1
Company Code:600346 Company
Abbreviation:Hengli Petrochemical
Hengli Petrochemical Co. Ltd
2025Annual Report2
Letter to Shareholders Partners and Employees
Dear Shareholders Partners and Employees:
As the seasons turn all things are renewed; dawn is ahead and our blueprint is ready to unfold.As the vessel of 2025 sails past the lighthouse of time we pause to look back upon the ocean we have
navigated together—an ocean where the undercurrents of a shifting global landscape surged yet also
resounded with the firm echoes of our inward reform and upward climb. This was a year of calibrating
our compass amid wind and waves and of building strength while diving deep. More importantly it
was a journey of weaving glory with sweat and lighting the way forward with resilience.Tides surge across the world and the order is being reshaped. Great-power rivalries intertwine
and evolve while geopolitical undercurrents have never ceased. Globalization seeks a new equilibrium
amid turbulence with the shift in economic growth drivers under pressure and protectionism
coexisting with supply chain restructuring. All this tests the wisdom and composure of every enterprise
that cherishes far-reaching ambitions. Focusing on China development is charting new ground under
pressure. Behind the 5% economic growth lies the targeted infusion of macro policies and more
importantly a pivotal leap in the continuous transition from old to new growth drivers. The forward
momentum of the nation has laid a solid foundation for our long-term development. And for every
striver at Hengli 2025 was a vivid practice of anchoring direction amid uncertainty and creating value
through transformation. We took prudent steps in response to external volatility and we rejoiced at
every internal breakthrough. We have felt the chill of the market and we understand more clearly than
ever—only by deep cultivation of our core business and diligent strengthening of our internal
capabilities can we make every step forward warmer and more powerful.A steady horse accomplishes the journey through unrelenting perseverance. Looking back on
2025 we walked through the mud endured solitude and tasted the full spectrum of experience—yet
our vision remained bright and our steps unwavering. This was a year of forging ahead through waves
and a year of richly laden branches.This year we focused on “Smart Manufacturing Upgrades and a Green Future” advancing
intelligent and green production. Along this journey we have accumulated a wealth of achievements.Hengli Chemical Fiber was selected as a national “Excellence-Level Intelligent Factory”; Deli ChemicalFiber and Hengke Advanced Materials were recognized as “Jiangsu Province Advanced-Level IntelligentFactories.” Hengli Petrochemical Refining received the “China Water Conservation Award”; Kanghui
New Materials was honored as a national-level “Green Factory”; Hengli Petrochemical (Huizhou) was
named a provincial-level “Green Factory”; Hengke Advanced Materials received the “Energy EfficiencyLeader” title from the Ministry of Industry and Information Technology; and Hengli Petrochemical
(Huizhou) was successfully included on the “Water Efficiency Leader” list for the petrochemical3
industry. This year we cultivated our strengths with precision forged ahead with determination and
achieved continuous breakthroughs. Hengli Chemical Fiber led the revision of the national standardfor polyester industrial filament yarn. The project “Key Technologies for Industrialization andModification Applications of PBS-Based Biodegradable Materials” jointly developed by Kanghui New
Materials and Dalian University of Technology won the Second Prize of Liaoning Provincial Science and
Technology Progress Award. Kanghui Nantong was recognized as a national-level “5G Factory.” Hengli
Chemical Fiber and Jiangsu Kanghui officially obtained certification for international automotive quality
management systems receiving a “passport” to enter the global automotive supply chain. This year
we continued to advance the integration of Party building and business operations. Hengli ChemicalFiber was recognized as a “National Advanced Collective in the Industrial and Information TechnologySystem”; Hengli Petrochemical Refining was honored with the 7th “National Civilized Unit” award;
Kanghui New Materials received the “Liaoning Provincial May 1st Labor Certificate”; Hengli
Petrochemical (Huizhou) was named a “Guangdong Province Advanced Collective” in 2025; and Deli
Chemical Fiber won the “Jiangsu Province Workers' Pioneer” title. This year we carried gratitude and
responsibility in our hearts writing the responsibility of a major enterprise with a spirit of public
service. Poverty alleviation educational support disaster relief... Hengli's footprint has always been
imprinted wherever warmth is needed. Our mission burns bright as a torch; our original aspiration
remains firm as bedrock. Time never fails the striver—in 2025 Hengli achieved full-year operating
revenue of 200.986 billion yuan and net profit of 7.075 billion yuan a year-on-year increase of 0.44%.Each business segment continued to demonstrate strong vitality and resilience delivering a solid and
impressive high-score answer. Every honor was forged by hardworking hands; every achievement
embodies day-and-night dedication cross-team collaboration and the loyalty and commitment of
every Hengli member who integrates personal aspirations into the Company's development. Here we
extend our most sincere gratitude to all shareholders partners and employees!
Our armor is not yet shed and the war drums beat once more. Facing 2026 we have already set
out. Focusing on our core business striving for excellence and racing against the clock—we will ascend
to new heights with a brave and steadfast posture charting a new chapter.In the year ahead we will hold fast to our perseverance and jointly build a foundation to last a
century. We will continue to center on one purpose implement two major strategies consolidate
three cornerstones deeply cultivate four major industries and strengthen six key systems. We will
accelerate innovation and R&D intensify management reform and speed up technological progress
driving Hengli toward an even farther future through systematic and sustainable practices. In the year
ahead we will fortify the foundations of quality cost and responsiveness. We will drive quality
beyond “meeting standards” toward “exceeding expectations” embedding the voice of the customerdeep within the DNA of our products. We will uphold the belief that “products are manufactured notmerely inspected.” We will deepen cost management from “cost-cutting and expense reduction” to4
“systematic value creation” implementing full-lifecycle cost control elevating cost management to
value creation. We will upgrade rapid response from “timely reaction” to “agile anticipation” building
an end-to-end visualization system that connects the entire data chain from order to delivery. In the
year ahead we will Unite our hearts and strengths fix our sights on the goal and press forward with
sustained effort. We will closely track key performance indicators and practice the strategy of
“production based on sales and sales driven by production”. We will always uphold the philosophy of
“customer-centered market-oriented and fully mobilized marketing by all” breaking free from fixed
mindsets. Through relentless striving and efficient collaboration we will make every effort to achieve
our business objectives and create maximum value together.Having weathered the storms we finally see the rainbow; all things in the world must be
tempered through trials. We are deeply aware that the road ahead may not always be smooth. The
macro environment remains intricate and volatile while micro-level operations still demand that we
tackle tough challenges. Yet more importantly we must see this—economic warmth is returning
market momentum is steadily gathering and the lamps of confidence are being lit one after another.We aspire to be that flickering warm spark that captures eternity in a fleeting moment blending our
individual endeavors into the tide of the times letting glimmers echo one another and letting faith
illuminate faith.We firmly believe that the cold winter will eventually recede. That is why we are willing to be
guardians in the blizzard pioneers breaking the ice and light-bearers in the dark night. We firmly
believe that the distant shore can be reached. That is why we will plant our faith courage and
resilience deep into the soil beneath our feet—unafraid of cyclical ups and downs undaunted by high
mountains and long roads. In 2026 let us stir up the passion to forge ahead never trapped by empty
talk nor indulging in hollow acclaim. Raise high the sail of ideals grip tightly the oar of practical action
and venture into the farther more expansive deep blue—to see glory once more and journey together
toward the mountains and seas!
Chairman: 范红卫
April 20265
Important Tips
I. The Company's board of directors directors and senior managers guarantee that the content of
the Annual report is true accurate and complete and that there are no false records
misleading statements or major omissions and assume individual and joint legal
responsibilities.II. All directors of the Company attended the board meeting.III. Zhonghui Certified Public Accountants (Special General Partnership) issued a standard
unqualified audit report for the Company.IV. Fan Hongwei the person in charge of the Company Liu Xuefen the person in charge of
accounting work Zheng Minxia the person in charge of the accounting department (accounting
supervisor) declare that they guarantee the authenticity accuracy and completeness of the
financial report in the annual report.V. Profit distribution plan for the reporting period approved by the board of directors or plan for
capitalization of public reserve funds
The Company's profit distribution plan for 2025 is as follows: based on the total share capital on
the equity distribution registration date a cash dividend of 0.29 yuan per share (including tax) will be
distributed to all shareholders.This profit distribution plan has been deliberated and approved at the third meeting of the tenth
board of directors of the Company and needs to be submitted to the Company's 2025 annual general
meeting of shareholders for consideration.As of the end of the reporting period the parent company had unrecovered losses along with
the relevant circumstances and their impact on matters such as dividend distribution.□适用√不适用
VI. Disclaimer of Forward-Looking Statements
√适用□不适用
Forward-looking descriptions such as future plans and development strategies involved in this
report do not constitute the Company's actual commitment to investors. Investors are requested to
maintain sufficient risk awareness and understand the differences between plans forecasts and
commitments.VII. Whether there is any non-operational occupation of funds by controlling shareholders and other
related parties
No6
VIII. Whether there is any external guarantee provided in violation of the prescribed decision-making
procedures
No
IX. Whether more than half of the directors cannot guarantee the authenticity accuracy and
completeness of the annual report disclosed by the Company
No
X. Significant Risk Warning
During the reporting period the Company had no particularly significant risks that would have a
substantial impact on production and operation.XI. Others
√适用□不适用
This annual report is prepared in Chinese and English respectively. If there is any discrepancy
between Chinese and English the Chinese version shall prevail.7
Content
Chapter 1 Definitions ............................... 8
Chapter 2 Company Profile and Key Financial Indica.. 13
Chapter 3 Management Discussion and Analysis ....... 19
Chapter 4 Corporate Governance Environment and Soc.. 59
Chapter 5 Important Events ......................... 79
Chapter 6 Changes in shareholding and shareholder .. 91
Chapter 7 Information of bonds ......................99
Chapter 8 Financial Reports ....................... 106
Financial statements signed and sealed by the legal representative person
in charge of accounting and person in charge of the accounting organization
(accounting supervisor).Reference file directory Original audit report sealed by the accounting firm and signed and sealed by
a certified public accountant.Original copies of all company documents and announcements
publicly disclosed during the reporting period.8
Chapter 1 Definitions
I. Definitions
In this report the terms listed below are defined as follows unless the context otherwise implies:
Definitions of Frequently-Used Terms
Reporting Period Referto From 1/1/2025 to 31/12/2025
Company the Company or Hengli Refer
Petrochemical to Hengli Petrochemical Co. Ltd.CSRC Referto China Securities Regulatory Commission
SSE Refer Shanghai Stock Exchangeto
Refer
Company Law 《Company Law of the People’s Republic of China》《 》 to
Securities Law Refer 《Securities Law of the People’s Republic of China》《 》 to
Articles of Association Refer 《Hengli Petrochemical Co. Ltd. Articles of Association》《 》 to
Hengli Group Refer Hengli Group Co. Ltd. controlling shareholder of the listedto company
Hailaide International Investment Ltd. person
Hailaide Referto acting-inconcert with controlling shareholder of the listedcompany
Refer Tak Shing Li International Holdings Ltd. personTak Shing Li to acting-inconcert with controlling shareholder of the listedcompany
Refer Jiangsu Hegao Investment Co. Ltd. personHegao Investment to acting-inconcert with controlling shareholder of the listedcompany
Hengneng Investment (Dalian) Co. Ltd. person
Hengneng Investment Referto acting-inconcert with controlling shareholder of the listedcompany
Refer Hengfeng Investment (Dalian) Co. Ltd. personHengfeng Investment to acting-inconcert with controlling shareholder of the listedcompany
Hainan Huayin Tianxia Private Equity Fund Management
Huayin Xuyang No. 1 Refer Co. Ltd. – Huayin Xuyang No. 1 Private Equity Investmentto Fund a concerted party of the listed company's controlling
shareholder.Hengli Chemical Fiber Refer Jiangsu Hengli Chemical Fiber Co. Ltd. subsidiary to theto listed company
Suzhou Susheng Thermal Power Co. Ltd. subsidiary to the
Susheng Thermal Power Referto Hengli Chemical Fiber sub-subsidiary to the listedcompany
Jiangsu Hengke Advanced Materials Co. Ltd. subsidiary to
Hengke Advanced Materials Referto the Hengli Chemical Fiber sub-subsidiary to the listedcompany
Jiangsu Xuanda Refer Jiangsu Xuanda Polymer Materials Co. Ltd. subsidiary toto the Hengke Advanced Materials
Deli Chemical Fiber Refer Jiangsu Deli Chemical Fiber Co. Ltd. subsidiary to theto Hengli Chemical Fiber sub-subsidiary to the listed9
company
Kanghui New Material Refer Kanghui New Material Technology Co. Ltd. subsidiary toto the listed company
Kanghui Dalian Kanghui Dalian New Refer Kanghui Dalian New Materials Technology Co. Ltd.Material to subsidiary to the Kanghui New Material sub-subsidiary tothe listed company
Refer Jiangsu Kanghui New Material Technology Co. Ltd.Jiangsu Kanghui to subsidiary to the Kanghui New Material sub-subsidiary tothe listed company
Kanghui Nantong Kanghui Nantong Refer Kanghui Nantong New Material Technology Co. Ltd.New Material to subsidiary to the Kanghui New Material sub-subsidiary tothe listed company
Hengli Petrochemical Chemical Refer Hengli Petrochemical (Dalian) Chemical Co. Ltd. (nowto deregistered)
Hengli Investment Refer Hengli Investment (Dalian) Co. Ltd. subsidiary to the listedto company
Refer Hengli Petrochemical (Dalian) Co. Ltd. subsidiary to theHengli Petrochemical (Dalian) to Hengneng Investment sub-subsidiary to the listedcompany
Hengli Petrochemical (Huizhou) Co. Ltd. subsidiary to the
Hengli Petrochemical (Huizhou) Referto Hengneng Investment sub-subsidiary to the listedcompany
Hengli Petrochemical Refining Refer Hengli Petrochemical (Dalian) Refining Co. Ltd. subsidiaryto to the listed company
Hengli Petrochemical (Dalian) New Refer Hengli Petrochemical (Dalian) New Material Technology
Material to Co. Ltd. subsidiary to the Hengli Petrochemical Refiningsub-subsidiary to the listed company
Crude oil is petroleum directly exploited from an oil well
Crude Oil Refer without being processed and is a dark-brown orto dark-green viscous liquid or semisolid flammable
substance that is composed of various hydrocarbons.A hydrocarbon containing a benzene ring structure in its
molecule 。 Aromatic hydrocarbons mainly includingAromatic Hydrocarbon Referto benzene methylbenzene xylene etc. are one of the mostimportant basic raw materials for the production of
petrochemicals。
A compound consisting of two carbon atoms and four
hydrogen atoms. It is the basic chemical raw material of
Refer synthetic fiber synthetic rubber synthetic plastic-Ethylene to (polyethylene and polyvinyl chloride) synthetic ethanol(alcohol) and also used in manufacturing chloroethylene
styrene ethylene oxide acetic acid acetaldehyde ethanol
and explosives etc.A thermoplastic resin obtained by polymerization of
Polyethylene (PE) Refer Ethylene. Polyethylene is odorless non-toxic feels liketo wax has excellent low temperature resistance good
chemical stability and is resistant to most acids and alkalis.Refer A semi-crystalline synthetic resin material with strong acidPOLYPROPYLENE (PP) to and alkali resistance excellent electrical insulationperformance harder and higher melting point than PE.Refer An organic compound usually a colorless aromatic liquidStyrene to used primarily in the production of plastics resins andrubber.10
Refer An organic compound a colorless gas with a special smellButadiene (BD) to the main raw material for the production of syntheticrubber.A kind of Aromatic Hydrocarbon a colorless transparent
PARAXYLENE (PX) Refer liquid is one of the raw materials for the production ofto purified terephthalic acid (PTA) which is used to produce
plastics Polyester Fiber and films.Refer It is white crystal or powder at normal temperaturePURIFIED TEREPHTHALIC ACID (PTA) to non-toxic flammable if mixed with air within a certainlimit it will burn when exposed to fire.Colorless odorless sweet viscous liquid mainly used in
METHYLENE GLYCOL (MEG OR EG) Refer the production of Polyester Fiber antifreeze unsaturatedto polyester resin lubricants plasticizers non-ionic
surfactants and explosives.Colorless oily liquid flammable miscible with water.
14-Butanediol (BDO) Referto Soluble in methanol ethanol acetone slightly soluble inether.
Refer Organic compound a colorless liquid with a pungent odor.Acetic Acid to It is the raw material for the manufacture of rayon filmaspirin etc.A transparent liquid with a slight fragrance at normal
Refer temperature. It is safe convenient less polluting and easyDMC Dimethyl Carbonate to to transport in production. It is also widely used inpesticides medicines spices fuel additives solvents and
the electronics industry.Polyethylene terephthalate (referred to as polyester) is a
fiber-forming high polymer prepared from PTA and MEG as
Refer raw materials through transesterification or esterificationPolyester Polyester Chip or PET to and polycondensation reactions. Fiber-grade polyesterchips are used to make polyester staple fiber and Polyester
Filament Yarn (PFY) and film-grade chips are used to make
various film products.Polybutylene terephthalate-adipate a
Refer petrochemical-based biodegradable plastic has excellentPBAT to biodegradability. It is very active in the research ofbiodegradable plastics and one of the best degradable
materials in the market.Polybutylene succinate polymerized from succinic acid
and 1 4-butanediol (BDO) has good thermal performance
Refer and mechanical processing performance and is easilyPBS to destroyed by various microorganisms in nature or animalsand plants. Enzyme decomposes metabolizes and finally
decomposes into carbon dioxide and water which is a
typical fully biodegradable material.A type of thermoplastic engineering plastic containing
carbonate groups in its molecular backbone. Based on the
structure of the ester group it can be divided into
PC Polycarbonate Refer aliphatic aromatic and other types. It has highto transparency excellent impact resistance heat resistance
flame retardancy and good electrical insulation. Its light
transmittance is close to that of glass and its impact
strength is much higher than that of ordinary plastics.PS Polystyrene Refer Colorless and transparent thermoplastic with a glass11
to transition temperature above 100°C. It has excellent heat
insulation electrical insulation and transparency and is
widely used in fields such as plexiglass ABS resin
electronic appliances and other engineering plastics.Its characteristics include high impact strength good
ABS Acrylonitrile-Butadiene-Styrene Refer chemical stability and electrical properties making it
Copolymer to suitable for manufacturing mechanical partswear-resistant parts transmission parts and
telecommunications parts.Refer Colorless and transparent liquid with a special odor. It isMethanol to volatile and flammable and belongs to the core basicchemical raw materials.White crystals weakly acidic slightly soluble in water are
Adipic Acid Refer a core basic chemical raw material for the production ofto nylon 66 polyurethane and polyester and are also used in
the food and pharmaceutical fields.Pale yellow brittle crystal or powder composed of sulfur
Refer with a distinctive odor. It is insoluble in water slightlySulfur to soluble in ethanol and ether and readily soluble in carbondisulfide. It is widely used in the fields of acid production
rubber pesticides medicine and gunpowder.A polyethylene product with high density and linear
structure formed by the polymerization reaction of
Refer ethylene under certain temperature and pressureHDPE High-Density Polyethylene to conditions in the presence of catalysts such as titaniumand chromium. It is a white powder or granular product
that is widely used in pipes containers and packaging. It is
corrosion resistant and easy to process.An aromatic hydrocarbon which is a flammable volatile
Refer colorless liquid with a special aromatic odor at roomBenzene to temperature. It is sparingly soluble in water but readilysoluble in organic solvents and can itself be used as an
organic solvent.Liquid Ammonia Refer Colorless liquid with a strong pungent odor. It is easilyto soluble in water corrosive and volatile.A thermoplastic crystalline polymer which is a colorless
solid in appearance. It has excellent wear resistance and
Refer self-lubricating properties and its long-term operatingPOM Polyoxymethylene to temperature is -40~104℃. It has low moisture absorption
and dimensional stability but it is not resistant to strong
acids strong alkalis and ultraviolet light.Synthetic fiber obtained by spinning polyester obtained by
polycondensation of organic dibasic acid and dibasic
Polyester Fiber Refer alcohol. Industrialized mass-produced Polyester Fiber isto made of polyethylene terephthalate and the trade name
in China is polyester. It is the largest variety of synthetic
fibers at present.Also known as polytetramethylene terephthalate it is a
condensation polymer of terephthalic acid and 1
Polybutylene Terephthalate (PBT) Refer 4-butanediol. It can be obtained by polycondensation
PBT to through transesterification or direct esterification.Together PBT and PET are known as thermoplastic
polyesters.12
Biaxially-Oriented Polyethylene Terephthalate (BOPET) has
the characteristics of high strength good rigidity
Biaxially-Oriented Polyethylene Refer transparency high gloss excellent wear resistance folding
Terephthalate (BOPET) BOPET to resistance pinhole resistance and tear resistance etc.;
heat shrinkage is extremely small and has good antistatic
properties.Denier (D) Refer A fiber of 9 000 meters in length weighs 1 gram and isto called 1 Denier (D).Polyester Filament Yarn (PFY) Refer Filament with a length of more than one kilometer theto filament is wound into a ball.PFY for Civil Use Textile Yarn Refer Polyester Filament Yarn (PFY) for apparel or home textiles.to
PFY for Industrial Use Industrial Yarn Refer It is a polyester long fiber with high strength high modulusto and large denier used in industrial fields.Through chemical modification or physical deformation
Refer mainly to improve the wearing performance there areDifferential Fiber to great innovations in technology or performance or newfiber varieties with certain characteristics that are different
from conventional varieties.Polyester pre-oriented yarn full name PRE-ORIENTED
POY Refer
YARN or PARTIALLY ORIENTED YARN is an incompletely
to drawn Polyester Filament Yarn (PFY) obtained byhigh-speed spinning with an orientation degree between
the unoriented yarn and the drawn yarn.Stretched textured yarn also known as polyester stretched
DTY Refer yarn full name DRAW TEXTURED YARN is made of POY asto raw yarn stretched and false twisted and often has a
certain degree of elasticity and shrinkage.Full drawn yarn also known as polyester drawn yarn full
FDY Refer
name FULL DRAWN YARN is a synthetic fiber filament
to further prepared by spinning and drawing process. Thefiber has been fully drawn and can be directly used for
textile processing.13
Chapter 2 Company Profile and Key Financial Indicators
I. Company information
Chinese Name of the Company Hengli Petrochemical Co. Ltd
Abbreviation of Chinese Name 恒力石化
Foreign Name of the Company HENGLI PETROCHEMICAL CO. LTD.Abbreviation of Foreign Name HLSH
Legal representative of the Company Fan Hongwei
II. Contacts and contact information
Secretary to the Board Securities Affairs Representative
Name Li Feng Wang Shan Wang Chunshan
Floor 31 Building B Victoria Plaza No. Floor 31 Building B Victoria Plaza No. 52
Contact 52 Gangxing Road Renmin Road Street Gangxing Road Renmin Road Street
Address Zhongshan District Dalian City Liaoning Zhongshan District Dalian City Liaoning
Province Province
Telephone 0411-39865111 0411-39865111
fax 0411-39901222 0411-39901222
E-mail lifeng@hengli.com wangshan@hengli.comwangchunshan@hengli.com
III. Basic information
OSBL Project-Public Office Building No. 298 Changsong
Company registered address Road Lingang Industrial Zone Changxing Island Dalian
City Liaoning Province
When the Company was established the place of
registration address was: No. 1 Zhoushuizi Square
Ganjingzi District Dalian; On June 8 2009 the place of
Historical changes in the Company's registration was changed to: No. 18 Yinghui Road
registered address Ganjingzi District Dalian; On May 27 2016 the place of
registration was changed to: OSBL Project-Public Office
Building No. 298 Changsong Road Lingang Industrial
Zone Changxing Island Dalian City Liaoning Province
Floor 31 Building B Victoria Plaza No. 52 Gangxing Road
Company office address Renmin Road Street Zhongshan District Dalian City
Liaoning Province
Postal code of the Company's business
address 116001
Company website https://www.hengli.com/invest/hlsh
E-mail hlzq@hengli.com
IV. Information disclosure and location
Media name and website of the Company’s China Securities Journal Shanghai Securities News
annual report disclosure Securities Times Securities Daily
Website of the stock exchange where the
Company discloses the annual report www.sse.com.cn
The place where the Company's annual report
is ready for inspection Office of the Company's board of directors14
V. Company stock profile
Company Stock Profile
Stock category Stock exchange Stock name Stock code Stock abbreviationbefore change
A share Shanghai Stock HengliExchange Petrochemical 600346 Hengli Stock
VI. Other relevant information
Name Zhonghui Certified Public Accountants (SpecialGeneral Partnership)
Accounting firm engaged by theOffice address Room 601 Building A Hualian Times BuildingCompany (Domestic) No. 8 Xinye Road Jianggan District Hangzhou
Name of signing
accountant Chenxiaohua Fang Sai
VII. Key accounting data and financial indicators in the past three years
(I) Key accounting data
Unit: ten-thousand-yuan Currency: RMB
Increase or
decrease in this
Key accounting data 2025 2024 periodcompared with 2023
the same period
last year (%)
Revenue from operations 20098603.55 23627327.65 -14.93 23479067.24
Total profit 942039.23 881978.57 6.81 887323.22
Net profit attributable to
shareholders of listed company 707458.24 704356.82 0.44 690460.39
Net profit attributable to
shareholders of listed company after
deduction of non-recurring gains and 594924.70 520903.24 14.21 599723.27
losses
Net cash flows from operating
activities 3112178.85 2273256.53 36.90 2353579.01
Increase or
decrease at the
end of this
End of 2025 End of 2024 periodcompared with End of 2023
the end of the
previous year
(%)
Net assets attributable to
shareholders of listed company 6677331.36 6339917.72 5.32 5999240.10
Total assets 26225898.95 27308286.99 -3.96 26059902.09
(II) Key financial indicators
Key accounting data 2025 2024 Increase ordecrease in this 202315
period compared
with the same
period last year
(%)
Basic earnings per share
(Yuan/Share) 1.01 1.00 1.00 0.98
Diluted earnings per share
(Yuan/Share) 1.01 1.00 1.00 0.98
Basic earnings per share after
deducting non-recurring gains and 0.85 0.74 14.86 0.85
losses (Yuan/Share)
Weighted average return on equity
(%) 10.85 11.48 -0.63 pts 12.24
Weighted average return on equity
after deducting non-recurring gains 9.12 8.49 +0.63 pts 10.63
and losses (%)
Note of the key accounting data and financial indicators of the Company in the prior three years at the
end of the reporting period
□适用√不适用
VIII. Differences in accounting data under domestic and overseas accounting standards
(I) Differences between net profit and net assets attributable to shareholders of listed company in
financial reports disclosed in accordance with International Accounting Standards and Chinese
accounting standards
□适用√不适用
(II) Differences between Net profit and net assets attributable to shareholders of listed company in
financial reports disclosed in accordance with Overseas Accounting Standards and Chinese
Accounting standards
□适用√不适用
(III) Note on differences in accounting standards between domestic and overseas:
□适用√不适用
IX. Main financial data by quarter in 2025
Unit: ten-thousand-yuan Currency: RMB
First quarter Second
(January-March) quarter
Third quarter Fourth quarter
(April-June) (July-September) (October-December)
Revenue from
operations 5702408.57 4686322.62 5349626.95 4360245.41
Net profit attributable
to shareholders of 205093.54 99916.36 197242.10 205206.24
listed company
Net profit attributable
to shareholders of 123908.73 105734.82 188894.56 176386.5916
listed company after
deducting
non-recurring gains and
losses
Net cash flows from
operating activities 774551.81 1173194.61 65703.37 1098729.06
Explanation of the difference between quarterly data and disclosed periodic report data
□适用√不适用
X. Non-recurring gains and losses items and amounts
√适用□不适用
Unit: Yuan Currency: RMB
Item of non-recurring gains and losses Amount in 2025 Notes (ifapplicable) Amount in 2024 Amount in 2023
Gain or loss on disposal of
non-current assets Including the
write-off portion of the provision for -1504018.08 1912150.11 -4564909.89
asset impairment
Government subsidies included in the
current profit or loss except for
government subsidies that are closely
related to the Company's normal
business operations comply with 1642230152.61 1775850371.26 638569056.98
national policies and regulations and
are continuously enjoyed in
accordance with certain standards or
quantities
Except for the effective hedging
business related to the Company's
normal business operations gains
and losses on fair value changes
arising from non-financial enterprises -267650745.42 279690101.01 431893116.94
holding financial assets and financial
liabilities as well as gains and losses
on disposal of financial assets and
financial liabilities
Fund occupation fees charged to
non-financial enterprises included in
the current profit or loss
Profit or loss of entrusting others to
invest or manage assets
Profit or loss from external entrusted
loans
Provision for impairment arising from
force majeure such as natural
disasters
Reversal of impairment provision for
receivables that have been
individually tested for impairment
The investment cost of the
enterprise's acquisition of17
subsidiaries associates and joint
ventures is less than the return
generated by the fair value of the
investee's identifiable net assets
when the investment is made.Net profit of subsidiaries for the
period from beginning of the year to
date of acquisition by business
combination under common control
Non-monetary assets exchange profit
or loss
Profit or loss of debt restructuring
One-time expenses incurred by
enterprises due to the
discontinuation of related business
activities such as the expenditure for
resettling employees
One-time impact on current profit or
loss due to adjustments in tax
accounting and other laws and
regulations
Share-based payment expenses
recognized in one time due to
cancellation or modification of equity
incentive plans
For cash-settled share-based
payments after the vesting date the
profit or loss arising from the change
in the fair value of employee
compensation payable
Profit or loss arising from changes in
fair value of investment real estate
subsequently measured using the fair
value model
Gains from transactions with unfair
transaction prices
Profit or loss arising from
contingencies unrelated to the
Company's normal business
operations
Income from custody fees obtained
from entrusted operation
Other non-operating income and
expenses other than the above items 116679009.91 270908669.80 -25075119.31
Other profit or loss items that meet
the definition of non-recurring profit 2705080.13 2517138.63 7339987.53
or loss
Less: Income tax impact 367088974.56 496342519.52 140790996.05
Impact amount of minority
shareholders' equity (after tax) 35110.92 42.95
Total 1125335393.67 1834535868.34 907371136.20If the Company recognizes items not listed in the “Explanatory Announcement No. 1 on Information18Disclosure by Companies that Offer Securities to the Public - Non-recurring Gains or Losses” as
non-recurring gains or losses with significant amounts and defines the non-recurring gains or losseslisted in the “Explanatory Announcement No. 1 on Information Disclosure by Companies that OfferSecurities to the Public - Non-recurring Gains or Losses” as recurring gains or losses the reasons should
be explained.□适用√不适用
XI. For companies with equity incentive plans or employee stock ownership plans the net profit
after eliminating the effect of share-based payment may be disclosed as an alternative.□适用√不适用
XII. Items measured at fair value
√适用□不适用
Unit: ten-thousand-yuan Currency: RMB
Changes in the Amount of impact onItem Beginning balance Closing balance period profit for the currentperiod
Debt instruments
investments 5387.88 10582.56 -5194.68 -
Equity instrument
investments 28365.76 7732.43 20633.33 12.50
Derivative financial
assets 29854.63 24523.04 5331.59 -8950.31
Wealth management
products and 110241.89 - 110241.89 68.23
structured deposits
Receivable financing 653484.88 662866.38 -9381.50 -
Derivative financial
liabilities 28223.96 8809.22 19414.74 -
Borrowings of
precious metals 67292.29 41569.50 25722.79 -9089.47
Total 922851.29 756083.13 166768.16 -17959.05
XIII. Others
□适用√不适用19
Chapter 3 Management Discussion and Analysis
I. Business Activities of the Company during the Reporting Period
The Company's principal business encompasses the production R&D and sales of products
spanning the entire chain from “a drop of oil and a lump of coal to all things created”—including
refining coal chemical aromatics olefins basic chemicals fine chemicals and new materials for
various downstream applications. Anchored in the upstream “oil-coal-chemical” integratedmega-chemical platform the Company is deeply positioned in the rigid consumer markets of “clothingfood housing transportation and daily necessities” as well as high-growth new materials sectors
characterized by high technical barriers and high added value. By continuously strengthening its
internal integration advantages cost moat and refined management the Company persistently buildsitself into a value-growth listed enterprise grounded in an “oil-coal-chemical platform +filament-film-plastic new materials” strategy.The Company has established a feedstock conversion system centered on a processing and
coupling capacity of 20 million tonnes per annum of crude oil and 6 million tonnes per annum of raw
coal. The refining segment's main products include high-end chemical products such as 5.2 million t/a
PX 2 million t/a pure benzene 1.8 million t/a fiber-grade ethylene glycol 850000 t/a polypropylene
720000 t/a styrene 600000 t/a sulfur 400000 t/a high-density polyethylene 140000 t/a butadiene
260000 t/a PC 150000 t/a PS and 300000 t/a ABS along with refined oil products such as gasoline
diesel and aviation kerosene. The coal chemical segment's main products include distinctive products
such as 800000 t/a methanol 580000 t/a liquid ammonia 1 million t/a acetic acid 300000 t/a adipic
acid 80000 t/a polyoxymethylene 250000 t/a high-purity hydrogen and high-calorific-value methane
fuel gas. As a key midstream link the Company owns and operates globally leading PTA production
capacity with facilities currently built and in operation reaching 16.6 million t/a making it the most
technologically advanced and cost-competitive PTA producer and supplier in the industry. In the
downstream new materials and polyester segment the Company offers a rich variety of products with
comprehensive specifications positioned in the mid- to high-end market. These primarily include series
of polyester and new chemical material products such as civil polyester filament yarn industrial
polyester filament yarn BOPET PBT and PBS/PBAT which are widely used in large-scale
differentiated and high-value-added industrial manufacturing and consumer sectors including textiles
pharmaceuticals the automotive industry environmental protection and new energy electronics and
electrical photovoltaics and optical equipment.Meanwhile to ensure efficient and stable operations of the industrial park the Company has built
supporting utility facilities with industry-leading energy efficiency. It owns a high-capacity thermal
power plant with a total installed capacity of 920MW supplying approximately 8 billion kWh of
low-cost electricity and roughly 94 million tonnes of various grades of steam annually. It is also
equipped with two 300000-tonne crude oil berths a 6-million-tonne self-owned crude oil tank farm
and comprehensive storage and logistics facilities including various raw material and product berths
and storage tanks significantly reducing production and operating costs.With the full commissioning of the Company's upstream world-class refining and ethylene key
capacities along with scarce chemical raw materials from coal chemical and fine chemical operations
and the continuous consolidation and expansion of its full value chain advantages the Company now
possesses the “mega-chemical” platform support and raw material matching conditions to extend and20
deepen its presence in the mid- to high-end downstream new materials market. Looking ahead the
Company will leverage internal R&D and external industrial collaboration to further extend the
chemical materials value chain actively enter “domestic substitution” and “rigid demand” markets
represented by advanced manufacturing new energy new consumption and new materials and drive
the continuous upgrading of the industrial chain toward high-value segments.Explanation of significant newly-added non-principle business activities of the Company during the
reporting period
□适用√不适用
II. Industry situation during the reporting periodFor details please refer to the relevant content in Section III “Discussion and Analysis of BusinessOperations”.III. Discussion and Analysis of Business Operations
(I) Macroeconomics overview
In 2025 the final year of the 14th Five-Year Plan period China's development journey was truly
extraordinary. Confronted with an increasingly complex and severe international
environment—marked by intensifying major-country rivalries recurring regional conflicts rising trade
protectionism and a profound restructuring of the global economic and trade order—the world
economy faced sluggish recovery and generally insufficient growth momentum. Against this backdrop
China steadfastly adhered to the general principle of pursuing progress while maintaining stability
unswervingly advanced high-quality development accelerated the transition from old to new growth
drivers deepened reform and opening-up and implemented proactive and robust macro policies. The
national economy pressed forward under pressure and advanced toward the new achieving effective
qualitative improvement and reasonable quantitative growth fully demonstrating strong resilience and
development vitality. China's annual GDP surpassed 140 trillion yuan for the first time recording a
year-on-year growth of 5.0% ranking among the fastest-growing major economies and contributing
approximately 30% to global economic growth continuing to serve as the primary engine of global
growth and a stabilizer of supply chains.
2026 marks the opening year of the 15th Five-Year Plan period as China's development stands at
a new historical starting point. Although the external environment is exerting deeper influence and
domestic development faces numerous challenges China's economic foundation is solid its strengths
are pronounced its resilience is strong and its potential is deep-seated. The fundamentals
underpinning long-term improvement remain unchanged. A comprehensive assessment shows that
opportunities outweigh challenges and favorable conditions exceed adverse factors. In 2026 China's
economy enjoys solid support and favorable conditions for sustaining stable and sound growth.(II) Industry overview
In 2025 China's petrochemical industry continued to forge ahead amid multiple challenges:
intensifying international geopolitical rivalries profound transformation of the global energy landscape
and structural divergence in downstream demand combined to create an overall complex and severe
operating environment. In the first half of the year structural overcapacity contradictions were
prominent “involution-style” competition became white-hot and the price center for certain products
fluctuated downward markedly squeezing corporate profit margins. In the second half of the year as
the guiding effects of national industrial policies continued to materialize the industry's
supply-demand structure was gradually optimized capacity consolidation accelerated and the scale
and technological advantages of leading enterprises became further pronounced deepening the
pattern of industry divergence.As the global industrial landscape undergoes reshaping and the effects of domestic
“involution-style” competition governance are progressively realized the petrochemical industry has
entered a new phase where opportunities outweigh challenges overall. The market has gradually21
emerged from the earlier “bottom-dwelling” phase showing a “bottoming-out and recovery” trend
and is now embarking on a new cycle of prosperity.(III) Analysis of the aromatics-PTA-polyester industry chain
1. Cost factors: crude oil prices bottomed out and rebounded while thermal coal prices
remained stable throughout the year.As the core source of the aromatics-PTA-polyester industry chain crude oil price fluctuations
directly determine the upstream cost trajectory of the chain. In 2025 crude oil prices generallyexhibited a trend of “fluctuating downward in the first half and bottoming out and rebounding in thesecond half” with the annual average price declining compared with 2024. The average price of Brent
crude oil in 2025 was USD 69.2 per barrel representing a year-on-year decrease of 14.4%.In 2025 the domestic coal market saw supply and demand moving toward balance and thermal
coal prices remained stable throughout the year. The marginal impact on costs in the
aromatics-PTA-polyester industry chain was limited and it did not impose additional volatility pressure
on the cost side of the chain.
2. Demand-side factors: coordinated improvement in both domestic and external demand
across the textile and apparel chain with notable lag in demand transmission.In the domestic demand market sustained consumer stimulus policies in 2025 and the gradual
recovery in consumer confidence led to a moderate recovery in the textile and apparel domestic
demand market serving as the core driver underpinning polyester demand. From January to December
2025 retail sales of clothing footwear hats and textiles by enterprises above the designated size grew
by 3.2% year-on-year with the recovery in end-market consumption laying the foundation for the
demand side of the industry chain.In the export market the gradual recovery of the global economy in 2025 brought marginal
improvements in overseas textile and apparel demand. Coupled with favorable factors such as the
marginal easing of U.S. tariffs and the cancellation of India's BIS certification China's textile industry
foreign trade pressed ahead under pressure demonstrating resilience and vitality. According to
express statistical data from the General Administration of Customs China's total export value of
textiles and apparel reached USD 293.77 billion in 2025 representing a year-on-year decrease of 2.4%.This comprised textile exports of USD 142.58 billion a year-on-year increase of 0.5% and apparel
exports of USD 151.18 billion a year-on-year decrease of 5.0%.Although both domestic and external demand across the textile and apparel chain showed
improvement in 2025 demand transmission remained significantly lagged. The limited absorption22
capacity of end-market textile and apparel enterprises meant that the recovery of upstream raw
material demand fell short of expectations. The restoration on the demand side of the industry chaindisplayed a pattern where “the downstream end trailed raw materials and exports underperformeddomestic demand.”
Data source: Wind
3. Product price trends: pronounced differentiation across segments with fluctuations
influenced by multiple factors
Aromatics products remained the most volatile segment in the industry chain throughout the year.In the first half of the year prices fluctuated sharply due to the dramatic changes in crude oil prices. In
the second half of the year crude oil prices gradually stabilized and the price fluctuation range
narrowed. However prices were still highly elastic due to the interplay of multiple factors including
the concentrated release of new production capacity the operation of existing facilities the impact of
imported goods and changes in downstream demand. Overall prices showed a trend of opening high
and closing low with the price center shifting downward.PTA prices fluctuated downwards throughout the year and industry processing fees remained low.In 2025 PTA industry maintenance increased and companies alleviated supply and demand pressures
by reducing or halting production. In September and October the PTA industry held two rounds of
“anti-involution” discussions with leading companies taking the lead in reducing production sending a
signal of industry self-discipline. However this failed to fundamentally change the loose supply and
demand situation and PTA prices remained low and fluctuated.As a key product connecting upstream raw materials and end-user demand polyester filament
was affected throughout the year by both the cost transmission of PX-PTA and the demand driven by
end-user textile and apparel. In the first half of the year affected by weak end-user demand the
industry's processing fees continued to be under pressure and the price differences between different
varieties such as POY FDY and DTY were significant. In the second half of the year with the gradual
recovery of downstream demand industry self-regulation of production reduction and the decline in
costs the level of processing fees gradually recovered. Among them differentiated and high-end
varieties such as FDY and DTY improved more than ordinary varieties becoming the core support for
corporate profitability. This profoundly reflects the micro-impact of changes in the prosperity of
downstream sub-sectors and order structure on product profitability.
4. Profit distribution along the industry chain: persistent upstream concentration with notable
margin pressure on midstream and downstream segments
Profits along the industry chain continued to concentrate in the upstream aromatics segment
while both the midstream PTA segment and the downstream polyester segment faced significant profit
pressure. Although crude oil prices fluctuated downward overall in 2025 PX prices experienced
relatively narrow volatility. Coupled with a relatively tight supply-demand balance in its own market23
the PX segment became the best-performing segment in terms of profitability along the
aromatics-PTA-polyester industry chain. In the midstream PTA was affected by loose supply-demand
conditions with processing margins lingering at low levels and profit margins being continuously
squeezed. As for the downstream polyester segment although processing margins saw some recovery
in the second half of the year overall profitability did not achieve significant improvement due to
lagging demand transmission with only high-end differentiated varieties serving as the core support
for profitability.(iv) Olefin chemical industry chain: complex dynamics of divergent end-user demand and
structural resilience
In 2025 the polyolefin market exhibited sharply contrasting dynamics—“fire and ice”—under the
dual influence of a deep property market adjustment and the rise of emerging industries. On the
demand side traditional sectors were affected by the profound adjustment in the real estate industry
with demand for basic polyolefin products such as pipes and profiles continuing to decline. Although
infrastructure sector efforts provided some support to demand they could not fully compensate for
the gap created by the property market downturn. Overall demand for basic polyolefins remained
subdued.Emerging sectors became the core growth drivers of demand. Sustained growth in both
production and sales of new energy vehicles drove rising demand for lightweight polyolefin materials.24
In the home appliance sector benefiting from the release of market replacement demand and
improving export conditions consumption of high-performance polyolefin products steadily increased
while the process of import substitution for high-end materials by leading enterprises accelerated.In terms of pricing the trend of polyolefins (PP/PE) was highly correlated with crude oil
experiencing wide fluctuations in the first half and narrow consolidation in the second half. The annual
price center shifted slightly downward compared with 2024. Regarding the competitive landscape
prices for high-end modified polyolefins remained firm with leading enterprises achieving stable
profitability by leveraging their technological and value chain advantages. In the basic-grade segment
however severe product homogenization resulted in significant price competition pressure throughout
the year.(V) Corporate operations overview
As a “new productivity” in the domestic refining and chemical industry the core advantage of
private large-scale refining and chemical industry lies mainly in the cost leadership of super-large
refinery Units and the product management of “oil for oil olefin for olefin and aromatic for aromatic”.Building upon these achievements the Company has established itself as an industry benchmark by
pursuing operational excellence and continuously reinforcing its core competitive advantages through
a cost moat strategy. Key initiatives include sustained cost optimization through internal efficiency
improvements and expense reduction and accelerated endogenous growth via high-value-added
technical upgrades and premium project development. These measures have served as critical drivers
behind Hengli Petrochemical's steady expansion in both operational scale and profitability over the
past year.As the earliest “private large-scale refining and chemical” enterprise in China to put into
production the scale of super-large plants the synergy of integrated layout and the aggregation of
upstream and downstream production capacity have created a synergistic advantage which is the
main support for Hengli Petrochemical's “cost moat”. Hengli Petrochemical was the first in China to
implement the concept of “component refining and molecular refining” selecting international
advanced technical standards adopting world-leading and maturely applied process packages and
using the best professional green environmental protection sewage treatment technology in the world.The equipment selection requirements are significantly higher than the level of refineries in the same
period and the energy and material consumption green environmental protection intrinsic safety
and long-term operation of the plant are effectively guaranteed.From the perspective of integrated production capacity layout the listed company has a unique
“oil coal chemical” deep integration platform in the industry. For the first time in the industry the
four major production capacity clusters of 20 million tonnes of refining 6 million tonnes of coal
chemical 1.5 million tonnes of ethylene and 12 million tonnes of PTA are arranged in the same
industrial park. Various large-scale oil coal and chemical plants are coupled through pipeline
integration in the park to achieve upstream and downstream connectivity significantly optimizing the
redundant transportation storage and cooling processes saving a lot of intermediate operating costs
and logistics transportation costs. At the same time the Company has built the largest domestic
coal-to-hydrogen plant in the park which can supply 250000 tonnes of scarce pure hydrogen raw
materials at low cost every year. It has also built a high-power self-contained power plant with a total
capacity of 920MW which is leading in energy efficiency in the industry. It provides a large amount of
cheap electricity and steam at all levels for refineries. It has self-operated two 300000-ton crude oil
terminals 6 million tonnes of self-contained crude oil tank farms and other various complete raw
material finished product terminals tank farms storage and other public works facilities significantly
reducing various production and operating costs.During the reporting period in the face of a complex and volatile market environment theCompany closely centered on the core imperative of “unconventional thinking unconventionalintensity and unconventional measures” and upheld the work ethos of “putting action first anddelivering solid results” Uniting hearts and minds and concentrating its efforts to overcome key
challenges. With “quality cost and rapid response” as its core competitive strengths the Company
demonstrated strong operational resilience and market adaptability. It consistently adhered to
targeted policy implementation strengthened the coordinated allocation of resources optimized the
production-sales coordination mechanism and flexibly adjusted the feedstock mix plant operations25
and product layout to achieve efficient resource utilization and value maximization. The Company
seized opportunities with precision prioritizing high-margin products and practiced a dynamicadjustment strategy of “producing oil when oil is optimal olefins when olefins are optimal aromaticswhen aromatics are optimal and chemicals when chemicals are optimal” fully unleashing the
synergistic effects among its refining petrochemical chemical and new materials industrial parks to
ensure balanced production and sales and smooth operations. By continuously optimizing the product
mix and enhancing its competitiveness in high-end and differentiated products the Company not only
consolidated its advantageous position in traditional sectors but also created new growth
opportunities in emerging markets.The Company achieved operating revenue of 200.909 billion yuan and net profit attributable to
shareholders of the listed company of 7.075 billion yuan a year-on-year increase of 0.44%. Centering
on its annual work targets the Company advanced all work with high quality and steady progress:
1. Focusing on improving operating quality deeply tapping the potential across the full value
chain and deploying multiple measures to intensify cost reduction and efficiency gains.The Company consistently adheres to the philosophy of lean operations deploying whole-process
refined management to continuously improve energy and material consumption levels thereby
building a sustainable incremental cost-competitive advantage.On the upstream feedstock side the Company implemented targeted policies focused on
controlling key factor costs and deepened its analysis of raw material market trends. By integrating
domestic and international resources combining strategic reserves with opportunistic procurement
and other measures it enhanced procurement efficiency. Concurrently it reasonably managed raw
material inventory scales and flexibly utilized financial instruments to mitigate cost fluctuations
achieving dynamic optimization of procurement costs.On the production side the Company practiced intensive and meticulous cultivation
empowering specialized production with refined management. It strengthened closed-loop
management encompassing routine equipment maintenance and periodic inspections and through
deep mining and systematic evaluation of operating data precisely traced problems to their root
causes and implemented targeted improvements ensuring plant facilities operated continuously
safely stably at full capacity and optimally. Meanwhile it focused on deeply optimizing production
operations and highly efficient resource conversion deriving benefits from operations and facilitating
transformation through optimization thereby consolidating the operational fundamentals. It advanced
technological and process optimization key equipment upgrades and production model innovation
simultaneously improving product quality while continuously reducing per-Unit energy and material
consumption ultimately achieving synergistic optimization and dual enhancement of cost and
efficiency. Hengli Refining and Chemical planned and implemented 114 technical renovation and
optimization projects throughout the year (57 of which were completed) cumulatively achieving cost
reduction and efficiency gains of nearly 1 billion yuan for the full year. Notably a strategic adjustment
of the gas oil Unit's production plan generated annual benefits exceeding 700 million yuan while an
optimization of the overhead stream process for the diesel Unit's fractionation tower requiring an
ultra-low investment of just 19000 yuan achieved annual efficiency gains of over 20 million yuan fully
embodying the lean principle of “small investment large return.”
The downstream new materials segment prioritized optimizing the structure toward
high-value-added products enhancing per-Unit profitability through high-end and differentiated
offerings thereby effectively mitigating the cyclical pressure on commodity products.On the financing side the Company actively expanded diversified financing channels to improve
quality and efficiency continuously optimized its capital structure and focused on reducing the cost of
capital. During the reporting period the Company precisely seized market financing windows and
successfully issued three tranches of scientific and technological innovation bonds with a total
issuance size of 2.6 billion yuan and a minimum coupon rate of 1.79% achieving the Company's most
favorable financing cost level in recent years. Through scientific and well-planned financing
arrangements the Company achieved an optimal balance between financing scale and
cost-effectiveness. Additionally the Company received approval for its application to register and issue
debt financing instruments (DFI) for non-financial enterprises on a unified basis.
2. Multiple breakthroughs in R&D and innovation with product value continually enhanced.26
The Company has always adhered to the strategy of “innovation-driven development.” Leveraging
its specialized R&D platforms and focusing on technological shortcomings and market demands in
differentiated functional materials the Company sustained efforts in cutting-edge technology research
and high-end product development yielding fruitful results in new product R&D across all business
segments. Hengli Chemical Fiber pioneered the one-step spinning “three-in-one” stretch yarn
becoming the only domestic enterprise to independently develop and mass-produce hollow stretch
yarn (Saphire) and the only enterprise to mass-produce stretch yarn that mimics acetate fabric on a
large scale. Industrial yarn and airbag yarn were successfully commissioned completing the Company's
full-category layout for automotive fibers. Kanghui New Materials successfully overcame the
production bottleneck of protective base film for polarizers raising the prime product rate from 30% to
90% and developed high value-added products such as 0.8% low-haze online silicone-coated window
film food-contact-grade PBT resin and specialty modified PBT for capacitors. At Hengli Refining and
Chemical the HDPE polyethylene Unit successfully developed the premium grade ACP7740F2 and
completed the first batch of trial production; the product demonstrated excellent performance and
was highly recognized by overseas customers. The polypropylene Unit successfully produced the
ultra-transparent grade HL-26UC a material with outstanding transparency and processing properties
widely applicable in high-end injection molding further filling a gap in the Company’s portfolio for high
value-added niche markets.The Company's vitality in innovation and R&D continued to surge. As of the end of 2025 a
cumulative total of 2039 domestic and international patents had been granted with over 300 newly
added in 2025 alone underscoring its sustained innovative momentum. The synergistic results ofindustry-academia-research collaboration were also notable; the project “Key Technologies forIndustrialization and Modification Applications of PBS-Based Biodegradable Materials” jointly
undertaken by Kanghui New Materials and Dalian University of Technology won the Second Prize of
the Liaoning Provincial Science and Technology Progress Award in recognition of its technological
breakthroughs and industrial application value.Concurrently further breakthroughs were achieved in market access qualifications. Hengli
Chemical Fiber and Jiangsu Kanghui successfully obtained certification for international automotive
quality management systems receiving a “passport” to enter the global automotive supply chain. This
has laid a solid foundation for expanding into international high-end markets and deepening the
Company's high-end positioning along the industrial chain.
3. Strengthening the bottom line of safety and environmental protection and leading green and
low-carbon development.Rooted in high-standard design and planning construction and operations and detail-oriented
management the Company steadfastly upholds the principles of inherent safety in operations and
green low-carbon management. These principles constitute the lifeline the bottom line of profitability
and a defining feature that drives the listed company's stable efficient and sustainable development.The Company continuously reinforced its safety management system to strengthen the
foundation for long-term development. It persistently improved its safety governance system
characterized by “full participation tiered management and control and closed-loop management”
and strictly implemented the safety production responsibility system forming a complete chain ofresponsibility where “accountability is assumed at every level responsibility is borne by everyindividual and each person fulfills their own duties.” It normalized online and offline safety training
and emergency drills deepened the two-tier safety inspection mechanism at the Company and
workshop levels and enhanced the dual prevention system encompassing risk tiered control and
hidden danger investigation and remediation. By establishing a scientific safety performance appraisal
system and a “one-vote veto” accountability mechanism the Company effectively solidified safety
responsibility into each post and onto each individual preventing and defusing major safety risks at the
source ensuring the long-cycle “continuous safe stable full-capacity and optimal” operation of its
facilities.The Company deepened its green and low-carbon transformation to empower high-qualitydevelopment. It actively practiced the philosophy of “green development circular development andlow-carbon development across the entire value chain” closely tracking industry development trends27
and the pace of technological innovation. Through a series of measures it achieved energy
conservation and sustainable development throughout the entire production process.During the reporting period the Hengli (Changxing Island) Industrial Park centering on its green
and low-carbon development goals established and implemented an integrated energy and carbon
management system. By scientifically setting and cascading energy conservation and carbon reduction
targets and routinely conducting energy consumption and carbon emission verification it ensured the
system operated in a standardized and efficient manner. With process optimization project
transformation and structural adjustment as its core approach it comprehensively advanced refined
energy management and continuously enhanced energy utilization efficiency providing solid support
for the green and low-carbon transformation. Hengli Refining and Chemical implemented a total of
nine energy-saving and carbon-reduction technical renovation projects during the year achieving a
reduction in total energy consumption of 43900 tonnes of standard coal equivalent and a reduction in
total carbon emissions of 85800 tonnes of CO? equivalent with key energy consumption indicators
showing steady improvement. Notably the comprehensive energy consumption for refining aromatics
and ethylene all remained at industry-leading levels. Hengli Petrochemical (Dalian) New Materials
deeply explored the potential for energy-saving technical upgrades in key Units implementing a
targeted series of measures including variable frequency drive retrofits for the maleic anhydride Unit
gas supply optimization and wastewater co-firing as well as optimizing the THF recovery process in
the PTMEG Unit. These measures cumulatively saved approximately 28932400 kWh of electricity per
year reduced steam consumption by 114100 tonnes per year equating to an annual saving of
approximately 16200 tonnes of standard coal and simultaneously reduced emissions by
approximately 55100 tonnes of CO? equivalent per year.While deepening energy-saving technical upgrades on the production side the Company
simultaneously pushed forward with optimizing and upgrading its energy structure expanding green
energy application scenarios across multiple dimensions. The Hengli (Nantong) Industrial Park has
completed a 106.5 MW photovoltaic power generation project generating over 100 million kWh
annually paired with a 60 MW/120 MWh energy storage system to achieve an integrated
“solar-storage-charging” system. Kanghui New Materials has built the largest
self-generation-for-self-consumption photovoltaic power project in Liaoning Province with cumulative
power generation for 2025 reaching over 45 million kWh.Hengli (Nantong) Industrial Park Photovoltaic Power Generation Project and Hengli (Nantong) Industrial Park Energy
Storage Project
The Company has deeply cultivated green development and earned multiple authoritative
recognitions underscoring its status as an industry benchmark. A cumulative total of seven subsidiaries
under the Company have been rated as national-level “Green Factories.” Three enterprises within theHengli (Dalian Changxing Island) Industrial Park have been honored with the national-level “EnergyEfficiency Leader” title for four consecutive years and their water efficiency performance also ranksamong the forefront. Hengli Petrochemical (Huizhou) Co. Ltd. was included on the 2024 list of “EnergyEfficiency Leaders” and “Water Efficiency Leaders” in the petroleum and chemical industry for its
purified terephthalic acid (PTA) product winning the product energy efficiency champion and is the
sole enterprise selected as a “Water Efficiency Leader” in this field. Hengke New Materials as the sole28
representative of the polyester filament yarn sub-sector was named to the MIIT's 2025 list of Energy
Efficiency Leaders in Key Industries. Hengli Refining and Chemical was recognized as an Advanced
Collective at the inaugural China Water Conservation Award the only industrial enterprise in Liaoning
Province to receive this honor.Hengli (Dalian Changxing Island) Industrial Park
4. Deeply empowered by smart manufacturing strengthening the foundation for industrial
advancement.The Company has accelerated the integration of digitalization and intelligent technologies driving
comprehensive improvements in operational efficiency through technology upgrades. Leveraging its
independently developed HENGLINK industrial internet platform Hengli Chemical Fiber has achieved
deep interconnection between equipment and systems integrating ERP MES DCS WMS product
appearance inspection systems and the customized Hengli Cloud Commerce platform. This has built a
service system based on massive data collection aggregation and analysis supporting the full
connectivity elastic supply and efficient allocation of manufacturing resources. As a result it has
established an intelligent and efficient operation model that spans the entire process from planning
and scheduling production control and product inspection to packaging storage and sales services.During the reporting period the Company's smart manufacturing development garnered further
significant accolades: Kanghui Nantong was successfully included in the National 2025 5G Factory
Directory; Hengli Chemical Fiber Hengke New Materials and Deli Chemical Fiber were selected for the
2025 Jiangsu Province Advanced-Level Intelligent Factory list; and Hengli Chemical Fiber was honored
with the title of National Advanced Collective in the Industrial and Information Technology System
issued by the Ministry of Industry and Information Technology and successfully named a National 2025
Excellence-Level Intelligent Factory. These achievements fully demonstrate that the smart
manufacturing level of the Company's polyester fiber segment has ascended to the ranks of national
excellence.29
Texturing intelligent production workshop and industrial yarn intelligent production workshop
5. Strengthening talent team development and stimulating the organization's internal impetus.
The Company has always adhered to the philosophy that “talent is the primary resource” deeply
implementing the strategy of strengthening the enterprise through talent and systematically building a
high-caliber specialized talent pipeline. By strengthening team-building mechanisms the Companycontinuously cultivated and promoted the Hengli spirit of “Unity innovation excellence andaccountability” deeply nurturing a distinctive Hengli corporate culture. This effectively ignited a sense
of ownership and passion for striving among all employees building powerful organizational cohesion
and collective strength.In terms of talent cultivation the Company established a tiered and categorized training system
formed an internal instructor team and developed core course resources. It further advanced
mechanisms such as mentorship programs and cross-departmental job rotation and exchange and
systematically carried out training for professional skill enhancement management capability
advancement and innovative thinking. This achieved a dual enhancement of employees'
comprehensive competence and business capabilities.The Company refined its incentive mechanism oriented toward value contribution optimizing the
compensation distribution and performance appraisal system to drive more precise human resource
allocation and more effective incentives. Concurrently it deepened employee care and development
support continuously improving the working environment for frontline staff and strengthening
occupational health protection. It also opened up dual career development paths encompassing both
management and technical tracks effectively enhancing employees' sense of belonging recognition
and fulfillment thereby injecting solid and enduring soft power into the Company's high-quality
development.IV. Analysis of core competitiveness during the reporting period
√适用□不适用
1. Strategic leadership in entire industry chain development
The Company is the industry leader in implementing the strategy of full industry chain
development for polyester new materials in China. It actively promotes the coordinated and balanced
development of various business segments and vigorously expands high-end capacity in the upstream
and downstream. The Company is committed to building a world-class integrated platform for theentire industry chain from “crude oil-aromatics olefins-PTA ethylene glycol-polyester-civil filamentindustrial filament films plastics.” The Company has established a feedstock conversion system
centered on a processing and coupling capacity of 20 million tonnes per annum of crude oil and 6
million tonnes per annum of raw coal achieving strategic breakthroughs in key capacity segments
including refining coal chemicals aromatics olefins basic chemicals and fine chemicals. The Company
has become the first enterprise in the industry to achieve integrated operation and development of the
entire industry chain from “crude oil-aromatics olefins-PTA ethylene glycol-polyester new materials.”30
With the sequential construction and operation of newly built capacities such as PTA chemical new
materials PBS/PBAT biodegradable new materials the Company continuously upgrades and optimizes
its industrial model consolidates and expands the advantages of each link's production capacity
promotes the quantitative change in business scale and the qualitative change in business structure. It
establishes a strategic leadership advantage in adapting to the high-quality competitive situation of the
industry's full industry chain collaboration production capacity structure quality equipment scale cost
technological process accumulation project start-up speed and the development of listed platforms.
2. Comprehensive operational advantage of scale technology and support
The Company continuously introduces internationally leading production equipment and mature
technology packages digests absorbs and utilizes them and continuously innovates and improves
technology and processes. It has established a high-quality and efficient production capacity structure
and supporting public engineering in the upstream midstream and downstream of the polyester newmaterials industry chain characterized by “large-scale equipment large-scale production capacityintegrated structure advanced technology green and environmental protection and comprehensivesupporting facilities.” Whether it is individual equipment total production capacity or production
processes the Company is at the industry's leading processing scale and technological level. This
ensures the Company's advantages in Unit investment cost material and energy consumption saving
Unit processing cost product delivery cycle product quality and diversification. Moreover the
Company has the most comprehensive supporting capabilities in the industry including power supply
energy ports terminals tank farms storage and transportation. It stands out in terms of
comprehensive cost savings service quality performance and operational efficiency improvement. The
complementary relationships among refining petrochemicals and coal chemicals in the industrial park
form an efficient synergy of operations and costs. The refining business has the largest
coal-to-hydrogen Unit in the country producing low-cost coal chemicals such as pure hydrogen
methanol acetic acid and synthesis gas. In addition the advantages of raw material and product
storage and transportation systems greatly enhance the operational flexibility and comprehensive cost
advantages of projects.
3. Market competitive advantage driven by high-end research and development
The Company follows a development path that emphasizes market differentiation high-end
technology and large-scale facilities while integrating business operations. It has a long-term
accumulated market-technology innovation mechanism and has established an international R&D team
and a high-level scientific research platform. Its technological research and development strength and
innovation capability in new products are leading in the industry. The Company can quickly respond to
the latest market consumption demand changes and has a stable reserve of mid-to-high-end customer
resources. The four main operating entities of the Company Hengli Fibre Deli Fibre Hengke New
Materials and Kanghui New Materials are all national high-tech enterprises. Through fine
management of the production process and continuous improvement of technology and processes the
Company has independently developed and accumulated a series of differentiated and functional
products holds numerous production patents for various products and has gained wide market
recognition. The Company's products are superior to competitors in terms of quality and stability. The
Company has absolute technological advantages and process accumulation in functional films and civil
polyester filament forming a competitive moat that is difficult to replicate in the industry in the short
term.31
4. Efficient management advantage of intelligence and lean manufacturingThe Company strives to promote the deep integration of “Internet big data artificial intelligenceand the real economy” and develop advanced manufacturing capacity to regenerate internal growth
momentum. It regards “intelligent interconnection” as an important entry point for industrialupgrading and transformation. By gradually implementing methods such as “machine replacinghuman” “automatic equipment change” “complete set replacement of single machine” and
“intelligence replacing digitization” the Company transforms its development model from relying on
“population dividends” to “technology dividends”. Through the integration and application of
intelligent manufacturing the Internet and the Internet of Things the Company continuously
improves the level of intelligent manufacturing throughout the entire process. It seamlessly integrates
key links such as control research and development manufacturing business management and
finance through self-developed product testing systems automatic barcode systems intelligent
warehousing systems and sales systems and interfaces with ERP systems to achieve product
traceability and full-process control. This promotes the Company's transformation from
“manufacturing” to “intelligent manufacturing” and from single business management to highly
synergistic operation of the industrial chain. The Company continuously enhances refined management
and cost control capabilities adhering to meticulous daily operation management and implementing
cost optimization imperceptibly through internal potential tapping and cost reduction/efficiency
improvement initiatives. In terms of sales model the Company maintains an integratedproduction-trade approach characterized by “sales-frontloaded positioning sales-led production andproduction-driven sales”. By implementing market-oriented sales mechanisms and performance-based
sales team incentives this interconnected production-sales mechanism maximizes sales profits while
ensuring real-time information synergy across production distribution and demand sectors. This
enables the Company to capture market opportunities maintain low-to-zero inventory operations and
ensure rapid market response capabilities. Through “high-quality products and efficient services” the
Company has built an impregnable and unassailable moat for its production-sales system continuously
heightening customer trust and loyalty. To date the Company has accumulated over 20000 long-term
downstream clients.
5. Accumulated talent management advantage
The Company has formed a multidisciplinary and multi-professional scientific research team
including disciplines such as refining petrochemicals polymer materials chemical fiber engineering
textile engineering electrical engineering etc. Its scientific research and development capabilities are
ahead of domestic peers. While introducing external talents the Company attaches great importance
to the cultivation of internal talents and provides a good career development path for employees. The
Company has also established a sound internal training system covering research and development
production sales management and other aspects and has cultivated a large number of backbone
personnel.V. Main operating information during the reporting period
As of the end of 2025 the Company's total assets were 262.259 billion yuan a year-on-year
decrease of 3.96% and the net assets attributable to shareholders of listed companies were 66.773
billion yuan a year-on-year increase of 5.32%.32
In 2025 the Company achieved operating revenue of 200.986 billion yuan a year-on-year
decrease of 14.93%; and net profit attributable to shareholders of listed companies of 7.075 billion
yuan a year-on-year increase of 0.44%.(I) Analysis of Primary Operations
1. Analysis of changes in items related to income statement and cash flow statement
Unit: ten-thousand-yuan Currency: RMB
Item Amount in the reporting Amount in the sameperiod period of last year Variance (%)
Revenue from operations 20098603.55 23627327.65 -14.93
Cost of sales 17456846.73 21298333.19 -18.04
Selling expenses 29107.33 32643.15 -10.83
Administrative expenses 249626.62 220467.53 13.23
Financial expense 438339.20 523363.41 -16.25
Research and development
expenses 162569.49 170288.42 -4.53
Net cash flows from operating
activities 3112178.85 2273256.53 36.9
Net cash flows from investing
activities -914943.53 -2090226.50 Not applicable
Net cash flows from financing
activities -2332273.02 781728.10 -398.35
Reasons for the change in net cash flows from operating activities: this was mainly attributable to the
decline in cash operating costs outpacing the decline on the revenue side combined with a substantial
increase in customer reserve funds received in the futures brokerage business during the period.Reasons for the change in net cash flows from financing activities: this was mainly attributable to an
increase in cash paid for the repayment of bank borrowings.Detailed description of major changes in the Company's business type profit composition or profit
source in the current period
□适用√不适用
2. Revenue and cost analysis
√适用□不适用
None
(1). Segmentation of main business by sector product region and sales model
Unit: ten-thousand-yuan Currency: RMB
Segmentation of main operations by sector
Year-on-year Year-on-yearYear-on-year
By sector Revenue from Gross change of change ofoperations Cost of sales margin (%) change ofrevenue (%) cost of sales gross margin(%) (%)
Petrochemical
industry 19148269.02 16605907.91 13.28 -12.18 -15.11 +3.01 pts
Other
industries 718704.87 656298.69 8.68 -55.28 -58.62 +7.39 pts
Segmentation of main operations by product
By product Revenue from Cost of sales Gross Year-on-year Year-on-yearYear-on-year33
operations margin (%) change of change of change of
revenue (%) cost of sales gross margin
(%)(%)
Refining
products 9428140.44 7456303.09 20.91 -12.81 -20.63 +7.78 pts
PTA 5722556.91 5445953.60 4.83 -16.00 -17.25 +1.44 pts
Polyester
products 3997571.67 3703651.22 7.35 -4.29 3.24 -6.76 pts
Others 718704.87 656298.69 8.68 -55.28 -58.62 +7.39 pts
Segmentation of main operations by region
Year-on-year Year-on-yearYear-on-year
By region Revenue from Cost of sales Gross change of change of change ofoperations margin (%) revenue (%) cost of sales gross margin(%) (%)
Domestic 18084387.86 15504002.10 14.27 -11.95 -15.24 +3.33 pts
Overseas 1782586.03 1758204.50 1.37 -37.92 -38.45 +0.85 pts
Description of main business by industry by product by region and by sales model
Revenues costs and gross margins for refined products PTA and polyester products include sale
revenues purchase costs and gross margins.
(2). Production and sales volume analysis table
√适用□不适用
Production
volume Sales volumeincrease/dec Inventory
Production increased or rease level changeMain products Unit volume Sales volume Inventory decreasedcompared to compared to
compared to
the previous the previousthe previous year (%) year (%)
year (%)
Refined 10000
products tonnes 2449.56 1962.58 55.85 -3.92 -1.72 7.67
PTA 10000tonnes 1715.98 1362.20 19.78 1.92 -0.39 8.68
New material10000
products tonnes 662.31 565.75 39.54 1.75 0.28 10.39
Production and sales volume description
1. New material products include polyester new materials engineering plastics functional films and
biodegradable new materials etc.
2. Refining sales volume of chemical products and PTA includes trade volume but excludes internal
company consumption.
