[年报]中顺洁柔(002511):2021年年度报告（英文版）
原标题:中顺洁柔:2021年年度报告（英文版） The Board of Directors and the Board of Supervisors of the Company and its directors, supervisors and senior management warrant that the information contained in this annual report is true, accurate and complete without any false and misleading statements or material omissions, and severally and jointly accept legal liability thereof. Liu Peng, the person in charge of the Company, Dong Ye, the person in charge of accounting of the Company, and Xu Xianjing, the person in charge of the accounting department of the Company, have declared that they warrant the truthfulness, accuracy and completeness of the financial statements set out in this annual report. All directors of the Company attended the Board meeting on which this report was reviewed. Discrepancies in the sum of decimals in this report are caused by rounding. The forward-looking statements in this annual report, including future plans and development strategies, do not constitute substantive commitments of the Company to investors. Investors should be aware of the investment risks. The Company has described potential risk factors and countermeasures that may exist in its operations in Section III Discussion and Analysis of the Management and Section XI Future Development Prospects of the Company. Investors are advised to pay attention to the relevant contents. The Board meeting has deliberated and approved the following profit distribution proposal: distribute a cash dividend of RMB 1.0 (tax included) for every 10 shares to all shareholders and issue 0 bonus shares (tax included) based on the Company’s total share capital minus the number of repurchased shares as of the equity registration date of the Company’s implementation of the profit distribution plan; meanwhile, no capital reserve will be converted into share capital. Contents Section I Important Notice, Contents and Definitions ......................................................................... 1 Section II Company Profile and Key Financial Indicators .................................................................. 6 Section III Discussion and Analysis of the Management .................................................................. 11 Section IV Corporate Governance ..................................................................................................... 47 Section V Environmental and Social Responsibilities ....................................................................... 89 Section VI Significant Events ............................................................................................................ 97 Section VII Changes in Shareholding and Information of Shareholders ......................................... 123 Section VIII Particulars of Preference Shares .................................................................................. 135 Section IX Corporate Bonds ............................................................................................................ 136 Section X Financial Report .............................................................................................................. 137 Documents Available for Inspection 1. The 2021 Annual Report affixed with the signature of the Company’s Legal Representative 2. Financial statements affixed with official stamps and the signatures of the Company’s Legal Representative, the person in charge of accounting, and the person in charge of accounting department of the Company 3. Original of the audit report affixed with the stamp of the accounting firm as well as stamps and signatures of the certified public accountants 4. All original copies of the Company’s documents and the original drafts of the Company’s announcements as disclosed in the newspaper designated by the CSRC during the reporting period 5. Place for document inspection: Office of the Board of Directors Terms and Definitions
I. Company Information
Accounting firm engaged by the Company
□ Applicable √ Not applicable Financial advisor engaged by the Company to fulfill continuous supervision obligation during the reporting period □ Applicable √ Not applicable VI. Main Accounting Data and Financial Indicators Whether the Company needs to perform retrospective adjustment or restatement of accounting data for previous years □ Yes √ No
all negative, and the audit report of the most recent year shows that the Company’s ability to continue operations is uncertain. □ Yes √ No The lower of the net profits before and after deducting the non-recurring profit and loss is negative. □ Yes √ No VII. Difference in Accounting Data under Domestic and International Accounting Standards 1. Net profit and net asset differences under International Financial Reporting Standards (IFRS) and Chinese Accounting Standards (CAS) □ Applicable √ Not applicable No such differences for the reporting period 2. Net profit and net asset differences under foreign accounting standards and Chinese Accounting Standards (CAS) □ Applicable √ Not applicable No such differences for the reporting period VIII. Major Financial Indicators by Quarter Unit: RMB
financial indicators disclosed in the Company’s quarterly reports and semi-annual report □ Yes √ No IX. Non-recurring Items and Amounts √ Applicable □ Not applicable Unit: RMB
