Appotronics Corporation Limited Annual Report 2024

Stock Code: 688007 Stock Short Name: Appotronics

Appotronics Corporation Limited

Annual Report 2024

April 2025

本报告为深圳光峰科技股份有限公司自愿披露的《2024年年度报告（英文版）》，对本报告的中英文版本理解上发生歧义时，以中文版本为准。

This is the 2024 Annual Report (English version) voluntarily disclosed by Appotronics

Corporation Limited. In the event of any discrepancy between the English and Chinese

versions of this Report the Chinese version shall prevail.

1 / 304Appotronics Corporation Limited Annual Report 2024

Keep Forging Ahead with Determination

Dear all shareholders of Appotronics:

As the world ushered in great challenges at the beginning of 2025 it is my honor to

have this opportunity to communicate with you again at this moment. The year 2024 is a

crucial year for insisting on our strategy for Appotronics. We achieved continuous

breakthroughs in upstream core technologies and maintained leading advantages and won

the recognition of international leading customers in new business fields. During this

process besides the hard work of the management and employees I am especially grateful

for the companionship and support from all shareholders.With the firm belief in the power of persistence when facing various internal and

external challenges last year Appotronics achieved an operating revenue of RMB 2.419

billion where the automotive business contributed an operating revenue of over RMB 600

million. By now we have acquired a total of 13 automotive nominations covering among

others automobile-grade giant screens and headlight modules. Instead of seeking orders in

vicious competition by combating a price war we achieved joint development with

customers relying on our in-depth technical accumulation and professional supply

guarantees.I am even more gratified by and proud of the abundant achievements we made in the

cutting-edge layout. We continued our R&D investments to promote the integration

between laser and AI to explore more application scenarios and to continuously expand to

more fields like AR glasses robots etc. We provided ALPD modules for “Xiaowei” the

first household service robot released by Midea Group. These ALPD modules empower

the robots with “visual expression” to reconstruct the scenario and achieve innovative

human-machine interaction. Before that we developed the world’s first AR optical module

with a PPI of over 10000; by now we have shipped sample modules to several leading

listed companies in the AR industry chain for preliminary research and preliminary product

development which provides a solid ground for our development in the AR field.In my messages to shareholders in the past years I stated that “in the coming yearswe will strive to build a smart supply chain transforming a small workshop into novel

smart manufacturing. We will move to a new production base to solidify the foundationsincluding research and development supply chain and platform capabilities”. This year

we have fulfilled our commitments: Appotronics achieved two major milestones - the

global headquarters building built by Appotronics in Shenzhen and the Appotronics

2 / 304Appotronics Corporation Limited Annual Report 2024

Innovation and Intelligence Valley Industrial Park have been put into use officially. As our

“R&D headquarters” and the “advanced manufacturing base of optical devices and opticalmodules” the completion of the two projects reflects the close combination between our

in-depth R&D efforts and advanced process manufacturing and a closed loop from

scientific research to manufacturing which greatly accelerates technological innovation

further strengthens our technical leading advantages and promotes our technological

innovation to a new stage.Despite the difficulties we encountered in the first quarter we keep our clear

objectives in mind and have the strategic determination to move on. The trend of

integration between the rapidly developing new technologies such as AI AR and robots

and laser technologies remains unchanged which will create more application scenarios forsemiconductor laser. Appotronics will insist on the development strategy of “coretechnologies + core components + application scenarios” and improve our competitiveness

in three aspects:

In the future we will focus on ensuring resources for the upstream strategy;

In the future we will make use of organizational transformation to promote the

implementation of our strategies and improve operating quality; and

In the future we will explore new major racetracks and create a more open ecology

relying on our upstream advantages.Facing the turbulent changes in the external environment we insist on our original

intention of creating a better life for people with technology. Therefore I would like toclose my message with my statement last year: “I believe in the confidence and power ofAppotronics as a technology enterprise to seize the opportunity and create more growth

space in the trend of the era. Meanwhile we are also aware that enterprise operation is a

process of wavy development in which we will meet obstacles instead of moving straight

ahead. We are firmly confident that we can forge ahead with strategic persistence andstrategic patience.”

Last but not least I would like to thank all shareholders and friends who have been

caring for Appotronics!

Time tells everything!

LI Yi

April 2025

3 / 304Appotronics Corporation Limited Annual Report 2024

Important Note

I. The Board of Directors the Board of Supervisors directors supervisors and senior officers of

the Company hereby warrant that the information contained in this Annual Report is true

accurate and complete and this Annual Report is free from any misrepresentation misleading

statement or material omission and agree to assume joint and several liability for this Annual

Report.II. The Company did not make profits at the time of getting listed and has not made any profits

by now

□ Yes √ No

III. Alert of significant risks

The Company has described in detail the risks that may exist in the production and operation of the

Company. See “Section III Discussion and Analysis of Business Situations - IV. Risk factors” for the

relevant risks.IV. All directors of the Company attended the meeting of the Board of Directors.V. Pan-China Certified Public Accountants (Special General Partnership) issued a standard

unqualified auditor’s report to the Company.VI. LI Yi Principal of the Company WANG Yingxia Person in Charge of the Accounting Work

and WANG Yingxia Person in Charge of the Accounting Body (Chief Accountant) hereby

represent that the financial statements contained in this Annual Report are true accurate and

complete.VII. Profit distribution proposal or proposal for capitalization of capital reserve approved by the

