ANNUAL REPORT
Winner Medical Co. Ltd.Brand Vision
Caring Health Cherishing Life and Protecting the Environment
for A Better World.Core Business Principles
Quality over the Profit，Brand over the Speed Social Value overthe Corporate Value.Brand Ethics
Integrity in Operation Respect for Consumers Fair Competition Social Responsibility
Intellectual Property Rights Continuous Improvement.The Letter to Shareholders
The Strength to Navigate Through Cycles — Staying True to Our Original Aspiration
Building a Centennial Visionary Winner Together
Dear Shareholders Partners and All Members of Winner Group
The year 2026 embraces a dual milestone for Winner Group — the 35th anniversary of our founding and the fifth anniversary
of our A-share listing. As we commence the first year of the “15th Five-Year Plan” period (2026-2030) I would like to take
this opportunity to offer an honest and transparent review of our journey to our Shareholders who have long been placing
their trust in and walking alongside Winner Group and to share with you our perspectives on the future.I. Over the past 35 years we have been committed to only one thingBack in 1991 when founding Winner Group in Zhuhai I held fast to just one simple belief: “Only by Delivering QualityProducts Can a Company Survive.”
Over the past 35 years business models have evolved marked by ups and downs yet that original belief has never wavered.From starting as an OEM supplier of medical dressings to becoming the benchmark for medical dressings in China; from
developing the core technology of “cotton spunlace non-woven fabric” tested by thousands of experiments to founding
“Purcotton” in 2009 creating a never-seen-before category; from listing on the A-share market in 2020 to our present global
landscape driven by the dual-engine growth of “Medical and Consumer” synergies — in every step of our journey we have
steadfastly adhered to one core principle:
Value Ranking of Winner Group (Unchanged for 35 Years):
1. Quality over the Profit
2. Brand over the Speed
3. Social Value over the Corporate Value
This ranking is seemingly simple yet staying true to it has always been extremely challenging when tempted. This is
especially true in the consumer goods sector. While other players chase traffic-driven growth and prioritize absolute short-
term expansion we are committed to 100% premium cotton rigorous standards and environmental protection. The 35 years
of journey has proven that doing the right thing strategically and getting things right tactically — time will ultimately deliver
the fairest answer.II. Five Years as A Listed Company: Fulfilling Our “Worthy of Trust” Commitment
When ringing the listing bell in 2020 I shared with our Shareholders that Winner Group aspired to become a good company
worthy of long-term trust. Five years on we have honored this original aspiration with solid tangible results:
· Medical Business (Our Stable “Ballast Stone”): benefiting from the 35 years of medical quality heritage our product lines
have expanded comprehensively from traditional wound care to advanced dressings operating room consumables and one-
stop total solutions. Our services are now available for over 110 countries and regions worldwide with revenue from our
main business achieving steady growth over the past five years.
3· Consumer Business (Our Powerful “Growth Engine”): Purcotton started with just three stores in 2010 and now boasts
over 500 stores nationwide. Not only did we pioneer the cotton tissue category and maintain our leadership in sales volume
but thanks to omni-channel marketing and lean management of nearly 70 million members we have also emerged as a
representative force among China’s new domestic brands.· Global Footprint (From “Going Global” to “Taking Root”): In 2024 we successfully acquired GRI a U.S. company
enabling localized production and operations across the Americas market in one decisive move and truly achieving the leap
from “product globalization” to “brand and service globalization.”
· Shareholder Returns: In 2020 the Company’s net proceeds from its listing were RMB3.56 billion. Over the past five years
our total investment reached RMB5.05 billion (primarily invested in projects funded by the offering and four M&A projects).The Company has declared a total of RMB3.05 billion in dividends (including the proposed dividend for the current year)
utilized approximately RMB690 million to buy back shares (over 12 million shares repurchased) delivering a total return
of RMB3.75 billion to shareholders representing 105% of net proceeds from the listing. In net assets attributable
to parent company reached RMB11.52 billion while operating revenue and R&D expenses totaled RMB10.95 billion and
RMB0.41 billion respectively. Compared with pre-IPO figures in 2019 these represent increases of 264.4% 139.4% and
165% respectively.
III. The Code of Winner: Enduring Strategy Evolving Tactics
I am often asked: What is the code that enables Winner Group to navigate through cycles My answer is just the four words:
Enduring Strategy Evolving Tactics.The “Enduring” Strategy: Anchored in our core principles of “Long-Termism” and “Product Leadership” we remain
committed to the dual-engine growth of “Medical + Consumer” synergies and stay focused on our main businesses. Over the
past 35 years we have neither been tempted by short-term windfalls nor distracted by market noise. This strategic focus has
enabled us to accumulate our most valuable assets: a quality DNA and a respected brand reputation.The “Evolving” Tactics: While holding our bottom line where it matters we embrace change at a deliberate pace: “a smallstep every half year a major step every year and a disruptive leap every three years.” Since our listing five years ago we
have continued to ramp up R&D investment refined store operations and pursued comprehensive digital transformation
reshaping our supply chain with data and AI. We have also executed precision global acquisitions to gain access to premium
overseas markets.Strategies Define the Direction Ahead and Tactics Determine the Pace Forward; With No Clear Direction Faster Progress
Only Leads to Greater Risks; With No Steady Pace Even the Best Direction Cannot Secure Goal Delivery.IV. Outlook for the 15th Five-Year Plan Period (2026–2030): Resonating with the
National Vision and the Times
The year 2026 marks the first year of the “15th Five-Year Plan” period and Winner Group has always closely aligned its
blueprint with national strategies:
1. Medical Sector: We will increase investment in independent R&D focusing on advanced dressings and green operating
room solutions while expanding into premium overseas markets to demonstrate the strength of China’s intelligent
manufacturing.
42. Consumer Sector: We will deepen product innovation and scenario expansion rooted in the concept of “one cottonflower” by accelerating digital transformation to solidify our absolute leadership as China’s pure cotton lifestyle brand.
3. Digital-Driven Operations: We will fully integrate R&D production sales and supply chains leveraging data and AI to
drive business decisions making our organization more agile and our operations more efficient.Green Development and Social Responsibility: We will continue to pursue the vision that “Pure Cotton Changes the World”
and unlock its full potential. This represents not only the business philosophy of Purcotton but also the green commitment of
Winner Group to the Earth.V. To Our Shareholders: Honoring Responsibility Building A Centennial Visionary
Winner Together
Blossoming from a small workshop in Zhuhai into a benchmark in our industry and from a new entrant in the capital market
into a long-term value creator features the journey Winner Group has taken. Yet I am fully aware that past success does not
always mean future results and the trust of our shareholders must be earned every single day anew.Here I would like to reaffirm to our shareholders:
The guiding principle of the “Three Priorities” — Quality over the Profit Brand over the Speed Social Value over the
Corporate Value will remain unchanged and it will be embedded in the Articles of Association and guide us for years ahead.Our commitment to value creation will be always on the way. We will refresh our efforts to strengthen our core
competitiveness and profitability to reward our investors.Corporate governance will become even more transparent. We will work harder on the rotating CEO system to enable
a smooth transition toward a team-based decision-making mechanism under a rotating Chairperson and enhance open
communication with our shareholders.Our social responsibility will become even more visible. We will stay committed to green and low-carbon development
harnessing the power of “one cotton flower” to contribute to environmental protection and the cause of health.Conclusion
Our 35-year journey of overcoming challenges would not have been possible without the financial trust of our shareholders
the strong collaboration of our partners and the relentless dedication of every member of Winner Group. It is you who have
made our vision of “Caring Health Cherishing Life and Protecting the Environment for A Better World” a reality step by
step.The Centennial Visionary Winner is just setting sail.At this new historical starting point we will continue to move forward at the pace of “Winner” advancing step by step to
fulfill the grand blueprint of a century-defining enterprise. We look forward to sharing this journey with all of you witnessing
Winner Group’s evolution from a benchmark in China to a world-class brand.Li Jianquan
Chairman of Winner Group
April 20 2026
5Section I
Important Notes Contents
and Definitions
6Section I Important Notes Contents and Definitions The Board of Directors the Directors Investors are advised to exercise caution and
and senior management of the Company be aware of investment risks.guarantee that this annual report is truthful The Company has detailed the possible
accurate and complete; it contains no false risks and corresponding countermeasuresrecords misleading statements or significant in i t s opera t ions in “XI . Out look foromissions; and they bear individual and joint Future Development” under “Section IIIlegal liabilities. Management Discussion and Analysis” of
Li J ianquan the Company’s principal this report. Investors are advised to pay close
executive officer Fang Xiuyuan the person attention to the relevant information.in charge of accounting affairs and Zhao The profit distribution plan approved at this
Yan the person in charge of the accounting Board of Directors meeting is as follows:
department (chief accounting officer) declare based on 582329808 shares a cash dividend
that they guarantee the truthfulness accuracy of RMB3.0 (tax inclusive) for every 10
and completeness of the financial report in shares will be distributed to all shareholders.this annual report. No bonus shares (tax inclusive) will be
All Directors have attended the Board of distributed and no shares will be converted
Directors meeting to review this report. from capital reserves.The forward-looking statements contained The Company’s total cash dividend for
in this annual report regarding future amounted to RMB436747356.00 (tax
development strategies performance plans inclusive) accounting for 56.87% of the net
and other similar matters represent the profit attributable to ordinary shareholders
Company’s goals and are of a planning of the listed company for the year nature. Their realization depends on various which includes (1) the total cash dividend
factors including market conditions and of RMB262048413.60 (tax inclusive) for
therefore involves uncertainties. These the interim period to all shareholders
statements do not constitute a forecast of with a cash dividend of RMB4.50 (tax
the Company’s future profitability nor do inclusive) per 10 shares; (2) the proposed
they represent a substantive commitment total cash dividend of RMB174698942.40
to investors or other stakeholders. Both (tax inclusive subject to approval by the
investors and other stakeholders should shareholders’ meeting) to all shareholders
maintain sufficient awareness of the risks with a cash dividend of RMB3.00 per 10
involved and understand the differences shares.between plans forecasts and commitments.
7
Important NotesCONTENTS
Section I Important Notes Contents and Definitions... 6
Section II Company Profile and Key Financial Indic...11
Section III Management Discussion and Analysis ..... 21
Section IV Environmental Social and Corporate Gove...73
Section V Important Matters ....................... 100
Section VI Changes in Shares and Information on Sh..110
Section VII Bonds ..................................118
Section VIII Financial Report ......................119
List of Documents Available for Inspection
(I) Financial statements signed and sealed by the Company’s principal executive officer
the person in charge of accounting affairs and the head of the accounting department (chief
accounting officer).(II) The original audit report bearing the seal of the accounting firm and the signature and seal of
the certified public accountants.(III) Originals of all documents and announcements of the Company publicly disclosed during the
Reporting Period.
8Section I Important Notes Contents and Definitions 9Definitions
Term Definition
Winner Group Group Company Winner Medical Co. Ltd.Reporting Period January 1 to December 31 Serious medical care under the medical business and consumer medical care
Winner Medical
business
Shenzhen Purcotton Technology Co. Ltd. a wholly-owned subsidiary of the
Purcotton
Company
Zhejiang Longterm Medical Technology Co. Ltd. a company in which the
Longterm Medical
Company acquired a 55% stake in 2022
Winner Medical (Hunan) Co. Ltd. a company in which the Company acquired a
Winner Medical (Hunan)
68.70% stake after acquisition and capital increase in 2022
Winner Guilin Latex Co. Ltd. a company in which the Company acquired a
Winner Guilin
91.74% stake in 2022
Shenzhen Junjian Medical Device Co. Ltd. a company in which the Company
Junjian Medical
acquired a 100% stake in 2022
Global Resources International Inc. a company in which the Company acquired
GRI
a 75.20% stake in 2024
Winner Medical (Huanggang) Co. Ltd. a wholly-owned subsidiary of the
Winner Medical(Huanggang)
Company
Winner Medical (Jiayu) Winner Medical (Jiayu) Co. Ltd. a wholly-owned subsidiary of the Company
Winner Medical (Chongyang) Co. Ltd. a wholly-owned subsidiary of the
Winner Medical(Chongyang)
Company
Winner Medical (Jingmen) Co. Ltd. a wholly-owned subsidiary of the
Winner Medical (Jingmen)
Company
Yuan 10 thousand Yuan 100
RMB RMB10000 RMB100 million
million Yuan
10Section II Company Profile and Key Financial Indicators Section II
Company Profile and
Key Financial Indicators
11Company Overview
Founded in 1991 Winner Group (300888.SZ) went public on the Shenzhen Stock Exchange in September 2020. Through
35 years of exploration and practice it has evolved into a holistic health enterprise synergistically converging medicalinnovation and consumer wellness ecosystems. Winner Group driven by the vision of “Caring Health Cherishing Life andProtecting the Environment for A Better World” owns two major brands: “Winner Medical” and “Purcotton”. Its products
cover a wide range of segments including wound care infection prevention operating room consumables personal carehome care maternity and baby care and home textiles and apparel. Adhering to the core business principles of “Qualityover the Profit Brand over the Speed Social Value over the Corporate Value” and guided by the development strategy of
“Product Leadership Operational Excellence Brand Advancement and Digital Empowerment” the Company is pursuing
dual-track advancement in medical and consumer goods sectors; driving collaborative expansion across domestic and global
markets; enabling convergent growth of online and offline channels; upholding altruism and long-termism — committed to
delivering safe premium-quality cost-effective and experience-driven products and services for global users.
12Section II Company Profile and Key Financial Indicators Business Overview
13Global Production Capacity
Country Location of Facilities
Guangdong Province (1) Hubei Province (8) Hunan Province (1) Zhejiang Province
China
(2) Guangxi Zhuang Autonomous Region (1) and Anhui Province (1)
Overseas Mexico Vietnam the United States and the Dominican Republic
14Section II Company Profile and Key Financial Indicators Awards
A The Project of Winner Medical was awarded the G Purcotton won the “London Design Awards” in
second prize in the Science and Technology Progress Awards by the China National Textile and Apparel H The “Baby Welcome Gift Organic Cotton 10-PieceCouncil Set Gift Box” submitted by Shenzhen PurcottonB Winner Medical (Huanggang) Winner Medical Technology Co. Ltd. was selected for the “Top(Jiayu) and Winner Medical (Tianmen) were awarded Ten Innovative Textile Products” list
the “Five-Star Environmental Factory” by the China I The comfort evaluation of Purcotton’s pureNonwovens & Industrial Textiles Association cotton sleepwear was included in the “Science andC Winner Medical was selected for the “Health Technology Guidance Project of the China NationalIndustry Brand List” at the China Health Industry Textile and Apparel Council”Ecological Conference and won the “CPEO Gold J The Company was awarded the highest A rating forAward” information disclosure of listed companies by the
D Winner Medical (Jingmen) received the Gold Shenzhen Stock Exchange for 2024
Medal on the ECOVADIS platform K Selected for Outstanding Practice Cases in
E Winner Medical (Chongyang) received the Silver Sustainability of Listed Companies by the China
Medal on the ECOVADIS platform Association for Public CompaniesF Purcotton was recognized as a “Continuous L Selected for 2024 Best Practice Cases in theInnovation Unit” by the Ministry of Industry and Directors of Board of Listed Companies by the China
Information Technology & China Textile Information Association for Public Companies
Center
15I. Company Information
Stock Abbreviation Winner Medical Stock Code 300888
Chinese Name 稳健医疗用品股份有限公司
Abbreviated Chinese Name 稳健医疗
English Name (if any) Winner Medical Co. Ltd.Abbreviated English Name (if any) Winner Medical
Legal Representative Li Jianquan
F42 Building 2 Huilong Business Center Beizhan Community Minzhi
Registered Address Subdistrict Longhua District Shenzhen; Winner Industrial Park 660 Bulong Road
Longhua District Shenzhen
Postal Code for Registered Address 518131
On June 1 2021 the Company’s registered address was officially changed from
“Winner Industrial Park 660 Bulong Road Longhua New District Shenzhen”Registered Address Change History to “F42 Building 2 Huilong Business Center Beizhan Community MinzhiSubdistrict Longhua District Shenzhen; Winner Industrial Park 660 Bulong RoadLonghua District Shenzhen”
F42 Building 2 Huilong Business Center Beizhan Community Minzhi
Office Address
Subdistrict Longhua District Shenzhen
Postal Code for Office Address 518131
Website https://winnermedical.cn
Email investor@winnermedical.com
II. Contact Information
Board Secretary Securities Representatives
Name Chen Huixuan Xu Jia Liu Yanxiang
F42 Building 2 Huilong Business F42 Building 2 Huilong Business
Address Center Beizhan Community Minzhi Center Beizhan Community Minzhi
Subdistrict Longhua District Shenzhen Subdistrict Longhua District Shenzhen
Tel. 0755-28066858 0755-28066858
Fax: 0755-28066858 0755-28066858
Email investor@winnermedical.com investor@winnermedical.com
16Section II Company Profile and Key Financial Indicators III. Designated Locations for Information Disclosure and for Keeping Records
Stock Exchange Website for Disclosure of the
Company’s Annual Reports Shenzhen Stock Exchange (http://www.szse.cn/)
Media Name and Website for Disclosure of the China Securities Journal Shanghai Securities News Securities
Company’s Annual Reports Times Securities Daily CNINFO (http://www.cninfo.com.cn/new/index)
Location for Keeping the Company’s Annual Reports Securities Department of the Company
IV. Other Relevant Information
Accounting firm appointed by the Company
Name of Accounting Firm Ernst & Young Hua Ming LLP
Office Address of Accounting Firm Rooms 01-12 17/F Ernst & Young Tower Oriental Plaza 1 East Chang’an Avenue Dongcheng District Beijing
Name of Signing Accountant Liao Wenjia Chen Huijin
Sponsor appointed by the Company for continuous supervision during the Reporting Period
□Applicable √ N/A
Financial advisor appointed by the Company for continuous supervision during the Reporting Period
□Applicable √ N/A
V. Key Accounting Data and Financial Indicators
Does the Company need to retrospectively adjust or restate accounting data of previous year
□ Yes √No
2024 YOY change 2023
Operating revenue (RMB) 10949489967.01 8977853631.73 21.96% 8185022057.20
Net profit attributable to shareholders
of the listed company (RMB) 767967461.87 695378928.72 10.44% 580403232.37
Net profit attributable to shareholders
of the listed company after deducting 705635870.36 590858058.78 19.43% 412027497.25
non-recurring gains and losses (RMB)
Net cash flow from operating
activities (RMB) 1665676894.93 1265755266.70 31.60% 1063326232.23
Basic earnings per share (RMB/share) 1.32 1.19 10.92% 0.98
Diluted earnings per share
(RMB/share) 1.32 1.19 10.92% 0.98
Weighted average return on net assets 6.74% 6.07% 0.67% 5.03%
17End of End of 2024 Change from the end of last year End of 2023
Total assets (RMB) 18404858027.22 18391855961.52 0.07% 17112022449.97
Net assets attributable to shareholders
of the listed company (RMB) 11516711030.45 11151279644.56 3.28% 11533224328.00
The lower of the Company’s net profit before and after deducting non-recurring gains and losses was negative for each of
the most recent three fiscal years and the audit report for the most recent year indicates that there is uncertainty about the
Company’s ability to continue as a going concern
□ Yes √ No
The lowest value among the Company’s audited profit before tax net profit and net profit excluding non-recurring gains and
losses during the Reporting Period is negative
□ Yes √ No
VI. Quarterly Key Financial Indicators
Unit: RMB
Q1 Q2 Q3 Q4
Operating revenue 2605313851.05 2690898105.87 2600871707.33 3052406302.76
Net profit attributable to shareholders
248565301.08243432707.99239897356.5436072096.26
of the listed company
Net profit attributable to shareholders
of the listed company after deducting 234265747.12 226357984.14 218487177.09 26524962.01
non-recurring gains and losses
Net cash flows from operating activities -230322471.93 570248246.00 366804691.54 958946429.32
Note 1: The relatively low net profit attributable to shareholders of the listed company in Q4 was primarily due to a RMB179
million impairment charge on goodwill recognized during Q4.Note 2: The increase in net cash flows from operating activities in Q4 was primarily attributable to higher collection of sales
proceeds.Are the aforementioned financial indicators or their aggregate amount materially different from the relevant financial
indicators in the Company’s previously disclosed quarterly and interim reports
□ Yes √ No
18Section II Company Profile and Key Financial Indicators VII. Differences in Accounting Data under Domestic and Overseas Accounting
Standards
1. Differences in net profit and net assets between financial reports prepared under International
Accounting Standards and Chinese Accounting Standards
□Applicable √ N/A
The Company had no difference in net profit and net assets between financial reports prepared under International Accounting
Standards and Chinese Accounting Standards during the Reporting Period.
2. Di fferences in net prof i t and net assets between f inancial reports prepared under overseas
accounting standards and Chinese Accounting Standards
□Applicable √ N/A
The Company had no difference in net profit and net assets between financial reports prepared under overseas accounting
standards and Chinese Accounting Standards during the Reporting Period.VIII. Items and Amounts of Non-recurring Gains and Losses
√ Applicable □N/A
Unit: RMB
Item Amount in Amount in 2024 Amount in 2023 Explanation
Gains and losses on disposal of non-current assets
(including reversal of previously recognized -12559464.36 -2083378.10 -46464882.49
impairment losses)
Government grants recognized in profit or loss
(excluding those related to the company’s normal
operating activities consistent with national
policy granted based on established criteria and 44188509.32 37931590.29 74822989.42
having a continuing impact on the Company’s
profit and loss)
Changes in fair value and gains and losses from
the disposal of financial assets and financial
liabilities held by non-financial enterprises
(excluding effective hedging transactions directly 55565073.76 87767017.20 172439376.04
related to the Company’s normal operating
activities)
Gain/loss on debt restructuring 1788767.41
Other non-operating income and expenses
excluding the items above -6751238.42 1445748.24 10371355.38
Less: Income tax effect 12120494.18 20765995.02 35321337.22
Effect on non-controlling interests (after tax) 5990794.61 1562880.08 7471766.01
Total 62331591.51 104520869.94 168375735.12 --
19Details of other items classified as non-recurring gains and losses:
□Applicable √ N/A
The Company had no details of other items classified as non-recurring gains and losses.Explanation on circumstances under which items specifically identified as non-recurring gains and losses in the Information
Disclosure Interpretative Announcement No. 1 for Companies Publicly Issuing Securities – Non-recurring Gains and Losses
are classified as items of recurring gains and losses
√ Applicable □N/A
Item Reason
Complies with national policy regulations meets established standards
Cotton transportation subsidies
and has a continuing impact on profit or loss
Interest income from large-denomination The Company’s routine cash management practices with a continuing
certificates of deposit impact on profit or loss
20Section III Management Discussion and Analysis Section III
Management Discussion
and Analysis
21I. Main Operations of the Company during the Reporting Period
The Company is subject to the disclosure requirements for “Medical Device Business” in the Shenzhen Stock Exchange
Listed Company Self-Regulation Guidelines No. 4 – Industry Information Disclosure for Growth Enterprise Market.The Company is subject to the disclosure requirements for “Textile and Apparel Related Business” in the Shenzhen Stock
Exchange Listed Company Self-Regulation Guidelines No. 3 – Industry Information Disclosure.(I) Main operations of the Company
Winner Group driven by the vision of “Caring Health Cherishing Life and Protecting the Environment for A Better World”
owns two major brands: “Winner Medical” and “Purcotton” specializing in medical and consumer segments respectively.With continuous innovation and expansion of our business scope our products cover a wide range of segments including
wound care infection prevention operating room consumables personal care home care maternity and baby care andhome textiles and apparel. Adhering to the core business principles of “Quality over the Profit Brand over the Speed SocialValue over the Corporate Value” and guided by the development strategy of “Product Leadership Operational ExcellenceBrand Advancement and Digital Empowerment” the Company dedicates itself to providing safe high-quality cost-effective
products and services with a strong user experience for customers worldwide.
1. Medical consumables
In the 1990s the international medical dressing market was dominated by European and American companies in terms
of technical standards and market share. Domestic Chinese products lacked competitiveness due to lagging productionstandards and inconsistent quality. Against this backdrop driven by the vision of “Bringing Chinese Medical Dressings to theWorld” Mr. Li Jianquan the founder of Winner Group established the Winner Medical brand in 1991. Over the 35 years ofdevelopment Winner Medical has built a complete industrial chain encompassing “raw material procurement – core materialR&D – product manufacturing – terminal sales”. Through continuous R&D and upgrades the Company’s product portfolio
has been optimized and now includes traditional wound care and bandaging advanced wound dressings operating room
consumables infection prevention and healthcare and personal care products. Winner Medical has maintained stringent
quality standards throughout its development establishing an international level quality management system early on in
the industry. Its products have received authoritative international certifications including the EU CE marking US FDA
clearance and Japanese Ministry of Health Labour and Welfare approval. With production capacity in China the United
States Vietnam and the Dominican Republic Winner Medical has established global credibility and supply capabilities as aprofessional medical brand. In terms of distribution Winner Medical pursues a three-pronged approach: “overseas business+ domestic professional medical market + daily consumer medical market”. Through OEM ODM and its own brand
Winner Medical exports to over 110 countries and regions. This brand’s high quality has earned widespread recognition from
hospitals and trust from consumers in the domestic market resulting in higher brand awareness and a stronger reputation.Looking ahead Winner Medical will accelerate R&D in biomedical and tissue engineering adhering to the innovation
philosophy of technology-driven development and product upgrades prioritizing product leadership and advancements in
basic materials. By integrating Chinese manufacturing with the global supply chain and expanding into global markets
Winner Medical continues to advance towards its strategic goal of becoming a “one-stop solution for medical consumables”.
22Section III Management Discussion and Analysis 2. Consumer goods
To address the global industry challenge of cotton gauze shedding lint and fluff the Winner Medical team conducted
thousands of experiments and developed a patented pure cotton spunlace non-woven fabric technology. Capitalizing on the
natural soft breathable biodegradable and eco-friendly properties of cotton fiber the Group launched the brand Purcotton
in 2009 innovatively applying rigorous production standards born of its medical heritage to pure cotton goods. From its
inception Purcotton has insisted on using high-quality cotton from around the world maintaining strict quality control and
aiming to build a nationally trusted brand. Driven by the vision of “Pure Cotton Changes the World” Purcotton continuously
promotes the benefits of cotton and has pioneered over ten new product categories including cotton tissues pure cotton top
sheet sanitary napkins and pure cotton top sheet diapers. Currently Purcotton operates hundreds of brand stores in over 100
cities across China and has established an omni-channel sales network across major e-commerce platforms social commerceplatforms and nationally renowned supermarket chains. Leveraging its core competitive edges of “Medical Heritage; Cotton-Centric Philosophy; Quality DNA” Purcotton has cultivated a brand image of “Comfort Commitment; Health Assurance;Eco-Consciousness” earning the favor of a broad consumer base. In the future Purcotton will remain committed to its brandinitial aspiration of “We focus on 100% cotton and unlock its full potential to develop the high standard with the best qualityof cotton products” creating and leading a “Reassurance Wellbeing Sustainability” pure cotton lifestyle.(II) Main products and applications
The Company’s products in the medical segment include advanced wound dressings operating room consumables traditional
wound care and bandaging infection prevention healthcare and personal care and other products. The products in the
consumer segment include dry and wet cotton tissues feminine hygiene products other non-woven products baby and child
apparel and products adult apparel and other woven products.The main product categories and illustrations of some products in the Company’s medical segment are shown below:
Product Categories Main Applications Specific Products Illustrations of Some Products
Applied in wound care to
Foam dressings silicone
provide a moist wound
Advanced wound dressings alginate dressings
healing environment reduce
dressings super
dressing change frequency
absorbent dressings etc.and minimize further trauma
Operating room Applied in prevention of Surgical gloves surgical packs
consumables surgical site infections surgical gowns etc.Applied in wound exudate
Traditional wound absorbing wound
Medical cotton gauze bandage
care and bandaging dressing and sports
protection
23Product Categories Main Applications Specific Products Illustrations of Some Products
Applied in occupational Face masks protective
protection for medical clothing isolation
Infection prevention
personnel and patient gowns gloves shoe covers
isolation caps etc.Applied in wound cleaning Oral and nasal care medical-
Healthcare &
and disinfection aesthetic
personal care
daily healthcare personal care nursing aids etc.Applied in health Injection and puncture
Other products management to meet products test kits
medical needs etc.The main product categories and illustrations of some products in the Company’s consumer segment are shown below:
Product Categories Specific Products Illustrations of Some Products
Dry and wet cotton tissues Cotton tissues wet wipes etc.Feminine hygiene
Sanitary napkins overnight pads etc.products
Facial masks cotton pads diapers
Other non-woven products
disposable underwear etc.
24Section III Management Discussion and Analysis Product Categories Specific Products Illustrations of Some Products
Baby and children’s sleepwear outerwear
Baby and child apparel
underwear bath towels handkerchiefs
and products
swaddles etc.Adult sleepwear outerwear underwear
Adult apparel
socks etc.Other woven products Bedding bath products etc.(III) Main business model
Over the 35 years of continuous exploration and development Winner Group’s business model has undergone significant
transformation and upgrading. Our business scope has expanded from medical consumables to consumer goods; our business
model has shifted from OEM to proprietary brand building from B2B to B2C from a sole focus on overseas markets to a
balanced approach between domestic and international markets; and our listing status has transitioned from voluntary de-
listing on the US Nasdaq to listing on China’s A-share market. We have evolved from “Made in China” to “Created inChina” from product export to brand empowerment and ultimately to thought leadership.Currently Winner Group has upgraded its digitalization from back-office support to a strategic infrastructure spanning the
entire value chain with a “small front platform + big middle platform” system established to balance resource concentration
and value creation. In R&D we focus on independent development of core basic materials and continuous iteration and
upgrading of key product categories. Our medical sector actively pursues global patent and product registration strategies
while our consumer goods business leads the development of several national standards and conducts carbon footprint
verification for various products. Simultaneously we actively promote smart manufacturing and green manufacturing
technologies to enhance production efficiency and energy management. In procurement we utilize diverse strategies
including strategic sourcing and centralized purchasing combined with mechanisms such as supplier qualification tiered
classification management and performance evaluation to build a sustainable supply chain ecosystem. We leverage digital
systems like SRM and PLM to achieve transparent full-process control and strengthen cost and risk management. In
production aligned with the Company’s strategic objectives we use Sales & Operations Planning (S&OP) to guide the
development of medium – and long-term strategic plans and short-term production and procurement plans. This process
involves all relevant upstream and downstream departments balancing inventory and lead times based on dynamic customer
demand to ensure flexible production and efficient responsiveness. In sales Winner Medical has established a professional
sales network within the medical industry covering a vast number of medical institutions and retail pharmacies and
exporting medical consumables to numerous countries and regions worldwide. Purcotton employs an omni-channel sales
25strategy in the consumer goods market covering major e-commerce and social media platforms online while operating brand
stores in key cities and entering various supermarkets convenience stores and other retail outlets offline. This online-offline
integration enhances consumer experience and strengthens brand influence.
26Section III Management Discussion and Analysis (IV) Key performance drivers
1. Alignment with industry trends: medical and consumer sectors in rapid development
In recent years improvements in global healthcare standards and increasing demand for daily healthcare have driven a
steady growth in the medical industry. Globally the aging population and rising healthcare needs are expanding the medical
device market providing ample room for industry development. Domestically increasing government support for the
medical device industry and accelerated import substitution are creating a favorable environment for medical consumables.Furthermore the implementation of policies such as centralized procurement volume-based procurement SPD and DRG is
continuously optimizing the medical consumables industry towards stricter quality standards transparent competition and
higher requirements for comprehensive capabilities in R&D service and distribution. These industry changes benefit large
integrated companies and are expected to increase industry concentration.In the consumer goods industry steady macroeconomic recovery and stable income growth are contributing to a positive
trend of recovery and growth. The consumer market is diversifying and becoming more personalized with notable trends
including quality consumption environmentally sustainable consumption Guochao economy and brand trust. Consumers’
pursuit of a better life increases their willingness to pay premium prices for high-quality products and services creating
significant market opportunities for companies focused on quality enhancement and emotional value. The growing consumer
preference for green and environmentally friendly products is driving companies to increase investment and innovation in
sustainable development. The increasing popularity of Guochao economy favors products with cultural significance and
national characteristics. Brand trust is becoming a competitive barrier with consumers increasingly choosing brands that
consistently deliver reliable quality and excellent service. Additionally niche segments such as health focused consumption
self-care consumption and aesthetically driven consumption are expanding rapidly. The current consumer market offers
substantial growth potential and opportunities for companies that can effectively identify and adapt to trends.
2. Differentiated competitive advantages accelerating business growth
Driven by the brand vision of “Caring Health Cherishing Life and Protecting the Environment for A Better World” Winner
Group is pursuing dual-track advancement in medical and consumer goods sectors; driving collaborative expansion across
domestic and global markets; enabling convergent growth of online and offline channels; upholding altruism and long-termism. and continues to strive towards Centennial Visionary Winner guided by the development strategy of “ProductLeadership Operational Excellence Brand Advancement and Digital Empowerment”.Winner Group began with its medical consumables business cultivating the industry for 35 years. It is one of the firstdomestic companies to establish a fully integrated industrial chain encompassing “raw material procurement – core materialR&D – product manufacturing – terminal sales”. Winner Medical maintains stringent quality standards throughout its history
and established an international-level quality management system at the initial stage of its engagement in the industry. Its
products have received authoritative international certifications including the EU CE marking US FDA clearance and
Japanese Ministry of Health Labour and Welfare approval establishing global credibility for the brand. Through strategic
acquisitions of leading companies in niche segments such as Longterm Medical Winner Medical (Hunan) and Winner
Guilin Winner Medical rapidly entered the injection and puncture consumables and latex gloves markets laying the
foundation for a one-stop medical consumables solution. Furthermore the Company continuously invests in R&D optimizes
its product portfolio and upgrades its advanced wound dressings operating room consumables and healthcare and personal
care products increasing the proportion of high-value-added products. Winner Medical pursues a three-pronged distribution
strategy: “overseas business + domestic professional medical market + daily consumer medical market”. In particular the
Company’s rapid provision of high-quality products in recent years significantly enhanced brand awareness and reputation
leading to the rapid development of its distribution channels. While strengthening its core business Winner Medical also
27accelerates its global expansion through mergers and acquisitions. The acquisition of a controlling interest in the US-
based medical company GRI strengthens its overseas production capacity sales channels and localized operations. In thefuture Winner Medical will continue to advance towards its strategic goal of becoming a “one-stop solution for medicalconsumables”.Purcotton the Winner Group’s consumer goods brand was established in 2009 with the vision of “Pure Cotton Changes theWorld”. Adhering to the principle of “We focus on 100% cotton and unlock its full potential to develop the high standard withthe best quality of cotton products” Purcotton continuously promotes the benefits of cotton and has built a unique business
model focused on “pure cotton all categories all people”. In terms of products Purcotton insists on using high-quality
cotton from around the world applies rigorous standards born of its medical heritage actively implements a popular product
strategy continuously leverages technology and innovation to meet consumer needs and has developed popular product
categories such as cotton tissues sanitary napkins newborn products and intimate apparel. Many of these categories hold
leading market positions driving overall sales growth. In terms of distribution Purcotton employs an omnichannel strategy
covering major e-commerce platforms social commerce platforms and brand supermarkets. It also operates its own brand
stores offline serving as platforms for brand promotion product experience and customer service and establishes a presence
in physical supermarkets and convenience stores. This online-offline synergy drives overall quality and growth. In brand
building Purcotton leverages delivery of cotton value celebrity endorsements original IP and cotton field runway shows to
expand brand influence. With its core competitive edges of “Medical Heritage; Cotton-Centric Philosophy; Quality DNA”
Purcotton has cultivated a brand image of “Comfort Commitment; Health Assurance; Eco-Consciousness” and has become a
nationally trusted brand.II. Overview of the Company’s Industry during the Reporting Period
1. Industry Classification
According to the Medical Device Classification Rules (2015) (Order No. 15 of the China Food and Drug Administration) and
the Medical Device Classification Catalog (Announcement No. 104 of 2017 of the China Food and Drug Administration)
the medical consumables manufactured and sold by the Company belong to the injection care and protective equipment
category of medical devices. According to the National Economic Industry Classification (GB/T4754-2017) and the
Guidelines for the Industry Classification of Listed Companies (as revised in 2012) the Company’s industry is classified
under Specialized Equipment Manufacturing (C35) within Manufacturing (C).The Company’s consumer segment includes non-woven consumer products such as pure cotton tissues pure cotton cotton-
top sanitary napkins and pure cotton wet wipes as well as textile consumer products such as baby products baby apparel
and adult apparel. According to the National Economic Industry Classification (GB/T4754-2017) and the Guidelines for the
Industry Classification of Listed Companies (as revised in 2012) these consumer goods primarily fall under Textile Industry
(C17) and Textile Garment and Apparel Industry (C18) within Manufacturing (C).
2. Industry Developments
The Company operates as a holistic health enterprise synergistically converging medical innovation and consumer wellness
ecosystems. Our operations are firmly anchored in the life and health field while also catering to the people’s desire for a
better life. The industries we operate in address essential needs and offer significant growth potential.
(1) Medical consumables
Medical consumables are essential for the daily medical and nursing work of healthcare institutions. With the increasing
28Section III Management Discussion and Analysis trends of aging and chronic diseases rising public awareness of healthcare and increasing per capita healthcare expenditure
the market demand for medical consumables is steadily expanding. In terms of market size the global market for traditional
medical consumables is vast and the Chinese market maintains rapid growth providing opportunities for high-quality
domestic medical consumables companies. In terms of the competitive landscape while the traditional medical consumables
sector is highly competitive the supply of high-quality products remains limited. Benefiting from demand growth and
national policy support domestic companies with stable quality fast supply capabilities and R&D and innovation
capabilities are emerging. Furthermore niche segments such as disposable customized surgical packs and advanced wound
dressings have promising growth prospects. These segments are currently in their nascent stages in China and capabilities
in clinical research digital healthcare and product innovation are expected to drive brand development. Overall the medical
consumables industry is expected to maintain sustainable healthy growth in the future.* Global and Domestic Developments of Traditional Medical Consumables Industry
Medical consumables refer to medical and sanitary materials used in clinical diagnosis nursing testing and repair
procedures. These products are diverse widely used and essential for daily medical and nursing work in healthcare
institutions. Medical consumables are categorized into high-value and traditional consumables based on their clinical value.Compared with high-value consumables traditional consumables primarily comprise seven categories: injection and puncture
devices medical sanitary materials and dressings medical polymer materials medical disinfectants anesthesia consumables
operating room consumables and medical technology consumables. Currently Winner Medical’s business covers six of these
seven categories excluding medical technology consumables.Traditional medical consumables are essential for medical activities and the industry demand is characterized by high
frequency and necessity. According to YHResearch the global market for traditional medical consumables is projected to
reach US$129.8 billion by 2030 with a compound annual growth rate of approximately 9.1% from 2024 to 2030. This vast
global market exhibits a diversified competitive landscape. International companies from developed countries dominate the
market through their technological distribution and scale advantages while shifting the production of low-value-added
products to emerging countries with cost and manufacturing advantages.The current domestic traditional medical consumables market is highly fragmented characterized by regional competition
and product homogeneity leading to significant industry polarization. On the one hand traditional products are impacted
by volume-based procurement and bidding mechanisms intensifying price competition. The “price for volume” strategy
exacerbates competition squeezing the profit margins of small and medium-sized enterprises lacking technical barriers.Leading companies however leverage their scale and cost control advantages to gradually build competitive barriers and
steadily increase industry concentration. On the other hand companies with strong R&D capabilities are accelerating their
transformation towards mid-to-high-end segments. For example through functional iteration of medical dressings basic
hemostatic products are being upgraded to wound repair solutions significantly increasing product value. This competition
driven by technological innovation not only helps companies escape the price war dilemma but also promotes the formation
of a virtuous cycle of “product quality – clinical value – brand premium” within the industry. Under the dual influence ofpolicy guidance and market forces China’s medical consumables industry is rapidly transitioning from a “manufacturingadvantage” to an “innovation advantage”.* Developments of Advanced Wound Dressing Product Market
Advanced wound dressings with their clinical advantages in controlling wound exudate maintaining a moist healing
environment preventing adhesions and inhibiting bacterial growth are gradually replacing traditional dressings and
becoming the standard solution for managing chronic and complex wounds. Representative products include hydrogels
hydrocolloids and foam dressings. Continuous material innovation and functional integration are driving industry upgrades.
29Currently the Chinese advanced wound dressing market is in a period of both demand upgrade and import substitution
offering broad prospects for future growth. The increasing elderly population rising consumer spending and growing
healthcare awareness in China coupled with the popularization of home care systems and the adoption of advanced
international medical and nursing knowledge are expected to drive the gradual replacement of traditional dressings with
higher-performance advanced wound dressings. On the policy front the establishment of green channels for innovative
medical device approvals and reforms in the medical insurance payment system provide dual support. With industry trends
focused on cost control and quality upgrades the growth of advanced wound dressings in the domestic market is expected to
accelerate.With the increasing aging population rising healthcare awareness and a growing number of surgical procedures in
developed countries the demand for multifunctional innovative and high value-added medical dressings is growing rapidly
presenting excellent opportunities for the advanced medical dressings industry. According to QYResearch the global
market for advanced wound dressings reached US$6.56 billion in 2024 and is projected to reach US$7.779 billion by 2031
demonstrating a steady growth in market demand.* Developments of Surgical Site Infection Control Product Market
Surgical site infection control products are a vital component of the traditional medical consumables market primarily used
in surgical settings as indispensable medical consumables for invasive surgical procedures. According to statistics from the
National Health Commission the compound annual growth rate of inpatient surgical procedures in China was 7.9% from
2017 to 2022. This sustained growth in surgical volume lays the foundation for the steady expansion of the surgical site
infection control product market.Surgical site infection control products can be classified into reusable and disposable types. Disposable products with their
key advantage of significantly reducing the risk of cross infection are gradually replacing traditional reusable products.According to the research data of Coherent using disposable surgical site infection control products can reduce the incidence
of intraoperative cross-infection by 60%. Furthermore disposable products demonstrate significant advantages in clinical
practice such as improved preoperative preparation efficiency and intraoperative convenience further driving their market
penetration.Regarding product iteration customized surgical packs are systematically replacing the traditional single-product supply
model. Compared to individual products customized surgical packs can be tailored to specific surgical types and surgeon
preferences better improving surgical efficiency and safety while avoiding instrument and material waste thus lowering
hospital costs and environmental impacts. The customized surgical pack market has grown rapidly in recent years. According
to CMI the global customized surgical pack market is projected to reach US$21.347 billion by 2026 with a CAGR of
10.2%. In China this market is expected to reach US$1.504 billion with a CAGR of 12.2% promising a substantial market
opportunity.
(2)Developments of Consumer Goods Segment
Driven by policies to expand domestic demand and consumption upgrading China’s consumer goods industry is
experiencing a recovery characterized by “steady growth quality improvement and structural optimization”. In terms of
national policies the enhanced and broadened trade-in programs for consumer goods and the newly issued Special Action
Plan to Boost Consumption are significantly stimulating domestic demand and consumption. In terms of consumer demand
people’s aspirations for a better life continue to grow with consumer preferences shifting from “having it” to “having itgood”. Rational consumption and a focus on quality have become mainstream trends. With increasing health awareness
a growing focus on self-care and the emergence of the silver economy the demand for products and services centered
on quality health and environmental protection is continuously increasing. Simultaneously growing national cultural
30Section III Management Discussion and Analysis confidence is driving the popularity of domestic brands and fueling the growth of the “Guochao” economy.Aligned with contemporary consumer trends Purcotton leverages its three competitive edges – “Medical Heritage; Cotton-Centric Philosophy; Quality DNA” – to pursue its vision of “Pure Cotton Changes the World”. Since its inception Purcotton
has focused on “pure cotton” adhering to high quality craftsmanship and standards (exceeding industry standards)
providing consumers with comfortable healthy and environmentally friendly products. Purcotton has built a diversified
product matrix encompassing both non-woven (cotton tissues sanitary napkins disposable travel products etc.) and woven
(baby apparel and products adult apparel bedding etc.) categories.* Developments of Cotton Tissues Industry
With increasing health awareness and consumer spending power pure cotton tissues due to their eco-friendliness and
hypoallergenic properties are rapidly replacing traditional fabrics and becoming a strong alternative to traditional paper
tissues and towels resulting in a steady growth in market penetration. According to the 2019-China Cotton Tissues
Industry Status and Development Trend Research Report by Zhongyan Puhua Industry Research Institute cotton tissues with
their superior physical properties high production efficiency and environmental advantages have become deeply integrated
into baby care maternity care sensitive skin management and beauty and skincare routines. The core consumer group’s
willingness to pay a premium continues to strengthen driving up both product awareness and demand.According to Euromonitor the global retail market size for cotton tissues reached approximately 78 billion pieces in 2024
and is experiencing a rapid growth. As a pioneer in this category Purcotton continues to lead industry development through
technological iteration and standard setting. In 2021 Purcotton served as the primary drafter for the national standard for
cotton tissues. Driven by both the “dual carbon” policy and consumption upgrades this niche segment is transitioning
from rapid growth to a new stage of standardized development with the potential for continuous optimization of industry
concentration and profitability.* Developments of Feminine Hygiene Product Industry
China’s feminine hygiene product industry has entered a stage of high-quality development. Trends such as product structure
upgrades and increased health awareness are driving steady market growth. According to Euromonitor the market size of
China’s feminine hygiene products reached approximately RMB105 billion in 2024 and is projected to reach RMB122 billion
by 2029 with a CAGR of approximately 3.0% from 2024 to 2029.With the continuous improvement of Chinese women’s health awareness and purchasing power consumer demand for
product quality continues to upgrade. Functionality material safety and user experience have become core concerns driving
the increasing consumption of mid-to-high-end products. According to Euromonitor the average price per piece increased
from RMB0.74 to RMB0.93 between 2019 and 2024 demonstrating the accelerating trend of quality-focused consumption.Currently there is a growing demand for “safe” sanitary napkins among female consumers leading to a preference for
medical-grade and sterilized products. This premiumization is becoming a new engine for value growth in the feminine
hygiene product industry. On the supply side leading companies are building supply chain and technological moats through
vertical integration from raw materials to manufacturing and the application of innovative bioengineering technologies. This
premiumization trend will continue to increase market concentration and drive the industry towards a development paradigm
centered on technology and quality.* Developments of Baby & Child and Adult Apparel Industry
Driven by the changing consumption patterns of modern families the children’s apparel market is evolving towards
quality and refinement. With the deepening of the “refined parenting” concept parents’ demand focus is shifting from
basic functionality to comprehensive considerations of quality and safety. Strict standards such as Class A safety standards
31eco-friendly fabric certifications and durable craftsmanship are increasingly becoming key purchasing decision factors.
According to Euromonitor the Chinese children’s apparel market grew from RMB239.1 billion in 2019 to RMB260.7 billion
in 2024 and is projected to reach RMB296.4 billion by 2029. The children’s apparel industry still holds significant growth
potential particularly for brands with guaranteed quality and strong reputations.According to Euromonitor China’s underwear market reached RMB254.3 billion in 2024 a year-on-year increase of 2.1%.Driven by rising consumer awareness and advancements in production technology the Chinese underwear market is expected
to expand further. Influenced by increased health consciousness and changing lifestyles consumer evaluation criteria for
underwear have shifted from a singular focus on price to a comprehensive consideration of safety comfort and functionality.On the one hand basic safety attributes have become a baseline requirement with standards such as zero formaldehyde and
no fluorescent agents transitioning from recommendations to mandatory requirements. On the other hand the demand for
comfort is driving material innovation including increased use of natural organic cotton adoption of plant-based dyeing
processes and the implementation of details like seamless labels and boneless stitching. This consensus on quality baselines
and technological innovation is creating sustainable value growth opportunities in the underwear market.III. Core Competitiveness Analysis
1. Dual-Engine growth: medical and consumer synergies for enhanced risk resilience
Winner Group operates as a holistic health enterprise synergistically converging medical innovation and consumer wellness
ecosystems through its Winner Medical and Purcotton brands. The Company’s business scope has expanded from solely
medical consumables manufacturing to footprint in diverse fields including wound care infection prevention personal
care home care maternity and baby care and home textiles and apparel. Winner Medical’s emphasis on product quality andinnovative R&D forms the foundation of the Group’s development. As a proprietary technology the “pure cotton spunlacenon-woven fabric” process has seen its application cross over from the medical sector to consumer goods pioneering new
categories such as cotton tissues and cotton inner layer masks. The Group’s two major business segments centrally procure
raw materials like cotton which enhances bargaining power and stabilizes costs. Furthermore the sharing of production
warehousing and logistics across the entire industry chain effectively reduces manufacturing and management costs.Simultaneously the medical heritage in quality control provides a solid foundation of quality for Purcotton’s safety and
trust enhancing Purcotton’s professional credibility brand reputation and customer loyalty. The synergistic and balanced
development of these two business segments creates complementary growth engines strengthens the Company’s resilience
against economic cycles effectively balances short-term industry fluctuations with long-term performance growth and
establishes a solid foundation for high-quality development.
2. Long-termism: the cultural core for development
Winner Group embraces the long-termism and altruism philosophy prioritizing brand ethics and adhering to compliantoperations and sustainable development. We uphold the core business principles of “Quality over the Profit Brand overthe Speed Social Value over the Corporate Value” to ensure high-quality products and services. Guided by the values of
“Relentless Endeavor; Pioneering Innovation; Self-Critique; Long-Termism” we remain committed to our entrepreneurialspirit and brand-building mission. Throughout our development we adhere to the brand ethics of “Integrity in OperationRespect for Consumers Fair Competition Social Responsibility (ESG) Intellectual Property Rights ContinuousImprovement” integrating compliant operations and social responsibility into our corporate development earning
widespread recognition and fueling brand building and long-term growth.
32Section III Management Discussion and Analysis 3. Brand advancement towards Centennial Visionary Winner
With a Centennial Visionary Winner Winner Group is committed to brand advancement. In the medical field Winner
Medical has established a sound reputation for professionalism innovation and high quality over 30 years becoming an
industry benchmark. In the consumer goods field Purcotton centering on cotton and leveraging its core competitive edges
of “Medical Heritage; Cotton-Centric Philosophy; Quality DNA” has cultivated a brand image of “Comfort Commitment;Health Assurance; Eco-Consciousness” creating differentiated brand advantages. Through continuous brand building and
marketing both business segments enhance brand awareness and reputation establishing themselves as preferred choices
for consumers. This strong brand recognition supports product sales and market expansion with the synergy between
professional medical products and quality consumer goods forming a unique brand moat.
4. Product leadership: innovation-driven quality development
Winner Group upholds a “Product Leadership” strategy driving development through innovation and consistently delivering
high-quality products. In the medical field we focus on independent R&D of core basic materials and continuous iteration
and upgrading of key product categories ensuring market-leading product performance and quality. In the consumer goods
field driven by the vision of “Pure Cotton Changes the World” we select premium cotton from around the globe as raw
materials and apply rigorous standards born of our medical heritage to create differentiated consumer products. We leverage
market insights to rapidly launch new products that meet consumer needs and lead market trends. Furthermore the Company
promotes the transformation of research outcome through industry-academia collaboration and actively explores cutting-
edge fields like life sciences. Through continuous R&D investment the Company leads and participates in the development
of numerous national standards and maintains a leading position in patent and product registration numbers solidifying its
industry leadership through “Product Leadership”.
5. Operational excellence: advanced technologies for lean management
Winner Group continuously promotes the implementation of its Group-wide “Operational Excellence” strategy. In smart
manufacturing we actively advance the automation and intelligent upgrading of our production processes achieving
automated equipment operation throughout the entire process from raw materials to finished products. We also actively
leverage AI tools to empower operations and continue to strengthen our efforts in expansion of deep coverage across all
business segments solidification of data foundation process streamlining and efficiency leap-up and deep AI empowerment
in key scenarios to establish a robust bedrock for value upgrades across every business sector. In terms of refined channel
operations we prioritize both online and offline channels. Offline stores enhance the consumer experience through optimized
layouts and improved services while online channels leverage precise management and targeted marketing to improve
conversion and repurchase rates. Simultaneously we utilize membership systems and community operations to deepen
customer relationships achieving synergistic development and efficient operation across all channels.
6. Organization and talent: building an international professional team
Winner Group is dedicated to establishing a systematic organization and talent development program encompassing talentacquisition training assessment and incentives. The Company actively promotes the Four-High Talent Philosophy – “HighPersonal Quality; High Academic Qualifications; High Performance; High Reward” – with the goal of developing Winner
career partners and continuously providing a nurturing environment for talent growth. In terms of organization the Companyis building professional teams that support integrated business operations focusing on “Organizational Capability StrategicGoal Enablement” and continuously improving organizational efficiency through various methods. In terms of incentives
we actively implement performance-based sharing systems to foster a results-oriented corporate culture. We also utilize tools
33such as equity incentives and employee stock ownership plans to enhance talent cohesion and centripetal force providing
a solid talent foundation for the Company’s sustainable development and building a stable and internationally oriented
professional team.IV. Analysis of Main Business
1. Overview
Winner Group operates as a holistic health enterprise synergistically converging medical innovation and consumer wellness
ecosystems. Its unique “medical + consumer” dual-engine business model generates mutually reinforcing synergies. The
Company’s emphasis on product quality and innovative R&D forms the foundation of the Group’s development. As a
proprietary technology the “pure cotton spunlace non-woven fabric” process has seen its application cross over from
the medical sector to consumer goods pioneering new categories such as cotton tissues and cotton inner layer masks.In procurement with cotton as the core raw material the combined demand from our two major business segments—
exceeding that of any single sector—facilitates centralized purchasing which enhances bargaining power and stabilizes cost
fluctuations. Regarding the supply chain our integrated industry chain system enables shared production warehousing and
logistics effectively reducing manufacturing and administrative costs. In brands the medical heritage in quality control
provides a solid foundation of quality for Purcotton’s safety and trust enhancing Purcotton’s professional credibility
brand reputation and customer loyalty. The synergistic and balanced development of these two business segments creates
complementary growth engines. Characterized by essential demand and high-frequency usage our products effectively
balances short-term industry fluctuations with long-term performance growth strengthens the Company’s resilience against
economic cycles and establishes a solid foundation for high-quality development.(I) Financial performance analysis
In the Company maintained its strategic focus sought breakthroughs amidst volatility and achieved steadydevelopment as guided by the three core business principles of “Quality over the Profit Brand over the Speed Social Valueover the Corporate Value”. Throughout the year the Company consistently adhered to the development strategy of “ProductLeadership Operational Excellence Brand Advancement and Digital Empowerment” and achieved a cumulative operating
revenue of RMB10.95 billion representing a year-on-year growth of 22.0%; the net profit attributable to shareholders of the
listed company for the whole year was RMB770 million or RMB710 million after deducting the non-recurring gains and
losses representing a year-on-year increase of 10.4% and 19.4% respectively.
(1) Medical consumables business: full-scale breakthroughs in high-end positioning brand building and global expansion
Driven by factors such as stricter global medical regulations aging populations and the increasing prevalence of chronic
diseases the medical device industry has entered a period of rapid growth in recent years. Within this landscape the medical
consumables sector characterized by high usage frequency and relatively low industry concentration is experiencing
particularly robust expansion.Winner Medical the Company’s medical consumables brand has been deeply involved in the industry for 35 years steadily
navigating multiple economic and industrial cycles. Over the past few years the Company has made a series of in-depth
adjustments based on market insights including business model upgrades product structure optimization organizational
restructuring and key talent development and recruitment and the medical consumables business has reached new heights
in terms of product category composition channel capabilities and brand recognition and reputation. In with high-end
positioning brand building and global expansion the sector achieved an operating revenue of RMB5.11 billion representing
a year-on-year increase of 31.0% and demonstrating its long-term resilience.
34Section III Management Discussion and Analysis * Products: Sustained high growth in high-value and high-margin products
Winner Medical is committed to developing into a brand that provides a “one-stop solution for medical consumables”
offering a comprehensive product portfolio encompassing advanced wound dressings operating room consumables personal
health and hygiene products infection prevention products and traditional wound care and bandaging products. The
Company prioritizes R&D investment and possesses a significant competitive advantage in the number of medical product
registration certificates together creating competitive barriers for Winner Medical. As of the end of the Reporting Period the
medical sector held 1115 patents and 862 medical product registration certificates (including 27 Class III medical product
registration certificates and 478 overseas product registration certificates). During the Reporting Period Winner Medical’s
continuous commitment to R&D innovation and the optimization of its product structure led to a significant increase in the
proportion of high-value and high-margin products laying a solid foundation for future high-quality development. Regarding
specific categories advanced wound dressings sales were primarily driven by overseas ODM and self-owned brands with
cumulative revenue reaching RMB 940 million representing a year-on-year increase of 20.0% and accounting for 18% of
the medical segment. Revenue from self-owned brands reached RMB327 million with Amazon US as the principal channel.While the domestic market remains in its infancy and is currently dominated by international brands in hospital channels
companies like Winner Medical—with strong brand recognition robust independent R&D and extensive channel reach—are
well-positioned to capitalize on significant opportunities for domestic substitution and consumer market expansion. Operating
room consumables particularly customized surgical packs enhance surgical efficiency and safety while effectively reducing
hospital costs and environmental burden. This sector is experiencing rapid growth in the domestic market. In overseas
operating room consumables markets Winner Medical leverages its intelligent manufacturing and supply chain advantages;
domestically it focuses on the “green operating room” solution as its core. By anchoring on clinical value to accelerate the
penetration of disposable surgical packs this category achieved cumulative revenue of RMB1.52 billion representing a
year-on-year increase of 83.4%. Additionally the Company cultivates the personal health and hygiene products comprising
household wound care cleaning & disinfection and medical beauty care by applying rigorous standards born of its medical
heritage to consumer-facing products. These products have gained significant consumer favor and consequently evolved
into a new growth engine for the Group. This segment recorded RMB470 million in revenue during the Reporting Period
representing a year-on-year increase of 17.1%.* Channels: Overseas markets account for over half of revenue; proportion of self-owned brands rises
In the Company continued to cultivate and expand its marketing channels through various approaches. Driven by the
internationalization of the supply chain the sales contribution from overseas markets and self-owned brands continued to
grow.Despite the challenges posed by the complex international landscape during the Reporting Period overseas sales channels
generated RMB2.85 billion in operating revenue representing a year-on-year increase of 47.9% (notably the combined
growth of self-owned brand business in Southeast Asia and the Middle East exceeded 71.3%). The share of overseas sales
within the medical segment rose to 56% underscoring the Company’s strategic resolve to transition from “Made in China”
to “Global Service”. Domestic hospital channel expansion focused on penetrating key and strategic hospitals and recorded
an operating revenue of RMB830 million during the Reporting Period representing a year-on-year increase of 14.8% and
accounting for 16% of the total revenue. Notably the B2C self-owned brand business (encompassing domestic pharmacies as
well as domestic and international e-commerce channels) recorded a cumulative revenue of RMB920 million representing
a year-on-year growth of 29.0% and accounting for 18% of total revenue. Specifically the key cross-border sub-brands
achieved a cumulative year-on-year growth of over 35% within the Amazon e-commerce category for the year delivering
robust growth performance. The popular product strategy for domestic e-commerce platforms became more focused and
refined to capitalize on new trends in medical consumer goods. As of the end of the Reporting Period the total number of
35fans exceeded 17.80 million.
(2) Consumer products business: Rapid growth in cotton tissues breakout in sanitary napkins and supermarket channel as a
new growth engine
According to data released by the National Bureau of Statistics total retail sales of consumer goods reached RMB50.1 trillion
in a year-on-year increase of 3.7%. Underlying this overall growth in the consumer market is a coexistence of self-
care and rationality with trends towards health self-care and a relaxed lifestyle profoundly influencing competition within
specific market segments. Within this environment the Company’s focus on premium domestic products aligns with the
burgeoning trend of Guochao economy and emotional value demonstrating continuous upward momentum.Purcotton the Company’s consumer product brand leverages the 35-year medical heritage of its parent company. Starting
with its core technology of pure cotton spunlace non-woven fabric Purcotton has continuously enriched its product
categories covering a wide range of family consumption scenarios including maternity and baby feminine care and home
textiles. Its three core competitive edges – “Medical Heritage; Cotton-Centric Philosophy; Quality DNA” – have attracted
a loyal customer base seeking “Reassurance Wellbeing Sustainability”. In Purcotton implemented a popular product
strategy refined channel operations and continuously strengthened brand building. During the Reporting Period the brand
achieved an operating revenue of RMB5.75 billion a year-on-year increase of 15.2% demonstrating consumer favor for
differentiated products.* Products: Cotton tissues maintained their status as No. 1 single category while sanitary napkins surged to the No. 2 single
category
Centered on “one cotton flower one fiber” Purcotton has concentrated its R&D on fundamental material research
for technology of pure cotton spunlace non-woven fabric and on the Cotton Tech technologies and has established a
differentiated and competitive product matrix with a total of 601 patents held in the year. It continues to promote green
product certification product carbon footprint screening biodegradable product R&D and the breeding and application
of organic cotton. Over 32 products have earned authoritative third-party green and low-carbon certifications leading the
industry in green development. Empowered by effective R&D technologies Purcotton successfully launched 4 new products
with sales exceeding RMB100 million 15 products over RMB10 million and 366 products over RMB1 million in .In terms of category as Purcotton’s leading hero product the core popular dry and wet cotton tissues maintained steady
sales growth with a cumulative operating revenue of RMB1.76 billion during the Reporting Period representing a year-on-
year increase of 13.0%. Multiple cotton tissue products consistently held leading sales positions on major online platforms.In terms of sanitary napkin “Nice Princess” with its “Five Supers” pure cotton sensory technology (super absorption
super breathability super softness super eco-friendliness and super convenience) and Winner Medical’s safe and hygienic
production environment achieved a significant rise in industry sales ranking this year leaping to become our No. 2 single
category. Sanitary napkins achieved a cumulative operating revenue of RMB1.02 billion representing a year-on-year increase
of 45.5%. Given that the Chinese sanitary napkin market is valued at approximately RMB100 billion the “Nice Princess”
brand is poised to become another super hero product driving Purcotton’s sustainable development. In terms of adult apparel
the technologies from the “Cotton Tech” platform (Cotton Soft Cotton Breathable Cotton Warm Cotton Cool Cotton Anti-
UV Cotton Anti-Bacterial have been fully implemented and innovative products have gained strong market recognition.The Company strategically focused on close-fitting categories such as underwear and loungewear and achieved a cumulative
operating revenue of RMB1.13 billion this year a year-on-year increase of 17.5%.* Channels: well-balanced layout across online and offline channels with supermarket channels emerging as a new growth
engine
Purcotton employs a diversified online and offline channel strategy. Online channels include traditional third-party
36Section III Management Discussion and Analysis e-commerce platforms like Tmall JD.com and Vipshop as well as social commerce platforms like Douyin and
Xiaohongshu and its own website and mini-programs. The Company operates over 500 physical brand stores nationwide
while simultaneously establishing a presence in major supermarkets and premium convenience stores. By integrating offline
experience with online repurchases Purcotton leverages multi-channel synergy and cross-platform advantages. Revenue
contribution from online and offline channels stood at approximately 60% and 40% reflecting well-balanced omni-channel
development. As of the end of the Reporting Period Purcotton’s total membership reached nearly 70 million a 15.4%
increase compared to the previous year-end indicating continued brand penetration. Female members accounted for 75%.The core consumer profile consists of emerging white-collar sophisticated mothers and quality-conscious middle-to-high-
income individuals. This high-quality consumer demographic provides robust support for the brand’s long-term sustainable
development.In Purcotton continued to cultivate its online channels focusing on new product and popular product matrix to build
competitive advantages for strategic products. The brand also strengthened cross-category penetration and implemented
refined operations through brand activities content communities and membership systems to improve new customer
acquisition and repeat purchase rates. During the Reporting Period online channels achieved an operating revenue of
RMB3.64 billion representing a year-on-year increase of 18.7% and a share of 63%. Notably social commerce platforms
experienced breakthrough growth (e.g. Douyin saw a year-on-year increase of over 60% representing an online share of
13%). As important touchpoints for brand promotion product experience and customer service Purcotton’s offline stores
achieved steady development by upgrading their image creating scenario-based shopping environments and enhancing
both store efficiency and profitability per square meter. As of the end of the Company had 505 stores (including 386
directly-operated stores and 119 franchised stores) with 49 new stores opened during the year (26 directly-operated and
23 franchised). During the Reporting Period offline stores achieved an operating revenue of RMB1.51 billion a year-
on-year increase of 1.2% and a share of 26%. The supermarket channel also saw accelerated development contributing
RMB460 million in revenue in a year-on-year increase of 42.0% and a share of 8%. By focusing on Sam’s Club Pang
Dong Lai and Watsons Purcotton aims to increase its penetration rate among target demographics. Purcotton’s offerings
primarily consist of disposable hygiene products and household goods. Given that both the breadth and depth of high-quality
supermarket channels remain under-explored there is immense potential for future development.
(3) Profitability and asset analysis
During the Reporting Period the profitability of the Company’s two main business segments showed a stable upward trend.In terms of medical consumables business the Company has taken proactive measures to restore the profitability of
its business over the past two years. During the Reporting Period the medical consumables business underwent a
comprehensive upgrade in quality and efficiency across several areas including product structure optimization iteration
of new technologies and products enhancement of organizational and operational efficiency and channel development.Excluding the impact of goodwill impairment the medical segment’s operating profit margin stood at 9.4% remaining
largely stable compared to the same period last year.In terms of consumer goods business benefiting from the decline in cotton prices and product structure optimization
Purcotton achieved a gross profit margin of 57.3% during the Reporting Period representing an increase of 1.4 percentage
points compared to the same period last year. Purcotton continued to implement initiatives such as new product iterations
product structure optimization discount control cost reduction and efficiency improvement and refined operational
management. During the Reporting Period the operating profit margin of the consumer goods business stood at 13.2%
representing an increase of 1.1 percentage points compared to the same period last year.The Company’s two major segments maintained stable revenue and profit. This stability is attributable to the medical
segment’s focus on product innovation as its cornerstone which has continuously increased the sales proportion of high-
37value and high-margin products while actively expanding its global footprint and the share of proprietary brand sales.
Purcotton’s expansion does not come at the expense of profitability. The brand focuses on the innovation and launch cadence
of core blockbuster products aggressively explores new channels and communicates with consumers through high-quality
content consistently improving its return on investment.In terms of finance as of the end of the Company’s total assets stood at RMB18.4 billion remaining overall stable.The asset-liability ratio was 33.2% a decrease of 2.2 percentage points from the previous year-end maintaining a prudent
level. Cash and wealth management products reached RMB 6.41 billion accounting for 35% of total assets with overall asset
quality remaining robust. The ratio of net operating cash flow to net profit was 2.0 (consistently exceeding 1.0) reflecting
a significant leap in operational efficiency and high-quality growth in operating profits. In terms of shareholder returns
the Company actively implements its “Dual Improvement of Quality and Return” action plan rewarding investor support
through consistent cash dividends. The annual profit distribution plan (including the interim dividend) for consists of a
cumulative cash dividend of RMB440 million representing 57% of the net profit attributable to ordinary shareholders of the
listed company. Specifically the final dividend for is RMB 3.0 per 10 shares (pre-tax) totaling RMB175 million. Since
its IPO the Company has adhered to an annual cash dividend policy with a steadily increasing payout ratio. To date the
Company has distributed RMB3.05 billion in cumulative cash dividends (including the proposed amount for ) and spent
RMB690 million on share repurchases. Together these two items account for 105% of the net proceeds from the initial public
offering.
(4) Analysis of Acquisitions and Their Integration
In 2022 the Company successively acquired targets including Longterm Medical Winner Medical (Hunan) and Winner
Guilin. These acquisitions allowed the Company to expand its product lines into fields such as advanced wound dressings
injection and puncture consumables latex gloves and condoms thereby significantly enhancing and perfecting its industrial
layout. The acquisition of a controlling interest in the US-based medical company GRI in 2024 strengthens its overseas
production capacity sales channels and localized operations. GRI has fully leveraged its value in overseas business
expansion emerging as a key pivot in Winner Medical’s globalization strategy and providing a solid foundation for the
Company’s global reach. Longterm Medical continues to maintain its cost leadership and value creation achieving three
consecutive years of positive net profit growth. Collectively these acquisitions have effectively propelled the Company
toward its strategic goal of becoming a “one-stop solution for medical consumables”.Winner Medical (Hunan) acquired by the Company in 2022 experienced lower-than-expected growth during the Reporting
Period due to changes in the market environment. The Company engaged Yinxin Appraisal Co. Ltd. to conduct a prudent
appraisal of the relevant asset group including goodwill for financial reporting and impairment testing purposes. Based
on relevant accounting standards and the Company’s specific accounting policies and estimates and referencing the
conclusions of the appraisal report the management recognized a goodwill impairment of RMB 180 million from the
acquisition. In 2026 Winner Medical (Hunan) will prioritize the certification portfolio for safety-type infusion products and
the development of OEM manufacturing capabilities while accelerating the integration of domestic and international sales
teams. By leveraging the organizational empowerment of the parent company the subsidiary has successfully commenced
mass production of its newly introduced integrated infusion set assembly and packaging system. Through the progressive
implementation of in-line visual inspection to reshape its end-to-end quality control architecture and drive significant cost-
efficiency improvements. Overall the Company has implemented a range of operational measures to ensure a smooth
transition for Winner Medical (Hunan)’s performance and solidify its foundation for long-term growth.In 2026 the Company will continue to advance the integration of its acquired companies. In terms of sales channels the
Company will steadily drive domestic channel integration sales team merging distributor resource sharing and terminal
market penetration management for businesses including latex gloves infusion products and GRI domestic surgical packs.
38Section III Management Discussion and Analysis In terms of smart manufacturing the Company will actively empower the newly acquired companies to accelerate industrial
upgrading. Specifically Winner Guilin will establish industry-leading integrated continuous post-vulcanization and packaging
production lines for gloves and condoms. This will effectively eliminate production discontinuities and achieve zero manual
handling throughout the entire process. Meanwhile the Company will accelerate the automation and assembly line upgrades
at the GRI Vietnam and Jiaxing production facilities. Regarding the global presence of production resources by fully
leveraging regional geographical advantages the Company will steadily actualize capacity plans for relevant products across
countries and regions including China Vietnam the United States and the Dominican Republic. The Company will also
systematically optimize the supply chain system driving a gradual shift in the procurement of raw and auxiliary materials
from external sourcing to internal synergistic procurement. Through this series of integration and synergistic measures the
management remains fully confident in the long-term value creation of these acquired companies.(II) Operational management
1. Brand building
In Winner Medical resolutely leveraged professional expertise to build a foundation of brand trust and utilized mass
market outreach to expand brand awareness. By systematically constructing a mutually reinforcing brand ecosystem the
Company continued to drive value enhancement across the healthcare industry. In the professional medical sector anchored
by the “green operating room” comprehensive solution the Company established a professional brand framework integrating
academic leadership clinical empowerment terminal coverage and value verification. Through deep participation in 19
prestigious domestic and international academic conferences including CMEF and by independently hosting 465 in-hospital
symposiums departmental meetings and seminars Winner Medical systematically cultivated a global network of academic
influence. Terminal expansion yielded remarkable results adding over 2000 hospitals and third-party terminals. Backed by
initiatives such as health economics research the Company deeply engaged in optimizing clinical pathways driving a value
leap for its products from being merely “market accessible” to becoming the “preferred clinical choice”. This ongoing effort
further consolidated its image as a trusted brand among medical professionals worldwide. Regarding mass health and brand
communication the Company significantly elevated its brand credibility and industry influence by focusing on three core
pillars: partnerships with authoritative platforms co-creation of premium content and omnichannel user interaction. As a
leading enterprise in the supply chain Winner Medical exhibited at the China International Supply Chain Expo (CISCE)
for the third consecutive year demonstrating its leadership in integrating the entire industry chain. Throughout the year
the Company was honored with the Xipu Gold Award and featured on the “Healthy China Brand List” reflecting
authoritative industry recognition. Collaborating with mainstream media such as CCTV.com the Company launched science
popularization campaigns. By executing a series of brand activities around key milestones such as “Cotton Traceability”
and the “20th Anniversary of Pure Cotton Spunlace Non-woven Fabric” the Company generated over 1.1 billion brand
impressions over the year successfully cementing its position as a “reliable innovative and sustainable” national health
brand benchmark.Purcotton continues to deepen its emotional bond and interactive communication with consumers and strengthens its brand
philosophy of comfort commitment health assurance eco-consciousness and its brand image as warm and empowering. *
In terms of brand ambassadors under the theme “Comfortable Cotton Goodies with You” the campaign featuring Ding Yuxi
reinforced the consumer perception of “comfort”. By leveraging promotional resources from Tmall Super Brand Day and Li
Jiaqi’s dedicated brand livestream session it successfully achieved the integration of brand awareness and sales conversion.Furthermore the “Comfort Trilogy” offline meet-and-greet with Ding Yuxi was launched enabling young consumers totangibly experience the 100% comfort derived from pure cotton. Guo Jingjing’s TV commercial (TVC) themed “Peace ofMind with Purcotton at Home” vividly demonstrated the refreshing experience enabled by Cotton Tech technologies. This
was complemented by a Purcotton factory traceability tour jointly conducted with CCTV Finance. Following the rollout of
39her “more comfortable life with Purcotton at home” TVC Zhao Liying made a special appearance in the brand’s livestream
room to promote Purcotton loungewear comprehensively illustrating the essence of cotton and the brand’s story. * In
terms of consumer communication Purcotton released the TVC 100 Homes of Cotton to convey a brand impression of
peace of mind and happiness. On Children’s Day it launched “Listen to the Children” 2.0 campaign utilizing the creative
concept of “children answering adults’ questions” across diverse touchpoints to deepen its brand image of “understandingchildren better”. The “TVC Taking Comfort a Step Further” was rolled out to illustrate the comfort standards of pure cotton
underwear. This was complemented by the “Designer’s Voice” series which presented the stories behind the products
allowing users to intuitively perceive the brand’s thoughtful design dedicated to addressing user needs and resolving pain
points. Through a comprehensive suite of initiatives including communicating the value of cotton celebrity endorsements
content marketing omnichannel operations and brand experience building Purcotton has continuously accumulated
and fortified brand awareness trust and word-of-mouth. These efforts have ultimately crystallized into core brand assets
characterized by high barriers high premiums and high repurchase rates steadily expanding the brand’s reach. As of the end
of the Reporting Period Purcotton’s total omnichannel membership reached nearly 70 million marking a 15.4% increase
from the end of the previous year.
