[Important Notice, Table of Contents, and Definitions](index=2&type=section&id=Item%201.%20Important%20Notice%2C%20Table%20of%20Contents%2C%20and%20Definitions) This section provides essential declarations, a comprehensive report directory, and definitions of key terms for clarity [Important Notice](index=2&type=section&id=Important%20Notice) The Board of Directors, Supervisory Board, and senior management guarantee the truthfulness, accuracy, and completeness of the semi-annual report, including the financial statements - The company's Board of Directors, Supervisory Board, and senior management guarantee the truthfulness, accuracy, and completeness of the semi-annual report, with no false records, misleading statements, or major omissions[2](index=2&type=chunk) - The company's head, chief accountant, and head of the accounting department declare the financial report is true, accurate, and complete[2](index=2&type=chunk) - The company plans not to distribute cash dividends, bonus shares, or convert capital reserves into share capital for this semi-annual period[2](index=2&type=chunk) [Table of Contents](index=3&type=section&id=Table%20of%20Contents) This chapter lists the complete directory structure of the report, covering ten main sections from important notices to financial reports [Definitions](index=5&type=section&id=Definitions) This chapter defines common terms used in the report, including company names, major shareholders, actual controllers, regulatory bodies, and currency units, to ensure clear understanding - "The Company/Company/Jiugui Liquor Company" refers to Jiugui Liquor Co., Ltd[5](index=5&type=chunk) - "Zhonghuang Company" is the company's largest shareholder, and "COFCO Group" is the company's actual controller[5](index=5&type=chunk) [Company Profile and Key Financial Indicators](index=6&type=section&id=Item%202.%20Company%20Profile%20and%20Key%20Financial%20Indicators) This section presents the company's basic information and key financial performance metrics for the reporting period, highlighting significant growth in revenue and net profit [Company Profile](index=6&type=section&id=Item%201.%20Company%20Profile) This chapter introduces the basic information of Jiugui Liquor Co., Ltd., including its stock abbreviation, code, listing exchange, Chinese name, and legal representative - The company's stock abbreviation is "Jiuguijiu", stock code "000799", listed on the Shenzhen Stock Exchange[7](index=7&type=chunk) - The company's legal representative is Wang Hao[7](index=7&type=chunk) [Contact Person and Information](index=6&type=section&id=Item%202.%20Contact%20Person%20and%20Information) This chapter provides contact details for the company's Board Secretary and Securities Affairs Representative, including names, addresses, phone numbers, fax, and email - The Board Secretary is Tang Zhenyu, and the Securities Affairs Representative is Song Jiaqi[8](index=8&type=chunk) - The contact address is Securities Affairs Department, 13th Floor, Jiugui Liquor Building, No. 239 Shawan Road, Yuhua District, Changsha City, Hunan Province[8](index=8&type=chunk) [Other Information](index=6&type=section&id=Item%203.%20Other%20Information) This chapter states that the company's contact information, information disclosure, and document storage locations remained unchanged during the reporting period, referring to the 2020 annual report for details - The company's registered address, office address, website, and email address remained unchanged during the reporting period[9](index=9&type=chunk) - Information disclosure newspapers, designated website addresses, and report storage locations remained unchanged during the reporting period[10](index=10&type=chunk) [Key Accounting Data and Financial Indicators](index=6&type=section&id=Item%204.%20Key%20Accounting%20Data%20and%20Financial%20Indicators) This chapter presents the company's key accounting data and financial indicators for the first half of 2021, showing significant growth in operating revenue and net profit, a substantial increase in net cash flow from operating activities, and steady growth in total assets and net assets 2021 Semi-Annual Key Accounting Data and Financial Indicators | Indicator | Current Reporting Period (CNY) | Prior Year Period (CNY) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 1,713,733,739.76 | 722,162,770.74 | 137.31 | | Net Profit Attributable to Shareholders of Listed Company | 510,322,703.05 | 184,532,067.66 | 176.55 | | Net Profit Attributable to Shareholders of Listed Company (Excluding Non-Recurring Items) | 508,357,237.58 | 185,159,855.08 | 174.55 | | Net Cash Flow from Operating Activities | 679,337,445.30 | 233,437,945.23 | 191.01 | | Basic Earnings Per Share (CNY/share) | 1.5706 | 0.5679 | 176.56 | | Diluted Earnings Per Share (CNY/share) | 1.5706 | 0.5679 | 176.56 | | Weighted Average Return on Net Assets | 16.40 | 7.35 | 9.05 | | **Indicator** | **End of Current Reporting Period (CNY)** | **End of Prior Year (CNY)** | **Change from Prior Year End (%)** | | Total Assets | 5,126,768,767.53 | 4,337,013,154.32 | 18.21 | | Net Assets Attributable to Shareholders of Listed Company | 3,139,999,841.73 | 2,857,127,424.68 | 9.90 | [Differences in Accounting Data under Domestic and International Accounting Standards](index=7&type=section&id=Item%205.%20Differences%20in%20Accounting%20Data%20under%20Domestic%20and%20International%20Accounting%20Standards) This chapter states that during the reporting period, there were no differences in net profit and net assets between financial reports disclosed under International Accounting Standards or foreign accounting standards and those under Chinese Accounting Standards - During the reporting period, the company had no differences in net profit and net assets between financial reports disclosed under International Accounting Standards and Chinese Accounting Standards[13](index=13&type=chunk) - During the reporting period, the company had no differences in net profit and net assets between financial reports disclosed under foreign accounting standards and Chinese Accounting Standards[14](index=14&type=chunk) [Non-Recurring Gains and Losses Items and Amounts](index=7&type=section&id=Item%206.%20Non-Recurring%20Gains%20and%20Losses%20Items%20and%20Amounts) This chapter lists the company's non-recurring gains and losses items and their amounts for the first half of 2021, totaling **CNY 1,965,465.47**, and clarifies that no non-recurring items were reclassified as recurring 2021 Semi-Annual Non-Recurring Gains and Losses Items and Amounts | Item | Amount (CNY) | | :--- | :--- | | Gains and losses from disposal of non-current assets | 7,182.91 | | Government grants recognized in current profit or loss | 561,484.34 | | Other non-operating income and expenses apart from the above | 2,051,953.38 | | Less: Income tax impact | 655,155.16 | | Total | 1,965,465.47 | - During the reporting period, the company did not reclassify non-recurring gains and losses items as recurring gains and losses[15](index=15&type=chunk) [Management Discussion and Analysis](index=8&type=section&id=Item%203.%20Management%20Discussion%20and%20Analysis) This section provides an in-depth analysis of the company's business operations, core competencies, financial performance, and risk management strategies during the reporting period [Principal Business Activities During the Reporting Period](index=8&type=section&id=Item%201.%20Principal%20Business%20Activities%20During%20the%20Reporting%20Period) The company primarily engages in the production and sale of baijiu series products, with no changes in its main business or operating model, achieving rapid growth in revenue and net profit in the first half of 2021 through brand leadership, market expansion, increased production, organizational optimization, and park construction - The company primarily engages in the production and sale of baijiu series products, with no changes in its main business or operating model[16](index=16&type=chunk) - The first half of 2021 marked the company's "14th Five-Year Plan" opening year and "Innovation Breakthrough Year", achieving high-quality development through multi-faceted innovation[17](index=17&type=chunk) - The company actively carried out brand promotion activities, enhancing brand value and awareness by appearing at international forums and increasing mainstream media advertising[18](index=18&type=chunk) - Market expansion was strengthened by building an excellent dealer system, cultivating "hundred-million-yuan" model markets, enhancing terminal construction, and deepening channel penetration, alongside product upgrades and cultural and creative product development[19](index=19&type=chunk)[20](index=20&type=chunk) - In the first half of the year, base liquor production reached **7,042 tons**, a **5% year-on-year increase**, and the national standard for Fuyu-flavor baijiu was officially released[21](index=21&type=chunk) - Organizational structure was optimized, promoting younger cadres and strengthening team building, leading to a more professional, vocational, market-oriented, and younger workforce[22](index=22&type=chunk) - Construction of the new production area three project was accelerated, which will add **10,800 tons** of Qu liquor capacity upon completion[23](index=23&type=chunk) - The company's products primarily use a distribution model, with **CNY 99 million** in online channel sales and **CNY 1.62 billion** in offline channel sales in the first half of 2021[25](index=25&type=chunk) 2021 Semi-Annual Dealer Quantity Changes | Region | Dealer Quantity at End of 2020 | Changes During Reporting Period | Dealer Quantity in H1 2021 | | :--- | :--- | :--- | :--- | | North China | 73 | 37 | 110 | | East China | 183 | 23 | 206 | | South China | 50 | 42 | 92 | | Central China | 319 | 134 | 453 | | Other | 138 | 56 | 194 | | Subtotal | 763 | 292 | 1055 | - During the reporting period, sales revenue from the top five dealer customers was **CNY 655 million**, accounting for **38%** of total annual sales[27](index=27&type=chunk) 2021 Semi-Annual Main Product Production and Inventory (tons) | Item | Current Period Production Volume | Current Period Sales Volume | End of Period Inventory Volume | | :--- | :--- | :--- | :--- | | Neican Series | | | 412 | | Jiugui Series | | | 1640 | | Xiangquan Series | | | 725 | | Other Series | | | 389 | | Finished Liquor Inventory | | | 3312 | | Base Liquor Inventory | | | 44302 | [Analysis of Core Competencies](index=11&type=section&id=Item%202.%20Analysis%20of%20Core%20Competencies) The company's core competitiveness lies in its unique regional ecological resources, complex brewing process, exclusive natural cave storage, the uniqueness of Fuyu-flavor baijiu, and the perfect combination of its unadorned yet elegant packaging design with its exceptional liquor quality - The company possesses scarce regional ecological resources, with a unique brewing environment in the Xiangxi Wuling Mountains[31](index=31&type=chunk) - The brewing process is complex and unique, combining the advantages of large and small qu processes to form the Fuyu-flavor, which is exclusive nationwide[32](index=32&type=chunk) - Natural cave storage is utilized, where constant temperature and humidity allow the liquor to age naturally, resulting in a mellow and full-bodied quality[34](index=34&type=chunk) - The company pioneered the Fuyu-flavor of Chinese baijiu, integrating strong, light, and sauce aromas, possessing irreplaceable uniqueness[35](index=35&type=chunk) - The packaging design, created by art master Huang Yongyu, perfectly combines the unadorned yet elegant bottle with the exquisite liquor body[36](index=36&type=chunk) [Analysis of Principal Business](index=12&type=section&id=Item%203.