珀萊雅：珀萊雅化妝品股份有限公司2024年半年度報告（英文版）.PDF

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1、Semi-Annual Report 2024 1/258 Stock Code:603605 Stock Abbreviation:Proya Bond Code:113634 Bond Abbreviation:Proya Convertible Bond Proya Cosmetics Co.,Ltd.Semi-Annual Report 2024 Semi-Annual Report 2024 2/258 Important Notes I.The Board of Directors,Board of Supervisors,directors,supervisors and sen

2、ior management of the Company warrant that the content of the Semi-Annual Report is authentic,accurate and complete,free from false records,misleading statements and major omissions,and shall be jointly and severally liable therefore.II.All directors of the Company attended the meeting of the Board

3、of Directors.III.The Semi-Annual Report has not been audited.IV.HOU Juncheng,chairman of the Company,and WANG Li,CFO,person in charge of Accounting Department(and Head of the Accounting Department)of the Company represent and warrant that the financial report in the Semi-Annual Report is authentic,a

4、ccurate and complete.V.The profit distribution plan or the plan for capitalization of capital reserves for the Reporting Period approved by the Board of Directors No profit distribution plan or the plan for capitalization of capital reserves during the Reporting Period.VI.Disclosure of risks involve

5、d in forward-looking statements Applicable Not applicable The Report contains forward-looking statements which involve the future plans,development strategies,etc.of the Company,yet do not constitute substantive undertakings of the Company to investors.Investors should exercise caution prior to maki

6、ng investment decisions.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 IX.Whether the majority of the directors are unabl

7、e to warrant the authenticity,accuracy and completeness of the Semi-Annual Report disclosed by the Company No X.Disclosure of major risks The Company has disclosed the existing risks in details in this Report.Refer to“(I)Possible risks”,“V.Other Disclosures”,“Section III Management Discussion and An

8、alysis”.XI.Others Applicable Not applicable Semi-Annual Report 2024 3/258 Contents Section I Definitions.4 Section II Company Profile and Key Financial Indicators.4 Section III Management Discussion and Analysis.8 Section IV Corporate Governance.24 Section V Environmental and Social Responsibility.2

9、6 Section VI Important Matters.28 Section VII Shareholders and Changes in Shares.81 Section VIII Information on Preference Shares.86 Section IX Information on Bonds.87 Section X Financial Report.93 Documents Available for Inspection Financial statements signed and sealed by the Legal Representative,

10、CFO,and person in charge of Accounting Department of the Company Original copies of all documents and announcements of the Company disclosed during the Reporting Period in newspapers designated by China Securities Regulatory Commission Semi-Annual Report 2024 4/258 Section I Definitions In this Repo

11、rt,unless the context otherwise requires,the following terms have the following meanings:Definition Proya Cosmetics,this Company,or the Company refers to Proya Cosmetics Co.,Ltd.CSRC refers to China Securities Regulatory Commission SSE refers to Shanghai Stock Exchange Articles of Association refers

12、 to Articles of Association of Proya Cosmetics Co.,Ltd.RMB/RMB0,000 refers to RMB/RMB 0,000 Section II Company Profile and Key Financial Indicators I.Company Information Chinese name of the Company 珀萊雅化妝品股份有限公司 Abbreviation of the Chinese name 珀萊雅 English name of the Company Proya Cosmetics Co.,Ltd.

13、Abbreviation of the English name Proya Legal representative of the Company HOU Juncheng II.Contact Details Board Secretary Securities Affairs Representative Name WANG Li WANG Xiaoyan Mailing address 10/F,Proya Building,No.588 Xixi Road,Xihu District,Hangzhou City,Zhejiang Province 10/F,Proya Buildin

14、g,No.588 Xixi Road,Xihu District,Hangzhou City,Zhejiang Province Telephone 0571-87352850 0571-87352850 Fax 0571-87352813 0571-87352813 Email III.Changes in General Information Registered address No.588 Xixi Road,Liuxia Neighborhood,Xihu District,Hangzhou City,Zhejiang Province Historical changes in

15、the Companys registered address For details,please refer to the Announcement on Revision of the Articles of Association and Change in Business Registration(Announcement No.2019-008)disclosed by the Company in the designated information disclosure media on February 27,2019 Office address of the Compa

16、ny Proya Building,No.588 Xixi Road,Xihu District,Hangzhou City,Zhejiang Province Postal code of the registered office address 310023 Company website http:/www.proya- Email Semi-Annual Report 2024 5/258 Index changes during the Reporting Period Not applicable IV.Changes in Information Disclosure and

17、Places for Inspection Name of designated newspapers for information disclosure by the Company Shanghai Securities News,Securities Times,China Securities Journal,Securities Daily,Economic Information Daily,China Daily Website for the publication of the Semi-Annual Report http:/ Place for inspection o

18、f the Semi-Annual Report of the Company Board of Directors Office,Proya Building,No.588 Xixi Road,Xihu District,Hangzhou City,Zhejiang Province Index changes during the Reporting Period Not applicable V.Stock Overview Stock class Stock exchange Stock abbreviation Stock code Stock abbreviation before

19、 changes A share Shanghai Stock Exchange Proya 603605 None VI.Other Relevant Information Applicable Not applicable VII.Key Accounting Data and Financial Indicators of the Company(I)Key accounting data Unit:Yuan Currency:RMB Key accounting data In the Reporting Period(January-June)Same period of prio

20、r year Year-on-year change(%)Operating revenue 5,001,465,470.72 3,626,991,878.22 37.90 Net profit attributable to shareholders of the listed company 701,671,374.89 499,493,997.71 40.48 Net profit attributable to shareholders of the listed company,net of non-recurring gains and losses 678,996,518.33

21、478,891,852.27 41.78 Net cash flows from operating activities 662,102,794.39 1,181,268,072.03-43.95 End of the Reporting Period End of prior year Change as at the end of the Reporting Period over the end of prior year(%)Net assets attributable to shareholders of the listed company 4,541,679,882.42 4

22、,349,545,381.60 4.42 Semi-Annual Report 2024 6/258 Total assets 7,362,862,729.83 7,323,078,222.45 0.54 (II)Key financial indicators Key financial indicators In the Reporting Period(January-June)Same period of prior year Year-on-year change(%)Basic earnings per share(RMB/share)1.78 1.25 42.40 Diluted

23、 earnings per share(RMB/share)1.72 1.24 38.71 Basic earnings per share after deducting non-recurring gains and losses(RMB/share)1.72 1.20 43.33 Weighted average ROE(%)15.34 13.29 Up by 2.05 percentage points Weighted average ROE after deducting non-recurring gains and losses(%)14.85 12.74 Up by 2.11

24、 percentage points Notes to key accounting data and financial indicators Applicable Not applicable VIII.Differences in Accounting Data under Chinese and International Accounting Standards Applicable Not applicable IX.Items and amounts of non-recurring gains and losses Applicable Not applicable Unit:

25、Yuan Currency:RMB Non-recurring gains and losses item Amount Notes(if applicable)Gains or losses from disposal of non-current assets,including write-offs of provision for asset impairment accrued-712,859.58 Government grants included in current profit or loss(excluding government grants that are clo

26、sely related to the Companys normal business operations,compliant with national policies,granted at set standards,and imposing sustaining influence on the Companys profit or loss)41,996,899.59 Gains or losses from change in fair value generated by financial assets and financial liabilities held by n

27、on-financial businesses as well as gains or losses from disposal of financial assets and financial liabilities,except for valid hedging business related to the Companys normal business operations Capital occupation fees charged to non-financial enterprises and included in current profit or loss Gain

28、s or losses on authorizing others to invest or manage Semi-Annual Report 2024 7/258 Non-recurring gains and losses item Amount Notes(if applicable)assets Gains or losses from outward entrusted loaning Asset loss incurred by force majeure such as natural disasters Reversal of provision for impairment

29、 of accounts receivable individually tested for impairment Gains when the investment cost of acquiring a subsidiary,an associate or a joint venture is less than the fair value of the identifiable net assets of the invested entity Current net gains or losses of subsidiaries established by business co

30、mbination under common control from the beginning of the period to the combination date Gains or losses from exchange of non-monetary assets Gains or losses from debt restructuring One-time expenses incurred due to the cessation of relevant business activities,such as staffing expenses One-time impa

31、ct on current gains or losses due to the adjustments of taxes and accounting laws and regulations One-time share-based payment recognized for cancellation and modification of equity incentive plans Gains or losses from changes in the fair value of employee compensation payable for share-based paymen

32、t in cash after the exercise date Gains or losses arising from changes in the fair value of investment property subsequently measured with the fair value model Gains arising from transactions with unreasonable transaction price Gains or losses arising from contingencies unrelated to the Companys nor

33、mal operations Custody fee income from entrusted operations Other non-operating revenue and expenses besides the above items-474,557.25 Other items that conform to the definition of non-recurring gains and losses Less:Effect of income tax 10,032,617.51 Impact of minority interests(after tax)8,102,00

34、8.69 Total 22,674,856.56 The reasons should be explained for the Company defining items not listed in the Explanatory Announcement on Information Disclosure for Companies Offering Their Securities to the Public No.1 Non-Recurring Gains and Losses as non-recurring gains and losses items of high value

35、 and defining the non-recurring gains and losses items listed in the same document as recurring gains and losses items.Applicable Not applicable Semi-Annual Report 2024 8/258 X.Others Applicable Not applicable Section III Management Discussion and Analysis I.Description of the Industry in Which the

36、Company Operates and Primary Businesses of the Company during the Reporting Period(I)Primary 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,

37、Off&Relax,Hapsode,CORRECTORS,INSBAHA,UZERO and Anya.The Companys own brands have covered fields such as popular exquisite skincare,make-up,body&hair,and high-efficiency skincare:1.Popular exquisite skincare brand(1)Proya,focusing on technology skincare,designed for young white-collar female customer

38、s,generally priced at RMB200 to RMB500,sold both online and offline.(2)Hapsode,positioned as an“expert in oily skin care”,focusing on college students and other young female customers,generally priced at RMB50 to RMB200,sold mainly online.2.Make-up brand TIMAGE,a professional make-up artist brand cu

39、stomized for Chinese faces,generally priced at RMB150 to RMB300,sold mainly online.3.Body&hair brand Off&Relax,positioned as an“expert in Asian scalp health care”,generally priced at RMB150 to RMB200,sold mainly online.4.High-efficiency skincare brand CORRECTORS,a high-efficiency skincare brand,gene

