[中报]小商品城:2021年半年度报告（英文版）
原标题:小商品城:2021年半年度报告（英文版） Company Code: 600415 Stock Short Name: 小商品城 Zhejiang China Commodities City Group Co., Ltd. Semi-annual Report for 2021 Important Note I. The board of directors, the board of supervisors, directors, supervisors, and seni or management of the Company guarantee that the contents of the semi - annual report are true, accurate, and complete, and that there are no false records, misleading statements or major omissions, and that they are willing to bear individual and joint legal liabilities for above statements. II. All directors of the Company were present at the board meeting. III. This semi - annual report has not been audited yet. IV. ZHAO Wenge , Head of the Company, WANG Dong , Head in charge of accounting, and ZHAO Difang , Head of the accounting department (Accounting Supervisor), declare that they warrant the truthfulness, accuracy and completeness of the financial report in the semi - annual report. V. The profit distribution plan for the reporting period or the plan for public reserve f unds into share capital that was approved by the board of directors None VI. Risk statement with forward - looking representations √Applicable □Not applicable The forward-looking representations involved in this Report such as future plans and development strategies do not constitute the Company’s substantial commitments to investors. Investors shall watch out for the investment risks. VII. Is the Company’s cash occupied by its controlling shareholder or any of its affiliates for non - operational purposes? NO VIII. Has the Company provided external guarantee in violation of the prescribed decision - making procedures? NO IX. Whether there is circumstance that more than half of the directors cannot guarantee the authenticity, accuracy and completeness of the semi - annual report disclosed by the Company NO X. Reminder of major risks The Company has described the risks that may exist in this Report in details. Please refer to “(i) Possible Risks” in “Section 3 Discussion and Analysis of Operation” in this report. XI. Others □Applicable √Not applicable Table of Contents Section I. Definiti ons ................................ ................................ ................................ ......... 5 Section II. Company Profile and Financial Highlights ................................ ................... 6 Section III. Discussion and Analysis of Managers ................................ ....................... 10 Section IV. Corporate Governance ................................ ................................ ................. 32 Section V. Environmental and Social Responsibilities ................................ ............... 36 Section VI. Significant Matters ................................ ................................ ......................... 37 Section VII. Changes in Shares and Shareholders ................................ ....................... 47 Section VIII. Preferred Shares ................................ ................................ .......................... 54 Section IX. Bonds ................................ ................................ ................................ .............. 55 Section X. Financial Report ................................ ................................ ............................ 63 Documents for Inspection Accounting statements with the signatures and stamps of the person in charge of the Company, person in charge of accounting and person in charge of the accounting department. Resolutions of the 35th Meeting of the 8th Board of Directors, resolutions of the 9th Meeting of the 8th Board of Supervisors Written confirmation opinions of directors, supervisors and senior management on the Company's 2021 Semi-annual Report and Summary Section I. Definitions For the purpose of this Report, unless otherwise stated in the context, the following terms shall have the following meanings: Definitions SCO means Yiwu State-owned Capital Operation Co., Ltd. MDG means Yiwu Market Development Group Co., Ltd. CCCP means Yiwu China Commodities City Property Development Co., Ltd. CCCH means Yiwu China Commodities City Holdings Limited Huishang Micro-finance means Yiwu Huishang Micro-finance Co., Ltd. Haicheng Company means Haicheng Yiwu China Commodities City Investment Development Co., Ltd. Binjiang Shangbo means Hangzhou Binjiang Shangbo Property Development Co., Ltd. Yiwu Shanglv means Yiwu Shanglv Investment Development Co., Ltd. Chouzhou Financial Lease means Zhejiang Chouzhou Financial Lease Co., Ltd. Yiwu Shangbo means Yiwu Shangbo Property Co., Ltd. Gongchen Shangbo means Yiwu Gongchen Shangbo Property Co., Ltd. Huangyuan Shangbo means Yiwu Huangyuan Shangbo Property Co., Ltd. Meipinshu means Yiwu Meipinshu Supply Chain Management Co., Ltd. Big Data Company means Yiwu China Commodities City Big Data Co., Ltd. Tonghui Shangbo means Yiwu Tonghui Shangbo Real Estate Co., Ltd. Handing Shangbo means Yiwu Handing Shangbo Real Estate Co., Ltd. Chengzhen Property means Yiwu Chengzhen Property Co., Ltd. Digital Port means Yiwu Digital Port Technology Co., Ltd. Redbud Capital means Yiwu Huishang Redbud Capital Management Co., Ltd. The Company, the Listed