深中华B:2021年半年度报告（英文版）

Shenzhen China Bicycle Company (Holdings) Limited

Semi-Annual Report 2021

August 2021

Section I. Important Notice Contents and Interpretation

Board of Directors Supervisory Committee all directors supervisors and senior

executives of Shenzhen China Bicycle Company (Holdings) Limited (hereinafter

referred to as the Company) hereby confirm that there are no any fictitious

statements misleading statements or important omissions carried in this report

and shall take all responsibilities individual and/or joint for the reality

accuracy and completion of the whole contents.Li Hai Principal of the Company Sun Longlong person in charge of accounting

works and Zhong Xiaojin person in charge of accounting organ (accounting

principal) hereby confirm that the Financial Report of 2021 Semi-Annual

Report is authentic accurate and complete.All directors are attended the Board Meeting for report deliberation.The Company shall comply with the disclosure requirement of “Guidelines onIndustry Information Disclosure of Shenzhen Stock Exchange No. 11- ListedCompany Engaged in Jewelry-related Business”

The Company plans not to distribute cash dividends not to send bonus shares

and no reserve capitalizing.Contents

Section I. Important Notice Contents and Interpret... 2

Section III Management Discussion and Analysis ...... 9

Section IV Corporate Governance .................... 23

Section V Environmental and Social Responsibility .. 24

Section VI Important Events ........................ 27

Section VII. Changes in Shares and Particulars abo.. 33

Section VIII. Preferred Stock ...................... 38

Section IX. Corporate Bonds ........................ 39

Section X. Financial Report ........................ 40

Documents Available for Reference

1. Accounting statement carrying the signatures and seals of the legal representative person in charge of

accounting and person in charge of accounting organ.2. Originals documents of the Company and manuscripts of public notices that disclosed in the newspaper

designated by CSRC in the report period.3. English version of the Semi-Annual Report 2021

Interpretation

Items Refers to Contents

Section II. Company Profile and Main Financial Indexes

I. Company profile

Short form of the stock Zhonghua-A Zhonghua-B Code for share 000017 200017

The abbreviation of the

N/A

changed stock (if applicable)

Stock exchange for listing Shenzhen Stock Exchange

Name of the Company (in

深圳中华自行车(集团)股份有限公司

Chinese)

Short form of the Company深中华

(in Chinese) (if applicable)

Foreign name of the Company

Shenzhen China Bicycle Company (Holdings) Limited

(if applicable)

Short form of foreign name of

CBC

the Company (if applicable)

Legal representative Li Hai

II. Person/Way to contact

Secretary of the Board Rep. of security affairs

Name Sun Longlong Yu Xiaomin Zhong Xiaojin

501 Zhongxin Technology Building No.31 501 Zhongxin Technology Building No.31

Contact add. Bagua Rd. Bagualing Futian District Bagua Rd. Bagualing Futian District

Shenzhen Shenzhen

Tel. 0755-2551699828181666 0755-2551699828181666

Fax. 0755-28181009 0755-28181009

E-mail dmc@szcbc.com dmc@szcbc.com

III. Others

1. Way of contact

Whether registrations address offices address and codes as well as website and email of the Company changed in reporting period or

not

□Applicable √Not applicable

The registrations address offices address and codes as well as website and email of the Company have no changes in the Period

found more in Annual Report 2020.2. Information disclosure and preparation place

Whether information disclosure and preparation place changed in reporting period or not

□ Applicable √ Not applicable

The newspaper appointed for information disclosure website for semi-annual report publish appointed by CSRC and preparation

place for semi-annual report have no change in reporting period found more details in Annual Report 2020.IV. Main accounting data and financial indexes

Whether it has retroactive adjustment or re-statement on previous accounting data or not

□ Yes √ No

Increase/decrease in this

Current period Same period of last year

report y-o-y

Operating revenue (RMB) 54130317.60 42656355.21 26.90%

Net profit attributable to shareholders of

1365493.34 2797643.50 -51.19%

the listed company (RMB)

Net profit attributable to shareholders of

the listed company after deducting -416594.29 2197907.57 -118.95%

non-recurring gains and losses (RMB)

Net cash flow arising from operating

-2447126.82 1350395.94 -281.22%

activities (RMB)

