China Fangda Group Co., Ltd.

2026 Interim Report

August 2026

Chapter 1 Important Statement, Table of Contents and Definitions

The members of the Board of Directors and the senior management guarantee that the announcement is free from any false information, misleading statement or material omission and are jointly and severally liable for the information's truthfulness, accuracy and integrity.

Mr. Xiong Jianming, the Company's principal officer; Mr. Lin Kebin, the officer in charge of accounting affairs; and Ms. Wang Huan, head of the accounting department (chief accounting officer), declare that they guarantee the truthfulness, accuracy, and completeness of the financial statements included in this interim report.

All the Directors have attended the meeting of the board meeting at which this report was examined.

This semi-annual report contains forward-looking statements such as future plans, which do not constitute a substantial commitment by the Company to investors. Investors and related parties should maintain sufficient risk awareness and understand the differences between plans, forecasts, and commitments.

The Company has detailed the potential risks the company may face in this report. Please refer to the section X. Risks and Countermeasures Faced by the Company in Chapter 3 Management Discussion and Analysis for more information.

The Company will distribute no cash dividends or bonus shares and has no reserve capitalization plan.

Table of Contents

Chapter 1 Important Statement, Table of Contents and Definitions....2

Chapter II About the Company and Financial Highlights....7

I. Company Profile....7

II. Contacts and liaisons....7

III. Other Information....7

IV. Financial Highlight....8

V. Differences in accounting data under domestic and foreign accounting standards....8

VI. Accidental gain/loss item and amount....9

Chapter III Management Discussion and Analysis....10

I. Major businesses of the Company during the report period....10

II. Core Competitiveness Analysis....19

III. Industry Situation During the Reporting Period....24

III. Core business analysis....31

IV. Non-core business analysis....34

V. Assets and Liabilities....35

VI. Investment....37

VII. Major assets and equity sales....39

VIII. Analysis of major joint stock companies....40

IX. Structural entities controlled by the Company....40

X. Risks facing the Company and measures....40

XI. Formulation and Implementation of the Market Capitalization Management System and Valuation Enhancement Plan....42

XII. Implementation of the "Dual Enhancement of Quality and Returns" Action Plan....42

Chapter IV Corporate Governance, Environment, and Society....44

I. Changes in Directors and Senior Management of the Company....44

II. Profit Distribution and Reserve Capitalization in the Report Period....44

III. Share Incentive Schemes, Staff Shareholding Program or Other Incentive Plans....44

IV. Disclosure of Environmental Information....44

V. Social Responsibility....44

Chapter 5 Significant Events....45

I. Commitments that have been fulfilled and not fulfilled by actual controller, shareholders, related parties, acquirers of the Company....45

II. Non-operating capital use by the controlling shareholder or related parties in the reporting term....45

III. Incompliant external guarantee....45

IV. Engaging and dismissing of CPA....45

V. Statement of the Board on the "non-standard auditors' report" issued by the CPA on the current report period....45

VI. Statement of the Board of Directors on the Non-standard Auditor's Report for H1 2014....45

VII. Bankruptcy and capital reorganizing....45

VIII. Lawsuit....45

IX. Punishment and rectification....46

X. Credibility of the Company, controlling shareholder and actual controller....46

XI. Material related transactions....46

XII. Significant contracts and performance....47

XIII. Record of Research Visits, Communications, and Interviews During the Reporting Period....54

XIV. Description of Other Significant Matters....54

XV. Significant Matters of Subsidiaries....54

Chapter VI Changes in Share Capital and Shareholders....55

I. Changes in shares....55

II. Share placing and listing....57

III. Shareholders and shareholding....57

IV. Changes in shareholding of Directors and Senior Management....60

V. Changes in controlling shareholder or actual controller....60

VI. Preferred Shares....61

Chapter VII Information about the Company's Securities....62

Chapter VIII Financial Statements....63

I. Auditor's Report....63

II. Financial statements....63

III. General Information....76

IV. Basis for the preparation of financial statements....77

V. Significant Account Policies and Estimates....77

VI. Taxation....143

VII. Notes to the consolidated financial statements....145

VIII. R&D expenses....189

IX. Change to Consolidation Scope....189

X. Equity in Other Entities....190

XI. Government Subsidies....192

XII. Risks of Financial Tools....193

XIII. Fair Value....201

XIV. Related Parties and Transactions....202

XV. Commitment and Contingent Events....207

XVI. Post-balance-sheet Events....214

XVII. Other material events....214

XVIII. Notes to Financial Statements of the Parent....216

XIX. Supplementary Materials....222

Reference

1. Financial statements stamped and signed by the legal representative, CFO and accounting manager;

2. Originals of all documents and manuscripts of Public Notices of the Company disclosed in public.

Definitions

Chapter II About the Company and Financial Highlights

I. Company Profile

II. Contacts and liaisons

III. Other Information

1. Liaison

Changes to the Company's registration address, office address, post code, website or email during the report period

□ Applicable  Inapplicable

Company's registration address, office address, post code, website or email have not changed during the report period. See Annual Report 2025 for details.

2. Information disclosure and inquiring

Changes to the information disclosure and inquiring place

□ Applicable  Inapplicable

The names and websites of the securities exchange websites and media where the company discloses its semi-annual report, as well as the location of the company's semi-annual report, remain unchanged during the reporting period. Please refer to the 2025 annual report for specific details

3. Other information

Whether other relevant information has changed during the reporting period

□ Applicable  Inapplicable

IV. Financial Highlight

Whether the Company needs to make retroactive adjustment or restatement of financial data of previous years □ Yes  No

V. Differences in accounting data under domestic and foreign accounting standards

1. Differences in net profits and assets in financial statements disclosed according to the international and Chinese account standards

□ Applicable  Inapplicable

There is no difference in net profits and assets in financial statements disclosed according to the international and Chinese account standards during the report period.

2. Differences in net profits and assets in financial statements disclosed according to the overseas and Chinese account standards

□ Applicable  Inapplicable

There is no difference in net profits and assets in financial statements disclosed according to the international and Chinese account standards during the report period.

VI. Accidental gain/loss item and amount

 Applicable □ Inapplicable

In RMB

Other gain/loss items satisfying the definition of non-recurring gain/loss account:

□ Applicable  Inapplicable

The Company has no other gain/loss items satisfying the definition of non-recurring gain/loss account

Circumstance that should be defined as recurrent profit and loss to Explanation Announcement of Information Disclosure No. 1 - Non-recurring gain/loss

□ Applicable  Inapplicable

The Company has no circumstance that should be defined as recurrent profit and loss to Explanation Announcement of Information Disclosure No. 1 - Non-recurring gain/loss

Chapter III Management Discussion and Analysis

I. Major businesses of the Company during the report period

China Fangda Group Co., Ltd. was founded in Shenzhen in 1991, with businesses spanning intelligent platform screen door systems for rail transit, high-end smart curtain wall systems and materials, new energy, and commercial services. In terms of core business competitiveness, the Company's intelligent platform screen door systems for rail transit and smart curtain wall systems are both industry-leading. The Company has under its umbrella 1 "Manufacturing Single Champion Product," 1 "National Quality Leader Enterprise," 2 "National Intellectual Property Advantage Enterprises," 7 National High-tech Enterprises, 4 "Specialized, Refined, Distinctive, and Innovative" (SRDI) enterprises, and 2 provincial-level Engineering Technology Research Centers.

During the reporting period, in the face of profound industry adjustments, the Company remained committed to innovationdriven development and vigorously promoted the deep integration of next-generation information technologies—such as artificia intelligence (AI) and big data—with its core business. While consolidating its domestic market leadership, the Company expanded its presence in overseas markets and systematically advanced its internationalization strategy, achieving leapfrog growth in orders from two key regional markets: Australia and the Middle East. In addition, through the establishment of a full-process risk management system, the Company closely monitored project settlements, intensified collection efforts, continuously optimized its accounts receivable structure, and strictly enforced project entry criteria, thereby safeguarding high-quality and sustainable development. During the reporting period, the Company recorded operating revenue of RMB 1,551,057,800, down 2.95% year-onyear; net profit attributable to owners of the parent company reached RMB 54,501,100, up 215.22% year-on-year. Total accounts receivable decreased by 6.96% from the beginning of the period. Net cash flow from operating activities amounted to RMB 7,667,200, an increase of RMB 274 million year-on-year, turning positive compared to the same period last year. Newly signed orders totaled RMB 1,653,099,100, up 91.71% year-on-year, of which newly signed overseas orders accounted for 56.03%. Both order volume and structure improved, demonstrating strong growth resilience. As of the end of the reporting period, the Company's order backlog stood at RMB 6,460,882,300, including overseas order backlog of RMB 3,113,749,900, representin 48.19% of the total and a year-on-year increase of 39.83%. The Company's global footprint continues to deepen, with the share of overseas order backlog rising steadily, laying a solid foundation for sustained future performance growth.

(I) Intelligent Platform Screen Door Systems for Rail Transit

1. Three Consecutive Wins: Leading the New Track of High-Speed Railway Platform Screen Doors

The Company has continued to deepen its expertise in the rail transit platform screen door sector, achieving remarkable results in both technological innovation and market expansion. Notably, significant breakthroughs have been made in both th technology and application scenarios of high-speed railway (HSR) platform screen doors. As a global first, the Company's HSR platform screen doors utilize AI multi-modal fusion technology and have obtained CRCC certification. Compatible with multiple train models, the system resolves the challenge of variable door positions caused by mixed-model operations. It enables automatic and precise alignment through AI visual recognition without reliance on the HSR signaling system.

During the reporting period, the Company successively won bids for projects to install additional platform screen doors at Platforms 11 and 12 of Shenzhen North Station and Platforms 1–4 of Dongguan Humen High-Speed Railway Station. Following the Shenzhen Futian High-Speed Railway Station project in 2025, this marks another instance where the Company has provided intelligent full-sliding platform screen door solutions for core HSR hubs.

Shenzhen North Station is a super-large comprehensive railway hub in the Guangdong-Hong Kong-Macao Greater Bay Area, featuring 11 platforms and 20 tracks. It handles over 1,500 train arrivals and departures daily, with passenger throughput reaching 126 million in 2025, ranking among the top three nationwide. As the only stop on the Guangzhou-Shenzhen-Hong Kong High-Speed Railway within Dongguan, Dongguan Humen High-Speed Railway Station handled nearly 20 million passengers in 2025. Both stations are among the busiest HSR hubs in China. The renovation projects involve the demolition of existing facilities and

the construction of new half-height full-sliding platform screen doors, establishing a robust safety barrier for these heavily loaded hubs.

From the full-height platform screen doors at Futian Station to the half-height ones at Shenzhen North and Dongguan Humen stations, Fangda's HSR platform screen door products now offer comprehensive coverage of both full-height and half-height configurations. They represent the first full-sliding platform screen doors in China installed directly against the platform edge at an HSR station. Furthermore, Fangda has become the first supplier to install full-sliding platform screen doors at an HSR station with annual passenger traffic exceeding 100 million.

The successful adoption of Fangda's HSR platform screen door systems at the aforementioned stations signifies the Company's official transition from product validation to large-scale deployment. Marking a true leap from the "metro era" into the "high-speed rail era," the Company has opened a brand-new chapter in the emerging market of HSR platform screen doors.

Advancing Global Presence and Standard Leadership: Rail Transit Platform Screen Door Business Demonstrates Growing International Influence

As a pioneer and leader in intelligent rail transit platform screen doors, the Company has steadfastly pursued its globalization strategy. Its products and services now span multiple countries and regions, including Singapore, Malaysia, Hong Kong (China), Taipei (China), Thailand, India, Greece, Colombia, and the Philippines, earning widespread international recognition for highquality and reliable system solutions. During the reporting period, all sections of India's NCRTC project commenced throughservice operations, with Indian Prime Minister Narendra Modi presiding over the inauguration ceremony. As India's first Regional Rapid Transit System (RRTS), the line adopts a mixed-operation mode integrating high-speed rail and metro services. The platform screen door systems supplied by the Company precisely accommodate complex operating conditions—including nonstop high-speed train pass-through, bidirectional traffic, and multi-model train stops—thereby supporting the development of a seamless, efficient, modern, and sustainable public transport network in India's National Capital Region. This achievement furthe underscores the Company's deepening engagement in Belt and Road Initiative (BRI) projects. Meanwhile, the platform screen door system at Platform 4 of Hong Kong Airport Express Station was commissioned to support capacity expansion at this international aviation hub, serving as critical transport infrastructure for Hong Kong International Airport. From exporting products to exporting technology and brand value, the Company is completing a global transition from equipment export to standard export.

In domestic project delivery, the Company ensured the successful launch of the initial section of Wuhan Metro Line 12, which operates with GoA4 fully automatic operation—the highest automation level. The Company's platform screen door system achieves Safety Integrity Level (SIL) 2 and enables millisecond-level real-time data interaction between trains and doors. Once the entire loop line is operational, it will become the world's second-longest and Asia's longest circular metro line. Concurrently, Phase II (Northern Extension) of Shenzhen Metro Line 13 also entered service; as another GoA4 fully automatic line, its full-line commissioning across 11 stations was completed within just 15 days, passing final acceptance inspection on the first attempt. During the reporting period, the Company received multiple authoritative customer accolades, including the sole "2025 Annual Safety Gold Award" from MTR Corporation (Hong Kong); "2025 Outstanding Supplier" and "2025 Outstanding Contribution Unit for Line Openings" from Shenzhen Metro Group; "2025 Outstanding Partner" from Wuhan Metro Group; and "Advanced Supplier" for Dongguan Rail Transit Line 1. These honors reflect the Company's continuously strengthening brand influence.

In terms of standard leadership, the Company served as lead drafter for both the first national standard in the sector, Urban Rail Transit Platform Screen Door Systems (GB/T 46749-2025, effective May 1, 2026), and the first industry standard, Platform Screen Doors for Urban Rail Transit (CJ/T 236-2022). It also participated in drafting numerous other national, industry, and enterprise standards, promoting standardized and regulated industrial development while providing Chinese technical standards to support BRI projects abroad. The Company's management systems continue to operate effectively, having successfully passed annual audits for IRIS (International Railway Industry Standard) as well as ISO 14001, ISO 45001, and ISO 27001 certifications. Continued validity of these certificates provides robust institutional assurance for the Company's participation in global

competition. From exporting products to exporting standards, the Company is reshaping the global landscape of rail transit equipment with Chinese solutions.

During the reporting period, revenue from the Company's intelligent rail transit platform screen door equipment and systems segment reached RMB 255,530,900. At period-end, order backlog for this segment stood at RMB 2,089,055,100, equivalent to 8.18 times the segment's H1 2026 revenue, laying a solid foundation for sustained high-quality growth.

3. Deep AI Integration Empowers Innovation: Abundant Technological Achievements in Rail Transit Platform Screen Doors

The Company has continued to deepen the integration of artificial intelligence (AI) with its core rail transit platform screen door business, achieving multiple milestone results in production processes, equipment management, intelligent operations and maintenance (O&M), and visual recognition, significantly enhancing its technological capabilities and product competitiveness.

In intelligent manufacturing process innovation, the Company built the industry's first robotic assembly intelligent production line. Centered on the deep integration of robotic clusters and AI algorithms, the line achieves fully automated closed-loop operations—from material loading and assembly to stacking. Through intelligent trajectory planning, dual-robot collaborative high-precision assembly, and AI-based zone interlock monitoring, the line attains millimeter-level operational precision and autonomous collision avoidance. An integrated intelligent stacking compensation system enables precise unified control of unloading, padding, and stacking. With autonomous perception, decision-making, and execution—requiring no human intervention throughout the process—the line has significantly improved production yield and operational safety, marking the transition of core platform screen door component manufacturing into a new intelligent era of "machines replacing humans, data driving operations."

In intelligent O&M system development, the Company's Condition Monitoring intelligent O&M system has been deployed on Singapore's J152 project (Jurong Region Line) and has entered the Factory Acceptance Test (FAT) confirmation phase. Integrating real-time line-wide equipment monitoring, intelligent diagnostics, and predictive maintenance, the system provides owners with a comprehensive smart O&M solution.

In AI visual recognition technology, the train AI visual recognition system—optimized for high-speed rail (HSR) scenarios— has been deployed at Shenzhen Futian High-Speed Railway Station. By precisely identifying train models, stopping positions, and door status, the system achieves accurate positioning and rapid response control. In the absence of an interface between the signaling system and the HSR platform screen doors, it enables fully automatic operation of the doors, providing robust suppor for capacity enhancement on the Guangzhou-Shenzhen-Hong Kong High-Speed Railway. The train AI visual recognition system has also been installed as a full prototype on Singapore's Bukit Panjang Light Rail Transit (LRT). Independent of the signaling system, the system autonomously identifies the entire process of train entry and exit through visual recognition and can replace the signaling system to control platform screen door operations, offering an ideal solution for legacy line retrofits lacking signaling interfaces.

In system platform innovation, the Company has deeply integrated AI with digital twin technology to build a next-generation intelligent platform screen door ecosystem. Leveraging LiDAR point cloud modeling and multi-sensor fusion, the platform achieves millimeter-level precise alignment and coordinated control between platform screen doors and train doors. It is adaptable to trains of different formations, significantly enhancing compatibility for mixed-model operations and improving transport capacity and efficiency. The Company continues to lead the evolution of platform screen doors from conventional electromechanical equipment toward highly intelligent core rail transit systems

From intelligent O&M to AI visual recognition, from digital twin coordination to signal-free autonomous control, AI is comprehensively reshaping the technological boundaries of rail transit platform screen doors. The Company is driving the evolution of platform screen door systems from "reliable execution" to "autonomous perception," and from "passive response" to "proactive prevention," continuing to lead the industry's transformation from traditional electromechanical equipment to highly intelligent core systems—delivering a compelling answer sheet for China's intelligent manufacturing leadership in the global wave of rail transit digitalization.

4. Building a Global Full-Value-Chain Service System to Deepen the "Technology + Service" Dual-Wheel Drive

The Company is accelerating its transformation from an equipment manufacturer of rail transit platform screen door systems into a full-value-chain service provider integrating "equipment manufacturing + comprehensive technical services." It has established a complete industrial closed loop spanning "R&D—manufacturing—installation—maintenance," achieving a comprehensive upgrade from single product export to a dual-output business model of "products + services."

In terms of industrial layout, the Company has aligned closely with domestic and overseas market demand, continuously enhancing its global O&M service network. Domestically, the Wuhan production base has been successfully commissioned further strengthening regional production capacity. Overseas, leveraging Hong Kong's unique geographic advantages, the Company has established a Hong Kong subsidiary and built a Global Platform Screen Door Maintenance Center, integrating maintenance technology, a global spare parts supply chain, and overseas after-sales team resources to create a unified global O&M service hub for the Group. The center's services cover local line maintenance in Hong Kong, after-sales support for Southeast Asian projects, as well as annual maintenance for existing lines and O&M for legacy line retrofits, continuously expanding incremental maintenance business opportunities and further refining the integrated service model of "equipment sales + long-term O&M."

During the reporting period, revenue from the Company's comprehensive technical services for rail transit platform screen doors reached RMB 43,426,400, up 29.80% year-on-year. Newly signed orders for comprehensive technical services increased by 108.08% year-on-year, establishing this business as a new engine for the Company's growth. With a global O&M service network covering over 30 cities and the remote precision diagnostic capabilities of its CBMS intelligent O&M system, the Company is pursuing an innovative path of "turning technology into products, products into services, and services into value," continuously consolidating its leadership in the global rail transit platform screen door sector.

(II) Intelligent Curtain Wall Systems and New Materials

1. Focusing on High-End Premium Projects: Deepening Global Presence

Adhering to a high-end premium strategy, the Company remains firmly anchored in the domestic and overseas high-end curtain wall markets. By cultivating quality clients and key regions while securing major landmark projects, it provides customers with full-process, one-stop comprehensive curtain wall solutions. In overseas markets, the Company pursues a dual-track development strategy of "deepening engagement in mature markets and expanding into emerging markets," continuousl enhancing its project acquisition capabilities and delivery performance.

Australia remains one of the Company's key overseas advantage markets. During the reporting period, the Company successfully won bids for multiple high-quality projects, including the Canberra Theatre, Melbourne CDC Data Centre, Iglu Kensington Student Accommodation in Sydney, and Palmera Residences on the Gold Coast, significantly improving project responsiveness and delivery quality.

In the Middle East, the Company deepened its presence in the core UAE market, achieving breakthroughs in high-end market access. During the reporting period, it secured multiple curtain wall projects, including Enara and One River Point in Dubai. In Saudi Arabia, leveraging strong partnership resources, the Company obtained project bidding qualifications, opening a critical pathway for deeper market penetration.

In Southeast Asia and other high-potential markets, the Company continued to strengthen cooperation with reputable loca enterprises. During the reporting period, it won the bid for Dhaka Tower in Dhaka, Bangladesh. Upon completion, this project wil become a local landmark, effectively enriching the Company's track record of overseas super-high-rise curtain wall projects and laying a solid foundation for scaled expansion across Southeast Asia. Meanwhile, focusing on Indonesia, Vietnam, and other countries, the Company steadily advanced product certification and market compliance efforts. It completed building materials market access certification for Mongolia and accelerated its layout in Hong Kong, Macao, and Taiwan markets, continuously winning and implementing regional engineering projects.

In the domestic market, the Company successively secured bids for high-quality benchmark projects, including Shangha Yachuang Automotive Electronics Headquarters Base, CIQTEK Shanghai Zhangjiang R&D Center, Guangzhou Bee Assistant

Future Technology Building, Guangzhou Quwan Technology Global Headquarters, Beihaojia Chengdu Beichen S1 Project, and Suzhou Inovance New Energy Vehicle Components Production Base. Over 80% of newly signed domestic projects are self-built corporate facilities, featuring clients with strong creditworthiness and favorable payment terms, ensuring an overall high-quality and risk-controllable project portfolio.

During the reporting period, new orders for the Company's smart curtain wall and new materials segment totaled RMB 1596,649,300, up 110.40% year-on-year. Of this total, newly signed overseas orders reached RMB 915,308,500, surging 895.01% year-on-year, marking particularly significant progress in overseas market development. During the reporting period, revenue from the smart curtain wall and new materials segment amounted to RMB 1,199,918,500, up 1.27% year-on-year. At period-end, order backlog stood at RMB 4,371,827,200, equivalent to 3.64 times the segment's H1 revenue. As previously secured high-qualit overseas orders were progressively converted into revenue, the share of overseas revenue in the curtain wall systems and new materials segment rose from 5.64% in FY2025 to 15.46% in the current reporting period. This reflects a continuing optimization of the revenue mix and steady improvements in overall operational quality and profitability.

2. AI Empowers Full-Value-Chain Innovation: Abundant Achievements in Smart Curtain Wall Systems and New Materials

The Company has continued to deepen the integration of artificial intelligence (AI) with its curtain wall and new materials business, embedding intelligent technologies across core areas including green energy efficiency, prefabricated construction, new materials application, and complex curtain wall systems, thereby building end-to-end breakthrough capabilities spanning technology R&D, product iteration, and engineering application.

① AI Accelerates Quality and Efficiency Enhancement Across the Full Value Chain

The Company has established an AI Research and Application Promotion Team to leverage AI technology for enhanced management efficiency. The team focuses on researching and applying AI-assisted tools, methodologies, and business scenarios across the entire value chain and various operational processes, covering diverse applications such as an intelligent collaborative assistant for the full curtain wall bidding process, a BIM-based AI curtain wall cutting optimization system, an AI collaborative management platform for curtain wall engineering quality, and an AI-assisted project risk management tool. Leveraging AI, the Company continues to optimize its nine major information management systems. Through in-depth collaboration with Huawei Cloud, it has comprehensively upgraded its factory MES, enabling seamless information exchange and resource sharing from daily operations to the full lifecycle of curtain wall projects. To support overseas business expansion, the Company conducts collaborative design on platforms including ACC, Aconex, and Simpel, effectively streamlining cross-disciplinary coordination and collaboration for overseas projects.

In engineering practice, the Company deeply integrates full-process BIM application, 3D scanning, and reverse modeling, enhancing the practical application of digital twin technology. In production, the MES system enables data-driven planning and real-time monitoring based on aggregated data, bridging data flow across departments and functional modules. The system automatically performs summary analysis and adjusts correlated data, achieving scientific linkage and real-time follow-up between upstream and downstream schedules. New features added to the MES include quality statistical reports, pre-coating paramete monitoring, and customized quality inspection for orders, enabling process hold control for non-conforming products. The Company independently developed VBA plug-ins to synchronize form data and add early-warning functions, effectively reducing manual operation errors.

For complex and challenging irregular-shaped curtain wall projects, the Company combines 3D scanning equipment with AIassisted technology to implement digital incoming material inspection and full-process visual quality control at construction sites, comprehensively improving refined quality control for irregular curtain walls. Concurrently, the Company is advancing the R&D and application of an AI quality collaborative management platform for curtain wall engineering. Relying on this digital platform, it establishes a full-process closed-loop quality control chain, accumulating engineering quality data and professional expertise to enable digital reuse of experience.

② Accelerated Launch of New Products with Tangible Results in Overseas Customization

The Company continues to strengthen technological breakthroughs and product innovation in key areas including prefabricated construction, green energy efficiency, and high-end curtain wall systems. To address the differentiated needs of Middle Eastern and Australian markets, the Company has developed a range of products including Middle East-standard framed curtain wall systems, Middle East-standard unitized curtain wall systems, mullion-free glass balustrade systems, sand-proo louvers, triple-blade louver systems, and AS/NZS 4284-compliant three-track sliding doors for Australia. Some of these products have already passed performance testing and certification.

In new materials development and application, the Company focuses on R&D of high-value-added artistic aluminum panels—including expanded metal double-curved panels, wave-patterned panels, and ultra-large modular prefabricated panels— and has customized dark bronze-brushed and ceramic-like high-gloss aluminum panels to precisely match regional architectural aesthetics and quality standards through differentiated surface finishes. For the Middle East market specifically, the Company ha developed snap-on perforated kits, profile-based and wooden handrails with steel substructures, stone-look aluminum panels that emulate local stonework, as well as iridescent aluminum panels featuring controlled color variation and excellent coating uniformity. The Company has also completed development of multiple innovative products, including integrated bathroom vanities (integrating stone honeycomb composite and one-piece corner forming technologies), cast aluminum veneer, antique bronze series panels, linear-textured stone-look panels, anodized-look panels, iridescent panels, and glazed tile-finish aluminum panels.

Green and eco-friendly materials such as Building Integrated Photovoltaics (BIPV) are increasingly adopted in smart curtain wall applications. Projects including Shenzhen Qianhai Financial Holdings Tower and Guangzhou Kugou Music Building have been successfully delivered, effectively reducing building energy consumption and carbon emissions. The design of the BIPV power-generating unitized curtain wall system for Australia has been completed, with sample fabrication and fire performance testing now underway. Concurrently, the Company is advancing upgrades to its environmental protection facilities: newly installed enclosed grinding booths enable targeted dust collection during aluminum panel grinding; solvent distillation recovery units now reclaim over 100 liters of spray diluent daily; and a new temperature- and humidity-controlled powder warehouse ensures raw material storage quality—continuously reinforcing the foundation for green manufacturing.

③ Industry-Academia-Research Collaborative Innovation Ecosystem Continuously Strengthened

The Company remains steadfast in advancing deep integration of industry, academia, and research. It has signed a long-term strategic cooperation agreement with the College of Mechanics and Civil Engineering at Jinan University, collaborating on multiple fronts including big data for building curtain walls, intelligentization, complex steel structure systems, and new material performance research. The Company has been approved to establish a "Shenzhen Postdoctoral Innovation Practice Base," further bridging the "university–enterprise–industry" cycle. This provides a powerful engine for attracting and cultivating high-end research talent and driving the curtain wall industry's upgrade toward intelligentization and green development. The Company' independently developed "Vertically Offset Curtain Wall Finishing System" and "Ultra-Large High-Vanadium Cable Curtain Wall Technology" were selected for the "Shenzhen Enterprise Innovation (China) Records." Its "Ultra-High Suspended Curtain Wall Construction Technology," which enables "building curtain walls in mid-air," was named to the Top Ten Innovative Applications List in the curtain wall industry. This technology has been applied to the Qianhai Financial Holdings Tower—the tallest building under construction in Shenzhen Qianhai at 245 meters—demonstrating the Company's top-tier intelligent construction capabilities in extreme working conditions and the installation of ultra-large, irregular-shaped curtain walls. The Company was awarded the title of "Advanced Organization" in academic exchange at the 2026 Shenzhen Keyuan Award for Building Doors, Windows, and Curtain Walls. Multiple curtain wall designers received "Outstanding Paper Awards" for their academic achievements, furthe enhancing the Company's industry influence.

