[年报]小商品城(600415):2021年年度报告（英文版）
原标题:小商品城:2021年年度报告（英文版） Zhejiang China Commodities City Group Co., Ltd. 2021 Annual Report Important Note I. The Board of Directors, the Board of Supervisors and the directors, supervisors and senior management of the Company hereby warrant the truthfulness, accuracy and completeness of the contents of the Annual Report, guarantee that there are no false representations, misleading statements or material omissions contained in this Annual Report, and are jointly and severally responsible for the liabilities of the Company. II. All directors of the Company were present at the board meeting. III. Ernst & Young Hua Ming Certified Public Accountants (special general partnership) has issued a standard unqualified audit opinion for the Company. 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 annual report. V. The profit distribution plan for the reporting period or the plan for public reserve funds into share capital that was approved by the board of directors Based on the total share capital on the registration date of profit distribution equity in 2021, cash dividends of RMB 0.73 (tax inclusive) will be distributed for every 10 shares. According to the current total share capital of the Company, cash dividends of RMB 400,863,014.85 (tax inclusive) will be distributed. In the event of changes in the total share capital of the Company before the dividend distribution registration date, the scheme of allocation shall remain unchanged while the total profits distribution will be adjusted accordingly. 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 more than half of the directors can not warrant the truthfulness, accuracy and completeness of the 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 “Potential Risks” in “Section III. Discussion and Analysis of Managers” of this Report. XI. Others □Applicable √Not Applicable Table of Contents Section I. Definitions .......................................................................................................................... 5 Section II. Company Profile and Financial Highlights .................................................................... 6 Section III. Discussion and analysis of managers ......................................................................... 11 Section IV. Corporate Governance .................................................................................................. 48 Section V. Environmental and Social Responsibilities ................................................................. 69 Section VI. Significant Matters .......................................................................................................... 70 Section VII. Changes in Shares and Shareholders ........................................................................ 83 Section VIII. Preferred Shares ............................................................................................................ 92 Section IX. Bonds ............................................................................................................................... 93 Section X. Financial Report............................................................................................................ 102
Section I. Definitions I. Definitions For the purpose of this Report, unless otherwise stated in the context, the following terms shall
Section II. Company Profile and Financial Highlights I. Company profile
II. Contact information
III. Basic Information
IV. Places for information diclosure and access to the annual report
V. Stock profile
VI. Other relevant information
VII. Major accounting data and financial indicators in the past three years (i) Major accounting data
(ii) Major financial indictors
Explanation of main accounting data and financial indicators of the Company in the previous three years at the end of the report period √Applicable □Not Applicable 1. The Company’s operating revenue increased by RMB 23.08 million YoY, mainly due to the increase in the sales of goods during the current period. 2. The net profit attributable to shareholders of the listed company increased by RMB 407 million over the same period of the previous year. This was mainly due to an increase of RMB 92 million in net operating revenue and operating cost, an increase of RMB110 million in investment income, a decrease of RMB 24 million in non-operating expenses and a decrease of RMB172 million in income tax expense compared with the same period of the previous year 3. The net profit attributable to shareholders of the Listed Company after deduction of the non-recurring gains and losses increased by RMB 704 million over the same period of the previous year. This was mainly due to an increase of RMB 407 million in net profit attributable to shareholders of the Listed Company in the same period of the previous year, and a decrease of RMB 297 million in non-recurring gains and losses. 