1、Annual Report 2021 1/237 Stock Code:603899 Short Name:M&G Corporation SHANGHAI M&G STATIONERY INC.Annual Report 2021 Annual Report 2021 2/237 Starting Afresh 2021 was a year full of challenges and opportunities for M&G and also was a year when M&G started afresh once again.Affected by COVID-19 resur

2、gence,Double Reduction,and weakening domestic expectations,the year 2021 was tough for all of us.Our colleagues and upstream and downstream partners demonstrated strong resilience and tackled the difficulties head on.The Companys One main body and two wings businesses maintained steady development a

3、nd solid growth,core competitiveness of the Company continued to improve.In the past year,every person was remarkable and it was not easy for everyone.We pushed the boundaries of our self-perception and limits of performance.As we all kow,life goes on and business needs to develop.We salute every re

4、markable M&G colleague!In 2021,the Company recorded revenue of RMB17.6 billion,an increase of 34%,and a net profit attributable to the parent company of RMB1.52 billion,an increase of 21%.The year 2021 is the beginning of Chinas 14th Five-Year Plan,and also the first year of M&Gs new five-year strat

5、egy.The Company applied new development philosophy to guide high-quality development and steadily executed Companys strategy.One important reason underlying the Companys solid and high-quality development is that we have a strong sense of mission and responsibility,and we have been insist on doing t

6、he tough but right things for more than 3 decades.In 2022,the international situation is complicated and the COVID-19 pendamic still has a long way to go.Some investors are concerned that demographic trends and Double Reduction negatively impact the realization of the Companys new five-year strategy

7、.We believe that if you desire something strong enough,you can always work out a way,there are always new demands in market,which need to be satisfied with innovative products and new capabilities.The key question is not whether you can or can not,but whether you want it or not.If you truly aspire t

8、o something,you can make the seemingly impossible come true.We see more opportunities in product categories,channel improvement,new business development,and international markets.We believe that difficulties and challenges are the touchstones of a good company,those with stronger management capabili

9、ty and better business models can excel.We also believe that in the face of difficulties,a strong internal Annual Report 2021 3/237 drive can better unleash our potentials.In addition to having a good energy,will and spirit,we also keep pace with the times,strive for innovation and embrace change,ke

10、ep an eye on macro trends,carbon neutrality,learn from outstanding industry leaders,take initiative to embrace new technologies such as artificial intelligence and metaverse,and continue to optimize our business eco-chain.This year,we also formulated our sustainable development strategy,with the mis

11、sion of Writing a Sustainable Business Future,with sustainable products,response to climate change,sustainable supply chain,and empowering employees and communities,as key pillars,in a bid to achieve high-quality and sustainable development.M&G has made its jouney for more than three decades.To real

12、ize our vision to become a world-class M&G,we need passion and dreams,sharing and focus,mission and responsibility,to provide better products and services for China and the world.We would like to express our heartfelt thanks to our employees,to our customers and partners,and to our shareholders,for

13、your support and trust.M&G is willing to work together with all of you,remain true to our original aspiration,and forge ahead to promote a sustainable,sound and high-quality development,and create better value for all shareholders.Strive towards a world-class M&G.We look forward to working with you

14、towards a bright future!Board of Directors of Shanghai M&G Stationery Inc.29 March 2022 Annual Report 2021 4/237 Important Notice I.The Board of Directors,Supervisory Committee,directors,supervisors and senior management of the Company warrant that the contents of this report are true,accurate and c

15、omplete,without any misrepresentation,misleading statements or material omissions,and severally and jointly bear the legal responsibilities thereof.II.All directors of the Company attended the Board meeting.III.BDO China Shu Lun Pan CPAs(LLP)has issued the audit report with unqualified opinions to t

16、he Company.IV.Chen Huwen,the chairman of the Company,Quan Qiang,CFO of the Company and Zhai Yu,the head of the accounting department(person in charge of accounting),warrant the truthfulness,accuracy and completeness of the financial report in this annual report.V.Profit distribution plan or plan to

17、convert surplus reserves into share capital approved by the Board of Directors during the Reporting Period The Company proposes to distribute cash dividend of RMB6.00(tax inclusive)per 10 shares based on the Companys total share capital registered as at the registration date for the implementation o

18、f dividend distribution.The profit distribution plan is subject to being submitted to the Companys 2021 annual general meeting of shareholders for deliberation.VI.Risks statement of the forward-looking statements Applicable Not applicable Forward-looking statements including future plans and develop

19、ment strategies involved in this annual report do not constitute the Companys substantive commitments to investors.The investors are advised to pay attention to investment risks.VII.Is there any non-operating misappropriation of funds of the Company by any controlling shareholders and their related

20、parties No VIII.Has the Company provided any external guarantees in violation of the decision-making procedures No IX.Are there more than half of the directors who cannot warrant the truthfulness,accuracy and completeness of the annual report disclosed by the Company No X.Warning on significant risk

21、s The Company has illustrated various risks and corresponding measures that the Company might face in the production and operation.Please refer to the Potential Challenges and Risks set out in Section III Management Discussion and Analysis.Investors are advised to pay attention to risk of investment

22、.Annual Report 2021 5/237 XI.Others Applicable Not applicable 本报告分别以中、英文编制，在对中外文文本的理解上发生歧义时，以中文文本为本报告分别以中、英文编制，在对中外文文本的理解上发生歧义时，以中文文本为准。准。This English version is converted from the Chinese version.In case of any discrepancy between the Chinese version and the English version,the Chinese version shal

23、l prevail.Annual Report 2021 6/237 Contents Section I Definition.7 Section II Company Profile and Key Financial Indicators.8 Section III Management Discussion and Analysis.12 Section IV Corporate Governance.38 Section V Environmental and Social Responsibility.52 Section VI Major Events.54 Section VI

24、I Changes in Shares and Shareholders.71 Section VIII Preferred Shares.79 Section IX Bonds.80 Section X Financial Report.81 References Financial statements signed and sealed by the legal representative,the person in charge of accounting work,and the person in charge of the accounting agency.Original

25、of the auditors report with the seal of the accounting firm and the signature and seal of the certified public accountant.Originals of all company documents and announcements publicly disclosed on the designated information disclosure media by CSRC during the Reporting Period.Annual Report 2021 7/23

26、7 Section I Definition I.Definition In this report,unless the content requires otherwise,the following terms shall have the following meanings:Definition of common terms The Report Refers to Annual Report 2021 Company,the Company,M&G Stationery,M&G Corporation Refers to SHANGHAI M&G STATIONERY INC.M

27、&G Group Refers to M&G Holdings(Group)Co.,Ltd.M&G Colipu Refers to Shanghai M&G Colipu Office Supplies Co.,Ltd.M&G Life（晨光生活馆）Refers to M&G Life Enterprise Management Co.,Ltd.（晨光生活馆企业管理有限公司）/Large retail store of the Company Colipu Information Technology Refers to Shanghai Colipu Information Technol

28、ogy Co.,Ltd.（上海科力普信息科技有限公司）M&G Technologies Refers to Shanghai M&G Information Technology Co.,Ltd.（上海晨光信息科技有限公司）Jiekui Investment Refers to Shanghai Jiekui Investment Management Firm(L.P.)Keying Investment Refers to Shanghai Keying Investment Management Office(L.P.)Jiumu Store（九木杂物社）Refers to Jiumu

29、M&G Store Enterprise Management Co.,Ltd.（九木杂物社企业管理有限公司）/Large retail store of the Company M&G Office Stationery（晨光办公）Refers to Shanghai M&G Office Stationery Co.,Ltd.Axus Stationery Refers to Axus Stationery(Shanghai)Company Ltd.Beckmann Refers to Back to School Holding AS KA Refers to Key Account,u

30、sually referring to large cross-regional retailers with large operating space and dense customer flow,including RT-MART,Walmart,Carrefour,and Hualian Supermarket.Core traditional business Refers to The designing,developing,manufacturing and selling writing instruments,student stationery,office suppl

31、ies and other products under M&G brands,and also the e-commerce business M&G Technologies New business Refers to Large retail store business and direct office supplies business Reporting period Refers to Year 2021,from 1 January 2021 to 31 December 2021 Yuan,ten thousand Yuan,hundred million Yuan Re

32、fers to RMB,RMB10,000,RMB100 million Annual Report 2021 8/237 Section II Company Profile and Key Financial Indicators I.Company Information Chinese name of the Company 上海晨光文具股份有限公司 Short name of the Company in Chinese 晨光股份 English name of the Company SHANGHAI M&G STATIONERY INC.Abbreviation of Engli

33、sh name of the Company M&G Legal representative of the Company Chen Huwen II.Contact Information Board Secretary Securities Affairs Representative Name Quan Qiang Bai Kai Office address No.5,Lane 288,Qianfan Road,Xinqiao Town,Songjiang District,Shanghai No.5,Lane 288,Qianfan Road,Xinqiao Town,Songji

34、ang District,Shanghai Telephone Fax E-mail irmg- irmg- III.Introduction to General Information Registered address Building 3,No.3469 Jinqian Road,Fengxian District,Shanghai Historical change of the Companys registered address No Office address No.5

35、,Lane 288,Qianfan Road,Xinqiao Town,Songjiang District,Shanghai Postal code of office address 201612 Website of the Company http:/www.mg- E-mail irmg- IV.Information Disclosure and Place for Obtaining the Report Media for the Companys information disclosure Shanghai Securities News,China Securities

36、Journal,Securities Daily,Securities Times CSRCs designated website for the Companys Annual Report disclosure The Companys Annual Report may be obtained at Board of Directors Office V.Stock Information Stock Information Share class Exchanges on which the stocks are listed Stock short name Stock code

37、Stock short name before change A share Shanghai Stock Exchange M&G Corporation 603899 M&G Stationery VI.Other Relevant Information Auditor of the Company(domestic)Name BDO China Shu Lun Pan CPAs(LLP)Office address 4F,No.61,Nanjing East Road,Shanghai Name of the signing accountant Chen Luying,Wang Ai

38、jia Annual Report 2021 9/237 VII.Major Accounting Data and Financial Indicators for the Past Three Years(1)Major accounting data Unit:Yuan Currency:RMB Major accounting data 2021 2020 Year-on-year change(%)2019 Revenue 17,607,403,250.12 13,137,745,727.18 34.02 11,141,101,364.44 Net profit attributab

39、le to shareholders of the listed companies 1,517,866,131.16 1,255,426,655.27 20.90 1,060,083,625.03 Net profit attributable to shareholders of the listed companies,net of non-recurring gains and losses 1,349,538,372.72 1,102,712,281.50 22.38 1,005,187,834.38 Net cash flow generated from operating ac