Company or the Group means Zhejiang China Commodities City Group Co., Ltd. Section II. Company Profile and Financial Highlights I. Company profile Chinese name Zhejiang China Commodities City Group Co., Ltd. Chinese short name 小商品城 English name Zhejiang China Commodities City Group Co.,Ltd English short name YIWU CCC Legal representative ZHAO Wenge II. Contact information Board Secretary Securities Affairs Representative Name XU Hang RAO Yangjin Address Haiyang Business Building, No.105 Futian Road, Yiwu Haiyang Business Building, No.105 Futian Road, Yiwu Telephone 0579-85182812 0579-85182812 Fax 0579-85197755 0579-85197755 [email protected] [email protected] III. Introduction to changes in basic information Registered address Haiyang Business Building, No.105 Futian Road, Yiwu, Zhejiang Province Office address Haiyang Business Building, No.105 Futian Road, Yiwu, Zhejiang Province Postal code at the office address 322000 Corporate website www.cccgroup.com.cn [email protected] Search index for the change during the reporting period www.sse.com.cn IV. Changes in information disclosure and filing place Newspaper selected by the Company for information disclosure China Securities Journal, Shanghai Securities News and Securities Times Website for publishing the Semi-annual Report www.sse.com.cn Place for access to the Company’s Semil-annual Report Securities Department of the Company Search index for the change during the reporting period www.sse.com.cn V. Stock profile Type of stock Exchange Stock short name Stock code Stock short name before change A share Shanghai Stock Exchange 小商品城 600415 None VI. Other relevant information □Applicable √Not applicable VII. Main accounting dat a and financial indicators of the Company (i) Major accounting data Unit: RMB Major accounting data Current reporting period (Jan-Jun) Jan-Jun 2020 Increase/decrease during the reporting period over the same period of the previous year (%) Operating income 2,072,627,727.00 2,121,448,794.31 -2.30 Net profits attributable to shareholders of the Listed Company 850,514,460.93 719,595,308.66 18.19 Net profits attributable to shareholders of the Listed Company with non-recurring items excluded 804,980,899.44 602,193,801.96 33.67 Net cash flow from operating activities 166,735,824.75 -703,066,700.16 Not applicable As of the end of the current reporting period As of the end of 2020 Increase/decrease at the end of the reporting period over the end of the previous year (%) Net assets attributable to shareholders of the Listed Company 14,066,655,036.17 13,558,228,377.08 3.75 Total assets 29,713,907,698.33 28,750,127,146.86 3.35 (ii) Major financial indictors Major financial indictors Jan-Jun 2021 (Jan-Jun) Jan-Jun 2020 Increase/decrease during the reporting period over the same period of the previous year (%) Basic EPS (RMB) 0.16 0.13 23.08 Diluted EPS (RMB) 0.15 0.13 15.38 Basic EPS after deducting non-recurring gains and losses (RMB/share) 0.15 0.11 36.36 Weighted average ROE (%) 6.09 5.38 Up 0.71 ppt Weighted average ROE after deducting non-recurring gains and losses (%) 5.77 4.50 Up1.27 ppt Illustration on major accounting data and financial indicators √Applicable □Not applicable 1. The net profit attributable to shareholders of the listed company increased by RMB 131 million over the same period of the previous year, mainly due to the increase of RMB 145 million in investment income over the same period last year. 2. The net profit attributable to shareholders of the listed company after deduction of the non-recurring gains and losses increased by RMB 203 million over the same period of the previous year. This was mainly due to an increase of RMB 131 million in net profit attributable to shareholders of the listed company in the same period of the previous year, and a decrease of RMB 72 million in non-recurring gains and losses. 3. The net cash flow from operating activities increased by RMB 870 million year-on-year. The main reasons include that, the cash received from selling goods and providing labor services increased by RMB 496 million year-on-year, the cash paid for purchasing goods and receiving labor services increased by RMB 344 million year-on-year, and the deposit of fixed deposits in the same period last year caused other cash paid related to operating activities decreased by RMB 576 million year-on-year. VIII. Differences in accounting data between foreign and Chinese accounting standards □Applicable √Not applicable IX. Non - recurring items and amounts thereof √Applicable □Not applicable Unit: RMB Non - recurring items Amount Remark (if applicable) Gain or loss from the disposal of non - current assets -630,703.53 Government grants that are recognized in the current profit or loss, excluding the government grants that are closely related to the normal operation of the Company and are provided in a fixed amount or quantity continuously according to the national polices and certain standards 8,679,086.10 The main reasons include that, the value-added tax deductible input tax for taxpayers of production and living services plus 100% was used to deduct tax payable for RMB 2.8458 million, the special incentive fund for modern supply chain system innovation for 2020 