Basic earnings per share (RMB/Share) 0.0025 0.0051 -50.98%

Diluted earnings per share (RMB/Share) 0.0025 0.0051 -50.98%

Weighted average ROE 11.78% 32.84% -21.06%

Increase/decrease in this

End of current period End of last year report-end over that of last

period-end

Total assets (RMB) 94505866.40 91742769.99 3.01%

Net assets attributable to shareholder of

12270724.32 10905230.98 12.52%

listed company (RMB)

V. Difference of the accounting data under accounting rules in and out of China

1. Difference of the net profit and net assets disclosed in financial report under both IAS (International

Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)

□ Applicable √ Not applicable

The Company had no difference of the net profit or net assets disclosed in financial report under either IAS (International

Accounting Standards) or Chinese GAAP (Generally Accepted Accounting Principles) in the period.2. Difference of the net profit and net assets disclosed in financial report under both foreign accounting

rules and Chinese GAAP (Generally Accepted Accounting Principles)

□ Applicable √ Not applicable

The Company had no difference of the net profit or net assets disclosed in financial report under either foreign accounting rules or

Chinese GAAP (Generally Accepted Accounting Principles) in the period.VI. Items and amounts of extraordinary profit (gains)/loss

√ Applicable □ Not applicable

In RMB

Item Amount Note

Governmental subsidy reckoned into current gains/losses (not

including the subsidy enjoyed in quota or ration according to

300000.00

national standards which are closely relevant to enterprise’s

business)

Switch-back of provision of impairment of account receivable

and contract assets which are treated with separate depreciation 1357466.13

test

Other non-operating income and expenditure except for the

157664.40

aforementioned items

Less: Impact on income tax -

Impact on minority shareholders’ equity (post-tax) 33042.90

Total 1782087.63 --

Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for Companies

Offering Their Securities to the Public --- Extraordinary Profit/loss and the items defined as recurring profit (gain)/loss according to

the lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their

Securities to the Public --- Extraordinary Profit/loss explain reasons

□ Applicable √ Not applicable

In reporting period the Company has no particular about items defined as recurring profit (gain)/loss according to the lists of

extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to

the Public --- Extraordinary Profit/loss

Section III Management Discussion and Analysis

I. Main businesses of the company in the reporting period

During the reporting period the company’s main businesses were bicycles and lithium battery materials business

and jewelry gold business. (1) Bicycles and lithium battery materials business included the production assembly

procurement and sales of bicycles and electric bicycles and purchase sales and commissioned processing of

lithium battery materials etc.; (2) The gold jewelry business mainly provided supply chain management and

services in the vertical field of gold jewelry. The company connected with downstream gold jewelry brands

purchased gold and diamonds according to their product needs and then commissioned gold jewelry processing

plants for processing made product certification for the processed finished products after passing the inspection

and delivered them to downstream customers. Through the integration of upstream supplier resources and

downstream customer resources the turnover rate of gold jewelry products in the upstream and downstream was

improved the cost of circulation links was reduced and the overall competitive advantage of the upstream and

downstream was formed.The Company shall comply with the disclosure requirement of “Guidelines on Industry Information Disclosure ofShenzhen Stock Exchange No. 11- Listed Company Engaged in Jewelry-related Business”

i. Industry trends and competitive landscape of the industry the Company operates

In terms of the jewelry and gold industry due to the impact of the pandemic and other factors the global

economic development is still facing many uncertainties in 2021 but the domestic economy shows a rapid

recovery the growth in retail industry is in prospect and the development trend of the gold and jewelry industry is

still positive. In recent years with the growth of the middle class and the continuous rising of residents’ income

the constantly advancing of the domestic residents’ consumption upgrading the popularity of the Internet and the

rise of social media a young generation of consumers is becoming a new force of consumption the jewelry

industry is evolving from the traditional “push supply chain” to the “demand pull” and there is an obvious

transition trend from material consumption to brand and design consumption the integration of jewelry into the

Internet innovation and individuality are becoming the trend of the industry. The jewelry industry is facing an

opportunity period of income growth and consumption upgrading and the middle and high-end consumer markets

represented by jewelry has entered a stage of rapid development.1. Industry development trend

(1) The per capital disposable income continues to rise and the consumer group shifts to young consumers

Benefiting from the continuous development of China's economy the per capital disposable income of residents

has been growing steadily. With the continuous increase of per capital disposable income of residents consumers'

consumption ability and willingness to consume jewelry are expected to increase accordingly. At the same time

according to the age group of consumers the "young millennials" aged between 21 and 25 and the "older

millennials" aged between 26 and 39 are the absolute main force of global diamond jewelry consumption.According to the data China's older millennials and younger millennials respectively contribute 69% and 10% of

the diamond jewelry market accounting for about 79% of the total market share. In terms of retail sales of

diamond jewelry older millennials and younger millennials contribute 70% and 8% respectively accounting for

about 78% of the market share in total.

