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1、2024 Semiannual Report Brand Ambassador of Purcotton Guo Jingjing Winner Medical Co.,Ltd.Semi-Annual Report Stock code:300888 Brand Ambassador of Purcotton Guo Jingjing Important Notes,Contents,and Definitions 2024 Semiannual Report 3 Section Important Notes,Contents,and Definitions The Board of Dir

2、ectors,the Board of Supervisors and directors,supervisors and senior management of Winner Medical hereby guarantee that the statement in this Semi-annual Report is authentic,accurate and complete without false or misleading information or material omission and will assume all the legal liabilities,i

3、ndividually and jointly.Li Jianquan,the head of the Company,Fang Xiuyuan,the head of accounting work,and Zhao Yan,the head of accounting body(accounting manager),guarantee the authenticity,accuracy,and completeness of the financial report in this semi-annual report.All directors of the Company have

4、personally attended the board meeting for reviewing this semi-annual report.The forward-looking contents in this semi-annual report,such as the future development strategy and performance planning,are the goals set by the Company,which are planned matters.The achievement of the goals depends on many

5、 factors,including unexpected market change.So these contents are not the Companys profit forecast for the next year,or shall it constitute a substantial commitment of the Company to investors and related parties.Investors and related parties should be fully aware of related risks and understand the

6、 differences among plans,forecasts,and commitments.Investors are asked to beware of investment risks!The planned profit distribution deliberated and approved by the board of directors is as follows:taking 582,329,808 as the radix,the Company will distribute cash dividends of 4.00 yuan(tax included)a

7、nd 0 bonus share(tax included)to all shareholders for every 10 shares,and no capital reserve will be conversed to share capital.4 Contents Section Important Notes,Contents,and Definitions.3 Section Company Profile and Major Financial Indicators.8 Section Management Discussion and Analysis.13 Section

8、 Corporate Governance.53 Section V Environmental Protection and Social Responsibility.58 Section VI Important Matters.70 Section Changes in Shares and Shareholders.77 Section Information Related to Preferred Shares.84 Section Information Related to Bonds.85 Section Financial Report.89 2024 Semiannua

9、l Report 5 Document Catalog (I)Financial statements containing the signatures and seals of the person in charge of the Company,the accounting head,and the person in charge of the accounting body(accounting manager).(II)The originals of all Company documents and announcements publicly disclosed durin

10、g the reporting period.6 Definitions Term Refers to Definition Company,Winner Medical Refers to Winner Medical Co.,Ltd.Winner Group Refers to Winner Group Limited,a controlling shareholder of the Company Purcotton Refers to Shenzhen Purcotton Technology Co.,Ltd.,a wholly-owned subsidiary of the Comp

11、any Reporting period Refers to From January 1,2024 to June 30,2024 2024 Semiannual Report 7 Company Profile and Major Financial Indicators Brand Ambassador of Purcotton Guo Jingjing 8 Section Company Profile and Major Financial Indicators I.Company Profile Stock abbreviation Winner Medical Stock cod

12、e 300888 Stock exchange Shenzhen Stock Exchange Company name in Chinese Winner Medical Co.,Ltd.Chinese abbreviation of the company(if any)Winner Medical Company name in foreign language(if any)Winner Medical Co.,Ltd.Company short name in foreign language(if any)Winner Medical Legal representative of

13、 the Company Li Jianquan II.Contact Information Secretary to the Board of Directors Securities affairs representative Name Chen Huixuan Liu Yanxiang,Xu Jia Contact address F42,Building 2,Huilong Business Center,Shenzhen North Railway Station Area,Minzhi Subdistrict,Longhua District,Shenzhen City F42

14、,Building 2,Huilong Business Center,Shenzhen North Railway Station Area,Minzhi Subdistrict,Longhua District,Shenzhen City Tel 0755-28066858 0755-28066858 Email III.Other Information 1.Contact Information Whether the Companys registered address,office address and postal code,company website and email

15、 were changed during the reporting period Applicable Not applicable There is no change in the Companys registered address,office address and postal code,company website and email during the reporting period,as shown in 2023 annual report.2024 Semiannual Report 9 2.Information Disclosure and Keeping

16、Place Whether information disclosure and the place where the semi-annual report is kept were changed during the reporting period Applicable Not applicable The name and URL of the stock exchange website and media for publishing the semi-annual report,and the place where the semi-annual report is kept

17、 were not changed during the reporting period.See the 2023 Annual Report for details.3.Change of Registration Whether the registration status was changed during the reporting period Applicable Not applicable There were no changes in the Companys registration during the reporting period.See the 2023

18、Annual Report for details.4.Other Relevant Information Whether other relevant information was changed during the reporting period Applicable Not applicable The Company held its 18th Meeting of the Third Board of Directors on December 19,2023 and the 1st Extraordinary General Meeting of Shareholders

19、in 2024 on January 8,2024.During these meetings,the Board approved the Proposal on the Repurchase and Cancellation of Remaining Shares in the Special Securities Account,as well as the Proposal on the Amendment of the Articles of Association of the Company and Change of Business Registration.Specific

20、ally,the Company reallocated 6,094,659 shares remaining in the repurchase account-after excluding the Phase I Employee Stock Purchase Plan-(including the reserved portion)from the original purpose of“Supporting Employee Stock Purchase or Equity Incentives”to“Reducing the Companys Registered Capital

21、Through Cancellation”.Following this cancellation,the total share capital of the Company decreased from 594,387,367 shares to 588,292,708 shares.For more details,please refer to the Announcement on the Notification to Creditors on the Cancellation of the Remaining Repurchased Shares and the Reductio

22、n of the Registered Capital(Announcement No.2024-002),which was disclosed on the CNINF on January 8,2024.The Company held its 23rd Meeting of the Third Board of Directors on July 26,2024 and the 2nd Extraordinary General Meeting of Shareholders in 2024 on August 12,2024.During these meetings,the Boa

23、rd approved the Proposal on the Cancellation of the Remaining Shares in the Repurchase of Dedicated Securities Accounts,as well as the Proposal on the Amendment of the Articles of Association of the Company and Change of Business Registration.Specifically,the Company reallocated 5,962,900 shares in

24、the repurchase account from the original purpose of“Supporting Employee Stock Purchase or Equity Incentives”to“Reducing the Companys Registered Capital Through Cancellation”.Following this cancellation,the total share capital of the Company decreased from 588,292,708 shares to 582,329,808 shares.For

25、 more details,please refer to the Announcement on the Notification to Creditors Regarding the Cancellation of All Repurchased Shares and the Reduction of the Registered Capital(Announcement No.2024-050),which was disclosed on the CNINF on August 13,2024.10 IV.Major Accounting Data and Financial Indi

26、cators Whether the Company needs to retroactively adjust or restate the accounting data of the previous years Yes No Current reporting period Same period last year Year-on-year increase/decrease in this reporting period Revenue(yuan)4,033,505,104.33 4,266,838,038.66-5.47%Net profits attributable to

27、shareholders of listed companies(yuan)384,150,379.21 681,617,022.69-43.64%1*Net profits attributable to shareholders of the listed company after deduction of non-recurring profits and losses(yuan)326,915,114.82 550,058,459.19-40.57%Net cash flow from operating activities(yuan)193,333,516.76 158,178,

28、712.89 22.22%2*Basic EPS(yuan/share)0.6568 1.1599-43.37%Diluted EPS(yuan/share)0.6568 1.1599-43.37%Weighted average return on net assets 3.31%5.71%-2.40%End of the reporting period End of the previous year Year-on-year increase/decrease at the end of the reporting period Total assets(yuan)16,568,835

29、,512.57 17,112,022,449.97-3.17%Net assets attributable to shareholders of listed companies(yuan)11,431,205,386.28 11,533,224,328.00-0.88%Note:1*Net profit attributable to the parent company decreased by 43.64%compared to the same period last year.The primary reasons for this decline are:(i)revenue f

30、rom infection protection products decreased from RMB 730 million in the first half of 2023 to RMB 170 million in the first half of 2024;(ii)the gross profit margin for these products dropped from 53.3%in the first half of 2023 to 20.2%in the first half of 2024.2*Net cash flow from operating activiti

31、es increased by 22.22%compared to the same period last year,mainly due to the continuous improvement of the Companys working capital management.V.Differences in Accounting Data under Domestic and Foreign Accounting Standards 1.The Difference Between Net Profits and Net Assets in Financial Statements

32、 Disclosed According to the International Accounting Standards(IAS)and Chinese Accounting Standards Simultaneously Applicable Not applicable No difference between net profits and net assets in financial statements disclosed according to the International Accounting Standards(IAS)and Chinese Accounti

33、ng Standards during the reporting period.2.The Difference Between Net Profits and Net Assets in Financial Statements Disclosed According to the Overseas Accounting Standards and Chinese Accounting Standards Simultaneously Applicable Not applicable No difference between net profits and net assets in

34、financial statements disclosed according to the Overseas Accounting Standards and Chinese Accounting Standards during the reporting period.2024 Semiannual Report 11 VI.Non-Recurring Profit and Loss Items and Amount Applicable Not applicable Unit:yuan Item Amount Description Profits and losses on the

35、 disposal of non-current assets(including the write-off part of the provision for asset impairment)-2,531,199.34 Government grants recognized in the current periods profit or loss(excluding grants which are closely related to the Companys regular business operations,aligned with national policies,me

36、eting specific criteria,and have a continuous impact on the Companys profit or loss)16,329,769.68 Gains and losses from changes in the fair value of financial assets and liabilities held by non-financial corporations,and that from the disposal of financial assets and liabilities,excluding effective

37、hedging operations related to the Companys regular business operations 48,692,022.79 Income and expenditure other than those mentioned above 4,384,196.12 Less:Amount affected by income tax 10,326,267.54 Amount of minority shareholders equity affected(after tax)-686,742.68 Total 57,235,264.39 Other p

38、rofit and loss items that are consistent with the definition of non-recurring profit and loss:Applicable Not applicable There was no other profit and loss items that are consistent with the definition of non-recurring profit and loss.Explanation on defining the non-recurring profit and loss items en

39、umerated in the Interpretative Announcement No.1 on Information Disclosure of Public Securities Issuing Companies-Non-recurring Profits and Losses as recurring profit and loss items Applicable Not applicable No definition of non-recurrent profit and loss items enumerated in the“Interpretative Announ

40、cement No.1 on Information Disclosure of Public Securities Issuing Companies-Non-recurrent Profits and Losses”as recurring profit and loss items during the reporting period.12 Management Discussion and Analysis Global spokesperson for Purcotton Home Textiles and Home Apparel Zhao Liying 2024 Semiann