3. Strengthening Cash Collection to Safeguard Operational Security

The Company prioritizes risk control and cash flow security in its operations, continuously strengthening accounts receivable management through systematic and refined collection control mechanisms. At the end of the reporting period, total accounts receivable decreased by 6.96% from the beginning of the period. Net cash flow from operating activities reached RMB 7.6672

million, an increase of RMB 274 million year-on-year, turning positive from negative. This significant improvement in cash flow has further enhanced the Company's operational quality and financial resilience. This turnaround is a phased achievement resulting from the Company's commitment to its high-quality development strategy and intensified efforts in cash collection. With the gradual conversion of overseas high-gross-margin orders, the Company's profitability is expected to continue improving. Coupled with the normalized operation of collection control mechanisms, the Company's self-sustaining cash generation capacity is steadil increasing, and its cash flow position is poised for continued optimization.

On the business origination front, the Company strictly controls project access, focusing on high-quality clients and orders with strong payment assurance to effectively mitigate incremental operational risks. For existing receivables, the Company implements categorized strategies and targeted collection efforts, leveraging multiple measures to intensify recovery. The Company has established a full-process collection control system covering pre-event, in-process, and post-event stages. I coordinates key matters through regular special meetings, dynamically tracks execution, and strengthens response mechanisms at critical junctures to ensure timely issue resolution. Meanwhile, the Company continues to strengthen progress billing management for ongoing projects to ensure timely payments at contractual milestones. For settled projects, it regularly reviews and resolves bottlenecks and difficulties in settlement, accelerates approval processes, and effectively drives the collection of settlement payments. The Company will continue to optimize management processes and improve capital recovery efficiency, providing solid financial support for sustainable operations.

(3) New energy industry

Seizing the opportunities presented by the global energy transition, the Company has positioned new energy as a key strategic segment driving green growth and sustainable development. As one of the earliest enterprises in China engaged in the design, manufacturing, and integration of Building Integrated Photovoltaics (BIPV) systems, the Company has established integrated industrial capabilities spanning R&D, product manufacturing, system integration, and O&M services, forging differentiated competitive advantages in the cross-sector integration of architecture and photovoltaics.

During the reporting period, the Company continued to deepen its focus on the core BIPV sector. It provided a PV power generation system solution for the Qianhai Financial Holdings Tower in Shenzhen, which is projected to generate an average of 105,000 kWh annually and reduce CO₂ emissions by 104.7 tonnes per year, further consolidating the Company's demonstration effect and technological leadership in high-end BIPV applications.

The Company's self-owned rooftop distributed PV stations at Pingxiang (Jiangxi), Jiangling Motors Parking Lot (Nanchang, Jiangxi), Songshan Lake Base (Dongguan), Ganzhou Production Base, and Shanghai Production Base continued to operate stably During the reporting period, these stations generated a cumulative 10.0984 million kWh of electricity and reduced CO₂ emissions by 10,068 tonnes. All PV projects are operating well, continuously contributing stable profits and cash flows. They have become a vital component of the Company's green asset portfolio, demonstrating the sustainable development potential of the new energy business driven by both economic and environmental benefits.

(IV) Commercial Management and Services

The Company's commercial management and property services focus on two core cities, Shenzhen and Nanchang. Driven by the dual engines of "precise positioning + digital empowerment," the Company continuously enhances asset operational efficiency and service quality, unlocking the value of existing assets.

In the Shenzhen market, leveraging the locational advantages and innovation factor agglomeration effects of the Guangdong-Hong Kong-Macao Greater Bay Area, the Company continues to deepen leasing innovation and operational upgrades. At the end of the reporting period, the sell-through rate for the Shenzhen Fangda Town project reached 98.84%, with an occupancy rate of 56.84% for self-held properties; the occupancy rate for Shenzhen Fangda Technology Tower stood at 81.44%. Despite overall pressure and cyclical demand adjustments in the Shenzhen office market, the Company's projects maintained steady operations Located in the core of the Honggutan CBD, Nanchang Fangda Center has benefited from the provincial capital's functional upgrades and rising regional value. The project maintains high market attention and strong rental support. At the end of the reporting period, its sell-through rate reached 47.48%, with an occupancy rate of 89.29% for self-held properties.

The Company continues to advance its "AI + Property Services" digital ecosystem, comprehensively promoting the development of a property services management middle platform and iterating its AI-powered customer service infrastructure to drive the transformation from isolated smart applications to integrated intelligent operations. On the customer service front, the Company upgraded its WeCom-based property manager capabilities, enabling one-click access to fee inquiries, payments, and work order tracking, significantly improving service responsiveness and customer experience. Regarding energy-saving retrofits, the Company organized technical discussions to optimize the central air conditioning control system for the Fangda Town project and refined the AI-based intelligent control implementation plan, laying the technical groundwork for retrofit execution in the second half of the year.

Going forward, the Company will continue to leverage digital tools to empower precise operational decision-making and deepen the integration of commercial operations and property services. Amid regional structural optimization and consumption upgrades, these efforts will drive the steady appreciation of core asset values.

The special planning work for the Company's Henggang Dakang Urban Renewal Project in Shenzhen is currently underway.

1. New land reserve projects

2. Total land reserve

3. Main production development status

4. Main project sales

4. Main project sales City/re gion Item Land locatio n Project form Interes ts percen tage Buildi ng area (m2) Sellabl e area (m2) Cumul ative pre- sale (sales) area (m2) Pre- sale (sales) area in this period (m2) Amou nt of pre- sale (sales) in the current period

5. Main project lease

6. First-level development of land □ Applicable  Inapplicable

7. Financing channel

8. Development strategy and operation plan in next year

The Commercial Management and Services segment will prioritize the sell-through of existing assets and the enhancement of operational capabilities. The Company will accelerate the sell-through of remaining units at the Shenzhen Fangda City project and adopt multiple measures to increase occupancy rates for self-held properties, thereby consolidating its leading position in the regional market. Resources will be concentrated on advancing sales at the Nanchang Fangda Center project to expedite capita recovery and improve overall project profitability.

Operationally, the Company will deepen its digital and intelligent transformation, driving the evolution of property services from traditional management to smart operations. It will actively explore the in-depth application of AI, big data, and other technologies in scenarios such as customer service, energy consumption management, and facility O&M to continuously enhance service efficiency and customer experience. Meanwhile, aligned with urban renewal policy directions and leveraging interna resources, the Company will steadily advance the application and approval processes for the Shenzhen Henggang Dakang Urba Renewal Project, securing high-quality assets for the segment's long-term development 9. Bank mortgage loan guarantee provided for commercial housing purchaser

 Applicable □ Inapplicable

In accordance with business practices, the Company's commercial management and service business provides mortgage loan guarantees to purchasers of commercial housing, with the type of guarantee being a phased guarantee. The term of the periodic guarantee lasts from the effectiveness of guarantee contracts to the completion of mortgage registration and transfer of housing ownership certificates to banks. As of June 30, 2026, the Company's outstanding amount for the above-mentioned phased guarantees was RMB 4.99 million.

6. First-level development of land □Applicable Inapplicable

7. Financing channel Financing source Ending financing balance (in Financing cost range / average financing cost Maturity Structure (RMB10,000) Within 1 year 1-2 years 2-3 years Over 3 years

8. Development strategy and operation plan in next year The Commercial Management and Services segment will prioritize the sell-through of existing assets and the enhancement of operational capabilities. The Company will accelerate the sell-through of remaining units at the Shenzhen Fangda City project and adopt multiple measures to increase occupancy rates for self-held properties, thereby consolidating its leading position in the regional market. Resources will be concentrated on advancing sales at the Nanchang Fangda Center project to expedite capital recovery and improve overall project profitability. Operationally, the Company will deepen its digital and intelligent transformation, driving the evolution of property services from traditional management to smart operations. It will actively explore the in-depth application of AI, big data, and other technologies in scenarios such as customer service, energy consumption management, and facility O&M to continuously enhance service efficiency and customer experience. Meanwhile, aligned with urban renewal policy directions and leveraging internal resources, the Company will steadily advance the application and approval processes for the Shenzhen Henggang Dakang Urban Renewal Project, securing high-quality assets for the segment's long-term development.

9. Bank mortgage loan guarantee provided for commercial housing purchasers Applicable □Inapplicable In accordance with business practices, the Company's commercial management and service business provides mortgage loan guarantees to purchasers of commercial housing, with the type of guarantee being a phased guarantee. The term of the periodic guarantee lasts from the effectiveness of guarantee contracts to the completion of mortgage registration and transfer of housing ownership certificates to banks. As of June 30, 2026, the Company's outstanding amount for the above-mentioned phased guarantees was RMB 4.99 million.

10. Joint Investment by Directors, Senior Management and the Listed Company □ Applicable  Inapplicable

II. Core Competitiveness Analysis

(1) Rail Transit Platform Screen Door Equipment and Systems

1. Technical R&D advantage

The Company has always adhered to independent innovation and took the lead in mastering core technologies in the field of rail transit platform screen doors (PSDs). It has achieved a technological leap from import dependence to complete independence and controllability, establishing an independent intellectual property (IP) system covering the entire industrial chain. After more than 20 years of engineering practice and continuous iteration, the Company's R&D advantages have been increasingly consolidated. It hosts the "Guangdong Provincial Engineering Technology Research Center" recognized by the Department of Science and Technology of Guangdong Province, and has built an experienced international technical team with comprehensive professional expertise. Its achievements have won awards including the "Guangdong Provincial Science and Technology Award" and the "Shenzhen Science and Technology Progress Award." As a technology leader in the industry, the Company served as the lead drafter of China's first national standard, Urban Rail Transit Platform Screen Door Systems (GB/T 46749-2025), and the first industry standard, Urban Rail Transit Platform Screen Doors (CJ/T 236-2022). During the reporting period, the national standard was officially implemented, further strengthening the Company's industry influence and competitive barriers. The Company also participated in drafting the Guangdong provincial standard, Technical Standard for Foreign Object Detection in Risk Zones

Between Urban Rail Transit Platform Doors and Trains, which has been submitted for approval, continuing to build a multi-tiered standards system comprising national, industry, and local standards.

The Company successfully developed the world's first AI fully-sliding PSD system, overcoming compatibility challenges for existing high-speed railway (HSR) platform doors. This achievement represents three world-class breakthroughs and opens a new frontier for HSR platform door development. Successfully applied at Shenzhen Futian High-Speed Railway Station, this technology increased the station's train handling capacity by 50% and reduced average passenger entry time by five minutes during the reporting period, further consolidating the Company's comprehensive leadership in rail transit equipment. Deeply engaged in GoA4 fully automatic operation scenarios, the Company's PSD systems have achieved Safety Integrity Level 2 (SIL2) certification and are deployed on over 20 fully automatic metro lines worldwide, more than 10 of which are the first GoA4 lines in their respective regions, provinces, or cities.

Fangda Zhiyuan has been recognized as a "National IP Advantage Enterprise" and a "Shenzhen Specialized, Refined, Distinctive, and Innovative (SRDI) Enterprise." Its urban rail transit platform safety doors were designated a "Single Champion Product in Manufacturing" by the Ministry of Industry and Information Technology (MIIT), setting multiple "Shenzhen Enterprise Innovation (China) Records." During the reporting period, the Company obtained certification for its IP Compliance Management System, demonstrating that its IP management meets national standard requirements and further solidifying its competitive edge within the industry.

2. Industry chain advantage

As one of the first domestic enterprises to enter the metro PSD industry, the Company has established a full-chain service loop covering R&D and design, equipment manufacturing, engineering services, maintenance, and spare parts supply, with onestop delivery capabilities. This vertically integrated synergy enables resource sharing and efficient coordination across all business segments, allowing the Company to precisely meet diverse market demands for specialized products and services, effectively reduce production and management costs, and continuously enhance profitability and overall competitiveness. During the reporting period, the Company built the industry's first robotic assembly intelligent production line. Centered on the deep integration of robotic clusters and AI algorithms, it achieves fully automated closed-loop operations from material feeding and assembly to palletizing. In addition, the Company completed the customized development and pilot launch of a Manufacturing Execution System (MES), advancing digital and refined production management and further strengthening the intelligent manufacturing foundation of its industrial chain.

As China's urban rail transit network continues to expand, metro platform screen door systems are progressively entering their maintenance and service cycles. The Company has made forward-looking deployments in the intelligent O&M field. Its independently developed CBMS Intelligent O&M System, deployed in the Hong Kong 1254 Project, enables real-time monitoring of equipment operating status, health assessment, and early warning, and can automatically generate solutions based on a fault knowledge base. The Condition Monitoring Intelligent O&M System developed for the Singapore J152 Project has been completed and entered the FAT confirmation stage, integrating functions such as full-line real-time equipment monitoring, intelligent diagnostics, predictive maintenance, knowledge base, and statistical analysis. In terms of business model innovation, the Company has secured the 30-year long-term maintenance project for half-height platform safety doors on the Singapore MRT Jurong Region Line and the 6-year maintenance project for the Hong Kong East Rail Line, marking a successful transformation from an equipment supplier to a full-lifecycle "product + service" provider. Currently, the Company's O&M service team spans over 30 cities worldwide. Its Hong Kong subsidiary has established and put into operation a global PSD maintenance center, integrating maintenance technologies, a global spare parts supply chain, and overseas after-sales team resources to create a unified global PSD O&M service hub for the Group. As service capabilities and customer recognition continue to grow, revenue contributions from technical services will keep increasing, injecting new momentum into the Company's high-quality development.

3. Brand and Market Position Advantages

With over 20 years of deep engagement in the rail transit PSD system sector, the Company has earned widespread acclaim and profound trust from numerous global clients through its products' outstanding safety, reliability, availability, and

maintainability, establishing Fangda as an industry benchmark. Fangda Zhiyuan has been named among the "Top 100 Industry Leaders in Shenzhen" for consecutive years and included in the "Guangdong-Hong Kong-Macao Greater Bay Area Enterprise Innovation List." During the reporting period, the Company received multiple authoritative client recognitions, including the sole "2025 Annual Safety Gold Award" from MTR Corporation, the "2025 Outstanding Supplier" and "2025 Outstanding Contributor to Line Opening" awards from Shenzhen Metro, the "2025 Outstanding Partner" award from Wuhan Metro, and the "Advanced Supplier" recognition for Dongguan Rail Transit Line 1, further elevating its brand influence. In the field of rail transit platform screen door systems, the Company collaborates with international firms including Alstom, Siemens, and LG on global projects.

As a pioneer in exporting China's high-end rail transit equipment, the Company leverages deep technical expertise and exceptional project execution capabilities to continuously expand its global footprint. During the reporting period, Fangda PSD systems ensured the seamless through-operation of all sections of India's NCRTC project, precisely meeting complex operating conditions such as mixed high-speed rail and metro traffic. The project was inaugurated by Indian Prime Minister Narendra Modi. Meanwhile, the PSD system for Platform 4 at Hong Kong International Airport Station on the Airport Express Line was put into service, supporting the expansion of this international aviation hub. To date, Fangda PSD systems have been deployed in over 40 cities across more than 120 rail transit lines worldwide. The Company has secured multiple landmark projects in countries and regions including Singapore, Malaysia, Hong Kong (China), Taipei (China), Thailand, India, Colombia, Greece, the Philippines, and Kazakhstan. Its product R&D, design capabilities, on-time delivery, and consistent quality have gained widespread recognition from overseas clients. Leveraging its strong brand image and market influence, the Company continues to strengthen its core competitiveness and sustainable development capabilities.

4. Advantages of Adapting to Multinational Technical Standards

In its global strategic deployment, leveraging profound technical expertise and extensive overseas project experience, the Company has established a comprehensive standards database covering EN (European Standards), BS (British Standards), NFPA 130 (Standard for Fixed Guideway Transit and Passenger Rail Systems), AAMA (American Architectural Manufacturers Association), Singapore BCA (Building and Construction Authority), and Colombian national technical specifications. This has enabled a closed-loop solution of "standards pre-research – product development – certification acceleration," ensuring precis localization of technical parameters. In international market expansion, the Company has forged strategic partnerships with global EPC giants such as Alstom, Siemens, and LG (South Korea), creating a synergistic "market + technology" model to jointly participate in global rail transit PSD projects. In the Philippines, structural and IP protection tests were completed on half-height door prototypes under extreme typhoon conditions, verifying the solution's robust environmental adaptability. In Vietnam, the Company co-established a rail transit laboratory with Ho Chi Minh City University of Transport, promoting the localization of technical standards through industry-academia-research collaboration. The Company actively benchmarks against and adopts European railway technical standards to enhance the international compatibility of its system design. Furthermore, capitalizing on the technological spillover from the national standard Urban Rail Transit Platform Screen Door System (GB/T 46749-2025), which the Company led in formulating, it provides highly reliable products and full-lifecycle services for overseas projects. This global standards adaptation capability has become a core competitive advantage in international markets, providing a robust technical passport for "Made in China" to go global.

5. Organizational structure advantage

With over 20 years of dedication to the rail transit PSD sector, the Company has established a specialized organizational structure covering the entire lifecycle from "R&D, design, manufacturing, and testing to installation and O&M," ensuring high synergy and operational efficiency across all stages. To precisely address industry characteristics such as long project deliver cycles and high customization requirements, the Company has formed dedicated teams for each key stage. The R&D center can rapidly tackle technical challenges for customized customer needs; the design team possesses extensive experience in executing complex engineering projects; large-scale manufacturing bases and a stable, reliable supply chain ensures high-quality product delivery; and professional testing equipment coupled with comprehensive testing methodologies guarantee reliable product performance. In engineering implementation, the Company holds Class-A Professional Contracting Qualification for Building

Mechanical & Electrical Installation, enabling it to independently undertake installation tasks. In O&M services, it operates a centralized Operations & Maintenance Center and, supported by its global footprint, has established multiple regional maintenance centers near client sites to deliver faster and more responsive localized support.

During the reporting period, the Company continued to optimize and upgrade its organizational structure. The Hong Kong subsidiary officially established and commenced operations of its Global PSD Maintenance Center, integrating maintenance technologies, a global spare parts supply chain, and overseas after-sales resources. This initiative created a unified global PSD O&M service hub for the Group, further enhancing its global service network layout. Meanwhile, the Company completed the customized development and pilot launch of its MES system, advancing manufacturing toward digitalization and refined management, thereby providing robust support for improved industrial chain collaboration efficiency. Leveraging its increasingl sophisticated global service architecture and digital management capabilities, the Company has achieved a strategic leap from "product delivery" to "full-lifecycle services," fully demonstrating the forward-thinking nature and competitiveness of its organizational structure and service system.

(2) Intelligent Curtain Wall Systems and Materials

1. Technological Innovation Advantages

Adhering to innovation-driven development, the Company leverages AI technology as a key enabler to drive the in-depth intelligent transformation of the traditional curtain wall industry, continuously reinforcing its technological leadership in the sector. As of the end of the reporting period, the Company had cumulatively obtained 721 patents and 31 software copyrights, participated in the formulation of 35 national and industry technical specifications and standards, and set 20 new records recognized by "China Enterprise New Records," establishing a comprehensive innovation system encompassing intellectua property protection, standard development, and technology commercialization.

The Company has established a robust industry-academia-research collaborative innovation platform. It was among the first in the industry to set up a postdoctoral workstation and a provincial-level engineering technology research center. In 2025, it was approved as a "Shenzhen Postdoctoral Innovation Practice Base" and signed a long-term strategic cooperation agreement with the College of Mechanics and Civil Engineering at Jinan University. This partnership covers collaboration in areas such as big data for building curtain walls, intelligentization, complex steel structure systems, and new material performance research, fully leveraging the technical strengths of both parties to ensure the Company's sustained R&D leadership in the high-end curtain wall sector. Among its subsidiaries in the smart curtain wall systems and materials business, six are recognized as National High-Tech Enterprises (including three "Specialized, Refined, Distinctive, and Innovative" enterprises), forming a robust platform foundation supporting high-quality development.

Product innovation closely aligns with strategic directions such as green and low-carbon development and prefabricated construction. A series of independently developed new products have been applied in landmark projects across China. Aluminum veneer and aluminum honeycomb composite panel products passed the authoritative assessment by China Testing & Certification Group (CTC) and were awarded the highest level in China's green building material certification—the "Three-Star Green Building Material Product Certification." Green energy-efficient curtain wall systems compliant with international standards have achieved large-scale application in overseas markets including Australia, the Middle East, and Southeast Asia, accelerating the conversion of technological achievements into global market value. This fully demonstrates the Company's leapfrog development capability from technological breakthroughs to industry leadership.

2. Brand Value Advantages

With over 30 years of deep engagement in the curtain wall systems and new materials sector, the Company has always upheld a quality-first philosophy, building a strong brand value and market reputation through its outstanding product capabilities and service system. The Company has successively received more than 200 awards at or above the provincial and ministerial level, including the "National Quality Award," the "Lu Ban Award (National Quality Engineering Award)," the "Zhan Tianyou Civil Engineering Award," and the "China Building Decoration Award." It has delivered over 1,000 landmark quality projects worldwide, establishing itself as a leading brand in the high-end curtain wall sector. The Fangda trademark has been recognized as a "China Well-Known Trademark" and has been honored with titles such as "International Reputation Brand" and "Shenzhen Time-Honored Brand." During the reporting period, the Company received multiple brand honors, including "Outstanding Shenzhen Brand Enterprise," "Top 100 Shenzhen Brands," "Shenzhen Well-Known Brand," and "Greater Bay Area Well-Known Brand," and was named a "Brand Building Benchmark Enterprise." Its brand building achievements continue to receive authoritative recognition, with brand influence and market credibility steadily rising. During the reporting period, the Company was awarded the title of "Advanced Unit" in the 2026 Shenzhen Building Doors, Windows and Curtain Wall Keyuan Award Academic Exchange, and several curtain wall designers won the "Outstanding Paper Award" for their academic achievements, further enhancing industry recognition. The continued consolidation of Fangda's brand value and industry standing provides a strong foundation of market credibility and customer trust for the Company's high-quality development.

3. Industry Experience Advantage

The Company's wholly-owned subsidiary, Fangda Construction Technology, holds the highest level qualifications for curtain wall design and construction enterprises in China—Grade 1 Professional Contracting Qualification for Building Curtain Wal Engineering and Grade A Qualification for Building Curtain Wall Engineering Design. It is one of the leading enterprises in the curtain wall industry in China. With over 30 years of deep engagement in the industry, the Company's smart curtain wall projects now span diverse sectors, including super high-rise buildings, large-scale public facilities, corporate headquarters, commercial complexes, hospitals, and hotels. Characterized by varied project forms and complex structures, these undertakings have enabled the Company to accumulate extensive engineering construction experience and cross-sector project delivery capabilities. During the reporting period, the Company was included in the Top 10 Innovative Applications List of the curtain wall industry for its "Sky-High Curtain Wall Construction" technology for ultra-high suspended curtain walls, fully demonstrating its premier construction capabilities under extreme conditions and in the installation of oversized, irregularly shaped curtain walls. Leveraging its systematic intelligent construction framework, extensive project management expertise, and superior construction quality, the Company continues to earn widespread recognition and acclaim from clients, further consolidating its leading position in the industry.

4. Industrial layout advantages

After years of focused development, the Company's intelligent curtain wall systems and new materials business has established a nationwide strategic layout centered on Shenzhen as its headquarters, supported by four major production bases in Shanghai, Chengdu, Dongguan, and Ganzhou. This network underpins an integrated full-industry-chain service system covering R&D and design, manufacturing, project management, construction and installation, and maintenance services. Among these, Fangda (Ganzhou) Low-Carbon Intelligent Manufacturing Base—a "5G + Smart Factory" integrating 5G, digitalization, and the Internet of Things—has been recognized as a national-level "Green Island Project," continuously leading industry advancement in intelligent manufacturing and green, low-carbon development. Leveraging this well-structured production base network and strong industrial chain synergy, the Company effectively optimizes production costs, enhances operational efficiency, and rapidly responds to evolving market demands—providing a solid foundation for increasing market share and strengthening comprehensive competitiveness, thereby further consolidating its leadership position in the high-end curtain wall sector.

5. Talent

The Company consistently regards talent as the core engine of innovation-driven growth. Through years of accumulation, it has built a senior management team with both global vision and local expertise, alongside a mid-level backbone workforce known for professional competence and strong execution capabilities. In terms of talent recruitment and development, the Company was approved to establish the "Shenzhen Postdoctoral Innovation Practice Base," further strengthening the "university-enterprise industry" talent circulation channel. It signed a long-term strategic cooperation agreement with the College of Mechanics and Civil Engineering at Jinan University, carrying out university-enterprise collaboration in areas such as big data for building curtain walls intelligentization, complex steel structure systems, and new material performance research. Both parties fully leverage their respective technical strengths in building curtain walls and finite element simulation analysis to continuously supply high-caliber R&D talent for the high-end curtain wall sector. In 2026, the Company plans to recruit multiple highly educated graduates fo

targeted reserve training, further solidifying the R&D talent pipeline. During the reporting period, the Company established an AI Research and Application Promotion Team to cultivate cross-disciplinary composite technical talent and advance the deep integration of AI technology with the curtain wall industry. The Company continues to recruit high-end international technical professionals in regions such as Australia and the Middle East, injecting strong momentum into overseas market expansion and technological innovation. The Company has established a comprehensive incentive mechanism and evaluation system for the commercialization of scientific and technological achievements, fully stimulating the innovation vitality of R&D personnel. By continuously optimizing career development pathways, the Company leverages technological innovation to support and drive quality improvement and efficiency enhancement, forging a solid talent foundation for high-quality enterprise development.

(3) New energy industry

The Company's new energy business focuses on solar photovoltaic (PV) power stations and Building-Integrated Photovoltaics (BIPV), spanning both the construction and PV sectors to create a unique cross-industry integration advantage. As one of the earliest domestic enterprises engaged in the design, manufacturing, and integration of BIPV systems, the Company took the lead in deploying solar photovoltaic curtain wall technology over two decades ago, accumulating profound technical expertise and extensive project experience.

The new energy sector is highly synergistic with the Company's core smart curtain wall business. Distributed photovoltaic systems integrate seamlessly with building structures, creating complementary effects across technological pathways, product integration, and customer resources. Drawing on more than twenty years of experience in electromechanical system integration and project management, the Company maintains a core team equipped with comprehensive professional qualifications and exceptional cross-domain integration capabilities, enabling it to deliver end-to-end solutions—from PV curtain wall design and construction to operation and maintenance—for clients. During the reporting period, the Company continued to deepen its engagement in the core BIPV sector, providing a photovoltaic power generation system solution for the Shenzhen Qianha Financial Holdings Tower. The project is expected to generate an average of 105,000 kWh annually, further consolidating the Company's technological leadership in high-end building BIPV applications. The application of green and eco-friendly materials, including BIPV photovoltaic components, accounts for an increasing proportion of smart curtain wall projects. The successfu delivery of projects such as the Shenzhen Qianhai Financial Holdings Tower and the Guangzhou Kugou Music Building has effectively reduced building energy consumption and carbon emissions. For the Australian market, the Company has completed the design of the BIPV power generation unit curtain wall system and is currently advancing sample fabrication and fire performance testing. Leveraging its dual technical accumulation in construction and photovoltaics, along with industrial chain synergies, the Company is accelerating the large-scale application of green energy in building scenarios, continuously strengthening its core competitiveness in the Building Integrated Photovoltaics (BIPV)

(IV) Commercial Management and Services

The Company is deeply engaged in commercial management and property services. Leveraging high-quality assets in core cities such as Shenzhen and Nanchang, it adheres to a dual-engine strategy of "precise positioning + digital empowerment." Through coordinated operations across diverse business formats, the Company has established a business model featuring "simultaneous leasing and sales, with complementary commercial and office spaces," effectively mitigating risks from singlemarket fluctuations and maintaining a solid operational foundation.