40、rally priced at RMB260 to RMB600,sold online.(II)Business models 1.Sales models Mainly online sales,supplemented by offline sales.Online sales are mainly operated through direct sales and distribution.Direct sales are mainly carried out through platforms such as Tmall,Douyin,JD,Kwai,and Pinduoduo,an

41、d distribution is based on platforms such as Taobao,JD,and Vipshop.Offline sales are mainly operated through dealers.Channels include cosmetics franchise stores and department stores.2.Production/R&D models Self-production is the main production model of the Company,supplemented by OEM production.Th

42、e skincare products of the Company are mainly self-produced while make-up products adopt both self-production and OEM production.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

43、 Company maintains R&D cooperation with front-end research institutions and high-quality raw material suppliers including Zhejiang University,Zhejiang University of Technology,Hangzhou Dianzi University,Jiangnan University,Beijing Technology and Business University,BASF China,Ashland China,DSM Shang

44、hai,CRODA China,Evonik China,Spanish LIPOTRUE,S.L.,and Shenzhen Siyomicro Bio-tech.Semi-Annual Report 2024 9/258(III)Industry overview According to the Guidelines for the Industry Classification of Listed Companies issued by the CSRC,the Company falls under chemical raw material and chemical product

45、 manufacturing(classification code:C26);according to Industrial Classifications for National Economic Activities(GB/T 4754-2017),the Company falls under daily chemical product manufacturing(C268),and further falls under cosmetics manufacturing(C2682).According to statistics from the National Bureau

46、of Statistics,from January to June 2024,the total retail sales of consumer goods reached RMB23,596.9 billion,a YOY increase of 3.7%;the total retail sales of cosmetics reached RMB216.8 billion,a YOY increase of 1.0%(the retail sales value from the businesses above designated units).II.Analysis of Co

47、re Competitiveness during the Reporting Period Applicable Not applicable Facing the rapidly changing external market,the Company was firmly committed to the leadership and implementation of the 6*N Strategy.We consolidated and deepened precise operation management system highlighting“R&D,products,co

48、ntents,operation”,supplemented by a self-driven organization structure featuring“culture-strategy-mechanism-talents”.We flexibly responded to market development and changes,rapidly established our presence and invested in emerging channels.Meanwhile,we explored overseas development opportunities,sei

49、zed the chance for Chinese brands to expand globally,and drove business growth with an expanded market scope and enhanced responsiveness.With a keen insight into consumers needs,the Company continued to sharpen the strengths of hero products,as well as build and improve the matrix of core hero produ

50、cts based on our strong competence in R&D and backed by our quick-response internal organizational capabilities.In doing so,the Company kept expanding our brand appeal and vitality.A self-driven agile organization was built to serve the second tier brands and the brands at the incubation stage,formi

51、ng a fledgling brand matrix in skincare,make-up,and personal care products.By building our own MCN team and content marketing team,the Company strengthened the internal circular ecology and fostered the external ecosystem of Proya brand.III.Business Discussion and Analysis(I)Financial analysis 1.Yea

52、r-on-year growth in operating revenue Operating revenue amounted to RMB5.001 billion,up by 37.90%YOY Including:primary operating revenue was RMB4.994 billion,up by 37.99%YOY Other operating revenue was RMB7 million Primary operating revenue:(1)By channel By channel Amount(RMB100 million)Change in H1

53、 2024 YOY(%)Change in 2023 YOY(%)Change in 2022 YOY(%)Change in 2021 YOY(%)Proportion of H1 2024(%)Proportion of 2023(%)Proportion of 2022(%)Proportion of 2021(%)Online Direct sales 37.24 40.01 50.70 59.79 76.16 74.56 75.91 70.40 60.66 Distribution 9.56 42.52 16.49 16.79 8.56 19.13 17.16 20.58 24.27

54、 Subtotal 46.80 40.52 42.96 47.50 49.54 93.69 93.07 90.98 84.93 Offline Cosmetics stores 2.23-7.66 11.59-11.96-40.52 4.46 5.56 6.96 10.88 Others 0.91 92.29-6.98-32.32-30.50 1.85 1.37 2.06 4.19 Semi-Annual Report 2024 10/258 Subtotal 3.14 8.85 7.35-17.62-38.03 6.31 6.93 9.02 15.07 Total 49.94 37.99 3

55、9.74 37.69 23.28 100.00 100.00 100.00 100.00 Note:The proportion of sales revenue from each channel is as the percentage of primary operating revenue.(2)By brand By brand Amount(RMB100 million)Change in H1 2024 YOY(%)Change in 2023 YOY(%)Change in 2022 YOY(%)Change in 2021 YOY(%)Proportion of H1 202

56、4(%)Proportion of 2023(%)Proportion of 2022(%)Proportion of 2021(%)Self-owned brands Proya 39.81 37.67 36.36 37.46 28.25 79.71 80.73 82.74 82.87 TIMAGE 5.82 40.57 75.06 132.04 103.48 11.66 11.26 8.99 5.33 OR 1.38 41.91 71.17 509.93-2.76 2.42 1.98-Hapsode 1.61 22.35 61.82 188.27-3.22 3.41 2.94-Other

57、brands 1.32 56.29 18.86-60.11-5.96 2.65 2.18 2.57 8.85 Subtotal 49.94 37.99 40.86 40.74 26.63 100.00 100.00 99.22 97.05 Agency brands Cross-border agency brands 0.00-100.00-63.01-34.04 0.00 0.00 0.78 2.95 Total 49.94 37.99 39.74 37.69 23.28 100.00 100.00 100.00 100.00 Note:The proportion of sales re

58、venue from each brand is as the percentage of primary operating revenue.The revenue from OR and Hapsode was incorporated into that of other brands for 2021 and prior years,but has been shown separately since 2022.(3)By category Category Amount(RMB100 million)Change in H1 2024 YOY(%)Change in 2023 YO

59、Y(%)Change in 2022 YOY(%)Change in 2021 YOY(%)Proportion of H1 2024(%)Proportion of 2023(%)Proportion of 2022(%)Proportion of 2021(%)Skincare(including cleansing)41.91 37.12 37.85 38.56 22.70 83.91 85.03 86.20 86.10 Make-up 6.65 42.84 48.28 21.70 32.97 13.32 12.55 11.82 13.38 Body&hair 1.38 42.26 71

60、.17 509.93-2.77 2.42 1.98-Others 0.00-100.00-41.05 0.00 0.00 0.00 0.52 Total 49.94 37.99 39.74 37.69 23.28 100.00 100.00 100.00 100.00 Note:The sales revenue from body&hair products was included in the“Skincare(including cleansing)”category for 2021 and prior years,but has been shown separately sinc

61、e 2022.2.Year-on-year growth in net profit Net profit attributable to shareholders of the listed company amounted to RMB702 million,up by 40.48%YOY Net profit attributable to shareholders of the listed company net of non-recurring profit and loss amounted to RMB679 million,up by 41.78%YOY Semi-Annua

62、l Report 2024 11/258 Indicator H1 2024 2023 2022 2021 Notes 1.Net profit margin 14.47%13.82%13.02%12.02%Mainly due to the increased operating revenue and reduced administrative expense ratio.2.Gross profit margin 69.82%69.93%69.70%66.46%3.Sales expense ratio 46.78%44.61%43.63%42.98%Mainly due to the

63、 increased payment for image promotion fees.Including:Image promotion fee ratio 41.25%39.69%37.90%36.12%4.Administrative expense ratio 3.54%5.11%5.13%5.12%Mainly due to the decreased share-based payment expenses.5.R&D expense ratio 1.89%1.95%2.00%1.65%The parent companys R&D expense ratio was 3.82%f

64、or January to June 2024(compared with 5.10%for the same period last year)6.Accounts receivable turnover rate(times)40.40 39.87 53.04 21.88 7.Accounts receivable turnover days(days)8.91 9.03 6.79 16.45 8.Inventory turnover rate(times)4.08 3.65 3.46 3.39 9.Inventory turnover days(days)88.20 98.57 103.

65、91 106.19 (II)Analysis of business operations 1.New product strategy Proya:During the Reporting Period,Proya continued to consolidate the“hero product strategy”,focusing on upgrading hero products of the“Advanced Firming Nourishing Series”and“Advanced Original Repair Series”.The worlds exclusive inn

66、ovative ingredient“Recombinant Collagen Type XVII”was firstly applied in“Advanced Original Repair Cream 2.0”,further solidifying the brands expertise in basal membrane repair and anti early-aging.In“Advanced Firming Nourishing Essence 3.0”,Proya applied“cyclic peptide”,the first patented raw materia

67、l of the Chinese beauty industry,together with the special“Retinol+HPR”formula,and also adopted exclusive collagen activation technology,thus achieving advanced anti-wrinkle effects.Proya also launched a brand new product line,the“Sebum Control Purifying Series”,which marked a scientifically efficie

68、nt solution for various oily skin issues by utilizing the exclusive oil-control technology“SeboPlex”and new fermented extracts.Additionally,Proya rolled out the“Illuminating Skin-Purifying Series”and a new-edition of Sun Around Protective Shield Sunscreen Serum,further expanding the brands offerings

69、 in the brightening and sun protection categories.Semi-Annual Report 2024 12/258 In the first half of 2024,Proya maintained its leading position in the essence and cream categories on Tmall,ranking first in both.Proya ranked second in sheet masks and facial care sets,and fourth in eye creams.The mar

70、ket shares for all core categories saw significant growth.TIMAGE:During the Reporting Period,TIMAGE continued to consolidate the hero product matrix in the facial make-up category,and made further efforts on base makeup front.Some new single products were launched,such as Porcelain Yarn Glow Pressed

71、 Powder,Balanced Soft Cushion Foundation and Concealer(For mixed skin),Cream Foundation for Dry Skin,and Vigorous and Flowing Jade Essence Glossy Lipstick.The“Small Round Liquid Foundation”continued to maintain strong growth across all channels.During the“618”shopping festival,it ranked first in the

72、 foundation category on Tmall among all domestic products,and third in the whole foundation category.The“Porcelain Yarn Glow Pressed Powder”rushed to eighth in the powder category on Tmall.In the first half of 2024,TIMAGE core hero products all ranked top in all categories.Among them,the“Tri-colored