Board of Directors during the reporting period

As audited by Pan-China Certified Public Accountants (Special General Partnership) in 2024

Appotronics realized the net profit attributable to shareholders of the listed company of RMB

27953093.89 the parent company realized the net profit of RMB 182867195.75 and the total

distributable profit of the parent company was RMB 771783201.44. The Company proposed to

distribute to all shareholders a cash dividend of RMB 0.25 (tax inclusive) for every 10 shares. As of the

disclosure date of this Report the Company has a total of 459291145 shares. With the 2451192 shares

in the special securities account for repurchase excluded the cash dividend calculated to be distributed

was RMB 11420998.83 (tax inclusive) accounting for 40.86% of the net profit attributable to

shareholders of the listed company in 2024. The Company would neither capitalize its capital reserve

nor grant bonus shares this year.In accordance with the relevant provisions of the Rules for Repurchase of Shares by Listed

Companies the shares repurchased by a listed company with cash in the manner of offer and call auction

shall be considered as cash dividends of the listed company and shall be included in calculating the

relevant ratios for cash dividends. In 2024 we repurchased shares in the amount of RMB

119432441.36 in cash through a call auction (including transaction fees such as stamp duty and

transaction commissions) which shall be considered as the amount of cash dividend made by the

4 / 304Appotronics Corporation Limited Annual Report 2024

Company; meanwhile we also realized return of interests to investors by means of repurchase; The

amount of cash dividend and repurchase in 2024 calculated in the manner above is RMB 130853440.19

accounting 468.12% of the net profit attributable to shareholders of the listed company as presented in

the consolidated financial statements of 2024.In 2024 the Company repurchased and de-registered shares in the amount of RMB 108917776.63

in cash through a call auction leading to the total amount of RMB 120338775.46 for the cash dividend

and the amount of shares repurchased and de-registered accounting for 430.50% of the net profit

attributable to shareholders of the listed company as presented in the consolidated financial statements of

2024.

This proposal has been reviewed and passed at the 7th meeting of the third Board of Directors and

the 3rd meeting of the third Board of Supervisors and is subject to deliberation at the general meeting of

the Company.VIII. Is there any material event concerning any special arrangement of corporate

governance

□ Applicable √ N/A

IX. Risk statement regarding forward-looking statements

√ Applicable □ N/A

The forward-looking statements contained herein regarding future plans development strategies or

other matters of the Company do not constitute any substantive covenant made by the Company to the

investors. Investors and relevant personnel should sufficiently know about the risks in this aspect and

understand the differences among plans predictions and promises. Investors should be aware of the risk

of investment.X. Is there any non-operating occupation of funds by the controlling shareholder or its affiliates

No

XI. Is there any external guarantee provided in contravention of the stipulated decision-making

procedure

No

XII. Are the majority of the directors unable to guarantee the truthfulness accuracy and

completeness of the Annual Report disclosed by the Company

No

XIII. Others

□ Applicable √ N/A

5 / 304Appotronics Corporation Limited Annual Report 2024

Table of Contents

Section I. Definitions .............................. 7

Section II. Company Profile and Financial Highligh... 8

Section III. Discussion and Analysis of the Manage.. 14

Section IV. Corporate Governance ................... 47

Section V. Environment Social Responsibility and O.. 78

Section VI. Significant Matters .................... 93

Section VII. Changes in Shares and Shareholders ... 121

Section VIII. Preferred Shares .................... 134

Section IX. Bonds ................................. 135

Section X. Financial Report ....................... 136

Financial Statements with seals and signatures of the Principal of the Company

the Person in Charge of the Accounting Work and the Person in Charge of the

Accounting Body (Chief Accountant)

List of Documents

Available for Original Auditor’s Report with seals of the accounting firm and seals and

Inspection signatures of the certified public accountants

All original documents and announcements publicly disclosed during the reporting

period

6 / 304Appotronics Corporation Limited Annual Report 2024

Section I. Definitions

I. Definitions

For the purpose of this Report unless the context otherwise requires the following terms shall have the

meanings indicated below:

Terms

Company or

Appotronics means Appotronics Corporation Limited

Appotronics Ltd. means Appotronics Corporation Limited the former name of the Company

CINEAPPO means CINEAPPO Laser Cinema Technology (Beijing) Co. Ltd.Formovie Chongqing

Formovie means Formovie (Chongqing) Innovative Technology Co. Ltd.Appotronics HK means Appotronics Hong Kong Limited

Appotronics Daye means Shenzhen Appotronics Daye Investment Partnership (LP)

Appotronics Deye means Shenzhen Appotronics Deye Consulting Partnership (LP)

Appotronics Hongye means Shenzhen Appotronics Hongye Investment Partnership (LP)

Appotronics Chengye means Shenzhen Appotronics Chengye Consulting Partnership (LP)

Jinleijing means Shenzhen Jinleijing Investment Limited Partnership (LP)

Blackpine means Blackpine Investment Corp. Ltd.GDC BVI means GDC Technology Limited (British Virgin Islands)

GDC Cayman means GDC Technology Limited (Cayman Islands)

SSE means Shanghai Stock Exchange

Delta Electronics Delta means Delta Electronics Inc.AI means Artificial Intelligence

AR means Augmented Reality

DLP means Digital Light Processing

LCOS means Liquid Crystal on Silicon a new reflective display technology that organically combines LCD and CMOS integrated circuits

