial statements, and determine
whether the financial statements reflect the related transactions and events fairly.
(VI) Obtain sufficient and appropriate audit evidence of the financial information of the entity or business
activity of Proya in order to express an opinion on the financial statements. We are responsible for
directing, supervising and performing group audits. We take full responsibility for the audit opinion.
We communicate with the governance regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during the audit.
We also provide a statement to those charged with governance on compliance with ethical requirements
related to independence, and communicate with them all relationships and other matters that may be
reasonably considered to affect our independence, as well as related precautions (if applicable).
From the matters we discussed with the those charged with governance, we determine those matters were
of most significance in the audit of the financial statements for the current period and are therefore the key
audit matters. We describe these matters in the audit report unless laws or regulations preclude public
disclosure about these matters or when, in extremely rare circumstances, we determine that a matter should
not be communicated in our audit report because the adverse consequences of doing so would reasonably
be expected to outweigh the public interest benefits of such communication.
Pan-China Certified Public Accountants LLP Chinese CPA: YIN Zhibin
(Project Partner)
Hangzhou, China Chinese CPA: WANG Xiaokang
Annual Report 2022
April 19, 2023
II. Financial Statements
Consolidated Balance Sheet
As at December 31, 2022
Prepared by: Proya Cosmetics Co., Ltd.
Unit: Yuan Currency: RMB
Item Notes As at December 31, 2022 As at December 31, 2021
Current assets:
Cash and cash equivalents VII. 1 3,161,003,085.05 2,391,048,249.81
Clearing settlement funds
Loans to banks and other
financial institutions
Held-for-trading financial
assets
Derivative financial assets
Notes receivable
Accounts receivable VII. 5 102,157,898.41 138,626,627.90
Receivable financing VII. 6 3,242,000.00
Prepayments VII. 7 91,483,523.15 58,406,647.11
Premiums receivable
Reinsurance premium
receivable
Reserves for reinsurance
contract receivable
Other receivables VII. 8 73,564,083.63 66,043,707.81
Including: Interest receivable
Dividends receivable
Financial assets purchased
under resale agreements
Inventories VII. 9 669,051,326.73 447,938,758.29
Contract assets
Held-for-sale assets
Non-current assets due
within one year
Other current assets VII. 13 49,735,996.57 53,534,962.39
Total current assets 4,146,995,913.54 3,158,840,953.31
Non-current assets:
Loans and advances to
customers
Debt investments
Annual Report 2022
Other debt investments
Long-term receivables
Long-term equity VII. 17
investments
Other equity instrument VII. 18
investments
Other non-current financial
assets
Investment real estate VII. 20 68,654,700.81 70,321,868.00
Fixed assets VII. 21 570,376,309.67 558,981,209.20
Construction in progress VII. 22 207,378,935.86 108,678,896.27
Bearer biological assets
Oil and gas assets
Right-of-use assets VII. 25 6,410,634.25
Intangible assets VII. 26 420,316,883.26 397,145,124.29
Development expenditure
Goodwill
Long-term prepaid expenses VII. 29 19,142,604.46 29,756,474.11
Deferred income tax assets VII. 30 48,305,338.82 38,796,018.02
Other non-current Assets VII. 31 5,554,726.06 44,167,303.56
Total non-current assets 1,631,075,910.65 1,474,208,829.72
Total assets 5,778,071,824.19 4,633,049,783.03
Current liabilities:
Short-term borrowings VII. 32 200,195,890.41 200,251,506.85
Loans from the central bank
Placements from banks and
other financial institutions
Held-for-trading financial
liabilities
Derivative financial
liabilities
Notes payable VII. 35 69,626,352.12 79,156,771.40
Accounts payable VII. 36 475,427,484.23 404,026,241.16
Advance from customers VII. 37 464,328.26 173,769.85
Contract liabilities VII. 38 174,602,833.91 91,151,985.32
Financial assets sold under
repurchase agreements
Customer deposits and
deposits from banks and other
financial institutions
Funds from securities trading
agencies
Funds from underwriting
securities agencies
Annual Report 2022
Employee compensation VII. 39
payable
Taxes payable VII. 40 152,918,871.45 99,893,176.97
Other payables VII. 41 216,392,183.41 62,162,153.55
Including: Interest payable
Dividends payable
Fees and commissions
payable
Amounts payable under
reinsurance contracts
Held-for-sale liabilities
Non-current liabilities due VII. 43
within one year
Other current liabilities VII. 44 10,820,499.59 9,521,415.32
Total current liabilities 1,427,936,644.88 1,024,986,070.14
Non-current liabilities:
Insurance contract reserves
Long-term borrowings
Bonds payable VII. 46 724,491,557.93 695,586,778.80
Including: Preferred stock
Perpetual bonds
Lease liabilities VII. 47 3,718,119.41
Long-term payables
Long-term employee
compensation payable
Povisions VII. 50 59,282,928.68 10,812,084.88
Deferred income VII. 51 6,399,811.33 6,416,263.33
Deferred income tax VII. 30
liabilities
Other non-current liabilities
Total non-current
liabilities
Total liabilities 2,240,848,493.90 1,746,209,355.96
Owners' equity (or shareholders' equity):
Paid-in capital (or share VII. 53
capital)
Other equity instruments VII. 54 50,903,510.12 50,956,622.11
Including: Preferred stock
Perpetual bonds
Capital reserve VII. 55 914,815,786.22 834,272,205.66
Less: Treasury shares VII. 56 164,976,000.00 5,628,128.21
Other comprehensive VII. 57
-1,918,603.07 -1,247,674.10
income
Special reserve
Annual Report 2022
Surplus reserve VII. 59 141,759,734.50 100,634,780.00
General risk reserve
Retained profits VII. 60 2,300,384,763.19 1,696,978,064.52
Total owners' equity (or 3,524,488,659.96 2,876,975,835.98
shareholders' equity)
attributable to equity holders of
the parent company
Minority interests 12,734,670.33 9,864,591.09
Total owners' equity (or
shareholders' equity)
Total liabilities and
owners' equity (or shareholders' 5,778,071,824.19 4,633,049,783.03
equity)
Person in charge of
The chairman of the CFO of the Company:
Accounting Department:
Company: HOU Juncheng WANG Li
WANG Li
Parent Company's Balance Sheet
As at December 31, 2022
Prepared by: Proya Cosmetics Co., Ltd.
Unit: Yuan Currency: RMB
As at December 31,
Item Notes As at December 31, 2022
Current assets:
Cash and cash equivalents 2,169,179,716.12 1,691,858,730.42
Held-for-trading financial
assets
Derivative financial assets
Notes receivable
Accounts receivable XVII. 1 289,883,063.24 354,196,955.99
Receivable financing 3,092,000.00
Prepayments 34,908,418.05 24,580,460.37
Other receivables XVII. 2 141,574,549.59 222,452,930.42
Including: Interest receivable
Dividends receivable
Inventories 458,341,886.37 271,436,146.45
Contract assets
Held-for-sale assets
Non-current assets due
within one year
Other current assets 32,667,616.71 33,270,945.69
Total current assets 3,126,555,250.08 2,600,888,169.34
Non-current assets:
Debt investments
Annual Report 2022
Other debt investments
Long-term receivables
Long-term equity XVII. 3 394,321,950.41 350,003,540.49
investments
Other equity instrument 110,580,000.00 20,580,000.00
investments
Other non-current financial
assets
Investment real estate 348,408,309.83 362,657,495.17
Fixed assets 278,011,361.35 253,209,471.02
Construction in progress 206,756,324.14 105,012,647.89
Bearer biological assets
Oil and gas assets
Right-of-use assets 5,707,540.03
Intangible assets 382,584,698.57 395,609,113.72
Development expenditure
Goodwill
Long-term prepaid expenses 13,494,337.73 20,075,870.93
Deferred income tax assets 11,372,733.52 22,968,793.93
Other non-current Assets 4,916,417.58 4,493,322.95
Total non-current assets 1,756,153,673.16 1,534,610,256.10
Total assets 4,882,708,923.24 4,135,498,425.44
Current liabilities:
Short-term borrowings 200,195,890.41 200,251,506.85
Held-for-trading financial
liabilities
Derivative financial
liabilities
Notes payable 69,626,352.12 79,156,771.40
Accounts payable 217,330,371.42 282,934,452.33
Advance from customers
Contract liabilities 68,099,041.17 28,108,787.35
Employee compensation 58,246,111.22 33,926,736.55
payable
Taxes payable 69,952,710.78 66,893,331.24
Other payables 167,125,433.78 8,546,397.66
Including: Interest payable
Dividends payable
Held-for-sale liabilities
Non-current liabilities due 2,210,449.03
within one year
Other current liabilities
Total current liabilities 852,786,359.93 699,817,983.38
Non-current liabilities:
Annual Report 2022
Long-term borrowings
Bonds payable 724,491,557.93 695,586,778.80
Including: Preferred stock
Perpetual bonds
Lease liabilities 3,354,028.30
Long-term payables
Long-term employee
compensation payable
Provisions
Deferred income 6,399,811.33 6,416,263.33
Deferred income tax 18,758,960.23 8,395,198.23
liabilities
Other non-current liabilities
Total non-current 753,004,357.79 710,398,240.36
liabilities
Total liabilities 1,605,790,717.72 1,410,216,223.74
Owners' equity (or shareholders' equity):
Paid-in capital (or share 283,519,469.00 201,009,966.00
capital)
Other equity instruments 50,903,510.12 50,956,622.11
Including: Preferred stock
Perpetual bonds
Capital reserve 964,613,342.84 834,563,920.32
Less: Treasury shares 164,976,000.00 5,628,128.21
Other comprehensive
income
Special reserve
Surplus reserve 141,759,734.50 100,634,780.00
Retained profits 2,001,098,149.06 1,543,745,041.48
Total owners' equity (or 3,276,918,205.52 2,725,282,201.70
shareholders' equity)
Total liabilities and 4,882,708,923.24 4,135,498,425.44
owners' equity (or shareholders'
equity)
Person in charge of
The chairman of the CFO of the Company:
Accounting Department:
Company: HOU Juncheng WANG Li
WANG Li
Consolidated Income Statement
January - December 2022
Unit: Yuan Currency: RMB
Item Notes 2022 2021
I. Total operating revenue VII. 61 6,385,451,424.00 4,633,150,538.43
Including: Operating revenue VII. 61 6,385,451,424.00 4,633,150,538.43
Annual Report 2022
Interest income
Premiums earned
Fee and commission income
II. Total operating costs 5,191,391,396.39 3,892,457,794.07
Including: Operating costs VII. 61 1,934,850,203.65 1,554,155,646.61
Interest expenses
Fee and commission
expenses
Surrenders
Claims and policyholder
benefits (net of amounts recoverable
from reinsurers)
Net provision for insurance
liability reserves
Insurance policyholder
dividends
Expenses for reinsurance
accepted
Taxes and surcharges VII. 62 56,394,508.94 40,680,295.80
Selling expenses VII. 63 2,785,837,352.95 1,991,534,076.73
General and administrative VII. 64
expenses
Research and development VII. 65
expenses
Financial expenses VII. 66 -40,996,523.01 -7,484,395.13
Including: Interest expenses 13,019,503.91 9,759,260.83
Interest income 51,707,124.62 28,096,157.42
Add: Other income VII. 67 39,065,105.62 16,458,269.45
Investment income ("-" VII. 68
-5,658,023.28 -7,337,735.84
refers to loss)
Including: Income from
investments in associates and joint -5,658,023.28 -7,337,735.84
ventures
Income from
derecognition of financial assets
measured at amortized cost
Foreign exchange gains ("-"
refers to loss)
Net gain on exposure
hedging ("-" refers to loss)
Gains on changes in fair
value ("-" refers to loss)
Credit impairment loss ("-" VII. 71
-5,057,425.43 -24,834,947.18
refers to loss)
Annual Report 2022
Asset impairment losses ("-" VII. 72
-164,884,555.28 -53,513,590.04
refers to losses)
Gains from disposal of assets VII. 73
("-" refers to loss)
III. Operating profit ("-" refers to
loss)
Add: Non-operating revenue VII. 74 1,178,886.33 249,852.89
Less: Non-operating expenses VII. 75 4,613,645.24 3,801,835.06
IV. Total profits ("-" refers to total
losses)
Less: Income tax expenses VII. 76 222,866,719.56 110,746,888.31
V. Net profits ("-" refers to net
losses)
(I) Classified by the nature of continuing operations
operations ("-" refers to net losses)
discontinued operations ("-" refers
to net losses)
(II) Classified by ownership
shareholders of the parent company 817,400,223.93 576,119,025.56
("-" refers to net losses)
to minority interests ("-" refers to net 13,883,582.44 -19,065,338.53
losses)
VI. Other comprehensive income,
-670,928.97 -978,607.97
net of tax
(I) Other comprehensive income
attributable to owners of the parent -670,928.97 -978,607.97
company, net of tax
income that cannot be reclassified to
profit or loss
(1) Changes arising from the re-
measurement of net liabilities or net
assets of defined benefit plans
(2) Other comprehensive income
that cannot be reclassified to profit
or loss under the equity method
(3) Changes in fair value of other
equity instrument investments
(4) Changes in fair value of
enterprises' own credit risks
Annual Report 2022
income that will be reclassified into -670,928.97 -978,607.97
profit or loss
(1) Other comprehensive income
that will be reclassified to profit or
loss under the equity method
(2) Changes in fair value of other
debt investments
(3) Amounts of financial assets
reclassified into other
comprehensive income
(4) Provision for credit
impairment of other debt
investments
(5) Reserve for cash flow hedges
(6) Translation differences of
financial statements denominated in -670,928.97 -978,607.97
foreign currencies
(7) Others
(II) Other comprehensive income
attributable to minority interests, net
of tax
VII. Total comprehensive income 830,612,877.40 556,075,079.06
(I) Total comprehensive income
attributable to owners of the parent 816,729,294.96 575,140,417.59
company
(II) Total comprehensive income
attributable to minority interests
VIII. Earnings per share
(I) Basic earnings per share
(RMB/share)
(II) Diluted earnings per share
(RMB/share)
In case of business combination under common control, net profit realized by the combined party before
the combination in the current period was RMB0.00; net profit realized by the combined in the previous
period was RMB0.00.
The chairman of the Company: CFO of the Company: WANG Person in charge of Accounting
HOU Juncheng Li Department: WANG Li
Parent Company's Income Statement
January - December 2022
Unit: Yuan Currency: RMB
Item Notes 2022 2021
I. Operating revenue XVII. 4 3,081,136,936.75 2,273,848,366.50
Annual Report 2022
Less: Operating cost XVII. 4 1,424,725,111.00 1,076,826,259.92
Taxes and surcharges 24,372,917.75 19,398,763.14
Selling expenses 472,193,858.89 284,076,298.04
General and administrative
expenses
Research and development
expenses
Financial expenses -41,965,768.21 -9,534,296.78
Including: Interest expenses 13,019,503.91 7,909,483.79
Interest income 42,503,905.91 23,839,106.03
Add: Other income 15,650,274.95 7,273,692.73
Investment income ("-" refers XVII. 5
-4,161,437.71 -18,567,432.77
to loss)
Including: Income from
investments in associates and joint -5,149,438.13 -7,608,313.87
ventures
Income from
derecognition of financial assets
measured at amortized cost
Net gain on exposure hedging
("-" refers to loss)
Gains on changes in fair value
("-" refers to loss)
Credit impairment loss ("-"
refers to loss)
Asset impairment losses ("-"
-126,987,703.77 -25,486,816.12
refers to losses)
Gains from disposal of assets
("-" refers to loss)
II. Operating profit ("-" refers to loss) 788,849,771.00 629,736,591.27
Add: Non-operating revenue 22,010.99 25,856.69
Less: Non-operating expenses 1,516,181.13 3,739,409.87
III. Total profits ("-" refers to total
losses)
Less: Income tax expenses 116,008,968.02 72,463,653.90
IV. Net profits ("-" refers to net losses) 671,346,632.84 553,559,384.19
(I) Net profits from continuing
activities ("-" refers to net losses)
(II) Net profits from discontinuing
activities ("-" refers to net losses)
V. Net amount of other comprehensive
income after tax
(I) Other comprehensive income
that cannot be reclassified into profit
or loss
Annual Report 2022
measurement of defined benefit plans
that cannot be reclassified to profit or
loss under the equity method
other equity instrument investments
enterprise's own credit risk
(II) Other comprehensive income to
be reclassified into profit or loss
that may be reclassified to profit or
loss under equity method
debt investments
comprehensive income on
reclassification of financial assets
of other debt investments
translation of financial statements
VI. Total comprehensive income 671,346,632.84 553,559,384.19
VII. Earnings per share:
(I) Basic earnings per share
(RMB/share)
(II) Diluted earnings per share
(RMB/share)
The chairman of the Company: HOU CFO of the Company: Person in charge of
Juncheng WANG Li Accounting Department:
WANG Li
Consolidated Cash Flow Statement
January - December 2022
Unit: Yuan Currency: RMB
Item Notes 2022 2021
I. Cash flows from operating activities:
Cash received from the sale of goods
and the rendering of services
Net increase in customer deposits and
deposits from banks and other financial
institutions
Annual Report 2022
Net increase in loans from the central
bank
Net increase in taking from other
financial institutions
Cash received from premiums under
original insurance contract
Net cash received from reinsurance
business
Net cash received from policyholders'
deposits and investment contract
liabilities
Cash received from interest, fees and
commissions
Net increase in taking from banks and
other financial institutions
Net increase in financial assets sold
under repurchase arrangements
Net cash received from securities
trading agency
Receipts of tax refunds 80,005.56
Other cash received related to VII. 78 (1)
operating activities
Sub-total of cash inflows from
operating activities
Cash paid for goods purchased and
services received
Net increase in loans and advances to
customers
Net increase in balance with the central
bank and due from banks and other
financial institution
Cash paid for compensation payments
under original insurance contract
Net increase in loans to banks and
other financial institutions
Cash paid for interest, fees and
commissions
Cash paid for insurance policyholder
dividends
Cash paid to and on behalf of
employees
Payments of various types of taxes 660,096,624.31 432,668,333.55
Other cash paid related to operating VII. 78 (2)
activities
Annual Report 2022
Sub-total of cash outflows from
operating activities
Net cash flow from operating
activities
II. Cash flows from investing activities:
Cash received from disposal and
recovery of investments
Cash received from investment income
Net cash received from disposal of
fixed assets, intangible assets and other 3,751,463.96 47,622.98
long-term assets
Net cash received from disposal of
subsidiaries and other business entities
Other cash received related to
investing activities
Sub-total of cash inflows from
investing activities
Cash paid for acquisition or
construction of fixed assets, intangible 170,963,405.43 194,102,666.70
assets and other long-term assets
Cash paid for investments 131,003,609.10 70,029,200.00
Net increase in pledged loans
receivables
Net cash paid for acquiring
subsidiaries and other operating entities
Other cash paid related to investing VII. 78 (4)
activities
Sub-total of cash outflows from
investing activities
Net cash flow from investing
-298,215,550.57 -341,823,618.60
activities
III. Cash flows from financing activities:
Cash received from capital
contributions
Including: Cash received from capital
contributions from minority shareholders 700,000.00 700,000.00
of subsidiaries
Cash received from borrowings 300,000,000.00 946,996,018.87
Other cash received related to
financing activities
Sub-total of cash inflows from
financing activities
Cash repayments of borrowings 300,000,000.00 299,000,000.00
Annual Report 2022
Cash paid for distribution of dividends
or profits or settlement of interest 182,663,748.85 154,245,329.79
expenses
Including: Payments for distribution of
dividends or profits to minority owners of
subsidiaries
Other cash paid related to financing VII. 78 (6)
activities
Sub-total of cash outflows from
financing activities
Net cash flow from financing
-65,251,320.73 489,615,295.96
activities
IV. Impact of foreign exchange rate
-670,928.97 -978,607.97
changes on cash and cash equivalents
V. Net increase in cash and cash
equivalents
Add: Opening balance of cash and cash
equivalents
VI. Closing balance of cash and cash
equivalents
Person in charge of
The chairman of the Company: HOU CFO of the Company:
Accounting Department:
Juncheng WANG Li
WANG Li
Parent Company's Cash Flow Statement
January - December 2022
Unit: Yuan Currency: RMB
Item Notes 2022 2021
I. Cash flows from operating activities:
Cash received from the sale of goods and the
rendering of services
Receipts of tax refunds
Other cash received related to operating
activities
Sub-total of cash inflows from operating
activities
Cash paid for goods purchased and services
received
Cash paid to and on behalf of employees 265,940,955.35 180,867,131.86
Payments of various types of taxes 276,743,971.90 197,049,919.18
Other cash paid related to operating
activities
Sub-total of cash outflows from operating
activities
Net cash flow from operating activities 1,790,129,321.03 644,827,094.22
Annual Report 2022
II. Cash flows from investing activities:
Cash received from disposal and recovery of
investments
Cash received from investment income
Net cash received from disposal of fixed
assets, intangible assets and other long-term 1,057,300.53
assets
Net cash received from disposal of
subsidiaries and other business entities
Other cash received related to investing
activities
Sub-total of cash inflows from investing
activities
Cash paid for acquisition or construction of
fixed assets, intangible assets and other long- 163,990,474.83 135,132,853.40
term assets
Cash paid for investments 179,238,922.10 36,338,783.21
Net cash paid for acquisition of subsidiaries
and other business units
Other cash paid related to investing
activities
Sub-total of cash outflows from investing
activities
Net cash flow from investing activities -340,472,096.40 -34,093,079.88
III. Cash flows from financing activities:
Cash received from capital contributions 164,976,000.00
Cash received from borrowings 300,000,000.00 946,996,018.87
Other cash received related to financing
activities
Sub-total of cash inflows from financing
activities
Cash repayments of borrowings 300,000,000.00 200,000,000.00
Cash paid for distribution of dividends or
profits or settlement of interest expenses
Other cash paid related to financing
activities
Sub-total of cash outflows from financing
activities
Net cash flow from financing activities -18,454,612.37 589,812,011.86
IV. Impact of foreign exchange rate changes
on cash and cash equivalents
V. Net increase in cash and cash equivalents 1,431,202,612.26 1,200,546,026.20
Add: Opening balance of cash and cash
equivalents
Annual Report 2022
VI. Closing balance of cash and cash
equivalents
Person in charge of
The chairman of the Company: CFO of the Company:
Accounting Department:
HOU Juncheng WANG Li
WANG Li
Annual Report 2022
Consolidated Statements of Changes in Owners' Equity
January - December 2022
Unit: Yuan Currency: RMB
Equity attributable to owners of the parent company
Total equity
Item Minority
Paid-in capital Other equity instruments Other General attributable to
Less: Treasury Special interests
(or share Capital reserve comprehensive Surplus reserve risk Retained profits Other Subtotal owners
Preference Perpetual shares reserve
capital) Other income reserve
shares bonds
I. Balance at
the end of the 201,009,966.00 50,956,622.11 834,272,205.66 5,628,128.21 -1,247,674.10 100,634,780.00 1,696,978,064.52 2,876,975,835.98 9,864,591.09 2,886,840,427.07
previous year
Add: Changes
in accounting
policies
Correction
for previous
errors
Business
combination
under common
control
Other
II. Balance at
the beginning
of the current
year
III. Increase of
the current
period ("-" 82,509,503.00 -53,111.99 80,543,580.56 159,347,871.79 -670,928.97 41,124,954.50 603,406,698.67 647,512,823.98 2,870,079.24 650,382,903.22
refers to
decrease)
(I) Total
comprehensive -670,928.97 817,400,223.93 816,729,294.96 13,883,582.44 830,612,877.40
income
Annual Report 2022
(II) Owners'
contribution
and capital
reduction
shares
contributed by
the owners
contributions
by other equity
instrument
holders
share-based
payments 47,357,121.25 47,357,121.25 47,357,121.24
credited to
owners' equity
(III) Profit
distribution
of surplus 41,124,954.50 -41,124,954.50
reserve
of general risk
provision
to owners (or -172,868,570.76 -172,868,570.76 -172,868,570.76
shareholders)
(IV) Internal
carry-forward
of owners'
equity
capital reserve
to capital (or
share capital)
Annual Report 2022
surplus reserve
to capital (or
share capital)
reserve to cover
loss
defined benefit
scheme carried
forward to
retained
earnings
forward of
other
comprehensive
income to
retained
earnings
(V) Special
reserve
for the period
for the period
(VI) Others -
-50,040,368.19 -50,040,368.19 -61,753,871.38
IV. Balance at 283,519,469.00 2,300,384,763.19
the end of the 50,903,510.12 914,815,786.22 164,976,000.00 -1,918,603.07 141,759,734.50 3,524,488,659.96 12,734,670.33 3,537,223,330.29
period
Equity attributable to owners of the parent company Total equity
Item Minority
attributable to
interests
Other equity instruments Capital reserve Surplus reserve Retained profits Other Subtotal owners
Annual Report 2022
Paid-in capital Less: Other Special General
Preference Perpetual
(or share Other Treasury comprehensive reserve risk
shares bonds
capital) shares income reserve
I. Balance at
the end of the 201,116,925.00 837,034,836.69 12,653,905.25 -269,066.13 100,634,780.00 1,265,671,865.63 2,391,535,435.94 90,326,830.19 2,481,862,266.13
previous year
Add: Changes
in accounting
policies
Correction
for previous
errors
Business
combination
under common
control
Other
II. Balance at
the beginning 201,116,925.00 837,034,836.69 12,653,905.25 -269,066.13 100,634,780.00 1,265,671,865.63 2,391,535,435.94 90,326,830.19 2,481,862,266.13
of the year
III. Increase of
the current
period ("-" -106,959.00 50,956,622.11 -2,762,631.03 -7,025,777.04 -978,607.97 431,306,198.89 485,440,400.04 404,978,160.94
refers to
decrease)
(I) Total
comprehensive -978,607.97 576,119,025.56 575,140,417.59 556,075,079.06
income
(II) Owners'
contribution
-106,959.00 -1,999,494.15 -7,025,777.04 4,919,323.89 700,000.00 5,619,323.89
and capital
reduction
shares
-106,959.00 -1,626,846.39 -7,025,777.04 5,291,971.65 700,000.00 5,991,971.65
contributed by
the owners
contributions
by other equity
Annual Report 2022
instrument
holders
share-based
payments -372,647.76 -372,647.76 -372,647.76
credited to
owners' equity
(III) Profit
-144,804,186.00 -144,804,186.00 -144,804,186.00
distribution
of surplus
reserve
of general risk
provision
to owners (or -144,804,186.00 -144,804,186.00 -144,804,186.00
shareholders)
(IV) Internal
carry-forward
of owners'
equity
capital reserve
to capital (or
share capital)
surplus reserve
to capital (or
share capital)
reserve to cover
loss
defined benefit
scheme carried
forward to
retained
Annual Report 2022
earnings
forward of
other
comprehensive
income to
retained
earnings
(V) Special
reserve
for the period
for the period
(VI) Others -
IV. Balance at
the end of the 201,009,966.00 50,956,622.11 834,272,205.66 5,628,128.21 -1,247,674.10 100,634,780.00 1,696,978,064.52 2,876,975,835.98 9,864,591.09 2,886,840,427.07
period
The chairman of the Company: HOU Juncheng CFO of the Company: WANG Li Person in charge of Accounting Department: WANG Li
Parent Company's Statement of Changes in Owners' Equity
January - December 2022
Unit: Yuan Currency: RMB
Paid-in Other equity instruments Other
Item capital (or Less: Treasury compre Special Total equity
Preference Perpetual Capital reserve Surplus reserve Retained profits
share Other shares hensive reserve attributable to owners
shares bonds
capital) income
I. Balance at the
end of the 834,563,920.32 5,628,128.21 100,634,780.00 1,543,745,041.48 2,725,282,201.70
previous year
Add: Changes
in accounting
policies
Annual Report 2022
Correction
for previous
errors
Other
II. Balance at
the beginning of 834,563,920.32 5,628,128.21 100,634,780.00 1,543,745,041.48 2,725,282,201.70
the year
III. Increase of
the current
period ("-" -53,111.99 130,049,422.52 159,347,871.79 41,124,954.50 457,353,107.58 551,636,003.82
refers to
decrease)
(I) Total
comprehensive 671,346,632.84 671,346,632.84
income
(II) Owners'
contribution and
capital
reduction
shares
contributed by
the owners
contributions by
other equity
instrument
holders
share-based
payments 47,357,121.24 47,357,121.24
credited to
owners' equity
Annual Report 2022
(III) Profit
distribution
of surplus 41,124,954.50 -41,124,954.50
reserve
to owners (or -172,868,570.76 -172,868,570.76
shareholders)
(IV) Internal
carry-forward 80,403,986.0
-80,403,986.00
of owners' 0
equity
capital reserve 80,403,986.0
-80,403,986.00
to capital (or 0
share capital)
surplus reserve
to capital (or
share capital)
reserve to cover
loss
defined benefit
scheme carried
forward to
retained
earnings
forward of other
Annual Report 2022
comprehensive
income to
retained
earnings
(V) Special
reserve
for the period
for the period
(VI) Others -534,526.22 -534,526.22
IV. Balance at
the end of the 964,613,342.84 164,976,000.00 141,759,734.50 2,001,098,149.06 3,276,918,205.52
period
Paid-up Other equity instruments Other
Item capital (or Less: Treasury compre Special Total equity
Preference Perpetual Capital reserve Surplus reserve Retained profits
share Other shares hensive reserve attributable to owners
shares bonds
capital) income
I. Balance at the
end of the 837,075,425.32 12,653,905.25 100,634,780.00 1,134,989,843.29 2,261,163,068.36
.00
previous year
Add: Changes
in accounting
policies
Correction
for previous
errors
Other
Annual Report 2022
II. Balance at
the beginning of 837,075,425.32 12,653,905.25 100,634,780.00 1,134,989,843.29 2,261,163,068.36
.00
the current year
III. Increase of
the current
period ("-" -106,959.00 -2,511,505.00 -7,025,777.04 408,755,198.19 464,119,133.34
refers to
decrease)
(I) Total
comprehensive 553,559,384.19 553,559,384.19
income
(II) Owners'
contribution and
-106,959.00 -1,999,494.15 -7,025,777.04 4,919,323.89
capital
reduction
shares
-106,959.00 -1,626,846.39 -7,025,777.04 5,291,971.65
contributed by
the owners
contributions by
other equity
instrument
holders
share-based
payments -372,647.76 -372,647.76
credited to
owners' equity
(III) Profit
-144,804,186.00 -144,804,186.00
distribution
Annual Report 2022
of surplus
reserve
to owners (or -144,804,186.00 -144,804,186.00
shareholders)
(IV) Internal
carry-forward
of owners'
equity
capital reserve
to capital (or
share capital)
surplus reserve
to capital (or
share capital)
reserve to cover
loss
defined benefit
scheme carried
forward to
retained
earnings
forward of other
comprehensive
income to
Annual Report 2022
retained
earnings
(V) Special
reserve
for the period
for the period
(VI) Others 50,956,622.
