鹏鼎控股：鹏鼎控股（深圳）股份有限公司2025年年度报告（英文版）

AVARY HOLDING

Avary Holding (Shenzhen) Co., Limited

2025 Annual Report

Chairman of the Board：Charles Shen

2026.03

2025 Annual Report

Section I Important Notice, Table of Contents and Definitions

The Board of Directors, directors and senior management of the Company hereby warrant that the contents of this Annual Report are true, accurate and complete, without any false records, misleading statements or material omissions, and assume individual and joint and several legal liability therefor.

Charles Shen, the person in charge of the Company, Xiao Dewang, the person in charge of accounting work, and Xiao Dewang, the head of the accounting department (accounting supervisor), hereby declare that they guarantee the truthfulness, accuracy and completeness of the financial report contained in this Annual Report. All directors attended the Board of Directors meeting at which this Report was reviewed.

Forward-looking statements in this Report regarding future plans and other matters do not constitute substantive commitments by the Company to investors. Investors and relevant parties should maintain an adequate awareness of risks and understand the difference between plans, forecasts and commitments.

There are no material risk factors affecting the Company’s production, operations, financial condition or sustained profitability. The Company has specifically described the risk factors it may face and corresponding countermeasures in this Annual Report. Investors are advised to refer to “Section III Management Discussion and Analysis—XI. Outlook for the Company’s Future Development—(III) Risks and Countermeasures”.

The profit distribution proposal reviewed and approved by the Board is: based on 2,317,536,658 shares, a cash dividend of RMB 10 (inclusive of tax) per 10 shares will be distributed to all shareholders, with no bonus shares (inclusive of tax) and no capitalization of capital reserves into share capital.

THIS IS A TRANSLATION OF THE 2025 ANNUAL REPORT (THE "ANNUAL REPORT") OF AVARY HOLDING (SHENZHEN) CO,. LIMITED (THE "COMPANY"). THIS TRANSLATION IS INTENDED FOR REFERENCE ONLY AND NOTHING ELSE, THE COMPANY HEREBY DISCLAIMS ANY AND ALL LIABILITIES WHATSOEVER FOR THE TRANSLATION. THE CHINESE TEXT OF THE ANNUAL REPORT SHALL GOVERN ANY AND ALL MATTERS RELATED TO THE INTERPRETATION OF THE SUBJECT MATTER STATED HEREIN.

Table of Contents

Section I Important Notice, Table of Contents and Definitions ....2

Section II Company Profile and Key Financial Indicators ....7

Section III Management Discussion and Analysis....11

Section IV Corporate Governance, Environmental and Social Responsibility....50

Section V Important Matters....83

Section VI Changes in Shares and Shareholders ....109

Section VII Matters Relating to Bonds....119

Section VIII Financial Statements....120

Documents Available for Inspection

I. Financial statements bearing the signatures and seals of the legal representative, the person in charge of accounting work (Chief Financial Officer), and the head of the accounting department of the Company.

II. Original audit report bearing the seal of the accounting firm and the signatures and seals of the certified public accountants.

III. Originals of all company documents and announcements publicly disclosed on the website designated by the China Securities Regulatory Commission during the reporting period.

Definitions

Section II Company Profile and Key Financial Indicators

I. Company Information

II. Contact Persons and Contact Information

III. Information Disclosure and Location of Documents

IV. Changes in Registration

V. Other Relevant Information

Accounting firm engaged by the Company

Sponsor engaged by the Company to perform continuous supervision obligations during the reporting period

□ Applicable ^ Not Applicable

Financial adviser engaged by the Company to perform continuous supervision obligations during the reporting period

□ Applicable ^ Not Applicable

VI. Key Accounting Data and Financial Indicators

Whether the Company needs to make retroactive adjustments or restatements to prior-year accounting data

□ Yes ^ No

Whether the lower of the net profits before and after deducting non-recurring gains and losses was negative for each of the most recent three fiscal years, and whether the audit report for the latest fiscal year indicated that material uncertainty exists regarding the Company’s ability to continue as a going concern

□ Yes ^ No

Whether the lowest of the audited total profit, net profit and net profit after deducting non-recurring gains and losses for the Reporting Period was negative.

□ Yes ^ No

VII. Differences in Accounting Data under Domestic and Foreign Accounting Standards

1. Differences in net profit and net assets between financial reports disclosed under International Financial Reporting Standards and Chinese Accounting Standards

□ Applicable ^ Not Applicable

During the reporting period, there were no differences in net profit and net assets between financial reports disclosed under International Financial Reporting Standards and Chinese Accounting Standards.

2. Differences in net profit and net assets between financial reports disclosed under overseas accounting standards and Chinese Accounting Standards

□ Applicable ^ Not Applicable

During the reporting period, there were no differences in net profit and net assets between financial reports disclosed under overseas accounting standards and Chinese Accounting Standards

VIII. Key Financial Indicators by Quarter

Unit: RMB

Whether the above financial indicators or their aggregate differ materially from the relevant financial indicators in the quarterly reports and semi-annual report previously disclosed by the Company

□ Yes ^ No

IX. Non-recurring Profit or Loss Items and Amounts

Applicable Not Applicable

Unit: RMB

Details of other profit or loss items that meet the definition of non-recurring profit or loss: □ Applicable ^ Not Applicable The Company has no other profit or loss items meeting the definition of non-recurring profit or loss. Explanation of classifying non-recurring profit or loss items listed in Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Securities to the Public—Non-recurring Profit or Loss as recurring profit or loss □ Applicable ^ Not Applicable

The Company has no items classified as recurring profit or loss that are listed as non-recurring profit or loss items in Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Securities to the Public—Non-recurring Profit or Loss.

Section III Management Discussion and Analysis

I. Principal Business during the Reporting Period

(I) Introduction to the Core Business, Products and Applications

The Company is a large integrated manufacturer covering R&D, design, fabrication, sales and services of various PCBs. The Company provides full-range PCB products and end-to-end customized solutions across the whole industrial chain to premium customers in line with bespoke specifications of downstream end products. By downstream application fields, the Company’s PCB products are categorized into communication PCBs, consumer electronics & computer PCBs, automotive, server and other PCBs. These product are widely adopted in smartphones, network equipment, tablet computers, wearable devices, laptops, servers, storage devices, automotive electronics and other terminal sectors.

Communication PCBs refer to various printed circuit boards used in communication devices such as mobile phones, routers and switches. The Company’s communication PCBs are extensively deployed across a wide range of communication electronic terminals, with smartphones as the primary application scenario, meeting the sustained industry demands for high transmission speed, high reliability and low latency amid advances in mobile communication technologies. Communication PCBs produced by the Company cover flexible printed circuits, rigid printed circuits, high-density interconnect boards, substrate-like PCBs (SLP) and other produc types, and the Company’s clients include leading domestic and overseas electronic brands.

Consumer electronics & computer PCBs are applied to consumer and computing devices closely linked to people’s daily life and entertainment, including tablets, laptops, wearables, game consoles and smart home appliances.

Automotive, server and other PCBs are designed for traditional & new energy vehicles, servers, optical modules and related sectors. In recent years, the Company has accelerated its market expansion in automotive electronics, AI servers and optical modules for AI data centers, with relevant products having obtained or pending certifications from domestic and overseas clients.

No material changes occurred to the Company’s core business and product lineup during the reporting period.

(II) Market Position and Competitive Advantages of the Company’s Products

The Company is one of the few large-scale professional manufacturers worldwide that can conduct R&D, design, production, sales and service of all types of PCBs simultaneously. The Company owns a high-quality and diversified PCB product line covering FPC, SMA, SLP, HDI, RPCB, Rigid Flex and other product categories. The Company’s products are widely applied to communication electronic products, consumer electronics and computer products, as well as automotive electronics, AI servers, optical modules, high-speed computers and other products. The Company possesses strong capabilities to supply comprehensive PCB electronic interconnection products and services for various customers, and has built an all-round one-stop service platform for PCB products.

The Company boasts solid technical R&D strength, timely order response capacity and comprehensive quality assurance capacity to provide customers with high-quality and cutting-edge products and services that fully meet customer demands. Supported by the Company’s diversified product portfolio strategy, outstanding rapid response capacity and mass delivery capacity, leading domestic and overseas downstream brand customers maintain long-term business cooperation with the Company.

According to the China Printed Circuit Association (CPCA) China PCB Industry Ranking, the Company has ranked first in China for consecutive years. Meanwhile, based on Prismark’s global ranking of PCB enterprises by revenue from 2018 to 2026, the Company has been the world’s largest PCB manufacturer for nine consecutive years from 2017 to 2025.

(III) Performance Drivers

1. Give full play to profound advantages accumulated by the Company in the consumer electronics sector and seize the development boom of edge AI

Fluctuations in key components including global memory chips have brought certain pressure on smartphone sales in 2026. However, downstream brand owners are increasing investment in high-end models equipped with AI applications and foldable designs, and high end smartphones are expected to become the growth segment within the smartphone market. As a key supplier of high-end smartphones worldwide, the Company will rely on the Company’s technical strengths and market insight to follow industrial development trends, deepen partnerships with downstream customers, and consolidate and expand the leading position of the Company in the high-end smartphone market.

AI wearable products represented by smart glasses and headsets are expected to become major carriers for AI applications. According to IDC forecasts, global shipments of AI glasses exceeded 9.5 million units in 2025, up 255.5% from 2024. In the future, continuous innovation in product forms and expansion of application scenarios will make smart glasses the next-generation human-machine interaction gateway and bring new growth momentum to the consumer electronics market. IDC predicts that global shipments of smart glasses will surpass 27 million units by 2030, with a five-year compound annual growth rate of 23.33% from 2025 to 2030, ranking first worldwide in growth rate. The Company has become an important global supplier of AI glasses and established stable cooperative ties with many world-famous brand manufacturers. The Company will continue to benefit from the development trend of edge AI products and create stable growth drivers for the performance growth of the Company.

2. Accelerate market development of server and optical module products to realize coordinated growth of cloud and edge markets

In recent years, AI technologies have fueled explosive growth in the server and optical module markets. According to research reports from IDC, global shipments of AI servers are expected to reach 2.15 million units in 2025, representing a 25% year-on-year increase against 2024, and shipments of AI servers are projected to hit 2.67 million units in 2026. The rapid expansion of AI servers has unlocked massive growth potential for the PCB industry, especially the HDI and HLC segments. Meanwhile, major AI server manufacturers are speeding up innovation and R&D of new technologies to meet surging computing power demands, which further drives continuous upgrades of PCB materials and specifications. Against such backdrop, leading PCB enterprises with robust technological innovation and industrialization capabilities will secure more favorable market positions and stronger competitive advantages. Drawing on extensive experience accumulated by the Company in HDI for consumer electronics, the Company has acquired mass production capacity for HDI products with six or more layers, and holds leading technological strengths and mass production capabilities particularly in high-end HDI and SLP products. Faced with market opportunities brought by PCB upgrading for AI servers, the Company further accelerated market expansion and customer certification procedures for AI server-related products in 2025. At present, high-end HDI products of the Company have successfully entered this sector and will achieve mass production in phases. Meanwhile, the Company is actively addressing insufficient production capacity for HLC products and continuously upgrading technical standards of relevant products. HLC products of the Company have obtained certifications from major well-known cloud service providers or are undergoing accelerated certification procedures, comprehensively lifting the overall competitiveness of the Company in the A server market.

As an indispensable core component for interconnection of computing clusters, optical modules are growing increasingly important. Especially as internet cloud vendors push forward large-scale data center construction and expand AI computing clusters at a faster pace, market demand for 800G / 1.6T optical modules has witnessed explosive growth, and the rhythm of technological iteration across the whole industry keeps accelerating. In view of this, SLP products of the Company have successfully penetrated the high-growth 800G / 1.6T optical module segment starting from 2024. In 2025, supported by the booming 800G / 1.6T optical module market, relevant businesses of the Company achieved rapid growth. At present, the Company is actively planning for long-term development and 3.2T products have entered the R&D and design stage. In the future, as the market scale of 1.6T optical modules keeps expanding relevant businesses of the Company will maintain sound momentum of rapid growth.

3. Accelerate Capacity Layout to Lay a Solid Production Foundation for Future Business Expansion

As a leading enterprise in the global PCB industry, the Company has always adhered to the philosophy of sound operation. The Company attaches great importance to financial stability and strives to maintain sound capital liquidity. As of December 31, 2025, monetary funds held by the Company stood at RMB 12.032 billion, with an asset-liability ratio of 28.86%. Such abundant capita strength delivers strong support for the Company amid the new round of technological innovation cycle.

Faced with the industrial development boom driven by AI, the Company intensified strategic planning and implementation of capacity layout in 2025. In terms of capacity expansion, the Company plans to invest a total of RMB 8 billion from the second half of 2025 to 2028 to integrate and construct the Huaian PCB Industrial Park within the Huaian Industrial Zone. Meanwhile, the Company signed an investment agreement with Huaian Economic & Technological Development Zone in early 2026, proposing to invest RMB 11 billion in constructing a production base for high-end PCB projects in the coming years. For overseas deployment, Phase I capacity construction of the Company’s Thailand factory was fully completed and smoothly entered the trial production stage in the first half of 2025, while Phase II and Phase III projects have commenced construction simultaneously. With the gradual completion and implementation of all investment layouts of the Company, the overall production capacity of products of the Company will be markedl lifted in the future. In particular, production capacity for high-end HDI, SLP and HLC products required by high-growth sectors including servers and optical modules will achieve substantial improvement. Such series of capacity expansions lay a solid foundation for further expansion of cloud and edge AI businesses of the Company, and bring new growth momentum for future business development and performance improvement.

II. Industry Overview during the Reporting Period

1. Current Status and Development Trend of Printed Circuit Boards

Printed circuit boards serve as critical interconnection components for assembling electronic parts. Printed circuit boards not only provide electrical connections for electronic components, but also undertake functions such as digital and analog signal transmission, power supply, as well as transmission and reception of radio frequency and microwave signals for electronic devices. Printed circuit boards are essential components for most electronic equipment and products, hence known as “the Mother of Electronic Products”.

Despite adverse impacts from shifts in international trade environments and sluggish global economy in 2025, the global printed circui board industry maintained a relatively rapid growth momentum against the backdrop of vigorous development of AI technologies and surging investment in AI infrastructure represented by AI servers. According to statistics released by Prismark, the global PCB market size was estimated to reach USD 85.18 billion in 2025, representing a year-on-year increase of 15.8% compared with 2024. Looking ahead to 2026, surging demand for AI servers together with the expansion and popularization of end-side AI application scenarios wil continuously fuel growth momentum of the industry. Per Prismark’s projections, the global PCB market size is expected to hit USD 95.78 billion in 2026, with a year-on-year growth rate of 12.5%. From 2026 to 2029, the output value of the global PCB industry wil maintain a compound annual growth rate of 6.6%, and the market scale is forecasted to exceed USD 116.02 billion by 2029.

2. Industrial Development Trends of Core Products

(1) Communications Electronics Industry

The communications electronics market downstream of PCB covers product categories including mobile phones, base stations, routers and switches. Communications electronics products of the Company are mainly applied to terminal communications products such as smartphones. Fluctuations in key components including global memory chips have brought certain pressure on smartphone sales in 2026. However, downstream brand owners are increasing investment in high-end models equipped with AI applications and foldable designs. High-end smartphones are expected to become the growth segment within the smartphone market and effectively drive up the average selling price per unit across the smartphone market.

As estimated by Prismark, the output value of global communications electronics products reached USD 697 billion in 2025, representing an 8.1% year-on-year increase against 2024. The compound annual growth rate is projected to stand at 5% from 2026 to 2030, and the market size will hit USD 874 billion by 2030.

Output Value of Communications Electronics Market Products

USD Billion

As estimated by Prismark, the output value of PCB products for communications electronics reached USD 27.3 billion in 2025, representing an 18% year-on-year increase compared with 2024. The compound annual growth rate is projected to be 6.7% from 2026 to 2030, and the corresponding PCB output value will reach USD 39.2 billion by 2030.

(2) Consumer Electronics Industry

The consumer electronics industry represented by PCs maintained a strong recovery momentum in 2025. The maturing and accelerated popularization of AI technologies injected powerful new driving forces into industrial recovery. With continuous technological upgrading and iteration, AI terminal products represented by AI smart glasses are expected to witness market breakout growth comparable to the launch of iPhone, bringing new development opportunities to the PCB market for consumer electronics. As estimated by Prismark, the global output value of consumer electronics products stood at USD 338 billion in 2025, a year-on-year increase of 2.7% over 2024. The compound annual growth rate is projected to reach 2.4% from 2026 to 2030, and the output value wil hit USD 383 billion by 2030.

Output Value of Consumer Electronic Products

USD Billion

As estimated by Prismark, the output value of PCB products for consumer electronics reached USD 9.4 billion in 2025, representing a year-on-year increase of 5.6% compared with 2024. The compound annual growth rate is projected to be 2.6% from 2026 to 2030, and the corresponding PCB output value will reach USD 10.8 billion by 2030.

(3) Server Industry Segment

The rapid advancement of AI technologies has triggered explosive growth in computing power demand, which directly fuels the rapid expansion of AI servers. Meanwhile, the rising complexity of AI servers and continuous emergence of new technologies impose stricter requirements on printed circuit boards, further driving steady growth in the value of server-use PCBs.

As estimated by Prismark, the global market size of servers and storage products reached USD 413 billion in 2025, representing a substantial year-on-year increase of 41.9% against 2024. The compound annual growth rate is projected to hit 6.3% from 2026 to 2030, and the market size will reach USD 694 billion by 2030.

Output Value of Electronic Products in Server and Storage Industry

USD Billion

As estimated by Prismark, the output value of PCB products for servers and storage reached USD 15.6 billion in 2025, representing a year-on-year increase of 43.6% compared with 2024. The compound annual growth rate is projected to be 12.6% from 2026 to 2030, and the corresponding PCB output value will reach USD 34.6 billion by 2030.

(4) Automotive Electronics Industry Segment

The global new energy vehicle industry maintained a growth momentum in 2025. The continuous advancement of automotive electrification, intelligence and connectivity has brought remarkable and continuously expanding growth space to the automotive electronics market.

As estimated by Prismark, the global market size of automotive electronic products reached USD 278 billion in 2025, representing a year-on-year increase of 3.7% compared with 2024. The compound annual growth rate is projected to be 4.4% from 2026 to 2030, and the global market size of automotive electronic products is expected to hit USD 338 billion by 2030.

USD Billion

As estimated by Prismark, the market size of automotive-related PCB products reached USD 9.7 billion in 2025, representing a year on-year increase of 5.7% compared with 2024. The compound annual growth rate is projected to stand at 3.5% from 2026 to 2030, and the corresponding PCB output value will reach USD 11.4 billion by 2030.

III. Analysis of Core Competitiveness

(I) Product Advantages: Build an All-round One-stop Service Platform for PCB Products

The Company is one of the few large-scale professional manufacturers worldwide that integrate R&D, design, production, sales and service capabilities for all types of PCB products. The Company owns a high-quality and diversified PCB product portfolio covering FPC, SMA, SLP, HDI, RPCB, Rigid Flex and other product categories. Products of the Company are widely applied to communication electronic products, consumer electronics and computer products, as well as automobiles, servers, optical modules, high-speed computers and other products. The Company boasts strong capabilities to deliver full-range PCB products and solutions for diverse customers, and has built an all-round one-stop service platform for PCB products

The Company possesses solid technical R&D strength and efficient order response capacity to guarantee timely mass delivery to customers, provide customers with premium and cutting-edge products and services, and fully satisfy customer demands. Benefiting from the diversified product strategy of the Company, as well as outstanding rapid response and mass supply capabilities, leading domestic and overseas downstream brand customers maintain long-term business cooperation with the Company.

(II) Customer Advantages: Serving World-leading Brand Customers and Electronic Manufacturing Service Enterprises

Supply chain management in the electronic information industry generally adopts a qualified supplier certification system, which requires PCB manufacturers to have a sound operation network, efficient information management systems, abundant industrial experience and favorable brand reputation. In particular, when selecting qualified suppliers, certain world-leading brand customers not only focus on production indicators such as product quality, but also require suppliers to pass stringent audit procedures and mee numerous soft assessment criteria including 6S management (Sort, Set in Order, Shine, Standardize, Sustain, Safety), factory operation specifications, production procedures, environmental protection, employee welfare and social responsibility. Relying on robust R&D strength, mass production and on-time delivery capacity, stable high-quality product performance, excellent corporate management, comprehensive environmental protection arrangements and sound social image, the Company has successfully been included in the qualified supplier systems of numerous world-leading brand customers.

Through long-term persistent efforts, the Company has built up service capabilities covering rapid design, prototype development, fas production ramp-up and mass manufacturing for downstream customers. Such capabilities help customers shorten product launch cycles and seize market opportunities, supporting customers to establish a successful operation model featuring Time to Market + Time to Volume + Time to Money / Market Share. The above advantages enable the Company to forge close ties with leading downstream brand customers and build long-term, stable business partnerships.

In addition, the Company has maintained cooperation with world-class electronic brand customers since establishment. Brands the Company has served in the past include global leading names such as Motorola, Nokia and Sony Ericsson. At present, the Compan has established in-depth cooperative relationships with top domestic and international brand customers. Continuous collaboration with world-class clients allows the Company to capture product trends and market shifts, and drive consistent improvements in technologica and management capabilities

(III) Technological Advantages: Participate in Pre-development Projects for World-leading Customers and Keep Pace with Cutting-edge Technologies

The Company continuously focuses on and delves into technical R&D of electronic circuit products. The printed circuit boards manufactured by the Company feature a minimum aperture of 0.025 mm and a minimum line width of 0.020 mm. The Company has completed product development and process establishment with industrialization capacity for products covering high-frequency and RF communication modules, high-speed transmission and signal integrity modules, dynamic bending and ultra-thin products, high-end camera modules, automotive and energy storage products, space communication equipment, high-performance computers, 1.6T optica modules, high-end rigid boards with embedded components and next-generation frame boards. The Company carries out produc development and technical planning for products to be launched within the next one to two years alongside international brand customers, and conducts advance technical reserves including research on new material application, breakthrough research on new process technologies, quality verification of new products and construction of smart manufacturing production lines. In the next generation electronic information industry, the Company conducts in-depth R&D layout covering artificial intelligence, 5G & 6G communication, diversified micro-displays, new energy, foldable displays, automotive electronics, consumer electronics, network communication base stations, optical communication, low-orbit satellites, AI servers, energy storage, robots, smart medical devices, wearable equipment and brain-computer interfaces. Centered on five core pillars including new products, new technologies, new processes, new materials and new equipment, the Company fully concentrates on key generic technologies and cutting-edge product technologies to capture market trends of product development. As of December 31, 2025, Avary Holding has filed a total of 2,801 patent applications and obtained 1,647 granted patents. The Company and its subsidiaries Hongqisheng and Qingding Precision have all obtained intellectual property standard implementation certification and been recognized as high-tech enterprises. The Company was accredited as a National Enterprise Technology Center in 2023.

By laying out products and technologies that may emerge in the next three to five years in advance, the Company directly participates in forward-looking development of customers’ next-generation and future-generation products. Through collaborative R&D with world-class customers and participation in early-stage product development and design, the Company captures market trends and business opportunities for new products and accurately identifies the direction of product and technology R&D. Apart from independen R&D, the Company has built an industry-university-research collaborative R&D platform and established an enterprise technology center. The Company conducts research cooperation with many well-known universities and research institutes across Chinese mainland, Hong Kong and Taiwan to advance innovative projects and maintain a leading position in technological innovation and market demand matching. Meanwhile, the Company facilitates exchanges and cooperation with strategic partners along the industria chain to boost technical integration, process development and process application among upstream and downstream industry participants, build a dedicated PCB technology platform and timely grasp the development trajectory of cutting-edge PCB technologies.

(IV) Management Advantages: Sound Operation Philosophy and Experienced Management Team

For many years, the Company adheres to the mission of “Develop technologies for the betterment of human beings; protect the environment for a greener earth”, and strives to realize the vision of “Develop PCB and other related industries to become a leader in the industry”. The core values of “Integrity, responsibility, innovation, excellence and profitability” are implemented throughout al operational links of the Company. The forward-looking operation philosophy strengthens cohesion, centripetal force and execution capability of the management team of the Company. Such philosophy not only helps the Company foster a corporate culture and values featuring pursuit of excellence, people-oriented management and green development, but also earns wide recognition from customers, partners and all sectors of society.

The Company boasts an experienced and forward-looking management team, covering elite talents with overseas educational backgrounds, industry professionals with profound electronics industry experience, R&D specialists with abundant research achievements, and financial professionals proficient in investment and financing. The operation team of the Company possesses rich industrial management experience and a global vision, and supervisors of major product divisions have years of practical operation experience in relevant fields. For middle and senior management as well as core key employees, the Company implements equity incentive plans and talent cultivation & promotion programs. Regular leadership training courses are held to improve leadership capabilities of management staff. Combined with dual career track system, promotion incentives and reward compensation mechanisms, such measures maximize the overall efficiency of the management team.