4. The net flow generated by operating activities increased by RMB 1.204 billion over the same period of the previous year, mainly due to an increase of RMB 1.375 billion in net cash deducted from payment for selling goods and providing services. VIII. Differences in accounting data between foreign and Chinese accounting standards (i) Differences between the net profit and net assets attributable to shareholders of the Company disclosed in accordance with international accounting standards and China accounting standards in the financial report □Applicable √Not Applicable (ii) Differences between the net profit and net assets attributable to shareholders of the Company disclosed in accordance with overseas accounting standards and China accounting standards in the financial report □Applicable √Not Applicable (iii) Explanation of differences between domestic and overseas accounting standards □Applicable √Not Applicable IX. Key financial indicators by quarter in 2021
Explanation of difference between quarterly data and disclosed data in regular reports □Applicable √Not Applicable X. Non-recurring items and amounts thereof √Applicable □Not Applicable
Expanation about defining the non-recurring profit and loss items listed in the Explanatory Notice No. 1 of Information Disclosure of Companies Publicly Issuing Securities - Non-recurring Profit and Loss items as the current profit and loss items □Applicable √Not Applicable XI. Items measured at fair value √Applicable □Not Applicable
XII. Others □Applicable √Not Applicable Section III. Discussion and analysis of managers I. Discussion and analysis of operation (I) Market operation In 2021, facing the complex international trade development environment, and based on the new forms and models of trade, the Company performed digital innovation in trade services, attracted emerging advantageous industries, and implemented a differentiated rent price system; the Company focused on talents, brand, quality and standards, and continued to bring university graduates, design, live broadcast, and standards into the market; the Company integrated the market property, and promoted itself to transform from a management company to a service company. During the report period, the Company took multiple measures to promote the upgrading of the market, enhance its advantages, and guide market traders to upgrade from information trade era to digital trade era. The occupancy rate of the shops in the market maintained above 98% in 2021, and the volume of business reached RMB 186.679 billion, up 14.77% YoY, showing strong resilience and vitality. 1. Precise and intelligent monitoring and control for prevention of the Covid-19 pandemic The Company promoted the intelligent upgrading for prevention of the pandemic, installed self-service personal health report equipment, and intelligent channel turnstiles, to provide technical support and data guarantee; fully activated the combat model of "communist party members + units", and orderly conducted nucleic acid testing and pandemic prevention drills in various markets to prevent the market from the pandemic and ensure stable operation of the markets. 2. Construction of digital market Focusing on digitalization empowering the market, and based on management and service, the two application systems of digital management and digital service were built, by setting up the data sharing and application mechanism and sorting and restructuring existing business, thus promote the market's development toward being informational, intelligent and user-friendly. (1) Building digital customer service center During the report period, the Company completed the development of the modules of pledging, lease renewal, transfer, online basic management and upgrading of module of market trader integrity credit, and conducted trial operation of digital customer service center. (2) Launch of online platform for purchasers On August 21, 2021, the Company launched the online platform for purchasers, which includes the service modules such as market navigation, online goods searching and intelligent parking, and has a average daily traffic of 64k. (3) Development of intelligent design system Starting from product package design and pattern, the Company joined hands with universities and colleges including Zhejiang University and Yiwu Industrial & Commercial College to develop an intelligent design system, to provide intelligent product design for merchants in the markets. 3. Empowering the market (1) Bringing university graduates into the market Through design competition that includes 100 universities and colleges, more than 9300 undergraduates in design provided design service for market traders; undergraduates "selling goods in booth" activities were conducted, and a communication platform for merchants and undergraduates was established, matching over 2000 people; college graduates and people with higher education level accounted for 26.9% of all the merchants in the market, indicating a rising year-by-year trend. (2) Bringing design into the market During the report period, the Company successfully held the Forth "Yiwu China Commodities City Cup" International Commodities Creative Design Competition, set up 20 design markets and 8 planning and design booths, attracted 1000 designers and identified 1000 designer