深物業集團SZPRD

Shenzhen Properties & Resources Development (Group) Ltd.

2026 Semi-annual Report

(Announcement No.: 2026-26)

[August 2026]

Section I Important Notes, Table of Contents and Interpretations

The Board of Directors, the Directors, and the Executives of the Company guarantee that there are no significant omissions, fictitious or misleading statements carried in the Report and we will accept individual and joint responsibilities for the truthfulness, accuracy and completeness of the Report.

Principal TANG Xiaoping, Chief Finance Officer LIU Qiang and Chief Accountant (accounting officer) CAI Kelin declare that they guarantee the authenticity, accuracy and completeness of the financial report in the Semiannual Report.

All directors have attended the board meeting at which this semi-annual report was considered.

Part of the Company's semi-annual report involves the description of future business plans or business work arrangements. The implementation of relevant plans or arrangements is affected by many factors and does not constitute the Company's substantive commitment to investors. Investors and relevant persons should maintain sufficient risk awareness and understand the differences between plans, forecasts and commitments.

The Company plans not to distribute cash dividends, issue bonus shares, or increase share capital through capitalization of reserves.

Table of Contents

Section I Important Notes, Table of Contents and Interpretations....2

Section II Company Profile and Major Financial Indicators....6

Section III Management's Discussion and Analysis....9

Section IV Corporate Governance, Environment and Society....26

Section V Significant Events ....28

Section VI Share Changes and Shareholder Information....41

Section VII Bonds....47

Section VIII Financial Statements....49

List of Reference Documents

I. Financial statements signed and sealed by the Company's Principal, Chief Finance Officer, and Chief Accountant (accounting officer).

II. The originals of all the Company's documents and announcements that have been publicly disclosed during the reporting period.

Interpretations

Section II Company Profile and Major Financial Indicators

I. Company profile

II. Contact person and contact information

III. Other circumstances

1. Company contact information

Whether the company's registered address, office address and postal code, website, e-mail, etc. have changed during the reporting period

□Applicable Not applicable

The company's registered address, office address and postal code, website, e-mail, etc. have not changed during the reporting period. See 2025 Annual Report for details

2. Information disclosure and storage location

Whether the information disclosure and storage location have changed during the reporting period

□Applicable Not applicable

The website of the stock exchange and the name and address of the media where the company discloses the semi-annual report, and the storage location where the Company's semi-annual report is prepared has not changed during the reporting period. For details, please refer to the 2025 Annual Report.

3. Other relevant information

Whether other relevant information has changed during the reporting period

□Applicable Not applicable

IV. Key accounting data and financial indicators

V. Differences between accounting data under domestic and overseas accounting standards

1. Differences in net profit and net assets in the financial reports disclosed in accordance with the international accounting standards and the Chinese accounting standards

□Applicable Not applicable

During the reporting period of the Company, there was no difference in net profits and net assets in financial reports disclosed in accordance with international accounting standards and Chinese accounting standards.

2. Differences in net profit and net assets in financial reports disclosed in accordance with both the international accounting standards and Chinese accounting standards

□Applicable Not applicable

During the reporting period of the Company, there was no difference in net profits and net assets in financial reports disclosed in

accordance with the international accounting standards and Chinese accounting standards.

VI. Non-recurring profit or loss items and amounts

Applicable □ Not applicable

Unit: RMB

Specific circumstances of other profit or loss items that meet the definition of non-recurring profit or loss:

□Applicable Not applicable

The Company had no specific profit or loss items that meet the definition of non-recurring profit or loss.

Notes on the definition of the non-recurring profit or loss items listed in the "Interpretive Announcement No. 1 on Information Disclosure of Companies Issuing Securities to the Public - Non-recurring Profit or Loss" as recurring profit or loss items

□Applicable Not applicable

The Company had no circumstances of definition of the non-recurring profit or loss items listed in the "Interpretive Announcement No. 1 on Information Disclosure of Companies Issuing Securities to the Public - Non-recurring Profit or Loss" as recurring profit or loss items.

Section III Management's Discussion and Analysis

I. Main business engaged in by the Company during the reporting period

(I) Overview of main business

SZPRD was established in 1982. It was formerly known as Luohu Engineering Construction Headquarters. In August 1985, it was renamed Shenzhen Properties Development Corporation. In 1988, it was identified by Shenzhen government as the second batch of state-owned enterprises to pilot the joint-stock reform. In 1990, it completed the joint-stock reform and was officially renamed Shenzhen Properties & Resources Development (Group) Ltd. In March 1992, the Company's stock (SZPRD A/SZPRD B, 000011/200011) was officially listed on the Shenzhen Stock Exchange.

SZPRD, as Party A of the construction of the International Trade Center Building, played a leading role in orchestrating the entire process of its construction and operation. It is a key creator and organizer of the world-renowned "Shenzhen Speed". The International Trade Center Building is also fortunate to have become an important historic site of DENG Xiaoping's worldrenowned "south tour speeches". The Company was founded as the International Trade Center Building was established and thrived through China's reform and opening-up, growing alongside the miraculous city of Shenzhen. It has become a steadfast practitioner of the "pioneer cattle" spirit in the new era, dedicated to innovative services, and overcoming challenges. The employees of SZPRD uphold the spirit of "daring to be the first and striving for strength through reform and innovation", focus on the functional positioning of state-owned assets of "serving the overall situation, serving the city, serving the industry, and serving the people's livelihood", stick to the original aspiration, and forge ahead with perseverance. The Company has now developed from a project company when it first built the International Trade Center Building to a large-scale comprehensive industrial group.

1. Real estate development

The Company's development sector is committed to the development of different business formats such as residentia buildings, high-end apartments, office buildings, and industrial parks. It has brand projects such as ITC Building, Huanggang Port, Tian'an International Building, Qianhai Port, and Jinling Holiday. Based on the existing real estate development business, the Company will promote the stock optimization and increment development and construction simultaneously. Taking the subordinate companies, such as Huangcheng Real Estate, Rongyao Real Estate and Wuhe Urban Renewal, as the development and urban renewal entities, the Company will optimize the overall layout of its real estate business. During the reporting period, all projects on sale had their promotion strategies adjusted in a timely manner according to market conditions, ensuring a dynamic match between capital investment, construction pace, and market destocking while going all out to complete the annual sales collection task.

2. Property management service

The Company's property management segment is based on International Trade Center Property Management. As one of the first batch of national first-class property management qualified enterprises, International Trade Center Property Management has, after more than 30 years of development, become a domestic first-class property service provider with diversified business capabilities and technological strength. It has been rated as "Top 100 property management Enterprises in China" and "Excellen Enterprise for China Industrial Park Property Management" for many years in a row. The projects under its management are spread all over the country, and its business radiates to various regions of the country, including South China, Southwest China, East China, North China, as well as the Vietnam-Vietnam Cooperation Zone. The existing business has covered various formats such as industrial parks, cultural tourism scenic spots, government agencies, rail transit, housing, hospitals, schools, hotels, etc., and basically form a good pattern of multi-format comprehensive development. International Trade Center Property Management has more than 20 subsidiaries, leveraging its headquarters' functional departments as a platform to actively build three major centers, namely "market, empowerment, and supervision". It has established business centers and profit centers based on the three major modules featuring professional business companies, professional companies, and regional companies, aiming to achieve a sustainable and effective "1+1 >2" coordinated development new pattern.

3. Asset operation

The asset operation sector makes full use of the Company's development foundation and entire industrial chain development advantages in the three basic industries of real estate development, property management and leasing, focuses on the two strategic starting points of "value-added operation of stock assets" and "light asset operation output", strengthens internal and external strategic cooperation, is committed to building a closed-loop of the whole industry ecology covering project development services, park operation services, supporting leasing operations, etc., continuously optimizes the space service and leasing ecosystem in th park, and has initially possessed the whole chain capabilities and experience of various assets from the early planning, project clearance, construction control, investment promotion, operation, on-site control, etc., forming a unique and mature business development model. The Company actively explores and takes the initiative to operate the property of ITC Shopping Mall by adopting the self-operated mode, and has taken a firm step in the journey of creating the Group's independent commercial brand and exploring market-oriented commercial operations.

4. Other business

During the reporting period, the Company's business also includes catering business and project supervision business. The catering business is operated by Shenzhen Guomao Catering Co., Ltd. Guomao Catering was established in 1986 and became famous at home and abroad as the place where the "Southern Tour Speech" was delivered in 1992. Since its opening, it has received more than 600 Chinese and foreign dignitaries, celebrities and countless Chinese and foreign guests, and its reputation has spread far and wide both at home and abroad. The engineering supervision business is operated by a supervision company, which has Class A supervision qualification for housing construction projects from the Ministry of Construction. Its predecessor was the SZPRD Management Department. It was directly involved in the construction and management of the Shenzhen International Trade Building and witnessed the entire process of creating the "Shenzhen Speed". It has long been mainly serving the group's development projects.

The Company shall comply with the disclosure requirements for the real estate industry as set out in the Guidelines for Self-Regulation of Listed Companies of Shenzhen Stock Exchange No. 3 - Industry Information Disclosure

(II) Development of the industry

1. Real estate

In the first half of 2026, China's real estate market was generally in a phase of adjustment and recovery. The industry is characterized by steady adjustment, structural divergence and quality-driven transformation. Macro-control policies adhered to the orientation of seeking progress while maintaining stability and implementing city-specific policies. Policy priorities focused on market risk mitigation, vitalization of stock resources, and the improvement of the industry's long-term governance system. The industry gradually shifted from traditional incremental development to stock quality enhancement and refined operation.

Policies at all levels were continuously optimized to deliver on the requirements of ensuring timely housing delivery, safeguarding people's livelihood, and maintaining stability. Local governments tailored their regulatory measures to regiona market conditions, supporting reasonable housing demand for both first-time homebuyers and those seeking improved living conditions. On the financial front, supporting policies related to real estate financing were continuously implemented to improve the industry's financing environment. The market showed prominent structural divergence. Key cities maintained relatively stable market performance with solid demand fundamentals; Most small and medium-sized cities faced relatively high market adjustment pressures. Transaction activity in the secondary housing market rose steadily, with the share of existing-home sales gradually increasing. The overall investment in the industry became more prudent. Market participants grew more cautious in decisionmaking. The internal structure of the industry kept improving alongside steady uplift in development quality.

2. Property management

As the kick-off year for the 15th Five-Year Plan, 2026 saw the property management industry's policy standing further elevated. Improvement of property service quality was listed as a national priority. Local governments accelerated the roll-out of supporting regulatory rules, building up a sound compliance supervision system. The industry gradually shifted from scal expansion to high-quality development. Market competition centered on existing projects, as the growth space for traditional residential property management remained limited. Enterprises actively expanded into urban services and community value-added services, while digital and intelligent transformations proceeded in an orderly manner.

The industry continued to face multiple operational challenges: rigid increases in labor costs, pressure on property fee collection for some projects, weakening growth momentum of value-added services, and rising frictional costs of exiting stock projects. Industry development exhibited divergent characteristics, with leading enterprises consolidating their market positions based on comprehensive operational advantages, while small and medium-sized property enterprises faced increasing operational pressure. Overall, the industry was in a phase of transformation and adjustment, with quality-price alignment and complian operation as core development priorities.

(III) The Company's operation during the reporting period

In the first half of 2026, facing a complex external environment characterized by profound industry adjustments and intertwined risks and challenges, the Company adhered to the working guideline of "destocking, risk prevention, quality and efficiency enhancement, and transformation promotion", focused on the core tasks of inventory destocking, asset revitalization, and risk mitigation to overcome difficulties, and pushed ahead with all work in good order. Affected by multiple factors such as the industry cycle and project carry-over, the Company's profitability was under pressure during the reporting period, while overall operations remained controllable. During the reporting period, the Company realized an operating income of approximately RMB1.2 billion and a total profit of approximately RMB-82.02 million.

The real estate development segment worked in tandem in destocking and risk prevention, continuously consolidating its operational foundation. Seizing the window of continued policy easing and market bottoming and recovery in the first half, the development segment accelerated the sales pace and enhanced cash collection efficiency for key projects such as Yutang Shangfu Project and Lake City Project, aligning with the release of both primary and improvement housing demand. Certain progress was achieved. The recovered funds were prioritized to guarantee project construction, rigid debt servicing, and core operationa expenditures, supporting the smooth operation of the Company's cash flow.

The property management service segment deepened quality and efficiency enhancement, continuously enhancing development resilience. On the market front, it actively developed high-level business lines such as government services, and deeply integrated into the urban public service system; On the operation front, it deeply tapped into the potential of quality improvement and cost reduction, and orderly advanced tasks such as the integration of professional companies, the expansion o value-added services, and the collection of accounts receivable, achieving simultaneous improvements in service efficiency and operational quality.

The asset operation segment deeply explored the value of existing assets, accelerating the accumulation of transformation momentum. In the first half of the year, the commercial renewal and upgrading of the International Foreign Trade Center was completed, and the self-operated brand "ITC SPRING" shopping mall was officially opened in June, becoming a vivid example o state-owned enterprises activating traditional business commercial premises and achieving mutual promotion and win-win results between historical and cultural heritage and modern commercial development. In addition, the "ITC SPRING" Guangmingli community commercial project was successfully opened, the Qianhai Longwan commercial project was steadily advanced, and the Tianan Xingkong Digital Intelligence Incubation Center was successfully landed, with both asset-light export and industrial space operation showing initial results; The Company simultaneously launched the top-level design of the commercial property platform, building a solid framework for the systematic development of the commercial property business.

New land reserve projects

Cumulative Land Reserve

Development of main projects

Sales of main projects

Leasing of main projects

Level-I land development

□Applicable Not applicable

Financing approach

Development strategy and business plan for the next year

Since the start of 2026, despite a complex domestic and international landscape, the Chinese economy has withstood pressures and maintained an overall stable, innovative, and high-quality development trajectory. In recent years, in accordance with the decision-making and deployment of the CPC Central Committee, local authorities have implemented city-specific policies to continuously optimize and adjust real estate policies. These include controlling new supply, reducing inventory, improving supply quality, gradually easing purchase restrictions, deepening reforms to the housing provident fund system, and promoting urban renewal and redevelopment. By addressing both supply and demand sides, they have rolled out a coordinated policy package. Shenzhen Properties & Resources Development (Group) Ltd. will base itself on the overall reform of Shenzhen's state-owned enterprises as well as requirements under the "15 Five-Year Plan", closely adhere to the strategic theme of "deepening the main business, empowering with digital intelligence, and strengthening the foundation", and deliver targeted measures and continuous efforts around the four major aspects of "revitalizing existing assets, preventing risks, enhancing quality and efficiency, and promoting transformation", to promote the coordinated quality improvement of the three major main businesses of real estate development, property management services, and Asset operation, and steadily achieve sustainable and high-quality development. In the coming year, the Group's top priority is the destocking of existing sales and the recovery of funds, and its important goal is to accelerate the high-quality development of property management, while comprehensively deepening quality and efficiency enhancement, and further improving the modernization level of the enterprise governance system and governance capability. In terms of sales collection, the Group will dynamically adjust the promotional strategies for projects on sale to achieve a dynamic alignment between fund recovery, construction pace, and sales destocking; In terms of project development, the Group will steadily promote the development and construction of the Lake City Project and the Shenyang Digital Intelligent City Project, create high-quality benchmark demonstration projects, continuously improve development capabilities, strengthen quality control, deepen lean management, enhance the comprehensive competitiveness of products, and achieve the practical verification and iterative optimization of the standardized achievements of "quality houses"; In terms of land reserves, we will deeply explore the value of existing assets, and explore a new model for business development with consideration to the market, to obtain more resources for the Company's sustainable development.