40、tivities 1,561,196,420.77 1,271,697,892.28 22.76 1,081,941,383.68 End of 2021 End of 2020 Year-on-year change(%)End of 2019 Net assets attributable to shareholders of the listed companies 6,194,891,978.00 5,193,568,712.05 19.28 4,201,500,384.99 Total assets 11,424,387,930.33 9,709,908,436.32 17.66 7

41、,565,115,311.74 (2)Key financial indicators Key financial indicators 2021 2020 Year-on-year change(%)2019 Basic earnings per share(Yuan/share)1.6450 1.3558 21.33 1.1523 Diluted earnings per share(Yuan/share)1.6425 1.3558 21.15 1.1523 Basic earnings per share,net of non-recurring gains and losses(Yua

42、n/share)1.4623 1.1908 22.80 1.0926 Weighted average ROE(%)26.82 26.91 Decrease by 0.09 percentage points 28.17 Weighted average ROE,net of non-recurring gains and losses(%)23.84 23.63 Increase by 0.21 percentage points 26.71 Explanation of major accounting data and financial indicators for the past

43、three years by the end of the Reporting Period Applicable Not applicable Revenue increased by 34%over the same period of last year,mainly due to the steady growth of core traditional businesses,and the rapid growth of new businesses,such as direct office supplies,M&G Colipu,and large retail store,Ji

44、umu Store.VIII.Difference in the Accounting Information under the PRC Accounting Standards for Business Enterprise(PRC GAAP)and Overseas Accounting Standards(1)Difference in net profit and net asset attributable to shareholders of the listed company in financial reports disclosed under International

45、 Accounting Standards and PRC GAAP Applicable Not applicable (2)Differences in net profit and net assets attributable to shareholders of the listed company in financial reports disclosed under International Accounting Standards and PRC GAAP Applicable Not applicable Annual Report 2021 10/237(3)Expla

46、nation on the differences between PRC GAAP and Overseas Accounting Standards:Applicable Not applicable IX.Key Financial Data for the Year of 2021 by Quarter Unit:Yuan Currency:RMB 1st Quarter(January-March)2nd Quarter(April-June)3rd Quarter(July-September)4th Quarter(October-December)Revenue 3,812,0

47、32,207.40 3,874,205,885.94 4,465,378,769.43 5,455,786,387.35 Net profit attributable to shareholders of the listed companies 328,287,641.63 337,933,717.24 450,980,712.92 400,664,059.37 Net profit attributable to shareholders of the listed company after non-recurring profit or loss 294,898,619.82 317

48、,991,294.61 379,204,649.17 357,443,809.12 Net cash flow generated from operating activities 164,242,625.68 195,854,913.73 624,933,296.07 576,165,585.29 Explanation on difference between information by quarter and information disclosed in periodical reports Applicable Not applicable X.Items and Amoun

49、ts of Non-recurring Gains or Losses Applicable Not applicable Unit:RMB Currency:RMB Items of Non-recurring Gains or Losses Amounts in 2021 Notes(if applicable)Amounts in 2020 Amounts in 2019 Gains or losses on disposal of non-current assets 6,098,090.22 Compensation for land expropriation by the Gov

50、ernment 169,704.92 6,081,606.95 Government subsidies included in profits and losses for the current period,excluding those closely related to the normal business and of fixed amount or fixed quantity granted on an on-going basis in accordance with certain standards and in compliance with the State p

51、olicies 163,887,877.43 Mainly including government subsidies received during the Reporting Period and government subsidies transferred from deferred income 135,222,930.01 42,747,681.46 Investment income arising from changes in fair values held-for-trading financial assets,derivative financial assets

52、,held-for-trading financial liabilities and derivative financial liabilities,and investment gains on the disposal of held-for-trading financial assets,derivative financial assets,held-for-trading financial liabilities,derivative financial liabilities and other debt investment,except the Company norm

53、al operations related to effective hedging business 43,557,663.15 Revenue generated from purchase of wealth management products 37,743,018.95 29,184,868.54 Annual Report 2021 11/237 Reversal of provision for impairment of receivables and contractual assets which are individually tested for impairmen

54、t.20,000,000.00 Mainly due to the provision reversal of bad debts on individual receivables of M&G Colipu 8,958,818.94 1,803,027.63 Other net non-operating income and expenses,other than the above items-11,127,909.82 Mainly including the expenditure of charity donations and the loss generated by scr

55、apping part of the old equipment 18,746,671.42-5,743,388.02 Minus:Effect of income tax 33,537,580.85 29,169,213.11 14,413,308.64 Effect of minority equity(after tax)20,550,381.69 18,957,557.36 4,764,697.27 Total 168,327,758.44 152,714,373.77 54,895,790.65 Non-recurring profit and loss items listed i

56、n the Explanatory Announcement on Information Disclosure by Companies Offering Securities to the Public No.1:Non-Recurring Profits and Losses are defined as recurring profits and losses Applicable Not applicable XI.Items Measured at Fair Values Applicable Not applicable Unit:Yuan Currency:RMB Items

57、Opening balance Closing balance Changes in the Period Effect on profit for the Period Held-for-trading financial assets 1,428,277,848.33 1,609,123,552.86 180,845,704.53 38,636,606.71 Receivables financing 61,412,976.46 22,824,707.62-38,588,268.84 Derivative financial assets Other debt investments(in

58、cluding other current assets)Other non-current financial assets Investments in other equity instruments 5,476,577.42 6,745,402.14 1,268,824.72 Held-for-trading financial liabilities Derivative financial liabilities 147,570.52 147,570.52 Total 1,495,167,402.21 1,638,841,233.14 143,673,830.93 38,636,6

59、06.71 XII.Others Applicable Not applicable Annual Report 2021 12/237 Section III Management Discussion and Analysis I.Discussion and Analysis of Operation The year 2021 is the beginning of Chinas 14th Five-Year Plan,also the first year of M&Gs new five-year strategy.The year was full of opportunitie

60、s and challenges.In face of the challenges posed by repeated COVID-19 outbreaks,Double Reduction policy and competition,the Company implemented the new development philosophy,to build a new development pattern,and focused on consumers to improve the quality and efficiency of development.Core traditi

61、onal business was steadily deveoloping while new businesses was fast expanding.In 2021,revenue reached RMB17.6 billion,an increase of 34%,and a net profit attributable to shareholders of listed companies was RMB1.52 billion,an increase of 21%.Under the leadership of the Board of Directors,the manage

62、ment and all employees achieved annual targets,laying a solid foundation for the new five-year strategy,established the Companys sustainable development strategy,and striding forward towards the vision of world-class M&G.Operation of the Company in 2021 is reported as follows:1.Core traditional core

63、 businesses continued product optimization During the Reporting Period,we adjusted the structure to promote growth and reduced the quantity and improved the quality of product development.The Company developed products with the idea of best-selling products and controlled number of SKUs.Achieved goo

64、d results in reducing quantity and improving quality.The number of new products dropped significantly,while the contribution of a single product increased significantly.The Company optimized the quality control process,enhanced the efficiency of supply chain,and improved new product development proc

65、ess.The growth performance of categories developed through IPD method was much better than average level.The Company adjusted the structure to promote growth by continuing to exert more efforts on high-end product development and optimize the product mix.We introduced a number of popular IPs,enrichi

66、ng our product category and further improving our product identity.Mass market stationery segment.With exploitation of potential,collaboration,product capability as the key words,continued the strong product strategy and developed less and better products.This segment continued to optimize product s

67、tructure and increase contribution of individual products.It established a mechanism to unleash the potential of long life cycle products and has achieved initial results.Promotion for category was carried out collaboratively with offline distribution channel to increase on shelf ratio,coordination

68、was made with online channel to identify potential products and form individual best-selling products for distribution.Online product management and ordering procedures were formulated to meet customer ordering needs and increase online sales of consumer products.Premium stationery segment.With the

69、direction of structural adjustment and high growth,we carried out product upgrading and best-selling products development,and M&G Youpin series saw a continuous upgrade.The contribution of individual products increased.The Company focused on the development of high-end products to satisfy high-end c

70、onsumer demand and optimize the existing product offering of premium stationery segment.We focused on Tiers 2 and 3 distribution centers and key stationery retail shops,promoted structural adjustment of partners and terminals through better category positions,and improved the proportion of premium s

71、tationery segment in traditional stationery shops.Arts and kids drawing segment.The Company optimized the product structure and new product development process,focused on the promotion of long life cycle products and essential products,continued to promote the building of arts and kids drawing area

72、in key stationery shops in various channels,developed national art stores,exerted more efforts on the leading stores and incremental stores,and improved the marketing rate of arts and kids drawing at stationery shops.We accelerated the expansion of online product lines and opportunity categories and

73、 created online best-selling products,seeing significant increase in the online share.We also actively seek to expand professional art and educational products.Office stationery segment.The Company strengthened the development and promotion of office products,focused on the development of innovative

74、 products solving pain points of end users,and created online product offering.The Company expanded M&G stores for office supplies and developed model stores for office supplies and developed large office stationery customers across the country.2.Core traditional businesses continued omni-channel,an

75、d improved retail service capabilities Annual Report 2021 13/237 During the Reporting Period,core traditional businesses continued omni-channel,following changing trend of consumption demand and habits,continued to optimize retail operation,towards a channel structure where multi-level distribution

76、as the main body,with more online,more direct to customer,omni-channle and multiple contact point.Further the change from a wholeseller toward a brand retail service provider.Develop traditional channels with a focus on improving individual store quality.The Company improved single store quality wit

77、h a focus on model stores;strengthened categories promotion and dedicated retail spaces for key products and increased on shelf ratio;promoted the upgrading of channel structure,and expanded leading stores and community business districts in the industry;empowered stationery shops and helped station

78、ery shops improve retail capacities.As of the end of the Reporting Period,the Company had 36 Tier 1 distributor partners across China,and Tiers 2 and 3 distributor partners in about 1,200 cities,covering over 80,000 retail stationery shops using the store sign M&G Stationery across China.Empowers st

79、ationery shops with digital tools.M&G Alliance APP covered more than 100,000 stationery shops,with a unified merchadize pool,built automated inventory replenishment mechanism.Based on users behavioral and order data,continuously tested and iterated product offering,empowering channel partners to man

80、age merchandize and improved order satisfaction rate.Therefore helped the right match between right shops and right productss,practiced our idea of partnership in business operation.Actively explore direct model.Continued to promote direct supply business from the headquarters to partners of the Com