was RMB 2.6827 million, the opening-up promotion reward from for 2020 was RMB 960,700, the subsidy for pilot counties in service industry for 2020 was RMB 500,000, the interest subsidy for funding of the construction of the International Expo Center was RMB 577,400, and the reward for general trading companies was RMB 336,200, and so on. Cash occupation fees charged from non - financial enterprises that are recognized in the current profit or loss 50,288,507.85 Cash occupation fee for receiving financial aid Gain or loss from changes in fair value of held - for - trading financial assets, derivative financial assets, financial liabilities held for trading and derivative financial liabilities, and investment income from the disposal of held - fo r - trading financial assets, derivative financial assets, financial liabilities held for trading, derivative financial liabilities and other 1,171,429.82 Mainly changes in the fair value of held-for-trading assets debt instruments, except for effective hedging during the ordinary course of business Net income from other non - operating activities 955,973.37 Mainly confiscated deposits, collected liquidated damages and other similar items for RMB 1.139 million, external donations for RMB 200,000, etc. Effect of minority interest -91,655.24 Effect of income tax -14,839,076.88 Total 45,533,561.49 X. Others □Applicable √Not applicable Section III. Discussion and Analysis of Managers I. Description of the industry and the Company ’s main business during the reporting period According to the definitions in the Guidelines for Industry Classification of Listed Companies (revised in 2012) released by the CSRC, the Company is engaged in “Business Service” (L72) in “Lease and Business Service” (L). (i) Main businesses The Company is engaged in market development and operation and supporting services, providing online trading platform and services, online trading market development and operation, etc., belonging to the comprehensive industry category. (ii) Operating model 1. Market operation Market operation business is mainly operated and managed by the Company's subordinate market branches. The main business income of the market operation segment is mainly the income from the use of commercial space. The Company adopts a commercial space rental model, that is, the ownership of the commercial space belongs to the Company, and the merchants only have the right to use the commercial space within the contract period. The Company and the merchant sign a contract to clearly stipulate the use period, usage fee and business purpose of the commercial space. The merchant shall not change the agreed business purpose, and shall not sublet without the Company’s consent. Generally, the payment methods of usage fee are one-time payment or installment payment according to the contract terms. Currently the markets that the Company is responsible for operating include Zone 1 to Zone 5 of the International Trade City, Importing Market, Zone 1 East Expansion Market, Huangyuan Market and International Production Goods Market. 2. Online trading platform Relying on the Company's market resources of 75,000 off-line shops, Yiwu market official website “chinagoods” platform (www.chinagoods.com, referred to as "chinagoods platform") provides service for 2 million small, medium and micro enterprises in the upper reaches of the industry chain. With trade data integration as the core driver, it meets the needs of both supply and demand parties in manufacturing, display transactions, warehousing and logistics, financial credit, market management and other links to achieve effective and accurate allocation of market resources, and build a true, open, and integrated digital trade comprehensive service platform. 3. Hotel services The hotel service business is mainly operated and managed by the Company’s subordinate hotel branches. The hotels operated by the Company mainly provide comprehensive services such as accommodation, catering, leisure and entertainment, and conferences, etc. The main revenue sources of the hotels include room sales, catering sales, commodity sales and venue leasing, etc. Sales of guest rooms and catering mainly rely on channels such as clients agreement, conferences, wedding banquets and recommendation by operators of online booking platforms. II. Analysis of core competencies during the reporting period √Applicable □Not applicable (i) First - mover advantages At the start of China’s reform and opening-up, Yiwu took the lead in establishing the commodities market. During the recent forty years, the market has been upgraded five times and expanded ten times and has been among the top comprehensive national markets with the highest turnover, pointing to its remarkable first-mover advantages. As the largest commodities distribution center in the world, the Yiwu commodities market provides more than 2million products, which fall in 26 categories and supports one-stop purchase. The market boasts enormous resources and huge business flow, goods flow, cash flow and information flow. (ii) Brand advantages “Yiwu China Commodities City” is the first market identified by the SAIC as a well-known trademark among the national