73、 Contour Palette”ranked first in the highlighter category on Tmall;the“Dual-colored Highlighter Palette”ranked second in the highlighter category on Tmall;the“Master Make-up Primer”ranked first in the sun block/primer category on Tmall;the“Tri-colored Concealer Palette”ranked first in the concealer

74、category on Tmall;and the“Tri-colored Blush Palette”ranked first in the blush category on Tmall.Off&Relax(OR):During the Reporting Period,Off&Relax deepened its brand image of an“Expert in Asian Scalp Health Care”.The brand continued to increase the consumer penetration of the hero product“OR Refres

75、h Spa Shampoo”in an effort to make it be recognized by more people.Meanwhile,Off&Relax launched oil-control shampoos and repair shampoos for the second tier of hair care products,striving to expand the market shares of core categories.Additionally,Off&Relax endeavored to stabilize the ranking of its

76、 hair care series-hair mask category,and mainly promoted the new product OR Soft&Shine Hair Oil.During the“618”shopping festival,OR Soft&Shine Hair Oil ranked top 10 among the hair care essential oils on Tmall.In the first half of 2024,Off&Relax kept improving its brand image of professionalism.The“

77、OR Purifying Scalp Cleanser”ranked first in the pre-shampoo category on Tmall,with a market share of more than 10%in this category.The second hero product“OR Medicated Hair Tonic”ranked second in the scalp essence best seller list on Tmall during the“618”shopping festival in 2024.Hapsode:During the

78、Reporting Period,Hapsode continued to deepen its brand recognition as an“Expert in Oily Skin Care”.Co-branding with Loopy,an IP popular among young people,Hapsode rolled out Loopy limited edition of cleansing products(including Purifying Watery Cleansing Foam,Pore Purely Cleansing Mud Mask,Purifying

79、 Moisture Cleansing Mousse,Soft Purifying Cleansing Balm).Hapsode also launched a campaign with the theme of“Real me,So loopy”,hoping that the brand will become a sincere companion of young users in their daily lives.During the“38”shopping festival,the limited edition of Pore Purely Cleansing Mud Ma

80、sk ranked first in both the“Tmalls Mud Mask Positive Feedback List”and“Mud Mask Repurchase List”.In the first half of 2024,the Ultra Soothing Serum achieved high growth in sales,earned a reputation of good efficacy for Hapsode.Some other products were newly launched,such as Anti-Acne Clarifying Seru

81、m,Soft Purifying Cleansing Balm,and Cloud Watery Sunscreen(upgraded).Semi-Annual Report 2024 13/258 2.New marketing strategy Proya:During the Reporting Period,Proya followed its brand strategy around two brand keywords:“youthfulness”and“technological prowess”.Embracing the“spirit of exploration”,the

82、 brand has addressed the multifaceted factors behind specific skin concerns.The following brand marketing initiatives have been undertaken:(1)“Thank You for Remembering”in January.In this event,Proya specially launched Thank you for remembering,a short film inspired by our users true stories.At the

83、same time,the MV for its theme song,Shufen,was released,showcasing the journey of a little girl named Tiantian as she searches for her grandmother,Shufen.The story conveys warmth,strength,and love.A user story exhibition themed Thank You for Remembering was held at Liuxia Metro Station in Hangzhou t

84、o expand the core of“thankfulness”and express our gratitude to users for their“remembering”.(2)“Infinite Space”Offline Pop-Up Event in March.In this event,Proya made the debut of its five“Infinite Space”pop-up stores simultaneously in Shanghai,Hangzhou,Chongqing and Chengdu.This event opened a new j

85、ourney of discovery for“Scientific Formulation,the Scientific Choice for Skin”along with users.(3)“Its Gender,Not Border”on Womens Day in March.In this event,Proya specially launched a TVC:We Are Just Different.In the silhouettes of more womens lives,people can see their courage in confronting“preju

86、dice”,and learn their occupations,hobbies,ages,identities,and lifestyles.(4)The“Proya Empty Bottles Recycling Program”on May Day Holiday.In this event,Proya joined hands with the eco-friendly brand“Wuyuzaisheng”,a leader in sustainable lifestyle aesthetics,to launch the“Proya Empty Bottles Recycling

87、 Program”.This program aimed to integrate the concept of scientific skincare into daily life together with users,and to find out more possibilities of sustainable living.(5)On Mothers Day in May,Proya released the short film Do You Hear.In this event,Proya showed that mothers are overshadowed by the

88、 judgments of others,highlighting their voicelessness in the role of“being a mom”.It calls on the public to recognize the struggles that mothers are facing and they can be what they want to be.TIMAGE:During the Reporting Period,TIMAGE continued to carry out marketing activities by following the“Chin

89、ese make-up,original beauty”brand philosophy.By launching and marketing new products through e-commerce channels,TIMAGE carried out the following marketing events to enrich the core of Chinese aesthetics:(1)In January,TIMAGE officially announced its first brand ambassador,CHEN Duling,and released a

90、series of conceptual films and print ads.TIMAGE aimed to enhance the overall brand visibility and break through to new audiences,presenting the brands makeup effects to consumers.Leveraging the influence of the celebrity,TIMAGE expanded the appeal of the“Small Round Liquid Foundation”,and reinforced

91、 consumers impression of TIMAGE as“a professional makeup artist brand”.The product has repeatedly trending across all platforms.(2)In March,TIMAGE launched the limited edition“TIMAGE&SUMMER PALACE”series.In collaboration with the national IP of“Summer Palace”,TIMAGE gave four hero products a new loo

92、k and elevated the brands aesthetic to new level.Online,TIMAGE released a new video of CHEN Duling,where she looks stunning wearing a fresh and unique makeup with mint green eyeshadow and watery lip effect.This further reinforced the products image,makeup style and application techniques,acceleratin

93、g the establishment of brand perception for base makeup.Offline,TIMAGE held the“TIMAGE&Semi-Annual Report 2024 14/258 SUMMER PALACE”series launch event at the Summer Palace in Beijing on March 25,attended by our brand founder Mr.TANG Yi,TIMAGEs brand ambassador CHEN Duling,and celebrity makeup artis

94、ts.TIMAGE also broadcasted the entire event live on TIMAGEs Tmall livestream channel on Tmall Super Brand Day,boosting the overall brand visibility and sales.(3)In May,TIMAGE traced the origin of Celadon series,drawing inspiration from porcelain for makeup.Mr.MENG Qingyang and the brand founder Mr.T

95、ANG Yi were invited to co-star in a brand documentary themed around celadon,creating the concept of“Chinese Celadon Base Makeup”and showcasing the Chinese aesthetics expressed through the brand.With“Little Round Liquid Foundation”as the core hero product,TIMAGE continued to build market awareness an

96、d product reputation.3.New channel strategy Proya:Online:(1)Tmall flagship store During the Reporting Period,the Company continuously increased the market penetration of brand hero products.To capture more market share,we increased efforts to promote product kits,and introduced new categories and pr

97、oducts,such as Sebum Control Purifying Lotion and the Energy Series.We enhanced customer perception,and coordinated both on-site and off-site efforts to offer customers exclusive products,in this way to expand our core customer base.By deeply engaging across all touch points,we capitalized on conten

98、t marketing opportunities to drive precise traffic to our stores.Additionally,we refined operations for target customers,increasing member recruitment and engagement to boost repeat purchases from existing customers.During the“38”and“618”shopping festivals in 2024,the gross merchandise volume(GMV)of

99、 Proyas Tmall flagship store ranked first on Tmall Beauty.And during the“618”shopping festival,we topped the Tmall fast-moving consumer goods rankings for the first time.In the first half of 2024,the GMV of Proyas Tmall flagship store ranked first on Tmall Beauty for the first time.(2)Douyin During

100、the Reporting Period,the Company continued to strengthen refined operations.In terms of self live-streaming,the Company further refined the brand matrix account setup and implemented a multi-product distribution strategy.To optimize the hero product strategy,we mainly promoted certain core products

101、in the live-streaming room to create dedicated accounts for hero products,so as to achieve an integration of brand recommendation and sales.Additionally,by organically combining the Douyin Mall with self live-streaming,we developed a special product pipeline to promote a synergistic growth between l

102、ive streaming and the online mall.In terms of KOL live-streaming,we engaged in deep collaborations with high-quality influencers to diversify live-streaming scenarios,effectively boosting the integration of brand recommendation and sales.During the“618”shopping festival in 2024,the GMV of Proya rank

103、ed first on Douyin Beauty,and ranked first among domestic products.In the first half of 2024,the GMV of Proya ranked second on Douyin Beauty.(3)JD During the Reporting Period,the Company enhanced the strategic status of hero products by uplifting their category ranking and sales share.We explored co

104、mpetitive categories on the platform and strategically planned product lines in each price range,striving to seize opportunities for special offers.Through concerted efforts both on-site and off-site,we enhanced brand competitiveness and further Semi-Annual Report 2024 15/258 expanded our market sha

105、re.We also deeply focused on our user operation system and refined operations based on target audience.These efforts aim to increase user value and promote high repeat purchases and conversions.Moreover,we rationally deployed our efforts on advertising for targeted audience,giving the priority to ef

106、ficiency.During the“618”shopping festival in 2024,the GMV of Proya ranked third on JD Beauty,and ranked first among domestic products.In the first half of 2024,the GMV of Proya ranked fifth on JD Beauty,and ranked first among domestic products.Offline:(1)Department store channel The Company continuo

107、usly optimized the store structure and advanced the transition of the management system at leading stores to a directly operated model.At the same time,we developed high-quality new department stores and shopping center network,and comprehensively upgraded the brand image of new counters.Furthermore

108、,the Company continued to strengthen internal management,and further improved the training system for counter consultants,by doing so to improve their retail management skills and customer service levels and increase average sales per counter.(2)Cosmetics store channel In terms of market positioning

109、,the Company leveraged the potential of the Proya brand and products to continuously expand market share.We deepened cooperation with new type of mall aggregate stores,upgraded brand experience zones,and established brand image communication hubs.Moreover,in the traditional cosmetics store channel,w

110、e maintained the brands momentum by solidifying cooperation with existing major cosmetics clients.4.New organizational strategy(1)Institutional construction:The Company continued to deepen the value return concept of“high investment,high performance and high returns”,reinforcing a results-oriented p

111、erformance culture.We have established a business-centered multiple incentive system,including a combination of short-term incentives represented by performance bonuses/project bonuses,mid-term incentives represented by overachievement bonuses,and long-term incentives.Additionally,we upgraded our hu