The above business plans and business objectives do not represent the listed company's profit forecast for 2026. Whether they can be realized depends on various factors such as changes in market conditions and the efforts of the business team, and there are great uncertainties. Investors should pay special attention to them.

Guarantee to buyers of commercial housing for bank mortgage

Applicable □ Not applicable

As a real estate developer, the Company has provided mortgage loan guarantee and paid loan deposits for buyers of commercial housing according to the operating practice of the real estate industry. As of June 30, 2026, the balance of deposits for which the guarantee hasn't yet been released stood at RMB1,136,683.23, and the said guarantee will be released upon the full repayment of the mortgage loans.

As a real estate developer, the Company has provided mortgage loan guarantee for buyers of commercial housing in accordance with the operating practice of the real estate industry. As of June 30, 2026, the balance of the guarantee that has no been released was RMB503,492,505.14, and the said guarantee will be released upon the full repayment of the mortgage loans. Joint investments by directors and senior management and the listed company (applicable for such investments where the directors and senior management are the major source of investment)

Applicable Not applicable

II. Analysis of core competitiveness

Advantages of brand and cultural accumulation: As a state-owned enterprise under the Shenzhen Municipal Government, SZPRD has gone through 40 years of magnificent and pioneering development, and has gradually formed a diversified development pattern with real estate development as its main industry, involving property management, urban renewal, asset operation, industrial investment, etc. The brand value and comprehensive strength of "Shenzhen Property" that carries the spirit o reform and opening up of the International Trade Center Building have been highly recognized by the market. The company was born because of the International Trade Center Building, prospered because of reform and opening up, and coexists and grows with the miracle city of Shenzhen. "Dare to be the first, change and strive for strength" the combination of this corporate culture and the "Pioneer Cattle" spirit of overcoming difficulties has become a guide for action to promote SZPRD's excellent leap from "Shenzhen speed" to "Shenzhen quality".

Advantages of the entire industrial chain: Over the years, SZPRD formed advantages in the entire industrial chain including project acquisition, development and construction, investment promotion and sales, leasing management and property management. In particular, it has formed obvious segmentation advantages in high-end park basic services and property qualit services, which has forged the company's core competitiveness.

Advantages of industrial-city integration: The Company's development segment is committed to the development of different business formats such as residential, high-end apartments, office buildings, and industrial parks. From the earliest ITC urban complex and Huanggang Port area development to the development and operation of the large-scale industrial-city complex Lake City Project and the operation of ITC Spring Shopping Mall, the advantages of SZPRD characteristic development products of industrial-city complexes have been highlighted. With the implementation of a series of urban renewal project and industria land acquisition projects, the advantages of industrial-city integration will be further consolidated and enhanced.

Advantages of market-oriented mechanism: The Company has always adhered to deepen the implementation of a marketoriented operation mechanism and continuously push forward the reform of its system and mechanism. Currently, a marketoriented operation mechanism covering the entire process and chain from the front end (resource acquisition) to the middle end (resource development) and the back end (value realization) has been basically formed. Especially in full-cycle engineering management, full-process cost control, and full-module human resource management, we have benchmarked against the market conditions and industry standards, respected the market laws, improved the operating mechanisms, and continuously maintained the Company's vitality and development efficiency. All business operations were carried out in an orderly manner and have achieved good results.

III. Analysis of primary business

Overview

See the relevant contents of "I. Main business engaged in by the Company during the reporting period".

YoY changes in key financial data Unit: RMB

Significant changes in the Company's profit composition or profit sources during the reporting period □Applicable Not applicable There were no significant changes in the Company's profit composition or profit sources during the reporting period.

Composition of operating revenue

Unit: RMB

Industry, product or region accounting for more than 10% of the Company's operating revenue or operating profit Applicable □ Not applicable Unit: RMB

Under the circumstances that the calculation method of the Company's main business data is adjusted during the reporting period, the Company's main business data for the latest period is adjusted according to the calculation method at the end of the reporting period □Applicable Not applicable

IV. Analysis of non-primary business

Applicable □ Not applicable

Unit: RMB

V.Analysis of assets and liabilities

1. Major changes in asset composition

Unit: RMB

2. Main overseas assets

□Applicable Not applicable

3. Assets and liabilities measured at fair value

Applicable □ Not applicable

Unit: RMB

Other changes

Other changes are affected by changes in exchange rates

Whether there were significant changes in the measurement attributes of the Company's major assets during the reporting period □ Yes  No

4. Restrictions on asset rights as of the end of the reporting period

[Note 1]: Among the monetary funds with restricted right of use at the end of the period, RMB2,200,000.00 was the bank guarantee deposit of the subsidiary Shenzhen Shenfubao Property Development Co., Ltd.

[Note 2]: Among the monetary funds with restricted right of use at the end of the period, RMB3,000,000.00 was frozen by the court due to pre-litigation preservation for contract disputes of the subsidiary Shenzhen Facility Management Community Co., Ltd. [Note 3]: Among the monetary funds with restricted right of use at the end of the period, RMB138,064.00 was the bank guarantee deposit of the subsidiary Shenzhen Facility Management Community Co., Ltd.

[Note 4]: Among the monetary funds with restricted right of use at the end of the period, RMB162,969.00 was frozen due to a lawsuit involving the subsidiary Shenzhen ITC Technology Park Service Co., Ltd.

[Note 5]: Among the monetary funds with restricted right of use at the end of the period, there are RMB72,945,382.18 of time deposits purchased at the end of the period and their interest.

[Note 6]: Among the monetary funds with restricted right of use at the end of the period, RMB50,385.39 was the collection business guarantee of the subsidiary Shenzhen Jiayuan Property Management Co., Ltd.

[Note 7]: Among the monetary funds with restricted right of use at the end of the period, RMB490,350.40 was the performance guarantee deposit of the subsidiary Shenzhen International Trade Center Property Management Co., Ltd.

[Note 8]: Among the monetary funds with restricted right of use at the end of the period, there is RMB1,136,683.23 which is the loan guarantee provided by the Company as a real estate development and paid for the buyers of commercial housing according to the real estate operation practice.

[Note 9]: To meet the needs of daily business operations, the Company applied for a loan from the bank, and mortgaged the partial land use rights and buildings under construction of Lake City Project.

[Note 10]: Due to the needs of daily operating activities, the Company applied for a loan from the bank, and mortgaged the land use right of Plots B & D of Shenyang Digital Intelligent City Project and the construction in progress of Plot D.

[Note 11]: Due to the needs of daily operating activities, the Company applied for a loan from bank, and mortgaged the self-owned commercial properties it held.

VI. Analysis of investment status

1. Overall situation

□Applicable Not applicable

2. Major equity investments acquired during the reporting period □Applicable Not applicable

3. Major non-equity investments in progress during the reporting period □Applicable Not applicable

4. Investment in the financial assets

(1) Securities investment

Applicable □ Not applicable

Unit: RMB

(2) Derivative investment

□Applicable Not applicable

The Company had no derivative investment during the reporting period.

5. Use of funds raised

Applicable □ Not applicable

(1) Overall use of raised funds

Applicable □ Not applicable

Unit: RMB10,000

Description of overall use of raised funds:

On September 3, 2025, the Company received the No-objection Letter (SZSE Letter [2025] No. 850) from the Shenzhen Stock Exchange, approving the non-public issuance of bonds not exceeding RMB1.2 billion. On November 27, 2025, the Company issued the first tranche of corporate bonds amounting to RMB550 million (referred to as "25 SZPRD 01") with a term of 3 years and a coupon rate of 2.30%. The raised funds were used in strict accordance with the fund utilization plan in the offering memorandum. As of June 30, 2026, RMB548.9815 million of the raised funds had been used to repay the interest-bearing debts.

(2) Committed projects of raised funds

□Applicable Not applicable

Major subsidiaries and participating companies with an impact of 10% or more on the Company's net profit

(3) Project changes of raised funds

□Applicable Not applicable

There were no changes in raised funds during the reporting period of the Company.

VII. Sale of major assets and equities

1. Sales of major assets

□Applicable Not applicable

The Company did not sell major assets during the reporting period

2. Sale of major equity

□Applicable Not applicable

VIII. Analysis of major holding and participating companies

Applicable □ Not applicable

Unit: RMB

Information on acquisition and disposal of subsidiaries during the reporting period

□Applicable Not applicable

Notes to main holding and participating companies

IX. Structured entities controlled by the Company

□Applicable Not applicable

10. Risks faced by the Company and countermeasures

1. Market risk

Against the dual background of macro-policy regulation and profound adjustment of the industry cycle, the demand structure in the real estate market continued to diverge, the resource dividends relied upon by traditional real estate development gradually faded, and the industry competition logic underwent a profound transformation. The focus of competition gradually shifted from traditional resource acquisition to comprehensive competition in operational efficiency, product quality, and refined management, putting continuous pressure on the overall profit margin of the industry. Meanwhile, the property management industry has entered a stock-based competition phase with shrinking incremental market space. Coupled with rigid rises in labor costs and slower growth momentum for value-added services, the sector faces challenges to its profitability resilience.

In response to the complex landscape, the Company has conducted in-depth assessments of the opportunities and challenges arising from macroeconomic trends, policy shifts, and market volatility. It remains committed to prudent operations, continuously optimizing its business portfolio, driving internal quality and efficiency improvements, and strengthening its overall risk-resilience capabilities to adapt to the new industry landscape and withstand cyclical fluctuations

2. Business risk

The real estate industry as a whole is still in a period of profound adjustment. Although under policy support, "price-forvolume" sales in major first-tier cities have shown tentative signs of market bottoming-out and recovery. Nevertheless, divergence across cities, intra-city districts, sub-markets and individual projects remains prominent, and difficulties in destocking project sales stay severe.

The Company will continue to closely monitor the market environment and policy trends, pay attention to the promotion dynamics of competitive projects, and actively respond to market changes; Try to be close to the market as much as possible, reasonably formulate the annual marketing plan and sales strategy of the project, and accurately grasp the market turnaround to fully launch the promotion; Actively carry out various customer acquisition work, effectively expand customer resources, and make every effort to promote the achievement of the annual sales target as scheduled.

3. Financial and cash flow risks

The real estate development and urban renewal businesses are characterized by capital intensity and long cycles, placing high demands on capital planning and liquidity management. In recent years, affected by the pace of market sales and project development investment, the phased balance pressure on the Company's operating cash flow has increased. In addition to its own funds, the Company's project development funds also need to be financed externally through bank borrowings and other means.

At present, the Company is in a sound financial position with good credit standing. In the future, the Company will further strictly control financial risks, continuously optimize the debt structure, actively expand diversified financing channels, guarantee the capital requirements for project development, construction, and operation turnover, and continuously maintain the safety of the Company's cash flow and financial soundness.

XI. Formulation and implementation of market value management system and valuation improvement plan

Whether the Company has formulated a market value management system.

□ Yes  No

Whether the Company has disclosed plans for valuation enhancement.

□ Yes  No

XII. Implementation of the action plan of "double improvement of quality and return"

Whether the company has disclosed the announcement of the action plan of "double improvement of quality return". □ Yes  No

Section IV Corporate Governance, Environment and Society

I. Changes in directors and senior management of the Company

Applicable □ Not applicable

II. Profit distribution and conversion of capital reserves into share capital during the reporting period

□Applicable Not applicable

The Company plans not to distribute cash dividends, issue bonus shares, or convert capital reserves into share capital for half a year.

III. Implementation of the Company's equity incentive plan, employee stock ownership plan (ESOP) or other employee incentives

□Applicable Not applicable

During the reporting period, the Company had no equity incentive plan, employee stock ownership plan or other employee incentive measures and their implementation.

IV. Environmental information disclosure

Whether the listed company and its main subsidiaries are included in the list of enterprises required to disclose the environmental information by law □ Yes  No

V. Social responsibilities

(I) Paying taxes in compliance with the laws and safeguarding shareholders' rights and interests

In the first half of 2026, the Company and its subsidiaries fulfilled their tax obligations in accordance with the laws, paying taxes and fees of RMB149 million in full. The Company continued to improve the modern corporate governance system, strictly regulated the operation process of the general meeting of shareholders, smoothed the communication and interaction channels with shareholders, continuously enhanced the transparency of operational information, and effectively protected the legitimate rights and interests of all shareholders.

(II) Stabilizing and expanding employment and enriching the talent team

In the first half of 2026, the Company actively expanded employment channels, offered job vacancies, carried out recruitment in an orderly manner, and absorbed key groups such as fresh college graduates and demobilized military personnel. The Company continued to build a hierarchical and classified training and growth system, strengthened post capability empowerment, and continuously optimized the structure of the internal talent team.

(III) Safeguarding employees' rights and interests and assisting disadvantaged groups

In the first half of 2026, the Company strictly implemented relevant laws and regulations on labor security, ensuring that social insurance was paid in full. The Company organized regular special training on work safety, occupational health, and

emergency response, and provided labor protection articles in full; The Company extensively carried out skills competitions and cultural, sports, and recreational activities, realized full coverage of annual health checkups for all employees, and effectivel safeguarded employees' labor and health rights and interests. The Company improved the regular mechanism for surveying and filing employees and Party members in need. During the Spring Festival, the Company completed visits to identified recipients, extended condolences to Party members and employees in difficulty, and delivered care packages through symposiums and othe forms of communication, passing on the care and warmth of the organization

(IV) Strengthening the blood donation brand and highlighting the public welfare power of Party building

From May to June 2026, the Company organized the 15th "Red Flag - Red Action" public welfare blood donation activity, set up a temporary blood collection point at ITC Spring Shopping Mall, and collaborated with sub-districts and blood centers to provide services. The campaign covered 11 affiliated operating units, with over 400 participants and 127 successful donors, collecting a total of 46,150 ml of blood, earning recognition from local health authorities. Launched in 2011, this branded even has run for 15 consecutive sessions and formed a regular public‑welfare framework covering South China, North China, East China and Southwest China. By the end of June 2026, a total of more than 3,200 employees had participated, with 2,757 successful blood donations and a total blood donation of 990,000 ml. It has been commended by blood centers in various regions for many times.

(V) Expanding volunteer practice and jointly building a community ecosystem for public benefit

First, carry out volunteer activities for civilized city development. The Company organized employees to participate in building a civilized city on a regular basis, and carried out traffic guidance, park order maintenance, and supervision of household waste sorting, thereby contributing to grassroots governance. Second, strengthen the joint construction of neighborhood culture. All property service projects under management carried out folk activities such as sending Spring Festival couplets, guessing lantern riddles, and making zongzi in combination with traditional festivals, to enhance residents' living well-being and sense of community belonging. Third, hold commercial public-welfare events for public benefits. ITC Spring regularly holds charity bazaars for pet adoption, and the proceeds are earmarked for stray‑animal care and assistance for disadvantaged groups; In collaboration with the Health Commission, it set up consultation points for aesthetic medicine popularization and consumer rights protection. Exclusive consumption discounts are offered to teachers and newly-wedded couples to implement requirements fo boosting consumption and improving people's livelihood

(VI) Leveraging consumption assistance to consolidate poverty alleviation achievements

The Company has thoroughly implemented the work deployment of the "Hundred, Thousand, and Ten Thousand Project" of the Provincial Party Committee, taking the targeted procurement of agricultural and sideline products from assisted areas as the core starting point, continuously widening the channels for farmers to steadily increase their income, and effectively consolidating and expanding the achievements of poverty alleviation. In the first half of 2026, subsidiaries of the Group at all levels purchased agricultural products worth a total of RMB655,700 for consumption-based assistance. Meanwhile, it completed the distribution of materials for designated assistance and delivered targeted support in a precise manner.