(2) Jewelry consumption concept tends to become daily

Unlike the consumption habits of the middle-aged people who pursue the maintenance of value with the

improvement of people's living standards and the transformation of ideology young consumers are more likely to

consume jewelry as their daily wear but not as traditional wealth or wear for important occasions. The demand

for life oriented jewelry is increasing year by year. The younger generation pays more attention to the

personalized design Goods in process selection wearing jewelry is more used to meet the daily life requirements

reflects the personal style and personal taste and jewelry consumption is becoming more daily. In addition

consumption reason expands from wedding to all kinds of Chinese and foreign festivals love friendship family

and self-reward which effectively improves the repurchase rate of jewelry products.

(3) The demand for wedding market is stable and the jewelry industry will remain sustainable in the future.

Jewelry consumption in wedding market occupies an important position in the whole jewelry market. As of

December 31 2020 a total of 10035000 newborns had been registered with public security organs in 2020. In

terms of marriage 3879000 marriage couples registered in the first half of 2020 an increase of 149.1% on a

month-over-month basis and a decrease of 22.1% on a year-over-year basis. In the first quarter of 2021 a total of

2132000 marriage couples registered nationwide an increase of 575000 couples compared with the same period

last year. In the long run China's consumption upgrading is still continuing the jewelry industry and diamond

jewelry markets will still maintain long-term prosperity and large space for growth in the future.

(4) The specific needs of consumers drive the industry to gradually subdivide

At present China's jewelry industry is still in the period of broad brands and enterprises provide more suitable

products and services to core groups by studying the needs of segments. In the future it will gradually move

towards the era of brand segmentation the jewelry enterprises need to constantly adapt to the new market

environment and adapt to the development needs of the era of segmentation.

(5) Form online and offline linkage channel sales

The development of sharing platforms and e-commerce platforms has changed the consumption habits of

consumers especially the younger generation. Consumers can more easily understand the features of products and

share the use experience through online which has become an important trend of product promotion and future

sales.

(6) Supply chain management has become an important means of operation for jewelry enterprises

From the perspective of the supply chain of the jewelry industry it mainly involves raw material mining

processing and smelting blank processing jewelry production warehousing distribution and sales. In recent

years more and more well-known domestic jewelry brands have outsourced part or all of the intermediate

processing links with low profit and large investment and focused on the front-end design brand operation and

back-end marketing network construction with high premium. Supply chain management has become an

important means to improve the operation efficiency of jewelry enterprises.2. Future development prospects

(1) National industrial policy support

In order to encourage and develop the jewelry and jade jewelry industry the Chinese government has introduced

many favorable policies and measures. In terms of macro policies Shanghai Diamond Exchange and Shanghai

Gold Exchange have been launched successively and the markets of gold silver and other precious metals and

their products have been fully opened up. The Ministry of Commerce has issued the Guiding Opinions on

Promoting Consumption in the 13th Five-Year Plan Period. The General Office of the State Council issued the

Opinions of the General Office of the State Council on Promoting the Innovation and Transformation of Entity

Retail and the Opinions of The General Office of the State Council on Accelerating the Development of

Circulation and Promoting Commercial Consumption.

(2) Industry self-regulation is constantly strengthened

The country formulated and revised a series of industry standards and regulations such as the Name of Jewelry

and Jade Identification of Jewelry and Jade Classification of Diamonds Regulations on Identification

Management of Gold and Silver Jewelry Regulations on the Purity of Precious Metals in Jewelry and Naming

Methods Classification and Code of Jewelry and Jade and Precious Metals and GB/T25071-2010 national

standards etc. which plays a positive role in improving the overall level of China's jewelry industry promoting

the sustainable and healthy development of the industry and participating in international competition.