112、man resource management system to enhance work efficiency through empowerment tools.(2)Talent development:We collaborated with prestigious institutions and continuously recruited management trainees,supplementing high-potential talent pools in R&D,product,marketing,and operations.We set up qualifica

113、tion standards for key positions to guide employee growth and provide a basis for talent cultivation.Furthermore,we conducted empowerment training for middle and junior managers to enhance their situational leadership and goal management capabilities.5.New R&D strategy During the Reporting Period,th

114、e Company continued to enhance its R&D layout of all key stages from raw material to finished products,including fundamental research,formula development,efficacy evaluation,etc.The focus was to conduct research on skin mechanisms,design active substances,verify their efficacy,as well as research an

115、d develop new skin care,make-up,and body&hair products.(1)Patents:During the Reporting Period,the Company newly applied for 16 national invention patents,and 6 utility model patents,totaling 22 new patents;newly obtained 3 nationally licensed invention patents,1 utility model patents,and 3 design pa

116、tents,totaling 7 patents.As of the end of the Reporting Period,the Company had 125 nationally authorized invention patents,21 utility model patents,and 92 design patents,totaling 238 patents.Semi-Annual Report 2024 16/258(2)Standard releasing:During the Reporting Period,the Company released 10 group

117、 standards as a drafter.As of the end of the Reporting Period,the Company had led or participated in the development of 17 national standards,4 light industry standards,and 36 group standards.(3)R&D results:During the Reporting Period,the Company led and participated in the preparation of vocational

118、 evaluation standards for the China National Light Industry Council(including QG-9-02-01-15 Cosmetic Efficacy Evaluator and QG-9-02-01-14 Fragrance Evaluator).The Company published energy skincare research reports with a total of 23 papers during this period.The research findings on core technology

119、of our Advanced Firming Nourishing series,titled Mitigation of retinol-induced skin irritation by physiologic lipids:Evidence from patch testing,was published in the Journal of Cosmetic Dermatology.(4)Strategic cooperation:During the Reporting Period,the Company deepened our existing strategic partn

120、erships.We furthered our collaborations with Zhejiang University,Shanghai Academy of Agricultural Sciences,Beijing Technology and Business University,SiyoMicro,WuXi AppTec,and Zhejiang Peptide.6.New supply chain guarantee(1)During the Reporting Period,the Huzhou production base made a ceaseless effo

121、rt to develop eco-friendly green factories.It actively initiated the“Zero Direct Discharge of Rainwater”renovation project,including excavating and constructing surface channels for rainwater and sewage water,modifying rainwater discharge outlets for transparent supervision,expanding the initial rai

122、nwater collection pool,and building a smart platform for the emergency pool warning system.(2)During the Reporting Period,the Huzhou production base officially operated new production workshops,including multiple sets of intelligent homogeneous emulsification equipment and several fully automated pr

123、oduction lines.Higher operational efficiency was achieved with a newly developed pre-process treatment system and an advanced intelligent manufacturing model in the industry.Boasting the first new workshop in the industry to apply an automated process control system,the workshop had reduced risk of

124、equipment misuse and ensured product quality stability.(3)During the Reporting Period,all management personnel at the Huzhou production base diligently studied the Three-Year Action Plan to Strengthen Workplace Safety(2024-2026)released by Work Safety Committee of the State Council.The base proposed

125、 the theme of“Respect Life,Care for Safety,Fundamental Improvements,Deep Governance”,comprehensively enhanced the Companys safety management.Collaborating with a third-party consulting firm,the base established a safety production system framework,conducted hazard inspections,and built a risk manage

126、ment platform to achieve visual safety effects.These efforts aimed at improving emergency response capabilities,establishing an emergency management system,and enhancing crisis management skills for sustainable safety production.(4)During the Reporting Period,the Huzhou production base always upheld

127、 the quality control philosophy of“Process Control,Quality and Safety,and Customer Satisfaction”,and continually optimized the quality management system.This resulted in a year-on-year decrease in online customer complaints for Proya brand.Additionally,the Huzhou production base and the Huzhou Marke

128、t Supervising Administration collaborated on training,organized peer companies to verify equipment installation,commissioning,and operation,and validated the design,installation,and operation of the purified water system and clean air conditioning system.These initiatives aimed to empower industry d

129、evelopment.(5)During the Reporting Period,the Huzhou production base,as an industry benchmark for full-chain transparent factories,remained committed to its original mission of presenting consumers with fully Semi-Annual Report 2024 17/258 transparent production processes,quality control,and logisti

130、cs operations.The base also frequently cooperated with our brand to conduct live-streaming activities.Material changes in business operations of the Company during the Reporting Period and matters that occurred during the Reporting Period that had and are expected to have significant impacts on busi

131、ness operations of the Company Applicable Not applicable IV.Main Operations during the Reporting Period(I)Analysis of primary business 1.Analysis of changes in items related to financial statements Unit:Yuan Currency:RMB Item Amount for the current period Amount for the same period last year Change(

132、%)Operating revenue 5,001,465,470.72 3,626,991,878.22 37.90 Operating costs 1,509,530,495.30 1,069,489,813.93 41.14 Selling expenses 2,339,661,922.31 1,579,997,275.26 48.08 General and administrative expenses 176,927,741.63 192,127,158.56-7.91 Financial expenses-24,649,322.32-30,353,566.91 Not appli

133、cable R&D expenses 94,613,242.52 91,520,865.15 3.38 Net cash flows from operating activities 662,102,794.39 1,181,268,072.03-43.95 Net cash flows from investing activities 193,194,272.98-102,775,712.36 Not applicable Net cash flows from financing activities-508,846,622.56-252,230,919.73 Not applicab

134、le Reasons for changes in operating revenue:Mainly due to increased online sales.Reasons for changes in operating costs:The increase in operating costs was mainly due to increased operating revenue.Reasons for changes in selling expenses:Selling expenses for January to June 2024 amounted to RMB2.34

135、billion,accounting for 46.78%of operating revenue(compared with 43.56%for the same period last year).Selling expenses increased by RMB760 million a YOY increase of 48.08%,mainly due to an increase of RMB688 million a YOY increase of 50.03%in the image promotion expenses in the current period.Reasons

136、 for changes in general and administrative expenses:General and administrative expenses for January to June 2024 amounted to RMB177 million,accounting for 3.54%of operating revenue(compared with 5.30%for the same period last year).General and administrative expenses decreased by RMB15 million a YOY

137、decrease of 7.91%,mainly due to the YOY decrease in restricted share equity incentive fees.Reasons for changes in financial expenses:Mainly due to the YOY increase in interest expenses.Reasons for changes in R&D expenses:R&D expenses for January to June 2024 amounted to RMB95 million,a YOY increase

138、of RMB3.0924 million,accounting for 1.89%of operating revenue(compared with 2.52%for the same period last year).The parent companys R&D expense ratio for January to June 2024 was 3.82%(compared with 5.10%for the same period last year).Semi-Annual Report 2024 18/258 Reasons for changes in net cash fl

139、ows from operating activities:Mainly due to:1.A YOY increase in operating revenue and the increase in cash received from the sale of goods;2.The increase in the payment for goods;3.The increase in the payment for image promotion expenses.Reasons for changes in net cash flows from investing activitie

140、s:Mainly due to the recovery of time deposits of RMB300 million.Reasons for changes in net cash flows from financing activities:1.Cash paid for distribution of dividends,profits or repayment of interest increased by RMB103 million;2.Cash paid for repurchase of the Companys shares increased by RMB157

141、 million.2.A detailed description on significant changes in the Companys activities,profit composition or sources of profit during the current period Applicable Not applicable (II)Description on significant changes in profit caused by non-primary business activities Applicable Not applicable (III)An

142、alysis of assets and liabilities Applicable Not applicable 1.Assets and liabilities Unit:Yuan Item Closing amount of the current period Proportion of the closing amount of the current period to total assets(%)Closing amount of the previous period Proportion of the closing amount of the previous peri

143、od to total assets(%)Change ratio of the closing amount of the current period compared with that of the previous year(%)Explanation Receivables financing 3,695,843.86 0.05 7,378,700.06 0.10-49.91 Mainly due to the reduced balance of bank acceptance notes as of the end of the period.Other receivables

144、 13,836,491.18 0.19 81,966,213.90 1.12-83.12 Mainly because the annual rebates receivable from e-commerce platforms for the previous year were recovered Semi-Annual Report 2024 19/258 Item Closing amount of the current period Proportion of the closing amount of the current period to total assets(%)C

145、losing amount of the previous period Proportion of the closing amount of the previous period to total assets(%)Change ratio of the closing amount of the current period compared with that of the previous year(%)Explanation during the current period.Other current assets 65,561,804.15 0.89 99,765,073.0

146、7 1.36-34.28 Mainly due to the decreased input VAT to be deducted.Construction in progress 72,172,878.34 0.98 52,038,642.94 0.71 38.69 Mainly due to the increased balance of Huzhou Production Base Expansion Project(Phase I).Other non-current assets 25,267,082.68 0.34 16,974,946.99 0.23 48.85 Mainly

147、due to the increase in prepayments for long-term asset purchase funds.Notes payable 0.00 0.00 36,959,074.14 0.50-100.00 Mainly due to the reduced balance of bank acceptance notes payable.Receipts in advance 152,319.76 0.00 30,514.45 0.00 399.17 Mainly due to the increased rents receivable in advance

148、.Employee benefits payable 98,158,990.54 1.33 166,444,494.43 2.27-41.03 Mainly due to the opening balance includes the unpaid year-end bonus payable for the year 2023.Semi-Annual Report 2024 20/258 Item Closing amount of the current period Proportion of the closing amount of the current period to to

149、tal assets(%)Closing amount of the previous period Proportion of the closing amount of the previous period to total assets(%)Change ratio of the closing amount of the current period compared with that of the previous year(%)Explanation Taxes payable 151,086,065.86 2.05 222,765,869.94 3.04-32.18 Main

150、ly due to the decrease in income tax payable and value-added tax(VAT)payable.Treasury shares 298,659,030.87 4.06 146,966,735.61 2.01 103.22 Mainly due to the share repurchase by the Company through centralized bidding transactions with its own funds.Minority interests 73,151,801.81 0.99 50,765,849.4

151、1 0.69 44.10 Mainly due to the increase in the profit of our subsidiary Ningbo Timage Cosmetics Co.,Ltd.as well as gains or losses attributable to minority interests.Other explanations None 2.Overseas assets Applicable Not applicable (1)Scale of assets Including overseas assets of RMB15,174.31(Unit:

152、RMB 0,000 Currency:RMB),accounting for 2.06%of the total assets.Semi-Annual Report 2024 21/258(2)Description of a high percentage of overseas assets Applicable Not applicable Other explanations None 3.Restrictions on prime assets as of the end of the Reporting Period Applicable Not applicable Unit:Y

153、uan Item Closing book balance Closing book value Type of restrictions Cause for restrictions Monetary capital 30,000,000.00 30,000,000.00 Cannot be withdrawn at any time Fixed-term deposit 8,800,000.00 8,800,000.00 Frozen L/C deposit 250,000.00 250,000.00 Frozen Transformer deposit 70,000.00 70,000.