(3). Performance of major procurement contracts and major sales contracts
□适用√不适用
(4). Cost analysis
Unit: ten-thousand-yuan Currency: RMB
By sector
Amount in Proport Amount in Proportio
By sector Cost Year-on-year Explanaticomposition the ion in the same n inreporting total period of last total change (%) on34
period costs year costs
of the of the
reportin same
g period
period of last
(%) year (%)
Direct 14992542.9 18009863.6
materials 5 86.85 8 85.16 -16.75
Petrochemica Direct labor 193361.12 1.12 184906.12 0.87 4.57
l industry Power fuel 643274.74 3.73 673977.61 3.19 -4.56
Manufacturin
g expenses 776729.10 4.50 693818.47 3.28 11.95
Direct
materials 398858.50 2.31 1406738.21 6.65 -71.65
Other Direct labor 25974.09 0.15 36313.82 0.17 -28.47
industries Power fuel 138714.55 0.80 53407.94 0.25 159.73
Manufacturin
g expenses 92751.55 0.54 89734.54 0.42 3.36
By product
Proport Proportio
ion in n in
Amount in total Amount in total
By product Cost the
costs the same costs Year-on-year Explanati
composition reporting of the period of last of the change (%) on
period reportin year sameg period
period of last
(%) year (%)
Direct
materials 6579644.46 38.12 8535509.02 40.36 -22.91
Refining Direct labor 71348.22 0.41 68087.12 0.32 4.79
products Power fuel 308494.82 1.79 321124.30 1.52 -3.93
Manufacturin
g expenses 496815.59 2.88 469396.86 2.22 5.84
Direct
materials 5168571.93 29.94 6292343.58 29.75 -17.86
Direct labor 26003.05 0.15 25373.74 0.12 2.48
PTA
Power fuel 118092.36 0.68 145521.79 0.69 -18.85
Manufacturin
g expenses 133286.26 0.77 117764.67 0.56 13.18
Direct
materials 3244326.56 18.79 3182011.08 15.05 1.96
Polyester Direct labor 96009.85 0.56 91445.26 0.43 4.99
products Power fuel 216687.56 1.26 207331.52 0.98 4.51
Manufacturin
g expenses 146627.25 0.85 106656.94 0.50 37.48
Direct
materials 398858.50 2.31 1406738.21 6.65 -71.65
Direct labor 25974.09 0.15 36313.82 0.17 -28.47
Others
Power fuel 138714.55 0.80 53407.94 0.25 159.73
Manufacturin
g expenses 92751.55 0.54 89734.54 0.42 3.3635
Explanation of cost analysis and other situations
None
(5). Changes in consolidation scope due to significant equity changes in subsidiaries during the
reporting period
□适用√不适用
(6). Significant changes or adjustments in business products or services during the reporting period
□适用√不适用
(7). Key sales customers and key suppliers' situations
Customers or suppliers controlled by the same controlling party are consolidated and presented as the
same customer or supplier except for those under the actual control of the same state-owned asset
management institution.Explanation of the following customer and supplier information consolidated and presented on a
same-control basis:
None
A. Overview of key sales customers and key suppliers
√适用□不适用
The sales revenue from the top five customers amounted to 17.90 billion yuan accounting for 8.91 %
of the total annual sales. Among the sales revenue from the top five customers there were no sales
made to related parties representing 0% of the total annual sales.The purchasing amount from the top five suppliers amounted to 50.65 billion yuan accounting for
7.25 % of the total annual procurement. Among the purchasing amount from the top five suppliers
there were no purchases made from related parties representing 0% of the total annual procurement.B. Situations where the sales ratio to a single customer during the reporting period exceeds 50% of
the total there are new customers among the top 5 customers or the Company is heavily dependent
on a small number of customers
□适用√不适用
During the reporting period the proportion of purchases from a single supplier in the Reporting
Period exceeds 50% of the total and there are new suppliers among the top 5 suppliers or heavy
reliance on a small number of suppliers
□适用√不适用
C. During the reporting period the Company’s shares were subject to delisting risk warning or other
risk warnings
Top five sales customers
□适用√不适用
Top five suppliers
□适用√不适用
D. The Company had revenue from trading business during the reporting period
√适用□不适用
Unit: ten-thousand-yuan Currency: RMB
Trading operations Current period Previous period Change in current36
operating revenue operating revenue period operating
revenue compared to
the previous period (%)
Crude oil and chemical
product trade 1542617.09 2432634.73 -36.59
The top five sales customers whose trading business revenue exceeding 10% of operating revenue
□适用√不适用
The top five suppliers whose trading business revenue exceeding 10% of operating revenue
□适用√不适用
Other notes:
None
3. Expenses
□适用√不适用
4. Research and development investment
(1). Table of research and development investment status
√适用□不适用
Unit: hundred-million-yuan Currency: RMB
Expensed research and development
investment in the current period 16.26
Capitalized research and development
investment in the current period
Total R&D investment 16.26
Percentage of research and development
investment to operating revenue (%) 0.81
Percentage of capitalized research and
development investment to total research -
and development investment (%)
(2). Research and development personnel statistic
√适用□不适用
Number of R&D personnel 4348
R&D personnel ratio (%) 11.64
Educational background of R&D personnel
Education Number of people
PhD Candidates 11
Master's degree 139
Bachelor degree and below 4198
Age distribution of R&D personnel
Age Number of people
Under 30 years old (30 excluded) 1695
30-40 years old (30 included 40 excluded) 1851
40-50 years old (40 included 50 excluded) 631
50-60 years old (50 included 60 excluded) 161
60 years and above 1037
(3). Explanation
□适用√不适用
(4). Reasons for the significant changes in the composition of R&D personnel and their impact on
the Company's future development
□适用√不适用
5. Cash flow
□适用√不适用
(II) Explanation of significant changes in profits due to non-core business
□适用√不适用
(III) Analysis of assets and liabilities
√适用□不适用
1. Assets and liabilities status
Unit: ten-thousand-yuan Currency: RMB
Ratio of Ratio of Percentage
closing closing change in
balance balance closing
Closing of Closing balance of balance
Item balance of current of previous previous comparedbetween Explanationcurrent period period period period
to total to total current
assets assets period to
(%) (%) previousperiod (%)
This period saw new
Financial investments of 1.1 billion
assets held 173850.15 0.66 42838.04 0.16 305.83yuan in wealth management
for trading products and 280 million
yuan in fund trust products.Notes The number of commercial
receivable 913.97 0.00 2860.13 0.01 -68.04paper bills received at theend of this period decreased.Decrease in prepaid material
Prepayment 142270.30 0.54 243212.77 0.89 -41.50purchases at the end of the
period
Other Increase in deposit/security
receivables 93905.24 0.36 44129.60 0.16 112.79deposit paid at the end ofthe period
Right of use
assets 9510.45 0.04 43604.88 0.16 -78.19
The current ship charter
contract has terminated.Other Prepayments for long-term
non-current 57809.12 0.22 134870.86 0.49 -57.14asset purchases decreased
assets this period.Trading Losses on unsettled
financial 95516.25 0.36 50378.73 0.18 89.60derivative contracts38
liabilities increased at the end of the
period.The number of invoices
Notes 388952.85 1.48 1144730.63 4.19 -66.02issued for payment of goodsPayable decreased at the end of this
period.Contractual The increase in advance sales
liabilities 1028047.93 3.92 723704.15 2.65 42.05revenue at the end of thisperiod
Taxes The income tax and
payable 203463.29 0.78 102252.25 0.37 98.98consumption tax payable thisperiod increased.Other The deferred output VAT
current 855227.51 3.26 638684.07 2.34 33.90corresponding to advance
liabilities sales receipts increased inthis period.Lease
liabilities 6360.34 0.02 30479.59 0.11 -79.13
The current ship charter
contract has terminated.Long-term
payables 145631.99 0.56 230178.41 0.84 -36.73
This period's repayment of
finance lease payments
The current period's special
Special
reserves 36995.19 0.14 27924.34 0.10 32.48
reserve allocation is less than
its usage and the balance
continues to increase.Other notes:
None
2. Overseas assets status
√适用□不适用
(1). Asset scale
Including: Overseas assets 100.87(Unit: hundred million yuan Currency: RMB) accounting for 3.85%
of total assets.
(2). Explanation of a higher proportion of overseas assets
□适用√不适用
3. Major assets under restriction at the end of the reporting period
√适用□不适用
Unit: ten-thousand-yuan Currency: RMB
Item Book value at year end Reason of restriction
Cash and bank balances 631976.29Pledge to obtain financing credit from financialinstitutions
Cash and bank balances 253.45Security deposits for trading in futures and financialderivatives
Receivables Financing 379455.62Pledge to obtain financing credit from financialinstitutions
Fixed assets 7019175.34Mortgage to obtain financing credit from financialinstitutions
Fixed assets 454857.11Mortgage used to secure sale and leaseback contracts39
Intangible assets 412476.69Mortgage to obtain financing credit from financialinstitutions
Construction in Mortgage to obtain financing credit from financial
progress 1553671.10institutions
total 10451865.60
4. Other notes
□适用√不适用
(IV) Analysis of industry operating information
√适用□不适用
1. Industry Overview
(1). Industry policies and their changes
√适用□不适用
* “Work Plan for Stabilizing Growth in the Petrochemical and Chemical Industry (2025–2026)”
In September 2025 the Ministry of Industry and Information Technology together with six other
departments jointly issued the Work Plan for Stabilizing Growth in the Petrochemical and Chemical
Industry (2025–2026). The Plan sets out the following main objectives: during 2025–2026 the
industry's value-added is to grow at an average annual rate of over 5%; economic returns are to
stabilize and recover; industrial technological innovation capabilities are to be significantly enhanced;
levels of fine chemical extension digital empowerment and inherent safety are to be continuously
raised; synergistic efficiency in pollution reduction and carbon abatement is to be markedly improved;
and chemical parks are to advance from standardized construction toward high-quality development.The Work Plan puts forward the following measures: First strengthen industrial technological
innovation and enhance high-end supply. Focusing on the needs of key industrial chains such as
integrated circuits new energy and medical equipment it supports tackling key products in fields
including electronic chemicals high-end polyolefins high-performance fibers and high-performance
membrane materials. Second expand effective investment and promote transformation and upgrading.It strengthens the planning and layout guidance for major petrochemical and modern coal chemical
projects strictly controls new refining capacity reasonably determines the scale and pace of new
ethylene and para-xylene capacity additions and guards against the risk of overcapacity in the
coal-to-methanol industry. In the refining sector the requirement for capacity reduction replacement
for new refining projects is to be strictly enforced with key support directed toward the retrofitting of
old petrochemical plants the industrialization demonstration of new technologies and “oil-to-chemical”
projects at existing refining and chemical enterprises. It calls for implementing safety-related retrofits
accelerating digital and green transformation launching an “AI + Petrochemical and Chemical” initiative
accelerating the construction of high-quality industry datasets and supporting enterprises in
strengthening the intelligent retrofitting and adaptation of key equipment. It also supports enterprises
in intensifying efforts to conserve energy and water and reduce pollution and carbon emissions and in
carrying out upgrades to key energy- and water-consuming equipment as well as the source reduction
harmless treatment and comprehensive utilization of solid wastes such as phosphogypsum. Third
expand market demand and unlock market potential. It calls for organizing supply-demand
matchmaking events for petrochemical and chemical products promoting the establishment of
long-term and stable cooperative relationships between producers of synthetic resins coatings tires
etc. and downstream users in the construction automotive and shipbuilding sectors thereby
improving supply-demand compatibility in traditional fields. It also actively expands applications of new
energy battery materials carbon fiber and its composite materials and specialty engineering plastics in
emerging sectors such as new energy the low-altitude economy and humanoid robotics.* “Implementation Plan for the Innovative Development of the Fine Chemical Industry
(2024-2027)”40
In July 2024 the Ministry of Industry and Information Technology the National Development and
Reform Commission the Ministry of Finance and six other departments jointly issued the
Implementation Plan for the Innovative Development of the Fine Chemical Industry (2024–2027). The
Plan points out that centering on the needs of new energy new materials biotechnology industrial
machine tools and medical equipment collaborative innovation should be carried out through
mechanisms such as “open competition for the best candidates” and “horse-racing mechanisms” to
enhance the supply capacity of key products in fields including high-end polyolefins synthetic resins
and engineering plastics polyurethanes high-performance fibers and high-performance membrane
materials.* “Action Plan for 2024-2025 Energy Conservation and Carbon Reduction”In May 2024 the State Council issued the “Action Plan for 2024-2025 Energy Conservation andCarbon Reduction” which specifies key tasks for the petrochemical and chemical industries: First it
strengthens binding requirements for petrochemical industry planning and layout strictly controlling
new production capacity in refining calcium carbide ammonium phosphate yellow phosphorus and
other sectors. New and expanded petrochemical projects must meet energy efficiency benchmark
levels and Grade A environmental performance standards with capacity replacements requiring timely
shutdowns and dismantling of main production facilities as mandated. It mandates complete phase-out
of atmospheric and vacuum distillation Units with capacity below 2 million tonnes/year aiming to cap
national primary crude oil processing capacity within 1 billion tonnes by end-2025. Second it
accelerates energy-saving and carbon reduction upgrades in the petrochemical industry through
energy system optimization enhanced recovery of high/low-pressure steam vent gas waste heat and
pressure and promotion of energy-efficient equipment like large high-efficiency compressors and
advanced gasifiers. By end-2025 over 30% of refining ethylene synthetic ammonia and calcium
carbide capacity must reach benchmark energy efficiency levels while sub-baseline capacity must
complete technical upgrades or exit. Third it promotes petrochemical process reengineering by
accelerating adoption of advanced technologies like next-generation ion-membrane electrolyzers
vigorously developing renewable energy alternatives encouraging R&D of renewable hydrogen
production technologies supporting green hydrogen refining projects to gradually reduce coal-based
hydrogen usage systematically replacing steam drives with electric drives and exploring nuclear
energy applications for steam/heat supply in major petrochemical parks.* “Action Plan for Energy Conservation and Carbon Reduction Driven by Strict Energy EfficiencyConstraints in the Petrochemical and Chemical Industry (2021-2025 years)”
In October 2021 the National Development and Reform Commission the Ministry of Industry andInformation Technology and other departments jointly issued the “Opinions on Strict Energy EfficiencyConstraints to Promote Energy Conservation and Carbon Reduction in Key Sectors” and the “ActionPlan for Energy Conservation and Carbon Reduction Driven by Strict Energy Efficiency Constraints in thePetrochemical and Chemical Industry (2021-2025 years)”. The plan aims to promote green and
low-carbon transformation in the refining ethylene and synthetic ammonia industries and ensure the
timely achievement of carbon peak targets.The “Action Plan” clearly puts forward the action goals of achieving a capacity ratio exceeding 30%
at benchmark levels for the refining ethylene synthetic ammonia and calcium carbide industries by
2025 through the implementation of energy conservation and carbon reduction measures. It aims to
significantly improve the overall energy efficiency level reduce carbon emissions intensity and
significantly enhance the capabilities for green and low-carbon development. Key tasks outlined in the
plan include formulating a general implementation plan for technological transformation in key
petrochemical industries guiding the orderly phasing out of inefficient production capacity promoting
energy-saving and low-carbon technologies and equipment and driving collaborative and clustered
development in the industry. This includes selecting advanced and applicable energy-saving
technologies for the refining ethylene and synthetic ammonia industries as well as guiding
technological transformation in enterprises with low energy efficiency. The plan also promotes the
elimination of refining Units with a capacity of 2 million tonnes/year and below ethylene Units with a
capacity of 300 000 tonnes/year and below and imposes strict restrictions on the construction of
certain types of Units with limited capacities. Additionally the plan encourages the promotion of
low-carbon deep processing of heavy and poor-quality residual oil one-step method for ethylene41
production from synthesis gas and crude oil direct cracking to produce ethylene. It emphasizes the
integration of refining and petrochemical industries coal conversion and electricity heating integration
and the development of multiple co-production. The aim is to establish interconnected industrial
chains where enterprises are connected from upstream to downstream with mutual supply and
demand and interconnectivity of production facilities. This will improve the level of comprehensive
resource utilization reduce energy consumption in logistics and transportation and promote the
recognition of chemical industrial parks.
(2). Basic information on the main industrial segment and industrial status of the Company
√适用□不适用
* In the petroleum refining and coal chemical sector
The Company has established a feedstock conversion system centered on a processing and
coupling capacity of 20 million tonnes per annum of crude oil and 6 million tonnes per annum of raw
coal. The refining segment's main annual output includes 5.2 million tonnes of PX 2 million tonnes of
pure benzene 1.8 million tonnes of fiber-grade ethylene glycol 850000 tonnes of polypropylene
720000 tonnes of styrene 600000 tonnes of sulfur 400000 tonnes of high-density polyethylene
140000 tonnes of butadiene 260000 tonnes of PC 150000 tonnes of PS and 300000 tonnes of ABS
as well as refined oil products such as gasoline diesel and aviation kerosene. The coal chemical
segment's main annual output includes 800000 tonnes of methanol 580000 tonnes of liquid
ammonia 1 million tonnes of acetic acid 300000 tonnes of adipic acid 80000 tonnes of
polyoxymethylene 250000 tonnes of high-purity hydrogen and high-calorific-value methane fuel gas
among other distinctive coal chemical products. As small refineries with high production costs and
aging facilities are gradually phased out the concentration of the refining industry and the
competitiveness of large-scale newly built refineries will significantly increase. The Company enjoys
prominent advantages in terms of policy support process technology and industrial synergy
characterized by notably high quality and low cost compared with other refining and chemical
enterprises thus possessing strong market competitiveness.* In the PTA sector
PTA serves as the direct upstream raw material for polyester production and China is the world's
largest producer and consumer of PTA. The Company currently has built and put into operation a PTA
production capacity of 16.6 million tonnes/year. It has the most advanced technology and the most
significant cost advantages.* In the polyester new materials sector
One of the Company's primary operations is the research production and sales of related
products. The Company offers a diverse range of downstream polyester and advanced chemical
materials with comprehensive product specifications targeting mid-to-high end markets including
civilian polyester filament yarn industrial polyester filament yarn BOPET films PBT engineering
plastics and PBS/PBAT biodegradable materials which are widely used in textile pharmaceutical
automotive renewable energy & environmental protection electronics & electrical photovoltaic and
optical equipment industries for large-scale differentiated and high-value-added industrial
manufacturing and consumer applications. As one of China's largest and most technologically advanced
manufacturers of polyester yarns the Company ranks among the top 5 domestic producers of civilian
filament yarn and is the global leader in industrial filament yarn production capacity.The subsidiary company Kanghui New Material focuses on creating world-leading high-end
differentiated green and environmentally friendly functional film materials high-performance
engineering plastics and biodegradable materials. In terms of functional film materials Kanghui New
Material has broken through foreign technical barriers in the fields of high-end MLCC release base film
polarizer release protection base film OCA release base film environmental protection RPET base film
composite current collector base film lithium battery process protection film photosensitive dry film
base film ultra-thin capacitor film etc. and has continued to solve the “choke point” problem in the
field of new materials. It has the core competitiveness and industrial development strength of the
industry.Kanghui New Material has established itself as China's largest PBT producer with an annual
capacity of 660000 tonnes of high-performance engineering plastics widely used in automotive42
electronics industrial machinery textile optical cable polymer alloy and blending industries. In
biodegradable materials it operates China's largest single-line PBAT production facility (33000
tonnes/year) using proprietary technology supplying raw materials for eco-friendly applications
including PBS/PBAT-based food-grade shopping bags tableware straws and agricultural films. The
Company also possesses 611000 tonnes/year BOPET film production capacity with additional
capacities under construction including 727000 tonnes/year functional polyester films and 1.94 billion
m2/year lithium battery separator films.
2. Products and production
(1). Main business model
√适用□不适用
The Company's main business model involves the procurement of crude oil and related additives
primarily producing PX products and finished oil as well as other chemicals. The PX products are
mainly used as raw materials for the Company's PTA plant with a portion of the PTA products being
used internally by the Company's polyester factory and the rest being sold to downstream customers
in the fiber industry for the production of polyester fibers and other products. Various polyester
products are sold to downstream weaving factories for the production of textiles industrial yarn is sold
to construction and automotive component manufacturers polyester chips are sold to spinning
companies BOPET films are sold to downstream printing packaging and electronics companies and
PBT resins are sold to downstream automotive electronics and machinery companies. The specific
operating modes are as follows:
* Petroleum refining sector
Petroleum products also known as oil products are processed from crude oil through various
refining processes such as atmospheric distillation hydrogenation cracking and reforming. These
processes produce various fuel oils (gasoline kerosene diesel etc.) lubricants coke paraffin wax
asphalt basic organic materials (ethylene propylene butene benzene toluene xylene acetylene
naphthalene) as well as various synthetic organic materials derived from the basic organic materials.* PTA sector
PTA (Purified Terephthalic Acid) is an important bulk organic material widely used in various
sectors of the national economy including chemical fibers light industry electronics and construction.In the domestic market the main downstream products of PTA are polyester fibers which are primarily
used in clothing home textiles and industrial textiles. The main business process involves purchasing
para-xylene (PX) and producing PTA through oxidation reactions crystallization drying hydrogenation
and further crystallization processes followed by selling the product to downstream customers.The profit model in the PTA industry is based on producing and selling PTA products to generate
profits. Since the fixed investment for the products is significant improving profitability relies mainly
on reducing the fixed cost per Unit. Companies achieve this by capitalizing on economies of scale
adopting advanced processing technologies and equipment establishing efficient public infrastructure
enhancing production safety and product quality stability and ultimately lowering production costs to
increase profitability.* Polyester sector
The primary business process involves the procurement of petrochemical products such as PTA
MEG and other additives followed by polymerization reactions using appropriate production
equipment. Subsequently the polyester filaments are produced through spinning and drawing
processes and the products are sold to downstream weaving companies for the production of civil and
industrial textiles.The profit model in the polyester filament industry is based on producing and selling polyester
filaments to generate profits. Due to the significant fixed costs associated with the products improving
profitability depends on three main factors: reducing the fixed cost per Unit increasing the rate of new
product development and adding differentiated products. Companies achieve this by focusing on
increasing the rate of new product development pursuing differentiation in product lines enhancing
product value and ultimately improving overall profitability.* Polyester film sector43
The main business process involves the procurement of petrochemical products such as PTA MEG
and other additives. Unlike the polyester industry the equipment and process routes differ. In the
polyester industry equipment is used to extrude the film into polyester filaments while in the
polyester film industry equipment is used to extrude the film directly. Consequently the downstream
customer base is different.The profit model in the polyester film industry is based on producing and selling polyester films to
generate profits. Due to the significant fixed investment required improving profitability depends
mainly on two factors: reducing the fixed cost per Unit and developing new products. For companies
relying on the cutting-edge equipment technology self-owned synthesis technology and independent
research and development capabilities accumulated in the industry for more than ten years they
overcome various technical difficulties break through foreign technical barriers in the fields of medium
and high-end MLCC release base film polarizer release protection base film OCA release base film
environmental protection RPET base film composite current collector base film lithium battery
process protection film photosensitive dry film base film ultra-thin capacitive film and PBS-based
biodegradable materials and actively extend and expand the medium and high-end material business
in various application scenarios.* Engineering plastics sector
The primary business process involves the procurement of petrochemical products such as PTA
BDO and other additives. The production process includes polymerization extrusion pulverization
and granulation ultimately producing engineering plastics. The products are then sold to downstream
customers.The profit model in the engineering plastics industry is based on producing and selling plastic
pellets to generate profits. Due to the significant fixed investment associated with the products
improving profitability relies mainly on two factors: reducing the fixed cost per Unit and developing
new products. For companies the future primarily involves capitalizing on economies of scale to seize
market share increasing product added value and improving overall profitability.Key changes in business model during the reporting period
□适用√不适用
(2). Main products
√适用□不适用
Product Business sector Primary upstream
Applications of Main factors
raw materials major downstreammaterials affecting prices
Refined oil Petroleum Crude Oil Aviation kerosene Upstream raw
refining gasoline and diesel materials like crude
and other power oil and downstream
fuels demand
PX Chemical raw Crude Oil PTA Upstream raw
materials and materials like crude
chemicals oil and downstream
manufacturing demand
Ethylene Chemical raw Crude Oil Polyethylene Upstream raw
materials and ethylene glycol materials like crude
chemicals oil and downstream
manufacturing demand
PTA Chemical raw PX Polyester fiber Crude oil and PX
materials and bottle grade chips supply and
chemicals film grade chips downstream
manufacturing etc. demand
Polyester Polyester PTA MEG Advertising light Upstream raw
Filament Yarn manufacturing box cloth materials like crude44
(PFY) geotextile conveyor oil and downstream
belt automobile textile prosperity
fiber and tire
meridian clothing
and home textiles
etc.Polyester Polyester PTA MEG Filature Upstream raw
Filament manufacturing materials like crude
oil and downstream
demand
BOPET Plastics product PTA MEG Packaging film Upstream raw
manufacturing insulating film materials like crude
capacitor film etc. oil and downstream
demand
PBT Plastics product PTA BDO Auto parts Upstream raw
manufacturing electronic materials like crude
appliances oil and downstream
aerospace demand
materials etc.PBS/PBAT Plastics product PTA BDO Adipic Packaging Upstream raw
manufacturing acid materials shrink materials like crude
film agricultural oil and downstream
film etc. demand
(3). Research and development innovation
√适用□不适用
As of the end of 2025 the Company held a total of 2039 patents of which 363 were newly
approved during the reporting period.For details please refer to the relevant content in the “03 Value Coexistence CraftsmanshipAchieves Excellence” chapter of the “2025 Sustainable Development Report” disclosed by the Company
on the Shanghai Stock Exchange website (www.sse.com.cn) on April 15 2026.
(4). Production technology and process
√适用□不适用
During the reporting period there were no significant changes in the Company's main products
and their production processes.For specific details regarding the production processes of the Company's main products in the
polyester fiber sector please refer to Section 4 “Discussion and Analysis of Operating Conditions”
subsection “II. (IV) Analysis of Operational Information in the Chemical Industry” and the section
“Production Processes and Flow” (page 33) in the Company's “2016 Annual Report.”
Regarding the production processes of the Company's refining and ethylene engineering as well
as the PBAT project please refer to Section 4 “Discussion and Analysis of Operating Conditions”
subsection “II. (IV) Analysis of Operational Information in the Chemical Industry” and the section
“Production Processes and Flow” (page 34) in the Company's “2020 Annual Report”.
(5). Production capacity and construction work
√适用□不适用
Unit: hundred-million-yuan Currency:RMB
Major
plants/project Designed Capacity
Capacity Investment in Planned
s capacity utilization (%)
under capacity under
construction construction Completion time
Polyester 1800000 10045
Filament Yarn tonnes/year
(PFY) of
Suzhou plant
PFY for civil
use of 2100000
Nantong plant tonnes/year
100
PFY for civil
use of Suqian 200000
plant tonnes/year
100
Polyester film
of Kanghui
New Material 386000
(Yingkou) tonnes/year
100
Industrial Park
Engineering
plastics of
Kanghui New 210000
Material tonnes/year 100
(Yingkou)
Industrial Park
PBS
bio-degradabl
e advanced
materials
project of 33000
Kanghui New tonnes/year
100
Material
(Yingkou)
Industrial Park
PTA of Dalian 11600000
plant tonnes/year 100
Refining and
chemical 20000000
project of tonnes/year 107.7
Dalian plant
Ethylene
project of 1500000 106
Dalian plant tonnes/year
Thress lines
PBS have been
biodegradable converted to
plastics in / / 450000 28.62 fixed assets and
Kanghui tonnes/year the remaining
Dalian plant three lines aregradually put
into production
One line has
Lithium been converted
battery 440 million to fixed assets
separator in / / square 11.40 and the
Kanghui meters/year remaining three
Yingkou Plant lines are
gradually put46
into production
PTA of 5000000
Huizhou Plant tonnes/year 100
Hengli
Petrochemical
Chemical New 300000
Material tonnes/yearof adipic 100Supporting
Chemical acid
Project
Bisphenol A
Annual output isopropanol Partial projects
of 1.6 million ethylene have been
tonnes of oxide transferred to
high-performa / / electronic 225.69 fixed assets and
nce resin and grade DMC others are
new material (including EC gradually being
projects EMC and transferred to
DEC) ABS etc. fixed assets
The first phase
of the project
plans to build
a 470000
tonnes/year
high-end
functional
polyester film
Annual output plant (totaling Seven lines have
of 800 000 12 lines) and been
tonnes of the second transferred into
functional phase includes fixed assets and
films and / / a 100000 51.71 the remaining
functional tonnes/year five lines will be
plastics functional film transferred into
project modification fixed assets inplant a succession
150000
tonnes/year
modified PBT
plant and a
80000
tonnes/year
modified PBAT
plant etc.Annual output The first phase
of 600 000 of the project Artial projects
tonnes of plans to build have been
functional a 500000 transferred to
films and / / tonnes/year 82.55 fixed assets and
functional polyester film others are
plastics production gradually being
functional film line a 100000 transferred to
and 3 billion tonnes/year fixed assets47
square meters polyester film
lithium coating
battery production
separator line a 1.5
project billion square
meters/year
lithium
battery
separator
production
line and a 600
million square
meters/year
coating
production
line
Annual
New Materials production of
Industrial Park 600000
Phase II / / tonnes of BDO 68.49
The project is in
trial production
Project andsupporting
projects
Increase or decrease of production capacity
□适用√不适用
Adjustments to product line and production capacity structure optimization
□适用√不适用
Abnormal shutdown
□适用√不适用
3. Raw material procurement
(1). Basic situation on main raw materials
√适用□不适用
Unit: 10000 tonnes
Major raw Procuremen Year-on-year
materials t model Settlement model price change
Procurement Consumption
ratio (%) quantity quantity
Crude Oil Contract Letter of credit Cablespot transfer -21.41 2203.30 2206.87
PX Contract
Cable transfer Letter
spot of credit Bank -14.20 307.97 1120.38acceptance bills
MEG Contractspot Cable transfer 52.45 178.90
BDO Contractspot Bank acceptance bills -17.57 14.44 20.85
The impact of major procurement price changes on the Company’s operating costs: the procurement
prices of the raw material exerting positive impact on the Company’s operating costs.48
(2). Basic situation of main energy
√适用□不适用
Year-on-
Major Procurement Settlement year Consumption
energy model model price Procurement quantitychange quantity
ratio (%)
Market-orien
Electricity ted Monthlysettlement 5894528800kWh 9989222900kWhprocurement
Thermal Market-orien Monthly
coal ted settlement 11045400 tonnes 11189500 tonnesprocurement
Natural Market-oriented Monthlygas settlement 449399600 cubic meters
440099300 cubic
procurement meters
The price of major energy sources is directly proportional to the Company's operating costs. The prices
of major energies are affected by national policies the supply and demand structure of the regional
markets and the stability of supply.
(3). Risk response measures for raw material price fluctuation
The main situation of holding derivatives and other financial products
□适用√不适用
(4). Basic situation of adopting other methods such as staged reserves
□适用√不适用
4. Product Sales
(1). Basic situation of the Company's main operations by segment
√适用□不适用
Unit: ten-thousand-yuan Currency:RMB
Year-o
n-year Year-on- Year-o
change year n-year Gross
Business Revenue from Gross s in changes change margins
segment operations Cost of sales margin(%) operati
in s in among
ng operatin gross the
revenu g cost margin peers
e (%) (%) (%)
Petroche
mical 19148269.02 16605907.91 13.28 -12.18 -15.11 3.01 /
segment
Other
segments 718704.87 656298.69 8.68 -55.28 -58.62 7.39 /
(2). Basic situation of the Company's main operations by sales channel
□适用√不适用
Notes to accounting policy
□适用√不适用49
5. Environmental protection and safety situation
(1). Basic situation of major production safety accidents during the Company's reporting period
□适用√不适用
(2). Major environmental violations
□适用√不适用
(V) Investment status analysis
General analysis on external equity investment
□适用√不适用
1. Major equity investment
□适用√不适用
2. Major non-equity investments
□适用√不适用
3. Financial assets measured at fair value
□适用√不适用
Securities investment situation
□适用√不适用
Description of securities investment situation
□适用√不适用
Private equity fund investment
□适用√不适用50
Derivatives investment
√适用□不适用
(1). Derivative investments for hedging purposes during the reporting period
√适用□不适用
Unit: ten-thousand-yuan Currency:RMB
Cumulative gains
Initial Gains and losses Percentage of
Derivatives Investment Types investment Beginning on fair value
and losses on fair Purchase during Sales during Ending
value changes the reporting the reporting book book value to
amount book value changes incurrent period recognized in period period value
total net assets at
equity period-end (%)
Commodity derivatives 50488.54 16541.66 18306.26 -2469.73 1011490.61 763830.70 1630.67 0.02
total 50488.54 16541.66 18306.26 -2469.73 1011490.61 763830.70 1630.67 0.02
Accounting policies and principles for
hedging activities during the reportingThe Company accounts for and discloses its futures hedging activities in accordance with CAS 22 (Recognition and
period and explanation of significantMeasurement of Financial Instruments) CAS 24 (Hedge Accounting) and CAS 37 (Presentation of Financial Instruments)
changes compared to the previousalong with their implementing guidelines. During the reporting period the Company's hedge accounting policies and
reporting period specific accounting principles remained unchanged from the previous period.Explanation of actual gains and lossThe reported period's derivative transactions resulted in a net impact of CNY 183.0626 million on the Company's
during the reporting period profit/loss.Description of hedging effect Fluctuations in both crude oil and refined oil prices impact refinery profitability. By hedging physical positions using papercontracts price volatility risk can be controlled to a certain extent.Funding sources for derivatives
investment Own funds
Risk analysis and Control measures forMarket Risk: The Risk Control Department monitors and reports daily through loss limits. When company profits decrease
derivative positions during thesignificantly or losses occur timely measures are taken to prevent further risk escalation. Value at Risk (VaR) is also used as
reporting period (including but nota quantitative indicator of risk exposure. Value at Risk (VaR) refers to the maximum possible loss in the next day.limited to market risk liquidity riskOperational risks: Transaction authorization management (including authorization of varieties quantities terms etc.) that
credit risk operational risk legal riskis whether the operation is carried out in compliance with the authorization scope and whether there are transactions
etc.) that exceed the authorization.Fair value changes of invested
derivatives during the reportingThe most suitable fair value can be analyzed based on the quotes from quoting agencies (such as Platts and Argus) and oil
period and the analysis of derivatives'agents depending on the transaction requirements.51
fair value shall disclose the specific
methods used and the relevant
assumptions and parameter settings:
Litigation Status (if applicable) None
Disclosure date of board approval
announcement for derivative2025/4/17
investments (if any)
Disclosure date of shareholders'
meeting approval announcement for2025/5/9
derivative investments (if any)
(2). Derivatives investments for speculative purposes during the reporting period
□适用√不适用
Other notes:
None
4. Specific progress of major asset reorganization and integration during the reporting period
□适用√不适用
(VI) Sale of major asset and equity
□适用√不适用
(VII) Analysis of major holding and participating companies
√适用□不适用
Information on major subsidiaries and investee companies that have an impact of more than 10% on the Company's net profit
√适用□不适用
Unit: hundred-million-yuan Currency:RMB
Company name Company Type Business nature Registeredcapital Total assets Net assets
Operating
revenue Operating profit Net profit
Hengli Subsidiary Manufacturing 175.96 1526.96 437.00 2185.42 72.33 54.7852
Petrochemical
Refining
Hengli
Petrochemical Subsidiary Manufacturing 58.90 304.97 123.73 709.32 9.07 6.23
(Dalian)
Hengli Chemical
Fiber Subsidiary Manufacturing 22.08 477.75 76.86 306.50 2.33 2.14
Acquisition and disposal of subsidiaries during the reporting period
√适用□不适用
Company Name Acquisition and Disposal of Subsidiaries during the Impact on overall production operations andReporting Period performance
Hengli Petrochemical (Dalian) Chemical Co. Ltd. Absorbed and merged deregistered No major impact
Hengli (Dalian) Construction Engineering Service Co.Ltd. New investment No major impact
Shanghai Hengyao Shenghui Industrial Co. Ltd. New investment No major impact
Other notes
√适用□不适用
Note:Jiangsu Hengli Chemical Fiber Co. Ltd. includes its subsidiaries Jiangsu Hengke New Materials Co. Ltd. Nantong Teng'an Logistics Co. Ltd. Jiangsu
Xuanda Polymer Materials Co. Ltd. Jiangsu Deli Chemical Fiber Co. Ltd. Hengli Futures Co. Ltd. Hengli Hengxin Industry and Trade (Shanghai) Co. Ltd. Suzhou
Susheng Thermal Power Co. Ltd. Suzhou Binglin Trading Co. Ltd. Sichuan Hengli New Materials Co. Ltd. Hengli New Materials (Suqian) Co. Ltd. Suzhou Hengli
Chemical Fiber New Materials Co. Ltd. and Shanghai Hengyao Shenghui Industrial Co. Ltd.Hengli Petrochemical (Dalian) Co. Ltd. includes its subsidiaries Hengli Shipping (Dalian) Co. Ltd. Hengli Petrochemical Co. Limited Shenzhen Ganghui Trading
Co. Ltd. Suzhou Hengli Jiuli Sales Co. Ltd. and Suzhou Hengli Huirun Import & Export Co. Ltd.Hengli Petrochemical (Dalian) Refining & Chemical Co. Ltd. includes its subsidiaries Hengli Petrochemical International Pte. Ltd. Hengli Shipping International
Pte. Ltd. Hengli Energy (Hainan) Co. Ltd. Hengli Oil & Chemical (Hainan) Co. Ltd. Suzhou Hengli Chemical Import & Export Co. Ltd. Suzhou Hengli Energy &
Chemical Import & Export Co. Ltd. Shenzhen Shengang Trading Co. Ltd. Shanghai Jinmintai Trading Co. Ltd. Hengli Refining & Chemical Products Sales (Dalian)
Co. Ltd. Hengli Aviation Fuel Co. Ltd. Hengli Oil & Chemical (Suzhou) Co. Ltd. Hengli Energy (Suzhou) Co. Ltd. Suzhou Hengli Chemical Polymer Co. Ltd.Nantong Hengli Import & Export Co. Ltd. Hengli (Zhoushan) Energy & Chemical Co. Ltd. Hengli Petrochemical (Dalian) New Materials Technology Co. Ltd.Hengli Petrochemical Public Works (Dalian) Co. Ltd. Dalian Hengzhong Special Materials Co. Ltd. Hengli Chemical (Dalian) Co. Ltd. Dalian Northeast Asia
Petrochemical Products Co. Ltd. and Dalian Northeast Asia Energy Co. Ltd.53
(VIII) Structured entities controlled by the Company
√适用□不适用
On December 31 2025 structured entities related to the Company but not included in the scope of the financial statements are mainly engaged in asset
management business operating client assets and providing clients with investment management services for securities futures and other financial products.The total assets of this type of structured entity on December 31 2025 are 380.6717 million yuan.54
VI. Discussions and analysis of the Company’s future development
(I) Industry landscape and trends
√适用□不适用
1. Petrochemical industry
(1) The industry is accelerating its transformation towards green and low-carbon development
promoting the dual-track development of digital and green transformation
Under the “dual carbon” goal the petrochemical industry continues to deepen green
development through clean production technology transformation intensive resource utilization and
circular economy models. The industry is accelerating the demonstration and application of CCUS
technology while exploring innovative paths such as direct conversion of carbon dioxide from
hydrogen production tail gas and catalytic cracking flue gas carbon dioxide dry reforming and carbon
dioxide hydrogenation to produce oil products. These initiatives have significantly reduced the carbon
emission intensity across the entire industrial chain.Accelerate the in-depth integration of new generation information technologies such as 5G big
data and artificial intelligence with the petrochemical and chemical industry; Continuously enhance
the ability to obtain chemical process data; Enrich data in enterprise production management process
control product flow and other aspects; Connect production and operation information data “islands”;
Build analysis models for production and operation market and supply chain; Strengthen integrated
control of the entire process; Boost the adoption rate of digital twin innovation applications; Accelerate
digital transformation; Achieve organizational structure optimization dynamic and accurate services
assist in management decision-making and other management model innovations; Improve intrinsic
safety; And enhance enterprise management capabilities.
(2) The market for high-end chemical new materials is vast
The localization window for high-end chemical materials has opened accelerating the pace of
import substitution. Focusing closely on the demand for chemical materials in strategic emerging
industries such as new energy vehicles next-generation information technology semiconductor
aerospace rail transit energy conservation and environmental protection and big health we will
accelerate the transformation and upgrading of advanced and applicable technologies increase efforts
to extend supplement and strengthen the supply chain and improve the level of product refinement
specialization and serialization. With the development of downstream industries the future market
development space for chemical new materials is vast.
2. PTA industry
my country is the largest producer and consumer of PTA and global production capacity is
concentrated in China. Under the competitive landscape of integrated industrial chain production
capacity is highly concentrated and the head effect is strengthened. Leading enterprises in the PTA
industry have strong market competitiveness in terms of single-Unit scale stable production operation
material consumption energy consumption and product quality. The difference in cost and efficiency
and process iteration promotes energy efficiency leaps and the industry energy efficiency benchmark
continues to move upward accelerating the elimination of backward production capacity in the PTA
industry. In the future the industry concentration will be further improved.China is the largest producer and consumer of PTA with global capacity increasingly concentrated
here. Under the competitive landscape of the integrated industrial chain production capacity is highly
concentrated with a pronounced “winner-takes-all” effect among industry leaders. Leading companies
in the PTA industry demonstrate formidable market competitiveness across multiple dimensions - the
scale of a single set of facility stable production and operation material consumption energy
consumption and product quality. The compounding advantages of cost-efficiency differentials and
production technique iteration have driven quantum leaps in energy efficiency performance
continuously resetting industry benchmarks. This dynamic is accelerating the phase-out of backward
production capacity and will further elevate market concentration in the coming years.
3. Polyester fiber
The chemical fiber industry is the core support for the stable development and continuous
innovation of the textile industry chain an internationally competitive advantage industry an55
important component of the new materials industry and plays an important role in the construction of
a modern industrial system. The chemical fiber industry is accelerating its development towards
high-end intelligent green and branded products:
Improve the added value of conventional fibers enhance the production and application level of
high-performance fibers accelerate the development of bio based chemical fibers and degradable fiber
materials develop high-quality differentiated products and strengthen the development of application
technologies.Strengthen the research and application of intelligent equipment and promote the research and
application of equipment such as large-scale integration low energy intelligent logistics automatic
tube dropping and automatic packaging. Accelerate the research and application of automatic head
forming devices and online quality monitoring systems for polyester texturing equipment and improve
the intelligence level of spinning and winding equipment for polyester spandex and nylon. Promote
the application of emerging digital technologies and enhance the digitalization level of various links in
the industrial chain such as research and development design production and manufacturing
warehousing and logistics. Build an industrial Internet platform integrated with master data real-time
data applications identity resolution management information system and business intelligence
promote upstream and downstream enterprises in the industrial chain to realize resource data sharing
through the industrial Internet platform strengthen supply and demand docking and promote
collaborative development and collaborative application of the whole industry chain.Optimize energy structure strengthen clean production technology transformation and promote
key energy-saving and emission reduction technologies and promote energy-saving and low-carbon
development. Improve the level of recycling promote key technological breakthroughs and industrial
development in the high-value utilization of waste textiles accelerate the optimization of the industrial
structure and enterprise upgrading of recycled chemical fibers.Taking technology as the core and demand oriented increasing the supply of high-quality
products cultivating well-known fiber brands enhancing consumer awareness of Chinese fibers and
corporate brands and promoting the internationalization of Chinese fibers and corporate brands.(II) Development strategy
√适用□不适用
General development strategy: we are committed to providing quality fiber and creating a better
life for the society. Under the principle of “doing the right things at the right time” we adhere to the
development philosophy of “innovation coordination green and sharing” the operation concept of
“winning global markets with surpassing quality persistence and will” and the management ideal of
“people-centered scientific institutionalized and professional” foster a company spirit of “solidarityintegrity steadiness and innovation” increase the industrial innovation capacity improve industrial
structures and drive the Company into high-end intelligent green integrated and international
development.
1. The Company will take solid steps in “improving the upstream and enhancing thedownstream”. In the first place the Company will continue to strengthen the upstream industrial
platform to support the development of “refining+ethylene+coalification” underpinning the “bigchemicals” and implement “making up and enhancing the industrial chains” and “R&D andinnovations” reserving space and paving ways for the new downstream material businesses in the
future. On top of that the Company will redouble its efforts in the downstream businesses consolidate
traditional market strengths benchmark the breakthroughs in major new materials as the
development and upgrading of “new consumption” and “key&core technologies” nurture new leading
material business growth points in scale and make strides toward a world leading petrochemical new
material company that covers the whole industrial chain.
2. The Company will take unswerving steps in adopting integrated development strategy across
the board. The Company will focus on diversifying the specs of the products expanding capacity
differentiating the products through R&D technology and innovation upgrading and strive to realize56the industrial development goal of “industrial growth in bases scale production meticulous productsprofessional technology and sound management”.(III) Operational Plan
√适用□不适用
As the opening year of the 15th Five-Year Plan period 2026 will see the management team tightlyfocus on the guiding principle of “emancipating the mind and setting out anew and taking resolute andpragmatic action to forge new paths”. With a spirit of “daring to venture” a drive to “innovate” and a
style of “getting things done” we will anchor our high-quality development goals coordinate key tasks
including market expansion lean operations and systemic safeguards and rally the collective strength
of all our people to fully achieve the Company's high-quality development and annual business targets.Our key work for the year will center on the following aspects:
1. Anchoring goals and uniting hearts and efforts driving market deployment through dual
wheels
We will closely track our business targets and key performance indicators practice the strategy of
“production based on sales and sales driven by production” and uphold the philosophy of
“customer-centered and market-oriented”. We will carry forward a culture of collaboration and striving
break free from entrenched mindsets and drive the realization of our goals through efficient synergy.In the domestic market we will integrate online and offline channels to expand coverage and brand
influence. In the international market leveraging our full value chain and overseas platform
advantages we will optimize our trading system and profitability.
2. Strengthening the foundation of core competitiveness empowering operational safeguards
through lean practices
Quality cost and rapid response are the fundamental principles for business survival and the
Company will continue to drive the comprehensive upgrade of its operational model. On quality wewill establish a full-value-chain quality control system advancing quality management from “meetingstandards” to “exceeding expectations”. On cost through digital lean management we will eliminate
hidden costs and upgrade from “cost-cutting and expense reduction” to “systematic value creation”.On rapid response we will build an “end-to-end” business visualization system to enhance our ability
to anticipate market fluctuations and respond with agility. Concurrently centering on the operational
goal of keeping facilities in a “continuous safe stable full-capacity and optimal” state we will build a
maintenance system with prevention at its core deeply integrated with standardization and intelligent
technologies and establish a technical collaboration ecosystem to solidify the foundation of our
production operations.
3. Focusing on our core business with deep cultivation advancing the high-end and
differentiated development of the industry
The Company upholds the principles of “adhering to our core business and long-termism” takingrefining petrochemicals and new materials as our core and persistently focusing on “optimizationempowerment and lean operations”. By stimulating organizational innovation vitality breaking
through core process bottlenecks introducing advanced energy-saving measures and strengthening
plant-wide energy synergy we will systematically enhance resource utilization efficiency and overall
operational profitability. The polyester new materials segment will adhere to market orientation and
sales-driven approaches strengthen production-sales linkage and dynamically optimize the product
layout. While systematically upgrading the quality of all product lines and consolidating our position in
high-end markets with premium customers we will continuously drive technological innovation and
product iteration deeply cultivate differentiated niche tracks and intensify energy conservation
consumption reduction and cost control thereby consistently enhancing operational efficiency and
overall competitiveness.
4. Strengthening the six major support systems and reinforcing risk control to safeguard
development
To ensure strategic execution the Company will comprehensively reinforce six core systems:
safety and environmental protection financial and accounting talent development quality
management digital and intelligent transformation and corporate culture. By solidifying full-staff57
safety accountability establishing closed-loop management of capital risks implementing a targeted
talent strategy and nurturing a data-driven culture we will enhance organizational effectiveness in all
aspects. Concurrently we will further strengthen the synergy between legal affairs and internal audit
deepen full-process compliance review and internal control evaluation and fortify our risk defense
lines thereby providing a solid and systemic guarantee for high-quality development.(IV) Potential risks
√适用□不适用
1. Risk of macroeconomic fluctuations
The products involved in the Company's business field are closely related to the national economy
and people's livelihood and there is a high degree of linkage between industry development and the
prosperity of the national economy. The changes in the macro environment of China's national
economy export policies and consumer demand to a certain extent affect industry operating rates
product prices profitability and so on. The Company closely monitors the macroeconomic situation
and market dynamics makes timely predictions adjusts business strategies and minimizes the risks
caused by macroeconomic fluctuations.
2. Risk of raw material price fluctuations
The production and operation of the Company are greatly affected by the price changes of
upstream raw materials especially crude oil and coal. If the Company's inventory and procurement
management as well as downstream product market price adjustments cannot effectively reduce or
digest the impact of raw material price fluctuations it may have adverse effects on the Company's
business production and performance. The Company will continue to monitor market changes in raw
materials conduct dynamic analysis and judgment choose appropriate procurement opportunities
control the fluctuation of raw material procurement prices and effectively control procurement costs;
Strengthen marketing management and reduce the adverse effects of raw material fluctuations on the
Company.
3. Exchange rate risk
If the RMB continues to fluctuate substantially great uncertainties would be posed to the
Company’s exchange gains or losses export product prices denominated in foreign currencies raw
material prices and other operational factors. The Company will leverage forward foreign exchange
contracts and other methods to establish and improve the exchange rate hedging mechanism and
reduce the amount of foreign currency receipts and payments in order to reduce the impact of
exchange rate changes on the Company’s profitability.
4. Environmental and safety risks
Realizing high standards of safety production and environmental protection operation is the
lifeline benefit line and scenic line of enterprises. Environmental protection and safety issues remain
the top priority of enterprise risk management. The Company has always adhered to the policy of
“safety first prevention oriented and comprehensive governance” strengthened essential safety
management fully implemented the main responsibility of enterprise safety deepened safety
standardization and HSE system management and continuously improved the ability of safety
production technology innovation and risk control. Standardize accident emergency management work
establish an emergency management system prevent and reduce the risk of emergencies and improve
the ability to respond to emergencies. With the enhancement of environmental awareness and the
tightening of government environmental protection requirements the Company actively integrates
green and low-carbon production into enterprise development increases environmental investment
and meets the requirements of potentially increasingly strict environmental laws regulations and
rules in the future.(V) Others
□适用√不适用58
VII. Explanation of the circumstances and reasons why the Company did not disclose in accordance
with the guidelines due to special reasons such as non-applicability of the guidelines or state
secrets commercial sec-rets etc.□适用√不适用59
Chapter 4 Corporate Governance Environment and Society
I. Description of corporate governance
√适用□不适用
In strict accordance with the requirements of the Company Law the Securities Law the Code of
Corporate Governance for Listed Companies the Rules Governing the Listing of Stocks on Shanghai
Stock Exchange and other laws regulations and regulatory documents the Company continuously
improved the corporate governance structure established and improved a sound system of internal
management including General Shareholders Meetings and the Board of Directors to regulate its
operations. The Company has formed a corporate governance structure with clear rights and
responsibilities effective checks and balances scientific decision-making and coordinated operations
among organs of authority decision-making organs supervisory organs and the senior management
teams. The structure ensures the effective implementation of the decision-making power of the
general shareholders’ meeting and the Board of Directors as well as efficient and compliant operations
and management of the senior management team. The Company's board of directors has four special
committees for strategy and sustainable development audit nomination and compensation and
evaluation which provide consultation and suggestions for major decisions of the board of directors to
ensure professional and efficient decision-making. The Company continues to pay attention to new
changes in regulatory laws and regulations effectively implements new regulatory policies and
requirements continuously strengthens risk prevention and control solidly promotes internal control
management carries out high-quality information disclosure follows the principles of truthfulness
accuracy completeness timeliness and fairness reduces the scope of insiders and ensures that all
shareholders have fair access to information. Actively carry out investor relations management work
treat all investors fairly with an honest and open attitude. Promote the construction of ESG system
strive to fulfill social responsibilities effectively safeguard the legitimate rights and interests of the
Company and all shareholders and ensure the Company's sustained and stable development.Whether there is any major difference between corporate governance and laws administrative
regulations and the provisions of the China Securities Regulatory Commission on the governance of
listed companies; if there is a major difference the reason should be explained
□适用√不适用
II. The specific measures taken by the Company's controlling shareholders and actual controllers to
ensure the independence of the Company's assets personnel finances institutions and
operations as well as the solutions adopted to address factors affecting the Company's
independence work progress and subsequent work plans.√适用□不适用
The Company operates in strict compliance with the Company Law the Articles of Association
and other applicable laws regulations and normative rules and is independent from its controlling
shareholder and actual controller in terms of assets personnel finance institutions and business. The
Company's directors and senior management are elected and appointed in strict accordance with the
relevant provisions. The Company possesses an independent personnel and remuneration
management system and its senior management hold no positions other than director or supervisor in
the controlling shareholder actual controller or any enterprise controlled by them. The Company's
assets are independent complete and with clearly defined ownership over which it has full ownership
and management rights. The Company has established an independent finance department staffed
with dedicated financial personnel and operates an independent financial accounting system as well as
standardized financial management rules. There are no instances of non-operational occupation of the
Company's funds or assets by the controlling shareholder or any other related party. The establishment
and operation of the Company's shareholders' meeting board of directors and internal institutions all60
remain independent from the controlling shareholder and actual controller. The Company has an
independent and complete business system with the capacity for autonomous operation and
independent decision-making and there are no situations of horizontal competition with the
controlling shareholder actual controller or any other entity under their control.The situation of the controlling shareholders actual controllers and their affiliated entities engaging in
similar or related businesses as the Company as well as the impact of significant changes in industry
competition or competition the measures taken to address them the progress of the solutions and
the subsequent resolution plans
□适用√不适用61
III. Information on directors and senior executives
(I) Changes in shareholding and remuneration of current and resigned directors supervisors and senior executives within the reporting period
√适用□不适用
Unit:share
The total
pre-tax
Number of Number of Increase or remuneration Whether to
Position start shares held at shares held at decrease of Reason for received from get paid atName Position (Note) Sex Age date Position end date the beginning the end of the shares during increase or the Company the
of the year year the year decrease within the Company’sReporting related party
Period (10
000 yuan)
Fan Chairman of the Fem
Hongwei board ale 59 2025-08-21 2028-08-21 791494169 791494169 - / 120 no
Li Director General
Xiaoming Manager Male45 2025-08-21 2028-08-21 5900 5900 - / 125.57 no
Director Deputy
Li Feng GeneralManager andMale47 2025-08-21 2028-08-21 - - - / 132.51 no
Board Secretary
Director and
Liu Dunlei Deputy GeneralMale54 2025-08-21 2028-08-21 - - - / 131.14 no
Manager
Gong Tao Director Male46 2025-08-21 2028-08-21 - - - / 107.57 no
Liu Jun IndependentDirectors Male62 2025-08-21 2028-08-21 - - - / 20 no
Wu Independent
Yongdong Director Male46 2025-08-21 2028-08-21 - - - / 20 no
Xue Independent
Wenliang Director Male47 2025-08-21 2028-08-21 - - - / 20 no62
Liu Deputy General
Qianhan Manager Male49 2025-08-21 2028-08-21 - - - / 116.60 no
Deputy General
Liu Manager and Fem
Xuefen Chief Financial ale 54 2025-08-21 2028-08-21 - - - / 157.66 no
Officer
Zhang Deputy General
Wenyu Manager Male51 2025-08-21 2028-08-21 - - - / 71.82 no
Huang Deputy General
Xudong Manager Male59 2025-08-21 2028-08-21 - - - / 115.79 no
total / / / / / 791500069 791500069 - / 1138.66 /
Note: Any discrepancies between the totals in the table and the sum of the individual items are due to rounding.Name Main work experience
Born in 1967 Chinese nationality no overseas permanent residence college degree. From May 1994 to December 2001 he served as the general
manager of Wujiang Chemical Fiber Weaving Factory Co. Ltd.; from January 2002 he served as the director of Hengli Group Co. Ltd.; from
Fan Hongwei November 2002 to August 2011 he served as the director of Jiangsu Hengli Chemical Fiber Limited; from August 2011 to March 2016 served as thevice chairman and general manager of Jiangsu Hengli Chemical Fiber Co. Ltd.; from March 2016 to August 2023 he has served as the chairman of
Jiangsu Hengli Chemical Fiber Co. Ltd. From March 2016 to December 2022 he served as the chairman and general manager of the Company; since
December 2022 he has served as the chairman of the Company.Born in 1981 Chinese nationality no overseas permanent residence bachelor's degree senior engineer. Served as workshop director assistant
general manager and deputy general manager of Hengli Petrochemical (Dalian) Refining Co. Ltd.; from March 2018 to October 2018 he served as
Li Xiaoming the lubricant workshop director of Hengli Petrochemical (Dalian) Refining Co. Ltd.; from October 2018 to March 2022 he served as the assistantgeneral manager of Hengli Petrochemical (Dalian) Refining Co. Ltd.; from March 2022 to January 2025 he served as the deputy general manager of
Hengli Petrochemical (Dalian) Refining Co. Ltd. Since March 2025 he has served as the general manager of the Company; since January 2025 he has
served as a director of the Company.Born in 1979 Chinese nationality no overseas permanent residence master's degree senior economist member of the third M&A financing
committee of China Association of Listed Companies. Served as project manager office director and deputy general manager of Jiangsu Hengli
Li Feng Chemical Fiber Co. Ltd.; served as deputy general manager and secretary of the board of directors of Jiangsu Hengli Chemical Fiber Co. Ltd. from
August 2011 to March 2016; Since March 2016 he has served as director and deputy general manager of Jiangsu Hengli Chemical Fiber Co. Ltd.;
since March 2016 he has served as director deputy general manager and secretary of the board of directors of the Company.Gong Tao Born in 1980 Chinese nationality no overseas permanent residence master degree. He used to be a technician of Xianglu Petrochemical (Xiamen)Co. Ltd. a monitor of Zhejiang Yisheng Petrochemical Co. Ltd. and an engineer of Hanbang (Jiangyin) Petrochemical Co. Ltd.; from February 201163
to May 2015 years he was the director and manager of Hengli Petrochemical (Dalian) Co. Ltd.; from May 2015 to April 2024 he has been the
deputy general manager of Hengli Petrochemical (Dalian) Co. Ltd; Since April 2024 he has served as executive director and general manager of
Hengli Petrochemical (Dalian) Co. Ltd.. Since March 2018 he has served as a director of the Company.Born in 1972 Chinese nationality no overseas permanent residence bachelor degree. Served as assistant to the general manager and manager of
Qingdao Gaohe Co. Ltd.; successively served as FDY engineer workshop director and manager of Area E of the filament department of Jiangsu
Liu Dunlei Hengli Chemical Fiber Co. Ltd.; Since August 2012 he has served as the general manager of Jiangsu Hengke Advanced Materials Co. Ltd.; since
March 2016 he has served as the Company's deputy general manager; since March 2018 he has served as the Company's director and deputy
general manager.Born in 1964 Chinese nationality no overseas permanent residence Ph.D. He used to be an associate professor professor and vice president of
Liu Jun Nanjing Normal University and served as a member of the party group vice president member of the judicial committee and judge of YangzhouIntermediate People's Court. He is currently a professor at the Law School of Nanjing Normal University. Since April 2022 he has served as an
independent director of the Company.Born in 1980 Chinese nationality no overseas permanent residence bachelor degree Chinese certified public accountant. Served as senior project
manager of Tianjian Certified Public Accountants (Special General Partnership) credit partner of Ruihua Certified Public Accountants (Special
Wu Yongdong General Partnership) Zhejiang Branch Internal audit director and director of Hangzhou Shunwang Technology Co. Ltd. and financial director of
Zhejiang Chuangke Network Co. Ltd. He is currently the financial director of Hangzhou Jierui Air Treatment Equipment Co. Ltd. Since April 2022 he
has served as an independent director of the Company.Born in 1979 Chinese nationality no overseas permanent residence Ph.D. once served as an associate researcher and master tutor at the Textile
Xue Wenliang College of Donghua University and is now a professor and doctoral tutor at the Textile College of Donghua University. Since April 2022 he has
served as an independent director of the Company.Born in 1977 Chinese nationality no overseas permanent residence master degree. Served as business representative deputy sales manager and
Liu Qianhan sales manager of Jiangsu Hengli Chemical Fiber Co. Ltd.; Deputy General Manager of Jiangsu Hengli Chemical Fiber Co. Ltd. from September 2010 to
now; current Deputy General Manager of the Company.Born in 1972 Chinese nationality no overseas permanent residence college degree. Worked as cashier and accountant of Wujiang Silk Sample
Factory; teller loan officer and accounting supervisor of Shengze Branch of China Construction Bank; from April 2004 to April 2012 manager of the
Liu Xuefen audit department of Jiangsu Hengli Chemical Fiber Co. Ltd; Since April 2012 he has served as the financial director of Hengli Petrochemical (Dalian)
Co. Ltd.; from May 2016 to March 2018 he has served as the Company's supervisor; he is currently the Company's deputy general manager and
financial director.Born in 1975 Chinese nationality no overseas permanent residence college degree. He has served as the sales manager of Jiangsu Hengke New
Zhang Wenyu Material Co. Ltd. and the sales director of Jiangsu Hengli Chemical Fiber Co. Ltd. He is currently the deputy general manager of Jiangsu Hengli
Chemical Fiber Co. Ltd. and the deputy general manager of the Company.Born in 1967 Chinese nationality no overseas permanent residence bachelor's degree senior engineer. He served as the deputy director of the
Huang Xudong development planning department and the deputy director of the sales department of Sinopec Hainan Petrochemical Co. Ltd. and also served as
the deputy general manager of Hengli Petrochemical (Dalian) Refining Co. Ltd.; since September 2015 he has served as the deputy general manager64
of Hengli Petrochemical (Dalian) Refining Co. Ltd.; since January 2025 he has served as the deputy general manager of the Company.Other information
√适用□不适用
1. The total pre-tax remuneration received by directors supervisors and senior management during the reporting period only includes their remuneration
during their tenure.