Section V Significant Events

1. Commitments made by the Company's actual owner, shareholders, related parties, acquirers, the Company and other related parties that have been fulfilled within the reporting period and those that have not been fulfilled as of the end of the reporting period

□Applicable Not applicable

During the reporting period, there were no commitments that have been fulfilled by the Company's actual controller, shareholders, related parties, acquirers, the Company and other related parties during the reporting period and have not been fulfilled beyond the time limit as of the end of the reporting period.

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

□Applicable Not applicable

During the reporting period, there were no non-operational funds occupied by the controlling shareholders and other related parties for the listed company.

III. Illegal external guarantees

□Applicable Not applicable

The Company had no illegal external guarantee during the reporting period.

IV. Appointment and dismissal of the accounting firm

Whether the semi-annual financial report has been audited

□ Yes  No

The Company's semi-annual report has not been audited.

V. Explanation of the Board of Directors on the "modified audit report" of the accounting firm during the reporting period

□Applicable Not applicable

VI. Explanation of the Board of Directors on the "Modified Audit Report" of the previous year

□Applicable Not applicable

VII. Matters relating to bankruptcy and reorganization

□Applicable Not applicable

During the reporting period, the Company had no bankruptcy restructuring related matters.

VIII. Litigation matters

Significant litigation and arbitration

Applicable □ Not applicable

Note: 1 and its interest Other litigation matters Applicable □ Not applicable

IX. Penalties and rectification

□Applicable Not applicable

There was no punishment or rectification during the reporting period.

X. Integrity status of the Company and its controlling shareholders and actual owner

□Applicable Not applicable

XI. Major related party transactions

1. Related party transactions related to daily operations

Applicable □ Not applicable

2. Related party transactions arising from the acquisition and sale of assets or equity

□Applicable Not applicable

During the reporting period, the Company had no related party transactions arising from the acquisition or sale of assets or equity.

3. Related party transactions arising from joint external investment

□Applicable Not applicable

During the reporting period, the Company had no related party transactions arising from joint external investment.

4. Related claims and debts

Applicable □ Not applicable

Existence of non-operational related party debt and credit transactions

Yes □ No

Receivables from related party (claims)

Payables to related parties (debts)

5. Information on transactions with finance companies with related relationship

□Applicable Not applicable

There was no deposit, loan, credit or other financial business between the Company and the finance companies with related relationship and their related parties.

6. Transactions between the Company's holding finance companies and its related parties

□Applicable Not applicable

There was no deposit, loan, credit or other financial business between the Company's holding finance companies and its related

parties.

7. Other major related party transactions

□Applicable Not applicable

The Company had no other major related party transactions during the reporting period.

XII. Major contracts and their performance

1. Custody, contracting and lease matters

(1) Custody

Applicable □ Not applicable

Explanation on entrustment

In November 2019, the Company acquired 100% equity of the former Shenzhen Investment Holdings Property Management Co., Ltd. (hereinafter referred to as "former SIHPM") held by Shenzhen Investment Holdings Co., Ltd. (hereinafter referred to as "SIHC"). Given the historical legacy issues and the complexity of dealing with some land assets of the former SIHPM, in order to maintain the stability and development of the former SIHPM after the equity transfer, SIHC, Shenzhen Shentou Propert Development Co., Ltd. (hereinafter referred to as "Shentou Development") and the Company jointly signed the Entrusted Operation and Management Agreement for Divested Land and Property of Shenzhen Properties & Resources Development (Group) Ltd. Through mutual agreement, and in order to ensure operational efficiency of the assets and maintain the stability of the Company's leasing business segment, the three parties entered into a supplementary agreement, with the entrustment term running from January 1, 2026 to December 31, 2026. The underlying assets consist of 32 items, including but not limited to commercial premises, office buildings, residential properties, staff dormitories, industrial workshops and parking lots, with a total managed area of 210,837.86 square meters (comprising 199,137.86 square meters of building area and 11,700 square meters of land area). For details, please refer to the Announcement on Signing the Supplementary Agreement IV to the Entrusted Operation and Management Agreement for Divested Land and Property with a Related Party and the Related Party Transaction (Announcement No.: 2025-72) disclosed by the Company on Cninfo on December 31, 2025.

The project bringing about the Company's profit or loss as over 10% of total profit in the Reporting Period

Note: 1 Due to the impact of the internal cost allocation mechanism, it is difficult to fully separate and collect the direct and indirect costs attributable to the entrustment business. The entrustment income is for estimation only and does not represent profit or loss figures in the Company's audited financial statements.

(2) Contracting

□Applicable Not applicable

During the reporting period, the Company had no contracting.

(3) Leases

□Applicable Not applicable

During the reporting period, the Company had no leases.

2. Significant guarantees

Applicable □ Not applicable

Unit: RMB10,000

Explanation of the specific situation of the guarantee by the adoption of composite method

3. Entrusted wealth management

Applicable □ Not applicable

Unit: RMB10,000

Details of high-risk entrusted wealth management where the Company, as a single client, entrusts a financial institution for asset management, or invests in products with low safety and poor liquidity □Applicable Not applicable

4. Other major contracts

□Applicable Not applicable

There were no other major contracts of the Company during the reporting period.

XIII. Registration form for reception, survey, communication, interview and other activities during the reporting period

Applicable □ Not applicable

XIV. Notes to other major matters

□Applicable Not applicable

The Company had no other major matters to be explained during the reporting period.

XV. Major matters of the Company's subsidiaries

□Applicable Not applicable

Section VI. Share Changes and Shareholder Information

I. Changes in shares

1. Changes in shares

Unit: shares

Reasons for changes in shares

□Applicable Not applicable

Approval of changes in shares

□Applicable Not applicable

Transfer of changes in shares

□Applicable Not applicable

Implementation progress of share repurchase

□Applicable Not applicable

Progress of the implementation of the reduction of repurchased shares through centralized bidding

□Applicable Not applicable

Effect of changes in shares on financial indicators such as basic earnings per share and diluted earnings per share in the latest year and the latest period, and net assets per share attributable to the Company's ordinary shareholders

□Applicable Not applicable

Other contents deemed necessary by the Company or required by the securities regulators to be disclosed

□Applicable Not applicable

2. Changes in restricted shares

□Applicable Not applicable

II. Issuance and listing of securities

Applicable □ Not applicable

Notes on issuance of securities during the reporting period

III. Number of the Company's shareholders and shareholding ratios

Unit: shares

Participation of shareholders holding more than 5% of the shares, the top 10 shareholders and the top 10 shareholders of unrestricted tradable shares in refinancing business and lending shares

□Applicable Not applicable

Changes of the top 10 shareholders and the top 10 shareholders of unrestricted tradable shares compared with the previous period due to refinancing lending/repayment

□Applicable Not applicable

Whether the Company's top 10 ordinary shareholders and the top 10 ordinary shareholders without restrictive condition for sales conduct any agreed repurchase transactions during the reporting period

□ Yes  No

The Company's top 10 ordinary shareholders, and top 10 ordinary shareholders without restrictive condition for sales did not conduct any agreed repurchase transaction during the reporting period

IV. Changes in shareholdings of directors and senior officers

□Applicable Not applicable

There was no change in the shareholdings of the Company's directors and senior officers during the reporting period. For details, please refer to the 2025 Annual Report.

V.Changes in controlling shareholders or actual controllers

If the Company previously disclosed that the actual controller planned a change of control but it has not been completed, please explain the progress of the change of control.

□Applicable Not applicable

Changes in controlling shareholders during the reporting period

□Applicable Not applicable

There was no change in the controlling shareholder of the Company during the reporting period.

Changes in actual owner during the reporting period

□Applicable Not applicable

There was no change in the actual owner of the Company during the reporting period.

VI.Preferred stock

□Applicable Not applicable During the reporting period, the Company had no preferred shares.

Section VII Bonds

Applicable □ Not applicable

I. Enterprise bonds

□Applicable Not applicable

No enterprise bonds in the Reporting Period.

II. Corporate bonds

Applicable □ Not applicable

1. Basic Information of the Corporate Bonds

Unit: RMB10,000

Overdue bonds

□Applicable Not applicable

2. The Trigger and Execution of the Option Clause of the Issuers or Investors and the Investor Protection Clause

□Applicable Not applicable

3. Adjustment of Credit Rating Results during the Reporting Period

□Applicable Not applicable

4. Execution and Changes of Guarantee, Repayment Plan and Other Repayment Guarantee Measures as well as Influence on Equity of Bond Investors during the Reporting Period

□Applicable Not applicable

III. Debt financing instruments of non-financial enterprises

□Applicable Not applicable No such cases in the Reporting Period.

IV. Convertible corporate bonds

□Applicable Not applicable

No such cases in the Reporting Period.

V. Losses of scope of consolidated financial statements during the reporting period exceeding 10% of net assets up the period-end of last year

□Applicable Not applicable

VI. Major accounting data and the financial indicators of the recent 2 years of the company as at the end of the reporting period

Unit: RMB10,000

Section VIII Financial Statements

I. Audit report

Whether the semi-annual report has been audited

□ Yes  No

The Company's semi-annual financial report has not been audited.

II. Financial statements

The unit in the notes to the financial statements is: RMB

1. Consolidated balance sheet

Prepared by: Shenzhen Properties & Resources Development (Group) Ltd.

Unit: RMB

Legal representative: TANG Xiaoping Chief Finance Officer: LIU Qiang Chief Accountant: CAI Kelin

2. Balance sheet of the parent company

Unit: RMB

3. Consolidated income statement

Unit: RMB

In case of any business combination under the same control in the current period, the net profit realized by the combinee before the combination was RMB, and the net profit realized by the combinee in the previous period was RMB Legal representative: TANG Xiaoping Chief Finance Officer: LIU Qiang Chief Accountant: CAI Kelin

4. Income statement of the parent company

Unit: RMB

5. Consolidated statement of cash flows

Unit: RMB

6. The statement of cash flows of the parent company

Unit: RMB

7. Consolidated statements of changes in owners' equity

The current period

Unit: RMB

Amount for the previous year Unit: RMB

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

The current period

Unit: RMB

Amount for the previous year Unit: RMB

III. Company profile

Shenzhen Properties & Resources Development (Group) Ltd. (hereinafter referred to as "the Company") was established with the approval of the Shenzhen Municipal People's Government of Guangdong Province under the official document SFBF [1991] No. 831. It was restructured from the former Shenzhen Properties Development General Company into a joint stock limited company, registered with the Shenzhen Administration for Market Regulation on January 17, 1983, and headquartered in Shenzhen, Guangdong Province. The Company currently holds a Business License for Enterprise Legal Person with the registration number/unified social credit code 91440300192174135N, a registered capital of RMB595,979,092, and a total of 595,979,092 shares (with a par value of RMB1 per share). Of which, restricted tradable shares include 1,898,306 A shares and 0 B shares； unrestricted tradable shares comprise 526,475,543 A shares and 67,605,243 B shares. The Company's shares have been listed on the Shenzhen Stock Exchange since March 30, 1992.

The Company operates in the real estate industry. The primary operating activities include real estate development and commercial property sales, construction and management of commercial buildings, property leasing, and construction supervision. Domestic commerce and the supply and marketing industry (excluding state-monopolized, exclusively distributed, and specially controlled commodities). Main products/services include: development and sales of commercial residential properties; property management service; building maintenance, equipment maintenance for buildings, landscaping and gardening, and cleaning services; property leasing services; engineering supervision; retail of Chinese cuisine, Western cuisine, alcoholic beverages, etc.

The financial statements were approved for external release at the 8th Meeting of the 11th Board of Directors on August 28, 2026.

The consolidation scope of the Company's consolidated financial statements is determined based on control, including the financial statements of the Company and all its subsidiaries. A subsidiary refers to an enterprise or entity controlled by the Company. A total of 56 subsidiaries are included in the consolidation scope of the consolidated statements during the curren period. For details regarding the scope of consolidated financial statements and its changes, refer to Notes 9 and 10 to the financial statements.

IV. Basis for preparation of financial statements

1. Basis for preparation

The financial statements are prepared on the going concern basis, reflecting actual transaction events, in accordance with the relevant provisions of the Accounting Standards for Business Enterprises, and based on the significant accounting policies and accounting estimates described below.

2. Going concern

The Company has no events or conditions that raise significant doubts about its ability to continue as a going-concern ability for the twelve months following the end of the reporting period.

V. Significant accounting policies and accounting estimates

Tips of specific accounting policies and accounting estimates:

The Company, based on its actual production and operational characteristics and in accordance with the relevant Accounting Standards for Business Enterprises, has established specific accounting policies and accounting estimates for transactions and events such as revenue recognition. For details, refer to the respective sections below: "Financial Instruments," "Inventories," and "Revenue."

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

The financial statements of the Company, prepared on the aforementioned basis for preparation, comply with the requirements of the latest Accounting Standards for Business Enterprises and their application guidelines, interpretations, and other relevant regulations (collectively referred to as the "Accounting Standards for Business Enterprises") issued by the Ministry of Finance. They fairly and completely reflect the Company's financial position, operating results, cash flows, and other relevant information.

In addition, the preparation of this financial report references the presentation and disclosure requirements stipulated in the CSRC's Rules for the Preparation and Disclosure of Information by Companies Offering Securities to the Public No. 15 – General Requirements for Financial Reports (2023 Revision) and the Notice on the Implementation of New Accounting Standards for Business Enterprises by Listed Companies (Accounting Department Letter [2018] No. 453).

2. Accounting period

The company adopts the calendar year as its accounting period, which runs from January 1 to December 31 each year.

3. Operating cycle

For industries other than real estate, the Companies' operating cycles are relatively short, and a 12-month period is used as the threshold for classifying the liquidity of assets and liabilities. The operating cycle in the real estate industry spans from property development to sales realization, generally exceeding 12 months. The specific duration is determined by the nature of the development project, with the operating cycle itself serving as the criterion for classifying the liquidity of assets and liabilities.

4. Recording currency

The Company and its domestic subsidiaries adopt RMB as their recording currency. The overseas subsidiaries of the Company determine their recording currency based on the currency of the primary economic environment in which they operate. The Company prepares its financial statements using RMB as the reporting currency.

5. Determination methods and selection basis for materiality threshold

Applicable □ Not applicable

6. Accounting treatments for business combinations under common control and those not under common control

(1) Accounting treatments for business combination under common control

For business combinations under common control, the assets and liabilities acquired by the Company from the acquiree are measured at the book value of the acquiree in the consolidated financial statements of the ultimate controller as of the combination date. The difference between the book value of the merger consideration (or the total par value of the shares issued) and the book value of the net assets acquired in the merger is adjusted against capital reserve, and if the capital reserve is insufficient to absorb the difference, the adjustment is made to retained earnings.