154、00 Frozen Vehicle ETC deposit 5,540,922.50 5,540,922.50 Frozen Pinduoduo deposit 2,553,262.81 2,553,262.81 Frozen Directly-operated store deposit Total 47,214,185.31 47,214,185.31 4.Other explanations Applicable Not applicable (IV)Analysis of investment 1.Overall analysis of external equity investme

155、nts Applicable Not applicable Unit:Yuan Item Closing amount Opening amount Other equity instrument investments 107,660,400.00 107,660,400.00 Investment in joint ventures 3,053,932.82 3,059,991.91 Investment in associates 108,366,561.93 110,514,166.58 Total 219,080,894.75 221,234,558.49 For details,r

156、efer to the particulars contained in“17.Long-term equity investments”in“VII.Notes to the Items in Consolidated Financial Statements”,“Section X Financial Report”of this Report.Semi-Annual Report 2024 22/258(1).Significant equity investments Applicable Not applicable (2).Significant non-equity invest

157、ments Applicable Not applicable (3).Financial assets measured at fair value Applicable Not applicable Unit:Yuan Currency:RMB Asset category Opening amount Gains and losses from changes in fair value for the current period Accumulated change in fair value included in equities Impairment accrued for t

158、he current period Amount of purchase for the current period Amount of sale/redemption for the current period Other changes Closing amount Others 107,660,400.00 -38,742,000.00 107,660,400.00 Total 107,660,400.00 -38,742,000.00 107,660,400.00 For details,refer to the particulars contained in“18.Other

159、equity instrument investments”in“VII.Notes to the Items in Consolidated Financial Statements”,“Section X Financial Report”of this Report.Investment in securities Applicable Not applicable Description of investment in securities Applicable Not applicable Investment in private equity fund Applicable N

160、ot applicable Investment in derivatives Applicable Not applicable Semi-Annual Report 2024 23/258(V)Sale of major assets and equity Applicable Not applicable (VI)Analysis of major controlled and invested companies Applicable Not applicable Unit:RMB 0,000 Major subsidiary Nature of business Major prod

161、ucts and services Registered capital Total assets Net assets Net profit Holding or shareholding Zhejiang Meiligu Electronic Commerce Co.,Ltd.Cosmetics sales Cosmetics 1,000.00 147,458.38 48,450.26 12,835.52 Holding Hangzhou Proya Trade Co.,Ltd.Cosmetics sales Cosmetics 5,000.00 26,270.57 15,863.10 4

162、,958.08 Holding (VII)Structured entities controlled by the Company Applicable Not applicable V.Other Disclosures(I)Possible risks Applicable Not applicable 1.Industry competition risks(1)The Companys brand strategy and channel strategy fail to come up to expectations due to intensified competition f

163、rom 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.2.Project incubation risks(1)New brand incubation risk:performance fails to come up to expectations despite heavy inve

164、stment in marketing;(2)New category cultivation risk:as the operation modes for different categories of products differ greatly,the team is unable to meet the requirements and performance fails to come up to expectations.(II)Other disclosures Applicable Not applicable Semi-Annual Report 2024 24/258

165、Section IV Corporate Governance I.General Meetings of Shareholders Session of meeting Date of meeting Query index of the designated website where the resolution is published Resolution disclosure date Meeting resolution 2023 Annual General Meeting of Shareholders May 9,2024 Announcement No.2024-023

166、on SSE website()May 10,2024 The meeting approved proposals including the Companys Annual Report 2023 and its Summary,and the Companys 2023 Annual Profit Distribution Plan.For details,see the Announcement on Resolutions of the 2023 Annual General Meeting of Shareholders(Announcement No.:2024-023)rele

167、ased by the Company on the SSE website(http:/)on May 10,2024 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 II.Chang

168、es in the Companys directors,supervisors and senior management Applicable Not applicable Description of changes in directors,supervisors and senior management of the Company Applicable Not applicable III.Profit Distribution or Capital Reserve Conversion Plan Profit distribution plan and plan for con

169、version of capital reserve into share capital proposed for the first half of 2024 Distribution or conversion or not No Number of bonus shares distributed per 10 shares(share)0 Amount of cash dividends per 10 shares(RMB)(tax inclusive)0 Number of shares converted per 10 shares(share)0 Description of

170、profit distribution plan and plan for conversion of capital reserve into share capital Not applicable Semi-Annual Report 2024 25/258 IV.The Companys Equity Incentive Plans,Employee Stock Ownership Plans or Other Employee Incentives and Their Impact(I)Relevant equity incentive matters disclosed in th

171、e interim announcement and with no progress or change in subsequent implementation Applicable Not applicable Matter Reference Announcement on Adjusting the Price and Quantity of Restricted Shares Repurchased under the 2022 Restricted Shares Incentive Plan Announcement No.2023-036 disclosed on SSE we

172、bsite,Shanghai Securities News,and Securities Times on June 21,2023 Announcement on the Repurchase and Cancellation of Some Equity Incentive Restricted Shares Announcement No.2023-037 disclosed on SSE website,Shanghai Securities News,and Securities Times on June 21,2023 Announcement on the Implement

173、ation of the Repurchase and Cancellation of Some Restricted Shares under the 2022 Restricted Shares Incentive Plan Announcement No.2023-044 disclosed on SSE website,Shanghai Securities News,and Securities Times on August 22,2023 Announcement on the Repurchase and Cancellation of Some Equity Incentiv

174、e Restricted Shares Announcement No.2023-058 disclosed on SSE website,Shanghai Securities News,Securities Times,China Securities Journal,Securities Daily,Economic Information Daily,and China Daily on September 15,2023 Announcement on the Satisfaction of Conditions for Release from Sales Restrictions

175、 in the First Release Period under the 2022 Restricted Shares Incentive Plan and Listing Announcement No.2023-061 disclosed on SSE website,Shanghai Securities News,Securities Times,China Securities Journal,Securities Daily,Economic Information Daily,and China Daily on September 20 2023 Announcement

176、on Adjusting the Repurchase Price of the 2022 Restricted Shares Incentive Plan Announcement No.2023-069 disclosed on SSE website,Shanghai Securities News,Securities Times,China Securities Journal,Securities Daily,Economic Information Daily,and China Daily on October 24,2023 Announcement on the Imple

177、mentation of the Repurchase and Cancellation of Some Restricted Shares under the 2022 Restricted Shares Incentive Plan Announcement No.2023-080 disclosed on SSE website,Shanghai Securities News,Securities Times,China Securities Journal,Securities Daily,Economic Information Daily,and China Daily on D

178、ecember 11,2023 Announcement on Adjusting the Repurchase Price of the 2022 Restricted Shares Incentive Plan Announcement No.2024-037 disclosed on SSE website,Shanghai Securities News,Securities Times,China Securities Journal,Securities Daily,Economic Information Daily,and China Daily on August 28,20

179、24 Announcement on the Repurchase Announcement No.2024-038 disclosed on SSE website,Shanghai Semi-Annual Report 2024 26/258 and Cancellation of Some Equity Incentive Restricted Shares Securities News,Securities Times,China Securities Journal,Securities Daily,Economic Information Daily,and China Dail

180、y on August 28,2024 (II)Incentives not disclosed in the interim announcement or with subsequent progress Particulars of equity incentives Applicable Not applicable Other explanations Applicable Not applicable Particulars of employee stock ownership plans Applicable Not applicable Other incentives Ap

181、plicable Not applicable Section V Environmental and Social Responsibility I.Environmental Information(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)State

182、ment on environmental protection of companies not included in the list of key pollutant discharging units Applicable Not applicable 1.Administrative penalties due to environmental issues Applicable Not applicable 2.Disclosure of other environmental information with reference to primary pollutant dis

183、charge entities Applicable Not applicable During the Reporting Period,the Huzhou production base made a ceaseless effort to develop eco-friendly green factories.It actively initiated the“Zero Direct Discharge of Rainwater”renovation project,including excavating and constructing surface channels for

184、rainwater and sewage water,modifying rainwater discharge outlets for transparent supervision,expanding the initial rainwater collection pool,and building a smart platform for the emergency pool warning system.3.Reasons for non-disclosure of other environmental information Applicable Not applicable S

185、emi-Annual Report 2024 27/258(III)Statement on subsequent progress or change in environmental information disclosed during the Reporting Period Applicable Not applicable (IV)The Companys performance in helping protect the environment,prevent pollution and fulfill environmental responsibilities Appli

186、cable Not applicable (V)Measures taken to reduce carbon emissions during the Reporting Period and their effects Applicable Not applicable II.Poverty Alleviation and Rural Revitalization Progress Applicable Not applicable Semi-Annual Report 2024 28/258 Section VI Important Matters I.Fulfillment of Co

187、mmitments(I)Commitments made by the Companys 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 Background of commitment Commitment type Commitment party Comm

188、itment content Commitment date Any deadline for performance Duration Whether the commitment is timely and strictly performed Specific reasons for failure of on-time fulfillment The next step in the event of failure of on-time fulfillment IPO-related commitments Restrictions on sales of shares Direct

189、ors,senior management HOU Juncheng,FANG Yuyou and CAO Liangguo(1)During their terms as the Companys director/senior management,they shall not transfer more than 25%of their total shares directly or indirectly held in the Company each year.Within 6 months after leaving office,they shall not transfer

190、their shares directly or indirectly held in the Company.(2)If their shares in the Company November 15,2017 No November 15,2017 to long-term Yes Not applicable Not applicable Semi-Annual Report 2024 29/258 Background of commitment Commitment type Commitment party Commitment content Commitment date An