(3) Economic growth and rise in per capital disposable income

With the growth of China's economy the per capital disposable income of residents is also rising. With the

increase of residents' disposable income Chinese residents gradually increase their consumption of optional

consumer goods on the basis of meeting their basic living needs. Jewelry as an optional consumer goods will

continue to maintain rapid growth in China's market.3. The company's competitive advantages in the jewelry and gold business

(1) High-quality upstream supplier system

At present the company has established relatively stable cooperative relationships with major domestic and

foreign diamond suppliers and processors and has advantages in raw material procurement costs order

production cycles and product quality control and can continuously reduce supply chain costs and operational

efficiency.

(2) Diversified downstream market channels and customer resources

The company is currently actively expanding its gold jewellery customers. In addition to clear order customers it

is currently negotiating business cooperation with a number of domestic jewellery brands. The above-mentioned

customers include three types of customers of which type A customers are well-known brand customers in the

country with more than 500 retail stores type B customers are small and medium/regional/segmented brands

with 300-500 retail stores; type C customers are small and medium brands with 50-100 retail stores.

(3) Improve the industrial chain of production design

The company has a one-stop industrial chain docking module of design production processing testing and

wholesale. Brand owners can rely on our jewelry processing resource advantages and hand over lower

value-added links such as manufacturing and distribution to the company thus focus on the brand operation and

sales section with higher added value. The outsourcing of production and design can improve the homogeneity of

gold jewelry products.

(4) Closed-loop business process and risk control system

The company has formulated strict business internal control processes such as supplier access standards customer

evaluation systems full-process order tracking systems and purchase price comparison systems achieved the

three-flow closed-loop control of capital flow and information flow and logistics through the integrated service

platform of the supply chain system and the integrated solutions to funds management and realized multi-level

risk control.ii. The company's main business models during the reporting period

1. Procurement model

The upstream raw material suppliers of the company’s gold jewelry supply chain business were mainly diamonds

and gold of which the diamond suppliers were mainly source producers or wholesalers from India or Hong Kong

and domestic mature diamond wholesalers (generally members of the Shanghai Diamond Exchange) ) gold was

mainly purchased from the Shanghai Gold Exchange through the company's membership qualifications at

Shanghai Gold Exchange. The company has established professional procurement department and team to be

responsible for the procurement of diamond products and jewellery. The specific procurement models varied

according to customer needs.2. Production model

By integrating upstream commissioned processing plants the company outsourced the production of products

ordered by customers to professional jewelry manufacturers to give full play to their professional and scale effect.In view of the current situation and characteristics of domestic jewelry processing enterprises the company

established a set of effective supplier management mechanisms and evaluation standards to achieve a benign

interaction between the production system of outsourced manufacturers and the company's business development.3 Sales model

According to the annual order planning and regular procurement requirements of brand retailers the company

provided B-end customers with various forms of supply services such as spot procurement order production and

customized development so as to minimize product inventory and improve the supply chain effectiveness for

customers.Order production: Customers placed orders to the company according to their own needs and the company

purchased raw materials and subcontracted processing to form finished products and sell them to customers;

Customized development: According to the characteristics of their own brands and future development needs

customers entrusted the company to develop and design the product styles and produce finished products to sell

to customers.iii. Operation of the physical store in reporting period

During the reporting period gold and jewelry business of the Company mainly provides supply chain

management and services in the vertical field of gold and jewelry it connects with the downstream gold jewelry

brand and does not have the physical stores.iv. Operation of the on-line sales in reporting period

The Company does not have on-line sales in the Period

v. Inventory in the reporting period

As of end of the Period balance of inventory from jewelry business amounted to 6207923.40 yuan a 4.27% up

compared with that of period-begin types of the inventory includes:

