Wafangdian Bearing Co., LTD

2026 Midyear Report

2026-27

August 2026

Chapter I. Important notes, contents and definitions

The board of directors, the directors and senior managers of the company shall guarantee that the contents of the semi-annual report are true, accurate and complete without any false records, misleading statements or major omissions, and shall bear individual and joint legal liabilities.

Wang Jiyuan, the person in charge of the company, Sun Najuan, the person in charge of the accounting work, and Xuan Songtao, the person in charge of the accounting organization (the person in charge of the accounting) declare that they guarantee the truthfulness, accuracy and completeness of the financial report in the semi-annual report.

All directors have attended the meeting of the board of directors to review the semi-annual report.

In the third section of this report, "Management Discussion and Analysis", under "X. Risks Faced by the Company and Countermeasures", the company has detailedly described the possible risks in its operations and the countermeasures. Investors are kindly requested to pay attention to the relevant content.

The company does not plan to distribute cash dividends, do not send bonus shares, do not increase capital stock with accumulation fund.

Catalogue

Chapter I. Important notes, contents and definitions .... 2

Glossary .... 5

Chapter II. Company Profile .... 6

Chapter III Management Discussion and analysis .... 9

I. Major business of the Company during the reporting period .... 9

IV. Analysis of non-main business .... 11

V. Analysis of assets and liabilities .... 11

VI. Analysis of investment status .... 12

Chapter IV Corporate governance, environment and society .... 14

Chapter V Important Matters .... 16

Chapter VI Change of Shares and Particulars about Shareholders .... 23

Chapter VII Related Situation of bonds .... 26

Chapter VIII Financial Reports .... 27

III. Basic information of the company .... 47

File directory for future reference

(1) The 2026 half-year financial statement of the Company containing the signature and seal of the legal representative, the person in charge of accounting and the person in charge of accounting;

(2) the semi-annual report containing the signature of the legal representative of the company;

(3) Originals of all documents of the company publicly disclosed in newspapers designated by the CSRC during the reporting period and manuscripts of announcements.

Glossary

Chapter II.Company Profile

I. Company Information

II.Contacts

III.Other information

1. Company contact information

The company's registered address, office address and its postal code, the company's website address, E-mail box during the reporting period whether changes

□ Applicable  Inapplicable

The company's registered address, office address and its postal code, company's website address and E-mail address will not change during the reporting period. Please refer to the 2025 Annual Report for details

2. Information disclosure and storage location

Whether the location of information disclosure and storage changes during the reporting period

□ Applicable  Inapplicable

The name of the information disclosure newspaper selected by the company, and the website designated by China Securities Regulatory Commission to publish the semi-annual report. The reporting period of the preparation place of the semi-annual report of the company remains unchanged, for details, please refer to the 2025 annual report.

3. Other relevant information

Whether other relevant information has changed during the reporting period

□ Applicable  Inapplicable

IV. Main accounting data and financial indicators

Whether the company needs to retroactively adjust or restate the previous year's accounting data

□ Yes ☑ No

V. Differences in accounting information under IAS and domestic accounting standard

1. At the same time, differences in net profit and net assets in financial reports disclosed in accordance with international accounting standards and Chinese accounting standards.

□ Applicable  Inapplicable

During the reporting period, there is no difference between the net profit and net assets in the financial reports disclosed in accordance with international accounting standards and Chinese accounting standards.

2. At the same time, the differences of net profit and net assets in financial reports disclosed in accordance with overseas accounting standards and Chinese accounting standards.

□ Applicable  Inapplicable

During the reporting period, there is no difference between the net profit and net assets in the financial reports disclosed in accordance with overseas accounting standards and Chinese accounting standards.

VI. Non-recurring gain/loss items and amounts

Applicable Inapplicable

In RMB Yuan

Details of other profit and loss items that meet the definition of non-recurring profit and loss:

Applicable☑Not applicable

The Company has no other specific circumstances that meet the definition of non-recurring profit or loss.

The company does not have other specific circumstances of profit and loss items that meet the definition of non-recurring profit and loss.

The non-recurring profit and loss items listed in Explanatory Announcement No. 1 -- Non-Recurring Profit and Loss of Companies with Publicly Issued Securities are defined as recurring profit and loss items

□ Applicable  Not applicabl

The company does not define the non-recurring profit and loss items listed in Explanatory Announcement No. 1 -- Non-Recurring Profit and Loss as recurring profit and loss items.

Chapter III Management Discussion and analysis

I. Major business of the Company during the reporting period

The business scope of our company includes: permitted projects: inspection and testing services, import and export of goods, import and export of technology (projects that must be approved by law can only be carried out after approval by relevant departments, and the specific business items are subject to the approval results). General projects: Bearing manufacturing, manufacturing of bearings, gears and transmission components, sales of high-speed precision heavy-duty bearings, sales of bearings, gears and transmission components, bearing sales, general equipmen manufacturing (excluding special equipment manufacturing), manufacturing of high-speed rail equipment and accessories, mechanical equipmen sales, sales of special equipment, key systems and components for rail transit, lubricating oil sales, sales of high-speed rail equipment an accessories Sales of wind turbine generators and their components, sales of mechanical parts and components, manufacturing of railway locomotive and vehicle parts, sales of railway locomotive and vehicle parts, manufacturing of auto parts and accessories, wholesale of auto parts, retail of auto parts, repair of metal products, sales of metal materials, sales of metal products, metal surface treatment and heat treatmen processing, quenching processing Mechanical parts and components processing, land use right leasing, housing leasing, non-residential rea estate leasing, mechanical equipment leasing, computer and communication equipment leasing, transportation equipment leasing services, office equipment leasing services, warehousing equipment leasing services, special equipment leasing, labor services (excluding labor dispatch) Technical services, technical development, technical consultation, technical exchange, technical transfer, and technical promotion (except fo projects that require approval in accordance with the law, business activities are carried out independently based on the business license in accordance with the law)

The company has strong production and manufacturing capabilities as well as quality assurance capabilities, and provides extensive services to various industries and fields such as railways, metallurgy, and mining.

II. core competitiveness analysis

The Company boasts a comprehensive product and service system and round-the-clock dynamic on-site service capacity for product operation scenarios. It has won wide recognition from customers thanks to its well-received "Ten Value-Added Services". Equipped with robust manufacturing and quality assurance capabilities, the Company provides extensive products and services covering various industries and sectors including railway, metallurgy and mining. The Company has established strategic cooperation partnerships with key clients in China’s domestic equipment application sectors. By participating in customers’ value engineering projects to conduct in-depth marketing, it has firmly built up its brand image and marke influence in China’s bearing industry.

III. Analysis of main business

An overview of the

Please refer to the relevant content of "I. Main Business Engaged in by the Company during the Reporting Period".

Major financial data year-on-year changes

In RMB Yuan

The composition or source of profit of the company during the reporting period has undergone major changes □ Applicable  Not applicabl There was no significant change in the composition or source of profits during the reporting period. Composition of operating revenue In RMB Yuan

The industry, product or region that accounts for more than 10% of the company's operating revenue or profi  Applicable □ Not applicable

In RMB Yuan

In case of any adjustment of the statistical caliber of the company's main business data during the reporting period, the company's main business data in the latest period shall be adjusted according to the caliber of the end of the reporting period

□ Applicable  Not applicabl

IV. Analysis of non-main business

□ Applicable  Not applicabl

V. Analysis of assets and liabilities

1. Major changes in asset composition

In RMB Yuan

2. Main overseas assets

Applicable☑Inapplicable

2. Main overseas assets Applicable Inapplicable

3. Assets and liabilities measured at fair value

☑Applicable Inapplicable

In RMB Yuan

Other changes none Whether the measurement attributes of the company's main assets have changed significantly during the reporting period

□ Yes  No

4. Limitation of asset rights at the end of the report period

VI. Analysis of investment status

1. The general situation

Applicable☑Inapplicable

2. Significant equity investment acquired during the reporting period

Applicable☑Inapplicable

3. Significant ongoing non-equity investments during the reporting period

Applicable☑Inapplicable

4. Investment in financial assets

(1) Securities investment

In RMB Yuan

(2) Derivative investment

Applicable☑Inapplicable

There were no derivatives investments during the reporting period.

5. Use of raised funds

□ Applicable  Not applicable

There is no use of raised funds during the reporting period.

VII Sale of major assets and shares

1. Sale of major assets

Applicable☑Inapplicable

No significant assets were sold during the reporting period.

2. Sale of major equity

Applicable☑Inapplicable

VII.Analysis of major holding companies

Applicable Inapplicable

During the reporting period, the company has no important information about the holding and shareholding company that should be disclosed The main subsidiaries and the shareholding companies that have more than 10% impact on the company's net profit

In RMB Yuan

Acquisition and disposal of subsidiaries during the reporting period □ Applicable □ Not applicable Description of main holding companies

IX. Structured subjects controlled by the company

Applicable☑Inapplicable

X. Risks faced by the Company and countermeasures

On January 15,2025, the company was added to the SDN List (Special Designated Nationals and Blocked Persons List) by the U.S. Treasury Department's Office of Foreign Assets Control (OFAC). Entities on this list will face restrictions in transactions with U.S. entities, overseas asset transfers, foreign exchange settlements, partnerships, financing, and other related activities.

Affected by relevant sanctions, the company has faced intensified financing difficulties. Both domestic and overseas clients have experienced declining procurement volumes or even halted purchases, leading to mounting survival pressures. To alleviate operational strain, the company has implemented multiple effective measures: With support from stakeholders, it has focused on acquiring new customers and boosting product gross margins. Meanwhile, active applications for working capital financing have been submitted to ensure stable business operations.

XI. The formulation and implementation of the market value management system and the valuation enhancement plan

Whether the company has established a market value management system.

□ Yes  No

Whether the company has disclosed plans to raise its valuation.

□ Yes  No

XII. Implementation of the "Quality Return Double Improvement" action plan

Whether the company disclosed the "quality return double improvement" action plan announcement.

□ Yes  No

Chapter IV Corporate governance, environment and society

I. Changes of directors and senior managers of the company

Applicable☑Inapplicable

The company's directors and senior management personnel did not undergo any changes during the reporting period. For details, please refer to the 2025 annual report.

II.Profit distribution and capital reserve conversion into share capital during the reporting period Applicable☑Inapplicable

The company plans not to distribute cash dividends, not to send bonus shares, and not to convert the capital reserve into share capital every six months.

III. The implementation of the company's equity incentive plan, employee stock ownership plan or other employee incentive measures

ApplicableInapplicable

During the reporting period, the company had no equity incentive plans, employee stock ownership plans or other employee incentive measures and their implementation status

Iv. Environmental Information Disclosure Situation

Whether the listed company and its major subsidiaries are included in the list of enterprises that disclose environmental information in accordance with the law

Applicable☑Inapplicable

V. Social Responsibility Situation

The company earnestly fulfills its due social responsibilities. While pursuing economic benefits for the enterprise, it actively assumes the responsibilities that should be borne for the all-round development of the country and society, the natural environment and resources, as well as fo shareholders, employees, customers, consumers, suppliers, communities and other stakeholders. It has realized the social value of the enterprise and achieved a good win-win situation for the country, society and stakeholders. Strengthening environmental protection, enhancing resource efficiency, and influencing and driving local economic development through project construction and other means have effectively promoted the coordinated development of the company with society, nature, and other stakeholders.

The company strictly adheres to the relevant national and local laws, regulations and document requirements to handle endowment insurance, unemployment insurance, medical insurance, work-related injury insurance, maternity insurance, housing provident fund and large medical mutua aid insurance for its employees. Provide timely assistance and support to employees in difficulty. We have established and improved the employment system, including the salary system and incentive mechanism, to ensure that employees enjoy their labor rights and fulfill their labo obligations in accordance with the law. We have established and improved the labor safety and health system, strictly implemented the nationa labor safety and health regulations and standards, provided labor safety and health education, occupational protection and health check-ups fo employees, offered them a healthy and safe working and living environment, and prevented accidents during the labor process to the greates extent and reduced the hazards of occupational diseases

In its business operations, the company adheres to the principles of voluntariness, fairness, equivalent compensation and good faith, strictly controls quality targets and ensures the provision of qualified products. The company's technical department is actively engaged in the development of new products and new materials. The company guarantees that all the products or services it provides comply with relevan national quality standards or have been certified by relevant national quality inspection departments, and is actively applying for various third-part certifications at home and abroad. The company attaches great importance to after-sales service for customers and properly handles complaints and suggestions raised by customers and consumers. We strictly conducted third-party qualification reviews and on-site inspections of suppliers selected qualified ones, carefully understood their demands, and actively created a favorable cooperative atmosphere.