%20Analysis%20of%20Principal%20Business) The company's principal business revenue and costs significantly increased year-on-year, primarily driven by sales growth in the Jiugui and Neican series products, while sales expenses rose sharply due to increased advertising and market service fees, and the gross profit margin for liquor sales remained stable Major Financial Data Year-on-Year Changes (Unit: CNY) | Indicator | Current Reporting Period | Prior Year Period | YoY Change (%) | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 1,713,733,739.76 | 722,162,770.74 | 137.31 | Primarily due to increased revenue from Jiugui and Neican series in current period | | Operating Cost | 338,587,645.44 | 143,813,912.99 | 135.43 | Primarily due to increased sales volume in current period | | Selling Expenses | 374,383,371.32 | 176,345,093.63 | 112.30 | Primarily due to increased advertising and market service fees in current period | | Administrative Expenses | 67,327,994.55 | 52,660,413.84 | 27.85 | Primarily due to increased employee compensation in current period | | Financial Expenses | -10,553,158.69 | -7,718,865.01 | -36.72 | Primarily due to increased interest income in current period | | Income Tax Expense | 173,973,462.03 | 59,071,869.48 | 194.51 | Primarily due to increased income tax payable in current period | | R&D Investment | 5,210,252.03 | 630,920.50 | 725.82 | Primarily due to increased outsourced cooperation expenses | | Net Cash Flow from Operating Activities | 679,337,445.30 | 233,437,945.23 | 191.01 | Primarily due to increased cash received from sales of goods | | Net Cash Flow from Investing Activities | -47,167,886.71 | -20,074,988.63 | -134.96 | Primarily due to increased cash paid for asset acquisition in current period | | Net Cash Flow from Financing Activities | -875,900.00 | -64,985,796.00 | 98.65 | Primarily due to dividend payments in prior period, not yet paid in current period | | Net Increase in Cash and Cash Equivalents | 631,293,651.36 | 148,377,172.25 | 325.47 | Primarily due to increased net cash flow from operating activities | Operating Revenue Composition (Unit: CNY) | Category | Current Reporting Period Amount | % of Operating Revenue | Prior Year Period Amount | % of Operating Revenue | YoY Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Operating Revenue | 1,713,733,739.76 | 100 | 722,162,770.74 | 100 | 137.31 | | **By Industry** | | | | | | | Liquor Sales | 1,709,152,804.72 | 99.73 | 718,945,516.90 | 99.55 | 137.73 | | Other Businesses | 4,580,935.04 | 0.27 | 3,217,253.84 | 0.45 | 42.39 | | **By Product** | | | | | | | Neican Series | 519,727,931.25 | 30.33 | 279,230,083.09 | 38.67 | 86.13 | | Jiugui Series | 979,998,410.39 | 57.18 | 362,278,498.34 | 50.17 | 170.51 | | Xiangquan Series | 90,930,955.75 | 5.31 | 66,502,948.20 | 9.21 | 36.73 | | Other Series | 118,495,507.33 | 6.91 | 10,933,987.27 | 1.51 | 983.74 | | Other Businesses | 4,580,935.04 | 0.27 | 3,217,253.84 | 0.45 | 42.39 | | **By Region** | | | | | | | Domestic | 1,704,039,604.72 | 99.43 | 718,945,516.90 | 99.55 | 137.02 | | International | 5,113,200.00 | 0.30 | 0.00 | 0.00 | 0.00 | | Other Businesses | 4,580,935.04 | 0.27 | 3,217,253.84 | 0.45 | 42.39 | Selling Expenses Composition (Unit: CNY) | Item | Current Reporting Period | Prior Year Period | YoY Change (%) | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Employee Compensation | 57,475,989.64 | 33,125,049.68 | 73.51 | Primarily due to increased personnel and sales revenue leading to higher sales staff wages in current period | | Advertising and Promotion Expenses | 130,471,140.50 | 69,882,757.93 | 86.70 | Primarily due to increased advertising investment in current period | | Promotion Expenses | 168,738,392.16 | 60,024,700.20 | 181.11 | Primarily due to increased promotional activities in current period | | Travel and Office Expenses | 9,715,373.15 | 5,514,037.49 | 76.19 | Primarily due to increased personnel and travel frequency in current period | | Other | 7,982,475.87 | 7,798,548.33 | 2.36 | | | Total | 374,383,371.32 | 176,345,093.63 | 112.30 | | [Analysis of Non-Principal Business](index=14&type=section&id=Item%204.%20Analysis%20of%20Non-Principal%20Business) This chapter states that the company had no non-principal business analysis content during the reporting period [Analysis of Assets and Liabilities](index=15&type=section&id=Item%205.%20Analysis%20of%20Assets%20and%20Liabilities) The company's total assets and net assets attributable to shareholders of the listed company both increased, with a rise in monetary funds and contract liabilities, while the proportion of accounts receivable and inventory to total assets slightly decreased Significant Changes in Asset Composition (Unit: CNY) | Item | Amount at End of Current Reporting Period | % of Total Assets | Amount at End of Prior Year | % of Total Assets | % Change in Proportion | Explanation of Significant Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Monetary Funds | 2,788,186,812.61 | 54.38 | 2,153,606,526.94 | 49.66 | 4.72 | | | Accounts Receivable | 99,416.92 | 0.00 | 3,350,049.52 | 0.08 | -0.08 | | | Inventories | 1,090,910,484.68 | 21.28 | 1,027,053,099.34 | 23.68 | -2.40 | | | Investment Properties | 60,600,942.57 | 1.18 | 61,666,979.42 | 1.42 | -0.24 | | | Long-term Equity Investments | 42,200,021.47 | 0.82 | 41,802,279.43 | 0.96 | -0.14 | | | Fixed Assets | 391,918,861.07 | 7.64 | 399,940,292.54 | 9.22 | -1.58 | | | Construction in Progress | 61,170,027.86 | 1.19 | 24,318,668.45 | 0.56 | 0.63 | | | Right-of-Use Assets | 6,167,127.15 | 0.12 | | | 0.12 | | | Contract Liabilities | 872,344,655.10 | 17.02 | 719,494,756.32 | 16.59 | 0.43 | | | Lease Liabilities | 6,106,459.94 | 0.12 | | | 0.12 | | - As of the end of the reporting period, there were no restrictions on the company's asset rights[44](index=44&type=chunk) [Analysis of Investment Status](index=15&type=section&id=Item%206.%20Analysis%20of%20Investment%20Status) The company did not undertake any significant equity investments, non-equity investments, securities investments, or derivative investments during the reporting period - The company had no securities investments during the reporting period[45](index=45&type=chunk) - The company had no derivative investments during the reporting period[45](index=45&type=chunk) [Significant Asset and Equity Disposals](index=16&type=section&id=Item%207.%20Significant%20Asset%20and%20Equity%20Disposals) The company did not dispose of any significant assets or equity during the reporting period - The company did not dispose of significant assets during the reporting period[46](index=46&type=chunk) - The company did not dispose of significant equity during the reporting period[46](index=46&type=chunk) [Analysis of Major Holding and Participating Companies](index=16&type=section&id=Item%208.%20Analysis%20of%20Major%20Holding%20and%20Participating%20Companies) This chapter discloses the financial information of the company's major subsidiary, Jiugui Liquor Sales Co., Ltd., whose operating revenue and net profit significantly impact the company's consolidated financial statements Major Subsidiary Financial Data (Unit: CNY) | Company Name | Company Type | Main Business | Registered Capital | Total Assets | Net Assets | Operating Revenue | Operating Profit | Net Profit | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Jiugui Liquor Sales Co., Ltd. | Subsidiary | Wholesale and Sales | 100,000,000.00 | 2,224,659,455.12 | 795,281,717.14 | 1,704,952,276.33 | 357,124,368.67 | 268,460,255.76 | - The company did not acquire or dispose of any subsidiaries during the reporting period[47](index=47&type=chunk) [Information on Structured Entities Controlled by the Company](index=17&type=section&id=Item%209.%20Information%20on%20Structured%20Entities%20Controlled%20by%20the%20Company) This chapter states that the company had no structured entities under its control during the reporting period - The company had no structured entities under its control during the reporting period[48](index=48&type=chunk) [Risks Faced by the Company and Countermeasures](index=17&type=section&id=Item%2010.%20Risks%20Faced%20by%20the%20Company%20and%20Countermeasures) The company faces risks from macroeconomic structural adjustments, stricter baijiu industry policies, and intense market competition, necessitating continuous enhancement of comprehensive competitiveness and market share expansion - At the macro level, China's economic structural adjustment and transformation, along with rising policy requirements for government consumption, industry standards, food safety, and environmental protection, pose challenges to the baijiu industry[48](index=48&type=chunk) - At the industry level, the overall overcapacity in China's baijiu industry and fierce market competition present challenges for the company to expand its national market share[48](index=48&type=chunk) [Corporate Governance](index=18&type=section&id=Item%204.%20Corporate%20Governance) This section details the company's corporate governance practices, including shareholder meetings, changes in key personnel, profit distribution, and incentive plans [Information on Annual General Meetings and Extraordinary General Meetings Held During the Reporting Period](index=18&type=section&id=Item%201.%20Information%20on%20Annual%20General%20Meetings%20and%20Extraordinary%20General%20Meetings%20Held%20During%20the%20Reporting%20Period) The company held its 2020 Annual General Meeting during the reporting period, with an investor participation rate of **33.51%**, and the resolutions have been disclosed Shareholder Meeting Information During the Reporting Period | Session | Meeting Type | Investor Participation Rate (%) | Date Held | Disclosure Date | Meeting Resolutions | | :--- | :--- | :--- | :--- | :--- | :--- | | 2020 Annual General Meeting | Annual General Meeting | 33.51 | June 17, 2021 | June 18, 2021 | See "Resolutions of Jiugui Liquor Co., Ltd. 2020 Annual General Meeting" disclosed on Juchao Information Network | [Changes in Directors, Supervisors, and Senior Management](index=18&type=section&id=Item%202.%20Changes%20in%20Directors%2C%20Supervisors%2C%20and%20Senior%20Management) There were no changes in the company's directors, supervisors, and senior management during the reporting period, with details available in the 2020 annual report - There were no changes in the company's directors, supervisors, and senior management during the reporting period[49](index=49&type=chunk) [Profit Distribution and Capital Reserve Conversion to Share Capital During the Reporting Period](index=18&type=section&id=Item%203.%20Profit%20Distribution%20and%20Capital%20Reserve%20Conversion%20to%20Share%20Capital%20During%20the%20Reporting%20Period) The company plans not to distribute cash dividends, bonus shares, or convert capital reserves into share capital for this semi-annual period - The company plans not to distribute cash dividends, bonus shares, or convert capital reserves into share capital for the semi-annual period[50](index=50&type=chunk) [Implementation of Equity Incentive Plans, Employee Stock Ownership Plans, or Other Employee Incentive Measures](index=18&type=section&id=Item%204.%20Implementation%20of%20Equity%20Incentive%20Plans%2C%20Employee%20Stock%20Ownership%20Plans%2C%20or%20Other%20Employee%20Incentive%20Measures) The company had no equity incentive plans, employee stock ownership plans, or other employee incentive measures and their implementation during the reporting period - The company had no equity incentive plans, employee stock ownership plans, or other employee incentive measures and their implementation during the reporting period[50](index=50&type=chunk) [Environmental and Social Responsibility](index=19&type=section&id=Item%205.