41、ual Report 13 Section Management Discussion and Analysis I.Main Business of the Company during Reporting Period Winner Medical is a health enterprise that develops both medical and consumption products under its brands of“Winner”and“Purcotton”.The Company has consistently adhered to the core operati

42、ng principles of“quality over profit,brand over speed,and social value over corporate value”.With the evolution of domestic and international markets,the Company has transformed from a sole manufacturer of medical consumables into a diverse enterprise.It now includes traditional wound care and dress

43、ings,advanced wound care,operating room consumables,wet and dry cotton tissues,sanitary napkins,as well as infant and childrens apparel and products,demonstrating its commitment to the health and wellness sectors.1.Medical Consumables Section Winner Medical is a benchmarking enterprise in the domest

44、ic medical consumables industry.Its primary product lines include traditional wound care and wound dressings,advanced wound care,operating room consumables,infection protection,and health and personal care.The Company is one of the earliest medical consumables enterprises in China to establish a ful

45、l industrial chain covering cotton procurement,R&D,production,and direct export.The Companys products have received CE certification from the European Union,FDA approval from the United States,and certification from Japans Ministry of Health.This has enabled us to export to countries throughout Euro

46、pe,the U.S.,and Japan.In 2005,“Winner”brand entered the domestic hospital and drugstore market.With its excellent product quality and service,Winner Medical gradually established a good brand and reputation in domestic hospitals and drugstores.Since the outbreak of public health incident,“Winner”epi

47、demic prevention products have made their way into both hospitals and the civilian market.Their commitment to not raising prices,coupled with high quality of products,has earned widespread praise both at home and abroad,from governments entities and the public alike.As a result,its brand reputation

48、and popularity have significantly increased.Winner Medical prioritizes market demand by staying tuned to clinical and end-user needs.By leveraging R&D along with innovation as the driving force,the Company continually improves its product portfolio.Its business scope extends from sales of single wou

49、nd care products such as cotton gauze to sales of integrated solutions of wound care,infection protection,and health and personal care products.Disposable operating room consumables can reduce nosocomial infection more effectively than reusable medical products.With increasing emphasis on nosocomial

50、 infection by the state and hospitals,as well as residents attention to personal health environment,disposable operating room consumables are gradually accepted by the domestic market.Winner Medicals medical dressing product line has been expanded from traditional dressing products mainly focusing o

51、n gauze products to high-end wound dressing products,such as silica gel foam dressing,hydrocolloid dressing,super absorbent pad,negative pressure drainage products,etc.,which are mainly applied to chronic wound healing scenes such as diabetes,large-area burns and wounds.The ODM and import substituti

52、on space is huge.The Companys technical level in the field of advanced wound dressings has been in the forefront of the industry,and is expected to become the core products for the development of Winner Medical.Traditional wound care and wound dressing products Advanced wound care dressing products

53、Operating room consumables Infection protection Health&personal care Other products Medical cotton,gauze,bandages,etc.Silicone dressings,alginate dressings,superabsorbent dressings etc.Surgical gloves,surgical packs,surgical gowns,etc.Masks,protective clothing,isolation gowns,etc.Oral and nasal cavi

54、ty,medical beauty,personal care,nursing care,etc.Injection and puncture products,test kits,etc.Wet and dry cotton tissues Sanitary napkins Other non-woven products Baby clothing and supplies Adult apparel Other woven products Cotton tissues,wet tissues etc.Sanitary napkins,disposable period panties

55、etc.Facial mask,makeup cotton,cotton diapers etc.Babys leisure wear,bath towels and quilts etc.Adults leisure wear,outing costume,underwear etc.Bedding,toiletries,etc.Winner Medical Purcotton Medical consumables Healthy consumer goods Winner 14 2.Healthy Consumer Goods Section Purcotton originated f

56、rom the development of pure cotton spunlace non-woven fabric,positioning itself as a brand pursuing“medicine close to life,Purcotton care for health”.Its core competitive advantage combines“Medical background,Purcotton philosophy,Quality in our DNA”,making it a health-centric lifestyle brand.The pro

57、duct lineup includes wet and dry cotton tissues,sanitary napkins,infant and childrens apparel and products,adult apparel,and various nonwoven and woven products.Purcotton promotes a lifestyle centered around comfort,health,and environmental friendliness,opting for cotton instead of synthetic fibers

58、to avoid chemical irritation.It provides comprehensive solutions for various everyday situations,boasts a strong reputation among users,and has established a distinct brand image in the field of consumer goods with strong brand appeal.In terms of products,with excellent quality control ability and t

59、echnology research and development ability,the Company continues to introduce medical grade quality consumer goods.The main raw material of the core products of Purcotton is high-quality cotton sourced worldwide to control product quality and safety from the source.All kinds of pollution sources are

60、 strictly controlled in the production process,following the high standard of medical consumables.Disposable underwear,newborn baby clothes and other close-fitting clothing are packaged with medical grade sterilization to further ensure the safety and environmental compatibility of the products.Purc

61、otton products cover multiple consumer scenarios,such as mothers and infants,children and adults,and span multiple product lines,such as high-end pure cotton tissues,female care,baby care,home textile products and apparel.2024 Semiannual Report 15(1)Main Products and Purposes The product categories

62、of the medical consumables segment are divided into traditional wound care and wound dressing,high-end wound dressing,operating room consumables,infection protection,health and personal care and other products;the product categories of the healthy consumer goods segment are divided into wet and dry

63、cotton tissues,sanitary napkins,other nonwoven products,baby clothing and supplies,adult apparel and other textile products.The main categories and images of some products under the Companys medical consumables section are as follows:Product category Main Purpose Product Image of Some Products Tradi

64、tional wound care and wound dressing products For absorbing wound exudate,dressing wounds,and sports protection Medical cotton,gauze,bandages,etc.High-end wound dressing products For creating a moisture balance at the wound interface to optimize its benefits for wound healing,reduce the frequency of

65、 dressing replacement,and reduce secondary damage Silicone dressings,alginate dressings,superabsorbent dressings etc.Operating room consumables For preventing infections in the operating room Surgical gloves,surgical packs,surgical gowns,etc.Infection protection For occupational protection of medica

66、l staff and patient isolation Masks,protective clothing,isolation gowns,gloves,foot straps,hats,etc.Health&personal care For wound cleaning and disinfection,and daily health care Oral and nasal cavity,medical beauty,personal care,nursing care,etc.Other products For health management to meet their me

67、dical needs Injection and puncture products,test kits,etc.Medical sterile-grade wound care Medical gauze sheets available in multiple specifications Medical-grade ingredients ensure gentleness and safety Silicon treatment strip(1pc/box)16 The main categories and images of some products under the Com

68、panys healthy consumer goods section are as follows:Product Category Product Image of Some Products Wet and dry cotton tissues Cotton tissues,wet tissues etc.Sanitary napkins Sanitary napkins,disposable period panties etc.Other non-woven products Facial mask,makeup cotton,cotton diapers,disposable u

69、nderwear,etc.Baby clothing and supplies Babys leisure wear,outing costume,underwear,bath towels,handkerchiefs and quilts,etc.Adult apparel Adults leisure wear,outing costume,underwear,footwear,etc.Other woven products Bedding,toiletries,etc.Global spokesperson for Purcotton Home Textiles and Home Ap

70、parel,Zhao Liying 2024 Semiannual Report 17(2)Main Operating Modes Procurement mode The Company promotes digital platform management and has established a robust procurement management system,procurement process,and risk control platform.Procurement is driven by planning,with procurement plans and s

71、trategies formulated in line with annual,quarterly,and monthly demands.Different modes of procurement are implemented according to the types of materials required,including strategic procurement,bidding procurement,centralized procurement,and separate procurement,among other models.Purchasing needs

72、are integrated with R&D,product specifications,and quality standards to establish technical benchmarks.The purchasing strategies formulated encompass plans,supplier selection,commercial negotiations,and order allocation plans based on supplier performance evaluations.In pursuing a sustainable supply

73、 chain ecosystem,our collaborative suppliers are dedicated to achieving low carbon emissions,cost-effectiveness,transparency,and social responsibility across product development,manufacturing,procurement,and other areas.1)Responsible Purchasing The Company mandates that purchasing requirements be ge

74、nerated by the demand department based on customer orders,sales plans,and production schedules to fulfill production and sales needs.The Groups supply chain then devises tailored purchasing strategies for different procurement types,including strategic,bidding,centralized,and decentralized purchasin

75、g.For instance,strategic procurement rules are uniformly applied to formulate purchasing strategies and plans for bulk raw materials like cotton and cotton yarn.Centralized purchasing strategies for materials or categories conducive to group-wide adaptability and scale effects are employed.To ensure

76、 the effective implementation of the Groups procurement strategy,the Company adopts a system that visualizes the entire procurement process and facilitates supervision and management.This includes demand assessment,sourcing,quotation,price comparison,contract signing,purchase order issuance and appr

77、oval,receipt,warehousing,reconciliation,payment processing,etc.This ensures that the procurement process adheres strictly to the principles of fairness,openness,and impartiality outlined in the procurement management system.2)Procurement Control Process The Company has established several key contro

78、l points in the procurement process to ensure clear responsibilities and rigorous approvals,guaranteeing reliable product quality and stable supply.These controls include the development and approval of the annual procurement plan,procurement strategy guidelines,hierarchical classification managemen

79、t of purchasing,order allocation management process,comprehensive bidding management process for non-commercial groups,a price approval process,and a procurement approval process for strategic materials such as cotton and cotton yarn.Additionally,procurement reviews and other related steps are inclu

80、ded in this framework.Meanwhile,by signing the Integrity Commitment Agreement,the Company works with suppliers to resist corruption,create an open,transparent,self-disciplined,and mutual trust cooperation mechanism,advocate the procurement principle of openness,transparency,and quality priority,and

81、create a sustainable supply chain ecosystem with suppliers.3)Hierarchical Classification Management of Supply Resources Based on the Companys development goals and commodity planning requirements,reserve resources from at least two or more suppliers.For critical materials or services,we establish a

82、framework that encourages competition among multiple suppliers,ensuring supply stability and mitigating risks.At the same time,we follow the Companys supplier evaluation criteria to select vendors to meet our requirements,aiming for a mutually beneficial cooperation model with suppliers.Using the su

83、pplier evaluation system and considering their overall capabilities,suppliers are regularly graded and categorized.These assessments inform the development of cooperation programs and order allocation,focusing on cost control,improving efficiency,and reducing supply risks.4)Supplier Management Proce