2. Product R&D
Driven by functionalization of pure cotton spunlace non-woven materials advanced wound care technologies and cutting-
edge biomaterials Winner Medical maintains a sharp focus on formulation upgrading of core materials and iterating
innovation of product technologies. Driven by the core strategy of “replacing synthetic fibers with pure cotton” for operating
room consumables the Company optimizes the material performance of high-frequency clinical items such as surgical
gowns. By integrating the “green operating room” concept throughout the entire surgical workflow it reinforces a brand
positioning of being “safe reliable and green”.In the field of respiratory protection leveraging the properties of pure cotton spunlace non-woven fabric the Company has
developed a series of cotton inner layer masks. With their naturally skin-friendly and biodegradable advantages these masks
are reshaping daily protection standards and significantly broadening consumer-grade applications introducing products
such as sun-protection and thermal masks. Through innovations in composite material technology and structural design the
products seamlessly integrate breathability high UV protection (UPF 50+) and thermal regulation. This enables them to meet
diverse scenario-specific demands including outdoor sports daily commuting and autumn/winter cold protection.In the field of functional dressings the Company focuses on the domestic substitution of core raw materials. By breaking
through technological bottlenecks in adhesive and absorbent materials we have established an industrialization platform
for domestic materials to ensure supply chain security. Concurrently we are fortifying our technological and regulatory
barriers through strategic patent portfolios and product registrations. In the bioactive dressings sector we have achieved mass
production utilizing collagen technology. This application is indicated for the coverage and repair of non-infected wounds
with low to moderate exudate. For medical aesthetic products the Company has realized the in-house manufacturing of
Class II medical device dressings. By leveraging steam sterilization technology we ensure absolute product sterility while
maintaining active ingredient efficacy and we continuously enhance the user experience through the R&D of innovative
membrane fabrics.In terms of industry-academia-research collaboration the Company partnered with an academician from the Chinese
Academy of Engineering to apply zero-lead radiation protection technology to its radiation protection product line. Under
a 120KV radiation environment the protective performance of this series is 20% to 30% higher than that of traditional lead
aprons. Having passed 30 tests for hazardous substances the products weigh only one-third of conventional lead aprons
feature a 300% increase in flexibility and offer a folding endurance of over 50000 times representing a comprehensive
upgrade across physical protection chemical safety and ergonomics. As of the end of the Reporting Period the Company
40Section III Management Discussion and Analysis held 183 Class II product registration certificates and 27 Class III product registration certificates with 35 new product
registration certificates acquired during this period (including those in Hong Kong Macao and Taiwan regions).In Purcotton adhered to the cotton sourcing principle of “high-grade matching for low-count yarns and premiummatching for high-count yarns”. Guided by the concept of yarn innovation and custom-spun yarn development and driven
by technological innovation as its core engine the Company continuously iterated its nine Cotton Tech technologies
including Cotton Soft Cotton Breathable Cotton Warm Cotton Cool Cotton Anti-UV Cotton Anti-Bacterial Cotton Quick-
Drying Pure Cotton Core Technology and the Cotton Premium series. Additionally it achieved significant breakthroughs in
advanced functional capabilities for pure cotton materials such as odor control and fluorine-free water resistance.The Company continuously upgrades its core technologies by optimizing spunlace processes and pre-treatment technologies
to launch the pure cotton spunlace non-woven self-softening technology 2.0; upgrading the substrates of disposable products
for travel scenarios to achieve the independent R&D and mass production of baby wipe formulas; relying on yarn innovation
to create the Wind Soft Cotton 4.0 fleece materials and the comfortable elastic and soft knit series; and leveraging Pure
Cotton Core Technology to balance fluffiness thermal insulation and washability thereby expanding the application of pure
cotton fabrics in the light activewear sector. Meanwhile the Company deepened its industry-academia-research-clinical
collaboration by conducting clinical studies jointly with Tier 3A hospitals such as Wuhan Tongji Hospital and Shenzhen
Maternity & Child Healthcare Hospital to verify the safety of pure cotton products. Collaborating with universities and
research institutions the Company established a “scenario-based comfort” evaluation system for loungewear and a scientific
evaluation model for the five senses of sleep while utilizing a thermal manikin to build a thermal comfort model for pure
cotton thermal underwear. It also partnered with Huazhong Agricultural University to advance cotton breeding research
realizing the propagation of select varieties and the batch-planting conversion of Pure Cotton 135 ultimately delivering
comfortable healthy and eco-friendly product experiences to consumers through whole-industry-chain innovation.Synchronously the Company advanced its full-lifecycle carbon footprint management. Multiple core pure cotton products
have undergone carbon footprint verification achieving a quantitative assessment of the carbon footprint across the entire
chain from cotton planting production and processing to product usage and end-of-life disposal. By utilizing naturally
biodegradable cotton fibers to reduce the environmental burden the Company has successfully established a benchmark for
low-carbon and green products. As of the end of the Reporting Period Purcotton has been granted a total of 601 patents.Over 32 products have earned authoritative third-party green and low-carbon certifications. Empowered by effective R&D
technologies Purcotton successfully launched 4 new products with sales exceeding RMB100 million 15 products over
RMB10 million and 366 products over RMB1 million in .
3. Digital and intelligent transformation
Winner Group follows an evolutionary path of “Online Presence → Digitalization → Intelligence” achieving comprehensive
digital coverage across its medical and consumer segments. marks a pivotal year for the Group’s transition from
digitalization to intelligence. In the consumer segment Purcotton established a digital operational analysis platform
completed core index system modeling and earned the national DCMM Level 3 certification. Retail stores achieved fullonline integration via Feishu significantly streamlining operational systems and being recognized as a “National FeishuAI+ Efficiency Pioneer”. In the medical business the comprehensive upgrade of CRM integration with the Feishu mobile
terminal has significantly boosted sales efficiency with AI sales forecast accuracy exceeding 98%. Furthermore PLM project
management for product R&D has greatly simplified operational processes providing precise support for R&D decision-
making. Within corporate functional management the Group focused on constructing a unified collaboration platform
achieving industry-leading metrics in both Feishu user activity and AI application adoption. The financial digitalization
strategy completed its organizational redesign and three-year roadmap laying a robust groundwork for the Group’s
digitalization. Regarding supply chain and manufacturing the digital procurement platform operated with high efficiency
41maintaining a high replenishment adoption rate while significantly reducing out-of-stock rates. The manufacturing segment
fully embraced the “Six-in-One Integration” development philosophy. By leveraging AI visual inspection technology
production efficiency was markedly enhanced and workforce allocation was optimized. The “One Item One Code” function
enabled product anti-counterfeiting full-lifecycle traceability and end-to-end quality control successfully obtaining smart
manufacturing certifications and authoritative endorsements from industry associations. In terms of data and AI applications
the Group integrated advanced foundation models to build three major AI engines: AIGC creation visual perception and
decision intelligence and implemented numerous AI scenarios. These efforts resulted in significant annual labor cost savings
and a marked increase in average efficiency via AI tools with code compliance testing covering most scenarios. The Group
has developed a “project success equation” encompassing five key elements: business processes resource investment clear
goals industry cases and technical support establishing a firm foundation for the continued deepening of its intelligent
transformation.
2. Revenue and costs
(1) Breakdown of operating revenue
Overall operating revenue
Unit: RMB
2024
Proportion Proportion Year-on-year
Amount of operating Amount of operating change
revenue revenue
Total operating revenue (Note) 10949489967.01 100% 8977853631.73 100% 21.96%
By sector
Medical consumables 5114457721.11 46.71% 3905583866.46 43.50% 30.95%
Consumer goods 5748821913.85 52.50% 4990886442.62 55.59% 15.19%
Other 86210332.05 0.79% 81383322.65 0.91% 5.93%
By product
Medical consumables-traditional
1130390316.4810.32%1194898393.0613.31%-5.40%
wound care and bandaging
Medical consumables-advanced
937074480.648.56%781211296.848.70%19.95%
wound dressings
Medical consumables-operating
1515053912.7113.84%826303419.149.20%83.35%
room consumables
Medical consumables-infection
451370475.744.12%354415027.533.95%27.36%
prevention
Medical consumables-healthcare
472555121.814.32%403442451.304.49%17.13%
& personal care
42Section III Management Discussion and Analysis 2024
Proportion Proportion Year-on-year
Amount of operating Amount of operating change
revenue revenue
Medical consumables-other
608013413.735.55%345313278.593.85%76.08%
products
Consumer goods-dry and wet
1760575850.2416.08%1557408801.2717.35%13.05%
cotton tissues
Consumer goods-sanitary napkins 1018332032.17 9.30% 699946767.87 7.80% 45.49%
Consumer goods-other non-
399149507.453.65%355812417.163.96%12.18%
woven products
Consumer goods-baby and child
991022227.399.05%963131460.7010.73%2.90%
apparel and products
Consumer goods-adult apparel 1133933742.93 10.36% 964897782.52 10.75% 17.52%
Consumer goods-other woven
445808553.674.07%449689213.105.01%-0.86%
products
Other business 86210332.05 0.79% 81383322.65 0.91% 5.93%
By region
Domestic 7817408873.41 71.40% 6846740826.92 76.26% 14.18%
Overseas 3132081093.60 28.60% 2131112804.81 23.74% 46.97%
By sales model
Note:
1. At the Company level the operating revenue reached RMB 9715.7791 million representing a year-on-year increase of
11.9% excluding the data of company newly consolidated after August 2024 (namely GRI).
2. For the medical segment the operating revenue reached RMB 3966.9571 million representing a year-on-year growth of
7.6% excluding the data of company newly consolidated after August 2024 (namely GRI).
43(2) Sectors products regions or sales models that contribute to 10% or more of the Company’s operating revenue or
operating profit
√ Applicable □N/A
Unit: RMB
Change in Change in Change in
operating revenue operating costs gross margin
Gross
Operating revenue Operating costs compared to the compared to the compared to
margin
same period last same period last the same period
year year last year
By sector
Medical consumables 5114457721.11 3217150883.24 37.10% 30.95% 29.69% 0.61%
Consumer goods 5748821913.85 2454223244.92 57.31% 15.19% 11.49% 1.42%
By product
Medical consumables –
traditional wound care and 1130390316.48 759157954.41 32.84% -5.40% -7.68% 1.66%
bandaging
Medical consumables-
operating room 1515053912.71 1055785932.97 30.31% 83.35% 93.32% -3.59%
consumables
Consumer goods – dry and
1760575850.24913015212.4948.14%13.05%12.75%0.14%
wet cotton tissues
Consumer goods – adult
1133933742.93374283750.8366.99%17.52%10.72%2.03%
apparel
By region
Domestic 7817408873.41 3779219515.58 51.66% 14.18% 11.58% 1.12%
Overseas 3132081093.60 1954243513.95 37.61% 46.97% 45.55% 0.61%
By sales model
In cases where the statistical criteria for the Company’s main business data has been revised during the Reporting Period the
Company’s main business figures for the most recent one-year period restated in accordance with the criteria applied as of
the end of the Reporting Period
□Applicable √ N/A
44Section III Management Discussion and Analysis The Company is subject to the disclosure requirements for “Textile and Apparel Related Business” in the Shenzhen Stock
Exchange Listed Company Self-Regulation Guidelines No. 3 – Industry Information Disclosure
Unit: RMB
Change in Change in Change in
operating operating gross margin
Operating Gross revenue costs compared
Operating costs
revenue margin compared compared to the same
to the same to the same period
period last year period last year last year
By sector
Consumer goods 5748821913.85 2454223244.92 57.31% 15.19% 11.49% 1.42%
By product
Consumer goods – dry
1760575850.24913015212.4948.14%13.05%12.75%0.14%
and wet cotton tissues
Consumer goods –
1133933742.93374283750.8366.99%17.52%10.72%2.03%
adult apparel
By region
By sales model
Online sales 3643345632.23 1695480302.42 53.46% 18.68% 13.98% 1.92%
Physical store 1509367648.16 472090800.91 68.72% 1.18% -7.16% 2.81%
In cases where the statistical criteria for the Company’s main business data has been revised during the Reporting Period the
Company’s main business figures for the most recent one-year period restated in accordance with the criteria applied as of
the end of the Reporting Period
□Applicable √ N/A
Does the Company have physical store sales terminals
√ Yes □No
45Physical store distribution
Number Number Number of new stores Number of stores
Brand
Store type of of opened during the closed as of the end of Reason for closure
involved
stores stores Reporting Period the Reporting Period
Store closure due to
Directly operated 386 112416 26 24 contract expiration Purcotton
and strategic planning
Store closure due to
Franchised 119 26146 23 7 contract expiration Purcotton
and strategic planning
Total area of directly-operated stores and store efficiency
Operating revenue Year-on-year
Number of Operating revenue
Area range Total area in the same period change in average
stores (RMB0’000)
last year store efficiency
Less than 300 square meters 206 43341.20 59315.57 57790.58 2.64%
300-500 square meters 92 33608.39 38633.49 39055.90 -1.08%
500-800 square meters 16 10148.89 8764.57 9217.68 -4.92%
More than 800 square meters 6 5538.82 3477.55 3819.01 -8.94%
Total 320 92637.30 110191.18 109883.17 0.28%
Explanation: The above data is the year-on-year same-store change for Purcotton stores that have been open for more than 12
months as of December 31 .The top five stores in terms of operating revenue
Serial number Store name Opening date Operating revenue (RMB) Store efficiency per square meter
1 Ranking first October 25 2017 12257787.62 30318.54
2 Ranking second August 6 2012 11225773.54 42202.16
3 Ranking third November 11 2017 11059503.80 9972.50
4 Ranking fourth July 20 2016 10280356.64 25268.17
5 Ranking fifth January 18 2018 9625360.82 23082.40
Tota 54448782.42 20916.50
46Section III Management Discussion and Analysis New stores of listed companies
√ Yes □No
Area in Property Number
Store Opening Investment Product Business Business
Store name contract ownership of
address date amount (RMB) category format model
(Square meter) status stores
Purcotton directly Central Consumer Directly Leased by
2251.59 15374376.98 Retail 5
operated store China goods operated store Purcotton
Purcotton directly Consumer Directly Leased by
North China 1493.29 10595885.34 Retail 5
operated store goods operated store Purcotton
Purcotton directly Consumer Directly Leased by
West China 1138.51 5966141.62 Retail 4
operated store goods operated store Purcotton
Purcotton directly Consumer Directly Leased by
South China 2048.92 11981606.29 Retail 6
operated store goods operated store Purcotton
Purcotton directly Consumer Directly Leased by
East China 1610.04 9271540.79 Retail 6
operated store goods operated store Purcotton
Purcotton Consumer Franchised Franchised
North China 1417.34 2118964.72 Retail 6
franchised store goods store by Purcotton
Purcotton Consumer Franchised Franchised
South China 517.66 1019785.30 Retail 2
franchised store goods store by Purcotton
Purcotton Consumer Franchised Franchised
West China 1179.31 1986486.62 Retail 6
franchised store goods store by Purcotton
Purcotton Central Consumer Franchised Franchised
1474.76 2498704.40 Retail 6
franchised store China goods store by Purcotton
Purcotton Consumer Franchised Franchised
East China 678.33 1342891.31 Retail 3
franchised store goods store by Purcotton
Total 13809.75 62156383.37 49
The range of investment amount includes the ending inventory balance of the store renovation costs renovation deposit
lease expenses and personnel costs.Does the Company disclose information about its top five franchised stores
□Yes √ No
47(3) Is the Company’s revenue from physical sales greater than the revenue from labor services
√ Yes □No
Year-on-year
Classification of industry Item Unit 2024
change
Sales volume Ton 5884.10 6548.00 -10.14%
Medical consumables – gauze Production volume Ton 5873.52 6337.00 -7.31%
Inventory Ton 496.42 507.00 -2.09%
Sales volume 10000 pieces 131490.80 122389.00 7.44%
Medical consumables – face masks Production volume 10000 pieces 132246.13 124996.00 5.80%
Inventory 10000 pieces 33917.33 33162.00 2.28%
Sales volume 10000 packages 5576.54 4656.00 19.77%
Medical consumables – package Production volume 10000 packages 5553.56 4717.00 17.73%
Inventory 10000 packages 462.02 485.00 -4.74%
Sales volume 10000 packages 25426.68 23887.04 6.45%
Consumer goods – cotton tissues Production volume 10000 packages 26738.71 23979.83 11.51%
Inventory 10000 packages 4137.82 2825.79 46.43%
Sales volume 10000 pieces 133702.15 92446.09 44.63%
Consumer goods – sanitary napkins Production volume 10000 pieces 165875.99 87821.31 88.88%
Inventory 10000 pieces 48094.59 15920.74 202.09%
Explanation of the reasons for a year-on-year change of more than 30% in the relevant data
√ Applicable □N/A
1. The significant increase in the inventory of cotton tissues is primarily attributable to strategic stocking in response to the
later timing of the Spring Festival which drove up overall inventory levels.
2. The significant increases in the sales production and inventory volumes of sanitary napkins are mainly attributable to
the following: (1) Leveraging its “Five Supers” pure cotton sensory technology and Winner Medical’s safe and hygienic
production environment the “Nice Princess” brand successfully catered to consumers’ growing safety demands for sanitary
products thereby driving up market demand for sanitary napkins; (2) Strategic inventory buildup for the Spring Festival and
the “March 8th” major promotional campaigns further propelled the substantial growth in production sales and inventory
volumes.
(4) Performance of significant sales contracts and significant purchase contracts that the Company has signed as of the
Reporting Period
□Applicable √ N/A
(5) Breakdown of operating costs
48Section III Management Discussion and Analysis Classification of industry and product
Unit: RMB
2024
Year-on-year
Classification of industry Item Proportion of Proportion of
Amount Amount change
operating costs operating costs
Medical consumables Direct material 2162377283.10 67.21% 1715574802.12 69.16% 26.04%
Medical consumables Direct labor 483715203.45 15.04% 386067256.67 15.56% 25.29%
Medical consumables Manufacturing cost 571058396.69 17.75% 378933414.41 15.28% 50.70%
Subtotal of medical
3217150883.24100.00%2480575473.20100.00%29.69%
consumables
Consumer goods Direct material 1775560285.14 72.35% 1634502196.35 74.25% 8.63%
Consumer goods Direct labor 228053462.75 9.29% 197612092.06 8.98% 15.40%
Consumer goods Manufacturing cost 450609497.03 18.36% 369216015.52 16.77% 22.04%
Subtotal of
2454223244.92100.00%2201330303.93100.00%11.49%
consumer goods
Other business 62088901.37 1.08% 47656341.10 1.01% 30.28%
Total 5733463029.53 100.00% 4729562118.23 100.00% 21.23%
Classification of industry and product
Unit: RMB
2024
Year-on-
Classification of product Item Proportion of Proportion of
Amount Amount year change
operating costs operating costs
Traditional wound
Medical consumables care and 759157954.41 13.24% 822353781.48 17.39% -7.68%
bandaging
Advanced wound
Medical consumables 405962470.13 7.08% 350734908.16 7.42% 15.75%
dressings
Operating room
Medical consumables 1055785932.97 18.41% 546142103.25 11.55% 93.32%
consumables
Medical consumables Infection prevention 309633032.26 5.40% 279248062.69 5.90% 10.88%
Healthcare &
Medical consumables 259442713.47 4.53% 236774847.29 5.01% 9.57%
personal care
Medical consumables Other products 427168780.00 7.45% 245321770.33 5.19% 74.13%
Subtotal of medical
3217150883.2456.11%2480575473.2052.45%29.69%
consumables
492024
Year-on-
Classification of product Item Proportion of Proportion of
Amount Amount year change
operating costs operating costs
Dry and wet cotton
Consumer goods 913015212.49 15.92% 809762855.83 17.12% 12.75%
tissues
Consumer goods Sanitary napkins 325467348.86 5.68% 231649418.86 4.90% 40.50%
Other non-woven
Consumer goods 250513941.53 4.37% 225753984.48 4.77% 10.97%
products
Baby and child
Consumer goods apparel and 392820955.19 6.85% 395251796.23 8.36% -0.62%
products
Consumer goods Adult apparel 374283750.83 6.53% 338038535.09 7.15% 10.72%
Other woven
Consumer goods 198122036.02 3.46% 200873713.44 4.25% -1.37%
products
Subtotal of
2454223244.9242.81%2201330303.9346.54%11.49%
consumer goods
Other business 62088901.37 1.08% 47656341.10 1.01% 30.28%
Total 5733463029.53 100.00% 4729562118.23 100.00% 21.23%
Notes:
The cost of operating room consumables this year increased by 93.32% compared to last year mainly due to the revenue
from operating room consumables this year increased compared to last year;
The cost of sanitary napkins under the consumer goods this year increased by 40.5% compared to last year mainly due to the
revenue from sanitary napkins this year increased compared to last year;
(6) Has the scope of consolidation changed during the Reporting Period
√ Yes □No
See “Section VIII Financial Report – Notes X. Equity in Other Entities”.
(7) Significant changes or adjustments to the Company’s operations products or services during the Reporting Period
□Applicable √ N/A
(8) Key customers and major suppliers
Key customers
Total sales amount from top five customers (RMB) 1405674328.87
The total sales amount from the top five customers as a percentage of the total annual sales 12.83%
The sales amount from related parties within the top five customers as a percentage of the
0.00%
total annual sales
50Section III Management Discussion and Analysis Information on top 5 customers
Serial number Customer name Sales (RMB) Percentage of the total annual sales
1 Ranking first 808219190.23 7.38%
2 Ranking second 243629181.82 2.23%
3 Ranking third 124090740.76 1.13%
4 Ranking fourth 115396051.96 1.05%
5 Ranking fifth 114339164.10 1.04%
Total -- 1405674328.87 12.83%
Other information on key customers
□Applicable √ N/A
Major suppliers
Total purchase amount from top five suppliers (RMB) 765375152.37
The total purchase amount from the top five suppliers as a percentage of the total annual purchase amount 18.56%
The purchase amount from related parties within the top five suppliers as a percentage of the total annual
0.00%
purchase amount
Information on top 5 suppliers
Serial number Supplier name Purchase amount (RMB) Percentage of the total annual purchase amount
1 Ranking first 358437957.50 8.69%
2 Ranking second 216364457.77 5.25%
3 Ranking third 76044210.03 1.84%
4 Ranking fourth 70320905.64 1.70%
5 Ranking fifth 46089637.02 1.12%
Total -- 767257167.96 18.60%
Other information on major suppliers
□Applicable √ N/A
During the Reporting Period the Company’s trade business revenue represented more than 10% of its total operating
revenue.□Applicable √ N/A
513. Expenses
Unit: RMB
Explanation of significant
2024 Year-on-year change
changes
Sales expenses 2633668842.91 2264147324.64 16.32% Without significant changes
Administrative expenses 855447401.69 673737166.83 26.97% Without significant changes
Mainly due to the increase in
Financial expenses 6652714.22 -99211260.42 106.71% exchange loss and decrease in
interest income
Research and
410877566.24 348163926.01 18.01% Without significant changes
development expenses
The Company is subject to the disclosure requirements for “Textile and Apparel Related Business” in the Shenzhen Stock
Exchange Listed Company Self-Regulation Guidelines No. 3 – Industry Information Disclosure
Unit: RMB
Items 2024 Year-on-year change Explanation of significantchanges
Advertising and Mainly due to increased
promotional expenses 1092915264.91 816381913.54 33.87% investment in advertising and promotion for core categories
Employee compensation 702248914.06 645869958.89 8.73% Without significant changes
Sales commission and
e-commerce 322742572.30 288464170.25 11.88% Without significant changes
platform fees
Depreciation of right of
use assets 184671173.65 193347920.14 -4.49% Without significant changes
Lease and property
management fees 141740595.40 139382565.32 1.69% Without significant changes
Depreciation and
amortization 54992498.11 60007324.01 -8.36% Without significant changes
Travel expenses 35991126.08 27862714.05 29.17% Without significant changes
Office communication
expenses 21365227.08 19943206.56 7.13% Without significant changes
Utilities 13054619.71 13337799.99 -2.12% Without significant changes
Service charge 18749889.00 16252474.59 15.37% Without significant changes
Premium 15676508.42 5368181.67 192.03% Mainly due to increased investment in insurance
Others 29520454.19 37929095.63 -22.17% Without significant changes
Total 2633668842.91 2264147324.64 16.32% Without significant changes
52Section III Management Discussion and Analysis 4. Other information required by the industry information disclosure guidelines
The Company is subject to the disclosure requirements for “Textile and Apparel Related Business” in the Shenzhen Stock
Exchange Listed Company Self-Regulation Guidelines No. 3 – Industry Information Disclosure
(1) Capacity
Self-owned capacity
Reporting Period Same period last year
Capacity utilization changed by more than 10% year on year
√ Yes □No
2024 Change in capacity
Business Product
Unit Capacity Capacity utilization as Explanation of change reason
category category Capacity Output Capacity Output
utilization utilization percentage point
The addition of new production
Consumer Sanitary 10000 equipment and production lines
14597114462399.08%912448013987.83%11.25%
goods napkin pieces increased market demand and
higher order volumes
Is there overseas capacity
□Yes √ No
(2) Sales model and channel
Sales channels and actual operation methods of the products
Companies involved in textiles and apparel are in the consumer goods sector. The main sales channels for the consumer
goods sector include online sales and physical stores.Unit: RMB
Change in Change in Change in
operating revenue operating costs gross margin
Gross
Sales channel Operating revenue Operating costs compared to compared to compared to
margin
the same period the same period the same period
last year (%) last year (%) last year (%)
Online sales 3643345632.23 1695480302.42 53.46% 18.68% 13.98% 1.92%
Physical store 1509367648.16 472090800.91 68.72% 1.18% -7.16% 2.81%
Reasons for change
(3) Franchise and distribution
Franchisees and distributors achieved a sales revenue as a percentage over 30%
□Yes √ No
53Top five franchisees
Serial Date of start for Total sales\ amount
Franchisee name Is it a related party Franchisee’s level
number cooperation (RMB)
1 Ranking first November 9 2020 No 18121987.68 the first level
2 Ranking second December 28 2022 No 14509011.02 the first level
3 Ranking third June 16 2023 No 11230002.75 the first level
4 Ranking fourth December 24 2020 No 11086726.70 the first level
5 Ranking fifth June 1 2021 No 10424976.01 the first level
Total -- -- -- 65372704.16 --
Top five distributors
Serial number Franchisee name Date of start for cooperation Is it a related party Total sales amount (RMB)
(4) Online sales
Online sales achieved a revenue as a percentage over 30%
√ Yes □No
The Company’s primary operation model involves setting up online stores on third-party e-commerce platforms such as
Tmall JD.com and Douyin to sell products directly to end consumers. Under the direct sales model of e-commerce the
goods are delivered and control is transferred to the consumer. The revenue is recognized when the consumer confirms
receipt of the goods.Were self-owned sales platforms built
√ Yes □No
Date of start for operation January 6 2014
Number of registered users 17433471
Average number of monthly active users 1917672
Was there cooperation with third-party sales platforms
√ Yes □No
Unit: RMB
Platform name Transaction amount during the Reporting Period Return rate
Consumer goods sold at Taobao/Tmall 1814268006.44 3.56%
Opening or closing of online sales channels by the Company
□Applicable √ N/A
Explain the impact on the Company’s current and future development
54Section III Management Discussion and Analysis (5) Outsourced operation model
Does it involve an outsourced operation model
□Yes √ No
(6) Inventory
Inventory
Year-on-
Inventory Inventory Inventory year change
Main products Reason
turnover days amount (RMB) age in inventory
balance(RMB)
Raw materials and
materials consigned for 410423084.16 -2067541.62
processing
Work in process 264931644.21 28757676.10
Goods on hand 1292178152.85 47938322.92
Goods in transit 35983569.08 -12260448.72
Low-value consumables 12696605.04 -3969561.59
Mainly due to an increase in
Total 136 2016213055.34 58398447.09 sales volume and a buildup of
stocked inventory
Provision for inventory decline
Unit: RMB
Increase in current period Decrease in current period
Item Beginning balance Closing balance
Provision Reversal or write-off
Raw materials 9769459.08 17326879.45 11004010.56 16092327.97
Work in process 29252698.59 14922048.68 25993952.77 18180794.50
Goods on hand 167669713.69 45708658.75 120016266.80 93362105.64
Goods in transit 123797.00 123797.00
Low-value consumables 2290807.36 814596.47 2173410.42 931993.41
Total 208982678.72 78895980.35 159311437.55 128567221.52
Inventory information of terminal channels such as franchisees or distributors
Purcotton has 119 franchised stores in operation. The business model for the franchised stores is that the franchisees are
responsible for the construction and daily operation of the stores while Purcotton provides goods training and supply chain
support. Revenues generated from franchised stores sales are shared between Purcotton and the franchisees. Purcotton retains
ownership of inventory held in franchised stores. As of December 31 the inventory balance was RMB51.50 million
averaging RMB430000 per store.
55(7) Brand building
Does the Company engage in the production and sale of branded garments apparel and home textile products
√ Yes □No
Proprietary brand
Trademark Main product Target Price range of Main sales
Brand name Characteristics City tier
name type customer group main products area
Made of 100% high-quality natural
Second-tier third-
cotton free of fluorescent RMB5-30/pack (100
Purcotton Purcotton Cotton tissues All age groups Nationwide tier and above
brightenersgentle and non-irritating pieces)
cities nationwide
meeting consumers’ daily needs.Pure cotton surface layer (surface Age-appropriate Second-tier third-
Nice Sanitary
Purcotton layer partition edge wing surface female RMB1.5-4.99/pad Nationwide tier and above
Princess napkin
layer) population cities nationwide
Pure cotton surface layer unique in
the market care from natural cotton; Second-tier third-
Caregivers of
Purcotton Nice Baby Cotton diaper with ultra-thin 2mm super-absorbent RMB2.45-5.45/piece Nationwide tier and above
infants
core that holds up to 28 times its cities nationwide
weight in liquid
Second-tier third-
Made from pure cotton soft but not
Purcotton Purcotton Wet wipe All age groups RMB20-40/pack Nationwide tier and above
greasy gentle and harmless to skin
cities nationwide
Expecting
Baby and Made from pure cotton no
mothers Second-tier third-
child fluorescence no formaldehyde added
Purcotton Purcotton newborns RMB100-500/piece Nationwide tier and above
products/ the unique gauze fabric offering more
infants and cities nationwide
apparel comfortable care
toddlers
Outwear: RMB150-800/
Adult apparel:
piece; sleepwear:
age-appropriate
Made from pure premium cotton no RMB200-800/piece;
adult men Second-tier third-
Adult apparel/ fluorescence no formaldehyde added thermal underwear:
Purcotton Purcotton and women; Nationwide tier and above
intimate wear soft to the touch the unique gauze RMB200-600/piece;
Intimate clothing: cities nationwide
fabric offering more comfortable care underpants: RMB58-108/
all age groups of
piece (pack); socks:
customers
RMB20-40/pair
Children’s bedding:
Expecting
RMB268-1698/set;
Made from pure premium cotton no mothers
Toddler’s bedding: Second-tier third-
Bedding bath fluorescence no formaldehyde added newborns
Purcotton Purcotton RMB198-1098/set; Adult’s Nationwide tier and above
products soft to the touch the unique gauze infants
bedding: RMB268-3198/ cities nationwide
fabric offering more comfortable care toddlers and
set; Bath products:
adults
RMB38-398/piece
Partner brands
Main Target Price range Main Brand and
Brand Trademark Partner Cooperation Cooperation
product Characteristics customer of main sales City tier trademark
name name name method period
type group products area ownership
56Section III Management Discussion and Analysis Authorized brand
Main Target Price range Main
Brand Trademark Authorizing Authorization Is it an exclusive
product Characteristics customer of main sales City tier
name name party period authorization
type group products area
Marketing and operations of each brand during the Reporting Period
For detailed information please refer to “Section III Management Discussion and Analysis” – “IV. Analysis of MainBusiness” of the Report.Disputes related to trademark ownership
□Applicable √ N/A
(8) Others
Does the Company engage in apparel design-related business
√ Yes □No
Number of in-house fashion designers 39 Number of contracted fashion designers 0
Operation of established designer platform PLM system 3D design platform and digital color tools
Does the Company hold order meetings
□Yes √ No
5. R&D investment
√ Applicable □N/A
Name of main R&D Expected impact on the
Objective Progress Goal
projects Company’s future development
B r o a d e n c o n s u m e r - g r a d e
application scenarios for masks
Develop a mask product providing both sun
Development of catering to differentiated needs such
protection and warmth thereby broadening Achieve UPF 200+ and a thermal
Disposable UV-Protection Launched as outdoor sports daily commuting
the application scenarios of the mask retention rate of ≥35%
and Thermal Masks and autumn/winter warmth thereby
product line
driving incremental market growth
for the mask category
Develop a positioning pad specifically for C o m p l e t e t h e d e v e l o p m e n t a n d Enrich the company’s operating
operating rooms aimed at reducing the finalization of positioning pad products room consumables product line
Fluid Positioning Pads Launched
incidence of pressure ulcers in patients demonstrating significant shaping and enhancing product added value and
during surgical procedures pressure relief effects overall market competitiveness
Enhance the performance of foam
dress ing products to indus t ry
Develop a polyurethane foam material
Development of Highly F l u i d a b s o r p t i o n a n d r e t e n t i o n benchmark levels establish patent-
featuring superior fluid absorption and
Absorbent Medical Foam Launched performance reach world-class industry backed technical barriers and
retention capabilities designed for use in
Materials standards improve competitiveness in both
foam dressing products
domestic and international markets
to expand market share
57Name of main R&D Expected impact on the
Objective Progress Goal
projects Company’s future development
Master formulation technologies
Formulation Research Complete formulation development and
Develop a highly absorbent and ultra-soft for hydrocolloid products and
and Product Development Development product validation achieving regulatory
hydrocolloid formulation for application in achieve differentiated product
of Hydrocolloid stage registration and market launch both
hydrocolloid dressing products design thereby enhancing market
Dressings domestically and internationally
competitiveness
Develop high value-added medical
Research and
Develop artificial corneas for the treatment Complete research on the product consumables securing cutting-edge
Development of Development
of ophthalmic diseases with the strategic processing route and validate product technologies as a strategic reserve
Collagen-Based Artificial stage
goal of driving domestic substitution performance for the company’s future entry into
Corneas
the high-end medical device sector
Research the molding processes and
Development of formula t ions of poly isoprene la tex Provide foundational assurance for
Mass Successfully develop and launch new
Polyisoprene Surgical succes s fu l l y deve lop po ly i sop rene the company’s export business of
production products
Gloves surgical gloves and achieve full-scale high-end medical gloves
industrialization
Aligning with cutting-edge technological
trends in injection and puncture devices Enr ich the p roduc t por t fo l io
Key Technology Complete the R&D of a spring-powered
the development of new anti-needle stick elevate the company’s technological
Research and automat ic needle-re t ract ion ant i -
syringes aims to address the safety hazards Approved for leadership in injection and puncture
Application of needlestick syringe obtain regulatory
of accidental needlestick injuries associated registration devices and secure a reserve of
Anti-Needle Stick r e g i s t r a t i o n a n d a c h i e v e m a s s
with convent ional syr inges thereby technologies and new products for
Syringes industrialization
significantly enhancing the safety of clinical domestic and international sales
drug administration.Develop a series of TPE infusion set
Complete the R&D of TPE infusion set
Research and products to eliminate the toxicity risks
Approved for products obtain regulatory registration Enrich the Company’s infusion set
Development of TPE associated with DEHP phthalate plasticizers
registration and achieve industrialization to meet product line
Infusion Sets and vinyl chloride monomers found in
differentiated clinical application needs
traditional infusion sets
Meet the clinical demand for extending Complete the R&D of pump-assisted
Research and infusion l ines dur ing pump-assis ted (pressure infusion) extension tube
Approved for Enrich the Company’s infusion set
Development of Medical (pressure) infusions thereby enhancing products obtain regulatory registration
registration product line
Connecting Tubes convenience and efficiency in clinical and achieve industrialization to meet
operations differentiated clinical application needs
Resolve the toxici ty issues of l ight-
shielding agents and photosensitive drugs
during clinical infusions as well as the C o m p l e t e t h e R & D o f d o u b l e -
Research and toxicity of DEHP plasticizers and vinyl layer co-extruded TPU/PVC light-
Development of Light- chloride monomers in conventional light- Approved for r e s i s t a n t i n f u s i o n s e t s o b t a i n Enrich the Company’s infusion set
Resistant Infusion Sets resistant infusion sets. This project aims registration regulatory registration and achieve product line
(TPU + DEHP-Free PVC) to develop a series of double-layer co- industrialization to meet differentiated
extruded TPU/PVC light-resistant infusion clinical application needs
sets significantly improving clinical
infusion safety.Develop a series of infusion sets featuring
C o m p l e t e t h e R & D o f p r e c i s i o n
v isua l sca led f low regu la to r s . Th i s
Research and f l o w c o n t r o l i n f u s i o n s e t s
addresses the clinical challenge of being
Development of Precision ( s c a l e d f l ow r e gu l a t o r s ) ob t a i n Enrich the Company’s infusion set
unable to f inely adjust and maintain In progress
Flow Control Infusion regulatory registration and achieve product line
c o n s t a n t i n f u s i o n r a t e s f o r c e r t a i n
Sets industrialization to meet differentiated
medications thereby improving drug
clinical application needs
administration safety
58Section III Management Discussion and Analysis Name of main R&D Expected impact on the
Objective Progress Goal
projects Company’s future development
R&D of a New One-
Enhance production efficiency
Step Production Process A c h i e v e i m p o r t s u b s t i t u t i o n
Achieve capacity expansion alongside and quality stability reduce labor
for Medical Ultra-High Launching technologica l upgrades capaci ty
technological upgrades and iterations costs and provide solid support for
Strength and Highly expansion and one-step molding
business growth
Absorbent Paper
Build a four-tier protective productportfolio encompassing “dust protectionR&D of High-Flame-
Develop advanced protective clothing with flame retardancy chemical barrier and
Retardant High-Barrier Execute a mid-to-high-end productintegrated functions of “secondary flame integrated flame-retardant + chemicaland Broad-Spectrum Launching p l a n n i n g a n d s t r e n g t h e n t h eretardancy plus high-level chemical barrier protection” successfully penetrating the
Chemical Protective Company’s core competitiveness
protection mid-to-high-end industrial protection
Composite Suits
market characterized by high technical
barriers
Develop a multifunctional children’s
pillow based on 3D morphological data
Design and 1. Complete 3D scanning and cluster
of children’s head neck and shoulders.Development of analysis of children’s head neck and
Meeting ergonomic requirements for Drive the Company’s transition
Multifunctional shoulder morphology to establ ish
both supine and lateral sleeping postures toward scientific and personalized
Pillows Driven a physical trait database. 2. Design
and featuring antibacterial and anti-mite In progress product design in the children’s
by Biomechanical and develop a latex-based ergonomic
functions this product aims to solve the bedding sector establ ishing a
Characteristics of pillow structure that adapts to various
issues of insufficient support and poor distinct technological edge
Children’s Head Neck body types and supports dual sleeping
comfort in traditional pillows caused by
and Shoulders postures
neglecting variations in children’s body
shapes and sleeping habits
1 . S t reng then the Company’s
Solve the technical challenges of efficiently
Design and m a r k e t c o m p e t i t i v e n e s s a n d
sealing cotton non-woven fabrics due to 1. Successfully develop the first fully
Development of technological leadership in the
their material properties. By integrating a automated intel l igent production
Modular and Intelligent premium non-woven products
directional hot-melt adhesive penetration line for disposable cotton non-woven
High-Efficiency In progress sector. 2. Accelerate the transition
process with intelligent production systems underwear. 2. Achieve a single-line
Molding Equipment and towards automated and intelligent
this project fills the technical and market production capacity breakthrough of 200
Premium Products for manufacturing boosting overall
gaps in the field of 100% cotton spunlace pieces per minute
Disposable Underwear p r o d u c t i o n e f f i c i e n c y a n d
non-woven disposable underwear
sustainable innovation capabilities
Develop a novel warp-knitted fabric that 1. Ensure the fabric maintains the 1 . Expand in to the a th le i sure
Research on High- combines the natural comfort of cotton natural breathabil i ty and softness n i c h e m a r k e t a n d e n h a n c e
Elasticity Warp- fibers with high elasticity. Utilizing special of cot ton while possessing mult i - competitiveness in light-sports
Knitted Gauze loop structures and yarn configurations directional high elasticity and moisture- clothing materials. 2. Drive the
Structural Materials it breaks through the elasticity limits of In progress wicking quick-drying properties. 2. transition from traditional textiles to
and Development of traditional cotton fabrics meeting the Establish mass-production technology the R&D of high-performance high
Functional Light-Sports dynamic wearing needs for moisture- for functional fabrics suitable for light- value-added fabrics reinforcing
Fabrics wicking quick-drying and a snug fit in sports apparel featuring a 3D mesh technical barriers and rapid market
light-sports scenarios texture on the reverse side responsiveness
Enable 100% cotton spunlace non-woven
Development of 100% fabrics to dynamically reveal patterns
Successfully develop a biomimetic Propel the Company’s transition
Cotton Spunlace upon contact with moisture achieving
gradient wetting printing process with from traditional material supply to
Materials with functionalization and interactivity. This
independent intellectual property rights providing functional and interactive
Biomimetic Gradient drives the upgrading of traditional non- Launched
launch novel non-woven products solutions elevating the brand’s
Wetting Structures and woven fabrics into intelligent high-value-
and complete the patent presence innovative image and expanding its
Dynamic Water-Activated added products based on a novel printing
establishment value-added potential
Patterned Products process using biomimetic gradient wetting
principles
59R&D personnel
2024 Change ratio
Number of R&D personnel (person(s)) 1323 1199 10.34%
Proportion of R&D personnel 8.34% 7.80% 0.54%
Education level of R&D personnel
Bachelor’s degree 440 324 35.80%
Master’s degree 108 104 3.85%
Age distribution of R&D personnel
Under 30 200 186 7.53%
Aged 30-40 641 575 11.48%
R&D investment amount and proportion to operating revenue in the past three years
20242023
R&D investment amount (RMB) 410877566.24 348163926.01 322051868.43
Proportion of R&D investment to
3.75%3.88%3.93%
operating revenue
Capitalized R&D expenditure (RMB) 0.00 0.00 0.00
Proportion of capitalized R&D
0.00%0.00%0.00%
expenditure to total R&D investment
Proportion of capitalized R&D
0.00%0.00%0.00%
expenditure to net profit for current period
Reason and impact of significant changes in R&D personnel composition
□Applicable √ N/A
Reason for significant change in the proportion of total R&D investment to operating revenue compared to last year
□Applicable √ N/A
Reason for significant change in capitalization rate of R&D investment and explanation of its rationality
□Applicable √ N/A
The Company is subject to the disclosure requirements for “Medical Device Business” in the Shenzhen Stock Exchange
Listed Company Self-Regulation Guidelines No. 4 – Industry Information Disclosure for Growth Enterprise Market
Information related to medical devices
√ Applicable □N/A
Specific details can be found in the appendix “Information Related to Medical Devices” at the end of this annual report.
60Section III Management Discussion and Analysis 6. Cash flow
Unit: RMB
Item 2024 Year-on-year change
Subtotal of cash inflows from operating activities 12454198998.27 10330531914.26 20.56%
Subtotal of cash outflows from operating activities 10788522103.34 9064776647.56 19.02%
Net cash flow from operating activities 1665676894.93 1265755266.70 31.60%
Subtotal of cash inflows from investing activities 3729326814.37 3586950149.18 3.97%
Subtotal of cash outflows from investing activities 4004943541.59 7698976445.10 -47.98%
Net cash flow from investing activities -275616727.22 -4112026295.92 93.30%
Subtotal of cash inflows from financing activities 2863329658.11 1984570746.59 44.28%
Subtotal of cash outflows from financing activities 4043224578.16 2462094397.07 64.22%
Net cash flow from financing activities -1179894920.05 -477523650.48 -147.09%
Net increase in cash and cash equivalents 203624723.23 -3320243397.10 106.13%
Explanation of the main influencing factors for significant year-on-year changes in relevant data
√ Applicable □N/A
1. Net cash flow from operating activities increased by 31.60% primarily attributable to revenue growth and the
corresponding increase in cash received from sales;
2. Cash outflows from investing activities decreased by 47.98% primarily due to a reduction in the purchase of wealth
management products during the year;
3. Net cash flow from investing activities increased by 93.30% primarily due to the impact of the payment for the GRI
acquisition in the previous year;
4. Cash inflows from financing activities increased by 44.28% primarily attributable to higher cash proceeds received from
borrowings this year;
5. Cash outflows from financing activities increased by 64.22% primarily due to higher cash payments for the repayment of
debts during the year;
6. Net cash flow from financing activities decreased by 147.09% primarily due to higher repayments of borrowings and
increased payments for interest and dividends in the current period;
7. Net increase in cash and cash equivalents increased by 106.13% primarily due to the combined impact of the factors
mentioned above.Explanation of significant differences between net cash flow from operating activities during the Reporting Period and net
profit for the year
√ Applicable □N/AFor details please refer to “Section VIII Financial Report – VII. Notes to Items in the Consolidated Financial Statements –
78. Supplemental information for the statement of cash flows”.
61V. Non-Core Business Activities
√ Applicable □N/A
Unit: RMB
Percentage
Amount Reason Sustainability
of total profit
Primarily due to matured returns on
Associate income is
Investment income 53091575.78 5.07% wealth management products and
sustainable; others are not
recognized gains from associates
Gains and losses Primarily due to changes in the fair
from changes in fair -24339525.82 -2.32% value of structured deposits and other No
value wealth management products
Primarily due to provision for
inventory write-down goodwill
Asset impairment -251273437.71 -23.98% No
impairment and fixed asset
impairment
Primarily due to gains from the
Non-operating
8206430.16 0.78% disposal of non-current assets No
revenue
and other non-operating revenue
Non-operating Primarily due to losses from the
28063679.49 2.68% No
expense disposal of non-current assets
Primarily due to expected credit loss
Credit impairment
-10273088.79 -0.98% provisions for accounts receivable No
loss
and other receivables
Gains on disposal of Primarily due to disposal of non-
546546.56 0.05% No
assets current assets
Tax relief and reductions
Primarily due to receipt of
and cotton transport
Other revenue 84244396.64 8.04% government grants related to
subsidies are sustainable;
business operations
others are not
62Section III Management Discussion and Analysis VI. Analysis of Assets and Liabilities
1. Significant changes in asset composition
Unit: RMB
End of Beginning of Change in Explanation of significant
Amount Percentage Percentage percentage changesof total assets Amount of total assets
Monetary capital 1593989319.92 8.66% 1412088898.63 7.68% 0.98% No significant change observed
Accounts
receivable 1040873548.50 5.66% 980617641.38 5.33% 0.33% No significant change observed
Contract assets 0.00%
Inventories 2016213055.34 10.95% 1957814608.25 10.65% 0.30% No significant change observed
Investment Primarily due to the depreciation
property 1454295.27 0.01% 2360346.25 0.01% 0.00% of investment property in the current period
Long-term equity
investments 478989825.04 2.60% 445355778.00 2.42% 0.18% No significant change observed
Primarily due to construction in
progress reaching its intended
Fixed assets 4199969234.92 22.82% 3354304108.81 18.24% 4.58% use state and being transferred
to fixed assets during the current
period
Primarily due to construction in
Construction in progress reaching its intended
progress 511625219.44 2.78% 1074955450.40 5.84% -3.06% use state and being transferred to fixed assets during the current
period
Right-of-use
assets 554782629.68 3.01% 595222623.66 3.24% -0.23% No significant change observed
Short-term
borrowings 1836629579.24 9.98% 1969044164.65 10.71% -0.73% No significant change observed
Contract
liabilities 169914491.43 0.92% 182755504.60 0.99% -0.07% No significant change observed
Long-term
borrowings 50000000.00 0.27% 53000000.00 0.29% -0.02% No significant change observed
Lease liabilities 416875073.97 2.27% 440876652.33 2.40% -0.13% No significant change observed
Prepayments 179318742.70 0.97% 107051901.68 0.58% 0.39% Primarily due to an increase in prepayments for cotton
Non-current Primarily due to the repayment
liabilities due 185546235.07 1.01% 396768243.67 2.16% -1.15% of borrowings during the current
within one year period
Long-term Primarily due to the repayment
payables 26994520.77 0.15% 48544431.64 0.26% -0.11% of long-term payables during the current period
63A high proportion of foreign assets
□Applicable √ N/A
2. Assets and liabilities measured at fair value
√ Applicable □N/A
Unit: RMB
Cumulative Impairment
Fair value changes
fair value provision Purchases during
recognized in Sales during the Other
Item Opening balance changes for the the Closing balance
profit or loss for current period changes
recognized current current period
the current period
in equity period
Financial assets
1. Trading financial assets
(excluding derivative 2921341484.39 -17095783.33 3457028397.45 3535895402.95 2825378695.56
financial assets)
5. Other non-current
107906716.86-7243742.49-781902.8399881071.54
financial assets
Subtotal of financial assets 3029248201.25 -24339525.82 3457028397.45 3535895402.95 -781902.83 2925259767.10
Total of the above 3029248201.25 -24339525.82 3457028397.45 3535895402.95 -781902.83 2925259767.10
Financial liabilities 0.00 0.00 0.00 0.00 0.00 0.00
Other changes
Other changes were primarily exchange translation differences
Has there been any significant change in the measurement attributes of the Company’s major assets during the Reporting
Period
□Yes √ No
3. Restrictions on asset rights as of the end of the Reporting Period
For details please refer to Section VIII Financial Report – VII. Notes to Items in the Consolidated Financial Statements – 31.Assets with restricted ownership or use rights.VII. Investment Analysis
1. Overall situation
□Applicable √ N/A
2. Significant equity investments acquired during the Reporting Period
□Applicable RN/A
64Section III Management Discussion and Analysis 3. Significant non-equity investments in progress during the Reporting Period
□Applicable √ N/A
4. Investment in financial assets
(1) Securities investment
√ Applicable □N/A
Unit: RMB
Fair value Cumulative
Sales Profit or
changes fair Purchases
Accounting during loss during
Security Security Original Opening book recognized in value during the Closing book Source of
Security type measurement the the Accounting item
code abbreviation investment cost value profit changes current value funds
model current Reporting
or loss for the recognized in period
period Period
current period equity
Other noncurrent Self-
C o n v e r t i b l e Measured at
N/A N/A 32094498.00 31233669.47 -4174505.48 26277261.16 financial owned
bonds fair value
assets funds
Shenzhen Hongtu
No. 1 Private Equity Other noncurrent Self-
Measured at
Fund N/A Investment Fund 70000000.00 76673047.39 -3069237.01 73603810.38 financial owned
fair value
Partnership (Limited assets funds
Partnership)
Total 102094498.00 -- 107906716.86 -7243742.49 0.00 0.00 0.00 0.00 99881071.54 -- --
(2) Derivatives investment
□Applicable √ N/A
The Company had no derivatives investment during the Reporting Period.VIII. Disposal of Major Assets and Equity
1. Disposal of major assets
□Applicable √ N/A
The Company had no disposal of major assets during the Reporting Period.
2. Disposal of major equity
□Applicable √ N/A
65IX. Analysis of Principal Subsidiaries and Affiliates
√ Applicable □N/A
Information on major subsidiaries and affiliates contributing over 10% to the Company’s net profit
Unit: RMB
Company Registered
Company name Main business Total assets Net assets Operating revenue Operating profit Net profit
type capital
Primarily responsible
Winner Medical
for pure cotton jumbo
(Huanggang) Subsidiary 259459200.00 1131053340.38 899747588.84 1208170034.65 134776701.45 111249597.91
rolls cotton tissues
Co. Ltd.and other products
Acquisition and disposal of subsidiaries during the Reporting Period
√ Applicable □N/A
Methods of acquisition and disposal of Impacts on overall production and
Company name
subsidiaries during the Reporting Period operation and results
Tianjian Trading (Hong Kong) Limited
Establishment No direct material impact
(天健商贸(香港)有限公司)
PURCOTTON(VN)COMPANY LTD Establishment No direct material impact
Explanation of principal subsidiaries and affiliates
X. Structured Entities Controlled by the Company
□Applicable √ N/A
XI. Outlook for Future Development
1. Strategic planningSince its establishment 35 years ago Winner Group has remained steadfast in its lofty ideals and vision of “Caring HealthCherishing Life and Protecting the Environment for A Better World” adhered to the three core business principles of
“Quality over Profit Brand over Speed Social Value over Corporate Value” and upheld the corporate core values of
“Relentless Endeavor; Pioneering Innovation; Self-Critique; Long-Termism” ensuring that Winner Medical and Purcotton
always move forward along the right path of development.Looking toward the new 2026–2028 strategic cycle the Company adheres to the strategic guidelines of “Product LeadershipOperational Excellence Brand Advancement and Digital Empowerment”. We will embrace the philosophy that “theWinner’s path to a robust future lies not only in the refinement of Shu (Tactics) but more importantly in the steadfastadherence to Dao (The Way)”. Dao defines why we act—our unwavering commitment to our vision and original aspiration;
Shu dictates how we act—anchoring in high-value sectors to break through the ceiling of sustainable growth.
66Section III Management Discussion and Analysis Guided by both Shu and Dao the Company has mapped out its strategic blueprint for the next three years. We will
comprehensively advance the systemic upgrade of our intelligent manufacturing quality management financial systems and
digital and AI capabilities. Furthermore we will actively promote the deep integration of AI technologies across the entire
value chain spanning R&D supply chain and marketing. High-quality growth will be driven by our formula for success:
"Product Competitiveness × Channel Power × Customer Service Capability × Marketing Efficacy × Organizational Agility
× Digitalization." Concurrently we will continue to optimize our talent ecosystem to empower employee development.Ultimately by embedding ESG principles throughout our entire operational lifecycle we will forge a resilient responsible
and sustainable competitive advantage.
(1) Medical consumablesThe Company will steadfastly execute its core strategy of “Product Leadership Operational Excellence SmartManufacturing and AI Empowerment” firmly recognizing that “Product Leadership” is the fundamental key to navigating
through cycles and winning in the market. Centered on providing one-stop solutions and services we will focus on key
sectors including advanced wound dressings operating room consumables healthcare & personal careinfection prevention
and infusion and drug delivery. We will continuously drive the rapid growth of strategic products deepen innovation in basic
materials and actively explore cutting-edge fields such as regenerative medicine and tissue engineering smart sensing and
detection and biodegradable biomaterials thereby forging new engines for future growth.
(2) Consumer goods
The Company will continue to uphold the vision of “Pure Cotton Changes the World” guided by the strategic direction of
“Product Leadership Material First Brand Advancement and Value Creation”. Focusing on six major lifestyle scenarios—
maternal and infant care personal care intimate apparel home and sleepwear outerwear and light sports—we will strive for
absolute perfection in strategic products and continuously strengthen our integrated omni-channel execution capabilities to
achieve high-quality growth. Embodying the development philosophy of “Product Leadership Material First” we will delve
into frontier areas within basic materials such as seed genetic improvement the chemical modification of pure cotton and
gene coding technologies to lay a robust foundation for continuous product innovation.
2. Operating plan for 2026
(1) Medical consumables
In 2026 Winner Medical will focus on expanding its global footprint and upgrading its product mix to achieve steady
revenue growth and continuous margin improvement. Regarding channel development the Company will place equal
emphasis on both domestic and international markets. Domestically it will deepen its presence in the core professional
medical sector. Driven by academic promotion and scenario-based solutions such as the “Green Operating Room” and
leveraging the one-stop medical consumables supply capabilities and full-industry-chain advantages forged through M&A
integration the Company aims to achieve deep coverage across hospital departments. On the B2C front the focus will be
directed toward the consumer medical track. By building a barrier of trust founded on rigorous standards rooted in a medical
background the Company will reach consumers through omni-channel integration utilizing high-growth categories to drive
overall expansion. Overseas capitalizing on 35 years of profound industry expertise coupled with the channels customer
base and global production capacity (spanning the United States Vietnam the Dominican Republic etc.) of the US-
based GRI acquired in 2024 the Company will accelerate the restructuring of its global supply chain and the international
expansion of its proprietary brands ultimately realizing the globalization of both its supply chain and brand presence. On
the product front Winner Medical will pursue a path of high-quality development. For high-margin high-growth categories
such as advanced wound dressings operating room consumables and ealthcare & persona care the Company will deepen
its R&D efforts to drive the transition toward high value-added premiumization and branding. Conversely for lower-margin
67categories like traditional wound care the objective will be to increase market share and hospital penetration; the Company
will leverage the cost and quality advantages of its entire industry chain to consolidate its foundational market share.
(2) Consumer goodsIn 2026 Purcotton will advance its comprehensive strategic playbook centered on “Product Leadership ChannelEnhancement Brand Advancement and Return to Value”. On the product front Purcotton will persist in R&D-driven
innovation deepening its expertise in pure cotton core materials and functional technologies. Adhering to the rigorous
standards born of medical heritage we will continuously strengthen the differentiated advantages of our pure cotton
offerings. Concurrently by focusing on four strategic categories—cotton tissues sanitary napkins intimate apparel and
infant & child products—we will leverage a blockbuster product strategy to steadily increase our market share across these
segments and consolidate our category leadership. On the channel front we will comprehensively optimize our omni-
domain layout. Online we will capitalize on the macro trend of category traffic migrating to Douyin by elevating short-
video content quality and refining interest-based e-commerce operations to boost conversion efficiency. Offline priority will
be given to expanding into premium KA channels such as branded supermarkets warehouse club stores and convenience
stores thereby broadening our terminal retail coverage. Simultaneously we will actively pursue O2O on-demand retail to
capture incremental growth. The development of physical stores will focus on upgrading brand image service quality and
operational capabilities to drive the integrated operation of new retail. In our overall operations we remain deeply committed
to brand value and long-termism. By increasing investments in brand building and membership services we will continue to
reinforce the core brand perception of “Medical Heritage; Cotton-Centric Philosophy; Quality DNA”. Through the powerful
synergy of product channel and brand Purcotton is poised to achieve high-quality sustainable growth.
3. Potential risks facing the Company
(1) Risk of changes in industry policies and standards and countermeasures
The medical device industry due to its direct connection to human health and safety is subject to stringent government
oversight. In recent years with the continuous deepening of reforms in the pharmaceutical and healthcare systems relevant
government departments have introduced a series of regulations and policies in areas such as industry standards bidding
rules pricing mechanisms and distribution systems. The implementation of these policies has had a broad and profound
impact on the development of the medical device industry. Should the Company fail to adapt swiftly to these policy changes
it could face operational challenges. As a result the Company remains vigilant of regulatory developments and actively
adjusts its strategy to ensure both compliance and market competitiveness.
(2) Risk of raw material price fluctuations and countermeasures
The Company’s core raw materials consist primarily of cotton and cotton-derived products including cotton yarn and
medical greige fabrics. Cotton prices are subject to a wide array of influencing factors such as acreage under cultivation
climate conditions inventory cycles government pricing policies market demand futures market dynamics international
trade regulations and currency exchange rate fluctuations. Should raw material costs continue to rise while product pricing
fails to adjust in parallel the resulting inability to pass on costs may exert pressure on profit margins and adversely affect
the Company’s profitability. To mitigate this risk the Company has implemented a proactive cotton procurement strategy.This includes increasing strategic inventory when prices are low and deploying a price linkage mechanism during high-price
periods to adjust retail pricing and optimize discount policies. In parallel the Company opportunistically invests in cotton
derivatives as a hedging tool to manage price volatility thereby reducing its potential impact on financial performance.
(3) Risk from shifts in the international trade environment and countermeasures
Currently the global trade landscape remains volatile and complex shaped by geopolitical tensions rising tariff barriers
68Section III Management Discussion and Analysis policy adjustments affecting imports and exports and fluctuations in international logistics costs. These dynamics present
growing challenges and operational costs for the Company’s overseas business. For the medical consumables segment
divergent regulatory standards across jurisdictions can result in burdensome product certification and market entry
requirements increasing both operational complexity and time-to-market. Failure to adapt swiftly to such changes may
lead to order reductions higher costs and delayed deliveries. The Company will fully leverage GRI’s global manufacturing
footprint across the United States the Dominican Republic and Vietnam to restructure its supply chain system and adjust its
market deployment strategies with agility to minimize the potential operational impact of external uncertainties.
(4) Risk of exchange rate fluctuations and countermeasures
The Company’s cross-border transactions are settled primarily in U.S. dollars and other major foreign currencies
notably involving the export of medical consumables. Exchange rate fluctuations have a dual impact – affecting both the
competitiveness of product pricing in overseas markets and the cost structure of imported raw materials as well as creating
potential foreign exchange gains or losses. A substantial appreciation of the RMB exchange rate may impact the market
competitiveness of the Company’s overseas products and result in corresponding foreign exchange losses adversely
impacting financial performance. To counter this the Company has established a multi-tiered hedging framework. Key
measures include: incorporating exchange rate adjustment clauses in contracts with long-term clients; shortening quotation
cycles for new orders to improve responsiveness to currency fluctuations; executing forward foreign exchange contracts for
hedging purposes thereby locking in future settlement rates and enhancing its foreign exchange monitoring and analytical
capabilities to track currency market trends in real time and mitigate the impact of exchange rate volatility on profitability.
(5) Risk of competition in the consumer goods business
The markets for various categories of the Company’s consumer goods business are intensely competitive with competitors
ranging from established domestic and international brands to new market entrants. Competitors may strive for market share
through price wars increased marketing investment product innovation or channel expansion which poses risks such
as a decline in the Company’s market share a slowdown in revenue growth and pressure on profit margins. Meanwhile
consumer preferences evolve rapidly; if the Company fails to capture future consumption trends in a timely manner or
suffers from insufficient innovation in product development it may face adverse operating conditions. To mitigate these
risks the Company has established a stable management team and an efficient decision-making mechanism. We regularly
formulate rigorous business plans to gain timely insights into market changes and maintain continuous R&D and innovation.By consistently adhering to the principles of product leadership and operational excellence the Company strives to meet
evolving consumer needs and enhance brand recognition.
(6) Risks of cross-border acquisitions and countermeasures
The Company successfully completed the acquisition projects of overseas equity accelerating Winner Group’s global
expansion. However this also introduces various risks including: fluctuations in international political and economic
conditions; changes in the target country’s policies and regulations (such as legal systems tariff policies labor policies and
regulatory frameworks); exchange rate volatility; differences in cultures and business practices; and challenges related to the
integration of management systems personnel coordination and technology transfer. These risks may hinder the integration
process result in lower-than-expected business synergies and negatively impact the Company’s financial condition and
operating results. To mitigate these risks the Company will enhance communication and exchange with the acquired
companies deepen understanding of local culture market environment and regulatory systems rigorously implement
integration plans continuously improve its risk assessment mechanisms and strengthen compliance management and
training to reduce the risks of cross-border acquisitions.
(7) Risk of goodwill impairment and countermeasures
69To build a one-stop solution for medical consumables Winner Medical has in recent years executed a series of strategic
acquisitions to extend and strengthen its industrial value chain. As a result a material amount of goodwill has accumulated.In accordance with accounting standards goodwill must undergo annual impairment testing at the end of each fiscal year.If the operational performance of an acquired entity fails to meet expectations a goodwill impairment may be triggered –
resulting in a direct hit to current-period earnings and potentially impacting shareholder equity and market valuation. To
address this risk the Company has further enhanced its post-acquisition management system. Through strategic business
integration resource consolidation and targeted management incentives the Company aims to improve the operational
performance of acquired entities. Additionally the Company exercises prudence in evaluating the valuation rationale of new
acquisition targets striving to minimize the risk of goodwill impairment and its downstream effects on financial statements.
(8) Risk of inability to recover the remaining compensation from the Winner investment project in Heyuan and
countermeasures
Due to planning adjustments to the Heyuan Station forecourt and the High-Speed Rail New Town associated with the
Ganzhou-Shenzhen
high-speed railway the Agreement on the Investment and Construction of Medical Kit and Cotton-Based Daily Necessities
Production Project signed between the Company and the People’s Government of Zijin County Heyuan City in 2016 could
not be executed. In November 2019 the Ganjiang New Area International Arbitration Court ruled to terminate the agreement
ordering the Zijin County Government to compensate the Company in the amount of RMB550 million payable in two
installments by December 31 2019 and February 29 2020 respectively. As of the end of the Reporting Period the Company
had received a refund of RMB3 million for the land transfer deposit and RMB334.5 million in compensation. However
the remaining balance of approximately RMB215 million is at risk of nonrecovery. The Company is actively maintaining
communication and consultation with the local government and continues to pursue the recovery of the remaining
compensation.XII. Record of Investor Relations Activities Including Research Visits
Communications and Interviews during the Reporting Period
√ Applicable □N/A
Main topics discussed
Reception Reception Reception Type of Index of basic
Visitor and materials
date location method visitor research visit
provided
235 institutional investors such as
Details are available
China Asset Management Bosera
Business overview on the interactive
January 17 Headquarters Phone Asset Management Bank of
Institution and operating platform of
Meeting Room communication Communications Schroder Fund
performance Shenzhen Stock
Management and Minsheng
Exchange
Royal Fund
Details are available
18 institutional investors such
Business overview on the interactive
February Headquarters as Southern Asset Management
Field visit Institution and operating platform of
19 Meeting Room and CITIC-Prudential Asset
performance Shenzhen Stock
Management
Exchange
70Section III Management Discussion and Analysis Main topics discussed
Reception Reception Reception Type of Index of basic
Visitor and materials
date location method visitor research visit
provided
143 institutional investors Details are available
P5W Roadshow
such as Fullgoal Fund Business performance on the interactive
May 7–8 Hall; Other; Field
Institution Management Orient Securities for FY2024 platform of
Headquarters visit
Asset Management GF Fund and Q1 Shenzhen Stock
Meeting Room
Management and Springs Capital Exchange
Details are available
23 institutional investors such
Teleconference; Phone Business overview on the interactive
May 28–30 as China Merchants Fund
Headquarters Communication; Institution and operating platform of
Management and Aeon Insurance
Conference Room Field visit performance Shenzhen Stock
Asset Management
Exchange
194 institutional investors such
Details are available
as Harvest Fund Management
Business overview on the interactive
June 24 Phone China Merchants Fund
Institution and operating platform of
Teleconference communication Management Huatai-PineBridge
performance Shenzhen Stock
and Caitong Securities Asset
Exchange
Management
139 institutional investors such Details are available
as Bank of Communications on the interactive
August 22 Headquarters Phone H1 operating
Institution Schroder Fund Management platform of
Meeting Room communication performance
Harvest Fund Management and Shenzhen Stock
CINDA Fund Exchange
167 institutional investors such Details are available
Operating
as Fullgoal Fund Management on the interactive
October 28 Headquarters Phone performance for the
Institution Southern Asset Management platform of
Meeting Room communication first three quarters of
and Invesco Great Wall Fund Shenzhen Stock
Management Exchange
XIII. Establishment and Implementation of Market Capitalization Management
Systems and Valuation Enhancement Plans
Has the Company established a market capitalization management system
√ Yes □No
For the further standardization of its market capitalization management practices the Company has formulated the Market
Capitalization Management System of Winner Medical Co. Ltd. to promote the enhancement of investment value increase
investor returns and protect the legitimate rights and interests of the Company investors and other stakeholders. This
system was developed in accordance with the relevant provisions of the Company Law Securities Law Opinions of the
State Council on Strengthening Supervision to Prevent Risks and Promote High-Quality Development of the Capital Market
the Measures for the Administration of Information Disclosure by Listed Companies and Guideline on the Supervision of
Listed Companies No. 10 – Market Capitalization Management and was reviewed and approved at the 6th meeting of the 4th
session of the Board of Directors.Has the Company disclosed a valuation enhancement plan
□Yes √ No
71XIV. Implementation of the “Dual Improvement of Quality and Return” Action Plan
Has the Company disclosed the “Dual Improvement of Quality and Return” action plan announcement
√ Yes □NoThe Company has actively responded to the policy guidance of “activating the capital market and boosting investorconfidence” and has deeply implemented the “Dual Improvement of Quality and Return” action plan. Focusing on high-
quality development of its core business the Company has carried out governance standardization compliance-based
information disclosure and a focus on investor returns effectively fulfilling its responsibilities as a listed company
In terms of high-quality development of core business the Company operates as a holistic health enterprise synergisticallyconverging medical innovation and consumer wellness ecosystems. With “Caring Health Cherishing Life and Protectingthe Environment for A Better World” as its vision Winner Group owns two core brands “Winner Medical” and “Purcotton”
covering multiple segments including wound care infection protection operating room consumables personal care home
care maternal and infant care and home textiles. During the Reporting Period the Company’s medical consumables business
saw steady growth in the revenue of its regular products while Purcotton achieved good business growth. The number of
patents and the number of medical product certifications significantly increased.In terms of corporate governance and social responsibility the Company has continuously optimized its corporate governance
structure improved its internal control systems and strengthened risk prevention mechanisms providing a solid guarantee
for high-quality development. For consecutive years the Company has received the “Best Practice for Board Office”
and “ESG Excellent Practice Case for Listed Companies” awards from the China Association for Public Companies
and was recognized as a “Best Practice Case for the Board of Directors of Listed Companies”. Since its listing
the Company has continuously and voluntarily disclosed its Corporate Social Responsibility Report and Environmental
Social and Governance Report comprehensively showcasing the effectiveness of its practices in corporate governance and
social responsibility. As a participant of the United Nations Global Compact the Company actively practices sustainabledevelopment concepts with its relevant practices selected as a “2021 Best Practice Case for Chinese Enterprises by theUnited Nations Global Compact”.In terms of high-quality information disclosure the Company strictly fulfills its information disclosure obligations in
accordance with the requirements of securities laws and regulations actively builds investor communication and interaction
platforms and continuously improves the breadth depth and timeliness of its disclosures. The Company has been selected
for the compilation of outstanding cases in the annual report of companies listed on the GEM of SZSE for consecutive years
and has been rated “A” in the information disclosure assessment by the SZSE for all full years since its listing.In terms of investor returns the Company’s total cumulative cash dividend for amounted to RMB437 million (tax
inclusive) accounting for 56.87% of the net profit attributable to ordinary shareholders of the listed company for the year
which includes (1) cash dividend of RMB262 million (tax inclusive) under the interim profit distribution plan
(already implemented); (2) proposed cash dividend of RMB175 million (tax inclusive) in the annual profit distribution
plan subject to approval by the general meeting. Since its listing in September 2020 up to the date of the Report the
Company has cumulatively implemented cash dividends of RMB3.049 billion (including the proposed amount for ) and
repurchased shares worth RMB695 million totaling RMB3.744 billion accounting for 105.21% of the net proceeds from the
initial public offering.