commodities trading markets. The Company has taken multiple measures to give play to the brand of “Yiwu China Commodities City” and is committed to improving its influence and leading role in the industry. Its brand advantages and influence have kept enhancing. (iii) Au xiliary services advantages The People’s Government of Yiwu has been providing policy support for the development of the market for years, and the auxiliary industries are developing rapidly in Yiwu. 1. Convenient logistics system Yiwu has in place perfect commerce and trade auxiliary facilities and advantageous logistics service. The logistics network has full coverage in Yiwu. A large number of large-sized international and domestic express delivery and logistics companies have regional distribution centers in Yiwu, and a world-oriented goods transport and distribution network has been established. Yiwu has been listed among the “commerce and trade-oriented national logistics hubs” by the National Development and Reform Commission and the Ministry of Transport. According to the operation of the postal industry in 2021 that was announced by the State Post Bureau, the express business volume of Jinhua (Yiwu) ranked first in the country for the first half of 2021. 2. Industry support During the recent years, thanks to the Yiwu China Commodities City, the Yiwu-centered manufacturing industry cluster has been developing fast, an commodities industrial belt that is centered in Yiwu and covers Jinhua, Lishui, Quzhou, Hangzhou, Jiaxing, Taihu, Shaoxing, Ningbo, Wenzhou and Taizhou with an area of nearly 10,000 sq.m has been established, and a benign mechanism under which the Yiwu wholesales market and the peripheral industry cluster develop together has been formed. 3. Support for exhibition service The major international trade exhibitions held by the Company’s exhibition business division such as China Yiwu International Commodities Fair, China Yiwu International Forest Products Fair, China Yiwu International Imported Commodities Fair and China Yiwu Hardware and Electrical Expo support and cultivate vertical exhibition in multiple industries such as stationery and textiles, have developed multiple professional and international exhibition brands, and are important national platforms for the China Commodities City to lead industry development, develop the city economy and maintain the clusters of traders and commodities. (iv) Diversified businesses The Company has strengthened its presence in the related industries, made efforts on financial investment, kept developing the exhibition business, created a new e-commerce model, developed the hotel business and also run international trade, modern logistics, advertising information, shopping and tourism businesses. It has created a group structure and profit-making model of shared and interactive development of market resources. (v) Management advantages In terms of personnel, management and technology, excellent operation and management ability is one of the core competences of the Company as a professional market operating company. The Company has developed a series of perfect management systems for market operation and management, accumulated rich experience in operation and management, and has cultivated a professional management team with reasonable knowledge and expertise structures and strategic development insights. (vi) Advantage of online and offline platform integration The Company’s international trade city is the global leading commodity market. The Company’s official Yiwu CCC website, chinagoods platform, relying on the Company’s 75,000 off-line shops, through integration of online and offline services, serves 2 million small, medium and micro enterprises in the upper reaches of the industry chain. With trade data integration as the core driver, it meets the needs of both supply and demand parties in manufacturing, display transactions, warehousing and logistics, financial credit, market management and other links. (vii) Advantage of international logistics The Company's Global Yida international logistics business, establishes a logistics platform to replace the multi-layer freight forwarder system, thus shortening the level of freight forwarder distribution, and improving logistics efficiency. In contrast, the traditional foreign trade freight forwarders are divided into multiple levels, the logistics and transportation services are not standardized, and the service prices vary widely and are usually not the lowest price. (viii) Advantage of data integration Based on the logistics platform data, the Company has built a domestic warehousing and construction platform chinagoods, integrated logistics and freight forwarding services, and constructed overseas warehouses. At the same time, with lower debt financing costs, the Company has formed the integration of logistics, information flow and capital flow for the export trades of merchants of YIWU CCC merchants to develop supply chain finance and provide merchants in the market with supply chain financial services at lower loan interest rates. III. Discussion and analysis of operation status (i) Marke t operation 2021 is the first year of the "14th Five-Year Plan" period, the 