In a business combination under common control achieved through multiple transactions in stages, the assets and liabilities of the combined party acquired by the Company in the combination are measured at their book value in the ultimate controller's consolidated financial statements as of the combination date; the difference between the sum of the book value of the precombination investment held and the book value of the new consideration paid on the combination date, and the book value of the net assets acquired in the combination, is adjusted against capital reserve. If the capital reserve is insufficient to absorb the difference, the adjustment is made to retained earnings. For the long-term equity investments held by the combining party in the combined party before obtaining the right of control, the recognized profit or loss, other comprehensive income, and other changes in owners' equity between the later of the date the original equity was acquired and the date when both the combining party and the combined party first came under the ultimate controller's control, up to the combination date, shall be offset against either the retained earnings at the beginning of the comparative statements period or the current period's profit or loss.

(2) Accounting treatments for business combination not under common control

In a business combination not under common control, the combination cost is determined as the fair value of the assets transferred, liabilities incurred or assumed, and equity securities issued by the acquirer on the acquisition date to obtain the right of control over the acquiree. On the acquisition date, the assets, liabilities, and contingent liabilities obtained from the acquiree are recognized at fair value.

On the acquisition date, the Company recognizes the difference between the combination cost and the fair value share of net identifiable assets obtained from the acquiree as goodwill, which is subject to subsequent measurement at cost less accumulated provision for impairment; the difference between the combination cost and the fair value share of net identifiable assets obtained from the acquiree is, after verification, recognized in profit or loss.

In a business combination not under common control achieved through multiple transactions in stages, the combination cost is the sum of the consideration paid on the acquisition date and the fair value of the equity interest in the acquiree held prior to the acquisition date as of the acquisition date. For equity interests in the acquiree held prior to the acquisition date, such interests are remeasured at their fair value as of the acquisition date, and the difference between the fair value and the book value is recognized in current period investment income; for equity interests in the acquiree held prior to the acquisition date, any other comprehensive income and other changes in owners' equity related to such interests are reclassified to profit or loss on the acquisition date, except for other comprehensive income arising from the remeasurement of the net liabilities under defined benefit plans or changes in net assets of the acquiree, and other comprehensive income related to non-trading equity instrument investments previously designated as measured at fair value with changes recognized in other comprehensive income.

(3) Treatment of transaction costs in business combination

In a business combination, intermediary fees, such as audit, legal services, valuation consulting, and other related G&A expenses incurred for the transaction are recognized in profit or loss when incurred. The transaction costs incurred for issuing equity securities or debt securities as merger consideration are included in the initial recognized amount of such equity securities or debt securities.

7. Criteria for determining control and preparation methods for consolidated financial statements

(1) Judgment criteria for control

The consolidation scope in the consolidated financial statements is determined on the basis of control. Control means that the Company has the power over the investees, participates in their relevant activities to obtain variable returns, and has the ability to use that power to affect the amount of returns from the investees. When changes in relevant facts and circumstances lead to changes in the key elements related to the definition of control, the Company will re-evaluate accordingly

When determining whether to include a structured entity within the consolidation scope, the Company comprehensively evaluates all relevant facts and circumstances, including assessing the structured entity's purpose and design, identifying the types of variable returns, and evaluating whether control exists over the structured entity based on its participation in relevant activities that expose it to some or all variability of returns.

(2) Preparation methods for consolidated financial statements

Consolidated financial statements are prepared by the Company based on the financial statements of the Company and its subsidiaries, along with other relevant materials. In preparing consolidated financial statements, the accounting policies and reporting periods of the Company and its subsidiaries must be consistent, and significant intercompany transactions and balances are eliminated.

During the reporting period, subsidiaries and businesses added due to a business combination under common control are treated as having been included in the Company's consolidation scope from the date they came under the control of the ultimate controller. Their operating results and cash flows from that date are incorporated into the consolidated income statement and consolidated statement of cash flows, respectively.

For subsidiaries and businesses added during the reporting period due to a business combination not under common control, the Company includes their revenue, expenses, and profits from the acquisition date to the end of the reporting period in the consolidated income statement, and incorporates their cash flows into the consolidated statement of cash flows

The portion of a subsidiary's shareholders' equity not attributable to the Company is presented separately as minority interests under shareholders' equity in the consolidated balance sheet; the share of the subsidiary's net profit or loss attributable to minority interests is presented in the consolidated income statement under the net profit item as "minority interest income". If the losses borne by minority shareholders exceed the share of owners' equity they hold at the beginning of the subsidiary's period, the excess continues to be deducted from the minority interests.

(3) Purchase of minority shareholders' equity in a subsidiary

The difference between the cost of newly acquired long-term equity investments from the purchase of minority interests and the proportionate share of the subsidiary's net asset share calculated based on the increased ownership ratio from the acquisition date or combination date, as well as the difference between the disposal proceeds from partial disposal of equity investments in a subsidiary without loss of control and the proportionate share of the subsidiary's net asset share attributable to the disposed long term equity investments calculated from the acquisition date or combination date, shall be adjusted against capital reserve in the consolidated balance sheet. If the capital reserve is insufficient to offset the difference, the remaining amount shall be adjusted against retained earnings.

(4) Treatment for loss of right of control over subsidiaries

When the Company disposes of a portion of its equity investments or loses the right of control over the original subsidiary due to other reasons, the remaining equity interest shall be remeasured at fair value as of the date of loss of control; the difference between the total of the consideration received from the disposal of equity and the fair value of the remaining equity interest, less the sum of the subsidiary's net assets attributable to the original ownership percentage calculated based on book value from the acquisition date and the related goodwill, shall be recognized as investment income in the period of loss of control.

Other comprehensive income related to equity investments in the former subsidiary shall be reclassified on the same basis as if the subsidiary had directly disposed of the related assets or liabilities upon loss of control, and other changes in owners' equity previously recognized under accounting by equity method related to the former subsidiary shall be transferred to profit or loss in the period of loss of control.

(5) Treatment for the disposal of equity in stages until loss of control occurs

If the terms, conditions, and economic effects of multiple transactions involving the disposal of equity in stages until loss of control meet one or more of the following conditions, the Company shall account for such transactions as a package of transactions：

1) The transactions are entered into either simultaneously or in contemplation of one another;

2) The transactions as a whole are necessary to achieve a complete commercial outcome;

3) The occurrence of one transaction is contingent on the occurrence of at least one other transaction;

4) A transaction is not economically viable when considered individually, but is economically viable when considered together with the others.

When conducting a disposal of equity in stages until the loss of the right of control occurs, the measurement of the remaining equity interest and the recognition of profit or loss related to the disposal shall follow the same accounting principles as those described in the preceding section for "Treatment upon Loss of Control of a Subsidiary." Prior to the loss of control, the difference between the consideration received from each disposal and the disposing investment's proportionate share of the subsidiary's net assets calculated based on book value from the acquisition date shall be accounted for as follows:

1) If the transactions constitute "a package of transactions," the related amount shall be recognized in other comprehensive income. The related amounts shall be transferred to profit or loss during the period of loss of control.

2) If the transactions do not constitute "a package of transactions," they shall be recognized as equity transactions in the capital reserve (equity premium/capital premium). Upon loss of control, the related amounts shall not be transferred to profit or loss in the period of loss of control.

8. Classification of joint venture arrangements and accounting treatments for joint operations

(1) Identification and classification of joint venture arrangements

A joint venture arrangement refers to an arrangement under the common control of two or more parties. A joint venture arrangement has the following characteristics: 1) all participating parties are bound by the arrangement; 2) two or more participating parties exercise common control over the arrangement. No single participating party can control the arrangemen individually, and any party with common control over the arrangement can prevent other parties or combinations of parties from exercising individual control.

Common control refers to the control shared over an arrangement in accordance with the relevant stipulations, and the decision-making of related activities of the arrangement should not be made before the party sharing the right of control agrees the same.

Joint venture arrangements are classified into joint operation and joint venture. A joint operation refers to those joint venture arrangements under which the joint venture is entitled to relevant assets and be responsible for relevant liabilities. A joint venture refers to a joint venture arrangement in which the participating parties only have rights to the net assets of the arrangement.

(2) Accounting treatment for joint venture arrangements

Participants in a joint operation shall recognize the following items related to their proportionate share in the joint operations and account for them in accordance with the Accounting Standards for Business Enterprises: 1) Recognize individually held assets and recognize jointly held assets based on their proportionate share; 2) Recognize individually incurred liabilities and recognize jointly incurred liabilities based on their proportionate share; 3) Recognize revenue from the sale of their share of the output of the joint operations; 4) Recognize their proportionate share of the revenue generated by the joint operations from the sale of output; 5) Recognize individually incurred expenses and recognize expenses of the joint operations based on their proportionate share. Participants in joint ventures shall account for their investments in joint ventures in accordance with Accounting Standards for Business Enterprises No. 2 - Long-term Equity Investments.

9. Determination criteria for cash and cash equivalents

The term cash in the statement of cash flows refers to a company's cash on hand and deposits that are readily available for payment. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and subject to an insignificant risk of changes in value.

10. Foreign currency transactions and translation of foreign currency statements

(1) Translation of foreign currency transactions

Foreign currency transactions shall be translated into RMB upon initial recognition using an exchange rate that approximates the spot exchange rate on the transaction date. At the balance sheet date, foreign currency monetary items shall be translated using the spot exchange rate on the balance sheet date. Exchange differences resulting from differences between the spot exchange rate on the balance sheet date and the spot exchange rate at initial recognition or the previous balance sheet date shall be recognized i profit or loss; foreign currency non-monetary items measured at historical cost shall continue to be translated using the exchange rate that approximates the spot exchange rate on the transaction date; foreign currency non-monetary items measured at fair value shall be translated using the spot exchange rate on the date the fair value is determined. The difference between the translated amount in the recording currency and the original recording currency amount shall be recognized in profit or loss or other comprehensive income based on the nature of the non-monetary items

(2) Translation of foreign-currency financial statements

At the balance sheet date, when translating the foreign currency financial statements of overseas subsidiaries, the assets and liability items in the balance sheet shall be translated using the spot exchange rate on the balance sheet date; for owners' equity items, except for the "undistributed profits" item, all other items shall be translated using the spot exchange rate on the transaction date; the revenue and expense items in the income statement shall be translated using an exchange rate that approximates the spo exchange rate on the transaction date; all items in the statement of cash flows shall be translated at the exchange rate that approximates the spot exchange rate on the date the cash flows occurred. The difference arising from the translation of financial statements shall be recognized in the "other comprehensive income" item under shareholders' equity in the balance sheet.

11. Financial instruments

(1) Recognition and derecognition of financial instruments

The Company recognizes financial assets or financial liabilities when it becomes a party to financial instruments contracts.

Financial assets bought and sold in the ordinary course are subject to recognition and derecognition using trade date accounting. The buying and selling of financial assets in the ordinary course refers to receiving or delivering financial assets within the time frame prescribed by laws, regulations, or common practices, in accordance with the contractual terms. Trading date refers to the date on which the Company commits to buy or sell financial assets.

Derecognition shall be applied to a financial asset (or a portion thereof, or a group of similar financial assets) when the following conditions are met,i.e., it shall be removed from the Company's accounts and balance sheet.

1) The contractual right to receive the cash flows of the financial assets has expired;

2) The financial assets has been transferred and meets the derecognition criteria for transfer of financial assets as described below.

If the present obligation of a financial liability is fully or partially discharged, the liability (or the discharged portion) is derecognized. If the Company (as the obligor) and the creditor enter into an agreement to assume a new financial liability to replace the existing financial liability, and the contractual terms of the new financial liability are substantially different from those of the existing one, the existing financial liabilities shall be derecognized and the new financial liability shall be recognized simultaneously.

(2) Classification and measurement of financial assets

At initial recognition, the Company classifies financial assets into the following three categories based on its business mode for managing financial assets and the contractual cash flows characteristics of the financial assets: financial assets measured at amortized costs, financial assets measured at fair value with changes recognized in other comprehensive income, and financial assets measured at fair value with changes recognized in profit or loss. Financial assets are initially recognized at fair value. For financial assets measured at fair value with changes recognized in profit or loss, related transaction costs are directly recognized in profit or loss. For other categories of financial assets, related transaction costs are included in their initial recognized amount. For accounts receivable arising from the sale of goods or provision of services without including or considering significant financing components, the Company recognizes the consideration amount the Company expects to be entitled to receive as the initial recognized amount. The subsequent measurement of financial assets depends on their classification.

1) Financial assets measured at amortized cost

A financial asset shall be classified as measured at amortized costs if it meets both of the following conditions: the Company's business model for managing the financial assets is to collect contractual cash flows, and the contractual cash flows o the financial assets represent solely payments of principal and interest on the principal amount outstanding; the contractual terms of the financial assets stipulate that the cash flows generated on specified dates solely represent payments of principal and interest calculated based on the outstanding principal amount. For such financial assets, the effective interest method is applied, and their subsequent measurement is performed at amortized costs, with gains or losses arising from their amortization or impairment recognized in profit or loss.

2) Investments in debt instruments measured at fair value with changes recognized in other comprehensive income

A financial asset shall be classified as measured at fair value with changes recognized in other comprehensive income if it meets both of the following conditions: the Company's business model for managing the financial assets is both to collect contractual cash flows and to sell the financial assets, and the contractual cash flows of the financial assets represent solely payments of principal and interest on the principal amount outstanding; the contractual terms of the financial assets stipulate tha the cash flows generated on specified dates solely represent payments of principal and interest calculated based on the outstanding principal amount. For such financial assets, fair value is used for subsequent measurement. The discount or premium is amortized using the effective interest method and recognized as interest income or expense. Except for impairment losses and exchange differences on foreign currency monetary financial assets recognized in profit or loss, the fair value changes of such financial assets are recognized in other comprehensive income until the financial asset is derecognized, at which time the cumulative gains or losses are reclassified to profit or loss. Interest income related to such financial assets shall be recognized in profit or loss.

3) Investments in equity instruments measured at fair value with changes recognized in other comprehensive income

The Company irrevocably elects to designate certain non-trading equity instrument investments as financial assets measured at fair value with changes recognized in other comprehensive income. Dividend income related to such assets is recognized in profit or loss, fair value changes are recognized in other comprehensive income, and cumulative gains or losses arising from suc changes are reclassified to retained earnings upon derecognition of the financial assets.

4) Financial assets measured at fair values through current profit or loss

Financial assets other than those measured at amortized costs and those measured at fair value with changes recognized in other comprehensive incomes shall be classified as financial assets measured at fair value with changes recognized in profit or loss. At initial recognition, financial assets may be designated as measured at fair value with changes recognized in profit or loss to eliminate or significantly reduce an accounting mismatch. For such financial assets, fair value is used for subsequent measurement, and all fair value changes are recognized in profit or loss.

The Company shall reclassify all affected related financial assets if and only if it changes its business model for managing financial assets.

(3) Classification and measurement of financial liabilities

At initial recognition, the Company's financial liabilities are classified into financial liabilities measured at amortized costs and financial liabilities measured at fair value with changes recognized in profit or loss.