%20Environmental%20and%20Social%20Responsibility) This section addresses the company's significant environmental issues and its commitment to social responsibility, including pollution control and compliance [Significant Environmental Issues](index=19&type=section&id=Item%201.%20Significant%20Environmental%20Issues) The company is listed as a key pollutant-discharging entity by environmental protection authorities, but its pollution control facilities operated effectively during the reporting period, with pollutant emissions meeting national and local standards, and no environmental violations occurred - The company and its subsidiaries are listed as key pollutant-discharging entities by environmental protection authorities[51](index=51&type=chunk) Major Pollutant Emission Information | Pollutant | Emission Concentration | Standard Implemented | Total Emissions | Approved Emission Quota | Exceedance Status | | :--- | :--- | :--- | :--- | :--- | :--- | | Sulfur Dioxide | 78.02 mg/m³ | 400 mg/m³ | 7.48 tons | 111 tons | None | | Nitrogen Oxides | 141.63 mg/m³ | 400 mg/m³ | 13.59 tons | 81 tons | None | | Chemical Oxygen Demand | 37.686 mg/L | 400 mg/L | 3.72 tons | 15.5 tons | None | | Ammonia Nitrogen | 1.646 mg/L | 30 mg/L | 0.14 tons | 2.33 tons | None | - The company's pollution control facilities operated well, pollutant emissions met national and local standards, no sudden pollution incidents occurred, and there were no environmental violations[21](index=21&type=chunk)[53](index=53&type=chunk) - Projects such as the new liquor warehouse, renovation of the distiller's grains processing workshop, and expansion of the wastewater treatment plant have all received environmental impact assessment approvals and hold pollutant discharge permits[54](index=54&type=chunk) - The company has prepared an emergency response plan for environmental incidents, filed it with environmental authorities, and conducts annual drills[55](index=55&type=chunk) - The company has prepared a self-monitoring environmental plan and uploaded it to the National Pollution Source Monitoring Information Management and Sharing Platform[56](index=56&type=chunk) [Significant Matters](index=20&type=section&id=Item%206.%20Significant%20Matters) This section covers various significant matters, including commitments, related party transactions, and legal proceedings, ensuring transparency in the company's operations [Commitments Fulfilled and Overdue Unfulfilled Commitments by the Company's Actual Controller, Shareholders, Related Parties, Acquirers, and the Company During and as of the End of the Reporting Period](index=20&type=section&id=Item%201.%20Commitments%20Fulfilled%20and%20Overdue%20Unfulfilled%20Commitments%20by%20the%20Company%27s%20Actual%20Controller%2C%20Shareholders%2C%20Related%20Parties%2C%20Acquirers%2C%20and%20the%20Company%20During%20and%20as%20of%20the%20End%20of%20the%20Reporting%20Period) During the reporting period, the company had no commitments from its actual controller, shareholders, related parties, acquirers, or the company itself that were either fulfilled or overdue and unfulfilled - During the reporting period, the company had no commitments from its actual controller, shareholders, related parties, acquirers, or the company itself that were either fulfilled or overdue and unfulfilled[57](index=57&type=chunk) [Non-Operating Funds Occupied by Controlling Shareholders and Other Related Parties from the Listed Company](index=20&type=section&id=Item%202.%20Non-Operating%20Funds%20Occupied%20by%20Controlling%20Shareholders%20and%20Other%20Related%20Parties%20from%20the%20Listed%20Company) During the reporting period, the company had no non-operating funds occupied by controlling shareholders or other related parties from the listed company - During the reporting period, the company had no non-operating funds occupied by controlling shareholders or other related parties from the listed company[57](index=57&type=chunk) [Irregular External Guarantees](index=20&type=section&id=Item%203.%20Irregular%20External%20Guarantees) The company had no irregular external guarantees during the reporting period - The company had no irregular external guarantees during the reporting period[57](index=57&type=chunk) [Appointment and Dismissal of Accounting Firms](index=20&type=section&id=Item%204.%20Appointment%20and%20Dismissal%20of%20Accounting%20Firms) The company's semi-annual financial report was not audited - The company's semi-annual report was not audited[57](index=57&type=chunk) [Explanation by the Board of Directors and Supervisory Board on "Non-Standard Audit Reports" for the Current Reporting Period](index=20&type=section&id=Item%205.%20Explanation%20by%20the%20Board%20of%20Directors%20and%20Supervisory%20Board%20on%20%22Non-Standard%20Audit%20Reports%22%20for%20the%20Current%20Reporting%20Period) The company had no non-standard audit reports during the reporting period, thus no explanation from the Board of Directors or Supervisory Board is required [Explanation by the Board of Directors on "Non-Standard Audit Reports" for the Previous Year](index=20&type=section&id=Item%206.%20Explanation%20by%20the%20Board%20of%20Directors%20on%20%22Non-Standard%20Audit%20Reports%22%20for%20the%20Previous%20Year) The company had no non-standard audit reports for the previous year, thus no explanation from the Board of Directors is required [Bankruptcy Reorganization Matters](index=20&type=section&id=Item%207.%20Bankruptcy%20Reorganization%20Matters) The company had no bankruptcy reorganization matters during the reporting period - The company had no bankruptcy reorganization matters during the reporting period[57](index=57&type=chunk) [Litigation Matters](index=20&type=section&id=Item%208.%20Litigation%20Matters) The company had no significant litigation or arbitration matters during the reporting period - The company had no significant litigation or arbitration matters during the current reporting period[58](index=58&type=chunk) [Penalties and Rectification](index=21&type=section&id=Item%209.%20Penalties%20and%20Rectification) The company had no penalties or rectification situations during the reporting period - The company had no penalties or rectification situations during the reporting period[58](index=58&type=chunk) [Integrity Status of the Company, its Controlling Shareholder, and Actual Controller](index=21&type=section&id=Item%2010.%20Integrity%20Status%20of%20the%20Company%2C%20its%20Controlling%20Shareholder%2C%20and%20Actual%20Controller) The company did not disclose the integrity status of itself, its controlling shareholder, or its actual controller during the reporting period [Significant Related Party Transactions](index=21&type=section&id=Item%2011.%20Significant%20Related%20Party%20Transactions) During the reporting period, the company engaged in daily operating-related procurement and sales transactions with related parties under the same actual controller, as well as financial business involving deposits in an affiliated financial company Related Party Transactions Related to Daily Operations (Procurement of Goods/Acceptance of Services) | Related Party | Related Transaction Content | Related Transaction Amount (CNY 10,000) | Approved Transaction Limit (CNY 10,000) | Exceeded Approved Limit | | :--- | :--- | :--- | :--- | :--- | | COFCO Rice Industry (Xiantao) Co., Ltd. | Raw Materials | 580.4 | 2,000 | No | | COFCO Rice Industry (Ningxia) Co., Ltd. | Raw Materials | 681.72 | 600 | Yes | | COFCO Hunan Anhua First Tea Factory Co., Ltd. | Raw Materials | 233.24 | 250 | No | | COFCO Foods Penglai Co., Ltd. | Raw Materials | 55.22 | 200 | No | | COFCO Coca-Cola Central China Beverages Co., Ltd. | Customized Water | 50.97 | 30 | Yes | | COFCO Nutrition and Health Research Institute Co., Ltd. | R&D Services | 409 | 800 | No | Related Party Transactions Related to Daily Operations (Sale of Goods/Provision of Services) | Related Party | Related Transaction Content | Related Transaction Amount (CNY 10,000) | | :--- | :--- | :--- | | COFCO Food Marketing Co., Ltd. | Baijiu Products | 703.03 | | COFCO Feed (Foshan) Co., Ltd. | Baijiu Products | 9 | | COFCO Feed (Maoming) Co., Ltd. | Baijiu Products | 3.99 | | COFCO Hunan Anhua First Tea Factory Co., Ltd. | Lease | 13.21 | | COFCO Foods Penglai Co., Ltd. | Lease | 9.35 | - The company and its subsidiaries had an ending balance of **CNY 521,760,978.70** in deposits with COFCO Finance Co., Ltd[63](index=63&type=chunk)[290](index=290&type=chunk) - During the reporting period, the company had no related party transactions involving asset or equity acquisitions or disposals[61](index=61&type=chunk) - During the reporting period, the company had no related party transactions involving joint external investments[62](index=62&type=chunk) - During the reporting period, the company had no related party creditor-debtor relationships[62](index=62&type=chunk) [Significant Contracts and Their Performance](index=23&type=section&id=Item%2012.%20Significant%20Contracts%20and%20Their%20Performance) The company had no significant contracts related to trusteeship, contracting, leasing, major guarantees, wealth management, daily operations, or other significant contracts during the reporting period - The company had no trusteeship situations during the reporting period[64](index=64&type=chunk) - The company had no contracting situations during the reporting period[64](index=64&type=chunk) - The company had no leasing situations during the reporting period[65](index=65&type=chunk) - The company had no significant guarantee situations during the reporting period[65](index=65&type=chunk) - The company had no wealth management activities during the reporting period[65](index=65&type=chunk) - The company had no significant contracts related to daily operations during the reporting period[65](index=65&type=chunk) - The company had no other significant contracts during the reporting period[65](index=65&type=chunk) [Explanation of Other Significant Matters](index=24&type=section&id=Item%2013.%20Explanation%20of%20Other%20Significant%20Matters) The company had no other significant matters requiring explanation during the reporting period - The company had no other significant matters requiring explanation during the reporting period[66](index=66&type=chunk) [Significant Matters of Company Subsidiaries](index=24&type=section&id=Item%2014.%20Significant%20Matters%20of%20Company%20Subsidiaries) The company did not disclose significant matters concerning its subsidiaries during the reporting period [Share Changes and Shareholder Information](index=25&type=section&id=Item%207.%20Share%20Changes%20and%20Shareholder%20Information) This section details the company's share capital structure, shareholder composition, and any changes in shareholdings or control during the reporting period [Share Change Information](index=25&type=section&id=Item%201.%20Share%20Change%20Information) The company's total share capital remained unchanged during the reporting period, with the number of unrestricted shares also remaining constant Share Change Information (Unit: shares) | Category | Quantity Before This Change | Proportion (%) | Increase/Decrease in This Change (＋, －) | Quantity After This Change | Proportion (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | II. Unrestricted Shares | 324,928,980 | 100.00 | | 324,928,980 | 100.00 | | 1. RMB Ordinary Shares | 324,928,980 | 100.00 | | 324,928,980 | 100.00 | | III. Total Shares | 324,928,980 | 100.00 | | 324,928,980 | 100.00 | - During the reporting period, there were no reasons, approval status, transfer status, or progress of share repurchase implementation for share changes[68](index=68&type=chunk) - During the reporting period, there were no changes in unrestricted shares[69](index=69&type=chunk) [Securities Issuance and Listing Information](index=25&type=section&id=Item%202.