[中报]中顺洁柔(002511):2022年半年度报告（英文版）
原标题:中顺洁柔:2022年半年度报告（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 semi-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 semi-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 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 detail in Section III Discussion and Analysis of the Management and Section X Risks Faced by the Company and Countermeasures. Investors are advised to pay attention to the relevant contents. The Company plans not to distribute cash dividend, issue bonus share, or transfer capital reserve into share capital. Contents Section I Important Notice, Contents and Definitions ........................................................................................................ 2 Section II Company Profile and Key Financial Indicators ............................................................................................... 6 Section III Discussion and Analysis of the Management ................................................................................................... 9 Section IV Corporate Governance........................................................................................................................................... 28 Section V Environmental and Social Responsibilities ....................................................................................................... 31 Section VI Significant Events .................................................................................................................................................... 37 Section VII Changes in Shareholding and Information of Shareholders ................................................................... 55 Section VIII Particulars of Preference Shares..................................................................................................................... 64 Section IX Corporate Bonds ...................................................................................................................................................... 65 Section X Financial Report ........................................................................................................................................................ 66 Documents Available for Inspection 1. The Semi-annual Report 2022 affixed with the signature of Mr. Liu Peng, the Company’s legal representative 2. Financial statements affixed with the signatures and stamps of Mr. Liu Peng, the legal representative of the Company, Mr. Dong Ye, person in charge of accounting, and Ms. Xu Xianjing, person in charge of accounting department of the Company 3. 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 4. Place for document inspection: Office of the Board of Directors Terms and Definitions
I. Company Profile
1. Contact information of the Company Whether there are changes in the Company’s registered address, office address and postal code, website, and email address during the reporting period □ Applicable √ Not applicable The registered and office addresses and their post codes, official website, and email of the Company were not changed during the reporting period. See the 2021 Annual Report for details. 2. Information disclosure and location for inspection of documents Where there are changes in information disclosure and location for inspection of documents during the reporting period □ Applicable √ Not applicable There are no changes in the name of the newspaper selected by the Company for information disclosure, website designated by CSRC for publicizing the semi-annual report, and the location for inspection of the semi- annual report during the reporting period. Please refer to the Annual Report 2021 for details. 3. Other Relevant Information Where there are changes in other relevant information □ Applicable √ Not applicable IV. Main Accounting Data and Financial Indicators Whether the Company needs to perform retrospective adjustment or restatement of accounting data for previous years □ Yes √ No
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 VI. 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. Principal Businesses of the Company during the Reporting Period Main Products 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. With selected high-quality 100% virgin wood pulp and quality moisturizing cream, the paper is soft, delicate and 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 double- 2 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. 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. Development Trends of the Industry Under the influence of the pandemic, the economy at large encountered great downward pressure. 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. 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. 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. Market Position 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. Key Performance Drivers The situation of pandemic prevention and control was still challenging while the international political and economic environment remained complex during the first half of 2022. Under the influence of factors such as consumption, the household paper industry faced certain pressure and challenges in the short run. The management of the Company actively responded to such a severe situation through a series of actions like continued optimization of category structure, product innovation and upgrading, intensive cultivation of lower- tier markets, and improvement of operational efficiency and management level. During the reporting period, the Company recorded total revenue of RMB4.3676181 billion, up by 2.82% over the same period of previous year; the net profit attributable to shareholders of the listed company was RMB227.6397 million, a decrease of 44.09% over the same period of previous year. Changes in performance are mainly owing to the following factors: 1. Logistics and transportation in some areas of China were not smooth due to pandemic control, which affected the Company's sales to a certain extent. In view of this, the Company quickly made a summary and adjusted the channel sales strategy. The EC channel performed well during the “618” Shopping Festival. The Company posted an operating income of RMB2.4832788 billion in the second quarter, up by 15.74% over the same period of last year. 2. Rising raw material prices have led to an increase in production costs. The Company has implemented a price adjustment policy since the first quarter of 2022, but it did not fully offset the increase in raw material costs. Combined with the weak consumer market and fierce market competition, the gross profit margin showcased a slight year-on-year decrease. During the reporting period, the Company has been actively constructing digital transformation infrastructure, optimizing internal processes, and improving the level of refined management. Efforts have been made to further increase the sales of high-end and high-margin products through continual optimization of product structure and expansion of product categories. The multi-dimensional, high-quality systematic linkage has helped to improve the overall operational and synergistic efficiency, reduce costs and increase efficiency, thereby laying a solid foundation for the long-term and healthy development of the Company. II. 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. 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 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. 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. III. Analysis of Principal Businesses Overview Please refer to relevant contents in “I. Principal Businesses of the Company during the Reporting Period”. YoY changes in major financial data Unit: RMB
reporting period □ Applicable √ Not applicable There were no significant changes in the profit composition or source of profits of the Company during the reporting period. Composition of operating income Unit: RMB
profit √ Applicable □ Not applicable Unit: RMB
whether principal business data of the Company in the recent period were adjusted as per statistical standards at the end of the reporting period □ Applicable √ Not applicable Reasons for YoY changes of relevant data over 30% □ Applicable √ Not applicable IV. Analysis of Non-principal Businesses √ Applicable □ Not applicable Unit: RMB
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