-512,010.85 50,444,611.26
IV. Balance at
the end of the 834,563,920.32 5,628,128.21 100,634,780.00 1,543,745,041.48 2,725,282,201.70
.00 11
period
The chairman of the Company: HOU Juncheng CFO of the Company: WANG Li Person in charge of Accounting Department: WANG Li
Annual Report 2022
III. General Information about the Company
√ Applicable □ Not applicable
Proya Cosmetics Co., Ltd. (hereinafter referred to as "Company" or the "Company"), formerly known as
Proya (Huzhou) Cosmetics Co., Ltd., was registered in Wuxing Branch of Huzhou Municipal
Administration for Industry and Commerce on May 24, 2006. Headquartered in Hangzhou, Zhejiang, the
Company now holds the business license with the unified social credit code of 91330100789665033F.
Currently, the Company's registered capital is RMB283,513,952.00, and the paid-in capital is
RMB283,519,469.00 (the paid-in capital is RMB5,517.00 higher than the registered capital due to the
conversion of convertible bonds without industrial and commercial change registration). The total number
of shares converted is 283,519,469 (with a par value of 1.00 RMB/per share), including 2,100,000
restricted circulating A shares and 281,419,469 unrestricted circulating A shares. which were listed for
trading on SSE on November 15, 2017.
The Company is a beauty and personal care company mainly engaged in cosmetics research and
development, production, and sales. The Company's main products are cosmetics.
The financial statements were approved for external disclosure by the 11th meeting of the third session of
the Board of Directors of the Company on April 19, 2023.
√ Applicable □ Not applicable
The Company has incorporated 47 subsidiaries, including Hangzhou Proya Trade Co., Ltd., Anya (Huzhou)
Cosmetics Co., Ltd., Zhejiang Meiligu Electronic Commerce Co., Ltd., Huzhou Chuangdai E-commerce
Co., Ltd., Yueqing Laiya Trading Co., Ltd. and Hapsode (Hangzhou) Cosmetics Co., Ltd., into the
consolidated financial statements of the reporting period. For details, refer to the particulars contained in
notes "VIII. Change of Consolidation Scope" and "IX. Equity in Other Entities" in this report.
IV. Preparation Basis of Financial Statements
The financial statements of the Company are prepared based on going concern.
√ Applicable □ Not applicable
There are no matters or situations that may substantially affect the Company's ability to continue as a
going concern within 12 months since the end of the Reporting Period.
V. Significant Accounting Policies and Estimates
Notes to specific accounting policies and accounting estimates:
√ Applicable □ Not applicable
Refer to "44. Changes in Significant Accounting Policies and Estimates" in "V. Significant Accounting
Policies and Estimates" of "Section X Financial Report" for details.
The financial statements have been prepared by the Company in conformity with the China Accounting
Annual Report 2022
Standards for Business Enterprises, and present truly and completely the Company's financial position,
operating performance, changes in shareholders' equity, cash flow and other related information.
The accounting period of the Company is from January 1 to December 31 of each calendar year.
√ Applicable □ Not applicable
The operating cycle of the Company's businesses is short; the Company adopts 12 months as the liquidity
classification criteria for assets and liabilities.
The functional currency of the Company is RMB. Overseas subsidiaries including Hapsode Co., Ltd.,
Hanna Cosmetics Co., Ltd., Korea Younimi Cosmetics Co., Ltd. and O&R Co., Ltd. adopt the currency in
their major econonmic environment of operation as their function currency.
√ Applicable □ Not applicable
The assets and liabilities acquired by the Company through business combination are measured at the
carrying value of the combined party in the consolidated financial statements of the ultimate controlling
party at the combination date. The Company adjusts the capital reserve in accordance with the difference
between the carrying value share of the owners' equity of the combined party in the consolidated financial
statements of the ultimate controlling party and the carrying value of the consideration paid for the
business combination or the total nominal value of the issued shares. If the capital reserve is not sufficient
to offset the difference, the retained earnings will be adjusted.
The difference by which the cost of combination is greater than the fair value of the net identifiable assets
of the acquiree is recognized by the Company as goodwill on the acquisition date; the difference by which
the combination cost is less than the fair value share of the net identifiable assets of the acquiree is recorded
into the profit or loss after the re-check of the measurement of the fair value of identifiable assets, liabilities
or contingent liabilities acquired from the acquiree, and the combination cost.
√ Applicable □ Not applicable
statements. The consolidated financial statements are based on the financial statements of the parent
company and its subsidiaries, and prepared by the parent company in accordance with the Accounting
Standards for Business Enterprises No. 33 - Consolidated Financial Statements.
same subsidiary in two consecutive fiscal years
The acquisition of the equity of the acquiree is to control its operating and financial policies and to obtain
long-term benefits from its operating activities. After the right to control the acquiree is acquired, the
acquiree is included in the consolidation scope of the consolidated financial statements. Due to changes
Annual Report 2022
in the Company's business plans and arrangements, if the equity of the acquiree is disposed of in the second
fiscal year to the point of losing control over it, the acquiree will be excluded from the consolidation scope
of the consolidated financial statements when the control is lost.
√ Applicable □ Not applicable
related to the share of interests in the joint operation:
(1) Assets solely held, and assets jointly held on proportion;
(2) Liabilities solely undertaken, and liabilities jointly undertaken on proportion;
(3) Income generated from selling the Company's output share of the joint operation;
(4) Income of the joint operation generated from selling assets according to the Company's holding share;
(5) Cost incurred alone, and cost incurred from the joint operation on proportion;
Cash presented in the cash flow statement refers to cash on hand and deposits that can be used for payment
at any time. Cash equivalents refer to the short-term (generally the expiration is within three months from
the date of purchase) and highly liquid investments that are readily convertible to known amounts of cash
and subject to an insignificant risk of change in value.
√ Applicable □ Not applicable
Foreign currency transactions are translated into RMB at the approximate rate of spot rate on the
transaction date during initial recognition. On the balance sheet date, the foreign-currency monetary items
are calculated based on the spot rate on the same date. The exchange difference arising from the different
exchange rates is included in the current profit or loss, except the exchange difference between the
principal and interest of the foreign currency loans specially borrowed for the purchase and construction
of assets eligible for capitalization. The foreign currency non-monetary items measured at historical cost
are still translated based on the approximate rate of the spot rate on the transaction date, and the RMB
amount is not changed. The foreign currency non-monetary items measured at fair value are translated
based on the spot rate on the determination date of the fair value, and the difference is included in the
current profit or loss or other comprehensive income.
Assets and liabilities items in the balance sheet are translated at the spot rates prevailing at the balance
sheet date. Owners' equity items other than "undistributed profits" are translated at the spot rates on the
transaction dates. Income and expense items in the income statement are translated at the approximate
rates of the spot rates on the transaction dates. Any balance incurred from the translation of foreign-
currency financial statements by the above method is included in other comprehensive income.
√ Applicable □ Not applicable
Annual Report 2022
Financial assets are classified into the following three categories at initial recognition: (1) financial assets
measured at amortized cost; (2) financial assets measured at fair value through other comprehensive
income; (3) financial assets measured at fair value through profit or loss.
Financial liabilities are classified into the following four categories at initial recognition: (1) financial
liabilities measured at fair value through profit or loss; (2) financial liabilities arise when a transfer of a
financial asset does not qualify for derecognition or that are accounted for using the continuing-
involvement method; (3) loan commitments not belonging to the financial guarantee contracts mentioned
in item (1) or (2) above and those not belonging to item (1) above and given at a rate lower than market
interest rate; (4) financial liabilities measured at amortized cost.
(1) Recognition basis and initial measurement method for financial assets and liabilities
A financial asset or liability is recognized when the Company becomes a party to a financial instrument
contract. Financial assets and liabilities are measured at the fair value at initial recognition. For financial
assets and liabilities measured at fair value through profit or loss, relevant transaction expenses are directly
included in the current profit or loss; for other categories of financial assets or liabilities, relevant
transaction costs are recognized as expenses at initial recognition. However, where the accounts receivable
initially recognized by the Company do not contain a significant financing component or the Company
does not consider the financing component in the contract of less than one year, the initial measurement
is made according to the transaction price defined in the Accounting Standards for Business Enterprises
No. 14 – Revenue.
(2) Subsequent measurement of financial assets
Such financial assets are subsequently measured at amortized cost using the effective interest method. The
gains and losses incurred by the financial assets measured at amortized cost but not belonging to any
hedging relationship are included in the current profit or loss during derecognition, reclassification,
amortization according to the effective interest method or impairment recognition.
They are subsequently measured at fair value. The interest, impairment losses or gains and exchange gains
or losses calculated with the effective interest method are included in the current profit or loss, and other
gains or losses are included in other comprehensive income. At derecognition, the gains or losses
accumulated previously through comprehensive income are transferred from other comprehensive income
and included into the current profit or loss.
They are subsequently measured at fair value. The dividends obtained (except for the part from investment
cost recovery) are included in the current profit or loss, and other gains or losses are included in other
comprehensive income. At derecognition, the gains or losses accumulated previously through other
comprehensive income are transferred from other comprehensive income and included into retained
earnings.
They are subsequently measured at fair value. The generated gains or losses (including interest and
dividend income) are included in the current profit or loss, unless the financial assets belong to part of the
hedging relationship.
(3) Subsequent measurement of financial liabilities
Such financial liabilities include held-for-trading financial liabilities (including derivative instruments
belonging to financial liabilities) and those designated as financial liabilities measured at fair value through
Annual Report 2022
profit or loss. Such financial liabilities are subsequently measured at fair value. Changes in the fair value
of financial liabilities measured at fair value through profit or loss due to changes in the Company's own
credit risk are included in other comprehensive income, unless the treatment will cause or enlarge the
accounting mismatch in the profit or loss. Other gains or losses (including interest, except changes in the
fair value arising from the Company's own credit risk) are included in the current profit or loss, unless the
financial liabilities belong to part of the hedging relationship. At derecognition, the gains or losses
accumulated previously through other comprehensive income are transferred from other comprehensive
income and included into retained earnings.
continued involvement in transferred financial assets
They are measured in accordance with the Accounting Standards for Business Enterprises No. 23 -
Transfer of Financial Assets.
and those not belonging to item 1) above and given at a rate lower than market interest rate
They are subsequently measured at the higher one of the following two amounts, after initial recognition:
① loss provisions determined according to regulations on impairment of financial instruments; ②
balance of the initially recognized amount after deducting cumulative amortization recognized in
accordance with the regulations set out in the Accounting Standards for Business Enterprises No. 14 –
Revenue.
They are measured at amortized cost using the effective interest method. The gains and losses incurred by
the financial liabilities measured at amortized cost but not belonging to any hedging relationship are
included in the current profit or loss during derecognition or amortization according to the effective interest
method.
(4) Derecognition of financial assets and liabilities
① The contract right to collect cash flow from the financial assets has terminated;
② The financial assets have been transferred and such transfer satisfies the provisions for derecognition
of financial assets in the Accounting Standards for Business Enterprises No. 23 - Transfer of Financial
Assets.
liabilities (or that part thereof) are derecognized.
If the Company has transferred almost all the risks and rewards related to the ownership of financial assets,
the financial assets are derecognized, and the rights and obligations resulting from or retained in the
transfer are separately recognized as the assets or liabilities. In case that almost all the risks and rewards
related to the ownership of the financial assets are retained, the recognition of the transferred financial
assets is continued. In case that almost all the risks and rewards related to the ownership of the financial
assets are neither transferred nor retained, disposal shall apply depending on the following circumstances:
(1) if the control over the financial assets is not retained, the financial assets shall be derecognized, and
the rights and obligations resulting from or retained in the transfer are separately recognized as the assets
or liabilities; (2) if the control over the financial assets is retained, the relevant financial assets are
recognized according to the degree of continued involvement in the transferred financial assets, and the
relevant liabilities are recognized accordingly.
If the transfer of an entire financial asset satisfies the conditions for derecognition, the difference between
Annual Report 2022
the two amounts below shall be included in the current profit or loss: (1) Carrying value of the transferred
financial assets at the date of derecognition; (2) The sum of consideration received for the transfer of
financial asset, plus the corresponding derecognized portion of accumulated change in fair value
previously included in other comprehensive income (in cases where the transferred financial asset is debt
instrument investment measured at fair value with changes included in other comprehensive income). If
part of the financial assets is transferred and the transfer satisfies the conditions for derecognition, the
overall carrying value before the transfer of financial assets is apportioned according to their respective
relative fair value at the transfer date between the portion of derecognized part and the remaining part, and
the difference between the two amounts below is included in the current profit or loss: (1) carrying value
of the derecognized part; (2) the sum of consideration for the derecognized part, plus the corresponding
derecognized part of accumulated change in fair value previously included in other comprehensive income
(in cases where the transferred financial assets are debt instrument investment measured at fair value with
changes included in other comprehensive income).
The Company adopts valuation techniques appropriate to the prevailing circumstances with the support of
sufficient data and other information available, to determine the fair value of relevant financial assets and
liabilities. The Company divides the inputs for the estimation technique into the following levels and uses
them in turn:
(1) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the
Company can access at the measurement date.
(2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable, either
directly or indirectly, including: the quotation of similar assets or liabilities in an active market; the
quotation of the identical or similar assets or liabilities in an inactive market; other observable inputs other
than the quotation, such as the interest rate and yield curves that can be observed during the normal
quotation intervals; and the market validation inputs;
(3) Level 3 inputs are unobservable inputs of related assets or liabilities, including the interest rate, stock
volatility, future cash flow of retirement obligations borne during the business combination, and financial
forecasts made based on its own data, which cannot be observed directly or cannot be verified according
to observable market data.
(1) Impairment measurement and accounting treatment of financial instruments
Based on the expected credit loss, the Company carries out accounting treatment for impairment and
recognizes the loss provision for the financial assets measured at amortized cost, the debt instrument
investment measured at fair value through other comprehensive income, contract assets, lease receivables,
the loan commitment other than financial liabilities measured at fair value through profit or loss, and the
financial guarantee contracts of financial liabilities not measured at fair value through profit or loss or
financial liabilities not from failure of transfer of financial assets to meet the derecognition conditions or
continued involvement in transferred financial assets.
Expected credit loss refers to the weighted average of credit losses of financial instruments weighted by
the risk of default. Credit loss refers to the balance between all contractual cash flows discounted according
to the original effective interest rate and receivable under the contract by the Company and all cash flows
as expected, i.e. the present value of all cash shortages. The purchased or underlying financial assets of
the Company with credit impairment incurred are discounted according to their effective interest rates
upon credit adjustment.
Annual Report 2022
For the purchased or underlying financial assets with credit impairment incurred, only the accumulative
changes in the expected credit loss in the whole duration after initial recognition are recognized by the
Company as loss provisions on the balance sheet date.
For the receivables and contract assets from transactions in accordance with the Accounting Standards for
Business Enterprises No. 14 – Revenue, excluding significant financing components or without
consideration, by the Company, to the financing components in the contract of no more than one year, the
Company measures the loss provision according to the amount equal to the expected credit loss in the
whole duration by applying simplified measurement method.
For the lease receivables as well as receivables and contract assets from transactions in accordance with
the Accounting Standards for Business Enterprises No. 14 – Revenue, including significant financing
components, the Company measures the loss provision according to the amount equal to the expected
credit loss in the whole duration by applying simplified measurement method.
For financial assets other than the above measurement methods, the Company shall, on each balance sheet
date, assess whether their credit risk has increased significantly since initial recognition. If the credit risk
has increased significantly since the initial recognition, the Company will measure the loss provision based
on the amount of expected credit loss in the whole duration; if the credit risk has not significantly increased
since the initial recognition, the Company will measure the loss provision based on the amount of expected
credit loss for the financial instruments in the next 12 months.
The Company determines whether the credit risk of financial instruments has increased significantly since
initial recognition by utilizing the available, reasonable and well-grounded information, including
forward-looking information, and comparing the default risks of the financial instruments on the balance
sheet date and on the initial recognition date.
If the Company determines that the financial instruments bear a low credit risk on the balance sheet date,
it assumes that the credit risk of the financial instruments has not increased significantly since initial
recognition.
The Company evaluates the expected credit risk and measures the expected credit loss based on single
financial instrument or portfolio of financial instruments. When based on the portfolio of financial
instruments, the Company divides financial instruments into different portfolios on the basis of the
common risk characteristics.
The Company re-measures the expected credit loss on each balance sheet date, and the increased or
reversed amount of the loss provision arising therefrom, as losses or gains from impairment, shall be
included in the current profit or loss. For financial assets measured at amortized cost, the loss provision
deducts the carrying value of the financial assets listed in the balance sheet; for the debt investment
measured at fair value with changes included in other comprehensive income, the Company recognizes its
loss provision in other comprehensive income without deducting the carrying value of the financial assets.
(2) Financial instruments of which expected credit risks are assessed by portfolio and expected credit
losses are measured with a three-stage model
Basis for determining the Method for measuring the
Item
portfolio expected credit loss
Calculating the expected credit
loss by the default risk exposure
Other receivables - account age and the expected credit loss rate
Account age
portfolio in next 12 months or in the
whole duration by referring to
historical experience in credit
Annual Report 2022
loss and according to the
current situation and the
forecast on future economic
conditions.
(3) Receivables and contract assets with expected credit losses measured by portfolio with a simplified
measurement method
Basis for determining the Method for measuring the
Item
portfolio expected credit loss
Calculating the expected credit
loss by the default risk exposure
and the expected credit loss rate
in the whole duration by
Receivables financing - bank
Bill type referring to historical
acceptance note
experience in credit loss and
according to the current
situation and the forecast on
future economic conditions
Calculating the expected credit
loss by preparing the
comparison table between
account age of accounts
receivable and expected credit
Accounts receivable - account
Account age loss rate in the whole duration
age portfolio
by referring to historical
experience in credit loss and
according to the current
situation and the forecast on
future economic conditions
loss rate in the whole duration
Accounts receivable
Account age
Expected credit loss rate (%)
Within 1 year (inclusive, same for below) 5
Above 3 years 100
Financial assets and liabilities are resented in the balance sheet respectively without offsetting. However,
when the following conditions are met, the financial assets and liabilities are presented at the net amount
after mutual offset in the balance sheet: (1) the Company has the legal right of offsetting the recognized
amount and such legal right is currently executable; (2) the Company plans to settle by net amount or
simultaneously realize the financial assets and clear off the financial liabilities.
When the financial assets that do not meet the derecognition conditions are transferred, the Company does
not offset the transferred financial assets with the relevant liabilities.
Annual Report 2022
Determination and accounting treatment of the expected credit loss of notes receivable
□ Applicable √ Not applicable
Determination and accounting treatment of the expected credit loss of accounts receivable
√ Applicable □ Not applicable
Refer to "10. Financial instruments" in "V. Significant Accounting Policies and Estimates" of "Section X
Financial Report" of this report.
√ Applicable □ Not applicable
Refer to "10. Financial instruments" in "V. Significant Accounting Policies and Estimates" of "Section X
Financial Report" of this report.
Determination and accounting treatment of the expected credit loss of other receivables
√ Applicable □ Not applicable
Refer to "10. Financial instruments" in "V. Significant Accounting Policies and Estimates" of "Section X
Financial Report" of this report.
√ Applicable □ Not applicable
Inventories include finished goods or commodities for sale in daily operations, goods in process during
the production, materials consumed during production or rendering of service.
Moving weighted average method is adopted for delivered inventories.
At the balance sheet date, inventories are measured at the lower of cost and net realizable value, and
provision for devaluation of inventories is made if the cost of a single inventory is higher than its net
realizable value. The net realizable value of inventories directly for sale is determined by the amount of
the estimated selling price after subtracting the estimated sales expenses and relevant taxes during the
normal production and operation; the net realizable value of inventories required to be processed is
determined by the amount of the estimated selling price of the finished products after subtracting the
estimated cost by the end of processing, the estimated sales expenses and relevant taxes during the normal
production and operation. On the balance sheet date, the net realizable value is determined separately for
the two parts of the same inventory with or without contract price, and is compared with the relevant costs
to separately determine the amount withdrawn or reversed for inventory falling price reserve.
The Company adopts a perpetual inventory system.
Annual Report 2022
(1) Low-value consumables
Amortization is performed by the immediate write-off method.
(2) Packaging
Amortization is performed by the immediate write-off method.
(1). Recognition methods and standards of contract assets
√ Applicable □ Not applicable
The rights of the Company to collect consideration from the customer unconditionally (i.e. only depending
on time) are presented as receivables; the rights (depend on other factors than time) to collect consideration
for transferring goods to the customer are presented as contract assets.
(2). Determination and accounting treatment of the expected credit loss of contract assets
□ Applicable √ Not applicable
□ Applicable √ Not applicable
(1). Determination and accounting treatment of the expected credit loss of debt investments
□ Applicable √ Not applicable
(1). Determination and accounting treatment of the expected credit loss of other debt investments
□ Applicable √ Not applicable
(1). Determination and accounting treatment of the expected credit loss of long-term receivables
□ Applicable √ Not applicable
√ Applicable □ Not applicable
Joint control is the contractually agreed sharing of control of an arrangement. It exists only when decisions
about the relevant activities of the arrangement require the unanimous consent of the parties sharing
control. Significant influence refers to the power to participate in the decision-making process on the
financial and operating policies of the investee, but not to control or impose joint control together with
other parties over the formulation of these policies.
(1) For a long-term equity investment obtained from a business combination under common control: where
the combining party pays cash, transfers non-cash assets, bears debts or issues equity securities as
combination consideration, the initial investment cost is the share with reference to the carrying value of
Annual Report 2022
the owners' equity of the combined party in the consolidated financial statements of the ultimate
controlling party on the combination date. The difference between the initial investment cost of the long-
term equity investment and the carrying value of the consideration paid for the business combination or
the total nominal value of the issued shares is adjusted to capital reserve. If the capital reserve is not
sufficient to offset the difference, the retained earnings are adjusted.