In RMB

Item Types Amount Proportion

Jewelry 1370407.91 22.08%

Gold jewelry — —

Finished goods

Other — —

Total 1370407.91 22.08%

Gold 821910.81 13.24%

Platinum — —

Raw materials

Diamond 2612048.33 42.08%

Total 3433959.14 55.32%

Wrappage 51215.71 0.83%

Goods in process 1352340.64 21.78%

Total 6207923.40 100.00%

In the bicycle and lithium battery materials industry as a traditional manufacturing industry the bicycle industry

continues the dilemma of rising labor costs manufacturing costs capital costs and material costs. The

implementation of the new national standards for safety technical specifications of electric bicycle in April 2019

accelerated the reshuffle of the industry and formed a new round of industry shocks. In addition on the basis of

the violent shock of shared bicycles with capital advantages on the bicycle industry and upstream supply chain

operations in the past few years the aftershocks continue to impact the recovery of the industry due to the lack of

profit model and capital chain problems. At the same time the bicycle industry as a traditional manufacturing

field has also ushered in an important opportunity to accelerate transformation and upgrading under the guidance

of the "Made in China 2025" strategy of strengthening the country under the guidance of the basic policy of

"innovation-driven quality-first green development structural optimization and talent-oriented" ushered in the

development opportunities for the implementation of the new national standards for electric bicycles and faced

important opportunities and challenges of e-commerce development on channel impact channel integration and

Internet+. Our country is the world's largest country in the production and sales of electric bicycles. After years of

development electric bicycles have gradually become an important means of transportation for consumers' daily

short-distance trips. At present there are about 200 million vehicles in the whole society. Structural body motor

power battery and control system as the core components of electric bicycles Shenzhen China Bicycle has

closely followed up and studied their technological development application development and commercial value

for a long time and determined the list of qualified suppliers for core components year by year. As one of the core

components of electric bicycle lead-acid batteries have been mainly used as the power batteries in the past ten or

twenty years. With the development and popularization of new energy technologies and new energy materials it

is expected that they will be replaced by lithium batteries on a large scale in the future. The implementation of the

new national standards for safety technical specifications of electric bicycle has comprehensively improved the

safety performance of electric bicycles adjusted and improved technical indicators such as speed limit vehicle

quality and pedaling ability. The new standards that are close to the people's livelihood and serve the people's

livelihood have increased the application space of lithium battery energy storage and lithium battery electric

bicycles will usher in a new stage of development.Through carrying out various works diligently in the first half of 2021 the Company achieved an operating

revenue of 54.1303 million yuan net profit amounted as 1.5778 million yuan the net profit attributable to

shareholders of listed company was 1.3655 million yuan and net profit attributable to shareholders of listed

company after deduction of the non-recurring gains/losses was -416600 yuan.II. Core Competitiveness Analysis

Despite the fierce market competition in the bicycle industry as a conventional industry the increased awareness

of green commuting leisure and exercises as a result of the development of China’s social economy and the

change of people’s living concept creates structural development opportunity for the bicycle industry. The

Company will continue to do better in various aspects of operation such as market development product

development quality management and sales of e-commerce extended and expansion the application of upstream

& downstream industry for the industrial chain step by step so as to maintain and improve the Company’s ability

to continue as a going concern before the restructuring. During the reporting period the Company newly develops

jewelry and god supply chain business and expands the business dimensions. In August 2019 the Company and

Shenzhen Zuankinson Jewelry Co. Ltd jointly established a Shenzhen Xinsen Jewelry Gold Supply Chain Co.Ltd with contribution of 6.5 million yuan. Of which the Company holds 65% equity and is the controlling

shareholder of Shenzhen Xinsen Jewelry Gold Supply Chain Co. Ltd while 35% equity held by Zuankinson

Jewelry. According to actual operation development in February 2020 the two parties are decided to increase the

capital of Shenzhen Xinsen Jewelry Gold Supply Chain Co. Ltd to 20 million yuan in the same proportion.Relevant registration capital is fully funded in June 2020. In order to meet the future business development needs

of Shenzhen Xinsen Jewelry Gold Supply Chain Co. Ltd. it will enhance its financial strength comprehensive

competitiveness and anti-risk capabilities. In August 2020 the company and the joint venture partner Shenzhen

Zuankinson Jewelry and Gold Supply Chain Co. Ltd. decided to jointly increase the capital of Shenzhen Xinsen