%20Securities%20Issuance%20and%20Listing%20Information) The company had no securities issuance and listing information during the reporting period [Number of Shareholders and Shareholding Information](index=26&type=section&id=Item%203.%20Number%20of%20Shareholders%20and%20Shareholding%20Information) As of the end of the reporting period, the company had **83,542** ordinary shareholders, with Zhonghuang Co., Ltd. being the largest shareholder, holding **31.00%** of the shares - The total number of ordinary shareholders at the end of the reporting period was **83,542**[70](index=70&type=chunk) Top Ten Ordinary Shareholders' Shareholding Information at End of Reporting Period (Unit: shares) | Shareholder Name | Shareholder Nature | Shareholding Proportion (%) | Number of Ordinary Shares Held at End of Reporting Period | Number of Unrestricted Ordinary Shares Held | | :--- | :--- | :--- | :--- | :--- | | Zhonghuang Co., Ltd. | State-owned Legal Person | 31.00 | 100,727,291 | 100,727,291 | | Bank of China Co., Ltd. - China Merchants CSI Liquor Index Graded Fund | Domestic Non-State-owned Legal Person | 4.79 | 15,576,898 | 15,576,898 | | Hong Kong Securities Clearing Company Limited | Overseas Legal Person | 3.94 | 12,804,146 | 12,804,146 | | China Construction Bank Co., Ltd. - Yinhua Wealthy Theme Mixed Securities Investment Fund | Domestic Non-State-owned Legal Person | 1.79 | 5,800,599 | 5,800,599 | | Bank of Communications Co., Ltd. - Huifutianfu Mid-Cap Value Selection Mixed Securities Investment Fund | Domestic Non-State-owned Legal Person | 1.08 | 3,500,000 | 3,500,000 | | Ji Jing | Domestic Natural Person | 0.93 | 3,034,300 | 3,034,300 | | China Construction Bank Co., Ltd. - Huifutianfu Consumer Industry Mixed Securities Investment Fund | Domestic Non-State-owned Legal Person | 0.83 | 2,700,000 | 2,700,000 | | Zhang Shouqing | Domestic Natural Person | 0.63 | 2,050,000 | 2,050,000 | | Zhao Jianping | Domestic Natural Person | 0.62 | 2,000,000 | 2,000,000 | | Wang Tie | Domestic Natural Person | 0.52 | 1,674,850 | 1,674,850 | - There are no associated relationships between the company's legal person shareholders, and they do not constitute parties acting in concert[71](index=71&type=chunk) [Changes in Shareholdings of Directors, Supervisors, and Senior Management](index=27&type=section&id=Item%204.%20Changes%20in%20Shareholdings%20of%20Directors%2C%20Supervisors%2C%20and%20Senior%20Management) There were no changes in the shareholdings of the company's directors, supervisors, and senior management during the reporting period, with details available in the 2020 annual report - There were no changes in the shareholdings of the company's directors, supervisors, and senior management during the reporting period[74](index=74&type=chunk) [Changes in Controlling Shareholder or Actual Controller](index=27&type=section&id=Item%205.%20Changes%20in%20Controlling%20Shareholder%20or%20Actual%20Controller) The company's controlling shareholder and actual controller remained unchanged during the reporting period - The company's controlling shareholder remained unchanged during the reporting period[74](index=74&type=chunk) - The company's actual controller remained unchanged during the reporting period[74](index=74&type=chunk) [Preferred Share Information](index=28&type=section&id=Item%208.%20Preferred%20Share%20Information) This section confirms that the company has no preferred shares [Preferred Share Information](index=28&type=section&id=Preferred%20Share%20Information) The company had no preferred shares during the reporting period - The company had no preferred shares during the reporting period[76](index=76&type=chunk) [Bond Information](index=29&type=section&id=Item%209.%20Bond%20Information) This section confirms that the company has no bond-related information [Bond Information](index=29&type=section&id=Bond%20Information) The company had no bond-related information during the reporting period - The company had no bond-related information during the reporting period[77](index=77&type=chunk) [Financial Report](index=30&type=section&id=Item%2010.%20Financial%20Report) This section presents the company's comprehensive financial statements, including balance sheets, income statements, cash flow statements, and statements of changes in owners' equity, along with detailed notes on accounting policies and specific financial items [Audit Report](index=30&type=section&id=Item%201.%20Audit%20Report) The company's semi-annual financial report was not audited - The company's semi-annual financial report was not audited[79](index=79&type=chunk) [Financial Statements](index=30&type=section&id=Item%202.%20Financial%20Statements) This chapter provides the company's consolidated and parent company balance sheets, income statements, cash flow statements, and statements of changes in owners' equity for the first half of 2021, comprehensively presenting its financial position and operating results Consolidated Balance Sheet Key Data (Unit: CNY) | Item | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Monetary Funds | 2,788,186,812.61 | 2,153,606,526.94 | | Notes Receivable | 421,754,781.19 | 387,820,976.64 | | Inventories | 1,090,910,484.68 | 1,027,053,099.34 | | Total Assets | 5,126,768,767.53 | 4,337,013,154.32 | | Contract Liabilities | 872,344,655.10 | 719,494,756.32 | | Total Liabilities | 1,986,768,925.80 | 1,479,885,729.64 | | Total Equity Attributable to Parent Company Owners | 3,139,999,841.73 | 2,857,127,424.68 | Consolidated Income Statement Key Data (Unit: CNY) | Item | 2021 Semi-Annual | 2020 Semi-Annual | | :--- | :--- | :--- | | Total Operating Revenue | 1,713,733,739.76 | 722,162,770.74 | | Total Operating Costs | 1,031,779,033.17 | 478,160,416.88 | | Operating Profit | 682,378,244.65 | 245,062,431.93 | | Total Profit | 684,296,165.08 | 243,603,937.14 | | Net Profit | 510,322,703.05 | 184,532,067.66 | | Basic Earnings Per Share | 1.5706 | 0.5679 | | Diluted Earnings Per Share | 1.5706 | 0.5679 | Consolidated Cash Flow Statement Key Data (Unit: CNY) | Item | 2021 Semi-Annual | 2020 Semi-Annual | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 679,337,445.30 | 233,437,945.23 | | Net Cash Flow from Investing Activities | -47,167,886.71 | -20,074,988.63 | | Net Cash Flow from Financing Activities | -875,900.00 | -64,985,796.00 | | Net Increase in Cash and Cash Equivalents | 631,293,651.36 | 148,377,172.25 | | Cash and Cash Equivalents at End of Period | 2,784,900,178.30 | 1,466,288,925.07 | [Company's Basic Information](index=54&type=section&id=Item%203.%20Company%27s%20Basic%20Information) This chapter outlines Jiugui Liquor Co., Ltd.'s establishment background, registered capital, stock listing status, parent company and actual controller, company domicile, industry, and business scope - Jiugui Liquor Co., Ltd. was established on April 28, 1997, with approval from the Hunan Provincial People's Government, and listed on the Shenzhen Stock Exchange on July 18, with stock code 000799[104](index=104&type=chunk) - The company's registered capital is **CNY 324,928,980.00**, and its total shares are **324,928,980.00**[104](index=104&type=chunk) - The parent company is Zhonghuang Co., Ltd., and the actual controller is COFCO Group Co., Ltd[104](index=104&type=chunk) - The company operates in the food processing industry, with its main business scope being the production and sale of baijiu series products and related import and export businesses[104](index=104&type=chunk) [Basis of Preparation for Financial Statements](index=54&type=section&id=Item%204.%20Basis%20of%20Preparation%20for%20Financial%20Statements) This chapter explains that the company's financial statements are prepared on a going concern basis, in accordance with relevant provisions of enterprise accounting standards and significant accounting policies and estimates - These financial statements are prepared on a going concern basis, in accordance with relevant provisions of enterprise accounting standards[105](index=105&type=chunk) - Management has assessed the company's ability to continue as a going concern for 12 months from the end of the reporting period, with no significant doubts identified[106](index=106&type=chunk) [Significant Accounting Policies and Estimates](index=54&type=section&id=Item%205.%20Significant%20Accounting%20Policies%20and%20Estimates) This chapter details the company's accounting policies and estimates for revenue recognition, financial instruments, inventories, fixed assets, intangible assets, employee compensation, government grants, deferred income tax, and leases, also disclosing adjustments for the first-time adoption of new lease standards starting in 2021 - The company's revenue primarily includes sales of goods and provision of services, with revenue recognized when customers obtain control of the related goods[106](index=106&type=chunk)[154](index=154&type=chunk)[155](index=155&type=chunk) - The company's financial assets are classified as measured at amortized cost, fair value through other comprehensive income, and fair value through profit or loss[121](index=121&type=chunk)[122](index=122&type=chunk) - Inventories include raw materials, work-in-progress, self-made semi-finished products, packaging materials, merchandise inventory, and goods in transit, valued at actual cost, and priced using the weighted average method at month-end for consumption and issuance[130](index=130&type=chunk) - Fixed assets are recorded at actual cost upon acquisition and depreciated using the straight-line method over their useful lives[140](index=140&type=chunk) - Intangible assets include land use rights, trademark use rights, software, and others, initially measured at cost, with finite-lived intangible assets amortized using the straight-line method[146](index=146&type=chunk)[147](index=147&type=chunk) - The company adopted "CAS 21 – Leases" from January 1, 2021, adjusting amounts for right-of-use assets, lease liabilities, and other related items[162](index=162&type=chunk) - Upon initial adoption of the lease standard, the consolidated balance sheet as of January 1, 2021, saw an increase of **CNY 4,244,031.37** in right-of-use assets and an increase of **CNY 4,244,031.37** in lease liabilities[168](index=168&type=chunk) [Taxation](index=78&type=section&id=Item%206.%20Taxation) This chapter lists the company's main tax categories and their applicable rates, including Value-Added Tax, Consumption Tax, Urban Maintenance and Construction Tax, Enterprise Income Tax, Education Surcharge, and Local Education Surcharge Major Tax Categories and Rates | Tax Category | Tax Base | Tax Rate (%) | | :--- | :--- | :--- | | Value-Added Tax | Sales of goods or provision of taxable services | 13.00 | | Consumption Tax | Sales amount of taxable consumer goods (ad valorem) | 20.00 | | Urban Maintenance and Construction Tax | Amount of turnover tax payable | 7.00 | | Enterprise Income Tax | Taxable income | 25.00 | | Education Surcharge | Amount of turnover tax payable | 3.00 | | Local Education Surcharge | Amount of turnover tax payable | 2.00 | [Notes to Consolidated Financial Statement Items](index=78&type=section&id=Item%207.