For a long-term equity investment obtained from a business combination under common control through
multiple transactions by step, the Company judges whether the transactions are a "package deal". If yes,
the transactions are subject to accounting treatment as one deal that has acquired control right. If no, the
initial investment cost is determined on the basis of the share with reference to the carrying value of the
net asset of the combined party in the consolidated financial statements of the ultimate controlling party
on the combination date. The difference between the initial investment cost of long-term equity investment
at the combination date and the sum of the carrying amount of long-term equity investment before business
combination and the carrying value of newly paid consideration for additional shares acquired on the
combination date is adjusted to the capital reserve. If the capital reserve is not sufficient to be offset, the
retained earnings are adjusted.
(2) For a long-term equity investment obtained from a business combination not under common control,
the fair value of consideration paid for business combination is regarded as the initial investment cost on
the acquisition date.
For the long-term equity investment achieved by the Company via a business combination not under
common control through multiple transactions by step, the relevant accounting treatment is based on
individual financial statements or consolidated financial statements:
sum of the carrying value of the equity investment originally held and the newly increased investment cost.
"package deal". If yes, the transactions are subject to accounting treatment as one deal that has acquired
control right. If no, the equity of the acquiree held before the acquisition date is re-measured at the fair
value of the equity on the acquisition date, and the difference between the fair value and its carrying value
is included in the current investment income. If the equity of the acquiree held before the acquisition date
is related to other comprehensive income under the equity method, the other related comprehensive
income is converted into the current income on the acquisition date, excluding the other comprehensive
income derived from changes in net liabilities or assets due to re-measurement on defined benefit plans
by the investee.
(3) For a long-term equity investment obtained by means other than business combination: If it is obtained
by cash, the initial investment cost is the actual payment; If it is obtained through issuing equity securities,
the initial investment cost is the fair value of the issued equity securities. If it is obtained through debt
restructuring, the initial investment cost is determined based on the Accounting Standards for Business
Enterprises No. 12 - Debt Restructuring. If it is obtained through the exchange of non-monetary assets,
the initial investment cost is determined based on the Accounting Standards for Business Enterprises No.
For a long-term equity investment controlled by the investee, the cost method is adopted for accounting.
For a long-term equity investment in associates and joint ventures, the equity method is adopted for
accounting.
multiple transactions
(1) Individual financial statements
Annual Report 2022
For disposal of equity, the difference between the carrying value and the consideration actually received
is included in the current profit or loss. The accounting of remaining equity is completed by equity method
in case of significant influence on the investee or implementation of joint control with other parties.
However, in case of no control, joint control or significant influence on the investee, the accounting of
remaining equity must comply with the relevant provisions of the Accounting Standards for Business
Enterprises No.22 - Recognition and Measurement of Financial Instruments.
(2) Consolidated financial statement
belonging to a "package deal"
Before the loss of control, the difference between the price of disposal and the subsidiary's net assets
entitled from the disposal of long-term equity investment cumulatively calculated from the acquisition
date or the combination date, is adjusted to capital reserve (capital premium). If the capital premium is
insufficient to offset the difference, the retained earnings are adjusted.
When the control over the original subsidiary is lost, the remaining equity is re-measured at fair value as
at the date on which the control is lost. The difference between the sum of the consideration received from
equity disposal and the fair value of the remaining equity and the net assets of the original subsidiary
proportionate to the original shareholding accumulated from the date of acquisition or business
combination is included in investment gains of the period during which the control is lost, and meanwhile,
the goodwill is offset. Other comprehensive income related to the equity investment in the original
subsidiary is transferred to investment gains of the period during which the control is lost.
belonging to a "package deal"
All transactions are regarded as one transaction disposing the subsidiaries and losing the control right for
accounting treatment. However, the difference between the amount received each time for disposal before
the control is lost and the net assets of such subsidiary corresponding to the disposal of investment is
recognized as other comprehensive income in the consolidated financial statements, and is transferred to
profit or loss of the period during which the control is lost upon loss of control.
(1). In case of a cost measurement model:
Depreciation or amortization method
and building leased-out.
depreciated or amortized with the same method as that for fixed assets and intangible assets.
(1). Conditions for recognition
√ Applicable □ Not applicable
Fixed assets are tangible assets that are held for use in the production or rendering of goods or services,
for rental to others, or for administrative purposes, and have a service life of more than one accounting
year. The fixed assets are recognized when the following conditions are satisfied at the same time: the
economic benefits are likely to inflow to the Company. The costs of such fixed assets can be measured
reliably.
Annual Report 2022
(2). Depreciation method
√ Applicable □ Not applicable
Depreciation Depreciation life Annual
Category Residual value
method (year) depreciation rate
Houses and Straight-line
buildings method
General Straight-line
equipment method
Dedicated Straight-line
equipment method
Means of Straight-line
transportation method
(3). Recognition basis, valuation and depreciation of fixed assets under financial lease
□ Applicable √ Not applicable
√ Applicable □ Not applicable
economic benefits are likely to inflow to the Company; the costs of such construction in progress can be
measured reliably. Construction in progress is measured at the actual cost incurred to make the assets ready
for their intended use.
condition for service. When construction in progress has achieved serviceable conditions but final
settlement has not been finished yet, it is first transferred to fixed assets as per estimated value. After final
settlement is finished, the estimated value is adjusted based on actual cost, but the depreciated amount is
not adjusted.
√ Applicable □ Not applicable
Borrowing costs incurred by the Company, which are directly attributable to the purchase and construction
of assets eligible for capitalization, are capitalized and included in the costs of the related assets. Other
borrowing costs are recognized as expense in the period in which they incur and are included in the current
profit or loss.
(1) Capitalization of borrowing costs begins when the following three conditions are fully satisfied: 1)
expenditures for the assets have incurred; 2) borrowing costs have incurred; 3) acquisition and construction
or production that are necessary to enable the assets reach the intended usable or saleable conditions have
commenced.
(2) Where abnormal interruption of the assets eligible for capitalization occurs during the acquisition and
construction or production process and such interruption has lasted for more than 3 consecutive months,
the capitalization of borrowing costs is suspended; the borrowing costs during the interruption are
Annual Report 2022
recognized as current expenses till resumption of purchasing or production of the assets.
(3) Capitalization of borrowing costs is suspended during periods in which the qualifying asset under
acquisition and construction or production is ready for the intended use or sale.
In case of special borrowing for the acquisition and construction or production of assets meeting the
capitalization conditions, interest amount to be capitalized is recognized after deducting the bank interests
for the unused portion or the investment income for temporary investment from the interest costs
(including recognized depreciation or amortization of premium under effective interest method) actually
incurred in the current period of specific borrowing; for general borrowing occupied for the acquisition
and construction or production of assets meeting the capitalization conditions, the interest amount to be
capitalized shall be determined by the result obtained by multiplying the capitalization rate of occupied
general borrowing with the weighted average value of the asset expenditure for the accumulated
expenditure exceeding the specific borrowing portion.
□ Applicable √ Not applicable
□ Applicable √ Not applicable
√ Applicable □ Not applicable
Refer to "42. Lease" in "V. Significant Accounting Policies and Estimates" of "Section X Financial
Report" of this report for details.
(1). Valuation method, service life and impairment test
√ Applicable □ Not applicable
at the cost.
life in accordance with the expected realization method of the economic benefits related to the intangible
assets. If the expected realization method cannot be reliably determined, the straight-line method is used
for amortization. The specific year information is shown as below:
Item Amortization period
(year)
Land use rights 40 or 50
Unpatented technology 5
Office software 3 - 10
Patent right 5
Customer resources 3
Trademark right 10
Annual Report 2022
(2). Accounting policy regarding the expenditure on the internal research and development
√ Applicable □ Not applicable
Expenditure incurred during the research phase of the internal research and development projects is
included in the current profit or loss when actually incurred. Expenditure incurred during the development
phase is recognized as an intangible asset when all of the following conditions are satisfied simultaneously.
(1) The technical feasibility of completing the intangible asset so that it will be available for use or sale.
(2) Its intention to complete the intangible asset so that it will be available for use or sale.
(3) How the intangible asset will generate probable future economic benefits. Amongst other things, the
Company can demonstrate the existence of a market for the output of the intangible asset or the intangible
asset itself or, if it is used internally, the usefulness of the intangible asset.
(4) The availability of adequate technical, financial and other resources to complete the development and
to use or sell the intangible asset.
(5) Its ability to reliably measure the expenditure attributable to the intangible asset during its development.
√ Applicable □ Not applicable
For such long-term assets as long-term equity investment, investment real estate measured with the cost
model, fixed assets, construction in progress and intangible assets with limited service life, in case that
there are signs indicating impairment on the balance sheet date, the recoverable amount should be
estimated. Whether there is a sign of impairment or not, the goodwill acquired through the business
combination and intangible assets with indefinite service life is tested for impairment each year. The
impairment test on goodwill is carried out in combination with its related asset group or asset group
portfolio.
In case the recoverable amount of the above long-term assets is less than its carrying value, the provision
for asset impairment is recognized according to its differences and included in the current profit or loss.
√ Applicable □ Not applicable
The long-term prepaid expenses involve all expenses already paid with amortization period of more than
and are amortized by even amortization within the benefit period or prescribed amortization period. If the
long-term prepaid expenses cannot provide benefit to the future accounting period, then all of the
amortized value of the unamortized long-term prepaid expenses are transferred into the current profit or
loss.
(1). Recognition of contract liabilities
√ Applicable □ Not applicable
The Company recognizes the obligation to transfer goods to customers for the consideration received or
receivable from the customers as contract liabilities.
Annual Report 2022
(1). Accounting treatment of short-term compensation
√ Applicable □ Not applicable
During the accounting period when employees render services for the Company, the short-term
compensation actually incurred is recognized as liabilities and included in the current profit or loss or the
costs of the related assets.
(2). Accounting treatment of post-employment benefits
√ Applicable □ Not applicable
Post-employment benefits are divided into the defined contribution plan and the defined benefit plan.
(1) During the accounting period when employees render services for the Company, the amount to be
deposited as calculated according to the defined contribution plan are recognized as liabilities and included
in the current profit or loss or the costs of the related assets.
(2) The accounting treatment for the defined benefit plan generally comprises the following steps:
variables, etc. are estimated through unbiased and mutually consistent actuarial assumption, so as to
measure the obligations arising from the defined benefit plan and determine the period of relevant
obligations. In addition, the obligation generated from the defined benefit plan shall be discounted, so as
to determine the present value of defined benefit plan obligation and current service cost;
obligations of the defined benefit plan minus the fair value of the assets of defined benefit plan is
recognized as net liabilities or net assets in the defined benefit plan. When the defined benefit plan has
surplus, the net assets of the defined benefit plan are measured at the lower of the surplus of defined benefit
plan and the upper limit of the assets;
recognized as three parts, i.e., service costs, net interest of the net liabilities or net assets of the defined
benefit plan, and the changes generated by re-measurement of the net liabilities or net assets of the defined
benefit plan, in which the service costs and the net interest of the net liabilities or net assets of the defined
benefit plan are included in the current profit or loss or the costs of the related assets, and the changes
generated by re-measurement of the net liabilities or net assets of the defined benefit plan are included in
other comprehensive income, and cannot be reversed to profit or loss in the subsequent accounting period.
However, the amount recognized in other comprehensive income can be transferred within the equity
scope.
(3). Accounting treatment of termination benefits
√ Applicable □ Not applicable
If termination benefits are provided to employees, the employee compensation liabilities arising from the
termination benefits are recognized on the earlier date of the following and included in the current profit
or loss: (1) when the Company cannot unilaterally withdraw the termination benefits provided due to
termination of labor relation plan or layoff proposal; (2) when the Company recognizes the cost or
expenses related to the restructuring involving payment of termination benefits.
(4). Accounting treatment of other long-term employee benefits
√ Applicable □ Not applicable
Annual Report 2022
Other long-term employee benefits satisfying the conditions in the defined contribution plan are treated in
accounting as stipulated in the defined contribution plan; and other long-term benefits beyond those are
treated in accounting as stipulated in the defined benefit plan. In order to simplify the related accounting
treatment, the generated employee compensation cost is recognized as the service cost. The total net
amount of items including the net interest of net liabilities or assets of other long-term employee
compensation and the changes generated from re-measuring net liabilities or assets of other long-term
employee compensation is included in the current profit or loss or the costs of the related assets.
√ Applicable □ Not applicable
Refer to "42. Financial instruments" in "V. Significant Accounting Policies and Estimates" of "Section X
Financial Report" of this report for details.
√ Applicable □ Not applicable
quality assurance and onerous contract, become the current obligations assumed by the Company, which
are determined by the Company as Provisions when their performance is very likely to result in economic
benefit outflow from the Company and their amount can be measured reliably.
performing relevant current obligations and their carrying value are reviewed on the balance sheet date.
√ Applicable □ Not applicable
There are equity-settled and cash-settled share-based payments.
schedule
(1) Equity-settled share-based payments
These equity-settled share-based payments vested immediately after the grant date and exchanged for
employee services shall be included in relevant costs or expenses as per the fair value of the equity
instruments on the grant date, and the capital reserve shall be adjusted accordingly. For the equity-settled
share-based payments that are vested only after the services within the waiting period are completed or
the specified performance conditions are satisfied and that are exchanged for employee services, the
services acquired in the current period are included in relevant costs or expenses as per the fair value of
the equity instruments on the grant date based on the optimal estimate of the number of vesting equity
instruments on each balance sheet date within the waiting period, and the capital reserve is adjusted
accordingly.
The equity-settled share-based payments exchanged for services of other parties are measured as per the
fair value of the services of other parties on the date of acquiring if its reliable measurement is possible,
and as per the fair value of the equity instruments on the date of acquiring the services if the reliable
measurement of the fair value of other parties' services is impossible, but that of the equity instruments is
possible, they are included in relevant costs or expenses, and the owners' equity is increased accordingly.
(2) Cash-settled share-based payments
Annual Report 2022
These cash-settled share-based payments vested immediately after the grant date and exchanged for
employee services shall be included in relevant costs or expenses as per the fair value of the liabilities
assumed by the Company on the grant date, and the liabilities shall be increased accordingly. For these
cash-settled share-based payments that are vested only after the services within the waiting period are
completed or the specified performance conditions are satisfied and that are exchanged for employee
services, the services acquired in the current period shall be included in relevant costs or expenses and
corresponding liabilities as per the fair value of the liabilities assumed by the Company based on the
optimal estimate of the vesting conditions on each balance sheet date within the waiting period.
(3) Modifying and terminating the share-based payment schedule
If the fair value of the granted equity instruments is increased, the Company recognizes the increase of the
acquired services according to the fair value of the equity instruments. If the number of the granted equity
instruments is increased, the Company recognizes the increased fair value of the equity instruments as the
increase of the acquired services accordingly. If the Company modifies the vesting conditions in a way
favorable to employees, the Company considers the modified vesting conditions when dealing with the
vesting conditions.
If the fair value of the granted equity instruments is decreased, the Company continues to recognize the
amount of the acquired services according to the fair value of the equity instruments on the grant date,
without taking into account the decrease of the fair value of the equity instruments. If the number of the
granted equity instruments is decreased, the Company treats the decreased part as cancellation of the
granted equity instruments. If the Company modifies the vesting conditions in a way unfavorable to
employees, the Company will not consider the modified vesting conditions when dealing with the vesting
conditions.
If the Company cancels or settles the granted equity instruments within the waiting period (other than the
cancellation arising from failure to meet the vesting conditions), the cancellation or settlement is regarded
as accelerated vesting treatment to immediately recognize the amount that should be recognized within
the remaining waiting period.
√ Applicable □ Not applicable
According to the relevant standards for financial instruments and the Regulations on the Provisions on
Accounting Treatment of Perpetual Bonds (C.C. [2019] No.2), for financial instruments such as
convertible corporate bonds issued, the Company shall classify these financial instruments or their
components as financial assets, financial liabilities or equity instruments during initial recognition, based
on the contractual terms of the financial instruments issued and the economic substance they reflect, not
only in legal form, but in combination with the definitions of financial assets, financial liabilities and
equity instruments.
On the balance sheet date, for financial instruments classified as equity instruments, the accounting
treatment for interest expense or dividend distribution as the Company's profit distribution, and for
repurchase, cancellation, etc. as changes in equity is carried out; for financial instruments classified as
financial liabilities, the accounting treatment for interest expense or dividend distribution as borrowing
costs is carried out, and the gains or losses from repurchase or redemption are included in the current profit
or loss.
Annual Report 2022
(1). Accounting policy applied for revenue recognition and measurement
√ Applicable □ Not applicable
The Company shall, on the commencement date of the contract, evaluate the contract, identify the
individual performance obligations provided in the contract and determine whether to perform them within
a period or at a time point.
The performance obligations are deemed to be performed within a period if one of the following conditions
is satisfied, otherwise, at a time point: (1) The customer acquires and consumes the economic benefits
brought by the Company's performance while the Company is performing its obligations; (2) the customer
is capable to control the commodities under creation during the Company's performance; (3) the
commodities produced during the Company's performance have irreplaceable purpose and the Company
has the right to collect the amounts for the performance part already completed to date within the whole
contract term.
For the obligations performed within a period, the Company recognizes the revenue according to the
performance progress in that period. If the performance progress cannot be determined in a reasonable
way, but the incurred costs are expected to be reimbursed, the revenue shall be recognized according to
the incurred amount of costs until the performance progress can be determined in a reasonable way. For
the obligations performed at a time point, the revenue shall be recognized at the time of the customer's
acquiring the control of related commodities or services. The Company takes into account the following
when judging whether the customer has acquired the control over commodity: (1) The Company has the
current right for collection, namely the customer has the current obligation for payment with respect to the
commodity; (2) the Company has transferred the legal title of the commodity to the customer, namely the
customer has possessed the legal title of the commodity; (3) the Company has transferred the physical
commodity to the customer, namely the customer has physical possession of the commodity; (4) the
Company has transferred the main risks and return on the commodity's title to the customer, namely the
customer has acquired the same; (5) the customer has accepted the commodity; and (6) there are other
signs indicating that the customer has acquired the control over the commodity.
(1) The Company measures the revenue according to the transaction price apportioned to the individual
performance obligations. Transaction price refers to the consideration amount of which the Company is
expected to have right for collection due to transfer of commodities or services to the customer, excluding
the amounts charged on behalf of the third party and expected to refund to the customer.
(2) In case of a variable consideration in the contract, the Company determines the optimal estimate of the
variable consideration according to the expected value or the amount most likely to incur, while the
transaction price including the variable consideration cannot exceed the amount under the circumstance
where the accumulatively recognized revenue will be highly unlikely to suffer major reversal when
relevant uncertainties are eliminated.
(3) In case of a major financing composition in the contract, the Company determines the transaction price
according to the payable amount assumed to be paid by the customer in cash immediately after it acquires
the control over the commodities or services. The difference between the transaction price and the contract
consideration is amortized with the effective interest method within the contract term. If the Company
expects, on the commencement date of the contract, that the interval between the customer's acquisition
of the control of the commodities or services and its payment is not more than one year, the major financing
composition in the contract shall not be taken into account.
Annual Report 2022
(4) In case of two or more performance obligations in the contract, the Company apportions the transaction
price to the individual performance obligations according to the relative proportion of the individual sales
price of the commodities undertaken as per the individual performance obligations on the commencement
date of the contract.
(2). Difference in accounting policies for revenue recognition resulting from different business
models for similar businesses
√ Applicable □ Not applicable
The Company mainly sells cosmetics. It has different sales models classified as distribution, direct selling
and sales on commission.
(1) Distribution
The sales revenue is recognized after the Company delivers the products to the buyer according to the
provisions of the contract and the buyer accepts the same.
(2) Direct selling
The sales revenue is recognized after the Company delivers the commodities to the consumer and the
consumer confirms receipt and makes payment.
(3) Sales on commission
The sales revenue is recognized after the Company delivers the products to the commissioned party
according to the provisions of the contract and the commissioned party provides the list of sales on
commission to the Company upon selling the products to others.
√ Applicable □ Not applicable
The assets associated with the contract cost include the contract acquisition cost and the contract
performance cost.
The incremental cost incurred by the Company for acquiring the contract that is expected to be recoverable,
as the contract acquisition cost, is recognized as an asset. If the amortization period of the contract
acquisition cost is no more than one year, it cost is directly included in the current profit or loss when it is
incurred.
The cost incurred by the Company for performing the contract that falls out of the standard scope of
relevant criteria for inventories, fixed assets or intangible assets and that satisfies the following conditions,
as the contract performance cost, is recognized as an asset:
direct materials and manufacturing expenses (or similar), costs expressly borne by the customer and other
costs incurred solely in connection with the contract;
The Company amortizes the assets related to the contract cost on the same basis as for recognizing the
revenue of the commodities or services in connection with the assets and record the same in the current
profit or loss.
If the carrying value of the assets related to the contract cost is more than the surplus consideration
expected to be acquired for transferring the commodities or services in connection with the assets minus
the cost expected to incur, the Company makes the impairment provision against the exceeding part and
recognizes it as the asset impairment loss. If any changes in the factors for impairment in previous periods
make the surplus consideration expected to be acquired for transferring the commodities or services in
Annual Report 2022
connection with the assets minus the cost expected to incur higher than the carrying value of the assets,
the impairment provisions of assets made originally will be reversed and included in the current profit or
loss, provided that the reversed carrying value of the assets is no more than that on the reversal date without
making the Impairment Provision.
√ Applicable □ Not applicable
Company is able to meet the conditions attached to the Government subsidies; (2) the Company is able to
receive the government subsidies. In case of government subsidies as monetary assets, they are measured
at the amount received or receivable. In case of government subsidies as non-monetary assets, they are
measured at the fair value; in case that the fair value cannot be acquired in a reliable way, they are measured
at the nominal amount.
Government subsidies that are used for purchasing and constructing or otherwise forming long-term assets
as specified in government documents are classified as government subsidies related to assets. In case of
no provision in government documents, the government subsidies are determined on the basis of the
essential condition required for obtaining the Subsidies, and considered as related to assets if the essential
condition is purchasing and constructing or otherwise forming long-term assets. Government subsidies
related to assets offset the carrying value of relevant assets or are recognized as deferred income. If the
government subsidies related to assets are recognized as deferred income, they are included in the profit
and loss in a reasonable and systematic way within the service life of relevant assets. Government
subsidies measured at nominal amount are directly included in the current profit or loss. If related assets
are sold, transferred, scrapped or damaged before the end of their service life, related deferred income
balance unallocated is transferred into the profit and loss in the current period of assets disposal.
Government subsidies other than those related to assets are classified as government subsidies related to
income. If it is difficult to distinguish whether the government subsidies containing both the part related
to assets and the part related to income are related to assets or income, the government subsidies are
entirely classified as government subsidies related to income. Government subsidies related to income that
are used for compensation for relevant costs or losses in subsequent periods are recognized as deferred
income, and included in the current profit or loss or offset relevant costs in the period in which relevant
costs or losses are recognized; those used for compensation for relevant costs or losses that have incurred
are directly included in the current profit or loss or offset relevant costs.
or offset relevant costs according to the nature of the economic business. Government subsidies unrelated
to the daily business activities of the Company are included in non-operating revenue or expenses.
√ Applicable □ Not applicable
tax basis of the items not recognized as assets or liabilities can be determined according to the provisions
of the tax law, the difference between that tax basis and their physical count quantity), the deferred income
tax assets or liabilities are calculated and recognized according to the tax rate applicable in the period
where it is expected to recover the assets or liquidate the liabilities.
Annual Report 2022
to deduct the deductible temporary differences. If on the balance sheet date, there is conclusive evidence
proving that it is very likely to obtain sufficient taxable income in future periods to deduct the deductible
temporary differences, the deferred income tax assets not recognized yet in previous accounting periods
is recognized.
very likely to not obtain sufficient taxable income in future periods to deduct their benefits, the carrying
value of the deferred income tax assets is written down. When it is very likely to obtain sufficient taxable
income, the amount written down is reversed.
loss as the income tax expense or income, except for the income tax arising from the following
circumstances: (1) business combination; (2) transaction or matters recognized directly in the owners'
equity.
(1). Accounting treatment of operating lease
□ Applicable √ Not applicable
(2). Accounting treatment of financing lease
□ Applicable √ Not applicable
(3). Determination and accounting treatment of lease under new lease standards
√ Applicable □ Not applicable
On the start date of the lease term, the Company recognizes leases with a lease term not exceeding 12
months and no purchase option as short-term leases; leases with low value when individual leased assets
are brand-new assets are recognized as leases of low-value assets. If the Company subleases or is expected
to sublease the leased assets, the original lease is not recognized as a lease of low-value assets.
For all short-term leases and leases of low-value assets, the Company records the lease payments in the
cost of related assets or the current profit or loss by straight-line method over each period of the lease term.
Except for the above-mentioned short-term leases and leases of low-value assets that adopt simplified
treatment, the Company recognizes leases as right-of-use assets and lease liabilities, on the start date of
the lease term.
(1) Right-of-use assets
Right-of-use assets are initially measured at cost which includes: 1) the initial measurement amount of
lease liabilities; 2) the lease payments made on or before the start date of the lease term, deducting the
amounts related to the lease incentive given if there is the lease incentive; 3) the initial direct costs incurred
by the lessee; 4) the estimated costs to be incurred by the lessee to dismantle and remove leased assets,
restore the site where the leased assets locate, or restore the leased assets to the condition agreed upon in
the lease terms.
The Company depreciates right-of-use assets with the straight-line method. If it can be reasonably
determined that the ownership of the leased assets will be acquired at the expiration of the lease term, the
Company accrues depreciation over the remaining service life of the leased assets. If it cannot be
reasonably determined that the ownership of the leased assets can be acquired at the expiration of the lease
Annual Report 2022
term, the Company accrues depreciation over the lease term or the remaining service life of the leased
assets, whichever shorter.
(2) Lease liabilities
On the start date of the lease term, the Company recognizes the present value of the outstanding lease
payments as lease liabilities. When calculating the present value of lease payments, the interest rate
implicit in the lease is used as the discount rate. If the interest rate implicit in the lease cannot be
determined, the Company's incremental borrowing rate is used as the discount rate. The difference between
the lease payment and its present value is regarded as the unrecognized financing expense, and the interest
expense is recognized in each period of the lease term according to the discount rate of the present value
of the recognized lease payment, and is included in the current profit or loss. Variable lease payments that
are not included in the measurement of lease liabilities are included in the current profit or loss when
actually incurred.