191、y deadline for performance Duration Whether the commitment is timely and strictly performed Specific reasons for failure of on-time fulfillment The next step in the event of failure of on-time fulfillment are sold within two years upon expiration of the lock-up period,the selling price shall not be

192、lower than the offering price.If the closing price of the Companys shares is lower than the offering price for 20 consecutive trading days within 6 months after the Companys IPO,or the closing price as of the end of the 6-month period after the Companys IPO is lower than the offering price,the lock-

193、up period for their shares in the Company will be automatically extended for 6 months.Their commitments above shall survive job change and Semi-Annual Report 2024 30/258 Background of commitment Commitment type Commitment party Commitment content Commitment date Any deadline for performance Duration

194、 Whether the commitment is timely and strictly performed Specific reasons for failure of on-time fulfillment The next step in the event of failure of on-time fulfillment resignation.(3)Should any of them/their partnership violate the said share lock-up commitments,the lock-up period for their/their

195、partnerships shares in the Company will be automatically extended for 6 months.Restrictions on sales of shares Senior management JIN Yanhua(1)Within 12 months from the date of the Companys IPO,they shall not transfer or authorize others to manage their shares directly or indirectly held in the Compa

196、ny or have the Company repurchase such shares.(2)During their terms as the Companys senior management,they shall April 16,2018 No April 16,2018 to long-term Yes Not applicable Not applicable Semi-Annual Report 2024 31/258 Background of commitment Commitment type Commitment party Commitment content C

197、ommitment date Any deadline for performance Duration Whether the commitment is timely and strictly performed Specific reasons for failure of on-time fulfillment The next step in the event of failure of on-time fulfillment not transfer more than 25%of their total shares directly or indirectly held in

198、 the Company each year.Within 6 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.I

199、f the closing price of the Companys shares is lower than the offering price for 20 consecutive trading days within 6 months after the Companys IPO,or the Semi-Annual Report 2024 32/258 Background of commitment Commitment type Commitment party Commitment content Commitment date Any deadline for perfo

200、rmance Duration Whether the commitment is timely and strictly performed Specific reasons for failure of on-time fulfillment The next step in the event of failure of on-time fulfillment closing price as of the end of the 6-month period after the Companys IPO is lower than the offering price,the lock-

201、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 partnerships shares in the Comp

202、any will be automatically extended for 6 months.Restrictions on sales of Senior management(1)Within 12 months from the date of the September 3,2018 No September 3,2018 to Yes Not applicable Not applicable Semi-Annual Report 2024 33/258 Background of commitment Commitment type Commitment party Commit

203、ment content Commitment date Any deadline for performance Duration Whether the commitment is timely and strictly performed Specific reasons for failure of on-time fulfillment The next step in the event of failure of on-time fulfillment shares WANG Li Companys IPO,they shall not transfer or authorize

204、 others to manage their shares directly or indirectly held in the Company or have the Company repurchase such shares.(2)During their terms as the Companys senior management,they shall not transfer more than 25%of their total shares directly or indirectly held in the Company each year.Within 6 months

205、 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 long-term Semi-Annual Report 2024 34/258 Background of commitment Commitment type Commitment party Commitment content Commitment date Any

206、deadline for performance Duration Whether the commitment is timely and strictly performed Specific reasons for failure of on-time fulfillment The next step in the event of failure of on-time fulfillment upon expiration of the lock-up period,the selling price shall not be lower than the offering pric

207、e.If the closing price of the Companys shares is lower than the offering price for 20 consecutive trading days within 6 months after the Companys IPO,or the closing price as of the end of the 6-month period after the Companys IPO is lower than the offering price,the lock-up period for their shares i

208、n the Company will be automatically extended for 6 months.Their commitments above shall survive job change and resignation.(4)Should Semi-Annual Report 2024 35/258 Background of commitment Commitment type Commitment party Commitment content Commitment date Any deadline for performance Duration Wheth

209、er the commitment is timely and strictly performed Specific reasons for failure of on-time fulfillment The next step in the event of failure of on-time fulfillment any of them/their partnership violate the said share lock-up commitments,the lock-up period for their/their partnerships shares in the C

210、ompany will be automatically extended for 6 months.Restrictions on sales of shares Controlling shareholder and actual controller HOU Juncheng and FANG Aiqin(1)Within 24 months upon expiration of the lock-up period,they shall not directly or indirectly reduce their shares in the issuer by more than 6

211、%of the total number of shares of the issuer before such IPO.(2)They can only sell shares in the Company through methods including but not limited to collective trading through bidding November 15,2017 No November 15,2017 to long-term Yes Not applicable Not applicable Semi-Annual Report 2024 36/258

212、Background of commitment Commitment type Commitment party Commitment content Commitment date Any deadline for performance Duration Whether the commitment is timely and strictly performed Specific reasons for failure of on-time fulfillment The next step in the event of failure of on-time fulfillment

213、at the stock exchange,block trading,and transfer by agreement in line with applicable laws,regulations and rules.(3)Before selling the Companys 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 th

214、e rules of the stock 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 must explain the cause for failing to do so at the Companys General Semi-Annual Report 2024 37/258 Background of commitment Comm

215、itment type Commitment party Commitment content Commitment date Any deadline for performance Duration Whether the commitment is timely and strictly performed Specific reasons for failure of on-time fulfillment The next step in the event of failure of on-time fulfillment Meeting of Shareholders and t

216、he media designated by the CSRC and publicly apologize to the Companys shareholders and investors.Restrictions on sales of shares Shareholders FANG Yuyou and LI Xiaolin directly holding more than 5%shares in the Company(1)If they intend to reduce shares after the lock-up period expires,they will pru

217、dently make a share reduction plan as necessary for the Company to stabilize the share price,carry on business and conduct capital operation as required by the CSRC and the exchange on shareholders for share reduction,whereby reducing shares gradually upon expiration of the lock-up period.(2)They No

218、vember 15,2017 No November 15,2017 to long-term Yes Not applicable Not applicable Semi-Annual Report 2024 38/258 Background of commitment Commitment type Commitment party Commitment content Commitment date Any deadline for performance Duration Whether the commitment is timely and strictly performed

219、Specific reasons for failure of on-time fulfillment The next step in the event of failure of on-time fulfillment can only sell shares in the Company through methods including but not limited to collective trading through bidding at the stock exchange,block trading,and transfer by agreement in line w

220、ith applicable laws,regulations and rules.(3)Before selling the Companys 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 stock exchange,except to the extent that their shares in

221、 the Company are less than 5%.(4)Should they Semi-Annual Report 2024 39/258 Background of commitment Commitment type Commitment party Commitment content Commitment date Any deadline for performance Duration Whether the commitment is timely and strictly performed Specific reasons for failure of on-ti

222、me fulfillment The next step in the event of failure of on-time fulfillment fail to perform the said intent of share reduction,they must explain the cause for failing to do so at the Companys General Meeting of Shareholders and the media designated by the CSRC and publicly apologize to the Companys

223、shareholders and public investors.Others The Company When the preconditions for enabling the share price stabilization plan are met,if the Company fails to take specific measures to stabilize the share price,the Company must explain the cause for failing to do so at the Companys General Meeting of S

224、hareholders and the media designated November 15,2017 No November 15,2017 to long-term Yes Not applicable Not applicable Semi-Annual Report 2024 40/258 Background of commitment Commitment type Commitment party Commitment content Commitment date Any deadline for performance Duration Whether the commi

225、tment is timely and strictly performed Specific reasons for failure of on-time fulfillment The next step in the event of failure of on-time fulfillment by the CSRC and publicly apologize to the Companys shareholders and public investors.In the event of losses to investors not as a result of force ma

226、jeure,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 sub

227、mit it to the General Meeting of Shareholders for deliberation,so as to Semi-Annual Report 2024 41/258 Background of commitment Commitment type Commitment party Commitment content Commitment date Any deadline for performance Duration Whether the commitment is timely and strictly performed Specific r

228、easons for failure of on-time fulfillment The next step in the event of failure of on-time fulfillment protect the interests of the Companys investors as much as possible.Within three years from the date of the Companys IPO,if the Company appoints new directors and senior management,the Company will

229、 require such new directors and senior management to fulfill the commitments made by the directors and senior management at the time of the Companys IPO.Others The Companys controlling shareholders and actual controllers When the preconditions for enabling the share price stabilization plan are met,

230、if failing to take specific measures to stabilize the share price as per the plan,they must November 15,2017 No November 15,2017 to long-term Yes Not applicable Not applicable Semi-Annual Report 2024 42/258 Background of commitment Commitment type Commitment party Commitment content Commitment date

231、Any deadline for performance Duration Whether the commitment is timely and strictly performed Specific reasons for failure of on-time fulfillment The next step in the event of failure of on-time fulfillment explain the cause for failing to do so at the issuers General Meeting of Shareholders and the

232、 media designated by the CSRC and publicly apologize to the issuers shareholders and public investors.Where the 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 trans

233、fer their shares until they have taken and carried out measures to stabilize the share price as per the said plan.Others The When the preconditions November No November Yes Not Not Semi-Annual Report 2024 43/258 Background of commitment Commitment type Commitment party Commitment content Commitment

234、date Any deadline for performance Duration Whether the commitment is timely and strictly performed Specific reasons for failure of on-time fulfillment The next step in the event of failure of on-time fulfillment Companys directors(excluding independent directors)and senior management for enabling th

235、e share price stabilization plan are met,if failing to take specific measures to stabilize the share price as per the plan,they must explain the cause for failing to do so at the issuers General Meeting of Shareholders and the media designated by the CSRC and publicly apologize to the issuers shareh

236、olders and public investors.Where the commitment is not fulfilled,they will not receive remuneration and shareholder dividends(if any)from the issuer within 5 working days from the date when the said incident occurs,and 15,2017 15,2017 to long-term applicable applicable Semi-Annual Report 2024 44/25

237、8 Background of commitment Commitment type Commitment party Commitment content Commitment date Any deadline for performance Duration Whether the commitment is timely and strictly performed Specific reasons for failure of on-time fulfillment The next step in the event of failure of on-time fulfillmen

238、t they will not be able to transfer their shares until they have taken and carried out measures to stabilize the share price as per the said plan.Others The Company If the Companys prospectus contains false records,misleading statements or major omissions,which causes investors to suffer losses in s

