Stock Code: 600873 Stock Abbreviation: Meihua Bio
This is an English translation from the 2026 Semi-Annual Report in case of any
inconsistency the Chinese Version shall prevail.Important Information
I. The Company’s board of directors directors and officers guarantee that the contents of this
semi-annual report are true accurate and complete without any false records misleading
statements or material omissions and bear joint and several legal liability.II. All of the Company’s directors have attended the board meeting.III. This semi-annual report has not been audited.IV. Wang Aijun the principal of the Company Wang Lihong the accounting principal and Wang
Ailing the principal of the accounting body (the accounting officer) hereby declare that they
guarantee the truthfulness accuracy and completeness of the financial report in this semi - annual
report.V. Profit distribution plan or capital reserve conversion plan for the Reporting Period as approved
by the Board
Not Applicable
VI. Risk Disclosure on Forward-Looking Statements
√ Applicable□ Not applicable
This semi-annual report involves forward-looking descriptions such as future plans and such
statements do not constitute material commitments for investors. Investors are reminded to pay attention
to the risk of investment.VII. Any occupation of funds by the controlling shareholder or other affiliates for non-operating
purposes
No
VIII. Any external guarantee that violates the decision-making procedures
No
IX. Is it the case that more than half of the directors cannot guarantee the truthfulness accuracy
and completeness of the semi-annual report disclosed by the Company
No
X. Warning of Key Risks
For the details of the risks faced by the Company refer to the “Potential Risks” part in “Section 3Discussion and Analysis by the Management” and the “Risks Related to Financial Instruments” part in
“Section 8 Financial Report”.XI. Miscellaneous
□ Applicable √Not applicable
Contents
Section 1 Definitions ............................... 5
Section 2 Company Overview and Key Financial Indic... 9
Section 3 Discussion and Analysis by the Managemen.. 12
Section 4 Corporate Governance Environment and Soc.. 33
Section 5 Significant Matters .......................38
Section 6 Share Changes and Shareholders ............46
Section 7 Information on Securities .................51
Section 8 Financial Report ..........................52
Financial statements signed and sealed by the Company’s principal the accounting principal and the
List of
principal of the accounting body (the accounting officer)
documents for
reference The originals of the Company’s documents and announcements disclosed on the website of the
Shanghai Stock Exchange during the Reporting Period
Section 1 Definitions
In this report the terms below have the following meanings unless the context otherwise requires:
Definitions of common terms
Company the
Company the listed
company Meihua Bio MeiHua Holdings Group Co. Ltd. whose stock name is “Meihua Bio” and stock
means
MeiHua Group or code is 600873.Meihua Company
Meihua
Tongliao Meihua Biotechnology Co. Ltd. a wholly-owned subsidiary of the
Tongliao Meihua means
Company.Tongliao Jianlong Chemical Co. Ltd. a wholly-owned subsidiary of Tongliao
Tongliao Jianlong means
Meihua.Tongliao Base or the production base located in Tongliao of the Inner Mongolia autonomous region
means
Tongliao Company as formed by Tongliao Meihua and Tongliao Jianlong.Xinjiang Meihua Amino Acid Co. Ltd. a wholly-owned subsidiary of the
Xinjiang Meihua means
Company.Wujiaqu Jianlong Chemical Co. Ltd. a wholly owned subsidiary of Xinjiang
Wujiaqu Jianlong means
Meihua.Xinjiang Base or the production base in the Wujiaqu Industry Park located in the Xinjiang Uygur
means
Xinjiang Company autonomous region where Xinjiang Meihua and Wujiaqu Jianlong are located.Jilin Meihua means Jilin Meihua Amino Acid Co. Ltd. a wholly-owned subsidiary of the Company.Jilin Base Baicheng the production base located in Baicheng of Jilin province where Jilin Meihua
means
Base or Jilin Company Amino Acid Co. Ltd. is located.Three production bases the Company’s production bases in Tongliao of Inner Mongolia Wujiaqu of
means
or all production bases Xinjiang and Baicheng of Jilin.Meihua Group International Trading (Hong Kong) Limited a wholly-owned
Hong Kong Meihua means
subsidiary of the Company.Lhasa Meihua Bio-investment Holdings Co. Ltd. a wholly-owned subsidiary of the
Lhasa Meihua means
Company.Zhuhai Hengqin Meihua Biotechnology Co. Ltd. a wholly-owned subsidiary of the
Hengqin Meihua means
Company.HONGKONG PLUM HOLDING LIMITED a wholly-owned subsidiary of
Hong Kong Holdings means
Hengqin Meihua.CAYMAN PLUM HOLDING LIMITED a wholly-owned subsidiary of Hong
Cayman Company means
Kong Holdings.PLUM BIOTECHNOLOGY GROUP PTE.LTD. a wholly-owned subsidiary of
Singapore Company means
Cayman Company.Singapore spv SPV
PLUMINO PRECISION FERMENTATION HOLDINGS PTE.LTD. a wholly-
Plumino Plumino means
owned subsidiary of Singapore Company.Company Plumino
CSRC means the China Securities Regulatory Commission.SSE or the Stock means the Shanghai Stock Exchange.Exchange
CSDC Shanghai means China Securities Depository and Clearing Co. Ltd. Shanghai Branch.the amino acids used as feed supplement for animal nutrition which can enhance
Amino acids for animal the effects of feed improve the utilization of feed and supplement and balance
means
nutrition nutrition. The amino acids for animal nutrition produced by the Company include
lysine threonine and valine.
26-Diaminohexanoic acid the only amino acid with side-chain primary amine in
proteins. It is an amino acid and ketogenic amino acid essential for mammals. The
common L-lysine is one of the 20 amino acids that make up proteins. Depending on
content lysine is classified into L-lysine hydrochloride (commonly known as the
Lysine means 98% lysine) and L-lysine sulfate (commonly known as the 70% lysine). The
addition of lysine to feed improves meat quality increases the ratio of lean and
refines meat texture. It increases the utilization of feed proteins and reduce the
dosage of crude protein. It also reduces piglet diarrhea cuts feeding costs and
increases economic returns.
2-Amino-3-hydroxybutanoic acid an aliphatic α-amino acid that contains an
alcoholic hydroxyl. It is an amino acid and ketogenic amino acid essential for
mammals. The common L-threonine is one of the 20 amino acids that make up
Threonine means
proteins. Threonine is an essential amino acid. Threonine is often added to the feed
for piglets and poultry. It is the second limiting amino acid in pig feed and the third
limiting amino acid in poultry feed.
2-amino-3-methylbutanoic acid a branched-chain non-polar α-amino acid that
contains five carbon atoms. It is an amino acid and glycogenic amino acid essential
Valine means for mammals. The common L-valine is one of the 20 amino acids that make up
proteins. The addition of valine to sow feed can help increase lactation yield. It also
helps improve animals’ immunity and affects endocrine.Corn gluten meal is a byproduct of the manufacture of starch from maize grain in
the food industry or its purification in the brewing industry. It is rich in protein
Starch byproduct
nutrients has a special taste and color and can be used as feed. Corn husk powder
protein powder feed
means (feed fiber) is a byproduct of the manufacturing process of manufacturers engaged
fiber germ
in the deep processing of corn. It is produced from maize grains being soaked put
mycoprotein etc.into starch production washed squeezed and dried. Its main components include
fiber starch and proteins.The food additives (flavor enhancers) produced by the Company. It refers to
Food taste and trait
means artificial or natural substances that are added to food for the purpose of improving
improving products
food quality color smell and taste as well as for preservation and processing.
99% MSG refers to monosodium glutamate. The key composition of MSG is
glutamic acid monosodium salt which is produced from the microbial fermentation
purification and refinement of saccharic or starch raw materials. The finished
MSG means product is white columnar crystal or crystalline powder. As a basic flavoring agent
MSG not only enhances the taste of dishes and stimulates appetite but also
stimulates the secretion of digestive juice thereby helping food digestion and
absorption in human bodies.Disodium 5’- a substance composed of disodium 5’-inosine (IMP) and
means
ribonucleotide disodium 5’-guanosine (GMP) in a 1:1 proportion. It is mostly used in condiments
or condiment blends with MSG to enhance taste.a safe and reliable natural sugar with the superb ability to maintain cell viability and
biomacromolecular activity. It is known as the “sugar of life” in the science
community. With a moderately sweet taste it serves as a unique food ingredient
Trehalose means that prevents food deterioration inhibits nutrient deterioration preserves food
flavors and improves food quality. It is also an important ingredient for cosmetics
that maintain cell viability and preserve moisture. It is generally recognized as safe
(GRAS) by the FDA.L-proline (known as proline for short) is one of the 18 amino acids for the human
body to synthesize proteins. It is an important raw material for amino acid
transfusions as well as a key intermediate for synthesizing first-line
Proline means antihypertensive drugs such as captopril and enalapril. It is widely applied in food
and pharmaceutical industries. The Company produces L-proline through corn
fermentation which is free of all the chemical reagents added in synthesis and is
thus safer.with the scientific name of 2-amino-4-formamide butyric acid is the amide of
glutamic acid. L-glutamine is the coding amino acid in protein synthesis and an
amino acid essential for mammals. In vivo it can be converted from glucose.Glutamine means Glutamine prevents muscle breakdown and promotes muscle growth. It is an
important nutrition supplement for bodybuilders and bodybuilding enthusiasts. It
also improves human immunity and antioxidant capacity. It has superb healthcare
and even medical effects for the gastrointestinal and digestive systems.L-isoleucine is one of the 20 common amino acids that make up proteins. It
Isoleucine means contains two asymmetric carbon atoms and is an amino acid and ketogenic amino
acid essential for mammals.L-leucine is one of the 20 common amino acids that make up proteins. It is an
amino acid and a ketogenic and glycogenic amino acid essential for mammals.Leucine isoleucine and valine are all branched-chain amino acids which help
Leucine means
promote muscle recovery after training. In particular leucine is a very effective
branched-chain amino acid that effectively prevents muscle loss as it is able to
break down faster into glucose.a water-soluble polysaccharide produced from the fermentation of Aureobasidium
pullulans. Pullulan can be processed into a variety of products. With superb film-
forming properties it forms highly stable pullulan film. It also has excellent oxygen
Pullulan means isolation performance. In pharmaceutical and food industries it is widely used in
capsule molding agents thickeners adhesives and food packaging. Pullulan has
been used as food accessories for more than 20 years in Japan and is generally
recognized as safe (GRAS) by the FDA.a monospore polysaccharide from the fermentation of pseudoxanthomonas. It offers
many functions due to its special macromolecular structure and colloidal
characteristics. It is widely used in different fields as emulsifiers stabilizers gel
Xanthan gum means
thickeners impregnating compounds and film molding agents. Xanthan gum is a
microbial polysaccharide in mass production with broad applications around the
world.Bio-organic fertilizers means the fertilizers containing organic substances that provide multiple inorganic and
organic nutrients for crops and fertilize and improve soil.The Manufacturing Execution System (MES) is a key component of smart
manufacturing. Through functions such as real-time monitoring data collection and
analysis and production scheduling an MES optimizes production processes and
enhances both efficiency and quality. The core functions of an MES include
MES means
production planning management material management quality control equipment
maintenance and personnel management. By collecting and providing real-time
data feedback an MES can dynamically adjust production plans optimize resource
allocation reduce waste and enable comprehensive traceability of product quality.Artificial Intelligence (AI) is the science of studying developing and applying
theories methods and applications for simulating extending and enhancing human
intelligence. Its essence lies in using data as fuel computing power as an engine
and algorithms as a brain thereby through machine learning and especially deep
AI means
learning endowing machines with the ability to perceive reason and generate.Currently cognitive intelligence—represented by large language models and
generative AI—is driving a paradigm shift in technology from ‘discrimination’ to
‘creation’ becoming the core force behind industrial transformation.Human Milk Oligosaccharides which are a type of complex oligosaccharide
composed of monosaccharides derivatives sialic acid and other structural units
linked by glycosidic bonds. Over 150 types of HMO structures have been identified
in human milk. As the third most abundant solid component in human breast milk
after lactose and fat HMO plays a crucial physiological role. HMOs are vital for
HMO means
infant growth and development both in the short and long term. They promote the
balance of the intestinal microecology in infants stimulate the growth of beneficial
bacteria inhibit the growth of harmful bacteria prevent the colonization of
pathogenic bacteria regulate the immune system and support cognitive
development in infants.Kirin Holdings Company Limited a company listed on the Tokyo Stock Exchange
with the stock code 2503.T. Founded in 1907 and headquartered in Tokyo Japan it
Kirin Holdings means is a global leader in beverage and food manufacturing with business operations
spanning multiple sectors including beer soft drinks health products and
pharmaceuticals.Kyowa Hakko Bio Co. Ltd. a wholly-owned subsidiary of Kirin Holdings. It is a
Kyowa Hakko Bio global leader in the biotechnology and fermentation industries specializing in the
means
Japan Kyowa development and production of high-quality amino acids and other novel synthetic
biology products for pharmaceutical food and industrial applications.a reaction process in which massive metabolites are produced and accumulated
Fermentation means through the growth and chemical changes of microorganisms (or animal/plant
cells).Bio-fermentation refers to the process by which organic raw materials are converted
into target products through metabolic activity carried out by microorganisms or
enzymes under suitable conditions. Essentially it utilises the metabolic mechanisms
Bio-fermentation means
and biocatalytic action of living organisms to achieve the efficient conversion and
synthesis of substances encompassing industrial applications ranging from
traditional food brewing to modern pharmaceuticals and new materials. As a core
technology of synthetic biology and green manufacturing bio-fermentation is
driving the transition of production models towards low-carbon and sustainable
practices becoming a vital pillar of the bioeconomy era.a process that uses microorganisms as cell factories to produce specific functional
components. In general terms precision fermentation is a process of genetic
Precision fermentation means reprogramming. It is synthetic biology. Scientists change the genes of selected
microorganisms based on specific designs and their genes are programmed to
produce specific fermentation products.Section 2 Company Overview and Key Financial Indicators
I. Company Information
Chinese name MeiHua Holdings Group Co. Ltd.Short Chinese name 梅花生物、梅花集团
English name MeiHua Holdings Group Co. Ltd.Abbreviation MEIHUABIO MeiHua Group
Legal representative Wang Aijun
II. Contact Person and Contact Information
Board Secretary
Name Liu Xianfang
66 Huaxiang Road Langfang Economic and Technological
Address
Development Zone Hebei Province
Tel 0316-2359652
Fax 0316-2359670
Email mhzqb@meihuagrp.com
III. Summary of Changes in Basic Information
Unit 5 Building 11 Yangguang Xincheng 158 Jinzhu West Road
Registered Address
Lhasa Xizang Autonomous Region
In January 2018 the company’s registered address was changed
from “No. 189 Jinzhu West Road Lhasa” to “Building 11 Unit 5Changes in the registered addressSunshine New City No. 158 Jinzhu West Road Lhasa.” For details
please refer to the company’s Announcement No. 2018-002.
66 Huaxiang Road Langfang Economic and Technological
Office address
Development Zone Hebei Province
Postal code of the office address 065001
Website https://www.meihua.group
Email mhzqb@meihuagrp.com
Index for Changes During the Reporting Period Not applicable
IV. Summary of Changes in Information Disclosure and Filing Locations
Shanghai Securities News (www.cnstock.com) China Securities
Designated newspapers for information disclosure Journal (www.cs.com.cn) Securities Times (www.stcn.com)
Securities Daily (www.zqrb.cn)
Website for publication of the semi-annual report Shanghai Stock Exchange website (www.sse.com.cn)
Filing locations for the company’s semi-annual
Company Securities Department; Shanghai Stock Exchange
report
Index for changes during the reporting period Not Applicable
V. Company’s Stock Information
Stock Exchange for the
Stock name before
Stock type listing of the Stock name Stock code
change
Company’s stock
Shanghai Stock
A-share Meihua Bio 600873 MeiHua Group
Exchange
VI. Other Relevant Information
□Applicable √Not applicable
VII. Key Accounting Data and Financial Indicators of the Company
(I). Key Accounting Data
Unit: yuan Currency: RMB
Change
Current Reporting Same Period Last Compared to
Key accounting data
Period (Jan–Jun) Year Same Period Last
Year (%)
Revenue 12235095339.54 12280450603.53 -0.37
Total Profit 830402774.44 2089170850.25 -60.25
Net profit attributable to the shareholders of the
661862706.23 1767950116.89 -62.56
listed company
Net profit attributable to the shareholders of the
listed company after deducting non-recurring profit 451313771.78 1628363104.40 -72.28
or loss
Net cash flows from operating activities 389140084.02 2312791220.63 -83.17
Change
End of Current End of Previous Compared to End
Reporting Period Year of Previous Year
(%)
Net assets attributable to the shareholders of the
15670914430.13 16347570415.56 -4.14
listed company
Total assets 26785425436.30 25915976725.38 3.35
(II). Key Financial Indicators
Current Change Compared
Same Period
Key financial indicators Reporting Period to Same Period Last
Last Year
(Jan–Jun) Year (%)
Basic earnings per share (yuan/share) 0.24 0.62 -61.29
Diluted earnings per share (yuan/share) 0.24 0.62 -61.29
Basic earnings per share after deducting non-recurring
0.16 0.57 -71.93
profit or loss (yuan/share)
Decrease by 7.78
Weighted average return on equity (%) 4.03 11.81
percentage points
Weighted average return on equity after deducting non- Decrease by 8.13
2.75 10.88
recurring profit or loss (%) percentage points
Notes to the Company’s key accounting data and financial indicators
□ Applicable √Not applicable
VIII. Differences in Accounting Data under Domestic and Foreign Accounting Standards
□ Applicable √Not applicable
IX. Non-recurring Items and Amounts
√ Applicable□ Not applicable
Unit: yuan Currency: RMB
Notes (if
Non-recurring items Amount
applicable)
Gains or losses from the disposal of non-current assets including the write-offs of the
41973047.10
accrued provisions for asset impairment
Government grants recognized in the profit or loss excluding government grants that
are closely related to the Company’s normal operations conform with national policies
132954936.58
are enjoyed in accordance with established standards and have continuous impact on
the Company’s profit or loss
Gains or losses from fair value changes arising from the financial assets and financial
liabilities held by non-financial enterprises and gains or losses from the disposal of
36751682.38
financial assets and financial liabilities except for the effective hedging associated with
the Company’s normal operations
Fund possession fees collected from non-financial enterprises that are recognized in the
profit or loss
Gains or losses from the entrusted investment or management of assets
Gains or losses from external entrusted loans
Losses on assets due to force majeure factors such as natural disasters
Reversal of provisions for the impairment of accounts receivable for which the
impairment test is conducted separately
Gains from the investment costs of the Company for the acquisition of subsidiaries
associates and joint ventures being less than the fair value of the investees’ identifiable
net assets due to the Company at the acquisition of investment
Net profit or loss of subsidiaries formed through business combinations under common
control for the period from the beginning of the Reporting Period to the combination
date
Gains or losses from the exchange of non-monetary assets
Gains or losses from debt restructuring
Non-recurring expenses of the Company arising from the discontinuation of relevant
operating activities such as expenses for staff resettlement
Once-off effect of adjustments to tax and accounting laws and regulations on the profit
Notes (if
Non-recurring items Amount
applicable)
or loss
Share payment expenses recognized once off due to the cancellation or change of the
share incentive plan
For share payment in cash gains or losses from changes in the fair value of staff
remuneration payable after the vesting date
Gains or losses from changes in the fair value of investment property that is
subsequently measured in the fair value model
Gains from transactions with obviously unfair transaction prices
Gains or losses from contingencies irrelevant to the Company’s normal operations
Trusteeship income from trusteeship business
Other non-operating income and expenditure than the above 23872702.76
Other profit or loss items that fall within the definition of the non-recurring profit or
loss
Less: effect of income tax 25003434.37
effect of minority interest (after tax)
Total 210548934.45
If the Company defines any items not listed in the Explanatory Announcement on Information
Disclosure for Companies Offering Their Securities to the Public No.1 – Non-recurring Gains or Losses
as non-recurring items which involve significant amounts or defines any non-recurring items listed in the
Explanatory Announcement on Information Disclosure for Companies Offering Their Securities to the
Public No.1 – Non-recurring Gains or Losses as recurring items the Company should provide the
reasons.□ Applicable √Not applicable
X. Net Profit Adjusted for Share-Based Payments (Applicable to Companies with Equity Incentive
or Employee Stock Ownership Plans)
□ Applicable √Not applicable
XI. Miscellaneous
□ Applicable √Not applicable
Section 3 Discussion and Analysis by the Management
I. Industry and Main Business Overview During the Reporting Period
(I) Industry Overview
Based on the Guiding Catalogue of Key Products and Services for Strategic Emerging Industries
(2016 Edition) issued by the National Development and Reform Commission (NDRC) Meihua Bio’s
main products fall within the “bio-manufacturing industry of the biological industry.” Therefore the
Company operates in the bio-manufacturing industry.Biomanufacturing is an advanced production method centered on industrial biotechnology. Based
on cutting-edge biological technologies such as genetic engineering and synthetic biology it uses the
physiological and metabolic functions or catalytic activities of microbial strains cells and enzymes to
produce target products on a large scale through industrial fermentation processes. It covers the full
spectrum of categories including food/additives biopharmaceuticals bio-based materials bulk
chemicals and energy.Synthetic biology is a disruptive technology that integrates multidisciplinary knowledge and
technologies such as biology engineering and informatics. Following engineering principles it designs
modifies reconstructs or even artificially synthesizes organisms to construct artificial biological
systems with specific functions enabling innovative applications in fields such as biomedicine and
biomanufacturing.
1. Industry Scale
According to data released by the Ministry of Industry and Information Technology at the 2025
Biomanufacturing Conference China’s biomanufacturing industry reached a total scale of RMB 1.1
trillion in 2025. From the perspective of long-term global market potential McKinsey estimates that
from 2030 to 2040 biomanufacturing could generate an annual economic impact of USD 1.7–3.6 trillion
and biomanufactured products could cover approximately 70% of chemically manufactured products.Boston Consulting Group (BCG) predicts that by the end of the 21st century biomanufacturing is
expected to be applied in one-third of global manufacturing creating USD 30 trillion in economic value.
2. Industry Outlook
Biomanufacturing is entering a development window of comprehensive acceleration during the
15th Five-Year Plan period. During this period driven by multiple factors including national strategic
guidance technological breakthroughs as a key enabler and market demand the industry enjoys broad
development prospects:
(1) Policy-driven: top-level strategies lead industrial upgrading
Biomanufacturing has risen to a core position in national strategy. China’s first five-year plan for
the bioeconomy has already identified biomanufacturing as a key development area and the country will
subsequently formulate a development plan for biomanufacturing. At the same time supporting policies
at the local level have been introduced successively forming a coordinated support system between
central and local governments. Overseas both the United States and Europe have issued national-level
bioeconomy strategies and the global policy environment is generally improving.
(2) Technology-driven: deep integration of AI and synthetic biology
Core technologies such as synthetic biology and gene editing continue to achieve breakthroughs.Combined with AI empowerment across the entire chain they are jointly catalyzing a leap in the
industry’s capability level. AI is driving the industry’s transformation from traditional empirical trial-
and-error to precise and rational design significantly shortening R&D cycles and reducing
industrialization costs. At the same time the deployment of new routes such as non-food feedstocks and
C1 feedstocks is accelerating supporting the green and low-carbon transformation of the entire
industrial chain.
(3) Demand-driven: diversified markets open up growth space
Downstream rigid demand markets such as food processing feed additives and healthcare continue
to expand while emerging tracks such as bio-based materials daily chemicals and cosmetics and green
energy are growing significantly. As biomanufacturing substitution accelerates a near-trillion-yuan
substitution market is gradually being unleashed. The industry’s focus is shifting from substituting bulk
chemicals to competing globally in high-value-added products driving the domestic industry to upgrade
from a “supplier of bulk fermentation products” to a “core competitor in high-value-added biologicalproducts.”
(II) Core Business Overview
Meihua Bio is a globally leading biomanufacturing enterprise that leverages synthetic biology
technologies to achieve large-scale production of amino acids. Through long-term industry cultivation
and strategic planning the Company has built a well-balanced and diversified product matrix with
business operations spanning multiple core segments including animal nutrition amino acids food flavor
enhancers pharmaceutical ingredients and colloidal polysaccharides.During the reporting period the Company continued to advance the in-depth integration of cross-
border acquired assets completing the alignment and integration of personnel business intellectual
property and production bases at home and abroad. The completion of this acquisition expanded the
Company’s high-end pharmaceutical amino acid product matrix helped improve its high-value-added
business layout and enhanced its comprehensive operational capabilities and risk resilience in the global
market.During the reporting period the Company’s principal products included:
* Animal Nutrition Amino Acids: lysine threonine tryptophan feed-grade valine starch by-
product feed fiber corn germ microbial protein MSG by-products etc.* Food Taste-Enhancement Products: glutamic acid monosodium glutamate (MSG) disodium
inosinate disodium guanylate food-grade xanthan gum trehalose etc.* Human Nutrition and Pharmaceutical Amino Acids and Related Products: glutamine
proline leucine isoleucine pharmaceutical-grade valine inosine guanosine adenosine pullulan
polysaccharide vitamin B2 histidine arginine etc.* Other Products: industrial-grade xanthan gum and bio-organic fertilizers.The Company adopts an integrated business model encompassing research and development
production and sales. During the reporting period there were no significant changes in the Company’s
business model.(III) Industry Overview of Major Products in the First Half of the Year
1. Key Raw Materials: Corn
Corn is the core raw material for the Company accounting for more than 50% of production costs.Fluctuations in corn prices have a direct impact on production costs. In the first half of 2026 China’s
corn market exhibited a pattern of “rising first and then falling with high-level volatility.” The national
average corn price in the first half was RMB 2355 per ton up 2.44% quarter-on-quarter and 5.75%
year-on-year. The average price in April rose to a near two-year high while prices pulled back slightly
from May to June due to the auction of designated rice and the impact of sprouted wheat.During the reporting period leveraging production bases in the major producing areas of Tongliao
Xinjiang and Jilin the Company ensured supply through diversified procurement models such as direct
purchases from farmers grain auctions and entrusted procurement and storage. By grasping the rhythm
of market cycles and building inventory when new grain entered the market at low price levels the
Company effectively mitigated the pressure from rising raw material prices to a certain extent.
2. Major Product Market Conditions
According to the Boyar report in the first half of 2026 domestic supply of feed amino acids
continued to increase while downstream hog farming suffered deep losses and demand remained weak.As a result prices of amino acid products declined year-on-year and performance came under pressure.Overseas anti-dumping measures tariff barriers and rising shipping costs added to pressure on export
sales.
(1) Lysine
In terms of prices lysine prices rose first and then fell in the first half of the year. The average price
of 98.5% lysine was RMB 7.20/kg up 3.45% quarter-on-quarter but down 20.97% year-on-year. The
average price of 70% lysine was RMB 4.61/kg down 2.54% quarter-on-quarter and 14.47% year-on-
year. Industry profit margins were severely compressed.In terms of exports customs data showed that cumulative exports of lysine esters and salts reached
569600 tonnes in the first half up 9.22% year-on-year. Exports to Europe and South America increased
significantly year-on-year while exports to North America declined sharply.In terms of overseas trade barriers at the end of April the EU relaunched an anti-absorption
investigation into Chinese lysine. In June Brazil imposed five-year anti-dumping duties of 26.0%–
132.6% on Chinese lysine. Export costs to Brazil are expected to rise significantly limiting future export
growth. In July the United States announced final determinations in anti-dumping and countervailing
duty investigations on Chinese lysine keeping overseas exports under sustained pressure.
(2) Threonine
In the first half domestic threonine production operated stably and market prices rose first and
then fell supported by exports. The average price of threonine was RMB 8.47/kg down 1.74% quarter-
on-quarter and 18.95% year-on-year narrowing industry profitability year-on-year.In terms of exports cumulative exports of other amino alcohols and phenols (mainly containing
threonine) reached 379700 tonnes in the first half up 6.95% year-on-year. Exports to Europe Asia and
South America increased while exports to North America declined.
(3) Valine
In the first half domestic valine supply was excessive and the decline in soybean meal prices
suppressed part of the substitution demand causing valine prices to fluctuate downward. During the
reporting period the average valine price was RMB 13.59/kg up 3.74% quarter-on-quarter but down
5.10% year-on-year. By the end of June transaction prices fell below RMB 10.5/kg hitting a new stage
low.In terms of overseas trade in February the EU imposed anti-dumping duties of 31.3%–53.8% on
Chinese valine restricting export volume expansion. The domestic supply-demand imbalance further
compressed the industry’s profit margins.
(4) MSG
In the first half MSG prices rose rapidly and then pulled back slightly. The average price of large-
pack MSG was RMB 6921.1 per tonne down 1.3% year-on-year with the price bottom significantly
higher than in the second half of 2025. During the reporting period China’s cumulative MSG exports
reached 567000 tonnes up 9.0% year-on-year.Explanation of Significant Non-Core Business Additions During the Reporting Period
□ Applicable √Not applicable
II. Discussion and Analysis of Business Performance
In the first half of 2026 the Company achieved operating revenue of RMB 12.235 billion
representing a decrease of 0.37% compared with the same period of the previous year. During the
reporting period the release of lysine production capacity at the Company’s subsidiary Jilin Meihua led
to an increase in sales volume of lysine and by-products. However affected by multiple factors such as
increased industry supply and weak end-user demand prices of the Company’s main products including
lysine threonine and MSG declined year-on-year resulting in a decrease in revenue from principal
operations. During the reporting period affected by the decline in prices of major products the
Company’s overall operating profit declined year-on-year. Net profit attributable to shareholders of the
listed company in the first half was RMB 662 million down 62.56% compared with the same period of
the previous year.During the reporting period facing the complex situation of loose industry supply and pressure onproduct prices the Company focused on the main themes of “globalization technology-drivendevelopment and digitalization” and made significant progress in four major areas: cross-border M&A
integration R&D innovation intelligent manufacturing and coordination across production supply and
marketing. The Plumino platform achieved profitability ahead of schedule. The Company’s competitive
advantages in synthetic biology continued to be consolidated its digital and intelligent transformation
advanced in depth and its global competitive advantages were further enhanced.(I) Cross-Border M&A Integration Delivered Significant Results with Plumino Achieving
Profitability
In July 2025 the Company completed the delivery of all assets of the amino acid business of
Kyowa Hakko in Japan and all acquired businesses were consolidated under the wholly owned platform
Plumino for operation. As the Company entered 2026 business integration advanced comprehensively
from the asset stabilization stage to deep integration featuring system integration operational efficiency
improvement and structural optimization. After six months of dedicated efforts the former Kyowa
Hakko business segment successfully turned losses into profits.
1. Systematic Integration Fully Implemented
Market-oriented operating mechanism: After the handover Plumino fully implemented a
market-oriented operating mechanism establishing a management model under which each production
entity operates independently and is responsible for its own profits and losses. All internal product
transfers are conducted at fair market pricing. Through institutional design the internal impetus of each
operating unit has been fully stimulated driving steady improvement in capacity utilization efficiency.To focus on the core business and optimize global resource allocation in April 2026 the Company
sold 100% equity interest in Plumino’s Thailand plant to Novonesis a global biotechnology leader
completing the overall divestiture of non-core businesses and assets such as HMO (human milk
oligosaccharides). After the transaction Plumino’s asset structure was further optimized its business
became more focused and the efficiency of capital and resource allocation improved significantly. The
transaction also laid a solid foundation for broader exchanges and cooperation between the two leading
biotechnology companies.Systematization of management standards: In May 2026 Plumino’s overseas bases officially
launched the SAP system. The Company replicated and exported its internal standardized management
processes achieving unified data standards and coordinated internal control approval standards across
Plumino’s bases in production sales finance and quality. This launch represents not only the
implementation of an information system but also a firm extension of the Company’s lean operation
management system across the entire business chain laying a solid data foundation for further in-depth
business synergy.Supply chain autonomy: Leveraging the Company’s upstream raw material supply chain
advantages during the reporting period Plumino advanced the independent substitution of
pharmaceutical-grade crude raw materials at its Shanghai plant in phases gradually reducing
dependence on external high-priced single-source raw materials. At the same time mature domestic
fermentation and purification processes were exported to overseas bases promoting a two-way flow of
technical capabilities. In the first half of the year unit production costs of core products such as
glutamine and histidine declined significantly and the results of supply chain autonomy building
gradually became evident.Systematization of quality compliance: Quality management was upgraded from end-product
inspection to a full-chain “holistic quality” control model covering incoming raw materials the entire
production process and finished product release. The Company strictly benchmarks against international
GMP standards for pharmaceutical active pharmaceutical ingredients (APIs) improves the product
quality traceability system and effectively mitigates the risk of customer trust erosion caused by API
changes. This ensures that quality control standards do not decline during business integration and that
the foundation of customer cooperation remains stable.
2.Plumino's Operations Showed Steady Progress and Achieved Profitability Ahead of
Schedule
Following systematic integration and excluding the impact of asset disposal Plumino achieved
profitability at the operating level in the first half of 2026 meeting the target of turning losses into
profits ahead of schedule for the year. The business has officially entered a stage of stable profitability.Continuous enrichment of the product matrix: In terms of pharmaceutical-grade amino acids
multiple small-volume products such as histidine proline valine and isoleucine steadily expanded
customer channels at home and abroad while registration and filing in multiple countries continued to
be advanced. In terms of food-grade amino acids products such as arginine and citrulline continued to
expand market share and efforts were made to build differentiated qualifications such as non-GMO
certification. At the same time the Company actively explored emerging application areas such as
cosmetic grade continuously broadening its growth boundaries.Increasingly well-developed global layout: Currently Plumino has established a dual-core
structure featuring a high-end refining base in Shanghai and a local production and sales base in North
America. The Shanghai base focuses on the refining and R&D/testing of high-end pharmaceutical APIs
while the North America base leverages local manufacturing advantages to deepen its presence in the
North American sports nutrition and pharmaceutical-grade amino acid markets. On this basis the
Company is actively expanding customers in Europe Asia and other regions with the coverage and
penetration of the global production and sales network continuing to improve.Deepening technological integration: Plumino has fully inherited the pharmaceutical-grade amino
acid fermentation and refining processes and the rigorous quality control system cultivated by Kyowa
Hakko in Japan over many years and possesses quality management capabilities that meet international
high standards such as FDA and CEP. Leveraging this acquisition the Company rapidly established a
global patent protection network covering core products and key processes. Combined with the
Company's own technological accumulation in strain improvement and synthetic biology this has truly
achieved two-way integration and iterative upgrading.
3. Subsequent Plans
In the second half of the year the Company will continue to deepen the integration of various
business lines accelerate the coordination and connectivity of global processes supply chains and sales
channels consolidate the existing achievements in digitalization cost reduction and efficiency
improvement and quality system upgrading and further release synergies and integration dividends. At
the same time with a view to long-term global capacity deployment the Company is conducting
feasibility studies for plant construction and verification of production factor safeguards in other key
overseas regions making preliminary preparations for subsequent overseas greenfield investments.(II)Technological Innovation Accelerated Comprehensively with the Synthetic Biology Platform's
Advantages Becoming Prominent
In the first half of 2026 the Company further consolidated its internal R&D resources and centered
on building its synthetic biology platform continued to deepen AI-powered intelligent R&D intellectual
property deployment iteration of core product technologies and industrialization continuously
reinforcing its technology leadership across the entire industrial chain.Continuous optimization of the R&D system: During the reporting period the Company initiated
the organizational development of a central research institute coordinating the construction of the
Company-wide R&D system and resource integration and breaking down R&D resource barriers
through top-level design. Meanwhile the Company iterated and improved its R&D management system
optimizing key control processes such as project approval review and milestone acceptance reducing
ineffective R&D investment from the process side and enhancing the efficiency of technology
commercialization. Intellectual property work shifted from "quantity accumulation" to "quality
improvement." As of June 30 2026 the Company had filed a cumulative total of 382 invention patent
applications (45 new applications in the first half) and obtained 140 authorized invention patents (25
new authorizations in the first half) covering core product technology areas such as strains and
production processes.AI empowerment drives a leap in R&D efficiency: Building on the optimization of the R&D
system the introduction of AI technology is fundamentally changing the R&D model. During the
reporting period Phase I of the self-developed bioinformatics intelligent analysis system based on an AI
Agent architecture entered trial operation. The system is deeply integrated with the Feishu platform
allowing researchers to invoke gene analysis in real time through natural language commands
significantly lowering the barrier to tool usage. Actual test data showed that compared with traditional
methods the time required for a single round of gene analysis was shortened by 85% and the cycle for
directed evolution and iterative validation of strains was shortened by approximately 10% significantly
improving R&D efficiency.Significant results in R&D-production integration: During the reporting period new strains and
new processes for core amino acid categories were deployed across various production bases and a new-
generation feed protein product completed pilot validation and is now ready for industrialization. The
Tongliao pilot platform was completed and put into operation providing multi-category process scale-up
validation capabilities and serving as a bridge for the rapid commercialization of R&D achievements.Key strain projects rapidly completed the entire process from laboratory to large-scale production
setting a new record for the speed of technology commercialization in the Company's fermentation
categories.Steady progress in global layout: Strain technologies for multiple categories including arginine
histidine and tryptophan acquired through the cross-border M&A have been assimilated and absorbed
with strain iteration and process optimization progressing as planned. Preparations for regulatory
compliance and market access in the EU and North American markets are also advancing
simultaneously. In terms of talent development the Company recruited a number of high-end talents in
the field of synthetic biology in the first half strengthening capabilities in key technology areas. The
global layout of talent technology and compliance is building a solid foundation for the long-term
development of the Company's synthetic biology platform.(III) Digital-Intelligent Integration Advanced in Depth with Intelligent Manufacturing Level
Continuously Improved
The Company aims to build "data-driven intelligent manufacturing" and continues to promote the
full deployment of MES across its three major production bases establishing a digital management
network covering the entire process from incoming raw materials to finished product warehousing. In
the first half of 2026 on the basis of the normalized operation of MES the Company further deepened
functional applications integrated AI technologies to explore intelligent production scenarios and
continued to drive the transformation of production management from "experience-driven" to "data-
driven."
Business-finance integration continued to deepen: In the first half all three major production
bases fully realized online MES-based production cost accounting unified the Company-wide cost
accounting rules and significantly improved the accuracy and efficiency of cost data. This change
brought not only efficiency gains but also a shift in the focus of financial work—from basic data
accounting to cost drill-down analysis and business optimization support. Business-finance integration
continued to deepen and financial data became deeply linked with the entire production and operation
chain.AI application implementation delivered cost reductions: During the reporting period multiple
AI application scenarios were successively implemented on the business side releasing cost-reduction
value. The liquid discharge management AI model was launched enabling automatic generation of
discharge plans and early prediction of abnormal fluctuations. The power cost AI model combined with
operating mechanism innovation drove the transformation of power management from passive control
to proactive operation. During the six-month trial run the three major bases cumulatively saved more
than 28 million kWh of electricity and over RMB 10 million in costs exceeding the cost-reduction target
ahead of expectations.Continued cultivation of a company-wide digital-intelligent innovation atmosphere: In the first
half the Company successfully held the first Feishu AI Pioneer Contest covering the corporate
headquarters and the three major production bases. The contest identified a number of implementable
and reusable AI efficiency improvement solutions promoting the penetration of AI applications into all
production and management business scenarios. In the second half of the year the Company will
continue to promote MES function upgrades expand the scope of AI applications and build a company-
level visualized production scheduling and command screen empowering production and operations
through digital and intelligent technologies and driving continuous improvement in overall management
efficiency.(IV) Deeper Coordination Across Production Supply and Marketing with Global Competitive
Advantages Continuously Consolidated
In the first half of 2026 faced with the complex situation of continued industry supply expansion
and pressure on product prices the Company strengthened coordination mechanisms across the entire
chain of production procurement and sales. On the production side it stabilized capacity and optimized
layout; on the procurement side it controlled costs and ensured supply; and on the sales side it
expanded markets and increased market share. Operational efficiency across the entire chain continued
to improve.Capacity scale expanded and product structure optimized: In the first half the Jilin 600000-
tonne lysine project reached full production and achieved its designed benefits bringing the Company's
total lysine capacity to 1.6 million tonnes and further consolidating its strategic market leadership in the
lysine segment. Meanwhile construction of the Tongliao 300000-tonne threonine project and the
Xinjiang 90000-tonne valine project progressed steadily and both are expected to come on stream
successively in the second half of the year.Among these the Xinjiang valine project adopts an independently developed anaerobic new
process with product yield increased by 16 percentage points. After the project comes on stream the
Company's total valine capacity will reach approximately 100000 tonnes. The application of the new
process not only expands capacity scale but also significantly improves production and operational
efficiency fully demonstrating the Company's core competitive advantage driven by the twin engines of
"scale + technology."
In addition during the reporting period the Company's Tongliao base launched a small-volume
amino acid upgrading and new product expansion project with a total investment of RMB 300–500
million focusing on production lines for high-value-added products such as pharmaceutical-grade and
food-grade products. The project is expected to come on stream in batches from the fourth quarter of
2026 to the first half of 2027 which will further enrich the Company's product matrix continuously
optimize the product structure and increase the proportion of high-value-added products.Precise procurement policies and enhanced supply resilience: Centering on the strategy of "in-
depth market research optimized structure and digital-intelligent empowerment" in corn procurement
the Company relied on its three major bases to hedge price fluctuations through methods such as
building inventory at low price levels and entrusted storage cooperation. In coal procurement it took
long-term agreement supply guarantees as the foundation and optimized customer structure and blending
plans. The SRM procurement management system operated stably realizing the online and standardized
management of the entire procurement process. The Company is also exploring the independent
development of AI models to advance the informatization of the corn market and enhance the scientific
nature of procurement decisions through digital means. In terms of supplier management the Company
developed 44 new suppliers in the first half deepened strategic cooperation with core suppliers and
jointly mitigated risks from market fluctuations.Deepened expansion in global markets with leadership position further consolidated: In the
first half the Company adhered to the operating strategy of selling all output continued to deepen its
presence in global markets and consolidated its industry leadership position. During the reporting period
the Company continued to deepen long-term strategic partnerships with customers proactively
empowered downstream customers to expand diversified application channels and end-use scenarios
strengthened formulation application technical service capabilities collaborated with customers on new
product development and application innovation and jointly tapped incremental space in end-user
markets. Faced with a complex and volatile international trade environment the Company actively
responded to various trade frictions obtained the lowest duty rate in the EU anti-dumping response and
achieved significant year-on-year and quarter-on-quarter growth in sales volume to the EU region during
the reporting period. Regarding the Brazil anti-dumping investigation on the basis of steadily advancing
response efforts the Company orderly adjusted export supply layout advanced regional market shifts
vigorously explored emerging overseas markets such as Latin America continuously optimized and
improved its global sales network and enhanced its risk resilience and overall penetration in global
markets.In the second half of the year the Company will deepen the coordination mechanism across
production supply and marketing accelerate the commissioning and full-efficiency operation of key
projects optimize supply chain flexibility deepen global customer and market development and
continue to consolidate advantages across the entire chain of cost scale and market thereby enhancing
its ability to operate through cycles.Significant changes in the company’s operations during the reporting period as well as events that
occurred during the period that have had or are expected to have a material impact on the
company’s operations in the future
□ Applicable √Not applicable
III. Analysis of Core Competitiveness during the Reporting Period
√ Applicable□ Not applicable
During the reporting period there were no significant changes in the Company's core
competitiveness.(I) R&D-Production Synergy Breaking Boundaries
The Company has always placed technological innovation at the top of its development strategy
and maintains stable and sufficient R&D investment over the long term. The Company's R&D team
recruits numerous professional technical talents from universities at home and abroad and has
independently built specialized experimental platforms for strain selection and genetic modification
capable of performing targeted strain improvement and fermentation process optimization for various
target products. Leveraging the massive amount of experimental data accumulated over the years and
mature technology reserves the Company has also built an AI-powered intelligent bioinformatics
analysis system coordinates patent deployment on a global scale and continuously accelerates the
iteration of core technologies.In terms of R&D management the Company's central research institute coordinates R&D resources
at home and abroad in a unified manner builds supporting pilot platforms covering multiple product
categories and connects the complete transformation chain from basic laboratory R&D pilot validation
engineering scale-up to industrial mass production. On one hand it can rapidly translate strain
improvement results into large-scale production; on the other hand it efficiently undertakes the
industrialization of cutting-edge biotechnology continuously expanding the development space and
boundaries of the bio-fermentation industry.(II) Efficient Operations Cost Leadership
The Company has established a complete integrated operation management system with improving
organizational efficiency as the core and fully implements daily clearing and settlement and full-process
closed-loop management. By optimizing business processes enabling digital collaboration across the
entire industrial chain and implementing closed-loop performance assessment mechanisms the
Company achieves efficient linkage and rapid coordination among upstream and downstream production
processes with overall operational efficiency continuously improving.The Company's major production bases are located in major producing areas of core raw materials
such as corn naturally enjoying geographical cost advantages in raw materials. Each base has developed
a circular industrial chain integrating corn deep processing self-sufficiency in thermal power and steam
wastewater recycling and treatment and resource utilization of organic fertilizer. Relying on integrated
plant planning to control fixed asset investment systematically reducing production energy consumption
and flexibly coordinating capacity allocation for multiple product categories combined with industry-
leading economies of scale and full industrial chain synergy advantages the Company maintains
outstanding comprehensive cost competitiveness in the industry over the long term.(III) Diversified Product Portfolio Navigating Through Cycles
The Company focuses on the core business of bio-fermented amino acids and has formed a
complete product matrix covering feed-grade bulk amino acids food additives and high-end
pharmaceutical-grade amino acids. Demand varies across different downstream application markets
which can naturally hedge performance and significantly mitigate the impact of supply-demand and
price fluctuations of a single product on the Company's overall operations.With globally leading production capacity and integrated full industrial chain operational
capabilities the Company has a solid foundation for risk resistance in overall operations. As multiple
high-value-added pharmaceutical amino acid production lines are subsequently brought on stream the
Company's product structure will continue to be optimized and its ability to withstand industry cyclical
fluctuations will be further enhanced.(IV)From "Product Export" to "Capability Export": Building New Advantages in Global
Competition
The Company possesses mature global operational capabilities has established a sales and
localized service network covering major markets worldwide and has developed a standardized and
rapidly replicable production and operation management model. Through years of cross-border business
operations it has accumulated extensive experience in responding to international trade frictions and
managing overseas market risks.Relying on mature overseas industrial investment and M&A integration capabilities as well as a
global intellectual property protection system covering the entire chain of strains processes and
products the Company's internationalization strategy is upgrading from simply exporting products to
exporting industrial capabilities. In the future the Company will further optimize its global capacity
layout by investing in and constructing overseas production bases and implementing localized operations
fully leveraging differentiated resources in various regions to tap growth potential and continuously
consolidating and expanding its international competitive barriers.(V) Cultural Cohesion Building a Talent Highland
The Company adheres to the corporate culture of "all-employee management and value creation
and sharing" has established a performance incentive mechanism that balances process management and
business results and has continuously launched multiple employee stock ownership plans deeply
binding employees' personal interests to the Company's long-term development and fully stimulating the
internal vitality of the organization.In terms of talent cultivation the Company insists on both external recruitment of high-end talents
and internal talent pipeline development. Relying on systematic training programs such as the "Zhiyuan
Program" it builds multiple professional talent teams in technology R&D production management and
international operations in a tiered and categorized manner continuously reserving high-quality human
resources for the Company's global layout and industrial transformation and upgrading thereby laying a
solid foundation for sustainable development.IV. Major Business Performance during the Reporting Period
(I). Analysis of Main Business
1. Analysis of Changes in Financial Statement Accounts
Unit: yuan Currency: RMB
Amount for the
Amount for the current
Item corresponding period in Change (%)
period
the previous year
Revenue 12235095339.54 12280450603.53 -0.37
Operating costs 10653093825.19 9433353240.09 12.93
Selling expenses 176534959.81 167760792.02 5.23
General and administrative expenses 424785142.26 469433561.57 -9.51
Financial expenses 53599826.70 -20660319.63 359.43
R&D expenses 187548443.45 199958697.93 -6.21
Net cash flows from operating
389140084.02 2312791220.63 -83.17
activities
Net cash flows from investing activities -1775149329.05 -2943297595.88 39.69
Net cash flows from financing
22626595.48 -810148442.73 102.79
activities
Reasons for Change in Revenue: During the Reporting Period the Company's revenue totaled RMB
12.235 billion down 0.37% year-on-year. Main reasons: the release of production capacity at the new
lysine production line of the Company's subsidiary Jilin Meihua led to an increase in sales volume of
lysine and by-products; however affected by multiple factors such as increased industry supply and
weak end-user demand prices of the Company's main products including threonine lysine and MSG
declined resulting in a decrease in revenue from principal operations.Reasons for Change in Operating Costs: During the Reporting Period the Company's operating
costs totaled RMB 10.653 billion up 12.93% year-on-year. Main reasons: (1) the increase in sales
volume of lysine and by-products during the period drove up costs; (2) raw material prices rose
compared with the same period last year and the Company offset the increase in raw material prices
through process optimization and upgrading as well as refined cost control.Reasons for Change in Selling Expenses: During the Reporting Period the Company's selling
expenses increased by 5.23% year-on-year mainly due to an increase in expenses of overseas companies
compared with the same period last year.Reasons for Change in General and administrative Expenses: During the Reporting Period the
Company's General and administrative expenses decreased by 9.51% year-on-year mainly due to a
decrease in employee expenses during the period.Reasons for Change in Financial Expenses: During the Reporting Period the Company's financial
expenses increased by 359.43% year-on-year mainly because affected by fluctuations in the foreign
exchange market exchange gains in the same period last year turned into exchange losses in the current
period thereby increasing financial expenses.Reasons for Change in R&D Expenses: During the Reporting Period the Company's R&D
expenses decreased by 6.21% year-on-year mainly due to a decrease in R&D investment during the
period.Reasons for Change in Net Cash Flows from Operating Activities: During the Reporting Period the
Company's net cash flows from operating activities decreased by 83.17% year-on-year mainly due to an
increase in the scale of raw material procurement during the period.Reasons for Change in Net Cash Flows from Investing Activities: During the Reporting Period the
Company's net cash flows from investing activities increased by 39.69% year-on-year mainly because
the same period last year included payment for overseas acquisitions while the current period included
gains from the disposal of a subsidiary.Reasons for Change in Net Cash Flows from Financing Activities: During the Reporting Period the
Company's net cash flows from financing activities increased by 102.79% year-on-year mainly due to
unpaid dividends during the period.
2. Detailed explanation of significant changes in the Company’s business type profit composition
or profit sources during the Reporting Period
□ Applicable √ Not applicable
(II). Explanation of Significant Changes in Profit Due to Non-Core Business
□ Applicable √ Not applicable
(III). Analysis of Assets and Liabilities
√Applicable □ Not applicable
1. Assets and liabilities
Unit: yuan Currency: RMB
Change
Amount as at the
Amount as at the Percentage in Percentage from the
end of the
Item end of the total assets in total previous Explanation
previous
Reporting Period (%) assets (%) reporting
reporting period
period (%)
Monetary fund 2877767910.42 10.74 4288171778.59 16.55 -32.89 This was mainly due to an increase
in the purchase of wealth
management products during the
period.This was mainly due to an increase
Trading Financial in the purchase of wealth
1977052675.20 7.38 1140377416.70 4.40 73.37
Assets management products during the
period.Decrease in endorsed unmatured
bank acceptance bills with lower
Notes receivable 36626560.85 0.14 107542558.59 0.41 -65.94
credit ratings at the end of the
period.Accounts receivable Increase in high-credit-rating bills
32134493.66 0.12 17978363.00 0.07 78.74
financing on hand at the end of the period.Increase in raw materials and
Inventories 3996122827.78 14.92 3021627701.05 11.66 32.25
finished goods during the period.Increase in long-term deposits
Non-current assets
606208384.81 2.26 75575625.48 0.29 702.12 reclassified to amounts due within
due within one year
one year during the period.Increase in VAT input tax credits
Other Current Assets 376523005.53 1.41 214731083.57 0.83 75.35 retained for offset during the
period.Long-term equity Losses of associates during the
2635435.80 0.01 4757925.21 0.02 -44.61
investments period.Construction in Increase in project investment
1285969127.79 4.80 343559937.21 1.33 274.31
progress during the period.Normal depreciation during the
Right-of-use assets 2330281.28 0.01 4007321.13 0.02 -41.85
period.Increase in long-term deposits
Other Non-Current
283174780.22 1.06 683449155.24 2.64 -58.57 reclassified to amounts due within
Assets
one year during the period.Mainly due to the impact of
Derivative financial Not exchange rate fluctuations on
42227.58 - - -
liabilities Applicable foreign exchange options purchased
by the Company.Increase in declared but unpaid
Other Payables 1437537640.70 5.37 256349893.68 0.99 460.77
dividends during the period.Decrease in endorsed unmatured
Other current bank acceptance bills with lower
46050129.71 0.17 79369933.52 0.31 -41.98
liabilities credit ratings and deferred output
VAT at the end of the period.Leases nearing expiry during the
Lease Liabilities 482287.52 - 1012966.64 - -52.39
period.Increase in software service fees
Long-Term Payables 23457549.63 0.09 10500000.00 0.04 123.41
during the period.Long-Term - - 7474640.65 0.03 Not Decrease in long-term employee
Employee benefits Applicable benefits payable during the period.Payable
Not Increase in share repurchases
Less: Treasury Stock 39999676.57 0.15 - -
Applicable during the period.Losses from fair value changes in
Other
equity instruments and foreign
Comprehensive -258986565.20 -0.97 -159220172.21 -0.61 62.66
currency statement translation
Income
differences during the period.Other information
None
2. Overseas assets
√ Applicable□ Not applicable
(1) Asset size
Of which overseas assets amounted to RMB 2.091 billion (unit: RMB 100 million; currency: RMB)
accounting for 7.81% of total assets.