84、ss I Admission assessment:New suppliers undergo validation following the Supplier Admission Assessment Specification.Suppliers are evaluated across various dimensions,including technical capability,quality management,planning and production capabilities,and corporate social responsibility,through wr

85、itten assessments.On-site audits are conducted for all key suppliers,with additional audits for other suppliers as needed.The Company enters into agreements such as Purchasing Framework Contract,Quality Agreement,Confidentiality Agreement,Integrity Commitment Agreement,and others with verified suppl

86、iers,establishing a list of qualified suppliers.18 II Performance management:Adhere to the Supplier Performance Management System,and conduct routine performance evaluations of suppliers.Engage in ongoing communication with suppliers regarding their performance status,analyze reasons for any deficie

87、ncies identified,develop improvement plans,monitor the implementation of these plans,and verify their effectiveness.III Annual review:Adhere to the Supplier Management Program to conduct yearly evaluations for key suppliers,those with significant deviations or anomalies in the prior year,and supplie

88、rs with alterations in production sites or equipment.Issue improvement notices for any non-compliance identified during the review process,monitor the implementation of improvements and verify their effectiveness.IV Qualification adjustment:Following the Supplier Grading and Classification Managemen

89、t System and Supplier Performance Management System,as well as the results of the annual review,supplier qualifications are regularly revised.An elimination mechanism is activated for suppliers whose improvements prove ineffective.5)Sustainable Supply Chains The Company keeps improving its green and

90、 sustainable development,such as cooperation with schools and hospitals.At the same time,it also aligns the upstream and downstream of the supply chain to further achieve sustainable development.For example,we have promoted the project of product package de-plasticization;multiple categories of Purc

91、otton products have obtained carbon footprint certification;we optimize the product process to minimize energy usage,and upgrade the production equipment to enable energy recovery and reuse.6)Digital Supply Chain In 2023,the Company introduced a Supplier Relationship Management(SRM)and Supply Chain

92、Management(SCM)supplier collaboration system.Additionally,enhancements were made to the Material Data Management System(MDC)and Product Lifecycle Management(PLM)data management system.The integration of various systems and modules advances digital management,significantly enhancing procurement execu

93、tion efficiency and making pricing modules more transparent.Implementing end-to-end order delivery and inbound and outbound inventory visualization management;leveraging internally developed Business Intelligence(BI)visualization tools by the IT team;integrating demand and supply planning informatio

94、n data to minimize offline communication and enhance overall operational efficiency.Production mode Aligned with the Companys business strategy objectives,and directed by the Company-level S&OP sales and operation plan,we formulate medium and long-term strategic plans and short-term production and p

95、rocurement plans according to the Companys development and customer demand.We streamline the information flow and decision-making process across all upstream and downstream departments through data integration and visualization platforms.Were continuously improving our smart manufacturing,lean produ

96、ction,and agile delivery capabilities.Our goal is to strike the right balance between meeting front-end demand and ensuring timely supply and delivery.In the process of order fulfillment,we match capacity according to the characteristics of different demands and in combination with the actual supply

97、 of human,machine,material,method,and environment.Through the flexible deployment of different production modes(MTO(Make to Order),MTS(Make to Store),ETO(Engineer to Order)and ATO(Assemble to Order),we continuously improve our service level to meet customer demands and create value for customers.I.I

98、n the production mode of Make to Order MTO,products are produced according to the customers original product design;procurement is performed according to the BOM for the accepted order.Therefore,inventory remains almost zero.For OEM customer orders,as the market constantly reduces the delivery cycle

99、,it is common now to combine MTO&MTS production modes.II.In the production mode of Make to Stock MTS,products are not customized for specific customers,and are usually delivered to different customers;production plans are formulated according to market demand and existing inventory.Safe inventory is

100、 determined for such products according to the production cycle and the frequency of demand to ensure that products are available when the customer places an order.III.In the mode of Engineer to Order,specific design requirements from a single customer can be met,usually for small production lots;in

101、 the production process,the value mainly lies in product and packaging design work.Support for custom design is an important part of this production mode.Inventory remains almost zero.IV.In the Assemble to Order mode,the components required to produce finished products are stocked in advance.When th

102、e customer places an order,products can be assembled quickly to meet flexible delivery demands.Common materials are stocked in advance to maintain balance between rapid delivery and inventory.2024 Semiannual Report 19 Sales mode The Company sells products through multiple channels.The main sales cha

103、nnels are shown in the following figure:Marketing mode The Company is developing its products under Winner Medical and Purcotton in a coordinated way.With“caring for health and life,making a better world”as its vision,Winner Medical takes industry-leading product technology and rigorous product qual

104、ity as the cornerstone of its brand value,while its marketing strategies heavily rely on brand reputation and consumer word-of-mouth.Purcotton,known for its pure cotton products,uses distinct strategies to strengthen its brand.By integrating various promotion channels such as directly-sales stores,b

105、rand roadshows,celebrity endorsements,event sponsorship,new media,and advertising,Purcotton keeps conveying to consumers its proposition of“medicine close to life,Purcotton care for health”and its vision of“changing the world with pure cotton”.This approach not only helps enriches the meaning of Pur

106、cotton brand but also boosts awareness and loyalty among consumers.(3)Main Driving Factors of Performance Medical consumables industry and consumer goods industry will keep growing rapidly As global healthcare improves and daily healthcare demands rise,the global medical consumables market is experi

107、encing stable growth and landscape changes.Concurrently,domestic public healthcare institutions are undergoing reform,driven by policies like national examinations,centralized procurement,and SPD/DRG advancements.These changes are expected to lead to consolidation and reshuffling within the medical

108、consumables industry.After public health events,theres heightened focus from the government,healthcare professionals,and consumers on emergency prevention and personal health management autonomy.Consequently,demand for family emergency and daily healthcare has significantly increased compared to pre

109、-event levels.The domestic market for medical and household consumables is rapidly consolidating,providing a favorable external environment for the development of leading enterprises.In October 2021,the CPC Central Committee and the State Council officially announced the Opinions on the complete,acc

110、urate,and comprehensive implementation of the new development concept to achieve carbon peak and carbon neutrality.It is pointed out that strengthening Chinas green and low-carbon technological innovation and continuously expanding green and low-carbon industries will accelerate the formation of new

111、 drivers and sustainable growth poles of the green economy.We will significantly improve the quality and efficiency of economic and social development and provide a strong impetus to build China into a great modern socialist country in all respects.In December 2023,the Opinions on Comprehensive Prom

112、otion of Building a Beautiful China issued by the CPC Central Committee and the State Council emphasized the importance of prioritizing the construction of a beautiful China in the nations development and revival efforts.It underscored the strategic imperative to strengthen ecological civilization c

113、onstruction,and steadfastly pursue a path of civilized development encompassing production,prosperity,and ecological well-being.The aim is to create a picturesque homeland characterized by clear skies,verdant landscapes,and pristine water while advocating for simple,moderate,green,low-carbon,civiliz

114、ed,and healthy lifestyles and consumption habits.At the same time,consumers are increasingly concerned about the environmental performance and sustainability of products,and the rise of environmental protection and low carbon concepts is also driving the transformation and upgrading of the consumer

115、goods industry.Third-party B2C platforms,such as Tmall,JD.com and Amazon Medical consumables Healthy consumer goods Domestic sales Overseas sales E-commerce platforms Real stores Online channels Offline channels Online channels Offline channels Hospitals Pharmacy/convenience stores Government and en

116、terprise platform Private brand OEM/ODM sales Tmall,JD.com and other traditional e-commerce platforms TikTok,Kuaishou and other interest e-commerce platforms Official shopping mall and Wechat mini programs of Purcotton Directly operated and franchised chain stores Supermarkets,convenience stores and

117、 beauty stores Winner 20 High-quality products and precise brand positioning enhance brand value The Company is one of the earliest medical consumables enterprises in China to establish a complete industrial chain that covers cotton procurement,R&D,production,and direct export.It is also among the f

118、irst to implement a medical-grade quality management system in the industry and has passed the ISO13485 Medical Devices Quality Management System Certification.Its product quality complies with the European,American,Japanese,and Chinese standards.Winner Medical enjoys a high brand reputation and rec

119、ognition.In May 2021,Winner Medical was selected by the Federation of Shenzhen Industries as the“Benchmarking Enterprise in Chinas Medical Consumables Sector”and at the same time recognized as an“International Renowned Brand”by the United Nations Industrial Development Organization.In December 2021,

120、“pure cotton spunlace non-woven fabrics and its products”of Winner Medical was awarded as the national single champion of the manufacturing industry.In April 2022,Winner Medical was awarded the honor of“National Pioneer Worker”by the All-China Federation of Trade Unions.Winner Medical has expanded i

121、ts business from the medical field to the consumer goods field,which in return increased the brand value of its consumer products.Purcotton is committed to fulfilling consumers demand for high-quality products which are“comfortable,healthy,and environmentally friendly”.Constantly winning recognition

122、 from consumers since its launch in 2009,Purcotton has rapidly grown into a top brand of maternal and child products on Tmall,and has gained greater market shares in the field of maternal and child consumer products.In October 2019,Purcotton won the reputation of“70 Brand of the 70th Anniversary of

123、the Founding of New China”sponsored by CCTV.In January 2021,Purcotton was honored as one of the“Shenzhen Top Brands”by Federation of Shenzhen Industries.In April 2021,Purcotton was included in the list of the second“Shenzhen Top 100 Brands”announced by Shenzhen Quality City Promotion Association.In

124、conclusion,with high brand value,the Winner Medical and Purcotton brands will help the Company enhance customer loyalty,stabilize product prices,and expand its market share in the competitive market,thereby ensuring its sustainable and stable profitability.The Company needs to comply with the disclo

125、sure requirements of the“Medical Device Business”stipulated in the No.4 Guideline of Shenzhen Stock Exchange for Self-regulatory of Listed Companies-Information Disclosure by Growth Enterprises:The Company needs to comply with the disclosure requirements of the“Textile and Apparel Business”stipulate

126、d in the No.3 Guideline of Shenzhen Stock Exchange for Self-regulatory of Listed Companies-Industry Information Disclosure.II.Analysis of Core Competitiveness 1.Advantages of Business Philosophy and Corporate Culture Winner Medical is committed to the mission of“caring for health and life,making a b

127、etter world”.It has taken the company and the medical dressing industry from modest beginnings to global presence,evolving from original equipment manufacturing to an independent brand that has gained recognition and loyalty from both clients and consumers.After years of development,the Company rema