The Company is comprehensively advancing the digital upgrade of "AI + Property Services" by integrating service data to enable one-click access to high-frequency services such as fee inquiries and repair requests, driving the transformation of property services from isolated smart solutions to integrated intelligent operations. In commercial operations, through refined support measures and differentiated operating strategies, occupancy rates remain at industry-leading levels, while commercial formats continue to be refreshed and upgraded, further enhancing brand vitality. Empowered by a professional operations team honed over years of experience and advanced digital tools, the Company is well-positioned to continuously enhance brand value and consolidate its dominant position in regional markets.

III. Industry Situation During the Reporting Period

(1) Intelligent Rail Transit Platform Screen Door Equipment and Systems

1. Industry development

China's rail transit industry is undergoing a critical transition from "scale expansion" to "quality enhancement." The combined force of multiple policies—including the Transport Power strategy, integrated urban cluster development, and the "Dual Carbon" goals—is accelerating the industry's shift toward a new stage of high-quality development. In 2026, eight ministries including the Ministry of Transport jointly issued the Implementation Plan for Improving Intercity Commuting Efficiency in Metropolitan Areas (2026–2030). The policy calls for "promoting the integrated connection of eligible trunk railways, intercity railways, metropolitan (suburban) railways, and urban rail transit systems, forming multi-line and multi-point transfer networks with urban rail transit." The integration of different rail transit systems imposes higher requirements on interface compatibility and multi-train-type adaptability for platform screen door systems, creating broader application opportunities for the Company's technological advantages in screen door system integration and standard adaptation. The issuance of the National Standard Plan Technical Requirements for Energy Conservation in Urban Rail Transit Operations provides unified technical specifications for energy conservation and carbon reduction across the industry. These policies mark a comprehensive industry transformation from an emphasis on construction to a balanced focus on both construction and operation, with improved quality and efficiency. Retrofitting existing lines, smart upgrades, and the application of green energy-saving technologies have become key themes, providing clear policy guidance and market opportunities for the Company to deepen its presence in emerging segments such as stock asset renovation, intelligent O&M, and green energy-saving technologies.

According to data from the Ministry of Transport, as of June 2026, 54 cities nationwide had opened 346 urban rail transit lines, with a total operating mileage of 11,848.8 km, an increase of 138.5 km from the end of 2025. During the 15th Five-Year Plan period, some urban rail lines are expected to enter an upgrade and retrofit phase, opening up significant market potential for stock asset renovation and post-operation O&M services.

As countries along the Belt and Road continue to increase investment in urban rail transit infrastructure, Chinese high-end equipment manufacturers face important strategic opportunities. With robust demand for rail transit construction in emerging markets such as Southeast Asia, the Middle East, and South America, China's rail transit equipment is transitioning from a "product export" model to a globalized model featuring "technical standards + branding."

As a leader in the construction and O&M of rail transit platform screen door systems, the Company will continue to be guided by national strategies and relevant industrial policies, align with industry trends and market demands, intensify technologica innovation, deepen its engagement in new growth areas such as stock asset renovation and smart upgrades, actively expand overseas incremental markets, and sustain its global leadership, contributing "Chinese Solutions" to the development of urban rail transit worldwide.

2. Business Status

(1) Main products and purposes

China Fangda Group Co., Ltd. has been deeply engaged in the rail transit platform screen door sector for over two decades. Its core products consist of intelligent platform screen door systems deployed in urban rail transit and high-speed railway stations, complemented by full-lifecycle operation & maintenance services and value-added technical support.

① Urban Rail Transit Platform Screen Door Systems

Platform screen door systems for urban rail transit are installed along the edges of metro and light rail station platforms. They physically separate the track area from the passenger waiting area and are equipped with continuously movable door barriers that correspond to train doors and support multi-level control for opening and closing. The Company offers a comprehensive product portfolio covering three major series: full-height enclosed, full-height non-enclosed, and half-height platform screen doors, capable of meeting the requirements of urban rail transit lines across different transit systems and climatic conditions

In terms of safety, the platform screen door system effectively prevents passengers from accidentally falling onto the tracks and blocks unauthorized access to tunnel areas. In the event of fire or other emergencies, the system can coordinate with environmental monitoring, signaling, and other systems to swiftly switch to smoke extraction and passenger evacuation modes, providing multiple layers of safety protection. In terms of environmental improvement, the system significantly blocks dust, noise, and piston wind pressure from the tunnel from transmitting to the platform waiting area, creating a quiet, comfortable, and temperature-controlled environment for passengers. In terms of smart services, the Company's products innovatively integrate intelligent passenger flow counting functionality, enabling dynamic guidance during peak hours to evenly distribute passengers across lower-density carriages. Meanwhile, the door platform can be equipped with multimedia interactive terminals supporting diverse functions such as information announcements, news feeds, and commercial advertising, serving as a key interactive interface for smart stations.

② High-Speed Railway Platform Safety Door Systems

In 2025, the Company successfully launched the world's first intelligent AI fully-sliding platform screen door system for high-speed railways. Specially developed for the complex operating environment of high-speed rail, this system achieves a key technological breakthrough in the field of platform safety doors. Leveraging AI visual recognition and an intelligent contro system, the system identifies different incoming high-speed train models to achieve millimeter-level positioning accuracy and millisecond-level response control. It precisely aligns with train door positions to enable automatic opening and closing of platform safety doors, effectively resolving the longstanding industry challenge posed by diverse high-speed train models and nonstandardized door positions. The product has been successfully deployed at Shenzhen Futian High-Speed Railway Station, achieving three "firsts in China":

– the first system compatible with all high-speed train models,

– the first installed directly at the edge of a high-speed rail platform, and

– the first to obtain CRCC (China Railway Certification Center) certification—

thereby pioneering an entirely new segment in high-speed rail platform door systems.

During the Reporting Period, the Company's high-speed railway platform screen door business achieved a critical leap from benchmark demonstration projects to large-scale replication. In July 2026, the Company successively won bids for the platform screen door installation projects at Platforms 11 and 12 of Shenzhen North Station and Platforms 1–4 of Humen High-Speed Railway Station, becoming the first domestic manufacturer to achieve full coverage of both full-height and half-height platform screen door systems on high-speed railway platforms. Following the commissioning of Futian High-Speed Railway Station, train handling capacity increased by 50%, average passenger entry time was reduced by 5 minutes, and the station successfully withstood heavy passenger flows during the Spring Festival travel rush and the May Day holiday.

③ Full-Lifecycle Operation & Maintenance Services

Leveraging its independently developed intelligent O&M management platform and global service network, the Company provides full-lifecycle O&M services, including remote fault diagnosis, on-site inspection and maintenance, spare parts supply, and system upgrades. These capabilities enable real-time monitoring and trend prediction of equipment conditions, effectively improving fault response efficiency and ensuring the long-term safe and stable operation of transit lines.

(2) Main business model

The Company's rail transit intelligent screen door equipment industry is operated by its subsidiary, Fangda Zhiyuan, which is an integrated supplier and service provider of rail transit intelligent screen door systems, encompassing research and development, design, manufacturing, installation, and technical services, with a complete industrial chain. A mature and complete management system for research and development, procurement, production, sales and O&M has been established. In R&D, the Compan employs a project-driven innovation mechanism that integrates fundamental research with specific customer requirements. In procurement, a dedicated procurement department manages sourcing activities. In production, operations are managed according to contract terms and customer production instructions. In sales, the Company serves metro operators and electromechanical

general contractors in the global rail transit sector exclusively through direct sales, with no distribution channels involved. In operation & maintenance, the Company has deployed an intelligent platform screen door O&M support system capable of realtime data monitoring and rapid fault diagnosis and resolution.

(3) Market competition pattern in which the Company is located and the Company's market position

As a global leader in rail transit platform screen door systems, China Fangda Group Co., Ltd. continues to lead the market thanks to its deep technical expertise and strong brand influence. The Company's intelligent rail transit platform screen door systems have achieved a coverage rate of over 60% among Chinese cities with operational metro lines, serving more than 120 rail transit lines across over 40 cities worldwide. Its market share has consistently ranked among the industry's top for many consecutive years. Fangda Zhiyuan (the Company's subsidiary) has been repeatedly included in the "Top 100 Industry Leader Enterprises in Shenzhen," underscoring its absolute leadership and innovation-driven impact in this specialized field.

Actively responding to China's "Belt and Road" Initiative, the Company has become a pioneer in exporting high-end rail transit equipment overseas. For over a decade, it has deeply engaged international markets and secured multiple landmark platform screen door system projects in "Belt and Road" countries and regions—including Singapore, Malaysia, Thailand, India, Colombia, Greece, the Philippines, Kazakhstan, Hong Kong SAR, and Taipei. During the Reporting Period, all sections of the India NCRTC project commenced through-service operations, with Indian Prime Minister Modi officiating the inauguration ceremony. Platform 4 at Hong Kong Airport Express Station was officially commissioned. Construction of Hong Kong Project 1254 accelerated, and the project was awarded the MTR "2025 Safety Gold Award" (the sole gold award recipient). With the continuous expansion and deepening of its overseas business, the Company's global footprint is becoming increasingly robust, and its international competitiveness is steadily strengthening—providing sustained momentum for high-quality cooperation under the "Belt and Road" framework.

The Company has established a core technology system with fully independent intellectual property rights. It led the drafting of China's first industry standard, Platform Screen Doors for Urban Rail Transit, and the first national product standard, Platform Screen Door Systems for Urban Rail Transit (GB/T 46749-2025), which officially came into effect on May 1, 2026. Additionally, the Company participated in developing multiple standards, including:

– "Technical Guidelines for Smart Station Construction in Rail Transit,"

– "Technical Specification for Intelligent Foreign Object Detection Systems in the Gap Between Urban Rail Transit Platform Screen Doors and Train Doors," and

– "High-Speed Railway Platform Door Systems,"

demonstrating its profound technical foundation and leadership in standard-setting.

Leveraging its outstanding technical capabilities and product quality, the Company's urban rail transit platform safety doors were recognized by the Ministry of Industry and Information Technology as a "Manufacturing Single Champion Product." During the Reporting Period, the Company was named among the "Top 100 Shenzhen Brands" for four consecutive years and received the advanced honor of "Outstanding Shenzhen Brand Enterprise." Its products were among the first to pass the Shenzhen "Three Identicals" (identical production line, identical standards, identical quality) certification, earning the "Premium Shenzhen Product" designation. In addition, the Company has successively received multiple honors and qualifications, including "National Intellectual Property Advantage Enterprise," "Guangdong Provincial Science and Technology Award," "National Key New Product," "National Torch Program Industrialization Demonstration Project," "Guangdong Provincial Engineering Technology Research Center for Intelligent Rail Transit Platform Screen Doors," "Shenzhen Municipal Science and Technology Progress Award," and "Shenzhen Specialized, Refined, Distinctive, and Innovative Enterprise." It also took the lead in obtaining IRIS management system and RAMS certifications under international railway industry standards. During the Reporting Period, the

Company successfully passed the annual audits for all four management systems—IRIS, ISO 14001, ISO 45001, and ISO 27001— ensuring the effective operation of these systems and the continued validity of their certificates. The Company holds a substantial portfolio of patents and software copyrights in China and abroad, forming a comprehensive core technology cluster and intellectual property system based entirely on independent IP—laying a solid foundation for sustaining its competitive edge in the market.

(2) Intelligent Curtain Wall Systems and Materials

1. Industry development

In the first half of 2026, driven by the in-depth implementation of the "Dual Carbon" strategy and the ongoing guidance of the "Good Housing" policy, China's curtain wall industry is accelerating its comprehensive transformation from scale expansion to high-quality development.

Regarding the policy environment, the State continues to strengthen mandatory constraints on green buildings. As a foundational mandatory standard in the field of building energy efficiency, the General Code for Energy Efficiency and Renewable Energy Application in Buildings (GB 55015-2025) officially came into effect on June 1, 2026. It comprehensively raises energy efficiency performance requirements for building envelopes, further lowers the heat transfer coefficient limits for exterior walls, roofs, doors, and windows, and mandates the design and installation of solar energy systems in new buildings. The Guidelines for the Construction of "Good Housing" (Trial) (Draft for Comments) issued by the Ministry of Housing and Urban-Rural Development specifies that "good housing" in the new era should feature safety, comfort, greenness, and intelligence. As the core system ensuring building safety, energy efficiency, and comfort, the building envelope is subject to higher performance requirements. The 15th Five-Year Plan for Urban Renewal issued by the State Council sets targets to renovate 4,000 urban villages and upgrade 1,500 old neighborhoods and industrial zones during the 15th Five-Year Plan period. Urban renewal is shifting from large-scale incremental expansion to quality improvement and efficiency enhancement of existing stock, injecting new structural growth momentum into the curtain wall industry. The National Energy Administration issued the Action Plan for Energy Conservation and Carbon Reduction in the Energy Sector (2026–2028), which promotes pilot projects for Building Integrated Photovoltaics (BIPV) design and construction, supports energy-saving and carbon-reducing retrofits of existing buildings, and facilitates the transition of buildings from energy consumers to energy producers. The General Offices of the CPC Centra Committee and the State Council issued the Opinions on Advancing Energy Conservation and Carbon Reduction at a Higher Level and with Higher Quality, proposing strict energy efficiency management for new buildings, promoting the scaled development of ultra-low energy consumption buildings, and advancing the orderly construction of BIPV. This comprehensive policy package has unlocked significant incremental market space for high-performance energy-efficient curtain walls and BIPV systems.

In terms of market landscape, the industry as a whole still faces considerable competitive pressure. Overcapacity in the construction sector continues to squeeze profit margins, and resources are increasingly concentrating in leading enterprises with strong R&D capabilities and solid financial strength. Industry competition has escalated from single-product price competition to a contest of comprehensive capabilities across the entire industrial chain—encompassing R&D, design, manufacturing, installation, and O&M. The ability to provide integrated solutions has become a key benchmark for measuring an enterprise's core competitiveness.

On technological innovation, building curtain walls are rapidly evolving from traditional envelope structures toward greener, smarter, and lower-carbon solutions. The penetration rate of green products such as BIPV, smart dimming glass, and ultra-low energy consumption curtain wall systems is steadily increasing, and high-performance energy-efficient curtain walls have become standard for new public buildings. The deep integration of digital technologies has emerged as a new industry trend. Technologies including forward BIM design, IoT sensing, drone inspection, and AI visual detection are increasingly applied throughout the full lifecycle of curtain walls—from design and production to construction and O&M—driving a comprehensive upgrade from traditional manufacturing to intelligent manufacturing.

In overseas markets, seizing infrastructure development opportunities along the Belt and Road and in emerging markets, the Company continues to deepen its global footprint. With accelerating urbanization in Southeast Asia, the Middle East, and other regions, demand for high-end curtain walls continues to grow. The model of "regional manufacturing centers plus localized services" is becoming a vital pathway for the industry's overseas expansion. During the reporting period, the Company pursued dual-track development in both domestic and international markets. In the domestic market, the Company has precisely capitalized on policy opportunities arising from urban renewal and green building initiatives, continuously consolidating its brand influence and market position in the high-end curtain wall sector. In overseas business, the Company has steadily implemented its internationalization strategy, achieving leapfrog breakthroughs in orders from its two core regional markets—Australia and the Middle East—and continuing to deepen its presence in overseas markets.

2. Business Status

(1) Main products and purposes

The Company's intelligent curtain wall systems are widely applied in exterior wall and roof projects for urban publi buildings and high-end residential properties, including premium office buildings, corporate headquarters, urban complexes, hotels, large-scale venues, and government office buildings. The products integrate modern building technology with intelligent systems, incorporating coordinated control of HVAC, daylighting, ventilation, power supply, and other supporting building technologies Through digitalization and artificial intelligence, they enable precise optimization of building energy consumption, enhancing architectural aesthetics while significantly improving energy-saving and carbon-reduction performance. The Company's intelligen curtain wall projects have won top industry awards such as the Luban Award (National Quality Engineering Award) on multiple occasions. Its competitiveness consistently ranks among the forefront of the global industry, and it is widely recognized as a leading brand in the global curtain wall sector, fully demonstrating the high-quality characteristics of new quality productive forces.

Backed by deep technical expertise and a professional service team, the Company actively provides technical services for existing building envelope systems—including inspection and assessment, energy-efficiency retrofits, waterproofing, anticorrosion treatments, and maintenance—covering over 8 million square meters of building area and establishing strong competitive advantages in the industry. During the Reporting Period, with the official implementation of the General Code for Energy Efficiency and Renewable Energy Application in Buildings (GB 55015-2025) and the continued rollout of urban renewal policies, market demand for energy-efficient retrofits of existing buildings accelerated, opening up new growth opportunities for the Company's building maintenance and energy-efficient retrofit business.

New materials represent a key strategic focus for the Company, with products centered on low-carbon, eco-friendly, intelligent, and sustainable features. The Company possesses robust R&D capabilities and advanced manufacturing bases for PVDF-coated aluminum composite panels and aluminum honeycomb panels. Its products have been widely applied in major projects across more than 160 cities globally, consistently delivering high-quality material support for green buildings and urban renewal initiatives. During the Reporting Period, the Company continued to advance technological innovation in new materials and optimize production capacity, further enhancing product performance and market competitiveness, thereby providing robus support for the industry's green and low-carbon transition.

(2) Main business modes, specific risks and changes;

The Company's intelligent curtain wall systems and new materials business primarily follows an integrated "R&D–design– production–construction" operating model, which remained unchanged during the reporting period. Contracts for intelligent curtain wall design and installation are primarily secured through public or invited tenders. The Company delivers end-to-end solutions covering conceptual design, raw material procurement, production, on-site installation, and after-sales service, tailored to specific order requirements. This model is inherently non-standardized and highly customized. Gross margins vary significantly across orders due to multiple factors, including the client's budget allocation, bidding competition intensity, material selection, structural complexity of the building, project timeline, on-site construction management, and cost control capabilities.

Project payment settlements typically follow staged milestones: advance payment, progress payments, acceptance payment upon completion, final settlement payment, and retention (quality assurance) deposit. The timing and proportions of each payment are executed based on project progress and contractual terms. Given the long implementation cycles of curtain wall projects, the business is highly sensitive to shifts in national industrial policies, fluctuations in raw material prices, and changes in labor market conditions. Significant variations in technical requirements across projects preclude simple replication of past experience, placing high demands on the Company's technology integration and project management capabilities.

Cash flow risk remains one of the primary challenges facing the curtain wall industry. Under the typical engineering contracting model, companies must front substantial capital for material procurement and construction, while project repayments often have extended cycles. Against the backdrop of overall pressure on the construction industry, some clients are facing liquidit constraints, resulting in an increase in accounts receivable and uncertainty in collection. Additionally, raw material price volatilit and rising labor costs may adversely affect project profitability. In response to these challenges, during the Reporting Period, the Company continued to optimize its client structure by prioritizing high-quality clients with strong financial strength and good credit, as well as government-backed projects. Meanwhile, the Company strengthened full-lifecycle capital budgeting and collection tracking for projects, enhanced risk identification and response capabilities, and ensured healthy and stable operating cash flow.

(3) Market competition pattern in which the Company is located and the Company's market position

In the first half of 2026, amid ongoing macroeconomic adjustments and profound policy reforms, the architectural curtain wall industry exhibited a competitive landscape characterized by "intensified competition over existing market share and accelerated consolidation among leading players." In the domestic market, affected by the deep adjustment of the real estate sector, slowing growth in new projects, and increasingly fierce competition in the existing market, the industry faced overall revenue pressure and narrowing profit margins, making cash flow management critical to corporate survival. Some SMEs with weaker risk resilience encountered operational difficulties or even exited the market. Industry resources further consolidated toward leading enterprises with robust financial strength and outstanding technical capabilities, driving a continuous rise in market concentration.

In response to structural adjustments in the domestic market, the Company firmly advanced its internationalization strategy, intensifying expansion efforts in overseas markets including the Middle East, Southeast Asia, and Australia. Its increasingly refined global layout has effectively hedged against operational risks arising from domestic market volatility.

During the Reporting Period, leveraging its profound technological accumulation, superior service quality, and continuously growing brand influence, the Company further solidified its position among the industry leaders. Facing a complex and volatile market environment, the Company continued to strengthen its core competitiveness through measures such as optimizing its clien structure, deepening regional penetration, accelerating overseas expansion, and advancing intelligent manufacturing. The Company's intelligent curtain wall products have won top national awards such as the Luban Award on multiple occasions, and i has been consecutively ranked among the "Top 500 Enterprises in Shenzhen" and the "Top 500 Manufacturing Enterprises in Guangdong." It maintains leading brand awareness and market reputation in the global curtain wall sector, fully demonstrating the comprehensive strength and counter-cyclical resilience of an industry leader.

(3) New energy industry

As a key pathway for building energy efficiency and carbon reduction, Building-Integrated Photovoltaics (BIPV) is accelerating its transition from "technology demonstration" to a new phase of "large-scale application". In the first half of 2026, the National Energy Administration issued the Action Plan for Energy Conservation and Carbon Reduction in the Energy Sector (2026–2028), which explicitly calls for pilot promotion of BIPV design and construction, supports energy-efficient and lowcarbon retrofits of existing buildings, and promotes the transformation of buildings from energy consumers to energy producers The General Office of the CPC Central Committee and the General Office of the State Council issued the Opinions on Advancing Energy Conservation and Carbon Reduction at a Higher Level and with Greater Quality, which calls for stringent energy efficiency management of new buildings, promotes the large-scale development of ultra-low energy consumption buildings, and advances the orderly implementation of BIPV construction. Against this policy backdrop, the BIPV market continues to unlock significant potential, emerging as a key direction for the green transformation of the construction industry

BIPV transforms buildings from "energy consumers" into "energy producers" by deeply integrating photovoltaic power generation with building material functions. It enables on-site consumption of clean energy while meeting the performance requirements of the building envelope. With the continued decline in PV module costs, steady improvements in power generation efficiency, and the intensive rollout of supportive policies, the economic viability of BIPV systems has improved significantly. The penetration rate is expected to rise further, injecting sustained growth momentum into the industry. The Company will continue to monitor technological developments and market opportunities in the BIPV sector, actively advancing related business deployment and industrialization exploration.

(IV) Commercial Management and Services

1. Industry development

In the first half of 2026, under the macro-policy tone of "promoting the stable and healthy development of the real estate market," the commercial real estate market continued its trajectory of "structural optimization and value reshaping." Regional divergence intensified further, highlighting the value of premium commercial assets in core cities. As the core engine of the Greater Bay Area, Shenzhen maintains active demand for office buildings and commercial properties, underpinned by its robust industrial base and sustained net population inflows. Technology companies remain the primary source of demand, with emerging sectors such as software development, artificial intelligence, and big data showing outstanding performance. The deepening integration of Shenzhen and Hong Kong provides strong support for cross-border operations and industrial collaboration among enterprises. With the accelerating integration of the Guangdong-Hong Kong-Macao Greater Bay Area and the deepening advancement of urban renewal in Shenzhen, commercial real estate in core areas still holds substantial development potential.

2. Main Business Model, Business Project Formats, Company Market Position and Competitive Advantages, Main Risks and Countermeasures

The Company's commercial development projects primarily adopt a business model combining self-development, partial sales, and partial self-held ownership. Currently, the Company's developed products mainly comprise office spaces, commercial properties, and apartments. Through years of professional operation, the Company has established a lean and efficient management team, comprehensive management processes, and advanced information systems, enabling it to provide high-qualit commercial operation and management services. Its professional capabilities, brand awareness, occupancy rates, and revenue levels have continued to improve.

Leveraging the brand advantages, differentiated positioning, and prime location of its commercial projects, the Company maintains a solid market position in the regional market. However, the Company must still navigate multiple risks going forward, including property price volatility, policy regulation, and market competition. The Company will mitigate operational and management risks and ensure robust, sustainable development through refined management, flexible adjustment of business strategies, precise capitalization on policy opportunities, and continued strengthening of brand building and marketing promotion.

III. Core business analysis

Overview

See I. Major businesses of the Company during the Report Period

Year-on-year changes in major financial data

In RMB

Major changes in profit composition or sources during the report period

□ Applicable  Inapplicable

The profit composition or sources of the Company have remained largely unchanged during the report period.

Turnover composition

In RMB

Industries, Products, or Regions Accounting for More Than 10% of the Company's Operating Revenue or Operating Profit  Applicable □ Inapplicable In RMB

Main business statistics adjusted in the recent one year with the statistics criteria adjusted in the report period □ Applicable  Inapplicable

IV. Non-core business analysis

 Applicable □ Inapplicable

In RMB

V. Assets and Liabilities

1. Major changes in assets composition

In RMB

2. Major foreign assets

□ Applicable  Inapplicable

3. Assets and liabilities measured at fair value

 Applicable □ Inapplicable

In RMB

Details of other changes: Other changes in other non-current financial assets amounting to RMB -722,459.92 represent the impact of the return of corresponding equity value due to capital reduction by investee companies.

Major changes in the assets measurement property of the Company in the report period

□ Yes  No

4. Right restriction of assets at the end of the period

VI. Investment

1. General situation

□ Applicable  Inapplicable

2. Major equity investment in the report period

□ Applicable  Inapplicable

3. Major non-equity investment in the report period

□ Applicable  Inapplicable

4. Financial assets investment

(1) Securities investment

□ Applicable  Inapplicable

The Company made no investment in securities in the report period

1. General situation □Applicable Inapplicable

2. Derivative investment

 Applicable □ Inapplicable

1) Derivative investments for hedging purposes during the reporting period

 Applicable □ Inapplicable

In RMB10,000

2) Derivative investment for the purpose of speculation during the reporting period

□ Applicable  Inapplicable

During the reporting period, there was no derivative investment for the purpose of speculation.

3. Major non-equity investment in the report period □Applicable Inapplicable

4. Financial assets investment (1) Securities investment □Applicable Inapplicable The Company made no investment in securities in the report period

5. Use of raised capital

□ Applicable  Inapplicable

The Company used no raised capital in the report period.

VII. Major assets and equity sales

1. Major assets sales

□ Applicable  Inapplicable

The Company sold no assets in the report period.

2. Major equity sales

□ Applicable  Inapplicable

VIII. Analysis of major joint stock companies

 Applicable □ Inapplicable

Major subsidiaries and joint stock companies affecting more than 10% of the Company's net profit

In RMB

Acquisition and disposal of subsidiaries in the report period □ Applicable  Inapplicable

Major joint-stock companies

During the Reporting Period, Jiangxi Intelligent Manufacturing Company recorded operating revenue of RMB 135,740,128.45, including main business revenue of RMB 129,996,574.78; its operating profit was RMB -9,346,457.22, including main business profit of RMB -9,736,239.94. During the Reporting Period, Zhiyuan Technology Company recorded operating revenue of RMB 255,530,920.39, including main business revenue of RMB 252,491,598.11; its operating profit was RMB 40,178,877.44, including main business profit of RMB 39,684,349.72. During the Reporting Period, Fangda Property Management Company recorded operating revenue of RMB 35,229,999.92, all of which was main business revenue; its operating profit was RMB 12,612,272.13, all of which was main business profit.

IX. Structural entities controlled by the Company

□ Applicable  Inapplicable

X. Risks facing the Company and measures

1. Risks of macro environment and policy changes

The Company's core business is closely correlated with macroeconomic trends and industry policy orientations, making its overall operating performance susceptible to fluctuations in the external macro environment. As the Company continues to expand its overseas business footprint, should domestic and global macroeconomic recovery fall short of expectations or infrastructure investment weaken, compounded by intertwined uncertainties such as sustained geopolitical tensions and frequent regional conflicts, downstream sectors including rail transit equipment and architectural curtain walls may face demand contraction or intensified competition for existing market share. This could adversely affect the Company's order acquisition, profitability, and operational stability.

