[中报]中顺洁柔(002511):2023年半年度报告（英文版）
原标题:中顺洁柔:2023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 ....................................................................................................................... 27 Section V Environmental and Social Responsibilities ........................................................................................ 30 Section VI Significant Events ............................................................................................................................... 36 Section VII Changes in Shareholding and Information of Shareholders ......................................................... 46 Section VIII Particulars of Preference Shares .................................................................................................... 55 Section IX Corporate Bonds ................................................................................................................................. 56 Section X Financial Report ................................................................................................................................... 57 Documents Available for Inspection 1. The Semi-annual Report 2023 affixed with the signature of the Company’s legal representative. 2. Financial statements affixed with the signatures and stamps of the legal representative of the Company, person in charge of accounting, and 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 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 Annual Report 2022 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 2022 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
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), facial towels, etc. Specifics are given in the following: (I) Household paper 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. 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”. Cotton Series: Soft like cloud, the series adopt new air cushion technologies. After multiple times of independent embossing, there form countless light and small air cushions inside, making the tissue thicker, softer and more skin- friendly. Using pure physical compound techniques, the products feature beautiful embossing while giving a soft, cotton-like touch. Gilt Series: As a high-end tissue line, the series were launched in 2023, with both exquisite interior and exterior. The appearance is the work of a well-known design master. The black and gilt colors have a luxurious texture, giving a high-quality feeling and appealing to the eyes of consumers. Sun series: Preferred raw material. Targeting at the youth market, the brand serves as a powerful supplement to the Company’s primary brand “C&S”. 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. Cloth is super absorbent without leaving marks, strong oil removal without locking oil. Quick Dissolving and Easy to Pull Toilet Paper Series: As toilet paper in tissue boxes, the series are designed for people who pursue a quality life. Consumers can pull out the paper easily with one hand. In addition, the products, selecting 100% virgin wood pulp, dissolve easily and hence do not block the toilet. Being hygienic, clean and not easy to be affected by moisture, the series can address the needs of delicate people in the toilet scenario. (II) Personal care products The Company launched the new VI series for Dolemi pads in 2022, which includes two product series of True Suction and Zero Feeling. The products are available through all channels to achieve omni retail. In addition, the Company upgraded the Fantasy Maiden series to enhance the Dolemi brand. (III) Quality health products Clean and Soft Cleansing Towel Series: Dedicated to skin care, the products select quality plant fibers with upgraded processes. They feature double-sided texture design, with one side for cleaning and one side for skin care, thereby giving the skin a new and comfortable cleansing experience. Ultra Soft Face Towel Series: Teaming up with world-renowned quality fiber manufacturers, the series carefully select quality plant fibers imported from Brazil and Indonesia. Targeting Gen Z female users for the removal of makeups, the silk-like face towels are soft, thick, instant absorbent, resilient and washable. The products have passed third-party skin irritation tests with supreme care for the skin. Co-branded with cutting- edge artistic IPs, the series feature appealing pop art packaging, which could help increase the awareness and exposure of the brands and products. 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. Basic Wet Wipe Series: The products can address the pain points of different groups of people and different purposes and can be used in various scenarios such as before or after meal, during trips, after exercise, outdoor, etc. The plasma pure water is filtered by 8 processes, so it is skin-friendly and non-irritating. The products can remove the sickness feeling of the skin and keep the skin clean and healthy. Disinfection Wet Wipe Series: With 99.9% sterilization rate with physical sterilization, the products are skin- friendly so that consumers can enjoy a healthy life. By adopting face-care grade fabric, the products can create a safe and comfortable environment for the skin. Maternal and Infant Wet Wipe Series: Along with the change of seasons, the Company finds that mothers become more and more concerned about the hygiene problem of infants and children when going out. As a result, the Company developed the hand and mouth cleansing wipes for babies. With the non-toxic and non-irritating formula, moms can feel assured about the safety of their children. Wet Toilet Paper Series: To address the pain points of users for the pursuit