LCD means Liquid Crystal Display

LED means Light Emitting Diode a common light-emitting device

MicroLed means Micro light-emitting diode display a self-luminous display technology based on miniaturized LED units

A screen resolution of digital products representing the screen

4K means resolution of 4096×2160 which is an ultra-high-definition

resolution

ADB means Adaptive Driving Beam

HUD means Head-up display

7 / 304Appotronics Corporation Limited Annual Report 2024

Section II. Company Profile and Financial Highlights

I. Company profile

Chinese name 深圳光峰科技股份有限公司

Short name in Chinese 光峰科技

English name Appotronics Corporation Limited

Short name in English Appotronics

Legal representative LI Yi

Registered address 20-22/F Hi-tech Zone Union Tower No. 63 Xuefu Road Yuehai Street Nanshan District Shenzhen

1. October 24 2006 Room 10 14/F Fangda Building Keji South

12th Road South Area High-tech Industrial Zone Nanshan

District Shenzhen

2. September 6 2007 Room 03 17/F Overseas Chinese High-tech

Venture Building South Area High-tech Industrial Zone Nanshan

District Shenzhen

Historical changes of the 3. June 7 2011 Area A 1/F Building 13 Xili Wenguang

Company’s registered address Industrial Zone Nanshan District Shenzhen 4. October 24 2012 No. 401 Shenzhen IC Design and Application

Industrial Park South of Chaguang Road Xili Township Nanshan

District Shenzhen

5. December 14 2017 21-22/F Hi-tech Zone Union Tower No.

63 Xuefu Road Yuehai Street Nanshan District Shenzhen

6. August 1 2018 20-22/F Hi-tech Zone Union Tower No. 63

Xuefu Road Yuehai Street Nanshan District Shenzhen

Office address Appotronics Headquarters Building 8 Xiandong Road Xili Subdistrict Nanshan District Shenzhen

Postal code of office address 518055

Website http://www.appotronics.com

Email ir@appotronics.com

II. Contact person and contact information

Board Secretary Securities affairs representative

Name CHEN Yasha WANG Weiqi

Address Appotronics Headquarters Building 8 Xiandong Road Xili Subdistrict Nanshan District Shenzhen

Telephone 0755-32950536

Email ir@appotronics.com

III. Media for information disclosure and place for keeping the annual reports

China Securities Journal (https://www.cs.com.cn)

Name and website of the media on which the Shanghai Securities News (https://www.cnstock.com)

Company discloses its annual report Securities Times (http://www.stcn.com)

Securities Daily (http://www.zqrb.cn)

Website of the securities exchange on which Shanghai Stock Exchange website

the Company discloses its annual report (http://www.sse.com.cn)

Place for keeping the annual reports Office of the Board of Directors

8 / 304Appotronics Corporation Limited Annual Report 2024

IV. Stock and depository receipts of the Company

(I) Stock of the Company

√ Applicable □ N/A

Stock of the Company

Type of stock Stock exchange and board Stock short name Stock code

Former stock

short name

A-shares Shanghai Stock Exchange STAR Market Appotronics 688007 N/A

(II) Depository receipts of the Company

□ Applicable √ N/A

V. Other related information

Name Pan-China Certified Public Accountants (Special General Partnership)

Accounting firm engaged by Office address 6/F No. 128 Xixi Road Xihu District the Company Hangzhou Zhejiang

(domestic) Accountants

signing the Mr. WEI Biaowen Mr. NIU Chunjun

report

VI. Main accounting data and financial highlights in the past three years

(I) Main accounting data

In RMB

% Change

Main accounting data 2024 2023 (2024 v 2022

2023)

Operating revenue 2418574391.82 2213356977.95 9.27 2541144635.15

Net profit attributable to

shareholders of the listed 27953093.89 103186743.57 -72.91 119440773.77

company

Net profit attributable to

shareholders of the listed

company after deduction 32133597.05 41664497.37 -22.88 66321454.45

of non-recurring profit

or loss

Net cash flow from

operating activities 87220645.17 364082055.08 -76.04 177350715.69

% Change

End of 2024 End of 2023 (2024 v 2023) End of 2022

(%)

Net assets attributable to

shareholders of the listed 2740047895.12 2818869452.99 -2.80 2647663487.59

company

Total assets 4255663351.00 4220570891.16 0.83 4333350260.15

9 / 304Appotronics Corporation Limited Annual Report 2024

(II) Financial highlights

Financial highlights 2024 2023 % Change (2024 v 2023) 2022

Basic earnings per share

(RMB/share) 0.06 0.23 -73.91 0.26

Diluted earnings per share

(RMB/share) 0.06 0.22 -72.73 0.26

Basic earnings per share after

deduction of non-recurring profit 0.07 0.09 -22.22 0.15

or loss (RMB/share)

Weighted average return on net -2.8 percentage

assets (%) 1.01 3.81 points 4.73

Weighted average return on net

assets after deduction of 1.16 1.54 -0.38 percentage 2.63

non-recurring profit or loss (%) points

Proportion of R&D investments to

operating revenue (%) 10.24 12.69

-2.45 percentage

points 10.31

Explanation about the main accounting data and financial highlights in the past three years

√ Applicable □ N/A

1. During the reporting period the automotive optics business which entered the stage of intense

delivery achieved an operating revenue of RMB 638 million;