72Section IV Environmental Social and Corporate Governance Section IV
Environmental
Social and Corporate Governance
73I. Basic Status of Corporate Governance
In strict accordance with the requirements of the Company Law the Securities Law the Guidelines for the Governance of
Listed Companies the Rules for the Listing of Stocks on the Growth Enterprise Market of the Shenzhen Stock Exchange the
Guidelines for the Self-regulatory Supervision of Listed Companies on the Shenzhen Stock Exchange No. 2 – Standardized
Operation of Listed Companies on the Growth Enterprise Market and other relevant laws and regulations promulgated by the
China Securities Regulatory Commission (CSRC) and the Shenzhen Stock Exchange (SZSE) the Company formulates the
Articles of Association and other internal control rules and regulations to regulate the Company’s conducts. The Company’s
governance structure is in line with the relevant regulatory requirements of the CSRC.
1. Shareholders and shareholders’ meeting
In strict accordance with the Company Law the Securities Law the Articles of Association and other provisions the
Company standardizes the procedures for convening holding and voting at shareholders’ meetings treats all investors
equally so that they can fully exercise their rights and effectively protects the rights and interests of small and medium-sized
shareholders. The Company hires lawyers to attend shareholders’ meetings without voting rights and issue legal opinions
on the convening and voting procedures of shareholders’ meetings to fully respect and safeguard the legitimate rights and
interests of all shareholders.
2. The Company the controlling shareholders and actual controller
The Company has independent and complete main business and independent operation capabilities and is independent of
the controlling shareholders and actual controller in terms of personnel assets business management organization and
financial accounting system and can operate independently manage independently and assume responsibilities and risks
independently. The controlling shareholders and actual controller of the Company can exercise their rights and bear the
corresponding obligations in accordance with the law. During the Reporting Period there were no acts directly or indirectly
interfering with the Company’s decision-making and business activities and using their controlling position to infringe on the
interests of other shareholders beyond the authorization of the shareholders’ meeting and the Board of Directors and there
was no adverse effect on the Company’s governance structure independence etc.
3. Directors and Board of Directors
The Directors of the Company do not fall under any circumstances that are not allowed to serve as directors of the Company
as stipulated in the Company Law. Their appointments and dismissals strictly comply with the approval procedures of the
Board of Directors and the shareholders’ meeting. There is no conflict with relevant laws regulations or the Articles of
Association. All Directors worked conscientiously and diligently during their tenure and were able to continuously pay
attention to the Company’s operating conditions actively participate in relevant training and improve the standardized
operation level; actively participate in the Board meetings give full play to their respective professional expertise make
prudent decisions and safeguard the interests of the Company and all shareholders.In terms of proposal review and closed-loop management the Board of Directors of the Company has established astandardized mechanism characterized by “thorough communication before the meeting in-depth discussion during themeeting and efficient implementation after the meeting.” For major matters such as profit distribution investment and
mergers & acquisitions pre-meeting communication sessions are convened to fully collate relevant information enabling
directors to have a comprehensive understanding of the matters and better leverage the functions of independent directors and
special committees. The procedures for convening and holding the Board meetings of the Company all meet the requirements
of relevant regulations; the records of previous Board meetings are true accurate complete and safely kept; the resolutions
74Section IV Environmental Social and Corporate Governance of the Board meetings are fully accurate and promptly disclosed. The Board has a Strategy and Sustainable Development
Committee a Nomination Committee a Remuneration and Appraisal Committee and an Audit Committee.
4. Performance evaluation and incentive and restraint mechanism
Through performance appraisal the Company effectively makes comprehensive evaluation of each employee to further
understand their work ability and expertise and effectively adjust the appropriate position and achieve the goal of
performance appraisal. The Company is gradually improving the performance appraisal mechanism and the compensation of
the Company’s senior and middle management is linked to the Company’s operating performance indicators. The Company
has established an incentive system for corporate performance evaluation. The standards and procedures of performance
evaluation for Directors and senior management are fair and transparent their income is linked to the operating performance
of the Company and the employment of senior management is open and transparent in line with laws and regulations.
5. Information disclosure and transparency
During the Reporting Period the Company disclosed the corporate information in a true accurate complete timely and fair
manner in strict accordance with relevant laws and regulations and the requirements of the Articles of Association and the
Information Disclosure Management System. The Company has designated China Securities Journal Shanghai Securities
News Securities Times and Securities Daily as the designated paper media for information disclosure of the Company and
the CNINFO.com as the website specified for the information disclosure to ensure that all shareholders have fair access to the
Company’s information. The Company has been rated A in the information disclosure assessment by SZSE for each full year
after its listing.
6. Investor relations management
Following the requirements of relevant laws and regulations and the Investor Relations Management System the Company
designates the Board Secretary as the person in charge of investor relations management responsible for coordinating
investor relations receiving shareholders’ visits answering investors’ inquiries providing investors with the information
disclosed by the Company etc. The Company responds to investors’ inquiries by phone email investor relations interactive
platform investor reception day etc. to strengthen information communication promote benign interactions with investorsand effectively improve the Company’s transparency. The Company has been awarded the “Best Practice Case of AnnualPerformance Briefing” the “Best Practice in Investor Relations Management” and other honors by the China Association for
Public Companies for years.
7. Stakeholders
The Company fully respects and safeguards the legitimate rights and interests of relevant stakeholders realizes the
coordination and balance of the interests of shareholders employees doctors and patients society and other parties and pays
attention to environmental protection and actively participates in public welfare undertakings while realizing the sustainable
and healthy development of the Company and the interests of shareholders. The Company has been recognized as an
“Excellent ESG Practice Case of Listed Companies” or the “Best Practice Cases in Sustainability of Listed Companies” by
the China Association for Public Companies for years.
8. Establishment and implementation of internal audit system
An audit committee is set up under the Board of Directors with an internal audit system in place which is responsible for
the communication supervision meeting organization and verification for internal and external audits of the Company. The
75Audit Committee has an Internal Audit Department as its daily office which independently exercises its authority under the
leadership of the Audit Committee to inspect and supervise the Company’s business operations risk management internal
control and financial information.Whether there are any material differences between the actual status of corporate governance and the laws administrative
regulations and regulations of CSRC on corporate governance of listed companies
□ Yes √ No
There is no material difference between the actual status of corporate governance and the laws administrative regulations and
regulations of CSRC on corporate governance of listed companies.II. Independence of the Company from Its Controlling Shareholders and Actual
Controller in terms of Guaranteeing the Company’s Assets Personnel Finance
Organizations Business etc.Since its establishment the Company has operated in strict accordance with the Company Law the Securities Law and
other relevant laws regulations and the Articles of Association and has maintained good independence of its controlling
shareholders and actual controller in terms of assets personnel finance organizations business etc. and has had a complete
business system and the ability to operate independently in the market.
1. Asset independence
The Company’s assets are independent and complete with clear ownership. It has an independent production system
auxiliary production system and supporting facilities. It has legal ownership of the plant land equipment trademarks
patents non-patented technologies and other assets related to production and operation. It has complete control over all of its
assets. There is no act of controlling shareholders or actual controller occupying the Company’s assets.
2. Personnel independence
The Company has signed labor contracts with employees has independent labor personnel and compensation and benefits
systems and maintains independence from controlling shareholders actual controller and other enterprises under its control.The Company has established a sound corporate governance structure and Directors and senior management are legally
appointed in strict accordance with the relevant provisions of the Company Law and the Articles of Association. The general
manager deputy general manager chief financial officer and Board Secretary of the Company do not hold positions other
than directors supervisors and limited partners in the controlling shareholders actual controller and other enterprises under
their control and do not receive salaries from the controlling shareholders actual controller and other enterprises under their
control. The Company’s financial personnel do not work part-time in the controlling shareholders actual controller and other
enterprises under their control.
76Section IV Environmental Social and Corporate Governance 3. Financial independence
The Company has established an independent finance department with full-time financial personnel and has established an
independent financial accounting system. The Company can make financial decisions independently and has a standardized
financial accounting system. There is no situation where the controlling shareholders interfere with the use of the Company’s
funds. The Company has a separate bank account and there is no sharing of the bank account with the controlling
shareholders the actual controller and other enterprises under their control. As an independent taxpayer the Company
independently files tax returns and fulfills payment obligations in accordance with the law and there is no mixed tax payment
with the controlling shareholders actual controller and other enterprises under their control. The financial operations of the
Company are independent of the controlling shareholders the actual controller and other enterprises under their control.
4. Organization independence
In strict accordance with the relevant provisions of the Company Law and the Articles of Association the Company has
established the shareholders’ meeting and the Board of Directors and has formed a sound corporate governance structure
and a standardized operating system. Based on the needs of production and operation the Company has set up dedicated
offices and production and operation organizations each with its own operation and management authorities. It has complete
procurement R&D production and sales systems and supporting departments. The Company’s production operation and
office facilities are strictly separated from the controlling shareholders actual controller and other enterprises under their
control. There is no mixed operation or joint office arrangement with the controlling shareholders actual controller and other
enterprises under their control.
5. Business independence
The Company possesses the necessary qualifications for its operations boasting an independent and comprehensive
business system information system and management system. Additionally it has independent and comprehensive research
and development production capabilities and procurement and sales business systems. The business of the Company
is independent of the controlling shareholders actual controller and other enterprises under their control. There is no
dependence on the controlling shareholders actual controller and other enterprises under their control. There is no horizontal
competition or unfair related transaction with the controlling shareholders actual controller and other enterprises under their
control.III. Horizontal Competition
□Applicable √ N/A
IV. The Company Has a Differentiated Voting Rights Structure
□Applicable √ N/A
V. Corporate Governance Practices of Red Chip Companies
□Applicable √ N/A
77VI. Directors and Senior Management
1. Basic information
Number Number Number Number
Other
of shares of shares of shares of shares
increase Reason for
Status of End date held at the increased decreased held at
Name Gender Age Position Start date of tenure and change in
service of tenure beginning of in current in current the end of
decrease shares
the period period period the period
(shares)
(shares) (shares) (shares) (shares)
Chairman
Li Jianquan Male 69 and General Incumbent May 18 2015 Incumbent 0 0 0 0 0.00
Manager
Director Chief Conversion
Financial of Indirect
Fang Xiuyuan Male 58 Officer and Incumbent May 18 2015 Incumbent 116000 0 0 2654335 2770335 Shareholding
Deputy General into Direct
Manager Shareholding
Conversion
of Indirect
Zhang Yan Female 42 Director Incumbent August 12 2024 Incumbent 5000 0 0 124264 129264 Shareholding
into Direct
Shareholding
Liao Meizhen Female 44 Director Incumbent August 12 2024 Incumbent 0 0 0 0 0
Independent
Chen Junfa Male 61 Incumbent August 12 2024 Incumbent 0 0 0 0 0
Director
Independent
Wang Zhifang Female 58 Incumbent August 12 2024 Incumbent 0 0 0 0 0
Director
Yang Independent
Male 59 Incumbent August 12 2024 Incumbent 0 0 0 0 0
Xiangliang Director
Deputy General
Yan Xia Female 50 Incumbent November 12 Incumbent 0 0 0 0 0
Manager
Deputy General
Liao Guanlai Male 44 Incumbent August 12 2024 Incumbent 0 0 0 0 0
Manager
Conversion
Deputy General of Indirect
Chen Huixuan Female 44 Manager and Incumbent May 18 2015 Incumbent 30720 0 0 434248 464968 Shareholding
Board Secretary into Direct
Shareholding
Total -- -- -- -- -- -- 151720 0 0 3212847 3364567 --
Were there any departures of Directors during their term of office or dismissals of senior management during the Reporting
Period
□ Yes √ No
78Section IV Environmental Social and Corporate Governance Change of Directors and senior management
√ Applicable □N/A
Name Position Type Date Reason
The Board of Directors of the Company
Yan Xia Deputy General Manager Appointed November 12 agreed to appoint Ms. Yan Xia as Deputy
General Manager of the Company
2. Biography
Professional background and main work experience of incumbent Directors and senior management of the Company and
their main responsibilities in the Company
(1) Board members
Mr. Li Jianquan born in 1957 a Hong Kong resident with Chinese nationality obtained a Master of Business Administration
from Tsinghua University. He created two brands of “Winner Medical” and “Purcotton” and currently serves as the Chairman
and General Manager of Winner Medical Co. Ltd. Chairman and General Manager of Shenzhen Purcotton Technology Co.Ltd. and he is the founder president of the Medical Dressing Branch of the China Medical Insurance Chamber of Commerceand vice chairman of the China Cotton Association. He was honored as an “Advanced Individual in Guangdong Province’sFight Against the COVID-19 Epidemic” from the Guangdong Provincial People’s Government and received the honorarytitle of “Innovative Entrepreneur and Role Model in the 40th Anniversary of the Founding of Shenzhen Special EconomicZone” from the Shenzhen Municipal Party Committee and the Shenzhen Municipal People’s Government in 2020.Mr. Fang Xiuyuan born in 1968 with Chinese nationality without permanent residency abroad a Chinese Certified Public
Accountant and a Master of Business Administration (MBA) from the Chinese University of Hong Kong (Shenzhen). From
1988 to 1998 he served as the Accountant and Chief of Finance Department of Hubei Medical and Health Products Import
and Export Corporation; the Chief Financial Officer of Zhuhai Hongqiao High-Tech Co. Ltd. from 1998 to 1999; he has been
the Executive Director Deputy General Manager and Chief Financial Officer of Winner Medical Co. Ltd. since 2000. Mr.Fang Xiuyuan currently serves as the Chairman of Zhejiang Longterm Medical Technology Co. Ltd. a director of Shenzhen
Purcotton Technology Co. Ltd. Shenzhen Qianhai Purcotton E-Commerce Co. Ltd. Winner Medical (Huanggang) Co.Ltd. Winner Medical (Chongyang) Co. Ltd. Winner Medical (Jiayu) Co. Ltd. Winner Medical (Jingmen) Co. Ltd. Winner
Medical (Tianmen) Co. Ltd. and Winner Medical (Wuhan) Co. Ltd. respectively and Yichang Winner Medical Textile
Co. Ltd. and an Executive Partner of Xiamen Leyuan Investment Partnership (Limited Partnership). Mr. Fang Xiuyuan is
currently a member of the 7th Shenzhen Standing Committee of the CPPCC and Vice Chairman of the Federation of Industry
and Commerce of Shenzhen Longhua District (General Chamber of Commerce).Ms. Zhang Yan born in 1984 with Chinese nationality without permanent residency abroad has a bachelor’s degree. She
joined the Company in July 2006 and successively served as the executive deputy general manager of Winner Medical
(Jingmen) Co. Ltd. the head of the supply chain at Shenzhen Purcotton Technology Co. Ltd. and the head of the supply
chain at Winner Medical Co. Ltd. She served as the rotating CEO of the Company’s medical sector since April 2022
to December 31 2024. Since she has been the Vice President of Domestic Marketing of Winner Medical and
concurrently the executive director and legal representative of Winner Guilin Latex Co. Ltd. and Winner (Jingzhou) Latex
Products Co. Ltd. and a Director of Chengdu Winner Likang Medical Products Co. Ltd.
79Ms. Liao Meizhen born in 1982 with Chinese nationality without permanent residency abroad has a master’s degree.
From 2004 to 2018 she successively served as the sales manager regional manager project manager and sales director
of Guangzhou Procter & Gamble Co. Ltd. From 2013 to 2016 she served as the global sales director of the SK-II market
strategy development department at Procter & Gamble’s Asia Pacific headquarters in Singapore. From 2016 to 2018 she
served as the senior director of Olay oil sales at Procter & Gamble (China) Marketing Co. Ltd. From 2018 to 2021 she
served as the general manager of skin care sales in China at Procter & Gamble (China) Marketing Co. Ltd. Ms. Liao joined
Purcotton in 2021 as the vice president of Shenzhen Purcotton Technology Co. Ltd. and was appointed senior vice president
of Purcotton in and responsible for the Merchandising Center and the Sales Center.Mr. Chen Junfa born in 1965 with Chinese nationality without permanent residency abroad graduated from Nankai
University a master’s degree in economics. From 1988 to 1990 he worked in Wuhan Iron and Steel Co. Ltd. as a technical
worker; from 1993 to 1997 he worked in auditing asset appraisal consulting and other work at Shenzhen Zhonghua
Accounting Firm as a project manager; from 1994 to 2009 he worked in asset appraisal consulting and other work at
Shenzhen Weiming Asset Appraisal Firm (renamed Shenzhen Jinkai Zhongqinxin Asset Appraisal Co. Ltd. in 2008)
successively serving as a senior manager assistant director director and deputy general manager chairman and general
manager general manager and other positions; from 2010 to 2016 he worked in asset appraisal consulting and other work
at Shenzhen Dezhengxin International Asset Appraisal Co. Ltd. as a deputy general manager; since April 2016 he has been
engaged in asset appraisal consulting and other work at Shenzhen Pengxin Asset Appraisal Land and Real Estate Appraisal
Co. Ltd. successively serving as a deputy general manager director and other positions. He is currently an independent
director of Shenzhen Yitoa Intelligent Control Co. Ltd.Ms. Wang Zhifang born in 1968 with Chinese nationality without permanent residency abroad graduated from Nankai
University in 1989 graduated from the Institute of Finance of the People’s Bank of China in 1992 obtaining a master’s
degree in economics; senior management master’s degree in business administration at Cheung Kong Graduate School
of Business. From 1992 to 2004 she served as deputy manager of the planning department and the general manager of
investment management department at China Huaneng Finance Co. Ltd.; from 2004 to 2023 she served as manager of
investment management department deputy general manager and member of the Party group of Huaneng Capital Services
Co. Ltd. She served as the chairman of Tiancheng Leasing Co. Ltd. and the chairman of Huaneng Invesco Private Equity
Management Company Ltd. from 2014 to 2023.Mr. Yang Xiangliang born in 1967 with Chinese nationality without permanent residency abroad. He graduated from
Huazhong University of Science and Technology in 1995 with a Ph.D. in Biomedical Engineering. From 1995 to 2003 he
was a lecturer associate professor professor and doctorial tutor of the Department of Chemistry at Huazhong University
of Science and Technology. Since 2003 he has been a professor and doctorial tutor of the School of Life Sciences and
Technology at Huazhong University of Science and Technology. From 2007 to 2019 he served as the executive vice
president of the School of Life Sciences and Technology at Huazhong University of Science and Technology. Since 2009
he has been serving as the director of the National Engineering Research Center for Nanomedicine. He is the chief scientistof Project 973 a recipient of a special allowance from the State Council and a leader of the innovation team in “OncologyNanomedicine Technology” a key area supported by the Ministry of Science and Technology. He is a member of the overall
expert group of the National Key Research and Development Program Vice Chairman of the Chinese Society for Biomedical
Engineering Nanomedicine and Engineering Branch and the Vice Chairman of the Chinese Pharmaceutical Association
Nanomedicine Professional Committee etc. He is mainly engaged in Nanomedicine technology research. He is currently an
independent director of MGI Tech Co. Ltd.
80Section IV Environmental Social and Corporate Governance (2）Other senior management
Ms. Yan Xia born in 1975 with Chinese nationality is a Master of Finance EMBA from Tsinghua University and a Master
of Medicine from Shandong Second Medical University. From 2001 to 2016 she served in various roles at GE Healthcare
including Global CT Product Manager and General Manager of Surgical and Interventional Business for Greater China; from
2017 to 2018 she served as Vice President of Thermo Fisher Scientific (China); from 2018 to 2020 she served as President
and Director of Beijing Wandong Medical Technology Co. Ltd.; from 2021 to September she served as Senior Vice
President and Director at WEGO Group and Vice Chairman of Shandong WEGO Medical Polymer Products Co. Ltd.; in
she joined Winner Medical Co. Ltd. and currently serves as the Rotating CEO of the Medical Sector. Ms. Yan has over
25 years of experience in product sales operations and brand management in the medical device industry.
Ms. Chen Huixuan born in 1982 with Chinese nationality without permanent residency abroad has a master’s degree in
Finance from the University of Glasgow UK. From 2007 to 2009 she served as an analyst assistant of Brean Murray Carret
& Co.; from 2009 to 2015 she served as the manager of the Investment Management Department of Winner Industries
(Shenzhen) Co. Ltd.; since 2015 she has served as the deputy general manager and secretary of the Board of Directors of the
Company. She is also an executive partner of Xiamen Huikang Investment Partnership (Limited Partnership) and a member
of the Third Session of the Investor Relations Committee of the China Association for Public Companies and a deputy
chairman of the Investor Relations Committee of the Shenzhen Association for Public Companies. She has won the honor
of “Board Secretary Level 5A Performance Evaluation” from the China Association for Public Companies for four years in
a row from 2022-a “Golden Board Secretary” by New Fortune for four consecutive terms since the 18th edition and
received the “Best Board Secretary” award from New Fortune Magazine in .Mr. Liao Guanlai born in 1982 with Chinese nationality a permanent resident of the Hong Kong Special Administrative
Region holds a bachelor’s degree in business administration and a bachelor’s degree in software engineering from the
University of Hong Kong. From 2006 to 2008 he served as an analyst at McKinsey & Company; from 2008 to 2011 he
served as investment manager at Morgan Stanley Infrastructure Fund; from 2011 to 2018 he served as vice president of
Bain Capital Private Equity China; from 2018 to 2020 he served as vice president of Shenzhen Neptunus Group Co. Ltd.;
he joined Winner Medical Co. Ltd. in 2020 and currently serves as vice president of investment at the Company. He also
currently serves as a director of Zhejiang Longterm Medical Technology Co. Ltd. Winner Medical (Hunan) Co. Ltd. and
Global Resources International Inc.The controlling shareholder and actual controller serving concurrently as the chairman and general manager of the listed
company
√ Applicable □N/A
The Company strictly follows the provisions of the Company Law and the Articles of Association to clearly define the
boundary of authority between the Board of Directors and the General Manager. As the decision-making body the Board
of Directors is responsible for formulating the Company’s development strategies and deliberating and deciding on major
matters. The General Manager is responsible for implementing the resolutions of the Board of Directors organizing and
carrying out daily operations and management and executing specific business operations and management tasks.The controlling shareholder and actual controller serving concurrently as the Chairman and General Manager helps improve
the Company’s decision-making efficiency and strengthen strategic execution. With their profound understanding of the
Company’s industry and business they are able to coordinate strategy formulation and operational execution enhance
overall operating efficiency and promote the Company’s long-term stable development. This arrangement is aligned with
the Company’s actual operational needs and does not harm the interests of the Company or its minority shareholders. The
Company strictly maintains good independence of its controlling shareholders and actual controller in terms of personnel
81assets finance organizations business etc. and has had a complete business system and the ability to operate independently
in the market.Positions held in shareholder entities
√ Applicable □N/A
Start Whether to receive
Name of Position in End date of
Name of shareholder entity date of remuneration or allowance
incumbent shareholder entity tenure
tenure in shareholder entity
April 8
Li Jianquan Winner Group Limited Director Incumbent No
2003
Xiamen Leyuan Investment May 2
Fang Xiuyuan Executive Partner Incumbent No
Partnership (Limited Partnership) 2013
Xiamen Huikang Investment May 2
Chen Huixuan Executive Partner Incumbent No
Partnership (Limited Partnership) 2013
Note on positions held in shareholder entities No
Positions held in other companies
√ Applicable □N/A
Whether
to receive
Name of Position in other End date
Name of other entity Start date of tenure remuneration or
incumbent entity of tenure
allowance in other
entity
Li Jianquan Glory Ray Holdings Limited Director April 11 2012 Incumbent No
Li Jianquan Glory Ray Limited Director May 4 2012 Incumbent No
Chairman General
Li Jianquan Shenzhen Purcotton Technology Co. Ltd. December 7 2009 Incumbent No
Manager
Shenzhen Qianhai Purcotton E-Commerce Co.Li Jianquan Chairman July 21 2015 Incumbent No
Ltd.Li Jianquan Winner Medical Malaysia Co. Ltd. Director July 17 2013 Incumbent No
Li Jianquan Winner Medical (Hong Kong) Limited Director January 14 2008 Incumbent No
Li Jianquan Fanyu Innovation Holding (Shenzhen) Co. Ltd. Supervisor September 18 2021 Incumbent No
Fang Xiuyuan Shenzhen Purcotton Technology Co. Ltd. Director December 7 2009 Incumbent No
Shenzhen Qianhai Purcotton E-Commerce Co.Fang Xiuyuan Director July 21 2015 Incumbent No
Ltd.Fang Xiuyuan Winner Medical (Huanggang) Co. Ltd. Director January 14 2005 Incumbent No
Fang Xiuyuan Winner Medical (Chongyang) Co. Ltd. Director November 13 2001 Incumbent No
82Section IV Environmental Social and Corporate Governance Whether
to receive
Name of Position in other End date
Name of other entity Start date of tenure remuneration or
incumbent entity of tenure
allowance in other
entity
Fang Xiuyuan Winner Medical (Jiayu) Co. Ltd. Director February 20 2001 Incumbent No
Fang Xiuyuan Winner Medical (Jingmen) Co. Ltd. Director December 15 1995 Incumbent No
Fang Xiuyuan Yichang Winner Medical Textile Co. Ltd. Director April 22 1999 Incumbent No
Fang Xiuyuan Winner Medical (Tianmen) Co. Ltd. Director February 23 2001 Incumbent No
Fang Xiuyuan Winner Medical (Wuhan) Co. Ltd. Director January 23 2017 Incumbent No
Fang Xiuyuan Winner Medical (Hong Kong) Limited Director January 14 2008 Incumbent No
Fang Xiuyuan Zhejiang Longterm Medical Technology Co. Ltd. Chairman May 10 2022 Incumbent No
Zhang Yan Winner Guilin Latex Co. Ltd. Executive Director May 24 2023 Incumbent No
Zhang Yan Winner (Jingzhou) Latex Products Co. Ltd. Executive Director July 10 2023 Incumbent No
Chengdu Winner Likang Medical Products Co.Zhang Yan Director November 19 Incumbent No
Ltd.Zhang Yan Wuhan Winner Digital Technology Co. Ltd. Executive Director March 21 2024 Incumbent No
Beijing Daozecheng Investment Management
Chen Junfa Supervisor June 1 2012 Incumbent No
Co. Ltd.Chen Junfa Shenzhen Yitoa Intelligent Control Co. Ltd. Independent Director November 1 2023 Incumbent Yes
Shenzhen Pengxin Asset Appraisal Land and Director Deputy
Chen Junfa April 1 2016 Incumbent Yes
Real Estate Appraisal Co. Ltd. General Manager
Yang Xiangliang Huazhong University of Science and Technology Professor January 1 2003 Incumbent Yes
National Engineering Research Center for
Yang Xiangliang Director January 1 2009 Incumbent No
Nanomedicine
Liao Guanlai Zhejiang Longterm Medical Technology Co. Ltd. Director May 1 2022 Incumbent No
Liao Guanlai Winner Medical (Hunan) Co. Ltd. Director July 1 2022 Incumbent No
Liao Guanlai Global Resources International Inc. Director September 20 2024 Incumbent No
Note on positions held in other entities No
Penalties imposed by securities regulators in the past three years for incumbent Directors and senior management of the
Company and those who departed during the Reporting Period
□Applicable √ N/A
3. Remuneration of Directors and senior management
Decision-making procedures and basis for determining and the actual payment of remuneration of Directors and senior
management
83The remuneration of Directors and senior management consists of salaries allowances and bonuses. The Company’s Board
of Directors has a Remuneration and Appraisal Committee which is responsible for formulating performance evaluation
standards procedures systems and major programs and systems of rewards and penalties. The remuneration plans of
Directors and senior management have all undergone the corresponding review procedures in accordance with the Articles of
Association the Remuneration Management System and other corporate governance systems.Remuneration of Directors and senior management during the Reporting Period
Unit: RMB0’000
Total pretax Whether to get
Status of remuneration remuneration from
Name Gender Age Position
service received from related parties of
the Company the Company
Li Jianquan Male 69 Chairman and General Manager Incumbent 368.13 No
Director Deputy General Manager
Fang Xiuyuan Male 58 Incumbent 246.79 No
and Chief Financial Officer
Zhang Yan Female 42 Director Incumbent 137.25 No
Liao Meizhen Female 44 Director Incumbent 427.33 No
Chen Junfa Male 61 Independent Director Incumbent 18.00 No
Wang Zhifang Female 58 Independent Director Incumbent 18.00 No
Yang Xiangliang Male 59 Independent Director Incumbent 18.00 No
Yan Xia Female 50 Deputy General Manager Incumbent 53.74 No
Liao Guanlai Male 44 Deputy General Manager Incumbent 350.16 No
Deputy General Manager and Board
Chen Huixuan Female 44 Incumbent 133.76 No
Secretary
Total -- -- -- -- 1771.17 --
Note: The statistical scope of the above remuneration data is the remuneration received during the period of serving as a
member of the senior management. Ms. Yan Xia began to assume senior management positions within the Company on
November 12 Assessment basis for the remuneration actually received by all Directors and
KPI assessment performance of duties
senior management at the end of the Reporting Period
Assessment of the remuneration actually received by all Directors and senior
Achieved
management at the end of the Reporting Period.Deferred remuneration arrangements for the remuneration actually received by
No
all Directors and senior management at the end of the Reporting Period.Clawback and forfeiture of the remuneration actually received by all Directors
No
and senior management at the end of the Reporting Period.
84Section IV Environmental Social and Corporate Governance Other information
□Applicable √ N/A
VII. Directors’ Performance of Duties during the Reporting Period
1. Directors’ attendance at Board Meetings and Shareholders’ Meetings
Directors’ attendance at Board Meetings and Shareholders’ Meetings
Number of Number Number Whether Non-
Number of Required Number of Number of
In-person of Remote of Proxy In-Person
Name of Attendance at Board Absence Attendance at
Attendance Attendance Attendance Attendance at
Director Meetings during the from Board Shareholders’
at Board at Board at Board Two Consecutive
Reporting Period Meetings Meetings
Meetings Meetings Meetings Board Meetings
Li Jianquan 4 4 0 0 0 No 2
Fang Xiuyuan 4 4 0 0 0 No 2
Zhang Yan 4 4 0 0 0 No 2
Liao Meizhen 4 4 0 0 0 No 2
Chen Junfa 4 4 0 0 0 No 2
Wang Zhifang 4 4 0 0 0 No 2
Yang Xiangliang 4 4 0 0 0 No 2
Note on non-in-person attendance at two consecutive Board meetings
No
2. Objections raised by Directors on relevant matters
Whether any Director raises any objections to the relevant matters of the Company
□ Yes √ No
During the Reporting Period no Director raised objections on relevant matters of the Company.
3. Other notes on Directors’ performance of their duties
Whether the suggestions made by any Directors were adopted by the Company
√ Yes □No
Notes on the adoption or rejection of any Directors’ suggestions to the Company
During the Reporting Period the Company’s Directors in strict accordance with the Company Law the Securities Law
other relevant laws and regulations and the Articles of Association faithfully and diligently performed their duties
actively attended relevant meetings on time and conscientiously reviewed proposals. Independent Directors maintained
communication with other Directors senior management and relevant personnel through telephone calls emails and on-
site visits. They actively learned about the Company’s production and operation status and financial situation and put
85forward proactive suggestions on the Company’s development strategy and improvement of corporate governance. They
also expressed their opinions and suggestions on the Company’s periodic reports selection of accounting firms and profit
distribution effectively ensuring the fairness and objectivity of the Board’s decisions. The Directors have performed their
duties diligently and conscientiously striving to safeguard the overall interests of the Company and the legitimate rights
and interests of the small and medium-sized shareholders and have played a positive role in the standardized operation and
healthy development of the Company.VIII. Performance of Special Committees under the Board of Directors during the
Reporting Period
Number Details of
Date of Important Opinions and
Name of Committee Member of Agenda Performance of Other Duties Objection
Meeting Suggestions
Meeting (if any)
Required the internal
Audit Committee of Considered the Internal
Chen Junfa audit department to Reviewed the Company’s
the Fourth Session January 10 Audit Work Report for Q4
Wang Zhifang 4 strengthen the audit financial data and related N/A
of the Board of the Internal Audit Work Plan
Zhang Yan of newly acquired written reports.Directors for Q1 and other matters
companies.Considered the Self-
Assessment Report on
Internal Control
the Q1 Internal Audit Work Had a thorough discussion
Report the Q2 Internal The internal audit work with the Company’s annual
Audit Committee of
Chen Junfa Audit Work Plan the Audit of the audit department audit
the Fourth Session April 23
Wang Zhifang Committee’s Evaluation of shall fully reflect the accountant internal audit N/A
of the Board of Zhang Yan the Performance of requirements of rules and department and finance
Directors
Accounting Firms in 2024 regulations. department on matters related
and the Fulfillment of to annual report.Supervision Duties and the
2024 Annual Report and its
Summary and other matters
When the audit
department audits
the Company’s Submitted written opinions on
Considered the Internal
Audit Committee of regular financial and each of the related proposals
Chen Junfa Audit Work Report for Q2
the Fourth Session August 19 accounting reports it is under consideration
Wang Zhifang the Internal Audit Work Plan N/A
of the Board of recommended that key standardized the content of
Zhang Yan for Q3 and the Interim
Directors audit matters and matters internal audit work plan and
Report and other matters
of concern to investors be work report.prioritized as key audit
areas.Considered the Internal
Audit Committee of Proposed relevant
Chen Junfa Audit Work Report for Q3 Provided suggestions and
the Fourth Session October suggestions for the
Wang Zhifang the Internal Audit Work Plan opinions on internal audit N/A
of the Board of 23 internal control of the
Zhang Yan for Q4 and the Report for work
Directors merged subsidiaries
Q3 of and other matters
86Section IV Environmental Social and Corporate Governance Number Details of
Date of Important Opinions and
Name of Committee Member of Agenda Performance of Other Duties Objection
Meeting Suggestions
Meeting (if any)
Ensured that the
remuneration levels
Remuneration Considered matters relating of non-independent
and Appraisal to the remuneration of non- Directors and senior
Wang Zhifang
Committee of the April 23 independent Directors and management were in Reviewed related written
Chen Junfa 3 N/A
Fourth Session senior management for 2024 line with the Company’s reports.Fang Xiuyuan
of the Board of and the remuneration plan operating performance
Directors for . and the requirements
of internal rules and
regulations.Considered the matter Ensured that the
Remuneration
relating to the achievement implementation of
and Appraisal
Wang Zhifang of unlocking conditions for the employee stock
Committee of the October Reviewed related written
Chen Junfa the second lock-up period ownership plan complied N/A
Fourth Session 13 reports
Fang Xiuyuan of the Company’s First with the requirements
of the Board of
Employee Stock Ownership of applicable laws and
Directors
Plan. regulations.Ensured that the
Remuneration Considered the matter
implementation of
and Appraisal relating to the grant of
Wang Zhifang the equity incentive
Committee of the November reserved restricted shares Reviewed related written
Chen Junfa plan complied with N/A
Fourth Session 10 to target participants of reports
Fang Xiuyuan the requirements of
of the Board of the 2024 Restricted Stock
applicable laws and
Directors Incentive Plan.regulations.Strategy and Social Li Jianquan
Actively monitored the
Responsibility Fang Xiuyuan Considered the Matters
Elevated sustainable fulfillment of social
Committee of the Zhang Yan 2 April 23 related to the 2024 Social
development to the level responsibility and the progress N/A
Fourth Session Liao Meizhen Environmental and
of corporate strategy. in the preparation of relevant
of the Board of Yang Governance Report
reports
Directors Xiangliang
Strategy and Social Li Jianquan Considered the matter
Implemented effective
Responsibility Fang Xiuyuan relating to the investment Conducted thorough
risk controls to ensure
Committee of the Zhang Yan November in and construction of a understanding and discussion
that projects achieved N/A
Fourth Session Liao Meizhen 10 production and sales base for of the background and content
their expected return
of the Board of Yang spunlace non-woven fabric of the projects.targets.Directors Xiangliang series products.Nomination Considered the matters Expressed recognition
Carefully reviewed the content
Committee of the Li Jianquan relating to the formulation of of the formulation of the
of the policies as well as the
Fourth Session of Yang November the Board Diversity Policy policies and extended
1 background and selection N/A
the Board of Xiangliang 10 and the appointment of a warm welcome to the
process of the proposed senior
Wang Zhifang senior management of the newly appointed senior
management.Directors Company. management.IX. Performance of Duties of the Audit Committee
Did the Audit Committee find any risks in the Company in its oversight activities during the Reporting Period
□ Yes √ No
The Audit Committee had no objections to the matters under its oversight during the Reporting Period.
87X. Details of Employees
1. Number professional composition and educational background of employees
Number of employees at the parent company at the end of the Reporting Period (person) 1056
Number of employees at major subsidiaries at the end of the Reporting Period (person) 14799
Total number of employees at the end of the Reporting Period (person) 15855
Total number of employees receiving compensation during the period (person) 15855
Number of retired employees for whom the parent company and major subsidiaries bear
504
expenses (person)
Professional composition
Types of profession Number of professionals (person)
Production staff 8508
Sales staff 3895
Technical staff 1323
Finance staff 198
Administrative staff 1931
Total 15855
Education
Degree of education Number
Master’s degree and above 341
Bachelor’s degree 2391
Below bachelor’s degree 13123
Total 15855
2. Remuneration policy
In order to fully back the Company’s strategy and business development and continuously stimulate employees’ initiative
breakthrough and value creation to drive ongoing performance growth the Company has further optimized its remuneration
incentive system as follows:
1) Continuous Optimization of Remuneration Structure to Strengthen Incentive Orientation
In the “fixed salary + bonus + long-term incentive” remuneration model will continue to be followed. Fixed salary will
gradually align with the market to ensure basic competitiveness. Bonuses will be allocated on a differentiated basis according
to performance contribution emphasizing value orientation — the greater the contribution the higher the income. Long-term
incentive is deeply linked to the Company’s long-term performance and an individual’s sustained contribution enhancing the
sense of responsibility and mission of core employees.
2)Differentiated Design of Variable Remuneration to Encourage High Goals and High Growth
Variable remuneration will be allocated based on both existing and incremental performance dimensions with greater
incentives for exceeding performance targets and achieving high growth enabling profit-sharing. The remuneration incentive
is fully aligned with both short-term breakthroughs and long-term success encouraging high goals high efficiency and high-
88Section IV Environmental Social and Corporate Governance quality development fostering a culture of ambition and success among teams.
3) Introduction of Performance Bonus Sharing System to Enhance Shared Responsibility of Management Team
For all employees a performance bonus sharing system will be introduced on top of the existing remuneration incentives.In particular the remuneration of the management team will be directly linked to the Company’s overall performance and
achievement of strategic goals. This further reinforces the sense of responsibility and long-term value orientation of the
senior management team deeply aligning management’s interests with the Company’s to jointly sustain growth.
4) Establishment of an Integrated Closed-Loop Performance Management System to Facilitate Strategy Execution
The “strategy-organization-individual” three-tier performance linkage mechanism has been strengthened. Annual company-
level strategic planning will be conducted through which organizational performance will be decoded. Individual
performance will be closely aligned with and derived from key indicators of organizational performance forming a closed-
loop management system marked by vertical alignment horizontal coherence and shared responsibility. Performance results
will be directly linked to annual bonus distribution ensuring precise and effective incentives
5) Improvement of the Welfare and Benefits System to Enhance Employee Belonging
On top of the statutory basic insurance supplementary commercial insurance such as personal accident insurance and
supplementary medical insurance will be provided to enhance employees’ sense of security. Furthermore the welfare and
benefits system will be systematically improved covering multiple levels of needs from basic support (such as transportation
subsidy communication subsidy and meal allowance) to emotional recognition (such as team-building activities and
anniversary gifts) continuously enhancing employees’ sense of well-being fulfillment and belonging.
3. Training plan
In order to continuously implement the Company’s “Four-High” Talent Philosophy of “High Personal Quality; HighAcademic Qualifications; High Performance; High Reward” the Company focused on optimizing talent structure
strengthening talent pipeline development and increasing talent density as its core objectives in . A systematic training
and development system covering all employees will be advanced through tiered leveled empowerment to enhance
organizational capabilities and facilitate strategy execution.
1) Tiered Leveled Empowerment to Build High-Quality Leadership and Professional Teams. For one thing the Company
continued to deepen the “Winning Leadership Initiative” leadership development program focusing on strategic decoding
(SP/BP) business operations and management practices aiming to build a “high-quality sustainable” leadership team.For another thing the Company systematically carried out the “Departmental Professional Training Plan” and company-
wide thematic empowerment initiatives to address competency gaps based on job qualification requirements across different
departments and functions.
2) Talent Pipeline Development to Strengthen the Cultivation and Integration of Emerging Talent. The “Spring Sprout”program for fresh graduates adopts an integrated development approach combining “training practice integration andassessment.” Thanks to various methods such as mentoring rotational assignments and cultural immersion the program
systematically supported new graduates in transitioning from campus to the workplace. A dedicated performance review
and promotion mechanism for program participants created a closed-loop “cultivation-development-retention” system
continuously enhancing their cultural identification professional capabilities and performance contribution. Beyond that
for experienced new hires the Company has established an integrated onboarding program combining online and offline
elements covering company introduction cultural values product knowledge and professional conduct. This accelerated
new employees’ integration into teams and business understanding equipping them to quickly assume responsibilities and
create value.
893) The Company integrated internal and external training resources through a three-dimensional curriculum system covering
“management specialized and general training” across all professional fields. Guided by the annual strategy and job
qualification requirements for key positions the Company continuously iterated curriculum content expanded its faculty
and integrated online and offline learning models. This has created a dynamic and interactive learning ecosystem providing
sustained momentum for talent development and organizational growth. Going forward the Company will double its effortsto deepen innovation in talent development mechanisms strengthen the full-cycle “selection cultivation utilization andretention” management and build a solid talent foundation for business development and strategic realization.
4) To enhance lean production knowledge of frontline employees and improve specialized capabilities and efficiency in
manufacturing manufacturing subsidiaries have launched a series of lean production training programs. Based on real-world
frontline scenarios a systematic curriculum-based empowerment has been implemented establishing a development path of
“knowledge enhancement – practical training – mindset reshaping.” The program uses learning participation test scores and
practical application (improvement proposals improvement weeks on-site improvements) as evaluation criteria. This has
effectively strengthened frontline employees’ lean mindset and stimulated their intrinsic motivation to drive improvement
initiatives together with their colleagues.
4. Labor outsourcing
□Applicable √ N/A
XI. Profit Distribution and Share Capital Increase from Capital Surplus
Profit distribution policy during the Reporting Period especially the formulation implementation or adjustment of cash
dividend policy
√ Applicable □N/A
During the Reporting Period the Company strictly followed the Articles of Association and other relevant regulations in
executing its profit distribution policy and completed the distribution within the stipulated timeframe safeguarding the
interests of all shareholders.Specific Explanation of Cash Dividend Policy
Does it conform to the Articles of Association or resolutions of the Shareholders’ Meeting: Yes
Are the dividend standards and ratios clear and specific: Yes
Are the decision-making procedures and mechanisms for dividend distribution complete: Yes
Have the independent Directors fulfilled their duties and roles effectively: Yes
If the Company did not distribute cash dividends what are the specific reasons and what
N/A
measures are planned to enhance investor returns:
Do the small and medium-sized shareholders have adequate opportunities to express their
Yes
opinions and concerns and are their legitimate rights and interests fully protected:
If the cash dividend policy has been adjusted or changed are the conditions and
N/A
procedures compliant and transparent:
The Company’s profit distribution plan and the proposal on share capital increase from capital surplus for the Reporting
90Section IV Environmental Social and Corporate Governance Period are consistent with the relevant provisions of the Articles of Association and dividend management measures
√ Yes □No □N/A
The Company’s profit distribution plan and the proposal on share capital increase from capital surplus for the Reporting
Period conform to the relevant provisions of the Articles of Association.Profit distribution and share capital increase from capital surplus in current year (excluding the interim dividend for the year
)
Number of bonus share to be distributed per 10 shares held (shares) 0
Amount of dividend to be distributed per 10 shares held (RMB) (tax inclusive) 3.0
Number of shares to be converted from capital surplus per 10 shares held (shares) 0
Base of share capital for the distribution plan (shares) 582329808
Amount of cash dividend (RMB) (tax inclusive) 174698942.40
Amount of cash dividend in other forms (e.g. share repurchase) (RMB) 0.00
Total amount of cash dividend (including in other forms) (RMB) 174698942.40
Profit available for distribution (RMB) 4744962352.64
Percentage of total amount of cash dividend (including in other forms) in the total amount
100.00%
of profit distributed
Current Cash Dividend
Other
Detailed explanation on profit distribution plan and the proposal on share capital increase from capital surplus
The Company’s profit distribution plan for is as follows: based on the current total share capital of 582329808
shares a cash dividend of RMB3.0 (tax inclusive) will be distributed for every 10 shares held by shareholders totaling
RMB174698942.40 (tax inclusive) to be distributed. No share capital increase from capital surplus and no distribution
of bonus shares. The remaining undistributed profit will be carried forward to the next year. If the total number of shares
entitled to profit distribution changes between the disclosure and implementation of this profit distribution plan the
Company will adjust the distribution accordingly maintaining the cash dividend payout ratio while adjusting the total cash
dividend amount.The Company’s total cash dividend for amounted to RMB436747356.00 (tax inclusive) accounting for 56.87% of
the net profit attributable to ordinary shareholders of the listed company for the year which includes (1) cash dividend
of RMB262048413.60 (tax inclusive) under the interim profit distribution plan (already implemented); (2) proposed
cash dividend of RMB174698942.40 (tax inclusive) in the profit distribution plan subject to approval by the
shareholders’ meeting.The Company made profit during the Reporting Period and the parent company had positive profits available for distribution
to shareholders but no cash dividend distribution plan was proposed
□Applicable √ N/A
91XII. Implementation of the Company’s Equity Incentive Plan Employee Stock
Ownership Plan or Other Employee Incentive Measures
√ Applicable □N/A
1. Equity incentive
(I) 2024 Restricted Share Incentive Plan
The Company held the fourth meeting of the fourth session of the Board of Directors and Board of Supervisors on October
25 2024 and the fourth extraordinary general meeting of 2024 on November 13 2024. These meetings considered and
approved the Proposal on the 2024 Restricted Share Incentive Plan (Draft) and its Summary and other matters. The general
meeting authorized the Board of Directors to determine the grant date of the restricted shares grant the restricted shares to
target participants upon their fulfillment of eligibility requirements and handle all necessary procedures related to the grant.The Company held the fifth meeting of the fourth session of the Board of Directors and the fifth meeting of the fourth
session of the Supervisory Committee on November 15 2024 considered and approved the Proposal on the First Grant of
Restricted Shares to Target Participants of the 2024 Restricted Share Incentive Plan and agreed to grant 6976300 restricted
shares to 308 target participants who met the conditions.The Company held the seventh meeting of the fourth session of the Board of Directors and the seventh meeting of the fourth
session of the Supervisory Committee on August 20 and considered and approved the Proposal on Adjusting the
Grant Price of the 2024 Restricted Share Incentive Plan. The Company adjusted the grant price of the Incentive Plan due to
the implementation of the distribution of stock dividends. Following the adjustment the grant price of both the initial and
reserved restricted shares was adjusted from RMB15.39 per share to RMB14.69 per share.The Company held the ninth meeting of the fourth session of the Board of Directors on November 12 and considered
and approved the Proposal on the Grant of Reserved Restricted Shares to Target Participants of the 2024 Restricted Share
Incentive Plan and agreed to grant 500000 reserved restricted shares to 13 target participants who met the grant conditions.Equity incentive granted to Directors and senior management
√ Applicable □N/A
Unit: Share
Number Number of Number of Number of Number Number of Number Number of Grant Number of
Exercise price of Market price
of stock new stock exercisable exercised of stock restricted of shares new restricted price of restricted
shares exercised at the end of
options options shares shares options shares unlocked shares granted restricted shares held
Name Position during the the Reporting
held at the granted during during the during the held at the held at the in during the shares at the end
Reporting Period Period
beginning the Reporting Reporting Reporting end of the beginning of current Reporting (RMB/ of the
(RMB/share) (RMB/share)
of the year Period Period Period Period the Period period Period share) Period
Director Deputy General
Fang Xiuyuan Manager and Chief 0 0 0 0 0 80000 0 0 14.69 80000
Financial Officer
Zhang Yan Director 0 0 0 0 0 50000 0 0 14.69 50000
Liao Meizhen Director 0 0 0 0 0 100000 0 0 14.69 100000
Yan Xia Deputy General Manager 0 0 0 0 0 0 0 80000 14.69 80000
Liao Guanlai Deputy General Manager 0 0 0 0 0 100000 0 0 14.69 100000
Deputy General Manager
Chen Huixuan 0 0 0 0 0 40000 0 0 14.69 40000
and Board Secretary
Total -- 0 0 0 0 -- 0 -- 370000 0 80000 -- 450000
92Section IV Environmental Social and Corporate Governance Evaluation mechanism and incentive for senior management
The Company has established an appraisal system for senior management that includes both target-based responsibility
assessments and annual performance evaluations. Senior management performance is assessed and evaluated according to
established assessment policies. This scientific approach incorporates the operating performance of both the Company as a
whole and its two major business segments to take into account the Company’s long-term development needs.
2. Implementation of employee stock ownership plan
√ Applicable □N/A
All effective employee stock ownership plans implemented during the Reporting Period
Percentage of Total
Number of Total Shares Sources of Funds for
Scope of Employee Change Share Capital of
Employee Held (shares) Implementing the Plan
Listed Company
Incentive funds raised by
Core employees at director
12 353500 No 0.06% employees and provided
level (inclusive) or above
by the Company
Shares held by Directors and senior management under the employee stock ownership plan during the Reporting Period
Number of shares held Number of shares held at Percentage of Total
Name Position at the beginning of the the end of the Reporting Share Capital of
Reporting Period (shares) Period (shares) Listed Company
Liao Meizhen Director
70000700000.01%
Liao Guanlai Deputy General Manager
Changes in asset management institutions during the Reporting Period
□Applicable √ N/A
Changes in equity caused by holders’ disposal of shares during the Reporting Period
□Applicable √ N/A
Exercise of shareholders’ rights during the Reporting Period
During the Reporting Period the Company’s employee stock ownership plan exercised shareholder rights to participate in
the 2024 profit distribution and the interim profit distribution but did not participate in the voting at the shareholders’
meetings or exercise other shareholder rights.Other pertinent circumstances and explanations regarding employee stock ownership plan during the Reporting Period
√ Applicable □N/A
As of the end of the Reporting Period two participants in the employee stock ownership plan had left the Company. Any
remaining underlying shares not yet distributed or vested together with their corresponding dividends (if any) shall be
disposed of by the management committee of the employee stock ownership plan in accordance with the relevant provisions
of the Company’s First Employee Stock Ownership Plan (Draft).
93Changes in the membership of the Employee Stock Ownership Plan Management Committee
□Applicable √ N/A
The financial impact of employee stock ownership plan on the listed company during the Reporting Period and the associated
accounting treatment
√ Applicable □N/A
According to the provisions of Accounting Standards for Business Enterprises No. 11 – Share-based Payment on each
balance sheet date during the vesting period the relevant costs or expenses and capital reserves are determined based on the
best estimate of the number of exercisable equity instruments and the fair value of the equity instrument on the grant date
reflecting the services obtained in the current period.Termination of employee stock ownership plan during the Reporting Period
□Applicable √ N/A
Other explanation:
N/A
3. Other employee incentive measures
□Applicable RN/A
XIII. Establishment and Implementation of an Internal Control System during the
Reporting Period
1. Establishment and implementation of an internal control system
During the Reporting Period the Company continuously improved and optimized its internal control system to adapt to
the changing external environment and evolving internal management requirements in accordance with the provisions and
requirements of the Basic Standards for Enterprise Internal Control and its supporting guidelines as well as the Company’s
internal control system and evaluation methods building upon routine and special internal control supervision and adhering
to a risk-oriented approach. Through the operation analysis and evaluation of the internal control system the Company
effectively mitigated operational and management risks and promoted the achievement of internal control objectives.
2. Details of significant internal control defects discovered during the Reporting Period
□ Yes √ No
94Section IV Environmental Social and Corporate Governance XIV. Management and Control of the Company over Its Subsidiaries during the
Reporting Period
Problems Progress Follow-up
Solutions
Company Name Integration Plan Integration Progress Encountered in of Solution
Taken
Integration Solution Plan
To establish and strengthen the corporate Through its authority and responsibility manual
governance structures of our subsidiaries the Company explicitly requires subsidiaries to
by appointing directors or supervisors adhere to established authorization protocols for
and appointing or assigning financial all major operational decisions. This includes
managers and general managers. To decisions related to corporate governance
Longterm Medical main t a in a c l ea r gene ra l manage r structure and policies strategic planning
Winner Guilin Winner r e s p o n s i b i l i t y s y s t e m u n d e r t h e investment and financing activities asset leasing
Medical (Hunan) Group’s management framework; tailor and transfers financial management human N/A N/A N/A N/A
Global Resources operational resources compliance and risk management
International Inc. etc. empowerment control and synergy plans and IT projects. Subsidiaries must obtain
for each subsidiary based on its specific approval from the Company before
business needs; enhance operational i m p l e m e n t i n g s u c h d e c i s i o n s a n d
efficiency and promotes the compliant these mat te r s mus t be submi t ted to the
organized and steady development of our Company’s Board of Directors for review
subsidiaries as per the established procedures
Anomalies in the management and control over subsidiaries.□ Yes √ No
XV. Internal Control Evaluation Report and Internal Control Audit Report
1. Internal control evaluation report
Disclosure date of full text of internal control evaluation report April 22 2026
Disclosure index of full text of internal control evaluation report http://www.cninfo.com.cn
Proportion of total assets of entities included in the evaluation scope to the total assets
100.00%
of the Company’s consolidated financial statements
Proportion of operating revenue of entities included in the evaluation scope to the
100.00%
operating revenue of the Company’s consolidated financial statements
95Deficiency Identification Criteria
Category Financial Reporting Non-Financial Reporting
M a t e r i a l We a k n e s s : L a c k o f d e m o c r a t i c
decision-making procedures; Decision-making
procedures leading to major mistakes; Lack
Material Weakness: 1) Ineffective control environment; 2) Fraud by of institutional control or systematic failure
the Company’s Directors or senior management causing significant in important business operations and lack of
loss or adverse impact to the Company; 3) Material misstatements effective compensatory controls; Serious loss
identified by the registered accountant in the current financial report of middle and senior management and senior
that were not detected by the internal control system; 4) Ineffective technical personnel; Failure to rectify internal
supervision of internal control by the Company’s audit committee control evaluation results especially material
and internal audit department. weaknesses; Other circumstances with a significant
Significant Deficiency: 1) Failure to select and apply accounting negative impact on the company.Qualitative policies in accordance with generally accepted accounting Significant Deficiency: Democratic decision-
standards principles; 2) Failure to establish anti-fraud procedures and making procedures exist but are not perfect;
control measures; 3) Lack of established control mechanisms or Decision-making procedures lead to general
implementation of controls without compensatory controls for non- errors; Deficiencies in important business systems
routine or special transactions; 4) One or more deficiencies in the or institutions; Serious loss of key personnel;
controls over the period-end financial reporting process that cannot Failure to rectify internal control evaluation
reasonably ensure the accuracy and truthfulness of the prepared results especially significant deficiencies; Other
financial statements. circumstances that have a relatively large negative
Control Deficiency: Other internal control deficiencies that do not impact on the company.constitute material weaknesses or significant deficiencies. Control Deficiency: Inefficient decision-making
procedures; Deficiencies in general business
systems or institutions; Loss of general staff;
Failure to rectify control deficiencies.Material Weakness: 1. Potential misstatement of operating
revenue ≥2% of the total operating revenue in the consolidated
financial statements; 2. Potential misstatement of total profit
≥5% of the total profit in the consolidated financial statements; 3.Potential misstatement of total assets ≥2% of the total assets in the
consolidated financial statements.Significant Deficiency: 1. 1% of consolidated financial statement
operating revenue ≤ Potential misstatement of operating revenue <
2% of consolidated financial Material Weakness: Amount of loss 5% of the total
statement operating revenue; 2. 2% of consolidated financial audited profit of the previous year.Quantitative statement total profit ≤ Potential misstatement of total profit < 5% of Significant Deficiency: Amount of loss 2%
standards consolidated financial statement total profit; 3. 1% of consolidated (inclusive) and < 5% of the total audited profit of financial statement total assets ≤ Potential misstatement of total the previous year.assets < 2% of consolidated financial statement total assets. General Deficiency: Amount of loss < 2% of the
Control Deficiency: 1. Potential misstatement of operating total audited profit of the previous year.revenue < 1% of the total operating revenue in the consolidated
financial statements; 2. Potential misstatement of total profit <
2% of the total profit in the consolidated financial statements; 3.
Potential misstatement of total assets < 1% of the total assets in the
consolidated financial statements. When the potential misstatement
caused by an internal control deficiency affects multiple indexes the
nature of the defect shall be determined according to the principle of
which is lower.Number of material weaknesses in financial reporting (Number) 0
Number of material weaknesses in non-financial reporting (Number) 0
Number of significant deficiencies in financial reporting (Number) 0
Number of significant deficiencies in non-financial reporting (Number) 0
96Section IV Environmental Social and Corporate Governance 2. Internal control audit report
√ Applicable □N/A
Opinion paragraph on internal control audit report
Ernst & Young Hua Ming LLP has issued an opinion on the effectiveness of the Company’s internal control concluding
that the Company maintained in all material respects effective internal control over financial reporting as of December 31
in accordance with the Basic Standards for Enterprise Internal Control and relevant regulations.
Disclosure of internal control audit report Disclosed
Disclosure date of full text of internal control audit report April 22 2026
Disclosure index of full text of internal control audit report http://www.cninfo.com.cn
Internal control audit opinion type Standard Unqualified Opinion
Existence of material weakness in non-financial reporting No
Does the accounting firm issue an internal control audit report with non-standard opinions
□ Yes √ No
Is the opinion in the internal control audit report issued by the accounting firm consistent with the opinion in the Board’s self-
assessment report
RYes □No
Was a non-standard internal control audit opinion issued during the Reporting Period or the previous year
□ Yes √ No
XVI. Rectification of Problems Identified through Self-Inspection in the Special Action
on Governance of Listed Companies
N/A
97XVII. Environmental Information Disclosure
Whether the listed company and its major subsidiaries are included in the list of enterprises required to disclose
environmental information according to law
√ Yes □No
Number of enterprises included in the list of
enterprises required to disclose environmental 7
information according to law
Search index for environmental information disclosure report
No. Name of enterprise
according to law
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Winner Medical (Jiayu) Co. Ltd.
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Winner Medical (Hunan) Co. Ltd.(former
home/enterpriseInfoXTXH=6b11b5b4-9959-4b89-9aca-40b357
7 name: Hunan Pingan Medical Device
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Technology Co. Ltd.)
pe=1
The Company is subject to the disclosure requirements for “Textile and Apparel Related Business” in the Shenzhen Stock
Exchange Listed Company Self-Regulation Guidelines No. 3 – Industry Information Disclosure Information relating to
environmental accidents of the listed company
No
98Section IV Environmental Social and Corporate Governance XVIII. Social Responsibility
Guided by its founding aspiration of “Social Value over Corporate Value” the Company has always attached great
importance to social responsibilities while continuously improving its operating performance. These responsibilities include
among others the protection of the rights and interests of shareholders and creditors the protection of the rights and interests
of employees the protection of the rights and interests of suppliers customers and consumers environmental protection and
sustainable development public relations and social welfare. For details on the fulfillment of social responsibilities during
the Reporting Period please refer to the Winner Medical Co. Ltd. Environmental Social and Governance Report
disclosed by the Company on http://www.cninfo.com.cn on April 22 2026.XIX. Efforts in Consolidating and Expanding Achievements in Poverty Alleviation and
Rural Revitalization
During the Reporting Period the Company worked on long-term mechanisms to support rural revitalization. Leveraging
its own resources and capabilities it continued to carry out diversified rural revitalization initiatives enhancing the self-
sustaining economic development capacity of local communities and promoting the effective integration of poverty
alleviation achievements with rural revitalization efforts. For details on the efforts made during the Reporting Period please
refer to the Winner Medical Co. Ltd. Environmental Social and Governance Report disclosed by the Company on
http://www.cninfo.com.cn on April 22 2026.
99Section V
Important Matters
100Section V Important Matters I. Performance in Fulfilling Commitments
1. Commitments fulfilled within and not fulfilled by the end of the Reporting Period by the Company’s
actual controller shareholders related parties acquirer the Company and other committing parties
√ Applicable □N/A
Reason for Type of Commitment Commitment Fulfillment
Committing Party Commitment Details
Commitment Commitment Date Duration Status
We guarantee compliance with all applicable laws regulations
departmental rules and normative documents concerning share reductions
Commitment by listed company shareholders. When reducing our holdings
made at the Winner Group Limited Reducing holdings of pre-IPO issued shares we will provide prior written notification to the September Long-term
In fulfillment
time of IPO or Li Jianquan after IPO Company detailing its intention to reduce its holdings and the proposed 172020 fulfillment
refinancing number of shares to be sold. The Company shall announce this information
at least three trading days in advance. This requirement does not apply if
our shareholding in the Company falls below 5%.We have not engaged in any fraudulent activities in connection with this
Share repurchase initial public offering and listing on the ChiNext board. If the securities
in case of regulatory authorities the stock exchange or judicial authorities determine
Commitment
The Company Winner fraudulent that the Company has engaged in fraudulent issuance and this fraud
made at the September Long-term
Group Limited Li activities in materially and substantially impacted the determination of whether In fulfillment
time of IPO or 17 2020 fulfillment
Jianquan connection with the issuer met the legal requirements for issuance we will within five
refinancing
initial public working days of the final determination of such violation formulate a share
offering and listing repurchase plan in accordance with relevant laws regulations and the
Company’s Articles of Association and repurchase all newly issued shares
The Company Winner
Group Limited
Li Jianquan Fang Commitment
Commitment Xiuyuan Xu Xiaodan to assume
The prospectus contains no untrue statement of a material fact misleading
made at the Liu Weiwei Wang compensation and September Long-term
statement or material omission. We accept full individual and joint legal In fulfillment
time of IPO or Ying Chen Huixuan indemnification 17 2020 fulfillment
responsibility for its truthfulness accuracy and completeness
refinancing Yin Wenling Bi Qun liability according
Zhou Xiaoxiong Liang to law
Wenzhao Guo Zhenwei
Ye Yangjing
Measures and
Commitment To mitigate the immediate impact of dilution resulting from this offering
commitments to
made at the we commit to the following measures: (1) enhance operational management September Long-term
The Company make up for the In fulfillment
time of IPO or and internal controls to improve efficiency and profitability; (2) maintain a 17 2020 fulfillment
diluted immediate
refinancing consistent and stable profit distribution policy to strengthen investor returns
return
I /we will not unduly interfere with the Company’s operational
management infringe upon the Company’s interests transfer benefits
Measures and to other entities or individuals without compensation or under unfair
Commitment
commitments to conditions or harm the Company’s interests in any other way. I/we
made at the Winner Group Limited September Long-term
make up for the will not use the Company assets for investments or personal expenses In fulfillment
time of IPO or Li Jianquan 17 2020 fulfillment
diluted immediate unrelated to the performance of my/our duties. I/we commit to fully and
refinancing
return promptly implementing the Company’s makeup measures for return on
investment as well as any related commitments. Should I/we violate these
commitments I/we agree to bear the corresponding legal responsibilities
101Reason for Type of Commitment Commitment Fulfillment
Committing Party Commitment Details
Commitment Commitment Date Duration Status
1. Not transfer benefits to other entit ies or individuals without
compensation or under unfair conditions or harm the Company’s interests
in any other way. 2. Restrict my work-related expenses as a Director/
Supervisor/senior management of the Company. 3. Refrain from using the
Company’s assets for investments or personal expenses unrelated to the
Measures and
Commitment performance of my duties as a Director/Supervisor/senior management. 4.commitments to
made at the Fang Xiuyuan Chen Actively promote the improvement of the Company’s remuneration system. September Long-term
make up for the In fulfillment
time of IPO or Huixuan 5. Ensure that any proposed stock incentive plan (if any) links the exercise 17 2020 fulfillment
diluted immediate
refinancing conditions to the implementation of the Company’s makeup measures for
return
return. 6. I commit to providing supplementary commitments in accordance
with the latest regulations of the CSRC and will actively promote the
Company’s adoption of new regulations. 7. I commit to fully and promptly
implementing the Company’s makeup measures for return as well as any
related commitments thereto
To protect the interests of minority shareholders effectively safeguard the
legitimate rights and interests
Commitment of investors and implement the profit distribution policy the Company
Commitment on
made at the commits to strictly adhering to the September Long-term
The Company profit distribution In fulfillment
time of IPO or profit distribution policy stipulated in the Company’s Articles of 17 2020 fulfillment
policy
refinancing Association after listing following the profit
distribution decision-making procedures and implementing profit
distribution
1. As of the date of this letter I/we do not currently engage in nor will
I/we in the future engage in or participate in directly or indirectly any
business or activity that is the same as or similar to the Company’s core
business. This includes refraining from investing in other companies that
engage in or participate in such businesses or activities. 2. I/we commit to
not engaging in or participating in any business or activity that is the same
Commitment
Commitment to as or similar to the Company’s core business. 3. If the Company expands
made at the Winner Group Limited September Long-term
avoid horizontal its current business scope into areas where businesses I/we control are In fulfillment
time of IPO or Li Jianquan 17 2020 fulfillment
competition already producing and operating those businesses will divest themselves
refinancing
of the relevant operations. The Company will have the right of first refusal
to acquire these operations under equivalent commercial terms. 4. If
the Company expands its current business scope into new areas where
other businesses I/we control are not yet producing and operating those
businesses will not engage in or participate in any business or activity that
is the same as or similar to the Company’s new business activities
The social security and housing provident fund authorities in the locations
of the Company and its major subsidiaries have issued certificates
confirming that from January 1 2017 to December 31 2019 the
Commitment
Company and its subsidiaries had no record of administrative penalties
regarding
for violations of labor social security or housing provident fund laws
Commitment indemnification
and regulations. However should the Company or its subsidiaries be
made at the Winner Group Limited for the recovery September Long-term
required to pay any backdated social security or housing provident In fulfillment
time of IPO or Li Jianquan of underpaid 17 2020 fulfillment
fund contributions for their employees or should any claims lawsuits
refinancing social security and
arbitrations or administrative penalties arise from such matters we/I will
housing provident
unconditionally bear the full cost of such back payments and assume all
fund
associated liabilities ensuring that the Company and its subsidiaries suffer
no losses as a result. This obligation is jointly and severally guaranteed by
the Company’s controlling shareholder and actual controller Li Jianquan
102Section V Important Matters Reason for Type of Commitment Commitment Fulfillment
Committing Party Commitment Details
Commitment Commitment Date Duration Status
The land and property authorities in Winner Medical (Yichang) have issued
certificates confirming that the relevant subsidiaries have not engaged in
any illegal or non-compliant activities related to the two properties during
Commitment the Reporting Period. Furthermore these two properties represent a small
regarding proportion of the total area of self-owned properties held by the Company
Commitment
indemnification for and its subsidiaries. Therefore even in the event of a demolition order the
made at the Winner Group Limited September Long-term
the demolition of impact on the Company’s and its subsidiaries’ production and operations In fulfillment
time of IPO or Li Jianquan 17 2020 fulfillment
real estate owned would not be materially adverse. To address the potential relocation risk
refinancing
by Winner associated with these two properties the controlling shareholder and actualMedical (Yichang) controller of the issuer have made the following commitment: “Should thegovernment authorities require the demolition of these properties within
a specified timeframe we agree to promptly unconditionally and fullycompensate the Company for any resulting losses”.If we fail to fulfill the commitments disclosed in the prospectus we will
provide a public explanation of the specific reasons for non-compliance at
a general meeting and through information disclosure channels designated
by the CSRC. We will also issue a public apology to all shareholders and
investors. Any gains
obtained as a result of the unfulfilled commitments will revert to the
Company. If our failure to fulfill these commitments causes losses to the
The Company Winner
Company its shareholders or other investors we will compensate them
Group Limited Li
for such losses in accordance with applicable laws. Furthermore during
Jianquan Fang
the period of liability for such indemnification we will not transfer
Commitment Xiuyuan Xu Xiaodan
Constraints any directly or indirectly held shares of the issuer (if any). If we fail
made at the Liu Weiwei Wang September Long-term
imposed for default to meet such indemnification obligations we will cease receiving any In fulfillment
time of IPO or Ying Chen Huixuan 17 2020 fulfillment
in the IPO remuneration if applicable within 10 days of the occurrence of such event
refinancing Yin Wenling Bi Qun
and until the relevant commitments are fulfilled. If due to changes in laws
Zhou Xiaoxiong Liang
regulations or policies natural disasters force majeure or other objective
Wenzhao Guo
reasons beyond our control we are unable to fulfill have become unable
Zhenwei Ye Yangjing
to fulfill or cannot fulfill on schedule the aforementioned commitments
we will take the following measures: (1) promptly and fully disclose
the specific reasons for our inability or failure to promptly fulfill the
commitments; (2) propose supplementary or alternative commitments to
the Company’s investors (subject to the relevant approval procedures as
required by laws regulations and the Articles of Association) to protect
investor interests to the greatest extent possible
Based on the confidence in the prospects of the Company in order to
further strengthen the support for the Company and in a responsible
attitude to the public and shareholders Winner Group Limited voluntarily
reaffirmed its commitment to extend the lock-up period of the shares held
by it in the Company from September 16 2024 to September 16 .Other May 20 September Fulfillment
Winner Group Limited Share lock-up During the lock-up period Winner Group will not transfer or entrust the
commitments 2024 16 completed
management of these shares to any third party nor will it request the
Company to repurchase them. Any new shares acquired by Winner Group
during this lock-up period as a result of share conversions bonus share
issuances or rights offerings will also be subject to the same lock-up
restrictions
Was the commitment fulfilled on time Yes
If the commitment was not fully met within the specified timeframe provide a detailed explanation of the reasons for such failure and outline
N/A
the next steps
1032. If the Company has made profit forecasts for certain assets or projects and the reporting period
falls within the forecast period please provide an explanation of whether the assets or projects have
met the original profit forecasts and the reasons for any discrepancies
□ Applicable √ N/A
3. The Company’s involvement in fulfilling commitments
□ Applicable √ N/A
II. Non-operating Occupation of Funds of the Listed Company by the Controlling
Shareholder and Other Related Parties
□ Applicable √ N/A
There was no non-operating occupation of funds of the listed company by the controlling shareholder and other related
parties during the Reporting Period.III. Illegal External Guarantee
□ Applicable √ N/A
The Company had no illegal external guarantee during the Reporting Period.IV. Explanation by the Board of Directors on the Latest “Non-standard Audit Report”
□ Applicable √ N/A
V. Explanation by the Board of Directors the Audit Committee and the Independent
Directors (if any) on the “Non-Standard Audit Report” Issued by the Accounting Firm
for the Reporting Period
□ Applicable √ N/A
VI. Explanation by the Board of Directors Regarding Changes in Accounting Policies
Accounting Estimates or Corrections of Significant Accounting Errors During the
Reporting Period
□ Applicable √ N/A
VII. Explanation on Changes in the Scope of Consolidated Financial Statements
Compared to the Previous Year’s Financial Report
√ Applicable □N/A
Please refer to “Section VIII: Financial Report” for details.