Financial liabilities that meet one of the following conditions may be designated at initial measurement to be measured at fair value, with changes recognized in profit or loss: 1) the designation eliminates or significantly reduces accounting mismatch; 2) financial liabilities or a combination of financial assets and financial liabilities are managed and evaluated based on fair value according to the formal written documents outlining the Group's risk management or investment strategies, and reports are provided to key officers within the Group based on this information; 3) The financial liabilities contain embedded derivative instruments that need to be separately split

The Company determines the classification of financial liabilities at initial recognition. For financial liabilities measured at fair value with changes recognized in profit or loss, the related transaction costs are recognized directly in profit or loss. For other financial liabilities, the related transaction costs are included in their initial recognized amount.

Subsequent measurement of financial liabilities depends on their classification:

1) Financial liabilities measured at amortized costs

For such financial liabilities, subsequent measurement is conducted using the effective interest method at amortized costs, and gains or losses arising from derecognition or amortization are recognized in profit or loss.

2) Financial liabilities measured at fair value with changes recognized in profit or loss

Financial liabilities measured at fair value with changes recognized in profit or loss include financial liabilities held for trading (including derivatives that are financial liabilities) and those initially designated as measured at fair value with changes recognized in profit or loss. For such financial liabilities, subsequent measurement is conducted at fair value, and gains or losses arising from fair value changes, as well as dividends and interest expenses related to these financial liabilities, are recognized in profit or loss.

(4) Offsetting of financial instruments

Financial assets and financial liabilities are presented in the balance sheet at their net amounts after offsetting, provided that the following conditions are met: there is a legally enforceable right to offset the recognized amounts, and the right to offset is currently exercisable; there is a plan to settle on a net basis or simultaneously realize the financial assets and settle the financial liabilities.

(5) Impairment of financial instruments

1) Impairment measurement and accounting treatment of financial instruments

The Company shall conduct impairment treatment and recognize provision for loss based on expected credit losses for the following items.

①Financial assets measured at amortized costs;

② Accounts receivable and investments in debt instruments measured at fair value with changes recognized in other comprehensive income;

③Contract assets as defined in Accounting Standards for Business Enterprises No. 14 - Revenue;

④Lease receivables;

⑤Loan commitments not classified as financial liabilities measured at fair value with changes recognized in profit or loss;

⑥Financial guarantee contracts (except those measured at fair value with changes recognized in profit or loss, or transfer o financial assets that do not meet derecognition criteria or continue involvement with the transferred financial assets).

Expected credit losses refer to the weighted average of credit losses on financial instruments, weighted by the risk of defaul occurring. Credit loss refers to the difference between all contractual cash flows receivable under the contract (discounted by the Company using the original effective interest rate) and all expected cash flows to be collected, i.e., the present value of all cash shortfalls. Specifically, for financial assets purchased or originated by the Company that have incurred a credit loss, the discounting is based on the credit-adjusted effective interest rate of that financial assets.

For financial assets purchased or originated by the Company that have incurred a credit loss, the Company recognizes only the cumulative changes in expected credit losses over the entire expected life since initial recognition as the provision for loss on the balance sheet date.

For accounts receivable that either do not contain a significant financing component or for which the Company does not consider the financing component in contracts with a term of one year or less, the Company applies a simplified measurement approach to measure the provision for loss at an amount equal to the lifetime expected credit losses.

For lease receivables and accounts receivable containing a significant financing component, the Company applies a simplified measurement approach to measure the provision for loss at an amount equal to the lifetime expected credit losses.

Except for financial assets measured under the aforementioned methods, the Company assesses whether their credit risk has increased significantly since initial recognition at each balance sheet date. If the credit risk has increased significantly since the initial recognition, the Company measures the provision for loss at an amount equal to the lifetime expected credit losses; if the credit risk has not increased significantly since initial recognition, the Company measures the provision for loss at an amount equal to the expected credit losses within the next 12 months of the financial instruments.

The Company utilizes available reasonable and supportable information, including forward-looking information, by comparing the risk of default occurring on the financial instruments as of the balance sheet date with the risk of default at initial recognition date, to determine whether the credit risk of the financial instruments has increased significantly since initial recognition.

As of the balance sheet date, if the Company determines that the financial instruments only have low credit risk, it is assumed that the credit risk of the financial instruments has not increased significantly since initial recognition.

The Company assesses expected credit risk and measures expected credit losses on the basis of individual financial instruments or portfolios of financial instruments. When portfolios of financial instruments are used as the basis, the Company groups the financial instruments into different portfolios based on common risk characteristics.

The Company remeasures expected credit losses at each balance sheet date, with the resulting increases or reversals in the provision for loss recognized as impairment losses or gains in profit or loss. For financial assets measured at amortized costs, the provision for loss reduces the book value of these financial assets presented in the balance sheet; for debt investments measured at fair value with changes recognized in other comprehensive income, the Company recognizes their provision for loss within other comprehensive income, without reducing the book value of these financial assets.

2) Financial instruments for which expected credit risk is assessed and expected credit losses are measured on a portfolio basis

For accounts receivable items such as notes receivable, accounts receivable, other receivables, and contract assets, if a customer's credit risk characteristics are significantly different from those of other customers in the portfolio or if the customer's credit risk characteristics have changed significantly, the Company assesses the provision for bad debts on an individual basis for such receivables. Except for accounts receivable for which the provision for bad debts is assessed individually, the Company groups accounts receivable into portfolios based on credit risk characteristics and calculates the provision for bad debts on a portfolio basis.

Notes receivable, accounts receivable and contract assets

For notes receivable, accounts receivable and contract assets, whether there is a significant financing component or not, the Company always measures its provision for loss at the amount equivalent to the expected credit losses during the entire duration.

When the information of expected credit losses of a single financial asset or contract asset cannot be evaluated at a reasonable cost, the Company divides the notes receivable, accounts receivable and contract assets into portfolios according to the credit risk characteristics, and calculates the expected credit losses on the basis of the portfolios. The basis for determining the portfolios is as follows:

A. Notes receivable

 Portfolio 1 of notes receivable: bank acceptance bills

 Portfolio 2 of notes receivable: commercial acceptance bills

B. Accounts receivable

 Portfolio 1 of accounts receivable: government payment portfolio

 Portfolio 2 of accounts receivable: portfolio of transactions with other related parties

Portfolio 3 of accounts receivable: credit risk characteristic combination

For the accounts receivable divided into portfolios, the Company prepares the comparison table between the aging of accounts receivable and the rate of expected credit loss throughout the duration by reference to the experience of historical credit losses, combining with the current situation and the forecast of future economic conditions, and calculates the expected credit losses. The aging of accounts receivable is calculated from the date of recognition.

C. Other receivables

The Company classifies other receivables into several portfolios based on credit risk characteristics, and calculates expected credit losses on the basis of portfolios. The basis for determining portfolios is as follows:

 Portfolio 1 of other receivables: portfolio of transactions with related parties within the consolidation scope

Portfolio 2 of other receivables: interest receivable portfolio

 Portfolio 3 of other receivables: portfolio of transactions with other related parties

Portfolio 4 of other receivables: credit risk characteristic combination

For other receivables classified as portfolios, the Company calculates the expected credit losses through the default risk exposure and the rate of expected credit loss throughout the duration or in the next 12 months. For other receivables classified into portfolios by aging, the aging is calculated from the date of recognition.

(6) Transfer of financial assets

If the Company has transferred substantially all the risks and rewards of the ownership of the financial assets to the transferee, the financial assets will be derecognized; if it retains substantially all the risks and rewards of the ownership of the financial assets, the financial assets will not be derecognized.

If the Company neither transfers nor retains substantially all the risks and rewards of the ownership of the financial assets, the treatment are as follows: if the Company gives up control of the financial assets, the derecognition of the financial assets will be carried out with the recognition of the resulting assets and liabilities; if the Company has not given up control of the financial assets, the relevant financial assets will be recognized to the extent of its continued involvement in the transferred financial assets, and the relevant liabilities will be recognized accordingly.

12. Notes receivable

Refer to the relevant notes to the financial statements V. 11 Financial instruments for details.

13. Accounts receivable

Refer to the relevant notes to the financial statements V. 11 Financial instruments for details.

14. Receivables financing

Not applicable

15. Other receivables

Method for determining expected credit losses on other receivables and the related accounting treatments

Refer to the relevant notes to the financial statements V. 11 Financial instruments for details.

16. Contract assets

(1) Recognition methods and standards for contract assets

The Company presents contract assets or contract liabilities in the balance sheet based on the relationship between its performance of fulfillment obligations and customer payments. The consideration (except accounts receivable) that the Company is entitled to receive for the transfer of goods or provision of services to customers is presented as contract assets.

(2) Determination methods and accounting treatments of expected credit losses of contract assets

For contract assets that do not contain any significant financing component (including the financing component in contracts with a term of less than one year that is not considered under the Standards) as stipulated in Accounting Standards for Business Enterprises No. 14 - Revenue, the Company adopts a simplified model of expected credit losses, that is, the provision for loss is always measured according to the amount of expected credit losses over the life of the instruments, and the resulting increase or reversal of provision for loss is included in the current profit or loss as impairment losses or gains

For contract assets that contain significant financing components, the Company chooses to use the simplified model of expected credit losses, that is, the provision for loss is always measured according to the amount of expected credit losses over the life of the instruments.

17. Inventories

(1) Classification of inventories

Inventories include development land, development products, development products intended for sale but temporarily leased, transitional housing, inventory materials, inventory equipment and low-value consumables held for sale or consumption in the development and operation process, as well as development costs in the development process.

(2) Pricing method of inventories dispatched

1) The moving weighted average method is adopted for the dispatched materials.

2) During the development of the project, the land used for development is included in the development costs of the project according to the floor area occupied by the development products.

3) The dispatched development products are accounted for by the specific identification method.

4) Development products and transitional housing that are temporarily leased for sale are amortized evenly over the expected service life of the Company's similar fixed assets.

5) If the public supporting facilities are completed earlier than the relevant development products, after the completion of the public supporting facilities, the public supporting facilities fee shall be allocated to the development costs of the relevant

development project according to the floor area of the relevant development project; if the public supporting facilities are completed later than the relevant development products, the public supporting facilities fee shall be accrued by the relevant development products first, and the cost of the relevant development products shall be adjusted according to the difference between the actual amount and the accrued amount after the completion of the common facilities.

(3) Determination basis of net realizable value of inventories

On the balance sheet date, the inventories are measured at the lower of cost or net realizable value, and the provision fo inventory depreciation is made at the difference where the cost of a single inventory is higher than the net realizable value. For the inventories that are directly used for sale, the net net realizable value is determined by the estimated selling price of the inventories minus the estimated selling and distribution expenses and related taxes during the normal production and operation process; For the inventories that need to be processed, their net realizable net realizable value is determined in the normal course of production and operation by the estimated selling price of the finished finished products minus the estimated costs to be incurred upon completion, estimated selling and distribution expenses and related taxes; on the balance sheet date, if part of the same inventory has a contract price and other parts do not have a contract price, its net realizable value shall be determined respectively and compared with its corresponding cost to determine the provision or reversal of provision for inventory depreciation amount.

(4) Inventory system of inventories

The inventory system of inventories is the perpetual inventory system.

(5) Amortization method of low-value consumables and packaging materials

1) Low-value consumables

They are amortized with the one-off write-off method.

2) Packaging materials

They are amortized with the one-off write-off method.

18. Assets held for sale

(1) Recognition criteria and accounting treatments of non-current assets held for sale or disposal groups

The Company classifies non-current assets or disposal groups that meet the following conditions into the category of held for sale: 1) According to the practice of selling such assets or disposal groups in similar transactions, they can be sold immediately under the current situation; 2) The sale is very likely to occur, a resolution has been made on a sale plan and a firm purchase commitment has been obtained, and the sale is expected to be completed within one year. Approval from relevant authorities or regulatory authorities has been obtained in accordance with relevant regulations. If the Company loses the right of control of its subsidiary due to reasons such as the sale of its investment in the subsidiary, regardless of whether the enterprise retains part of the equity investment after the sale, the entire investment in the subsidiary shall be classified as held for sale in the parent company's individual financial statements, and all assets and liabilities of the subsidiary shall be classified as held for sale in the consolidated financial statements when the investment in the subsidiary to be sold meets the conditions for the classification as held for sale.

The Company adjusts the estimated net residual value of the assets held for sale to the net amount reflecting its fair value less selling expenses (but not more than the original book value of the assets held for sale). The difference between the origina book value and the adjusted estimated net residual value is included in the current profit or loss as asset impairment loss, and the provision for impairment of assets held for sale is made at the same time. For the amount of asset impairment loss recognized by the disposal group held for sale, the book value of the goodwill in the disposal group shall be deducted first, and then the ratio o the book value of each non-current asset in the disposal group measured in accordance with the applicable standards shall be deducted in proportion to its book value.

If the net amount of the fair value of the disposal group held for sale minus sales expenses increases on subsequent balance sheet dates, the previously written-down amount shall be restored, and reversed within the asset impairment loss of non-curren assets recognized under the measurement provisions of this standard after being classified as held for sale. The reversed amoun shall be included in the current profit or loss. The goodwill book value that has been offset and the asset impairment loss recognized before the non-current assets subject to the measurement provisions of the relevant standards are classified as held for sale shall not be reversed. The subsequent reversal amount of the asset impairment loss recognized for the disposal group held for sale shall be increased in proportion to its book value according to the ratio of the book value of each non-current asset in the disposal group that is subject to the measurement provisions of the relevant standards except for goodwill.

No depreciation or amortization are made for the non-current assets held for sale and the assets in the disposal group held fo sale; Interest and other expenses on liabilities in the disposal group held for sale continue to be recognized. For all or part of the investment in associates or joint ventures classified as held for sale, accounting by equity method shall cease for the part classified as held for sale, and accounting by equity method shall continue for the retained part (not classified as held for sale); the use of the equity method shall cease when the Company loses significant influence over the associates and joint ventures as a result of the sale.

If a non-current asset or disposal group is classified as held for sale, but later no longer meets the classification conditions for held for sale, the Company shall stop classifying it as held for sale and measure it at the lower of the following two amounts:

1) The amount after adjusting the book value of the asset or disposal group before it is classified as held for sale for depreciation, amortization or impairment that would have been recognized if it had not been classified as held for sale;

2) Recoverable amount.

(2) Identification criteria of discontinued operations

Discontinued operations refer to the component that can be separately distinguished and has been disposed of by the Company or classified by the Company as held for sale that meets one of the following conditions:

1) The component represents a separate major business or a sole major business area;

2) The component is a part of the associated plan on the intended disposal of an independent major business or a sole major business area;

3) The component is a subsidiary acquired only for re-sale.

(3) Presentation

The Company presents the non-current assets held for sale or the assets in the disposal group held for sale in the balance sheet under the "assets held for sale", and the liabilities in the disposal group held for sale under the "liabilities held for sale".

The Company presents the profit or loss of continuing operations and the profit or loss of discontinued operations in the income statement separately. For non-current assets or disposal group held for sale that do not meet the definition of discontinued operations, their impairment losses, reversal amounts and disposal profit or loss are presented as profit or loss from continuing operations. The impairment loss from discontinued operation, reversed amount and other profit or loss from operation as well as profit or loss from disposal shall be presented as profit or loss from discontinued operation

A disposal group that is intended to be discontinued rather than sold and meets the conditions of the relevant components in the definition of discontinued operations is presented as discontinued operations from the date of the discontinuance of its use.