shops and launched 12.6k new products. (3) Bringing live broadcast into the market In 2021, the Company set up chinagoods live broadcast center and digital live broadcast industrial incubator, organized market traders to perform live broadcast for over 1000 times, and conducted 147 trainings for live broadcast e-commerce for nearly 5000 people. The Company joined hands with Kuaishou platform to hold the first "Yiwu China Commodities City 415 Live Broadcast Purchase Festival", which was promoted in all channels and provided with 100 million traffic and allowed brands to be exposed to consumers across China, with a GMV of RMB 1.69 achieved. The Company cooperated with top live e-commerce agencies in China such as "Make Friends", to help merchants in the market seize the opportunity of "e-commerce + live stream". (4) Bringing standards into the market During the report period, the Company sorted standards at home and abroad for 12 major industries, released 25 relevant reports, guided industrial association to develop multiple Group standards, and conducted 43 trainings on standardization for over 5500 people. 4. Direction of market service Based on the operation concept of "Find products for buyers, and expand channels for sellers", the Company sorted its core business, built the frame of manager salary system, set up the path for transformation from manager to operation specialist, and eventually promoted the Company's transformation from a management company to a service company. 5. Constructing oversea market Dubai Yiwu China Commodity City, the first oversea market of the Company, will start trail operation in March 2022, and its shop occupancy rate has reached 99%. It's a comprehensive wholesale market with multiple functions including product display, warehousing as well as bonding, and has 1600 shops and 324 warehouses, covering eight industries. The market can give full play to the Dubai's advantages in policies and make full use of Dubai's radiation effect on Mideast, North Africa and other regions, thus complementing each other with Yiwu China Commodity City. Through commodity sales exhibition, bonded warehousing, transshipment, and others, the market can promote bilateral trade and industrial investment between China and UAE and its neighboring countries, and strive to be a win-win cooperation model of the "Belt and Road" Initiative. (II) Promote trade digitalization In 2021, the Company optimized the digital functions and applications of the chinagoods platform for display transactions, logistics performance, trade finance, and some other fields in depth. The big data company (the operator of the chinagoods platform) has realized a revenue of RMB 140 million and a net profit of RMB 27.47 million. The platform has achieved a total GMV of RMB 16.8 billion in 2021. 1. Implementing digital top-layer design During the report period, the Company enhanced digital new architecture, completed 5G covering in main markets and modification of Gigabit broadband; built Data Center Manager and completed collecting, cleaning and filing of data for hundreds of systems; set up the implementation path for digitalization, improved the data security system and guaranteed network operation maintenance security. 2. Iteration and optimization of chinagoods platform In 2021, Chinese Website, English Website, Arabic Website and Spanish National Website were launched on the platform and digitalization of traders and goods; The Company promoted R&D of core products of the platform and explored linked trade between the platform and oversea business. 60000 shops have been launched on the platform, with 460 kinds of commodities and over 1.2 million registered purchasers. 3. Results of application The integration of chinagoods and the online purchase platform was accelerating, which would create commodity digital trade application scenario. Daikuanbao realized transaction amount over RMB 100 million; Caigoubao was launched, laying the foundation for subject manifestation and data provenance; Digital trade cockpit was launched, enabling display of all trade data on one screen. chinagoods platform is an important measure of the Company for digital transformation, is an important means for the Company's transformation, upgrading, expansion and development in the era of trade digitalization and information technology revolution, is a sign of integration of the Company's online and offline markets. (III) Build a global supply chain service system Yiwu market is an important platform connecting the domestic and international trade supply chains, and is at the key node of the global small commodity supply chain. It plays an important role in smoothing the internal circulation, improving the external circulation, and serving the new pattern of "dual circulation". 1. Warehousing and logistics system The warehousing and logistics system was developing steadily. The united warehousing information platform, cargo space booking system and express and drayage operation platform were launched. Chinagoods digital cloud warehouse and Huanqiuyida Logistics Supply Chain Industry Park were put into operation. 