104Section V Important Matters VIII. Appointment of and Dismissal of Accounting Firms
Accounting firm appointed currently
Name of domestic accounting firm Ernst & Young Hua Ming LLP
Remuneration of domestic accounting firm (RMB0’000) 460
Continuous years of audit services by domestic accounting firm 2
Name of certified public accountant of domestic accounting firm Liao Wenjia Chen Huijin
Continuous years of audit services by certified public accountant of
2
domestic accounting firm
Has the accounting firm been changed
□ Yes √ No
Engagement of internal control auditor financial advisor or sponsor
√ Applicable □N/A
During the Reporting Period the Company engaged Ernst & Young Hua Ming LLP to conduct an internal control audit. The
total fee for these services was RMB700000 (included in the RMB4.6 million stated in the table above)
IX. Delisting Risk After Disclosure of the Annual Report
□ Applicable √ N/A
X. Matters Related to Bankruptcy Reorganization
□ Applicable √ N/A
The Company had no matters related to bankruptcy reorganization during the Reporting Period.XI. Major Litigation and Arbitration Matters
□ Applicable √ N/A
The Company had no major litigation and arbitration matters in the year.XII. Punishment and Rectification
□ Applicable √ N/A
The Company had no punishment and rectification during the Reporting Period.XIII. Credit Status of the Company Its Controlling Shareholders and Actual Controller
□ Applicable √ N/A
105XIV. Major Related-party Transactions
1. Related-party transactions related to daily operation
□ Applicable √ N/A
The Company had no related-party transactions related to daily operation during the Reporting Period.
2. Related-party transactions involving the acquisition or sale of assets or equity
□ Applicable √ N/A
The Company had no related-party transactions involving the acquisition or sale of assets or equity during the Reporting
Period.
3. Related-party transactions involving joint external investment
□ Applicable √ N/A
The Company had no related-party transactions involving joint external investment during the Reporting Period.
4. Related-party receivables and payables
□ Applicable √ N/A
The Company had no related-party receivables and payables during the Reporting Period.
5. Transactions with related finance companies
□ Applicable √ N/A
There was no deposit loan credit granting or other financial business among the Company finance companies with a
related-party relationship and related parties.
6. Transactions between the Company’s majority-owned finance companies and related parties
□ Applicable √ N/A
There was no deposit loan credit granting or other financial business between the Company’s majority-owned finance
companies and related parties.
7. Other major related-party transactions
□ Applicable √ N/A
The Company had no other major related-party transactions during the Reporting Period.
106Section V Important Matters XV. Major Contracts and Their Performance
1. Trusteeship contracting and lease
(1) Trusteeship
□ Applicable √ N/A
The Company had no trusteeship during the Reporting Period.
(2) Contracting
□ Applicable √ N/A
The Company had no contracting during the Reporting Period.
(3) Lease
□ Applicable √ N/A
The Company had no lease during the Reporting Period.
2. Major guarantee
□ Applicable √ N/A
The Company had no major guarantee during the Reporting Period.
3. Details of entrusting others for cash asset management
(1) Entrusted wealth management
√ Applicable □N/A
Overview of entrusted wealth management during the Reporting Period
Unit: RMB0’000
Balance of entrusted wealth
Overdue amount
Product type Risk characteristics management during the
not recovered
Reporting Period
Bank wealth Principal guaranteed and floating income non-
180203.870
management products principal guaranteed and floating income
Trust wealth
Non-principal guaranteed and floating income 100000 0
management products
Details regarding the Company’s engagement of financial institutions as a single client to conduct asset management or invest
in high-risk wealth management products with lower safety and poorer liquidity
□ Applicable √ N/A
(2) Entrusted loan
□ Applicable √ N/A
The Company had no entrusted loan during the Reporting Period.
1074. Other major contracts
□ Applicable √ N/A
The Company had no other major contracts during the Reporting Period.XVI. Use of Raised Funds
□ Applicable √ N/A
The Company had no use of raised funds during the reporting period.XVII. Explanation on Other Significant Events
√ Applicable □N/A
In July 2023 the Company entered into a relocation compensation and resettlement agreement with Shenzhen Xingda
Real Estate Development Co. Ltd. for the urban renewal involving the land and above-ground buildings in the Winner
Industrial Park in Longhua District Shenzhen which the Company holds. Due to the significant changes in the real estate
market the project was put on hold in January 2024. To smoothly advance the project shorten the land idle time and reduce
uncertainties in the construction process and in light of the market conditions for relocation compensation for urban renewal
the Company conducted multiple rounds of negotiations with its partner and signed a supplementary agreement in August
2024. According to the supplementary agreement the area of office space and commercial space obtained by the Company
remains unchanged while the area of residential space and the amount of compensation obtained by the Company will be
linked to the actual average transaction price of the residential units obtained by Xingda Company. Given the significant
volatility in the real estate market there is uncertainty regarding the area of residential space and the amount of compensationthe Company will obtain. For further details please refer to the Company’s “Announcement Regarding the Proposed Signingof Supplementary Agreements on Relocation Compensation and Resettlement for the Urban Renewal Unit of WinnerIndustrial Park” disclosed on July 27 2024 on www.cninfo.com.cn.Currently the Company and Xingda Company have signed a Land Acquisition Agreement with the relevant local government
authorities. Xingda Company is currently applying for handling the procedures related to the transfer of land use rights
through a contractual agreement in order to obtain a contract for the transfer of state-owned construction land use rights.Moving forward Xingda Company will proceed with land development and construction in accordance with the relevant
government procedures. However due to the long implementation period of this project and the influence of factors such
as adjustments in urban renewal regulations and policies changes in urban planning the partner’s ability to perform its
obligations market conditions prices and force majeure the Company will actively promote the project strengthen
communication and process control and strive to reduce uncertainties in the execution process.
108Section V Important Matters XVIII. Significant Events of Subsidiaries
√ Applicable □N/A
To further promote the implementation of the “Purcotton” strategy optimize the supply chain layout and safety assurance
system for all-cotton products and build core competitiveness through controllable costs supply chains and technology
across the industrial chain Shenzhen Purcotton Technology Co. Ltd. a wholly-owned subsidiary of the Company plans to
invest in the construction of a production base for a series of all-cotton spunlace nonwoven fabric products in accordance
with the Company’s strategic and medium- to long-term development plans. This project will focus on the large-scale high-
quality production of all-cotton spunlace nonwoven fabrics. By introducing state-of-the-art production lines and establishing
an intelligent production management system we will effectively ensure the stability and security of the supply chain further
expand our portfolio of all-cotton products and enhance our brand competitiveness in the all-cotton consumer goods sector.On November 12 the Company convened the ninth meeting of its fourth Board of Directors at which the “Proposalon the Investment and Construction of a Production Base for All-cotton Spunlace Nonwoven Fabric Products”was reviewedand approved. For further details please refer to the Company’s “Announcement on the Investment and Construction of aProduction Base for All-cotton Spunlace Nonwoven Fabric Products” disclosed on November 12 on www.cninfo.com.cn.
109Section VI
Changes in Shares and
Information on Shareholders
110Section VI Changes in Shares and Information on Shareholders I. Changes in Shares
1. Changes in shares
Unit: share
Before this change Increase/decrease (+ -) After this change
New Share conversion
Bonus
Number Proportion issue of from capital Others Subtotal Number Proportion
issuance
shares reserves
I. Shares with selling
40682412769.86%000-404185301-40418530126388260.45%
restrictions
1. State-owned shares 0 0.00% 0 0 0 0 0 0 0.00%
2. Shares held by state-
00.00%0000000.00%
owned legal persons
3. Other shares held by
domestic individuals and 209740 0.04% 0 0 0 2429086 2429086 2638826 0.45%
legal persons
Including: shares held by
00.00%0000000.00%
domestic legal persons
Shares held by
domestic natural 209740 0.04% 0 0 0 2429086 2429086 2638826 0.45%
persons
4. Shares held by overseas
individuals and legal 406614387 69.83% 0 0 0 -406614387 -406614387 0 0.00%
persons
Including: shares held by
40661438769.83%000-406614387-40661438700.00%
overseas legal persons
Shares held by
overseas natural 0 0.00% 0 0 0 0 0 0 0.00%
persons
II. Shares without selling
17550568130.14%00040418530140418530157969098299.55%
restrictions
1. RMB ordinary shares 175505681 30.14% 0 0 0 404185301 404185301 579690982 99.55%
2. Domestically listed
00.00%0000000.00%
foreign shares
3. Overseas listed foreign
00.00%0000000.00%
shares
4. Others 0 0.00% 0 0 0 0 0 0 0.00%
III. Total number of shares 582329808 100.00% 0 0 0 0 0 582329808 100.00%
Reasons for changes in shares
√ Applicable □N/A
1. Prior to the initial public offering the controlling shareholder Winner Group Limited had 406614387 outstanding shares
representing 69.83% of the Company’s total issued share capital. The shares subject to this lifting of the lock-up became
tradable on September 17 .
1112. Between September 8 and September 23 certain directors senior management and former supervisors of the
Company acquired through block trades shares of the Company that they had indirectly held via the pre-IPO employee stock
ownership platform.
3. Shareholdings of Directors Supervisors and senior management are subject to lock-up periods release of restrictions onsale in compliance with requirements of China Securities Regulatory Commission. Details are provided in “2. Changes inRestricted Shares” within this section.Approval on changes in shares
□ Applicable √ N/A
Transfer due to changes in shares
□ Applicable √ N/A
The impact of changes in shares on financial indicators such as basic earnings per share diluted earnings per share and net
assets
per share attributable to ordinary shareholders of the Company for the latest year and the latest period
□ Applicable √ N/A
Other information deemed necessary by the Company or required by securities regulatory authorities to disclose
□ Applicable √ N/A
2. Changes in restricted shares
√ Applicable □N/A
Unit: share
Opening Increased Number of
Name of number number of restricted
Closing
restricted shares number Reason for shareholder of restricted shares in released in of restricted restriction
Restriction release date
shares current period current period shares
Locked shares held Subject to the relevant regulations on share lock-
Zhang Tingting 0 61905 0 61905 by Directors Supervisors and up for departing Directors
senior management Supervisors and senior management
Locked shares held Subject to the relevant
Wu Kezhen 0 53496 0 53496 by Directors
regulations on share lock-
Supervisors and up for departing Directors
senior management Supervisors and senior management
Locked shares held 25% of the total shares held are
Fang Xiuyuan 87000 1990751 0 2077751 by Directors Supervisors and unlocked at the beginning of
senior management each year
Locked shares held
Chen Huixuan 23040 325686 0 348726 by Directors
25% of the total shares held are
Supervisors and unlocked at the beginning of
senior management each year
112Section VI Changes in Shares and Information on Shareholders Opening Increased Number of
Name of number number of restricted
Closing
number Reason for
shareholder of restricted restricted shares shares in released in of restricted restriction
Restriction release date
shares current period current period shares
Locked shares held
by Directors 25% of the total shares held areZhang Yan 3750 93198 0 96948 Supervisors and unlocked at the beginning of
senior management each year
Locked shares held Subject to the relevant regulations on share lock-
Zhang Li 15000 0 15000 0 by Directors Supervisors and up for departing Directors
senior management Supervisors and senior management
Locked shares held Subject to the relevant
Wang Ying 36150 0 36150 0 by Directors
regulations on share lock-
Supervisors and up for departing Directors
senior management Supervisors and senior management
Locked shares held Subject to the relevant
Liu Hua 22000 0 22000 0 by Directors
regulations on share lock-
Supervisors and up for departing Directors
senior management Supervisors and senior management
Locked shares held Subject to the relevant
Xu Xiaodan 22800 0 22800 0 by Directors
regulations on share lock-
Supervisors and up for departing Directors
senior management Supervisors and senior management
The controlling
Winner Group shareholder has
Limited 406614387 0 406614387 0 voluntarily agreed to September 17 extend the lock-up
period
Total 406824127 2525036 406710337 2638826 -- --
II. Securities Issuance and Listing
1. Securities issuance during the Reporting Period (excluding preferred shares)
□ Applicable √ N/A
2. Explanation of changes in the Company’s total shares and shareholder structure and changes in
the Company’s asset and liability structure
√ Applicable □N/A
Please refer to “1. Changes in shares” under “I. Changes in Shares” in this section.
3. Existing internal employee shares
□ Applicable √ N/A
113III. Shareholders and Actual Controller
1. Number of shareholders and their shareholding
Unit: share
Total number of Total number of Total number of preferred
Total number Total number
ordinary shareholders preferred shareholders shareholders with restored
of ordinary of shareholders
at the end of the with restored voting voting rights as of the end
shareholders as 29044 31401 0 0 holding shares 0
month prior to the rights at the end of the of the month prior to the
of the end of the with special voting
disclosure of the Reporting Period (if disclosure of the annual
Reporting Period rights (if any)
annual report any) (see Note 9) report (if any) (see Note 9)
Shareholding information of shareholders holding 5% or more or the top 10 shareholders (excluding shares lent through margin financing and securities lending)
Number of shares Number of held Number of held Pledged marked or
Change during
Nature of Shareholding held at the end shares with shares without frozen
Name of shareholder the Reporting
shareholder ratio of the Reporting selling selling
Period
Period restrictions restrictions Status Number
Overseas legal
Winner Group Limited 69.83% 406614387 0 0 406614387 N/A 0
person
Bank of China Limited – Huabao
Others 1.23% 7143160 0 0 7143160 N/A 0
CSI Healthcare ETF
Hong Kong Securities Clearing Overseas legal
0.79% 4611751 -925994 0 4611751 N/A 0
Company Limited person
Agricultural Bank of China
Others 0.60% 3467300 246540 0 3467300 N/A 0
Limited – CSI 500 ETF
Industrial and Commercial Bank
of China Limited – E Fund Others 0.59% 3456249 -1561264 0 3456249 N/A 0
ChiNext ETF
Domestic natural
Fang Xiuyuan 0.48% 2770335 2654335 2077751 692584 N/A 0
person
Agricultural Bank of China
Limited – BoCom-Schroders
Domestic Demand Growth Hybrid Others 0.34% 1955989 614889 0 1955989 N/A 0
Securities Investment Fund with
One-Year Holding Period
China Life Insurance Company
Limited – Traditional – Ordinary
Others 0.33% 1919400 -1658840 0 1919400 N/A 0
Insurance Products – 005L-CT001
Shanghai
China CITIC Bank Corporation
Limited – BoCom-Schroders
Quality Growth Hybrid Securities Others 0.31% 1827580 572280 0 1827580 N/A 0
Investment Fund with One-Year
Holding Period
Domestic natural
Zheng Junhui 0.28% 1626380 0 0 1626380 N/A 0
person
Strategic investors or general legal persons who become the top 10 shareholders due to rights issue (if any) (see Note 4) N/A
Explanation of the related party relationships or concerted actions among the above-mentioned shareholders N/A
Explanation of the delegation/trust of voting rights or waiver of voting rights among the above-mentioned shareholders N/A
Special note on the repurchase account among the top 10 shareholders (if any) (see Note 10) N/A
114Section VI Changes in Shares and Information on Shareholders Shareholding information of the top 10 shareholders of shares without selling restriction (excluding shares lent through margin financing and securities lending and lock-
up shares held by senior management)
Number of held shares without selling restrictions as of Type of share
Name of shareholder
the end of the Reporting Period Type of share Number
Winner Group Limited 406614387 RMB ordinary shares 406614387
Bank of China Limited – Huabao CSI Healthcare ETF 7143160 RMB ordinary shares 7143160
Hong Kong Securities Clearing Company Limited 4611751 RMB ordinary shares 4611751
Agricultural Bank of China Limited – CSI 500 ETF 3467300 RMB ordinary shares 3467300
Industrial and Commercial Bank of China Limited – E Fund
3456249 RMB ordinary shares 3456249
ChiNext ETF
Agricultural Bank of China Limited – BoCom-Schroders Domestic
Demand Growth Hybrid Securities Investment Fund with One-Year 1955989 RMB ordinary shares 1955989
Holding Period
China Life Insurance Company Limited – Traditional – Ordinary
1919400 RMB ordinary shares 1919400
Insurance Products – 005L-CT001 Shanghai
China CITIC Bank Corporation Limited – BoCom-Schroders
Quality Growth Hybrid Securities Investment Fund with One-Year 1827580 RMB ordinary shares 1827580
Holding Period
Zheng Junhui 1626380 RMB ordinary shares 1626380
Industrial and Commercial Bank of China Limited – Fullgoal
1603160 RMB ordinary shares 1603160
Tianhui Selected Growth Mixed Securities Investment Fund (LOF)
Explanation of the related party relationships or concerted actions between the top 10 shareholders of outstanding shares
without selling restriction and between the top 10 shareholders of outstanding shares without selling restriction and the top N/A
10 shareholders
Information on shareholders involved in margin trading and securities lending (if any) (see Note 5) N/A
Shares lent through margin financing and securities lending by shareholders holding 5% or more shares the top 10
shareholders and
top 10 holders of outstanding shares without selling restriction
□ Applicable √ N/A
Changes in the top 10 shareholders and top 10 holders of outstanding shares without selling restriction as caused by margin
financing
and securities lending and returning activities
□ Applicable √ N/A
Has the Company a differentiated voting rights structure
□ Applicable √ N/A
Whether the top 10 ordinary shareholders and the top 10 holders of ordinary shares without selling restriction conducted
agreed
115repurchase transactions during the Reporting Period
□ Yes √ No
The top 10 ordinary shareholders and the top 10 holders of ordinary shares without selling restriction did not conduct agreed
repurchase
transactions during the Reporting Period.
2. Information on controlling shareholders
Nature of controlling shareholder: foreign-controlled
Type of controlling shareholder: legal person
Legal representative/ Establishment Organizational
Name of controlling shareholder Main business
Head of the entity date code
Winner Group Limited Li Jianquan April 8 2003 124887 Investment management
Shareholdings of the controlling shareholder in other domestic and overseas listed companies
N/A
during the Reporting Period
Change of controlling shareholder during the Reporting Period
□ Applicable √ N/A
The controlling shareholder of the Company remained unchanged during the Reporting Period.
3. Actual controller of the Company and persons acting in concert
Nature of the actual controller: overseas natural person
Type of the actual controller: natural person
Relation with the actual Whether residency in other countries
Name of the actual controller Nationality
controller or regions has been obtained
Li Jianquan Himself Hong Kong China Yes
Main occupations and positions Chairman General Manager
Domestic and overseas listed companies controlled in
N/A
the past 10 years
Change of actual controller during the Reporting Period
□ Applicable √ N/A
The actual controller of the Company remained unchanged during the Reporting Period.Diagram of ownership and control relationship between the Company and its actual controller
116Section VI Changes in Shares and Information on Shareholders Li Jianquan
73.74%
Winner Group Limited
69.83%
Winner Medical Co. Ltd.The actual controller controls the Company through a trust or other asset management arrangements
□ Applicable √ N/A
4. The cumulative number of pledged shares by the Company’s controll ing shareholder or largest
shareholder and its persons acting in concert has reached 80% of their total shareholding in the
Company
□ Applicable √ N/A
5. Other corporate shareholders holding more than 10% of the Company’s shares
□ Applicable √ N/A
6. Shareholding restr ic t ions and reduct ion commitments of the control l ing shareholder actual
controller restructuring parties and other committing entities
□ Applicable √ N/A
IV. Specific Implementation of Share Repurchase During the Reporting Period
Progress of share repurchase implementation
□ Applicable √ N/A
Progress of reduction of repurchased shares via centralized bidding transactions
□ Applicable √ N/A
V. Preferred Shares
□ Applicable √ N/A
The Company had no preferred shares during the Reporting Period.
117Section VII
Bonds
□ Applicable √ N/A
118Section VIII Financial Report Section VIII
Financial Report
119I. Auditor’s report
Auditor’s opinion Unqualified opinion
Date of signing 20 April 2026
Auditor Ernst & Young Hua Ming LLP
No. of auditor’s report Ernst & Young Hua Ming (2026) Shen Zi No. 70016450_H01
Chinese Certified Public Accountant Liao Wenjia Chen Huijin
AUDITOR’S REPORT (Body)
To the shareholders of Winner Medical Co. Ltd.:
(I) Opinion
We have audited the financial statements of Winner Medical Co. Ltd. (the “Company”) which comprise the consolidated and
company balance sheets as at 31 December and the consolidated and company income statements the consolidated and
company statements of changes in equity and the consolidated and company statements of cash flows for the year then ended
and notes to the financial statements.In our opinion the accompanying financial statements present fairly in all material respects the consolidated and the
Company’s financial position as at 31 December and the consolidated and the Company’s financial performance and
cash flows for the year then ended in accordance with Accounting Standards for Business Enterprises (“ASBEs”).(II) Basis for opinion
We conducted our audit in accordance with China Standards on Auditing (“CSAs”). Our responsibilities under those
standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report.We are independent of the Company in accordance with China Independence Standard No. 1 - Independence Requirements
for Financial Statement Audit and Review Engagements and China Code of Ethics for Certified Public Accountants (the
“Code”) and we have fulfilled our other ethical responsibilities in accordance with the Code. We have complied with
the independence requirements applicable to audits of public interest entities. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.(III) Key audit matters
Key audit matters are those matters that in our professional judgement were of most significance in our audit of the financial
statements of the current period. These matters were addressed in the context of our audit of the financial statements as a
whole and in forming our opinion thereon and we do not provide a separate opinion on these matters. For each matter below
our description of how our audit addressed the matter is provided in that context.We have fulfilled the responsibilities described in the “Auditor’s responsibilities for the audit of the financial statements”
section of our report including in relation to these matters. Accordingly our audit included the performance of procedures
designed to respond to our assessment of the risks of material misstatement of the financial statements. The results of our
audit procedures including the procedures performed to address the matters below provide the basis for our audit opinion on
the accompanying financial statements.
120Section VIII Financial Report (III) Key audit matters (continued)
Key audit matters: How our audit addressed the matters:
Revenue recognition
Our procedures in relation to revenue recognition mainly included:
1) Understand evaluate and test the design and operational effectiveness of key
internal controls in the revenue-related processes;
2) Understand the accounting policies for revenue recognition and examine the major
sales contracts identify the contract terms and conditions related to the transfer of
significant risks and rewards of ownership of goods and evaluate the rationality of the
revenue recognition policies;
In the revenue of Winner Medical Co. Ltd. and its subsidiaries
3) Conduct analytical review of operating revenue to identify whether there are any
(collectively referred to as “the Group”) in the consolidated
significant or abnormal fluctuations and investigate the causes of such fluctuations;
financial statements was RMB10949489967.01 of which
4) Perform tests of details review sales orders delivery slips logistics records signed
the income of medical consumables and consumer goods was
delivery receipts or export customs declaration forms and bills of lading invoices
RMB5114457721.11 and RMB5748821913.85 respectively and
and bank statements of collections etc.;
other income was RMB86210332.05.
5) Implement analytical review procedures for the sales revenue from e-commerce
The revenue amount of the Group is significant in relation to the
platforms and offline stores obtain sales data for consumer behavior analysis and
financial statements as a whole. There are not only domestic and
compare it with the book value of sales revenue;
overseas sales as well as distribution and direct sales models
6) Examine the fund flow of third-party payment platforms such as Alipay and
but also sales through physical stores and e-commerce platforms.reconcile it with the book value of receipts;
With diverse revenue settlement models inappropriate revenue
7) In combination with the confirmation of accounts receivable send confirmation
recognition has a significant impact on the financial statements.letters to major customers on a sampling basis to confirm the sales amount during the
Therefore we have identified revenue recognition as a key audit
reporting period and perform alternative procedures for customers who do not reply
matter.to the confirmation letters;
For the accounting policy significant accounting judgements and
8) Conduct background investigation procedures for important general sales
estimates as well as the related financial statement disclosures
customers;
please refer to Note III.12 24 30 as well as Note V.45.
9) Reconcile the export sales amount in the export tax declaration data and the export
data at the customs with the book value of export sales revenue; obtain the foreign
exchange data from the information inquiry system on the website of the State
Administration of Foreign Exchange on a sampling basis and reconcile it with the
book value of export sales proceeds;
10) Perform cut-off tests on the revenue recognised around the balance sheet date and
check whether there are significant revenue reversals or large-value returns after the
period;
11) Review whether the information related to revenue has been appropriately
presented and disclosed in the financial statements.
121Key audit matters: How our audit addressed the matters:
Impairment of goodwill
As at 31 December the carrying amount of goodwill of the
Group was RMB1061673881.52 and the provision for impairment Therefore we consider impairment of goodwill as a key audit matter.was RMB461252867.96 mainly including RMB335186885.63 For the accounting policy significant accounting judgements and estimates as well
and RMB123384750.24 for the goodwill of the asset groups as the related disclosures please refer to Note III.20 30 as well as Note V.19 of the
of Winner Medical (Hunan) Co. Ltd. (hereinafter referred to as financial statement.“Winner Medical (Hunan)”) and Winner Guilin Latex Co. Ltd. Our procedures in relation to impairment of goodwill mainly included:
(hereinafter referred to as “Winner Guilin”). 1) Understand evaluate and test the design and operational effectiveness of internal
The Group’s management conducts impairment testing on goodwill controls in relation to impairment of goodwill;
when there are indications of impairment and at the end of each 2) Review the management’s identification of the asset group and the allocation of
fiscal year. Such testing is based on the recoverable amount of each goodwill.asset group. The recoverable amount of the asset group is determined 3) Understand the basis for management to determine the key indicators of profit
based on the higher of its fair value less costs of disposal and the forecast including revenue growth rate and gross profit margin compare them with
present value of the future cash flows expected to be derived from it. historical and industry indicators and assess their reasonableness;
Because of the importance of goodwill to the financial statements 4) Obtain the relevant evaluation reports of the external appraisers engaged by the
as a whole impairment testing involves significant management management on the main goodwill and evaluate the competence professional quality
judgements and estimates of key assumptions such as revenue and objectivity of the external appraisers;
growth gross margin and discount rates. Such judgements and 5) Review with the assistance of internal valuation experts the reasonableness of the
estimates are influenced by management’s judgements about the models and key parameters used by management in the goodwill impairment test
way in which business activities are managed the future market and including discount rate and the growth rate during the stable period;
the economic environment and different judgements and estimates 6) Review whether the information related to impairment of goodwill has been
may have a significant impact on the calculation of impairment of appropriately presented and disclosed in the financial statements.goodwill.(IV) Other information
The management of the Company is responsible for other information. The other information comprises the information
included in the Annual Report other than the financial statements and our auditor’s report thereon.Our opinion on the financial statements does not cover the other information and we do not express any form of assurance
conclusion thereon.In connection with our audit of the financial statements our responsibility is to read the other information and in doing so
consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge
obtained in the audit or otherwise appears to be materially misstated.If based on the work we have performed we conclude that there is a material misstatement of this other information we are
required to report the fact. We have nothing to report in this regard.
122Section VIII Financial Report (V) Responsib i l i t ies of the management and those charged wi th governance for the f inanc ia l
statements
The management of the Company is responsible for the preparation and fair presentation of the financial statements in
accordance with ASBEs and for designing implementing and maintaining such internal control as the management
determines is necessary to enable the preparation of financial statements that are free from material misstatement whether
due to fraud or error.In preparing the financial statements the management is responsible for assessing the Company’s ability to continue as a
going concern disclosing as applicable matters related to going concern and using the going concern basis of accounting
unless the management either intends to liquidate the Company or to cease operations or has no realistic alternative but to do
so.Those charged with governance are responsible for overseeing the Company’s financial reporting process.(VI) Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement whether due to fraud or error and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance but is not a guarantee that an audit conducted in accordance with CSAs will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are generally considered material if
individually or in the aggregate they could reasonably be expected to influence the economic decisions of users taken on the
basis of these financial statements.As part of an audit in accordance with CSAs we exercise professional judgement and maintain professional scepticism
throughout the audit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements whether due to fraud or error design and
perform audit procedures responsive to those risks and obtain audit evidence that is sufficient and appropriate to provide a
basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting
from error as fraud may involve collusion forgery intentional omissions misrepresentations or the override of internal
control.
(2) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in
the circumstances; however the objective was not to express an opinion on the effectiveness of the internal controls.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by the management.
(4) Conclude on the appropriateness of the management’s use of the going concern basis of accounting and based on the
audit evidence obtained whether a material uncertainty exists related to events or conditions that may cast significant doubt
on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists we are required
to draw attention in our auditor’s report to the related disclosures in the financial statements or if such disclosures are
inadequate to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s
report. However future events or conditions may cause the Company to cease to continue as a going concern.
123(5) Evaluate the overall presentation structure and content of the financial statements including the disclosures and whether
the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
(6) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
within the Company to express an opinion on the financial statements. We are responsible for the direction supervision and
performance of the group audit. We remain solely responsible for our audit opinion.We communicate with those charged with governance regarding among other matters the planned scope and timing of the
audit and significant audit findings including any significant deficiencies in internal control that we identify during our audit.We also provide those charged with governance with a statement that we have complied with relevant ethical requirements
regarding independence and communicate with them all relationships and other matters that may reasonably be thought to
bear on our independence and where applicable related safeguards.From the matters communicated with those charged with governance we determine those matters that were of most
significance in the audit of the financial statements of the current year and are therefore the key audit matters. We describe
these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when in
extremely rare circumstances we determine that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.Ernst & Young Hua Ming LLP Chinese Certified Public Accountant: Liao Wenjia
(Engagement partner)
Chinese Certified Public Accountant: Chen Huijin
Beijing the People’s Republic of China 20 April 2026
124Section VIII Financial Report II. Financial statements
The notes to financial statements are expressed in Renminbi Yuan.
1. Consolidated balance sheet
Preparer: Winner Medical Co. Ltd. 31 December Currency: Renminbi Yuan
Items Closing balance Opening balance
Current assets:
Currency funds 1593989319.92 1412088898.63
Settlement reserves
Placements to banks and other financial institutions
Financial assets held for trading 2825378695.56 2921341484.39
Derivative financial assets
Notes receivable 39357178.51 34319961.81
Accounts receivable 1040873548.50 980617641.38
Receivables financing 48201306.98 68349926.24
Prepayments 179318742.70 107051901.68
Premium receivable
Reinsurance receivables
Due from Reinsurer for reserve of reinsurance contract
Other receivables 204468498.11 186351012.28
Including: Interest receivable 0.00
Dividends receivable 0.00
Financial assets held under resale agreements
Inventories 2016213055.34 1957814608.25
Including: Data resources
Contract assets
Assets classified as held for sale
Current portion of non-current assets 432793859.94 345468268.20
Other current assets 85677714.26 67736523.90
Total current assets 8466271919.82 8081140226.76
Non-current assets:
125Items Closing balance Opening balance
Loans and advances to customers
Debt investments
Other debt investments
Long-term receivables 83590080.72 88435629.22
Long-term equity investments 478989825.04 445355778.00
Other equity investments
Other non-current financial assets 99881071.54 107906716.86
Investment properties 1454295.27 2360346.25
Fixed assets 4199969234.92 3354304108.81
Construction in progress 511625219.44 1074955450.40
Productive biological assets
Oil and gas assets
Right-of-use assets 554782629.68 595222623.66
Intangible assets 1008848502.75 1095755498.27
Including: Data resources
Development expenditures
Including: Data resources
Goodwill 1061673881.52 1251264505.00
Long-term prepaid expenses 133901014.09 143855144.02
Deferred tax assets 146109331.24 139000387.64
Other non-current assets 1657761021.19 2012299546.63
Total non-current assets 9938586107.40 10310715734.76
Total assets 18404858027.22 18391855961.52
Current liabilities:
Short-term borrowings 1836629579.24 1969044164.65
Borrowings from the Central Bank
Placements from banks and other financial institutions
Financial liabilities held for trading
Derivative financial liabilities
Notes payable 381818750.95 431873210.11
126Section VIII Financial Report Items Closing balance Opening balance
Accounts payable 1280618737.32 1155930554.98
Receipts in advance 0.00
Contract liabilities 169914491.43 182755504.60
Financial assets sold under repurchase agreements
Customer deposits and deposits from banks and other financial institutions
Customer money for securities trading
Proceeds from securities underwriting on agency basis
Employee benefits payable 332576791.46 308955076.89
Taxes and surcharges payable 130559536.02 123630574.88
Other payables 529651533.30 681390743.80
Including: Interest payable 0.00 0.00
Dividends payable 164868250.80
Fees and commissions payable
Reinsurance payables
Liabilities classified as held for sale
Current portion of non-current liabilities 185546235.07 396768243.67
Other current liabilities 22078405.94 21235048.58
Total current liabilities 4869394060.73 5271583122.16
Non-current liabilities:
Reserves for insurance Contract
Long-term borrowings 50000000.00 53000000.00
Bonds payable
Including: Preference shares
Perpetual bonds
Lease liabilities 416875073.97 440876652.33
Long-term payables 26994520.77 48544431.64
Long-term employee benefits payable 13271993.56 13247971.34
Provisions 0.00
Deferred income 211162383.13 157154401.72
Deferred tax liabilities 136896207.18 158515830.62
127Items Closing balance Opening balance
Other non-current liabilities 387682358.99 373262348.97
Total non-current liabilities 1242882537.60 1244601636.62
Total liabilities 6112276598.33 6516184758.78
Owners’ equity:
Share capital 582329808.00 582329808.00
Other equity investments
Including: Preference shares
Perpetual bonds
Capital reserves 3389737553.59 3378540115.00
Less: Treasury shares 4187537.10 7282100.00
Other comprehensive income -11835038.99 -2637827.10
Specialised reserves
Surplus reserves 420212778.13 420212778.13
General reserve
Unappropriated profit 7140453466.82 6780116870.53
Total equity attributable to owners of the parent 11516711030.45 11151279644.56
Non-controlling interests 775870398.44 724391558.18
Total equity 12292581428.89 11875671202.74
Total liabilities and equity 18404858027.22 18391855961.52
Legal representative: Li Jianquan Financial controller: Fang Xiuyuan Accounting supervisor: Zhao Yan
128Section VIII Financial Report 2. Parent company’s balance sheet
Preparer: Winner Medical Co. Ltd. Currency: Renminbi Yuan
Items Closing balance Opening balance
Current assets:
Currency funds 713886735.40 443572315.60
Financial assets held for trading 1978673463.33 2794105538.09
Derivative financial assets
Notes receivable 6847204.90 6635069.05
Accounts receivable 453304452.50 349608101.82
Receivables financing 22653120.31 24348899.43
Prepayments 166878123.57 130809600.46
Other receivables 250844030.72 167026860.96
Including: Interest receivable
Dividends receivable 9404946.00
Inventories 218884891.65 206425686.10
Including: Data resources
Contract assets
Assets classified as held for sale
Current portion of non-current assets 432793859.94 345468268.20
Other current assets 9671040.36 8707781.75
Total current assets 4254436922.68 4476708121.46
Non-current assets:
Debt investments
Other debt investments
Long-term receivables 26502052.74 31209579.38
Long-term equity investments 4999415008.13 5195497758.83
Other equity investments
Other non-current financial assets 73603810.38 76673047.39
Investment properties
Fixed assets 315171759.48 38592292.38
129Items Closing balance Opening balance
Construction in progress 32790523.08 214011382.64
Productive biological assets
Oil and gas assets
Right-of-use assets 32839135.44 32141280.38
Intangible assets 39373841.62 41672000.26
Including: Data resources
Development expenditures
Including: Data resources
Goodwill
Long-term prepaid expenses 8721282.84 15685458.76
Deferred tax assets 19996691.95 30999936.31
Other non-current assets 1489288095.87 1767046194.63
Total non-current assets 7037702201.53 7443528930.96
Total assets 11292139124.21 11920237052.42
Current liabilities:
Short-term borrowings 200130600.00
Financial liabilities held for trading
Derivative financial liabilities
Notes payable 935500319.24 843693594.39
Accounts payable 381079772.46 469844799.47
Receipts in advance
Contract liabilities 27210735.47 50096915.01
Employee benefits payable 76798911.73 64256450.47
Taxes and surcharges payable 7061696.17 13779416.66
Other payables 300454835.05 459940163.58
Including: Interest payable
Dividends payable 162645754.80
Liabilities classified as held for sale
Current portion of non-current liabilities 11649279.48 193218394.36
Other current liabilities 2117794.99 2861257.23
130Section VIII Financial Report Items Closing balance Opening balance
Total current liabilities 1741873344.59 2297821591.17
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: Preference shares
Perpetual bonds
Lease liabilities 39746851.13 32224060.33
Long-term payables
Long-term employee benefits payable
Provisions
Deferred income 18133.33 424728.11
Deferred tax liabilities
Other non-current liabilities 387682358.99 373262348.97
Total non-current liabilities 427447343.45 405911137.41
Total liabilities 2169320688.04 2703732728.58
Owners’ equity:
Share capital 582329808.00 582329808.00
Other equity investments
Including: Preference shares
Perpetual bonds
Capital reserves 3388316701.42 3376294181.65
Less: Treasury shares 4187537.10 7282100.00
Other comprehensive income
Specialised reserves
Surplus reserves 411397111.21 411397111.21
Unappropriated profit 4744962352.64 4853765322.98
Total equity 9122818436.17 9216504323.84
Total liabilities and equity 11292139124.21 11920237052.42
Legal representative: Li Jianquan Financial controller: Fang Xiuyuan Accounting supervisor: Zhao Yan
1313. Consolidated income statement
Preparer: Winner Medical Co. Ltd. Currency: Renminbi Yuan
Items 2024
I. Total Revenue 10949489967.01 8977853631.73
Including: Revenue 10949489967.01 8977853631.73
Interest income
Premium earned
Fee and commission income
II. Total Costs 9733808334.16 7996304540.94
Including: Cost of sales 5733463029.53 4729562118.23
Interest expenses
Fee and commission expenses
Surrender value payment
Net claim payments
Net amount of provisions for insurance contract liabilities recognised
Policy dividend payments
Reinsurance expenses
Taxes and surcharges 93698779.57 79905265.65
Selling expenses 2633668842.91 2264147324.64
Administrative expenses 855447401.69 673737166.83
Research and development expenses 410877566.24 348163926.01
Finance expenses 6652714.22 -99211260.42
Including: Interest expenses 55114093.69 54863504.13
Interest income 82400032.94 117095211.38
Add: Other income 84244396.64 91637936.87
Investment income (loss is expressed with “-”) 53091575.78 75387830.93
Including: Income from investments in associates and joint ventures -27220472.60 -11305734.64
Income from the derecognition of financial assets measured at
amortised cost
Exchange gains (loss is expressed with “-”)
Net position hedging gains (loss is expressed with “-”)
132Section VIII Financial Report Items 2024
Fair value gains (loss is expressed with “-”) -24339525.82 2862219.03
Credit impairment losses (loss is expressed with “-”) -10273088.79 444626.25
Impairment losses of assets (loss is expressed with “-”) -251273437.71 -242895761.34
Gains on disposal of assets (loss is expressed with “-”) 546546.56 5877157.55
III. Operating profit (loss is expressed with “-”) 1067678099.51 914863100.08
Add: Non-operating income 8206430.16 11926122.62
Less: Non-operating expenses 28063679.49 18440910.03
IV. Profit before income tax (loss is expressed with “-”) 1047820850.18 908348312.67
Less: Income tax expenses 233703122.41 167642375.27
V. Profit (loss is expressed with “-”) 814117727.77 740705937.40
1. Classified by continuity of operations
(1) Profit from continuing operations (loss is expressed with “-”) 814117727.77 740705937.40
(2) Profit from a discontinued operation (loss is expressed with “-”)
2. Classified by ownership
(1) Profit attributable to shareholders of the parent 767967461.87 695378928.72
(2) Profit or loss attributable to non-controlling interests 46150265.90 45327008.68
VI. Other comprehensive income net of tax -1581626.72 -13162548.61
Other comprehensive income net of tax attributable to owners of the parent -9197211.89 -4853196.54
1. Other comprehensive income that will not be reclassified to profit or loss 141398.71 -772779.52
(1) Remeasurement of a defined benefit plan 141398.71 -772779.52
(2) Other comprehensive income using the equity method that will not be
reclassified to profit or loss
(3) Change in the fair value of other equity investments
(4) Change in the fair value of the entity’s own credit risks
(5) Others
2. Other comprehensive income that may be reclassified to profit or loss -9338610.60 -4080417.02
(1) Other comprehensive income using the equity method that may be
reclassified to profit or loss
(2) Change in the fair value of other debt investments
(3) Amount recognised in other comprehensive income resulting from the
reclassification of financial assets
133Items 2024
(4) Provision for credit impairment of other debt investments
(5) Cash flow hedge reserve
(6) Exchange differences on translation of foreign currency financial statements -9338610.60 -4080417.02
(7) Others
Other comprehensive income net of tax attributable to non-controlling interests 7615585.17 -8309352.07
VII. Total comprehensive income 812536101.05 727543388.79
Total comprehensive income attributable to owners of the parent 758770249.98 690525732.18
Total comprehensive income attributable to non-controlling interests 53765851.07 37017656.61
VIII. Earnings per share
1. Basic earnings per share 1.3200 1.1900
2. Diluted earnings per share 1.3200 1.1900
For business combination involving entities under common control occurring during the current period the net profit of the
combined party generated before the business combination is RMB0.00 and the net profit of the combined party generated
for the prior period is RMB0.00.Legal representative: Li Jianquan Financial controller: Fang Xiuyuan Accounting supervisor: Zhao Yan
134Section VIII Financial Report 4. Parent company’s income statement
Preparer: Winner Medical Co. Ltd. Currency: Renminbi Yuan
Items 2024
I. Revenue 2836356685.11 2670598689.18
Less: Cost of sales 1872953966.60 1997443466.38
Taxes and surcharges 10546996.13 6437824.59
Selling expenses 433098633.11 372332633.60
Administrative expenses 235460709.91 253555583.52
Research and development expenses 109534639.46 82639397.94
Finance expenses -48048777.91 -99985415.41
Including: Interest expenses 15807766.00 20368268.78
Interest income 70744406.73 101694267.17
Add: Other income 23936086.35 12029687.14
Investment income (loss is expressed with “-”) 456166072.85 616652959.37
Including: Income from investments in associates and joint ventures 274423.52 335565.86
Income from the derecognition of financial assets measured at
amortised cost (loss is expressed with “-”)
Net position hedging gains (loss is expressed with “-”)
Fair value gains (loss is expressed with “-”) -22095908.83 4290632.80
Credit impairment losses (loss is expressed with “-”) -3264616.79 -1010957.53
Impairment losses of assets (loss is expressed with “-”) -333312598.93 -136104433.40
Gains on disposal of assets (loss is expressed with “-”) 771594.59 -58680.29
II. Operating profit (loss is expressed with “-”) 345011147.05 553974406.65
Add: Non-operating income 2292810.36 3008988.49
Less: Non-operating expenses 4255849.57 187025.91
III. Profit before income tax (loss is expressed with “-”) 343048107.84 556796369.23
Less: Income tax expenses 44220212.58 11276172.24
IV. Profit (loss is expressed with “-”) 298827895.26 545520196.99
1. Profit from continuing operations (loss is expressed with “-”) 298827895.26 545520196.99
2. Profit from a discontinued operation (loss is expressed with “-”)
V. Other comprehensive income net of tax
135Items 2024
1. Other comprehensive income that will not be reclassified to profit or loss
(1) Remeasurement of a defined benefit plan
(2) Other comprehensive income using the equity method that will not be reclassified
to profit or loss
(3) Change in the fair value of other equity investments
(4) Change in the fair value of the entity’s own credit risks
(5) Others
2. Other comprehensive income that may be reclassified to profit or loss
(1) Other comprehensive income using the equity method that may be reclassified to
profit or loss
(2) Change in the fair value of other debt investments
(3) Amount recognised in other comprehensive income resulting from the
reclassification of financial assets
(4) Provision for credit impairment of other debt investments
(5) Cash flow hedge reserve
(6) Exchange differences on translation of foreign currency financial statements
(7) Others
VI. Total comprehensive income 298827895.26 545520196.99
VII. Earnings per share:
1. Basic earnings per share
2. Diluted earnings per share
Legal representative: Li Jianquan Financial controller: Fang Xiuyuan Accounting supervisor: Zhao Yan
136Section VIII Financial Report 5. Consolidated statement of cash flows
Preparer: Winner Medical Co. Ltd. Currency: Renminbi Yuan
Items 2024
1. CASH FLOWS FROM OPERATING ACTIVITIES
Cash receipts from the sale of goods and the rendering of services 12116489200.36 10017512504.65
Net increase in customer deposits and deposits from banks and other financial
institutions
Net increase in borrowings from the Central Bank
Net increase in placements from other financial institutions
Cash receipts for premium of original insurance contract
Net cash receipts for reinsurance business
Net increase in policyholders’ deposits and investment funds
Cash received from interest fee and commission income
Net increase in placements from banks and other financial institutions
Net increase in funds for repurchase business
Net cash receipts for securities trading on agency basis
Receipts of taxes and surcharges refunds 154112612.79 114907212.10
Other cash receipts relating to operating activities 183597185.12 198112197.51
Total cash inflows from operating activities 12454198998.27 10330531914.26
Cash payments for goods and services 7581659323.15 6228472098.13
Net increase in loans and advances to customers
Net increase in deposits with the Central Bank and other financial institutions
Cash payments for settlement of claims under the original insurance contract
Net increase in placements to banks and other financial institutions
Cash payments for interest fee and commission expenses
Cash payments for insurance policy dividends
Cash payments to and on behalf of employees 1994039654.55 1838454165.09
Payments of taxes and surcharges 711128635.69 414807419.31
Other cash payments relating to operating activities 501694489.95 583042965.03
Total cash outflows from operating activities 10788522103.34 9064776647.56
Net cash flows from operating activities 1665676894.93 1265755266.70
2. CASH FLOWS FROM INVESTING ACTIVITIES
137Items 2024
Cash receipts from returns of investments 3583540064.18 3367701242.20
Cash receipts from returns on investments 107918042.34 193502728.27
Net cash receipts from disposal of fixed assets intangible assets and other long-term
37868707.8525746178.71
assets
Net cash receipts from disposal of subsidiaries and other business units
Other cash receipts relating to investing activities
Total cash inflows from investing activities 3729326814.37 3586950149.18
Cash payments to acquire fixed assets intangible assets and other long-term assets 647910000.49 900886591.31
Cash payments for investments 3357033541.10 6030497813.66
Net increase in pledged loans
Net cash payments for acquisition of subsidiaries and other business units 767592040.13
Other cash payments relating to other investing activities
Total cash outflows from investing activities 4004943541.59 7698976445.10
Net cash flows from investing activities -275616727.22 -4112026295.92
3. CASH FLOWS FROM FINANCING ACTIVITIES
Cash proceeds from investments by others
Including: Cash receipts from capital contributions from non-controlling interests of
subsidiaries
Cash receipts from borrowings 2819128017.53 1760844244.64
Other cash receipts relating to financing activities 44201640.58 223726501.95
Total cash inflows from financing activities 2863329658.11 1984570746.59
Cash repayments for debts 3158474619.84 1549119709.96
Cash payments for distribution of dividends or profit and interest expenses 606825040.03 412662512.60
Including: Dividends or profit paid to non-controlling shareholders of subsidiaries
Other cash payments relating to financing activities 277924918.29 500312174.51
Total cash outflows from financing activities 4043224578.16 2462094397.07
Net cash flows from financing activities -1179894920.05 -477523650.48
4. EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS -6540524.43 3551282.60
5. NET INCREASE IN CASH AND CASH EQUIVALENTS 203624723.23 -3320243397.10
Add: Cash and cash equivalents at beginning of period 1357097385.35 4677340782.45
6. CASH AND CASH EQUIVALENTS AT END OF PERIOD 1560722108.58 1357097385.35
Legal representative: Li Jianquan Financial controller: Fang Xiuyuan Accounting supervisor: Zhao Yan
138Section VIII Financial Report 6. Parent company’s statement of cash flows
Preparer: Winner Medical Co. Ltd. Currency: Renminbi Yuan
Items 2024
1. CASH FLOWS FROM OPERATING ACTIVITIES
Cash receipts from the sale of goods and the rendering of services 2810541841.48 2741375372.83
Receipts of taxes and surcharges refunds 136531610.64 126732129.08
Other cash receipts relating to operating activities 64479150.77 83140200.61
Total cash inflows from operating activities 3011552602.89 2951247702.52
Cash payments for goods and services 2423319530.37 1876321073.55
Cash payments to and on behalf of employees 417221690.15 373829422.15
Payments of taxes and surcharges 48541362.30 6468609.06
Other cash payments relating to operating activities 177099406.16 164608734.56
Total cash outflows from operating activities 3066181988.98 2421227839.32
Net cash flows from operating activities -54629386.09 530019863.20
2. CASH FLOWS FROM INVESTING ACTIVITIES
Cash receipts from returns of investments 2852300541.89 2836007884.61
Cash receipts from returns on investments 465591065.99 674273513.95
Net cash receipts from disposal of fixed assets intangible assets and other long-term assets 15108877.23 22383546.07
Net cash receipts from disposal of subsidiaries and other business units
Other cash receipts relating to investing activities
Total cash inflows from investing activities 3333000485.11 3532664944.63
Cash payments to acquire fixed assets intangible assets and other long-term assets 89752291.70 174434234.35
Cash payments for investments 1825000000.00 4928452000.00
Net cash payments for acquisition of subsidiaries and other business units 100000000.00 1434628768.41
Other cash payments relating to other investing activities
Total cash outflows from investing activities 2014752291.70 6537515002.76
Net cash flows from investing activities 1318248193.41 -3004850058.13
3. CASH FLOWS FROM FINANCING ACTIVITIES
Cash proceeds from investments by others
Cash receipts from borrowings 200000000.00
Other cash receipts relating to financing activities 80000000.00
Total cash inflows from financing activities 0.00 280000000.00
139Items 2024
Cash repayments for debts 370130600.00 470000000.00
Cash payments for distribution of dividends or profit and interest expenses 586309403.88 381638195.24
Other cash payments relating to financing activities 34110798.42 222082246.32
Total cash outflows from financing activities 990550802.30 1073720441.56
Net cash flows from financing activities -990550802.30 -793720441.56
4. EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS -2785728.38 2145362.77
5. NET INCREASE IN CASH AND CASH EQUIVALENTS 270282276.64 -3266405273.72
Add: Cash and cash equivalents at beginning of period 443341985.31 3709747259.03
6. CASH AND CASH EQUIVALENTS AT END OF PERIOD 713624261.95 443341985.31
Legal representative: Li Jianquan Financial controller: Fang Xiuyuan Accounting supervisor: Zhao Yan
140Section VIII Financial Report 7. Consolidated statement of changes in equity
Preparer: Winner Medical Co. Ltd. Amount for the period Currency: Renminbi Yuan
Attributable to owners of the parent
Items Non-Other equity investments Less: Other
Specialised General Unappropriated controlling Total equity
Share capital Preference Perpetual Capital reserves Treasury comprehensive Surplus reserves Others Subtotalreserves reserves profit interestsOthers
shares bonds shares income
I. Balance at end of prior year 582329808.00 3378540115.00 7282100.00 -2637827.10 420212778.13 6780116870.53 11151279644.56 724391558.18 11875671202.74
Add: Changes in accounting policies
Correction of prior period errors
Others
II. Balance at beginning of year 582329808.00 3378540115.00 7282100.00 -2637827.10 420212778.13 6780116870.53 11151279644.56 724391558.18 11875671202.74
III. Changes for the period
11197438.59-3094562.90-9197211.89360336596.29365431385.8951478840.26416910226.15
(loss is expressed with “-”)
1. Total comprehensive income -9197211.89 0.00 767967461.87 758770249.98 53765851.07 812536101.05
2. Owners’ contributions and reduction in capital 25617448.61 -2847112.90 28464561.51 1433312.27 29897873.78
(1) Ordinary shares invested by owners 1450000.00 1450000.00
(2) Capital contributions from holders of other
equity instruments
(3) Amount of share-based payments recognised
26442529.7926442529.7926442529.79
in equity
(4) Others -825081.18 -2847112.90 2022031.72 -16687.73 2005343.99
3. Profit distribution -247450.00 -407630865.58 -407383415.58 -3719802.60 -411103218.18
(1) Appropriation to surplus reserves
(2) Appropriation to general reserve
(3) Distribution to owners (or shareholders) -247450.00 -407630865.58 -407383415.58 -3719802.60 -411103218.18
(4) Others
4. Transfer within equity
(1) Capitalisation of capital reserves
(or share capital)
(2) Capitalisation of surplus reserves
(or share capital)
(3) Loss made up by surplus reserves
(4) Transfer of changes in the defined benefit plan
to retained earnings
(5) Transfer of other comprehensive income to
retained earnings
(6) Others
5. Specialised reserves
(1) Appropriation for the period
(2) Utilisation for the period
6. Others -14420010.02 -14420010.02 -520.48 -14420530.50
IV. Balance at end of period 582329808.00 3389737553.59 4187537.10 -11835038.99 420212778.13 7140453466.82 11516711030.45 775870398.44 12292581428.89
Legal representative: Li Jianquan Financial controller: Fang Xiuyuan Accounting supervisor: Zhao Yan
1417. Consolidated statement of changes in equity(Continue)
Preparer: Winner Medical Co. Ltd. Amount for the prior period Currency: Renminbi Yuan
2024
Attributable to owners of the parent
Items Non-Other equity investments Other
Less: Treasury Specialised Surplus General Unappropriated controlling Total equity
Share capital Preference Perpetual Capital reserves comprehensive Others Subtotal
Others shares reserves reserves reserves profit
interests
shares bonds income
I. Balance at end of prior year 594387367.00 4381126487.29 473552442.85 2215369.44 420212778.13 6608834768.99 11533224328.00 577097475.15 12110321803.15
Add: Changes in accounting policies
Correction of prior period errors
Others
II. Balance at beginning of year 594387367.00 4381126487.29 473552442.85 2215369.44 420212778.13 6608834768.99 11533224328.00 577097475.15 12110321803.15
III. Changes for the period
-12057559.00-1002586372.29-466270342.85-4853196.540.00171282101.54-381944683.44147294083.03-234650600.41
(loss is expressed with “-”)
1. Total comprehensive income -4853196.54 695378928.72 690525732.18 37017656.61 727543388.79
2. Owners’ contributions and reduction in capital -12057559.00 -629324023.32 -465815842.85 -175565739.47 5051706.60 -170514032.87
(1) Ordinary shares invested by owners -12057559.00 -645619219.06 -462694942.85 -194981835.21 1300000.00 -193681835.21
(2) Capital contributions from holders of other
equity instruments
(3) Amount of share-based payments recognised
14795634.8814795634.8814795634.88
in equity
(4) Others 1499560.86 -3120900.00 4620460.86 3751706.60 8372167.46
3. Profit distribution -454500.00 -524096827.18 -523642327.18 -22697501.08 -546339828.26
(1) Appropriation to surplus reserves
(2) Appropriation to general reserve
(3) Distribution to owners (or shareholders) -454500.00 -524096827.18 -523642327.18 -22697501.08 -546339828.26
(4) Others
4. Transfer within equity
(1) Capitalisation of capital reserves
(or share capital)
(2) Capitalisation of surplus reserves
(or share capital)
(3) Loss made up by surplus reserves
(4) Transfer of changes in the defined benefit
plan to retained earnings
(5) Transfer of other comprehensive income to
retained earnings
(6) Others
5. Specialised reserves
(1) Appropriation for the period
(2) Utilisation for the period
6. Others -373262348.97 -373262348.97 127922220.90 -245340128.07
IV. Balance at end of period 582329808.00 3378540115.00 7282100.00 -2637827.10 420212778.13 6780116870.53 11151279644.56 724391558.18 11875671202.74
Legal representative: Li Jianquan Financial controller: Fang Xiuyuan Accounting supervisor: Zhao Yan
142Section VIII Financial Report 8. Parent company’s statement of changes in equity
Preparer: Winner Medical Co. Ltd. Amount for the period Currency: Renminbi Yuan
Other equity investments
Items Other Less: Treasury Specialised Surplus Unappropriated
Share capital Preference Perpetual Capital reserves comprehensive Others Total equity
Others shares reserves reserves profit
shares bonds income
I. Balance at end of prior year 582329808.00 3376294181.65 7282100.00 411397111.21 4853765322.98 9216504323.84
Add: Changes in accounting policies
Correction of prior period errors
Others
II. Balance at beginning of year 582329808.00 3376294181.65 7282100.00 411397111.21 4853765322.98 9216504323.84
III. Changes for the period (loss is expressed with “-”) 12022519.77 -3094562.90 -108802970.34 -93685887.67
1. Total comprehensive income 298827895.26 298827895.26
2. Owners’ contributions and reduction in capital 26442529.79 -2847112.90 29289642.69
(1) Ordinary shares invested by owners
(2) Capital contributions from holders of other equity
instruments
(3) Amount of share-based payments recognised in equity 26442529.79 26442529.79
(4) Others -2847112.90 2847112.90
3. Profit distribution -247450.00 -407630865.60 -407383415.60
(1) Appropriation to surplus reserves
(2) Distribution to owners (or shareholders) -247450.00 -407630865.60 -407383415.60
(3) Others
4. Transfer within equity
(1) Capitalisation of capital reserves (or share capital)
(2) Capitalisation of surplus reserves (or share capital)
(3) Loss made up by surplus reserves
(4) Transfer of changes in the defined benefit plan to
retained earnings
(5) Transfer of other comprehensive income to retained
earnings
(6) Others
5. Specialised reserves
(1) Appropriation for the period
(2) Utilisation for the period
6. Others -14420010.02 -14420010.02
IV. Balance at end of period 582329808.00 3388316701.42 4187537.10 411397111.21 4744962352.64 9122818436.17
Legal representative: Li Jianquan Financial controller: Fang Xiuyuan Accounting supervisor: Zhao Yan
1438. Parent company’s statement of changes in
equity(Continue)
Preparer: Winner Medical Co. Ltd. Amount for the prior period Currency: Renminbi Yuan
2024
Other equity investments
Items Other Less: Treasury Specialised Surplus Unappropriated
Share capital Preference Perpetual Capital reserves comprehensive Others Total equity
Others shares reserves reserves profit
shares bonds income
I. Balance at end of prior year 594387367.00 4380380114.80 473552442.85 411397111.21 4897039093.59 9809651243.75
Add: Changes in accounting policies
Correction of prior period errors -64697140.41 -64697140.41
Others
II. Balance at beginning of year 594387367.00 4380380114.80 473552442.85 411397111.21 4832341953.18 9744954103.34
III. Changes for the period (loss is expressed with “-”) -12057559.00 -1004085933.15 -466270342.85 0.00 21423369.80 -528449779.50
1. Total comprehensive income 545520196.99 545520196.99
2. Owners’ contributions and reduction in capital -12057559.00 -630823584.18 -465815842.85 -177065300.33
(1) Ordinary shares invested by owners -12057559.00 -645619219.06 -462694942.85 -194981835.21
(2) Capital contributions from holders of other equity
instruments
(3) Amount of share-based payments recognised in equity 14795634.88 14795634.88
(4) Others -3120900.00 3120900.00
3. Profit distribution -454500.00 -524096827.19 -523642327.19
(1) Appropriation to surplus reserves
(2) Distribution to owners (or shareholders) -454500.00 -524096827.19 -523642327.19
(3) Others
4. Transfer within equity
(1) Capitalisation of capital reserves (or share capital)
(2) Capitalisation of surplus reserves (or share capital)
(3) Loss made up by surplus reserves
(4) Transfer of changes in the defined benefit plan to
retained earnings
(5) Transfer of other comprehensive income to retained
earnings
(6) Others
5. Specialised reserves
(1) Appropriation for the period
(2) Utilisation for the period
6. Others -373262348.97 -373262348.97
IV. Balance at end of period 582329808.00 3376294181.65 7282100.00 411397111.21 4853765322.98 9216504323.84
Legal representative: Li Jianquan Financial controller: Fang Xiuyuan Accounting supervisor: Zhao Yan
144Section VIII Financial Report III. General information
Winner Medical Co. Ltd. (hereinafter referred to as the “Company”) formerly known as Winner Industries (Shenzhen) Co.Ltd. (hereinafter referred to as “Winner Industries”) is a wholly foreign-owned enterprise established on 24 August 2000
with the approval of Shenzhen Municipal Administration for Industry and Commerce.On 4 June 2015 with the approval of Economy Trade and Information Commission of Shenzhen Municipality Winner
Industries was wholly changed into a limited liability company renamed as “Winner Medical Co. Ltd.”.On 18 August 2020 after the reply of China Securities Regulatory Commission on Approval of the Registration of the Initial
Public Offering of Winner Medical Co. Ltd. (Z.J.X.K. [2020] No.1822) the Company issued 50 million ordinary shares
in RMB to the public which was listed on the Shenzhen Stock Exchange on 17 September 2020. Upon completion of the
issuance the registered capital of the Company was RMB426492308.00.At the 2022 Annual General Meeting of Shareholders the equity distribution plan was reviewed and endorsed. Based on the
419737649 shares post the deduction of repurchased shares the plan includes a cash dividend of RMB19.00 (tax included)
for every 10 shares alongside a conversion of every 10 shares into 4 shares of share capital. Subsequently the Company’s
share capital was adjusted to RMB594387367.00.In March 2024 the Company cancelled the 6094659 shares remaining in the 2021 repurchase plan excluding the first
phase of the employee stock ownership plan (including the reserved part) in the special securities account for repurchase
and the total share capital of the Company decreased from 594387367 shares to 588292708 shares after the cancellation;In October 2024 the Company changed the use of 5962900 shares in the repurchase account from the original “for theCompany’s employee stock ownership plan or equity incentive” to “for the cancellation and reduction of the Company’sregistered capital”. After the cancellation the total share capital of the Company was reduced from 588292708 shares to
582329808 shares with a total share capital of RMB582329808.00.
The Company is engaged in the manufacturing industry specifically in the special-purpose equipment manufacturing sector
as well as the textile industry and the textile clothing and apparel industry.The Company and its subsidiaries (collectively referred to as the “the Group”) are mainly engaged in the research and
development production and sales of medical consumables and consumer goods. The product categories of the medical
consumables segment are divided into traditional wound care and dressing products high-end wound dressing products
operating room consumable products infection prevention products health and personal care products and other products;
the product categories of the consumer goods segment are divided into wet and dry wipes sanitary napkins baby clothing
and supplies adult apparel and other non-woven/woven products.Domicile of the Company: F42 Building 2 Huilong Business Center Shenzhen North Railway Station Area Minzhi
Subdistrict Longhua District Shenzhen City.The parent of the Group is Winner Group Limited incorporated in the Cayman Islands.The financial statements were approved and authorised for issue by the board of directors on 20 April 2026.
145IV. Basis of preparation of the financial statements
1. Basis of preparation
These financial statements have been prepared in accordance with Accounting Standards for Business Enterprises - Basic
Standard and specific accounting standards interpretations and other relevant provisions issued subsequently by the Ministry
of Finance (the “MOF”) (collectively referred to as “ASBEs”). In addition the financial statements also disclose relevant
financial information in accordance with No.15 of Compilation Rules for Information Disclosure by Companies Offering
Securities to the Public - General Provisions of Financial Reports.
2. Going concern
The financial statements have been prepared on a going concern basis.V. Material accounting policies and significant estimates
Tips of specific accounting policies and significant estimates:
The Group formulates specific accounting policies and accounting estimates according to the actual characteristics of its
production and operation which are mainly reflected in aspects such as the allowance for bad debts of accounts receivable
the inventory valuation method the provision for inventory write-downs the amortization of long-term prepaid expenses
the depreciation of right-of-use assets the depreciation of fixed assets the amortization of intangible assets share-based
payments the impairment of goodwill and the recognition and measurement of revenues.
1. Statement of compliance with Accounting Standards for Business Enterprises
The financial statements present truly and completely the financial positions of the Company and the Group as at 31
December and the financial performance and the cash flows for the year then ended in accordance with Accounting
Standards for Business Enterprises.
2. Accounting year
The accounting year of the Group is a calendar year i.e. from 1 January to 31 December of each year.
3. Operating cycle
The operating cycle of the Group is 12 months.
4. Functional currency
The Company’s functional and presentation currency is Renminbi (“RMB”). The currency unit is RMB Yuan unless
otherwise stated.Each subsidiary joint venture or associate of the Group determines its own functional currency based on the primary
economic environment in which it operates. In preparation of the financial statements their functional currencies are
translated into RMB.
146Section VIII Financial Report 5.Methodology for determining materiality standard and selection rationale
√ Applicable □Not applicable
Items Materiality standard
Important individual accounts receivable with bad debt provisions RMB5 million
Recovery or reversal of significant bad debt provisions for accounts receivable RMB5 million
Write-off of important accounts receivable RMB5 million
Important prepayments aged over one year RMB5 million
Important accounts payable aged over one year RMB5 million
Important contract liabilities aged over one year RMB5 million
The amount incurred or the balance at the
Important construction in progress
end of the period exceeds RMB30 million
Long-term equity investment with closing
Important joint ventures or associates
balance exceeding 0.5% of total assets
Non-controlling interests with closing
Subsidiaries with non-controlling interests that are material to the Company
balance exceeding 2% of net assets
6.Account ing for business combinat ions involving ent i t ies under common control and business
combinations not involving entities under common control
Business combinations involving entities under common control: The assets and liabilities (including goodwill arising
from the ultimate controlling party’s acquisition of the entity being absorbed) that are obtained by the absorbing entity in a
business combination involving entities under common control shall be measured on the basis of their carrying amounts in
the financial statements of the ultimate controlling party at the combination date. The difference between the carrying amount
of the net assets obtained and the carrying amount of the consideration paid for the combination (or the aggregate face value
of shares issued as consideration) shall be adjusted against share capital premium under the capital reserves. If the share
capital premium is not sufficient to absorb the difference any excess shall be adjusted against retained earnings.Business combination not involving entities under common control: the cost of combination is the fair value of the assets
paid liabilities incurred or assumed and equity securities issued by the acquirer on the acquiring date for acquisition of
the control of the acquiree. Where the cost of the combination is higher than the interest in the fair value of the acquiree’s
net identifiable assets goodwill is recognised. If the cost of the combination is lower than the interest in the fair value of
the net identifiable assets acquired the difference is recognised in profit or loss. The acquirer shall measure the acquiree’s
identifiable assets liabilities and contingent liabilities acquired in the business combination that meets the recognition criteria
at their fair values on the acquisition date.The directly related expenses incurred for the business combination are included in profit or loss; the transaction costs
associated with the issue of equity or debt securities for the business combination are included in the initially recognised
amounts of the equity or debt securities.
1477. The criteria of control and preparation of consolidated financial statements
(1) The criterion of control
The scope of the consolidated financial statements which include the financial statements of the Company and all of its
subsidiaries is determined on the basis of control. Control is achieved when the Company is exposed or has the following:
(a) power over the investee; (b) exposure or rights to variable returns from its involvement with the investee; and (c) the
ability to use its power over the investee to affect the amount of the investor’s returns.
(2) Consolidation procedures
The Company regards the whole enterprise group as an accounting entity and prepares consolidated financial statements
in accordance with unified accounting policies to reflect the overall financial position financial performance and cash flow
of the enterprise group. The impact of internal transactions between the Company and its subsidiaries and between the
subsidiaries are offset. If the internal transaction indicates that impairment loss has occurred to relevant assets such loss
shall be recognised in full. If the accounting policies or the accounting period of a subsidiary are different from those of the
Company necessary adjustments are made based on the Company’s accounting policies or accounting period in preparing the
consolidated financial statements.The minority shareholders’ share of the subsidiary’s owners’ equity net profit or loss and current comprehensive income shall
be separately listed under the owners’ equity in the consolidated balance sheet under the net profit and total comprehensive
income in the consolidated income statement. Where the loss for the current period attributable to non-controlling interests of
a subsidiary exceeds the non-controlling interests of the opening balance of equity of the subsidiary the excess shall still be
allocated against the non-controlling interests.
(2.1) Increase of subsidiaries or business
During the reporting period for subsidiaries or business acquired through business combinations involving entities under
common control the financial performance and cash flows of the entity from the beginning of the period in which the
combination occurs to the end of the reporting period shall be consolidated. Adjustments are made to the opening balance in
the consolidated financial statements and related items in the comparative financial statements as if the reporting entity after
the combination had been in existence since the date the ultimate controlling party first obtained the control.If control over an invested entity under common control is achieved due to reasons such as additional investment for the
equity investments held before obtaining the control of the entity being absorbed the recognised relevant profit or loss other
comprehensive income and other net asset changes from the later of the date of obtaining the original equity and the date
when both the absorbing entity and the entity being absorbed are under common control up to the combination date shall
be offset against the opening balance of retained earnings in the comparative financial statement period or the profit or loss.During the reporting period if subsidiaries or business are increased due to business combination involving entities not under
common control it shall be included in the consolidated financial statements as of the acquisition date on the basis of the fair
value of all identifiable assets liabilities and contingent liabilities determined on the acquisition date.If it is able to exercise control over the invested entity that is not under common control due to additional investment or other
reasons the equity held by the acquiree before the acquisition date shall be re-measured according to the fair value of the
equity on the acquisition date and the difference between the fair value and the book value shall be included as investment
income in profit or loss. Other comprehensive income which can be reclassified into profit or loss in the future and other
changes in owners’ equity under the equity method as related to the acquiree’s equity held before the acquisition date are
converted to the investment income of the current period as of the acquisition date.
148Section VIII Financial Report (2.2) Disposal of a subsidiary
* General disposal method
When the Company loses the control over the invested entity due to disposal of part of the equity investment or other reasons
the residual equity investment after the disposal shall be re-measured at its fair value on the date of losing control. The
difference between the sum of the consideration acquired by disposal of the equity and the fair value of the residual equity
minus the sum of the share of the net assets of the original subsidiary continuously calculated from the acquisition date or the
combination date and the goodwill according to the original shareholding ratio shall be included in the investment income in
the period of loss of control. Other comprehensive income related to the equity investment of the original subsidiary that can
be reclassified into profit or loss in the future and other changes in owners’ equity under the equity method are converted to
the investment income in the period of loss of control.* Disposal of a subsidiary step by step
For disposal of the equity investment in the subsidiary by steps through multiple transactions till loss of the control the
terms conditions and economic impact of the disposal on each transaction in respect of the equity investment of the
subsidiary are subject to one or more of the following circumstances which generally indicate that the multiple transactions
are package deals:
i. The transactions were entered into simultaneously or with consideration of their mutual influence;
ii. These transactions as a whole can only achieve a complete business result;
iii. The occurrence of one transaction depends on the occurrence of at least one other transaction;
iv. A transaction may not be economically viable when viewed in isolation but it becomes economically viable when
considered together with other transactions.If each transaction belongs to a package deal each transaction shall be subject to accounting treatment as a deal for disposal
of subsidiary and loss of the control; the difference between the disposal price and the share of net assets of the subsidiary
corresponding to the disposal of investment before the loss of control is recognised as other comprehensive income in the
consolidated financial statements and transferred to the profit or loss in the period of loss of control.If each transaction does not belong to a package deal the equity investment of the subsidiary shall be subject to accounting
treatment without loss of control before losing the control; and accounting treatment shall be carried out in accordance with
the general disposal method of the subsidiary when losing the control.
(2.3) Acquisition of non-controlling interests in subsidiaries
The difference between the long-term equity investment obtained due to the purchase of minority equity and the share of the
net assets to be enjoyed and continuously calculated from the acquisition date or combination date according to the increased
shareholding ratio is adjusted against the share capital premium in the capital reserve in the consolidated balance sheet; if the
share capital premium in the capital reserve is not sufficient to offset the difference the retained earnings shall be adjusted.
(2.4) Partial disposal of equity investment in subsidiaries without loss of control
The difference between the disposal price and the disposal of long-term equity investment and the share of the net assets to
be enjoyed and continuously calculated from the acquisition date or combination date is adjusted against the share capital
premium in the capital reserve in the consolidated balance sheet; if the share capital premium in the capital reserve is not
sufficient to offset the difference the retained earnings shall be adjusted.
1498. Classification of joint arrangements and accounting treatment for joint operations
9. Recognition criteria for cash and cash equivalents
Cash comprises the Group’s cash on hand and deposits that can be readily withdrawn on demand. Cash equivalents are short-
term highly liquid investments that are readily convertible into known amounts of cash subject to an insignificant risk of
changes in value.
10. Foreign currency transactions and foreign currency translation
(1) Foreign currency transactions
Foreign currency transaction adopts the spot exchange rate on the date of the transaction as the conversion exchange rate to
convert the foreign currency amount into RMB for reporting.At the balance sheet date the balance of monetary items measured in a foreign currency is converted by using the spot
exchange rates at the balance sheet date. Exchange differences arising therefrom are recognised in profit or loss except the
exchange differences related to a specific-purpose borrowing denominated in foreign currency that qualify for capitalization
are treated according to the capitalization of borrowing costs.Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates
on initial recognition and the amount denominated in the functional currency is not changed. Non-monetary items measured
at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was measured. The
resulting exchange differences are recognised in profit or loss or other comprehensive income depending on the nature of the
non-monetary items.