(2) Explanation of a high proportion of overseas assets
□ Applicable √ Not applicable
Other information
None
3. Restrictions over major assets as of the end of the Reporting Period
√ Applicable□ Not applicable
Unit: yuan Currency: RMB
Item June 30 2026 Reasons for restriction
Monetary fund 295271669.02 Guarantee Deposits and Other
Endorsed or discounted not yet due and cannot be
Notes receivable 23151726.35
derecognized
Total 318423395.37
4. Other information
□ Applicable √ Not applicable
(IV). Analysis of Investment
1. Overall analysis of external equity investment
√ Applicable□ Not applicable
Unit: yuan Currency: RMB
Proportion of Book balance
shareholding
Investee
in investee ClosingOpening balance Increase Decrease
(%) balance
Bank of Tibet 4.2414 157000000.00 157000000.00
AIM Vaccine Corporation 4.1286 144966810.00 -72877160.00 72089650.00
Tongliao Desheng Bio-tech
49 4757925.21 -2122489.41 2635435.80
Co. Ltd.Total 306724735.21 -74999649.41 0.00 231725085.80
(1) Significant equity investment
□ Applicable √ Not applicable
(2) Significant non-equity investment
□ Applicable √ Not applicable
(3) Financial assets measured at fair value
√ Applicable □ Not applicable
Unit: yuan Currency: RMB
Gains or losses on Impairment
Accumulated fair Purchase amount Sales/repurchase
changes in fair accrued during
Asset type Opening amount value changes for the Reporting amount for the Other changes Closing amount
value for the the Reporting
included in equity Period Reporting Period
Reporting Period Period
Trust products 131569423.75 1078064.78 390000000.00 180694053.15 341953435.38
Private equity
Derivatives 2061300.00 10737057.95 10616704.37 2181653.58
Others 1610758165.95 -48765706.08 -204033190.00 7103.27 6005620459.99 5339049091.66 14177909.99 2242734634.92
Total 1744388889.70 -36950583.35 -204033190.00 7103.27 6395620459.99 5530359849.18 14177909.99 2586869723.88
Securities investment
□ Applicable √ Not applicable
Explanation of securities investment
□ Applicable √ Not applicable
Private equity investment
□ Applicable √ Not applicable
Derivatives investment
□ Applicable √ Not applicable
(V). Sale of Material Assets and Equity
□ Applicable √ Not applicable
(VI). Analysis of Major Holding and Joint Stock Companies
√ Applicable□ Not applicable
Major subsidiaries and investees whose impact on the company’s net profit reaches or exceeds 10%
√ Applicable□ Not applicable
Unit: 100 million yuan Currency: RMB
Company Company
Main Business Registered Capital Total Assets Net Assets Operating Revenue Operating Profit Net Profit
Name Type
Tongliao Production and sales of MSG
Subsidiary 18.00 91.27 59.04 46.16 2.74 2.45
Meihua and amino acids
Xinjiang Production and sales of MSG
Subsidiary 25.00 59.54 48.79 23.30 2.47 2.07
Meihua and amino acids
Production and sales of MSG
Jilin Meihua Subsidiary 20.00 69.84 35.87 39.79 -0.47 -0.92
and amino acids
Acquisitions and disposals of subsidiaries during the reporting period
√ Applicable□ Not applicable
Company Name Methods of acquiring and disposing of subsidiaries during the Impact on Overall Production Operations and Performance
reporting period:
Plumino Precision Fermentation (Thailand) Co. Ltd Sale Realized a gain on disposal of 35066419.30 yuan
Other explanations
□ Applicable √ Not applicable
(VII). Structured Entities Controlled by the Company
□ Applicable √ Not applicable
V. Other Disclosures
(I). Potential Risks
√ Applicable□ Not applicable
1. Risks Related to Overseas Market Operations
The Company's overseas revenue accounted for approximately 30% of total revenue. The
Company's business spans multiple regions around the world. Overseas production and sales are subject
to strict compliance with local laws product market access requirements and supplier management rules.Given the heightened uncertainty in the global geopolitical and economic and trade environment
overseas business faces multiple potential risks.
(1) Exchange Rate Fluctuation Risk
Overseas business settlement is mainly denominated in USD. Product exports procurement
construction and collection at overseas bases involve multi-currency receipts and payments. Although
the Company has established a foreign exchange monitoring mechanism and supports it with hedging
operations sharp and drastic exchange rate fluctuations or deviations in derivative operations could still
directly affect the Company's profitability.
(2) Tariff and Trade Barrier Risk
Global trade protectionism is on the rise and China's amino acid products frequently encounter
overseas anti-dumping and countervailing investigations. Since 2026 the EU Brazil and the United
States have successively imposed high anti-dumping and countervailing duties on lysine and valine. If
more countries follow suit and introduce restrictive policies the price competitiveness of the Company's
products will be weakened resulting in the loss of overseas orders. The return of excess supply to the
domestic market will also intensify competition in the domestic industry and compress overall
profitability.
(3) Overseas Investment and Operational Risk
The Company has already established overseas production bases. If new overseas projects are
continuously built the risks of existing and incremental assets will be compounded. The overseas
geopolitical situation is volatile project construction and localized operation cost control are difficult
and there is uncertainty in matching local supply chains with production capacity which may increase
operating costs and drag down project returns.Response measures: The Company will continue to improve its global management and control
system track trade and market access policies of various countries in real time dynamically adjust
foreign exchange hedging plans and proactively communicate with and properly handle various trade
investigations. Before making overseas investments the Company will conduct thorough market and
compliance due diligence manage project construction and operating costs throughout the entire project
lifecycle and build localized supporting supply chains. It will also continue to cultivate an international
professional talent team and comprehensively enhance cross-border compliance management
capabilities.
2. Industry Competition and Product Price Fluctuation Risk
The amino acid industry is currently in a cycle of capacity expansion and adjustment with industry
leaders and new entrants continuing to release production capacity leading to periodic oversupply of
certain products. If downstream demand recovery falls short of expectations and the elimination of
outdated capacity remains slow the industry supply-demand landscape will continue to weaken product
selling prices will come under downward pressure and product gross margins will be directly
compressed.Meanwhile the Company continues to plan new capacity construction. If market absorption
capacity is insufficient after new production lines come on stream compounded by low-price
competition in the industry the investment returns of new projects will fall short of expectations.Response measures: track industry supply and demand data on a regular basis and flexibly adjust
the pace of project construction and commissioning according to market conditions; leverage the
advantages of the integrated industrial chain and scale-based cost leadership to enhance the ability to
operate through cycles; continue to expand high-value-added product tracks such as pharmaceuticals
build differentiated competitive barriers and hedge against the risk of price fluctuations in bulk products.
3. Technology and Intellectual Property Risk
The Company's core competitiveness relies on proprietary process technologies such as in-house
strain selection and directed fermentation. Once core technical information is leaked or key R&D
personnel are lost the technological barriers built over the long term will be weakened and the
Company's product competitive advantages will decline.At the same time intellectual property disputes occur frequently in the industry. Although the
Company has deployed multiple patents across the entire industrial chain there is both the possibility of
its own patents being infringed by peers and the risk of inadvertently infringing third-party intellectual
property rights during production and operations. Related litigation and injunctions may restrict normal
production and sales and adversely affect business operations.Response measures: establish a tiered confidentiality management system and strictly control
access to and circulation permissions for R&D materials; improve the long-term incentive mechanism
for core R&D personnel to stabilize the technical team; establish a regularized intellectual property
management mechanism proactively defend rights and conduct periodic patent risk screening to avoid
intellectual property legal disputes.
4.Compliance and Operational Risks
(1)Environmental Protection Risk
Most of the Company's production bases are designated as key pollutant discharge units and the
production process generates wastewater waste gas and solid waste. If equipment failures or
management omissions cause excessive pollutant discharge or sudden environmental incidents the
Company may face fines suspension for rectification civil claims and other penalties damaging its
brand image. As global and domestic environmental protection standards continue to tighten subsequent
investment in environmental technology upgrades and operation and maintenance will continue to
increase raising overall production costs.(2) Production Safety Risk
The Company uses and stores hazardous chemicals such as liquid ammonia and sulfuric acid in its
production processes and operates a large number of special equipment with stringent safety
management standards. If safety systems are not implemented properly equipment maintenance is not
timely or employee operations do not follow standards safety accidents may easily occur causing
casualties property losses and full-line shutdowns.
(3) Labor Compliance Risk
The Company has a relatively large workforce. As labor and employment regulatory requirements
continue to tighten the Company needs to continuously improve its compliance management in areas
such as social insurance contributions labor contracts and compensation management. If relevant
processes are not implemented properly situations such as retroactive payments rectification or labor
disputes may arise increasing management costs.Response measures: fully implement the main responsibilities for environmental protection and
safety and continuously upgrade the HSE management system; carry out regular equipment inspection
and hazard identification and organize emergency drills on a regular basis; increase investment in
cleaner production and safety technology upgrades and enhance inherent safety and pollution control
capabilities at the source; conduct regular employee safety and environmental protection training and
assessment and consolidate the foundational control line; in terms of labor and employment
continuously improve employment management systems carry out regular compliance self-inspections
standardize the entire-process management of social insurance contracts and compensation promptly
resolve labor disputes and maintain a harmonious and stable employment environment.
5. Financial and Tax Policy Change Risks
(1) Interest Rate Fluctuation Risk
The Company has floating-rate bank borrowings. If market interest rates continue to rise interest
expenses will increase accordingly raising overall financial costs.
(2) Tax Incentive Change Risk
Some domestic and overseas subsidiaries rely on preferential income tax policies to reduce their tax
burden. If relevant industrial tax policies are adjusted or existing incentives cannot be extended the
Company's overall tax burden will rise directly compressing profit margins.Response measures: optimize the financing structure of long-term and short-term fixed-rate and
floating-rate borrowings and appropriately use fixed-rate financial instruments to lock in financing costs;
continuously track changes in domestic and international tax laws and regulations and optimize the
Company's tax planning in advance; strengthen Company-wide cash flow and asset-liability
coordination management to ensure the overall financial structure remains sound.(II). Other Disclosure Matters
□ Applicable √ Not applicable
Section 4 Corporate Governance Environment and Society
I. Changes in directors and officers
□ Applicable √ Not applicable
Explanation of Changes in directors and officers
□ Applicable √ Not applicable
II. Plans for Profit Distribution or the Conversion of Capital Reserve
Interim Profit Distribution and Capital Reserve to Share Capital Plan
Whether to distribute or convert No
Number of bonus shares per 10 shares 0
Cash dividend per 10 shares (including tax) 0
Number of shares for conversion per 10 shares (share) 0
Notes on the Profit Distribution or Capital Reserve Conversion Plan
Not Applicable
III. Information of the Company’s Share Incentive Plan Employee Stock Ownership Plan or
Other Staff Incentives and Their Impact
(I). Relevant equity incentive matters have already been disclosed in temporary announcements
with no subsequent progress or changes in implementation.□ Applicable √ Not applicable
(II). Incentives that were not disclosed in the provisional announcement or made progress
subsequently
Share incentives
□ Applicable √ Not applicable
Other information
□ Applicable √ Not applicable
Employee stock ownership plan
√ Applicable□ Not applicable
1.Employee stock ownership plan for 2024
The Company held the 8th meeting of the tenth board of directors and the first extraordinary
general meeting of 2024 on January 16 and February 1 2024 respectively. At the meetings the Proposal
on the Company’s Employee Stock Ownership Plan (Draft) for 2024 and its Summary the Proposal on
the Management Measures for the Company’s Employee Stock Ownership Plan for 2024 and the
Proposal on Requesting Full Authorization from the General Meeting for the Board of Directors to
Handle Matters Related to the Company’s Employee Stock Ownership Plan were deliberated and
approved. For details refer to the relevant announcements published by the Company on the website of
the Shanghai Stock Exchange (http://www.sse.com.cn) on January 17 and February 2 2024.As of June 27 2024 the Company’s designated account for the 2024 employee stock ownership
plan had purchased a total of 18527100 shares of the Company through centralized bidding on the
secondary market with a total transaction amount of 192049194 yuan (excluding transaction fees) and
an average transaction price of approximately 10.37 yuan per share. The number of shares purchased
accounted for 0.65% of the Company’s current total share capital of 2852788750 shares. In accordance
with the plan approved at the first extraordinary general meeting of 2024 the purchase under the 2024
employee stock ownership plan has been completed. The purchased shares are subject to lock-up and
will be unlocked in two phases after 12 and 24 months from the date of the announcement with the
maximum lock-up period being 24 months. The proportions of shares to be unlocked in each phase are
50% and 50% respectively.
As of the end of the reporting period all shares under the 2024 employee stock ownership plan had
been released from lock-up. The Company’s designated account for the 2024 employee stock ownership
plan held 9266101 shares accounting for 0.33% of the Company’s current total share capital of
2804241650 shares.
2.Employee stock ownership plan for 2025
On February 11 2025 the Company convened the 17th meeting of the 10th Board of Directors and
on February 27 2025 the first extraordinary general meeting of shareholders in 2025. At these meetings
the following proposals were reviewed and approved: Proposal on the 2025 Employee Stock Ownership
Plan (Draft) and its Summary Proposal on the Administrative Measures of the 2025 Employee Stock
Ownership Plan and Proposal on Requesting the General Meeting of Shareholders to Authorize the
Board of Directors to Fully Handle Matters Related to the Company’s Employee Stock Ownership Plan.For details please refer to the announcements disclosed by the Company on the Shanghai Stock
Exchange website (http://www.sse.com.cn) on February 12 2025 and February 28 2025.As of the market close on August 1 2025 the special account of the 2025 Employee Stock
Ownership Plan had purchased a total of 21042422 shares of the Company through centralized bidding
transactions on the secondary market representing 0.74% of the Company’s total current share capital of
2852788750 shares. The average transaction price was approximately RMB 10.70 per share with a
total transaction amount of RMB 225143665.20 (excluding transaction fees). According to the plan
approved by the first extraordinary general meeting of shareholders in 2025 the purchase of Company
shares under the 2025 Employee Stock Ownership Plan has been completed. The purchased shares will
be subject to lock-up in accordance with regulations. The lock-up period will expire in two phases: after
12 months and 24 months from the date of disclosure of the completion announcement with a maximum
lock-up period of 24 months. The shares will be unlocked in two batches with 50% released each time.As of the end of the reporting period the Company's 2025 Employee Stock Ownership Plan had not
yet been released from lock-up.
3.Employee stock ownership plan for 2026
On December 11 2025 the Company convened the 23rd meeting of the 10th Board of Directors
and on December 29 2025 the second extraordinary general meeting of shareholders in 2025. At these
meetings the following proposals were reviewed and approved: Proposal on the 2026 Employee Stock
Ownership Plan (Draft) and its Summary Proposal on the Administrative Measures of the 2026
Employee Stock Ownership Plan and Proposal on Requesting the General Meeting of Shareholders to
Authorize the Board of Directors to Fully Handle Matters Related to the Company’s Employee Stock
Ownership Plan. For details please refer to the announcements disclosed by the Company on the
Shanghai Stock Exchange website (http://www.sse.com.cn) on December 12 2025 and December 30
2025.
As of the market close on April 23 2026 the special account of the 2026 Employee Stock
Ownership Plan had purchased a total of 6271100 shares of the Company through centralized bidding
transactions on the secondary market representing 0.22% of the Company’s total current share capital of
2804241650 shares. The average transaction price was approximately RMB 10.03 per share with a
total transaction amount of RMB 62890725 (excluding transaction fees). According to the plan
approved by the second extraordinary general meeting of shareholders in 2025 the purchase of
Company shares under the 2026 Employee Stock Ownership Plan has been completed. The purchased
shares will be subject to lock-up in accordance with regulations. The lock-up period will expire in two
phases: after 12 months and 24 months from the date of disclosure of the completion announcement
with a maximum lock-up period of 24 months. The shares will be unlocked in two batches with 50%
released each time.Other incentives
□ Applicable √ Not applicable
IV. Environmental Information Disclosure of Listed Companies and Their Major Subsidiaries
Included in the Mandatory Environmental Information Disclosure List
√ Applicable□ Not applicable
Number of enterprises included in the list of
entities required by law to disclose 5
environmental information (units)
No. Enterprise Name Index for Inquiry of Legally Mandated Environmental Information Disclosure Report
System on Corporate Environmental Information Disclosed in accordance with the
Law (Inner Mongolia)
http://111.56.142.62:40010//support-yfpl-web/web/viewRunner.htmlviewId
Tongliao Meihua Biotechnology
1 =http://111.56.142.62:40010//support-yfpl-web/web/sps/views/yfpl/views/
Co. Ltd.yfplHomeNew/index.js&cantonCode=150000
National Pollutant Discharge Permit Management Information Platform
https://permit.mee.gov.cn/perxxgkinfo/syssb/xkgg/xkgg!licenseInformation.action
System on Corporate Environmental Information Disclosed in accordance with the
Law (Inner Mongolia)
http://111.56.142.62:40010/support-yfpl-web/web/viewRunner.htmlviewId
Tongliao Jianlong Chemical Co.
2 =http://111.56.142.62:40010/support-yfpl-web/web/sps/views/yfpl/views/
Ltd.yfplHomeNew/index.js&cantonCode=150000
National Pollutant Discharge Permit Management Information Platform
https://permit.mee.gov.cn/perxxgkinfo/syssb/xkgg/xkgg!licenseInformation.action
Xinjiang Meihua Amino Acid Co. National Pollutant Discharge Permit Management Information Platform
3
Ltd. https://permit.mee.gov.cn/perxxgkinfo/syssb/xkgg/xkgg!licenseInformation.action
System on Corporate Environmental Information Disclosed in accordance with the
Law (Jilin)
4 Jilin Meihua Amino Acid Co. Ltd. http://36.135.7.198:9015/index
National Pollutant Discharge Permit Management Information Platform
https://permit.mee.gov.cn/perxxgkinfo/syssb/xkgg/xkgg!licenseInformation.action
System on Corporate Environmental Information Disclosed in accordance with the
Law (Shanghai)
Shanghai Plumino Amino Acid
5 https://e2.sthj.sh.gov.cn/jsp/view/hjpl/index.jsp
Co. Ltd.National Pollutant Discharge Permit Management Information Platform
https://permit.mee.gov.cn/perxxgkinfo/syssb/xkgg/xkgg!licenseInformation.action
Other information
√ Applicable□ Not applicable
Except for the above-mentioned companies other wholly-owned subsidiaries of the Company such
as Langfang Meihua Condiments Co. Ltd. and Tongliao Meihua Condiments Co. Ltd. which are
engaged in the packaging and sales of condiments; Lhasa Meihua which is engaged in external
investment; Hong Kong Meihua a trading company responsible for exporting the Company’s products;
and Meihua (Shanghai) Biotechnology Co. Ltd. which focuses on technology development are not
included in the list of enterprises required to disclose environmental information in accordance with the
law.V. Consolidation and Expansion of Achievements in Poverty Alleviation and Work Related to
Rural Revitalization
√ Applicable□ Not applicable
During the reporting period the Company consistently upheld the philosophy of "developing the
enterprise and giving back to society" actively fulfilled its social responsibilities and widely
participated in and supported various charitable and public welfare activities. All of the Company's
public welfare activities were carried out through its Tibet Meihua Public Welfare Foundation. In the
first half of 2026 the Foundation made cumulative external donations of RMB 1668326 covering
multiple fields including education support assistance to disadvantaged groups and persons with
disabilities child protection ecological protection and healthcare continuously giving back to society
through diversified forms of public welfare.Education Support: Donated RMB 500000 to the Shanghai Pudong New Area Social
Development Foundation specifically for the education public welfare programs and organizational
development of the Chunhe Youth Development Center helping rural children stimulate innovative
thinking and cultivate independent open and confident qualities. Donated RMB 150000 to the
Tongliao Horqin District Nuanxin Education Development Foundation to support the development of
local education public welfare undertakings. Through the Company's May Cultural Festival charity walk
event themed "Walking Toward Goodness Journeying Together on the Path of Public Welfare" donated
RMB 140063 to the China Social Welfare Foundation. The funds were used to distribute music kits art
kits and other aesthetic education supplies to students at 155 rural schools in Hebei Inner Mongolia
Xinjiang and Jilin enhancing students' artistic literacy. Donated RMB 78633 to the Hebei Charity
Federation to distribute dream bags sports kits book corners and other supplies to students at
Tongjiakou Primary School in Pingshan County Shijiazhuang. Donated RMB 29800 to the Baicheng
Charity Federation to support artificial intelligence comprehensive practice programs in local primary
and secondary schools.Assistance to Disadvantaged Groups and Persons with Disabilities: Donated RMB 80000 to
the Baicheng Charity Federation to support assistance to people in need. Donated RMB 50000 to the
Wujiaqu Charity Federation to support assistance to persons with disabilities. Donated goods worth
RMB 5080 to the Hebei Foundation for Disabled Persons. Donated RMB 4750 to the Baicheng Charity
Federation to help low-income groups with medical insurance contributions covering 19 individuals
with special difficulties.Child Protection and Mental Health: Donated RMB 150000 to the Beijing Zhongyi Public
Welfare Foundation to support projects such as girl child protection "Legal Aid Buds" and "Heart Aid
Buds" safeguarding children's physical and mental health and legitimate rights and interests.Ecological and Environmental Protection: Donated RMB 200000 to the Tongliao Biodiversity
Conservation Association to support biodiversity conservation. Donated RMB 30000 to the Hebei
Charity Federation to support environmental protection at the Bazhou Ecological Park in Hebei Province
and the construction of the "Meihua Low-Carbon Public Welfare Forest" practicing social responsibility
and ESG principles through concrete actions.Community Building and Public Safety: Donated RMB 50000 to the Hebei Public Security
Heroes Foundation to support the families of deceased heroes facing difficulties as well as police
officers and auxiliary police officers who are disabled in the line of duty or suffering from serious
illnesses and extreme hardship.Healthcare: Donated RMB 200000 to the Nanjing Medical University Education Development
Foundation to support the scientific research and talent cultivation work of medical research teams.The Company will continue to make public welfare a regular practice integrate social
responsibility into daily operations and maintain sustained efforts in consolidating and expanding
poverty alleviation achievements and comprehensively advancing rural revitalization. At the same time
the Company will fulfill its corporate responsibilities convey warmth and hope through more diversified
forms of public welfare and demonstrate the social responsibility of a listed company.Section 5 Significant Matters
I. Fulfillment of Commitments
(I). Commitments of relevant parties including the Company’s actual controller shareholders related parties acquirers and the Company
√ Applicable□ Not applicable
Whether If it is not
it is If it is not fulfilled in
Whether
Commitment Type of Commitment Date of strictly fulfilled in due due course
Content of commitment there is a Deadline
background commitment made by commitment fulfilled course state the state the
deadline
in due specific reasons plan for the
course next step
During the period when Mr. Meng Qingshan and the
persons acting in concert serve as the Company’s
Meng controlling shareholder and actual controller effective
Solving Qingshan and measures will be taken and Mr. Meng Qingshan or
Not
horizontal persons the holding subsidiaries under Mr. Meng Qingshan July 19 2010 No Yes Not Applicable
Applicable
competition acting in and the persons acting in concert will take effective
Commitments concert measures not to engage in any business that may
related to the compete with that of the listed company or its
restructuring subsidiaries.of major Upon completion of the restructuring Mr. Meng
assets Qingshan and the persons acting in concert will avoid
Meng
Solving related-party transactions with the listed company
Qingshan and
related- wherever possible. If there is any unavoidable related- Not
persons July 19 2010 No Yes Not Applicable
party party transaction Mr. Meng Qingshan and the persons Applicable
acting in
transactions acting in concert will enter into agreements with the
concert
listed company in accordance with laws perform
lawful procedures fulfill the duty of information
Whether If it is not
it is If it is not fulfilled in
Whether
Commitment Type of Commitment Date of strictly fulfilled in due due course
Content of commitment there is a Deadline
background commitment made by commitment fulfilled course state the state the
deadline
in due specific reasons plan for the
course next step
disclosure and go through formalities to obtain
approval in accordance with relevant laws
regulations and the Articles of Association. They
undertake not to harm the legitimate rights and
interests of the listed company and other shareholders
through related-party transactions.Meng Upon completion of the transaction they will
Qingshan and maintain the independence of the listed company
Not
Others persons observe the principle of separation in personnel July 19 2010 No Yes Not Applicable
Applicable
acting in finance institution and business and run the listed
concert company in accordance with the relevant CRSC rules.II. Use of Funds by Controlling Shareholder and Related Parties for Non-operational Purposes
During the Reporting Period
□ Applicable √ Not applicable
III. Guarantees in Violation of Regulations
□ Applicable √ Not applicable
IV. Audit Status of the Semi-Annual Report
□ Applicable √ Not applicable
V. Changes and Handling of Matters Related to Non-Standard Audit Opinions in Last Year’s
Annual Report
□ Applicable √ Not applicable
VI. Bankruptcy and Restructuring-Related Matters
□ Applicable √ Not applicable
VII. Significant Litigation and Arbitration
√ The company had significant litigation and arbitration matters during the reporting period
□The company had no significant litigation or arbitration matters during the reporting period
(I). Circumstances in which litigation or arbitration was disclosed in provisional announcements
but did not subsequently progress
√ Applicable □ Not applicable
Case Overview and Type Index SearchFor further details please refer to the “Announcement byMeiHua Holdings Group Co. Ltd. Regarding Litigation
The patent infringement lawsuit between the Company andInvolving the Company and Its Subsidiaries”
Ajinomoto Co. Inc. of Japan has been accepted by the
(Announcement No. 2025-058) disclosed by the Company
Guangdong Provincial Higher People’s Court.on November 22 2025 on the Shanghai Stock Exchange
website (www.sse.com.cn).(II). Circumstance where any litigation or arbitration was not disclosed in provisional
announcements or progressed subsequently
□ Applicable √ Not applicable
(III). Other information
√ Applicable □ Not applicable
1. Litigation related to Ajinomoto Co. Inc. of Japan
Ajinomoto Co. Inc. of Japan has filed a lawsuit against the Company and its wholly-owned
subsidiaries—Tongliao Meihua Xinjiang Meihua and Jilin Meihua—alleging patent infringement. The
Guangdong Higher People’s Court has accepted the case. For further details please refer to the relevant
announcements issued by the Company.As of the date of this report the case has not yet been heard in court. The Company is actively
defending itself in accordance with the law and taking necessary legal measures to resolutely safeguard
the legitimate rights and interests of the Company and its shareholders. The Company will continue to
monitor the progress of the case and fulfill its information disclosure obligations in a timely manner.VIII. Alleged Violations of and Punishments on the Listed Company as well as its Directors
Officers Controlling Shareholder and Actual Controller and the Rectifications
□ Applicable √ Not applicable
IX. Credit Statuses of the Company as well as its Controlling Shareholder and Actual Controller
during the Reporting Period
□ Applicable √ Not applicable
X. Significant Related-Party Transactions
(I). Related-party transactions related to day-to-day operations
1. Matters that were disclosed in provisional announcements and did not progress or change
subsequently
□ Applicable √ Not applicable
2. Matters that were disclosed in provisional announcements but progressed or changed
subsequently
√ Applicable□ Not applicable
1) Related-party transactions concerning the purchase of commodities or the receiving of labor services
Content of related- Amount incurred in the Amount incurred in the
Related party
party transaction current period (yuan) previous period (yuan)
Tongliao Desheng Bio-tech Co. Ltd. Raw Materials 62986.28
Total 62986.28
2) Related-party transactions concerning the sale of commodities or the provision of labor services.
Content of related- Amount incurred in the Amount incurred in the
Related party
party transaction current period (yuan) previous period (yuan)
Tongliao Desheng Bio-tech Co. Ltd. Goods 27785882.43 40939356.32
Tongliao Desheng Bio-tech Co. Ltd. Services and other 264449.98 468821.28
Total 28050332.41 41408177.60
3) Related-party leases
Where the Company is the lessor
Rental income Rental income recognized
Name of lessee Type of leased asset recognized in the current in the previous period
period (yuan) (yuan)
Tongliao Desheng Bio-tech Co. Ltd. Housing 511832.56 754159.91
Total 511832.56 754159.91
Where the Company is the lessee
Rental income Rental income recognized
Name of lessee Type of leased asset
recognized in the current in the previous period
period (yuan) (yuan)
Machinery and
Tongliao Desheng Bio-tech Co. Ltd. 142065.64
Equipment
Total 142065.64
3. Significant related-party transactions not previously disclosed in provisional announcements
□ Applicable √ Not applicable
(II). Related-party transactions concerning the purchase or sales of assets or shares
1. Matters that were disclosed in provisional announcements and did not progress or change
subsequently
□ Applicable √ Not applicable
2. Matters that were disclosed in provisional announcements but progressed or changed
subsequently
□ Applicable √ Not applicable
3. Significant related-party transactions not previously disclosed in provisional announcements
□ Applicable √ Not applicable
4. Where it involves agreements on performance targets the Company should disclose the
accomplishment of performance targets during the Reporting Period
□ Applicable √ Not applicable
(III). Significant related-party transactions concerning joint outbound investment
1. Matters that were disclosed in provisional announcements and did not progress or change
subsequently
□ Applicable √ Not applicable
2. Matters that were disclosed in provisional announcements but progressed or changed
subsequently
□ Applicable √ Not applicable
3. Significant related-party transactions not previously disclosed in provisional announcements
□ Applicable √ Not applicable
(IV). Related-party dealings of creditor’s right and debts
1. Matters that were disclosed in provisional announcements and did not progress or change
subsequently
□ Applicable √ Not applicable
2. Matters that were disclosed in provisional announcements but progressed or changed
subsequently
□ Applicable √ Not applicable
3. Significant related-party transactions not previously disclosed in provisional announcements
□ Applicable √ Not applicable
(V). Finance business between the Company and related finance companies the Company’s
holding finance companies and related parties
□ Applicable √ Not applicable
(VI). Other material related-party transactions
□ Applicable √ Not applicable
(VII). Miscellaneous
□ Applicable √ Not applicable
XI. Major Contracts and Performance
(I). Trusteeship contracting and lease matters
□ Applicable √ Not applicable
(II). Major guarantees executed during the reporting period and those not yet fulfilled
√Applicable □Not applicable
Unit: yuan Currency: RMB
The Company’s external guarantees (excluding guarantees for subsidiaries)
Total balance of guarantees at the end of the Reporting Period (A) (excluding guarantees
for subsidiaries)
The Company’s guarantee for subsidiaries
Total amount of guarantees incurred during the Reporting Period 913208602.81
Total balance of guarantees for subsidiaries at the end of the Reporting Period (B) 900208602.81
The Company’s total guarantees (including guarantees for subsidiaries)
Total guarantees (A+B) 900208602.81
Proportion of total guarantees in the Company’s net assets (%) 5.74
(III). Other major contracts
□ Applicable √ Not applicable
XII. Progress of the use of raised funds
□ Applicable √ Not applicable
XIII. Other Important Matters
√ Applicable□ Not applicable
1. Progress of share repurchases
On December 29 2025 the Company convened the first meeting of its 11th Board of Directors at
which the “Proposal on the Repurchase of Company Shares via Centralized Auction Trading” was
reviewed and approved. The Board agreed that the Company may use its own funds to repurchase its
shares via centralized auction trading for the purpose of subsequently implementing an employee stock
ownership plan or equity incentive program. The total repurchase amount shall be no less than RMB 30
million (inclusive) and no more than RMB 50 million (inclusive) with a repurchase price not exceeding
RMB 15 per share. The repurchase period shall not exceed 12 months from the date the Board of
Directors approved this share repurchase plan (i.e. December 29 2025 to December 28 2026).As of the market close on April 23 2026 the Company has actually repurchased 3999100 shares
through centralized bidding transactions accounting for 0.14% of the Company’s current total share
capital (2804241650 shares). The highest repurchase price was RMB 10.07 per share and the lowest
repurchase price was RMB 9.90 per share with an average repurchase price of RMB 10.00 per share
and the total amount used was RMB 39995900 (excluding transaction fees). The amount of shares
repurchased by the Company during the repurchase period has reached the minimum amount specified
in the repurchase plan and the implementation of the share repurchase plan has been completed. For
details refer to the Announcement of MeiHua Holdings Group Co. Ltd. on the Results of Share
Repurchase and Changes in Shares (Announcement No.: 2026-028) published by the Company on the
website of the Shanghai Stock Exchange (www.sse.com.cn) on April 24 2026.
2. Implementation Status of the Shareholding Increase Plan
A total of 76 members including certain directors officers and other key management personnel
(or technical leaders) of the Company driven by their confidence in the Company’s future prospects and
recognition of its long-term investment value and with the aim of maintaining stability in the capital
markets and boosting investor confidence plan to increase their holdings of the Company’s shares
through purchases on the secondary market for a period not exceeding 12 months starting from January
14 2026. The total amount of shares to be purchased is expected to be no less than RMB 303.75 million
(including transaction costs) and no more than RMB 350.15 million (including transaction costs). They
have committed not to sell any of their existing shares in the Company during the implementation of this
share purchase plan and not to sell the shares acquired through this plan by any means for a period of 24
months following the full completion of the plan and the Company’s lawful public announcement
thereof.As of June 8 2026 the above-mentioned entities that increased their shareholding had cumulatively
increased their shareholding in the Company by a total of 32018437 shares through centralized bidding
transactions on the secondary market accounting for 1.142% of the Company’s current total share
capital of 2804241650 shares. The cumulative increase amount was RMB 315626400.76 which has
exceeded the minimum amount specified in this shareholding increase plan and this shareholding
increase plan has been completed. For details please refer to the Announcement of MeiHua Holdings
Group Co. Ltd. on the Completion of the Shareholding Increase Plan and the Results of Shareholding
Increase by Directors Senior Management and Other Core Management of the Company
(Announcement No.: 2026-032) published by the Company on the website of the Shanghai Stock
Exchange (www.sse.com.cn) on June 9 2026.In addition on June 12 2026 the Company received a notice that Mr. Wang Aimin a person acting
in concert with the Company’s controlling shareholder had increased his shareholding in the Company
by a total of 342200 shares through centralized bidding transactions on the secondary market
accounting for 0.012% of the Company’s current total share capital of 2804241650 shares. The
increase amount was RMB 3001516. Mr. Wang Aimin committed that within 24 months after the
completion of this shareholding increase and the Company’s announcement in accordance with the law
he will not reduce his shareholding in the Company acquired through this increase in any way. For
details please refer to the Announcement of MeiHua Holdings Group Co. Ltd. on the Shareholding
Increase by a Person Acting in Concert with the Controlling Shareholder (Announcement No.: 2026-033)
published by the Company on the website of the Shanghai Stock Exchange (www.sse.com.cn) on June
13 2026.
Section 6 Share Changes and Shareholders
I. Changes in Share Capital
(I). Table of share changes
1. Table of share changes
During the reporting period the total number of the company’s shares and its share capital structure
remained unchanged.
2. Explanation of Changes in Share Capital
□ Applicable √ Not applicable
3. Impact of Shareholding Changes Occurring Between the End of the Reporting Period and the
Date of Semi-Annual Report Disclosure on Financial Indicators such as Earnings per Share and
Net Assets per Share (if applicable)
□ Applicable √ Not applicable
4. Other information that the Company deems necessary to disclose or as required by the
securities regulatory body
□ Applicable √ Not applicable
(II). Changes in restricted sales
□ Applicable √ Not applicable
II. Shareholder Information
(I). Total number of shareholders
Total number of ordinary shareholders as of the end of the Reporting Period 81263
(II). Shares held by the top ten shareholders and the top ten holders of tradable shares (or holders
of non-restricted shares) as of the end of the Reporting Period
Unit: Share
Shares held by the top ten shareholders (excluding the shares lent through refinancing)
Increase/decre Pledged marked or frozen
Number of shares Number of
ase during the Proportion Nature of
Shareholder’s name (full name) held at the end of restricted shares shares
Reporting (%) shareholder
the period held
Period Share status Quantity
Domestic
Meng Qingshan 854103033 30.46 None
natural person
Hong Kong Securities Clearing
86642756 3.09 None Other
Company Limited
Domestic
Wang Aijun 73987374 2.64 None
natural person
China Construction Bank
Corporation – Huatai-
63922472 2.28 None Other
PineBridge CSI Dividend
Low Volatility ETF
Domestic
Liang Yubo 54474218 1.94 None
natural person
Domestic
Hu Jijun 52678128 1.88 None
natural person
Agricultural Bank of China
Limited – Southern S&P
China A-Share Large-Cap 43667869 1.56 None Other
Dividend Low Volatility 50
ETF
Zhejiang Commercial Bank
Co. Ltd. – Guotai CSI
43094121 1.54 None Other
Livestock and Poultry
Farming ETF
National Social Security
37588438 1.34 None Other
Fund Portfolio 406
Domestic
He Jun 28396258 1.01 None
natural person
Shares held by the top ten holders of non-restricted shares (excluding the shares lent through refinancing)
Type and quantity of shares
Name of shareholder Quantity of non-restricted tradable shares held
Type Type
Meng Qingshan 854103033 RMB ordinary share 854103033
Hong Kong Securities Clearing Company
Limited 86642756
RMB ordinary share 86642756
Wang Aijun 73987374 RMB ordinary share 73987374
China Construction Bank Corporation –
Huatai-PineBridge CSI Dividend Low 63922472 RMB ordinary share 63922472
Volatility ETF
Liang Yubo 54474218 RMB ordinary share 54474218
Hu Jijun 52678128 RMB ordinary share 52678128
Agricultural Bank of China Limited –
Southern S&P China A-Share Large-Cap 43667869 RMB ordinary share 43667869
Dividend Low Volatility 50 ETF
Zhejiang Commercial Bank Co. Ltd. –
Guotai CSI Livestock and Poultry Farming 43094121 RMB ordinary share 43094121
ETF
National Social Security Fund Portfolio
37588438 RMB ordinary share 37588438
406
He Jun 28396258 RMB ordinary share 28396258The Company’s repurchase account is not presented in the “Shares held by the top ten holdersInformation on the Repurchase Account of non-restricted shares” section. As of the end of the Reporting Period there were 3999100
Among the Top Ten Shareholders of the Company’s shares held in the repurchase account accounting for 0.14% of the
Company’s total (2804241650 shares) shares at present.Information of voting trust voting Among the above shareholders Meng Qingshan Hu Jijun Wang Aijun and Liang Yubo have
trusteeship and abstention of voting rights no voting trust voting trusteeship and abstention of voting rights. The information of voting
for the above shareholders trust voting trusteeship and abstention of voting rights for other shareholders is not known.Information of relationships or acting in Among the above shareholders Meng Qingshan and Wang Aijun are persons acting in
concert of the above shareholders concert.Information of preferred shareholders with
restored voting rights and the number of None
shares held by them
Participation of shareholders holding 5% or more top ten shareholders and top ten holders of
unrestricted outstanding shares in securities lending through the stock lending and borrowing (SLB)
program.□ Applicable √ Not applicable
Changes in the Top Ten Shareholders and Top Ten Holders of Unrestricted Outstanding Shares Due to
Stock Lending and Borrowing (SLB) Activities
□ Applicable √ Not applicable
Number of shares held by the top ten holders of restricted shares and the restrictions
□ Applicable √ Not applicable
(III). Strategic investors or general legal persons becoming top ten holders due to the allotment of
new shares
□ Applicable √ Not applicable
III. Information of Directors and Officers
(I). Changes in Shareholdings of Current and Resigned Directors and Senior Management During
the Reporting Period
√Applicable □ Not applicable
Unit: share
Number of Changes in the
Number of
shares held at the number of shares
Name Position shares held at the Reasons for the change
beginning of the during the
end of the period
period reporting period
Shareholding Increase on
Wang Aijun Chairman 72452774 73987374 1534600
the Secondary Market
Director and
Shareholding Increase on
He Jun General 24584458 28396258 3811800
the Secondary Market
Manager
Senior Deputy
Shareholding Increase on
Wang Ailing General 378900 1183137 804237
the Secondary Market
Manager
Shareholding Increase on
Wang Lihong CFO 117300 222300 105000
the Secondary Market
Shareholding Increase on
Liu Xianfang Board Secretary 187400 341400 154000
the Secondary Market
Other Explanatory Information
□ Applicable √ Not applicable
(II). Equity Incentives Granted to Director and Senior Management During the Reporting Period
□ Applicable √ Not applicable
(III). Other information
□ Applicable √ Not applicable
IV. Changes in Controlling Shareholder or Actual Controller
√Applicable □ Not applicable
During the reporting period Meng Qingshan the controlling shareholder of the Company
remained unchanged. As his children Wang Ailing Wang Aimin and Wang Aidi increased their
shareholding in the Company through centralized bidding on the secondary market Wang Ailing Wang
Aimin and Wang Aidi together with Meng Qingshan Wang Aijun and He Jun constitute persons
acting in concert. For details please refer to the relevant announcements published by the Company.V. Information on Preferred Shares
□ Applicable √ Not applicable
Section 7 Information on Securities
I. Corporate Bonds (including Enterprise Bonds) and Non-Financial Corporate Debt Financing
Instruments
□ Applicable √ Not applicable
II. Information of Convertible Debentures
□ Applicable √ Not applicable
Section 8 Financial Report
I. Audit Report
□ Applicable √ Not Applicable
II. Financial Statements
Consolidated Balance Sheet
June 30 2026
Prepared by: MeiHua Holdings Group Co. Ltd.Unit: Yuan Currency: RMB
Items Notes June 30 2026 December 31 2025
Current Assets:
Monetary assets Note 1 2877767910.42 4288171778.59
Deposit reservation for balance
Placements with banks and other financial institutions
Financial assets held for trading Note 2 1977052675.20 1140377416.70
Derivative financial assets Note 3 2181653.58 2061300.00
Notes receivable Note 4 36626560.85 107542558.59
Accounts receivable Note 5 649253228.67 577371086.06
Receivables Financing Note 7 32134493.66 17978363.00
Prepaid accounts Note 8 142397572.45 171884582.59
Premiums receivable
Reinsurance accounts receivable
Reinsurance contract reserves receivable
Other receivables Note 9 62537139.77 70477156.58
Including: Interest receivable 2362500.00 1575000.00
Dividend receivable 1395866.49
Financial assets purchased under agreements to resell
Inventories Note 10 3996122827.78 3021627701.05
Among them: Data resources
Contract assets
Assets held for sale
Non-current assets due within one year Note 12 606208384.81 75575625.48
Other current assets Note 13 376523005.53 214731083.57
Total Current Assets 10758805452.72 9687798652.21
Non-current Assets:
Loans and advances
Debt investments Note 14 10500000.00 10500000.00
Other debt investments
Long-term receivables Note 16 224781.42 233244.15
Long-term equity investments Note 17 2635435.80 4757925.21
Investments in other equity instruments Note 18 229089650.00 301966810.00
Other non-current financial assets Note 19 346396575.38 282005000.00
Investment properties
Fixed assets Note 21 12127838360.07 12768478381.36
Construction in progress Note 22 1285969127.79 343559937.21
Productive biological assets
Oil and gas assets
Right-of-use assets Note 25 2330281.28 4007321.13
Intangible assets Note 26 1431155275.44 1557280758.01
Among them: Data resources
Development expenditure
Among them: Data resources
Goodwill Note 27 11788911.79 11788911.79
Long-term prepaid expenses Note 28 150580694.96 133781048.89
Deferred income tax assets Note 29 144936109.43 126369580.18
Other non-current assets Note 30 283174780.22 683449155.24
Total Non-current Assets 16026619983.58 16228178073.17
Total Assets 26785425436.30 25915976725.38
Current Liabilities:
Short-term borrowings Note 32 1831796712.90 1800136227.43
Borrowings from central bank
Borrowings from banks and other financial institutions
Financial liabilities held for trading
Derivative financial liabilities Note 34 42227.58
Notes payable Note 35 2259312216.46 1777053969.91
Accounts payable Note 36 1819315537.05 1735184321.70
Advances from customers
Contract liabilities Note 38 656266656.92 746778983.64
Financial assets sold for repurchase
Deposits from customers and interbank
Customer brokerage deposits
Securities underwriting brokerage deposits
Employee benefits payable Note 39 290464932.10 392494934.53
Taxes payable Note 40 212820799.37 194688876.58
Other payables Note 41 1437537640.70 256349893.68
Including: Interest payable
Dividends payable 1200340002.04 405000.00
Handling charges and commissions payable
Dividend payable for reinsurance
Liabilities held for sale
Non-current liabilities due within one year Note 43 234060518.78 281057349.33
Other current liabilities Note 44 46050129.71 79369933.52
Total Current Liabilities 8787667371.57 7263114490.32
Non-current Liabilities:
Insurance contract reserves
Long-term borrowings Note 45 1957357123.82 1918679223.83
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities Note 47 482287.52 1012966.64
Long-term payables Note 48 23457549.63 10500000.00
Long-term employee benefits payable Note 49 7474640.65
Estimated liabilities Note 50
Deferred income Note 51 345546673.63 367624988.38
Deferred income tax liabilities Note 29
Other non-current liabilities
Total Non-current Liabilities 2326843634.60 2305291819.50
Total Liabilities 11114511006.17 9568406309.82
Owners' Equity (Shareholders' Equity):
Paid-in capital (or stock) Note 53 2804241650.00 2804241650.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserves Note 55 33749867.59 33749867.59
Less: Treasury stock Note 56 39999676.57
Other comprehensive income Note 57 -258986565.20 -159220172.21
Special reserves Note 58 6174999.62 4992619.68
Surplus reserves Note 59 1379865682.01 1379865682.01
General risk reserves
Undistributed profits Note 60 11745868472.68 12283940768.49
Total Owners' Equity (or Shareholders' Equity)
15670914430.13 16347570415.56
Attributable to the Parent Company
Minority stockholder's interest
Total Owners' Equity (or Shareholders' Equity) 15670914430.13 16347570415.56
Total Liabilities and Owners' Equity (or Shareholders'
26785425436.30 25915976725.38
Equity)
Head of the Company: Wang Aijun Head of Accounting: Wang Lihong Head of the Accounting Institution: Wang Ailing
Parent Company’s Balance Sheet
June 30 2026
Prepared by: MeiHua Holdings Group Co. Ltd.Unit: Yuan Currency: RMB
Items Notes June 30 2026 December 31 2025
Current Assets:
Monetary assets 1340182231.79 1748050527.78
Financial assets held for trading 767140235.96 100005361.11
Derivative financial assets
Notes receivable 36626560.85 105165138.59
Accounts receivable Note 1 260274248.38 240104582.30
Receivables Financing 21483014.85 12103099.96
Prepaid accounts 786926616.09 450465635.15
Other receivables Note 2 1350291213.36 1311253600.04
Including: Interest receivable
Dividend receivable 900000000.00 850000000.00
Inventories 132033602.64 55550241.64
Among them: Data resources
Contract assets
Assets held for sale
Non-current assets due within one year 457674680.08 33099564.60
Other current assets 119828877.62 75941868.76
Total Current Assets 5272461281.62 4131739619.93
Non-current Assets:
Debt investments
Other debt investments
Long-term receivables 862806893.05 811519697.93
Long-term equity investments Note 3 8069915728.14 8069915728.14
Investments in other equity instruments 157000000.00 157000000.00
Other non-current financial assets
Investment properties
Fixed assets 241257846.50 243075825.89
Construction in progress 7781006.36 10035634.61
Productive biological assets
Oil and gas assets
Right-of-use assets 1269652.93 2474935.75
Intangible assets 32297799.38 28405655.84
Among them: Data resources
Development expenditure
Among them: Data resources
Goodwill
Long-term prepaid expenses 6712185.33 7013493.09
Deferred income tax assets 31272046.34 30483502.04
Other non-current assets 51319861.10 504985170.13
Total Non-current Assets 9461633019.13 9864909643.42
Total Assets 14734094300.75 13996649263.35
Current Liabilities:
Short-term borrowings 445123611.12 446161713.00
Financial liabilities held for trading
Derivative financial liabilities
Notes payable 3178864658.31 2768836932.16
Accounts payable 1521703170.03 1653949501.23
Advances from customers
Contract liabilities 350603380.53 484101924.45
Employee benefits payable 135136091.70 189707400.94
Taxes payable 35859035.30 41369234.14
Other payables 1600501230.50 93696559.66
Including: Interest payable
Dividends payable 1200340002.04 405000.00
Liabilities held for sale
Non-current liabilities due within one year 78775571.06 242728429.22
Other current liabilities 64187447.96 155747059.16
Total Current Liabilities 7410754196.51 6076298753.96
Non-current Liabilities:
Long-term borrowings 782814000.00 620700000.00
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities 261433.79 331053.08
Long-term payables 195270525.31
Long-term employee benefits payable
Estimated liabilities
Deferred income
Deferred income tax liabilities
Other non-current liabilities
Total Non-current Liabilities 783075433.79 816301578.39
Total Liabilities 8193829630.30 6892600332.35
Owners' Equity (Shareholders' Equity):
Paid-in capital (or stock) 2804241650.00 2804241650.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserves
Minus:Treasury stock 39999676.57
Other comprehensive income
Special reserves
Surplus reserves 1379865682.01 1379865682.01
Undistributed profits 2396157015.01 2919941598.99
Total Owners' Equity (or Shareholders' Equity) 6540264670.45 7104048931.00
Total Liabilities and Owners' Equity (or Shareholders'
14734094300.75 13996649263.35
Equity)
Head of the Company: Wang Aijun Head of Accounting: Wang Lihong Head of the Accounting Institution: Wang Ailing
Consolidated Income Statement
January to June 2026
Unit: Yuan Currency: RMB
Items Notes 2026 Semi-annual 2025 Semi-annual
I. Total Operating Revenue 12235095339.54 12280450603.53
Including: Operating revenue Note 61 12235095339.54 12280450603.53
Interest revenue
Earned premiums
Handling charges and commission revenue
II. Total Operating Costs 11604845391.33 10368912543.02
Including: Operating Costs Note 61 10653093825.19 9433353240.09
Interest Expenses
Handling charges and commission expenses
Surrender value
Net claim paid
Net provision of insurance reserve
Policy dividends paid
Reinsurance expenses
Taxes and surcharges Note 62 109283193.92 119066571.04
Sales expenses Note 63 176534959.81 167760792.02
Administrative expenses Note 64 424785142.26 469433561.57
Research and development expenses Note 65 187548443.45 199958697.93
Financing expenses Note 66 53599826.70 -20660319.63
Including: Interest expenses 20836234.31 27955159.53
Interest revenue 20897261.18 26389977.12
Plus: Other revenues Note 67 132481579.46 148546316.33
Investment gains ("-" for loss) Note 68 57912082.18 29250766.79
Including: Investment gains from associates and joint
-2122489.41 -923353.98
ventures
Gains from derecognition of financial assets
measured at amortized cost ("-" for loss)
Exchange gains ("-" for loss)
Net exposure hedging gains (Loss indicated by "-")
Gains from changes in fair value ("-" for loss) Note 70 21336805.37 16016844.67
Credit impairment losses ("-" for loss) Note 71 -4068410.89 -154305.79
Asset impairment losses ("-" for loss) Note 72 -29797994.41 -9236606.64
Asset disposal gains ("-" for loss) Note 73 10663776.45 438552.05
III. Operating Profit ("-" for loss) 818777786.37 2096399627.92
Plus: Non-operating revenue Note 74 22347099.23 3157136.41
Minus: Non-operating expenses Note 75 10722111.16 10385914.08
IV. Total Profit ("-" for total loss) 830402774.44 2089170850.25
Minus: Income tax expenses Note 76 168540068.21 321220733.36
V. Net Profit ("-" for net loss) 661862706.23 1767950116.89
(I) Classified by Operating Continuity
1. Net profit from continuing operations ("-" for net loss) 661862706.23 1767950116.89
2. Net profit from discontinued operations ("-" for net
loss)
(II) Classified by Ownership
1.Net profit attributable to shareholders of the Parent
661862706.23 1767950116.89
Company ("-" for net loss)
2.Profit or loss attributable to minority shareholders ("-"
for net loss)
VI. Net After-tax Amount of Other Comprehensive Income -99766392.99 -98666362.69
(I) Net After-tax Amount of Other Comprehensive Income
-99766392.99 -98666362.69
Attributable to Owners of the Parent Company
1. Other comprehensive income not reclassified to profit
-54657870.00 -96695685.50
or loss
(1) Changes in the defined benefit plan after remeasurement
(2) Other comprehensive income under Equity Method that
cannot be reclassified to profit or loss
(3) Changes in fair value of other equity instrument
-54657870.00 -96695685.50
investments
(4) Changes in fair value due to enterprise's own credit risks
2. Other comprehensive income to be reclassified to profit
-45108522.99 -1970677.19
or loss
(1) Other comprehensive income under Equity Method that can
be reclassified to profit or loss
(2) Changes in fair value of other debt investments
(3) Amount of financial assets reclassified to other
comprehensive income
(4) Credit impairment reserves other debt investments
(5) Cash flow hedge reserve
(6) Converted difference in foreign currency statements -45108522.99 -1970677.19
(7) Others
(II) Net After-tax Amount of Other Comprehensive Income
Attributable to Minority Shareholders
VII. Total Comprehensive Income 562096313.24 1669283754.20
(I) Total Comprehensive Income Attributable to Owners of
562096313.24 1669283754.20
the Parent Company
(II) Total Comprehensive Income Attributable to Minority
Shareholders
VIII. Earnings per Share:
(I) Basic Earnings per Share (Yuan/share) 0.24 0.62
(II) Diluted Earnings per Share (Yuan/share) 0.24 0.62
For the current period in cases of merger of enterprises under the same control the net profit realized by
the merged entity prior to the merger is: RMB 0 yuan and the net profit realized by the merged entity in
the previous period is: RMB 0 yuan.Head of the Company: Wang Aijun Head of Accounting: Wang Lihong Head of the Accounting Institution: Wang Ailing
Parent Company’s Income Statement
January to June 2026
Unit: Yuan Currency: RMB
Items Notes 2026 Semi-annual 2025 Semi-annual
I. Operating Revenue Note 4 7981256202.95 8400691318.67
Minus: Operating costs Note 4 7662390660.28 7997162336.78
Taxes and surcharges 11106143.32 12708875.50
Sales expenses 94765831.44 110995243.01
Administrative expenses 114774789.58 215005065.00
Research and development Expenses - 0
Financing expenses -1177799.68 -3879142.16
Including: Interest expenses 3409373.59 2082969.25
Interest revenue 7268714.10 8444823.38
Plus: Other revenues 97035973.84 104051615.94
Investment gains ("-" for loss) Note 5 510425285.71 17655487.70
Including: Investment gains from associates and joint
0
ventures
Gains from derecognition of financial assets
0
measured at amortized cost ("-" for loss)
Net exposure hedging gains ("-" for loss) 0
Gains from changes in fair value ("-" for loss) 4986763.89 657054.80
Credit impairment losses ("-" for loss) -44352.51 -4656505.57
Asset impairment losses ("-" for loss) -3004731.85 0
Asset disposal gains ("-" for loss) 284640.03 5092.90
II. Operating Profit ("-" for loss) 709080157.12 186411686.31
Plus: Non-operating revenue 270868.42 657896.77
Minus: Non-operating expenses 43729.73 461196.32
III. Total Profit ("-" for total loss) 709307295.81 186608386.76
Minus: Income tax expenses 33156877.75 27714210.23
IV. Net Profit ("-" for total loss) 676150418.06 158894176.53
(I) Net profit from continuing operations ("-" for net loss) 676150418.06 158894176.53
(II) Net profit from discontinued operations ("-" for net
loss)