The company has dispatched village cadres to the surrounding areas of Dalian City to support rural construction, assume social responsibilities, continuously strengthen village Party organizations, and enhance Party building work. Promote the work of strengthening villages and enriching the people, implement projects benefiting farmers, and increase the income of village collectives. Carry out village appearance improvement, enhance governance levels, do a good job in publicity and supervision, promptly organize the clearance of garbage sites, improve the living environment, and build beautiful villages

☑Applicable Inapplicable

Chapter V Important Matters

I. Commitments made by the actual controller, shareholders, related parties, acquirers and the company and other relevant parties to be fulfilled during the reporting period and those that have not been fulfilled by the end of the reporting period

II.Non-operational occupation of funds by controlling shareholders and other related parties of the listed company

Applicable ☑ Inapplicable

During the reporting period, there is no non-operational appropriation of funds by controlling shareholders and other related parties to the listed company.

III. Foreign guarantee in violation of regulations

Applicable☑Inapplicable

No violation of the company's external guarantee during the reporting period.

IV.Employment and dismissal of accounting firms

Whether the semi-annual financial report has been audited

□ Yes  No

The company's semi-annual report is unaudited.

V. Explanations by the board of directors on the "non-standard audit Report" of the accounting firm during the reporting period

Applicable☑Inapplicable

VI. Explanations by the Board of directors on the "non-standard audit Report" of the previous year Applicable☑Inapplicable

VII. Bankruptcy reorganization related matters

Applicable☑Inapplicable

No bankruptcy reorganization related matters occurred during the company's reporting period.

VIII. Litigation Matters

Major litigation and arbitration matters

Applicable☑Inapplicable

During the reporting period, the company has no major litigation or arbitration matters.

Other Litigation matters

☑Applicable Inapplicable

IX. Punishment and rectification

Applicable☑Inapplicable

There is no punishment or rectification in the reporting period.

X.The integrity status of the company and its controlling shareholders and actual controllers

Applicable  Inapplicable XI. Major related Party Transactions 1. Related party transactions related to daily operations Applicable☑ Inapplicable

1. Related party transactions related to daily operations Applicable Inapplicable

2. Related party transactions arising from the acquisition or sale of assets or shares Applicable☑Inapplicable During the reporting period of the company, no related transactions of asset or equity acquisition or sale occurred.

3. Related party transactions of joint foreign investment

Applicable Inapplicable

During the reporting period, the company has no related party transaction of joint foreign investment.

4. Associated creditor's rights and debt transactions

Applicable ☑Inapplicable

There was no related creditor-debtor transactions during the reporting period of the company.

5. Dealings with related financial companies

Applicable☑Inapplicable

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

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 finance company controlled by the company and the related parties.

7. Other significant related party transactions

☑Applicable Inapplicable

For details on the routine related-party transactions, please refer to the "Announcement on the Company's 2026 Routine Related-Party Transactions Forecast" disclosed by the company on the Juchao Information Network on April 28, 2026, as well as Section 8, Part 14 of this report, "Related Parties and Related Transactions", under "5. Transaction Details".

For inquiries about the temporary report on major related-party transactions, please visit the relevant website.

XII. Major contracts and their performance

1.trusteeship, contracting, leasing matters

(1) Trusteeship

Applicable☑Inapplicable

There is no trusteeship situation during the reporting period of the company.

(2) Contracting situation

ApplicableInapplicable

There is no contract situation in the company's reporting period.

(3) Leasing situation

☑ApplicableInapplicable

Lease Situation Explanation

Our company has no significant lease contracts.

Projects that bring profits and losses to the company to reach more than 10% of the total profit of the company during the reporting period □ Applicable  Not applicabl

During the reporting period, there is no leasing project whose profit or loss for the company reaches more than 10% of the total profit of the company.

2. Material guarantee

□ Applicable  Not applicable

There is no major guarantee during the reporting period.

3. Entrust financial management

□ Applicable  Not applicable

There is no entrusted financial management during the reporting period.

4. Other major contracts

□ Applicable  Not applicable

There are no other major contracts in the reporting period.

XIII.Registration Form for Activities such as Research Visits, Communication, and Interviews During the Reporting Period  Applicable □ Not applicable

XIV. Explanation of other major matters

□ Applicable  Not applicable

There are no other major matters that need to be explained during the reporting period.

XV.Major matters of the company's subsidiaries

□ Applicable  Not applicable

Chapter VI Change of Shares and Particulars about Shareholders

I. Changes in shares

1. Changes in shares

Unit:share

Reasons for changes in shares

Applicable ☑Inapplicable

Approval of changes in shares

Applicable☑Inapplicable

Changes in ownership of shares

Applicable☑Inapplicable

Implementation progress of share repurchase

Applicable☑Inapplicable

The implementation progress of share repurchase by means of collective bidding

Applicable☑Inapplicable

The impact of changes in shares on financial indicators such as basic earnings per share and diluted earnings per share and net assets per

share attributable to common shareholders of the Company in the latest year and the latest period

Applicable☑Inapplicable

Other disclosures deemed necessary by the Company or required by securities regulatory authorities

Applicable☑Inapplicable

2. Changes in restricted shares

Applicable☑Inapplicable

II. Securities issuance and listing

Applicable☑Inapplicable

III. The number of shareholders and stock holding of the company

IV.Changes in shareholding of directors and senior management personnel

☑Applicable Inapplicable

V.Change of controlling shareholder or actual controller

The company has previously disclosed that the actual controller was planning to change the control rights but the process had not yet been

completed. Please provide an update on the progress of the control rights change.

Applicable☑Inapplicable

Change of controlling shareholder during reporting period

Applicable☑Inapplicable

The controlling shareholder of the company has not changed during the reporting period.

Actual controller changes during the reporting period

Applicable☑Inapplicable

The actual controller of the company has not changed during the reporting period.

VI. Relevant Information about preferred Shares

Applicable☑Inapplicable

No preferred stock existed at the reporting period.

Applicable☑Inapplicable

Chapter VII Related Situation of bonds

Chapter VIII Financial Reports

I. Audit report

Whether the semiannual report is audited

□ Yes  No

The company's semi-annual financial report is unaudited.

II. Financial statements

The unit of the statement in the financial notes is yuan

1. Consolidated balance sheet

Establishment unit: Wafangdian Bearing Co., LTD

In RMB Yuan

General Accountant : Sun Najuan

Chairman: Wang Jiyuan

Accounting charger: Xuan Songtao

2. Balance sheet of parent company

In RMB Yuan

3. Consolidated income statement

Chairman: Wang Jiyuan Accounting charger: Xuan Songtao

4. Profit statement of the parent company

In RMB Yuan

5. Consolidated cash flow statement

In RMB Yuan

6. Cash flow statement of parent company

In RMB Yuan

7. Statement of Changes in consolidated owners' equity

This amount

In RMB Yuan

The amount of the previous period

In RMB Yuan

8. Statement of changes in owner's equity of the parent company

This amount

In RMB Yuan

The amount of the previous period In RMB Yuan

III. Basic information of the company

Wafangdian bearing co., LTD. (hereinafter referred to as the company) on July 16, 1996, the dalian economic reform committee general reform commission approved hair [1996] no. 64, by wafangdian bearing group co., LTD. (hereinafter referred to as wazhou group) as the sole sponsor of the company, The main production and operation assets (and their related liabilities) authorized by the state to be held at a discounted price shall be invested in and established by means of social collection.

On February 19, 1997, the State Securities Commission issued Document No.9 [1997] and approved the company to publicly issue domestic listed foreign capital shares (B shares) to the public and listed them for trading.

On March 19, 1997, the founding meeting of the Company and the first meeting of the Board of Directors decided that the effective date of the reorganization of the company's accounting system (that is, the date of the establishment of the company's accounts) was determined as April 1, 1997.

On March 20, 1997, THE COMPANY GOT THE BUSINESS LICENSE OF ENTERPRISE LEGAL PERSON, THE registration NUMBER IS 24239971-2. Business scope for bearings, mechanical equipment, auto parts and related products manufacturing and sales.

On March 25, 1997, the Company's domestic listed foreign capital shares (B shares) were officially listed and traded in Shenzhen Stock Exchange, raising 406.58 million yuan, and the company's registered capital was 330 million yuan after the issue.

According to the shenzhen stock exchange on August 30, 2006 issued "on the shenzhen stock exchange stock listing rules > supplementary notice on the problem of distribution of equity of listed companies (hereinafter referred to as the" notice "), on September 30, the company in 2006, on the basis of the financial report audited, implement turn add equity capital accumulation fund, With 2.2 shares for every 10 shares, the total share capital increased from 333 million shares to 402.6 million shares, among which the legal person shares owned by Waxhuan Group increased from 20 million shares to 244.0 million shares, accounting for 60.6% of the total share capital; SKF of Sweden increased from 65 million shares to 79.3 million shares, accounting for 19.7% of the total capital; Public shares increased from 65 million to 79.3 million, accounting for 19.7% of the total share capital. After the implementation of this plan, the company's equity structure will meet the provisions of the Supplementary Notice of the Shenzhen Stock Exchange.

The parent company of the company is Wafangdian Bearing Group Co., LTD. The general meeting of shareholders is the power organ of the Company, exercising the power to make decisions on major matters such as the company's business policy, financing, investment and profi distribution in accordance with law. The board of directors shall be responsible to the general meeting of shareholders and exercise the decisionmaking power of the company according to law; The management shall be responsible for organizing the implementation of the resolutions o the general meeting of shareholders and the Board of directors, and shall preside over the production and operation management of the enterprise.

This company and its various subsidiaries (collectively referred to as "the Group") belong to the bearing manufacturing industry and mainly engage in the production and sales of various types of bearings.Business Scope: Permitted items: inspection and testing services, import and export of goods, import and export of technologies (for items subject to approval according to law, business activities can only be carried ou after approval by relevant departments, and the specific business items shall be subject to the approval results) Bearing manufacturing, bearings, gears and transmission components manufacturing, high speed precision heavy-duty bearing sales, sales bearings, gears and transmission parts, bearing sales, general equipment manufacturing (excluding special equipment manufacturing), high-speed rail equipment, parts manufacturing, machinery and equipment sales, rail transportation equipment, key system and parts sales, sales of lubricating oil, high-speed rail equipment and accessories sales, Wind generators and spare parts sales, machinery parts, spare parts sales, railway locomotive vehicle accessories manufacturing, railway locomotive vehicle accessories sales, auto parts and accessories manufacturing, auto parts wholesale and retail auto parts, metal products repair, sales metal materials, metal products sales, metal surface treatment and heat treatment processing, quenching process, Machinery parts, parts processing, Land use right leasing, Housing leasing, Non-residential real estate leasing, Machinery and equipment leasing, Computer and communication equipment leasing, Transportation equipment leasing services, Office Equipment leasing services, Storage equipment leasing services, Special equipment leasing, Labor Services (excluding labor dispatch), Technical services, technology development, technology consultation, technology exchange, technology transfer and technology promotion (except for the projects subject to approval according to law, independently carry out business activities according to law with the business license).

The registered address of this company: No. 1, Section 1, Beigongji Street, Wafangdian City, Liaoning Province. The legal representative: Wang Jiyuan.

This financial statement has been approved and presented by the company's board of directors on August 21, 2026.

IV. Basis for the preparation of financial statements

1. Establishment basis

The financial statements of this group are prepared on the basis of the going concern assumption, based on the actual transactions and events, in accordance with the "Enterprise Accounting Standards - General Standards" (issued by the Ministry of Finance under Order No. 33 and revised by Order No. 76), the specific accounting standards promulgated and revised by the Ministry of Finance on February 15, 2006 and thereafter, enterprise accounting standards interpretations and other relevant regulations (collectively referred to as "enterprise accounting standards"), and the disclosure requirements of the "Rule 15 of the Securities Issuance Information Compilation Rules of the China Securities Regulatory Commission - General Provisions on Financial Reports (Revised in 2023)"). According to the relevant provisions of enterprise accounting standards, the accounting of this group is based on the accrual basis. Except for certain financial instruments, all of this financia statement is based on historical cost for measurement. If an asset is impaired, corresponding impairment provisions shall be made in accordance with the relevant regulations.

2.Going concern

The financial statements have been prepared on the basis of the going concern assumption.

V.Important Accounting policies and estimates

Specific accounting policies and accounting estimates tips:

Based on the actual production and operation characteristics of the group, in accordance with the relevant accounting standards for enterprises, specific accounting policies and estimates have been formulated for various transactions and matters such as the determination and measurement of the bad debt provision for receivables, the measurement of issued inventory, the classification and depreciation method of fixed assets, the amortization of intangible assets, the conditions for capitalization of research and development expenses, and the recognition and measurement of revenue. Please refer to the descriptions in Section IV of this note for details.