100th anniversary of the founding of the Communist Party of China, and the 15th anniversary of learning and promoting the "Yiwu’s Experience in Development". On the afternoon of June 28, the National "Outstanding Party Workers, Outstanding Party Members, and Advanced Grassroots Party Organizations” commendation meeting was held in the Great Hall of the People in Beijing. The Central Committee of the Communist Party of China awarded the Group’s party committee the title of "National Advanced Grassroots Party Organization" to encourage all employees of the Company to strive for the first place, make contributions, and give full play to the role of pioneer and battle fortress. During the reporting period, the Company focused on digital empowerment, domestic and international trade chain expansion and institutional innovation, to improve the quality of goods, to serve businessmen, to empower enterprises, to improve the efficiency of management, and constantly promote the prosperity of the market. During January - June, the market turnover reached RMB 96.44 billion, a year-on-year increase of 48.5%. The occupancy rate of business spaces remained above 97%, with steady and positive market operation, the Company has further consolidated its leading advantage in the commodity market has been further consolidated. (1) Intelligent upgrading of epidemic prevention and control: Based on the precision intelligent control system of "standardization, access system, prohibitions, inspection system and information", promote the construction of intelligent bayonet for epidemic prevention and control, so that people of the market can enter and leave "without feeling". (2) Continues to accelerate market transformation, and the four major actions of design, standards, live broadcasting and "entering the market" for college students are continuously implemented to build the core market competitiveness with innovation, design, brand, quality and standards as the main contents. During the reporting period, the Company successfully docked with 35 colleges and universities, organized 400 design talents to introduce more than 4,000 new products, and completed the “CCC Cup” design competition; conducted the standard publicity thorough the whole market, and docked with Yiwu Standard Research Institute to conduct 43 merchant standard training sessions that trained more than 5,500 merchants; organized 418 merchants to carry out cross-border live broadcasts, completed cross-border trade matching meetings such as the Hainan Consumer Fair and the West China Fair; completed the docking with 50 domestic universities such as Zhejiang University and Zhejiang Sci-Tech University, and inspected 660 sinking channel layout points. During the reporting period, the number of merchants launching new products every month in the market accounted for 51.6%, 24 major industries have achieved operations under express standard, more than 40,000 merchants have carried out live broadcast training, and the proportion of merchants with a college degree or above reached 26.4 % of total. (3) Expanded service network for domestic trade The Company has established domestic trade expansion investment promotion liaison offices in 8 provinces across the country, set up 10 investment promotion teams, completed 203 visits to the comprehensive pilot areas and trade markets, accurately docked with 484 enterprises and business associations, and signed cooperation contracts with 10 secondary markets in Dongguan, Kashgar and some other places and increased the number of members of the domestic professional market alliances to 25. (4) Exploration and innovation of trade exhibition mode The Company has held seven docking activities such as 10,000 mile market tour, and 10,000 mile market tour for Yiwu goods in Chongqing, Hainan and some other places. During the Fifth China Yiwu Hardware & Electrical Appliance Expo, for the first time, the Company has completely achieved the digitization of the procurement, verification and settlement process and introduced the team living broadcasting. There were nearly 260,000 visits to the online live broadcasting. The Company also held a special matchmaking meeting for online and offline overseas procurement simultaneously, so as to achieve the intended transaction amount of more than RMB 10 million. The Company has successfully held the Benin (West Africa) International Online Exhibition and completed more than 60 precise negotiations. (5) The Digital Comprehensive Bonded Zone has successfully passed the pre-acceptance and the investment attraction for the 85% of the completed area in the first phase has been completed; the Company has started the construction of a new important market and completed the main structure of the first phase and attracted 700 merchants; for the market in the sixth zone of the International Trade City, the first phase is expected to be started by the end of this year. (ii) Promote trade digitalization Build a digital market: With information means, collect market operation data, to build a human, product, field digital portrait system. According to the portrait reconstruction trade scene, design application products, provide procurement