To address these risks, the Company will continuously monitor domestic and global economic trends, industrial policy adjustments, and shifts in the international political landscape to proactively identify risk signals and flexibly adjust operational strategies. Meanwhile, adhering to a technology-driven development path, the Company will accelerate digital and intelligent transformation, deepen the application of artificial intelligence (AI) across R&D design, production operations, and corporate management, continuously forge core competitive advantages, enhance operational resilience and risk resistance, and ensure stable and sustainable development.

2. Market competition risks

The Company's core businesses cover rail transit platform screen door systems and high-end architectural curtain walls operating in highly market-oriented industries with increasingly fierce competition. In the rail transit platform screen door sector, the continuous enhancement of technical capabilities among leading domestic manufacturers has strengthened overall industry supply capacity, intensifying market competition. The architectural curtain wall industry is characterized by low market concentration and intense competition for high-end projects, placing the Company under pressure to maintain and expand its market share amid competition for existing projects. Should the Company fail to sustain leadership in product iteration, customer service, and brand influence, or fail to effectively respond to challenges from new entrants and alternative technologies, its market position and profitability could be materially affected

To mitigate these risks, the Company will adhere to an innovation-driven development strategy, continuously increase R&D investment, promote product performance enhancement and cost optimization, and strengthen the differentiated competitiveness of core products. It will deepen cooperation with universities and research institutions to accelerate the industrialization of new technologies and processes. Upholding the philosophy of high-quality and high-efficiency development, the Company wil continuously optimize internal management processes to improve operational efficiency and responsiveness. Meanwhile, building on deep cultivation of the domestic market, the Company will actively seize market opportunities arising from infrastructure development in Belt and Road partner countries, step up overseas market expansion, foster a business pattern where domestic and international circulations reinforce each other, enhance overall risk resistance, and continuously consolidate and expand its competitive edge in the industry.

3. Production and operation risks

The Company's production and operations are susceptible to macroeconomic fluctuations and changes in downstream market demand. Additionally, factors such as price volatility of key raw materials and rising labor costs directly impact product costs, introducing uncertainty to profit stability and operational continuity.

To this end, the Company will adopt a combination of measures to address the aforementioned risks: locking in raw materia cost ranges through futures hedging instruments, and flexibly adjusting procurement pacing and inventory strategies based on market trend forecasts to reasonably control procurement costs; continuously optimizing the supplier management system to strengthen strategic partnerships and bargaining power; and accelerating automation and intelligent upgrades in production processes, optimizing manufacturing workflows, reducing resource waste, and improving per capita productivity. Meanwhile, the Company will advance the development of a digital construction system, actively promote the application of new technologies and processes, and strengthen multi-skill training for frontline employees. On the premise of ensuring safe production, the Company will continuously improve product quality and delivery efficiency, thereby enhancing the overall risk resilience of production and operations.

4. Management risks

As the Company continues to expand its operational scale and extend its overseas business footprint, the complexity of group-level cross-regional and cross-cultural management has increased accordingly, posing greater challenges in organizational coordination, resource allocation, and internal control. Concurrently, capital market laws, regulations, and regulatory requirements are becoming increasingly stringent, imposing higher standards on the effectiveness of the corporate governance system as well as the timeliness and accuracy of information disclosure

To address these risks, the Company will deepen management reform, continuously optimize its organizational structure and division of responsibilities, improve internal control systems, and strengthen full-process risk management to ensure compliant and orderly operations across all businesses. The Company will also strengthen talent pipeline development, focusing on attracting and cultivating versatile professionals with international perspectives, cross-cultural management capabilities, and specialized technical expertise, thereby optimizing talent structure and solidifying the management foundation. Furthermore, the Company will continuously enhance corporate governance, improve scientific decision-making mechanisms, and boost organizationa effectiveness and execution capability, providing robust support for achieving high-quality and sustainable development.

XI. Formulation and Implementation of the Market Capitalization Management System and Valuation Enhancement Plan

Has the Company formulated a market value management system?

□ Yes  No

Has the Company disclosed a valuation enhancement plan?

 Yes □ No

On April 22, 2025, the Company disclosed the Valuation Enhancement Plan of Fangda Group Co., Ltd. on CNINFO (http://www.cninfo.com.cn), outlining specific measures formulated to enhance valuation. Closely aligned with the Company's actual conditions and development strategy, this plan is conducive to improving operating quality and investment value, enhancing investor returns, and promoting long-term stable development.

XII. Implementation of the "Dual Enhancement of Quality and Returns" Action Plan

Has the Company disclosed the announcement of the "Quality and Return Double Enhancement" action plan?

 Yes □ No

In the first half of 2026, the Company thoroughly implemented the "Dual Enhancement of Quality and Returns" special action plan, making solid progress in areas including operating quality, technological innovation, and governance standardization, and achieving phased results.

(I) Focusing on Core Business Cultivation to Steadily Improve Operating Quality

The Company continued to promote the synergistic development of its two core businesses—intelligent rail transit platform screen doors and high-end smart curtain walls—and achieved significant results in its global layout. During the Reporting Period, the high-speed railway platform screen door business transitioned from benchmark demonstration to batch replication, successively winning bids for Shenzhen North Station and Humen High-Speed Railway Station projects, making the Company the first domestic manufacturer to achieve full coverage of both full-height and half-height systems. The curtain wall business also recorded outstanding progress in overseas market expansion, with orders from Australia and key Middle Eastern regions increasing significantly. In terms of financial performance, net profit attributable to owners of the parent company reached RMB 54,501,100 in the first half of the year, representing a year-on-year increase of 215.22%. Net cash flow from operating activities turned positive from negative year-on-year, increasing by RMB 274 million. Newly signed overseas orders accounted for 56.03% of total new orders, and order backlog at period-end stood at RMB 6,460,882,300, laying a solid foundation for subsequent earnings realization.

(II) Strengthening Innovation-Driven Development and Empowering New Quality Productive Forces with AI

The Company continued to increase R&D investment and deepen the integration of AI technology with its core businesses. In the rail transit sector, the Company built the industry's first intelligent robotic assembly production line. Multiple achievements, including AI visual recognition and an AI-powered condition monitoring system for intelligent O&M, have been successfully deployed. The national standard for platform screen doors, led by the Company, officially came into effect in May 2026. In the smart curtain wall sector, an AI Research and Application Promotion Team was established, and the Company deepened cooperation with Huawei Cloud to upgrade its MES system. Its independently developed "Vertical Offset Curtain Wall Finishing System" and "Super-Large High-Vanadium Cable Curtain Wall Technology" were selected as "Shenzhen Enterprise Innovation (China) Records," while its "Ultra-High Suspended Curtain Wall Construction Technology" was named among the Top 10 Innovative Applications in the curtain wall industry. With cumulative patented technologies reaching 721, technological innovation has significantly driven industrial upgrading.

(III) Improving the Governance System to Enhance Standardized Operations

During the Reporting Period, the Company continuously improved its corporate governance structure, strengthened accountability constraints on "key minorities" including the controlling shareholder, directors, and senior management, and refined the mechanism linking compensation to operating performance. Independent directors fully exercised their oversight and checksand-balances functions to effectively safeguard the legitimate rights and interests of minority investors, ensuring the standardized and effective operation of the governance system.

(IV) Enhancing Information Disclosure Quality to Consolidate the Foundation for Sustainable Development

The Company has consistently fulfilled its information disclosure obligations in strict accordance with the principles o "truthfulness, accuracy, completeness, timeliness, and fairness," continuously improving the precision and transparency o disclosures. Its information disclosure work has received the highest Grade A rating from the Shenzhen Stock Exchange for four consecutive years. Meanwhile, the Company continued to strengthen investor relations management by diversifying communication channels. Through earnings briefings, investor site visits, hotline calls, and the Interactive Easy platform, the Company proactively listened to investor concerns, earnestly addressed market inquiries, and actively collected and analyzed feedback from various parties. These efforts have enhanced the market's understanding and recognition of the Company's investment value and effectively bolstered investor confidence.

Looking ahead, the Company will continue to thoroughly implement high-quality development requirements, promoting effective improvement in quality and reasonable growth in scale. It remains committed to delivering sustained and stable returns to investors, providing a platform for employees to realize their value and achieve career growth, and actively fulfilling social responsibilities to contribute social value. The Company will further advance digital and intelligent transformation to enhance core competitiveness and intrinsic value, make every effort to drive high-quality, sound, and sustainable development, and effectively deliver on the "Dual Enhancement of Quality and Returns," thereby making positive contributions to the stable and health development of the capital market.

Chapter IV Corporate Governance, Environment, and Society

I. Changes in Directors and Senior Management of the Company

 Applicable □ Inapplicable

II. Profit Distribution and Reserve Capitalization in the Report Period

□ Applicable  Inapplicable

The Company distributed no cash dividends or bonus shares and has no reserve capitalization plan.

III. Share Incentive Schemes, Staff Shareholding Program or Other Incentive Plans

□ Applicable  Inapplicable

There are no share incentive schemes, staff shareholding program or other incentive plans in the report period

IV. Disclosure of Environmental Information

Whether the listed company and its major subsidiaries are included in the list of enterprises required by law to disclose environmental information

□ Yes  No

V. Social Responsibility

While creating economic value, the Company actively fulfills its corporate social responsibilities, strives to give back to society, and has carried out a series of public welfare and charitable initiatives, contributing to the realization of the national strategies for rural revitalization and common prosperity. The Company has set a positive example in ecological protection and social development, demonstrating the sense of responsibility expected of an industry leader. The Company has successively implemented industrial assistance programs in Guangdong, Shaanxi, Guizhou, Jiangxi, and Tibet, adapting measures to local conditions to help underdeveloped regions cultivate cash crops such as tea tree mushrooms and lilies. It has supported rural collective aquaculture and livestock projects, and constructed greenhouse photovoltaic power stations and distributed photovoltaic power stations as "self-sustaining" rural industrial projects. These efforts have fostered new drivers for rural economic development and contributed to building beautiful countryside areas in the new era that feature thriving industries, pleasant living environments, civilized rural customs, effective governance, and prosperous livelihoods, achieving positive social outcomes and earning widespread acclaim from all sectors of society. The Company has been honored as an "Outstanding Enterprise in Fulfilling Social Responsibilities" for multiple consecutive years.

Chapter 5 Significant Events

I. Commitments that have been fulfilled and not fulfilled by actual controller, shareholders, related parties, acquirers of the Company

□ Applicable  Inapplicable

There is no commitment that has not been fulfilled by actual controller, shareholders, related parties, acquirers of the Company

II. Non-operating capital use by the controlling shareholder or related parties in the reporting term

□ Applicable  Inapplicable

The controlling shareholder and its affiliates occupied no capital for non-operating purpose of the Company during the report period.

III. Incompliant external guarantee

□ Applicable  Inapplicable

The Company made no incompliant external guarantee in the report period.

IV. Engaging and dismissing of CPA

Whether the interim financial report is audited

□ Yes  No

The interim report for H1 2015 has not been audited.

V. Statement of the Board on the “non-standard auditors' report” issued by the CPA on the current report period

□ Applicable  Inapplicable

VI. Statement of the Board of Directors on the Non-standard Auditor's Report for H1 2014

□ Applicable  Inapplicable

VII. Bankruptcy and capital reorganizing

□ Applicable  Inapplicable

The Company has no bankruptcy or reorganization events in the report period.

VIII. Lawsuit

Significant lawsuit and arbitration

□ Applicable  Inapplicable

The Company has no significant lawsuit or arbitration affair in the report period.

Other lawsuit

 Applicable □ Inapplicable

IX. Punishment and rectification

□ Applicable  Inapplicable

The Company received no penalty and made no correction in the report period.

X. Credibility of the Company, controlling shareholder and actual controller

 Applicable □ Inapplicable

The Company and its controlling shareholders and actual controllers do not fail to perform the effective judgment of the court, and the debts with a large amount are not paid off when due

XI. Material related transactions

1. Related transactions related to routine operation

□ Applicable  Inapplicable

The Company made no related transaction related to daily operating in the report period.

2. Related transactions related to assets transactions

□ Applicable  Inapplicable

The Company made no related transaction of assets or equity requisition and sales in the report period.

3. Related transactions related to joint external investment

□ Applicable  Inapplicable

The Company made no related transaction of joint external investment in the report period.

4. Related credits and debts

□ Applicable  Inapplicable

The Company had no related debt in the report period.

5. Transactions with related financial companies

□ Applicable  Inapplicable

There is no deposit, loan, credit or other financial business between the company and the related financial company.

6. Transactions between financial companies controlled by the company and related parties

□ Applicable  Inapplicable

There is no deposit, loan, credit or other financial business between the financial company controlled by the company and its related parties.

7. Other major related transactions

□ Applicable  Inapplicable

The Company has no other significant related transaction in the report period.

XII. Significant contracts and performance

1. Asset entrusting, leasing, contracting

(1) Asset entrusting

□ Applicable  Inapplicable

The Company made no custody in the report period.

(2) Contracting

□ Applicable  Inapplicable

The Company made no contract in the report period

(3) Leasing

□ Applicable  Inapplicable

There are no significant leasing situations during the reporting period.

2. Significant guarantee

 Applicable □ Inapplicable

In RMB10,000

Note of compound guarantee

None

The Company's new guarantees for subsidiaries in the second quarter of 2026 are as follows:

3. Entrusted wealth management

 Applicable □ Inapplicable

Specific circumstances where the Company, as a sole principal, entrusts financial institutions to conduct asset management or invests in high-risk entrusted wealth management products with lower safety and poorer liquidity

□ Applicable  Inapplicable

4. Other significant contract

□ Applicable  Inapplicable

The Company entered into no other significant contract in the report.

XIII. Record of Research Visits, Communications, and Interviews During the Reporting Period

 Applicable □ Inapplicable

XIV. Description of Other Significant Matters

□ Applicable  Inapplicable

There are no other significant matters requiring explanation during the reporting period.

XV. Significant Matters of Subsidiaries

□ Applicable  Inapplicable

Chapter VI Changes in Share Capital and Shareholders

I. Changes in shares

1. Changes in shares

In share

Reasons

□ Applicable  Inapplicable

Approval of the change

□ Applicable  Inapplicable

Share transfer

□ Applicable  Inapplicable

Progress in the implementation of share repurchase

 Applicable □ Inapplicable

1. On June 1, 2026, the Company convened the Second Meeting of the Eleventh Board of Directors, which deliberated and approved the Proposal on Repurchasing A-Shares via Centralized Bidding. The Board agreed that the Company use its own funds to repurchase A-shares through centralized bidding for the purpose of implementing an equity incentive plan. For details, please refer to the relevant announcement disclosed by the Company on June 8, 2026, in China Securities Journal, Shanghai Securities News, Securities Times, Securities Daily, and on CNINFO (http://www.cninfo.com.cn)

2. On June 8, 2026, the Company made its first repurchase of A-shares via centralized bidding through a dedicated repurchase account. For details, please refer to the relevant announcement disclosed by the Company on June 9, 2026, on CNINFO (http://www.cninfo.com.cn). During the repurchase period, the Company disclosed the progress of the repurchase in accordance with relevant regulations

3. As of June 26, 2026, the Company had repurchased 16,500,050 A-shares via centralized bidding through its dedicated securities repurchase account, representing 1.54% of the total share capital as of the disclosure date of this report. The highest transaction price was RMB 3.76/share and the lowest was RMB 3.33/share, with a total transaction amount of RMB 59,938,011.28 (including transaction fees). The implementation of this repurchase plan has now been completed. The actual repurchase period was from June 8, 2026, to June 26, 2026. This repurchase complies with the Company's share repurchase plan and applicable law and regulations. For details, please refer to the relevant announcement disclosed by the Company on June 27, 2026, on CNINFO (http://www.cninfo.com.cn).

Progress in the implementation of the reduction of shareholding shares by means of centralized bidding

□ Applicable  Inapplicable

Impacts on financial indicators including basic and diluted earnings per share, net assets per share attributable to common shareholders of the Company in the most recent year and period

□ Applicable  Inapplicable

Others that need to be disclosed as required by the securities supervisor

□ Applicable  Inapplicable

2. Changes in conditional shares

□ Applicable  Inapplicable

II. Share placing and listing

□ Applicable  Inapplicable

III. Shareholders and shareholding

In share

Guarantee Securities Account of Xiangcai Securities Co., Ltd.; Li Hao holds 3,518,300 shares of the Company through the Client Credit Trading Guarantee Securities Account of Guotai Haitong Securities Co., Ltd.

Situation of share lending in refinancing business by shareholders holding more than 5%, the top 10 shareholders, and the top 10 shareholders of unrestricted circulating shares

□ Applicable  Inapplicable

Changes due to lending/returning of shares in refinancing business by the top 10 shareholders and the top 10 shareholders of unrestricted circulating shares compared to the previous period

□ Applicable  Inapplicable

Agreed re-purchasing by the Company's top 10 shareholders of common shares and top 10 shareholders of unconditional common shares in the report period

□ Yes  No

No agreed re-purchasing by the Company's top 10 shareholders of common shares and top 10 shareholders of unconditional common shares in the report period

IV. Changes in shareholding of Directors and Senior Management

□ Applicable  Inapplicable

The Company's Directors and senior management shareholding has remained unchanged during the report period. For details, please refer to the 2025 annual report.

V. Changes in controlling shareholder or actual controller

Where the Company has previously disclosed that the actual controller is planning a change of control that remains incomplete, please describe the progress of such change of control.

□ Applicable  Inapplicable

Changes in the controlling shareholder in the reporting period

□ Applicable  Inapplicable

No change in the controlling shareholder in the report period

Change in the actual controller in the report period

□ Applicable  Inapplicable

No change in the actual shareholder in the report period

VI. Preferred Shares

□ Applicable  Inapplicable

The Company had no preferred share in the report period.

Chapter VII Information about the Company's Securities

□ Applicable  Inapplicable

Chapter VIII Financial Statements

I. Auditor's Report

Whether the interim report is audited

□ Yes  No

The financial statements for H1 2014 have not been audited.

II. Financial statements

Unit for statements in notes to financial statements: RMB yuan

1. Consolidated Balance Sheet

Prepared by: China Fangda Group Co., Ltd.

June 30, 2026 In RMB

Legal Representative: Xiong Jianming Person in Charge of Accounting Functions: Lin Kebin Head of Accounting Department: Wang Huan

2. Balance Sheet of the Parent Company

In RMB

3. Consolidated Income Statement

In RMB

Net profit contributed by entities merged under common control in the report period was RMB0.00, net profit realized by partie merged during the previous period is RMB0.00. Legal Representative: Xiong Jianming Person in Charge of Accounting Functions: Lin Kebin

Head of Accounting Department: Wang Huan

4、Income Statement of the Parent Company

In RMB

5. Consolidated Cash Flow Statement

In RMB

6. Cash Flow Statement of the Parent Company

In RMB

7. Consolidated Statement of Changes in Owners' Equity

Amount of the Current Term

In RMB

In RMB

8. Statement of Changes in Owners' Equity of the Parent Company

Amount of the Current Term

In RMB

Amount of Last Year

In RMB

III. General Information

China Fangda Group Co., Ltd. (the "Company" or the "Group") is a joint stock company registered in Shenzhen, Guangdong and was approved by the Government of Shenzhen with Document Shen Fu Ban Han (1995) No.194, and was founded, on the basis of Shenzhen Fangda Construction Material Co., Ltd., by way of share issuing in October 1995. The unified social credit code is: 91440300192448589C; registered address: Fangda Technology Building, Keji South 12th Road, South District, High-tech Industrial Park, Nanshan District, Shenzhen. Mr. Xiong Jianming is the legal representative.

The Company issued foreign currency shares (B shares) and local currency shares (A shares) and listed in November 1995 and April 1996 respectively in Shenzhen Stock Exchange. The Company received the Reply to the Non-public Share Issuance of Fangda China Group Co., Ltd. (CSRC License [2016] No.825) to allow the Company to conduct non-public issuance of 32,184,931 A-shares in June 2016. According to the profit distribution plan for 2016 approved by the 2016 general shareholders' meeting, the Company issued five shares for every ten shares to all shareholders through surplus capitalization based on the total 789,094,836 shares on December 31, 2016. The registered capital at the end of 2017 was RMB 1,183,642,254.00. In August 2018, the Company repurchased and canceled 28,160,568 B-shares; in January 2019, the Company repurchased and canceled 32,097,497 B-shares; in May 2020, the Company repurchased and canceled 35,105,238 B-shares; and in April 2021, the Company repurchased and canceled 14,404,724 B-shares. In June 2026, the Company repurchased 16,500,050 A-shares, which are temporarily held as treasury shares. The current registered capital is RMB 1,073,874,227.00.

The Company has established the corporate governance structure of the General Meeting of Shareholders and the Board of Directors. At present, it has set up the President's Office, the Administration Department, the Human Resources Department, the Enterprise Management Department, the Finance Department, the Audit and Supervision Department, the Securities Department, the Legal Department, the Information Management Department, the Technology Innovation Department, and other departments, and has Shenzhen Fangda Construction Technology Group Co., Ltd. (hereinafter referred to as Fangda Construction Technology Co., Ltd.) Fangda Zhiyuan Technology Co., Ltd. (hereinafter referred to as Fangda Zhiyuan Technology Co., Ltd.), Fangda Jiangxi New Materials Co., Ltd., Fangda Real Estate Co., Ltd., Fangda New Energy Co., Ltd. and other subsidiaries.

The business nature and main business activities of the Company and its subsidiaries include: (1) curtain wall division, production and sales of curtain wall materials, design, production and installation of building curtain walls, and curtain wall testing and maintenance services; (2) Rail transit branch, assembly and processing of subway screen doors, screen door detection and maintenance services; (3) The real estate division is engaged in real estate development, operation and property leasing and property management services on the land that has legally obtained the right to use; (4) New energy division, photovoltaic power generation and sales; R&D, installation and sales of photovoltaic equipment, design and installation of photovoltaic power station project.

Date of Authorization for Issue of Financial Statements: These financial statements were authorized for issue by a resolution of the Board of Directors of the Company on August 21, 2026.

IV. Basis for the preparation of financial statements

1. Preparation basis

The Company prepares the financial statements based on continuous operation and according to actual transactions and events, with figures confirmed and measured in compliance with the Accounting Standards for Business Enterprises and other specific account standards, application guide and interpretations. The Company has also disclosed related financial information according to the requirement of the Regulations of Information Disclosure No.15 – General Provisions for Financial Statements (Revised in 2023) issued by the CSRC.

2. Continuous operation

The Company assessed the continuing operations capability of the Company for the 12 months from the end of the reporting period. No matters were found that would affect the Company's ability to continue as a going concern. It is reasonable for the Company to prepare financial statements based on continuing operations.

V. Significant Account Policies and Estimates

The following major accounting policies and accounting estimates shall be formulated in accordance with the accounting standards of the enterprise. Unmentioned operations are carried out in accordance with the relevant accounting policies in the enterprise accounting standards.

1. Statement of compliance to the Enterprise Accounting Standard

The financial statements prepared by the Company comply with the requirements of the Accounting Standards for Business Enterprises, and present fairly and completely the financial position, results of operations, changes in owners' equity, and cash flows of the Company.

2. Fiscal Period

The Company The fiscal period ranges between January 1 and December 31 of the Gregorian calendar.

3. Operation period

Our normal business cycle is one year

4. Bookkeeping standard money

The Company's bookkeeping standard currency is Renminbi, and overseas subsidiaries are based on the currency of the main economic environment in which they operate.

5. Method for determining importance criteria and selection criteria

 Applicable □ Inapplicable

6. Accounting treatment of the entities under common and different control

(1) Consolidation of entities under common control

The assets and liabilities acquired by the Company in a business combination are measured at the book value of the combined party in the consolidated financial statements of the ultimate controlling party on the date of combination. Where the combined party applied different accounting policies and accounting periods from those of the Company prior to the business combination, such policies and periods have been harmonized based on the materiality principle—specifically, the carrying amounts of the combined party's assets and liabilities have been adjusted in accordance with the Company's accounting policies and accounting periods. If there is a difference between the book value of the net assets acquired by the Company in the business combination and the book value of the consideration paid, first adjust the balance of the capital reserve (capital premium or equity premium), the

balance of the capital reserve (capital premium or equity premium) If it is insufficient to offset, the surplus reserve and undistributed profits will be offset in sequence.

For the accounting treatment method of business combination not under the same control through step-by-step transactions, see Chapter VIII, V. important accounting policies and accounting estimates 7. (6).

(2) Consolidation of entities under different control

All identifiable assets and liabilities acquired by the Company during the merger shall be measured at its fair value on the date of purchase. Where the acquiree applied different accounting policies and accounting periods from those of the Company prior to the business combination, such policies and periods have been harmonized based on the materiality principle—specifically, the carrying amounts of the acquiree's assets and liabilities have been adjusted in accordance with the Company's accounting policies and accounting periods. The merger cost of the Company on the date of purchase is greater than the fair value of the assets and liabilities recognized by the purchaser in the merger, and is recognized as goodwill. If the merger cost is less than the difference between the identifiable assets and the fair value of the liabilities obtained by the purchaser in the enterprise merger, the merger cost and the fair value of the identifiable assets and the liabilities obtained by the purchaser in the enterprise merger are reviewed, and the merger cost is still less than the fair value of the identifiable assets and liabilities obtained by the purchaser after the review, the difference is considered as the profit and loss of the current period of the merger.

For the accounting treatment method of business combinations not under common control achieved through step-by-step transactions, see Section VIII, V, Important Accounting Policies and Estimates, 7, (6).

(3) Treatment of related transaction fee in enterprise merger

Agency expenses and other administrative expenses such as auditing, legal consulting, or appraisal services occurred relating to the merger of entities are accounted into current income account when occurred. The transaction fees of equity certificates or liability certificates issued by the purchaser for payment for the acquisition are accounted at the initial amount of the certificates.

7. Judgment criteria for control and preparation methods for consolidated financial statements

(1) Determination of control criteria and consolidation scope

Control means the power possessed by the Company on invested entities to share variable returns by participating in related activities of the invested entities and to impact the amount of the returns by using the power. The definition of control includes three basic elements: first, the investor has the power over the investee; second, enjoys variable returns due to participation in the investee's related activities; and third, has the ability to use the power over the investee to influence its return amount. When the Company's investment in the invested party meets the above three elements, it indicates that the Company can control the invested party.

The consolidated scope of the consolidated financial statements is determined on a control basis and includes not only subsidiaries determined on the basis of voting rights (or similar voting rights) themselves or in conjunction with other arrangements, but also structured subjects determined on the basis of one or more contractual arrangements.

The subsidiary company is the subject controlled by the Company (including the enterprise, the divisible part of the invested unit and the structured subject controlled by the enterprise, etc.). The structured subject is the subject which is not designed to determine the controlling party by taking the voting right or similar right as the decisive factor.

(2) Special provisions regarding the parent company being an investment entity

If the parent company is an investment entity, only those subsidiary companies that provide services related to investment activities of the investment entity shall be included in the consolidation scope. Other subsidiary companies shall not be consolidated and their equity investments shall be recognized as financial assets measured at fair value with changes in fair value recognized in profit or loss.

The parent company qualifies as an investment entity when it simultaneously meets the following conditions:

① The company obtains funds from one or more investors with the purpose of providing investment management services to the investors.

② The sole purpose of the company's operations is to generate returns for the investors through capital appreciation, investment income, or both.

③ The company evaluates and assesses the performance of almost all of its investments based on fair value.

When the parent company changes from a non-investment entity to an investment entity, it shall only include those subsidiary companies that provide relevant services for its investment activities in the preparation of consolidated financial statements. Other subsidiary companies shall no longer be consolidated, and the principle of recognizing partially disposed subsidiary companies' equity while retaining control shall be applied.