2. During the reporting period the net profit attributable to shareholders of the listed company and

the net profit attributable to shareholders of the listed company after deduction of non-recurring profit or

loss decreased by 72.91% and 22.88% year on year respectively; the basic earnings per share diluted

earnings per share and basic earnings per share after deduction of non-recurring profit or loss decreased

by 73.91% 72.73% and 22.22% respectively year on year primarily due to the following reasons:

(1) During the reporting period we took the initiative to adjust the policy for consumer business

operation and accelerated the pace of clearing the inventory of complete consumer products which led

to the decrease in both the ratio and gross profit margin of incomes from the consumer business while

our automotive business entered the intense delivery period and increased its ratio among the businesses.The difference in the product portfolio led to a decrease in the overall gross profit margin by 6.85

percentage points;

(2) The non-recurring profit or loss in 2024 decreased compared with last year primarily due to the

decrease in the government grants recognized in profit or loss for the current period by RMB 27.9557

million year on year and the recognized investment losses of RMB 37.8059 million because the

participating company was transferred to other non-current financial assets measured at fair value.

3. During the reporting period the net cash flow from operating activities decreased by 76.04%

year on year which was primarily due to the increase in the operating capital required in response to the

growth in our automotive business and the increase in restricted monetary funds (for details see

“Encumbrances on major assets as of the end of the reporting period” in Section III Discussion and

Analysis of the Management). The net cash flow from operating activities without the impact of

restricted monetary funds from Appotronics HK was RMB 247.2198 million.

10 / 304Appotronics Corporation Limited Annual Report 2024

VII. Differences in accounting data under Chinese accounting standards and overseas accounting

standards

(I) Differences in net profit and net assets attributable to shareholders of the listed company

disclosed on the financial statements according to the international accounting standards and the

Chinese accounting standards

□ Applicable √ N/A

(II) Differences in net profit and net assets attributable to shareholders of the listed company

disclosed on the financial statements according to the overseas accounting standards and the

Chinese accounting standards

□ Applicable √ N/A

(III) Explanation about the difference between overseas and Chinese accounting standards

□ Applicable √ N/A

VIII. Financial highlights in 2024 by quarter

In RMB

st quarter 2nd quarter 3rd quarter 4th quarter

(Jan. - Mar.) (Apr. - Jun.) (Jul. - Sep.) (Oct. - Dec.)

Operating revenue 445039193.21 636370307.00 638189703.62 698975187.99

Net profit attributable to

shareholders of the listed 44543331.11 -33633717.67 32036983.19 -14993502.74

company

Net profit attributable to

shareholders of the listed

company after deduction of 622945.86 12856341.65 26127282.79 -7472973.25

non-recurring profit or loss

Net cash flow from operating

activities 12224792.96 -91371463.19 150669868.02 15697447.38

Explanation about the difference between quarterly data and the data disclosed in regular reports

□ Applicable √ N/A

IX. Items and amounts of non-recurring profit or loss

√ Applicable □ N/A

In RMB

Item of non-recurring profit or Note

loss 2024 (if applicable) 2023 2022

Gain or loss on disposal of

non-current assets including VII.68 VII.74

write-off of provision for asset -40059802.75 and VII.75 of -2047603.22 -5668573.43

impairment Section X

Government grants recognized in

profit or loss for the current period

(excluding government grants that

are closely related to the business 9369178.91 XI of Section 37324883.93 38211496.91

of the Company and are provided X

in accordance with established

standards with continuous effects

11 / 304Appotronics Corporation Limited Annual Report 2024

on the profit or loss of the

Company according to the

provisions of national policies)

Profit or loss on changes in the fair

value of financial assets and

financial liabilities held by

non-financial enterprises and profit

or loss on the disposal of financial 5096964.49 VII.70 of 197000.00 -3120000.00

assets and financial liabilities other Section X

than those used in the effective

hedging activities related to normal

operating business of the Company

Profit or loss on entrusted

investments or assets management 16403394.26

VII.68 of

Section X 12504132.08 12637561.73

Reversal of impairment loss on

receivables tested for impairment 518247.41 701851.05 837824.59

individually

Net profit or loss of subsidiaries

from the beginning of the period up

to the business combination date

recognized as a result of business 13795087.49 28971469.98 27765106.19

combination involving entities

under common control

Profit or loss on debt restructuring -912618.35

Other non-operating revenue and

expenses 1253095.40 -4752629.59 -679415.19

Other profits or losses meeting the

definition of non-recurring profit or -3214287.11 -2080.00

loss

Less: Effect of income taxes 6906700.68 5157172.94 4337471.38

Effects attributable to minority

interests (net of tax) 435680.58 6219685.09 11612511.75

Total -4180503.16 61522246.20 53119319.32

It is required to specify the reason for defining items not illustrated in the Information Disclosure and

Presentation Rules for Companies Making Public Offering of Securities No. 1 - Non-recurring Profit or

Loss as non-recurring profit or loss items of significant amounts and reasons for defining non-recurring

profit or loss items illustrated in the Information Disclosure and Presentation Rules for Companies

Making Public Offering of Securities No. 1 - Non-recurring Profit or Loss as recurring profit or loss

items.□ Applicable √ N/A

X. Financial indicators not set forth in the Accounting Standards for Business Enterprises

□ Applicable √ N/A

XI. Items at fair value

√ Applicable □ N/A

In RMB

12 / 304Appotronics Corporation Limited Annual Report 2024

Opening Effect on profit Project balance Closing balance Change for the current period

Held-for-trading

financial assets 514010000.00 179936739.21 -334073260.79 37683864.37

Receivables financing 11387400.00 12552177.09 1164777.09 0

Investment in other

equity instruments 7075419.38 7075419.38 0 0

Other non-current

financial assets 0.00 84000000.04 84000000.04 -16183505.62

Total 532472819.38 283564335.72 -248908483.66 21500358.75

XII. Information disclosure postponed or exempted due to national secrets trade secrets etc.√ Applicable □ N/A

Since the relevant information about the Company’s suppliers customers and key technical staff is

commercially sensitive information the disclosure of which may result in unfair competition to the

detriment of the Company and shareholders the Company anonymized the names of suppliers and

customers and exempted the disclosure of the specific remuneration of the key technical staff.