128、ins committed to R&D innovation and maintaining product leadership.In the hospital sector,it provides a wide range of medical consumables,including infusion sets,gloves,advanced wound dressings,and operating room consumables.Its goal is to become a leading player in this field by offering comprehens

129、ive solutions through a strategy of“internal growth+external growth”.In the retail sector,the Company continuously introduces consumers favorite home personal health care products,fostering a sense of health guardianship and companionship.2024 Semiannual Report 21 Guided by its vision of“changing th

130、e world with pure cotton”,Purcotton advocates a lifestyle centered around pure cotton,emphasizing comfort,health,and environmentally friendliness in all aspects of daily life.The brand aims to convey values of“reassurance,happiness and sustainability”to consumers.Sticking to the“cotton fiber only”pr

131、inciple in its operation,Purcotton aims to develop recyclable and renewable resources.The company aims to gradually replace chemical fibers with natural fibers,maximizing the value and environmental benefits of cotton fibers,while pursuing a path of low carbon,environmental friendliness and sustaina

132、ble development.The visions and business philosophies regarding the Companys two brands are focused on human health,environmental protection,and improving the quality of life,which are in line with humans sustainable development strategy.Adhering to core business principles“quality over profit,brand

133、 over speed,social value over corporate value”,the Company consistently delivers superior solutions and service experiences to customers and users while actively contributing to community development,showcasing its social responsibility.By adhering to core business principles of“hard work,self-criti

134、cism,exploration and innovation,and sustainable development”,the Company consistently provides superior solutions and service experiences to customers.At the same time,it actively contributes to community development,demonstrating its commitment to social responsibility.At the organizational level,w

135、e prioritize building process-oriented structures while establishing an integrated organization to support cohesive business operations.We focus on enhancing organizational efficiency and capacity to elevate business value in the long term.Our team incentives aim to bolster market competitiveness th

136、rough fixed salary enhancements and the implementation of performance-based bonus-sharing systems.We incentivize business ownership and growth,retaining core leaders through equity incentive plans.Regarding talent,we embrace a culture centered on the principles of“high-quality,high-efficiency,high-p

137、erformance and high-return”,fostering an environment conducive to the rapid growth of individuals.We aim to remove barriers to the development of top-tier talent and continually fortify our business partner mechanism.2.Advantages of R&D and Innovation The silicone gel foam dressing and foam dressing

138、s successfully developed and launched by the Company have been awarded Chinas registration certificate for Class II and Class III medical devices respectively.Building on the successful research and mass production of several core foundational materials,the Company has enhanced its technical framewo

139、rk for the second-generation high-end wet wound dressing product line.The silicone gel foam dressings have been upgraded to their fourth generation and successfully launched.Additionally,the hydrophilic fiber dressings have obtained CE registration in compliance with the latest EU MDR regulations,wh

140、ile the medical hydrogel wound dressings have achieved mass production and have been successfully launched.The Company independently developed the pure cotton spunlace non-woven fabric technology in 2005 and has built a complete technology cluster based on the technology,obtaining patent licenses in

141、 more than 30 countries and regions including the United States,Europe,and Japan.The Company focused on the development of core basic materials for the application of operating room consumables such as surgical gowns,isolation gowns,surgical towels and wipes.This effort aims to enhance the comfort o

142、f the products,reduce the cost of production of the products,and further enhance the market competitiveness of the products.The Company was invited to participate in the formulation of many national standards and industry standards,including the performance requirements of pure cotton non-woven surg

143、ical dressings,and technical specifications for contact layer dressings and masks for children.In the area of production and research,since its establishment,the Company has been attaching great importance to scientific and technological innovation and cooperation.It has carried out industryuniversi

144、tyresearch(IUR)projects with many universities and research institutes,including Hong Kong Polytechnic University,Hong Kong Research Institute of Textiles and Apparel,Wuhan Textile University,and Soochow University.In January 2022,the Company and Huazhong Agricultural University jointly established

145、the Cotton Research Institute and appointed Academician Zhang Xianlong as the Chief Cotton Scientist of Purcotton to cooperate in research and development.The research institute relies on biological breeding technology to cultivate cotton strains that are exclusive to cotton,and to discover cotton s

146、trains that are specialized for spunlace non-woven fabrics.In June 2023,the Company and Wuhan Textile University jointly built a comprehensive technological innovation platform for advanced fiber materials in Hubei Province.This initiative aims to facilitate industrial incubation,and complete the in

147、 vitro and in vivo biological evaluation of a new series of artificial blood vessels with high patency rate early,aiming to break the monopoly of artificial blood vessels abroad,and promote domestic alternatives.In November 2023,the Companys bionic artificial cornea project was successfully designat

148、ed as a major scientific and technological research project in Shenzhen,in collaboration with the Southern University of Science and Technology.Venturing into the research of high-value medical bionic implant materials and expanding the application fields of collagen will help the Company enhance th

149、e production capacity of its collagen production line.In the field of consumer products,the Company has developed pure cotton tissues,pure cotton wet tissues,sanitary pads with pure cotton surfaces,as well as disposal cleansing towels,disposable underwear and other products.As the first and major dr

150、after,Purcotton,a wholly-owned subsidiary of the Company,led the development of national standards for soft towels(GB/T 40276-2021),which requires that the fiber composition and content of soft towels shall be identified,and the fiber content tolerance shall comply with the provisions of GB/T 29862(

151、implemented on December 1,2021).In December 2021,“pure cotton spunlace non-woven fabrics and its products”of the Company was awarded as the national single champion of the manufacturing industry.In 2023,we were involved in the establishment of a group standard for technical requirements in carbon fo

152、otprint evaluation for several products,including soft towels,sanitary napkins,and diapers.The Companys core categories-cotton tissues and wet tissues,sanitary napkins and gauze products-have all been certified as green products.After three years of research and development,the Company has become an

153、 industry leader by introducing a pioneering softening technology that eliminates the need for chemical softeners.This innovation enhances the softness of core cotton tissue products while preserving the natural softness of cotton fibers,making them more eco-friendly,sustainable,and natural.22 As of

154、 June 30,2024,the Company obtained 125 patents for inventions,792 patents for utility models,and 422 design patents in China;and obtained 29 patents for inventions and 6 patents for utility models overseas.The Company was regarded as a“Leading Enterprise in Independent Innovation”by the Shenzhen Mun

155、icipal Peoples Government,and a“Shenzhen Enterprise with Intellectual Property Advantages”by the Shenzhen Administration for Market Regulation.3.Advantages of Quality Control Since its establishment,Winner Medical has achieved sustainable development and maintained a leading position in the industry

156、.It is inseparable from the Companys three core principles of“quality over profit,brand over speed,social value over corporate value”.In this context,the quality policy of“Rigorous work,strict compliance with laws and regulations,and continuous improvement to win the full trust of customers”was form

157、ed and has been implemented to date.Based on this guideline,Winner Medical Group has adopted EN ISO13485:2016(ISO13485:2016),Chinas Medical Device Manufacturing Quality Management Practice,the United States 21 CFR Part 820,and the European Union MDD(DIRECTIVE 93/42/EEC),EU MDR(REGULATION(EU)2017/745

158、)and EU PPE(REGULATION(EU)2016/425)as cornerstones,forming a quality management system model based on process management.Under this model,Winner Medical focuses on the research of product quality standards and regulatory requirements of different countries/regions,and actively passes the correspondi

159、ng product registration/certification procedures.It has obtained product access qualifications in China,EU,USA,Japan,UK,Switzerland,Russia,Australia,Malaysia,Thailand,Saudi Arabia and other countries/regions,providing domestic and foreign customers with high-quality products and good after-sales ser

160、vice.At the same time,Winner Medical has been committed to building professional,reliable and comprehensive product quality testing capabilities.The Shenzhen Winner Laboratory and Jingmen Winner Laboratory have been accredited by the China National Accreditation Service for Conformity Assessment(CNA

161、S).With professional and reliable product testing capabilities,it not only provides a guarantee for product quality control but also serves as a source of data for continuous product improvement.To ensure the safety of raw materials for its products,Purcotton uses high-quality cotton from around the

162、 world to produce its core products,such as pure cotton tissue,sanitary napkins with pure cotton surface,and pure cotton wet tissues.All the workshops are managed according to the management requirements for the workshops of medical dressings,which can help strictly control bacterial contamination a

163、nd pollution sources.With its strict quantity management control system,Purcotton can provide customers with high-quality consumer goods that are safe and environmentally friendly.Adhering to the concept of“medicine close to life,Purcotton care for health”,Purcotton not only applies quality natural

164、cotton but also attaches importance to the environmentally friendly weaving and finishing process.To ensure that its products are ecologically safe,no fluorescent brighteners are added.Some of its products are OEKO-TEX Standard 100 certified.Some nonwoven products have passed the testing performed u

165、nder the EU AP(2002)1 and EC1935/2004 EU Food Contact Materials Regulation.4.Product Advantages (1)Medical consumables The Companys product categories include high-end wound dressing products,traditional wound care and wound dressing products,operating room consumable products,infection protection p

166、roducts and health&personal care products,covering application scenarios like clinical and medical institutions and families,which can better meet clients needs of one-stop procurement.In addition to traditional wound care products and wound dressing products,the Company has also developed represent

167、ative high-end wet dressings like silicone foam dressings,hydrocolloid dressings,super absorbent pads and scar treatment strips for chronic wounds that are difficult to heal,which further enrich its products.For the clinical use scenarios,the Company is committed to changing from selling single prod

168、ucts to providing customers with integrated solutions.Its infection protection products include dozens of surgical packs for various sections,such as heart and brain,abdominal cavity,urology,reproduction,facial features,and limbs.In terms of protective products,the Company has successfully developed

169、 and marketed biodegradable masks,cotton-lined masks and other products,providing solutions for the environmental attributes of mask products and greatly enhancing the comfort of mask products.In the field of home care,the Company provides professional products for clinical use such as medical surgi

170、cal masks,saline cleaning pads,hydrocolloid band-aids and medical masks to consumers through portable,sterilized packages.etc.,applying these professional healthcare products and services in daily home care.2024 Semiannual Report 23(2)Healthy consumer goods The Companys healthy consumer goods consis

171、t of nonwoven consumer goods and textile consumer goods.Nonwoven consumer products mainly include wet and dry cotton tissues,sanitary napkins,etc.;textile consumer products mainly include baby clothing and supplies,adult apparel and other textile products.Cotton fiber has ten prominent advantages,in

172、cluding natural,safe,comfortable,naturally degradable,high output ratio,drought-resistant,salt and alkali-resistant,environmentally friendly,time-honored,and great economic and social value.The Company takes the lead in proposing the innovative concept of replacing chemical fibers with cotton and ge