V. Net After-tax Amount of Other Comprehensive Income
(I) Other comprehensive income that cannot reclassified to
profit or loss
1. Changes in the defined benefit plan after
remeasurement
2. Other comprehensive income under Equity Method
that cannot be reclassified to profit or loss
3. Changes in fair value of other equity instrument
investments
4. Changes in fair value due to enterprise's own credit
risks
(II) Other comprehensive income to be reclassified to
profit or loss
1. Other comprehensive income under Equity Method
that can be reclassified to profit or loss
2. Changes in fair value of other debt investments
3. Amount of financial assets reclassified to other
comprehensive income
4. Credit impairment reserves for other debt investments
5. Cash flow hedge reserve
6. Converted difference in foreign currency statements
7. Others
VI. Total Comprehensive Income 676150418.06 158894176.53
VII. Earnings per Share:
(I) Basic Earnings per Share (Yuan/share)
(II) Diluted Earnings per Share (Yuan/share)
Head of the Company: Wang Aijun Head of Accounting: Wang Lihong Head of the Accounting Institution: Wang Ailing
Consolidated Cash Flow Statement
January to June 2026
Unit: Yuan Currency: RMB
Items Notes 2026 Semi-annual 2025 Semi-annual
I. Cash Flow from Operating Activities :
Cash received from sales of goods or rendering of
13052263813.38 13004397294.89
services
Net increase in customer bank deposits and due to
banks and other financial institutions
Net increase in borrowings from the central bank
Net increase in funds borrowed from other financial
institutions
Cash received from premiums on original insurance
contracts
Net cash received from reinsurance business
Net increase in deposits and investments from insurers
Cash received from interest handling charges and
commissions
Net increase in borrowed funds
Net increase in repurchase business funds
Net cash received from securities trading brokerage
business
Refunds of taxes received 297353645.61 255379073.62
Other cash received related to operating activities Note 78 152411464.55 191153397.33
Subtotal cash inflows from operating activities 13502028923.54 13450929765.84
Cash paid for goods and services 11282077575.21 9083489211.25
Net increase in loans and advances to customers
Net increase in placements with central bank and due
to banks
Cash paid for claims for original insurance contracts
Net increase in funds lent
Cash paid for interest handling charges and
commissions
Cash paid for policy dividends
Cash paid to and on behalf of employees 1036586807.14 904015836.36
Various taxes paid 313267323.28 597189446.61
Other cash paid related to operating activities Note 78 480957133.89 553444050.99
Subtotal cash outflows from operating activities 13112888839.52 11138138545.21
Net cash flow from operating activities 389140084.02 2312791220.63
II. Cash Flow from Investing Activities :
Cash received from recovery of investments 83631190.33 73892375.14
Cash received from investment income 29819638.74 16498979.00
Net cash received from disposal of fixed assets
11498534.54 1245921.80
intangible assets and other long-term assets
Net cash received from disposal of subsidiaries and
322188026.40
other business units
Other cash received related to investing activities Note 78
Subtotal cash inflows from investing activities 447137390.01 91637275.94
Cash paid for acquisition and construction of fixed
1134643863.42 1087107997.28
assets intangible assets and other long-term assets
Cash paid for investments 1084758939.83 1944967826.40
Net increase in pledge loans
Net cash paid for acquisition of subsidiaries and other
business units
Other cash paid related to investing activities Note 78 2883915.81 2859048.14
Subtotal cash outflows from investing activities 2222286719.06 3034934871.82
Net cash flow from investing activities -1775149329.05 -2943297595.88
III. Cash Flow from Financing Activities :
Cash received from capital injections
Including: cash received from minority shareholders'
investments of subsidiaries
Cash received from borrowings 1983278909.21 2874965205.64
Other cash received related to financing activities Note 78 277489110.71 428515211.85
Subtotal cash inflows from financing activities 2260768019.92 3303480417.49
Cash paid for debt repayment 1876810000.01 2629070000.00
Cash paid for distribution of dividends profits or
25564775.53 1228810522.76
interest repayment
Including: Dividends or profits paid to minority
shareholders by subsidiaries
Other cash paid related to financing activities Note 78 335766648.90 255748337.46
Subtotal cash outflows from financing activities 2238141424.44 4113628860.22
Net cash flow from financing activities 22626595.48 -810148442.73
IV. Effect of Exchange Rate Changes on Cash and
-61143692.42 31539177.23
Cash Equivalents
V. Net Increase in Cash and Cash Equivalents -1424526341.97 -1409115640.75
Plus: Beginning balance of cash and cash equivalents 4006435846.79 4131859602.14
VI. Ending Balance of Cash and Cash Equivalents 2581909504.82 2722743961.39
Head of the Company: Wang Aijun Head of Accounting: Wang Lihong Head of the Accounting Institution: Wang Ailing
Parent Company’s Cash Flow Statement
January to June 2026
Unit: Yuan Currency: RMB
Items Notes 2026 Semi-annual 2025 Semi-annual
I. Cash Flow from Operating Activities:
Cash received from sales of goods or rendering of services 8179146886.37 8719362545.43
Refunds of taxes received 6894786.19 22441423.95
Other cash received related to operating activities 245214884.22 889078511.59
Subtotal cash inflows from operating activities 8431256556.78 9630882480.97
Cash paid for goods and services 8066466282.52 7841211006.39
Cash paid to and on behalf of employees 163827374.05 134053736.81
Various taxes paid 80748769.48 77552382.57
Other cash paid related to operating activities 196508978.02 852281310.95
Subtotal cash outflows from operating activities 8507551404.07 8905098436.72
Net cash flow from operating activities -76294847.29 725784044.25
II. Cash Flow from Investing Activities:
Cash received from recovery of investments 50000000.00
Cash received from investment income 458227169.21 818290843.26
Net cash received from disposal of fixed assets intangible
1223500.43 5419425.56
assets and other long-term assets
Net cash received from disposal of subsidiaries and other
business units
Other cash received related to investing activities
Subtotal cash inflows from investing activities 459450669.64 873710268.82
Cash paid for acquisition and construction of fixed assets
22250052.36 28884182.60
intangible assets and other long-term assets
Cash paid for investments 673255722.23 50000000.00
Net cash paid for acquisition of subsidiaries and other
business units
Other cash paid related to investing activities
Subtotal cash outflows from investing activities 695505774.59 78884182.60
Net cash flow from investing activities -236055104.95 794826086.22
III. Cash Flow from Financing Activities:
Cash received from capital injections
Cash received from borrowings 224454000.00 443000000.00
Other cash received related to financing activities 752788597.34 1517112013.75
Subtotal cash inflows from financing activities 977242597.34 1960112013.75
Cash paid for debt repayment 226300000.00 1152560000.00
Cash paid for distribution of dividends profits or interest
9582116.25 1212907428.12
repayment
Other cash paid related to financing activities 852497617.30 1263584662.20
Subtotal cash outflows from financing activities 1088379733.55 3629052090.32
Subtotal cash outflows from financing activities -111137136.21 -1668940076.57
IV. Effect of Exchange Rate Changes on Cash and Cash
-850066.78 644850.65
Equivalents
V. Net Increase in Cash and Cash Equivalents -424337155.23 -147685095.45
Plus: Beginning balance of cash and cash equivalents 1469012647.25 1115336416.01
VI. Ending Balance of Cash and Cash Equivalents 1044675492.02 967651320.56
Head of the Company: Wang Aijun Head of Accounting: Wang Lihong Head of the Accounting Institution: Wang Ailing
Consolidated Statement of Changes in Owner's Equity
January to June 2026
Unit: Yuan Currency: RMB
2026 Semi-annual
Equity Attributable to Owners of the Parent Company
Equity of
Items Total Owners’
Minus: Other General Minority
Paid-in Capital Other Equity Instruments Capital Special Undistributed
Equity
Preferred Perpetual Treasury Comprehensive Surplus Reserve Risk Others Subtotal
Shareholders
(or stock) Others Reserve Reserve Profits
Shares Bonds Stock Income Reserve
I. Balance at End of Last Year 2804241650.00 33749867.59 -159220172.21 4992619.68 1379865682.01 12283940768.49 16347570415.56 16347570415.56
Plus: Changes in accounting policies
Correction of prior period
errors
Others
II. Balance at Beginning of the
2804241650.00 33749867.59 -159220172.21 4992619.68 1379865682.01 12283940768.49 16347570415.56 16347570415.56
Current Year
III. The Amount Changes during the
39999676.57 -99766392.99 1182379.94 -538072295.81 -676655985.43 -676655985.43
Current Period ("-" for decrease)
(I) Total Comprehensive Income -99766392.99 661862706.23 562096313.24 - 562096313.24
(II) Owners' Contributions and
39999676.57 -39999676.57 -39999676.57
Decrease of Capital
1．Ordinary shares contributed by
owners
2．Capital contributed by holders of
other equity instruments
3．Amount of share-based
payments recognized in owners'
equity
4．Others 39999676.57 -39999676.57 -39999676.57
(III) Profit Distribution -1199935002.04 -1199935002.04 -1199935002.04
1．Withdrawal of surplus reserve
2．Withdrawal of General Risk
Reserve
3．Distribution to Owners (or
-1199935002.04 -1199935002.04 -1199935002.04
Shareholders)
4．Others
(IV) Internal Transfer of Owners'
Equity
1．Capital (or stock) increased by
capital reserve transfer
2．Capital (or stock) increased by
surplus reserve transfer
3．Transfer of surplus reserve to
offset losses
4．Transfer of changes in defined
benefit plans to retained earnings
5．Transfer of other comprehensive
income to retained earnings
6．Others
(V) Special Reserves 1182379.94 1182379.94 1182379.94
1. Withdrawal during the Current
26082428.67 26082428.67 26082428.67
Period
2．Usage during the Current Period -24900048.73 -24900048.73 -24900048.73
(VI) Others
IV. Balance at End of the Current
2804241650.00 33749867.59 39999676.57 -258986565.20 6174999.62 1379865682.01 11745868472.68 15670914430.13 15670914430.13
Period
2025 Semi-annual
Eq
Equity Attributable to Owners of the Parent Company uit
y
Other Equity of
Instruments Ge Mi
Pe ne no
Items Pr rp ral rit
ef Other Ot Total Owners’ EquityPaid-in Capital (or et Minus: Treasury Ri
y
err Ot Capital Reserve Comprehensive Special Reserve Surplus Reserve Undistributed Profits he Subtotal
ua Stock sk Shstock)
ed he Income rs
l Re ar
Sh rs
Bo ser
eh
ar
nd ve ol
es
s de
rs
I. Balance at End of Last Year 2852788750.00 263154867.05 287771455.80 -55004961.46 4743615.67 1426394375.00 10370640110.47 14574945300.93 14574945300.93
Plus: Changes in accounting policies
Correction of prior period errors
Others
II. Balance at Beginning of the Current
2852788750.00 263154867.05 287771455.80 -55004961.46 4743615.67 1426394375.00 10370640110.47 14574945300.93 14574945300.93
Year
III. The Amount of Changes during the 64294882.98 -98666362.69 187867.36 567962791.60 405189413.29 405189413.29
Current Period ("-" for decrease)
(I) Total Comprehensive Income -98666362.69 1767950116.89 1669283754.20 1669283754.20
(II) Owners' Contributions and 64294882.98 -64294882.98 -64294882.98
Decrease of Capital
1．Ordinary shares contributed by
owners
2．Capital contributed by holders of
other equity instruments
3．Amount of share-based payments
recognized in owners' equity
4．Others 64294882.98 -64294882.98 -64294882.98
(III) Profit Distribution -1199987325.29 -1199987325.29 -1199987325.29
1．Withdrawal of surplus reserve
2．Withdrawal of General Risk
Reserve
3．Distribution to Owners (or
-1199987325.29 -1199987325.29 -1199987325.29
Shareholders)
4．Others
(IV) Internal Transfer of Owners'
Equity
1．Capital (or stock) increased by
capital reserve transfer
2．Capital (or stock) increased by
surplus reserve transfer
3．Transfer of surplus reserve to offset
losses
4．Transfer of changes in defined
benefit plans to retained earnings
5．Transfer of other comprehensive
income to retained earnings
6．Others
(V) Special Reserves 187867.36 187867.36 187867.36
1. Withdrawal during the Current
30484436.74 30484436.74 30484436.74
Period
2．Usage during the Current Period -30296569.38 -30296569.38 -30296569.38
(VI) Others
IV. Balance at End of the Current 2852788750.00 263154867.05 352066338.78 -153671324.15 4931483.03 1426394375.00 10938602902.07 14980134714.22 14980134714.22
Period
Head of the Company: Wang Aijun Head of Accounting: Wang Lihong Head of the Accounting Institution: Wang Ailing
Parent Company’s Statement of Changes in Owner’s Equity
January to June 2026
Unit: Yuan Currency: RMB
2026 Semi-annual
Other Equity
Instruments
Pe
rpe Other
Items Paid-in Capital (or Prefe tua Ot Capital Minus: Treasury Compreh Special Undistributed Total Owners’
stock) rred Surplus Reserve
l her Reserve Stock
ensive Reserve Profits Equity
Shar Income
Bo s
es
nd
s
I. Balance at End of Last Year 2804241650.00 1379865682.01 2919941598.99 7104048931.00
Plus: Changes in accounting policies
Correction of prior period errors
Others
II. Balance at Beginning of the Current Year 2804241650.00 1379865682.01 2919941598.99 7104048931.00
III. The Amount of Changes during the Current 39999676.57 -523784583.98 -563784260.55
Period ("-" for decrease)
(I) Total Comprehensive Income 676150418.06 676150418.06
(II) Owners' Contributions and Decrease of 39999676.57 -39999676.57
Capital
1．Ordinary shares contributed by owners
2．Capital contributed by holders of other equity
instruments
3．Amount of share-based payments recognized
in owners' equity
4．Others 39999676.57 -39999676.57
(III) Profit Distribution -1199935002.04 -1199935002.04
1．Withdrawal of surplus reserve
2．Distribution to Owners (or Shareholders) -1199935002.04 -1199935002.04
3．Others -
(IV) Internal Transfer of Owners' Equity
1．Capital (or stock) increased by capital reserve
transfer
2．Capital (or stock) increased by surplus
reserve transfer
3．Transfer of surplus reserve to offset losses
4．Transfer of changes in defined benefit plans
to retained earnings
5．Transfer of other comprehensive income to
retained earnings
6．Others
(V) Special Reserves
1．Withdrawal during the Current Period
2．Usage during the Current Period
(VI) Others
IV. Balance at End of the Current Period 2804241650.00 39999676.57 1379865682.01 2396157015.01 6540264670.45
2025 Semi-annual
Other Equity
Instruments
O
Per Special
Items Paid-in Capital (or tPreferr pet Minus:
Other
stock) h Capital Reserve Comprehensi
Undistributed Total Owners’
Reserv Surplus Reserve
ed ual Treasury Stock ve Income Profits Equity
e e
Shares Bo
r
nds
s
I. Balance at End of Last Year 2852788750.00 229404999.46 287771455.80 1426394375.00 2611601565.13 6832418233.79
Plus: Changes in accounting policies
Correction of prior period errors
Others
II. Balance at Beginning of the Current Year 2852788750.00 229404999.46 287771455.80 1426394375.00 2611601565.13 6832418233.79
III. Amount of Changes during the Current Period 64294882.98 -1041093148.76 -1105388031.74
("-" for decrease)
(I) Total Comprehensive Income 158894176.53 158894176.53
(II) Owners' Contributions and Decrease of Capital 64294882.98 -64294882.98
1．Ordinary shares contributed by owners
2．Capital contributed by holders of other equity
instruments
3．Amount of share-based payments recognized in
owners' equity
4．Others 64294882.98 -64294882.98
(III) Profit Distribution -1199987325.29 -1199987325.29
1．Withdrawal of surplus reserve
2．Distribution to Owners (or Shareholders) -1199987325.29 -1199987325.29
3．Others
(IV) Internal Transfer of Owners' Equity
1．Capital (or stock) increased by capital reserve
transfer
2． Capital (or stock) increased by surplus reserve
transfer
3．Transfer of surplus reserve to offset losses
4．Transfer of changes in defined benefit plans to
retained earnings
5．Transfer of other comprehensive income to
retained earnings
6．Others
(V) Special Reserves
1．Withdrawal during the Current Period
2．Usage during the Current Period
(VI) Others
IV. Balance at End of the Current Period 2852788750.00 229404999.46 352066338.78 1426394375.00 1570508416.37 5727030202.05
Head of the Company: Wang Aijun Head of Accounting: Wang Lihong Head of the Accounting Institution: Wang Ailing
III. Basic Information of the Company
1. Overview of the Company
√ Applicable □ Not Applicable
MeiHua Holdings Group Co. Ltd. (hereinafter referred to as "Company" or "The Company")
formerly known as Wuzhou Minovo Co. Ltd. (hereinafter referred to as "Wuzhou Minovo") was listed
on Shanghai Stock Exchange on February 17 1995 underwent a name change from Wuzhou Minovo
Co. Ltd. to its current name following the absorption and merger with the original MeiHua Holdings
Group Co. Ltd. (hereinafter referred to as "Original MeiHua Group") and completed the business
change registration on March 3 2011. The Company’s unified social credit code is
91540000219667563J.
The Original MeiHua Group formerly known as Hebei Meihua MSG Group Co. Ltd. was
established with investment from natural persons Meng Qingshan Yang Weiyong and Hu Jijun. It
obtained the Business License of Legal Entity No. 131081000002308 issued by the Hebei
Administration for Industry and Commerce on April 23 2002.Wuzhou Minovo was established as a stock corporation through fundraising following the issuance
of 30 million shares to the public on January 6 1995 with Chengdu Tibet Hotel Tibet Autonomous
Region Trust Investment Company and Tibet Xingzang Industrial Development Company as sponsors.It was officially registered in Lhasa Tibet Autonomous Region on February 9 1995 with a Business
License of Legal Entity number of 5400001000327 and a total share capital of 73 million shares. On
February 17 of the same year with the approval of the China Securities Regulatory Commission the
Company's public shares were listed for trading on the Shanghai Stock Exchange under the stock code
600873.
On August 12 1995 the Shareholders' Meeting of the Company approved the Dividend
Distribution Plan and implemented the 1994 Distribution Plan of granting 3 shares for every 10 shares
held to all shareholders on August 21 1995. Based on a foundation of 73 million shares a total of 21.9
million shares were distributed elevating the Company's total share capital to 94.9 million shares.On December 19 1996 the Company deliberated and approved the Rights Issue Plan at the
Extraordinary Shareholders' Meeting for the Year 1996 and implemented the rights issue plan of
granting 3 shares for every 10 shares to all shareholders on August 12 1997. Based on a foundation of
94.90 million shares a total of 13336603 shares (including 1436603 transfer right shares) were
distributed elevating the Company's total share capital to 108236603 shares.On February 16 2003 Shandong Wuzhou Investment Group Co. Ltd. and Weifang Bohai Industry
Co. Ltd. respectively entered into agreements with the Tibet Autonomous Region State-owned Assets
Management Company (whose shares were obtained through gratuitous transfer by the Tibet
Autonomous Region State-owned Assets Management Bureau) whereby Shandong Wuzhou Investment
Group Co. Ltd. acquired 27102445 shares of the Company's state-owned legal person shares from
Tibet Autonomous Region State-owned Assets Management Company representing 25.04% of the
Company's total share capital and became the Company's largest shareholder; Weifang Bohai Industry
Co. Ltd. acquired 21535555 shares accounting for 19.90% of the Company's total share capital. The
aforementioned equity transfer was formally approved by the State-owned Assets Supervision and
Administration Commission of the State Council through document "State-owned Assets Ownership
Letter [2003] No. 25" on May 29 2003. On August 11 2003 the Company entered into the Asset
Exchange Agreement with Shandong Wuzhou Investment Group Co. Ltd. and Shandong Wuzhou
Electric Co. Ltd. and executed a significant asset exchange. Following the completion of this exchange
the total share capital remained unchanged.On May 22 2006 the Company convened the "Shareholders Meeting Related to the Split-Share
Reform" where the Company's split-share reform plan was deliberated and approved. All non-tradable
shareholders of the Company granted 2.8 shares for every 10 shares to all tradable shareholders. The
Company completed the implementation of the aforementioned split-share reform plan on June 2 2006.On December 22 2010 with the approval of the China Securities Regulatory Commission through
the document ZJXK [2010] No. 1888 "Approval of Wuzhou Minovo Co. Ltd.'s Major Asset Sale and
Merger with MeiHua Holdings Group Co.Ltd. by Issuing New Shares" the Company issued
900000000 RMB ordinary shares to the Original MeiHua Group for the acquisition of all equity
enjoyed by its shareholders. On December 24 2010 BDO CHINA LI XIN DA HUA. Certified Public
Accountants CO. LTD. issued the document LXDHYZ [2010] No. 200 "Capital (Contribution)
Verification Report" for this change in the share capital. On December 31 2010 the Company obtained
the Certificate of Securities Change Registration Issued by the Shanghai Branch of China Securities
Depository and Clearing Co. Ltd. with the registered share capital for securities of 1008236603
shares.On March 28 2011 the Company approved the implementation of the capital reserve conversion to
share capital plan during the Annual Shareholders Meeting for the Year 2010. Based on a foundation of
1008236603 shares every 10 shares were converted into 16.861 shares leading to a total share capital
of 2708236603 shares post-conversion. On April 12 2011 the Company completed the share change
registration at the Shanghai Branch of China Securities Depository and Clearing Co. Ltd. with the
registered share capital for securities of 2708236603 shares.According to the resolutions of the Fifth Meeting of the Sixth Board of Directors on April 22 2011
the Fourteenth Meeting of the Sixth Board of Directors on February 22 2012 the 2011 Annual
Shareholders Meeting held on March 22 2012 and the provisions specified in the amended articles of
association along with the approval of the China Securities Regulatory Commission through the
document ZJXKZ [2012] No. 1262 "Approval of MeiHua Holdings Group Co. Ltd.'s Private Issuance
of Stocks" the Company agreed to privately issue up to 400 million RMB ordinary shares (A shares).On March 26 2013 the Company privately issued 399990000 RMB ordinary shares (A shares) to
specific investors resulting in a total share capital of 3108226603 shares after this issuance. On March
29 2013 the Company completed the registration and custody procedures at the Shanghai Branch of
China Securities Depository and Clearing Co. Ltd.According to the resolutions of the Fifteenth Meeting of the Eighth Board of Directors on May 30
2018 the Seventeenth Meeting of the Eighth Board of Directors on June 20 2018 and the annual
shareholders meeting held on June 20 2018 the Company established a stock incentive plan by offering
34534865 treasury shares at a price of 2.46 yuan per share. These shares were granted to a total of 109
incentive recipients including directors senior executives key management personnel and core
technical staff working for Meihua Bio with no change in the registered capital.According to the resolutions of the 22nd Meeting of the Eighth Board of Directors on December 7
2018 and the First Extraordinary Shareholders Meeting in 2018 the Company processed the cancellation
of 51565 subscribed shares that were relinquished. After the cancellation the total share capital of the
Company amounted to 3108175038 shares.According to the resolutions of the 28th Meeting of the Eighth Board of Directors in June 2019 and
the 2018 Annual Shareholders Meeting on June 24 2019 the Company repurchased 3885400 restricted
shares for cancellation due to the departure of incentive recipients and incomplete individual
performance assessments. After the cancellation the total share capital of the Company amounted to
3104289638 shares.
According to the resolutions of the Fourth Meeting of the Ninth Board of Directors on April 22
2020 and the 2019 Annual Shareholders Meeting on May 20 2020 the Company repurchased
4267790 restricted shares for cancellation due to the departure of incentive recipients and incomplete
individual performance assessments. After the cancellation the total share capital of the Company
amounted to 3100021848.00 shares.According to the resolutions of the Seventeenth Meeting of the Ninth Board of Directors on May 12
2021 and the 2020 Annual Shareholders Meeting on May 26 2021 the Company repurchased
1401920 restricted shares for cancellation due to the departure of incentive recipients and incomplete
individual performance assessments. After the cancellation the total share capital of the Company
amounted to 3098619928 shares.According to the resolutions of the 27th Meeting of the Ninth Board of Directors on December 15
2021 the Second Extraordinary Shareholders Meeting for the year 2021 on December 31 2021 and the
2021 Annual Shareholders Meeting on June 9 2022 the Company canceled a total of 56154481 shares
repurchased previously. After the cancellation the total share capital of the Company amounted to
3042465447 shares.
According to the resolutions of the Third Meeting of the Tenth Board of Directors on April 8 2023
and the Second Extraordinary Shareholders Meeting for 2023 held on April 28 2023 the "Proposal to
Change the Company's Registered Capital" was deliberated and approved. According to the "Proposal to
Repurchase the Company’s Shares through Centralized Bidding Transactions" deliberated and approved
at the 2021 Annual Shareholders Meeting the repurchased shares were exclusively used for cancellation
to reduce the Company's registered capital. The Company has completed the repurchase and has
physically repurchased 99039345 shares. After the cancellation of these shares the total share capital of
the Company will change from 3042465447 shares to 2943426102 shares.According to the resolutions passed at the 13th Meeting of the 10th Board of Directors held on
September 23 2024 and the 2024 Second Extraordinary Shareholders’ Meeting held on October 11
2024 the proposal to change the company’s registered capital was approved. Based on the relevant
resolution from the shareholders’ meeting the company will use 90637352 repurchased shares for
cancellation to reduce its registered capital. After the cancellation of these shares the company’s total
share capital will be reduced from 2943426102 shares to 2852788750 shares.According to the resolutions of the 23rd Meeting of the 10th Board of Directors on December 11
2025 and the Second Extraordinary Shareholders Meeting for 2025 held on December 29 2025 the
"Proposal to Change the Company's Registered Capital" was deliberated and approved. According to the
"Proposal to Repurchase the Company’s Shares through Centralized Bidding Transactions" deliberated
and approved at the Second Extraordinary Shareholders Meeting for 2024 the repurchased shares were
exclusively used for cancellation to reduce the Company's registered capital. The Company has
completed the repurchase and has physically repurchased 48547100 shares. After the cancellation of
these shares the total share capital of the Company will change from 2852788750 shares to
2804241650 shares.
After years of issuing bonus shares allotting new shares capitalizing retained earnings and issuing
additional shares as of June 30 2026 the company’s total share capital amounts to 2804241650
shares with a total share capital of 2804241650 yuan. The registered address is 158 Jinzhu West Road
Sunshine New City Building 11 Room 5 Lhasa City. The actual controller is Meng Qingshan.The company is in the food manufacturing industry with its main products including food flavor
enhancement products (such as monosodium glutamate disodium 5’-nucleotides xanthan gum food
grade etc.) animal nutrition amino acids (such as lysine threonine germinal amino acids valine etc.)
human medical amino acids (such as glutamine proline etc.) and other products (such as xanthan gum
petroleum grade fertilizers etc.).IV. Preparation Basis for Financial Statements
1. Preparation Basis
The financial statements of the Company are prepared on a going concern basis. Based on actual
transactions and events the Company recognizes and measures them in accordance with the Accounting
Standards for Business Enterprises—Basic Standards issued by the Ministry of Finance specific
Accounting Standards for Business Enterprises application guidelines for the Accounting Standards for
Business Enterprises interpretations of the Accounting Standards for Business Enterprises and other
relevant provisions (hereinafter referred to as "The Accounting Standards for Business Enterprises") and
prepares its financial statements on this basis. In addition the Company discloses relevant financial
information in accordance with the Rules for the Information Disclosure and Compilation by Companies
Offering Securities to the Public No.15—General Provisions on Financial Reports (2023 revision) issued
by the China Securities Regulatory Commission.
2. Going Concern
?Applicable □ Not Applicable
The Company has assessed its ability to continue as a going concern for the 12 months from the end
of the reporting period and has not identified any matters that may affect its ability to continue as a
going concern. Therefore it is reasonable for the Company to prepare the financial statements on a
going concern basis.V. Significant Accounting Policies and Estimates
Specific accounting policies and estimates indicate:
?Applicable □ Not Applicable
1. Statement of Compliance with the Accounting Standards for Business Enterprises
The financial statements prepared by the company comply with the requirements of the Accounting
Standards for Enterprises and truthfully and completely reflect the company’s financial position
operating results changes in shareholders’ equity cash flow and other relevant information for the
reporting period.
2. Accounting Period
The Company’s fiscal year runs from January 1 to December 31 of the Gregorian calendar.
3. Operating Cycle
?Applicable □ Not Applicable
The Company’s normal operating cycle is one year.
4. Functional Currency
The Company’s functional currency is the Renminbi. Overseas subsidiaries and branches use the
currency of the primary economic environment in which they operate as their functional currency.
5. Determination Method and Selection Basis for Materiality Standards
?Applicable □ Not Applicable
Items Materiality Standards
The amount of individual provision for bad debts
Accounts receivable with material individual provision accounts for more than 10% of the total amount of
for bad debts various accounts receivable with provision for bad debts
and exceeds RMB 20 million.Accounts receivable with provision for bad debts and The amount of recovery or reversal of individual
with material amounts recovered or reversed during the provision for bad debts accounts for more than 10% of
Current Period and the total account receivable and exceeds RMB 20 million.The write-off amount of individual account receivable
accounts for more than 10% of the total provision for bad
Significant write-offs of accounts receivable
debts for various accounts receivable and exceeds RMB
20 million.
Individual advance payments accounts payable contract
Advance payments accounts payable contract liabilities
liabilities and other account payable amount to more than
and other accounts payable with material amounts
10% of the total amount of such accounts and exceed
outstanding for over one year
RMB 20 million.The budget amount for individual construction in
Material construction in progress
progress project exceeds RMB 100 million.Individual investing activities account for more than 10%
Material cash flows related to investing activities of the total cash inflows or outflows received or paid for
the investing activities and exceed RMB 200 million.The book value of long-term equity investments in an
individual invested party accounts for more than 5% of
the consolidated net assets and exceeds RMB 100 million
Material joint ventures
or the investment gains or losses recognized under the
equity method for long-term equity investments account
for more than 10% of the consolidated net profit.Any single type of estimated liability accounts for more
Material contingent matters than 10% of the total estimated liabilities and exceeds
RMB 100 million.
6. Accounting Treatment Method for Merger of Enterprises under the Same Control and Different
Controls
?Applicable □ Not Applicable
(1) Enterprise merger under the same control
Assets and liabilities acquired by the Company in a business combination are measured at the
acquisition date at the book value of the acquiree as reported in the consolidated financial statements of
the ultimate controlling party. Where the acquiree’s accounting policies and reporting periods differ
from those of the Company prior to the business combination the accounting policies and reporting
periods are harmonized based on the principle of materiality; that is the book value of the acquiree’s
assets and liabilities are adjusted in accordance with the Company’s accounting policies and reporting
periods. If there is a difference between the book value of the net assets acquired by the Company in a
business combination and the book value of the consideration paid the Company first adjusts capital
surplus (share premium or share capital premium). If the balance of capital surplus (share premium or
share capital premium) is insufficient to offset the difference the Company then offsets retained
earnings and undistributed profits in that order.For the accounting treatment of business combinations under the same control achieved through
step transactions see Section 5.7(5) of this chapter.
(2) Enterprise merger not under the same control
The Company measures the identifiable assets and liabilities of the acquiree acquired in a business
combination at their fair values as of the acquisition date. Where the acquiree’s accounting policies and
reporting periods differ from those of the Company prior to the business combination the Company
aligns the accounting policies and reporting periods based on the principle of materiality; that is the
book value of the acquiree’s assets and liabilities are adjusted in accordance with the Company’s
accounting policies and reporting periods. The excess of the Company’s acquisition cost as of the
acquisition date over the fair value of the acquiree’s identifiable assets and liabilities acquired in the
business combination is recognized as goodwill; If the cost of the business combination is less than the
fair value of the acquiree’s identifiable assets and liabilities acquired in the business combination the
Company first reviews the cost of the business combination and the fair value of the acquiree’s
identifiable assets and liabilities acquired in the business combination. If after such review the cost of
the business combination remains less than the fair value of the acquiree’s identifiable assets and
liabilities acquired the difference is recognized in profit or loss for the period of the business
combination.For the accounting treatment of business combinations not under the same control using the step-
by-step method see Section 5.7(5) of this chapter.
(3) Treatment of transaction costs in enterprise merger
Intermediary expenses such as audit legal services evaluation consultation and other related
administrative expenses incurred to effect the enterprise merger are recognized in the profit and loss for
the current period at the time of occurrence. Transaction costs for issuing equity securities or debt
securities as consideration for the enterprise merger are included in the initial recognition amount of the
equity securities or debt securities.
7. Determination Criteria for Controls and Preparation Method for Consolidated Financial
Statements
?Applicable □ Not Applicable
(1) Criteria for Determining Control and Defining the Scope of Consolidation
Control refers to the Company’s power over an investee its entitlement to variable returns based on
its involvement in the investee’s activities and its ability to use that power to influence the amount of
those returns. The definition of control comprises three fundamental elements: first the investor
possesses power over the investee; second the investor receives variable returns based on its
involvement in the investee’s activities; and third the investor has the ability to use its power over the
investee to affect the amount of those returns. When the Company’s investment in the investee meets
these three criteria it indicates that the Company is able to control the investee.The scope of consolidation in consolidated financial statements is determined on the basis of
control and includes not only subsidiaries identified based on voting rights (or similar rights) alone or in
conjunction with other arrangements but also structured entities determined on the basis of one or more
contractual arrangements.A subsidiary refers to an entity controlled by the Company (including enterprises separable parts of
investees and structured entities controlled by the enterprise etc.). A structured entity refers to an entity
designed such that voting rights or similar rights are not the determining factor in identifying its
controlling party (Note: sometimes referred to as a special-purpose entity).
(2) Methods for Preparing Consolidated Financial Statements
The Company prepares the consolidated financial statements based on the financial statements of
the Company and its subsidiaries and other relevant information.When preparing the consolidated financial statements the Company views the enterprise group as a
single accounting entity and reflects the overall financial position operating results and cash flows of the
enterprise group in accordance with the recognition measurement and reporting requirements of
relevant Accounting Standards for Business Enterprises and the unified accounting policies and
accounting periods.* Consolidate items such as assets liabilities equity revenue expenses and cash flows of the
parent company and its subsidiaries.* Eliminate the parent company’s long-term equity investment in the subsidiary against the parent
company’s share of the subsidiary’s equity.* Offset the effects of internal transactions between the parent company and its subsidiaries as
well as among the subsidiaries themselves. If internal transactions indicate that related assets have
incurred impairment losses such losses shall be recognized in full.* Adjust special transaction items from the perspective of the corporate group.
(3) Treatment of Changes in Subsidiaries During the Reporting Period
* Addition of Subsidiaries or Businesses
A. Subsidiaries or businesses added through a business combination under the same control
(a) When preparing the consolidated balance sheet adjust the opening balances of the consolidated
balance sheet and make corresponding adjustments to the relevant items in the comparative financial
statements treating the combined reporting entity as if it had existed continuously from the date the
ultimate controlling party first obtained control.(b) When preparing the consolidated income statement the revenue expenses and profit of the
subsidiary and business from the beginning of the current period to the end of the reporting period shall
be included in the consolidated income statement and the relevant items in the comparative financial
statements shall be adjusted accordingly treating the combined reporting entity as if it had existed
continuously from the date the ultimate controlling party assumed control.(c) When preparing the consolidated statement of cash flows include the cash flows of the
subsidiary and the business from the beginning of the reporting period to the end of the reporting period
in the consolidated statement of cash flows and adjust the relevant items in the comparative financial
statements as if the consolidated reporting entity had existed continuously from the date the ultimate
controlling party first obtained control.B. Subsidiaries or businesses acquired in a business combination not under the same control
(a) When preparing the consolidated balance sheet the opening balances of the consolidated
balance sheet are not adjusted.(b) When preparing the consolidated income statement the revenue expenses and profit of the
subsidiary or business from the acquisition date to the end of the reporting period are included in the
consolidated income statement.(c) When preparing the consolidated statement of cash flows include the cash flows of the
subsidiary from the acquisition date to the end of the reporting period in the consolidated statement of
cash flows.* Disposal of a Subsidiary or Business
A. When preparing the consolidated balance sheet the opening balances of the consolidated
balance sheet are not adjusted.B. When preparing the consolidated income statement the revenue expenses and profit of the
subsidiary or business from the beginning of the period to the date of disposal are included in the
consolidated income statement.C. When preparing the consolidated cash flow statement the cash flows of the subsidiary or
business from the beginning of the period to the date of disposal are included in the consolidated cash
flow statement.
(4) Special Considerations in Consolidation Offsetting
* Long-term equity investments held by a subsidiary in the parent company shall be treated as
treasury stock of the parent company and recognized as a deduction from equity. They shall be presented
under the “Equity” section of the consolidated balance sheet as “Less: Treasury Stock.”
Long-term equity investments held by subsidiaries among themselves shall be offset against the
parent company’s equity investment in the respective subsidiary and the long-term equity investment
shall be offset against the parent company’s share of the corresponding subsidiary’s equity.* Since the “Special Reserve” and “General Risk Reserve” items do not constitute paid-in capital
(or share capital) or capital surplus nor are they retained earnings or undistributed profits they are
reinstated based on the parent company’s share after offsetting long-term equity investments against the
subsidiary’s equity.* Where temporary differences arise between the book value of assets and liabilities in the
consolidated balance sheet and their tax bases at the respective taxable entities due to the elimination of
unrealized gains or losses on internal sales deferred tax assets or deferred tax liabilities shall be
recognized in the consolidated balance sheet and income tax expense in the consolidated income
statement shall be adjusted accordingly except for deferred income taxes related to transactions or
events recognized directly in equity and business combinations.* Unrealized gains or losses arising from the sale of assets by the Company to a subsidiary shall
be fully offset against “Net income attributable to owners of the parent.” Unrealized gains or lossesarising from the sale of assets by a subsidiary to the Company shall be allocated and offset between “Netincome attributable to owners of the parent” and “Minority interest” in proportion to the Company’s
ownership interest in that subsidiary. Unrealized gains or losses arising from the sale of assets between
subsidiaries shall be allocated and offset between “Net Income Attributable to Owners of the Parent”
and “Minority Interest” in proportion to the Company’s ownership interest in the selling subsidiary.* If the current-period loss allocated to minority shareholders of a subsidiary exceeds the minority
shareholders’ share of the subsidiary’s opening equity the excess amount shall still be offset against
minority interest.
(5) Accounting Treatment for Special Transactions
* Acquisition of Minority Interests
When the Company acquires equity interests in a subsidiary held by minority shareholders the cost
of the newly acquired long-term equity investment in the separate financial statements is measured at the
fair value of the consideration paid. In the consolidated financial statements the difference between the
long-term equity investment newly acquired through the purchase of minority interests and the share of
the subsidiary’s net assets that should be recognized from the acquisition date or the consolidation date
calculated based on the new ownership percentage shall be adjusted against capital surplus (capital
premium or share premium). If the capital surplus is insufficient to absorb the difference it shall be
offset against retained earnings and undistributed profits in that order.* Acquisition of control over a subsidiary through multiple transactions
A. Business combinations under common control achieved through multiple transactions
On the combination date the Company determines the initial cost of the long-term equity
investment in its separate financial statements based on its share of the book value of the subsidiary’s net
assets in the ultimate controlling party’s consolidated financial statements; The difference between the
initial investment cost and the sum of the book value of the long-term equity investment prior to the
merger and the book value of the additional consideration paid for the acquisition of further shares on
the merger date is recognized in capital surplus (capital premium or share premium). If capital surplus
(capital premium or share premium) is insufficient to absorb the difference the remaining amount is
offset against retained earnings and undistributed profits in that order.In consolidated financial statements the assets and liabilities of the acquiree acquired by the
consolidating entity in the merger are measured at their book value in the ultimate controlling party’s
consolidated financial statements as of the merger date except for adjustments made due to differences
in accounting policies and reporting periods; The difference between the sum of the book value of the
investment held prior to the merger and the book value of the additional consideration paid on the
merger date and the book value of the net assets acquired in the merger is recognized in capital surplus
(share premium/capital premium). If capital surplus is insufficient to absorb the difference the
remaining amount is recognized in retained earnings.For an equity investment held by the acquirer prior to obtaining control of the acquiree any gains
or losses other comprehensive income and changes in other equity recognized between the date of
acquisition of the original equity interest and the date on which the acquirer and the acquiree came under
the same ultimate control (whichever is later) and the merger date shall be offset against retained
earnings at the beginning of the comparative reporting period or against profit or loss for the current
period respectively.B. Implementing a business combination between entities not under the same control in stages
through multiple transactions
On the combination date in the separate financial statements the initial cost of the long-term equity
investment is determined as the sum of the book value of the previously held long-term equity
investment and the cost of the new investment acquired on the combination date.In the consolidated financial statements equity interests in the acquiree held prior to the acquisition
date are remeasured at their fair value as of the acquisition date. If an equity interest in the acquiree held
prior to the acquisition date is designated as a financial asset at fair value through other comprehensive
income the difference between its fair value and book value is recognized in retained earnings; and the
cumulative fair value changes previously recognized in other comprehensive income are transferred to
retained earnings; if the equity interest in the acquiree held prior to the acquisition date is classified as a
financial asset at fair value through other comprehensive income or as a long-term equity investment
accounted for using the equity method the difference between its fair value and book value is
recognized as investment income for the period; If the equity interest in the acquiree held prior to the
acquisition date relates to other comprehensive income under the equity method and changes in other
equity under the equity method (excluding net profit or loss other comprehensive income and
distributions of profits) the related other comprehensive income is accounted for on the acquisition date
using the same basis as if the investee had directly disposed of the relevant assets or liabilities and the
related changes in other equity are reclassified to investment income for the period in which the
acquisition date falls.* Disposal of Long-Term Equity Investments in Subsidiaries Without Loss of Control
When a parent company disposes of a portion of its long-term equity investment in a subsidiary
without losing control the difference between the disposal proceeds and the parent company’s share of
the subsidiary’s net assets—calculated continuously from the acquisition date or the date of
consolidation—is recognized in the consolidated financial statements. This amount is recorded in capital
surplus (capital premium or share premium). If the capital surplus is insufficient to absorb the difference
the remaining amount is recognized in retained earnings.* Disposal of the Company’s Long-Term Equity Investment in a Subsidiary Resulting in Loss of
Control
A. One-Time Disposal
If the Company loses control over the investee due to the disposal of a portion of its equity
investment or other reasons the remaining equity interest is remeasured at its fair value as of the date
control is lost when preparing the consolidated financial statements. The difference between the sum of
the consideration received from the disposal of the equity interest and the fair value of the remaining
equity interest and the sum of the share of the net assets of the former subsidiary calculated based on the
original ownership percentage (accrued continuously from the acquisition date or the date of
consolidation) and goodwill is recognized as investment income in the period in which control is lost.Other comprehensive income related to equity investments in subsidiaries is accounted for upon
loss of control on the same basis as if the subsidiary had directly disposed of the relevant assets or
liabilities. All other changes in equity related to the former subsidiary that were previously accounted for
under the equity method are reclassified to profit or loss upon loss of control.B. Step-by-Step Disposal of Multiple Transactions
In consolidated financial statements one should first determine whether the step-by-step
transactions constitute a “bundled transaction.”
If the step-by-step transaction does not constitute a “bundled transaction” in the separate financial
statements for each transaction prior to the loss of control over the subsidiary the book value of the
long-term equity investment corresponding to each disposal of equity interests shall be transferred; the
difference between the proceeds received and the book value of the long-term equity investment
disposed of shall be recognized as investment income for the current period; In the consolidated
financial statements the transaction should be accounted for in accordance with the relevant provisionsfor “the parent company’s disposal of a long-term equity investment in a subsidiary without losingcontrol.”
If the step-by-step transactions constitutes a “bundled transaction” each transaction shall be
accounted for as a single transaction involving the disposal of a subsidiary and the loss of control; in the
separate financial statements the difference between each disposal consideration received prior to the
loss of control and the book value of the long-term equity investment corresponding to the disposed
equity interest shall first be recognized in other comprehensive income and then transferred in full to
profit or loss for the period in which control is lost; In the consolidated financial statements for each
transaction prior to the loss of control the difference between the disposal proceeds and the share of the
subsidiary’s net assets corresponding to the disposed investment shall be recognized in other
comprehensive income and transferred in full to profit or loss for the period in which control is lost.Multiple transactions are generally accounted for as a “bundled transaction” if the terms conditions
and economic effects of the transactions meet one or more of the following criteria:
(a) These transactions are concluded simultaneously or taking into account their mutual impacts.(b) These transactions collectively achieve a complete business outcome.(c) The occurrence of one transaction depends on the occurrence of at least one other transaction.(d) A transaction is uneconomical when considered alone but becomes economical when
considered together with other transactions.* Dilution of the parent company’s ownership interest due to a capital increase by the subsidiary’s
minority shareholders
When other shareholders (minority shareholders) of a subsidiary make a capital contribution to the
subsidiary this dilutes the parent company’s ownership interest in the subsidiary. In the consolidated
financial statements the parent company’s share of the subsidiary’s net book value prior to the capital
increase is calculated based on the parent company’s ownership percentage before the increase. The
difference between this amount and the parent company’s share of the subsidiary’s net book value after
the increase—calculated based on the parent company’s ownership percentage after the increase—is
recorded as an adjustment to capital surplus (capital premium or share premium). If the capital surplus
(capital premium or share premium) is insufficient to absorb the difference the remaining amount is
recorded as an adjustment to retained earnings.8. Classification of Joint Arrangements and Accounting Treatment Method for Joint Operations
?Applicable □ Not Applicable
A joint arrangement is an arrangement that is jointly controlled by two or more parties. The
Company’s joint arrangements are classified as joint operations and joint ventures.
(1) Joint operations
A joint operation is a joint arrangement in which the Company holds the assets related to the
arrangement and bears the liabilities related to the arrangement.The Company recognizes the following items related to its interests in joint operations and accounts
for them in accordance with relevant Accounting Standards for Business Enterprises:
* Recognition of assets held separately and recognition of jointly held assets based on proportional
ownership.* Recognition of liabilities held separately and recognition of jointly held liabilities based on
proportional ownership.* Recognition of revenue from the sale of its share of output from joint operations.* Recognition of revenue from the sale of output from joint operations based on proportional
ownership.* Recognition of expenses incurred separately and recognition of expenses incurred by joint
operations based on proportional ownership.
(2) Joint Ventures
A joint venture is a joint arrangement in which the Company has rights only to the net assets of the
arrangement.The Company accounts for its investments in joint ventures in accordance with the provisions for
equity method accounting applicable to long-term equity investments.
9. Determination Criteria for Cash and Cash Equivalents
Cash equivalents refer to short-term investments (generally maturing within three months from the
purchase date) that are highly liquid easily convertible into a known amount of cash and have a
minimal risk of changes in value.
10. Translation of Foreign Currency Transactions and Foreign Currency Financial Statements
?Applicable □ Not Applicable
(1) Method for Determining the Exchange Rate for Foreign Currency Transactions
Upon initial recognition of foreign currency transactions the Company converts the transaction into
the functional currency using an exchange rate that approximates the spot rate on the transaction date
(hereinafter referred to as the “approximate spot rate”).
(2) Method for Translating Foreign Currency Monetary Items at the Balance Sheet Date
At the balance sheet date foreign currency monetary items are translated using the spot exchange
rate prevailing on the balance sheet date. Exchange differences arising from the difference between the
spot exchange rate on the balance sheet date and the spot exchange rate at the time of initial recognition
or on the previous balance sheet date are recognized in profit or loss for the current period. For foreign
currency non-monetary items measured at historical cost the spot exchange rate prevailing on the
transaction date continues to be used for translation; For inventory measured at the lower of cost and net
realizable value when inventory is purchased in a foreign currency and its net realizable value at the
balance sheet date is expressed in that foreign currency the net realizable value is first converted into the
functional currency amount using the spot exchange rate at the balance sheet date. This amount is then
compared with the inventory cost expressed in the functional currency to determine the ending value of
the inventory; For non-monetary items denominated in foreign currencies that are measured at fair value
the spot exchange rate on the date the fair value is determined is used for translation. For financial assets
measured at fair value with changes recognized in profit or loss the difference between the translated
amount in the functional currency and the original amount in the functional currency is recognized in
profit or loss for the period; for non-trading equity instrument investments designated as measured at fair
value with changes recognized in other comprehensive income the difference between the translated
amount in the functional currency and the original amount in the functional currency is recognized in
other comprehensive income.
(3) Methods for Translating Foreign Currency Financial Statements
Before translating the financial statements of a company’s foreign operations the accounting
periods and accounting policies of those operations must first be adjusted to align with the Company’s
accounting periods and policies. Financial statements must then be prepared in the relevant currency (a
currency other than the functional currency) based on the adjusted accounting policies and periods. The
financial statements of the foreign operations are then translated using the following methods:
* Assets and liabilities on the balance sheet are translated using the spot exchange rate at the
balance sheet date. Equity items with the exception of “retained earnings” are translated using the spot
exchange rate at the date of the transaction.* Revenue and expense items on the income statement are translated using an approximate spot
exchange rate at the date of the transaction.* Foreign currency cash flows and the cash flows of foreign subsidiaries are translated using the
approximate spot exchange rate prevailing on the date the cash flows occurred. The effect of exchange
rate changes on cash shall be treated as an adjusting item and presented separately in the statement of
cash flows.* Foreign currency translation differences arising from the translation of financial statements are
presented in the “Other Comprehensive Income” line item under equity in the consolidated balance sheet
when preparing consolidated financial statements.Upon the disposal of a foreign operation and the loss of control all foreign currency translation
differences related to that foreign operation which were previously presented under the equity section of
the balance sheet shall be transferred to profit or loss for the period of disposal either in full or in
proportion to the disposal of the foreign operation.11. Financial Instruments
?Applicable □ Not Applicable
The financial instrument is a contract that gives rise to a financial asset of one party and a financial
liability or equity instrument of another party.
(1) Recognition and Derecognition of Financial Instruments
When the Company becomes a party to a financial instrument contract it recognizes the related
financial asset or financial liability.The financial asset is derecognized if it meets any of the following conditions:
* The contractual rights to receive cash flows from the financial asset have terminated;
* The financial asset has been transferred and meets the derecognition criteria for transferred
financial assets described below.If the present obligation under a financial liability (or a portion thereof) has been discharged the
financial liability (or that portion of the financial liability) shall be derecognized. If the Company (the
borrower) enters into an agreement with the lender to replace the original financial liability with a new
financial liability and the contractual terms of the new financial liability differ substantially from those
of the original financial liability the original financial liability shall be derecognized and a new financial
liability shall be recognized simultaneously. If the Company makes a substantive modification to the
contractual terms of the original financial liability (or a portion thereof) the original financial liability
shall be derecognized and a new financial liability shall be recognized in accordance with the modified
terms.Financial assets held for trading are recognized and derecognized on the trade date. Financial assets
held for trading are those for which delivery is scheduled in accordance with the terms of the contract
and the timing established by regulations or market conventions. The trade date is the date on which the
Company commits to purchase or sell a financial asset.