239、ecurities transactions,the Company will compensate investors for such losses by law.After the illegal facts mentioned above are identified by the CSRC or the stock exchange on which the Company is listed or the competent judicial authority,the November 15,2017 No November 15,2017 to long-term Yes No

240、t applicable Not applicable Semi-Annual Report 2024 45/258 Background of commitment Commitment type Commitment party Commitment content Commitment date Any deadline for performance Duration Whether the commitment is timely and strictly performed Specific reasons for failure of on-time fulfillment Th

241、e next step in the event of failure of on-time fulfillment 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

242、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 Semi-Annual Report 2024 4

243、6/258 Background of commitment Commitment type Commitment party Commitment content Commitment date Any deadline for performance Duration Whether the commitment is timely and strictly performed Specific reasons for failure of on-time fulfillment The next step in the event of failure of on-time fulfil

244、lment Company will publicly apologize to shareholders and public investors for failing to perform the said compensation measures at the General Meeting of Shareholders and the media designated by the CSRC and compensate investors for the actual losses identified by the CSRC and the competent judicia

245、l authority.Others The issuers controlling shareholders and actual controllers If the issuers prospectus contains false records,misleading statements or major omissions,which causes investors to suffer losses in securities transactions,they will compensate investors for such losses by law.After the

246、illegal facts November 15,2017 No November 15,2017 to long-term Yes Not applicable Not applicable Semi-Annual Report 2024 47/258 Background of commitment Commitment type Commitment party Commitment content Commitment date Any deadline for performance Duration Whether the commitment is timely and str

247、ictly performed Specific reasons for failure of on-time fulfillment The next step in the event of failure of on-time fulfillment mentioned above are identified by the CSRC or the stock exchange on which the Company is listed or the competent judicial authority,the Company will actively compensate in

248、vestors 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

249、,active negotiation,compensation in advance,Semi-Annual Report 2024 48/258 Background of commitment Commitment type Commitment party Commitment content Commitment date Any deadline for performance Duration Whether the commitment is timely and strictly performed Specific reasons for failure of on-tim

250、e fulfillment The next step in the event of failure of on-time fulfillment and effective protection of investors interests,especially small and medium investors.If found to have violated the said commitments,the Companys controlling shareholders and actual controllers will publicly apologize to the

251、issuers shareholders and public investors for failing to perform the said compensation measures at the issuers 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

252、 are Semi-Annual Report 2024 49/258 Background of commitment Commitment type Commitment party Commitment content Commitment date Any deadline for performance Duration Whether the commitment is timely and strictly performed Specific reasons for failure of on-time fulfillment The next step in the even

253、t of failure of on-time fulfillment violated,and their shares in the issuer will not be transferred until they have taken and carried out compensation measures as per the said commitments.Others Directors,supervisors and senior management If the issuers prospectus contains false records,misleading s

254、tatements or major omissions,which causes investors to suffer losses in securities transactions,they will compensate investors for such losses by law.After the illegal facts mentioned above are identified by the CSRC or the stock exchange on which the Company is listed or the competent judicial auth

255、ority,the November 15,2017 No November 15,2017 to long-term Yes Not applicable Not applicable Semi-Annual Report 2024 50/258 Background of commitment Commitment type Commitment party Commitment content Commitment date Any deadline for performance Duration Whether the commitment is timely and strictl

256、y performed Specific reasons for failure of on-time fulfillment The next step in the event of failure of on-time fulfillment Company will actively compensate investors for direct economic losses incurred therefrom by settling with investors with respect to measurable economic losses directly incurre

257、d 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 t

258、o have violated the said commitments,the Semi-Annual Report 2024 51/258 Background of commitment Commitment type Commitment party Commitment content Commitment date Any deadline for performance Duration Whether the commitment is timely and strictly performed Specific reasons for failure of on-time f

259、ulfillment The next step in the event of failure of on-time fulfillment Companys directors,supervisors and senior management will publicly apologize to the issuers shareholders and public investors for failing to perform the said compensation measures at the issuers General Meeting of Shareholders a

260、nd 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 have taken and carried Sem

261、i-Annual Report 2024 52/258 Background of commitment Commitment type Commitment party Commitment content Commitment date Any deadline for performance Duration Whether the commitment is timely and strictly performed Specific reasons for failure of on-time fulfillment The next step in the event of fai

262、lure of on-time fulfillment out compensation measures as per the said commitments.Others The Company In order to ensure the effective use of the proceeds from the IPO,effectively prevent the risk of diluting immediate returns and improve future returns,the Company intends to take measures including

263、tightening operation management and internal control,accelerating the progress of fundraising projects,and strengthening the investor return mechanism,so as to improve asset quality,increase operation revenue,raise future earnings,and achieve November 15,2017 No November 15,2017 to long-term Yes Not

264、 applicable Not applicable Semi-Annual Report 2024 53/258 Background of commitment Commitment type Commitment party Commitment content Commitment date Any deadline for performance Duration Whether the commitment is timely and strictly performed Specific reasons for failure of on-time fulfillment The

265、 next step in the event of failure of on-time fulfillment sustainable development to fill the diluted immediate returns.The Company promises to continuously improve various measures to fill the diluted immediate returns in accordance with the implementation rules subsequently issued by the CSRC and

266、Shanghai Stock 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 Companys Semi-Annual Report 2024 54/258 Background of commitment

267、Commitment type Commitment party Commitment content Commitment date Any deadline for performance Duration Whether the commitment is timely and strictly performed Specific reasons for failure of on-time fulfillment The next step in the event of failure of on-time fulfillment shareholders and public i

268、nvestors,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 Companys General Meeting of Shareholders.Others Controlling s

269、hareholder and actual controller HOU Juncheng and FANG Aiqin In order to ensure that the Companys measures to fill the diluted immediate returns can be effectively performed,they,as the Companys controlling shareholder and actual controller,promise that:November 15,2017 No November 15,2017 to long-t

270、erm Yes Not applicable Not applicable Semi-Annual Report 2024 55/258 Background of commitment Commitment type Commitment party Commitment content Commitment date Any deadline for performance Duration Whether the commitment is timely and strictly performed Specific reasons for failure of on-time fulf

271、illment The next step in the event of failure of on-time fulfillment(1)Under no circumstances will they abuse their position as the controlling shareholder and actual controller by ultra vires interfering with the Companys operation and management activities or encroaching on the Companys interests;

272、(2)After the CSRC and the SSE have otherwise released opinions and implementation rules on measures to fill the diluted immediate returns and such commitments,if the Companys relevant provisions and his or her commitments contradict such rules,they will immediately make Semi-Annual Report 2024 56/25

273、8 Background of commitment Commitment type Commitment party Commitment content Commitment date Any deadline for performance Duration Whether the commitment is timely and strictly performed Specific reasons for failure of on-time fulfillment The next step in the event of failure of on-time fulfillmen

274、t supplementary commitments in line with such rules of the CSRC and the SSE,and actively work towards the Companys issuing of new commitments or measures to comply with the requirements of the CSRC and the SSE;(3)They will fully,completely and promptly perform the Companys measures regarding compens

275、ation for the diluted immediate returns and his or her commitments regarding the measures to compensate for the diluted immediate returns.If found to have violated such Semi-Annual Report 2024 57/258 Background of commitment Commitment type Commitment party Commitment content Commitment date Any dea

276、dline for performance Duration Whether the commitment is timely and strictly performed Specific reasons for failure of on-time fulfillment The next step in the event of failure of on-time fulfillment commitments,which causes losses to the Company or shareholders,they are willing to:explain the cause

277、 and apologize at the General Meeting of Shareholders and the media designated by the CSRC;be held liable for compensation to the Company and/or shareholders by law;unconditionally accept the penalties or regulatory measures taken by the CSRC and/or the SSE and other securities regulators as per rel

278、evant regulations and rules.The said measures to fill the diluted immediate returns Semi-Annual Report 2024 58/258 Background of commitment Commitment type Commitment party Commitment content Commitment date Any deadline for performance Duration Whether the commitment is timely and strictly performe

279、d Specific reasons for failure of on-time fulfillment The next step in the event of failure of on-time fulfillment shall not be deemed to constitute a guarantee for the Companys future profits.Others Directors,senior management In order to ensure that the Companys measures to fill for the diluted im

280、mediate returns can be effectively performed,they,as the Companys directors and senior management,promise that:(1)They will not offer benefits to other entities or individuals for free or on unfair terms,or otherwise harm the Companys interests;(2)They will strictly follow the Companys budget manage

281、ment by limiting his or her duty consumption to the extent November 15,2017 No November 15,2017 to long-term Yes Not applicable Not applicable Semi-Annual Report 2024 59/258 Background of commitment Commitment type Commitment party Commitment content Commitment date Any deadline for performance Dura

282、tion Whether the commitment is timely and strictly performed Specific reasons for failure of on-time fulfillment The next step in the event of failure of on-time fulfillment required,subject to the Companys supervision and management and free from waste or excessive consumption;(3)They will not use

283、the Companys assets to engage in investment and consumption activities unrelated to his or her duties;(4)They will actively work towards the improvement of the Companys the compensation system,so as to be more in line with the requirements for filling the diluted immediate returns;support the Compan

284、ys Board of Directors or Remuneration Committee in linking the Semi-Annual Report 2024 60/258 Background of commitment Commitment type Commitment party Commitment content Commitment date Any deadline for performance Duration Whether the commitment is timely and strictly performed Specific reasons fo

285、r failure of on-time fulfillment The next step in the event of failure of on-time fulfillment implementation of the Companys measures to fill the diluted immediate returns to developing,revising and supplementing the Companys compensation system;promise that the vesting conditions for the Companys e

286、quity incentives to be announced will be linked to the implementation of the Companys measures to fill the returns;(5)After the CSRC and the SSE otherwise release the opinions and implementation rules on the measures to fill the diluted immediate returns and their commitments,if the Companys relevan

287、t Semi-Annual Report 2024 61/258 Background of commitment Commitment type Commitment party Commitment content Commitment date Any deadline for performance Duration Whether the commitment is timely and strictly performed Specific reasons for failure of on-time fulfillment The next step in the event o

288、f failure of on-time fulfillment provisions and his or her commitments contradict such rules,they will immediately make supplementary commitments in line with the rules of the CSRC and the SSE,and actively work towards the Companys making of new commitments or taking new measures to comply with the

289、requirements of the CSRC and the SSE;(6)They will fully,completely and promptly perform the Companys measures regarding filling the diluted immediate returns and his or her commitments regarding the measures to Semi-Annual Report 2024 62/258 Background of commitment Commitment type Commitment party

290、Commitment content Commitment date Any deadline for performance Duration Whether the commitment is timely and strictly performed Specific reasons for failure of on-time fulfillment The next step in the event of failure of on-time fulfillment fill the diluted immediate returns.If found to have violat

291、ed such commitments,which causes losses to the Company or shareholders,they are willing to:explain the cause and apologize at the General Meeting of Shareholders and the media designated by the CSRC;be held liable for compensation to the Company and/or shareholders by law;unconditionally accept the

292、penalties or regulatory measures taken by the CSRC and/or the SSE and other securities regulators as per relevant regulations Semi-Annual Report 2024 63/258 Background of commitment Commitment type Commitment party Commitment content Commitment date Any deadline for performance Duration Whether the

293、commitment is timely and strictly performed Specific reasons for failure of on-time fulfillment The next step in the event of failure of on-time fulfillment and rules.The said measures to fill the diluted immediate returns shall not be deemed to constitute a guarantee for the issuers future profits.