81、pany.The office direct supply model has effectively developed,forming a building plan and combination strategy for the best-selling products of leading office stationery stores.Premium stationery segment continued to expand coverage of ideal domestic retail stationery shops(physical bookstores,varie

82、ty retail shops,and stationery retail terminals),and explored other new models.Increase online channels.Actively promoted online businesses,collaborated with the various segments to improve schedule and criterion for online product development;continued to optimize the structure of direct sales and

83、explored ways to optimize the creation of best-selling products;developed new channel businesses,continued to promote Pinduoduo and Tiktok,Kuaishou and other new channel businesses;improved membership program management.M&G Tmall Flagship Store has more than one million members and growing well.Duri

84、ng the Reporting Period,M&G Technologies revenue was RMB527,01 million,representing an increase of 11%from the previous year.3.Continue to improve brand image During the Reporting Period,the Company made progress in corporate brand,brand communication,and public relations,launched a number of season

85、-themed events such as cherry blossom season,children season and exam season,communicated unique selling points of products,and improved media efficiency and input-output ratio.Focusing on the concept of good Chinese stationery with warmth,we enhanced brand recognition of M&G in stationery shops and

86、 consumers.The company won the title of 2021 China Annual No.1 Stationery Brand Award and Chinas 500 Most Valuable Brands.4.Increase R&D investment,promote digitalization,and form new organizational capabilities Promote design and R&D.During the Reporting Period,the Company actively performed forwar

87、d-looking research and design,focused on core technology of products,accelerated the speed of technological progress and results transformation,improved quality based on the application performance indicators and actual usage scenarios that consumers can directly perceive.The Company has developed o

88、riginal products,such as the cutting technology of arc surface of pen tip,the development of quick-dry and smooth gel pen,and the industrys first food-grade kids art products(oil painting stick and color mud).Besides,the Company exerted efforts on quality improvement and control and applied machine

89、vision intelligent detection technology.During the Reporting Period,the Company led and participated in the compilation of a number of national standards,industry standards and group standards,enhancing the Companys influence in the pen-making industry and the cultural and sports industry.Improve pr

90、oduction management.During the Reporting Period,the Company vigorously promoted lean management,implemented cost reduction and efficiency enhancement,continued to promote MBS(M&G Business System)management,and integrated the MBS process improvement principle-standard with the Companys business model

91、 to continuously improve management capabilities.For the best-selling products,we established a rapid response mechanism among product development,sales,and production,shortened production lead time and improved order fulfillment rate.Annual Report 2021 14/237 Coordinate supply chain.During the Repo

92、rting Period,the Company promoted the integrated product development model from series to parallel model.The Company applied digitalization technologies to improve the accuracy of order forecasting;continued to make innovation with consumers as the center;continued to expand high-quality supply chai

93、n resources at home and abroad to provide guarantee for the development of high-end products.Logistics support.During the Reporting Period,the Company worked on building a logistics service that can support multiple business models.According to requirements of different business and diverse scenario

94、s,to provide differentiated,refined and efficient logistics service support for each business segment,strengthened logistics service support capability.Digitalization development.During the Reporting Period,following the blueprint for digital transformation,the Company focused on such key areas as m

95、embership operations and channel operations,strengthened data application and analysis capabilities as well as scalable system architecture capabilities,promoted the gradual integration of production,sales,and supply chain links,improved order response speed,and strengthened the management and inter

96、nal control,standardization and risk management.Construction of organization and talent.Organization and talents are important basis for realizing our strategy.During the Reporting Period,based on the Companys new five-year strategy,the Human Resources Center formulated targeted human resources plan

97、s based on business needs,continued to optimize organizational efficiency,incentive,talent management and corporate culture system.Focusing on the selection,use,training and retention of talents,we strived to build an efficient team that can support the realization of our five-year strategy plan.We

98、exerted intensified efforts on the MT program,improved long-and short-term incentive plan,ensure that employees pay attention to the achievement of the Companys performance in the current year and realize the long-term synchronous development of core employees and the Company.M&G keeps in mind the s

99、ocial responsibility of national enterprises and encourages employees to actively participate in various public welfare programs of the Company.During the Reporting Period,M&G was awarded the best social responsibility award in HRflag Employer Branding Creativity Competition.5.Large retail store bus

100、iness steadily developed Jiumu Store has a clear positioning in the Companys new five-year strategy,which is to become the bridgehead for M&G brand and product upgrading,and also to become a national leading premium recreation and creativity retail brand.Through more exposure of M&G brand and produc

101、ts,more product development of M&Gs premium strationery products,sharing retail capabilities,and providing timely consumer insights.During the Reporting Period,Jiumu Store improved merchandize capacity and efficiency;established a dynamic analysis platform to improve merchandize operation;devleped o

102、mni-channel marketing and promotion,better thematic seasonal marketing and rollout schedule,improved the accuracy of sales forecast,strengthened the accuracy of inventory replenishment and allocation,optimized in-store inventory.Jiumu Store improved operation quality of individual stores,through bet

103、ter store display,marketing&promotion,staff training;analyzed and followed up on the implementation of key retail indicators;continued to improve membership programs.It has more than one million registered members,which improved outreach to and interaction with consumers.During the Reporting Period,

104、facing the repeated outbreaks of the pandemic,M&G Life(including Jiumu Store)revenue was RMB1.05 billion,an increase of 60%,among which Jiumu Store revenue was RMB950 million,an increase of 70%.As of the end of the Reporting Period,the Company had 523 large retail stores in China,of which 60 are M&G

105、 Life stores,and 463 are Jiumu Stores(319 own stores and 144 franchise stores).During the Reporting Period,losses of the large retail stores reduced.Unit:RMB 0000 M&G Life(Jiumu Store)2021 2020 2019 3-year average Revenue 105,406.13 65,484.36 60,063.70 76,984.73 Net profit-2,108.65-5,022.93-804.67-2

106、,645.42 Of which,Jiumu Store 2021 2020 2019 3-year average Revenue 94,949.81 55,849.09 46,043.51 65,614.14 Net profit-2,255.78-4,207.86-693.11-2,385.58 6.Rapid growth of direct office supplies business Direct office supplies business,M&G Colipu saw continuous development.After nearly a decade since

107、its start,it has been built competitive capabilities needed as an industry-leader.Focusing on in-depth Annual Report 2021 15/237 exploration of existing customers and sales from new customers,Colipu expanded opportunities for new categories and new businesses such as MRO and marketing gifts,further

108、enhancing brand influence in the direct office supplies market,and being selected as the 2020 Shanghai specialized,refined,special and new SME.Customer development.As for central SOEs customers,we were shortlisted for projects of CHN Energy and China General Technology(Group)Holding Co.Ltd.;as for g

109、overnment customers,we were shortlisted for Jiangsu Provincial Government Procurement Online Mall;as for financial customers,we were shortlisted for the projects of Agricultural Bank and China Development Bank;as for MRO,we won the projects of PowerChina and China National Nuclear Corporation.Wareho

110、use distribution logistics.The East China Intelligent New Warehouse(Phase I)was put into use,starting a new generation of e-commerce intelligent warehousing system,and advanced automatic storage&retrieval system was adopted,becoming more intelligent warehousing logistics.Technology platform construc

111、tion.We upgraded and transformed the rule engine,realized process automation through RPA robots,and build a big data system and data center,improving Colipus overall work efficiency,and enhanced rapid response to provide customers with high-quality services.During the Reporting Period,M&G Colipus re

112、venue was RMB7.76 billion,an increase of 55%,net profit was RMB240 million,an increase of 68%.Unit:RMB 0000 M&G Colipu 2021 2020 2019 3-year average Revenue 776,565.05 500,027.59 365,806.17 547,466.27 Net profit 24,198.53 14,382.86 7,580.35 15,387.25 7.Deepen long-term incentives and protect shareho

113、lders rights and interests During the Reporting Period,the Company continued to better align Companys core management team and the Companys long-term value creation.Completed the additional stock grant under the 2020 restricted stock incentive plan.The initial grant of the 2020 restricted stock ince

114、ntive plan was exempted from restricted sales,strengthened alignment mechanism of the Companys senior management,key staff and shareholders.During the Reporting Period,the Companys share-based payment expenses for was RMB77.65 million.last year such expenses was RMB 82.19 million.The Company safegua

115、rds shareholders rights and interests and adopts a sustainable and stable dividend policy.Since the Company went public in 2015,including profit distribution plan for 2021,cumulative cash distribution has reached around RMB2.4 billion,sharing the Companys growth with all shareholders.During the Repo

116、rting Period,due to confidence in the Companys future development prospects,the Companys controlling shareholders acted in concert,Keying Investment and Jiekui Investment launched a shareholding increase plan to increase their holdings by 3 million shares from December 2021 to March 2022,with a tota

117、l amount of RMB176 million.8.Actively explore overseas markets The Companys products are exported to more than 50 countries and regions,with distribution and procurement networks in Thailand,Vietnam,Malaysia and other countries.During the Reporting Period,the COVID-19 pandemic situation in overseas

118、markets varied greatly,and the Company actively communicated with foreign customers to control business risks;used better marketing modes and online channels for product promotion and sales to adapt to market changes;promoted overseas markets and capability improvement,promoted M&Gs products and bus

119、iness models in Africa according to local conditions,sorted out product offerings suitable for the local market and carried out targeted product development.With the mission of providing affordable stationery for local students,we explored channels suitable for local conditions,laying a foundation f

120、or steadily enhancing global competitiveness.9.M&A progress Working on Axus Stationery turnaround Export business accounts for more than 70%of the sales revenue of Axus Stationery,and the overseas market has not fully recovered.During the Reporting Period,Axus Stationery focused on sales growth,cost

121、 reduction,and organizational downsizing and determined the positioning of specialized,full-scene,and mid-range.We increased revenue and reduced expenditure while reducing costs and increasing efficiency,improved quality and reduced cost,and properly adjusted the capacity and resource allocation of

122、production bases.Annual Report 2021 16/237 Acquire Beckmann,a Norwegian brand During the Reporting Period,the Company acquired the Norwegian high-end schoolbag brand Beckmann,which specializes in functional spin protection backpacks,an industry leader and national brand in Norway.We look forward to

123、ushering in a new chapter of development by combining M&Gs channel and supply chain advantages.During the Reporting Period,revenue of Beckmann was RMB120 million,among which RMB21 million was incorporated since acquision closing.II.Industry Situation of the Company during the Reporting Period 1.Indu

124、stry situation of the Company According to Guidelines for the Industry Classification of Listed Companies(revised in 2012)issued by China Securities Regulatory Commission,and results of industry classification of listed companies released by China Securities Regulatory Commission,the Company is clas