After the start date of the lease term, when there is a change in the actual amount of fixed payment, a
change in the estimated payable amount of the guaranteed residual value, a change in the index or ratio
used to determine the lease payment amount, or a change in the evaluation result or actual exercise of the
purchase option, renewal option or termination option, the Company re-measures the lease liabilities
according to the present value of the changed lease payments, and adjusts the carrying value of the right-
of-use assets accordingly. If the carrying value of the right-of-use assets has been reduced to zero, but the
lease liabilities still need to be further reduced, the remaining amount shall be included in the current profit
or loss.
On the start date of the lease term, the Company classifies the leases that have almost all the risks and
rewards related to the ownership of the leased assets substantially transferred as financial leases, and other
leases as operating leases.
(1) Operating lease
During each period of the lease term, the Company recognizes the lease receipts as rental income by
straight-line method, capitalizes the initial direct expenses incurred and amortizes the expenses on the
same basis as for rental income recognition, to be included in the current profit or loss in installments. The
variable lease payments obtained by the Company related to operating leases but not included in the lease
receipts are included in the current profit or loss when actually incurred.
(2) Financial lease
On the start date of the lease term, the Company recognizes the financial lease receivables based on the
net lease investment (the sum of the unguaranteed residual value and the present value of the lease receipts
that have not been received on the start date of the lease term discounted at the interest rate implicit in
lease), and derecognizes financial lease assets. During each period of the lease term, the Company
calculates and recognizes interest income based on the interest rate implicit in the lease.
The variable lease payments obtained by the Company that are not included in the measurement of net
lease investment are included in the current profit or loss when actually incurred.
□ Applicable √ Not applicable
(1). Changes in significant accounting policies
√ Applicable □ Not applicable
Annual Report 2022
Contents and reasons of Remarks (name and amount of
Review and approval procedure
changes in accounting policies report items affected materially)
None
Other explanations
The Company has implemented the provisions on "Accounting Treatment of Enterprises on External Sale
of Fixed Assets before Reaching the Intended Usable State or Products or By-products Produced during
the Research and Development Process" in the Interpretation No. 15 of the Accounting Standards for
Business Enterprises issued by the Ministry of Finance since January 1, 2022. This accounting policy
change has no impact on the Company's financial statements.
The Company has implemented the provisions on "Judgment on Loss Contract" in the Interpretation No.
From 2022, the Company has adopted in advance the provisions of "Accounting Standards for Business
Enterprises Interpretation No. 16" issued by the Ministry of Finance, which states that the accounting
treatment for deferred income tax related to assets and liabilities arising from individual transactions is
not applicable to the exemption from initial recognition. This accounting policy change has no impact on
the Company's financial statements.
The Company has implemented the provisions on "Accounting Treatment of Income Tax Effects on
Dividends Related to Financial Instruments Classified as Equity Instruments by the Issuer" in the
Interpretation No. 16 of the Accounting Standards for Business Enterprises issued by the Ministry of
Finance since November 30, 2022. This accounting policy change has no impact on the Company's
financial statements.
The Company has implemented the provisions on "Accounting Treatment for Enterprises Changing Cash-
settled Share-based Payments to Equity-settled Share-based Payments" in the Interpretation No. 16 of the
Accounting Standards for Business Enterprises issued by the Ministry of Finance since November 30,
(2). Changes in significant accounting estimates
□ Applicable √ Not applicable
(3). The first adoption of new accounting standards or standard interpretations since 2022 involves
adjusting the financial statements at the beginning of the year of the first adoption
□ Applicable √ Not applicable
□ Applicable √ Not applicable
VI. Taxes
Particulars on major tax types and tax rates
√ Applicable □ Not applicable
Tax type Taxing basis Tax rate
Value added tax ("VAT") The output tax is calculated on the 13%, 9%, 6%, 1%
Annual Report 2022
basis of the income from sales of
products and taxable income from
rendering of services calculated
according to the provisions of the
tax law. The difference between
the output tax and the amount
after deducting the input tax
which is allowed to be deductible
in the current period is the payable
VAT.
Consumption tax Taxable sales (volume) 15%
In case of ad valorem taxation, it
is calculated and paid as per 1.2%
of the remaining value after 30%
of the original value of the
Property tax 12%, 1.2%
property is deducted in a lump
sum; in case of taxation according
to lease, it is calculated and paid
as per 12% of the rental income.
Urban maintenance and
Actual turnover tax paid 7%, 5%
construction tax
Education surcharge Actual turnover tax paid 3%
Surcharge for local education Actual turnover tax paid 2%
Enterprise income tax Taxable income [Note]
[Note]: Descriptions on tax payers with different enterprise income tax rates
If there are taxpayers with different enterprise income tax rates, the disclosure will be made for description
√ Applicable □ Not applicable
Name of taxpayer Income tax rate (%)
The Company 15
Huzhou Niuke Technology Co., Ltd. 20
Xuzhou Laibo Information Technology Co., Ltd. 20
Relevant taxes are calculated and paid according
Korea Younimi Cosmetics Co., Ltd.
to local tax regulations in South Korea
Relevant taxes are calculated and paid according
Hanna Cosmetics Co., Ltd.
to local tax regulations in South Korea
Relevant taxes are calculated and paid according
Hapsode Co., Ltd.
to local tax regulations in South Korea
Relevant taxes are calculated and paid according
HongKong Keshi Trading Limited
to local tax regulations in Hong Kong, China
Relevant taxes are calculated and paid according
Hongkong Xinghuo Industry Limited
to local tax regulations in Hong Kong, China
Hong Kong Wanyan Electronic Commerce Co., Relevant taxes are calculated and paid according
Limited to local tax regulations in Hong Kong, China
Hong Kong Zhongwen Electronic Commerce Co., Relevant taxes are calculated and paid according
Limited to local tax regulations in Hong Kong, China
Annual Report 2022
Relevant taxes are calculated and paid according
Hongkong Xuchen Trading Limited
to local tax regulations in Hong Kong, China
BOYA (Hong Kong) Investment Management Co., Relevant taxes are calculated and paid according
Limited to local tax regulations in Hong Kong, China
Relevant taxes are calculated and paid according
Proya Europe SARL
to local tax regulations in Luxembourg
Relevant taxes are calculated and paid according
O&R Co., Ltd.
to local tax regulations in Japan
Tax payers other than the above 25
√ Applicable □ Not applicable
The Company was reviewed as the high-tech enterprise on December 1, 2020 and obtained the high-tech
enterprise certificate, with the validity of certification of 3 years and the grace period for enterprise income
tax during 2020 - 2022. The Company was subject to the enterprise income tax at the preferential rate of
According to the Notice of the Ministry of Finance and the State Taxation Administration on the
Implementation of Inclusive Tax Relief Policy for Small and Micro Enterprises (CS [2019] No.13), the
Announcement of the State Taxation Administration on Relevant Issues on the Implementation of Inclusive
Tax Relief Policy for Small and Micro Enterprises (Announcement No.2 of the State Taxation
Administration in 2019), and Announcement of the Ministry of Finance and the State Taxation
Administration on the Implementation of Preferential Income Tax Policies for Small and Micro
Enterprises and Individual Industrial and Commercial Households (CS [2021] No.12), and the
Announcement on the Implementation of Preferential Income Tax Policies for Small and Micro
Enterprises (SAT 2022 No.13 Decree of the Ministry of Finance), Huzhou Niuke Technology Co., Ltd.
and Xuzhou Laibo Information Technology Co., Ltd. comply with the criteria for tax payment of small
and micro enterprises, and would calculate taxable income as per a reduced tax rate of 12.5% for the
taxable income not greater than RMB1 million and pay the enterprise income tax as per the tax rate of
taxable income as per a reduced tax rate of 25% and pay the enterprise income tax as per the tax rate of
In accordance with the provisions of the Announcement on Relevant Policies for Deepening the Value-
Added Tax Reform jointly issued by the Ministry of Finance, the State Taxation Administration and the
General Administration of Customs (Announcement No.39 of the Ministry of Finance, the State Taxation
Administration and the General Administration of Customs in 2019), Hangzhou Proya Commercial
Management Co., Ltd., a subsidiary of the Company, complies with the conditions for general tax payers
engaged in consumer-oriented service industries, and the input tax deductible in the current period plus
□ Applicable √ Not applicable
Annual Report 2022
VII. Notes to the Items in Consolidated Financial Statements
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Ending balance Opening balance
Cash on hand 20,176.08 22,348.23
Cash at bank 3,078,501,723.18 2,339,040,989.92
Other monetary capital 82,481,185.79 51,984,911.66
Total 3,161,003,085.05 2,391,048,249.81
Of which: Total cash
deposited outside China
Other explanations
At the end of the period, bank deposits subject to restricted use included the fixed-term deposit of
RMB30,000,000.00, the transformer fixed deposit of RMB250,000.00, the ETC vehicle deposit of
RMB70,000.00, the Pingduoduo deposit of RMB5,000,000.00, and the Tmall and Alipay deposits of
RMB350,000.00.
At the beginning of the period, bank deposits subject to restricted use included the transformer fixed
deposit of RMB293,481.72, and the L/C deposit of RMB7,000,000.00, ETC vehicle deposit of
RMB70,000.00, Pingduoduo deposit of RMB5,000,000.00, and the Tmall and Alipay deposits of
RMB350,000.00 in other monetary capital.
□ Applicable √ Not applicable
□ Applicable √ Not applicable
(1). Presentation of notes receivable by category
□ Applicable √ Not applicable
(2). Notes receivable pledged by the Company at the end of the period
□ Applicable √ Not applicable
(3). Notes receivable endorsed or discounted by the Company at the end of the period and not yet
due on the balance sheet date
□ Applicable √ Not applicable
(4). Notes that have been transferred to accounts receivable by the Company at the end of the
period due to the non-performance of the contract of the drawer
□ Applicable √ Not applicable
(5). Disclosed by the classification of bad debt accrual method
□ Applicable √ Not applicable
Provision for bad debts accrued individually:
□ Applicable √ Not applicable
Annual Report 2022
Provision for bad debts accrued by portfolio:
□ Applicable √ Not applicable
If the bad debt provision is accrued according to the general model of expected credit loss, refer to the
disclosure of other receivables:
□ Applicable √ Not applicable
(6). Information of bad-debt provision
□ Applicable √ Not applicable
(7). Notes receivable actually written off in the current period
□ Applicable √ Not applicable
Other explanations
□ Applicable √ Not applicable
(1). Disclosed by account age
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Account age Book balance at the end of the period
Within 1 year
Including: Sub-items within 1 year
Within 1 year 102,578,046.19
Sub-total within 1 year 102,578,046.19
Above 3 years 14,301,950.43
Above 5 years
Total 125,860,470.98
(2). Disclosed by the classification of bad debt accrual method
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Ending balance Opening balance
Provision for bad Provision for bad
Carrying amount Carrying amount
debts debts
Category Book Book
Accrual
Percentage Accrual value Percentage value
Amount Amount Amount Amount ratio
(%) ratio (%) (%)
(%)
Annual Report 2022
Provision for
bad debts 13,574,9 13,574, 14,489,5 14,489,
accrued 73.09 973.09 12.75 512.75
individually
Including:
Provision for
bad debts 112,285, 10,127, 102,157 148,581, 9,954,7 138,626,62
accrued by 497.89 599.48 ,898.41 371.95 44.05 7.90
portfolio
Including:
Account age 112,285, 10,127, 102,157 148,581, 9,954,7 138,626,62
portfolio 497.89 599.48 ,898.41 371.95 44.05 7.90
Total 470.98 / 572.57 / ,898.41 884.70 / 256.80 / 7.90
Provision for bad debts accrued individually:
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Ending balance
Name Provision for Accrual ratio
Carrying amount Reason for accrual
bad debts (%)
Provision for bad
Expected to be
debts accrued 13,574,973.09 13,574,973.09 100.00
uncollectible
individually
Total 13,574,973.09 13,574,973.09 100.00 /
Explanation of bad debt provision by item:
□ Applicable √ Not applicable
Provision for bad debts accrued by portfolio:
√ Applicable □ Not applicable
By portfolio: account age portfolio
Unit: Yuan Currency: RMB
Ending balance
Name
Accounts receivable Provision for bad debts Accrual ratio (%)
Account age portfolio 112,285,497.89 10,127,599.48 9.02
Total 112,285,497.89 10,127,599.48 9.02
Determination and explanation of bad debts accrued by portfolio
√ Applicable □ Not applicable
Account age Ending amount
Carrying amount Provision for bad debts Accrual ratio (%)
Within 1 year 102,403,884.74 5,120,194.23 5.00
Above 3 years 1,663,355.71 1,663,355.71 100.00
Annual Report 2022
Subtotal 112,285,497.89 10,127,599.48 9.02
If the bad debt provision is accrued according to the general model of expected credit loss, refer to the
disclosure of other receivables:
□ Applicable √ Not applicable
(3). Information of bad-debt provision
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Changes in amount for the current period
Opening Charge- Ending
Category Withdrawal Other
balance Accrual off or balance
or write-back changes
write-off
Provision for
bad debts
accrued
individually
Provision for
bad debts
accrued by
portfolio
Total 24,444,256.80 599,061.77 1,340,370.76 375.24 23,702,572.57
Among them, significant amount of bad-debt provision withdrawn or written back in the current period:
□ Applicable √ Not applicable
(4). Accounts receivable actually written off in the current period
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Written off amount
Accounts receivable actually written off 375.24
Among them, information of accounts receivable significantly written off
□ Applicable √ Not applicable
Explanation on the write-off of the account receivable:
□ Applicable √ Not applicable
(5). Accounts receivable of the top five ending balances collected by debtor
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Annual Report 2022
Proportion of total
Ending balance
balance of accounts
Company name Ending balance of bad debt
receivable at the end
provision
of the period (%)
Beijing JD Century Trading Co.,
Ltd.
Vipshop (China) Co., Ltd. 26,051,305.59 20.70 1,302,565.28
Shanghai Zimei Investment
Management Co., Ltd.
Hangzhou Yongyi Network
Technology Co., Ltd.
Zhejiang Haochao Network
Technology Co., Ltd.
Total 85,649,678.88 68.05 8,706,213.95
Other explanations
None
(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 explanations:
□ Applicable √ Not applicable
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Ending balance Opening balance
Bank acceptance bills 3,242,000.00
Total 3,242,000.00
Changes in the current period of receivables financing and changes in fair value:
□ Applicable √ Not applicable
If the bad debt provision is accrued according to the general model of expected credit loss, refer to the
disclosure of other receivables:
□ Applicable √ Not applicable
Other explanations:
√ Applicable □ Not applicable
Annual Report 2022
Notes receivable endorsed or discounted by the Company at the end of the period and not yet due on the
balance sheet date
Recognized amount terminated at the end of the
Item
period
Bank acceptance bills 7,545,731.88
Subtotal 7,545,731.88
It is unlikely that a bank acceptance note will be overdue, as the acceptor of bank acceptance note is a
high-credit commercial bank. Therefore, the Company has derecognized endorsed or discounted bank
acceptance notes. If any of such bills is overdue, the Company will be still jointly and severally liable to
the holder according to the Negotiable Instruments Law.
(1). Prepayments are listed by age
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Ending balance Opening balance
Account age
Amount Percentage (%) Amount Percentage (%)
Within 1 year 88,898,806.55 97.18 57,284,969.16 98.08
Above 3 years 59,368.00 0.06
Total 91,483,523.15 100.00 58,406,647.11 100.00
Explanation of reasons why prepayments with more than 1 year's age and significant amount are not settled
in time:
At the end of the period, there were no important unsettled prepayments with an account age of more than
(2). Prepayments of the top five ending balances collected by prepaid objects
√ Applicable □ Not applicable
Ratio of total ending
Company name Ending balance
balance of prepayment (%)
Hangzhou Alimama Software Service
Co., Ltd.[Note 1]
Wuhan Juliang Xingtu Technology
Co., Ltd.[Note 2]
Shanghai Xunmeng Information
Technology Co., Ltd.
Guangxi Jingdong Xinjie E-commerce
Co., Ltd.
Shanghai Zhuiji Information
Technology Co., Ltd.
Total 60,979,541.22 66.67
Other explanations
Annual Report 2022
[Note 1] The payment to Hangzhou Alimama Software Service Co., Ltd. refers to the consolidated amount
to Hangzhou Alimama Software Service Co., Ltd., Zhejiang Alibaba Communication Technology Co.,
Ltd., and other companies that are under the same control.
[Note 2] The payment to Wuhan Juliang Xingtu Technology Co., Ltd. refers to the consolidated amount
to Hubei Juliang Yinqing Technology Co., Ltd., Wuhan Juliang Xingtu Technology Co., Ltd., and other
companies that are under the same control.
Other explanations
□ Applicable √ Not applicable
Presentation by item
□ Applicable √ Not applicable
Other explanations:
□ 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 explanations:
□ Applicable √ Not applicable
Dividends receivable
(4). Dividends receivable
□ Applicable √ Not applicable
(5). Important dividends receivable with an account age of more than 1 year
□ Applicable √ Not applicable
(6). Provision for bad debts
□ Applicable √ Not applicable
Other explanations:
□ Applicable √ Not applicable
Other receivables
(1).Disclosed by account age
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Account age Book balance at the end of the period
Annual Report 2022
Within 1 year
Including: Sub-items within 1 year
Within 1 year 65,862,919.09
Sub-total within 1 year 65,862,919.09
Above 3 years 6,470,493.57
Above 5 years
Total 114,161,050.06
[Note] The ending balance with an account age of 2-3 years is greater than the opening balance with an
account age of 1-2 years, which is due to changes in foreign currency exchange rates
(2).Classification by nature of payment
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Book balance at the end of the
Nature of payment Opening book balance
period
Security deposits 22,781,728.37 24,126,373.18
Suspense payment receivables 90,500,345.08 74,931,769.08
Reserve fund 552,985.89 624,289.31
Other 325,990.72 1,336,042.57
Total 114,161,050.06 101,018,474.14
(3).Provision for bad debts
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
First stage Second stage Third stage
Expected credit loss Expected credit loss
Expected
Provision for bad for the entire for the entire
credit losses Total
debts duration (credit duration (credit
over the next
impairment not impairment has
occurred) occurred)
Balance as at
January 1, 2022
The balance as of
January 1, 2022 is
in the current
period
- Transferred to
-738,418.35 738,418.35
the second stage
- Transferred to
-393,872.19 393,872.19
the third stage
Annual Report 2022
- Returned to the
second stage
- Returned to the
first stage
Accrual in the
current period
Amount written
back in the current -1,441,980.00 -1,441,980.00
period
Current write off
Current recovery
Amount written
off in the current -176,534.32 -176,534.32
period
Other changes
Balance as at
December 31, 3,293,145.99 4,430,510.11 32,873,310.33 40,596,966.43
Explanation of significant changes in book balance of other receivables with changes in provision for loss
in the current period:
□ Applicable √ Not applicable
The amount of bad debt provision in the current period and the basis for evaluating whether the credit risk
of financial instruments increases significantly:
□ Applicable √ Not applicable
(4).Information of bad-debt provision
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Changes in amount for the current period
Opening
Category Withdrawal or Charge-off Other Ending balance
balance Accrual
write-back or write-off changes
Provision
for bad debts 26,987,367.
accrued 33
individually
Provision
for bad debts 7,987,399.0
accrued by 0
portfolio
Total 34,974,766.
Among them, significant amount of bad-debt provision written back or withdrawn in the current period:
Annual Report 2022
□ Applicable √ Not applicable
(5).Other receivables actually written off in the current period
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Written off amount
Other accounts receivable actually written off 176,534.32
Wherein, write-off of other important receivables:
□ Applicable √ Not applicable
Explanation on write-off of other receivables:
□ Applicable √ Not applicable
(6).Other receivables of the top five ending balances collected by debtor
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
As a
proportion
of total Provision for
Company Ending Account ending bad debts
Nature of payment
name balance age balance in Ending
other balance
receivables
(%)
Zhejiang Tmall Suspense payment
Technology receivables/Security 35,327,628.48 [Note 1] 30.95 1,813,881.42
Co., Ltd. deposits
Beijing Space
Suspense payment
Transformation
receivables/Security 25,525,791.01 [Note 2] 22.36 1,281,414.55
Technology
deposits
Co., Ltd.
EURL Suspense payment
PHARMATICA receivables
Wuxing District
Daixi Town
People's Security deposits 13,493,392.00 11.82 4,048,017.60
years
Government of
Huzhou City
SIKEROM
Suspense payment 2-3
EURPOE 7,588,727.59 6.65 7,588,727.59
receivables years
GMBH
Total / 100,168,174.60 / 87.75 32,964,676.68
[Note 1] RMB35,277,628.48 with the account age within 1 year, and RMB50,000.00 with the account age
of above 3 years
[Note 2] RMB25,505,291.01 with the account age within 1 year, and RMB20,500.00 with the account
age of 1-2 years
Annual Report 2022
[Note 3] RMB6,308,815.77 with the account age of 1 to 2 years, RMB11,923,819.75 with an account age
of 2 to 3 years
(7).Receivables involving government subsidies
□ Applicable √ Not applicable
(8).Other receivables derecognized due to transfer of financial assets
□ Applicable √ Not applicable
(9).Amount of assets or liabilities formed by transfer of other receivables and continued involvement
□ Applicable √ Not applicable
Other explanations:
□ Applicable √ Not applicable
(1). Classification of inventories
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Ending balance Opening balance
Provision for Provision for
devaluation of devaluation of
Item Carrying Carrying
inventories/Impairment Book value inventories/Impairment Book value
amount amount
provision of contract provision of contract
performance cost performance cost
Raw
materials
Packaging 42,300,426.18 1,016,137.11 41,284,289.07 37,042,703.68 650,080.09 36,392,623.59
Goods in
process
Outsourcing
gifts
Inventory
commodities
Low value
consumables
Total 710,132,072.82 41,080,746.09 669,051,326.73 475,368,695.79 27,429,937.50 447,938,758.29
(2). Provision for devaluation of inventories and impairment provision of contract performance
cost
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Opening Decreased amount in the current
Item Current increase Ending balance
balance period
Annual Report 2022
Write-back or
Accrual Other Other
charge-off
Raw
materials
Packaging 650,080.09 8,376,906.03 8,010,849.01 1,016,137.11
Goods in
process
Outsourcing
gifts
Inventory
commoditie 25,067,162.01 82,441,537.99 69,728,101.53 37,780,598.48
s
Low value
consumable 300,823.91 147,546.34 67,750.37 380,619.88
s
Total 27,429,937.50 94,640,937.84 80,990,129.24 41,080,746.09
(3). Description of capitalized amount of borrowing expenses included in ending balance of
inventories
□ Applicable √ Not applicable
(4). Description of current amortization amount of contract performance cost
□ Applicable √ Not applicable
Other explanations
□ Applicable √ Not applicable
(1). Description of contract assets
□ Applicable √ Not applicable
(2). Amount of and reasons for significant changes in carrying amount during the Reporting Period
□ Applicable √ Not applicable
(3). Impairment provision of contract assets accrued in the current period
□ Applicable √ Not applicable
If the bad debt provision is accrued according to the general model of expected credit loss, refer to the
disclosure of other receivables:
□ Applicable √ Not applicable
Other explanations:
□ Applicable √ Not applicable
□ Applicable √ Not applicable
Annual Report 2022
□ Applicable √ Not applicable
Significant debt investments and other debt investments at the end of the period:
□ Applicable √ Not applicable
Other explanations
None
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Ending balance Opening balance
Contract acquisition cost
Return cost receivable 8,782,156.33 3,425,429.44
Advance payment of taxes 4,009,626.89 11,095,721.02
Input VAT to be deducted 36,944,213.35 39,013,811.93
Total 49,735,996.57 53,534,962.39
Other explanations
None
(1). Description of debt investment
□ Applicable √ Not applicable
(2). Significant debt investments at the end of the period
□ Applicable √ Not applicable
(3). Accrual of impairment provisions
□ Applicable √ Not applicable
Amount of impairment provision accrued in the current period and the basis for evaluating whether the
credit risk of financial instruments increases significantly
□ Applicable √ Not applicable
Other explanations
□ Applicable √ Not applicable
(1). Description of other debt investments
□ Applicable √ Not applicable
(2). Other significant debt investments at the end of the period
□ Applicable √ Not applicable
(3). Accrual of impairment provisions
□ Applicable √ Not applicable
Annual Report 2022
Amount of impairment provision accrued in the current period and the basis for evaluating whether the
credit risk of financial instruments increases significantly
□ Applicable √ Not applicable
Other explanations:
□ Applicable √ Not applicable
(1). Description of long-term receivables
□ Applicable √ Not applicable
(2). Provision for bad debts
□ Applicable √ Not applicable
Amount of provision for bad debts accrued in the current period and the basis for evaluating whether the
credit risk of financial instruments increases significantly
□ Applicable √ Not applicable
(3). Long-term receivables derecognized due to transfer of financial assets
□ Applicable √ Not applicable
(4). Amount of assets and liabilities formed by transfer of long-term receivables and continued
involvement
□ Applicable √ Not applicable
Other explanations
□ Applicable √ Not applicable
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Current changes
Recognized Declared
Other Other Ending balance
Opening investment payment Ending
Invested entity Additional Investment comprehensive changes Impairment of impairment
balance gain and loss of cash Other balance
investment decrease income in provision provisions
under equity dividends
adjustments equity
method or profits
I. Joint Venture
Huzhou Panrui
Industry
Investment 3,074,75 3,068,948.1
-5,810.52
Partnership 8.68 6
(Limited
Partnership)
Subtotal 3,074,75 3,068,948.1
-5,810.52
II. Affiliate
Xiongke Culture
Media (Hangzhou) -139,840.96
Co., Ltd.
Jiaxing Woyong 72,681,7 41,003,609 - 111,253,221
Investment 33.38 .10 2,432,120.55 .93
Annual Report 2022
Partnership
(Limited
Partnership)
Zhuhai Healthlong
Biotechnology Co., 81,442,213.22
Ltd.
Beijing Xiushi
Culture 5,424,69 4,918,865.3
-505,827.03
Development Co., 2.37 4
Ltd.
Metis Info Tech
(Guangzhou) Co., -508,585.15
Ltd.
Subtotal 166,884, 41,003,609 - 66,771,744. 135,464,429
Total 81,442,213.22
Other explanations
None
(1). Description of other equity instrument investments
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Ending balance Opening balance
Hangzhou Regenovo Biotechnology., 20,580,000.00 20,580,000.00
Ltd.