The Company has no other profit and loss items that meet the definition of non-recurring profit and loss. Descriptions where the Company defines any non-recurring profit and loss items listed in the No. 1 Explanatory Announcement on Information Disclosure of Companies Offering Securities to the Public—Non-recurring Profit and Loss as recurring profit and loss items during the reporting period □ Applicable √ Not applicable The Company did not define any non-recurring profit and loss items listed in the No. 1 Explanatory Announcement on Information Disclosure of Companies Offering Securities to the Public—Non-recurring Profit and Loss as recurring profit and loss items during the reporting period. Section III Discussion and Analysis of the Management I. Status of the Industry in Which the Company Is Located during the Reporting Period (I) Analysis of industry status quo Under the influence of the pandemic, the economy at large encountered great downward pressure in 2021. Meanwhile, the household paper industry faced a certain degree of operating pressure due to multiple factors such as rising raw material prices, fierce market competition, and unsmooth global supply chain and power cuts/production restrictions in some regions. The excess capacity formed by the rapid growth in recent years and the large production capacity base of the entire industry have slowed down its pace of growth. Despite so, the growth rate in China will still surpass the global average. (II) Development trends of the industry 1. Elimination of outdated production capacity will give more market opportunities to first-tier enterprises. Competent government departments at all levels have strengthened supervision, administration and enforcement of the household paper industry and promulgated a series of regulations and policies, including the Development Policy of the Paper Industry, the Notice of the State Council on Printing and Distributing the Comprehensive Work Plan for Energy Conservation and Emission Reduction, the Discharge Standard of Water Pollutants for the Pulp and Water Industry, the Norm of Water Intake for Paper Products, The Twelfth Five-Year Plan for Paper Industry Development, and the Catalogs for the Management of Imported Wastes. Companies with unreasonable economic scale, high energy and water consumption or not up to discharge standards were shut down or ordered for rectification within a time frame. Thus, a large number of backward production capacities have been eliminated. With increasingly stringent environmental protection polices, backward capacities and SMEs with poor anti-risk capabilities will be phased out at an accelerated speed, and the industry concentration level is expected to further increase. 2. Operating models are continually innovated and product structures are constantly optimized. With regard to the marketing of the household paper industry, except for traditional distributors and modern supermarkets, e-commerce channels are continuously expanded while their shares are rapidly growing. Some leading companies have been promoting social media marketing such as WeChat public accounts, Weibo, and live webcasting, and have increased inputs in the development of e-commerce channels. At the same time, in order to cater to the rapidly growing demands of consumers, companies continue to carry out product innovations, upgrade product specifications and packaging designs, optimize product structures, and develop new products by capturing in time changes in the consumption concepts of consumers. Diversified operating models emerge in the industry and product structures are further optimized. 3. Efforts are stepped up for equipment upgrading and product R&D. People’s demand for household paper is bound to rise along with the improvement of living standards, requiring constant product capacity expansion in the household paper industry. As such, it is inevitable for production companies of the industry to choose large-scale and automated production equipment, which can also meet the demands for low energy consumption, low water consumption, and low pulp consumption as specified in the overall requirements of the State’s industrial policies for energy conservation, consumption reduction and pollution reduction. In recent years, imports of household paper equipment have been trending up in China, with a focus on the imports of body paper machines. Meanwhile, some large-scale domestic equipment is also constantly optimized and improved. It is foreseeable that large scale and automation of production equipment will be the development direction of the household paper industry in the future. 4. Competitiveness of China’s household paper production companies in the international market will be further intensified. With the rapid development of the household paper industry in China, local enterprises occupy most of the domestic market shares. On the basis of meeting domestic demands, household paper produced in China has been exported to a range of countries and regions around the world with certain competitive advantages. In the future, the competitiveness of Chinese household paper production enterprises in the international market will be steadily enhanced. II. Principal Businesses of the Company during the Reporting Period Mr. Deng Yingzhong, founder of the Company, initiated his entrepreneurial process in 1979. Starting from intensive paper processing, the Company has developed into a diversified group company integrating R&D, production and sales after forty plus years of striving. It is among