When the parent company changes from an investment entity to a non-investment entity, the subsidiary companies that were previously not included in the consolidation financial statements shall be included as of the date of the change. The fair value of these subsidiary companies on the date of the change shall be regarded as the transaction price of the acquisition and accounted for using the accounting treatment for business combinations under common control.

(3) Preparation of Consolidated Financial Statements

The Company prepares consolidated financial statements based on the financial statements of itself and its subsidiaries and based on other relevant information.

The Company compiles consolidated financial statements, regards the whole enterprise group as an accounting entity, reflects the overall financial status, operating results and cash flow of the enterprise group according to the confirmation, measurement and presentation requirements of the relevant enterprise accounting standards, and the unified accounting policy and accounting period.

① Merge the assets, liabilities, owner's rights and interests, income, expenses and cash flow of parent company and subsidiary company.

② Offset the long-term equity investment of the parent company to the subsidiary company and the share of the parent company in the ownership rights of the subsidiary company.

③ Offset the influence of internal transaction between parent company, subsidiary company and subsidiary company. If an internal transaction indicates that the relevant asset has suffered an impairment loss, the part of the loss shall be confirmed in full.

④ adjust the special transaction from the angle of enterprise group.

(4) Processing of subsidiaries during the reporting period

① Increase of subsidiaries or business

A. Subsidiary or business increased by business combination under the same contro

(A) When preparing the consolidated balance sheet, adjust the opening number of the consolidated balance sheet and adjust the related items of the comparative statement. The same report entity as the consolidated balance sheet will exist from the time of the final control party.

(B) When preparing the consolidated cash flow statement, the cash flows of the subsidiary and the business combination from the beginning of the current period to the end of the reporting period are included in the consolidated cash flow statement, and the related items of the comparative statement are adjusted, which is regarded as the combined report body since the final The controller has been there since the beginning of control.

(C) When preparing the consolidated cash flow statement, the cash flows of the subsidiary and the business combination from the beginning of the current period to the end of the reporting period are included in the consolidated cash flow statement, and the related items of the comparative statement are adjusted, which is regarded as the combined report body since the final The controller has been there since the beginning of control.

B. Subsidiary or business increased by business combination under the same control

(A) When preparing the consolidated balance sheet, the opening number of the consolidated balance sheet is not adjusted.

(B) When preparing the consolidated profit statement, the income, expense and profit of the subsidiary company and the business Purchase date and Closing balance shall be included in the consolidated profit statement.

(C) When the consolidated cash flow statement is prepared, the cash flow from the purchase date of the subsidiary to the end of the reporting period is included in the consolidated cash flow statement.

② Disposal of subsidiaries or business

A. When preparing the consolidated balance sheet, the opening number of the consolidated balance sheet is not adjusted.

B. When preparing the consolidated profit statement, the income, expense and profit of the subsidiary company and the business opening and disposal date shall be included in the consolidated profit statement.

C. When the consolidated cash flow statement is prepared, the cash flow from the Beginning of the period of the subsidiary to the end of the reporting period is included in the consolidated cash flow statement.

(5) Special considerations in consolidation offsets

① The long-term equity investment held by a subsidiary company shall be regarded as the inventory shares of the Company as a subtraction of the owner's rights and interests, which shall be listed under the item of "subtraction: Stock shares" under the item of owner's rights and interests in the consolidated balance sheet.

The long-term equity investments held by the subsidiaries are offset by the shares of the shareholders of the subsidiaries.

② The "special reserve" and "general risk preparation" projects, because they are neither real capital (or share capital) nor capital reserve, but also different from the retained income and undistributed profits, are restored according to the ownership of the parent company after the long-term equity investment is offset by the ownership rights and interests of the subsidiary company.

③ If there is a temporary difference between the book value of assets and liabilities in the consolidated balance sheet and the taxable basis of the taxpayer due to the offset of the unrealized internal sales gain or loss, the deferred income tax asset or the deferred income tax liability is confirmed in the consolidated balance sheet, and the income tax expense in the consolidated profit statement is adjusted, with the exception of the deferred income tax related to the transaction or event directly included in the owner's equity and the merger of the enterprise.

④ The unrealized internal transaction gains and losses incurred by the Company from selling assets to subsidiaries shall be fully offset against the "net profit attributable to the owners of the parent company". The unrealized internal transaction gains and losses arising from the sale of assets by the subsidiary to the Company shall be offset between the "net profit attributable to the owners of the parent company" and the "minority shareholder gains and losses" in accordance with the Company's distribution ratio to the subsidiary. The unrealized internal transaction gains and losses arising from the sale of assets between subsidiaries shall be offset between the "net profit attributable to the owners of the parent company" and the "minority shareholders' gains and losses" in accordance with the Company's distribution ratio to the seller's subsidiary.

⑤ If the current loss shared by the minority shareholders of the subsidiary exceeds the share of the minority shareholders in the owner 's equity of the subsidiary at the beginning of the period, the balance should still be offset against the minority shareholders 'equity.

(6) Accounting treatment of special transactions

① Purchase minority shareholders' equity

The Company purchases the shares of the subsidiaries owned by the minority shareholders of the subsidiaries. In the individual financial statements, the investment costs of the newly acquired long-term investments of the minority shares shall be measured at the fair value of the price paid. In the consolidated financial statements, the difference between the newly acquired long-term equity investment due to the purchase of minority equity and the share of net assets that should be continuously calculated by the subsidiary since the purchase date or the merger date should be adjusted according to the new shareholding ratio. The product (capital premium or equity premium), if the capital reserve is insufficient to offset, the surplus reserve and undistributed profits are offset in turn.

② Step-by-step acquisition of control of the subsidiary through multiple transactions

A. Enterprise merger under common control through multiple transactions

On the date of the merger, the Company determines the initial investment cost of the long-term equity investment in the individual financial statements based on the share of the subsidiary 's net assets that should be enjoyed after the merger in the final controller 's consolidated financial statements; the initial investment cost and the difference between the book value of the longterm equity investment before the merger plus the book value of the consideration paid for new shares acquired on the merger date, the capital reserve (capital premium or equity premium) is adjusted, and the capital reserve (capital premium or equity premium) is insufficient to offset Reduced, in turn offset the surplus reserve and undistributed profits.

In consolidated financial statements, assets and liabilities obtained by the merging party from the merged party should be measured at the book value in the final controlling party's consolidated financial statements other than the adjustment made due to differences in accounting policies; adjust the capital surplus (share premium) according to the difference between the initial investment cost and the book value of the held investment before merger plus the book value of the consideration paid on the merger date. Where the capital surplus falls short, the retained income should be adjusted.

Before the acquirer obtains control of the acquiree, any recognized gains and losses, other comprehensive income, and changes in other owners' equity related to the equity investment held by the acquirer from the later of the date when the original equity was obtained or the date when both the acquirer and the acquiree were under the control of the same party until the acquisition date should be adjusted against the beginning retained earnings or the current profits and losses of the comparative statements separately.

A. Enterprise merger under common control through multiple transactions

On the merger day, in individual financial statements, the initial investment cost of the long-term equity investment on the merger day is based on the book value of the long-term equity investment previously held plus the sum of the additional investment costs on the merger day.

In the consolidated financial statements, the equity held in the acquiree before the acquisition date is remeasured at its fair value on the acquisition date. If the equity held before the acquisition date is designated as a financial asset measured at fair value through other comprehensive income, the difference between the fair value and its book value is included in retained earnings, and the cumulative fair value changes previously included in other comprehensive income are transferred to retained earnings. If the equity held before the acquisition date is designated as a financial asset measured at fair value through profit or loss or as a longterm equity investment accounted for by the equity method, the difference between the fair value and its book value is included in the current period's investment income. For other comprehensive income and other changes in owners' equity under the equity method related to the equity held before the acquisition date, the related other comprehensive income is accounted for on the same basis as if the investee had directly disposed of the related assets or liabilities on the acquisition date, and the related other changes in owners' equity are transferred to the current period's investment income on the acquisition date.

(3) The Company disposes of long-term equity investment in subsidiaries without losing control

The parent company partially disposes of the long-term equity investment in the subsidiary company without losing control. In the consolidated financial statements, the disposal price corresponds to the disposal of the long-term equity investment. The difference between the shares is adjusted for the capital reserve (capital premium or equity premium). If the capital reserve is insufficient to offset, the retained earnings are adjusted.

④ The Company disposes of long-term equity investment in subsidiaries and loses control

A. One transaction disposition

If the Company loses control over the Invested Party due to the disposal of part of the equity investment, it shall remeasure the remaining equity according to its fair value at the date of loss of control when compiling the consolidated financial statement. The consideration received from the disposal of equity plus the fair value of the remaining equity, minus the share of net assets and goodwill calculated based on the original shareholding ratio from the acquisition date or combination date to the disposal date, is included in the investment income for the period in which control is lost.

Other comprehensive income related to equity investments in former subsidiaries is accounted for, upon loss of control, on the same basis as if the related assets or liabilities of the former subsidiary were directly disposed of. Other changes in owners' equity related to former subsidiaries that were previously recognized under the equity method are reclassified to profit or loss in the period in which control is lost.

B. Multi-transaction step-by-step disposition

In consolidated financial statements, you should first determine whether a step-by-step transaction is a "blanket transaction".

If the step-by-step transaction does not belong to a "package deal", in the individual financial statements, for each transaction before the loss of control of the subsidiary, the book value of the long-term equity investment corresponding to each disposal of equity is carried forward, the price received and the disposal The difference between the book value of the long-term equity investment is included in the current investment income; in the consolidated financial statements, it should be handled in accordance with the relevant provisions of "the parent company disposes of the long-term equity investment in the subsidiary without losing control."

If a step-by-step transaction belongs to a "blanket transaction", the transaction shall be treated as a transaction that disposes of the subsidiary and loses control; In individual financial statements, the difference between each disposal price before the loss of control and the book value of the long-term equity investment corresponding to the equity being disposed of is first recognized as other consolidated gains and then converted to the current loss of control at the time of the loss of control; In the consolidated financial statements, for each transaction prior to the loss of control, the difference between the disposition of the price and th disposition of the investment corresponding to the share in the net assets of the subsidiary shall be recognized as other consolidated gains and shall, at the time of the loss of control, be transferred to the loss of control for the current period.

Where the terms, conditions, and economic impact of each transaction meet one or more of the following conditions, usually multiple transactions are treated as a "package deal":

(a) These transactions were concluded at the same time or in consideration of mutual influence.

(b) These transactions can only achieve the business result as a whole;

(c) The effectiveness of one transaction depends the occurrence of at least another transaction;

(d) A single transaction is not economic and is economic when considered together with other transactions

(5) Proportion of minority shareholders in factor companies who increase capital and dilute ownership of parent companies

When other shareholders (minority shareholders) of a subsidiary increase their investment in the subsidiary, thereby diluting the parent company's equity proportion in the subsidiary. In the consolidated financial statements, the share of the parent company in the net book assets of the former subsidiary of the capital increase is calculated according to the share ratio of the parent company before the capital increase, the difference between the share and the net book assets of the latter subsidiary after the capital increase is calculated according to the share ratio of the parent company, the capital reserve (capital premium or capital premium), the capital reserve (capital premium or capital premium) is not offset, and the retained income is adjusted.

8. Classification of Joint Arrangements and Accounting Policies for Joint Operations

A joint arrangement is an arrangement jointly controlled by two or more participants. The Company classifies its joint arrangements into joint operations and joint ventures.

(1) Joint Operations

A joint operation is a joint arrangement whereby the Company has rights to the related assets and obligations for the related liabilities of the arrangement.

The Company recognizes the following items relating to its interest in a joint operation and accounts for them in accordance with the relevant enterprise accounting standards:

① Recognizes assets held separately, as well as its share ofjointly held assets;

② Recognizes liabilities borne separately, as well as its share ofjointly borne liabilities;

③ Recognizes revenue from the sale of its share of output from the joint operation;

④ Recognizes its share of revenue generated by the joint operation from the sale of output;

⑤ Recognizes expenses incurred separately, as well as its share of expenses incurred by the joint operation.

(2) Joint Ventures

A joint venture is a joint arrangement whereby the Company has rights only to the net assets of the arrangement.

The Company accounts for its investment in joint ventures using the equity method in accordance with the relevant provisions on long-term equity investments.

9. Recognition of cash and cash equivalents

Cash refers to cash in stock and deposits that can be used for payment at any time. Cash equivalents refer to investments with a short holding period (generally referring to expiry within three months from the date of purchase), strong liquidity, easy to convert to a known amount of cash, and little risk of value change.

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

(1) Methods for determining conversion rates in foreign currency transactions

The Company translates foreign currency transactions into the functional currency at the initial recognition using the spot exchange rate on the transaction date or an approximate exchange rate that is determined according to a reasonable method and is close to the spot exchange rate on the transaction date. The resulting amount is recorded in the accounting currency.

(2) Methods of conversion of foreign currency items on balance sheet days

At the balance sheet date, foreign currency items are translated on the spot exchange rate of the balance sheet date. The exchange differences caused by the difference in exchange rates on the balance sheet date and initial recognizing date or previous balance sheet date are included in the current profits and losses. For non-monetary items measured at historical cost in foreign currencies, they are translated using the spot exchange rate on the transaction date. For inventories measured at the lower of cost and net realizable value, if the inventories were purchased in foreign currencies and their net realizable value is reflected in foreign currencies as of the balance sheet date, the net realizable value is first translated into the functional currency at the spot exchange rate on the balance sheet date, and then compared with the inventory cost reflected in the functional currency to determine the ending value of the inventories. Non-monetary items measured at fair value in foreign currencies are translated using the spot exchange rate on the date the fair value is determined. For financial assets measured at fair value with changes recognized in the current period's profit or loss, the difference between the translated amount in the functional currency and the original amount in the functional currency is recognized in the current period's profit or loss. For non-trading equity investments designated to be measured at fair value with changes recognized in other comprehensive income, the difference between the translated amount in the functional currency and the original amount in the functional currency is recognized in other comprehensive income.

(3) Translation of foreign exchange statements

Prior to the conversion of the financial statements of an enterprise's overseas operations, the accounting period and policy of the overseas operations should be adjusted to conform to the accounting period and policy of the enterprise. The financia statements of the corresponding currency (other than the functional currency) should be prepared according to the adjusted accounting policy and the accounting period. The financial statements of the overseas operations should be converted according to the following methods:

① The assets and liabilities items in the balance sheet are translated at the spot exchange rate on the balance sheet date. Except for the "undistributed profits" items, the owner's equity items are translated at the spot exchange rate when they occur.

② The income and expense items in the profit statement are converted at the spot exchange rate on the transaction date or the approximate exchange rate of the spot exchange rate.

③ The foreign currency cash flow and the foreign subsidiary's cash flow are converted using the immediate exchange rate or the approximate exchange rate at the date of the cash flow. The impact of exchange rate changes on cash should be used as an adjustment item and presented separately in the cash flow statement.

④ The foreign currency translation differences arising are presented under the "Other Comprehensive Income" item in the shareholders' equity section of the consolidated balance sheet when preparing the consolidated financial statements.

When foreign operations are disposed of and the control rights are lost, the difference in foreign currency statements related to the overseas operations that are listed in the shareholders' equity items in the balance sheet is transferred to the profit or loss for the current period, either in whole or in proportion to the disposal of the foreign operations.

11. Financial instrument

Financial instrument refers to a company's financial assets and contracts that form other units of financial liabilities or equity instruments.

(1) Recognition and de-recognition of financial instrument

The Company recognizes a financial asset or liability when it becomes one party in the financial instrument contract.

Financial asset is derecognized when:

① The contractual right to receive the cash flows of the financial assets is terminated;

② The financial asset is transferred and meets the following derecognization condition.

If the current obligation of a financial liability (or part of it) has been discharged, the Company derecognizes the financial liability (or part of the financial liability). When the Company (borrower) and lender enter into an agreement to replace the original financial liabilities by undertaking new financial liabilities and the contract terms for the new financial liabilities are essentially different from those for the original one, the original financial liabilities will be derecognized and new financial liabilities will be recognized. Where the Company makes substantial amendments to the contract terms of the original financial liability (or part thereof), it shall terminate the original financial liability and confirm a new financial liability in accordance with the amended terms.

Financial asset transactions in regular ways are recognized and de-recognized on the transaction date. The conventional sale of financial assets means the delivery of financial assets in accordance with the contractual terms and conditions, at the time set out in the regulations or market practices. Transaction date refers to the date when the Company promises to buy or sell financial assets.

(2) Classification and subsequent measurement of financial assets

At initial recognition, the Company classifies financial assets into the following three categories based on the business model of managing financial assets and the contractual cash flow characteristics of financial assets: financial assets measured at amortized cost are measured at fair value and their changes are included in other financial assets with current profit and loss and financial assets measured at fair value through profit or loss. Unless the Company changes the business model for managing financial assets, in this case, all affected financial assets are reclassified on the first day of the first reporting period after the business model changes, otherwise the financial assets may not be initially confirmed.

Financial assets are measured at the fair value at the initial recognition. For financial assets measured at fair value with variations accounted into current income account, related transaction expenses are accounted into the current income. For other financial assets, the related transaction expenses are accounted into the initial recognized amounts. Bills receivable and accounts receivable arising from the sale of commodities or the provision of labor services that do not contain or do not consider significant financing components, the Company performs initial measurement according to the transaction price defined by the income standard.

The subsequent measurement of financial assets depends on their classification:

① Financial assets measured at amortized cost

Financial assets that meet the following conditions at the same time are classified as financial assets measured at amortized cost: The Company 's business model for managing this financial asset is to collect contractual cash flows as its goal; the contract terms of the financial asset stipulate that Cash flow is only the payment of principal and interest based on the outstanding principal amount. For such financial assets, the actual interest rate method is used for subsequent measurement according to the amortized cost. The gains or losses arising from the termination of recognition, amortization or impairment based on the actual interest rate method are included in the current profit and loss.

② Financial assets measured at fair value and whose changes are included in other comprehensive income

Financial assets that meet the following conditions at the same time are classified as financial assets measured at fair value and their changes are included in other comprehensive income: The Company's business model for managing this financial asset is to both target the collection of contractual cash flows and the sale of financial assets. Objective; The contractual terms of the financial asset stipulate that the cash flow generated on a specific date is only for the payment of principal and interest based on the outstanding principal amount. For such financial assets, fair value is used for subsequent measurement. Except for impairment losses or gains and exchange gains and losses recognized as current gains and losses, changes in the fair value of such financial assets are recognized as other comprehensive income. Until the financial asset is derecognized, its accumulated gains or losses are transferred to current gains and losses. However, the relevant interest income of the financial asset calculated by the actual interest rate method is included in the current profit and loss.

The Company irrevocably chooses to designate a portion of non-tradeable equity instrument investment as a financial asset measured at fair value and whose variation is included in other consolidated income. Only the relevant dividend income is included in the current profit and loss, and the variation of fair value is recognized as other consolidated income.

③ Financial assets measured at fair value with variations accounted into current income account

The above financial assets measured at amortized cost and other financial assets measured at fair value and whose changes are included in other comprehensive income are classified as financial assets measured at fair value and whose changes are

included in the current profit and loss. For such financial assets, fair value is used for subsequent measurement, and all changes in fair value are included in current profit and loss.

(3) Classification and measurement of financial liabilities

The Company classifies financial liabilities into financial liabilities measured at fair value and their changes included in the current profit and loss, loan commitments and financial guarantee contract liabilities for loans below market interest rates, and financial liabilities measured at amortized cost.

The subsequent measurement of financial liabilities depends on their classification:

① Financial liabilities measured at fair value with variations accounted into current income account

Such financial liabilities include transactional financial liabilities (including derivatives that are financial liabilities) and financial liabilities designated as at fair value through profit or loss. After the initial recognition, the financial liabilities are subsequently measured at fair value. Except for the hedge accounting, the gains or losses (including interest expenses) are recognized in profit or loss. However, for the financial liabilities designated as fair value and whose variations are included in the profits and losses of the current period, the variable amount of the fair value of the financial liability due to the variation of credit risk of the financial liability shall be included in the other consolidated income. When the financial liability is terminated, the cumulative gains and losses previously included in the other consolidated income shall be transferred out of the other consolidated income and shall be included in the retained income.

② Loan commitments and financial security contractual liabilities

A loan commitment is a promise that the Company provides to customers to issue loans to customers with established contract terms within the commitment period. Loan commitments are provided for impairment losses based on the expected credit loss model.

A financial guarantee contract refers to a contract that requires the Company to pay a specific amount of compensation to the contract holder who suffered a loss when a specific debtor is unable to repay the debt in accordance with the original or modified debt instrument terms. Financial guarantee contract liabilities are subsequently measured based on the higher of the loss reserve amount determined in accordance with the principle of impairment of financial instruments and the initial recognition amount after deducting the accumulated amortization amount determined in accordance with the revenue recognition principle.

③ Financial liabilities measured at amortized cost

After initial recognition, other financial liabilities are measured at amortized cost using the effective interest method.

Except in special circumstances, financial liabilities and equity instruments are distinguished according to the following principles:

① If the Company cannot unconditionally avoid delivering cash or other financial assets to fulfill a contractual obligation, the contractual obligation meets the definition of financial liability. While some financial instruments do not explicitly contain terms and conditions for the delivery of cash or other financial assets, they may indirectly form contractual obligations through other terms and conditions.

If a financial instrument is required to be settled with or can be settled with the Company's own equity instruments, the Company's own equity instrument used to settle the instrument needs to be considered as a substitute for cash or other financial assets or for the holder of the instrument to enjoy the remaining equity in the assets after all liabilities are deducted. If it is the former, the instrument is the financial liabilities of the issuer; if it is the latter, the instrument is the equity instrument of the issuer. In some cases, a financial instrument contract provides that the Company shall or may use its own instrument of interest, in which the amount of a contractual right or obligation is equal to the amount of the instrument of its own interest which may be acquired or delivered multiplied by its fair value at the time of settlement, whether the amount of the contractual right or obligation is fixed or is based entirely or in part on a variation of a variable other than the market price of the instrument of its own interest, such as the rate of interest, the price of a commodity or the price of a financial instrument, the contract is classified as a financial liability.

(4) Derivative financial instruments and embedded derivatives

Derivative financial instruments are initially measured at the fair value of the day when the derivative transaction contract is signed, and are subsequently measured at their fair values. Derivative financial instruments with a positive fair value are recognized as asset, and instruments with a negative fair value are recognized as liabilities.

The gains and losses arising from the change in fair value of derivatives are directly included in the profits and losses of the current period, except that the part of the cash flow that is valid in the hedge is included in the other consolidated income and transferred out when the hedged item affects the gain and loss of the current period.

For a hybrid instrument containing an embedded derivative instrument, if the principal contract is a financial asset, the hybrid instrument as a whole applies the relevant provisions of the financial asset classification. If the main contract is not a financial asset, and the hybrid instrument is not measured at fair value and its changes are included in the current profit and loss for accounting, the embedded derivative does not have a close relationship with the main contract in terms of economic characteristics and risks, and it is If the instruments with the same conditions and exist separately meet the definition of derivative instruments, the embedded derivative instruments are separated from the mixed instruments and treated as separate derivative financial instruments. If the fair value of the embedded derivative on the acquisition date or the subsequent balance sheet date cannot be measured separately, the hybrid instrument as a whole is designated as a financial asset or financial liability measured at fair value and whose changes are included in the current profit or loss.

(5) Financial instrument Less

The Company shall confirm the preparation for loss on the basis of expected credit loss for financial assets measured at amortization costs, creditor's rights investments measured at fair value, contractual assets, leasing receivables, loan commitments and financial guarantee contracts, etc.

① Measurement of expected credit losses of accounts receivable

The expected credit loss refers to the weighted average of the credit losses of financial instruments that are weighted by the risk of default. Credit loss refers to the difference between all contractual cash flows receivable from the contract and all cash flows expected to be received by the Company at the original actual interest rate, that is, the present value of all cash shortages. Among them, the financial assets which have been purchased or born by the Company shall be discounted according to the actual rate of credit adjustment of the financial assets.

The expected lifetime credit loss is the expected credit loss due to all possible default events during the entire expected life of the financial instrument.

Expected credit losses in the next 12 months are expected to result from possible defaults in financial instruments within 12 months after the balance sheet date (or estimated duration of financial instruments if the expected duration is less than 12 months) Credit losses are part of the expected lifetime credit loss.

On each balance sheet day, the Company measures the expected credit losses of financial instruments at different stages. Where the credit risk has not increased significantly since the initial confirmation of the financial instrument, it is in the first stage.

The Company measures the preparation for loss according to the expected credit loss in the next 12 months. Where the credit risk has increased significantly since the initial confirmation but the credit impairment has not occurred, the financial instrument is in the second stage. Where a credit impairment has occurred since the initial confirmation of the financial instrument, it shall be in the third stage, and the Company shall prepare for measuring the expected credit loss of the whole survival period of the instrument.

For financial instruments with low credit risk on the balance sheet date, the Company assumes that the credit risk has not increased significantly since the initial recognition, and measures the loss provision based on the expected credit losses in the next 12 months.

For financial instruments that are in the first and second stages and with lower credit risk, the Company calculates interest income based on their book balances and actual interest rates without deduction for impairment provision. For financial instruments in the third stage, interest income is calculated based on the amortized cost and the actual interest rate after the book balance minus the provision for impairment.

Regarding bills receivable, accounts receivable and financing receivables, regardless of whether there is a significant financing component, the Company measures the loss provision based on the expected credit losses throughout the duration.

Accounts receivable/contract assets

Applicable from December 1, 2025

Where there is objective evidence of impairment, as well as other receivable instruments, receivables, other receivables, receivables financing and long-term receivables applicable to individual assessments, separate impairment tests are performed to confirm expected credit losses and prepare individual impairment. For notes receivable, accounts receivable, other receivables, financing of receivables, long-term receivables, and contract assets for which there is no objective evidence of impairment, or when individual financial assets cannot be assessed at a reasonable cost, the Company divides bills receivable, accounts receivable, other receivables, receivable financing, long-term receivables, and contract assets into several combinations based on credit risk characteristics, and calculates expected credit losses on the basis of the combination. The basis for determining the combination is as follows:

The basis for determining the combination of notes receivable is as follows:

Notes Receivable Combination 1 Commercial Acceptance Bill

Notes Receivable Combination 2 Bank Acceptance Bill

For Notes receivable divided into portfolios, the Company refers to historical credit loss experience, combined with current conditions and predictions of future economic conditions, and calculates through default risk exposure and expected credit loss rate within the next 12 months or the entire duration Expected credit losses.

The basis for determining the combination of accounts receivable is as follows:

Accounts Receivable Portfolio 1: Receivables from curtain wall business

Accounts Receivable Portfolio 2: Receivables from platform screen door business

Accounts Receivable Portfolio 3: Receivables from new materials business

Accounts Receivable Portfolio 4: Receivables from new energy business

Accounts Receivable Portfolio 5: Receivables from commercial real estate and others

Other receivable portfolio 6 Receivables from related parties within the scope of consolidation

For the accounts receivable divided into a combination, the Company refers to the historical credit loss experience, combined with the current situation and the forecast of the future economic situation, compiles the account receivable age and the whole expected credit loss rate table, and calculates the expected credit loss.

The basis for determining the combination of other receivables is as follows:

Other receivable portfolio 1 Interest receivable

Portfolio of other receivables 2 Dividends receivable

Other combinations of receivables 3 Deposit and margin receivable

Other receivable portfolio 4 Receivable advances

Combination of other receivables 5 Value-added tax receivable is increased and refunded

Other receivable portfolio 6 Receivables from related parties within the scope of consolidation

Other receivables portfolio 7 Other receivables

For other receivables divided into portfolios, the Company refers to historical credit loss experience, combined with current conditions and predictions of future economic conditions, and calculates through default risk exposure and expected credit loss rate within the next 12 months or the entire duration Expected credit losses.

The basis for determining the combination of receivables financing is as follows:

Receivables financing portfolio 1 bank acceptance bill

For Notes receivable divided into portfolios, the Company refers to historical credit loss experience, combined with current conditions and predictions of future economic conditions, and calculates through default risk exposure and expected credit loss rate within the next 12 months or the entire duration Expected credit losses.