(2) Classification and Measurement of Financial Assets
Upon initial recognition the Company classifies financial assets based on the business model used
to manage them and the contractual cash flow characteristics of the financial assets into the following
categories: financial assets measured at amortized cost financial assets measured at fair value with
changes recognized in profit or loss and financial assets measured at fair value with changes recognized
in other comprehensive income. Financial assets shall not be reclassified after initial recognition unless
the Company changes the business model for managing financial assets; in such cases all affected
financial assets are reclassified on the first day of the first reporting period following the change in
business model.Financial assets are measured at fair value upon initial recognition. For financial assets measured at
fair value with changes recognized in profit or loss related transaction costs are recognized directly in
profit or loss; for financial assets in other categories related transaction costs are included in their initial
recognition amount. For notes receivable and accounts receivable arising from the sale of goods or the
provision of services that do not contain or take into account a significant financing component the
Company measures them initially at the transaction price as defined in the revenue standards.The subsequent measurement of financial assets depends on their classification:
* Financial assets measured at amortized cost
The financial asset is classified as a financial asset measured at amortized cost if it meets all of the
following conditions: the Company’s business model for managing the financial asset is aimed at
collecting contractual cash flows; and the contractual terms of the financial asset provide that cash flows
arising on specific dates consist solely of payments of principal and interest based on the outstanding
principal amount. For such financial assets the effective interest method is applied to measure them at
amortized cost. Gains or losses arising from derecognition amortization using the effective interest
method or impairment are recognized in profit or loss for the current period.* Financial assets measured at fair value with changes recognized in other comprehensive income
The financial asset is classified as a financial asset measured at fair value with changes recognized
in other comprehensive income if it meets all of the following criteria: the Company’s business model
for managing the financial asset is to collect contractual cash flows as well as to sell the financial asset;
and the contractual terms of the financial asset provide that cash flows arising on specific dates consist
solely of payments of principal and interest based on the outstanding principal amount. Such financial
assets are subsequently measured at fair value. Except for impairment losses or gains and foreign
exchange gains or losses which are recognized in profit or loss changes in the fair value of such
financial assets are recognized in other comprehensive income until the financial asset is derecognized
at which time the cumulative gain or loss is transferred to profit or loss. However interest income on
such financial assets calculated using the effective interest method is recognized in profit or loss.The Company has irrevocably elected to designate certain non-trading equity instrument
investments as financial assets measured at fair value with changes recognized in other comprehensive
income recognizing only the related dividend income in profit or loss for the period and recognizing
changes in fair value as other comprehensive income until the financial asset is derecognized at which
time the cumulative gain or loss is transferred to retained earnings.* Financial assets measured at fair value with changes recognized in profit or loss
Financial assets other than those measured at amortized cost and those measured at fair value with
changes recognized in other comprehensive income are classified as financial assets measured at fair
value with changes recognized in profit or loss. For such financial assets subsequent measurement is
based on fair value and all changes in fair value are recognized in profit or loss.
(3) Classification and Measurement of Financial Liabilities
The Company classifies financial liabilities into financial liabilities measured at fair value with
changes recognized in profit or loss loan commitments and financial guarantee contract liabilities at
below-market interest rates and financial liabilities measured at amortized cost.The subsequent measurement of financial liabilities depends on their classification:
* Financial liabilities measured at fair value with changes recognized in profit or loss
This category of financial liabilities includes financial liabilities held for trading (including
derivatives classified as financial liabilities) and financial liabilities designated as measured at fair value
with changes recognized in profit or loss. After initial recognition these financial liabilities are
measured at fair value and any resulting gains or losses (including interest expense) are recognized in
profit or loss except where related to hedge accounting. However for financial liabilities designated as
measured at fair value through profit or loss the Company recognizes changes in the fair value of such
liabilities arising from changes in their own credit risk in other comprehensive income. Upon
derecognition of such financial liabilities the cumulative gains and losses previously recognized in other
comprehensive income shall be reclassified out of other comprehensive income and recognized in
retained earnings.* Loan Commitments and Financial Guarantee Contract Liabilities
The loan commitment is a commitment by the Company to provide a loan to a customer under
specified contractual terms during the commitment period. Loan commitments are impaired in
accordance with the expected credit loss model.The financial guarantee contract is a contract that requires the Company to make specified
payments to a contract holder that has suffered a loss when a specified obligor fails to make payment
when due in accordance with the original or modified terms of a debt instrument. Financial guarantee
contract liabilities are subsequently measured at the higher of the loss allowance determined in
accordance with the impairment principles for financial instruments and the initial recognition amount
less any cumulative amortisation recognised in accordance with the revenue recognition principles.* Financial liabilities measured at amortized cost
After initial recognition other financial liabilities are measured at amortized cost using the effective
interest method.Except in specific circumstances financial liabilities and equity instruments are distinguished based
on the following principles:
* If the Company cannot unconditionally avoid fulfilling a contractual obligation by delivering
cash or other financial assets that contractual obligation meets the definition of a financial liability.Some financial instruments although they do not explicitly include terms and conditions requiring the
delivery of cash or other financial assets may indirectly give rise to a contractual obligation through
other terms and conditions.* If a financial instrument must be or may be settled in the entity’s own equity instruments
consideration must be given to whether the entity’s own equity instruments used to settle the instrument
serve as a substitute for cash or other financial assets or are intended to give the holder of the instrument
a residual interest in the assets of the issuer after all liabilities have been deducted. If the former the
instrument is a financial liability of the issuer; if the latter the instrument is an equity instrument of the
issuer. In some cases a financial instrument contract requires or permits the Company to settle the
instrument using its own equity instruments where the amount of the contractual right or obligation
equals the number of the Company’s own equity instruments to be received or delivered multiplied by
their fair value at settlement the contract is classified as a financial liability regardless of whether the
amount of the contractual right or obligation is fixed or varies in whole or in part based on changes in
variables other than the market price of the Company’s own equity instruments (such as interest rates
the price of a commodity or the price of a financial instrument).
(4) Derivative Financial Instruments and Embedded Derivatives
Derivative financial instruments are initially measured at fair value on the date the derivative
contract is entered into and are subsequently measured at fair value. Derivative financial instruments
with a positive fair value are recognized as assets while those with a negative fair value are recognized
as liabilities.Except for the effective portion of cash flow hedges which is recognized in other comprehensive
income and reclassified to profit or loss when the hedged item affects profit or loss gains or losses
arising from changes in the fair value of derivatives are recognized directly in profit or loss.For hybrid instruments containing embedded derivatives if the host contract is a financial asset the
hybrid instrument as a whole is subject to the relevant provisions for the classification of financial assets.If the host contract is not a financial asset and the hybrid instrument is not accounted for as a financial
asset at fair value through profit or loss and the embedded derivative has no close relationship with the
host contract in terms of economic characteristics and risks and a standalone instrument with the same
terms as the embedded derivative meets the definition of a derivative the embedded derivative is
separated from the hybrid instrument and treated as a separate derivative financial instrument. If the fair
value of the embedded derivative cannot be measured separately at the acquisition date or subsequent
balance sheet dates the hybrid instrument as a whole shall be designated as a financial asset or financial
liability measured at fair value through profit or loss.
(5) Impairment of Financial Instruments
The Company recognizes loss allowances based on expected credit losses for financial assets
measured at amortized cost debt investments measured at fair value with changes recognized in other
comprehensive income contract assets lease receivables loan commitments and financial guarantee
contracts.* Measurement of Expected Credit Losses
Expected credit losses refer to the weighted average of credit losses on financial instruments
weighted by the risk of default. Credit losses represent the difference between all contractual cash flows
discounted by the Company at the original effective interest rate and receivable by the Company
according to the contract and all cash flows expected to be received by the Company namely the
present value of all cash shortfalls. For financial assets purchased or originated by the Company with
incurred credit impairment impairment is discounted at the effective interest rate adjusted for credit of
such financial assets.Expected credit losses over the entire life of the financial instrument refer to the expected credit
losses resulting from all possible default events that may occur over the entire expected life of the
financial instrument.Expected credit losses over the next 12 months refer to expected credit losses resulting from
potential default events on the financial instrument that may occur within 12 months after the balance
sheet date (or within the expected life of the financial instrument if it is less than 12 months); they
constitute a portion of the expected credit losses over the entire life.At each balance sheet date the Company measures expected credit losses separately for financial
instruments in different stages. Financial instruments for which credit risk has not increased significantly
since initial recognition are classified in Stage 1 and the Company measures loss allowances based on
expected credit losses over the next 12 months; financial instruments for which credit risk has increased
significantly since initial recognition but have not yet incurred credit impairment are classified in Stage
2 and the Company measures loss allowances based on expected credit losses over the entire remaining
life of the instrument; Financial instruments for which credit impairment has occurred since initial
recognition are classified in Stage 3 and the Company measures the loss allowance based on the
expected credit losses over the entire remaining life of the instrument.For financial instruments with low credit risk as of the balance sheet date the Company assumes
that their credit risk has not increased significantly since initial recognition and measures the loss
allowance based on expected credit losses over the next 12 months.For financial instruments in Stage 1 and Stage 2 as well as those with low credit risk the Company
calculates interest income based on their book balance (before deducting impairment allowances) and
the effective interest rate. For financial instruments in Stage 3 interest income is calculated based on the
amortized cost (the book balance less any impairment loss) and the effective interest rate.For notes receivable accounts receivable receivables financing and contract assets regardless of
whether a significant financing component exists the Company measures the loss allowance based on
the expected credit losses over the entire life of the instrument.A. Receivables/Contract Assets
For notes receivable accounts receivable other receivables receivables financing contract assets
and long-term receivables for which there is objective evidence of impairment or other criteria requiring
individual assessment impairment tests are conducted on an individual basis to recognize expected
credit losses and record individual impairment allowances. For notes receivable accounts receivable
other receivables receivables financing contract assets and long-term receivables for which there is no
objective evidence of impairment or when information regarding expected credit losses for an
individual financial asset cannot be assessed at a reasonable cost the Company classifies notes
receivable accounts receivable other receivables receivables financing contract assets and long-term
receivables into several groups based on credit risk characteristics. Expected credit losses are calculated
on a group basis and the basis for determining these groups is as follows:
The basis for determining portfolios for notes receivable is as follows:
Portfolio
Name Basis for Determining Portfolios Provision Method
The issuer exhibits a high credit rating no Refer to historical credit loss experience and take into
Bank history of default on bills a very low consideration current conditions and forecasts of future
Acceptance credit loss risk and a strong ability to economic conditions to calculate expected credit losses
Bill Portfolio 1 fulfill its cash flow obligations under through default risk exposure and the expected credit loss
payment contracts. rate over the entire duration.Refer to historical credit loss experience and take into
Bank Acceptors other than those in Bank consideration current conditions and forecasts of future
Acceptance Acceptance Bill Portfolio 1 are bank-type economic conditions to calculate expected credit losses
Bill Portfolio 2 financial institutions. through default risk exposure and the expected credit loss
rate over the entire duration.Refer to historical credit loss experience and take into
Commercial Acceptors are financial companies or consideration current conditions and forecasts of future
Acceptance non-bank financial institutions or economic conditions to prepare a table comparing the
Bill Portfolio corporate units. aging of accounts receivable with the expected credit lossrate over the entire duration (similar to accounts
receivable) to calculate expected credit losses.The basis for determining portfolios for accounts receivable is as follows:
Portfolio Name Basis for Determining Portfolios Provision Method
Aging Analysis This portfolio utilizes the aging
Refer to historical credit loss experience and take into
Portfolio of receivables as a credit risk
consideration current conditions and forecasts of future
characteristic. economic conditions to measure the provision for baddebts.Related Party Portfolio This portfolio utilizes the related Refer to historical credit loss experience and take into
within the party portfolio within the consideration current conditions and forecasts of future
Consolidation Scope consolidation scope as a credit economic conditions to measure the provision for badrisk characteristic. debts.The basis for determining groups for other receivables is as follows:
Portfolio Name Basis for DeterminingPortfolios Provision Method
Aging is used as the Provision is made according to the table for comparison
Aging Portfolio credit risk between aging and expected credit loss rate (same as
characteristic accounts receivable)
Government Accounts Government accounts Refer to historical credit loss experience and take intoreceivable consideration current conditions and forecasts of future
Portfolio of Account Current between Related parties within economic conditions to calculate expected credit losses
Related Parties within the the consolidation through default risk exposure and the expected credit
Consolidation Scope scope of the Company loss rate over the next 12 months or the entire duration.Portfolio of Account Current between Related parties within
Related Parties within the the consolidation
Consolidation Scope scope of the Company
The basis for determining portfolios for receivables financing is as follows:
Portfolio
Name Basis for Determining Portfolios Provision Method
The Company uses aging to assess the expected credit
losses of this type of portfolio. This portfolio carries
similar risk characteristics and aging information can
reflect the ability of this portfolio to pay when
Accounts This portfolio utilizes the aging of
accounts receivable mature. As of the balance sheet
date the Company refers to historical credit loss
Receivable Receivables Financing as a credit riskcharacteristic experience and takes into current conditions andforecasts of future economic conditions to a table
comparing the aging of accounts receivable with the
expected credit loss rate over the entire duration
(similar to accounts receivable) to calculate expected
credit losses.This portfolio consists of notes issued by
entities with high credit ratings with no Refer to historical credit loss experience and take into
Notes history of note defaults and very low credit consideration current conditions and forecasts of
Receivable loss risks and with strong ability to fulfill future economic conditions to calculate expected
their cash flow obligations under payment credit losses through default risk exposure and the
contracts in the short term expected credit loss rate over the entire duration.The basis for determining portfolios for contract assets is as follows:
Portfolio Basis for Determining
Name Portfolios Provision Method
Refer to historical credit loss experience and take into consideration current
Portfolio 1 Unmatured Security conditions and forecasts of future economic conditions to calculateDeposits expected credit losses through default risk exposure and the expected credit
loss rate over the entire duration.The basis for determining portfolios for long-term receivables is as follows:
Portfolio Basis for Determining
Name Portfolios Provision Method
Refer to historical credit loss experience and take into consideration current
Portfolio 1 Finance Leases conditions and forecasts of future economic conditions to calculateexpected credit losses through default risk exposure and the expected credit
loss rate over the entire duration.The Company’s method for calculating aging data to identify credit risk profiles:
Accounts
Aging Notes Other Receivables Long-termReceivable Receivable / Receivables Financing Receivables
Contract Assets
Within 1 year 5% 5% 5% 5% 5%
1–2 years 10% 10% 10% 10% 10%
2–3 years 30% 30% 30% 30% 30%
3–4 years 50% 50% 50% 50% 50%
4–5 years 80% 80% 80% 80% 80%
Over 5 years 100% 100% 100% 100% 100%
B. Debt Investments and Other Debt Investments
For debt investments and other debt investments the Company calculates expected credit losses
based on the nature of the investment the type of counterparty and the type of exposure using default
risk exposure and expected credit loss rates over the next 12 months or the entire life of the investment.* Low Credit Risk
The financial instrument is considered to have low credit risk if the risk of default is low the
borrower has a strong ability to meet its contractual cash flow obligations in the short term and adverse
changes in economic conditions and the operating environment over a longer period do not necessarily
impair the borrower’s ability to meet its contractual cash flow obligations.* Significant Increase in Credit Risk
The Company determines whether the credit risk of a financial instrument has increased
significantly since initial recognition by comparing the probability of default over the estimated
remaining life of the financial instrument as determined at the balance sheet date with the probability of
default over the estimated remaining life as determined at initial recognition thereby assessing the
relative change in the probability of default over the estimated remaining life of the financial instrument.In determining whether credit risk has increased significantly since initial recognition the
Company considers reasonable and supportable information that is readily available without incurring
undue additional costs or effort including forward-looking information. The information considered by
the Company includes:
A. Whether internal pricing indicators have changed significantly as a result of changes in credit
risk;
B. Adverse changes in business financial or economic conditions that are expected to result in a
significant change in the debtor’s ability to meet its debt obligations;
C. Whether there have been significant changes in the debtor’s actual or expected operating results;
or whether there have been significant adverse changes in the regulatory economic or technological
environment in which the debtor operates;
D. Whether there have been significant changes in the value of collateral securing the debt or in the
quality of guarantees or credit enhancements provided by third parties. These changes are expected to
reduce the debtor’s economic incentive to repay the debt within the contractually specified timeframe or
to affect the probability of default;
E. Whether there has been a significant change in the debtor’s economic incentive to make
payments in accordance with the terms of the contract;
F. Anticipated changes to the loan agreement including whether anticipated breaches of contract
are likely to result in the waiver or modification of contractual obligations the granting of a grace period
an interest rate hike a request for additional collateral or guarantees or other changes to the contractual
framework of the financial instrument;
G. Whether there has been a significant change in the debtor’s expected performance and
repayment behavior;
H. Whether contract payments are past due by 30 days or more.Depending on the nature of the financial instrument the Company assesses whether credit risk has
increased significantly on an individual financial instrument basis or on a portfolio basis. When
conducting an assessment on a portfolio basis the Company may classify financial instruments based on
common credit risk characteristics such as delinquency information and credit ratings.Generally if a financial instrument is past due by more than 30 days the Company determines that
the credit risk has increased significantly. This determination is made unless the Company can obtain
without undue cost or effort reasonable and supportable evidence that although the payment is more
than 30 days past the contractual due date the credit risk has not increased significantly since initial
recognition.* Financial Assets That Have Suffered Credit Impairment
At the balance sheet date the Company assesses whether financial assets measured at amortized
cost and debt investments measured at fair value with changes recognized in other comprehensive
income have suffered credit impairment. A financial asset is considered to have suffered credit
impairment when one or more events occur that have an adverse effect on the expected future cash flows
of the financial asset. Evidence that a financial asset is credit-impaired includes the following observable
information:
The issuer or debtor is experiencing significant financial difficulties; The debtor has breached a
contract such as defaulting on or delaying interest or principal payments; The creditor grants the debtor
concessions that would not otherwise be granted based on economic or contractual considerations
related to the debtor’s financial difficulties; It is highly probable that the debtor will enter bankruptcy or
undergo other financial restructuring; The disappearance of an active market for the financial asset due
to the financial difficulties of the issuer or debtor; The purchase or origination of a financial asset at a
significant discount where the discount reflects the occurrence of credit losses.* Presentation of Allowance for Expected Credit Losses
To reflect changes in the credit risk of financial instruments since initial recognition the Company
remeasures expected credit losses at each balance sheet date. Any increase or reversal in the allowance
for expected credit losses resulting from such remeasurement shall be recognized as an impairment loss
or gain in current period profit or loss. For financial assets measured at amortized cost the loss
allowance reduces the book value of the financial asset as presented in the balance sheet; for debt
investments measured at fair value with changes recognized in other comprehensive income the
Company recognizes the loss allowance in other comprehensive income and does not reduce the book
value of the financial asset.* Write-off
If the Company no longer reasonably expects to recover all or part of the contractual cash flows of
a financial asset it shall write down the book balance of that financial asset directly. Such a write-down
constitutes the derecognition of the relevant financial asset. This situation typically arises when the
Company determines that the debtor has no assets or sources of income capable of generating sufficient
cash flows to repay the amount to be written down.If a financial asset that has been written down is subsequently recovered the amount is recognized
as a reversal of an impairment loss in profit or loss for the period in which the recovery occurs.
(6) Transfer of Financial Assets
The transfer of a financial asset refers to either of the following two situations:
A. Transferring the contractual right to receive cash flows from the financial asset to another party;
B. Transferring all or part of the financial asset to another party while retaining the contractual
right to receive cash flows from the financial asset and assuming the contractual obligation to pay those
cash flows to one or more payees.* Derecognition of Transferred Financial Assets
The financial asset is derecognized when substantially all the risks and rewards of ownership of the
financial asset have been transferred to the transferee or when neither substantially all the risks and
rewards of ownership have been transferred nor retained but control over the financial asset has been
relinquished.In determining whether control over the transferred financial asset has been relinquished the
transferee’s actual ability to sell the financial asset is considered. If the transferee is able to unilaterally
sell the transferred financial asset in its entirety to an unrelated third party without any additional
conditions restricting such a sale the Company has relinquished control over that financial asset.When determining whether the transfer of a financial asset meets the criteria for derecognition the
Company focuses on the substance of the transfer.If the transfer of a financial asset as a whole meets the criteria for derecognition the difference
between the following two amounts is recognized in profit or loss for the current period:
A. The book value of the transferred financial asset;
B. The sum of the consideration received from the transfer and the portion of the cumulative fair
value changes previously recognized directly in other comprehensive income that corresponds to the
derecognition (in cases where the transferred financial asset is classified as a financial asset measured at
fair value with changes recognized in other comprehensive income pursuant to Paragraph 18 of
Accounting Standard for Business Enterprises No. 22—Recognition and Measurement of Financial
Instruments).If a partial transfer of a financial asset meets the criteria for derecognition the book value of the
transferred financial asset as a whole shall be allocated between the portion subject to derecognition and
the portion not subject to derecognition (in which case the retained service asset is treated as a
continuing part of the financial asset) based on their respective relative fair values as of the transfer date
and the difference between the following two amounts shall be recognized in profit or loss for the
current period:
A. The book value of the derecognized portion on the derecognition date.B. The sum of the consideration for the portion derecognized and the portion of the cumulative fair
value changes previously recognized in other comprehensive income corresponding to the portion
derecognized (where the transferred financial asset is classified as a financial asset measured at fair
value with changes recognized in other comprehensive income in accordance with Paragraph 18 of
Accounting Standard for Business Enterprises No. 22—Recognition and Measurement of Financial
Instruments).* Continued involvement in transferred financial assets
Where an entity has neither transferred nor retained substantially all the risks and rewards of
ownership of a financial asset and has not relinquished control over that financial asset it shall
recognize the financial asset to the extent of its continued involvement in the transferred financial asset
and recognize a corresponding liability.The extent of continued involvement in a transferred financial asset refers to the extent to which the
entity bears the risk of or reward for changes in the value of the transferred financial asset.* Continued Recognition of the Transferred Financial Asset
If the entity retains substantially all the risks and rewards of ownership of the transferred financial
asset it shall continue to recognize the transferred financial asset in its entirety and recognize the
consideration received as a financial liability.The financial asset and the related financial liability recognized shall not be offset against each
other. In subsequent accounting periods the entity shall continue to recognize the revenue (or gain)
arising from the financial asset and the expense (or loss) arising from the financial liability.(7) Offsetting of Financial Assets and Financial Liabilities
Financial assets and financial liabilities are separately presented in the balance sheet without
offsetting. However the net amount after offsetting is presented in the balance sheet if all of the
following conditions are met:
The Company holds a legal right to offset recognized amounts and such right is currently
enforceable;
The Company intends to settle on a net basis or to realize the financial asset and settle the financial
liability simultaneously.For transfers of financial assets that do not meet the criteria for derecognition the transferring party
shall not offset the transferred financial assets against the related liabilities.
(8) Methods for Determining the Fair Value of Financial Instruments
Fair value refers to the price that would be received to sell an asset or paid to transfer a liability in
an orderly transaction between market participants on the measurement date.The Company measures the fair value of relevant assets or liabilities using prices from the principal
market; where no principal market exists the Company measures the fair value of relevant assets or
liabilities using prices from the most advantageous market. The Company adopts the assumptions that a
market participant would use when pricing the asset or liability to maximize its economic benefit.The principal market refers to the market with the largest trading volume and highest level of
trading activity for the relevant asset or liability; a most favorable market refers to the market in which
after considering transaction and transportation costs the relevant asset can be sold for the highest
amount or the relevant liability can be transferred for the lowest amount.For financial assets or financial liabilities with active markets the Company determines their fair
value using quoted prices in the active market. For financial instruments without active markets the
Company determines their fair value using valuation techniques.For non-financial assets measured at fair value consideration is given to the ability of a market
participant to generate economic benefits by using the asset for its best use or to generate economic
benefits by selling the asset to another market participant who can use it for its best use.* Valuation Techniques
The Company employs valuation techniques that are appropriate under current circumstances and
supported by sufficient available data and other information. The primary valuation techniques used
include the market approach and the cost approach. The Company measures fair value using methods
consistent with one or more of these valuation techniques. When multiple valuation techniques are used
to measure fair value the Company considers the reasonableness of each valuation result and selects the
amount that best represents fair value under current circumstances as the fair value.In applying valuation techniques the Company gives priority to relevant observable inputs and uses
unobservable inputs only when relevant observable inputs are unavailable or cannot be obtained in a
practical manner. Observable inputs are inputs that can be derived from market data. These inputs reflect
the assumptions used by market participants in pricing the relevant assets or liabilities. Unobservable
inputs are inputs that cannot be derived from market data. These inputs are derived from the best
available information regarding the assumptions used by market participants in pricing the relevant
assets or liabilities.* Fair Value Hierarchy
The Company classifies the inputs used in fair value measurements into three levels prioritizing
Level 1 inputs followed by Level 2 inputs and finally Level 3 inputs. Level 1 inputs are unadjusted
quotes for identical assets or liabilities available in active markets as of the measurement date. Level 2
inputs are directly or indirectly observable inputs for the relevant asset or liability other than Level 1
inputs. Level 3 inputs are unobservable inputs for the relevant asset or liability.
12. Notes Receivable
?Applicable □ Not Applicable
Portfolio Categories and Determination Basis for Provision for Bad Debts based on Credit Risk
Characteristics
?Applicable □ Not Applicable
For further details see Section 5.11(5) “Impairment of Financial Instruments.”
Aging Calculation Method for Determining Portfolios of Credit Risk Characteristics Based on
Aging Analysis
?Applicable □ Not Applicable
For further details see Section 5.11(5) “Impairment of Financial Instruments.”
Criteria for Identifying Individual Provisions for Bad Debts on an Individual-item Basis
?Applicable □ Not Applicable
For further details see Section 5.11(5) “Impairment of Financial Instruments.”
13. Accounts Receivable
?Applicable □ Not Applicable
Portfolio Categories and Determination Basis for Provision for Bad Debts based on Credit Risk
Characteristics
?Applicable □ Not Applicable
For further details see Section 5.11(5) “Impairment of Financial Instruments.”
Aging Calculation Method for Determining Portfolios of Credit Risk Characteristics Based on
Aging Analysis
?Applicable □ Not Applicable
For further details see Section 5.11(5) “Impairment of Financial Instruments.”
Criteria for Identifying Individual Provisions for Bad Debts on an Individual-item Basis
?Applicable □ Not Applicable
For further details see Section 5.11(5) “Impairment of Financial Instruments.”
14. Receivables Financing
?Applicable □ Not Applicable
Portfolio Categories and Determination Basis for Provision for Bad Debts based on Credit Risk
Characteristics
?Applicable □ Not Applicable
For further details see Section 5.11(5) “Impairment of Financial Instruments.”
Aging Calculation Method for Determining Portfolios of Credit Risk Characteristics Based on
Aging Analysis
?Applicable □ Not Applicable
For further details see Section 5.11(5) “Impairment of Financial Instruments.”
Criteria for Identifying Individual Provisions for Bad Debts on an Individual-item Basis
?Applicable □ Not Applicable
For further details see Section 5.11(5) “Impairment of Financial Instruments.”
15. Other Receivables
?Applicable □ Not Applicable
Portfolio Categories and Determination Basis for Provision for Bad Debts based on Credit Risk
Characteristics
?Applicable □ Not Applicable
For further details see Section 5.11(5) “Impairment of Financial Instruments.”
Aging Calculation Method for Determining Portfolios of Credit Risk Characteristics Based on
Aging Analysis
?Applicable □ Not Applicable
For further details see Section 5.11(5) “Impairment of Financial Instruments.”
Criteria for Identifying Individual Provisions for Bad Debts on an Individual-item Basis
?Applicable □ Not Applicable
For further details see Section 5.11(5) “Impairment of Financial Instruments.”
16. Inventory
?Applicable □ Not Applicable
Categories of Inventory Issuance Valuation Methods Inventory Counting Systems and
Amortization Methods for Low-value Consumables and Packaging
?Applicable □ Not Applicable
(1) Classification of Inventory
Inventory refers to finished products or goods held by the Company for sale work in progress
products and materials and supplies consumed in the production process or service provision process. It
mainly includes raw materials work in progress products inventory goods and issued goods.
(2) Inventory Valuation Method upon Issuance
The Company uses the weighted average method to value inventory at the end of the month when it
is shipped.
(3) Inventory Counting System
The Company employs a perpetual inventory system conducting physical counts at least once a
year; any inventory surpluses or shortages are recognized in the current year’s profit or loss.
(4) Amortization Methods for Reusable Supplies
* Amortization method for low-value consumables: The one-time write-off method is used upon
issuance.* Amortization method for packaging materials: The one-time write-off method is used upon
issuance.* Amortization method for other reusable supplies: The one-time write-off method is used upon
issuance.Recognition Criteria and Provision Method for Inventory Write down
?Applicable □ Not Applicable
At the balance sheet date inventory is measured at the lower of cost and net realizable value. If the
cost of inventory exceeds its net realizable value an inventory write-down is recognized and included in
profit or loss for the current period.In determining the net realizable value of inventory the entity relies on reliable evidence and
considers factors such as the purpose for which the inventory is held and the impact of events occurring
after the balance sheet date.* For inventory held for direct sale such as finished goods merchandise and materials held for
sale the net realizable value is determined in the normal course of business as the estimated selling price
less estimated selling expenses and related taxes. For inventory held to fulfill a sales contract or service
contract the contract price serves as the basis for measuring net realizable value; if the quantity of
inventory held exceeds the quantity ordered under the sales contract the net realizable value of the
excess inventory is measured based on the general market price. For materials held for sale the market
price serves as the basis for measuring net realizable value.* For inventory consisting of materials requiring further processing the net realizable value is
determined in the normal course of business operations as the estimated selling price of the finished
goods produced less the estimated costs to be incurred until completion estimated selling expenses and
related taxes. If the net realizable value of the finished goods produced is higher than the cost the
material is measured at cost; If a decline in material prices indicates that the net realizable value of the
finished goods will be lower than cost the material is measured at net realizable value and an inventory
allowance is recognized for the difference.* The Company generally recognizes inventory allowances on an item-by-item basis; for
inventories with a large quantity and low unit prices inventory allowances are recognized by inventory
category.The Company’s provision for inventory write-downs on a group basis is as follows:
Basis for determining
Category Method and Basis for Calculating Net Realizable Value
categories
Age-based impairment Determining the net realizable value of inventory based on
Age Group
groups age
Determine net realizable value based on the estimated selling
price of the finished goods produced less estimated costs to
Impairment groups based Inventory for which
complete estimated selling expenses and related taxes /
on estimated selling estimated selling prices
Determine net realizable value based on the estimated selling
prices can be obtained
price of the inventory less estimated selling expenses and
related taxes
Calculation methods and basis for determining the net realizable value of each age group when
recognizing net realizable value based on inventory age:
Inventory Type Age Group Calculation of net realizable value
Finished Goods - Feed/Food Amino
Over 1 year 0% of the book balance
Acids
Finished Goods - Pharmaceuticals Over 2.5 years 0% of the book balance
Raw Materials - Coarse Grains Over 1.5 years 0% of the book balance
Raw Materials - Hardware Over 1 year 0% of the book balance
* If as of the balance sheet date the factors that previously led to the write-down of inventory
have ceased to exist the amount of the write-down shall be reversed and reclassified against the
previously recognized inventory allowance for impairment; the amount of the reversal shall be
recognized in profit or loss for the current period.Portfolio Categories and Determination Basis for the Provision for Inventory Write-Down on a
Portfolio Basis and Determination Basis for Net Realizable Values of Different Categories of
Inventories
□Applicable ?Not Applicable
Calculation Method and Determination Basis for Net Realizable Values of Various Inventory Age
Portfolios Based on Inventory Age
□Applicable ?Not Applicable
17. Contract Assets
?Applicable □ Not Applicable
Method and Criteria for Recognizing Contract Assets
?Applicable □ Not Applicable
The Company presents contract assets or contract liabilities on the balance sheet based on the
relationship between the fulfillment of performance obligations and customer payments. Consideration
to which the Company is entitled for goods transferred or services rendered to customers (and where that
entitlement depends on factors other than the passage of time) is presented as a contract asset.For details on the Company’s methodology for determining expected credit losses on contract
assets and the related accounting treatment please refer to Section 5.11 of this document.Contract assets and contract liabilities are presented separately on the balance sheet. Contract assets
and contract liabilities under the same contract are presented on a net basis; if the net amount is a debit
balance it is presented under “Contract Assets” or “Other Non-current Assets” depending on its
liquidity; if the net amount is a credit balance it is presented under “Contract Liabilities” or “Other Non-current Liabilities” depending on its liquidity. Contract assets and contract liabilities under different
contracts cannot be offset against each other.Portfolio Categories and Determination Basis for Provision for Bad Debts based on Credit Risk
Characteristics
?Applicable □ Not Applicable
For further details see Section 5.11(5) “Impairment of Financial Instruments.”
Aging Calculation Method for Determining Portfolios of Credit Risk Characteristics Based on
Aging Analysis
□Applicable ?Not Applicable
Criteria for Identifying Individual Provisions for Bad Debts on an Individual-item Basis
□Applicable ?Not Applicable
18. Non-current Asset or Disposal Portfolio Held for Sale
□Applicable ?Not Applicable
Recognition Criteria and Accounting Treatment Method for Non-current Assets or Disposal
Portfolios Held for Sale
□Applicable ?Not Applicable
Recognition Criteria and Presentation Method for Business Termination
□Applicable ?Not Applicable
19. Long-term Equity Investments
?Applicable □ Not Applicable
The Company’s long-term equity investments include equity investments in which the Company
exercises control or significant influence over the investee as well as equity investments in joint
ventures. Entities over which the Company is able to exercise significant influence are classified as the
Company’s associates.
(1) Basis for determining joint control or significant influence over an investee
Joint control refers to the shared control over an arrangement pursuant to relevant agreements
whereby decisions regarding the arrangement’s activities must be made with the unanimous consent of
the parties sharing control. When determining whether joint control exists one must first assess whether
all parties or a combination of parties collectively control the arrangement. If all parties or a group of
parties must act in concert to decide on the arrangement’s activities it is deemed that all parties or that
group of parties collectively control the arrangement. Second it must be determined whether decisions
regarding the arrangement’s activities require the unanimous consent of the parties collectively
controlling the arrangement. If two or more groups of parties are capable of collectively controlling an
arrangement this does not constitute joint control. Protective rights are not considered when determining
whether joint control exists.Significant influence means that the investor has the power to participate in the decision-making
regarding the investee’s financial and operating policies but does not have the ability to control or
jointly control the formulation of those policies with other parties. In determining whether significant
influence can be exercised over the investee consideration is given to the voting shares held directly or
indirectly by the investor as well as the impact of current exercisable contingent voting rights held by
the investor and other parties assuming such rights are converted into equity interests in the investee.This includes the impact of currently convertible warrants stock options and convertible bonds issued
by the investee.When the Company holds either directly or indirectly through a subsidiary 20% (inclusive) or
more but less than 50% of the voting shares of an investee it is generally considered to have significant
influence over the investee unless there is clear evidence that under such circumstances the Company
cannot participate in the investee’s production and operational decision-making and therefore does not
exert significant influence.
(2) Determination of Initial Investment Cost
* The cost of a long-term equity investment arising from a business combination shall be
determined in accordance with the following provisions:
A. In a business combination under common control where the combining party provides cash
transfers non-cash assets or assumes liabilities as consideration for the combination the initial cost of
the long-term equity investment shall be the combining party’s share of the book value of the acquiree’s
equity in the ultimate controlling party’s consolidated financial statements as of the combination date.Any difference between the initial cost of the long-term equity investment and the book value of the
cash paid non-cash assets transferred and liabilities assumed shall be recorded in capital surplus; if
capital surplus is insufficient to absorb such difference the remaining amount shall be recorded in
retained earnings;
B. In a business combination under common control where the combining party issues equity
securities as consideration for the combination the initial cost of the long-term equity investment is
determined on the combination date based on the combining party’s share of the book value of the
acquiree’s equity as reported in the ultimate controlling party’s consolidated financial statements. The
total par value of the shares issued shall be recognized as share capital. The difference between the
initial investment cost of the long-term equity investment and the total par value of the shares issued
shall be recorded as an adjustment to capital surplus; if capital surplus is insufficient to absorb the
difference retained earnings shall be adjusted;
C. For business combinations not under common control the initial investment cost of the long-
term equity investment is determined as the fair value of the assets given up liabilities incurred or
assumed and equity securities issued to obtain control of the acquiree as of the acquisition date. The
acquirer recognizes audit legal valuation and other professional fees as well as other related
administrative expenses incurred in connection with the business combination in profit or loss in the
period in which they are incurred.* Except for long-term equity investments arising from business combinations the cost of long-
term equity investments acquired through other means shall be determined in accordance with the
following provisions:
A.For long-term equity investments acquired via cash payment the initial investment cost is the
actually paid purchase price. It encompasses expenses directly associated with the acquisition of the
long-term equity investments as well as taxes and other necessary expenditures.B. For long-term equity investments acquired through the issuance of equity securities the initial
investment cost is the fair value of the equity securities issued.C. For long-term equity investments acquired through an exchange of non-monetary assets if the
exchange has commercial substance and the fair value of the assets received or given up can be
measured reliably the initial investment cost shall be the fair value of the assets given up plus related
taxes; the difference between the fair value and the book value of the assets given up shall be recognized
in profit or loss for the current period; If the non-monetary asset exchange does not simultaneously meet
both of the above conditions the initial investment cost shall be the book value of the assets given up
and related taxes.D. For long-term equity investments acquired through debt restructuring the book value shall be
determined based on the fair value of the debt waived and other costs directly attributable to the asset
such as taxes. The difference between the fair value and the book value of the debt waived shall be
recognized in profit or loss for the current period.
(3) Subsequent Measurement and Profit/Loss Recognition
The Company accounts for long-term equity investments in entities over which it has control using
the cost method; long-term equity investments in associates and joint ventures are accounted for using
the equity method.* Cost Method
For long-term equity investments accounted for using the cost method the cost of the investment is
adjusted upon additional investments or the recovery of investments; cash dividends or profits declared
by the investee are recognized as investment income for the current period.* Equity Method
For long-term equity investments accounted for using the equity method the general accounting
treatment is as follows:
If the cost of the Company’s long-term equity investment exceeds the Company’s share of the fair
value of the investee’s identifiable net assets at the time of investment the initial cost of the long-term
equity investment is not adjusted; if the initial cost of the long-term equity investment is less than the
Company’s share of the fair value of the investee’s identifiable net assets at the time of investment the
difference is recognized in profit or loss for the current period and the cost of the long-term equity
investment is adjusted accordingly.The Company recognizes investment income and other comprehensive income based on its share of
the investee’s net profit or loss and other comprehensive income and simultaneously adjusts the book
value of the long-term equity investment; The Company calculates its share of the investee’s declared
profits or cash dividends and reduces the book value of the long-term equity investment accordingly;
other changes in the investee’s equity excluding net profit or loss other comprehensive income and
profit distributions are recognized by adjusting the book value of the long-term equity investment and
recording the adjustment in equity. When recognizing the Company’s share of the investee’s net profit
or loss the investee’s net profit is adjusted based on the fair value of the investee’s identifiable net assets
at the time of investment. If the investee’s accounting policies or reporting periods differ from those of
the Company the investee’s financial statements shall be adjusted in accordance with the Company’s
accounting policies and reporting periods and investment income and other comprehensive income shall
be recognized accordingly. Unrealized gains or losses arising from internal transactions between the
Company and its associates and joint ventures are eliminated to the extent attributable to the Company
based on its ownership interest and investment gains or losses are recognized on this basis. Unrealized
losses arising from internal transactions between the Company and its investees that constitute asset
impairment losses shall be recognized in full.Where an entity is able to exercise significant influence over or exercise joint control over an
investee—but does not have control—due to additional investments or other reasons the initial
investment cost for accounting under the equity method shall be the sum of the fair value of the
previously held equity investment and the cost of the new investment. If the previously held equity
investment was classified as an investment in other equity instruments the difference between its fair
value and book value as well as the cumulative gains or losses previously recognized in other
comprehensive income shall be reclassified from other comprehensive income to retained earnings in
the period in which the investment is reclassified to the equity method.If joint control or significant influence over an investee is lost due to the disposal of a portion of the
equity investment or other reasons the remaining equity interest after the disposal shall be measured at
fair value and the difference between its fair value and book value as of the date of loss of joint control
or significant influence shall be recognized in profit or loss for the current period. Other comprehensive
income previously recognized in respect of the equity investment under the equity method shall be
accounted for on the same basis as the direct disposal of assets or liabilities by the investee when the
entity ceases to apply the equity method.
(4) Equity Investments Held for Sale
For remaining equity investments not classified as held-for-sale assets the equity method is applied.For equity investments in associates or joint ventures that have been classified as held for sale but
no longer meet the criteria for classification as held-for-sale assets retrospective adjustments using the
equity method are applied from the date of classification as held-for-sale assets. Financial statements for
the period during which the investments were classified as held for sale are adjusted accordingly.
(5) Impairment Testing Methods and Recognition of Impairment Losses
For investments in subsidiaries associates and joint ventures the methods for recognizing asset
impairment are described in Section V 27 of this document.
20. Investment Properties
Not Applicable
21. Fixed Assets
(1) Recognition Conditions
?Applicable □ Not Applicable
Fixed assets are recognized at their actual cost at the time of acquisition when all of the following
conditions are met:
* Economic benefits related to the fixed assets are likely to flow into the enterprise.* The cost of the fixed assets can be reliably measured.Subsequent expenditures related to fixed assets are recorded in the cost of fixed assets if they meet
the recognition conditions for fixed assets; or recorded in the profit or loss for the current period if they
do not meet the recognition conditions for fixed assets.
(2) Depreciation Method
?Applicable □ Not Applicable
Residual Value Rate Annual Depreciation
Category Depreciation Method Depreciation Period
(%) Rate (%)
Housing and Structures
Housing and 20-40 years
Straight-Line Method 0-5 2.375-10.00
Structures Architectures 10-20
years
Machinery and
Straight-Line Method 3-20 years 0-5 4.75-33.33
Equipment
Transportation
Straight-Line Method 3-5 years 0-5 19.00-33.33
Tools
Office and Other
Straight-Line Method 3-15 years 0-5 6.33-33.33
Equipment
For fixed assets for which an impairment allowance has already been recognized the amount of the
impairment allowance is deducted when calculating depreciation.At the end of each year the Company reviews the useful lives estimated net salvage values and
depreciation methods of its fixed assets. If the estimated useful life differs from the original estimate the
useful life of the fixed asset is adjusted.
22. Construction in Progress
?Applicable □ Not Applicable
(1) Construction in progress is accounted for by project.
(2) Criteria and timing for transferring construction in progress to fixed assets
The entry value of a construction-in-progress project is determined by the total expenditures
incurred prior to the asset reaching its intended usable condition. This includes construction costs the
original cost of machinery and equipment other necessary expenditures incurred to bring the
construction-in-progress to its intended usable condition as well as borrowing costs incurred for loans
specifically raised for the project and borrowing costs incurred for general borrowings used for the
project prior to the asset reaching its intended usable condition. The Company transfers construction in
progress to fixed assets upon completion of installation or construction and attainment of the intended
usable condition. For fixed assets that have reached their intended usable condition but for which final
settlement has not yet been completed the Company will transfer them to fixed assets at an estimated
value based on the project budget cost estimate or actual project cost effective from the date they reach
their intended usable condition. Depreciation will be accrued in accordance with the Company’s fixed
asset depreciation policy. Upon completion of the final settlement the original estimated value will be
adjusted to reflect the actual cost; however the depreciation already accrued will not be adjusted.23. Borrowing Costs
?Applicable □ Not Applicable
(1) Recognition criteria and capitalization period for borrowing costs
Borrowing costs incurred by the Company that are directly attributable to the acquisition
construction or production of assets that meet the criteria for capitalization shall be capitalized and
included in the cost of the relevant assets when all of the following conditions are met:
* Expenditure for the asset has been incurred;
* Borrowing costs have been incurred;
* The necessary acquisition construction or production activities to bring the asset to its intended
usable or saleable state have commenced.Other borrowing costs discounts or premiums and foreign exchange differences are recognized in
profit or loss in the period in which they occur.If the construction or production of an asset eligible for capitalization is abnormally interrupted
and the interruption lasts for more than three consecutive months the capitalization of borrowing costs
shall be suspended.When the construction or production of an asset eligible for capitalization reaches a stage where it
is ready for use or sale the capitalization of borrowing costs shall cease; borrowing costs incurred
thereafter shall be recognized as expenses in the period in which they are incurred.
(2) Capitalization Rate for Borrowing Costs and Method for Calculating the Capitalized Amount
Where a specific loan is borrowed for the acquisition construction or production of assets that
meet the criteria for capitalization the capitalized amount of interest expenses on the specific loan shall
be determined as the actual interest expenses incurred during the current period less any interest income
earned from depositing unused loan funds in a bank or investment income earned from temporary
investments.Where general loans are used to acquire construct or produce assets that meet the criteria for
capitalization the amount of interest on the general loan to be capitalized shall be calculated by
multiplying the weighted average of asset expenditures exceeding the amount of the specific loan by the
capitalization rate of the general loan used. The capitalization rate shall be determined based on the
weighted average interest rate of the general loan.
24. Biological Assets
□Applicable ?Not Applicable
25. Oil and Gas Assets
□Applicable ?Not Applicable
26. Intangible Assets
(1) Useful life and its Determination Basis Estimation Amortization Method or Review
Procedures
?Applicable □ Not Applicable
(1) Valuation Method for Intangible Assets
Intangible assets are recorded at their actual cost at the time of acquisition.
(2) Useful Lives and Amortization of Intangible Assets
* Estimation of the useful lives of intangible assets with finite useful lives:
Item EstimatedUseful Life Basis
Land Use Rights 46-50 years Statutory rights
Software 2-10 years The useful life is determined based on the period during which the asset isexpected to generate economic benefits for the Company
Licenses for Patent 5 years The useful life is determined based on the period during which the asset isUsage expected to generate economic benefits for the Company
Rights to use drug 30years The useful life is determined based on the period during which the asset isapprovals expected to generate economic benefits for the Company
At the end of each year the Company reviews the useful lives and amortization methods of
intangible assets with finite useful lives. Upon review the useful lives and amortization methods of
intangible assets as of the end of the current period remain unchanged from previous estimates.* Intangible assets for which the period over which the entity will derive economic benefits cannot
be estimated are treated as having an indefinite useful life. For intangible assets with an indefinite useful
life the Company reviews their useful lives at the end of each fiscal year. If the useful life remains
indefinite after such review an impairment test is performed as of the balance sheet date.* Amortization of Intangible Assets
For intangible assets with finite useful lives the Company determines their useful lives upon
acquisition and amortizes them systematically and reasonably using the straight-line method over their
useful lives. The amortization expense is recognized in current period profit or loss or included in the
cost of the related asset depending on the source of benefit. The specific amount to be amortized is the
cost of the asset less its estimated residual value. For intangible assets for which an impairment loss has
been recognized the cumulative amount of the impairment loss provision must also be deducted. For
intangible assets with finite useful lives the residual value is assumed to be zero except in the following
circumstances: a third party has committed to purchase the intangible asset at the end of its useful life or
information regarding the estimated residual value is available from an active market and it is probable
that such a market will exist at the end of the intangible asset’s useful life.Intangible assets with indefinite useful lives are not amortized. At the end of each fiscal year the
useful life of intangible assets with indefinite useful lives is reviewed; if there is evidence that the useful
life of an intangible asset is finite its useful life is estimated and the asset is amortized systematically
and on a reasonable basis over its estimated useful life.
(2) Aggregation Scope of Research and Development Expenditures and Relevant Accounting
Treatment Methods
?Applicable □ Not Applicable
The Company classifies all expenses directly related to its research and development activities as
R&D expenses including employee compensation for R&D personnel direct input costs depreciation
expenses amortization of intangible assets expenses for outsourced research and development and
other expenses.
1. Specific criteria for differentiating research and development phases in the Company’s internal
research and development projects
* The Company classifies activities related to the preparation of materials and other aspects of
future development activities as the research phase and expenses incurred during the research phase of
intangible assets are recognized in profit or loss as incurred.* Development activities undertaken after the Company has completed the research phase are
classified as the development phase.
2. Specific Criteria for Capitalizing Development Phase Expenditures
Development phase expenditures may be recognized as intangible assets only if they meet all of the
following criteria:
A. Completion of the intangible asset to enable its use or sale is technically feasible;
B. There is an intention to complete the intangible asset and use or sell it;
C. The intangible asset generates economic benefits either by demonstrating the presence of a
market for products produced using the asset or by demonstrating the presence of a market for the asset
itself or by demonstrating its usefulness if it will be used internally;
D. There are adequate technical financial and other resources to complete the development of the
intangible asset and the Company is able to use or sell it;
E. Expenditures attributable to the development stage of the intangible asset can be reliably
measured.
27. Impairment of Long-term Assets
?Applicable □ Not Applicable
Impairment of assets such as long-term equity investments in subsidiaries associates and joint
ventures; investment property measured using the cost model; property plant and equipment;
construction in progress; right-of-use assets; intangible assets; and goodwill (excluding inventory
investment property measured at fair value deferred tax assets and financial assets) is determined as
follows:
At the balance sheet date the Company assesses whether there are any indications that an asset may
be impaired. If such indications exist the Company estimates the asset’s recoverable amount and
performs an impairment test. Goodwill arising from business combinations intangible assets with
indefinite useful lives and intangible assets not yet ready for use are tested for impairment annually
regardless of whether there are indications of impairment.Recoverable amount is determined as the higher of an asset’s fair value less costs of disposal and
the present value of its estimated future cash flows. The Company estimates the recoverable amount on
an individual asset basis; where it is not practicable to estimate the recoverable amount of an individual
asset the recoverable amount is determined on the basis of the asset group to which the asset belongs.The identification of an asset group is based on whether the primary cash inflows generated by the asset
group are independent of the cash inflows from other assets or asset groups.When the recoverable amount of an asset or asset group is lower than its book value the Company
writes down the book value to the recoverable amount. The amount of the write-down is recognized in
profit or loss for the current period and a corresponding impairment loss is recognized.For the purpose of goodwill impairment testing the book value of goodwill arising from a business
combination shall be allocated to the relevant asset groups using a reasonable method from the
acquisition date; where it is not practicable to allocate the goodwill to the relevant asset groups it shall
be allocated to the relevant group of asset groups. The relevant asset group or group of asset groups is an
asset group or group of asset groups that benefits from the synergies of the business combination and
does not exceed the reporting segments identified by the Company.When performing impairment tests if there are indications of impairment for an asset group or a
portfolio of asset groups related to goodwill the impairment test is first conducted on the asset group or
portfolio of asset groups that do not include goodwill to calculate the recoverable amount and recognize
the corresponding impairment loss. Then the impairment test is performed on the asset group or
portfolio of asset groups that include goodwill comparing their book value with the recoverable amount;
if the recoverable amount is lower than the book value an impairment loss on goodwill is recognized.Once an impairment loss on an asset is recognized it is not reversed in subsequent accounting
periods.
28. Long-term Deferred Expenses
?Applicable □ Not Applicable
Long-term Deferred Expenses represent various expenses that have been incurred by the Company
and should be borne by the current and future periods with an amortization period of more than one year.The Company's long-term deferred expenses are amortized on a straight-line basis over the benefit
period. The amortization periods for each type of expense are as follows:
Items Amortization Period
Field usage rights 20 years
Housing subsidies 9 years
Employee rewards 5 years
Production materials 1.5-5 years
Leasehold improvements 5 years
One-time expansion fee 11.77-21.33 years
Software service fee 5 years
29. Contract Liabilities
?Applicable □ Not Applicable
The Company’s obligation to transfer goods or provide services to customers in exchange for
consideration received or receivable from them is recognized as a contract liability.30. Employee Compensation
(1) Method for Accounting Treatment of Short-term Compensation
?Applicable □ Not Applicable
* Basic employee compensation (salaries bonuses allowances and subsidies)
The Company recognizes short-term compensation as a liability and records it in current period
profit or loss during the accounting period in which the employees render their services unless other
accounting standards require or permit its inclusion in the cost of assets.* Employee Benefits
Employee benefits incurred by the Company are recognized in current period profit or loss or
included in the cost of the relevant assets at the time they are incurred based on the actual amount
incurred. Employee benefits in the form of non-monetary benefits are measured at fair value.* Social insurance premiums (including medical work-related injury and maternity insurance
premiums) and housing provident fund contributions as well as union dues and employee education
funds
Social insurance premiums (including medical work-related injury and maternity insurance
premiums) and housing provident fund contributions paid by the Company on behalf of employees as
well as union dues and employee education funds allocated in accordance with regulations are
recognized as employee compensation during the accounting period in which the employees provide
services. The amounts are calculated based on the prescribed accrual bases and rates and corresponding
liabilities are recognized with the amounts included in current period profit or loss or the cost of related
assets.* Short-term paid leave
The Company recognizes employee compensation related to accrued paid leave when employees
render service that increases their future entitlement to paid leave measuring it at the expected future
payment amount based on the accrued unused entitlement. The Company recognizes employee
compensation related to non-accrued paid leave in the accounting period in which the employee actually
takes the leave.* Short-Term Profit-Sharing Plans
The Company recognizes the related employee benefit liability for a profit-sharing plan if all of the
following conditions are met:
A. The entity has a legal or constructive obligation to pay employee benefits as a result of past
events;
B. The amount of the employee benefit liability arising from the profit-sharing plan can be reliably
estimated.