125、sified to stationery,arts,sports and entertainment products industry.The Company is a member of China Stationery&Sporting Goods Association,and China Writing Instrument Association.During January-November 2021,revenue of Chinas stationery and office supplies industry amounted to RMB147.1 billion,an

126、increase of 11%.There were 1,082 enterprises above designated size in Chinas stationery and office supplies industry(source:China Stationery&Sporting Goods Association).In 2021,217 enterprises above designated size in writing instrument industry recorded the revenue of RMB15 billion from principal b

127、usiness,an increase of 1%.In 2021,writing instrument industry exports amounted to USD2.8 billion,an increase of 21%from previous year,and the imports amounted to USD900 million,an increase of 13%from previous year.Chinas writing instrument industry imports have grown at an average annual rate of 3%o

128、ver the past decade.(Source:China Writing Instrument Association)The demand for stationery and office supplies were affected due to the joint release of Opinions on Further Reducing the Burden of Homework and Off-Campus Training in Compulsory Education by the General Office of the Central Committee

129、of the CPC and the General Office of the State Council in July 2021(Double Reduction)and the repeated outbreaks of the pandemic.At the same time,some new category opportunities arose,such as kids art and educational products ushering in new development space.The market of the direct office supplies

130、has been growing very fast in China.In 2020,the Ministry of Finance and the State Council further promoted centralized government procurement.At the same time,the standardization of centralized procurement by state-owned enterprises was further improved,and the concept of supply chain innovation and

131、 supplier credit investigation mechanism were introduced.According to relevant estimates,the market size of office supplies in China exceeds RMB2 trillion(source:).2.Industry features(1)Periodicity Writing instruments,student stationery and office supplies are less affected by economic fluctuations.

132、With low unit price,writing instruments and student stationery are more of necessity goods with relatively low income elasticity,relatively less sensitive to economic fluctuations.(2)Seasonality There is seasonality in the demand for student stationery.Months before a new semester(summer and winter

133、vacation)is what the stationery industry calls schooling peak season,during which sales of student stationery usually peaks.Students and their parents will buy a lot of stationery in advance and stationery manufacturers promote their products.There is less seasonality in the demand for student stati

134、onery.However,the demand for office stationery in the second half of the year might be slightly higher than that in the first half,as some companies bought stationery at the end of the year.Under the COVID-19 pandemic,the delay in school return date may affect the seasonal peak.3.Development trend o

135、f the industry With the changes in the way of life and consumption habit of consumers,Chinas retail industry entered a new stage of redevelopment and innovation.Stationery industry faces challenges with uncertainty of external environment,diversification of retail channels,and more individualized de

136、mands from main customers group(now being the post-90s and post-00s).With the changing demographics of China in particular the decreasing birth rate,stationery industry revenue growth comes less from by unit Annual Report 2021 17/237 volume growth,and more from consumption upgrade and product upgrad

137、e.Domestic market demand for mid-to high-end stationery products keeps increasing,reshaping market structure dominated by low-end products.This provides opportunities for mid-to high-end stationery products with better quality and higher price.Chinas population of 1.4 billion accounts for about 18%o

138、f global population,while leading stationery companies in China can continue to mostly rely on the huge domestic market,they also have room for international expansion in international markets,which could reinforce each other under favorable conditions.Leading enterprises focused on building omni-ch

139、annel operation capabilities and realized refined management over the offline channels.With the popularity of the Internet,smart phones,and online transactions,peoples consumption habits and consumption scenarios have changed.Consumers access to information is becoming more fragmented,and new-genera

140、tion marketing means are becoming more diversified,including online media platforms(such as Weibo,WeChat,Xiaohongshu,Tiktok)and IP topic creation,which further tests enterprises ability to make quick response to industry trends.Compared with small-and medium-sized enterprises,leading enterprises boa

141、st stronger and richer whole network marketing and operation capabilities.They formulate refined marketing strategies by city to reach consumers and capture fragmented traffic to achieve traffic attraction and conversion for online and offline businesses.To improve the stores initiative marketing an

142、d traffic operation capabilities,in addition to online traffic,offline channels are also required to realize refined management by empowering channels through organizational reform and information system.According to the National Bureau of Statistics,online retail sales across the country recorded R

143、MB13 trillion in 2021,an increase of 14%.Outstanding companies in the consumer industry seized the development opportunities of online consumption and achieved continuous sales growth through online and offline integration.Traditional retail stationery shops nearby school are still the dominant chan

144、nel for Chinas stationery industry,and shares of other retail formats are increasing faster.Sales terminals and channels of the industry are becoming more diversified,upgrading and competition in channels becomes more obvious.Domestic consumption for stationery in China becomes more brand conscious,

145、innovative,individualized and more premium.There is a growing demand for premium cultural and creative products,stationery products are moving from those primarily focus on functionality towards those with more cultural and creative elements catering to customers.There are around thousands of statio

146、nery manufacturers in Chinas domestic stationery industry and the industry is quite decentralized.There are a few leading companies for most sub-category stationery products,with continued development in the stationery industry,there could be higher industry consolidation,and leading companies could

147、 gain larger market shares.In recent years,in the context of the digital economy,thanks to favorable factors such as policy driving,the rapid advancement of centralized procurement by large-and medium-sized enterprises,and the competition among various digital procurement service providers,great pro

148、gress has been made in the digitalization,e-commerce and centralization of public procurement in China,which have become the main form of public resource transactions from central to local governments.Facing the shock of economic situation at home and abroad,digital,e-commerce,and centralized procur

149、ement exhibits advantageous coordination and quick response ability.According to the China Public Procurement Development Report(2020)compiled and released by China Federation of Logistics&Purchasing,the scale of public procurement transactions in China in 2019 exceeded RMB20 trillion,accounting for

150、 more than 20%of Chinas total GDP.In terms of the procurement scale of the government,State-owned Key Enterprises,and local state-owned enterprises,the annual procurement scale of government and enterprises in China is also quite large.According to relevant estimates,the market size of office suppli

151、es in China exceeds RMB2 trillion(data source:).In addition,the market size of employee benefits and other categories is also quite large.With the further development and application of information technology.Traditional industries have gained growth momentum in the digital age.Industrial digitizati

152、on is becoming the main pillar of the digital economy,and traditional industries are actively gaining new development momentum through digital empowerment.The investment in the manufacturing industry has shifted from the investment in equipment and assembly lines to the transformation of digital pro

153、cesses and digital transformation of products,in a bid to apply digital technology to reduce channel costs and management costs and become a digital-driven modern enterprise.With smart technology and products upgrade,promotion of national education informatization and the development of the online e

154、ducation market,smart stationery products have developed rapidly in the past few years.Technology-empowered smart pens and smart books are widely adopted in online Annual Report 2021 18/237 education,providing an increasingly better user experience.Technology-empowered smart pens and smart books are

155、 widely adopted in online education,providing a better user experience.4.Company position in the industry As a leader of own brand+domestic demand in Chinas stationery industry,the Company has a strong first-mover and leading advantage,with a wide and deep distribution network coverage in Chinas sta

156、tionery market.At the end of the Reporting Period,the Company has a national distribution network covering over 80,000 retail stationery shops using the store sign M&G Stationery across China,enabling the Company to establish market leading position for its own brand products amidst competitions.The

157、 Company ranked first in Top Ten Enterprises in Chinas Light Industry and Writing Instrument for nine consecutive years.M&G Colipu is a leader in the field of B2B office supplies in China.After nearly ten years since its start,thanks to its electronic transaction system,intelligent warehousing logis

158、tics management system,high-quality supply chain management and customized service,M&G Colipu has become one of the industry leaders of digital enterprise procurement service provider.For many years,M&G Colipu has won many awards such as the Outstanding E-commerce Platform in Chinas Stationery and O

159、ffice Supplies Industry,the Outstanding Supplier of Government Procurement,and the Most Influential E-commerce Platform in Financial Procurement.III.The Companys Businesses during the Reporting Period 1.Principal business M&G Stationery is a comprehensive stationery supplier and an office servicer.T

160、he Company integrates the value of creativity into its products and service advantages,advocates fashionable stationery lifestyle,and provides solutions for study and work.Its core traditional businesses include designing,developing,manufacturing and selling writing instruments,student stationery,of

161、fice supplies and other products under brands,and also the e-commerce business M&G Technologies;its new businesses mainly comprise of large retail store business-Jiumu Store and M&G Life,and direct office supplies business-M&G Colipu.During the Reporting Period,there were no significant changes in t

162、he Companys principal business and operation model.2.Principal operation model The Company has an independent and complete operation from design and development of brands and products,procurement of raw materials and accessories,product manufacturing,supply chain management and warehouse and logisti

163、cs,to distribution network management.The Company is capable of performing independent operation of business in the market.For R&D and new products development model,the Company has an entire design system covering the whole process starting from customer value proposition to product design,product

164、mold to brand image design,incorporating trend-,theme and experience-oriented development model to develop new products with a comprehensive categories approach based on consumer insight.For manufacturing model,the Company uses the brand manufacturing model that features sales-driven production,in-h

165、ouse and OEM outsourcing.The Company has an independent system from raw material procurement to manufacturing and selling,and has established its brands in the market.We have the advantages from participating in the whole value chain from design,research and developing,manufacturing and selling stat

166、ionery.For sales model,based on features of stationery products and current situations of domestic stationery consumption,the Company has developed its sales model that relies on regional distributors,complemented by direct sales to offices 2B customers,direct-sale store,KA sales,online sales,as wel

167、l as international distribution.We are the one of leading companies in Chinas stationery business that engage in large-scale brand sales management and franchise management.The business of M&G Technologies is mainly divided into platform business such as Tmall,JD,and Pinduoduo,and live streaming bus

168、iness such as Tiktok and Kuaishou.M&G Technologies is also responsible for online full platform marketing and management of authorized online stores.M&G large retail store businesses include two store types:Jiumu stores and M&G Life stores.Targeting female consumers aged 15-29,Jiumu Stores primarily

169、 sell stationery,cultural and recreative products,educational and entertainment products,and daily household and home products.Jiumu stores are mostly located in high-quality shopping malls in prime urban districts.Jiumu stores represent the Companys ongoing exploration in new retail model in lifest

170、yle products with a distinct cultural element.Annual Report 2021 19/237 Jiumu Store started franchising in July 2018,where franchisees pay contract deposit and decoration fee according to contracts,and store rent,store staff salary,utilities and other costs incurred in franchising stores.M&G Life st