For the discontinued operations presented in the current period, the information originally presented as the profit or loss of continuing operations is re-presented as the profit or loss of the discontinued operations in the comparable accounting period in the current financial statements. If the discontinued operations no longer meet the conditions for classification as held for sale, the information originally presented as profit or loss from discontinued operations is re-presented as the profit or loss from continuing operations in the comparable accounting period in the current financial statements.

19. Debt investments

Not applicable

20. Other debt investments

Not applicable

21. Long-term receivables

Refer to the relevant notes to the financial statements V. 11 Financial instruments for details.

22. Long-term equity investments

(1) Common control and judgment of significant influence

If there is a shared control over an arrangement in accordance with relevant agreements, and the relevant activities of the arrangement must be decided with the unanimous consent of the participants sharing the right of control, it is recognized as common control. For determining whether there is a common control, it is firstly to determine whether all participants or a combination of participants collectively control the arrangement, and then determine whether the decision on the activities related to the arrangement must be unanimously agreed by the participants who collectively control the arrangement. If all participants or a group of participants must act in concert to decide on the relevant activities of an arrangement, all participants or a group o participants are considered to collectively control the arrangement; if there are two or more combinations of participants that can collectively control an arrangement, it does not constitute a common control. The protective rights enjoyed are not taken int account in determining whether there is a common control

Significant influence is recognized when there is the power to participate in the making decisions on the investees' financial and operating policies, but no power to control or exercise common control with other parties over the formulation of such policies. When it is determined whether the investor can exercise significant influence on the investees, the impact of the investor's direct or indirect holding of the investees' voting shares and the current executable potential voting rights held by the investor and other parties after assumed conversion to investees' equity shall be taken into consideration, including the impact of the curren convertible warrants, share options and convertible corporate bonds issued by the investees.

When the Company directly or indirectly owns more than 20% (including 20%) but less than 50% of the voting rights of the investees through its subsidiary, it is generally considered to have a significant influence on the investees, unless there is clear evidence that it cannot participate in the production and operation decision-making of the investees under such circumstances, which means no significant influence; when the Company owns less than 20% (exclusive) of the shares of voting rights of the investees, it is generally not considered to have significant influence on the investees, unless there is clear evidence that it can participate in the production and operation decision-making of the investees and in such case it has a significant influence.

(2) Determination of initial investment costs

1) If the combining party of long-term equity investments formed by business combinations under common control takes the payment of cash, transfer of non-cash assets, assumption of debts or issuance of equity securities as the consideration for the combination, the share of of the book value of the owners' equity of the combining party in the consolidated financial statements of the ultimate controller shall be taken as its initial investment cost on the combination date. The capital reserve (capital premium or equity premium) is adjusted for the difference between the initial investment cost of the long-term equity investments and the book value of the consideration paid for the combination or the total face value of the shares issued; If the capital reserve is insufficient, the difference is adjusted against retained earnings

For long-term equity investments realized step by step by business combination under the same control, the book owners equity share of the combined party on the combination date calculated by the shareholding ratio shall be taken as the initial investment cost of the investment. The capital reserve (capital premium or equity premium) shall be adjusted according to difference between the initial investment cost and the sum of the book value of the original long-term equity investments plus the book value of the newly paid consideration for further shares acquired on the combination date; if the capital reserve is insufficient to be offset, retained earnings shall be offset.

2) For long-term equity investments formed by business combination not under common control, the fair value of the combination consideration paid on the acquisition date shall be used as the initial investment cost.

3) Except for long-term equity investments formed by business combination: if it is obtained by paying cash, the actual purchase price paid shall be taken as its initial investment cost; if it is obtained by issuing equity securities, fair value of equity securities issued will be used as its initial investment cost; if an investor invests, the value stipulated in the investment contract or agreement shall be used as its initial investment cost (except if the value stipulated in the contract or agreement is unfair).

(3) Subsequent measurements and recognition of profit or loss

Long-term equity investments in which the Company can control the investees shall be accounted for by cost method in the individual financial statements of the Company; long-term equity investments with common control or significant influence adop the accounting by equity method.

When the cost method is adopted, the long-term equity investments are priced at the initial investment cost. Except for the actual price paid when the investment is obtained or the cash dividends or profits included in the consideration that have been declared but not yet distributed, the entitled cash dividends or profits declared by the investees are recognized as curren investment income, and whether the long-term investment is impaired is considered according to the relevant asset impairment policy at the same time

When the equity method is adopted, if the initial investment cost of the long-term equity investments is greater than the fair value share of net identifiable assets of the investees that the investor is entitled to at the time of investment, it shall be included in the initial investment cost of the long-term equity investments; if the initial investment cost of the long-term equity investments is less than the fair value share of net identifiable assets of the investees that the investor is entitled to at the time of investment, the difference shall be included in the current profit or loss, and the cost of the long-term equity investments shall be adjusted at the same time.

When the equity method is adopted, after the long-term equity investments are obtained, the investment profit or loss and other comprehensive income shall be recognized according to the share of net profit or loss and other comprehensive income realized by the investees that should be enjoyed or shared, and the book value of the long-term equity investments shall be adjusted. When the share of net profit or loss of the investees is recognized, the net profit of the investees shall be adjusted and recognized on the basis of the fair value of the identifiable assets of the investees at the time of acquisition of the investment, in accordance with the accounting policies and accounting period of the Company, and offsetting the portion of internal transaction profit or loss between associates and joint ventures that belong to the investing enterprise according to the shareholding ratio (but if the internal transaction loss is an asset impairment loss, it shall be recognized in full). The book value of the long-term equity investments shall be reduced according to the part to be distributed calculated according to the profits or cash dividends declared to be distributed by the investees. The Company recognizes the net loss incurred by the investees to the extent that the book value of the long-term equity investments and other long-term interests that substantially constitute the net investment in the investees are reduced to zero, except that the Company is obliged to bear additional losses. For other changes in owners' equity of the investees other than net profit or loss, the book value of the long-term equity investments are adjusted and included in the owners equity.

If the Company can have significant influence on or exercise common control over the investees due to additional investment or other reasons, but does not constitute control, the sum of the fair value of the original equity plus the newly increased investment cost shall be taken as the initial investment cost with the accounting by equity method on the conversion date. If the original equity is classified as non-trading equity instrument investment measured at fair value with changes recognized in other comprehensive income, the accumulated fair value changes related to it originally included in other comprehensive income shall be transferred to retained earnings when changed to accounting by equity method.

Where the common control or significant influence on the investees is lost due to the disposal of part of the equity investments or other reasons, the remaining equity after disposal shall be accounted for in accordance with Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments on the date of loss of common control or significant influence, and the difference between the fair value and the book value shall be included in the current profit or loss For the other comprehensive income of the original equity investments recognized by adopting the accounting by equity method, the accounting treatment shall be made on the same basis for the direct disposal of the relevant assets or liabilities by the investees when the accounting by equity method is terminated. other changes in owners' equity related to the original equity investments are transferred to the current profit or loss.

If the control over the investees is lost due to the disposal of part of the equity investments or other reasons, and the remaining equity after disposal can exercise common control or significant influence on the investees, the accounting by equity method shall be adopted, and the remaining equity shall be adjusted as if the accounting by equity method is adopted from the time of acquisition; if the remaining equity after disposal cannot exercise common control or significant influence on the investees, it shall be accounted for in accordance with the relevant provisions of Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments, and the difference between its fair value and book value on the date of loss of control shall be included in the current profit or loss.

If the Company's shareholding ratio decreases due to the capital increase of other investors, resulting in the loss of control but with the ability to implement common control or exert significant influence over the investees, the Company's share of the investees' increase in net assets due to capital increase and share expansion shall be recognized according to the new shareholding ratio, and the difference between the original book value of the long-term equity investments corresponding to the decrease in the shareholding ratio that should be carried forward shall be included in the current profit or loss; then, adjustments shall be made as if the accounting by equity method had been applied from the date of investment acquisition according to the new shareholding ratio.

(4) Impairment test methods and methods for provision for impairment

For investments in subsidiaries, associates and joint ventures, please refer to the relevant notes to the financial statements V. 28 Impairment of long-term assets for the method of asset impairment

23. Investment properties

Measurement mode of investment properties

Measurement by cost method

Depreciation and amortization methods

(1) Investment properties include leased land use right, land use right held for transfer upon appreciation and leased buildings.

(2) The investment properties are initially measured at cost, subsequent measurement is made by using the cost model, and depreciation or amortization is provided by using the same method as that for fixed assets and intangible assets. On the balance sheet date, if there is any sign that the investment properties are impaired, the corresponding provision for impairment shall be made according to the difference between the book value and the recoverable amount. The difference between the disposal proceeds of an investment property (through sale, transfer, retirement, or damage) and its book value, net of related taxes and fees is recognized in current profit or loss.

24. Fixed assets

(1) Recognition conditions

Fixed assets refer to tangible assets held for the production of goods, provision of labor services, leasing or operation and management, and with a service life of more than one accounting year. Fixed assets are recognized only when the economi benefits associated with them are likely to flow into the enterprise and their costs can be measured reliably. Fixed assets are initially measured at the actual cost at the time of acquisition. Subsequent expenses related to fixed assets are included in the cost of fixed assets when the economic benefits related to them are likely to flow into the Company and their cost can be measured reliably; the daily repair costs of fixed assets that do not meet the conditions for capitalization of subsequent expenses of fixed

assets are included in the current profit or loss or in the cost of related assets according to the beneficiary object when incurred. For the replaced part, its book value is derecognized.

(2) Depreciation method

The Company's fixed assets are depreciated by straight-line method. The provision for depreciation of fixed assets commences from the month following the date they reach the working condition for intended use and ceases when they are derecognized or classified as non-current assets held-for-sale. Without considering the provision for impairment, the Company determines the annual depreciation rate of each type of fixed assets by category, estimated service life and estimated residual value of the fixed assets as above.

Among them, the depreciation rate for the fixed assets with provision for impairment already made shall be calculated and determined by deducting the accumulated amount of provision for asset impairment.

25. Construction in progress

Not applicable

26. Borrowing costs

(1) Recognition principles of capitalization of borrowing costs

If borrowing costs incurred by the Company can be directly attributed to the acquisition, construction or production of assets eligible for capitalization, they shall be capitalized and included in the cost of the related assets; Other borrowing costs are recognized as expenses when incurred and included in the current profit or loss.

(2) Capitalization period of borrowing costs

1) The capitalization of borrowing costs shall commence when the following conditions are simultaneously met: ① the asset expenditure has been occurred; ② the borrowing costs have been occurred; ③ the acquisition, construction or production activities that are necessary to prepare the assets for their intended use or sale have begun.

2) If an asset that meets the capitalization conditions is abnormally interrupted during the acquisition, construction or production process, and the interruption lasts for more than 3 months, the capitalization of borrowing costs will be suspended; The borrowing costs incurred during the interruption period are recognized as expenses and included in the current profit or loss until the acquisition, construction or production of the asset restarts.

(3) When the assets purchased, constructed or produced that meet the capitalization conditions reach the intended usable or salable state, the capitalization borrowing costs will cease.

(3) Rate and amount of capitalization of borrowing costs

If a special loan is borrowed for the purpose of purchasing, constructing or producing assets that meet the capitalization conditions, interest expenses actually incurred on the special loan in the current period (including the amortization of discounts or premiums determined according to effective interest method), minus the unused borrowed funds The amount of interest tha should be capitalized is determined based on the amount of interest income earned from depositing in a bank or investment income earned from temporary investments; where general borrowings are used for acquiring and constructing or producing assets eligible for capitalization, the expenses of general borrowings to be capitalized should be calculated by multiplying the weighted average of asset disbursements of the part of accumulated asset disbursements exceeding special borrowings by the capitalization rate of used general borrowings. The capitalization rate is calculated and recognized as per the weighted average interest rate of general borrowing.

27. Intangible assets

(1) Service life and basis for determination, estimates, amortization method or review procedure

1) Intangible assets include land use right, software right of use etc. are initially measured at cost, and the service life is analyzed and judged when the intangible assets are obtained.

2) Intangible assets with limited service life shall be amortized systematically and reasonably within the service life according to the expected realization method of the economic benefits related to the intangible assets. If the expected realization method cannot be reliably determined, straight-line method shall be adopted for amortization. The specific periods are as follows:

Intangible assets with uncertain service life are not amortized, and the Company reviews the service life of such intangible assets in each accounting period. If different from the previous estimate, the original estimate is adjusted and treated as changes in accounting estimates.

3) For the method of asset impairment provision for intangible assets, please refer to the relevant notes to the financial statements V. 28 Impairment of long-term assets for details.

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

1) Scope of R&D expenditures

The Company classifies all expenses directly related to the R&D activities as R&D expenditures, including employee compensation of R&D personnel, material input costs, depreciation costs and amortization expenses.

2) Accounting treatments related to R&D expenditures

Expenditures in the research stage of internal research and development projects are included in the current profit or loss when incurred. Expenditures in the development phase of internal research and development projects are recognized as intangible assets if the following conditions are met: ① it is technically feasible to complete the intangible assets so that they can be used or sold; ② there is an intention to complete the intangible assets and use or sell them; ③ the means of generating economic benefits by intangible assets, including being able to prove that there is a market for the products produced by applying the intangible assets or the intangible assets having their own market, and intangible assets to be used internally, being able to prove their usefulness; ④ It is able to finish the development of the intangible assets and able to use or sell the intangible assets, with the support of sufficient technologies, financial resources and other resources; ⑤ The expenditure attributable to the intangible asset during its development phase can be measured reliably

28. Impairment of long-term assets

For long-term equity investments, investment properties measured by the cost model, fixed assets, construction in progress, right-of-use assets, intangible assets with limited service life, goodwill and other long-term assets, the Company shall, on the balance sheet date, make a judgment on whether there is any indication that the assets may have impairment. For goodwill and intangible assets with uncertain service life arising from business combination, the impairment test shall be conducted every yea regardless of whether there are any indications of impairment. The impairment test shall be carried out for goodwill in combination with the asset group or combination of asset groups related to it.

If there are any of the following signs, it indicates that the asset may have impairment:

(1) The market value of the asset has fallen sharply in the current period, and the decline is obviously higher than the expected decline due to the passage of time or normal use; (2) the economic, technical or legal environment in which the enterprise operates and the market where the assets are located have undergone or will undergo significant changes in the current period or in the near future, which will adversely affect the enterprise; (3) the market interest rate or the rate of return on investment in other markets has increased in the current period, thus affecting the discount rate of the enterprise in calculating the present value of the expected future cash flows of the asset, resulting in a significant reduction in the recoverable amount of the asset; (4) there is evidence showing that the asset is obsolete or its substance has been damaged; (5) the asset has been or will be idle, terminated for use or planned to be disposed ahead of schedule; (6) evidence from the internal reports of the enterprise shows that the economic performance of the asset has been or will be lower than expected, such as the net cash flows or operating profit (or loss) generated by the asset is far lower (or higher) than the estimated amount; (7) other indications that the asset may have impairment

Where there is any indication of impairment of assets, the recoverable amount shall be estimated. If the measurement results of recoverable amount indicate that the recoverable amount of the asset is lower than its book value, the book value of the asset shall be written down to the recoverable amount, and the amount written down shall be recognized as the asset impairment los and included in the current profit or loss, and the corresponding provision for asset impairment shall be made at the same time. The asset impairment loss will not be reversed in subsequent accounting periods once recognized.

