[Financial Summary and Shareholder Information](index=1&type=section&id=I.%20Key%20Financial%20Data) This section provides an overview of the company's key financial performance and shareholder structure for the reporting period [Overview of Core Financial Data](index=1&type=section&id=I.%20Key%20Financial%20Data) In Q1 2022, the company's operating revenue slightly increased by 2.25% year-on-year, but net profit attributable to shareholders turned from profit to loss, decreasing significantly by 126.77% to a net loss of RMB 9.21 million | Indicator | Current Period | Prior Year Period | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Operating Revenue (RMB) | 514,221,591.43 | 502,915,615.88 | 2.25% | | Net Profit Attributable to Shareholders (RMB) | -9,212,631.16 | 34,407,778.01 | -126.77% | | Net Profit Attributable to Shareholders, Excluding Non-Recurring Gains/Losses (RMB) | -7,124,478.69 | 31,986,818.93 | -122.27% | | Net Cash Flow from Operating Activities (RMB) | 54,833,515.09 | -45,022,660.52 | 221.79% | | Basic Earnings Per Share (RMB/share) | -0.01 | 0.05 | -120.00% | | Total Assets (RMB) | 3,491,352,950.95 | 3,411,289,000.09 | 2.35% (vs. end of prior year) | | Total Equity Attributable to Shareholders (RMB) | 1,582,296,189.58 | 1,591,530,871.09 | -0.58% (vs. end of prior year) | [Non-Recurring Gains and Losses](index=1&type=section&id=(II.)%20Non-Recurring%20Gains%20and%20Losses%20and%20Amounts) During the reporting period, the company's total non-recurring gains and losses amounted to RMB -2.088 million, primarily due to net losses from other non-operating income and expenses | Item | Amount for Current Period (RMB) | | :--- | :--- | | Gains/Losses on Disposal of Non-Current Assets | -615,682.90 | | Government Grants Included in Current Period P&L | 473,769.54 | | Other Non-Operating Income and Expenses Excluding the Above | -2,391,010.74 | | **Total** | **-2,088,152.47** | [Changes and Reasons for Key Financial Indicators](index=2&type=section&id=(III.)%20Changes%20and%20Reasons%20for%20Key%20Accounting%20Data%20and%20Financial%20Indicators) During the reporting period, several financial indicators changed significantly year-on-year, driven by increased prepayments, new bank loans, higher consulting fees, and increased intercompany receivables - Prepayments increased by **106.03%** year-on-year, primarily due to increased payments for materials[6](index=6&type=chunk) - Long-term borrowings increased by **13,660.71%** year-on-year, primarily due to new bank loans[6](index=6&type=chunk) - Administrative expenses increased by **45.44%** year-on-year, primarily due to higher consulting fees[6](index=6&type=chunk) - Net cash flow from operating activities increased by **221.79%** year-on-year, primarily due to a significant increase in intercompany receivables compared to the prior period[6](index=6&type=chunk) [Shareholder Information](index=2&type=section&id=II.%20Shareholder%20Information) As of the end of the reporting period, the company's top ten shareholders were all domestic natural persons, with controlling shareholder Jiang Tianwu holding 15.36% of shares, and several top shareholders having pledged a portion of their shares | Shareholder Name | Shareholding Percentage | Number of Shares Held | Number of Pledged Shares | | :--- | :--- | :--- | :--- | | Jiang Tianwu | 15.36% | 116,088,490 | 30,000,000 | | Wu Jing | 10.75% | 81,252,932 | 0 | | Li Jianwei | 6.85% | 51,758,982 | 40,000,000 | | Li Jing | 5.67% | 42,866,928 | 42,700,000 | | Zhang Aichun | 5.30% | 40,089,976 | 40,000,000 | - The company is unaware of any related party relationships or concerted actions among the top ten shareholders[9](index=9&type=chunk) [Quarterly Financial Statements](index=3&type=section&id=IV.%20Quarterly%20Financial%20Statements) This section presents the company's consolidated financial statements for the first quarter, including the balance sheet, income statement, and cash flow statement [Consolidated Balance Sheet](index=3&type=section&id=1.%20Consolidated%20Balance%20Sheet) As of March 31, 2022, the company's total assets were RMB 3.491 billion, a 2.35% increase from the beginning of the year, with total liabilities at RMB 1.896 billion | Item | Period-End Balance (RMB) | Year-Beginning Balance (RMB) | | :--- | :--- | :--- | | **Assets:** | | | | Total Current Assets | 1,780,800,329.77 | 1,752,554,333.57 | | Total Non-Current Assets | 1,710,552,621.18 | 1,658,734,666.52 | | **Total Assets** | **3,491,352,950.95** | **3,411,289,000.09** | | **Liabilities and Owners' Equity:** | | | | Total Current Liabilities | 1,792,092,318.61 | 1,733,147,172.55 | | Total Non-Current Liabilities | 103,818,077.55 | 74,605,375.75 | | **Total Liabilities** | **1,895,910,396.16** | **1,807,752,548.30** | | Total Equity Attributable to Parent Company Shareholders | 1,582,296,189.58 | 1,591,530,871.09 | | **Total Owners' Equity** | **1,595,442,554.79** | **1,603,536,451.79** | [Consolidated Income Statement](index=6&type=section&id=2.%20Consolidated%20Income%20Statement) During the reporting period, the company achieved operating revenue of RMB 514 million, a 2.25% year-on-year increase, but total operating costs rose by 11.0%, leading to an operating loss of RMB 12.54 million | Item | Amount for Current Period (RMB) | Amount for Prior Period (RMB) | | :--- | :--- | :--- | | I. Total Operating Revenue | 514,221,591.43 | 502,915,615.88 | | II. Total Operating Costs | 523,392,177.71 | 471,559,305.43 | | Of which: Operating Costs | 317,231,945.68 | 301,184,514.64 | | Selling Expenses | 138,827,677.10 | 116,550,108.64 | | Administrative Expenses | 34,309,695.83 | 23,589,841.21 | | III. Operating Profit (Loss indicated by "-") | -12,540,796.97 | 38,593,647.73 | | IV. Total Profit (Total Loss indicated by "-") | -14,931,807.71 | 39,503,016.22 | | V. Net Profit (Net Loss indicated by "-") | -8,102,942.05 | 34,851,932.89 | | Net Profit Attributable to Parent Company Shareholders | -9,212,631.16 | 34,407,778.01 | [Consolidated Cash Flow Statement](index=8&type=section&id=3.%20Consolidated%20Cash%20Flow%20Statement) In Q1 2022, net cash flow from operating activities significantly improved to RMB 54.83 million, while investing and financing activities resulted in net outflows, leading to a net decrease in cash and cash equivalents | Item | Amount for Current Period (RMB) | Amount for Prior Period (RMB) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 54,833,515.09 | -45,022,660.52 | | Net Cash Flow from Investing Activities | -92,677,045.66 | -43,005,392.23 | | Net Cash Flow from Financing Activities | -73,958,304.68 | -29,948,014.32 | | Net Increase in Cash and Cash Equivalents | -111,900,452.54 | -117,976,067.07 | | Cash and Cash Equivalents at Period-End | 236,375,494.19 | 349,217,788.10 | [Other Matters and Audit Opinion](index=3&type=section&id=III.%20Other%20Significant%20Matters) This section covers any other significant matters not previously discussed and the audit status of the quarterly report [Other Significant Matters](index=3&type=section&id=III.%20Other%20Significant%20Matters) During the reporting period, the company did not disclose any other significant matters requiring special mention - The company had no other significant matters requiring disclosure during the reporting period[10](index=10&type=chunk) [Audit Opinion](index=9&type=section&id=(II.)%20Audit%20Report) This quarterly report is unaudited - The company's first-quarter report is unaudited[21](index=21&type=chunk)