%20Notes%20to%20Consolidated%20Financial%20Statement%20Items) This chapter provides detailed notes on major items in the consolidated financial statements, including monetary funds, notes receivable, accounts receivable, inventories, fixed assets, construction in progress, intangible assets, deferred income tax, accounts payable, contract liabilities, employee compensation payable, taxes payable, other payables, deferred income, share capital, capital reserves, surplus reserves, undistributed profits, operating revenue and costs, selling expenses, administrative expenses, R&D expenses, financial expenses, other income, investment income, credit impairment losses, asset impairment losses, non-operating income and expenses, income tax expenses, cash flow statement items, foreign currency monetary items, and government grants Monetary Funds Ending Balance (Unit: CNY) | Item | Ending Balance | | :--- | :--- | | Bank Deposits | 2,788,186,812.61 | | Total | 2,788,186,812.61 | | Total amount of funds restricted due to mortgage, pledge, or freezing | 3,286,634.31 | Notes Receivable Ending Balance (Unit: CNY) | Item | Ending Balance | | :--- | :--- | | Bank Acceptance Bills | 421,754,781.19 | | Total | 421,754,781.19 | - The amount of notes receivable endorsed or discounted and not yet due at the end of the period was **CNY 78,937,666.12**[177](index=177&type=chunk) Accounts Receivable Ending Balance (Unit: CNY) | Category | Book Balance | Provision for Bad Debts | Book Value | | :--- | :--- | :--- | :--- | | Accounts receivable for which bad debt provisions are accrued by portfolio | 287,995.37 | 188,578.45 | 99,416.92 | | Total | 287,995.37 | 188,578.45 | 99,416.92 | - Accounts receivable actually written off in the current period amounted to **CNY 14,664,048.50**, primarily due to the bankruptcy of Jiugui Liquor Henan Co., Ltd. and Jiugui Liquor Henan North Base Sales Co., Ltd[182](index=182&type=chunk)[183](index=183&type=chunk) Inventory Classification Ending Balance (Unit: CNY) | Item | Book Balance | Provision for Inventory Impairment | Book Value | | :--- | :--- | :--- | :--- | | Raw Materials | 8,265,668.57 | | 8,265,668.57 | | Work-in-Progress | 24,985,275.37 | | 24,985,275.37 | | Merchandise Inventory | 211,597,052.12 | 8,782,767.35 | 202,814,284.77 | | Goods in Transit | 1,524,917.66 | | 1,524,917.66 | | Self-Made Semi-Finished Products | 810,199,499.38 | | 810,199,499.38 | | Packaging Materials | 43,686,280.68 | 565,441.75 | 43,120,838.93 | | Total | 1,100,258,693.78 | 9,348,209.10 | 1,090,910,484.68 | Fixed Assets Ending Book Value (Unit: CNY) | Item | Buildings and Structures | Machinery and Equipment | Transportation Vehicles | Electronic Equipment | Other | Total | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Ending Book Value | 330,634,869.38 | 45,893,153.80 | 1,329,252.84 | 8,502,287.58 | 5,559,297.47 | 391,918,861.07 | Construction in Progress Ending Book Value (Unit: CNY) | Item | Book Balance | Book Value | | :--- | :--- | :--- | | New Distiller's Grains Processing Workshop Project | 7,692,383.75 | 7,692,383.75 | | 13,000-ton Base Liquor Warehouse Project | 21,747,121.07 | 21,747,121.07 | | 101 Factory Area Base Liquor Warehouse Combustible Gas and Flame Alarm System Project | 1,400,639.05 | 1,400,639.05 | | 303 Production Plant Area | 28,584,585.65 | 28,584,585.65 | | Other Minor Projects | 1,745,298.34 | 1,745,298.34 | | Total | 61,170,027.86 | 61,170,027.86 | Contract Liabilities Ending Balance (Unit: CNY) | Item | Ending Balance | | :--- | :--- | | Advance Receipts for Goods | 872,344,655.10 | | Total | 872,344,655.10 | Employee Compensation Payable Ending Balance (Unit: CNY) | Item | Ending Balance | | :--- | :--- | | I. Short-term Compensation | 79,745,473.42 | | II. Post-employment Benefits - Defined Contribution Plans | | | Total | 79,745,473.42 | Undistributed Profits Ending Balance (Unit: CNY) | Item | Current Period | | :--- | :--- | | Undistributed profits at end of prior period before adjustment | 1,137,075,101.51 | | Add: Net profit attributable to parent company owners for current period | 510,322,703.05 | | Dividends payable on ordinary shares | 227,450,286.00 | | Undistributed profits at end of period | 1,419,947,518.56 | Operating Revenue and Operating Costs (Unit: CNY) | Item | Current Period Revenue | Current Period Cost | Prior Period Revenue | Prior Period Cost | | :--- | :--- | :--- | :--- | :--- | | Principal Business | 1,709,152,804.72 | 336,528,782.47 | 718,945,516.90 | 142,365,257.93 | | Other Businesses | 4,580,935.04 | 2,058,862.97 | 3,217,253.84 | 1,448,655.06 | | Total | 1,713,733,739.76 | 338,587,645.44 | 722,162,770.74 | 143,813,912.99 | - As of the end of the current reporting period, the revenue corresponding to performance obligations from contracts signed but not yet performed or not yet fully performed is **CNY 872,344,655.10**, expected to be recognized in 2021[244](index=244&type=chunk) Selling Expenses (Unit: CNY) | Item | Current Period Amount | Prior Period Amount | | :--- | :--- | :--- | | Employee Compensation | 57,475,989.64 | 33,125,049.68 | | Advertising and Marketing Service Fees | 299,209,532.66 | 129,629,250.58 | | Other | 17,697,849.02 | 13,590,793.37 | | Total | 374,383,371.32 | 176,345,093.63 | R&D Expenses (Unit: CNY) | Item | Current Period Amount | Prior Period Amount | | :--- | :--- | :--- | | Outsourced Cooperation Expenses | 4,090,000.00 | 618,344.84 | | Materials and Other | 1,120,252.03 | 12,575.66 | | Total | 5,210,252.03 | 630,920.50 | Cash Flow Statement Supplementary Information (Unit: CNY) | Supplementary Information | Current Period Amount | Prior Period Amount | | :--- | :--- | :--- | | Net Profit | 510,322,703.05 | 184,532,067.66 | | Net Cash Flow from Operating Activities | 679,337,445.30 | 233,437,945.23 | | Net Increase in Cash and Cash Equivalents | 631,293,651.36 | 148,377,172.25 | [Interests in Other Entities](index=106&type=section&id=Item%208.%20Interests%20in%20Other%20Entities) This chapter discloses the company's interests in subsidiaries, joint ventures, and associates, including shareholding percentages and key financial information Composition of the Enterprise Group | Subsidiary Name | Principal Place of Business | Registered Place | Nature of Business | Shareholding Proportion (Direct) (%) | Method of Acquisition | | :--- | :--- | :--- | :--- | :--- | :--- | | Jiugui Liquor Sales Co., Ltd. | Jishou Zhenwuying | Jishou Zhenwuying | Wholesale, Sales | 100.00 | 100.00 | | Shenzhen Lixinyuan Technology Investment Co., Ltd. | Luohu District, Shenzhen | Luohu District, Shenzhen | Industrial Investment | 97.00 | 100.00 | Important Joint Ventures or Associates | Joint Venture or Associate Name | Principal Place of Business | Registered Place | Nature of Business | Shareholding Proportion (Direct) (%) | Accounting Method for Investment in Joint Ventures or Associates | | :--- | :--- | :--- | :--- | :--- | :--- | | Jiugui Dongcangjiu Sales Co., Ltd. | Zhuhai, Guangdong | Room 115, No. 121 Baoxing Road, Hengqin New Area, Zhuhai City | Wholesale and Retail | 50.00 | Equity Method | | Jiugui Liquor Hunan Sales Co., Ltd. | Changsha, Hunan | No. 8 Lutian Road, Lugu High-tech Development Zone, Changsha | Wholesale and Retail | 20.94 | Equity Method | Key Financial Information of Important Joint Ventures (Jiugui Dongcangjiu Sales Co., Ltd.) | Item | Ending Balance/Current Period Amount (CNY) | | :--- | :--- | | Current Assets | 60,198,183.77 | | Total Assets | 60,198,183.77 | | Total Liabilities | 1,389,806.11 | | Equity Attributable to Parent Company Shareholders | 58,808,377.66 | | Net Profit | 795,932.22 | [Risks Related to Financial Instruments](index=107&type=section&id=Item%209.%20Risks%20Related%20to%20Financial%20Instruments) The company's primary financial instrument risks include credit risk, liquidity risk, and market risk (interest rate risk, foreign exchange risk), which are managed through credit reviews, continuous monitoring of accounts receivable, and maintaining sufficient cash and cash equivalents - The company's main financial instruments include monetary funds, notes receivable, accounts receivable, other receivables, etc., with primary risks being credit risk, liquidity risk, and market risk[269](index=269&type=chunk) - The company only transacts with recognized and reputable third parties, conducts credit reviews for all credit transaction customers, and continuously monitors accounts receivable balances to mitigate bad debt risk[274](index=274&type=chunk) - The company manages liquidity risk by maintaining and monitoring sufficient cash and cash equivalents, and management believes there is no significant liquidity risk[274](index=274&type=chunk) - Except for bank deposits, the company has no significant interest-bearing assets, resulting in low interest rate risk; the company has no foreign currency transactions, thus no exchange rate risk due to currency fluctuations[277](index=277&type=chunk) [Disclosure of Fair Value](index=109&type=section&id=Item%2010.%20Disclosure%20of%20Fair%20Value) The company had no assets or liabilities measured at fair value at the end of the reporting period and explains the basis for determining fair value measurement levels - The company had no assets or liabilities measured at fair value at the end of the period[278](index=278&type=chunk) - The fair value of Level 1 items is determined by unadjusted quoted prices in active markets[279](index=279&type=chunk) - Level 2 inputs are directly or indirectly observable inputs for the relevant assets or liabilities, other than Level 1 inputs[280](index=280&type=chunk) - Level 3 inputs are unobservable inputs for the relevant assets or liabilities[281](index=281&type=chunk) [Related Parties and Related Party Transactions](index=110&type=section&id=Item%2011.%20Related%20Parties%20and%20Related%20Party%20Transactions) This chapter comprehensively discloses the company's parent company, subsidiaries, joint ventures, associates, and other related parties, and lists related party transactions during the reporting period, including purchases and sales of goods, provision and acceptance of services, key management personnel compensation, and related party receivables and payables - The company's parent company is Zhonghuang Co., Ltd., and the actual controller is COFCO Group Co., Ltd[282](index=282&type=chunk) - The company engages in procurement and sales transactions with related parties under the same actual controller, such as COFCO Rice Industry, COFCO Nutrition and Health Research Institute, and COFCO Hunan Anhua First Tea Factory[286](index=286&type=chunk)[288](index=288&type=chunk) - Key management personnel compensation amounted to **CNY 4.576 million** in the current period, compared to **CNY 2.6707 million** in the prior period[289](index=289&type=chunk) - The company and its subsidiaries had an ending balance of **CNY 521,760,978.70** in deposits with COFCO Finance Co., Ltd[290](index=290&type=chunk) Related Party Accounts Receivable Ending Balance (Unit: CNY) | Item Name | Related Party | Ending Balance Book Balance | Provision for Bad Debts | | :--- | :--- | :--- | :--- | | Accounts Receivable | COFCO Haiyou (Beijing) Co., Ltd. | 111,704.40 | 12,287.48 | | Total | | 111,704.40 | 12,287.48 | Related Party Payables Ending Balance (Unit: CNY) | Item Name | Related Party | Ending Book Balance | | :--- | :--- | :--- | | Contract Liabilities, Other Current Liabilities | COFCO Food Marketing Co., Ltd. | 1,306,673.30 | | Advance Receipts | COFCO Foods Penglai Co., Ltd. | 23,662.00 | | Other Payables | Jiugui Liquor Hunan Sales Co., Ltd. | 14,814,133.36 | | Accounts Payable | COFCO Rice Industry (Ningxia) Co., Ltd. | 704,289.60 | [Commitments and Contingencies](index=114&type=section&id=Item%2012.%20Commitments%20and%20Contingencies) As of the end of the reporting period, the company had no significant commitments or contingencies requiring disclosure - As of June 30, 2021, the company had no contingent matters requiring disclosure and no significant commitments that would materially affect its financial statements and operating conditions[293](index=293&type=chunk) - The company had no significant contingent matters requiring disclosure[294](index=294&type=chunk) [Events After the Balance Sheet Date](index=114&type=section&id=Item%2013.