(2) Method for Accounting Treatment of Post-Employment Benefits
?Applicable □ Not Applicable
* Defined Contribution Plans
During the accounting period in which employees render services to the Company the Company
recognizes as a liability the amount due under a defined contribution plan and includes it in current
profit or loss or in the cost of the related asset.If under the defined contribution plan the Company does not expect to pay the full amount of the
contribution liability within twelve months after the end of the reporting period in which the employees
render the related services the Company measures the total contribution liability as a discounted amount
using an appropriate discount rate (determined based on the market yield of government bonds or high-
quality corporate bonds in an active market that match the term and currency of the defined contribution
plan obligation as of the balance sheet date).* Defined Benefit Plans
A. Determining the Present Value of Defined Benefit Plan Obligations and Current Service Cost
Under the projected unit credit method the Company measures the obligations arising from defined
benefit plans and determines the periods to which those obligations relate by making estimates of
relevant demographic and financial variables using unbiased and consistent actuarial assumptions. The
Company discounts the obligations arising from the defined benefit plan using an appropriate discount
rate (determined based on the market yields of government bonds or high-quality corporate bonds in
active markets that match the term and currency of the defined benefit plan obligations as of the balance
sheet date) to determine the present value of the defined benefit plan obligations and the current service
cost.B. Recognition of a Defined Benefit Plan’s Net Liability or Net Asset
If a defined benefit plan holds assets the Company recognizes the deficit or surplus resulting from
the present value of the defined benefit plan’s obligations minus the fair value of the plan’s assets as a
defined benefit plan’s net liability or net asset.If a defined benefit plan has a surplus the Company measures the defined benefit plan’s net asset as
the lower of the plan’s surplus and the asset ceiling.C. Determining the Amount to be Included in the Cost of Assets or in Profit or Loss for the Period
Service costs including current service costs past service costs and settlement gains or losses. Of
these all service costs other than current service costs required or permitted by other accounting
standards to be included in the cost of assets are recognized in profit or loss for the period.Net interest on the net liability or net asset of a defined benefit plan including interest income on
plan assets interest expense on defined benefit plan obligations and interest arising from the asset
ceiling is recognized in current profit or loss.D. Determining the Amount to be Recognized in Other Comprehensive Income
Changes arising from the remeasurement of the net liability or net asset of a defined benefit plan
include:
(a) Actuarial gains or losses which are increases or decreases in the present value of the defined
benefit obligation previously measured resulting from adjustments to actuarial assumptions and
experience;
(b) returns on plan assets net of the amount included in the net interest on the defined benefit
plan’s net liability or net asset;
(c) changes in the effect of the asset ceiling net of the amount included in the net interest on the
defined benefit plan’s net liability or net asset.Changes in the net liability or net asset of the defined benefit plan resulting from the
remeasurement described above are recognized directly in other comprehensive income and may not be
reclassified to profit or loss in subsequent accounting periods. Upon termination of the original defined
benefit plan the Company transfers the entire amount previously recognized in other comprehensive
income to retained earnings within the scope of equity.
(3) Method for Accounting Treatment of Termination Benefits
?Applicable □ Not Applicable
When the Company provides termination benefits to employees it recognizes the employee benefit
liability arising from such termination benefits and includes it in current period profit or loss on the
earlier of the following two dates:
* When the Company cannot unilaterally withdraw the termination benefits offered in connection
with a plan to terminate employment relationships or a proposed workforce reduction;
* When the entity recognizes costs or expenses related to a restructuring involving the payment of
termination benefits.If termination benefits are not expected to be settled in full within twelve months after the end of
the reporting period the amount of the termination benefits shall be discounted using an appropriate
discount rate (determined based on the market yield of government bonds or high-quality corporate
bonds in an active market that match the term and currency of the defined benefit plan obligation as of
the balance sheet date) and the accrued employee benefits shall be measured at the discounted amount.
(4) Method for Accounting Treatment of Other Long-term Employee Benefits
?Applicable □ Not Applicable
* Meeting the criteria for establishing a defined contribution plan
For other long-term employee benefits provided by the Company to employees that meet the
criteria for establishing a defined contribution plan the total amount required to be contributed is
measured at its present value and recognized as an accrued employee benefit liability.* Meeting the criteria for establishing a defined benefit plan
At the end of the reporting period the Company recognizes employee compensation costs arising
from other long-term employee benefits as the following components:
A. Service cost;
B. Net interest on the net liability or net asset for other long-term employee benefits;
C. Changes arising from the remeasurement of the net liability or net asset for other long-term
employee benefits.To simplify the related accounting treatment the total net amount of the above items is included in
current profit or loss or in the cost of the related assets.
31. Estimated Liabilities
?Applicable □ Not Applicable
(1) Recognition Criteria for Estimated Liabilities
The Company recognizes the estimated Liabilities if the obligation associated with the contingent
event meets all of the following criteria:
* The obligation is a present obligation of the Company;
* It is probable that the settlement of the obligation will result in an outflow of economic benefits
from the Company;
* The amount of the obligation can be reliably measured.
(2) Measurement Method for Estimated Liabilities
Estimated liabilities are initially measured at the best estimate of the expenditure required to settle
the present obligation taking into account factors such as the risks uncertainties and the time value of
money related to the contingencies. At each balance sheet date the book value of the estimated liabilities
is reviewed. If there is conclusive evidence indicating that the book value does not reflect the current
best estimate the book value is adjusted to the current best estimate.
32. Share-based Payment
?Applicable □ Not Applicable
(1) Types of Share-based Payment
The share-based payment by the Company is categorized into share-based payment settled by cash
and share-based payment settled by equity.
(2) Method for Determining Fair Value of Equity Instruments
* For shares granted to employees their fair value is measured based on the market price of the
Company’s shares adjusted to reflect the terms and conditions under which the shares were granted
(excluding vesting conditions other than market conditions). * For stock options granted to employees
it is often difficult to obtain their market price. If there are no traded options with similar terms and
conditions the Company selects an appropriate option pricing model to estimate the fair value of the
options granted.
(3) Basis for Determining the Best Estimate of Exercisable Equity Instruments
At each balance sheet date during the vesting period the Company makes a best estimate of the
number of equity instruments expected to be exercised by adjusting the estimated number of such
instruments based on subsequent information such as changes in the number of eligible employees as it
becomes available.
(4) Accounting Treatment for Share-Based Payment Plans
Cash-settled Share-Based Payments
* Cash-settled share-based payments that vest immediately upon grant are recognized as an
expense or cost at the fair value of the liability incurred by the Company on the grant date with a
corresponding increase in liabilities. The fair value of the liability is remeasured at each balance sheet
date prior to settlement and on the settlement date with any changes recognized in profit or loss.* For cash-settled share-based payments that vest only upon completion of a vesting period or the
achievement of specified performance conditions the services received during the vesting period are
recognized as costs or expenses and a corresponding liability at the fair value of the liability assumed by
the Company based on the best estimate of vesting at each balance sheet date during the vesting period.Equity-settled Share-based Payment
* An equity-settled share-based payment granted in exchange for employee services that is
immediately exercisable is recognized as a cost or expense at the fair value of the equity instrument on
the grant date with a corresponding increase in capital surplus.* For equity-settled share-based payments in exchange for employee services that become
exercisable only after the completion of a vesting period or the satisfaction of specified performance
conditions the services received during the vesting period are recognized as cost or expense and capital
surplus at each balance sheet date during the vesting period based on the best estimate of the number of
equity instruments that will become exercisable using the fair value of the equity instruments at the
grant date.
(5) Accounting Treatment for Modifications to Share-Based Payment Plans
When the Company modifies a share-based payment plan if the modification increases the fair
value of the equity instruments granted the increase in services received is recognized in proportion to
the increase in the fair value of the equity instruments; if the modification increases the number of equity
instruments granted the fair value of the additional equity instruments is recognized as an increase in
services received. The increase in the fair value of the equity instruments refers to the difference
between the fair value of the equity instruments before and after the modification as of the modification
date. If the modification reduces the total fair value of the equity-settled payment or modifies the terms
and conditions of the equity-settled payment plan in a manner that is otherwise disadvantageous to
employees the Company continues to account for the services received as if the change had never
occurred unless the Company cancels some or all of the equity instruments already granted.
(6) Accounting for the Termination of Share-Based Payment Plans
If an equity instrument granted is canceled or settled during the vesting period (except for
cancellations due to failure to meet vesting conditions) the Company:
* Treats the cancellation or settlement as an accelerated vesting event and immediately recognizes
the amount that would otherwise have been recognized over the remaining vesting period;
* Any payments made to employees upon cancellation or settlement shall be treated as a
repurchase of equity; the portion of the repurchase payment that exceeds the fair value of the equity
instrument on the repurchase date shall be recognized as an expense in the current period.If the Company repurchases equity instruments that have become exercisable by its employees it
shall reduce its equity; the portion of the repurchase payment that exceeds the fair value of the equity
instrument on the repurchase date shall be recognized in profit or loss for the current period.
33. Preferred Shares Perpetual Bonds and Other Financial Instruments
□Applicable ?Not Applicable
34. Revenue
(1) Accounting Policies for Disclosure of Revenue Recognition and Measurement by Business Type
?Applicable □ Not Applicable
(1) General Principles
Revenue is the total inflow of economic benefits arising from the Company’s ordinary activities
that results in an increase in shareholders’ equity and is not attributable to contributions of capital by
shareholders.The Company recognizes revenue when it has satisfied the performance obligations under a
contract that is when the customer obtains control of the relevant goods. Obtaining control of the
relevant goods means having the ability to direct the use of the goods and derive substantially all of the
economic benefits from them.If a contract contains two or more performance obligations the Company allocates the transaction
price to each performance obligation at the contract date based on the relative proportion of the separate
selling prices of the goods or services promised under each performance obligation and measures
revenue based on the transaction price allocated to each performance obligation.The transaction price is the amount of consideration to which the Company expects to be entitled in
exchange for the transfer of goods or services to a customer excluding amounts collected on behalf of
third parties. When determining the transaction price of a contract if variable consideration exists the
Company determines the best estimate of the variable consideration based on the expected value or the
most likely amount and includes it in the transaction price up to an amount that is unlikely to result in a
material reversal of the cumulative revenue recognized when the related uncertainty is resolved. If a
contract contains a significant financing component the Company determines the transaction price
based on the amount payable in cash by the customer upon obtaining control of the goods. The
difference between this transaction price and the contract consideration is amortized over the contract
period using the effective interest method. The Company disregards the financing component if the
interval between the transfer of control and the customer’s payment of the price does not exceed one
year.If any of the following conditions are met the performance of the entity’s performance obligations
is deemed to occur over a period of time; otherwise it is deemed to occur at a point in time:
* The customer obtains and consumes the economic benefits resulting from the entity’s
performance at the same time the entity performs;
* The customer is able to control the goods in the process of being produced during the
Company’s performance;
* The goods produced during the Company’s performance have a non-substitutable use and the
Company has the right to collect payment for the portion of performance completed to date throughout
the term of the contract.For performance obligations satisfied over a period of time the Company recognizes revenue over
that period based on the stage of completion unless the stage of completion cannot be reasonably
determined. The Company determines the stage of completion for the provision of services using the
input method (or output method). When the stage of completion cannot be reasonably determined if the
costs already incurred by the Company are expected to be recovered revenue is recognized based on the
amount of costs already incurred until the stage of completion can be reasonably determined.For performance obligations satisfied at a specific point in time the Company recognizes revenue
when the customer obtains control of the relevant goods. In determining whether the customer has
obtained control of the goods or services the Company considers the following indicators:
* The Company has a present right to receive payment for the goods or services meaning the
customer has a present obligation to pay for them;
* The Company has transferred legal title to the goods to the customer meaning the customer has
acquired legal title to the goods;
* The Company has transferred physical possession of the goods to the customer meaning the
customer has taken physical possession of the goods;
* The Company has transferred the significant risks and rewards of ownership of the goods to the
customer meaning the customer has assumed the significant risks and rewards of ownership of the
goods;
* The customer has accepted the goods.
(2) Specific Methods
The Company’s specific revenue recognition methods are as follows:
The Company's business of selling products such as food flavor and texture optimization products
animal nutrition amino acids and human medical amino acids typically only involves the obligation to
transfer goods. The revenue recognition policy primarily makes a distinction between domestic and
export customer classifications. The specific methods for revenue recognition are as follows:
Domestic Sales: According to the contracts or orders signed with the customer revenue realization
is recognized by the Company at the moment when goods are delivered to the customer and the
customer takes control over the goods upon receipt.Exports: After goods are shipped the timing of revenue recognition is determined based on the
specific trade terms:
* Under FOB FCA CIF CFR CIP and CPT terms control of the goods is transferred once the
goods have been loaded onto the vessel and cleared for export. The company recognizes revenue based
on the export date indicated on the customs declaration.* Under DAP and DDP terms revenue is recognized when the goods have been cleared for export
customs formalities have been completed and the customs declaration has been obtained and the goods
have been delivered to the destination and accepted by the customer.
(2) Different Revenue Recognition and Measurement Methods for Similar Businesses with
Different Operating Models
□Applicable ?Not Applicable
35. Contract Costs
?Applicable □ Not Applicable
Contract costs are classified into Contract Performance Costs and Contract Obtaining Costs.Costs incurred by the Company in fulfilling a contract are recognized as an asset as Contract
Performance Costs when all of the following conditions are met:
* The cost is directly related to a contract either currently or expected to be obtained including
direct labor direct materials manufacturing expenses (or similar expenses) costs explicitly borne by the
customer and other costs incurred solely due to the contract;
* The cost increases the resources available for the Company to fulfill its performance obligations;
* The cost is expected to be recoverable.The Company recognizes as an asset the incremental costs incurred to secure a contract provided
that such costs are expected to be recovered.Assets related to contract costs are amortized on the same basis as the revenue from the goods or
services to which they relate; however for contract obtaining costs with an amortization period of one
year or less the Company recognizes them in profit or loss in the period in which they are incurred.For assets related to contract costs if the book value exceeds the sum of the following two items
the Company will recognize an impairment loss on the excess amount and further consider whether to
recognize a provision for losses related to the onerous contract:
* The remaining consideration expected to be received from the transfer of the goods or services
related to the asset;
* The estimated costs to be incurred in transferring the related goods or services.If an impairment loss provision for the aforementioned assets is subsequently reversed the book
value of the asset after the reversal shall not exceed the book value that the asset would have had on the
date of reversal had no impairment loss provision been recognized.Contract performance costs recognized as assets are classified under “Inventories” if the
amortization period upon initial recognition does not exceed one year or one normal operating cycle; if
the amortization period upon initial recognition exceeds one year or one normal operating cycle they are
classified under “Other Non-current Assets.”
Contract obtaining costs recognized as assets are classified under “Other Current Assets” if the
amortization period at initial recognition does not exceed one year or one normal operating cycle and
under “Other Non-current Assets” if the amortization period at initial recognition exceeds one year or
one normal operating cycle.
36. Government Grants
?Applicable □ Not Applicable
(1) Recognition of Government Grants
Government grants may be recognized only if all of the following conditions are met:
* The Company is able to satisfy the conditions attached to the government grant;
* The Company is able to receive the government grant.
(2) Measurement of Government Grants
Government grants that are monetary assets are measured at the amount received or receivable.Government grants that are non-monetary assets are measured at fair value; if fair value cannot be
reliably determined they are measured at a nominal amount of 1 yuan.
(3) Accounting Treatment of Government Grants
* Asset-Related Government Grants
Government grants received by the Company for the purpose of acquiring constructing or
otherwise forming long-lived assets are classified as asset-related government grants. Asset-related
government grants are recognized as deferred income and are amortized to profit or loss over the useful
life of the related asset using a reasonable and systematic method. Government grants measured at their
nominal amount are recognized directly in profit or loss for the current period. If the related asset is sold
transferred scrapped or destroyed before the end of its useful life the unamortized balance of the
related deferred income is transferred to profit or loss in the period of the asset’s disposal.* Government Grants Related to Income
Government grants other than those related to assets are classified as government grants related to
income. Government grants related to income are accounted for in accordance with the following
provisions depending on the circumstances:
If the grant is intended to compensate for the Company’s related costs expenses or losses in future
periods it is recognized as deferred income and is included in current period profit or loss in the period
in which the related costs expenses or losses are recognized;
If the grant is intended to compensate for the Company’s related costs expenses or losses that have
already been incurred it is directly included in current period profit or loss.For government grants that include both asset-related and income-related components the
components shall be distinguished and accounted for separately; if such distinction is difficult to make
the grant shall be classified in its entirety as an income-related government grant.Government grants related to the Company’s ordinary activities shall be recognized as other
income in accordance with the economic substance of the transaction. Government grants unrelated to
the Company’s ordinary activities shall be recognized as non-operating income or expenses.* Interest Subsidies on Policy-Based Preferential Loans
When the government disburses interest subsidy funds to the lending bank and the lending bank
provides a loan to the Company at a policy-based preferential interest rate the loan is recorded at the
actual amount received and the related borrowing costs are calculated based on the principal amount
and the policy-based preferential interest rate.When the government disburses interest subsidy funds directly to the Company the Company
offsets the corresponding interest subsidy against the related borrowing costs.* Return of Government Grants
When a previously recognized government grant must be returned if the grant was used to reduce
the book value of a related asset at the time of initial recognition the book value of the asset is adjusted;
if there is a balance of deferred income related to the grant the book amount of the deferred income is
reduced and any excess is recognized in profit or loss for the current period; in all other cases the
amount is recognized directly in profit or loss for the current period.
37. Deferred Income Tax Assets / Deferred Income Tax Liabilities
?Applicable □ Not Applicable
The Company generally recognizes and measures the tax effects of taxable temporary differences
or deductible temporary differences as deferred income tax liabilities or deferred income tax assets
respectively using the balance sheet liability method based on temporary differences between the book
value of assets and liabilities at the balance sheet date and their tax bases. The Company does not
discount deferred income tax assets or deferred income tax liabilities.
(1) Recognition of Deferred Income Tax Assets
For deductible temporary differences tax loss carryforwards and tax credits that can be carried
forward to future years the tax effect is calculated using the income tax rate expected to apply in the
period of reversal and this amount is recognized as a deferred income tax asset to the extent that it is
probable the Company will have future taxable income against which the deductible temporary
differences tax loss carryforwards and tax credits can be utilized.For transactions or events that have the following characteristics the income tax effect of a
deductible temporary difference arising from the initial recognition of an asset or liability shall not be
recognized as a deferred income tax asset:
A. The transaction is not a business combination;
B. At the time of the transaction it affects neither accounting profit nor taxable income (or
deductible losses).However this exemption from the initial recognition of deferred income tax liabilities and deferred
income tax assets does not apply to individual transactions that satisfy both of the above conditions and
result in taxable temporary differences and deductible temporary differences of equal amounts arising
from the initial recognition of assets and liabilities. For taxable temporary differences and deductible
temporary differences arising from the initial recognition of assets and liabilities in such a transaction
the Company recognizes corresponding deferred income tax liabilities and deferred income tax assets at
the time of the transaction.The Company recognizes deferred income tax assets for the tax effects of deductible temporary
differences arising from investments in subsidiaries associates and joint ventures only if both of the
following conditions are met:
A. It is probable that the temporary difference will reverse in the foreseeable future;
B. It is probable that taxable income will be available in the future against which the deductible
temporary differences can be utilized;
At the balance sheet date if there is clear evidence that sufficient taxable income will likely be
available in future periods to utilize the deductible temporary differences the Company recognizes
deferred income tax assets that were not recognized in prior periods.At the balance sheet date the Company reviews the book value of deferred income tax assets. If it
is probable that sufficient taxable income will not be available in future periods to utilize the benefits of
the deferred income tax assets the book value of the deferred income tax assets is written down. When it
becomes probable that sufficient taxable income will be available the amount of the write-down is
reversed.
(2) Recognition of Deferred Income Tax Liabilities
The Company measures the income tax effect of all taxable temporary differences using the income
tax rate expected to apply in the period of reversal and recognizes that amount as a deferred income tax
liability except in the following cases:
* The income tax effect of taxable temporary differences arising from the following transactions
or events is not recognized as a deferred income tax liability:
A. The initial recognition of goodwill;
B. The initial recognition of assets or liabilities arising from transactions that do not qualify as
business combinations and that at the time of the transaction affect neither accounting profit nor taxable
income or deductible losses.* The Company generally recognizes the tax effect of taxable temporary differences arising from
investments in subsidiaries joint ventures and associates as deferred income tax liabilities except where
both of the following conditions are met:
A. The Company is able to control the timing of the reversal of the temporary difference;
B. It is highly probable that the temporary difference will not reverse in the foreseeable future.
(3) Recognition of Deferred Income Tax Liabilities or Assets Arising from Specific Transactions or
Events
* Deferred Income Tax Liabilities or Assets Related to Business Combinations
Taxable temporary differences or deductible temporary differences arising from business
combinations under non-common control are recognized as deferred income tax liabilities or deferred
income tax assets; at the same time the related deferred tax expense (or income) is generally recognized
as an adjustment to the goodwill recognized in the business combination.* Items recognized directly in equity
Current and deferred income taxes relating to transactions or events recognized directly in equity
are recognized in equity. Transactions or events for which the tax effect of temporary differences is
recognized in equity include: other comprehensive income arising from changes in the fair value of other
debt investments; adjustments to opening retained earnings resulting from changes in accounting
policies applied retrospectively or from the retrospective restatement of prior-period (material)
accounting errors; and hybrid financial instruments containing both liability and equity components
which are recognized in equity upon initial recognition.* Tax Loss Carryforwards and Tax Credits
A. Tax Loss Carryforwards and Tax Credits Arising from the Company’s Own Operations
The tax loss carryforward refers to a loss that in accordance with tax laws is allowed to be offset
against taxable income in future years. Unutilized tax loss carryforwards (tax loss carryforwards) and tax
credits that may be carried forward to future years in accordance with tax laws are treated as deductible
temporary differences. When it is probable that sufficient taxable income will be available in future
periods to utilize the net operating loss carryforwards or tax credits a deferred income tax asset is
recognized to the extent of such probable taxable income and the income tax expense in the current
period’s income statement is reduced accordingly.B. Unutilized tax losses of the acquiree arising from a business combination
In a business combination if the Company acquires deductible temporary differences of the
acquiree that do not meet the criteria for recognition as deferred income tax assets as of the acquisition
date such deferred income tax assets shall not be recognized. If within 12 months after the acquisition
date new or further information is obtained indicating that the relevant circumstances existing at the
acquisition date were already present and it is expected that the economic benefits arising from the
acquiree’s deductible temporary differences as of the acquisition date will be realized the related
deferred income tax assets shall be recognized and goodwill shall be reduced accordingly. If the
goodwill is insufficient to absorb the reduction the excess amount shall be recognized in profit or loss
for the current period. Except for the circumstances described above deferred income tax assets related
to a business combination shall be recognized and charged to profit or loss for the current period.* Temporary differences arising from consolidation eliminations
When preparing consolidated financial statements if the Company recognizes deferred income tax
assets or deferred income tax liabilities in the consolidated balance sheet due to temporary differences
arising from the elimination of unrealized gains or losses on internal sales—where the book value of
assets and liabilities in the consolidated balance sheet differ from their tax bases in the respective taxable
entities— while simultaneously adjusting the income tax expense in the consolidated income statement
except for deferred income taxes related to transactions or events recognized directly in equity and
business combinations.* Dividends on Financial Instruments Classified as Equity Instruments
For financial instruments classified as equity instruments issued by the Company if the related
dividend payments are deductible for corporate income tax purposes in accordance with tax regulations
the Company recognizes the income tax impact associated with the dividends when it recognizes the
dividend payable. If the distributed profits arise from transactions or events that generated profit or loss
in prior periods the income tax effect of such dividends is recognized in current profit or loss; if the
distributed profits arise from transactions or events previously recognized in equity the income tax
effect of such dividends is recognized in equity.
(4) Basis for presenting deferred income tax assets and deferred income tax liabilities as the net
amount
When the following conditions are met simultaneously deferred income tax assets and deferred
income tax liabilities are presented as the net amount after offset:
* The Company has the legal right to settle current income tax assets and liabilities on a net basis;
* Deferred income tax assets and deferred income tax liabilities relate either to income taxes levied
by the same tax authority on the same taxable entity or to different taxable entities. However for each
significant period in which deferred income tax assets and deferred income tax liabilities are reversed in
the future the intention of the entity involved is to settle the current income tax assets and liabilities on a
net basis or to simultaneously obtain assets and settle liabilities.
38. Leasing
?Applicable □ Not Applicable
Judgement Basis and Accounting Treatment Method for Simplified Disposal of Short-term Leases
and Leases of Low-value Assets as Lessee
?Applicable □ Not Applicable
At the commencement of the lease term the Company classifies leases with a term of 12 months or
less and that do not include a purchase option as short-term leases; it classifies leases where the value of
the individual leased asset is low when new as low-value asset leases. If the Company subleases or
intends to sublease the leased asset the original lease is not classified as a low-value asset lease.For all short-term leases and low-value asset leases the Company capitalizes lease payments into
the cost of the related asset or recognizes them in profit or loss on a straight-line basis over the lease
term.Except for the short-term leases and low-value asset leases treated under the simplified approach
described above the Company recognizes a right-of-use asset and a lease liability at the commencement
date of the lease.* Right-of-Use Assets
The right-of-use asset is the right of the lessee to use a leased asset during the lease term.At the commencement of the lease term a right-of-use asset is initially measured at cost. This cost
includes:
* The initial measurement amount of the lease liability;
* Lease payments made on or before the commencement of the lease term net of any lease incentives
already received if applicable;
* Initial direct costs incurred by the lessee;
* Costs expected to be incurred by the lessee for dismantling and removing the leased asset restoring
the site where the leased asset is located or returning the leased asset to the condition specified in the
lease terms. The Company recognizes and measures these costs in accordance with the criteria and
methods for recognizing and measuring contingent liabilities; see Section V 31 for details. The
aforementioned costs if incurred for the production of inventory are included in the cost of inventory.Depreciation of right-of-use assets is calculated using the straight-line method. For leases where it
can be reasonably determined that ownership of the leased asset will be obtained at the end of the lease
term the depreciation rate is determined based on the category of the right-of-use asset and the
estimated residual value rate over the expected remaining useful life of the leased asset; for leases where
it cannot be reasonably determined that ownership of the leased asset will be obtained at the end of the
lease term depreciation is calculated over the shorter of the lease term and the remaining useful life of
the leased asset using the depreciation rate applicable to the category of the right-of-use asset.The depreciation methods depreciation periods residual values and annual depreciation rates for
each category of right-of-use assets are as follows:
Depreciation Depreciation Period Residual Value Rate Annual Depreciation
Category
Method (Years) (%) Rate (%)
Straight-Line
Housing and Structures Lease Term -- 20.00-34.55
Method
Straight-Line
Transportation Tools Lease Term -- 20
Method
* Lease Liabilities
Lease liabilities shall be initially measured at the present value of the lease payments not yet paid as
of the commencement date of the lease term. Lease payments consist of the following five components:
* Fixed payments and payments that are effectively fixed net of any lease incentives if applicable;
* Variable lease payments that depend on an index or rate;
* The exercise price of a purchase option provided the lessee reasonably expects to exercise that
option;
* Amounts payable upon exercising a termination option provided the lease term reflects that the
lessee expects to exercise the termination option;
* Amounts expected to be paid based on the residual value of guarantees provided by the lessee.The present value of lease payments is calculated using the implicit rate of the lease as the discount
rate; if the implicit rate cannot be determined the Company’s incremental borrowing rate is used as the
discount rate. The difference between the lease payments and their present value is considered as
unrecognized financing costs. Interest expense is recognized in each period of the lease term using the
discount rate applied to determine the present value of the lease payments and is included in profit or
loss for the period. Variable lease payments not included in the measurement of the lease liability are
recognized in profit or loss when they are incurred.After the commencement date of the lease term if there is a change in the effective fixed payments
a change in the expected amount payable for the guaranteed residual value a change in the indices or
rates used to determine the lease payments or a change in the valuation or actual exercise of a purchase
option renewal option or termination option the Company remeasures the lease liability based on the
present value of the revised lease payments and adjusts the book amount of the right-of-use asset
accordingly.Classification Criteria and Accounting Treatment Method for Leases as Lessor
?Applicable □ Not Applicable
On the lease commencement date the Company classifies leases that transfer substantially all the
risks and rewards incidental to ownership of the leased asset as finance leases; all other leases are
classified as operating leases.* Operating Leases
The Company recognizes lease receipts as rental revenue on a straight-line basis over the lease term.Initial direct costs incurred are capitalized and amortized on the same basis as the recognition of rental
revenue with the amortization charged to current profit or loss. Variable lease payments related to
operating leases that are not included in lease receipts are recognized in current profit or loss when
incurred.* Finance Leases
At the commencement of the lease the Company recognizes a finance lease receivable equal to the
net investment in the lease (the sum of the unguaranteed residual value and the present value of lease
payments not yet received at the commencement of the lease term discounted using the implicit interest
rate of the lease) and derecognizes the finance lease asset. During each period of the lease term the
Company calculates and recognizes interest income using the implicit interest rate of the lease.Variable lease payments received by the Company that are not included in the measurement of the
net investment in the lease are recognized in profit or loss in the period in which they are incurred.
39. Other Significant Accounting Policies and Estimates
?Applicable □ Not Applicable
(I) Work Safety Expenses and Maintenance and Renovation Expenses
The Company sets aside work safety expenses in accordance with national regulations which are
included in the cost of related products or in current period profit or loss and simultaneously recorded
under the “Special Reserve” account.When work safety expenses and maintenance and renovation expenses are used within the
prescribed scope if they constitute expense-type expenditures they are directly charged to Special
Reserves; if they result in fixed assets the incurred expenditures are first aggregated in the
“Construction in Progress” account. Upon completion of the safety project and attainment of its intended
usable condition the assets are recognized as fixed assets; simultaneously Special Reserves are reduced
by the cost of the fixed assets and accumulated depreciation of the same amount is recognized. No
further depreciation is charged on these fixed assets in subsequent periods.(II) Repurchase of Company Shares
(1) Where the Company reduces its capital by repurchasing its own shares in accordance with
statutory procedures and upon approval the share capital shall be reduced by the total par value of the
shares canceled. The difference between the purchase price paid for the repurchased shares (including
transaction costs) and the par value of the shares shall be adjusted against equity. Any amount exceeding
the total par value shall be offset against capital reserves (share premium) retained earnings and
undistributed profits in that order; if the amount is less than the total par value the shortfall shall be
added to capital reserves (share premium).
(2) Shares repurchased by the Company shall be managed as treasury stock until they are canceled
or transferred and all expenses incurred in repurchasing the shares shall be recorded as the cost of
treasury stock.
(3) Upon the transfer of treasury stock the portion of the transfer proceeds exceeding the cost of
treasury stock shall be credited to capital surplus (share premium); the portion below the cost of treasury
stock shall be offset against capital surplus (share premium) retained earnings and undistributed profits
in that order.(III) Debt Restructuring
(1) When the Company acts as a creditor
In cases of debt restructuring through the settlement of debt with assets the Company initially
recognizes assets other than the acquired financial assets at cost. The cost of inventory includes the fair
value of the waived claim and other costs directly attributable to the asset such as taxes transportation
costs loading and unloading costs and insurance premiums incurred in bringing the asset to its present
location and condition. The cost of an investment in an associate or joint venture includes the fair value
of the waived claim and other costs directly attributable to the asset such as taxes. The cost of
investment property includes the fair value of the waived claims and other costs directly attributable to
the asset such as taxes. The cost of fixed assets includes the fair value of the waived claims and other
costs directly attributable to the asset such as taxes transportation costs loading and unloading costs
installation costs and professional service fees incurred before the asset reaches its intended usable
condition. The cost of intangible assets includes the fair value of the debt waived and other costs directly
attributable to bringing the asset to its intended use such as taxes. The difference between the fair value
of the debt waived and the book amount is recognized in profit or loss for the current period.Where a debt restructuring involving the conversion of debt into equity instruments results in the
Company converting a receivable into an equity investment in an associate or joint venture the
Company measures the initial investment cost based on the fair value of the waived receivable and other
costs directly attributable to the asset such as taxes. The difference between the fair value and the book
value of the waived receivable is recognized in profit or loss for the current period.Where a debt restructuring is carried out by modifying other terms the Company recognizes and
measures the restructured debt in accordance with the accounting policies described in Section 5.11 of
this chapter.In the case of a debt restructuring involving the settlement of debt with multiple assets or a
combination of assets the Company first recognizes and measures the acquired financial assets and the
restructured receivables in accordance with the provisions of Section 5.11 of this chapter. It then
allocates the net amount of the fair value of the waived claim—after deducting the recognized amounts
of the acquired financial assets and restructured receivables—proportionally to the fair values of the
assets other than the acquired financial assets and uses this allocation as the basis for determining the
cost of each asset separately in accordance with the aforementioned methods. The difference between
the fair value and the book value of the waived claim is recognized in profit or loss for the current period.
(2) When the Company acts as the debtor
In the case of debt restructuring through the settlement of debt with assets the Company
derecognizes the relevant assets and the settled debt when they meet the criteria for derecognition; the
difference between the book value of the settled debt and the book value of the transferred assets is
recognized in profit or loss for the current period.In the case of debt restructuring by converting debt into equity instruments the Company
derecognizes the debt when it meets the criteria for derecognition. Upon initial recognition of the equity
instruments the Company measures them at fair value; if the fair value of the equity instruments cannot
be reliably measured they are measured at the fair value of the debt being settled. The difference
between the book value of the debt being settled and the recognized amount of the equity instruments is
recognized in profit or loss for the current period.In the case of a debt restructuring involving the modification of other terms the Company
recognizes and measures the restructured debt in accordance with the accounting policies described in
Section 5.11 of this chapter.Where debt is restructured by settling the debt with multiple assets or through a combination of
methods the Company recognizes and measures the equity instruments and restructured debt in
accordance with the aforementioned methods. The difference between the book value of the debt settled
and the sum of the book value of the transferred assets and the recognized amounts of the equity
instruments and restructured debt is recognized in profit or loss for the current period.(IV) Significant Accounting Judgments and Estimates
The Company continuously evaluates its significant accounting estimates and key assumptions
based on historical experience and other factors including reasonable expectations regarding future
events. The significant accounting estimates and key assumptions that pose a risk of causing a material
adjustment to the book amounts of assets and liabilities in the next fiscal year are listed below:
(1) Classification of Financial Assets
The significant judgments involved in determining the classification of financial assets include an
analysis of the business model and the characteristics of contractual cash flows.The Company determines the business model used to manage financial assets at the portfolio level
taking into account factors such as the manner in which the performance of financial assets is evaluated
and reported to key management personnel the risks affecting the performance of financial assets and
how those risks are managed and the manner in which relevant business managers are compensated.In assessing whether the contractual cash flows of a financial asset are consistent with a basic
lending arrangement the Company makes the following key judgments: whether the principal is subject
to changes in its timing or amount during the term of the asset due to prepayment or other reasons; and
whether the interest solely reflects the time value of money credit risk other basic lending risks and the
consideration for costs and profit. For example whether the prepayment amount reflects only the
outstanding principal interest based on the outstanding principal and reasonable compensation for the
early termination of the contract.
(2) Measurement of Expected Credit Losses on Accounts Receivable
The Company calculates expected credit losses on accounts receivable based on the exposure to
default risk and the expected credit loss rate with the expected credit loss rate determined on the basis of
the probability of default and the loss given default. In determining the expected credit loss rate the
Company uses data such as internal historical credit loss experience and adjusts historical data based on
current conditions and forward-looking information. When considering forward-looking information the
Company uses indicators such as the risk of an economic downturn changes in the external market
environment the technological environment and changes in customer circumstances. The Company
regularly monitors and reviews the assumptions related to the calculation of expected credit losses.
(3) Deferred Income Tax Assets
Deferred income tax assets should be recognized for all unused tax losses to the extent that it is
probable that sufficient taxable income will be available against which to utilize the losses. This requires
management to exercise significant judgment in estimating the timing and amount of future taxable
income taking into account tax planning strategies to determine the amount of deferred tax assets to be
recognized.
40. Changes in Significant Accounting Policies and Estimates
(1) Changes in Significant Accounting Policies
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Name of financial
Changes in accounting policies and the reasons statement item Amount affected
significantly affected
The Company will apply ‘Interpretation No. 20 of the Enterprise
Accounting Standards’ (Cai Kui [2026] No. 7) issued by the Ministry of None None
Finance on 4 June 2026 with effect from 1 January 2026.Other information
None
(2) Changes in Significant Accounting Estimates
□Applicable ?Not Applicable
(3) Financial Statements Involving Adjustments to the First-Time Implementation of New
Accounting Standards or Interpretations from 2026 Onward
□Applicable ?Not Applicable
41. Others
□Applicable ?Not Applicable
VI. Taxes
1. Major Tax Types and Tax Rates
Major Tax Types and Tax Rates
?Applicable □ Not Applicable
Tax Type Basis of Taxation Tax Rate
Domestic Sales 19% 13% 9% 7% 0% tax-free
Provision of Real Estate Leasing Services 9%
Value-added Tax
Other Taxable Sales and Services 6%
Simplified Tax Calculation Method 5% or 3%
Consumption Tax
Business Tax
Urban Maintenance and
Actually Paid Turnover Tax Amount 7% 5%
Construction Tax
Corporate Income Tax Taxable Income For details see *1
The tax base is 70% of the original value of
Property Tax 12% 1.2%
the property (or rental income).Progressive tax rate (0.3%–0.5%)
Property Tax Appraised value of real estate and land
4.5931%
Education Surcharge Actually Paid Turnover Tax Amount 3%
Local Education Surcharge Actually Paid Turnover Tax Amount 2%
*1 The corporate income tax rates are set out in the table below.Elaboration on the disclosure of entities taxed at differing corporate income tax rates.?Applicable □ Not Applicable
Taxpayer Name Income Tax Rate (%)
The Company 15
Meihua Group International Trading (Hong Kong) Limited (hereinafter referred to
16.5
as "Hong Kong Meihua")*
Langfang Meihua Seasoning Co. Ltd. (hereinafter referred to as "Langfang
25
Seasoning")
Tongliao Meihua Seasoning Co. Ltd. (hereinafter referred to as "Tongliao
25
Seasoning")
Langfang Meihua Bio-Technology Development Co. Ltd. (hereinafter referred to
15
as "Langfang Development")
Langfang BAIAN Technology Co. Ltd. (hereinafter referred to as "Langfang
25
BAIAN")
Meihua (Shanghai) Biotechnology Co. Ltd. (hereinafter referred to as "Shanghai R
20
& D")
Lhasa Meihua Bio-investment Holdings Co. Ltd. (hereinafter referred to as
25
"Lhasa Meihua")
Tongliao Meihua Biotechnology Co. Ltd. (hereinafter referred to as "Tongliao
15
Meihua")Tongliao Jianlong Chemical Co. Ltd. (hereinafter referred to as “Tongliao
25Jianlong”)
Xinjiang Meihua Amino Acid Co. Ltd. (hereinafter referred to as "Xinjiang
15
Meihua")
Xinjiang Meihua Agricultural Development Co. Ltd. (hereinafter referred to as
25
"Xinjiang Agriculture")Wujiaqu Jianlong Chemical Co. Ltd. (hereinafter referred to as “Wujiaqu
25Jianlong”)
Jilin Meihua Amino Acid Co. Ltd. (hereinafter referred to as "Jilin Meihua") 15
Zhuhai Hengqin Meihua Biotechnology Co. Ltd. (hereinafter referred to as
25
"Hengqin Meihua")
HONG KONG PLUM HOLDING LIMITED (hereinafter referred to as "Hong
16.5
Kong Holdings")*
CAYMAN PLUM HOLDING LIMITED (hereinafter referred to as "Cayman
0
Company")
PLUM BIOTECHNOLOGY GROUP PTE.LTD. (hereinafter referred to as
15
“Singapore Company”)
Plumino Precision Fermentation Holdings Pte. Ltd. (hereinafter referred to as
17
“SPV”)
Shanghai Plumino Amino Acids Co. Ltd. (hereinafter referred to as “SP”) 25
Plumino Precision Fermentation(Thailand) Co . Ltd. (hereinafter referred to as
20
“TP”)
29.7% (including a federal
Plumino Precision Fermentation US HoldingsInc. (hereinafter referred to as corporate income tax rate of 21%
“PUS”) and a state corporate income tax
rate of 8.7%)
25% (including a federal corporate
Plumino Precision Fermentation USA Inc. (hereinafter referred to as “UP”) income tax rate of 21% and a state
corporate income tax rate of 4%)
29.7% (including a federal
corporate income tax rate of 21%
Plumino USA lnc. (hereinafter referred to as “PUSA”)
and a state corporate income tax
rate of 8.7%)
Plumino Precision Fermentation JapanCo. Ltd. (hereinafter referred to as “PJP”) 20.42
Plumino Biotechnology Singapore Pte.Ltd. (hereinafter referred to as “PSG”) 17
Plumino Precision Fermentation EuropeGmbH (hereinafter referred to as “PEU”) 15
Plumino Biotechnology (Guangdong) Co. Ltd. (hereinafter referred to as “PGD”) 25
* Subsidiaries of the Company Hong Kong Meihua and Hong Kong Holdings are wholly-owned subsidiaries
registered with the Companies Registry of Hong Kong. The profits tax is based on a two-tiered tax system with a tax rate
of 8.25% for the first HKD 2 million of profits and 16.5% thereafter.
2. Tax Benefits
?Applicable □ Not Applicable
(1) Corporate Income Tax
* The Company is registered in Lhasa Tibet Autonomous Region. Pursuant to the Announcement
on Continuing the Enterprise Income Tax Policies for the Large-Scale Development of Western China
Announcement No. 23 [2020] jointly issued by the Ministry of Finance the State Taxation
Administration and the National Development and Reform Commission from January 1 2021 to
December 31 2030 enterprises established in the western regions and engaged in encouraged industries
are subject to a reduced enterprise income tax rate of 15%.* Langfang R&D a subsidiary of the Company was certified as a high-tech enterprise by the
Hebei High-tech Enterprise Certification and Management Working Group on December 2 2025 with
certificate No. GR202513002211. The validity period is three years and in 2025 the corporate income
tax will be levied at a rate of 15%.* Jilin Meihua a subsidiary of the Company was certified as a high-tech enterprise by the Jilin
High-tech Enterprise Certification and Management Working Group on November 1 2024 with
certificate No. GR202422000344. The validity period is three years and in 2025 the corporate income
tax will be levied at a rate of 15%.* Tongliao Meihua and Xinjiang Meihua subsidiaries of the Company are entitled to a reduced
corporate income tax rate of 15% for enterprises engaged in encouraged industries in the western region
as stipulated in the Announcement No. 23 [2020] of the Ministry of Finance - Announcement of the
Ministry of Finance the State Taxation Administration and the National Development and Reform
Commission on the Continuation of the Corporate Income Tax Policy for the Development of the
Western Region from January 1 2021 to December 31 2030.* According to the Announcement No. 6 [2023] of the State Taxation Administration and the
Ministry of Finance - Announcement of the Ministry of Finance on the Income Tax Preferential Policies
for Small and Micro Enterprises and Individual Industrial and Commercial Businesses Xinjiang
Investment and Shanghai R & D subsidiaries of the Company are entitled to a tax incentive. For the
portion of annual taxable income of small-scale and micro-profit enterprises not exceeding RMB 1
million a reduced rate of 25% is applied to the taxable income and the corporate income tax is levied at
a rate of 20%.* A Singapore-incorporated subsidiary of the Company has successfully obtained the
“Development and Expansion Incentive” under the International Headquarters Award scheme granted
by the Singapore Economic Development Board (“EDB”). In accordance with the relevant provisions
the subsidiary is entitled to a concessionary tax rate of 15% for a period of five years provided that it
continues to meet the requirements stipulated by the EDB.
(2) Value-added tax
* Pursuant to the Notice of the Ministry of Finance and the State Administration of Taxation on the
Exemption of Value-added Tax on Organic Fertilizer Products (Cai Shui [2008] No. 56) and the Reply
of the State Administration of Taxation on Issues Concerning the Exemption of Value-added Tax on
Organic Fertilizer Products (Guo Shui Han [2008] No. 1020) the Company and its subsidiaries
Tongliao Meihua Xinjiang Meihua and Jilin Meihua were exempt from VAT on the production sale
wholesale and retail of organic fertilizer products during the current year.* Pursuant to Item 7 Subparagraph (19) Article 1 of Appendix 3 to the Notice of the Ministry of
Finance and the State Administration of Taxation on Implementing the Pilot Program of Replacing
Business Tax with Value-Added Tax in an All-round Manner (Cai Shui [2016] No. 36) the Company
and its subsidiary Tongliao Meihua are entitled to a VAT exemption on interest income derived from
centralized borrowing and on-lending arrangements.* Pursuant to the Announcement of the Ministry of Finance the State Taxation Administration and
the Ministry of Veterans Affairs on Further Supporting the Entrepreneurship and Employment of Self-
employed Retired Soldiers (Cai Shui [2019] No. 21) and the Announcement of the Ministry of Finance
and the State Taxation Administration on Extending the Implementation Period of Certain Preferential
Tax Policies (No. 4 [2022]): From January 1 2019 to December 31 2023 enterprises that employ self-
employed retired soldiers enter into labor contracts with a term of more than one year and pay social
insurance contributions in accordance with the law may from the month in which such contracts are
executed and contributions are paid enjoy fixed-amount deductions from VAT urban maintenance and
construction tax education surcharge local education surcharge and corporate income tax over a three-
year period based on the actual number of employees recruited. From January 1 2023 to December 31
2027 the above policy continues to apply. The fixed deduction standard is 6000 yuan per person per
year which may be increased by up to 50%. The people’s governments of provinces autonomous
regions and municipalities directly under the central government may determine the specific standards
within such range based on local conditions. The Company’s subsidiary Xinjiang Meihua is entitled to
the above tax credit policy.
3. Others
□Applicable ?Not Applicable
VII. Notes to Consolidated Financial Statements
1. Monetary Funds
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Items Ending Balance Beginning Balance
Cash on Hand 3420.21 3267.17
Bank Deposits 2563871614.99 3866955277.83
Other Monetary Funds 313306138.64 420114528.49
Unexpired Interest Receivable 586736.58 1098705.10
Deposits with Financial Companies
Total 2877767910.42 4288171778.59
Including: Total Amount Deposited
976400434.19 1566229170.25
Overseas
Other Explanations
(1) Details of restricted monetary funds are as follows: Unit: Yuan Currency: RMB
Items June 30 2026 December 31 2025
Bank Acceptance Draft Guarantee Deposit 295166459.00 277489110.74
Funds in Transit 2478943.96
Guarantee Deposits and Other Restricted Funds 105210.02 669172.00
Total 295271669.02 280637226.70
(2) When preparing the statement of cash flow the Company has excluded restricted cash and
interest receivable not yet due from cash and cash equivalents at the end of the period.
2. Financial Assets Held for Trading
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Reason and
Beginning
Items Ending Balance Basis for
Balance
Designation
Financial Assets Measured at Fair Value with Changes in Fair /
1977052675.20 1140377416.70
Value Recorded in the Profit or Loss for the Current Period
Including:
Wealth Management Products 1977052675.20 1140377416.70 /
Financial Assets Designated as Being Measured at Fair Value
with Changes in Fair Value Recorded in the Profit or Loss for
the Current Period
Including:
Total 1977052675.20 1140377416.70 /
Other Explanations:
?Applicable □ Not Applicable
The significant change in financial assets at fair value through profit or loss was mainly attributable
to the Company’s purchase of wealth management products during the period to improve returns on idle
funds.