(2) Conversion of financial statements denominated in foreign currencies
For foreign operations the Group translates their functional currency amounts into RMB when preparing the financial
statements as follows: as at the balance sheet date the assets and liabilities are translated using the spot exchange rates at the
balance sheet date and equity items other than “unappropriated profit” are translated at the spot exchange rates at the dates
of transactions. Revenue and expense items in the income statement are translated using the annual average exchange rate.The resulting exchange differences are recognised in other comprehensive income. On disposal of a foreign operation the
component of other comprehensive income relating to that particular foreign operation is recognised in profit or loss. If the
disposal only involves a portion of a particular foreign operation the component of other comprehensive income relating to
that particular foreign operation is recognised in profit or loss on a pro-rata basis.Foreign currency cash flows and the cash flows of foreign subsidiaries are translated using the weighted average exchange
rates for the period during which the cash flows occur (unless this is inappropriate due to exchange rate fluctuations in which
case the spot exchange rates prevailing on the dates of cash flows are used). The effect of exchange rate changes on cash is
separately presented as an adjustment item in the statement of cash flows.
150Section VIII Financial Report 11. Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity
instrument of another entity.
(1) Classification of financial instrument
Based on the financial asset’s contractual cash flow characteristics and the Group’s business model for managing them
financial assets at initial recognition are classified as: financial assets at amortised cost financial assets at fair value through
other comprehensive income and financial assets at fair value through profit or loss.The Group classifies financial assets as measured at amortised cost if they meet all of the following conditions and are not
designated as at fair value through profit or loss:
1) The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual
cash flows;
2) The contractual cash flows consist solely of payments of principal and interest on the principal amount outstanding.
The Group classifies financial assets as measured at fair value through other comprehensive income (debt instruments) if they
meet all of the following conditions and are not designated as at fair value through profit or loss:
1) The financial asset is held within a business model with the objectives to collect contractual cash flows and sell the
financial asset;
2) The contractual cash flows consist solely of payments of principal and interest on the principal amount outstanding.
For investments in equity instruments not held for trading the Group may at initial recognition irrevocably designate them
as financial assets at fair value through other comprehensive income (equity instruments). The designation is made on an
individual investment basis and the underlying investment meets the definition of an equity instrument from the issuer’s
perspective.Other than the financial assets measured at amortised cost and those measured at fair value through other comprehensive
income as described above the Group classifies all remaining financial assets as financial assets at fair value through profit or
loss. On initial recognition if accounting mismatches can be eliminated or significantly reduced the Group may irrevocably
designate financial assets that would have been classified as measured at amortised cost or at fair value through other
comprehensive income as financial assets measured at fair value through profit or loss.The Company’s financial liabilities are on initial recognition classified into financial liabilities at fair value through profit or
loss or financial liabilities measured at amortised cost.A financial liability may be designated at initial recognition as at fair value through profit or loss if it meets any of the
following conditions:
1) This designation eliminates or significantly reduces accounting mismatches;
2) Based on the enterprise risk management or investment strategy set forth in the formal written documents the portfolio
of financial liabilities or the portfolio of financial assets and financial liabilities is managed and evaluated on the basis of fair
value and reported to key management personnel within the enterprise on this basis;
1513) The financial liabilities include embedded derivatives that need to be separated.
(2) Recognition basis and measurement method for financial instruments
(2.1) Financial assets measured at amortized cost
Financial assets measured at amortized cost include notes receivable accounts receivable other receivables long-term
receivables debt investments etc. They are initially recognized at fair value with related transaction costs included in the
initial carrying amount. Accounts receivable that do not contain a significant financing component as well as for which the
Group has applied the practical expedient of not adjusting the effect of a significant financing component due within one year
are initially recognized at the contractual transaction price. Interest calculated using the effective interest method during the
holding period is recognized in profit or loss for the current period. Upon collection or disposal the difference between the
proceeds received and the carrying amount of the financial asset is recognized in profit or loss for the current period.
(2.2) Financial assets at fair value through other comprehensive income (debt investments)
Financial assets (debt instruments) measured at fair value through other comprehensive income includes receivables
financing and other debt investments which are initially measured at fair value with related transaction costs included in
the initially recognised amount. Such financial assets are subsequently measured at fair value and changes in fair value are
included in other comprehensive income except for interest calculated using the effective interest method impairment losses
or gains and exchange losses or gains. On derecognition the accumulated gains or losses previously recognised in other
comprehensive income are transferred out and recognised in profit or loss.
(2.3) Financial assets at fair value through other comprehensive income (equity investments)
Financial assets measured at fair value through other comprehensive income (equity instruments) include other equity
instrument investments which are initially measured at fair value with related transaction costs included in the initially
recognised amount. Such financial assets are subsequently measured at fair value and changes in fair value are recognised in
other comprehensive income. Dividends obtained are recognised in profit or loss. On derecognition the accumulated gains or
losses previously recognised in other comprehensive income are transferred out and recognised in retained earnings.
(2.4) Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss include financial assets held for trading derivative financial assets and
other non-current financial assets which are initially measured at fair value with related transaction costs included in profit
or loss. Such financial assets are subsequently measured at fair value and changes in fair value are recognised in profit or
loss.
(2.5) Financial liabilities at fair value through profit or loss
Financial liabilities measured at fair value through profit or loss include financial liabilities held for trading and derivative
financial liabilities which are initially measured at fair value with related transaction costs included in profit or loss.Such financial assets are subsequently measured at fair value and changes in fair value are recognised in profit or loss. On
derecognition the difference between the carrying amount and the consideration paid is recognised in profit or loss.
(2.6) Financial liabilities measured at amortised cost
Financial liabilities measured at amortised cost include short-term borrowings notes payable accounts payable other
payables long-term borrowings and long-term payables which are initially measured at fair value with related transaction
costs included in the initial recognition amount. Interest calculated using the effective interest method during the holding
period is included in the current profit or loss. On derecognition the difference between the consideration paid and the
carrying amount of the financial liability is recognised in profit or loss.
152Section VIII Financial Report (3) Derecognition of financial liabilities
A financial liability (or part thereof) is derecognised when the present obligation is discharged in whole or in part. If the
Group enters into an agreement with the creditor to replace an existing financial liability with a new financial liability under
terms that are substantially different the existing liability shall be derecognised and the new financial liability recognised
simultaneously.When the terms of an existing financial liability are substantially modified in whole or in part the original financial liability
(or the relevant part) shall be derecognised and the modified liability shall be recognised as a new financial liability.When a financial liability is derecognised in whole or in part the difference between the carrying amount of the derecognised
liability and the consideration paid (including transferred non-cash assets or newly assumed financial liabilities) shall be
recognised in profit or loss.If the Group repurchases part of a financial liability it shall allocate the carrying amount of the entire liability between the
part continued to be recognised and the part derecognised based on their relative fair values at the repurchase date. The
difference between the carrying amount allocated to the derecognised part and the consideration paid (including transferred
non-cash assets or newly assumed financial liabilities) shall be recognised in profit or loss.
(4) Determination method of fair value for financial assets and financial liabilities
For financial instruments with an active market the fair value is determined based on quoted prices in the active market. For
financial instruments without an active market the fair value is determined using valuation techniques. For valuation the
Group uses valuation techniques that are appropriate under current circumstances and supported by sufficient available data
and other information and selects inputs consistent with those that market participants would consider in transactions of
relevant asset or liability with priority given to relevant observable inputs. Unobservable inputs are used only when relevant
observable inputs are not available or their procurement is impracticable.
(5) Testing and accounting methods for impairment of financial instruments
The Group accounts for impairment of financial assets measured at amortised cost financial assets measured at fair value
through other comprehensive income (debt instruments) and financial guarantee contracts based on expected credit losses
(“ECLs”).The Group calculates the probability-weighted amount of the present value of the difference between the cash flows
receivable under the contract and the cash flows expected to be received taking into account reasonable and supportable
information such as past events current conditions and forecasts of future economic conditions with the risk of default as the
weight and recognises ECLs.For receivables and contract assets arising from transactions defined in Accounting Standards for Business Enterprises No.14
- Revenue regardless of whether they contain significant financing components the Company elects to apply the simplified
approach to recognise a loss allowance based on lifetime ECLs.For lease receivables arising from transactions defined in Accounting Standards for Business Enterprises No. 21 - Leases the
Group elects to apply the simplified approach to recognise a loss allowance based on lifetime ECLs.For other financial assets than those under the simplified approach the Group assesses the changes in credit risk on the
financial instruments since initial recognition at each balance sheet date.The Group compares the risk of a default occurring as at the balance sheet date with the risk of a default as at the date of
initial recognition to determine relative changes in the risk of a default occurring of the financial instrument in the expected
lifetime and assess whether the credit risk of the financial instrument has increased significantly since initial recognition.
153Generally the Group considers that the credit risk of a financial instrument has increased significantly when it is more than
30 days past due unless there is reasonable evidence demonstrating that the credit risk has not increased significantly since
initial recognition.If the credit risk has not increased significantly since initial recognition (stage 1) the loss allowance is measured at an
amount equal to 12-month ECLs by the Group and the interest income is calculated according to the carrying amount and
the effective interest rate; if the credit risk has increased significantly since initial recognition but are not credit-impaired
(stage 2) the loss allowance is measured at an amount equal to lifetime ECLs by the Group and the interest income is
calculated according to the carrying amount and the effective interest rate; if such financial assets are credit-impaired after
initial recognition (stage 3) the loss allowance is measured at an amount equal to lifetime ECLs by the Group and the interest
income is calculated according to the amortised cost and the effective interest rate. If the credit risk of financial instruments is
low at the balance sheet date the Group assumes that the credit risk has not increased significantly since initial recognition.For financial assets at fair value through other comprehensive income (debt instruments) the loss allowance is recognised in
other comprehensive income and the impairment loss or gain is recognised in profit or loss without reducing the carrying
amount of the financial assets presented in the balance sheet.If there is objective evidence that a receivable has been credit-impaired the Group makes an impairment provision for the
receivable on an individual basis.Except for the above receivables for which bad debt provision is made on an individual basis the Group classifies the
remaining financial instruments into several groups according to the credit risk characteristics and determines the ECLs on a
group basis.For notes receivable and accounts receivable financing the Group recognises a loss allowance based on lifetime ECLs.Based on the credit risk characteristics of notes receivable and accounts receivable financing they are classified into different
groups:
Item Basis for grouping and method of provision for bad debts
Notes receivable:
For acceptors with high credit ratings (such as large state-owned commercial banks
and listed joint-stock commercial banks) no bad debt provision is made; for acceptors
Bank acceptance bills
that are other banks or financial companies ECLs are analysed based on historical
information to determine whether a bad debt provision is required.As the acceptors are a non-financial institutions the grouping is the same as that for
Commercial acceptance bills accounts receivable (if the notes receivable are transferred from accounts receivable the
aging is calculated on a continuous basis)
Accounts receivable financing
Bank acceptance bills If the acceptor is a bank with a higher credit rating no provision for bad debts is made.
154Section VIII Financial Report The Group’s basis for grouping and method of provision for expected credit losses on notes receivable - commercial
acceptance bills accounts receivable and other receivables are as follows:
Item Group Basis
Accounts receivable:
No provision for bad debts is made for receivables
Receivables from related parties within
No credit risk group within the scope of consolidation unless there is
the scope of consolidation
objective evidence that they cannot be recovered.The accounts receivable are grouped based on their
Due from other clients Aging group
aging as the credit risk characteristic.Other receivables:
The accounts receivable are grouped based on
Receivables such as export tax rebates
No credit risk group their nature as the credit risk characteristic (mainly
and housing funds have no credit risk.including export tax rebates and housing funds).No provision for bad debts is made for amounts
Other receivables from related parties
No credit risk group within the scope of consolidation unless there is
within the scope of consolidation
objective evidence that they cannot be recovered.The accounts receivable are grouped based on
Deposits and guarantee deposits Balance percentage group their nature as the credit risk characteristic (mainly
including deposits and guarantee deposits)
The accounts receivable are grouped based on their
Other receivables Aging group
aging as the credit risk characteristic.Long-term receivables:
The finance lease receivables are grouped based
Finance lease receivables Balance percentage group on their nature of the receivables as the credit risk
characteristic.The accounts receivable are grouped based on
Deposits and guarantee deposits Balance percentage group their nature as the credit risk characteristic (mainly
including deposits and guarantee deposits)
Provision for bad debts of aging group:
Aging Provision ratio for accounts receivables (%) Provision ratio for other receivables (%)
Within 1 year inclusive 5.00 5.00
1 to 2 years 10.00 10.00
2 to 3 years 30.00 30.00
3 to 4 years 50.00 50.00
4 to 5 years 80.00 80.00
Over 5 years 100.00 100.00
155The provision for doubtful accounts of commercial acceptance bills is calculated using the ECL rates applicable to the
accounts receivable mentioned above and the aging of such bills is determined retroactively from the original aging start date
of the corresponding accounts receivable.The Group directly reduces the gross carrying amount of a financial asset when the Group has no reasonable expectations of
recovering a financial asset in its entirety or a portion thereof.
12. Notes receivable
Please refer to “V. 11. Financial Instruments” for detailed information.
13. Accounts receivable
Please refer to “V. 11. Financial Instruments” for detailed information.
14. Receivables financing
Please refer to “V. 11. Financial Instruments” for detailed information.
15. Other receivables
The impairment loss of other receivables (including other receivables long-term receivables etc.) other than accountsreceivable and notes receivable shall be measured by referring to “Note V.11. Financial Instruments 6) Testing andaccounting methods for impairment of financial instruments (excluding receivables)”.
16. Contract assets
The Group presents contract assets or contract liabilities depending on the relationship between the satisfaction of its
performance obligations and the customer’s payment in the balance sheet. The Group presents its right to consideration in
exchange for goods or services as a contract asset (the right to consideration is conditional on other factors excluding the
passage of time). The Group’s unconditional (only conditional on the passage of time) right to consideration from customers
is presented separately as receivables. The Group presents its obligation to transfer goods or services to a customer for which
the Group has received consideration or the Group has a right to an amount of consideration that is unconditional (i.e. a
receivable) from the customer as a contract liability. The Group presents the net amount of the contract assets and contract
liabilities under the same contract.
17. Inventories
(1) Category and cost of inventories
Inventories are classified as: raw materials low-value consumables goods in stock work in progress shipped goods
outsourced processing materials packaging materials etc.Inventories are initially carried at cost which includes purchase cost processing cost and other expenses incurred to bring the
inventories to their current location and condition.
(2) Valuation method of inventories shipped
For purchased finished products cost is determined under the moving weighted average method when they are sold and
shipped; for self-manufactured finished goods cost is determined under the standard cost method at the time of delivery with
variances between actual cost and standard cost allocated at period-end based on the inventory-to-sales ratio.
156Section VIII Financial Report (3) Inventory system
The perpetual inventory system is adopted.
(4) Amortisation method for low-value consumables and packaging materials
Low-value consumables are amortised at 50% upon initial use and 50% upon disposal; Packaging materials are amortised
using the one-time write-off method.
(5) Recognition criteria and accrual method of provision for write-down of inventories
At the balance sheet date inventories shall be stated at the lower of cost and net realisable value. When the cost of
inventories is higher than its net realisable value a provision for write-down of inventories shall be made. Net realisable
value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated
costs necessary to make the sale and relevant taxes.For inventories directly used for sale such as finished goods goods in stock and materials for sale the net realisable value
shall be determined in the ordinary course of business at the estimated selling price less the estimated costs necessary to
make the sale and relevant taxes; for inventories of materials that need to be processed the net realisable value shall be
determined in the ordinary course of production and operation at the estimated selling price of finished goods less the
estimated costs of completion and the estimated costs necessary to make the sale and relevant taxes; for inventories held for
the execution of sales contracts or labour contracts the net realisable value is calculated based on the contract price and if
the quantity of inventories held is more than the quantity ordered in the sales contract the net realisable value of the excess
part of inventories is calculated based on the general sales price taking into account the market sales price and the estimated
discount rate (if applicable).After the provision for provision for the write-down of inventory has been made if the factors that caused the write-down
have ceased to exist resulting in the net realizable value of the inventory exceeding its carrying amount the previously
recognised provision for the write-down of inventory shall be reversed within the original write-down amount. The reversal
amount shall be recognised in profit or loss.
18. Financial assets held for trading
19. Debt investments
20. Other debt investments
21. Long-term receivables
Please refer to “Note 41. Leases (2) Accounting treatment for leases as a lessor 2) Accounting treatment for finance leases”
for details.
22. Long-term equity investments
Long-term equity investments include equity investments in subsidiaries joint ventures and associates.
(1) Criteria for joint control and significant influence
Joint control is the contractually agreed sharing of control of an arrangement which exists only when decisions about
the relevant activities require the unanimous consent of the parties sharing control. The investee is a joint venture of the
Company if the Company and other parties jointly control the investee and enjoy rights to the net assets of the investee.
157Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not
control or joint control with other parties over those policies. The investee is an associate of the Company if the Company is
able to exercise significant influence over the investee.
(2) Determination of initial investment cost
1) Long-term equity investments arising from a business combination
For a long-term equity investment in a subsidiary arising from a business combination involving enterprises under common
control the initial investment cost of the long-term equity investment shall be the share of the carrying amount of the
owner’s equity in the acquiree in the consolidated financial statements of the ultimate controlling party on the combination
date. The difference between the initial investment cost of the long-term equity investment and the carrying amount of the
consideration paid shall be adjusted against capital premium under the capital reserves; if the capital premium is not sufficient
to absorb the difference any excess shall be adjusted against retained earnings. If the investee under common control can be
controlled due to additional investment and other reasons the difference between the initial investment cost of the long-term
equity investment recognised according to the above principles and the sum of the carrying amount of the long-term equity
investment before the combination plus the carrying amount of the new consideration paid for the further acquisition of
shares on the combination date shall be adjusted against capital premium; if the capital premium is not sufficient to absorb the
difference any excess shall be adjusted against retained earnings.For a long-term equity investment in a subsidiary arising from a business combination not involving enterprises under
common control the initial investment cost of the long-term equity investment is the combination cost determined on the
acquisition date. If the investee not under common control can be controlled due to additional investment and other reasons
the initial investment cost shall be the sum of the carrying amount of the equity investment originally held and the new
investment cost.
2) Long-term equity investments not arising from a business combination
For long-term equity investments acquired through cash payment the initial investment cost is determined based on the
actual purchase price paid.For long-term equity investments acquired by issuing equity securities the initial investment cost shall be the fair value of the
equity securities issued.i) Long-term equity investment under the cost method
For a long-term equity investment where the Company can exercise control over the investee the long-term investment
is accounted for using the cost method in the Company’s individual financial statements. Control is achieved when the
Company is exposed or has rights to variable returns from its involvement with the investee and has the ability to affect
those returns through its power over the investee.Under the cost method the long-term equity investment is measured at its initial investment cost. When additional investment
is made or the investment is recouped the cost of long-term equity investment is adjusted accordingly. Cash dividends or
profit distributions declared by the investee are recognised as investment income in profit or loss.ii) Long-term equity investment under the equity method
Long-term equity investments in associates and joint ventures are accounted for using the equity method. Where the initial
investment cost of a long-term equity investment exceeds the interest in the fair value of the investee’s identifiable net assets
at the acquisition date no adjustment is made to the initial investment cost; where the initial investment cost is less than the
interest in the fair values of the investee’s identifiable net assets at the acquisition date the difference is charged to profit or
158Section VIII Financial Report loss and the cost of the long-term equity investment is adjusted accordingly.The Company recognises its share of the investee’s profit or loss as well as its share of the investee’s other comprehensive
income as investment income or loss and other comprehensive income and adjusts the carrying amount of the investment
accordingly; the carrying amount of the investment is reduced based on the Company’s share of any profit distributions
or cash dividends declared by the investee; the Company’s share of the investee’s equity changes other than those arising
from the investee’s profit or loss other comprehensive income or profit distribution (“other changes in owners’ equity”) is
recognised in the Company’s equity and the carrying amount of the long-term equity investment is adjusted accordingly.The Company recognises its share of the investee’s net profit or loss other comprehensive income and other changes in
owners’ equity based on the fair value of the investee’s identifiable assets at the acquisition date and recognises its share
of the investee’s net profit and other comprehensive income after making adjustments in accordance with the Group’s
accounting policies and reporting periods.Unrealised profits and losses from transactions with its joint ventures and associates are eliminated to the extent of the
Group’s investments in the associates or joint ventures and investment income is recognised on this basis except where the
assets invested or sold constitute a business. Any loss arising from such transactions which are attributable to an impairment
loss shall be recognised at its entirety.The Group’s share of losses of the associates or joint ventures is recognised to the extent that the carrying amount of the
investment together with any long-term interests that in substance form part of its net investment in the associates or joint
ventures is reduced to zero except that the Company has the obligations to assume further losses. For joint ventures or
associates that subsequently report net profits the Group resumes recognition of its profit-sharing amount after offsetting
previously unrecognised loss allocations.iii) Disposal of long-term equity investments
For disposal of long-term equity investments the difference between the carrying amount and the actual acquisition price is
included in profit and loss.The disposal of part of a long-term equity investment accounted for under the equity method where the remaining equity
continues to be accounted for under the equity method shall result in the other comprehensive income originally recognised
under the equity method being carried forward on the same basis as the investee’s direct disposal of the related assets or
liabilities proportionally. Other changes in owners’ equity shall be proportionally carried forward to profit or loss.When the disposal of equity investments results in the loss of joint control or significant influence over the investee the
other comprehensive income originally recognised under the equity method shall be accounted for on the same basis as the
investee’s direct disposal of the related assets or liabilities upon discontinuation of the equity method. All other changes in
owners’ equity shall be fully transferred to profit or loss upon discontinuation of the equity method.When the disposal of part of equity investments leads to loss of control over the investee in the preparation of individual
financial statements: if the Company can still exercise joint control or significant influence over the investee with the
remaining equity the remaining equity shall be accounted for using the equity method with retrospective adjustment as
if the equity method had been applied since initial acquisition and the other comprehensive income recognised before
acquiring control shall be proportionally carried forward on the same basis as the investee’s direct disposal of related assets
or liabilities while other changes in owners’ equity recognised under the equity method shall be proportionally carried
forward to profit or loss; if the Company can no longer exercise joint control or significant influence over the investee with
the remaining equity the remaining equity shall be recognised as a financial asset with the difference between its fair value
and carrying amount at the date of losing control recognised in profit or loss and all other comprehensive income and other
159changes in owners’ equity recognised before acquiring control shall be fully carried forward.
Where the disposal of an investment in a subsidiary through multiple transactions in steps until loss of control constitutes
bundled transactions all such transactions shall be accounted for as a single transaction involving the disposal of the
subsidiary investment resulting in loss of control. In the individual financial statements for each disposal before the loss
of control the difference between the disposal consideration and the carrying amount of the part of the long-term equity
investment disposed of shall be initially recognised in other comprehensive income and subsequently carried forward in its
entirety to profit or loss when control is lost. If it does not constitute bundled transactions each transaction shall be accounted
for separately.
23. Investment properties
Measurement model of investment properties
Cost method measurement
Depreciation or amortisation method
Investment properties are properties held to earn rentals or for capital appreciation or both such as buildings leased out
(including buildings that are constructed or developed for rental purposes after completion as well as buildings that are under
construction or development and intended for future rental use). An investment property is measured initially at cost. If the
economic benefits relating to an investment property will probably flow in and the cost can be reliably measured subsequent
costs incurred for the property are included in the cost of the investment property. Otherwise subsequent costs are recognised
in profit or loss as incurred. The Group uses the cost model for the subsequent measurement of its investment properties. For
investment properties measured under the cost model the same depreciation policy as the Group’s fixed assets is applied to
buildings for lease.
24. Fixed assets
(1) Recognition criteria
1) Recognition and initial measurement of fixed assets
Fixed assets refer to tangible assets held for the purpose of producing goods providing services leasing or operating
management and with a service life of more than one accounting year. Fixed assets are recognised when both of the
following conditions are met:
i) The economic benefits associated with the asset will probably flow into the Company;
ii) The cost of the asset can be measured reliably.Fixed assets are initially measured at cost (taking into account the impact of expected disposal expenses). The cost of a
purchased fixed asset comprises the purchase price relevant taxes and any directly attributable expenditure for bringing
the asset to working condition for its intended use. Subsequent expenditures related to fixed assets are recognised in the
cost of fixed assets when it is probable that the economic benefits related thereto will flow in and the cost can be measured
reliably; the carrying amount of the component of the fixed asset that is replaced shall be derecognised; all other subsequent
expenditures are recognised in profit or loss as incurred.
160Section VIII Financial Report (2) Depreciation method
Percentage of estimated Annual
Category Depreciation method Depreciation period
residual value depreciation rate
Buildings Straight-line method 10-40 years 0.00%-10.00% 2.25%- 10.00%
Machinery Straight-line method 2-15 years 5.00%-10.00% 6.00%-47.50%
Vehicles Straight-line method 3-10 years 5.00%-10.00% 9.00%-31.67%
Electronic equipment office
Straight-line method 2-10 years 5.00%-10.00% 9.00%-47.50%
equipment and others
Land ownership Others N/A N/A N/A
No provision for depreciation is made for land ownership.
25. Construction in progress
Construction in progress is measured at the actual cost incurred. The actual cost includes construction cost installation cost
borrowing costs eligible for capitalisation and other necessary expenditures incurred before the construction in progress
reaches the working condition for its intended use. An item of construction in progress is transferred to fixed assets when the
asset is ready for its intended use and depreciation commences from the following month.The criteria and timing for carrying forward construction in progress of the Company to fixed assets are as follows:
Category Criteria and timing for transfer to fixed assets
(1) The main construction works and supporting works have been substantially completed; (2)
the construction project meets the predetermined design requirements and passes completion
acceptance procedures conducted by relevant parties including survey design construction
Buildings supervision fire safety and quality inspection authorities; (3) for construction projects that have
reached their working condition for intended use but have not completed final settlement they
shall be transferred to fixed assets at an estimated value based on the actual project cost from the
date when they reach the working condition for intended use.
(1) The relevant equipment and supporting facilities have been completely installed; (2) the
equipment has been debugged and can maintain normal and stable operation for a sustained
Machinery period; (3) the production equipment is capable of consistently manufacturing qualified
products over an extended duration; (4) the equipment has been formally accepted by both asset
management personnel and operational users.Electronic equipment (1) The relevant equipment and supporting facilities have been completely installed; (2) the
office equipment and equipment has been debugged to reach the working condition for intended use; (3) the equipment
others has been formally accepted by both asset management personnel and operational users.
16126. Borrowing costs
(1) Recognition principles for capitalization of borrowing costs
The borrowing costs that are directly attributable to the acquisition construction or production of a qualifying asset are
capitalised and recognised in asset cost. The amounts of other borrowing costs incurred are recognised as an expense in the
period in which they are incurred.Qualifying assets are fixed assets investment properties inventories and other assets that require a considerable period of
time for acquisition construction or production activities to reach their condition for intended use or sale.
(2) Capitalisation period of borrowing costs
Capitalisation period refers to the period from the time point when the capitalisation of borrowing costs starts to the time
point when the capitalisation of borrowing costs ceases excluding the period when the capitalisation of borrowing costs is
suspended.Borrowing costs are capitalised when all of the following conditions are met:
1) Expenditures on assets have been incurred including those in the form of cash payment non-cash assets transfer or
interest-bearing liabilities for the acquisition construction or production of qualifying assets;
2) Borrowing costs have been incurred;
3) The activities that are necessary to acquire construct or produce the asset for its intended use or sale have been
undertaken.Capitalisation of borrowing costs ceases when the qualifying asset being acquired constructed or produced gets ready for its
intended use or sale.
(3) Suspension period of capitalisation
Capitalisation of borrowing costs is suspended during periods in which the acquisition construction or production of a
qualifying asset is suspended abnormally when the suspension is for a continuous period of more than 3 months. The
borrowing costs shall continue to be capitalised if such suspension constitutes a necessary procedure to prepare the qualifying
asset being purchased constructed or produced for its intended use or sale. Borrowing costs incurred during these periods are
recognised in profit or loss until the acquisition construction or production is resumed and the borrowing costs continue to be
capitalised.
(4) Calculation of capitalisation rate and amount of borrowing costs
For specific borrowings for the acquisition and construction or production of qualifying assets the capitalisation amount of
borrowing costs is the actual borrowing costs incurred in the current period of the specific borrowings less the interest income
from the unused borrowings deposited in banks or the investment income from temporary investment.For general borrowings used for the acquisition and construction or production of qualifying assets the capitalisation amount
of borrowing costs is calculated by applying the capitalisation rate on the general borrowings to the weighted average of the
excess of the cumulative expenditures on the asset over the expenditures on the asset funded by the specific borrowings. The
capitalisation rate is calculated based on the weighted average effective interest rate of general borrowings.During the period of capitalisation the exchange difference between the principal and interest of specific borrowings in
foreign currency is capitalised and included in the cost of qualifying assets. Exchange differences arising from the principal
and interest of foreign currency borrowings other than specific borrowings in foreign currency are included in profit or loss.
162Section VIII Financial Report 27. Biological assets
28. Oil and gas assets
29. Intangible assets
(1) Useful life and its determination basis estimation amortization method or review procedures
1) Valuation of intangible assets
i) Intangible assets are initially measured at cost when the Company obtains them;
The cost of purchased intangible assets includes the purchase price relevant taxes and other expenses directly attributable to
the asset for its intended use.ii) Subsequent measurement
The service lives of intangible assets are assessed when the Company obtains them.For intangible assets with a finite useful life amortisation shall be carried out within the period during which they bring
economic benefits to the Company. If the period over which an intangible asset can bring economic benefits to the enterprise
cannot be foreseen it shall be regarded as an intangible asset with an indefinite useful life and shall not be amortised.
2) Estimation of useful lives for intangible assets with finite useful lives
Item Expected useful life Determination basis of expected useful life.Land use rights 38-50 years The land use right certificate specifies the term of use.Software use rights 2-8 years Management expects the useful life
Trademarks 5-10 years The trademark use right certificate specifies the benefit period.Patents 5-10 years The patent use right certificate specifies the benefit period.Royalty 3 years Contractual useful life
Client relationships 10 years Management expects the useful life.
3) Determination basis for intangible assets with indefinite useful lives and procedures for reviewing their useful lives
During the reporting period the Group had no intangible assets with indefinite useful lives.
(2) Classification of research and development expenditure and related accounting treatment
The Company’s research and development (R&D) expenditure include all costs directly related to R&D activities including
employee compensation for R&D personnel direct material inputs depreciation and amortisation expenses and other
expenses. These costs are classified as follows: employee compensation for R&D personnel includes salaries bonuses
social insurance and housing fund contributions for employees directly engaged in R&D activities; direct material inputs
include raw and auxiliary materials directly consumed in R&D activities; depreciation and amortisation expenses cover the
depreciation of fixed assets and amortisation of intangible assets exclusively used for R&D; other expenses include travel
costs testing expenses consulting expenses and other expenses directly related to R&D activities.
4) Specific criteria for distinguishing between research phase and development phase
The Company classifies the expenditures on an internal research and development project into expenditure on the research
163phase and expenditure on the development phase.
Research phase: the phase involving original and planned investigation or research activities aimed at acquiring and
comprehending new scientific or technological knowledge.Development phase: the phase in which research findings or other knowledge are applied to a plan or design—prior to
commercial production or use—for the production of new or substantially improved materials devices products or other
outputs.
5) Specific conditions for capitalisation of expenditure on development phase
Expenditure on the research phase is recognised in profit or loss as incurred. Expenditure on the development phase is
recognised as intangible assets when the Company can demonstrate all of the following or included in profit or loss if not:
i) the technical feasibility of completing the intangible asset so that it will be available for use or sale;
ii) the intention to complete the intangible asset and use or sell it;
iii) how the intangible asset will generate probable future economic benefits (among other things the Company can
demonstrate the existence of a market for the output of the intangible asset or the intangible asset itself or if it is to be used
internally the usefulness of the intangible asset);
iv) the availability of adequate technical financial and other resources to complete the development and the ability to use or
sell the intangible asset; and
v) the ability to measure reliably the expenditure attributable to the intangible asset during the development phase.When the research phase and the development phase cannot be distinguished the R&D expenditure is recognised in profit or
loss when incurred.The company shall comply with the disclosure requirements of the “Medical Device Business” in the Self-Regulatory
Guidelines for Listed Companies on the Shenzhen Stock Exchange No. 4 - Industry Information Disclosure of the Growth
Enterprise Market.
30. Impairment of long-term assets
Impairment of assets other than inventories deferred tax assets and financial assets is determined in the following way: the
Company assesses at the balance sheet date whether there is any indication that an asset may be impaired; if any indication
exists that an asset may be impaired the Company estimates the recoverable amount of the asset and performs impairment
testing; goodwill arising from a business combination intangible assets with indefinite useful lives and intangible assets not
yet available for use are tested for impairment at least at each year end irrespective of whether there is any indication that the
asset may be impaired.The recoverable amount is determined based on the higher of the net amount of the fair value of the asset less the disposal
expenses and the present value of the expected future cash flows of the asset. The Company estimates the recoverable amount
on an individual basis unless it is not possible to estimate the recoverable amount of the individual asset in which case the
recoverable amount is determined for the asset group to which the asset belongs. Identification of an asset group is based
on whether major cash inflows generated by the asset group are largely independent of the cash inflows from other assets or
asset groups.When the recoverable amount of an asset or asset group is less than its carrying amount the carrying amount is reduced
to the recoverable amount by the Company. The reduction in the carrying amount is treated as an impairment loss and
164Section VIII Financial Report recognised in profit or loss. A provision for impairment loss of the asset is recognised accordingly.For the purpose of impairment testing of goodwill the carrying amount of goodwill is allocated to the relevant asset group
from the acquisition date on a reasonable basis. Each of the related asset groups or sets of asset groups is an asset group or
a set of asset groups that is expected to benefit from the synergies of the business combination and shall not be larger than
an operating segment as determined by the Company. The carrying amount of the related asset group (set of asset groups) to
which goodwill has been allocated for impairment is compared to its recoverable amount. If the carrying amount of the asset
group (set of asset groups) is higher than its recoverable amount the amount of the impairment loss is firstly allocated to
reduce the carrying amount of the goodwill allocated to the asset group (set of asset groups) and then allocated to reduce the
carrying amount of other assets (other than the goodwill) within the asset group (set of asset groups) on a pro-rata basis of
the carrying amount of each asset.Once the above impairment loss is recognised it cannot be reversed in subsequent accounting periods.
31. Long-term prepaid expenses
Long-term prepaid expenses refer to costs that have already been incurred but should be allocated over the current and future
periods with an amortisation period exceeding one year.Long-term prepaid expenses are amortised using the straight-line method over the benefit period. The amortisation period is
as follows:
Items Amortisation period
Decoration expenses 1-10 years
Decoration expenses on leased assets 1-6 years
Others 2-5 years
32. Contract liabilities
The Company presents contract assets or contract liabilities depending on the relationship between the satisfaction of its
performance obligations and the customer’s payment in the balance sheet. The Company presents its obligation to transfer
goods or services to a customer for which the Company has received or should have received consideration from the
customer as a contract liability. The Company presents the net amount of the contract assets and contract liabilities under the
same contract.
33. Employee benefits
(1) Accounting for short-term employee benefits
Employee benefits refer to all forms of consideration or compensation given by the Group in exchange for services rendered
by employees or for termination of employment. Employee benefits include short-term employee benefits post-employment
benefits termination benefits and other long-term employee benefits.
1) Accounting for short-term employee benefits
Occurred short-term employee benefits are recognised as a liability in the accounting period in which an employee provides
services with a corresponding charge to profit or loss or cost of an asset.For the social insurance premium and housing fund paid by the Group for employees as well as the union running costs
165and employee education expenditure provided according to the regulations the corresponding employee benefit amount is
calculated according to the stipulated accrual basis and accrual ratio during the accounting period when employees provide
services to the Group.The employee benefit expenses incurred by the Group are included in profit or loss or related asset costs according to the
actual amount as they are incurred. Non-monetary benefits are measured at fair value.
(2) Accounting for post-employment benefits
1) Defined contribution plan
The Group contributes to the basic pension insurance and unemployment insurance for its employees in accordance with the
relevant regulations of the local government. During the accounting period when employees provide services to the Group
the payable amount calculated based on the local contribution base and proportion is recognised as a liability and recorded in
profit or loss or the cost of related assets.
2) Defined benefit plan
The Group attributes the benefit obligations arising from defined benefit plans to the periods during which employees provide
services using the formula determined using the projected unit credit method with corresponding amounts recognised in
profit or loss or capitalised into the cost of related assets.The deficit or surplus arising from the present value of the defined benefit obligation less the fair value of plan assets is
recognised as a net defined benefit liability or asset. For defined benefit plans in a surplus position the Group measures the
net defined benefit asset at the lower of the surplus in the plan and the asset ceiling.All defined benefit obligations including those expected to be settled within twelve months after the end of the annual
reporting period in which employees render services are discounted using market yields on high-quality corporate bonds
(or government bonds) that are denominated in the same currency and have terms to maturity matching the defined benefit
obligation as at the balance sheet date.The service cost arising from defined benefit plans and the net interest on the net defined benefit liability (asset) are
recognised in profit or loss or capitalised into the cost of related assets. Changes from the remeasurement of the net defined
benefit liability (asset) are recognised in other comprehensive income and will not be subsequently reclassified to profit
or loss. Upon termination of the original defined benefit plan the cumulative amount previously recognised in other
comprehensive income shall be fully transferred to retained earnings within equity.Upon settlement of a defined benefit plan a settlement gain or loss is recognised based on the difference between the present
value of the defined benefit obligation and the settlement price both determined as at the settlement date.
(3) Accounting for termination benefits
The Group provides termination benefits to employees and recognises an employee benefits liability for termination benefits
with a corresponding charge to profit or loss at the earlier of the following dates: (a) when the Company can no longer
withdraw the offer of those benefits resulting from an employment termination plan or a curtailment proposal; and (b) when
the Company recognises costs involving the payment of termination benefits.
(4) Accounting for benefits of other long-term employees
34. Provisions
An obligation related to a contingency shall be recognised by the Group as a provision when the following conditions are
166Section VIII Financial Report met except for contingent considerations and contingent liabilities assumed in a business combination not involving entities
under common control.
(1) The obligation is a present obligation of the Group;
(2) The fulfilment of the obligation is likely to result in an outflow of economic benefits from the Group;
(3) The amount of the obligation can be measured reliably.
A provision is initially measured at the best estimate of the expenditure required to settle the related present obligation taking
into account factors pertaining to a contingency such as the risks uncertainties and time value of money as a whole. Where
the time value of money has a significant impact the best estimate is determined by discounting the relevant future cash
outflows.Where the required expenditures fall within a continuous range and all possible outcomes within that range are equally
probable the best estimate is determined as the midpoint of the range. In all other cases the best estimate is determined as
follows:
(1) For contingent matters involving a single item the best estimate shall be determined based on the most likely outcome;
(2) For contingent matters involving multiple items the best estimate shall be determined by weighting all possible outcomes
by their associated probabilities.Where all or part of the expenditures required to settle a provision are expected to be reimbursed by a third party the
reimbursement shall be recognised as a separate asset when it is virtually certain to be received. The amount recognised shall
not exceed the carrying amount of the provision.The Group reviews the carrying amount of provisions at the balance sheet date. Where conclusive evidence indicates that
the carrying amount no longer reflects the current best estimate the carrying amount shall be adjusted to the current best
estimate.
35. Share-based payment
The Group’s share-based payment transactions represent agreements to grant equity instruments or incur liabilities measured
based on equity instruments in exchange for services received from employees or other parties. The Group’s share-based
payment arrangements are equity-settled share-based payments.Equity-settled share-based payments and equity instruments
An equity-settled share-based payment in exchange for services received from employees is measured at the fair value of the
equity instruments granted to the employees. If such equity-settled share-based payment could vest immediately related costs
or expenses at an amount equal to the fair value on the grant date are recognised with a corresponding increase in capital
reserves. If such equity-settled share-based payment could not vest until the completion of services for a vesting period or
until the satisfaction of a specified performance condition at each balance sheet date during the vesting period the Group
recognises the services received for the current period as related costs and expenses with a corresponding increase in capital
reserves at an amount equal to the fair value of the equity instruments at the grant date based on the best estimate of the
number of equity instruments expected to vest. The fair value is determined using the Black-Scholes option pricing model as
described in Note XIII.2.Where the terms of an equity-settled share-based award are modified as a minimum an expense is recognised as if the terms
had not been modified. In addition an expense is recognised for any modification that increases the total fair value of the
share-based payments or is otherwise beneficial to the employee as measured at the date of modification. If the granted
167equity instruments are cancelled during the vesting period the Group shall treat such cancellation as an accelerated vesting.
The amount that would have been recognised over the remaining vesting period shall be immediately recognised in profit
or loss with a corresponding adjustment to capital reserve. However if a new award is substituted for the cancelled award
and is designated as a replacement on the date that it is granted the cancelled and new awards are treated as if they were a
modification of the original award.
36. Preferred stock perpetual bonds and other financial instruments
37. Revenue
Disclose the accounting policies adopted for revenue recognition and measurement by business type
Revenue from contracts with customers
Revenue from contracts with customers is recognised when the Group has fulfilled its performance obligations in the
contracts that is when the customer obtains control of relevant goods or services. Control of relevant goods or services
refers to the ability to direct the use of the goods or the provision of the services and obtain substantially all of the remaining
benefits from the goods or services.If the contract contains two or more performance obligations the Group shall on the commencement date of the contract
allocate the transaction price to each individual performance obligation in proportion to the stand-alone selling price of the
goods or services promised by such obligation. The Group’s revenue shall be measured according to the transaction price
allocated to each individual performance obligation.The transaction price means the amount of consideration that the Group is expected to be entitled to collect for the transfer
of goods or services to the customer excluding payments collected on behalf of third parties and amounts expected to
be returned to the customer. The Group determines the transaction price based on the terms of the contract and its past
practices and in determining the transaction price it takes into account the impact of variable consideration significant
financing component in the contract non-cash consideration consideration payable to customers and other factors. The
Group determines the transaction price including the variable consideration only to the extent that it is highly probable that a
significant reversal in the amount of cumulative revenue recognised will not occur when the uncertainty associated with the
variable consideration is subsequently resolved. When the contract contains a significant financing component the Group
determines the transaction price based on an amount that reflects the price that a customer would have paid for the goods
or services in cash at the time of obtaining the control of the goods or services and amortises the difference between the
transaction price and the consideration promised in the contract under the effective interest method within the contract period.If one of the following conditions is satisfied it shall be deemed to have performed its performance obligation over time;
otherwise it shall be deemed to have performed its performance obligation at a point in time:
(1) The customer simultaneously receives and consumes the benefits provided by the Group’s performance as the Group
performs;
(2) The customer can control the goods under construction during the Group’s performance;
(3) The goods produced by the Group during the performance are of irreplaceable use and the Group has an enforceable right
to payment for performance completed to date.For the performance obligations performed over time the Group recognises the revenue in accordance with the performance
progress during that period except where the performance progress cannot be reasonably measured. Taking into account
the nature of the goods or services the Group uses the output or input method to determine the performance progress. If
168Section VIII Financial Report the progress towards the complete satisfaction of the performance obligation cannot be reasonably measured but the Group
expects to recover the costs incurred in satisfying the performance obligation the revenue is recognised only to extent of the
costs incurred until such time that the Group can reasonably measure the progress towards the complete satisfaction of the
performance obligation.For performance obligations performed at a point in time the Group recognises revenue at the point in time when the
customer acquires control of the relevant goods or services. In determining whether the customer has acquired control of
goods or services the Group considers the following indications:
(1) The Group has the present right to payment for the goods or services that is the customer is presently obliged to pay for
the goods or services;
(2) The Group has transferred the legal ownership of the goods to the customer that is the customer has the legal ownership
of the goods;
(3) The Group has physically transferred the goods to the customer that is the customer has physically possessed the goods;
(4) The Group has transferred the significant risks and rewards of ownership of the goods to the customer that is the
customer has acquired the significant risks and rewards of ownership of the goods;
(5) The customer has accepted the goods or services etc.
The Group determines its role as principal or agent in transactions based on whether it exercises control over the goods or
services before transferring them to the customer. If the Group has control over the goods or services prior to transfer it acts
as the principal and recognises revenue based on the total consideration received or receivable. Conversely if the Group lacks
control over the goods or services before transfer it acts as the agent and recognises revenue in the form of commissions or
fees according to expectations.Specific principles for recognition of revenue from sale of goods:
(1) General foreign sales: revenue is recognised after commodity inspection customs declaration and shipment of goods (the
Company mainly adopts FOB and CIF methods for export revenue settlement. For a very small amount of revenue using
other settlement methods such as for those adopting EXW terms the buyer designates carrier door-to-door delivery as the
timing of recognition of revenue; for those adopting FCA terms the delivery of products to the carrier designated by the
buyer shall be the timing of recognition of revenue; for those adopting the DDP/DDU terms the delivery of products to the
destination designated by the buyer shall be the timing of recognition of revenue);
(2) General domestic sales: the timing of recognition of sales revenue is based on the customer’s confirmation of receipt (i.e.
the revenue is recognised after the customer signs for the receipt but if the contract stipulates that acceptance is needed the
revenue will be recognised after acceptance by the customer);
(3) E-commerce business (B2C): the timing of recognition of sales revenue is based on the customer’s confirmation of the
completion of the transaction (i.e. the revenue is recognised when the customer initiatively confirms receipt of the goods
on the e-commerce platform or when the e-commerce platform automatically confirms receipt of the goods within a certain
period of time after delivery whichever is earlier);
(4) E-commerce business (B2B): the revenue is recognised in the settlement cycle at the point in time when control of the
product is transferred;
(5) Store sales model: sales revenue is recognised according to settlement time and price (i.e. the revenue is recognised after
the store salesperson receives payment and delivers the goods to the customer);
169(6) Consignment model: the Company delivers the goods to the place designated by the agent and recognises the revenue
after checking the sales list received by the deadline of reconciliation agreed in the contract.Variable consideration
Some of the Group’s contracts with customers including arrangements of sales rebates result in variable consideration. The
Group determines the best estimate of variable consideration by using the expected value method or the most likely amount
method. However the transaction price including variable consideration is only to the extent that it is highly probable that a
significant reversal in the amount of cumulative revenue recognised will not occur when the uncertainty associated with the
variable consideration is subsequently resolved.Additional purchase options
The Group grants customers with loyalty points upon the sale of the goods which can be redeemed by the customers for free
or discounted goods or services. The loyalty points give rise to a separate performance obligation as they provide a material
right to customers. The Group determines the stand-alone selling prices for loyalty points based on the redemption policy
and expected redemption rate. A portion of the transaction price is allocated to the loyalty points awarded to the customer
in proportion to the stand-alone selling price of the goods and the loyalty points. Revenue is recognised when the customer
obtains control of the goods or services redeemed with loyalty points or when the loyalty points expire.Sale with a right of return
For sale with a right of return the Group recognises the revenue in the amount of consideration to which the Group expects
to be entitled in exchange for transferring control of the goods to the customer and recognises the amount expected to be
refunded as a result of the sales return as a refund liability. At the same time an asset recognised for an entity’s right to
recover goods from a customer on settling a refund liability is measured by reference to the carrying amount of the goods less
any expected costs to recover the goods (including potential decreases in the value of the returned goods) that is right-of-
return assets and cost of sales is recognised based on the carrying amount of the transferred goods at the time of transfer of
the goods less the net cost of the asset above. At each balance sheet date the Group re-estimates the future sales return and
remeasures the asset and liability above.Warranties provisions
The Group provides warranties in connection with the sale of goods in accordance with the contract and the relevant laws
and regulations etc. For an assurance-type warranty that provides a customer with the assurance that the good complies with
agreed-upon specifications the Group accounts for the warranty in accordance with “Note V.35 Provisions”.Businesses of the same category under different operating models involve varying revenue recognition approaches and
measurement methods.
38. Contract costs
39. Government grants
(1) Types of government grants
Government grants are transfer of monetary assets or non-monetary assets from the government to the Group at no
consideration. If a government grant is in the form of a transfer of a monetary asset it is measured at the amount received or
receivable. If a government grant is in the form of a transfer of a non-monetary asset it is measured at fair value; if fair value
is not reliably determinable it is measured at a nominal amount.
170Section VIII Financial Report Government grants are classified into government grants related to assets and government grants related to income.Government grants related to assets are government grants made available to the Group for the purpose of purchasing
constructing or otherwise acquiring long-term assets. Government grants related to income are government grants other than
those related to assets.The Group’s criteria for classifying government grants as related to assets are: the governmental documents clearly stipulate
the use of funds and the expected use direction of the funds is expected to form related assets; The criteria for classifying
government grants as related to income are: the governmental documents do not stipulate the use purpose and the expected
use direction of the funds is to supplement working capital; If the grant object is not clearly specified in the governmental
documents the judgement basis for the Group to classify the government grants as related to assets or related to income is as
follows: except that the Group designates its purpose as related to assets it will be included in profit or loss.
(2) Timing of recognition
Government grants are recognised when all attaching conditions will be complied with and the grants will be received.
(3) Accounting treatment
A government grant relating to an asset shall be offset against the carrying amounts of relevant assets or recognised as
deferred income and amortised into profit or loss over the useful life of the related assets using a reasonable and systematic
method (those relating to the daily activities of the Group shall be recorded into other income; those not relating to the daily
activities of the Group shall be included in non-operating income). However government grants measured at nominal amount
are directly included in profit or loss. Where the assets are sold transferred retired or damaged before the end of their useful
lives the rest of the remaining deferred income is released to profit or loss for the period in which the relevant assets are
disposed of.A government grant related to income is accounted for as follows: (a) if the grant is a compensation for related expenses or
losses to be incurred in subsequent periods it is recognised as deferred income and released in profit or loss (those relating
to the daily activities of the Group shall be recorded into other income; those not relating to the daily activities of the Group
shall be included in non-operating income) or offset against related expenses or losses over the periods in which the related
expense or losses are recognised; or (b) if the grant is a compensation for related expenses or losses already incurred it
is recognised immediately in profit or loss (those relating to the daily activities of the Group shall be recorded into other
income; those not relating to the daily activities of the Group shall be included in non-operating income) or offset against
related expenses or losses.
40. Deferred tax assets/Deferred tax liabilities
Income tax comprises current and deferred tax. Except for the income tax arising from the business combination and the
transaction or item directly booked into equity (including other comprehensive income) the Group records the current and
deferred tax into profit or loss.Deferred tax is provided using the balance sheet liability method on all temporary differences at the balance sheet date
between the tax bases of assets and liabilities and their carrying amounts and on the temporary differences between the tax
bases and the carrying amounts of the items which have a tax base according to related tax laws but are not recognised as
assets and liabilities.Deferred tax liabilities are recognised for all taxable temporary differences except:
(1) when the taxable temporary difference arises from the initial recognition of an asset or l iabili ty in a
transaction that is not a business combination and at the time of the transaction affects neither the accounting
171profit nor taxable profit or loss and does not give rise to equal taxable and deductible temporary differences; and
(2) in respect of taxable temporary differences associated with investments in subsidiaries associates and joint ventures
when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary
differences will not be reversed in the foreseeable future.Deferred tax assets are recognised for all deductible temporary differences and the carryforward of unused tax losses and
any unused tax credits. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available
against which the deductible temporary differences the carryforward of unused tax losses and unused tax credits can be
utilised except:
(1) when the deductible temporary difference arises from the initial recognition of an asset or liability in a
transaction that is not a business combination and at the time of the transaction affects neither the accounting
profit nor taxable profit or loss and does not give rise to equal taxable and deductible temporary differences; and
(2) in respect of the deductible temporary differences associated with investments in subsidiaries associates and joint
ventures it is probable that the temporary differences will be reversed in the foreseeable future and taxable profit will be
available against which the temporary differences can be utilised in the future.At the balance sheet date deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the
period when the asset is realised or the liability is settled in accordance with the requirements of tax laws. The measurement
of deferred tax assets and liabilities reflects the tax consequences that would follow from the manner in which the Group
expects at the balance sheet date to recover the assets or settle the liabilities.The carrying amount of deferred tax assets is reviewed at the balance sheet date and reduced to the extent that it is no
longer probable that sufficient taxable profit will be available in future periods to allow the deferred tax assets to be utilised.Unrecognised deferred tax assets are reassessed at the balance sheet date and are recognised to the extent that it has become
probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be recovered.Deferred tax assets and deferred tax liabilities are offset if and only if the Group has a legally enforceable right to set off
current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes
levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either to
settle current tax liabilities and assets on a net basis or to realise the assets and settle the liabilities simultaneously in each
future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.
41. Leases
(1) Accounting treatment for leases as a lessee
A lease refers to a contract in which the lessor transfers the right to use the asset to the lessee within a certain period of time
in exchange for consideration. The Group recognises lease liabilities and right-of-use assets except for short-term leases and
leases of low-value assets.The Group assesses at contract inception whether a contract is or contains a lease. A contract is or contains a lease if the
contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.For a contract that contains multiple separate lease components the Group separates the components of the contract and
accounts for each separate lease component. For a contract that contains lease and non-lease components the lessee and the
lessor separate lease components from non-lease components.
172Section VIII Financial Report As lessee
(1) Right-of-use assets
At the commencement date of the lease the Group recognises a right-of-use asset. Right-of-use assets are initially measured
at cost. The cost of the right-of-use assets comprises:
1) the amount of the initial measurement of the lease liability;
2) any lease payments made at or before the commencement date of the lease less any lease incentives received if there are
lease incentives;
3) any initial direct cost incurred;
4) and estimates of costs incurred by the lessee in dismantling and removing the underlying assets restoring the site on which
it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease excluding the
costs incurred for producing the inventories.The Group remeasures the lease liabilities for the revision to the lease payments and adjusts the carrying amount of the right-
of-use assets accordingly. The right-of-use assets are depreciated on a straight-line basis subsequently by the Group. If the
Group is reasonably certain that the ownership of the underlying assets will be transferred to the Group at the end of the lease
terms the Group depreciates the assets from the commencement date to the end of the useful lives of the assets. Otherwise
the Group depreciates the assets from the commencement date to the earlier of the end of the useful lives of the assets and the
end of the lease terms.The Group determines whether the right-of-use asset has been impaired in accordance with the principles described in “Note
V.(20) Impairment of assets” and accounts for the impairment losses identified.
(2) Lease liabilities
At the commencement date of the lease the Group recognises lease liabilities except for short-term leases and leases of low-
value assets. Lease liabilities are measured at the present value of the lease payments that are not paid at that date. The lease
payments include:
1) fixed payments (including in-substance fixed payments) less any lease incentives receivable.
2) variable lease payments that depend on an index or a rate;
3) amounts expected to be paid under residual value guarantees;
4) the exercise price of a purchase option reasonably certain to be exercised by the Group; and
5) payments of penalties for termination of a lease if the lease term reflects the Group exercising the option to terminate the
lease.The Group regards the interest rate implicit in the lease as discount rate; if that rate cannot be reasonably determined the
Group uses the incremental borrowing rate. The Group calculates the interest expenses of the lease liability in each period
over the lease term using the constant periodic rate of interest and recognises such interest expenses in profit or loss or the
costs of the related asset.Variable lease payments that are not included in the measurement of the lease liabilities are recognised in profit or loss as
incurred except those in the costs of the related assets as required.
173At the commencement date of the lease in the following cases the Group remeasures the lease liability and adjusts the
correspondingly right-of-use asset. However if the carrying amount of the right-of-use asset is reduced to zero and there
is a further reduction in the measurement of the lease liability the Group recognises any differences in profit or loss.
1) if there are changes in the assessment of the purchase option the renewal option or the option to terminate the lease or
the exercise of the above-mentioned options is not consistent with the original assessment results the Group remeasures
lease liabilities at the lease payments upon the change and the present value calculated using the revised discount rate.
2) if there are changes in in-substance fixed payments the amounts expected to be payable under residual value guarantees
or in the index or rate used to determine lease payments the Group remeasures lease liabilities at the lease payments upon the
change and the present value calculated using the original discount rate. However where changes in lease payments result
from changes in floating interest rates the present value is calculated using the revised discount rate.
(3) Short-term leases and leases of low-value assets
If the Group does not recognise the right-of-use assets and lease liabilities for short-term leases and low-value assets it
recognises relevant lease payments in profit or loss or the costs of the related assets on a straight-line basis over the lease
terms. A short-term lease is the lease that on the commencement date of the lease has a lease term of 12 months or less and
does not contain any purchase option. A lease of low-value assets is the lease of the individual underlying asset with low
value when new. If the Group subleases an asset or expects to sublease an asset the head lease does not qualify as a lease of
a low-value asset.
(4) Lease modifications
The Group accounts for a lease modification as a separate lease if both:
1) the modification increases the scope of the lease by adding the right to use one or more underlying assets; and
2) the consideration for the lease increases by an amount commensurate with the stand-alone price for the increase in scope
and any appropriate adjustments to that stand-alone price to reflect the circumstances of the particular contract.For a lease modification that is not accounted for as a separate lease at the effective date of the lease modification the Group
reallocates the consideration in the contract after the modification redetermines the lease term remeasures the lease liability
by discounting the revised lease payments using a revised discount rate.The Group decreases the carrying amount of the right-of-use asset for lease modifications that reduce the scope or term of the
lease and recognises the gain or loss relating to the partial or full termination of the lease in profit or loss. The Group makes
a corresponding adjustment to the right-of-use asset for all other lease modifications that result in remeasurement of lease
liabilities.
(2) Accounting treatment for leases as a lessor
A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership of an
underlying asset except that a lease is classified as an operating lease at the inception date.Rental income under an operating lease is recognised on a straight-line basis over the lease term through profit or loss.Variable lease payments that are not included in the measurement of lease receivables are charged to profit or loss as incurred.Initial direct costs are capitalised and recognised over the lease term on the same basis as rental income through profit or
loss.At the commencement date of the lease the Group recognises finance lease receivable and derecognises finance lease assets.The Group presents the lease receivables at an amount equal to the net investment in the lease for the initial measurement.The net investment in the lease is the sum of any unguaranteed residual value accruing to the lessor and the lease payments
receivable at the commencement date of the lease by a lessor under a finance lease discounted at the interest rate implicit
174Section VIII Financial Report in the lease. The Group recognises finance income over the lease term based on a pattern reflecting a constant periodic
rate of return on the net investment in the lease. Variable lease payments received by the Group that are not included in the
measurement of the net investment in the lease are recognised in profit or loss as incurred.
42. Other material accounting policies and significant estimates
(1) Share repurchase
If the Group repurchases its shares due to a reduction in its registered capital it shall debit the “Treasury shares” and credit
the “Cash at banks” and other accounts according to the amount actually paid. When the treasury shares are cancelled the
total par value of the shares calculated according to the par value of the shares and the number of cancelled shares shall
be debited to the “Share capital” and the book balance of the cancelled treasury shares shall be credited to the “Treasuryshares”. The premium originally recorded in capital surplus at the time of stock issuance shall be offset according to the
difference and debited to the “Capital surplus – Share capital premium”. The portion of the repurchase price exceeding the
above offset of “Share capital” and “Capital surplus - Share capital premium” shall be debited to the “Surplus reserves” and
“Profit distribution - Undistributed profits” and other accounts in turn. If the repurchase price is lower than the share capital
corresponding to the repurchased shares the difference between the book balance of the cancelled treasury shares and the
offset share capital will be treated as an increase in share capital premium and debited to the “Share capital” according to
the par value of the share capital corresponding to the repurchased shares credited to the “Treasury share” according to the
book balance of the cancelled treasury shares and credited to the “Capital surplus - Share capital premium” according to the
difference.
(2) Fair value measurement
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within
the fair value hierarchy based on the lowest level input that is significant to the fair value measurement as a whole: Level
1 – based on quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 – based on valuation
techniques for which the lowest level input that is significant to the fair value measurement is observable either directly
or indirectly; Level 3 – based on valuation techniques for which the lowest level input that is significant to the fair value
measurement is unobservable.For assets and liabilities that are measured at fair value in the financial statements on a recurring basis the Group determines
whether transfers have occurred between levels in the hierarchy by reassessing categorisation at each balance sheet date.
(3) Significant accounting judgements and estimates
The preparation of the financial statements requires management to make judgements estimates and assumptions that affect
the reported amounts of revenue expenses assets and liabilities and their accompanying disclosures and the disclosure of
contingent liabilities at the balance sheet date. Uncertainty about these assumptions and estimates could result in outcomes
that could require a material adjustment to the carrying amounts of the assets or liabilities affected in the future.
1) Judgements
In the process of applying the Group’s accounting policies management has made the following judgements which have a
significant effect on the amounts recognised in the financial statements:
Business models
The classification of financial assets at initial recognition depends on the Group’s business model for managing financial
assets. When determining the business model the Group considers the methods to include evaluation and report financial
asset performance to key management the risks affecting the performance of financial assets and risk management and
175the manner in which the relevant management receives remuneration. When assessing whether the objective is to collect
contractual cash flows the Group needs to analyse and judge the reason timing frequency and value of the sale before the
maturity date of the financial assets.
2) Estimation uncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet date that
have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the future
accounting periods are described below.Impairment of financial assets
The Group uses the expected credit loss model to assess the impairment of financial instruments. The Group is required to
perform significant judgement and estimation and take into account all reasonable and supportable information including
forward-looking information. When making such judgements and estimates the Group infers the expected changes in the
debtor’s credit risk based on historical repayment data combined with economic policies macroeconomic indicators industry
risks and other factors. The different estimates may impact the impairment assessment and the impairment allowance may
not be representative of the actual impairment loss in the future.Variable consideration for sales rebates or returns
The Group makes reasonable estimates of indicators such as the rebate rate or return rate of a group of contracts with similar
characteristics according to the sales historical data the current sales situation as well as changes in customer demands
market changes and other relevant information. Estimates of the rebate rate or return rate may not be representative of the
actual rebates or returns in the future. The Group re-evaluates the rebate rate or return rate at least on each balance sheet date
and updates the accounting treatment based on the re-evaluated rebate rate or return rate.Loyalty points
The Group makes reasonable estimate of the stand-alone selling price of the loyalty points for contract consideration
allocation by taking into account all relevant information such as the stand-alone selling prices for the customer to acquire
additional free goods or services or the discounts enjoyed by the customer using the loyalty points and the possibility for the
customer to exercise the redemption right. The Group considers the likelihood for the customer to exercise the redemption
right based on the historical data of point redemption the current point redemption and the future changes in customer
demands the future trend of the market and other factors. The Group re-evaluates the estimated redemption rate of loyalty
points at least on each balance sheet date and calculates the amounts of revenue and balance that should be recognised for
considerations related to loyalty points based on the re-evaluation results.Impairment of non-current assets other than financial assets (other than goodwill)
The Group assesses whether there are any indications of impairment for all non-current assets other than financial assets
at the balance sheet date. Other non-current assets other than financial assets are tested for impairment when there are
indications that the carrying amounts may not be recoverable. An impairment exists when the carrying amount of an asset or
asset group exceeds its recoverable amount which is the higher of its fair value less costs of disposal and the present value
of the future cash flows expected to be derived from it. The calculation of the fair value less costs of disposal is based on
available data from binding sales transactions in an arm’s length transaction of similar assets or observable market prices less
incremental costs for disposing of the assets. When the calculations of the present value of the future cash flows expected to
be derived from an asset or asset group are undertaken management must estimate the expected future cash flows from the
asset or asset group and choose a suitable discount rate in order to calculate the present value of those cash flows.
176Section VIII Financial Report Share-based payments
The Group’s equity-settled share-based payment in exchange for services received from employees is measured at the fair
value of the equity instruments granted to the employees. If such equity-settled share-based payment could vest immediately
related costs or expenses at an amount equal to the fair value on the grant date are recognised with a corresponding increase
in capital reserves. If such equity-settled share-based payment could not vest until the completion of services for a vesting
period or until the satisfication of a specified performance condition at each balance sheet date during the vesting period
the Group adjusts related costs and expenses for the services received for the current period with a corresponding increase in
capital reserves based on the best estimate of the number of equity instruments expected to vest.Inventory write-downs set aside at the net realisable value
The Group writes down obsolete and slow-moving inventories and inventories whose cost is higher than the net realisable
value. At each balance sheet date the Group re-estimates whether the individual inventory categories are obsolete and slow-
moving and whether the net realisable value is lower than the inventory cost. A difference between the re-estimation result
and the existing estimate will affect the carrying amount of the inventory in the period of change in estimate.Impairment of goodwill
The Group determines whether goodwill is impaired at least on an annual basis. This requires an estimation of the present
value of the future cash flows expected to be derived from the asset groups (sets of asset groups) to which the goodwill is
allocated. Estimating the present value requires the Group to make an estimate of the expected future cash flows from the
asset groups (sets of asset groups) and also to choose a suitable discount rate in order to calculate the present value of those
cash flows. Further details are included in “Note V.19”.Deferred tax assets
Deferred tax assets are recognised for all unused tax losses to the extent that it is probable that taxable profit will be available
against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred
tax assets that can be recognised based upon the likely timing and level of future taxable profits together with future tax
planning strategies.Lessee’s incremental borrowing rate
If the interest rate implicit in the lease cannot be readily determined the Group measures the lease liability at the present
value of the lease payments discounted using the lessee’s incremental borrowing rate. According to the economic
environment the Group takes the observable interest rate as the reference basis for determining the incremental borrowing
rate then adjusts the observable interest rate based on its own circumstances underlying assets lease terms and amounts of
lease liabilities to determine the applicable incremental borrowing rate.Depreciation and amortisation
The Group calculates depreciation of fixed assets and amortisation of intangible assets on a straight-line basis over the
estimated useful lives using net residual values from the date when the assets are ready for their intended use. This reflects
management’s estimate of the period over which the Group intends to obtain future economic benefits from the use of the
fixed assets and intangible assets.Fair value of investments in convertible corporate bonds
For investments in convertible corporate bonds measured at fair value the Group shall estimate the current price of ordinary
shares risk-free interest rate volatility rate and discount rate so there is uncertainty.
177Fair values of wealth management products and trust products
For wealth management products and trust products measured at fair value the Group is required to estimate the future cash
flows expected to be derived the volatility of credit risk and the discount rate and hence they are subject to uncertainty.
43. Changes in material accounting policies and significant estimates
(1) Changes in material accounting policies
□ Applicable √ Not applicable
(2) Changes in significant estimates
□ Applicable √ Not applicable
(3) Matters related to adjustment of the financial statements as at the beginning of the current year since the initial application
of the new accounting standard in □ Applicable √ Not applicable
44. Others
VI. Taxation
1. Main tax categories and tax rates
Category of tax Taxation basis Tax rates
Output VAT is calculated based on
product sales and service provided
Value-added tax (VAT) pursuant to tax laws. The basis for 13% 9% 6% 3% 1% 0%Note 1*
VAT payable is to deduct input VAT
from the output VAT for the period.Excise tax N/A N/A
Urban maintenance and construction tax Actual paid turnover tax 7% 5%
30%27%25.8%25%24%21%
Corporate income tax (CIT) Levied by taxable profit
20%17%16.5%15%
Education surcharge Actual paid turnover tax 3%
Local education surcharge Actual paid turnover tax 2%
Note 1*: Certain stores of Shenzhen Purcotton Technology Co. Ltd. (“Shenzhen Purcotton”) Guangzhou Purcotton
Medical Technology Co. Ltd. (“Guangzhou Purcotton”) Beijing Purcotton Technology Co. Ltd. (“Beijing Purcotton”)
Shanghai Purcotton Technology Co. Ltd. (“Shanghai Purcotton”) and Wuhan Purcotton Ltd. (“Wuhan Purcotton”) are
small-scale taxpayers subject to VAT levied at a rate of 3%. The VAT rate is 13% for non-small-scale taxpayers. According
to the Announcement of the Ministry of Finance and the State Taxation Administration on Value-added Tax Reduction and
Exemption Policy for Small-scale VAT Taxpayers (MOF STA Announcement [2023] No.19) small-scale VAT taxpayers
with monthly sales amount of below RMB100000 (inclusive) shall be exempt from VAT. Small-scale VAT taxpayers whose
178Section VIII Financial Report taxable sales revenue shall be subject to the 3% levy rate shall be eligible for a reduced rate of 1%; for items subject to
prepayment of VAT at the rate of 3% the prepayment will be made at a reduced rate of 1%. The Announcement shall be in
effect until 31 December 2027. The sales of goods by the Group’s subsidiaries as general taxpayers are subject to a VAT rate
of 13%. The Company and some subsidiaries are eligible to engage in import/export business and their export products are
subject to VAT “exemption credit and refund” policies. VAT on income from consulting services provided by the Group is
levied at a rate of 6%; VAT on income from promotion services provided by Shenzhen Purcotton is levied at a rate of 6%;
VAT on income from warehousing services provided by Winner Medical (Wuhan) is levied at a rate of 6%; and VAT on
income from customer services provided by Huanggang Purcotton is levied at a rate of 6%.Disclosure of entities subject to different corporate income tax rates
Name of taxpayers Income tax rates
Winner Medical Co. Ltd. 15%
Winner Medical (Huanggang) Co. Ltd. (“Winner Medical (Huanggang)”) 15%
Winner Medical (Jingmen) Co. Ltd. (“Winner Medical (Jingmen)”) 15%
Winner Medical (Tianmen) Co. Ltd. (“Winner Medical (Tianmen)”) 15%
Winner Medical (Chongyang) Co. Ltd. (“Winner Medical (Chongyang)”) 15%
Winner Medical (Jiayu) Co. Ltd. (“Winner Medical (Jiayu)”) 15%
Yichang Winner Medical Textile Co. Ltd. (“Winner Medical (Yichang)”) 25%
Winner Medical (Heyuan) Co. Ltd. (“Winner Medical (Heyuan)”) 25%
Winner Medical (Wuhan) Co. Ltd. (“Winner Medical (Wuhan)”) 15%
Winner Medical (Hong Kong) Ltd. (“Hong Kong Winner”) 16.50%
Winner Medical Malaysia Sdn. Bhd. (“Winner Medical Malaysia”) 24%
Winner Guilin Latex Co. Ltd. (“Winner Guilin”). 15%
Shenzhen Junjian Medical Device Co. Ltd. (“Junjian Medical”) 25%
Shanghai Hongsong Medical Device Co. Ltd. (“Shanghai Hongsong”) 25%
Nature Health Development (Hong Kong) Co. Ltd. (“Nature Health (HK)”) 16.50%
Winner (Jingzhou) Latex Products Co. Ltd. (“Winner Jingzhou”) 25%
Winner Biomedical Technology (Wuhan) Co. Ltd. (“Winner Biomedical”) 20%
Hubei Zhongfu New Materials Co. Ltd. (“Hubei Zhongfu”) 20%
Winner Medical Technology (Foshan) Co. Ltd. (“Winner Medical (Foshan)”) 20%
Nature Health Trading (Hong Kong) Co. Ltd. (“Nature Health Trading”) 16.5%
Shenzhen Purcotton 25%
Beijing Purcotton 20%
Guangzhou Purcotton 20%
Shanghai Purcotton 20%
Shenzhen Qianhai Purcotton E-Commerce Co. Ltd. (“Qianhai Purcotton”) 25%
Shenzhen Purunderwear Sci-Tech Innovation Co. Ltd. (“Purunderwear”) 20%
Huanggang Purcotton Ltd. (“Huanggang Purcotton”) 25%
Wuhan Purcotton 25%
Hong Kong Purcotton Ltd. (“Hong Kong Purcotton”) 16.50%
179Name of taxpayers Income tax rates
Purcotton Agricultural Technology (Wuhan) Co. Ltd. (“Purcotton Agricultural”) 20%
Purcotton (Vietnam) Co. Ltd. (“Vietnam Purcotton”) 15%
Shenzhen PureH2B Technology Co. Ltd. (“PureH2B”) 20%
Zhejiang Longterm Medical Technology Co. Ltd. (“Longterm Medical”) 15%
Hangzhou Shengyi Technology Co. Ltd. (“Hangzhou Shengyi”) 20%
Xi’an Longtemu Medical Technology Co. Ltd. (“Xi’an Longtemu”) 20%
Deqing Longterm Medical Silica Gel Products Co. Ltd. (“Deqing Longterm”) 20%
Longterm Medical US LLC (“Medical US”) Federal 21%
LONGTERM MEDICALS.DE.R.L.DE C.V (“MEDICAL CV”) 30%
Zhejiang Honglan Technology Co. Ltd. (“Zhejiang Honglan”) 20%
Winner Medical (Hunan) 15%
Hunan Ruian Medical Device Technology Co. Ltd. (“Ruian Medical Device”) 20%
Global Resources International Inc. (“GRI USA”) Federal 21%
GRI-Alleset Limited B.V. (“Alleset BV”) 25.80%
Alleset Healthcare UK Limited (“Alleset UK”) 25%
GRI-Alleset Limited (“GRI Alleset”) 16.50%
GRI Medical & Electronics Technology Co. Ltd. (“GRI METC”) 15%
Wuhu Shiyuan Zhuochuang Medical Material Technology Co. Ltd. (“GRI Nanling”) 20%
GRI (Wuhu) New Materials Co. Ltd. (“GRI Wuhu”) 15%
Jiaxing Aixin Medical Device Co. Ltd. (“Alleset China”) 20%
Zhejiang Aixin Polymer Materials Co. Ltd. (“AXHPM”) 25%
GRI Precision Medical Devices Co. Ltd. (“GRI PM”) 20%
Alleset Singapore Ltd (“Alleset Singapore”) 17%
Curicyn Inc. (“Curicyn”) Federal 21%
Advanced Product Solutions Inc. (“APS”) Federal 21%
Global Resources Investments LLC (“GRI Investment”) Federal 21%
GRI-Alleset Inc. (“Alleset Inc”) Federal 21%
Tennessee Foam LLC (“TNFOAM”) Federal 21%
Invenio Healthcare LLC (“Invenio LLC”) Federal 21%
Invenio Procedure Solutions LLC (“IPS”) Federal 21%
Global Resources International Dominicana-Grid-SRL (“GRI DR”) 27%
Thermogear Inc. (“Thermogear”) Federal 21%
Invenio Alternate Care Solutions LLC (“IACS”) Federal 21%
ETI Services Inc. (“ETI Services”) Federal 21%1*
Global Resources (Vietnam) Group Limited Company (“GRI VN”) 20%
Note: 1* State income tax rates vary across U.S. states. State income taxes are deductible for federal income tax purposes.
