There were 2 violations, Xiamen Dama received a warning letter

Xiamen Jihong Technology Co., Ltd. was established in 2003. Its main business is fast-moving consumer goods display packaging. It is committed to establishing a full-category packaging supply chain procurement scenario around branded fast-moving consumer goods customers, providing customers with a full range of services for one-stop procurement.

After listing on the Shenzhen Stock Exchange in 2016, it rapidly expanded its packaging business while relying on creative design to develop precision marketing and cross-border e-commerce business. At present, cross-border e-commerce contributes nearly 60% of its performance, and Jihong shares are also constantly laying out the domestic new retail ecological environment.

There were 2 violations, Xiamen Dama received a warning letter

On December 28, 2021, Jihong Co., Ltd. received the "Decision of the Xiamen Securities Regulatory Bureau on Issuing a Warning Letter to Xiamen Jihong Technology Co., Ltd." issued by the Xiamen Securities Regulatory Bureau.

In the warning letter, the CSRC mentioned two violations of Jihong Shares:

1. Related-party transactions were not reviewed and disclosed in a timely manner

Hong Kong Majike Digital Technology Co., Ltd. has become a related party of Jihong Shares since September 2020. In 2020 and 2021, Jihong Shares purchased advertising services from Hong Kong Majike for a total of RMB 19.6875 million and RMB 11.934 million respectively. However, Jihong Shares did not fulfill the review procedures and information disclosure obligations in a timely manner as required.

2. Providing financial assistance to equity incentive plan targets

In the announcement of the 2021 restricted stock incentive plan, Jihong Co., Ltd. mentioned that the source of funds for the incentive plan targets is self-raised funds by employees, and the company promises not to provide loans or any other form of financial assistance to the incentive targets.

In fact, in August 2021 , Jihong Co., Ltd. provided financial assistance to some equity incentive plan targets to obtain relevant restricted shares in the name of paying for commodity purchases and advertising fees, with a total amount of 14.2118 million yuan.

The above situation violated the relevant provisions of the "Regulations on Information Disclosure of Listed Companies" and the "Regulations on Equity Incentives of Listed Companies". The CSRC took administrative supervision measures against Jihong Shares by issuing a warning letter and requiring it to submit a written rectification report.

After receiving the warning letter, Jihong Co., Ltd. stated that it would take effective measures to rectify the relevant matters in accordance with the requirements of the warning letter and submit a written rectification report to the Xiamen Securities Regulatory Bureau within the specified time.

At the same time, Jihong Co., Ltd. stated that this regulatory measure will not affect its normal production, operation and management activities. It will strictly follow the relevant provisions of laws and regulations, conscientiously fulfill its information disclosure obligations, and asks investors to pay attention to investment risks.

Jihong shares cross-border e-commerce contributed nearly 60% of the performance

Jihong Co., Ltd., which started out in the packaging industry, has entered the cross-border e-commerce field in recent years and has gradually developed into a comprehensive integrated marketing solution provider. At present, while focusing on the origin of creative design and deepening the professional field of packaging, Jihong Co., Ltd. has entered the precision marketing and cross-border e-commerce business, and combined blockchain technology to empower the two main businesses.

(Photo source: Jihong Shares Financial Report)

After going public in 2016 , the growth rate of Jihong's packaging business slowed down. At the same time, many traditional industries began to transform to the Internet, and Jihong also began to cross-border into the cross-border e-commerce market. Today, cross-border e-commerce business has become the main source of revenue for Jihong, contributing nearly 60% of its performance.

According to the financial report of Jihong Co., Ltd., the global epidemic spread and continued in 2020, and some consumers' offline life and consumption needs shifted to online. With the domestic epidemic under effective control and the supply chain recovering rapidly, Jihong Co., Ltd. relied on China's strong manufacturing industry chain advantages, and the number of cross-border e-commerce orders broke a historical high in 2020. The revenue of Internet marketing cross-border e-commerce business accounted for 57.84%, while the revenue of traditional color packaging cartons and packaging boxes accounted for only 24.68%.

In 2021 , the cross-border e-commerce industry ushered in a cold winter period. Amazon platform hit Chinese sellers hard, and a large wave of account blocking caught cross-border sellers off guard. Jihong shares mainly rely on independent stations to sell products, and its cross-border e-commerce business has not been greatly affected. According to Jihong shares 2021 semi-annual report, from January to June, the scale of its cross-border e-commerce orders increased by more than 60% compared with the same period last year, and achieved operating income of 139,003.07 million yuan, an increase of 27.02% over the same period last year, and the operating income of the packaging business was 98,440.43 million yuan, an increase of 55.34% over the same period last year.

Jihong shares stated that its cross-border e-commerce business mainly promotes independent station advertisements on foreign social networking platforms such as Facebook, Google, TikTok, Line, YouTube, Instagram, etc. for online B2C sales, and sells cost-effective and distinctive Chinese products across borders to Southeast Asia, Northeast Asia, the Middle East, Taiwan, China, Hong Kong, China and other countries or regions. In the first half of 2021, its cross-border e-commerce market share further expanded, and it continued to maintain its leading position in independent station e-commerce in Southeast Asia.

In addition, Jihong shares are also actively promoting the construction of new projects and continuously optimizing the investment layout of the industrial chain. In the future, Jihong shares will continue to promote the construction of its own brand, continuously improve its integrated marketing capabilities, and actively expand sales in the domestic e-commerce market to create new profit growth points for the company.

In terms of cross-border e-commerce, Jihong Co., Ltd. is building a cross-border e-commerce SaaS service platform for Southeast Asia and other countries with small languages, which has attracted the attention of many cross-border sellers.

Jihong shares SaaS service platform Jimiaoyun will be launched soon

It is understood that Jimiao Cloud is a SaaS service platform focusing on cross-border e-commerce, mainly providing merchants with product selection, website building, marketing, warehousing, logistics, customer management and other services . It opens up emerging markets in Asia for domestic cross-border sellers and foreign Internet celebrities and bloggers to achieve cross-border business growth. At present, the Jimiao Cloud platform mainly focuses on the Asian market , including Taiwan, Hong Kong, Southeast Asia, Northeast Asia and the Middle East.

According to previous reports, Jimiao Cloud has started internal testing in May 2021 and opened a small range of free trials. It is said that Jimiao Cloud has a strong ability to integrate supplier resources, can coordinate scattered suppliers, and provide sellers with logistics support and cloud warehouse management systems. At the same time, it meets the sellers' needs for website building, connects sellers to overseas mainstream advertising channels (Facebook, Google, TikTok, etc.), and provides digital marketing services.

Sellers can also collect customer information of their own independent sites through the Jimiao Cloud platform, and use the content marketing and promotional tools provided by the Jimiao Cloud platform to promote customer consumption and tap into customer value.

Recently, Jihong Co., Ltd. stated that Jimiao Cloud received a lot of feedback and suggestions during the internal testing period. In order to ensure the quality of the platform and user experience, the company conducted repeated tests, improvements, and upgrades before the platform was officially launched. At the same time, affected by the epidemic, the platform testing progress has slowed down. Therefore, the public beta time of the Jimiao Cloud service platform has been postponed to January 20, 2022.

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