%20Events%20After%20the%20Balance%20Sheet%20Date) As of the date of approval for issuance of the financial statements, the company had no non-adjusting events after the balance sheet date requiring disclosure - As of the date of approval for issuance of these financial statements, the company had no non-adjusting events after the balance sheet date requiring disclosure[294](index=294&type=chunk) [Other Significant Matters](index=114&type=section&id=Item%2014.%20Other%20Significant%20Matters) The company and its subsidiaries do not conduct segment management, thus no separate segment reporting information is disclosed; apart from the already disclosed matters, the company has no other significant matters requiring disclosure - The company and its subsidiaries' baijiu production and operation businesses and evaluation systems are not managed by segment, thus no separate segment reporting information is disclosed[295](index=295&type=chunk) - As of June 30, 2021, apart from the aforementioned matters, the company had no other significant matters requiring disclosure[296](index=296&type=chunk) [Notes to Parent Company Financial Statement Items](index=115&type=section&id=Item%2015.%20Notes%20to%20Parent%20Company%20Financial%20Statement%20Items) This chapter provides detailed notes on major items in the parent company's financial statements, including other receivables, long-term equity investments, operating revenue and costs, and investment income Parent Company Other Receivables Ending Balance (Unit: CNY) | Item | Ending Balance | | :--- | :--- | | Other Receivables | 2,550,219.95 | | Total | 2,550,219.95 | Parent Company Long-term Equity Investments Ending Balance (Unit: CNY) | Item | Book Value | | :--- | :--- | | Investments in Subsidiaries | 245,350,000.00 | | Investments in Associates and Joint Ventures | 29,404,188.83 | | Total | 274,754,188.83 | Parent Company Operating Revenue and Operating Costs (Unit: CNY) | Item | Current Period Revenue | Current Period Cost | | :--- | :--- | :--- | | Principal Business | 1,004,864,431.32 | 343,135,203.46 | | Other Businesses | 3,668,263.43 | 1,263,029.47 | | Total | 1,008,532,694.75 | 344,398,232.93 | Parent Company Investment Income (Unit: CNY) | Item | Current Period Amount | | :--- | :--- | | Investment income from long-term equity investments accounted for using the cost method | 200,000,000.00 | | Investment income from long-term equity investments accounted for using the equity method | 397,966.11 | | Total | 200,397,966.11 | [Supplementary Information](index=118&type=section&id=Item%2016.%20Supplementary%20Information) This chapter provides supplementary financial information, including a detailed statement of non-recurring gains and losses, as well as return on net assets and earnings per share Current Period Non-Recurring Gains and Losses Detailed Statement (Unit: CNY) | Item | Amount | | :--- | :--- | | Gains and losses from disposal of non-current assets | 7,182.91 | | Government grants recognized in current profit or loss | 561,484.34 | | Other non-operating income and expenses apart from the above | 2,051,953.38 | | Less: Income tax impact | 655,155.16 | | Total | 1,965,465.47 | Return on Net Assets and Earnings Per Share | Profit for the Reporting Period | Weighted Average Return on Net Assets (%) | Basic Earnings Per Share (CNY/share) | Diluted Earnings Per Share (CNY/share) | | :--- | :--- | :--- | :--- | | Net profit attributable to ordinary shareholders of the company | 16.40 | 1.5706 | 1.5706 | | Net profit attributable to ordinary shareholders of the company after deducting non-recurring gains and losses | 16.33 | 1.5645 | 1.5645 |

Financial Performance - Net profit attributable to shareholders increased by 419.02% to CNY 146,242,291.03 for the reporting period[3] - Operating revenue for the period reached CNY 404,979,031.79, reflecting a growth of 56.37%[3] - The net cash flow from operating activities surged by 408.16% to CNY 286,236,963.22[3] - Basic earnings per share rose by 419.15% to CNY 0.4501[3] - Net profit attributable to shareholders was ¥146,242,291.03, representing a significant increase of 419.02% year-on-year[9] - The net profit excluding non-recurring gains and losses was ¥90,406,492.86, up 216.52% compared to the previous year[9] - Operating revenue for the year-to-date period reached CNY 661,532,740.23, an increase from CNY 599,707,482.17 in the previous year, reflecting a growth of approximately 10.3%[30] - Operating profit for the third quarter was CNY 312,091,574.38, significantly higher than CNY 80,048,461.99 in the same quarter last year, marking an increase of approximately 289.5%[31] - Total comprehensive income for the third quarter was CNY 283,836,202.24, compared to CNY 59,367,282.92 in the previous year, representing an increase of approximately 377.5%[32] Assets and Liabilities - Total assets increased by 12.80% to CNY 3,641,814,538.66 compared to the end of the previous year[3] - The total assets as of September 30, 2020, amounted to ¥3,641,814,538.66, compared to ¥3,228,583,367.04 at the end of 2019[13] - The company's current assets totaled ¥2,886,461,202.93, an increase from ¥2,466,819,871.14 at the end of 2019[12] - The total liabilities were ¥945,521,059.88, up from ¥798,129,042.01 at the end of 2019[14] - The equity attributable to shareholders of the parent company increased to ¥2,696,293,478.78 from ¥2,430,454,325.03 at the end of 2019[15] - The total liabilities of the company were CNY 784,429,088.86, compared to CNY 767,049,437.42 in the previous year, showing a slight increase of approximately 2%[18] - Total liabilities amounted to CNY 798,129,042.01, with current liabilities totaling CNY 784,156,868.77[42] Shareholder Information - The total number of ordinary shareholders at the end of the reporting period was 92,406[6] - The largest shareholder, Zhonghuang Co., Ltd., holds 31.00% of the shares[6] - The company did not engage in any repurchase transactions among the top ten shareholders during the reporting period[7] Research and Development - Research and development expenses for the quarter were CNY 4,889,392.32, a significant increase from CNY 24,314.42 in the same period last year, indicating a focus on innovation[20] - Research and development expenses for the current period were ¥5,520,312.82, a notable increase from ¥433,329.90 in the previous period, highlighting a focus on innovation[27] Cash Flow - The net cash flow from operating activities was ¥286,236,963.22, an increase of 408.16% year-on-year[9] - Cash flow from operating activities for the year-to-date period was CNY 1,462,166,903.43, up from CNY 1,082,025,548.41 in the previous year, indicating a growth of approximately 35.1%[33] - The net cash flow from operating activities for Q3 2020 was ¥519,674,908.45, a significant increase from ¥178,512,634.98 in the same period last year, reflecting a growth of approximately 191.5%[34] Future Outlook - The company plans to continue expanding its market presence and investing in new product development to drive future growth[24]

[Important Notice, Table of Contents, and Definitions](index=2&type=section&id=First%20Section%20Important%20Notice%2C%20Table%20of%20Contents%2C%20and%20Definitions) This section provides crucial disclaimers, defines key terms, and outlines the proposed profit distribution plan for 2019 [Important Notice](index=2&type=section&id=Important%20Notice) The company's board of directors, supervisory board, and senior management ensure the annual report's truthfulness, accuracy, and completeness, with the 2019 profit distribution plan proposing a cash dividend of CNY 2 per 10 shares (tax inclusive) based on 324,928,980 shares - The company's 2019 profit distribution plan proposes a cash dividend of **CNY 2 per 10 shares** (tax inclusive), with no bonus shares or capital reserve conversions[3](index=3&type=chunk) [Definitions](index=4&type=section&id=Definitions) This section defines key entities and terms used in the report, clarifying references to the company, its largest shareholder (Zhonghuang Co., Ltd.), and ultimate controller (COFCO Group Co., Ltd.) - The report explicitly states that the company's largest shareholder is **Zhonghuang Co., Ltd.**, and its ultimate controller is **COFCO Group Co., Ltd.**[5](index=5&type=chunk) [Company Profile and Key Financial Indicators](index=5&type=section&id=Second%20Section%20Company%20Profile%20and%20Key%20Financial%20Indicators) This section provides the company's basic information, key financial performance metrics, and details on non-recurring gains and losses [Company Information](index=5&type=section&id=I.%20Company%20Information) This section provides the company's basic business registration information, including its stock abbreviation "Jiuguijiu", stock code "000799", legal representative Wang Hao, and registered and office addresses Company Basic Information | Item | Information | | :--- | :--- | | Stock Abbreviation | Jiuguijiu | | Stock Code | 000799 | | Listing Exchange | Shenzhen Stock Exchange | | Legal Representative | Wang Hao | | Company Website | www.jiuguijiu000799.com | [Key Accounting Data and Financial Indicators](index=7&type=section&id=VI.%20Key%20Accounting%20Data%20and%20Financial%20Indicators) The company achieved significant growth in 2019, with operating revenue increasing by 27.38% and net profit attributable to shareholders by 34.50%, while net cash flow from operating activities surged by 79.93%, indicating strong operational quality and cash generation Key Financial Indicators | Key Financial Indicator | 2019 | 2018 | YoY Change | | :--- | :--- | :--- | :--- | | Operating Revenue (million CNY) | 1,511.90 | 1,186.88 | 27.38% | | Net Profit Attributable to Shareholders (million CNY) | 299.50 | 222.68 | 34.50% | | Net Cash Flow from Operating Activities (million CNY) | 381.91 | 212.26 | 79.93% | | Basic Earnings Per Share (CNY/share) | 0.9217 | 0.6853 | 34.50% | | Weighted Average Return on Net Assets | 13.02% | 10.70% | Increase 2.32 percentage points | | Total Assets (billion CNY) | 3.23 | 2.87 | 12.49% | [Quarterly Key Financial Indicators](index=8&type=section&id=VIII.%20Quarterly%20Key%20Financial%20Indicators) The company's 2019 quarterly financial performance remained stable, with the fourth quarter showing the most prominent operating revenue and net profit at CNY 544.01 million and CNY 115.49 million respectively, indicating strong year-end sales momentum Quarterly Financial Performance | Quarter | Operating Revenue (million CNY) | Net Profit Attributable to Shareholders (million CNY) | | :--- | :--- | :--- | | First Quarter | 346.07 | 72.65 | | Second Quarter | 362.83 | 83.18 | | Third Quarter | 258.99 | 28.18 | | Fourth Quarter | 544.01 | 115.49 | [Non-recurring Gains and Losses Items and Amounts](index=8&type=section&id=IX.%20Non-recurring%20Gains%20and%20Losses%20Items%20and%20Amounts) In 2019, the company's total non-recurring gains and losses amounted to CNY 12.13 million, primarily from gains and losses on entrusted investments or asset management, totaling CNY 13.50 million Non-recurring Gains and Losses | Item | 2019 Amount (million CNY) | 2018 Amount (million CNY) | | :--- | :--- | :--- | | Gains/Losses on Disposal of Non-current Assets | -0.01 | 1.03 | | Government Grants Recognized in Current Profit/Loss | 1.70 | 1.82 | | Gains/Losses from Entrusted Investments or Asset Management | 13.50 | 22.72 | | **Total** | **12.13** | **27.50** | [Company Business Overview](index=9&type=section&id=Third%20Section%20Company%20Business%20Overview) This section outlines the company's primary business activities, core product lines, and unique competitive advantages in the baijiu industry [Main Business](index=9&type=section&id=I.