3. Derivative Financial Assets
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Items Ending Balance Beginning Balance
Foreign Exchange Derivative Instruments 2181653.58 2061300.00
Total 2181653.58 2061300.00
Other Explanations:
None
4. Notes Receivable
(1) Classified Presentation of Notes Receivable
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Items Ending Balance Beginning Balance
Bank Acceptance Notes 36626560.85 107542558.59
Commercial Acceptance Notes
Total 36626560.85 107542558.59
(2) Notes receivable that have been pledged by the Company at the end of the period
□Applicable ?Not Applicable
(3) Notes receivable that have been endorsed or discounted by the Company at the end of the
period and are not due as of the balance sheet date
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Amount derecognized as at the end of Amount not derecognized as at the end
Items
the period of the period
Bank Acceptance Notes 23151726.35
Commercial Acceptance Notes
Total 23151726.35
(4) Classified Disclosure by the Bad Debt Provision Method
□Applicable ?Not Applicable
Provisions for Bad Debt Reserves on an Individual-item Basis:
□Applicable ?Not Applicable
Provisions for Bad Debt Reserves on a Portfolio Basis:
□Applicable ?Not Applicable
Provisions for Bad Debt Reserves based on the General Model of Expected Credit Losses
□Applicable ?Not Applicable
Basis for Staging and Provision Ratios for Bad Debt Reserves
None
Explanation of Significant Changes in the Book Value of Notes Receivable with Changes in Loss
Reserves during the Current Period:
□Applicable ?Not Applicable
(5) Status of Bad Debt Reserves
□Applicable ?Not Applicable
Including bad debts with significant amounts to be recovered or reversed during the period:
□Applicable ?Not Applicable
Other Explanations:
None
(6) Notes Receivable Actually Written Off during the Current Period
□Applicable ?Not Applicable
Including write-offs of significant notes receivable:
□Applicable ?Not Applicable
Explanation of Write-offs of Notes Receivable:
□Applicable ?Not Applicable
Other Explanations:
□Applicable ?Not Applicable
5. Accounts Receivable
(1) Disclosure by Aging
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Aging Ending Book Value Beginning Book Value
Within 1 year (including 1 year) 683314127.01 607648713.65
Within 1 year 683314127.01 607648713.65
1 to 2 years 116453.41 116453.41
2 to 3 years
Over 3 years
3 to 4 years
4 to 5 years
Over 5 years
Total 683430580.42 607765167.06
(2) Classified Disclosure by Bad Debt Provision Methods
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Ending Balance Beginning Balance
Book Balance Bad Debt Reserves Book Balance Bad Debt Reserves
Category Provision
Amount Ratio(%) Amount Provision Book Value Book ValueRatio (%) Amount Ratio(%) Amount Ratio(%)
Provisions
for Bad Debt
Reserves on
an
Individual-
item Basis
Including:
Provisions
for Bad Debt
Reserves on a 683430580.42 100.00 34177351.75 5.00 649253228.67 607765167.06 100.00 30394081.00 5.00 577371086.06
Portfolio
Basis:
Including:
Aging
Analysis 683430580.42 100.00 34177351.75 5.00 649253228.67 607765167.06 100.00 30394081.00 5.00 577371086.06
Portfolio
Total 683430580.42 / 34177351.75 / 649253228.67 607765167.06 / 30394081.00 / 577371086.06
Provisions for Bad Debt Reserves on an Individual-item:
□Applicable ?Not Applicable
Provisions for Bad Debt Reserves on a Portfolio Basis:
?Applicable □ Not Applicable
Items for Provision on a Portfolio Basic: Aging Analysis Portfolio
Unit: Yuan Currency: RMB
Ending Balance
Name
Book Balance Bad Debt Reserves Provision Ratio (%)
Within 1 year 683314127.01 34165706.41 5.00
1-2 years 116453.41 11645.34 10.00
Total 683430580.42 34177351.75 5.00
Explanation of Provisions for Bad Debt Reserves on a Portfolio Basis:
□Applicable ?Not Applicable
Provisions for Bad Debt Reserves based on the General Model of Expected Credit Losses
□Applicable ?Not Applicable
Basis for Staging and Provision Ratios for Bad Debt Reserves
None
Explanation of Significant Changes in the Book Value of Accounts Receivable with Changes in Loss
Reserves during the Current Period:
□Applicable ?Not Applicable
(3) Status of Bad Debt Reserves
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Amount of Changes during the Current Period
Beginning Recovered Ending
Category Written Other
Balance Provision or Balance
off Changes
Reversed
Aging Analysis
30394081.00 4203885.79 -420615.04 34177351.75
Portfolio
Total 30394081.00 4203885.79 -420615.04 34177351.75
Including bad debts with significant amounts to be recovered or reversed during the period:
□Applicable ?Not Applicable
Other Explanations:
None
(4) Accounts Receivable Actually Written Off during the Current Period
□Applicable ?Not Applicable
Including write-off of significant accounts receivable:
□Applicable ?Not Applicable
Explanation of Write-off of Accounts Receivable:
□Applicable ?Not Applicable
(5) Overview of Accounts Receivable and Contract Assets Ranking Top Five in Ending Balances
Aggregated by Debtors
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Proportion in the
Total Amount of
Ending Balances
Ending Balances Ending Balances Ending Balances Ending Balances
of Accounts
Entity Name of Accounts of Contract of Accounts of Bad Debt
Receivable and
Receivable Assets Receivable and Reserves
Contract Assets
Contract Assets
(%)
First 144934548.62 144934548.62 21.21 7246727.43
Second 62259164.44 62259164.44 9.11 3112958.22
Third 47940642.03 47940642.03 7.01 2397032.10
Fourth 59880251.11 59880251.11 8.76 2994012.56
Fifth 27912883.32 27912883.32 4.08 1395644.17
Total 342927489.52 342927489.52 50.17 17146374.48
Other Explanations:
None
Other Explanations:
□Applicable ?Not Applicable
6. Contract Assets
(1) Status of Contract Assets
□Applicable ?Not Applicable
(2) Amount of and Reasons for Significant Changes in Book Value during the Reporting Period
□Applicable ?Not Applicable
(3) Classified Disclosure by Bad Debt Provision Methods
□Applicable ?Not Applicable
Provisions for Bad Debt Reserves on an Individual-item Basis:
□Applicable ?Not Applicable
Explanation of Provisions for Bad Debt Reserves on an Individual-item Basis:
□Applicable ?Not Applicable
Provisions for Bad Debt Reserves on a Portfolio Basis:
□Applicable ?Not Applicable
Provisions for Bad Debt Reserves based on the General Model of Expected Credit Losses
□Applicable ?Not Applicable
Basis for Staging and Provision Ratios for Bad Debt Reserves
None
Explanation of significant changes in the book balance of contract assets with changes in loss reserves
during the current period:
□Applicable ?Not Applicable
(4) Status of Provisions for Bad Debt Reserves for Contract Assets during the Current Period
□Applicable ?Not Applicable
Including bad debts with significant amounts to be recovered or reversed during the period:
□Applicable ?Not Applicable
Other Explanations:
None
(5) Status of Contract Assets Actually Written Off during the Current Period
□Applicable ?Not Applicable
Including write-off of significant contract assets
□Applicable ?Not Applicable
Explanation of Write-off of Contract Assets:
□Applicable ?Not Applicable
Other Explanations:
□Applicable ?Not Applicable
7. Receivables Financing
(1) Classified Presentation of Receivables Financing
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Items Ending Balance Beginning Balance
Notes Receivable 32002409.13 17834479.91
Accounts Receivable 132084.53 143883.09
Total 32134493.66 17978363.00
(2) Receivables Financing that have been pledged by the Company at the end of the period
□Applicable ?Not Applicable
(3) Receivables Financing that have been endorsed or discounted by the Company at the end of
the period and are not due as of the balance sheet date
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Amount derecognized as at the end of Amount not derecognized as at the end
Items
the period of the period
Bank Acceptance Notes 554259559.99
Total 554259559.99
(4) Classified Disclosure by Bad Debt Provision Methods
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Ending Balance Beginning Balance
Book Balance Bad Debt Reserves Book Balance Bad Debt Reserves
Category
Provision Book Value Provision Book Value
Amount Ratio(%) Amount Amount Ratio(%) Amount
Ratio (%) Ratio (%)
Provisions for
Bad Debt
Reserves on an
Individual-item
Basis
Including:
Provisions for
Bad Debt
32149169.72 100.00 14676.06 0.05 32134493.66 17985935.79 100.00 7572.79 0.04 17978363.00
Reserves on a
Portfolio Basis:
Including:
Notes
32002409.13 99.54 32002409.13 17834479.91 99.16 17834479.91
Receivable
Accounts
146760.59 0.46 14676.06 10 132084.53 151455.88 0.84 7572.79 5 143883.09
Receivable
Total 32149169.72 / 14676.06 / 32134493.66 17985935.79 / 7572.79 / 17978363.00
Provisions for Bad Debt Reserves on an Individual-item Basis:
□Applicable ?Not Applicable
Explanation of Provisions for Bad Debt Reserves on an Individual-item Basis:
□Applicable ?Not Applicable
Provisions for Bad Debt Reserves on a Portfolio Basis:
?Applicable □ Not Applicable
Items for provisions on a portfolio basis: Accounts receivable
Unit: Yuan Currency: RMB
Ending Balance
Name
Book Balance Bad Debt Reserves Provision Rate (%)
Accounts Receivable 146760.59 14676.06 10.00
Total 146760.59 14676.06 10.00
Explanation of Provisions for Bad Debt Reserves on a Portfolio Basis
□Applicable ?Not Applicable
Provisions for Bad Debt Reserves based on the General Model of Expected Credit Losses
□Applicable ?Not Applicable
Basis for Staging and Provision Ratios for Bad Debt Reserves
None
Explanation of significant changes in the book balance of Receivables Financing with changes in loss
reserves during the current period:
□Applicable ?Not Applicable
(5) Status of Bad Debt Reserves
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Amount of Changes during the Current Period
Beginning
Category Recovered Other Ending Balance
Balance Provision Written off
or Reversed Changes
Notes Receivable
Accounts Receivable 7572.79 7103.27 14676.06
Total 7572.79 7103.27 14676.06
Including bad debts with significant amounts to be recovered or reversed during the period:
□Applicable ?Not Applicable
Other Explanations:
As at June 30 2026 the Company measures impairment allowances for receivables financing based
on lifetime expected credit losses. The Company considers that the bank acceptance bills held do not
carry significant credit risk and that no material loss would arise from bank default.The criteria and descriptions for recognizing impairment allowances on a portfolio basis are set out
in Section V.11 of this note.
(6) Status of Receivables Financing Actually Written Off during the Current Period
□Applicable ?Not Applicable
Including write-off of significant Receivables Financing
□Applicable ?Not Applicable
Write-off Explanation:
□Applicable ?Not Applicable
(7) Fluctuations in Receivables Financing and Changes in Fair Value during the Current Period:
?Applicable □Not Applicable
Unit: Yuan Currency: RMB
The change amount for this
Beginning Balance Ending Balance
period
Items
Changes in Fair Changes in Changes in
Cost Cost Cost
Value Fair Value Fair Value
Notes
Receivable 17834479.91 14167929.22 32002409.13
Accounts
Receivable 151455.88 -7572.79 -4695.29 -7103.27 146760.59 -14676.06
Total 17985935.79 -7572.79 14163233.93 -7103.27 32149169.72 -14676.06
(8) Other Explanations:
□Applicable ?Not Applicable
8. Prepayments
(1) Presentation of Prepayments on Aging
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Aging Ending Balance Beginning Balance
Amount Ratio (%) Amount Ratio (%)
Within 1 year 142169965.27 99.84 171509299.41 99.78
1 to 2 years 227605.00 0.16 227605.00 0.13
2 to 3 years
Over 3 years 2.18 0.00 147678.18 0.09
Total 142397572.45 100.00 171884582.59 100
Explanation for significant prepayments with aging exceeding 1 year and not settled timely:
None
(2) Overview of Prepayments Ranking Top Five in Ending Balances Aggregated by Prepayment
Recipients
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Proportion in Total Amount of Ending
Entity Name Ending Balance
Balances of Prepayments (%)
First 25729314.84 18.07
Second 9450417.00 6.64
Third 8583906.67 6.03
Fourth 7831832.59 5.50
Fifth 7670585.27 5.39
Total 59266056.37 41.63
Other Explanations:
None
Other Explanations:
□Applicable ?Not Applicable
9. Other Receivables
Presentation of Items
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Items Ending Balance Beginning Balance
Interest Receivable 2362500.00 1575000.00
Dividend Receivable 1395866.49
Other Receivables 60174639.77 67506290.09
Total 62537139.77 70477156.58
Other Explanations:
□Applicable ?Not Applicable
Interest Receivable
(1) Classification of Interest Receivable
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Items Ending Balance Beginning Balance
Fixed Deposits
Entrusted Loans
Bond Investments
Debt Investments 2362500.00 1575000.00
Total 2362500.00 1575000.00
(2) Significant Overdue Interest
□Applicable ?Not Applicable
(3) Classified Disclosure by Bad Debt Provision Methods
□Applicable ?Not Applicable
Provisions for Bad Debt Reserves on an Individual-item Basis:
□Applicable ?Not Applicable
Explanation of Provisions for Bad Debt Reserves on an Individual-item Basis:
□Applicable ?Not Applicable
Provisions for Bad Debt Reserves on a Portfolio Basis:
□Applicable ?Not Applicable
(4) Provisions for Bad Debt Reserves based on the General Model of Expected Credit Losses
□Applicable ?Not Applicable
(5) Status of Bad Debt Reserves
□Applicable ?Not Applicable
Including bad debts with significant amounts to be recovered or reversed during the period:
□Applicable ?Not Applicable
Other Explanations:
None
(6) Status of Interests Receivable Actually Written Off during the Current Period
□Applicable ?Not Applicable
Including write-off of significant interest receivable
□Applicable ?Not Applicable
Write-off Explanation:
□Applicable ?Not Applicable
Other Explanations:
□Applicable ?Not Applicable
Dividends Receivable
(1) Dividends Receivable
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Item (or Investee) Ending Balance Beginning Balance
Tongliao Desheng Bio-techn Co. Ltd. 1395866.49
Total 1395866.49
(2) Significant Dividends Receivable with Aging Exceeding 1 Year
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Item (or Investee) Whether Impairment Has
Reason for Non-
Ending Balance Aging Occurred and Basis for
receipt
Assessment
Tongliao Desheng Bio-techn
1395866.49 1-2 years Financial difficulties Yes
Co. Ltd.Total 1395866.49 / / /
(3) Classified Disclosure by Bad Debt Provision Methods
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Ending Balance Beginning Balance
Category
Book Balance Bad Debt Reserves Book Book Balance Bad Debt Reserves Book Value
Provision Value Provision
Amount Ratio(%) Amount Ratio Amount Ratio(%) Amount Ratio
(%) (%)
Provisions
for Bad
Debt
Reserves 1395866.49 100 1395866.49 100 1395866.49 100 0 1395866.49
on an
Individual-
item Basis
Including:
Provisions
for Bad
Debt
Reserves 1395866.49 100 1395866.49 100 1395866.49 100 0 1395866.49
on an
Individual-
item Basis
Provisions
for Bad
Debt
Reserves
on a
Portfolio
Basis:
Including:
Total 1395866.49 / 1395866.49 / 1395866.49 / / 1395866.49
Provisions for Bad Debt Reserves on an Individual-item Basis:
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Ending Balance
Name
Book Balance Bad Debt Reserves Provision Rate (%) Reason for provision
Tongliao Desheng Bio-techn Expected to be
1395866.49 1395866.49 100
Co. Ltd. uncollectible
Total 1395866.49 1395866.49 100 /
Explanation of Provisions for Bad Debt Reserves on an Individual-item Basis:
□Applicable ?Not Applicable
Provisions for Bad Debt Reserves on a Portfolio Basis:
□Applicable ?Not Applicable
(4) Provisions for Bad Debt Reserves based on the General Model of Expected Credit Losses
□Applicable ?Not Applicable
(5) Status of Bad Debt Reserves
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Amount of Changes during the Current Period
Beginning Ending
Category Recovered or Other
Balance Provision Written off Balance
Reversed Changes
Provisions for
Bad Debt
Reserves on an 1395866.49 1395866.49
Individual-item
Basis
Total 1395866.49 1395866.49
Including bad debts with significant amounts to be recovered or reversed during the period:
□Applicable ?Not Applicable
Other Explanations:
None
(6) Status of Dividends Receivable Actually Written off during the Current Period
□Applicable ?Not Applicable
Including write-off of significant dividends receivable
□Applicable ?Not Applicable
Write-off Explanation:
□Applicable ?Not Applicable
Other Explanations:
□Applicable ?Not Applicable
Other Receivables
(1) Disclosure by Aging
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Book Balance at the Beginning of the
Aging Book Balance at the End of the Period
Period
Within 1 year (including 1 year) 59660928.42 67105934.96
Within 1 year 59660928.42 67105934.96
1 to 2 years 3328936.68 3180293.72
2 to 3 years 241619.45 667906.00
Over 3 years
3 to 4 years 435545.00 778583.55
4 to 5 years 575151.89 4656413.54
Over 5 years 114020949.18 110825852.83
Total 178263130.62 187214984.60
(2) Classification of Accounts by Nature
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Book Balance at the Beginning of the
Account Nature Book Balance at the End of the Period
Period
External Unit Account Current 29303258.71 29727742.16
Guarantee Deposit 12695972.16 8971087.73
Land and Real Estate Account
85672687.00 85672687.00
Receivable
Export Tax Refunds Receivable 42325665.03 53078814.60
Others 8265547.72 9764653.11
Total 178263130.62 187214984.60
(3) Provisions for Bad Debt Reserves
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Stage One Stage Two Stage Three
Expected Credit Expected Credit Losses Expected Credit Losses
Bad Debt Reserves Losses for the for the Entire Duration for the Entire Duration Total
Next 12 Months (Credit Impairment Not (Credit ImpairmentYet Occurred) Occurred)
Balance as of January
1 2026 6756515.08 112952179.43 119708694.51
Balance as of January
1 2026 for the Current
Period
-- Transferred to Stage
Two
--Transferred to Stage
Three
-- Reversed to Stage
Two
-- Reversed to Stage
One
Provision for the
Current Period
Reversal for the
Current Period 1538444.66 1538444.66
Write-Off for the
Current Period -
Write-Off for the
-
Current Period
Other Changes -81759.00 -81759.00
Balance as of June 30
5136311.42 - 112952179.43 118088490.85
2026
Basis for Staging and Provision Ratios for Bad Debt Reserves
None
Explanation of Significant Changes in the Book Balance of Other Receivables with Changes in Loss
Reserves during the Current Period:
□Applicable ?Not Applicable
Basis for the Amount of Provisions for Bad Debt Reserves for the Current Period and for the
Assessment of Significant Increase in Credit Risk for Financial Instruments:
□Applicable ?Not Applicable
(4) Status of Bad Debt Reserves
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Amount of Changes during the Current Period
Beginning Ending
Category Recovered Written Other
Balance Provision Balance
or Reversed off Changes
Provisions for Bad Debt
Reserves on an Individual- 112952179.43 112952179.43
item Basis
Provisions for Bad Debt
Reserves on a Portfolio 6756515.08 1538444.66 -81759.00 5136311.42
Basis
Including: Aging Analysis
6756515.08 1538444.66 -81759.00 5136311.42
Portfolio
Total 119708694.51 1538444.66 -81759.00 118088490.85
Including bad debts with significant amounts to be recovered or reversed during the period:
□Applicable ?Not Applicable
Other Explanations:
None
(5) Status of Other Receivables Actually Written off during the Current Period
□Applicable ?Not Applicable
Including write-off of significant other receivables:
□Applicable ?Not Applicable
Explanation of Write-Off of Other Receivables:
□Applicable ?Not Applicable
(6) Overview of Other Receivables Ranking Top Five in Ending Balances Aggregated by Debtors
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Proportion in the Total
Amount of Ending Ending Balance of Bad
Entity Name Ending Balance Account Nature Aging
Balances of Other Debt Reserves
Receivables (%)
Land and Real
Baizhou Metal Glass and
85672687.00 48.06 Estate Account Over 5 years 85672687.00
Furniture Industrial Park
Receivable
Kezuo Zhongqi Jucang External Unit
22805887.09 12.79 Over 5 years 22805887.09
Grain Trading Co. Ltd. Account Current
First Tax Branch of the
Export Tax
Baicheng Tax Bureau
20000000.00 11.22 Refunds Within 1 year 1000000.00
State Administration of
Receivable
Taxation
Horqin District Tax
Export Tax
Bureau Tongliao City
18000000.00 10.10 Refunds Within 1 year 900000.00
State Administration of
Receivable
Taxation
COFCO Trading Guarantee
5798000.00 3.25 Within 1 year 289900.00
Baicheng Co. Ltd. Deposit
Total 152276574.09 85.42 / / 110668474.09
(7) Presented under Other Receivables due to Centralized Fund Management
□Applicable ?Not Applicable
Other Explanations:
□Applicable ?Not Applicable
10. Inventories
(1) Classification of Inventories
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Ending Balance Beginning Balance
Inventory Inventory
Write Write
Items Down/Contract down/Contract
Book Balance Book Value Book Balance Book Value
Performance Fulfillment
Cost Write Cost Write
Down Down
Raw Materials 2176594282.94 52927524.88 2123666758.06 1781556032.76 99407632.81 1682148399.95
Work in Progress 346341581.51 346341581.51 352184164.47 5003649.19 347180515.28
Inventory Goods 1321840403.78 77213695.35 1244626708.43 898686454.87 158239212.89 740447241.98
Turnover Materials
Consumable
Biological Assets
Contract
Performance Cost
Goods Issued 281487779.78 281487779.78 251851543.84 251851543.84
Total 4126264048.01 130141220.23 3996122827.78 3284278195.94 262650494.89 3021627701.05
(2) Recognition of Data Resources as Inventory
□Applicable ?Not Applicable
(3) Capitalized Amount of Borrowing Costs Included in Inventory Balance at the End of the
Period and Its Calculation Criteria and Basis
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Increased Amount for the Decreased Amount for the
Beginning Current Period Current Period Ending
Items
Balance Reversed or Balance
Provision Others Others *
Written off
Raw
99407632.81 740163.73 30418896.95 16801374.71 52927524.88
Materials
Work in 5003649.19 5003649.19
Progress
Inventory
158239212.89 29057830.68 69535057.26 40548290.96 77213695.35
Goods
Turnover
Materials
Consumable
Biological
Assets
Contract
Performance
Cost
Goods in
262650494.89 29797994.41 104957603.40 57349665.67 130141220.23
Transit
*Other refers to the impairment loss recognized in the current period on the Thai subsidiary.Reason for Reversal or Write-off of Inventory Write-down Provision During the Current Period
□Applicable ?Not Applicable
Provision for Inventory Write-down on a Portfolio Basis
□Applicable ?Not Applicable
Provision Criteria for Inventory Write-down on a Portfolio Basis
□Applicable ?Not Applicable
(4) Explanation of the Amortization Amount of Contract Performance Costs for the Current
Period
□Applicable ?Not Applicable
(5) Explanation of Amortization of Contract Performance Costs for the Current Period
□Applicable ?Not Applicable
Other Explanation:
□Applicable ?Not Applicable
11. Assets Held for Sale
□Applicable ?Not Applicable
12. Non-Current Assets Due within One Year
√ Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Items Ending Balance Beginning Balance
Debt Investments Due within One Year
Other Debt Investments Due within One
Year
Large-Denomination Certificate of
605812598.63 75186227.80
Deposit
Long-Term Receivables Due within One
395786.18 389397.68
Year
Total 606208384.81 75575625.48
Debt Investments Due within One Year
□Applicable ?Not Applicable
Other Debt Investments Due within One Year
□Applicable ?Not Applicable
Other explanations for non-current assets due within one year:
None
13. Other Current Assets
√ Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Items Ending Balance Beginning Balance
Cost of Contract Acquisition
Cost of Receivable Returns
Compensatory Assets
Input Tax Credit for Value-Added Tax 236792139.39 108032314.02
Prepaid Taxes and Fees 12006589.98 22592023.99
Deferred Expenses 11601331.71 8660495.57
Large-denomination Certificate of
116122944.45 75446249.99
Deposit
Total 376523005.53 214731083.57
Information Related to Compensatory Assets
□Applicable ?Not Applicable
Other Explanations:
None
14. Debt Investments
(1) Status of Debt Investments
√ Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Ending Balance Beginning Balance
Items Impairment Impairment
Book Balance Book Value Book Balance Book Value
Reserves Reserves
Tongliao Hailin
Biotechnology 10500000.00 10500000.00 10500000.00 10500000.00
Co. Ltd.Total 10500000.00 10500000.00 10500000.00 10500000.00
Changes in Debt Investment Impairment Reserves for the Current Period
□Applicable ?Not Applicable
(2) Significant Debt Investments at the End of the Period
□Applicable ?Not Applicable
(3) Provision for Impairment Reserves
□Applicable ?Not Applicable
Basis for Staging and Provision Ratios for Impairment Reserves:
None
Explanation of Significant Changes in Book Balance of Debt Investments with Changes in Loss
Reserves during the Current Period:
□Applicable ?Not Applicable
Basis for the Amount of Provisions for Impairment Reserves and the Assessment of Significant Increase
in Credit Risk of Financial Instruments
□Applicable ?Not Applicable
(4) Status of Debt Investments Actually Written Off during the Current Period
□Applicable ?Not Applicable
Including the write-off of significant debt investments
□Applicable ?Not Applicable
Explanation of Write-off of Debt Investments:
□Applicable ?Not Applicable
Other Explanations:
None
15. Other Debt Investments
(1) Status of Other Debt Investments
□Applicable ?Not Applicable
Changes in Impairment Reserves for Other Debt Investments for the Current Period
□Applicable ?Not Applicable
(2) Significant Other Debt Investments at the End of the Period
□Applicable ?Not Applicable
(3) Provisions for Impairment Reserves
□Applicable ?Not Applicable
(4) Status of Other Debt Investments Actually Written off during the Current Period
□Applicable ?Not Applicable
Including the write-off of significant other debt investments
□Applicable ?Not Applicable
Explanation of write-off of other debt investments:
□Applicable ?Not Applicable
Other Explanations:
□Applicable ?Not Applicable
16. Long-term Receivables
(1) Status of Long-term Receivables
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Ending Balance Beginning Balance Range of
Items Book Bad Debt Book Bad Debt Discount
Book Value Book Value
Balance Reserves Balance Reserves Rates
Financing Lease
620567.60 620567.60 622641.83 622641.83
Receivables
Including: Unrealized
4213.82 4213.82 10602.32 10602.32
Financing Income
Goods Sold on an -
Installment Basis
Services Provided on an
-
Installment Basis
Less: Long-term
Receivables Due within 395786.18 395786.18 389397.68 389397.68
One year
Total 224781.42 - 224781.42 233244.15 -- 233244.15 /
(2) Classified Disclosure by Bad Debt Provision Methods
□Applicable ?Not Applicable
Provisions for Bad Debt Reserves on an Individual-item Basis:
□Applicable ?Not Applicable
Explanation of Provisions for Bad Debt Reserves on an Individual-item Basis:
□Applicable ?Not Applicable
Provisions for Bad Debt Reserves on a Portfolio Basis:
□Applicable ?Not Applicable
Provisions for Bad Debt Reserves based on the General Model of Expected Credit Losses
□Applicable ?Not Applicable
(3) Status of Bad Debt Reserves
□Applicable ?Not Applicable
Including bad debts with significant amounts to be recovered or reversed during the period:
□Applicable ?Not Applicable
Other Explanations:
None
(4) Status of Long-term Receivables Actually Written Off during the Current Period
□Applicable ?Not Applicable
Including Write-off of Significant Long-term Receivables
□Applicable ?Not Applicable
Explanation of Write-off
□Applicable ?Not Applicable
Other Explanations
□Applicable ?Not Applicable
17. Long-term Equity Investments
(1) Status of Long-term Equity Investments
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Increase/Decrease during the Current Period
Beginning Ending
Investment Declaration
Beginning Balances Adjustments to Provisions Ending Balances
Profit or Loss Other of Cash
Invested Unit Balance of Increase Decrease Other for Balance of
Recognized Equity Dividend or Others
(book value) Impairment Investment Investment Comprehensive Impairment (book value) Impairment
under Equity Changes Profits
Reserves Income Reserves Reserves
Method Distribution
I. Joint Ventures
Subtotal
II. Associates
Tongliao
Desheng Bio- 4757925.21 -2122489.41 2635435.80
Tech Co. Ltd.Subtotal 4757925.21 -2122489.41 2635435.80
Total 4757925.21 -2122489.41 2635435.80
(2) Impairment Testing of Long-term Equity Investments
□Applicable ?Not Applicable
Other Explanations:
None
18. Other Equity Instrument Investments
(1) Status of Other Equity Instrument Investments
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Reasons for
Increase/Decrease During the Current Period
Designation as
Dividend Gains Losses
Measured at Fair
Gains Losses Income Cumulatively Cumulatively
Value with
Beginning Recorded in Recorded in Ending Recognized Recorded in Recorded in
Items Changes
Balance Increase Decrease Other Other Balance for the Other Other
Others Recorded in
Investment Investment Comprehensive Comprehensive Current Comprehensive Comprehensive
Other
Income for the Income for the Period Income Income
Comprehensive
Current Period Current Period
Income
Bank of
Planned for
Tibet
157000000.00 157000000.00 1689600.00 Long-term
Co.Holding
Ltd.AIM
Planned for
Vaccine
144966810.00 72877160.00 72089650.00 207682762.50 Long-term
Co.Holding
Ltd.Total 301966810.00 72877160.00 229089650.00 1689600.00 207682762.50 /
(2) Explanation of Cases Involving Derecognition During the Current Period
□Applicable ? Not Applicable
Other Explanations:
□Applicable ? Not Applicable
19. Other Non-Current Financial Assets
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Item Ending Balance Beginning Balance
Financial Assets Designated as Being
Measured at Fair Value with Changes in Fair
346396575.38 282005000.00
Value Recorded in the Profit or Loss for the
Current Period
Total 346396575.38 282005000.00
Other Explanations:
None
20. Investment Properties
Measurement Model for Investment Properties
Not Applicable
21. Fixed Assets
Presentation of Items
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Items Ending Balance Beginning Balance
Fixed Assets 12127838360.07 12768478381.36
Clearance of Fixed Assets
Total 12127838360.07 12768478381.36
Other Explanations:
None
Fixed Assets
(1) Status of Fixed Assets
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Office and
Housing and Machinery and Transportation
Items Other Total
Structures Equipment Tools
Equipmet
I. Original Book Value:
1. Beginning Balance 8924714979.37 21283148492.98 61393138.66 309286611.05 30578543222.06
2. Increased Amount for the
95639543.22 307382866.63 8493344.72 80241087.71 491756842.28
Current Period
(1) Acquisition 15436.63 18906099.84 214216.72 11362426.29 30498179.48
(2) Transfer from Construction
56535536.21 288476766.79 4500.00 22893744.34 367910547.34
in Progress
(3) Other 39088570.38 8274628.00 45984917.08 93348115.46
3. Decreased Amount for the
453773464.20 1670819287.26 2144225.25 14810385.14 2141547361.85
Current Period
(1) Disposal or Scrapping 370052973.11 1380900608.91 2144225.25 10773388.71 1763871195.98
(2) Transfer from Construction
50891009.74 127708042.90 50056.16 178649108.80
in Progress
Office and
Housing and Machinery and Transportation
Items Other Total
Structures Equipment Tools
Equipmet
(3) Others 84091152.08 84091152.08
(4) Foreign Currency
32829481.35 78119483.37 3986940.27 114935904.99
Translation Differences
4. Ending Balance 8566581058.39 19919712072.35 67742258.13 374717313.62 28928752702.49
II. Accumulated Depreciation
1. Beginning Balance 3857184442.74 12860278450.75 49103570.83 189028472.94 16955594937.26
2. Increased Amount for the
239473842.18 524481217.74 7219672.14 46157078.42 817331810.48
Current Period
(1) Provision 200212870.23 524481217.74 2081064.20 17916502.91 744691655.08
(2) Other 39260971.95 5138607.94 28240575.51 72640155.40
3. Decreased Amount for the
174489187.29 1088950575.88 2062044.36 14014065.00 1279515872.53
Current Period
(1) Disposal or Scrapping 126280698.21 915077529.32 1968370.39 10219735.83 1053546333.75
(2) Transfer from Construction
33785590.90 47896826.33 23370.57 81705787.80
in Progress
(3) Other 72670753.52 72670753.52
(4) Foreign Currency
14422898.18 53305466.71 93673.97 3770958.60 71592997.46
Translation Differences
4. Ending Balance 3922169097.63 12295809092.61 54261198.61 221171486.36 16493410875.21
III. Impairment Reserves
1. Beginning Balance 292523397.72 560633675.84 3893.95 1308935.93 854469903.44
2. Increased Amount for the
Current Period
(1) Provision
3. Decreased Amount for the
173937977.34 372815675.40 3893.95 208889.54 546966436.23
Current Period
(1) Disposal or Scrapping 172958579.54 370559277.67 3893.95 20451.81 543542202.97
(2) Foreign Currency
979397.80 2256397.73 188437.73 3424233.26
Translation Differences
4. Ending Balance 118585420.38 187818000.44 1100046.39 307503467.21
IV. Book Value
1. Book Value at the End of the
4525826540.38 7436084979.30 13481059.52 152445780.87 12127838360.07
Period
2. Book Value at the Beginning
4775007138.91 7862236366.39 12285673.88 118949202.18 12768478381.36
of the Period
(2) Status of Temporarily Idle Fixed Assets
□Applicable ?Not Applicable
(3) Fixed Assets Leased through Operating Leases
□Applicable ?Not Applicable
(4) Status of Fixed Assets without Property Ownership Certificates
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Reasons for Lack of Property
Items Book Value
Ownership Certificates
Housing and Structures 493709862.70 In Process
Total 493709862.70
(5) Impairment Testing of Fixed Assets
?Applicable □ Not Applicable
Recoverable amount is determined as the net amount after deducting disposal costs from fair
value
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Determination
Basis for
Recoverable Impairment of Fair Value Key
Items Book Value Key
amount Loss and Disposal Parameters
Parameters
Costs
Housing and Fair value is (1) Fair
4644411960.76 4525826540.38 118585420.38 (1) Fair
Structures determined value; (2)
value is
Machinery based on Disposal
determined
and 7623902979.74 7436084979.30 187818000.44 market costs
based on
Equipment quotations
historical
Transportation market
13481059.52 13481059.52 transaction
Tools transaction
prices of
prices of
assets
identical or
market
similar assets
quotations
after
and other
considering
relevant
adjustment
data; (2)
factors or net
Disposal
Office and realisable
costs
Other 153545827.26 152445780.87 1100046.39 value from
include
Equipmet piecemeal
handling
disposal.fees taxes
Disposal costs
and other
refer to costs
costs
directly
related to
attributable to
asset
the disposal
disposal.of assets.Total 12435341827.28 12127838360.07 307503467.21 / / /
Recoverable amount is determined based on the present value of expected future cash flows
□Applicable ?Not Applicable
Reasons for differences between the foregoing information and the information used in
impairment tests in previous years or external information
□Applicable ?Not Applicable
Reasons for differences between the information used in impairment tests in previous years and
the actual situation in the current year
□Applicable ?Not Applicable
Other Explanations:
□Applicable ?Not Applicable
Clearance of Fixed Assets
□Applicable ?Not Applicable
22. Construction in Progress
Presentation of Items
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Items Ending Balance Beginning Balance
Construction in Progress 1224070636.54 331385832.85
Engineering Materials 61898491.25 12174104.36
Total 1285969127.79 343559937.21
Other Explanations:
None
Construction in Progress
(1) Status of Construction in Progress
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Ending Balance Beginning Balance
Items Book Balance ImpairmentReserves Book Value Book Balance
Impairment
Reserves Book Value
Tongliao Meihua West Area
Technological Renovation 34749657.84 34749657.84 16888073.65 16888073.65
Project
Tongliao Meihua East Area
Technological Renovation 11932724.43 11932724.43 20820394.95 20820394.95
Project
Technological Upgrade
3198667.57 3198667.57 17779556.30 17779556.30
Project of Xinjiang Meihua
Technological Upgrade
4452168.98 4452168.98 4391627.29 4391627.29
Project of Jilin Meihua
Technological Upgrade
12440.76 12440.76 7632614.40 7632614.40
Project of Tongliao Jianlong
Reconstruction Project of the
7869365.36 7869365.36 10035634.61 10035634.61
Company
Other Projects 3520668.93 3520668.93 1444653.64 1444653.64
Phase V 600000-ton Annual
10743436.93 10743436.93 12730115.50 12730115.50
L-Lysine Project in Jilin
500000-ton MSG Project in
79261.02 79261.02 3570177.51 3570177.51
the West Zone of Tongliao
Expansion Project of the
Heating Station in the West 2828485.35 2828485.35 2434539.46 2434539.46
Zone of Tongliao
Process Optimization Project
for Xanthan Gum in 263771.92 263771.92 263771.92 263771.92
Xinjiang
18000-ton Technological
Upgrade Project for L- 15067891.50 15067891.50 474083.23 474083.23
Isoleucine in Xinjiang
Tongliao Sulfuric Acid
Expansion and Upgrading 1568852.72 1568852.72 115580409.75 115580409.75
Project
Tongliao Meihua Threonine
843084369.80 843084369.80 100863088.44 100863088.44
300000 t/a Project
Xinjiang Meihua 90000 t/a
284698873.43 284698873.43 16477092.20 16477092.20
Valine Project
Total 1224070636.54 1224070636.54 331385832.85 331385832.85
(2) Changes in Significant Construction in Progress for the Current Period
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Ot
her
De
cre
ase
d Percentag Interest
A e of Capitaliz
Amount Transferred mo Cumulati Accumulated
Including:
Amount of ation
Project Name Budget Amount Beginning Balance Increased Amount for unt ve Engineering Amount of Rate for Sourcesthe Current Period to Fixed Assets for s Ending Balance Investme Progress Capitalized Capitalizedthe Current Period for nt in Interest Interest for the
the of Fund
the Budget Current Period
Current
Period
Cu (%) (%)
rre
nt
Pe
rio
d
Tongliao Meihua
Bank
Threonine
1981000000.00 100863088.44 742322353.07 101071.71 843084369.80 42.60 42.60 2297848.28 2203980.26 2.39 loans and
300000 t/a
self-fund
Project
Tongliao Sulfuric
Acid Expansion Self-
248075700.00 115580409.75 62945442.43 176956999.46 1568852.72 72.01 72.01
and Upgrading funded
Project
Xinjiang Meihua
Self-
90000 t/a Valine 539300000.00 16477092.20 268221781.23 284698873.43 52.79 52.79
funded
Project
Total 2768375700.00 232920590.39 1073489576.73 177058071.17 - 1129352095.95 / / 2297848.28 2203980.26 / /
(3) Provisions for Impairment Reserves for Construction in Progress for the Current Period
□Applicable ?Not Applicable
(4) Impairment Testing of Construction in Progress
□Applicable ?Not Applicable
Other Explanations:
□Applicable ?Not Applicable
Engineering Materials
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Ending Balance Beginning Balance
Items Impairment Impairment
Book Balance Book Value Book Balance Book Value
Reserves Reserves
Engineering
61898491.25 61898491.25 12174104.36 12174104.36
Materials
Total 61898491.25 - 61898491.25 12174104.36 12174104.36
Other Explanations:
None
23. Productive Biological Assets
(1) Productive biological assets measured at cost
□Applicable ?Not Applicable
(2) Impairment testing of productive biological assets measured at cost
□Applicable ?Not Applicable
(3) Productive biological assets measured at fair value
□Applicable ?Not Applicable
Other Explanations
□Applicable ?Not Applicable
24. Oil and Gas Assets
(1) Status of Oil and Gas Assets
□Applicable ?Not Applicable
(2) Impairment testing of oil and gas assets
□Applicable ?Not Applicable
Other Explanations:
None
25. Right-of-Use Assets
(1) Status of Right-of-Use Assets
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Items Housing and Structures Transportation Tools Total
I. Original Book Value
1. Beginning Balance 10799037.87 977360.58 11776398.45
2. Increased Amount for the
Current Period
Lease --
Increase from Enterprise
Merger
3. Decreased Amount for the
81438.03 81438.03
Current Period
Expiration of Lease
Foreign Currency
81438.03 81438.03
Translation Differences
4. Ending Balance 10717599.84 977360.58 11694960.42
II. Accumulated Depreciation
1. Beginning Balance 7427001.15 342076.17 7769077.32
2. Increased Amount for the
1538298.26 97736.04 1636034.30
Current Period
(1) Provision 1538298.26 97736.04 1636034.30
Increase from Enterprise
-
Merger
3. Decreased Amount for the
40432.48 - 40432.48
Current Period
(1) Disposal
Expiration of Lease
Foreign Currency
40432.48 40432.48
Translation Differences
4. Ending Balance 8924866.93 439812.21 9364679.14
III. Impairment Reserves
1. Beginning Balance
2. Increased Amount for the
Current Period
(1) Provision
3. Decreased Amount for the
Current Period
(1) Disposal
4. Ending Balance
IV. Book Value
1. Book Value at the End of
1792732.91 537548.37 2330281.28
the Period
2. Book Value at the 3372036.72 635284.41 4007321.13
Items Housing and Structures Transportation Tools Total
Beginning of the Period
(2) Impairment Testing of Right-of-Use Assets
□Applicable ?Not Applicable
Other Explanations:
As at the end of the period there were no indicators of impairment of the Company’s right-of-use assets.
26. Intangible Assets
(1) Status of Intangible Assets
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Non-
paten
Patent t License for Patent Rights to useItems Land Use Right Right Tech Software Usage Total
nolog drug approvals
y
I. Original Book Value
1. Beginning Balance 1844536740.26 123002647.52 238627829.31 7000000.00 2213167217.09
2. Increased Amount for
228680.49 22356379.19 22585059.68
the Current Period
(1) Acquisition 228680.49 22356379.19 22585059.68
3. Decreased Amount for
137097963.85 19481608.25 677070.90 157256643.00
the Current Period
(1) Disposal 129536804.18 18245067.15 540000.00 148321871.33
Foreign Currency
7561159.67 1236541.10 137070.90 8934771.67
Translation Differences
4. Ending Balance 1707667456.90 125877418.46 237950758.41 7000000.00 2078495633.77
II. Accumulated Amortization
1. Beginning Balance 412894610.90 75781103.60 141085391.57 6299815.92 636060921.99
2. Increased Amount for
16820622.67 5782448.26 3246248.59 267871.11 26117190.63
the Current Period
(1) Provision 16820622.67 5782448.26 3221232.82 267871.11 26092174.86
Foreign Currency
25015.77 25015.77
Translation Differences
3. Decreased Amount for
15900034.78 81000.00 15981034.78
the Current Period
(1) Disposal 15028322.68 81000.00 15109322.68
Foreign Currency
871712.10 871712.10
Translation Differences
4. Ending Balance 429715233.57 65663517.08 144250640.16 6567687.03 646197077.84
III. Impairment Reserves
1. Beginning Balance 17785531.82 2040005.27 19825537.09
2. Increased Amount for
the Current Period
(1) Provision
3. Decreased Amount for 17785531.82 896724.78 18682256.60
Non-
paten
Rights to use
Items Land Use Right Patent t Software License for PatentRight Tech Usage Total
nolog drug approvals
y
the Current Period
(1) Disposal 16840457.63 920065.68 17760523.31
Foreign Currency
945074.19 -23340.90 921733.29
Translation Differences
4. Ending Balance 1143280.49 1143280.49
IV. Book Value
1. Book Value at the End of
1277952223.33 59070620.89 93700118.25 432312.97 1431155275.44
the Period
2. Book Value at the
1413856597.54 45181538.65 97542437.74 700184.08 1557280758.01
Beginning of the Period
The ratio of intangible assets generated from the internal research and development by the Company to
the balance of intangible assets at the end of the current period is zero.