[Key Financial Data](index=1&type=section&id=I%E3%80%81Key%20Financial%20Data) [Core Financial Indicators](index=1&type=section&id=%28I%29%20Key%20Accounting%20Data%20and%20Financial%20Indicators) The company's Q3 2021 saw 12.82% revenue growth but a **19.62 million RMB** net loss, with year-to-date operating cash flow at **-89.73 million RMB**, a **159.15% decrease**, indicating significant cash flow pressure Key Financial Indicators for the First Three Quarters of 2021 | Indicator | Year-to-Date (RMB) | YoY Change (%) | | :--- | :--- | :--- | | Operating Revenue | 1,529,888,170.68 | 12.82% | | Net Profit Attributable to Shareholders of Listed Company | 27,477,683.97 | 8.77% | | Net Profit Attributable to Shareholders Excluding Non-Recurring Gains/Losses | 22,285,487.69 | 58.26% | | Net Cash Flow from Operating Activities | -89,731,688.13 | -159.15% | | Total Assets | 3,695,611,800.32 | 9.26% (vs. end of prior year) | | Owners' Equity Attributable to Shareholders of Listed Company | 1,786,822,432.21 | -1.00% (vs. end of prior year) | Q3 2021 Single Quarter Financial Indicators | Indicator | Current Period (RMB) | YoY Change (%) | | :--- | :--- | :--- | | Operating Revenue | 513,557,941.23 | 9.34% | | Net Profit Attributable to Shareholders of Listed Company | -19,621,984.50 | 4.10% | [Non-Recurring Gains and Losses](index=2&type=section&id=%28II%29%20Non-Recurring%20Gains%20and%20Losses%20Items%20and%20Amounts) Year-to-date, total non-recurring gains and losses were **5.19 million RMB**, mainly from government grants, with adjusted net profit attributable to shareholders at **22.29 million RMB**, up **58.26%**, showing improved core business profitability Details of Non-Recurring Gains and Losses (Year-to-Date) | Item | Amount (RMB) | | :--- | :--- | | Gains/Losses on Disposal of Non-Current Assets | 276,454.31 | | Government Grants Included in Current Period P&L | 6,108,464.00 | | Net Other Non-Operating Income and Expenses | -474,561.14 | | Less: Income Tax and Minority Interest Impact | 1,992,163.26 | | **Total** | **5,192,196.28** | [Analysis of Key Financial Indicator Changes](index=2&type=section&id=%28III%29%20Reasons%20for%20Changes%20in%20Key%20Accounting%20Data%20and%20Financial%20Indicators) Significant financial indicator changes include a **109.43%** increase in prepayments, **42.42%** rise in short-term borrowings, **159.15%** decrease in operating cash flow due to inventory, and **177.00%** increase in financing cash flow from new bank loans, supporting business expansion - Prepayments increased by **109.43%** compared to the beginning of the year, primarily due to stocking up on raw materials[9](index=9&type=chunk) - Short-term borrowings increased by **42.42%** compared to the beginning of the year, mainly due to increased bank borrowings for production and operations[10](index=10&type=chunk) - Net cash flow from operating activities decreased by **159.15%** year-on-year, primarily due to increased inventory stocking in the current period[10](index=10&type=chunk) - Net cash flow from financing activities increased by **177.00%** year-on-year, primarily due to increased bank borrowings for production and operations in the current period[10](index=10&type=chunk) [Shareholder Information](index=3&type=section&id=II%E3%80%81Shareholder%20Information) [Shareholding Information](index=3&type=section&id=%28I%29%20Total%20Common%20Shareholders%2C%20Number%20of%20Preferred%20Shareholders%20with%20Restored%20Voting%20Rights%2C%20and%20Top%20Ten%20Shareholders%27%20Holdings) As of the reporting period end, the company had **42,684 common shareholders**, with top ten shareholders mostly domestic individuals and significant share pledges, notably by controlling shareholder Jiang Tianwu - As of the end of the reporting period, the company had a total of **42,684 common shareholders**[12](index=12&type=chunk) Top Ten Shareholders' Holdings and Pledges | Shareholder Name | Holding Percentage | Number of Pledged Shares | | :--- | :--- | :--- | | Jiang Tianwu | 18.75% | 88,000,000 | | Wu Jing | 11.59% | 0 | | Li Jianwei | 8.19% | 41,800,000 | | Li Jing | 5.67% | 42,710,000 | | Zhang Aichun | 5.30% | 35,000,000 | | Li Jun | 4.25% | 21,283,290 | - The company is unaware of any related party relationships or concerted actions among the top ten shareholders[13](index=13&type=chunk) [Quarterly Financial Statements](index=4&type=section&id=IV%E3%80%81Quarterly%20Financial%20Statements) [Consolidated Balance Sheet](index=4&type=section&id=1%E3%80%81Consolidated%20Balance%20Sheet) As of September 30, 2021, total assets reached **3.70 billion RMB** (+9.26%), liabilities **1.86 billion RMB** (+20.90%) due to increased borrowings, and owners' equity **1.79 billion RMB** (-1.00%) Key Balance Sheet Items | Item | September 30, 2021 (RMB) | December 31, 2020 (RMB) | Change | | :--- | :--- | :--- | :--- | | Total Assets | 3,695,611,800.32 | 3,382,410,953.20 | 9.26% | | Total Liabilities | 1,863,348,133.78 | 1,541,297,642.95 | 20.90% | | Owners' Equity Attributable to Parent Company | 1,786,822,432.21 | 1,804,899,750.81 | -1.00% | - Among current assets, prepayments increased by **109.43%** from approximately **99 million RMB** to **209 million RMB** due to inventory stocking[9](index=9&type=chunk)[16](index=16&type=chunk) - Among current liabilities, short-term borrowings increased from **495 million RMB** to **705 million RMB**, and notes payable from **406 million RMB** to **638 million RMB**, being the primary drivers of liability growth[10](index=10&type=chunk)[17](index=17&type=chunk) [Consolidated Income Statement](index=7&type=section&id=2%E3%80%81Consolidated%20Income%20Statement%20Year-to-Date) Q1-Q3 2021 operating revenue reached **1.53 billion RMB** (+12.82%), but increased operating, sales, and R&D costs limited net profit attributable to shareholders to **27.48 million RMB** (+8.77%), indicating limited