173、tting rid of chemical stimulation,aiming to provide consumers with healthy,comfortable and environmentally friendly consumer goods.Among all,cotton tissue is the pioneering product in the industry,which can partially replace household paper.Pure cotton tissues are made of degradable cotton after phy

174、sical processing.There is less chemical stimulation and the tissues can be reused.The tissues are more comfortable,safe,and environmentally friendly,so consumer acceptance of the tissues has been significantly improved.For pure cotton wet tissues and sanitary napkins with pure cotton surface,cotton

175、materials are innovatively used in the parts of these products that contact human skin to replace traditional chemical fiber and effectively reduce chemical irritation,so they are popular in the markets of baby and female consumers.Due to the excellent breathability and softness of gauze fabrics,the

176、 Companys apparel and textile consumer products such as gauze childrens apparel,household apparel,bedding and bath towels are getting more popular.5.Brand Advantages (1)Brand advantages in the field of medical consumables As a leading enterprise in the medical consumables sector,the Companys core st

177、rategy revolves around“leading products with operational excellence”.Through global exhibitions,the Stable Academys sense control training courses,operating room management forums,wound training programs,and other initiatives,the“Winner Medical”brand has gained widespread recognition in the medical

178、industry.Both domestically and internationally,customers trust the Companys business philosophy and product quality.The Companys medical consumables are sold to 110 countries,mainly developed countries and regions such as Europe,Japan and the United States,and the products under its brand Winner are

179、 mainly sold to developing countries and regions such as Asia,Africa,and Latin America.The Company provides services for world-renowned medical supplying companies such as Mlnlycke,Lohmann,and PAUL HARTMANN.The products of“Winner Medical”brands have covered all public and most private hospitals in H

180、ong Kong.(2)Brand advantages in the field of healthy consumer goods Purcotton is a wholly-owned subsidiary of Winner Medical,focusing on natural cotton as its primary raw material and adheres to the principle of“quality first”.The Company is committed to continuous innovation to provide consumers wi

181、th comfortable,healthy,and environmentally friendly all-cotton products across various categories.This commitment has garnered the recognition and trust of over 56 million members.Upholding the brand philosophy of“peace of mind,happiness,and sustainability”,Purcotton has innovatively developed three

182、 core products-100%cotton tissues,Nice Princess sanitary napkins,and BBNice cotton diapers-starting from a single cotton flower.This initiative has expanded into diverse categories,including personal care,household cleaning,infant care,clothing,and lifestyle products,creating a strong identity for“n

183、ew Chinese products”that are recognized for their high quality.Purcotton has established a formidable reputation in the maternal and infant sector as well as the daily necessities market,effectively creating competitive barriers and enhancing product value.6.Advantages of Sales Channels (1)Advantage

184、s of online channels In terms of online channels,the Companys“Winner Medical”and“Purcotton”have completed the deployment of mainstream third-party e-commerce platforms,including Tmall,JD.com,Pinduoduo,Vipshop and Amazon.With the huge user traffic gathered,its sales have covered most online shopping

185、consumer groups,and the sales data indicated that the sales of its products rank among the top in the relevant product categories in major e-commerce platforms.With the attributes of“sales+social”,Purcottons official mall and WeChat mini-programs are important platforms for its product display,user

186、interaction,and brand promotion.At the same time,Purcotton is also cooperating with new social retail platforms such as TikTok,Kuaishou and Xiaohongshu,which helps it open up new sales growth channels.24(2)Advantages of offline channels In the medical consumables sector,as of the end of the first ha

187、lf of 2024,the Companys products have been extensively integrated into domestic medical institutions,reaching a network of 190,000 retail pharmacies.Our customers and distributors span over a hundred countries and regions in the international market,including Europe,Japan,and the United States.Our b

188、usiness model encompasses a variety of approaches,such as direct sales under private brands,distribution,and OEM/ODM partnerships.Leveraging years of product leadership and a strong reputation in the industry,we have built a robust portfolio of high-quality customer assets.In the healthy consumer go

189、ods section,as of June 30,2024,Purcotton has opened 444 offline stores(including 84 franchisees)in more than 100 mid-and high-end shopping malls in Shenzhen,Shanghai,Beijing,Guangzhou and other key cities in China.The Company integrates its brand concept into its store design.It hires well-known des

190、igners at home and abroad to upgrade store image and enhance consumer experience with an exhibition-style product display balancing both aesthetics and richness of products.It also adds an experience area to highlight product display and consumer experience,which has helped increase the Companys sal

191、es revenue and brand awareness.As for offline terminals like chain stores and supermarkets,based on Purcottons positioning of high-quality consumer goods,the Company mainly deploys Purcotton products in nationally renowned supermarket chains,high-end boutique supermarkets,leading regional supermarke

192、ts,convenience store chains,beauty stores,and offline mother and baby stores.Meanwhile,the Company has set up dedicated sales teams to cover the bulk purchase or customized purchase needs of corporate clients.Purcotton also strives to start overseas market layouts by cooperating with local distribut

193、ors.(3)Advantages of integration between online and offline channels The omnichannel retail model is a newly emerging retail form that provides consumers with a consistent shopping experience by integrating physical stores,third-party e-commerce platforms,and mobile e-commerce channels.In such a for

194、m,the convenience of online channels and the consumer experience of offline channels can complement each other.Having a deep insight into the trend of online and offline omnichannel integration,the Company thoroughly optimized and integrated various channels to integrate traffic and sales of offline

195、 stores,supermarkets,stores and online apps,and home delivery platforms(Meituan,and ele.me,etc.),thereby further improving its operating efficiency and performance.Online channels can meet offline consumers subsequent consumption needs while offline channels can provide online consumers with further

196、 product information and service experience.Traffic flow can be directed between the two kinds of channels,so online and offline traffic can be effectively obtained.As of June 30,2024,there were more than 56 million of domain-wide Purcotton users,including over 29 million registered members of its p

197、rivate platforms(14 million store registered members,and over 15 million registered members of its official website and apps).7.Advantages of Full Industrial Chain Adhering to the business philosophy of“quality over profit”,the Company constantly improves its product quality,and the ability of cost

198、and delivery management,building a full industrial chain with advantages from R&D,production,and sales.With eleven manufacturing branches/subsidiaries,the Company distributes a wide range of high-quality medical consumables and healthy consumer goods worldwide each year.Among them,Winner Medical(Jin

199、gmen),established in 1995,covers an area of 67,000 square meters and is the primary site of Purcotton baby products,clothing,and medical abdominal pads.Winner Medical(Yichang),established in 1999,operates with 137 advanced air-jet looms and serves as the primary production base for raw materials.Win

200、ner Medical(Tianmen),founded in 2000 and spanning an area of 150,000 square meters,specializes in producing pure cotton spunlace non-woven fabrics,cotton soft towels,medical dressings,and medical protection products.It serves as a key domestic production base for pure cotton spunlace non-woven fabri

201、cs and medical gauze.Established in 2001,Winner Medical(Jiayu)covers an area of 93,000 square meters and owns disposable travel,cleaning and disinfecting and beauty care product series based on cotton.Winner Medical(Chongyang)was established in 2001 and covers an area of 140,000 square meters,and is

202、 the main force in the production of gauze wound dressings and disposable surgical combination kits,etc.Winner Medical(Huanggang),established in 2005 and covering an area of 550,000 square meters,is the primary site for the production of pure cotton spunlace non-woven fabric,cotton tissues,sanitary

203、napkins and masks,and advanced dressing products.Established in 2017,Winner Medical(Wuhan)covers a combined area of approximately 467,000 square meters in Phase I and Phase II,introducing electron beam sterilization and international modern cotton spunlace production lines.In January 2022,the Compan

204、y acquired an industrial land of nearly 15,000 square meters located in Guanlan Street,Longhua District.In the future,the land will be built into an industrial base for medical biological and infection control protection in the Guangdong-Hong Kong-Macao Greater Bay Area,which will be used for scient

205、ific research innovation and industrial production of medical biology,high-end medical dressings and medical infection control protection products.In 2022,the Company acquired three companies,i.e.Longterm Medical,Winner Guilin,and Winner Medical(Hunan),to solidify the key foundation for building the

206、 capability of a one-stop medical consumables solution.Through continuous construction and improvement,the daily management system within the factory was optimized through lean management,standardization,automation,digitalization and greening.In the future,the Company will continue to combine the co

207、nstruction of smart factories,boldly explore and practice in the areas of intelligent manufacturing and intelligent logistics,and gradually realize the excellence of smart manufacturing.2024 Semiannual Report 25 III.Analysis of Main Business 1.Business Analysis Winner Medical focuses on two main sec

208、tors:medical consumables and healthy consumer goods.Having shaken off the impact of the public health emergencies,we envision 2024 as the dawn of a new era for Winner Medical.Guided by our three core operational principles-prioritizing quality over profit,brand over speed,and social value over corpo

209、rate value-we remain committed to our strategic directive of“leading products with operational excellence”.This approach allows the company to realign itself on a path of normalized growth and upward trajectory.Due to the impact of the high base brought by infection protection products(RMB 620 milli

210、on)in the first quarter of last year,the Companys revenue in the first half of 2024 was RMB 4.03 billion,down by 5.5%;net profit attributable to shareholders of listed companies was RMB 380 million,and net profit after extraordinary gains and losses were RMB 330 million,down by 43.6%and 40.6%,respec

211、tively.The public health events had almost no impact on the Companys revenue base since the second half of 2024.The revenue for the second quarter reached RMB 2.12 billion,reflecting an 11.0%year-on-year increase,indicating that revenue is expected to enter a positive growth cycle.(1)Medical consuma

212、bles business:the effects of the high base are gradually diminishing,and the development of the core categories is accelerating The medical consumables business saw rapid growth during the public health crisis,and after it ended,the Company underwent a series of significant adjustments in 2023.These

213、 included strengthening its product mix,managing its inventory of infection protection products,and recruiting talent in key areas.Compared to 2019,the Companys medical consumables business has reached new heights in product variety,distribution capabilities,and brand recognition.Our medical busines

214、s strategy for 2024 is clearly defined and executed decisively based on this solid foundation.We are steadily progressing along this established strategy,with positive trends in operational development.In the first half of 2024,the medical sector generated a revenue of RMB 1.72 billion,marking a yea

215、r-on-year decline of 20.9%,and accounting for 43%of the Companys overall revenue.In the second quarter alone,revenue reached RMB 860 million,representing a year-on-year increase of 6.6%,reversing the quarterly revenue growth rate.Excluding the fluctuation in infection protection products,the convent

