2021-08-25-深交所-张_裕Ｂ_2021年半年度报告（英文版）_158页_1mb

Yantai Changyu Pioneer Wine Co., Ltd. 2021 Semi-annual Report Summary

Core Content and Key Information

Yantai Changyu Pioneer Wine Co., Ltd. (hereinafter referred to as "the Company") is a leading company in the Chinese wine industry, with stock abbreviations "Changyu A" and "Changyu B" and stock codes 000869 and 200869, listed on the Shenzhen Stock Exchange. The Company has no plans to distribute cash dividends or bonus shares during the report period.

The financial report has been retrospectively adjusted due to the amalgamation of enterprises under the same control. Key financial indicators for the first half of 2021 include:

• Operating revenue: CNY 1,874,460,437, up by 32.14% year-on-year
• Net profit attributable to shareholders: CNY 371,821,819, up by 16.69% year-on-year
• Net cash flows from operating activities: CNY 455,935,149, up by 2,860.11% year-on-year
• Basic and diluted earnings per share: 0.54 CNY/share, up by 17.39% year-on-year
• Total assets: CNY 13,369,160,872, up by 2.04% from the end of the previous year
• Net assets attributable to shareholders: CNY 10,333,217,946, up by 0.64% year-on-year

The Company's main business is the production and operation of wine and brandy, offering healthy and fashionable alcoholic drinks to domestic and international consumers. It maintains a self-production model and has a nationwide marketing network, forming a "three-level" system composed of salesmen and dealers.

Core Competitiveness

The Company has a strong core competitiveness, supported by the following advantages:

1. Strong brand influence: Brands like "Changyu," "Noble Dragon," and "AFIP" are well-known and have a good reputation.
2. National marketing network: A comprehensive "three-level" marketing network system has been established.
3. Advanced R&D and quality control: The Company operates the country's only "State-level Wine R&D Center," enabling it to master advanced winemaking technologies and maintain a robust product innovation and quality control system.
4. Extensive grape-growing bases: The Company has developed vineyards in suitable wine regions, including Shandong, Ningxia, Xinjiang, Liaoning, Hebei, and Shaanxi.
5. Diverse product range: Over 100 product varieties are available, covering high, medium, and low grades, meeting the needs of various consumer groups.
6. Equity incentive system: Employees are indirectly incentivized through controlling shareholders, aligning their benefits with those of shareholders.
7. Efficient decision-making: The Company has a flexible and efficient decision-making mechanism, enabling it to respond calmly to market changes.
8. Global production layout: The Company has completed its global production capacity layout in China, France, Chile, Spain, and Australia, leveraging international resources and technology.

Main Business Analysis

During the first half of 2021, the Company faced fierce competition in the domestic market and adapted to changes in alcohol consumption patterns and the impact of the pandemic. It implemented the "Three-Focus Strategy" (Focus on high quality, Focus on middle-and-high level, Focus on big product) and adopted a marketing concept of "Increasing sales from the terminal and continuously cultivating consumers."

Key initiatives included:

• Promoting the Three-Focus Strategy: The Company focused on core brands like "Longyu" for high-end wines, "Noble Dragon" for mid-to-high-end, and "Koya" for brandy, concentrating resources on these areas.
• Improving brand positioning: The Company collaborated with external consulting firms to enhance brand positioning and clarify its brand system.
• Marketing innovation: The Company leveraged online channels, such as "contactless delivery" and "introduction of famous wine into famous enterprises," and used web live broadcast platforms to promote brand culture and product knowledge.
• Digital transformation: QR code assignment and blockchain technology were applied to enhance product traceability, anti-counterfeiting, and marketing efficiency. Over 13,000 distributors were integrated into the "Changyu Wine Official Flagship Store" Smart Retail City.
• Enhancing product quality: The Company participated in major international competitions, such as Mundus Vini and DWWA, and won 61 medals, including 16 gold medals.
• Strengthening financial management: The Company intensified capital management and control, conducted risk analysis on tax-related entities, and implemented internal audits to prevent operational risks.

Future Plans

To achieve its business targets for 2021, the Company plans to:

1. Rectify work style: Conduct in-depth rectification of cadres' work style, focusing on 22 key issues across five areas, to enhance team vitality and execution capabilities.
2. Implement the Three-Focus Strategy: Accelerate digital transformation and collaborate with distributors to build marketing teams, better adapting to the new market and consumption environment.
3. Optimize marketing system: Continue to sort out and eliminate inefficient marketing personnel and distributor teams, and add fresh talent to improve performance.

Risk and Governance

The Company faces major risks in production and management, as detailed in "10. Risks and response measures" in Section III. It has also ensured the truthfulness and accuracy of its financial report, with the chairman, chief accountant, and accountants in charge guaranteeing the completeness and correctness of the report. No irregular gains or losses were reported, and the Company has no plans to distribute dividends.

Shareholder and Governance Information

• No changes in the Company's registered or office address, website, or email during the report period.
• No changes in the information disclosure and filing location.
• The Company has a clear governance structure, with the board of directors and senior management ensuring the report's authenticity and accuracy.
• The Company has no preferred shares or bonds outstanding.