profitability improvement Key Income Statement Items (Year-to-Date) | Item | Current Period (RMB) | Prior Period (RMB) | Change | | :--- | :--- | :--- | :--- | | Total Operating Revenue | 1,529,888,170.68 | 1,356,028,388.66 | 12.82% | | Total Operating Costs | 1,498,139,815.67 | 1,354,181,631.48 | 10.63% | | Of which: Sales Expenses | 468,414,547.53 | 414,803,012.46 | 12.92% | | R&D Expenses | 56,173,669.60 | 45,257,722.15 | 24.12% | | Net Profit Attributable to Parent Company Owners | 27,477,683.97 | 25,262,744.15 | 8.77% | [Consolidated Cash Flow Statement](index=9&type=section&id=3%E3%80%81Consolidated%20Cash%20Flow%20Statement%20Year-to-Date) Q1-Q3 2021 operating cash flow turned negative at **-89.73 million RMB** due to increased purchases, investing activities had a **214 million RMB** net outflow, financing activities a **140 million RMB** net inflow, leading to a **164 million RMB** net decrease in cash and equivalents Key Cash Flow Statement Items (Year-to-Date) | Item | Current Period (RMB) | Prior Period (RMB) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | -89,731,688.13 | 151,705,876.66 | | Net Cash Flow from Investing Activities | -214,232,677.14 | -161,632,275.18 | | Net Cash Flow from Financing Activities | 140,359,213.89 | -182,290,473.66 | | Net Increase in Cash and Cash Equivalents | -163,826,027.97 | -192,132,962.69 | - Among operating cash outflows, 'cash paid for goods and services' significantly increased to **1.14 billion RMB** from **703 million RMB** in the prior year, primarily causing negative operating cash flow[25](index=25&type=chunk) - In investing activities, 'cash paid for investments' was **53 million RMB**, compared to zero in the prior year, a key reason for the expanded investment outflow[25](index=25&type=chunk) [Notes on Financial Statement Adjustments](index=11&type=section&id=%28II%29%20Notes%20on%20Financial%20Statement%20Adjustments) Effective January 1, 2021, the company adopted new lease standards, retrospectively adjusting opening financial statements by recognizing **69.21 million RMB** in 'right-of-use assets' and 'lease liabilities,' without affecting opening owners' equity - The company first adopted new lease standards in 2021, adjusting its financial statements as of January 1, 2021[27](index=27&type=chunk) Impact of New Lease Standards Adoption on Opening Balance Sheet | Adjustment Item | Adjustment Amount (RMB) | | :--- | :--- | | Right-of-Use Assets | +69,205,724.20 | | Lease Liabilities | +69,205,724.20 | [Audit Report](index=14&type=section&id=%28III%29%20Audit%20Report) This quarterly report is unaudited - The company's Q3 2021 report is unaudited[32](index=32&type=chunk)

Financial Performance - The company's operating revenue for the first half of 2021 was CNY 1,016,330,229.45, representing a 14.67% increase compared to CNY 886,346,845.64 in the same period last year[21]. - The net profit attributable to shareholders was CNY 47,099,668.47, which is a 3.01% increase from CNY 45,722,887.32 year-on-year[21]. - The net profit after deducting non-recurring gains and losses was CNY 42,635,131.27, up 14.41% from CNY 37,265,275.87 in the previous year[21]. - The company reported a significant decrease in net cash flow from operating activities, which was CNY -109,489,798.57, compared to CNY 59,648,591.69 in the same period last year, a decline of 283.56%[21]. - The company achieved a revenue of 1,016,330,229.45 CNY in the first half of 2021, representing a year-on-year growth of 14.67%[47]. - The net profit attributable to the listed company was 4,709.97 million CNY, an increase of 3.01% compared to the previous year[33]. - The company reported a 47.52% increase in revenue from pillow cores, totaling ¥67,045,057.70[51]. - The company reported a decrease in tax expenses to ¥8,456,042.79 from ¥4,666,074.11 in the previous year, indicating improved profitability[148]. - The total comprehensive income for the first half of 2021 was 45,292,000, a decrease of 534,930 compared to the previous period[163]. Assets and Liabilities - The company's total assets increased by 9.12% to CNY 3,690,938,868.49 from CNY 3,382,410,953.20 at the end of the previous year[21]. - The total liabilities rose to CNY 1,843,269,334.33 from CNY 1,541,297,642.95, marking an increase of approximately 19.6%[141]. - The company's equity increased to CNY 1,847,669,534.16 from CNY 1,841,113,310.25, showing a slight increase of approximately 0.4%[142]. - The total liabilities to equity ratio stands at approximately 1.00, indicating a balanced leverage position[141]. - The total assets at the end of the reporting period amounted to 7,588.00 million RMB, reflecting a slight increase from the previous period[162]. - The total liabilities at the end of the reporting period were 4,911.00 million RMB, reflecting a manageable debt level[162]. Cash Flow - The company's operating cash flow showed a significant decline of 283.56%, resulting in a negative cash flow of 109,489,798.57 CNY[47]. - Cash generated from operating activities was ¥1,168,755,892.81, compared to ¥1,114,631,580.92 in the first half of 2020, reflecting a positive cash flow trend[152]. - The net cash flow from investing activities was -100,574,188.06 CNY, showing a slight improvement from -114,298,737.62 CNY in the previous year[154]. - Cash inflow from financing activities totaled 613,350,000.00 CNY, up from 289,000,000.00 CNY in the same period last year[154]. - The ending cash and cash equivalents balance was 352,611,450.45 CNY, compared to 297,552,095.75 CNY at the end of the previous year[154]. Market Position and Strategy - The company aims to position itself as the leading brand in high-end bedding products, focusing on product, channel, and operational upgrades[29]. - The company collaborates with top luxury brand designers and institutions to enhance product quality and store image[30]. - The company has established a nationwide online and offline retail network, integrating both direct sales and franchise models[30]. - The company has maintained a leading position in the high-end bedding market, ranking first in sales for 12 consecutive years from 2009 to 2020[43]. - The company plans to enhance its high-end bedding product offerings and improve operational capabilities to meet market demands[77]. - The company plans to expand its market presence and invest in new product development to drive future growth[143]. Research and Development - The company’s R&D investment increased by 10.95% to 35,501,258.94 CNY, reflecting a commitment to product quality and innovation[47]. - The company has launched a high-end bedding standard in collaboration with Guangzhou Inspection and Testing Certification