2. On August 5 2025 and August 21 2025 the Company convened the 29th Meeting of the 9th Board of Directors and the Second Extraordinary General
Meeting of 2025 respectively at which the “Proposal on the Election of Non-Independent Director Candidates for the 10th Board of Directors” the “Proposal onthe Election of Independent Director Candidates for the 10th Board of Directors” and the “Proposal on Amendments to the Articles of Association and itsAppendices” were reviewed and approved. At these meetings Fan Hongwei Li Xiaoming Li Feng Liu Dunlei Gong Tao Liu Jun Xue Wenliang and Wu Yongdong
were elected as directors of the Company and it was resolved that a supervisory board would no longer be established.On August 21 2025 the First Meeting of the 10th Board of Directors reviewed and approved relevant proposals appointing Mr. Li Xiaoming as General
Manager of the Company; Mr. Li Feng as Deputy General Manager and Board Secretary; Ms. Liu Xuefen as Deputy General Manager and Chief Financial Officer;
and Mr. Liu Dunlei Mr. Liu Qianhan Mr. Zhang Wenyu and Mr. Huang Xudong as Deputy General Managers.For further details please refer to the announcements published by the Company in the designated information disclosure media on August 6 2025 August
22 2025 and August 23 2025 including the “Announcement of Resolutions of the 29th Meeting of the 9th Board of Directors” (Announcement No. 2025-042)
the “Announcement of Resolutions of the Second Extraordinary General Meeting of 2025” (Announcement No. 2025-051) and the “Announcement of Resolutionsof the First Meeting of the 10th Board of Directors” (Announcement No. 2025-052) among others.65
(II) Positions of current and resigned directors and senior executives during the reporting period
1、 Employment in shareholders' entities
√适用□不适用
Staff name Name of shareholders' Positions held in Start date of the End date of theentity shareholders’ entity term term
Fan Hongwei Hengli Group Co. Ltd. Director January 2014
Fan Hongwei Hailaide InternationalInvestment Ltd. Director January 2014
Fan Hongwei Tak Shing Li InternationalHoldings Ltd. Director January 2014
Fan Hongwei Hengneng Investment(Dalian) Co. Ltd. Executive Director January 2017
Fan Hongwei Hengfeng Investment(Dalian) Co. Ltd. Executive Director January 2017
Fan Hongwei Suzhou Huaer InvestmentCo. Ltd. Supervisor January 2014
Fan Hongwei Suzhou ShenglunInvestment Co. Ltd. Supervisor January 2014
Note to employment
in shareholders'Suzhou Huaer Investment Co. Ltd. and Suzhou Shenglun Investment Co. Ltd. are
entity the secondary shareholders of the Company
2、 Employment status in other entities
√适用□不适用
Name of the person
in charge Other Unit names
Positions held in
other organizations Term start date End date of term
Suzhou Tongli Lake
Fan Hongwei Conference Center Co.Supervisor April 2015
Ltd.Fan Hongwei Wujiang Huayi InvestmentCo. Ltd. Supervisor January 2014
Fan Hongwei Jiangsu Boyada Textile Co.Ltd. Director January 2014 September 2025
Fan Hongwei Suzhou KanglianInvestment Co. Ltd. Supervisor October 2014
Fan Hongwei Suzhou Haolan InvestmentCo. Ltd. Supervisor October 2014
Fan Hongwei Suzhou ChundaoInvestment Co. Ltd. Supervisor October 2014
Fan Hongwei Suzhou Hanci InvestmentCo. Ltd. Supervisor October 2014
Fan Hongwei Suzhou ZhongkunInvestment Co. Ltd. Supervisor October 2014
Fan Hongwei Wujiang Chemical FiberWeaving Factory Co. Ltd. Supervisor January 2014
Fan Hongwei Hengli Import and ExportCo. Ltd. Supervisor January 2014
Fan Hongwei Wujiang Tiancheng RealEstate Co. Ltd. Supervisor January 2014 September 202566
Fan Hongwei Suzhou Kangjia PropertyManagement Co. Ltd. Supervisor January 2014
Fan Hongwei Suzhou Hengli Real EstateCo. Ltd. Supervisor January 2014 September 2025
Suzhou Wujiang Tongli
Fan Hongwei Lake Tourist Resort Co.Director July 2015
Ltd.Fan Hongwei Yingkou HenghanInvestment Co. Ltd. Supervisor January 2014
Fan Hongwei Hengli Investment(Yingkou) Co. Ltd. Supervisor June 2014
Fan Hongwei Yingkou ComfortInvestment Co. Ltd. Supervisor June 2014
Fan Hongwei Yingkou Lishun Real EstateCo. Ltd. Supervisor July 2014
Fan Hongwei Yingkou Lida Real EstateCo. Ltd. Supervisor July 2014
Fan Hongwei Yingkou Ligang Real EstateCo. Ltd. Supervisor July 2014
Fan Hongwei Zidian InternationalInvestment Co. Ltd. Director January 2014
Fan Hongwei Suzhou Hengli IntelligentTechnology Co. Ltd. Supervisor July 2017
Fan Hongwei Sichuan Hengli Real EstateCo. Ltd. Executive Director November 2019
Shanghai Yuanyuan
Fan Hongwei Education Technology Co.Director August 2020
Ltd.Fan Hongwei Nantong Deji Concrete Co.Ltd. Director August 2024
Li Feng Suzhou Yikai StatisticsOffice Co. Ltd Supervisor May 2015
Hangzhou Jierui Air
Wu Yongdong Treatment Equipment Co.Chief FinancialOfficer December 2021Ltd.Explanation of
employment status
in other
organizations
(III) Remuneration of directors and senior management
√适用□不适用
The remuneration plan for directors and senior management is
Decision-making process for theformulated by the Remuneration and Assessment Committee of the
remuneration of directors andBoard of Directors clearly defining the basis for remuneration
senior management determination and its specific composition. The remuneration plan forsenior management is approved by the Board of Directors. The
remuneration plan for directors is decided by the shareholders' meeting.Do directors recuse themselves
when the board discusses theirYes
own compensation
Specific details of theThe Compensation and Assessment Committee assessed the annual67
recommendations made by theperformance of the Company's directors and senior executives by
Remuneration and Assessmentreviewing their key financial indicators and operational targets as well
Committee or the Independentas their individual performance reports. The committee held a meeting
Directors' Special Meetingto review their compensation plans and concluded that the plans were
regarding the remuneration ofreasonable and that the management team's compensation was in line
directors and seniorwith market-based salaries.management.The compensation for directors and senior executives is determined
based on the Company's overall annual operating performance previous
Basis for determining theyears' salary levels and comparisons with the compensation levels of
remuneration of directors andsimilar listed companies and other companies in the same industry. Basic
senior management compensation is determined based on factors such as the main scoperesponsibilities importance and capabilities of the management
position; performance-based compensation is linked to the Company's
annual operating performance and individual performance.Actual payment ofPayments have been made in accordance with the performanceremuneration for directors andevaluation results. For details please refer to “Changes in Shareholdingssenior management and Remuneration of Current and Former Directors and SeniorManagement During the Reporting Period”.Total actual remuneration
received by all directors and
senior management at the end11.3866 million yuan
of the reporting period
The assessment basis and
performance status of theCompleted. The Company has conducted performance appraisals of
actual remuneration received bydirectors and senior management and confirmed their specificall directors and seniorremuneration in accordance with the “Implementation Rules of themanagement at the end of theRemuneration and Assessment Committee of the Board of Directors”
reporting period. and internal performance appraisal standards and procedures.Deferred payment
arrangements for the actual
remuneration received by all
directors and seniornot applicable
management at the end of the
reporting period
Status of Stop Payment and
Recovery of Remuneration
Received by All Directors andnot applicable
Senior Management at the End
of the Reporting Period
(IV) Changes in the Company's directors and senior management
□适用√不适用
(V) Explanation of punishments received by securities regulatory agencies in the past three years
□适用√不适用
(VI) Others
□适用√不适用68
IV. Performance of duties by directors
(I) Participation of Directors in the Board of Directors and General Meetings of Shareholder
Participation
Participation in the board of directors in the generalmeeting of
Whether shareholders
Director's independ
name ent Number of Participati
director board In-person on by Entrusted Number
Whether failedAttendance at
to attend two general
meetings attendan means of attendanc of consecutive meetings of
this year ces communic e absencesation meetings shareholders
Fan
Hongwei No 9 9 3 0 0 No 5
Li
Xiaoming No 7 7 2 0 0 No 4
Li Feng No 9 9 3 0 0 No 5
Liu Dunlei No 9 9 3 0 0 No 5
Gong Tao No 9 9 3 0 0 No 5
Liu Jun Yes 9 9 7 0 0 No 5
Xue
Wenliang Yes 9 9 7 0 0 No 5
Wu
Yongdong Yes 9 9 7 0 0 No 5
Explanation for failing to attend two consecutive board meetings in person
□适用√不适用
Number of board meetings held during the year 9
Including them: number of on-site meetings 1
Number of meetings held via communication
methods 5
Number of meetings held in person combined with
communication methods 3
(II) Situation where directors raise objections to relevant matters of the Company
□适用√不适用
(III) Others
□适用√不适用
V. Special committees under the board of directors
√适用□不适用
(I) Membership of special committees under the Board of Directors
Special committee category Member name
Audit committee Wu Yongdong Liu Jun Gong Tao
Nomination committee Liu Jun Xue Wenliang Liu Dunlei
Remuneration and appraisal
committee Xue Wenliang Wu Yongdong Li Feng69
Strategy committee Fan Hongwei Li Xiaoming Xue Wenliang
(II) During the reporting period the audit committee held 6 meetings
Important Other
Date Conference content comments performand ance of
suggestions duties
The second annual audit communication meeting was
March 25 2025 held to discuss matters such as the preliminary auditopinion that the annual audit accountant intends to None None
issue on the Company's financial statements.The Board reviewed and issued written review
opinions on the following documents: the Company's
2024 Financial Statements the Audit Committee's
Summary Report on the 2024 Audit Work the
April 15 2025 Company's 2024 Internal Control Evaluation Report None None
the Proposal to Re-appoint the Accounting Firm the
2024 Annual Report and its Summary and the Audit
Committee's Report on the Performance of
Supervisory Duties by the Accounting Firm in 2024.Review the Company's Financial Statements for the
April 21 2025 First Quarter of 2025 and the First Quarter Report for None None
2025 and issue written review opinions.Review the “Company's 2025 Interim FinancialAugust 21 2025 Statements” and “2025 Interim Report” and issue None None
written review opinions.Review the Company's Financial Statements for the
October 27 2025 Third Quarter of 2025 and the Third Quarter Report None None
for 2025 and issue written review opinions.December 1 2025 The first annual review communication meeting forthe 2025 annual report was held. None None
(III) During the report period the Nomination Committee held 4 meetings
Important
comments Other
Date Conference content and performance of
suggestion
s dutiesThe meeting reviewed the “Proposal Regarding theJanuary 26 2025 Appointment of the Company's General Manager” andthe “Proposal Regarding the Appointment of the None NoneCompany's Deputy General Managers”.The meeting considered the “Proposal Regarding theMarch 10 2025 Election of Mr. Li Xiaoming as a Non-Independent None NoneDirector of the Company's Ninth Board of Directors”.The meeting reviewed the “Proposal Regarding theElection of Candidates for Non-Independent DirectorsAugust 4 2025 of the Tenth Board of Directors” and the “Proposal None NoneRegarding the Election of Candidates for IndependentDirectors of the Tenth Board of Directors”.August 21 2025 The meeting reviewed and approved the following None None70proposals: “Proposal on Appointing the Company'sGeneral Manager” “Proposal on Appointing theCompany's Board Secretary” and “Proposal onAppointing the Company's Vice General Manager andChief Financial Officer”.(IV) During the report period the Remuneration and Appraisal Committee held 3 meetings
Important
comments Other
Date of convening Meeting Content and perform
suggestion ance of
s dutiesThe meeting considered the “Proposal Regarding theApril 15 2025 Remuneration of the Company's Directors and Senior None NoneManagement for 2024”.The meeting reviewed the “Proposal RegardingApril 30 2025 Adjustments to Relevant Matters of the Company's None NoneSixth Employee Stock Ownership Plan”.Consideration of the “Proposal Regarding theAugust 5 2025 Remuneration Scheme for Directors of the Company's None NoneTenth Board of Directors”
(V) During the report period the Strategy Committee held 3 meetings
Important
comments Other
Date of convening Meeting Content and perform
suggestion ance of
s duties
April 15 2025 Review of the 2024 Sustainable Development Report None None
August 15 2025 Consideration of the “Proposal Regarding the Mergerand Absorption Between Wholly-Owned Subsidiaries” None None
(VI) Specific circumstances of objections
□适用√不适用
VI. Explanation of risks identified by the audit committee
□适用√不适用
The Audit Committee had no objection to the supervisory matters during the reporting period
VII. Employees of the parent company and major subsidiaries at the end of the reporting period
(I) Employees
The number of employees employed by the parent
company 32
The number of employees in the main subsidiary 33938
Total Number of Employees 37368
Number of retired employees whose parent
company and main subsidiaries need to bear the 227
expenses
Professional composition71
Professional composition category Headcount
Production staff 26312
Sales staff 219
Technical staff 7177
Financial officer 234
Administrative staff 1190
Others 2236
Total 37368
Education level
Education level category Headcount
Doctor 11
Master 284
Undergraduate 6415
College and below 30658
Total 37368
(II) Remuneration policy
√适用□不适用
The Company has established a legal standardized and effective salary and job grading system
taking into account the internal and external labor market conditions regional and industry differencesand the value of employee positions. The principles guiding the system are “competitiveness externallyfairness internally and protection of employee development space”. The grading and salary
determination are based on factors such as responsibilities capabilities and performance
contributions. Each subsidiary company refines and implements specific compensation plans
promotion channels and assessment indicators that are suitable for its own development based on its
business scope industry and regional factors.The Company's compensation and benefits primarily include basic salary position-based salary
seniority-based salary piecework wages bonuses overtime pay night shift allowances management
allowances skill allowances etc. The Company also provides social insurance and housing fund
contributions for employees offers free entry medical examinations free work meals holiday
allowances birthday cakes etc. Annual salary increases are determined based on market benchmarks
and the Company's salary range while annual bonuses are distributed based on company performance
and individual achievements. The fair reasonable and competitive compensation system aims to
attract and retain outstanding talents provide employees with a sense of belonging and identity
motivate their sense of responsibility and enthusiasm and promote the mutual enhancement of
company and employee value.(III) Training plan
√适用□不适用For details please refer to the relevant content in the “04 People-Oriented Approach Building aResponsible Future” section of the “2025 Sustainable Development Report” disclosed by the Company
on the Shanghai Stock Exchange website (www.sse.com.cn) on April 15 2026.(IV) Labor outsourcing
√适用□不适用
Total working hours of labor outsourcing 117792
Total amount of remuneration paid for labor 400.88
outsourcing (ten thousand yuan)72
VIII. Profit distribution or capital reserve conversion plan
(I) Formulation implementation or adjustment of cash dividend policy
√适用□不适用
The Company's Articles of Association clearly set forth the relevant policies on profit distribution
stipulating the cash dividend decision-making mechanism specific conditions and proportions
differentiated cash dividend policies and review procedures among others. During the reporting
period the Company strictly implemented the established profit distribution policies which complied
with the provisions of the Articles of Association and relevant laws and regulations. The dividend
standards and proportions were clear and explicit and relevant decision-making procedures were duly
performed. This further strengthened the awareness of rewarding shareholders and safeguarded the
legitimate rights and interests of minority shareholders.(II) Specific notes on cash dividend policy
√适用□不适用
Does it comply with the provisions of the Company's bylaws or requirements
set by the shareholders' meeting resolutions √是 □否
Are the dividend standards and ratios clear and explicit √是 □否
Are the relevant decision-making procedures and mechanisms complete √是 □否
Have the independent directors fulfilled their duties and played their expected
roles √是 □否
Do minority shareholders have sufficient opportunities to express their opinions
and demands and have their legal rights and interests been adequately √是 □否
protected
(III) If the Company has made profits during the reporting period and the parent company has
distributable profits but no proposed cash dividend distribution plan has been put forward the
Company should provide detailed disclosure of the reasons as well as the purpose and
utilization plan of the undistributed profits
□适用√不适用
(IV) Profit distribution and conversion of capital reserve into share capital during the reporting
period
√适用□不适用
Unit yuan Currency:RMB
Bonus shares for every 10 shares (shares) 0
Dividend per 10 shares (yuan) (tax included) 2.9
Number of conversions per 10 shares (shares) 0
Cash dividend amount (tax included) [Note] 2604466920.82
Net profit attributable to ordinary shareholders of
listed companies in the annual consolidated 7074582387.53
statement of dividends
Ratio of cash dividend amount to the net profit
attributable to ordinary shareholders of listed 36.81
companies in the consolidated statements (%)
Repurchase of shares in cash is included in the
amount of cash dividends 073
Total dividend amount (tax included) 2604466920.82
he ratio of the total dividend amount to the net
profit attributable to ordinary shareholders of the 36.81
listed company in the consolidated statement (%)
Note: The Company held its first meeting of the tenth board of directors on August 21 2025 and its
third extraordinary general meeting of shareholders in 2025 on September 9 2025 respectively and
approved the “2025 Interim Profit Distribution Plan” distributing a cash dividend of RMB 0.08 per
share (inclusive of tax) to all shareholders totaling RMB 563127982.88 (inclusive of tax). The 2025
interim cash dividend was distributed on September 24 2025.In summary the total cash dividend amount in the table is RMB 2604466920.82 (inclusive of tax)
including RMB 563127982.88 (inclusive of tax) for the first half of 2025 and RMB 2041338937.94
(inclusive of tax) for the proposed cash dividend this time.(V) Cash dividends in the last three fiscal years
√适用□不适用
Unit: ten-thousand-yuan Currency: RMB
Cumulative cash dividend amount (tax included) in the
last three fiscal years (1) 964356.67
Cumulative repurchase and write-off amount in the last
three fiscal years (2) 0
Cumulative amount of cash dividends and repurchases
and write-offs in the last three fiscal years (3) = (1) + (2) 964356.67
Average net profit in the last three fiscal years (4) 700758.48
Cash dividend payout ratio in the last three fiscal years
(%)(5)=(3)/(4)137.62
Net profit attributable to common shareholders of the
listed company in the most recent fiscal year in the 707458.24
consolidated financial statements
Undistributed profits at the end of the most recent fiscal
year in the parent company's financial statements 669951.08
IX. The status and impact of the Company's equity incentive plan employee stock ownership plan
or other employee incentives
(I) Relevant incentives have been disclosed in temporary announcements and there is no progress
or change in subsequent implementation
√适用□不适用
Event IndexFor details please refer to the “Announcement of HengliAsset management institution of Petrochemical on the Completion of the Addition of the Asset
the sixth employee stock Management Institution for the Sixth Employee Stock Ownershipownership plan has been added Plan” (Announcement No.: 2025-008) disclosed by the Companyon the website of the Shanghai Stock Exchange on February 20
2025.For details please refer to the “Announcement on AdjustingAdjustments to the Company's Relevant Matters of the Company's Sixth Employee Stocksixth employee stock ownership Ownership Plan” (Announcement No.: 2025-032) “Hengliplan Petrochemical Co. Ltd. Sixth Employee Stock Ownership Plan(Draft) (Revised)” and “Hengli Petrochemical Co. Ltd. SixthEmployee Stock Ownership Plan Management Measures74(Revised)” disclosed by the Company on the Shanghai Stock
Exchange website on May 1 2025.The third phase of the employee For details please refer to the “Announcement on the Expirationstock ownership plan has expired and Termination of the Third Employee Stock Ownership Plan”
and terminated (Announcement No.: 2025-039) disclosed by the Company on theShanghai Stock Exchange website on June 28 2025.The lock-up period for the fifth For details please refer to the “Announcement on the Expirationemployee stock ownership plan of the Lock-up Period of the Fifth Employee Stock Ownershiphas expired Plan” (Announcement No.: 2026-006) disclosed by the Companyon the Shanghai Stock Exchange website on March 10 2026.(II) Incentives not disclosed in the temporary announcement or with follow-up progress
Equity incentive situation
□适用√不适用
Other notes:
□适用√不适用
Employee stock ownership plan
□适用√不适用
Other incentive measures
□适用√不适用
(III) Share incentives granted to directors and senior executives during the reporting period
□适用√不适用
(IV) The establishment and implementation of the evaluation mechanism for senior management
personnel and the incentive mechanism during the reporting period
√适用□不适用
The Company has established a Remuneration and Assessment Committee and formulated the
“Implementation Rules for the Board Remuneration and Assessment Committee” to standardize the
procedures for determining executive compensation. The committee develops remuneration plans or
proposals based on the key scope of responsibilities importance of senior management positions
remuneration levels for comparable roles at peer companies. Additionally the committee reviews the
performance of senior management conducts annual performance appraisals. All executive
remuneration proposals put forward by the Remuneration and Assessment Committee are subject to
Board approval. The Company continuously improves its long-term incentive policies based on actual
circumstances aiming to motivate senior management to fulfill their responsibilities diligently and
responsibly.X. Internal control system construction and implementation during the reporting period
√适用□不适用
During the reporting period the Company strictly adhered to various laws and regulations such as
the “Company Law” “Basic Norms for Enterprise Internal Control” “Listing Rules of the Shanghai StockExchange” and “Self-regulatory Guidelines for Listed Companies of the Shanghai Stock Exchange -Standard Operations”. The Company also followed internal control system standards to operate and
manage risks effectively. The Company established a robust internal control management system
taking into account industry characteristics and actual business operations. The internal control system
was continuously optimized and improved to ensure the lawful and compliant operation and75
management of the Company asset security and the accuracy and integrity of financial reporting and
related information. These measures aimed to enhance operational efficiency actual results and
protect the interests of the Company and all shareholders.Explanation on major deficiencies in internal control during the reporting period
□适用√不适用
XI. Management and control of subsidiaries during the reporting period
√适用□不适用
During the reporting period the Company strictly complied with the Company Law and relevant
regulatory requirements continuously improving its modern corporate system and governance
structure. Through the shareholders' meeting and board of directors the Company exercised its
shareholder rights in accordance with the law implementing standardized and effective management
and supervision of its subsidiaries. The Company has established a unified system covering key
operational and management aspects achieving standardized and institutionalized operation and
management. Relevant management systems were simultaneously distributed to all subsidiaries
guiding and requiring them to develop appropriate internal management systems based on their own
operational realities ensuring consistent management standards between the parent company and its
subsidiaries smooth control coordination and standardized and orderly operation.Risk warning regarding abnormal management and control over subsidiaries.□适用√不适用
XII. Relevant information on the internal control audit report
√适用□不适用
According to the “Basic Norms for Enterprise Internal Control” and its supporting guidelines as
well as other internal control regulatory requirements the Company in conjunction with its internal
control system and evaluation methods conducted an assessment of the effectiveness of internal
controls as of the benchmark date for the internal control evaluation report. The Company prepared
the “2025 Annual Internal Control Evaluation Report” in accordance with the format content and
requirements specified by the China Securities Regulatory Commission (CSRC) and the Shanghai Stock
Exchange (SSE).The Company engaged an external auditing firm Zhong Hui Certified Public Accountants LLP
(Special General Partnership) to perform an internal control audit. The audit firm issued a standard
unqualified opinion in the internal control audit report.Whether to disclose the internal control audit report: yes
Type of opinion in internal control audit report: standard unqualified opinion
Whether a non-standard audit opinion on internal control was issued during the reporting period or
the previous year.□是√否
XIII. The rectification of problems in the self-examination of the special action of listed company
governance
During the reporting period there were no significant differences between the Company's
corporate governance status and the relevant regulations of the China Securities Regulatory
Commission (CSRC) regarding the governance of listed companies. The Company will continue to
enhance its corporate governance level and improve its governance framework in accordance with
legal regulations and regulatory requirements. This ongoing effort aims to continuously enhance the
quality of the listed company.76
XIV. Environmental information of listed companies and their major subsidiaries included in the list
of enterprises required to disclose environmental information by law
√适用□不适用
Number of enterprises included in the list
of enterprises legally required to disclose
environmental information (number of 13
enterprises)
Num Company Name Index for searching environmental informationdisclosure reports in accordance with the law
Enterprise Environmental Information Disclosure System
1 Hengli Petrochemical Refining (Liaoning)https://qyxxpl.ywzh.lnsthj.cn:8802/home/companiesrep
ortenterId=682078494236677&publishdataId
Enterprise Environmental Information Disclosure System
2 Hengli Petrochemical (Dalian) (Liaoning)https://qyxxpl.ywzh.lnsthj.cn:8802/home/companiesrep
ortenterId=682078496813061&publishdataId
Enterprise Environmental Information Disclosure System
3 Hengli Petrochemical (Dalian) New (Liaoning)Materials https://qyxxpl.ywzh.lnsthj.cn:8802/home/companiesrep
ortenterId=682078486274053&publishdataId
Enterprise Environmental Information Disclosure System
4 Kanghui New Materials (Liaoning)https://qyxxpl.ywzh.lnsthj.cn:8802/home/companiesrep
ortenterId=683058695503877&publishdataId
Enterprise Environmental Information Disclosure System
5 Kanghui Dalian New Materials (Liaoning)https://qyxxpl.ywzh.lnsthj.cn:8802/home/companiesrep
ortenterId=682078494969861&publishdataId
Jiangsu Enterprises' Environmental Protection Profiles:
http://ywxt.sthjt.jiangsu.gov.cn:18181/spsarchive-weba
6 Hengli Chemical Fiber pp/web/viewRunner.htmlviewId=http://218.94.78.91:1
8181/spsarchive-webapp/web/sps/views/yfpl/views/ho
me/index.js
Jiangsu Enterprises' Environmental Protection Profiles:
http://ywxt.sthjt.jiangsu.gov.cn:18181/spsarchive-weba
7 Hengke New Materials pp/web/viewRunner.htmlviewId=http://218.94.78.91:1
8181/spsarchive-webapp/web/sps/views/yfpl/views/ho
me/index.js
Jiangsu Enterprises' Environmental Protection Profiles:
http://ywxt.sthjt.jiangsu.gov.cn:18181/spsarchive-weba
8 Jiangsu Xuanda pp/web/viewRunner.htmlviewId=http://218.94.78.91:1
8181/spsarchive-webapp/web/sps/views/yfpl/views/ho
me/index.js
Jiangsu Enterprises' Environmental Protection Profiles:
http://ywxt.sthjt.jiangsu.gov.cn:18181/spsarchive-weba
9 Deli Chemical Fiber pp/web/viewRunner.htmlviewId=http://218.94.78.91:1
8181/spsarchive-webapp/web/sps/views/yfpl/views/ho
me/index.js
10 Susheng Thermal Power Jiangsu Enterprises' Environmental Protection Profiles:77
http://ywxt.sthjt.jiangsu.gov.cn:18181/spsarchive-weba
pp/web/viewRunner.htmlviewId=http://218.94.78.91:1
8181/spsarchive-webapp/web/sps/views/yfpl/views/ho
me/index.js
Guangdong Provincial Department of Ecology and
Environment - Enterprise Environmental Information
11 Hengli Petrochemical (Huizhou) Disclosure System
https://www-app.gdeei.cn/gdeepub/front/dal/ent/list/d
etailentId=a82dd6ac-77f4-498c-ab8c-a8a9ab63fac8
Jiangsu Enterprises' Environmental Protection Profiles:
http://ywxt.sthjt.jiangsu.gov.cn:18181/spsarchive-weba
12 Kanghui Nantong New Materials pp/web/viewRunner.htmlviewId=http://218.94.78.91:1
8181/spsarchive-webapp/web/sps/views/yfpl/views/ho
me/index.js
Jiangsu Enterprises' Environmental Protection Profiles:
http://ywxt.sthjt.jiangsu.gov.cn:18181/spsarchive-weba
13 Jiangsu Kanghui pp/web/viewRunner.htmlviewId=http://218.94.78.91:1
8181/spsarchive-webapp/web/sps/views/yfpl/views/ho
me/index.js
Other notes
□适用√不适用
XV. Social responsibility work
(I) Whether to disclose social responsibility report sustainable development report or ESG report
separately
√适用□不适用For details please refer to the “2025 Sustainable Development Report of Hengli Petrochemical Co.Ltd”. disclosed on the Shanghai Stock Exchange website on April 15 2026.(II) Specific details of social responsibility work
√适用□不适用
External donation public External donation External donation public welfare
welfare projects public welfare projects projects
Total investment
(ten-thousand-yuan) 5 Educational Assistance
Including: capital (ten
thousand yuan) 5
Material discount
(ten thousand yuan)
Number of people benefited
(person)
Specific note
□适用√不适用
XVI. Consolidate and expand the achievements of poverty alleviation and rural revitalization
√适用□不适用
Poverty Alleviation and Rural Quantity Details78
Revitalization Projects /Conten
t
Hengli Futures donated 150000 yuan to the Red Cross
Society of Gongshan Dulong and Nu Autonomous
Total investment 34.5 County and 150000 yuan to the Red Cross Society of(ten-thousand-yuan) Fugong County; Jiangsu Kanghui donated 45000 yuan
to impoverished villagers in Meidun Village Fenhu
High-tech Zone.Including: capital (ten
thousand yuan) 34.5
Material discount
(ten thousand yuan)
Number of people benefited
(person)
Forms of assistance (such as
industrial poverty alleviation
employment poverty alleviation
education poverty alleviation
etc.)
Specific note
□适用√不适用
XVII.Others
□适用√不适用79
Chapter 5 Important Events
I. Fulfillment of commitments
(I) Commitments made by the actual controller shareholders related parties acquirers and the
Company itself as well as relevant parties during the reporting period or continuing into the
reporting period
□适用√不适用
(II) The Company's assets or projects have profit forecasts and the reporting period is still in the
period of profit forecasts
□已达到□未达到√不适用
(III) Performance commitment status
□适用√不适用
Changes in performance commitments
□适用√不适用
Other notes
□适用√不适用
II. Non-operating funds occupied by controlling shareholders and other related parties during the
reporting period
□适用√不适用
III. Guarantee in violation of regulation
□适用√不适用IV. Explanation of the Company's board of directors to the accounting firm's “non-standard opinionaudit report”
□适用√不适用
V. The Company's analysis and explanation on the reasons and effects of changes in accounting
policies accounting estimates or corrections of major accounting errors
(I) The Company's analysis and explanation of the reasons and effects of the correction of major
accounting errors
□适用√不适用
(II) The Company's analysis and explanation of the reasons and effects of the correction of major
accounting errors
□适用√不适用80
(III) Communication with the former accounting firm
□适用√不适用
(IV) Approval procedures and other note
□适用√不适用
VI. Appointment and dismissal of accounting firms
Unit: ten-thousand-yuan Currency: RMB
Current appointment
Domestic accounting firm name Zhonghui Certified Public Accountants (Special
General Partnership)
Domestic accounting firm remuneration 379
Audit period for domestic accounting firms 7
The name of the certified public accountant of the
domestic accounting firm Chen Xiaohua Fang Sai
Consecutive years of audit services of CPAs of
domestic accounting firms Chen Xiaohua (2 year) Fang Sai (4 years)
Name Remuneration
Internal control audit accountingZhonghui Certified Public
firm Accountants (Special General 600000 yuanPartnership)
Explanation on the appointment and dismissal of accounting firms
□适用√不适用
Explanation on the change of accounting firm during the audit period
□适用√不适用
Explanation of the situation where the audit fee has decreased by more than 20% (including 20%)
compared to the previous year
□适用√不适用
VII. Situations at risk of delisting
(I) Reasons for delisting risk warning
□适用√不适用
(II) Countermeasures the Company intends to take
□适用√不适用
(III) Circumstances and reasons for facing termination of delisting
□适用√不适用
VIII. Matters related to bankruptcy and reorganization
□适用√不适用81
IX. Major litigation and arbitration matters
□本年度公司有重大诉讼、仲裁事项√本年度公司无重大诉讼、仲裁事项
X. Listed companies and their directors senior managers controlling shareholders and actual
controllers suspected of violating laws and regulations punishments and rectifications
□适用√不适用
XI. Explanation on the integrity status of the Company and its controlling shareholders and actual
controllers during the reporting period
□适用√不适用
XII. Significant related-party transactions
(I) Related party transactions related to daily operations
1. Matters that have been disclosed in the interim announcement and have not seen any
subsequent progress or changes in implementation
√适用□不适用
Overview of the matter Query IndexFor details please refer to the “Announcement onthe Estimated Situation of Routine RelatedExpected routine related-party transactions for 2025 Transactions in 2025” (Announcement No.:
2025-018) disclosed by Hengli Petrochemical on the
Shanghai Stock Exchange website on April 17 2025.
2. Matters that have been disclosed in the interim announcement but have since been subject to
further implementation progress or changes
□适用√不适用
3. Matters not disclosed in the interim announcement
□适用√不适用
(II) Related-party transactions in asset or equity acquisition and sale
1. Matters that have been disclosed in the interim announcement and have not seen any
subsequent progress or changes in implementation
□适用√不适用
2. Matters that have been disclosed in the interim announcement but have since been subject to
further implementation progress or change
□适用√不适用
3. Matters not disclosed in the interim announcement
□适用√不适用82
4. If performance agreements are involved the performance achieved during the reporting period
should be disclosed
□适用√不适用
(III) Significant related-party transactions involving joint overseas investment
1. Matters that have been disclosed in the interim announcement and have not seen any
subsequent progress or changes in implementation
□适用√不适用
2. Matters that have been disclosed in the interim announcement but have since been subject to
further implementation progress or changes
□适用√不适用
3. Matters not disclosed in the interim announcement
□适用√不适用
(IV) Creditor's rights and liabilities with related parties
1. Matters that have been disclosed in the interim announcement and have not seen any
subsequent progress or changes in implementation
□适用√不适用
2. Matters that have been disclosed in the interim announcement but have since been subject to
further implementation progress or changes
□适用√不适用
3. Matters not disclosed in the interim announcement
□适用√不适用
(V) Financial transactions between the Company and related finance companies and between the
Company's holding finance companies and related parties
□适用√不适用
(VI) Others
□适用√不适用
XIII. Significant contracts and their performance
(I) Trusteeship contracting and leasing matters
1. Trusteeship
□适用√不适用83
2. Contracting
□适用√不适用
3. Leasing
□适用√不适用84
(II) Guarantee situation
√适用□不适用
Unit: hundred-million-yuan Currency: RMB
The Company's external guarantees (excluding guarantees for subsidiaries)
Relations
hip Guarante Whether Whether
between e Guarante the Whether it is a
Guaranto the The Guarantee occurrenc Guarante Type ofsecured e date e e guarante Collateral guarante
the Guarantee
guarante overdue Counter-g guarante
Relevanc
r guarantor Amount e
and the party (agreeme Start date
Expiratio (if any) e has uarantee e for
nt signing n Date
e been e is amountoverdue related
relation
listed fulfilled parties
company date)
None
Total amount of guarantees incurred during the reporting period
(excluding guarantees to subsidiaries)
Total balance of guarantees at the end of the reporting period (A)
(excluding guarantees to subsidiaries)
Guarantees provided by the Company and subsidiaries to its subsidiaries
Total amount of guarantees for subsidiaries during the reporting
period 3385.97
Total balance of guarantees to subsidiaries at the end of the
reporting period (B) 2070.75
Total company guarantees (including guarantees to subsidiaries)
Total Guarantee (A+B) 2070.75
The ratio of the total guarantee amount to the Company's net
assets (%) 310.12
Including:
Amount of guarantee provided for shareholders actual controllers
and their related parties (C) -85
Amount of debt guarantee provided directly or indirectly for
guaranteed objects whose asset-liability ratio exceeds 70% (D) 0.10
The amount of the part where the total guarantee exceeds 50% of
the net assets (E) 1604.21
The total amount of the above three guarantees (C+D+E) 1604.31
Explanation on possible joint and several liability for unexpired
guarantees
Guarantee information During the reporting period the Company's guarantees were mutual guarantees between
the Company and its subsidiaries (sub-subsidiaries).Note: On August 15 2025 the Company convened the 30th Meeting of the 9th Board of Directors which reviewed and approved the “Proposal on the Absorptionand Merger between Wholly-Owned Subsidiaries”. This approved the absorption and merger of the Company's wholly-owned subsidiary Hengli Chemical by
another wholly-owned subsidiary Hengli Refining and Chemical. The absorption and merger transaction has been completed; Hengli Chemical has been lawfully
deregistered and all its assets liabilities rights and obligations have been legally assumed by Hengli Refining and Chemical. As a result of this absorption and
merger Hengli Refining and Chemical having succeeded the relevant rights and obligations of Hengli Chemical has correspondingly taken over the syndicated
loan for the 1.5 million tonnes per annum ethylene project led by the Dalian Branch of China Development Bank. The Company will continue to provide a full joint
and several liability guarantee for the entire term of this medium- to long-term syndicated loan for the ethylene project.(III) Entrusting others to manage cash assets
1. Entrusted financial management
(1). Overall situation of entrusted wealth management
√适用□不适用
Unit: ten-thousand-yuan Currency: RMB
Type Riskcharacteristics Outstanding Balance Overdue uncollected amount
Bank financial products Low risk 101311.25
Financial products of securities
companies Medium risk 5200.00
Trust financial products Medium risk 22000.00
Public fund products Medium risk 1702.03
Private equity fund products Medium to
high risk 3800.0086
Other
□适用√不适用
(2). Individual entrusted financial management
√适用□不适用
Unit: ten-thousand-yuan Currency: RMB
Entrusted Risk Entrusted Entrusted
Entrusted
Trustee financial financial financial
financial Funding Restrictions Actual Undue Overdue
managemen characteristics managemen manageme
manageme direction situation Gains or amount uncollected
t type t amount nt start date nt maturity losses amountdate
Wujiang Bank Fixed
Merchants Wealth Low toManageme medium risk 2000.00 2025/10/14 income 2000.00Bank nt assets
Bank Fixed
Suzhou Wealth
Huaxia Bank Manageme Low risk 5000.00 2025/10/15
income
financial 5000.00
nt instruments
Bank Debt assets
Wujiang Wealth Low to commoditie
CITIC Bank Manageme medium risk 8000.00 2025/12/2 s and 8000.00
nt derivativesassets
Bank Fixed
Suzhou Wealth income
Huaxia Bank Manageme Low risk 5000.00 2025/12/4 financial 5000.00
nt instruments
Wujiang Bank
Merchants Wealth Low to
Fixed
Manageme medium risk 10000.00 2025/12/5 income 10000.00Bank nt assets87
Bank Fixed
Suzhou Wealth Low to income
Huaxia Bank Manageme medium risk 13000.00 2025/12/8 financial 13000.00
nt instruments
Zhangjiagan Bank
g Rural Wealth Low to Fixed
Commercial Manageme medium risk 3000.00 2025/12/17 income 3000.00
Bank nt assets
Bank Fixed
Suzhou Wealth
Huaxia Bank Manageme Low risk 5000.00 2025/12/23
income
financial 5000.00
nt instruments
Bank
Wujiang Wealth Low to Fixed
CITIC Bank Manageme medium risk 5000.00 2025/12/26 income 5000.00
nt assets
Nanma
Agricultural BankWealth Fixedand Manageme Low risk 10000.00 2025/12/30 income 10000.00
Commercial
Bank nt
assets
Bank
Wujiang Wealth Low to Fixed
CITIC Bank Manageme medium risk 9500.00 2025/12/30 income 9500.00
nt assets
Bank Fixed
Wujiang Wealth Low to
CITIC Bank Manageme medium risk 3000.00 2025/12/31
income
financial 3000.00
nt instruments
Jiangsu
Zhaoxin Private MediumPrivate equity funds and high 1500.00 2025/2/5
Futures and 1500.00
Equity Fund risk Derivatives
Manageme88
nt Co. Ltd.Shenzhen mutual
Ruitao Asset Private Medium funds
Manageme equity funds and high 1000.00 2025/5/28 1000.00
nt Co. Ltd. risk
futures and
derivatives
Bank of
Communica
tions Trust Medium 2000.00 2025/9/16 EquityInternationa Investment risk assets 2000.00
l Trust Co.Ltd.Tibet Trust Trust Medium Standardize
Co. Ltd. Investment risk 20000.00 2025/9/19 d debt 20000.00assets
CCB Wealth Bank Fixed
Manageme Wealth
nt Co. Ltd. Manageme
Low risk 5000.00 2025/12/29 income 5000.00
nt assets
Wujiang
Shengze Bank
Branch of Wealth Fixed
China Manageme Low risk 5000.00 2025/12/31 income 5000.00
Constructio nt assets
n Bank
Jiangsu Bank
Bank Wealth Fixed
Shengze Manageme Low risk 3000.00 2025/12/25 income 3000.00assets
Branch nt
Ningbo
Bank Co. Bank
Ltd. Wealth Fixed
Wujiang Manageme Low risk 9000.00 2025/12/31 income 9000.00
High-tech nt assets
Industrial89
Park Branch
Others
□适用√不适用90
(3). Provision for impairment of entrusted financial management
□适用√不适用
2. Entrusted loan situation
(1). General situation of entrusted loans
□适用√不适用
Others
□适用√不适用
(2). Individual entrusted loan
□适用√不适用
Others
□适用√不适用
(3). Impairment provision for entrusted loans
□适用√不适用
3. Others
□适用√不适用
(IV) Other major contracts
□适用√不适用
XIV. Progress descriptions on the use of raised funds
□适用√不适用
XV. Explanations on other major events that have a significant impact on investors' value judgments
and investment decisions
□适用√不适用91
Chapter 6 Changes in shareholding and shareholder information
I. Changes in share capital
(I) Changes in shares
1. Changes in shares
During the reporting period the total number of shares and share capital structure of the Company
have not changed.
2. Description of changes in shares
□适用√不适用
3. The impact of shareholding changes on financial indicators such as earnings per share and net
assets per share in the last year and the latest period (if any)
□适用√不适用
4. Other content that the Company deems necessary or required by securities regulators to
disclose.□适用√不适用
(II) Changes in restricted shares
□适用√不适用
II. Securities issuance and listing
(I) Securities issuance as of the reporting period
√适用□不适用
Currency: RMB
Types of stocks and Types of Types of Types of Types of Types of Types of
their derivative stocks and stocks and stocks and stocks and stocks and stocks and
securities their their their their their their
derivative derivative derivative derivative derivative derivative
securities securities securities securities securities securities
Bonds (including corporate bonds corporate bonds and non-financial corporate bond financing
instruments)
First tranche of
medium-term notes 2025-04-09 2.47% 500 million 2025-04-11 500 million
for 2025 yuan yuan
2028-04-07
The first tranche of
science and
technology 2025-06-25 1.85% 1 billion yuan 2025-06-271 billion yuan 2026-06-25
innovation bonds in
2025
Second Tranche of
Science and 2025-08-19 1.84% 1 billion yuan 2025-08-211 billion yuan 2026-08-19
Technology92
Innovation Bonds in
2025
The third tranche of
science and
technology 2025-10-24 1.79% 600 millionyuan 2025-10-28
600 million
yuan 2026-10-26innovation bonds for
2025
Explanation on securities issuance as of the reporting period (for bonds with different interest rates
during the duration please explain separately):
√适用□不适用
1. Pursuant to the Acceptance of Registration Notice (Zhong Shi Xie Zhu [2024] No. CP92) issued
by the National Association of Financial Market Institutional Investors (NAFMII) the NAFMII has
accepted the registration of the Company's short-term financing bonds with a registered amount of
RMB 3 billion. The registration quota is valid for a period of two years from the date of issuance of the
notice.On June 25 2025 the Company issued the 2025 First Tranche of Sci-Tech Innovation Bonds in the
national inter-bank market with a term of 365 days a total issuance amount of RMB 1 billion and a
coupon rate of 1.85%.On August 19 2025 the Company issued the 2025 Second Tranche of Sci-Tech Innovation Bonds
in the national inter-bank market with a term of 365 days a total issuance amount of RMB 1 billion
and a coupon rate of 1.84%.On October 24 2025 the Company issued the 2025 Third Tranche of Sci-Tech Innovation Bonds in
the national inter-bank market with a term of 365 days a total issuance amount of RMB 600 million
and a coupon rate of 1.79%.
2. On November 20 2024 the Company received the “Notice of Acceptance of Registration”
(NAFMII Registration Notice Reference No.: [2024] MTN1155) issued by National Association of
Financial Market Institutional Investors approving the registration of the Company's medium-term
notes with a total registered amount of RMB 3 billion yuan. The registration quota will remain valid for
two years from the date indicated on the notice.On April 9 2025 the Company issued the first tranche of medium-term note for the year 2025 in
the national interbank market. The bonds have a maturity of 3 years with a total issuance amount of
0.5 billion yuan and an issuance interest rate of 2.47%
(II) Changes in the total number of shares of the Company and the structure of shareholders as well
as changes in the structure of the Company's assets and liabilities
□适用√不适用
(III) Existing internal staff shares
□适用√不适用
III. Information on shareholders and actual controllers
(I) Total number of shareholders
Total number of ordinary shareholders as of the end
of the reporting period (accounts) 58270
The total number of ordinary shareholders at the
end of the previous month before the annual report 70491
disclosure date (accounts)
Total number of preferred shareholders with voting
rights restored as of the end of the reporting period 093
(accounts)
The total number of preference shareholders whose
voting rights have been restored at the end of the
previous month before the annual report disclosure 0
date (accounts)
(II) Table of shareholdings of the top ten shareholders and top ten tradable shareholders (or
shareholders not subject to sales restrictions) as of the end of the reporting period
Unit: share
Shareholdings of the top ten shareholders (excluding shares lent through refinancing)
Numbe Pledge Mark or
Shareholde Changes Number of r of Freeze Situation
r's name during the shares held at Ratio restrict
Shareh
Shar
reporting the end of the (%) ed oldere
(Full name) period period shares Quantity naturestatu
held s
Domest
Hengli ic
Group Co. 2100612342 29.84 - Pled 110800000 non-sta
Ltd. ge 0 te-owned legal
person
Domest
Hengneng ic
Investment
(Dalian) 1498478926 21.29 -
Pled
ge 498200000
non-sta
te-own
Co. Ltd. ed legal
person
Domest
Fan
Hongwei 791494169 11.24 -
Non
e -
ic
natural
person
De Cheng
Li Foreign
Internation 732711668 10.41 - None - legalal Group person
Co. Ltd.Hong Kong
Securities
Clearing -13096062 211663993 3.01 - Non - Other
Company e
Limited
Dalian
State-owne
d Assets
Investment
and 68898123 0.98 -
Pled
ge 15000000 Other
Operation
Group Co.Ltd.Jiangsu Non State-o
Hegao 61952065 0.88 - e - wned94
Investment legal
Co. Ltd. entity
Hailai
Internation
al 52246838 0.74 - Non
Investment e
- Other
Co. Ltd.Hainan
Huayin
Tianxia
Private
Equity
Fund
Manageme
nt Co. Ltd. 40622726 0.58 -
Non
e - Other
- Huayin
Xuyang No.
1 Private
Equity
Investment
Fund
Industrial
and
Commercia
l Bank of
China Domest
Limited – ic
Huatai-Pine Non non-sta
Bridge CSI -1434704 34966725 0.50 - e - te-own
300 ed legal
Exchange person
Traded
Open-Ende
d Index
Fund
Shareholdings of the top ten shareholders without restrictions on sales (excluding shares lent
through refinancing)
Types and quantities of shares
Shareholder Name Number of unrestricted tradableshares held type quantity
Hengli Group Co. Ltd. 2100612342 RMB ordinaryshares 2100612342
Hengneng Investment
(Dalian) Co. Ltd. 1498478926
RMB ordinary
shares 1498478926
Fan Hongwei 791494169 RMB ordinaryshares 791494169
De Cheng Li International 732711668 RMB ordinaryGroup Co. Ltd. shares 732711668
Hong Kong Securities RMB ordinary
Clearing Company Limited 211663993 shares 211663993
Dalian State-owned Assets RMB ordinary
Investment and Operation 68898123 shares 68898123
Group Co. Ltd.Jiangsu Hegao Investment 61952065 RMB ordinary 6195206595
Co. Ltd. shares
Hailai International
Investment Co. Ltd. 52246838
RMB ordinary
shares 52246838
Hainan Huayin Tianxia RMB ordinary
Private Equity Fund shares
Management Co. Ltd. -
Huayin Xuyang No. 1 40622726 40622726
Private Equity Investment
Fund
Industrial and Commercial RMB ordinary
Bank of China Limited – shares
Huatai-PineBridge CSI 300 34966725 34966725
Exchange Traded
Open-Ended Index Fund
Explanation of the
repurchase accounts As of the end of the reporting period None of the top ten
among the top ten shareholders had a corporate repurchase account.shareholders
Explanation on proxy
voting rights proxy voting
rights and waiver of voting
rights of the
above-mentioned
shareholders
Explanation on the related
relationship or concerted Hengli Group Hengneng Investment Fan Hongwei Dechengli Hegao
action of the Investment Hailaide and Huayin Xuyang No. 1 are acting in concert;
above-mentioned the relationships among other shareholders are unknown.shareholders
Explanation on preferred
stockholders with restored During the reporting period the Company had no preferred
voting rights and the shareholders.number of shares held
Shareholders holding more than 5% of the shares the top ten shareholders and the top ten
shareholders of unrestricted tradable shares participating in the refinancing business and lending share
□适用√不适用
The top ten shareholders and the top ten shareholders of unrestricted tradable shares have changed
compared to the previous period due to lending/repayment of refinancing
□适用√不适用
The number of shares held by the top ten shareholders with sales restrictions and the conditions for
sales restrictions
□适用√不适用
(III) Strategic investors or general legal persons become the top 10 shareholders due to allotment of
new shares
□适用√不适用96
IV. Controlling shareholders and actual controllers
(I) Controlling shareholders
1. legal person
√适用□不适用
Name Hengli Group Co. Ltd.The person in charge or legal
representative of the entity Chen Jianhua
Date of establishment January 16 2002
Main operating business Production and sales of needle textiles and paper packaging
materials (excluding printing) ; sales of chemical fiber raw
materials plastics mechanical and electrical equipment
instruments ash residue purified terephthalic acid (PTA) and
monoethylene glycol (MEG) ; industrial investment; research and
development of new textile raw materials products; self-operated
and agency import and export of various commodities and
technologies; limited branch operations include thermal power
generation and steam production and supply. (Business activities
in projects that require approval by law can only be conducted
after obtaining approvals from relevant departments).
2. Natural person
□适用√不适用
3. Special note on the absence of a controlling shareholder in the Company
□适用√不适用
4. Explanation on the change of controlling shareholders during the reporting period
□适用√不适用
5. Block diagram of the property rights and control relationship between the Company and the
controlling shareholder
√适用□不适用97
(II) Actual controller
1. Legal person
□适用√不适用
2. Natural person
√适用□不适用
Name Chen Jianhua and Fan Hongwei (Spouse)
Nationality China
Whether to obtain the right ofNone
residence in other countries or regions
Chen Jianhua is the chairman and general manager of Hengli
Main occupations and positions Group Co. Ltd. the controlling shareholder of the listedcompany; Fan Hongwei is the current chairman of the listed
company.Information on domestic and overseasChen Jianhua and Fan Hongwei are the actual controllers of
listed companies that have heldGuangdong Songfa Ceramics Co. Ltd. (stock code: 603268) a
controlling stakes in the past 10 years listed company and Suzhou Wujiang Tongli Lake Tourism ResortCo. Ltd. (stock code: 834199) a listed company.
3. Special note for the absence of actual controllers in the Company
□适用√不适用
4. Explanation on changes in the Company's control during the reporting period
□适用√不适用
5. Block diagram of the property rights and control relationship between the Company and the
actual controller
√适用□不适用
Note:
1. When calculating the shareholding ratio of Hengfeng Investment (Dalian) Co. Ltd. the number of
shares directly held through its own account “Hengfeng Investment (Dalian) Co. Ltd”. (accounting for
0.46% of the total share capital) and the number of shares indirectly held through the contractualprivate equity fund account “Hainan Huayin Tianxia Private Equity Fund Management Co. Ltd. - Huayin98Xuyang No. 1 Private Equity Securities Investment Fund” (accounting for 0.58% of the total share
capital) are included.
2. The Company's actual controllers are Chen Jianhua and Fan Hongwei (a married couple) who
directly and indirectly (including through voting rights entrustment) hold a total of 5330873649
shares in the Company via Hengli Group Co. Ltd. and its concerted parties representing a 75.73%
shareholding ratio.
6. The actual controller controls the Company through trust or other asset management methods
□适用√不适用
(III) Other information on controlling shareholders and actual controller
□适用√不适用
V. The cumulative number of pledged shares by the Company's controlling shareholder or largest
shareholder and their concerted actors accounts for more than 80% of their total holdings in the
Company
□适用√不适用
VI. Other corporate shareholders holding more than 10% of the shares
√适用□不适用
Unit: ten-thousand-yuan Currency: RMB
Information on
Name of corporate Head of Unit or Date of Organization Registered main business
shareholder legalrepresentative Establishment code capital
operations or
management
activities etc.Hengneng
Investment Fan Hongwei 2014-03-06 91210244089086 50000invest
(Dalian) Co. Ltd. 1452
De Cheng Li
International Fan Hongwei 2003-08-27 Registration 500Trade and
Group Co. Ltd. number: 859250 investment
Other information Hengneng Investment and Tak Shing Li are persons acting in concert with Hengli
Group the controlling shareholder of the Company
VII. Explanation on reduction of shareholding restriction
□适用√不适用
VIII. Specific implementation of share repurchase during the reporting period
□适用√不适用
IX. Information of preferred shares
□适用√不适用99
Chapter 7 Information of bonds
I. Corporate bonds (including enterprise bonds) and non-financial corporate debt financing
instruments
√适用□不适用
(I) Corporate bonds (including enterprise bonds)
□适用√不适用
(II) Use of proceeds from corporate bond issuance
□公司债券在报告期内涉及募集资金使用或者整改
√本公司所有公司债券在报告期内均不涉及募集资金使用或者整改
(1).Funds raised will be used for specific projects
□适用√不适用
(III) Additional disclosure requirements for special bond types
□适用√不适用
(IV) Significant matters concerning corporate bonds during the reporting period
□适用√不适用100
(V) Debt financing instruments for non-financial enterprises in the inter-bank bond markets
√适用□不适用
1、 Non-financial corporate debt financing instruments
Unit: hundred-million-yuan Currency: RMB
Investo Whethe
r Tra r there
Inter din is a risk
Abbreviatio Maturity Bond est Payment of
Suitabil
Bond name Code Issuance date Value date balan principal Trading ity
g of
n date rate Me terminatce (%) and interest
places Arrang
ement ch ion of
s (if ani listing
any) sm transactions
Interest is
Hengli paid
Petrochemica annually
l Co. Ltd. 25 Hengli and China's
2025 First Petrochemi 102581528 2025-04-09 2025-04-10 2028-04-10 5 2.47 principal interbank No
Tranche cal MTN001 and interest
Medium-Ter are repaid
market
m Notes in a lumpsum at
maturity.Hengli 25 Hengli
Petrochemica Petrochemi
l Co. Ltd. cal CP001 Principal
2025 First (Science and interest China's
Tranche of and 042580325 2025-06-25 2025-06-26 2026-06-26 10 1.85 paid in a interbank No
Science and Technology lump sum market
Technology Innovation at maturity
Innovation Board
Bonds Bond)101
Hengli
Petrochemica 25 Hengli
l Co. Ltd. Petrochemical CP002 Principal2025 Second
Tranche of (Science
and interest China's
and 042580425 2025-08-19 2025-08-20 2026-08-20 10 1.84 paid in a interbank NoScience and Technology lump sum marketTechnology Innovation at maturityInnovation
Bonds Bond)
Hengli
Petrochemica 25 Hengli
l Co. Ltd. Petrochemi Principal
2025 Third cal CP003(Science and interest China'sTranche of and 042580562 2025-10-24 2025-10-27 2026-10-27 6 1.79 paid in a interbank NoScience and lump sum market
Technology TechnologyInnovation at maturityInnovation
Bonds Bond)
Hengli
Petrochemica
l Co. Ltd. Principal
2026 First 26 Hengli and interest China's
Tranche Petrochemi 042680123 2026-3-24 2026-3-25 2027-3-25 10 1.68 paid in a interbank No
Short-Term cal CP001 lump sum market
Financing at maturity
Bonds
The Company's countermeasures against the risk of delisting and trading bonds
□适用√不适用
Overdue bonds
□适用√不适用
Bond interest payment and repayment during the reporting period102
√适用□不适用
Bond Name Explanation on interest payment and repayment
Hengli Petrochemical Co. Ltd. 2024 First Tranche Short-Term Financing The redemption of this bond issue has been completed with a total principal and
Bonds (Science and Technology Innovation Board Bonds) interest payment of RMB 1022 million.Hengli Petrochemical Co. Ltd. 2024 Second Tranche Short-Term Financing The redemption of this bond issue has been completed with a total principal and
Bonds (Science and Technology Innovation Board Notes) interest payment of RMB 1021.5 million.
2、 The triggering and implementation of company or investor option clauses and investor protection clauses
□适用√不适用
3、 Intermediaries providing services for bond issuance and duration business
Name of
Intermediary name Office address Signing Contact person Contact number
Accountant
Postal Savings Bank of China
Co. Ltd. No. 3 Financial Street Xicheng District Beijing Yang Lixun Zheng Yang 010-68858095
Industrial Bank Co. Ltd. Xingye Bank Building No. 398 Jiangbin Middle AvenueTaijiang District Fuzhou City Fujian Province Gu Qingcheng 0411-88007094
China Galaxy Securities Co. Room 101 7th to 18th Floors Building 1 No. 8 Xiying Street Zhang Tao Xu Wei Li Tong
Ltd. Fengtai District Beijing Li Manting 010-80927129
China Merchants Bank Co. China Merchants Bank Building No. 7088 Shennan Avenue 0755-88026264
Ltd. Futian District Shenzhen Guo Pengfei and Guo Wei 0411-39853306
China Zheshang Bank Co. Ltd. No. 1788 Hongning Road Xiaoshan District Hangzhou CityZhejiang Province Wang Haoran 024-31911273
China Construction Bank
Corporation No. 25 Financial Street Xicheng District Beijing Wang Wenjia 010-67595589
Hua Xia Bank Co. Ltd. No. 22 Jianguomen Inner Street Dongcheng District Beijing Shi Cong 010-85237774
China CITIC Bank Corporation Floors 6-30 and 32-42 Building 1 No. 10 Guanghua Road
Limited Chaoyang District Beijing You Wen 010-66638188
Soochow Securities Co. Ltd. No. 5 Xingyang Street Suzhou Industrial Park Chen Shih-hao 13776126605
Beijing Tianyuan Law Firm Unit 509 Building A International Enterprise Building No.35 Financial Street Xicheng District Beijing Zhang Deren Huang Jingya 010-57763888103
Grandall Law Firm (Hangzhou) Grandall Law Firm No. 2 & 15 Block B Baita Park LaofuxingRoad Shangcheng District Hangzhou Yang Zhao 0571-85775888
Zhonghui Certified Public
Accountants (Special General Room 601 Building A Hualian Times Building No. 8 Xinye Chen Xiaohua Fang Sai 0571-88879999
Partnership) Road Jianggan District Hangzhou Fang Sai
Dagong International Credit
Rating Co. Ltd. No. 18 Jia Sanlihe Second District Xicheng District Beijing Cui Aiqiao 010-67413373
Shanghai Pudong 8th Floor Pudong Development Bank Building No. 29
Development Bank Co. Ltd. Bailianjing Road Pudong New Area Shanghai Zhang Ying 010-57395455
China Everbright Bank Co. China Everbright Center No. 25 & Jia 25 Taipingqiao Street
Ltd. Xicheng District Beijing Wang Yue 0411-39037023
Bank of China Limited No. 1 Fuxingmennei Street Xicheng District Beijing Wang Xinan 010-66592497
Changes to the above-mentioned intermediaries
□适用√不适用
4、 Use of raised funds at the end of the reporting period
√适用□不适用
Unit: hundred-million-yuan Currency:RMB
Whether it is
Operation of special Rectification of consistent with the
Bond name Total amount of Amount used Unused account for raised illegal use of purpose use plan andfunds raised amount funds (if any) raised funds (if other agreementsany) promised in the
prospectus
Hengli Petrochemical Co. Ltd. 2025 First
Tranche Medium-Term Notes 5 5 0 Normal compliance None Yes
Hengli Petrochemical Co. Ltd. 2025 First
Tranche of Science and Technology 10 10 0 Normal compliance None Yes
Innovation Bonds
Hengli Petrochemical Co. Ltd. 2025
Second Tranche of Science and 10 10 0 Normal compliance None Yes
Technology Innovation Bonds104
Hengli Petrochemical Co. Ltd. 2025 Third
Tranche of Science and Technology 6 6 0 Normal compliance None Yes
Innovation Bonds
Progress and operational benefits of raising funds for construction projects
□适用√不适用
Explanation on changing the use of funds raised from the above bonds during the reporting period
□适用√不适用
Other notes:
□适用√不适用
5、 Adjustments to credit rating results
□适用√不适用
Other notes:
□适用√不适用
6、 The implementation and changes of guarantees debt repayment plans and other debt repayment guarantee measures during the reporting period and
their impact
□适用√不适用
7、 Explanation on other conditions of non-financial corporate debt financing instruments
□适用√不适用105
(VI) The Company incurred a consolidated net loss during the reporting period that exceeded 10% of
the net assets at the end of the previous year
□适用√不适用
(VII) Overdue interest-bearing debts other than bonds at the end of the reporting period
□适用√不适用
(VIII)The impact on bond investors' rights during the reporting period due to violations of laws
regulations company bylaws provisions of information disclosure management systems as well
as deviations from the provisions or commitments stated in the bond prospectus
□适用√不适用
(IX) Accounting data and financial indicators of the Company in the previous two years by the end of
the reporting period
√适用□不适用
Unit: ten-thousand-yuan Currency: RMB
Key Indicators 2025 2024 Year-on-year Reason ofchanges (%) changes
Net profit excluding extraordinary
profit or loss 594924.70 520903.24 14.21
Current ratio 0.56 0.56 -
Quick ratio 0.31 0.30 3.33
Debt-to-assets ratio (%) 74.53 76.78 -2.25
Total debt-to-EBITDA ratio 0.13 0.12 8.33
Interest coverage ratio 2.68 2.25 19.11
Cash flow interest coverage ratio 6.44 4.16 54.81
EBITDA-to-interest coverage ratio 5.14 4.13 24.46
Loan repayment rate (%) 100.00 100.00 -
Interest coverage rate (%) 100.00 100.00 -
II. Convertible corporate bonds
□适用√不适用106
Chapter 8 Financial Reports
I. Auditor’s Report
√适用□不适用
All shareholders of Hengli Petrochemical Co. Ltd.:
(I) Audit opinionWe have audited the financial statements of Hengli Petrochemical Co. Ltd. (hereinafter “theCompany”) which comprise the consolidated and company balance sheets as at 31 December 2025
and the consolidated and company income statements consolidated and company cash flow
statements and consolidated and company statements of changes in equity for the year then ended
and notes to the financial statements.In our opinion the accompanying financial statements present fairly in all material respects the
consolidated and company financial positions as at 31 December 2025 and their financial performance
and their cash flows for the year then ended in accordance with the requirements of Accounting
Standards for Business Enterprises.(II) Basis for audit opinion
We conducted our audit in accordance with China Standards on Auditing. Our responsibilities
under those standards are further described in the Auditor's Responsibilities for the Audit of the
Financial Statements section of our report. We are independent of the Company and have fulfilled our
other ethical responsibilities in accordance with the China Code of Ethics for Certified Public
Accountants. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.(III) Key audit matters
Key audit matter is the matter that in our professional judgment was of most significance in our
audit of the financial statements for the year ended 31 December 2023. This matter was addressed in
the context of our audit of the financial statements as whole and in forming our opinion thereon and
we do not provide a separate opinion on this matter. We have determined the following matters to be
key audit matters that need to be communicated in the audit report.The key audit matters we identified during our audit are summarized below:
Key audit matter Addressed in the context of our audit
(i) Revenue recognition
As mentioned in the notes to the financial In the audit of the financial statements for the
statements of Hengli Petrochemical Company year we have implemented the following“Notes on Consolidated Financial Statement procedures for the matter of revenueItems - Operating Revenue” the operating recognition:
revenue for the current period was 1. Evaluate and test the design and operation
RMB200986035500. The primary revenue effectiveness of key internal controls related to
sources and recognition criteria are shown in revenue recognition of the Company;
note to the financial statements of the 2. Understand the various types of income ofCompany “Principal Accounting Policies and the Company and their recognition conditionsAccounting Estimates - Revenue”. and evaluate whether the income recognition
Since revenue is one of the key performance policy meets the requirements of the
indicators of the Company there is an inherent accounting standards; 3. Combined with the
risk that management will manipulate revenue comparison of gross profit margins of
recognition in order to achieve specific goals or companies in the same industry an analysis
expectations. Therefore we recognize revenue procedure is performed on the Company's107
Key audit matter Addressed in the context of our audit
recognition as a key audit matter. revenue costs and gross profit margins to
analyze the rationality of the gross profit
margin change trend;
4. Select sample and inspect the Company's
various types of income related contracts
invoices income confirmation documents and
other documents to test the authenticity of
income;
5. Perform a sample test on the revenue
recognized around the balance sheet date to
assess whether the sales revenue is recognized
in the appropriate accounting period;
6. Carry out confirmation procedure on the
income amount of the Company's major
customers and the balances of receivable.(ii) Provision for decline in value of inventories
As stated in the notes to the consolidated In the audit of the financial statements for the
financial statements of Hengli Petrochemical year we have implemented the followingCompany “Notes to Consolidated Financial procedures for the matter of Provision forStatements – Inventories” the ending decline in value of inventories:
inventory balance was RMB 24255826300 1. Evaluate and test the design and operation
the inventory impairment provision balance effectiveness of key internal controls related to
was RMB 543837400 and the carrying provision for decline in value of inventories of
amount of inventory was RMB 23711988900 the Company;
indicating a relatively high carrying amount. 2. Conduct sampling inspection on the
Hengli Petrochemical Company's inventory inventory of the Company to check whether
mainly consists of crude oil and the quantity of inventory is accurate and
refining-related products which are whether there are any conditions such as
significantly affected by macroeconomic damage obsolescence obsolescence and
conditions and fluctuations in crude oil market defects;
prices. The adequacy of the inventory 3. Obtained calculation sheet of the provision
impairment provision has a substantial impact for decline in value of inventories prepared by
on the financial statements. Furthermore the the management of the Company reviewed
determination of the net realizable value the key parameters for calculating the
during the inventory impairment provision provision for decline in value of inventories
process involves management's judgment. including estimated future sales prices costs to
Therefore we have identified the inventory be incurred by the completion of the project
impairment provision as a key audit matter. sales expenses and related taxes and fees and
checked the accuracy of the calculation of
provision for decline in value of inventories;
4. Check whether the calculation and
accounting treatment of provision for decline
in value of inventories is correct whether
provision or write-off for the year is consistent
with the relevant amount of profit or loss
account.(IV) Other information108
Management is responsible for the other information. The other information comprises the
information included in the Company’s 2025 annual report but does not include the financial
statements and our auditor's report thereon.Our opinion on the financial statements does not cover the other information and we do not
express any form of assurance conclusion thereon.In connection with our audit of the financial statements our responsibility is to read the other
information and in doing so consider whether the other information is materially inconsistent with
the financial statements or our knowledge obtained in the audit or otherwise appears to be materially
misstated.If based on the work we have performed we conclude that there is a material misstatement of
this other information we are required to report that fact. We have nothing to report in this regard.(V) Responsibilities of management and those charged with governance for the financial
statements
Management of the Company is responsible for the preparation of the financial statements to
achieve fair presentation in accordance with Accounting Standards for Business Enterprises and for the
design implementation and maintenance of such internal control as management determine is
necessary to enable the preparation of the financial statements that are free from material
misstatement whether due to fraud or error.In preparing the financial statements management is responsible for assessing the Company's
ability to continue as a going concern disclosing as applicable matters related to going concern and
using the going concern basis of accounting unless management either intend to liquidate the
Company or to cease operations or have no realistic alternative but to do so.Those charged with governance are responsible for overseeing the Company's financial reporting
process.(VI) Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as
whole are free from material misstatements whether due to fraud or error and to issue an audit
report that includes an audit opinion. Reasonable assurance is a high level of assurance but it does not
guarantee that an audit conducted in accordance with auditing standards will always detect a material
misstatement when it exists. Misstatements may arise from fraud or error and are generally considered
material if they could reasonably be expected individually or in the aggregate to influence the
economic decisions of users taken on basis of the financial statements.In the process of performing audit work in accordance with auditing standards we exercise
professional judgment and maintain professional skepticism. At the same time we also perform the
following work:
Our objectives are to obtain reasonable assurance about whether the financial statements as
whole are free from material misstatement whether due to fraud or error and to issue an auditor's
report that includes our opinion. Reasonable assurance is a high level of assurance but is not a
guarantee that an audit conducted in accordance with auditing standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if individually or in the aggregate they could reasonably be expected to influence the economic
decisions of users taken on basis of these financial statements.As part of an audit in accordance with auditing standards we exercise professional judgment and
maintain professional skepticism throughout the audit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements whether
due to fraud or error design and perform audit procedures responsive to those risks and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher than for one resulting from error as fraud may
involve collusion forgery intentional omissions misrepresentations or the override of internal
control.109
(2) Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by management.
(4) Conclude on the appropriateness of the management’s use of the going concern basis of
accounting and based on the audit evidence obtained whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Company's ability to continue as a going
concern. If we conclude that a material uncertainty exists the auditing standards require us to draw
attention to users of the financial statements in our auditor's report to the related disclosures in the
financial statements or if such disclosures are inadequate to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of our auditor's report. However future events or
conditions may cause the Company to cease to continue as a going concern.
(5) Evaluate the overall presentation structure and content of the financial statements
including the disclosures and whether the financial statements represent the underlying transactions
and events in a manner that achieves fair presentation.