171、ores mainly target students aged 8-15,primarily selling stationery products.M&G Life stores mostly locate in Xinhua Bookstore and compound bookstores,M&G Life stores represent the Companys efforts to move beyond the dominant traditional channels of retail stationery shops nearby schools.In the direc

172、t office supplies business,M&G Colipu provides governments,public institutions,Fortune Global 500 companies and other SMEs with cost-effective one-stop office supplies procurement service.M&G Colipu has a rich product offering,covering office supplies,MRO industrial products,marketing gifts,employee

173、 benefits and corporate services,more than one million products including office paper,office stationery,office supplies,office equipment,computers and accessories,digital and communications,office appliances,daily necessities,labor protection industrial supplies,food and beverages,business gifts an

174、d office furniture.By shortening the supply chain,M&G Colipu provides customers with cost-effective procurement and customized value-added services.With changing demographics of China in particular the decreasing birth rate,it becomes increasingly difficult to achieve revenue growth from unit volume

175、 growth in the future,and stationery industry growth is increasingly driven by consumption upgrade and product upgrade.The Companys core traditional businesses are challenged with changing demands from more individualized population born after 1990 and 2000.Stationery consumption in China is becomin

176、g more brand conscious,innovative,individualized and more premium.There is a clear growth in demand for better cultural and creative products,which accelerates industry transformation towards one with more cultural and creative elements.M&G Technologies reflects channel diversification trend and hel

177、ps the Companys omni-channel strategy by expansion of online business.Jiumu stores and M&G Life stores both serve as the Companys bridgehead to continue products and channels upgrading of its core traditional businesses,and they play an important role in promoting the Companys brands and products up

178、grade.M&G Colipus direct office supplies business meets demands for purchasing office supplies from large corporations and institutions,which helps boosting the sales of writing instruments and office stationery of the Companys core traditional business.3.Major driver for revenue growth Driven by ma

179、rket force With the changes in the way of life and consumption habit of consumers,the mix of people,product,and place in retail industry has been reconstructed,sales channels have become more diversified,and channel upgrades and channel competition have become increasingly fierce.The per capita inco

180、me of residents has continued to grow,and consumption and products have been upgraded.As the domestic market demand for mid-to high-end stationery products keeps increasing,this provides opportunities for mid-to high-end stationery products.Chinas population accounts for about 18%of global populatio

181、n,while leading stationery companies in China can continue to mostly rely on the huge domestic market,they also have room for international expansion in international markets,which could reinforce each other under favorable conditions.Driven by innovation Innovation as one of driving forces for cont

182、inuous development with a focusing on consumers.The Company continued to promote technological innovation,product innovation,channel innovation and business model innovation.Through product innovation and business model innovation,the Company has formed a pattern of coordinated development,high-qual

183、ity development and sustainable development of multi-business model.Driven by the Companys competitive advantages With professional teams,market insights,unique brand advantages,channel advantages,supply chain advantages,R&D and design advantages,the Company continued to promote technological innova

184、tion and product innovation,and maintained a strong forward driving force through high-end,omni-channel,digital empowerment,lean production and dynamic organization.Driven by policy The continuous investment of the state in education,the three-child policy and a favorable policy context for the deve

185、lopment of the cultural industry encourage and promote the integrated development of the cultural industry and upstream and downstream industries,invigorate economic transformation and social development,and drive the steady development of the stationery industry.A series of national policies on the

186、 centralized procurement industry have been promulgated,rapid progress was made in Annual Report 2021 20/237 centralized procurement of large-and medium-sized enterprises,various digital procurement service providers competed with each other,the transparency of procurement information and the compet

187、itive mechanism of centralized procurement promoted the concentration of office supplies industry and promoted the vigorous development of direct office supplies industry.Driven by industry integration With continued development in the market,market concentration of stationery industry becomes great

188、er,leaving more room for industry consolidation.Leading companies in the stationery industry with good brand recognition are in a strong position,and more market share are gained by leading companies.Through mergers and acquisitions of high-quality targets at home and abroad,the Company further enha

189、nced its competitiveness and brand power in segmented categories.IV.Analysis on Core Competitiveness during the Reporting Period Applicable Not applicable As one of the largest stationery manufacturers in the world,the Company has formed a unique competitive advantage in terms of brand,channel,suppl

190、y chain,design,and R&D.During the Reporting Period,the Company withstood the test of COVID-19 pandemic,greatly improving the product strength,channel strength and brand strength and the Companys core competitiveness.1.Corporate culture and team M&G is a company with a strong sense of mission and soc

191、ial responsibility.With the mission of make study and work more joyful and effective,it is committed to providing Chinese students with affordable good domestic stationery,and continues to devote itself to various social welfare undertakings,thereby promoting its continuous development.At the same t

192、ime,the Company has cultivated a team that highly recognizes the Companys values,has passion and technology,is competitive in the industry,is united and enterprising,and keeps unremitting struggle.2.Brand advantage As a leader of own brand+domestic demand in Chinas stationery industry,the Company ha

193、s established a leading position for its own brand products amidst competitions of domestic market.The Company ranked the first in Top Ten Enterprises in Chinas Light Industry and Writing Instrument for ten consecutive years.M&G brand has sound brand recognition among consumers,and served as the des

194、ignated stationery brand for Boao Forum for Asia for many years.During the Reporting Period,the Company won the title of 2021 China Annual No.1 Stationery Brand Award and Chinas 500 Most Valuable Brands,winning international praise with excellent quality and brand reputation and showing the brand va

195、lue of Chinese stationery to the world.3.Channel advantage The Company has a strong first-mover and leading advantage with a wide and deep coverage of distribution network across China.The Company has established an efficient distribution management system and a domestic terminal network with deep p

196、enetration.During the Reporting Period,the Company continued to broaden and deepen the national network and perfected online and offline channels,forming an omni-channel,multi-level and multi-contact marketing network.At the end of the Reporting Period,the Company has 36 tier-one distributor partner

197、s,and about 1,200 tier-two and tier-three distributor partners across China,covering over 80,000 retail stationery shops with M&G Stationery logo across China,523 direct large retail stores,and thousands of authorized stores in Taobao system,JD.com,Pinduoduo and other e-commerce channels.4.Supply ch

198、ain advantage The Company benefits from experience of large-scale manufacturing accumulated throughout the past years,independent mold development capability,stable supply chain,sound quality control system and introduction of various information management systems.The Company has the capability of

199、large-scale manufacturing with high quality control standard.The good and stable product quality has won general recognition and favorable comments from consumers.The Company promotes the application of intelligent manufacturing technology in the production and inspection links of the stationery ind

200、ustry,and applies machine vision technology in various key links to greatly improve the efficiency of production Annual Report 2021 21/237 and inspection,thus serving as a benchmark and demonstration role for transforming the extensive industrial mode into an intensive one.With the idea of partnersh

201、ip in its business operation,the Company has strived to build a high standard supply chain ecosystem.The Company keeps iterating and upgrading its scientific management for supply chain,and has obtained new practice achievements in information collaboration across the value chain,inventory optimizat

202、ion,financial support for supply chain,management informatization of quality and order,and optimization of supplier performance to help business partners get stronger operation system and simultaneously improve both loyalty and operation capability of our business partners.5.Design and R&D advantage

203、 The Company has the capability to respond timely to market and strong R&D capacity for new products.The Company conducts market research for new product development and identifies market trends.The Company launches about one thousand new products each year to meet consumer needs.The Company has bee

204、n awarded with such four major international industrial design awards as German iF Award,Red Dot Design Award,G-mark,and IDEA for its product design.The Company has a design studio in Israel,highlighting the world-class design capabilities of M&G Stationery.During the Reporting Period,through struct

205、ural innovation and technological innovation,the Company has developed a variety of products such as quick-dry gel pens,super durable writing pencils,and food-grade art painting materials.The magnetic levitation gel pen,Magneter,won German iF Award again,the automatic compass won G-mark Award again,

206、and TIKITAKA press marker won the Silver Award for Innovation in Culture and Education-Technological Innovation in 2021.At the end of the Reporting Period,the company has gotten 841 patents.The Company has broken through the foreign technical barriers and got hold of the raw material formula and pro

207、duction technology with domestic independent intellectual property rights,greatly enhancing the percentage of home-made raw materials and finished products.The Company has been recognized as a national high-tech enterprise since 2010,and has built a number of national or provincial level technology

208、platforms such as National Industrial Design Center,China Key Laboratory of Light Industry and Writing Instrument Engineering Technology,Shanghai Writing Instrument Engineering Technology Research Center.The testing laboratory of the Company had CNAS certification qualification and its testing capab

209、ilities have reached world-class level.During the Reporting Period,the Company won the 13th Five-Year Plan China Light Industry Science and Technology Innovation Advanced Group Award.The development and industrialization of water-based ballpoint pen with regulator won the First Prize for Science and

210、 Technology Progress Award of China National Light Industry Council.The material and key manufacturing technology and industrialization of gel ballpoint pens won the second prize of Shanghai Science and Technology Award.6.M&G Colipus competitive advantages As a B2B comprehensive e-commerce platform

211、built by M&G Group,M&G Colipu is committed to providing customers with smart office and MRO(Maintenance,Repair and Operations)solutions and has become one of the industry leaders.After nearly ten years of development,M&G Colipu has accumulated rich experience in key accounts and large project servic

212、es,and has boasted the leading advantage as a professional office and MRO service provider in the industry.Through the customer service network covering 31 provinces and cities across China,it is now serving more than 60,000 customers in 5 categories including government,finance,State-owned Key Ente

213、rprises and state-owned enterprises,intermediate market,and MA(Fortune Global 500),providing customers with one-stop procurement service solutions.Nowadays,more and more customers take M&G Colipu as their preferred comprehensive e-commerce service platform.M&G Colipu is committed to providing high-q

214、uality,low-price,and professional procurement services for customers.Relying on its own advantages in the global procurement supply chain platform,M&G Groups strong brand influence,strong financial strength,and rich product strength,M&G Colipu strictly selects authorized manufacturers and genuine li

215、censed products,directly cooperates with manufacturers and brand owners,forms strategic alliances and conducts large-scale procurement,fully enjoying the market price advantage.At the same time,M&G Colipu not only owns nearly one million square meters of super-large commodity storage space,but also

216、has a 5-level warehousing system network that effectively covers the whole country,responds to orders efficiently and quickly,and maximizes customer demand for delivery timeliness.It uses intelligent warehousing and distribution systems such as AGV(Automated Guided Vehicle),WMS(Warehousing Managemen

217、t System),TMS(Transportation Annual Report 2021 22/237 Management System),G7(Vehicle Management System),and built 7 regional distribution centers across the country.Its logistics network covers 100%of the counties in Chinese mainland,providing timely and accurate service to customers.Meanwhile,M&G C