206 international logistics lines were launched and accumulated goods delivered reached 1 million cubic meters. 2. Oversea warehouses The expansion of oversea warehouses was accelerating. As of the end of the report period, the Company laid out 120 oversea warehouses, with a total area over 600k ㎡, covering 46 countries and regions and serving export over RMB 6 billion. The Company laid out 15 "Bring you to China" exhibition halls, with a total area over 4200 ㎡, displaying 21k SUK of commodities The five exhibition halls in Czech, Rwanda, Benin, Philippines, and Thailand achieved "oversea warehouse + exhibition hall" operation mode. The Company brought Yimi Supply Chain and other enterprises to conduct trial operation of "chinagoods national website+ oversea warehouse + exhibition hall" mode. 3. Comprehensive Bonded Zone Yiwu Comprehensive Bonded Zone, as an exemplary project of Yiwu that was taken into free trade trial zone, was one important mission that the state and Zhejiang Provincial Government granted Yiwu. During the report period, the growth of Yiwu Comprehensive Bonded Zone was sped up and the phase I project was put into operation on October 22, 2021; the planning and construction of phase II project has started. As of the end of the report, nearly 20 key projects such as "Zhejiang Non-ferrous Metal Trading Allocation Center Project", "Comprehensive Bonded Zone Store-Warehouse-Field Whole Industry Chain Project", "B2B Intelligent Manufacturing Allocation Warehouse Project" were signed. The Company attracted big enterprises with existing enterprises, getting multiple top trade enterprises to enter the Bonded Zone. Since it was put into operation, bonded logistics business such as cross-border e-commerce 1210 and general trade import and export was conducted steadily, with great achievements: Whole- area Supply Chain Financial Service Platform (Phase I) was launched, tariff guarantee product "Guanshuibao" and "Customs Separate Payment Guarantee" and other business were implemented; first "Bonded Zone-port linkage + staple commodity" business was completed; on November 24, first cross-border bonded live broadcast was conducted in warehouse D2; on December 9, first check business for returned goods entering the Bonded Zone was completed in Yiwu Comprehensive Bonded Zone. After two months of operation, Yiwu Comprehensive Bonded Zone achieved total amount of import and export of RMB 2.8 billion. (IV) Self-operated business stepped into a new phase During the report period, the Company integrated the source supply chain resources of Yiwu market, combined "Trendy domestic commodities" and "Imported good commodities", built a trade system of "All good commodities" for sales at home and abroad, to serve the dual circulation of domestic circulation and international circulation, and promote the brands of "Yiwu Selection" and "ICMall". As of the end of the report period, the income from commodity sales reached RMB 2.593 billion, which was a big leap. 1. On supply side In 2021, the Company's two self-run brands "Yiwu Selection" and "ICMall" through direct sourcing, domestic agency, OEM production and other ways, gained a total of 108 domestic and foreign brand agencies, 20,000 + SKU of high-quality single products, 2000 core suppliers in the warehouse, 3000 advantageous commodities. The business scope covered seven categories of home life, beauty makeup and skin care, maternal and child products, snacks and drinks, entertainment and cultural innovation, toys and digital products, and cross-border goods. It aimed to create a supply chain service platform with full-scene digitization, full-link new experience and O2O online-offline integrated development. 2. On sales and distribution side The Company's expansion of online and offline sales and distribution channels for "Yiwu Selection" and "ICMall" was accelerating. On the offline side, the Company actively expanded domestic second-level wholesale market and industry dealer channels, and accumulated over 2000 cooperation channels by parent brand authorization, subsidiary brand joining, supply chain cooperation and other means, and was selected as a trial project of first special campaign for optimization and upgrading of national commodity market. On the online side, the Company explored cross-border incubation mechanism, set up short video and live broadcast business, and opened and operated chinagoods oversea flagship shop, TikTok self-operated shop, Kuaishou self-operated shop and others, completing 149k online orders. 