Jewelry Gold Supply Chain Co. Ltd. in the same proportion increasing the registered capital from 20 million

yuan to 200 million yuan of which the company newly increased capital of 117 million yuan which was

successively invested in accordance with its own funds and the availability of funds raised from the non-public

issuance of A shares; Zuankinson Jewelry newly increased capital of 63 million yuan a total of 180 million yuan

increased. The above mentioned capital increase event has been deliberated and approved by the second

extraordinary general meeting of shareholders of 2020 dated 21 August 2020. On the other hand the Company

sets the conditions for introducing the restructuring party in the reorganization plan expecting to restore the

sustainable operation ability and sustainable profitability through asset restructuring.In addition the Company is trying to carry out the issuance of non-public shares hoping to improve the operating

strength and development momentum. On 30 December 2020 the Company held the 3 extraordinary

shareholders general meeting of 2020 to deliberated and approved the new plan of non-public issuance of shares.The Company plans to raising 293.6 million yuan in total at most to Wansheng Industrial Company by means of

non-public offering of shares the funds will be used to replenish the working capital after deducting offering

expenses and the offering of shares will result in a changes in controlling rights of the Company. On March 12

2021 the company received the Acceptance of Administrative License Application of China Securities

Regulatory Commission (Acceptance No. 210576) issued by China Securities Regulatory Commission

(hereinafter referred to as CSRC). CSRC reviewed the administrative license application materials submitted by

the company for the Approval of Non-public Offering of Listed Companies (A-Share Motherboard SMEs Board

and B-Share) and considered that all the application materials were complete and in line with the legal form and

decided to accept the application for administrative license. From March to May 2021 the company has

respectively received the Notice of Feedback on the Review of Administrative License Project (No. 210576) and

the Letter on Making Preparation for the Meeting of the Issuance Examination Commission for the Non-Public

Offering of Shares of Shenzhen China Bicycle Company (Holdings) Limited. issued by the CSRC. By the end of

this report period the company and the intermediary agencies have completed the reply work on time and

submitted it to CSRC in time and the follow-up work is in progress. The company's non-public offering of shares

is still subject to the approval of the CSRC whether the approval could be obtained and the final approval time is

uncertain. The company will timely perform the information disclosure obligation in strict accordance with the

provisions and requirements of relevant laws and regulations and according to the review progress of the

application by the CSRC. Please invest rationally and pay attention to investment risk.III. Main business analysis

See the “I-Main businesses of the Company in the reporting period”

Y-o-y changes of main financial data

In RMB

Current period Same period last year y-o-y changes (+ -) Reasons

The revenue from

jewelry and gold

Operating revenue 54130317.60 42656355.21 26.90%

business growth in the

Period

The cost from jewelry

Operating costs 48590120.12 36100765.65 34.60% and gold business growth

in the Period

Sales expenses 876189.13 1478378.78 -40.73%

The administrative

expenses of jewelry and

Administration expenses 2619117.48 1679719.44 55.93%

gold business growth in

the Period

Finance expenses -49422.51 -19260.39 156.60%

Income tax expenses 161386.48 170038.76 -5.09%

The R&D expenses of

jewelry and gold

R&D investment 2120389.55 753742.20 181.31%

business growth in the

Period

The account received in

Net cash flow arising advance was received in

-2447126.82 1350395.94 -281.22%

from operating activities the same period of the

previous year

Net cash flow arising

-5957.99 64500.00 -109.24%

from investment

activities

Obtained the investment

Net cash flow arising of minority shareholders

4725000.00 -100.00%

from financing activities due to the capital

increased prior period.The account received in

Net increase of cash and advance was received in

-2453084.81 6139895.94 -139.95%

cash equivalent the same period of the

previous year

Major changes on profit composition or profit resources in reporting period

□ Applicable √ Not applicable

No major changes on profit composition or profit resources occurred in reporting period.Constitution of operating revenue

In RMB

Current Period Same period last year

Ratio in operating Ratio in operating Y-o-y changes (+-)

Amount Amount

revenue revenue

Total operating

54130317.60 100% 42656355.21 100% 26.90%

revenue

According to industries

Jewelry and gold 40728749.57 75.24% 25097387.76 58.84% 62.28%

Bicycle lithium

battery material and 13401568.03 24.76% 17558967.45 41.16% -23.68%

others

According to products

Jewelry and gold 40728749.57 75.24% 25097387.76 58.84% 62.28%

Bicycle lithium

battery material and 13401568.03 24.76% 17558967.45 41.16% -23.68%

others

According to region

Domestic 54130317.60 100.00% 42656355.21 100.00% 26.90%

Industries products or regions that account for more than 10% of the operating revenue or operating profit of the Company