%20Main%20Business%20Activities%20During%20the%20Reporting%20Period) The company's main business involves the production and sale of baijiu series products, with core offerings including the "Neican", "Jiugui", and "Xiangquan" series, and no changes occurred in its main business or operating model during the reporting period - The company primarily engages in the production and sale of baijiu series products, featuring three core product lines: **"Neican"**, **"Jiugui"**, and **"Xiangquan"**[16](index=16&type=chunk) [Core Competitiveness Analysis](index=10&type=section&id=III.%20Core%20Competitiveness%20Analysis) The company's core competitiveness stems from its unique ecological environment, distinctive cultural heritage, and exclusive Fuyu-fragrance baijiu craftsmanship, collectively forming the quality assurance, taste support, and category capital of Jiuguijiu - The company is a pioneer in Chinese baijiu cultural marketing, a leader in cultural baijiu, the originator of cave-aged cultural baijiu, the creator of Fuyu-fragrance baijiu craftsmanship, and the initiator of the ceramic packaging era for baijiu[18](index=18&type=chunk) - Core competencies include: - **Ecological Environment**: Located in the 30-degree north latitude "golden belt" for brewing, possessing unique natural resources - **Cultural Connotation**: Packaging designed by master artist Huang Yongyu, integrating form, painting, poetry, and calligraphy, pioneering cultural baijiu - **Fuyu Fragrance Type**: Unique "523" craftsmanship (5 raw materials, 2 processes, 3 fragrance types harmoniously coexisting), forming a distinctive Fuyu fragrance category[19](index=19&type=chunk)[20](index=20&type=chunk)[21](index=21&type=chunk) [Discussion and Analysis of Operations](index=11&type=section&id=Fourth%20Section%20Discussion%20and%20Analysis%20of%20Operations) This section provides an overview of the company's operational performance, detailed analysis of its main business, expenses, R&D investments, cash flow, and future development outlook [Overview of Operations](index=11&type=section&id=I.%20Overview) In 2019, the company steadily implemented various operational strategies centered on "terminal construction year," achieving steady improvement in performance through innovative marketing, strengthened terminal presence, expanded production capacity, and focused strategic single products, with significant achievements in brand building, market layout, supply chain management, and team development - Focus on three strategic single products: **"52-degree 500mL Neican Baijiu"**, **"52-degree 500mL Hongtan Jiugui Baijiu"**, and **"52-degree 500mL Chuan Cheng Jiugui Baijiu"**[24](index=24&type=chunk) - Promoting the national operation of the "Neican" brand, "Neican Baijiu" achieved **CNY 331 million** in operating revenue during the reporting period, a **35.42% year-on-year increase**[29](index=29&type=chunk) - Production capacity continuously improved, with **8,100 tons** of Qujiu produced in 2019, a **60.5% year-on-year increase**, and packaging output reaching **9,400 tons**, up **25%** year-on-year[35](index=35&type=chunk) [Main Business Analysis](index=14&type=section&id=II.%20Main%20Business%20Analysis) In 2019, the company's main business revenue reached CNY 1.51 billion, a 27.14% year-on-year increase; by product, the "Jiugui Series" was the core revenue driver at 66.51%, while the "Neican Series" grew fastest at 35.42%; by region, Central China was the core market, contributing 58.03% of revenue, with the company's overall gross profit margin at 77.86% Operating Revenue Composition | Operating Revenue Composition | 2019 Amount (million CNY) | Proportion | YoY Change | | :--- | :--- | :--- | :--- | | **By Product** | | | | | Neican Series | 331.04 | 21.90% | 35.42% | | Jiugui Series | 1,005.41 | 66.51% | 27.61% | | Xiangquan Series | 148.94 | 9.85% | 36.20% | | **By Region** | | | | | North China Region | 369.29 | 24.43% | 28.50% | | Central China Region | 877.42 | 58.03% | 22.81% | Main Products/Regions Revenue, Cost, and Gross Margin | Main Product/Region | Operating Revenue (million CNY) | Operating Cost (million CNY) | Gross Profit Margin | Gross Profit Margin YoY Change | | :--- | :--- | :--- | :--- | :--- | | **Alcohol Sales** | **1,507.04** | **333.66** | **77.86%** | **-0.95%** | | Neican Series | 331.04 | 33.48 | 89.89% | -4.56% | | Jiugui Series | 1,005.41 | 197.54 | 80.35% | -1.10% | | Central China Region | 877.42 | 175.03 | 80.05% | 1.24% | - Sales to the top five customers totaled **CNY 527 million**, accounting for **34.87%** of the total annual sales[47](index=47&type=chunk)[48](index=48&type=chunk) [Expense Analysis](index=17&type=section&id=3.%20Expenses) In 2019, the company maintained good control over period expenses, with sales and administrative expenses increasing by 10.97% and 14.37% respectively, largely aligning with revenue growth, while R&D expenses surged by 177.38% primarily due to increased outsourced cooperation expenditures, reflecting the company's emphasis on technological innovation Expense Breakdown | Expense Item | 2019 (million CNY) | 2018 (million CNY) | YoY Change | Explanation for Significant Change | | :--- | :--- | :--- | :--- | :--- | | Sales Expenses | 383.88 | 345.92 | 10.97% | - | | Administrative Expenses | 146.52 | 128.11 | 14.37% | - | | R&D Expenses | 9.74 | 3.51 | 177.38% | Mainly due to increased outsourced cooperation expenditures | | Financial Expenses | -10.53 | -10.97 | 3.95% | - | [R&D Investment](index=18&type=section&id=4.%20R%26D%20Investment) The company's R&D investment significantly increased in 2019, totaling CNY 9.74 million, a 177.38% year-on-year growth, with R&D personnel increasing from 56 to 80, and the key R&D project "Neican Master Baijiu (15 Years)" becoming one of the first authentic vintage products certified by the National Wine Association R&D Investment Indicators | R&D Investment Indicator | 2019 | 2018 | Change Percentage | | :--- | :--- | :--- | :--- | | Number of R&D Personnel (persons) | 80 | 56 | 42.86% | | R&D Investment Amount (million CNY) | 9.74 | 3.51 | 177.38% | | R&D Investment as % of Operating Revenue | 0.64% | 0.30% | Increase 0.34 percentage points | [Cash Flow Analysis](index=18&type=section&id=5.%20Cash%20Flow) In 2019, the company's cash flow significantly improved, with net cash flow from operating activities increasing by 79.93% to CNY 381.91 million, primarily due to increased cash received from sales, and net cash flow from investing activities rising from CNY 102.32 million to CNY 378.14 million, mainly because recovered structured deposits exceeded expenditures Cash Flow Statement Key Items | Cash Flow Item | 2019 (million CNY) | 2018 (million CNY) | YoY Change | | :--- | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 381.91 | 212.26 | 79.93% | | Net Cash Flow from Investing Activities | 378.14 | 102.32 | 269.58% | | Net Cash Flow from Financing Activities | -48.71 | -48.72 | 0.03% | | Net Increase in Cash and Cash Equivalents | 711.34 | 265.85 | 167.57% | - The significant increase in net cash flow from operating activities was primarily due to increased cash received from sales[54](index=54&type=chunk) [Company's Future Development Outlook](index=21&type=section&id=IX.%20Company%27s%20Future%20Development%20Outlook) The company faces risks including macroeconomic adjustments, intensified industry competition, its relatively small scale, and the impact of the COVID-19 pandemic; it will adhere to its strategic mission as "China's cultural baijiu leader," focusing on three strategic single products, optimizing brands and products through precise communication and team building, aiming to establish "Neican Baijiu" as one of China's top four high-end baijiu brands and "Jiugui Baijiu" as a flagship brand of Chinese cultural baijiu - **Facing Risks**: - Macroeconomic and policy risks - Industry overcapacity and fierce market competition - Company's relatively small production and sales scale, weak market foundation outside the province - Impact of the novel coronavirus pandemic on consumption[60](index=60&type=chunk) - **2020 Operating Plan**: - **Strategic Leadership**: Uphold the strategic mission as "China's cultural baijiu leader" to build "China's No.1 cultural baijiu brand" - **Brand Optimization**: Focus on "Neican," "Hongtan Jiugui," and "Chuan Cheng Jiugui" as three strategic single products, and upgrade products - **Precise Communication**: Increase investment in online new media, focusing on content, events, and storytelling to enhance brand value - **Marketing Innovation**: Strengthen sales organization, reinforce model markets, and advance digital marketing and new retail channels[61](index=61&type=chunk)[66](index=66&type=chunk)[69](index=69&type=chunk)[72](index=72&type=chunk) [Important Matters](index=25&type=section&id=Fifth%20Section%20Important%20Matters) This section details the company's profit distribution, significant litigation, related party transactions, and social responsibility initiatives [Profit Distribution](index=25&type=section&id=I.%20Company%20Ordinary%20Share%20Profit%20Distribution%20and%20Capital%20Reserve%20Conversion%20to%20Share%20Capital) The company's 2019 profit distribution plan proposes a cash dividend of CNY 2.00 per 10 shares (tax inclusive), totaling approximately CNY 64.99 million in distributed profit, accounting for 21.70% of the net profit attributable to parent company shareholders, with the cash dividend policy remaining stable over the past three years, consistently above 20% Cash Dividend History | Dividend Year | Cash Dividend Amount (Tax Inclusive/million CNY) | Net Profit Attributable to Shareholders (million CNY) | Proportion of Net Profit | | :--- | :--- | :--- | :--- | | 2019 | 64.99 | 299.50 | 21.70% | | 2018 | 48.74 | 222.68 | 21.89% | | 2017 | 48.74 | 176.10 | 27.68% | [Significant Litigation and Arbitration Matters](index=29&type=section&id=XII.%20Significant%20Litigation%20and%20Arbitration%20Matters) During the reporting period, the company was involved in two significant lawsuits: a civil lawsuit regarding a CNY 100 million stolen deposit of a subsidiary, currently in second-instance trial, and a lawsuit filed by the company to dissolve the joint venture "Jiugui Dongcangjiu Sales Co., Ltd.", currently in first-instance trial - Regarding the **CNY 100 million** stolen deposit case of subsidiary Jiuguijiu Supply and Marketing Co., the related criminal case has been finally adjudicated, while in the civil lawsuit, the first-instance judgment ordered the bank to pay **CNY 59.34 million** plus interest, but the bank appealed, and the second-instance trial is ongoing[89](index=89&type=chunk)[90](index=90&type=chunk) - The company filed a lawsuit requesting the dissolution of the joint venture **"Jiugui Dongcangjiu Sales Co., Ltd."** due to its operational stagnation and shareholder disagreement; as of the end of the reporting period, the first-instance trial of this case is still ongoing[92](index=92&type=chunk) [Significant Related Party Transactions](index=32&type=section&id=XVI.%20Significant%20Related%20Party%20Transactions) The company's 2019 ordinary related party transactions primarily involved selling baijiu products to related parties, totaling CNY 38.63 million, which did not exceed the annual estimated limit of CNY 51 million, with transaction pricing adhering to unified market price principles Related Party Transactions | Related Party | Related Party Transaction Type | Related Party Transaction Amount (million CNY) | Approved Transaction Limit (million CNY) | | :--- | :--- | :--- | :--- | | Jiuguijiu Hunan Sales Co., Ltd. | Sales of Goods | 17.24 | 20.00 | | COFCO Food Marketing Co., Ltd. | Sales of Goods | 21.39 | 31.00 | | **Total** | **-** | **38.63** | **51.00** | [Social Responsibility](index=34&type=section&id=XVIII.