13 / 304Appotronics Corporation Limited Annual Report 2024

Section III. Discussion and Analysis of the Management

I. Discussion and Analysis of Business Situations

(I) Analysis of business operations during the reporting periodIn 2024 adhering to the development strategy of “core technologies + core components +application scenarios” we achieved an operating revenue of RMB 2.419 billion up by 9.27% year on

year presenting a stable growth trend. The automotive optics business which entered the stage of

intense delivery in 2024 achieved an operating revenue of RMB 638 million.In recent years we have continuously enhanced R&D investments in cutting-edge fields to expand

our application scenarios to emerging racetracks such as AR glasses and robots and to promote the

effective integration between AI and innovative application scenarios like automotive optics; we have

also achieved interim results in such fields. In 2025 while continuously making breakthroughs in the

upstream in the laser industry to build core components we further increased investments in

cutting-edge fields so that the breakthroughs in the upstream drove the innovation of the downstream

scenarios to implement upstream core components in new racetracks and large racetracks especially

focusing on new scenarios created by new AI technologies.

1. Promoted innovation of downstream scenarios by breakthroughs in the upstream focusing on

new scenarios created by new AI technologies

As a global leader in laser technologies we have the R&D strength built on a profound foundation;

in recent years we enhanced R&D investments in upstream core components to achieve integration of

upstream and downstream of the industry and localization of core components. Meanwhile we followed

and maintained our R&D efforts for cutting-edge fields to promote in-depth integration between laser

technologies with large racetracks like AI AR robots and have achieved interim results in such fields.In terms of core components we implemented innovation for laser light engines in aspects of

technologies product forms application scenarios etc. and released a split-type optical fiber light

engine which is the first of its kind in the industry. Unlike conventional light engines the split-type

optical fiber light engine is equipped with a light source and an image modulation module separated

from and connected to each other with an optical fiber which greatly reduces the product size and

achieves unprecedented flexibility. Customers can combine light sources with image modulation

modules freely to create projection products in various forms with rich functions so that the projectors

can be flexibly used for smart terminals (smart wearables smart homes and other products) robots

vehicles medical equipment special equipment and various displays.The split-type optical fiber light engine we released not only provides strong display functions in

the application fields above but also makes it possible to implement high-speed communication between

devices. Through the optical fiber connection terminal devices can coordinate with each other

seamlessly to achieve more flexible complex and efficient scenario-based control.With respect to AR glasses we mainly explored two parts - the light engine and the waveguide lens

and prepared multiple technical routes including LCOS DLP MicroLed laser scanning etc. The light

engine and the waveguide lens can be combined into a solution as the core module at the display end of

14 / 304Appotronics Corporation Limited Annual Report 2024

such products or be shipped in small batches separately. During the reporting period we developed an

ultra-small full-color AR light engine solution with a volume of only 0.8cc featuring a high

cost-performance ratio low power consumption and outstanding display effects which can meet the

lightweight requirements of AR glasses. At present we are cooperating with customers for full-color AR

light engine project development to provide an efficient solution for the innovative development of the

AR glasses industry.From environmental perception to motion coordination and from fundamental research and

development to application in complex scenarios the innovation in optical technologies is transforming

the capability boundaries of humanoid robots. Thanks to the characteristics of the small size low power

consumption and high brightness etc. of the ALPD laser display modules we can provide suitable

solutions for robots in household commercial industrial and other scenarios empowering the robots

with “visual expression”. In addition we are capable of embedding a laser projection light engine in the

robot body to project images at various portions of the robot or embed the light emitting outlet at any

portion of the robot to achieve more flexible display hence providing the robot with the capabilities

emotion perception and expression for interaction with human beings. Given the implementation of

robots in various application scenarios and the expansion of the market size our ALPD semiconductor

laser light source modules are expected to become a key link in the robot industry chain.

2. Deepened diversified layout of automotive products and customers to continuously improve

the level of internationalization of automotive optics business

As AITO M9 our first nomination automobile model entered the stage of intense delivery in

March 2024 the automotive business started to generate revenues. During the reporting period we

recognized the income of RMB 638 million from the automotive optics business during the delivery

period indicating a successful strategic transformation of the Company.Since we entered the automotive business we have made continuous efforts to promote

technological upgrades innovative breakthroughs and differentiated development of automotive

products and expanded the product matrix to meet the requirements of automobile manufacturers. By

now we have acquired a total of 13 automotive nominations covering among others automobile-grade

giant screen systems and laser projection headlights. In March 2025 we acquired the nomination for

smart cockpits from an internationally leading automobile manufacturer which indicates that our quality

system and supply chain level have reached international standards and we can meet the demands for

smart cockpits on the global market. While focusing on product diversification we explored

opportunities for global cooperation to achieve customer diversification hence facilitating the

continuous expansion of the automotive business to the global market.In March to April 2025 Seres released a new AITO model equipped with a new generation of our

automotive projection technologies - the smart laser projection giant screen system 2.0 which greatly

improved the brightness and definition and achieved the function of floating windows for the first time

i.e. the one-quarter mode to display lyrics time and other information. Meanwhile the floating window

function may also be associated with the safety system of the vehicle to improve driving safety.