(6) Obtain sufficient appropriate audit evidence regarding the financial information of the
entities or business activities within the Company to express an opinion on the financial statements.We are responsible for the direction supervision and performance of the group audit. We remain
solely responsible for our audit opinion.We communicate with those charged with governance regarding among other matters the
planned scope and timing of the audit and significant audit findings including any significant
deficiencies in internal control that we identify during our audit.We also provide those charged with governance with a statement that we have complied with
relevant ethical requirements regarding independence and to communicate with them all
relationships and other matters that may reasonably be thought to bear on our independence and
where applicable related safeguards.From the matters communicated with those charged with governance we determine those
matters that were of most significance in the audit of the financial statements of the current period
and are therefore the key audit matters. We describe these matters in our auditor's report unless law
or regulation precludes public disclosure about the matter or when in extremely rare circumstances
we determine that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest benefits of
such communication.Zhonghui Certified Public Accountants (Special General Partnership)
Chinese Certified Public Accountant: Chen Xiaohua (Project Partner)
Public Accountant: Fang Sai
China Hangzhou Certified
Report Date: April 13 2026
II. Financial Statements
Consolidated Balance Sheet
December 31 2025
Compiled by: Hengli Petrochemical Co. Ltd
Unit: Yuan Currency: RMB
Item Note December 31 2025 December 31 2024
Current assets:110
Cash and bank balances 29452553398.05 30836640755.89
Settlement reserve
Due from banks and other
financial institutions
Financial assets held for
trading 1738501539.93 428380369.27
Derivative financial assets
Notes receivable 9139698.73 28601284.34
Accounts receivable 641497032.15 579028516.23
Receivable financing 6534848806.60 6628663752.25
Prepayments 1422702971.64 2432127659.25
Insurance premium
receivables
Reinsurance premium
receivables
Reserve receivable for
reinsurance
Other receivables 939052382.12 441295980.89
Including: Interest
receivables
Dividend receivables
Financial assets purchased
under agreements to resell
Inventories 23711988902.11 24251461292.33
Including: Data resources
Contract assets
Assets held-for-sale
Non-current assets due
within one year
Other current assets 6719340061.82 7643356536.21
Total current assets 71169624793.15 73269556146.66
Non-current assets:
Loans and advances
Debts investment
Other debts investment
Long-term receivables
Long-term equity
investments 796623655.49 745868004.65
Other equity instruments
investment
Other non-current financial
assets
Investment properties 235712374.56 207631846.17
Fixed assets 148630305580.41 147008441268.04
Construction in progress 29156777648.83 38393831275.27
Productive biological assets
Oil and gas assets
Right-of-use assets 95104463.36 436048823.59
Intangible assets 8910854906.29 9147170857.28
Including: Data resources
Development cost111
Including: Data resources
Goodwill 77323123.69 77323123.69
Long-term deferred expenses 2058534913.31 1980550749.22
Deferred tax assets 550036912.73 467739176.52
Other non-current assets 578091162.56 1348708592.31
Total non-current assets 191089364741.23 199813313716.74
TOTAL ASSETS 262258989534.38 273082869863.40
Current liabilities:
Short-term loans 71126388831.87 79041948844.84
Borrowings from central
bank
Deposits and placements
from banks and other financial
institutions
Financial liabilities held for
trading 955162496.23 503787256.86
Derivative financial liabilities
Notes payable 3889528459.42 11447306278.33
Accounts payable 10904084718.69 9489657622.13
Receipts in advance
Contract liabilities 10280479293.07 7237041468.28
Financial assets sold under
agreements to repurchase
Due to customers and banks
Securities brokering
Securities underwriting
Employee benefits payable 464990334.08 493458721.02
Taxes payable 2034632852.57 1022522462.49
Other payables 399011597.06 375249175.51
Including: Interest payables
Dividends payable
Fees and commissions
payable
Reinsurance premium
payable
Liabilities held-for-sale
Non-current liabilities due
within one year 19136314737.67 14881493535.65
Other current liabilities 8552275055.32 6386840701.94
Total current liabilities 127742868375.98 130879306067.05
Non-current liabilities:
Claims reserve of insurance
contract
Long-term loans 60814339749.42 72289105878.33
Bonds payable 498925576.55
Including: Preferred shares
Perpetual bonds
Lease liabilities 63603406.53 304795938.86
Long-term payables 1456319918.43 2301784112.38
Long-term employee
benefits payable112
Provisions
Deferred income 4854666692.94 3851089558.89
Deferred tax liabilities 36994614.57 39225490.65
Other non-current liabilities
Total non-current
liabilities 67724849958.44 78786000979.11
TOTAL LIABILITIES 195467718334.42 209665307046.16
Owner's equity (or shareholders' equity):
Paid-in capital (or Share
capital) 7039099786.00 7039099786.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserve 18879746169.53 18845170600.53
Less: Treasury shares -
Other comprehensive
income -121388644.16 -26381521.04
Specific reserve 369951854.37 279243445.05
Surplus reserve 1103914180.29 1087391116.57
General risk reserve
Undistributed profits 39501990255.24 36174653818.01
Total owners’ equity (or
shareholders’ equity) 66773313601.27 63399177245.12
attributable to the parent
Minority interests 17957598.69 18385572.12
Total owners’ equity (or
shareholders’ equity) 66791271199.96 63417562817.24
Total liabilities and
owners’ equity (or 262258989534.38 273082869863.40
shareholders’ equity)
Legal representative: Fan Hongwei
Person in charge of financial function: Liu Xuefen
Head of Accounting Agency (Prepared by): Zheng Minxia
Parent Company Balance Sheet
December 31 2025
Compiled by: Hengli Petrochemical Co. Ltd
Unit: Yuan Currency: RMB
Item Note December 31 2025 December 31 2024
Current assets:
Cash and bank balances 46625871.56 52196041.75
Financial assets held for
trading
Derivative financial assets
Notes receivable
Accounts receivable 158106200.00 825949.04
Receivable financing
Prepayments 641142747.70 289803617.26
Other receivables 1908598994.03 335837191.04113
Including: Interest
receivables
Dividends receivable 132659920.68 198989881.02
Inventories
Including: Data resources
Contract assets
Assets held-for-sale
Non-current assets due
within one year
Other current assets -
Total current assets 2754473813.29 678662799.09
Non-current assets:
Debts investment
Other debts investment
Long-term receivables
Long-term equity
investments 44427275704.93 44422275704.93
Other equity instruments
investment
Other non-current financial
assets
Investment properties 131018581.65 95712297.59
Fixed assets 2471837500.09 2604742812.15
Construction in progress
Productive biological assets
Oil and gas assets
Right-of-use assets
Intangible assets
Including: Data resources
Development cost
Including: Data resources
Goodwill
Long-term deferred expenses 41705030.53 45086519.53
Deferred tax assets
Other non-current assets
Total non-current assets 47071836817.20 47167817334.20
TOTAL ASSETS 49826310630.49 47846480133.29
Current liabilities:
Short-term loans
Financial liabilities held for
trading
Derivative financial liabilities
Notes payable - 4000185.91
Accounts payable 1677550.15 1894228.97
Receipts in advance
Contract liabilities 515506970.35 201109561.52
Employee benefits payable 528250.00 683188.62
Taxes payable 18840288.37 12532698.69
Other payables 3075283255.38 6490766973.82
Including: Interest payables
Dividends payable114
Liabilities held-for-sale
Non-current liabilities due
within one year 514933333.36
Other current liabilities 2683534868.78 2042896931.14
Total current liabilities 6810304516.39 8753883768.67
Non-current liabilities:
Long-term loans 990000000.00
Bonds payable 498925576.55
Including: Preferred shares
Perpetual bonds
Lease liabilities
Long-term payables
Long-term employee
benefits payable
Provisions
Deferred income
Deferred tax liabilities
Other non-current liabilities
Total non-current
liabilities 1488925576.55
TOTAL LIABILITIES 8299230092.94 8753883768.67
Owner's equity (or shareholders' equity):
Paid-in capital (or Share
capital) 7039099786.00 7039099786.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserve 24142978843.34 24142978843.34
Less: Treasury shares -
Other comprehensive
income -
Specific reserve -
Surplus reserve 3645491152.92 3028970446.97
Undistributed profits 6699510755.29 4881547288.31
Total owners’ equity (or
shareholders’ equity) 41527080537.55 39092596364.62
Total liabilities and
owners’ equity (or 49826310630.49 47846480133.29
shareholders’ equity)
Legal representative: Fan Hongwei
Person in charge of financial function: Liu Xuefen
Head of Accounting Agency (Prepared by): Zheng Minxia
Consolidated Income Statement
January-December 2025
Unit: Yuan Currency: RMB
Item Note 2025 2024
I. Total revenue from operations 201087300615.49 236400576222.39
Including: Revenue from operations 200986035474.16 236273276477.92
Interest income 21568130.33 40498587.21115
Premium earned
Fees and commissions income 79697011.00 86801157.26
II. Total cost of operations 192333647783.19 228874564879.39
Including: Cost of operations 174568467326.08 212983331904.94
Interest expenses
Fees and commissions
expenses
Cash surrender amount
Net expenses of claim
settlement
Net provisions for insurance
contract reserves
Insurance policies dividend
expenses
Reinsurance expenses
Taxes and surcharges 8968754179.62 6423607854.88
Selling expenses 291073257.99 326431516.27
Administrative expenses 2496266183.86 2204675261.15
Research and development
expenses 1625694869.64 1702884233.90
Financial expense 4383391966.00 5233634108.25
Including: Interest expenses 4060786672.80 4342840074.59
Interest income 336460433.17 372209233.74
Add: Other income 2101225702.43 2353426901.38Investment income (”-” for
loss) -33511524.02 -137197845.63
Including: Gains from
investments in associates and joint 50755650.84 99867650.80
ventures
Gain from derecognition
of financial assets at amortized cost -Foreign exchange gain (”-” for
loss)
Gain from net exposure ofhedging (”-” for loss) -
Gains from changes of fairvalue (”-” for loss) -179590612.08 325003215.29Credit impairment loss (”-” for
loss) -7812763.94 -18616993.86Assets impairment loss (”-” for
loss) -1328746351.47 -1501661777.85
Gain from disposal of assets(”-” for loss) 2351895.17 2538670.78III. Operating profit (”-” for loss) 9307569178.39 8549503513.11
Add: Non-operating income 122430867.01 278592852.79
Less: Non-operating expenses 9607770.35 8310703.66IV. Total profit (”-” for loss) 9420392275.05 8819785662.24
Less: Income tax expenses 2346237860.95 1766778779.71V. Net profit (”-” for loss) 7074154414.10 7053006882.53
(I) Classified by continuity of operations
1.Net profit from continuingoperations (”-” for loss) 7074154414.10 7053006882.53116
2.Net profit from discontinuedoperations (”-” for loss) -
(II) Classified by attribution to ownership
1.Net profit attributable toshareholders of the parent (”-” for 7074582387.53 7043568223.60
loss)
2.Net profit attributable tominority interests (”-” for loss) -427973.43 9438658.93
VI. Other comprehensive income -
after tax -95007123.12 -16756867.96
(I) Other comprehensive income -
after tax attributable to owners of the -95007123.12 -16756867.96
parent
1. Other comprehensive income
not reclassified into profit or loss -
subsequently
(1)Changes in remeasurement of
defined benefit plan -
(2)Share of other comprehensive
income of the equity method -
investments
(3)Changes in fair value of other
equity instruments investment -
(4)Changes in fair value of the
Company’s own credit risks -
2. Other comprehensive income
that will be reclassified into profit or -95007123.12 -16756867.96
loss subsequently
(1)Share of other comprehensive
income of associates and joint -
ventures under equity method
(2)Changes in the fair value of
other debt investments -
(3)Reclassification of financial
assets recognized as other -
comprehensive income
(4)Credit impairment loss of other
debt investments -
(5)Cash flow hedging reserve -24697269.24 -57170401.70
(6)Translation of foreign currency
financial statements -70309853.88 40413533.74
(7)Others -
(II) Other comprehensive income -
after tax attributable to minority -
interests
VII. Total comprehensive income 6979147290.98 7036250014.57
(I) Total comprehensive income
attributable to owners of the parent 6979575264.41 7026811355.64
(II) Total comprehensive income
attributable to minority interests -427973.43 9438658.93
8. Earnings per share:
(I) Basic earnings per share (RMB
per share) 1.01 1.00117
(II) Diluted earnings per share
(RMB per share) 1.01 1.00
by acquiree before the merger is: 0 yuan the net profit realized by acquiree in the previous period is: 0
yuan.Legal representative: Fan Hongwei
Person in charge of financial function: Liu Xuefen
Head of Accounting Agency (Prepared by): Zheng Minxia
Parent Company Income Statement
January-December 2025
Unit: Yuan Currency: RMB
Item Note 2025 2024
I. Revenue from operations 410826990.05 553802144.20
Less: Cost of operations 4796925.60 3031978.73
Taxes and surcharges 37736209.01 34118493.29
Selling expenses -
Administrative expenses 128241357.55 126794792.81
Research and development
expenses -
Financial expense 54271651.15 38172957.19
Including: Interest expenses 85230608.90 38645198.63
Interest income 30982181.86 496815.72
Add: Other income 7531597.29 148223.25Investment income (”-” for
loss) 5964639220.68 1820989881.02
Including: Gains from
investments in associates and joint -
ventures
Gain from derecognition
of financial assets at amortized cost -
Gain from net exposure ofhedging (”-” for loss) -
Gains from changes of fairvalue (”-” for loss) -Credit impairment loss (”-” for
loss) 7256263.60 -16241487.65Assets impairment loss (”-” for
loss) -
Gain from disposal of assets(”-” for loss) -868.80 83354.32II. Operating profit (”-” for loss) 6165207059.51 2156663893.12
Add: Non-operating income
Less: Non-operating expensesIII. Total profit (”-” for loss) 6165207059.51 2156663893.12
Less: Income tax expensesIV. Net profit (”-” for loss) 6165207059.51 2156663893.12
(I) Net profit from continuingoperations (”-” for loss) 6165207059.51 2156663893.12
(II) Net profit from discontinuedoperations (”-” for loss)118
V. Other comprehensive income - after
tax
(I) Other comprehensive income
not reclassified into profit or loss
subsequently
1.Changes in remeasurement of
defined benefit plan
2.Share of other comprehensive
income of the equity method
investments
3.Changes in fair value of other
equity instruments investment
4.Changes in fair value of the
Company’s own credit risks
(II) Other comprehensive income
that will be reclassified into profit or
loss subsequently
1.Share of other comprehensive
income of associates and joint
ventures under equity method
2.Changes in the fair value of
other debt investments
3.Reclassification of financial
assets recognized as other
comprehensive income
4.Credit impairment loss of other
debt investments
5.Cash flow hedging reserve
6.Translation of foreign currency
financial statements
7.Others
VI. Total comprehensive income 6165207059.51 2156663893.12
VII. Earnings per share:
(I) Basic earnings per share
(RMB per share)
(II) Diluted earnings per share
(RMB per share)
Legal representative: Fan Hongwei
Person in charge of financial function: Liu Xuefen
Head of Accounting Agency (Prepared by): Zheng Minxia
Consolidated Cash Flow Statement
January-December 2025
Unit: Yuan Currency: RMB
Item Note 2025 2024
I. Cash flows from operating activities:
Cash received from sales of goods
or rendering of services 234466714511.80 277215781320.60
Net increase in deposits from
customers and inter-banks
Net increase in due to central bank
Net increase in fund borrowings119
from other financial institutes
Cash received from insurance
premium of original insurance
contracts
Net cash received from reinsurance
business
Net increase in insured’s deposits
and investments
Cash received from interests fees
and commissions 166956866.65 171637620.09
Net increase of placement from
banks and other financial institutions
Net increase in fund of repurchase
business
Net cash received in securities
brokerage agency
Tax refund received 1365220736.43 1056189221.48
Other cash received relating to
operating activities 6739156761.52 4870436651.18
Sub-total of cash inflows 242738048876.40 283314044813.35
Cash paid for goods and services 189625623415.60 238334668001.04
Net increase in issued loans and
advance
Net increase in deposits in central
bank and inter-banks
Cash paid for claims of original
insurance contracts
Net increase in due from banks and
other financial institutions
Cash paid for interest fees and
commission
Cash paid for policy dividends
Cash paid to and on behalf of
employees 5211390550.86 4783377478.79
Payments of all types of taxes 13128430492.66 13545605516.74
Other cash paid relating to
operating activities 3650815873.85 3917828560.85
Sub-total of cash outflows 211616260332.97 260581479557.42
Net cash flows from operating
activities 31121788543.43 22732565255.93
II. Cash flows from investing activities:
Cash received from disposal of
investments 44654590155.82 4880934436.96
Cash received from returns on
investments 36441768.29 6481135.51
Net cash received from disposal of
fixed assets intangible assets and 37272534.02 14666736.84
other long-term assets
Cash received from disposal of
subsidiaries and other business Units
Other cash received relating to
investing activities 143857735.20 799090647.24120
Sub-total of cash inflows 44872162193.33 5701172956.55
Cash paid to acquire fixed assets
intangible assets and other long-term 7111242107.71 21814133827.51
assets
Cash paid to acquire investments 45600168089.56 4495189641.44
Net increase in pledged loans
Cash paid to acquire subsidiaries
and other business Units
Other cash paid relating to investing
activities 1310187246.88 294114503.57
Sub-total of cash outflows 54021597444.15 26603437972.52
Net cash flows from investing
activities -9149435250.82 -20902265015.97
III. Cash flows from financing activities:
Cash received from capital
contribution 3300000.00
Including: Cash received from
investment by minority interests of 3300000.00
subsidiaries
Cash received from borrowings 107156933779.47 115704136828.87
Cash received relating to other
financing activities 7180245895.61 7140864483.31
Sub-total of cash inflows 114337179675.08 122848301312.18
Cash repayments of amounts
borrowed 124446109188.58 101349244062.64
Cash payments for interest
expenses and distribution of dividends 8352593535.44 9441369162.14
or profits
Including: Dividend paid to
minority interests of subsidiaries
Other cash payments relating to
financing activities 4861207124.13 4240407078.14
Sub-total of cash outflows 137659909848.15 115031020302.92
Net cash flows from financing
activities -23322730173.07 7817281009.26
IV. Effect of foreign exchange
rate changes on cash -78614640.82 -126442956.11
V. Net increase in cash and cash
equivalents -1428991521.28 9521138293.11
Add: Opening balance of cash and
cash equivalent 24546461064.45 15025322771.34
VI. Closing balance of cash and
cash equivalent 23117469543.17 24546461064.45
Legal representative: Fan Hongwei
Person in charge of financial function: Liu Xuefen
Head of Accounting Agency (Prepared by): Zheng Minxia
Parent Company Cash Flow Statement
January-December 2025
Unit: Yuan Currency: RMB
Item Note 2025 2024121
I. Cash flows from operating activities:
Cash received from sales of
goods or rendering of services 654644077.67 847761716.27
Tax refund received -
Other cash received relating to
operating activities 16663123.38 2316255719.73
Sub-total of cash inflows 671307201.05 3164017436.00
Cash paid for goods and
services 352585739.10 269027119.63
Cash paid to and on behalf of
employees 9990745.68 10329838.17
Payments of all types of taxes 83309279.72 83725783.24
Other cash paid relating to
operating activities 3574173211.44 1498276155.48
Sub-total of cash outflows 4020058975.94 1861358896.52
Net cash flows from operating
activities -3348751774.89 1302658539.48
II. Cash flows from investing activities:
Cash received from disposal of
investments -
Cash received from returns on
investments 6030969181.02 1703550000.00
Net cash received from
disposal of fixed assets intangible 106.20 116000.00
assets and other long-term assets
Cash received from disposal of
subsidiaries and other business
Units
Other cash received relating to
investing activities 29237500.00
Sub-total of cash inflows 6060206787.22 1703666000.00
Cash paid to acquire fixed
assets intangible assets and other 4696871.43 3835730.47
long-term assets
Cash paid to acquire
investments 5000000.00 56000000.00
Cash paid to acquire
subsidiaries and other business -
Units
Other cash paid relating to
investing activities 1495000000.00
Sub-total of cash outflows 1504696871.43 59835730.47
Net cash flows from
investing activities 4555509915.79 1643830269.53
III. Cash flows from financing activities :
Cash received from capital
contribution -
Cash received from borrowings 2500000000.00
Cash received relating to other
financing activities 3096132075.49 1998113207.54
Sub-total of cash inflows 5596132075.49 1998113207.54
Cash repayments of amounts 3005000000.00 1000000000.00122
borrowed
Cash payments for interest
expenses and distribution of 3803460386.58 3906804882.30
dividends or profits
Other cash payments relating
to financing activities -
Sub-total of cash outflows 6808460386.58 4906804882.30
Net cash flows from
financing activities -1212328311.09 -2908691674.76
IV. Effect of foreign
exchange rate changes on cash -
V. Net increase in cash and
cash equivalents -5570170.19 37797134.25
Add: Opening balance of cash
and cash equivalent 52196041.75 14398907.50
VI. Closing balance of cash
and cash equivalent 46625871.56 52196041.75
Legal representative: Fan Hongwei
Person in charge of financial function: Liu Xuefen
Head of Accounting Agency (Prepared by): Zheng Minxia123
Consolidated Statement of Changes in Equity
January-December 2025
Unit: Yuan Currency: RMB
2025
Equity attributable to owners of the parent company
Paid-i Other equity
Item n instruments
Other Undis Minority Total
capita Capita Less: compr Specif Surplu Gener interest owners'ehens
l (or l Treas ic s al risk
tribut Subtot
Prefer Perpe s equity
Share Other reserv ury ive reserv reserv reserv
ed Others al
red tual profit
capita s e shares incom e e eshares bonds s
l)) e
I. Balance at end 1884 3617
of previous year 7039 5170 -2638 2792 1087 4653 633990997 1521. 4344 3911 183855 63417562
86.00600.5045.0516.57818.0
17724
5.1272.12817.2431
Add: Changes in
accounting
policies
Correction of
errors
Others
II. Balance in
beginning of year 7039
1884
5170-263827921087
361763399
0997600.51521.43443911
46531772418385563417562
86.003045.0516.57
818.0
15.12
72.12817.24
III. Movement 3457 -9500 9070 1652 3327 33741over the year (“- - - - - 5569. - 7123. 8409. 3063. 3364 36356. -42797 3373708“for decrease) 00 12 32 72 37.23 15 3.43 382.72(I) Total
comprehensive - - - - - -
-9500--707469795-4279769791477123.582375264.3.43290.98124
income 12 87.53 41
(II) Owner’s
contributions and 3457- - - - 5569. - - - - - 34575 34575569decrease of 00 569.00
-.00
capital
1. Capital
contribution from - - - - - - - - - - - - -
owner
2. Increase in
owners’ equity
resulted from - - - - - - - - - - - - -
other equity
instruments
3. Increase in
owners’ equity 3457
resulted from - - - - 5569. - - - - - 34575 34575569
share-based 00 569.00
-.00
payments
4. Others - - - - - - - - - - - - -
(III) 1652 -3747 -3730
Appropriation of - - - - - - - - 3063. 2459 72288 - -3730722
profits 72 50.30 6.58 886.58
1. Transfer to 1652 -1652
surplus reserve - - - - - - - - 3063. 3063. - - -
7272
2. Transfer to
general risk -
reserve
3. Distribution to -3730 -3730
owners (or - - - - - - - - - 7228 72288 - -3730722
shareholders) 86.58 6.58 886.58
4. Others - - - - - - - - - - - - -
(IV) Transfer - - - - - - - - - - - - -125
within equity
1. Capital reserve
converting into
share capital (or - - - - - - - - - - - - -
Share capital)
2. Surplus reserve
converting into
share capital (or - - - - - - - - - - - - -
Share capital)
3. Surplus reserve
cover the deficit - - - - - - - - - - - - -
4. Changes of
equity from the
revaluation of - - - - - - - - - - - - -
defined benefit
plan
5. Other
comprehensive
income transfer to - - - - - - - - - - - - -
retained earnings
6. Others - - - - - - - - - - - - -
(V) Specific 9070
reserve - - - - - - - 8409. - - 90708 90708409
32409.32
-.32
1. Appropriation 3216 32164
for the year - - - - - - - 4198 - - 1988.4 - 32164198
8.4888.48
2. Used in the 2309 23093
year - - - - - - - 3357 - - 3579.1 - 23093357
9.1669.16
(VI) Others - - - - - - - - - - - - -
IV. Balance at end 7039
of year 0997 - - -
1887--12133699110339506677317957566791271974688645185914119903136098.69199.96126
86.00169.54.164.3780.29255.21.27
34
2024
Equity attributable to owners of the parent company
Paid-i Other equity
n instruments Other
Item capita Capita Less: compr Specif Surplu Gener Minority
Total
l (or l Treas ehens ic s al risk
Undistr Subtot
Prefer Perpe interests
owners'
Share Other reserv ury ive reserv reserv reserv
ibuted Others al equity
red tual
capita s e shares incom e e e
profits
shares bonds e
l)
I. Balance at end 1876
of previous year 70390997 3586
-96241093995333094
653.0581218776628259992616128
599985
62314.0
86.00176.9883.521.371.91
40107.36
26.706
Add: Changes in
accounting
policies
Correction of
errors
Others
II. Balance in 1876
beginning of year 7039 3586 -9624 1093 9953 33094 5999850997 176.9 653.0 5812 1877 66282
59992616128
86.0083.521.371.9140107.36
62314.0
826.706
III. Movement 8158 -1675 1698 9207 30799 3406over the year ( “- 4423. 6867. 8532 2345. 90996. 77621 122242 341900“for decrease) 55 96 1.53 20 10 8.42 84.76 0503.18(I) Total -1675 70435 7026 943865 703625
comprehensive 6867. 68223. 81135 8.93 0014.57127
income 96 60 5.64
(II) Owner’s 8158 81584
contributions and 4423. 423.5 278562 843700
decrease of capital 55 5 5.83 49.38
1. Capital
contribution from 730000 730000
owner 0.00 0.00
2. Increase in
owners’ equity
resulted from
other equity
instruments
3. Increase in
owners’ equity 7707
resulted from 0049. 77070 770700
share-based 38 049.3 49.38
payments 8
4. Others 4514
374.14514-45143
7374.1774.17
(III) 9207 -3963 -3871
Appropriation of 2345. 57722 50488 -387150
profits 20 7.50 2.30 4882.30
1. Transfer to 9207
surplus reserve 2345. -92072
20345.20
2. Transfer to
general risk
reserve
3. Distribution to -3871 -3871
owners (or 50488 50488 -387150
shareholders) 2.30 2.30 4882.30
4. Others128
(IV) Transfer
within equity
1. Capital reserve
converting into
share capital (or
Share capital)
2. Surplus reserve
converting into
share capital (or
Share capital)
3. Surplus reserve
cover the deficit
4. Changes of
equity from the
revaluation of
defined benefit
plan
5. Other
comprehensive
income transfer to
retained earnings
6. Others
(V) Specific 1698 16988
reserve 8532 5321. 169885
1.5353321.53
1. Appropriation 3923 39235
for the year 5924 9242. 392359
2.8080242.80
2. Used in the year 2224 22247
73923921.222473
1.2727921.27
(VI) Others
IV. Balance at end 7039 1884 -2638 2792 1087 36174 63399 183855 634175129
of year 0997 5170 1521. 4344 3911 65381 1772 72.12 62817.2
86.00600.5045.0516.578.0145.124
3
Legal representative: Fan Hongwei
Person in charge of financial function: Liu Xuefen
Head of Accounting Agency (Prepared by): Zheng Minxia
Parent Company Statement of Changes in Owners' Equity
January-December 2025
Unit: Yuan Currency: RMB
2025
Paid-in Other equity instruments Other
Item capital Capital Less:treasury compreh Special Surplus
Undistrib Total
(or Share Preferred Perpetual reserve uted
capital)) stock bonds
other shares ensive reserves Reserve equityincome profit
1. Balance at the end of 7039099 241429 390925
the previous year 786.00 - - - 78843.3 - - -
302897488154
40446.977288.31
96364.6
2
Add: Changes in
accounting policies - - - - - - - - - - -
Correction of prior period
errors - - - - - - - - - - -
Others - - - - - - - - - - -
2. Balance at the 7039099 241429 302897 488154 390925
beginning of this year 786.00 - - - 78843.3 - - -4 0446.97 7288.31
96364.6
2
3. Increase/decrease
amount in this period - - - - - - - - 616520 181796 243448(decrease is indicated by 705.95 3466.98 4172.93
“-”)
(I) Total comprehensive
income - - - - - - - - -
616520616520
7059.517059.51130
2. Owners’ capital
contribution and capital - - - - - - - - - - -
reduction
1. Common stock
contributed by owners - - - - - - - - - - -
2. Capital invested by
holders of other equity - - - - - - - - - - -
instruments
3. Amount of share-based
payment recorded in - - - - - - - - - - -
owners' equity
4. Others - - - - - - - - - - -
-43472
(III) Profit distribution - - - - - - - - 616520 -373072705.95 43592.53 2886.58
1. Withdrawal of surplus - - - - - - - - 616520 -616520reserves 705.95 705.95 -
2. Distribution to owners -37307
(or shareholders) - - - - - - - - - 22886.5
-373072
82886.58
3. Others - - - - - - - - - - -
(IV) Internal transfer of
owners’ equity - - - - - - - - - - -
1. Capital reserve
converted into capital (or - - - - - - - - - - -
share capital)
2. Transfer surplus
reserves to increase - - - - - - - - - - -
capital (or share capital)
3. Surplus reserves to
make up for losses - - - - - - - - - - -
4. Carry forward retained
earnings for changes in - - - - - - - - - - -131
defined benefit plans
5. Other comprehensive
income carried forward - - - - - - - - - - -
to retained earnings
6. Others - - - - - - - - - - -
(V) Special reserves - - - - - - - - - - -
1. Extraction of this issue - - - - - - - - - - -
2. Use in this issue - - - - - - - - - - -
(VI) Others - - - - - - - - - - -
IV. Ending balance of this 7039099 241429 364549 669951 415270
period 786.00 - - - 78843.3 - - -4 1152.92 0755.29
80537.5
5
2024
Paid-in Other equity instruments Other
Item capital Capital Reduce:treasury compreh Special Surplus
Undistrib
(or share Preferred Perpetual reserve ensive reserves reserve uted
Total
Other equity
capital) stock bonds Stocks income profit
1. Balance at the end of 7039099 241429 408074
the previous year 786.00 78843.3
281330681205
44057.664666.80
37353.8
0
Add: Changes in
accounting policies
Correction of prior
period errors
other
2. Balance at the 7039099 241429 281330 681205 408074
beginning of this year 786.00 78843.34 4057.66 4666.80
37353.8
0
3. Increase/decrease -19305
amount in this period 215666 07378.4 -171484
(decrease is indicated by 389.31 9 0989.18132
“-”)
(I) Total comprehensive 215666 215666
income 3893.12 3893.12
2. Owners’ capital
contribution and capital
reduction
1. Common stock
contributed by owners
2. Capital invested by
holders of other equity
instruments
3. Amount of
share-based payment
recorded in owners'
equity
4. Others
-40871
(III) Profit distribution 215666389.31 71271.6
-387150
14882.30
1. Withdrawal of surplus 215666 -215666
reserves 389.31 389.31
2. Distribution to owners -38715 -387150
(or shareholders) 04882.30 4882.30
3. Others
(IV) Internal transfer of
owners’ equity
1. Capital reserve
converted into capital (or
share capital)
2. Transfer surplus
reserves to increase
capital (or share capital)133
3. Surplus reserves to
make up for losses
4. Carry forward retained
earnings for changes in
defined benefit plans
5. Other comprehensive
income carried forward
to retained earnings
6. Others
(V) Special reserves
1. Extraction of this issue
2. Use in this issue
(VI) Others
IV. Ending balance of this 7039099 241429 390925
period 786.00 78843.3
302897488154
40446.977288.31
96364.6
2
Legal representative: Fan Hongwei
Person in charge of financial function: Liu Xuefen
Head of Accounting Agency (Prepared by): Zheng Minxia134
III. Company information
1. Company profile
√适用□不适用
Hengli Petrochemical Co. Ltd. (hereinafter referred to as the Company or Hengli Petrochemical)
Formerly known as Dalian Rubber & Plastics Machinery Co. Ltd. (hereinafter referred to as "Dalian
Rubber & Plastics") the company changed its name to its current name on May 27 2016. The
Company was founded on 9 March 1999. The Company's shares were listed on the Shanghai Stock
Exchange on 20 August 2001 with stock name: Hengli Petrochemical and stock code: 600346. The
unified social credit code of the Company is 912102001185762674 and the registered address of the
Company is OSBL Project-Public Works Office Building No.298 Changsong Road Lingang Industrial
Zone Changxing Island Dalian Liaoning Province. The legal representative is Fan Hongwei. The
Company’s registered capital is RMB 7039099786.00 with total number of shares of 7039099786
shares with par value of RMB 1 each including 7039099786 shares of tradable A shares without any
restricted conditions.On 27 January 2016 China Securities Regulatory Commission approved the Company’s majorasset restructuring through document “Approval of Dalian Rubber & Plastics Machinery Co. Ltd.’ smajor asset restructuring and issue shares to Hengli Group Co. Ltd. to raise capital for assetspurchasing” (Securities Regulatory approval [2016] No.187). The major asset restructuring includes:
(1) DXS’s previous holding company Dalian State-owned Assets Investment and Operation Group Co.Ltd. (hereinafter referred to as ”DGJ”) transferred 200202495 shares (29.98% of DXS’s total capital) ofDXS’s shares to Hengli Group Co. Ltd. (hereinafter referred to as ”Hengli Group”) with a price of RMB
5.8435 per share;(2) DXS sold all assets and liabilities as of 30 June 2015 to Dalian Yinghui Machinery
Manufacturing Co. Ltd. and received cash as consideration;(3) The Company issued 1906327800
shares by private placement to acquire 85% shares in Jiangsu Hengli Chemical Fiber Co. Ltd.(hereinafter referred to as ”Hengli Chemical Fiber”) which were held by Hengli Group DechengliInternational Group Co. (hereinafter referred to as the ”Dechengli”) Jiangsu Hegao Investment Co. Ltd.(hereinafter referred to as ”Hegao Investment”) and Hailaide international investment Ltd. (hereinafterreferred to as ”Hailaide”) and paid in cash to acquire 14.99% shares of Hengli Chemical Fiber which
were held by Hegao investment. The issuance of shares mentioned above were verified by Ruihua
Certified Public Accountants (LLP) and issued capital verification reports Ruihua YanZi No.33030006
[2016] . After the issuance of shares the number of total outstanding shares of the Company increased
to 2574114642 shares;(4) The Company issued 251572300 shares by private placement to Jiangsu
Soho Investment Group Co. Ltd. Xiamen Xiangyu Co. Ltd. and other six specific investors to raise
supporting funds for this assets purchasing. The issuance of shares in above was verified by Ruihua
Certified Public Accountants (LLP) and issued capital verification reports Ruihua Yan Zi No.33030014
[2016] . After the issuance of shares the number of total outstanding shares of the Company increased
to 2825686942 shares.On 31 January 2018 according to the ”Approval on Purchase of Assets by issuance of shares toFan Hongwei and others and Raising of Supporting Funds by Hengli Petrochemical Co. Ltd.” (Zheng
Jian Xu Ke [2018] No.235) issued by China Securities Regulatory Commission the Company
implemented the assets restructuring which included (1) The Company issued 1719402983 shares by
private placement to Fan Hongwei Hengneng Investment (Dalian) Co. Ltd. (hereinafter referred toas ”Hengneng Investment”) and Hengfeng Investment (Dalian) Co. Ltd. (hereinafter referred toas ”Hengfeng Investment”) to acquire 100% shares of Hengli Investment (Dalian) Co. Ltd. (hereinafterreferred to as ”Hengli Investment”) and 100% shares of Hengli Petrochemical (Dalian) Refining Co. Ltd.(hereinafter referred to as ”Hengli Refining”). The share issuance mentioned above were verified by
Ruihua Certified Public Accountants (LLP) and issued capital verification reports Ruihua YanZi
No.33050001 [2018] . After the issuance of shares the number of total outstanding shares of the
Company increased to 4545089925 shares; (2) The Company issued 507700000 shares by private
placement to Ping An Asset Management Co. Ltd. Beixin Ruifeng Fund Management Co. Ltd. and
other six specific investors to raise supporting funds for this asset purchasing. The share issuance
mentioned above were verified by Ruihua Certified Public Accountants (LLP) and issued capital135
verification reports Ruihua Yan Zi No.33050002 [2018]. After the issuance of shares the number of
total outstanding shares of the Company increased to 5052789925 shares.On 30 April 2019 the Company’s annual shareholders meeting of 2018 resolved the ”Proposal ofthe Company’s profit distribution and conversion of capital reserve to share capital of 2018”. Based on
the total number of outstanding shares of 4965774651 shares (being total shares of 5052789925
shares deducted by 87015274 share of stock repurchased) capital reserve is converted to share
capital by issuance of 0.4 shares for each share held by all shareholders and the total shares increased
by 1986309861 shares. Share registration date was 26 June 2019. After the increment in shares the
number of total outstanding shares of the Company increased to 7039099786 shares.The primary organizational structure of the Company: In accordance with the provisions of
national laws and regulations and the Company's articles of association a standardized multi-level
governance structure consisting of shareholders’ general meeting the board of directors and the
management has been established; the board of directors has strategy committee audit committee
and remuneration committee nomination committee and the board office. The Company has sales
department purchasing department general manager's office personnel department production
department quality control department finance department securities department and other major
functional departments.The Company engages in petrochemical industry. The business scope is: production of chemical
products (excluding licensed chemical products); sales of chemical products (excluding licensed
chemical products); sales of petroleum products (excluding hazardous chemicals); sales of plastic
products; sales of synthetic materials; sales of rubber products; wholesale of hardware products; sales
of metal chains and other metal products; sales of metal materials; sales of metal ores; sales of
non-metallic minerals and products; information consulting services (excluding licensed information
consulting services); enterprise management consulting; sales of coal and products; sales of textiles
and raw materials; leasing of non-residential real estate; leasing services (excluding licensed leasing
services); domestic trade agency; offshore trade operations. The main products are refining chemical
products PTA polyester products etc.The financial statements and notes to the financial statements have been approved to issue by
the Board of Directors on 13th April 2026.IV. Basis of preparation of financial statements
1. Compilation basis
The financial statements of the Company are prepared on going concern basis and in compliance
with Accounting Standards for Business Enterprises and guidelines interpretations and other relatedprovisions promulgated by the Ministry of Finance (collectively “Accounting Standards for BusinessEnterprises”). In addition the Company also discloses relevant financial information according to
Information Disclosures Regulations for Companies that Offering Shares in Public No.15 - General
Provision of Preparing Financial Report (revised in 2014) issued announced by China Securities
Regulatory Commission.
2. Going concern
√适用□不适用
The Company has no events or circumstances that have caused significant doubts about the
assumption of going concern within 12 months after the end of the reporting period.V. Significant accounting policies and accounting estimates
Specific accounting policies and accounting estimates:
√适用□不适用
Based on the actual characteristics of our production and operation and in accordance with the
relevant accounting standards our company and its subsidiaries have specified several specific
accounting policies and accounting estimates for transactions and events such as impairment of136
accounts receivable depreciation of fixed assets amortization of intangible assets and revenuerecognition. Specific accounting policies refer to the note to financial statements such as “SignificantAccounting Policies and Accounting Estimates - Accounts Receivable” “Significant Accounting Policiesand Accounting Estimates - Fixed Assets” “Significant Accounting Policies and Accounting Estimates -Intangible Assets” and “Significant Accounting Policies and Accounting Estimates - Revenue”.
1. Statement of compliance with accounting standards for business enterprises
The financial statements have been prepared in compliance with the Accounting Standard for
Business Enterprises to truly and completely reflect the Company’s financial positions operating
results and cash flows.
2. Accounting period
The fiscal year runs from January 1 to December 31 of the Gregorian calendar.
3. Operating cycle
√适用□不适用
The normal business cycle refers to the period from the purchase of assets for processing to the
realization of cash or cash equivalents. The Company considers 12 months as an operating cycle and
apply it as a standard for the liquidity of assets and liabilities.
4. Functional currency
The Company and domestic subsidiaries use RMB (“RMB”) as functional currency. Overseas
subsidiaries of the Company determine its functional currency as US dollar in accordance with its
primary economic environment of the business location and converted into RMB in preparation of
consolidated financial statements.The financial statements of the Company have been prepared in RMB.
5. Method for determining the importance criteria and the basis for selection
√适用□不适用
Item Importance criteria
Important construction in progress The book value at the end of the accounting period
is more than 1% of the total assets
Important prepayments The ending balance accounts for more than 0.5% oftotal assets
Important accounts payable The ending balance accounts for more than 0.5% oftotal assets
Important contractual liabilities The ending balance accounts for more than 0.5% oftotal assets
Significant other payables The ending balance accounts for more than 0.5% oftotal assets
Important non-wholly owned subsidiaries Net assets account for more than 0.5% ofconsolidated net assets.Important investments The amount involved exceeded 500 million yuan
6. Accounting treatment for business combinations under common control and those under
different control
√适用□不适用137
A business combination is a transaction or event that brings together two or more separate
entities into one reporting entity. Business combinations are classified into business combinations
involving enterprises under common control and business combinations not involving enterprises
under common control.
1．Business combinations involving enterprises under common control
A business combination involving enterprises under common control is a business combination in
which all of the combining enterprises are ultimately controlled by the same party or parties both
before and after the combination and that control is not transitory.Assets acquired and liabilities assumed by acquirer in the business combination are measured at
their carrying amounts of the acquiree in the consolidated financial statements of the ultimate
controlling party at the combination date except for adjustments due to different accounting policies.The difference between the carrying amount of the consideration paid for the combination (or total
par value of shares issued) and the carrying amount of the net assets acquired is adjusted to capital
reserve. If the capital reserve is not sufficient to absorb the difference any excess is adjusted to
retained earnings.Business combinations involving entities under common control achieved in stages and involved
multiple transactions the difference between the carrying amount of the net assets acquired and the
sum of carrying amount of investment prior to combination date and carrying amount of new
considerations paid for the combination at the combination date is adjusted to capital reserve. If the
capital reserve is not sufficient to absorb the difference any excess is adjusted against retained
earnings. The profit or loss other comprehensive income and changes in other owner’s equity
recognized by the acquirer during the period from the later of initial investment date and the date that
the acquirer and acquiree both under common ultimate control to the combination date are offset the
opening retained earnings or profit for loss for the current period in the comparative statements
except for other comprehensive income arising from the remeasurement of the net benefit or net
asset change of the defined benefit plan by the investee.
2．Business combinations involving enterprises not under common control
A business combination involving enterprises not under common control is a business
combination in which all of the combining enterprises are not ultimately controlled by the same party
or parties both before and after the business combination.Where the cost of combination exceeds the acquirer’s interest in the fair value of the acquiree’s
identifiable net assets the difference is recognized as goodwill. Where the cost of combination is less
than the acquirer’s interest in the fair value of the acquiree’s identifiable net assets firstly the acquirer
shall reassess the measurement of the fair values of the acquiree’s identifiable assets liabilities and
contingent liabilities and measurement of the cost of combination and then if the cost of combination
is still less than the acquirer’s interest in the fair values of the acquiree’s identifiable net assets after
that reassessment the acquirer shall recognize the remaining difference immediately in profit or loss
for the current period.If at the date of combination or the end of the current period due to various factors the fair
value of each asset paid as consideration for the combination or the fair value of the identifiable assets
and liabilities of the purchased party is obtained during the combination cannot be reasonably
determined the Company calculates the value of business combination based on the temporarily
determinable value. If within the 12 months after acquisition additional information can prove the
existence of related information at acquisition date and the contingent consideration need to be
adjusted it is deemed to happen on the date of combination and retrospectively adjusted. Any
adjustment of consideration for the combination or value of identifiable assets or liabilities made after
12 months of combination the adjustment should follow Accounting Standard for Business Enterprise
No.28 – Changes in accounting policies accounting estimates and correction of error.Where the temporary difference obtained by the acquirer was not recognized due to inconformity
with the conditions applied for recognition of deferred income tax if within the 12 months after
acquisition additional information can prove the existence of related information at acquisition date
and the expected economic benefits on the acquisition date arising from deductible temporary
difference by the acquiree can be achieved relevant income tax assets can be recognized and goodwill138
can be adjusted accordingly. If the goodwill is not sufficient the difference is recognized as profit or
loss for the current period. Apart from above the differences is taken into profit or loss of the current
period if the recognition of deferred income tax assets is related to the business combination.For business combinations involving entities not under common control achieved in stages that
involves multiple transactions the Company determine whether the multiple transactions belongs to a
single transactions in accordance with accounting standards. If the terms conditions and economic
impact of the disposal comply with any cases as following the multiple transactions should be
accounted as if a single transaction. * These transactions are concluded simultaneously or affected
by each other. * To reach a complete business results these transactions is as a whole. * Whether
one transaction happening or not is up to another transaction.* To assess one transaction separately
is not economical but assess along with other transactions they are economically justified.In a business combination achieved in stages and considered as a single transaction the
transactions should be regarded all as one acquisition. For those cannot be considered as a single
transaction the combination cost is the sum of consideration paid at acquisition date and fair value of
the acquiree's equity investment held prior to acquisition date; the cost of equity of the acquiree held
prior to acquisition date shall be re-measured at the fair value at acquisition date the difference
between the fair value and the carrying amount shall be recognized as investment income or loss for
the current period. Other comprehensive income and changes of investment equity under the equity
method of accounting related with acquiree's equity held prior to acquisition date shall be transferred
to investment profit or loss for current period at acquisition date besides there is other comprehensive
income incurred by the changes of net assets or net liabilities due to the remeasurement of defined
benefit plan.
3．Transaction costs for business combination
The overhead for the business combination including the expenses for audit legal services
valuation advisory and other administrative expenses are recorded in profit or loss for the current
period when incurred. The transaction costs of equity or debt instruments issued as the considerations
of business combination are included in the initial recognition amount of the equity or debt
instruments.
7. Judgment criteria for control and basis of preparation of consolidated financial statements
√适用□不适用
1．Scope of consolidated financial statements
The scope of consolidated financial statements is determined on the basis of control. Control
exists when the Company has power over the investee; is exposed or has rights to variable returns
from its involvement with the investee; and has the ability to use its power to affect its returns. A
subsidiary is an entity that is controlled by the Company (including enterprise a portion of an investee
as a deemed separate entity and structured entity controlled by the enterprise).
2．Preparation of the consolidated financial statements
The consolidation scope of consolidated financial statements is determined on the basis of control
including the financial statements of the Company and all of its subsidiaries. In preparing consolidated
financial statements subsidiaries adopt the same accounting period and accounting policies as those of
the Company.All assets liabilities interests income fees and cash flows resulting from intra-group transactions
are eliminated on consolidation in full.Where a subsidiary or business has been acquired through a business combination involving
enterprises under common control in the reporting period the subsidiary or business is deemed to be
included in the consolidated financial statements from the date they are controlled by the ultimate
controlling party. Their operating results and cash flows are included in the consolidated income
statement and consolidated cash flow statement respectively from the date they are controlled by the
ultimate controlling party. During the reporting period the opening balance of the consolidated
balance sheet was being adjusted and the related items of the comparative statement were being
adjusted as if the reporting entity has exercised control since the time when the ultimate controlling
party began to control.139
Where a subsidiary has been acquired through a business combination involving entities not
under common control the opening balances of the consolidated balance sheet shall not be adjusted
for the subsidiary or the business the subsidiary's revenue expenses and profit shall be included in the
consolidated income statement and cash flows shall be included in the consolidated cash flow
statement from the acquisition date to the end of the reporting date.The shareholders’ equity of the subsidiaries that is not attributable to the Company is presented
under shareholders’ equity in the consolidated balance sheet as minority interest. The portion of net
profit or loss of subsidiaries for the period attributable to minority interest is presented in the
consolidated income statement under the profit or loss attributable to minority interest. When the
amount of loss attributable to the minority shareholders of a subsidiary exceeds the minority
shareholders’ portion of the opening balance of owners’ equity of the subsidiary the excess amount
shall be allocated against minority interest.
3．Acquiring minority interests of subsidiary and disposal of interests in subsidiary without losing
control
Where the Company acquires a minority interest from a subsidiary’s minority shareholders or
disposes of a portion of an interest in a subsidiary without a change in control the transaction is
treated as equity transaction and the book value of shareholder’s equity attributed to the Company
and to the minority interest is adjusted to reflect the change in the Company’s interest in the
subsidiaries. The difference between the proportion interests of the subsidiary’s net assets being
acquired or disposed and the amount of the consideration paid or received is adjusted to the capital
reserve (share premium) in the consolidated balance sheet with any excess adjusted to retained
earnings.
4．Losing control over the subsidiary
When the Company disposes of a subsidiary the income expenses and profit of the subsidiary
from the beginning of current period to the disposal date are included in the consolidated income
statement; the cash flows of the subsidiary from the beginning of current period to the disposal date is
included in the consolidated cash flow statement. For the loss of control over a subsidiary due to
disposal of a portion of the equity investment or other reasons the remaining equity is measured at
fair value on the date when the control is lost. The difference arising from the sum of consideration
received for disposal of equity interest and the fair value of remaining equity interest over the share of
net assets of the former subsidiary calculated continuously since the purchase date based on the
shareholding percentage before disposal are recognized as investment income in the period when the
control is lost. Other comprehensive income related to equity investment in the subsidiary is
accounted for on the same accounting treatment as direct disposal of relevant asset or liability by the
acquiree at the time when the control is lost (i.e. to be transferred to investment income except for
the changes arising from remeasuring net assets or net liabilities of defined benefit plan of the
subsidiary using the equity method). The remaining equity interests are measured subsequentlyaccording to ”Accounting Standard for Business Enterprises No.2 – Long-term Equity Investments”or ”Accounting Standard for Business Enterprises No.22 – Recognition and Measurement of FinancialInstruments”. For details please refer to the note “Significant Accounting Policies and AccountingEstimates - Long-term Equity Investments” or “Significant Accounting Policies and AccountingEstimates - Financial Instruments”.
5．Disposal of equity investment by stage-up until losing control
When the Company disposes of equity investment in a subsidiary by a stage-up approach with
multiple transactions until the control over the subsidiary is lost it shall determine whether these
multiple transactions related to the disposal of equity investment in a subsidiary until the control over
the subsidiary is lost belong to “A single transaction”.For those arrangements qualified as a single transaction the carrying amount of long-term equity
investments relating to each transaction of disposal is derecognized the difference between the
consideration received and the carrying amount of disposed long-term equity investments is
recognized as other comprehensive income and finally is recognized in profit or loss for the current
period at the date of losing control.140
For those arrangements are not regarded as a single transaction the accounting treatment shall follow
“disposal of interests in subsidiary without losing control” and “for the loss of control over a subsidiarydue to disposal of a portion of the equity investment or other reasons” as appropriate. The difference
between each consideration received and the share of carrying value of net assets in proportion to
disposed portion of shareholding percentage in the subsidiary is recognized in capital reserve as an
equity transaction. Capital reserve is not transferred to profit or loss for the current period when losing
control.
8. Classification of joint arrangements and accounting treatment of joint operations
√适用□不适用
A joint arrangement is an arrangement in which two or more parties exercise joint control. Based
on the rights and obligations arising from its involvement in joint arrangements the Company classifies
joint arrangements as either joint operations or joint ventures.A joint venture is a joint arrangement whereby the Company has rights only to the net assets of
the arrangement. The Company accounts for its investments in joint ventures using the equity methodin accordance with the accounting policy for “Long-term Equity Investments Accounted for under theEquity Method” as described in the “Significant Accounting Policies and Estimates – Long-term EquityInvestments” section of these notes.A joint operation is a joint arrangement whereby the Company has rights to the assets and
obligations for the liabilities relating to the arrangement. The Company recognizes the following items
in relation to its interest in a joint operation and accounts for them in accordance with the relevant
Accounting Standards for Business Enterprises:
1. Recognize the assets held individually by the Company and its share of jointly held assets;
2. Recognize the liabilities incurred individually by the Company and its share of jointly incurred
liabilities;
3. Recognize revenue from the sale of its share of output produced by the joint operation;
4. Recognize its share of revenue generated from the sale of output by the joint operation;
5. Recognize the expenses incurred individually by the Company and its share of expenses
incurred by the joint operation.When the Company invests or sells assets to a joint operation as a joint venture (the assets do not
constitute a business the same below) or purchases assets from a joint operation before such assets
are sold to a third party the Company only recognizes the portion of the profit or loss resulting from
the transaction that belongs to the other parties to the joint operation. If such assets suffer an asset
impairment loss that complies with the provisions of Accounting Standards for Enterprises No. 8 -
Impairment of Assets the Company recognizes the loss in full for the case of the Company investing or
selling assets to the joint operation; and recognizes the loss according to the share borne for the case
of the Company purchasing assets from the joint operation.
9. Recognition criteria of cash and cash equivalents
Cash as presented in cash flow statement refers to cash on hand and deposit on demand for
payment. Cash equivalents refer to short-term (generally refers to the expiration within 3 months from
the purchase date) highly liquid investments that can be readily converted to cash and that are subject
to an insignificant risk of changes in value.
10. Foreign currency transactions and translation of financial statements prepared in foreign
currencies
√适用□不适用
1．Foreign currency transactions
Foreign currency transactions are translated into the functional currency of the Company at the
spot exchange rates (as announced by the People’s Bank of China) on the dates of the transactions.However the Company’s foreign currency exchange business or transactions involving foreign currency141
conversion are converted into the amount of the recording currency according to the actual exchange
rate.
2．Translation method for foreign currency monetary and non-monetary items
At the balance sheet date Items in foreign currencies are translated using the spot exchange rates
at the balance sheet date. All the resulting exchange differences are taken to profit or loss except for
(1) those relating to foreign currency borrowings specifically for acquisition and construction of assets
qualified for capitalisation which are capitalised in accordance with the principle of capitalisation of
borrowing costs; (2) non-monetary foreign currency items are designated as part of the hedge of the
Company’s net investment of a foreign operation are recognized in other comprehensive income until
the net investment is disposed of at which the cumulative amount is reclassified to the profit or loss
for the current period; and (3) non-monetary foreign currency items measured at historical cost shall
still be translated at the spot exchange rates prevailing on the transaction dates while the amounts
denominated in the functional currencies do not change.Non-monetary foreign currency items measured at historical cost shall still be translated at the
spot exchange rates prevailing on the transaction dates while the amounts denominated in the
functional currencies do not change. Non-monetary foreign currency items measured at fair value are
translated at the spot exchange rates prevailing on the date on which the fair values are determined.The resulting exchange differences are recognized in profit or loss or as other comprehensive income
for the current period depending on the nature of the non-monetary item.
3．Translation of foreign currency financial statements
The financial statements denominated in foreign currency of a foreign operation are translated to
RMB in compliance with the following requirements: assets and liabilities on the balance sheet are
translated at the spot exchange rate prevailing at the balance sheet date; owner's equity items except
for “undistributed profits” are translated at the spot exchange rates at the period on which such items
arose; income and expenses items in the income statement are translated at the average exchange
rate for the period in which the transaction occurred. The undistributed profits brought forward are
reported at the prior year’s closing balance; the undistributed profits as at the end of the year are
presented after translated the profit appropriation items; differences between the aggregate of assetand liability items and owners’ equity items are recognized as ”translation differences arising on thetranslation of financial statements denominated in foreign currencies” in other comprehensive income.On disposal of foreign operations and loss of control exchange differences arising from the translation
of financial statements denominated in foreign currencies related to the disposed foreign operations
which has been included in owners’ equity in the balance sheet shall be transferred to profit or loss in
whole or in proportionate share in the period in which the disposal took place.The cash flow statement is translated at the average exchange rate on the period of cash flow.The impact of exchange rate changes on cash is presented separately as Effect of changes in exchangerates on cash and cash equivalents” in the cash flow statement.
11. Financial instruments
√适用□不适用
A financial instrument is a contract that creates a financial asset for one party and a financial
liability or equity instrument for another party. Financial instruments include financial assets financial
liabilities and equity instruments.
1．Classification recognition and measurement of financial assets
(1) Recognition and initial measurement of financial assets and liabilities
Financial asset or financial liability will be recognized when the Company became one of the
parties under a financial instrument contract. For the purchase or sale of financial assets in a
conventional way the Company recognizes the assets received and liabilities assumed on the
transaction day.Financial assets and liabilities are measured at fair value upon initial recognition. For financial
assets measured at fair value through profit or loss relevant transaction costs are directly recognized
in profit or loss for the period. For other categories of financial assets and liabilities relevant
transaction costs are included in the amount initially recognized. For accounts receivable that do not142
have a significant financing component at initial recognition the transaction price determined inaccordance with the revenue recognition method described in this note “Significant Accounting Policiesand Accounting Estimates - Revenue” is initially measured.
(2) Classification and measurement of financial assets
The Company classifies the financial assets according to the business model for managing the
financial assets and characteristics of the contractual cash flows as follows: financial assets measured
at amortized cost financial assets measured at fair value through other comprehensive income and
financial assets measured at fair value through profit or loss.
1) Financial assets measured at amortized cost
A financial asset is measured at amortized cost if it meets both of the following conditions: *
The Company’s business model for managing such financial assets is to collect contractual cash flows;
* The contractual terms of the financial asset stipulate that cash flows generated on specific dates
are solely payments of principal and interest on the principal amount outstanding.Subsequent to initial recognition such financial assets are measured at amortized cost using the
effective interest method. A gain or loss on a financial asset that is measured at amortized cost shall be
recognized in profit or loss for the current period when the financial asset is derecognized amortized
using the effective interest method or with impairment recognized.For financial assets at amortized costs it is recognized on the initially recognized amount adjusted
by: (1) after deducting the already paid principal; (2) after multiplying or subtracting the accumulative
amount of amortization incurred from amortizing the balance between the initially recognized amount
and the amount of the maturity date by employing the actual interest rate method; and (3) after
deducting the impairment losses that have actually incurred (applicable to financial assets only).The effective interest method refers to the method whereby the post-amortization costs and the
interest incomes of different installments or interest expenses are calculated according to the effective
interests of the financial asset or financial liabilities (including a set of financial assets or financial
liabilities). The effective interest refers to the interest rate used to cash the future cash flow of a
financial asset or financial liability within the predicted term of existence or within a shorter applicable
term into the current carrying amount of the financial asset or financial liability. When determining the
effective interest the future cash flow shall be predicted on the basis of taking into account all the
contractual stipulations concerning the financial asset or financial liability (including the right to repay
the loans ahead of schedule call options similar options etc.) but the future credit losses shall not be
taken into account.The Company recognizes interest income based on the calculation of financial asset book balance
multiplied by the effective interest rate except for the following circumstances: * For purchased or
originated financial assets that have incurred credit impairment from the initial recognition their
interest income is determined on the financial asset amortization costs and credit-adjusted effective
interest rates; * For the purchased or originated financial assets without credit impairment but
become credit impaired in the subsequent period the interest income is determined according to the
amortized cost and effective interest rate of the financial asset. If the financial instrument has no credit
impairment due to the improvement of its credit risk in the subsequent period and this improvement
can be objectively related to an event that occurs after the application of the above regulations
interest income should be determined by multiplying the effective interest rate and the financial asset
book balance.
2) Financial assets measured at fair value through other comprehensive income
Financial asset is classified as measured at fair value through other comprehensive income if it
meets both of the following conditions: * The Company’s business model for managing such
financial assets is achieved both by collecting collect contractual cash flows and selling such financial a.* The contractual terms of the financial asset stipulate that cash flows generated on specific dates
are solely payments of principal and interest on the principal amount outstanding.Subsequent to initial recognition such financial assets are subsequently measured at fair value.Interest calculated using the effective interest method impairment losses or gains and foreign
exchange gains and losses are recognized in profit or loss for the current period and other gains or
losses are recognized in other comprehensive income. On derecognition the cumulative gain or loss143
previously recognized in other comprehensive income is reclassified from other comprehensive income
to profit or loss.For non-trading equity instrument investment the Company can irrevocably designate the
financial assets measured at fair value through other comprehensive income. Such designation is made
on individual basis of each non-trading equity instrument investment which also qualified as equity
instruments in the issuer’s perspective. Subsequent to such designation dividend (except for return of
portion of investment costs) is recognized as profit or loss for the current period other gains or losses
(including exchange gain or loss) are recognized in other comprehensive income. On derecognition the
cumulative gain or loss previously recognized in other comprehensive income is reclassified from other
comprehensive income to profit or loss.
3) Financial assets measured at fair value through profit or loss
The Company classifies the financial assets other than those measured at amortized cost and
measured at fair value through other comprehensive income as financial assets measured at fair value
through profit or loss. Upon initial recognition the Company irrevocably designates certain financial
assets that are required to be measured at amortized cost or at fair value through other
comprehensive income as financial assets measured at fair value through profit or loss in order to
eliminate or significantly reduce accounting mismatch.Subsequent to initial recognition such financial assets are subsequently measured at fair value
any differences are gains or losses recorded in profit or loss for the current year.
(3) Classification and measurement of financial liabilities
The Company’s financial liabilities includes financial liabilities measured at fair value through
profit or loss financial liabilities that arise when a transfer of a financial asset does not qualify for
derecognition or continuing involvement financial guarantee contracts and financial liabilities at
amortized cost.
1) Financial liabilities measured at fair value through profit or loss
Financial liabilities measured at fair value through profit or loss includes trading financial liabilities
(including financial liabilities with embedded derivatives) and designated financial liabilities measured
at fair value through profit or loss. In a business combination involving enterprises not under common
control if the Company as a buyer recognizes a financial liability from the contingent consideration
the financial liability shall be accounted for at fair value through profit or loss.After initial recognition financial liabilities measured at fair value through profit or loss are
subsequently measured at fair value. Any gains or losses generated are recognized in profit or loss for
the current period.The amount of change in fair value of designated financial liabilities measured at fair value
through profit or loss due to changes in the Company’s own credit risk is included in other
comprehensive income unless the treatment causes or expands accounting mismatches in profit or loss.Other changes in fair value of this financial liability are included in profit or loss for the current period.Upon derecognition the accumulated gains or losses previously included in other comprehensive
income are transferred out of other comprehensive income and included in retained earnings.
2) Financial liabilities that arise when a transfer of a financial asset does not qualify for
derecognition or continuing involvementSuch financial liabilities are measured in accordance with the method described in “Recognitionbasis and measurement method of transfer of financial assets” in “Significant accounting policies andaccounting estimates — Financial instruments” of this note.
3) Financial guarantee contracts
Financial guarantee contracts are contracts that require the issuer to make specified payments to
reimburse the contract holder for a loss the holder incurs because a specified debtor fails to make
payment when due in accordance with the terms of a debt instrument.Financial guarantee contracts are not belonging to the above 1) or 2) they are subsequently
measured at the higher of the following: * the amount of loss provision determined in accordance
with “Impairment of financial instruments” in “Significant accounting policies and accounting estimates— Financial instruments” of this note; * the balance of the initial recognition amount less the
accumulated amortization determined in accordance with the revenue recognition method described
in “Significant accounting policies and accounting estimates — Revenue” of this note.144
4) Financial liabilities at amortized cost
Apart from the above 1) 2) or 3) the Company classifies the remaining financial liabilities as
financial liabilities at amortized cost.Such financial liabilities are measured at amortized cost using the effective interest rate method
after initial recognition and the resulting gains or losses are included in profit or loss for the current
period when they are derecognized or amortized in accordance with the effective interest rate
method.
(4) Equity instruments
Equity instruments refer to contracts that can prove the ownership of the Company's remaining
equity in assets after deducting all liabilities. The Company issues (including refinancing) repurchases
sells or cancels Equity instruments as a change in equity. Transaction costs related to equity
transactions are deducted from equity. The Company's various distributions to equity instruments
holders (excluding stock dividends) reduce shareholder equity. The Company does not recognize the
fair value changes of equity instruments.
(5) Derivative instruments and embedded derivative instruments
Derivative financial instruments include forward exchange contract currency exchange rate swap
agreement interest rate swap agreement and foreign currency option contract etc. Derivative financial
instruments are initially measured at the fair value of the date a derivative contract entered into and
subsequently measured at their fair value. Any gains or losses arising from changes in fair value are
directly recognized to profit or loss for the current period.Embedded derivatives refer to derivatives embedded in non-derivatives (ie host contracts). For
the hybrid contract composed of embedded derivatives and the host contract if the host contract is a
financial asset the Company does not split the embedded derivative from the hybrid contract but
applies the hybrid contract as a whole to the Company's accounting policies in classification of financial
assets. If the host contract included in the hybrid contract is not a financial asset and meets the
following conditions at the same time the Company will split the embedded derivative from the hybrid
contract and treat it as a separate derivative:
1) The economic characteristics and risks of embedded derivatives are not closely related to the
economic characteristics and risks of the host contract.
2) A separate instrument with the same terms as the embedded derivative meets the definition of
derivative.
3) The hybrid contract is not measured at fair value and its changes are included in profit or loss
for the current period for accounting treatment.If the embedded derivative is split from the hybrid contract the Company will account for the host
contract of the hybrid contract in accordance with the applicable accounting standards. If the Company
cannot reliably measure the fair value of the embedded derivative according to the terms and
conditions of the embedded derivative the fair value of the embedded derivative is determined based
on the difference between the fair value of the hybrid contract and the fair value of the host contract.After using the above method if the fair value of the embedded derivative on the acquisition date or
the subsequent balance sheet date cannot be measured separately the Company designates the
hybrid contract as a whole as financial assets at fair value through profit or loss.
2．Recognition and measurement of transfer of financial assets
Transfer of financial assets refers to the transference or deliverance of financial assets (or its cash
flows) to the other party (the transferee) other than the issuer of financial assets. The derecognition of
financial assets means that the Company transfers the previously recognized financial assets from its
balance sheet.The financial assets that meet one of the following conditions will be derecognized by the
Company: (1) the contractual right to receive cash flows of the financial asset is expired; (2) the
financial asset has been transferred and almost all risks and rewards of ownership of the financial
asset transferred to the transferee; (3) the financial asset has been transferred by the Company
foregone the control of the financial assets although the Company has neither transferred nor retained
almost all the risks and rewards of ownership of the financial asset.If the Company neither transfers nor retains almost all the risks and rewards of ownership of
financial assets and retains control of the financial assets it will continue to recognize the relevant145
financial assets to the extent that they are continuing to be involved in the transferred financial assets
and recognizes the relevant liabilities. The degree of continuing involvement in the transferred financial
assets refers to the level of risk on the exposed impact in changes in value of financial asset to the
Company.If the transfer of an entire financial asset satisfies the conditions for derecognition the difference
between the amounts of the following two items are included in profit or loss: (1) the carrying
amount of the transferred financial asset as of the date of derecognition; (2) the sum of consideration
received from the transfer of the financial asset and the accumulative amount of the changes of the
fair value originally included in other comprehensive income proportionate to the transferred financial
asset (financial assets transferred refer to debt instrument investments at fair value through other
comprehensive income). If the transfer of financial asset partially satisfies the conditions to
derecognition the entire carry amount of the transferred financial asset is between the portion which
is derecognized and the portion which is not apportioned according to their respective relative fair
value and the difference between the amounts of the following two items are included into profit or
loss: (1) the carrying amount of the portion which is derecognized; (2) the sum of consideration of
the portion which is derecognized and the portion of the accumulative amount of the changes in the
fair value originally included in other comprehensive income which is corresponding to the portion
which is derecognized (financial assets transferred refer to debt instrument investments at fair value
through other comprehensive income). For non-trading equity instruments designated by the Company
to be measured at fair value and whose changes are included in other comprehensive income if the
whole or part of the transfer meets the conditions for derecognition the difference calculated
according to the above method is included in retained earnings.
3．Conditions for derecognition of financial liabilities
If the current obligation of a financial liability (or part of it) has been discharged the Company
derecognizes the financial liability (or part of it). If the Company (borrower) and the lender sign an
agreement to replace the original financial liability by assuming a new financial liability and the
contract terms of the new financial liability and the original financial liability are substantially different
the original financial liability is derecognized and a new financial liability is recognized simultaneously.If the Company makes substantial amendments to the original financial liabilities (or part of them)
contract terms the original financial liabilities shall be derecognized and a new financial liability shall
be recognized in accordance with the revised terms.If the financial liability (or part of it) is derecognized the Company shall include the difference
between its book value and the consideration paid (including non-cash assets transferred out or
liabilities assumed) into profit or loss for the current period. If the Company repurchases part of its
financial liabilities the book value of the financial liabilities as a whole will be allocated according to
the proportion of their respective fair values at the repurchase date and the total fair value at the
repurchase date. The difference between the book value allocated to the derecognized portion and the
consideration paid (including non-cash assets transferred out or liabilities assumed) is included in profit
or loss for the current period.
4. Determination of the fair value of financial instruments
For the method for determining the fair value of financial assets and financial liabilities see this
note “Significant Accounting Policies and Accounting Estimates — Fair Value”.
5. Impairment of financial instruments
The Company accounts for impairment of financial assets at amortized cost contract assets debt
instrument investment at fair value through other comprehensive income lease receivables andfinancial guarantee contracts as mentioned in “Classification and subsequent measurement of financialliabilities” in “Significant Accounting Policies and Accounting Estimates - financial instruments” of this
note. ECLs are the weighted average of credit losses of financial instruments weighted by the risk of
default. Credit losses refer to the difference between all contractual cash flows receivable according to
the contract and discounted according to the original effective interest rate and all cash flows expected
to be received i. e. the present value of all cash shortages.For purchased or originated financial assets that have suffered credit impairment the Company
only recognizes the cumulative changes in expected credit losses for the entire duration of the period
since initial recognition as loss provisions on the balance sheet date.146For receivables or contract assets formed by transactions regulated by “Accounting Standards forBusiness Enterprises No. 14 – Revenue” and lease receivables regulated by “Accounting Standards forBusiness Enterprises No. 21 – Leases” the Company uses a simplified measurement method to
measure the loss allowance based on the expected credit loss during the lifetime period.For financial instruments other than the above measurement methods the Company measures
loss allowance in accordance with the general method and assesses on each balance sheet date
whether its credit risk has increased significantly since initial recognition. If the credit risk has not
significantly increased since initial recognition and is in the first stage the Company measures the loss
provision based on the expected credit loss amount of the financial instrument for the next 12 months.If the credit risk has significantly increased since initial recognition but has not yet experienced credit
impairment it is in the second stage and the Company measures the loss provision based on the
expected credit loss amount for the entire duration. If the financial asset has experienced credit
impairment since initial recognition it is in the third stage and the Company measures the loss
provision based on the expected credit loss amount for the entire duration.The expected credit loss for lifetime period refers to the expected credit loss caused by all possible
default events during the entire expected duration of the financial instrument. Expected credit loss in
the next 12 months refers to the event of financial instrument default that may occur within 12 months
after the balance sheet date (if the expected duration of the financial instrument is less than 12
months then the expected duration) which is a portion of expected credit losses for the entire
duration.The Company considers all reasonable and reliable information including forward-looking
information by comparing the risk of default of a financial instrument on the balance sheet date with
the risk of default on the initial recognition date to determine the relative changes in default risk of the
financial instrument during the expected lifetime and to assess whether the credit risk of financial
instruments has increased significantly since initial recognition. For financial instruments that cannot
obtain sufficient evidence of a significant increase in credit risk at a reasonable cost at the level of
individual instruments the Company considers whether the credit risk has increased significantly on a
portfolio basis. If the Company determines that a financial instrument has only a low credit risk on the
balance sheet date it is assumed that the credit risk of the financial instrument has not increased
significantly since initial recognition.The Company remeasures the expected credit losses on each balance sheet date and the
resulting increase or reversal of the loss allowance is included in profit or loss for the current period as
an impairment loss or gain. For financial assets measured at amortized cost the loss allowance offsets
the book value of the financial asset presented in the balance sheet; for debt instrument investments
measured at fair value through other comprehensive income the Company recognizes loss allowance
in other comprehensive income and does not offset the book value of the financial asset presented in
the balance sheet.
6. Offset of financial assets and financial liabilities
Financial assets and liabilities are offset and the net amount reported in the balance sheet when
there is a legally enforceable right to offset the recognized amounts and there is an intention to settle
on a net basis or realize the asset and settle the liability simultaneously. Otherwise financial assets and
financial liabilities are separately shown in the balance sheet and not allowed to offset.
12. Fair value
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date. The Company measures
relevant assets or liabilities at fair value on the assumption that the orderly transaction to sell the asset
or transfer the liability takes place in the principal market for the asset or liability. In the absence of a
principal market the Company assumes that the transaction takes place in the most advantageous
market for the asset or liability. The principal market (or the most advantageous market) is the market
that the Company can access at the measurement date.The Company utilizes valuation techniques that are appropriate in the circumstances and for
which sufficient data and other information are available to support them taking into account the147
ability of market participants to generate economic benefits by using the asset in its highest and best
use or by selling the asset to other market participants that would use the asset in its highest and best
use. Priority is given to the use of relevant observable inputs and unobservable inputs are used only
when observable inputs are not available or are impracticable to obtain.Assets and liabilities measured at fair value or for which fair value is disclosed in the financial
statements are categorized within the fair value hierarchy based on the lowest level input that is
significant to the fair value measurement as a whole: Level 1 inputs are unadjusted quoted prices in
active markets for identical assets or liabilities that the Company can access at the measurement date;
Level 2 inputs are inputs other than Level 1 inputs that are directly or indirectly observable for the
asset or liability including quoted prices for similar assets or liabilities in active markets quoted prices
for identical or similar assets or liabilities in inactive markets and other observable inputs such as
observable interest rates and yield curves during normal quotation intervals; Level 3 inputs are
unobservable inputs for the asset or liability including interest rates that cannot be directly observed
or validated by observable market data stock volatilities future cash flows of decommissioning
obligations assumed in a business combination and financial forecasts developed using the Company's
own data. At each balance sheet date the Company reassesses the assets and liabilities recognized in
the financial statements that are measured at fair value on a recurring basis to determine whether any
transfers have occurred between the levels of the fair value hierarchy.
13. Notes receivable
√适用□不适用
Method for determining expected credit losses on notes receivable and the accounting treatment
method
The Company determines the expected credit losses of notes receivable and conducts accountingtreatment in accordance with the simplified measurement method described in “Impairment ofFinancial Instruments” in “Significant Accounting Policies and Accounting Estimates - FinancialInstruments” of this note. On the balance sheet date the credit losses of notes receivable are
measured based on the present value of the difference between the contractual cash flow receivable
and the expected cash flow receivable. The Company conducts separate impairment tests on notes
receivable with significantly different credit risk characteristics and estimates the expected credit
losses. The remaining notes receivable are divided into several portfolios based on their credit risk
characteristics. With reference to historical credit loss experience combined with current conditions
and considering forward-looking information the expected credit losses are estimated on a portfolio
basis.The categories and determination basis for bad debt portfolio provisions based on credit risk
characteristics
√适用□不适用
Name of group Determination basis
Bank acceptance bills group Acceptors are banks with low credit risk
Commercial acceptance bills group Acceptors are enterprises with high credit risk
A method for calculating the aging of credit risk characteristics based on aging
□适用√不适用
Judgment criteria for single provision of bad debts
√适用□不适用
The Company will conduct separate impairment tests for accounts receivable with significantly
different credit risk characteristics such as significantly deteriorating credit conditions of the debtor148
low probability of future payment and credit impairment that have already occurred.
14. Accounts receivable
√适用□不适用
The Company determines the expected credit losses of accounts receivable and makes accountingtreatment in accordance with the simplified measurement method described in “Impairment ofFinancial Instruments” in “Significant Accounting Policies and Accounting Estimates - FinancialInstruments” of this note. On the balance sheet date the Company measures the credit losses of
accounts receivable based on the present value of the difference between the contractual cash flow
that should be received and the cash flow expected to be received. The Company will conduct separate
impairment tests on accounts receivable with significantly different credit risk characteristics and
estimate expected credit losses. The remaining accounts receivable are divided into several portfolios
based on credit risk characteristics and expected credit losses are estimated on a portfolio basis
taking into account historical credit loss experience current conditions and forward-looking
information.he categories and determination basis for bad debt portfolio provisions based on credit risk
characteristics
√适用□不适用
Name of group Determination basis
Aging group Accounts receivable with similar credit riskcharacteristics by aging
Group of related parties in the scope of Receivables from related parties within the scope
consolidation of consolidation have similar credit riskcharacteristics
Group of high credit rating Accounts receivable of Fortune 500 clients withincredit term
A method for calculating the aging of credit risk characteristics based on aging
√适用□不适用
The Company counts and calculates the aging of accounts receivable based on the principle of
first-in first-out.Determination of provision for bad debts according to individual items Judgment criteria for
individual items
√适用□不适用
The Company will conduct separate impairment tests for accounts receivable with significantly
different credit risk characteristics such as significantly deteriorating credit conditions of the debtor
low probability of future payment and credit impairment that have already occurred.
15. Receivable financing
√适用□不适用
The Company determines the expected credit losses of receivables financing and makesaccounting treatment in accordance with the general method described in “Impairment of FinancialInstruments” in “Significant Accounting Policies and Accounting Estimates - Financial Instruments” of
this note. On the balance sheet date the Company measures the credit loss of receivables financing
based on the present value of the difference between the contractual cash flow due and the expected
cash flow received. When the expected credit loss information of a single item of receivables financing
cannot be assessed at a reasonable cost the Company divides receivables financing into several groups149
based on the characteristics of credit risk. On the basis of referring to historical credit loss experience
combining the current situation and considering forward-looking information the Company estimates
the expected credit losses on group basis.The categories and determination basis for bad debt portfolio provisions based on credit risk
characteristics
√适用□不适用
Name of group Determination basis
Including bank acceptance bills with low credit
Group of low credit risk risk letters of credit and other receivables
financing with low credit risk characteristics
A method for calculating the aging of credit risk characteristics based on aging
□适用√不适用
Judgment criteria for single provision for bad debt reserves
√适用□不适用
The Company will conduct separate impairment tests for accounts receivable with significantly
different credit risk characteristics such as significantly deteriorating credit conditions of the debtor
low probability of future payment and credit impairment that have already occurred.
16. Other receivables
√适用□不适用
The Company determines and accounts for the expected credit losses of other receivables in
accordance with the general method described in “Impairment of Financial Instruments” in “SignificantAccounting Policies and Accounting Estimates - Financial Instruments” of this note. On the balance
sheet date the credit losses of other receivables are measured at the present value of the difference
between the contractual cash flows to be collected and the cash flows expected to be collected. The
Company conducts impairment tests on other receivables with significantly different credit risk
characteristics separately and estimates expected credit losses; the remaining other receivables are
divided into several groups according to their credit risk characteristics and the expected credit losses
are estimated on a group basis with reference to historical credit loss experience combined with
current conditions and considering forward-looking information.The categories and determination basis for bad debt portfolio provisions based on credit risk
characteristics
√适用□不适用
Name of group Determination basis
Aging group Other receivables with similar credit riskcharacteristics by aging
Group of related parties in the scope of Receivables from related parties within the scope of
consolidation consolidation have similar credit risk characteristics
Group of related parties outside the scope of Receivables from related parties outside the scope
consolidation of consolidation have similar credit riskcharacteristics
Other receivables such as government grants
Group of government receivables receivable and various tax refunds have similar
credit risk characteristics150
A method for calculating the aging of credit risk characteristics based on aging
√适用□不适用
The Company counts and calculates the age of other receivables based on the principle of
first-in-first-out.Judgment criteria for single provision for bad debt reserves
√适用□不适用
The Company will conduct separate impairment tests for accounts receivable with significantly
different credit risk characteristics such as significantly deteriorating credit conditions of the debtor
low probability of future payment and credit impairment that have already occurred.
17. Inventories
√适用□不适用
Inventory category issue pricing method inventory system amortization method for low-value
consumables and packaging materials
√适用□不适用
(1) Inventories include finished products or commodities held for sale in daily activities in-process
products in the production process materials and materials consumed in the production process or the
provision of labor services in-transit materials and subcontracting processing materials.
(2) The inventory obtained by the Company is measured at actual cost. (1) The cost of purchased
inventory is the purchase cost of the inventory and the inventory cost obtained through further
processing is composed of the purchase cost and processing cost. (2) The book value of inventory
obtained in settlement under debt restructuring is determined on the fair value of the forfeited
creditor's rights and the relevant taxes and fees that can be directly attributed to the inventory when
the inventory reaches the current position and status. (3) Under the presumption that the exchange of
non-monetary assets has commercial substance and the fair value of the assets swapped in or out can
be reliably measured the book value of inventory swapped in the exchange of non-monetary assets is
usually determined on the basis of the fair value of the assets swapped out unless there is strong
evidence that the fair value of the swapped assets is more reliable; for non-monetary asset exchanges
that do not meet the above presumption the book value of the swapped assets and related taxes
payable are used as the cost of swapped in inventory. (4) The inventory acquired by the combination of
enterprises under common control is determined based on the book value of the acquiree; the
inventories acquired by the combination of enterprises not under common control are determined by
the fair value.