the first batch of household paper companies listed on China A-shares. The Company, with an adherence to the business philosophy of “building product, enterprise and professional brands”, practices the “All We Care Is You” value proposition and continues to provide consumers with healthy, safe, environmental-friendly, comfortable and convenient products and services. Currently the Company features three major brands, namely C&S, Sun and Dolemi. Main products include toilet paper, facial tissues, paper handkerchiefs, napkins, wet wipes, kitchen tissues, personal care products (sanitary pads), baby diapers, facial towels, etc. Specifics are given in the following: (I) Household paper Face series: Face series are soft, delicate and pliable. Being wettable, the products can be used as face towels. Among them, the oil painting series combine quality and artistry and are therefore praised as “artwork of paper tissues”. Lotion series: Specially developed for female and infant consumers, the products contain moisturizing cream. smooth. It is the professional moisturizing facial tissue brand trusted by consumers. Natural Wood series: Made of 100% imported virgin wood pulp, the products are soft and pliable and meet the EU and U.S. requirements for food contact material testing. Consumers can feel rest assured for its high quality. C&S Jin Zun series: The products are made from 100% imported raw wood pulp and the paper is thick, pliable, and reliable. Sun series: The products use 100% virgin wood pulp. Targeting at the youth market, the brand serves as a powerful supplement to the Company’s primary brand “C&S”. Wipe series: The Company offers a variety of wet wipe products catering to different user groups (including but not limited to adults, children and infants) and different purposes (including but not limited to c leasing wipes, wet toilet paper and wet wipes for equipment use). From basic skin cleansing to advanced care, the series can meet increasingly segmented demands and provide a better experience to consumers. Kitchen towel series: Using 100% virgin wood pulp, the kitchen paper towels boast stronger oil-absorption and water-absorption power and are up to the EU and U.S. Requirements for food contact material testing, thereby better satisfying the multi-functional wiping needs of households. Meanwhile, the kitchen wet wipes boast expedite decontamination power without hurting hands. (II) Personal care products The Company streamlined the personal care product business and anchored a new track for business development. It is committed to offering healthy life solutions with products + services for the whole family and all life scenarios. Revolving around the “Healthy Life” brand matrix, the Company hopes to re-create brand values. In addition, the Company has built self-operated online sales channels for care products based on e-commerce platforms to achieve omni retail. (III) Quality health products Cleansing towel series: To address user pain points, the products make constant innovations in technology, materials and craftsmanship and select 100% plant cellulose fibers. The thicker 100g Cleaning Towel series have been introduced, which are committed to offering the optimal experience to consumers. Business travel series: With the change of lifestyle, the Company understands that people are increasingly concerned about the hygiene problem during business travels. In view of this, it has developed the business travel series such as disposable compressed towels, rinse-free antibacterial hand sanitizers, alcohol sanitary pads, etc. These products are easy to carry, clean and hygienic and can guard the health of consumers anytime, anywhere. Among them, disposable compressed towels, disposable bath towels, etc. are made of plant fibers that are natural, environmental friendly and degradable. They really make travel easy. Household series: The kitchen towels adopt advanced ultrasonic non-adhesive composite technology and 2 double-sided texture design, with stronger water and oil absorption. With an ultra-high volume of 140 g/m , the products are strong, tough, scrub-resistant, and not easy to flocculate and deform. In addition, the products are up to EU and U.S. requirements for food contact material testing. Mask series: Since the outbreak of the pandemic in 2020, in response to the call of the government, the Company started to produce masks to meet the demands for anti-pandemic materials. Its medical surgical masks feature “efficient filtration, low breathing resistance and comfortable wearing”. In the future, C&S will continue to escort the breathing health of consumers. (IV) Commercial channel products In addition to home use, the commercial channel products target at wider use scenarios such as office buildings, government departments, enterprises and institutions, factories, airports, hotels, restaurants, entertainment venues, department stores, etc. We offer a full range of cleansing and sanitation solutions and may customize products and services according to customer needs. The competition in China’s household paper industry is still fierce and industry concentration will be further strengthened. With enhanced awareness on the concept of healthy living, consumers pay increasing attention to brands. Product quality is still a prominent concern in the industry. Amid all these, the Company has become one of the representative brands of high-end household