1, follow the accounting standards for business enterprises statement

The financial statements prepared by this group comply with the requirements of the enterprise accounting standards, and truly and completely reflect the financial position of the company and the group as of December 31, 2025, as well as the operating results and cash flows and other relevant information for the year 2025. Moreover, the financial statements of the company and the group are in all significant aspects in compliance with the disclosure requirements for financial statements and their notes as stipulated in the "Rule 15 - General Provisions on Financial Reporting for Publicly Issued Securities Companies" revised by the China Securities Regulatory Commission in 2023.

1. Establishment basis The financial statements of this group are prepared on the basis of the going concern assumption, based on the actual transactions and events, in accordance with the "Enterprise Accounting Standards - General Standards" (issued by the Ministry of Finance under Order No. 33 and revised by Order No. 76), the specific accounting standards promulgated and revised by the Ministry of Finance on February 15, 2006 and thereafter, enterprise accounting standards interpretations and other relevant regulations (collectively referred to as "enterprise accounting standards"), and the disclosure requirements of the "Rule 15 of the Securities Issuance Information Compilation Rules of the China Securities Regulatory Commission - General Provisions on Financial Reports (Revised in 2023)"). According to the relevant provisions of enterprise accounting standards, the accounting of this group is based on the accrual basis. Except for certain financial instruments, all of this financial statement is based on historical cost for measurement. If an asset is impaired, corresponding impairment provisions shall be made in accordance with the relevant regulations.

2. Accounting period

The accounting periods of this group are divided into annual and interim periods. An interim period refers to a reporting period shorter than a complete accounting year. The accounting year of this group adopts the Gregorian calendar year, which starts from January 1st and ends on December 31st each year.

3. Business cycle

The normal operating cycle refers to the period during which the Group acquires assets for processing and then realizes cash or cash equivalents. The Group considers a 12-month period as its operating cycle and uses it as the standard for classifying the liquidity of assets and liabilities.

4. Functional currency

The Renminbi is the main currency in the economic environment where the Company and its domestic subsidiaries operate. The Company and its domestic subsidiaries use the Renminbi as their bookkeeping base currency. When preparing this financial statement, the Renminbi is the currency adopted by the Group.

5. importance criteria determination method and selection basis

☑Applicable Not applicable

6. under the same control and not under the same control of the accounting treatment of enterprise merger

Business combination under the same control: the assets and liabilities acquired by the merging party in the business combination (including the goodwill formed by the acquisition of the merged party by the ultimate controlling party) are measured on the basis of the carrying value of the assets and liabilities of the merged party in the consolidated financial statements of the ultimate controlling party at the merger date. The difference between the book value of the net assets acquired in the merger and the book value of the merger consideration paid (or the tota nominal value of the issued shares), the capital premium in the capital reserve is adjusted, and the retained earnings are adjusted if the capita premium in the capital reserve is insufficient to be written off.

Business combination under non-identical control: The cost of combination is the fair value of the assets paid by the purchaser, liabilities incurred or assumed, and equity securities issued by the purchaser to acquire control of the purchaser on the purchase date. The differenc between the cost of the merger and the acquiree's share of the fair value of identifiable net assets obtained in the merger is recognized a goodwill; The difference in the cost of the merger that is less than the acquiree's share of the fair value of identifiable net assets acquired in the merger is recognized in profit or loss for the period. The identifiable assets, liabilities and contingent liabilities of the acquiree that are eligible for recognition acquired in the merger are measured at fair value at the purchase date.

The expenses directly related to the business combination are recognized in the current profit or loss when incurred; Transaction costs incurred in the issuance of equity or debt securities for the purpose of a business combination are included in the initial recognition amount of the equit or debt securities.

7. The judgment criteria of control and the preparation method of consolidated financial statements

1. Judgment criteria of control

The consolidated scope of the consolidated financial statements is determined on a control basis and includes the Company and all subsidiaries. Control means that the company has power over the investee, enjoys variable returns by participating in related activities of the investee, and has the ability to use its power over the investee to influence the amount of returns.

2.The method of preparing consolidated financial statements

The Company regards the entire enterprise Group as one accounting entity and prepares consolidated financial statements in accordance with unified accounting policies to reflect the overall financial position, operating results and cash flows of the enterprise Group. The effect of interna transactions between the Company and its subsidiaries or subsidiaries shall be offset. If the internal transaction indicates that the relevant asse has an impairment loss, the loss shall be fully recognized. If the accounting policies and accounting periods adopted by the subsidiary are inconsistent with those of the Company, necessary adjustments shall be made in accordance with the accounting policies and accounting periods of the Company when preparing the consolidated financial statements.

Subsidiary owners' equity, current period net profit and loss and the share of minority shareholders in the current period comprehensive income are shown separately under owners' equity in the consolidated balance sheet, under net profit in the consolidated income statement and under total comprehensive income, respectively. The loss shared by the minority shareholders of the subsidiary in the current period exceeds the balance formed by the minority shareholders' share in the initial owner's equity of the subsidiary, and the shareholders' equity is reduced by several.

(1) Add subsidiaries or businesses

During the reporting period, if a business combination under the same control increases a subsidiary or business, the operating results and cash flows of the subsidiary or business combination from the beginning of the current period to the end of the reporting period are included in the consolidated financial statements, while adjustments are made to the opening number of the consolidated financial statements and the relevan items in the comparative statements, and the consolidated reporting entity is deemed to have existed since the point at which the ultimate controlling party began to control.

If the investee under the same control can be controlled due to additional investment or other reasons, the equity investment held before the acquisition of the control of the merged party, the relevant profit and loss, other comprehensive income and other changes in net assets have been recognized between the date of the acquisition of the original equity and the date on which the merging party and the merged party are under the same control and the date of the merger, Offset the opening retained earnings or current profit and loss of the comparative statemen period respectively.

During the reporting period, if a subsidiary or business is added as a result of a business combination not under the same control, it is included in the consolidated financial statements from the purchase date on the basis of the fair value of each identifiable asset, liability and contingen liability identified at the purchase date.

If the investee that is not under the same control can be controlled due to additional investment or other reasons, the equity held by the purchaser before the purchase date shall be remeasured according to the fair value of the equity on the purchase date, and the difference between the fair value and the carrying value shall be included in the current investment income. Other comprehensive income related to the equity held by the purchaser before the purchase date, which can be reclassified into profit or loss later, and other changes in owners' equity under the equity method are converted into investment income for the current period of the purchase date.

(2) Disposal of subsidiaries

① General treatment methods

When the control of the investee is lost due to the disposal of part of the equity investment or for other reasons, the remaining equity investmen after disposal shall be remeasured according to its fair value on the date of the loss of control. The sum of the consideration obtained from the disposal of the equity and the fair value of the remaining equity, minus the difference between the share of the original subsidiary's net assets and the sum of goodwill that should have been continuously calculated from the purchase date or the merger date based on the origina shareholding ratio, is included in the investment income during the period of loss of control. Other comprehensive income related to the equity investment of the original subsidiary, which can be reclassified into profit or loss later, and other changes in owner's equity under the equity method of accounting, are converted to current investment income when the right of control is lost.

② Dispose of subsidiaries step by step

Where an equity investment in a subsidiary is disposed of progressively through multiple transactions until control is lost, the terms, conditions and economic effects of each transaction in which the equity investment in the subsidiary is disposed of meet one or more of the following circumstances, which generally indicate that the multiple transaction is a package transaction:

I. The transactions were entered into at the same time or with regard to their mutual effects;

ⅱ. These transactions as a whole can achieve a complete business outcome;

ⅲ. The occurrence of one transaction depends on the occurrence of at least one other transaction;

Iv.. A transaction is uneconomic in isolation, but it is economic when taken together with other transactions.

Where each transaction is a package transaction, each transaction shall be accounted for as one transaction of disposal of the subsidiary and loss of control; The difference between the disposal price and the share of the subsidiary's net assets corresponding to the disposal investment prior to the loss of control is recognized as other comprehensive income in the consolidated financial statements and transferred to profit or loss in the period when control is lost

If each transaction is not a package transaction, before the loss of the right of control, the equity investment of the subsidiary shall be disposed of in part according to the condition that the right of control is not lost. When the right of control is lost, the accounting treatment is carried out in accordance with the general treatment of the disposal of subsidiaries

(3) Purchase of minority shares in subsidiaries

The difference between the newly acquired long-term equity investment due to the purchase of minority shares and the share of net assets of the subsidiary that should be continuously calculated from the purchase date or the merger date based on the proportion of the newly acquire shares is adjusted for the equity premium in the capital reserve in the consolidated balance sheet, and if the equity premium in the capita reserve is insufficient to be offset, the retained earnings are adjusted

(4) Partial disposal of the equity investment in the subsidiary without loss of contro

The difference between the disposal price and the disposal of long-term equity investment and the share of net assets continuously calculated by the subsidiary since the purchase date or the merger date shall be adjusted for the equity premium in the capital reserve in the consolidated balance sheet, and if the equity premium in the capital reserve is insufficient to be offset, the retained earnings shall be adjusted.

8. Classification of joint venture arrangement and accounting treatment of joint operation

9. Determination criteria for cash and cash equivalents

Cash refers to the inventory cash of the group and the deposits that can be used for payment at any time. Cash equivalents refer to the investments held by the group with a short maturity, strong liquidity, easy conversion into known amounts of cash, and very low risk of value fluctuation.

10. Translation of foreign currency business and foreign currency statements

1. Method for determining the conversion rate when conducting foreign currency transactions

For the foreign currency transactions of the Group, at the initial recognition, the spot exchange rate on the transaction date is used as the conversion rate to convert the foreign currency amount into RMB for accounting.

2. Conversion method for foreign currency monetary items on the balance sheet date and treatment method for exchange gains and losses On the balance sheet date, the balance of foreign currency monetary items is converted at the spot exchange rate on that date. The resulting exchange differences, except for those arising from foreign currency specific borrowings related to the construction of assets that meet the capitalization criteria, which are handled in accordance with the principle of capitalization of borrowing costs, are all included in the current profi and loss.

3. Conversion method for foreign currency financial statements

The assets and liabilities items in the balance sheet are converted at the spot exchange rate on the balance sheet date; other items of owner's equity are converted at the spot exchange rate at the time of occurrence. The income and expense items in the income statement are converted at the spot exchange rate on the transaction date.

When disposing of an overseas operation, the conversion difference of the foreign currency financial statements related to that overseas operation shall be transferred from the owner's equity items to the current profit and loss of the disposal period.

11.Financial instruments

A financial asset or financial liability is recognized when the group becomes a party to a financial instrument contract.

Classification of financial assets

Based on the business model for managing financial assets of the Group and the contractual cash flow characteristics of the financial assets, financial assets are classified at initial recognition as follows: financial assets measured at amortized cost, financial assets measured at fair value with changes recorded in other comprehensive income, and financial assets measured at fair value with changes recorded in current profi or loss.

Financial assets measured at amortized cost

The Group classifies financial assets that simultaneously meet the following conditions and are not designated as financial assets measured a fair value with changes recognized in current profit or loss as financial assets measured at amortized cost:

The business model is to collect contractual cash flows;

The contractual cash flows consist only of payments of principal and interest based on the outstanding principal amount.

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

The Group classifies financial assets that simultaneously meet the following conditions and are not designated as financial assets measured a fair value with changes recognized in current profit or loss as financial assets measured at fair value and whose changes are included in other comprehensive income (debt instruments):

The business model is to both collect contractual cash flows and sell the financial asset;

The contractual cash flows consist only of payments of principal and interest based on the outstanding principal amount.

For non-trading equity instruments investments, the Group can irrevocably designate them as financial assets measured at fair value and whose changes are included in other comprehensive income (equity instruments) at the initial recognition. This designation is made on an individua investment basis and the relevant investment is in accordance with the definition of equity instruments from the issuer's perspective

Financial assets measured at fair value and whose changes are recognized in current profit or loss

Apart from the financial assets measured at amortized cost and those measured at fair value and whose changes are recognized in other comprehensive income, the Group classifies all the remaining financial assets as financial assets measured at fair value and whose changes are recognized in current profit or loss. At initial recognition, if it is possible to eliminate or significantly reduce accounting mismatches, the Group can irrevocably designate the financial assets that should be classified as those measured at amortized cost or those measured at fair value and whose changes are recognized in other comprehensive income as financial assets measured at fair value and whose changes are recognized in

current profit or loss.

Classification of financial liabilities

Financial liabilities are classified at initial recognition as: financial liabilities measured at fair value and whose changes are recognized in current profit or loss, and financial liabilities measured at amortized cost.