(3) The cost of inventories issued by enterprises is measured by the weighted average method.
(4). Amortization method for low-value consumables and packaging materials
Low-value consumables are one-off amortized when taken for use.Packaging materials are one-off amortized when taken for use.
(5) The inventory system is a perpetual inventory system.
Recognition criteria and accrual method for the provision for inventory impairment
√适用□不适用
(1) Recognition criteria and accrual method for the provision for inventory impairment
On the balance sheet date inventory is measured at the lower of cost and net realizable value.The net realizable value of inventories is the amount after the estimated selling price of inventories
minus the estimated costs to be incurred to completion the estimated selling expenses and related
taxes. When determining the net realizable value of inventories based on the reliable evidence
obtained taking into account the purpose of holding the inventory and the impact of events after the
balance sheet date except for clear evidence that the market price on the balance sheet date is
abnormal the net realizable value of inventory items at the end of the current period is determined on
the basis of the market price on the balance sheet date of which:151
1) The inventory of finished goods commodities and materials used for sale such as commodities
directly used for sale is determined by the amount of the estimated selling price of the inventory
minus the estimated selling expenses and related taxes during normal production and operation ;
2) For the inventory of materials that need to be processed in the normal production and
operation process the net realizable value is determined based on the estimated selling price of the
finished product minus the estimated cost at the time of completion the estimated selling expenses
and related taxes. On the balance sheet date if a part of the same inventory has a contract price
agreement and other parts do not have a contract price the net realizable value is determined
separately and compared with its corresponding cost to determine the amount of provision for or
reversal of inventory impairment.At end of period the provision for inventory impairment is calculated according to a single
inventory item; but for a large number of inventories with low Unit prices the provision for inventory
impairment is calculated according to the inventory category; For the product series produced and sold
in the same region has the same or similar end user and difficult to measure the inventory separately
from other items the provision for inventory impairment is combined.After accruing the provision for inventory impairment if the factors that previously reduced the
value of the inventory have disappeared and the net realizable value of the inventory is higher than its
book value it will be reversed within the original provision for inventory impairment and reversal
amount is included in profit or loss for the current period.The category and basis for determining the combined inventory falling price reserves as well as the
basis for determining the net realizable value of different types of inventories
□适用√不适用
The calculation method and basis for determining the net realizable value of inventory based on the
combination of inventory age and confirmed net realizable value
□适用√不适用
18. Contract assets
□适用√不适用
19. Non-current assets or disposal groups held for sale
□适用√不适用
Recognition criteria and accounting treatment methods for non-current assets or disposal groups
classified as held for sale
□适用√不适用
Recognition criteria and presentation method for discontinued operations
□适用√不适用
20. Long-term equity investment
√适用□不适用
Long-term equity investments referred to in this section refer to Long-term equity investments
that the Company has control joint control or significant influence over the investee including equity
investments in subsidiaries joint ventures and associates.
1. Judgment criteria for joint control and significant influence
Joint control refers to the common control of an arrangement in accordance with the relevant
agreement and related activities of the arrangement must be agreed upon by the parties sharing
control rights before they can make decisions. If the Company and other joint venturers jointly exercise
joint control over the investee and jointly control the investee and have rights to the net assets of the152
investee the investee is a joint venture of the Company. When judging whether there is joint control
the protective rights enjoyed are not considered.Significant influence refers to the power to participate in the decision-making of an enterprise's
financial and operating decisions but it cannot control or jointly control the formulation of these
policies with other parties. If the Company can exert significant influence on the investee the investee
is an associate of the Company. When determining whether it can exert significant influence on the
invested Unit consider that the investor directly or indirectly holds the voting shares of the invested
Unit and the current executable potential voting rights held by the investor and other parties are
assumed to be converted into the investee the impact includes the current convertible warrants stock
options and convertible corporate bonds issued by the investee.
2. Determination of investment cost of long-term equity investments
(1) If the combination is formed under a business combination under common control the merger
party pays cash transfers non-cash assets assumes debt or issues equity securities as the acquisition
consideration and the share of owner’s equity of the acquiree on the consolidated financial
statements of the ultimate controlling party on the acquisition date as its initial investment cost. The
difference between the initial investment cost of long-term equity investments and the cash paid
non-cash assets transferred the book value of the debt assumed or the total face value of the shares
issued adjusts the capital reserve; if the capital reserve is insufficient to offset the retained earnings
are adjusted. Step by step acquisition of the equity of the acquiree under common control through
multiple transactions and ultimately forming a business combination under common control it should
be treated separately as whether “single transaction”: if it belongs to a “single transaction” each
transaction is treated collectively as a single transaction on obtaining control rights. If it does not
belong to a “single transaction” the initial investment costs of long-term equity investment is the share
of the book value of the owner’s equity in the acquiree’s consolidated financial statements. The
difference between the cost and the book value of long-term equity investments before the
combination plus the book value of the new consideration paid for the shares on the acquisition date is
adjusted to the capital reserve; if the capital reserve is insufficient to offset the retained earnings are
adjusted. The equity investment held before the acquisition date by equity method or other
comprehensive income recognized for other equity instruments investment is temporarily not subject
to accounting treatment.
(2) If a business combination is not formed under common control the Company determines the
combination cost as the initial investment cost of long-term equity investments according to the
purchase date. The combination cost is the fair value of the assets paid liabilities incurred or assumed
by the purchaser to obtain control of the purchased party on the purchase date and the equity
securities issued. Overhead expenses such as auditing legal services evaluation and consulting and
other related administrative expenses incurred by the purchaser for the business merger are included
in profit or loss for the current period; The transaction cost of the equity securities or debt securities
issued by the purchaser as the combination consideration is included in the initial recognition amount
of equity securities or debt securities. The Company regards the contingent consideration stipulated in
the acquisition agreement as part of the transfer consideration for the business combination and it is
included in the cost of the business combination according to its fair value on the date of purchase. For
a business combination not under common control that is realized step-by-step through multiple
transactions it is determined whether the multiple transactions belong to a “single transaction” in
accordance with the accounting standards for the enterprise. In the case of a “single transaction” eachtransaction is treated as a whole transaction that obtains control. If it does not belong to a ”singletransaction” the initial investment cost of long-term equity investments calculated based on the cost
method shall be the sum of the original holding equity amount of the acquiree’s equity investment plus
the newly added investment cost; If the equity is accounted for using the equity method the relevant
other comprehensive income will not be accounted for temporarily; if the original equity investment is
invested by other equity instruments the difference between the fair value and the carrying amount
and the cumulative change in fair value originally included in other comprehensive income are
transferred to directly to retained earnings.
(3) Except for long-term equity investments formed by business combination other equity
investments are initially measured at cost: if they are obtained by paying cash the actual purchase153
price is used as their initial investment cost; if they are obtained by issuing equity securities they are
stated at the fair value of equity securities as its initial investment cost. The expenses directly related
to the issuance of equity securities are determined in accordance with the relevant provisions of
Accounting Standards for Enterprises No.37-Presentation of Financial Instruments. On the presumption
that the fair value of the commercial substance and swapped-in assets or swapped-out assets can be
reliably measured the initial investment cost of long-term equity investments swapped in for
non-monetary assets are based on the fair value of swapped assets and related taxes payable unless
there is solid evidence that the fair value of the swapped assets is more reliable; for non-monetary
asset exchanges that do not meet the above presumption the carrying amount of the swapped assets
and related taxes payable shall be used as the Initial investment cost of long-term equity investments.The initial investment cost of long-term equity investments obtained through debt restructuring is
determined on the basis of the fair value of the waived claims. The expenses taxes and other
necessary expenses directly related to the acquisition of long-term equity investments are also
included in the investment cost.For the additional investment that can exert significant influence on the invested Unit or
implement joint control but does not constitute control the cost of long-term equity investments is theoriginal holding determined in accordance with “Accounting Standards for Business EnterprisesNo.22-Recognition and Measurement of Financial Instruments”. The sum of the fair value of equity
investment plus the newly added investment cost is used as the initial investment cost under equity
method. If the originally held equity investment is classified as other equity instruments investment
the difference between its fair value and carrying amount and the cumulative fair value change
originally included in other comprehensive income should be transferred to directly to retained
earnings.
3. Subsequent measurement and recognition of profit or loss of long-term equity investments
(1) Long-term equity investments measured at cost
The Company uses the cost method to account for long-term equity investments in subsidiaries.Apart from the cash dividends or profits declared but not yet paid that included in the acquisition of
the investment the Company recognizes the investment income in accordance with the cash dividends
or profits declared to be issued by the investee in the current period.
(2) Long-term equity investments under equity method
For long-term equity investments in associates and joint ventures the equity method is used.If the initial investment cost of long-term equity investments calculated by the equity method is
greater than the fair value share of the identifiable net assets of the investee when investing the initial
investment cost of long-term equity investments will not be adjusted; the initial investment cost of
long-term equity investments is less than the fair value share of the investee’s identifiable net assets at
the time of purchase the difference should be included in profit or loss for the current period while
adjusting the cost of long-term equity investments. After acquiring long-term equity investments if the
accounting policy and accounting period adopted by the investee are inconsistent with the Company
the financial statements of the investee shall be adjusted according to the Company's accounting
policies and accounting period and recognize the investment gain or loss and other comprehensive
income etc. The investment income and other comprehensive income shall be the share of the net
profit or loss and other comprehensive income of the investee and the carrying amount of long-term
equity investments is adjusted; The Company recognizes its share of the investee’s net profits or losses
based on the fair values of the investee’s individual separately identifiable assets at the time of
acquisition after making appropriate adjustments thereto in conformity with the accounting policies
and accounting periods of the Company. According to the profits or cash dividends declared to be
distributed by the investee the carrying amount of long-term equity investments is reduced
accordingly; adjust the carrying amount of long-term equity investments and include in owners' equity.The unrealized internal transaction gains and losses that occur between the Company and associates
and joint ventures are calculated based on the ratio enjoyed by the Company and are offset and
investment income is recognized on this basis. Unrealized internal transaction losses with the investee
that belong to assets impairment loss are fully recognized.When the Company confirms that it should share the losses of the investee it will be processed in
the following order: First offset the carrying amount of Long-term equity investments. Secondly if154
the carrying amount of long-term equity investments is not enough to offset continue to recognize the
investment loss and offset the carrying amount of long-term receivable items to the limit of carrying
amounts of other long-term equity that substantially constitute net investment in the investee. After
the above-mentioned treatment if the Company still undertakes additional obligations according to
the investment contract or agreement the estimated liabilities shall be recognized according to the
obligations assumed and included in the current investment losses. If the investee realizes a net profit
in a later period the Company resumes the recognition of the profit sharing amount after the income
makes up for the unrecognized loss sharing amount.During the period of holding the investment the investee is included in the consolidated financial
statements based on the amount attributable to the investee in the consolidated financial statements'
net profit other comprehensive income and changes in other owners ‘equity.If the Company’s assets invested in joint ventures and associates constitute a business and the
investor acquires long-term equity investments but does not obtain control the fair value of the
investment business is used as the initial basis for the new investment cost of long-term equity
investments. The difference between the initial investment cost and the carrying amount of the
invested business is included in profit or loss for the current period. If the assets sold by the Company
to a joint venture or an associate constitute a business the difference between the consideration
received and the carrying amount of the business shall be included in profit or loss for the current
period. If the assets purchased by the Company from associates and joint ventures constitute businessthey shall be accounted for in accordance with the provisions of “Accounting Standards for BusinessEnterprises No.20-Business Combinations” and the profits or losses related to the transaction shall be
fully recognized.
4. Disposal of long-term equity investments
For the disposal of Long-term equity investments the difference between the Carrying amount
and the actual consideration received shall be included in profit or loss for the current period.
(1) Disposal of long-term equity investments under equity method
For long-term equity investments that are accounted for using the equity method if the remaining
equity after disposal is still accounted for using the equity method when disposing of the investment
the same basis as the investee directly disposes of related assets or liabilities shall be used and the
relevant share of other comprehensive income in the accounting treatment. Owners ‘equity confirmed
by the investee in addition to changes in net profit or loss other comprehensive income and profit
distribution and owners’ equity are carried forward to profit or loss for the current period according to
the sharing.If the joint control or significant influence on the investee is lost due to the disposal of part of the
equity investment etc. the remaining equity after disposal shall be accounted according to the
financial instrument recognition and measurement standards. The difference between the fair value
and carrying of the day when the joint control or significant influence is lost the amount is included in
profit or loss for the current period. The other comprehensive income of the original equity investment
confirmed by the equity method of accounting shall be accounted for on the same basis as the investee
‘s direct disposal of related assets or liabilities when the equity method of accounting is terminated.Owners ‘equity confirmed by the investee in addition to changes in Owners’ equity other than net
profit or loss Other comprehensive income and profit distribution all transferred to profit or loss for
the current period when the equity method of accounting is terminated.
(2) Disposal of long-term equity investments under cost method
Long-term equity investments that are accounted for using the cost method and the remaining
equity is still accounted for using the cost method after disposal. Other comprehensive income
recognized by adopting equity method accounting or financial instrument recognition and
measurement standard accounting before obtaining control of the investee is treated on the same
basis as the invested Unit directly disposes of related assets or liabilities and is treated according to
share of profit or loss for the current period. Changes in owners’ equity other than net profit or loss
other comprehensive income and net profit distribution in the investee’s net assets recognized by the
equity method of accounting are carried forward to profit or loss for the current period according to
the share.155
When the Company can no longer exercise control over an investee due to dilution of
shareholding by issuance of new shares to other investors by the investee but the Company can still
exercise joint control of or significant influence on the investee the difference between the Company’s
share of the increment of net assets in investee by the new shareholding percentage after new share
issuance and the pro-rata portion of carrying value of long term equity investment for the decreased
shareholding percentage is recognized in profit or loss in the current period. The remaining equity
investment is accounted for equity method as if it was acquired since initial acquisition.When the Company can no longer exercise control over an investee due to partial disposal of
equity investment or other reasons and the remaining equity investment after disposal can exercise
joint control of or significant influence over an investee the remaining equity investment is accounted
for under equity method and re-measured by equity method as if it has been acquired since date of
acquisition. Where the remaining equity investment can no longer exercise joint control of or
significant influence over an investee the remaining equity investment is accounted for in accordance
with Accounting Standard for Business Enterprises No.22-Recognization and Measurement of Financial
Instruments and the difference between the fair value and the carrying amount at the date of the loss
of control is charged to profit or loss for the current period.The Company's control over an investee is lost through multiple disposals and the multiple disposals
shall be viewed as one single transaction the multiple disposals is accounted for one single transaction
which result in the Company's loss of control over the investee. Each difference between the
consideration received and the book value of the investment disposed is recognized in other
comprehensive income and reclassified in full to profit or loss at the time when control over the
investee is loss.
21. Investment properties
(1). If the measurement of cost model is adopted:
Depreciation or amortization method
1. Investment properties refer to real estate held to earn rent or capital appreciation or both.
Including land use rights that have been leased land use rights that are held and ready to be
transferred after value-added leased buildings (including buildings used for rent after self-construction
or development activities are completed and future use during construction or development of leased
buildings).
2. Investment properties are initially measured according to cost and subsequent measurement is
made using the cost model. For subsequent expenditures related to Investment properties if the
economic benefits related to the asset are likely to flow in and their costs can be reliably measured
then they are included in the cost of Investment properties. Other subsequent expenditures are
included in profit or loss for the current period when they occur.
3. For Investment Properties measured by the cost model depreciation or amortization is
provided using the same method as fixed assets and intangible assets.
4. When the purpose of Investment properties is changed to self-use from the date of change the
Investment properties are converted into fixed assets or intangible assets and the carrying amount
before conversion is used as the credit value after conversion. When the purpose of self-used real
estate or Inventories is changed to earn rent or capital appreciation from the date of change the Fixed
assets or Intangible assets are converted into Investment properties and converted into Investment
properties measured by the cost model to the carrying amount before conversion As the booked value
after conversion; when converted to Investment properties measured by fair value model the fair
value on the conversion date is used as the booked value after conversion.
5. When Investment Properties are disposed of or permanently withdrawn from use and it is
expected that no financial benefits can be obtained from their disposal the recognition of the
investment properties is terminated. Investment properties sold transferred scrapped or damaged are
deducted from their carrying amount and related taxes and are included in profit or loss for the current
period.156
22. Fixed assets
(1). Recognition conditions
√适用□不适用
Fixed assets refer to tangible assets fulfill the following characteristics: (1) held for the production
of goods provision of labor services lease or operation and (2) the service life exceeds one fiscal year.Fixed assets are recognized if it meets the following conditions: (1) The economic benefits related
to the fixed assets are likely to flow into the enterprise and (2) The cost of the fixed assets can be
measured reliably. Subsequent expenditures related to fixed assets if they meet the above recognition
conditions are included in the cost of fixed assets; those that do not meet the above recognition
conditions are included in profit or loss for the current period when incurred.
(2). Depreciation method
√适用□不适用
Fixed assets commence depreciation when they reach their intended usable state and cease
depreciation upon derecognition or upon classification as non-current assets held for sale. If the
various components of a fixed asset have different useful lives or provide economic benefits to the
enterprise in different patterns different depreciation rates and methods are selected and
depreciation is provided for separately. The depreciation periods and depreciation rates for each
category of fixed assets are as follows:
Category Depreciation Useful life (years) Estimate residual
Annual
method value (%) depreciation rate(%)
Property and Straight line 10-30 5-10 3.00-9.50
buildings method
Specific Straight line 3-20 5-10 4.50-31.67
equipment method
General Straight line 3-15 5-10 6.00-31.67
equipment method
Transportation Straight line 2-15 5-10 6.00-47.50
equipment method
25 Light 3.07
Ship Straight line
Displacement
method Tonnage xExpected scrap
price
Note:
(1) The renovation costs of the fixed assets that meet the capitalization conditions will be accrued
separately in the shorter period of the two renovation periods and the useful life of the fixed assets.
(2) For the fixed assets that have been impaired the cumulative impairment provision of fixed
assets shall be deducted from the calculation of depreciation rate.
(3) The Company shall review the useful life estimated net residual value and depreciation
method of the fixed assets at least at the end of the year.Other instructions:
(1) Fixed assets idle for 3 consecutive months due to underutilization natural disasters etc.
(excluding seasonal idleness) are classified as idle assets. Idle assets are depreciated using the same
method as other assets in their category.
(2) If a fixed asset is held for disposal or is no longer expected to generate economic benefits
through use or disposal it is derecognized and depreciation and impairment charges cease.157
(3) Gains or losses from the disposal of fixed assets (sale transfer retirement or damage) are
calculated as the disposal proceeds minus carrying amount and related taxes and are recognized in
current profit or loss.
(4) Major repair costs incurred during periodic inspections are capitalized as part of the fixed
asset’s cost if they meet the recognition criteria; otherwise they are expensed. Depreciation continues
during major repair intervals.
23. Construction in progress
√适用□不适用
1. Construction in progress while satisfying economic benefits is likely to flow in and costs can be
reliably measured are recognized. Construction in progress is measured at the actual cost incurred
before the construction of the asset reaches its intended status of uses.
2. When Construction in progress reaches the intended status of uses it will be transferred to
fixed assets according to the actual cost of the project. If it has reached the expected usable status but
has not yet completed the settlement of completion it will first be transferred to fixed assets at the
estimated value. After the completion of the final settlement the original provisional valuation will be
adjusted according to the actual cost but the original depreciation will not be adjusted.
3. The specific criteria and timing for the transfer of construction in progress to fixed assets are as
follows:
Item Criteria and time point for conversion to fixed assets
Property and (1) The main construction project and supporting projects have been
buildings substantially completed; (2) The construction project has met the predetermined
design requirements and has been inspected designed constructed and
supervised by various Units; (3) If the construction project has reached the
predetermined usable state but has not yet undergone completion settlement it
will be transferred to fixed assets based on the estimated value of the actual
construction cost from the date of reaching the predetermined usable state.
(1) The relevant equipment and other supporting facilities have been installed;
(2) The equipment that needs to be commissioned or trial-produced can
Special equipment maintain normal and stable operation for a period of time after commissioning;(3) The production equipment can stably produce qualified products; (4) The
equipment has been accepted by the relevant departments of asset
management.
4. If the Company sells the products or by-products produced before the construction project
reaches the expected usable state (hereinafter referred to as trial operation sales) the income and
costs related to the trial operation sales shall be accounted for separately in accordance with the
provisions of “Enterprise Accounting Standard No. 14 - Revenue” and “Enterprise Accounting StandardNo. 1 - Inventories” and included in the current period's profit and loss. Before the relevant products or
by-products produced by the trial operation are sold to the outside they shall be recognized as
inventories in accordance with the provisions of “Enterprise Accounting Standard No. 1 - Inventories”
and recognized as related assets in accordance with the relevant asset recognition conditions in other
relevant enterprise accounting standards.
24. Borrowing costs
√适用□不适用
Borrowing costs including interest on borrowings amortization of discounts or premiums other
relevant expenses and exchange differences due to foreign currency borrowings.
1. Principle of borrowing costs capitalization
Borrowing costs incurred by the Company which can be directly attributed to the acquisition
construction or production of assets that meet the capitalization conditions are capitalized and158
included in the cost of related assets. Other Borrowing costs are recognized as expenses based on the
amount incurred when they occur and are included in profit or loss for the current period.
2. Capitalization period of borrowing costs
(1) When the following conditions are met at the same time capitalization begins: 1) Asset
expenditure has occurred; 2) Borrowing costs have occurred; 3) The purchase construction or
production activities necessary to make the asset reach the intended use or sale state have begun.
(2) Suspension of capitalization: If an asset that meets the conditions of capitalization is
abnormally interrupted during the acquisition construction or production process and the
interruption lasts for more than 3 months the capitalization of Borrowing costs is suspended;
Borrowing costs incurred during the interruption are recognized as current expenses until the
purchase or construction of assets or production activities restart. If the interruption is the necessary
procedure for the acquisition or construction or production of assets that meet the capitalization
conditions to reach the intended status of uses or status of sale borrowing costs will continue to be
capitalized.
(3) Cessation of capitalization: Borrowing costs cease to be capitalized when the assets
purchased or constructed or produced that meet the capitalization conditions reach the intended use
or sale. When part of the assets in the acquisition construction or production of capitalized assets are
completed separately and can be used separately the capitalization of borrowing costs of the partial
assets will be ceased. If each part of the purchased or constructed asset is completed separately but it
cannot be used until it is completed or sold externally the capitalization of borrowing costs shall be
ceased when the asset is completed.
3. Borrowing costs capitalization rate and calculation method of capitalization amount
If specific loans are borrowed for the purchase or construction or production of assets that meet
the capitalization conditions the interest expenses actually incurred in the current period of the
specific loans (including the amortization of discounts or premiums determined in accordance with the
effective interest rate method) minus the amount of interest income obtained from the bank or the
investment income obtained by making a temporary investment by the unused borrowing loans is the
amount of interest that should be capitalized; if the general borrowings are occupied for the purchase
or construction or production of assets that meet the capitalization conditions the weighted average
amount of asset expenditures on the amount of cumulative asset expenditure exceeding the specific
loans is multiplied by the capitalization rate (weighted average interest rate) of the general borrowing
to calculate and determine the amount of interest that should be capitalized for the general borrowing.During the capitalization period the amount of interest capitalized in each accounting period shall not
exceed the amount of interest actually incurred by the relevant borrowings in the current period. The
exchange differences on the principal and interest of foreign currency special borrowings shall be
capitalized during the capitalization period. Other relevant expenses incurred by special borrowings
occur before the assets eligible for capitalization purchased or constructed or produced reach the
intended status of use or sale they are capitalized; Other relevant expenses incurred in general
borrowings are included in profit or loss for the current period when incurred. If there is a discount or
premium on the loans the amount of discount or premium that should be amortized in each
accounting period is determined according to the effective interest rate method and the amount of
interest in each period is adjusted.
25. Biological assets
□适用√不适用
26. Oil and gas assets
□适用√不适用159
27. Intangible assets
(1). Useful lives and the basis for their determination estimation amortization method or review
procedures
√适用□不适用
1. Initial measurement of intangible assets
Intangible assets are initially measured at cost. The cost of externally purchased intangible assets
includes the purchase price related taxes and other expenses directly attributable to the asset for its
intended use. If the payment for the purchase of intangible assets is delayed beyond the normal credit
conditions and is essentially of a financing nature the cost of the intangible assets is determined on the
basis of the present value of the purchase price. Debt restructuring acquires the intangible assets used
by the debtor to pay off debts and the book value is determined on the basis of the fair value of the
waived claims and other costs that can be directly attributed to the tax and other costs incurred in
bringing the asset to its intended use. Intangible assets obtained from debtor to pay off debts under
debt restructuring its book value is determined on the basis of the fair value of the waived claims and
other costs that can be directly attributed to the tax and other costs incurred in bringing the asset to its
intended use. Under the presumption that the exchange of non-monetary assets has commercial
substance and the fair value of the assets exchanged in or out can be reliably measured the intangible
assets exchanged in the swap of non-monetary assets are stated at fair value of the assets swapped
and related taxes as the cost of swapping intangible assets unless there is strong evidence that the fair
value of the swapped assets is more reliable; for non-monetary asset exchanges that do not meet the
above presumption the book value of the swapped assets and related taxes payable are used as the
cost of intangible assets and there is no recognition of any profit or loss.Expenses related to intangible assets are included in the cost of intangible assets if the related
economic benefits are likely to flow into the Company and the costs can be reliably measured.Expenditures for other items other than these are included in profit or loss for the current period when
they occur.The acquired land use rights are usually accounted for as intangible assets. For self-development
and construction of buildings and other buildings related land use rights expenditures and building
construction costs are accounted for as intangible assets and fixed assets respectively. In the case of
purchased properties and buildings the relevant price will be allocated between the land use rights
and the buildings. If it is difficult to allocate them reasonably all of them will be treated as fixed assets.
2. Intangible asset useful life the basis for its determination estimation amortization method or
review procedures
According to the contract rights or other legal rights industry history experience and other
relevant experts to determine a combination of factors reasonably determine the intangible asset can
bring economic benefits for the Company as intangible assets with limited useful life; not Where the
intangible assets are reasonably determined to bring economic benefits to the Company they are
regarded as intangible assets with uncertain service life.For intangible assets with a finite useful life the following factors are usually considered when
estimating the useful life: (1) the usual life cycle of the products produced using the asset and the
information available on the service life of similar assets; (2) technology process etc. The current
situation of the country and the estimation of the future development trend; (3) the market demand
for the products produced by the asset or the provision of labor services; (4) the expected actions of
current or potential competitors; (5) the maintenance of the asset Expected maintenance expenditures
that bring economic benefits and the Company's ability to pay for related expenditures; (6) Relevant
legal regulations or similar restrictions on the asset's control period such as concession periods lease
periods etc . ; (7) There is correlation of the useful life of other assets. The estimated useful life of
intangible assets with finite useful life:
Item Basis of estimated useful life Period (years)
Software Expected benefit period 5160
Item Basis of estimated useful life Period (years)
Patent Expected benefit period 10
Land use rights Registered useful life of land userights 50
Intangible assets with a finite useful life are amortized systematically and rationally within the
useful life according to the expected realization method of the economic benefits related to the
intangible asset. If the expected realization method cannot be reliably determined the straight-line
method is used. Intangible assets with uncertain useful life are not amortized but the useful life of the
intangible assets is reviewed every year and an impairment test is conducted.At the end of each year the Company reviews the useful life and amortization method of
intangible assets with a finite useful life. If it is different from the previous estimate the original
estimate is adjusted and the accounting estimate is changed; it is estimated that an intangible asset
can no longer be given if the enterprise brings future economic benefits the book value of this
intangible asset will be transferred to profit or loss for the current period.
(2). Accounting policy for internal research and development expenditures
√适用□不适用
The expenditures of internal research and development projects are divided into expenditures in
the research phase and expenditures in the development phase. Criteria for dividing research stage
and development stage: the planned investigation stage for acquiring new technologies and
knowledge should be determined as the research stage which has the characteristics of planning and
exploration; The application of research results or other knowledge to a plan or design before
commercial production or use to produce new or substantially improved materials devices products
and other stages should be determined as the development stage which is targeted and likely to
produce results characteristics.Expenditures for the research phase of internal research and development projects are included in
profit or loss for the current period when they occur. Expenses during the development phase of an
internal research and development project that meet the following conditions are recognized as
intangible assets: (1) it is technically feasible to complete the intangible asset so that it can be used
or sold; (2) it is Intention to use or sell; (3) The way in which intangible assets generate economic
benefits including the ability to prove that the products produced using the intangible assets exist in
the market or the intangible assets themselves exist in the market and the intangible assets will be
used internally can prove their usefulness; (4) sufficient technical financial resources and other
resources support to complete the development of the intangible asset and the ability to use or sell the
intangible asset; (5) The expenditure attributable to the development stage of the intangible asset can
be reliably measured. If the above conditions are not met it will be included in profit or loss for the
current period when it occurs; if there is no way to distinguish between research phase expenditure
and development phase expenditure all research and development expenditure incurred will be
included in profit or loss for the current period.If the Company sells products or by-products produced during the research and development
process (hereinafter referred to as trial operation sales) it shall conduct accounting treatment for therelated income and costs of trial operation sales in accordance with the provisions of “AccountingStandards for Business Enterprises No. 14 – Revenue” and “Accounting Standards for BusinessEnterprises No. 1 – Inventory” and include them in the current profit or loss. Before selling the
products or by-products produced during the trial operation they shall be recognized as inventory in
accordance with the provisions of “Accounting Standards for Business Enterprises No. 1 – Inventory”
and they shall be recognized as related assets in accordance with the asset recognition conditions in
other relevant accounting standards for business enterprises.161
28. Long-term asset impairment
√适用□不适用
Long-term equity investments investment property and productive biological assets measured
using the cost model fixed assets construction in progress oil and gas assets right-of-use assets
intangible assets goodwill and other long-term assets are subject to impairment if there are indication
of the following:
1. The market price of assets has fallen sharply in the current period and the decline is
significantly 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
in which the assets are located will undergo major changes in the current period or in the near future
thereby adversely affecting the enterprise;
3. The market interest rate or other market investment return rate has increased in the current
period which affects the discount rate of the enterprise's calculation of the present value of the
expected future cash flow resulting in a substantial reduction in the asset's recoverable amount;
4. There is evidence that the asset has become obsolete or its physical has been damaged;
5. Assets have been or will be idle terminated or planned to be disposed of in advance;
6. Evidence from internal reports of the Company indicates that the economic performance of the
asset has been or will be lower than expected such as the net cash flow created by the asset or the
realized operating profit (or loss) is far below (or higher than) the expected amount etc.;
7. Other indications that assets may have been impaired.
If there is any indication of impairment of the above-mentioned long-term assets on the balance
sheet date an impairment test shall be conducted. If the result of the impairment test indicates that
the recoverable amount of the asset is lower than its book value the impairment provision shall be
made according to the difference and included in the impairment loss. The recoverable amount is the
higher of the net value of the asset's fair value minus disposal costs and the present value of the asset's
expected future cash flow. The method for determining the fair value is detailed in this note
“Significant Accounting Policies and Accounting Estimates — Fair Value”; the disposal expenses include
legal expenses related to the disposal of assets related taxes handling fees and direct expenses
incurred to bring the asset to a saleable status; the expected future cash flow of the asset is
determined according to the present value of expected future cash flow generated during the
continuous use of the asset and at the time of final disposal and an appropriate discount rate is
selected to determine the discounted amount.The asset impairment provision is calculated and determined on the basis of individual assets. If it
is difficult to estimate the recoverable amount of an individual asset the asset group to which the
asset group belongs determines the recoverable amount of the asset group. An asset group is the
smallest asset portfolio that can independently generate cash inflows.The goodwill presented separately in the financial statements will be allocated to the asset group
or combination of asset groups that is expected to benefit from the synergy effect of the business
combination during the impairment test. If the test results indicate that the recoverable amount of the
asset group or combination of asset groups containing the allocated goodwill is lower than its book
value the corresponding impairment loss is recognized. The amount of impairment loss is offset
against the book value of goodwill allocated to the asset group or combination of asset groups and
then proportionally based on the proportion of the book value of other assets in the asset group or
combination of asset groups other than goodwill.Goodwill and intangible assets with indefinite useful life are tested for impairment at least at the
end of each year.Once assets impairment loss is recognized it will not be reversed in the future period.
29. Long-term deferred expenses
√适用□不适用
Long-term deferred expenses are accounted for based on actual expenditures and amortized
evenly over the benefit period or the prescribed period. If the long-term deferred expense item cannot162
benefit the future accounting period all the amortized value of the item that has not been amortized
shall be transferred to profit or loss for the current period of which:
Improvement expenditures incurred on leased fixed assets shall be amortized evenly over the
remaining useful life of the leased assets if it can be reasonably determined that the ownership of the
leased assets will be obtained at the expiration of the lease term. If it cannot be reasonably determined
that the ownership of the leased asset can be obtained at the expiration of the lease term it shall be
amortized equally over the shorter of the remaining lease term and the remaining useful life of the
leased asset.The decoration costs incurred by the leased fixed assets if it can be reasonably determined that
the ownership of the leased assets will be obtained at the expiration of the lease term shall be
amortized equally between the interval between two decorations and the shorter period of the
remaining useful life of the leased assets. If it cannot be reasonably determined that the ownership of
the leased asset can be obtained at the expiration of the lease term the leased asset shall be
amortized equally over the shorter of the interval between two decorations the remaining lease term
and the remaining useful life of the leased asset.
30. Contract liabilities
√适用□不适用
Contract liabilities is the Company's obligation to transfer goods to customers for the
consideration that has been received or receivable from customers. The Company presented the net
amount of contract assets offsetting with contract liabilities when they are aroused in the same
contract.
31. Employee compensation
(1). Accounting treatment of employee benefits
√适用□不适用
In the accounting period in which employees have rendered services the Company recognized the
employee wages bonus social security contributions according to regulations such as medical
insurance work injury insurance and maternity insurance as well as housing funds as liability and
charged to profit or loss for the current period or cost of relevant assets. If employee benefits are
non-monetary benefits if they can be measured reliably they shall be measured at fair value. If the
liability is not expected to be settled wholly in twelve months after the balance sheet date and the
amount is significant the liability is measured at the discounted amount.
(2). Accounting treatment of post-employment benefits
√适用□不适用
Post-employment benefit plan includes defined contribution plans and defined benefit plans.Defined contribution plans are post-employment benefit plans under which a corporate pays fixed
contributions into an escrow fund and will have no further obligation. Defined benefit plans are
post-employment benefit plans other than defined contribution plans.
(1) Defined contribution plans
The Company pays basic pension insurance and unemployment insurance for employees in
accordance with the relevant regulations of the current government. In the accounting periods which
employees rendered services the amount of defined contribution plan is recognized as liability and
charged to profit or loss for the current period or cost of relevant assets.
(3). Accounting treatment of termination benefits
√适用□不适用
Termination benefits is recognized on the earlier of either the Company cannot unilaterally
withdraw the termination benefits provided by the labor relationship cancellation plan or the163
redundancy proposal and the Company recognizes the costs or expenses related to the restructuring
related to the payment of the termination benefits. Termination benefits expenses are included in
profit or loss for the current period. However if the termination benefits are not expected to be fully
paid within twelve months after the end of this reporting period it is treated as other long-term
employee benefits.Employee internal retirement plans are handled on the same principle as the above dismissal
benefits. The Company will include the salary and social insurance contribution of early retired
personnel from the date when the employee ceases to provide services to the normal retirement date
and shall be included in profit or loss for the current period (termination benefits) when the conditions
for recognizing the estimated liabilities are met. Financial compensation after the official retirement
date (such as the normal pension pension) will be treated as post-employment benefits.
(4). Accounting treatment of other long-term employee benefits
√适用□不适用
Other long-term employee benefits provided by the Company to the employees satisfied the
conditions for classifying as a defined contributions plan; those benefits are accounted for in
accordance with the above requirements relating to defined contribution plan but the movement of
net liabilities or assets in re-measurement of defined benefit plan is recorded in profit or loss for the
current period or cost of relevant assets
32. Provision of liabilities
√适用□不适用
A provision is recognized as a liability when an obligation related to a contingency satisfied all of
the following conditions: (1) The obligation is a present obligation of the Company; (2) It is probable
that an outflow of economic benefits will be required to settle the obligation; (3) The amount of the
obligation can be measured reliably.Provisions are initially measured at the best estimate of the payment to settle the associated
obligations and consider the relevant risk uncertainty and time value of money. If the impact of time
value of money is significant the best estimate is determined as its present value of future cash
outflow. The Company reviews the book value of provisions at the balance sheet date and adjusts the
carrying amount to reflect the best estimate.The best estimates are divided into the following situations: If the required expenditure exists in
a continuous range (or interval) and the probability of various results in the range is the same the best
estimate is based on the middle value of the range: namely the average of the lower limit amount is
determined. The required expenditure does not exist in a continuous range (or interval) or although
there is a continuous range but the possibility of various results in this range is not the same if
contingencies involve a single item the best estimate is based on the amount most likely to occur; if
contingencies involve multiple items the best estimate is calculated and determined based on various
possible results and related probabilities.If all or part of the expenses required to pay off the provisions of the Company are expected to be
compensated by a third party when the compensation amount is basically determined to be received
it is separately recognized as an asset and the recognized compensation amount does not exceed the
carrying amount of the provisions.Carrying amount of the provisions are reviewed on each balance sheet date. If there is solid
evidence that the carrying amount cannot reflect the current best estimate the carrying amount shall
be adjusted according to the current best estimate.
33. Share-based payment
√适用□不适用
1. Category of share-based payment164
The Company's share-based payment is a transaction that grants equity instruments or assumes
liabilities determined on the basis of equity instruments in order to obtain services provided by
employees (or other parties). Includes Share-based payment settled with equity and share-based
payment settled with cash.
2. Determination method of fair value of equity instruments
(1) If there is an active market it shall be determined according to the quoted price the active
market; (2) If there is no active market it shall be determined by using valuation techniques including
reference to the prices used in recent market transactions conducted by parties who are familiar with
the situation and voluntarily trade reference to the current fair value discounted cash flow method
and option pricing model of other financial instruments that are substantially the same.
3. Basis in determination of best estimate of exercisable equity instruments
On each balance sheet date during the vesting period the Company makes the best estimate
based on the latest information on the number of employees with exercisable rights and other
follow-up information and corrects the number of equity instruments expected to exercise. On the
exercise date the number of equity instruments expected to be exercised should be consistent with
the actual exercisable amount.
4. Accounting treatment of share-based payment
(1) Share-based payment settled by equity
If the equity-settled share-based payment is exchanged for employees to provide services and the
right is available immediately after the grant the relevant cost or expense will be included in the fair
value of equity instruments on the grant date and the capital reserve will be adjusted accordingly. If
the exercise right is available only after completing the service within the vesting period or meeting the
prescribed performance conditions on each balance sheet date during the vesting period based on
the best estimate of the number of available rights Equity instruments and the fair value of the equity
instruments on its grant date the services obtained in the current period are included in the relevant
costs or expenses and the capital reserve is adjusted accordingly. After the exercisable date no
adjustment will be made to the recognized costs or expenses and the total owner’s equity.For the equity-settled Share-based payment is exchanged for the services of the other party if the
fair value of the services of the other party can be reliably measured it is measured according to the
fair value of the service of the other party. If the fair value of the other party’s services cannot be
measured reliably but the equity value of equity instruments can be measured reliably it is measured
in accordance with the fair value of equity instruments on the date of service acquisition included in
the relevant costs or expenses and the owners ‘equity is increased accordingly.
(2) Share-based payment settled in cash
Share-based payment settled in cash in exchange for employee services and the right to exercise
immediately after the grant the Company’s fair value of the liabilities assumed are included in the
relevant costs or expenses on the grant date and the liabilities are increased accordingly. Share-based
payment settled in cash that can be exchanged for employee services after completing the services
within the waiting period or meeting the prescribed performance conditions based on the best
estimate of the right to exercise on each balance sheet date during the vesting period and the fair
value of the Company’s liabilities the services obtained in the current period are included in the
relevant costs or expenses and corresponding liabilities. On each balance sheet date and settlement
date before the settlement of the relevant liabilities the fair value of the liabilities is remeasured and
the changes are included in profit or loss for the current period.
(3) Modify and terminate share-based payment plan
If the modification increases the fair value of equity instruments granted the Company will
recognize the increase in the cost of services obtained in accordance with the increase in fair value of
equity instruments. If the modification increases the number of equity instruments awarded the
Company will recognize the increase in the fair value of equity instruments accordingly as an increase
in access to services. If the Company revises the conditions of exercise rights in a manner beneficial to
employees the Company considers the revised conditions of exercise rights when dealing with the
conditions of exercise rights.If the modification reduces the fair value of the equity instruments granted the Company
continues to recognize the services based on amount of fair value of the equity instruments on the165
grant date regardless of the decrease in the fair value of the equity instruments. If the modification
reduces the number of granted equity instruments the Company treats the reduction as a cancellation
of the granted equity instruments. If the vesting conditions are modified in a way that is unfavorable to
the employees the modified vesting conditions shall not be considered when dealing with the vesting.If the share-based payment settled by equity is cancelled it will be treated as an accelerated
exercise on the cancellation date and the unrecognized amount will be recognized immediately
(Amount that should be recognized in the remaining vesting period is immediately included in profit or
loss for the current period and capital reserve is also recognized). Employees or other parties can
choose to meet the non-feasible rights conditions but not met within the waiting period as a
cancellation of equity settlement of share-based payment. However if a new Equity instrument is
awarded and the equity instruments granted on the grant date of the new equity instruments are
deemed to replace the equity instruments that were cancelled then the authorized replacement
equity instruments are processed in the same way as the modification of terms and conditions of the
original equity instruments.
5 ． Involving share-based payment transactions between companies within the scope of
consolidation of the Company between the Company and the actual controlling party or other
shareholders of the Company or between the Company and other companies in the group to which
the Company belongs it is accounted in accordance with the relevant provisions of Article 7 ofintra-group share-based payment of “Interpretation No. 4 of Accounting Standards for BusinessEnterprises”.
34. Share repurchase
When the Company's shares are repurchased for reasons such as reducing registered capital or
rewarding employees the amount actually paid is recorded as treasury stock with a corresponding
memorandum record maintained. If the repurchased shares are cancelled the difference between the
total par value of the shares (calculated based on the par value per share and the number of shares
cancelled) and the amount actually paid for the repurchase is offset against capital surplus; if the
capital surplus is insufficient to cover the difference the remaining amount is offset against retained
earnings. If the repurchased shares are awarded to the Company's employees such award constitutes
an equity-settled share-based payment. When the employees exercise their rights and purchase the
Company's shares and the consideration is received the cost of the treasury stock delivered to the
employees and the accumulated amount in capital surplus (other capital surplus) during the vesting
period are written off and the difference is adjusted against capital surplus (share premium).
35. Preferred stocks perpetual bonds and other financial instruments
□适用√不适用
36. Revenue
(1). Accounting policies adopted for revenue recognition and measurement as disclosed by business
type
√适用□不适用
1. General principles of revenue recognition
Under the new revenue standard the Company determine the timing of revenue recognition on
the basis of transfer of control. The Company recognizes revenue when it satisfies a performance
obligation in the contract i.e. when the customer obtains control of the relevant goods or services.If one of the following conditions is fulfilled the Company performs its performance obligation
within a certain period; otherwise it performs its performance obligation at a point of time: (1) when
the customer simultaneously receives and consumes the benefits provided by the Company when the
Company performs its obligations under the contract; (2) when the customer is able to control the
goods in progress in the course of performance by the Company under the contract; (3) when the166
goods produced by the Company under the contract are irreplaceable and the Company has the right
to receive payment for performance completed to date during the whole contract term.For performance obligations performed within a certain period the Company recognizes revenue
by measuring the progress towards complete of that performance obligation within that certain period.When the progress of performance cannot be reasonably determined if the costs incurred by the
Company are expected to be compensated the revenue shall be recognized at the amount of costs
incurred until the progress of performance can be reasonably determined.For performance obligation performed at a point of time the Company recognizes revenue at the
point of time at which the customer obtains control of relevant goods or services. To determine
whether a customer has obtained control of goods or services the Company considers the following
indications: (1) the Company has the current right to receive payment for the goods which is when
the customer has the current payment obligations for the goods; (2) the Company has transferred the
legal title of the goods to the customer which is when the client possesses the legal title of the goods;
(3) the Company has transferred the physical possession of goods to the customer which is when the
customer obtains physical possession of the goods; (4) the Company has transferred all of the
substantial risks and rewards of ownership of the goods to the customer which is when the customer
obtain all of the substantial risks and rewards of ownership of the goods to the customer; (5) the
customer has accepted the goods; (6) other information indicates that the customer has obtained
control of the goods.When a contract contains two or more performance obligations the Company will allocate the
transaction price to each individual performance obligation in accordance with the relative proportion
of the stand-alone selling price of the goods promised by each individual performance obligation on
the commencement date of the contract. Revenue is recognized on the transaction price allocated to
each individual performance obligation. The transaction price is the amount of consideration that the
Company expects to be entitled to receive due to the transfer of goods to customers. The amount
collected by the Company on behalf of a third party and the amount that the Company expects to
return to the customer are accounted for as a liability and not included in the transaction price. For
contracts that contain variable consideration the Company estimates the amount of consideration to
which it will be entitled using either the expected value method or the most likely amount. The
estimated amount of variable consideration is included in the transaction price only to the extent that
it is highly probable that such an inclusion will not result in a significant revenue reversal in the future
when the uncertainty associated with the variable consideration is subsequently resolved. For
contracts that contain significant financing components the Company determines the transaction price
based on the amount payable under the assumption that the customer pays that amount payable in
cash when the control of goods or services is transferred to the customer. The difference between the
transaction price and the contract consideration shall be amortized within the contract period using
effective interest rate. For contracts where the period between payment and transfer of the associated
goods or services is less than one year the Group applies the practical expedient of not adjusting the
transaction price for any significant financing component.
2. Specific revenue recognition principle
Based on actual situation the Company recognizes revenue when the following conditions are
met:
(1) Sales of product: Domestic sales revenue is recognized when the control of the product has
been transferred to the purchaser the continued management and control of the product is no longer
implemented the payment has been recovered or the evidence for payment has been obtained and
the relevant economic benefits are likely to flow in and the cost of the product can be reliably
measured. Export sale revenue is recognized on the export date shown on the export declaration of the
goods after the goods are shipped according to the customer's requirements the payment has been
recovered or the receipt of the payment has been obtained and the relevant economic benefits are
likely to flow in the cost of the product can be reliably measured.
(2) Futures brokerage business: The net transaction fee charged by the Company from the
customers (deducting the transaction fee payable by the Company to exchange company) is recognized
as the net fee income when the daily payment is settled with the customer.167
(2). Different revenue recognition methods and measurement methods involved when similar
businesses adopt different operating models
□适用√不适用
37. Contract costs
□适用√不适用
38. Government grants
√适用□不适用
1. Category of government grants
Government grants refer to the Company's obtain of monetary or non-monetary assets from the
government without consideration. It is divided into government grants related to assets and
government grants related to income.Government grants related to assets refer to government grants acquired by the Company and
used to purchase or construct or form long-term assets including financial grants for the purchase of
fixed assets or intangible assets and financial discounts for dedicated loans for fixed assets etc.;
Government grants related to income refer to government grants other than government grants
related to assets. Government grants should be distinguished between that related to assets and
related to income and apply different accounting treatment. If it is difficult to distinguish the overall
classification is classified as government grants related to income
The specific standards adopted by the Company in the classification of government grants are:
(1) The grant objects specified in the Government grants document are used to purchase or
construct or form long-term assets or the expenditures of the subsidies are mainly used to purchase or
construct or form long-term assets they are classified as government grants related to assets.
(2) The government grants obtained according to the government documents that are all or
mainly used to compensate the expenses or losses in the future period or the government grants that
have occurred and are classified as government grants related to income.
(3) If the government document does not clearly specify the target of the grant the Government
grants will be divided into Government grants of Related to assets or Government grants of Related to
income in the following ways: 1) Government documents specify the specific project targeted by the
grant the expenditure amount is divided by relative ratio of that forming the asset and the
expenditure amount included in the expense according to the budget of this particular project. The
ratio needs to be reviewed on each balance sheet date and changed if necessary.2) Government
documents only use general expressions and do not indicate specific items it is regarded as
government grants related to income.
2. Timing of recognition of government grants
The Company usually recognizes and measures the government grants according to the actual
amount received when they are actually received. However for the end of the period there is solid
evidence that it can meet the relevant conditions stipulated by the financial support policy. It is
expected that the financial support funds can be received and it is measured according to the Amount
receivable. Government grants measured according to Amount receivable should also meet the
following conditions:
(1) It is based on the financial support item officially released by the local financial department
and proactively disclosed in accordance with the “Government Information Disclosure Regulations”
and its financial fund administrative methods and its administrative methods should be inclusive (any
enterprise that meets the prescribed conditions can apply) not specifically for specific enterprises;
(2) The Amount of the subsidy receivable has been confirmed by the authority government
department or it can be reasonably calculated according to the relevant regulations of the officially
released financial fund management method and it is expected that there will be no significant
uncertainty in its amount;168
(3) The relevant grant approval has clearly promised the payment period and the payment is
guaranteed by the corresponding financial budget so it can be reasonably guaranteed that it can be
received within the specified period;
(4) According to the specific situation of the Company and the subsidy other relevant conditions
(if any) that should be met.
3. Accounting treatment of government grants
Government grants are monetary assets measured by the amount received or receivable;
non-monetary assets measured by the fair value; if the fair value of non-monetary assets cannot be
reliably obtained measured by the nominal amount. Government grants measured in nominal amount
are directly included in profit or loss for the current period.The Company adopts the gross method for Government grants the specific accounting treatment
is as follows:
Government grants related to assets are recognized as deferred income and are included in profit
or loss for the current period in a reasonable and systematic way within the useful life of the relevant
assets. When related assets are sold transferred scrapped or damaged before the end of the useful
life the relevant deferred income balance is transferred to the profit or loss of the asset disposal
period.Government grants related to income which are used to compensate the related cost or loss of
the Company in the future period are recognized as deferred income and are included in profit or loss
for the current period during the period when the related cost or loss is recognized. The compensation
for the related costs or losses incurred by the enterprise is directly included in profit or loss for the
current period.The policy discount loans obtained by the Company are divided into the following two situations
and are separately accounted for:
(1) if the government makes the payment of subsidy to the bank offering the loan the actual
amount of money received by the loan is recorded as the book amount and the borrowing costs are
calculated according to the loan principle and the preferential interest rate of the policy.
(2) If the government makes the payment of subsidy directly to the Company the interest subsidy
is reducing the borrowing costs.If the recognized government grants need to be returned the returned will be accounted in the
current period for in the following situations:
(1) that initially deducted the carrying amount of the asset is recognized by increasing the
carrying amount of the asset;
(2) if there exists of the related deferred income balance then the deferred income balance is
reduced by the amount repayable any excess is charged to profit or loss for the current period.
(3) In other cases it is directly included in profit or loss for the current period.
The distinguishing principles of government grants included in different profit or loss items are:
Government grants related to the daily activities of the Company included in other income or
offsetting related costs according to the economic business substance; Government grants not related
to the daily activities of the Company included in non-operating income and expenses.
39. Deferred tax assets / deferred tax liabilities
√适用□不适用
1. Recognition and measurement of deferred tax assets and deferred tax liabilities
The Company uses the balance sheet liability method to recognize deferred income tax based on
the temporary difference between the carrying amount of assets liabilities and the balance sheet date
and the tax base. The Company's current income tax and deferred income tax are included in profit or
loss for the current period as income tax expenses or credit but excluding income tax arising from: (1)
business combination; (2) transactions or matter recognized directly in owners' equity; (3) according to
the “Accounting Standards for Business Enterprises No. 37 - Presentation of Financial Instruments” and
other regulations the dividend payment of financial instruments classified as equity instruments can
be deducted before corporate income tax according to tax policies and the distributed profits come
from transactions or matters previously recognized in owners’ equity.169
The Company recognizes a deferred tax asset for the carry forward of deductible temporary
differences deductible losses and tax credits to subsequent periods to the extent that it is probable
that future taxable profits will be available against which the deductible temporary differences
deductible losses and tax credits can be utilized except for those incurred in the following transactions:
(1) This transaction is not a business combination and neither affects accounting profits nor
affects taxable income (or deductible losses) when it occurs. Additionally the initially recognized assets
and liabilities do not generate equal taxable temporary differences and deductible temporary
differences;
(2) The deductible temporary differences associated with investments in subsidiaries associates
and joint ventures the corresponding deferred tax asset is recognized when both of the following
conditions are satisfied: it is probable that the temporary difference will reverse in the foreseeable
future and it is probable that taxable profits will be available in the future against which the temporary
difference can be utilized.All the taxable temporary differences are recognized as deferred tax liabilities except for those
incurred in the following transactions:
(1) Initial recognition of goodwill or initial recognition of assets or liabilities arising from
transactions with the following characteristics: the transaction is not a business combination and
neither affects accounting profits nor affects taxable income (or deductible losses) at the time of the
transaction and the initially recognized assets and liabilities do not generate equal taxable temporary
differences and deductible temporary differences;
(2) The taxable temporary differences associated with investments in subsidiaries associates and
joint ventures and the Company is able to control the timing of the reversal of the temporary
difference and it is probable that the temporary difference will not reverse in the foreseeable future.The difference between the carrying amount of assets and liabilities and their tax base (If the
items that have not been recognized as assets and liabilities can be determined in accordance with the
provisions of the tax law the tax base the difference between the tax base and the book amount) is
calculate and recognized deferred tax assets or deferred tax liabilities according to the applicable tax
rate during the period when the assets are expected to be recovered or the liabilities are paid off.For individual transactions that are not business combinations and do not affect accounting profits
or taxable income (or deductible losses) at the time of transaction and the initial recognition of assets
and liabilities results in equal taxable temporary differences and deductible temporary differences the
Company recognizes the corresponding deferred income tax liabilities and deferred income tax assets
at the time of transaction for the taxable temporary differences and deductible temporary differences
arising from the initial recognition of assets and liabilities in the transaction.Deferred tax assets recognized are limited to the amount of taxable income that is likely to be
used to offset the deductible temporary differences. On the balance sheet date if there is solid
evidence that it is likely to obtain sufficient taxable income in the future period to offset the deductible
temporary difference the deferred tax assets that have not been recognized in the previous
accounting period are recognized. The carrying amount of deferred tax assets is reviewed regularly. If it
is likely that sufficient taxable income cannot be obtained in the future to offset the benefits of
deferred tax assets the carrying amount of deferred tax assets will be written down. When it is likely
to obtain sufficient taxable income the amount written down will be reversed.
2. When the Company has the legal right to settle on a net basis and intends to settle on a net
basis or acquire assets and settle liabilities simultaneously the Company's current income tax assets
and current income tax liabilities are presented in net amounts after offset.When the Company have the legal right to settle the current income tax assets and current
income tax liabilities in net and the deferred tax assets and deferred tax liabilities are related to the
income tax levied by the same tax collection department on the same taxpayer or different taxpayers
but in each future period of significant deferred tax assets and liabilities reversal the taxpayer involved
intends to settle the current income tax assets and liabilities in net amount or obtain assets and settle
liabilities at the same time and deferred tax liabilities are presented in net amount after offset.170
40. Leases
√适用□不适用
Leasing refers to a contract in which the lessor transfers the right to use an asset to the lessee for
a certain period of time in exchange for consideration.On the contract commencement date the Company assesses whether the contract is a lease or
contains a lease. If one party in the contract transfers the right to control the use of one or more
identified assets for a certain period of time in exchange for consideration then the contract is a lease
or contains a lease.If the contract includes multiple separate leases the lessee and lessor will split the contract and
perform accounting for each separate lease separately. If the contract includes both leases and
non-leases the lessee and lessor will split the leases and non-leases.
1. Accounting treatment for leases as a lessee
(1) Right-of-use assets
At the commencement date of lease term the Company recognizes right-of-use assets for leases
(excluding short-term leases and leases of low-value assets). Right-of-use assets are measured initially
at cost. Such cost comprises: the amount of the initial measurement of lease liability; lease payments
made at or before the inception of the lease less any lease incentives already received (if there is a
lease incentive); initial direct costs incurred by the Company; the costs of the Company expected to be
incurred for dismantling and removing the leased asset restoring the site on which the leased asset is
located or restoring it to the condition as agreed in the terms of the lease.The Company accrues depreciation for the right-of-use assets on straight-line method. If there is
reasonable certainty that the Company will obtain the ownership of a leased asset at the end of the
lease term the Company depreciates the right-of-use asset from the commencement date to the end
of the useful life of the underlying asset; otherwise the Company depreciates the leased asset from
the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end
of the lease term.
(2) Lease liabilities
At the commencement date of lease term the Company recognizes lease liabilities for leases
(excluding short-term leases and leases of low-value assets). Lease liabilities are initially measured
based on the present value of outstanding lease payment. Lease payment include: fixed payments
(including in-substance fixed payments) less any lease incentives (if there is a lease incentive); variable
lease payment that are based on an index or a rate; amounts expected to be payable under the
guaranteed residual value provided by the Company; the exercise price of a purchase option if the
Company is reasonably certain to exercise that option; payments of penalties for terminating the lease
option if the lease term reflects that the Company will exercise that option. The Company adopts the
interest rate implicit in the lease as the discount rate. If that rate cannot be determined reasonably
the Company’s incremental borrowing rate is used.The Company shall calculate the interest expenses of lease liabilities over the lease term at the
fixed periodic interest rate and include it into profit or loss in the period or cost of relevant assets.Variable lease payments not included in the measurement of lease liabilities are charged to profit or
loss in the period or cost of relevant assets in which they actually arise.After the commencement date of lease term if the following circumstances occur the Company
re-measures the lease liability in accordance with the lease payments after modification: when the
assessment results of the purchase extension or termination option or the actual exercise condition
changes or the actual exercise of the lease renewal option or the lease termination option is
inconsistent with the original assessment result; Changes in the expected payable amount based on
guaranteed residual value; Changes in the index or ratio used to determine lease payments. For the
lease modification that cause the lease liabilities to be remeasured the Company adjusts the carrying
value of the right-of-use assets accordingly. If the carrying value of the right-of-use asset has been
reduced to zero but the lease liability still needs to be further reduced the Company will include the
remaining amount in the profit or loss for the current period.171
As a lessee the basis for determining and accounting for simplified processing of short-term leases
and low-value asset leases
√适用□不适用
(3) The basis for determining and accounting for simplified processing of short-term leases and
low-value asset leases
The right-of-use asset and lease liability are not recognized by the Company for short-term leases
and leases of low-value assets and the relevant lease payments are included in profit or loss in the
period or costs of relevant assets in each period of the lease term on a straight-line basis. Short-term
leases are defined as leases with a lease term of not more than 12 months from the commencement
date and excluding a purchase option. Leases of low-value assets are defined as leases with underlying
low value when new. Where the Company subleases or expects to sublease a leased asset the original
lease shall not belong to a lease of low-value asset lease.
(4) Lease modification
Where a lease is modified and all of the following conditions are met simultaneously the
Company accounts for the lease modification as a separate lease: the modification expands the scope
of the lease by adding the right to use one or more underlying assets; and the increased consideration
is commensurate with the stand-alone price of the expansion of scope adjusted for the circumstances
of the particular contract.Where a lease modification is not accounted for as a separate lease at the effective date of the
lease modification the Company reallocates the consideration of the modified contract redetermines
the lease term and remeasures the lease liability based on the present value of the modified lease
payments discounted at the revised discount rate.Lease classification criteria and accounting treatment methods for lessors
√适用□不适用
2. Accounting treatment methods for lessors
At the commencement date of lease term the Company classifies leases as financing leases and
operating leases. A financing lease is a lease that transfers substantially all the risks and rewards
incidental to ownership of a leased asset irrespective of whether the ownership of the asset is
eventually transferred. An operating lease is a lease other than a finance lease.As a sub-leasing lessor the Company classifies the sub-leases based on the right-of-use assets of
the original leases. If the original lease is a short-term lease and the Company chooses not to recognize
the right-of-use asset and lease liability for the original lease the Company classifies the sublease as an
operating lease.
(1) Accounting treatment of operating leases
The lease payments derived from operating leases are recognized as rental income on a
straight-line basis over the respective lease terms. Initial direct costs relating to operating leases to be
incurred by the Company shall be capitalized and then included in the current income by stages at the
same base as the recognition of rental income over the lease term. The variable lease payments not
included in the measurement of lease payments shall be recognized in profit or loss in the period in
which they are occurred.
(2) Accounting treatment of financing leases
At the commencement date of lease term the Company recognizes financing lease receivable and
derecognizes the underlying assets. The Company initially measures financing lease receivable in the
amount of net investment in the lease. Net investment in the lease is the sum of present value of
unguaranteed residual value and the lease payments receivable at the commencement date of lease
term discounted at the interest rate implicit in the lease.The Company calculates and recognizes interest income in each period during the lease term
based on a constant periodic interest rate. The derecognition and impairment losses of financing leasereceivable are accounted for in accordance with this note “Significant Accounting Policies andAccounting Estimates - Financial Instruments”. Variable lease payments not included in the
measurement of the net investment in the lease are included in profit or loss in the period in which
they are occurred.172
3. Sale and leaseback transactions
The Company assesses whether the transfer of the asset in a sale and leaseback transactionqualifies as a sale in accordance with the principles set out in “Principal accounting policies andestimates — Revenue” of these notes.
(1) Lessee
Where the transfer of the asset in a sale and leaseback transaction qualifies as a sale the
Company as lessee measures the right-of-use asset arising from the sale and leaseback at the
proportion of the previous carrying amount of the asset that relates to the right of use retained
through the leaseback and recognizes a gain or loss only to the extent of the rights transferred to the
lessor. After the commencement date of the lease for sale and leaseback transactions that contain
variable lease payments not dependent on an index or a rate the Company applies a reasonable
method to determine the proportion of rights retained through the leaseback and does not recognize
any gain or loss relating to the right of use obtained through the leaseback.Where the transfer of the asset in a sale and leaseback transaction does not qualify as a sale the
Company as lessee continues to recognize the transferred asset and simultaneously recognizes a
financial liability equal to the transfer proceeds. The accounting treatment of the financial liability is
detailed in “Principal accounting policies and estimates — Financial instruments” of these notes.
(2) Lessor
Where the transfer of the asset in a sale and leaseback transaction qualifies as a sale the
Company as lessor accounts for the asset purchase and accounts for the asset lease in accordance with
the policy for lessors described above. Where the transfer of the asset in a sale and leaseback
transaction does not qualify as a sale the Company as lessor does not recognize the transferred asset
but recognizes a financial asset equal to the transfer proceeds. The accounting treatment of the
financial asset is detailed in “Principal accounting policies and estimates — Financial instruments” of
these notes.
41. Hedge accounting
1. Hedging includes fair value hedging / cash flow hedging / overseas operating net investment
hedging.
2. For hedging instruments that meet the following conditions hedging accounting methods are
used: (1) The hedging relationship consists only of eligible hedging instruments and hedged
instruments; (2) At the beginning of hedging the Company formally designated hedging instrument
and hedged items and prepared written documents on the hedging relationship and the Company's
risk management strategy and risk management objectives for hedging; (3) The hedging relationship
meets the hedging validity requirement.When the hedging meets the following conditions at the same time the Company determines that the
hedging relationship meets the requirements for hedging effectiveness: (1) There is an economic
relationship between the hedged item and the hedging instrument; (2) Among the changes in value
caused by the economic relationship between hedged items and hedging instruments the impact of
credit risk does not dominate; (3) The hedging ratio of the hedging relationship is equal to the ratio of
the actual number of hedged items of the Company to the actual number of hedging instruments but
does not reflect the imbalance of the relative weight of the hedged items and hedging instruments.The Company continuously evaluates whether the hedging relationship meets the requirements of
hedging effectiveness on the hedging start date and later. The hedging relationship no longer meets
the hedging effectiveness requirements due to the hedging ratio but if the risk management objectives
of the designated hedging relationship have not changed the Company will rebalance the hedging
relationship.
3. Accounting treatment of hedging
(a) Fair value hedge
1) Gains or losses from hedging instruments are included in profit or loss for the current period. If
hedging instruments are hedged against non-tradable equity instruments (or their components) that173
are selected to be measured at fair value and whose changes are included in other comprehensive
income the gains or losses generated by the hedging instruments are included in other comprehensive
income.
2) Profit or loss for the current period of the hedged item due to risk exposure is calculated as
profit or loss for the current period while adjusting the carrying amount of the confirmed hedged item
not measured at fair value. Hedged items are debt instruments (or their components) that are
measured at fair value and whose changes are included in other comprehensive income. The gains or
losses resulting from the hedged risk exposure are included in profit or loss for the current period
without adjustment its carrying amount; If the hedged item is a non-tradable equity instrument
investment (or its component) measured at fair value and its changes are included in other
comprehensive income the gain or loss resulting from the hedged risk exposure is included in other
comprehensive income not adjusting its carrying amount.If the hedged item is an unrecognized commitment (or its component) the cumulative change in fair
value due to the hedged risk after the hedge relationship is designated is recognized as an asset or
liability and the relevant gains or losses are included profit or loss for each relevant period. When
fulfilling the definite commitment to obtain assets or assume liabilities the initial recognition amount
of the asset or liability is adjusted to include the cumulative change in the fair value of the confirmed
hedged item.If the hedged item is a financial instrument (or a component thereof) measured at amortized cost the
adjustment made by the Company to the carrying amount of the hedged item will be amortized at the
actual interest rate recalculated on the amortization date and included in profit or loss for the current
period. If the hedged item is a debt instrument measured at fair value and its changes are included in
other comprehensive income (components thereof) the accumulated recognized hedging gains or
losses are amortized in the same manner and included in profit or loss for the current period but does
not adjust the carrying amount of the debt instrument (or its components).(b) Cash flow hedge
1) The part of the hedging instrument gains or losses that belongs to the effective hedging is
included in other comprehensive income as a cash flow hedge reserve and the invalid part is included
in profit or loss for the current period. The amount of cash flow hedge reserve is recognized according
to the lower of the absolute value of the following two items:* Accumulated gains or losses of
hedging instruments since hedging;* The cumulative change in the present value of the expected
future cash flow of the hedged item since hedging.
2) The hedged item is an expected transaction and the expected transaction causes the Company
to subsequently recognize a non-financial asset or non-financial liability or the expected transaction of
non-financial assets and non-financial liabilities forms a certain commitment applicable to fair value
hedge accounting the Company transfers out the cash flow hedging reserve amount originally
recognized in other comprehensive income and includes it in the initial recognition amount of the asset
or liability.
3) Other cash flow hedges the amount of cash flow hedge reserves originally included in other
comprehensive income are transferred out during the same period when the hedged expected
transaction affects profit or loss and are included in profit or loss for the current period.(c) Net investment hedges for overseas operations
The portion of the gains or losses formed by hedging instruments that are effective hedges is included
in other comprehensive income and when disposing of overseas operations they are transferred out
and included in profit or loss for the current period The part of the loss that belongs to the invalid
hedge is included in profit or loss for the current period.
42. Other significant accounting policies and accounting estimates
√适用□不适用
Significant accounting policies and accounting estimates:
In the process of applying the accounting policy of the Company due to the inherent uncertainty
of the operating activities the Company needs to make judgments estimates and assumptions on the
carrying amount of the report items that cannot be accurately measured. These judgments estimates174
and assumptions are based on the Company's management's past historical experience and made on
the basis of considering other relevant factors. These judgments estimates and assumptions will affect
the reported amount of income expenses assets and liabilities and the disclosure of contingent
liabilities on the balance sheet date. However the actual results caused by the uncertainty of these
estimates may be different from the current estimates of the Company's management which will
cause significant adjustments to the carrying amount of assets or liabilities affected in the future. The
Company regularly reviews the afore mentioned judgments estimates and assumptions on the basis of
continuous operation. If the changes in accounting estimates only affect the current period of change
the number of impacts will be recognized in the current period of change. If the changes affect both
the current period and the future period the number of impacts will be confirmed in the current
period and future period of change. As of the balance sheet date the Company needs to make
judgments estimates and assumptions on the financial statement items as follows:
1. Classification of lease
When the Company acts as a lessor according to the provisions of the Accounting Standards for
Business Enterprises No. 21 - Leases leases are classified as operating leases and financial leases.When determining the classification management needs to make analysis and judgment on whether
all risks and rewards related to the ownership of leased assets have been substantially transferred to
the lessee.
2. Impairment of financial instruments
The Company uses the expected credit loss model to assess impairment of receivables and debt
investments measured at amortized cost receivables financing measured at fair value and changes
included in other comprehensive income and other debt investments. The use of the expected credit
loss model involves significant management judgments and estimates. The key parameters of expected
credit loss measurement include default probability default loss rate and default risk exposure. The
Company considers the quantitative analysis of historical statistical data and forward-looking
information to establish default probability default loss rate and default risk exposure model. The
difference between the actual financial instrument impairment result and the original estimate will
affect the carrying amount of the financial instrument and the accrual or reversal of credit impairment
losses during the period when the estimate is changed.
3. Provision for decline in value in inventories
According to Inventories accounting policy the Company measures according to the lower of cost
and net realizable value. For inventories whose cost is higher than net realizable value and obsolete
and unsalable provision for decline in value of inventories is recognized. Impairment to net realizable
value is based on the assessment of the marketability of Inventories and its net realizable value.Appraisal of Inventories impairment requires management to make judgments and estimates based on
factors such as the purpose of holding Inventories and the impact of events after the balance sheet
date. The difference between the actual result and the original estimate will affect the carrying amount
of Inventories and the accrual of Inventory Provision for decline in value or return during the period
when the estimate is changed.
4. Impairment of non-financial non-current assets
On the balance sheet date the Company judges whether there is any sign of possible impairment
of non-current assets other than financial assets. For intangible assets with uncertain service life in
addition to the annual impairment test when there are signs of impairment an impairment test is also
conducted. Non-current assets other than financial assets are tested for impairment when there are
signs that their book amount is not recoverable.When the carrying amount of an asset or asset group is higher than the recoverable amount
which is the higher of the fair value minus the disposal cost and the present value of the expected
future cash flow it indicates that an impairment has occurred.The net value of fair value minus disposal expenses is determined by referring to the sales
agreement price or observable market price of similar assets in fair transactions minus the incremental
costs that can be directly attributed to the disposal of the asset. When predicting the present value of
future cash flows it is necessary to make a significant judgment on the output selling price related
operating costs of the asset (or asset group) and the discount rate used in calculating the present
value. When estimating the recoverable amount the Company will use all relevant information that175
can be obtained including the prediction of production selling price and related operating costs based
on reasonable and supportable assumptions.The Company assesses whether goodwill is impaired at least annually and requires an estimate of the
use value of the asset group to which goodwill is allocated. When estimating the value in use the
Company needs to estimate the future cash flow from the asset group and at the same time choose an
appropriate discount rate to calculate the present value of the future cash flow.