Group, leading the industry in quality grading for premium materials[39]. - The company has initiated research and development for new technologies aimed at improving product offerings and market competitiveness[162]. Risks and Challenges - The company faces risks such as intensified industry competition and rising costs of raw materials and labor[5]. - Raw material costs, particularly for fabric and filling materials, account for over 85% of operating costs, making the company vulnerable to price fluctuations[77]. - The company faces risks from intensified industry competition and changing consumer preferences, particularly regarding fabric quality and style[77]. Shareholder Information - The company did not plan to distribute cash dividends or issue bonus shares for this period[6]. - The total number of common shareholders at the end of the reporting period was 42,461[125]. - The largest shareholder, Jiang Tianwu, holds 19.36% of the shares, totaling 146,770,133 shares[125]. - The second-largest shareholder, Wu Jing, holds 11.80% of the shares, totaling 89,484,432 shares, with a decrease of 3,553,200 shares during the reporting period[125]. Corporate Governance and Compliance - The semi-annual financial report was not audited[96]. - The company had no major litigation or arbitration matters during the reporting period[98]. - There were no significant related party transactions during the reporting period[100]. - The financial statements were approved by the board of directors on August 26, 2021, reflecting the company's commitment to transparency and compliance with accounting standards[185]. - The accounting policies comply with the latest enterprise accounting standards issued by the Ministry of Finance, ensuring accurate financial reporting[189].

Revenue and Profit - Revenue for Q1 2021 reached ¥502,915,615.88, an increase of 38.68% compared to ¥362,650,635.29 in the same period last year[8] - Net profit attributable to shareholders was ¥34,407,778.01, up 12.55% from ¥30,571,807.45 year-on-year[8] - Net profit excluding non-recurring items increased by 30.44% to ¥31,986,818.93 from ¥24,522,026.41 in the previous year[8] - Total operating revenue for Q1 2021 was CNY 502,915,615.88, an increase of 38.7% compared to CNY 362,650,635.29 in Q1 2020[38] - Net profit for Q1 2021 reached CNY 34,851,932.89, representing a 20.5% increase from CNY 29,025,757.16 in Q1 2020[40] - Total operating profit for Q1 2021 was a loss of CNY 601.14 thousand, an improvement from a loss of CNY 29.70 million in Q1 2020[41] Cash Flow and Investments - Operating cash flow turned negative at -¥45,022,660.52, a decline of 143.45% compared to ¥103,609,700.18 in the same period last year[8] - Cash flow from investment activities decreased by 40.38%, reflecting a reduction in the purchase of long-term assets[15] - Operating cash flow for Q1 2021 showed a net outflow of CNY 45.02 million, compared to a net inflow of CNY 103.61 million in Q1 2020[46] - The net cash flow from financing activities was negative at ¥26.93 million in Q1 2021, contrasting with a positive net cash flow of ¥7.5 million in Q1 2020[49] Assets and Liabilities - Total assets at the end of the reporting period were ¥3,422,125,777.08, a slight increase of 1.17% from ¥3,382,410,953.20 at the end of the previous year[8] - The company's current assets totaled CNY 1,929,404,638.87 as of March 31, 2021, compared to CNY 1,881,670,739.17 at the end of 2020, indicating an increase of about 2.53%[29][28] - Total liabilities were CNY 1,546,256,164.58 as of March 31, 2021, slightly up from CNY 1,541,297,642.95, indicating a marginal increase of about 0.06%[31][32] - The company's total assets as of March 31, 2021, were CNY 4,897,680,327.28, compared to CNY 4,801,791,485.07 at the end of 2020[36] - Total liabilities as of March 31, 2021, were CNY 3,275,254,337.05, compared to CNY 3,180,951,998.54 at the end of 2020, indicating a rise of 3.0%[36] Shareholder Information - The number of ordinary shareholders at the end of the reporting period was 43,476[10] - The company's equity attributable to shareholders reached CNY 1,839,131,767.25, compared to CNY 1,804,899,750.81 at the end of 2020, marking an increase of approximately 1.89%[32][32] - The total equity attributable to shareholders as of March 31, 2021, was CNY 1,622,425,990.23, a slight increase from CNY 1,620,839,486.53 at the end of 2020[36] Expenses - Management expenses surged by 76.39%, primarily due to organizational restructuring and an increase in management personnel[15] - Total operating costs for Q1 2021 were CNY 471,559,305.43, up 34.0% from CNY 351,895,424.86 in the same period last year[39] - Research and development expenses for Q1 2021 were CNY 15,741,258.78, an increase from CNY 12,692,772.24 in the previous year, reflecting a growth of 24.0%[39] - Research and development expenses increased to CNY 12.32 million, up 59.73% from CNY 7.74 million in the previous year[41] - The company incurred a financial expense of CNY 7.50 million, slightly up from CNY 7.28 million in the previous year[41] Compliance and Adjustments - The company reported no significant non-compliance issues or overdue commitments during the reporting period[18][22] - The company did not engage in any significant research and development activities or new product launches during the reporting period[21][24] - The company did not adjust the balance sheet for the new leasing standards implemented from January 1, 2021, as it did not require retrospective adjustments[50] - The Q1 2021 report was not audited, indicating that the figures may be subject to change upon final audit[51]

Financial Performance - The company's operating revenue for 2020 was ¥2,220,109,147.11, a decrease of 14.73% compared to ¥2,603,609,857.53 in 2019[18] - The net profit attributable to shareholders for 2020 was ¥44,920,370.12, down 47.39% from ¥85,389,617.58 in 2019[18] - The net profit after deducting non-recurring gains and losses was ¥32,666,951.43, a decline of 60.00% compared to ¥81,670,020.68 in 2019[18] - The net cash flow from operating activities was ¥359,927,169.42, a decrease of 35.12% from ¥554,772,599.51 in 2019[18] - The total assets at the end of 2020 were ¥3,382,410,953.20, down 2.65% from ¥3,474,412,097.13 at the end of 2019[18] - The net assets attributable to shareholders decreased by 6.07% to ¥1,804,899,750.81 from ¥1,921,513,149.85 at the end of 2019[18] - The basic earnings per share for 2020 was ¥0.06, a decrease of 45.45% from ¥0.11 in 2019[18] - The weighted average return on net assets was 2.22%, down from 4.39% in 2019, reflecting a decline of 2.17%[18] Dividend Distribution - The company plans to distribute a cash dividend of ¥0.6 per 10 shares (including tax) to all shareholders[5] - In 2019, the company distributed a cash dividend of 1.5 RMB per 10 shares, totaling 114.40 million RMB[92] - In 2020, the company increased its cash dividend to 2 RMB per 10 shares, amounting to 150.94 million RMB[93] - The proposed cash dividend is CNY 0.6 per 10 shares (tax included), with a total distributable profit of CNY 94,577,465.12[96] - The cash dividend distribution accounted for 100% of the total profit distribution amount[96] Market Challenges - The company faced challenges due to the COVID-19 pandemic, which impacted offline sales channels and limited online business growth[36] - The company faces risks including intensified industry competition and rising costs of raw materials and labor[5] - Raw materials and labor costs account for over 85% of the company's operating costs, making fluctuations in these prices a significant risk[87] Sales and Revenue Breakdown - The company's main product, bedding sets, generated revenue of CNY 821.91 million, accounting for 37.02% of total revenue, which is a decline of 19.95% year-on-year[40] - The revenue from the central region (华中) increased by 18.16% to CNY 1.50 billion, accounting for 67.36% of total revenue[43] - The average revenue per direct store decreased by 18.86% to CNY 943,200[44] - The sales volume of home textiles decreased by 9.40% to 2.61 million units, while production volume dropped by 21.08% to 2.67 million units[46] - The total sales revenue from the top five customers was CNY 115.48 million, representing 5.20% of total sales[50] - The total procurement amount from the top five suppliers was CNY 250.09 million, accounting for 20.39% of total procurement[51] Strategic Initiatives - The company is focusing on integrating online and offline sales channels to improve customer experience and adapt to changing market conditions[29] - The company has implemented a strategy to enhance home care services and product offerings in response to increased consumer demand during the pandemic[37] - The company has established a strong R&D team and has obtained a total of 729 patents, enhancing its innovation capabilities[33] - The company plans to focus on high-end bedding products, aiming to become the leading brand in this segment[84] - The company will enhance its brand image by collaborating with top design resources and upgrading its brand logo[85] Operational Adjustments - The company opened 59 new direct stores but closed 111 due to operational challenges and strategic adjustments[44] - The company is actively optimizing its internal structure and enhancing talent acquisition to improve operational efficiency[37] - The company has established a comprehensive training and incentive system to attract and retain talent, addressing the risk of human resource shortages[88] Project Developments - The company achieved a project investment progress of 99.77% for the new production line with an annual capacity of 300,000 bedding sets[75] - The logistics base construction project showed a completion rate of only 0.76% as of the end of 2020[75] - The smart factory information technology project had a completion rate of 0.13% by the end of the reporting period[75] - The company plans to delay the construction period of the "annual production of 200,000 mattresses project" to December 2023 due to delays caused by trade wars and the COVID-19 pandemic[76] Governance and Compliance - The company has established a sound risk control system to protect the rights and interests of all shareholders and creditors[126] - The company has maintained effective communication with investors, ensuring timely and accurate information disclosure[126] - The company has implemented stock incentive plans, repurchasing and canceling 5,010,000 shares from the 2018 plan and 800,000 shares from the 2019 plan due to performance not meeting targets[108][109] - The company has not engaged in any major related party transactions during the reporting period[110] Employee and Management Structure - The total number of employees in the company is 3,150, with 2,142 in the parent company and 1,008 in major subsidiaries[171] - The company has a total of 4,150 employees receiving salaries during the reporting period[171] - The management team is focused on leveraging their industry experience to drive future growth and operational efficiency[162] - The company has established a management academy for regular employee training, focusing on various training forms including onboarding and skills training[173] Audit and Financial Reporting - The audit opinion for the financial statements was a standard unqualified opinion, indicating that the financial statements fairly reflect the company's financial position[195] - The company’s internal control over financial reporting was deemed effective, with no material misstatements found during the audit[196] - The management's assessment of the expected credit loss model for accounts receivable was highlighted as a key audit matter due to its significant impact on financial reporting[199]

Financial Performance - Operating revenue for the reporting period was CNY 469,681,543.02, a decrease of 12.67% year-on-year, and a total of CNY 1,356,028,388.66 for the year-to-date, down 19.64%[9] - Net profit attributable to shareholders was a loss of CNY 20,460,143.17, a decline of 236.36% compared to the same period last year, with a year-to-date net profit of CNY 25,262,744.15, down 74.24%[9] - Basic earnings per share for the reporting period was -CNY 0.0270, a decrease of 239.90% year-on-year[9] - Total operating revenue for the third quarter was CNY 469,681,543.02, a decrease of 12.7% compared to CNY 537,841,417.02 in the same period last year[41] - The company reported a net loss of CNY 5,041,359.95 for the year-to-date period, compared to a profit of CNY 37,067,001.49 in the previous year[44] - The net profit for Q3 2020 was a loss of CNY 18,652,639.02, compared to a profit of CNY 12,509,187.30 in Q3 2019[43] - The total profit for Q3 2020 was CNY 34,236,494.07, down 68.3% from CNY 108,276,852.72 in the previous year[50] - The company's total operating revenue for the year-to-date period was CNY 1,356,028,388.66, a decrease of 19.6% from CNY 1,687,541,250.74 in the same period last year[48] Assets and Liabilities - Total assets at the end of the reporting period reached CNY 3,576,438,755.21, an increase of 2.94% compared to the end of the previous year[9] - The total liabilities increased to CNY 3,299,328,480.84, up from CNY 2,311,468,979.24, reflecting a significant rise in current liabilities[39] - The total assets reached CNY 4,875,588,691.22, compared to CNY 4,068,525,487.37 