full process, full cycle of operation, operation and maintenance of a full range of digital services, comprehensively improve the ability and level of market enabling trade. During the reporting period, the Company optimized the digital functions and applications of the chinagoods platform for display transactions, logistics performance, trade finance, overseas interconnection and some other fields in depth. The big data company (the operator of the chinagoods platform) has realized a profit of RMB 7.7391 million in the first half of 2021. The platform has achieved profitability after it has officially launched for 8 months. By the end of the reporting period, the number of front-end shops on the platform was 59,000, the cumulative number of SKUs on the shelves exceeded 3 million, the number of registered purchasers reached over 969,500, the average daily number of the IP visits reached nearly 65,000, and the platform GMV had reached RMB 6.8 billion; digital trading cockpit 2.0 had completed the first phase of development and online testing; the digital logistics module has realized one-stop digital logistics service functions such as short-distance transfer, express delivery, and international logistics; the payment settlement module, in cooperation with Lianlian Payment, had achieved multiple payment channels such as online banking payment, cloud quick payment and quick payment; more than 40,000 merchants had opened payment functions, and actively obtained third-party payment licenses; 31,395 Guokuanbao users (including 80 foreign trade companies) had obtained credit lines of more than RMB 55.1 billion in total; digital warehousing module and large warehousing management system have been put into use Global Yida Industrial Park, Houzhai Small and Micro Storage Park, and 3 overseas warehouses in Canada, Spain, and Malaysia; the Company has built a full-link supply chain intermediary platform to accurately dock channel resources, provide one-drop shipping service, and solve the difficulty of living broadcasting organizations in selecting products. Currently, there are 60 suppliers settled in the platform, with more than 3,000 SKUs on the shelves. The Company is actively deploying four licenses of payment, factoring, credit investigation, and small-sum loans to build a complete import and export trade service performance system and promote the digital upgrade of market procurement trade. On the one hand, it has effectively improved the financial service capabilities for business users, and on the other hand, it has formed a closed-loop ecosystem of capital flow and information flow on the chinagoods platform. With payment services as the flow entrance, supported by the precipitation of real trade and logistics data across the entire link, it is to build corporate credit reporting service capabilities, and then develop factoring business to enhance platform profitability, solve the pain points of the industry and keep boosting the prosperity of the market. The Company has made full efforts to promote the construction of data center, accelerate the development of digital tools such as Guanjiabao, and accelerate the manifestation of trade data. The Company has built a database, carried out the collection of basic market data, Yixinbu data, chinagoods platform data, exhibition data, hotel data, and company system docking, and completed the establishment of the labeling system of merchants in the six major sectors including merchant basic information, operation, evaluation, credit, service, and property. The overall business framework of chinagoods: Integration of online and offline, and linkage of domestic and foreign trades to create a digital free trade hub. (iii) Industry pattern and trend and future development of the Company The Company will focus on the market procurement trade track, build a contract performance system serving the global mass trade and fragmented trade, and form an infrastructure network with Yiwu as the center and connecting the whole world. Contract fulfillment flowchart of chinagoods and Global Yida platforms The market procurement trade method (Customs Code 1039) refers to a trade method aiming market with multiple variety, small batch, and multiple transactions, in which qualified operators purchase in the recognized market agglomeration area, the value of a single-ticket declaration does not exceed USD 150,000, and the customs clearance procedures for export commodities are handled at the designated port. For goods exported through market procurement trade, the preferential policy of VAT exemption and refund shall be implemented; Customs declaration by category to facilitate customs clearance measures; The supply merchants without import and export right are allowed to collect and settle foreign exchange directly. The market procurement trade mode has the characteristics of flexible and diverse participants, low transaction cost, common trade consolidation cabinets, and integration of domestic trade and foreign trade. In 2020, in the market procurement trade, the size was RMB 706 billion nationwide, and RMB 305.6 billion in Yiwu area. It is expected that the size of the national market procurement trade will