For impairment test of goodwill, the book value of goodwill arising from business combination shall be amortized to the relevant asset group according to a reasonable method form the acquisition date; where it is difficult to be allocated to the relevant assets group, it shall be allocated to the relevant portfolio of asset groups. The relevant asset group or portfolio of asset groups is the asset group or portfolio of asset groups that can benefit from the synergy of the business combination and is not larger than the reporting segment determined by the Company.

When conducting the impairment test, if there is any indication of impairment in the asset group or profile of asset groups related to goodwill, the impairment test shall be conducted first for the asset group or profile of asset groups excluding goodwill, the recoverable amount shall be calculated, and the corresponding impairment losses shall be recognized. Then, the impairment test shall be conducted for the asset group or profile of asset groups containing goodwill, and the book value and recoverable amount shall be compared. If the recoverable amount is lower than the book value, the impairment losses of goodwill shall be recognized.

29. Long-term deferred expenses

Long-term deferred expenses refer to various expenses that have already occurred but should be borne by the current period and future periods with an amortization period of over 1 year (excluding 1 year). Long-term deferred expenses are recorded at the actual amount incurred and are amortized evenly over the expected benefit period. If a long-term deferred expense item canno benefit future accounting periods, all the amortized value of the item that has not yet been amortized will be fully transferred to the current profit or loss.

30. Contract liabilities

The Company presents contract assets or contract liabilities in the balance sheet based on the relationship between its performance of fulfillment obligations and customer payments. The Company's obligation to transfer goods or provide services to customers for consideration received or receivable is presented as contract liabilities.

31. Employee compensation

(1) Accounting treatments of short-term compensation

During the accounting period when employees provide services for the Company, the short-term compensation actually incurred is recognized as a liability and included in the current profit or loss or related asset costs.

(2) Accounting treatments of post-employment benefits

Post-employment benefits are divided into defined contribution plans and defined benefit plans.

1) During the accounting period when employees provide services for the Company, the amount payable calculated according to the defined contribution plans is recognized as a liability and included in the current profit or loss or related asset costs.

2) Accounting treatments of defined benefit plans usually includes the following steps:

① According to the expected cumulative benefit unit method, unbiased and mutually consistent actuarial assumptions are used to estimate relevant demographic variables and financial variables, measure the obligations arising from the defined benefit plans, and determine the period to which the relevant obligations belong. At the same time, the obligations arising from the defined benefit plans shall be discounted to determine the present value of the defined benefit plan obligations benefit plans and the current service cost;

② If there are assets under the defined benefit plans, the deficit or surplus resulting from the present value of the defined benefit plan obligations less the fair value of the defined benefit plan assets is recognized as a net liability or net asset under defined benefit plans. If there is a surplus under the defined benefit plans, the net assets of the defined benefit plans shall be measured at the lower of the surplus or asset ceiling of the defined benefit plans;

③ At the end of the period, the employee compensation costs arising from the defined benefit plans are recognized as service costs, net interest on net liabilities or net assets under defined benefit plans, and changes arising from the re-measurement of net liabilities or net assets under defined benefit plans. The service costs and net interest on net liabilities or net assets under defined benefit plans are included in the current profit or loss or related asset costs, and the changes arising from the remeasurement of net liabilities or net assets under defined benefit plans are included in other comprehensive income, and are not allowed to be reversed to profit or loss in subsequent accounting periods, but the amount recognized in other comprehensive income can be transferred within the scope of equity.

(3) Accounting treatments of dismissal benefits

For dismissal benefits provided to employees, employee compensation liabilities arising from dismissal benefits are recognized at the earlier of the following dates and included in the current profit or loss: 1) when the Company cannot unilaterally withdraw the dismissal benefits provided due to the termination of labor relations plan or layoff proposal; 2) when the Company recognizes the costs or expenses related to the restructuring involving the payment of dismissal benefits

(4) Accounting treatments of other long-term employee benefits

If other long-term benefits provided to employees meet the conditions of defined contribution plans, they shall be accounted for in accordance with the relevant provisions of defined contribution plans; other long-term benefits shall be accounted for in accordance with the relevant provisions of the defined benefit plans. In order to simplify the relevant accounting treatment, the employee compensation costs arising therefrom shall be recognized as the total net amount of service costs, net liabilities or ne assets of other long-term employee benefits, and changes arising from the re-measurement of net liabilities or net assets of other long-term employee benefits, and shall be included in the current profit or loss or related asset costs.

32. Estimated liabilities

(1) When an obligation related to the contingency become the present obligation of the Company and the performance of such obligation is likely to result in an outflow of economic benefits from the Company, and the amount of such obligation can be measured reliably, the Company recognizes it as estimated liabilities.

(2) The Company conducts the initial measurement of the estimated liabilities according to the best estimate of the expenses required for the performance of the relevant present obligations, and comprehensively considers the risks, uncertainties, time value of money and other factors related to contingencies. If the impact of the time value of money is significant, the best estimate shal be determined by discounting the relevant future cash flows. The Company reviews the book value of the estimated liabilities on the balance sheet date and adjusts the book value to reflect the current best estimate.

33. Share-based payments

Not applicable

34. Preferred shares, perpetual bonds and other financial instruments

Not applicable

35. Revenue

Accounting policies adopted for revenue recognition and measurement disclosed by business type

(1) Recognition of revenue

The Company's revenue mainly includes real estate sales revenue, property management revenue, software sales revenue, rental property revenue, etc.

The Company recognizes revenue when it fulfills its performance obligations in the contract, that is, the revenue is recognized when the customer obtains the right of control over relevant goods. Obtaining right of control over relevant goods means being able to direct the use of the goods and obtain almost all economic benefits from them.

(2) The Company determines that the nature of the relevant revenue obligations is "performance obligations performed within a certain period of time" or "performance obligations performed at a certain time point " based on the relevant provisions of the revenue standards, and recognizes revenue in accordance with the following principles.

1) If the Company meets one of the following conditions, it is considered to fulfill its performance obligations within a certain period of time:

① The customer obtains and consumes the economic benefits brought by the Company's performance at the same time as the Company performs the contract.

② The customer can control over the assets under construction during the Company's performance.

③ The assets produced during the performance of the Company have irreplaceable uses, and the Company is entitled to collect payments for the accumulated performance completed to date throughout the contract period.

For performance obligations performed within a certain period, the Company will recognize the revenue based on the performance progress during that period of time, except where the performance progress cannot be reasonably determined. Considering the nature of the goods, the Company determines the appropriate performance progress by the output method or the input method.

2) For performance obligations that are not performed within a certain period of time and are performed at a certain time point, the Company recognizes revenue at the time point when the customer obtains the control over relevant goods.

When determining whether a customer has obtained control over goods, the Company considers the following indications:

① The Company has the current right to receive the payment for the goods, that is, the customer has the current obligation to pay for the goods.

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

③ The Company has physically transferred the goods to the customer, that is, the customer has physically taken possession of the goods.

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

⑤ The customer has accepted the goods.

⑥ Other indications showing that the customer has obtained control over goods.

(3) Specific policies for the Company's revenue recognition

1) Specific methods for recognition of real estate sales revenue

When the development product has been completed and accepted, the sales contract has been signed and the obligations stipulated in the contract have been fulfilled, as well as the main risks and rewards of the ownership of the development product have been met at the same time, the Company no longer retains the continuing management rights usually associated with the ownership and effective control of the sold development product, the amount of revenue can be measured reliably, the relevant economic benefits are likely to flow in, and the relevant costs incurred or to be incurred can be measured reliably, the realization of sales revenue is recognized. If the real estate construction has been accepted (with the completion acceptance report obtained), an irreversible sales contract has been signed, and the buyer's payment certificate has been obtained (down payment and bank mortgage received in full if bank mortgage is involved; otherwise, full housing payment received), the revenue is recognized at the earlier of the delivery date specified in the delivery notice (delivery is deemed completed if the formalities are not completed within the specified time limit due to the owner's reasons) and the actual time of taking over by the owner.

2) Specific methods for recognition of property management revenue

For property management services provided by the Company, revenue is recognized according to the progress of property services provided.

3) Specific methods for recognition of rental property revenue

Revenue is recognized in accordance with the leasing standards. The Company recognizes the revenue on a straight-line basis or other reasonable methods over the lease term as stipulated in the lease contract

4) Software sales revenue

① Recognition and measurement method for sales revenue from customized software and independent software products

Customized software refers to the software specially designed developed according to the actual needs of the user based on a thorough field investigation of the user's business, in accordance with the software development contract signed with the customer. Such software is not universal. Only when the goods produced by the Company in the performance process have irreplaceable uses, and the Company has the right to receive payments for the accumulated performance completed so far during the entire contract period, the revenue will be recognized over a period of time according to the progress of the completed performance obligations during the contract period. The progress of the completed performance obligations shall be determined according to the ratio of the actual contract costs incurred to complete the performance obligations to the estimated total cost of the contract. Otherwise, the revenue is recognized when the customer obtains the right of control over the relevant product.

If a sales contract is signed on independent software products between the Company and the customer, and the customer directly purchases the standard version of the software, that is, the real estate and facility management platform. The implementation personnel deploy the corresponding module according to the customer's needs, which is a performance obligation to be performed at a certain time point. The Company will recognize the revenue after delivery of the product and the customer has accepted the product.

② Recognition and measurement method for revenue from system integration contract

System integration includes the sales and installation of purchased goods and software products. the system has been installed and debugged and has been put into trial operation or the preliminary inspection report of the purchaser has been obtained; the economic benefits associated with the transaction can flow into the enterprise; the revenue is recognized when the relevant revenue and costs can be measured reliably

③ Recognition and measurement method of technical service revenue

Technical service mainly refers to the business of providing consulting, implementation and after-sales service of products to customers according to contract requirements. If the service period is agreed in the contract, it shall be regarded as the performance obligations to be performed within a certain period of time. During the service provision period, the revenue shall be recognized according to the service period agreed in the contract and the service settled with the customer.

5) Other business revenue is recognized when the performance obligations in the contract are fulfilled, that is, when the customer obtains the relevant control over goods, according to the relevant contracts or agreements.

(4) Measurement of revenue

The Company shall measure revenue based on the transaction price allocated to each individual performance obligation. When determining the transaction prices, the Company considers the impact of factors such as variable consideration, significant financing components in the contract, non-cash consideration, and consideration payable to customers.

1) Variable consideration

The Company determines the best estimate of a variable consideration based on the expected value or the most likely amount, but the transaction prices containing a variable consideration shall not exceed the amount of accumulated recognized revenue that is highly unlikely to be significantly reversed when the relevant uncertainty is eliminated. When an enterprise evaluates whether a major reversal of accumulated recognized revenue is very unlikely to occur, it should also consider the possibility and proportion of revenue reversal.

2) Significant financing component

If there is a significant financing component in the contract, the Company shall determine the transaction prices according to the payable amount that is assumed to be paid in cash by the customer when the customer obtains the right of control over goods. The difference between the transaction price and the contract consideration shall be amortized using effective interest method during the contract period.

3) Non-cash consideration

If the customer pays non-cash consideration, the Company shall determine the transaction price according to the fair value of the non-cash consideration. If the fair value of the non-cash consideration cannot be reasonably estimated, the Compan determines the transaction prices indirectly by referring to the stand-alone selling prices it promises for transferring the goods to the customer.

4) Consideration payable to customers

For consideration payable to customers, the consideration payable should be offset against the transaction prices, and should offset the current revenue at the later of the recognition of relevant revenue and the payment (or commitment to pay) of the customer consideration, except for the consideration payable to customers for obtaining other clearly distinguishable goods from customers.

Where the consideration payable to a customer is for the purpose of obtaining other clearly distinguishable goods from the customer, the purchased goods shall be recognized in a manner consistent with other purchases by the Company. If the consideration payable by an enterprise to a customer exceeds the fair value of clearly distinguishable goods obtained from the customer, the excess amount shall be offset against the transaction prices. If the fair value of clearly distinguishable goods obtained from customers cannot be reasonably estimated, the enterprise shall offset the full amount of the consideration payable to customers against the transaction prices.

Different revenue recognition methods and measurement methods involved in the use of different business models for similar business

36. Contract costs

Contract costs are divided into contract performance costs and contract acquisition costs.

If the cost incurred by the Company to perform the contract meet the following conditions at the same time, it shall be recognized as an asset as the contract performance cost:

(1) The cost is directly related to a current contract or an expected contract to be obtained, including direct labor, direct materials, manufacturing overhead (or similar expenses), costs expressly borne by the customer, and other costs incurred solely due to the contract;

(2) The cost increases the resources that the enterprise will use to fulfill its performance obligations in the future;

(3) Such cost is expected to be recovered.

If the incremental costs incurred by the Company to obtain the contract are expected to be recovered, the incremental costs shall be recognized as an asset as the contract acquisition cost; however, if the asset amortization period does not exceed one year, it can be included in the current profit or loss when it occurs.

Assets related to the contract costs are amortized on the same basis as the recognition of the revenue of the goods or services related to the asset.

If the book value of the assets related to the contract costs is higher than the difference between the following two items, the Company will make provision for impairment for the excess and recognize it as asset impairment loss:

(1) The remaining consideration expected to be obtained by the transfer of goods or services related to the assets;

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

If the above provision for asset impairment is subsequently reversed, the book value of the asset after the reversal shall no exceed the book value of the asset on the reversal date under the assumption that no provision for impairment is made.

37. Government subsidies

(1) Government subsidies are recognized when the following conditions are met at the same time: 1) the Company can meet the conditions attached to the government subsidies; 2) the Company can receive government subsidies. The government subsidies considered as monetary assets are measured at the amount received or receivable. If government subsidies are non-monetary assets, they shall be measured at fair value; if the fair value cannot be obtained reliably, it shall be measured at the nominal amount

(2) Judgment basis and accounting treatments of asset-related government subsidies

Government subsidies used for the acquisition, construction or otherwise forming long-term assets as specified in government documents shall be classified as asset-related government subsidies. If there is no relevant clear stipulation in the government document, the judgment shall be made on the basis of the basic conditions that must be met to obtain the subsidy, and if the basic condition is forming long-term assets through purchase, construction or other means, it shall be deemed as asset-related government subsidies. Asset-related government subsidies shall be used to offset the book value of relevant assets or recognized as deferred income. If the asset-related government subsidies are recognized as deferred income, they shall be included in the profit or loss by stages in a reasonable and systematic manner within the service life of the relevant assets. Government subsidies measured according to the nominal amount are directly included in current profit or loss. If the relevant assets are sold, transferred, scrapped or damaged before the end of their service life, the undistributed balance of relevant deferred income will be transferred to the profit or loss of the current period of asset disposal.