√ Applicable □ Not applicable

In RMB

Increase/decrease Increase/decrease Increase/decrease

Operating

Operating costs Gross profit ratio of operating of operating cost of gross profit

revenue

revenue y-o-y y-o-y ratio y-o-y

According to industries

Jewelry and gold 40728749.57 37322674.70 8.36% 62.28% 64.78% -1.39%

Bicycle lithium

battery material 13401568.03 11267445.42 15.92% -23.68% -16.23% -7.48%

and others

According to products

Jewelry and gold 40728749.57 37322674.70 8.36% 62.28% 64.78% -1.39%

Bicycle lithium

battery material 13401568.03 11267445.42 15.92% -23.68% -16.23% -7.48%

and others

According to region

Domestic 54130317.60 48590120.12 10.23% 26.90% 34.60% -5.13%

Under circumstances of adjustment in reporting period for statistic scope of main business data adjusted main business based on

latest one year’s scope of period-end

□ Applicable √ Not applicable

Reasons for y-o-y relevant data with over 30% changes

√ Applicable □ Not applicable

1. The operating revenue from jewelry and gold business has a growth of 62.28% from a year earlier mainly because at same period

last year the revenue was affected by the epidemic.IV. Analysis of the non-main business

□ Applicable √ Not applicable

V. Assets and liability analysis

1. Major changes of assets composition

In RMB

End of current Period End of last year

Ratio

Ratio in total Ratio in total Notes of major changes

Amount Amount changes

assets assets

Monetary fund 17434893.24 18.45% 19887978.05 21.68% -3.23%

Account

55552419.15 58.78% 55031424.70 59.98% -1.20%

receivable

Inventory 7601075.77 8.04% 7729325.94 8.42% -0.38%

Fix assets 3612186.01 3.82% 3792133.36 4.13% -0.31%

Contract liability 16699148.73 17.67% 15254713.38 16.63% 1.04%

2. Main overseas assets

□Applicable √Not applicable

3. Assets and liability measured by fair value

□Applicable √Not applicable

4. Assets rights restricted till end of the period

1) At the end of the current period the total fixed output value included six suites of house properties at 7-20F Lianxin JiaYuan

Luohu District Shenzhen purchased in 2016 with original value of 2959824.00 Yuan which were affordable housing purchased

from the Housing and Construction Bureau of Luohu District to provide to enterprise talents for living. The contract stipulated that

the purchasing enterprise is not allowed to conduct any form of property rights transaction with any units or individual other than the

government.V. Investment analysis

1. Overall situation

□ Applicable √ Not applicable

2. The major equity investment obtained in the reporting period

□ Applicable √ Not applicable

3. The major non-equity investment doing in the reporting period

□ Applicable √ Not applicable

4. Financial assets investment

(1) Securities investment

□ Applicable √ Not applicable

The Company has no securities investment in the Period

(2) Derivative investment

□ Applicable√Not applicable

The Company has no derivatives investment in the Period

VII. Sales of major assets and equity

1. Sales of major assets

□ Applicable √Not applicable

The Company had no sales of major assets in the reporting period.2. Sales of major equity

□ Applicable √Not applicable

VIII. Analysis of main holding company and stock-jointly companies

√Applicable □ Not applicable

Particular about main subsidiaries and stock-jointly companies net profit over 10%

In RMB

Company Main Register Operating Operating

Type Total assets Net assets Net profit

name business capital revenue profit

Shenzhen

Xinsen Sales of

Jewelry jewelry 200000000. 45073976.8 35575705.0 40728749.5 1321219.Subsidiary 1159833.12

Gold Supply diamonds 00 0 5 7 59

Chain Co. and gold

Ltd.Shenzhen

Sales of

Emmelle 14483832.6 -432794.4

Subsidiary bicycles and 5000000.00 4877452.21 773553.50 -432794.48

Industry Co. 3 8

spare parts

Ltd.Shenzhen Sales of

Emmelle software and

-125014.0

Cloud Subsidiary information 2000000.00 3636331.59 1886612.45 332743.53 -125014.065