218、olipu is also a pioneer and industry leader in procurement digitalization,and has won the titles of National E-commerce Demonstration Enterprise and Shanghai E-commerce Demonstration Enterprise.M&G Colipu has invested a professional technical development team consisting of more than 200 people in di

219、gitalization for a long time.Through independent research and development of core digital transaction system and rapid and professional system integration development technology,by virtue of AI and big data analysis,it provides a variety of personalized system integration and value-added services fo

220、r different customers to offer flexible ordering modes,thereby rendering one-stop office procurement service for different types of customers.The realization of process automation through RPA robots and the establishment of big data systems and a data middleground effectively guarantee M&G Colipus a

221、bility to provide high-quality services and rapid response to major enterprises and public institutions.M&G Colipu has a professional team of nearly 2,000 people with enterprising spirit,profession,years of industry experience and lofty ideals,end-to-end service teams from pre-sales to after-sales c

222、overing 31 provinces,municipalities and autonomous regions across China.Through the flattening of the supply chain,M&G Colipu continues to provide customers with one-stop service procurement solutions that reduce cost and enhance efficiency.Relying on M&G Groups strong brand influence,strong financi

223、al strength,and rich product strength,M&G Colipu adheres to the information-based construction of an integrated,transparent and efficient procurement system.With the application of software and hardware intelligent technology and strong system integration technical support,such procurement system me

224、ets the diversified,complex and digital procurement needs of customers,creates a new enterprise service ecological chain,and continues to create value for customers.V.Financial Performance during the Reporting Period In 2021,the Company revenue was RMB17,607,403,300,representing a year-on-year incre

225、ase of 34.02%.The net profit attributable to shareholders of the listed company amounted to RMB1,517,866,100,representing a year-on-year increase of 20.90%,while net profit attributable to shareholders of the listed company after deducting non-recurring profit and loss amounted to RMB1,349,538,400,r

226、epresenting a year-on-year increase of 22.38%.As at the end of 2021,the total asset of the Company amounted to RMB11,424,387,900,representing a year-on-year increase of 17.66%.The net asset attributable to shareholders of the listed company amounted to RMB6,194,892,000,representing a year-on-year in

227、crease of 19.28%.The Company has maintained health growth and sound asset condition.(1)Analysis of principal operation 1.Analysis of change in certain items in income statement and cash flow statement Unit:Yuan Currency:RMB Item Amount in the current period Amount in the same period last year Change

228、 in the proportion(%)Revenue 17,607,403,250.12 13,137,745,727.18 34.02 Operation cost 13,520,841,753.26 9,806,609,999.48 37.87 Selling expenses 1,397,645,460.82 1,103,184,023.51 26.69 Administrative expenses 745,024,738.28 602,627,135.41 23.63 Financial expenses 6,904,764.52 9,060,176.35-23.79 R&D e

229、xpenses 188,758,215.50 160,178,941.89 17.84 Net cash flow generated from operating activities 1,561,196,420.77 1,271,697,892.28 22.76 Net cash flow generated from investing activities-662,837,857.46-1,065,448,932.04 Not applicable Net cash flow from financing activities-729,259,846.78-200,057,726.09

230、 Not applicable Taxes and surcharges 66,507,958.32 50,694,964.71 31.19 Other income 72,747,727.93 45,665,409.77 59.31 Investment income 6,293,164.04 3,851,154.70 63.41 Annual Report 2021 23/237 Credit impairment losses-7,013,714.54-38,225,902.12 Not applicable Asset impairment loss-17,091,366.45-40,

231、287,483.83 Not applicable Gains from asset disposal 6,098,090.22 169,704.92 3,493.35 Explanation on the reason for change in revenue:During the Reporting Period,sales continued to grow,with 17%growth in core traditional business and 56%growth in new business.Explanation on the reason for change in o

232、perating cost:The increase in sales results in the increase in operating cost.Explanation on the reason for change in net cash flow from investing activities:During the reporting period,the net outflow decreased compared with the same period last year,mainly due to the decrease in the net outflow of

233、 bank financial products compared with the same period last year.Explanation on the reason for change in net cash flow from financing activities:The increase in net outflow during the Reporting Period compared with the same period last year is mainly due to:1.minority shareholders paying cash in equ

234、ity for the acquisition of M&G Life during the Reporting Period;2.implementing new lease criteria and reclassifying the rent paid from operating activities to financing activities;3.increase in cash dividend distribution from the same period last year.Reason for the change in taxes and surcharges:Th

235、e increase in sales results in the increase in taxes.Explanation on the reason for change in other income:M&G Colipu received more government subsidies related to its operations compared with the same period last year.Explanation on the reason for change in investment income:The income from wealth m

236、anagement products received during the Reporting Period increased compared with the same period last year.Explanation on the reason for change in credit impairment losses:M&G Colipu accrued the bad debt provision for prepaid accounts in the same period last year.Explanation on the reason for change

237、in asset impairment losses:The provision for goodwill impairment loss was accrued in the same period last year.Explanation on the reason for change in income from asset disposal:The income from disposal of some assets during the Reporting Period increased compared with the same period last year.A de

238、tailed description of the major changes in the Companys business type,profit composition or profit source in the current period Applicable Not applicable 2.Analysis of revenue and cost Applicable Not applicable During the Reporting Period,the Companys core traditional business increased by 17%as com

239、pared to the corresponding period of last year,and new business increased by 56%as compared to the corresponding period of last year.(1).Result of principal business by industry,product,region and sales model Unit:Yuan Currency:RMB Result of principal business by industry By industry Revenue Operati

240、on cost Gross margin(%)Change in revenue from last year(%)Change in cost from last year(%)Change in gross profit margin from last year(%)Manufacturing and sales of stationery and office supplies 9,164,013,924.44 6,154,383,727.87 32.84 18.31 19.15 Decrease by 0.47 percentage points Retail industry 8,

241、436,809,332.25 7,362,168,406.68 12.74 56.66 58.63 Decrease by 1.08 percentage points Service industry 1,261,896.79/-46.71/Result of principal business by product By product Revenue Operation cost Gross margin(%)Change in revenue from last year(%)Change in cost from last year(%)Change in gross profit

242、 margin from last year(%)Writing 2,819,668,310.67 1,675,601,917.98 40.57 23.65 24.18 Decrease by 0.25 Annual Report 2021 24/237 instruments percentage points Student stationery 3,128,136,090.69 2,092,845,598.55 33.10 15.61 16.18 Decrease by 0.33 percentage points Office stationery 3,338,458,451.38 2

243、,406,762,021.35 27.91 18.32 18.88 Decrease by 0.34 percentage points Other products 548,909,924.21 303,216,598.14 44.76 69.81 68.34 Increase by 0.48 percentage points Direct office supplies 7,765,650,479.74 7,038,125,998.53 9.37 55.30 58.12 Decrease by 1.61 percentage points Management fee for franc

244、hising 1,261,896.79/-46.71/Result of principal business by region By geography Revenue Operation cost Gross margin(%)Change in revenue from last year(%)Change in cost from last year(%)Change in gross profit margin from last year(%)China 17,183,757,602.59 13,183,280,401.69 23.28 34.56 38.65 Decrease

245、by 2.26 percentage points Other countries 418,327,550.89 333,271,732.86 20.33 15.26 11.91 Increase by 2.39 percentage points Principal business by industry,product,region,and sales model 1.Revenue from principal business of the Company includes revenue from manufacturing and selling stationery and o

246、ffice supplies,revenue from retail industry and revenue from service industry.2.Revenue from retail industry refers to revenue gained by M&G Colipu and M&G Life through selling non-M&G products.During the Reporting Period,sales of the above categories grew continuously.3.Revenue from service industr

247、y refers to management fee for franchising.The reason for the decrease during the Reporting Period was that the management fee for franchising in the same period last year consisted of traditional channels and Jiumu Store.The franchise stores of traditional channels stopped charging franchise manage

248、ment fees since 2017.The management fees that have been collected are recognized in the benefit year,and have been fully recognized by the end of 2020.During the Reporting Period,the management fee for franchising is only the part charged by Jiumu Store.4.Writing instruments refer to products of wri

249、ting utensil sold by the Company(excluding M&G Colipu).5.Student stationery refers to products of student stationery sold by the Company(excluding M&G Colipu).6.Office stationery refers to products of office supplies sold by the Company(excluding M&G Colipu).7.Other products refer to products sold b

250、y the Company(excluding M&G Colipu)apart from writing instruments,student stationery and office supplies.During the Reporting Period,the business of Jiumu Store developed rapidly.8.Direct office supplies refer to products in all categories sold by M&G Colipu.During the Reporting Period,business of M

251、&G Colipu developed rapidly.Unit:RMB 0000 Result of revenue by business Business Revenue in 2021 Revenue in 2020 Change in amount Change Core traditional business 888,041.44 757,611.01 130,430.43 17%Colipu Office Supplies business 776,565.05 500,027.59 276,537.46 55%Large retail store business 105,4

252、06.13 65,484.36 39,921.77 61%Transactions offset-9,272.29-9,348.39 76.10 Notapplicable Total 1,760,740.33 1,313,774.57 446,965.76 34%(2).Analysis of production and sales volume Applicable Not applicable Major products Unit Production Sales Inventory Change in production from last year(%)Change in sa

253、les from last year(%)Change in inventory from last year(%)Writing instruments Piece 2,725,504,078 2,722,066,365 598,473,624 17.09 17.67 0.58 Annual Report 2021 25/237 Student stationery Piece 5,740,014,834 5,738,966,028 665,367,649 7.17 7.55 0.16 Office stationery Piece 1,901,462,010 1,893,466,329 1

254、63,035,860 17.26 17.96 5.16 Other products Piece 17,478,919 16,031,840 7,540,044 70.78 67.82 23.75 Direct office supplies Numbers 462,390,344 462,875,797 21,797,693 23.20 23.71-2.18 Explanation on production and sales volume The simultaneous increase in the production volume and sales volume of othe

255、r products was mainly attributable to the growth of the business of Jiumu Store.(3).Performance of major procurement contracts and major sales contracts Applicable Not applicable (4).Analysis of cost Unit:RMB Yuan By industry By industry Cost item Amount in the current period Percentage of total cos

256、ts for the current period(%)Amount in the same period last year Percentage of total costs for the same period last year(%)Percentage change in the amount for the current period as compared to the same period last year(%)Explanation on the situation Manufacturing and sales of stationery and office su