LIPOTRUE,S.L. 35,822,400.00 35,822,400.00
Hangzhou Golong Holding Co., Ltd. 90,000,000.00
Total 146,402,400.00 56,402,400.00
(2). Description of non-transactional equity instrument investments
□ Applicable √ Not applicable
Other explanations:
√ Applicable □ Not applicable
The Company invests in equity for strategic investment purposes, and the investees will take the
Company's investments as equity instruments. Therefore, the Company designates such equity instrument
investments as financial assets at fair value through other comprehensive income.
□ Applicable √ Not applicable
Other explanations:
□ Applicable √ Not applicable
Measurement mode of investment real estate
(1). Investment real estate adopting the cost measurement mode
Unit: Yuan Currency: RMB
Annual Report 2022
Building and Construction in
Item Land use rights Total
construction progress
I. Original book value
(1) Outsourcing 272,699.95 272,699.95
(2) Transfer-in of 687,863.91 687,863.91
inventory\fixed
assets\construction in process
II. Accumulated depreciation and accumulated amortization
(1) Provision or 2,609,451.73 2,609,451.73
amortization
(2) Transfer-in of fixed 18,279.32 18,279.32
assets
III. Impairment Provision
(1) Provision
(1) Disposal
(2) Other transfer-out
IV. Book Value
(2). Real estate held for investment with pending proprietorship certificate
□ Applicable √ Not applicable
Other explanations
□ Applicable √ Not applicable
Presentation by item
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Ending balance Opening balance
Fixed assets 570,376,309.67 558,981,209.20
Annual Report 2022
Disposal of fixed assets
Total 570,376,309.67 558,981,209.20
Other explanations:
□ Applicable √ Not applicable
Fixed assets
(1). Description of fixed assets
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Houses and General Dedicated Means of
Item Total
buildings equipment equipment transportation
I. Original book value:
balance
increase
(1)
Purchase
(2)
Transfer-in of
construction in
progress
decrease
(1) Disposal
or scrapping
(2) Transfer
to investment real 687,863.91 687,863.91
estate
balance
II. Accumulated depreciation
balance
increase
(1)
Provision
decrease
(1) Disposal
or scrapping
Annual Report 2022
(2) Transfer
to investment real 18,279.32 18,279.32
estate
balance
III. Impairment Provision
balance
increase
(1)
Provision
decrease
(1) Disposal
or scrapping
balance
IV. Book Value
book value
book value
(2). Temporarily idle fixed assets
□ Applicable √ Not applicable
(3). Fixed assets leased in through finance lease
□ Applicable √ Not applicable
(4). Fixed assets leased out through operating lease
□ Applicable √ Not applicable
(5). Fixed assets without property right certificate
□ Applicable √ Not applicable
Other explanations:
□ Applicable √ Not applicable
Disposal of fixed assets
□ Applicable √ Not applicable
Presentation by item
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Annual Report 2022
Item Ending balance Opening balance
Construction in progress 207,378,935.86 108,678,896.27
Engineering materials
Total 207,378,935.86 108,678,896.27
Other explanations:
□ Applicable √ Not applicable
Construction in progress
(1). Description of construction in progress
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Ending balance Opening balance
Item Carrying Impairment Carrying Impairment
Book value Book value
amount provision amount provision
Huzhou
Production
Base 141,886,053. 55,292,163.
Expansion 44 04
Project (Phase
I)
Longwu R&D
Center 34,804,789. 7,157,088.8
Construction 71 1
Project
Decoration 5,282,700.2 5,374,335.4
engineering 9 5
Information
System
Upgrade
Project
Make-up 14,323,636. 26,447,530.
Factory 47 33
Other sporadic 6,815,149.8 13,766,588.
projects 1 00
Total 207,378,935.86
(2). Changes of items under important construction in progress in the current period
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount of Amount of Including:
Proportion of Interest
transfer to other Accumulated Amount of
accumulated capitalization
Opening Current fixed assets decreases Ending Progress amount of interest Source of
Item Budget project rate in the
balance increase in the in the balance of works interest capitalization fund
investment to current
current current capitalization in the current
budget (%) period (%)
period period period
Annual Report 2022
Huzhou RMB416. 55,292,163.0 97,107,22 10,513,330. 141,886,0 36.57 36.57% 10,391,387.5 9,475,140.14 4.57 Raised
Production 78million 4 1.35 95 53.44 4 funds and
Base self-owned
Expansion funds
Project
(Phase I)
Longwu RMB128. 7,157,088.81 27,647,70 34,804,78 27.06 27.06% 6,888,331.35 6,361,861.28 4.57 Raised
R&D Center 61million 0.90 9.71 funds and
Construction self-owned
Project funds
Information RMB112. 641,190.64 3,625,415. 4,266,606 3.80 3.80% 2,636,042.58 2,391,078.36 4.57 Raised
System 40million 50 .14 funds and
Upgrade self-owned
Project funds
Makeup RMB66.1 26,447,530.3 12,123,893. 14,323,63 43.33
Factory 1million 3 86 6.47
RMB723. 89,537,972.8 128,380,3 22,637,224. 195,281,0 / 19,915,761.4 18,228,079.7 / /
Total /
(3). Impairment provision of construction in progress accrued in the current period
□ Applicable √ Not applicable
Other explanations
□ Applicable √ Not applicable
Engineering materials
(4). Engineering materials
□ Applicable √ Not applicable
(1). Productive biological assets with cost measurement mode
□ Applicable √ Not applicable
(2). Productive biological assets with fair value econometric mode
□ Applicable √ Not applicable
Other explanations
□ Applicable √ Not applicable
□ Applicable √ Not applicable
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Houses and buildings Total
I. Original book value
Annual Report 2022
II. Accumulated depreciation
(1) Accrual 1,071,299.90 1,071,299.90
III. Impairment Provision
(1) Accrual
(1) Disposal
IV. Book Value
Other explanations:
None
(1). Description of intangible assets
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Unpatented Customer Trademark
Item Land use rights Patent right Software Total
technology resources right
I. Original book value
balance 0 0
Current 28,721.78 39,897,000.00 780,737.56 40,706,459.34
increase
(1)
Purchase
decrease
(1)
Disposal
balance 0 0
II. Accumulated amortization
Opening 80,337,918.89 423,582.17 533,063.88 51,966.23 19,671,238.01 112,781,979.51
balance
Current 11,941,951.57 7,039.30 6,756.49 1,055,400.46 2,340,748.70 2,094,088.62 17,445,985.14
increase
Annual Report 2022
(1)
Provision
Current 51,966.23 43,406.38 95,372.61
decrease
(1)
Disposal
Ending 92,279,870.46 430,621.47 539,820.37 2,340,748.70 21,721,920.25 130,132,592.04
balance
III. Impairment Provision
Opening
balance
Current
increase
(1)
Provision
Current
decrease
(1)
Disposal
Ending
balance
IV. Book Value
book value 4
book value 1
At the end of this period, the proportion of intangible assets formed through internal research and
development of the Company to the balance of intangible assets is 0.00%.
(2). The land use right without the property ownership certificate
□ Applicable √ Not applicable
Other explanations:
□ Applicable √ Not applicable
□ Applicable √ Not applicable
(1). Original book value of goodwill
□ Applicable √ Not applicable
Annual Report 2022
(2). Impairment provision of goodwill
□ Applicable √ Not applicable
(3). Information about the asset group or combination of asset groups of goodwill
□ Applicable √ Not applicable
(4). Explain the goodwill impairment test process, key parameters (such as the forecast period
growth rate, stable period growth rate, profit rate, discount rate, forecast period when the
present value of the future cash flow is expected, if applicable) and the recognition method of
goodwill impairment loss
□ Applicable √ Not applicable
(5). Impact of goodwill impairment test
□ Applicable √ Not applicable
Other explanations
□ Applicable √ Not applicable
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Opening Current Amortized Other Ending balance
balance increase amount in the decreased
current period amount
Renovation 28,035,222.52 6,908,686.99 15,834,323.90 19,109,585.61
costs
Endorsement 1,297,168.97 1,297,168.97
fee
Garage use 192,950.56 192,950.56
fee
Software 231,132.06 198,113.21 33,018.85
service fee
Total 29,756,474.11 6,908,686.99 17,522,556.64 19,142,604.46
Other explanations:
None
(1). Deferred income tax assets without offset
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Ending balance Opening balance
Deductible Deferred Deductible Deferred
Item
temporary income taxes temporary income taxes
difference Assets difference Assets
Impairment provision
of assets
Annual Report 2022
Unrealized profit from 42,025,801.32 10,506,450.33 51,427,566.52 11,315,875.56
internal transaction
Deductible loss 24,661,711.36 6,165,427.84
Government subsidies 6,399,811.33 959,971.70 6,416,263.33 962,439.50
pertinent to assets
Unused membership 83,272,601.46 20,818,150.36
points
Anticipated return losses 4,541,544.48 1,135,386.12 4,699,734.32 1,174,933.59
Short-term lease expenses 449,832.92 67,474.94
Advertising and business 3,258,145.25 814,536.31
promotion expenses
Provisions for bad debts 14,181,029.90 3,545,098.74 12,133,125.37 3,033,245.75
of accounts receivable
Inventory valuation 24,366,081.72 4,518,122.80 13,851,297.64 2,192,173.55
reserve
Impact of share-based 31,280,678.91 5,940,147.52 64,709,836.24 13,951,922.23
payment
Total 209,775,527.29 48,305,338.82 177,899,534.78 38,796,018.02
(2). Deferred income tax liabilities without offset
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Ending balance Opening balance
Taxable Deferred Taxable Deferred income
Item
temporary income taxes temporary taxes
difference Liabilities difference Liabilities
Assets assessment
appreciation in
businesses consolidation
under common control
Changes in the fair value
of other debt investments
Changes in the fair value
of other equity
instrument investments
One-time deduction for 126,101,620.56 19,019,431.67 56,019,830.45 8,408,158.81
depreciation of fixed
assets
Total 126,101,620.56 19,019,431.67 56,019,830.45 8,408,158.81
(3). Deferred income tax assets or liabilities presented in net amount after offset
□ Applicable √ Not applicable
(4). Details of unrecognized deferred income tax assets
√ Applicable □ Not applicable
Annual Report 2022
Unit: Yuan Currency: RMB
Item Ending balance Opening balance
Deductible temporary 218,452,946.39 86,680,894.07
difference
Deductible loss 393,391,257.51 328,350,840.97
Total 611,844,203.90 415,031,735.04
(5). Deductible loss of unrecognized deferred income tax assets will expire in the following years
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Year Ending balance Beginning balance Remarks
Total 393,391,257.51 328,350,840.97 /
Other explanations:
□ Applicable √ Not applicable
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Ending balance Opening balance
Item Carrying Impairment Carrying Impairment
Book value Book value
amount provision amount provision
Contract
acquisition
cost
Contract
performance
cost
Return cost
receivable
Contract
assets
Prepaid for 39,897,000.0 39,897,000.
long-term 0 00
asset
purchase
funds
Annual Report 2022
Other long- 5,554,726. 5,554,726. 4,270,303.56 4,270,303.5
term assets 06 06 6
Total
Other explanations:
None
(1). Classification of short-term borrowings
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Ending balance Opening balance
Credit loans 200,195,890.41 200,251,506.85
Total 200,195,890.41 200,251,506.85
Description of classification of short-term borrowings
None
(2). Overdue but yet unrepaid short-term borrowings
□ Applicable √ Not applicable
Particulars of important overdue but yet unrepaid short-term borrowings:
□ Applicable √ Not applicable
Other explanations
□ Applicable √ Not applicable
□ Applicable √ Not applicable
□ Applicable √ Not applicable
(1). Presentation of notes payable
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Type Ending balance Opening balance
Bank acceptance bills 69,626,352.12 79,156,771.40
Total 69,626,352.12 79,156,771.40
The amount of notes payable due and unpaid at the end of this period is RMB0.00.
Annual Report 2022
(1). Presentation of accounts payable
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Ending balance Opening balance
Payment for goods 252,113,782.78 309,697,429.86
Expenses 213,566,905.71 84,316,536.83
Payment for acquisition of 9,746,795.74 10,012,274.47
long-term assets
Total 475,427,484.23 404,026,241.16
(2). Important accounts payable with the account age of more than one year
□ Applicable √ Not applicable
Other explanations
□ Applicable √ Not applicable
(1). Presentation of receipts in advance
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Ending balance Opening balance
Rents receivable in advance 464,328.26 173,769.85
Total 464,328.26 173,769.85
(2). Important receipts in advance with an account age of more than one year
□ Applicable √ Not applicable
Other explanations
□ Applicable √ Not applicable
(1). Information of contract liabilities
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Ending balance Opening balance
Advance receipt of payment 83,234,612.24 82,548,148.92
for goods
Unused membership points 91,368,221.67 8,603,836.40
Total 174,602,833.91 91,151,985.32
(2). Amount of and reasons for significant changes in carrying amount during the Reporting Period
□ Applicable √ Not applicable
Other explanations:
Annual Report 2022
□ Applicable √ Not applicable
(1). Presentation of employee compensation payable
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Opening Current Current
Item Ending balance
balance increase decrease
I. Short-term compensation 78,069,805.1 585,679,799.99 539,470,862.08 124,278,743.01
II. Post-employment benefits 579,244.62 22,463,138.12 22,382,376.39 660,006.35
- defined contribution plans
III. Dismissal Benefit
IV. Other benefits due within
one year
Total
(2). Presentation of short-term compensation
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Opening Current Current
Item Ending balance
balance increase decrease
I. Salaries, bonuses, 77,170,134.07 536,580,186.31 490,610,993.51 123,139,326.87
allowances and subsidies
II. Welfare expense of 6,691.56 21,458,796.83 21,465,488.39
employee
III. Social insurance 518,125.19 15,540,497.97 15,293,767.31 764,855.85
premium
Including: Medical 484,798.88 14,741,022.63 14,478,264.93 747,556.58
insurance premium
Industrial injury 13,009.69 704,718.01 704,474.40 13,253.30
insurance premium
Maternity insurance 20,316.62 94,757.33 111,027.98 4,045.97
premium
IV. Housing provident fund 374,854.28 9,032,832.44 9,033,126.43 374,560.29
V. Trade union fund and 3,067,486.44 3,067,486.44
staff education fund
VI. Short-term paid leave
VII. Short-term profit
sharing plan
Total 78,069,805.10 585,679,799.99 539,470,862.08 124,278,743.01
Annual Report 2022
(3). List by defined contribution plan
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Current
Item Opening balance Current increase Ending balance
decrease
insurance
insurance
payment
Total 579,244.62 22,463,138.12 22,382,376.39 660,006.35
Other explanations:
□ Applicable √ Not applicable
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Ending balance Opening balance
Enterprise income tax 111,162,751.37 63,190,175.54
Value added tax ("VAT") 27,112,038.46 23,812,907.23
Property tax 6,689,657.49 2,133,274.27
Withholding of personal 4,226,657.07 1,481,039.09
income tax
Urban maintenance and 1,288,999.75 4,705,718.03
construction tax
Surtax for education expenses 1,003,854.07 2,598,933.67
Stamp duties 796,591.64 175,861.55
Surcharge for local education 619,094.66 1,732,622.45
Land use tax 44,922.50
Disabled security fund 19,226.94 14,175.52
Consumption tax 3,547.12
Total 152,918,871.45 99,893,176.97
Other explanations:
None
Presentation by item
□ Applicable √ Not applicable
Other explanations:
□ Applicable √ Not applicable
Annual Report 2022
Interests payable
(1). Presentation by category
□ Applicable √ Not applicable
Dividends payable
(2). Presentation by category
□ Applicable √ Not applicable
Other payables
(1). List other payables by nature of payment
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Ending balance Opening balance
Security deposits 46,394,144.19 52,827,845.96
Restricted share repurchase 164,976,000.00 5,628,128.21
obligations
Other 5,022,039.22 3,706,179.38
Total 216,392,183.41 62,162,153.55
(2). Important other payables with an account age of more than one year
□ Applicable √ Not applicable
Other explanations:
□ Applicable √ Not applicable
□ Applicable √ Not applicable
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Ending balance Opening balance
Lease liabilities due within one 2,549,452.14
year
Total 2,549,452.14
Other explanations:
None
Description of other current liabilities
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Ending balance Opening balance
Annual Report 2022
Short-term bonds payable
Return payment payable
Tax on items to be resold 10,820,499.59 9,521,415.32
Total 10,820,499.59 9,521,415.32
Changes in short-term bonds payable:
□ Applicable √ Not applicable
Other explanations:
□ Applicable √ Not applicable
(1). Classification of long-term loans
□ Applicable √ Not applicable
Other explanations, including interest rate range:
□ Applicable √ Not applicable
(1). Bonds payable
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Ending balance Opening balance
Convertible corporate bonds 724,491,557.93 695,586,778.80
Total 724,491,557.93 695,586,778.80
(2). Changes of bonds payable: (excluding other financial instruments such as preferred shares and
perpetual bonds classified as financial liabilities)
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Impact of
Current Interest Premium or Current
Bonds Face Issuance Bonds Issuance Opening current Ending
period accrued by discount period
Name value Date Period Amount balance share balance
Issuance face value amortization Repayment
conversion
Proya 100.00 December 6 751,713,000.00 695,586,778.80 2,352,576.15 29,467,309.84 2,252,817.00 662,289.86 724,491,557.93
Convertible 8, 2021
Bond
Total / / / 751,713,000.00 695,586,778.80 2,352,576.15 29,467,309.84 2,252,817.00 662,289.86 724,491,557.93
(3). Descriptions of the conditions and time for conversion of convertible corporate bonds
√ Applicable □ Not applicable
With the approval issued by China Securities Regulatory Commission in the Approval on Public Issue of
Convertible Corporate Bonds of Proya Cosmetics Co., Ltd. (ZJXK [2021] No. 3408), on December 8,
Annual Report 2022
of 100.00 RMB/share and the total issuance amount of RMB751,713,000.00.
The coupon rate of the aforesaid convertible corporate bonds is 0.30% for the first year, 0.50% for the
second year, 1.00% for the third year, 1.50% for the fourth year, 1.80% for the fifth year and 2.00% for
the sixth year. Annual interest payment dates are anniversaries of the date of initial offering of convertible
bonds. The Company will, no later than five trading days after the interests payment day of each year, pay
the interests of the year and, no later than five trading days after the maturity date of convertible corporate
bonds, redeem all unconverted convertible bonds from investors at a price of 115% of the par value of the
convertible bonds issued this time (including the annual interests of the last tranche).
The convertible period of convertible bonds starts from the first trading day after the expiration of 6
months from the issuance date of convertible bonds until the maturity date of convertible bonds. The initial
conversion price shall be 195.98 RMB/share, in no case, lower than the average trading price of A shares
of the Company in the twenty trading days prior to the publication of the prospectus (if the stock price is
adjusted for ex-dividend or ex-dividend in the twenty trading days, the closing price of the trading day
before such adjustment is calculated according to the price after the ex-dividend or ex-dividend adjustment)
or the average trading price of A shares of the Company in the previous trading day, and shall not be
adjusted up.
In May 2022, the Company completed the 2021 equity distribution plan. In accordance with the relevant
provisions of the Prospectus for the Public Offering of A-Share Convertible Corporate Bonds by Proya
Cosmetics Co., Ltd. and the relevant regulations of the China Securities Regulatory Commission on the
issuance of convertible corporate bonds, the share price of Proya convertible bonds was adjusted from
date).
In the current period, a total of 7,760 convertible corporate bonds were converted, with an increase of
RMB5,517.00 in capital stock, an increase of RMB754,813.50 in capital reserve (capital stock premium),
and a decrease of RMB53,111.99 in other equity instruments.
(4). Explanation on other financial instruments classified as financial liabilities
Basic information of other financial instruments such as preferred shares and perpetual bonds issued at the
end of the period
□ Applicable √ Not applicable
Statement of changes in financial instruments such as preferred shares and perpetual bonds issued at the
end of the period
□ Applicable √ Not applicable
Explanation on the basis for classifying other financial instruments as financial liabilities:
□ Applicable √ Not applicable
Other explanations:
□ Applicable √ Not applicable
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Ending balance Opening balance
Payable operating lease payment 3,814,629.83
Annual Report 2022
Unrecognized financing expenses -96,510.42
Total 3,718,119.41
Other explanations:
None
Presentation by item
□ Applicable √ Not applicable
Other explanations:
□ Applicable √ Not applicable
Long-term payables
(1). Long-term payables presented by nature
□ Applicable √ Not applicable
Special accounts payable
(2). Special payables presented by nature
□ Applicable √ Not applicable
□ Applicable √ Not applicable
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Opening balance Ending balance Cause of formation
Provide external
guarantees
Pending litigations
Product quality
assurance
Restructuring
obligation
Loss-making contract
to be performed
Return payment 10,812,084.88 59,282,928.68 Estimated future potential
payable return losses
Other
Total 10,812,084.88 59,282,928.68 /
Other particulars, including the particulars on key assumptions and estimates concerning estimated
significant liabilities
Annual Report 2022
None
Information of deferred income
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Opening Current Current Ending Cause of
Item
balance increase decrease balance formation
Government 6,416,263.33 2,062,638.00 2,079,090.00 6,399,811.33 Government
subsidies subsidies
Total 6,416,263.33 2,062,638.00 2,079,090.00 6,399,811.33 /
Items involving government subsidies:
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount
included Amount
Amount of
in non- included in
new Asset-
Liability Opening operating other income Other Ending
subsidies in related/income-
item balance revenue in the changes balance
the current related
in the current
period
current period
period
Subsidies 6,416,263.33 2,062,638.00 2,079,090.00 6,399,811.33 Asset-related
for
modified
cosmetic
technology
Other explanations:
√ Applicable □ Not applicable
For the details on inclusion of government subsidies of the current period into the current profit or loss,
refer to the particulars contained in "84. Government subsidies" in "VII. Notes to the Items of Consolidated
Financial Accounts" of "Section X Financial Report" of this report.
□ Applicable √ Not applicable
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Increase or decrease in the change (+, -)
Annual Report 2022
Opening Provident Ending
balance Issuance Bonus fund balance
Other Subtotal
of shares shares Share
conversion
Total 201,009,966 2,100,000 80,403,986 5,517 82,509,503 283,519,469
shares
Other explanations:
According to the resolution of the fifth meeting of the third session of Board of Directors, the resolution
of the 2021 annual general meeting of shareholders, the resolution of the sixth meeting of the third session
of Board of Directors, the resolution of the first extraordinary general meeting of 2022, and the revised
articles of association of the Company, the Company applied to increase its registered capital by
RMB80,403,986.00, which was converted from capital reserves. The benchmark date for conversion was
December 31, 2021, and the changed registered capital was RMB281,413,952.00. The above matter has
been verified by Pan-China Certified Public Accountants LLP (Special General Partnership) which has
issued the Capital Verification Report (TJY (2022) No. 414).
According to the resolution of the sixth meeting of the third session of Board of Directors, the resolution
of the seventh meeting of the third session of Board of Directors, the first extraordinary general meeting
of 2022 and the provisions of the restricted share incentive agreement, the Company applied to increase
the registered capital by RMB2,100,000.00 through issuing 2,100,000 ordinary shares (A share) to 101
incentive agreement participants, including SHEN Bin, at a price of 78.56 RMB/share (with the face value
of 1.00 RMB/share). The Company had received a total of RMB164,976,000.00 in monetary contributions
from 101 participants, including RMB2,100,000.00 included in the paid up capital and
RMB162,876,000.00 included in the capital reserve (capital stock premium). The above matter has been
verified by Pan-China Certified Public Accountants LLP (Special General Partnership) which has issued
the Capital Verification Report (TJY (2022) No. 415).
In the current period, a total of 7,760 convertible corporate bonds were converted, with an increase of
RMB5,517.00 in capital stock, an increase of RMB754,813.50 in capital reserve (capital stock premium),
and a decrease of RMB53,111.99 in other equity instruments.
(1). Basic information of other financial instruments such as preferred shares and perpetual bonds
issued at the end of the period
□ Applicable √ Not applicable
(2). Statement of changes in financial instruments such as preferred shares and perpetual bonds
issued at the end of the period
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Current
Outstanding Opening Current decrease Ending
increase
financial
Book Book
instruments Number Book value Number Number Number Book value
value value
Proya 7,517,130 50,956,622.11 7,760 53,111.99 7,509,370 50,903,510.12
Convertible
Annual Report 2022
Bond
Total 7,517,130 50,956,622.11 7,760 53,111.99 7,509,370 50,903,510.12
Changes of other equity instruments in the current period, Explanation on reasons for changes, and basis
for relevant accounting treatment:
□ Applicable √ Not applicable
Other notes:
√ Applicable □ Not applicable
The current decrease of RMB53,111.99 was due to the current conversion of 7,760 convertible corporate
bonds into shares, with an increase of RMB5,517.00 in capital stock, an increase of RMB754,813.50 in
capital reserve (capital stock premium), and a decrease of RMB53,111.99 in other equity instruments.
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Opening balance Current increase Current decrease Ending balance
Capital premium 799,674,532.76 183,791,378.23 125,277,272.12 858,188,638.87
(Equity
premium)
Other capital 34,597,672.90 47,357,121.24 25,327,646.79 56,627,147.35
reserve
Total 834,272,205.66 231,148,499.47 150,604,918.91 914,815,786.22
Other explanations, including the current changes and the explanation on the reasons for the changes:
During the period, the capital premium (capital stock premium) increased by RMB183,791,378.23, of
which: ① RMB10,519,504.61 was increased due to the transfer of other capital reserves recognized for
the unlocked part of restricted shares issued under the equity incentive plan in the waiting period to the
capital stock premium; ② RMB9,641,060.12 was increased due to the difference between the price paid
for the purchase of minority shareholders' equity of the subsidiary Huzhou Younimi Cosmetics Co., Ltd.
and the Company's share of identifiable net asset of the subsidiary calculated based on the newly-increased
shareholding ratio; ③ RMB162,876,000.00 was increased due to the equity incentive granted in the
period and included in the capital reserve (refer to the explanation of "53. Capital stock" in "VII. Notes to
the Items of Consolidated Financial Statements" of "Section X Financial Report" of this report for details);
④ RMB754,813.50 was increased due to the current conversion of convertible corporate bonds into
shares (refer to the explanation of "46. Bonds payable" in "VII. Notes to the Items of Consolidated
Financial Statements" of "Section X Financial Report" of this report for details).