180Section VIII Financial Report 2.Tax preference
Tax Tax
Name of taxpayers Preferential policy Certificate No. Certificate date
category rates
Winner Medical Co. Ltd. 15% GR202444206145 26 December 2024
Winner Medical (Huanggang) 15% GR42000284 11 November 2024
Winner Medical (Jingmen) 15% GR202442001714 04 December Winner Medical (Tianmen) 15% GR202442003221 16 November 2024
According to the second paragraph of Article 28
Winner Medical (Chongyang) 15% GR202442001824 15 November 2024
of the Corporate Income Tax Law of the People’s
Winner Medical (Jiayu) Republic of China stipulates with respect to a 15% GR202442004304 16 December 2024
Winner Medical (Wuhan) high-tech enterprise that is specifically supported 15% GR42000765 08 December by the State the tax on its income shall be levied
Winner Guilin 15% GR202345000323 04 December 2023
at a reduced rate of 15 percent.Longterm Medical 15% GR202333003226 08 December 2023
Winner Medical (Hunan) 15% GR43002877 08 December Corporate
GRI METC income tax 15% GR33006896 19 December GRI Wuhu 15% GR34004988 08 December Winner Biomedical According to in the Announcement of the 20% N/A N/A
Hubei Zhongfu Ministry of Finance and the State Taxation 20% N/A N/A
Administrat ion on Relevant Tax and Fee
Beijing Purcotton 20% N/A N/A
Policies with Respect to Further Supporting the
Guangzhou Purcotton Development of Small and Micro Enterprises 20% N/A N/A
Shanghai Purcotton and Individually-Owned Businesses (MOF STA 20% N/A N/A
Announcement [2023] No. 12) the policy of
Purunderwear 20% N/A N/A
small and low-profit enterprises calculating the
taxable income at 25% and paying corporate
Purcotton Agricultural income tax at a rate of 20% is extended to 31 20% N/A N/A
December 2027.PureH2B 20% N/A N/A
According to in the Announcement of the
Winner Medical (Foshan) 20% N/A N/A
Ministry of Finance and the State Taxation
Hangzhou Shengyi Administrat ion on Relevant Tax and Fee 20% N/A N/A
Zhejiang Honglan Policies with Respect to Further Supporting the 20% N/A N/A
Development of Small and Micro Enterprises
Xi’an Longtemu Corporate 20% N/A N/A
and Individually-Owned Businesses (MOF STA
Deqing Longterm income tax 20% N/A N/A
Announcement [2023] No. 12) the policy of
Ruian Medical Device small and low-profit enterprises calculating the 20% N/A N/A
GRI Nanling taxable income at 25% and paying corporate 20% N/A N/A
income tax at a rate of 20% is extended to 31
Alleset China 20% N/A N/A
December 2027.GRI PM 20% N/A N/A
181According to the Announcement on the Value-added Tax Super-deduction Policy for Advanced Manufacturing Enterprises
(MOF STA Announcement [2023] No.43) from 1 January 2023 to 31 December 2027 advanced manufacturing enterprises
are allowed to add an extra 5% based on the deductible input tax for the current period for deduction of the VAT payable
(the “Super-deduction Policy”). The Super-deduction Policy is applicable to Winner Medical Co. Ltd. Winner Medical
(Huanggang) Winner Medical (Jingmen) Winner Medical (Tianmen) Winner Medical (Chongyang) Winner Medical
(Jiayu) Winner Medical (Wuhan) Winner Guilin Longterm Medical Winner Medical (Hunan) GRI METC and GRI Wuhu.
3. Others
VII. Notes to the consolidated financial statements
1. Currency funds
Currency: Renminbi Yuan
Item Closing balance Opening balance
Cash on hand 98223.24 152838.15
Cash at banks 1541265623.54 1348440889.85
Other currency funds 52625473.14 63495170.63
Total 1593989319.92 1412088898.63
Including: Total amount deposited abroad 73178038.54 87101777.00
Other disclosures:
Wherein the breakdown of currency funds that are restricted in use due to mortgages pledges or freezes is as follows:
Item 2024
Guarantee deposit for bank acceptance bill (Note 1) 20773341.08 44202960.58
Letter of credit (Note 2) 101320.00 100000.00
Performance bond (Note 3) 3962873.80 4384215.00
Letter of guarantee (Note 4) - 230000.00
Balance of other restricted currency funds (Note 5) 8429676.46 6074337.70
Total 33267211.34 54991513.28
Note 1: Guarantee deposit for bank acceptance bill refers to the guarantee deposit made by Longterm Medical and GRI
METC to apply for bank acceptance bills.Note 2: Letter of credit is the guarantee deposit made by Winner Medical (Tianmen) and Junjian Medical for international
and domestic letters of credit.
182Section VIII Financial Report Note 3: The performance bond refers to the bond deposited by Longterm Medical for automatic transfer of electricity
charges; the bond deposited by Hong Kong Winner for bidding transactions with hospitals.Note 4: Letter of guarantee represents the guarantee deposit made by Winner Medical (Hunan) to apply for the construction
permission for its Phase II plant. The guarantee matured in March and the funds were automatically transferred back to
the Company’s account.Note 5: The balance of other restricted currency funds refers to the receipt guarantee deposit of Winner Medical (Shenzhen);
the balance of special deposit accounts for restricted non-budget units opened by Shenzhen Purcotton in accordance with the
regulations on prepaid card issuance formulated by the Ministry of Commerce and product guarantee deposit for applets.
2. Financial assets held for trading
Currency: Renminbi Yuan
Item Closing balance Opening balance
Financial assets at fair value through profit or loss 2825378695.56 2921341484.39
Including:
Trust plan 1006390017.33 1589166136.99
Wealth management products issued by banks 1818988678.23 1332175347.40
Including:
Total 2825378695.56 2921341484.39
Other disclosures:
3. Derivative financial assets
Currency: Renminbi Yuan
Item Closing balance Opening balance
Other disclosures:
4. Notes receivable
(1) Classified presentation of notes receivable
Currency: Renminbi Yuan
Item Closing balance Opening balance
Bank acceptance bills 39357178.51 34319961.81
Total 39357178.51 34319961.81
183(2) Disclosure by bad debt provision accrual method
Currency: Renminbi Yuan
Closing balance Opening balance
Book balance Impairment allowance Book balance Impairment allowance
Category Carrying Carrying
Proportion Provision amount Proportion Provision Amount Amount Amount Amount amount
(%) ratio (%) (%) ratio (%)
Including:
Including:
Where the impairment allowances are made based on the general ECL model:
□ Applicable √ Not applicable
(3) Provision for bad debts accrued recovered or reversed
Provision for bad debts accrued:
Currency: Renminbi Yuan
Changes for the year
Opening
Category
balance Recovery or
Closing balance
Accrual Write-off Others
reversal
Significant recovery or reversal of provision for bad debts for the current period:
□ Applicable √ Not applicable
(4) Notes receivable pledged
Currency: Renminbi Yuan
Item Pledged notes receivable at end of year
(5) Notes receivable endorsed or discounted and not yet expired at the balance sheet date
Currency: Renminbi Yuan
Item Derecognised Not derecognised
Bank acceptance bills 17525376.84
Total 17525376.84
(6) Notes receivable actually written off
Currency: Renminbi Yuan
Item Amount written off
184Section VIII Financial Report Write-off of significant notes receivable:
Currency: Renminbi Yuan
Nature of notes Amount written Reasons for Write-off procedures Whether due to/from
Entity name
receivable off write-off performed related party transactions
Description of write-off of notes receivable:
5. Accounts receivable
(1) Disclosure by aging
Currency: Renminbi Yuan
Aging Closing balance Opening balance
Within 1 year inclusive 1078434515.13 1006495090.20
1 to 2 years 13195106.36 18474160.02
2 to 3 years 4839980.27 8532477.53
Over 3 years 17192544.41 13225461.37
3 to 4 years 5167731.89 7176362.31
4 to 5 years 7176361.56 3065166.50
Over 5 years 4848450.96 2983932.56
Total 1113662146.17 1046727189.12
(2) Disclosure by bad debt provision accrual method
Currency: Renminbi Yuan
Closing balance Opening balance
Book balance Impairment allowance Book balance Impairment allowance
Category Carrying
Proportion Provision Carrying amount Proportion Provision
Amount Amount Amount Amount amount
(%) ratio (%) (%) ratio (%)
Provision for bad
debts made on an 5762385.03 0.52% 5762385.03 100.00% 0.00 4274807.30 0.41% 3774809.80 88.30% 499997.50
individual basis
Including:
Provision for bad
debts made on a 1107899761.14 99.48% 67026212.64 6.05% 1040873548.50 1042452381.82 99.59% 62334737.94 5.98% 980117643.88
collective basis
Including:
Provision for bad
debts made on a
collective basis 1107899761.14 99.48% 67026212.64 6.05% 1040873548.50 1042452381.82 99.59% 62334737.94 5.98% 980117643.88
by credit risk
characteristics
Total 1113662146.17 100.00% 72788597.67 6.54% 1040873548.50 1046727189.12 100.00% 66109547.74 6.32% 980617641.38
185Provision for bad debts made on an individual basis:
Currency: Renminbi Yuan
Opening balance Closing balance
Name Impairment Impairment Provision
Book balance Book balance Reasons for provision
allowance allowance ratio (%)
Others 4274807.30 3774809.80 5762385.03 5762385.03 100.00% Expected to be uncollectible
Total 4274807.30 3774809.80 5762385.03 5762385.03
Provision for bad debts made on a collective basis: Aging analysis
Currency: Renminbi Yuan
Closing balance
Aging
Book balance Impairment allowance Provision ratio (%)
Within 1 year 1078003467.00 53899913.34 5.00%
1 to 2 years 12747505.21 1275044.00 10.00%
2 to 3 years 4135872.35 1240761.71 30.00%
3 to 4 years 2443382.89 1221691.44 50.00%
4 to 5 years 5903657.73 4722926.19 80.00%
Over 5 years 4665875.96 4665875.96 100.00%
Total 1107899761.14 67026212.64
Description of the basis for determining provision for bad debts on a collective basis:
Where the impairment allowances are made based on the general ECL model:
□ Applicable √ Not applicable
(3) Provision for bad debts accrued recovered or reversed
Provision for bad debts accrued:
Currency: Renminbi Yuan
Changes for the year
Opening
Category Recovery or Closing balancebalance Accrual Write-off Others
reversal
Provision for bad debts
3774809.802033930.2346355.005762385.03
made on an individual basis
Provision for bad debts
made on a collective basis 62334737.94 30235156.34 22608626.57 2455292.31 -479762.76 67026212.64
by credit risk characteristics
Total 66109547.74 32269086.57 22654981.57 2455292.31 -479762.76 72788597.67
186Section VIII Financial Report Significant recovery or reversal of provision for bad debts for the current period:
Currency: Renminbi Yuan
Amount recovered Reasons for Recovery The basis for determining the original provision
Entity name
or reversed reversal method ratio for bad debts and its reasonableness
(4) Accounts receivable actually written off
Currency: Renminbi Yuan
Item Amount written off
Accounts receivable actually written off 2455292.31
Write-off of significant accounts receivable:
Currency: Renminbi Yuan
Nature of accounts Amount Reasons for Write-off procedures Whether due to/from
Entity name
receivable written off write-off performed related party transactions
Description of write-off of accounts receivable:
(5) Top 5 accounts receivable and contract assets with closing balances by debtor
Currency: Renminbi Yuan
Closing balance Percentage of total Closing balance of bad
Closing balance Closing
Entity of accounts closing balance of debt provision for accounts
of accounts balance of
name receivable and accounts receivable receivable and impairment
receivable contract assets
contract assets and contract assets (%) allowances for contract assets
First 152890915.70 152890915.70 13.73% 7645899.46
Second 29364232.17 29364232.17 2.64% 1468211.61
Third 27017676.49 27017676.49 2.43% 1409946.17
Fourth 26388836.78 26388836.78 2.37% 1319443.21
Fifth 21629148.30 21629148.30 1.94% 1081457.41
Total 257290809.44 257290809.44 23.11% 12924957.86
6. Contract assets
(1) Details of contract assets
Currency: Renminbi Yuan
Closing balance Opening balance
Item Provision ratio Carrying Provision ratio Carrying
Book balance Book balance
(%) amount (%) amount
187(2) Amount and reasons for significant changes in carrying amount in the reporting period
Currency: Renminbi Yuan
Item Changes for the year Reasons for changes
(3) Disclosure by bad debt provision accrual method
Currency: Renminbi Yuan
Closing balance Opening balance
Book balance Impairment allowance Book balance Impairment allowance
Category Carrying Carrying
Proportion Provision amount Proportion Provision Amount Amount Amount Amount amount
(%) ratio (%) (%) ratio (%)
Including:
Including:
Where the impairment allowances are made based on the general ECL model:
□ Applicable √ Not applicable
(4) Provision for bad debts accrued recovered or reversed
Currency: Renminbi Yuan
Item Accrual Recovery or reversal Transfer/Write-off Reasons
Significant recovery or reversal of provision for bad debts for the current period:
Currency: Renminbi Yuan
Amount recovered Reasons for Recovery The basis for determining the original provision ratio
Entity name
or reversed reversal method for bad debts and its reasonableness
Other disclosures:
(5) Contract assets actually written off
Currency: Renminbi Yuan
Item Amount written off
Write-off of significant contract assets:
Currency: Renminbi Yuan
Nature of Amount Reasons for Write-off procedures Whether due to/from
Entity name
contract assets written off write-off performed related party transactions
Description of write-off of contract assets:
Other disclosures:
188Section VIII Financial Report 7. Receivables financing
(1) Classified presentation of receivables financing
Currency: Renminbi Yuan
Item Closing balance Opening balance
Bank acceptance bills Note 1* 48201306.98 68349926.24
Total 48201306.98 68349926.24
Note 1*: Those notes receivable were held by the Group within a business model whose objective is both collecting
contractual cash flows and selling and they were classified as financial assets at fair value through other comprehensive
income and presented as receivables financing.
(2) Disclosure by bad debt provision accrual method
Currency: Renminbi Yuan
Closing balance Opening balance
Book balance Impairment allowance Book balance Impairment allowance
Category Carrying Carrying
Proportion Provision amount Proportion Provision Amount Amount Amount Amount amount
(%) ratio (%) (%) ratio (%)
Including:
Including:
Where the impairment allowances are made based on the general ECL model
Currency: Renminbi Yuan
Stage 1 Stage 2 Stage 3
Provision for bad debts Lifetime ECLs Lifetime ECLs Total
12-month ECLs
(not yet credit-impaired) (credit-impaired)
Provision (reversal) for the year
Criteria for stage classification and provision ratio for bad debts
Description of changes in the book balance of receivables financing contributing to significant changes in the loss allowance
in the current period:
(3) Provision for bad debts accrued recovered or reversed
Currency: Renminbi Yuan
Changes for the year
Opening
Category Recovery or Transfer/ Closing balancebalance Accrual Others
reversal Write-off
189Significant recovery or reversal of provision for bad debts for the current period:
Currency: Renminbi Yuan
Amount recovered Reasons for Recovery The basis for determining the original provision
Entity name
or reversed reversal method ratio for bad debts and its reasonableness
Other disclosures:
(4) Receivables financing pledged
Currency: Renminbi Yuan
Item Pledged receivables financing at end of year
(5) Receivables financing endorsed or discounted and not yet expired at the balance sheet date
Currency: Renminbi Yuan
Item Derecognised Not derecognised
Bank acceptance bills 75425011.30
Total 75425011.30
(6) Receivables financing actually written off
Currency: Renminbi Yuan
Item Amount written off
Write-off of significant receivables financing
Currency: Renminbi Yuan
Nature of receivables Amount Reasons for Write-off procedures Whether due to/from
Entity name
financing written off write-off performed related party transactions
Description of write-off of receivables financing:
(7) Changes in receivables financing and fair value movements during the period
(8) Other disclosures
8. Other receivables
Currency: Renminbi Yuan
Item Closing balance Opening balance
Interest receivable 0.00
Dividends receivable 0.00
Other receivables 204468498.11 186351012.28
Total 204468498.11 186351012.28
190Section VIII Financial Report (1) Interest receivable
1) Classification of interest receivable
Currency: Renminbi Yuan
Item Closing balance Opening balance
Total 0.00
2) Significant overdue interest
Currency: Renminbi Yuan
Borrower Closing balance Overdue time Overdue reasons Impairment determination basis
Other description:
3) Disclosure by bad debt provision accrual method
□Applicable √ Not applicable
4) Provision for bad debts accrued reversed or recovered
Currency: Renminbi Yuan
Changes
Opening
Category Recovery or Disposal or Closing balancebalance Accrual Other changes
reversal write-off
Significant recovery or reversal of provision for bad debts:
Currency: Renminbi Yuan
Amount recovered Reasons for Method of Basis and rationale for original bad debt
Unit name
or reversed reversal recovery provision ratio
Other description:
5) Interest receivable actually written off
Currency: Renminbi Yuan
Item Amount written-off
Significant write-off of interest receivable:
Currency: Renminbi Yuan
Nature of interest Amount Reasons for Write-off procedures Whether caused by related
Unit name
receivable written-off write-off performed party transactions
Notes on write-off interest receivable:
Other disclosures:
(
1912) Dividends receivable
1) Classification of dividends receivable
Currency: Renminbi Yuan
Item (or investee) Closing balance Opening balance
Total 0.00
2) Significant dividends receivable aged over 1 year
Currency: Renminbi Yuan
Item (or investee) Closing balance Aging Reasons for non-recovery Impairment or not and basis for judgment
3) Disclosure by bad debt provision accrual method
□ Applicable R Not applicable
4) Provision for bad debts accrued recovered or reversed
Currency: Renminbi Yuan
Changes for the year
Opening
Category Recovery or Transfer/Write- Closing balancebalance Accrual Others
reversal off
Significant recovery or reversal of provision for bad debts for the current period:
Currency: Renminbi Yuan
Amount recovered or Reasons for Recovery The basis for determining the original provision
Entity name
reversed reversal method ratio for bad debts and its reasonableness
Other disclosures:
5) Dividends receivable actually written off
Currency: Renminbi Yuan
Item Amount written off
Write-off of significant dividends receivable
Currency: Renminbi Yuan
Nature of dividends Amount Reasons for Write-off procedures Whether due to/from
Entity name
receivable written off write-off performed related party transactions
Description of write-off of dividends receivable:
Other disclosures:
192Section VIII Financial Report (3) Other receivables
1) Classification by nature
Currency: Renminbi Yuan
Nature Closing balance Opening balance
Compensation for investment and construction
215155320.00217155320.00
project of Winner Medical (Heyuan)
Deposit and guarantee deposit 71788017.49 51068341.89
Amounts due from related parties outside the
4010984.135186667.64
scope of consolidation of the Group
Employee pretty cash 2871481.77 1625166.73
Others 31531589.37 31649509.07
Total 325357392.76 306685005.33
2) Disclosure by aging
Currency: Renminbi Yuan
Aging Closing balance Opening balance
Within 1 year inclusive 60807073.86 46812996.63
1 to 2 years 12006371.78 8315527.96
2 to 3 years 7913808.36 3952388.84
Over 3 years 244630138.76 247604091.90
3 to 4 years 3740683.54 3951681.84
4 to 5 years 3397327.98 6965806.49
Over 5 years 237492127.24 236686603.57
Total 325357392.76 306685005.33
1933) Disclosure by bad debt provision accrual method
√ Applicable □ Not applicable
Currency: Renminbi Yuan
Closing balance Opening balance
Book balance Impairment allowance Book balance Impairment allowance
Category Carrying Carrying
Proportion Provision Proportion Provision
Amount Amount amount Amount Amount amount
(%) ratio (%) (%) ratio (%)
Provision for bad
debts made on an 217564878.81 66.87% 109987218.81 50.55% 107577660.00 219310090.37 71.51% 110322244.51 50.30% 108987845.86
individual basis
Including:
Provision for bad
debts made on a 107792513.95 33.13% 10901675.84 10.11% 96890838.11 87374914.96 28.49% 10011748.54 11.46% 77363166.42
collective basis
Including:
No credit risk group 2765127.72 0.85% 0.00 0.00% 2765127.72 2752904.44 0.90% 0.00 0.00% 2752904.44
Aging group 33638967.74 10.34% 7332254.92 21.80% 26306712.82 33698253.02 10.99% 7465560.68 22.15% 26232692.34
Deposit and
71388418.4921.94%3569420.925.00%67818997.5750923757.5016.60%2546187.865.00%48377569.64
guarantee deposit
Total 325357392.76 100.00% 120888894.65 37.16% 204468498.11 306685005.33 100.00% 120333993.05 39.24% 186351012.28
Provision for bad debts made on an individual basis:
Currency: Renminbi Yuan
Opening balance Closing balance
Name Provision for Provision for Provision
Book balance Book balance Reasons for provision
bad debts bad debts ratio (%)
Zijin County People’s Government receivables
217155320.00108577660.00215155320.00107577660.0050.00%
Government aged over 5 years
Total 217155320.00 108577660.00 215155320.00 107577660.00
Provision for bad debts made on a collective basis: Aging
Currency: Renminbi Yuan
Closing balance
Aging
Book balance Provision for bad debts Provision ratio (%)
Within 1 year 27464801.30 1373240.07 5.00%
1 to 2 years 35499.85 3549.99 10.00%
2 to 3 years 238878.11 71663.43 30.00%
3 to 4 years 31856.67 15928.34 50.00%
4 to 5 years 282.56 226.05 80.00%
Over 5 years 5867649.25 5867647.04 100.00%
Total 33638967.74 7332254.92
194Section VIII Financial Report Description of the basis for determining provision for bad debts on a collective basis:
Where the impairment allowances are made based on the general ECL model:
Currency: Renminbi Yuan
Stage 1 Stage 2 Stage 3
Provision for bad debts Lifetime ECLs Lifetime ECLs Total
12-month ECLs
(not yet credit-impaired) (credit-impaired)
Balance at 1 January 10011748.65 110322244.40 120333993.05
Provision (reversal) for the year
Provision 3132912.84 809558.81 3942471.65
Reversal 2276223.62 1000000.00 3276223.62
Transfer 144584.40 144584.40
Other changes 33237.97 33237.97
Balance at 31 December 10901675.84 109987218.81 120888894.65
Criteria for stage classification and provision ratio for bad debts
Description of changes in the book balance of other receivables contributing to significant changes in the loss allowance in
the current period
□ Applicable √ Not applicable
4) Provision for bad debts accrued recovered or reversed
Provision for bad debts accrued:
Currency: Renminbi Yuan
Changes for the year
Category Opening balance Recovery or Transfer/ Closing balance
Accrual Others
reversal Write-off
Provision for bad debts 120333993.05 3942471.65 3276223.62 144584.40 33237.97 120888894.65
Total 120333993.05 3942471.65 3276223.62 144584.40 33237.97 120888894.65
Significant recovery or reversal of provision for bad debts for the current period:
Currency: Renminbi Yuan
Amount recovered Reasons for Recovery The basis for determining the original provision
Entity name
or reversed reversal method ratio for bad debts and its reasonableness
1955) Other receivables actually written off
Currency: Renminbi Yuan
Item Amount written off
Others 144584.40
Write-off of significant dividends receivable:
Currency: Renminbi Yuan
Nature of other Amount Reasons for Write-off procedures Whether due to/from
Entity name
receivables written off write-off performed related party transactions
Description of write-off of other receivables:
6) Top 5 other receivables with closing balances by debtor
Currency: Renminbi Yuan
Proportion in total Closing balance
Entity name Nature of other receivables Closing balance Aging balance of other of provision for
receivables (%) bad debts
Receivables related to
First 215155320.00 Over 5 years 66.13% 107577660.00
Heyuan project
Second Deposits 15656693.47 Within 1 year 4.81% 782834.67
Third Others 5034735.20 Over 5 years 1.55% 5034735.20
Fourth Others 5000000.00 Within 1 year 1.54% 250000.00
Amounts due from related
Fifth parties outside the scope of 4010984.13 Within 1 year 1.23% 200549.21
consolidation of the Group
Total 244857732.80 75.26% 113845779.08
7) Presented as “Other receivables” due to centralised management
Currency: Renminbi Yuan
Other disclosures:
196Section VIII Financial Report 9. Prepayments
(1) Presentation of prepayments by aging
Currency: Renminbi Yuan
Closing balance Opening balance
Aging
Amount Proportion (%) Amount Proportion (%)
Within 1 year 166358685.76 92.77% 104869986.82 97.96%
1 to 2 years 12569766.20 7.01% 1216447.34 1.14%
2 to 3 years 390290.74 0.22% 965467.52 0.90%
Total 179318742.70 107051901.68
Description of the reason why significant prepayments aged over one year were not settled in time: The Gorup had no
significant prepayments aged over one year.
(2) Top 5 prepayments with closing balances by supplier
Supplier Closing balance Proportion in total closing balance of prepayments (%)
First 62239944.54 34.08
Second 8938180.55 4.89
Third 7234822.48 3.96
Fourth 2552335.23 1.40
Fifth 2458224.45 1.35
Total 83423507.25 45.68
Other disclosures:
10. Inventories
Whether the Company is required to comply with the disclosure requirements of the real estate industry
No
197(1) Classification
Currency: Renminbi Yuan
Closing balance Opening balance
Provision for Provision for
write-down of write-down of
Item inventories / inventories /
Book balance Carrying amount Book balance Carrying amount
impairment of impairment of
costs to fulfil a costs to fulfil a
contract contract
Raw materials 426515412.13 16092327.97 410423084.16 422260084.86 9769459.08 412490625.78
Work in process 283112438.71 18180794.50 264931644.21 265426666.70 29252698.59 236173968.11
Finished goods 1385540258.49 93362105.64 1292178152.85 1411909543.62 167669713.69 1244239829.93
Semi-finished
products shipped 35983569.08 0 35983569.08 48244017.80 0.00 48244017.80
in transit
Low-value
13628598.45931993.4112696605.0418956973.992290807.3616666166.63
consumables
Total 2144780276.86 128567221.52 2016213055.34 2166797286.97 208982678.72 1957814608.25
(2) Data resources recognised as inventories
Currency: Renminbi Yuan
Item Purchased data resources Self-processed data resources Other data resources Total
(3) Provision for write-down of inventories / impairment of costs to fulfil a contract
Currency: Renminbi Yuan
Increase Decrease
Opening
Item Reversal or Closing balancebalance Accrual Others Others
write-off
Raw materials 9769459.08 17326879.45 11004010.56 16092327.97
Work in process 29252698.59 14922048.68 25993952.77 18180794.50
Finished goods 167669713.69 45708658.75 120016266.80 93362105.64
Semi-finished
products shipped 123797.00 123797.00 0.00
in transit
Low-value
2290807.36814596.472173410.42931993.41
consumables
Total 208982678.72 78895980.35 0.00 159311437.55 0.00 128567221.52
198Section VIII Financial Report The reversal or write-off of inventory write-downs in the current year were mainly due to the corresponding write-off due to
the sale or use of products.Inventories written down on a collective basis
Currency: Renminbi Yuan
End of year Beginning of year
Name Accruing Accruing Inventory Inventory write-
Closing balance proportion Opening balance proportion
write-downs downs
(%)(%)
Raw materials
and entrusted
426515412.1316092327.973.77%422260084.869769459.082.31%
processing
materials
Work in process 283112438.71 18180794.50 6.42% 265426666.70 29252698.59 11.02%
Finished goods 1385540258.49 93362105.64 6.74% 1411909543.62 167669713.69 11.88%
Semi-finished
products shipped 35983569.08 0.00% 48244017.80 0.00 0.00%
in transit
Low-value
13628598.45931993.416.84%18956973.992290807.3612.08%
consumables
Total 2144780276.86 128567221.52 5.99% 2166797286.97 208982678.72 9.64%
Criteria for provision for write-down of inventories on a collective basis
For finished goods the net realisable value is the estimated selling price of them less the estimated costs necessary to make
the sale and relevant taxes. For inventories of materials subject to processing the net realisable value is the estimated selling
price of finished goods produced less the estimated costs of completion and the estimated costs necessary to make the sale
and relevant taxes.
(4) Description of the capitalised amount of borrowing costs included in closing balance of inventories
(5) Description of amortisation of costs to fulfil a contract for the current year
11. Assets classified as held for sale
Currency: Renminbi Yuan
Impairment Carrying amount Estimated Estimated
Item Closing balance Fair value
allowance at end of year disposal cost disposal time
Other disclosures:
19912. Current portion of non-current assets
Currency: Renminbi Yuan
Item Closing balance Opening balance
Certificates of deposits due within one year 428086333.31 340988583.36
Long-term receivables due within one year 4707526.63 4479684.84
Total 432793859.94 345468268.20
(1) Debt investments due within one year
□ Applicable √ Not applicable
(2) Other debt investments due within one year
□ Applicable √ Not applicable
13. Other current assets
Currency: Renminbi Yuan
Item Closing balance Opening balance
Return cost receivable 881568.59 792155.41
VAT input tax to be deducted/Uncertified input tax 55515674.59 38151229.60
Prepaid corporate income tax 1585317.44 745868.29
Prepaid expenses 27676950.97 28014182.32
Others 18202.67 33088.28
Total 85677714.26 67736523.90
Other disclosures:
14. Debt investments
(1) Details of debt investments
Currency: Renminbi Yuan
Closing balance Opening balance
Item Impairment Carrying Impairment Carrying
Book balance Book balance
allowance amount allowance amount
Changes in impairment allowance for debt investments in the current period
Currency: Renminbi Yuan
Item Opening balance Increase Decrease Closing balance
200Section VIII Financial Report (2) Important debt investments at end of year
Currency: Renminbi Yuan
Closing balance Opening balance
Item Delinquency Effective Delinquency Par Coupon Effective Due Par Coupon Due
in principal interest in principal
value rate interest rate date value rate date
payments rate payments
(3) Impairment allowance
Currency: Renminbi Yuan
Stage 1 Stage 2 Stage 3
Provision for bad debts Lifetime ECLs Lifetime ECLs Total
12-month ECLs
(not yet credit-impaired) (credit-impaired)
Provision (reversal) for the year
Criteria for stage classification and provision ratio for bad debts
(4) Debt investments actually written off
Currency: Renminbi Yuan
Item Amount written off
Write-off of significant debt investments
Description of write-off of debt investments:
Description of changes in the book balance of debt investments contributing to significant changes in the loss allowance in
the current period
□ Applicable √ Not applicable
Other disclosures:
15. Other debt investments
(1) Details of other debt investments
Currency: Renminbi Yuan
Change in Accumulated
Cumulative
Opening Interest Interest fair value Closing impairment allowance
Item Cost change in Notes
balance accrued adjustment during the balance recognised in other
fair value
period comprehensive income
Changes in impairment allowance for other debt investments in the current period
Currency: Renminbi Yuan
Item Opening balance Increase Decrease Closing balance
201(2) Important other debt investments at end of year
Currency: Renminbi Yuan
Closing balance Opening balance
Item Effective Delinquency Effective Delinquency Coupon Due Par Coupon Due
Par value interest in principal interest in principal
rate date value rate date
rate payments rate payments
(3) Impairment allowance
Currency: Renminbi Yuan
Stage 1 Stage 2 Stage 3
Provision for bad debts Lifetime ECLs Lifetime ECLs Total
12-month ECLs
(not yet credit-impaired) (credit-impaired)
Provision (reversal) for the year
Criteria for stage classification and provision ratio for bad debts
(4) Other debt investments actually written off
Currency: Renminbi Yuan
Item Amount written off
Write-off of significant other debt investments
Description of changes in the book balance of other debt investments contributing to significant changes in the loss allowance
in the current period
□ Applicable √ Not applicable
Other disclosures:
16. Other equity investments
Currency: Renminbi Yuan
Gain in other Loss in other Accumulative Accumulative Reasons for being
Dividends
Closing Opening comprehensive comprehensive gain in other loss in other designated as at fair
Item income during
balance balance income during income during comprehensive comprehensive value through other
the current year
the current year the current year income income comprehensive income
Derecognition during the current year
Currency: Renminbi Yuan
Accumulated gain transferred to Accumulated loss transferred to
Item Reason for derecognition
retained earnings retained earnings
202Section VIII Financial Report Breakdown of equity investments which are not held for trading during the current year
Currency: Renminbi Yuan
Reasons for being Reasons for
Dividend Transfers of the
Accumulated Accumulated designated as at fair transfers of
Item income cumulative gain or
gains losses value through other cumulative gain or
recognised loss within equity
comprehensive income loss within equity
Other disclosures:
17. Long-term receivables
(1) Long-term receivables
Currency: Renminbi Yuan
Closing balance Opening balance
Discount rate
Item Provision for Carrying Provision for Carrying
Book balance Book balance range
bad debts amount bad debts amount
Finance leases 31209579.37 31209579.37 35689264.21 35689264.21 4.20%-5.00%
Including:
Unearned finance -5407510.69 -5407510.69 -7241784.14 -7241784.14 4.20%-5.00%
income
Current portion of
-4707526.63-4707526.63-4479684.84-4479684.844.20%-5.00%
non-current assets
Rental deposits 60092661.11 3004633.13 57088027.98 60237947.22 3011897.37 57226049.85 2.90%-3.00%
Total 86594713.85 3004633.13 83590080.72 91447526.59 3011897.37 88435629.22
(2) Disclosure by bad debt provision accrual method
Currency: Renminbi Yuan
Closing balance Opening balance
Book balance Impairment allowance Book balance Impairment allowance
Category Carrying
Proportion Provision Proportion Provision ratio Carrying amount
Amount Amount amount Amount Amount
(%) ratio (%) (%) (%)
Including:
Provision for bad
debts made on a 86594713.85 100.00% 3004633.13 3.47% 83590080.72 91447526.59 100.00% 3011897.34 3.29% 88435629.25
collective basis
Including:
Total 86594713.85 100.00% 3004633.13 3.47% 83590080.72 91447526.59 100.00% 3011897.34 3.29% 88435629.25
203Provision for bad debts made on a collective basis:
Currency: Renminbi Yuan
Closing balance
Name
Book balance Provision for bad debts Provision ratio (%)
Provision for bad debts made on a collective
86594713.853004633.133.47%
basis by credit risk characteristics
Including:
Deposit and guarantee deposit 60092661.11 3004633.13 5.00%
Others 26502052.74
Total 86594713.85 3004633.13
Description of the basis for determining provision for bad debts on a collective basis:
Where the impairment allowances are made based on the general ECL model:
Currency: Renminbi Yuan
Stage 1 Stage 2 Stage 3
Provision for bad debts Lifetime ECLs Lifetime ECLs Total
12-month ECLs
(not yet credit-impaired) (credit-impaired)
Provision (reversal) for the year
Criteria for stage classification and provision ratio for bad debts
(3) Provision for bad debts accrued recovered or reversed
Currency: Renminbi Yuan
Changes for the year
Opening
Category
balance Recovery or Transfer/Write-
Closing balance
Accrual Others
reversal off
Rental deposit 3011897.37 1122278.09 1129542.33 3004633.13
Total 3011897.37 1122278.09 1129542.33 3004633.13
Significant recovery or reversal of provision for bad debts for the current period:
Currency: Renminbi Yuan
Amount recovered or Reasons for Recovery The basis for determining the original provision
Entity name
reversed reversal method ratio for bad debts and its reasonableness
Other disclosures:
204Section VIII Financial Report (4) Long-term receivables actually written off
Currency: Renminbi Yuan
Item Amount written off
Write-off of significant long-term receivables
Currency: Renminbi Yuan
Nature of long-term Amount Reasons for Write-off procedures Whether due to/from
Entity name
receivables written off write-off performed related party transactions
Description of write-off of long-term receivables:
18. Long-term equity investments
Currency: Renminbi Yuan
Changes for the year
Opening Opening Closing
Investment Adjustment Cash Closing balance
balance balance of Other Provision balance
Investee Additional Reduced gains and losses on other dividends of impairment
(carrying impairment changes for Others (carrying
investment investment recognised under comprehensive or profits provision
amount) provision in equity impairment amount)
the equity method income declared
I. Joint ventures
II. Associates
Company S Note 1* ： 423148649.68 71327283.40 -27439130.85 -10451682.74 456585119.49
Chengdu Winner Likang
20712599.93274423.5220987023.45
Medical Products Co. Ltd.Zhejiang Shiyou Medical
992318.26-74953.15-21081.02896284.09
Materials Co. Ltd.Hubei Xianchuang
502210.1319187.88521398.01
Technology Co. Ltd.Sub-total 445355778.00 0.00 71327283.40 0.00 -27220472.60 0.00 0.00 0.00 0.00 -10472763.76 0.00 478989825.04
Total 445355778.00 0.00 71327283.40 0.00 -27220472.60 0.00 0.00 0.00 0.00 -10472763.76 0.00 478989825.04
Note 1*: On 28 February 2024 the Group acquired a 35.2055% equity interest in Company S at a consideration of USD60
million (equivalent to RMB428074000.00). The Group appointed two directors to Company S and exercises significant
impact over it and the investment is accounted for using the equity method. The Group paid cash consideration on 12 March
2024 and appointed two directors to Company S on 12 March 2024 and 1 April 2024 respectively. The Group has significant
impact over Company S and accounts for the investment using the equity method. On 20 August the Group paid an
additional cash consideration of USD10 million (equivalent to RMB71327283.40). Following the capital increase the
shareholding increased to 38.8219%. The Group continues to have significant impact over Company S and the investment is
accounted for using the equity method.The recoverable amount has been determined based on the fair value less costs of disposal
□ Applicable √ Not applicable
205The recoverable amount has been determined based on the present value of expected future cash flows
√ Applicable □ Not applicable
Currency: Renminbi Yuan
Years of Key parameters Key parameters
Recoverable Impairment Basis for determining the key
Item Carrying amount forecast for forecast for the stable
amount provided parameters of the stable period
period period period
The pre-tax discount rate is determined
b a s e d o n t h e r e g i o n w h e r e t h e
Company’s primary business is located
and the business scope considering
Company S 456585119.49 492717012.32 5 years Note 2*
the past performance of the asset
group production expansion plans and
expectations for the development of the
market in which it operates.Total 456585119.49 492717012.32
Note 2*: Based on a comprehensive analysis of Company S’s signed contracts agreements development plans business
trends over the years market competition and other factors according to the specific product categories it is predicted that
the revenue growth rate from 2026 to 2030 will be 19.26% 23.00% 23.50% 23.50% and 23.50% respectively and the gross
margins will be 46.63% 46.63% 46.63% 46.63% and 46.63% from 2026 to 2030 respectively. In the stable period the
revenue growth rate will be 2.00% the gross margin will be consistent with that in 2030 and the discount rate before taxation
will be 15.59%.Reasons for the difference between the above information and the information used in the prior year’s impairment testing or
external information
Reasons for the difference between the information used in the prior year’s impairment testing and the actual situation of the
current year
Other disclosures:
19. Other non-current financial assets
Currency: Renminbi Yuan
Item Closing balance Opening balance
Financial assets at fair value through profit or loss
Including: Fund investments 73603810.38 76673047.39
Convertible corporate bond investments (Note 1*) 26277261.16 31233669.47
Total 99881071.54 107906716.86
Other disclosures:
Note 1*: The convertible bonds were subscribed by Nature Health Development (Hong Kong) Co. Ltd. on 20 September
2024 for NUGEN MEDICAL DEVICES INC. These convertible bonds are due within five years from the closing date
and bear an annual interest rate of 12%. Prior to maturity the holders have the right to convert all or any portion of the
outstanding principal amount of the convertible bonds into one ordinary share of NUGEN MEDICAL DEVICES INC. and
one ordinary share purchase warrant at an exercise price of CAD0.10 per share.
206Section VIII Financial Report 20. Investment properties
(1) Investment properties measured at cost
√ Applicable □ Not applicable
Currency: Renminbi Yuan
Construction in
Item Buildings Land use rights Total
progress
I. Cost
1. Opening balance 5972970.52 5972970.52
2. Increase
(1) Purchases
(2) Transfers from inventories / fixed assets /
construction in progress
(3) Increase from business combinations
3. Decrease
(1) Disposals
(2) Other transfer-outs
4. Closing balance 5972970.52 5972970.52
II. Accumulated depreciation and amortisation
1. Opening balance 3612624.27 3612624.27
2. Increase 906050.98 906050.98
(1) Provision or amortisation 906050.98 906050.98
3. Decrease
(1) Disposals
(2) Other transfer-outs
4. Closing balance 4518675.25 4518675.25
III. Provision for impairment
1. Opening balance
2. Increase
(1) Provision
3. Decrease
(1) Disposals
(2) Other transfer-outs
4. Closing balance
IV. Carrying amount
1. Carrying amount at end of year 1454295.27 1454295.27
2. Carrying amount at beginning of year 2360346.25 2360346.25
207The recoverable amount has been determined based on the fair value less costs of disposal
□ Applicable √ Not applicable
The recoverable amount has been determined based on the present value of expected future cash flows
□ Applicable √ Not applicable
Reasons for the difference between the above information and the information used in the prior year’s impairment testing or
external information
Reasons for the difference between the information used in the prior year’s impairment testing and the actual situation of the
current year
Other disclosures:
(2) Investment properties measured using the fair value model
□ Applicable √ Not applicable
(3) Transfer to investment properties using the fair value model
Currency: Renminbi Yuan
Accounting accounts Reasons for Approval Effect on profit Effect on other
Item Amount
before such transfer transfer procedures or loss comprehensive income
(4) Investment properties without certificates of title
Currency: Renminbi Yuan
Item Carrying amount Reasons for not obtaining the certificate of title
Other disclosures:
21. Fixed assets
Currency: Renminbi Yuan
Item Closing balance Opening balance
Fixed assets 4199969234.92 3354304108.81
Total 4199969234.92 3354304108.81
208Section VIII Financial Report (1) Fixed assets
Currency: Renminbi Yuan
Electronic
Land use equipment
Item Buildings Machinery Vehicles Total
rights office equipment
and others
I. Cost:
1. Opening balance 2449675239.17 2689773.12 2175377566.42 43346681.91 237919582.49 4909008843.11
2. Increase 837981617.82 351391508.94 2730054.59 42081268.96 1234184450.31
(1) Purchases 3089253.73 142229888.56 2730054.59 41426916.64 189476113.52
(2) Transfers from construction in progress 834892364.09 209161620.38 0.00 654352.32 1044708336.79
(3) Increase from business combinations
3. Decrease 15159683.22 0.00 89697878.66 3761514.40 19658171.68 128277247.96
(1) Disposals or retirements 14025795.53 88491521.13 3458835.08 19201640.37 125177792.11
Changes in exchange rate 1133887.69 1206357.53 302679.32 456531.31 3099455.85
4. Closing balance 3272497173.77 2689773.12 2437071196.70 42315222.10 260342679.77 6014916045.46
II. Accumulated depreciation
1. Opening balance 437196383.75 852231647.45 22789513.75 131513650.62 1443731195.57
2. Increase 112254625.77 0.00 192479402.40 3001095.91 30175955.43 337911079.51
(1) Provision 112254625.77 192479402.40 3001095.91 30175955.43 337911079.51
0.00
3. Decrease 4237909.56 0.00 58210827.56 3455078.94 12543803.18 78447619.24
(1) Disposals or retirements 3869531.89 57293583.44 3177579.42 12189802.09 76530496.84
Changes in exchange rate 368377.67 917244.12 277499.52 354001.09 1917122.40
4. Closing balance 545213099.96 986500222.29 22335530.72 149145802.87 1703194655.84
III. Provision for impairment
1. Opening balance 43277161.98 66581288.93 1115087.82 110973538.73
2. Increase 3666802.23 5938977.68 9605779.91
(1) Provision 3666802.23 5938977.68 9605779.91
3. Decrease 0.00 0.00 8824589.69 0.00 2574.25 8827163.94
(1) Disposals or retirements 8824589.69 2574.25 8827163.94
4. Closing balance 46943964.21 0.00 63695676.92 0.00 1112513.57 111752154.70
IV. Carrying amount
1. Carrying amount at end of year 2680340109.60 2689773.12 1386875297.49 19979691.38 110084363.33 4199969234.92
2. Carrying amount at beginning of year 1969201693.44 2689773.12 1256564630.04 20557168.16 105290844.05 3354304108.81
209(2) Temporarily idle fixed assets
Currency: Renminbi Yuan
Accumulated Provision for Carrying
Item Cost Notes
depreciation impairment amount
Buildings 953844.52 853332.71 70292.96 30218.85 Not currently in use
Machinery 38098183.71 17648757.90 9398153.44 11051272.37 Not currently in use
Electronic equipment
1233871.62 719216.18 428291.64 86363.80 Not currently in use
office equipment and others
Total 40285899.85 19221306.79 9896738.04 11167855.02
(3) Fixed assets leased out under operating leases
Currency: Renminbi Yuan
Item Carrying amount at end of year
Plants leased out 4098595.72
(4) Fixed assets without certificates of title
Currency: Renminbi Yuan
Item Carrying amount Reasons for not obtaining the certificate of title
Winner Medical (Wuhan) - No.1 Workshops Phase II
113759373.34 The formalities have not yet been completed
(Phase II)
Winner Medical (Wuhan) - No.1 Sorting Workshops
67399910.25 The formalities have not yet been completed
(Phase II)
Winner Medical (Wuhan) - No.2 Sorting Workshops
131134374.70 The formalities have not yet been completed
(Phase II)
Winner Medical (Wuhan) - No.3 Sorting Workshops
59590363.28 The formalities have not yet been completed
(Phase II)
Winner Medical (Wuhan) - Connecting Corridor for
2666149.81 The formalities have not yet been completed
Sorting Workshops (Phase II)
Winner Medical (Wuhan) - Guardhouse Phase II 171745.64 The formalities have not yet been completed
Winner Medical (Wuhan) - Fire Pump Room Phase II
223590.21 The formalities have not yet been completed
(Phase II)
Winner Medical (Wuhan) - Shift Workers’ Dormitory
29930723.58 The formalities have not yet been completed
Building No. 10
Winner Medical (Wuhan) - Canteen Expansion Project 8992881.67 The formalities have not yet been completed
Winner Medical (Wuhan) - R&D Building Phase II
67728103.43 The formalities have not yet been completed
(Phase II)
Winner Medical (Hunan) - Hazardous Chemicals
2591998.34 The formalities have not yet been completed
Warehouse (with Spill Containment Basin)
210Section VIII Financial Report Other disclosures:
(5) Impairment testing of fixed assets
√ Applicable □ Not applicable
The recoverable amount has been determined based on the fair value less costs of disposal
√ Applicable □ Not applicable
Currency: Renminbi Yuan
Determination Basis for
Recoverable Impairment Key
Item Carrying amount of fair value and determining key
amount provided parameters
costs of disposal parameters
Based on market
Buildings 22077361.03 18410558.79 3666802.24
valuation
Based on market
Machinery 6444242.53 505264.86 5938977.67 valuation or
residual value rate
Total 28521603.56 18915823.65 9605779.91
The recoverable amount has been determined based on the present value of expected future cash flows
□ Applicable √ Not applicable
Reasons for the difference between the above information and the information used in the prior year’s impairment testing or
external information
Reasons for the difference between the information used in the prior year’s impairment testing and the actual situation of the
current year
Other disclosures:
The Group conducted impairment testing on the long-term asset groups or sets of asset groups with any indication of
impairment (including fixed assets construction in progress intangible assets and right-of-use assets). According to the
testing results there is no need to make provision for impairment loss. The recoverable amount of the relevant asset groups
or sets of asset groups is determined at the present value of the estimated future cash flows. Please refer to Note VII.27 for
specific assumptions.
(6) Disposal of fixed assets
Currency: Renminbi Yuan
Item Closing balance Opening balance
Other disclosures:
21122. Construction in progress
Currency: Renminbi Yuan
Item Closing balance Opening balance
Construction in progress 511625219.44 1074955450.40
Total 511625219.44 1074955450.40
(1) Construction in progress
Currency: Renminbi Yuan
Closing balance Opening balance
Project Provision for Provision for
Book balance Carrying amount Book balance Carrying amount
impairment impairment
Winner Medical (Jiayu)
9838707.19838707.1426769460.94426769460.94
engineering project
Winner Medical (Shenzhen)
12104881.8212104881.82190817210.35190817210.35
engineering project
Winner Medical (Hunan)
196620000.37196620000.37133036931.53133036931.53
engineering project
Mexico Longterm Medical
57351464.3757351464.3775596709.2875596709.28
engineering project
Winner Medical (Wuhan)
--47827152.5647827152.56
engineering project
GRI engineering project 4969915.33 4969915.33 43810296.12 43810296.12
Winner Guilin engineering
15880227.6410205833.265674394.3815859336.5510205833.265653503.29
project
Winner Medical (Huanggang)
26426689.7826426689.78-
Engineering Project
Other equipment to be
198639166.29198639166.29151444186.33151444186.33
installed and sporadic project
Total 521831052.70 10205833.26 511625219.44 1085161283.66 10205833.26 1074955450.40
212Section VIII Financial Report (2) Changes in significant construction in progress
Currency: Renminbi Yuan
Accumulated Including:
Engineering Current
amount Amount of
Transfers to inputs as a Construction interest Source of
Project name Budgeted amount Opening balance Increase Decrease Closing balance of interest interest eligible
fixed assets proportion of progress (%) capitalisation funds
eligible for for capitalisation
the budget (%) rate
capitalisation for the period
Winner Med ica l (Hunan)
E n g i n e e r i n g P r o j e c t - 369300000.00 133036931.53 63813964.34 230895.50 196620000.37 78.87% 95% Others
Industrial Park Project Phase I
Wi n n e r M e d i c a l ( J i a y u )
E n g i n e e r i n g P r o j e c t -
I n d u s t r i a l P a r k P r o j e c t 465667142.65 358960025.25 101518968.82 442383785.52 8256501.45 9838707.10 98.89% 95% Others
Construction Engineering of
Workshop 1-4
Winner Medical (Shenzhen)
Engineering Project - Industry 261723960.00 188025738.46 88593241.07 276364020.22 254959.31 99.90% 99.90% Others
Building
Winner Medica l (Wuhan)
Engineering Project - Phase II
563402300.00 35656557.76 4366074.26 31290483.50 100% 100% Others
Comprehensive Infrastructure
Project
Mexico Longterm Medical
Engineering Project - Plant 70288000.00 57351464.37 57351464.37 82% 82% Others
Cleanroom Project
Mexico Longterm Medical
Engineering Project - Plant 88000000.00 64767119.42 20271683.31 85038802.73 100% 100% Others
Construction Project
Total 1818381402.65 780446372.42 331549321.91 808383578.23 39546984.95 264065131.15
(3) Provision for impairment of construction in progress
Currency: Renminbi Yuan
Item Opening balance Increase Decrease Closing balance Reason for provision
Winner Guilin - Buildings Project on hold due to
10205833.2610205833.26
in 1-3# Workshops policy reason
Total 10205833.26 10205833.26 --
Other disclosures:
(4) Impairment testing of construction in progress
√ Applicable □Not applicable
213The recoverable amount has been determined based on the fair value less costs of disposal.
□Applicable √ Not applicable
The recoverable amount was determined according to the present value of the expected future cash flows.√ Applicable □Not applicable
Currency: Renminbi Yuan
Years of Key Key parameters Basis for determining
Carrying Recoverable Impairment
Item forecast parameters for for the stable the key parameters of
amount amount provided
period forecast period period the stable period
Reasons for the difference between the above information and the information used in the prior year’s impairment testing or
external information
Reasons for the difference between the information used in the prior year’s impairment testing and the actual situation of the
current year
Other disclosures:
The Group conducted impairment testing on the long-term asset groups or sets of asset groups with any indication of
impairment (including fixed assets construction in progress intangible assets and right-of-use assets). According to the
testing results there is no need to make provision for impairment loss. The recoverable amount of the relevant asset groups
or sets of asset groups is determined at the present value of the estimated future cash flows. Please refer to note VII.27 for
specific assumptions.
(5) Materials for construction
Currency: Renminbi Yuan
Closing balance Opening balance
Item Provision for Carrying Provision for Carrying
Book balance Book balance
impairment amount impairment amount
Other disclosures:
23. Bearer biological assets
(1) Bearer biological assets measured at cost
□ Applicable √ Not applicable
(2) Impairment testing of bearer biological assets measured at cost
□ Applicable √ Not applicable
(3) Bearer biological assets measured using the fair value model
□ Applicable √ Not applicable
24. Oil and gas assets
□ Applicable √ Not applicable
214Section VIII Financial Report 25. Right-of-use assets
(1) Right-of-use assets
Currency: Renminbi Yuan
Item Buildings Machinery Vehicles Total
I. Cost
1. Opening balance 1008461009.53 1006008.22 3485345.53 1012952363.28
2. Increase 206577947.57 206577947.57
New lease 206577947.57 206577947.57
3. Decrease 204456553.70 75115.70 77383.16 204609052.56
Disposals 203189886.19 52779.87 0.00 203242666.06
Changes in exchange rate 1266667.51 22335.83 77383.16 1366386.50
4. Closing balance 1010582403.40 930892.52 3407962.37 1014921258.29
II. Accumulated depreciation
1. Opening balance 417397168.51 104601.86 227969.25 417729739.62
2. Increase 230435947.31 401906.05 905105.54 231742958.90
(1) Provision 230435947.31 401906.05 905105.54 231742958.90
3. Decrease 189254448.50 61085.51 18535.90 189334069.91
(1) Disposals 189011295.31 52779.87 189064075.18
Changes in exchange rate 243153.19 8305.64 18535.90 269994.73
4. Closing balance 458578667.32 445422.40 1114538.89 460138628.61
III. Provision for impairment
1. Opening balance
2. Increase
(1) Provision
3. Decrease
(1) Disposals
4. Closing balance
IV. Carrying amount
1. Carrying amount at end of year 552003736.08 485470.12 2293423.48 554782629.68
2. Carrying amount at beginning of year 591063841.02 901406.36 3257376.28 595222623.66
(
2152) Impairment testing of right-of-use assets
√ Applicable □ Not applicable
The recoverable amount has been determined based on the fair value less costs of disposal
□ Applicable √ Not applicable
The recoverable amount has been determined based on the present value of expected future cash flows
√ Applicable □ Not applicable
Currency: Renminbi Yuan
Years of Key Key parameters Basis for determining
Carrying Recoverable Impairment
Item forecast parameters for for the stable the key parameters of
amount amount provided
period forecast period period the stable period
Reasons for the difference between the above information and the information used in the prior year’s impairment testing or
external information
Reasons for the difference between the information used in the prior year’s impairment testing and the actual situation of the
current year
Other disclosures:
The Group conducted impairment testing on the long-term asset groups or sets of asset groups with any indication of
impairment (including fixed assets construction in progress intangible assets and right-of-use assets). According to the
testing results there is no need to make provision for impairment loss. The recoverable amount of the relevant asset groups
or sets of asset groups is determined at the present value of the estimated future cash flows. Please refer to Note VII.27 for
specific assumptions.
26. Intangible assets
(1) Intangible assets
Currency: Renminbi Yuan
Land use Know- Software use Franchised Customer
Item Patents Trademarks Total
rights how rights use right relationships
I. Cost
1. Opening balance 585391553.32 267863690.35 0.00 122351651.77 10228226.53 151413127.04 235586649.09 1372834898.10
2. Increase 574463.60 22449545.61 0.00 166583.38 0.00 0.00 8971122.91 32161715.50
(1) Purchases 47194.00 21463554.93 0.00 0.00 0.00 0.00 0.00 21510748.93
(2) Internal development
(3) Increase from business
combinations
(4) Changes in exchange rate 527269.60 985990.68 0.00 166583.38 0.00 0.00 8971122.91 10650966.57
3. Decrease 0.00 0.00 30620808.89 0.00 2996175.22 0.00 33616984.11
(1) Disposals 0.00 0.00 0.00 30620808.89 0.00 2996175.22 0.00 33616984.11
216Section VIII Financial Report Land use Know- Software use Franchised Customer
Item Patents Trademarks Total
rights how rights use right relationships
4. Closing balance 585966016.92 290313235.96 0.00 91897426.26 10228226.53 148416951.82 244557772.00 1371379629.49
II. Accumulated amortisation
1. Opening balance 72021779.26 70824030.06 0.00 61602198.95 10228226.53 22122452.66 40280712.37 277079399.83
2. Increase 13472533.35 27923824.74 0.00 6306776.69 0.00 14163211.64 31848287.77 93714634.19
(1) Provision 13352632.77 27923824.74 0.00 6298505.32 0.00 14163211.64 31848287.77 93586462.24
(2) Changes in exchange rate 119900.58 0.00 0.00 8271.37 0.00 0.00 0.00 128171.95
3. Decrease 0.00 0.00 0.00 6727396.47 0.00 1535510.81 0.00 8262907.28
(1) Disposals 0.00 0.00 0.00 6727396.47 0.00 1535510.81 0.00 8262907.28
4. Closing balance 85494312.61 98747854.80 0.00 61181579.17 10228226.53 34750153.49 72129000.14 362531126.74
III. Provision for impairment
1. Opening balance
2. Increase
(1) Provision
3. Decrease
(1) Disposals
4. Closing balance
IV. Carrying amount
1. Carrying amount at end of year 500471704.31 191565381.16 0.00 30715847.09 0.00 113666798.33 172428771.86 1008848502.75
2. Carrying amount at beginning
513369774.06197039660.2960749452.82129290674.38195305936.721095755498.27
of year
Intangible assets arising from internal R&D activities at end of year account for 0.00% of the closing balance of intangible
assets.
(2) Data resources recognised as intangible assets
□ Applicable √ Not applicable
(3) Land use rights without certificates of title
Currency: Renminbi Yuan
Project Carrying amount Reasons for not obtaining the certificate of title
Winner Medical (Hunan) - Phase II The two certificates are consolidated into one and the real
80285370.77
land for infusion category estate certificate can be applied for upon completion
Other disclosures:
(4) Impairment testing of Intangible assets
√ Applicable □ Not applicable
217The recoverable amount has been determined based on the fair value less costs of disposal
√ Applicable □ Not applicable
The recoverable amount has been determined based on the present value of expected future cash flows
√ Applicable □ Not applicable
Currency: Renminbi Yuan
Years of Key Key parameters Basis for determining
Carrying Recoverable Impairment
Item forecast parameters for for the stable the key parameters of
amount amount provided
period forecast period period the stable period
Reasons for the difference between the above information and the information used in the prior year’s impairment testing or
external information
Reasons for the difference between the information used in the prior year’s impairment testing and the actual situation of the
current year
27. Goodwill
(1) Cost of goodwill
Expressed in Renminbi Yuan
Increase Decrease
Name of the investee or the matter that forms goodwill Opening balance Business Exchange rate Closing balance
Disposals
combinations changes
Business combinations not involving entities under
475092515.29-10548211.76464544303.53
common control - Acquisition of GRI
Business combination not involving entities under
392686398.74392686398.74
common control - Acquisition of Longterm Medical
Business combinations not involving entities under
388989258.26388989258.26
common control - Acquisition of Winner Medical (Hunan)
Business combinations not involving entities under
253215940.40253215940.40
common control - Acquisition of Winner Guilin
Business combinations not involving entities under
20397972.3320397972.33
common control - Acquisition of Junjian Medical
Business combinations not involving entities under
2681232.092681232.09
common control - Acquisition of Winner Medical Malaysia
Business combinations not involving entities under
411644.13411644.13
common control - Acquisition of Hubei Zhongfu
Total 1533474961.24 -10548211.76 1522926749.48
218Section VIII Financial Report (2) Goodwill impairment provision
Expressed in Renminbi Yuan
Increase Decrease
Name of the investee or the matter that forms goodwill Opening balance Closing balance
Depreciation Disposals
Business combinations not involving entities under
156144473.91179042411.72335186885.63
common control - Acquisition of Winner Medical (Hunan)
Business combinations not involving entities under
123384750.24123384750.24
common control - Acquisition of Winner Guilin
Business combinations not involving entities under
2681232.092681232.09
common control - Acquisition of Winner Medical Malaysia
Total 282210456.24 179042411.72 461252867.96
(3) Information about the asset group or combination of asset groups to which goodwill belongs
Operating Is it consistent
Name Composition and basis of asset group or portfolio segments with previous
and basis years
The cash inflows generated by GRI from operating related long-term
GRI assets are basically independent of the cash inflows produced by other Yes
assets or asset groups.The cash inflows generated by Longterm Medical and its subsidiaries
Longterm Medical
from operating related long-term assets are basically independent of Yes
and its subsidiaries
the cash inflows produced by other assets or asset groups.The cash inflows generated by Winner Medical (Hunan) and its
Winner Medical
subsidiaries from operating related long-term assets are basically
(Hunan) and its Yes
independent of the cash inflows produced by other assets or asset
subsidiaries
groups.The cash inflows generated by Winner Guilin and its subsidiaries from
Winner Guilin and
operating related long-term assets are basically independent of the Yes
its subsidiaries
cash inflows produced by other assets or asset groups.The cash inflows generated by Junjian Medical from operating
Junjian Medical related long-term assets are basically independent of the cash inflows Yes
produced by other assets or asset groups.The cash inflows generated by Hubei Zhongfu from operating
Hubei Zhongfu related long-term assets are basically independent of the cash inflows Yes
produced by other assets or asset groups.
219Changes in asset groups or groups of asset groups
Name Composition before change Composition after change Objective facts and basis for the change
Other descriptions
(4) Specific method for determining recoverable amount
The recoverable amount has been determined based on the fair value less costs of disposal.□Applicable √ Not applicable
The recoverable amount is determined at the present value of the expected future cash flows
√ Applicable □Not applicable
Expressed in Renminbi Yuan
Key Key
Years of
Recoverable parameters parameters Basis for determining the key parameters
Item Carrying amount Impairment amount forecast
amount forecast for the stable of the stable period
period
period period
The pre-tax discount rate is determined
b a s e d o n t h e r e g i o n w h e r e t h e
Company’s primary business is located
and the business scope considering
GRI 1213978323.34 1308000000.00 5 years Note 1 Note 1
the pas t per formance of the asse t
group production expansion plans and
expectations for the development of the
market in which it operates.The pre-tax discount rate is determined
b a s e d o n t h e r e g i o n w h e r e t h e
Company’s primary business is located
Longterm
and the business scope considering
Medical and its 1428939110.72 1491000000.00 5 Note 2 Note 2
the pas t per formance of the asse t
subsidiaries
group production expansion plans and
expectations for the development of the
market in which it operates.The pre-tax discount rate is determined
b a s e d o n t h e r e g i o n w h e r e t h e
Company’s primary business is located
Winner
and the business scope considering
Guilin and its 422615542.28 442555600.00 5 Note 3 Note 3
the pas t per formance of the asse t
subsidiaries
group production expansion plans and
expectations for the development of the
market in which it operates.
220Section VIII Financial Report Key Key
Years of
Recoverable parameters parameters Basis for determining the key parameters
Item Carrying amount Impairment amount forecast
amount forecast for the stable of the stable period
period
period period
The pre-tax discount rate is determined
b a s e d o n t h e r e g i o n w h e r e t h e
Company’s primary business is located
Winner Medical
and the business scope considering
(Hunan) and its 913538664.22 652923800.00 179042411.72 5 Note 4 Note 4
the pas t per formance of the asse t
subsidiaries
group production expansion plans and
expectations for the development of the
market in which it operates.The pre-tax discount rate is determined
b a s e d o n t h e r e g i o n w h e r e t h e
Company’s primary business is located
Junjian Medical 105387386.67 114662092.65 7 Note 5 Note 5 and the business scope considering the
past performance of the asset group and
expectations for the development of the
market in which it operates.Total 4084459027.23 4009141492.65 179042411.72Note 6
Note 1: GRI is a global medical consumables and industrial protection enterprise primarily engaged in the R&D production
and sales of surgical kits drapes surgical gowns containers industrial protective clothing and related products. Based on
a comprehensive analysis of its signed contracts agreements development plans business trends over the years market
competition and other factors according to specific product categories it is predicted that the revenue growth rates from 2026
to 2030 will be 13.45% 10.20% 9.19% 8.50% and 8.43% respectively and the gross margins will be 30.85% 32.75%
33.46% 33.47% and 33.48% respectively from 2026 to 2030. In the stable period the revenue growth rate is 2.00% the
gross margin will be consistent with that in 2030 and the discount rate before taxation will be 15.10%.Note 2: Longterm Medical and its subsidiaries are mainly engaged in the research and development production and sales
of products related to wound care puncture care stoma care disinfection minimally invasive and others. Based on a
comprehensive analysis of its signed contracts agreements development plans business trends over the years market
competition and other factors according to specific product categories it is predicted that the revenue growth rates from
2026 to 2030 will be 7.25% 7.04% 6.17% 5.40% and 4.43% respectively and the gross margins will be 48.85% 48.66%
48.66% 48.91% and 48.94% from 2026 to 2030 respectively. In the stable period the revenue growth rate will be zero the
gross margin will be consistent with that in 2030 and the discount rate before taxation will be 13.69%.Note 3: Winner Guilin and its subsidiaries are mainly engaged in the research and development production and sales of
products such as medical gloves protective gloves and condoms. Based on a comprehensive analysis of its signed contracts
agreements development plans business trends over the years market competition and other factors according to specific
product categories it is predicted that the revenue growth rates from 2026 to 2030 will be 10.87% 11.18% 13.56% 12.93%
and 9.10% respectively and the gross margins will be 18.89% 19.58% 20.37% 20.90% and 21.04% from 2026 to 2030
respectively. In the stable period the revenue growth rate will be zero the gross margin will be consistent with that in 2030
and the discount rate before taxation will be 9.80%.
221Note 4: Winner Medical (Hunan) and its subsidiaries are mainly engaged in the research and development production and
sales of disposable sterile infusion medical devices. Based on a comprehensive analysis of its signed contracts agreements
development plans business trends over the years market competition and other factors according to specific product
categories it is predicted that the revenue growth rates from 2026 to 2030 will be 15.24% 40.01% 17.47% 10.75% and
9.83% respectively and the gross margins will be 20.65% 23.62% 23.89% 23.55% and 23.56% from 2026 to 2030
respectively. In the stable period the revenue growth rate will be zero the gross margin will be 22.98% and the discount rate
before taxation will be 10.79%.Note 5: Junjian Medical is mainly engaged in the sales of medical equipment. Based on a comprehensive analysis of its
signed contracts agreements development plans business trends over the years market competition and other factors
according to specific product categories it is predicted that the revenue growth rates from 2026 to 2032 will be 4.71%
6.40% 13.26% 13.28% 13.07% 13.08% and 13.10% respectively and the gross margins will be 29.38% 28.47% 28.18%
28.21% 28.26% 28.31% and 28.37% from 2026 to 2032 respectively. In the stable period the revenue growth rate will be
zero the gross margin will be consistent with that in 2032 and the discount rate before taxation will be 15.71%.Note 6: Following the assessment the recoverable amounts of GRI and its subsidiaries Longterm Medical and its
subsidiaries Winner Guilin and its subsidiaries and Junjian Medical exceeded the carrying amounts of the related asset group
containing goodwill thus no goodwill impairment provision was made for this year; the recoverable amount of Winner
Medical (Hunan) and its subsidiaries was also lower than the carrying amount of the related asset group containing goodwill
leading to a goodwill impairment provision of RMB179042411.72 in the current year.Reasons for the difference between the above information and the information used in the previous year’s impairment test or
external information
Reasons for the difference between the information used in the impairment test of the previous year and the actual situation
of the current year
(5) Completion of performance commitments and impairment of goodwill
There is a performance commitment when goodwill is formed and the reporting period or the previous period is within the
performance commitment period
□Applicable √ Not applicable
Other descriptions:
28. Long-term prepaid expenses
Expressed in Renminbi Yuan
Item Opening balance Increase Amortisation Other decrease Closing balance
Decoration expenses 88512086.02 18598733.30 11597910.01 21747423.10 73765486.21
Decoration expenses
54691626.3639053090.0619361658.6015445898.4558937159.37
of leased assets
Others 651431.64 2198449.34 1587699.17 63813.30 1198368.51
Total 143855144.02 59850272.70 32547267.78 37257134.85 133901014.09
Other descriptions:
222Section VIII Financial Report 29. Deferred tax assets/deferred tax liabilities
(1) Unoffset deferred tax assets
Expressed in Renminbi Yuan
Closing balance Opening balance
Item Deductible Deductible Deferred tax Deferred tax
temporary temporary
assets assets
differences differences
Provision for impairment of assets 492818700.52 83709759.89 550449530.43 90418899.06
Unrealised profits from internal
198204306.8129730646.02150436301.1825447384.76
transactions
Tax losses 16643858.26 1209683.26 25130761.33 5703567.28
Termination benefits 6145109.42 969438.85 4853272.78 727990.92
Deferred income 211162383.14 32710427.18 157154401.72 24692720.59
Membership points 12677270.34 3169317.58 12284747.04 3071186.76
Accrued expenses 15247192.70 2721192.02 15760822.19 3527287.64
Others 24521745.80 6051139.48 6468018.78 1617004.69
Deferred tax assets arising from leases 601510665.94 134030658.55 654330932.49 150868185.35
Total 1578931232.93 294302262.83 1576868787.94 306074227.05
(2) Unoffset deferred tax liabilities:
Expressed in Renminbi Yuan
Closing balance Opening balance
Item Taxable Taxable Deferred tax Deferred tax
temporary temporary
liabilities liabilities
differences differences
Appreciation of assets evaluation for
business combinations not involving 724757791.91 131212262.85 802989102.65 147254914.34
entities under common control
Changes in fair value of financial assets
25280603.313997679.9737518003.215642558.53
held for trading
Depreciation of fixed assets 138362863.72 20754429.57 186776801.45 28423676.90
Changes in fair value of other non-current
3603810.38540571.566673047.391000957.11
financial assets
Others 881568.59 220392.14 9174543.11 1997248.94
Deferred tax liabilities arising from leases 576310192.80 128363802.68 634023315.85 141270314.21
Total 1469196830.71 285089138.77 1677154813.66 325589670.03
223(3) Deferred tax assets or liabilities presented on a net basis
Expressed in Renminbi Yuan
Closing offset amount Ending balance of Deferred tax assets and Opening balance of
Item of deferred tax assets deferred tax assets or liabilities offset at the deferred tax assets or
and liabilities liabilities after offsetting beginning of the period liabilities after offsetting
Deferred tax assets 148192931.59 146109331.24 167073839.41 139000387.64
Deferred tax liabilities 148192931.59 136896207.18 167073839.41 158515830.62
(4) Details of unrecognised deferred tax assets
Expressed in Renminbi Yuan
Item Closing balance Opening balance
Tax losses 327677451.79 276754326.94
Provision for impairment 1572475.78 15592137.87
Total 329249927.57 292346464.81
(5) Deductible losses of unrecognised deferred tax assets will expire in the following years
Expressed in Renminbi Yuan
Year Closing balance Opening balance Remarks
44694974.69
202658424501.1765550076.42
202766306538.5775041455.71
202820926758.4920645028.50
202915653500.0812715543.46
203019973750.69
No maturity date 146392402.79 58107248.16
Total 327677451.79 276754326.94
Other descriptions:
30. Other non-current assets
Expressed in Renminbi Yuan
Closing balance Opening balance
Item Impairment Gross carrying Impairment
Carrying amount Carrying amounts Carrying amounts
allowance amount allowance
CDs 1559776367.96 1559776367.96 1841393117.97 1841393117.97
Prepayments for long-term assets 77756462.62 77756462.62 150678238.05 150678238.05
Buildings and land use rights of
20228190.6120228190.6120228190.6120228190.61
Shenzhen Longhua Industrial Park
Total 1657761021.19 1657761021.19 2012299546.63 2012299546.63
Other descriptions:
224Section VIII Financial Report 31. Assets with restricted ownership or use rights
Expressed in Renminbi Yuan
Closing balance Opening balance
Item Gross carrying Carrying Type of Gross carrying Carrying Type of
Restricted situation Restricted situation
amount amounts restriction amount amounts restriction
F u r t h e r d e t a i l s a r e
Further details are included inCurrency funds 33267211.34 33267211.34 Deposit 54991513.28 54991513.28 Deposit included in “Note VII.1.“Note VII.1. Currency funds”.Currency funds”.Further details are included
Fixed assets –
63396831.00 33434982.91 Mortgage in “Note VII.44. Long-termHouses and buildingsborrowings”.Further details are included
Fixed assets –
61320840.57 25780696.38 Mortgage in “Note VII.32. Short-termHouses and buildingsborrowings”.Intangible assets 75150000.00 74210625.00 Mortgage
Total 157984882.91 92482890.63 130141513.28 129202138.28
Other descriptions:
32. Short-term borrowings
(1) Classification of short-term borrowings
Expressed in Renminbi Yuan
Item Closing balance Opening balance
Mortgage borrowings 90000000.00 26000000.00
Guaranteed borrowings 36500000.00
Unsecured borrowings 222013524.63 491131567.12
Bills discounting 1522800000.00 1415000000.00
Interest expenses on borrowings 1816054.61 412597.53
Total 1836629579.24 1969044164.65
Description of classification of short-term borrowings:
Note 1: Unsecured borrowings
RMB unsecured borrowings: As of 31 December Winner Guilin Hong Kong Winner GRI-METC and GRI-Alleset
obtained unsecured borrowings totaling RMB202235501.66 with maturities falling between 24 February 2026 and 11
December 2026 bearing interest rates ranging from 1.2% to 2.6%. The loan terms varied from 6 to 12 months.USD unsecured borrowings: As of 31 December Alleset Inc. obtained unsecured borrowings amounting to
USD2603245.86 maturing on 3 January 2026 with an interest rate of 5.85% and a term of 10 months. Additionally credit
card borrowings by GRI subsidiaries totaled USD210608.99.