(2) Data Resources Recognized as Intangible Assets
□Applicable ?Not Applicable
(3) Status of Land Use Rights without Property Ownership Certificates
?Applicable □Not Applicable
Unit: Yuan Currency: RMB
Item Book Value Reason for Pending Title Certificate
Land Use Right 99741.59 In process
Total 99741.59
(4) Impairment Testing of Intangible Assets
?Applicable □Not Applicable
Recoverable amount is determined as the net amount after deducting disposal costs from fair
value
?Applicable □Not Applicable
Unit: Yuan Currency: RMB
Determination of
Recoverable Impairment Key Basis for Key
Items Book Value Fair Value and
amount Loss Parameters Parameters
Disposal Costs
Land Use Fair value is (1) Fair (1) Fair value is
1277952223.33 1277952223.33
Right determined based value; (2) determined based
Software 60213901.38 59070620.89 1143280.49 on market Disposal on historical
License for quotations or costs transaction prices
Patent 93700118.25 93700118.25 transaction prices of assets market
Usage of properties in the quotations and
same or similar other relevant
Rights to
locations after data; (2) Disposal
use drug 432312.97 432312.97
considering costs include
approvals
relevant adjustment handling fees
factors or based on taxes and other
the expected use of costs related to
the assets. Disposal asset disposal.costs refer to costs
directly attributable
to the disposal of
assets.Total 1432298555.93 1431155275.44 1143280.49 / / /
Recoverable amount is determined based on the present value of expected future cash flows
□Applicable ?Not Applicable
Reasons for differences between the foregoing information and the information used in
impairment tests in previous years or external information
□Applicable ?Not Applicable
Reasons for differences between the information used in impairment tests in previous years and
the actual situation in the current year
□Applicable ?Not Applicable
Other Explanations
□Applicable ?Not Applicable
27. Goodwill
(1) Original Book Value of Goodwill
?Applicable □Not Applicable
Unit: Yuan Currency: RMB
Increases during the Decreases during
Name of the Invested Unit or Current Period the Current Period
Beginning Balance Ending Balance
Matters Generating Goodwill Arising from
Disposal
Enterprise Merger
Tongliao Jianlong 11788911.79 11788911.79
Total 11788911.79 11788911.79
(2) Goodwill Impairment Reserves
□Applicable ?Not Applicable
(3) Relevant Information of Asset Portfolio or Asset Portfolios Where Goodwill Belongs to
□Applicable ?Not Applicable
Changes in Asset Portfolio or Asset Portfolios
□Applicable ?Not Applicable
Other Explanations:
□Applicable ?Not Applicable
(4) Specific Methods for Determining Recoverable Amount
Recoverable amount is determined as the net amount after deducting disposal costs from fair value
□Applicable ?Not Applicable
Recoverable amount is determined based on the present value of expected future cash flows
□Applicable ?Not Applicable
Reasons for differences between the foregoing information and the information used in impairment tests
in previous years or external information
□Applicable ?Not Applicable
Reasons for differences between the information used in impairment tests in previous years and the
actual situation in the current year
□Applicable ?Not Applicable
(5) Performance Commitments and Corresponding Goodwill Impairment
When the goodwill was formed there are performance commitments and the reporting period or the
preceding reporting period was within the performance commitment period.□Applicable ?Not Applicable
Other Explanations:
□Applicable ?Not Applicable
28. Long-term Deferred Expenses
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Increased Amortized
Beginning Other Decreased
Items Amount for the Amount for the Ending Balance
Balance Amounts
Current Period Current Period
Field usage rights 25574437.11 766804.02 -369100.49 25176733.58
Housing Subsidies 60058156.01 2900000.00 5483029.76 225740.80 57249385.45
Production Materials 42230335.20 19266377.21 13147501.17 50525.71 48298685.53
Staff Rewards 25000.09 25000.09
Leasehold
3294548.81 569930.02 369100.49 2355518.30
Improvements
One-time expansion
2598571.67 328859.34 2269712.33
fee
Software service fee 16988043.67 1757383.90 15230659.77
Total 133781048.89 39154420.88 22078508.30 276266.51 150580694.96
Other Explanations:
None
29. Deferred Income Tax Assets/Deferred Income Tax Liabilities
(1) Unoffset Deferred Income Tax Assets
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Ending Balance Beginning Balance
Deductible
Items Deductible Temporary Deferred Income Deferred Income
Temporary
Differences Tax Assets Tax Assets
Differences
Asset Impairment
137327454.77 20602630.01 130774330.45 20132473.89
Reserves - Bad debts
Asset Impairment
32922281.47 5093485.20 21920451.88 3436100.13
Reserves - Inventory
Unrealized Profits from
8150451.26 1167637.67
Internal Transactions
Government Grants 291228424.60 43684263.73 311752382.95 46762857.44
Deductible Losses
Fair Value Changes 280796215.04 70199053.74 204033190.00 51008297.49
Compensation 155776218.14 23366432.72 154359967.03 23153995.05
Difference in
15038851.77 2255827.77 15038851.77 2255827.77
Depreciation Periods
Lease Liabilities
Total 921239897.05 166369330.84 837879174.08 146749551.77
(2) Unoffset Deferred Income Tax Liabilities
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Ending Balance Beginning Balance
Taxable Deferred Taxable
Items Deferred Income
Temporary Income Tax Temporary
Tax Liabilities
Differences Liabilities Differences
Increment in valuation of assets from
enterprise merger not under the same
control
Changes in Fair Value of Other Debt
Investments
Changes in Fair Value of Other Equity
Investments
Unrealized Profits from Internal
1072763.74 147295.19
Transactions
Fair Value Changes 18758892.19 3574429.76 4777685.38 882833.74
Difference in Depreciation Periods 109195247.06 17748975.97 117440920.01 19073894.96
Right-of-Use Assets 732104.56 109815.68 1839651.34 275947.70
Total 128686243.81 21433221.41 125131020.47 20379971.59
(3) Deferred Income Tax Assets or Liabilities Presented as Net Amounts After Offset
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Ending Balance Beginning Balance
Offsetting Amount Offsetting Amount
Net Balance of Net Balance of
Between Deferred Between Deferred
Items Deferred Tax Deferred Tax
Tax Assets and Tax Assets and
Assets or Liabilities Assets or Liabilities
Deferred Tax Deferred Tax
After Offsetting After Offsetting
Liabilities Liabilities
Deferred Income Tax Assets 21433221.41 144936109.43 20379971.59 126369580.18
Deferred Income Tax
21433221.41 20379971.59
Liabilities
(4) Details of Unrecognized Deferred Income TaxAssets
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Items Ending Balance Beginning Balance
Deductible Temporary Differences
Deductible Losses 205354073.36 118557613.15
Bad Debt Reserves 14953063.89 19336017.85
Inventory Write Down 97218938.76 239122027.46
Fixed Assets Impairment Reserves 307503467.20 854469903.44
Intangible Assets Impairment
1143280.49 19825537.09
Reserves
Unrealized Profits from Internal
- 71275838.72
Transactions
Total 626172823.70 1322586937.71
(5) Deductible losses of unrecognized deferred income tax assets will expire in the following years
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Year Ending Balance Beginning Balance Remarks
2026 8553866.71 8553866.71
2027 3629579.19 3629579.19
2028 4501349.79 4501349.79
2029 11101638.17 11101638.17
2030 126850075.97 90771179.29
2031 50717563.53
Total 205354073.36 118557613.15 /
Other Explanations:
□Applicable ?Not Applicable
30. Other Non-current Assets
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Ending Balance Beginning Balance
Items Impairment Impairment
Book Balance Book Value Book Balance Book Value
Reserves Reserves
Cost of Contract
Acquisition
Cost of Contract
Performance
Cost of Receivable
Returns
Contract Assets
Compensatory Assets
Prepaid Equipment and 130799855.19 130799855.19 76520223.54 76520223.54
Engineering Payments
Large-denomination
758187523.66 758187523.66 682115159.50 682115159.50
Certificates of Deposit
Less: Non-current assets
605812598.63 605812598.63 75186227.80 75186227.80
due within one year
Total 283174780.22 283174780.22 683449155.24 683449155.24
Information Related to Compensatory Assets
□Applicable ?Not Applicable
Other Explanations:
None
31. Assets with Restricted Ownership Right or Usage Right
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
End of the Period Beginning of the Period
Items Book Restriction Restricted Restriction Restricted
Book Balance Book Balance Book Value
Value Type Situation Type Situation
Guarantee Guarantee
Monetary
295271669.02 295271669.02 Frozen Deposits and 278158282.74 278158282.74 Frozen Deposits and
Funds
Others Others
Monetary Funds in Funds in
- - Others 2478943.96 2478943.96 Others
Funds Transit Transit
Endorsed or Endorsed or
discounted discounted
Notes
23151726.35 23151726.35 Others bills not yet 99801405.25 99801405.25 Others bills not yet
Receivable
due and not due and not
derecognised derecognised
Other
Non-
80000.00 80000.00 Frozen Others
current
Assets
Total 318423395.37 318423395.37 / / 380518631.95 380518631.95 / /
Other Explanations:
None
32. Short-Term Borrowings
(1) Classification of Short-Term Borrowings
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Items Ending Balance Beginning Balance
Pledged Borrowings
Mortgaged Borrowings
Guaranteed Borrowings
Credit Borrowings 683800000.00 704800000.00
Discounted Bills Not Yet Matured 1147866746.22 1095200983.25
Unmatured Interest Payable 129966.68 135244.18
Total 1831796712.90 1800136227.43
Explanations of Categories of Short-Term Borrowings:
Details of Credit Borrowings Unit: Yuan Currency: RMB
Lending Institution Ending Balance Term of Borrowing
Tibet Autonomous Region Branch Bank of China 100000000.00 2025/9/24-2026/9/24
Tibet Autonomous Region Branch Bank of China 45000000.00 2025/9/30-2026/9/30
Tibet Autonomous Region Branch Bank of China 100000000.00 2025/11/11-2026/11/11
Tibet Autonomous Region Branch Bank of China 100000000.00 2025/11/17-2026/11/17
Tibet Autonomous Region Branch Bank of China 100000000.00 2025/12/24-2026/12/24
Langfang Development Zone Sub-branch of Industrial
Bank Corporation 8800000.00 2025/9/29-2026/9/28
Langfang Branch Bank of China 50000000.00 2026/4/27-2026/7/27
Langfang Development Zone Sub-branch of China
100000000.00 2026/3/16-2026/9/12
Construction Bank Corporation
Langfang Development Zone Sub-branch of China
80000000.00 2026/6/11-2026/10/15
Construction Bank Corporation
Total 683800000.00
(2) Status of Overdue and Unpaid Short-Term Borrowings
□Applicable ?Not Applicable
Other Explanations:
□Applicable ?Not Applicable
33. Financial Liabilities Held for Trading
□Applicable ?Not Applicable
Other Explanations:
□Applicable ?Not Applicable
34. Derivative Financial Liabilities
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Items Ending Balance Beginning Balance
Foreign Exchange Derivative Instruments 42227.58
Total 42227.58
Other Explanations:
None
35. Notes Payable
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Types Ending Balance Beginning Balance
Commercial Acceptance Bills
Bank Acceptance Bills 2259312216.46 1777053969.91
Total 2259312216.46 1777053969.91
The total amount of overdue and unpaid notes payable at the end of the period is RMB 0 yuan. The
reason for non-payment upon maturity is: None
36. Accounts Payable
(1) Presentation of Accounts Payable
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Items Ending Balance Beginning Balance
Payments for Engineering and
790905815.63 772692271.21
Equipment
Provisional Estimation of Payments 126827257.23 220567330.50
Payments Payable 521622412.79 440571645.94
Other Payments 379960051.40 301353074.05
Total 1819315537.05 1735184321.70
(2) Significant Accounts Payable with an Aging Exceeding 1 Year or Overdue
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Ending Reasons for Being Unpaid or Carried
Items
Balance Forward
Jiangsu Grand Drying and Concentrating Equipment Co. Ltd. 4468500.00 Not Yet Due for Settlement
Shandong Tianli Energy Co. Ltd. 4416000.00 Not Yet Due for Settlement
Unable to Contact Due to
Inner Mongolia Huomei Yicheng Energy Co. Ltd. 3999553.50
Bankruptcy
Xinjiang Huijia Real Estate Co. Ltd. 3430000.00 Not Yet Due for Settlement
Shandong Linsen Biological Products Co. Ltd. 3334414.00 Not Yet Due for Settlement
Shandong Jiayuan Construction Engineering Co. Ltd. 3323330.00 Not Yet Due for Settlement
Total 22971797.50 /
Other Explanations:
□Applicable ?Not Applicable
37. Advance Receipts
(1) Presentation of Advance Receipts
□Applicable ?Not Applicable
(2) Significant Advance Receipts with an Aging Exceeding 1 Year
□Applicable ?Not Applicable
(3) Amount of and Reason for Significant Changes in Book Value During the Reporting Period
□Applicable ?Not Applicable
Other Explanations:
□Applicable ?Not Applicable
38. Contract Liabilities
(1) Status of Contract Liabilities
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Items Ending Balance Beginning Balance
Advance Payments for Goods 656266656.92 746778983.64
Total 656266656.92 746778983.64
(2) Significant Contract Liabilities with an Aging Exceeding 1 Year
□Applicable ?Not Applicable
(3) Amount of and Reason for Significant Changes in Book Value During the Reporting Period
□Applicable ?Not Applicable
Other Explanations
□Applicable ?Not Applicable
39. Employee Compensation Payable
(1) Presentation of Employee Compensation Payable
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Beginning Increase during the Decrease during
Items Ending Balance
Balance Current Period the Current Period
I. Short-Term Compensation 389374702.46 855520184.91 955970543.63 288924343.74
II. Post-employment Benefits - Defined
3120232.07 78857999.48 80437643.19 1540588.36
Contribution Plans
III. Termination Benefits
IV. Other Benefits Due Within One
Year
Total 392494934.53 934378184.39 1036408186.82 290464932.10
(2) Presentation of Short-Term Compensation
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Beginning Increase during Decrease during
Items Ending Balance
Balance the Current Period the Current Period
I. Salaries Bonuses Allowances and
382680489.90 746085540.11 854120182.44 274645847.57
Subsidies
II. Employee Welfare Expenses 35181968.76 27615768.65 7566200.11
III. Social Insurance Premiums 3116690.61 49675613.22 48606581.65 4185722.18
Including: Medical Insurance Premiums 3101035.22 44160548.91 43090919.07 4170665.06
Work Injury Insurance Premiums 15655.39 5442937.33 5443535.60 15057.12
Maternity Insurance Premiums 72126.98 72126.98
IV. Housing Provident Fund 22953.25 11248704.99 11257717.24 13941.00
V. Union Funds and Employee
3554568.70 11171492.68 12213428.50 2512632.88
Education Funds
VI. Short-Term Paid Absence
VII. Short-Term Profit-Sharing Plans
VIII. Other Short-Term Compensation 2156865.15 2156865.15
Total 389374702.46 855520184.91 955970543.63 288924343.74
(3) Presentation of Defined Contribution Plans
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Increase during the Decrease during
Items Beginning Balance Ending Balance
Current Period the Current Period
1. Basic Old-Age Insurance 3091833.89 76223739.16 77802919.02 1512654.03
2. Unemployment Insurance
28398.18 2634260.32 2634724.17 27934.33
Premiums
1. Corporate Pension
Contributions
Total 3120232.07 78857999.48 80437643.19 1540588.36
Other Explanations:
□Applicable ?Not Applicable
40. Taxes Payable
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Items Ending Balance Beginning Balance
Value-added Tax 12953409.60 22017172.18
Consumption Tax
Business Tax
Corporate Income Tax 168539811.17 133145066.29
Personal Income Tax 2422053.71 4981844.28
City Maintenance and Construction
3462955.51 8396974.74
Tax
Environmental Protection Tax 989861.18 1344999.63
Education Surcharge 2539065.16 6139704.53
Water Resource Tax 13485241.76 11690927.45
Stamp Duty 5796134.91 6074142.90
Others 2632266.37 898044.58
Total 212820799.37 194688876.58
Other Explanations:
None
41. Other Payables
(1) Presentation of Items
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Items Ending Balance Beginning Balance
Interest Payable
Dividend Payable 1200340002.04 405000.00
Other Payables 237197638.66 255944893.68
Total 1437537640.70 256349893.68
(2) Interest Payable
□Applicable ?Not Applicable
(3) Dividends Payable
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Items Ending Balance Beginning Balance
Common Stock Dividends 1200340002.04 405000.00
Preferred Shares/Perpetual Bond Dividends Classified as
Equity Instruments
Preferred Shares/Perpetual Bond Dividends -XXX
Total 1200340002.04 405000.00
Other explanations: For significant dividends payable overdue for more than 1 year the reasons for non-
payment should be disclosed:
None
(4) Other Payables
Presentation of Other Payables by Nature of Payments
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Items Ending Balance Beginning Balance
Accrued Expenses 103996305.90 120697128.08
Guarantee Deposits 108835420.66 107587506.36
Others 24365912.10 27660259.24
Total 237197638.66 255944893.68
Significant other payables with an aging exceeding 1 year or overdue
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Reasons for Being Unpaid or Carried
Items Ending Balance
Forward
Disabled Persons’ Federation of the 6th
Division Xinjiang Production and 6952578.01 Not Yet Due for Payment
Construction Corps
Horqin District Tax Bureau Tongliao City
3604984.22 Not Yet Due for Payment
State Administration of Taxation
Total 10557562.23 /
Other Explanations:
□Applicable ?Not Applicable
42. Liabilities Held for Sale
□Applicable ?Not Applicable
43. Non-Current Liabilities Due within 1 Year
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Items Ending Balance Beginning Balance
Long-term Borrowings Due Within 1 Year 229612000.02 280045900.02
Bonds Payable Due Within 1 Year
Long-Term Payables Due Within 1 Year 3447580.57
Lease Liabilities Due Within 1 Year 1000938.19 1011449.31
Total 234060518.78 281057349.33
Other Explanations:
None
44. Other Current Liabilities
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Items Ending Balance Beginning Balance
Short-Term Bonds Payable
Return Refunds Payable
Long-tern Loan Interest Repayable
1207745.39 1332651.10
Within One Year
Sales Tax to be Carried Forward 43557404.19 61436860.42
Notes Endorsed But Not Yet
1284980.13 16600422.00
Derecognized
Total 46050129.71 79369933.52
Increase/Decrease in Short-Term Bonds Payable:
□Applicable ?Not Applicable
Other Explanations:
□Applicable ?Not Applicable
45. Long-Term Borrowings
(1) Classification of Long-Term Borrowings
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Items Ending Balance Beginning Balance
Pledged Borrowings
Mortgaged Borrowings
Guaranteed Borrowings 926208602.81 1146608602.81
Credit Borrowings 1260760521.03 1052116521.04
Less: Long-Term Borrowings Due
229612000.02 280045900.02
Within One Year
Total 1957357123.82 1918679223.83
Explanation of Classification of Long-Term Borrowings:
(1) Details of Credit Borrowings
Ending Balance
Lending Institution Term of Borrowing
(yuan)
Songyuan Branch Bank of Communications Co. Ltd. 28000000.00 2024/4/23-2027/4/23
Songyuan Branch Bank of Communications Co. Ltd. 33000000.00 2024/6/20-2027/6/17
Songyuan Branch Bank of Communications Co. Ltd. 39960000.00 2024/8/20-2027/8/20
Shengfang Sub-branch of Bazhou Agricultural Bank of
China Limited 168500000.00 2025/3/13-2028/3/6
Langfang Branch Bank of Communications Co. Ltd. 39600000.00 2024/9/27-2027/9/24
Langfang Branch Bank of Communications Co. Ltd. 59600000.00 2024/10/22-2027/10/21
Business Department of Baicheng Branch China
Construction Bank Corporation 60000000.00 2024/12/28-2027/12/28
Business Department of Baicheng Branch China
Construction Bank Corporation 35000000.00 2025/4/24-2027/12/28
Business Department of Baicheng Branch China
Construction Bank Corporation 15000000.00 2025/4/29-2028/4/29
Business Department of Baicheng Branch China
Construction Bank Corporation 2037368.14 2025/12/11-2035/12/11
Business Department of Baicheng Branch China
Construction Bank Corporation 1309152.92 2025/12/22-2035/12/12
Tibet Autonomous Region Branch Bank of China 45000000.00 2025/3/28-2028/3/28
Tibet Autonomous Region Branch Bank of China 90000000.00 2025/4/22-2028/4/22
Tibet Autonomous Region Branch Bank of China 90000000.00 2025/9/23-2028/4/22
Langfang Branch Huaxia Bank Co. Ltd. 107800000.00 2025/3/28-2028/3/27
Changji Hui Autonomous Prefecture Branch Bank of
China 8499999.97 2025/2/10-2028/2/10
Changji Hui Autonomous Prefecture Branch Bank of
China 20000000.00 2025/2/13-2028/2/10
Changji Hui Autonomous Prefecture Branch Bank of
China 20000000.00 2025/2/14-2028/2/10
Changji Hui Autonomous Prefecture Branch Bank of
China 10000000.00 2025/2/17-2028/2/10
Changji Hui Autonomous Prefecture Branch Bank of
China 40000000.00 2025/2/20-2028/2/10
Changji Hui Autonomous Prefecture Branch Bank of
China 10000000.00 2025/3/11-2028/2/10
Changji Hui Autonomous Prefecture Branch Bank of
China 39500000.00 2025/4/17-2028/3/19
Changji Hui Autonomous Prefecture Branch Bank of
China 30000000.00 2025/4/22-2028/3/19
Changji Hui Autonomous Prefecture Branch Bank of
China 29000000.00 2025/4/27-2028/3/19
Langfang Branch Bank of China 9000000.00 2025/4/27-2028/4/10
Bazhou Sub-branch Industrial and Commercial Bank
of China Limited 1500000.00 2025/5/16-2028/4/22
Hebei Branch Export-Import Bank of China 4454000.00 2026/2/9-2035/12/21
Tibet Autonomous Region Branch Bank of China 100000000.00 2026/3/16-2029/3/16
Tibet Autonomous Region Branch Bank of China 120000000.00 2026/3/17-2039/3/17
Business Department of Baicheng Branch China
Agricultural Development Bank 4000000.00 2026/6/29-2029/6/28
Less: Long-Term Borrowings Due Within One Year 124660000.02
Total 1136100521.01
(2) Details of Guaranteed Borrowings
Ending Balance Guaranteed
Lending Institution Guarantor Term of Borrowing
(yuan) Party
Tibet Autonomous Region Tongliao
Branch Bank of China 26000000.00 Meihua The Company 2024/6/11-2027/6/11Xinjiang Meihua
Tongliao Branch China
Construction Bank Corporation 95666733.34 The Company
Tongliao
Meihua 2023/5/22-2038/5/8
Tongliao Branch China Tongliao
Construction Bank Corporation 18463641.09 The Company Meihua 2024/6/6-2038/5/8
Tongliao Branch China Tongliao
Construction Bank Corporation 9566653.41 The Company Meihua 2024/6/13-2038/5/8
Tongliao Branch China
Construction Bank Corporation 5739992.04 The Company
Tongliao
Meihua 2024/6/19-2038/5/8
Tongliao Branch China
Construction Bank Corporation 14349980.12 The Company
Tongliao
Meihua 2024/6/26-2038/5/8
Tongliao Branch China 44000000.00 The Company Tongliao 2024/10/21-Construction Bank Corporation Meihua 2027/10/21
Tongliao Branch China Tongliao 2024/10/21-
Construction Bank Corporation 52800000.00 The Company Meihua 2027/10/21
Tongliao Branch China Tongliao 2024/10/24-
Construction Bank Corporation 35200000.00 The Company Meihua 2027/10/21
Tongliao Branch China Tongliao 2024/10/24-
Construction Bank Corporation 44000000.00 The Company Meihua 2027/10/21
Tongliao Branch China
Construction Bank Corporation 35200000.00 The Company
Tongliao 2024/11/14-
Meihua 2027/10/21
Tongliao Branch China Tongliao 2024/11/18-
Construction Bank Corporation 35200000.00 The Company Meihua 2027/10/21
Tongliao Branch China
Construction Bank Corporation 17600000.00 The Company
Tongliao 2024/11/20-
Meihua 2027/10/21
Tongliao Branch China
Construction Bank Corporation 143213000.00 The Company
Tongliao
Meihua 2025/5/20-2038/5/8
Tongliao Huikai Sub-branch
Agricultural Bank of China 14819832.28 Xinjiang Meihua Tongliao
Limited Meihua
2024/12/5-2039/11/27
Tongliao Huikai Sub-branch
Agricultural Bank of China 4538021.20 Xinjiang Meihua Tongliao 2024/12/12-
Limited Meihua 2039/11/27
Tongliao Huikai Sub-branch
Agricultural Bank of China 3978347.92 Xinjiang Meihua Tongliao 2024/12/19-
Limited Meihua 2039/11/27
Tongliao Huikai Sub-branch
Agricultural Bank of China 2095843.43 Xinjiang Meihua Tongliao 2024/12/25-
Limited Meihua 2039/11/27
Tongliao Huikai Sub-branch
Agricultural Bank of China 40000000.00 Xinjiang Meihua Tongliao
Limited Meihua
2024/2/6-2027/2/4
Tongliao Huikai Sub-branch
Agricultural Bank of China 73000000.00 Xinjiang Meihua TongliaoMeihua 2023/8/28-2038/6/20Limited
Tongliao Huikai Sub-branch
Agricultural Bank of China 20725937.66 Xinjiang Meihua Tongliao
Limited Meihua
2025/2/13-2039/11/27
Tongliao Huikai Sub-branch
Agricultural Bank of China 5033161.44 Xinjiang Meihua TongliaoMeihua 2025/2/20-2039/11/27Limited
Tongliao Huikai Sub-branch
Agricultural Bank of China 2618621.00 Xinjiang Meihua TongliaoMeihua 2025/3/13-2039/11/27Limited
Tongliao Huikai Sub-branch
Agricultural Bank of China 17000000.00 Xinjiang Meihua TongliaoMeihua 2025/3/25-2039/11/27Limited
Tongliao Huikai Sub-branch
Agricultural Bank of China 4345889.20 Xinjiang Meihua TongliaoMeihua 2025/4/10-2039/11/27Limited
Tongliao Huikai Sub-branch
Agricultural Bank of China 924221.72 Xinjiang Meihua Tongliao
Limited Meihua
2025/7/4-2039/11/27
Tongliao Huikai Sub-branch
Agricultural Bank of China 617779.60 Xinjiang Meihua TongliaoMeihua 2025/8/6-2039/11/27Limited
Tongliao Huikai Sub-branch
Agricultural Bank of China 1786020.00 Xinjiang Meihua TongliaoMeihua 2025/8/20-2039/11/27Limited
Tongliao Huikai Sub-branch
Agricultural Bank of China 6124927.36 Xinjiang Meihua Tongliao
Limited Meihua
2025/11/6-2039/11/27
Tongliao Huikai Sub-branch
Agricultural Bank of China 39000000.00 Xinjiang Meihua Tongliao 2025/12/23-
Limited Meihua 2039/11/27
Tongliao Huikai Sub-branch
Agricultural Bank of China 14000000.00 Xinjiang Meihua Tongliao 2025/12/26-
Limited Meihua 2039/11/27
Tongliao Huikai Sub-branch
Agricultural Bank of China 3600000.00 Xinjiang Meihua Tongliao Meihua 2026/1/9-2039/11/27
Limited
Wujiaqu Sub-branch China
Construction Bank Corporation 95000000.00 The Company Xinjiang Meihua 2024/7/25-2027/7/25
Less: Long-term Borrowings
Due Within One Year 104952000.00
Total 821256602.81
Other Explanations:
□Applicable ?Not Applicable
46. Bonds Payable
(1) Bonds Payable
□Applicable ?Not Applicable
(2) Specific Status of Bonds Payable: (Excluding other financial instruments such as preferred
shares and perpetual bonds classified as financial liabilities)
□Applicable ?Not Applicable
(3) Explanation of Convertible Corporate Bonds
□Applicable ?Not Applicable
Accounting Treatment of and Judgement Basis for Rights to Convert Shares
□Applicable ?Not Applicable
(4) Explanation of Other Financial Instruments Classified as Financial Liabilities
Overview of other financial instruments such as preferred shares and perpetual bonds outstanding at the
end of the period
□Applicable ?Not Applicable
Table of Changes in Financial Instruments such as Preferred Shares and Perpetual Bonds Outstanding at
the End of the Period
□Applicable ?Not Applicable
Explanation of the Basis for Classifying Other Financial Instruments as Financial Liabilities:
□Applicable ?Not Applicable
Other Explanations:
□Applicable ?Not Applicable
47. Lease Liabilities
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Items Ending Balance Beginning Balance
Lease Payments 1566687.44 2154152.79
Less: Unrecognized Financing Costs 83461.73 129736.84
Less: Lease Liabilities Due Within One
Year 1000938.19 1011449.31
Total 482287.52 1012966.64
Other Explanations:
None
48. Long-Term Payables
Presentation of Items
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Items Ending Balance Beginning Balance
Long-term Payables 23457549.63 10500000.00
Special Payables
Total 23457549.63 10500000.00
Other Explanations:
None
Long-Term Payables
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Items Ending Balance Beginning Balance
Guarantee Deposits 10500000.00 10500000.00
Software service fees 16405130.20
Less: Long-term Payables Due Within
3447580.57
One Year
Total 23457549.63 10500000.00
Other Explanations:
None
Special Payables
□Applicable ?Not Applicable
49. Long-term Employee Compensation Payable
?Applicable □ Not Applicable
(1) Schedule of Long-term Employee Benefits Payable
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Items Ending Balance Beginning Balance
I. Post-employment Benefits - Net Defined Benefit
Obligation
II. Termination Benefits
III. Other Long-Term Benefits 7474640.65
Total 7474640.65
Severance pay accrued in accordance with relevant provisions of Thai Labour Protection Act.
(2) Changes in defined benefit plans
Present value of defined benefit obligation:
□Applicable ?Not Applicable
Plan assets:
□Applicable ?Not Applicable
Net defined benefit obligation (net assets):
□Applicable ?Not Applicable
Description of the nature of defined benefit plans related risks and their impact on the Company’s
future cash flows timing and uncertainty:
□Applicable ?Not Applicable
Description of significant actuarial assumptions and results of sensitivity analysis of defined benefit
plans:
□Applicable ?Not Applicable
Other Explanations:
□Applicable ?Not Applicable
50. Estimated Liabilities
□Applicable ?Not Applicable
51. Deferred Revenue
Status of Deferred Revenue
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Increase during Decrease during
Beginning Reasons for
Items the Current the Current Ending Balance
Balance Formation
Period Period
Government Related to assets
367624988.38 3011200.00 25089514.75 345546673.63
Grants
Total 367624988.38 3011200.00 25089514.75 345546673.63 /
Other Explanations:
?Applicable □ Not Applicable
Refer to Section X for details of government grants for the Company.
52. Other Non-current Liabilities
□Applicable ?Not Applicable
53. Share Capital
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Increase/Decrease (+ -) in the Changes During the Current Period
Capital
Beginning New
Stock Reserves Ending Balance
Balance Shares Others Subtotal
Dividend Conversion
Issued
into Shares
Total
Quantity of 2804241650.00 2804241650.00
Shares
Other Explanations:
None
54. Other Equity Instruments
(1) Overview of other financial instruments such as preferred shares and perpetual bonds
outstanding at the end of the period
□Applicable ?Not Applicable
(2) Table of Changes in Financial Instruments such as Preferred Shares and Perpetual Bonds
Outstanding at the End of the Period
□Applicable ?Not Applicable
Explanation of increase/decrease in other equity instruments during the current period reasons for such
changes and basis for relevant accounting treatments:
□Applicable ?Not Applicable
Other Explanations:
□Applicable ?Not Applicable
55. Capital Reserves
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Increase during
Decrease during the
Items Beginning Balance the Current Ending Balance
Current Period
Period
Capital Premiums (Share
33749867.59 33749867.59
Premiums)
Other Capital Reserves
Total 33749867.59 33749867.59
Other Explanations: Including explanation of increase/decrease in the current period and reasons for
such changes:
None
56. Treasury Shares
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Beginning Increase during the Decrease during the
Items Ending Balance
Balance Current Period Current Period
Share Repurchase for
39999676.57 - 39999676.57
Capital Decrease
Total 39999676.57 - 39999676.57
Other Explanations: Including explanation of increase/decrease in the current period and reasons for
such changes:
On December 29 2025 the Company convened the first meeting of its 11th Board of Directors at
which the “Proposal on the Repurchase of Company Shares via Centralized Auction Trading” was
reviewed and approved. The Board agreed that the Company may use its own funds to repurchase its
shares via centralized auction trading for the purpose of subsequently implementing an employee stock
ownership plan or equity incentive program. The total repurchase amount shall be no less than RMB 30
million (inclusive) and no more than RMB 50 million (inclusive) with a repurchase price not exceeding
RMB 15 per share. The repurchase period shall not exceed 12 months from the date the Board of
Directors approved this share repurchase plan (i.e. December 29 2025 to December 28 2026).As of the market close on April 23 2026 the Company has actually repurchased 3999100 shares
through centralized bidding transactions accounting for 0.14% of the Company’s current total share
capital (2804241650 shares). The highest repurchase price was RMB 10.07 per share and the lowest
repurchase price was RMB 9.90 per share with an average repurchase price of RMB 10.00 per share
and the total amount used was RMB 39995900 (excluding transaction fees). The amount of shares
repurchased by the Company during the repurchase period has reached the minimum amount specified
in the repurchase plan and the implementation of the share repurchase plan has been completed.
57. Other Comprehensive Income
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Amounts Incurred during the Current Period
Less: Amount
Recorded in Less: Amount
Other Recorded in Other
Beginning Amounts Comprehensiv Comprehensive Attributable to AttributableItems Balance Incurred during e Income in Income in Previous to the Ending Balancethe Current Previous Periods and Less: Income Tax the Parent Minority
Period Before Periods and Transferred to Expenses Company After Shareholders
Income Tax Transferred to Retained Earnings Tax After Tax
the Profit or for the Current
Loss for the Period
Current Period
I. Other Comprehensive
Income That Cannot Be
Reclassified to Profit or -153024892.50 -72877160.00 -18219290.00 -54657870.00 -207682762.50
Loss
Including: Amount of
Changes in Remeasured
Defined Benefit Plans
Other Comprehensive
Income That Cannot Be
Reclassified to Profit or
Loss Under Equity Method
Changes in Fair Value of
Other Equity Instrument -153024892.50 -72877160.00 -18219290.00 -54657870.00 -207682762.50
Investments
Changes in Fair Value of
Enterprises’ Own Credit
Risk
II. Other Comprehensive -45108522.99
Income to Be Reclassified -6195279.71 -45108522.99 -51303802.70
to Profit or Loss
Including: Other
Comprehensive Income
That Can Be Transferred to
Profit or Loss Under Equity
Method
Changes in Fair Value of
Other Debt Investments
Amount of Financial Assets
Reclassified and Recorded
in Other Comprehensive
Income
Credit Impairment Reserves
for Other Debt Investments
Cash Flow Hedging
Reserves
Converted Differences in
Foreign Currency Financial -6195279.71 -45108522.99 -45108522.99 -51303802.70
Statements
Total Other Comprehensive
Income -159220172.21 -117985682.99 -18219290.00 -99766392.99 - -258986565.20
Other explanations including the adjustments to the transfer of effective portion of cash flow hedge
profit or loss to initially recognized amount of hedged items: None
58. Special Reserves
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Items Beginning Balance Increase during the Decrease during the Ending Balance
Current Period Current Period
Work Safety
4992619.68 26082428.67 24900048.73 6174999.62
Expenses
Total 4992619.68 26082428.67 24900048.73 6174999.62
Other explanations including explanation of increase/decrease for the current period and reasons for
such changes:
The increase in special reserves during the current period was mainly attributable to the
appropriation of safety production expenses in accordance with the Administrative Measures for the
Collection and Utilization of Enterprise Work Safety Funds (Cai Zi [2022] No. 136) issued by the
Ministry of Finance.
59. Surplus Reserves
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Increase during the Decrease during the
Items Beginning Balance Ending Balance
Current Period Current Period
Statutory Surplus
1379865682.01 1379865682.01
Reserves
Discretionary Surplus
Reserves
Reserve Funds
Enterprise Expand
Funds
Others
Total 1379865682.01 1379865682.01
Explanations of surplus reserves including explanation of increase/decrease for the current period and
reasons for such changes: None
60. Undistributed Profits
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Items For the Current Period For the Previous Year
Undistributed Profits at the End of the Previous Period
12283940768.49 10370640110.47
Before Adjustment
Total Amount of Undistributed Profits at the Beginning of
the Adjustment (Increase + decrease－)
Undistributed Profits at the Beginning of the Post-adjustment 12283940768.49 10370640110.47
Plus: Net Profit Attributable to the Owners of the Parent
661862706.23 3280879912.10
Company for the Current Period
Minus: Withdrawal of Statutory Surplus Reserves 167591928.79
Withdrawal of Discretionary Surplus Reserves
Withdrawal of General Risk Reserves
Ordinary Share Dividends Payable 1199935002.04 1199987325.29
Ordinary Share Dividends Transferred to Share Capital
Undistributed Profits at the End of the Period 11745868472.68 12283940768.49
Details of Undistributed Profits at the Beginning of the Adjustment:
1. Due to retrospective adjustments under the Accounting Standards for Business Enterprises and related
new regulations the amount of undistributed profits at the beginning of the impact period is RMB 0
yuan.
2. Due to changes in the accounting standards the amount of undistributed profits at the beginning of the
impact period is RMB 0 yuan.
3. Due to correction of significant accounting errors the amount of undistributed profits at the beginning
of the impact period is RMB 0 yuan.
4. Due to changes in the consolidation scope caused by the same control the amount of undistributed
profits at the beginning of the impact period is RMB 0 yuan.
5. Due to other adjustments the total amount of undistributed profits at the beginning of the impact
period is RMB 0 yuan.
61. Operating Revenues and Operating Costs
(1) Status of Operating Revenues and Operating Costs
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Items Amount Incurred during the Current Period Amount Incurred during the Previous Period
Revenues Costs Revenues Costs
Main Business 12112399387.92 10556262320.52 12201006425.75 9372143881.60
Other Business 122695951.62 96831504.67 79444177.78 61209358.49
Total 12235095339.54 10653093825.19 12280450603.53 9433353240.09
(2) Decomposition Information of Operating Revenues and Operating Costs
□Applicable ?Not Applicable
Other Explanations:
□Applicable ?Not Applicable
(3) Explanation of Performance Obligations
□Applicable ?Not Applicable
(4) Explanation of Allocation to Remaining Performance Obligations
□Applicable ?Not Applicable
(5) Significant Changes in Contracts or Significant Adjustments to Transaction Prices
□Applicable ?Not Applicable
Other Explanations:
None
62. Taxes and Surcharges
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Amount Incurred during the Current Amount Incurred during the Previous
Items
Period Period
Consumption Tax
Business Tax
Urban Maintenance and
10820044.42 17664115.33
Construction Tax
Education Surcharge 8059046.30 13714358.88
Resource Tax 26060998.16 24961004.89
Property Tax 29190370.98 26906712.05
Land Use Tax 19563578.22 18300652.02
Vehicle and Vessel Usage Tax 147090.50 34243.33
Stamp Duty 12184083.78 11871317.19
Environmental Protection Tax 1772808.03 3163481.95
Others 1485173.53 2450685.40
Total 109283193.92 119066571.04
Other Explanations:
None
63. Sales Expenses
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Amount Incurred during the Amount Incurred during the
Items
Current Period Previous Period
Transportation Expenses 83540185.94 81508805.04
Company Expenses 11508390.39 12024503.62
Promotion Expenses 4803172.44 10568077.77
Employee Expenses 45394253.62 33055518.95
Depreciation and Amortization 9598201.85 8513752.19
Warehousing Expenses 21690755.57 22090134.45
Total 176534959.81 167760792.02
Other Explanations:
None
64. Administrative Expenses
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Amount Incurred during the Amount Incurred during the
Items
Current Period Previous Period
Company Expenses 96987334.79 83514810.05
Employee Expenses 263282911.12 337748536.68
Depreciation and Amortization 64514896.35 48170214.84
Total 424785142.26 469433561.57
Other Explanations:
None
65. Research and Development Expenses
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Amount Incurred during the Amount Incurred during the
Items
Current Period Previous Period
Employee Expenses 29383456.83 28650440.05
Material Consumption 129239958.72 136825441.33
Depreciation Expenses 11965107.80 12225514.37
Other Expenses 16959920.10 22257302.18
Total 187548443.45 199958697.93
Other Explanations:
None
66. Financial Expenses
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Amount Incurred during the Amount Incurred during the
Items
Current Period Previous Period
Interest Expenses 20836234.31 27955159.53
Including: Interest Expense on Lease Liabilities 45212.39 131263.83
Less: Interest Income 20897261.18 26389977.12
Net Interest Expense -61026.87 1565182.41
Exchange Profits and Losses 46150945.53 -28153343.43
Bank Charges and Other Expenses 7509908.04 5927841.39
Total 53599826.70 -20660319.63
Other Explanations:
None
67. Other Income
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Amount Incurred during the Amount Incurred during the
Classification by Nature
Current Period Previous Period
Government Subsidies 130402361.18 137644467.14
Refunds of Personal Income Tax Handling Fees 2026718.28 5404964.32
Additional Deduction of Value-added Tax 5496884.87
Value-added Tax Exemption for Retired Veterans 52500.00
Total 132481579.46 148546316.33
Other Explanations:
None
68. Investment Income
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Amount Incurred during the Amount Incurred during
Items
Current Period the Previous Period
Investment Income from Long-term Equity Investment
-2122489.41 -923353.98
Accounted for by the Equity Method
Investment Income from the Disposal of Long-term Equity
35066419.30
Investments
Investment Income from Financial Assets Held for Trading
during the Holding Period
Dividend Income from Other Equity Instrument
1689600.00 3308800.00
Investments during the Holding Period
Dividend Income from Debt Investments during the
787500.00 787500.00
Holding Period
Dividend Income from other Debt Investments during the
7863675.28 10465773.44
Holding Period
Investment Income from the Disposal of Financial Assets
14547543.70 15723626.48
Held for Trading
Investment Income from the Disposal of Other Equity
Instrument Investments
Investment Income from the Disposal of Debt Investments
Investment Income from the Disposal of Other Debt
79833.31 -111579.15
Investments
Debt Restructuring Gains
Total 57912082.18 29250766.79
Other Explanations:
None
69. Gains from Net Exposure Hedging
□Applicable ?Not Applicable
70. Gains from Changes in Fair Value
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Amount Incurred during the Amount Incurred during the
Sources of Gains from Changes in Fair Value
Current Period Previous Period
Financial Assets Held for Trading 21336805.37 16016844.67
Including: Gains from Changes in Fair Value Arising
4501600.86 1200860.00
from Derivative Financial Instruments
Financial Liabilities Held for Trading
Investment Properties Measured at Fair Value
Total 21336805.37 16016844.67
Other Explanations:
None
71. Credit Impairment Losses
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Amount Incurred during the Amount Incurred during the
Items
Current Period Previous Period
Bad Debt Losses on Notes Receivable
Bad Debt Losses on Accounts Receivable
Bad Debt Losses on Other Receivables
Impairment Losses on Debt Investments
Impairment Losses on Other Debt Investments
Bad Debt Losses on Long-term Receivables
Financial Guarantee-related Impairment Losses
Bad Debt Losses -4068410.89 -154305.79
Total -4068410.89 -154305.79
Other Explanations:
None
72. Asset Impairment Losses
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Amount Incurred during the Amount Incurred during the
Items
Current Period Previous Period
I. Impairment Losses on Contract Assets
II. Inventory Write-down Losses and Contract
-29797994.41 -451713.16
Performance Cost Impairment Losses
III. Impairment Losses on Long-term Equity
Investments
IV. Impairment Losses on Investment Properties
V. Impairment Losses on Fixed Assets -8784893.48
VI. Impairment Losses on Engineering Materials
VII. Impairment Losses on Construction in
Progress
VIII. Impairment Losses on Productive
Biological Assets
IX. Impairment Losses on Oil and Gas Assets
X. Impairment Losses on Intangible Assets
XI. Impairment Losses on Goodwill
XII. Others
Total -29797994.41 -9236606.64
Other Explanations:
None
73. Gains from Disposal of Assets
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Amount Incurred during the Current Amount Incurred during the Previous
Items
Period Period
Fixed Assets 700199.25 438552.05
Intangible Assets 9963577.20
Total 10663776.45 438552.05
Other Explanations:
□Applicable ?Not Applicable
74. Non-operating Revenues
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Amount Incurred Amount Incurred Amounts Recorded in Non-
Items during the Current during the Previous recurring Profits or Losses for the
Period Period Current Period
Total Gains from Disposal of Non-
2699677.58 2699677.58
current Assets
Including: Gains from Disposal of
2699677.58 2699677.58
Fixed Assets
Gains from Disposal of
Intangible Assets
Gain on Debt Restructuring
Gains from Exchange of Non-
monetary Assets
Donation Receipts
Revenue from Default
2996485.60 2996485.60
Compensation
Insurance Claims 2458445.64
Income from Carbon Emission
14905660.38 14905660.38
Rights
Enterprise Merger Not Under the
Same Control
Others 1745275.67 698690.77 1745275.67
Total 22347099.23 3157136.41 22347099.23
Other Explanations:
□Applicable ?Not Applicable
75. Non-operating Expenditure
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Amount Incurred Amount Incurred Amounts Recorded in Non-
Items during the Current during the Previous recurring Profits or Losses for the
Period Period Current Period
Total Losses from Disposal of
6456826.23 6570163.08 6456826.23
Non-current Assets
Including: Losses from Disposal of
6456826.23 6570163.08 6456826.23
Fixed Assets
Losses from Disposal of
Intangible Assets
External Donations 3002645.86 1542000.00 3002645.86
Others 1262639.07 2273751.00 1262639.07
Total 10722111.16 10385914.08 10722111.16
Other Explanations:
None
76. Income Tax Expenses
(1) Table of Income Tax Expenses
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Amount Incurred during the Current Amount Incurred during the Previous
Items
Period Period
Current Income Tax Expenses 168887307.46 331522515.48
Deferred Income Tax Expenses -347239.25 -10301782.12
Total 168540068.21 321220733.36
(2) Adjustment Process for Accounting Profits and Income Tax Expenses
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Items Amount Incurred during the Current
Period
Total Profits 830402774.44
Income Tax Expenses Calculated at Statutory/Applicable Tax Rates 124560416.21
Impact of Different Tax Rates Applicable to Subsidiaries 92662250.42
Impact of Income Tax for the Previous Period Before Adjustment 44164832.77
Impact of Non-taxable Income -81179530.88
Impact of Non-deductible Costs Expenses and Losses 629842.11
Impact of Deductible Losses from Unrecognized Deferred Income Tax Assets for
-25869776.50
the Previous Periods Before Usage
Impact of Deductible Temporary Difference or Deductible Losses from
13572034.08
Unrecognized Deferred Income Tax Assets for the Current Period
Income Tax Expenses 168540068.21
Other Explanations:
□Applicable ?Not Applicable
77. Other Comprehensive Income
?Applicable □ Not Applicable
Refer to the notes for details.
78. Cash Flow Statement Items
(1) Cash Related to Operating Activities
Other received cash related to operating activities
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Amount Incurred during the Current Amount Incurred during the Previous
Items
Period Period
Interest Income 19540231.78 26411390.20
Income from Government Grants 110876621.83 132252277.39
Others 21994610.94 32489729.74
Total 152411464.55 191153397.33
Explanation of other received cash related to operating activities:
None
Other paid cash related to operating activities
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Amount Incurred during the Current Amount Incurred during the Previous
Items
Period Period
Expense Expenditure 454977044.30 308047443.89
Temporary Borrowings 693843.86 681175.17
Other Expenditures 25286245.73 244715431.93
Total 480957133.89 553444050.99
Explanation of other paid cash related to operating activities:
None
(2) Cash Related to Investment Activities
Significant received cash related to investment activities
□Applicable ?Not Applicable
Significant paid cash related to investment activities
□Applicable ?Not Applicable
Other received cash related to investment activities
□Applicable ?Not Applicable
Other paid cash related to investment activities
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Amount Incurred during the Current Amount Incurred during the
Items
Period Previous Period
Foreign Exchange Gain 2883915.81 2859048.14
Total 2883915.81 2859048.14
Explanation of other paid cash related to investment activities:
None
(3) Cash Related to Financing Activities
Other received cash related to financing activities
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Amount Incurred during the Current Amount Incurred during the
Items
Period Previous Period
Restricted Monetary Funds 277489110.71 428515211.85
Total 277489110.71 428515211.85
Explanation of other received cash related to financing activities:
None
Other paid cash related to financing activities
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Amount Incurred during the Current Amount Incurred during the
Items
Period Previous Period
Restricted Monetary Funds 295166458.97 190591895.44
Repurchased Shares 39999676.57 64294882.98
Principal and Lease Deposits for Lease
600513.36 861559.04
Liabilities
Total 335766648.90 255748337.46
Explanation of other paid cash related to financing activities:
None
Changes in liabilities arising from financing activities
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Increase during the Current Period Decrease during the Current Period
Items Beginning Balance Cash Changes Non-cash Cash Changes Non-cash Ending Balance
Changes Changes
Short-term
1800136227.43 1751224909.21 12483003.88 1645488281.38 86559146.24 1831796712.90
Borrowings
Long-term 2198725123.85 232054000.00 243810000.01 2186969123.84
Borrowings
Lease Liabilities 2024415.95 85046.64 582841.36 43395.52 1483225.71
Total 4000885767.23 1983278909.21 12568050.52 1889881122.75 86602541.76 4020249062.45
(4) Explanation of Presenting Cash Flows at Net Amount
□Applicable ?Not Applicable
(5) Significant events and financial effects that do not involve current cash receipts or payments
but may affect the company's financial position or may affect the company’s cash flows in the
future
□Applicable ?Not Applicable
79. Supplementary Information for Cash Flow Statements
(1) Supplementary Information for Cash Flow Statements
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Amount for the Amount for the
Supplementary Information
Current Period Previous Period
1．Adjusting Net Profit to Cash Flows from Operating Activities:
Net Profit 661862706.23 1767950116.89
Plus: Asset Impairment Reserves 29797994.41 9236606.64
Credit Impairment Losses 4068410.89 154305.79
Depreciation of Fixed Assets Depletion of Oil and Gas Assets and
744691655.08 663310890.94
Depreciation of Productive Biological Assets
Amortization of Right-of-Use Assets 1636034.30 1804653.82
Amortization of Intangible Assets 25891648.42 20437708.39
Amortization of Long-term Deferred Expenses 22078508.30 18080269.41
Losses on Disposal of Fixed Assets Intangible Assets and Other Long-term
-10663776.45 -438552.05
Assets ("-" for gains)
Losses on Scrapping of Fixed Assets ("-" for gains) 6456826.23 6570163.08
Losses on Changes in Fair Value ("-" for gains) -21336805.37 -16016844.67
Financial Expenses ("-" for gains) 65139732.01 -737611.57
Investment Losses ("-" for gains) -57912082.18 -29250766.79
Decrease in Deferred Income Tax Assets ("-" for increase) 624227.00 -19972579.93
Increase in Deferred Income Tax Liabilities ("-" for decrease) -35060.17
Decrease in Inventories ("-" for increase) -1047278926.63 208943971.20
Decrease in Operating Receivables ("-" for increase) -216263282.68 -3689852.79
Increase in Operating Payables ("-" for decrease) 180347214.46 -313556197.56
Others
Net Cash Flow Arising from Operating Activities 389140084.02 2312791220.63
2．Significant Investment and Financing Activities not Involving Cash Receipts or Payments:
Debt to Capital
Convertible Corporate Bonds Due Within One Year
Financing Leasing Fixed Assets
3．Net Changes in Cash and Cash Equivalents:
Ending Cash Balance 2581909504.82 2722743961.39
Minus: Beginning Cash Balance 4006435846.79 4131859602.14
Plus: Ending Cash Equivalent Balance
Minus: Beginning Cash Equivalent Balance
Net Increase in Cash and Cash Equivalents -1424526341.97 -1409115640.75
(2) Net Cash Paid for Acquiring Subsidiaries for the Current Period
□Applicable ?Not Applicable
(3) Net Cash Received for Disposing Subsidiaries for the Current Period
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Amount
Cash or cash equivalents received during the current period from the disposal
525834529.63
of a subsidiary
Minus: Cash and cash equivalents held by the subsidiary as of the date control
203646503.23
was lost
Plus: Cash or cash equivalents received during the current period from the
disposal of a subsidiary in prior periods
Net cash received from the disposal of a subsidiary 322188026.40
Other Explanations:
None
(4) Composition of Cash and Cash Equivalents
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Items Ending Balance Beginning Balance
I. Cash 2581909504.82 4006435846.79
Including: Cash on Hand 3420.21 3267.17
Bank Deposits Available for Immediate Payment 2563871614.99 3866955277.83
Other Monetary Funds Available for Immediate
18034469.62 139477301.79
Payment
Deposits with Central Banks Available for
Payment
Interbank Deposits
Interbank Placements
II. Cash Equivalents
Including: Bond Investment Due within Three Months
III. Ending Balance of Cash and Cash Equivalents 2581909504.82 4006435846.79
Including: Cash and Cash Equivalents Restricted for Use by
the Parent Company or Subsidiaries within the Group
(5) Instances Where Usage is Restricted but Still Classified as Cash and Cash Equivalents
□Applicable ?Not Applicable
(6) Monetary Funds Not Classified as Cash and Cash Equivalents
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Items Ending Balance Beginning Balance Reason
Margin Deposits for Not Available for Immediate
295166459.00 277489110.74
Bank Acceptance Bills Withdrawal
Not Available for Immediate
Funds in Transit 2478943.96
Withdrawal
Guarantee Deposits and Not Available for Immediate
105210.02 669172.00
Other Restricted Funds Withdrawal
Unexpired Interest Not Available for Immediate
586736.58 1098705.10
Receivable Withdrawal
Total 295858405.60 281735931.80 /
Other Explanations:
□Applicable ?Not Applicable
80. Notes to Items in the Statement of Changes in Owner's Equity
Explanation of Name of "Other" Items Adjusted Against the Ending Balance for the Previous Year
Adjusted Amount and Other Matters:
□Applicable ?Not Applicable
81. Foreign Currency Monetary Items
(1) Foreign Currency Monetary Items
?Applicable □ Not Applicable
Unit: Yuan
Ending Foreign Ending Balance Converted to
Items Conversion Rate
Currency Balance Renminbi
Monetary Funds 177060422.22
Including: US Dollar 25555209.84 6.8110 174056057.91
Euro 238609.69 7.7671 1853305.33
Hong Kong Dollar 887.72 0.8686 771.03
British Pound 34.20 9.0146 308.30
Singapore Dollar 217460.37 5.2605 1143943.23
Japanese Yen 143570.00 0.0420 6036.42
Accounts Receivable 221432039.00
Including: US Dollar 32510487.01 6.8111 221431728.32
Euro 40.00 7.7670 310.68
Other Receivables 493893.38
Including: US Dollar 62581.81 6.8071 426001.30
Singapore Dollar 12906.00 5.2605 67892.08
Other Current Assets 854793.12
Including: Singapore Dollar 162492.74 5.2605 854793.12
Long-term Receivables 329991.45
Including: Singapore Dollar 62730.05 5.2605 329991.45
Accounts Payable 8049877.63
Including: US Dollar 1181911.00 6.8109 8049877.63
Other Payables 9465915.81
Including: US Dollar 1234902.30 6.8112 8411163.01
Singapore Dollar 65722.00 5.2608 345747.17
Japanese Yen 16863000.00 0.0420 709005.63
Employee compensation payable 1349336.77
Including: Hong Kong Dollar 103000.00 0.8686 89460.65
Singapore Dollar 239497.48 5.2605 1259876.12
Lease Liabilities 220893.08
Including: Singapore Dollar 41990.89 5.2605 220893.08
Non-current Liabilities Due Within
865327.77
One Year
Including: Singapore Dollar 164495.35 5.2605 865327.77
Long-term Payables 13790234.99
Including: Singapore Dollar 2621485.07 5.2605 13790234.99
Other Explanations:
None
(2) The nature of currency non-convertibility and its financial impact the spot exchange rates
used and the estimation process as well as the risks the entity faces due to currency non-
convertibility
□Applicable ?Not Applicable
(3) Explanation of overseas operating entities including disclosure of their main overseas
operating locations functional currencies and selection basis for significant overseas operating
entities as well as disclosure of reasons for changes in functional currencies
?Applicable □ Not Applicable
Whether
Main
Functional Functional
Company Name Operating Basis of Determination
Currency Currency Has
Location
Changed
Hong Kong The currency of the primary economic
Hong Kong CNY No
Meihua environment in which the entity operates
Hong Kong The currency of the primary economic
Hong Kong US Dollar No
Holdings environment in which the entity operates
Cayman Cayman The currency of the primary economic
US Dollar No
Company Islands environment in which the entity operates
Singapore The currency of the primary economic
Singapore US Dollar No
Company environment in which the entity operates
The currency of the primary economic
SPV Singapore US Dollar No
environment in which the entity operates
The currency of the primary economic
TP Thailand Thai Baht No
environment in which the entity operates
The currency of the primary economic
PUS United States US Dollar No
environment in which the entity operates
The currency of the primary economic
UP United States US Dollar No
environment in which the entity operates
The currency of the primary economic
PUSA United States US Dollar No
environment in which the entity operates
The currency of the primary economic
PJP Japan Japanese Yen No
environment in which the entity operates
The currency of the primary economic
PSG Singapore US Dollar No
environment in which the entity operates
The currency of the primary economic
PEU Germany Euro No
environment in which the entity operates
In preparing the consolidated financial statements the financial statements of foreign operations are
translated into the presentation currency of the Company (i.e. the functional currency of the parent
company) using the following exchange rates:
Balance Sheet Items (Assets Income Statement Items (Income
Item Paid-in Capital
and Liabilities) and Expenses)
Exchange Rate
Spot Exchange Rate at the Approximate Exchange Rates at Historical Exchange
Used for
Balance Sheet Date the Date of Transactions Rates
Translation
(4) Cases where the functional currency of a foreign operation is not convertible into the entity’s
presentation currency
□Applicable ?Not Applicable
82. Leases
(1) As Lessee
?Applicable □ Not Applicable
Variable lease payments not included in the measurement of lease liabilities
□Applicable ?Not Applicable
Lease expenses on short-term leases or leases of low-value assets with simplified treatment
?Applicable □ Not Applicable
RMB 2972767.41 yuan
Unit: Yuan Currency: RMB
Amount Incurred during the Amount Incurred during the
Items
Current Period Previous Period
Interest of Lease Liabilities 45212.39 582068.74
Expenses on Short-term Leases 2927555.02 858029.01
Sale-leaseback Transactions and Judgement Basis
□Applicable ?Not Applicable
Total cash outflows related to leases: 3528068.38 (Unit: Yuan Currency: RMB)
(2) As Lessor
Operating leases as lessor
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Including: Revenue Related to
Items Revenue from Leases Variable Lease Payments Not
Recorded in Lease Receipts
Revenue from Leases 6660036.78
Total 6660036.78
Financing leases as lessor
□Applicable ?Not Applicable
Adjustment Table for Undiscounted Lease Receipts and Net Lease Investments
□Applicable ?Not Applicable
Undiscounted Lease Receipts over the Next Five Years
□Applicable ?Not Applicable
(3) Recognition of Profits and Losses from Financing Leases as Manufacturer or Dealer
□Applicable ?Not Applicable
Other Explanations:
None
83. Data Resources
□Applicable ?Not Applicable
84. Others
□Applicable ?Not Applicable
VIII. Research and Development Expenses
1. Presented by Expense Nature
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Amount Incurred during the Amount Incurred during the
Items
Current Period Previous Period
Employee Expenses 29383456.83 28650440.05
Material Consumption 129239958.72 136825441.33
Depreciation Expenses 11965107.80 12225514.37
Other Expenses 16959920.10 22257302.18
Total 187548443.45 199958697.93
Including: Expensed Research and Development
187548443.45 199958697.93
Expenditures
Capitalized Development Costs
Other Explanations:
None
2. Development Expenditures on Research and Development Projects Qualifying for
Capitalization
□Applicable ?Not Applicable
Significant Capitalized Research and Development Projects
□Applicable ?Not Applicable
Development Expenditure Impairment Reserves
□Applicable ?Not Applicable
Other Explanations:
None
3. Significant Outsourced Research Projects
□Applicable ?Not Applicable
IX. Changes in Consolidation Scope
1. Enterprise Merger Not Under the Same Control
□Applicable ?Not Applicable
2. Enterprise Merger Under the Same Control
□Applicable ?Not Applicable
3. Reverse Acquisitions
□Applicable ?Not Applicable
4. Disposal of Subsidiaries
Whether there are transactions or matters resulting in loss of control over subsidiaries during the current period
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Method and
Difference key
between the Book value Fair value assumptionsdisposal of of for
Amount of
consideration other
and the share Percentage remaining remaining
determining
the fair comprehensive
Disposal of the of equity equity income related
Time Disposal percentage Disposal Basis for subsidiary's remaining interest at interest at
Gain or loss value of the
arising from remaining to the equity
Name of the of loss consideration at the time method at determining net assets equity the date of the date of remeasurement equity investment in
subsidiary of at the time of of loss of the time the time ofof loss of loss of attributable to
interest at loss of loss of
the date of control at control at of remaining interest at
the former
control loss of control control control: control: the disposed
subsidiary
(%) investment at loss of the the
equity interest the date of transferred to
the control consolidated consolidated
at fair value loss of
control at investment
consolidated (%) financial financial the income or
financial statements statements consolidated retained
statements level level financial earnings
level statements
level
Plumino
Precision April Transfer Completionof equity Not
Fermentation 1 525834529.63 100 by equity transfer 35066419.30 - - - - 8743832.40agreement Applicable
(Thailand) 2026 procedures
Co. Ltd
Other Explanations:
□Applicable ?Not Applicable
Whether there are instances in which the disposal of investment in subsidiaries is conducted through multiple transactions and results in loss of control during the
current period
□Applicable ?Not Applicable
Other Explanations:
□Applicable ?Not Applicable
5. Changes in Consolidation Scope Due to Other Reasons
Explanation of changes in consolidation scope due to other reasons (such as establishment of new subsidiaries and liquidation of subsidiaries) and related
circumstances:
□Applicable ?Not Applicable
6. Others
□Applicable ?Not Applicable
X. Equity in Other Entities
1. Equity in Subsidiaries
(1) Composition of Business Group
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Names of Main Operating Place of Stock Ownership Ratio (%)
Registered Capital Currency Business Nature Acquisition Method
Subsidiaries Location Registration Direct Indirect
Tongliao Meihua Tongliao 1800000000 CNY Tongliao Manufacturing 100 Investment or Establishment
Tongliao Merger Not Under the Same
Tongliao 233000000 CNY Tongliao Manufacturing 100
Jianlong Control
Xinjiang Meihua Wujiaqu 2500000000 CNY Wujiaqu Manufacturing 100 Investment or Establishment
Xinjiang Merger Not Under the Same
Wujiaqu 260000000 CNY Wujiaqu Manufacturing 100
Agriculture Control
Wujiaqu
Wujiaqu 160000000 CNY Wujiaqu Manufacturing 100 Investment or Establishment
Jianlong
Langfang R & D Langfang 38000000 CNY Langfang Technological 100 Investment or Establishment
Development
Technological
Shanghai R & D Shanghai 31000000 CNY Shanghai 100 Investment or Establishment
Development
Langfang
Langfang 25000000 CNY Langfang Warehousing 100 Investment or Establishment
BAIAN
Langfang
Langfang 250000000 CNY Langfang Manufacturing 100 Investment or Establishment
Seasoning
Tongliao
Tongliao 5000000 CNY Tongliao Manufacturing 100 Investment or Establishment
Seasoning
Hong Kong
Hong Kong 6277900 CNY Hong Kong Trading 100 Investment or Establishment
Meihua
Lhasa Meihua Lhasa 800000000 CNY Lhasa Investment 100 Investment or Establishment
Jilin Meihua Baicheng 2000000000 CNY Baicheng Manufacturing 100 Investment or Establishment
Hengqin Meihua Hengqin 432315000 CNY Zhuhai Investment 100 Investment or Establishment
Hong Kong Hong Kong
Hong Kong 490463215 Hong Kong Investment 100 Investment or Establishment
Holding Dollar
Cayman
Cayman 5000000 US Dollar Cayman Investment 100 Investment or Establishment
Company
Singapore
Singapore 10000000 Singapore Dollar Singapore Trading 100 Investment or Establishment
Company
SPV Singapore 1 Singapore Dollar Singapore Investment 100 Investment or Establishment
PUS United States 5000 US Dollar United States Investment 100 Investment or Establishment
PUSA United States 5000 US Dollar United States Trading 100 Investment or Establishment
Merger Not Under the Same
SP Shanghai 88900000 US Dollar Shanghai Manufacturing 100
Control
TP Thailand 7150000000 Thai Baht Thailand Manufacturing 100 Disposed of
Merger Not Under the Same
UP United States 20000000 US Dollar United States Manufacturing 100
Control
Merger Not Under the Same
PJP Japan 5000000 Japanese Yen Japan Trading 100
Control
Merger Not Under the Same
PSG Singapore 4000000 US Dollar Singapore Trading 100
Control
Merger Not Under the Same
PEU Germany 1030000 Euro Germany Trading 100
Control
Merger Not Under the Same
PGD Guanagzhou 3361280 CNY Guanagzhou Trading 100
Control
Explanation of the Difference between Ownership Ratio and Voting Rights Ratio in Subsidiaries:
None
Basis for Controlling Invested Units with Half or Less than Half of Voting Rights and Not Controlling Invested Units with More than Half of Voting Rights:
None
Basis for Controlling Significant Structured Entities Included in the Consolidation Scope:
None
Basis for Determining Whether the Company is an Agent or Principal:
None
Other Explanations:
None
(2) Significant Non-Wholly-Owned Subsidiaries
□Applicable ?Not Applicable
(3) Main Financial Information of Significant Non-Wholly-Owned Subsidiaries
□Applicable ?Not Applicable
(4) Significant Restrictions on the Use of Business Group’s Assets and Settlement of Business Group’s
Debts
□Applicable ?Not Applicable
(5) Financial Support or Other Support Provided for Structured Entities Included in the Scope of
Consolidated Financial Statements
□Applicable ?Not Applicable
Other Explanations:
□Applicable ?Not Applicable
2. Transactions where Owners’ Equity Shares in Subsidiaries Change but Control is Maintained
□Applicable ?Not Applicable
3. Equity in Joint Ventures or Associates
?Applicable □ Not Applicable
(1) Significant Joint Ventures or Associates
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Stock Ownership Ratio Accounting
(%) Treatment
Main
Names of Joint Ventures or Place of Business Methods for
Operating
Associates Registration Nature Investment in Joint
Location Direct Indirect
Venture or
Associates
Tongliao Desheng Bio-Tech
Tongliao Tongliao Manufacturing 49 Equity Method
Co. Ltd.Explanation of the Difference between Ownership Ratio and Voting Rights Ratio in Joint Ventures or
Associates:
None
Basis for Holding Less than 20% Voting Rights but Having Significant Influence or Holding 20% or More
Voting Rights but Not Having Significant Influence:
None
(2) Main Financial Information of Significant Joint Ventures
□Applicable ?Not Applicable
(3) Main Financial Information of Significant Associates
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Ending Balance/ Amount Beginning Balance/ Amount
Incurred During the Current Incurred During the Previous
Period Period
Tongliao Desheng Bio-Tech Co. Tongliao Desheng Bio-Tech Co.Ltd. Ltd.Current Assets 5712694.57 11941216.25
Non-Current Assets 14698732.72 16563759.25
Total Assets 20411427.29 28504975.50
Current Liabilities 13402299.29 17145692.57
Non-Current Liabilities
Total Liabilities 13402299.29 17145692.57
Minority Shareholders’ Equity
Shareholders’ Equity Attributable to the Parent
7009128.00 11359282.93
Company
Net Asset Share Calculated by Stock Ownership
3434472.72 5566048.64
Ratio
Adjustments
--Goodwill
--Unrealized Profits on Internal Transactions
--Others
Book Value of Equity Investments in Associates 2635435.80 4757925.21
Fair Value of Equity Investments in Associates with
Public Quotation
Operating Revenues 33770293.90 55978803.48
Net Profits -4284651.04 -838746.96
Net Profits from Discontinued Operations
Other Comprehensive Income
Total Comprehensive Income -4284651.04 -838746.96
Dividends Received from Associates during the
Current Year
Other Explanations:
None
(4) Consolidated Financial Information of Insignificant Joint Ventures and Associates
□Applicable ?Not Applicable
(5) Explanation of Significant Restrictions on the Ability of Joint Ventures or Associates to Transfer
Funds to the Company
□Applicable ?Not Applicable
(6) Excessive Losses Incurred by Joint Ventures or Associates
□Applicable ?Not Applicable
(7) Unrecognized Commitments Related to Investments in Joint Ventures
□Applicable ?Not Applicable
(8) Contingent Liabilities Related to Investments in Joint Ventures or Associates
□Applicable ?Not Applicable
4. Significant Joint Operations
□Applicable ?Not Applicable
5. Equity in Structured Entities Not Included in the Scope of Consolidated Financial Statements
Explanation of Structured Entities Not Included in the Scope of Consolidated Financial Statements:
□Applicable ?Not Applicable
6. Others
□Applicable ?Not Applicable
XI. Government Grants
1. Government Grants Recognized as Receivables at the End of the Reporting Period
□Applicable ?Not Applicable
Reasons for Not Receiving Expected Amounts of Government Grants at the Anticipated Timing
□Applicable ?Not Applicable
2. Items of Liabilities Related to Government Grants
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Amount
Recorded
Amount Other
Newly Added in Non-
Financial Transferred to Changes
Beginning Grants for the operating Asset/Income
Statement Other Income for the Ending Balance
Balance Current Revenue -related
Items for the Current Current
Period for the
Period Period
Current
Period
Deferred
367624988.38 3011200.00 25089514.75 345546673.63 Asset-related
Income
Total 367624988.38 3011200.00 25089514.75 345546673.63 /
3. Government Grants Recorded in the Profit or Loss for the Current Period
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Amount Incurred during the Current Amount Incurred during the Previous
Types
Period Period
Asset-related 25089514.75 22920234.90
Income-related 107865421.83 114842277.39
Total 132954936.58 137762512.29
Other Explanations:
Government Grants Recorded in the Profit or Loss for the Current Period
Unit: Yuan Currency: RMB
Amount Incurred during the Amount Incurred during the
Income Statement Presentation Items Asset/Income-related
Current Period Previous Period
Other Income 25089514.75 22920234.90 Asset-related
Other Income 105312846.43 114724232.24 Income-related
Financial Expenses (Government
Interest Subsidies) 2552575.40 118045.15 Income-related
Total 132954936.58 137762512.29 —
XII. Risks Related to Financial Instruments
1. Risks of Financial Instruments
?Applicable □ Not Applicable
The Company’s risks related to financial instruments arise from various financial assets and financial
liabilities recognised in the course of its operations including credit risk liquidity risk and market risk.The formulation of objectives and policies for managing these risks related to financial instruments is
the responsibility of the Company’s management. The operating management team is responsible for day-
to-day risk management through functional departments. The Company’s internal audit department
conducts ongoing supervision over the implementation of risk management policies and procedures and
reports relevant findings to the Company’s Audit Committee in a timely manner.The overall objective of the Company’s risk management is to establish risk management policies that
minimise risks related to financial instruments as far as possible without unduly affecting the Company’s
competitiveness and responsiveness.