216、ional medical consumables business reported a revenue of RMB 1.55 billion in the first half of the year,marking a 7.5%year-on-year increase.Overall,the development remains stable and positive.Among them,the development of the core category accelerated:advanced dressing and health personal care busin

217、ess achieved revenue of RMB 380 million and RMB 180 million respectively in the first half of the year,up by 34.1%and 56.2%respectively,demonstrating positive growth momentum.Innovative R&D drives product development.By leveraging various market opportunities in advanced dressings,the Company plans

218、to increase investment in both R&D and marketing.This approach aims to enhance the quality and productivity of advanced dressings,positioning us to lead industry advancements and expand our presence on the international stage.As of the end of the reporting period,we hold 873 patents in the medical c

219、onsumables segment and 388 medical product registrations(including 25 registrations of Category III medical products).In terms of channels,in the first half of 2024,the Company continued to enhance its marketing initiatives through various means and actively expanded its marketing channels.Besides,t

220、he Company has moved past the impacte of public health events,and its medical business channels have returned to the stable income structure.During the reporting period,foreign sales channels generated a revenue of RMB 790 million,marking a 14.1%increase year-on-year.This accounted for 46%of the tot

221、al income of the medical sector,demonstrating Winner Medicals strong foothold in the international market.Domestic hospital channels have steadily expanded,and the C-end business,especially cross-border e-commerce,has made a breakthrough:by the end of the reporting period,the Company has obtained ne

222、arly 17 million followers on the domestic e-commerce platform,built a healthcare category matrix,and seized the new development trend of medical consumer goods.The Company has been gained access to nearly 190,000 domestic leading offline pharmacies,and continues to lead in the ranking of core single

223、 items on the cross-border e-commerce platform(Amazon).(2)Healthy consumer goods business:Pure cotton products build differentiation and core popular products lead to growth In recent years,the consumer goods sector has proven resilient,achieving growth in every performance period.Purcotton has cons

224、istently strengthened its internal capabilities,maintaining a leading market share in key product categories,improving channel management,expanding its membership base,and enhancing brand perception.As we move into 2024,the Company is dedicated to continuous improvement.We focus on strategic product

225、 offerings,elevating our core rankings through research and development innovations and integrated marketing.On the distribution side,we plan to optimize and accelerate our brick-and-mortar store expansions while increasing our presence online and enhancing operational capabilities.To boost profitab

226、ility,Purcotton is actively improving margins through new product iterations,controlled discounting,cost reduction strategies,and refined operational management.In the first half of 2024,Purcotton realized a revenue of RMB 2.28 billion,an increase of 10.6%year-on-year,accounting for 57%of the Compan

227、ys overall revenue;of which the second quarter realized a revenue of RMB 1.24 billion,an increase of 13.8%year-on-year,and the overall development maintains a strong upward momentum.26 In terms of products,Purcotton tries to build a differentiated product matrix around“one cotton,one fiber”.During t

228、he reporting period,nonwoven products and woven products contributed revenue of RMB 1.19 billion and RMB 1.09 billion,respectively,with respective year-on-year increases of 14.8%and 6.3%.The Company has enhanced communication with consumers,effectively promoted the benefits of cotton soft towels,and

229、 expanded new product use scenarios.In the first half of the year,sales of our core productsdry and wet cotton tissuesdrove significant category growth,achieving a revenue of RMB 680 million,a 24.8%year-on-year increase.Operating revenues for sanitary napkins and adult apparel reached RMB 320 millio

230、n and RMB 440 million,representing year-on-year growth of 7.6%and 8.9%,respectively.Additionally,wet and dry cotton tissues and sanitary napkins experienced year-over-year growth of 28%and 16%in the second quarter.By the end of the reporting period,Purcotton had accumulated 501 patents of various ty

231、pes through R&D and innovation,enriching product categories and improving product competitiveness.In terms of channels,Purcotton has diversified online and offline channels,including traditional third-party platforms such as Tmall,JD.com,Vipshop,e-commerce platforms such as TikTok,Xiaohongshu and ot

232、her interest-driven e-commerce platforms,as well as its official website and applets and other self-owned platforms.In terms of the offline channel,the strategy involves direct encryption of offline presence in first and second-tier cities,while focusing on joining in the core of third and fourth-ti

233、er cities.At the same time,through the mode of offline experience and online re-purchase,Purcotton achieved deep integration of multiple channels,with platforms complementing each other.As of the end of the reporting period,there were approximately 56 million members across all domains,an increase o

234、f 7.0%from the end of last year.Online channels focus on new products and popular matrix,strengthen mutual penetration between categories,and strive to improve the conversion rate of new products and the repurchase rate of former customers.During the reporting period,the online channel achieved a re

235、venue of RMB 1.38 billion,up by 11.1%year-on-year,among which the traditional third-party e-commerce platform increased by over 15%,and the interest-driven e-commerce platform achieved breakthrough growth(for example,TikTok increased by nearly 80%year-on-year).The development of offline stores has b

236、een accelerated,and the profitability has returned to that of 2019.During the reporting period,offline stores realized a revenue of RMB 700 million,an increase of 8.9%.By the end of Jun 2024,there were 444 offline stores(including 360 direct stores and 84 franchise stores),and 42 new stores were ope

237、ned in the first half of the year(31 direct stores and 11 franchise stores).(3)Profitability:infection protection products have impacted the performance of medical business;however,Purcotton has returned to a stronger position compared to 2019.In the first half of 2024,the Company improved its opera

238、tional capacity,with inventory turnover efficiency also restored to 2019 level.The profitability performance of the two businesses diverged due to the varying industry conditions they operate.In the first half of 2024,demand for infection protection products returned to normal.As the company activel

239、y promoted sales,its pricing aligned with market trends,in stark contrast to the unusually high gross profit seen during the same period last year.The gross profit for infection protection products fell from 53.3%last year to 20.2%this year,resulting in an overall gross profit margin for the medical

240、 consumables business dropping by 7.1 percentage points to 38.1%.In the healthy consumer goods segment,in the first half of 2024,the Company continued to drive profitability through new product iteration,product structure optimization,discount control,cost reduction and improved operation management

241、.Despite the fluctuation in cotton prices,the gross profit margin in Purcotton reached 56.9%,down 1.3 percentage points year-on-year.However,the operating profit margin reached 12.8%,and the profitability returned to a better level in 2019.Revenue and profit have increased,demonstrating that Purcott

242、ons growth does not come at the expense of profitability.The Company remains committed to sourcing global high-quality cotton,focusing on product innovation and advanced production technology to deliver excellent products to consumers,while constantly improving its internal operation and management

243、capabilities.This approach underscores a sustainable and high-quality development trend as a whole.(4)Outlook for future development:Focus firmly on the two main industries and take the road of high-quality development Medical consumables are just-demanded,high-frequency,widely-used products,with hu

244、ge domestic and international market space.The medical consumables industry in China is extremely decentralized,but in overseas markets,after decades of development,the concentration effect of the leader has emerged.With a strong manufacturing capacity,Winner Medical relies on its brand awareness an

245、d reputation accumulated in recent years to further consolidate the construction of online and offline channels,laying a solid foundation for the steady development of conventional products and the continuous improvement of market share.In the future,Winner Medical will endeavor to enhance its endog

246、enous capabilities in clinical R&D,marketing,material development and industry chain control,and stay active to seek opportunities for outward mergers and acquisitions to make great strides toward the strategic goal of“leading in medical consumables and providing one-stop medical consumables solutio

247、ns”.Healthy consumer goods brand-Purcotton,backed by the parent companys medical background and quality genes,has formed a differentiated competitive advantage with“all-cotton”comfortable,healthy,environmentally friendly materials,high stickiness of the customer base,and excellent product quality.In

248、 todays climate of mindful consumption,Purcotton is committed to delivering high-quality products.Rather than catering to short-term trends by compromising quality or engaging in price wars,we focus on fostering sustainable,high-quality growth for our business.Purcotton will continue to focus on the

249、 scenarios,practicing the best-selling strategy,while actively exploring both domestic and international online and offline channels.This will help more consumers access high-quality cotton products at competitive price,reduce environmental pollution,and promote a more natural way of life.Purcotton

250、will continue to promote a healthy lifestyle of cotton,shaping the brand perception,and conveying its core mission and brand value of“changing the world with pure cotton”.The company is committed to advancing its brand development.2024 Semiannual Report 27 Opportunities always exist alongside challe

251、nges in the complex and changing external environment.The Company will continue to promote the core strategy of“leading products with operational excellence”,focusing on its main business,while pursuing parallel development in both medical and consumer sectors online and offline.It aims for synergis

252、tic development of endogenous and exogenous,striving to open a new chapter in the high-quality development of Winner Medical.2.Business Management Analysis (1)Product R&D The Company sticks to independent innovation and development of basic materials.In the field of medical wound care,the Company ha

253、s refined its technical layout for the second-generation high-end wet wound dressing product line.The silicone gel foam dressings have been upgraded to their fourth generation and successfully launched.Additionally,the hydrophilic fiber dressings have obtained CE registration under the latest EU MDR

254、 regulations,and the medical hydrogel wound dressings have achieved mass production and successful launch.In the field of medical consumables,the Company focuses on the development of core basic materials for the application of operating room consumables such as surgical gowns,surgical towels and wi

255、pes.This effort aims to enhance the comfort of the products,reduce the cost of production of the products,and further enhance the market competitiveness of the products,ultimately providing a better experience of the products for the medical practitioners and other users,while creating greater value

256、 for users.In the area of production and research,in June 2023,the Company and Wuhan Textile University jointly built a comprehensive technological innovation platform for advanced fiber materials in Hubei Province.This initiative aims to facilitate industrial incubation,and complete the in vitro an

257、d in vivo biological evaluation of a new series of artificial blood vessels with high patency rate.The goal is to break the monopoly of artificial blood vessels abroad,and promote the use of domestic alternatives.In November 2023,the Companys bionic artificial cornea project was successfully designa

258、ted as a major scientific and technological research project in Shenzhen,in collaboration with the Southern University of Science and Technology.Venturing into the research of high-value medical bionic implant materials and expanding the application fields of collagen will help the Company enhance t

259、he production capacity of its collagen production line.In the field of health consumables,the Company has emerged as an industry leader by pioneering a softening technology that eliminates the use of chemical softeners.This innovation enhances the softness of core cotton tissue products while maximi