Financial liabilities that meet one of the following conditions can be designated at initial measurement as financial liabilities measured at fair value and whose changes are recognized in current profit or loss:

This designation can eliminate or significantly reduce accounting mismatches;

According to formal written documents stating the enterprise's risk management or investment strategy, the financial liability portfolio or the combination of financial assets and financial liabilities is managed and evaluated based on fair value, and this is reported internally by the enterprise on the basis of this to key management personnel;

The financial liability contains embedded derivatives that need to be separated.

Confirmation basis and measurement methods of financial instruments

Financial assets measured at amortized cost

The financial assets measured at amortized cost of the Group include accounts receivable notes, accounts receivable, other receivables, etc. For such financial assets, the Group initially measure them at fair value, and related transaction costs are included in the initial recognition amount; accounts receivable without significant financing components and those that the company decides not to consider the financing component of no more than one year are initially measured based on the contract transaction price.

Financial assets measured at fair value and whose changes are recognized in other comprehensive income (debt instruments)

Financial assets measured at fair value and whose changes are recognized in other comprehensive income (debt instruments) include receivables financing, etc. They are initially measured at fair value, and related transaction costs are included in the initial recognition amount This financial asset is subsequently measured at fair value, and changes in fair value, except for interest calculated using the actual interest rate method, impairment losses or gains, and exchange gains or losses, are all recognized in other comprehensive income.

When derecognition occurs, the accumulated gains or losses previously recognized in other comprehensive income are transferred from other comprehensive income to current profit or loss

Financial assets measured at fair value and whose changes are recognized in other comprehensive income (equity instruments)

Financial assets measured at fair value and whose changes are recognized in other comprehensive income (equity instruments) include other equity instrument investments, etc. They are initially measured at fair value, and related transaction costs are included in the initial recognition amount. This financial asset is subsequently measured at fair value, and changes in fair value are recognized in other comprehensive income. Dividends obtained are recognized in current profit or loss.

When derecognition occurs, the accumulated gains or losses previously recognized in other comprehensive income are transferred from other comprehensive income to retained earnings.

Financial assets measured at fair value and whose changes are included in current profits and losses

Financial assets measured at fair value and whose changes are included in current profits and losses include trading financial assets, etc. They are initially measured at fair value, and related transaction costs are included in current profits and losses. These financial assets are subsequently measured at fair value, and changes in fair value are included in current profits and losses.

Financial liabilities measured at fair value and whose changes are included in current profits and losses

Financial liabilities measured at fair value and whose changes are included in current profits and losses include trading financial liabilities, derivative financial liabilities, etc. They are initially measured at fair value, and related transaction costs are included in current profits and losses These financial liabilities are subsequently measured at fair value, and changes in fair value are included in current profits and losses. When they are derecognized, the difference between their book value and the payment made is included in current profits and losses.

Financial liabilities measured at amortized cost

Financial liabilities measured at amortized cost include short-term loans, notes payable, accounts payable, other payables, long-term loans, long-term payables, etc. They are initially measured at fair value, and related transaction costs are included in the initial recognition amount. Interest calculated using the actual interest rate method during the holding period is included in current profits and losses.

When they are derecognized, the difference between the payment made and the book value of the financial liability is included in current profits and losses.

The criteria and measurement methods for the derecognition of financial assets and the recognition of financial asset transfers When any of the following conditions is met, the Group terminates the recognition of financial assets:

(1) The contractual right to receive cash flows from the financial asset is terminated;

(2) The financial asset has been transferred, and almost all risks and rewards of the financial asset have been transferred to the transferee;

(3) The financial asset has been transferred, although the Group has neither transferred nor retained almost all risks and rewards of the financia asset, but has not retained control over the financial asset.

When the Group modifies or renegotiates the contract with the counterparty and constitutes a substantive modification, the original financia asset is derecognized, and a new financial asset is recognized in accordance with the modified terms.

When a financial asset transfer occurs, if almost all risks and rewards of the financial asset are retained, the financial asset is not derecognized. When determining whether a financial asset transfer meets the above conditions for derecognition of financial assets, the principle of substance over form is adopted.

This group distinguishes the transfer of financial assets into overall transfer and partial transfer. If the overall transfer of financial assets meets the conditions for termination recognition, the difference between the two amounts will be recorded in the current profit and loss:

(1) The book value of the transferred financial assets;

(2) The sum of the consideration received from the transfer and the cumulative amount of the fair value changes originally directly recorded in the owner's equity (in the case where the transferred financial assets are financial assets measured at fair value and their changes are included in other comprehensive income (debt instruments)).

If the partial transfer of financial assets meets the conditions for termination recognition, the book value of the entire transferred financial assets will be allocated between the terminated and non-terminated parts based on their respective relative fair values, and the difference between th two amounts will be recorded in the current profit and loss:

(1) The book value of the terminated part;

(2) The consideration for the terminated part, and the cumulative amount of the fair value changes originally directly recorded in the owner's equity corresponding to the terminated part (in the case where the transferred financial assets are financial assets measured at fair value and their changes are included in other comprehensive income (debt instruments)).

If the transfer of financial assets does not meet the conditions for termination recognition, the financial asset will continue to be recognized, and the consideration received will be recognized as a financial liability.

Termination of Financial Liabilities

If the present obligation of a financial liability is all or partially relieved, then the financial liability or a part thereof will be terminated; if the group signs an agreement with the creditor to replace the existing financial liability with a new financial liability, and the contract terms of the new financial liability are materially different from those of the existing financial liability, then the existing financial liability will be terminated and the new financial liability will be recognized.

If the contract terms of the existing financial liability are substantially modified, then the financial liability or a part thereof will be terminated, and the modified financial liability will be recognized as a new financial liability.

When a financial liability is partially or wholly terminated, the difference between the book value of the terminated financial liability and the consideration paid (including the transferred non-cash assets or the assumed new financial liability) will be recorded in the current profit and loss

If the group repurchases part of the financial liability, at the repurchase date, the book value of the financial liability will be allocated between the continuingly recognized part and the terminated part based on their relative fair values. The difference between the book value allocated to the terminated part and the consideration paid (including the transferred non-cash assets or the assumed new financial liability) will be recorded in the current profit and loss

Impairment of financial assets

Method for recognizing impairment provisions

The Group accounts for impairment of financial assets measured at amortized cost, financial assets measured at fair value with changes recognized in other comprehensive income (debt instruments) and financial guarantee contracts, etc. based on expected credit losses

The Group considers reasonable and well-founded information such as past events, current conditions, and predictions of future economic conditions, and uses the risk of default as a weight to calculate the probability-weighted amount of the difference between the contractual cash flows receivable and the expected cash flows that can be received, and recognizes the expected credit loss.

For receivables and contract assets formed by transactions regulated by Accounting Standard for Business Enterprises No. 14 - Revenue, regardless of whether they contain significant financing components, the Group always measures the loss provision at an amount equivalent to the expected credit loss over the entire duration of the receivables

For lease receivables formed by transactions regulated by Accounting Standard for Business Enterprises No. 21 - Leases, the Group chooses to always measure the loss provision at an amount equivalent to the expected credit loss over the entire duration of the receivables.

For other financial instruments, the Group assesses the changes in credit risk of the relevant financial instruments since initial recognition a each balance sheet date.

The Group compares the risk of default of financial instruments at the balance sheet date with the risk of default at the initial recognition date to determine the relative changes in the risk of default over the expected duration of the financial instruments, and assesses whether the credit risk of the financial instruments has significantly increased since initial recognition. Generally, if the overdue period exceeds 30 days, the Group considers that the credit risk of the financial instrument has significantly increased, unless there is conclusive evidence that the credit risk of the financial instrument has not significantly increased since initial recognition

If the credit risk of a financial instrument is low at the balance sheet date, the Group considers that the credit risk of the financial instrument has not significantly increased since initial recognition.

If the credit risk of a financial instrument has significantly increased since initial recognition, the Group measures the loss provision at an amount equivalent to the expected credit loss over the entire duration of the financial instrument; if the credit risk of the financial instrument has no significantly increased since initial recognition, the Group measures the loss provision at an amount equivalent to the expected credit loss over the next 12 months. The increase or reversal amount of the impairment provision thus formed is recognized as an impairment loss or gain in the current profit or loss. For financial assets measured at fair value with changes recognized in other comprehensive income (debt instruments), the loss provision is recognized in other comprehensive income and the impairment loss or gain is recognized in the current profit or loss, and the carrying amount of the financial asset in the balance sheet is not reduced.

If there is objective evidence indicating that a certain receivable has experienced credit impairment, the Group recognizes impairment provision on an individual basis for that receivable.

For receivables and contract assets formed by transactions regulated by Accounting Standard for Business Enterprises No. 14 - Revenue (2017), regardless of whether they contain significant financing components, the Group always measures the loss provision at an amount equivalent to the expected credit loss over the entire duration of the receivables

For lease receivables, the Group chooses to always measure the loss provision at an amount equivalent to the expected credit loss over the entire duration of the receivables.

Methods for determining credit losses of various financial assets

Except for certain financial assets that assess overdue credit losses on an individual basis, the Group also assesses the expected credit losses of financial assets measured at amortized cost based on the aging group.

Except for the above receivables that are subject to individual bad debt provisions, the Group classifies the remaining financial instruments based on their credit risk characteristics into several groups, and determines the expected credit losses on a group basis. The group has established the following categories and determination basis for recognizing expected credit losses for its receivables such as commercial bills, accounts receivable, receivables financing, and other receivables: Impairment of financial assets

Method for recognizing impairment provisions

The Group accounts for impairment of financial assets measured at amortized cost, financial assets measured at fair value with changes recognized in other comprehensive income (debt instruments) and financial guarantee contracts, etc. based on expected credit losses.

The Group considers reasonable and well-founded information such as past events, current conditions, and predictions of future economic conditions, and uses the risk of default as a weight to calculate the probability-weighted amount of the difference between the contractual cash flows receivable and the expected cash flows that can be received, and recognizes the expected credit loss.

For receivables and contract assets formed by transactions regulated by Accounting Standard for Business Enterprises No. 14 - Revenue, regardless of whether they contain significant financing components, the Group always measures the loss provision at an amount equivalent to the expected credit loss over the entire duration of the receivables

For lease receivables formed by transactions regulated by Accounting Standard for Business Enterprises No. 21 - Leases, the Group chooses to always measure the loss provision at an amount equivalent to the expected credit loss over the entire duration of the receivables.

For other financial instruments, the Group assesses the changes in credit risk of the relevant financial instruments since initial recognition at each balance sheet date.

The Group compares the risk of default of financial instruments at the balance sheet date with the risk of default at the initial recognition date to determine the relative changes in the risk of default over the expected duration of the financial instruments, and assesses whether the credit risk of the financial instruments has significantly increased since initial recognition. Generally, if the overdue period exceeds 30 days, the Grou considers that the credit risk of the financial instrument has significantly increased, unless there is conclusive evidence that the credit risk of th financial instrument has not significantly increased since initial recognition.

If the credit risk of a financial instrument is low at the balance sheet date, the Group considers that the credit risk of the financial instrument has

not significantly increased since initial recognition.

If the credit risk of a financial instrument has significantly increased since initial recognition, the Group measures the loss provision at an amoun equivalent to the expected credit loss over the entire duration of the financial instrument; if the credit risk of the financial instrument has no significantly increased since initial recognition, the Group measures the loss provision at an amount equivalent to the expected credit loss over the next 12 months. The increase or reversal amount of the impairment provision thus formed is recognized as an impairment loss or gain in the current profit or loss. For financial assets measured at fair value with changes recognized in other comprehensive income (debt instruments), the loss provision is recognized in other comprehensive income and the impairment loss or gain is recognized in the current profit or loss, and the carrying amount of the financial asset in the balance sheet is not reduced

If there is objective evidence indicating that a certain receivable has experienced credit impairment, the Group recognizes impairment provisions on an individual basis for that receivable.

For receivables and contract assets formed by transactions regulated by Accounting Standard for Business Enterprises No. 14 - Revenue (2017), regardless of whether they contain significant financing components, the Group always measures the loss provision at an amount equivalent to the expected credit loss over the entire duration of the receivables

For lease receivables, the Group chooses to always measure the loss provision at an amount equivalent to the expected credit loss over the entire duration of the receivables.

Methods for determining credit losses of various financial assets

Except for certain financial assets that assess overdue credit losses on an individual basis, the Group also assesses the expected credit losses of financial assets measured at amortized cost based on the aging group.

Except for the above receivables that are subject to individual bad debt provisions, the Group classifies the remaining financial instruments based on their credit risk characteristics into several groups, and determines the expected credit losses on a group basis. The group has established the following categories and determination basis for recognizing expected credit losses for its receivables such as commercial bills, accounts receivable, receivables financing, and other receivables:

Receivable Notes

Accounts Receivable and Contract Assets

Receivables Financing

Other Receivables

If the Group no longer reasonably expects that the contractual cash flows of the financial assets can be fully or partially recovered, it will directly write down the book balance of the financial assets.