The basis for determining the portfolio of contract assets is as follows:

Contract assets portfolio 1 Completed and unsettled project not meeting collection conditions

Contract assets portfolio 2 Quality guarantee deposit not meeting collection conditions

Contract assets portfolio 3 conditional collection right of sales

For contract assets divided into portfolios, the Company refers to historical credit loss experience, combined with current conditions and predictions of future economic conditions, and calculates through default risk exposure and expected credit loss rate within the next 12 months or the entire duration Expected credit losses.

Applicable on and before November 30, 2025

Where there is objective evidence of impairment, as well as other receivable instruments, receivables, other receivables, receivables financing and long-term receivables applicable to individual assessments, separate impairment tests are performed to confirm expected credit losses and prepare individual impairment. For notes receivable, accounts receivable, other receivables, financing of receivables, long-term receivables, and contract assets for which there is no objective evidence of impairment, or when individual financial assets cannot be assessed at a reasonable cost, the Company divides bills receivable, accounts receivable, other receivables, receivable financing, long-term receivables, and contract assets into several combinations based on credit risk characteristics, and calculates expected credit losses on the basis of the combination. The basis for determining the combination is as follows:

The basis for determining the combination of notes receivable is as follows:

Notes Receivable Combination 1 Commercial Acceptance Bill

Notes Receivable Combination 2 Bank Acceptance Bill

For Notes receivable divided into portfolios, the Company refers to historical credit loss experience, combined with current conditions and predictions of future economic conditions, and calculates through default risk exposure and expected credit loss rate within the next 12 months or the entire duration Expected credit losses.

The basis for determining the combination of accounts receivable is as follows:

Accounts receivable combination 1 Accounts receivable business

Accounts receivable combination 2 Real estate receivable business

Accounts receivable combination 3 Others receivable business

Other receivable portfolio 4 Receivables from related parties within the scope of consolidation

For the accounts receivable divided into a combination, the Company refers to the historical credit loss experience, combined with the current situation and the forecast of the future economic situation, compiles the account receivable age and the whole expected credit loss rate table, and calculates the expected credit loss.

The basis for determining the combination of other receivables is as follows:

Other receivable portfolio 1 Interest receivable

Portfolio of other receivables 2 Dividends receivable

Other combinations of receivables 3 Deposit and margin receivable

Other receivable portfolio 4 Receivable advances

Combination of other receivables 5 Value-added tax receivable is increased and refunded

Other receivable portfolio 6 Receivables from related parties within the scope of consolidation

Other receivables portfolio 7 Other receivables

For other receivables divided into portfolios, the Company refers to historical credit loss experience, combined with current conditions and predictions of future economic conditions, and calculates through default risk exposure and expected credit loss rate within the next 12 months or the entire duration Expected credit losses.

The basis for determining the combination of receivables financing is as follows:

Receivables financing portfolio 1 bank acceptance bill

For Notes receivable divided into portfolios, the Company refers to historical credit loss experience, combined with current conditions and predictions of future economic conditions, and calculates through default risk exposure and expected credit loss rate within the next 12 months or the entire duration Expected credit losses.

The basis for determining the portfolio of contract assets is as follows:

Contract assets portfolio 1 conditional collection right of sales

Contract assets portfolio 2 Completed and unsettled project not meeting collection conditions

Contract assets portfolio 3 Quality guarantee deposit not meeting collection conditions

For contract assets divided into portfolios, the Company refers to historical credit loss experience, combined with current conditions and predictions of future economic conditions, and calculates through default risk exposure and expected credit loss rate within the next 12 months or the entire duration Expected credit losses.

Other debt investment

For other receivables divided into portfolios, the Company refers to historical credit loss experience, combined with current conditions and predictions of future economic conditions, and calculates through default risk exposure and expected credit loss rate within the next 12 months or the entire duration Expected credit losses.

② Lower credit risk

If the risk of default on financial instruments is low, the borrower's ability to meet its contractual cash flow obligations in the short term is strong, and even if the economic situation and operating environment are adversely changed over a long period of time, it may not necessarily reduce the receivables' performance of their contractual cash. The ability of the flow obligation, the financial instrument is considered to have a lower credit risk.

③ Significant increase in credit risk

The Company compares the default probability of the financial instrument during the expected lifetime determined by the balance sheet date with the default probability of the expected lifetime during the initial confirmation to determine the relative probability of the default probability of the financial instrument during the expected lifetime Changes to assess whether the credit risk of financial instruments has increased significantly since initial recognition.

In determining whether the credit risk has increased significantly since the initial recognition, the Company considers reasonable and evidenced information, including forward-looking information, that can be obtained without unnecessary additional costs or effort. The information considered by the Company includes:

A. Significant changes in internal price indicators resulting from changes in credit risk;

B. Adverse changes in business, financial or economic conditions that are expected to cause significant changes in the debtor's ability to perform its debt service obligations;

C. Whether the actual or expected operating results of the debtor have changed significantly; whether the regulatory, economic or technical environment of the debtor has undergone significant adverse changes;

D. Whether there is a significant change in the value of the collateral used as debt collateral or the guarantee provided by a third party or the quality of credit enhancement. These changes are expected to reduce the debtor's economic motivation for repayment within the time limit specified in the contract or affect the probability of default;

E. Whether there is a significant change in the economic motivation that is expected to reduce the debtor's repayment according to the contractual deadline;

F. Anticipated changes to the loan contract, including whether the expected violation of the contract may result in the exemption or revision of contract obligations, granting interest-free periods, rising interest rates, requiring additional collateral or guarantees, or making other changes to the contractual framework of financial instruments change;

G. Whether the expected performance and repayment behavior of the debtor has changed significantly;

H. Whether the contract payment is overdue for more than (including) 30 days.

Based on the nature of financial instruments, the Company assesses whether credit risk has increased significantly on the basis of a single financial instrument or combination of financial instruments. When conducting an assessment based on a combination of financial instruments, the Company can classify financial instruments based on common credit risk characteristics, such as overdue information and credit risk ratings.

If the overdue period exceeds 30 days, the Company has determined that the credit risk of financial instruments has increased significantly. Unless the Company does not have to pay excessive costs or efforts to obtain reasonable and warranted information, it proves that although it has exceeded the time limit of 30 days agreed upon in the Contract, credit risks have not increased significantly since the initial confirmation.

④ Financial assets with credit impairment

The Company assesses on the balance sheet date whether financial assets measured at amortized cost and credit investments measured at fair value and whose changes are included in other comprehensive income have undergone credit impairment. When one or more events that adversely affect the expected future cash flows of a financial asset occur, the financial asset becomes a financial asset that has suffered a credit impairment. Evidence that credit impairment has occurred in financial assets includes the following observable information:

Major financial difficulties have occurred to the issuer or the debtor; Breach of contract by the debtor, such as payment of interest or default or overdue of principal; (B) The concession that the debtor would not make under any other circumstances for economic or contractual considerations relating to the financial difficulties of the debtor; The debtor is likely to be bankrupt or undertake other financial restructuring; The financial difficulties of the issuer or debtor lead to the disappearance of the active market for the financial asset; To purchase or generate a financial asset at a substantial discount, which reflects the fact that a credit loss has occurred.

⑤ Presentation of expected credit loss measurement

In order to reflect the changes in the credit risk of financial instruments since the initial recognition, the Company remeasures the expected credit losses on each balance sheet date, and the increase or reversal of the loss provision resulting therefrom is included as an impairment loss or gain. Current profit and loss. For financial assets measured at amortized cost, the loss allowance offsets the book value of the financial asset listed on the balance sheet; for debt investments measured at fair value and whose changes are included in other comprehensive income, the Company Recognition of its loss provisions in gains does not offset the book value of the financial asset.

⑥ Canceled

If it is no longer reasonably expected that the contract cash flow of the financial assets will be fully or partially recovered, the book balance of the financial assets will be directly reduced. Such write-off constitutes the derecognization of related financial assets. This usually occurs when the Company determines that the debtor has no assets or sources of income that generate sufficient cash flow to cover the amount that will be written down.

If the financial assets that have been written down are recovered in the future, the reversal of the impairment loss is included in the profit or loss of the current period.

(6) Transfer of financial assets

The transfer of financial assets refers to the following two situations:

A. Transfer the contractual right to receive cash flow of financial assets to another party;

B. Transfers the financial assets to the other party in whole or in part, but reserves the contractual right to collect the cash flow of the financial assets and undertakes the contractual obligation to pay the collected cash flow to one or more recipients.

① De-identification of transferred financial assets

Those who have transferred almost all risks and rewards in the ownership of financial assets to the transferee, or have neither transferred nor retained almost all the risks and rewards in the ownership of financial assets, but have given up control of the financial assets, terminate the confirmation The financial asset.

In determining whether control over the transferred financial asset has been waived, the actual capacity of the transferor to sell the financial asset is determined. If the transferor is able to sell the transferred financial assets wholly to a third party that does not have a relationship with them, and has no additional conditions to limit the sale, it indicates the Company has waived control over the financial assets.

The Company pays attention to the essence of financial asset transfer when judging whether financial asset transfer meets the condition of financial asset termination.

If the overall transfer of financial assets meets the conditions for termination of confirmation, the difference between th following two amounts is included in the current profit and loss:

A. Continuing identification of transferred Book value；

B. The sum of the amount received as a result of the transfer and the amount accrued as a result of the change in the fair value of the transfer in respect of the termination recognized portion of the amount previously charged directly to the other consolidated proceeds (the financial assets involved in the transfer are those classified in accordance with Article 18 of Enterprise Accounting Standard No. 22 - Financial Instruments Recognition and Measurement as measured by the fair value and whose change is charged to the other consolidated proceeds).

If the partial transfer of financial assets meets the conditions for derecognization, the book value of the entire transferred financial assets will be included in the derecognized part and the unterminated part (in this case, the retained service assets are regarded as part of the continued recognition of financial assets) Between them, they are apportioned according to their respective relative fair values on the transfer date, and the difference between the following two amounts is included in the current profit and loss:

A. Termination of the book value of the recognized portion on the date of derecognization;

B. The sum of the amount received as a result of the transfer and the amount accrued as a result of the change in the fair value of the transfer in respect of the termination recognized portion of the amount previously charged to the other consolidated

proceeds (the financial assets involved in the transfer are those classified in accordance with Article 18 of Enterprise Accounting Standard No. 22 - Financial Instruments Recognition and Measurement as measured by the fair value and whose change is charged to the other consolidated proceeds).

② Continue to be involved in the transferred financial assets

If neither transfer nor retain almost all the risks and rewards of the ownership of financial assets, and have not given up control of the financial assets, the relevant financial assets should be confirmed according to the extent of their continued involvement in the transferred financial assets, and the relevant liabilities should be recognized accordingly.

The extent to which the transferred financial assets continue to be involved refers to the extent to which the enterprise undertakes the risk or compensation of the value change of the transferred financial assets.

(III) Continuing identification of transferred financial assets

Where almost all risks and remuneration in relation to ownership of the transferred financial assets are retained, the whole of the transferred financial assets shall continue to be recognized and the consideration received shall be recognized as a financia liability.

The financial asset and the recognized related financial liabilities shall not offset each other. In the subsequent accounting period, the enterprise shall continue to recognize the income (or gain) generated by the financial asset and the costs (or losses) incurred by the financial liability.

(7) Deduction of financial assets and liabilities

Financial assets and financial liabilities should be listed separately in the balance sheet, and cannot be offset against each other. However, if the following conditions are met, the net amount offset by each other is listed in the balance sheet:

The Company has a statutory right to offset the confirmed amount, and such legal right is currently enforceable;

The Company plans to settle the net assets or realize the financial assets and liquidate the financial liabilities at the same time.

The transferring party shall not offset the transferred financial assets and related liabilities if it does not meet the conditions for terminating the recognition.

(8) Recognition of fair value of Finance instruments

For the method for determining the fair value of financial assets and financial liabilities, see 34 (2) in Chapter VIII, V. Important accounting policies and accounting estimates.

12. Notes receivable

See Chapter VIII, V, Important Accounting Policies and Accounting Estimates 11. Financial Tools.

13. Account receivable

See Chapter VIII, V, Important Accounting Policies and Accounting Estimates 11. Financial Tools.

The Company needs to comply with the disclosure requirements of the decoration and decoration industry in the Guidelines for the Self-discipline and Supervision ofListed Companies ofShenzhen Stock Exchange No. 3 - Industry Information Disclosure.

14. Receivable financing

See Chapter VIII, V, Important Accounting Policies and Accounting Estimates 11. Financial Tools.

15. Other receivables

See Chapter VIII, V, Important Accounting Policies and Accounting Estimates 11. Financial Tools.

16. Contract assets

The Company presents contract assets or liabilities in the balance sheet according to the relationship between performance obligation and customer payment. The consideration for which the Company is entitled to receive (subject to factors other than the passage of time) for the transfer of goods or the provision of services to customers is listed as contract assets. The Company's obligation to transfer goods or provide services to customers for consideration received or receivable from customers is listed as contractual liabilities.

Contract assets and contract liabilities are listed separately in the balance sheet. Contract assets and contract liabilities unde the same contract are listed in net amount. If the net amount is the debit balance, it shall be listed in "contract assets" or "othe non-current assets" according to its liquidity; if the net amount is the credit balance, it shall be listed in "contract liabilities" or "other noncurrent liabilities" according to its liquidity. Contract assets and contract liabilities under different contracts cannot offset each other.

For the determination method and accounting treatment method of the Company's expected credit loss of contract assets, see 11. Financial instruments in Chapter VIII, V. Important accounting policies and accounting estimates.

17. Inventories

(1) Classification of inventories

Inventories refer to finished goods or merchandise held for sale in the ordinary course of business, work-in-process, and materials and supplies consumed in the production process or during the rendering of services, including raw materials, work-inprocess, semi-finished goods, finished goods, merchandise inventories, and reusable materials.

(2) Pricing of delivering inventory

The Company measures inventories issued using the weighted average cost method.

The inventory of real estate business mainly includes inventory materials, development costs, development products, etc. The actual costs of development products include land transfer payment, infrastructure and facility costs, installation engineering costs, borrows before completion of the development and other costs during the development process. The special maintenance funds collected in the first period are included in the development overheads. When the control right of development products is transferred, the individual valuation method is used to determine its actual cost.

(3) Inventory system

The Company inventory adopts the perpetual inventory system, counting at least once a year, the inventory profit and loss amount is included in the current year's profit and loss.

(4) Criteria for recognizing and providing for provision for decline in value of inventories

On the balance sheet date, inventories are accounted depending on which is lower between the cost and the net realizable value. If the cost is higher than the net realizable value, the impairment provision will be made.

The realizable net value of inventory should be recognized based on solid evidence with the purpose of the inventory and after-balance-sheet-date events taken into consideration.

(1) In the course of normal production and operation, the net realizable value of finished goods, commodities and materials directly used for sale shall be determined by the estimated price of the inventory minus the estimated cost of sale and related taxes. The inventory held for the execution of a sales contract or a labor contract shall be measured on the basis of the contract price as its net realizable value; If the quantity held is greater than the quantity ordered under the sales contract, the net realizable value of the excess inventory is measured on the basis of the general sales price. For materials used for sale, the market price shall be used as the measurement basis for the net realizable value.

②In the normal production and operation process, the inventory of materials that need to be processed is determined by the amount of the estimated selling price of the finished product minus the estimated cost to be incurred at the time of completion, estimated sales expenses and related taxes Realize the net value. If the net realizable value of the finished product produced by it is higher than the cost, the material is measured at cost; If the decrease in the price of the material indicates that the net realizable value of the finished product is lower than the cost, the material is measured as the net realizable value and the inventory is prepared for a decrease based on its difference.

③ If the factors affecting the previous write-down of inventory value have disappeared on the balance sheet date, the amount of the write-down will be restored and transferred back within the amount of inventory depreciation reserve that has been accrued, and the amount returned will be included in the current profit and loss.

(5) Methods of amortization of swing materials

① Low-value consumables are amortized on on-off amortization basis at using.

② Packages are amortized on on-off amortization basis at using.

18. Long-term share equity investment

The Group's long-term equity investment includes control on invested entities and significant impacts on equity investment. Invested entities on which the Group has significant impacts are associates of the Group.

(1) Basis for recognition of common control and major influence on invested entities

Common control refers to the common control of an arrangement in accordance with the relevant agreement, and the relevant activities of the arrangement must be agreed upon by the participants who share control. In determining whether there is common control, the first step is to determine whether all or a group of participants collectively control the arrangement, which is

considered collective control by all or a group of participants if all or a group of participants must act together to determine the activities associated with the arrangement. Secondly, it is judged whether the decision on related activities of the arrangement must be agreed by the participants who collectively control the arrangement. If there is a combination of two or more parties that can collectively control an arrangement, it does not constitute joint control. When judging whether there is joint control, the protective rights enjoyed are not considered.

Major influence refers to the power to participate in decision-making of financial and operation policies of a company, but cannot control or jointly control the making of the policies. When considering whether the Company can impose significant impacts on the invested entity, impacts of conversion of shares with voting rights held directly or indirectly by the investor and voting rights that can be executed in this period held by the investor and other party into shares of the invested entity should be considered.

If the Company directly or through subsidiaries holds more than 20% (inclusive) but less than 50% of the shares with voting rights of the invested entity, unless there is clear evidence proving that the Company cannot participate the decision-making of production and operation of the invested entity, the Company has major influence on the invested entity.

(2) Recognition of initial investment costs

Long-term equity investments formed by merger of enterprises shall be determined in accordance with the following provisions:

A. In the case of an enterprise merger under the same control, where the merging party makes a valuation of the merger by payment of cash, transfer of non-cash assets or undertaking liabilities, the share of the book value of the owner's interest in the final controlling party's consolidated financial statements as the initial investment cost of the long-term equity investment at the date of the merger. The difference between the initial investment cost of long-term equity investment and the cash paid, the transferred non-cash assets and the book value of the debt assumed shall be adjusted to the capital reserve; if the capital reserve is insufficient to offset, the retained earnings shall be adjusted;

Long-term equity investment generated by enterprise merger: for long-term equity investment obtained by merger of enterprises under common control, the obtained share of book value of the interests of the merged party's owner in the consolidate financial statements on the merger date is costs; for long-term equity investment obtained by merger of enterprises not under common control, the merger cost is the investment cost. Adjust the capital reserve according to the difference between the initia investment cost of long-term equity investment and the total face value of the issued shares. If the capital reserve is insufficient to offset or reduce, the retained income shall be adjusted;

For merger of entities under different control, the merger cost is the fair value of the asset paid, liability undertaken, and equity securities issued for exchanging of control power over the entities at the day of acquisition. Agency expenses and other administrative expenses such as auditing, legal consulting, or appraisal services occurred relating to the merger of entities are accounted into current income account when occurred.

Long-term equity investments formed by merger of enterprises shall be determined in accordance with the following provisions:

For long-term equity investment obtained by cash, the actually paid consideration is the initial investment cost. Initial investment costs include expenses, taxes and other necessary expenditures directly related to the acquisition of long-term equity investments;

B. Long-term equity investments acquired from the issuance of interest securities are the initial investment costs based on the fair value of the issue interest securities;

C. For long-term equity investments obtained through non-monetary asset exchanges, if the exchange has commercial substance and the fair value of the exchanged assets or exchanged assets can be reliably measured, the fair value of the exchanged assets and relevant taxes shall be used as the initial Investment cost, the difference between the fair value and book value of the swapped-out asset is included in the current profit and loss; if the non-monetary asset exchange does not meet the above two conditions at the same time, the book value of the swapped-out asset and relevant taxes will be used as the initial investment cost.

D. Long-term equity investments acquired through debt restructuring determine their recorded value at the fair value of the waived claims and other costs such as taxes directly attributable to the assets and account for the difference between the fair value and the book value of the waived claims.

(3) Subsequent measurement and recognition of gain/loss

The Company uses the cost method to measure long-term share equity investment in which the Company can control the invested entity; and uses the equity method to measure long-term share equity investment in which the Company has substantial influence on the invested entity.

① Cost

For the long-term equity investment measured on the cost basis, except for the announced cash dividend or profit included in the practical cost or price when the investment was made, the cash dividends or profit distributed by the invested entity are recognized as investment gains in the current gain/loss account.

Equity

Gains from long-term equity investment measured by equity

When the equity method is used to measure long-term equity investment, the investment cost will not be adjusted if the investment cost of the long-term equity investment is larger than the share of fair value of the recognizable assets of the invested entity. When it is smaller than the share of fair value of the recognizable assets of the invested entity, the book value will be adjusted and the difference is included in the current gains of the investment.

When the equity method is used, the current investment gain is the share of the net gain realized in the current year that can be shared or borne, recognized as investment gain and other misc. income. The book value of the long-term equity investment is adjusted accordingly. The book value of the long-term equity investment should be accordingly decreased based on the share of profit or cash dividend announced by the invested entity; according to other changes in the owner's equity except for net profit and loss, other misc income and profit distribution of the invested entity, adjust the book value of the long-term equity investment and record it in the capital surplus (other capital surplus). When the share of the net gains that can be enjoyed is recognized, it is recognized after the net profit of the invested entity is adjusted based on the fair value of the recognizable assets of the invested entity according to the Company's accounting policies and accounting period. Where the accounting policy and accounting period adopted by the Invested unit are inconsistent with the Company, the financial statements of the Invested unit shall be adjusted in accordance with the accounting policy and accounting period of the Company, and the investment income and other consolidated income shall be recognized. Internal transaction gains not realized between the Company and affiliates is measured according to the shareholding proportion and the investment gains is recognized after deduction. The unrealized internal transaction loss between the Company and the invested entity is the impairment loss of transferred assets and should not be written off.

Where substantial influence on invested entities is imposed or joint control is implemented due to increase in investment, the sum of the fair value of the original equity and increased investment on the conversion date is the initial investment cost under the equity method. If the equity investment originally held is classified as other equity instrument investment, the difference between the fair value and the book value, as well as the accumulated gains or losses originally included in other comprehensive income, shall be transferred out of other comprehensive income and included in retained income in the current period when the equity method is adopted.

Where joint control or substantial influence on invested entities is lost due to disposal of part of investment, the remaining equity after the disposal should be treated according to the Enterprise Accounting Standard No.22 – Recognition and Measurement of Financial Instruments from the date of losing the joint control or substantial influence. The difference between the fair value and book value should be accounted the profit and loss of the current period. For other misc. incomes of original share equity investment determined using the equity method, when the equity method is no longer used, it should be treated based on the same basis of the treatment of related assets or liability of the invested entities; the other owners' interests related to the original share equity investment should be transferred to gain/loss of the current period.

(4) Equity investment held for sale

For the remaining equity investments not classified as assets held for sale, the equity method is adopted for accounting treatment.

Equity investments classified as held for sale to associates that are no longer eligible to hold classified assets for sale are retrospectively adjusted using the equity method starting from the date that they are classified as held for sale. The classification is adjusted to hold the financial statements for the period to be sold.

(5) Impairment examination and providing of impairment provision

For investments in subsidiaries, associates and joint ventures, the method of accruing asset impairment is shown in 24. Long term asset impairment in Chapter VIII, V. Important accounting policies and accounting estimates.

19. Investment real estates

(1) Classification of investment real estate

Investment real estates are held for rent or capital appreciation, or both. These include, inter alia:

① Leased land using right

(2) the right to use the land that is transferred after holding and preparing for the increment.

③ Leased building

(2) Measurement of investment real estate

For investment real estates with an active real estate transaction market and the Company can obtain market price and other information of same or similar real estates to reasonably estimate the investment real estates' fair value, the Company will use the fair value mode to measure the investment real estate subsequently. Variations in fair value are accounted into the current gain/loss account.

The fair value of investment real estate is determined with reference to the current market prices of same or similar real estates in active markets; when no such price is available, with reference to the recent transaction prices and consideration of factors including transaction background, date and district to reasonably estimate the fair value; or based on the estimated lease gains and present value of related cash flows.

For investment real estate under construction (including investment real estate under construction for the first time), if the fair value cannot be reliably determined but the expected fair value of the real estate after completion is continuously and reliabl obtained, the investment real estate under construction is measured by cost. When the fair value can be measured reliably or after completion (the earlier one), it is measured at fair value. For an investment real estate whose fair value is proven unable to be obtained continuously and reliably by objective evidence, the real estate will be measured at cost basis until it is disposed and no residual value remains as assumed.

20. Fixed assets

(1) Recognition conditions

Fixed assets are recognized at the actual cost of acquisition when the following conditions are met: (1) The economic benefits associated with the fixed assets are likely to flow into the enterprise.

Fixed assets are recognized at the actual cost of acquisition when the following conditions are met: (1) The economic benefits associated with the fixed assets are likely to flow into the enterprise.

② The cost of the fixed assets can be measured reliably.

Overhaul cost generated by regular examination on fixed assets is recognized as fixed assets costs when there is evidence proving that it meets fix assets recognition conditions. If not, it will be accounted into the current gain/loss account.

(2) Depreciation method

21. Construction in process

(1) Construction in progress is accounted for by project classification.

(2) Standard and timing for transferring construction in process into fixed assets

The full expenditure incurred on the construction-in-progress project as a fixed asset is recorded as the value of the asset before the asset is constructed to the intended usable state. This includes construction costs, the original cost of equipment, other necessary expenditures incurred in order to enable the construction works to reach the intended usable status and the borrowing costs incurred for the specific borrowing of the project and the general borrowing expenses incurred before the assets reach the intended usable status. Construction in process will be transferred to fixed assets when it reaches the preset service condition. The fixed assets that have reached the intended usable state but have not been completed shall be transferred to the fixed assets according to the estimated value according to the estimated value according to the estimated value according to the project budget, cost or actual project cost, etc. The depreciation of the fixed assets shall be accrued according to the Company's fixed assets depreciation policy. The original estimated value shall be adjusted according to the actual cost after the completion.

22. Borrowing Costs

(1) Recognition principles for capitalization of borrowing expenses

Borrowing expenses occurred to the Company that can be accounted as purchasing or production of asset satisfying the conditions of capitalizing, are capitalized and accounted as cost of related asset.

(1) Asset expenditure has occurred;

② The borrowing expense has already occurred;

③ Purchasing or production activity, which is necessary for the asset to reach the useful status, has already started.

Other interest on loans, discounts or premiums and exchange differences are included in the income and loss incurred in the current period.

If the construction or production of assets satisfying the capitalizing conditions is suspended abnormally for over 3 months, capitalizing of borrowing expenses shall be suspended. During the normal suspension period, borrowing expenses will be capitalized continuously.

When the asset satisfying the capitalizing conditions has reached its usable or sellable status, capitalizing of borrowing expenses shall be terminated.

(2) Calculation of the capitalization amount of borrowing expense

Interest expenses generated by special borrowings less the interests income obtained from the deposit of unused borrowings or investment gains from temporary investment is capitalized; the capitalization amount for general borrowing is determined based on the capitalization rate which is the exceeding part of the accumulative assets expense over weighted average of the assets expense of the special borrowing/used general borrowing.

If the assets that are constructed or produced under the condition of capitalization occupy the general borrowing, the interest amount to be capitalized in the general borrowing shall be calculated and determined by multiplying the capital rate of the general borrowing by the weighted average of the asset expenditure of the accumulated assets whose expenditure exceeds that of the specialized borrowing. The capitalization ratio is the weighted average interest rate of general borrowings.

23. Intangible assets

(1) Amortization of intangible assets

① Useful life of intangible assets with limited useful life

At the end of each year, the Company will reexamine the useful life and amortization basis of intangible assets with limited useful life. Upon review, the service life and amortization methods of intangible assets at the end of the period are not different from those previously estimated.

(2) Intangible assets which cannot be foreseeable to bring economic benefits to enterprises shall be regarded as intangible assets whose useful life is uncertain. For intangible assets with uncertain service life, the Company reviews the service life of intangible assets with uncertain service life at the end of each year. If it is still uncertain after rechecking, it shall conduct an impairment test on the balance sheet date.