(V) Environmental Advantages: Comprehensive and Forward-looking Environmental Protection Layout

The Company attaches great importance to internal green culture development and promotes the concept of “Avary Seven Green” philosophy, namely Green Innovation, Green Procurement, Green Production, Green Logistics, Green Service, Green Reclamation and Green Living, to further generate green value and actively fulfill corporate social responsibilities. The Company has set up a dedicated environmental protection and energy conservation department, which develops proprietary green technologies covering pollution prevention, resource recovery, circular economy, energy saving and emission reduction. The department keeps track of the latest trend in environmental protection, energy conservation and emission reduction, and actively carries out greenhouse gas inventory and cleane production audits. Since establishment, the Company has made advance planning for environmental facilities construction in al industrial parks and maintained continuous capital investment in environmental protection. The Company persistently advances energy conservation and emission reduction work, regards pollution prevention and resource recycling as the cornerstone of sustainable development, and has built demonstration production bases complying with upgraded environmental standards. Wastewater is classified into 20 to 25 categories according to water quality characteristics, while waste materials are sorted into more than 69 categories. All pollutant discharges meet or exceed government regulatory standards, and the recycling rate of waste materials exceeds 90%.

No changes have taken place in the core competitiveness of the Company during the reporting period.

IV. Analysis of Principal Business

1. Overview

In 2025, the rapid advancement of artificial intelligence technology triggered explosive growth in computing power demand, fueling rapid expansion of downstream markets represented by AI servers and driving robust development of the global printed circuit board (PCB) industry. Faced with external uncertainties including shifts in the global trade landscape and strained supply chains, the Company maintained strategic resolve and accurately captured industrial trends. The Company achieved steady revenue growth by consolidating market share among existing customers and expanding emerging business segments.

Meanwhile, continuous rises in raw material prices coupled with intensified exchange rate fluctuations created headwinds for cost control and profit growth. To seize market opportunities in AI servers, the Company ramped up capital expenditure, and the resulting increase in depreciation expenses exerted certain pressure on short-term earnings growth. Against such challenges, the Company took active measures to stabilize supply chains, thoroughly push forward cost reduction and efficiency improvement, capture market trends, and develop new customers and product lines, thereby sustaining sound profitability.

In 2025, the Company recorded operating revenue of RMB 39.147 billion, representing a year-on-year increase of 11.40%. Net profit attributable to shareholders of the listed company reached RMB 3.738 billion, up 3.25% year on year.

1. Seize Market Opportunities to Achieve Rapid Growth Across All Product Lines

All businesses of the Company posted steady and remarkable growth in 2025:

In terms of the communication board business, supported by technological and capacity advantages in FPC products, the Company steadily expanded its market share, took an active part in customers’ R&D of new products and technologies, and maintained its leading position in the industry. During the reporting period, the communication board business generated operating revenue of RMB 25.437 billion, representing a year-on-year increase of 4.95%. Its gross profit margin stood at 19.03%, rising by 0.86 percentage points yea on year.

For the consumer electronics and computer board business, the Company captured the recovery cycle of consumer electronics and vigorously pushed forward the development and mass production of edge AI products represented by AI glasses, delivering robust growth of relevant segments. During the reporting period, operating revenue from consumer electronics and computer boards reached RMB 11.287 billion, up 15.72% year on year, with a gross profit margin of 27.15%, an increase of 0.13 percentage points over the same period last year.

Driven by skyrocketing demand for AI servers, the automotive and server board business maintained ultra-high growth momentum The Company actively advanced certification and prototype testing for new-generation products of well-known clients, and deepened R&D cooperation with cloud server manufacturers on AI ASIC-related products to strengthen the competitiveness of the Company’s offerings in the AI server market. Relevant products have either obtained certifications or are undergoing certification procedures. During the reporting period, the automotive and server board business achieved operating revenue of RMB 2.119 billion, a year-on year surge of 106.67%, with a gross profit margin of 21.55%.

2. Full Coverage of Cloud, Network and End Applications in the AI Era and Active Layout of Forward-looking Technologies

AI technology has become the core driving force advancing the development of the PCB industry. To seize opportunities brought by the new round of industrial growth, relying on the One Avary full-spectrum PCB product platform, the Company continuously increases R&D investment, innovation and strategic layout for AI-related products, covering all cloud-network-end application scenarios in the AI era. In 2025, the Company’s R&D expenditure reached RMB 2.459 billion, accounting for 6.28% of operating revenue, representing a year-on-year increase of 5.79% in R&D spending.

In terms of intelligent terminal devices, with technological strengths in dynamically bendable FPC modules, wide-band antenna modules, ultra-fine circuit FPC assemblies and N+M stacked antenna development, the Company serves as a core supplier for termina devices including foldable phones, AI smartphones and XR modules. In 2025, operating revenue generated by the Company’s AI glasses business surged more than four times compared with 2024, making the Company the world’s largest PCB manufacturer for AI glasses. Faced with the vast market potential of humanoid robots and their stringent technical requirements for PCBs, the Company actively develops PCB products for core functions such as main control systems, sensor modules, power management and joint drives. The Company has established cooperative ties with multiple domestic and international robot clients and conducts ongoing produc development and prototype testing to meet customers’ high-end PCB demands with high-precision and high-density wiring products.

In the AI server segment, relying on two major production bases in Huaian and Thailand, the Company centers its core product lines on IHDI and HLC, focuses on customers’ demands for next-generation products and proactively expands market reach. The Company accelerates R&D of AI server-related technologies and launches high-end HDI boards compatible with GPU modules and high-speed transmission interfaces, embedded component and embedded circuit technologies, low-loss material development and back-drill stub reduction technologies to satisfy the high computing power requirements of AI servers. The Company also conducts pre-technica discussions and joint development with customers on products for the next two to three generations of platforms. In 2025, operating revenue from the Company’s AI server products more than doubled year on year, and robust growth is expected to continue in 2026.

In optical communication, leveraging leading technological and mass-production advantages in advanced mSAP processes, the Company targets the upgrade cycle of 800G and 1.6T optical communication, and collaborates with customers to develop next generation 3.2T optical communication solutions. With the volume ramp-up of 1.6T optical modules, the corresponding business is projected to maintain rapid growth in the future.

For automotive PCB products, the Company has developed high-temperature-resistant and vibration-resistant HDI products to cater to unique automotive PCB specifications.

Driven by artificial intelligence, in-depth AI application and digital transformation fuel the Company’s continuous layout of forwardlooking products. The Company consistently delivers comprehensive PCB product solutions for diverse clients and deepens customer partnerships through advanced process technologies and superior product quality. The Company expands research and layout of forward-looking technologies across emerging blue-chip PCB sectors including AI smart terminals, AR / VR spatial computing terminals, intelligent automotive cockpits, autonomous driving modules, AI servers and edge computing, low-altitude economy carriers, embodied intelligent robots and brain-computer interface modules, so as to sustain technological leadership in relevant fields

3. Accelerate Global Capacity Layout and Digital Transformation to Lay a Foundation for New Round of Expansion

In 2025, the Company further sped up the deployment of global production capacity. Domestically, the Company plans to invest RMB 8 billion from the second half of 2025 to 2028 to expand high-end PCB capacity at the Huaian Park. It is expected that the IHDI and HLC capacity of Huaian Park will double by the end of 2026, greatly boosting the supply capacity of the Company for AI server products. Meanwhile, the Company signed an investment agreement with Huaian Economic & Technological Development Zone in early 2026, planning to invest RMB 11 billion in the construction of a production base for high-end PCB projects in the coming years.

Overseas, Phase I of the Company’s Thailand factory entered trial production in May 2025, mainly manufacturing high-end IHDI, HLC and optical communication module products. The mass production ramp-up is proceeding smoothly, and the factory has obtained certifications from multiple customers. Several world-leading clients in the server and optical communication sectors are actively conducting certification processes. As capacity utilization rises, the Company will continuously optimize its product mix to lift gross profit margins. In addition, four facilities including Thailand Phase II, Phase III, Phase V and a mechanical drilling center are under simultaneous construction. The newly added capacity will effectively meet the growing customer demand for high-end AI products and further consolidate the competitive edge of the Company in the global high-end electronics manufacturing industry.

The Company attaches great importance to continuously improving production and management efficiency through smart manufacturing and digital transformation. During the initial construction of new factories, the Company made forward-looking plan to build an in-depth integration and linkage mechanism between AI and production systems, enabling data-driven operations and forming a closed-loop smart factory system featuring “inspection-prediction-decision”. For the upgrading and renovation of existing plants, the Company formulated and implemented systematic upgrade solutions through on-site investigations, precise pain point analysis and scientific benefit evaluation, and established a maturity management system for smart factories covering the whole production process. At the group level, the Company fully pushes forward digital transformation, leverages artificial intelligence technologies to empower production management and business decision-making, and keeps optimizing operational workflows to secure steady growth in per capita output, thereby further strengthening overall profitability and market competitiveness.

4. Safeguard Secure and Stable Supply Chain, Prioritize Sound Financial Status and Operational Safety

2025 marked a pivotal year of capacity expansion for the PCB industry, during which major PCB manufacturers ramped up capital expenditure to expand production capacity, resulting in tight supply of upstream production equipment. Adhering to the philosophy o “treating suppliers with sincerity”, the Company has established friendly long-term partnerships with all suppliers. Backed by solid business reputation and abundant capital strength, the Company secured robust support from the supply chain, ensuring the smooth rollout of all capacity expansion plans. Meanwhile, amid volatile prices of upstream raw materials, the Company’s supply chain management department delivered full play to its functions. On one hand, its professional team conducted real-time analysis of the impacts of global political and economic conditions on international bulk commodities such as copper and gold, as well as supply status of upstream material suppliers, providing decision-making support for the Company’s raw material procurement. On the other hand, digital transformation of the supply chain boosted decision-making efficiency to enable faster responses to market fluctuations. Strategic alliances were formed with multiple key upstream suppliers to guarantee supply chain stability. In 2025, the Company’s operating revenue rose by 11.40% year on year, while operating costs grew by 10.37%, driving a 0.74 percentage point year-on-yea increase in gross profit margin. Despite the overall price hike of upstream raw materials, the Company achieved effective cost contro and sound profitability.

The Company attaches high priority to sound financial conditions and operational safety, maintaining all financial indicators at healthy levels and sufficient cash flow. As of December 31, 2025, the Company held monetary funds of RMB 12.032 billion with an asset liability ratio of 28.86%. The turnover days of accounts receivable (including bills receivable) stood at 56 days and inventory turnove days at 43 days, both ranking at favorable levels within the industry. Ample cash reserves, a sound asset-liability structure and efficient asset turnover reflect the outstanding execution capacity of the Company in financial management and business operations, delivering steady backing for long-term stable development and capital expansion, and supporting sustainable and sound growth of the Company.

2. Revenue and Cost

(1) Breakdown of operating revenue

Unit: RMB

(2) Industries, products, regions, and sales models accounting for more than 10% of the Company’s operating revenue or operating profit

Applicable Not applicable Unit: RMB

Where the statistical basis for the Company’s principal business data changed during the reporting period, the principal business data for the most recent year is presented based on the adjusted basis as at the end of the reporting period.

□ Applicable ^ Not applicable

(3) Whether the Company’s revenue from physical product sales exceeded its revenue from service (4) Performance of major sales contracts and major procurement contracts signed by the Company as at the end of the reporting period

Yes No

Explanation of YoY changes of more than 30% in relevant data Applicable Not applicable

□ Applicable ^ Not applicable

(5) Breakdown of operating costs

Industry

Unit: RMB

Explanation No material changes occurred in the composition of the Company’s operating costs during the reporting period.

(6) Whether the scope of consolidation changed during the reporting period

Yes No

1) On 30 October 2025, the Company acquired a 53.68% equity interest in Wuxi Huayang at a consideration of RMB 356,724,164.00. Wuxi Huayang became a non-wholly-owned subsidiary of the Group and was included in the consolidation scope.

2) On 29 December 2025, the Company disposed of all equity interests held in Yaoding Shenzhen and its subsidiaries Yaoding Huaian and Yaoding Qinhuangdao, resulting in a disposal loss of RMB 7,976,623.70.

(7) Whether there were any material changes or adjustments to the Company’s business, products, or services during the Reporting Period

□ Applicable ^ Not applicable

(8) Major customers and suppliers

Major customers of the Company

Details of the Company’s top five customer

Other information about major customers

Applicable Not applicable

Major Customer B refers to Hon Hai Group and its subsidiaries under its control. Foxconn (Far East) Limited, a wholly-owned subsidiary of Hon Hai Group, is the largest shareholder of Avary Holding, the indirect controlling shareholder of the Company. In accordance with the substance over form principle, the Company identifies Hon Hai Group as a related party.

All related transactions between the Company and Hon Hai Group as well as its controlled subsidiaries during the reporting period were conducted on an arm’s length basis with fair transaction prices. In addition, all relevant procedures governing related transactions stipulated in the Articles of Association have been strictly complied with.

Major suppliers of the Company

Details of the Company’s top five supplier

Other information about major suppliers:

Applicable Not applicable

Major Supplier E is Hon Hai Group and its controlled subsidiaries. Foxconn (Far East) Limited, a wholly-owned subsidiary of Hon Hai Group, is the largest shareholder of Avary Holding, the Company’s indirect controlling shareholder. The Company classifies Hon Hai Group as a related party based on the substance over form principle.

All related transactions between the Company and Hon Hai Group together with its controlled subsidiaries during the reporting period followed arm’s length market principles with fair pricing. Meanwhile, all relevant procedures for related transactions set forth in the Articles of Association have been strictly implemented.

Revenue generated from the Company’s trading business accounted for more than 10% of total operating revenue during the reporting period.

Applicable Not applicable

3. Expenses

Unit: RMB

4. R&D expenses

☑ Applicable Not applicable

R&D personnel of the Company

R&D expenses of the Company

Reasons for and impact of significant changes in the composition of the Company’s R&D personnel

Applicable ☑ Not applicable

Reasons for significant changes in the ratio of total R&D expenses to operating revenue compared with the previous year

Applicable Not applicable

Reasons for and reasonableness of significant changes in the capitalization rate of R&D expenses

Applicable Not applicable

5. Cash flows

Unit: RMB

Explanation of the main factors contributing to significant YoY changes in relevant data

Applicable Not applicable

The decrease in cash inflows from investing activities was mainly attributable to lower cash received from maturing time deposits with a term over three months compared with the prior year.

The increase in cash outflows from investing activities was mainly due to higher cash payments for the acquisition and construction of fixed assets and other long-term assets during the reporting period.

The increase in cash inflows from financing activities was mainly driven by higher cash proceeds from borrowings.

The increase in cash outflows from financing activities was mainly attributable to higher cash repayments of borrowings.

Explanation of significant differences between net cash flows from operating activities during the reporting period and net profit fo

the year

Applicable Not applicable

Net cash flows generated from operating activities of the Company during the reporting period amounted to RMB 7.286 billion, while net profit stood at RMB 3.713 billion. The difference between the two figures was mainly affected by combined factors including depreciation of fixed assets, amortization of intangible assets, depreciation of right-of-use assets and inventory increase during the reporting period. For details, please refer to Note 55 Supplementary Information to the Cash Flow Statement under VII Notes to Consolidated Financial Statements, Section VIII Financial Reports of this report.

V. Analysis of Non-Principal Business

Applicable Not applicable

Unit: RMB

VI. Analysis of Assets and Liabilities

1. Significant changes in asset composition

Unit: RMB

Whether overseas assets account for a relatively high proportion Applicable Not applicable

2. Assets and liabilities measured at fair value

☑ Applicable Not applicable

Unit: RMB

Other changes

Not applicable

Whether the measurement attributes of the Company’s major assets changed significantly during the reporting period

YES No

3. Restrictions on asset rights as at the end of the reporting period

As of the end of the reporting period, no assets of the Company are subject to encumbrances.

VII. Investment Overview

1. Overall information

^ Applicable □ Not applicable

2. Significant equity investments made during the reporting period

^ Applicable □ Not applicable

Unit: RMB

3. Significant non-equity investments in progress during the reporting period

☑ Applicable Not applicable

Unit: RMB

4. Investment in financial assets

(1) Securities investments

^ Applicable □ Not applicable

Unit: RMB

(2) Derivative investments

□ Applicable ^ Not applicable

The Company had no derivatives investments during the reporting period.

VIII. Sales of Major Assets and Equity Interests

1. Sale of major assets

□ Applicable ^ Not applicable

The Company did not sell any major assets during the reporting period.

2. Sale of major equity interests

□ Applicable ^ Not applicable

IX. Analysis of Major Subsidiaries and Associated Companies

Applicable Not applicable

Major subsidiaries and associated companies with impact of over 10% on the Company’s net profit Unit: RMB Acquisition and disposal of subsidiaries during the reporting period

Applicable Not applicable

Explanation of major Subsidiaries and Investees

Benefiting from the mass production of Phase I Project at the Company’s three Huaian campuses, the expanded production capacity of subsidiary Qingding Precision drove revenue growth. In 2025, its operating revenue rose by 5.06% year-on-year. Meanwhile, the capacity utilization rate of new production lines kept climbing, continuously lifting its profitability. Its operating profit increased by 30.15% year-on-year and net profit rose by 25.57% in 2025.

X. Structured Entities Controlled by the Company

Applicable Not applicable

XI. Outlook for the Company’s Future Development

(I) Corporate Development Strategy

The Company takes “Develop technologies for the betterment of human beings; protect the environment for a greener earth” as its mission, upholds the core values of “Integrity, responsibility, innovation, excellence and profitability”, and strives to fulfill its vision of developing PCB-related industries and becoming an industry leader.

Going forward, the Company will continue to adopt the business strategy of “stabilizing growth, adjusting structure, controlling risks and boosting innovation”. Rooted in Chinese mainland and with a global footprint, the Company will sustain its core strengths in technological R&D and lean management, focus on high-end product development, deepen industrial chain collaboration, and further refine the industrial layout under the “One Avary” framework. The Company will step up key technological research and resource investment centered on AI products, speed up the improvement of weak links, and accurately capture market trends. Faced with historic opportunities brought by the AI era to the PCB industry, the Company will leverage its full product portfolio to cover the entire AI industrial chain including cloud, network and terminal segments, consolidate and expand its leading market position, and achieve sustainable and high-quality development.

(II) Business Plan

The Company steadily advanced its overall business plan in 2025 and achieved remarkable results. Amid a volatile external environment, the Company maintained strategic focus, ramped up digital transformation and upgrading in pursuit of established development targets, and delivered all-round improvement in operating performance

In 2026, the international landscape will remain volatile with heightened uncertainties in the global political and economic order. Escalating geopolitical tensions in the Middle East have severely disrupted the global energy supply system, while shifts in global trade conditions have introduced massive uncertainties to global supply chains. Meanwhile, the AI technological revolution has unlocked huge market opportunities for the industry, yet it has also triggered shortages of key components including memory chips, exerting substantial impacts on downstream electronics sectors. Faced with the complex and volatile market landscape, the Company will furthe consolidate and expand its market share in AI edge devices, foldable smartphones and other high-end products to strengthen its marke edge in the AI edge segment. In parallel, the Company will accelerate capacity expansion projects in Huaian and Thailand to rapidly scale up production capacity for AI servers, optical modules and other related products, expedite customer and product certification for AI server businesses, deliver leapfrog growth in relevant segments and drive overall revenue expansion. The Company will systematically enhance its risk management system, boost supply chain resilience and security, and fully implement lean management. By optimizing resource allocation, raising operational efficiency and rigorously controlling all expenses, the Company will cut costs and improve efficiency to secure steady and sustainable operating returns.

1. R&D Strategies and Plans

Adhering to the mission of “Develop technologies for the betterment of human beings; protect the environment for a greener earth” and core values of “Integrity, responsibility, innovation, excellence and profitability”, the Company continuously develops advanced process technologies and forward-looking product technologies aligned with industry trends, expands its diversified product portfolio, and steadily strengthens its competitive edges.

Driven by technological advances in artificial intelligence, 6G communications, diversified micro-displavs, new energy, foldable displays, and third- and fourth-generation semiconductors, sectors including automotive electronics, consumer electronics, communication base stations, optical communication, low-orbit satellites, AI servers, High Bandwidth Memory (HBM), energy storage, robotics, smart healthcare, wearables and brain-computer interfaces are undergoing rapid iteration. These new growth drivers wil shape the future development of the industry.

Accordingly, the Company’s short-term R&D plan focuses on fast-growing AI cloud, network and terminal markets. The Company will develop core AI product technologies such as PCBs for AI chips and large-size high-layer PCBs, while also researching and developing promising forward-looking technologies.

The Company will adopt a dual R&D center strategy covering Taiwan and the Chinese Mainland, fully leveraging complementary strengths in the electronics industry across both regions, continuously boosting its capability for new technology development, and building a more competitive innovation ecosystem.

2. Capital Expenditure Plan

The estimated capital expenditure for 2026 is RMB 16.8 billion, funded mainly by internal capital and self-raised funds. Key investment projects include the Huaian Industrial Park Project, Thailand Production Base Construction Project, and the Company’s digital transformation and upgrading project.

3. Production and Operation Plan

The Company formulates annual sales strategies based on customer groups and product categories. In terms of product layout, the Company seizes AI development opportunities to improve the full AI cloud-network-terminal industrial chain, increases the revenue proportion of core products such as AI servers and optical modules, and realizes coordinated growth across cloud businesses. For customer development, the Company consolidates existing market share of mature products with long-term clients, taps new demand for new products from existing customers, and actively explores incremental markets with new clients and new products. Under the “One Avary” product platform, the Company will consolidate its advantages in FPCs, expand market share of HDI and MSAP products, address weak points of HLC products, and realize coordinated, complementary development across all product lines to deliver complete ONE-STOP SHOPPING solutions for customers.

In procurement management, guided by the Chairman’s core philosophy of “Treat suppliers well”, the Company pursues win-win cooperation with strategic partners and deepens strategic alliances with more key suppliers. Amid fast-changing market conditions, the Company optimizes procurement decision-making processes to improve response efficiency and safeguard supply chain security and stability.

In production management, the Company strengthens quality control, elevates customer service, advances smart manufacturing to boost productivity, and drives continuous improvement via CAPDCA to deliver premium products and services to customers.

In operation management, the Company will consistently uphold its core values of “Integrity, responsibility, innovation, excellence and profitability”, adhere to long-termism, and strive for sustainable corporate development. To this end, the Company will further advance digital transformation, revitalize organizational vitality, stimulate team innovation and collaboration, embrace breakthroughs and transformation, and ensure the smooth delivery of long-term strategic targets.

4. Financial Strategies

(1) Maintain sound liquidity and cash flow to secure stable corporate operation;

(2) Mitigate exchange rate volatility risks through appropriate financial hedging instruments to reduce the impact of currency fluctuations;

(3) Formulate scientific short-term and long-term financing plans, rationally allocate domestic and overseas financing, develop diversified financing channels, effectively cut financing costs and risks, and improve capital utilization efficiency.

5. Talent Development Plan

The Company keeps close track of market trends. Aligned with corporate development strategies and differentiated functional demands of businesses, the Company focuses on cultivating core competencies of employees, strengthens organizational culture, fosters future talents, empowers overseas business expansion, supports the delivery of strategic targets, and drives sustainable corporate operation. To this end, the Company has established a systematic talent development framework. It rolls out customized talent programs fo different job ranks and specialties, integrates internal and external resources, and trains core professionals required by the Group in a targeted manner. A high-value talent supply chain is built through planning, implementation, resource introduction, system optimization and talent assessment.

(1) Right Talent Selection: Improve talent recruitment and selection mechanisms at all levels to match suitable employees with proper positions, deliver targeted training and upgrade their professional knowledge and skills.

(2) Professional Talent Cultivation: Develop diversified talents with international vision, specialized expertise, automation and smart manufacturing capabilities. Leverage internal training platforms to strengthen professional training. The Technical Committee and Quality & Management Institute formulate technical certification and assessment systems. Combined with industry-university cooperation and internalized external training resources, the Company builds an outstanding technical talent pipeline.

(3) Effective Talent Deployment: Implement a dynamic management mechanism for management cadres with flexible promotion, demotion, recruitment and exit. A sound system will be formed where competent staff get promoted, outstanding performers receive rewards, mediocre employees are demoted and underperformers eliminated. Succession planning will be advanced to realize orderly talent inheritance across all levels.

(4) Talent Retention: Unblock career development paths, build a high-value talent supply chain for the organization, and provide premium resources and support to facilitate steady growth of employees.

(5) Boost Human Resource Efficiency: Accelerate digital transformation of human resources, continuously optimize HR management systems, provide manpower data support for corporate decision-making, and improve talent quality and work efficiency.

(6) Cultural Development: Deepen corporate culture development, build an innovative and international corporate culture, and elevate the soft power of the Company.

(III) Potential Risks and Countermeasures

1. Risks Arising from Fluctuations in Global Macroeconomy

The strong resurgence of global trade protectionism in 2025 drew widespread attention and triggered chain reactions, reshaping the landscape of global supply chains, trade flows and economic growth models. At the start of 2026, escalating geopolitical tensions in the Middle East severely disrupted the international energy supply system and introduced new uncertainties to major global economies. Such circumstances may exert direct impacts on the electronic products industry, and in turn affect the PCB sector.

Countermeasures: The Company maintains long-term cooperation with top-tier customers and suppliers, develops high-end products including AI edge devices and foldable products, and closely tracks market trends. The Company continuously raises awareness of operational risk management, ensures the safety and controllability of all financial indicators, and proactively mitigates risks. Meanwhile, the Company leverages artificial intelligence and big data analytics to strengthen market forecasting capabilities, improve the efficiency and accuracy of decision-making, and consolidate its capacity to cope with uncertainties. Furthermore, the Company gives full play to its existing strengths to seize massive market opportunities driven by surging demand for AI computing power, accelerates market expansion of core products such as AI servers and optical modules, so as to effectively offset the adverse impacts of global macroeconomic volatility on consumer electronics businesses.