%20Social%20Responsibility) The company actively fulfills its social responsibilities, particularly in targeted poverty alleviation, by building a deeply integrated industrial chain with the Xiangxi region, supporting local ecological sorghum bases and ceramic/printing enterprises, helping 140 impoverished households escape poverty in 2019, and receiving awards such as "Advanced Collective in Social Poverty Alleviation" - Through industrial poverty alleviation, the company entrusted over **70%** of its internal and external packaging material procurement to Xiangxi enterprises, creating over **2,000 jobs** and helping **140 impoverished households** escape poverty[101](index=101&type=chunk) Targeted Poverty Alleviation Achievements | Targeted Poverty Alleviation Effectiveness Indicator | Quantity/Status | | :--- | :--- | | Investment in Poverty Alleviation Projects for Industrial Development (million CNY) | 194.61 | | Number of Registered Impoverished People Helped to Escape Poverty (persons) | 140 | | Amount Invested in Sponsoring Impoverished Students (million CNY) | 0.11 | [Share Changes and Shareholder Information](index=38&type=section&id=Sixth%20Section%20Share%20Changes%20and%20Shareholder%20Information) This section details the company's share capital stability and provides an overview of its shareholders and ultimate controller [Share Changes](index=38&type=section&id=I.%20Share%20Changes) During the reporting period, the company's total share capital remained unchanged at 324,928,980 shares, all of which are unrestricted RMB ordinary shares - The company's total share count remained unchanged during the reporting period, with a total share capital of **324,928,980 shares**[110](index=110&type=chunk) [Shareholder and Ultimate Controller Information](index=39&type=section&id=III.%20Shareholder%20and%20Ultimate%20Controller%20Information) As of the end of the reporting period, the company had 72,919 shareholders, with Zhonghuang Co., Ltd. as the largest shareholder holding 31.00% of shares, and COFCO Group Co., Ltd. as the ultimate controller, a central state-owned enterprise Top Shareholders | Shareholder Name | Shareholder Nature | Shareholding Percentage | Shares Held at End of Reporting Period | | :--- | :--- | :--- | :--- | | Zhonghuang Co., Ltd. | State-owned Legal Person | 31.00% | 100,727,291 | | Bank of China Ltd. - China Merchants CSI Baijiu Index Graded Fund | Domestic Non-state-owned Legal Person | 1.91% | 6,197,076 | | Guotai Junan Securities Asset Management - Everbright Bank - Guotai Junan Jundeming Mixed Collective Asset Management Plan | Domestic Non-state-owned Legal Person | 1.82% | 5,901,944 | | Zhao Jianping | Domestic Natural Person | 1.69% | 5,500,000 | - The company's controlling shareholder is **Zhonghuang Co., Ltd.**, and its ultimate controller is **COFCO Group Co., Ltd.**[115](index=115&type=chunk)[117](index=117&type=chunk) [Preferred Shares Information](index=42&type=section&id=Seventh%20Section%20Preferred%20Shares%20Information) This section confirms that the company had no preferred shares during the reporting period [Preferred Shares Information](index=42&type=section&id=Preferred%20Shares%20Information) During the reporting period, the company had no preferred shares [Convertible Corporate Bonds Information](index=43&type=section&id=Eighth%20Section%20Convertible%20Corporate%20Bonds%20Information) This section confirms that the company had no convertible corporate bonds during the reporting period [Convertible Corporate Bonds Information](index=43&type=section&id=Convertible%20Corporate%20Bonds%20Information) During the reporting period, the company had no convertible corporate bonds [Directors, Supervisors, Senior Management, and Employees](index=44&type=section&id=Ninth%20Section%20Directors%2C%20Supervisors%2C%20Senior%20Management%2C%20and%20Employees) This section provides information on the shareholdings and changes of directors, supervisors, and senior management, as well as the overall employee structure [Shareholdings and Changes of Directors, Supervisors, and Senior Management](index=44&type=section&id=I.%20Shareholding%20Changes%20of%20Directors%2C%20Supervisors%2C%20and%20Senior%20Management) During the reporting period, none of the company's directors, supervisors, or senior management held company shares, nor were there any changes in their shareholdings, though some resigned or were dismissed due to work changes during the year - All directors, supervisors, and senior management held **zero shares** at both the beginning and end of the reporting period[121](index=121&type=chunk) - In 2019, Vice Chairman Li Shiyi, Supervisor Zhou Chenguang, Deputy General Manager Li Ming, and Assistant General Manager Wang Man resigned or were dismissed due to work changes[122](index=122&type=chunk) [Employee Information](index=50&type=section&id=V.%20Company%20Employee%20Information) As of the end of the reporting period, the company had 1,680 active employees; by professional composition, production personnel accounted for the largest proportion at 828, followed by sales personnel at 499, and most employees held college degrees or lower Employee Professional Composition | Professional Composition | Number (persons) | | :--- | :--- | | Production Personnel | 828 | | Sales Personnel | 499 | | Technical Personnel | 62 | | Financial Personnel | 26 | | Administrative Personnel | 265 | | **Total** | **1,680** | [Corporate Governance](index=52&type=section&id=Tenth%20Section%20Corporate%20Governance) This section describes the company's adherence to corporate governance standards and the diligent performance of its board committees [Basic Corporate Governance Status](index=52&type=section&id=I.%20Basic%20Corporate%20Governance%20Status) During the reporting period, the company operated strictly in accordance with the "Company Law," "Securities Law," and other regulations, with no significant discrepancies between its actual corporate governance status and regulatory requirements, maintaining independence from its controlling shareholder in business, personnel, assets, organization, and finance - There are no significant discrepancies between the company's actual corporate governance status and the normative documents issued by the China Securities Regulatory Commission[158](index=158&type=chunk) - The company maintains independence in five aspects: business, personnel, assets, organization, and finance, possessing a complete business system and the ability to operate independently directly in the market[159](index=159&type=chunk) [Performance of Board Special Committees](index=55&type=section&id=VI.%20Performance%20of%20Special%20Committees%20Under%20the%20Board%20of%20Directors%20During%20the%20Reporting%20Period) The company's four special committees under the board of directors—Audit, Strategic Development, Nomination, and Remuneration & Appraisal—all diligently performed their duties during the reporting period, with the Strategic Development Committee establishing the company's strategic positioning and core strategies, and the Audit Committee effectively overseeing financial reports, internal controls, and related party transactions - **Strategic Development Committee**: Established the strategic mission as "China's cultural baijiu leader," focusing on three strategic single products, and formulated core strategies such as "stable price and increased volume" and "simultaneous increase in volume and price"[167](index=167&type=chunk) - **Audit Committee**: Carefully reviewed the annual audit work plan and financial statements, fully communicated with the auditing firm, and supervised matters such as the company's internal controls and related party transactions, finding no significant deficiencies[165](index=165&type=chunk)[166](index=166&type=chunk) [Corporate Bonds Information](index=60&type=section&id=Eleventh%20Section%20Corporate%20Bonds%20Information) This section confirms that the company had no outstanding or defaulted corporate bonds during the reporting period [Corporate Bonds Information](index=60&type=section&id=Corporate%20Bonds%20Information) During the reporting period, the company had no publicly issued and listed corporate bonds on a stock exchange that were either unexpired or not fully redeemed by the approval date of the annual report [Financial Report](index=61&type=section&id=Twelfth%20Section%20Financial%20Report) This section presents the audit report and key financial statements, highlighting the company's financial health and performance [Audit Report](index=61&type=section&id=I.%20Audit%20Report) Tianzhi International Certified Public Accountants issued a standard unqualified audit opinion on the company's 2019 financial statements, concluding that the financial statements fairly present the company's financial position and operating results in all material respects, with key audit matters being "revenue recognition" and "existence of inventory" - The audit opinion type is a **standard unqualified opinion**[175](index=175&type=chunk)[176](index=176&type=chunk) - Key audit matters include: - **Revenue Recognition**: Due to revenue being a key performance indicator, there is a potential risk of misstatement regarding recognition in the appropriate financial reporting period - **Existence of Inventory**: Base liquor, as one of the company's most important assets, has a high year-end balance and accounts for a significant proportion of total assets[179](index=179&type=chunk)[180](index=180&type=chunk) [Main Financial Statements](index=64&type=section&id=II.%20Financial%20Statements) The financial statements indicate the company's healthy and strong growth in 2019, with total assets increasing to CNY 3.23 billion, total liabilities to CNY 798.13 million, and equity attributable to parent company owners rising to CNY 2.43 billion; the income statement shows total operating revenue of CNY 1.51 billion, up 27.4% year-on-year, and net profit of CNY 299.50 million, up 34.5%; the cash flow statement reports net cash inflow from operating activities of CNY 381.91 million, a 79.9% increase Consolidated Balance Sheet Key Items | Consolidated Balance Sheet Key Items | 2019 Year-end (million CNY) | 2018 Year-end (million CNY) | | :--- | :--- | :--- | | Cash and Cash Equivalents | 1,317.91 | 1,006.57 | | Inventories | 932.94 | 821.50 | | Total Assets | 3,228.58 | 2,870.05 | | Total Liabilities | 798.13 | 690.42 | | Total Equity Attributable to Parent Company Owners | 2,430.45 | 2,179.63 | Consolidated Income Statement Key Items | Consolidated Income Statement Key Items | 2019 (million CNY) | 2018 (million CNY) | | :--- | :--- | :--- | | Total Operating Revenue | 1,511.90 | 1,186.88 | | Total Operating Cost | 1,107.12 | 907.68 | | Operating Profit | 399.96 | 294.65 | | Net Profit | 299.50 | 222.68 | [Reference Documents Catalog](index=151&type=section&id=Thirteenth%20Section%20Reference%20Documents%20Catalog) This section lists all documents available for reference, including signed financial statements, original audit reports, and all publicly disclosed documents and announcements from the reporting period [Reference Documents Catalog](index=151&type=section&id=Reference%20Documents%20Catalog) This section lists documents available for reference, including signed accounting statements, original audit reports, and original copies of all publicly disclosed documents and announcements from the reporting period