③ Amortization of intangible assets

For intangible assets with finite useful lives, the Company determines their useful life upon acquisition and systematically amortizes them using the straight-line method over their useful life. The amortization amount is included in the current profit or loss of the benefiting project or added to the cost of the related asset. The specific amortization amount is the amount after the cost is deducted from the estimated residual value. For fixed assets for which depreciation provision is made, the depreciation rate will be determined after the accumulative depreciation provision amount is deducted. The residual value of an intangible asset with limited useful life is treated as zero, except where a third party undertakes to purchase the intangible asset at the end of its useful life or to obtain expected residual value information based on the active market, which is likely to exist at the end of its useful life.

Intangible assets with uncertain service life will not be amortized. At the end of each year, the useful life of intangible assets with uncertain useful life is reviewed, and if there is evidence that the useful life of intangible assets is limited, the useful life is estimated and the system is reasonably amortized within the expected useful life.

(2) Scope of R&D expenditures and related accounting treatment

Specific standard for distinguish between research and development stage

① The Company takes the information and related preparatory activities for further development activities as the research stage, and the intangible assets expenditure in the research stage is included in the current profit and loss period.

② The development activities carried out after the Company has completed the research stage as the development stage.

Specific conditions for capitalization of expenditures in the development phase

Expenditures in the development phase can be recognized as intangible assets only when the following conditions are met:

A. It is technically feasible to complete the intangible asset so that it can be used or sold;

B. Have the intention to complete the intangible asset and use or sell it;

C. The way intangible assets generate economic benefits, including the ability to prove that the products produced by the intangible assets exist in the market or the intangible assets themselves exist in the market, and the intangible assets will be used internally, which can prove their usefulness;

D. Have sufficient technical, financial and other resource support to complete the development of the intangible asset, and have the ability to use or sell the intangible asset;

E. The expenditure attributable to the development stage of the intangible asset can be reliably measured.

24. Assets impairment

The Group uses the cost mode to continue measuring the assets impairment to investment real estate, fixed assets construction in progress, intangible assets and goodwill (except for the inventories, investment real estate measured by the fair value mode, deferred income tax assets and financial assets). The method is determined as follows:

The Company judges whether there is a sign of impairment to assets on the balance sheet day. If such sign exists, the Company estimates the recoverable amount and conducts the impairment test. Impairment test is conducted annually for goodwill generated by mergers and intangible assets that have not reached the useful condition no matter whether the impairment sign exists

The recoverable amount is determined by the higher of the net of fair value minus disposal expense and the present value of the predicted future cash flow. The Company estimates the recoverable amount on the individual asset item basis; whether it is hard to estimate the recoverable amount on the individual asset item basis, determine the recoverable amount based on the asset group that the assets belong to. The assets group is determined by whether the main cash flow generated by the Group is independent from those generated by other assets or assets groups.

When the recoverable amount of the assets or assets group is lower than its book value, the Company writes down the book value to the recoverable amount, the write-down amount is accounted into the current income account and the assets impairmen provision is made.

For goodwill impairment test, the book value of goodwill generated by mergers is amortized through reasonable measures since the purchase day to related asset groups; those cannot be amortized to related assets groups are amortized to related combination of asset groups. The related asset groups or combination of asset groups refer to those that can benefit from the synergistic effect of mergers and must not exceed to the reporting range determined by the Company.

When the impairment test is conducted, if there is sign of impairment to the asset group or combination of asset groups related to goodwill, first perform impair test for asset group or combination of asset groups without goodwill and calculate the recoverable amount and recognize the related impairment loss. Then conduct impairment test on those with goodwill, compare the book value with recoverable amount. If the recoverable amount is lower than the book value, recognize the impairment loss of the goodwill.

Once recognized, the asset impairment loss cannot be written back in subsequent accounting period.

25. Long-term amortizable expenses

The long-term deferred expenses shall be used to calculate the expenses that have occurred but should be borne by the Company in the current and subsequent periods with an amortization period of more than one year. The Company's long-term deferred expenses are amortized averagely during the benefit period.

26. Contract liabilities

See 16. Contract assets in Chapter VIII, V. Important Accounting Policies and Accounting Estimates for details.

27. Staff remuneration

(1) Accounting of operational leasing

① Basic salary of employees (salary, bonus, allowance, subsidy)

In the accounting period for which the staff and workers provide services, the Company shall confirm the actual short-term remuneration as liabilities and shall account for the current income and loss, except as required or permitted by other accounting standards.

② Employee welfare

The employee benefits incurred by the Company shall be included in the current profit and loss or related asset costs according to the actual amount incurred. Where the employee's benefit is non-monetary, it shall be measured on the basis of fair value.

③ Social insurance premiums and housing accumulation funds such as health insurance premiums, work injury premiums, birth insurance premiums, trade union funds and staff and education funds

The Company pays the medical insurance premiums, work injury insurance premiums, birth insurance premiums, etc. social insurance premiums and housing accumulation funds for the staff and workers, as well as the union funds and the staff and workers education funds according to the regulations, in the accounting period for which the staff and workers provide services, the corresponding salary amount of the staff and workers, and confirms the corresponding liabilities, which are included in the current profit and loss or related asset costs.

④ Short-term paid leave

The Company accumulates the salary of the employees who are absent from work with pay when the employees provide service, thus increasing their future right of absence with pay. The Company confirms the salary of the employee related to the absence of non-cumulative salary during the actual absence accounting period.

⑤ Short-term profit share program

If the profit-sharing plan meets the following conditions at the same time, the Company shall confirm the salary payable to the staff and workers:

A. The legal or presumptive obligation of the enterprise to pay the remuneration of its employees as a result of past matters;

B. The amount of employee compensation obligations due to the profit sharing plan can be reliably estimated.

(2) Accounting of post-employment welfare

The Company's post-employment benefit plan is defined contribution plan. Defined contribution plans include basic endowment insurance, unemployment insurance, etc. During the accounting period when employees provide services for them, the Company shall recognize the deposit amount calculated according to the defined deposit plan as liabilities and include it in the current profits and losses or related asset costs.

(3) Accounting of dismiss welfare

If the Company provides termination benefits to employees, the employee compensation liabilities arising from the termination benefits shall be recognized at the earliest of the following two and shall be included in the current profit and loss:

① An enterprise may not unilaterally withdraw the resignation benefits provided for by the dismissal plan or reduction proposal;

② When the enterprise recognizes the costs or expenses related to the reorganization involving the payment of resignation benefits.

28. Anticipated liabilities

(1) Recognition standards of anticipated liabilities

When responsibilities occurred in connection to contingent issues, and all of the following conditions are satisfied, they are recognized as expectable liability in the balance sheet:

① This responsibility is a current responsibility undertaken by the Company;

② Execution of this responsibility may cause financial benefit outflow from the Company;

③ Amount of the liability can be reliably measured.

(2) Measurement of anticipated liabilities

Expected liabilities are initially measured at the best estimation on the expenses to exercise the current responsibility, and with considerations to the relative risks, uncertainty, and periodic value of currency. On each balance sheet date, review the book value of the estimated liabilities. Where there is conclusive evidence that the book value does not reflect the current best estimate, the book value is adjusted to the current best estimate.

29. Revenue

Disclosure of accounting policies adopted for revenue recognition and measurement by business type

(1) General principles

Income is the total inflow of economic benefits formed in the daily activities of the Company, which will lead to the increase of shareholders' equity and has nothing to do with the capital invested by shareholders.

The Company has fulfilled the performance obligation in the contract, that is, the revenue is recognized when the customer obtains the control right of relevant goods. To obtain the control right of the relevant commodity means to be able to dominate the use of the commodity and obtain almost all the economic benefits from it.

If there are two or more performance obligations in the contract, the Company will allocate the transaction price to each single performance obligation according to the relative proportion of the separate selling price of the goods or services promised by each single performance obligation on the start date of the contract, and measure the income according to the transaction price allocated to each single performance obligation.

The transaction price refers to the amount of consideration that the Company is expected to be entitled to receive due to the transfer of goods or services to customers, excluding the amount collected on behalf of a third party. When determining the contract transaction price, if there is a variable consideration, the Company shall determine the best estimate of the variable consideration according to the expected value or the most likely amount, and include it in the transaction price with the amount not exceeding the accumulated recognized income when the relevant uncertainty is eliminated, which is most likely not to have a significant reversal. If there is a significant financing component in the contract, the Company will determine the transaction price according to the amount payable in cash when the customer obtains the control right of the commodity. The difference between the transaction price and the contract consideration will be amortized by the effective interest method during the contract period. If the interval between the control right transfer and the customer's payment is less than one year, the Company will not consider the financing component Points.

If one of the following conditions is met, the performance obligation shall be performed within a certain period of time; otherwise, the performance obligation shall be performed at a certain point of time:

① When the customer performs the contract in the Company, he obtains and consumes the economic benefits brought by the Company's performance;

② Customers can control the goods under construction during the performance of the contract;

③ The goods produced by the Company in the process of performance have irreplaceable uses, and the Company has the right to collect money for the performance part that has been completed so far during the whole contract period.

For the performance obligations performed within a certain period of time, the Company shall recognize the revenue according to the performance progress within that period, except that the performance progress cannot be reasonably determined. The Company determines the progress of performance for the provision of services on the basis of the input (or output) method. When the progress of performance cannot be reasonably determined, if the cost incurred by the Company is expected to be compensated, the revenue shall be recognized according to the amount of cost incurred until the progress of performance can be reasonably determined.

For the performance obligation performed at a certain time point, the Company recognizes the revenue at the time point when the customer obtains the control right of relevant goods. In determining whether a customer has acquired control of goods or services, the Company will consider the following signs:

① The Company has the right to receive payment for the goods or services, that is, the customer has the obligation to pay for the goods;

② The Company has transferred the legal ownership of the goods to the customer, that is, the customer has the legal ownership of the goods;

③ The Company has transferred the goods in kind to the customer, that is, the customer has possessed the goods in kind;

④ The Company has transferred the main risks and rewards of the ownership of the goods to the customer, that is, the customer has obtained the main risks and rewards of the ownership of the goods;

⑤ The product has been accepted by the customer.

Sales return clause

For the sales with sales return clauses, when the customer obtains the control right of the relevant goods, the Company shall recognize the revenue according to the amount of consideration it is entitled to obtain due to the transfer of the goods to the customer, and recognize the amount expected to be returned due to the sales return as the estimated liability; at the same time, the Company shall deduct the estimated cost of recovering the goods according to the book value of the expected returned goods at the time of transfer( The balance after deducting the value of the returned goods is recognized as an asset, that is, the cost of return receivable, which is carried forward by deducting the net cost of the above assets according to the book value of the transferred goods at the time of transfer. On each balance sheet date, the Company re estimates the return of future sales and re measures the above assets and liabilities.

Warranty obligations

According to the contract and legal provisions, the Company provides quality assurance for the goods sold and the projects constructed. For the guarantee quality assurance to ensure that the goods sold meet the established standards, the Company conducts accounting treatment in accordance with the accounting standards for Business Enterprises No. 13 - contingencies. For the service quality assurance which provides a separate service in addition to guaranteeing that the goods sold meet the establishe standards, the Company takes it as a single performance obligation, allocates part of the transaction price to the service quality assurance according to the relative proportion of the separate selling price of the goods and service quality assurance, and recognizes the revenue when the customer obtains the service control right. When evaluating whether the quality assurance provides a separate service in addition to assuring customers that the goods sold meet the established standards, the Company considers whether the quality assurance is a statutory requirement, the quality assurance period, and the nature of the Company's commitment to perform the task.

Customer consideration payable

If there is consideration payable to the customer in the contract, unless the consideration is to obtain other clearly distinguishable goods or services from the customer, the Company will offset the transaction price with the consideration payable, and offset the current income at the later time of confirming the relevant income or paying (or promising to pay) the customer's consideration.

Contractual rights not exercised by customers

If the Company advances sales of goods or services to customers, the amount shall be recognized as liabilities first, and then converted into income when relevant performance obligations are fulfilled. When the Company does not need to return the advance payment and the customer may give up all or part of the contract rights, if the Company expects to have the right to obtain the amount related to the contract rights given up by the customer, the above amount shall be recognized as income in proportion according to the mode of the customer exercising the contract rights; otherwise, the Company only has the very low possibility of the customer requiring to perform the remaining performance obligations The relevant balance of the above liabilities is converted into income.

Contract change

When the construction contract between the Company and the customer is changed:

① If the contract change increases the clearly distinguishable construction service and contract price, and the new contract price reflects the separate price of the new construction service, the Company will treat the contract change as a separate contract for accounting;

② If the contract change does not belong to the above-mentioned situation (1), and there is a clear distinction between the transferred construction service and the non-transferred construction service on the date of contract change, the Company will regard it as the termination of the original contract, and at the same time, combine the non-performance part of the original contract and the contract change part into a new contract for accounting treatment;

③ If the contract change does not belong to the above situation (1), and there is no clear distinction between the transferred construction services and the non-transferred construction services on the date of contract change, the Company will take the contract change part as an integral part of the original contract for accounting treatment, and the resulting impact on the recognized income will be adjusted to the current income on the date of contract change.

(2) Specific methods

The specific methods of revenue recognition of the Company are as follows:

① Commodity sales contract

The commodity sales contract between the company and the customer includes the performance obligation of transferring curtain wall materials, screen door materials, electric energy, etc., which belongs to the performance obligation at a certain time point.

Revenue from domestic sales of products is recognized at the time when the customer obtains the right of control of the goods on the basis of comprehensive consideration of the following factors: the Company has delivered the products to the customer according to the contract, the customer has accepted the goods, the payment for goods has been recovered or the receipt has been obtained, and the relevant economic benefits are likely to flow in, the main risks and rewards of the ownership of the goods have been transferred, the legal ownership has been transferred;

The following conditions should be met for the recognition of export product revenue: the Company has declared the product according to the contract, obtained the bill of lading, collected the payment for goods or obtained the receipt certificate, and the relevant economic benefits are likely to flow in, the main risks and rewards of the ownership of goods have been transferred, and the legal ownership of goods has been transferred.

② Service contract

The service contract between the Company and its customers includes the performance obligations of metro platform screen door operation maintenance, curtain wall maintenance and property services. As the Company's performance at the same time, the customers obtain and consume the economic benefits brought by the Company's performance, the Company takes it as the performance obligation within a certain period of time and allocates it equally during the service provision period.

③ Engineering contract

The project contract between the Company and the customer includes the performance obligations of curtain wall project and metro platform screen door project construction. As the customer can control the goods under construction in the process of the Company's performance, the Company takes them as the performance obligations within a certain period of time, and recognizes the income according to the performance progress, except that the performance progress cannot be reasonably determined. The Company determines the performance schedule of providing construction services according to the input method. The performance schedule shall be determined according to the proportion of the actual contract cost to the estimated total contract cost.

④ Real estate sales contract

The income of the Company's real estate development business is recognized when the control of the property is transferred to the customer. The income is recognized when the customer obtains the physical ownership or legal ownership of the completed property and the Company has obtained the current right of collection and is likely to recover the consideration. When confirming the contract transaction price, if the financing component is significant, the Company will adjust the contract commitment consideration according to the financing component of the contract.

(3) Adoption of different business models for the same type of business involving different revenue recognition and measurement methods

There is no difference in revenue recognition due to the adoption of different accounting policies for similar businesses.

30. Contract costs

Contract cost is divided into contract performance cost and contract acquisition cost.

The cost incurred by the Company in performing the contract shall be recognized as an asset when the following condition are met simultaneously:

The cost is directly related to a current or expected contract, including direct labor, direct materials, manufacturing expenses (or similar expenses), clearly borne by the customer, and other costs incurred only due to the contract;

② This cost increases the Company's future resources for fulfilling its performance obligations.

③ The cost is expected to be recovered.

If the incremental cost incurred by the Company to obtain the contract is expected to be recovered, it shall be recognized as an asset as the contract acquisition cost.

The assets related to the contract cost shall be amortized on the same basis as the income from goods or services related to the assets; however, if the amortization period of the contract acquisition cost is less than one year, the Company shall include it in the current profit and loss when it occurs.

If the book value of the assets related to the contract cost is higher than the difference between the following two items, the Company will make provision for impairment for the excess part and recognize it as the loss of asset impairment, and further consider whether the estimated liabilities related to the loss contract should be made:

① The residual consideration expected to be obtained due to the transfer of goods or services related to the asset;

② The estimated cost to be incurred for the transfer of the relevant goods or services.

If the above provision for impairment of assets is subsequently reversed, the book value of the asset after reversal shall not exceed the book value of the asset on the reversal date without provision for impairment.

The contract performance cost recognized as an asset with an amortization period of no more than one year or one normal business cycle at the time of initial recognition shall be listed in the "inventory" item, and the amortization period of no more than one year or one normal business cycle at the time of initial recognition shall be listed in the "other non-current assets" item.

The contract acquisition cost recognized as an asset shall be listed in the item of "other current assets" when the amortization period does not exceed one year or one normal business cycle at the time of initial recognition, and listed in the item of "other noncurrent assets" when the amortization period exceeds one year or one normal business cycle at the time of initial recognition.

31. Government subsidy

(1) Government subsidy

Government subsidies are recognized when the following conditions are met:

① Requirements attached to government subsidies;

② The Company can receive government subsidies.

(2) Government subsidy

When a government subsidy is monetary capital, it is measured at the received or receivable amount. None monetary capital is measured at fair value; if no reliable fair value available, recognized at RMB1.

(3) Recognition of government subsidies

① Assets-related

Government subsidies related to assets are obtained by the Company to purchase, build or formulate in other manners longterm assets; or subsidies related to benefits. If the asset-related government subsidy is recognized as deferred gain, should be recorded in gain and loss in the service life. Government subsidy measured at the nominal amount is accounted into current income account. If the relevant assets are sold, transferred, scrapped or damaged before the end of their useful life, the unallocated relevant deferred income balance shall be transferred to the profit and loss of the current period of disposition of the assets.

Gain-related government subsidy should be accounted as follows:

The Company divides government subsidies into assets-related and earnings-related government subsidies. Gain-related government subsidy should be accounted as follows:

Subsidy that will be used to compensate related future costs or losses should be recognized as deferred gain and recorded in the gain and loss of the current report and offset related cost;

Subsidy that is used to compensate existing cost or loss should be recorded in the gain and loss of the current period or offset related cost.

For government subsidies that include both asset-related and income-related parts, separate different parts for accounting treatment; It is difficult to distinguish between the overall classification of government subsidies related to benefits.

Government subsidy related to routine operations should be recorded in other gains or offset related cost. Governmen subsidy not related to routine operations should be recorded in non-operating income or expense.

③ Policy preferential loan discount

The policy-based preferential loan obtained has interest subsidy. If the government allocates the interest-subsidy funds to the lending bank, the loan amount actually received will be used as the entry value of the loan, and the borrowing cost will be calculated based on the loan principal and policy-based preferential interest rate.

If the government allocates the interest-bearing funds directly to the Group, discount interest will offset the borrowing costs.

④ Government subsidy refund

When a confirmed government subsidy needs to be returned, the book value of the asset is adjusted against the book value of the relevant asset at initial recognition. If there is a related deferred income balance, the book balance of the related deferred income is written off and the excess is credited to the current profit or loss; In other cases, it is directly included in the current profit and loss.

32. Differed income tax assets and differed income tax liabilities

The Company uses the temporary difference between the book value of the assets and liabilities on the balance sheet day and the tax base and the liabilities method to recognize the deferred income tax. 26. Deferred income tax assets and deferred income tax liabilities

(1) Deferred income tax assets

For deductible temporary discrepancies, deductible losses and tax offsets that can be carried forward for future years, the impact on income tax is calculated at the estimated income tax rate for the transfer-back period and the impact is recognized as deferred income tax assets, provided that the Company is likely to obtain future taxable income for deductible temporary discrepancies, deductible losses and tax offsets.

At the same time, the impact on income tax of deductible temporary discrepancies resulting from the initial recognition of assets or liabilities in transactions or matters with the following characteristics is inconclusive as deferred income tax assets:

A. The transaction is not a business combination;

B. the transaction is not a merger and the transaction does not affect the accounting profit or taxable proceeds;

However, for individual transactions that simultaneously meet the above two conditions and result in equal taxable temporary differences and deductible temporary differences upon initial recognition of assets and liabilities, the exemption from initial recognition of deferred tax liabilities and deferred tax assets does not apply. For taxable temporary differences and deductible temporary differences arising from the initial recognition of assets and liabilities in such transactions, the Company recognizes the corresponding deferred tax liabilities and deferred tax assets at the time of the transaction.

In the event of temporary discrepancy of deductible investment related to subsidiaries, joint ventures and joint ventures, and meeting the following two conditions, the amount of impact (talent) on income tax shall be deemed as deferred income tax assets:

A. Temporary discrepancies are likely to be reversed in the foreseeable future;

B. In the future, it is likely to obtain taxable income that can be used to offset the deductible temporary differences;

On the balance sheet date, if there is conclusive evidence that sufficient taxable income is likely to be obtained in the future to offset the deductible temporary differences, the deferred income tax assets that have not been recognized in the previous period are recognized.

On the balance sheet day, the Company re-examines the book value of the deferred income tax assets. If it is unlikely to have adequate taxable proceeds to reduce the benefits of the deferred income tax assets, less the deferred income tax assets' book value. When there are adequate taxable proceeds, the lessened amount will be reversed.

(2) Deferred income tax assets

All provisional differences in taxable income of the Company shall be measured on the basis of the estimated income tax rate for the period of transfer-back and shall be recognized as deferred income tax liabilities, except that:

At the same time, the impact on income tax of deductible temporary discrepancies resulting the initial recognition of assets or liabilities in transactions or matters with the following characteristics is inconclusive as deferred income tax Liabilities:

A. Initial recognition of goodwill;

B. Initial recognition of goodwill, or of assets or liabilities generated in transactions with the following features: the transaction is not a merger and the transaction does not affect the accounting profit or taxable proceeds;

② In the event of temporary discrepancy of deductible investment related to subsidiaries, Joint venture joint ventures, and meeting the two conditions, the amount of impact (talent) on income tax shall be deemed as deferred income tax assets:

A. The Company is able to control the time of temporary discrepancy transfers;

B Temporary discrepancies are likely to be reversed in the foreseeable future;

(3) Deferred income tax assets

(1) Deferred income tax liabilities or assets associated with enterprise consolidation

Temporary difference of taxable tax or deductible temporary difference generated by enterprise merger under non-same control. When deferred income tax liability or deferred income tax asset is recognized, related deferred income tax expense (or income) is usually adjusted as recognized goodwill in enterprise merger.

② Amount of shares paid and accounted as owners' equity

Except for the adjustment goodwill generated by mergers or deferred income tax related to transactions or events directly accounted into the owners' equity, income tax is accounted as income tax expense into the current gain/loss account. The effects of temporary discrepancy on income tax include the following: Other integrated benefits such as fair value change of financial assets available for sale, retroactive adjustment of accounting policy changes or retroactive restatement of accounting error correction discrepancy to adjust the initial retained income, and mixed financial instruments including liabilities and equity.

③ Compensation for losses and tax deductions

A. Compensable losses and tax deductions from the Company's own operations

Deductible losses refer to the losses calculated and determined in accordance with the provisions of the tax law that are allowed to be made up with the taxable income of subsequent years. The uncovered losses (deductible losses) and tax deductions that can be carried forward in accordance with the tax law are treated as deductible temporary differences. When it is expected that sufficient taxable income is likely to be obtained in the future period when it is expected to be available to make up for losses or tax deductions, the corresponding deferred income tax assets are recognized within the limit of the taxable income that is likely to be obtained, while reducing the current period Income tax expense in the income statement.

B. Compensable uncovered losses of the merged company due to business merger

In a business combination, if the Company obtains the deductible temporary difference of the purchased party and does not meet the deferred income tax asset recognition conditions on the purchase date, it shall not be recognized. Within 12 months after the purchase date, if new or further information is obtained indicating that the relevant conditions on the purchase date already exist, and the economic benefits brought about by the temporary difference are expected to be deducted on the purchase date, confirm the relevant delivery. Deferred income tax assets, while reducing goodwill, if the goodwill is not enough to offset, the difference is recognized as the current profit and loss; except for the above circumstances, the deferred tax assets related to the business combination are recognized and included in the current profit and loss.

④Temporary difference caused by merger offset

If there is a temporary difference between the book value of assets and liabilities in the consolidated balance sheet and the taxable basis of the taxpayer due to the offset of the unrealized internal sales gain or loss, the deferred income tax asset or the deferred income tax liability is confirmed in the consolidated balance sheet, and the income tax expense in the consolidated profit statement is adjusted, with the exception of the deferred income tax related to the transaction or event directly included in the owner's equity and the merger of the enterprise.

⑤ Share payment settled by equity

If the tax law provides for allowable per-tax deduction of expenses related to share payment, within the period for which the cost and expense are recognized in accordance with the accounting standards, the Company shall calculate the tax basis and temporary discrepancy based on the estimated per-tax deduction amount at the end of the accounting period and confirm the relevant deferred income tax if it meets the conditions for confirmation. Of these, the amount that can be deducted before tax in the future exceeds the cost related to share payment recognized in accordance with the accounting standards, and the excess income tax shall be directly included in the owner's equity.

⑥ Dividends related to financial instruments classified as equity instruments

For financial instruments classified as equity instruments where the Company is the issuer, any dividend expenditure that is deductible for corporate income tax purposes according to tax policy is recognized for its income tax impact when the dividends payable is recognized. If the distributed profits originate from transactions or events previously affecting profit or loss, the income tax impact of such dividends is included in the current profit or loss. If the distributed profits originate from transactions or events previously recognized in equity, the income tax impact of such dividends is included in equity items.

(4) Basis for presentation of deferred tax assets and deferred tax liabilities on a net basis

The deferred income tax assets and deferred income tax liabilities of the company are presented as a net amount after offsetting when the following conditions are met simultaneously:

① The Company has a legal right to offset current income tax assets and current income tax liabilities on a net basis.

The deferred income tax assets and deferred income tax liabilities are related to income taxes levied by the same tax authorit on the same taxable entity, or are related to income taxes levied by different tax authorities but the significant deferred income tax assets and deferred income tax liabilities will be settled on a net basis for current income taxes or simultaneous acquisition of assets and settlement of liabilities within each future period in which the related taxable entity intends to settle the current income tax assets and liabilities on a net basis.

33. Leasing

(1) Identification of lease

On the commencement date of the contract, the company evaluates whether the contract is a lease or includes a lease. If one party in the contract transfers the right to control the use of one or more identified assets within a certain period in exchange for consideration, the contract is a lease or includes a lease. In order to determine whether the contract transfers the right to control the use of the identified assets within a certain period, the company evaluates whether the customers in the contract have the right to obtain almost all the economic benefits arising from the use of the identified assets during the use period, and have the right to dominate the use of the identified assets during the use period.

(2) Separate identification of lease

If the contract includes multiple separate leases at the same time, the company will split the contract and conduct accounting treatment for each separate lease. If the following conditions are met at the same time, the right to use the identified asset constitute a separate lease in the contract: ① the lessee can profit from using the asset alone or together with other easily available resources; ② The asset is not highly dependent or highly related to other assets in the contract.

(3) Accounting treatment method of the Company as lessee

On the beginning date of the lease term, the Company recognizes the lease with a lease term of no more than 12 months and excluding the purchase option as a short-term lease; When a single leased asset is a brand-new asset, the lease with lower value is recognized as a low value asset lease. If the Company sublets or expects to sublet the leased assets, the original lease is not recognized as a low value asset lease.

For all short-term leases and low value asset leases, the Company will record the lease payment amount into the relevant asset cost or current profit and loss according to the straight-line method (or other systematic and reasonable methods) in each period of the lease term.

In addition to the above short-term leases and low value asset leases with simplified treatment, the Company recognizes the right to use assets and lease liabilities for the lease on the beginning date of the lease term.

① Use right assets

The term "right to use assets" refers to the right of the lessee to use the leased assets during the lease term.