2. Exchange Rate Fluctuation Risks

The Company’s major customers and suppliers are overseas entities. Its export sales and raw material imports are mainly settled in US dollars, resulting in substantial US dollar assets (primarily US dollar cash and operating receivables) and US dollar liabilities (including operating payables, bank borrowings and other loans) held on a sustained basis. As production and sales scale expand, the value of imported raw materials and exported products will keep rising, driving up the volume of foreign exchange settlements. Against an increasingly complex global political and economic landscape, the US dollar exchange rate has become far more volatile, exposing the Company to heightened exchange rate fluctuation risks

Countermeasures: The Company assigns dedicated professionals to monitor exchange rate movements and rationally adjust the composition and volume of foreign exchange holdings. Meanwhile, the Company conducts transactions in financial derivatives such as forward foreign exchange contracts and foreign exchange swaps to hedge against exchange rate risks.

3. Risks Arising from Shifts in Global Trade Landscape

The Company’s primary customers are overseas enterprises. Since 2025, the international trade environment has grown more intricate alongside reshuffling of the global trade landscape. As a large multinational enterprise, the Company’s operating performance may be adversely affected by shifts in global trade.

Countermeasures: The Company mitigates potential negative impacts from trade changes through a global footprint and intensified market development in mainland China and other regions worldwide.

4. Risks of Shortage and Price Hike of Raw Materials and Energy

The Company’s PCB products mainly consume raw materials including electronic components, copper-clad laminates, SUS stiffeners, adhesive films, coverlays, potassium gold cyanides, prepregs, inks, copper balls and copper powder. Fluctuations in raw material prices will exert certain impacts on the gross profit margin of the Company’s products. In addition, production requires massive electricity, whose supply and price are subject to swings in energy supply and prices. At present, escalating global geopolitical conflicts and climate change have triggered drastic price volatility in global energy and commodity markets. Meanwhile, the rapid expansion o downstream electronics industries has driven a sharp surge in industrial demand, which has been passed on to the upstream PCB supply chain. Against such backdrop, raw material and energy prices are highly uncertain, exposing the Company to operational risks arising from rising raw material and energy costs.

Countermeasures: The Company strengthens communication and cooperation with upstream raw material suppliers, adjusts raw material inventory levels in a timely manner to secure stable material supply. Meanwhile, through technological upgrading, the Company continuously optimizes its product mix and develops high value-added products to ease profit pressure caused by rising raw material prices.

5. Risks Arising from Rapid Industry Changes and Intensified Market Competition

The Company’s products are mainly applied in communication, consumer electronics and computer sectors, which feature fast fashion cycles, frequent performance upgrades and numerous brands. Consumer preferences for various brands and products shift rapidly, resulting in shorter cycles of market share restructuring compared with traditional industries. The Company’s operating performance may suffer adverse impacts if key clients fall into a disadvantageous position amid market competition, if the Company’s technology and production capacity fail to meet clients’ new product requirements, if clients temporarily adjust, delay or suspend new product technical routes, or if the Company fails to develop new clients in a timely manner.

Countermeasures: Leveraging leading technological strengths, the Company closely follows industry trends, ramps up development of new clients and new products, and accelerates market share expansion in downstream segments such as automotive electronics and data centers to mitigate risks brought by industry shifts.

No new risk factors have emerged during the current year, and there have been no material changes to the principal risks faced by the Company.

XII. Company-Hosted Research, Communication, and Interview Activities during the Reporting Period

Applicable Not applicable

XIII. Implementation of the Market Value Management System and Valuation Enhancement Plan

Whether the Company has established a market value management system

Yes No

Whether the Company has disclosed a valuation enhancement plan

Yes No

The Company held the 13th meeting of the 3rd Board of Directors on December 25, 2024, and reviewed and approved the Proposal on Formulating the Company’s Market Value Management System.

The Company’s Market Value Management System sets out systematic provisions covering market value management bodies and personnel, major market value management approaches, monitoring and early warning mechanisms, emergency response measures, and internal assessment and evaluation methods. It aims to effectively boost the Company’s investment value, raise investor returns and safeguard investors’ interests.

For full text of the Market Value Management System, please refer to Market Value Management System of Avary Holding (Shenzhen) Co., Limited published on CNINFO (www.cninfo.com.cn) on December 26, 2024.

XIV. Implementation of the Action Plan for “Improvement in Both Quality and Earnings”

Whether the Company has disclosed the announcement on the action plan for “Improvement in Both Quality and Earnings” Yes No

On March 6, 2024, the Company disclosed the Announcement on the Action Plan for “Improvement in Both Quality and Earnings” of Avary Holding on CNINFO. To implement the guiding principles set forth at the Political Bureau of the CPC Central Committee that “we shall invigorate the capital market and boost investor confidence” and the State Council executive meeting that “we shal substantially improve the quality and investment value of listed companies, adopt more powerful and effective measures to stabilize the market and shore up confidence”, and safeguard the interests of all shareholders, the Company formulated the Action Plan fo “Improvement in Both Quality and Earnings”. Targeted measures will be rolled out across five dimensions: Focus on core business to achieve competitive advantages; Pursue innovative development to stay ahead of industry trends; Adopt green and low-carbon practices for sustainable operation; Advance digital transformation and standardized governance; Reward shareholders and enhance corporate value to fully deliver the goals of the Action Plan for “Improvement in Both Quality and Earnings”.

During the reporting period, guided by its mission “Develop technologies for the betterment of human beings; protect the environmen for a greener earth” and vision “Develop PCB and other related industries to become a leader in the industry”, the Company kept pace with trends in the electronics sector and remained focused on its core PCB business. By consolidating market share with existing clients and expanding emerging business segments, the Company further refined its industrial layout under the “One Avary” framework. In 2025, the Company recorded core operating revenue of RMB 38.843 billion, representing a year-on-year increase of 10.93% compared with 2024.

In terms of R&D and innovation, leveraging the full-spectrum PCB product platform under “One Avary”, the Company ramped up R&D investment and strategic layout for AI-related products, covering all cloud, network and terminal application scenarios in the AI era. In 2025, the Company’s R&D expenditure reached RMB 2.459 billion, accounting for 6.28% of total operating revenue, with a 5.79% year-on-year rise in R&D spending. As of December 31, 2025, Avary Holding had filed a total of 2,801 patents and obtained 1,647 granted patents.

For green development, the Company consistently fosters internal green culture and actively responds to global demands for environmental protection and sustainable development. The Company optimizes production processes, adopts green energy and low carbon materials to effectively cut carbon emissions and resource consumption during manufacturing. During the reporting period, total Scope 1 and Scope 2 greenhouse gas emissions from the Company’s major production sites stood at 291,699 tons CO e, with an emission intensity of 0.07 tons CO₂e per RMB 10.000 revenue, marking an 84% reduction against the 2013 baseline

Regarding digital transformation and standardized governance, the Company prioritizes smart manufacturing and digital upgrading to continuously lift production and management efficiency. By the end of 2025, the Company had built 17 smart factories. Elevating corporate governance standards, improving information disclosure quality and strengthening investor protection remain core priorities for the Company. In 2025, in compliance with the latest regulatory requirements and internal development needs, the Company comprehensively revised over 30 governance documents including the Articles of Association, Rules of Procedure for the Board of Directors and Working Rules for Independent Directors. The Company also optimized its governance structure by abolishing the Board of Supervisors and redefining the scope of responsibilities of the Audit Committee.

The Company has built an investor protection system centered on standardized information disclosure and has been awarded Grade A, the highest rating for information disclosure assessment by the Shenzhen Stock Exchange, for six consecutive years. In 2025, the Company maintained a 100% response rate on the SZSE Investor Interactive Platform (IRM.cninfo.com.cn), and all online inquiries submitted during the collective investor reception day activities received full replies.

The Company attaches great importance to shareholder returns. In 2025, the Company formulated a three-year Shareholder Return Plan covering 2025 to 2027, specifving clear criteria and ratios for cash dividends. In 2025, the Company distributed cash dividends in strict accordance with the shareholder return plan and profit distribution policies, and implemented the 2024 profit distribution scheme. Total cash dividends distributed for 2024 amounted to RMB 2,318,051,016, accounting for 64.03% of the net profit attributable to shareholders of listed companies for 2024. Since its IPO, the Company has distributed cumulative dividends of RMB 9.724 billion with an average dividend payout ratio of 40.91%. This fully demonstrates the management’s strong commitment to safeguarding shareholder interests and sharing operating gains with investors while sustaining corporate growth.

Section IV Corporate Governance, Environmental and Social

Responsibility

I. Overview of Corporate Governance

In accordance with the Company Law, the Securities Law and other relevant laws and regulations, the Company has established a corporate governance structure comprising the General Meeting of Shareholders, the Board of Directors, specialized committees of the Board and senior management. Pursuant to the relevant laws and regulations and the Articles of Association, the Company has formulated rules and procedures including the Rules of Procedure of the General Meeting of Shareholders, the Rules of Procedure of the Board of Directors, the Working System for Independent Directors, the Working Guidelines for the Secretary of the Board of Directors, and the Working Guidelines for the Chief Executive Officer, providing institutional support for the standardized operation of the Company’s corporate governance structure.

(I) Shareholders and General Meeting of Shareholders

The Company strictly complies with laws, administrative regulations and the relevant provisions of the Articles of Association and the Rules of Procedure of the General Meeting of Shareholders to regulate the convening, holding and voting procedures of General Meetings. The Company treats all shareholders equally and ensures that all shareholders are able to fully exercise their rights. During the reporting period, the convening and holding procedures of the General Meeting, the qualifications of attendees and the voting procedures all complied with the Company Law, the Articles of Association and the Rules of Procedure of the General Meeting o Shareholders.

(II) Controlling Shareholders and the Listed Company

The Company maintains a complete business system and the capability to operate independently in the market. The Company is independent from its controlling shareholder, indirect controlling shareholder and other enterprises under their control in terms of assets, personnel, finance, organization and business. The Board of Directors and internal organizations of the Company are able to operate independently. The controlling shareholder conducts itself in a strictly regulated manner, without directly or indirectly interfering in the Company’s decision-making and operations beyond the authority of the General Meeting of Shareholders. There are no acts that harm the interests of the listed company, such as non-operational occupation of the listed company’s funds or illegal guarantees.

(III) Directors and Board of Directors

The Board of Directors comprises 9 directors, including 1 Chairman, 3 independent directors and 1 employee representative director. The Board has a well-balanced professional structure, and its members possess the knowledge, skills and qualities necessary to perform their duties. The Board has established five specialized committees, namely the Strategy and Risk Management Committee, the Audit Committee, the Nomination Committee, the Remuneration and Assessment Committee, and the ESG Development Committee, which assist the Board in performing its functions in respect of strategic development planning and risk management, internal and externa auditing, the nomination of directors and senior management, remuneration and assessment of directors and senior management, and ESG development, respectively, providing scientific and professional advisory opinions for Board decisions. During the reporting period, the Company convened and held Board meetings strictly in accordance with the Articles of Association and the Rules o Procedure of the Board of Directors. Directors performed their duties faithfully, honestly and diligently, attended Board meetings on time and expressed clear opinions on matters deliberated by the Board.

(IV) Independent Directors

The Company has 3 independent directors, of whom 1 is an accounting professional and the other 2 also have extensive backgrounds and practical experience in the electronics industry. Independent directors perform their duties strictly in accordance with the requirements of laws and regulations and normative documents such as the Company Law, the Corporate Governance Code for Listed Companies and the Measures for the Administration of Independent Directors of Listed Companies. They perform their duties diligently and participate in Board decision-making in an independent and objective manner, playing a key role in financial report review, related party transaction examination and internal control supervision. They effectively oversee matters that may involve material conflicts of interest with the controlling shareholder, actual controller, directors and senior management, thereby strongly promoting Board decisions that are in the overall interests of the listed company and effectively protecting the legitimate rights and interests of minority shareholders.

(V) Performance Evaluation and Incentive-Restraint Mechanism

The appointment of the Company’s directors and senior management is open, transparent and in compliance with relevant laws, regulations and the Articles of Association. The responsibilities of the CEO and other senior management are clearly defined, enabling them to perform their duties in accordance with the Articles of Association, the Working Guidelines for the CEO and other management systems. The Company has formulated the Proposal on the Performance-based Remuneration Accrual Method for the Chairman, Mid to-Senior Management and Core Technical Personnel, linking the remuneration of the Chairman and senior management with the Company’s performance and individual performance results, thereby fully motivating senior management’s work initiative and creativity, improving the level of corporate management and promoting the Company’s healthy and sustainable development

The performance evaluation of the Company’s directors and senior management is the responsibility of the Remuneration and Assessment Committee of the Board. Each year, the CEO submits a work report to the Board; the Board reports to the General Meeting of Shareholders on the performance of directors’ duties; and independent directors submit reports on their performance to the General Meeting of Shareholders.

(VI) Stakeholders

While maintaining rapid growth, the Company places great importance on corporate social responsibility. It regards “employees, customers, strategic partners, shareholders and society” as the five pillars of Avary’s development, fully respecting and protecting the legitimate rights of employees and other stakeholders, and strengthening communication and cooperation with all parties to jointly drive the company’s sustainable and healthy development. Meanwhile, guided by its corporate mission of “developing technology, benefiting humanity, advancing environmental protection, and making the earth a better place”, the Company actively promotes a green corporate culture, advances environmentally friendly, low-carbon and high-quality development, actively participates in social welfare activities and practices corporate social responsibility

(VII) Information Disclosure and Investor Protection

The Company strictly fulfills its information disclosure obligations in accordance with the Shenzhen Stock Exchange’s Rules for the Listing of Stocks and other relevant laws and regulations, ensuring that information disclosure is truthful, accurate, complete and timely The Company has designated Shanghai Securities News, Securities Times and CNINFO as its designated information disclosure media, ensuring that all shareholders have equal access to the Company’s operational information. To further standardize information disclosure management and improve the internal control mechanism for information disclosure, the Company has established the Avar Holding Information Disclosure Committee and formulated the Working Procedures of the Information Disclosure Committee, which are strictly implemented.

To protect the interests of minority investors, and in accordance with the Company’s Information Disclosure Management System and Investor Relations Management System, the Company has designated the Secretary of the Board to be responsible for information disclosure and investor relations work. The Office of the Secretary of the Board plans, arranges and organizes various investor relations management activities and day-to-day affairs. The Company has established unimpeded investor communication channels and maintains comprehensive communication and exchange with investors through dedicated investor hotlines, investor research visits and the interactive platform of the investor relations website. After the disclosure of periodic reports, the Company promptly holds performance briefings. During the reporting period, the Company held online performance briefings following the publication of the Annual Report and Semi-annual Report, enabling investors to gain a more comprehensive and in-depth understanding of the Company’s operational performance and development strategy.

The Company has formulated a Market Capitalization Management System to effectively drive the enhancement of the Company’s investment value, strengthen investor returns and protect investor interests. The Company actively rewards shareholders and has formulated a Three-Year Shareholder Return Plan, sharing the fruits of the Company’s development with shareholders through stable annual cash dividends.

Whether there are material differences between the Company’s actual corporate governance and the provisions on listed company governance issued by the laws, administrative regulations and the CSRC

□ Yes ^ No

The Company’s actual corporate governance does not materially differ from the provisions on listed company governance issued by the laws, administrative regulations and the CSRC.

II. Independence of the Company from its Controlling Shareholder and Actual Controller in Respect of Assets, Personnel, Finance, Organization and Business

The Company has a complete business system and the ability to operate independently in the market, and is independent from its controlling shareholder, indirect controlling shareholder and other enterprises under their control in terms of assets, personnel, finance, organization and business.

(I) Independence of Assets

The Company has a complete business system and all assets related to production and operations, with full control and disposal rights over all assets. There are no instances of assets being occupied by the controlling shareholder, indirect controlling shareholder or othe enterprises under their control that would harm the interests of the Company.

(II) Independence of Personnel

The Company’s human resources management is completely independent from the controlling shareholder, indirect controlling shareholder and other enterprises under their control. Senior management including the CEO, General Manager, Deputy General Managers, CFO and Secretary of the Board are employed on a full-time basis by the Company and receive remuneration solely from the Company. None of them hold any position other than director or supervisor, or receive any remuneration other than director’s allowance, from the controlling shareholder, indirect controlling shareholder or other enterprises under their control. None of them holds a position in any other entity with the same or similar business as the Company or with other conflicts of interest. The Company’ financial personnel do not hold concurrent positions at the controlling shareholder, indirect controlling shareholder or other enterprises under their control.

(III) Independence of Finance

The Company has established an independent finance department staffed with dedicated financial personnel capable of making independent financial decisions. The Company has established standardized corporate accounting systems, financial managemen systems and internal control systems. The Company maintains separate bank accounts and independently manages its operating funds, with no bank accounts shared with shareholders or any other entities or individuals. The Company files and pays taxes independently in accordance with the law, with no commingling of taxes with shareholders.

(IV) Independence of Organization

In strict compliance with the Company Law, the Company has established the General Meeting of Shareholders, the Board of Directors, specialized Board committees, senior management teams and relevant functional departments, and has established a standardized corporate governance structure and comprehensive internal rules and regulations, exercising its management powers independently.

(V) Independence of Business

The Company has an independent and complete R&D system, independently procures raw materials required for production, independently organizes product manufacturing, and independently sells products and provides services. The Company’s business is independent from the controlling shareholder and other enterprises under its control. The Company independently generates business revenue and profit, without relying on shareholders or any other related parties.

III. Competition with the Same Industry

Applicable Not Applicable

IV. Directors and Senior Management

1. Basic Information

Note: 1. As of the end of the reporting period, Mr. Charles Shen indirectly holds 0.33% equity interest in Avary Holding through Yuefeng Company. 2. As of the end of the reporting period, Mr. Lin Yihong indirectly holds 0.03% equity interest in Avary Holding through Yuefeng Company. 3. As of the end of the reporting period, Mr. Xiao Dewang indirectly holds 0.03% equity interest in Avary Holding through Yuefeng Company.

2. Employment Details Professional Background, Principal Work Experience and Current Responsibilities of Current Directors and Senior Management of the Company Mr. Charles Shen: Born in 1952, graduated from the Department of Business Administration at Chinese Culture University (Taiwan) with a bachelor’s degree. From 1979 to 1989, he served at the Export-Import Bank of the R.O.C., where he held the position of Section Chief. From 1990 to 1993, he served at Asia Securities Co., Ltd., where he held the position of Deputy General Manager. From 1993 to 1994, he served at Chung Hsing Bank of Commerce (Taiwan), where he held the position of Special Assistant to the General Manager. From 1994 to 1996, he served at Pacific Securities Co., Ltd. (Taiwan), where he held the position of Executive Vice President. From 1996 to 1997, he served at Asia Financial Advisors Co., Ltd., where he held the position of General Manager. From 1997 to 1999, he served at Ideal Land Co., Ltd., where he held the position of General Manager. From 1999 to 2004, he served at Yaowen Electronics Industrial Co., Ltd., where he held the position of General Manager. In 2004, he served at Hongyang Venture Capital Co., Ltd., where he held the position of Deputy General Manager. Since 2005, he has served as Chairman of Zhen Ding Holding. He currently serves as Chairman of the Board and Chief Executive Officer of the Company. Mr. You Zhehong: Born in 1963, graduated from the Department of Law at National Chengchi University (Taiwan) with a bachelor’s degree, and later obtained a master’s degree from the Washington College of Law at American University (USA). From 1998 to 2002, he served at Hon Hai Group, where he held the position of Legal Counsel in the Legal Department. From 2002 to 2010, he served at Hongyang Venture Capital Co., Ltd., where he held the position of Senior Manager of the Investment and Legal Department. Since February 2010, he has been employed at Hon Hai Group. He currently serves as a Director of the Company, Senior Associate of the Central Finance and Legal Affairs Division of Hon Hai Group, and a Director of Zhen Ding Holding, among other positions. Mr. Huang Chongxing: Born in 1954, graduated from the Department of Electrical Engineering at National Taiwan University with a bachelor’s degree, and later obtained a Ph.D. in Business Administration from the University of Texas (USA). From 1978 to 1982, he served at Texas Instruments (Taiwan), where he held the position of Engineering Department Manager. From 1987 to July 2018, he served at the College of Management of National Taiwan University, where he held the position of full-time Associate Professor. From 2017 to 2020, he served as an Independent Director of the Company. He currently serves as a Director of the Company, and concurrently serves as Distinguished Professor at Fudan University, Independent Director and member of the Remuneration Committee at Yiying

4. As of the end of the reporting period, Mr. Zhong Jiahong indirectly holds 0.02% equity interest in Avary Holding through Dele Investment.

f h d f h i i d i h i di l h ld i i i ldi h h l Investment.

Whether any directors or senior management departed during their terms of office during the reporting period □ Yes ^ No

Changes in Directors and Senior Management of the Company

Applicable Not Applicable

2. Employment Details

Professional Background, Principal Work Experience and Current Responsibilities of Current Directors and Senior Management of the Company

Mr. Charles Shen: Born in 1952, graduated from the Department of Business Administration at Chinese Culture University (Taiwan) with a bachelor’s degree. From 1979 to 1989, he served at the Export-Import Bank of the R.O.C., where he held the position of Section Chief. From 1990 to 1993, he served at Asia Securities Co., Ltd., where he held the position of Deputy General Manager. From 1993 to 1994, he served at Chung Hsing Bank of Commerce (Taiwan), where he held the position of Special Assistant to the General Manager. From 1994 to 1996, he served at Pacific Securities Co., Ltd. (Taiwan), where he held the position of Executive Vice President. From 1996 to 1997, he served at Asia Financial Advisors Co., Ltd., where he held the position of General Manager. From 1997 to 1999, he served at Ideal Land Co., Ltd., where he held the position of General Manager. From 1999 to 2004, he served at Yaowen Electronics Industrial Co., Ltd., where he held the position of General Manager. In 2004, he served at Hongyang Venture Capital Co., Ltd., where he held the position of Deputy General Manager. Since 2005, he has served as Chairman of Zhen Ding Holding. He currently serves as Chairman of the Board and Chief Executive Officer of the Company.

Mr. You Zhehong: Born in 1963, graduated from the Department of Law at National Chengchi University (Taiwan) with a bachelor’s degree, and later obtained a master’s degree from the Washington College of Law at American University (USA). From 1998 to 2002, he served at Hon Hai Group, where he held the position of Legal Counsel in the Legal Department. From 2002 to 2010, he served at Hongyang Venture Capital Co., Ltd., where he held the position of Senior Manager of the Investment and Legal Department. Since February 2010, he has been employed at Hon Hai Group. He currently serves as a Director of the Company, Senior Associate of the Central Finance and Legal Affairs Division of Hon Hai Group, and a Director of Zhen Ding Holding, among other positions.

Mr. Huang Chongxing: Born in 1954, graduated from the Department of Electrical Engineering at National Taiwan University with a bachelor’s degree, and later obtained a Ph.D. in Business Administration from the University of Texas (USA). From 1978 to 1982, he served at Texas Instruments (Taiwan), where he held the position of Engineering Department Manager. From 1987 to July 2018, he served at the College of Management of National Taiwan University, where he held the position of full-time Associate Professor. From 2017 to 2020, he served as an Independent Director of the Company. He currently serves as a Director of the Company, and concurrently serves as Distinguished Professor at Fudan University, Independent Director and member of the Remuneration Committee at Yiying

Co., Ltd., Independent Director at Chenbro Micom Co., Ltd., and Executive Director and full-time Professor at the College of Business, Chang Gung University (Taiwan).

Mr. Lin Yihong: Born in 1967, graduated from Feng Chia University with a bachelor’s degree in International Trade, and later obtained a master’s degree from the Rotterdam School of Management. From 1992 to 1994, he served at Baoqiao Taiwan Co., Ltd., where he held the position of Sales Representative. From 1997 to 2000, he served at IBM Taiwan Corporation, where he held the position of Specialist. From 2000 to 2006, he served at United Parcel Service (UPS) Taiwan, where he held the position of Senior Manager. In 2007, he served at Yulon Motor Co., Ltd., where he held the position of Senior Manager. From 2007 to 2017, he served at Zhen Ding Holding, where he held the position of Deputy General Manager. From 2017 to 2023, he served as Deputy General Manager of the Company. He currently serves as a Director and General Manager of the Company.

Mr. Ke Chengen: Born in 1952, graduated from the Department of Business Administration at National Taiwan University with a bachelor's degree, and subsequently obtained a Master's degree in Business Administration from the University of Southern California (USA) and a Ph.D. in Accounting from the University of Minnesota (USA). He previously served at the School of Accounting at the University of Southern California as an Assistant Professor, and at the Department of Accounting at National Taiwan University, where he served as Professor, Department Chair, and Dean of the College of Management. From 2017 to 2025, he served as a Supervisor of the Company. He is currently an Emeritus Professor in the Department of Accounting at National Taiwan University and serves as a Director of the Company. He concurrently serves as an Independent Director and member of the Remuneration Committee at Changta Industrial Co., Ltd., an Independent Director and member of the Remuneration Committee at Lianmao Electronics Co., Ltd., a member of the Remuneration Committee at ATEN International Co., Ltd., a member of the Remuneration Committee at Yangcheng Technology Co., Ltd., and a member of the Remuneration Committee at Zhen Ding Holding.

Ms. Miao Chunna: Born in 1986, graduated from Northeastern University at Qinhuangdao with a bachelor’s degree in Marketing, and later obtained a Master’s degree in Business Administration from Tongji University. Since 2008, she has been employed at the Company. From 2017 to 2025, she served as an Employee Representative Supervisor of the Company. She currently serves as an Employee Representative Director of the Company and Chairperson of the Labor Union.