12. Notes Receivable

Refer to item 11.

13. Accounts Receivable

Refer to item 11.

14. Receivables Financing

Refer to item 11.

15. Other Receivables

The determination method and accounting treatment for the expected credit losses of other receivables

Refer to item 11.

16. Contract Assets

The Group presents contract assets or contract liabilities in the balance sheet based on the relationship between the performance of th obligation and the customer's payment. The Group's rights to receive consideration for transferring goods or providing services (and such rights depend on factors other than the passage of time) are presented as contract assets. Contract assets and contract liabilities under the same contract are presented net. The rights that the Group has, which are unconditional (depending only on the passage of time), to collec consideration from the customer as an account receivable are presented separately.

The determination method and accounting treatment for expected credit losses of contract assets are described in Note 4, (9), Financial Asset Impairment.

17. Inventories

Classification of Inventories

Inventories are classified as: raw materials, packaging materials, low-value consumables, work-in-progress, finished goods, etc.

Valuation methods for the acquisition and issuance of inventories

Inventories are initially measured at cost. The cost of inventories includes purchase costs, processing costs, and other expenditures incurred to bring the inventories to their current location and condition. Inventories are valued and priced using the real-time moving weighted average method when issued.

Methods for confirming the net realizable value of inventories and the recognition of impairment provisions

At the balance sheet date, inventories should be measured at the lower of cost and net realizable value. If the cost of inventories is higher than their net realizable value, impairment provisions for inventories should be made. Net realizable value refers to the estimated selling price of the inventory in normal operations, minus the estimated costs to complete the inventory, estimated selling expenses, and related taxes and fees.

Finished goods, inventory items for sale, and materials held for sale that are directly for sale in normal production and operation processes, thei net realizable value should be determined based on the estimated selling price of the inventory minus the estimated selling expenses and related taxes and fees; materials that need to be processed should be determined based on the estimated selling price of the finished products minus the estimated costs to complete the inventory, estimated selling expenses, and related taxes and fees; inventories held for fulfilling sales contracts or service contracts should be determined based on the contract price, and if the quantity held exceeds the quantity ordered in the sales contract, the net realizable value of the excess part of the inventory should be determined based on the general selling price.

After making impairment provisions for inventories, if the factors that previously reduced the value of inventories have disappeared, resulting in the net realizable value of the inventories being higher than their book value, the previously made impairment provisions can be reversed within the amount, and the reversed amount is included in the current profit and loss.

1. Inventory counting system is perpetual inventory system.

2. Depreciation methods for low-value consumables and packaging materials

Low-value consumables are depreciated using the one-time amortization method upon issuance; packaging materials are depreciated using the one-time amortization method upon issuance.

18. Holding assets for sale

19. Debt investment

20. Other debt investment

21. Long-term receivables

22. Long-term equity investment

The long-term equity investment referred to in this section refers to the long-term equity investment held by the Group that has control, join control or significant influence over the invested entity.

Joint 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. Where the group, together with other joint ventures, exercises join control over the investee and enjoys rights over the net assets of the investee, the investee shall be a joint venture of the group.

Significant influence refers to having the power to participate in the decision-making of the financial and operational decisions of the investee, but not being able to control or jointly control the formulation of these policies with other parties. Where the group is able to exert significant influence on the investee, the investee is an associate enterprise of the group

Determination of initial investment costs

For a long-term equity investment in a subsidiary formed by a combination of enterprises under the same control, the initial investment cost o the long-term equity investment is based on the share of the acquired owner's equity in the book value of the consolidated financial statements of the ultimate controlling party on the merger date. The difference between the initial investment cost of long-term equity investment and the book value of the consideration paid, and the equity premium in the capital reserve; The retained earnings are adjusted when the equity premium in the capital reserve is insufficient to write off. If the investore under the same control can be controlled due to additional investment or other reasons, the difference between the initial investment cost of long-term equity investment recognized in accordance with the above principles and the sum of the book value of long-term equity investment before the merger plus the book value of the new consideration for further shares acquired on the merger date shall be adjusted for the equity premium, and the retained earnings shall be deducted if the equity premium is insufficient.

For a long-term equity investment in a subsidiary formed by a merger of enterprises not under the same control, the merger cost determined on the purchase date shall be regarded as the initial investment cost of the long-term equity investment. If the investee under different control ca be controlled due to additional investment or other reasons, the initial investment cost shall be the sum of the book value of the equity investment originally held plus the cost of the new investment.

For long-term equity investment obtained by cash payment, the initial investment cost shall be based on the purchase price actually paid. For long-term equity investments obtained by issuing equity securities, the initial investment cost shall be based on the fair value of the equity securities issued.

Subsequent measurement and profit and loss recognition methods

Long-term equity investments accounted for by the cost method

The Company's long-term equity investments in subsidiaries are accounted for using the cost method, unless the investment is held for sale. In addition to the cash dividends or profits declared but not yet paid in the price or consideration actually paid at the time of investment acquisition, the Company recognizes the current investment income according to the cash dividends or profits declared and paid by the investee.

Long-term equity investments accounted for by the equity method

Long-term equity investments in associates and joint ventures shall be accounted for using the equity method. If the initial investment cost is greater than the investment, it shall enjoy the difference in the share of the fair value of the identifiable net assets of the investee, withou adjusting the initial investment cost of long-term equity investment; When the initial investment cost is less than the investment, the difference in the share of the fair value of the identifiable net assets of the investee shall be included in the current profit or loss, and the cost of long-term equity investment shall be adjusted.

The group recognizes investment income and other comprehensive income respectively according to the share of net profit and loss and other comprehensive income realized by the investee, and adjusts the book value of long-term equity investment; The book value of long-term equity investment shall be reduced accordingly in accordance with the profit or cash dividend declared by the investee; For changes in owner's equity other than net profit and loss, other comprehensive income and profit distribution of the investee (" Other owner's equity changes "), the carrying value of long-term equity investments is adjusted and included in owner's equity.

When recognizing the share of the investee's net profit and loss, other comprehensive income and other changes in owner's equity, it is recognized on the basis of the fair value of the investee's identifiable net assets at the time of acquisition of the investment, and after adjusting the net profit and other comprehensive income of the investee in accordance with thegroup's accounting policies and accounting periods.

The profit or loss of unrealized internal transactions between thegroup and its associate or joint venture shall be offset by the part attributable to thegroup calculated in proportion to its share, and the investment income shall be recognized on this basis, except where the assets invested or sold constitute business. If the unrealized internal transaction loss occurred with the investee is an asset impairment loss, it shall be fully recognized.

The net loss incurred by thegroup to the joint venture or associated enterprise, except for the obligation to bear additional losses, shall be limited to the carrying value of the long-term equity investment and other long-term interests that substantially constitute the net investment in the join venture or associated enterprise. If a joint venture or associate enterprise later realizes net profit, thegroup shall resume the recognition of the income sharing amount after the income sharing amount has made up the unrecognized loss sharing amount.

Disposal of long-term equity investments

If a long-term equity investment is disposed of, the difference between the carrying value and the actual purchase price shall be included in the current profit or loss.

If part of the long-term equity investment accounted for by the equity method is disposed of, and the remaining equity is still accounted for by the equity method, the other comprehensive income recognized by the original equity method is carried forward on the same basis as the relevant assets or liabilities directly disposed of by the invee, and the changes in other owners' equity are transferred to the current profit or loss in proportion.

Where the common control or significant influence on the investee is lost due to the disposal of equity investment or other reasons, other comprehensive income recognized by the original equity investment as a result of the equity method accounting shall be accounted for on the same basis as the direct disposal of the relevant assets or liabilities by the investee when the equity method accounting is terminated. All other changes in owners' equity are transferred to current profit or loss upon termination of the equity method

If the company loses the control over the investee due to the disposal of part of the equity investment or other reasons, and the remaining equity can jointly control or significantly affect the investee when preparing individual financial statements, it shall be calculated according to the equity method, and when the remaining equity is regarded as self-acquired, it shall be adjusted by the equity method. Other comprehensive income recognized before the acquisition of the control of the investee is carried forward on the same basis as the direct disposal of related assets or liabilities by the investee, and the changes in other owner's equity recognized by the equity method are transferred to the current profit or loss on a proportional basis; If the remaining equity cannot jointly control or exert significant influence on the investee, it is recognized as a financia asset, and the difference between the fair value and the carrying value on the date of loss of control is included in the current profit or loss, and all other comprehensive income and other changes in owners' equity recognized before the acquisition of the control of the investee are carried forward.

If the equity investment of the subsidiary is disposed of step by step through multiple transactions until the control is lost, and it is a packag transaction, each transaction shall be accounted for as a transaction that disposed of the equity investment of the subsidiary and lost the control. The difference between the disposal price of each disposal and the book value of the disposed equity against the entitled long-term equity investment before the loss of control is first recognized as other comprehensive income in individual financial statements, and then transferred to the loss and profit of the current period when the control is lost. If it is not a package transaction, each transaction shall be accounted fo separately.

23. Investment real estate

Investment real estate measurement model

Cost measurement

Depreciation or amortization method

Investment real estate refers to real estate held for the purpose of earning rent or capital appreciation, or both, including land use rights tha have been leased, land use rights that have been held and are to be transferred after appreciation, and buildings that have been leased (including buildings that have been leased after completion of self-construction or development activities, and buildings that are under construction or development and will be leased in the future).

Subsequent expenditures related to investment real estate are included in the cost of investment real estate when the related economic benefits are likely to flow in and their costs can be reliably measured; Otherwise, it is charged to current profit or loss when incurred.

Thegroup adopts a cost model for the measurement of existing investment real estate. The depreciation policy for investment real estate - leased buildings measured according to the cost model is the same as that for the Company's fixed assets, and the amortization policy for leased land use rights is the same as that for intangible assets.

24. Fixed assets

(1) Confirm the conditions

Fixed assets refer to tangible assets with a unit value of more than 2,000 yuan that are held for the purpose of producing commodities, providing services, renting or operating management and have a service life exceeding one fiscal year. Fixed assets are recognized when both of the following conditions are met:

(1) The economic benefits related to the fixed assets are likely to flow into the enterprise;

(2) The cost of the fixed asset can be measured reliably.

Fixed assets are initially measured at cost (taking into account the impact of anticipated disposal cost factors).

Subsequent expenditures related to fixed assets are included in the cost of fixed assets when the economic benefits related to them are likely to flow in and their costs can be reliably measured; To terminate the recognition of the book value of the replaced portion; All other subsequent expenses are recognised in profit or loss as incurred.

（2） Depreciation method

25. Construction in progress

Construction in progress is measured at actual cost incurred. Actual costs include construction costs, installation costs, capitalized borrowing costs, and other expenditures necessary to bring the construction in progress to its intended serviceability. When the construction under construction reaches the intended serviceable state, it shall be transferred to fixed assets and depreciation shall be calculated from the following month.

The methods for conducting impairment tests on construction in progress and for making impairment provisions are detailed in Note 4, Item 19 "Impairment of Long-Term Assets".

26. Borrowing costs

27. Biological assets

28. Oil and gas assets

29. Intangible assets

(1) Service life and the basis for its determination, estimate, amortization method or review procedure

Intangible assets refer to non-monetary identifiable assets without physical form that the group owns or controls.

Intangible assets are initially measured at cost. The cost of purchased intangible assets includes the purchase price, relevant taxes, and other expenditures directly attributable to making the asset reach its intended use

When obtaining intangible assets, the useful life of the asset is analyzed and determined.

For intangible assets with a limited useful life, they are amortized over the period during which the economic benefits are generated by the group; if the period during which the intangible asset is expected to bring economic benefits to the group cannot be predicted, it is regarded as an intangible asset with an uncertain useful life and is not amortized.

Intangible assets with limited service life shall be amortized within the time limit during which they bring economic benefits to the enterprise; Intangible assets that cannot be foreseen to bring economic benefits to the enterprise shall be regarded as intangible assets with uncertain service life and shall not be amortized

The right to the use of the land shall be amortized on an average basis according to the period of grant from the date of grant; ERP software and other intangible assets shall be amortized in equal stages according to the shortest among the expected service life, the benefit life stipulated in the contract and the effective life stipulated by law. Amortization amounts are included in the cost of the relevant assets and current profit or loss according to the beneficiaries. The estimated useful life and amortization method of intangible assets with limited useful life are reviewed at the end of each year and are treated as accounting estimate changes if they occur.

(2) The scope of research and development expenditures and related accounting treatment.