in the previous year, indicating growth in the company's asset base[39] - The total current liabilities amounted to CNY 1,437,188,370.55, compared to CNY 1,142,233,648.15 in the previous year, indicating a significant increase[34] - The company's total assets reached CNY 4,068,525,487.37, with current assets totaling CNY 2,475,352,831.44[68] - Total liabilities amounted to CNY 1,423,900,922.88, with current liabilities at CNY 1,343,484,991.88[65] Cash Flow - Cash flow from operating activities increased by 86.74% year-to-date, totaling CNY 151,705,876.66[9] - The cash flow from operating activities for the period was CNY 151,705,876.66, an increase of 86.3% compared to CNY 81,237,918.16 in the same period last year[56] - The net cash flow from operating activities for the third quarter was CNY 117,221,631.11, an increase from CNY 90,039,685.83 in the same period last year[59] - The total cash inflow from financing activities was CNY 629,000,360.00, compared to CNY 593,676,000.00 in the previous year[60] - The cash outflow from financing activities amounted to CNY 811,290,833.66, up from CNY 532,297,701.63 year-on-year[60] - The net cash flow from investing activities was -CNY 161,632,275.18, a decrease from -CNY 211,731,448.01 in the previous year[57] Shareholder Information - The number of ordinary shareholders at the end of the reporting period was 45,337[12] - The top shareholder, Jiang Tianwu, holds 19.36% of the shares, amounting to 146,770,133 shares, with 110,077,600 shares pledged[13] - The company has completed the repurchase and cancellation of 5,010,000 shares of the 2018 restricted stock plan at a price of CNY 3.0231 per share, which accounted for 0.66% of the total share capital before repurchase[20] - The repurchase and cancellation of 800,000 shares from the 2019 restricted stock plan was completed at a price of CNY 2.0934 per share, representing 0.10% of the total share capital before repurchase[21] Inventory and Receivables - Prepayments increased by 552.11% compared to the beginning of the period, mainly due to inventory purchases of raw materials and home products[17] - Other receivables grew by 71.25% compared to the beginning of the period, primarily due to prepaid rent and employee advances[17] - Accounts receivable decreased to CNY 362,578,811.61 from CNY 457,980,116.60, indicating a reduction of approximately 20.8%[33] - Inventory decreased to CNY 673,610,721.75 from CNY 718,154,248.38, reflecting a decline of about 6.2%[33] - The company reported a decrease in inventory to CNY 437,731,982.48 from CNY 418,097,748.46, suggesting improved inventory management[36] Research and Development - Research and development expenses decreased to CNY 13,260,601.02 in Q3 2020 from CNY 36,073,440.56 in Q3 2019, a reduction of 63.3%[44] - The company's R&D expenses in Q3 2020 were CNY 45,257,722.15, a decrease of 13.5% from CNY 52,482,532.90 in Q3 2019[50] Management Strategy - The company's management indicated a focus on market expansion and new product development in the upcoming quarters[50]

Group 1: Event Details - The company will participate in the "2020 Annual Investor Online Reception Day" organized by the Hunan Securities Regulatory Bureau and other associations [1] - The event will be held online via the "Panorama Roadshow" platform on September 11, 2020, from 15:00 to 17:00 [1] - Investors can access the event through the website: http://rs.p5w.net/ [1] Group 2: Company Commitment - The company and its board members guarantee the accuracy and completeness of the disclosed information [1] - The board secretary and securities affairs representative will engage in online communication with investors during the event [1] Group 3: Investor Engagement - The company encourages widespread participation from investors [1]

Financial Performance - The company's operating revenue for the first half of 2020 was ¥886,346,845.64, a decrease of 22.91% compared to ¥1,149,699,833.72 in the same period last year[18]. - The net profit attributable to shareholders was ¥45,722,887.32, down 44.95% from ¥83,054,741.08 year-on-year[18]. - The net profit after deducting non-recurring gains and losses was ¥37,265,275.87, a decline of 53.24% compared to ¥79,688,246.54 in the previous year[18]. - The operating profit decreased by 55.38% year-over-year, attributed to the impact of the pandemic on revenue[40]. - The company reported a significant decrease in sales in regions such as South China, which saw a decline of 68.67% year-on-year[38]. - The gross profit margin for the textile industry was 41.43%, reflecting a decline of 24.79% compared to the previous year[40]. - The company reported a net profit for the first half of 2020 of CNY 45,224,142.86, a decline of 45.2% from CNY 82,528,965.72 in the first half of 2019[130]. Cash Flow and Liquidity - The net cash flow from operating activities increased by 152.87% to ¥59,648,591.69, compared to ¥23,588,993.95 in the same period last year[18]. - The cash flow from operating activities generated a net amount of ¥59.65 million in the first half of 2020, an increase from ¥23.59 million in the same period of 2019[137]. - The total cash inflow from operating activities was ¥1,194.04 million, down from ¥1,432.71 million in the first half of 2019, indicating a decrease of 16.6%[137]. - The total cash and cash equivalents at the end of the first half of 2020 were ¥297.55 million, down from ¥379.09 million at the end of the first half of 2019, a decrease of 21.5%[138]. - The company reported a significant increase in cash paid for debt repayment, which totaled 267,200,000.00 CNY, compared to 193,406,520.18 CNY in the previous period, marking an increase of 38.3%[141]. Assets and Liabilities - Total assets at the end of the reporting period were ¥3,526,239,296.70, an increase of 1.49% from ¥3,474,412,097.13 at the end of the previous year[18]. - The company's total liabilities increased to CNY 1,581,375,909.69 from CNY 1,423,900,922.88, which is an increase of approximately 11%[122][123]. - The company's equity decreased to CNY 1,944,863,387.01 from CNY 2,050,511,174.25, reflecting a decline of about 5.2%[123]. - The company's total liabilities rose to CNY 3,036,284,197.13, compared to CNY 2,311,468,979.24 at the end of 2019, reflecting an increase of 31.4%[126]. Investment and Capital Expenditure - The company has committed to invest a total of 91,936.3 million CNY in various projects, with 82,998.43 million CNY already invested, achieving an investment progress of approximately 90.2%[50]. - The new production line for 300,000 sets of bedding and 800,000 pieces of core quilts has reached an investment completion rate of 99.77% with 17,769.9 million CNY