Ms. Zhang Milin: Born in 1982, graduated from Tsinghua University with a bachelor’s and master’s degree in Electronic Science and Technology, and obtained a Ph.D. from the Hong Kong University of Science and Technology. She served as a Postdoctoral Researche at the University of Pennsylvania (USA). From 2016 to 2019, she served as an Assistant Professor at Tsinghua University. Since 2019, she has served as an Associate Professor in the Department of Electronic Engineering at Tsinghua University. She currently serves as an Independent Director of the Company.

Mr. Zhang Jianjun: Born in 1964, graduated from Anhui University of Finance and Economics with a bachelor’s degree in Commercial Accounting, a master’s degree in Accounting, and a Ph.D. in Accounting from Shanghai University of Finance and Economics. From 1985 to 1999, he taught at Jiangxi University of Finance and Economics, successively serving as Teaching Assistant in Accounting, Associate Professor and Deputy Department Chair, and Professor and Deputy Dean. From 1999 to 2001, he served as Vice President of Pengyuan Credit Rating Co., Ltd. From 2001 to 2006, he served as Dean and Professor of the School of Economics at Shenzhen University. Since 2003, he has concurrently served as a member of the Expert Committee for the Shenzhen Mayor's Quality Award. Since 2014, he has concurrently served as a Council Member of the Chinese Accounting Association. Since 2018, he has concurrently served as Supervisor General of the Shenzhen Accounting Association. Since 2007, he has served as Director and Professor of the Institute of Accounting and Finance at Shenzhen University. He currently serves as an Independent Director of the Company, and concurrently serves as an Independent Director of Sunwoda Electronic Co., Ltd. and an Independent Director of Chongda Technology Co., Ltd.

Mr. Wei Xuezhe: Born in 1970, graduated from the Department of Automation, School of Electronics and Information Engineering at Tongji University with a bachelor’s and master’s degree, and obtained a Ph.D. in Vehicle Engineering from the School of Automotive Studies at Tongji University. From 1997 to 2020, he taught at the School of Automotive Studies at Tongji University, successively serving as Teaching Assistant, Associate Professor, and Deputy Dean. Since 2011, he has served as a Professor at the School of Automotive Studies at Tongji University and as Secretary General of the Hydrogen Energy Fuel Cell Branch of the China Battery Industry Association. He currently serves as an Independent Director of the Company, and concurrently serves as an Independen Director of Ningbo Joyson Electronic Co., Ltd.

Mr. Chen Guosheng: Born in 1964, graduated from the Department of Electrical Engineering at National Kaohsiung University o Science and Technology (Taiwan) with a bachelor’s degree, and later obtained a Master’s degree in Business Administration from I Shou University (Taiwan). From 1986 to 2020, he served at Nippon Mektron, Ltd. (Taiwan), where he held the position of Genera Manager. Since 2020, he has been employed at the Company. He currently serves as General Manager of the Company.

Mr. Xiao Dewang: Born in 1966, graduated from the Department of Business Administration at National Taiwan University with a bachelor’s degree, and later obtained a master’s degree in Business Administration from Cornell University (USA). From 1991 to 1993, he served at Yuntong Trading Co., Ltd., where he held the position of Deputy Manager. From 1996 to 1997, he served at Xinqiao Investment Co., Ltd., where he held the position of Specialist. From 1997 to 1998, he served at Xinyu Cogeneration Co., Ltd., where he held the position of Associate Manager. In 1999, he served at Lianqiao Chemical Co., Ltd., where he held the position of Deputy Manager. From 1999 to 2003, he served at Yaowen Electronics Industrial Co., Ltd., where he held the position of Manager/Specia Assistant. From 2004 to 2005, he served at Hongyang Venture Capital Co., Ltd., where he held the position of Deputy Manager. From 2006 to 2017, he served at Zhen Ding Holding, where he held the position of Senior Associate. From 2015 to 2016, he served a Yangcheng Technology Co., Ltd., where he held the position of Director. Since 2017, he has served as Deputy General Manager and Chief Financial Officer of the Company.

Ms. Zhou Hong: Born in 1965, graduated from Tsinghua University with a bachelor's degree in Air Conditioning and Refrigeration and later obtained a Master of Engineering from the School of Architecture at Tsinghua University, an MBA from Massey University (New Zealand), and a Master’s degree in Finance. From 1989 to 1992, she served as a Lecturer at Beijing University of Technology. From 1992 to 1997, she served as an Engineer at Shenzhen Architectural Design Institute. From 2001 to 2007, she served as an Independent Director of EVOC Intelligent Technology Co., Ltd. From 2001 to 2002, she served as an Assistant to the President at Shenzhen Jiyu Investment Management Co., Ltd. From 2002 to 2003, she served as a Director at Asia Global Securities Co., Ltd., Hong Kong. From 2003 to 2005, she served at Dongfang Yijian Health Industry Investment Co., Ltd., where she held the position of Director. From 2005 to 2016, she served at CSG Holding Co., Ltd., where she held the position of Secretary to the Board of Directors. From 2016 to 2017, she served at Shenzhen Malian Technology Co., Ltd., where she held the position of Chief Executive Officer. Since 2017, she has served as Deputy General Manager and Secretary to the Board of Directors of the Company, and concurrently serves as an Independent Director of Chengtian Weiye.

Mr. Zhong Jiahong: Born in 1976, graduated from the Department of Electronics at Southern Taiwan University of Science and Technology. From 2003 to 2006, he served at Jialianyi Technology Co., Ltd. as an Overseas Sales Representative. From 2006 to 2017, he served at Zhen Ding Holding, where he held the position of Associate in the Sales Department. Since 2017, he has been employed at the Company. He currently serves as Deputy General Manager of the Company.

Mr. Gao Guoqian: Born in 1964, graduated from the Department of Chemical Engineering at Chung Yuan Christian University (Taiwan). From 1991 to 2003, he served as Deputy Plant Manager at Nan Ya PCB Co., Ltd. From 2003 to 2004, he served as Deputy General Manager at Jiading Technology Co., Ltd. From 2005 to 2020, he served as Plant Manager at Nan Ya PCB Co., Ltd. Since January 2020, he has been employed at the Company. He currently serves as Deputy General Manager of the Company.

Applicable Not Applicable

Ms. Yang Weizhen: Born in 1967, graduated from Tamkang University with a bachelor’s degree, majoring in Japanese and minoring in English. From 1989 to 1997, she served at Japan Airlines Co., Ltd., where she held the position of Senior Flight Attendant. From 1997 to 2002, she served at Proview Technology Co., Ltd., where she held the position of Deputy Manager in the Secretariat. Since 2005, she has served at Zhen Ding Holding, where she held the positions of Senior Secretary of the Chairman’s Office / Director of the Chairman’s Office / Director of Human Resources. Since 2017, she has been employed at the company. She currently serves as Deputy General Manager of the company.

Mr. Luo Anzhi: Born in 1975, graduated from the Department of Mechanical Engineering at Tamkang University (Taiwan). From 2000 to 2011, he served at Unimicron Technology Corporation, where he held the position of Senior Manager. Since 2011, he has been employed at Avary Holding. He currently serves as Deputy General Manager of the Company.

Whether the controlling shareholder or actual controller simultaneously serves as both Chairman and General Manager of the listed company

□ Applicable ^ Not Applicable

Positions Held at Shareholder Entities

Applicable Not Applicable

Positions Held at Other Entities

Penalties imposed by securities regulatory authorities on current and departed directors and senior management within the past three years □ Applicable ^ Not Applicable

3. Remuneration of Directors and Senior Management

Decision-making procedures, basis of determination and actual payment of remuneration for directors and senior management

At the 2022 Annual General Meeting held on April 25, 2023, the Company reviewed and approved the Proposal on the Accrual Method for Performance-based Remuneration for the Chairman, Middle and Senior Management, and Core Technical Personnel of the Company. In order to fully motivate professional managers, enhance the sense of responsibility and cohesion of the Company’s professional management team and core technical personnel, maintain the stability of Avary Holding’s core management team and core talent pool, and promote the healthy and sustainable development of the Company, the Company aligns the interests of the professional management team represented by the Chairman and core technical personnel with the interests of the Company, and has established the following performance-based remuneration accrual plan: (i) After the end of each fiscal year, the Company accrues a performance bonus for its middle and senior management and core technical personnel at 5% to 12% of the profit for that year (the above profit refers to the profit amount before accrual of the performance bonus). The total annual performance bonus amount is confirmed by the Chairman as authorized by the Board of Directors, and implemented upon deliberation and approval by the Remuneration and Appraisal Committee of the Board of Directors. (ii) The Chairman’s remuneration is accrued at 0.5% of the pre-tax net profit of the previous year. (iii) The performance and remuneration of the Company’s middle and senior management and technica personnel are determined based on the performance appraisal results of the relevant personnel for the current year.

At the 2024 Annual Shareholders’ Meeting held on April 29, 2025, the Company reviewed and approved the Proposal on Remuneration of Directors of the Company: Based on the industry in which the Company operates, taking into account the Company’s actual circumstances and the duties and responsibilities of directors, the Board of Directors approved the following director remuneration: Directors who hold positions in the Company and concurrently serve as directors of the Company’s shareholders shall receive the remuneration and benefits corresponding to their existing positions in the Company and the Company’s shareholders; directors who do not hold any position in the Company shall receive remuneration of RMB 0.3 million (pre-tax); independent directors shall receive an annual allowance of RMB 0.3 million (pre-tax), calculated on a pro rata daily basis for service periods of less than one full year. Necessary expenses incurred by directors in attending meetings of the Board of Directors and Shareholders’ Meetings and in exercising their powers in accordance with the Company Law, the Articles of Association, and other relevant provisions shall be separately reimbursed by the Company based on actual expenses incurred. The remuneration of the Chairman of the Company shall be calculated and paid in accordance with the Company’s Accrual Method for Performance-based Remuneration for the Chairman, Middle and Senior Management, and Core Technical Personnel.

Remuneration of Directors and Senior Management During the Reporting Period

Unit: RMB 10,000

Explanation of Other Circumstances

□ Applicable ^ Not Applicable

V. Performance of Duties by Directors during the Reporting Period

1. Attendance of Directors at Board and Shareholder Meetings

Explanation for failure to personally attend two consecutive Board meetings Not applicable

2. Objections Raised by Directors on Company Matters

Whether any director raised objections to company matters

□ Yes ^ No

During the reporting period, no director raised any objection to company matters

3. Other Explanations on the Performance of Duties by Directors

Whether recommendations made by directors regarding the Company were adopted

Yes No

The board’s explanation regarding whether the relevant recommendations of the company have been adopted or not

In 2025, the Board of Directors strictly fulfilled the Board’s responsibilities entrusted by the General Meeting in accordance with the Company Law, the Shenzhen Stock Exchange's Rules for the Listing of Stocks and other laws and regulations, as well as the Articles ot Association, the Rules of Procedure of the General Meeting, the Rules of Procedure of the Board of Directors and other corporate rules. The Board strictly implemented all resolutions of the General Meeting, actively promoted the implementation of all Board resolutions, continuously improved the Company’s corporate governance structure, and ensured that the Board made decisions scientifically and operated in a standardized manner. In terms of corporate management, the Board diligently carried out all its work, continuously strengthened internal control management, actively provided advice on major corporate decisions and promoted the development of the Company’s various businesses

In 2025, in accordance with the latest regulatory requirements and the Company’s own development needs, the Company comprehensively revised over 30 governance systems including the Articles of Association, the Rules of Procedure of the Board o Directors and the Working System for Independent Directors. The governance structure was simultaneously optimized by abolishing the Board of Supervisors and redefining the scope of responsibilities of the Audit Committee

VI. Specialized Committees under the Board of Directors during the Reporting Period

VII. Work of the Audit Committee

Whether the Audit Committee identified any risks in the Company during its supervisory activities in the reporting period Yes No

The Audit Committee had no objections to the matters subject to supervision during the reporting period.

VIII. Employees of the Company

1. Number of Employees, Professional Composition, and Education Level

2. Remuneration Policy

Based on the Company’s operational objectives and profitability performance, and taking into consideration factors such as employees job responsibilities, professional skills and performance results, Avary provides a competitive overall compensation package. This package includes incentive-based variable compensation such as base salary, allowances, year-end performance bonuses, continuous service bonuses, innovation and R&D bonuses and proposal improvement bonuses, designed to boost employee morale at appropriate times and retain outstanding talent

To maintain the Company’s overall compensation competitiveness, the Human Resources Department closely monitors changes in th external economic environment, coordinates planning and periodically reviews annual remuneration policies for each industrial park. When formulating policies, in addition to referencing the minimum wage standards promulgated by local governments, it also utilizes market remuneration survey reports provided by professional consulting firms to accurately assess salary levels in the locations of each industrial park and formulate salary adjustment plans in a timely manner.

The Company ensures that employees’ base salary is not lower than the local statutory minimum wage standard to meet employees basic living needs, and lawfully pays overtime compensation. In addition, the Company implements a differentiated salary adjustment mechanism based on employees’ individual seniority and work performance, and provides corresponding seniority allowances and performance bonuses, thereby constructing a remuneration system that balances fairness and incentivization

For detailed content of the Company’s remuneration policy, please refer to the “Talent Attraction and Retention” chapter of the Company’s disclosed Avary Holding 2025 Sustainable Development Report.

3. Training Plan

The Company places great emphasis on the cultivation and development of key middle-level core talents. By bringing in senior exper consultants, the Company conducts in-depth interviews and comprehensive 360-degree functional assessments for core talents, and precisely formulates personalized job-matching plans and career development paths based on assessment results. For employees at different ranks, the Company has planned diversified learning programs and activities, and constructed a tiered and categorized talen cultivation system. In terms of building organizational key talent pipelines, the Company has also invested substantial resources, covering multiple dimensions such as key position talent, young cadre reserves, and elite cadre class cultivation. The Company particularly focuses on systematic enhancement of professional capabilities, vigorously introducing cutting-edge technologies, and cultivating deep expertise in professional technical fields such as digital transformation, data analytics, intelligent manufacturing, and quality excellence, thereby forming a solid and effective talent cultivation mechanism.

In 2025, the average learning hours of the Company’s employees reached 92.5 hours, and the total annual training expenditure exceeded RMB 3,447,268.

For detailed content of the Company’s talent training plan, please refer to the “Talent Development and Empowerment” chapter of the Company’s disclosed Avary Holding 2025 Sustainable Development Report.

4.Labor Outsourcing

□ Applicable ^ Not Applicable

IX. Company Profit Distribution and Conversion of Capital Reserve into Share Capital

Profit distribution policy during the reporting period, in particular the formulation, implementation, or adjustment of the cash dividend policy

□ Applicable ^ Not Applicable

To further strengthen the awareness of returning value to shareholders and provide shareholders with continuous, stable, and reasonable investment returns, Avary Holding (Shenzhen) Co., Ltd., in accordance with the Company Law of the People’s Republic of China the Securities Law of the People’s Republic of China, the CSRC’s Supervisory Guidelines for Listed Companies No. 3 — Cash Dividends of Listed Companies and other relevant laws, regulations, normative documents, and the relevant provisions of the Articles of Association of Avary Holding (Shenzhen) Co., Ltd., has formulated the Company’s three-year (2025–2027) shareholder return plan, based on comprehensive consideration of various factors including the Company’s strategic development objectives, business plans profitability, cash flow conditions, and external financing environment

The Avary Holding (Shenzhen) Co., Ltd. Three-Year (2025–2027) Shareholder Return Plan clearly stipulates the planning principles for shareholder returns, the specific content of the shareholder return plan (including profit distribution forms, interval periods, conditions and proportions for cash dividends, specific conditions for stock dividends, etc.), the decision-making procedures and mechanisms for profit distribution, and the adjustment mechanisms for profit distribution policies.

During the reporting period, the Company implemented one profit distribution:

2024 Annual Profit Distribution: Based on the parent company’s distributable profit, with the total share capital of 2,318,560,816 shares as of December 31, 2024, after deducting the restricted shares proposed for repurchase and cancellation under the 2021 Restricted Stock Incentive Plan and the 2024 Restricted Stock Incentive Plan, a cash dividend of RMB 10.00 per 10 shares (including tax) was distributed to all shareholders, with no bonus shares issued and no conversion of capital reserve into share capital.

The Company was profitable during the reporting period and the parent company’s profit available for distribution to shareholders was positive, but no cash dividend distribution proposal was made

□ Applicable ^ Not Applicable

Profit Distribution and Conversion of Capital Reserve into Share Capital for the Current Reporting Period

Applicable Not Applicable

for repurchase and cancellation under the 2021 Restricted Stock Incentive Plan and the 2024 Restricted Stock Incentive Plan, with no bonus shares issued and no conversion of capital reserve into share capital.

X. Implementation of the Company’s Equity Incentive Plan, Employee Stock Ownership Plan, or Other Employee Incentive Measures

Applicable Not Applicable

1. Equity Incentive

(I) 2021 Restricted Stock Incentive Plan

1. On April 20, 2021, the Company convened the 2nd Board of Directors’ 11th meeting, which reviewed and adopted the Proposal on the Avary Holding (Shenzhen) Co., Ltd. 2021 Restricted Stock Incentive Plan (Draft) and Its Summary, the Proposal on the Avary Holding (Shenzhen) Co., Ltd. 2021 Restricted Stock Incentive Plan Implementation Assessment Management Measures, and the Proposal on Reauesting the Shareholders' General Meeting to Authorize the Board of Directors to Handle Matters Related to the Equity Incentive. The Company’s Independent Directors issued independent opinions on the above matters, and legal counsel issued the corresponding legal opinion letter. On the same day, the Company convened the 2nd Supervisory Board’s 5th meeting, which reviewed and adopted the Proposal on the Avary Holding (Shenzhen) Co., Ltd. 2021 Restricted Stock Incentive Plan (Draft) and Its Summary, the Proposal on the Avary Holding (Shenzhen) Co., Ltd. 2021 Restricted Stock Incentive Plan Implementation Assessmen Management Measures, and the Proposal on Verifying the List of Incentive Targets under the Avary Holding (Shenzhen) Co., Ltd. 2021 Restricted Stock Incentive Plan.

2. The Company published the names and positions of the proposed incentive targets on its internal website, with a public notice period from April 21, 2021 to April 30, 2021. Upon expiration of the public notice period, the Company’s Supervisory Board received no objections, and on May 7, 2021, disclosed the Supervisory Board’s Explanation of the Public Notice Status and Verification Opinion on the List of Incentive Targets under the Company’s 2021 Restricted Stock Incentive Plan (Announcement No.: 2021-030)

3. On May 12, 2021, the Company convened the 2020 Annual Shareholders’ General Meeting, which reviewed and adopted the Proposal on the Avary Holding (Shenzhen) Co., Ltd. 2021 Restricted Stock Incentive Plan (Draft) and Its Summary Proposal on the Avary Holding (Shenzhen) Co., Ltd. 2021 Restricted Stock Incentive Plan Implementation Assessment Management Measures, and the Proposal on Requesting the Shareholders’ General Meeting to Authorize the Board of Directors to Handle Matters Related to the Equity Incentive. The Company’s 2021 Restricted Stock Incentive Plan was thereby approved. On the same day, the Company disclosed the Self-Check Report on the Trading of the Company’s Shares by Insider Information Knowers and Incentive Targets under the 202 Restricted Stock Incentive Plan (Announcement No.: 2021-032).

4. Upon authorization by the Company’s Shareholders’ General Meeting, on June 15, 2021, the Company convened the 2nd Board o Directors’ 13th meeting and the 2nd Supervisory Board’s 7th meeting, respectively, which reviewed and adopted the Proposal on Adjusting Matters Related to the 2021 Restricted Stock Incentive Plan and the Proposal on Granting Restricted Shares to Incentive Targets. The Board of Directors agreed to adjust the relevant matters of the 2021 Restricted Stock Incentive Plan as follows: Given that 2 incentive targets no longer qualified as incentive targets due to resignation, 11 incentive targets voluntarily waived subscription of all restricted shares the Company intended to grant them for personal reasons, and 3 incentive targets voluntarily waived subscription of part of the restricted shares the Company intended to grant them for personal reasons, the Company adjusted the proposed incentive targets and the number of granted rights and interests under this incentive plan, granting 10,085,000 restricted shares to 287 incentive targets. Due to the implementation of the 2020 annual equity distribution, the restricted share grant price was adjusted from RMB 16.94 per share to RMB 16.44 per share. Meanwhile, the Board of Directors agreed that the grant date for the restricted shares under this plan shall be June 15, 2021. The Company’s Independent Directors issued independent opinions on the above matters, and legal counse issued the corresponding legal opinion letter. From the grant date of the incentive plan to the registration date, 1 incentive target voluntarily waived subscription of 40,000 restricted shares the Company intended to grant them for personal reasons; the Company’ actual number of granted restricted shares was adjusted from 10,085,000 shares to 10,045,000 shares, and the actual number of grantees was adjusted from 287 to 286.

5. On March 16, 2022, the Company convened the 2nd Board of Directors' 17th meeting and the 2nd Supervisory Board's 10th meeting respectively, which reviewed and adopted the Proposal on the Repurchase and Cancellation of Certain Restricted Shares under the 2021 Restricted Stock Incentive Plan. The Company decided to repurchase and cancel 320,000 restricted shares that had been granted to but not yet released from sales restrictions for 10 incentive targets who had resigned, at a repurchase price of RMB 16.44 per share The Company’s Supervisory Board expressed its approval, the Independent Directors issued approving independent opinions, and lega counsel issued a legal opinion letter.

6. On April 18, 2022, the Company convened the 2021 Annual Shareholders’ General Meeting, which reviewed and adopted the Proposal on the Repurchase and Cancellation of Certain Restricted Shares under the 2021 Restricted Stock Incentive Plan, approving the repurchase and cancellation of 320,000 restricted shares that had been granted to but not yet released from sales restrictions for 10 incentive targets who had resigned. On May 30, 2022, the repurchase and cancellation of these partial A-share restricted shares was completed.

7. On April 28, 2022, the Company convened the 2nd Board of Directors’ 19th meeting and the 2nd Supervisory Board’s 11th meeting, respectively, which reviewed and adopted the Proposal on the Fulfillment of Lifting-of-Sales-Restriction Conditions for the Firs Lifting-of-Sales-Restriction Period under the Company’s 2021 Restricted Stock Incentive Plan, agreeing that the Company shall, in accordance with the relevant provisions of the incentive plan, handle the lifting of sales restrictions for the incentive targets who mee the conditions. The Company's Supervisory Board expressed its approval, the Independent Directors issued approving independent opinions, and legal counsel issued a legal opinion letter. On July 11, 2022, the restricted shares released from sales restrictions in the first lifting-of-sales-restriction period under the 2021 Restricted Stock Incentive Plan became listed and tradable. A total of 274 incentive targets met the conditions for lifting sales restrictions, and the number of restricted shares that could be released from sales restrictions was 1,931,000 shares.

8. On March 28, 2023, the Company convened the 2nd Board of Directors’ 25th meeting and the 2nd Supervisory Board’s 16th meeting, respectively, which reviewed and adopted the Proposal on the Repurchase and Cancellation of Certain Restricted Shares under the 2021 Restricted Stock Incentive Plan. The Company decided to repurchase and cancel 718,000 restricted shares that had been granted to but not yet released from sales restrictions for 19 incentive targets who had resigned, at a repurchase price of RMB 16.44 per share The Company’s Supervisory Board expressed its approval, the Independent Directors issued approving independent opinions, and lega counsel issued a legal opinion letter.

9. On April 25, 2023, the Company convened the 2022 Annual Shareholders’ General Meeting, which reviewed and adopted the Proposal on the Repurchase and Cancellation of Certain Restricted Shares under the 2021 Restricted Stock Incentive Plan, approving the repurchase and cancellation of 718,000 restricted shares that had been granted to but not yet released from sales restrictions for 19 incentive targets who had resigned. On June 1, 2023, the repurchase and cancellation of these partial A-share restricted shares was completed.

10. On April 28, 2023, the Company convened the 3rd Board of Directors’ 2nd meeting and the 3rd Supervisory Board’s 2nd meeting, respectively, which reviewed and adopted the Proposal on the Fulfillment of Lifting-of-Sales-Restriction Conditions for the Second Lifting-of-Sales-Restriction Period under the Company’s 2021 Restricted Stock Incentive Plan, agreeing that the Company shall, in accordance with the relevant provisions of the incentive plan, handle the lifting of sales restrictions for the incentive targets who meet the conditions. The Company’s Supervisory Board expressed its approval, the Independent Directors issued approving independent opinions, and legal counsel issued a legal opinion letter. On July 10, 2023, the restricted shares released from sales restrictions in the second lifting-of-sales-restriction period under the 2021 Restricted Stock Incentive Plan became listed and tradable. A total of 255 incentive targets met the conditions for lifting sales restrictions, and the number of restricted shares that could be released from sales restrictions was 1,757,000 shares.