Technology technology

Co. Ltd. services

Particular about subsidiaries obtained or disposed in report period

□ Applicable √ Not applicable

Notes of holding and shareholding companies

1. The Company holds 65% equity of the Shenzhen Xinsen Jewelry Gold Supply Chain Co. Ltd. the balance of minority equity at

period-end amounting to 12943996.76 Yuan.2. The Company holds 70% equity of the Shenzhen Emmelle Industry Co. Ltd. the balance of minority equity at period-end

amounting to 1463235.67 Yuan.3.The Company holds 49% equity of Shenzhen Emmelle Cloud Technology Co. Ltd indirectly the balance of minority equity at

period-end amounting to 542172.35 yuan.IX. Structured vehicle controlled by the Company

□ Applicable √ Not applicable

X. Risks and countermeasures

(1)The tough international economic situation: The domestic economy is at the structural adjustment stage in the

course of development structural problems and deep-seated conflicts are highlighted. The economic downturn

pressure continues to increase many unstable and uncertain factors exist which affect and impact the traditional

manufacturing industries and the social consumption structure demand. Since the domestic economy is at the

structural adjustment stage coupled with a difficult situation of continuously rising labor cost manufacturing cost

financing cost and material cost the bicycle industry as a conventional manufacturing field recorded a decline in

the market turnover. Due to the low entry threshold and numerous manufacturers the competition in the market is

extremely fierce.

(2) Affected by the impact of COVID-19 the social economy entered a special dilemma with more uncertainty

troubling factors. The Company’s operation and upstream & downstream supply and sales segment are affected

by the impact from time to time.In the fave of the above problems the central government and governments at all levels have taken multiple

measures to stabilize the people’s livelihood stabilize the enterprises and employment the Company will strive to

maintain stability and seek development through increase the income and reduce the expenditures. combined with

the actual situation on its own poor background after reorganization on the one hand we continued to adhere to

traditional business model development in combination with the new national standard of safety technical

specifications for electric bicycle the Company carry out R&D works on the products. Optimize and adjust the

product structure and sales mode transformation actively expand the e-commerce business model in accordance

with the e-commerce transformation of business team and controllable cost of internal & external connections so

as to realize the stable development of e-commerce for retail business; At the same time based on the long-term

process of the electric bicycle business the follow-up research of related industrial projects and technology

applications in the upstream and downstream of the industrial chain have been carried out accordingly and on the

basis of extensive business contacts and businesses in previous years it continued to expand the lithium battery

material business to enrich the main business. On the one hand continued to promote the development of the

jewelry gold supply chain business and expand the business dimension. In August 2019 the company and

Shenzhen Zuankinson Jewelry Co. Ltd. jointly invested 6.5 million yuan to establish Shenzhen Xinsen Jewelry

Gold Supply Chain Co. Ltd. the company holding 65% of the shares as the controlling shareholder of Shenzhen

Xinsen Jewelry Gold Supply Chain Co. Ltd. while Zuankinson Jewelry holding 35% of the shares. According to

the actual situation of business development in February 2020 the two parties decided to increase the capital of

Shenzhen Xinsen Jewelry Gold Supply Chain Co. Ltd. to 20 million yuan in the same proportion and the relevant

registered capital has been in place in June 2020. In order to meet the future operation and development needs of

Shenzhen Xinsen Jewelry Gold Supply Chain Co. Ltd. and enhance its financial strength comprehensive

competitiveness and anti-risk ability the company signed a capital increase contract with the joint venture

Shenzhen Zuankinson Jewelry and Gold Supply Chain Co. Ltd. in August 2020 and once again increased capital

to Shenzhen Xinsen Jewelry Gold Supply Chain Co. Ltd. in the same proportion and the registered capital was

increased from 20 million yuan to 200 million yuan of which the company increased capital of 117 million yuan

which would be successively invested in accordance with its own funds and the availability of funds raised from

the non-public issuance of A shares; Zuankinson Jewelry newly increased capital of 63 million yuan totaling 180

million yuan. On August 21 2020 the company's 2020 second extraordinary general meeting of shareholders

reviewed and approved the above capital increase. On the one hand we strived to promote the selection of the

company's restructuring party and plan for the non-public issuance of stocks hoping to improve the company's

business strength and development potential.rd

In planning the non-public offering of shares on 30 December 2020 the Company held the 3 extraordinary