15 / 304Appotronics Corporation Limited Annual Report 2024

3. Continuously explored “cinema+” and other types of integrated operations to meet the

diversified and differentiated operating requirements of customers

In recent years keeping the requirements of cinemas and audience in mind we explored integrated

operations such as “cinema+” by releasing cinema screens of different sizes and different technical paths

which helped cinemas continuously develop and improve new cinema consumption modes gradually

break through the limits of the conventional profit mode and enrich the consumption scenarios and

operating types of cinemas. In 2024 with an operating revenue of nearly RMB 570 million our cinema

business developed in a generally stable way.During the reporting period we took active measures to promote the ALPD laser light source

projection solution and the VLED LED Cinema projection solution to meet the diversified and

differentiated operating requirements of cinema customers. With respect to VLED LED cinema screens

with a total of 34 LED screens installed and used in 30 cities we held a leading position in the industry

in terms of the market share of new screens and our cinema business has become a new point for

performance growth by now. Thanks to the recovery of film-watching demands and the diversified

cinema application scenarios we continuously maintained our leading position in the cinema industry

thanks to our technological advantages and market layout.

4. Created a new scene of cultural development featuring “technology + cultural tourism” to

expand the dedicated display business to the world

During the reporting period we achieved a significant technology breakthrough of “projection + AI”

in the dedicated display field which helped create a new scene for the development of the cultural

tourism industry. In 2024 we facilitated cultural dissemination and technology implementation with

benchmark projects by successfully implementing over 30 key projects throughout China. During the

reporting period we achieved an operating revenue of RMB 392 million from the dedicated display

business including an operating revenue of nearly RMB 140 million from overseas markets up by 60.47%

year on year.In the World Expo 2025 (Expo 2025) in Osaka that started in April 2025 relying on our profound

technology accumulation and outstanding innovation capabilities we successfully helped the pavilions

of China Cambodia and Gabon to create extremely shocking and attractive visual effects. Nearly a

hundred of laser large venue projectors broke through the boundaries of physical exhibition and

implemented tens of light and shadow presentation tasks which facilitate the presentation of the culture

of the countries in a more vivid manner by making use of technologies. With respect to laser lighting we

worked actively to meet the requirements of the 15th National Games of China by using high-powerfull-color laser lighting at the closing ceremony for the first time which expanded the application of “AI+ laser lighting” to the sports scenario and contributed the power of technology to China’s sports under

rapid development.Analysis of changes in performance measured not under the Accounting Standards for Business

Enterprises and prospect thereof

□ Applicable √ N/A

16 / 304Appotronics Corporation Limited Annual Report 2024

II. Main business business model status of industry and R&D activities during the reporting

period

(I) Main business and main products or services

The Company as a global leading enterprise in the field of laser technology stays market and

customer demand-oriented and continues to engage in the research development production and sales

of laser display and laser lighting core components and complete equipment based on the proprietary

semiconductor laser light source technologies and architecture to provide customers with all-around and

multi-field solutions.(II) Main business model

Based on industry policies industry characteristics upstream and downstream development and

customer demands with reference to the Company’s development strategy competitive advantages

service experience and other factors we have built mature business models with an independent and

complete R&D procurement production and sales system.

1. R&D mode

We insist on the driving force of innovation to continuously improve the R&D system featuring

independent R&D and separate technology R&D from product R&D in terms of organizational

structure development process etc. In terms of technology development the Company focuses on the

continuous innovation and mastery of core technologies and key technologies pays attention to user

needs and introduces product development after the technology is mature so as to maintain the

Company’s core competitiveness in technology and leading position in the industry; in terms of product

development according to the differentiated needs of different market segments the Company sets up

product lines and teams for product planning and divides it into feasibility \EVT\DVT\PVT\MP and

other stages to achieve rapid response to market demand.

2. Procurement mode

The Company maintains long-term and in-depth cooperation with many suppliers constantly

strengthens supply chain management and quality management and always adopts diversified

procurement. The procurement mode consists of front-end procurement services such as supplier

selection determination of purchase price cooperative business system and establishment of supplier

platform as well as back-end business such as purchase order execution and delivery.

3. Production modeThe Company implements the model of “independent production as the mainstay supplemented byoutsourced production” with an independent production system. In addition to achieve the criteria for

the production of upstream core components we have independently built a supply chain system

meeting the production standards of semiconductor enterprises.

4. Sales mode

(1) Product sales mode

The Company’s marketing service network is laid out well matching various application market

17 / 304Appotronics Corporation Limited Annual Report 2024

segments. It adopts the product sales model combining “direct sales distribution and agent sales” and

achieves mutual penetration and coordinated development both online and offline to respond to customer

needs in a timely and rapid manner.