exceed RMB 1 trillion in 2021. Currently, the market procurement trade faces some problems such as continuous rising storage costs, unsatisfactory warehousing needs, high financial pressure on operating entities, weak bargaining power with shipping companies and other actual carriers, unguaranteed positions, high spot advance costs, few financing channels, and difficulty in fund recovery and exchange settlement. In this context, the Company has established the chinagoods platform and the Global Yida logistics and trade platform to face the global mass trade and fragmented trade. Especially using the 1039 market procurement trade method, it matched the demands of supply and demand parties in the production, manufacturing, display and trade, warehousing and logistics, financing loans, market management and some other links to achieve the effective and precise allocation of market resources, provide digital cross-border logistics solutions, payment guarantee solutions, and gradually realize online consolidation, online order and payment, and online Financing, online booking, and full link visualization, form a logistics price comparison mechanism in order to provide trading entities with more convenient, efficient, and low-cost integrated services and make trade easier. Major changes in the Company's business conditions during the reporting period, and events occurring during the reporting period that have a major impact on the Company's business conditions and are expected to have a major impact in the future □Applicable √Not applicable IV. Operating status during the reporting period (i) Analysis of main business 1 Analysis of the changes to the items in the financial statement Unit: RMB10,000 Item Current reporting period o f Jan - Jun 202 1 Reporting period of Jan - Jun 20 20 YoY change (%) Operating income 207,262.77 212,144.88 -2.30 Cost of sales 92,541.06 86,922.76 6.46 Selling expenses 7,404.29 8,788.71 -15.75 General and administrative expenses 16,669.89 13,045.09 27.79 Financial expenses 4,735.10 9,127.19 -48.12 R&D expenses 456.91 1,708.12 -73.25 Net cash flow from operating activities 16,673.58 - 70,306.67 Not applicable Net cash flow from investing activities -3,616.21 61,702.57 -105.86 Net cash flow from financing activities -20,435.12 13,001.06 -257.18 Reasons for the change to financial expenses: mainly due to decreased interest expenses in the reporting period year over year. Reasons for the change to R&D expenses: mainly due to decreased spending on R&D in th e reporting period year over year. Reasons for changes in net cash flow from operating activities: Mainly because the cash received from selling goods and providing labor services increased by RMB 496 million year - on - year, and the cash paid for purchasing goods and accepting labor services increased by RMB 344 million year - on - year, and some items such as fixed deposits in the same period last year for RMB 500 million led to a year - on - year decrease of other cash paid related to operating activities for RMB 5 76 million. Reasons for changes in net cash flow from investment activities: Mainly because the received investment income and the net cash flow related to long - term assets and others increased by RMB 253 million year - on - year, and some reasons such as paym ent of RMB 1.225 billion for the capital increase of CCCP led to year - on - year growth of net cash flow paid for investment for RMB 491 million, and the year - on - year drop of net cash of financial aids for RMB 417 million. Reasons for changes in net cash flo w from financing activities: Mainly because the net inflow of financing during the current period decreased by RMB 99 million year on year, and cash paid for dividends and interest payments increased by RMB 241 million year - on - year increase. 2 Details of m aterial changes to the business types, the components or sources of profits of the Company in this reporting period √Applicable □Not applicable Unit: RMB Yuan Item January-June 2021 January-June 2020 YoY change Percentage change ±% Market operation 1,119,528,495.20 1,009,159,906.85 110,368,588.35 10.94 Sales of goods -19,667,101.32 -5,694,034.94 -13,973,066.38 Not applicable Real estate sales - -5,656,548.46 5,656,548.46 Not applicable Hotel service -15,043,356.54 -21,014,757.95 5,971,401.41 Not applicable Exhibition and advertising -17,830,866.21 -23,032,242.66 5,201,376.45 Not applicable Other businesses -7,166,013.33 39,266,533.26 -46,432,546.59 -118.25 Profits before tax 1,059,821,157.80 993,028,856.10 66,792,301.70 6.73 1. The operating profit from the market increased by RMB 110 million year-on-year, mainly due to the year-on-year increase in investment income calculated under the equity method in the statements of CCCP. 2. The profit of other businesses decreased by RMB 46 million year-on-year, mainly due to the decrease in the income from the fair value change of the new financial instruments standards implemented by the CCCF. (ii) Material changes to profits caused by non - main businesses □Applicable √Not applicable (iii) Analysis of assets and liabilities √Applicable □Not applicable 1. Assets and liabilities Unit: RMB10,000 Project Amount at the end of the current （未完）  |