invested[50]. - The logistics base construction project has only achieved 0.91% of its investment target, with only 42 million CNY invested out of a planned 5,495 million CNY[50]. - The company plans to allocate 6,544 million CNY for information technology construction and 4,500 million CNY for the R&D center construction from the raised funds[51]. Shareholder and Equity Information - The company did not distribute cash dividends or issue bonus shares during the reporting period[6]. - The total number of shares decreased by 5,810,000 shares due to the repurchase and cancellation of restricted stocks, resulting in a total of 758,261,443 shares[98]. - Major shareholders include Jiang Tianwu with 19.36% (146,770,133 shares), Wu Jing with 12.27% (93,037,632 shares), and Li Jianwei with 8.17% (61,946,079 shares)[103]. - The company repurchased and canceled 5,010,000 shares from the 2018 restricted stock incentive plan, accounting for 0.66% of the total share capital before the repurchase, at a price of 3.0231 CNY per share[73]. Strategic Initiatives - The company emphasizes a multi-brand strategy and has established a strong offline sales network, integrating online and offline channels[26]. - The company focused on product development, launching new products during the autumn and winter season, which received positive feedback[33]. - The company plans to enhance production efficiency and product R&D while expanding product offerings and improving service quality[59]. - The company is recognized as the first provincial-level technology research and development center in the industry, enhancing its product design and quality management capabilities[28]. Regulatory and Compliance - The semi-annual financial report was not audited[67]. - There were no major lawsuits or arbitration matters during the reporting period[70]. - The company has not encountered any significant changes in project feasibility during the reporting period[53]. - The company has disclosed its fundraising and usage situation in a special report available on the Giant Tide Information Network[54].

Financial Performance - The company's operating revenue for 2019 was CNY 2,603,609,857.53, representing a 12.80% increase compared to CNY 2,308,092,760.29 in 2018[18] - The net profit attributable to shareholders for 2019 was CNY 85,389,617.58, a slight increase of 1.19% from CNY 84,382,709.37 in the previous year[18] - The net cash flow from operating activities surged by 185.91% to CNY 554,772,599.51, compared to CNY 194,037,399.03 in 2018[18] - The total assets at the end of 2019 amounted to CNY 3,474,412,097.13, reflecting a 2.49% increase from CNY 3,389,896,032.49 at the end of 2018[18] - The company's basic earnings per share remained stable at CNY 0.11, unchanged from the previous year[18] - The weighted average return on equity increased to 4.39%, up from 4.16% in 2018[18] - The net profit attributable to shareholders after deducting non-recurring gains and losses was CNY 81,670,020.68, an increase of 3.13% from CNY 79,193,287.71 in 2018[18] - The company's net assets attributable to shareholders decreased by 3.26% to CNY 1,921,513,149.85 at the end of 2019, down from CNY 1,986,276,517.42 in 2018[18] - The company reported a quarterly revenue of CNY 916,068,606.79 in Q4 2019, which was the highest among the four quarters[23] - In 2019, the company reported a total non-operating income of 3,719,596.90, a decrease of 28.4% compared to 2018's 5,189,421.66[24] Dividend Policy - The company plans to distribute a cash dividend of CNY 2 per 10 shares (including tax) to all shareholders[6] - In 2019, the company reported a net profit attributable to shareholders of RMB 85,389,617.58, with a cash dividend payout ratio of 49.10%[85] - The total cash dividend distributed in 2019 amounted to RMB 41,923,075.22, which is 100% of the profit distribution total[87] - The company has maintained a consistent cash dividend policy over the past three years, with cash dividends of RMB 4,678.59 million in 2017 and RMB 11,440.20 million in 2018[83] - The company has committed to ensuring that cash dividends will constitute at least 20% of profit distributions during its growth phase[87] - The cash dividend distribution plan is compliant with the company's articles of association and shareholder resolutions[83] Investment and Expansion - The company established 1,200 new sales terminals in 2019, including 949 smart stores, enhancing its distribution network[33] - The company has set up six high-end laundry factories under the "Seven Star Laundry" brand to meet customer needs for high-end textile care[34] - The product line was expanded with new offerings such as bedding sets, comforters, and pillows, responding quickly to market trends[34] - The company has committed a total investment of CNY 91,936.3 million, with an adjusted total of CNY 96,936.3 million, achieving an investment progress of 82,998.43 million, which is approximately 85.5% of the total commitment[64] - The project for producing 300,000 sets of bedding and 800,000 quilts has reached an investment completion rate of 99.77%, with an actual investment of CNY 17,769.9 million[64] - The direct sales market terminal network construction project has an investment completion rate of 100.02%, with an actual investment of CNY 23,497.81 million[64] Research and Development - Research and development expenses increased significantly by 180.62% to 86,718,806.92 CNY, reflecting a strong commitment to innovation[48] - The company has established a provincial-level technology research and development center, enhancing its innovation capabilities[29] - The company has registered the "MENDALE" trademark in multiple international markets, including the US and EU[29] Corporate Governance - The company has maintained a stable management team since 2009, with several members serving in their roles for over a decade[154] - The company is committed to enhancing its corporate governance through the inclusion of independent directors with significant industry experience[156] - The total number of shares held by independent directors remains at zero, indicating a potential area for future investment or alignment with company interests[152] - The company has implemented a rigorous process for determining executive compensation, ensuring alignment with performance metrics[161] - The board includes independent directors with significant experience in corporate governance and financial management[160] Risk Management - The company faces risks from rising raw material costs, which account for over 85% of operating costs, and plans to collaborate with quality suppliers to mitigate these impacts[78] - The company has a