(2) Mode of cinema projection services

The Company provides laser cinema projection services for downstream cinema customers and

charges service fees according to the length of use of light source by the cinemas (the fees are charged

by the hour or a certain period of time) while the cinemas do not need to purchase light source

equipment thereby effectively easing their capital pressure and reducing their labor and maintenance

costs.

(3) Business cooperation mode for automotive optics

According to the needs of car companies and the design of their own production lines the

Company designs and develops automotive optical products and accepts the audit and certification of

car companies at all stages until it receives mass production confirmation. The Company’s specific

supply process is as follows:

Before the mass production of the project the Company obtains the project nomination and signs

relevant sales contracts with the car company stipulating the rights and obligations of both parties.The nomination contract usually uses the project usage within the procurement period as a

reference to determine the purchased products model specifications supply terms etc. and the

nomination supplier supplies and provides services according to the contract provisions and settles and

pays regularly. Regarding the Company’s products the mode of synchronous research and development

with car companies is adopted so the project progress after signing the nomination contract is closely

related to the development progress of customer models.After the mass production of the project the car company requires the Company to conduct mass

production and puts forward specific delivery arrangements and after the car company confirms the

receipt it will pay the Company according to the price agreed by both parties.(III) Industry in which the Company operates

1. Development stage basic characteristics and main technical barriers of the industry

(1) Development stage of the industry

From the perspective of the laser industry development China’s laser industry is developing under

the following trends: (1) localized production has been gradually achieved for core components such as

semiconductor laser chips and semiconductor laser; (2) the scope of application is expanding as the

application of laser is extending from conventional fields to new racetracks and large racetracks such as

AI AR and robots; and (3) the demands for photoelectric elements equipped with high-power lasers are

further increasing. With the support of national and industry policies more and more domestic

enterprises and scientific research institutions enter the upstream and downstream fields of the laser

industry chain strengthen the industrial chain and actively develop and iterate technology.

(2) Basic characteristics of the industry

18 / 304Appotronics Corporation Limited Annual Report 2024

In terms of application in addition to mature applications such as cinema large venue and

education emerging industries such as smart cockpits laser headlights robots AR and AI are booming

and gradually become a new application development focus of the laser industry and the overall scale of

the industry continues to expand which is expected to help to broaden the application scenarios of laser

technologies.In 2007 the ALPD semiconductor laser light source technology invented by our R&D team

created a wholly new semiconductor laser light source. Technically matching multiple chip and technical

routes and being suitable for DLP LCOS and LCD technologies the ALPD semiconductor laser light

source technology made a breakthrough in the application of core components and imaging solutions of

laser display hence becoming a mainstream technical route for the laser display industry.

(3) Main technical barriers

We are committed to the breakthroughs innovations expansion of application scenarios and

industrialization of the semiconductor laser light source technologies; in particular we have profound

accumulation in light source technologies optical engine and imaging technologies screen technologies

etc. and have created technology reserves and patent portfolios covering the whole technology chain of

laser display technology from key system architecture core components to key algorithm.Laser display technologies as an important direction for the development of the laser industry have

the feature of high technical barriers. In the laser light source technology a laser beam is used to

transmit through images; optical engine and imaging devices include optical imaging devices optical

engine and drive circuits for which precision manufacturing and integration are the key to achieving

high-quality display effects; the screen technology ensures image quality and color accuracy.

2. Analysis of the position of the Company in the industry and changes therein

The ALPD semiconductor laser light source technology as the mainstream technology in the field

of laser display has the advantages of high brightness small size long service life wide color gamut

energy conservation and environmental protection etc.As the inventor of the ALPD semiconductor laser light source technology and the leader in the

laser display industry we have built a patent moat around the underlying technical architecture of

ALPD semiconductor laser light source technology and created the technology accumulation and

patent layout covering the whole technology chain of laser display from key system architecture and

core components to key algorithms. In addition we are committed to the breakthroughs innovations

expansion of application scenarios and industrialization of the semiconductor laser light source

technology. Thanks to the core competitive advantages consisting of “patent moat + technical barriers”

the Company continuously holds a key position at the upstream core component stage.

3. Development of new technologies new industries new types of operation and new modes

during the reporting period and the future trend

(1) Further accelerated localization of the laser industry

19 / 304Appotronics Corporation Limited Annual Report 2024

With the in-depth implementation of China’s economic transition and high-quality development

the semiconductor industry as a key link that supports emerging technologies and future industries is

facing an unprecedented development opportunity. By now the upstream of the laser industry chain

including semiconductor epitaxial wafers semiconductor lasers display chips and other significant

elements has achieved breakthroughs which further improves the localization rate of core components

and greatly increases China’s independence in laser display.The Guiding Opinions on Promoting the Innovative Development of Future Industries promulgated

in January 2024 by seven authorities including the Ministry of Industry and Information Technology

put forward the strategy of promoting the innovative development of future industries which raised the

requirements on making breakthroughs in key core technologies especially on accelerating efforts for

breakthroughs in cutting-edge technologies and disruptive technologies. As semiconductor is one of the

core supports for the future manufacturing and information fields policies are released to promote the

development of the semiconductor industry towards higher-end and more complex technologies.With the support of national and industry policies more and more domestic enterprises and

scientific research institutions enter the upstream and downstream fields of the laser industry chain

concentrate on the R&D and iteration of technologies strengthen the industrial chain and actively

develop and iterate technology. In recent years while being committed to making breakthroughs in the

upstream in the laser industry to build core components we achieved breakthroughs in the upstream to

drive the innovation of the downstream scenarios to implement upstream core components in new

racetracks and large racetracks.