The capital premium (equity premium) for the current period is reduced by RMB125,277,272.12: ① The
decrease of RMB80,403,986.00 is due to the capitalization of capital reserves. For details, refer to the
particulars contained in the "53. Share capital" in "VII. Notes to the Items of Consolidated Financial
Statements" of "Section X Financial Report" of this report; ② The decrease of RMB44,873,286.12 is the
difference between the payment made for the purchase of the minority shares of the subsidiary Ningbo
TIMAGE Cosmetics Co., Ltd. and the share of identifiable net assets of the subsidiary calculated according
to the newly increased shareholding ratio;
Annual Report 2022
The increase of RMB47,357,121.24 in other capital reserve of the current period is due to the recognition
of RMB47,357,121.24 as 2022 restricted stock incentive fee and the inclusion of the same into other
capital reserve.
The capital reserve for the current period is reduced by RMB25,327,646.79: ① The decrease of
RMB10,519,504.61 is the released part of restricted shares issued under the equity incentive plan, for
which other capital reserve recognized during the waiting period is transferred to share premium; ② The
decrease of RMB763,475.30 is due to the adjustment of capital reserve for the difference between the
actual pre-tax deductible amount of released part and recognized amount of previous years; ③ The
decrease of RMB14,044,666.88 is due to the write-back of the deferred tax asset of the part the estimated
pre-tax deductible amount in future period is higher than the recognized restricted stock incentive fee and
the write-down of other capital reserve.
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Opening balance Current increase Current decrease Ending balance
Restricted shares
with repurchase 5,628,128.21 164,976,000.00 5,628,128.21 164,976,000.00
obligation
Total 5,628,128.21 164,976,000.00 5,628,128.21 164,976,000.00
Other explanations, including the current changes and the explanation on the reasons for the changes:
During the period, the increase of RMB164,976,000.00 was primarily due to the grant of restricted shares
during the period to the incentive objects. Refer to "53. Capital stock" in "VII. Notes to the Items of
Consolidated Financial Statements" of "Section X Financial Report" of this report for details.
During the period, the current decrease of RMB5,628,128.21 was due to the unlocking of 347,201
restricted shares by the Company according to the Proposal on Satisfying the Conditions for Release from
Sales Restrictions in the Third Release Period for Initially Granted Shares and Reserved Shares Under
Board of Directors of the Company held on January 20, 2022, with the grant price of 16.21 RMB/share
after deducting the distributed cash dividends.
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount incurred in the current period
Less: Included
Less: Included
in other
in other
Amount comprehensive
comprehensive
incurred income for the
income for the Less: Attributed Attributed
Opening before previous Ending
Item previous Income to parent to minority
balance income tax period and balance
period and tax company shareholders
in the transferred in
transferred in expenses after tax after tax
current retained
profit or loss
period earnings for
for the current
the current
period
period
Annual Report 2022
I. Other
comprehensive
income that
will not be
subsequently
reclassified
into profit and
loss
Including:
Remeasure the
variation
amount of
defined benefit
plan
Other
comprehensive
income that
can't be
reversed
through profit
and loss under
equity method
Changes in
the fair value
of other equity
instrument
investments
Changes in
the fair value
of enterprise's
own credit risk
II. Other - -670,928.97 - -1,918,603.07
comprehensive 1,247,674.10 670,928.97
income that
will be
reclassified
into profit or
loss
Including:
other
comprehensive
income that
can be
converted into
gains and
losses under
the equity
method
Changes in
the fair value
of other debt
investments
Amount of
financial assets
reclassified
into other
comprehensive
income
Annual Report 2022
Credit
impairment
provision of
other debt
investments
Cash flow
hedge reserve
Difference
from
translation of
- -
financial -670,928.97 -1,918,603.07
statements in
foreign
currency
Total other
- -
comprehensive -670,928.97 -1,918,603.07
incomes
Other explanations, including the adjustment of the effective part of cash flow hedging gains and losses
into the initially recognized amount of the hedged item:
None
□ Applicable √ Not applicable
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Opening balance Current increase Current decrease Ending balance
Legal surplus 100,634,780.00 41,124,954.50 141,759,734.50
Discretionary
surplus reserve
Reserve fund
Enterprise
development fund
Other
Total 100,634,780.00 41,124,954.50 141,759,734.50
Explanation on surplus reserves, including the current changes and the explanation on the reasons for the
changes:
The increase of RMB41,124,954.50 for the current period is mainly due to the withdrawal of statutory
surplus reserve according to the net profit of the parent company. The statutory surplus reserve does not
need to be withdrawn if the cumulative amount reaches fifty percent or more of the registered capital, and
is not withdrawn any more.
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Annual Report 2022
Item Current period Prior period
Undistributed profit at the end of last 1,696,978,064.52 1,265,671,865.63
period before adjustment
Total undistributed profit at the
beginning of the adjustment period (+
for increase, - for decrease)
Unappropriated earnings at the 1,696,978,064.52 1,265,671,865.63
beginning of period after adjustment
Plus: net profit attributable to the 817,400,223.93 576,119,025.56
owner of the parent company in the
current period
Less: Withdrawal of statutory surplus 41,124,954.50
reserve
Withdrawal of any surplus
reserves
Withdrawal of general risk
provision
Dividends payable on common 172,868,570.76 144,804,186.00
stock
Common stock dividends
converted to share capital
Other decreases 8,640.67
Undistributed profit at the end of the 2,300,384,763.19 1,696,978,064.52
period
According to the Resolution of the 2021 Annual General Meeting of the Company, the Company
distributed cash dividends of RMB8.60 (tax inclusive) per 10 shares to all shareholders based on the total
share capital of 201,009,966 shares registered on the registration date of dividend-paying equity, totaling
RMB172,868,570.76 (tax inclusive).
Details of the adjustment of the undistributed profit at the beginning of the period:
for Business Enterprises and its related new regulations at the beginning of the period is RMB0.00.
RMB0.00.
period is RMB0.00.
the beginning of the period is RMB0.00.
(1). Information of operating revenue and operating costs
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Amount incurred in the current period Amount incurred in the previous period
Annual Report 2022
Revenue Cost Revenue Cost
Main 6,361,763,550.69 1,916,352,535.29 4,620,431,686.01 1,545,098,469.32
business
Other 23,687,873.31 18,497,668.36 12,718,852.42 9,057,177.29
business
Total 6,385,451,424.00 1,934,850,203.65 4,633,150,538.43 1,554,155,646.61
(2). Information of income generated by the contract
□ Applicable √ Not applicable
Income generated by the contract:
□ Applicable √ Not applicable
(3). Explanation on performance obligations
□ Applicable √ Not applicable
(4). Explanation on remaining performance obligations allocated
□ Applicable √ Not applicable
Other explanations:
Main product type Amount
Products sales 6,363,192,536.17
Other 22,258,887.83
Subtotal 6,385,451,424.00
Amount for the current Amount for the same
Item
period period last year
Income recognized at a certain point 6,383,224,182.76 4,630,019,693.64
Income recognized over a period 2,227,241.24 3,130,844.79
Subtotal 6,385,451,424.00 4,633,150,538.43
(3) Revenue included in the opening book value of contract liabilities during the period was
RMB90,434,839.12.
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount incurred in the current Amount incurred in the previous
Item
period period
Urban maintenance and 25,692,368.39 17,952,927.40
construction tax
Education surcharge 12,641,385.47 9,040,908.31
Annual Report 2022
Surcharge for local education 8,447,813.01 6,041,735.14
Property tax 6,663,485.15 6,121,024.24
Stamp duties 2,921,661.26 1,391,884.80
Consumption tax 14,370.78 67,697.81
Vehicle and vessel use tax 10,724.88 19,195.60
Cultural undertaking 2,700.00
construction tax
Land use tax 44,922.50
Total 56,394,508.94 40,680,295.80
Other explanations:
None
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount incurred in the Amount incurred in the
Item
current period previous period
Image promotion expense 2,419,867,469.08 1,673,478,545.28
Employee compensation 314,177,020.39 259,892,827.21
Office allowances 28,106,339.49 26,009,040.14
Travel expenses 11,852,844.96 13,885,848.84
Meeting affair charges 4,094,821.02 8,691,079.85
Equity incentive expense for 3,815,630.91
restricted shares
Survey consulting fee 3,156,462.06 5,815,173.17
Other 766,765.04 3,761,562.24
Total 2,785,837,352.95 1,991,534,076.73
Other explanations:
None
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount incurred in the Amount incurred in the
Item
current period previous period
Employee compensation and service fee 156,737,777.08 127,971,906.74
Office allowance and business 61,368,432.01 45,243,541.73
entertainment expenses
Expenses for depreciation, amortization and 45,778,417.02 43,230,494.44
lease
Equity incentive expense for restricted 38,406,625.33 -372,647.76
shares
Annual Report 2022
Consultation and intermediary fee 12,338,732.18 10,207,746.14
Travel expense and conference fee 5,024,738.17 4,178,358.16
Other 7,642,027.58 6,529,119.78
Total 327,296,749.37 236,988,519.23
Other explanations:
None
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount incurred in the Amount incurred in the
Item
current period previous period
Labor cost 66,055,676.59 40,214,757.14
Outsourced R&D expense 41,417,003.04 26,453,748.31
Direct input cost 8,833,694.90 3,452,688.42
Expenses for depreciation, amortization and 5,485,513.91 4,857,429.74
lease
Equity incentive expense for restricted 5,134,865.00
shares
Other 1,082,351.05 1,605,027.22
Total 128,009,104.49 76,583,650.83
Other explanations:
None
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount incurred in the Amount incurred in the
Item
current period previous period
Interest expenses 13,019,503.91 9,759,260.83
Handling fees 634,636.61 757,405.88
Exchange gains and losses -2,943,538.91 10,095,095.58
Interest income -51,707,124.62 -28,096,157.42
Total -40,996,523.01 -7,484,395.13
Other explanations:
None
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount incurred in the current Amount incurred in the
Item
period previous period
Government subsidies pertinent 2,079,090.00 2,079,090.00
Annual Report 2022
to assets
Government subsidies related to 36,384,642.07 13,369,872.01
income
Refund of service charges for 507,799.10 473,539.34
withholding personal income tax
VAT input tax addition and 93,574.45 535,768.10
reduction
Total 39,065,105.62 16,458,269.45
Other explanations:
None
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount incurred in Amount incurred in
Item
the current period the previous period
Long-term equity investment income calculated by -5,658,023.28 -7,337,735.84
the equity method
Investment income from disposal of long-term
equity investment
Investment income of held-for-trading financial
assets during the holding period
Dividend income from other equity instrument
investments during the holding period
Interest income from debt investment during the
holding period
Interest income from other debt investments during
the holding period
Investment income from disposal of held-for-
trading financial assets
Investment income from disposal of other equity
instrument investments
Investment income from disposal of debt
investment
Investment income from disposal of other debt
investments
Gains of debt restructuring
Total -5,658,023.28 -7,337,735.84
Other explanations:
None
□ Applicable √ Not applicable
Annual Report 2022
□ Applicable √ Not applicable
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount incurred in the Amount incurred in the
Item
current period previous period
Loss on bad debts of notes receivable
Loss on bad debts of accounts 741,308.99 5,361,282.08
receivable
Loss on bad debts of other receivables -5,798,734.42 -30,196,229.26
Impairment losses of debt investment
Impairment losses of other debt
investments
Loss on bad debts of long-term
receivables
Impairment losses of contract assets
Total -5,057,425.43 -24,834,947.18
Other explanations:
None
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount incurred in the Amount incurred in the previous
Item
current period period
I. Loss on bad debts
II. Loss for devaluation of -94,640,937.84 -38,843,121.45
inventories and impairment loss of
contract performance cost
III. Impairment loss of long-term -66,771,744.63 -14,670,468.59
equity investment
IV. Impairment loss of investment
real estate
V. Asset impairment losses
VI. Impairment loss from
engineering materials
VII. Impairment loss of projects
under construction
VIII. Impairment loss of productive
biological assets
IX. Impairment loss of oil and gas
assets
Annual Report 2022
X. Impairment loss of intangible
assets
XI. Impairment loss of goodwill
XII. Others
Anticipated return losses -3,471,872.81
Total -164,884,555.28 -53,513,590.04
Other explanations:
None
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount incurred in the current Amount incurred in the
Item
period previous period
Gains from disposal of fixed
assets
Total 60,155.60 -112,183.24
Other explanations:
None
Non-operating revenue
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount Amount included in
Amount incurred in the
Item incurred in the current non-recurring
previous period
current period gains and losses
Total profit from disposal of
non-current assets
Including: Gains from
disposal of fixed assets
Gains from disposal
of intangible assets
Non-monetary asset
exchange profits
Accepting donations
Government subsidies
Amount not required to be 505,051.10 505,051.10
paid
Revenue from fines and 252,782.71 160,694.23 252,782.71
liquidated damages
Other 421,052.52 89,158.66 421,052.52
Total 1,178,886.33 249,852.89 1,178,886.33
Annual Report 2022
Government subsidies included in the current profit or loss
□ Applicable √ Not applicable
Other explanations:
□ Applicable √ Not applicable
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount Amount included in
Amount incurred in the
Item incurred in the current non-recurring
previous period
current period gains and losses
Total loss from disposal of 136,692.79 136,692.79
non-current assets
Including: Loss from 136,692.79 136,692.79
disposal of fixed assets
Loss from disposal of
intangible assets
Non-monetary asset
exchange losses
External donation 1,434,600.00 3,700,000.00 1,434,600.00
Expenditure of overdue fine 2,915,707.07 2,915,707.07
Other 126,645.38 101,835.06 126,645.38
Total 4,613,645.24 3,801,835.06 4,613,645.24
Other explanations:
None
(1). Income tax expense statement
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount incurred in the current Amount incurred in the
Item
period previous period
Current income tax expense 239,665,217.82 104,812,397.97
Deferred income tax expense -16,798,498.26 5,934,490.34
Total 222,866,719.56 110,746,888.31
(2). Adjustment process of accounting profit and income tax expense
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Amount incurred in the current period
Total profit 1,054,150,525.93
Annual Report 2022
Income tax expense calculated at 263,537,631.49
statutory/applicable tax rate
Impact of different tax rates applicable to
subsidiaries
Impact of adjusting income tax in previous 7,253,374.96
periods
Impact of non-taxable income
Impact of non-deductible costs, expenses and 4,619,849.58
losses
Impact of utilization of deductible loss for which -24,105,090.31
no deferred tax assets were previously
recognized
Impact of deductible temporary differences for 65,506,404.65
which no deferred tax assets or deductible losses
were recognized for the period
Additional deductions for R&D expenditures -16,980,175.15
Impact of applicable preferential tax rates -76,965,275.66
Income tax expenses 222,866,719.56
Other explanations:
□ Applicable √ Not applicable
√ Applicable □ Not applicable
For the details on other comprehensive income, refer to the particulars contained in "57. Other
Comprehensive Income" in "VII. Notes to the Items of Consolidated Financial Statements", of "Section
X Financial Report" of this report
(1). Other cash received related to operating activities
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount incurred in the Amount incurred in the
Item
current period previous period
Interest income from bank deposits 51,707,124.62 28,096,157.42
Government subsidies 38,447,280.07 13,369,872.01
Receivables and payables and others 9,345,735.71 13,148,492.13
Total 99,500,140.40 54,614,521.56
Explanation on other cash received related to operating activities:
None
(2). Other cash paid related to operating activities
√ Applicable □ Not applicable
Annual Report 2022
Unit: Yuan Currency: RMB
Amount incurred in the Amount incurred in the
Item
current period previous period
Expenses paid in cash 2,579,629,003.60 1,846,712,604.69
Other expenses paid in cash
Receivables and payables and others 36,679,087.31 18,273,196.33
Total 2,616,308,090.91 1,864,985,801.02
Explanation on other cash paid related to operating activities:
None
(3). Other cash received related to investing activities
□ Applicable √ Not applicable
(4). Other cash paid related to investment activities
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount incurred in the current Amount incurred in the
Item
period previous period
Net cash payment of disposal of
subsidiaries
Payment for construction deposit 13,493,392.00
Total 77,739,374.88
Explanation on other cash paid related to investment activities:
None
(5). Other cash received from financing activities
□ Applicable √ Not applicable
(6). Other cash paid related to financing activities
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount incurred in the current Amount incurred in the
Item
period previous period
Amount for acquisition of minority
equity
Payment for operating lease rent 1,319,087.27
Payment for liquidation funds to
minority shareholders
Payment for share repurchase 1,733,805.39
Expense for issuance of convertible
bonds
Annual Report 2022
Total 48,263,571.88 4,835,393.12
Explanation on other cash paid related to financing activities:
None
(1). Supplementary information to cash flow statement
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount for the current
Supplementary information Amount of previous period
period
Net profit 831,283,806.37 557,053,687.03
Add: Asset impairment provision 169,941,980.71 78,348,537.22
Credit impairment loss
Depreciation of fixed assets, depletion 52,552,861.25 47,382,558.76
of oil and gas assets and depreciation
of productive biological assets
Amortization of right-to-use assets 1,071,299.90
Amortization of intangible assets 17,445,985.14 17,891,004.03
Amortization of long-term 17,522,556.64 30,679,385.75
unamortized expenses
Losses on disposal of fixed assets, -60,155.60 112,183.24
intangible assets and other long-term
assets ("-" for income)
Losses on retirement of fixed assets 136,692.79
("-" refers to income)
Losses on changes in fair value ("-"
refers to income)
Financial expenses ("-" refers to 13,019,503.91 9,759,260.83
income)
Investment loss ("-" refers to income) 5,658,023.28 7,337,735.84
Decrease in deferred income tax -27,409,771.12 4,400,436.98
assets ("-" refers to increase)
Increase in deferred income tax 10,611,272.86 1,534,053.36
liabilities ("-" refers to decrease)
Decrease in inventory ("-" refers to -315,753,506.27 -30,645,504.60
increase)
Decrease in operating receivables ("-" -28,573,373.07 62,613,217.00
refers to increase)
Increase in operating payables ("-" 316,331,819.20 42,845,585.19
refers to decrease)
Other 47,357,121.24 358,803.19
Net cash flow from operating 1,111,136,117.23 829,670,943.82
activities
Annual Report 2022
Conversion of debt into capital
Convertible corporate bonds due
within one year
Fixed assets under finance lease
Ending balance of cash 3,125,333,085.05 2,378,334,768.09
Less: Opening balance of cash 2,378,334,768.09 1,401,850,754.88
Add: Ending balance of cash
equivalents
Less: Opening balance of cash
equivalents
Net increase in cash and cash 746,998,316.96 976,484,013.21
equivalents
(2). Net cash paid for acquisition of subsidiaries in the current period
□ Applicable √ Not applicable
(3). Net cash received from disposal of subsidiaries in the current period
□ Applicable √ Not applicable
(4). Composition of cash and cash equivalents
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Ending balance Opening balance
I. Cash 3,125,333,085.05 2,378,334,768.09
Including: Cash on hand 20,176.08 22,348.23
Bank deposits that can be used for payment at 3,048,251,723.18 2,338,747,508.20
any time
Other monetary funds that can be used for 77,061,185.79 39,564,911.66
payment at any time
Funds deposited with the central bank for
payment
Deposits in other banks
Funds for interbank lending
II. Cash equivalents
Including: Bond investment due within three
months
III. Ending balance of cash and cash equivalents 3,125,333,085.05 2,378,334,768.09
Including: Cash and cash equivalents with restricted
use by the parent company or a subsidiary of the
group
Amount of the commercial paper transferred by endorsement that does not involve cash receipts and
payments
Annual Report 2022
Amount for the Amount for the
Item
current period previous period
Amount of the commercial paper transferred by
endorsement
Including: Payment for goods 26,020,864.88 27,230,343.90
Other explanations:
√ Applicable □ Not applicable
Supplementary information to the cash flow statement
Balance of monetary Cash and cash Amounts of
Time point Causes of differences
capital equivalents differences
It includes the fixed-term
deposit of RMB30,000,000.00,
the transformer fixed -term
deposit of RMB250,000.00, the
December 31, 35,670,000.0
RMB70,000.00, the Pingduoduo
deposit of RMB5,000,000.00,
and the Tmall and Alipay
deposits of RMB350,000.00.
RMB293,481.72 fixed-term
deposit margin for transformers,
RMB7,000,000.00 L/C deposit,
December 31, 12,713,481.7 RMB70,000.00 ETC vehicle
Pinduoduo deposit, and
RMB350,000.00 Tmall and
Alipay deposits
Explanation on the names of "other" items for adjusting the ending balance of last year and adjustment
amounts:
□ Applicable √ Not applicable
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Ending book value Cause for restrictions
Cash and cash equivalents 35,670,000.00 Including transformer
deposit, Pinduoduo deposit,
L/C deposit, Tmall deposit,
and Alipay deposit
Notes receivable
Annual Report 2022
Inventories
Fixed assets
Intangible assets
Total 35,670,000.00 /
Other explanations:
None
(1). Foreign-currency monetary items
√ Applicable □ Not applicable
Unit: RMB
Converted RMB at
Ending foreign Converted exchange
Item the end of period
currency balance rate
balance
Cash and cash equivalents - - 78,681,219.02
Including: SF 22,953.48 7.5432 173,142.69
EUR 4,823,916.14 7.4229 35,807,447.12
HKD 19,833,443.38 0.8933 17,716,619.97
JPY 314,448,186.96 0.0524 16,463,878.17
KRW 311,989,121.00 0.0055 1,723,125.60
USD 975,936.23 6.9646 6,797,005.47
Accounts receivable - - 3,734,893.40
Including: EUR 219,393.66 7.4229 1,628,537.20
HKD 581,033.69 0.8933 519,019.96
JPY 30,313,547.88 0.0524 1,587,156.74
KRW 32,500.27 0.0055 179.50
Long-term borrowings - -
Including: USD
EUR
HKD
Other receivables 22,047,584.09
Including: EUR 2,865,596.08 7.4229 21,271,033.15
HKD 321,039.70 0.8933 286,775.13
JPY 4,569,595.10 0.0524 239,254.86
KRW 35,970.62 6.9646 250,520.95
Accounts payable 7,799,354.24
Including: EUR 806,683.38 7.4229 5,987,930.08
HKD 273,057.42 0.8933 243,914.00
JPY 29,938,312.39 0.0524 1,567,510.16
Other payables 1,156,758.55
Including: EUR
HKD 455,798.03 0.8933 407,150.71
JPY 14,316,968.56 0.0524 749,607.84
Annual Report 2022
USD 416.00 6.9646 2,897.27
Other explanations:
None
(2). Explanation on overseas operating entities: for important overseas operating entities, the main
overseas operating places, functional currency and selection basis should be disclosed, and the
reasons for changes in functional currency should also be disclosed.
√ Applicable □ Not applicable
Hapsode Co., Ltd., Hanna Cosmetics Co., Ltd. and Korea Younimi Cosmetics Co., Ltd. are domiciled in
South Korea, with business income and expenditure dominated by Korean Won, and adopt KRW as their
functional currency. Hongkong Xinghuo Industry Limited, Hong Kong Zhongwen Electronic Commerce
Co., Limited, HONGKONG XUCHEN TRADING LIMITED, HONGKONG KESHI TRADING
LIMITED, BOYA (Hong Kong) Investment Management Co., Limited, and Hong Kong Wanyan
Electronic Commerce Co., Limited are domiciled in Hong Kong and adopt RMB as the functional currency.
O&R Co., Ltd. is domiciled in Japan, with business income and expenditure dominated by Japanese Yen,
and adopts JPY as its functional currency.
□ Applicable √ Not applicable
(1). Basic information of government subsidies
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount included in the
Type Amount Reported items
current profit or loss
Government subsidies 2,079,090.00 Other incomes 2,079,090.00
pertinent to assets
Government subsidies 36,384,642.07 Other incomes 36,384,642.07
related to income
(2). Return of government subsidies
□ Applicable √ Not applicable
Other explanations:
None
√ Applicable □ Not applicable
(1) Details
Annual Report 2022
Amortization
Opening Current Amortization in Ending in the current
Item Deferred period the current Deferred period Note
income New subsidy period income Reported
items
Subsidies for modified Other
cosmetic technology incomes
Subtotal 6,416,263.33 2,062,638.00 2,079,090.00 6,399,811.33
According to the Decision on the Award for Technical Transformation of Proya Cosmetics Co., Ltd.
Huzhou Branch issued by the People's Government of Daixi Town, Huzhou,the Company received
technical transformation subsidy of RMB14,561,400.00 from the Government of Daixi Town in 2014, and
apportioned the subsidy on an average basis over the service life of the asset. RMB1,456,140.00 was
recorded in the other income in the current period.
According to the Notice on Issuing Construction and Development Fund (First Batch) for Powerful
Industrial City in 2015 (HCQ [2015] No. 150) issued by Huzhou Finance and Huzhou Economy and
Information Bureau, the technical transformation subsidy of RMB2,350,000.00 was paid by Huzhou
Finance in 2015. The Company apportioned the subsidy on an average basis over the service life of the
asset. RMB235,000.00 was recorded in the other income in the current period.
According to the Notice on Issuing Special Funds (Second Batch) for "Machine Substitution for Humans"
Project in 2014 (WFG [2015] No. 18) issued by Development and Reform Commission of Wuxing District,
Huzhou and Finance Bureau of Wuxing District, the technical transformation subsidy of RMB500,000.00
was paid by Finance Bureau of Wuxing District, Huzhou in 2015. The Company apportioned the subsidy
on an average basis over the service life of the asset. RMB50,000.00 was recorded in the other income in
the current period.
According to the Notice on Issuing Special Funds (Second Batch) for Industrial Development in Huzhou
in 2018 (HCQ [2018] No. 319) issued by Huzhou Finance and Huzhou Economy and Information Bureau,
the technical transformation subsidy of RMB1,379,500.00 was paid by Huzhou Finance in December 2018.
The Company apportioned the subsidy on an average basis over the service life of the asset.
RMB137,950.00 was recorded in the other income in the current period.
According to the Notice on Allocating Special Subsidy Funds for 2019 Demonstration Intelligent
Workshop in Wuxing District (W.C.Q.H. [2020] No.145) issued by Wuxing District Finance Bureau and
Wuxing District Development, Reform, and Economic Information Technology Bureau, in May 2020, a
technical renovation subsidy of RMB2,000,000.00 was allocated to the Company by Huzhou Wuxing
District Finance Bureau, which was evenly distributed by the Company throughout the service life of the
formed related assets and of which RMB200,000.00 was included in current other income.