structured approach to risk management and corporate governance, which is critical for maintaining investor confidence[157] Employee Relations - The company has implemented a long-term incentive mechanism through an equity incentive plan for directors, senior management, and key personnel[167] - The company established the Mengjie Management Academy to provide regular training for employees, including onboarding, on-the-job, and specialized training[168] - The total number of employees in the company is 3,708, with 2,503 in the parent company and 1,205 in major subsidiaries[165] Shareholder Structure - The total number of shareholders at the end of the reporting period was 32,675, compared to 35,815 at the end of the previous month[139] - The largest shareholder, Jiang Tianwu, holds 19.21% of the shares, amounting to 146,770,133 shares, with 36,692,533 shares pledged[140] - The second-largest shareholder, Wu Jing, holds 14.03% of the shares, totaling 107,236,732 shares, with no shares pledged[140] - The company has maintained a stable shareholder structure with no new strategic investors entering the top ten list during the reporting period[140] Audit and Compliance - The audit opinion issued was a standard unqualified opinion, confirming that the financial statements fairly reflect the company's financial position[196] - The company confirmed that there were no public bonds issued that were overdue or unable to be fully repaid as of the report date[194] - The internal control self-assessment report was disclosed on April 30, 2020[191] - The company did not identify any major internal control deficiencies during the reporting period[188]

Financial Performance - The company's operating revenue for Q1 2020 was ¥362,650,635.29, a decrease of 34.63% compared to ¥554,734,669.23 in the same period last year[8] - Net profit attributable to shareholders was ¥30,571,807.45, down 46.63% from ¥57,282,866.91 year-on-year[8] - The net profit after deducting non-recurring gains and losses was ¥24,522,026.41, a decline of 56.79% compared to ¥56,746,191.37 in the previous year[8] - The company reported a significant decline in operating profit by 53.20%, attributed to the decrease in operating revenue[15] - Total operating revenue for Q1 2020 was CNY 362,650,635.29, a decrease of 34.6% compared to CNY 554,734,669.23 in Q1 2019[38] - Net profit for Q1 2020 was CNY 29,025,757.16, a decline of 48.9% compared to CNY 56,746,324.48 in Q1 2019[40] - Operating revenue for Q1 2020 was ¥234.62 million, a decrease of 41.3% compared to ¥399.58 million in the same period last year[41] - Net profit for Q1 2020 was a loss of ¥19.73 million, compared to a profit of ¥46.95 million in Q1 2019, marking a significant decline[41] - Operating profit for Q1 2020 was a loss of ¥29.70 million, down from a profit of ¥48.86 million in the previous year[41] - Total comprehensive income for Q1 2020 was a loss of ¥19.73 million, compared to a gain of ¥46.95 million in Q1 2019[42] Cash Flow and Liquidity - The company's cash flow from operating activities was ¥103,609,700.18, a slight decrease of 0.68% from ¥104,316,602.38 in the previous year[8] - The company's cash and cash equivalents increased to CNY 614,371,047.92 from CNY 550,139,811.55, reflecting a growth of approximately 11.7%[29] - Cash flow from operating activities was ¥103.61 million, slightly down from ¥104.32 million in the same quarter last year[46] - Cash and cash equivalents at the end of Q1 2020 were ¥421.44 million, a decrease from ¥468.44 million at the end of Q1 2019[46] - The net cash flow from financing activities for Q1 2020 was 7,504,615.85 CNY, compared to a net outflow of 6,111,730.30 CNY in Q1 2019, indicating a significant improvement[49] - The total cash and cash equivalents at the end of Q1 2020 decreased to 249,355,465.45 CNY from 343,635,639.11 CNY at the end of Q1 2019, reflecting a decline of approximately 27.4%[49] - The cash inflow from borrowings in Q1 2020 was 230,000,000.00 CNY, compared to 135,000,000.00 CNY in Q1 2019, reflecting a 70.4% increase in financing through loans[49] - The cash outflow for debt repayment in Q1 2020 was 215,000,000.00 CNY, which is an increase from 135,003,254.74 CNY in the same period last year, indicating a higher focus on debt management[49] Assets and Liabilities - The total assets at the end of the reporting period were ¥3,410,913,586.50, down 1.83% from ¥3,474,412,097.13 at the end of the previous year[8] - As of March 31, 2020, the company's total assets amounted to CNY 3,410,913,586.50, a decrease from CNY 3,474,412,097.13 as of December 31, 2019[28] - The company's total assets increased to CNY 4,582,088,426.70 as of March 31, 2020, up from CNY 4,068,525,487.37 at the end of 2019[36] - Total current liabilities decreased to CNY 1,252,784,050.41 from CNY 1,343,484,991.88, a decline of about 6.7%[31] - The company's total liabilities decreased to CNY 1,331,379,802.85 from CNY 1,423,900,922.88, reflecting a decrease of approximately 6.5%[31] - The company’s total liabilities reached CNY 2,844,759,997.22, an increase of 23.0% from CNY 2,311,468,979.24 in the previous period[36] - The total liabilities amounted to 1,423,900,922.88 CNY, which is consistent with the previous year's figures, showing no significant increase in debt levels[52] Shareholder Information - The number of ordinary shareholders at the end of the reporting period was 35,815[11] - The retained earnings increased to CNY 430,594,698.71 from CNY 400,022,891.26, showing an increase of about 7.7%[32] - The total equity attributable to the parent company increased to CNY 1,952,080,143.25 from CNY 1,921,513,149.85, indicating a growth of approximately 1.6%[32] - The total equity attributable to shareholders was 1,921,513,149.85 CNY, remaining stable compared to the previous year, which suggests a solid equity base[53] Research and Development - R&D expenses increased by 94.67%, indicating a significant rise in investment in new product development[15] - Research and development expenses increased to ¥7.74 million, up 64.7% from ¥4.70 million in Q1 2019[41] Compliance and Governance - The company reported no securities investments, entrusted financial management, or derivative investments during the reporting period[18][19][20] - There were no violations regarding external guarantees or non-operating fund occupation by controlling shareholders during the reporting period[21][22] - The company has not yet audited the Q1 2020 report, which may affect the reliability of the financial data presented[56] - The company has implemented new revenue and leasing standards starting in 2020, which may impact future financial reporting and performance metrics[50]