(3) Judgment basis and accounting treatments of income-related government subsidies

Government subsidies other than those related to assets shall be classified as income-related government subsidies. For government subsidies that contain both asset-related parts and income-related parts, if it is difficult to distinguish whether they are asset-related or income-related, they will be classified as income-related government subsidies as a whole. Income-related government subsidies used to compensate for relevant costs or losses in subsequent periods, shall be recognized as deferred income, and shall be included in the current profit or loss or used to offset relevant costs during the period when relevant costs or losses are recognized; if they are used to compensate the relevant costs or losses incurred, they shall be directly included in the current profit or loss or used to offset the relevant costs.

(4) Government subsidies related to the daily operating activities of the Company shall be included in other income or offset against relevant costs according to the essence of economic business. Government subsidies unrelated to the daily activities of the Company shall be included in the non-operating income or expenditure. For recognized government subsidies to be returned, if the book value of the relevant assets is offset at initial recognition, the book value of the assets shall be adjusted; if there is a relevant deferred income balance, the book balance of the relevant deferred income shall be offset, and the excess shall be included in the current profit or loss; if it falls under other circumstances, it shall be directly included in the current profit or loss.

38. Deferred tax assets/deferred tax liabilities

(1) According to the temporary differences between the book value of assets and liabilities and their tax bases (if the tax base of items not recognized as assets and liabilities can be determined in accordance with tax laws, the difference between the tax base and the book value), the deferred tax assets or deferred tax liabilities are calculated and recognized according to the applicable tax rate during the period when the assets are expected to be recovered or the liabilities are settled.

(2) Deferred tax assets are recognized to the extent of the taxable income that is likely to be obtained to offset the deductible temporary differences, unless the deductible temporary differences arise from the following transactions:

1) The transaction is not a business combination, and the transaction does not affect accounting profit or taxable income (or deductible losses) when it occurs;

2) For deductible temporary differences related to subsidiaries, joint ventures and investments in associates, the corresponding deferred tax assets shall be recognized if the following conditions are met at the same time: the temporary differences are likely to be reversed in the foreseeable future, and the taxable income used to offset the deductible temporary differences is likely to be obtained in the future.

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

(3) All taxable temporary differences are recognized as relevant deferred tax liabilities, except for taxable temporary differences arising in the following transactions:

The initial recognition of goodwill, or the initial recognition of assets or liabilities arising from transactions with the following characteristics: the transaction is not a business combination, and the transaction does not affect accounting profit or taxable income (or deductible losses) when it occurs.

Taxable temporary differences related to investments in subsidiaries, joint ventures and associates, provided that the timing of the reversal of these temporary differences can be controlled and the temporary differences are unlikely to be reversed in the foreseeable future.

(4) On the balance sheet date, the book value of deferred tax assets is reviewed. If it is likely to earn sufficient taxable income in the future to offset the benefits of deferred tax assets, the book value of deferred tax assets is written down. When it is likely to earn sufficient taxable income, the written down amount is reversed.

(5) The Company's current income tax and deferred income taxes are included in the current profit or loss as income tax expenses or income, but do not include income tax arising from the following circumstances: 1) business combination; 2) transactions or events directly recognized in the owners' equity.

39. Lease

(1) Accounting treatments for leases in which the Company is the lessee

On the lease commencement date, the Company recognizes leases that do not exceed 12 months and do not include purchase options as short-term leases; if the single leased assets are new and with a low value, the leases are recognized as leases of low

value assets. If the Company subleases or expects to sublease the leased assets, the original leases shall not be recognized as leases of low value assets.

For all short-term leases and leases of low value assets, the Company, during each period of the lease term, includes the lease payments into the relevant asset cost or the current profit or loss according to the straight-line method.

Except for the above-mentioned short-term leases and leases of low value assets with simplified treatment, the Company recognizes the right-of-use assets and lease liabilities for the lease on the lease commencement date.

1) Right-of-use assets

Right-of-use assets are initially measured at cost, which includes: 1) the initial measurement amount of the lease liabilities; 2) the lease payments made on or before the lease commencement date, or the relevant amount after deducting the lease incentive already enjoyed if any; 3) initial direct costs incurred by the lessee; 4) the costs expected to be incurred by the lessee for dismantling and removing the leased assets, restoring the site where the leased assets are located or restoring the leased assets to the condition agreed in the lease terms.

The Company depreciates the right-of-use assets according to the straight-line method. If it can be reasonably determined that the ownership of leased assets will be acquired upon the expiration of the lease term, the Company depreciates the leased assets over their remaining service life. If it cannot be reasonably determined that the ownership of leased assets will be acquired upon the expiration of the lease term, the Company depreciates the leased assets during the shorter of the lease term and the remaining service life of the leased assets.

2) Lease liabilities

On the lease commencement date, the Company recognizes the present value of the unpaid lease payments as lease liabilities. When calculating the present value of lease payments, the interest rate implicit in lease is used as the discount rate. If the implicit interest rate of the lease cannot be determined, the incremental borrowing rate of the Company is used as the discount rate. The difference between the lease payments and its present value is recognized as unrecognized financing expenses, and the interest expenses are recognized at the discount rate of the present value of the recognized lease payments in each period of the lease term and included in the current profit or loss. Variable lease payments not included in the measurement of lease liabilities are included in the current profit or loss when actually incurred.

After the lease commencement date, the Company remeasures the lease liability based on the present value of the changed lease payments in case of any change in below items: actual fixed payment amount, estimated amount payable of the guaranteed residual value, the index or ratio used to determine the lease payments, or the evaluation result or actual exercise of the purchas option, renewal option or termination option. In such cases, the book value of the right-of-use assets is also adjusted accordingly If the book value of the right-of-use assets has been reduced to zero, but the lease liabilities still need to be further reduced, th remaining amount is included in the current profit or loss.

If there is a modification in the lease and the following conditions are met simultaneously, the Company accounts for the lease modification as a separate lease: ① the lease change expands the lease scope by adding the right of use on one or more leased assets; ② the increased consideration is equivalent to the amount of the separate price of the expanded part of the lease scope adjusted according to the contract conditions.

If the lease modification is not accounted for as a separate lease, on the effective date of the lease modification, the Company re-apportions the consideration of the modified contract, re-determines the lease term, and re-measures the lease liabilities at the present value calculated at the modified lease payments and the revised discount rate. If a lease modification results in a reduced scope of the lease or a shortened lease term, the Company reduces the book value of the right-of-use assets accordingly and recognizes the gain or loss related to the partial or complete termination of leases in current profit or loss. If there are other lease modifications that result in a re-measurement of lease liabilities, the Company adjusts the book value of right-of-use assets accordingly.

(2) Accounting treatments for leases in which the Company is the lessor

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

1) Operating leases

During each period of the lease term, the Company recognizes the lease receipts as rental income according to the straight line method, and the initial direct costs incurred in connection with the operating leases are capitalized and amortized on the same basis as the recognition of rental income, and included in the current profit or loss in installments. The variable lease payments related to operating leases obtained by the Company but not yet included in the lease receipts are included in the current profit or loss when actually incurred.

2) Financing leases

On the lease commencement date, the Company recognizes the financing lease receivables according to the net lease investment (the sum of the unguaranteed residual value and the present value of the lease receipts not received on the lease commencement date discounted at the interest rate implicit in lease), and derecognizes the financing lease assets. During each period of the lease term, the Company calculates and recognizes the interest income at the interest rate implicit in lease.

The variable lease payments obtained by the Company but not yet included in the measurement of net lease investment are included in the current profit or loss when actually incurred.

3) Lease modification

In case of any modifications in operating leases, the Company accounts for the modified lease as a new lease from the effective date of the modification, and the advance or receivable lease receipts related to the lease before the modification is regarded as the receipt amount of the new lease.

If there is a modification in the financing lease and the following conditions are met simultaneously, the Company accounts for the modification as a separate lease: ① the modification expands the scope of the lease by adding the right of use of one or more leased assets; ② the increased consideration is equivalent to the amount of the separate price of the expanded part of the lease scope adjusted according to the contract conditions.

If the modification in the financing lease is not accounted for as a separate lease, the Company treats the modified lease respectively according to the following circumstances: ① if the modification takes effect on the lease commencement date and the lease is classified as operating leases, the Company accounts for it as a new lease from the effective date of the lease modification and takes the net lease investment before the effective date of the lease modification as the book value of the leased assets; ② if the modification takes effect on the lease commencement date, the lease will be classified as a financing lease, and the Company accounts for it in accordance with the provisions of Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments on modifying or renegotiating the contract.

4) Sublease

When the Company acts as a sublease lessor, the original lease contract and the sublease contract are accounted for separately according to the accounting treatment requirements of the lessee and the lessor. If the original lease is a short-term leases and simplified accounting treatments have been adopted, the sublease is classified as operating leases.

(3) Sale and leaseback

The Company, in accordance with the provisions of Accounting Standards for Business Enterprises No. 14 - Revenue, evaluates and determines whether the transfer of assets in the sale and leaseback transactions is a sale.

If the transfer of assets in the sale and leaseback transactions is a sale, the lessee measures the right-of-use assets arising from the sale and leaseback according to the part of the book value of the original assets related to the right of use obtained from the leaseback, and only recognizes the relevant gains or losses on the rights transferred to the lessor. The lessor accounts for asset purchase in accordance with other applicable accounting standards for business enterprises and conducts accounting treatment fo the asset lease in accordance with Accounting Standards for Business Enterprises No. 21 - Leases

If the transfer of assets in the sale and leaseback transactions is not a sale, the lessee continues to recognize the transferred assets, and recognizes the financial liabilities equal to the transfer revenue. Meanwhile, the lessee accounts for the financial

liabilities in accordance with Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments. The lessor does not recognize the transferred assets, but recognizes financial assets equal to the revenue transferred. It also accounts for that financial asset in accordance with Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments.

40. Other major accounting policies and accounting estimates

41. Major changes in accounting policies and accounting estimates

(1) Major changes in accounting policies

□Applicable Not applicable

(2) Major changes in accounting estimates

□Applicable Not applicable

(3) Adjustments of relevant items of financial statements at the beginning of the year in the year of initial implementation of new accounting standards from 2026

□Applicable Not applicable

42. Others

VI. Taxation

1. Main tax types and tax rates

If there are taxpayers with different corporate income tax rates, please disclose with an explanation

2. Tax incentives

(1) According to the provisions of Article 2 Property service of the 37th category of commercial service industry in the incentive category of the Guidance Catalogue of Industrial Structure Adjustment (2011 Edition) (GJFGW No. 9) issued by the National Development and Reform Commission, the eligible western China enterprises shall be subject to a corporate income tax at a reduced tax rate of 15%. The above policy applies to subsidiaries Chongqing Shenzhen International Trade Center Property Management Co., Ltd. and the Chongqing Branch of Shenzhen International Trade Center Property Management Co., Ltd.

(2) Shenzhen Facility Management Community Co., Ltd. passed the re-inspection for high-tech certification on December 25, 2025. The certificate number is GR202544204121, and the validity period is three years. According to the tax law, the preferentia corporate income tax rate of 15% applies for 2025.

(3) According to the Announcement on Preferential Income Tax Policies for Small and Micro Enterprises and Individual Business Entities (CZB SWZJ GG [2023] No.6) issued by the Ministry of Finance and the State Taxation Administration, and according to the Announcement on Tax Policies for Further Supporting the Development of Small and Micro Enterprises and Individual Business Entities (CZB SWZJ GG [2023] No.12) issued by the Ministry of Finance and the State Taxation Administration, small low-profit enterprises enjoy a corporate income tax reduction with 25% of the actual corporate income fo calculating taxable income, and 20% as the tax rate. The resource tax (excluding water resources tax), urban maintenance and

construction tax, housing tax, urban land use tax, stamp duty (excluding stamp duty on securities transactions), farmland occupation tax, education surcharge and local education surcharge shall be halved for small-scale value-added tax payers, smal low-profit enterprises and individual business entities, with the validity period from January 1, 2023 to December 31, 2027. A total of 24 subsidiaries, including Shenzhen Property Engineering and Construction Supervision Co., Ltd. and Shenzhen GuoGuang Mechanical and Electrical Equipment Co., Ltd., are eligible for the policy

3. Others

Note 1: the Company and its subsidiaries' value-added tax taxable items and tax rates are shown in the table below

VII. Notes to items in consolidated financial statements

1. Monetary funds

Unit: RMB

Other explanations

At the end of the period, the amount of restricted funds due to mortgage, pledge, freezing, etc. is RMB80,123,834.20, mainly including guarantee and interest of RMB3,877,419.02; the restricted funds in the bank deposits mainly include the frozen funds of RMB3,301,033 and the principal and interest of time deposits of RMB72,945,382.18; the above amount is not treated as cash and cash equivalents due to restrictions on use.

The funds deposited overseas are mainly the balance of monetary funds of the overseas subsidiaries Shum Yip Properties Development Limited and Vietnam Shenzhen International Trade Center Property Management Co., Ltd.

2. Financial assets held for trading

Unit: RMB

Other explanations

3. Derivative financial assets

Unit: RMB

Other explanations

4. Notes receivable

(1) Presentation of notes receivable by category

Unit: RMB

(2) Disclosure by provision method for bad debts

Unit: RMB

If the provision for bad debts of notes receivable is made in accordance with the general model of expected credit losses: □Applicable Not applicable

(3) Provision for bad debts accrued, recovered or reversed for the current period

Provision for bad debts for the current period:

Unit: RMB

Significant amounts of recovered or reversed provision for bad debts for the current period:

□Applicable Not applicable

(4) The Company's pledged notes receivable at the end of the period

Unit: RMB

(5) Notes receivable endorsed or discounted by the Company and not yet due on the balance sheet date at the end of the period

Unit: RMB

(6) Actual write-off of notes receivable for the current period

Unit: RMB

Including write-off of important notes receivable:

Unit: RMB

Explanation on write-off of notes receivable:

5. Accounts receivable

(1) Disclosure by aging

Unit: RMB

(2) Disclosure by provision method for bad debts

Unit: RMB

Name of category of provision for bad debts on an individual basis: RMB113,708,347.09 Unit: RMB

Name of category of provision for bad debts on a combination basis: RMB55,817,321.64 Unit: RMB

Explanation on the basis for determining the combination: If the provision for bad debts of accounts receivable is made in accordance with the general model of expected credit losses: □Applicable Not applicable

(3) Provision for bad debts accrued, recovered or reversed for the current period

Provision for bad debts for the current period:

Unit: RMB

Significant amounts of recovered or reversed provision for bad debts for the current period: Unit: RMB

(4).Actual write-off of accounts receivable for the current period

Unit: RMB

Including write-off of important accounts receivable:

Unit: RMB

Explanation on write-off of accounts receivable:

(5) Top five accounts receivable by the debtor in terms of the ending balance and contract assets

Unit: RMB

6. Contract assets

(1) Details of contract assets

Unit: RMB

(2) Major changes of book value during the reporting period and reasons

Unit: RMB

(3).Disclosure by provision method for bad debts

Unit: RMB

The provision for bad debts made according to the general model of expected credit losses □Applicable Not applicable

(4) Provision for bad debts accrued, recovered or reversed for the current period

Unit: RMB

Significant amounts of recovered or reversed provision for bad debts for the current period:

Unit: RMB

Other explanations

(5).Actual write-off of contract assets for the current period

Unit: RMB

Unit: RMB

Explanation on write-off of contract assets: Other explanations:

7. Receivables financing

(1) Presentation of receivables financing by category

Unit: RMB

(2) Disclosure by provision method for bad debts

Unit: RMB