260、zing the retention of the natural softness of cotton fibers,making it more eco-friendly,sustainable,and natural.The Company has pioneered a unique cotton-covered yarn technology along with an innovative finishing process,leading to the successful development of elastic gauze that boasts more than si

261、x times the elasticity of traditional gauze.This breakthrough addresses the discomfort often associated with conventional gauze products.Our elastic gauze has been incorporated into childrens outdoor wear and home apparel,giving us a strong edge in the market.For the first time,the Company has devel

262、oped probiotic anti-allergic antibacterial gauze.This product effectively reduces allergens and inhibits the growth of harmful bacteria through our proprietary probiotic microcapsule wrapping technology.Its already being used in baby jumpsuits and other infant products.Additionally,we have developed

263、 a biological wave anti-mosquito solution.By analyzing and extracting the specific wave frequency of pyrethrins that resonates with the fiber surface,we can paralyze mosquitoes,achieving effective repellent action.This approach uses pure biological wave technology without any chemical additives,ensu

264、ring it is gentle on the skin,odorless and safe.This innovation has been applied to baby pants.The company continues to carry out the excavation and transformation of low-carbon production processes,and has completed the verification statement of carbon footprint for five core products.In addition,o

265、n that basis,the company has carried out carbon reduction by the low-temperature de-bleaching technology,with the unit steam consumption reduced by more than 30%.The company has also carried out research with Tianjin Polytechnic University on the comfort of all-cotton leisure wear,and with Jiangnan

266、University on the technical development of cotton and cotton-type yarn performance enhancement.(2)Brand building Winner Medical is dedicated to strengthening its brand image,one that resonates with consumers and earns the trust of doctors.We are enhancing our visibility and reputation through media

267、partnerships and advertising,building academic marketing expertise via clinical outreach,and supporting users and special groups through public welfare initiatives-all to drive our brand marketing strategy.In the first half of the year,Winner Medical collaborated with CCTV.com for a promotional camp

268、aign featuring our“Cotton Lined Mask”,generating over 100 million impressions.In partnership with professional physicians,we launched the“Saline Wet Tissues”,underscoring our commitment to providing comfortable,eco-friendly,high-quality medical products.We participated in four major medical trade fa

269、irs,including CMEF,and in August 2024,we received the CPEO Golden Award for Health Personal Care Brands at the 16th China Health Industry Ecological Conference-CPEO.Our focus on professional medical engagement highlights Winner Medicals diverse product range and robust capabilities.Through various d

270、omestic outreach efforts,we showcased not only our extensive product line but also our technological advancements,R&D innovations,and industry leadership.The“Health Month”initiative in May,an original Winner Medical initiative,included dozens of offline health education events to promote professiona

271、l medical knowledge,embodying our corporate vision of“caring for health and life,making a better world.”28 Purcotton also continues to deepen its emotional connection with consumers through interactive communication.Through a variety of initiatives-spokesperson initiatives,charitable actions,offline

272、 lifestyle festivals,eco-friendly campus activities,and creative subway exhibitions-we are enhancing our brand influence with heartfelt original content.This approach allows us to deeply connect with our brand with values centered around cotton,environmental sustainability,and a warm,impactful prese

273、nce.In 2024,we partnered with renowned celebrities Guo Jingjing,Zhao Liying,and Sun Qian to share New Year greetings with the theme“Every Generation Has a Cotton Era”,showcasing high-quality cotton products for all ages.In February,our sanitary pad brand,Nice Princess,launched the“Nice For Her”initi

274、ative,promoting menstrual health.This campaign collaborated with the China Womens Development Foundation and Ai Xiaoya to distribute“Menstrual Charity Packs”to underprivileged female students in primary and secondary schools.We also established menstrual health education programs and introduced sani

275、tary pad sharing boxes across several universities,offering emergency sanitary pads for free in malls and stores.These initiatives not only fostered a more supportive environment for women but also enhanced our connection with female consumers,earning widespread societal recognition.On the eve of In

276、ternational Womens Day,our campaign“Choose Nice Princess for Sleep Pants”reached an audience of 33 million through elevator media advertising.During World Sleep Day,we integrated our brand into popular culture by featuring spokesperson Zhao Liying in the hit drama The Legend Of Shen Li,while simulta

277、neously launching our spring and summer product lines,increasing awareness of Purcottons home textiles and driving sales growth.On Earth Day,April 22,we launched the“Mountain and Sea Healing Project.”This initiative features events such as the Upcycled Clothing Store campaign,community clean-up hike

278、s,and donations of summer protection supplies for forestry workers and sanitation staff.This blend of quality original content and actionable efforts engaged university students and environmental advocates,further solidifying the brands commitment to green sustainability.For Childrens Day on June 1,

279、we specially curated the“Listen to Childrens Voices”theme,featuring a call for submissions,a creative subway exhibition,a themed video,and an offline childrens fashion show.This initiative reflects our brands dedication to listening to and understanding children,fostering a connection between adults

280、 and kids.On June 22,we held a meet-and-greet event with Zhao Liying,our global ambassador for home textiles and loungewear,in Chongqing.During the event,Zhao Liying showcased our high-quality cotton products and shared lifestyle tips for achieving“greater comfort at home with cotton.”The livestream

281、 attracted over 9.05 million viewers,enhancing consumer awareness of Purcottons brand philosophy and product benefits,while further reinforcing brand recognition and favorability among consumers.YoY changes in key financial data Unit:yuan Current reporting period Same period last year Year-on-year i

282、ncrease/decrease Reason for change Revenue 4,033,505,104.33 4,266,838,038.66-5.47%No major changes Cost of sale 2,068,470,442.58 2,071,428,206.72-0.14%No major changes Selling Expenses 1,055,741,084.22 960,442,911.44 9.92%No major changes Administrative Expenses 309,446,026.40 289,596,702.14 6.85%No

283、 major changes Financial Expenses-37,442,539.84-52,794,426.69-29.08%No major changes Income Tax Expenses 67,151,050.24 114,886,459.15-41.55%Mainly due to a decrease in total profit R&D expenses 143,142,952.33 194,636,202.14-26.46%No major changes Net cash flow from operating activities 193,333,516.7

284、6 158,178,712.89 22.22%No major changes Net cash flow from investing activities-423,873,353.55 380,420,978.74-211.42%Mainly due to the decrease in the redemption of financial products and the increase in foreign equity investments during the period.Net cash flow from financing activities-560,896,220

285、.86-678,722,588.25-17.36%No major changes Net increase in cash and cash equivalents-783,341,536.49-134,381,719.01 482.78%Mainly due to a decrease in the redemption of financial products and the increase in foreign equity investments during the period.Significant changes in the profit composition or

286、profit source of the Company during the reporting period 2024 Semiannual Report 29 Applicable Not applicable There was no significant change occurred in the profit composition or profit source of the Company during the reporting period.Products or services accounting for more than 10%Applicable Not

287、applicable Unit:yuan Revenue Cost of sale Gross profit margin Year-on-year increase/decrease in revenue Year-on-year increase/decrease in cost of sale Change in gross profit margin By product or service By industry Medical consumables 1,718,139,287.93 1,063,575,499.62 38.10%-20.93%1*-10.68%-7.11%Hea

288、lthy consumer goods 2,282,226,506.99 983,852,286.64 56.89%10.63%14.08%-1.30%2*By product Medical consumables-traditional wound care and wound dressing products 582,420,123.38 402,683,510.01 30.86%2.22%11.13%-5.54%Healthy consumer goods-wet and dry cotton tissues 680,511,245.81 342,633,199.41 49.65%2

289、4.83%3*37.13%-4.52%Healthy consumer goods-baby clothes 448,607,894.90 180,674,777.06 59.73%4.31%0.08%1.70%Healthy consumer goods-adult apparel 436,146,654.99 149,413,469.45 65.74%8.93%2.95%1.99%By region Domestic 3,128,691,807.63 1,517,593,464.58 51.49%-10.26%-7.47%-1.46%Abroad 871,673,987.29 529,83

290、4,321.68 39.22%16.26%28.25%-5.68%Note:1*Revenue from medical consumables decreased by 20.93%compared with the same period of the previous year,mainly due to a significant drop in demand for infection protection products.2*The gross profit margin of the Healthy Consumer Goods business decreased by 1.

291、30%,mainly due to rising cotton purchase prices.3*Revenue from wet and dry cotton tissues increased by 24.83%year-on-year,driven by enhanced communication with consumers,innovative usage scenarios,and strengthened product capability.If the statistical caliber of the Companys main business data is ad

292、justed in the reporting period,the Company shall follow the primary business data in the past year changed by the caliber at the end of the reporting period 30 Applicable Not applicable Whether the Company has sales terminals in brick-and-mortar stores Yes No Distribution of brick-and-mortar stores

293、Types of stores Number of stores Area of stores Number of new stores during the reporting period Number of stores closed at the end of the reporting period Reasons for store closings Brands involved Direct-sale stores 360 109,012 31 8 Voluntary store closure due to contract expiration or personal pr

294、eference Purcotton Franchises 84 18,439 11 1 Mall renovation and closure due to contract expiration Purcotton Total area and performances of direct-sale stores Range of areas Number of stores Total area Revenue in January-June 2024(10,000 yuan)Revenue for the same period last year(10,000 yuan)Averag

295、e performance of stores Reasons Year-on-year increase/decrease Less than 300 154 33,734.55 25,795.72 25,645.98 6.62%300-500 98 36,225.86 21,513.65 21,617.23 7.38%500-800 25 15,461.47 7,532.47 7,697.32 11.82%More than 800 8 7,310.38 2,361.90 2,475.81-5.27%Total 285 92,732.26 57,203.74 57,436.34 3.44%

296、Note:The above list includes Purcotton stores that have been open for over 12 months as of June 30,2024,including those that have downsized this year.Top 5 Stores in terms of Operating Revenues No.Name of stores Opening date Revenue(yuan)Average performance of the store(RMB/m2/half year)1 First Augu

297、st 6,2012 6,638,099.55 11,351.25 2 Second October 25,2017 6,326,354.08 15,647.67 3 Third July 20,2016 5,649,311.73 12,019.81 4 Fourth November 11,2017 5,422,761.37 4,889.78 5 Fifth January 18,2018 5,257,994.07 12,609.10 Total-29,294,520.80 9,813.61 New stores of listed companies Yes No 2024 Semiannu

298、al Report 31 Name of stores Address of stores Opening year Contract area(m2)Investment amount(yuan)Product category Business type Business model Property ownership status Number of stores Direct-sale stores of Purcotton Central China 2024 802.70 3,875,724.92 Healthy consumer goods Retail Direct-sale