1.Credit Risk
Credit risk refers to the risk that one party to a financial instrument will fail to discharge its obligations
thereby causing financial loss to the other party. The Company’s credit risk mainly arises from cash and
cash equivalents notes receivable accounts receivable financing receivables other receivables contract
assets and long-term receivables. The credit risk of these financial assets originates from counterparty
default and the maximum exposure to credit risk is equal to their book amounts.The Company’s cash and cash equivalents are mainly deposited with commercial banks and other
financial institutions. The Company considers that these commercial banks have relatively high credit
standing and sound financial conditions and therefore the associated credit risk is low.For notes receivable accounts receivable financing receivables other receivables contract assets and
long-term receivables the Company has established relevant policies to control credit risk exposure. The
Company assesses customers’ creditworthiness based on their financial condition the availability of third-
party guarantees credit history and other factors such as current market conditions and sets appropriate
credit terms accordingly. The Company regularly monitors customers’ credit records. For customers with
poor credit history the Company adopts measures such as issuing written reminders shortening credit
terms or cancelling credit terms to ensure that the overall credit risk remains within a controllable range.
(1) Criteria for Significant Increase in Credit Risk
At each balance sheet date the Company assesses whether the credit risk of the relevant financial
instruments has increased significantly since initial recognition. In determining whether a significant
increase in credit risk has occurred since initial recognition the Company considers reasonable and
supportable information that is available without undue cost or effort including qualitative and quantitative
analysis based on the Company’s historical data external credit risk ratings and forward-looking
information. The Company determines changes in the risk of default over the expected life of a financial
instrument by comparing the risk of default at the reporting date with that at initial recognition on an
individual financial instrument basis or a portfolio basis with similar credit risk characteristics.The Company considers that the credit risk of a financial instrument has increased significantly when
one or more of the following quantitative or qualitative criteria are triggered: quantitative criteria mainly
include a significant increase in the probability of default over the remaining lifetime at the reporting date
compared with that at initial recognition exceeding a certain threshold; qualitative criteria include
significant adverse changes in the debtor’s operating or financial conditions inclusion on a watchlist of
customers etc.
(2) Definition of Credit-Impaired Financial Assets
To determine whether a financial asset is credit-impaired the Company applies criteria consistent with
its internal credit risk management objectives for the relevant financial instruments and considers both
quantitative and qualitative indicators.In assessing whether a debtor is credit-impaired the Company mainly considers the following factors:
significant financial difficulty of the issuer or debtor; breach of contract by the debtor such as default or
overdue payment of interest or principal; concessions granted to the debtor for economic or contractual
reasons related to the debtor’s financial difficulty that would not otherwise be considered; high probability
of bankruptcy or other financial restructuring of the debtor; disappearance of an active market for the
financial asset due to financial difficulties of the issuer or debtor; purchase or origination of a financial
asset at a deep discount that reflects incurred credit losses.Credit impairment of financial assets may result from the combined effect of multiple events and may
not necessarily be attributable to a single identifiable event.
(3) Parameters for Measurement of Expected Credit Losses
Based on whether there has been a significant increase in credit risk and whether credit impairment
has occurred the Company measures loss allowances at an amount equal to 12-month expected credit
losses or lifetime expected credit losses for different assets. The key parameters used in measuring
expected credit losses include probability of default (PD) loss given default (LGD) and exposure at default
(EAD). The Company incorporates both quantitative analysis of historical statistical data (such as
counterparty credit ratings types of guarantees and collateral repayment methods etc.) and forward-
looking information to develop PD LGD and EAD models.The relevant definitions are as follows:
Probability of default refers to the likelihood that a debtor will be unable to fulfil its repayment
obligations over the next 12 months or over the remaining lifetime of the instrument.Loss given default refers to the Company’s expectation of the extent of loss arising from exposure at
default. LGD varies depending on the type of counterparty the method and priority of recovery and the
nature of collateral. It represents the percentage of exposure that will be lost in the event of default
calculated on a 12-month basis or over the remaining lifetime.Exposure at default refers to the amount that the Company expects to be repaid in the event of default
within the next 12 months or over the remaining lifetime of the instrument. Forward-looking information is
incorporated in both the assessment of significant increases in credit risk and the calculation of expected
credit losses. The Company identifies key economic indicators affecting credit risk and expected credit
losses for each business type through historical data analysis.The Company’s maximum exposure to credit risk is the book amount of each financial asset presented
in the balance sheet. The Company has not provided any other guarantees that would expose it to additional
credit risk.For the Company's accounts receivable and contract assets the top five customers accounted for
50.18% (beginning of the year: 48.09%) of total accounts receivable. For other receivables the top five
debtors accounted for 85.42% (beginning of the year: 86.95%) of total other receivables.
2.Liquidity Risk
Liquidity risk refers to the risk that the Company will encounter a shortage of funds when it is unable
to meet its obligations settled by delivering cash or other financial assets. The Company centrally manages
cash across all its subsidiaries including short-term investment of surplus cash and arranging borrowings to
meet anticipated cash requirements. The Company’s policy is to regularly monitor both short-term and
long-term liquidity needs as well as compliance with borrowing covenants to ensure sufficient cash
reserves and readily realisable marketable securities are maintained.As at June 30 2026 the maturities of the Company’s financial liabilities are as follows:
Unit: Yuan Currency: RMB
June 30 2026
Items
Within one year 1-2 years 2-3 years Over 3 years
Short-term borrowings 1831796712.90
Notes payable 2259312216.46
Accounts payable 1819315537.05
Other payables 1437537640.70
Long-term borrowings 229612000.02 1311332000.00 203122000.00 442903123.82
Lease liabilities 1000938.19 371922.02 110365.50
Long-term payables 3447580.57 3447580.57 3447580.57 16562388.49
Total 7582022625.89 1315151502.59 206679946.07 459465512.31
(Continued)
Unit: Yuan Currency: RMB
December 31 2025
Items
Within one year 1-2 years 2-3 years Over 3 years
Short-term borrowings 1800136227.43
Notes payable 1777053969.91
Accounts payable 1735184321.70
Other payables 256349893.68
Long-term borrowings 280045900.02 756401933.35 707451933.27 454825357.21
Lease liabilities 1011449.31 825023.64 159469.07 28473.93
Long-term payables 10500000.00
Total 5849781762.05 757226956.99 707611402.34 465353831.14
3.Market Risk
(1) Exchange Risk
The Company’s foreign exchange risk mainly arises from foreign currency-denominated assets and liabilities held by the Company and its subsidiaries that are
not denominated in their respective functional currencies. The Company is exposed to exchange rate risk primarily in relation to recognised foreign currency assets
and liabilities and future foreign currency transactions (the principal currencies of such assets liabilities and transactions are USD). Except for subsidiaries
established in the Hong Kong Special Administrative Region of the People’s Republic of China and other overseas jurisdictions which conduct transactions and
settlements in USD THB JPY and EUR the Company’s other major operations are denominated and settled in RMB.* As at June 30 2026 the Company’s principal foreign currency exposure arising from foreign currency assets and liabilities is set out below (for presentation
purposes the exposure amounts are stated in RMB and translated at the spot exchange rates prevailing at the balance sheet date):
June 30 2026
US Dollar Euro Hong Kong Dollar British Pound Singapore Dollar Japanese Yen
Items
Foreign Foreign
Foreign currency CNY Foreign currency CNY CNY CNY Foreign currency CNY Foreign currency CNY
currency currency
Monetary Funds 25555209.84 174056057.91 238609.69 1853305.33 887.72 771.03 34.20 308.30 217460.37 1143943.23 143570.00 6036.42
Accounts Receivable 32510487.01 221431728.32 40.00 310.68
Other Receivables 62581.81 426001.30 12906.00 67892.08
Other Current Assets 162492.74 854793.12
Long-Term Receivables 62730.05 329991.45
Accounts Payable 1181911.00 8049877.63
Other Payables 1234902.30 8411163.01 65722.00 345747.17 16863000.00 709005.63
Accrued Employee Compensation 103000.00 89460.65 239497.48 1259876.12
Lease Liabilities 41990.89 220893.08
Non-Current Liabilities Due Within
164495.35 865327.77
One Year
Long-term payables 2621485.07 13790234.99
(Continued)
December 31 2025
US Dollar Euro Hong Kong Dollar British Pound Singapore Dollar Japanese Yen Australian Dollar
Foreig
Items
Foreign n Foreign Foreign
Foreign currency CNY Foreign currency CNY CNY CNY CNY Foreign currency CNY CNY
currency currenc currency currency
y
Monetary Funds 70274067.47 493827298.77 2211985.26 18216804.07 6887.68 6221.09 34.20 322.66 93852.93 512305.45 513405.00 22997.77 1283.68 6019.46
Accounts Receivable 29213865.34 205242499.24
Other Receivables 60000.00 421728.00 12799.50 69864.38
Other Current Assets 5659.83 30894.53
Long-Term Receivables 42730.05 233244.15
Accounts Payable 747613.38 5258240.29
Other Payables 1196232.96 8408082.22 187.50 1033.02 25263150.00 1131713.34
Accrued Employee
369666.00 333889.72 126280.83 689312.24
Compensation
Lease Liabilities 124926.41 681913.56
Non-Current Liabilities Due
161766.77 883020.09
Within One Year
The Company continuously monitors the scale of its foreign currency transactions and foreign currency assets and liabilities in order to minimise exposure to
foreign exchange risk. To this end the Company may enter into forward foreign exchange contracts or currency swap agreements to hedge against foreign exchange
risk.
(2) Interest Rate Risk
The Company’s interest rate risk mainly arises from interest-bearing liabilities such as short-term borrowings and long-term bank borrowings. Financial
liabilities with floating interest rates expose the Company to cash flow interest rate risk while those with fixed interest rates expose the Company to fair value
interest rate risk. The Company determines the appropriate proportion of fixed-rate and floating-rate arrangements based on prevailing market conditions.The Group’s head office finance department continuously monitors the overall interest rate environment. An increase in interest rates would raise the cost of
new interest-bearing borrowings and the interest expenses on the Company’s outstanding floating-rate debt thereby potentially exerting a material adverse impact
on the Company’s financial performance. Management makes timely adjustments in response to the latest market conditions.2. Hedging
(1) The Company conducts hedging transactions for risk management
□Applicable ?Not Applicable
Other Explanations
□Applicable ?Not Applicable
(2) The Company conducts eligible hedging transactions and applies hedging accounting
□Applicable ?Not Applicable
Other Explanations
□Applicable ?Not Applicable
(3) The Company conducts eligible hedging transactions for risk management and expects to
achieve risk management objectives but does not apply hedging accounting
□Applicable ?Not Applicable
Other Explanations
□Applicable ?Not Applicable
3. Transfer of Financial Assets
(1) Classification of Transfer Methods
□Applicable ?Not Applicable
(2) Financial Assets Derecognized Due to Transfer
□Applicable ?Not Applicable
(3) Financial Assets Continuously Involved in Transfer
□Applicable ?Not Applicable
Other Explanations
□Applicable ?Not Applicable
XIII. Disclosure of Fair Value
1. Ending Fair Value of Assets and Liabilities Measured at Fair Value
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Ending Fair Value
Level 1 Fair Level 2 Fair Level 3 Fair
Items
Value Value Value Total
Measurement Measurement Measurement
I. Continuous Fair Value Measurement
(I) Financial Assets Held for Trading 1979234328.78 1979234328.78
1. Financial Assets Measured at Fair Value with Changes
1979234328.78 1979234328.78
Recorded in the Profit or Loss for the Current Period
(1) Debt Instrument Investments
(2) Equity Instrument Investments
(3) Derivative Financial Assets 2181653.58 2181653.58
Wealth Management Products 1977052675.20 1977052675.20
2. Financial Assets Designated as Measured at Fair Value with
Changes Recorded in the Profit or Loss for the Current Period
(1) Debt Instrument Investments
(2) Equity Instrument Investments
(II) Other Debt Investments
(III) Other Equity Instrument Investments 72089650.00 157000000.00 229089650.00
(IV) Investment Properties
Leased Land Use Rights
Leased Buildings
Land Use Right Held for Transfer After Appreciation
(V) Biological Assets
Consumable Biological Assets
Productive Biological Assets
(VI) Receivables Financing 32134493.66 32134493.66
(VII) Other Non-Current Financial Assets 346396575.38 346396575.38
Total Amount of Assets Measured at Fair Value on a
72089650.00 2514765397.82 2586855047.82
Continuous Basis
(VI) Financial Liabilities Held for Trading 42227.58 42227.58
Financial Liabilities Measured at Fair Value with Changes
42227.58 42227.58
Recorded in the Profit or Loss for the Current Period
Including: Issued Bonds Held for Trading -
Derivative Financial Liabilities 42227.58 42227.58
Others -
2. Financial Liabilities Designated as Measured at Fair Value
with Changes Recorded in the Profit or Loss for the Current -
Period
Total Amount of Liabilities Measured at Fair Value on a
42227.58 42227.58
Continuous Basis
II. Non-Continuous Fair Value Measurement
(I) Assets Held for Sale
Total Amount of Assets Measured at Fair Value on a Non-
Continuous Basis
Total Amount of Liabilities Measured at Fair Value on a
Non-Continuous Basis
2. Basis for Determining Market Prices for Continuous and Non-continuous Level 1 Fair Value
Measurement Items
?Applicable □ Not Applicable
Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities.
3. Qualitative and Quantitative Information on Valuation Techniques and Significant Parameters
Adopted for Continuous and Non-continuous Level 2 Fair Value Measurement Items
?Applicable □ Not Applicable
Level 2: Directly or indirectly observable inputs other than quoted prices included in Level 1 for
related assets or liabilities.The Company’s financial assets at fair value through profit or loss include bank wealth
management products and equity instrument investments. The Company determines their fair value
using specific valuation techniques.
4. Qualitative and Quantitative Information on Valuation Techniques and Significant Parameters
Adopted for Continuous and Non-continuous Level 3 Fair Value Measurement Items
?Applicable □ Not Applicable
Level 3: Unobservable inputs for related assets or liabilities.Given their relatively short remaining maturities the book value of receivables financing.
5. Adjustment Information of Beginning and Ending Book Values and Sensitivity Analysis of
Unobservable Parameters for Continuous Level 3 Fair Value Measurement Items
□Applicable ? Not Applicable
6. Reasons for Transition between Various Levels Occurring during the Current Period and
Policies for Determining Transitioning Timing for Continuous Fair Value Measurement Items
□Applicable ?Not Applicable
7. Changes in Valuation Techniques Occurring During the Current Period and Reasons for Such
Changes
□Applicable ?Not Applicable
8. Status of Fair Value of Financial Assets and Financial Liabilities Not Measured at Fair Value
?Applicable □ Not Applicable
The Company’s financial assets and financial liabilities measured at amortized cost mainly include:
cash and cash equivalents notes receivable accounts receivable other receivables debt investments
short-term borrowings notes payable accounts payable and other payables.The book values of the
above financial assets and liabilities not measured at fair value differ only slightly from their fair values.
9. Others
□Applicable ?Not Applicable
XIV. Related Parties and Related Transactions
1. Information of the Company’s Parent Company
?Applicable □ Not Applicable
Unit: 10000 yuan Currency: RMB
Parent Company’s Parent Company’s
Name of Parent Place of
Business Nature Registered Stock Ownership in Voting Rights in the
Company Registration
the Company (%) Company (%)
Meng Qingshan 30.46
Explanation of the Status of the Company’s Parent Company
None
The Company’s ultimate controlling party is Mr. Meng Qingshan. Ms. Wang Aijun Mr. He Jun Ms.Wang Ailing Mr. Wang Aimin and Ms. Wang Aidi are his parties acting in concert.Other Explanations:
None
2. Information of the Company’s Subsidiaries
Refer to the notes for the details of the Company’s Subsidiaries
?Applicable □ Not Applicable
Refer to 1 in Section IX for equity in subsidiaries
3. Information of the Company’s Joint Ventures and Associates
Refer to the notes for the details of the Company’s significant joint ventures or associates
□Applicable ?Not Applicable
Other joint ventures or associates with related transactions with the Company during the current period
or with balances formed from related transactions with the Company during the previous period are as
follows:
?Applicable □ Not Applicable
Names of Joint Ventures or Associates Relationship with the Company
Tongliao Desheng Bio-tech Co. Ltd. Associate
Other Explanations:
□Applicable ?Not Applicable
4. Information of Other Related Parties
?Applicable □ Not Applicable
Names of Other Related Parties Relationship with the Company
Hu Jijun Shareholder of the Company
Liang Yubo The Shareholders and Senior Executive of the company.Wang Aijun The Shareholders and Senior Executive of the company.He Jun The Shareholders and Senior Executive of the company.Wang Ailing The Shareholders and Senior Executive of the company.Liu Xinghua Director of the Company
Lu Chuang Director of the Company
Zhou Zhen Director of the Company
Liu Xiaojing Employee Representative Directors of the Company
Liu Xianfang Senior Executive of the Company
Wang Lihong Senior Executive of the Company
The Legal Representative of the company is a direct relative of the
Tibet Meihua Charity Foundation
shareholder of the Company
Other Explanations:
None
Note: The above table only lists related parties with which the Company had related-party
transactions and dealings during the reporting period.
5. Information of Related Transactions
(1) Related Transactions for Purchasing and Selling Goods/Providing and Accepting Labor
Services
Table of Purchasing Goods/Accepting Labor Services
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Amount
Amount Approved Exceeding
Incurred
Content of Related Incurred during Transaction Transaction Limit
Related Party during the
Transaction the Current Amount (if or Not (if
Previous
Period applicable) applicable)
Period
Tongliao
Desheng Bio- Raw Materials 62986.28
Tech Co. Ltd.Table of Selling Goods/Providing Labor Services
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Content of Related Amount Incurred during the Amount Incurred during the
Related Party
Transaction Current Period Previous Period
Tongliao Desheng Bio-tech Co.Goods 27785882.43 40939356.32
Ltd.Tongliao Desheng Bio-tech Co.Services and Others 264449.98 468821.28
Ltd.Total 28050332.41 41408177.60
Explanation of Related Transactions for Purchasing and Selling Goods / Providing and Accepting
Services
□Applicable ?Not Applicable
(2) Information of Related Delegated Management/Contracting and Delegating Management
/Outsourcing
Table of the Delegated Management/Contracting by the Company:
□Applicable ?Not Applicable
Explanation of Related Delegated Management/Contracting
□Applicable ?Not Applicable
Table of Delegating Management/Outsourcing by the Company
□Applicable ?Not Applicable
Explanation of Related Management/Outsourcing
□Applicable ?Not Applicable
(3) Information of Related Leases
The Company as the Lessor:
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Lease Revenue Recognized during the Current
Name of Lessee Types of Leased Asset Lease Revenue Recognized during the Previous Period
Period
Tongliao Desheng Bio-tech Co. Ltd. Property 511832.56 754159.91
The Company as the Lessee:
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Amount Incurred during the Current Period Amount Incurred during the Previous Period
Rental Rental
expenses Variable expenses Variable
for short- lease for short- lease
term leases payments term leases payments
Interest Interest
Types of Leased and low- not included Additions and low- not included Additions
Name of Lessor expense on expense on
Asset value asset in the Rent paid to right-of- value asset in the Rent paid to right-of-
lease lease
leases measurement use assets leases measurement use assets
liabilities liabilities
under the of lease under the of lease
simplified liabilities (if simplified liabilities (if
approach (if applicable) approach (if applicable)
applicable) applicable)
Tongliao
Machinery and
Desheng Bio- 142065.64
Equipment
tech Co. Ltd.Explanation of Related Leases
□Applicable ?Not Applicable
(4) Information of Related Guarantee
The Company as the Guarantor
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Expiry Date of Whether the Guarantee Has
Guaranteed Party Guaranteed Amount Start Date of Guarantee
Guarantee Been Fully Fulfilled
Tongliao Meihua 95666733.34 2023/5/22 2038/5/8 No
Tongliao Meihua 1666666.66 2023/5/22 2038/5/8 Yes
Tongliao Meihua 18463641.09 2024/6/6 2038/5/8 No
Tongliao Meihua 321666.67 2024/6/6 2038/5/8 Yes
Tongliao Meihua 9566653.41 2024/6/13 2038/5/8 No
Tongliao Meihua 166666.67 2024/6/13 2038/5/8 Yes
Tongliao Meihua 5739992.04 2024/6/19 2038/5/8 No
Tongliao Meihua 100000.00 2024/6/19 2038/5/8 Yes
Tongliao Meihua 14349980.12 2024/6/26 2038/5/8 No
Tongliao Meihua 250000.00 2024/6/26 2038/5/8 Yes
Tongliao Meihua 44000000.00 2024/10/21 2027/10/21 No
Tongliao Meihua 500000.00 2024/10/21 2027/10/21 Yes
Tongliao Meihua 52800000.00 2024/10/21 2027/10/21 No
Tongliao Meihua 600000.00 2024/10/21 2027/10/21 Yes
Tongliao Meihua 35200000.00 2024/10/24 2027/10/21 No
Tongliao Meihua 400000.00 2024/10/24 2027/10/21 Yes
Tongliao Meihua 44000000.00 2024/10/24 2027/10/21 No
Tongliao Meihua 500000.00 2024/10/24 2027/10/21 Yes
Tongliao Meihua 35200000.00 2024/11/14 2027/10/21 No
Tongliao Meihua 400000.00 2024/11/14 2027/10/21 Yes
Tongliao Meihua 35200000.00 2024/11/18 2027/10/21 No
Tongliao Meihua 400000.00 2024/11/18 2027/10/21 Yes
Tongliao Meihua 17600000.00 2024/11/20 2027/10/21 No
Tongliao Meihua 200000.00 2024/11/20 2027/10/21 Yes
Tongliao Meihua 143213000.00 2025/5/20 2038/5/8 No
Tongliao Meihua 2495000.00 2025/5/20 2038/5/8 Yes
Xinjiang Meihua 95000000.00 2024/7/25 2027/7/25 No
Xinjiang Meihua 2000000.00 2024/7/25 2027/7/25 Yes
Total 656000000.00
The Company as the Guaranteed Party
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Start Date of Expiry Date of Whether the Guarantee Has
Guarantor Guaranteed Amount
Guarantee Guarantee Been Fully Fulfilled
Tongliao Meihua
175000000.00 2023/3/31 2026/3/31 Yes
Xinjiang Meihua
Tongliao Meihua 35000000.00 2023/4/23 2026/3/31 Yes
Xinjiang Meihua
Tongliao Meihua
26000000.00 2024/6/11 2027/6/11 No
Xinjiang Meihua
Tongliao Meihua
1000000.00 2024/6/11 2027/6/11 Yes
Xinjiang Meihua
Total 237000000.00
Explanation of Related Guarantees
?Applicable □ Not Applicable
Xinjiang Meihua as the guarantor
Whether
the
Guaranteed Amount Start Date of Expiry Date of Guarantee
Guarantor
(yuan) Guarantee Guarantee Has Been
Fully
Fulfilled
Tongliao Meihua 73000000.00 2023/8/28 2038/6/20 No
Tongliao Meihua 2000000.00 2023/8/28 2038/6/20 Yes
Tongliao Meihua 40000000.00 2024/2/6 2027/2/4 No
Tongliao Meihua 1000000.00 2024/2/6 2027/2/4 Yes
Tongliao Meihua 14819832.28 2024/12/5 2039/11/27 No
Tongliao Meihua 4538021.20 2024/12/12 2039/11/27 No
Tongliao Meihua 3978347.92 2024/12/19 2039/11/27 No
Tongliao Meihua 2095843.43 2024/12/25 2039/11/27 No
Tongliao Meihua 20725937.66 2025/2/13 2039/11/27 No
Tongliao Meihua 5033161.44 2025/2/20 2039/11/27 No
Tongliao Meihua 2618621.00 2025/3/13 2039/11/27 No
Tongliao Meihua 17000000.00 2025/3/25 2039/11/27 No
Tongliao Meihua 4345889.20 2025/4/10 2039/11/27 No
Tongliao Meihua 924221.72 2025/7/4 2039/11/27 No
Tongliao Meihua 617779.60 2025/8/6 2039/11/27 No
Tongliao Meihua 1786020.00 2025/8/20 2039/11/27 No
Tongliao Meihua 6124927.36 2025/11/6 2039/11/27 No
Tongliao Meihua 39000000.00 2025/12/23 2039/11/27 No
Tongliao Meihua 14000000.00 2025/12/26 2039/11/27 No
Tongliao Meihua 3600000.00 2026/1/9 2039/11/27 No
Total 257208602.81
(5) Fund Borrowing by Related Parties
□Applicable ?Not Applicable
(6) Status of Transfer of Assets and Debt Restructuring by Related Parties
□Applicable ?Not Applicable
(7) Compensation of Key Management Personnel
?Applicable □ Not Applicable
Unit: 10000 yuan Currency: RMB
Amount Incurred during the Current Amount Incurred during the
Items
Period Previous Period
Compensation of Key Management
755 672.59
Personnel
(8) Other Related Transactions
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Items Name Related Party Amount Incurred during Amount Incurred during the
the Current Period Previous Period
Tibet Meihua Charity
Donations 3000000.00 1500000.00
Foundation
Total 3000000.00 1500000.00
6. Status of Items Receivable and Payable Unsettled by Related Parties
(1) Items Receivable
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Ending Balance Beginning Balance
Item Name Related Party Bad Debt Bad Debt
Book Balance Book Balance
Reserves Reserves
Dividends Tongliao Desheng Bio-tech
1395866.49 1395866.49 1395866.49
Receivable Co. Ltd.Accounts Tongliao Desheng Bio-tech
512968.91 25648.45 467401.24 23370.06
Receivable Co. Ltd.
(2) Items Payable
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Item Name Related Party Ending Balance Beginning Balance
Contract Liabilities Tongliao Desheng Bio-tech Co. Ltd. 32743.36 1500884.96
Other Current Liabilities Tongliao Desheng Bio-tech Co. Ltd. 4256.64 195115.04
Accounts Receivable Tongliao Desheng Bio-tech Co. Ltd. 231593.55
(3) Other Items
□Applicable ?Not Applicable
7. Commitments by Related Parties
□Applicable ?Not Applicable
8. Others
□Applicable ?Not Applicable
XV. Share-based Payments
1. Various Equity Instruments
(1) Details
□Applicable ?Not Applicable
(2) Stock options or other equity instruments outstanding at the end of the period
□Applicable ?Not Applicable
2. Status of Share-based Payments Settled by Equity
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Recipients of Equity-settled Share-based Payments
Methods for Determining the Fair Value of Equity Instruments on
Closing Price on the Grant Date
the Grant Date
Significant Parameters for Determining the Fair Value of Equity
Instruments on the Grant Date
Basis for Determining the Quantity of Exercisable Equity Estimation Based on the Actual Quantity of
Instruments Restricted Stock Recipients
Reasons for Significant Differences between Estimates for the
Current Period and Previous Period
Accumulated Amount of Share-based Payments Settled by Equity
240893078.26
Recorded in Capital Reserves
Other Explanations:
None
3. Status of Share-based Payments Settled by Cash
□Applicable ?Not Applicable
4. Share-based Payment Expenses during the Current Period
□Applicable ?Not Applicable
5. Modification and Termination of Share-based Payment
□Applicable ?Not Applicable
6. Others
□Applicable ?Not Applicable
XVI. Commitments and Contingencies
1. Significant Commitments
?Applicable □ Not Applicable
Significant Commitments to External Parties as of the Balance Sheet Date and Their Nature and
Amounts
As of June 30 2026 the Company has no significant commitments that require disclosure but have
not been disclosed.
2. Contingencies
(1) Significant Contingencies as of the Balance Sheet Date
?Applicable □ Not Applicable
(1) Contingencies Arising from Pending Litigation or Arbitration and Their Financial Impact
Amount
Plaintiff Defendant Cause of Action Court of CaseAcceptance inDispute Status
The plaintiff alleges that it is a legal entity
duly incorporated in Japan and has been
engaged in the R&D and production of
The Company monosodium glutamate (MSG) and other Case
and its wholly- seasonings since its establishment. The has been
owned plaintiff holds Invention Patent No. Higher acceptedAjinomoto Co. subsidiaries 200580045189.5 titled “Microorganisms People's 130 by theInc. (Japan) Tongliao Producing L-Glutamic Acid and Method for Court of million courtMeihua Producing L-Glutamic Acid.” Guangdong yuan and has
Xinjiang The plaintiff claims that the defendants Province not yet
Meihua and infringed its patent rights (patent No. gone to
Jilin Meihua 200580045189.5) during the production and trial
sale of MSG products and has therefore filed
a lawsuit with the Higher People's Court of
Guangdong Province.The Company The plaintiff holds Invention Patent No. Caseand its wholly- 201480005332.7 titled “Method for has beenowned Producing L-Amino Acids.” Higher accepted
Ajinomoto Co. subsidiaries The plaintiff claims that the defendants People's 130 by the
Inc. (Japan) Tongliao infringed its patent rights (patent No. Court of million courtMeihua 201480005332.7) during the production and Guangdong yuan and has
Xinjiang sale of MSG products and has therefore filed Province not yet
Meihua and a lawsuit with the Higher People's Court of gone to
Jilin Meihua Guangdong Province. trial
The Company and its wholly-owned subsidiaries Tongliao Meihua Xinjiang Meihua and Jilin
Meihua have been sued by third parties in relation to debt disputes with a claimed amount of 260
million yuan. As of the date of this report the case is still under trial.Except for the above contingencies the Company has no other significant contingencies that
require disclosure as of June 30 2026.
(2) Explanation should be also provided even if the Company has no significant contingencies that
require disclosure:
□Applicable ?Not Applicable
3. Others
□Applicable ?Not Applicable
XVII. Matters after the Balance Sheet Date
1. Significant Non-Adjusting Matters
□Applicable ?Not Applicable
2. Status of Profit Distribution
□Applicable ?Not Applicable
3. Sales Returns
□Applicable ?Not Applicable
4. Explanation of Matters after Other Balance Sheet Dates
□Applicable ?Not Applicable
XVIII. Other Significant Matters
1. Correction of Prior Accounting Errors
(1) Retrospective restatement method
□Applicable ?Not Applicable
(2) Prospective application method
□Applicable ?Not Applicable
2. Significant Debt Restructuring
□Applicable ?Not Applicable
3. Asset Swap
(1) Exchange of Non-monetary Assets
□Applicable ?Not Applicable
(2) Other Asset Swap
□Applicable ?Not Applicable
4. Pension Plans
□Applicable ?Not Applicable
5. Termination of Operations
□Applicable ?Not Applicable
6. Segment Information
(1) Determination Basis and Accounting Policies for Reporting Segments
□Applicable ?Not Applicable
(2) Financial Information of Reporting Segments
□Applicable ?Not Applicable
(3) If the company does not have reporting segments or cannot disclose the total assets and
liabilities of each reporting segment the reasons should be explained.□Applicable ?Not Applicable
(4) Other Explanations
□Applicable ?Not Applicable
7. Other Significant Transactions and Matters Affecting Decisions by Investors
□Applicable ?Not Applicable
8. Others
□Applicable ?Not Applicable
XIX. Notes to Main Items on the Parent Company’s Financial Statement
1. Accounts Receivable
(1) Disclosure by Aging
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Aging Ending Book Balance Beginning Book Balance
Within 1 year (including 1 year) 272668772.39 252454693.41
Within 1 year 272668772.39 252454693.41
1 to 2 years
2 to 3 years
Over 3 years
3 to 4 years
4 to 5 years
Over 5 years
Total 272668772.39 252454693.41
(2) Classified Disclosure by Bad Debt Provision Methods
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Ending Balance Beginning Balance
Book Balance Bad Debt Reserves Book Balance Bad Debt Reserves
Category
Ratio Provision Ratio Provision
Amount Amount Book Value Amount Amount Book Value
(%) Ratio(%) (%) Ratio(%)
Provisions
for Bad Debt
Reserves on
an
Individual-
item Basis
Including:
Provisions
for Bad Debt
Reserves on a 272668772.39 100.00 12394524.01 4.55 260274248.38 252454693.41 100.00 12350111.11 4.89 240104582.30
Portfolio
Basis:
Including:
Including:
Related Party
Portfolio
within the 24778292.21 9.09 - 24778292.21 5452471.29 2.16 5452471.29
Consolidation
Scope
Aging
Analysis 247890480.18 90.91 12394524.01 5.00 235495956.17 247002222.12 97.84 12350111.11 5.00 234652111.01
Portfolio
Total 272668772.39 / 12394524.01 / 260274248.38 252454693.41 / 12350111.11 / 240104582.30
Provisions for Bad Debt Reserves on an Individual-item Basis:
□Applicable ?Not Applicable
Provisions for Bad Debt Reserves on a Portfolio Basis:
?Applicable □ Not Applicable
Items for provisions on a portfolio basis: Aging Analysis Portfolio
Unit: Yuan Currency: RMB
Ending Balance
Name
Book Balance Bad Debt Reserves Provision Ratio (%)
Within 1 year 247890480.18 12394524.01 5.00
Total 247890480.18 12394524.01 5.00
Explanation of Provisions for Bad Debt Reserves on a Portfolio Basis:
□Applicable ?Not Applicable
Provisions for Bad Debt Reserves based on the General Model of Expected Credit Losses
□Applicable ?Not Applicable
Basis for Staging and Provision Ratios for Bad Debt Reserves
None
Explanation of significant changes in the book balance of accounts receivable with changes in loss
reserves during the current period:
□Applicable ?Not Applicable
(3) Status of Bad Debt Reserves
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Amount of Changes in the Current Period
Beginning Recovered Ending
Category Written Other
Balance Provision or Balance
off Changes
Reversed
Bad debt provision on an individual
basis
Bad debt provision on a portfolio
basis
Including: Related Party Portfolio
within the Consolidation Scope
Aging Analysis Portfolio 12350111.11 44412.90 12394524.01
Total 12350111.11 44412.90 - - - 12394524.01
Including bad debts with significant amounts to be recovered or reversed during the period:
□Applicable ?Not Applicable
Other Explanations:
None
(4) Status of Accounts Receivable Actually Written Off during the Current Period
□Applicable ?Not Applicable
Including write-off of significant accounts receivable
□Applicable ?Not Applicable
Explanation of write-off of accounts receivable:
□Applicable ?Not Applicable
(5) Overview of Accounts Receivable and Contract Assets Ranking Top Five in Ending Balances
Aggregated by Debtors
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Proportion in the
Total Ending
Ending Balance of
Ending Balance Ending Balance Balance of Ending Balance
Accounts
Company Name of Accounts of Contract Accounts of Bad Debt
Receivable and
Receivable Assets Receivable and Reserves
Contract Assets
Contract Assets
(%)
First 72863932.25 72863932.25 26.72 3643196.61
Second 47940642.03 47940642.03 17.58 2397032.10
Third 22471130.00 22471130.00 8.24 1123556.50
Fourth 18475251.42 18475251.42 6.78 923762.57
Fifth 17346021.85 17346021.85 6.36 867301.09
Total 179096977.55 179096977.55 65.68 8954848.87
Other Explanations:
None
Other Explanations:
□Applicable ?Not Applicable
2. Other Receivables
Presentation of Items
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Items Ending Balance Beginning Balance
Interest Receivable
Dividends Receivable 900000000.00 850000000.00
Other Receivables 450291213.36 461253600.04
Total 1350291213.36 1311253600.04
Other Explanations:
□Applicable ?Not Applicable
Interest Receivable
(1) Classification of Interest Receivable
□Applicable ?Not Applicable
(2) Significant Overdue Interest
□Applicable ?Not Applicable
(3) Classified Disclosure by Bad Debt Provision Methods
□Applicable ?Not Applicable
Provisions for Bad Debt Reserves on an Individual-item Basis:
□Applicable ?Not Applicable
Explanation of Provisions for Bad Debt Reserves on an Individual-item Basis:
□Applicable ?Not Applicable
Provisions for Bad Debt Reserves on a Portfolio Basis:
□Applicable ?Not Applicable
(4) Provisions for Bad Debt Reserves based on the General Model of Expected Credit Losses
□Applicable ?Not Applicable
(5) Status of Bad Debt Reserves
□Applicable ?Not Applicable
Including bad debts with significant amounts to be recovered or reversed during the period:
□Applicable ?Not Applicable
Other Explanations:
None
(6) Status of Interest Receivable Actually Written Off during the Current Period
□Applicable ?Not Applicable
Including write-off of significant interest receivable
□Applicable ?Not Applicable
Write-off Explanation:
□Applicable ?Not Applicable
Other Explanations:
□Applicable ?Not Applicable
Dividends Receivable
(1) Dividends Receivable
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Items (or Invested Units) Ending Balance Beginning Balance
Tongliao Meihua 350000000.00 350000000.00
Xinjiang Meihua 100000000.00
Jilin Meihua 150000000.00 200000000.00
Hong Kong Meihua 300000000.00 300000000.00
Total 900000000.00 850000000.00
(2) Significant Dividends Receivable with an Aging Exceeding 1 year
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Whether Impairment
Reason for Non-
Items (or Invested Units) Ending Balance Aging Has Occurred and
receipt
Basis for Assessment
RMB100000000 due
Within one year and RMB No Payment Has
Hong Kong Meihua 300000000.00 No
200000000 due in 1 to 2 Been Scheduled Yet
years.Total 300000000.00 / / /
(3) Classified Disclosure by Bad Debt Provision Methods
□Applicable ?Not Applicable
Provisions for Bad Debt Reserves on an Individual-item Basis:
□Applicable ?Not Applicable
Explanation of Provisions for Bad Debt Reserves on an Individual-item Basis:
□Applicable ?Not Applicable
Provisions for Bad Debt Reserves on a Portfolio Basis:
□Applicable ?Not Applicable
(4) Provisions for Bad Debt Reserves based on the General Model of Expected Credit Losses
□Applicable ?Not Applicable
(5) Status of Bad Debt Reserves
□Applicable ?Not Applicable
Including bad debts with significant amounts to be recovered or reversed during the period:
□Applicable ?Not Applicable
Other Explanations:
None
(6) Status of Dividends Receivable Actually Written Off during the Current Period
□Applicable ?Not Applicable
Including write-off of significant dividends receivable
□Applicable ?Not Applicable
Write-off Explanation:
□Applicable ?Not Applicable
Other Explanations:
□Applicable ?Not Applicable
Other Receivables
(1) Disclosure by Aging
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Aging Ending Book Balance Beginning Book Balance
Within 1 year (including 1 year) 449761056.89 461077611.94
Within 1 year 449761056.89 461077611.94
1 to 2 years 654107.98 188732.82
2 to 3 years 188732.82 100000.00
Over 3 years
3 to 4 years 143883.77
4 to 5 years 143883.77
Over 5 years 85842687.00 86042687.00
Total 536590468.46 547552915.53
(2) Classification by Nature of Accounts
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Nature of Accounts Ending Book Balance Beginning Book Balance
Intercompany Account Current 445372448.36 458361345.55
Deposits 170000.00 470000.00
Receivables for Land and Real Estate 85672687.00 85672687.00
Others 1049668.07 1074893.62
Export Tax Refunds receivable 4325665.03 1973989.36
Total 536590468.46 547552915.53
(3) Provision for Bad Debt Reserves
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Phase 1 Phase 2 Phase 3
Expected
Expected Expected Credit
Credit Losses for
Bad Debt Reserves Credit Losses Losses for the entire Total
the entire Duration
over the Next 12 Duration (without
(with Credit
Months Credit Impairment)
Impairment)
Balance as of January 1 2026 626628.49 85672687.00 86299315.49
Balance as of January 1 2026
during the Current Period
-- Transferred to Phase 2
-- Transferred to Phase 3
-- Reversed to Phase 2
-- Reversed to Phase 1
Provision for the Current
Period
Reversal for the Current
60.39 60.39
Period
Write-off for the Current
Period
Write-off for the Current
Period
Other Changes
Balance as of June 30 2026 626568.10 - 85672687.00 86299255.10
Basis for Staging and Provision Ratios for Bad Debt Reserves
None
Explanation of significant changes in the book balance of other receivables with changes in loss reserves
during the current period:
□Applicable ?Not Applicable
Basis for amount of provisions for bad debt reserves and the assessment of significant increase in credit
risk of financial instruments:
□Applicable ?Not Applicable
(4) Status of Bad Debt Reserves
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Amount of Changes in the Current Period
Beginning Recovered Ending
Category Written Other
Balance Provision or Balance
off Changes
Reversed
Other receivables for which expected
credit losses are recognized on an 85672687.00 85672687.00
individual basis
Other receivables for which expected
credit losses are recognized on a 626628.49 60.39 626568.10
portfolio basis
Total 86299315.49 60.39 86299255.10
Including bad debt reserves with significant amount reversed or recovered during the current period:
□Applicable ?Not Applicable
Other Explanations:
None
(5) Status of Other Receivables Actually Written Off during the Current Period
□Applicable ?Not Applicable
Including write-off of significant other receivables:
□Applicable ?Not Applicable
Explanation of write-off of other receivables:
□Applicable ?Not Applicable
(6) Overview of Other Receivables Ranking Top Five in Ending Balances Aggregated by Debtor
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Proportion in
Total Amount
Ending
of Ending
Ending Nature of Balance of
Company Name Balances of Aging
Balance Accounts Bad Debt
Other
Reserves
Receivables
(%)
Intercompany
Within 1
Jilin Meihua Amino Acid Co. Ltd. 445371163.36 83.00 Account
year
Current
Receivables
Bazhou Metal Glass Furniture Industrial Over 5
85672687.00 15.97 for Land and 85672687.00
Park years
Real Estate
Tibet Lhasa Economic and Technological
Export Tax Within 1
Development Zone Taxation Bureau State 4325665.03 0.81 216283.25
Refunds year
Taxation Administration
Within 1
40334.55 0.01 Others 2016.73
year
1 to 2
654107.98 0.12 Others 65410.80
Bazhou Work Injury Insurance years
Management Office 2 to 3
188732.82 0.04 Others 56619.85
years
4 to 5
143883.77 0.03 Others 115107.02
years
Over 5
Langfang ENN Gas Co. Ltd. 150000.00 0.03 Others 150000.00
years
Total 536546574.51 99.99 / / 86278124.65
(7) Presented Under Other Receivables Due to Centralized Fund Management
□Applicable ?Not Applicable
Other Explanations:
□Applicable ?Not Applicable
3. Long-term Equity Investments
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Ending Balance Beginning Balance
Items
Book Balance Impairment Reserves Book Value Book Balance Impairment Reserves Book Value
Investment in Subsidiaries 8069915728.14 8069915728.14 8069915728.14 8069915728.14
Investment in Associates and Joint Ventures
Total 8069915728.14 8069915728.14 8069915728.14 8069915728.14
(1) Investment in Subsidiaries
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Increase/decrease during the period
Beginning
Beginning Provision for Ending balance
balance of Ending Balance
Invested Units Balance (Book Additional Investment impairment of impairment
impairment Ot he rs (Book Value)
Value) investment reduction during the provision
provision
period
Tongliao Meihua Bio-Tech Co. Ltd 1955251411.24 1955251411.24
Xinjiang Meihua Amino Acid Co. Ltd. 2521485877.51 2521485877.51
Langfang Meihua Seasoning Co. Ltd. 252167723.87 252167723.87
Langfang Meihua Bio-Technology
72751138.20 72751138.20
Development Co. Ltd.Lhasa Meihua Bio-investment Holdings
800000000.00 800000000.00
Co. Ltd.Meihua Group International Trading
6277900.00 6277900.00
(Hong Kong) Limited
Jilin Meihua Amino Acid Co. Ltd. 2029666677.32 2029666677.32
Zhuhai Hengqin Meihua Bio-Technology
432315000.00 432315000.00
Co. Ltd.Total 8069915728.14 8069915728.14
(2) Investment in Associates and Joint Ventures
□Applicable ?Not Applicable
(3) Impairment Testing of Long-term Equity Investments
□Applicable ?Not Applicable
Other Explanations:
□Applicable ?Not Applicable
4. Operating Revenues and Operating Costs
(1) Status of Operating Revenues and Operating Costs
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Amount Incurred during the Current Amount Incurred during the Previous
Items Period Period
Revenues Costs Revenues Costs
Main Business 7944806831.64 7637162184.82 8393607038.55 7990471091.37
Other Business 36449371.31 25228475.46 7084280.12 6691245.41
Total 7981256202.95 7662390660.28 8400691318.67 7997162336.78
(2) Decomposition Information of Operating Revenues and Operating Costs
□Applicable ?Not Applicable
Other Explanations:
□Applicable ?Not Applicable
(3) Explanation of Performance Obligations
□Applicable ?Not Applicable
(4) Explanation of Allocation to Remaining Performance Obligations
□Applicable ?Not Applicable
(5) Significant Contract Changes or Significant Adjustments to Transaction Prices
□Applicable ?Not Applicable
Other Explanations:
None
5. Investment Income
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Amount Incurred during Amount Incurred during
Items
the Current Period the Previous Period
Investment Income from Long-term Equity Investments
500000000.00
Accounted for by the Cost Method
Investment Income from Long-term Equity Investments
Accounted for by the Equity Method
Investment Income from the Disposal of Long-term Equity
Investments
Investment Income from Financial Assets Held for Trading during
the Holding Period
Dividend Income from Other Equity Instrument Investments
1689600.00 3308800.00
during the Holding Period
Dividend Income from Debt Investments during the Holding
Period
Dividend Income from other Debt Investments during the Holding 6015894.46 7509922.22
Period
Investment Income from the Disposal of Financial Assets Held for
2639957.94 6948344.63
Trading
Investment Income from the Disposal of Other Equity Instrument
Investments
Investment Income from the Disposal of Debt Investments
Investment Income from the Disposal of Other Debt Investments 79833.31 -111579.15
Debt Restructuring Gains
Total 510425285.71 17655487.70
Other Explanations:
None
6. Others
□Applicable ?Not Applicable
XX. Supplementary Information
1. Detailed Statement of Non-recurring Profits and Losses for the Current Period
?Applicable □ Not Applicable
Unit: Yuan Currency: RMB
Items Amount Explanation
Profits or losses from disposal of non-current assets including the portion offset
41973047.10
against impairment provisions already accrued
Government grants recorded in the profit or loss for the current period excluding
those closely related to the Company's normal operating activities complying with
132954936.58
national policies entitled according to specified standards and having a
continuous impact on the Company's profit or loss
Profits or losses arising from fair value changes of financial assets and financial
liabilities held by non-financial enterprises as well as profits or losses arising from
36751682.38
the disposal of financial assets and financial liabilities excluding the effective
hedging business related to the Company’s normal operating activities
Fund usage fees charged to non-financial enterprises and recorded in the profit or
loss for the current period
Profits or losses from entrusting others to invest or manage assets
Profits or losses from loans entrusted to others
Asset losses incurred due to force majeure such as natural disasters
Reversal of impairment reserves for receivables undergoing individual impairment
testing
Income generated when the investment costs borne by the Company in acquisition
of subsidiaries associates and joint ventures are less than the fair value of
identifiable net assets entitled to the Company when the investment is acquired
Net profits or losses of subsidiaries generated from the beginning of the period to
the date of consolidation through enterprise merger under the same control
Profits or losses from non-monetary asset exchanges
Profits or losses from debt restructuring
One-time expenses incurred by enterprises due to discontinuation of related
Items Amount Explanation
operating activities such as employee resettlement expenses etc.One-time impact on profit or loss for the current period due to adjustments to tax
accounting and other laws and regulations
Stock-based payment expenses recognized one-time due to cancellation or
modification of equity incentive plans
Profits or losses from changes in the fair value of employee compensation payable
after the exercise date for share-based payments settled by cash
Profits or losses from changes in the fair value of investment properties measured
subsequently using the fair value model
Income from transactions with significant price misalignment
Profits or losses from contingencies unrelated to the Company's normal operating
activities
Custodian fee income from entrusted operations
Other non-operating revenues and expenditures not mentioned above 23872702.76
Other profit or loss items meeting the definition of non-recurring profits and losses
Less: Income tax impact 25003434.37
Minority shareholders’ equity impact (after tax)
Total 210548934.45
For items not listed in the Explanatory Announcement for Information Disclosure by Companies that
Issue Securities to the Public No. 1 - Non-recurring Profits and Losses but considered as non-recurring
profits and losses with significant amounts as well as items defined as recurring profits and losses in the
Explanatory Announcement for Information Disclosure by Companies that Issue Securities to the Public
No. 1 - Non-recurring Profits and Losses the Company should provide reasons for such classification.□Applicable ?Not Applicable
Other Explanations
□Applicable ?Not Applicable
2. Return on Equity and Earnings per Share
?Applicable □ Not Applicable
Earnings per Share
Weighted
Diluted
Profits during the Reporting Period Average Return Basic Earnings
Earnings per
on Equity (%) per Share
Share
Net profit attributable to ordinary shareholders of the
4.03 0.24 0.24
Company
Net profit attributable to ordinary shareholders of the
2.75 0.16 0.16
Company after deducting non-recurring profits and losses
3. Differences in Accounting Data under Domestic and Foreign Accounting Standards
□Applicable ?Not Applicable
4. Others
□Applicable ?Not Applicable
Legal Representative: Wang Aijun
Date Approved by the Board of Directors for Submission: August 14 2026
Revision Information
□Applicable ?Not Applicable
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