5. Depreciation and amortization
After considering the residual value of the investment properties measured at cost model fixed
assets and Intangible assets the Company depreciates and amortizes it according to the straight-line
method during the service life. The Company regularly reviews the service life to determine the
amount of depreciation and amortization expenses to be included in each reporting period. The service
life is determined by the Company based on the previous experience of similar assets and the expected
technical update. If the previous estimates change significantly the depreciation and amortization
expenses will be adjusted in the future.
6. Deferred tax assets
To the extent that there is likely to be enough taxable profits to offset losses the Company
recognizes deferred tax assets for all unutilized tax losses. This requires the Company's management to
use a lot of judgment to estimate the time and amount of future taxable profits combined with tax
planning strategies to determine the amount of deferred tax assets that should be recognized.
7. Income tax
In the normal business activities of the Company there are certain uncertainties in the final tax
treatment and calculation of some transactions. Whether certain items can be paid before taxes
requires the approval of the tax authorities. If the final determination result of these tax matters is
different from the originally estimated amount the difference will have an impact on the current
income tax and deferred income tax during the final determination period.
8. Fair value measurement
Certain assets and liabilities of the Company are measured at fair value in the financial statements.When estimating the fair value of an asset or liability the Company uses the observable market data
available; if the Level 1 input value is not available a third-party qualified assessment agency is
employed for valuation. The Company's management works closely with it to determine the
appropriate valuation techniques and input values for related models. Relevant information about the
valuation techniques and input values used in the process of determining the fair value of various
assets and liabilities are disclosed in this note
43. Changes in significant accounting policies and accounting estimates
Significant changes in accounting policies:
There were no significant changes in the Company's accounting policies during this period.Explanation of changes in accounting estimates:
There were no significant changes in the Company's accounting estimates during this period.
44. From 2025 the first implementation of new accounting standards or interpretations of
standards involving adjustments to the financial statements at the beginning of the year of
initial implementation
□适用√不适用
45. Others
□适用√不适用176
VI. Taxation
1. Major tax types and their tax rates
Major tax types and their tax rates
√适用□不适用
Taxes Tax basis Tax rate %
Value-added tax The output VAT is calculated Calculated and paid according to
based on the sales revenue of tax rates of 3% 5% 6% 9% and
goods and taxable services as 13%. The export goods
stipulated by tax law. After implement the tax policy of
deducting the input VAT that is “exemption credit and refund”
allowed to be deducted in the and the tax refund rate is 13%.current period the difference is
the VAT payable.Consumption tax Taxable sales volume Gasoline: 1.52 yuan/liter
Diesel: 1.20 yuan / liter
Aviation kerosene: 1.20 yuan /
liter
Naphtha: 1.52 yuan/liter
Solvent oil：1.52 yuan/liter
lubricating oil: 1.52 yuan/liter
Fuel oil: 1.20 yuan / liter[note1]
Urban maintenance and Turnover tax payable 7% 5% etc.construction tax
Education surcharge Turnover tax payable 3%
Local education surcharges Turnover tax payable 2%
Enterprise income tax Subject to taxable profit [Note2]
[Note1] From June 30 2023 according to the provisions of the Announcement on the
Implementation of the Consumption Tax Policy for Some Refined Oil Products (Announcement No. 11
of the Ministry of Finance and the State Administration of Taxation) issued by the Ministry of Finance
and the State Administration of Taxation (1) alkylate oil (isooctane) will be subject to consumption tax
in accordance with gasoline; (2) petroleum ether crude white oil light white oil and some industrial
white oil (No. 5 No. 7 No. 10 No. 15 No. 22 No. 32 No. 46) will be subject to consumption tax in
accordance with solvent oil; (3) mixed aromatic hydrocarbons heavy aromatic hydrocarbons mixed C8
stable light hydrocarbons light oil and light coal tar will be subject to consumption tax in accordance
with naphtha; (4) aerospace kerosene will be temporarily exempted from consumption tax with
reference to aviation kerosene.[Note 2] For the description of the income tax rate for enterprises with different tax rates please see
the table below.√适用□不适用
Taxpayer Name Income tax rate (%)
Jiangsu Hengli Chemical Fiber Co. Ltd. 15.00%
Jiangsu Hengke Advanced Materials Co. Ltd. 15.00%
Jiangsu XuanDa Polymer Materials Co. Ltd. 15.00%
Jiangsu Deli Chemical Fiber Co. Ltd. 15.00%
Suzhou Binglin Trading Co. Ltd. 20.00%
Kanghui New Material Technology Co. Ltd. 15.00%
Jiangsu Kanghui New Material Technology Co. Ltd. 15.00%
Kanghui Dalian New Material Technology Co. Ltd. 15.00%
Shenzhen Ganghui Trading Co. Ltd. 20.00%
Hengli Storage and Transportation (Dalian) Co. 20.00%177
Ltd.Hengli Energy (Hainan) Co. Ltd. 15.00%
Hengli Petrochemical (Hainan) Co. Ltd. 15.00%
Suzhou Hengli Energy Chemical Import & Export
Co. Ltd. 20.00%
Dalian Northeast Asia Petrochemical Products Co.Ltd. 20.00%
Dalian Northeast Asia Energy Co. Ltd. 20.00%
Hengli Energy Import & Export Co. Ltd. 20.00%
Hengli New Energy (Shanghai) Co. Ltd. 20.00%
Dalian Hengli Fine Chemicals Sales Co. Ltd. 20.00%
Hengli Energy Chemical (Sanya) Co. Ltd. 15.00%
Kanghui Nantong New Materials Technology Co.Ltd. 15.00%
Dalian Hengli Petrochemical Sales Co. Ltd. 20.00%
Hengli Fuel Oil (Guangzhou) Co. Ltd. 20.00%
Nantong Hengli Maoyuan Petrochemical Trading
Co. Ltd. 20.00%
Hengli Petrochemical Sales (Shenzhen) Co. Ltd. 20.00%
Shanghai Hengli Fuel Oil Co. Ltd. 20.00%
Suzhou Fangtuan.com E-commerce Co. Ltd. 20.00%
Hengli Fuel Oil (Shenzhen) Co. Ltd. 20.00%
Huizhou Hengli Chemical Sales Co. Ltd. 20.00%
HENGLI PETROCHEMICAL CO. LIMITED 16.50%
HENGLI PETROCHEMICAL INTERNATIONAL PTE.LTD. 17.00%
HENGLI SHIPPING INTERNATIONAL PTE. LTD. 17.00%
Other taxpayers besides those mentioned above 25.00%
2. Tax incentives
√适用□不适用
1．Consumption tax incentiveAccording to “Notice on Continuing the Implementation of Part of the Consumption Tax Policy forNaphtha Fuel Oil” (Cai Shui [2011] No. 87) issued by the Ministry of Finance the People's Bank of Chinaand the State Administration of Taxation “Notice on Improving the Consumption Tax Rebate Policy forthe Production of Vinyl Aromatic Chemical Products from Naphtha Fuel Oil” (Cai Shui [2013] No. 2)
issued by Ministry of Finance People's Bank of China General Administration of Customs and StateAdministration of Taxation “Interim Measures for Consumption Tax Refund (Exemption) for Naphthaand Fuel Oil Used in the Production of Ethylene and Aromatic Chemical Products” (Announcement of
the State Administration of Taxation [2012] No. 36) issued by the State Administration of Taxation and“Announcement on Consumption Tax Refund of Naphtha Fuel Oil Production of Vinyl AromaticChemical Products” (Announcement No. 29 [2013] of the State Administration of Taxation and the
General Administration of Customs) issued by State Administration of Taxation and General
Administration of Customs production enterprises that implement the fixed-point direct supply plan
sell naphtha and fuel oil within the planned quantity limit and issue a special invoice for the
value-added tax of the Chinese character anti-counterfeiting version with the “DDZG” logo are exempt
from consumption tax. Hengli Petrochemical (Dalian) Refining Co. Ltd. is eligible for tax rebate and
enjoys the preferential policy of consumption tax rebate paid for the procurement process. At the
same time the implementation of the fixed-point direct supply plan meets the above conditions and
enjoys the preferential policy of exempting consumption tax from the sales process.According to the “Notice on Continuing to Increase Consumption Tax of Refined Oils” (Cai Shui
[2015] No. 11) issued by the Ministry of Finance and the State Administration of Taxation consumption178
tax for diesel aviation kerosene and fuel oil has been increased from RMB 1.1 per liter to RMB 1.2 per
liter and aviation kerosene continued to suspend the collection of consumption tax. Hengli
Petrochemical (Dalian) Refining Co. Ltd. enjoys the preferential policy of suspending the collection of
consumption tax for the sale of aviation kerosene.
2. Enterprise income tax incentive to high-tech enterprises
Jiangsu Hengli Chemical Fiber Co. Ltd. obtained the “High-tech Enterprise Certificate” (No.: No.:
GR202432004584) issued by Jiangsu Provincial Department of Science and Technology Jiangsu
Provincial Department of Finance and Jiangsu Provincial Taxation Bureau of the State Administration
of Taxation on 19 November 2024. The validity period is three years and the enterprise income tax
rate for the current year is calculated at a reduced rate of 15%.Jiangsu Hengke Advanced Materials Co. Ltd. obtained the “High-tech Enterprise Certificate” (No.:
GR202532001669) issued by the Jiangsu Provincial Department of Science and Technology the Jiangsu
Provincial Department of Finance and the Jiangsu Provincial Taxation Bureau of the State
Administration of Taxation on 28 November 2025. The validity period is three years and the enterprise
income tax rate for the current year is calculated at a reduced rate of 15%.Jiangsu Deli Chemical Fiber Co. Ltd. obtained the “High-tech Enterprise Certificate” (No.:
GR202032006951) issued by the Jiangsu Provincial Department of Science and Technology the Jiangsu
Provincial Department of Finance and the Jiangsu Provincial Taxation Bureau of the State
Administration of Taxation on 2 December 2020. The validity period is three years and the enterprise
income tax rate for the current year is calculated at a reduced rate of 15%.Jiangsu Xuanda Polymer Materials Co. Ltd. obtained the High-tech Enterprise Certificate (No.GR202332019613) issued by the Jiangsu Provincial Department of Science and Technology the Jiangsu
Provincial Department of Finance and the Jiangsu Provincial Taxation Bureau of the State
Administration of Taxation on December 13 2023。 The validity period is three years and theenterprise income tax rate for the current year is calculated at a reduced rate of 15%.Kanghui New Material Technology Co. Ltd. obtained the “High-tech Enterprise Certificate” (No.:
GR202432004129) issued by the Liaoning Provincial Department of Science and Technology the
Liaoning Provincial Department of Finance and the Liaoning Provincial Taxation Bureau of the State
Administration of Taxation on 27 November 2024. The validity period is three years and the enterprise
income tax rate for the current year is calculated at a reduced rate of 15%.Jiangsu Kanghui New Materials Technology Co. Ltd. obtained the “High-tech Enterprise Certificate”
(No.: GR202121000541) issued by the Jiangsu Provincial Department of Science and Technology the
Jiangsu Provincial Department of Finance and the Jiangsu Provincial Taxation Bureau of the State
Administration of Taxation on November 19 2024. The validity period is three years and the
enterprise income tax rate for the current year is calculated at a reduced rate of 15%.Kanghui Dalian New Materials Technology Co. Ltd. obtained the “High-tech Enterprise Certificate”
(No.: GR202321200254) issued by the Liaoning Provincial Department of Science and Technology the
Liaoning Provincial Department of Finance and the Liaoning Provincial Taxation Bureau of the State
Administration of Taxation on 12 December 2023. The validity period is three years and the enterprise
income tax rate for the current year is calculated at a reduced rate of 15%.Kanghui Nantong New Materials Technology Co. Ltd. obtained the “High-tech Enterprise”
Certificate (No.: GR202532013442) issued by the Jiangsu Provincial Department of Science and
Technology Jiangsu Provincial Department of Finance and Jiangsu Provincial Taxation Bureau of the
State Taxation Administration on 19 December 2025. The validity period is three years and the
enterprise income tax rate for the current year is calculated at a reduced rate of 15%.
3．Enterprise income tax incentive to small and low-profit enterprises
17 companies including Suzhou Binglin Trading Co. Ltd. meet the identification standards of small
low-profit enterprises and their taxable income is included in the taxable income at a reduced rate of
25% and they pay corporate income tax at a rate of 20%.
4. Other corporate income tax incentives
Hengli Oil & Chemical (Hainan) Co. Ltd. Hengli Energy (Hainan) Co. Ltd. and Hengli Energy &
Chemical (Sanya) Co. Ltd. are encouraged industry enterprises registered in the Hainan Free Trade Port179with substantive operations. In accordance with the “Notice of the Ministry of Finance and the StateTaxation Administration on Continuing the Implementation of the Preferential Enterprise Income TaxPolicy for the Hainan Free Trade Port” (Cai Shui [2025] No. 3) enterprise income tax is levied at the
reduced rate of 15% for the current year.
3. Others
□适用√不适用
VII. Notes to the items of consolidated financial statements
1. Cash and bank balances
√适用□不适用
Unit: Yuan Currency: RMB
Item Closing balance Beginning balance
Cash on hand 730891.88 423193.13
Cash at bank 20460890794.40 21376863416.33
Other monetary funds 8990931711.77 9459354146.43
Deposit in financial
company
Total 29452553398.05 30836640755.89
Including: Total
amount of money 4027438053.59 6644152300.79
deposited abroad
Other notes:
For details of funds with limited ownership or use rights such as mortgage pledge seizurefreezing and attachment see the note “Notes to Consolidated Financial Statements Items - Ownershipor using rights of assets subject to restriction” in this section.For details of cash and bank balances in foreign currency please refer to the description of “Notesto Consolidated Financial Statements Items — Items in foreign currencies” in this note.
2. Financial assets held for trading
√适用□不适用
Unit: Yuan Currency: RMB
Item Closing balance Beginning balance Specified reason andbasis
Financial assets measured at
fair value and the changes of
which are included in the 1738501539.93 428380369.27 /
current profit and loss
Including:
Derivative financial
assets 298546305.67 253102045.59 /
Investment in debt
instruments 53878768.00 105825612.00 /
Bank wealth
management and structured 1102418873.16 /
deposits
Fund trust and asset
management products 283657593.10 69452711.68 /
Financial assets designated to180
be measured at fair value
with changes recognized in
current profit and loss
Including:
Total 1738501539.93 428380369.27 /
Other notes:
□适用√不适用
3. Derivative financial assets
□适用√不适用
4. Notes receivable
(1). Notes receivable by category
√适用□不适用
Unit: Yuan Currency: RMB
Item Closing balance Beginning balance
Bank acceptance bills
Commercial acceptance bills 9139698.73 28601284.34
Total 9139698.73 28601284.34
(2). Notes receivable pledged by the Company at the end of the period
□适用√不适用
(3). At the end of the period the Company has endorsed or discounted notes receivable on the
balance sheet date not yet expiry
□适用√不适用
(4). Disclosure by method of provision for bad debt
√适用□不适用
Unit: Yuan Currency: RMB
Closing balance Beginning balance
Book balance Provision for Provision forbad debts Book balance bad debts
Category Provis Book Provisi Book
Amou Ratio Amou ion value Amou Ratio Amou on value
nt (%) nt ratio nt (%) nt ratio
(%)(%)
Provision for
bad debts on
individual - - - - - - - - - -
basis
Including:
Provision for
bad debts on 9620735.5 100.0 4810
91393010100.015052860
portfolio 1 0 36.78
5.00698.76615.0330.75.0012843106.34
basis
Including:
Commercial 9620 100.0 4810 5.00 9139 3010 100.0 1505 5.00 2860181
acceptance 735.5 0 36.78 698.7 6615. 0 330.7 1284
bills portfolio 1 3 10 6 .34
9620 4810 9139 3010 1505 2860Total 735.5 / 36.78 / 698.7 6615. / 330.7 / 12841 3 10 6 .34
Provision for bad debts on individual basis:
□适用√不适用
Provision for bad debts on portfolio basis:
√适用□不适用
Portfolio basis: commercial acceptance bill portfolio
Unit: Yuan Currency: RMB
Closing balance
Item
Book balance Provision for bad debts Provision ratio (%)
Commercial
acceptance bills 9620735.51 481036.78 5.00
portfolio
total 9620735.51 481036.78 5.00
Explanation of provision for bad debts on portfolio basis
□适用√不适用
According to the expected credit loss general model to accrual provision for bad debts:
□适用√不适用
Basis for dividing each stage and proportion of provision for bad debts：
None
Explanation of the significant change in the book balance of notes receivable due to changes in
provisions for losses incurred during the current period:
□适用√不适用
(5). Provision for bad debts
√适用□不适用
Unit: Yuan Currency: RMB
Movement in this period
Category Beginning
Closing
Recover Recover
balance balanceAccrual y or Accrual y or Accrual
reversal reversal
Provision for
bad debts on
individual - - - - - -
basis
Provision for
bad debts on
portfolio 1505330.76 -1024293.98 - - - 481036.78
basis
Total 1505330.76 -1024293.98 - - - 481036.78
The amount of provision for bad debts recovered or reversed in the current period is important:182
□适用√不适用
Other notes:
None
(6). Notes receivable actually written off in this period
□适用√不适用
The important write-off of notes receivable:
□适用√不适用
Notes for write-off of notes receivable:
□适用√不适用
Other notes:
□适用√不适用
5. Accounts receivable
(1). Disclosure by aging
√适用□不适用
Unit: Yuan Currency: RMB
Aging Closing book balance Beginning book balance
Within one year (including 1
year) 654370764.20 598992361.10
Subtotal of within one year 654370764.20 598992361.10
1 to 2 years 676293.78 2482959.01
2 to 3 years 332920.15 5.75
3 years or more
3 to 4 years 0.10 0.15
4 to 5 years 0.07 -
5 years or more 3333587.50 3333587.50
Total 658713565.80 604808913.51
(2). Disclosure by method of provision for bad debts
√适用□不适用
Unit: Yuan Currency: RMB
Closing balance Beginning balance
Book balance Provision for Provision forbad debts Book balance bad debts
Category Provis BookPropo Provisi
Book
Amou Amou ion value Amou Propo Amou on value
nt rtion nt ratio nt rtion(%) (%) nt ratio(%) (%)
Provision for
bad debts on
individual - - - - - - - - - -
basis
Including:
B Provision 6587 100.0 1721 2.61 6414 6048 100.0 2578 4.26 5790183
for bad debts 1356 0 6533 9703 0891 0 0397. 2851
on portfolio 5.80 .65 2.15 3.51 28 6.23
basis
Including:
Aging 2766 1721 2594 4448 2578 4190
analysis 3318 42.00 6533 6.22 1665 2086 73.55 0397. 5.80 4046
portfolio 5.66 .65 2.01 3.63 28 6.35
High credit 3820 3820 1599 1599
rating 8038 58.00 - - 8038 8804 26.45 - - 8804
portfolio 0.14 0.14 9.88 9.88
6587 100.0 1721 6414 6048 2578 5790Total 1356 6533 / 9703 0891 100.0 0397. / 2851
5.800.652.153.510286.23
Provision for bad debts on individual basis:
□适用√不适用
Provision for bad debts on portfolio basis:
√适用□不适用
Portfolio basis: Aging analysis portfolio High credit rating portfolio
Unit: Yuan Currency: RMB
Closing balance
Name
Book balance Provision for bad debts Provision ratio (%)
Aging analysis
portfolio 276633185.66 17216533.65 6.22
High credit rating
portfolio 382080380.14 - -
Total 658713565.80 17216533.65 2.61
Explanation of provision for bad debts on portfolio basis:
√适用□不适用
Portfolio basis: Aging analysis portfolio
Item Book balance Provision for bad debts Provision ratio (%)
Within one year 272290384.06 13614519.19 5.00
(including one year)
1-2 years 676293.78 135258.76 20.00
2-3 years 332920.15 133168.06 40.00
3-4 years 0.10 0.08 80.00
4-5 years 0.07 0.06 80.00
Over 5 years 3333587.50 3333587.50 100.00
Subtotal 276633185.66 17216533.65 6.22
According to the expected credit loss general model to accrual provision for bad debts
□适用√不适用
Basis for division into different stages and provision for bad debts ratio
None
Explanation of significant changes in the book balance of accounts receivable for which loss reserves
have changed during the current period:
□适用√不适用184
(3). Provision for bad debts
√适用□不适用
Unit: Yuan Currency: RMB
Movement in this period
Transfer
Category Beginning Recoverbalance Accrual y or or
Other Closing balance
written-o movemereversal ff nt
Provision for
bad debts on
individual - - - - - -
basis
Provision for
bad debts on 25780397. -8563863.63 - - - 17216533.65
portfolio basis 28
Total 25780397.
28-8563863.63---17216533.65
Including significant amount of recovery or reversal of provision for bad debts:
□适用√不适用
Other notes:
None
(4). Accounts receivable written-off during this period
□适用√不适用
The important write-off of accounts receivable:
□适用√不适用
Notes for write-off of accounts receivable:
□适用√不适用
(5). Information on the top five accounts receivable and contract assets by debtor as at the period
end.√适用□不适用
Other notes:
The aggregate amount of the top five accounts receivable by debtor at the end of the reporting
period based on the closing book balance was RMB 359773050.02 which accounted for 54.62% of the
total closing book balance of accounts receivable and the aggregate closing book balance of the
corresponding provision for bad debts for accounts receivable was RMB 0.00.Other notes:
√适用□不适用
For details of accounts receivable in foreign currency at year end please refer to the description
of “Notes to Consolidated Financial Statements Items — Items in foreign currencies” in this note.185
6. Contract assets
(1). Information of contract assets
□适用√不适用
(2). The amount and reasons for major changes in the carrying amount during the reporting period
□适用√不适用
(3). Disclosure by method of provision for bad debts
□适用√不适用
Provision for bad debts on individual basis:
□适用√不适用
Notes for provision for bad debts on individual basis:
□适用√不适用
Provision for bad debts on portfolio basis:
□适用√不适用
According to the expected credit loss general model to accrual provision for bad debts:
□适用√不适用
Basis for dividing each stage and proportion of provision for bad debts：
None
Explanation of the significant change in the book balance of notes receivable due to changes in
provisions for losses incurred during the current period:
□适用√不适用
(4). Provision for bad debts for contract assets in this period
□适用√不适用
Of which the amount of provision for bad debts recovered or reversed in this period is significant:
□适用√不适用
Other notes:
None
(5). Contract assets actually written off in this period
□适用√不适用
The important write-off of contract assets:
□适用√不适用
Notes for write-off of contract assets:
□适用√不适用
Other notes:
□适用√不适用186
7. Accounts receivable financing
(1). Accounts receivable financing classification
√适用□不适用
Unit: Yuan Currency: RMB
Item Closing balance Beginning balance
Bank acceptance bills 4521096517.16 4132822845.08
Letter of credit 2013752289.44 2495840907.17
Letter of guarantee
Total 6534848806.60 6628663752.25
(2). Pledged receivables financing at the end of period
√适用□不适用
Unit: Yuan Currency: RMB
Item Amount pledged at the end of period
Bank acceptance bills 3794556164.33
Total 3794556164.33
(3). Receivables financing that the Company has endorsed or discounted at the end of the period
and has not yet expired on the balance sheet date
√适用□不适用
Unit: Yuan Currency: RMB
Item Amount derecognized at the end Amount not derecognized at theof period end of the period
Bank acceptance bills 12190413559.43
Total 12190413559.43
(4). Disclosure by classification of provision for bad debts
√适用□不适用
Unit: Yuan Currency: RMB
Closing balance Beginning balance
Book balance Provision for Provision forbad debts Book balance bad debts
Category Provis Book Provisi Book
Amou Ratio Amou ion value Amou Ratio Amou on value
nt (%) nt ratio nt (%) nt ratio
(%)(%)
Provision for
bad debts on
individual - - - - - - - - - -
basis
Including:
Provision for 6534 6628bad debts on 8488 100.0
65346628
portfolio 0 - - 8488 6637
100.0663
basis 06.60 06.60 52.25
0752.2
5
Including:
Low risk 6534 100.0 - - 6534 6628 100.0 - - 6628187
group 8488 0 8488 6637 0 663
06.6006.6052.25752.2
5
6534653466286628
Total 8488 100.0 - - 8488 6637 100.0 - / 663
06.60006.6052.250752.25
Provision for bad debts on individual basis:
□适用√不适用
Notes for bad debts on individual basis:
□适用√不适用
Provision for bad debts on portfolio basis:
√适用□不适用
Portfolio basis: Low credit risk portfolio
Unit: Yuan Currency: RMB
Closing balance
Name
Book balance Provision for bad debts Provision rate (%)
Low credit risk
portfolio 6534848806.60 - -
Total 6534848806.60 - -
Notes for bad debts on portfolio basis
□适用√不适用
According to the expected credit loss general model to accrual provision for bad debts
□适用√不适用
Basis for dividing each stage and proportion of provision for bad debts
None
Explanation of the significant change in the book balance of receivables financing due to changes in
provisions for losses incurred during the current period:
□适用√不适用
(5). Provision for bad debts
□适用√不适用
Of which the amount of provision for bad debts recovered or reversed in this period is significant:
□适用√不适用
Other notes:
None
(6). Receivable financing written-off during this period
□适用√不适用
The important write-off of receivables financing
□适用√不适用188
Notes for write-off of receivables financing:
□适用√不适用
(7). Changes in accounts receivable financing and changes in fair value during the period:
√适用□不适用
Item Beginning balance Change in cost in Changes in Faircurrent period value for the year Closing balance
Bank acceptance 4132822845.08 388273672.08 - 4521096517.16
bills
Letter of credit 2495840907.17 -482088617.73 - 2013752289.44
Total 6628663752.25 -93814945.65 - 6534848806.60
Continued:
Accumulated loss
allowance
Item Cost in beginning Cumulative fair recognized inof year Cost at year end value change other
comprehensive
income
Bank acceptance
bills 4132822845.08
4521096517.16--
Letter of credit 2495840907.17 2013752289.44 - -
Total 6628663752.25 6534848806.60 - -
(8). Other notes
√适用□不适用For details of receivables financing in foreign currency at year end please refer to the “Notes toConsolidated Financial Statements Items-Items in foreign currencies” in this note.
8. Prepayments
(1). Prepayments by aging
√适用□不适用
Unit: Yuan Currency: RMB
Closing balance Beginning Balance
Aging
Amount Ratio (%) Amount Ratio (%)
Within one
year 1421556773.29 99.92 2430641708.29 99.94
1 to 2 years 872795.64 0.06 1232368.92 0.05
2 to 3 years 75949.20 0.01 53119.99 0.00
Over 3 years 197453.51 0.01 200462.05 0.01
Total 1422702971.64 100.00 2432127659.25 100.00
Note to significant prepayment was aging over 1 year but not settled:
At the end of the period there was no significant prepayments with aging over 1 year.
(2). Information on the top five prepayments by recipient as at the end of period
√适用□不适用189
Other notes:
The aggregate amount of the top five prepayments by recipient at the end of the period was RMB
651883194.27 accounting for 45.82% of the total closing balance of prepayments.
Other notes:
√适用□不适用
No obvious signs of impairment were found in the prepayments at the end of period so no
provision for bad debts was made.
9. Other receivables
Presented by item
√适用□不适用
Unit: Yuan Currency: RMB
Item Closing balance Beginning balance
Interest receivable
Dividends receivable
Other receivables 939052382.12 441295980.89
Total 939052382.12 441295980.89
Other notes:
□适用√不适用
Interest receivable
(1). Interest receivable by category
□适用√不适用
(2). Significant overdue interest
□适用√不适用
(3). Disclosure by provision for bad debts method
□适用√不适用
Provision for bad debts on individual basis:
□适用√不适用
Explanation on provision for bad debts on individual basis:
□适用√不适用
Provision for bad debts on portfolio basis:
□适用√不适用
(4). Provision for bad debts based on the general model of expected credit losses
□适用√不适用
Basis for dividing each stage and proportion of provision for bad debts
None190
Explanation of the significant change in the book balance of interest receivable due to changes in
provisions for losses incurred during the current period:□适用 √不适用
(5). Provision for bad debts
□适用√不适用
Of which the amount of provision for bad debts recovered or reversed in this period is significant:
□适用√不适用
Other notes:
None
(6). Interests receivable written off during this period
□适用√不适用
The important write-off of Interest receivable
□适用√不适用
Notes for write-off:
□适用√不适用
Other notes:
□适用√不适用
Dividends receivable
(7). Dividends receivable
□适用√不适用
(8). Significant dividends receivable aged over 1 year
□适用√不适用
(9). Disclosure by provision for bad debts method
□适用√不适用
Provision for bad debts on individual basis:
□适用√不适用
Notes for provision for bad debts on individual basis:
□适用√不适用
Provision for bad debts on portfolio basis:
□适用√不适用
(10).Provision for bad debts based on the general model of expected credit losses
□适用√不适用
Basis for dividing each stage and proportion of provision for bad debts:
None191
Explanation of the significant change in the book balance of interest receivable due to changes in
provisions for losses incurred during the current period:
□适用√不适用
(11).Provision for bad debts
□适用√不适用
Of which the amount of provision for bad debts recovered or reversed in this period is significant:
□适用√不适用
Other notes:
None
(12).Dividends receivable actually written off during this period
□适用√不适用
The important write-off of dividends receivable
□适用√不适用
Notes for write-off of dividends receivable:
□适用√不适用
Other notes:
□适用√不适用
Other receivables
(13).Disclosure by aging
√适用□不适用
Unit: Yuan Currency: RMB
Aging Book balance at year end Book balance in beginning ofyear
Within one year (including one
year) 977920553.59 242427180.77
Subtotal of within one year 977920553.59 242427180.77
1 to 2 years 8743030.55 85728844.26
2 to 3 years 433733.98 3661669.31
3 years or more
3 to 4 years 222330.31 2745144.91
4 to 5 years 1688996.37 139314257.57
Over 5 years 643434.95 617660.15
Total 989652079.75 474494756.97
(14).Disclosure by nature
√适用□不适用
Unit: Yuan Currency: RMB
Nature Book balance at year end Book balance in beginning ofyear
Current accounts 712596.02 -192
Deposits and security deposits 612081682.85 139546752.32
Petty cash 489974.46 635042.32
Tax refund receivable 47668521.42 147415292.09
Others 328699305.00 186897670.24
Total 989652079.75 474494756.97
(15). Information of provision for bad debts accural
√适用□不适用
Unit: Yuan Currency: RMB
First stage Second stage Third stage
Provision for bad Expected Expected credit Expected credit
debts credit loss loss for lifetime (no loss for lifetime Totalwithin next 12 credit impairment (credit impairment
months occurred) has occurred)
Balance of 1
January 2025 33198776.08 33198776.08
Balance of 1
January 2025
Movement in this
period
--Transfer to
second stage
--Transfer to
third stage
--Reverse to
second stage
--Reverse to first
stage
Provision for the
year 17400921.55 17400921.55
Reversal in the
year
Transfer in the
year
Write-off in the
year
Other movement
Balance of 31
December 2025 50599697.63 50599697.63
Basis for dividing each stage and proportion of provision for bad debts:
The basis for dividing each stage is detailed in the note “Impairment of Financial Instruments” in
“Significant accounting policies and accounting estimates - financial instruments”.Note on the significant changes in other receivables book balance that have changed the loss provision
in the current period:
□适用√不适用
Basis for accruing provision for bad debts for the current period and assessing whether the credit risk
of financial instruments has increased significantly:
√适用□不适用193
The basis input values assumptions and other information used to determine the provision for
bad debts amount and the assessment of whether the credit risk of financial instruments have
increased significantly since initial confirmation are detailed in the note “Credit Risk” in “Risks relatedto financial instruments - various risks arising from financial instruments”.
(16).Provision for bad debts
√适用□不适用
Unit: Yuan Currency: RMB
Movement in this period
Category Beginning Recover
Transfe Other
balance r or Closing balanceAccrual y or movem
reversal written-off ent
Provision for
bad debts on - - - - - -
individual basis
Provision for
bad debts on 33198776.08 17400921.55 - - - 50599697.63
portfolio basis
Total 33198776.08 17400921.55 - - - 50599697.63
Of which the amount of provision for bad debts reversed or recovered in this period is significant:
□适用√不适用
Other notes:
None
(17).Other receivables actually written off during this period
□适用√不适用
The important write-off of other receivables:
□适用√不适用
Notes for write-off of other receivables:
□适用√不适用
(18).Other receivables due from the top five debtors
√适用□不适用
Unit: Yuan Currency: RMB
Proportion of
Company Closing other receivables Provision for bad
Name balance at the end of the Nature Aging debts closing
period (%) balance
Employee
Stock 26582502 Within 16.67 26.86 Other year 13291251.33Ownership Plan
ADMIS
SINGAPORE 24950611
Security
5.40 25.21 deposit and
Within 1
year 12475305.77PTE. LTD. deposit
STANDARD Security
CHARTERED 14057600 Within 1
SINGAP 0.00
14.20 deposit and
deposit year
7028800.00194
Nanhua Security
Futures Co. 10395738 Within 16.23 10.50 deposit and year 5197869.31Ltd. deposit
NANHUA
SINGAPORE 50661567
Security.02 5.12 deposit and
Within 1
PTE. LTD. deposit year
2533078.35
Total 810526095.32 81.89 / / 40526304.77
(19).Other receivables reported due to centralized management of funds
□适用√不适用
Other notes:
√适用□不适用For details of other receivables in foreign currency at year end please refer to the “Notes toConsolidated Financial Statements Items — Items in foreign currencies” in this note.
10. Inventories
(1). Inventories by category
√适用□不适用
Unit: Yuan Currency: RMB
Closing balance Beginning balance
Provision for Provision for
decline in decline in
value of value of
Item Book inventories/ inventories/
balance Provision for Book value
Book Provision for Book
impairment balance impairment value
of contract of contract
performance performance
cost cost
Raw materials 15481408 393194470. 15088214 16087805 424312687. 1566349
974.6862504.06277.58982589.60
Work-in-progr
ess
Finished 5868864 33142039.7 58357222 60481917 170079374. 5878112
goods 269.83 2 30.11 56.86 92 381.94
Reusable 14013232 - 14013232. 47963877. 4796387materials .34 34 74 - 7.74
Consumptive
biological
assets
Contract
performance
cost
Semi-finished 2476601 117500875. 23591006 31313562 528963521. 2602392
goods 499.33 61 23.72 99.01 04 777.97
Subcontractin
g processing 40180906 40180906 59499665. 5949966
materials 0.10
-0.1008-5.08195
Construction 13129251 13129251.in progress .78 - 78 - - -
Total 24255826 543837385. 23711988 25374816 112335558 2425146288.06 95 902.11 876.27 3.94 1292.33
[Note] There were no restricted inventories at the end of the period.
(2). Data resources identified as inventory
□适用√不适用
(3). Provision for decline in value of inventories and provision for impairment of contract
performance cost
√适用□不适用
Unit: Yuan Currency: RMB
Increased amount in Amount reduced in this
this period period
Item Beginningbalance Ot Ot Closing balance
Accrual h Transfer back orwrite-off her er
Raw
materials 424312687.98 931450916.86 - 962569134.22 - 393194470.62
Work-in-p
rogress
Finished
goods 170079374.92 134727786.20 - 271665121.40 - 33142039.72
Reusable
materials
Consumpt
ive
biological
assets
Contract
performa
nce cost
Semi-finis
hed goods 528963521.04 262567648.41 - 674030293.84 - 117500875.61
Issued
goods
Total 1123355583.9 1328746351.4
47-1908264549.46-543837385.95
Reasons for reversal of provision for decline in value of inventories in the current period
√适用□不适用
Category Specific basis for determining netReasons for reversal of provision
realizable value for decline in value of inventories
and impairment of contract
performance cost
Raw materials The estimated selling price of theThe products produced have been
product produced minus thesold in the current period196
estimated cost to completion
estimated selling expenses and
related custom duty
Finished goods Estimated selling price minusSold in current period
estimated selling expenses and
related custom duty
Semi-finished goods The estimated selling price of theThe products produced have been
product produced minus thesold in the current period
estimated cost to completion
estimated selling expenses and
related custom duty
Provision for Inventory Impairment on portfolio basis
□适用√不适用
Standards for provision of Inventory Impairment on portfolio basis
□适用√不适用
(4). Capitalization of borrowing costs amount in closing balance of inventories and its calculation
standard and basis
□适用√不适用
(5). Contract performance cost amortization
□适用√不适用
Other notes:
□适用√不适用
11. Assets held for sale
□适用√不适用
12. Non-current assets due within one year
□适用√不适用
Debt investments due within one year
□适用√不适用
Other debt investments due within one year
□适用√不适用
Notes for non-current assets due within one year:
None
13. Other current assets
√适用□不适用
Unit: Yuan Currency: RMB
Item Closing balance Beginning balance197
Costs of obtaining a contract
Receivables of returned goods
VAT carry forward 4705309056.04 5836821035.13
VAT input tax pending for
verification 19557.52 361062.62
Prepaid enterprise income tax 13114520.34 824555914.01
Receivable settlement guarantee 10001609.54 10049607.61
Receivable of monetary security
deposits 1889172934.38 880983876.84
Receivable of pledged security
deposits 101722384.00 90585040.00
Treasury bond reverse repurchase
Others
Total 6719340061.82 7643356536.21
Other notes:
None
14. Debt Investment
(1). Information of debt investment
□适用√不适用
Changes in the provision for impairment of debt investment in the current period
□适用√不适用
(2). Important debt investment at the end of period
□适用√不适用
(3). Information of provision for impairment
□适用√不适用
Basis for dividing each stage and proportion of provision for bad debts:
None
Note on the significant changes in debt investment book balance that have changed the loss provision
in the current period:
□适用√不适用
Basis for accruing provision for bad debts for the current period and assessing whether the credit risk of
financial instruments has increased significantly:
□适用√不适用
(4). Debt investment written-off during this period
□适用√不适用
The important write-off of debt investment:
□适用√不适用
Notes for write-off of debt investment:
□适用√不适用198
Other notes:
□适用√不适用
15. Other debt investment
(1). Information of other debt investment
□适用√不适用
Changes in impairment provisions for other debt investment during the period
□适用√不适用
(2). Important other debt investments at the end of period
□适用√不适用
(3). Information of provision for impairment
□适用√不适用
Basis for division of each stage and the proportion of impairment provision:
None
Note on the significant changes in other investment book balance that have changed the loss provision
in the current period:
□适用√不适用
Basis for accruing provision for bad debts for the current period and assessing whether the credit risk of
financial instruments has increased significantly
□适用√不适用
(4). Other debt investment actually written off during this period
□适用√不适用
The important write-off of other investment:
□适用√不适用
Notes for write-off of other debt investment:
□适用√不适用
Other notes:
□适用√不适用
16. Long-term receivables
(1). Information of long-term receivables
□适用√不适用
(2). Disclosure of provision for bad debts
□适用√不适用199
Provision for bad debts on individual basis:
□适用√不适用
Explanation on provision for bad debts on individual basis:
□适用√不适用
Provision for bad debts on portfolio basis:
□适用√不适用
(3). Provision for bad debts made under the general expected credit loss model
□适用√不适用
Basis for dividing each stage and proportion of provision for bad debts
None
Note on the significant changes in debt investment book balance that have changed the loss provision
in the current period
□适用√不适用
Basis for accruing provision for bad debts for the current period and assessing whether the credit risk of
financial instruments has increased significantly
□适用√不适用
(4). Provision for bad debts
□适用√不适用
Of which the amount of provision for bad debts recovered or reversed in this period is significant:
□适用√不适用
Other notes:
None
(5). Long-term receivables actually written off during this period
□适用√不适用
The important write-off of Long-term receivables
□适用√不适用
Notes for write-off of Long-term receivables:
□适用√不适用
Other notes:
□适用√不适用
17. Long-term equity investment
(1). Long-term equity investment
√适用□不适用
Unit: Yuan Currency: RMB
Invest Begin Movement in the period Closin Closin200
ee ning Invest g g
balan ment Adjus Annou balan balan
ce Decr incom tmen Chan nced ce ce of(book Additi ease e/loss t of ges distrib Provis (book provisvalue) onal in recog othernized comp of
ution ion
of for Other
value) ion
invest inves for
ment tmen under rehe
other
equit cash impair
s impai
t the nsive y divide ment rmentequity inco nd or
metho me profit
d
I. Joint ventures
Subtot
al
II. Associates
Wuxi
Xishan 7375 5149 7890
g Bank 8548 - - 7078. - - - - - 8256 -
Co. 2.90 53 1.43
Ltd.Chenju
(Suzho
u)
Scienc
e and
Techn 8282 -7414 7541ology 521.7 - - - - - - - 094.0 -
Innova 5 27.69 6
tion
Develo
pment
Co.Ltd.Subtot 7458 5075 7966
al 6800 - - 5650. - - - - - 2365 -4.65 84 5.49
745850757966
Total 6800 - - 5650. - - - - - 2365 -
4.65845.49
(2). Impairment testing of long-term equity investments
□适用√不适用
Other notes:
At the end of the period there was no obvious sign of impairment of long-term equity investment so
no Provision for impairment.
18. Other equity instruments investment
(1). Information of other equity instruments investment
□适用√不适用201
(2). Description of the circumstances of derecognition in this period
□适用√不适用
Other notes:
□适用√不适用
19. Other non-current financial assets
□适用√不适用
Other notes:
□适用√不适用
20. Investment properties
Investment properties measurement model
(1). Investment properties measured at cost model
Unit: Yuan Currency: RMB
Item Housing andbuildings Land use rights Total
I. Book value
1.Beginning balance 247575131.00 34797725.56 282372856.56
2.Increase 45605937.37 - 45605937.37
(1)Purchase - - -
(2) Transfer of inventory
fixed assets and construction in
progress
(3)Addition by business
combination
(4) Transfer of fixed assets 45605937.37 - 45605937.37
3.Decrease
(1)Disposal
(2)Other decrease
4.Closing balance 293181068.37 34797725.56 327978793.93
II. Accumulated depreciation and amortization
1.Beginning balance 66531717.43 8209292.96 74741010.39
2.Increase 16829454.27 695954.71 17525408.98
(1)Amortization for the year 11326726.56 695954.71 12022681.27
(2)Transfer from fixed assets 5502727.71 - 5502727.71
3.Decrease
(1)Disposal
(2)Other decrease
4.Closing balance 83361171.70 8905247.67 92266419.37
III. Provision for impairment
1.Beginning balance
2.Increase
(1) Provision
3.Decrease
(1)Disposal202
(2)Other decrease
4.Closing balance
IV. Book value
1. Closing book value 209819896.67 25892477.89 235712374.56
2. Beginning book value 181043413.57 26588432.60 207631846.17
(2). Information of investment properties without property certificate
□适用√不适用
(3). Impairment test of investment real estate using cost measurement model
□适用√不适用
Other notes:
□适用√不适用
21. Fixed assets
Presented by item
√适用□不适用
Unit: Yuan Currency: RMB
Item Closing balance Beginning balance
Fixed assets 148630305580.41 147008441268.04
Fixed assets for disposal -
Total 148630305580.41 147008441268.04
Other notes:
□适用√不适用203
Fixed assets
(1). Fixed assets
√适用□不适用
Unit: Yuan Currency: RMB
Item Houses and buildings Special equipment Transportation Generaltools equipment Ships Total
I. Book value:
1.Beginning balance 43527294464.78 160594059189.42 522515612.51 1021711606.10 559634194.27 206225215067.08
2.Increase 4210234112.94 8379339206.66 6921059.17 116950989.97 372068170.71 13085513539.45
(1) Purchase - 4587188.82 6921059.17 40271274.57 372068170.71 423847693.27
(2) Transfer from
construction in progress 4210234112.94 8374752017.84 - 76679715.40 - 12661665846.18
(3) Addition by
business combination
(4) Others
3.Decrease 49376921.71 32439695.92 20597320.44 10644472.42 - 113058410.49
(1) Disposal or scrap 1716434.58 17547022.33 20500894.24 10069553.70 - 49833904.85
(2) Others 47660487.13 14892673.59 96426.20 574918.72 - 63224505.64
4.Closing balance 47688151656.01 168940958700.16 508839351.24 1128018123.65 931702364.98 219197670196.04
II. Accumulated depreciation
1.Beginning balance 10061560062.75 47846749903.19 414245095.18 725023110.13 169195627.79 59216773799.04
2.Increase 1904636016.12 9358845404.88 35854997.17 74769748.03 20613750.33 11394719916.53
(1) Provision 1904636016.12 9358845404.88 35734989.69 74769748.03 20613750.33 11394599909.05
2)Business
combination - - 120007.48 - - 120007.48
3.Decrease 6180208.42 13365015.45 18153850.16 6430025.91 - 44129099.94
(1) Disposal or scrap 677480.72 13365015.45 18153850.16 5962371.75 - 38158718.08
(2) Others 5502727.70 - - 467654.16 - 5970381.86204
4.Closing balance 11960015870.45 57192230292.62 431946242.19 793362832.25 189809378.12 70567364615.63
III. Provision for impairment
1.Beginning balance
2.Increase
(1) Provision
3.Decrease
(1) Disposal or scrap
4.Closing balance
IV. Book value
1. Closing book value 35728135785.56 111748728407.54 76893109.05 334655291.40 741892986.86 148630305580.41
2. Beginning book
value 33465734402.03 112747309286.23 108270517.33 296688495.97 390438566.48 147008441268.04205
(2). Information of fixed assets with temporary idle
□适用√不适用
(3). Fixed assets held under operating lease rent-out
□适用√不适用
(4). Fixed assets without property certificate
√适用□不适用
Unit: Yuan Currency: RMB
Item Book value Reasons for not completing thecertificate of title
Houses and buildings 6178823956.00 Still being processed
(5). Impairment test of fixed assets
□适用√不适用
Other notes:
□适用√不适用
Fixed asset disposal
□适用√不适用
22. Construction in progress
Presented by item
√适用□不适用
Unit: Yuan Currency: RMB
Item Closing balance Beginning balance
Construction in progress 28521160284.95 37725460975.09
Construction materials 635617363.88 668370300.18
Total 29156777648.83 38393831275.27
Other notes:
□适用√不适用
Construction in progress
(1). Information of construction in progress
√适用□不适用
Unit: Yuan Currency: RMB
Closing balance Beginning balance
Book Provision ProvisionItem
balanc for Book
Book
impairmen balance balan
for Book
e ce impairmen balancet t
Annual output of 7332934 7332934 11587165 11587165
1.6 million tonnes 171.04 - 171.04 209.77 209.77206
of
high-performance
resin and new
material projects
Project with an
annual output of
800000 tonnes of 1978874 1978874 2552165 2552165
functional 415.12 - 415.12 674.92 674.92
polyester film and
functional plastics
Annual production
of 600000 tonnes
of functional
polyester film
functional film and 7010673 - 7010673 7547919 7547919
3 billion square 411.59 411.59 837.74 837.74
meters of lithium
battery diaphragm
project
New Material
Industrial Park 6848736 - 6848736 6347735 6347735
Phase II Project 921.78 921.78 625.44 625.44
Other sundry 5349941 - 5349941 9690474 9690474projects 365.42 365.42 627.22 627.22
Total 2852116 - 2852116 37725460 377254600284.95 0284.95 975.09 - 975.09
(2). Changes in significant construction in progress
√适用□不适用
Unit: Yuan Currency: RMB207
Beginn Proportion Cumulativ
Budg ing Incre Transfer Other Closing of Progress e amount
Including: Capitalizat
Item to fixed decrea cumulative of interest interest ion rate Sourceet balanc ase
e assets se
balance input to % capitalizati capitalized for the of fund
budget (%) on in the year year (%)
Annual output of Trial
1.6 million tonnes 19.98
of 8 11587 8130
productio
1652 8537 506731 - 733293 112.91 n partial 1061250 3496453
Self-financ
ing and
high-performance billio 09.77 8.09 6416.82 4171.04 transfer to 918.50 45.01
3.66
loans
resin and new n fixed
material projects assets
Project with an Trial
annual output of 11.12 2552 1993 productio800000 tonnes of 5 16567 9360 772684 - 197887 n partial 3331153 8832220
Self-financ
ing and
functional billio 4.92 9.37 869.17 4415.12
46.48 transfer to 89.70 7.74 3.09 loans
polyester film and n fixed
functional plastics assets
Annual production
of 600000 tonnes
of functional Trial
polyester film 12.49 7547 7075 productio
functional film and 4 91983 4672 124479 - 701067 n partial 2931594 1461355
Self-financ
ing and
3 billion square billio 7.74 6.37 3152.52 3411.59
66.08 transfer to 36.24 68.93 3.07 loans
meters of lithium n fixed
battery diaphragm assets
project
New Material
Industrial Park 7.868 6347 5010
Partial
Self-financ
Phase II Project billio 73562 0129 - -
684873
6921.7887.05
trial 2913526 1098216 3.55 ing and
n 5.44 6.34 productio 49.40 85.43 loansn
51.47280342221231712
Total 5 9863 027 708479 - 18919.5 1978878 6939248 /
billio 47.87 010.1 4438.51 3 393.84 07.11208
n 7209
(3). Provision for impairment of construction in progress
□适用√不适用
(4). Impairment test of construction in progress
□适用√不适用
Other notes:
□适用√不适用
Construction materials
(5). Information of construction materials
√适用□不适用
Unit: Yuan Currency: RMB
Closing balance Beginning balance
Provi
sion
Item Book for Book Provision Book Provision
balance impai balance for balan for
rmen impairment ce impairment
t
Special materials 635504661 - 63550466 668109411 66810941.58 1.58 .93 1.93
Special equipment 112702.30 - 112702.30 260888.25 260888.25
Total 635617363 - 63561736 668370300 - 66837030.88 3.88 .18 0.18
Other notes:
At the end of the period there were no obvious indication of impairment of construction in
progress so no provision for impairment was provided.
23. Productive biological assets
(1). Productive biological assets using cost measurement model
□适用√不适用
(2). Impairment test of productive biological assets using the cost-based measurement model
□适用√不适用
(3). Productive biological assets measured using the fair value model
□适用√不适用
Other notes:
□适用√不适用210
24. Oil and gas assets
(1). Information of oil and gas asset
□适用√不适用
(2). Impairment testing of oil and gas assets
□适用√不适用
Other notes:
None
25. Right-of-use assets
(1). Information of right-of-use assets
√适用□不适用
Unit: Yuan Currency: RMB
Item Houses and buildings Ships Others Total
I. Book Value
1. Beginning
balance 180271137.41 399397566.24 7106282.50 586774986.15
2. Increase 117920933.13 - - 117920933.13
(1) Leases 85969753.98 - - 85969753.98
(2) Others 31951179.15 - - 31951179.15
3. Decrease 90341816.24 399397566.24 - 489739382.48
(1) Disposal 73084461.67 - - 73084461.67
(2) Other 17257354.57 399397566.24 - 416654920.81
4. Closing
balance 207850254.30 - 7106282.50 214956536.80
II. Accumulated depreciation
1. Beginning
balance 141545030.71 8648160.67 532971.18 150726162.56
2. Increase 47809525.22 11846178.65 177657.06 59833360.93
(1) Provision 39468574.69 11846178.65 177657.06 51492410.40
(2) Other 8340950.53 - - 8340950.53
3. Decrease 70213110.73 20494339.32 - 90707450.05
(1) Disposal 70213110.73 - - 70213110.73
(2) Other - 20494339.32 - 20494339.32
4. Closing
balance 119141445.20 - 710628.24 119852073.44
III. Provision for impairment
1. Beginning
balance - - - -
2. Increase - - - -
(1) Provision
3. Decrease - - - -
(1) Disposal
4. Closing
balance - - - -
IV. Book Value211
1. Closing book value 88708809.10 - 6395654.26 95104463.36
2. Beginning book
value 38726106.70 390749405.57 6573311.32 436048823.59
(2). Impairment test of right-of-use assets
□适用√不适用
Other notes:
None
26. Intangible assets
(1). Information of intangible assets
√适用□不适用
Unit: Yuan Currency: RMB
Item Land use rights Patent rights Software usagerights Total
I. Book value
1.Beginning
balance 9532141340.31
1631388380.0
0186242223.4411349771943.75
2.Increase - 120065331.88 260702.95 120326034.83
(1) Purchase - 8864432.57 260702.95 9125135.52
(2) In-house
research and
development
(3) Addition by
business combination
(4) Transfer from
construction in - 111200899.31 - 111200899.31
progress
(5) Other
3.Decrease - 12998520.00 20269.20 13018789.20
(1) Disposal
(2) Other - 12998520.00 20269.20 13018789.20
4. Closing 9532141340.31 1738455191.8balance 8 186482657.19 11457079189.38
II. Accumulated amortization
1. Beginning
balance 1351598092.60 686410238.95 164592754.92 2202601086.47
2. Increase 189063956.98 137558931.75 17019215.97 343642104.70
(1) Provision 189063956.98 137558931.75 17019215.97 343642104.70
(2) Other
3.Decrease - - 18908.08 18908.08
(1) Disposal
(2) Other - - 18908.08 18908.08
4.Closing balance 1540662049.58 823969170.70 181593062.81 2546224283.09212
III. Provision for impairment
1. Beginning
balance
2. Increase
(1) Provision
3. Decrease
(1) Disposal
4. Closing
balance
IV. Book Value
1. Closing book
value 7991479290.73 914486021.18 4889594.38 8910854906.29
2. Beginning
book value 8180543247.71 944978141.05 21649468.52 9147170857.28
At the end of the period the intangible assets formed through the Company's internal research and
development accounted for 0% of the balance of intangible assets.
(2). Data resources recognized as intangible assets
□适用√不适用
(3). Land use rights pending for ownership certificates
√适用□不适用
Unit: Yuan Currency: RMB
Item Book value Reasons for not completing theproperty ownership certificate
Land use rights 26540342.00 Still being processed
(4). Impairment test of intangible assets
□适用√不适用
Other notes:
□适用√不适用
27. Goodwill
(1). Goodwill book value
√适用□不适用
Unit: Yuan Currency: RMB
Increase Decrease
Investee or matters
formed the Beginning
Formation Formation Closing
balance by business Others by businessgoodwill balancecombinatio combinatio other
n n
Hengli Futures Co.Ltd. 77323123
Hengli
- - - Futures 7732312.69 Co. Ltd. 3.69
Total 77323123 - - - Total 7732312213.693.69
(2). Provision for impairment of goodwill
□适用√不适用
(3). Information about goodwill's assets group or assets group portfolio
√适用□不适用
Determination
Item method of assets Operating segment Whether consistent withgroup or assets and basis previous year
group portfolio
Hengli Futures Co. Ltd. Hengli Futures Co. Headquarters and Yes
Ltd. is mainly other business
engaged in futures divisions
brokerage business
and there is an
active market which
can bring
independent cash
flow and can be
identified as a
separate assets
group.Changes in asset groups or asset group portfolio
□适用√不适用
Other notes:
□适用√不适用
(4). Determination method and basis of recoverable amount
1) Important assumptions and basis
* Assumption of relatively stable macroeconomic environment: The value of any asset is
directly related to its macroeconomic environment. In this evaluation it is assumed that the social
industrial policy tax policy and macro environment remain relatively stable and there are no major
changes in interest rates and exchange rates so as to ensure that the evaluation conclusion has a
reasonable period of use.* Continuing operation assumption; it is assumed that the operating business of the assets group
portfolio business entity is legal and can maintain its continuous operation status in the future.* Assuming that the current and future operators of the assets group portfolio business entity
are responsible and their company management has the ability to assume their duties steadily
promote the Company's development plan and maintain a good business situation.* Assuming that there are no significant changes in interest rates exchange rates tax
benchmarks tax rates and policy-related fees.* Assuming that the enterprise's business scope business model and business scale do not
undergo significant changes based on its existing management methods and management level.The recoverable amount is determined by the net amount of fair value less disposal expenses：
√适用□不适用
Unit: Yuan Currency: RMB
Item Book value Recoverable Impairment Determinati Key Basis for214
amount amount on methods parameter determining
of fair value key
and disposal parameters
expenses
Hengli
Futures Co. 849182717 909097390 - Note 1 Note 1 Note 1
Ltd. .57 .03
Total 849182717 909097390.57 .03 / / /
Note 1:
The recoverable amount of the asset group of Hengli Futures Co. Ltd. is determined based on the
fair value estimated using the market method. Due to the difficulty in collecting complete data related
to transaction cases and the inability to understand whether there are non-fair value factors involved
this valuation is not suitable for using the transaction case comparison method. There are mature listed
companies in the futures industry in China that can be selected for analysis and comparison so the
listed company comparison method can be used.Specifically the listed company comparison method generally first selects listed companies that
are in the same industry as the assets group portfolio and that are actively traded as comparable
companies and then calculate the market value of the comparable companies based on the trading
stock prices. Secondly select one or several value ratio parameters of comparable companies (usually
including profitability assets revenue and other specific parameters) as “analysis parameters” Then
calculate the Ratio relationship between the Market price value of comparable companies and the
selected analysis parameters - called the ratio multiplier (Multiples). The ratio multiplier needs to be
adjusted before being applied to the corresponding analysis parameters of the Assets group portfolio
to reflect the difference between the comparable company and the assets group portfolio. Apply the
above-mentioned adjusted ratio multiplier to the corresponding analysis parameters of the assets
group portfolio to obtain the fair value of the evaluation object. Expressed in the formula as follows:
Fair value of assets group portfolio＝Analysis Parameters × Modified Ratio Multiplier
Including: Adjusted ratio multiplier = ratio multiplier of comparable companies × comprehensive
correction factor
The recoverable amount is determined based on the present value of the expected future cash flow
□适用√不适用
The reasons for the significant inconsistencies between the aforementioned information and the
information used in previous years' impairment tests or external information
□适用√不适用
The reasons for the significant discrepancy between the information used in the Company's previous
year's impairment test and the actual situation in the current year
□适用√不适用
(5). Performance commitments and corresponding goodwill impairment
There is a performance commitment when forming goodwill and the reporting period or the previous
reporting period is within the performance commitment period
□适用√不适用
Other notes:
√适用□不适用
Calculation process of goodwill impairment loss
Item Hengli Futures Co. Ltd.215
Carrying amount of goodwill* 77323123.69
Balance of provision for impairment of goodwill* -
Carrying amount of goodwill* ＝* -* 77323123.69
Value of goodwill attributable to minority interests not recognized* -
Goodwill that not include the value attributable to minority interests not 77323123.69
recognized* =* +*
Goodwill that not include the value attributable to minority interests not 77323123.69
recognized apportioned to each assets group*
Carrying amount of the assets group* 771859593.88
Carrying amount of the Assets group that contains the overall Goodwill 849182717.57
*=*+*
Recoverable amount of assets group or assets group portfolio* 909097390.03
Impairment loss of goodwill(* is larger than zero)* =* -* -
Impairment loss of goodwill attributable to the Company -
28. Long-term deferred expenses
√适用□不适用
Unit: Yuan Currency: RMB
Item Beginning Increase Amortization Other Decrease Closing balance
balance
Catalyst 1899390889.7
6860620012.42654285989.43115605411.431990119501.32
Renovation
costs 66892455.79 874231.29 12143456.24 - 55623230.84
Others 14267403.67 8460224.23 9935446.75 - 12792181.15
Total 1980550749.2
2869954467.94676364892.42115605411.432058534913.31
Other notes:
None
29. Deferred tax assets / deferred tax liabilities
(1). Deferred tax assets before offsetting
√适用□不适用
Unit: Yuan Currency: RMB
Closing balance Beginning balance
Item Deductible Deferred Deductible Deductible
temporary income tax temporary temporary
differences Assets differences differences
Provision for
impairment of assets
Unrealized profit of
internal transactions 401725149.45 71348232.98 831361049.72 125997598.80
Deductible tax loss
Provision for bad debts 51248928.20 9362386.95 35029871.50 6705240.88
Provision for decline in 1107228099.8
value of inventories 516146895.71 128111170.50 1 275947973.40
Changes in fair value
included in current profit 84605185.20 21151296.30 5203402.51 1300850.63
or loss (decrease)
Non-deducted tax losses 985788322.27 213360220.38216
Government grants 510693188.19 106471134.21 281681962.55 57109253.01
Lease liabilities 51903528.08 12254096.32 407135045.06 101017661.43
Total 2602111197.1 562058537.64 2667639431.10 5 568078578.15
(2). Deferred tax liabilities before offsetting
√适用□不适用
Unit: Yuan Currency: RMB
Closing balance Beginning balance
Item Taxable Deferred income Taxable Taxable
temporary tax temporary temporary
difference liabilities differences difference
Increase in value by
assets appraisal of
business combination
not under common
contract
Changes in fair value of
other debt investments
Changes in fair value of
other equity instrument
investments
Changes in fair value
included in current profit 392358.94 98089.74 1654500.28 248175.05
or loss (increase)
Initial investment cost of
long-term equity
investment calculated by
equity method is less 79415493.16 11912323.97 79415493.16 11912323.97
than the share of the
owner's equity of the
investee
Fixed assets accelerated
depreciation 153179836.48 24984200.86 165910541.75 27064991.63
Lease liabilities 50777358.66 12021624.91 404253070.25 100339401.64
Total 283765047.24 49016239.48 651233605.44 139564892.29
(3). Net amount of deferred tax assets or liabilities after offsetting
√适用□不适用
Unit: Yuan Currency: RMB
Closing balance Beginning balance
Closing offset Closing balance Beginning offset Beginningof deferred balance of
Item amount of amount of
deferred income income tax deferred income deferred income
tax assets and assets orliabilities after tax assets and
tax assets or
liabilities liabilities afteroffsetting liabilities offsetting
Deferred tax assets 12021624.91 550036912.73 100339401.64 467739176.52
Deferred tax liabilities 12021624.91 36994614.57 100339401.64 39225490.65217
(4). Details of unrecognized deferred tax assets
√适用□不适用
Unit: Yuan Currency: RMB
Item Closing balance Beginning Balance
Deductible temporary
differences
Deductible tax loss
Provision for bad debts 17083184.98 25454632.62
Provision for decline in value
of inventories 27690490.24 16127484.13
Changes in fair value included
in current profit or loss 256275.00
(decrease)
Non-deducted tax losses 982655710.91 714682845.15
Provisions
Lease contracts 481530.49 747326.06
Unrealized profit of internal
transactions 29407240.29 29407240.29
Total 1057574431.91 786419528.25
(5). Deductible tax loss of unrecognized deferred income tax assets will expire in the following year
√适用□不适用
Unit: Yuan Currency: RMB
Year Amount at year end Amount in beginning ofyear Note
2025-9201812.42
202628770550.2210231942.99
2027293440103.32210668163.70
2028207643288.70210935993.75
202962106094.59208785316.17
2030167393846.68
203464859616.12
2035223441959.92
Total 982795843.43 714682845.15 /
Other notes:
□适用√不适用
30. Other non-current assets
√适用□不适用
Unit: Yuan Currency: RMB
Closing balance Beginning balance
Book Provision for Book value Book Provision Book value
Item balance impairment balance for
impairmen
t
Contract
acquisition
costs218
Contract
performance
costs
Cost of
returned goods
Contract assets
Prepayment for
long-term asset 576691162 - 5766911 13473085 1347308
purchase .56 62.56 92.31 592.31
Unrealized
gains and losses
on sale and
leaseback
Futures
membership 1400000.0 - 1400000. 1400000.0 1400000.Investment 0 00 0 00
Total 578091162 - 5780911 13487085 1348708.56 62.56 92.31 592.31
Other notes:
None
31. Ownership or using rights of assets subject to restriction
√适用□不适用
Unit: Yuan Currency: RMB
Closing balance Beginning balance
Item Book Book value Type of Restricted Book Book value Type of Restricted
Balance restriction situation Balance restriction situation
Notes
Receivable
Inventories
Including:
Data
resources
Pledge to Pledge to
Fixed 10016757 4548571 secure sale 6318766 2977144 secure sale
assets 404.70 126.70Pledge and 725.98 519.87Pledge andleaseback leaseback
contracts contracts
Pledge to Pledge to
obtain obtain
Intangible 4864751 4124766Pledge financing 5252851 4499663Pledge financingassets 414.69 879.82 credit from 010.28 682.99 credit from
financial financial
institutions institutions
Including:
Data
resources
Cash and Pledge to Pledge to
bank 6319762 6319762 obtain 6282648 6282648 obtain
balances 888.81 888.81Pledge financing 692.94 692.94Pledge financing
credit from credit from219
financial financial
institution institution
Cash and Security Security
bank deposits deposits
balances 2534520. 2534520. for trading for trading
97 97Pledge in futures
3792584.3792584.
10 10Pledge in futuresand and
financial financial
derivatives derivatives
Pledge to Pledge to
obtain obtain
Receivable 3794556 3794556Pledge financing 3468255 3468255 financings Financing 164.33 164.33 credit from 192.24 192.24Pledge credit from
financial financial
institutions institutions
Pledge to Pledge to
obtain obtain
Fixed 1034219670191753Pledge financing 1150491281952932 financingassets 6133.41 437.74 credit from 0119.69 651.52Pledge credit from
financial financial
institutions institutions
Pledge to Pledge to
Constructi obtain obtain
on in1553671015536710Pledge financing 2093818220938182 financing
progress 988.28 988.28 credit from 875.02 875.02
Pledge credit from
financial financial
institutions institutions
Total 1439570310451865 15731361120122629515.19 6006.65 / / 7200.25 0198.68 / /
Other notes:
None
32. short-term loans
(1).Short-term loan by category
√适用□不适用
Unit: Yuan Currency: RMB
Item Closing balance Beginning balance
Pledged Loans 160000000.00 2276660116.86
Mortgage loans 1254003831.39 1381182194.47
Guaranteed loans 14510770358.25 12890594208.74
Credit Loan 21428599463.37 20667393324.99
Discount of commercial
acceptance bills 33773015178.86 41826118999.78
Total 71126388831.87 79041948844.84
Note to short-term loans by category:
None
(2).Overdue and unpaid short-term loans
□适用√不适用220
Information of important overdue and unpaid short-term loans:
□适用√不适用
Other notes:
□适用√不适用
33. Financial liabilities held for trading
√适用□不适用
Unit: Yuan Currency: RMB
Item Beginning balance Closing balance Specified reasonsand basis
Financial liabilities held for trading 88092248.88 282239615.36 /
Including:
Derivative financial liabilities 88092248.88 282239615.36 /
Designated as financial liabilities
at fair value through profit or loss 415695007.98 672922880.87
Including:
Deposit precious metals 415695007.98 672922880.87 Risk management
Total 503787256.86 955162496.23 /
Other notes:
□适用√不适用
34. Derivative financial liabilities
□适用√不适用
35. Notes Payable
(1). Notes payable presented by item
√适用□不适用
Unit: Yuan Currency: RMB
Category Closing balance Beginning balance
Commercial acceptance
bills 1557097640.33 2370456766.77
Bank acceptance bills 625152092.60 469121994.86
Letter of credit 1707278726.49 8607727516.70
Total 3889528459.42 11447306278.33
The total amount of overdue and unpaid notes payable at the end of this period was 0 Yuan.
36. Accounts payable
(1). Accounts payable presented by item
√适用□不适用
Unit: Yuan Currency: RMB
Item Closing balance Beginning balance
Within one year 7644621640.38 6644449495.74
1-2 years 2139390103.50 1951836469.35
2-3 years 806234615.05 626020068.08
Over 3 years 313838359.76 267351588.96221
Total 10904084718.69 9489657622.13
(2). Important accounts payable aging over 1 year
□适用√不适用
Other notes:
□适用√不适用
37. Advance from customers
(1). Advance from customers presented by item
□适用√不适用
(2). Significant advance from customers with aging over one year
□适用√不适用
(3). Amount and reason for significant changes in the book value during the reporting period
□适用√不适用
Other notes:
□适用√不适用
38. Contract liabilities
(1). Information of contract liabilities
√适用□不适用
Unit: Yuan Currency: RMB
Item Closing balance Beginning balance
Within 1 year 10236913545.70 7178669804.98
1-2 years 21409071.61 42840296.14
2-3 years 11464567.18 4566596.63
Over 3 years 10692108.58 10964770.53
Total 10280479293.07 7237041468.28
(2). Significant contract liabilities with aging over one year
□适用√不适用
(3). Amount and reasons for significant changes in the book value during the reporting period
□适用√不适用
Other notes:
□适用√不适用
39. Employee benefits payable
(1). Employee benefits payable presented by item
√适用□不适用
Unit: Yuan Currency: RMB222
Item Beginningbalance Increase Decrease Closing balance
I. Short-term employee
benefits 489128803.31
5038370994.55063369852.7
95464129945.15
II. Post-employment
benefits -defined 4329917.71 362071452.77 365540981.55 860388.93
contribution plans
III. Termination benefits
IV. Others benefits due
within one year
Total 493458721.02 5400442447.3 5428910834.36 0 464990334.08
(2). Short-term employee benefits presented by item
√适用□不适用
Unit: Yuan Currency: RMB
Item Beginningbalance Increase Decrease Closing balance
I. Salaries bonus and 486603895.13 4573364207. 4596401292.1allowances 38 3 463566810.38
II. Staff welfare 248328.92 90104662.76 90342339.75 10651.93
III. Social insurances 838035.01 213321041.03 213955458.61 203617.43
Including: Medical
insurance 748073.38 176325820.29 176874372.21 199521.46
Work injury
insurance 28283.45 26406405.55 26430593.03 4095.97
Maternity insurance 61678.18 10568217.07 10629895.25 -
Other 20598.12 20598.12 -
IV. Housing fund 1236740.00 121330842.30 122270928.30 296654.00
V. Union funds and staff
education 93726.06 39749277.49 39790792.14 52211.41
VI. Vocation leave -
VII. Short-term profit
sharing plan -
VIII. Compensation for
termination of labor 108078.19 500963.63 609041.82
relations
IX. Others
Total 489128803.31 5038370994. 5063369852.759 5 464129945.15
(3). Defined contribution plans presented by item
√适用□不适用
Unit: Yuan Currency: RMB
Item Beginningbalance Increase Decrease Closing balance
1.Basic pension insurance 4233025.70 351061989.10 354444694.37 850320.43
2.Unemployment insurance 96892.01 11009463.67 11096287.18 10068.50
3.Corporate annuity plan
Total 4329917.71 362071452.77 365540981.55 860388.93223
Other notes:
√适用□不适用
The Company participates in the pension insurance and unemployment insurance plans
established by government agencies in accordance with the regulations. Apart from this the Company
no longer undertakes further payment obligations and the corresponding expenditures are included in
the current profit or loss or the cost of related assets when incurred.