According to the Agreement of Investment for Construction and Land Use sign between the Company and
the People's Government of Daixi Town, Wuxing District, Huzhou City, in January 2022, the People's
Government of Daixi Town, Wuxing District, Huzhou City invested RMB2,062,638.00 of construction
subsidy. As of December 31, 2022, the project had not finished yet.
losses incurred
Reported
Item Amount Note
items
Annual Report 2022
Allocated by Ningbo Meishan Bonded Port Area
Enterprise development Other Finance Bureau according to the investment
support fund incomes promotion contract signed by the Company with
Ningbo Meishan Bonded Port Area Finance Bureau
Allocated by Huzhou Wuxing District Finance
Bureau according to the Notice of the Office of
Enterprise development Other Wuxing District People's Government on Issuing the
support fund incomes Implementation Opinions on the High Quality
Development of Manufacturing Industry in Wuxing
District (2020-2024) (W.Z.B.F. [2022] No. 42)
Allocated by Hangzhou Municipal Employment
Management Service Center according to the
documents including the Notice of Zhejiang
Provincial Department of Human Resources and
Other Social Security, Zhejiang Provincial Department of
Job stabilization subsidies 1,428,408.19
incomes Finance, and Zhejiang Provincial Tax Service, State
Taxation Administration on Doing a Good Job in
Providing Unemployment Insurance to Stabilize Jobs,
Improve Skills, and Prevent Unemployment
(Z.R.S.F.(2022) No.37)
Allocated by Hangzhou Xihu District Bureau of
Commerce according to documents including the
Notice of Hangzhou Municipal Bureau of Commerce
Special funds for business Other
development incomes
Increasing Support for the Wholesale and Retail
Industry and the Accommodation and Catering
Industry
Allocated by Hangzhou Xihu District Bureau of
Science and Technology, according to the Notice on
Special funds for technology Other
development incomes
and Technology Development Fund for 2022 (H.C.J.
[2022] No. 22)
Other subsidies such as Allocated by Hangzhou Xihu District Market
intellectual property subsidy Supervision Bureau, Hangzhou Xihu District People's
Other
funds, Party organization 71,533.88 Government Xixi Sub-district Office, State Treasury
incomes
funds, and patent subsidy Huzhou Central Branch, and Ningbo Meishan FTZ
funds Finance Bureau
Subtotal 36,384,642.07
(2) The amount of government subsidies included in the current profit or loss in the current period was
RMB38,463,732.07.
VIII. Change of Consolidation Scope
□ Applicable √ Not applicable
Annual Report 2022
□ Applicable √ Not applicable
□ Applicable √ Not applicable
Is there a single disposal of investment in a subsidiary, that is, is there a loss of control
□ Applicable √ Not applicable
Other explanations:
□ Applicable √ Not applicable
Annual Report 2022
Explain the changes in the consolidation scope caused by other reasons (for example, newly established subsidiary, liquidated subsidiary, etc.) and the specific
information:
√ Applicable □ Not applicable
(I) Increase of consolidation scope
Time point of equity
Company name Equity acquisition method Contribution amount Contribution ratio
acquisition
Newly established
Xuzhou Laibo Information Technology Co., Ltd. January 2022 100.00%
subsidiary
Newly established
Hangzhoun TIMAGE Cosmetics Co., Ltd. March 2022 1,000,000.00 100.00%
subsidiary
Newly established
Proya (Zhejiang) Cosmetics Co., Ltd. May 2022 100.00%
subsidiary
Hangzhou Donghai Wangchao Catering Newly established
September 2022 100.00%
Management Co., Ltd. subsidiary
Newly established
Hangzhou Boxin Trade Co., Ltd. December 2022 100.00%
subsidiary
(II) Decrease of consolidation scope
From the beginning of the
Net assets as at the disposal
Company name Equity disposal method Time point of equity disposal period to the disposal date
date
Net profit
Xuzhou Proya Information
Cancel July 2022 1,408,790.53 -364,888.38
Technology Co., Ltd.
Huzhou Boyun Electronic
Cancel August 2022 2,151,631.53 41,571.37
Commerce Co., Ltd.
□ Applicable √ Not applicable
Annual Report 2022
IX. Equity in Other Entities
(1). Composition of enterprise group
√ Applicable □ Not applicable
Main Shareholding ratio (%) Mode of
Subsidiary Registration Nature of
place of acquisition
Name place business Direct Indirect
business
Hangzhou Proya Hangzhou Hangzhou Wholesale 100.00 Establishment
Trade Co., Ltd. and retail
Zhejiang Hangzhou Hangzhou Wholesale 100.00 Establishment
Meiligu and retail
Electronic
Commerce Co.,
Ltd.
Huzhou Huzhou Huzhou Wholesale 100.00 Establishment
Chuangdai E- and retail
commerce Co.,
Ltd.
Hapsode Hangzhou Hangzhou Wholesale 100.00 Establishment
(Hangzhou) and retail
Cosmetics Co.,
Ltd.
Huzhou UZERO Huzhou Huzhou Wholesale 100.00 Establishment
Trading Co., and retail
Ltd.
Hongkong Hong Hong Kong Wholesale 100.00 Establishment
Xinghuo Kong and retail
Industry Limited
Mijing Siyu Hangzhou Hangzhou Wholesale 100.00 Establishment
(Hangzhou) and retail
Cosmetics Co.,
Ltd.
Ningbo Ningbo Ningbo Wholesale 71.36 Establishment
TIMAGE and retail
Cosmetics Co.,
Ltd.
Explanation on the shareholding ratio in subsidiaries different from the voting ratio;
None
Basis for holding half or less voting rights but still controlling the investee, and holding more than half
voting rights but not controlling the investee:
None
Basis for controlling the important structured entities included in the consolidation scope:
Annual Report 2022
None
Basis for determining whether a company is an agent or a principal:
None
Other explanations:
None
(2). Important non-wholly owned subsidiary
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Shareholding Gain or loss Dividends declared
Balance of
ratio of the attributable to and distributed to
Name of minority interest
minority minority minority
subsidiary at the end of the
shareholder shareholders in the shareholders in the
period
Percentage current period current period
Ningbo 28.64% 23,146,719.87 18,282,355.15
TIMAGE
Cosmetics Co.,
Ltd.
Explanation on the shareholding ratio of minority shareholder in subsidiaries different from the voting
ratio:
□ Applicable √ Not applicable
Other explanations:
□ Applicable √ Not applicable
(3). Major financial information of important non-wholly-owned subsidiaries
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Ending balance Opening balance
Name of Non-
Non-current Current Non-current Non-current Current Total
subsidiary Current assets Total assets Total liabilities Current assets Total assets current
assets liabilities liabilities assets liabilities liabilitie
liabilities
Ningbo 173,712,882.33 5,198,059.78 178,910,942.11 112,248,423.70 1,672,655.27 113,921,078.97 83,031,785.97 94,867.22 83,126,653.19 94,774,666.19 94,774,666
TIMAGE
Cosmetics
Co., Ltd.
Amount incurred in the current period Amount incurred in the previous period
Cash flows Cash flows
Name of Total generated Total generated
Operating Operating
subsidiary Net profit comprehensive from Net profit comprehensive from
revenue revenue
incomes operating incomes operating
activities activities
Ningbo 571,701,521.25 76,095,826.44 76,095,826.44 36,940,377.15 280,899,630.28 10,089,908.81 10,089,908.81 36,200,196.8
TIMAGE
Annual Report 2022
Cosmetics
Co., Ltd.
Other explanations:
None
(4). Major restrictions on using enterprise group assets and paying off enterprise group debts
□ Applicable √ Not applicable
(5). Financial support or other support provided to structured entities included in the scope of
consolidated financial statements
□ Applicable √ Not applicable
Other explanations:
□ Applicable √ Not applicable
still controlled
√ Applicable □ Not applicable
(1). Explanation on changes in the share of owners' equity in subsidiaries on equity
√ Applicable □ Not applicable
Shareholding ratio Shareholding ratio
Name of subsidiary Time of change
before change after change
Huzhou Younimi Cosmetics
October 2022 51.00% 100.00%
Co., Ltd.
Ningbo TIMAGE Cosmetics
February 2022 61.36% 71.36%
Co., Ltd.
(2). The impact of transactions on minority shareholders' equity and the equity attributable to the
parent company
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Huzhou Younimi Cosmetics Co., Ningbo TIMAGE
Ltd. Cosmetics Co., Ltd.
Purchase cost/disposal consideration
- Cash 1,085,313.00 45,000,000.00
- Fair value of non-cash assets
Total purchase cost/disposal 1,085,313.00 45,000,000.00
consideration
Less: The net asset share of a 10,726,373.12 126,713.88
subsidiary calculated according to the
proportion of the equity
acquired/disposed of
Annual Report 2022
Difference -9,641,060.12 44,873,286.12
Including: Adjustment to capital -9,641,060.12 44,873,286.12
reserves
Adjustment to surplus reserves
Adjustment to undistributed
profits
Other explanations
□ Applicable √ Not applicable
√ Applicable □ Not applicable
(1). Important joint ventures and affiliates
□ Applicable √ Not applicable
(2). Major financial information of important joint ventures
□ Applicable √ Not applicable
(3). Major financial information of important affiliates
□ Applicable √ Not applicable
(4). Summary financial information of unimportant joint ventures and affiliates
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Ending balance/amount incurred Beginning balance/amount
in the current period incurred in previous period
Joint ventures:
Total book value of investment 3,068,948.16 3,074,758.68
Total of the following items calculated according to the shareholding ratio
- Net profits -5,810.52 -231,871.89
- Other comprehensive income
- Total comprehensive income -5,810.52 -231,871.89
Affiliates:
Total book value of investment 135,464,429.30 166,884,777.60
Total of the following items calculated according to the shareholding ratio
- Net profits -5,652,212.76 -7,105,863.95
- Other comprehensive income
- Total comprehensive income -5,652,212.76 -7,105,863.95
Other explanations
None
Annual Report 2022
(5). Statement of important restrictions on the ability of joint ventures or associates to transfer
capital to the Company
□ Applicable √ Not applicable
(6). Excess losses incurred by joint ventures or affiliates
□ Applicable √ Not applicable
(7). Unconfirmed commitments related to investments in joint ventures
□ Applicable √ Not applicable
(8). Contingent liabilities related to investments in joint ventures or associates
□ Applicable √ Not applicable
□ Applicable √ Not applicable
statements
Explanation on structured entities not included in the scope of consolidated financial statements:
□ Applicable √ Not applicable
□ Applicable √ Not applicable
X. Risks Related to Financial Instruments
√ Applicable □ Not applicable
The Company's risk management aims to reach balancing between risks and benefits, to minimize the
negative impact of risks on the Company's operating results, and to maximize the interests of shareholders
and other equity investors. Based on these risk management goals, the Company's basic strategy for risk
management is to determine and analyze various risks faced by the Company, establish an appropriate risk
tolerance bottom line and conduct risk management, and supervise various risks in a timely and reliable
manner to control the risks within a limited scope.
The Company faces various risks related to financial instruments in its daily activities, including credit
risk, liquidity risk and market risk. The management has deliberated and approved the policing governing
these risks as outlined below:
(I) Credit risk
Credit risk refers to the risk that one party of a financial instrument fails or is unable to fulfill its obligations,
resulting in financial losses to the other party.
(1) Assessment method of credit risk
The Company, on each balance sheet date, assesses whether the credit risk of relevant financial
instruments has increased significantly since initial recognition. In determining whether the credit risk has
increased significantly since initial recognition, the Company takes into account the reasonable and well-
Annual Report 2022
founded information available without unnecessary additional costs or efforts, including qualitative and
quantitative analysis based on historical data, external credit risk rating and forward-looking information.
The Company determines the changes that may result in default risk of financial instruments within their
expected duration by comparing the default risk of the financial instruments on the balance sheet date and
the initial recognition date based on an individual financial instrument or the combined financial
instruments with similar credit risk characteristics.
The Company deems that the credit risk of the financial instruments has increased significantly if any one
or more of the following quantitative and qualitative standards are triggered:
balance sheet date has increased by more than certain proportion compared with that at the initial
recognition;
financial conditions of the debtor and changes in the exiting or anticipated technology, market, economic
or legal environment which have a material adverse effect on the debtor's ability to make repayment to the
Company.
(2) Definitions of default and assets with credit impairment
If the financial instruments meet any one or more of the following conditions, the Company defines the
financial assets as in default, with its standard consistent with the definition of credit impairment:
the economic or contractual considerations in connection with the debtor's financial difficulties.
The key parameters for measurement of expected credit loss include the probability of default, loss given
default and default risk exposure. The Company builds the models of probability of default, loss given
default and default risk exposure considering the quantitative analysis of historical statistical data (such as
counterparty rating, guarantee type, category of collateral and pledge, repayment method) and forward-
looking information.
Instrument Loss Provisions, refer to the particulars contained in "5. Accounts receivable, 6. Receivable
financing and 8. Other receivables" in "VII. Notes to the Items of Consolidated Financial Statements" of
"Section X Financial Report" of this report.
The credit risk of the Company is derived mainly from the monetary capital and accounts receivable. To
control the above related risk, the Company has respectively taken the following measures.
(1) Monetary capital
The bank deposit and other monetary capitals of the Company were deposited with financial institutions
with high credit rating; therefore, the credit risk was low.
(2) Accounts receivable
The Company continuously carries out credit assessment on customers who trade in credit. According to
the result of credit assessment, the Company deals with approved and credible customers, and monitors
the balance of its accounts receivable, so as to prevent significant bad debt risk.
No guarantee is required as the Company only transacts with recognized and reputable third parties. Credit
risk concentration is managed as per customers. As at December 31, 2022, there was certain credit
concentration risk in the Company and 68.05% (December 31, 2021: 77.35%) of the accounts receivable
Annual Report 2022
of the Company were concentrated on top five customers in the balance of account receivable. The
Company had no guarantee or other credit enhancement on the balance of the accounts receivable.
The maximum credit risk exposure of the Company is the book value of the financial assets in the balance
sheet.
(II) Liquidity risk
Liquidity risk refers to the risk of shortage of funds when the Company fulfills its obligation to settle by
delivering cash or other financial assets. Liquidity risk may arise from the inability to sell financial assets
at fair value as soon as possible, the counterparty's inability to pay off its contractual debt, the acceleration
of debt or the inability to generate expected cash flow.
To control such risk, the Company applies various financing methods, such as bill settlement and bank
loans, in appropriate combination of long-term and short-term financing ways to optimize the financing
structure and keep the balancing between financing sustainability and flexibility. The Company has
obtained lines of credit from several commercial banks to satisfy its working capital demand and capital
expenditure.
Classification of financial liabilities by the remaining due days
Ending amount
Item Undiscounted
Book value Within 1 year 1 - 3 years Above 3 years
contract value
Short-term
borrowings
Notes payable 69,626,352.12 69,626,352.12 69,626,352.12
Accounts
payable
Other payables 216,392,183.41 216,392,183.41 216,392,183.41
Bonds payable 724,491,557.93 900,552,174.00 3,754,685.00 18,773,425.00 877,094,416.00
Lease liabilities 3,718,119.41 3,718,119.41 3,718,119.41
Non-current
liabilities due 2,549,452.14 2,549,452.14 2,549,452.14
within one year
Subtotal 1,692,401,039.65 1,870,166,652.25 969,651,043.84 22,491,544.41 877,094,416.00
(Continued)
Balance at the end of the previous year
Item Undiscounted
Book value Within 1 year 1 - 3 years Above 3 years
contract value
Short-term 200,251,506.85 201,745,068.49
borrowings
Notes payable 79,156,771.40 79,156,771.40 79,156,771.40
Accounts 404,026,241.16 404,026,241.16
payable
Other payables 62,162,153.55 62,162,153.55 62,162,153.55
Bonds payable 695,586,778.80 902,807,313.00 2,255,139.00 11,275,695.00 889,276,479.00
Subtotal 1,441,183,451.76 1,649,897,547.60 749,345,373.60 11,275,695.00 889,276,479.00
(III) Market risk
Annual Report 2022
Market risk refers to that the fair value or future cash flow of financial instruments may fluctuate due to
changes in market prices. Market risks include interest rate and foreign exchange risks.
Interest rate risk refers to that the fair value or future cash flow of financial instruments may fluctuate due
to changes in market interest rates. The interest-bearing financial instruments with a fixed interest rate
cause the interest rate risk of fair value, and those with a floating interest rate cause the interest rate risk
of cash flow. The Company determines the proportion of financial instruments with a fixed interest rate
and financial instruments with a floating interest rate according to the market environment, and maintains
an appropriate combination of financial instruments through regular review and monitoring.
Foreign exchange risk refers to that the fair value or future cash flow of financial instruments will fluctuate
due to the change of foreign exchange rate. The risk of changes in foreign exchange rates faced by the
Company is mainly related to the Company's foreign currency assets and liabilities. The Company carries
out business in the Chinese mainland, and therefore has main activities valuated in RMB. Therefore, the
market risk of foreign exchange changes faced by the Company is minor.
For the details on foreign-currency monetary assets and liabilities of the Company at the end of the period,
refer to the particulars contained in "82. Foreign-currency monetary items" in "VII. Notes to the Items of
Consolidated Financial Statements" of "Section X Financial Report" of this report.
XI. Disclosure of Fair Value
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Ending fair value
The first The second
The third level
Item level of fair level of fair
of fair value Total
value value
measurement
measurement measurement
I. Continuous fair value
measurement
(I) Held-for-trading financial
assets
fair value through profit or loss
(1) Debt instrument investment
(2) Equity instrument
investment
(3) Derivative financial assets
as measured at fair value
through profit or loss
(1) Debt instrument investment
(2) Equity instrument
investment
Annual Report 2022
(II) Other debt investments
(III) Other equity instrument 146,402,400.00 146,402,400.00
investments
(IV) Investment real estate
for transfer upon appreciation
(V) Biological assets
assets
Total assets continuously 146,402,400.00 146,402,400.00
measured at fair value
(VI) Held-for-trading financial
liabilities
measured at fair value through
profit or loss
Including: Trading bonds
issued
Derivative financial
liabilities
Other
designated to be measured at
fair value through profit or loss
Total liabilities continuously
measured at fair value
II. Non-continuous Fair
Value Measurement
(I) Held-for-sale assets
Total assets not continuously
measured at fair value
Total liabilities not
continuously measured at
fair value
value measurement items
□ Applicable √ Not applicable
Annual Report 2022
parameters used in continuous and non-continuous second-level fair value measurement items
□ Applicable √ Not applicable
parameters used in continuous and non-continuous third-level fair value measurement items
√ Applicable □ Not applicable
For other equity instrument investments held, historical cost is used as their fair value.
beginning and ending book value for continuous third-level fair value measurement items
□ Applicable √ Not applicable
within the current period, the reasons for the conversion and the policy for determining the
conversion time point
□ Applicable √ Not applicable
□ Applicable √ Not applicable
□ Applicable √ Not applicable
□ Applicable √ Not applicable
XII. Related Parties and Transactions
□ Applicable √ Not applicable
Refer to the notes for the details on subsidiaries of the Company
√ Applicable □ Not applicable
For the details on subsidiaries of the Company, refer to the particulars contained in "IX. Interests in Other
Entities" of "Section X Financial Report" of this report.
Refer to the notes for details of the important joint ventures or associates of the Company
□ Applicable √ Not applicable
Information about other joint ventures or associates that have related transactions with the Company in
the current period, or have balance resulting from related transactions with the Company in the previous
period is as follows
Annual Report 2022
□ Applicable √ Not applicable
Other explanations
□ Applicable √ Not applicable
√ Applicable □ Not applicable
Name of other related parties Relationship between other related parties and the
Company
Zhejiang Yueqing Rural Commercial Bank Other
Co., Ltd.
Huzhou Beauty Town Technology Other
Incubation Park Co., Ltd.
Ningbo Weiman Cosmetics Co., Ltd. Other
CBIC Other
Zhuhai Healthlong Biotechnology Co., Ltd. Other
Shaoxing Keqiao Qingteng Culture Other
Investment Co., Ltd.
PARISEZHAN HK LIMITED Other
EURLPHARMATICA Other
SARLORTUS Other
S.A.SAREDIS Other
Korea Youke Co., Ltd. Other
Shanghai Youke Brand Management Co., Other
Ltd.
Shanghai Youke Jiabei Technology Co., Other
Ltd.
Pan Xiang Other
Beauty Hi-tech Innovation Co., Ltd. Other
[Note] Transactions between subsidiaries Hong Kong Keshi Trading Co., Ltd., Ningbo Keshi Trading
Limited, Korea Younimi Cosmetics Co., Ltd., Huzhou Younimi Cosmetics Co., Ltd., O&R Co., Ltd.,
Zhejiang Qingya Culture Art Communication Co., Ltd., and their minority shareholders or companies
controlled by the actual controllers of their minority shareholders have been disclosed in "5. Information
of related transactions" in "XII. Others" of "Section X Financial Report" of this report by referring to the
provisions on related-party transactions.
Other explanations
None
(1). Related transactions of purchasing and selling goods, providing and receiving labor services
Statement of purchasing goods/accepting labor services
√ Applicable □ Not applicable
Unit: RMB’0,000 Currency: RMB
Annual Report 2022
Amount Approved Whether the Amount
Related
incurred in transaction transaction limit incurred in
Related parties transaction
the current limit (if is exceeded (if the previous
content
period applicable) applicable) period
Zhuhai
Healthlong Purchase of
Not applicable 2,456.11
Biotechnology goods
Co., Ltd.
Beauty Hi-tech
Purchase of
Innovation 32.50 Not applicable 35.16
goods
Co., Ltd.
Ningbo
Weiman Purchase of
Cosmetics Co., goods
Ltd.
Statement of sales of goods/provision of services
√ Applicable □ Not applicable
Unit: RMB’0,000 Currency: RMB
Related transaction Amount incurred in Amount incurred in
Related parties
content the current period the previous period
Shanghai Youke Brand
Sales of goods 1,228.90 8,198.31
Management Co., Ltd.
Shanghai Youke Jiabei
Sales of goods 3,361.65
Technology Co., Ltd.
Ningbo Weiman
Sales of goods 63.08 6.99
Cosmetics Co., Ltd.
CBIC Sales of goods 0.33 0.30
PARISEZHAN HK
Sales of goods 842.97
LIMITED
Korea Youke Co., Ltd. Sales of goods 136.06
Shaoxing Keqiao
Qingteng Culture Sales of goods 2.62
Investment Co., Ltd.
Zhejiang Yueqing Rural
Commercial Bank Co., Sales of goods 1.41
Ltd.
Explanation on related party transactions in purchasing and selling goods, providing and receiving labor
services
□ Applicable √ Not applicable
(2). Related entrusted management/contracting and entrusted management/outsourcing
Statement of entrusted management/contracting of the Company:
□ Applicable √ Not applicable
Annual Report 2022
Explanation on related trusteeship/contracting
□ Applicable √ Not applicable
Statement of entrusted management/outsourcing of the Company
□ Applicable √ Not applicable
Explanation on related management/outsourcing
□ Applicable √ Not applicable
(3). Information of related lease
The Company as the lessor:
□ Applicable √ Not applicable
Annual Report 2022
The Company as the lessee:
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Rent expenses of short-
Variable lease
term leases and low-
payments not included Interest expenses on
value asset leases Right-of-use assets
in the measurement of Rent paid lease liabilities
subject to simplified increased
lease liabilities (if assumed
treatment (if
Name of Types of applicable)
applicable)
lessor leased assets
Amount Amount Amount Amount Amount Amount Amount
Amount Amount Amount
incurred incurred incurred incurred incurred incurred incurred
incurred in incurred in incurred in
in the in the in the in the in the in the in the
the current the current the current
previous current previous previous current previous previous
period period period
period period period period period period period
Huzhou
Beauty Town
Technology
Field 386,182.00 15,292.30 693,678.71
Incubation
Park Co.,
Ltd.
Explanation on related lease
□ Applicable √ Not applicable
Annual Report 2022
(4). Information of related guarantee
The Company as the guarantor
□ Applicable √ Not applicable
The Company as the guarantee
□ Applicable √ Not applicable
Description of related guarantee
□ Applicable √ Not applicable
(5). Borrowing of related party funds
□ Applicable √ Not applicable
(6). Information of asset transfer and debt restructuring of related parties
□ Applicable √ Not applicable
(7). Remuneration of key management personnel
√ Applicable □ Not applicable
Unit: RMB’0,000 Currency: RMB
Amount incurred in the current Amount incurred in the
Item
period previous period
Remuneration of key management 666.40 700.02
personnel
[Note] Relevant remuneration recognized without stock payment
(8). Other related party transactions
√ Applicable □ Not applicable
The Company and its subsidiaries have opened bank accounts with Zhejiang Yueqing Rural Commercial
Bank Company Limited and collected the interests accrued on their deposits at the market interest rate.
(1) Deposits with related party banks
Unit: RMB’0,000
Amount for
Related
Ending the same
Related parties transaction
amount period last
content
year
Zhejiang Yueqing Rural Commercial Bank Co.,
Cash at bank 0.00 14,645.33
Ltd.
(2) Interests collected from related parties
Unit: RMB’0,000
Amount for
Related
Amount for the the same
Related parties transaction
current period period last
content
year
Zhejiang Yueqing Rural Commercial Bank Co.,
Interest income 144.49 638.49
Ltd.
Annual Report 2022
(1). Accounts receivable items
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Ending balance Opening balance
Item Related parties Carrying Provision for Carrying Provision for
amount bad debts amount bad debts
Ningbo Weiman 79,007.60 3,950.38
Accounts
Cosmetics Co.,
receivable
Ltd.
Huzhou Beauty 43,000.00 43,000.00
Town
Prepayments Technology
Incubation Park
Co., Ltd.
EURL 18,232,635.52 18,232,635.52 19,606,379.23 19,606,379.23
Other
PHARMATICA
receivables
[Note]
Huzhou Beauty 133,568.20 132,868.20 133,568.20 121,334.10
Town
Other
Technology
receivables
Incubation Park
Co., Ltd.
[Note] Other receivables from EURL PHARMATICA are the consolidated statistics of PAN Xiang,
EURL PHARMATICA, PARISEZHAN HK LIMITED, SARLORTUS, and S.A.SAREDIS controlled by
PAN Xiang.
(2). Payable items
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Related parties Book balance at the Opening book balance
end of the period
Accounts payable S.A.SAREDIS 243,598.94 236,930.48
Ningbo Weiman 121,884.94 121,884.94
Accounts payable
Cosmetics Co., Ltd.