257、pplies Cost of principal business 6,154,383,727.87 45.53 5,165,288,162.73 52.67 19.15 Retail industry Cost of principal business 7,362,168,406.68 54.47 4,641,066,357.09 47.33 58.63 Service industry/By product By product Cost item Amount in the current period Percentage of total costs for the current

258、 period(%)Amount in the same period last year Percentage of total costs for the same period last year(%)Percentage change in the amount for the current period as compared to the same period last year(%)Explanation on the situation Writing instruments Cost of principal business 1,675,601,917.98 12.40

259、 1,349,337,371.37 13.76 24.18 Student stationery Cost of principal business 2,092,845,598.55 15.48 1,801,327,917.08 18.37 16.18 Office stationery Cost of principal business 2,406,762,021.35 17.81 2,024,465,110.41 20.64 18.88 Other products Cost of principal business 303,216,598.14 2.24 180,119,757.5

260、7 1.84 68.34 Direct office supplies Cost of principal business 7,038,125,998.53 52.07 4,451,104,363.39 45.39 58.12 Management fee for franchising/Explanation on other situations of cost analysis Cost increased simultaneously with sales.The growth in the costs of other products and direct office supp

261、lies business is mainly due to the rapid development of the businesses of Jiumu Store and M&G Colipu as well as the increase in sales volume.(5).Change in the scope of consolidation due to change in the equity of major subsidiaries during the Reporting Period Applicable Not applicable Annual Report

262、2021 26/237 (6).Major change in or adjustment to the Companys business,products or services during the Reporting Period Applicable Not applicable (7).Major customers and suppliers A.Major customers of the Company Sales of the top 5 customers amounted to RMB3,428,820,000,accounting for 19.47%of the t

263、otal annual sales.Of the sales of the top 5 customers,sales of related parties amounted to RMB0,accounting for 0%of the total annual sales.Unit:RMB Yuan Rank Customer name Amount Related relationship 1 First 955,989,559.24 No 2 Second 951,207,384.99 No 3 Third 573,513,431.36 No 4 Fourth 485,163,509.

264、56 No 5 Fifth 462,949,866.20 No Total 3,428,823,751.35 During the Reporting Period,the sales attributable to a single customer exceeded 50%of the total sales,there are new customers among the top 5 customers,or a small number of customers were heavily depended on.Applicable Not applicable B.Major su

265、ppliers of the Company Purchase amount of the top 5 suppliers amounted to RMB1,542,210,000,accounting for 11.57%of the total annual purchase amount.Of the purchase amount of the top 5 suppliers,purchase amount of related parties amounted to RMB0,accounting for 0%of the total annual purchase amount.U

266、nit:RMB Yuan Rank Rank of suppliers Amount Related relationship 1 First 469,791,220.48 No 2 Second 374,546,120.03 No 3 Third 323,688,344.90 No 4 Fourth 254,466,232.55 No 5 Fifth 119,720,153.14 No Total 1,542,212,071.10 During the Reporting Period,the procurement from a single supplier exceeded 50%of

267、 the total amount,and there were new suppliers among the top 5 suppliers or a small number of suppliers were heavily depended on.Applicable Not applicable Other descriptions No 3.Expenses Applicable Not applicable Unit:RMB Yuan Item in statement Amount in the current period Amount in the last period

268、 Change in the proportion(%)Reason for change Selling expenses 1,397,645,460.82 1,103,184,023.51 26.69 Administrative expenses 745,024,738.28 602,627,135.41 23.63 R&D expenses 188,758,215.50 160,178,941.89 17.84 Financial expenses 6,904,764.52 9,060,176.35-23.79 Annual Report 2021 27/237 4.R&D inves

269、tment(1).Table of R&D investment Applicable Not applicable Unit:RMB Yuan Expensed R&D investment in the current period 188,758,215.50 Capitalized R&D investment in the current period 0.00 Total R&D investment 188,758,215.50 Proportion of total R&D investment in revenue(%)1.07 Percentage of capitaliz

270、ed R&D investment(%)0.00 (2).Details of R&D personnel Applicable Not applicable Number of the Companys R&D staff 450 Percentage of the number of R&D staff to the Companys total number of employees(%)8.14 Educational background structure of R&D personnel Category Number of people Doctors degree 1 Mas

271、ters degree 36 Bachelor 251 College degree 91 High school and below 71 Age structure of R&D personnel Category Number of people 60 years old 0 (3).Explanation Applicable Not applicable The total R&D investment of the parent company accounted for 3.42%of the parent companys revenue.(4).Reasons for th

272、e major changes in the composition of R&D personnel and the impact on the future development of the Company Applicable Not applicable 5.Cash flow Applicable Not applicable Unit:RMB Yuan Item Amount in the current period Amount in the same period last year Change in the proportion(%)Reason for change

273、 Net cash flow generated from operating activities 1,561,196,420.77 1,271,697,892.28 22.76 Net cash flow generated from investing activities-662,837,857.46-1,065,448,932.04 Not applicable During the Reporting Period,the net outflow decreased compared with the same period last year,mainly due to the

274、decrease in the net outflow of bank financial products compared with the same period last year.Net cash flow from-729,259,846.78-200,057,726.09 Not applicable The increase in net outflow during the Reporting Annual Report 2021 28/237 financing activities Period compared with the same period last yea

275、r is mainly due to:1.minority shareholders paying cash in equity for the acquisition of M&G Life during the Reporting Period;2.implementing new lease criteria and reclassifying the rent paid from operating activities to financing activities;3.increase in cash dividend distribution from the same peri

276、od last year.(2)Explanation on significant change of profit caused by non-core business Applicable Not applicable (3)Analysis of assets and liabilities Applicable Not applicable 1.Assets and liabilities Unit:RMB Yuan Items Amount as at the end of the current period Percentage of total assets at the

277、end of current period(%)Amount as at the end of last period Percentage of total assets at the end of last period(%)Change in percentage for the current period over the last period(%)Explanation Bills receivable 39,712,146.72 0.35/Not applicable During the Reporting Period,the commercial acceptance b

278、ills of M&G Colipu increased compared with the beginning of the year.Receivables financing 22,824,707.62 0.20 61,412,976.46 0.63-62.83 During the Reporting Period,the bank acceptance bills of M&G Colipu decreased compared with the beginning of the year.Prepayment 90,826,293.94 0.80 131,596,384.76 1.

279、36-30.98 The advance payment by M&G Colipu decreased compared with the beginning of the year.Other current assets 85,797,733.53 0.75 27,286,607.30 0.28 214.43 The Companys receivable return cost and VAT credit refund increased compared with the beginning of the year.Right-of-use assets 357,540,113.3

280、4 3.13/Not applicable During the Reporting Period,the new lease criteria were implemented to increase the lease-related right-of-use assets.Intangible assets 434,848,138.70 3.81 320,746,328.60 3.30 35.57 The intangible asset of trademark right of Back to School Holding AS in Norway was acquired duri

281、ng the Reporting Period.Goodwill 63,529,740.20 0.56/Not applicable Consideration for the acquisition of Back to School Holding AS in Norway exceeded the assessed net assets during the Reporting Period Long-term 162,206,827.46 1.42 99,035,852.78 1.02 63.79 The decoration costs for Annual Report 2021

282、29/237 prepaid expenses office buildings in Songjiang were increased.Deferred income tax assets 153,856,300.50 1.35 99,939,414.58 1.03 53.95 The deferred income tax assets formed increased due to the implementation of new lease criteria to recognize the lease liabilities during the Reporting Period,

283、the difference in the asset amortization between the parent and subsidiary companies of M&G Colipu,and the time difference in the recognition of estimated return income.Other non-current assets 8,543,306.18 0.07 6,258,468.47 0.06 36.51 The prepayment for equipment increased during the Reporting Peri

284、od.Derivative financial liabilities 147,570.52 0.00/Not applicable The derivative financial liabilities of Back to School Holding AS in Norway were acquired during the Reporting Period.Bills payable 172,167.42 0.00/Not applicable Commercial bill issued by M&G Colipu for procuring commodities during

285、the Reporting Period.Non-current liabilities due within one year 178,611,602.65 1.56/Not applicable During the Reporting Period,the new lease criteria were implemented to increase the lease-related lease liabilities due within one year.Other current liabilities 90,875,521.97 0.80 13,746,089.97 0.14

286、561.10 The possible return liabilities estimated by M&G Colipu increased.Lease liabilities 172,924,166.21 1.51/Not applicable During the Reporting Period,the new lease criteria were implemented to increase the lease-related lease liabilities for more than one year.Estimated liabilities 35,311,258.55

287、 0.31 12,211,357.80 0.13 189.17 The repurchase obligations of the minority shareholders of Back to School Holding AS in Norway were acquired during the Reporting Period.Deferred income tax liabilities 92,665,937.38 0.81 36,781,069.25 0.38 151.94 The deferred income liabilities formed increased due t

288、o the premium acquisition of Back to School Holding AS in Norway,the implementation of the new lease criteria to Annual Report 2021 30/237 recognize the right-of-use assets,and the time difference in the recognition of estimated return costs.Other descriptions No 2.Overseas assets Applicable Not app

289、licable(1)Asset size Including:overseas assets of 270,595,910.87(unit:Yuan,currency:RMB),accounting for 2.37%of the total assets.(2)Explanation for the high proportion of overseas assets Applicable Not applicable 3.Major restricted assets as at the end of the Reporting Period Applicable Not applicab

290、le(1)On 16 September 2021,Axus Stationery and China Merchants Bank Shanghai Branch entered into the Line Credit Agreement numbered 121XY2021031380 with the credit line of RMB180,000,000.00 for 36 months from 16 September 2021 to 15 September 2024.The specific types of line business include,but are n

291、ot limited to,working capital loans,bank notes,and letters of credit.On 16 September 2021,Axus Stationery and China Merchants Bank Shanghai Branch entered into the Maximum Mortgage Contract numbered 121XY2021031380,which is a sub-contract of the Line Credit Agreement.The maximum principal limit of t

292、he mortgage under this contract is RMB180,000,000.00,and the mortgage limit is valid from 16 September 2021 to 15 September 2024.The mortgage term runs from the effective date of the mortgage contract to the expiration of the period of the creditors rights claims under the Credit Agreement.The colla

293、terals for mortgage include:Name of collateral Ownership No.Original value Accumulated depreciation Net value No.111,Xuezi South Road,Xianghuaqiao Street,Qingpu District HFDQ Zi(2013)No.015437 47,061,453.52 27,468,676.83 19,592,776.69 No.233,Xuezi South Road,Xianghuaqiao Street,Qingpu District HFDQ