At the beginning of the lease term, the right of use assets is initially measured at cost. This cost includes:

The initial measurement amount of lease liabilities;

For the lease payment paid on or before the beginning of the lease term, if there is lease incentive, the relevant amount of lease incentive enjoyed shall be deducted;

Initial direct expenses incurred by the lessee;

The estimated cost incurred by the lessee for dismantling and removing the leased assets, restoring the site where the leased assets are located or restoring the leased assets to the state agreed in the lease terms. The Company recognizes and measures the cost in accordance with the recognition standards and measurement methods of estimated liabilities. See 28. Estimated liabilities in Chapter VIII, V. important accounting policies and accounting estimates for details. If the above costs are incurred for the production of inventories, they will be included in the cost of inventories.

Depreciation of right of use assets is accrued by using the straight-line method. If it can be reasonably determined that the ownership of the leased asset will be obtained at the expiration of the lease term, the depreciation rate shall be determined according to the asset category of the right to use and the estimated net residual value rate within the expected remaining service life of the leased asset; If it is impossible to reasonably determine that the ownership of the leased asset will be obtained at the expiration of th lease term, the depreciation rate shall be determined according to the asset category of the right of use within the shorter of the lease term and the remaining service life of the leased asset.

② Lease liabilities

The lease liabilities are initially measured Company shall according to the present value of the unpaid lease payments at the beginning of the lease term. The lease payment includes the following five items:

Fixed payment amount and substantial fixed payment amount. If there is lease incentive, the relevant amount of lease incentive shall be deducted;

Variable lease payments depending on index or ratio;

The exercise price of the purchase option, provided that the lessee reasonably determines that the option will be exercised;

The amount to be paid for exercising the option to terminate the lease, provided that the lease term reflects that the lessee will exercise the option to terminate the lease;

The amount expected to be paid according to the residual value of the guarantee provided by the lessee.

When calculating the present value of lease payments, the implicit interest rate of the lease is used as the discount rate. If the implicit interest rate of the lease cannot be determined, the incremental borrowing interest rate of the company is used as the discoun rate. The difference between the lease payment amount and its present value is regarded as unrecognized financing expenses, and the interest expenses are recognized according to the discount rate of the present value of the lease payment amount during each period of the lease term and included in the current profit and loss. The amount of variable lease payments not included in the measurement of lease liabilities shall be included in the current profit and loss when actually incurred.

After the beginning date of the lease term, when the actual fixed payment amount changes, the expected payable amount of the guaranteed residual value changes, the index or ratio used to determine the lease payment amount changes, the evaluation results or actual exercise of the purchase option, renewal option or termination option changes, the Company remeasures the lease liability according to the present value of the changed lease payment amount, And adjust the book value of the right to use assets accordingly

(4) Accounting treatment method of the Company as lessor

On the lease commencement date, the Company classifies leases that have substantially transferred almost all the risks and rewards related to the ownership of the leased assets as financial leases, and all other leases are operating leases.

① Operating lease

The Company recognizes lease receipts as rental income over the lease term on a straight-line basis (or another systematic and rational method). Initial direct costs incurred are capitalized and amortized on the same basis as rental income recognition, with the amortization charged to profit or loss over the relevant periods. The variable lease payments obtained by the Company related to operating leases that are not included in the lease receipts are included in the current profits and losses when actually incurred.

② Finance lease

On the lease beginning date, the Company recognizes the financial lease receivables according to the net amount of the lease investment (the sum of the unsecured residual value and the present value of the lease receipts not received on the lease beginning date discounted according to the lease embedded interest rate), and terminates the recognition of the financial lease assets. During each period of the lease term, the Company calculates and recognizes the interest income according to the interest rate embedded in the lease.

The amount of variable lease payments obtained by the Company that are not included in the measurement of net lease investment shall be included in the current profit and loss when actually incurred.

(5) Accounting treatment of lease change

① Change of lease as a separate lease

If the lease changes and meets the following conditions at the same time, the Company will treat the lease change as a separate lease for accounting: a. the lease change expands the lease scope by increasing the use right of one or more leased assets; B. The increased consideration is equivalent to the amount adjusted according to the conditions of the contract at the separate price for most of the expansion of the lease scope.

② The lease change is not treated as a separate lease

A. The Company as lessee

On the effective date of the lease change, the Company reconfirmed the lease term and discounted the changed lease payment at the revised discount rate to re-measure the lease liability. When calculating the present value of the lease payment after the change, the implicit interest rate of the lease during the remaining lease period shall be used as the discount rate; If it is impossible to determine the implicit interest rate of the lease for the remaining lease period, the incremental loan interest rate on the effective date of the lease change shall be used as the discount rate.

The impact of the above lease liability adjustment shall be accounted for according to the following circumstances:

If the lease scope is reduced or the lease term is shortened due to the lease change, the book value of the right to use assets shall be reduced, and the relevant gains or losses of partial or complete termination of the lease shall be included in the current profits and losses;

For other lease changes, the book value of the right to use assets shall be adjusted accordingly.

The Company as leasor

If the operating lease is changed, the Company will treat it as a new lease for accounting from the effective date of the change, and the amount of lease receipts received in advance or receivable related to the lease before the change is regarded as the amount of new lease receipts.

If the change of financial lease is not accounted for as a separate lease, the Company will deal with the changed lease under the following circumstances: if the change of lease takes effect on the lease commencement date and the lease will be classified as an operating lease, the Company will account for it as a new lease from the effective date of lease change, and take the net lease investment before the effective date of lease change as the book value of leased assets; If the lease change takes effect on the lease commencement date, the lease will be classified as a financial lease, and the Company will conduct accounting treatment in accordance with the provisions on modifying or renegotiating the contract.

(6) Sale and lease-back

The Company assesses and determines whether the asset transfer in the sale and leaseback transaction is a sale in accordance with the provisions of 29. Income in Chapter VIII, V, Important accounting policies and accounting estimates.

① The Company as seller (lessee)

If the asset transfer in the sale and leaseback transaction does not belong to sales, the Company will continue to recognize the transferred assets, recognize a financial liability equal to the transfer income, and conduct accounting treatment for the financial liability in accordance with 11。 Financial instruments in Chapter VIII, V, Important accounting policies and accounting estimates If the asset transfer belongs to sales, the Company measures the right to use assets formed by sale and leaseback according to the part of the book value of the original assets related to the right to use obtained by leaseback, and only recognizes the relevant gains or losses on the rights transferred to the lessor.

② The Company as buyer (lessor)

If the asset transfer in the sale and leaseback transaction does not belong to sales, the company does not recognize the transferred asset, but recognizes a financial asset equal to the transfer income, and carries out accounting treatment on the financial asset in accordance with 11. Financial instruments in Chapter VIII, V. Important accounting policies and accounting estimates. If the asset transfer belongs to sales, the Company shall conduct accounting treatment for asset purchase and asset lease in accordance with other applicable accounting standards for business enterprises

34. Other significant accounting policies and estimates

(1) Accounting of hedging

(1.1) Classification of inventories

The Company divides its hedging strategies into fair value hedges, cash flow hedges, and net investment hedges.

① Fair value hedge. It refers to hedging activities conducted to mitigate the risk of changes in the fair value of recognized assets or liabilities, unrecognized firm commitments, or components of the aforementioned items. The fair value changes are caused by specific risks that will impact the Company's profit or other comprehensive income.

① Cash flow hedging refers to the hedging of cash flow risk. The change in cash flow is derived from specific risks associated with recognized assets or liabilities, expected transactions that are likely to occur, or with respect to the components of the above-mentioned project and will affect the profits and losses of the enterprise.

③ Net investment hedge for overseas operations refers to hedging activities conducted to mitigate the foreign exchange risk exposure of the net investment in overseas operations. The hedged risk in the net investment hedge is the translation difference between the functional currency of the overseas operations and the reporting currency of the parent company.

(1.2) Hedging tools and hedged projects

Hedging means a financial instrument designated by the Company for the purpose of hedging, whose fair value or cash flow variation is expected to offset the fair value or cash flow variation of the hedged item, including:

① Financial liabilities measured at fair value with variations accounted into current income account Check-out options can only be used as a hedging tool if the option is hedged, including those embedded in a hybrid contract. Derivatives embedded in a hybrid contract but not split cannot be used as separate hedging tools.

② Non-derivative financial assets or non-derivative financial liabilities that are measured at fair value and whose changes are included in the current profit and loss, but designated as fair value and whose changes are included in the current profit and loss, and their own credit risk changes caused by changes in fair value except for financial liabilities included in other comprehensive income.

Own equity instruments are not financial assets or financial liabilities and cannot be used as hedging instruments.

A hedged item refers to an item that exposes the Company to the risk of changes in fair value or cash flow and is designated as the hedged object and can be reliably measured. The Company designates the following individual projects, project portfolios or their components as hedged projects:

① Confirmed assets or liabilities.

② Confirmed commitments that have not yet been confirmed. Confirmed commitment refers to a legally binding agreement to exchange a specific amount of resources at an agreed price on a specific date or period in the future.

③ Expected transactions that are likely to occur. Anticipated transactions refer to transactions that have not yet been committed but are expected to occur.

④ Net investment in overseas operations.

The above-mentioned project components refer to the parts that are less than the overall fair value or cash flow changes of the project. The Company designates the following project components or their combinations as hedged items:

① The part of the change in fair value or cash flow (risk component) that is only caused by one or more specific risks in the overall fair value or cash flow changes of the project. According to the assessment in a specific market environment, the risk component should be able to be individually identified and reliably measured. The risk component also includes the part where the fair value or cash flow of the hedged item changes only above or below a specific price or other variables.

② One or more selected contractual cash flows.

③ The component of the nominal amount of the project, that is, the specific part of the whole amount or quantity of the project, may be a certain proportion of the whole project, or may be a certain level of the whole project. If a certain level includes early repayment rights and the fair value of the early repayment rights is affected by changes in the risk of the hedge, the leve

shall not be designated as the hedged item of the fair value hedge, but in the measurement of the hedged item except when the fair value has included the influence of the prepayment right.

(1.3) Evaluation of hedging relationship

When the hedging relationship is initially specified, the Group officially specifies the related hedging relationships with official documents recording the hedging relationships, risk management targets and hedging strategies. This document sets out the hedging tools, hedged items, the nature of hedged risks, and the Company's assessment of hedged effectiveness. Hedging means a financial instrument designated by the Company for the purpose of hedging, whose fair value or cash flow variation is offset the fair value or cash flow variation of the hedged item, including: Such hedges are continuously evaluated on and after the initial specified date to meet the requirements for hedging validity.

If the hedging instrument has expired, been sold, the contract is terminated or exercised (but the extension or replacement as part of the hedging strategy is not treated as expired or contract termination), or the risk management objective changes, resulting in hedging The relationship no longer meets the risk management objectives, or the economic relationship between the hedged item and the hedging instrument no longer exists, or the impact of credit risk begins to dominate in the value changes caused by the economic relationship between the hedged item and the hedging instrument, or when the hedge no longer meets the other conditions of the hedge accounting method, the Company terminates the use of hedge accounting.

If the hedging relationship no longer meets the requirements for hedging effectiveness due to the hedging ratio, but the risk management objective of the designated hedging relationship has not changed, the Company shall rebalance the hedging relationship.

(1.4) Revenue the of revenue recognition and measurement

If the conditions for applying hedge accounting method are met, it shall be handled according to the following methods:

① Fair value hedging

Gains or losses arising from hedging instruments are recognized in the current period's income statement. If the hedging is conducted for specified non-derivative equity investments (or components thereof) measured at fair value with changes in fair value recognized in other comprehensive income, gains or losses from the hedging instruments are recognized in other comprehensive income. Gains or losses arising from the hedged items due to the hedging risk exposure are recognized in the

income statement. At the same time, the carrying amount of the designated hedged items that are not measured at fair value is adjusted. If the hedged item is a specified non-derivative equity investment (or component thereof) measured at fair value with changes in fair value recognized in other comprehensive income, gains or losses resulting from the hedging risk exposure are recognized in other comprehensive income, and the carrying amount of the hedged item has already been measured at fair value and does not require adjustment.

Regarding fair value hedges related to financial instruments (or components thereof) measured at amortized cost, any adjustments made to the carrying amount of the hedged item are amortized using the effective interest rate recalculated from the date of the commencement of amortization and recognized in the income statement. The amortization date for adjustments should begin from the adjustment date and should not be later than the point at which hedging gains and losses are adjusted upon termination of the hedged item. For hedged items that are financial assets (or components thereof) measured at fair value with changes in fair value recognized in other comprehensive income, the accumulated hedging gains or losses should be amortized in the same manner and recognized in the income statement. However, the carrying amount of the financial assets (or components thereof) should not be adjusted.

For hedged items that are unrecognized firm commitments (or components thereof), the cumulative fair value changes caused by the hedging risk after the hedging relationship is designated should be recognized as an asset or liability. The related gains or losses should be recognized in the income statement. When fulfilling a firm commitment and acquiring an asset or assuming a liability, the initial recognized amount of the asset or liability should be adjusted to include the cumulative fair value changes of the designated hedged item that have been recognized.

② Cash flow hedge

The part of hedging tool gains or losses that is valid for hedging is recognized as other comprehensive income as a cash flow hedging reserve, and the part that is invalid for hedging (that is, other gains or losses after deducting other comprehensive income), are counted Into the current profit and loss. The amount of cash flow hedging reserve is determined according to the lower of the absolute amounts of the following two items: ①accumulated gains or losses of hedging instruments since the hedging. The amount in the effective arbitrage is recognized by the accumulative gains or losses from the starting of arbitrage and accumulative changes to the current value of future forecast cash flows from the start of arbitrage.

If the expected transaction of the hedged asset is subsequently recognized as a non-financial asset or non-financial liability, or if the expected transaction of the non-financial asset or non-financial liability forms a defined commitment to the applicable fair

value hedge accounting, the amount of the cash flow hedge reserve originally recognized in the other consolidated income is transferred out to account for the initial recognized amount of the asset or liability. For the remaining cash flow hedges, during the same period when the expected cash flow to be hedged affects the profit and loss, if the expected sales occur, the cash flow hedge reserve recognized in other comprehensive income is transferred out and included in the current profit and loss.

③ Net investment in overseas operations hedge

For hedging of foreign operation net investments, the portion of gains or losses from the hedging instruments that qualify as effective hedges is directly recognized in other comprehensive income. The portion of gains or losses from the hedging instruments that do not qualify as effective hedges is recognized in the income statement. Upon disposal of the foreign operation, the previously recognized gains or losses from the hedging instruments reflected in other comprehensive income are reclassified to the income statement.

(2) Measurement of Fair Value

Fair value refers to the amount of asset exchange or liabilities settlement by both transaction parties familiar with the situation in a fair deal on a voluntary basis.

The Company measures the fair value of related assets or liabilities at the prices in the main market. If there is no major market, the Company measures the fair value of the relevant assets or liabilities at the most favorable market prices. The Group uses assumptions that market participants use to maximize their economic benefits when pricing the asset or liability.

The main market refers to the market with the highest transaction volume and activity of the related assets or liabilities. The most favorable market means the market that can sell the related assets at the highest amount or transfer the related liabilities at the lowest amount after considering the transaction cost and transportation cost.

For financial assets or liabilities in an active market, The Company determines their fair value based on quotations in the active market. If there is no active market, the Company uses evaluation techniques to determine the fair value.

For the measurement of non-financial assets at fair value, the ability of market participants to use the assets for optimal purposes to generate economic benefits, or the ability to sell the assets to other market participants that can be used for optimal purposes to generate economic benefits.

① Valuation technology

The Company adopts valuation techniques that are applicable in the current period and are supported by sufficient data and other information. The valuation techniques used mainly include market method, income method and cost method. The Company uses a method consistent with one or more of the valuation techniques to measure fair value. If multiple valuation techniques are used to measure fair value, the reasonableness of each valuation result shall be considered, and the fair value shall be selected as the most representative of fair value under the current circumstances. The amount of value is regarded as fair value.

The Company equipment are applicable in the current circumstances and have sufficient available data and other information to support the use of the relevant observable input values prioritized. Unobservable input values are used only when the observable input value cannot be obtained or is not feasible. Observable input values are input values that can be obtained from market data. The Group uses assumptions that market participants use to maximize their economic benefits when pricing the asset or liability. Non-observable input values are input values that cannot be obtained from market data. The input value is obtained based on the best information available on assumptions used by market participants in pricing the relevant asset or liability.

②Fair value hierarchy

This company divides the input value used in fair value measurement into three levels, and first uses the first level input value, then uses the second level input value, and finally uses the third level input value. First level: quotation of same assets or liabilities in an active market (unadjusted) The second level input value is a directly or indirectly observable input value of the asset or liability in addition to the first level input value. The input value of the third level is the unobservable input value of the related asset or liability.

(3) Significant accounting judgment and estimate

The Company continuously reviews significant accounting judgment and estimate adopted for the reasonable forecast of future events based on its historical experience and other factors. Significant accounting judgment and assumptions that may lead to major adjustment of the book value of assets and liabilities in the next accounting year are listed as follows:

Classification of financial assets

The major judgments involved in the classification of financial assets include the analysis of business model and contrac cash flow characteristics.

The company determines the business mode of managing financial assets at the level of financial asset portfolio, taking into account such factors as how to evaluate and report financial asset performance to key managers, the risks that affect financial asset performance and how to manage it, and how to obtain remuneration for related business managers.

When the company assesses whether the contractual cash flow of financial assets is consistent with the basic borrowing arrangement, there are the following main judgments: whether the principal may change due to early repayment and other reasons during the duration of the period or the amount of change; whether the interest Including the time value of money, credit risk, other basic borrowing risks, and consideration of costs and profits. For example, does the amount paid in advance reflect only the unpaid principal and the interest based on the unpaid principal, as well as the reasonable compensation paid for early termination of the contract.

Measurement of expected credit losses of accounts receivable

The Company calculates the expected credit loss of accounts receivable through the risk exposure of accounts receivable default and the expected credit loss rate, and determines the expected credit loss rate based on the default probability and the default loss rate. When determining the expected credit loss rate, the Company uses internal historical credit loss experience and other data, combined with current conditions and forward-looking information to adjust the historical data. When considering forward-looking information, the indicators used by the Company include the risks of economic downturn, changes in the external market environment, technological environment, and customer conditions. The Company regularly monitors and reviews assumptions related to the calculation of expected credit losses.

Deferred income tax assets

If there is adequate taxable profit to deduct the loss, the deferred income tax assets should be recognized by all the unused tax loss. This requires the management to make a lot ofjudgment to forecast the time and amount of future taxable profit and determine the amount of the deferred tax assets based on the taxation strategy.

Income recognition

The Company's revenue from providing curtain wall construction and metro platform screen door installation services is recognized over a period of time. The recognition of the income and profit of such engineering installation services depends on the Company's estimation of the contract results and performance progress. If the actual amount of total revenue and total cost is

higher or lower than the estimated value of the management, it will affect the amount of revenue and profit recognition of the Company in the future.

Engineering contract

The management shall make relevant judgment to confirm the income and expenses of project contracting business according to the performance progress. If losses are expected to occur in the project contract, such losses shall be recognized as current expenses. The management of the Company estimates the possible losses according to the budget of the project contract. The Company determines the transaction price according to the terms of the contract and in combination with previous customary practices, and considers the influence of variable consideration, major financing components in the contract and other factors. During the performance of the contract, the Company continuously reviews the estimated total contract revenue and the estimated total contract cost. When the initial estimate changes, such as contract changes, claims and awards, the estimated total contract revenue and the estimated total contract cost are revised. When the estimated total contract cost exceeds the total contract revenue, the main business cost and estimated liabilities shall be recognized according to the loss contract to be executed.

Estimate of fair value

The Company uses fair value to measure investment real estate and needs to estimate the fair value of investment real estate at least quarterly. This requires the management to reasonably estimate the fair value of the investment real estate with the help of valuation experts.

Development cost

For property that has been handed over with income recognized, but whose public facilities have not been constructed or not been completed, the management will estimate the development cost for the part that has not been started according to the budget to reflect the operation result of the property sales

35. Major changes in accounting policies and estimates

1. Changes in important accounting policies

□ Applicable  Inapplicable

(2) Changes in major accounting estimates

□ Applicable  Inapplicable

(3) Implementation of new accounting standards adjustment for the first time starting from 2026, and implementation of financial statement related items at the beginning of the year for the first time

□ Applicable  Inapplicable

VI. Taxation

1. Major taxes and tax rates

Tax rates applicable for different tax payers

2. Tax preference

(1) On December 26, 2024, the subsidiary Fangda Construction Technology obtained the certificate of high-tech enterprise jointly issued by the Industry and Information Technology Bureau of Shenzhen Municipality, Shenzhen Finance Bureau, State Administration of Taxation and Shenzhen Taxation Bureau. The certificate number is GR202444207062. Within three years after obtaining the qualification of high-tech enterprise (from December 2024 to December 2027), the income tax will be levied at 15%.

(2) On December 26, 2024, the subsidiary Fangda Zhiyuan Technology Co., Ltd. obtained the certificate of high tech enterprise jointly issued by the Industry and Information Technology Bureau of Shenzhen Municipality, Shenzhen Finance Bureau, State Administration of Taxation and Shenzhen Taxation Bureau. The certificate number is GR202444201506. Within three years after obtaining the qualification of high tech enterprise (from December 2024 to December 2027), the income tax will be levied at 15%.

(3) On November 15, 2023, the subsidiary Fangda Shanghai Zhijian obtained the certificate of high tech enterprise GR202331002267 jointly issued by Shanghai Science and Technology Commission, Shanghai Finance Bureau and Shanghai Taxation Bureau. Within three years (from November 2023 to November 2026) after obtaining the qualification of high tech enterprise, the income tax will continue to be charged at 15%.

(4) On November 15, 2023, the subsidiary Fangda Yunzhu Technology Co., Ltd. obtained the certificate of high tech enterprise jointly issued by Shenzhen Science and Technology Innovation Commission, Shenzhen Finance Bureau, State Administration of Taxation and Shenzhen Taxation Bureau. The certificate number is GR202344205791. Within three years after obtaining the qualification of high tech enterprise (from November 2023 to November 2026), the income tax will be levied at 15%.

(5) On October 29, 2025, the subsidiary Jiangxi Fangda Intelligent Manufacturing Technology Co., Ltd. obtained the High and New Technology Enterprise Certificate jointly issued by the Department of Science and Technology of Jiangxi Province, the Department of Finance of Jiangxi Province, and the Jiangxi Provincial Tax Service of the State Taxation Administration (Certificate No.: GR202536000847). For a period of three years from the date of qualification as a high and new technology enterprise (from October 2025 to October 2028), the corporate income tax rate applicable to the subsidiary is 15%.

(6) The subsidiary Kechuangyuan Software is an enterprise located in Qianhai Shenzhen Hong Kong Modern Service Industry Cooperation Zone. Its main business meets the conditions of Preferential Catalogue of Enterprise Income Tax in Qianhai Shenzhen Hong Kong Modern Service Industry Cooperation Zone (2021) (the Regulation shall be implemented from January 1, 2021 to December 31, 2026), and the income tax is levied at 15%.

(7) Pursuant to the "Announcement of the Ministry of Finance and the State Taxation Administration on Further Implementation of Income Tax Preferential Policies for Small and Micro-sized Enterprises" (Announcement No. 13 of 2022), the "Announcement on Income Tax Preferential Policies for Small and Micro-sized Enterprises and Self-employed Businesses" (Announcement No. 6 of 2023), and the "Announcement of the Ministry of Finance and the State Taxation Administration on Further Supporting the Development of Small and Micro-sized Enterprises and Self-employed Businesses with Respect to Relevant Tax Policies" (Announcement No. 12 of 2023), certain subsidiaries qualified as small and micro-sized enterprises in 2026 and are subject to enterprise income tax in accordance with the aforementioned announcements.

VII. Notes to the consolidated financial statements

1. Monetary capital

In RMB

Others:

(1) The total restricted funds included in the ending balance of bank deposits amounted to RMB 41,122,581.22, comprising judicially frozen funds of RMB 23,669,412.26, time deposit interest of RMB 25,776.40, earmarked funds in supervised accounts of RMB 17,394,614.02, and other restricted funds of RMB 32,778.54. The restricted funds included in the ending balance of other monetary funds amounted to RMB 604,676,854.88, primarily consisting of acceptance bill deposits, interim guarantee deposits letters of guarantee deposits, and funds in transit. In the preparation of the cash flow statement, the above-mentioned deposits and other restricted deposits are not used as cash and cash equivalents.

(2) In addition, there are no other funds in the monetary funds at the end of the period that have restrictions on use and potentia recovery risks due to mortgages, pledges or freezing.

2. Transactional financial assets

In RMB

3. Derivative financial assets

In RMB

4. Notes receivable

(1) Classification of notes receivable

In RMB

(2) Disclosure by bad debt accrual method

In RMB

Provision for bad debts by category: bank acceptance bills

In RMB

Group recognition basis:

See 11. Financial Tools in Chapter VIII, V, Important Accounting Policies and Accounting Estimates for the recognition criteria and instructions for withdrawing bad debt reserves by portfolio

Provision for bad debts by category: commercial acceptance bills

In RMB

Group recognition basis:

If the provision for bad debts on accounts receivable is being made based on the expected credit loss general model: □ Applicable  Inapplicable

(3) Bad debt provision made, returned or recovered in the period

Bad debt provision made in the period:

In RMB

Including significant recovery or reversal:

□ Applicable  Inapplicable

(4) The Group has no endorsed or discounted immature receivable notes at the end of the period.

In RMB

5. Account receivable

(1) Account age

In RMB

(2) Disclosure by bad debt accrual method

In RMB

Provision for bad debts by individual item: individual provision

In RMB Category of bad debt provision assessed on a collective basis: Group 1: Curtain wall business receivables

In RMB

□ Applicable  Inapplicable

Category of bad debt provision assessed on a collective basis: Group 2: Platform screen door business receivables

In RMB Category of bad debt provision assessed on a collective basis: Group 3: New materials business receivables

In RMB Category of bad debt provision assessed on a collective basis: Group 4: New energy business receivables

In RMB Category of bad debt provision assessed on a collective basis: Group 5: Commercial real estate and other receivables

In RMB If the provision for bad debts on accounts receivable is being made based on the expected credit loss general model:

(3) Bad debt provision made, returned or recovered in the period

Bad debt provision made in the period:

In RMB

The Company needs to comply with the disclosure requirements of the decoration and decoration industry in the Guidelines for the Self-discipline and Supervision of Listed Companies of Shenzhen Stock Exchange No. 3 - Industry Information Disclosure.

Significant individual amounts of accounts receivable in the curtain wall and materials industry that have exceeded three years in age

(4) Written-off account receivable during the period

In RMB

Significant accounts receivable written off: In RMB

(5) Accounts receivable and contract assets with the top-5 ending balances, grouped by party owed

In RMB

6. Contract assets

(1) Contract assets

In RMB

(2) The amount and reason for the significant change in the book value during the reporting period

In RMB

(3) Disclosure by bad debt accrual method

In RMB

Provision for bad debts by individual item: individual provision In RMB

Category of bad debt provision assessed on a collective basis: Group 1: Completed but unsettled project payments not yet meeting collection conditions

In RMB

See 11. Financial Tools in Chapter VIII, V, Important Accounting Policies and Accounting Estimates for the recognition criteria and instructions for withdrawing bad debt reserves by portfolio

Category of bad debt provision assessed on a collective basis: Group 2: Warranty deposits not yet meeting collection conditions

In RMB

Provision for bad debts based on general model of expected credit losses □ Applicable  Inapplicable

(4) Bad debt provision made, returned or recovered in the period

In RMB

7. Receivable financing

(1) Presentation of receivables financing classification

In RMB

(2) Disclosure by bad debt accrual method

In RMB

Provision for bad debts by category: bank acceptance bills In RMB

(3) Receivables financing that has been endorsed or discounted by the Company and remains outstanding as of the balance sheet date

In RMB

8. Other receivables

In RMB

(1) Other receivables

1) Other receivables are disclosed by nature

In RMB

(2) Account age

In RMB