11. On March 29, 2024, the Company convened the 3rd Board of Directors’ 8th meeting and the 3rd Supervisory Board’s 6th meeting, respectively, which reviewed and adopted the Proposal on the Repurchase and Cancellation of Certain Restricted Shares under the 2021 Restricted Stock Incentive Plan. The Company decided to repurchase and cancel: 150,000 restricted shares that had been granted to but not yet released from sales restrictions for 8 incentive targets who had resigned; 6,000 restricted shares that had been granted to but not yet released from sales restrictions for 1 incentive target who did not meet the lifting-of-sales-restriction conditions for the second lifting-of-sales-restriction period; and 1,721,000 restricted shares corresponding to the third lifting-of-sales-restriction period for 249 active incentive targets where the lifting-of-sales-restriction conditions were not met and therefore could not be released from sales restrictions; totaling 1,877,000 restricted shares, at a repurchase price of RMB 16.44 per share. The Company’s Supervisory Board expressed its approval, and legal counsel issued a legal opinion letter

12. On April 24, 2024, the Company convened the 2023 Annual Shareholders’ General Meeting, which reviewed and adopted the Proposal on the Repurchase and Cancellation of Certain Restricted Shares under the 2021 Restricted Stock Incentive Plan, approving the repurchase and cancellation of: 150,000 restricted shares that had been granted to but not yet released from sales restrictions for 8 incentive targets who had resigned; 6,000 restricted shares that had been granted to but not yet released from sales restrictions for 1 incentive target who did not meet the lifting-of-sales-restriction conditions for the second lifting-of-sales-restriction period; and 1,721,000 restricted shares corresponding to the third lifting-of-sales-restriction period for 249 active incentive targets where the lifting of-sales-restriction conditions were not met and therefore could not be released from sales restrictions; totaling 1,877,000 restricted shares. On June 3, 2024, the repurchase and cancellation of these partial A-share restricted shares was completed.

13. On August 13, 2024, the Company convened the 3rd Board of Directors’ 10th meeting and the 3rd Supervisory Board’s 8th meeting, respectively, which reviewed and adopted the Proposal on Adjusting the 2024–2025 Performance Targets of the Company’s 2021 Restricted Stock Incentive Plan, agreeing to the Company’s adjustment of the 2024–2025 performance targets of the 2021 restricted stock incentive plan, and the simultaneous adjustment of the Avary Holding (Shenzhen) Co., Ltd. 2021 Restricted Stock Incentive Plan (Draft) and its summary and the Avary Holding (Shenzhen) Co., Ltd. 2021 Restricted Stock Incentive Plan Implementation Assessment Management Measures. The Company’s Independent Directors’ Special Meeting unanimously adopted the above proposals, and lega counsel issued a legal opinion letter.

14. On September 9, 2024, the Company convened the 2024 First Extraordinary Shareholders’ General Meeting, which reviewed and adopted the Proposal on Adjusting the 2024–2025 Performance Targets of the Company’s 2021 Restricted Stock Incentive Plan, agreeing to the Company’s adjustment of the 2024–2025 performance targets of the 2021 Restricted Stock Incentive Plan

15. On April 8, 2025, the Company convened the 3rd Board of Directors’ 15th meeting and the 3rd Supervisory Board’s 11th meeting, which reviewed and adopted the Proposal on the Repurchase and Cancellation of Certain Restricted Shares under the 2021 Restricted Stock Incentive Plan and the 2024 Restricted Stock Incentive Plan. The Company decided to repurchase and cancel: 64,000 restricted shares that had been granted to but not yet released from sales restrictions for 6 incentive targets who had resigned; 10,000 restricted shares that had been granted to but not yet released from sales restrictions for 1 incentive target who did not meet the lifting-of-sales restriction conditions for the fourth lifting-of-sales-restriction period; and, because the Company’s 2024 performance did not fully achieve the Company-level performance assessment target conditions, 335,800 restricted shares corresponding to 20% of the shares eligible for lifting of sales restrictions in the fourth lifting-of-sales-restriction period held by 242 active incentive targets; totaling 409,800 restricted shares for repurchase and cancellation, at a repurchase price of RMB 16.44 per share

16. On April 8, 2025, the Company convened the 3rd Board of Directors’ 15th meeting and the 3rd Supervisory Board’s 11th meeting, which reviewed and adopted the Proposal on the Partial Fulfillment of Lifting-of-Sales-Restriction Conditions for the Fourth Lifting of-Sales-Restriction Period under the Company’s 2021 Restricted Stock Incentive Plan: Given that the lifting-of-sales-restriction conditions for the fourth lifting-of-sales-restriction period under the Company’s 2021 Restricted Stock Incentive Plan have been partially fulfilled, the Company agreed to handle the lifting of sales restrictions for the incentive targets who meet the conditions in accordance with the relevant provisions of the incentive plan. The Company’s Supervisory Board expressed its approval, and lega counsel issued a legal opinion letter. On July 10, 2025, the restricted shares released from sales restrictions in the fourth lifting-of sales-restriction period under the 2021 Restricted Stock Incentive Plan became listed and tradable. A total of 241 incentive targets met the conditions for lifting sales restrictions, and the number of restricted shares that could be released from sales restrictions was 1,336,800 shares

17. On April 29, 2025, the Company convened the 2024 Annual Shareholders’ Meeting, which reviewed and adopted the Proposal on the Repurchase and Cancellation of Certain Restricted Shares under the 2021 Restricted Stock Incentive Plan and the 2024 Restricted Stock Incentive Plan, approving the repurchase and cancellation of: 64,000 restricted shares that had been granted to but not yet released from sales restrictions for 6 incentive targets who had resigned; 10,000 restricted shares that had been granted to but not yet released from sales restrictions for 1 incentive target who did not meet the lifting-of-sales-restriction conditions for the fourth lifting-of-sales restriction period; and, because the Company’s 2024 performance did not fully achieve the Company-level performance assessment target conditions, 335,800 restricted shares corresponding to 20% of the shares eligible for lifting of sales restrictions in the fourth lifting-of-sales-restriction period held by 242 active incentive targets; totaling 409,800 restricted shares for repurchase and cancellation. On June 9, 2025, the repurchase and cancellation of these partial A-share restricted shares was completed

(II) 2024 Restricted Stock Incentive Plan

1. On August 13, 2024, the Company convened the 3rd Board of Directors’ 10th meeting, which reviewed and adopted the Proposa on the Avary Holding (Shenzhen) Co., Ltd. 2024 Restricted Stock Incentive Plan (Draft) and Its Summary, the Proposal on the Avary Holding (Shenzhen) Co., Ltd. 2024 Restricted Stock Incentive Plan Implementation Assessment Management Measures, and the Proposal on Requesting the Shareholders’ General Meeting to Authorize the Board of Directors to Handle Matters Related to the Company’s 2024 Restricted Stock Incentive Plan. The Board of Directors’ Remuneration and Appraisal Committee unanimously adopted the relevant proposals, and legal counsel issued the corresponding legal opinion letter. On the same day, the Company convened the 3rd Supervisory Board’s 8th meeting, which reviewed and adopted the Proposal on the Avary Holding (Shenzhen) Co., Ltd. 2024 Restricted Stock Incentive Plan (Draft) and Its Summary, the Proposal on the Avary Holding (Shenzhen) Co., Ltd. 2024 Restricted Stock Incentive Plan Implementation Assessment Management Measures," and the Proposal on Verifying the List of Incentive Targets under the Avary Holding (Shenzhen) Co., Ltd. 2024 Restricted Stock Incentive Plan.

2. The Company published the names and positions of the proposed incentive targets on its internal website, with a public notice period from August 14, 2024 to September 4, 2024. Upon expiration of the public notice period, the Company’s Supervisory Board received no objections, and on September 4, 2024, disclosed the Avary Holding (Shenzhen) Co., Ltd. Supervisory Board’s Explanation of the Public Notice Status and Verification Opinion on the List of Incentive Targets under the Company’s 2024 Restricted Stock Incentive Plan (Announcement No.: 2024-053).

3. On September 9, 2024, the Company convened the 2024 First Extraordinary Shareholders’ General Meeting, which reviewed and adopted the Proposal on the Avary Holding (Shenzhen) Co., Ltd. 2024 Restricted Stock Incentive Plan (Draft) and Its Summary, the

Proposal on the Avary Holding (Shenzhen) Co., Ltd. 2024 Restricted Stock Incentive Plan Implementation Assessment Managemen Measures, and the Proposal on Requesting the Shareholders’ General Meeting to Authorize the Board of Directors to Handle Matters Related to the Company’s 2024 Restricted Stock Incentive Plan. The Company’s 2024 Restricted Stock Incentive Plan was thereby approved. On the same day, the Company disclosed the Self-Check Report on the Trading of the Company’s Shares by Insider Information Knowers and Incentive Targets under the 2024 Restricted Stock Incentive Plan (Announcement No.: 2024-056).

4. Upon authorization by the Company’s Shareholders’ General Meeting, on September 13, 2024, the Company convened the 3rd Board of Directors’ 11th meeting and the 3rd Supervisory Board’s 9th meeting, respectively, which reviewed and adopted the Proposa on Adjusting Matters Related to the 2024 Restricted Stock Incentive Plan and the Proposal on Granting Restricted Shares to Incentive Targets. The Board of Directors agreed to adjust the relevant matters of the 2024 Restricted Stock Incentive Plan as follows: Given that among the incentive targets proposed to be granted shares under this incentive plan, 7 incentive targets voluntarily waived subscription of all restricted shares the Company intended to grant them for personal reasons, the Board of Directors redistributed and adjusted the restricted share portions waived by the above employees for personal reasons among the remaining incentive targets. After adjustment, the number of incentive targets proposed to be granted restricted shares under this incentive plan changed from 388 to 381, and the total number of restricted shares proposed to be granted remained 9,469,900 shares. Meanwhile, the Board of Directors agreed that the grant date for the restricted shares under this plan shall be September 13, 2024. The Board of Directors’ Remuneration and Appraisal Committee unanimously adopted the above proposals, and legal counsel issued the corresponding legal opinion letter. For details, please refer to Avary Holding’s Announcement on the Completion of Grant Registration for the 2024 Restricted Stock Incentive Plan disclosed by the Company on October 16, 2024 (Announcement No.: 2024-066). On October 15, 2024, the grant registration for the 2024 Restricted Stock Incentive Plan was completed.

5. On April 8, 2025, the Company convened the 3rd Board of Directors’ 15th meeting and the 3rd Supervisory Board’s 11th meeting, which reviewed and adopted the Proposal on the Repurchase and Cancellation of Certain Restricted Shares under the 2021 Restricted Stock Incentive Plan and the 2024 Restricted Stock Incentive Plan. As of the current date, 4 incentive targets under the Company’s 2024 Restricted Stock Incentive Plan have resigned for personal reasons and no longer qualify as incentive targets. In accordance with the Company’s 2024 Restricted Stock Incentive Plan (Draft), the 2024 Restricted Stock Incentive Plan Implementation Assessmen Management Measures, and relevant laws and regulations, 100,000 restricted shares that had been granted to but not yet released from sales restrictions for the aforementioned 4 incentive targets will be repurchased and cancelled, at a repurchase price of RMB 17.70 per share.

6. On April 29, 2025, the Company convened the 2024 Annual Shareholders’ Meeting, which reviewed and adopted the Proposal on the Repurchase and Cancellation of Certain Restricted Shares under the 2021 Restricted Stock Incentive Plan and the 2024 Restricted Stock Incentive Plan, approving the repurchase and cancellation of 100,000 restricted shares that had been granted to but not yet released from sales restrictions for 4 incentive targets who had resigned. On June 9, 2025, the repurchase and cancellation of these partial A-share restricted shares was completed.

7. On August 12, 2025, the Company convened the 3rd Board of Directors’ 18th meeting, which reviewed and adopted the Proposa on the Partial Fulfillment of Lifting-of-Sales-Restriction Conditions for the First Lifting-of-Sales-Restriction Period under the Company’s 2024 Restricted Stock Incentive Plan: Given that the lifting-of-sales-restriction conditions for the first lifting-of-sales restriction period under the Company’s 2024 Restricted Stock Incentive Plan have been partially fulfilled, the Company agreed to handle the lifting of sales restrictions for the incentive targets who meet the conditions in accordance with the relevant provisions o the incentive plan. The Board of Directors’ Remuneration and Appraisal Committee expressed its approval, and legal counsel issued a legal opinion letter. On October 16, 2025, the restricted shares released from sales restrictions in the first lifting-of-sales-restriction period under the 2024 Restricted Stock Incentive Plan became listed and tradable. A total of 375 incentive targets met the conditions for lifting sales restrictions, and the number of restricted shares that could be released from sales restrictions was 2,611,412 shares.

Equity Incentive for Directors and Senior Management

Applicable Not Applicable

Unit: Shares

Assessment and Incentive Mechanism for Senior Management

At the 2022 Annual Shareholders’ General Meeting convened on April 25, 2023, the Company reviewed and adopted the Proposal on the Performance-Based Remuneration Accrual Method for the Company’s Chairman, Middle and Senior Management, and Core Technical Personnel. As the Company’s internationalization process continues to advance, the Company should establish an internationalized corporate governance system, construct a professional manager incentive mechanism aligned with international standards, and link professional managers’ incentives to the Company’s operating performance. To fully motivate the professiona managers’ work enthusiasm, enhance the sense of responsibility and cohesion of the Company’s professional manager team and core technical personnel, maintain the stability of Avary Holding’s core management team and core talent pool, and promote the healthy and sustainable development of the enterprise, the Company has aligned the interests of the professional manager team represented by the Chairman and core technical personnel with the interests of the enterprise, and determined the following performance-based remuneration accrual scheme: (1) After the end of each fiscal year, the Company shall accrue performance bonuses for middle and senior management and core technical personnel at 5%–12% of the current vear's profit (the above profit refers to the profit amount before accrual of performance bonuses). The total annual performance bonus amount shall be confirmed by the Chairman upon authorization by the Company’s Board of Directors, and shall be implemented after being reviewed and adopted by the Company’s Board of Directors’ Remuneration and Appraisal Committee. (2) The Chairman’s remuneration shall be accrued at 0.5% of the prior year’s pre-tax net profit. (3) The performance and remuneration of the Company’s middle and senior management and technical personnel shall be determined based on the performance assessment results of the relevant personnel for the current year.

Based on the above proposal, on April 7, 2025, the Company convened the 3rd Remuneration and Appraisal Committee’s 5th meeting, which reviewed and adopted the Proposal on Accruing 2024 Performance-Based Remuneration. For 2024, the Company accrued performance bonuses for middle and senior management and core personnel at 8% of the current year’s profit (the above profit refers to the profit amount before accrual of performance bonuses).

1. Internal Control Construction and Implementation In accordance with the Basic Standard for Internal Control, its accompanying guidelines, and other internal control regulatory requirements, and in combination with the Company’s actual circumstances, the Company has established a sound internal control system that has been effectively implemented, encompassing shareholders’ meeting rules of procedure, board of directors’ rules of procedure, board specialized committee rules of procedure, supervision and management of subsidiaries, seal management, raised funds management, sales and collection, procurement and payment, inventory management, fixed asset management, fund management, investment and financing management, human resource management, information system management, and information disclosure management, covering all business processes related to financial reporting and information disclosure in the Company’s business activities. The Board of Directors has established an Audit Committee, which is responsible for supervising and evaluating the work of the internal audit department, reviewing the annual internal control self-evaluation report and related materials issued by the Company’s internal audit department, and submitting them to the Board of Directors for deliberation. Based on the identification of material weaknesses in the Company’s internal control over financial reporting, as of the base date of the Internal Control Evaluation Report, there were no material weaknesses in internal control over financial reporting. The Company has maintained effective internal control over financial reporting in all material aspects in accordance with the requirements of the enterprise internal control standards system and relevant regulations; based on the identification of material weaknesses in the Company’s internal control over non-financial reporting, as of the base date of the Internal Control Evaluation Report, no material weaknesses in internal control over non-financial reporting were identified.

2. Implementation of Employee Stock Ownership Plan

□ Applicable ^ Not Applicable

3. Other Employee Incentive Measures

□ Applicable ^ Not Applicable

XI. Internal Control System Construction and Implementation during the Reporting Period

1. Internal Control Construction and Implementation

In accordance with the Basic Standard for Internal Control, its accompanying guidelines, and other internal control regulatory requirements, and in combination with the Company’s actual circumstances, the Company has established a sound internal control system that has been effectively implemented, encompassing shareholders’ meeting rules of procedure, board of directors’ rules of procedure, board specialized committee rules of procedure, supervision and management of subsidiaries, seal management, raised funds management, sales and collection, procurement and payment, inventory management, fixed asset management, fund management, investment and financing management, human resource management, information system management, and information disclosure management, covering all business processes related to financial reporting and information disclosure in the Company’s business activities.

The Board of Directors has established an Audit Committee, which is responsible for supervising and evaluating the work of the internal audit department, reviewing the annual internal control self-evaluation report and related materials issued by the Company’s internal audit department, and submitting them to the Board of Directors for deliberation.

Based on the identification of material weaknesses in the Company’s internal control over financial reporting, as of the base date of the Internal Control Evaluation Report, there were no material weaknesses in internal control over financial reporting. The Company has maintained effective internal control over financial reporting in all material aspects in accordance with the requirements of the enterprise internal control standards system and relevant regulations; based on the identification of material weaknesses in the Company’s internal control over non-financial reporting, as of the base date of the Internal Control Evaluation Report, no materia weaknesses in internal control over non-financial reporting were identified.

2.Specific Circumstances of Material Weaknesses in Internal Control Identified during the Reporting Period

Yes No

XII. Management and Control of Subsidiaries during the Reporting Period

As of the end of the reporting period, the Company had 17 subsidiaries. The Company has formulated the Subsidiary Management Measures, which regulate the standardized operations, personnel management, financial management, business decision-making management, and information management of subsidiaries at the institutional level. As an investor, the Company exercises supervision and management over major matters of subsidiaries in the capacity of a shareholder or controlling person, lawfully enjoys the rights to investment returns, selection of managers, and equity disposal as major decision-making matters for invested enterprises, and bears the obligation to provide guidance, supervision, and relevant assistance services to subsidiaries. In terms of personnel management, the Company lawfully exercises shareholder rights and, in accordance with the provisions of the subsidiary’s articles of association, elects or appoints directors, supervisors, and senior management personnel. In terms of financial management, subsidiaries and the Company implement a unified accounting system; subsidiaries accept the business guidance and supervision of the Company’s finance department, and may not lend funds externally (including entrusted loans) or provide external guarantees without the Company’s consent. In terms of business decision-making management, the subsidiary’s operations and development plans must comply with and serve the Company’s development strategy and overall planning, and within the framework of the Company’s development planning, the subsidiary shall refine and improve its own plans; if a subsidiary engages in external investment activities, it must report to the Company in accordance with the relevant provisions of the Company’s External Investment Management System, and such activities shall be approved by the Shareholders’ General Meeting, the Board of Directors, or the Chief Executive Officer within their respective scopes of authority. In terms of information management, the head of the subsidiary is the first responsible person for the management and reporting of information disclosure affairs, and shall promptly report major matters of the subsidiary to the Secretary to the Board of Directors and the Office of the Secretary to the Board of Directors in accordance with the provisions of the Company’s Major Information Internal Reporting System. In addition, the Company periodically or from time to time implements audit supervision over subsidiaries to ensure that subsidiaries operate in compliance with the Company’s various regulations.

Whether there are abnormalities in the management and control of subsidiaries Yes No

XIII. Internal Control Evaluation Report or Internal Control Audit Report

1.Internal Control Evaluation Report

2. Internal Control Audit Report

Applicable Not Applicable

Whether the accounting firm issued a non-standard opinion Internal Control Audit Report

Yes No

Whether the opinion in the Internal Control Audit Report issued by the accounting firm is consistent with the Board of Directors' self evaluation report

Yes No

Whether a non-standard audit opinion on internal control was issued for the reporting period or the prior year

Yes No

XIV. Self-Inspection and Rectification of Issues under the Listed Company Governance Special Action

In 2021, in accordance with the requirements of the China Securities Regulatory Commission (CSRC), the Company conducted a self inspection of its corporate governance from the time of listing through 2020. The self-inspection results showed that there was one issue requiring rectification in the Company’s governance, namely that a director was absent from the Company’s 2019 Annua Shareholders’ General Meeting.

In response to this issue, the Company internally formulated the Shareholders’ Meeting Work Manual, stipulating that when issuing shareholders’ meeting notices, as well as three days before and one day before the shareholders’ meeting, all directors and senio management personnel must be reminded via email or mobile phone to attend or be present at the shareholders’ meeting, ensuring that directors and senior management personnel attend the shareholders’ meeting on time. At the same time, to facilitate directors and senior management personnel’s attendance at shareholders’ meetings, the Company has established dedicated video conference accounts for directors and senior management personnel, providing technical support for their video participation.

Since the self-inspection and rectification, all of the Company’s directors have attended the Company’s shareholders’ meetings on time, with no absences.

XV. Environmental Information Disclosure

Whether the listed company and its major subsidiaries are included in the list of enterprises subject to statutory environmenta information disclosure

Yes No

XVI. Social Responsibility

Avary Holding takes “Developing technology, benefiting humanity; Advancing environmental protection, making the Earth a better place” as its development mission, and “Integrity, Responsibility, Innovation, Excellence, and Benefiting Others” as its core values fo corporate development. Over the years, while the company has been developing rapidly, it has also attached great importance to fulfilling its corporate social responsibility

Mr. Charles Shen, Chairman of the Company, takes “Never do things that keep you awake at night” as his basic principle for persona conduct and business, and has deeply embedded this philosophy into the DNA of the Company’s development. While achieving standardized corporate governance, he also attaches great importance to protecting the rights and interests of shareholders and creditors, employee rights, and the interests of strategic partners. Meanwhile, the Company regards environmental protection and sustainable development as the cornerstone of its perpetual operations and actively participates in social welfare. For specific details on the Company’s fulfillment of social responsibility, please refer to the Avary Holding (Shenzhen) Co., Ltd. 2025 Sustainable Developmen Report disclosed on CNINFO

XVII. Consolidating and Expanding Poverty Alleviation Achievements and Rural Revitalization

In 2025, with a strong sense of social responsibility and mission, the Company continued to pay close attention to and activel participate in various efforts related to poverty alleviation and rural revitalization. The following are the major contributions and efforts made in this area:

Poverty Alleviation Donation Projects:

The Company donated RMB 0.1 million to Yong’an Town, Du’an County, Guangxi, for improving local road infrastructure construction.

Education Support Projects:

The Company donated books to three schools in Songkou Town, Meixian District, Meizhou City — Songkou Central Primary School, Songnan Central Primary School, and Songnan Middle School, with an amount of approximately RMB 0.105 million;

The Company continued to pay attention to the education of university students in poverty-stricken areas, helping them successfully complete their studies and realize their life dreams through the establishment of financial aid and scholarships. In 2025, the Company continued its educational assistance visits to impoverished students in Ziyang, Shaanxi and Daliangshan, Sichuan, raising a total o RMB 0.8387 million;

Agricultural Benefit Projects:

The company purchased over 70,000 Meizhou golden pomelos, demonstrating its commitment to the concept of assisting and benefiting farmers through concrete actions, effectively solving local fruit farmers’ sales difficulties, tangibly driving farmers’ income growth, and solidly safeguarding farmers’ livelihood security.

For detailed content of the Company’s efforts in consolidating and expanding poverty alleviation achievements and promoting rura revitalization, please refer to the “Rural Revitalization Initiatives” chapter of the Company’s disclosed Avary Holding 2025 Sustainable Development Report.

Section Ⅴ Important Matters

I. Status of Fulfillment of Commitments

1. Commitments fulfilled during the reporting period and commitments not yet fulfilled as of the end of the reporting period by the Company’s actual controller, shareholders, related parties, acquirers, and the Company itself as commitment-related partie.

Applicable Not Applicable

25% of the total number of shares I directly or indirectly hold in the Company. Within six months after my departure, I shall not transfer any shares I directly or indirectly hold in the Company; within the twelve-month period after six months from the declaration of departure, the proportion of Company shares sold through the stock exchange’s listed trading shall not exceed 50% of the total number of shares I hold in the Company. 2. If I reduce my holdings of the Company’s shares through centralized competitive trading, I shall fulfill the relevant procedures, including reporting and filing the share reduction plan with the exchange and making public announcements, at least 15 trading days prior to the first sale of shares. 3. In addition to the foregoing commitments, I commit that my share reduction activities will strictly comply with the provisions of the Company Law, the Securities Law, the Several Provisions on the Reduction of Shares by Shareholders, Directors, Supervisors and Senior Management of Listed Companies, the Shenzhen Stock Exchange Stock Listing Rules, the Shenzhen Stock Exchange Implementation Rules for the Reduction of Shares by Shareholders and Directors, Supervisors, and Senior Management of Listed Companies, and other relevant laws, regulations, and normative documents. 4. If relevant laws, regulations, departmental rules, normative documents, or regulatory requirements of the China Securities Regulatory Commission and

2. Description of Whether the Assets or Projects Have Achieved the Original Profit Forecasts and the Underlying Reasons

□ Applicable  Not applicable

3. Performance Commitments and the Achievement Thereof

□ Applicable ☑ Not applicable

II. Non-operating Appropriation of Funds of the Listed Company by Controlling Shareholders and Other Related Parties

□ Applicable ☑ Not applicable

During the reporting period, the Company had no non-operating appropriation of funds by controlling shareholders or other related parties.

III. Non-compliance in External Guarantees

□ Applicable ☑ Not applicable

During the reporting period, the Company had no non-compliance in external guarantees.

IV. Explanation by the Board of Directors on the Latest “Non-standard Audit Report”

□ Applicable ☑ Not applicable

V. Explanation by the Board of Directors and Independent Directors (if any) on the “Nonstandard Audit Report” Issued by the Accounting Firm for the Reporting Period

□ Applicable ☑ Not applicable

VI. Changes in Accounting Policies, Changes in Accounting Estimates, and Correction of Material Accounting Errors as Compared with the Prior Year’s Financial Statements

□ Applicable ☑ Not applicable

During the reporting period, the Company had no changes in accounting policies, changes in accounting estimates, or correction of material accounting errors.

