2021-08-26-深交所-深中华B_2021年半年度报告（英文版）_178页_1mb

Shenzhen China Bicycle Company (Holdings) Limited Semi-Annual Report 2021 Summary

Core Content Overview

This report provides an overview of the financial and operational performance of Shenzhen China Bicycle Company (Holdings) Limited for the first half of 2021, along with a detailed analysis of its main businesses, industry trends, competitive advantages, and future development prospects.

Main Financial Indexes

Main Businesses

The company's main businesses during the reporting period were:

1. Bicycles and Lithium Battery Materials Business

   • Involves the production, assembly, procurement, and sales of bicycles and electric bicycles.
   • Also includes purchase, sales, and commissioned processing of lithium battery materials.
   • The company closely follows the technological development of core components like structural body, motor, power battery, and control system.
   • It has qualified suppliers for these components, and is preparing for the transition to lithium batteries due to the rising popularity of new energy technologies.

2. Jewelry and Gold Business

   • Provides supply chain management and services in the gold jewelry industry.
   • Connects with downstream gold jewelry brands, purchases gold and diamonds based on their needs, and subcontracts processing to specialized plants.
   • Focuses on product certification and cost reduction through integrated supply chain management.

Industry Trends and Competitive Landscape

• The global economic environment in 2021 remains uncertain due to the pandemic and other factors, but the domestic economy is recovering rapidly.
• The gold and jewelry industry is growing positively, with increased consumer spending and consumption upgrading.
• Young consumers are driving the shift from traditional "push supply chain" to demand-pull models.
• The consumption concept is evolving towards daily use of jewelry, with personalized design and brand recognition becoming more important.
• The wedding market remains a stable demand driver, and the market share is expected to grow further.
• Consumer demand is diversifying, expanding from wedding to festivals, love, friendship, family, and self-reward.
• The industry is moving towards segmentation, with brands focusing on specific consumer groups.
• Online and offline integration is becoming a key trend in sales and promotion.

Future Development Prospects

1. National Industrial Policy Support

   • The government has introduced favorable policies to support the jewelry and jade industry.
   • The Shanghai Diamond Exchange and Shanghai Gold Exchange have been launched, opening up markets for precious metals and their products.
   • Policies like the Guiding Opinions on Promoting Consumption and Opinions on Promoting the Innovation and Transformation of Entity Retail are expected to boost the industry.

2. Industry Self-Regulation

   • The country has strengthened industry standards and regulations, such as Jewelry and Jade Classification, Diamond Classification, and Gold and Silver Jewelry Purity Regulations.
   • These regulations help improve the industry's standards, promote sustainable development, and international competitiveness.

3. Economic Growth and Disposable Income

   • With the growth of China's economy, residents' disposable income is rising, which is expected to increase jewelry consumption.
   • Jewelry is seen as an optional consumer good, and its market in China is expected to continue rapid growth.

Competitive Advantages

1. High-Quality Upstream Supplier System

   • The company has established stable relationships with major diamond and gold suppliers.
   • It has cost advantages, short production cycles, and strong quality control.

2. Diversified Downstream Market Channels

   • The company has a diverse customer base, including:
     • Type A: Well-known national brands with over 500 retail stores.
     • Type B: Regional and segmented brands with 300-500 retail stores.
     • Type C: Small and medium brands with 50-100 retail stores.

3. Integrated Production and Design Chain

   • The company has a one-stop industrial chain that includes design, production, processing, testing, and wholesale.
   • This allows brand owners to focus on branding and sales while the company handles lower value-added processes.

4. Closed-Loop Business Process and Risk Control

   • The company has implemented strict internal control processes, including supplier access standards, customer evaluation systems, and order tracking systems.
   • It has achieved three-flow closed-loop control (capital, information, and logistics) and multi-level risk management.

Key Events and Financial Activities

• The company does not plan to distribute dividends, bonus shares, or capitalize reserves.
• It has increased its capital in Shenzhen Xinsen Jewelry Gold Supply Chain Co., Ltd. from 20 million yuan to 200 million yuan in August 2020.
• The company is planning a non-public share issuance of up to 293.6 million yuan to Wansheng Industrial Company to replenish working capital and expand business.
• The non-public share issuance has received approval from the CSRC and is in progress.

Summary of the Report

• The company has no material discrepancies in its financial data under Chinese GAAP and international accounting standards.
• It does not engage in online sales during the reporting period.
• The inventory of the jewelry business increased by 4.27%, with diamonds making up the largest portion (42.08%).
• The bicycle and lithium battery materials business faces challenges such as rising costs, but is benefiting from new national standards and technological upgrades.
• The company is actively expanding its jewelry supply chain and enhancing its financial strength.
• The jewelry industry is evolving towards brand segmentation, personalization, and online-offline integration.

Conclusion

The report highlights the company's strategic focus on jewelry and gold supply chain, bicycle and lithium battery materials, and its efforts to adapt to changing market conditions. It emphasizes the positive industry trends, the company's competitive advantages, and its future development plans. The financial performance shows growth in operating revenue, but net profit has declined significantly, indicating operational challenges. The company is taking steps to improve its financial structure and expand its market presence.