294、Avoiding horizontal competition Controlling shareholder and actual controller HOU Juncheng and FANG Aiqin 1.They do not and will not directly or indirectly engage in any activities constituting horizontal competition with the existing and future businesses of the Company and its holding subsidiaries

295、,including but not limited to the R&D,production and sale of any products that are the same as or similar to those of the Company and its holding subsidiaries.They shall be liable for economic November 15,2017 No November 15,2017 to long-term Yes Not applicable Not applicable Semi-Annual Report 2024

296、 64/258 Background of commitment Commitment type Commitment party Commitment content Commitment date Any deadline for performance Duration Whether the commitment is timely and strictly performed Specific reasons for failure of on-time fulfillment The next step in the event of failure of on-time fulf

297、illment losses caused by violation of the above commitments to the Company.2.For the enterprises under his or her control,they will perform their obligations under such commitments through the agencies and personnel(including but not limited to directors and managers),and they shall be liable for th

298、e economic losses caused by violation of the above commitments to the Company.3.From the date of signing this letter of commitment,if the Company further expands the scope of its products and business,they or the enterprises under his or Semi-Annual Report 2024 65/258 Background of commitment Commit

299、ment type Commitment party Commitment content Commitment date Any deadline for performance Duration Whether the commitment is timely and strictly performed Specific reasons for failure of on-time fulfillment The next step in the event of failure of on-time fulfillment her control shall not compete w

300、ith 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 operatio

301、n of competing or potentially competing business;(3)transferring the competing business to the Company;or(4)transferring the competing business to an unrelated third party.4.Semi-Annual Report 2024 66/258 Background of commitment Commitment type Commitment party Commitment content Commitment date An

302、y deadline for performance Duration Whether the commitment is timely and strictly performed Specific reasons for failure of on-time fulfillment The next step in the event of failure of on-time fulfillment Their shareholding companies,including Hangzhou Huazhuang Industrial Investment Co.,Ltd.and Huz

303、hou Mogan Wangshu Cosmetics Industry Phase I Venture Capital Partnership(Limited Partnership),and companies that they invest in engage in no cosmetics business or upstream and downstream business thereof.If these companies engage in such businesses in the future,they commit that they will withdraw t

304、heir investment in the enterprises through equity transfer and other means,Semi-Annual Report 2024 67/258 Background of commitment Commitment type Commitment party Commitment content Commitment date Any deadline for performance Duration Whether the commitment is timely and strictly performed Specifi

305、c reasons for failure of on-time fulfillment The next step in the event of failure of on-time fulfillment and that the Company will be given priority to decide whether to invest in the said enterprises according to legal provisions and the consent of other shareholders of such enterprises.Commitment

306、s on refinancing Others Controlling shareholder and actual controller HOU Juncheng and FANG Aiqin In order to ensure that the Companys measures to fill the immediate returns can be effectively performed,they commit that:1.They will not interfere with the Companys operation and management activities

307、beyond their authority or encroach on the Companys interests;2.From the date of making these commitments to the April 21,2021 No April 21,2021 to long-term Yes Not applicable Not applicable Semi-Annual Report 2024 68/258 Background of commitment Commitment type Commitment party Commitment content Co

308、mmitment date Any deadline for performance Duration Whether the commitment is timely and strictly performed Specific reasons for failure of on-time fulfillment The next step in the event of failure of on-time fulfillment completion of the Companys public offering of A-share convertible corporate bon

309、ds,in the event that the CSRC makes other new regulatory requirements regarding the measures to fill returns and the commitments thereof,and if the above commitments cannot satisfy such requirements of the CSRC,they will make supplementary commitments as per the latest requirements of the CSRC at th

310、at time;3.They will effectively implement the Companys measures to fill returns and their Semi-Annual Report 2024 69/258 Background of commitment Commitment type Commitment party Commitment content Commitment date Any deadline for performance Duration Whether the commitment is timely and strictly pe

311、rformed Specific reasons for failure of on-time fulfillment The next step in the event of failure of on-time fulfillment commitments in this regard,and if found to have violated such commitments,which results in losses to the Company or investors,they are willing to be liable for compensation to the

312、 Company or investors according to law.As one of the parties responsible for the measures to fill the 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 authoritie

313、s such as the CSRC and the Semi-Annual Report 2024 70/258 Background of commitment Commitment type Commitment party Commitment content Commitment date Any deadline for performance Duration Whether the commitment is timely and strictly performed Specific reasons for failure of on-time fulfillment The

314、 next step in the event of failure of on-time fulfillment SSE in accordance with the relevant regulations and rules.Others Directors,senior management In order to ensure that the Companys measures to fill the immediate returns can be effectively performed,they commit that:1.They will not offer benef

315、its to other entities or individuals for free or on unfair terms,or otherwise harm the Companys interests;2.They will restrict their post-related consumption behaviors;3.They will not use the Companys assets to engage in investment and consumption activities unrelated to his or her duties;4.They wil

316、l link April 21,2021 No April 21,2021 to long-term Yes Not applicable Not applicable Semi-Annual Report 2024 71/258 Background of commitment Commitment type Commitment party Commitment content Commitment date Any deadline for performance Duration Whether the commitment is timely and strictly perform

317、ed Specific reasons for failure of on-time fulfillment The next step in the event of failure of on-time fulfillment the remuneration system established by the Board of Directors or the Remuneration and Appraisal Committee to the implementation of the Companys measures for filling returns;5.If the Co

318、mpany implements equity incentives in the future,the vesting conditions for the Companys equity incentives to be announced will be linked to the implementation of the Companys measures to fill the returns;6.From the date of this commitment to the completion of the Companys public offering of A-share

319、 Semi-Annual Report 2024 72/258 Background of commitment Commitment type Commitment party Commitment content Commitment date Any deadline for performance Duration Whether the commitment is timely and strictly performed Specific reasons for failure of on-time fulfillment The next step in the event of

320、 failure of on-time fulfillment convertible corporate bonds,if the CSRC makes other new regulatory requirements regarding the measures to fill returns and the commitments thereof,and if the above commitments cannot satisfy such requirements of the CSRC,they will make supplementary commitments as per

321、 the latest requirements of the CSRC.As one of the parties responsible for the measures to fill the returns,should they violate or refuse to fulfill the above commitments,they shall be subject to the punishment or relevant regulatory Semi-Annual Report 2024 73/258 Background of commitment Commitment

322、 type Commitment party Commitment content Commitment date Any deadline for performance Duration Whether the commitment is timely and strictly performed Specific reasons for failure of on-time fulfillment The next step in the event of failure of on-time fulfillment measures imposed on them by the sec

323、urities regulatory authorities such as the CSRC and the SSE in accordance with the relevant regulations and rules.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

324、applicable Semi-Annual Report 2024 74/258 IV.Audit of the Semi-Annual Report Applicable Not applicable V.Information on Changes and Handling of Matters Related to Non-Standard Audit Opinions in the Annual Report for the Previous Year Applicable Not applicable VI.Matters Related to Bankruptcy and Reo

325、rganization Applicable Not applicable VII.Material Litigations and Arbitrations The Company had material litigations and arbitrations during the Reporting Period The Company had no material litigations and arbitrations during the Reporting Period VIII.Suspected Violations,Penalties and Rectification

326、s of the Company and Its Directors,Supervisors,Senior Management,Controlling Shareholders and Actual Controllers Applicable Not applicable IX.Integrity of the Company and Its Controlling Shareholders and Actual Controllers during the Reporting Period Applicable Not applicable During the Reporting Pe

327、riod,the Company and its controlling shareholders and actual controllers were in good faith.X.Significant Related-party Transactions(I)Related-party transactions pertaining to daily operation 1.Matters that have been disclosed in the interim announcement without progress or change in the follow-up i

328、mplementation Applicable Not applicable 2.Matters that have been disclosed in the interim announcement with progress or changes in the follow-up implementation Applicable Not applicable 3.Matters not disclosed in the interim announcement Applicable Not applicable (II)Related-party transactions relev

329、ant to asset acquisition or equity acquisition and disposal 1.Matters that have been disclosed in the interim announcement without progress or change in the follow-up implementation Applicable Not applicable Semi-Annual Report 2024 75/258 2.Matters that have been disclosed in the interim announcemen

330、t with progress or changes in the follow-up implementation Applicable Not applicable 3.Matters not disclosed in the interim announcement Applicable Not applicable 4.Disclosable performance achievements during the Reporting Period involving agreed-upon performance Applicable Not applicable (III)Signi

331、ficant related-party transactions pertaining to joint external investment 1.Matters that have been disclosed in the interim announcement without progress or change in the follow-up implementation Applicable Not applicable 2.Matters that have been disclosed in the interim announcement with progress o

332、r changes in the follow-up implementation Applicable Not applicable 3.Matters not disclosed in the interim announcement Applicable Not applicable (IV)Credits and debits with related parties 1.Matters that have been disclosed in the interim announcement without progress or change in the follow-up imp

333、lementation Applicable Not applicable 2.Matters that have been disclosed in the interim announcement with progress or changes in the follow-up implementation Applicable Not applicable 3.Matters not disclosed in the interim announcement Applicable Not applicable (V)Financial business between the Company and related financial companies,holding financial companies and related parties Applicable Not a