3. On service side The Company enhanced its supply chain service ability, signed over 30 warehousing service providers and over 50 logistics service providers and completed customs clearance for over 4000 TEU imported commodities. As of the end of the report period, the accumulated signed import trade amount reached RMB 1.86 billion. (V) Speeding up digitalization of exhibition During the report period, the Company's subsidiary Shangcheng Exhibition took the opportunity that Yiwu market is a pilot of digitalization transformation, took Yiwu's construction of intelligent city into account, and made full use of IoT, internet, cloud computing, intelligent analysis and other technologies, to build a intelligent service exhibition system; based chinagoods platform, built a safe, reliable, efficient and useful cloud digital exhibition platform, and promoted the online-offline dual drive exhibition mode to be mature and standardize; cooperated with Yiwu Market Development Committee and other government authorities the "Visit Exhibition Hall Here" platform, which would provide more convenient and comfortable exhibition experience for exhibitors, participants and audience; fined data management, and analyzed Group features, information channels and preferred types and other dimensions of data, to form digital economy that takes data as the key element; explored in depth the value of digital venues and maximized digital technologies' new advantages. To get rid of the restrictions that the pandemic imposed on offline exhibition as soon as possible, and find the new opportunity of exhibition industry, Shangchen Exhibition actively explored the construction of online exhibition platform in depth and successfully made a breakthrough. In 2021, Shangcheng Exhibition expanded the scale of online exhibition, and successfully held multiple online-offline combined exhibitions including online China Yiwu International Commodities Fair, online China Yiwu International Forest Product Fair and online China Yiwu Cultural and Tourism Products Trade Fair, with 250 million visits for online exhibition, which formed a new development trend of online-offline combination of exhibition. II. Description of the industry of the Company during the reporting period In 2021, thanks to China's stable economic and social development and its leading position in the world in epidemic prevention and control, China's potential of the foreign trade industry was fully tapped and its comprehensive competitiveness continued to improve. The changing flow of commerce promoted the emergence and evolution of the structural trend of foreign trade. China is at the key point of "top-down" comprehensive transformation and upgrading of foreign trade in the national strategy, and Yiwu plays a pivotal role in this key point. 1. National policies for the industry In July 2021, "Opinions about speeding up the development of new forms and modes of foreign trade" (hereinafter referred to as the "Opinions") issued by the General Office of the State Council, clearly supports the development of cross-border e-commerce, overseas warehouse, market procurement trade mode, comprehensive service enterprises in foreign trade, offshore trade, convenient trade payment and settlement, and ither new forms and modes of foreign trade, to inject new vitality to the development of foreign trade. The "Opinions" stressed that "the policy frame for market procurement trade mode will be optimized, and that by 2025, 10 integrated markets for domestic and foreign trade with export amount over RMB 100 billion will be produced, and a host of famous brands will be created", which points out the direction and specifies the goals for market procurement trade mode in the new phase. 2. Yiwu market Yiwu relies on its over 2.1 million micro, small and medium-sized enterprises to maintain trade with over 230 countries and regions across the world, with an export-oriented degree of 65%. Focusing on the goods aggregation of nearly RMB 400 billion import and export amount in the market, cross-border rail and air transportation capacity develops rapidly, which, together with the low cost of domestic logistics, bring super high logistics efficiency for LCL export, thus drives emergence and development of a considerable numer new B2C cross-border e-commerce enterprises. (1) The overall situation of Yiwu market In 2021, Yiwu's total import-export amount reached RMB 390.31 billion, up 24.7% YoY; of which, the total export amount was RMB 365.92 billion, up 21.7% YoY, and the total export amount exceeded that of 18 provinces; the total import amount was RMB 24.39 billion, up 95.3% YoY. In 2021, Yiwu's foreign trade export achieved excellent performance, and market procurement trade was an important booster. (2) Market procurement trade in Yiwu Since 2013, China's Ministry of Commerce and other relevant departments have first carried out pilot projects under market procurement trade mode in Yiwu. In the business process, supervision, information construction and other aspects, Yiwu took the lead, with tailored support policies, VAT exemption without refund, simplified declaration and other breakthroughs in policy. A relatively complete territorial comprehensive management system and commodity identification system were gradually formed. Since then, China has recognized 31 market procurement trade pilot units in 15 provinces for 5 batches.
Changshu Clothing City, Jiangsu Province; Huadu Leather and Leather Goods Market, Guangzhou, Guangdong Province; Linyi City, Shandong Province; Hankou North International Commodity Exchange Center, Wuhan, Hubei Province; Baigou Bag Market, Hebei Province
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