The scope of capitalization of research and development expenditures

The group's expenses incurred in the process of conducting research and development include related staff salaries, materials consumed, related depreciation and amortization expenses and other related expenses of the personnel engaged in research and development activities, and are summarized as follows:

The relevant employee compensation of the personnel engaged in R&D activities mainly refers to the relevant employee compensation of the personnel directly engaged in R&D activities, the management personnel closely related to R&D activities and the direct service personnel.

Depreciation expense refers to the expense of depreciation of instruments, equipment and buildings in use for research and developmen activities. Long-term deferred expenses refer to long-term deferred expenses incurred in the course of alteration, modification, renovation and repair of research and development facilities.

Direct input expense refers to the related expenditure actually incurred by enterprises for the implementation of research and developmen activities. Including direct consumption of materials, fuel and power costs; Expenses for the operation, maintenance, adjustment, inspection inspection and repair of instruments and equipment used in research and development activities, as well as lease fees for fixed assets rented through business leasing for research and development activities

Specific criteria for dividing the research stage and the development stage

The expenditures of the internal research and development projects of this group are classified into research stage expenditures and development stage expenditures.

Research stage: The stage of conducting original and planned investigation and research activities to obtain and understand new scientific or technical knowledge, etc.

Development stage: The stage of applying the research results or other knowledge to a certain plan or design to produce new or materiall improved materials, devices, products, etc., before commencing commercial production or use.

Specific conditions for capitalizing expenditures in the development stage

Expenditures in the research stage are recorded in the current profit and loss account when they occur. Expenditures in the development stage are recognized as intangible assets if they simultaneously meet the following conditions:

① The completion of the intangible asset to make it usable or marketable is technically feasible;

② There is an intention to complete the intangible asset and use or sell it;

③ The way in which the intangible asset generates economic benefits, including being able to prove the existence of a market for the products produced using the intangible asset or the market for the intangible asset itself, and for internal use, being able to prove its usefulness;

④ There are sufficient technical, financial and other resources to support the development of the intangible asset and the ability to use or sell the intangible asset;

⑤ The expenditures attributed to the development stage of the intangible asset can be reliably measured.

If it is impossible to distinguish between research stage expenditures and development stage expenditures, all research and development expenditures incurred shall be recorded in the current profit and loss account.

30. Impairment of long-term assets

Long-term equity investments, investment real estate measured by the cost model, fixed assets, construction in progress,intangible assets with limited useful life and other long-term assets, where there are signs of impairment at the balance sheet date, impairment tests shall be conducted. If the impairment test results show that the recoverable amount of the asset is lower than its carrying value, an impairment provision shall be made according to the difference and included in the impairment loss. The recoverable amount is the higher of the fair value of the asset, net of disposal costs, and the present value of the asset's expected future cash flows. The asset impairment reserve is calculated and recognized on the basis of individual assets, and if it is difficult to estimate the recoverable amount of an individual asset, the recoverable amount of the asset group is determined on the basis of the asset group to which the asset belongs. An asset group is the smallest portfolio o assets that can independently generate cash inflows

For goodwill formed as a result of business merger, intangible assets with uncertain service life, intangible assets that have not yet reached the usable state, regardless of whether there are signs of impairment, at least at the end of each year impairment tests

The group conducts goodwill impairment tests, and the carrying value of goodwill formed as a result of the business combination is apportioned to the relevant asset group in a reasonable way from the date of purchase; If it is difficult to apportion to the relevant asset group, it is apportioned to the relevant asset group combination. An associated asset group or combination of asset groups is an asset group or combination that can benefit from the synergies of a business combination

When conducting an impairment test on the related asset group or asset group combination containing goodwill, if there are signs of impairmen in the asset group or asset group combination related to goodwill, the impairment test is first conducted on the asset group or asset group combination excluding goodwill, and the recoverable amount is calculated and compared with the relevant carrying value to recognize the corresponding impairment loss. Then, an impairment test is conducted on the asset group or asset group combination containing goodwill to compare its carrying value with the recoverable amount. If the recoverable amount is lower than the carrying value, the impairment loss amoun is first offset against the carrying value of the goodwill in the asset group or asset group combination. The book value of the other assets is then reduced proportionally according to the proportion of the book value of the asset group or the asset group combination of other assets other than goodwill. Once the above-mentioned asset impairment loss is recognized, it will not be reversed in the subsequent accounting period.

31. Long-term deferred expenses

Long-term deferred expenses are expenses that have already been incurred but are liable for the current and subsequent periods for an apportionment period of more than one year. Such expenses are amortized evenly over the benefit period, and if the long-term unamortized expense item does not benefit subsequent accounting periods, the full amortized value of the item that has not been amortized is carried to profit or loss for the current period.

32. Contractual liabilities

The group shows contractual assets or contractual liabilities in the balance sheet according to the relationship between the performance obligations and the customer's payments. Obligations of the group to transfer goods or provide services to customers for which consideration has been received or received from customers are shown as contractual liabilities. Contract assets and contract liabilities under the same contract are shown in net terms.

33. Employee compensation

(1) Accounting treatment of short-term compensation

During the accounting period in which employees provide services to the group, the group recognizes the short-term compensation actually incurred as a liability and includes it in the profit or loss of the current period or the cost of related assets.

The group shall, during the accounting period in which the employees provide services to the group, calculate and determine the corresponding amount of salary for the employees according to the prescribed basis and proportion of the provision of social insurance premiums and housing provident funds, as well as the funds for the trade union and the education of the employees as prescribed.

The employee welfare expenses incurred by the group are included in the current profit or loss or related asset costs according to the actua amount incurred when actually incurred, among which non-monetary benefits are measured at fair value

(2) Accounting treatment of post-resignation benefits

(1) Set a drawdown plan

The group shall pay basic pension insurance and unemployment insurance for its employees in accordance with the relevant regulations of the local government. During the accounting period when the employees provide services to the group, the amount payable shall be calculated according to the payment base and proportion prescribed by the local regulations, recognized as liabilities, and included in the profit or loss o the current period or the cost of related assets. In addition, the group participates in the Enterprise annuity plan/Supplementary pension insurance fund approved by the relevant state authorities. The group pays contributions to the annuity plan/local social insurance institution according to a certain proportion of the total salary of the employees, and the corresponding expenditure is included in the profit and loss of the current period or the cost of related assets.

(2) Set a benefit plan

According to the formula determined by the expected cumulative benefit unit method, the group will attribute the benefit obligation arising from the defined benefit plan to the period during which the employee provides the service, and record it in the current profit or loss or related asse cost.

A deficit or surplus resulting from the present value of defined benefit plan obligations less the fair value of defined benefit plan assets is recognized as a defined benefit plan net liability or net asset. If there is surplus in the defined benefit plan, the group shall measure the net assets of the defined benefit plan by whichever is lower than the surplus of the defined benefit plan or the upper limit of assets.

All defined benefit plan obligations, including those expected to be paid within twelve months after the end of the annual reporting period in which the employee rendered services, are discounted at the balance sheet date based on the market yield of Treasury bonds or high-quality corporate bonds in an active market that match the maturity and currency of defined benefit plan obligations.

The cost of services incurred by the defined benefit Plan and the net interest on the net liabilities or net assets of the defined benefit plan are recognised in profit or loss or the cost of the related assets for the period; Changes resulting from the remeasurement of net liabilities or ne assets of defined benefit plans are recognized in other comprehensive income and are not carried back to profit or loss in subsequent accounting periods, and the portion originally recognized in other comprehensive income is fully carried forward to undistributed profit within equity at the termination of the original defined benefit plan.

At the time of settlement of defined benefit plans, settlement gains or losses are recognized based on the difference between the present value of defined benefit plan obligations and the settlement price determined on the settlement date.

(3) The accounting treatment method of dismissal welfare

If the group provides termination benefits to employees, the employee compensation liability arising from the termination benefits shall be recognized at an early date and recorded in the current profit or loss of either of the following: If the group cannot unilaterally withdraw the termination benefits provided by the termination of labor relations plan or reduction proposal; When the group recognizes costs or expenses associated with restructuring involving the payment of termination benefits

(4) Accounting treatment methods for other long-term employee benefits

34. Expected liabilities

Obligations relating to contingencies are recognised by the group as projected liabilities when the following conditions are met:

(1) The obligation is a current obligation of the group;

(2) the performance of the obligation is likely to result in the outflow of economic benefits from the group;

(3) The amount of the obligation can be measured reliably.

Projected liabilities are initially measured at the best estimate of the expenditure required to meet the relevant current obligations.

In determining the best estimate, factors such as risks, uncertainties and the time value of money associated with contingencies are taken into account. Where the time value of money is significant, the best estimate is determined by discounting the relevant future cash outflows.

Where there is a continuous range of required expenditures within which outcomes are equally likely to occur, the best estimate is determined a the midpoint of the range; In other cases, the best estimates are treated as follows:

• Contingencies involving a single item are determined according to the amount most likely to occur

Contingencies involving multiple items shall be determined according to the calculation of various possible outcomes and relevant probabilities.

Where all or part of the expenditure required to satisfy the projected liability is expected to be compensated by a third party, the amount of compensation is recognized separately as an asset when it is basically certain that it will be received, and the amount of compensation recognized does not exceed the carrying value of the projected liability.

The group reviews the carrying value of the projected liabilities at the balance sheet date and adjusts the carrying value according to the current best estimate if there is solid evidence that the carrying value does not reflect the current best estimate.

35. Payment in shares

36. Preferred stock, perpetual bond and other financial instruments

37. income

Disclose accounting policies used to recognize and measure revenue by business type

The accounting policies adopted for revenue recognition and measurement

The Group recognizes revenue upon fulfilling the performance obligations in the contract, that is, when the customer obtains control of the relevant goods or services. Obtaining control of the relevant goods or services means being able to dominate the use of the goods or services and obtaining almost all the economic benefits from them.

If a contract contains two or more performance obligations, the Group allocates the transaction price to each individual performance obligation based on the relative proportion of the standalone selling prices of the goods or services promised in each obligation. The Group measures revenue based on the transaction price allocated to each individual performance obligation

The transaction price refers to the amount that the Group expects to receive as consideration for transferring goods or services to the customer, excluding amounts collected on behalf of third parties and amounts expected to be refunded to the customer. The Group determines the transaction price based on the terms of the contract, combined with its past practices. When determining the transaction price, the Group considers factors such as variable consideration, significant financing components in the contract, non-cash consideration, and consideration payable to the customer. The Group determines the transaction price including variable consideration at a level not exceeding the amount that is highly likely not to be reversed in the cumulative revenue recognized when the relevant uncertainties are eliminated. For contracts with significant financing components, the Group determines the transaction price by assuming that the customer pays in cash at the time of obtaining control of the goods or services. The Group amortizes the difference between the transaction price and the contract consideration ove the contract period using the effective interest rate method. One of the following conditions must be met for the performance obligation to be fulfilled over a period of time: 1. The customer obtains and consumes the economic benefits brought by the Group's performance at the same time. 2. The customer can control the goods under construction by the Group. 3. The Group has the right to receive payment for the cumulative completed performance throughout the contract period. For performance obligations fulfilled at a point in time, the Group recognizes revenue a the point when the customer obtains control of the relevant goods or services. When determining whether the customer has obtained control o the goods or services, the Group considers the following signs: 1. The Group has the current right to collect consideration for the goods or services, that is, the customer has the current obligation to make payment for the goods or services. 2. The Group has transferred the lega ownership of the goods to the customer, that is, the customer has the legal ownership of the goods. 3. The Group has transferred the physica goods to the customer, that is, the customer has physical possession of the goods. 4. The Group has transferred the main risks and rewards o ownership of the goods to the customer, that is, the customer has obtained the main risks and rewards of ownership of the goods. 5. The customer has accepted the goods or services. The Group determines the identity of the Company when entering into a transaction based on whether it has control over the goods or services before transferring them to the customer. If the Group can control the goods or services before transferring them to the customer, the Group is the principal and recognizes revenue based on the total amount of received or receivable consideration; otherwise, the Group is the agent and recognizes revenue based on the amount of commission or handling fee expected to be received.

The specific methods of revenue recognition and measurement are disclosed according to the nature of the business.

Merchandise sales revenue: When the Group has transferred the principal risks and rewards of ownership of the goods to the purchaser, the Group has not retained the continuing management rights normally associated with ownership, nor has it exercised effective control over the goods sold, the amount of revenue can be measured reliably, the related economic benefits are likely to flow to the business, and the related costs incurred or to be incurred can be measured reliably, Recognize the realization of sales revenue.

Income from transferred assets: The realization of income from the right to use transferred assets is recognized when the economic benefits associated with the transaction are likely to flow to the Group and the amount of revenue can be measured reliably

The use of different business models involving different revenue recognition methods and measurement methods of similar businesses

38. Contract cost

Contract cost includes contract performance cost and contract acquisition cost.