40. Taxes payable
√适用□不适用
Unit: Yuan Currency: RMB
Item Closing balance Beginning balance
Value-added tax 498253292.17 121635953.21
Consumption tax 527461478.00 256162322.48
Business tax
Enterprise income tax 692996711.98 403409814.06
Individual income Tax
Urban maintenance and
construction tax 69293501.67 23855165.40
Property tax 47586701.02 49180907.09
Stamp duty 113447683.75 114648791.54
Land use tax 18462570.00 19518965.89
Education surcharge 29795508.98 10232828.41
Local education surcharges 19863672.68 6821885.63
Withholding individual income
Tax 11997506.44 12476235.24
Withholding value-added tax
Environmental protection tax 4545595.44 4579593.54
Other 928630.44
Total 2034632852.57 1022522462.49
Other notes:
None
41. Other payables
(1). Presented by item
√适用□不适用
Unit: Yuan Currency: RMB
Item Closing balance Beginning balance
Interest payable
Dividends payable
Other payables 399011597.06 375249175.51
Total 399011597.06 375249175.51
Other notes:
□适用√不适用
(2). Interest payable
Presented by category:
□适用√不适用224
Important overdue interest:
□适用√不适用
Other notes:
□适用√不适用
(3). Dividends Payable
Presented by category:
□适用√不适用
(4). Other payables
Other payables by nature
√适用□不适用
Unit: Yuan Currency: RMB
Item Closing balance Beginning balance
Security deposits 157680584.01 168031729.28
Current accounts 215716547.09 182546194.70
Others 25614465.96 24671251.53
Total 399011597.06 375249175.51
Other significant payables aged over 1 year or overdue
□适用√不适用
Other notes:
√适用□不适用For details of other foreign currency payables please refer to the “Notes on ConsolidatedFinancial Statement Items - Items in foreign currencies”.
42. Liabilities held for sale
□适用√不适用
43. Non-current liabilities due within one year
√适用□不适用
Unit: Yuan Currency: RMB
Item Closing balance Beginning balance
Long-term loans due within
one year 17794997445.64 13847490632.39
Bonds payable due within one
year 8919444.47
Long-term payables due within
one year 1301677116.42 978337334.48
Lease liabilities due within one
year 30720731.14 55665568.78
Total 19136314737.67 14881493535.65
Other notes:
1. Long-term loans due within one year
(1) Details225
Category Closing balance Beginning balance
Pledged loans 284786289.53
Credit loan 6850897726.83 3331466844.22
Guaranteed loan 1511432444.48 2225667823.61
Mortgage loan 9147880984.80 8290355964.56
Subtotal 17794997445.64 13847490632.39
2. Bonds payable due within one year
Bond name Face valueCoupon rateIssuance date Term Issuance amount Beginning
(Yuan) (%) balance
25 Hengli
Petrochemical 100 2.47 2025/4/9 36.00 500000000.00
MTN001
Continued:
Bond name Bonds Accrued Closing
issued ininterest forAmortization ofCurrent balance Default or
this period the currentexcess discount repayment notperiod
25 Hengli
Petrochemical - 8919444.47 - - 8919444.47 No
MTN001
3. Long-term payables due within one year
Item Closing balance Beginning balance
Finance lease payables 1364109428.66 1078890476.94
Less: Unrecognized financing 62432312.24 100553142.46
costs
Subtotal 1301677116.42 978337334.48
44. Other current liabilities
Information of other current liabilities
√适用□不适用
Unit: Yuan Currency: RMB
Item Closing balance Beginning balance
Short-term bonds payable 2616518962.63 2016752688.15
Payables of returned goods
Output VAT pending for
transfer 1295665241.36 917896215.55
Notes receivable not
derecognized
Payable of monetary security
deposits 4513709530.18 3340676297.58
Payable of pledged security
deposits 101722384.00 90585040.00
Futures risk reserve 24532879.06 20831493.78
Payable of Futures Investor
Protection Fund 126058.09 98966.88
Total 8552275055.32 6386840701.94226
Changes in short-term bonds payable:
√适用□不适用
Unit: Yuan Currency: RMB
Bond Face Coupon Issuanc Term Issuance Beginning Accrued Closing
name value rate (%) e date amount balance Bonds interest Amortizat
(Yuan) issued in for the ion of
Current balance
repayme Default orthis current excess nt notperiod period discount
1002024/712100000010096111187735511006.31022000
2024CP001 2.20 /15 months 000.00 635.20 8.46 4 000.00 - No
100 2.15 2024/8 12 1000000 1007141 1375537 603570.6 10215002024CP002 /20 months 000.00 052.95 6.37 8 000.00 - No
100 1.85 2025/6/2 12 1000000 - 9990566 9506944 484800.8 10090482025CP001 5 months 000.00 03.78 .46 3 - 349.07 No
100 1.84 2025/8/1 12 1000000 - 9990566 6611111 327568.1 - 10059952025CP002 9 months 000.00 03.78 .43 5 283.36 No
100 1.79 2025/10/ 12 6000000 - 5994339 1939166 102201.2 - 60147532025CP003 24 months 00.00 62.27 .67 6 30.20 No
Total / / / 4600000 2016752 2597547 4368995 2029147 2043500 2616518/ 000.00 688.15 169.83 7.39 .26 000.00 962.63 /
Other notes:
□适用√不适用227
45. Long-term loans
(1). Long-term loans by category
√适用□不适用
Unit: Yuan Currency: RMB
Item Closing balance Beginning balance
Pledged Loans
Mortgage loans 50631314813.28 59412435099.73
Guaranteed loans 2196850025.24 2903020169.24
Credit loans 7986174910.90 9973650609.36
Total 60814339749.42 72289105878.33
Note to long-term loans by category:
None
Other notes:
√适用□不适用For details of long-term loans in foreign currencies please refer to the description of “Notes onConsolidated Financial Statement Items — Items in foreign currencies228
46. Bonds payable
(1). Bonds payable
√适用□不适用
Unit: Yuan Currency: RMB
Item Closing balance Beginning balance
Bond face value 500000000.00
Less: Interest rate adjustment 1074423.45
Total 498925576.55
(2). Specific information of bonds payable: (Excluding preferred stocks perpetual bonds and other financial instruments classified as financial liabilities
√适用□不适用
Unit: Yuan Currency: RMB
Bond Face value Coupo Issuance Term Issuance Beginning Accrued Closing
name (Yuan) n rate date amount balance Bondsissued in interest
Amortizat Current balance
(%) this for the
ion of
excess repayme
Default
period current
or not
period discount
nt
25 Hengli
Petroche 100.00 2.47 2025/4/9 3 years 5000000 4985849 340670.8 4989255mical 00.00 05.66 - 9 - 76.55 No
MTN001
Total / / / / 5000000 4985849 - 340670.8 - 498925500.00 05.66 9 76.55 No
(3). Note to convertible corporate bonds
□适用√不适用
Accounting treatment and judgment basis for equity conversion229
□适用√不适用
(4). Notes on other financial instruments classified as financial liabilities
Basic information on preferred shares perpetual bonds and other financial instruments issued at the end of the period
□适用√不适用
Table of changes in financial instruments such as preferred shares and perpetual bonds issued at the end of the period
□适用√不适用
Explanation of the basis for the classification of other financial instruments into financial liabilities
□适用√不适用230
Other notes:
□适用√不适用
47. Lease liabilities
√适用□不适用
Unit: Yuan Currency: RMB
Item Closing balance Beginning balance
1-2 years 22692973.30 39710593.60
2-3 years 21579878.36 31881655.32
Over 3 years 19330554.87 233203689.94
Total 63603406.53 304795938.86
Other notes:
None
48. Long-term payables
Presented by item
√适用□不适用
Unit: Yuan Currency: RMB
Item Closing balance Beginning balance
Long-term payables 1456319918.43 2301784112.38
Special payable -
Total 1456319918.43 2301784112.38
Other notes:
□适用√不适用
Long-term payables
(1). Long-term payables by nature
√适用□不适用
Unit: Yuan Currency: RMB
Item Closing balance Beginning balance
Finance lease payables 2937904546.30 3528892120.62
Less: Unrecognized financing costs -179907511.45 -248770673.76
Less: Long-term payables due
within one year -1301677116.42 -978337334.48
Subtotal 1456319918.43 2301784112.38
Other notes:
None
Special payables
(1). Special payables by nature
□适用√不适用
49. Long-term employee benefits payable
□适用√不适用
50. Provision for liabilities
□适用√不适用
51. Deferred income
Deferred income situation
√适用□不适用
Unit: Yuan Currency: RMB
Item Beginningbalance Increase Decrease Closing balance
Reason of
formation
Government
grants 3851089558.89 1286942398.62 283365264.57 4854666692.94 Asset-related
Total 3851089558.89 1286942398.62 283365264.57 4854666692.94 Asset-related
Other notes:
√适用□不适用
For details on government grants included in deferred income please refer to the “Government Grants”
section of this note.
52. Other non-current liabilities
□适用√不适用
53. Share capital
√适用□不适用
Unit: Yuan Currency: RMB
Increase or decrease (+ -)
Issuance CapitalBeginning balance
New Bonus reserve
Closing balance
shares converted Others Subtotalshares
to shares
Total
shares 7039099786.00 7039099786.00
Other notes:
None
54. Other equity instruments
(1). Basic information on preferred shares perpetual bonds and other financial instruments issued
at the end of the period
□适用√不适用
(2). Table of changes in financial instruments such as preferred shares and perpetual bonds issued at
the end of the period
□适用√不适用
Changes of other equity instruments in the current period reasons for the changes and basis for
relevant accounting treatment:
□适用√不适用
Other notes:
□适用√不适用
55. Capital reserve
√适用□不适用
Unit: Yuan Currency: RMB
Item Beginning balance Increase Decrease Closing balance
Capital premium
(Capital 18609470542.25 - - 18609470542.25
premium)
Other capital
reserve 235700058.28 34575569.00 - 270275627.28
Total 18845170600.53 34575569.00 - 18879746169.53
Other note including the increase and decrease in the current period and the reason for the change:
In this period due to the recognition of share payment expenses in the employee stock ownership
plan the Company increased the capital reserve by RMB 34575569.00.
56. Treasury Stock
□适用√不适用
57. Other comprehensive income
√适用□不适用
Unit: Yuan Currency: RMB
Movement in the period
Less: included
in other
Less: comprehensive
Beginning transferred income in the Less: Amount
Amount
Item balance Amount before to profit or previous period income attributable to
attributable Closing balance
tax to minorityloss in and transferred tax parent company interests
current year to retained expenses after tax after tax
earnings in the
current period
I. Other
comprehensive
income not
reclassified into
profit or loss
subsequently
Including: changes
in amount on
remeasurement of
defined benefit plan
Other
comprehensive
income not
reclassified to profit
or loss under equity
method
Changes in fair
value of other
equity instrument
investments
Changes in the
fair value of the
enterprise’s own
credit risk
II. Other
comprehensive
income that will be
reclassified into -26381521.04 -95007123.12 - - - -95007123.12 - -121388644.16
profit or loss
subsequently
Including: other
comprehensive
income that will be
transferred to profit
or loss under equity
method
Changes in fair
value of other debt
investments
Reclassification of
financial assets
recognized in other
comprehensive
income
Provision for
credit loss of other
debt investments
Cash flows
hedge reserve -104980754.98 -24697269.24 - - - -24697269.24 - -129678024.22
Translation
difference of foreign 78599233.94 -70309853.88 - - - -70309853.88 - 8289380.06
currency financial
statements
Total other
comprehensive -26381521.04 -95007123.12 - - - -95007123.12 - -121388644.16
income
Other notes including the adjustment of the initial recognition amount of the hedged item for the effective part of the cash flow hedging profit or loss:
None
58. Special reserve
√适用□不适用
Unit: Yuan Currency: RMB
Item Beginning balance Increase Decrease Closing balance
Safety
production fee 279243445.05 321641988.48 230933579.16 369951854.37
Total 279243445.05 321641988.48 230933579.16 369951854.37
Other notes including the increase and decrease in the current period and the reason for the change:
None
59. Surplus Reserve
√适用□不适用
Unit: Yuan Currency: RMB
Item Beginning balance Increase Decrease Closing balance
Statutory surplus
reserve 1087391116.57 16523063.72 1103914180.29
Discretionary
surplus reserve
Reserve funds
Enterprise
expansion fund
Others
Total 1087391116.57 16523063.72 1103914180.29
Note including the increase and decrease in the current period and the reason for the change:
The Company appropriates the statutory surplus reserve at 10% of its net profit in accordance with the
“Company Law” and the Company's articles of association. If the accumulated amount of the statutory
surplus reserve reaches more than 50% of the Company's registered capital the appropriation will
cease.
60. Undistributed profit
√适用□不适用
Unit: Yuan Currency: RMB
Item Current year Prior year
Closing balance of prior year 36174653818.01 33094662821.91
Add: adjustments on beginning
balance of undistributed profits
Beginning balance after adjustment 36174653818.01 33094662821.91
Add: Net profit attributable to
parent company for the current year 7074582387.53 7043568223.60
Less: Appropriation of statutory
surplus reserve 16523063.72 92072345.20
Appropriation of discretionary
surplus reserve
Appropriation of general risk
reserve
Appropriation for dividends to
ordinary shares 3730722886.58 3871504882.30
Dividend to ordinary shares
converted to share capital
Closing balance of undistributed
profits 39501990255.24 36174653818.01
Adjustment of undistributed profits at the beginning of the period:
1.Due to the retroactive adjustment of the “Accounting Standards for Business Enterprises” and its
related new regulations the Undistributed profits at the beginning of the period was affected RMB0.
2.Due to changes in accounting policies the undistributed profit at the beginning of the period was
affected RMB 0.
3. Due to the correction of major accounting errors the undistributed profit at the beginning of the
period was affected RMB 0.
4.Changes in the scope of consolidation under common control affecting the undistributed profit at
the beginning of the period RMB 0.
5.Total impact of other adjustments on undistributed profit at the beginning of the period RMB 0.
61. Operating income and operating cost
(1). Operating income and operating cost
√适用□不适用
Unit: Yuan Currency: RMB
Current year Prior year
Item
Revenue Cost Revenue Cost
Primary
operations 198669738877.18 172622066025.71 234097350737.63 211487603931.55
Other
operations 2316296596.98 1946401300.37 2175925740.29 1495727973.39
Total 200986035474.16 174568467326.08 236273276477.92 212983331904.94
(2). Information of operating income and operating cost
√适用□不适用
Unit: Yuan Currency: RMB
Current Issue total
Contract Classification Operating Operating
income Operating costs income
By Industry
Petrochemical Industry 19148269016 166059079126. 218027864307. 195625658783.6.15 25 20 81
Other Industries 9503345308. 8509388199.83 18245412170.7 17357673121.101 2 3
By Product
Refining products 94281404402 74563030924.8 108139408676. 93941172984.9.25 9 87 5
PTA 57225569029 54459535953.8 68122134694.2 65810037790.7.93 8 1 6
Polyester products 39975716733 37036512247.4 41766320936.1 35874448008.1.97 8 2 0
Other 9503345308.01 8509388199.83
18245412170.717357673121.1
23
By Region
Domestic 18315394583 156986422277. 207537749134. 184398751268.6.63 91 93 99
Overseas 17832089637 17582045048.1 28735527342.9 28584580635.9.53795
Total 20098603547 174568467326. 236273276477. 212983331904.4.16 08 92 94
Other notes:
□适用√不适用
(3). Note on performance obligations
□适用√不适用
(4). Description of apportionment to remaining performance obligations
□适用√不适用
(5). Major contract changes or major transaction price adjustments
□适用√不适用
Other notes:
1. Relevant revenue and cost of trial sales
Product name Current year Prior year
Revenue of trial sales 12356672555.11 22383557507.03
Cost of trial sales 12256603159.42 21825706097.04
[Note] The trial operation sales in this period are the external sales of products before the fixed assets
reach the intended usable state.
62. Taxes and surcharges
√适用□不适用
Unit: Yuan Currency: RMB
Item Current year Prior year
Consumption tax 6926928973.83 4756923453.81
Business tax
Urban maintenance and
construction tax 768049261.35 570171674.81
Education surcharge 329519694.37 244378641.96
Resource tax
Property tax 211522324.90 192096809.48
Land use tax 88589077.41 86443597.02
Vehicle and vessel use tax
Stamp duty 403321865.88 388784433.34
Local education surcharge 219679796.11 162919094.73
Environmental protection tax 20086130.67 20909186.35
Security for the disabled
Others 1057055.10 980963.38
Total 8968754179.62 6423607854.88
Other notes:
Please refer to the explanation of “Taxation” for details of the payment standard.
63. Selling expenses
√适用□不适用
Unit: Yuan Currency: RMB
Item Current year Prior year
Logistics transportation fee
Staff salaries 176129449.71 190501931.91
Travel expenses 5674727.99 5137633.52
Warehousing related costs 73988450.31 100572952.97
Business entertainment expenses 3928704.11 3123871.01
Office expenses 24746658.25 16611459.32
Other expenses 6605267.62 10483667.54
Total 291073257.99 326431516.27
Other notes:
None
64. Administrative expenses
√适用□不适用
Unit: Yuan Currency: RMB
Item Current year Prior year
Staff salaries 1034212570.19 924003824.29
Depreciation and amortization 645137588.78 679339976.89
Office expenses 703295031.49 493133816.19
Travel expenses 43954323.21 47817950.56
Business entertainment expenses 22215972.56 22256670.64
Other expenses 47450697.63 38123022.58
Total 2496266183.86 2204675261.15
Other notes:
None
65. Research and development expenses
√适用□不适用
Unit: Yuan Currency: RMB
Item Current year Prior year
Staff salaries 530504447.26 527568467.52
Direct materials 694141998.71 816211871.79
Fuel and power 181513606.12 174869258.49
Depreciation and amortization 194502969.33 149429684.00
Others 25031848.22 34804952.10
Total 1625694869.64 1702884233.90
Other notes:
None
66. Financial expenses
√适用□不适用
Unit: Yuan Currency: RMB
Item Current year Prior year
Interest expenses 5037577601.19 5856857050.44
Including: interest expenses on lease
liabilities 9208654.72 11109653.15
Less: interest capitalized -975708838.93 -1512622465.05
Less: interest income -336460433.17 -373603744.54
Less: fiscal interest discount -1082089.46
Net exchange gain or loss 509142432.50 1043224117.17
Handling fees and others 149923293.87 219779150.23
Total 4383391966.00 5233634108.25
Other notes:
None
67. Other income
√适用□不适用
Unit: Yuan Currency: RMB
Item Current year Prior year
Government grants received in
current period 1641689107.87 1775850371.26
Amortization of deferred
income 283365264.57 282467509.33
Receive Tax Withholding Fee 2705080.14 2118968.08
Tax reduction and exemption 173466249.85 292990052.71
Total 2101225702.43 2353426901.38
Other notes:
None
68. Investment income
√适用□不适用
Unit: Yuan Currency: RMB
Item Current year Prior year
Income from long-term equity
investment by equity method 50755650.84 99867650.80
Gain from disposal of long-term equity
investment
Investment income of financial assets
held for trading during the holding
period
Investment income of other equity
investment instruments during the
holding period
Interest income from debts investment
during the holding period
Interest income from other debt
investments during the holding period
Gain from disposal of financial assets
held for trading 52133956.07 -38855981.17
Gain from disposal of other equity
instruments investment
Gains from disposal of debts investment
Gain from disposal of other debt
investments
Gains from debt restructuring
Gains from disposal of receivables
financing -198209515.26
Others -136401130.93
Total -33511524.02 -137197845.63
Other notes:
None
69. Gain from net exposure of hedging
□适用√不适用
70. Gains from changes in fair value
√适用□不适用
Unit: Yuan Currency: RMB
Sources of gains or losses from Amount incurred in this
changes in fair value period Previous period amount
Trading financial assets 192727171.28 418144676.68
Among them: gains from changes in
the fair value of derivative financial 191919932.56 418141728.90
instruments
Gains from changes in fair
value of non-derivative financial 807238.72 2947.78
instruments
Trading financial liabilities -372317783.36 -93141461.39
total -179590612.08 325003215.29
Other notes:
None
71. Credit impairment loss
√适用□不适用
Unit: Yuan Currency: RMB
Item Current year Prior year
Bad debts of notes receivable 1024293.98 -1505330.76
Bad debts of accounts receivable 8563863.63 -5696587.35
Bad debts of other receivables -17400921.55 -11415075.75
Impairment loss of debts investment
Impairment loss of other debt
investments
Bad debt of long-term receivables
Impairment losses related to financial
guarantees
Total -7812763.94 -18616993.86
Other notes:
None
72. Asset impairment loss
√适用□不适用
Unit: Yuan Currency: RMB
Item Current year Prior year
I. Bad debt loss
II. Impairment loss on decline in
value of inventories and contract -1328746351.47 -1501661777.85
performance cost
III. Impairment loss of long-term
equity investment
IV. Impairment loss of investment
properties
V. Impairment loss of fixed assets
VI. Impairment loss of construction
materials
VII. Impairment loss of construction
in progress
VIII. Impairment loss of productive
biological assets
IX. Impairment loss of oil and gas
assets
X. Impairment loss of intangible
assets
XI. Impairment loss of goodwill
XII. Others
Total -1328746351.47 -1501661777.85
Other notes:
None
73. Gains from disposal of assets
√适用□不适用
Unit: Yuan Currency: RMB
Item Current year Prior year
Gains from disposal of
non-current assets not classified 2351895.17 2538670.78
as held for sale
Including: Fixed assets -4002.77 2538670.78
Right-of-use assets 363177.59
Intangible assets 1992720.35
Total 2351895.17 2538670.78
Other notes:
None
74. Non-operating income
Information of non-operating income
√适用□不适用
Unit: Yuan Currency: RMB
Amount included in
Item Current year Prior year non-recurring gains and
losses
Total gains on
disposal of 482477.73 27005.69 482477.73
non-current assets
Including: gain from
disposal of fixed 482477.73 27005.69 482477.73
assets
Gain from
disposal of intangible
assets
Gains on barter trade
of non-monetary
assets
Accept donation
Government grants
Indemnity income 26285175.34 14994043.26 26285175.34
Carbon emissions
trading revenue 85762385.03 253267862.17 85762385.03
Initial investment cost
of the long-term
equity investment
calculated by the
equity method is less
than the share of the
owner's equity of the
investee
Others 9900828.91 10303941.67 9900828.91
Total 122430867.01 278592852.79 122430867.01
Other notes:
□适用√不适用
75. Non-operating expenses
√适用□不适用
Unit: Yuan Currency: RMB
Amount included in
Item Current year Prior year non-recurring gains and
losses
Total losses on
disposal of 4338390.98 653526.36 4338390.98
non-current assets
Including: Loss on
disposal of fixed 4338390.98 653526.36 4338390.98
assets
Loss on
disposal of
intangible assets
Losses on barter
trade of
non-monetary assets
External donation 395000.00 2921000.00 395000.00
Fines payment 1000004.14 1000004.14
Compensation
liquidated damages 792036.63 948492.64 792036.63
Tax late fee 2793017.73 1345113.94 2793017.73
Provision for
litigation losses
Others 289320.87 2442570.72 289320.87
Total 9607770.35 8310703.66 9607770.35
Other notes:
None
76. Income tax expense
(1). Income tax expense
√适用□不适用
Unit: Yuan Currency: RMB
Item Current year Prior year
Current income tax 2430766473.24 1960677756.92
Deferred income tax -84528612.29 -193898977.21
Total 2346237860.95 1766778779.71
(2). Reconciliation between income tax expenses and accounting profit
√适用□不适用
Unit: Yuan Currency: RMB
Item Current year
Profits before tax 9420392275.05
Expected income tax expenses at applicable tax
rates 2355098068.84
Effect of different tax rates applied by
subsidiaries -93789191.82
Adjustment for income tax in previous years 58526635.90
Effect of non-taxable income -39939521.91
Effect of non-deductible costs expenses and
losses 112461333.07
Effect of using the deductible temporary
differences or deductible losses for which no
deferred tax asset was recognized in previous -90326002.80
period
Effect of deductible temporary differences or
deductible losses for which no deferred tax 78822177.68
asset was recognized this year
The impact of additional deduction of research
and development expenses -38114817.94
Effect of tax rates adjustment 3499179.93
Income tax expenses 2346237860.95
Other notes:
□适用√不适用
77. Other comprehensive income
√适用□不适用For details of other comprehensive income please refer to the description of “Notes on ConsolidatedFinancial Statements - Other Comprehensive Income”.
78. Notes to cash flow statement
(1). Cash related to operating activities
Cash received from other operating activities
√适用□不适用
Unit: Yuan Currency: RMB
Item Current year Prior year
Recover of bank security deposits 2635632769.79 1282883169.63
Interest income received 336460433.18 369421880.33
Revenue from labor services and
rental services received 142376663.33 205405055.62
Government grants income received 2929713595.96 1954315555.12
Security deposit received 25262575.80 41714258.66
Receive the emissions trading
revenue 91186257.55 258862613.90
Receive the customer’s futures
transaction reserve fund 275701562.49 659061922.84
Net amount received from others
payments and current accounts 302822903.42 98772195.08
Total 6739156761.52 4870436651.18
Note to cash received from other operating activities:
None
Cash paid for other operating activities
√适用□不适用
Unit: Yuan Currency: RMB
Item Current year Prior year
Payment of security deposit to banks 2471644122.36 2635632769.79
Expenses paid in cash 934752240.85 998891219.96
Payment of security deposits 32004240.72 20938591.43
Net amount paid for others
payments and current accounts 212415269.92 262365979.67
Total 3650815873.85 3917828560.85
Note to Cash paid for other operating activities:
None
(2). Cash related to investing activities
Cash received from major investing activities
√适用□不适用
Unit: Yuan Currency: RMB
Item Current year Prior year
Receipts of the redemption of
financial products 38151966926.42 300000000.00
Receipts of margin deposit for
futures contract 273998044.21 193958609.62
Withdrawal of treasury bond reverse
repurchase investment - 1116078000.00
Receipts of other investments such
as bond funds 6191625185.19 2793553429.06
Total 44617590155.82 4403590038.68
Note to Cash received from other investing activities:
None
Cash paid for major investing activities
√适用□不适用
Unit: Yuan Currency: RMB
Item Current year Prior year
Payment of investment in financial
products 39207631043.49 300000000.00
Payment of treasury bond reverse
repurchase investment - 941578000.00
Payment of other investments such
as bond funds 6128222917.37 2808926742.63
Total 45335853960.86 4050504742.63
Note to Cash paid for major investing activities:
None
Other cash received related to investing activities
√适用□不适用
Unit: Yuan Currency: RMB
Item Current year Prior year
Withdraw the bank guarantee 89200271.13 637616325.62
Margin received for commodity
futures contracts 45514158.38 157428226.25
Net other receipts and current
accounts 9143305.69 4046095.37
Total 143857735.20 799090647.24
Note to cash received related to investing activities:
None
Other cash paid related to investing activities
√适用□不适用
Unit: Yuan Currency: RMB
Item Current year Prior year
Margin paid for commodity futures
contracts 2186193.00 89200271.13
Bank guarantee deposit paid 640572760.28 9290460.48
Other payments and net current
accounts 667428293.60 195623771.96
Total 1310187246.88 294114503.57
Note to other cash paid related to investing activities:
None
(3). Cash related to financing activities
Cash received for other financing activities
√适用□不适用
Unit: Yuan Currency: RMB
Item Current year Prior year
Recover of bank security deposits 3584113820.12 3525382532.56
Other cash received related to
financing activities - 417368743.21
Received short-term bond issuance
funds 3096132075.49 1998113207.54
Recover security deposits of
financing leases
Received financing lease payments 500000000.00 1200000000.00
Net amount of cash received from
the sale of treasury shares
Total 7180245895.61 7140864483.31
Note to Cash received for other financing activities:
None
Cash paid for other financing activities
√适用□不适用
Unit: Yuan Currency: RMB
Item Current year Prior year
Payment of security deposit to banks 3270108173.18 3584113820.12
Payment related to leases 1578453077.15 656283317.52
Cash paid for other financing
activities 12645873.80 9940.50
Total 4861207124.13 4240407078.14
Note to Cash paid for other financing activities:
None
Changes in liabilities arising from financing activities
√适用□不适用
Unit: Yuan Currency: RMB
Increase Decrease
Item Beginning Closingbalance Cash changes Non-cash Cash changes Non-cash balance
changes changes
Bank 165178545 107156933 46198852 127044569 17506916 149735726
loans 355.56 779.47 10.11 149.56 8.65 026.93
Other
payabl
es -
divide - 37307228 37307228886.58 6.58 - -nds
payabl
e
Bonds
payabl
e
(includ
ing 201675268 309613207 61557222. 204350000 6578002.5 312436398
those 8.15 5.49 56 0.00 5 3.65
within
one
year)
Lease
liabiliti
es
(includ
ing 360461507. 23274539 405310924. 93571836. 94324137.6
those 63 - 0.98 77 17 7
within
one
year)
[Note]
Long-t
erm
payabl
es
(includ 328012144 500000000. 32268943 976759993. 36805384 275799703
ing 6.86 00 0.23 81 8.43 4.85
those
within
one
year)
Tradin
g
financi 415695007. - 97062053 12645873.8 41850717 955162496.al 98 2.63 0 0.58 23
liabiliti
es
Total 171251576 110753065 99382206 134213508 10617800 156667573006.18 854.96 73.09 828.52 26.38 679.33
[Note] The VAT related to the payment of rental is RMB 106973068.68.
(4). Notes on presenting cash flow on a net basis
□适用√不适用
(5). Significant activities and financial impacts that do not involve current cash receipts and
payments but affect the financial status of the enterprise or may affect the cash flow of the
enterprise in the future
√适用□不适用
Item Current year Prior year
Bill endorsement transfer for
payment of goods 2630574851.61 2845044201.90
79. Supplement to cash flow statement
(1). Supplement to cash flow statement
√适用□不适用
Unit: Yuan Currency: RMB
Supplement information Current year Prior year
1．Reconciliation of net profit to cash flow from operating activities:
Net profit 7074154414.10 7053006882.53
Add: Provision for impairment of
assets 1328746351.47 1501661777.85
Credit impairment loss 7812763.94 18616993.86
Depreciation of fixed assets
depletion of oil and gas assets and
depreciation of productive biological 11369934109.98 10028260408.64
assets
Amortization of right-of-use assets 51492410.40 45959092.39
Amortization of intangible assets 298525849.13 284623661.29
Amortization of long-term deferred
expenses 676364892.42 679573574.35
Losses on disposal of fixed assets
intangible assets and other long-term -2351895.17 -2538670.78
assets (Gain as in “-”)
Loss on retirement of fixed assets
(Gain as in “-”) 3855913.25 626520.67
Losses on changes in fair value (Gain
as in “-”) 179590612.08 -325003215.29
Financial expenses (Gain as in “-”) 3556513080.53 4504905602.14
Investment losses (Gain as in “-”) 33511524.02 -61011669.63
Decrease in deferred tax assets
(Increase as in “-”) -82297736.21 -191413999.54
Increase in deferred tax liabilities
(Decrease as in “-”) -2230876.08 -2484977.67
Decrease in inventories (Increase as
in “-”) -789273961.25 5514431575.73
Decrease in operating receivables
(Increase as in “-”) 2614692444.28 -4501019325.87
Increase in operating payables 4796724351.74 -2059778395.17
(Decrease as in “-”)
Others 6024294.80 244149420.43
Net cash flows from operating
activities 31121788543.43 22732565255.93
2．Significant investment or finance activities not involving cash:
Conversion of debt into capital
Convertible bonds mature within one
year
Fixed assets acquired under finance
leases
Right-of-use assets formed by leasing 85969753.98 404519495.86
3．Net increase / (decrease) in cash and cash equivalents:
Cash and bank balance as at end of
year 23117469543.17 24546461064.45
Less: cash and bank balance at
beginning of year 24546461064.45 15025322771.34
Add: cash equivalents at end of year
Less: cash equivalents at beginning
of year
Net increase in cash and cash
equivalents -1428991521.28 9521138293.11
(2). Net cash paid for acquisition of subsidiaries during the year
□适用√不适用
(3). Net cash received from disposal of subsidiaries during the year
□适用√不适用
(4). Details of cash and cash equivalents
√适用□不适用
Unit: Yuan Currency: RMB
Item Closing balance Beginning balance
I. Cash 23117469543.17 24546461064.45
Including: Cash on hand 730891.88 423193.13
Cash at bank readily available
for payment 19872279949.03 21321198101.26
Other monetary fund readily
available for payment 3244458702.26 3224839770.06
Cash at central bank available
on demand
Deposits with banks and other
financial institutions
Interbank lending
II. Cash equivalents
Including: bonds investment
mature within 3 months
III. Cash and cash equivalents as at
closing balance 23117469543.17 24546461064.45
Including: Restricted cash and cash
equivalents held by the Company or
subsidiaries of the Group
(5). Situation where the using rights of cash and bank balances subject to restriction is still listed as
cash and cash equivalents
□适用√不适用
(6). Monetary funds not classified as cash and cash equivalents
√适用□不适用
Unit: Yuan Currency: RMB
Item Current year Prior year Reason of restriction
Loan guarantee
deposit 3115706229.47 3584113820.12
Not available for immediate
use
Bank acceptance
deposit 1022152014.37 662215665.31
Not available for immediate
use
Letter of credit
deposit 1604014719.70 2034422105.51
Not available for immediate
use
Bond guarantee 1737102.00 1897102.00 Not available for immediateuse
Forward foreign Not available for immediate
exchange margin use
Futures trading
restricted margin 2534520.97 3792584.10
Not available for immediate
use
Restricted time Not available for immediate
deposit certificate 575824400.27 use
Other restricted bank
deposits 328423.00
Not available for immediate
use
Unexpired interest
receivable 12786445.10 3738414.40 Not actually received
Total 6335083854.88 6290179691.44 /
(7). Supplier financing arrangements
1) Terms and conditions of supplier financing arrangements
The Company participates in financing arrangements between suppliers and financial institutions.The primary economic consideration for participating in these arrangements is to provide cash flow
assistance to suppliers rather than to improve the Company's working capital. Under these
arrangements the Company's payment timing remains unchanged but the Company makes
unconditional payments to financial institutions upon maturity as agreed. Economically there is no
substantial change to the Company's cash flows while legally the Company's liabilities to suppliers are
replaced with liabilities to financial institutions. Accordingly the Company derecognizes the notes
payable under such arrangements and recognizes an equivalent amount of short-term borrowings from
financial institutions.In the supplier financing arrangements the Company does not change its payment timing (which
remains the same as the maturity date of the notes payable). In accordance with the principle of
substance over form and to enable financial statement users to better understand the financial
statements the Company treats funds obtained in advance by suppliers under supplier financing
arrangements as being transferred to suppliers by financial institutions acting as the Company's agents
and accordingly recognizes cash inflows from financing activities and cash outflows from operating
activities.
2) Presentation of financial liabilities from supplier financing arrangements in the balance sheet
Item End of period Beginning of period
Short-term loans 3733187404.22 3675398445.32
3) Payment due dates for financial liabilities under supplier financing arrangements
End of period Beginning of period
Comparable Comparable
Item Liabilities under accounts payable Liabilities under accounts payable
supplier financing not subject to supplier financing not subject to
arrangements supplier financing arrangements supplier financing
arrangements arrangements
Notes Payable 6-12 months from 6-12 months from 6-12 months from 6-12 months fromreceipt of invoice receipt of invoice receipt of invoice receipt of invoice
Short-term 6-12 months from 6-12 months from 6-12 months from 6-12 months from
loans receipt of invoice receipt of invoice receipt of invoice receipt of invoice
4) Non-cash changes in carrying amounts of financial liabilities from supplier financing arrangements
during the current period
The increase or decrease in the Company's financial liabilities under supplier financing
arrangements during the current period did not include the impact of business combinations and
exchange rate changes.Other notes:
□适用√不适用
(8). Notes to items in the statement of changes in owner's equity
Explain the “other” items and the adjustment amount for the adjustment of the balance at the end of
the previous year:
□适用√不适用
(9). Items in foreign currencies
(1).Items in foreign currencies
√适用□不适用
Unit: Yuan
Item Closing balance in
Converted into
foreign currency Conversion rate RMB at year endbalance
Cash And Bank Balances -
Including: Us Dollar 598141723.41 7.0288 4204218545.50
Euro 15441.08 8.2355 127165.01
Singapore Dollar 345.60 5.4586 1886.49
Japanese Yen 3650.00 0.0448 163.52
Franc 34410.11 8.8510 304563.88
British Pounds 72.21 9.4346 681.27
Korean Won 1600.00 0.0049 7.84
Accounts Receivable - -
Including: Us Dollar 57361970.93 7.0288 403185821.27
Euro 130340.01 8.2355 1073415.15
Receivables Financing - -
Of Which: Us Dollar 286359345.84 7.0288 2012762570.04
Other Receivables - -
Including: Us Dollar 87644944.15 7.0288 616038783.44
Korean Won 7398000.00 0.0049 36250.20
Short-Term Loans - -
Including: Us Dollar 151386112.31 7.0288 1064062706.20
Notes Payable - -
Of Which: Us Dollar 224946084.33 7.0288 1581101037.54
Euro 1710000.00 8.2355 14082705.00
Japanese Yen 60200000.00 0.0448 2696960.00
Accounts Payable - -
Including: Us Dollar 405351725.44 7.0288 2849136207.77
Euro 23401963.05 8.2355 192726866.70
Japanese Yen 1524845792.00 0.0448 68313091.48
Franc 1144.00 8.8510 10125.54
Other Payables
Including: Us Dollar 2179483.97 7.0288 15319156.93
Non-Current Assets Due Within One
Year - -
Including: Us Dollar 101780271.06 7.0288 715393169.23
Euro 3810977.41 8.2355 31385304.46
Long-Term Loans
Including Us Dollar 650000000.00 7.0288 4568720000.00
Euro 24385711.11 8.2355 200828523.85
Other notes:
None
(2).Explanation of overseas operating entities including for important overseas operating entities
the main overseas business location bookkeeping functional currency and selection basis
should be disclosed and the reasons for changes in bookkeeping functional currency should also
be disclosed.√适用□不适用
Name Place of Reporting Selection basis
business currency
HENGLI PETROCHEMICAL CO. LIMITED China US Dollar The currency of the
Hong Kong primary economic
environment in which
the business operates
is US Dollar
HENGLI PETROCHEMICAL INTERNATIONAL PTE. Singapore US Dollar The currency of the
LTD. primary economic
environment in which
the business operates
is US Dollar
Name Place of Reporting Selection basis
business currency
HENGLI SHIPPING INTERNATIONAL PTE. LTD. Singapore US Dollar The currency of the
primary economic
environment in which
the business operates
is US Dollar
(10). lease
(1). As lessee
√适用□不适用
Variable lease payments not included in the measurement of lease liabilities
□适用√不适用
Simplify the processing of short-term leases or rental fees for low-value assets
√适用□不适用
Unit: Yuan Currency: RMB
Item Current year
Short-term leases 13870431.92
After-sale leaseback transaction and judgment basis
√适用□不适用
In the after-sale leaseback transaction business of the Company the leased property belongs to the
Company at the end of the lease term and does not meet the criteria for sale. The Company uses
after-sale leaseback transactions for financing which is not a common business practice for companies.Total cash outflows related to leasing 1593571847.94 (Unit: Yuan Currency: RMB)
(2). As lessor
Operating lease as lessor
√适用□不适用
Unit: Yuan Currency: RMB
Including: Income related to
Item Rental income variable lease payments not
included in lease receipts
Houses and buildings 25910162.82
total 25910162.82
Financial leasing as a lessor
□适用√不适用
Adjustment table of undiscounted lease receipts and net lease investment
□适用√不适用
Undiscounted lease receipts in the next five years
√适用□不适用
Unit: Yuan Currency: RMB
Annual undiscounted lease receipts
Item
Closing balance Beginning balance
First year 21010815.85 19991621.12
Second year 19753188.99 3483281.16
Third year 11463302.75 725461.53
The fourth year
Fifth year
Total undiscounted lease receipts
after five years
(3). Confirm the profit or loss of financial leasing sales as a manufacturer or distributor
□适用√不适用
Other notes:
None
(11).Data resources
□适用√不适用
(12).Others
□适用√不适用
VIII. Research and development expenditures
1. Listed by nature of expenses
√适用□不适用
Unit: Yuan Currency: RMB
Item Current year Prior year
Staff salaries 530504447.26 527568467.52
Direct materials 694141998.71 816211871.79
Fuel and power 181513606.12 174869258.49
Depreciation and amortization 194502969.33 149429684.00
Others 25031848.22 34804952.10
Total 1625694869.64 1702884233.90
Including: Expensed R&D expenditure 1625694869.64 1702884233.90
Capitalized R&D expenditure
Other notes:
None
2. Expenditure of research and development projects meet capitalized condition
□适用√不适用
Important capitalized research and development projects
□适用√不适用
Provision for impairment of development expenditure
□适用√不适用
Other notes:
None
3. Important outsourcing projects in research
□适用√不适用
IX. Changes in scope of consolidation
1. Business combination not under common control
□适用√不适用
2. Business combination under common control
□适用√不适用
3. Reverse acquisition
□适用√不适用
4. Disposal of subsidiaries
Whether there are transactions or events that result in the loss of control over subsidiaries in the
current period
□适用√不适用
Other notes:
□适用√不适用
Whether there are situations that the investment in a subsidiary is disposed of through multiple
transactions and control is lost in the current period
□适用√不适用
Other notes:
□适用√不适用
5. Changes in the scope of consolidation for other reason
Explain the changes in the scope of consolidation caused by other reasons (such as the establishment
of new subsidiaries liquidation of subsidiaries etc.) and related situations:
√适用□不适用
1．Increase in scope of consolidation
Company name Mode of Equity Contribution Contribution
acquisition acquisition date amount ratio
of equity
Hengli (Dalian) Construction 5 million
Engineering Service Co. Ltd. New 2025/08/21 yuan 100%
Shanghai Hengyao Shenghui
Industrial Co. Ltd. New 2025/09/05
20 million
yuan 100%
2．Decrease in scope of consolidation for other reasons
Company name Disposal Disposal Net assets on Net profit
method date of disposal date from the
equity beginning of
the period to
date of
disposal
Mergers and
Hengli Petrochemical (Dalian) acquisitions
Chemical Co. Ltd. between 2025/12/18 661305.44 161336.70
subsidiaries
6. Others
□适用√不适用
X. Interests in other entities
1. Interest in subsidiaries
(1). Group structure
√适用□不适用
Unit: ten-thousand-yuan Currency: RMB
Shareholding
Name of Place of Registered Place of Nature of (%) Shareholdi
subsidiary busines capitals registration business Dire Indire ng (%)
ct ct
No. 1 Hengli Business
Jiangsu Road Nanma combinati
Hengli China 220800 Industrial Zone manufactur 99.9 ons notChemical Shengze Town ing 9 0.01 under
Fiber Co. Ltd. Wujiang City common
Jiangsu Province control
No. 10 Section
Sichuan 2 Lingang Establishe
Hengli New Avenue
Materials Co. China 23600 Southern
manufactur 100 d by
Ltd. Sichuan Port
ing investmen
Area Sichuan t
Free Trade Zone
Suzhou Business
Susheng Tanqiu Village combinati
Thermal China 26700 Shengze Town manufacturing 100 on underPower Co. Wujiang common
Ltd. control
No. 599
Huanghe South Business
Jiangsu Deli Road Sucheng combinati
Chemical China 75073.87 Economic manufactur ons not
Fiber Co. Ltd. Development ing
100 under
Zone Suqian commoncontrol
City
7th Floor No.
308 Jinkang Business
Hengli Road China combinati
Futures Co. China 75000 (Shanghai) Pilot financial ons not
Ltd. Free Trade industry
100 under
Zone Units common
01-2 02 03 control
and 04
Unit 02 9th
Hengli Floor (Nominal
Hengxin Floor Actual Establishe
Industry & Floor: 8th
Trade China 15000 Floor) No. 759 Wholesale 100
d by
(Shanghai) Yanggao South
investmen
Co. Ltd. Road China
t
(Shanghai) Pilot
Free Trade Zone259
Shanghai Room 901-5199
Hengyao Building 4 No. Wholesale Establishe
Shenghui China 2000 2377 ShenkunRoad Minhang and retail 100
d by
Industrial Co. trade investmen
Ltd. District tShanghai
Textile New
Jiangsu Material
Xuanda Industrial Park Establishe
Polymer China 205000 Wujie Town manufactur 100 d by
Materials Co. Tongzhou ing investmen
Ltd. District t
Nantong City
No. 1 Kaisha
Nantong Road Binjiang Establishe
Teng'an China 50 New Area Transportat d byLogistics Co. Tongzhou ion industry 100 investmen
Ltd. District t
Nantong City
Hengli Textile
New Material
Jiangsu Industrial Park Business
Hengke New combinati
Material Co. China 278000
Tongzhou manufactur
Binjiang New ing 100 on under
Ltd. Area (Wujie common
Town) Nantong control
City
No. 88
Hengli New Gangcheng Establishe
Material China 3250 Road Yangbei manufactur(Suqian) Co. Street Sucheng ing 100
d by
investmen
Ltd. District Suqian t
City
Room 202
Building 8 No. 1
Suzhou Hengli Road Establishe
Binglin Nanma Wholesale d by
Trading Co. China 500 Industrial Zone and retail 100
Ltd. Shengze Town trade
investmen
t
Wujiang District
Suzhou City
Room 203
Suzhou Building 8 No. 1
Hengli Hengli RoadNanma EstablisheChemical
Fiber New China 10000 Industrial Zone Wholesale 100
d by
Shengze Town investmenMaterials Co. Wujiang District tLtd. Suzhou City
Jiangsu Province
Hengli Former Xingang Business
Investment China 627000 Primary School Industrial 100 combinati
(Dalian) Co. Xingang Village investment on under260
Ltd. Changxing common
Island Economic control
Zone Dalian
Liaoning
Province
No. 26 Middle
Hengli Petrochemical
Petrochemica Avenue
Establishe
l (Huizhou) China 227740 Xiayong Daya
manufactur 100 d by
Bay Huizhou ing investmenCo. Ltd. (Building 2 t
(R&D))
Xingang Village
(formerly
Xingang Primary Business
Dalian Hengli School)
Concrete Co. China 2000 Changxing manufactur
combinati
100 on under
Ltd. Island Economic ing common
Zone Dalian control
Liaoning
Province
Former Xingang
Primary School
Hengli Xingang Village Establishe
Petrochemica China 589000 Changxing manufactur 100 d byl (Dalian) Co. Island Economic ing investmen
Ltd. Zone Dalian t
Liaoning
Province
Wholesale
Suzhou Xiangcheng and Retail Establishe
Hengli Jiuli China 1000 District SuzhouCity Jiangsu Trade > 100
d by
Sales Co. Ltd. Wholesale investmenProvince Trade (F51) t
Suzhou Wholesale
Hengli Huirun Xiangcheng Establishe
Import & China 1000 District Suzhou
and Retail d by
Export Co. City Jiangsu
Trade > 100
Wholesale investmen
Ltd. Province Trade (F51) t
Flat
HENGLI 190619/FHarb Establishe
PETROCHEMI HongKong HK$10 our Center25
Wholesale d by
CAL CO. China million Harbor
and retail 100 investmen
LIMITED RoadWanchaiH trade t
ong Kong
Xingang Village
(formerly Business
Hengli Xingang Primary combinati
Shipping China 2000 School) Transportat ons not(Dalian) Co. Changxing ion industry 100 under
Ltd. Island Economic common
Zone Dalian control
Liaoning261
Province
Unit 6101-03
Block A Kingkey
Shenzhen 100 Building Business
Ganghui No. 5016 Wholesale combinati
Trading Co. China 50 Shennan East and retail 100 on under
Ltd. Road Guiyuan trade commonStreet Luohu control
District
Shenzhen
No. 298
Hengli Changsong
Storage & Road Changxing Establishe
Transportatio China 1000 Island Economic Transportat 100 d by
n (Dalian) Zone Dalian ion industry investmen
Co. Ltd. Liaoning t
Province
Kanghui New Yingkou Business
Materials 167796.58 Xianrendao Manufactur 66.3 combinati
Technology China 02 Energy and ing 3 33.67 on under
Co. Ltd. Chemical commonIndustrial Park control
Room 201
Kanghui Building 8 No. 1
International Hengli Road Wholesale Establishe
Trade China 5000 Nanma and retail 100 d by
(Jiangsu) Co. Industrial Zone trade investmen
Ltd. Shengze Town t
Wujiang District
Jiangsu
Kanghui New No. 666 Xinli Establishe
Material China 250000 Road Lili Town Manufactur 100 d by
Technology Wujiang District ing investmen
Co. Ltd. t
Comprehensive
Kanghui Building No.Dalian New 298 Changsong Establishe
Materials China 110000 Road Changxing Manufactur d by
Technology Island Economic ing
100 investmen
Co. Ltd. Zone Dalian tLiaoning
Province
Hengli Textile
Kanghui New Material
Nantong New Industrial Park Rubber and Merger of
Materials China 250000 Wujie Town plastic 100 Controlling
Technology Tongzhou products Sharehold
Co. Ltd. District industry ers
Nantong City
Hengli Comprehensive Electricity Establishe
Petrochemica China 751600 Building No. and heat d byl (Dalian) 298 Changsong production 100 investmen
New Road Changxing and supply t262
Materials Island Economic industry
Technology Zone Dalian
Co. Ltd. Liaoning
Province
Comprehensive
Hengli Building No.Petrochemica 298 Changsong Water Establishe
l Utilities China 30000 Road Changxing transport 100 d by
(Dalian) Co. Island Economic investmen
Ltd. Zone Dalian
industry t
Liaoning
Province
Manufactur
No. 11 Qinghai ing -
Dalian Street Chemical
Hengzhong Changxing Raw Establishe
Special China 6400 Island Economic Materials 85 d by
Materials Co. Zone Dalian and investmen
Ltd. Liaoning Chemical t
Province ProductsManufactur
ing
Dalian Unit 1 27th
Northeast Floor No. 52 Wholesale Establishe
Asia Gangxing Road and Retail d by
Petrochemica China 3000 Zhongshan Trade > 100
l Products District Dalian Wholesale
investmen
City Liaoning Trade (F51) tCo. Ltd. Province
Room 3 27th
Dalian Floor No. 52 Wholesale
Northeast Gangxing Road and Retail
Establishe
Asia Energy China 3000 Zhongshan Trade > 100
d by
District Dalian Wholesale investmenCo. Ltd. City Liaoning Trade (F51) t
Province
Wholesale
and Retail
Trade >
Wholesale
Comprehensive Trade >
Building No. Wholesale
Hengli 298 Changsong of Mineral Establishe
Chemical Road Changxing Products d by
(Dalian) Co. China 50000 Island Economic Building 100 investmen
Ltd. Zone Dalian Materials t
Liaoning and
Province ChemicalProducts >
Wholesale
of Other
Chemical
Products263
(F5169)
Hengli No. 298
Petrochemica Changsong Business
l (Dalian) Road Changxing Manufactur combinati
Refining & China 1759633 Island Economic 100 on under
Chemical Co. Zone Dalian
ing common
Ltd. Liaoning controlProvince
No. 298
Changsong
Hengli Road Changxing Wholesale Establishe
Aviation Fuel China 1000 Island Economic and retail 100 d by
Co. Ltd. Zone Dalian trade investmen
Liaoning t
Province
OSBL Project -
Engineering
Hengli Office Building
Petrochemica No. 298 Wholesale Establishe
l Products China 10000 Changsong d by
Sales (Dalian) Road Changxing
and retail 100 investmen
Co. Ltd. Island Economic
trade t
Zone Dalian
Liaoning
Province
Suzhou East side of
Hengli Dongda Bridge Wholesale Establishe
Chemical China 10360 Lili Town and retail 100 d by
trade investmenPolymer Co. Wujiang District
Ltd. Suzhou City t
Unit 6101-03B
Block A Kingkey
Shenzhen 100 Tower No. Business
Shengang China 1000 5016 Shennan
Wholesale combinati
Trading Co. East Road and retail 100 on under
Ltd. Guiyuan Street trade common
Luohu District control
Shenzhen
Room 2301
Building 88
Suzhou Central
Hengli Energy Plaza Suzhou Wholesale Establishe
(Suzhou) Co. China 10000 Industrial Park and retail 100 d by
Ltd. Suzhou Area trade investmen
China (Jiangsu) t
Pilot Free Trade
Zone
Room 2302
Hengli Oil & Building 88 Establishe
Chemical Suzhou Central Wholesale d by
(Suzhou) Co. China 10000 Plaza Suzhou and retail 100
Ltd. Industrial Park trade
investmen
t
Suzhou Area264
China (Jiangsu)
Pilot Free Trade
Zone
Henggangsha
Nantong Wujie Town Wholesale Establishe
Hengli Import and Retail
& Export Co. China 1000
Tongzhou d by
District Trade > 100
Ltd. Nantong City Wholesale
investmen
Jiangsu Province Trade (F51)
t
HENGLI 9 STRAITS VIEW
PETROCHEMI #20-10 MARINA Establishe
CAL Singapo US$30356 ONE WEST
Wholesale
re 844 TOWER and retail 100
d by
INTERNATION trade investmen
AL PTE. LTD. SINGAPORE t(018937)
Room 204A
Shanghai Building 4 No. Wholesale Establishe
Jinmintai 2377 Shenkun and Retail d by
Trading Co. China 1000 Road Minhang Trade > 100Wholesale investmenLtd. District
Shanghai Trade (F51)
t
Room 409 4th
Floor MAX
Science and
Suzhou Technology
Hengli Park No. 998Pangnan Road Wholesale EstablisheChemical
Import & China $110 million Wujiang and retail 100
d by
investmen
Export Co. Economic and trade
Ltd. Technological
t
Development
Zone Suzhou
City Jiangsu
Province
9 STRAITS VIEW
HENGLI #20-10 MARINA Establishe
SHIPPING Singapo
INTERNATION re $500000
ONE WEST Transportat d by
TOWER ion industry 100 investmen
AL PTE.LTD. SINGAPORE t
(018937)
Room 801
Building A
Hengli Energy Sunshine Establishe
(Hainan) Co. China $150 million Financial Plaza Wholesale 100 d by
Ltd. Jiyang District investmen
Sanya City t
Hainan Province
Room 205-1328
Hengli Oil & No. 181 Establishe
Chemical
(Hainan) Co. China $100 million
Xingyang Wholesale 100 d byAvenue investmen
Ltd. Jiangdong New t
District Haikou265
City Hainan
Province
Suzhou Room 301
Hengli Energy Building 5 No.& Chemical 1518 Linhu
Establishe
Import & China $50 million Avenue Lili Wholesale 100
d by
Town Wujiang investmenExport Co.Ltd. District Suzhou
t
City
Room 1688
Hengli Building 2 No.Petrochemica 215 Lianhe Wholesale
Establishe
l Sales Co. China 5000 North Road and retail 100
d by
Fengxian trade investmenLtd. District t
Shanghai
Serviced
apartments
Building 14
Suzhou Bayview
Henglitongsh Garden No. 777
ang New Fengqing Street Wholesale
Establishe
Materials Co. China 5000 East Taihu Lake and retail 100
d by
Ltd. Ecological trade
investmen
Tourism Resort t
(Taihu New
City) Wujiang
District Suzhou
City
Room 3202
Luohu Business
Center No.Hengli South 2028 Shennan
China East Road Wholesale Establishe
Petrochemica China 20000 Chengdong and retail 100 d by
l Sales Co. CommUnity trade investmen
Ltd. Dongmen t
Subdistrict
Luohu District
Shenzhen
Window No. 1
on the west side
of the approval
Hengli North hall of the R&D
China building in Wholesale Establishe
Petrochemica China 5000 Xianrendao and retail 100 d by
l Sales Co. Economic trade investmen
Ltd. Development t
Zone Yingkou
City Liaoning
Province
Guangdong Units Wholesale Business
Petrochemica China 20000 1401-14002-140 and retail 100 combinati266
l (Shenzhen) 03 Main Tower trade ons not
Co. Ltd. Maritime under
Center No. 59 common
Linhai Avenue control
Nanshan
Subdistrict
Qianhai
Shenzhen-Hong
Kong
Cooperation
Zone Shenzhen
Room 2303
Building 88
Hengli Oil Suzhou Central
Products Plaza Suzhou Wholesale Establishe
Sales China 10000 Industrial Park and retail 100 d by
(Suzhou) Co. Suzhou Area trade investmen
Ltd. China (Jiangsu) t
Pilot Free Trade
Zone
Room 2304
Building 88
Hengli Suzhou Central
Chemical Plaza Suzhou Wholesale Establishe
Sales China 10000 Industrial Park and retail 100 d by
(Suzhou) Co. Suzhou Area trade investmen
Ltd. China (Jiangsu) t
Pilot Free Trade
Zone
Room 3 21st
Hengli Floor No. 52 Establishe
Northern Gangxing Road Wholesale d by
Energy Sales China 10000 Zhongshan and retail 100District Dalian trade investmenCo. Ltd. City Liaoning t
Province
Room 1902-03
No. 3099
Hengli East Chang'an Road
China East Taihu Lake Wholesale Establishe
Petrochemica China 5000 EcologicalTourism Resort and retail 100
d by
l Sales Co. trade investmen
Ltd. (Taihu New tCity) Wujiang
District Suzhou
City
Suzhou No. 1 Hengli
Fangtuanwan Road Nanma Wholesale Establishe
g China 500 Industrial Zone and retail 100 d by
trade investmenE-commerce Shengze Town
Co. Ltd. Wujiang District t
Hengli Energy Room 2608 Establishe
Import & China 5000 Building 88 Wholesale 100 d by267
Export Co. Suzhou Center investmen
Ltd. Plaza Suzhou t
Industrial Park
Suzhou Area
China (Jiangsu)
Pilot Free Trade
Zone
Hengli Energy Room 702-7
& Chemical No. 719 Shengui Establishe
(Shanghai) China 10000 Road Minhang Wholesale 100 d byinvestmen
Trading Co. District
Ltd. Shanghai t
Room 101 1st
Hengli Floor Building
Hengyuan 1 No. 99 Establishe
Supply Chain China 5000 Shuanghui d by
(Shanghai) Road Lingang
Wholesale 100 investmen
Co. Ltd. New Area China t(Shanghai) Pilot
Free Trade Zone
Hengli New Room 502 No. Establishe
Energy 99 Huangpu d by
(Shanghai) China 5000 Road Hongkou Wholesale 100 investmen
Co. Ltd. DistrictShanghai t
Room 2507
Building 88
Hengliyuan Suzhou CentralPlaza Suzhou EstablisheTechnology
(Suzhou) Co. China 1000 Industrial Park Wholesale 100
d by
Suzhou Area investmenLtd. China (Jiangsu) t
Pilot Free Trade
Zone
Room 2506
Suzhou Building 88
Hengli Suzhou Center Establishe
Jinshang Plaza Suzhou d by
Energy China 1000 Industrial Park Wholesale 100Suzhou Area investmenTechnology
Co. Ltd. China (Jiangsu)
t
Pilot Free Trade
Zone
Room 5 21st
Floor No. 52
Dalian Hengli Gangxing Road Establishe
Fine Chemical China 5000 Zhongshan Wholesale 100 d by
Sales Co. Ltd. District Dalian investmen
City Liaoning t
Province
Hengli Energy Room 805 Establishe
& Chemical China 5000 Building A Wholesale 100 d by
(Sanya) Co. Yahua Xiangxie investmen268
Ltd. Sanya Bay Road t
Tianya District
Sanya City
Hainan Province
NY15 Maker
Service Center
Hengli No. 118
Petrochemica Xingyang Establishe
l Sales China 5000 Avenue Wholesale 100 d by
(Haikou) Co. Jiangdong New investmen
Ltd. District Haikou t
City Hainan
Province
Room 4 21st
Dalian Hengli Floor No. 52
Petrochemica Gangxing Road
Establishe
l Sales Co. China 1000 Zhongshan Wholesale 100
d by
District Dalian investmenLtd. City Liaoning t
Province
No. 547 Pincui
Dalian Hengli Road Changxing Establishe
Gold China 1000 Island Economic d byMerchants Zone Dalian Wholesale 100 investmen
Sales Co. Ltd. Liaoning t
Province
No. 551 Pincui
Dalian Hengli Road Changxing Establishe
New Energy China 1000 Island Economic Wholesale 100 d by
Sales Co. Ltd. Zone Dalian investmenLiaoning t
Province
Room 3201
Luohu Business
Center No.Hengli Energy 2028 Shennan
& Chemical East Road
Establishe
(Shenzhen) China 500 Chengdong Wholesale 100
d by
Co. Ltd. CommUnity
investmen
Dongmen t
Subdistrict
Luohu District
Shenzhen
Room 101
Nantong Building 5
Hengli Kaisha Village Establishe
Maoyuan Wujie Town
Petrochemica China 1000 Tongzhou Wholesale 100
d by
investmen
l Trading Co. District t
Ltd. Nantong City
Jiangsu Province
Suzhou China 5000 Room 501-04 Wholesale EstablisheHengli New Building A No. and Retail 100 d by269
Energy Sales 4088 Kaiping Trade - investmen
Co. Ltd. Road East Taihu Wholesale t
Lake Ecological of
Tourism Resort Petroleum
(Taihu New and
City) Wujiang Petroleum
District Suzhou Products
City Jiangsu
Province
Room 501-3
Building A No.
4088 Kaiping
Suzhou Road East Taihu Wholesale Establishe
Hengli Fine China 1000 Lake Ecological
and Retail d by
Chemical Tourism Resort Trade - 100 investmen
Sales Co. Ltd. (Taihu New Wholesale t
City) Wujiang Industry
District Suzhou
City
Wholesale
Units and Retail
1406-14057 & Trade >
14058 Main Wholesale
Tower Trade >
Hengli Maritime
Wholesale
Center No. 59 of MineralPetrochemica Products Establishe
l Sales China 500 Linhai Avenue Building 100 d by
(Shenzhen) Nanshan Materials investmen
Co. Ltd. Subdistrict tQianhai and
Shenzhen-Hong Chemical
Kong Products >
Cooperation Wholesale
Zone Shenzhen of OtherChemical
Products
Room 402-76
Warehouse No.
1 Block B No.
Hengli 86 Dacheng
(Zhoushan) Fourth Road
Wholesale Establishe
Energy & China 1000 Dinghai District
and Retail d by
Chemical Co. High-tech
Trade > 100 investmen
Ltd. Industrial Park
Wholesale t
Zhoushan City Trade
China (Zhejiang)
Pilot Free Trade
Zone
No. 1 2nd Floor Wholesale
Luzhou Building 19 and Retail Establishe
Hengli Energy China 10000 Yingtian Trade > 100 d by
Sales Co. Ltd. Intelligent Wholesale investmen
Terminal > t270
Industrial Park Wholesale
Luzhou of
Comprehensive Machinery
Bonded Zone Hardware
and
Electronic
Products >
Wholesale
of
Automobile
s and Parts
(F5172)
Room G003
Building 2
Bonded Port
Hengli Fuel Area Xinying
Wholesale Establishe
Oil (Hainan) China 1000 Bay Zone
and Retail
Trade > 100 d by
Co. Ltd. Yangpu investmenEconomic Wholesale
Development Trade (F51)
t
Zone Hainan
Province
Room A-522
No. 188 Wholesale
Shanghai Yesheng Road and Retail Establishe
Hengli Fuel China 1000 Lingang New Trade > 100 d by
Oil Co. Ltd. Area China Wholesale investmen
(Shanghai) Pilot Trade (F51) t
Free Trade Zone
Wholesale
and Retail
Trade >
Wholesale
Trade >
Wholesale
Room 508 of Mineral
Hengli Fuel Office Building Products
Oil No. 18 Xiaohu Building
Establishe
d by
(Guangzhou) China 1000 South Third Materials 100 investmen
Co. Ltd. Road Nansha andDistrict Chemical t
Guangzhou Products >
Wholesale
of
Petroleum
and Related
Products
(F5162)
Hengli Fuel No. 15 Mingzhu WholesaleRoad Donghai and Retail EstablisheOil
(Shenzhen) China 5000 CommUnity Trade > 100
d by
Co. Ltd. Yantian Street Wholesale
investmen
Yantian District Trade (F51) t271
Shenzhen 1409
Vanke Shenzhen
Yantian Supply
Chain Smart
Warehouse
Yantian
Comprehensive
Bonded Zone
Room 2602
Building 88
Hengli Suzhou Center
Petrochemica Plaza Suzhou Wholesale
Establishe
l Trading Co. China 5000 Industrial Park and retail 100
d by
Ltd. Suzhou Area trade (F)
investmen
China (Jiangsu) t
Pilot Free Trade
Zone
Wholesale
and Retail
Trade >
Wholesale
Trade >
Wholesale
No. 26 Middle of Mineral
Huizhou Petrochemical Products
Hengli Avenue Building Establishe
Jinshang China 5000 Xiayong Daya Materials 100 d by
Trading Co. Bay Huizhou and investmen
Ltd. (Building 2 Chemical t
(R&D)) Products >
Wholesale
of
Petroleum
and Related
Products
(F5162)
Wholesale
and Retail
Trade >
Wholesale
Trade >
No. 26 Middle Wholesale
Huizhou Petrochemical of Mineral
Hengli Avenue Products
Establishe
Chemical China 5000 Xiayong Daya Building 100
d by
Sales Co. Ltd. Bay Huizhou Materials
investmen
(Building 2 and t
(R&D)) Chemical
Products >
Wholesale
of Other
Chemical
Products272
(F5169)
Room 501-2606
Building 88 Wholesale
Hengli Suzhou Central
and Retail
International Plaza Suzhou
Trade > Establishe
Trading Co. China 5000 Industrial Park
Wholesale 100 d by
Suzhou Area > Trade investmenLtd. China (Jiangsu) Brokerage t
Pilot Free Trade and Agency
Zone (F518)
Room 412
Hengli Building 42 No. Wholesale
Petrochemica 430 Fumin Establishe
l Trading China 1000 Avenue Suqian
and Retail
Economic and Trade > 100
d by
(Suqian) Co. Technological Wholesale
investmen
Ltd. tDevelopment Trade (F51)
Zone - FHY024
No. 88 Yangfan
Suqian Hengli Avenue Wholesale
Chemical Yangbei Street and Retail Establishe
Import & China 1000 Sucheng Trade > 100 d by
Export Co. District Suqian Wholesale investmen
Ltd. City Jiangsu Trade (F51) t
Province
Room 2702
27th Floor Scientific
Block B Victoria research
Hengli andPlaza No. 52
Dagong Gangxing Road technical
(Dalian) Renmin Road services > Establishe
Materials China 1000 Subdistrict Science and 60 d by
Research Gangxing technology investmen
Institute Co. CommUnity promotion t
Ltd. Zhongshan and
District Dalian application
City Liaoning services
Province (M75)
Comprehensive
Hengli Building No. Business
(Dalian) 298 Changsong Services > Establishe
Construction Scientific
Engineering China 500
Road Changxing d by
Island Economic Research 100 investmen
Service Co. Zone Dalian and t
Ltd. Liaoning Technical
Province Services
Reason of difference between shareholding ratio and voting right ratio in the subsidiary:
There were no subsidiaries with a shareholding ratio different from the voting right ratio.The basis for holding half or less of the voting rights but still controlling the investee and holding more
than half of the voting rights but not controlling the investee:
There were no subsidiaries in the current period that the parent company had half or less of the voting273
rights and was included in the scope of the consolidated financial statements.Basis of control in structured entity included in the scope of the consolidation:
There was no important structured entity included in the scope of the consolidation in this period.Basis for determining whether a company is an agent or a principal:
None
Other notes:
In this period there was no equity investment in which the parent company had more than half of the
voting rights but failed to exercise control.
(2). Significant non-wholly-owned subsidiaries
□适用√不适用
(3). Key financial information of important non-wholly owned subsidiaries
□适用√不适用
(4). Significant restrictions on the use of corporate group assets and the settlement of corporate
group debts
√适用□不适用
There were no significant restrictions on the use of the Company’s assets and repayment of the
Company’s debts during the period.
(5). Financial support or other support provided to structured entities included in the scope of
consolidated financial statements
√适用□不适用
There was no financial or other support provided to structured entities included in the consolidated
financial statements during the period.Other notes:
□适用√不适用
2. Transactions in which the share of ownership interest in a subsidiary changes and the subsidiary
is still controlled
√适用□不适用
3. Interests in joint ventures or associates
√适用□不适用
(1). Significant joint ventures or associates
□适用√不适用
(2). Significant financial information of significant joint ventures
□适用√不适用274
(3). Significant financial information of significant joint associates
□适用√不适用
(4). Summarized financial information of immaterial joint ventures and associates
√适用□不适用
Unit: Yuan Currency: RMB
Closing balance/current period Beginning balance/previous
amount period amount
Joint ventures:
Total book value of
investments
Proportionate Share of:
--Net profit
--Other comprehensive income
--Total comprehensive income
Associated enterprises:
Total book value of
investments 796623655.49 745826920.43
Proportionate Share of:
--Net profit 50755650.84 99826566.58
--Other comprehensive income
--Total comprehensive income 50755650.84 99826566.58
Other notes:
None
(5). Significant restrictions on the ability of joint ventures or associates to transfer funds to the
Company
□适用√不适用
(6). Excess losses incurred by joint ventures or associates
□适用√不适用
(7). Unrecognized commitments related to investments in joint ventures
□适用√不适用
(8). Contingent liabilities related to investments in joint ventures or associates
□适用√不适用
4. Significant joint ventures
□适用√不适用
5. Interests in structured entities not included in the scope of consolidated financial statements
Explanation on structured entities not included in the scope of consolidated financial statements:
√适用□不适用275
On 31 December 2025 the structured entities related to the Company but not included in the
scope of this financial statement are mainly engaged in asset management business manage client
assets and provide clients with investment management services for securities futures and other
financial products. The total assets of such structured entities on 31 December 2025 were RMB
380671700.