225VND unsecured borrowings: As of 31 December the Company had no VND unsecured borrowings.
Note 2: Bills discounting
Bills discounting represents the discounted and unmatured amounts of bank acceptance bills and domestic letters of credit
issued between related parties within the scope of consolidation as at the end of the year. As of 31 December the
borrowing amount was RMB1522800000.00 with interest rates ranging from 0.59% to 2.60% and terms ranging from 6
months to 12 months.Note 3: Mortgage borrowings
RMB mortgage borrowings: As of 31 December GRI-METC obtained mortgage borrowings totaling
RMB90000000.00 with interest rates from 2.40% to 2.60% and a term of 1 year maturing ranging from 16 January 2026 to
19 November 2026. The collateral for these borrowings were certain property and patent rights owned by GRI-METC.
Note 4: Guaranteed borrowings
RMB guaranteed borrowings: As of 31 December the Company had no guaranteed borrowings.
(2) Overdue and unpaid short-term borrowings
The total amount of overdue and unpaid short-term loans at the end of the period is RMB0.00 of which the important
overdue and unpaid short-term loans are as follows:
Expressed in Renminbi Yuan
Borrower Closing balance Borrowing rate Overdue time Overdue interest rate
Other descriptions:
33. Financial liabilities held for trading
Expressed in Renminbi Yuan
Item Closing balance Opening balance
Including:
Including:
Other descriptions:
34. Derivative financial liabilities
Expressed in Renminbi Yuan
Item Closing balance Opening balance
Other descriptions:
226Section VIII Financial Report 35. Notes payable
Expressed in Renminbi Yuan
Category Closing balance Opening balance
Bank acceptance bills 381818750.95 431873210.11
Total 381818750.95 431873210.11
The total amount of notes payable due and unpaid at the end of the period is RMB0.00 and the reason for the overdue is.
36. Accounts payable
(1) Presentation of accounts payable
Expressed in Renminbi Yuan
Item Closing balance Opening balance
Within 1 year inclusive 1260125441.19 1119313821.66
1 to 2 years inclusive 11159306.59 25848505.23
2 to 3 years inclusive 2955160.54 5558801.55
Over 3 years 6378829.00 5209426.54
Total 1280618737.32 1155930554.98
(2) Significant accounts payable aged over one year
Expressed in Renminbi Yuan
Item Closing balance Reasons for not repaying or carrying forward
Other descriptions:
(3) Whether there are any overdue payments to small and medium-sized enterprises that remain unpaid
Whether it is a large enterprise
√ Yes □No
Whether there are any overdue payments to small and medium-sized enterprises that remain unpaid
□Yes √ No
37. Other payables
Expressed in Renminbi Yuan
Item Closing balance Opening balance
Interest payable 0.00 0.00
Dividends payable 164868250.80
Other payables 529651533.30 516522493.00
Total 529651533.30 681390743.80
227(1) Interest payables
Expressed in Renminbi Yuan
Item Closing balance Opening balance
Total 0.00 0.00
Significant overdue and unpaid interest:
Expressed in Renminbi Yuan
Borrower Overdue amount Reason for overdue
Other descriptions:
(2) Dividends payable
Expressed in Renminbi Yuan
Item Closing balance Opening balance
Ordinary share dividends 164868250.80
Total 164868250.80
Other descriptions including significant dividends payable that have not been paid for over one year should disclose the
reasons for non-payment:
(3) Other payables
1) Other payables by nature
Expressed in Renminbi Yuan
Item Closing balance Opening balance
Deposit and guarantee 293025055.19 287382658.22
Accrued expenses such as freight 161355764.74 150720263.25
Commission 27177544.35 24724746.48
Repurchase obligations of employee
3975155.077282100.00
stock ownership plans
Others 44118013.95 46412725.05
Total 529651533.30 516522493.00
2) Significant other payables aged over one year or overdue
Expressed in Renminbi Yuan
Item Closing balance Reasons for not repaying or carrying forward
Shenzhen Xingda Real Estate Relocation compensation deposits for the Urban Renewal
249951339.91
Development Co. Ltd. Project of Winner Industrial Park (Note XVIII.7)
Total 249951339.91
Other descriptions:
228Section VIII Financial Report 38. Contract liabilities
Expressed in Renminbi Yuan
Item Closing balance Opening balance
Consideration received from customersNote 157237221.09 170470757.56
Membership points 12677270.34 12284747.04
Total 169914491.43 182755504.60
Note: Contract liabilities are mainly receipts in advance from customers before the Group fulfils its performance obligations.Revenue related to these contracts is recognised when the Group fulfils the corresponding performance obligations.Generally for receipts in advance on goods the Group typically fulfils its performance obligations and recognises revenue
within approximately 30 days after receiving customer prepayments. For gift card balances performance obligations are
generally fulfilled and revenue is recognised within one year. For membership reward points which have a validity period of
one year the Group fulfils its performance obligations and recognises revenue within this one-year period
Significant contract liabilities aged over one year
Expressed in Renminbi Yuan
Item Closing balance Reasons for not repaying or carrying forward
Amount and reasons for significant changes in book value during the reporting period
Expressed in Renminbi Yuan
Item Change amount Reason for change
39. Employee benefits payable
(1) Presentation of employee benefits payable
Expressed in Renminbi Yuan
Item Opening balance Increase Decrease Closing balance
I. Short-term employee benefits 296771630.90 1834917280.84 1812569427.62 319119484.12
II. Post-employment benefits -
7319702.87157292078.74157299583.697312197.92
defined contribution plan
III. Termination benefits 4863743.12 22405641.02 21124274.72 6145109.42
Total 308955076.89 2014615000.60 1990993286.03 332576791.46
229(2) Presentation of short-term employee benefits
Expressed in Renminbi Yuan
Item Opening balance Increase Decrease Closing balance
1. Wages or salaries bonuses
293225971.681698527108.831676498038.79315255041.72
allowances and subsidies
2. Staff welfare 1894913.55 15536187.71 15474366.62 1956734.64
3. Social security contributions 429126.80 74055207.60 74052772.59 431561.81
Including: Medical insurance 253035.89 63596666.35 63594331.94 255370.30
Work injury insurance 123469.83 6240469.24 6240331.35 123607.72
Maternity insurance 52621.08 4218072.01 4218109.30 52583.79
4. Housing funds 114198.00 42098706.81 42190949.81 21955.00
5. Union running costs and
691638.922582449.142485643.02788445.04
employee education costs
Other short-term benefits 415781.95 2117620.75 1867656.79 665745.91
Total 296771630.90 1834917280.84 1812569427.62 319119484.12
(3) Presentation of defined contribution plans
Expressed in Renminbi Yuan
Item Opening balance Increase Decrease Closing balance
1. Basic pension insurance 7213732.45 150867694.73 150875366.66 7206060.52
2. Unemployment insurance 105970.42 6424384.01 6424217.03 106137.40
Total 7319702.87 157292078.74 157299583.69 7312197.92
Other descriptions:
40. Taxes and surcharges payable
Expressed in Renminbi Yuan
Item Closing balance Opening balance
VAT 12324094.87 17598731.48
Corporate income tax 98510386.40 82323661.99
Individual income tax 4856974.77 8002053.24
Urban maintenance and construction tax 1704477.26 2729715.85
Property tax 7400348.77 7165168.93
Education surcharges and local education surcharges 1404573.18 2088623.81
Land use tax 2164977.79 1839746.31
Stamp duty 1321989.49 1802649.39
Others 871713.49 80223.88
Total 130559536.02 123630574.88
Other descriptions:
230Section VIII Financial Report 41. Liabilities classified as held for sale
Expressed in Renminbi Yuan
Item Closing balance Opening balance
Other descriptions:
42. Current portion of non-current liabilities
Expressed in Renminbi Yuan
Item Closing balance Opening balance
Current portion of long-term borrowings 175108600.02
Current portion of long-term payables 6017646.86
Current portion of lease liabilities 184899235.07 215052996.79
Current portion of long-term employee benefits payable 647000.00 589000.00
Total 185546235.07 396768243.67
Other descriptions:
43. Other current liabilities
Expressed in Renminbi Yuan
Item Closing balance Opening balance
Refunds payable 1965794.96 1983029.26
Output tax to be transferred 20112610.98 19252019.32
Total 22078405.94 21235048.58
Increase or decrease in short-term bonds payable:
Expressed in Renminbi Yuan
Issuance Amortization Repayment
Coupon Date of Bond Amount Opening Interest Closing Default
Bond name Value in current of profit and in current
rate issue term issued balance at par balance or not
period discount period
Total
Other descriptions:
23144. Long-term borrowings
(1) Classification of long-term borrowings
Expressed in Renminbi Yuan
Item Closing balance Opening balance
Unsecured borrowings 50000000.00 53000000.00
Total 50000000.00 53000000.00
Description of classification of long-term borrowings:
In November 2024 Winner Medical (Hunan) entered into a loan agreement with China Construction Bank Corporation
Lixian Branch for RMB65000000.00 of which RMB50000000.00 has been withdrawn. The loan has a term of 60 months
and an interest rate of 2.66% and matures in November 2032.Other descriptions including interest rate ranges:
45. Bonds payable
(1) Bonds payable
Expressed in Renminbi Yuan
Item Closing balance Opening balance
(2) Increase or decrease in bonds payable (excluding preference shares perpetual bonds and other financial instruments
classified as financial liabilities)
Expressed in Renminbi Yuan
Issuance Amortization Repayment
Coupon Date of Bond Amount Opening Interest Closing Default
Bond name Value in current of profit and in current
rate issue term issued balance at par balance or not
period discount period
Total —— ——
(3) Description of convertible corporate bonds
(4) Description of other financial instruments classified as financial liabilities
Basic information of preference shares perpetual bonds and other financial instruments issued at the end of the period
Changes in preference shares perpetual bonds and other financial instruments issued at the end of the period
Expressed in Renminbi Yuan
Opening balance Increase Decrease Closing balance
Financial instrument
outstanding Carrying Carrying Carrying Carrying Amount Amount Amount Amount
amounts amounts amounts amounts
Description of the basis for classification of other financial instruments as financial liabilities
Other descriptions:
232Section VIII Financial Report 46. Lease liabilities
Expressed in Renminbi Yuan
Item Closing balance Opening balance
Lease liabilities 601774309.04 655929649.12
Lease liabilities due within one year -184899235.07 -215052996.79
Total 416875073.97 440876652.33
Other descriptions:
47. Long-term payables
Item Closing balance Opening balance
Long-term payables 26994520.77 48544431.64
Total 26994520.77 48544431.64
(1) Long-term payables by nature
Expressed in Renminbi Yuan
Item Closing balance Opening balance
Borrowings from third parties (Note 1) 27669539.31
Borrowings from related parties outside
26994520.7726892539.19
the scope of group consolidation (Note 2)
Current portion of long-term payables -6017646.86
Total 26994520.77 48544431.64
Other descriptions:
Note 1: As of the Company has no third-party borrowings under long-term payables.Note 2: It represents an interest-free loan from the controlling shareholder - Winner Group Limited to Pan-China (H.K.)
with a principal amount of CAD6000000.00 (equivalent to RMB30685200.00). The loan term extends from 1 September
2024 to 31 August 2029. After accounting for discounting effects the recognised loan amount is RMB26 994520.77. The
difference has been recorded as an equity transaction in other capital reserves. Further details are included in Note VII.54.
(2) Special payables
Expressed in Renminbi Yuan
Item Opening balance Increase Decrease Closing balance Reason
Other descriptions:
23348. Long-term employee benefits payable
(1) Table of long-term employee benefits payable
Expressed in Renminbi Yuan
Item Closing balance Opening balance
I. Post-employment benefits - Net defined benefit liability 8676000.00 9623000.00
Current portion of long-term employee benefits payable -647000.00 -589000.00
Deferred compensation (Note)Note 1 5242993.56 4213971.34
Total 13271993.56 13247971.34
Note:
Note 1: Deferred compensation represents GRI’s practice of deferring a specified percentage of certain employees’
compensation for payment upon their retirement.
(2) Changes in defined benefit obligations
Changes in the present value of defined benefit obligations are as follows:
Expressed in Renminbi Yuan
Amount for Amount for
Item
the current period the last period
I. Opening balance 9623000.00 9138000.00
II. Defined benefit costs included in profit or loss -149000.00 243000.00
1. Past service cost -312000.00
2. Net interest 163000.00 243000.00
III. Defined benefit costs included in other comprehensive income -154000.00 849000.00
1. Actuarial gain (Loss expressed with “-”) -154000.00 849000.00
IV. Other changes -644000.00 -607000.00
1. Benefits paid -644000.00 -607000.00
V. Closing balance 8676000.00 9623000.00
Plan assets:
Expressed in Renminbi Yuan
Item Amount for the current period Amount for the last period
Net defined benefit liability/(asset)
Expressed in Renminbi Yuan
Item Amount for the current period Amount for the last period
234Section VIII Financial Report Description of the content of defined benefit plan and its related risks impact on the Company’s future cash flow time and
uncertainty:
Per Accounting Standards for Business Enterprises No. 9 - Employee Compensation and the Company’s accounting policies
welfare payments made over the years to retired employees survivors and those remaining from previous Company
restructuring must undergo actuarial calculation for inclusion as long-term employee remuneration payable. Welfare expenses
for retired employees and survivors undergo actuarial assessment as post-employment benefit plans while defined benefit
plans cover continuing salary and benefit expenses for retired employees subject to actuarial evaluation as termination
benefit plans.Actuarial evaluation of a Company’s employee benefit plans entails certain risks including:
Interest rate risk: The discount rate utilised to calculate the present value of the plan’s benefit obligations is derived from the
yield on Chinese government bonds. Falling Treasury yields result in actuarial losses.Welfare level growth risk: The selection of welfare growth rate assumptions for calculating the present value of plan welfare
obligations relies on historical growth levels of various benefits and the long-term growth rate expectations set by the
Company’s management. An actuarial loss will arise if the actual welfare growth rate exceeds the actuarial assumption.Description of significant actuarial assumptions and sensitivity analysis results of defined benefit plan:
The principal actuarial assumptions used as at the balance sheet date are as follows:
Item 2024
Annual discount rates for post-retirement
2%1.75%
benefit plans for different personnel categories
China’s life insurance industry experience life table (2010-2013) for elderly
Mortality
care business segmented into Men’s and Women’s tables
Note: The discount rate is established using the government bond yield as the benchmark. During evaluation the cash flow
anticipated from the welfare plan in the future year is initially estimated. Subsequently the modified duration of the welfare
liability at the evaluation time is calculated based on this cash flow. Finally the applicable discount rate is determined by
referencing the Treasury bond yield corresponding to that period.The quantitative sensitivity analysis for significant assumptions used is as follows:
Increase/(decrease) in Increase/(decrease) in
Item Increase % Decrease %
defined benefit obligations defined benefit obligations
Discount rate 2.25% -217 1.75% 227
Other descriptions:
49. Provisions
Expressed in Renminbi Yuan
Item Closing balance Opening balance Reason
Total 0.00
Other descriptions including relevant important assumptions and estimation descriptions of important provisions:
23550. Deferred income
Expressed in Renminbi Yuan
Item Opening balance Increase Decrease Closing balance Reason
Government grants
Government grants 157154401.72 66679977.51 12671996.10 211162383.13
related to assets
Total 157154401.72 66679977.51 12671996.10 211162383.13
Other descriptions:
Further details are included in XI.2. Liability items relating to government grants.
51. Other non-current liabilities
Expressed in Renminbi Yuan
Item Closing balance Opening balance
GRI remaining equity forward purchase obligations (Note) 387682358.99 373262348.97
Total 387682358.99 373262348.97
Other descriptions:
Note: In September 2024 the Group acquired 75.2% equity interest in GRI. Pursuant to the share purchase agreement the
Group assumed a forward purchase obligation to acquire the remaining 24.8% minority interests. This obligation represents
a non-discretionary repurchase liability that cannot be unconditionally avoided. Accordingly the Group initially recognised
this repurchase obligation as a financial liability at the present value of the required settlement amount with subsequent
measurement at fair value in accordance with applicable accounting standards.
52. Share capital
Expressed in Renminbi Yuan
Increase or decrease (+ -)
Opening balance Conversion of New Stock Closing balance
provident fund Others Subtotal
issue dividends
into shares
Total number of shares 582329808.00 582329808.00
Other descriptions:
53. Other equity instruments
(1) Basic information of preference shares perpetual bonds and other financial instruments issued at the end of the period
(2) Changes in preference shares perpetual bonds and other financial instruments issued at the end of the period
236Section VIII Financial Report Expressed in Renminbi Yuan
Opening balance Increase Decrease Closing balance
Financial instrument
outstanding Carrying Carrying Carrying Carrying Amount Amount Amount Amount
amounts amounts amounts amounts
Changes in other equity instruments in the current period explanation of the reasons for the changes and the basis for
relevant accounting treatment:
Other descriptions:
54. Capital reserves
Expressed in Renminbi Yuan
Item Opening balance Increase Decrease Closing balance
Capital premium (share premium) 3247712887.01 3076026.50 14420010.02 3236368903.49
Other capital reserves 130827227.99 26442529.79 3901107.68 153368650.10
Total 3378540115.00 29518556.29 18321117.70 3389737553.59
Other descriptions including the changes in the current period and the reasons for the changes:
Note 1: The increase in capital premium during the current year was primarily attributable to the recognition of
RMB3076026.50 capital premium resulting from the vesting and unlocking of the second-phase employee stock ownership
plan. The decrease in capital premium was mainly due to the effect of the following aspect: In September 2024 the Company
acquired 75.2% equity interest in GRI. Pursuant to the share purchase agreement the Company assumed a forward purchase
obligation for the remaining minority interests. This obligation represents a non-discretionary repurchase liability that cannot
be unconditionally avoided in the consolidated financial statements. Accordingly the Company recognised this repurchase
obligation as a financial liability at the present value of the required settlement amount and included it in capital premium.The change in this financial liability during the current year resulted in a decrease of RMB14420010.02 in capital reserve.Note 2: The increase in other capital reserves during the current year was primarily due to the recognition of aggregate
incentive expenses of RMB26442529.79 related to the implementation of the 2024 and employee stock ownership
plans. The decrease in other capital reserves was mainly attributable to the reduction of RMB3076026.50 resulting from
the vesting and unlocking of the second-phase employee stock ownership plan shares and the discounting effect on the
5-year interest-free loan from the controlling shareholder - Winner Group Limited which decreased other capital reserves by
RMB841768.90.
55. Treasury shares
Expressed in Renminbi Yuan
Item Opening balance Increase Decrease Closing balance
Treasury shares 7282100.00 3094562.90 4187537.10
Total 7282100.00 3094562.90 4187537.10
237Other descriptions including the changes in the current period and the reasons for the changes:
The decrease in treasury shares was mainly due to the combined effect of the following aspects: 1) On 13 October the Fifth Meeting of the Management Committee for the Company’s first-phase employee stock ownership plan and the
fifth meeting of the Remuneration and Assessment Committee of the Fourth Board of Directors reviewed and approvedthe “Proposal on Fulfilment of Unlocking Conditions for the Second Lock-Up Period of the First-Phase Employee StockOwnership Plan”. The unlocking conditions had been met for 143071 shares resulting in a reduction of treasury shares by
RMB2847112.90. 2) Pursuant to the resolution adopted at the 2024 annual shareholders’ meeting held by the Group on 21
May with a total share capital of 582329808 shares as the base cash dividends of RMB2.50 per 10 shares (inclusive
of tax) were distributed to all shareholders totaling RMB145582452.00 (tax inclusive). Dividends on restricted stock
resulted in a reduction of treasury shares by RMB88375.00. 3) At the Seventh Meeting of the Fourth Board of Directorsand the Seventh Meeting of the Fourth Supervisory Board held on 20 August the “Proposal on the Interim ProfitDistribution Plan for the First Half of ” was reviewed and approved. With a total share capital of 582329808 shares
as the base cash dividends of RMB4.50 per 10 shares (tax inclusive) were distributed to all shareholders. Dividends on
restricted stock resulted in a reduction of treasury shares by RMB159075.00.
56. Other comprehensive income
Expressed in Renminbi Yuan
Amount for the current period
Amount incurred Less: Reclassification Less: Reclassification Attributable Attributable to
Opening Less:
Item before income from other from other to parent non-controlling Closing balance
balance Income tax
tax in the current comprehensive income comprehensive income company after interests after
expenses
period to profit or loss to retained earnings tax tax
I. Other comprehensive income that
-378274.91154125.48141398.7112726.77-236876.20
will not be reclassified to profit or loss
Including: Remeasurement of a
-378274.91154125.48141398.7112726.77-236876.20
defined benefit plan
II. Other comprehensive income that
-2259552.19-1735752.20-9338610.607602858.40-11598162.79
may be reclassified to profit or loss
Exchange differences on translation of
-2259552.19-1735752.20-9338610.607602858.40-11598162.79
foreign currency financial statements
Total other comprehensive income -2637827.10 -1581626.72 -9197211.89 7615585.17 -11835038.99
Other descriptions including the adjustment to the amount initially recognised when the effective portion of the profit or loss
on the cash flow hedge is transferred to the hedged item:
57. Specialised reserves
Expressed in Renminbi Yuan
Item Opening balance Increase Decrease Closing balance
Other descriptions including the changes in the current period and the reasons for the changes:
238Section VIII Financial Report 58. Surplus reserves
Expressed in Renminbi Yuan
Item Opening balance Increase Decrease Closing balance
Statutory surplus reserves 420212778.13 420212778.13
Total 420212778.13 420212778.13
Description of surplus reserves including changes in the current period and reasons for changes:
59. Unappropriated profit
Expressed in Renminbi Yuan
Item Current period Last period
Unappropriated profit at the end of the previous period before adjustment 6780116870.53 6608834768.99
Unappropriated profit at the end of the previous period after adjustment 6780116870.53 6608834768.99
Add: Net profit attributable to owners of the parent company in the
767967461.87695378928.72
current period
Dividends payable on common stock 407630865.58 524096827.18
Undistributed profits at the end of the period 7140453466.82 6780116870.53
Details of undistributed profits at the beginning of the adjustment period:
1) Due to retrospective adjustment of Accounting Standards for Business Enterprises and related new regulations the
undistributed profit at the beginning of the period is RMB0.00.
2) Due to the change of accounting policy the undistributed profit at the beginning of the period is RMB0.00.
3) Due to the correction of major accounting errors the undistributed profit at the beginning of the period is affected by
RMB0.00.
4) Changes in the scope of consolidation due to the same control affect the opening undistributed profit of RMB0.00.
5) The total impact of other adjustments on the opening undistributed profit is RMB0.00.
Detailed explanation on the use of capital reserve to offset losses:
60. Revenue and cost of sales
Expressed in Renminbi Yuan
Amount for the current period Amount for the last period
Item
Revenue Cost Revenue Cost
Primary business 10863279634.96 5671374128.16 8896470309.08 4681905777.13
Other businesses 86210332.05 62088901.37 81383322.65 47656341.10
Total 10949489967.01 5733463029.53 8977853631.73 4729562118.23
239The lower of the Company’s total audited profit net profit and net profit after deducting non-recurring profit or loss during
the reporting period is negative
□Yes √ No
Breakdown of revenue and cost of sales:
Expressed in Renminbi Yuan
Segment 1 Segment 2 Medical supplies Consumer goods Total
Contract classification
Revenue Cost Revenue Cost Revenue Cost Revenue Cost Revenue Cost
Business type 5200668053.16 3279239784.61 5748821913.85 2454223244.92 10949489967.01 5733463029.53
Including:
Primary business 5114457721.11 3217150883.24 5748821913.85 2454223244.92 10863279634.96 5671374128.16
Other businesses 86210332.05 62088901.37 86210332.05 62088901.37
Classification by region of operation
Including:
Market or customer type
Including:
Contract type
Including:
Classification by time of goods transfer
Including:
Classification by contract term
Including:
Classification by sales channel
Including:
Total
240Section VIII Financial Report Information relating to performance obligations:
Time of Types of quality
Nature of the goods Whether Returns refunds
fulfilling assurance provided
Item Significant payment terms that the entity has it is a and other similar
performance by the Company and
promised to transfer principal obligations
obligations related obligations
General domestic and overseas sales: The contract price Certain sales
is typically paid within the credit period after the goods contracts grant
have been inspected and accepted and the invoice has customers rights
been received; E-commerce business (B2C): Goods of return and sales Assurance-type
Sales of goods Goods Yes
will be shipped after the payment is made; E-commerce discounts which warranty
business (B2B): Payment shall be made within 30 to 60 are estimated
days after delivery; Store sales model: Payment shall be as variable
made at the time of checkout upon the delivery of goods. consideration
Other descriptions
Expressed in Renminbi Yuan
Item 2024
Revenue recognized in the current period that was included in the opening
169648680.74193262892.15
carrying amount of contract liabilities
The expected timing for recognizing revenue from performance obligations under contracts that have been signed but not yet
fulfilled or are not yet fully fulfilled is within one year.Information relating to the transaction price allocated to the remaining performance obligations:
The revenue amount corresponding to performance obligations under contracts signed but not yet fulfilled or not yet fully
fulfilled as of the end of this reporting period is RMB0.00. Among them RMB0.00 is expected to be recognized as revenue
in the year [] RMB[amount] is expected to be recognized as revenue in the year [] and RMB[amount] is expected to be
recognized as revenue in the year [].Information about variable consideration in the contract:
Significant contract changes or significant transaction price adjustments
Expressed in Renminbi Yuan
Item Accounting treatment Amount affected on revenue
Other descriptions:
24161. Taxes and surcharges
Expressed in Renminbi Yuan
Item Amount for the current period Amount for the last period
Urban maintenance and construction tax 32207755.95 26181066.83
Education surcharge 14682820.43 18239245.28
Property tax 21951648.66 7890858.73
Land use tax 6252278.59 7300430.54
Stamp duty 7067495.20 8080711.05
Education surcharge 9799037.22 11851888.21
Others 1737743.52 361065.01
Total 93698779.57 79905265.65
Other descriptions:
62. Administrative expenses
Expressed in Renminbi Yuan
Item Amount for the current period Amount for the last period
Employee benefits 508475692.97 373522613.27
Depreciation and amortisation expenses 172675394.57 151453865.79
Consulting and intermediary service fees 38235467.40 41012665.48
Maintenance and repair expenses 9634668.03 6397005.22
Depreciation of right-of-use assets 25875307.13 22681433.77
Information system expenses 32560195.37 20895255.38
Utility bills 13493549.57 11346170.45
Travel expenses 6883100.66 5744429.95
Office expenses 18830173.78 4588705.23
Others 28783852.21 36095022.29
Total 855447401.69 673737166.83
Other descriptions:
242Section VIII Financial Report 63. Selling expenses
Expressed in Renminbi Yuan
Item Amount for the current period Amount for the last period
Advertising and promotion expenses 1092915264.91 816381913.54
Employee benefits 702248914.06 645869958.89
Sales commissions and charges by
322742572.30288464170.25
E-commerce platform
Depreciation of right-of-use assets 184671173.65 193347920.14
Lease and property management fees 141740595.40 139382565.32
Depreciation and amortisation 54992498.11 60007324.01
Travel expenses 35991126.08 27862714.05
Office communication expenses 21365227.08 19943206.56
Utility bills 13054619.71 13337799.99
Service charges 18749889.00 16252474.59
Insurance premium 15676508.42 5368181.67
Others 29520454.19 37929095.63
Total 2633668842.91 2264147324.64
Other descriptions:
64. Research and development expenses
Expressed in Renminbi Yuan
Item Amount for the current period Amount for the last period
Employee benefits 197655486.19 157935342.59
Materials 129057126.96 119747741.17
Depreciation and amortisation 22676284.70 20781848.78
Other miscellaneous expenses 61488668.39 49698993.47
Total 410877566.24 348163926.01
Other descriptions:
24365. Finance expenses
Expressed in Renminbi Yuan
Item Amount for the current period Amount for the last period
Interest expenses 55114093.69 54863504.13
Including: Interest expense on lease liabilities 23893981.30 24076578.06
Less: Interest income 82400032.94 117095211.38
Exchange gains or losses 28609506.04 -40189278.02
Bank handling charges and others 5329147.43 3209724.85
Total 6652714.22 -99211260.42
Other descriptions:
66. Other income
Expressed in Renminbi Yuan
Sources of other income Amount for the current period Amount for the last period
Government grants 61051666.79 57514145.42
Tax credits and exemptions 23192729.85 34123791.45
Total 84244396.64 91637936.87
67. Net position hedging gains
Expressed in Renminbi Yuan
Item Amount for the current period Amount for the last period
Other descriptions:
68. Fair value gains
Expressed in Renminbi Yuan
Source of fair value gains Amount for the current period Amount for the last period
Fund investments -3069237.01 6673047.39
Convertible corporate bond investments -4174505.48 -860828.53
Bank WMPs and trust plans -17095783.33 -2949999.83
Total -24339525.82 2862219.03
Other descriptions:
244Section VIII Financial Report 69. Investment income
Expressed in Renminbi Yuan
Item Amount for the current period Amount for the last period
Long-term equity investment income under
-27220472.60-11305734.64
the equity method
Income from debt restructuring 1788767.41
Investment income from financial assets
79904599.5884873523.22
held for trading
Others 407448.80 31274.94
Total 53091575.78 75387830.93
Other descriptions:
70. Credit impairment losses
Expressed in Renminbi Yuan
Item Amount for the current period Amount for the last period
Impairment loss for accounts receivable -9614105.00 -1569289.32
Impairment loss for other receivables -666248.03 5025812.94
Impairment loss for long-term receivables 7264.24 -3011897.37
Total -10273088.79 444626.25
Other descriptions:
71. Impairment losses of assets
Expressed in Renminbi Yuan
Item Amount for the current period Amount for the last period
I. Loss for write-down of inventories and
-66060695.91-143660886.66
impairment loss for costs to fulfil a contract
IV. Impairment loss for fixed assets -9605779.91 -8325577.39
X. Impairment loss for goodwill -179042411.72 -90742076.94
XII. Others 3435449.83 -167220.35
Total -251273437.71 -242895761.34
Other descriptions:
Other items are impairment losses on prepayments.
24572. Gains on disposal of non-current assets
Expressed in Renminbi Yuan
Source of gains on disposal of non-current assets Amount for the current period Amount for the last period
Gains on disposal of non-current assets 2701490.07 6293210.08
Including: Gains on disposal of fixed assets 446659.69 6291053.00
Gains on disposal of right-of-use assets 2254830.38 2157.08
Losses on disposal of non-current assets -2154943.51 -416052.53
Including: Losses on disposal of fixed assets -2149255.96 -416052.53
Losses on disposal of right-of-use assets -5687.55
Total 546546.56 5877157.55
73. Non-operating income
Expressed in Renminbi Yuan
Amount for the Amount for the last Included in the non-recurring profit
Item
current period period or loss in the current period
Government grants 274069.34 9140.00 274069.34
Gains on retirement of non-current assets 1466668.43 4085167.22 1466668.43
Income from compensation or fines 879802.15 760830.54 879802.15
Others 5585890.24 7070984.86 5585890.24
Total 8206430.16 11926122.62 8206430.16
Other descriptions:
74. Non-operating expenses
Expressed in Renminbi Yuan
Amount for the Amount for the last Included in the non-recurring profit
Item
current period period or loss in the current period
External donations 2763001.92 91893.13 2763001.92
Losses on damage and retirement of non-
14572679.3512045702.8714572679.35
current assets
Overdue fines 5323586.47 1477207.31 5323586.47
Liquidated damages 178626.16 436250.00 178626.16
Others 5225785.59 4389856.72 5225785.59
Total 28063679.49 18440910.03 28063679.49
Other descriptions:
246Section VIII Financial Report 75. Income tax expenses
(1) Table of income tax expenses
Expressed in Renminbi Yuan
Item Amount for the current period Amount for the last period
Current tax 262431689.45 155323370.69
Deferred tax -28728567.04 12319004.58
Total 233703122.41 167642375.27
(2) Accounting profit and income tax expense adjustment process
Expressed in Renminbi Yuan
Item Amount for the current period
Profit before income tax 1047820850.18
Tax at the statutory/applicable tax rate 157173127.53
Effect of different tax rates for subsidiaries 18743443.74
Effect of adjustments in respect of tax of previous periods 13845689.57
Effect of Income not subject to tax 4495782.15
Effect of costs expenses and losses not deductible for tax 55618300.00
Effect of tax losses for which deferred tax assets were not recognised in prior periods -1696487.29
Effect of deductible temporary differences or tax losses for which deferred tax assets
22546586.04
were not recognised in the current period
Effect of additional deductions for research and development expenses -37023319.33
Income tax expenses 233703122.41
Other descriptions:
76. Other comprehensive income
Refer to Note 57. Other comprehensive income for details.
77. Items of the statement of cash flows
(1) Cash payments relating to operating activities
Other cash receipts relating to operating activities
247Expressed in Renminbi Yuan
Amount for the current Amount for the last
Item
period period
Guarantee deposit deposit and quality guarantee deposit received 6293738.17 14621877.86
Interest income received 28826664.62 45989314.70
Government grants received 138526447.39 93028322.17
Others 9950334.94 44472682.78
Total 183597185.12 198112197.51
Descriptions of other cash receipts relating to operating activities:
Other cash payments relating to operating activities
Expressed in Renminbi Yuan
Amount for the current Amount for the
Item
period last period
Management and R&D costs paid in cash 172750182.55 156489682.70
Selling expenses paid in cash 296009475.60 407210573.11
Deposit guarantee deposit and quality guarantee deposit paid 17038867.02 297880.24
Bank handling charge 5321282.98 3209724.85
Others 10574681.80 15835104.13
Total 501694489.95 583042965.03
Description of other cash payments relating to operating activities:
(2) Cash relating to investing activities
Other cash receipts relating to investing activities
Expressed in Renminbi Yuan
Item Amount for the current period Amount for the last period
Cash receipts relating to significant investing activities
Expressed in Renminbi Yuan
Item Amount for the current period Amount for the last period
248Section VIII Financial Report Description of other cash received relating to investing activities:
Other cash payments relating to investing activities
Expressed in Renminbi Yuan
Item Amount for the current period Amount for the last period
Significant cash payments relating to investing activities
Expressed in Renminbi Yuan
Item Amount for the current period Amount for the last period
Description of other cash payments relating to investing activities:
(3) Cash related to financing activities
Other cash receipts relating to financing activities
Expressed in Renminbi Yuan
Item Amount for the current period Amount for the last period
Guarantee deposit recovered 44201640.58 191632003.95
Loan from shareholders 32094498.00
Total 44201640.58 223726501.95
Description of other cash received relating to financing activities:
Other cash payments relating to financing activities
Expressed in Renminbi Yuan
Item Amount for the current period Amount for the last period
Principal and interest paid on lease liabilities 271337122.00 261127378.72
Treasury shares repurchase paid 194981835.21
Guarantee deposit paid on bills and letters of
6587796.2944202960.58
credit (for financing purposes)
Total 277924918.29 500312174.51
Description of other cash payments relating to financing activities:
249Changes in various liabilities arising from financing activities
√ Applicable □Not applicable
Expressed in Renminbi Yuan
Increase Decrease
Item Opening balance Cash Non-cash Closing balance
Non-cash changes Cash changes
changes changes
Short-term borrowings 1969044164.65 1913380.51 134327965.92 0.00 1836629579.24
Dividends payable 164868250.80 411350668.20 576218919.00 0.00 0.00
Long-term payables 48544431.64 6119628.45 27669539.32 0.00 26994520.77
Current portion of non-
396768243.67185546235.07396768243.670.00185546235.07
current liabilities
Long-term borrowings 53000000.00 0.00 3000000.00 50000000.00
Lease liabilities 440876652.33 32282546.85 56284125.21 0.00 416875073.97
Total 3073101743.09 0.00 637212459.08 1194268793.12 0.00 2516045409.05
(4) Description of cash flows presented on a net basis
Item Relevant facts Basis for presentation on a net basis Financial impact
(5) Significant activities and financial effects that do not involve current cash receipts and payments but affect the financial
position of the enterprise or may affect the cash flow of the enterprise in the future
78. Supplemental information for the statement of cash flows
(1) Supplemental information for the statement of cash flows
Expressed in Renminbi Yuan
Supplemental information Current period amount Last period amount
1. Reconciliation of profit to net cash flows from operating activities
Net profit 814117727.77 740705937.40
Add: Provisions for asset impairment 261546526.50 242451135.09
Depreciation of fixed assets depletion of oil and gas assets depreciation of
337911079.51285005497.76
productive biological assets
Depreciation of right-of-use assets 231742958.90 221882741.03
Amortisation of intangible assets 93586462.24 71318426.36
Amortisation of long-term prepaid expenses 32547267.78 57386838.25
Losses on disposal of fixed assets intangible assets and other long-term assets
-546546.56-5877157.55
(Gains are indicated by “-”)
Losses on retirement of fixed assets (Gains are indicated by “-”) 13106010.92 7960535.65
Losses from changes in fair value (Gains are indicated by “-”) 24339525.82 -2862219.03
Losses from changes in fair value (Gains are indicated by “-”) -2886854.89 -12380830.37
250Section VIII Financial Report Supplemental information Current period amount Last period amount
Investment losses (Gains are indicated by “-”) -53091575.78 -75387830.93
Decrease in deferred income tax assets (Increase is indicated by “-”) -7108943.60 36350860.38
Increase in deferred income tax liabilities (Decrease is indicated by “-”) -21619623.44 -32532070.71
Decrease in inventories (increase is indicated by “-”) -137294427.44 -238086698.24
Decrease in operating receivables (increase is indicated by “-”) 178143738.84 -7992919.07
Increase in operating payables (Decrease is indicated by “-”) -125258961.43 -36982614.19
Others 26442529.79 14795634.87
Net cash flows from operating activities 1665676894.93 1265755266.70
2. Significant investing and financing activities not involving cash receipts and payments
Debts converted to capital
Convertible corporate bonds due within one year
Fixed assets under finance leases
3. Net change in cash and cash equivalents:
Closing balance of cash 1560722108.58 1357097385.35
Less: Opening balance of cash 1357097385.35 4677340782.45
Add: Closing balance of cash equivalents
Less: Opening balance of cash equivalents
Net increase in cash and cash equivalents 203624723.23 -3320243397.10
(2) Net cash paid for acquisition of subsidiaries in the current period
Expressed in Renminbi Yuan
Amount
Including:
Including:
Including:
Other descriptions:
(3) Net cash received from disposal of subsidiaries in the current period
Expressed in Renminbi Yuan
Amount
Including:
Including:
Including:
Other descriptions:
251(4) Composition of cash and cash equivalents
Expressed in Renminbi Yuan
Item Closing balance Opening balance
I. Cash 1560722108.58 1357097385.35
Including: Cash on hand 98223.24 152838.15
Bank deposits on demand 1541265623.54 1348440889.85
Other currency funds on demand 19358261.80 8503657.35
II. Closing balance of cash and cash equivalents 1560722108.58 1357097385.35
(5) Limited scope of use but still classified as cash and cash equivalents
Expressed in Renminbi Yuan
Reason for remaining cash and cash
Item Current period amount Last period amount
equivalents
(6) Currency funds that do not belong to cash and cash equivalents
Expressed in Renminbi Yuan
Reasons for not being classified as
Item Current period amount Last period amount
cash and cash equivalents
Other descriptions:
(7) Description of other significant activities
79. Notes to items in the statement of changes in equity
Description of “Other” items and adjustment amount that adjust the ending balance of the previous year:
80. Monetary items measured in a foreign currency
(1) Monetary items measured in a foreign currency
Expressed in Renminbi Yuan
Item Closing foreign currency balance Translation exchange rate Closing balance in RMB
Currency funds 924627612.93
Including: USD 126457385.62 7.0288 888843672.05
Euro 1991221.81 8.2355 16398707.22
HKD 16721097.48 0.90322 15102829.67
JPY 29330708.00 0.0448 1313927.73
GBP 304346.89 9.4346 2871391.17
DOP 877010.72 0.1107 97085.09
252Section VIII Financial Report Item Closing foreign currency balance Translation exchange rate Closing balance in RMB
Accounts receivable 302684812.74
Including: USD 41797866.74 7.0288 293788845.74
Euro 656948.44 8.2355 5410298.88
HKD
GBP 88229.23 9.4346 832407.49
MYR 1531967.59 1.73193 2653260.63
Long-term borrowings
Including: USD
Euro
HKD
Other receivables 5522860.13
USD 785747.23 7.0288 5522860.13
Accounts payable 11587416.98
USD 1583831.97 7.0288 11132438.15
Euro 15573.13 8.2355 128252.55
GBP 3618.58 9.4346 34139.87
MXN 750452.48 0.38988 292586.41
Other payables 3560677.55
USD 506583.99 7.0288 3560677.55
Other descriptions:
(2) Description of overseas operating entities including for important overseas operating entities disclosure of their main
overseas business locations functional currency and selection basis and disclosure of reasons for changes in functional
currency.□Applicable √ Not applicable
81. Leases
(1) The Company as lessee
√ Applicable □Not applicable
253Variable lease payments not included in the measurement of the lease liabilities
√ Applicable □Not applicable
Item 2024
Interest expense on lease liabilities 23893981.30 24076578.06
Expenses relating to short-term leases that are included in costs of related
29373096.8235562765.73
assets or profit or loss and accounted for applying practical expedients
Variable lease payments that are included in costs of related assets or
15219952.7017811753.36
profit or loss and not included in the measurement of lease liabilities
Cash outflow from fixed lease payments 271337122.00 261127378.72
Total cash outflow for leases 315930171.52 314501897.81
The Group has lease contracts for various items of houses and buildings machinery and vehicles used in its operations.Leases of houses and buildings and machinery generally have lease terms of 1-20 years while those of vehicles generally
have lease terms of 6 years.Potential future cash outflows not included in the measurement of lease liabilities
The potential future cash outflows that the Group does not include in the measurement of lease liabilities mainly arise from
variable lease payments and risk exposures such as leases that have been promised but not yet commenced.Variable lease payments
A portion of the Group’s real estate lease contracts incorporate provisions for variable lease payments that are indexed to the
sales revenue of the leased stores. The objective of utilizing such provisions to the extent feasible is to align lease payments
with stores that generate significant cash inflows.Other information relating to leases
For the right-of-use assets please refer to Note VII.25; for the lease liabilities please refer to Note VII.46 and Note XII.1.Lease payments on short-term leases and leases of low-value assets applying practical expedients
√ Applicable □Not applicable
Please refer to the table above for details
Leases involving sale and leaseback transactions
(2) The Company as lessor
Operating leases - the Company as lessor
√ Applicable □Not applicable
254Section VIII Financial Report Currency: Renminbi Yuan
Including: Income relating to variable lease
Item Rental income
payments not included in the lease receivables
Rental income Note 1 455045.87 0.00
Total 455045.87 0.00
Note:
Note 1: The Group has entered into operating leases on the fourth floor of Building No. 8 located in Deqing County Zhejiang
Province and the lease term is from May 2026 to April 2027. Additionally the Company has entered into operating leases on
the No. 8 factory building (with a total of six rooms) in Lixian County Hunan Province and the lease term for this property
is from January 2021 to December .Finance leases - the Company as lessor
√ Applicable □Not applicable
Currency: Renminbi Yuan
Income relating to variable lease payments
Item Selling profit or loss Finance income not included in the measurement of the net
investment in the leases
Finance income from net
1834273.00
investment in leases
Total 1834273.00
Annual undiscounted lease receivables for the next five years
□Applicable √ Not applicable
Reconciliation between undiscounted lease receivables and net investment in the lease
The undiscounted minimum lease payments based on the lease agreements entered into with lessees are as follows:
Item 2024
Within 1 year inclusive 6289948.26 6313958.29
1 to 2 years inclusive 6145575.48 6289948.26
2 to 3 years inclusive 6126136.18 6145575.48
3 to 4 years inclusive 5981763.41 6126136.18
4 to 5 years inclusive 5966894.84 5981763.41
Over 5 years 6106771.89 12073666.73
Subtotal 36617090.06 42931048.35
Less: Unearned finance income 5407510.69 7241784.14
Net investment in the leases 31209579.37 35689264.21
255(3) Selling profit or loss recognised by the Company on finance leases as a manufacturer or dealer
√ Applicable □Not applicable
82. Data resources
83. Others
VIII. Research and development expenditure
Currency: Renminbi Yuan
Amount for the current Amount for the prior
Item
period period
Employee benefits 197655486.19 157935342.59
Materials 129057126.96 119747741.17
Depreciation and amortisation 22676284.70 20781848.78
Other miscellaneous expenses 61488668.39 49698993.47
Total 410877566.24 348163926.01
Including: Research and development expenditure expensed as incurred 410877566.24 348163926.01
1. Research and development items eligible for capitalisation
Currency: Renminbi Yuan
Additions during the period Reductions during the period
Closing
Item Opening balance Internal development Recognised as Transferred to
Others balance
expenditures intangible assets profit or loss
Total
Significant capitalised research and development items
Research and How economic Commencement Specific basis for
Estimated
Item development benefits is expected date of commencement of
completion date
progress to be generated capitalisation capitalisation
Provision for impairment of development expenditures
Currency: Renminbi Yuan
Increase during the Decrease during the
Item Opening balance Closing balance Impairment test
period period
256Section VIII Financial Report 2. Important outsourced research projects
Judgment criteria and specific basis for
Project name How economic benefits are expected to be generated
capitalisation or being expensed
Other descriptions:
IX. Changes in the scope of consolidation
1. Business combination not involving entities under common control
(1) Business combination not involving entities under common control for the period
Currency: Renminbi Yuan
Revenue of the Profit of the Cash flows of the
Basis for
Time of Cost of Equity Method acquiree from acquiree from acquiree from the
Name of the Acquisition determination
equity equity acquisition of equity the acquisition the acquisition acquisition date
acquiree date of acquisition
acquisition acquisition ratio (%) acquisition date to the end date to the end to the end of the
date
of the period of the period period
Other descriptions:
(2) Cost of the combination and goodwill
Currency: Renminbi Yuan
Cost of the combination
- Cash
- Fair value of non-cash assets
- Fair value of debt issued or assumed
- Fair value of equity securities issued
- Fair value of the contingent consideration
- Fair value of equity interest held before the acquisition date
- Others
Total cost of the combination
Less: Interest in the fair value of the net identifiable assets acquired
Excess of interest in the fair value of the net identifiable assets acquired over goodwill/cost of the combination
Basis for determining the fair value of the cost of the combination:
Disclosure of contingent consideration and the related changes
Main reasons for the formation of large goodwill:
Other descriptions:
257(3) Identifiable assets and liabilities of the acquiree at the acquisition date
Currency: Renminbi Yuan
Fair value at the acquisition date Carrying amount at the acquisition date
Assets:
Currency funds
Accounts receivable
Inventories
Fixed assets
Intangible assets
Liabilities:
Borrowings
Accounts payable
Deferred tax liabilities
Net assets
Less: Non-controlling interests
Net assets acquired
Methods for determining the fair values of identifiable assets and liabilities:
Contingent liabilities of the acquiree assumed in a business combination:
Other descriptions:
(4) Gains or losses recognised as a result of remeasuring to fair value the equity interest held before the business combination
Whether there are cases where business combinations are achieved in stages with the control being obtained during the
reporting period
□Yes √ No
(5) Description regarding the combination consideration or fair value of the acquiree’s identifiable assets and liabilities that
cannot be reasonably determined at the acquisition date or at the end of the current period
(6) Other disclosure
258Section VIII Financial Report 2. Business combination involving entities under common control
(1) Business combination involving entities under common control during the period
Currency: Renminbi Yuan
Basis for Revenue of the entity being Profit of the entity being Revenue of the Profit of the
Proportion of Basis for constituting a
Name of the determining absorbed from the beginning absorbed from the beginning entity being entity being
interest acquired business combination Combination
entity being the of the period in which the of the period in which the absorbed during absorbed during
in a business involving entities under date
absorbed combination combination occurs to the combination occurs to the the comparative the comparative
combination(%) common control
date combination date combination date accounting period accounting period
Other descriptions:
(2) Cost of the combination
Currency: Renminbi Yuan
Cost of the combination
- Cash
- Carrying amount of non-cash assets
- Carrying amount of debt issued or assumed
- Face value of equity securities issued
- Contingent consideration
Disclosure of contingent consideration and the related changes:
Other descriptions:
(3) Carrying amount of assets and liabilities of the entity being absorbed on the combination date
Currency: Renminbi Yuan
Combination date At end of the prior period
Assets:
Currency funds
Accounts receivable
Inventories
Fixed assets
Intangible assets
Liabilities:
Borrowings
Accounts payable
Net assets
Less: Non-controlling interests
Net assets acquired
Contingent liabilities of the entity being absorbed assumed in a business combination:
Other descriptions:
2593. Reverse acquisitions
Basic information of the transaction the basis for the transaction to constitute a reverse acquisition whether the assets and
liabilities retained by the listed company constitute a business and the related basis the determination of the cost of the
combination the amount of equity adjustment when accounted for as an equity transaction and the related calculation:
4. Disposal of a subsidiary
Whether there are transactions or events that result in the loss of control over subsidiaries in the current period
□Yes √ No
Whether there is disposal of a subsidiary in stages in a bundled transaction with a loss of control in the current period
□Yes √ No
5. Changes in scope of consolidation for other reasons
Disclose the changes in the scope of consolidation (e.g. new subsidiaries liquidation of subsidiaries) due to other reasons
and the relevant information:
Due to the business needs of the Company a wholly-owned subsidiary Purcotton (Vietnam) Co. Ltd. was established by
Shenzhen Purcotton a subsidiary of the Company on 25 July . Additionally Nature Health Trading (Hong Kong) Co.Ltd. a wholly-owned subsidiary was established by Nature Health Development another subsidiary of the Company on 11
August .
6. Others
X. Interests in other entities
1. Interests in a subsidiary
(1) Composition of enterprise group
Currency: Renminbi Yuan
Proportion of
Name of the subsidiary Registered capital Place of business Registered address Nature of business ownership interest (%) Method of acquisition
Direct Indirect
Shenzhen City Shenzhen City
Shenzhen Purcotton 130000000.00 Sale of Purcotton products 100.00% 0.00% Establishment
Guangdong Province Guangdong Province
Beijing Purcotton 3000000.00 Beijing Beijing Sale of Purcotton products 0.00% 100.00% Establishment
Guangzhou City Guangzhou City
Guangzhou Purcotton 1000000.00 Sale of Purcotton products 0.00% 100.00% Establishment
Guangdong Province Guangdong Province
Shanghai Purcotton 3000000.00 Shanghai Shanghai Sale of Purcotton products 0.00% 100.00% Establishment
Shenzhen City Shenzhen City
Qianhai Purcotton 10000000.00 Sale of Purcotton products 0.00% 100.00% Establishment
Guangdong Province Guangdong Province
260Section VIII Financial Report Proportion of
Name of the subsidiary Registered capital Place of business Registered address Nature of business ownership interest (%) Method of acquisition
Direct Indirect
Production and sales of pure
Business combination
Huanggang City Hubei Huanggang City Hubei cotton spunlace non-woven
Winner Medical (Huanggang) 259459200.00 100.00% 0.00% involving entities
Province Province fabric medical consumables
under common control
and Purcotton products
Production and sales of Business combination
Jingmen City Hubei Jingmen City Hubei
Winner Medical (Jingmen) 23000000.00 medical consumables and 100.00% 0.00% involving entities
Province Province
Purcotton products under common control
Business combination
Chongyang County Chongyang County Production and sales of
Winner Medical (Chongyang) 28550000.00 100.00% 0.00% involving entities
Hubei Province Hubei Province medical consumables
under common control
Production and sales of Business combination
Jiayu County Hubei Jiayu County Hubei
Winner Medical (Jiayu) 333040000.00 medical consumables and 100.00% 0.00% involving entities
Province Province
Purcotton products under common control
Business combination
Zhijiang City Hubei Zhijiang City Hubei Production and sales of
Winner Medical (Yichang) 12413669.00 100.00% 0.00% involving entities
Province Province medical gray cloth
under common control
Production and sales of pure
Business combination
Tianmen City Hubei Tianmen City Hubei cotton spunlace non-woven
Winner Medical (Tianmen) 37670000.00 100.00% 0.00% involving entities
Province Province fabric medical consumables
under common control
and Purcotton products
Business combination
Sales of medical consumables
Winner Medical (Hong Kong) 897570.00 Hong Kong Hong Kong 60.00% 0.00% involving entities
and healthy consumer goods
under common control
Business combination
Winner Medical Malaysia 4943266.40 Malaysia Malaysia No actual business operation 100.00% 0.00% not involving entities
under common control
Heyuan City Heyuan City
Winner Medical (Heyuan) 100000000.00 No actual business operation 100.00% 0.00% Establishment
Guangdong Province Guangdong Province
Production and sterilization
Wuhan City Hubei Wuhan City Hubei of pure cotton spunlace non-
Winner Medical (Wuhan) 800000000.00 100.00% 0.00% Establishment
Province Province woven fabric and Purcotton
products
Shenzhen City Shenzhen City Sales of personal care
PureH2B 150000000.00 100.00% 0.00% Establishment
Guangdong Province Guangdong Province products and other products
Shenzhen City Shenzhen City Sales of cotton lining
Purunderwear 5000000.00 0.00% 100.00% Establishment
Guangdong Province Guangdong Province products
Huanggang City Hubei Huanggang City Hubei
Huanggang Purcotton 10000000.00 Sale of Purcotton products 0.00% 100.00% Establishment
Province Province
261Proportion of
Name of the subsidiary Registered capital Place of business Registered address Nature of business ownership interest (%) Method of acquisition
Direct Indirect
Business combination
Huzhou City Zhejiang Huzhou City Zhejiang Production and sales of
Longterm Medical 50000000.00 55.00% 0.00% not involving entities
Province Province medical consumables
under common control
Business combination
Hangzhou City Hangzhou City Other technology promotion
Hangzhou Shengyi 5000000.00 0.00% 55.00% not involving entities
Zhejiang Province Zhejiang Province services
under common control
Engineering technical Business combination
Xi’an City Shaanxi Xi’an City Shaanxi
Xi’an Longtemu 5000000.00 research and experimental 0.00% 55.00% not involving entities
Province Province
development under common control
Manufacturing of medical Business combination
Huzhou City Zhejiang Huzhou City Zhejiang
Deqing Longterm 2000000.00 instruments equipment and 0.00% 55.00% not involving entities
Province Province
device under common control
Manufacturing of medical Business combination
US Longterm the United States the United States instruments equipment and 0.00% 55.00% not involving entities
device under common control
Business combination
Wenzhou City Wenzhou City Software and information
Zhejiang Honglan 10651163.00 0.00% 31.35% not involving entities
Zhejiang Province Zhejiang Province technology services
under common control
Xiufeng District Xiufeng District
Business combination
Guilin City Guangxi Guilin City Guangxi
Winner Guilin 86600997.00 Rubber products 91.74% 0.00% not involving entities
Zhuang Autonomous Zhuang Autonomous
under common control
Region Region
Business combination
Changde City Hunan Changde City Hunan Production and sales of
Winner Medical (Hunan) 44000111.00 68.70% 0.00% not involving entities
Province Province medical consumables
under common control
Engineering technical Business combination
Changde City Hunan Changde City Hunan
Ruian Medical Device 2000000.00 research and experimental 0.00% 68.70% not involving entities
Province Province
development under common control
Business combination
Shenzhen City Shenzhen City
Junjian Medical 20120000.00 Sales of medical consumables 100.00% 0.00% not involving entities
Guangdong Province Guangdong Province
under common control
Production and sales of
Mexico Longterm 138467940.00 Mexico Mexico 0.00% 55.00% Establishment
medical consumables
Business combination
Shanghai Hongsong 2000000.00 Shanghai Shanghai Sales of medical consumables 60.00% 0.00% not involving entities
under common control
Business combination
Jingzhou City Hubei Jingzhou City Hubei Production and sale of rubber
Winner Jinzhou 87500000.00 0.00% 91.74% not involving entities
Province Province products
under common control
262Section VIII Financial Report Proportion of
Name of the subsidiary Registered capital Place of business Registered address Nature of business ownership interest (%) Method of acquisition
Direct Indirect
Wuhan City Hubei Wuhan City Hubei
Purcotton Wuhan 20000000.00 Sale of Purcotton products 0.00% 100.00% Establishment
Province Province
Hong Kong Purcotton 2768100.00 Hong Kong Hong Kong Sale of Purcotton products 0.00% 100.00% Establishment
Trade and consultancy
Pan-China (H.K.) 1285531260.00 Hong Kong Hong Kong 100.00% 0.00% Establishment
services
Wuhan City Hubei Wuhan City Hubei Research and experimental
Winner Biomedical 5000000.00 0.00% 67.00% Establishment
Province Province development
Wuhan City Hubei Wuhan City Hubei Research and experimental
Purcotton Agricultural 5000000.00 0.00% 58.00% Establishment
Province Province development
Manufacturing of chemical Business combination
Wuhan City Hubei Wuhan City Hubei
Hubei Zhongfu 10000000.00 raw materials and chemical 0.00% 67.00% not involving entities
Province Province
products under common control
Business combination
Jiaxing City Zhejiang Jiaxing City Zhejiang Medical devices and special
GRI METC Note1 75.20% not involving entities
Province Province industrial protective products
under common control
Business combination
GRI Alleset Note2 Hong Kong Hong Kong Sales of medical products 75.20% not involving entities
under common control
Business combination
Alleset Inc Note3 the United States the United States Sales of medical products 75.20% not involving entities
under common control
Note:
Note 1 The registered capital of GRI METC is USD6.6 million
Note 2 The registered capital of GRI Alleset is HKD1 million
Note 3 The registered capital of Alleset Inc is USD500
Currency: Renminbi Yuan
Description of the difference between the percentage of equity interest and the proportion of voting rights held in
subsidiaries:
Basis for holding half or less than hald of the voting rights but still controlling the investee and holding more than half of the
voting rights but not controlling the investee:
For the important structured entity included in the scope of consolidation the control basis is as follows:
Basis for determining whether the company is an agent or a principal:
Other descriptions:
(
2632) Material non-wholly owned subsidiary
Currency: Renminbi Yuan
Percentage of equity Profit or loss for the Dividends paid to Closing balance
Name of the subsidiary interests held by non- period allocated to non-controlling of non-controlling
controlling interests non-controlling interests interests interests
Longterm Medical 45.00% 52721061.93 421845594.20
Description of the difference between the percentage of equity interest held by non-controlling interests and the proportion of
voting rights held in subsidiaries:
Other descriptions:
(3) Summarised financial information of material non-wholly owned subsidiaries
Currency: Renminbi Yuan
Closing balance Opening balance
Name of the
Non-current Current Non-current Non-current Current Non-current
subsidiary Current assets Total assets Total liabilities Current assets Total assets Total liabilities
assets liabilities liabilities assets liabilities liabilities
Longterm Medical 380855609.68 732692154.61 1113547764.29 137935985.28 37325234.91 175261220.19 260695340.14 730160168.87 990855509.01 141735028.57 44087161.99 185822190.56
Currency: Renminbi Yuan
Amount for the current period Amount for the prior period
Name of the
Revenue for the Total comprehensive Net cash flows from Total comprehensive Net cash flows from
subsidiary Profit for the year Revenue Profit
year income for the year operating activities income operating activities
Longterm Medical 520456663.03 118873163.64 118873163.64 507708291.13 84011514.32 84011514.32
Other descriptions:
(4) Significant restrictions on the Company’s ability to use the assets and settle the liabilities of the Group
(5) Financial or other support provided to structured entities included in the scope of consolidated financial statements
Other descriptions:
264Section VIII Financial Report 2. Transactions in which the share of equity in subsidiaries changes and the control is not affected
(1) Description of changes in the share of equity in subsidiaries
(2) Effect of the transaction on non-controlling interests and equity attributable to owners of the parent
Currency: Renminbi Yuan
Purchase cost/consideration for the disposal
- Cash
- Fair value of non-cash assets
Total purchase cost/consideration for the disposal
Less: share of net assets of the subsidiary calculated at the proportion of equity acquired/disposed
Differences
Including: Adjustment to capital reserves
Adjustment to surplus reserve
Adjustment to retained earnings
Other descriptions:
3. Equity in joint ventures and associates
(1) Material joint ventures or associates:
Name of joint Proportion of
Principal place Nature of Accounting for joint
ventures and Registered address ownership interest (%)
of business business ventures and associates
associates Direct Indirect
Sales of medical Accounted for as long-
Company S the United States Cayman Islands 38.82%
products term equity investments
Description of the difference between the percentage of equity interest and the proportion of voting rights held in joint
ventures or associates:
Basis for having significant influence even though holding less than 20% of the voting rights or not having significant
influence even though holding 20% or more of the voting rights:
265(2) Summarised financial information of material joint ventures:
Currency: Renminbi Yuan
Closing balance/amount for Opening balance/amount
the current period for the prior period
Current assets
Including: Cash and cash equivalents
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Non-controlling interests
Equity attributable to shareholders of the parent
Net assets calculated by the proportion of ownership interests
Adjustments
- Goodwill
- Unrealised profit on inter-company transactions
- Others
Carrying amount of investments in joint ventures
Fair value of the equity investment in joint ventures at quoted
market price
Revenue
Finance expenses
Income tax expenses
Profit
Profit from a discontinued operation
Other comprehensive income
Total comprehensive income
Dividends received from joint ventures during the year
Other descriptions:
266Section VIII Financial Report (3) Summarised financial information of material associates:
Currency: Renminbi Yuan
Closing balance/amount Opening balance/amount
for the current period for the prior period
Company S
Current assets 357114141.83
Non-current assets 233580447.87
Total assets 590694589.70
Current liabilities 244085702.39
Non-current liabilities 22927826.20
Total liabilities 267013528.59
Net assets 323681061.11
Non-controlling interests
Equity attributable to shareholders of the parent
Net assets calculated by the proportion of ownership interests 125659137.86
Adjustments 330925981.63
- Goodwill
- Unrealised profit on inter-company transactions
- Others
Carrying amount of equity investments in associates 456585119.49
Fair value of equity investments in associates at quoted market price
Revenue 533670486.72
Profit -56900089.96
Profit from a discontinued operation
Other comprehensive income
Total comprehensive income -56900089.96
Finance expenses -784824.27
Income tax expenses -6965282.10
Dividends received from associates during the year
Other descriptions:
267(4) Aggregate financial information of individually immaterial joint ventures and associates:
Currency: Renminbi Yuan
Closing balance/amount Opening balance/amoun
for the current period t for the prior period
Joint ventures:
Total based on shareholding ratios
Associates:
Total carrying amount of the investment 22404695.19 22207128.31
Total based on shareholding ratios
- Profit 218658.25 74946.72
- Total comprehensive income 218658.25 74946.72
Other descriptions:
(5) Description of significant restrictions on the ability of joint ventures or associates to transfer funds to the Company
(6) Excess losses incurred by joint ventures or associates:
Currency: Renminbi Yuan
Name of joint ventures Cumulative unrecognised Unrecognised losses (or net Cumulative unrecognised losses
and associates losses at prior period profit) for the current period at end of the current period
Other descriptions:
(7) Unrecognised commitments related to investments in joint ventures
(8) Contingent liabilities related to the investments in joint ventures or associates
4. Material joint operation
Percentage of ownership interest/
Principal place of Registered Nature of
Name of the joint operation equity interest
business address business
Direct Indirect
Description of the difference between the percentage of ownership interest or equity interest and the proportion of voting
right held in the joint operation:
When the joint operation is a separate entity the basis for classifying it as a joint operation is as below:
Other descriptions:
5. Interests in structured entities not included in the scope of consolidated financial statements
Description of structured entities not included in the scope of consolidated financial statements:
6. Others
268Section VIII Financial Report XI. Government grants
1. Government grants recognised at the amount receivable at the end of the reporting period
√ Applicable □Not applicable
Reasons for failing to receive the estimated amount of government grants at the estimated time point
√ Applicable □Not applicable
2. Liability items relating to government grants
√ Applicable □Not applicable
Currency: Renminbi Yuan
Amounts recognised Amounts Others
Addition of grants
as non-operating transferred in other changes in Related to assets/
Item Opening balance in the current Closing balance
income in the current income in the the current income
period
period current period period
Deferred income 157154401.72 66679977.51 12671996.10 211162383.13 Related to assets
3. Government grants included in profit or loss
√ Applicable □Not applicable
Currency: Renminbi Yuan
Item Amount for the current period Amount for the prior period
Government grants related to assets
Recognised as other income 12671996.10 15276248.63
Government grants related to income
Recognised as other income 48379670.69 42237896.79
Recognised as non-operating income 274069.34 9140.00
Total 61325736.13 57523285.42
Other descriptions:
XII. Risks related to financial instruments
1. Risks arising from financial instruments
(1) Risks of financial instruments
The Group’s daily activities expose it to risks arising from various financial instruments mainly including credit risk
liquidity risk and market risk. The Group’s risk management policy to address these risks are described as follows:
The Board of Director is responsible for planning and establishing the Group’s risk management framework formulating risk
269management policies and relevant guidelines and supervising the implementation of risk management measures. The Group
has risk management policies to identify and analyse risks faced by the Group which set rules for specific risks covering
market risk credit risk and liquidity risk management. The Group regularly assesses changes in the market environment and
its operating activities to determine whether to update risk management policies and systems. The Group’s risk management
is carried out by the Group’s Risk Control Department in accordance with the policies approved by the Board of Directors.The department identifies evaluates and mitigates risks through close cooperation with other business units of the Group. The
Internal Audit Department of the Group reviews risk management control and procedures on a regular basis and reports the
results to the Audit Committee of the Group.The Group diversifies the risk of financial instruments through various appropriate investment and business portfolios and
mitigates the risk of concentration in a single industry specific region or specific counterparty by formulating corresponding
risk management policies.· Credit risk
Credit risk is the risk that a counterparty to a financial instrument will cause a financial loss for the Group by failing to
discharge an obligation.The Group’s credit risk mainly arises from currency funds notes receivable accounts receivable receivables financing
and other receivables as well as debt investments at fair value through profit or loss that are not included in the scope of
impairment assessment etc. At the balance sheet date the carrying amount of the Group’s financial assets is equal to its
maximum credit exposure.The Group believes that there is no significant credit risk associated with currency funds as they are deposited with well-
established state-owned banks and other large and medium-sised commercial banks with high credit rating. Management
does not expect that there will be any significant credit losses from non-performance by these counterparties.In addition the Group has policies to limit the credit exposure on notes receivable accounts receivable receivables financing
contract assets and other receivables. The Group assesses the credit quality of and sets credit periods for its customers based
on their financial position and credit records the availability of third-party guarantees and other factors such as current
market conditions. The credit records of customers are regularly monitored by the Group. For customers with poor credit
records the Group uses written payment reminders or shortens or cancels credit periods to ensure that the Group’s credit
risk is overall controllable.The Group does not require collateral as it only trades with recognised and creditworthy third parties. Credit risk
concentration is managed according to customers/counterparties geographic regions and industries. Since the customer base
of the Group’s accounts receivable is widely dispersed the Group has no significant concentration of credit risk. The Group
does not hold any collateral or other credit enhancements on the balance of accounts receivable
Criteria for determining significant increase in credit risk
At each balance sheet date the Group assesses whether the credit risk on financial instruments has increased significantly
since initial recognition. The principal criteria adopted by the Group in determining a significant increase in credit risk are
more than 30 days overdue or significant changes in one or more of the following indicators: material adverse changes in the
debtor’s operating environment internal/external credit ratings actual or expected operating results.
270Section VIII Financial Report · Credit-related risk
Definition of credit-impaired assets
The main criterion adopted by the Group in determining credit impairment is more than 90 days overdue. However in certain
cases where internal or external information indicates that it may not be able to collect a contract amount in full before
considering any credit enhancements held the Group will also consider that credit impairment has occurred. It may not be
possible to identify a single discrete event - instead the combined effect of several events may have caused financial assets to
become credit-impaired.· Liquidity risk
Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations that are settled by delivering cash or
another financial asset. The Group’s policy is designed to ensure that sufficient cash is available to repay debts as they fall
due. Liquidity risk is managed centrally by the Group’s Finance Department. The department monitors rolling forecasts of
cash balances readily realisable securities and cash flows over the next 12 months to ensure that the Group has sufficient
funds to repay its debts under all reasonable forecasts. The department also continuously monitors whether the Group
complies with the provisions of borrowing agreements and obtains commitments from major financial institutions to provide
sufficient reserve funds to meet short-term and long-term liquidity requirements.The maturity profile of financial liabilities based on undiscounted contractual cash flow is summarised as follows:
Items Within 1 year 1 to 2 years 2 to 5 years Over 5 years Total
Short-term borrowings 1839923994.52 - - - 1839923994.52
Notes payable 381818750.95 - - - 381818750.95
Accounts payable 1280618737.32 - - - 1280618737.32
Other payables 529651533.30 - - - 529651533.30
Current portion of non-
186876235.07---186876235.07
current liabilities
Long-term borrowings - 1330000.00 3990000.00 52482666.67 57802666.67
Long-term payables - - 30685200.00 - 30685200.00
Lease liabilities - 152753817.53 196567725.23 104678613.82 454000156.58
Total 4218889251.16 154083817.53 231242925.23 157161280.49 4761377274.41
2712024
Items Within 1 year 1 to 2 years 2 to 5 years Over 5 years Total
Short-term borrowings 1972918549.76 - - - 1972918549.76
Notes payable 431873210.11 - - - 431873210.11
Accounts payable 1155930554.98 - - - 1155930554.98
Other payables 516522493.00 - - - 516522493.00
Current portion of non-
399167353.26---399167353.26
current liabilities
Long-term borrowings - 4346397.26 3990000.00 53869753.42 62206150.68
Long-term payables - - 59764037.31 - 59764037.31
Lease liabilities - 165961149.99 209931591.41 107766498.95 483659240.35
Total 4476412161.11 170307547.25 273685628.72 161636252.37 5082041589.45
· Market risk
Market risk of a financial instrument is the risk that the fair value or future cash flows of the financial instrument will
fluctuate because of changes in market prices. It comprises interest rate risk currency risk and price risk.