The cost incurred by the group for the performance of the contract, which does not fall within the scope of relevant standards such as inventory, fixed assets or intangible assets, shall be recognized as an asset as the performance cost of the contract when the following conditions are met:

• The cost is directly related to a current or expected contract.

• This cost increases the group's resources to meet performance obligations in the future.

• This cost is expected to be recovered.

The incremental cost incurred by the group to obtain a contract is recognized as an asset if it is expected to be recovered as a contract acquisition cost.

Assets related to contract costs are amortized on the same basis as the recognition of revenue of goods or services related to that asset; However, if the amortization period of contract acquisition costs does not exceed one year, the group will recognize it in the profit and loss of the current period when it occurs.

If the carrying value of an asset related to the contract cost is higher than the difference between the following two items, the group shall make an impairment provision for the excess and recognize it as an asset impairment loss:

(a) the remaining consideration expected to be obtained as a result of the transfer of goods or services related to the asset;

1.type Government subsidies refer to monetary assets or non-monetary assets obtained free of charge by the group from the government, which are divided into government subsidies related to assets and government subsidies related to income. Government subsidies related to assets refer to government subsidies obtained by the group for the purchase and construction or other forms of long-term assets. Revenue-related government subsidies refer to government subsidies other than those related to assets. The group's specific criteria for classifying government grants as asset-related are government grants obtained by the Group for the acquisition, construction or otherwise formation of long-term assets The group's specific criteria for classifying government grants as income-related are: government grants other than government grants related to assets If the government documents do not clearly specify the object of the subsidy, the group will classify the government subsidy as asset-related or revenue-related based on the following judgment: The Group will make a judgment according to the above distinction principle, and if it is difficult to distinguish, the whole government subsidy is classified as revenue-related.

2. Estimate the costs to be incurred for the transfer of the relevant goods or services.

If the factors of impairment in previous periods change later, making the aforementioned difference higher than the carrying value of the asset, the group shall revert to the original provision for impairment and record it in the profit or loss of the current period, provided that the carrying value of the asset after the reversal shall not exceed the carrying value of the asset on the date of reversal if no provision for impairment is assumed.

38. Contract cost Contract cost includes contract performance cost and contract acquisition cost. The cost incurred by the group for the performance of the contract, which does not fall within the scope of relevant standards such as inventory, fixed assets or intangible assets, shall be recognized as an asset as the performance cost of the contract when the following conditions are met: • The cost is directly related to a current or expected contract. • This cost increases the group's resources to meet performance obligations in the future. • This cost is expected to be recovered. The incremental cost incurred by the group to obtain a contract is recognized as an asset if it is expected to be recovered as a contract acquisition cost. Assets related to contract costs are amortized on the same basis as the recognition of revenue of goods or services related to that asset; However, if the amortization period of contract acquisition costs does not exceed one year, the group will recognize it in the profit and loss of the current period when it occurs. If the carrying value of an asset related to the contract cost is higher than the difference between the following two items, the group shall make an impairment provision for the excess and recognize it as an asset impairment loss: (a) the remaining consideration expected to be obtained as a result of the transfer of goods or services related to the asset;

39. Government subsidies

1.type

Government subsidies refer to monetary assets or non-monetary assets obtained free of charge by the group from the government, which are divided into government subsidies related to assets and government subsidies related to income.

Government subsidies related to assets refer to government subsidies obtained by the group for the purchase and construction or other forms of long-term assets. Revenue-related government subsidies refer to government subsidies other than those related to assets.

The group's specific criteria for classifying government grants as asset-related are government grants obtained by the Group for the acquisition, construction or otherwise formation of long-term assets

The group's specific criteria for classifying government grants as income-related are: government grants other than government grants related to assets

If the government documents do not clearly specify the object of the subsidy, the group will classify the government subsidy as asset-related or revenue-related based on the following judgment: The Group will make a judgment according to the above distinction principle, and if it is difficult to distinguish, the whole government subsidy is classified as revenue-related.

2.Confirmation time

Government grants are recognized when the group is able to meet the conditions attached to them and can receive them.

3.Accounting treatment

Government subsidies related to assets, write-down of the book value of related assets or recognized as deferred income. If it is recognized as deferred income, it shall be included in the profit or loss of the current period in a reasonable and systematic way during the service life of the relevant assets (if it is related to the daily activities of the group, it shall be included in other income; If it is not related to the daily activities of the group, it is included in non-operating income);

Government grants related to revenue that are used to compensate the group for related costs or losses in subsequent periods are recognized as deferred revenue and are recognized in current profit or loss during the period in which the related costs or losses are recognized (other income if related to the group's daily activities; If it is not related to the daily activities of the group, it is included in non-operating income) or written off the related costs or losses; If it is used to compensate the relevant costs or losses incurred by the group, it is directly included in the current profit and loss (if it is related to the daily activities of the group, it is included in other income; If it is not related to the daily activities of the group, it is included in non-operating income) or written off related costs or losses

40. Deferred tax assets/deferred tax liabilities

Income tax includes current income tax and deferred income tax. In addition to income tax arising from business mergers and transactions or events that are directly included in owners' equity (including other comprehensive income), the group recognizes current income tax and deferred income tax in current profit or loss.

Deferred income tax assets and deferred income tax liabilities are calculated and recognized based on the difference (temporary difference) between the tax basis of assets and liabilities and their carrying value.

Deferred income tax assets are recognized for deductible temporary differences to the extent that taxable income is likely to be obtained in future periods to offset deductible temporary differences. For deductible losses and tax credits that can be carried forward to subsequent years, the corresponding deferred tax assets are recognized to the extent that future taxable income is likely to be obtained to offset the deductible losses and tax credits.

For taxable temporary differences, deferred income tax liabilities are recognized, except in exceptional circumstances.

Exceptional circumstances in which deferred tax assets or deferred tax liabilities are not recognized include:

• Initial recognition of goodwill;

• Transactions or events that are neither a business combination nor affect accounting profit and taxable income (or deductible losses) at the time of occurrence, and where the assets and liabilities initially recognized do not result in an equal amount of taxable temporary differences and deductible temporary differences.

Deferred tax liabilities are recognized for taxable temporary differences related to investments in subsidiaries, associates and joint ventures unless the group is able to control the timing of the reversal of the temporary difference and it is likely that the temporary difference will not be reversed in the foreseeable future. Deferred tax assets are recognized for deductible temporary differences related to investments in subsidiaries, associates and joint ventures when the temporary difference is likely to be reversed in the foreseeable future and taxable income to offset the deductible temporary differences is likely to be obtained in the future

At the balance sheet date, deferred income tax assets and deferred income tax liabilities are measured at the tax rates applicable to the period during which the underlying asset is expected to be recovered or the underlying liability is settled, in accordance with the tax laws.

On the balance sheet date, the group reviews the carrying value of the deferred tax assets. If it is likely that it will not be possible to obtain sufficient taxable income to offset the benefit of the deferred tax asset in future periods, write down the carrying value of the deferred tax asset. When sufficient taxable income is likely to be obtained, the amount reduced is reversed.

Current income tax assets and current income tax liabilities are presented as the net offset when there is a statutory right to net settlement and the intention is to net settlement or to acquire assets and settle liabilities simultaneously.

At the balance sheet date, deferred income tax assets and deferred income tax liabilities are shown as net offsets when both of the following conditions are met:

• The taxpayer has the legal right to net settlement of current income tax assets and current income tax liabilities;

• Deferred income tax assets and deferred income tax liabilities are related to income tax levied by the same tax administration on the same taxpayer or to different tax entities, but within the period in which each future material deferred income tax asset and liability is repatriated, The taxpayer involved intends to net the current income tax assets and liabilities or to acquire assets and pay off liabilities at the same time.

41. lease

(1) Accounting for the lease as a lessee

The main categories of the leased assets of this group are buildings and land.

Right to use assets

On the commencement date of the lease term, the group recognizes the right of use assets for leases other than short-term leases and low value asset leases. Use rights assets are initially measured at cost. This cost includes:

The initial measurement of the lease liability;

The lease payment amount paid on or before the commencement date of the lease term, if there is a lease incentive, less the amount related to the lease incentive already enjoyed;

initial direct expenses incurred by the group;

costs expected to be incurred by the group for the demolition and removal of the leased asset, the restoration of the premises where the leased asset is located, or the restoration of the leased asset to its condition as agreed in the lease terms, excluding costs incurred for the production of inventory.

The group subsequently adopts the straight-line method to depreciate the right of use assets. If the ownership of the leased asset can be reasonably determined at the end of the lease term, the group shall calculate depreciation during the remaining service life of the leased asset; Otherwise, the leased asset shall be depreciated during the shorter of the lease term and the remaining useful life of the leased asset.

The group shall, in accordance with the principles set out in "4, (19) Impairment of Long-term Assets" of this note, determine whether the assets with the right of use have been impaired, and accounting for the identified impairment losses.

(2) Lease liabilities

At the commencement date of the lease term, the group recognizes lease liabilities for leases other than short-term leases and leases of lowvalue assets. Lease liabilities are initially measured at the present value of outstanding lease payments. Lease payments include:

fixed payment amount (including actual fixed payment amount), if there is lease incentive, less the amount related to lease incentive;

Variable lease payments depending on the index or ratio;

the amount expected to be paid based on the remaining value of the guarantee provided by the group;

The exercise price of the purchase option if the group is reasonably certain that it will exercise the option;

The amount payable to exercise the option to terminate the lease, provided that the lease term reflects that the group will exercise the option to terminate the lease.

The group uses the inherent lease rate as the discount rate, but if the inherent lease rate cannot be reasonably determined, the group's incremental borrowing rate will be used as the discount rate

The group calculates the interest expense of the lease liability during each period of the lease term at a fixed cyclical interest rate and includes it in the profit or loss of the current period or the related asset cost

Variable lease payments that are not included in the measurement of lease liabilities are recognised in profit or loss or related asset costs when actually incurred.

After the commencement of the lease term, if the following circumstances occur, the group will re-measure the lease liability and adjust the corresponding right of use assets. If the book value of the right of use assets has been reduced to zero, but the lease liability still needs to be further reduced, the difference will be recorded in the current profit or loss:

When the evaluation results of the purchase option, renewal option or termination option change, or the actual exercise of the said option is inconsistent with the original evaluation results, the group remeasures the lease liability at the present value of the changed lease payment and the revised discount rate;

When there is a change in the actual fixed payment amount, a change in the estimated amount payable on the guarantee balance, or a change in the index or ratio used to determine the lease payment amount, the group remeasures the lease liability at the present value calculated at the changed lease payment amount and the original discount rate. However, where changes in lease payments result from changes in floating interest rates, the present value is calculated using the revised discount rate

(3) Short-term leases and leases of low-value assets

If the group chooses not to recognize the right of use assets and lease liabilities for short-term leases and low-value asset leases, the relevan lease payments are included in the current profit or loss or the cost of the related assets on a straight-line basis during each period of the lease term. Short-term lease means a lease for a period not exceeding 12 months on the commencement date of the lease term and does not include a purchase option. Low-value asset lease refers to the lease with a lower value when the single leased asset is a brand-new asset. Where the group subleases or intends to sublease leased assets, the original lease is not a low-value asset lease.

(4) Lease change

If the lease changes and the following conditions are met, the group will account for the lease change as a separate lease:

The lease variation expands the scope of the lease by adding the right to use one or more of the leased assets;

The increased consideration is equivalent to the separate price for the extension of the lease, adjusted for the circumstances of the contract. If the lease change is not accounted for as a separate lease, on the effective date of the lease change, the group reappoints the consideration of the changed contract, redetermines the lease term, and remeasures the lease liability according to the present value calculated by the changed lease payment amount and the revised discount rate.

If the lease change causes the lease scope to be reduced or the lease term to be shortened, the group shall adjust the book value of the right o use assets accordingly, and record the gains or losses related to the partial or complete termination of the lease into the current profit or loss. If other lease changes result in the remeasurement of lease liabilities, the group shall adjust the book value of the right to use assets accordingly.

(2) Accounting treatment of the lease as a lessor

On the commencement date of the lease, the group divides the lease into finance lease and operating lease. A financial lease is a lease tha essentially transfers almost all of the risks and rewards associated with the ownership of the leased asset, regardless of whether ownership is ultimately transferred. Operating leases refer to leases other than financial leases. When the group acts as a sublease, subleases are classified based on the right of use assets generated by the original lease.

(1) Accounting for operating leases

Lease receipts from operating leases are recognised as rental income on a straight-line basis during each period of the lease term. The group capitalises the initial direct expenses incurred in relation to the operating lease and apportionments them to profit or loss during the lease period on the same basis as rental income is recognised. Variable lease payments that are not included in lease collections are recognised in curren profit or loss when actually incurred. If an operating lease is changed, the group will account for it as a new lease from the effective date of the change, and the amount received in advance or receivable from the lease before the change will be regarded as the amount received from the new lease.