VII. Changes in the Scope of the Consolidated Financial Statements as Compared with the Prior Year’s Financial Statements

☑ Applicable □ Not applicable

(1) On October 30, 2025, the Company acquired a 53.68% equity interest in Wuxi Huayang Technology Co., Ltd. (“Wuxi Huayang”) for a consideration of RMB 356,724,164.00. Wuxi Huayang became a non-wholly-owned subsidiary of the Group and was included in the scope of consolidation.

(2) On December 29, 2025, the Company disposed of its entire equity interest in Yaoding Technology (Shenzhen) Co., Ltd. (“Yaoding Shenzhen”) and its subsidiaries Yaoding Huai’an and Yaoding Qinhuangdao, recognizing a disposal loss of RMB 7,976,623.70.

VIII. Appointment and Dismissal of Accounting Firms

Currently Appointed Accounting Firm

Whether the accounting firm was changed during the current period

□ Yes ☑ No

Appointment of internal control audit accounting firm, financial advisor or sponsor

☑ Applicable □ Not applicable

During the year, the Company appointed PricewaterhouseCoopers Zhong Tian LLP as its internal control audit accounting firm, with internal control audit fees of RMB 0.30 million.

IX. Delisting Risk After Annual Report Disclosure

□ Applicable ☑ Not applicable

X. Matters Relating to Bankruptcy and Reorganization

□ Applicable ☑ Not applicable

No bankruptcy or reorganization events occurred during the reporting period.

XI. Material Litigation and Arbitration

□ Applicable ☑ Not applicable

No material litigation or arbitration occurred during the reporting period.

XII. Penalties and Rectification

□ Applicable ☑ Not applicable

No penalties or rectification occurred during the reporting period.

XIII. Integrity of the Company, Its Controlling Shareholders and Actual Controller

□ Applicable ☑ Not applicable

XIV. Material Related Party Transactions

1. Related Party Transactions in the Ordinary Course of Business

☑ Applicable □ Not applicable

2. Related Party Transactions Involving Asset or Equity Acquisitions and Disposals

□ Applicable ☑ Not applicable

3. Related Party Transactions Involving Joint External Investments

□ Applicable ☑ Not applicable No joint external investments with related parties occurred during the reporting period.

4. Related Party Debts and Credits

□ Applicable ☑ Not applicable

No material related party debts and credits existed during the reporting period.

5. Transactions with Finance Companies with Related Party Relationships

□ Applicable ☑ Not applicable

No deposits, loans, credit facilities or other financial transactions existed between the Company and finance companies with related party relationships.

6. Transactions Between the Company’s Controlled Finance Company and Related Parties

□ Applicable ☑ Not applicable

No deposits, loans, credit facilities or other financial transactions existed between the Company’s controlled finance company and related parties.

7. Other Material Related Party Transactions

☑ Applicable □ Not applicable

Targeted Capital Reduction of Associated Company Leading Semiconductor

On January 12, 2023, the Company convened the 23rd Meeting of the Second Board of Directors, which approved the Proposal on Investment in Related Company Leading Interconnect Semiconductor Technology (Shenzhen) Co., Ltd, pursuant to which the Company agreed to make an additional capital contribution of USD 136,020,151 to Leading Interconnect Semiconductor Technology (Shenzhen) Co., Ltd (“Leading Semiconductor”), a related company, of which USD 15,113,350 was credited to the registered capital of Leading Semiconductor and the remaining amount was credited to capital reserve. Upon completion of the capital increase, the Company held an 8.47% equity interest in Leading Semiconductor (calculated on the basis of the subscribed capital contribution). For details, please refer to the Announcement of Avary Holding on External Investment and Related Party Transaction (Announcement No. 2023-003) published in Securities Times, Shanghai Securities News and on Cninfo (www.cninfo.com.cn) on January 13, 2023.

On May 30, 2025, Leading Semiconductor, an associated company of the Company, convened a general meeting and resolved to implement a targeted capital reduction by canceling the unpaid capital contributions of certain shareholders, reducing the total subscribed registered capital from USD 178.464543 million to USD 110.13121 million. Following this capital reduction, the Company’s capital contribution to Leading Semiconductor remained unchanged, and the Company’s equity interest in Leading Semiconductor increased from 8.47% to 13.72%. For details, please refer to the Announcement of Avary Holding on the Capital Reduction of an Associated Company (Announcement No. 2025-035) published in Securities Times, Shanghai Securities News and on Cninfo (www.cninfo.com.cn) on June 3, 2025.

In July 2025, the capital reduction of Leading Semiconductor was completed.

Website Links for Interim Announcements on Material Related Party Transactions

XV. Material Contracts and Their Performance

1. Trusteeship, Contracting and Leasing Arrangements

(1) Trusteeship

□ Applicable ☑ Not applicable

No trusteeship arrangements existed during the reporting period.

(2) Contracting

□ Applicable ☑ Not applicable

No contracting arrangements existed during the reporting period.

(3) Leasing

☑ Applicable □ Not applicable

Description of Leasing Arrangements

Assets Leased by the Company from Other Parties:

1. The subsidiary Avary Hong Kong leases one office from Chuk Kwan Kee Enterprises Limited for office purposes.

2. The Company and its subsidiaries lease a total of 2,486 residential units from third parties within Mainland China for use as employee dormitories and ancillary living facilities.

3. Avary India leases a factory building of 257,000 square feet from S.N. Darmani Infra Private Limited in India for production purposes.

4. To comply with local government regulations, Avary India leases 174,240 square feet of green space from Ramakrishnan Rajagopal and Ravindranath Rajagopal, respectively.

5. The Vietnam Representative Office of Avary Hong Kong leases one office from LÊ MINH CƯỜNG ＆ NGUYỄN THỊ MAI for office purposes.

6. Peng Shen leases one office from CORAL HOLDING CO., LTD. for office purposes.

7. Peng Shen leases a total of 244 rooms from Saha Pathanapibul PCL for use as employee dormitories and ancillary living facilities.

8. Peng Shen leases land of 8.38725 rai from Saha Pathana Inter-Holding PCL for industrial park construction.

Assets of the Company Leased by Other Parties:

Assets of the Company leased by other parties primarily consist of the leasing of office floors in the Company’s headquarters building and ancillary employee service facilities in the Company’s various industrial parks, the amounts of which are immaterial and do not have a significant impact on the Company.

Projects generating profit or loss amounting to 10% or more of the Company’s total profit for the reporting period

□ Applicable ☑ Not applicable

No leasing projects generated profit or loss amounting to 10% or more of the Company’s total profit for the reporting period.

1. Trusteeship, Contracting and Leasing Arrangements (1) Trusteeship □ Applicable ☑ Not applicable No trusteeship arrangements existed during the reporting period. (2) Contracting □ Applicable ☑ Not applicable No contracting arrangements existed during the reporting period. (3) Leasing ☑ Applicable □ Not applicable Description of Leasing Arrangements Assets Leased by the Company from Other Parties:

2. Material Guarantees

□ Applicable ☑ Not applicable

No material guarantees existed during the reporting period.

3. Entrusted Cash Asset Management

(1) Entrusted Wealth Management

□ Applicable ☑ Not applicable

No entrusted wealth management existed during the reporting period.

(2) Entrusted Loan

□ Applicable ☑ Not applicable

No entrusted loans existed during the reporting period.

4. Other Material Contracts

□ Applicable ☑ Not applicable

No other material contracts existed during the reporting period.

XVI. Use of Raised Proceeds

□ Applicable ☑ Not applicable

No proceeds were raised during the reporting period.

XVII. Other Material Matters

☑ Applicable □ Not applicable

1. Capital Increase in Wholly-Owned Subsidiary Avary Taiwan

The Company convened the 5th Meeting of the Second Board of Directors on September 9, 2020, which approved the Proposal on Capital Increase in Wholly-Owned Subsidiaries, pursuant to which the Board approved a capital increase of USD 0.1 billion by the Company to Avary Hong Kong, and then by Avary Hong Kong to Avary Taiwan in the amount of NTD 3 billion for the construction of the Kaohsiung, Taiwan FPC project. For details, please refer to the Announcement of Avary Holding on Capital Increase in Wholly Owned Subsidiaries (Announcement No. 2020-059) published in China Securities Journal, Securities Times, Shanghai Securities News, Securities Daily and on Cninfo (www.cninfo.com.cn) on September 10, 2020.

il h d h h i f h hi d d f i hi h d h l Increase in Wholly-Owned Subsidiary Avary Taiwan, pursuant to which the Company agreed to adjust the above capital increase arrangement to a capital increase of NTD 3 billion (equivalent to approximately RMB 0.66 billion) by the wholly-owned subsidiary Avary Hong Kong to Avary Taiwan. For details, please refer to the Announcement of Avary Holding on Capital Increase in Wholly Owned Subsidiary Avary Taiwan (Announcement No. 2025-021) published in Securities Times, Shanghai Securities News and on Cninfo (www.cninfo.com.cn) on April 9, 2025.

This capital increase was completed in June 2025. For details, please refer to the Announcement of Avary Holding on the Completion of Capital Increase in Wholly-Owned Subsidiary Avary Taiwan (Announcement No. 2025-040) published in Securities Times, Shangha Securities News and on Cninfo (www.cninfo.com.cn) on June 18, 2025.

2. Capital Increase in Wholly-Owned Subsidiary Hong Heng Sheng

The Company convened the 15th Meeting of the Third Board of Directors on April 8, 2025, which approved the Proposal on Capital Increase in Wholly-Owned Subsidiary Hong Heng Sheng, pursuant to which the Company agreed to make a capital increase of RMB 0.5 billion in Hong Heng Sheng Electronical Technology (Huaian) Co., Ltd. , a wholly-owned subsidiary. For details, please refer to the Announcement of Avary Holding on Capital Increase in Wholly-Owned Subsidiary Hong Heng Sheng (Announcement No. 2025-022) published in Securities Times, Shanghai Securities News and on Cninfo (www.cninfo.com.cn) on April 9, 2025.

The related capital increase procedures were completed in April 2025. For details, please refer to the Announcement of Avary Holding on the Completion of Business Registration Changes of a Subsidiary (Announcement No. 2025-027) published in Securities Times,

Shanghai Securities News and on Cninfo (www.cninfo.com.cn) on April 12, 2025.

The Company convened the 21st Meeting of the Third Board of Directors on October 30, 2025, which approved the Proposal on Capital Increase in Wholly-Owned Subsidiary Hong Heng Sheng, pursuant to which the Company agreed to make a capital increase of RMB 0.5 billion in Hong Heng Sheng Electronical Technology (Huaian) Co., Ltd. For details, please refer to the Announcement of Avary Holding on Capital Increase in Wholly-Owned Subsidiary Hong Heng Sheng (Announcement No. 2025-066) published in Securities Times, Shanghai Securities News and on Cninfo (www.cninfo.com.cn) on October 31, 2025.

The related capital increase procedures were completed in December 2025. For details, please refer to the Announcement of Avary Holding on the Completion of Business Registration Changes of a Subsidiary (Announcement No. 2025-074) published in Securities Times, Shanghai Securities News and on Cninfo (www.cninfo.com.cn) on December 18, 2025.

3. Investment in Suzhou Xinrui Equity Investment Partnership (Limited Partnership)

In January 2025, the Company invested RMB 60,040,086 in Suzhou Xinrui Equity Investment Partnership (Limited Partnership), of which RMB 60,000,000 was used to invest in King Long Technology (Suzhou) Co., Ltd. (“King Long Technology”). King Long Technology is an independent IC testing house that provides customers with integrated back-end IC services including logic and analog IC testing, memory testing, CMOS image sensor packaging and testing, etc.

4. Investment in DCT Co., Ltd.

In February 2025, the Company invested RMB 24,999,996 to subscribe for 2,976,190 shares in a private placement by DCT Co., Ltd. (“DCT”), at a subscription price of RMB 8.40 per share. DCT is a company listed on the National Equities Exchange and Quotations (NEEQ) and is an enterprise that develops and produces laser micro-machining equipment and rapid PCB prototyping equipment with laser direct processing technology as its core business.

5. Investment in Jiangxi Jiangnan New Material Technology Co., Ltd.

In March 2025, the Company invested RMB 24,999,995 to participate in the IPO strategic placement of Jiangxi Jiangnan New Materia Technology Co., Ltd. (“Jiangnan New Material”), subscribing for a total of 2,371,916 shares. Jiangnan New Material is an enterprise engaged in the development and production of copper balls, copper oxide powder, high-precision copper-based heat sinks and other materials, with copper-based new materials as its core business.

6. Investment in Dingqin Technology (Shenzhen) Co., Ltd.

In April 2025, the Company invested RMB 20,000,000 in Dingqin Technology (Shenzhen) Co., Ltd. (“Dingqin Technology”). Dingqin Technology is an enterprise that provides automation equipment, vertical chemical equipment, and high-end electroplating equipment for the PCB, IC substrate, and semiconductor sectors.

7. Investment in Subscription of Chunhua Jingzhi (Beijing) Equity Investment Partnership (Limited Partnership) Interests

On January 25, 2021, the Company convened the 9th Meeting of the Second Board of Directors, which approved the Proposal on Participation of Wholly-Owned Subsidiary in Investment in a Private Equity Fund. The Board approved that Avary Holding Investment (Shenzhen) Co., Ltd., a wholly-owned subsidiary, as a limited partner, would subscribe for up to 20% of the total fund capital o Chunhua Jingzhi (Beijing) Equity Investment Partnership (Limited Partnership), not exceeding RMB 200 million, and execute the Limited Partnership Agreement of Chunhua Jingzhi (Beijing) Equity Investment Partnership (Limited Partnership).

In September 2021, the Company contributed RMB 5 million to subscribe for the corresponding Chunhua Jingzhi fund interests. In September 2022, the Company made an additional contribution of RMB 3.36 million. In November 2022, the Company made an additional investment of RMB 16.72 million. In May 2023, the Company made an additional investment of RMB 12.6342 million. In March 2024, the Company made an additional investment of RMB 9.6198 million. In June 2024, the Company made an additiona investment of RMB 31.556 million. In February 2025, the Company made an additional investment of RMB 31.556 million. In July 2025, the Company made an additional investment of RMB 47.334 million to subscribe for the corresponding Chunhua Jingzhi fund interests.

8. Participation in Subscription of Investment Fund Interests

The Company convened the 17th Meeting of the Third Board of Directors on June 24, 2025, which approved the Proposal on Participation of Wholly-Owned Subsidiary in Subscription of Investment Fund Interests, pursuant to which the subsidiary Avary Hong Kong was approved to contribute an amount not exceeding USD 30 million to subscribe for interests in the China Renewable Power Infrastructure LPF. For details, please refer to the Announcement of Avary Holding on Participation of Wholly-Owned Subsidiary in Subscription of Investment Fund Interests (Announcement No. 2025-042) published in Securities Times, Shanghai Securities News and on Cninfo (www.cninfo.com.cn) on June 25, 2025. In August 2025, the Company completed the first installment payment of USD 142,556.32.

9. Capital Increase in Wholly-Owned Subsidiary Avary Singapore

The Company convened the 18th Meeting of the Third Board of Directors on August 12, 2025, which approved the Proposal on Capital

Increase in Wholly-Owned Subsidiary Avary Singapore. To meet the working capital requirements of the wholly-owned subsidiary Avary India, the Company agreed to make a capital increase of USD 70 million to Avary Singapore, which in turn would make a capita increase of USD 70 million (equivalent amount in Indian Rupees) to Avary India. For details, please refer to the Announcement of Avary Holding on Capital Increase in Wholly-Owned Subsidiary (Announcement No. 2025-053) published in Securities Times, Shanghai Securities News and on Cninfo (www.cninfo.com.cn) on August 13, 2025.

As of the date of this report, the related capital increase procedures are in progress.

10. Investment in Suzhou Xinguangyi Electronics Co., Ltd.

In December 2025, the Company invested RMB 29,999,998.77 to participate in the IPO strategic placement of Suzhou Xinguangyi Electronics Co., Ltd. (“Xinguangyi”), subscribing for a total of 1,367,989 shares. Xinguangyi, established in 2004, is a high-tech enterprise specializing in the R&D, production, and sale of high-performance specialty functional materials. It is principally engaged in the R&D and manufacturing of specialty electronic materials, production of electronic components, and sale of plastic and rubber products. Its business covers the R&D and production of functional materials such as anti-overflow adhesive specialty films and high resistance specialty films, which are used in consumer electronics, automotive electronics, new energy lithium batteries, photovoltaics and other sectors.

11. Investment in Chengdu Keyi Polymer Technology Co., Ltd.

In November 2025 and January 2026, the Company successively invested RMB 38,368,751 and RMB 19,999,984, totaling RMB 58,368,735, in Chengdu Keyi Polymer Technology Co., Ltd. (“Keyi Polymer”) through the acquisition of existing shares. Keyi Polymer is a high-tech enterprise engaged in the R&D, production, and sale of new high-performance base resins, serving as a key materia supplier for CCL manufacturers in the upstream of the PCB industry.

XVIII. Material Events of Subsidiaries of the Company

☑ Applicable □ Not applicable

1. High and New Technology Enterprise Re-certification of Subsidiary Hongqisheng

Hongqisheng, a wholly-owned subsidiary of the Company, obtained the High and New Technology Enterprise Certificate (Certificate No. GR201913001342) on October 30, 2019, with a validity period of three years. In 2022, Hongqisheng passed the High and New Technology Enterprise re-certification and obtained a certificate (Certificate No. GR202213000771) with a validity period of three years. In October 2025, Hongqisheng again passed the High and New Technology Enterprise re-certification and obtained a certificate (Certificate No. GR202513000044) with a validity period of three years.

Section VI Changes in Shares and Shareholders

I. Changes in Shares

1. Changes in Shares

Unit: Shares

Reasons for Changes in Shares

☑ Applicable □ Not applicable

The Company repurchased and cancelled 509,800 restricted shares under the 2021 Restricted Share Incentive Plan and the 2024 Restricted Share Incentive Plan.

Approval of Changes in Shares

☑ Applicable □ Not applicable

The 15th Meeting of the Third Board of Directors convened on April 8, 2025, the 11th Meeting of the Third Board of Supervisors, and the 2024 Annual General Meeting held on April 29, 2025 approved the Proposal on the Repurchase and Cancellation of Certain Restricted Shares under the 2021 Restricted Share Incentive Plan and the 2024 Restricted Share Incentive Plan. The Company was authorized to repurchase and cancel 509,800 restricted shares held by 253 incentive recipients whose shares had been granted but had not yet become tradable.

Transfer Registration of Changes in Shares

☑ Applicable □ Not applicable

Upon confirmation by the Shenzhen Branch of China Securities Depository and Clearing Corporation Limited, the repurchase and cancellation of certain A-share restricted shares was completed on June 9, 2025. Following the repurchase and cancellation, the tota share capital of the Company was reduced from 2,318,560,816 shares to 2,318,051,016 shares.

Impact of Changes in Shares on Basic Earnings Per Share and Diluted Earnings Per Share, Net Assets Per Share Attributable to Ordinary

Shareholders of the Company, and Other Financial Indicators for the Most Recent Year and Most Recent Period

☑ Applicable □ Not applicable

The repurchase and cancellation of shares resulted in a reduction in total share capital, which will increase basic earnings per share and diluted earnings per share, as well as net assets per share attributable to ordinary shareholders of the Company. However, given tha the repurchased and cancelled shares represented a very small proportion of total shares, the impact was minimal.

Other Information Required to Be Disclosed as Deemed Necessary by the Company or Securities Regulatory Authorities

□ Applicable ☑ Not applicable

2. Changes in Shares Subject to Trading Moratorium

☑ Applicable □ Not applicable

Unit: Shares

Note:1 On June 9, 2025, the Company repurchased and cancelled an aggregate of 509,800 restricted shares under the 2021 Restricted Stock Incentive Plan and the 2024 Restricted Stock Incentive Plan. On July 10, 2025, the restricted shares under the 2021 Restricted Stock Incentive Plan that met the conditions for the fourth lock-up release period were released from lock-up and listed for trading, totaling 1,336,800 shares. On October 16, 2025, the restricted shares under the 2024 Restricted Stock Incentive Plan that met the conditions for the first lock-up release period were released from lock-up and listed for trading, totaling 2,611,412 shares.

2 The 24,000 restricted shares held by Mr. Luo Anzhi, Vice General Manager of the Company, were released from lock-up on July 10, 2025, of which 9,000 shares were reclassified as shares subject to lock-up for senior management.

II. Securities Issuance and Listing

1. Securities Issuance During the Reporting Period (Excluding Preference Shares)

□ Applicable ☑ Not applicable

2. Description of Changes in Total Shares and Shareholder Structure, and Changes in Asset and Liability Structure of the Company

☑ Applicable □ Not applicable

During the reporting period, the Company repurchased and cancelled 509,800 restricted shares under the 2021 Restricted Share Incentive Plan and the 2024 Restricted Share Incentive Plan, resulting in a reduction in total shares.

3. Existing Internal Employee Shares

□ Applicable ☑ Not applicable

III. Shareholders and Actual Controller

1. Number of Shareholders and Shareholdings

Unit: Shares

Shareholdings of Shareholders Holding 5% or More of the Shares, Top 10 Shareholders, and Top 10 Unrestricted Shareholders Participating in Securities Refinancing Business

□ Applicable ☑ Not applicable

Changes in Top 10 Shareholders and Top 10 Unrestricted Shareholders Due to Securities Refinancing Lending/Return as Compared with the Prior Period

□ Applicable ☑ Not applicable

Whether Top 10 Ordinary Shareholders or Top 10 Unrestricted Ordinary Shareholders Entered into Agreed Share Repurchase Transactions During the Reporting Period

□ Yes ☑ No

No top 10 ordinary shareholders or top 10 unrestricted ordinary shareholders entered into agreed share repurchase transactions during the reporting period.

2. Controlling Shareholder of the Company

Nature of controlling shareholder: Foreign-controlled

Type of controlling shareholder: Legal person

Change in Controlling Shareholder During the Reporting Period

□ Applicable ☑ Not applicable

No change in the controlling shareholder occurred during the reporting period.

3. Actual Controller of the Company and Its Concerted Parties

Nature of actual controller: No actual controller

Type of actual controller: Non-existent

Explanation of Why the Company Has No Actual Controller

The indirect controlling shareholder of the Company is Zhen Ding Technology Holding Limited, a company listed in Taiwan. The largest shareholder of Zhen Ding Technology Holding is Foxconn (Far East) Limited, a wholly-owned subsidiary of Hon Hai Group. During the reporting period, Hon Hai Group had no actual controller. Hon Hai Group held only one seat among the seven board members of Zhen Ding Technology Holding. Hon Hai Group has never consolidated Zhen Ding Technology Holding and accounts fo it using the equity method only. Zhen Ding Technology Holding has no actual controller, and therefore the Company also has no actua controller.

Whether Any Shareholder at the Ultimate Control Level Holds 10% or More of the Shares

☑ Yes □ No

☑ Legal person □ Natural person

Shareholdings at the Ultimate Control Level

Change in Actual Controller During the Reporting Period

□ Applicable ☑ Not applicable

No change in the actual controller occurred during the reporting period.

Property Rights and Control Relationship Chart Between the Company and Its Actual Controller

The Actual Controller Controls the Company through Trusts or Other Asset Management Arrangements

□ Applicable ☑ Not applicable

4. Pledged Shares of the Controlling Shareholder or Largest Shareholder and Their Concerted Parties as a Percentage of Their Respective Shareholdings in the Company Reaching 80%

□ Applicable ☑ Not applicable

5. Other Legal Person Shareholders with Shareholdings of 10% or More

□ Applicable ☑ Not applicable

6. Restriction on Shareholding Reductions by the Controlling Shareholder, Actual Controller, Reorganization Parties and Other Commitment Entities

□ Applicable ☑ Not applicable

IV. Specific Implementation of Share Repurchases During the Reporting Period

Progress of Share Repurchases

□ Applicable ☑ Not applicable

Progress on Repurchase Share Disposals through Centralized Bidding

□ Applicable ☑ Not applicable

V. Preference Share-Related Matters

□ Applicable ☑ Not applicable

No preference shares existed during the reporting period.

Section VII Matters Relating to Bonds

□ Applicable ☑ Not applicable

Section VIII Financial Statements

I. AUDITOR’S REPORT

Text of the Auditor’s Report To the Shareholders of Avary Holding (Shenzhen) Co., Ltd.:

I. Auditor’s Opinion

(i) What We Have Audited

We have audited the financial statements of Avary Holding (Shenzhen) Co., Limited (hereinafter referred to as “Avary Holding”), which comprise the consolidated and company balance sheets as at December 31, 2025, and the consolidated and company income statements, consolidated and company cash flow statements, and consolidated and company statements of changes in shareholders equity for the year then ended, and the notes to the financial statements.

(ii) Our Opinion

In our opinion, the accompanying financial statements are prepared, in all material respects, in accordance with the requirements of the Accounting Standards for Business Enterprises, and fairly present the consolidated and company financial position of Avary Holding as at December 31, 2025, and the consolidated and company results of operations and cash flows for the vear then ended

II. Basis for Opinion

We conducted our audit in accordance with China Standards on Auditing. Our responsibilities under those standards are further described in the “Auditor's Responsibilities for the Audit of the Financial Statements" section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

In accordance with the China Standards on Independence — Part 1: Independence Requirements for Audits and Reviews of Financial Statements and the Code of Ethics for Chinese Certified Public Accountants, we are independent of Avary Holding and have fulfilled our other ethical responsibilities. We have complied with the independence requirements applicable to audits of public interest entities throughout our audit.

III. Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. The key audit matters we have identified in our audit are summarized as follows:

(i) Recognition of revenue from sales of goods

(ii) Provision for inventories

IV. Other Information

Management of Avary Holding is responsible for the other information. The other information comprises the information included in h l f ldi f h d d b b d i l d h fi i l d auditor’s report thereon.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, o otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a materia misstatement of this other information, we are required to report that fact. In this regard, we have nothing to report.

V. Responsibilities of Management and Those Charged with Governance for the Financial Statements

Management of Avary Holding is responsible for the preparation of the financial statements that give a true and fair view in accordance with the Accounting Standards for Business Enterprises, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is responsible for assessing Avary Holding’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management eithe intends to liquidate Avary Holding or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing Avary Holding’s financial reporting process.

VI. Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with the Standards on Auditing, we exercise professional judgment and maintain professiona skepticism throughout the audit. We also:

(i) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error; design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

(ii) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances.

(iii) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

(iv) Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on Avary Holding’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause Avary Holding to cease to continue as a going concern.

(v) Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

(vi) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within Avary Holding to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

II. FINANCIAL STATEMENTS

The amounts in the accompanying financial statements and notes are presented in Renminbi Yuan (RMB).

1. Consolidated Balance Sheet

Prepared by: Avary Holding (Shenzhen) Co., Ltd.

December 31, 2025 Unit: RMB

Legal Representative: Charles Shen Chief Financial Officer: XIAO Dewang Head of Accounting Department: XIAO Dewang

2. Standalone Balance Sheet

3. Consolidated Income Statement

Unit: RMB

Legal Representative: Charles Shen Chief Financial Officer: XIAO Dewang Head of Accounting Department: XIAO Dewang

4. Standalone Income Statement

Unit: RMB

5. Consolidated Cash Flow Statement

Unit: RMB

6. Standalone Cash Flow Statement

Unit: RMB

7. Consolidated Statement of Changes in Equity

Current Period

Unit: RMB

Prior Period Unit: RMB

8. Standalone Statement of Changes in Equity

Current Period

Unit: RMB

Prior Period Unit: RMB

III. COMPANY INFORMATION

1. Place of Registration, Organizational Form and Headquarters Address

Avary Holding (Shenzhen) Co., Ltd. was formerly known as Fu Kui Precision Components (Shenzhen) Co., Ltd. (the “Former Company”), which was established with capital contributed by Coppertone Enterprises Limited (“Coppertone”) and approved by the Shenzhen Municipal People’s Government under the approval document Wai Jing Mao Yue Shen Wai Zi Zheng Zi [1999] No. 0120. The Former Company was formally incorporated on April 29, 1999. Pursuant to the resolution of the board of directors of the Forme Company dated April 28, 2017 and the promoters’ agreement, the Former Company resolved to be converted into a joint stock company. The Company was listed on the Shenzhen Stock Exchange on September 18, 2018.

As of December 31, 2025, the Company had issued a total of 2,318,051,016 shares, with registered capital of RMB 2,318.051016 million. Registered address: 27/F, Block A, Avary Times Tower, No. 2038 Haixiu Road, Haibin Community, Xin’an Subdistrict, Bao’an District, Shenzhen. Headquarters address: Block A, Avary Times Tower, No. 2038 Haixiu Road, Haibin Community, Xin’an Subdistrict, Bao’an District, Shenzhen.

The parent company of the Company is Mayco Industrial Limited, and the ultimate controlling party is Zhen Ding Technology Holding Limited.

2. Nature of Business and Principal Operating Activities

The approved business scope of the Company and its subsidiaries (collectively the “Group”) includes research, production, development and sale of automation equipment and components, precision molds and parts, new electronic components, new instrument components, various types of printed circuit boards, and electronic information product boards; self-owned property leasing; warehousing services; wholesale, import and export of electronic information products and boards and related ancillary services (excluding state-traded goods; for goods subject to quota, license or other special regulatory requirements, such shall be applied for in accordance with relevant state regulations); water pollution control; environmental consulting services; real estate development and operation, etc.

3. Scope of Consolidation

Details of the principal subsidiaries included in the scope of consolidation for the year are set out in IX. Interests in Other Entities.

4. Approval of the Financial Statements for Issue

These financial statements were approved for issue by the Board of Directors of the Company on March 30, 2026.

IV. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS

1. Basis of Preparation

These financial statements have been prepared in accordance with the Accounting Standards for Business Enterprises — Basic Standard, specific accounting standards and related regulations (collectively the “Accounting Standards for Business Enterprises”) promulgated by the Ministry of Finance on February 15, 2006 and subsequently, as well as the disclosure requirements set out in the Preparation Convention No. 15 for Information Disclosure by Companies Publicly Issuing Securities — General Provisions on Financial Reporting issued by the China Securities Regulatory Commission

2. Going Concern

These financial statements have been prepared on a going concern basis.

V. SIGNIFICANT ACCOUNTING POLICIES AND ACCOUNTING ESTIMATES

Disclosure of Specific Accounting Policies and Accounting Estimates:

The Group has determined its specific accounting policies and accounting estimates based on the characteristics of its production and operations, which are mainly reflected in the measurement of expected credit losses on receivables, the costing method for inventories, depreciation of fixed assets and investment properties, amortization of intangible assets and right-of-use assets, the criteria fo capitalization of development expenditure, the point in time at which revenue is recognized, etc.

1. Statement of Compliance with the Accounting Standards for Business Enterprises

The financial statements of the Company for the year ended December 31, 2025 comply with the requirements of the Accounting Standards for Business Enterprises and present truly and completely the consolidated and company financial position of the Company as of December 31, 2025, and the consolidated and company results of operations and cash flows for the year then ended and other relevant information.

2. Accounting Period

The accounting year runs from January 1 to December 31 of the Gregorian calendar.

3. Functional Currency

The functional currency of the Company and its subsidiaries within Mainland China is Renminbi (RMB). Each of the Group’s subsidiaries outside Mainland China determines its own functional currency based on the primary economic environment in which i b i i i ll h i d ll ( ) i ll ( ) h i h ( ) d di ( ) etc. These financial statements are presented in RMB.

4. Methods for Determining Materiality Thresholds and Selection Basis

☑ Applicable □ Not applicable

5. Accounting Treatment of Business Combinations Involving Enterprises Under Common Control and Not Under Common Control

(a) Business Combinations Involving Enterprises Under Common Control

The consideration paid and net assets acquired by the Group are measured at carrying amounts. If the acquiree was previously acquired by the ultimate controlling party from a third party, the assets and liabilities of the acquiree (including goodwill arising from the acquisition of the acquiree by the ultimate controlling party) are measured at their carrying amounts in the consolidated financial statements of the ultimate controlling party. The difference between the carrying amount of the net assets acquired and the carrying amount of the consideration paid is adjusted against capital reserve (share premium); where the capital reserve (share premium) is i ffi i b b h diff l d di ib d fi d d i l i l ib bl incurred for the business combination are recognized in profit or loss for the period in which they are incurred. Transaction costs associated with the issuance of equity securities or debt securities for the business combination are included in the initial recognitior amount of the equity securities or debt securities.

(b) Business Combinations Not Involving Enterprises Under Common Control

The cost of combination and the identifiable net assets acquired in a business combination are measured at fair value at the acquisition date. The excess of the cost of combination over the Group’s share of the fair value of the identifiable net assets of the acquiree at the acquisition date is recognized as goodwill. The excess of the Group’s share of the fair value of the identifiable net assets of the acquiree over the cost of combination is recognized in profit or loss. Directly attributable costs incurred for the business combination are recognized in profit or loss for the period in which they are incurred. Transaction costs associated with the issuance of equity securities or debt securities for the business combination are included in the initial recognition amount of the equity securities or debt securities.

6. Criteria for Determining Control and Method of Preparing Consolidated Financial Statements

In preparing the consolidated financial statements, the scope of consolidation includes the Company and all of its subsidiaries.

The Group begins to include a subsidiary in the scope of consolidation from the date on which it obtains actual control over the subsidiary, and ceases to do so from the date on which it loses actual control. For a subsidiary acquired through a business combination involving enterprises under common control, it is included in the scope of consolidation from the date on which it and the Company come under common control of the ultimate controlling party, and its net profit realized prior to the date of the business combination is presented as a separate line item in the consolidated income statement.

In preparing the consolidated financial statements, where the accounting policies or accounting periods of a subsidiary differ from those adopted by the Company, the financial statements of the subsidiary are adjusted as necessary in accordance with the accounting policies and accounting period of the Company. For a subsidiary acquired through a business combination not involving enterprises under common control, the financial statements of the subsidiary are adjusted based on the fair value of the identifiable net assets a the acquisition date.

All significant intra-group balances, transactions and unrealized profits are eliminated on consolidation. The portion of the shareholders equity, net profit or loss for the period, and total comprehensive income of a subsidiary not attributable to the Company is presented separately as non-controlling interests, profit attributable to non-controlling interests, and total comprehensive income attributable to non-controlling interests, respectively, under the headings of shareholders’ equity, net profit, and total comprehensive income in the consolidated financial statements. Where the loss for the period attributable to the minority shareholders of a subsidiary exceeds the minority shareholders’ share of the opening owners’ equity of that subsidiary, the excess is charged against non-controlling interests. Unrealized profits or losses on internal transactions arising from sales of assets by the Company to a subsidiary are fully eliminated against net profit attributable to owners of the parent company. Unrealized profits or losses on internal transactions arising from sales of assets by a subsidiary to the Company are allocated and eliminated between net profit attributable to owners of the parent company and profit attributable to non-controlling interests based on the Company’s allocation ratio in that subsidiary. Unrealized profits o losses on internal transactions arising from sales of assets between subsidiaries are allocated and eliminated between net profit attributable to owners of the parent company and profit attributable to non-controlling interests based on the parent company’s allocation ratio in the selling subsidiary. When the relevant subsidiary is disposed of and control is lost, the above internal transaction profits or losses are realized and the Group adjusts the profit or loss for the current period in respect of the disposal of the subsidiary accordingly.

If the recognition of an identical transaction differs when the Group is used as the accounting entity compared with when the Company or a subsidiary is used, the transaction is adjusted from the Group’s perspective.

Where the Group acquires all or part of the non-controlling interests held by the minority shareholders of a subsidiary, the assets and liabilities of the subsidiary continue to be reflected at the amounts calculated on a continuous basis from the acquisition date or the date of the business combination. The difference between the additional long-term equity investment arising from the acquisition of non-controlling interests and the share of the net assets of the subsidiary calculated on a continuous basis from the acquisition date or the date of the business combination corresponding to the newly acquired shareholding percentage is adjusted against capital reserve (capital premium or share premium). Where the capital reserve is insufficient to absorb the difference, surplus reserve and undistributed profit are reduced successively.

7. Criteria for Determining Cash and Cash Equivalents

Cash and cash equivalents comprise cash on hand, deposits that are readily available for payment, and short-term, highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value.

8. Foreign Currency Transactions and Translation of Foreign Currency Financial Statements

(a) Foreign Currency Transactions

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At the balance sheet date, foreign currency monetary items are translated into the functional currency using the spot exchange rates prevailing at the balance sheet date. Exchange differences arising from foreign currency borrowings specifically borrowed for the acquisition or construction of assets qualifying for capitalization of borrowing costs are capitalized during the capitalization period. All other exchange differences are recognized directly in profit or loss. Foreign currency non-monetary items measured at historical cost are translated at the spot exchange rates at the dates of the transactions. The effect of exchange rate changes on cash is presented separately in the cash flow statement.

(b) Translation of Foreign Currency Financial Statements

The asset and liability items in the balance sheets of foreign operations are translated at the spot exchange rates prevailing at the balance sheet date. Equity items, other than undistributed profit, are translated at the spot exchange rates at the dates on which they arose. Revenue and expense items in the income statements of foreign operations are translated at the average exchange rates for the period. The exchange differences arising from the above translation are recognized in other comprehensive income. The cash flow items of foreign operations are translated at the average exchange rates for the period when the cash flows occurred. The effect of exchange rate changes on cash is presented separately in the cash flow statement.

9. Financial Instruments

Financial instruments are contracts that give rise to a financial asset of one entity and a financial liability or equity instrument of another entity. The Group recognizes a financial asset, financial liability or equity instrument when it becomes a party to the contractua provisions of the financial instrument.

(a) Financial Assets

(i) Classification and Measurement

Based on the business model for managing financial assets and the contractual cash flow characteristics of the financial assets, the Group classifies financial assets into: (1) financial assets measured at amortised cost; (2) financial assets measured at fair value through other comprehensive income; and (3) financial assets measured at fair value through profit or loss

Financial assets are measured at fair value on initial recognition. For financial assets measured at fair value through profit or loss, related transaction costs are recognized directly in profit or loss. For financial assets of other categories, related transaction costs are included in the initial recognition amount. For accounts receivable or notes receivable arising from the sale of products or rendering of services that do not contain or are not considered to contain a significant financing component, the Group measures them initially a the amount of consideration that it expects to be entitled to receive.

Debt Instruments

Debt instruments held by the Group are instruments that meet the definition of a financial liability from the issuer’s perspective, and are measured using the following three methods:

Measured at Amortized Cost:

The Group's business model for managing such financial assets is to hold the assets to collect contractual cash flows, and the contractua cash flow characteristics of such financial assets are consistent with a basic lending arrangement, i.e., the contractual cash flows on specified dates are solely payments of principal and interest on the principal amount outstanding. The Group recognizes interest income on such financial assets using the effective interest method. Such financial assets mainly comprise cash and bank balances, notes receivable, accounts receivable, and other receivables.

Measured at Fair Value Through Other Comprehensive Income:

The Group’s business model for managing such financial assets is both to hold the assets to collect contractual cash flows and to sell the assets, and the contractual cash flow characteristics of such financial assets are consistent with a basic lending arrangement. Such financial assets are measured at fair value with changes recognized in other comprehensive income, except for impairment gains or losses, exchange gains or losses, and interest income calculated using the effective interest method, which are recognized in profit o loss. Such financial assets mainly comprise accounts receivable financing.

Measured at Fair Value Through Profit or Loss:

Debt instruments that are not classified as measured at amortised cost or at fair value through other comprehensive income are measured at fair value through profit or loss. On initial recognition, to eliminate or significantly reduce an accounting mismatch, the Group may designate certain financial assets as measured at fair value through profit or loss. Those with a maturity exceeding one vear from the balance sheet date and expected to be held for more than one year are presented as other non-current financial assets, and the remainde are presented as financial assets held for trading

Equity Instruments

The Group measures investments in equity instruments over which it does not exercise control, joint control or significant influence at fair value through profit or loss, presented as financial assets held for trading. Those expected to be held for more than one year from the balance sheet date are presented as other non-current financial assets.

In addition, the Group irrevocably designates certain investments in non-trading equity instruments on initial recognition as financia assets at fair value through other comprehensive income, presented as investments in other equity instruments. Dividend income from such financial assets is recognized in profit or loss.

(ii) Impairment

The Group recognizes loss allowances for financial assets measured at amortised cost, debt instrument investments measured at fair value through other comprehensive income, contract assets, and lease receivables, based on expected credit losses.

The Group considers reasonable and supportable information, including information about past events, current conditions and forecasts of future economic conditions, that is available without undue cost or effort at the balance sheet date. The expected credit loss is measured as the probability-weighted amount of the present value of the difference between the contractual cash flows receivable and the cash flows expected to be received, using the risk of default as the weight.

For notes receivable, accounts receivable, and accounts receivable financing arising from ordinary course operating activities such as the sale of goods and rendering of services, irrespective of whether a significant financing component exists, the Group measures the loss allowance based on the expected credit losses over the entire lifetime

Other than the above notes receivable, accounts receivable, accounts receivable financing, and lease receivables, at each balance sheet date, the Group measures the expected credit losses separately for financial instruments in different stages. A financial instrument whose credit risk has not increased significantly since initial recognition is classified as Stage 1, and the Group measures the loss allowance based on the 12-month expected credit losses. A financial instrument whose credit risk has increased significantly since initial recognition but has not become credit-impaired is classified as Stage 2, and the Group measures the loss allowance based on the expected credit losses over the entire lifetime. A financial instrument that has become credit-impaired since initial recognition is classified as Stage 3, and the Group measures the loss allowance based on the expected credit losses over the entire lifetime.

For financial instruments with low credit risk at the balance sheet date, the Group assumes that their credit risk has not increased significantly since initial recognition, and classifies them as Stage 1, measuring the loss allowance based on the 12-month expected credit losses.

For financial instruments in Stage 1 and Stage 2, the Group calculates interest income based on their gross carrying amounts before deducting impairment provisions and the effective interest rate. For financial instruments in Stage 3, the Group calculates interest income based on their amortised cost, being the gross carrying amount less the impairment provision recognized, and the effective interest rate.

For various types of financial assets for which expected credit losses are assessed on an individual basis, their credit risk characteristics are significantly different from those of other financial assets within the same category. When information for assessing expected credit losses on an individual financial asset basis cannot be obtained at a reasonable cost, the Group groups trade receivables into several portfolios based on credit risk characteristics and calculates expected credit losses on a portfolio basis. The basis for determining the portfolios is as follows:

For accounts receivable and notes receivable arising from ordinary course operating activities such as the sale of goods and rendering of services that are classified into portfolios, the Group calculates expected credit losses with reference to historical credit loss experience, combined with current conditions and forecasts of future economic conditions, by compiling a mapping table of overdue days of accounts receivable against expected credit loss rates over the entire lifetime. For other notes receivable, accounts receivable financing, and other receivables classified into portfolios, the Group calculates expected credit losses with reference to historical credit loss experience, combined with current conditions and forecasts of future economic conditions, by reference to the default risk exposure and the 12-month or entire lifetime expected credit loss rates.

The Group recognizes the provision or reversal of loss allowance in profit or loss. For debt instruments held by the Group and measurec at fair value through other comprehensive income, the Group adjusts other comprehensive income while recognizing impairment loss

or gain in profit or loss.

(iii) Derecognition

A financial asset is derecognized when one of the following conditions is met: (1) the contractual rights to receive the cash flows from the financial asset expire: (2) the financial asset has been transferred and the Group transfers substantially all the risks and rewards of ownership of the financial asset to the transferee; or (3) the financial asset has been transferred and although the Group neither transfers nor retains substantially all the risks and rewards of ownership of the financial asset, it relinquishes control over the financial asset.

When an investment in other equity instruments is derecognized, the difference between its carrying amount and the sum of the consideration received and the cumulative amount of changes in fair value previously recognized in other comprehensive income is recognized in retained earnings. When other financial assets are derecognized, the difference between their carrying amount and the sum of the consideration received and the cumulative amount of changes in fair value previously recognized in other comprehensive income is recognized in profit or loss.

(b) Financial Liabilities

Financial liabilities are classified on initial recognition as financial liabilities measured at amortised cost and financial liabilities measured at fair value through profit or loss.

The Group’s financial liabilities are primarily financial liabilities measured at amortised cost, including accounts payable, other payables, and borrowings. Such financial liabilities are initially measured at fair value less transaction costs and are subsequently measured using the effective interest method. Those with a maturity of one year or less (inclusive) are presented as current liabilities. Those with a maturity of more than one year but maturing within one year (inclusive) from the balance sheet date are presented as non current liabilities due within one year. The remainder are presented as non-current liabilities.

When the present obligation under a financial liability is discharged in whole or in part, the Group derecognizes the financial liability or the discharged part. The difference between the carrying amount of the derecognized part and the consideration paid is recognized in profit or loss.

(c) Determination of Fair Value of Financial Instruments

For financial instruments with an active market, their fair value is determined using quoted prices in the active market. For financial instruments without an active market, their fair value is determined using valuation techniques. In conducting the valuation, the Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data and other information are available to support, selects inputs that are consistent with the characteristics of the assets or liabilities that market participants would consider in a transaction for the relevant assets or liabilities, and gives priority to the use of relevant observable inputs wherever possible. Unobservable inputs are used only when relevant observable inputs are not available or it is impracticable to obtain them.

10. Notes Receivable

Refer to 9. Financial Instruments.

11. Accounts Receivable

Refer to 9. Financial Instruments.

12. Accounts Receivable Financing

Refer to 9. Financial Instruments.

13. Other Receivables

Method for determining expected credit losses on other receivables and the accounting treatment thereof:

Refer to 9. Financial Instruments.

14. Inventories

(a) Classification

Inventories include raw materials, work in progress, finished goods, and self-manufactured semi-finished products, and are measured at the lower of cost and net realizable value.

(b) Costing Method for Inventories Issued

The cost of inventories upon issuance is calculated using the weighted average method. The cost of finished goods and work in progress includes raw materials, direct labor, and an allocation of manufacturing overheads based on normal production capacity using a systematic method.

(c) Basis for Determining Net Realizable Value of Inventories and Method of Recognizing Provision for Impairment of Inventories

A provision for impairment of inventories is recognized for the amount by which the cost of inventories exceeds their net realizable value. Net realizable value is determined based on the estimated selling price in the ordinary course of business, less the estimatec costs to be incurred to completion, estimated contract fulfillment costs, selling expenses and related taxes and levies. For inventories that are produced and sold in the same region and have similar or identical end uses, the Group recognizes the provision for impairment of inventories on an aggregated basis. The Group recognizes the provision for impairment of inventories based on factors such as aging, storage conditions, historical sales discount situation, and estimated future sales conditions.

(d) The Group’s inventory counting system is the perpetual inventory system.

15. Debt Investments

Refer to 9. Financial Instruments.

16. Long-Term Equity Investments

Long-term equity investments comprise: the Company’s long-term equity investments in subsidiaries; and the Group’s long-term equity investments in associates.

Subsidiaries are investees over which the Company is able to exercise control. Associates are investees over which the Group is able to exercise significant influence over their financial and operating policies.

Investments in subsidiaries are measured using the cost method in the Company’s financial statements and are adjusted to the equity method when preparing the consolidated financial statements. Investments in associates are accounted for using the equity method.

(a) Determination of Investment Cost

For a long-term equity investment arising from a business combination involving enterprises under common control, the investment cost is the share of the owners’ equity of the acquiree in the consolidated financial statements of the ultimate controlling party at the date of the business combination. For a long-term equity investment arising from a business combination not involving enterprises under common control, the investment cost is the cost of combination.

For a long-term equity investment obtained by means other than a business combination: a long-term equity investment obtained by payment of cash is initially measured at the actual purchase price paid; a long-term equity investment obtained through the issuance of equity securities is initially measured at the fair value of the equity securities issued.

(b) Subsequent Measurement and Method of Recognizing Profit or Loss

For a long-term equity investment accounted for using the cost method, it is measured at the initial investment cost. Cash dividends or profits declared by the investee are recognized as investment income in profit or loss.

For a long-term equity investment accounted for using the equity method, if the initial investment cost exceeds the Group’s share of the fair value of the identifiable net assets of the investee at the time of the investment, the initial investment cost is used as the cost of the long-term equity investment. If the initial investment cost is less than the Group’s share of the fair value of the identifiable net assets of the investee at the time of the investment, the difference is recognized in profit or loss and the cost of the long-term equity investment is adjusted upward accordingly

For a long-term equity investment accounted for using the equity method, the Group recognizes its share of the net profit or loss of the investee as investment income or loss for the period. If the investee incurs a net loss, the carrying amount of the long-term equity investment and other long-term interests that in substance form part of the net investment in the investee are reduced to zero, unless the Group has the obligation to assume additional losses and the conditions for recognizing a provision are met, in which case the Group continues to recognize the estimated amount of losses to be assumed. Other changes in the owners’ equity of the investee other than net profit or loss, other comprehensive income, and profit distribution are adjusted against the carrying amount of the long-term equity investment and recognized in capital reserve. Profits or cash dividends declared by the investee reduce the carrying amount of the long-term equity investment by the Group’s share.

li d fi l i l i b h d i li i d h f h shareholding percentage in the investee, and the investment income or loss is recognized on this basis. In preparing the consolidated financial statements, for upstream transactions involving the Group selling assets to or contributing assets to an investee, the unrealized profit or loss attributable to the Group is eliminated on the basis of the elimination in the Company’s financial statements by eliminating the corresponding portion of unrealized revenue and cost or asset disposal gain or loss, and adjusting the investment income accordingly. For downstream transactions involving an investee selling assets to or contributing assets to the Group, the unrealized profit or loss attributable to the Group is eliminated on the basis of the elimination in the Company’s financial statements by eliminating the corresponding portion of unrealized profit or loss included in the carrying amount of the relevant assets, and adjusting the carrying amount of the long-term equity investment accordingly. In respect of internal transaction losses between the Group and an investee, the corresponding unrealized loss to the extent of an asset impairment loss is not eliminated.

(c) Basis for Determining Whether the Group Exercises Control or Significant Influence over an Investee

Control exists when the Group has power over the investee, is exposed to, or has rights to, variable returns from its involvement with the investee, and has the ability to affect those returns through its power over the investee.

Significant influence exists when the Group has the power to participate in the financial and operating policy decisions of the investee, but does not have control or joint control over the formulation of those policies.

(d) Impairment of Long-Term Equity Investments

The carrying amounts of long-term equity investments in subsidiaries and associates are reduced to their recoverable amounts when the recoverable amounts are lower than their carrying amounts.

17. Investment Properties

Measurement model for investment properties

Cost method

Depreciation or amortization method

Investment properties include buildings held for the purpose of earning rental income and are initially measured at cost. Subsequent expenditure relating to investment properties is included in the cost of the investment properties when it is probable that the economic benefits associated with the expenditure will flow to the Group and the cost can be measured reliably; otherwise, it is recognized in profit or loss in the period in which it is incurred.