299、 stores Purcotton leasing 3 Direct-sale stores of Purcotton North China 2024 606.00 4,931,270.63 Healthy consumer goods Retail Direct-sale stores Purcotton leasing 3 Direct-sale stores of Purcotton West China 2024 1,442.25 9,732,646.15 Healthy consumer goods Retail Direct-sale stores Purcotton leasi

300、ng 6 Direct-sale stores of Purcotton South China 2024 1,320.15 8,689,348.54 Healthy consumer goods Retail Direct-sale stores Purcotton leasing 8 Direct-sale stores of Purcotton East China 2024 1946.54 10,871,434.65 Healthy consumer goods Retail Direct-sale stores Purcotton leasing 9 Direct-sale stor

301、es of Purcotton Northeast China 2024 410.26 1,955,907.47 Healthy consumer goods Retail Direct-sale stores Purcotton leasing 2 Purcotton franchises North China 2024 391.00 518,003.71 Healthy consumer goods Retail Franchisees Purcotton franchisees 2 Purcotton franchises South China 2024 173.52 433,605

302、.22 Healthy consumer goods Retail Franchisees Purcotton franchisees 1 Purcotton franchises West China 2024 554.43 965,675.70 Healthy consumer goods Retail Franchisees Purcotton franchisees 3 Purcotton franchises Central China 2024 316.32 589,369.45 Healthy consumer goods Retail Franchisees Purcotton

303、 franchisees 2 Purcotton franchises East China 2024 314.00 407,725.65 Healthy consumer goods Retail Franchisees Purcotton franchisees 1 Purcotton franchises Northeast China 2024 276.42 617,852.12 Healthy consumer goods Retail Franchisees Purcotton franchisees 2 Total 8,553.59 43,588,564.21 42 Does t

304、he Company disclose the information on Top 5 franchises Yes No IV.Other Information Required by the Disclosure Guidelines for Textile and Apparel-Related Sectors 32 1.Production Capacity The Companys own production capacity Current reporting period Same period last year More than 10%YoY change in pr

305、oduction capacity utilization rate Yes No Business category Product category Unit January-June 2024 January-June 2023 Percentage of change in production capacity utilization rate Change reason description Production capacity Output Production capability utilization rate Production capacity Output Pr

306、oduction capability utilization rate Healthy consumer goods Cotton tissues 0,000 kits 18,196 9,087 50%17,987 7,742 43%7%Sanitary napkins 0,000 pieces 39,836 29,406 74%31,869 20,225 63%11%New production equipment and production lines,more complete product types,increased market demand,more orders Is

307、there overseas production capacity?Yes No 2.Sales Model and Channels Sales channels and actual operation of products The Companys healthy consumer goods are involved in the textile and apparel industries.The sales channels for healthy consumer goods include online sales and offline stores.Unit:yuan

308、Sales channels Revenue Cost of sale Gross profit margin Year-on-year increase/decrease in revenue(%)Year-on-year increase/decrease in cost of sale(%)Change in gross margin ratio(%)Online Sales 1,381,019,123.38 647,236,708.42 53.13%11.14 13.83-1.11%Offline stores 704,826,144.15 247,037,256.65 64.95%8

309、.94 8.52 0.14%Reasons for change 2024 Semiannual Report 33 3.Selling Expenses and Composition Item Current period amount(Yuan)Previous period amount(Yuan)Year-on-year increase/decrease Reasons for differentiation Employee Compensation 308,895,689.06 315,528,733.79-2.10%No major changes Travel expens

310、es 11,089,494.35 10,524,681.48 5.37%No major changes Office communication costs 6,712,347.78 6,090,498.20 10.21%No major changes Sales commissions and expenses of e-commerce platform 150,321,611.77 125,398,549.11 19.88%No major changes Insurance premiums 2,303,225.44 2,967,753.30-22.39%No major chan

311、ges Depreciation and amortization 117,958,551.43 112,902,943.06 4.48%No major changes Advertising and promotion expenses 339,609,578.47 276,337,254.06 22.90%No major changes Lease and property management expenses 76,942,306.30 77,531,439.61-0.76%No major changes Others 41,908,279.60 33,161,058.83 26

312、.38%No major changes Total 1,055,741,084.22 960,442,911.44 9.92%No major changes Note:“3.Sales expenses and composition”and“7.Inventory situation”reflect data of the entire Company,while the other tables under“4.Other information required by the information disclosure guidelines for textile and garm

313、ent related industries”pertain especially to Purcotton within the textile and garment sector.4.Franchising and Distribution The proportion of franchisees and distributors sales revenues exceeds 30%Yes No Top 5 franchises No.Name of franchisee Start date of cooperation A related party or not Total sa

314、les(yuan)Level of franchisee 1 Franchisee 1 December 28,2022 No 5,367,753.95 Primary 2 Franchisee 2 November 09,2020 No 4,580,270.64 Primary 3 Franchisee 3 June 16,2023 No 4,187,124.08 Primary 4 Franchisee 4 June 01,2021 No 4,087,488.30 Primary 5 Franchisee 5 June 26,2022 No 3,888,530.12 Primary Tot

315、al-22,111,167.09-Top 5 distributors No.Name of franchisee Start date of cooperation A related party or not Total sales(yuan)34 5.Online Sales The proportion of online sales in sales revenues exceeds more than 30%Yes No Is there a self-built sales platform?Yes No Operation starting time January 06,20

316、14 Number of registered users 14,842,207 Average number of monthly active users 1,656,538 Does it work with a third-party sales platform?Yes No Unit:yuan Name of platform Transaction amount during the reporting period Return rate Taobao(healthy consumer goods)692,766,874.86 2.08%Opening or closing o

317、nline sales channels by the Company Applicable Not applicable Description of the impact on the current and future development of the Company 6.Agency Operation Does it adopt agency operation?Yes No 2024 Semiannual Report 35 7.Inventory Inventory Main products Inventory turnover in days Inventory amo

318、unt(Yuan)YoY increase/decrease in inventory balance amount(Yuan)Reasons Raw materials and goods processed by the commission 273,553,745 29,603,724 Mainly due to increased production inventory Work in process 162,488,547-4,038,654 No major changes Finished goods 959,724,586-22,743,016 Mainly due to a

319、ccelerated stock clearance of infection protection products during the period Goods in transit 39,872,022 15,155,864 Mainly due to the increase in foreign sales in June this year,as well as an increase in inventory that has not yet met the criteria for income recognition.Low-value consumables 17,543

320、,815 878,510 No major changes Total 148 1,453,182,716 18,856,428 Provision accrual for inventory depreciation Unit:yuan Class Closing balance of the previous year Amount increased in the current period Amount decreased in the current period Closing Balance Accrual Reversal or write-back Raw material

321、s and goods processed by the commission 13,590,764.92 9,895,273.94 7,198,190.86 16,287,848.00 Work in process 36,094,235.16 2,252,175.07 5682067.21 32,664,343.02 Finished goods 205,259,954.93 78,606,775.59 80,967,651.20 202,899,079.32 Low-value consumables 1,598,990.58 641,804.10 144,870.75 2,095,92

322、3.93 Total 256,543,945.59 91,396,028.70 93,992,780.02 253,947,194.27 Inventory information of end channels such as franchises or distributors 8.Brand Building Whether the company is involved in the production and sales of branded clothing,apparel and home textile products Yes No Private brand 36 Bra

323、nd name Trademark name Main product types Features Target customers Main product price bands Main market territory Level of cities Purcotton Purcotton Cotton tissues Made from 100%high-quality natural cotton,and free from fluorescent whitening agents,our products are gentle and non-irritating.The un

324、ique spunlaced non-woven fabric processing technology of Purcotton preserves the softness of cotton while minimizing chemical processing,ensuring optimal protection for consumers skin.All-age customer base 9.9-30 yuan/pack(100 pieces)Nationwide Second-and third-tier cities and above Purcotton Nice P

325、rincess Sanitary napkins 100%cotton surface layer(surface layer,spacer,sanitary wing surface layer),soft and low friction,not easy to cause allergies.All products are certified medical grade.Female population at appropriate ages 1.5-4.99 yuan/piece Nationwide Second-and third-tier cities and above P

326、urcotton BBNice Cotton diapers 100%cotton surface layer;unique in the market;made from natural cotton;2mm ultra-thin core with 28 times ultra-high absorption capacity Parental population 2.45-5.45 yuan/piece Nationwide Second-and third-tier cities and above Purcotton Purcotton Wet tissues 100%cotton

327、 material;soft and non-slippery;gentle and non-irritating,passed the food-grade certification.All-age customer base 20-40 yuan/pack Nationwide Second-and third-tier cities and above Purcotton Purcotton Baby products/clothing 100%cotton material without fluorescent throughout the production line;the

328、unique gauze fabric provides more comfortable care Expecting mothers,newborns,babies,toddlers 100-500 yuan/piece Nationwide Second-and third-tier cities and above Purcotton Purcotton Adult apparel/intimate apparel Made from 100%cotton,our products feature high-quality cotton throughout the productio

329、n process.The original soft cotton yarn from Purcotton is fluffy to the touch,providing a soft and comfortable feel against the skin.Adult apparel:adult men and women of all ages;intimate apparel:customers of all ages Outwear:150-800 yuan/piece;leisure wear:200-800 yuan/piece;thermal underwear:200-6

330、00 yuan/piece;underwear:58-108 yuan/pair(pack);socks:20-40 yuan/pair Nationwide Second-and third-tier cities and above Purcotton Purcotton Bedding,toiletries Made from 100%cotton,our products use high-quality cotton throughout the production process,with no added softeners.The more you wash it,the s

331、ofter it gets!Expecting mothers,newborns,babies,toddlers and adult customer base Baby bedding:RMB 268-1698/set;toddler bedding:RMB 198-1098/set;adult bedding:RMB 268-3198/set;toiletries:RMB 38-398/piece Nationwide Second-and third-tier cities and above Partner brands:None Licensed brand:None 2024 Se

332、miannual Report 37 Marketing and operation of each brand during the reporting period Please refer to the“III.Analysis of Main Business”of“Section III Management Discussion and Analysis”for details.Cases involved in trademark ownership disputes Applicable Not applicable 9.Others Whether the Company i

333、s engaged in apparel design-related business Yes No Did the Company hold an order meeting?Yes No V.Other Business Analysis Applicable Not applicable Unit:yuan Amount Proportion to total profits Formation reasons Is it sustainable Investment Income 33,445,096.19 7.07%Mainly due to maturity gains on financial products and recognition of gains and losses on investments in associates Yes Profit/loss