(2) Accounting treatment of finance lease

On the commencement date of the lease, the group recognizes the financial lease receivable for the financial lease and terminates the recognition of the financial lease assets. When the group makes the initial measurement of the financial lease receivable, the net lease investment is taken as the recorded value of the financial lease receivable. The net lease investment is the sum of the unsecured balance and the present value of the lease proceeds not yet received at the commencement date of the lease term, discounted at the intrinsic interest rate of the lease.

The group calculates and recognises interest income for each period of the lease term at a fixed cyclical rate. The termination recognition and impairment of financial lease receivables are accounted for in accordance with "III. (IX) Financial Instruments" of this note.

Variable lease payments that are not included in the net lease investment measurement are recognised in current profit or loss when actually incurred.

If a financial lease changes and the following conditions are met, the group will account for the change as a separate lease:

The change expands the scope of the lease by adding the right to use one or more of the leased assets;

The increased consideration is equivalent to the separate price for the extension of the lease, adjusted for the circumstances of the contract. If the change of the finance lease is not accounted for as a separate lease, the group shall deal with the changed lease under the following circumstances:

If the change takes effect on the commencement date of the lease, the lease will be classified as an operating lease, and the group wil account for it as a new lease from the effective date of the lease change, and the net lease investment before the effective date of the lease change will be used as the carrying value of the lease asset;

If the change takes effect on the commencement date of the lease, the lease will be classified as a finance lease, and the group will account for it in accordance with the group's policy on modification or renegotiation of the contract under "III (IX) Financial Instruments" in this note.43. Other important accounting policies and estimates

42. Other important accounting policies and accounting estimates

1. Debt Restructuring

As the creditor

When the contractual right of the Group to receive cash flows from the creditor ceases, the Group shall cease to recognize the creditor's claim. For debt restructuring through the settlement of assets or the conversion of debt into equity instruments, the Group shall recognize the relevant assets when they meet the definition and recognition conditions.

For debt restructuring through the settlement of assets, when the Group initially recognizes the non-financial assets acquired, it shall measure them at cost. The cost of inventory includes the fair value of the abandoned creditor's claim and the other costs directly attributable to the asse to bring it to its current location and condition, such as taxes, transportation fees, loading and unloading fees, insurance premiums, and other costs. The cost of an investment in an associate or joint venture includes the fair value of the abandoned creditor's claim and other costs directl attributable to the asset, such as taxes and other costs. The cost of investment property includes the fair value of the abandoned creditor's claim and other costs directly attributable to the asset, such as taxes and other costs. The cost of fixed assets includes the fair value of the abandoned creditor's claim and other costs directly attributable to the asset, such as taxes, transportation fees, loading and unloading fees, installation fees, professional service fees, etc. The cost of biological assets includes the fair value of the abandoned creditor's claim and other costs directly attributable to the asset, such as taxes and other costs. The cost of intangible assets includes the fair value of the abandoned creditor's claim and other costs directly attributable to making the asset reach the predetermined use state, such as taxes and other costs. Debt restructuring through the conversion of debt into equity instruments and resulting in the creditor converting the creditor's claim into equity investment in an associate or joint venture shall be measured by the Group at the fair value of the abandoned creditor's claim and other costs directly attributable to the asset. The difference between the fair value and the book value of the abandoned creditor's claim shall be recognized in the current profi or loss.

For debt restructuring through modifying other terms, the Group shall recognize and measure the restructured creditor's claim in accordance with the "III. (9) Financial Instruments" of this note.

For debt restructuring through the settlement of multiple assets or through a combination, the Group shall first recognize and measure the acquired financial assets and the restructured creditor's claim in accordance with the "III. (9) Financial Instruments" of this note, and then allocate the net amount of the fair value of the abandoned creditor's claim after deducting the recognized amount of the acquired financial assets and the restructured creditor's claim based on the proportion of the fair value of each asset other than the acquired financial assets, an determine the cost of each asset based on the aforementioned methods. The difference between the fair value and the book value of the abandoned creditor's claim shall be recognized in the current profit or loss.

As the debtor

When the current obligation of the Group regarding the debt is discharged, the Group shall cease to recognize the debt.

For debt restructuring through the settlement of assets, the Group shall cease to recognize the debt when the relevant assets and the debt being settled meet the conditions for recognition. The difference between the book value of the debt being settled and the book value of the transferred assets shall be recognized in the current profit or loss.

For debt restructuring through the conversion of debt into equity instruments, the Group shall cease to recognize the debt when the debt bein settled meets the conditions for recognition. When the equity instrument is initially recognized, it shall be measured at the fair value of the equity instrument. If the fair value of the equity instrument cannot be reliably measured, it shall be measured at the book value of the debt being settled The difference between the book value of the debt being settled and the recognized amount of the equity instrument shall be recognized in the current profit or loss.

For debt restructuring through modifying other terms, the Group shall recognize and measure the restructured debt in accordance with the "III. (9) Financial Instruments" of this note.

For debt restructuring through the settlement of multiple assets or through a combination, the Group shall recognize and measure the equity instrument and the restructured debt in accordance with the aforementioned methods, and the difference between the book value of the debt being settled and the sum of the book value of the transferred assets and the recognized amounts of the equity instrument and the restructured debt shall be recognized in the current profit or loss

42. Other important accounting policies and accounting estimates

43. Significant changes in accounting policies and estimates

(1) Changes in important accounting policies

Applicable☑Not applicable

(2) Changes in important accounting estimates

Applicable☑Not applicable

(3) The first implementation of the new accounting standards from 2026 to adjust the financial statements related to the first implementation of the year

Applicable☑ Not applicable

44.other

VI.Taxation

1. The main applicable tax and rate to the Group as follows:

If there are different subjects of enterprise income tax rates, the disclosure shall be explained

In RMB Yuan

2. Tax incentives

The Company obtained the qualification of high-tech enterprise identification on December 12, 2023, and the certificate number of high-tech enterprise identification is GR202321200183, which is valid for 3 years. According to the tax law, the company can enjoy the preferential tax policy of levying enterprise income tax at the rate of 15% within 3 years.

The subsidiary Waxiang Liaoyang Bearing Manufacturing Co., Ltd. obtained the qualification of high-tech enterprise identification on December 20, 2023, and the high-tech enterprise identification certificate number is GR202321002020, valid for 3 years, and can enjoy the preferential tax policy of levying enterprise income tax at a tax rate of 15% within 3 years according to the tax law.

3.other

VII. Notes to consolidated financial statements

1. Monetary fund

In RMB Yuan

2.Trading financial assets

In RMB Yuan

3. Derivative financial assets

4.Notes receivable

（1）Category of notes receivable

In RMB Yuan

(2) Disclosure by classification according to bad debt provision method

Category name of combined bad debt provision: credit risk characteristic combination

In RMB Yuan

Explanation of the basis for determining this combination: Accounts receivable that are both aimed at collecting contractual cash flows and at selling. If the bad debt provision for notes receivable is made in accordance with the general model of expected credit losses:

□ Applicable Not applicable

(3) Bad debt provision of notes receivable accrued, collected and reversed

Bad debt provision of notes receivable：

In RMB Yuan

Among them, the amount of the recovery or reversal of the current bad debt reserve is important:

□ Applicable Not applicable

(4) Pledged notes receivable up to the end of year.

(5)Notes receivable endorsed or discounted but not mature at the end of year

In RMB Yuan

5.Accounts receivable

(1) Age disclosure

In RMB Yuan

(2) Disclosure by classification according to bad debt provision method

In RMB Yuan

Category name for bad debt provision calculated on an individual basis: Accounts receivable for which bad debt provision is calculated on an individual basis In RMB Yuan

Category name for bad debt provision calculated based on combination: Related party combination

In RMB Yuan

The basis for determining this combination is as follows:

In principle, no bad debt provisions will be made unless there is clear evidence indicating that the full or partial recovery of the funds is impossible.

The category name for bad debt provisions calculated based on the combination: Aging Group

In RMB Yuan

The basis for determining this combination is as follows:

Based on historical credit loss experience, combined with the current situation and the forecast of future economic conditions, a table comparing the aging of accounts receivable with the expected credit loss rate over the entire duration is compiled, and the expected credit loss is calculated. If the bad debt provision for accounts receivable is accrued according to the general model of expected credit loss:

□ Applicable  Not applicable

(3) the provision for bad debts accrued, recovered or rolled back during the period Provision for bad debts in the current period:

In RMB Yuan

(4) Accounts receivable actually written off during the current period

In RMB Yuan

The important details regarding the write-off of accounts receivable are as follows:

(5) The receivables and contractual assets of the top five closing balances collected by the defaulting party. In RMB Yuan

6. Contractual assets

(1) Contract assets

(2) The amount and reasons for significant changes in book value during the reporting period

(3) Disclosure by classification according to bad debt provision method

Category name for bad debt provision calculation on a single basis: Bad debt provision is calculated separately through individual assessment

In RMB Yuan

Bad debt provision category: Aging-based grouping

In RMB Yuan

The basis for determining this combination is as follows:

Based on historical credit loss experience, combined with the current situation and predictions of future economic conditions, a table comparing the aging of accounts receivable with the expected credit loss rate over the entire duration is compiled, and the expected credit loss is calculated.

A provision for bad debts is made according to the general model of expected credit loss.

□ Applicable  Not applicable

7. Receivables financing

(1) Classification and listing of receivables financing

In RMB Yuan

（2） Disclosure classified by the bad debt provision method In RMB Yuan

Bad debt provision accounting method: Based on credit risk characteristics

In RMB Yuan

(3)The status of bad debt provisions recognized, recovered, or reversed during the current period

In RMB Yuan

In RMB Yuan

(4) Receivables financing pledged by the Company at the period-end

(5) Accounts receivable financing for which the Company has performed endorsement or discounting but for which the maturity date has not yet arrived as of the balance sheet date

In RMB Yuan

8. Other receivables

In RMB Yuan

(1) Interest receivable

(2) Dividends receivable

(3) Other receivables

1) Classification of other receivables by nature of amounts

2) Aging disclosure

In RMB Yuan

3) Classified disclosure according to bad debt provision method Applicable □ Not applicable In RMB Yuan

Category name for bad debt provision calculated on a single basis: Other receivables that are tested individually and for which bad debt provision is calculated separately In RMB Yuan

Category name for bad debt provision calculated based on combination: Credit risk characteristic combination

In RMB Yuan

The basis for determining this combination:

Apart from the above receivables for which bad debt provisions are made on a single basis, the Group classifies the remaining financial instruments based on their credit risk characteristics into several groups, and determines the expected credit losses on a group basis. Bad debt provisions are made according to the general model of expected credit losses:

In RMB Yuan

The significant changes in the book balance of the loss provision for the current period □ Applicable □ Not applicable

4) Provision for bad debts accrued, recovered or rolled back in the current period

5) Other receivables actually written off during the current period

6) Other receivables in the top five of the closing balances collected by the defaulting party

In RMB Yuan

9. Advance payment

(1) Prepayments are shown according to aging

In RMB Yuan

Explanation for the reasons why overdue prepayments (with an age exceeding one year and significant in amount) have not been settled in a timely manner:

(2) The advance payment of the top five of the closing balance collected by the prepaid object

10. Inventory

Whether the company is required to comply with real estate industry disclosure requirements

no

(1) Inventory classification

In RMB Yuan

(2) Data resources recognized as inventories (3) Reserve for inventory decline and impairment of contract performance costs

In RMB Yuan

11. Holding assets for sale

10. Inventory Whether the company is required to comply with real estate industry disclosure requirements no (1) Inventory classification In RMB Yuan item Ending balance Opening balance Book balance Reserve for Book value Book balance Reserve for Book value

11. Holding assets for sale

12. Non-current assets that mature within one year

13. Other current assets

In RMB Yuan

14. Debt investment

15. Other debt investments

16. Investment in other equity instruments

In RMB Yuan

17. Long-term receivables

18. Long-term equity investment

19. Other non-current financial assets

20. Investment real estate

(1) Investment real estate using cost measurement model

 Applicable □ Not applicable

In RMB Yuan

Recoverable amounts are determined at the net of fair value less disposal costs

□ Applicable  Not applicable

Recoverable amounts are determined at the present value of projected future cash flows

□ Applicable Not applicable

The reason for the discrepancy between the foregoing information and the information used in the previous year's impairment test or externa information

Reasons for the difference between the company's previous annual impairment test information and the actual situation of the year

21. Fixed assets

(1) Fixed assets

In RMB Yuan