paper in the market through continuous brand building and quality assurance as well as robust production capacity layout and channel expansion. It is ranked among the first echelon in the household paper industry and is well recognized by consumers and the market. In addition, with an adherence to the value concept of “All We Care Is You”, the Company continues to tap consumer needs and constantly upgrades and optimizes products with leverage on its strong R&D and innovation capabilities. The Company is committed to providing consumers with products of better quality, more comfort, and more tailored to their individual needs. The Company aims to achieve national product coverage which is underpinned by continuously improving product reputation among consumes and consolidating brand awareness. III. Analysis of Core Competitiveness 1. Belonging to the first echelon of the domestic household paper industry The Company is a top-performing enterprise in the first echelon of the domestic household paper industry with products available at all channels and both at home and abroad. In addition, it actively taps overseas markets including Southeast Asia, North Asia, Australia, the Middle East, and North America. 2. Constantly optimized product structure and continuously improved product competitiveness The Company boasts three major brands, namely C&S, Sun and Dolemi. Main products include paper rolls, coreless rolls, facial tissues, tissue handkerchiefs, wipes (including wet toilet paper), personal care products, baby diapers, face towels, kitchen towels, etc. The Company continues to optimize product structure and increase the sales proportion of high-end, high-margin products and non-roll categories. Efforts have been stepped up for the terminal sales of the Oil Painting, Face, Lotion and other high-end, high-margin series. Precise brand marketing strategy combined with multi-channel sales layout will help improve the distribution and penetration of high-end, high-margin products, drive the growth of their shares, and hence steadily improve the profit margin and profitability of products. In the context of COVID-19, consumers become increasingly concerned of health protection, which has driven their differentiated demands for high-end tissue paper. In view of this, C&S has grasped the changing trend of the market and precisely developed alcohol wet wipes, sanitary wipes, facial cleansing towel, compressed towel, disposable bath towel, mouthwash, mask and other non-traditional dry wipe products. In addition, high-end, high-margin non-traditional dry wipes have been positioned as a strategic category that will be prioritized in the future. 3. Professional and effective management team The R&D, production, procurement, quality control, marketing and sales teams have successively introduced excellent professionals since 2014. At present, the Company boasts the most outstanding R&D, production, branding and marketing teams in the industry. As such, its new product R&D, product quality, branding, sales and marketing have been effectively solidified. Most of the mid-level managers of the marketing team are core, backbone employees who have served in the Company for more than five years, with high sense of loyalty and strong professional competence. They can lead sales teams to work hard according to the strategic goals of the Company and promote the healthy and stable development of various business indicators. The management team of the Company has formulated long-term and strategic plans in line with actual situation of the Company, industry development level, and market demands. Moreover, the management team is capable of making reasonable decisions on operation management issues with relation to R&D, production, marketing, investment and financing, and effectively implementing such decisions. The excellent management team fundamentally guarantees the Company’s competitiveness and sustainable development in the future. 4. Nationwide marketing network The Company has been building and improving its marketing networks with reasonable layout based on its keen and strategic insights. It has guaranteed its profitability by expanding its channels from a single dealer channel in 2015 to five channels at present, i.e. GT (General Trade), KA (Key Account), AFH (Away From Home), EC (E-Commerce), and RC (Retail Consumer). Its current marketing network covers most of the prefecture-level (and county-level) cities. Products are directly sold to counties and then distributed to towns. This helps achieve segmented and flat market operation and expand the dealer network. Additionally, while ensuring the smooth operation of other channels, the Company has established a professional e-commerce operation team, devoted more resources to e-commerce platforms, built and strengthened the corresponding supply chain system, and intensified its routine operation management. At present, it has cemented long-term strategic cooperation with mainstream well-known platforms. The Company has strengthened the layout of emerging business models such as new retail, O2O and content marketing, while efforts have been stepped up for livestream shopping and community group buying. In addition, it has developed an AFH service team for AFH channels and customer bases to match the growing AFH market. In response to the market changes of modern KA channels, the Company actively adjusts strategies and strives to improve efficiency and effectiveness of resource inputs. Attributable to a robust sales network plus quality and diversified products, the Company is able to constantly consolidate its market basis, improve consumer experience, and enhance brand reputation, which can help achieve sustainable and stable growth in the future. 