The Group adopts the cost model for the subsequent measurement of all investment properties, with depreciation provided on buildings based on their estimated useful lives and estimated net residual value rates. The estimated useful lives, estimated net residual value rates and annual depreciation rates of investment properties are set out below:

When the use of an investment property changes to owner-occupied, the investment property is transferred to fixed assets or intangible assets from the date of the change. When the use of an owner-occupied property changes to earning rental income or capital appreciation, the fixed asset or intangible asset is transferred to investment properties from the date of the change. Upon transfer, the carrying amount before the transfer is used as the carrying amount after the transfer.

The estimated useful lives, estimated net residual values and depreciation methods of investment properties are reviewed at the end of each year and adjusted as appropriate.

An investment property is derecognized when it is disposed of or permanently withdrawn from use and no future economic benefits are expected from its disposal. The difference between the disposal proceeds, net of the carrying amount and related taxes and levies, of the sale, transfer, retirement or destruction of an investment property is recognized in profit or loss.

When the recoverable amount of an investment property is lower than its carrying amount, the carrying amount is reduced to the

recoverable amount.

18. Fixed Assets

(1) Recognition Criteria

Fixed assets comprise land, buildings and structures, machinery and equipment, transportation vehicles, computer and electronic equipment, and other equipment.

Fixed assets are recognised when it is probable that the economic benefits associated with the assets will flow to the Group and the cost of the assets can be measured reliably. Fixed assets acquired or constructed are initially measured at cost at the time of acquisition or construction

Subsequent expenditures relating to fixed assets are included in the cost of fixed assets when it is probable that the associated economic benefits will flow to the Group and the cost can be measured reliably. The carrving amount of the replaced part is derecognised. Al other subsequent expenditures are recognised in profit or loss for the period in which they are incurred.

(2) Depreciation Method

Fixed assets are depreciated using the straight-line method over their estimated useful lives, after taking into account their estimated residual values. For fixed assets for which impairment provisions have been recognised, depreciation is determined based on the carrying amount net of impairment provision and the remaining useful life

The estimated useful lives, estimated residual values and depreciation methods of fixed assets are reviewed and adjusted as appropriate at the end of each financial year.

When the recoverable amount of a fixed asset is less than its carrying amount, the carrying amount is written down to the recoverable amount.

A fixed asset is derecognised when it is disposed of or when no future economic benefits are expected from its use or disposal. The amount of disposal proceeds from the sale, transfer, scrapping or damage of a fixed asset, net of its carrying amount and related taxes and expenses, is recognised in profit or loss for the period.

19. Construction in Progress

Construction in progress is measured at actual cost incurred. Actual cost comprises construction costs, installation costs, borrowing costs eligible for capitalisation and other necessary expenditures incurred to bring the construction in progress to its intended condition for use. Construction in progress is transferred to fixed assets when it is ready for its intended use, and depreciation commences from the following month. When the recoverable amount of construction in progress is less than its carrying amount, the carrying amount is written down to the recoverable amount.

20. Borrowing Costs

Borrowing costs incurred by the Group that are directly attributable to the acquisition or construction of an asset that necessarily takes a substantial period of time to prepare for its intended use are capitalised as part of the cost of the asset when expenditures for the asset and borrowing costs are incurred and the activities necessary to prepare the asset for its intended use have commenced. Capitalisation of borrowing costs ceases when the asset is ready for its intended use, and borrowing costs incurred thereafter are recognised in profi or loss. If the construction activities of the asset are interrupted abnormally and the interruption period exceeds three consecutive months, capitalisation of borrowing costs is suspended until the construction activities recommence.

For specific-purpose borrowings obtained for the acquisition or construction of assets eligible for capitalisation, the amount of borrowing costs to be capitalised is determined as the actual interest expense incurred on such borrowings during the period, less any interest income earned from depositing the unutilised borrowings in banks or any investment income earned from temporary investment of such borrowings.

For general borrowings used for the acquisition or construction of assets eligible for capitalisation, the amount of borrowing costs to be capitalised is determined by multiplying the weighted average of the capital expenditures in excess of specific-purpose borrowings by the weighted average effective interest rate of the general borrowings utilised. The effective interest rate is the rate that discounts the estimated future cash flows of the borrowings over their expected life or a shorter applicable period to the initially recognised amount of the borrowings.

21. Intangible Assets

(1) Useful Lives, Basis of Determination, Estimates, Amortisation Methods and Review Procedures

Intangible assets comprise land use rights, software and customer relationships, which are measured at cost.

(a) Land Use Rights

Land use rights are amortised on a straight-line basis over the period of use.

(b) Software

Software is amortised on a straight-line basis over the estimated useful life of 1-5 years.

(c) Customer Relationships

Customer relationships are intangible assets recognised in the course of business combinations, representing customer resources acquired by the Group as a result of assuming the business of the acquiree. Customer relationships are initially recognised at fair value at the acquisition date and subsequently amortised on a straight-line basis over the estimated beneficial period.

(d) Periodic Review of Useful Lives and Amortisation Methods

The estimated useful lives and amortisation methods of intangible assets with finite useful lives are reviewed and adjusted as appropriate at the end of each financial year.

(e) Research and Development

The Group’s research and development expenditures primarily comprise materials consumed in conducting research and development activities, employee benefits expense of the R&D department, depreciation and amortisation of assets such as equipment and software used in R&D, and repair and maintenance expenses related to R&D activities.

(2) Scope of R&D Expenditure Aggregation and Related Accounting Treatment

Expenditure incurred in the planned investigation, evaluation and selection phase for the research of PCB production processes is classified as research phase expenditure, which is recognised in profit or loss as incurred. Expenditure incurred in the design and testing phase for the final application of PCB production processes prior to mass production is classified as development phase expenditure, which is capitalised when all of the following conditions are satisfied:

The development of the PCB production process has been fully substantiated by the technical team;

Management has approved the budget for the development of the PCB production process;

The research and analysis from prior market surveys demonstrate that the products manufactured using the PCB production process have market potential;

Sufficient technical and financial resources are available to support the development of the PCB production process and the subsequent mass production; and the expenditures on the development of the PCB production process can be reliably measured.

Development phase expenditures that do not meet the above conditions are recognised in profit or loss as incurred. Developmen expenditures previously recognised as expenses are not subsequently recognised as assets. Capitalised development phase expenditures are presented as development expenditures in the balance sheet and are transferred to intangible assets from the date the project is read for its intended use.

When the recoverable amount of an intangible asset is less than its carrying amount, the carrying amount is written down to the recoverable amount.

22. Impairment of Long-term Assets

Fixed assets, construction in progress, right-of-use assets, intangible assets with finite useful lives, investment properties measured using the cost model, and long-term equity investments in subsidiaries and associates are tested for impairment when there are indications of impairment at the balance sheet date. Intangible assets not yet ready for use are tested for impairment at least annually, irrespective of whether there are indications of impairment. Where the result of an impairment test indicates that the recoverable amount of an asset is less than its carrying amount, an impairment provision is recognised for the difference and charged to asset impairment loss. The recoverable amount is the higher of the asset’s fair value less costs of disposal and the present value of estimated future cash flows of the asset. Impairment provisions are calculated and recognised on an individual asset basis. If it is difficult to estimate the recoverable amount of an individual asset, the recoverable amount of the asset group to which the asset belongs is determined. An asset group is the smallest group of assets that is capable of generating cash inflows independently.

Goodwill presented separately in the financial statements is tested for impairment at least annually, irrespective of whether there are indications of impairment. For impairment testing, the carrying amount of goodwill is allocated to the asset groups or groups of asset groups that are expected to benefit from the synergies of the business combination. If the test result indicates that the recoverable amount of an asset group or group of asset groups to which goodwill has been allocated is less than its carrying amount, the corresponding impairment loss is recognised. The impairment loss is first applied to reduce the carrying amount of goodwill allocated to the asset group or group of asset groups, and then to reduce the carrying amounts of the other assets in the asset group or group of asset groups on a pro rata basis based on the carrying amount of each asset.

Once the above asset impairment loss is recognised, it is not reversed in subsequent periods for any recovery in value.

23. Long-term Prepaid Expenses

Long-term prepaid expenses include improvements to right-of-use assets and other expenses that have been incurred but should be borne over the current and subsequent periods with an amortisation period exceeding one year. They are amortised on a straight-line b i h i d b fi i l i d d d f l di l l d i i

24. Contract Liabilities

The Company’s obligation to transfer goods or provide services to customers for which consideration has been received or is receivable from customers is presented as contract liabilities.

25. Employee Benefits

(1) Accounting Treatment of Short-term Employee Benefits

Short-term employee benefits include wages, bonuses, allowances and subsidies, employee welfare expenses, medical insurance premiums, work-related injury insurance premiums, maternity insurance premiums, housing provident fund contributions, trade union and education funds, and short-term paid absences. The Group recognises the actual short-term employee benefits incurred as a liability in the accounting period in which the employees render services, and charges them to profit or loss or the cost of related assets. Non monetary benefits are measured at fair value.

(2) Accounting Treatment of Post-employment Benefits

The Group classifies post-employment benefit plans into defined contribution plans and defined benefit plans. Defined contribution plans are post-employment benefit plans under which the Group pays fixed contributions to an independent fund and has no further payment obligations. Defined benefit plans are post-employment benefit plans other than defined contribution plans. During the reporting period, the Group’s post-employment benefits primarily comprise basic pension insurance and unemployment insurance contributions for employees, both of which are classified as defined contribution plans.

The Group’s employees participate in the social basic pension insurance scheme organised and implemented by the local labour and social security authorities. The Group makes monthly contributions to the local social basic pension insurance agencies based on the contribution bases and percentages stipulated by the local authorities. After employees retire, the local labour and social security authorities are responsible for paying social basic pensions to retired employees. The Group recognises the amounts payable calculated in accordance with the above social insurance regulations as a liability in the accounting period in which the employees render services, and charges them to profit or loss or the cost of related assets.

(3) Accounting Treatment of Termination Benefits

Where the Group terminates the employment relationship with an employee before the expiry of the employment contract, or offers compensation to encourage voluntary redundancy, a liability for the compensation arising from termination of the employment relationship is recognised, and the amount is charged to profit or loss for the period, on the earlier of the date when the Group can no longer unilaterally withdraw the termination plan or redundancy offer and the date when the Group recognises the costs or expenses related to a restructuring involving the payment of termination benefits.

Termination benefits expected to be paid within one year from the balance sheet date are presented as employee benefits payable.

26. Share-based Payment

Share-based payment is classified into equity-settled share-based payment and cash-settled share-based payment. Equity-settled share based payment refers to a transaction in which the Group receives services and settles the transaction using shares or other equity instruments as consideration.

Equity-settled share-based payment transactions in exchange for services rendered by emplovees are measured at the fair value of the equity instruments granted to the employees. For equity instruments that vest immediately upon grant, the fair value at the grant date is recognised in profit or loss for the period with a corresponding increase in capital reserve. For equity instruments that vest upon completion of services within the vesting period or upon satisfaction of specified performance conditions, at each balance sheet date during the vesting period, the Group makes its best estimate of the number of equity instruments expected to vest based on the lates available information such as changes in the number of employees expected to meet the vesting conditions and whether the specified performance conditions have been met, and on this basis, recognises the services received during the period in profit or loss at the fai value at the grant date

For share-based payment ultimately not meeting the vesting conditions, the Group does not recognise any cost or expense, unless the vesting conditions are market conditions or non-vesting conditions, in which case vesting is deemed to have occurred as long as al non-market conditions among all vesting conditions are satisfied, irrespective of whether the market conditions or non-vesting conditions are met.

When the Group modifies the terms of a share-based payment arrangement, if the modification increases the fair value of the equity instruments granted, the Group recognises the incremental services received based on the difference between the fair value of the equity instruments before and after the modification at the modification date. If the Group modifies the vesting conditions in a manner beneficial to employees, the Group accounts for the modified vesting conditions. If the Group modifies the vesting conditions in a manner detrimental to employees, the modification is not taken into account in accounting, unless the Group cancels some or all of the equity instruments granted. If the Group cancels the equity instruments granted, the cancellation is treated as an acceleration of vesting, and the amount that would otherwise have been recognised over the remaining vesting period is recognised immediately in profit or loss, with a corresponding recognition in capital reserve.

If the Group is required to repurchase restricted shares that have not vested and become invalid or forfeited at a pre-agreed repurchase price, the Group recognises a liability and treasury shares based on the number of restricted shares and the corresponding repurchase price.

27. Revenue

The accounting policies adopted for revenue recognition and measurement are disclosed by type of business.

The Group recognises revenue at the amount of consideration to which it expects to be entitled when the customer obtains control of the relevant goods or services.

(a) Sale of Goods

The Group manufactures various PCB products and sells them to customers across different regions. The Group’s sales models are primarily categorised into the shipment warehouse model and the factory direct delivery model, and the revenue recognition methods under each model are as follows:

Under the shipment warehouse model, after producing products based on customer orders, the Group delivers the finished goods to the shipment warehouse. The Group typically engages logistics companies to manage the goods in the shipment warehouse. Customers collect goods from the shipment warehouse based on their needs and upon the Group's approval. The Group recognises revenue based on the collection of goods by customers.

Under the factory direct delivery model, in accordance with the sales contracts and order terms, the Group is required to deliver PCB products to the delivery location designated by the customer. Revenue is recognised after the customer accepts the goods and both parties sign the goods delivery confirmation.

The credit period granted by the Group to customers is typically 45-90 days, which is consistent with industry practice, and there is no significant financing component.

(b) Rental Income

The Group leases out its own buildings and structures under operating leases. Rental income from operating leases is recognised on a straight-line basis over the lease term.

28. Government Grants

Government grants are monetary or non-monetary assets obtained by the Group from the government without consideration, including tax refunds, fiscal subsidies and the like.

Government grants are recognised when the Group can satisfy the conditions attached to them and the grants can be received. Government grants in the form of monetary assets are measured at the amount received or receivable. Government grants in the form of non-monetary assets are measured at fair value. Where fair value cannot be reliably obtained, they are measured at nominal amount.

Government grants related to assets are government grants obtained by the Group for the acquisition, construction or other formation of long-term assets. Government grants related to income are government grants other than those related to assets.

Government grants related to assets are either offset against the carrying amount of the related assets, or recognised as deferred income and amortised to profit or loss over the useful lives of the related assets on a reasonable and systematic basis.

Government grants related to income that are intended to compensate the Group for related costs, expenses or losses in future periods are recognised as deferred income and are recognised in profit or loss or offset against related costs in the period in which the related costs, expenses or losses are recognised. Government grants related to income that are intended to compensate the Group for relatec expenses or losses already incurred are recognised directly in profit or loss or offset against related costs.

The Group applies consistent presentation methods to government grants of the same nature.

Government grants related to ordinary activities are included in operating profit. Government grants not related to ordinary activities are recognised in non-operating income and expenses.

For policy-based preferential interest rate loans received by the Group, the actual amount of borrowings received is used as the initial carrying amount of the borrowings, and the related borrowing costs are calculated based on the principal of the borrowings and the policy-based preferential interest rate. Fiscal interest subsidies received directly are offset against the related borrowing costs.

29. Deferred Tax Assets/Deferred Tax Liabilities

Deferred tax assets and deferred tax liabilities are calculated and recognised based on the differences (temporary differences) between the tax bases of assets and liabilities and their carrying amounts. Deferred tax assets are recognised for deductible losses that can be carried forward against future taxable income in accordance with tax laws. No deferred tax liability is recognised for temporary differences arising from the initial recognition of goodwill. No deferred tax assets or deferred tax liabilities are recognised for temporary differences arising from the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither the accounting profit nor taxable income (or deductible losses), where the initially recognised assets and liabilities do not give rise to equal amounts of taxable temporary differences and deductible temporary differences. At the balance sheet date, deferred tax assets and deferred tax liabilities are measured at the tax rates that are expected to apply in the period when the asset is realised or the liability is settled

Deferred tax assets are recognised only to the extent that it is probable that future taxable income will be available against which the deductible temporary differences, deductible losses and tax credits can be utilised.

Deferred tax liabilities are recognised for taxable temporary differences related to investments in subsidiaries and associates, unless the Group is able to control the timing of the reversal of the temporary differences and it is probable that the temporary differences will not reverse in the foreseeable future. Deferred tax assets are recognised for deductible temporary differences related to investments in subsidiaries, associates and joint ventures when it is probable that the temporary differences will reverse in the foreseeable future and that future taxable income will be available against which the deductible temporary differences can be utilised.

Deferred tax assets and deferred tax liabilities are presented on a net basis after offsetting when all of the following conditions are satisfied:

The deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority on the same taxable entity within the Group; and

The taxable entity within the Group has a legally enforceable right to settle current tax assets and current tax liabilities on a net basis.

30. Leases

(1) Accounting Treatment of Leases as a Lessee

The Group recognises a right-of-use asset at the commencement date of the lease and recognises a lease liability at the present value of the lease payments not yet paid. Lease payments include fixed payments and amounts expected to be payable where it is reasonably certain that a purchase option or a termination option will be exercised. Variable lease payments determined as a percentage of sales are not included in lease payments and are recognised in profit or loss as incurred. The Group presents the lease liabilities due within one year (inclusive) from the balance sheet date as non-current liabilities due within one year.

The Group’s right-of-use assets comprise leased buildings and structures, machinery and equipment, and transportation vehicles. Right of-use assets are initially measured at cost, which comprises the initial measurement amount of the lease liability, lease payments made at or before the commencement date, initial direct costs incurred. less any lease incentives received. Where the Group is reasonably certain to obtain ownership of the leased asset at the end of the lease term, depreciation is provided over the remaining useful life of the leased asset. Where it is not reasonably certain to obtain ownership of the leased asset at the end of the lease term, depreciation is provided over the shorter of the lease term and the remaining useful life of the leased asset. When the recoverable amount is less than the carrying amount of a right-of-use asset, the Group writes down its carrying amount to the recoverable amount.

For short-term leases with a lease term not exceeding 12 months and leases of low-value assets when the assets are new, the Group elects not to recognise right-of-use assets and lease liabilities, and recognises the related rental expenses in profit or loss or the cost of related assets on a straight-line basis over each period within the lease term

Where a lease modification occurs and all of the following conditions are met, the Group accounts for the lease modification as a separate lease: (1) the lease modification expands the scope of the lease by adding the right to use one or more underlying assets; and (2) the increased consideration is commensurate with the stand-alone price for the expansion in scope, adjusted to reflect the circumstances of the contract.

When a lease modification is not accounted for as a separate lease, the Group redetermines the lease term at the effective date of the lease modification, remeasures the lease liability by discounting the modified lease payments using a revised discount rate. Where the lease modification results in a reduction in the scope of the lease or a shortening of the lease term, the Group correspondingly reduces the carrying amount of the right-of-use asset and recognises the related gain or loss on partial or full termination of the lease in profi or loss. For other lease modifications that result in remeasurement of the lease liability, the Group correspondingly adjusts the carrying amount of the right-of-use asset.

(2) Accounting Treatment of Leases as a Lessor

Leases in which the Group as lessor transfers substantially all the risks and rewards incidental to ownership of the leased asset are

classified as finance leases. All other leases are classified as operating leases.

Operating Leases

When the Group leases out its own buildings and structures, machinery and equipment, and transportation vehicles under operating leases, rental income from operating leases is recognised on a straight-line basis over the lease term. Variable lease payments determined as a percentage of sales are recognised as rental income when they are incurred.

When a lease modification occurs, the Group accounts for it as a new lease from the effective date of the modification, and treats the prepaid or receivable lease payments relating to the lease before the modification as the lease payments of the new lease.

31. Other Significant Accounting Policies and Accounting Estimates

During the reporting period, the Company had no other significant accounting policies and accounting estimates.

32. Changes in Significant Accounting Policies and Accounting Estimates

(1) Changes in Significant Accounting Policies

□Applicable ☑Not applicable

(2) Changes in Significant Accounting Estimates

□Applicable ☑Not applicable

(3) Adjustments to the Relevant Items of the Financial Statements at the Beginning of the Year of First-time Adoption of New Accounting Standards from 2025

□Applicable ☑Not applicable

VI. TAXATION

1. Principal Tax Categories and Tax Rates

Disclosure of Taxpayers Subject to Different CIT Rates

2. Tax Incentives

(a) The Company's subsidiary, Pengding Property Management Services (Shenzhen) Co., Ltd. ("Pengding Property"), is subject to the preferential enterprise income tax rate applicable to small and micro enterprises. Pursuant to the Announcement on Policies Concerning Further Support for the Development of Small and Micro Enterprises and Self-employed Businesses (Announcement 〔2023〕 No. 12 of the Ministry of Finance and the State Taxation Administration), the policy under which small and low-profit enterprises calculate taxable income at a reduced rate of 25% and pay enterprise income tax at a rate of 20% has been extended to 31 December 2027.

(b) Pursuant to the Announcement on Policies Concerning Deepening the Reform of the Value-Added Tax issued by the Ministry of Finance, the State Taxation Administration and the General Administration of Customs (Announcement 〔2019〕 No. 39 of the Ministry of Finance, the State Taxation Administration and the General Administration of Customs), from 1 April 2019, the Group's subsidiaries located in Mainland China are subject to a VAT rate of 13% for VAT taxable sales activities or imports of goods.

(c) In December 2024, the Company successfully renewed its certification as a High and New Technology Enterprise and obtained the corresponding certificate (Certificate No. GR202444206929), jointly issued by the Shenzhen Municipal Innovation Committee, the Shenzhen Municipal Finance Committee, the Shenzhen Municipal Bureau of the State Taxation Administration and the Shenzhen Local Taxation Bureau. The certificate is valid for three years. Pursuant to Article 28 of the Enterprise Income Tax Law of the People's Republic of China, the Company is subject to an enterprise income tax rate of 15% for 2025 (2024: 15%).

(d) In October 2022, the Company's subsidiary Hongqisheng renewed its certification as a High and New Technology Enterprise and obtained the corresponding certificate (Certificate No. GR202213000771), jointly issued by the Department of Science and Technology of Hebei Province, the Department of Finance of Hebei Province and the Hebei Provincial Tax Service of the State Taxation Administration. The certificate is valid for three years. In October 2025, Hongqisheng again passed the re-certification review and obtained an updated High and New Technology Enterprise Certificate (Certificate No. GR202513000044), which is valid for three years. Pursuant to Article 28 of the Enterprise Income Tax Law of the People's Republic of China, Hongqisheng is subject to an enterprise income tax rate of 15% for 2025 (2024: 15%).

(e) In November 2023, the Company's subsidiary Qingding renewed its certification as a High and New Technology Enterprise and obtained the corresponding certificate (Certificate No. GR202332000685), jointly issued by the Department of Science and Technology of Jiangsu Province, the Department of Finance of Jiangsu Province, the Jiangsu Provincial Office of the State Taxation Administration and the Jiangsu Local Taxation Bureau. The certificate is valid for three years. Pursuant to Article 28 of the Enterprise Income Tax Law of the People's Republic of China, Qingding is subject to an enterprise income tax rate of 15% for 2025 (2024: 15%).

(f) In December 2025, the Company's subsidiary Wuxi Huayang Science and Technology Co., Ltd. ("Wuxi Huayang") renewed its certification as a High and New Technology Enterprise and obtained the corresponding certificate (Certificate No. GR202532006160), jointly issued by the Department of Science and Technology of Jiangsu Province, the Department of Finance of Jiangsu Province, the Jiangsu Provincial Office of the State Taxation Administration and the Jiangsu Local Taxation Bureau. The certificate is valid for three years. Pursuant to Article 28 of the Enterprise Income Tax Law of the People's Republic of China, Wuxi Huayang is subject to an enterprise income tax rate of 15% for 2025.

VII. Notes to the Consolidated Financial Statements

1. Cash and Cash Equivalents

Unit: RMB

Other disclosures:

As at 31 December 2025, other monetary funds included customs security deposits of RMB974,568.76 (31 December 2024: RMB1,069,768.75) and securities investment funds deposited of RMB8,664,703.60 (31 December 2024: RMB254,133.96).

2. Notes Receivable

(1) Notes receivable by category

Unit: RMB

(2) Disclosure by the method of provision for bad debts

Unit: RMB

Provision for bad debts on a collective basis:

If the allowance for notes receivable is measured under the general expected credit loss model: ^Applicable □ Not Applicable Unit: RMB

(3) Movements in the allowance for doubtful accounts during the year

Provision for bad debts during the year:

Unit: RMB

Including significant recoveries or reversals of bad debt allowances during the year: □ Applicable ^Not Applicable

3. Accounts Receivable

(1) Aging analysis

Unit: RMB

(2) Disclosure by the method of provision for bad debts

Unit: RMB

Provision for bad debts on a collective basis: Unit: RMB

If the allowance for doubtful accounts receivable is provided under the general expected credit loss model:

^Applicable □ Not Applicable

Unit: RMB

(3) Movements in the allowance for doubtful accounts during the year

Provision for bad debts during the year:

Unit: RMB

(4) Top five accounts receivable and contract assets by debtor at period end

Unit: RMB

4. Accounts Receivable Financing

(1) Accounts receivable financing by category

Unit: RMB

5. Other Receivables

Unit: RMB

(1) Other receivables

1) Other receivables by nature

Unit: RMB

2) Aging analysis

Unit: RMB

3) Disclosure by the method of provision for bad debts

^ Applicable □ Not Applicable

Unit: RMB

Provision for bad debts on a collective basis: Unit: RMB

Significant changes in the carrying amount corresponding to movements in loss allowances during the year □ Applicable ^Not Applicable

4) Movements in the allowance for doubtful accounts during the year

Provision for bad debts during the year:

Unit: RMB