of comfort when going to the toilet, the Company launched the series to solve the issue from multiple dimensions on the basis of ensuring cleanliness. Products include wet toilet paper that has a sterilization rate of 99.9%, wet toilet paper specially designed for female, wet toilet paper cross-branded with MAYINGLONG PHARM for special care in the toilet scenario, etc. The series allow consumers to have a refreshing and comfortable feeling while going to the toilet. (IV) Commercial channel products Commercial channel products are also constantly upgraded and enriched along with market changes. In addition to paper towels, small plate paper and napkins for traditional scenarios such as property cleaning, restaurants and hotels, and high-traffic places, the Company also added series of products and supporting peripherals such as toilet fragrances, hand sanitizers, disposable towels and bath towels and compressed towels. Moreover, the Company is developing multi-functional paper towels. By focusing on optimizing customer experience and meeting customer demands, the Company will continue to introduce cleaning and sanitation products with higher quality. Considering the increasing needs of government departments, pubic institutions and enterprises for daily necessities as welfare to employees, the Company also launched differentiated group- buying products through online and offline channels, to meet market demands in an all-round manner. Development Trends of the Industry The household paper industry to which the Company belongs has maintained an upward trend in recent years, with room for continued growth in the long run. The wood pulp, which is the main raw material of the Company’s products, relies highly on import. Affected by various factors, the price of imported pulp hit a new high in 2022. Coupled with rising energy prices, the production costs of household paper companies rose significantly. Therefore, the Company faced enormous operating pressure. As the pulp price has been demonstrating a downward trend in the first half of 2023, the pressure of production costs will gradually ease. 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 Company always adheres to its core strategies and business objectives, and strives to promote the growth of revenue and the sales of high-end, high-margin products by continuously optimizing product categories, adjusting and refining channels, and stepping up efforts for key products. During the reporting period, the Company recorded total revenue of RMB 4,685,080,565.59, up by 7.27%. Under the influence of high-priced pulp inventory and rising energy prices, production costs of the Company rose sharply compared to the same period of the previous year. Coupled with factors such as fierce market competition, the gross profit margin also declined year-on-year. Moreover, the implementation of the 2022 Stock Option and Restricted Stock Incentive Plan increased the amortization of incentive costs, while the Company also increased R&D investments. During the reporting period, the Company posted a net profit attributable to shareholders of the listed company of RMB 84,490,174.46, a YoY decrease of 62.88%. The price of imported pulp hit a record high again in 2022. As the pulp price has been demonstrating a downward trend in the first half of 2023, the pressure of production costs has been gradually eased. In the future, the Company will continue to adhere to its development strategies and business plans, i.e. driving the continuous growth of high- end, high-margin products, improving IT and digital construction, refining management, increasing revenue and reducing expenditure, and reducing costs and increasing efficiency. All these will help lay the foundation for the Company’s long-term healthy development. 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, Northeast Asia, Oceania and North America. According to the 2022 China Consumer Satisfaction Index for Household Paper prepared by the third-party agency CHNBRAND, C&S has ranked the first for three consecutive years. 2. Constantly optimized product structure and continuously improved product competitiveness As consumers pay more attention to own health protection, the demand for household paper takes on a differentiated and high-end trend. The Company quickly grasped the market changes and introduced the antibacterial series of non-traditional dry towel products such as wet wipes, wet toilet paper, and portable products for business and travel in various usage scenarios. The Company continued to optimize product structure and has positioned high-end, high-margin non-traditional dry wipes as a strategic category that will be prioritized in the future. Efforts have been stepped up for the terminal sales of the Oil Painting, Koi Fish, 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 the company. 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 and high-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, Tangshan Subsidiary and Dazhou C&S (under construction, not yet in production). 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. The Company has implemented strict incoming quality control (IQC) procedures for raw materials to control the hygiene and quality of products from the source. Moreover, manufacturing companies have passed the ISO9001 quality management system certification and have set up the strictest inspection system for product quality. They have also adopted advanced processes, formulas, and control procedures in production to effectively guarantee technical indicators. 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” and “carbon neutrality” 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
 |