5. Nationwide layout of production bases The Company has developed a production layout covering East China, South China, West China, North China, and Central China, through its subsidiaries including Jiangmen C&S, Yunfu C&S, Sichuan C&S, Zhejiang C&S, Hubei C&S, and Tangshan Subsidiary. Thanks to the nationwide layout of production bases, the Company has narrowed the distance to customers, reduced transportation costs, and enhanced transportation efficiency. 6. Product quality at an international level The Company has always regarded product quality as its lifeline of survival and development ever since its incorporation. First-class quality derives from first-class raw materials. Raw materials of the Company have passed the ISO quality management system certification. Besides strict feed inspection procedures, it has introduced HACCP food hygiene and safety management system to control the hygiene and quality of products from the source. Moreover, its products have passed ISO9001 quality management system certification which is the strictest detecting system for product quality. The Company has observed internationally-advanced quality management system standards and utilized advanced processes, formulas, and control procedures in production to ensure each technical performance indicator. 7. Good R&D capabilities The Company is equipped with a complete product development system and the R&D department boasts strong independent R&D capabilities and excellent product formula technologies. In recent years, the Company has continuously upgraded and optimized its products, in a bid to provide consumers with products that are of better quality, more comfortable and more aligned with their individual needs. Products of the Company have extended from household paper to cross-category household daily necessities including cleansing towel series, sanitary wipes, baby diapers, etc. The Company’s speed of bringing forth new products is at the forefront of the industry. 8. Advanced production equipment The Company drives development with technological progress and has introduced advanced papermaking equipment and processing equipment from Austria, Germany, Italy, Japan and other countries. The diversified equipment can produce a variety of products that can meet the differentiated needs of consumers. As a first-tier enterprise, the Company occupies a leading position in the industry when it comes to the scale and automation of production equipment. Advanced technology and highly automated equipment have strengthened the Company’s efficiency, further satisfied ever-growing market demands, and served as an unstoppable driving force to development. 9. Outstanding environmental protection awareness and technology Along with the deepening of industrialization, the concept of environmental protection has been deeply rooted among the people. The Company has adhered to the concept of "seeking green benefits and fulfilling corporate social responsibilities", and utilized advanced environmental protection technologies to pursue its objective of environmental protection. Its waste water and gas emissions are superior to the national standards. The Company actively fulfills its corporate social responsibilities and actively responds to China’s strategic goals of “carbon peaking” in 2030 and “carbon neutrality” in 2060 by fully supporting and enforcing various environmental protection requirements of the government. In the future, the advantages and anti-risk capabilities of C&S in energy conservation and emission reduction will be further highlighted. IV. Analysis of Principal Businesses 1. Overview The situation of pandemic prevention and control was still challenging while international politics and economy remained complex during 2021. Under the influence of factors such as continual rise in material and energy prices, increasingly intensified market competition, consumers’ more sensitivity to prices and more cautious consumption attitude, the household paper industry faces certain pressure and challenges in the short run. The management of the Company actively responds to such a severe situation through a series of effective actions like continued optimization of category structure, product innovation and upgrading, brand building and intensive channel cultivation, to promote the stable growth of sales. In 2021, the Company registered an operating income of RMB9.150 billion, up by 16.95% over the previous year. Lower-than-expected sales prices of major products and rising material and energy prices led to the increase of production costs. Meanwhile, the Company actively expanded and developed channels and increased strategic investment in brand promotion. As a result, the profitability has declined. The net profit attributable to shareholders of the Company was RMB581 million in 2021, a year-on-year decrease of 35.85%. (1) Continuously optimizing category structure and building channels in a deep and meticulous manner to promote steady sales growth During the reporting period, the Company continued to develop new products through innovations while adjusting （未完）  |