6. Others
□适用√不适用
XI. Government grants
1. Government grants recognized based on the receivable amount at the end of the reporting
period
□适用√不适用
Reasons for not receiving the expected amount of government grant at the expected time
□适用√不适用
2. Liability items involving government grants
√适用□不适用
Unit: Yuan Currency: RMB
Amount
included Other
Financi Increased in Transferre chang
al Beginning grants non-opera d to other es in Closing Related to
statem balance amount in ting income in this balance assets/reve
ent this period income in this period perio nues
items this d
period
Deferr
ed 38510895 12869423 - 28336526 - 48546666 Asset-relat
income 58.89 98.62 4.57 92.94 ed
3. Government grants included in the current profit or loss
√适用□不适用
Unit: Yuan Currency: RMB
Type Current year Prior year
Related to assets 283365264.57 282467509.33
Related to revenues 1642771197.33 1775850371.26
Total 1926136461.90 2058317880.59
Other notes:
None
XII. Risks associated with financial instruments
1. Risks of financial instruments
√适用□不适用276
The Company faces risks of various financial instruments in its daily activities mainly including
credit risk market risk and liquidity risk. The Company's main financial instruments include cash and
bank balances equity investment debt investment loans accounts receivable accounts payable etc.For details of each financial instrument please refer to the relevant items in “Notes to ConsolidatedFinancial Statements Items - Items in Foreign Currencies” in this Note. The risks associated with these
financial instruments and the risk management policies adopted by the Company to reduce these risks
are as follows:
The board of directors is responsible for planning and establishing the Company's risk
management structure formulating the Company's risk management policies and related guidelines
and supervising the implementation of risk management measures. The Company has formulated risk
management policies to identify and analyze the risks faced by the Company. These risk management
policies specify specific risks and cover many aspects such as market risk credit risk and liquidity risk
management. The Company regularly assesses changes in the market environment and the Company's
operating activities to determine whether to update risk management policies and systems. The
Company's risk management is carried out by the risk management committee in accordance with the
policies approved by the board of directors. The Risk Management Committee identifies evaluates and
avoids related risks through close cooperation with the Company’s other business departments. The
Company's internal audit department conducts regular audits on risk management controls and
procedures and reports the audit results to the Company's audit committee.The Company diversifies the risk of financial instruments through appropriate diversified
investments and business portfolios and reduces risk concentrated on a single industry a specific
region or a specific counterparty by formulating appropriate risk management policies.
1. Market risk
Market risk of financial instruments refers to the risk that the fair value or future cash flow of
financial instruments will fluctuate due to changes in market price including foreign exchange rate risk
interest rate risk and other price risk.
(1). Foreign exchange rate risk
Exchange rate risk refers to the risk that the fair value of financial instruments or future cash flows
will fluctuate due to changes in foreign exchange rates. The Company's main operations are located in
China Hong Kong Singapore domestic business is settled in RMB export business is mainly settled in
US dollar and overseas operating companies are settled in US dollar so the Company's determined
foreign currency assets and liabilities and future foreign currency transactions (Foreign currency assets
and liabilities and foreign currency transactions are mainly denominated in US dollar.) were exposed to
foreign exchange rate risk. Related foreign currency assets and foreign currency liabilities include:
Cash and bank balances Accounts receivable Receivable financing Other receivables Accounts
payable Notes payable Other payables Short-term loans and Non-current liabilities due within one
year. Amount of financial assets and foreign currency financial liabilities dominated in foreign currencyand converted into RMB can be found in “Notes to Consolidated Financial Statements Items - Items inForeign Currencies” in this note.The Company pays close attention to the impact of exchange rate changes on the Company's
exchange rate risk and matches foreign currency income with foreign currency expenditure as much as
possible to reduce foreign exchange risk. In addition the Company also signed forward foreign
exchange contracts to prevent the exchange risk of the Company's revenue settled in US dollars. At the
end of the current period the foreign exchange risks faced by the Company mainly originated from
financial assets and liabilities denominated in US dollar. Amount of foreign currency financial assetsand foreign currency financial liabilities converted into RMB is shown in “Notes to ConsolidatedFinancial Statements Items - Items in Foreign Currencies” in this note.If all the other variables remain unchanged the impact of a 5% appreciation or depreciation of the
RMB against the US dollar on the Company's net profit is as follows:
Impact on net profit (ten-thousand-yuan)
Exchange rate changes
Current year Prior year277
Impact on net profit (ten-thousand-yuan)
Exchange rate changes
Current year Prior year
Up 5% 29903.30 31136.13
Down 5% -29903.30 -31136.13
The management believes that 5% reasonably reflects the reasonable range of possible changes in
the RMB against the US dollar.
(2). Interest rate risk
Interest rate risk refers to the risk that the fair value of financial instruments or future cash flows
will fluctuate due to changes in market interest rates. The risks faced by the Company in changing
market interest rates are mainly related to the Company's borrowings with floating interest rates. The
Company's interest rate risk mainly arises from long-term interest-bearing debts such as long-term
bank loans and bonds payable. Floating interest rate financial liabilities expose the Company to cash
flow interest rate risk while fixed interest rate financial liabilities expose the Company to fair value
interest rate risk. The Company determines the relative ratio of fixed rate and floating rate contracts
according to the market environment at that time and maintains an appropriate combination of fixed
and variable rate instruments through regular review and monitoring.When other variables remain unchanged if the borrowing rate calculated at floating interest rates
increases or decreases by 50 basis points the impact on the Company's net profit is as follows:
Impact on net profit (ten-thousand-yuan)
Interest rate changes
Current year Prior year
Up 50 basis points -32739.72 -34585.58
Down 50 basis points 32739.72 34585.58
Management believes that 50 basis points reasonably reflects a reasonable range of possible
changes in interest rates over the next year.
(3). Other price risks
The Company does not hold equity investments in other listed companies and there is no other
price risk.
2. Credit risk
Credit risk refers to the risk that the counterparty of a transaction fails to perform its contractual
obligations resulting in financial losses to the Company. The Company's credit risk mainly arises from
Cash at bank and Receivables.The Company's cash at bank is mainly deposited in state-owned banks and other large and
medium-sized listed banks. The Company does not expect cash at bank to have significant credit risk.For Receivables the Company sets relevant policies to control credit risk exposure in accordance
with the concentration of customer management credit risk. The Company evaluates the debtor's
credit qualifications based on the debtor's financial status external ratings possibility of obtaining
guarantees from third parties credit history and other factors such as current market conditions and
sets the corresponding arrearage amount and credit period. The Company will regularly monitor the
credit history of the debtor. For debtors with poor credit records the Company will use written
reminders shorten the credit period or cancel the credit period to ensure that the Company's overall
credit risk is within control. Since the Company's Receivables customers are widely dispersed in
different regions and industries there is no significant concentration of credit risk in the Company.The Company does not provide any other guarantees that may subject the Company to credit risk.The largest credit risk exposure undertaken by the Company is the carrying amount of each financial
asset in the balance sheet.
(1). Judgment basis for significant increase in credit risk278
The Company assesses on each balance sheet date whether the credit risk of relevant financial
instruments has increased significantly since initial recognition. When determining whether the credit
risk has increased significantly since the initial recognition the Company considers that it can obtain
reasonable and evidence-based information without unnecessary extra cost or effort including
qualitative and quantitative analysis based on the Company's historical data external credit risk rating
and forward-looking information. When one or more of the following quantitative and qualitative
standards are met the Company believes that credit risk has increased significantly:
1) The contract payment has been overdue for more than 30 days.
2) According to the results of external public credit ratings the debtor’s credit rating dropped
significantly.
3) There are serious problems in the debtor's production or operation and the actual or expected
results of the operation have dropped significantly.
4) Significantly adverse changes have occurred in the debtor’s regulatory economic or
technological environment.
5) It is expected that the debtor’s business financial or economic conditions that will meet its
debt-servicing capacity will undergo significant adverse changes.
6) Other objective evidence shows that financial assets have significantly increased credit risk.
(2). Basis of credit impairment
When evaluating whether the debtor has suffered credit impairment the Company mainly
considers the following factors:
1) The issuer or debtor has significant financial difficulties.
2) The debtor violates the contract such as interest payment or principal default or overdue etc.
3) Due to economic or contractual considerations related to the debtor’s financial difficulties the
creditor gives the debtor a concession that would not be made under any other circumstances.
4) The debtor is likely to go bankrupt or undergo other financial restructuring.
5) The issuer or debtor's financial difficulties caused the active market for the financial asset to
disappear.
6) Purchase or source a financial asset at a substantial discount the discount reflects the fact that
credit losses have occurred.
(3). Parameters of measurement of expected credit loss
The parameters of expected credit loss measurement are based on whether there has been a
significant increase in credit risk and whether credit impairment has occurred. The Company measures
the loss provision for different assets with 12 months or the expected lifetime of the entire credit
period. The key parameters of expected credit loss measurement include default probability default
loss rate and default risk exposure. The Company considers the quantitative analysis of historical
statistical data and forward-looking information to establish default probability default loss rate and
default risk exposure model. The relevant definitions are as follows:
1) The probability of default refers to the possibility that the debtor will not be able to meet its
repayment obligations in the next 12 months or throughout the remaining duration.
2) The default risk exposure refers to the amount that the Company should be reimbursed when a
default occurs in the next 12 months or throughout the remaining duration.
3) The default loss rate refers to the Company's expectation of the degree of loss in default
exposure. Depending on the type of counterparty the method and priority of recourse and the
availability of collateral or other credit support the rate of default loss varies.The Company determines the expected credit loss by predicting the default probability default
loss rate and default risk exposure of individual exposures or asset portfolios in the coming months.During the reporting period there have been no major changes in the expected credit loss estimation
techniques or key assumptions.
(4). Forward-looking information included in the expected credit loss model
The assessment of a significant increase in credit risk and the calculation of expected credit losses
involve forward-looking information. Through historical data analysis the Company has identified279
relevant information that affects the credit risk and expected credit losses of each asset portfolio such
as GDP growth rate and other macroeconomic conditions and industry development stages such as
industry cycle stage. The Company predicts the impact of this information on the probability of default
and the rate of default loss on basis of considering changes in the Company's future sales strategy or
credit policy.
3.Liquidity risk
Liquidity risk refers to the risk of a shortage of funds when an enterprise performs its obligation to
settle cash or other financial assets. Liquidity risk is centrally controlled by the Company's financial
department. The finance department monitors cash balances securities that can be cashed at any time
and rolling forecasts of cash flows over the next 12 months to ensure that the Company has sufficient
funds to repay debts under all reasonable forecasts meet the Company’s operating needs and reduce
the impact of cash flow fluctuations.The financial liabilities and off-balance sheet guarantee items held by the Company are analyzed
according to the maturity period of the undiscounted remaining contractual cash flow (Unit:
ten-thousand-yuan):
Closing balance
Item Within one One to two Two to three More than
year years years three years Total
Bank borrowing 9024280.33 1596451.04 1177919.48 4049238.58 15847889.43
Financial
liabilities held for 95516.25 - - - 95516.25
trading
Notes payable 388952.85 - - - 388952.85
Accounts
payable 1090408.47 - - - 1090408.47
Other payables 39901.16 - - - 39901.16
Lease liabilities 3289.80 2432.11 2254.28 2202.48 10178.67
Long-term
payables 136410.94 39933.96 34774.52 82671.03 293790.45
Bonds payable 265655.94 1235.00 50339.63 - 317230.57
Total financial
liabilities and
contingent 11044415.74 1640052.11 1265287.91 4134112.09 18083867.85
liabilities
Continued:
Beginning balance
Item Within one One to two Two to three Over three
year years years years Total
Bank borrowing 12262818.17 1778225.80 1280639.86 4886652.92 20208336.75
Financial
liabilities held for 50378.73 - - - 50378.73
trading
Notes payable 1144730.63 - - - 1144730.63
Accounts
payable 948965.76 - - - 948965.76280
Beginning balance
Item Within one One to two Two to three Over three
year years years years Total
Other payables 37524.92 - - - 37524.92
Lease liabilities 6870.57 5066.80 4155.67 26298.67 42391.71
Long-term
payables 107889.05 128280.54 31269.12 85450.50 352889.21
Bonds payable 204350.00 - - - 204350.00
Total financial
liabilities and
contingent 14763527.83 1911573.14 1316064.65 4998402.09 22989567.71
liabilities
The financial liability amounts disclosed in the table above represent undiscounted contractual
cash flows and may therefore differ from the carrying amount in the balance sheet.
4.Capital management
The goal of the Company's capital management policy is to ensure that the Company can continue
to operate so as to provide returns for shareholders and benefit other stakeholders while maintaining
the optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital
structure the Company may adjust the amount of dividends paid to shareholders return capital to
shareholders issue new shares or sell assets to reduce debt. The Company monitors the capital
structure on the basis of the asset-liability ratio (i.e. total liabilities divided by total assets). As of 31
December 2025 the Company's asset-liability ratio was 74.53% (31 December 2024: 76.78%).
2. Hedging
(1). The Company carries out hedging business for risk management
□适用√不适用
Other notes:
□适用√不适用
(2). The Company carries out eligible hedging business and applies hedging accounting
□适用√不适用
Other notes:
□适用√不适用
(3). The Company conducts hedging business for risk management and expects to achieve risk
management objectives but has not applied hedging accounting
□适用√不适用
Other notes:
□适用√不适用281
3. Transfer of financial assets
(1). Classification of Transfer Methods
□适用√不适用
(2). Financial assets derecognized due to transfer
□适用√不适用
(3). Transfer of financial assets that continue to be involved
□适用√不适用
Other notes:
□适用√不适用
XIII. Disclosure of fair value
1. Fair value of assets and liabilities measured at fair value at the end of the period
√适用□不适用
Unit: Yuan Currency: RMB
Fair value at year end
Item Level 1 fair value Level 2 fair value Level 3 fair value
measurement measurement measurement Total
I. Recurring fair
value
measurement
(I) Financial
assets held for 298546305.67 1439955234.26 - 1738501539.93
trading
1. Financial
assets at fair
value through 298546305.67 1439955234.26 - 1738501539.93
profit or loss
(1) Debt
instruments - 53878768.00 - 53878768.00
investment
(2) Equity
instruments - 283657593.10 - 283657593.10
investment
(3) Derivative
financial assets 298546305.67 - - 298546305.67
(4) Bank wealth
management
products and - 1102418873.16 - 1102418873.16
structed deposits
2. Financial
assets
designated at fair
value through
profit or loss
(1) Debt
instruments282
investment
(2) Equity
instruments
investment
(II) Other debt
investments
(III) Other equity
instruments
investment
(IV) Investment
properties
1.Land use rights
for rental
2.Leased
buildings
3.Land use rights
that are held and
ready to be
transferred after
appreciation
(V) Biological
assets
1.Consumptive
biological assets
2.Productive
biological assets
(VI) Receivables
financing 6534848806.60 6534848806.60
Total assets
measured at fair
value on 298546305.67 1439955234.26 6534848806.60 8273350346.53
recurring basis
(VI) Financial
liabilities held for 955162496.23 955162496.23
trading
1.Financial
liabilities at fair
value through 282239615.36 282239615.36
profit or loss
Including:
Issued trading - -
bonds
Derivative
financial 282239615.36 282239615.36
liabilities
Others - -
2.Designated as
financial
liabilities at fair 672922880.87 672922880.87
value through
profit or loss
Total liabilities
measured at fair 955162496.23 955162496.23283
value on
recurring basis
II. Non-recurring
fair value
measurement
(I) Assets
held-for-sale
Total assets
measured at fair
value on a
non-recurring
basis
Total liabilities
measured at fair
value on a
non-recurring
basis
2. The basis for determining the market value of the continuous and non-continuous Level 1 fair
value measurement
√适用□不适用
For futures contracts with an active market price the fair value is determined based on the
quotation on the balance sheet date.
3. Continuous and non-continuous Level 2 fair value measurement using valuation techniques and
qualitative and quantitative information on important parameters
√适用□不适用
For debt instrument investments wealth management products structured deposits fund trusts
and asset management products held by the Company valuation techniques are used to determine
their fair value. The valuation model used is the discounted cash flow model/market quotes or dealer
quotes for similar instruments.
4. Continuous and non-continuous Level 3 fair value measurement using valuation techniques and
qualitative and quantitative information on important parameters
√适用□不适用
For receivables financing that is not traded in an active market the carrying amount is similar to
the fair value and the carrying amount is used as the fair value.
5. Continuous third-level fair value measurement items reconciliation information between book
value at the beginning and end of the period and sensitivity analysis of unobservable
parameters
□适用√不适用284
6. Continuing fair value measurement items conversions between levels during the current period
reasons for the conversions and policies for determining the timing of the conversions
□适用√不适用
7. Valuation technology changes during the period and reasons for the changes
□适用√不适用
8. Fair value of financial assets and financial liabilities not measured at fair value
√适用□不适用
The Company's financial assets and financial liabilities measured at amortized cost mainly include:
Cash and bank balances Notes receivables Accounts receivable Other receivables Short-term loans
Notes payable Accounts payable Other payables Non-current liabilities due within one year Long
term loans etc. The difference between the carrying amount of the financial assets and financial
liabilities that the Company does not measure at fair value and their fair value are immaterial.
9. Others
□适用√不适用
XIV. Related party and related party transactions
1. Information of parent company
√适用□不适用
Unit: ten-thousand-yuan Currency: RMB
Parent
Company Place of
Shareholding
Nature of Registered ratio of parent Parent company's
Name Registration business capital company to the
voting right ratio
(%)
Company (%)
Hengli Group Wujiang Industrial
Co. Ltd Jiangsu Investment 200200.00 29.84 29.84
Description of the parent company of the Company
The Company’s ultimate controlling party is the couple of Chen Jianhua and Fan Hongwei. Chen
Jianhua and Fan Hongwei directly held 11.24% shares of the Company and through Hengli Group Co.Ltd. and other 5 companies to hold 64.21% of shares of the Company and totally held 75.45% of shares
of the Company.The ultimate controlling party of this enterprise is Chen Jianhua and Fan Hongwei's family
Other notes:
None
2. The Company's subsidiaries
For the details of the subsidiaries of the Company please refer to the notes
√适用□不适用For details of the Company's subsidiaries please refer to “Interests in Other Entities — Interests inSubsidiaries”
3. The Company's joint ventures and associates
For the details of the subsidiaries of the Company please refer to the notes285
√适用□不适用
For details of the Company’s significant joint ventures and associated entities please refer to the note
“Interests in Other Entities — Interests in Joint Arrangements or Associates”.The situation of other joint ventures or associates that had related party transactions with the
Company in the current period or had balances with the Company in the previous period is as follows
□适用√不适用
Other notes:
□适用√不适用
4. Other related parties
√适用□不适用
Other related party names Other related parties and their relationship with thiscompany
Guangdong Songfa Ceramics Co. Ltd. Companies controlled by our parent company
Suzhou Wujiang Tongli Lake Tourism Resort
Co. Ltd. Companies controlled by our parent company
Suzhou Hengli Real Estate Co. Ltd. Companies controlled by our parent company
Hengli Industrial Investment (Suzhou) Co.Ltd. Companies controlled by our parent company
Suzhou Gufeng Asset Management Co. Ltd. Companies controlled by our parent company
Hengli Cloud Commerce Technology Co.Ltd. Companies controlled by our parent company
Wujiang Huajun Textile Co. Ltd. Companies controlled by our parent company
Jiangsu Boyada Textile Co. Ltd. Companies controlled by our parent company
Jiangsu Deshun Textile Co. Ltd. Companies controlled by our parent company
Jiangsu Dehua Textile Co. Ltd. Companies controlled by our parent company
Hengli (Suzhou) Textile Sales Co. Ltd. Companies controlled by our parent company
Sichuan Hengli Intelligent Textile
Technology Co. Ltd. Companies controlled by our parent company
Hengli (Guizhou) Textile Intelligent
Technology Co. Ltd. Companies controlled by our parent company
Jiangsu Peijie Textile Intelligent Technology
Co. Ltd. Companies controlled by our parent company
Suqian Bailong Landscape Technology Co. Companies controlled by the actual controller of this
Ltd. company
Hengli Real Estate (Dalian) Co. Ltd. Companies controlled by the actual controller of thiscompany
Dalian Victoria Property Services Co. Ltd. Companies controlled by the actual controller of thiscompany
Dalian Kangjia Property Service Co. Ltd. Companies controlled by the actual controller of thiscompany
Suzhou Tonglihong Brewing Co. Ltd. Companies controlled by the actual controller of thiscompany
Suzhou Tonglihong E-commerce Co. Ltd. Companies controlled by the actual controller of thiscompany
Suzhou Hengli Intelligent Technology Co. Companies controlled by the actual controller of this
Ltd. company286
Suzhou Hengli System Integration Co. Ltd. Companies controlled by the actual controller of thiscompany
Nantong Deji Concrete Co. Ltd. Companies controlled by the actual controller of thiscompany
Hengli Import & Export Co. Ltd. Companies controlled by our parent company
Jiangsu Wuzhou Bay Hengli International
Hotel Co. Ltd. Companies controlled by our parent company
Hengli Engine (Dalian) Co. Ltd. Companies controlled by the actual controller of thiscompany
Hengli Precision Casting (Dalian) Co. Ltd. Companies controlled by the actual controller of thiscompany
Hengli Green Building Materials (Dalian) Companies controlled by the actual controller of this
Co. Ltd. company
Hengli Shipbuilding (Dalian) Co. Ltd. Companies controlled by the actual controller of thiscompany
Hengli Equipment Manufacturing (Dalian) Companies controlled by the actual controller of this
Co. Ltd. company
Hengli Integrated Services (Dalian) Co. Ltd. Companies controlled by the actual controller of thiscompany
Hengli International Hotel (Suqian) Co. Ltd. Companies controlled by the actual controller of thiscompany
Hengli Marine Engineering (Dalian) Co. Ltd. Companies controlled by the actual controller of thiscompany
Hengli Heavy Industry Group Co. Ltd. Companies controlled by the actual controller of thiscompany
Dalian Hengli Hotel Co. Ltd. Companies controlled by the actual controller of thiscompany
Shenzhen Lizheng Design & Planning Co. Companies controlled by close family members of the
Ltd. Company's actual controller
Hengli Marine Outfitting (Dalian) Co. Ltd. Companies controlled by the actual controller of thiscompany
Other enterprises directly or indirectly controlled by the
Beijing Silk Road Winery Co. Ltd. Company's actual controller and their close family
members
Suzhou Hengli Youke Apartment
Management Co. Ltd. Companies controlled by our parent company
Chaozhou Songfa Ceramics Co. Ltd. Companies controlled by the actual controller of thiscompany
Suzhou Kangjia Property Management Co. Companies controlled by close family members of the
Ltd. Company's actual controller
Shanghai Ruicheng Yida Supply Chain Companies controlled by the actual controller of this
Technology Co. Ltd. company
Dalian Licheng Real Estate Co. Ltd. Companies controlled by the actual controller of thiscompany
Jiangsu Changshun Textile Co. Ltd. Companies controlled by the actual controller of thiscompany
Suzhou Hengli Intelligent Technology Co. Companies controlled by the actual controller of this
Ltd. Dalian Branch company
Xinhai No. 4 (Tianjin) Ship Leasing Co. Ltd. Note 1
Note 1: Hengli Shipping (Dalian) Co. Ltd. (a subsidiary of the Company) leases vessels from Xinhai
No.4 (Tianjin) Ship Leasing Co. Ltd. which were originally purchased by Xinhai No.4 from Hengli
Shipbuilding (Dalian) Co. Ltd. (a related party of the Company). In accordance with the principle of287
substance over form the relevant leasing fees paid to Xinhai No. 4 (Tianjin) Ship Leasing Co. Ltd. were
disclosed as related-party transactions.Other notes:
None
5. Related party transactions
(1). Related transactions involving the purchase and sale of goods and the provision and receipt of
labor services
Purchase of goods/acceptance of labor services
√适用□不适用
Unit: Yuan Currency: RMB
Approved Whether the
Related party Nature of Current year transaction transaction limittransaction amount (if is exceeded (if Prior year
applicable) applicable)
Jiangsu Boyada
Textile Co. Others 166226.44 300000.00 No 109077.17
Ltd.Suzhou
Wujiang Tongli
Lake Tourism Others 30939.59 150000.00 No 70462.44
Resort Co. Ltd.Jiangsu
Deshun Textile Others 613216.32 1500000.00 No 1234813.2
Co. Ltd. 9
Jiangsu
Deshun Textile Steam 841772.19 2500000.00 No 1174868.7
Co. Ltd. 9
Jiangsu Dehua
Textile Co. Others 4521363.96 8200000.00 No 3778487.8
Ltd. 0
Suqian Bailong
Landscape Fixed assets
Technology etc. No 876828.00
Co. Ltd.Dalian Kangjia
Property
Service Co. Others 6626506.62 10000000.00 No
6688447.2
0
Ltd.Suzhou
Tonglihong
Brewing Co. Others 15350.00 150000.00 No 7350.00
Ltd.Suzhou Hengli
Intelligent 52895508.4
Technology Others 3 51200000.00 Yes
43745283.
01
Co. Ltd.Suzhou Hengli
Intelligent Others 3773584.91 3800000.00 No
Technology288
Co. Ltd. Dalian
Branch
Suzhou Hengli
System Fixed assets 12281362.1
Integration etc. 3 20000000.00 No
4477878.6
1
Co. Ltd.Suzhou Hengli
System
Integration Others 54685.85 5000000.00 No
Co. Ltd.Nantong Deji
Concrete Co. Concretemortar 7047612.43 40000000.00 No
15909480.
Ltd. 30
Nantong Deji
Concrete Co. Others 3140681.79 6600000.00 No 61389.38
Ltd.Suzhou
Tonglihong
E-commerce Others 974207.87 4750000.00 No
2246986.0
2
Co. Ltd.Guangdong
Songfa
Ceramics Co. Others - No 141631.86
Ltd.Jiangsu Peijie
Textile
Intelligent Fixed assetsetc. 223008.85 4770000.00 NoTechnology
Co. Ltd.Jiangsu Peijie
Textile
Intelligent Others 2327154.86 20000000.00 No 9220527.0
Technology 0
Co. Ltd.Suzhou Gufeng
Asset
Management Others 1996857.80 3010000.00 No
2124701.8
2
Co. Ltd.Hengli Import
& Export Co. Others 229712.14 780000.00 No 426523.62
Ltd.Jiangsu
Wuzhou Bay
Hengli Others 548976.25 2000000.00 No 1112178.8
International 4
Hotel Co. Ltd.Sichuan Hengli
Intelligent
Textile Fixed assets
Technology etc.
2250000.00 No 63343.68
Co. Ltd.Sichuan Hengli
Intelligent Others 962474.85 30000000.00 No
1555124.5
2289
Textile
Technology
Co. Ltd.Dalian Victoria
Property 6042827.5
Services Co. Others 5953998.27 7520000.00 No 1
Ltd.Hengli
(Suzhou)
Textile Sales Others 2668.58 30000.00 No
Co. Ltd.Hengli
(Guizhou)
Textile
Intelligent Others 3064038.68 3500000.00 No
1067516.8
8
Technology
Co. Ltd.Hengli
(Guizhou)
Textile Fixed assets
Intelligent etc. 223008.85 350000.00 No
Technology
Co. Ltd.Hengli
International
Hotel (Suqian) Others 149495.14 320000.00 No 184891.87
Co. Ltd.Hengli Marine
Engineering Others 2000000.00 No 1203539.8(Dalian) Co. 2
Ltd.Hengli Green
Building
Materials Engineering 685593.36 200000000.00 No
(Dalian) Co. materials etc.
Ltd.Hengli
Equipment
Manufacturing Engineering 187477955
(Dalian) Co. materials etc.
190000000.00 No .65
Ltd.Hengli
Shipbuilding
(Dalian) Co. Others 554877.83 51000000.00 No 115325.63
Ltd.Dalian Hengli 1656174.4
Hotel Co. Ltd. Others 2690616.52 3350000.00 No 9
Shenzhen
Lizheng Design
& Planning Co. Others 174257.43 300000.00 No 941747.58
Ltd.Beijing Silk Others 36714477.8Road Winery 8 38835200.00 No
23258814.
16290
Co. Ltd.Suzhou Hengli
Youke
Apartment Others 22037.75 70000.00 No
Management
Co. Ltd.Chaozhou
Songfa
Ceramics Co. Others 32867.26 70000.00 No
Ltd.Sales of goods/provision of services
√适用□不适用
Unit: Yuan Currency: RMB
Related parties Nature of transaction Current year Prior year
Jiangsu Boyada Textile
Co. Ltd. Polyester yarn 47405172.17 93384231.34
Jiangsu Boyada Textile
Co. Ltd. Steam 3519218.73 8874488.37
Jiangsu Boyada Textile
Co. Ltd. Others 112579.54 189157.96
Jiangsu Boyada Textile
Co. Ltd. Refined oil 262229.74 559994.35
Wujiang Huajun Textile
Co. Ltd. Steam 45943.56 33077.72
Wujiang Huajun Textile
Co. Ltd. Others 2376.79 19293.37
Wujiang Huajun Textile
Co. Ltd. Polyester yarn 3595455.03 2116044.05
Jiangsu Deshun Textile
Co. Ltd. Polyester yarn 67240546.72 101620017.68
Jiangsu Deshun Textile
Co. Ltd. Others 36974.84 123275.86
Jiangsu Deshun Textile
Co. Ltd. Refined oil 110059.91
Jiangsu Dehua Textile
Co. Ltd. Polyester yarn 59287368.79 53556371.61
Jiangsu Dehua Textile
Co. Ltd. Others 48351.87 56581.27
Jiangsu Dehua Textile
Co. Ltd. Refined oil 95600.00
Sichuan Hengli Intelligent
Textile Technology Co. Polyester yarn 232930149.95 384477341.36
Ltd.Sichuan Hengli Intelligent
Textile Technology Co. Refined oil 123451.32
Ltd.Jiangsu Peijie Textile
Intelligent Technology Refined oil 354575.40
Co. Ltd.Jiangsu Peijie Textile
Intelligent Technology Polyester yarn 203642315.33 343475556.86
Co. Ltd.291
Jiangsu Peijie Textile
Intelligent Technology Others 53590.97 189205.79
Co. Ltd.Nantong Deji Concrete
Co. Ltd. Others 817.92 11634.61
Hengli (Guizhou) Textile
Intelligent Technology Polyester yarn 167780163.75 267295424.19
Co. Ltd.Hengli (Guizhou) Textile
Intelligent Technology Refined oil 65958.41
Co. Ltd.Hengli Cloud Commerce
Technology Co. Ltd. Others 633.00 2183.37
Hengli Heavy Industry
Group Co. Ltd. Others 546125.30
Hengli Engine (Dalian)
Co. Ltd. Refined oil and others 5925019.82 1797913.41
Hengli Engine (Dalian)
Co. Ltd. Concrete 5161410.18
Hengli Precision Casting
(Dalian) Co. Ltd. Refined oil and others 243454.78
Hengli Precision Casting
(Dalian) Co. Ltd. Concrete 18708.74
Hengli Green Building
Materials (Dalian) Co. Refined oil and others 3555188.91 1604265.31
Ltd.Hengli Green Building
Materials (Dalian) Co. Steam 2251054.07 2810759.03
Ltd.Hengli Shipbuilding
(Dalian) Co. Ltd. Refined oil and others 369956478.54 45103375.05
Hengli Shipbuilding
(Dalian) Co. Ltd. Concrete 441819581.04 72456924.73
Hengli Shipbuilding Engineering materials
(Dalian) Co. Ltd. etc. 269330.95
Hengli Shipbuilding
(Dalian) Co. Ltd. Steam 2331865.83
Hengli Shipbuilding
(Dalian) Co. Ltd. Chemicals 1593392.26
Hengli Equipment
Manufacturing (Dalian) Refined oil and others 1681158.23
Co. Ltd.Hengli Integrated
Services (Dalian) Co. Ltd. Concrete 17203.88
Hengli Marine
Engineering (Dalian) Co. Refined oil and others 825688.10 6810984.43
Ltd.Hengli Marine
Engineering (Dalian) Co. Concrete 224548.53
Ltd.Hengli Marine Outfitting
(Dalian) Co. Ltd. Others 1035269.42
Hengli Marine Outfitting Concrete 3000400.48292
(Dalian) Co. Ltd.
Suzhou Gufeng Asset
Management Co. Ltd. Others 973.45 1173.50
Suzhou Hengli Real
Estate Co. Ltd. Others 46932.47 55295.10
Jiangsu Wuzhou Bay
Hengli International Others 77488.00
Hotel Co. Ltd.Suzhou Kangjia Property
Management Co. Ltd. Others 23538.93
Shanghai Ruicheng Yida
Supply Chain Technology Refined oil and others 381395732.32
Co. Ltd.Shanghai Ruicheng Yida
Supply Chain Technology Chemicals 227200116.13
Co. Ltd.Dalian Licheng Real
Estate Co. Ltd. Concrete 36543.69
Note to purchase and sale of goods acceptance and provision of labor services
□适用√不适用
(2). Related entrusted management/contracting and entrusted management/contracting
The Company's entrusted management/contracting situation table:
□适用√不适用
Note to custodian/contracting situation with related party
□适用√不适用
The Company's entrusted management/outsourcing situation
□适用√不适用
Note to entrusted management/outsourcing with related party
□适用√不适用
(3). Rental with related party
The Company as the lessor:
√适用□不适用
Unit: Yuan Currency: RMB
Tenant Category of lease Rental income included in Rental income recognized inassets current period prior year
Hengli (Suzhou) Property and real
Textile Sales Co. estate 1207904.60
Ltd.Hengli Real Estate Property and real
(Dalian) Co. Ltd. estate 1284730.60 2092450.74
Hengli Heavy Property and real
Industry Group estate 10158898.62 9498623.85
Co. Ltd.Hengli Property and real 4355532.32 2177766.17293
Shipbuilding estate
(Dalian) Co. Ltd.
Guangdong Property and real
Songfa Ceramics estate 110526.24
Co. Ltd.Sichuan Hengli Property and real
Intelligent Textile estate
Technology Co. 1592920.35
Ltd.Dalian Hengli Property and real
Hotel Co. Ltd. estate 498220.20 332146.79294
The Company as the lessee:
√适用□不适用
Unit: Yuan Currency: RMB
Current year Prior year
Rental
charge of Variable
Rental
lease charge of
Variable
short-ter short-ter lease
m leases payments payments
and not
m leases not
low-value included
and included
Lessor's Category of in the Interest Increase low-valueexpense of in the
Interest Increase
name lease assets asset measure Rent paid assetleases of lease Right-of-u leases measure Rent paid
expense of
under ment of ment of
of lease Right-of-u
lease liabilities se assets under lease liabilities se assetssimplified liabilities simplifiedmethod method liabilities
(if (if (if (if
applicable applicable) applicable
applicable
)))
Jiangsu Property and
Deshun real estate 910554.5 910554.5 217654.0 217654.0
Textile Co. 4 4 7 7
Ltd.Jiangsu Property and
Boyada real estate 916580.2 916580.2 1126670 1126670
Textile Co. 8 8 .77 .77
Ltd.Hengli Property and
Industrial real estate
Investment 1164073 1420583 1164073 287943.8
(Suzhou) Co. 8.68 .44 8.68 3
Ltd.Hengli Real Property and
Estate real estate 183853.2 183853.2
(Dalian) Co. 1 1295
Ltd.Suzhou Property and
Tonglihong real estate
E-commerce 11009.17 11009.17 11009.17 11009.17
Co. Ltd.Jiangsu Peijie Property and
Textile real estate
Intelligent 11009.17 11009.17 11009.17 11009.17
Technology
Co. Ltd.Jiangsu Property and
Wuzhou Bay real estate
Hengli
International 27522.94 27522.94
Hotel Co.Ltd.Chen Jianhua Property and 1904761 1904761real estate .90 .90
Xinhai No. 4
(Tianjin) Ship Ships 2896655 6430539 -399397 9233946 6675792 3993975Leasing Co. 4.19 .82 566.24 8.41 .04 66.24
Ltd.Note to rental with related party
□适用√不适用296
(4). Guarantee with related parties
The Company as the guarantor
□适用√不适用
The Company as the guaranteed party
√适用□不适用
Unit: Yuan Currency: RMB
Whether
the
Guarantor Guaranteed Amount Start date of Guaranteeguarantee expiry date guaranteehas been
fulfilled
Chen Jianhua Fan Hongwei CNY4677165990.79
[Note 1] 2023/5/24 2038/5/21 No
Chen Jianhua and Fan
Hongwei CNY2107020169.24 2021/8/20 2031/8/20 No
Chen Jianhua Fan Hongwei CNY203921863.62
[Note 2] 2021/12/14 2026/12/14 No
Chen Jianhua Fan Hongwei
Hengli Group Co. Ltd. [Note CNY11638590000.00 2023/6/29 2033/6/15 No
3]
Chen Jianhua Fan Hongwei
Hengli Group Co. Ltd. Jiangsu
Boyada Textile Co. Ltd.Jiangsu Deshun Textile Co. USD750000000.00
Ltd. Jiangsu Dehua Textile 2018/5/3 2033/5/2 No
Co. Ltd. Wujiang Chemical
Fiber Weaving Factory Co.Ltd. [Note 4]
Chen Jianhua Fan Hongwei
Hengli Group Co. Ltd. Jiangsu
Boyada Textile Co. Ltd.Jiangsu Deshun Textile Co. CNY20600000000.00
Ltd. Jiangsu Dehua Textile 2018/5/3 2033/5/2 No
Co. Ltd. Wujiang Chemical
Fiber Weaving Factory Co.Ltd. [Note 5]
Chen Jianhua Fan Hongwei
Jiangsu Boyada Textile Co.Ltd. Jiangsu Deshun Textile
Co. Ltd. Jiangsu Dehua CNY5694500000.00 2019/12/19 2034/12/19 No
Textile Co. Ltd. Wujiang
Chemical Fiber Weaving
Factory Co. Ltd. [Note 6]
Hengli Group Co. Ltd. [Note CNY3072949641.18
7] 2022/2/26 2029/6/17 No
Hengli Group Co. Ltd. [Note CNY200000000.00
8] 2020/4/21 2028/2/19 No
Hengli Group Co. Ltd. CNY16176534190.82 2024/7/31 2028/6/5 No
Hengli Group Co. Ltd. [Note
9] CNY1717845421.47 2024/7/31 2028/6/5 No
Guarantee with related parties297
√适用□不适用
[Note 1]: The Company also provides mortgage guarantees in the form of buildings land use rights
machinery and equipment and construction in progress.[Note 2]: The Company also provides mortgage guarantee with the right to use the sea area.[Note 3]: The Company also provides mortgage guarantees in the form of buildings land use rights
machinery and equipment and construction in progress.[Note 4]: The Company also provides mortgage guarantees in the form of buildings land use rights
machinery and equipment and construction in progress.[Note 5]: The Company also provides mortgage guarantees in the form of buildings land use rights
machinery and equipment and construction in progress.[Note 6]: The Company also provides mortgage guarantees in the form of buildings land use rights
machinery and equipment and construction in progress.[Note 7]: The Company also provides mortgage guarantees in the form of buildings and land use rights.[Note 8]: The Company also provides mortgage guarantees in the form of buildings land use rights and
machinery and equipment.[Note 9]: The Company also deposits a margin as collateral.
(5). Loans and borrowings with related parties
□适用√不适用
(6). Assets transfer and debt restructuring with related parties
√适用□不适用
Unit: Yuan Currency: RMB
Related party Nature of transaction Current year Prior year
Sichuan Hengli
Intelligent Textile Property and realestate 6629784.86 18281967.86Technology Co. Ltd.Hengli Marine
Engineering (Dalian) Machinery andequipment 1746895.01Co. Ltd.Hengli Shipbuilding Machinery and
(Dalian) Co. Ltd. equipment 1118535.98 4318584.06
(7). Compensation of key management personnel
√适用□不适用
Unit: ten-thousand-yuan Currency: RMB
Item Current year Prior year
Compensation of key management
personnel 1196.45 1165.91
(8). Other related-party transactions
√适用□不适用
（1） The Company purchases and sells for related parties
Unit: Yuan Currency: RMB
Name of related party Transaction content Current year Prior year
Hengli (Suzhou) Textile
Sales Co. Ltd. Electricity 226073.98
497332.67
Jiangsu Boyada Textile
Co. Ltd. Electricity 1257861.11
981853.23298
Jiangsu Deshun Textile
Co. Ltd. Electricity 45923780.52
69264098.05
Sichuan Hengli Intelligent 152379833.24
Textile Technology Co.Electricity 89309484.95
Ltd.Nantong Deji Concrete
Co. Ltd. Electricity -
18636.21
Jiangsu Dehua Textile Co.Ltd. Electricity 91720.12
（2） Related parties purchase and sell for the Company
Unit: Yuan Currency: RMB
Name of related party Transaction content Current year Prior year
Jiangsu Deshun TextileWater electricity 394968.92 607374.02
Co. Ltd.Jiangsu Boyada TextileWater electricity 461433.68 476015.85
Co. Ltd.Suzhou Gufeng AssetWater electricity 207224.67 98276.07
Management Co. Ltd.
（3） The Company collects and makes payments on behalf of related parties.
Unit: Yuan Currency: RMB
Payments to related parties
Related party Relationship Beginning
balance Amount incurred Closing balance
Hengli (Guizhou)
Textile Intelligent Companies
Technology Co. controlled by the 15151622.22
-
Ltd. actual controller
Total 15151622.22 -
Pursuant to a tripartite agreement the Company directly
Reasons for the formation of settled the amounts payable to the contractor by paying
related-party receivables and payables the amounts due from the contractor to Hengli (Guizhou)
Textile Intelligent Technology Co. Ltd.
6. Unsettled items such as receivables and payables with related parties
(1). Receivables from related parties
√适用□不适用
Unit: Yuan Currency: RMB
Closing balance Beginning balance
Item Relatedparties Book balance Provision for Provision for badbad debts Book balance debts
Hengli
Notes Shipbuilding
receivable (Dalian) Co. 4582500.00 229125.00
Ltd.Hengli
Notes Equipment
receivable Manufacturin 1527492.60 76374.63g (Dalian)
Co. Ltd.299
Wujiang
Accounts Huajun
receivable Textile Co. 8416.76 420.84 6860.70 343.04
Ltd.Hengli
Accounts Shipbuilding 10251590.2
receivable (Dalian) Co. 7 512579.51 71737207.22 3586860.36
Ltd.Hengli Heavy
Accounts Industry
receivable Group Co. 298348.00 14917.40 2510864.58 125543.23
Ltd.Accounts Hengli Engine
receivable (Dalian) Co. 36465.00 1823.25 18850.00 942.5Ltd.Hengli
Accounts Marine
receivable Outfitting 8540.00 427.00 796332.50 39816.63(Dalian) Co.Ltd.Accounts Jiangsu
receivable Dehua Textile 7274.42 363.72Co. Ltd.Jiangsu
Accounts Deshun
receivable Textile Co. 182587.55 9129.38 4754.00 237.7
Ltd.Hengli Real
Accounts Estate
receivable (Dalian) Co. - - 733655.04 36682.75
Ltd.Accounts Dalian Hengli
receivable Hotel Co. - - 135765.00 6788.25Ltd.Hengli
Accounts Precision
receivable Casting 18450.00 922.50(Dalian) Co.Ltd.Suzhou
Prepayments Gufeng AssetManagement 463848.00 424878.00
Co. Ltd.Jiangsu
Prepayments BoyadaTextile Co. 14250.00 207250.00
Ltd.Jiangsu
Wuzhou Bay
Prepayments HengliInternational 847.00 1242.00
Hotel Co.Ltd.300
Hengli
Industrial
Prepayments Investment 363177.60
(Suzhou) Co.Ltd.
(2). Payable to related parties
√适用□不适用
Unit: Yuan Currency: RMB
Item Related party Closing book balance Beginning book balance
Jiangsu Peijie Textile
Notes Payable Intelligent 129040.40
Technology Co. Ltd.Suzhou Hengli
Notes Payable Intelligent 253053.07
Technology Co. Ltd.Hengli Green Building
Notes Payable Materials (Dalian) 774720.50
Co. Ltd.Notes Payable Nantong DejiConcrete Co. Ltd. 890400.00
Suzhou Hengli
Accounts payable System Integration 3987575.33 343454.32
Co. Ltd.Suzhou Hengli
Accounts payable Intelligent 11518800.00 7300.88
Technology Co. Ltd.Suzhou Hengli
Accounts payable IntelligentTechnology Co. Ltd. 2000000.00
Dalian Branch
Accounts payable Jiangsu ChangshunTextile Co. Ltd. 97788.73
Accounts payable Jiangsu Dehua TextileCo. Ltd. 4090.27
Hengli (Guizhou)
Accounts payable Textile Intelligent 2694917.77 185084.08
Technology Co. Ltd.Sichuan Hengli
Accounts payable Intelligent Textile 1712603.64
Technology Co. Ltd.Accounts payable Jiangsu DeshunTextile Co. Ltd. 4207.08
Jiangsu Peijie Textile
Accounts payable Intelligent 819589.93 413389.48
Technology Co. Ltd.Dalian Victoria
Accounts payable Property Services Co. 30000.00
Ltd.Hengli Marine
Accounts payable Engineering (Dalian) 1973991.36
Co. Ltd.301
Accounts payable Hengli Shipbuilding(Dalian) Co. Ltd. 4880000.00
Accounts payable Nantong DejiConcrete Co. Ltd. 876722.92 4635078.69
Suqian Bailong
Accounts payable Landscape - 666221.00
Technology Co. Ltd.Accounts payable Jiangsu BoyadaTextile Co. Ltd. 37700.00
Sichuan Hengli
Other payables Intelligent Textile 10862.21
Technology Co. Ltd.Hengli Green Building
Other payables Materials (Dalian) 773608.53
Co. Ltd.Other payables Jiangsu BoyadaTextile Co. Ltd. 58.15
(3). Other items
√适用□不适用
Unit: Yuan Currency: RMB
Item Related party Closing book balance Beginning book balance
Contract liabilities Jiangsu BoyadaTextile Co. Ltd. 733353.13 174513.90
Contract liabilities Wujiang HuajunTextile Co. Ltd. 4.19 4.19
Contract liabilities Jiangsu DeshunTextile Co. Ltd. 813094.68 450204.06
Jiangsu Peijie Textile
Contract liabilities Intelligent 1859799.86 1672716.23
Technology Co. Ltd.Contract liabilities Jiangsu Dehua TextileCo. Ltd. 1833388.23 711370.27
Contract liabilities Hengli Shipbuilding(Dalian) Co. Ltd. 1048513.76 17264023.78
Hengli (Guizhou)
Contract liabilities Textile Intelligent 2517780.43 4386015.11
Technology Co. Ltd.Contract liabilities Hengli Engine(Dalian) Co. Ltd. 26720.00 320551.50
Hengli Marine
Contract liabilities Engineering (Dalian) 30774.97 30774.97
Co. Ltd.Hengli Precision
Contract liabilities Casting (Dalian) Co. 91711.24
Ltd.Hengli Green Building
Contract liabilities Materials (Dalian) 633076.15
Co. Ltd.Hengli Equipment
Contract liabilities Manufacturing 9382.88 9382.88
(Dalian) Co. Ltd.302
Sichuan Hengli
Contract liabilities Intelligent Textile 10074325.98 9894599.76
Technology Co. Ltd.
7. Commitments with related party
□适用√不适用
8. Others
□适用√不适用
XV. Share-based payment
1. Equity instruments
(1). Details
□适用√不适用
(2). Stock options or other equity instruments outstanding at the end of the period
□适用√不适用
2. Equity-settled share-based payments
√适用□不适用
Unit: Yuan Currency: RMB
Recipients of equity-settled share-based payments
Method in determining the fair value of equity
instruments at the date of grant
Important parameters for the fair value of equity
instruments on the grant date
Basis in determining the quantity of exercisable It is expected that the on-the-job employees will
equity instruments eventually obtain the corresponding benefits ofthe employee share incentive plan
Reasons for the significant difference between the
current estimate and the previous estimate None
Accumulated amount recorded in capital reserve
for equity-settled share-based payments 483094795.28
Other notes:
None
3. Information on cash-settled share-based payments
□适用√不适用
4. Share-based payment expenses for this period
√适用□不适用
Unit: Yuan Currency: RMB
Grant object category Share-based payment expenses Share-based payment expenses
settled in equity settled in cash
Company employees 34575569.00
Total 34575569.00
Other notes303
None
5. Modifications and terminations of share-based payments
□适用√不适用
6. Others
□适用√不适用
XVI. Commitments and contingencies
1. Significant commitments
√适用□不适用
Significant external commitments nature and amount on the balance sheet date
(1). Signed external investment contracts that have not yet been performed or have not been fully
performed and related financial expenditures
Item Closing balance Beginning balance
Commitment to purchase and 673503664.04 1209635646.74
build long-term assets
Unused letter of credit issued 1867840369.52 4992331472.87
Letter of guarantee not due for 70000000.00 79832353.83
payment
Total 2611344033.56 6281799473.44
(2). Leases that the lessee has committed but not started and their financial impact
Item Closing balance
Undiscounted lease payments:
1 year after balance sheet date 32897979.59
2 years after balance sheet date 24321072.54
3 years after balance sheet date 22542835.47
Thereafter 22024798.32
Total 101786685.92
2. Contingencies
(1). Important contingencies existing on the balance sheet date
□适用√不适用
(2). If the Company has no important or contingencies that need to be disclosed it should also
explain:
□适用√不适用
3. Others
√适用□不适用
1．Contingent liabilities arising from pending litigation or arbitration and their financial impact
The Company has no contingent liabilities arising from pending litigation or arbitration.304
2．Contingent liabilities arising from debt guarantees provided to other entities and their
financial implications
The Company does not provide any debt guarantee for other units.
3．Other contingent liabilities and their financial impact
For details of bank acceptance bills that have been discounted or endorsed and have not maturedon the balance sheet date please refer to the “Notes to Consolidated Financial Statements Items —Receivables Financing”.XVII.Post-balance sheet events
1. Significant non-adjustment matters
□适用√不适用
2. Profit distribution
√适用□不适用
Unit: Yuan Currency: RMB
Proposed dividend per 10 shares (Yuan) 2.90
Dividend per 10 shares declared and
approved for distribution (Yuan) 2.90
Profit distribution plan The 3rd meeting of the 10th Board of Directors of the
Company deliberated and approved the proposed profit
distribution plan for 2025: based on the total share capital
on the date of equity distribution and registration a cash
dividend of RMB 2.90 (including tax) per 10 shares will be
distributed to all shareholders.
3. Sales returns
□适用√不适用
4. Other post-balance sheet events
□适用√不适用
XVIII. Other important matters
1. Correction of prior accounting errorsFor details please refer to the section “Analysis and Explanation of the Reasons and Effects of Changesin Accounting Policies Accounting Estimates or Corrections of Significant Accounting Errors” under
“Significant Matters.”
2. Debt restructuring
□适用√不适用
3. Asset swap
(1). Non-monetary asset exchange
□适用√不适用305
(2). Other asset swap
□适用√不适用
4. Annuity plan
□适用√不适用
5. Discontinuation of operation
□适用√不适用
6. Segment information
(1). Basis for determining reporting segments and accounting policies
√适用□不适用
According to the Company's internal organizational structure management requirements and
internal reporting system the Company mainly operates in three business segments: petrochemical
business segment polyester business segment headquarters and other business segments the
Company's management evaluate the operating results of these segments to determine the allocation
of resources and evaluate their performance.Segment report information is disclosed based on the accounting policies and measurement
standards adopted by each segment when reporting to management. These measurement bases are
consistent with the accounting and measurement bases used in the preparation of financial
statements.
(2). Financial information of the reporting segment
√适用□不适用
Unit: ten-thousand-yuan Currency: RMB
Headquarters
Item Petrochemical Polyester and other
Elimination
segment segment business between Totalsegments
segment
Segment
revenue 23632810.42 3974457.01 14729983.63 -22228521.02 20108730.04
Including:
External 8573349.81 3944862.08 7590518.15 - 20108730.04
revenue
Inter-s
egment sales 15059460.61 29594.93 7139465.48 -22228521.02 -
Segment cost 21435042.44 3696490.07 14566311.94 -22240997.72 17456846.73
Segment
profit (loss) 805350.78 5411.14 706002.06 -574724.75 942039.23
Total assets 19223624.88 7292275.49 6681338.06 -6971339.48 26225898.95
Total
liabilities 13561945.95 5923358.15 2371427.47 -2309959.74 19546771.83
(3). If the Company has no reportable segment or cannot disclose the total assets and total
liabilities of each reportable segment the reasons shall be explained
□适用√不适用306
(4). Other notes
□适用√不适用
7. Other significant transactions and events affecting investors' decision-making
√适用□不适用
(1). Pledge of the Company’s shares by the parent Company and the ultimate controller Chen Jianhua
and Fan Hongwei’s family
Pledgor Pledgee Pledge period Number of
pledged shares
Hengli Group China Everbright Bank Co. Ltd. Suzhou
Co. Ltd. Branch 2024/1/5-2026/12/25 30000000.00
Hengli Group Agricultural Bank of China Suzhou
Co. Ltd. Yangtze River Delta Integration
January 26 2024 - 328000000.0
Demonstration Zone Branch March 11 2026 0
Hengli Group Wujiang Shengze Branch of China 2024/June 14 2031 - 608000000.0
Co. Ltd. Construction Bank February 27 2031 0
Hengli Group Huaxia Bank Co. Ltd. Suzhou Branch 2024/11/6-2027/10/3 142000000.0Co. Ltd. 1 0
Hengneng
Investment
(Dalian) Co. CITIC Securities Co. Ltd. 2024/1/4-2027/1/4 32000000.00
Ltd.Hengneng
Investment
(Dalian) Co. CITIC Securities Co. Ltd. 2024/12/3-2027/12/3 62000000.00
Ltd.Hengneng
Investment
(Dalian) Co. Yunnan International Trust Co. Ltd.
June 9 2025 - June 10 108000000.0
20260
Ltd.Hengneng
Investment
(Dalian) Co. CITIC Bank Co. Ltd. Suzhou Branch 2025/9/25-2030/9/24 53000000.00
Ltd.Hengneng
Investment
(Dalian) Co. Tibet Trust Co. Ltd.
2025/11/17-2026/11/
1862700000.00
Ltd.Hengneng
Investment Industrial Bank International Trust Co.
(Dalian) Co. Ltd. 2025/12/2-2026/12/3 55000000.00
Ltd.Hengneng
Investment
(Dalian) Co. Tibet Trust Co. Ltd.
2025/12/19-2027/1/2
256000000.00
Ltd.Hengneng
Investment
(Dalian) Co. Tibet Trust Co. Ltd.
2025/12/23-2027/1/2
256000000.00
Ltd.Hengneng Xingyin Wealth Management Co. Ltd. [Note] 13500000.00307
Pledgor Pledgee Pledge period Number of
pledged shares
Investment
(Dalian) Co.
Ltd.[Note] The share pledge of Hengli Group is mainly used to provide pledge guarantee for the trust
plan established by employees of Hengli Group and its related subsidiaries. The specific pledge
expiration date is subject to the actual pledge cancellation registration procedures.
8. Others
□适用√不适用
XIX. Notes on important items of parent company's financial statements
1. Accounts receivable
(1). Disclosure by aging
√适用□不适用
Unit: Yuan Currency: RMB
Aging Closing balance Beginning balance
Within one year (including one
year) 158106200.00 869420.04
Subtotal within one year 158106200.00 869420.04
1 to 2 years
2 to 3 years
3 years or more
3 to 4 years
4 to 5 years
Over 5 years
Total 158106200.00 869420.04
(2). Disclosure by provision for bad debts method
√适用□不适用
Unit: Yuan Currency: RMB
Closing balance Beginning Balance
Book balance Provision for Provision forbad debts Book balance bad debts
Category Provis Book Provisi Book
Amou Ratio Amou ion value Amou Ratio Amou on value
nt (%) nt rate nt (%) nt rate
(%)(%)
Provision for
bad debts on
individual
basis
Including:
Provision for
bad debts on 15810620 100.0
1581
0620 8694 100.0 4347 8259portfolio 0.00 0 0.00 20.04 0 1.00
5.0049.04
basis308
Including:
Consolidation 1581 1581
of related 0620 100.0 0620
parties 0.00 0 0.00
Aging
analysis 8694 100.0 4347 8259
portfolio 20.04 0 1.00
5.0049.04
15811581
Total 0620 100.0 / 0620 8694 100.0 4347 8259
0.000
5.00
0.0020.0401.0049.04
Provision for bad debts on individual basis:
□适用√不适用
Provision for bad debts on portfolio basis:
√适用□不适用
Provision on portfolio basis: Consolidation of related parties
Unit: Yuan Currency: RMB
Closing balance
Name
Book balance Provision for bad debts Provision rate (%)
Consolidation of
related parties 158106200.00
Total 158106200.00
Notes for provision for bad debts on portfolio basis:
□适用√不适用
Accrual provision for bad debts based on the general model of expected credit losses
□适用√不适用
Basis for dividing each stage and proportion of provision for bad debts
None
Explanation of significant changes in the book balance of accounts receivable due to changes in
provisions for losses incurred during the current period:
□适用√不适用
(3). Provision for bad debts
√适用□不适用
Unit: Yuan Currency: RMB
Movement in the period
Category Beginning Closingbalance Accrual Recovery or Transfer or Other balancereversal written-off movement
Provision for
bad debts on
individual -
basis
Provision for
bad debts on 43471.00 -43471.00
portfolio basis309
Total 43471.00 -43471.00
Of which the amount of provision for bad debts recovered or reversed in this period is significant:
□适用√不适用
Other notes:
None
(4). Accounts receivable actually written off this period
□适用√不适用
The important write-off of accounts receivable:
□适用√不适用
Notes for write-off of accounts receivable:
□适用√不适用
(5). Accounts receivable and contract assets with the top five balances by counterparty as of the end
of the period
√适用□不适用
The Company’s top five year-end book balances for accounts receivable in total of RMB
158106200.00 accounting for 100.00% of the total account balance of year-end balances of accounts
receivable and the corresponding year-end book balance of provision for bad debts is RMB 0.00.Other notes:
None
Other notes:
□适用√不适用
2. Other receivables
Presented by item
√适用□不适用
Unit: Yuan Currency: RMB
Item Closing balance Beginning balance
Interest receivable
Dividends receivable 132659920.68 198989881.02
Other receivables 1775939073.35 136847310.02
Total 1908598994.03 335837191.04
Other notes:
□适用√不适用
Interest receivable
(1). Interest receivable by category
□适用√不适用310
(2). Significant overdue interest
□适用√不适用
(3). Disclosure by provision for bad debts method
□适用√不适用
Provision for bad debts on individual basis:
□适用√不适用
Notes for provision for bad debts on individual basis:
□适用√不适用
Provision for bad debts on portfolio basis:
□适用√不适用
(4). Provision for bad debts based on the general model of expected credit losses
□适用√不适用
Basis dividing each stage and proportion of provision for bad debts:
None
Explanation of significant changes in the book balance of interest receivable due to changes in
provisions for losses incurred during the current period:
□适用√不适用
(5). Provision for bad debts
□适用√不适用
The significant amount of provision for bad debts recovered or reversed in the current period:
□适用√不适用
Other notes:
None
(6). Interest receivable written-off during the year
□适用√不适用
The important write-off of Interest receivable:
□适用√不适用
Write-off Instructions:
□适用√不适用
Other Notes:
□适用√不适用311
Dividends receivable
(1).Dividends receivable
√适用□不适用
(2).Significant dividends receivable aged over 1 year
□适用√不适用
(3).Disclosure by provision for bad debts method
□适用√不适用
Provision for bad debts on individual basis:
□适用√不适用
Notes for provision for bad debts on individual basis
□适用√不适用
Provision for bad debts on portfolio basis:
□适用√不适用
(4).Provision for bad debts based on the general model of expected credit losses
□适用√不适用
Basis for dividing each stage and proportion of provision for bad debts:
None
Explanation of significant changes in the book balance of dividends receivable due to changes in
provisions for losses incurred during the current period:
□适用√不适用
(5).Provision for bad debts
□适用√不适用
The significant amount of provision for bad debts recovered or reversed in the current period:
□适用√不适用
Other notes:
None
(6).Dividends receivable written-off during the year
□适用√不适用
The important write-off of dividends receivable:
□适用√不适用
Write-off Instructions:
□适用√不适用
Other notes:312
□适用√不适用
Other receivables
(1). Disclosure by aging
√适用□不适用
Unit: Yuan Currency: RMB
Aging Closing book balance Beginning book balance
Within one year (including one
year) 1789461367.27 72674351.95
Subtotal within one year 1789461367.27 72674351.95
1 to 2 years 84308044.59
2 to 3 years 600400.00
3 years or more
3 to 4 years 400.00
4 to 5 years
Over 5 years
Total 1789461767.27 157582796.54
(2). Disclosure by nature
√适用□不适用
Unit: Yuan Currency: RMB
Nature Closing book balance Beginning book balance
accounts receivable 1519013888.89 -
Deposit and security deposit 400.00 2900.00
other 270447478.38 157579896.54
Total 1789461767.27 157582796.54
(3). Information of provision for bad debts
√适用□不适用
Unit: Yuan Currency: RMB
First stage Second stage Third stage
Provision for bad Expected Expected credit loss Expected credit loss
debts credit loss for lifetime (no for lifetime (credit Total
within next credit impairment impairment has
12 months occurred) occurred)
Balance of 1 January
202520735486.5220735486.52
Balance of 1 January
2025 during the
period
--transfer to second
stage
--transfer to third
stage
--Reverse to second
stage
--Reverse to first
stage
Provision for the -7212792.60 -7212792.60313
year
Reversal in the year
Transfer in the year
Write-off in the year
Other movement
Balance of 31
December 2025 13522693.92 13522693.92
Basis for dividing each stage and proportion of provision for bad debts:
For details on the basis for the division of each stage please refer to the explanation of
“Impairment of Financial Instruments” in “Major Accounting Policies and Accounting Estimates -Financial Instruments” in this note.Explanation of significant changes in other receivables book balance that have changed the loss
provision in the current period:
√适用□不适用
No significant changes occurred in the provision for losses in the current period.Basis for accruing provision for bad debts for the current period and assessing whether the credit risk
of financial instruments has increased significantly:
√适用□不适用
The basis input values assumptions and other information used to determine the provision for
bad debts amount and the assessment of whether the credit risk of financial instruments have
increased significantly since initial confirmation are detailed in “Credit Risk” in the “Risks Related toFinancial Instruments - Various Risks Arising from Financial Instruments” of this note.
(4). Provision for bad debts
√适用□不适用
Unit: Yuan Currency: RMB
Movement in the period
Category Beginning Closingbalance Provision Recovery Transfer or Other balanceor reversal written-off movement
Provision for
bad debts on
individual -
basis
Provision for
bad debts on 20735486 -7212792.6 13522693.portfolio .52 0 92
basis
Total 20735486 -7212792.6 13522693..52092
Of which the amount of provision for bad debts reversed or recovered in this period is significant:
□适用√不适用
Other notes:
None
(5). Other receivables actually written off this period
□适用√不适用314
The write-off of important other receivables:
□适用√不适用
Notes to write-off of other receivables:
□适用√不适用
(6). Other receivables with the top five balances by counterparty as of the end of the period
√适用□不适用
Unit: Yuan Currency: RMB
Percentage of
Company Closing other receivables Provision for bad
name balance at the end of the Nature Aging debts
period (%) closing balance
Tibet Trust Co. 4598923.1
Ltd. 5 0.26 Other
Within one
year 229946.16
Hengli
Petrochemical
(Dalian) New 14960138 Accounts Within one
Materials 88.89 83.60 receivable year
Technology
Co. Ltd.Employee
Stock 26582502 Within one6.67 14.86 Other year 13291251.33Ownership Plan
Hengli (Dalian)
Construction
Engineering 23000000.00 1.29
Accounts Within one
Service Co. receivable year
Ltd.Advance
payment of
employee
Housing
provident fund 12035.00 0.00
social Within one
security and year 601.75
housing
provident
fund
Total 1789449873.71 100.00 / / 13521799.241
(7). Other receivables reported due to centralized management of fund
□适用√不适用
Other notes:
□适用√不适用
3. Long-term equity investment
√适用□不适用
Unit: Yuan Currency: RMB
Item Closing balance Beginning balance315
Provision Provision
Book for Book Book for Book
balance impairme value balance impairme value
nt nt
Investment in 4442727 4442727 4442227 4442227
subsidiaries 5704.93 - 5704.93 5704.93 5704.93
Investment in associates
and joint ventures
Total 4442727 4442727 4442227 44422275704.93 - 5704.93 5704.93 - 5704.93
(1). Investment in subsidiaries
√适用□不适用
Unit: Yuan Currency: RMB
Beginnin Movement in the period Closing
Beginnin gbalance Closing balanceg Addition of
Investee balance of al Reduce
Provisio balance
provisio investm n for
provisio
(book investm impairm Others
(book
value) n for
n for
ent ent
value)
impairm ent impairm
ent ent
Suzhou
Fangtuan
wang 200000 200000
E-commer 0.00 0.00
ce Co.Ltd.Jiangsu
Hengli 108089 108089
Chemical 19000.0 19000.0
Fiber Co. 0 0
Ltd.Kanghui
New
Materials 193760 193760
Technolo 1065.09 1065.09
gy Co.Ltd.Hengli
Petroche
mical 500000 500000
Trading 00.00 00.00
Co. Ltd.Hengli
Internatio
nal 500000 500000
Trading 00.00 00.00
Co. Ltd.Hengli 175164 221361
Petroche 72093.2 461971
mical 2 9782.89
91876.1
1316
(Dalian)
Refining
&
Chemical
Co. Ltd.Hengli
Petroche
mical 500000 500000
Sales Co. 00.00 00.00
Ltd.Hengli
Petroche
mical 461971 -46197
(Dalian) 9782.89 19782.8 -
Chemical 9
Co. Ltd.Hengli
Investme
nt 938156 938156
(Dalian) 3763.73 3763.73
Co. Ltd.Hengli
Dagong
(Dalian)
Materials 600000 600000
Research 0.00 0.00
Institute
Co. Ltd.Hengli
(Dalian)
Constructi
on 500000 500000
Engineeri 0.00 0.00
ng Service
Co. Ltd.
444222 500000 444272Total 75704.9 0.00 75704.93 3
(2). Investment in associated and joint ventures
□适用√不适用
(3). Impairment test of long-term equity investments
□适用√不适用
Other notes:
None317
4. Operating income and operating cost
(1). Operating income and operating cost
√适用□不适用
Unit: Yuan Currency: RMB
Current year Prior year
Item
Revenue Cost Revenue Cost
Primary operations 404050068.74 - 548767228.58
Other operations 6776921.31 4796925.60 5034915.62 3031978.73
Total 410826990.05 4796925.60 553802144.20 3031978.73
(2). Breakdown of operating income and operating cost
□适用√不适用
Other notes:
□适用√不适用
(3). Note on performance obligations
□适用√不适用
(4). Description of apportionment to remaining performance obligations
□适用√不适用
(5). Significant contract changes or significant transaction price adjustments
□适用√不适用
Other notes:
None
5. Investment income
√适用□不适用
Unit: Yuan Currency: RMB
Item Current year Prior year
Income from long-term equity
investment by cost method 5964639220.68 1820989881.02
Income from long-term equity
investment by equity method
Gain from disposal of long-term equity
investment
Investment income of financial assets
held for trading during the holding
period
Investment income of other equity
instruments investment during the
holding period
Interest income from debts investment318
during the holding period
Interest income from other debt
investments during the holding period
Gain from disposal of financial assets
held for trading
Investment income from disposal of
other equity instruments investment
Gains from disposal of debts investment
Gain from disposal of other debt
investments
Gains from debt restructuring
Total 5964639220.68 1820989881.02
Other notes:
None
6. Others
√适用□不适用
None
XX. Supplementary information
1. Statement of non-recurring gains and losses for the current period
√适用□不适用
Unit: Yuan Currency: RMB
Item Amount Note
Gain or loss on disposal of non-current assets -1504018.08
Government grants that are included in the profit or
loss (closely related to the business of the
enterprise except for government grants that are 1642230152.61
subject to fixed or quantitative quotas in
accordance with national unified standards)
In addition to the effective hedging business related
to the normal business operations of the same
company the profit or loss from changes in fair
value of financial assets and financial liabilities held -267650745.42
by non-financial enterprises as well as the profit or
loss from the disposal of financial assets and
financial liabilities
Fund occupation fees charged to non-financial
enterprises included in the current profit or loss
Profit or loss of entrusting others to invest or
manage assets
Profit or loss from external entrusted loans
Provision for impairment arising from force majeure
such as natural disasters
Reversal of impairment provision for receivables
that have been individually tested for impairment
The investment cost of the enterprise's acquisition
of subsidiaries associates and joint ventures is less
than the return generated by the fair value of the
investee's identifiable net assets when the319
investment is made.Net profit of subsidiaries for the period from
beginning of the year to date of acquisition by
business combination under common control
Non-monetary assets exchange profit or loss
Profit or loss of debt restructuring
One-time expenses incurred by enterprises due to
the discontinuation of related business activities
such as the expenditure for resettling employees
One-time impact on current profit or loss due to
adjustments in tax accounting and other laws and
regulations
Share-based payment expenses recognized in one
time due to cancellation or modification of equity
incentive plans
For cash-settled share-based payments after the
vesting date the profit or loss arising from the
change in the fair value of employee compensation
payable
Profit or loss arising from changes in fair value of
investment real estate subsequently measured
using the fair value model
Gains from transactions with unfair transaction
prices
Profit or loss arising from contingencies unrelated to
the Company's normal business operations
Income from custody fees obtained from entrusted
operation
Other non-operating income and expenses other
than the above items 116679009.91
Other profit or loss items that meet the definition of
non-recurring profit or loss 2705080.13
Less: Income tax impact 367088974.56
Impact amount of minority shareholders'
equity (after tax) 35110.92
Total 1125335393.67If the Company recognizes items not listed in the “Explanatory Announcement No. 1 on InformationDisclosure by Companies that Offer Securities to the Public - Non-recurring Gains or Losses” as
non-recurring gains or losses with significant amounts and defines the non-recurring gains or losseslisted in the “Explanatory Announcement No. 1 on Information Disclosure by Companies that OfferSecurities to the Public - Non-recurring Gains or Losses” as recurring gains or losses the reasons should
be explained.□适用√不适用
Other notes:
□适用√不适用
2. Return on equity and earnings per share
√适用□不适用
Profit in reporting period Weighted average Earnings per share320
return on equity Basic earnings per Diluted earnings per
(%) share share
Net profit attributable to the
Company's common 10.85 1.01 1.01
shareholders
Net profit attributable to the
Company's common
shareholders after deducting 9.12 0.85 0.85
non-recurring gains and losses
3. Differences in accounting data under domestic and foreign accounting standards
□适用√不适用
4. Others
□适用√不适用
Chairman: Fan Hongwei
Date of submission approved by the Board of Directors: April 15 2026
Revised information
□适用√不适用
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