(1) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes
in market interest rates.Interest-bearing financial instruments with fixed and floating interest rates expose the Group to fair value interest rate risk and
cash flow interest rate risk respectively. The Group determines the relative proportions of its instruments issued at fixed and
floating interest rate based on market conditions and maintains an appropriate mix of such instruments through regular review
and monitoring. The Group uses interest rate swaps to hedge interest rate risk if necessary.As at 31 December with other variables held unchanged had the borrowing rate calculated at the floating interest rate
risen or fallen by 100 basis points (The Group had no borrowings with no floating interest rates in ) the Group’s profit
would have decreased or increased by RMB0.00 (31 December 2024: RMB3257632.71). Management believes that 100
basis points reflect a reasonable range of possible changes in interest rates for the next year.
(2) Currency risk
Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in
foreign exchange rates.The Group continuously monitors transactions denominated in foreign currencies and the scale of foreign currency assets
and liabilities to minimise the currency risk. The Group may also enter into forward foreign exchange contracts or currency
swap contracts to avoid the currency risk. In the current and prior periods the Group did not enter into any forward foreign
exchange contracts or currency swap contracts.The currency risk faced by the Group mainly comes from financial assets and liabilities denominated in USD. The amount of
foreign currency financial assets and liabilities converted into RMB is as follows:
272Section VIII Financial Report Increase/ Increase/ (decrease) in
Increase/ (decrease) Increase/ (decrease)
Items (decrease) in net other comprehensive
in exchange rates (%) in total equity
profit or loss income net of tax
Weaker RMB against USD 5% 42029257.12 11449078.16 53478335.28
Stronger RMB against USD -5% -42029257.12 -11449078.16 -53478335.28
Weaker RMB against EUR 5% 828850.62 802122.99 1630973.61
Stronger RMB against EUR -5% -828850.62 -802122.99 -1630973.61
2024
Increase/ Increase/ (decrease) in
Increase/ (decrease) Increase/ (decrease)
Items (decrease) in net other comprehensive
in exchange rates (%) in total equity
profit or loss income net of tax
Weaker RMB against USD 5% 24387578.87 - 24387578.87
Stronger RMB against USD -5% -24387578.87 - -24387578.87
Weaker RMB against EUR 5% 867409.48 - 867409.48
Stronger RMB against EUR -5% -867409.48 - -867409.48
(3) Price risk
The Group’s exposure to price risk is the risk arising from changes in the fair value of financial assets and liabilities held for
trading classified as financial assets and liabilities at fair value through profit or loss. The Group manages this exposure by
maintaining a portfolio of investments with different risks.The table below illustrates the sensitivity of the Group’s net profit or loss and other comprehensive income net of tax to every
5% change in the fair value of financial assets held for trading based on the carrying amounts as at the balance sheet date
with all other variables held constant.
Carrying amount of
Increase/ (decrease) Increase/ (decrease) Increase/ (decrease)
Items financial assets held
in net profit or loss in total equity in total equity
for trading
Financial assets held for trading
Financial assets and liabilities at
2825378695.56116209580.82-116209580.82
fair value through profit or loss
2732024
Carrying amount of
Increase/(decrease) Increase/(decrease) Increase/(decrease)
Items financial assets held
in net profit or loss in total equity in total equity
for trading
Financial assets held for trading
Financial assets and liabilities at
2921341484.39123525008.09-123525008.09
fair value through profit or loss
2. Capital management
The primary objective of the Group’s capital management is to safeguard its ability to continue as a going concern and to
maintain healthy capital ratios to support its business development and maximise shareholders’ value.The Group manages and adjusts its capital structure in light of economic dynamics and changes in risk characteristics
of relevant assets. To maintain or adjust the capital structure the Group may adjust dividend payments return capital or
issue new shares to shareholders. The Group is not subject to external mandatory capital requirements. No changes in the
objectives policies or processes for managing capital were made in and 2024.The Group monitors capital using an asset-liability ratio which is calculated by dividing total liabilities by total assets.The Group’s policies are designed to maintain the ratio at a reasonable level. The asset-liability ratio of the Group as at the
balance sheet date is as follows:
Items 2024
Total assets 18404858027.22 18391855961.52
Total liabilities 6112276598.33 6516184758.78
Asset-liability ratio 33.21% 35.43%
2. Hedge
(1) The Company carries out hedging business for risk management
□Applicable √ Not applicable
(2) The Company carries out qualified hedging business and applies hedging accounting
Unit: RMB Yuan
Cumulative fair value hedging Some sources The impact of hedge
Book value related
adjustments of hedged items of hedging accounting on a
Items to hedged items and
included in recognised effectiveness and Company’s financial
hedging instruments
carrying amounts ineffectiveness statements
Hedging risk type
Hedge type
274Section VIII Financial Report Other description
(3) The Company engages in hedging activities for risk management purposes and anticipates achieving risk management
objectives but does not apply hedge accounting
□Applicable √ Not applicable
3. Financial assets
(1) Transfer method classification
√ Applicable □Not applicable
Unit: RMB Yuan
Nature of financial Amount of financial
Transfer method Derecognition Basis for derecognition
assets transferred assets transferred
It has retained substantially all the
Endorsed bills Notes receivable 17525376.84 Not derecognised risks and rewards including related
default risks
It has transferred substantially all
Endorsed bills Receivables financing 75425011.30 Derecognition
the risks and rewards
It has transferred substantially all
Factoring Accounts receivable 128072545.59 Derecognition
the risks and rewards
Total 221022933.73
(2) Financial assets derecognised due to transfers
√ Applicable □Not applicable
Unit: RMB Yuan
Amount of financial assets Gains or losses related to
Items Transfer method
derecognised derecognition
Receivables financing Endorsed bills 183624819.37
Accounts receivable Factoring 128072545.59 59954.82
Total 311697364.96 59954.82
(3) Asset transfer financial assets that continue to be involved
□Applicable √ Not applicable
Other description
275XIII. Fair value disclosure
1. Closing fair value of assets and liabilities measured with fair value
Unit: RMB Yuan
Closing fair value
Items Level 1 Level 3 Level 2 fair value
fair value fair value Total
measurements
measurements measurements
I. Recurring fair value measurements -- -- -- --
1. Financial assets held for trading 2825378695.56 2825378695.56
(1) Financial assets at fair value through profit
2825378695.562825378695.56
or loss
Receivables financing 48201306.98 48201306.98
Other non-current financial assets 26277261.16 73603810.38 99881071.54
Total assets continuously measured at fair value 2899857263.70 73603810.38 2973461074.08
II. Non-recurring fair value measurements -- -- -- --
2. Bas is o f de te rmin ing the marke t p r i ces o r recur r ing and non- recur r ing Leve l 1 fa i r va lue
measurements
3. Valuation techniques and qualitative and quantitative information of key parameters adopted for
recurring and non-recurring Level 2 fair value measurements
The Group enters into wealth management product contracts with various counterparties principally financial institutions
with high credit ratings. These financial instruments are not traded in active markets but there are active market quotes for
similar financial instruments. For wealth management products measured at fair value through profit or loss the expected rate
of return available in the market is used to estimate the future cash flows and the fair value is determined by discounting the
future cash flows at the interest rate determined based on the best estimates of the expected risk levels.Convertible corporate bond investments measured at fair value through profit or loss are measured using the valuation
technique of the binomial tree model. The model covers a number of market-observable inputs including the underlying
stock prices exercise prices and maturities.The fair value of receivables financing is measured at their par value.In identifying similar financial instruments the Group considers factors such as characteristics of assets or liabilities contract
terms and risks to ensure that the selected instruments are highly similar to the valued instruments in key aspects. The Group
regularly evaluates the effectiveness of the selected valuation model and adjusts model parameters in a timely manner in
response to market changes to ensure the accuracy of fair value.
276Section VIII Financial Report 4. Valuation techniques and qualitative and quantitative information of key parameters adopted for
recurring and non-recurring Level 3 fair value measurements
The Group’s Finance Department headed by the finance controller is responsible for formulating policies and procedures for
the fair value measurement of financial instruments. At each reporting date the Finance Department analyses movements
in the value of financial instruments and identifies the major inputs applied in the valuation. The valuation is reviewed and
approved by the finance controller.The fair value of the Group’s unlisted fund investments using fair value measurement within Level 3 is determined based on
the net asset value provided by the manager. This net asset value is determined based on the data of comparable companies
and taking into account market multipliers such as the price-to-earnings (P/E) ratio and the price-to-book (P/B) ratio or
referring to the market value of comparable companies. The Group believes that the fair value estimated using the valuation
technique and its changes are reasonable. It is the most appropriate value as at the balance sheet date.
5. Reconc i l ia t ion between opening and c los ing carry ing amounts and sens i t iv i ty analys is o f
unobservable parameters for recurring Level 3 fair value measurements
6. Transfers between fair value levels for recurring fair value measurements: reasons and the policies
for identifying the time of transfer
7. Changes in valuation techniques during the Period and reasons for changes
8. Fair value information of financial assets and liabilities not measured at fair value
9. Other information
XIV. Related parties and transactions
1. Parent
Proportion of Proportion of
Name Registered address Nature of business Registered capital ownership interest in voting power in
the Company (%) the Company (%)
Equity investment
Winner Group Limited Cayman Islands HKD1143000.00 69.83% 69.83%
and management
Information about the parent
The ultimate controlling party of the Company Li Jianquan.Other description:
2. Susidiaries
Information about the subsidiaries of the Company is disclosed in “Note X. Interests in other entities”.
2773. Joint ventures or associates
Details of the major joint ventures or associates of the Company are set out in “Note X. Interests in other entities”.The details of other joint ventures or associates that had related party transactions with the Company during the current
period or had outstanding balances arising from related party transactions with the Company in prior periods are as follows:
Name Related party relationships
Company S Associate
Chengdu Winner Likang Medical Products Co. Ltd. Associate
Hubei Xianchuang Technology Co. Ltd. Associate
Zhejiang Shiyou Medical Materials Co. Ltd. Associate
Other description:
4. Other related parties
Name Related party relationships
Glory Ray Holdings Limited Controlled by the actual controller
Controlled by the actual controller through Glory Ray
Glory Ray Limited
Holdings
Beijing Sequoia Xinyuan Equity Investment Center
Shareholder of the Company
(limited partnership)
Xiamen Leyuan Investment Partnership (Limited Partnership) Shareholder of the Company
Xiamen Yutong Investment Partnership (Limited Partnership) Shareholder of the Company
Xiamen Huikang Investment Partnership (Limited Partnership) Shareholder of the Company
Shenzhen Capital Group Co. Ltd. Shareholder of the Company
Xiamen Zepeng Investment Partnership (Limited Partnership) Shareholder of the Company
Chengdu Winner Likang Medical Products Co. Ltd. Associate with 49% of its equity hold by the Company
GRI-Alleset India Pvt Ltd. Controlled by minority shareholders of GRI
Controlled by close family members of the Company’s
Wuhan Zhuoling Packaging Co. Ltd.key management personnel
Controlled by close family members of the Company’s
Hubei Zhuoling Packaging Co. Ltd.key management personnel
Glory Ray Holdings Limited Controlled by the actual controller
Company S Associate
Original shareholder and original director of Winner
Huang Jun
Medical (Hunan)
278Section VIII Financial Report Name Related party relationships
Company in which Zheng Datian Vice Chairman of
Lixian SHRCB Rural Bank Co. Ltd.Winner Medical (Hunan) serves as a director
Actually controlled by Wu Kangping a shareholder of
Jingyun Biotechnology (Shanghai) Co. Ltd.Longterm Medical
Controlled by the ultimate controller of Winner Guilin
Shenzhen Nine Stars Printing and Packaging Group Co. Ltd.before merger
Controlled by the actual controller of Junjian Medical
Shenzhen Junhesheng Technology Co. Ltd.before merger
Controlled by the actual controller of Junjian Medical
Shenzhen Shengtianning Medical Device Co. Ltd.before merger
Controlled by the actual controller of Junjian Medical
Shenzhen Zhengjun Medical Device Co. Ltd.before merger
Actually controlled by Wu Di a shareholder of
Zhejiang Kanglidi Medical Articles Co. Ltd.Longterm Medical
Actually controlled by Wu Di a shareholder of
ZheJiang Longmed Medical Technology Co. Ltd.Longterm Medical
Actually controlled by Wu Kangping a shareholder of
ZheJiang Longrising Medical New Materials Co. Ltd.Longterm Medical
Controlling shareholder and actual controller of Junjian
Zheng Junhui
Medical before merger
Controlling shareholder of Longterm Medical before
Wu Kangping Huang Lepei Wu Di
merger and its current minority shareholders
Controlling shareholders of Shanghai Hongsong before
Cao Wensong Zhang Yuqing
merger and its current minority shareholders
Minority shareholder of Winner Guilin former
Guilin Golden Eagle Latex Technology Co. Ltd.shareholder of Winner Jingzhou
Shareholder of GRI before merger and its current
James Michael Mabry
minority shareholder
Shareholder of GRI before merger and its current
Min Tang
minority shareholder
Shareholder of GRI before merger and its current
Martin Dean Paugh
minority shareholder
Shareholder of GRI before merger and its current
John Brian Steward
minority shareholder
Shareholder of GRI before merger and its current
Mark Steven Fellows
minority shareholder
Other description:
2795. Related party transactions
(1) Related party transactions of sales and purchases of goods and provision and receipts of services
Purchases of goods / receipts of services from related parties
Unit: RMB Yuan
Approved Whether the transaction
Related parties Transactions 2024
transaction quota quota is exceeded
Hubei Zhuoling Packaging Co. Ltd. Purchasing goods or services 18321201.55 18540650.80
Chengdu Winner Likang Medical
Purchasing goods or services 34776.32 47928.39
Products Co. Ltd.Shenzhen Nine Stars Printing and
Purchasing goods or services 1546541.08 1392814.81
Packaging Group Co. Ltd.ZheJiang Longmed Medical
Purchasing goods or services 468120.17
Technology Co. Ltd.Guilin Golden Eagle Latex
Purchasing goods or services 5242433.42
Technology Co. Ltd.Sales of goods / provision of services to related parties
Unit: RMB Yuan
Related parties Transactions 2024
Zhejiang Kanglidi Medical Articles Co. Ltd. Selling goods or services 3689899.59 5596407.11
Chengdu Winner Likang Medical Products Co. Ltd. Selling goods or services 2285971.47 1390142.67
ZheJiang Longmed Medical Technology Co. Ltd. Selling goods or services 336498.15 673072.48
GRI-Alleset India Pvt Ltd Selling goods or services 726490.15 146735.86
Company S Selling goods or services 10058259.98 113424.99
Shenzhen Shengtianning Medical Device Co. Ltd. Selling goods or services 30889.38
Decription of related party transactions of sales and purchases of goods and provision and receipts of services
During the current year the Group engaged in transactions for goods and services with related parties based on market prices.
(2) Entrusted/contracted activities and delegated/outsourced activities with related party
Entrusted/contracted activities:
Unit: RMB Yuan
Pricing basis Trusteeship/contracting
Entrusting / Trustee/ Type of entrusted/ Commencement Termination
for trusteeship/ income recognised
outsourcing party contractor contracted assets date date
contracting fees during the period
280Section VIII Financial Report Description of related party entrusted/contracted activities
Delegated/outsourced activities:
Unit: RMB Yuan
Pricing basis Trusteeship/ outsourcing
Entrusting / Trustee/ Type of delegated/ Commencement Termination
for trusteeship/ income recognised
outsourcing party contractor outsourced assets date date
outsourcing fees during the period
Description of related party delegated/outsourced activities
(3) Related party leases
The Company as lessor:
Unit: RMB Yuan
Lessees Type of leased assets Rental income in Rental income in 2024
Chengdu Winner Likang Medical Products Co.Plant 1834273.44 2079022.91
Ltd. (Note)Note 1
ZheJiang Longmed Medical Technology Co. Ltd. Plant 363302.75 363302.75
Note:
Note 1: This rental income represents the unrealised financing income of the year.The Company as lessee:
Unit: RMB Yuan
Lease payments for short-term Variable lease payments
Type of leases and leases of low-value not included in the Interest expense on Additions to right-of-
Lease payments
Lessor leased assets accounted for under the measurement of lease lease liabilities use assets
assets simplified approach (if applicable) liabilities (if applicable)
20242024202420242024
Description of related party leases
(4) Related party guarantees
The Company as guarantor
Guaranteed party Guarantee amount Commencement date Expiry date Whether guarantee has been fulfiled
The Company as guaranteed party
Unit: RMB Yuan
Guaranteed party Guarantee amount Commencement date Expiry date Whether guarantee has been fulfiled
Decsription of related party guarantees
281(5) Related party fund lending
Unit: RMB Yuan
Related party Loan amount Commencement date Expiry date Remarks
Funds borrowed
Funds lent
(6) Related party asset transfers and debt restructuring
Unit: RMB Yuan
Related parties Transactions 2024
(7) Compensation of key management personnel
Unit: RMB Yuan
Items 2024
Compensation of key management personnel 20904823.67 18245607.48
Including: Share-based payments 2151481.79 2020576.80
(8) Other related party transactions
Related party borrowings
Item 2024
Related party borrowings (Note) 30685200.00 32094498.00
Note: The borrowings refer to the interest-free borrowings from Pan-China (H.K.) to the controlling shareholder Winner
Group Limited. See Note VII.47 for details.
6. Amounts due from/to related parties
(1) Receivables
Unit: RMB Yuan
Closing balance Opening balance
Items Related parties Provision for Provision for
Book balance Book balance
bad debts bad debts
Accounts receivable GRI-Alleset India Pvt Ltd 12910902.74 8620320.59 13056602.47 6955786.99
Accounts receivable Zhejiang Kanglidi Medical Articles Co. Ltd. 1906824.00 95341.20 1870228.80 93511.44
Accounts receivable Chengdu Winner Likang Medical Products Co. Ltd. 839283.13 41964.16 538133.25 26906.66
Accounts receivable ZheJiang Longmed Medical Technology Co. Ltd. 37705.56 1885.28
Accounts receivable Company S 4199677.24 209983.86
Other receivables GRI-Alleset India Pvt Ltd 5075034.33 5058092.23 5186667.64 5150927.49
282Section VIII Financial Report Closing balance Opening balance
Items Related parties Provision for Provision for
Book balance Book balance
bad debts bad debts
Other receivables Company S 4010984.13 200549.21
Current portion of non-
Chengdu Winner Likang Medical Products Co. Ltd. 4707526.63 4479684.84
current assets
Long-term receivables Chengdu Winner Likang Medical Products Co. Ltd. 26502052.74 31209579.38
Other non-current assets Guilin Golden Eagle Latex Technology Co. Ltd. 96100.00
Other non-current assets Company S 323704.00
(2) Payables
Unit: RMB Yuan
Closing book Opening book
Items Related parties
value value
Accounts payable Chengdu Winner Likang Medical Products Co. Ltd. 9987.27 11417.02
Accounts payable Hubei Zhuoling Packaging Co. Ltd. 7153560.05 5962746.26
Accounts payable Shenzhen Nine Stars Printing and Packaging Group Co. Ltd. 325353.96 846592.73
Accounts payable Zhejiang Kanglidi Medical Articles Co. Ltd. 14557.20
Accounts payable ZheJiang Longmed Medical Technology Co. Ltd. 46346.46
Accounts payable ZheJiang Longrising Medical New Materials Co. Ltd. 5229.00
Accounts payable Guilin Golden Eagle Latex Technology Co. Ltd. 455825.00 623503.50
Accounts payable Company S 5717843.05
Contract liabilities Company S 21526.40 150714.54
Contract liabilities ZheJiang Longmed Medical Technology Co. Ltd. 43043.81
Contract liabilities Shenzhen Capital Group Co. Ltd. 11946.90
Contract liabilities Shenzhen Shengtianning Medical Device Co. Ltd. 1165.93
Long-term payables Winner Group Limited 26994520.77 26892539.19
Other payables Zhejiang Shiyou Medical Materials Co. Ltd. 10.23
Other payables Company S 281234.11
Other non-current
Minority shareholders of GRI 387682358.99 373262348.97
liabilities
Dividends payable Winner Group Limited 162645754.80
2837. Commitments with related parties
8. Other information
Except for long-term receivables all other receivables and payables with related parties are interest-free and unsecured.XV. Share-based payments
1. Share-based payments
√ Applicable □Not applicable
Unit: RMB Yuan
Granted in the current year Exercised in the current year Unlocked in the current year Expired in the current year
Categories of grantees
Quantity Amount Quantity Amount Quantity Amount Quantity Amount
Management personnel 424000.00 6228560.00 143071.00 3076026.50
Sales personnel 38000.00 558220.00
R&D personnel 38000.00 558220.00
Total 500000.00 7345000.00 0.00 0.00 143071.00 3076026.50
Share options or other equity instruments outstanding at period end
√ Applicable □Not applicable
Stock options outstanding at the end of the Other equity instruments outstanding at the end
period of the period
Categories of grantees
Scope of exercise Remaining contractual Scope of exercise Remaining contractual
price term price term
Management personnel RMB21.5/share 9 months RMB14.69/share 40.5 months
Salesperson RMB21.5/share 9 months RMB14.69/share 40.5 months
R&D personnel RMB21.5/share 9 months RMB14.69/share 40.5 months
Other description:
284Section VIII Financial Report 2. Equity-settled share-based payments
√ Applicable □Not applicable
Unit: RMB Yuan
Method for determining the fair value of equity
Calculated according to stock price agreement and B-S model
instruments on the grant date
Dividend yield ratio expected and historical volatility risk-free
Significant parameters of determining the fair value of
interest rate expected term of share options weighted average
equity instruments on the grant date
share price
Basis for the determination of the number of viable
It is expected to meet the vesting conditions
equity instruments
Reasons for material differences between current and
None
prior period estimates
Accumulated amount of equity-settled share-based
132874312.08
payments recorded in capital reserves
Total expense recognised for equity-settled share-based
26442529.79
payments during the period
Other description:
(1) 2023 Employee Stock Ownership Plan (ESOP)
The Company held the 16th meeting of the third Board of Directors and the 11th meeting of the third Board of Supervisors
on 15 August 2023 and held the 2nd Extraordinary General Meeting of Shareholders of 2023 on 5 September 2023 which
reviewed and approved the Proposal on the First Grant of the Employee Stock Ownership Plan (Draft) the Proposal on the
Management Measures for the First Grant of the Employee Stock Ownership Plan and other related proposals.The purchase price of the ESOP is RMB43.00 per share. The actual subscription funds totaled RMB21715000 (excluding
reserved shares) and the actual number of shares subscribed were 21715000. The ratio of employee self-raised funds to
incentive funds set aside by the Company is 1:1. The source of share is the Company’s A-share ordinary shares repurchased
in its special repurchase account. The Company completed the non-trading transfer of the 2023 ESOP on 11 October 2023.The ESOP is valid for 60 months calculated from the date when the plan is approved at the shareholders’ meeting and the
Company announces the transfer of the underlying shares to the ESOP. The corresponding equity interests will vest in three
tranches to respective ESOP participants contingent upon the performance assessment during the vesting period namely
12 months 24 months and 36 months from the date when the underlying shares are transferred to the ESOP. The vesting
proportions will be 30% 30% and 40% of the total number of shares under the ESOP respectively.
(2) 2024 Class II Restricted Share Incentive Scheme
On 20 August the Company held the 7th meeting of the fourth Board of Directors and the 7th meeting of the fourth
Board of Supervisors which reviewed and approved the Proposal on Adjusting the Grant Price of the 2024 Restricted Share
Incentive Plan. The grant price of this incentive plan was adjusted due to equity distribution implemented by the Company.Upon completion of this adjustment the grant price for both the initial and reserved restricted shares under this incentive plan
was adjusted from RMB15.39 per share to RMB14.69 per share.
285On 12 November the Company held the 9th meeting of the fourth Board of Directors which reviewed and approved
the Proposal on the Grant of Restricted Shares to Participants of 2024 Restricted Share Incentive Scheme granting 500000
reserved restricted shares to 13 participants.This scheme is valid from the date of initial grant to the date when all restricted shares granted to participants are vested
or cancelled. The maximum period shall not exceed 60 months. The initial grant portion shall be vested in three tranches
to respective participants upon the performance assessment during the vesting period. The reserved grant portion shall be
vested in two tranches to respective participants upon the performance assessment during the vesting period. Specific vesting
arrangements are detailed in the relevant announcements disclosed by the Company on the CNINFO website.
3. Cash-settled share-based payments
□Applicable √ Not applicable
4. Share-based payments in current period
√ Applicable □Not applicable
Unit: RMB Yuan
Categories of grantees Equity-settled share-based payments Cash-settled share-based payments
Management personnel 16545054.82
Salesperson 7236581.02
R&D personnel 2660893.95
Total 26442529.79
Other description:
5. Modifications and terminations of share-based payments
None
6. Other information
XVI. Commitments and contingencies
1. Significant commitments
Significant commitments existing at the balance sheet date
Items 2024
Capital commitments 176386066.44 109806872.21
Total 176386066.44 109806872.21
286Section VIII Financial Report 2. Contingencies
(1) Significant contingencies existing at the balance sheet date
As at 31 December the Company had no significant contingencies to be disclosed.
(2) In cases where the Company has no significant contingences requiring disclosure this fact should also be disclosed.
The Company confirms that there are no significant contingencies that require disclosure.
3. Other information
XVII. Events after the balance sheet date
1. Significant non-adjusting events
Unit: RMB Yuan
Impact on financial position and Reasons for the inability to
Items Events
operating results estimate the impact
2. Profit distribution
Dividend to be distributed per 10 shares (RMB Yuan) 3
Bonus shares to be distributed per 10 shares (shares) 0
Capitalisation shares per 10 shares (shares) 0
Declared dividend per 10 shares after approval (RMB Yuan) 3
Declared bonus shares per 10 shares after approval (shares) 0
Declared capitalisation shares per 10 shares after approval (shares) 0
On April 20 2026 the Group convened the 10th meeting of the fourth Board of Directors to review
and approve the Proposal on the Profit Distribution Plan for and the Authorisation of Interim
Profit Distribution for 2026. Regarding the profit distribution plan for the year : Based on the
Company’s existing total share capital of 582329808 shares a cash dividend of RMB3.00 per
10 shares (inclusive of tax) shall be distributed to all shareholders totaling RMB174698942.40
(inclusive of tax). No capitalization of reserves into share capital or bonus shares shall be issued
and the remaining undistributed profits shall be carried forward to the next fiscal year. During the
period from the disclosure of the profit distribution plan to its implementation if the total number of
shares entitled to profit distribution changes the Company shall make corresponding adjustments in
Profit distribution accordance with the principle that the cash dividend ratio remains unchanged while the total amount of
plan cash dividends varies.Regarding the authorization for interim profit distribution for the year 2026: To further enhance
returns to investors and improve decision-making efficiency the Company proposes to request the
Shareholders’ General Meeting to authorize the Board of Directors to formulate specific interim
dividend plans subject to compliance with profit distribution conditions by comprehensively
considering the Company’s operating status and reasonable returns to shareholders. Such authorization
includes but is not limited to determining whether to distribute profits and formulating profit
distribution plans. The term of such authorization shall commence from the date the annual
Shareholders’ General Meeting for the year approves this resolution and shall expire upon the
completion of the aforementioned authorized matters.
2873. Sales return
4. Explanation for other events after the balance sheet date
XVIII. Other significant events
1. Correction of accounts prior period errors
(1) Retrospective restatement
Unit: RMB Yuan
Line items of the statements in
Correction of errors Processing procedures Cumulative impact
the affected comparative period
(2) Prospective application
Correction of errors Approval procedures Reasons for prospective application
2. Debt restructuring
3. Asset replacement
(1) Exchange of non-monetary assets
(2) Other asset replacement
4. Annuity plan
5. Discontinued operation
Unit: RMB Yuan
Profit before Income tax Attributable to
Items Revenue Expenses Profit
income tax expenses owners of the parent
Other description:
6. Segment information
(1) Basis for determining reportable segments and accounting policies
According to its internal organisational structure management requirements and internal reporting system the Company has
two reportable segments: medical consumables and consumer goods. Reportable segments of the Company offer different
products or services or operate in different regions. Since both segments require different techniques or marketing strategies
management of the Company manages operating activities of each reportable segment separately and regularly evaluates their
operating results to determine the allocation of resources to them and evaluate their performance.The inter-segment transfer price is determined on the basis of the actual transaction price and the expenses indirectly
attributable to each segment are distributed in proportion to the revenue (depending on specific facts and circumstances).
288Section VIII Financial Report Assets are allocated based on the performance of a segment and the location of the assets. Liabilities of a segment include
liabilities attributable to that segment arising from its business operations. If expenses related to liabilities shared by multiple
operating segments are allocated to those operating segments the underlying liabilities are also allocated to those operating
segments.
(2) Financial information of reporting segments
Unit: RMB Yuan
Medical Offset between
Items Consumer goods Unallocated Total
consumables segments
Revenue 5200668052.82 5748821914.19 10949489967.01
Cost of sales 3279239784.60 2454223244.93 5733463029.53
Impairment losses
of assets and credit 235515182.76 26031343.74 261546526.50
impairment losses
Depreciation and
198808267.19262082390.97460890658.16
amortisation
Operating profit 307283391.09 759848161.86 546546.56 1067678099.51
Non-operating income
-19857249.33-19857249.33
and expenses
Assets and liabilities
Total assets 8601008071.02 4532504125.89 5271345830.31 18404858027.22
Total liabilities 1707170901.34 1651798541.04 2753307155.95 6112276598.33
(3) In cases where the Company has no reporting segments or if it cannot disclose the total assets and total liabilities of each
reporting segment the reasons should be explained
(4) Other description
7. Other important transactions and matters affecting the decision of investors
7.1 Urban Renewal Project of Winner Industrial Park
(1) OverviewOn 6 April 2017 the Group and Shenzhen Galaxy Real Estate Development Co. Ltd. (hereinafter referred to as “Galaxy RealEstate”) signed the Cooperation Agreement on Urban Renewal Project of Winner Industrial Park to apply for and implement
the demolition and reconstruction of urban renewal and reconstruction of Winner Industrial Park in Longhua District
Shenzhen City (hereinafter referred to as “the Project”). The scope of land to be demolished for the Project is a state-owned
land that has been transferred. The plot No. of the land is A819-0123 with a site area of 29064.49 square metres and the
current use is industrial land. According to the statutory plan of [Pinus tabulaeformis area] of No.402-19&20&21 Bao’an
District Shenzhen City the planned use of this plot is second-class residential land. The plot has been registered for title
with a construction area of 36625.89 square metres used for office plant and dormitory. The Group shall be the sole subject
of rights to the said plot and all the buildings (structures) and appendages thereon. The first to sixth floors of the 2nd office
289building the first to sixth floors of the 3rd dormitory building and the first to sixth floors of the 4th dormitory building have
been mortgaged at present.
(2) Cooperation methods
The Group agrees to entrust the underlying plot and buildings to Galaxy Real Estate for application for approval of the urban
renewal unit plan and accepts the relocation compensation provided by Galaxy Real Estate according to the conditions
agreed in the agreement. Galaxy Real Estate is responsible for all the work related to the declaration of renewal unit plan
of the underlying plot and buildings and implementation of urban renewal as well as the relocation compensation and
demolition and reconstruction funds and enjoys the interest in the renewal project as the single market implementer. After
the renewal and reconstruction of the underling plot and buildings is approved as an urban renewal unit plan Galaxy Real
Estate shall discuss with the Group among others the specific transformation and development intensity planned purposes
and indicators in advance of the formal application for construction but the final details shall be subject to the approval of
relevant government departments.Considerations for the cooperation will be paid by Galaxy Real Estate to the Group through relocation compensations
payment. The Group voluntarily chooses a relocation compensation method that combines monetary compensation and title
exchange (relocation). Specifically: 1) the monetary compensations amount to RMB415 million; 2) the area of title exchange
(relocation) attributable to Party B shall be determined at 40% of the gross floor area for sale based on the area determined in
the final approval of the special planning of the renewal unit of the Project.
(3) Progress
The Company held the 14th meeting of the third session of Board of Directors on 12 June 2023 and the first Extraordinary
General Meeting of Shareholders in 2023 on 7 July 2023 to review and approve the Proposal on Executing Relevant
Agreements on Relocation Compensation and Resettlement for the Urban Renewal Units of the Winner Industrial Park. The
Company cooperated with Shenzhen Xingda Real Estate Development Co. Ltd. (hereinafter referred to as “Xingda”) and
signed the Agreement on Relocation Compensation and Resettlement for Urban Renewal Units of the Winner Industrial Park
in Longhua District in Shenzhen the Relinquishment of Real Estate Rights Statement and other relevant documents with
Xingda on the plot and above-ground buildings of the Winner Industrial Park in Longhua District of Shenzhen City.Upon signing the above documents the Company and Xingda actively advanced the transaction. The Project received the
Reply Letter from the Shenzhen Longhua District Urban Renewal and Land Preparation Bureau on the Approval Status
of the “Urban Renewal Unit Planning of Winner Industrial Park in Longhua Street Longhua District” (Shenhua Renewal
Letter [2023] No. 25). According to the letter the approval status indicates that the use of land in the Winner Industrial Park
has been changed from current Class I industrial land to planned Class II residential land + commercial land. The Company
vacated the industrial park and handed it over to Xingda on 17 July 2023. The two parties signed the Transfer Confirmation
Letter and settled utility fees. Then Xingda began to demolish old buildings.In light of the significant changes in the real estate market following an amicable negotiation the Company and Xingda
signed the Confirmation Letter on the Revocation of the “Relinquishment of Real Estate Rights Statement” on 29 January
2024 which sets forth that: the Project will be temporarily halted and the Company retrieved all Relinquishment of Real
Estate Rights Statement according to the agreement and rescinded all the statements therein.The Company held the 23rd meeting of the third session of Board of Directors on 26 July 2024 and the second
Extraordinary General Meeting of Shareholders in 2024 on 12 August 2024 to review and approve the Proposal on
Executing Relevant Supplementary Agreements on Relocation Compensation and Resettlement for the Urban Renewal
Units of the Winner Industrial Park. On 19 August 2024 the Company and Xingda and its subsidiary Galaxy Real Estate
signed the Supplementary Agreement I and II to the Relocation Compensation and Resettlement Agreement and the
290Section VIII Financial Report Supplementary Agreement I to the Agreement (collectively referred to as the “Supplementary Agreements”). According
to the Supplementary Agreements the principles for distribution of compensations and titles of relocation properties had
changed. The area of office properties and commercial properties attributable to the Company remains unchanged (39240
square meters and 200 square meters respectively) while the area of residential properties and the amount of compensations
attributable to the Company are linked to the actual average transaction price of commercial housing obtained by Xingda.The Supplementary Agreements also stipulate that the office property commercial property and residential property
attributable to the Company shall be delivered within four years after the construction license is obtained for the plot but the
delivery date shall be postponed accordingly in case of force majeures or delay caused by changes in government policies and
approvals during the above period.Currently the Company and Xingda have signed the “Land Acquisition Agreement” with the relevant local government
authorities. Xingda is currently applying for procedures regarding the contractual allocation of land to obtain a contract for
the grant of state-owned construction land use rights. Subsequently Xingda will advance land development and construction
work in accordance with the relevant processes prescribed by the government.As at 31 December the Company received a total of RMB250 million in cash including: a deposit of RMB50 million
in April 2017 a prepaid relocation compensation of RMB100 million in February 2020 and monetary compensation of
RMB100 million in July 2023 as agreed upon in the Relocation Compensation and Resettlement Agreement all of which
were included into other payables at the end of year. As at 31 December the land was not transferred and was recorded
in other non-current assets.
7.2 Heyuan Investment and Construction Project (Heyuan Project)
(1) Background
In 2016 as guided and encouraged by the Shenzhen Longhua District Committee and District Government the Group plans
to move part of the production and logistics functions to Heyuan Zijin Linjiang Industrial Park in response to the policy of
pairing assistance between Heyuan City and Shenzhen City. In May 2016 the Group and the People’s Government of Zijin
County of Heyuan City signed the Agreement on Investment in the Construction of Medical Package and Cotton Household
Goods Production Project (hereinafter referred to as the “Investment Agreement”) with a construction area of 200000 square
metres.After the agreement was signed and the project started construction the government required all construction in Zijin
Linjiang Industrial Park to suspend due to conflicts between the project site and the planned Heyuan East Station of Jiangxi-
Shenzhen High-speed Railway and the High-speed Railway New Town. Meanwhile the relevant land use procedures were
suspended.
(2) Progress
In June 2019 the Detailed Regulatory Planning and Detailed Constructional Urban Design of the Core Area of Heyuan High-
speed Railway New Town was published for public notification from 22 June 2019 to 22 July 2019. According to the final
public notification it is determined that the square in front of Heyuan East Station of High-speed Railway National Highway
205 and the High-speed Railway New Town overlaps with the land of Heyuan Project.
In October 2019 the Company signed a tripartite agreement with the People’s Government of Zijin County and the
Management Committee of Heyuan Jiangdong New District to clarify the overall resolution plan. The land used for Heyuan
Project and its above-ground buildings will be reclaimed by the People’s Government of Zijin County and the three parties
agreed to determine the amount of compensation through arbitration. The People’s Government of Zijin County paid RMB30
million to the Company as the performance bond.
291In November 2019 International Arbitration Court of Ganjiang New District issued the Award ((2019) G.G.Z.Zi No.095)
which confirmed the termination of the original Investment Agreement and the People’s Government of Zijin County shall
bear attorney fees legal costs and other expenses totaling RMB2655320.00 return the guarantee deposits for land transfer
of RMB3 million to the Company and compensate for the Company’s economic loss of RMB550 million. The People’s
Government of Zijin County shall pay 50% of the amount before 31 December 2019 and 50% before 29 February 2020.As at December the Company received the guarantee deposits for land transfer of RMB3 million returned by the
People’s Government of Zijin County and the compensation of RMB334.5 million. The Company also handed over the
project land above-ground buildings equipment and facilities and relevant supporting materials to the People’s Government
of Zijin County. Outstanding compensations of RMB215 million were included into other receivables at the end of the year.
8. Other information
XIX. Notes to key items of the Parent’s financial statements
1. Accounts receivable
(1) Disclosure by aging
Currency: Renminbi Yuan
Aging Closing balance Opening balance
Within 1 year (including 1 year) 455408160.41 360752595.26
1 to 2 years 14675943.73 3165440.79
2 to 3 years 575226.99 967899.68
Over 3 years 3305977.97 2490041.24
3 to 4 years 815936.73 171106.91
4 to 5 years 171106.91 57900.37
Over 5 years 2318934.33 2261033.96
Total 473965309.10 367375976.97
292Section VIII Financial Report (2) Disclosure by bad debt provision accrual method
Currency: Renminbi Yuan
Closing balance Opening balance
Category Book balance Impairment allowance Carrying Book balance Impairment allowance Carrying
Amount Proportion Amount Proportion amount Amount Proportion Amount Proportion amount
Provision for bad
debts made on an 121702.53 0.03% 121702.53 100.00% 0.00
individual basis
Including:
Accounts receivable
with provision for
473843606.5799.97%20539154.074.33%453304452.50367375976.97100.00%17767875.154.84%349608101.82
bad debts made on a
collective basis
Including:
Aging group 396227276.37 83.59% 20539154.07 5.18% 375688122.30 344944096.15 93.89% 17767875.15 5.15% 327176221.00
No credit risk group 77616330.20 16.38% 0.00 0.00% 77616330.20 22431880.82 6.11% 0.00 22431880.82
Total 473965309.10 100.00% 20660856.60 4.36% 453304452.50 367375976.97 100.00% 17767875.15 4.84% 349608101.82
Provision for bad debts is made based on the general expected credit loss (ECL) model:
□Applicable √ Not applicable
(3) Provision for bad debts accrued reversed or recovered
Changes in provision for bad debts are as follows:
Currency: Renminbi Yuan
Changes
Opening Closing
Category
balance Recovery or Accrual Write-off Others balance
reversal
Provision for bad debts made
121702.53121702.53
on an individual basis
Provision for bad debts made
on a collective basis by 17767875.15 8840848.32 6069569.40 20539154.07
credit risk characteristics
Total 17767875.15 8962550.85 6069569.40 20660856.60
293Significant recovery or reversal of provision for bad debts:
Currency: Renminbi Yuan
Amount recovered Reasons for Method of Basis and rationale for proportion of
Unit name
or reversed reversal recovery original provision for bad debts accrued
(4) Accounts receivable actually written off
Currency: Renminbi Yuan
Item Amount written off
Significant write-off of accounts receivable:
Currency: Renminbi Yuan
Nature of accounts Amount Reasons for Write-off procedures Whether caused by related-
Unit name
receivable written off write-off performed party transactions
Notes on the write-off of accounts receivable:
(5) Top 5 accounts receivable and contract assets with closing balances by debtor
Currency: Renminbi Yuan
Percentage of total Closing balance of bad
Closing balance Closing Closing balance of
closing balance of debt provision for accounts
Unit name of accounts balance of accounts receivable
accounts receivable receivable and impairment
receivable contract assets and contract assets
and contract assets allowances for contract assets
Customer I 36242452.82 36242452.82 7.65% 1813476.31
Customer II 30515379.09 30515379.09 6.44%
Customer III 25582173.45 25582173.45 5.40% 1336235.66
Customer IV 17332908.55 17332908.55 3.66%
Customer V 15517535.51 15517535.51 3.27% 775876.78
Total 125190449.42 125190449.42 26.42% 3925588.75
2 Other receivables
Currency: Renminbi Yuan
Item Closing balance Opening balance
Interest receivable 9404946.00
Dividends receivable 250844030.72 157621914.96
Other receivables 250844030.72 167026860.96
Total 9404946.00
294Section VIII Financial Report (1) Interest receivable
1) Classification of interest receivable
Currency: Renminbi Yuan
Item Closing balance Opening balance
2) Significant overdue interest
Currency: Renminbi Yuan
Borrower Closing balance Overdue time Overdue reasons Impairment determination basis
Other disclosures:
3) Disclosure by bad debt provision accrual method
□Applicable √ Not applicable
4) Provision for bad debts accrued reversed or recovered
Currency: Renminbi Yuan
Changes
Opening
Category Recovery or Disposal or Closing balancebalance Accrual Other changes
reversal write-off
Significant recovery or reversal of provision for bad debts:
Currency: Renminbi Yuan
Amount recovered Reasons for Method of Basis and rationale for original bad debt
Unit name
or reversed reversal recovery provision ratio
Other disclosures:
5) Interest receivable actually written off
Currency: Renminbi Yuan
Item Amount written-off
Significant write-off of interest receivable:
Currency: Renminbi Yuan
Nature of interest Amount Reasons for Write-off procedures Whether caused by related
Unit name
receivable written-off write-off performed party transactions
Notes on write-off of interest receivable:
Other disclosures:
295(2) Dividends receivable
1) Classification of dividends receivable
Currency: Renminbi Yuan
Item (Investee) Closing balance Opening balance
Longterm Medical 6071202.00
Hong Kong Winner 3333744.00
Total 9404946.00
2) Significant dividends receivable aged over 1 year
Currency: Renminbi Yuan
Impairment
Item (Investee) Closing balance Aging Reasons for non-recovery
determination basis
3) Disclosure by bad debt provision accrual method
□Applicable √ Not applicable
4) Provision for bad debts accrued reversed or recovered
Currency: Renminbi Yuan
Changes
Category Opening balance Recovery or Disposal or Closing balance
Accrual Other changes
reversal write-off
Significant recovery or reversal of provision for bad debts:
Currency: Renminbi Yuan
Amount recovered or Reasons for Method of Basis and rationale for original bad debt
Unit name
reversed reversal recovery provision ratio
Other disclosures:
5) Dividends receivable actually written off
Currency: Renminbi Yuan
Item Amount written off
296Section VIII Financial Report Significant write-off of dividends receivable
Currency: Renminbi Yuan
Nature of dividends Amount Reasons for Write-off procedures Whether caused by
Unit name
receivable written off write-off performed related-party transactions
Notes on write-off of dividends receivable:
Other disclosures:
(3) Other receivables
1) Classification by nature
Currency: Renminbi Yuan
Nature of other receivables Closing balance Opening balance
Compensation for investment and construction
215155320.00217155320.00
project of Winner Medical (Heyuan)
Amounts due from/to related parties 122793979.20 43000000.00
Deposits and guarantee deposits 19414485.78 3765362.49
Employee pretty cash 207660.62 340211.01
Others 2539999.13 2256800.14
Total 360111444.73 266517693.64
2) Disclosure by aging
Currency: Renminbi Yuan
Aging Closing balance Opening balance
Within 1 year (including 1 year) 98493242.48 49362373.64
1 to 2 years 46462882.25
2 to 3 years
3 to 4 years
4 to 5 years
Over 5 years 215155320.00 217155320.00
Total 360111444.73 266517693.64
2973) Disclosure by bad debt provision accrual method
Currency: Renminbi Yuan
Closing balance Opening balance
Category Book balance Impairment allowance Carrying Book balance Impairment allowance Carrying
Amount Proportion Amount Proportion amount Amount Proportion Amount Proportion amount
Other receivables
with provision for
215554919.0059.86%107977259.0050.09%107577660.00217155320.0081.48%108577660.0050.00%108577660.00
bad debts made on an
individual basis
Including:
Other receivables
with provision for
144556525.7340.14%1290155.010.89%143266370.7249362373.6418.52%318118.680.64%49044254.96
bad debts made on a
collective basis
Including:
No credit risk group 118782995.07 32.98% 0.00 0.00% 118782995.07 43000000.00 16.13% 43000000.00
Aging group 6758643.88 1.88% 339410.67 5.02% 6419233.21 2597011.16 0.97% 129850.56 5.00% 2467160.60
Deposits and
19014886.785.28%950744.345.00%18064142.443765362.481.42%188268.125.00%3577094.36
guarantee deposits
Total 360111444.73 100.00% 109267414.01 30.34% 250844030.72 266517693.64 100.00% 108895778.68 40.86% 157621914.96
Provision for bad debts is made on an individual basis:
Currency: Renminbi Yuan
Opening balance Closing balance
Name Impairment Impairment Accruing
Book balance Book balance Reasons for provision
allowance allowance proportion (%)
Zijin County People’s Government receivables
217155320.00108577660.00215155320.00107577660.0050.00%
Government aged over 5 years
The guarantee deposits
T&L Co. Ltd 399599.00 399599.00 100.00%
cannot be recovered.Total 217155320.00 108577660.00 215554919.00 107977259.00
Provision for bad debts is made on a collective basis:
Currency: Renminbi Yuan
Closing balance
Name
Book balance Impairment allowance Accruing proportion (%)
Within 1 year 6729074.43 336453.72 5.00%
1 to 2 years 29569.45 2956.95 10.00%
Total 6758643.88 339410.67
Basis for provision for bad debts:
298Section VIII Financial Report Provision for bad debts is made based on the general expected credit loss (ECL) model:
Currency: Renminbi Yuan
Stage 1 Stage 2 Stage 3
Provision for bad debts Lifetime ECLs Lifetime ECLs Total
12-month ECLs
(not yet credit-impaired) (credit-impaired)
Balance as at 1 January 318118.68 108577660.00 108895778.68
Balance as at 1 January in the current year
Accrual 1061997.97 399599.00 1461596.97
Reversal 69981.69 1000000.00 1069981.69
Others -19979.95 0.00 -19979.95
Balance as at 31 December 1290155.01 107977259.00 109267414.01
Basis for allocating provision for bad debts to each ECL stage and determining its proportion applicable to each stage:
Material changes in balance of provision for bad debts:
□Applicable √ Not applicable
4) Provision for bad debts accrued reversed or recovered
Provision for bad debts:
Currency: Renminbi Yuan
Changes
Category Opening balance Recovery or Closing balance
Accrual Write-off Others
reversal
Provision for bad debts 108895778.68 1461596.97 1069981.69 -19979.95 109267414.01
Total 108895778.68 1461596.97 1069981.69 -19979.95 109267414.01
Significant reversal of recovery of provision for bad debts:
Currency: Renminbi Yuan
Amount recovered or Reasons for Method of Basis and rationale for original bad debt
Unit name
reversed reversal recovery provision ratio
5) Other receivables actually written off
Currency: Renminbi Yuan
Item Amount written off
299Significant write-off of other receivables:
Currency: Renminbi Yuan
Nature of other Amount Reasons for Write-off procedures Whether caused by related-
Unit name
receivables written off write-off performed party transactions
Write-off of other receivables:
6) Top 5 other receivables with closing balances by debtor
Currency: Renminbi Yuan
Proportion of the Closing balance
Unit name Nature of other receivables Closing balance Aging total closing balance of provision for
of other receivables bad debts
Other receivables related to project of
First 215155320.00 Over 5 years 59.75% 107577660.00
Winner Medical (Heyuan)
Second Related parties within the Group 118782995.07 Within 1 year 1 to 2 years 32.99%
Third Deposits and guarantee deposits 15656693.47 Within 1 year 4.35% 782834.67
Amounts due from related parties outside
Fourth 4010984.13 Within 1 year 1.11% 200549.21
the scope of consolidation of the Group
Fifth Deposits and guarantee deposits 2311115.80 4 to 5 years 0.64% 115555.79
Total 355917108.47 98.84% 108676599.67
7) Recorded under other receivables due to centralised fund management
Currency: Renminbi Yuan
Other disclosures:
3. Long-term equity investment
Currency: Renminbi Yuan
Closing balance Opening balance
Item Impairment Impairment
Book balance Carrying amount Book balance Carrying amount
allowance allowance
Investment in
5431235747.65452807762.974978427984.685313477317.52138692158.625174785158.90
subsidiaries
Investment in
associates and 20987023.45 20987023.45 20712599.93 20712599.93
joint ventures
Total 5452222771.10 452807762.97 4999415008.13 5334189917.45 138692158.62 5195497758.83
300Section VIII Financial Report (1) Investment in subsidiaries
Currency: Renminbi Yuan
Changes
Opening balance Closing balance
Opening balance Impairment Closing balance
Investee of impairment Increase in Decrease in of impairment
(carrying amount) allowance charged Others (carrying amount)
allowance investment investment allowance
for the current period
Winner Medical (Huanggang) 267797569.52 540661.37 268338230.89 0.00
Winner Medical (Jingmen) 27430498.28 274046.54 27704544.82 0.00
Shenzhen Purcotton 136834432.61 14396870.09 151231302.70 0.00
Winner Medical (Chongyang) 33873168.82 430071.52 34303240.34 0.00
Winner Medical (Jiayu) 236645191.92 100368632.74 337013824.66 0.00
Winner Medical (Tianmen) 39947592.24 442359.29 40389951.53 0.00
Hong Kong Winner 1456720.00 1456720.00 0.00
Winner Medical (Yichang) 18651523.18 98302.05 18749825.23 0.00
Winner Medical Malaysia 4086994.48 0.00 4086994.48
Winner Medical (Heyuan) 100000000.00 100000000.00 0.00
Winner Medical (Wuhan) 800166877.31 294906.17 800461783.48 0.00
PureH2B 150000000.00 150000000.00 0.00 150000000.00
Longterm Medical 727540000.00 727540000.00 0.00
Winner Guilin 430272760.02 69908023.73 319481.72 430592241.74 69908023.73
Winner Medical (Hunan) 687339783.06 64697140.41 150102.04 164115604.35 523374280.75 228812744.76
Junjian Medical 192041719.33 35244.58 192076963.91 0.00
Shanghai Hongsong 39255994.87 73726.54 39329721.41 0.00
Nature Health (HK) 1285531327.74 1285531327.74 0.00
GRI 334025.48 334025.48
Total 5174785158.90 138692158.62 117758430.13 314115604.35 4978427984.68 452807762.97
301(2) Investment in associates and joint ventures
Currency: Renminbi Yuan
Changes
Opening Opening Closing
Investment Adjustments to Cash Impairment Closing balance
balance balance of Other balance
Investee Increase in Decrease in income or losses accumulated other dividends allowance of impairment
(carrying impairment equity Others (carrying
investment investment recognised under comprehensive or profits charged for the allowance
amount) allowance changes amount)
the equity method income declared current period
I. Joint ventures
II. Associates
Chengdu Winner
Likang Medical 20712599.93 274423.52 20987023.45
Products Co. Ltd.Subtotal 20712599.93 274423.52 20987023.45
Total 20712599.93 274423.52 20987023.45
The recoverable amount has been determined based on the fair value less costs of disposal.□Applicable √ Not applicable
The recoverable amount was determined according to the present value of the expected future cash flows.□Applicable √ Not applicable
Reasons for the apparent inconsistency between the aforementioned information and the data used in impairment testing in
prior years or external information
Reasons for the variance between the information utilised in the Company’s impairment testing in prior years and the actual
circumstances of the current year
(3) Other description
4. Revenue and cost of sales
Currency: Renminbi Yuan
20242023
Item
Revenue Costs of sales Revenue Costs of sales
Primary business 2646477541.83 1848649133.65 2530913125.43 1994278688.89
Other businesses 189879143.28 24304832.95 139685563.75 3164777.49
Total 2836356685.11 1872953966.60 2670598689.18 1997443466.38
302Section VIII Financial Report Breakdown of revenue and cost of sales:
Currency: Renminbi Yuan
Segment 1 Segment 2 Total
Classification of contracts
Revenue Costs of sales Revenue Costs of sales Revenue Costs of sales Revenue Costs of sales
Business type
Including:
Classified by geographical region
* Including:
Type of markets or clients
* Including:
Type of contracts
* Including:
Classified by timing of transfer of goods
* Including:
Classified by contract duration
* Including:
Classified by sales channels
* Including:
Total
Information about the Company’s performance obligations:
The nature of Amounts borne by Types of quality
Time to fulfill Significant
the goods the Whether a the Company that assurance provided
Item performance payment
Company promises principal are expected to be by the Company and
obligations terms
to transfer refunded to customers related obligations
Other description
Information related to the transaction price allocated to the remaining performance obligations:
At the end of the reporting period the amount of revenue related to performance obligations that have been contracted but not
yet performed or partially performed is RMB0.00. Of this amount: RMBxxx is expected to be recognised in xxx and RMBxx
303is expected to be recognised in xxx.
Significant contract changes or significant transaction price adjustments
Currency: Renminbi Yuan
Item Accounting treatment Impact on revenue
Other disclosures:
5. Investment income
Currency: Renminbi Yuan
Item 2024
Long-term equity investment income under the cost method 378164550.76 532715812.41
Long-term equity investment income under the equity method 274423.52 335565.86
Investment income from redemption of financial assets held for trading 77727098.57 83601581.10
Total 456166072.85 616652959.37
6. Others
XX. Supplemental information
1. Schedule of non-recurring profit or loss
√ Applicable □Not applicable
Currency: Renminbi Yuan
Item Amount Description
Profit or loss on disposal of non-current assets -12559464.36
Government grants recognised in profit or loss (excluding grants closely
related to the Company’s regular business operations aligned with national
44188509.32
policies and meeting specific criteria with a continuous impact on the
Company’s profit or loss)
Gains or losses on fair value changes of financial assets and liabilities held
by non-financial corporations and gains or losses on disposal of financial
55565073.76
assets and liabilities excluding effective hedging operations related to the
Company’s regular business operations
Other non-operating income and expenses other than those mentioned above -6751238.42
Less: Income tax effects 12120494.18
Amount attributable to non-controlling interests (net of tax) 5990794.61
Total 62331591.51 --
304Section VIII Financial Report Details of other items meeting the definition of non-recurring profit or loss:
□Applicable √ Not applicable
The Company has no other items meeting the definition of non-recurring profit or loss that require disclosure.Description on classifying the items listed in Interpretative Announcement No. 1 on Information Disclosure by Publicly
Offered Securities Companies – Non-recurring Profit or Loss as recurring Items:
√ Applicable □Not applicable
Item Amount (RMB) Reason
Compliance with national policies and regulations
Subsidy for freight of cotton out of Xinjiang
determined standards continuous impact on profit or loss
The Company’s daily fund management model continuous
Interest income from large certificates of deposit
impact on profit or loss
2. Return on equity (ROE) and earnings per share (EPS)
Earnings per share (in Renminbi Yuan)
Weighted average
Profit for the reporting period
return on equity (%) Basic earnings per Diluted earnings
share per share
Profit attributable to ordinary shareholders of the Company 6.74% 1.32 1.32
Profit attributable to ordinary shareholders of the Company
6.20%1.211.21
after excluding non-recurring items
3. Differences in accounting information prepared under domestic and foreign accounting standards
(1) Differences in profit and net assets between financial reports prepared under IAS and CAS
□Applicable √ Not applicable
(2) Differences in profit and net assets between financial reports prepared under foreign accounting standards and CAS
□Applicable √ Not applicable
(3) Explanation of the reasons for differences in accounting information prepared under domestic and foreign accounting
standards. Where accounting information audited by a foreign auditor is reconciled for differences the name of the auditor
shall be disclosed.□Applicable √ Not applicable
3054. Others
Appendix: Information on medical device products
(I) Statistics on the number of registration certificates for medical devices
Statistics on the number of domestic product registration certificate
Registration Categories Opening balance Number of additions Number of failures Closing balance
Class I 148 13 3 158
Category II 167 17 1 183
Category III 25 3 1 27
Hong Kong Macao Taiwan 9 7 0 16
Total 349 40 5 384
Statistics on the number of foreign product registration certificate
Registration Categories Opening balance Number of additions Number of failures Closing balance
Abroad 428 52 2 478
Note: The opening balances have been revised due to changes in the reporting basis and applicable rules.(II) Certificates of newly registered medical devices in 1. Domestic
S/N Product Registration category Certificate holder Date of issue
1 Hydrophilic fiber dressing Class III Winner Medical Co. Ltd. 14 March 2 Soft silicone foam dressing Class III Winner Medical Co. Ltd. 20 January 3 Negative pressure wound therapy material Class II Winner Medical Co. Ltd. 2 September 4 Medical radiation protective square towel Class I Winner Medical Co. Ltd. 19 February 5 Medical radiation protective glasses Class I Winner Medical Co. Ltd. 5 March 6 Medical fixation band Class I Winner Medical Co. Ltd. 5 December 7 Sterile medical nursing pad Class II Winner Medical (Huanggang) Co. Ltd. 30 July 8 Hypoallergenic breathable medical tape Class I Winner Medical (Huanggang) Co. Ltd. 15 January 9 Medical tape Class I Winner Medical (Huanggang) Co. Ltd. 7 February 10 Breathable adhesive bandage Class I Winner Medical (Huanggang) Co. Ltd. 9 December 11 Hypoallergenic breathable medical tape Class I Winner Medical (Chongyang) Co. Ltd. 18 March 12 Disposable dental instrument tray Class I Winner Medical (Chongyang) Co. Ltd. 9 May 13 Medical ultrasound coupling agent kit Class I Winner Medical (Chongyang) Co. Ltd. 11 October 14 Povidone-iodine cotton swab Class II Winner Medical (Jiayu) Co. Ltd. 19 August 15 Analyte cleaning solution Class I Winner Medical (Jiayu) Co. Ltd. 24 October 16 Silver alginate dressing – standard type Class IV Winner Medical Co. Ltd. 7 April 17 Silver CMC dressing – standard type Class IV Winner Medical Co. Ltd. 7 April 306Section VIII Financial Report S/N Product Registration category Certificate holder Date of issue
18 Silver CMC dressing – suture type Class IV Winner Medical Co. Ltd. 7 April 2 5 S e p t e m b e r
19 Gauze with suture (swabs pads balls rolls) Class II Winner Medical Co. Ltd.
Disposable sterile drug reconstitution
20 Class II Winner Medical (Hunan) Co. Ltd. 30 July syringe(rod-less plunger) with needle
21 Disposable infusion connector disinfection cap Class II Winner Medical (Hunan) Co. Ltd. 18 August Disposable sterile retracting self-destructing
22 Class III Winner Medical (Hunan) Co. Ltd. 31 March syringe with needle
23 Medical rubber gloves Class I Winner Guilin Latex Co. Ltd. 2 January 24 Examination finger cot Class I Winner Guilin Latex Co. Ltd. 4 June 25 Disposable sterile rubber surgical gloves Class II Winner Guilin Latex Co. Ltd. 22 April 26 Disposable sterile rubber surgical gloves Class II Winner Guilin Latex Co. Ltd. 22 April 1 1 N o v e m b e r
27 Disposable sterile rubber surgical gloves Class II Winner Guilin Latex Co. Ltd.
1 5 N o v e m b e r
28 Disposable sterile rubber surgical gloves Class II Winner Guilin Latex Co. Ltd.
Disposable silicone gel negative pressure Zhejiang Longterm Medical
29 Class II 27 February wound dressing Technology Co. Ltd.Zhejiang Longterm Medical
30 Medical adhesive tape Class I 18 March Technology Co. Ltd.Xi’an Longtemu Medical Technology
31 Umbilical sticker Class II 7 January Co. Ltd.Xi’an Longtemu Medical Technology
32 Silicone gel scar sheet Class II 3 December Co. Ltd.GRI Medical & Electronics
33 Disposable sterile surgical pack Class II 17 April Technology Co. Ltd.GRI Medical & Electronics
34 Disposable medical examination gloves Class II 13 May Technology Co. Ltd.GRI Medical & Electronics
35 Disposable patient transfer pad assembly Class II 6 June Technology Co. Ltd.GRI Medical & Electronics
36 Disposable sterile rubber surgical gloves Class II 19 June Technology Co. Ltd.GRI Medical & Electronics 26 September
37 Disposable drainage bag Class II
Technology Co. Ltd. Ministry of Health and Welfare Medical Device
38 Class II Sau-Tian Limited Company 4 March License (Procedure Pack)
Ministry of Health and Welfare Class I Medical
39 Class I Sau-Tian Limited Company 26 March Device License (Skin Pressure Protectors)
40 CERTIFICATE OF LISTING (Procedure Pack) Class II GRI-ALLESET LIMITED 14 April 3072. Overseas
Registration
S/N Region Certificate No. Name of certificate Certificate holder Product Date of issue Expiry date
category
MHRA Registration Class I non-sterile thread-free
1 UK 040502415560 Class Ins Winner Medical Co. Ltd. 5 April 30 June 2030
Confirmation Letter gauze pad
Class I non-sterile
MHRA Registration hydrocolloid adhesive bandage
2 UK 040501415590 Class Ins Winner Medical Co. Ltd. 5 April 30 June 2030
Confirmation Letter (acne patch heel patch wound
bandage)
Class I non-sterile instrument
MHRA Registration
3 UK 040502415560 Class Ins Winner Medical Co. Ltd. covers (instrument cover 5 April 30 June 2030
Confirmation Letter
Maya cover table cover)
040502415560&MHRA Registration Class I non-sterile non-woven
4 UK Class Ins Winner Medical Co. Ltd. 5 April 30 June 2030
040501415590 Confirmation Letter dressing
040502415560&MHRA Registration Class I non-sterile transparent
5 UK Class Ins Winner Medical Co. Ltd. 5 April 30 June 2030
040501415590 Confirmation Letter dressing
MHRA Registration Class I non-sterile surgical
6 UK 040501415590 Class Ins Winner Medical Co. Ltd. 8 April 30 June 2030
Confirmation Letter drape
Silver CMC dressing –
7 Malaysia GD7446025-205286 MDA Certificate Class D Winner Medical Co. Ltd. 13 June 12 June standard type
510(k) Premarket
8 US K250082 Class II Winner Medical Co. Ltd. Medical mask 18 June N/A
Notification
MDMA
Class I sterile skin protective
9 Saudi Arabia MDMA-2--1638 Authorization Class A Winner Medical Co. Ltd. 20 June 20 June 2028
film (wipe stick)
Number
MDMA
Silver CMC dressing
10 Saudi Arabia MDMA-2--1628 Authorization Class D Winner Medical Co. Ltd. 20 June 20 June 2028
(Standard&Reinforced&Extra)
Number
PHMB antimicrobial gauze
MDMA
dressing (conforming roll
11 Saudi Arabia MDMA-2--1875 Authorization Class D Winner Medical Co. Ltd. 27 June 27 June 2028
conforming pad non-woven
Number
pad)
MDA_GD8700925- Silver CMC dressing – suture
12 Malaysia MDA Certificate Class D Winner Medical Co. Ltd. 29 July 25 July 2030
208172 type
MDA_GD8692525- Silver CMC dressing (blended
13 Malaysia MDA Certificate Class D Winner Medical Co. Ltd. 29 July 25 July 2030
208172 fiber)
Silver silicone foam dressing
14 Malaysia GD8599125-209781 MDA Certificate Class D Winner Medical Co. Ltd. 26 August 25 August 2030
(bordered)
15 Malaysia GD9797825-212474 MDA Certificate Class D Winner Medical Co. Ltd. Silver alginate dressing 27 September 26 September 2030
Silver Silicone Foam Dressing
16 Malaysia GD8273625-212474 MDA Certificate Class D Winner Medical Co. Ltd. 27 September 26 September 2030
(Borderless)
510(k) Premarket
17 US K252001 Unclassified Winner Medical Co. Ltd. Collagen dressing 10 October N/A
Notification
18 Malaysia GC4520125-218853 MDA Certificate Class C Winner Medical Co. Ltd. Superabsorbent pad 5 December 4 December 2030
Winner Guilin Latex Co.
19 Zimbabwe B/279/29/26/Registration license N/A BLUE GLOD condom 10 April N/A
Ltd.
308Section VIII Financial Report Registration
S/N Region Certificate No. Name of certificate Certificate holder Product Date of issue Expiry date
category
T01 - GLOVES
European Winner (Jingzhou) Latex (EXCLUDING PERSONAL
20 G15 122831 0002 Rev. 00 EC Certificate(MDR) Class Is 4 July 3 July 2030
Union Products Co. Ltd. PROTECTIVE
EQUIPMENT - PPE)
MDN 1201 - Non-active
European Winner (Jingzhou) Latex non-implantable devices for
21 G15 122831 0002 Rev. 00 EC Certificate(MDR) Class IIa 4 July 3 July 2030
Union Products Co. Ltd. anaesthesia
emergency and intensive care
European NO.G10 083478 0030 ALGINATE Zhejiang Longterm Medical
22 Class IIb Gelling fibre dressing 23 January 11 April 2028
Union Rev.01 DRESSINGS Technology Co. Ltd.European NO.G10 083478 0030 SILICONE Zhejiang Longterm Medical
23 Class IIb Silicone dressing ultimate 23 January 11 April 2028
Union Rev.01 DRESSINGS Technology Co. Ltd.European NO.G10 083478 0030 HYDROGEL Zhejiang Longterm Medical
24 Class IIb Hydrogel dressing 23 January 11 April 2028
Union Rev.01 DRESSINGS Technology Co. Ltd.Zhejiang Longterm Medical
25 Canada 113159 HYDROGEL PAD Class II HYDROGEL dressing 24 April N/A
Technology Co. Ltd.EU Quality GRI MEDICAL
European
26 G10 056820 0041 Rev. 01 Management System Class IIa & ELECTRONIC Insufflation Tubing 8 May 24 April 2028
Union
Certificate (MDR) TECHNOLOGY CO. LTD.EU Quality GRI MEDICAL
European
27 G10 056820 0041 Rev. 01 Management System Class IIa & ELECTRONIC Suction Tip 8 May 24 April 2028
Union
Certificate (MDR) TECHNOLOGY CO. LTD.GRI MEDICAL
Registration
28 UK 031101412056 Class Is & ELECTRONIC Sponge Stick 11 March N/A
Confirmation Letter
TECHNOLOGY CO. LTD.GRI MEDICAL
Registration
29 UK 031101412056 Class Ins & ELECTRONIC Sponge Stick 11 March N/A
Confirmation Letter
TECHNOLOGY CO. LTD.GRI MEDICAL
Registration
30 UK 031101412056 Class IIa & ELECTRONIC Insufflation Tubing Set 11 March N/A
Confirmation Letter
TECHNOLOGY CO. LTD.GRI MEDICAL
Registration
31 UK 031101412056 Class IIa & ELECTRONIC Insufflation Tubing Set 11 March N/A
Confirmation Letter
TECHNOLOGY CO. LTD.GRI MEDICAL
Registration
32 UK 031401412603 Class Is & ELECTRONIC Ophthalmic Absorbents 14 March N/A
Confirmation Letter
TECHNOLOGY CO. LTD.GRI MEDICAL
Registration
33 UK 031401412603 Class Ins & ELECTRONIC Ophthalmic Absorbents 14 March N/A
Confirmation Letter
TECHNOLOGY CO. LTD.GRI MEDICAL
Registration Procedure Pack (MDR-GMDN
34 UK 071701429573 Class IIa & ELECTRONIC 17 July N/A
Confirmation Letter 33961)
TECHNOLOGY CO. LTD.GRI MEDICAL
35 UK 081901433994 Class IIa & ELECTRONIC Procedure Packs 19 August N/A
Registration
TECHNOLOGY CO. LTD.Confirmation Letter
309Registration
S/N Region Certificate No. Name of certificate Certificate holder Product Date of issue Expiry date
category
Class
36 Switzerland / / / Bulb Syringe 25 February N/A
IsClass Ins
Class
37 Switzerland / / / Ophthalmic Absorbents 25 February N/A
IsClass Ins
GRI MEDICAL
38 Netherlands NL-CA002--81623 CIBG Class Is & ELECTRONIC Bulb Syringe 31 January 24 April 2028
TECHNOLOGY CO. LTD.GRI MEDICAL
39 Netherlands NL-CA002--81627 CIBG Class Is & ELECTRONIC Ophthalmic Absorbents 31 January 24 April 2028
TECHNOLOGY CO. LTD.SPECIALIZED MEDICAL
United Arab CLASSIFICATION
40 39/Class Is EQUIPMENT TRADING Surgical Drape 4 December 3 December 2028
Emirates LETTER
LLC DUBAI
Registration of
41 Israel 22510046 medical equipment in Class Is Shevook Medical Equipment 6 November 31 December 2026
the declaration track
Registration of
42 Israel 22510045 medical equipment in Class Is Shevook Surgical packs 6 November 31 December 2026
the declaration track
Registration of
43 Israel 22510047 medical equipment in Class IIa Shevook Veress Needle 13 May 24 April 2028
the declaration track
GRI MEDICAL
Medical Device
44 Canada 112655 Class II & ELECTRONIC Tracheostomy kit 4 February 3 February 2027
Licence
TECHNOLOGY CO. LTD
GRI MEDICAL
Medical Device
45 Canada 112641 Class II & ELECTRONIC Enema Kit 3 February 2 February 2027
Licence
TECHNOLOGY CO. LTD
GRI MEDICAL
Medical Device
46 Canada 112640 Class II & ELECTRONIC laceration kit 3 February 2 February 2027
Licence
TECHNOLOGY CO. LTD
GRI MEDICAL
Medical Device
47 Canada 112666 Class II & ELECTRONIC Suturing Kit 6 February 5 February 2027
Licence
TECHNOLOGY CO. LTD
GRI MEDICAL
Medical Device
48 Canada 112593 Class II & ELECTRONIC Irrigation kit 23 January 22 January 2027
Licence
TECHNOLOGY CO. LTD
GRI MEDICAL
Medical Device Gentleheel Adult Incision
49 Canada 112964 Class II & ELECTRONIC 14 January 2026 26 March 2027
Licence Device
TECHNOLOGY CO. LTD
ALLESET SINGAPORE
50 Singapore DE0510638 Product Registration Class B Incision Device 25 April 24 April 2026
PTE. LTD.NYPRAX BUSINESS
51 Malaysia GA5214725-204698 MDA Certificate Class A Ophthalmic drape 4 December 8 June 2030
SOLUTIONS
NYPRAX BUSINESS
52 Malaysia GA4961725-208755 MDA Certificate Class A Equipment covers 18 September 9 August 2030
SOLUTIONS
310
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