□ Applicable √ Not applicable
□ Applicable √ Not applicable
Annual Report 2022
XIII. Share-based Payments
√ Applicable □ Not applicable
Unit: Share Currency: RMB
Total amount of equity instruments granted by the
Company in the current period
Total amount of equity instruments exercised by the
Company in the current period
Total amount of equity instruments of the Company
Not applicable
which are invalid in the current period
The range of exercise price of stock options issued
by the Company at the end of the period and their Not applicable
remaining period of contract
The range of exercise price of other equity
The price for the granted restricted shares is
instrument options issued by the Company at the
end of the period and their remaining period of
months from the grant date.
contract
Other explanations
According to the Proposal on Satisfying the Conditions for Release from Sales Restrictions in the Third
Release Period for Initially Granted Shares and Reserved Shares Under 2018 Restricted Share Incentive
Plan deliberated and approved at the 4th meeting of the third session of Board of Directors of the Company
in 2022, 347,201 restricted shares held by the incentive objects who had satisfied the release conditions of
the third release period were released from sales restrictions. The circulating date of the sales was January
On July 25, 2022, according to the Proposal on 2022 Restricted Share Incentive Plan of the Company
(Draft) and Its Summary deliberated and approved at the First Extraordinary General Meeting of the
Company in 2022, under the Incentive Plan, the Company proposed to grant up to 2,100,000 restricted
shares to incentive objects. The initial grant date of the restricted shares is July 25, 2022. The incentive
plan participators include senior executives, middle-level managers and core employees working for the
Company (excluding independent directors and supervisors, and the shareholders or actual controllers
severally or jointly holding more than 5% of shares of the Company and their spouses, parents and
children), 101 persons in total, and the grant price is 78.56 RMB/share. The subject shares under the
Incentive Plan are derived from the ordinary shares A of the Company privately issued by the Company
to the incentive objects. The validity period of the Incentive Plan begins from the date when the registration
of the grant of restricted shares is completed to the date when all the restricted shares granted to the
incentive objects are released or repurchased and de-registered, in no case longer than 48 months. The
granted restricted shares will be released in three tranches (30%:30%:40%) over 36 months after the end
of 12 months after the initial grant of the restricted shares. The performance condition for the initial release
is that: On the basis of the operating revenue and net profit in 2021, the growth rate of operating revenue
and net profit in 2022 was no less than 25% and 25%, respectively. The performance condition for the
second release is that: On the basis of the operating revenue and net profit in 2021, the growth rate of
operating revenue and net profit in 2023 was no less than 53.75% and 53.75%, respectively. The
performance condition for the third release is that: On the basis of the operating revenue and net profit in
respectively.
Annual Report 2022
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Determination method of the fair value of equity Determined as per the share price on the grant
instruments on grant date date and the grant price of restricted shares
Basis for determining the quantity of feasible equity Determined according to the estimated
instruments performance conditions in the release period
Reason for significant difference with estimation in
the current period and estimation in the previous Not applicable
period
Accumulative amount of equity-settled share-based
payment included in capital reserve
Pay confirmed total expenses settled with equities in
the current period
Other explanations
None
□ Applicable √ Not applicable
□ Applicable √ Not applicable
□ Applicable √ Not applicable
XIV. Commitments and Contingencies
√ Applicable □ Not applicable
Important external commitments, nature and amount existing at the balance sheet date
As of December 31, 2022, the investment projects of the Company's public offering for fund raising are
as follows:
Unit: RMB’0,000
Total Ending
Fund raising Project Filing
Item investment accumulated
commitment or Approval No.
amount investment
Huzhou Production Base
Expansion Project (Phase I)
Longwu R&D Center 2101--330106--04--02--
Construction Project 307916
Information System
Upgrade Project
Annual Report 2022
Additional working capital 18,000.00 12,821.30 2,974.15
Total 94,766.49 75,171.30 32,337.40
(1). Important contingencies on the balance sheet date
□ Applicable √ Not applicable
(2). Even if the Company does not have important contingencies to be disclosed, it shall also state:
□ Applicable √ Not applicable
□ Applicable √ Not applicable
XV. Events subsequent to the Balance Sheet Date
□ Applicable √ Not applicable
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Profits or dividends to be distributed 246,661,938.03
Profits or dividend declared after
deliberation and approval
According to the 11th meeting of the third session of Board of Directors to be held on April 19, 2023,
based on the total share capital as at the record date on which equity distribution is implemented, the
Company proposes to distribute to all shareholders registered a cash dividend of RMB8.70 (tax inclusive)
per 10 shares, and convert the capital reserve into share capital in the proportion of 4 shares for every 10
shares held. Based on the total share capital of 283,519,469 shares on December 31, 2022, it is estimated
that the cash dividend to be distributed will amount to RMB246,661,938.03 (tax inclusive) and a total of
conversion of convertible bonds before the record date for equity distribution, the Company maintain the
said distribution and conversation ratios and yet adjust the total distribution and conversion amounts. The
matter above is to be deliberated and approved by the General Meeting.
□ Applicable √ Not applicable
□ Applicable √ Not applicable
Annual Report 2022
XVI. Other Important Matters
(1). Retrospective restatement
□ Applicable √ Not applicable
(2). Prospective application
□ Applicable √ Not applicable
□ Applicable √ Not applicable
(1). Exchange of non-monetary assets
□ Applicable √ Not applicable
(2). Replacement of other assets
□ Applicable √ Not applicable
□ Applicable √ Not applicable
□ Applicable √ Not applicable
(1). Determination basis and accounting policy of reportable segment
√ Applicable □ Not applicable
The Company does not have diversified operations or cross-regional operations, so there is no division-
based reporting. The details of main business income and main business cost of the Company classified
by brands are as follows:
Income from main
brands Cost of main business Gross profit
business
Proya brand 5,263,675,333.17 1,520,575,295.77 3,743,100,037.40
Other brands 1,098,088,217.52 395,777,239.52 702,310,978.00
Subtotal 6,361,763,550.69 1,916,352,535.29 4,445,411,015.40
Income from main
brands Cost of main business Gross profit
business
Proya brand 3,829,139,612.21 1,173,186,069.95 2,655,953,542.26
Other brands 791,292,073.80 371,912,399.37 419,379,674.43
Annual Report 2022
Subtotal 4,620,431,686.01 1,545,098,469.32 3,075,333,216.69
(2). Financial information of the reportable segment
□ Applicable √ Not applicable
(3). If the Company has no reportable segment, or cannot disclose the total assets and liabilities of
each reportable segment, the reasons shall be explained
□ Applicable √ Not applicable
(4). Other explanations
□ Applicable √ Not applicable
□ Applicable √ Not applicable
√ Applicable □ Not applicable
Lease
[Note] For details on right-of-use assets, refer to the particulars contained in "25. Right-of-use assets" in
"VII. Notes to the Items of Consolidated Financial Statements" of "Section X Financial Report" of this
report.
For the details on accounting policies for short-term leases and low value asset leases of the Company,
refer to the particulars contained in "42. Lease" in "V. Significant Accounting Policies and Estimates" of
"Section X Financial Report" of this report. Short-term lease expenses included in the current profit or
loss are as below:
Amount for the
Amount for the
Item same period last
current period
year
Short-term lease expenses 2,725,585.47 6,675,815.55
Low value asset lease expenses (except for short-term
lease expenses)
Total 2,904,402.76 7,078,412.75
(3) Current profit or loss and cash flow related to lease
Amount for the
Amount for the
Item same period last
current period
year
Interest expense on lease liabilities 41,422.91
Variable lease payments included in the current profit or
loss but not incorporated in the measurement of lease
liabilities
Income from subleasing right-of-use assets
Annual Report 2022
Total cash outflows related to lease 4,397,754.20 7,503,117.52
Profit or loss related to sales and leaseback transactions
(4) Details of maturity analysis and corresponding liquidity risk management of lease liabilities can be
found in the explanation of "X. Risks related to Financial Instruments" in "Section X Financial Report" of
this report.
Operating lease
(1) Lease income
Amount for the
Amount for the
Item same period last
current period
year
Lease income 1,962,289.59 3,130,844.79
(2) Assets under operating lease
Amount for the
Item Ending amount same period last
year
Investment real estate 68,654,700.81 70,321,868.00
Subtotal 68,654,700.81 70,321,868.00
For the details on the operation and rent-out of investment real estate, refer to the particulars contained in
"20. Investment real estate" in "VII. Notes to the Items of Consolidated Financial Statements" of "Section
X Financial Report" of this report.
XVII. Notes on Main Items of the Financial Statements of the Parent Company
(1). Disclosed by account age
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Account age Book balance at the end of the period
Within 1 year
Including: Sub-items within 1 year
Within 1 year 259,683,548.62
Sub-total within 1 year 259,683,548.62
Above 3 years
Above 5 years
Total 324,317,444.15
Annual Report 2022
(2). Disclosed by the classification of bad debt accrual method
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Ending balance Opening balance
Provision for bad Provision for bad
Carrying amount Carrying amount
debts debts
Category Book Book
Accrual
Percentage Accrual value Percent value
Amount Amount Amount Amount ratio
(%) ratio (%) age (%)
(%)
Provision 108,670,171.0 23.32 80,084,37 73.69 28,585,797.1
for bad debts 6 3.88 8
accrued
individually
Including:
Provision 324,317, 100.00 34,434,3 10.62 289,883,063.24 357,273,937.5 76.68 31,662,77 8.86 325,611,158.
for bad debts 444.15 80.91 4 8.73 81
accrued by
portfolio
Including:
Account age 324,317, 100.00 34,434,3 10.62 289,883,063.24 357,273,937.5 76.68 31,662,77 8.86 325,611,158.
portfolio 444.15 80.91 4 8.73 81
Total
Provision for bad debts accrued individually:
□ Applicable √ Not applicable
Provision for bad debts accrued by portfolio:
√ Applicable □ Not applicable
By portfolio: account age portfolio
Unit: Yuan Currency: RMB
Ending balance
Name
Accounts receivable Provision for bad debts Accrual ratio (%)
Within 1 year 259,683,548.62 12,984,177.43 5.00
Total 324,317,444.15 34,434,380.91 10.62
Determination and explanation of bad debts accrued by portfolio
□ Applicable √ Not applicable
If the bad debt provision is accrued according to the general model of expected credit loss, refer to the
disclosure of other receivables:
□ Applicable √ Not applicable
(3). Information of bad-debt provision
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Annual Report 2022
Changes in amount for the current period
Opening Charge-
Category Withdrawal or Other Ending balance
balance Accrual off or
write-back changes
write-off
Provision for
bad debts
accrued
individually
Provision for
bad debts
accrued by
portfolio
Total 111,747,152.61 2,771,602.18 -80,084,373.88 34,434,380.91
Among them, significant amount of bad-debt provision withdrawn or written back in the current period:
□ Applicable √ Not applicable
(4). Accounts receivable actually written off in the current period
□ Applicable √ Not applicable
Among them, information of accounts receivable significantly written off
□ Applicable √ Not applicable
(5). Accounts receivable of the top five ending balances collected by debtor
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Proportion of total
Ending balance
balance of accounts
Company name Ending balance of bad debt
receivable at the end
provision
of the period (%)
Zhejiang Meiligu Electronic 101,338,564.94 31.25 5,066,928.25
Commerce Co., Ltd.
Huzhou UZERO Trading Co., Ltd. 73,774,168.89 22.75 16,958,882.64
Hapsode (Hangzhou) Cosmetics 44,351,306.04 13.68 4,435,130.60
Co., Ltd.
Huzhou Hapsode Trading Co., Ltd. 37,642,480.39 11.61 1,882,124.02
Hangzhou Proya Trade Co., Ltd. 28,301,731.83 8.73 4,068,991.30
Total 285,408,252.09 88.02 32,412,056.81
Other explanations
None
(6). Accounts receivable derecognized due to transfer of financial assets
□ Applicable √ Not applicable
Annual Report 2022
(7). The amount of assets and liabilities formed by transferring accounts receivable and continuing
to be involved
□ Applicable √ Not applicable
Other explanations:
□ Applicable √ Not applicable
Presentation by item
□ Applicable √ Not applicable
Other explanations:
□ 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 explanations:
□ Applicable √ Not applicable
Dividends receivable
(4). Dividends receivable
□ Applicable √ Not applicable
(5). Important dividends receivable with an account age of more than 1 year
□ Applicable √ Not applicable
(6). Provision for bad debts
□ Applicable √ Not applicable
Other explanations:
□ Applicable √ Not applicable
Other receivables
(1). Disclosed by account age
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Account age Book balance at the end of the period
Within 1 year
Annual Report 2022
Including: Sub-items within 1 year
Within 1 year 33,856,482.33
Sub-total within 1 year 33,856,482.33
Above 3 years 4,741,614.72
Above 5 years
Total 232,356,084.24
(2). Classification by nature of payment
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Nature of payment Book balance at the end of the Opening book balance
period
Current account receivable 210,637,812.50 269,104,993.77
Security deposits 18,833,006.72 19,187,006.72
Suspense payment receivables 2,334,148.44 802,310.17
Other 551,116.58 416,500.00
Total 232,356,084.24 289,510,810.66
(3). Provision for bad debts
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
First stage Second stage Third stage
Expected credit loss Expected credit loss
Expected
Provision for bad for the entire for the entire Total
credit losses
debts duration (credit duration (credit
over the next
impairment not impairment has
occurred) occurred)
Balance as at 4,343,549.18 57,973,623.70 4,740,707.36 67,057,880.24
January 1, 2022
The balance as of
January 1, 2022 is
in the current
period
- Transferred to -3,132,974.45 3,132,974.45
the second stage
- Transferred to -21,087,259.16 21,087,259.16
the third stage
- Returned to the
second stage
Annual Report 2022
- Returned to the
first stage
Accrual in the 482,249.39 -21,221,492.31 44,462,897.34 23,723,654.41
current period
Amount written
back in the current
period
Current write off
Amount written
off in the current
period
Other changes
Balance as at 1,692,824.12 18,797,846.68 70,290,863.86 90,781,534.65
December 31,
Explanation of significant changes in book balance of other receivables with changes in provision for loss
in the current period:
□ Applicable √ Not applicable
The amount of bad debt provision in the current period and the basis for evaluating whether the credit risk
of financial instruments increases significantly:
□ Applicable √ Not applicable
(4). Information of bad-debt provision
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Changes in amount for the current period
Opening Withdrawal Charge- Ending
Category Other
balance Accrual or write- off or balance
changes
back write-off
Provision 67,057,880.24 23,723,654.41 90,781,534.65
for bad
debts
accrued by
portfolio
Total 67,057,880.24 23,723,654.41 90,781,534.65
Among them, significant amount of bad-debt provision written back or withdrawn in the current period:
□ Applicable √ Not applicable
(5). Other receivables actually written off in the current period
□ Applicable √ Not applicable
Annual Report 2022
(6). Other receivables of the top five ending balances collected by debtor
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
As a proportion
Provision for
Company Nature of Account of total ending
Ending balance bad debts
name payment age balance in other
Ending balance
receivables (%)
Hongkong Suspense 153,873,588.89 [Note 1] 66.22 67,594,364.92
Xinghuo payment
Industry receivables
Limited
BOYA Suspense 35,629,920.00 [Note 2] 15.33 9,765,696.00
(Hong Kong) payment
Investment receivables
Management
Co., Limited
Wuxing Security 13,493,392.00 [Note 3] 5.81 4,048,017.60
District deposits
Daixi Town
People's
Government
of Huzhou
City
Hangzhou Suspense 10,000,000.00 [Note 4] 4.30 1,750,000.00
Xiake Bar payment
Catering receivables
Management
Co., Ltd.
Hangzhou Suspense 5,238,815.82 [Note 5] 2.25 1,186,940.79
Yizhuo payment
Culture receivables
Media Co.,
Ltd.
Total / 218,235,716.71 / 93.91 84,345,019.31
[Note 1] RMB18,603,298.35 with the account age within 1 year, RMB4,854,726.35 with the account age
of 1-2 years, and RMB130,415,564.19 with the account age of 2-3 years
[Note 2] RMB3,693,120.00 with the account age within 1 year, and RMB31,936,800.00 with the account
age of 1-2 years
[Note 3] RMB13,493,392.00 with the account age of 1-2 years
[Note 4] RMB5,000,000.00 with the account age within 1 year, RMB5,000,000.00 with the account age
of 1-2 years
[Note 5] RMB1,538,815.82 with the account age within 1 year, RMB3,700,000.00 with the account age
of 1-2 years
(7). Receivables involving government subsidies
□ Applicable √ Not applicable
Annual Report 2022
(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 explanations:
□ Applicable √ Not applicable
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Ending balance Opening balance
Item Carrying Impairment Book Carrying Impairment
Book value
amount provision value amount provision
Investments 304,354, 42,500,000. 261,854,99 229,119,013. 42,500,000. 186,619,013.
in 996.61 00 6.61 03 00 03
subsidiaries
Investments 213,909, 81,442,213. 132,466,95 178,054,996. 14,670,468. 163,384,527.
in associates 167.02 22 3.80 05 59 46
and joint
ventures
Total
(1). Investments in subsidiaries
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Impairment
Ending
provision
Opening Current Current Ending balance of
Invested entity accrued in
balance increase decrease balance impairment
the current
provisions
period
Hangzhou 30,772,98 1,468,070.77 32,241,05
Proya Trade 8.32 9.09
Co., Ltd.
Hanna 2,094,048 2,094,048.
Cosmetics Co., .00 00
Ltd.
Zhejiang 14,956,87 11,956,545.55 26,913,42
Meiligu 7.14 2.69
Electronic
Annual Report 2022
Commerce Co.,
Ltd.
Yueqing Laiya 1,000,000 1,000,000.
Trading Co., .00 00
Ltd.
Hapsode 42,500,00 42,500,00 42,500,000
(Hangzhou) 0.00 0.00 .00
Cosmetics Co.,
Ltd.
Mijing Siyu 18,000,00 18,000,00
(Hangzhou) 0.00 0.00
Cosmetics Co.,
Ltd.
Huzhou 5,460,276 5,460,276.
UZERO .70 70
Trading Co.,
Ltd.
Huzhou Niuke 3,500,000 3,500,000.
Technology Co., .00 00
Ltd.
Hangzhou 5,000,000 5,000,000.
Proya .00 00
Commercial
Management
Co., Ltd.
Huzhou 20,308,16 1,085,313.00 21,393,47
Younimi 3.00 6.00
Cosmetics Co.,
Ltd.
Shanghai 5,400,000 529,948.75 5,929,948.
Zhongwen .00 75
Electronic
Commerce Co.,
Ltd.
Korea Younimi 5,046,455 5,046,455.
Cosmetics Co., .61 61
Ltd.
HongKong 24,736,49 24,736,49
Keshi Trading 1.00 1.00
Limited
Hongkong 10,185,92 10,185,92
Xinghuo 4.00 4.00
Industry
Limited
Annual Report 2022
Ningbo 15,902,20 45,428,469.19 61,330,66
TIMAGE 0.00 9.19
Cosmetics Co.,
Ltd.
Ningbo Keshi 520,000.0 520,000.0
Trading Limited 0 0
Zhejiang Beute 10,181,98 10,181,98
Cosmetics Co., 3.21 3.21
Ltd.
Ningbo Proya 5,353,606 14,204,881.28 19,558,48
Enterprise .05 7.33
Consulting
Management
Co., Ltd.
Hangzhou 1,000,000 1,000,000.
Yizhuo Culture .00 00
Media Co., Ltd.
Hangzhou 2,400,000 1,500,000.00 3,900,000.
Oumisi Trading .00 00
Co., Ltd.
Guangzhou 1,000,000 1,000,000.
Qianxi Network .00 00
Technology Co.,
Ltd.
Zhejiang 1,100,000 550,000.00 1,650,000.
Qingya Culture .00 00
Art
Communication
C
Huzhou Boyun 1,200,000 1,200,00
Electronic .00 0.00
Commerce Co.,
Ltd.
Hangzhou 500,000.0 500,000.0
Weiluoke 0 0
Cosmetics Co.,
Ltd.
Xuzhou Proya 500,000.0 500,000.
Information 0 00
Technology Co.,
Ltd.
Singuladerm 500,000.0 500,000.0
(Hangzhou) 0 0
Cosmetics Co.,
Ltd.
Annual Report 2022
Proya (Hainan) 100,000.00 100,000.0
Cosmetics Co., 0
Ltd.
Hangzhou 112,755.04 112,755.0
TIMAGE 4
Cosmetics Co.,
Ltd.
Total
(2). Investments in associates and joint ventures
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Current changes
Recognized
Declared Ending
investment Other
Investment Opening Other payment Ending balance of
Additional Investment gain and comprehensive Impairment
Unit balance changes of cash Other balance impairment
investment decrease loss under income provision
in equity dividends provisions
equity adjustments
or profits
method
I. Joint Venture
Huzhou 3,074,758. -5,810.52 3,068,94
Panrui 68 8.16
Industry
Investment
Partnership
(Limited
Partnership)
Subtotal 3,074,758. -5,810.52 3,068,94
II. Affiliate
Xiongke 2,789,460. - 2,649,61
Culture 66 139,840.96 9.70
Media
(Hangzhou)
Co., Ltd.
Jiaxing 72,681,733 41,003,609 - 111,253,
Woyong .38 .10 2,432,120.5 221.93
Investment 5
Partnership
(Limited
Partnership)
Zhuhai 79,413,882 - 66,771,744. 10,576,2 81,442,213.2
Healthlong .37 2,065,839.0 63 98.67 2
Biotechnolo 7
gy Co., Ltd.
Beijing 5,424,692. - 4,918,86
Xiushi 37 505,827.03 5.34
Culture
Developmen
t Co., Ltd.
Subtotal 160,309,76 41,003,609 - 66,771,744. 129,398, 81,442,213.2
Annual Report 2022
Total 7.46 .10 5,149,438.1 63 953.80 2
Other explanations:
None
(1). Information of operating revenue and costs
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount incurred in the current Amount incurred in the previous
Item period period
Revenue Cost Revenue Cost
Main business 3,061,899,622.39 1,407,736,680.98 2,239,048,621.69 1,059,535,186.57
Other business 19,237,314.36 16,988,430.02 34,799,744.81 17,291,073.35
Total 3,081,136,936.75 1,424,725,111.00 2,273,848,366.50 1,076,826,259.92
(2). Information of income generated by the contract
□ Applicable √ Not applicable
(3). Explanation on performance obligations
□ Applicable √ Not applicable
(4). Explanation on remaining performance obligations allocated
□ Applicable √ Not applicable
Other explanations:
Breakdown of revenue by major categories
Main product type Amount
Products sales 3,063,670,101.01
Other 17,466,835.74
Subtotal 3,081,136,936.75
Amount for the current Amount for the same
Item
period period last year
Income recognized at a certain point 3,063,670,101.01 2,240,732,805.87
Income recognized over a period 17,466,835.74 33,115,560.63
Subtotal 3,081,136,936.75 2,273,848,366.50
is RMB28,108,787.35.
Annual Report 2022
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Amount incurred in the Amount incurred in the
Item
current period previous period
Long-term equity investment income
calculated by the cost method
Long-term equity investment income -5,149,438.13 -7,608,313.87
calculated by the equity method
Investment income from disposal of 988,000.42 -10,959,118.90
long-term equity investment
Investment income of held-for-trading
financial assets during the holding
period
Dividend income from other equity
instrument investments during the
holding period
Interest income from debt investment
during the holding period
Interest income from other debt
investments during the holding period
Investment income from disposal of
held-for-trading financial assets
Investment income from disposal of
other equity instrument investments
Investment income from disposal of
debt investment
Investment income from disposal of
other debt investments
Gains of debt restructuring
Total -4,161,437.71 -18,567,432.77
Other explanations:
None
□ Applicable √ Not applicable
XVIII. Supplementary Information
√ Applicable □ Not applicable
Unit: Yuan Currency: RMB
Item Amount Note
Annual Report 2022
Gains or losses from disposal of non-current assets 60,155.60
Tax refund and reduction with ultra vires approval or
without formal approval documents
Government subsidies included in the current profit or loss
(except those that are closely related to the enterprise's
business and granted on a basis of quota or quantitative
amount in accordance with the national unified standards)
Capital occupation fees charged to the non-financial
enterprises and included in profit or loss for the current
period
Gains when the investment cost of acquiring a subsidiary,
an associate and a joint venture is less than the fair value
of the identifiable net assets of the invested entity
Gains or losses from exchange of non-monetary assets
Gains or losses from entrusting others with investment or
asset management
Asset impairment provision accrued for force majeure
such as natural disasters
Gains or losses from debt restructuring
Enterprise restructuring fees, such as staffing expenses and
integration fees
Profit and loss of the part exceeding fair value generated
from transaction with unreasonable transaction price
Current net gains or losses of subsidiaries established by
business combination involving enterprises under
common control from the beginning of the period to the
combination date
Gains or losses on contingencies that have no relation with
the normal operation of the Company
Gains or losses from change in fair value by held-for-
trading financial assets, derivative financial assets, held-
for-trading financial liabilities and derivative financial
liabilities, and investment income from disposal of held-
for-trading financial assets, derivative financial assets,
held-for-trading financial liabilities, derivative financial
liabilities and other debt investments, excluding the
effective hedging businesses related with normal
operations of the Company
Reversal of impairment provisions of accounts receivable
and contract assets that have undergone impairment test 2,782,350.76
alone
Gains or losses from outward entrusted loaning
Gains or losses from changes in the fair values of
Investment real estate that are subsequently measured
using the fair value model
Annual Report 2022
Impact of a one-time adjustment on current profit and loss
according to the requirements of tax and accounting laws
and regulations
Custody fees of entrusted operation
Other non-operating revenue and expenses besides the
-2,926,959.81
above items
Other items that conform to the definition of non-recurring
profit or loss
Less: Effect of income tax 3,689,885.55
Affected amount of minority shareholders' equity 5,802,406.15
Total 28,886,986.92
The reasons should be explained for the non-recurring gains and losses items defined by the Company
according to the definition of Explanatory Announcement on Information Disclosure for Companies
Offering Their Securities to the Public No.1 - Non-recurring Gains and Losses, and the non-recurring
profit and loss items listed in Explanatory Announcement on Information Disclosure for Companies
Offering Their Securities to the Public No.1 - Non-recurring Gains and Losses as recurring gains and
losses items.
□ Applicable √ Not applicable
√ Applicable □ Not applicable
Earnings per share
Weighted average
Profit during the Reporting Period Basic earnings Diluted earnings per
ROE (%)
per share share
Net profits attributable to ordinary
shareholders of the Company
Net profits attributable to ordinary
shareholders of the Company after
deducting non-recurring gains and
losses
□ Applicable √ Not applicable
□ Applicable √ Not applicable
Chairman: HOU Juncheng
Date of submission approved by the Board of Directors: April 19, 2023
Revision information
□ Applicable √ Not applicable
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