294、Zi(2013)No.013396 32,156,238.78 14,464,816.47 17,691,422.31 No.333,Xuezi South Road,Xianghuaqiao Street,Qingpu District HFDQ Zi(2015)No.015718 60,230,210.97 18,199,423.55 42,030,787.42 Total 139,447,903.27 60,132,916.85 79,314,986.42 As of 31 December 2021,the outstanding loan of Axus Stationery was

295、 RMB156,500,000.00 and USD1,500,000.00.(2)On 7 August 2017,the subsidiary,Back to School Holding AS,borrowed a long-term loan from a local bank in Norway with all the shares held by the Groups subsidiary,Beckmann AS,as pledge.As of 31 December 2021,the balance of the loan was NOK14 million and was p

296、resented in the non-current liabilities due within one year in the statements.(3)As of the end of the Reporting Period,the Company had restricted monetary funds of RMB1,471,167,575.95,mainly including letter of credit deposit,performance bond,and fixed deposit over 3 months.4.Other descriptions Appl

297、icable Not applicable Annual Report 2021 31/237(4)Analysis on industry operating information Applicable Not applicable For details,see II.Description of the Companys industry conditions during Reporting Period in Section III Management Discussion and Analysis of this report.Annual Report 2021 32/237

298、(5)Analysis of investment Overall analysis of external equity investment Applicable Not applicable During the Reporting Period,the Company made foreign investments.(1)In June 2021,the Company signed the Equity Transfer Agreement with Shanghai Tianwan International Logistics Co.,Ltd.to transfer 40%of

299、 the equity of M&G Life held by it at the transfer price of RMB180 million.The equity change registration and equity delivery have been completed on 25 June 2021.In July 2021,M&G Life and Shanghai Youherui Enterprise Management Consulting Partnership signed the Equity Transfer Agreement to transfer

300、its 15%equity in Jiumu Store at the transfer price of RMB67.5 million.The equity change registration and equity delivery have been completed on 29 July 2021.(2)In August 2021,the Company held a cloud signing ceremony with Back to School Holding AS,a Norwegian schoolbag brand.The Company invested RMB

301、186 million to acquire 91.4%of Back to School Holding ASs equity,and the equity delivery has been completed on 1 September 2021.The acquisition of Back to School Holding AS is an important milestone in M&Gs world-class vision and a new round of five-year strategy plan.In the future,the Company will

302、provide more diversified purchasing options and professional quality assurance for global consumers.1.Significant equity investment Applicable Not applicable 2.Significant non-equity investment Applicable Not applicable 3.Financial assets measured at fair value Applicable Not applicable 4.Progress o

303、f major asset restructuring and integration during the Reporting Period Applicable Not applicable (6)Sale of significant assets and equity interests Applicable Not applicable (7)Analysis of major controlled companies and shareholding companies Applicable Not applicable Unit:0000 Currency:RMB Company

304、 Name Nature of the business Major products and services Registered capital Total asset Net assets Net profit Shanghai M&G Zhenmei Stationery Co.,Ltd.（上海晨光珍美文具有限公司）Wholesale and retail Stationery and office supplies 1,000.00 3,710.41-40.45 562.94 Shanghai M&G Colipu Office Supplies Co.,Ltd.Wholesale

305、 and retail Office supplies 66,000.00 309,536.21 82,018.44 24,198.53 Shanghai M&G Stationery&Gift Co.,Ltd.（上海晨光文具礼品有限公司）Wholesale and retail Stationery and office supplies 19,941.94 132,902.25 57,615.46 10,859.99 M&G Life Enterprise Management Co.,Ltd.（晨光生活馆企业管理有限公司）Wholesale and retail Stationery a

306、nd office supplies 10,000.00 88,764.87-2,827.83-2,108.65 Annual Report 2021 33/237 Shanghai M&G Jiamei Stationery Co.,Ltd.（上海晨光佳美文具有限公司）Manufacturing,wholesale and retail Stationery and office supplies 3,000.00 4,357.70 3,952.32 110.01 Shanghai M&G Information Technology Co.,Ltd.（上海晨光信息科技有限公司）Wholes

307、ale and retail Office supplies 5,000.00 18,042.15 3,069.15-2,529.62 Shenzhen Erya Creative and Cultural Development Co.,Ltd.（深圳尔雅文化创意发展有限公司）Design and so forth Design,office supplies and so forth 2,000.00 1,948.30 1,189.83-26.36 Shanghai M&G Office Stationery Co.,Ltd.Wholesale and retail Office supp

308、lies 5,000.00 49,808.34 23,724.15 10,672.06 Axus Stationery(Shanghai)Company Ltd.Production,sale and so forth Stationery and office supplies 8,100.00 66,266.56 9,561.57-7,727.66 Shanghai Chenxun Enterprise Management Co.,Ltd.（上海晨讯企业管理有限公司）Service Information Consultation 22,000.00 28,948.55 22,081.1

309、4-827.92 Shanghai Qizhihaowan Culture and Creativity Co.,Ltd.（上海奇只好玩 文 化 创 意 有 限 公司）Service Creative service 10,000.00 4,944.44 4,494.75-505.25 (8)Structured entities controlled by the Company Applicable Not applicable VI.Discussion and Analysis on Future Development of the Company(1)Industry patter

310、n and trend Applicable Not applicable With the changes in the way of life and consumption habit of consumers,Chinas retail industry entered a new stage of redevelopment and innovation.Stationery industry faces challenges with uncertainty of external environment,diversification of retail channels,and

311、 more individualized demands from main customers group(now being the post-90s and post-00s).With the changing demographics of China in particular the decreasing birth rate,stationery industry revenue growth comes less from by unit volume growth,and more from consumption upgrade and product upgrade.D

312、omestic market demand for mid-to high-end stationery products keeps increasing,reshaping market structure dominated by low-end products.This provides opportunities for mid-to high-end stationery products with better quality and higher price.Chinas population of 1.4 billion accounts for about 18%of g

313、lobal population,while leading stationery companies in China can continue to mostly rely on the huge domestic market,they also have room for international expansion in international markets,which could reinforce each other under favorable conditions.Leading enterprises focused on building omni-chann

314、el operation capabilities and realized refined management over the offline channels.With the popularity of the Internet,smart phones,and online transactions,peoples consumption habits and consumption scenarios have changed.Consumers access to information is becoming more fragmented,and new-generatio

315、n marketing means are becoming more diversified,including online media platforms(such as Weibo,WeChat,Xiaohongshu,Tiktok)and IP topic creation,which further tests enterprises ability to make quick response to industry trends.Compared with small-and medium-sized enterprises,leading enterprises boast

316、stronger and richer whole network marketing and operation capabilities.They formulate refined marketing strategies by city to reach consumers and capture fragmented traffic to achieve traffic attraction and conversion for online and offline businesses.To improve the stores initiative marketing and t

317、raffic operation capabilities,in addition to Annual Report 2021 34/237 online traffic,offline channels are also required to realize refined management by empowering channels through organizational reform and information system.According to the National Bureau of Statistics,online retail sales across

318、 the country recorded RMB13 trillion in 2021,an increase of 14%.Outstanding companies in the consumer industry seized the development opportunities of online consumption and achieved continuous sales growth through online and offline integration.Traditional retail stationery shops nearby school are

319、still the dominant channel for Chinas stationery industry,and shares of other retail formats are increasing faster.Sales terminals and channels of the industry are becoming more diversified,upgrading and competition in channels becomes more obvious.Domestic consumption for stationery in China become

320、s more brand conscious,innovative,individualized and more premium.There is a growing demand for premium cultural and creative products,stationery products are moving from those primarily focus on functionality towards those with more cultural and creative elements catering to customers.There are aro

321、und thousands of stationery manufacturers in Chinas domestic stationery industry and the industry is quite decentralized.There are a few leading companies for most sub-category stationery products,with continued development in the stationery industry,there could be higher industry consolidation,and

322、leading companies could gain larger market shares.In recent years,in the context of the digital economy,thanks to favorable factors such as policy driving,the rapid advancement of centralized procurement by large-and medium-sized enterprises,and the competition among various digital procurement serv

323、ice providers,great progress has been made in the digitalization,e-commerce and centralization of public procurement in China,which have become the main form of public resource transactions from central to local governments.Facing the shock of economic situation at home and abroad,digital,e-commerce

324、,and centralized procurement exhibits advantageous coordination and quick response ability.According to the China Public Procurement Development Report(2020)compiled and released by China Federation of Logistics&Purchasing,the scale of public procurement transactions in China in 2019 exceeded RMB20

325、trillion,accounting for more than 20%of Chinas total GDP.In terms of the procurement scale of the government,State-owned Key Enterprises,and local state-owned enterprises,the annual procurement scale of government and enterprises in China is also quite large.According to relevant estimates,the marke

326、t size of office supplies in China exceeds RMB2 trillion(data source:).In addition,the market size of employee benefits and other categories is also quite large.With the further development and application of information technology,traditional industries have gained growth momentum in the digital ag

327、e.Industrial digitization is becoming the main pillar of the digital economy,and traditional industries are actively gaining new development momentum through digital empowerment.The investment in the manufacturing industry has shifted from the investment in equipment and assembly lines to the transf

328、ormation of digital processes and digital transformation of products,in a bid to apply digital technology to reduce channel costs and management costs and become a digital-driven modern enterprise.With smart technology and products upgrade,promotion of national education informatization and the deve

329、lopment of the online education market,smart stationery products have developed rapidly in the past few years.Technology-empowered smart pens and smart books are widely adopted in online education,providing an increasingly better user experience.Technology-empowered smart pens and smart books are wi

330、dely adopted in online education,providing a better user experience.(2)Development strategy of the Company Applicable Not applicable 1.Development strategy of the Company To consolidate competitive advantages of core businesses by adhering to the mission of make study and work more joyful and effect

331、ive,being consumer centric,and emphasizing on innovation of technology and products;to further expand new businesses of one-stop office supplies service and direct retail;to actively expand international market;and to promote digitalization,organization development and talents,and investment and mer

332、gers and acquisitions with synergy.With continued efforts in those four areas,the Company will realize the vision of becoming a world-class M&G.2.Sustainable development strategy In order to realize the vision of“World-class M&G”,M&G Stationery has developed a sustainable development strategy togeth

333、er with its business strategy.With its vision of“Writing a Sustainable Business Future”,M&G Stationery aims to lead the sustainable development of the industry by focusing Annual Report 2021 35/237 on four pillars:sustainable products,response to climate change,sustainable supply chain and empowering employees and communities.(3)Operation plan Applicable Not applicable In 2022,the Company plans re