(2) Given the resonance between policy dividends and technology iterations robots have become a

core racetrack for future industries

According to the World Robotics 2024 released by the International Federation of Robotics (IFR) it

is expected that the market size of robots will exceed USD 90.0 billion in 2025. Service robots will

dominate the market with the expected market size of USD 73.01 billion in 2029; and humanoid robots

will experience rapid market growth where the industry size is expected to reach USD 5.3 billion in

2025 and USD 20.6 billion in 2028.

The year 2025 is the first year for both the mass production and the commercial implementation of

humanoid robots. By now leading complete robot manufacturers have maintained rapid iteration of

technologies. As policies are promulgated in China to accelerate the transition of the industry from 0 to 1

and expansion from 1 to 100 embodied intelligence is expected to become a new engine for the growth

of the national economy. With the strong drive of government policies and the rapid development of the

robot industry the process of localization will be accelerated and relevant enterprises will have more

market opportunities in fields such as the manufacture of core components.Thanks to the characteristics of the small size low power consumption and high brightness etc. of

the ALPD laser display modules we can provide suitable solutions for robots in household commercial

industrial and other scenarios and empower humanoid robots with “visual expression”. In addition we

are capable of embedding a laser projection light engine in the robot body to project images at various

20 / 304Appotronics Corporation Limited Annual Report 2024

portions of the robot or embed the light emitting outlet at any portion of the robot to achieve more

flexible display hence providing the robot with the capabilities emotion perception and expression for

interaction with human beings. Given the implementation of robots in various application scenarios and

the expansion of the market size our ALPD semiconductor laser light source modules are expected to

become a key link in the robot industry chain.

(3) The integration between AR glasses and new technologies such as AI large models has created

a new development stage for products

At present AR glasses are promoting the transition of virtual-real synthesis technologies from

concept verification to large-scale industrial application. Global technology giants and innovative

enterprises are eager to make a layout to strive for breakthroughs in fundamental technologies such as

optical display and human-machine interaction hence achieving iteration and upgrade of AR equipment

towards lightweight immersive experience scenario adaptation etc.In the rapid development of AI technologies open-source large models featuring “low cost highperformance and strong reasoning” such as DeepSeek come out one after the other which created an

inevitable trend for the industry to connect various application terminals to AI large models; as a result

AR glasses will become one of the important terminals for the implementation of AI technologies.According to Wellsenn the global shipment of AI smart glasses is expected to reach 80.00 million in

2030 and the market penetration rate will increase to about 4.3%.

In the field of AR glasses we mainly explored two parts - the light engine and the waveguide lens

and prepared multiple technical routes including LCOS DLP MicroLed laser scanning etc. During the

reporting period we developed an ultra-small full-color AR light engine solution with a volume of only

0.8cc featuring a high cost-performance ratio low power consumption and outstanding display effects

which can meet the lightweight requirements of AR glasses.

(4) Intelligence has opened up new space for the automotive value and continuously improved

human-vehicle interaction

In the wave of the continuous transformation and upgrade of the automotive industry intelligence

has become a core driver for the development of the automotive industry. Given the in-depth integration

among generative AI large model technologies and vehicles smart cockpits have evolved from a pure

information display platform into a “third life space” capable of smart interaction. This transformation

empowers the cockpit with new functions of human-machine interaction for software hardware and

systems of the cockpit including automotive projection giant screens HUD and automotive

entertainment information system.By now we have released a new generation of automotive projection technologies - the smart laser

projection giant screen system 2.0. This automobile-grade projection giant screen system not only

greatly improves the brightness and definition but also enables more flexible designing more abundant

functions and improved vehicle safety. Our version 3.0 solution under development will integrate AI

technologies to greatly improve the human-vehicle interaction.Automotive intelligence also enables personalized headlight display and expands the potential for

21 / 304Appotronics Corporation Limited Annual Report 2024

scenario-based interaction and the headlights embedded with the display function will lead to more

human-vehicle interaction. We have caught the major trend of integration between lighting and display -our original ALL-in-ONE universal laser headlight can achieve the functions of “accurate lighting +accurate display” with one module. By now we have acquired a total of 13 automotive nominations

covering among others automobile-grade giant screen systems laser projection headlights headlight

modules dynamic headlights and static headlights.(IV) Core technologies and progress in R&D of technologies

1. Core technologies and their advancement and changes during the reporting period

While being committed to making breakthroughs in the upstream in the laser industry to build core

components we achieved breakthroughs in the upstream to drive the innovation of the downstream

scenarios to implement upstream core components in new racetracks and large racetracks. In recent

years we have enhanced R&D investments and technology accumulation in upstream core components

to achieve integration of upstream and downstream of the industry and localization of core components.Meanwhile we followed and maintained our R&D efforts for cutting-edge fields to promote in-depth

integration between laser technologies with large racetracks like AI AR robots and have achieved

interim results in such fields.The ALPD semiconductor laser light source technology is our original core technology developed

by the Company in the laser display field in 2007 which is of great significance in the display industry.We used rare earth phosphor in laser light sources for the first time and to improve the stability of the

rare earth phosphor after being excited by lasers we explored a unique impulse mode and created a

unique impulse architecture which is under strict patent protection. Thanks to the multiple tuning modes

the ALPD semiconductor laser light source technology is flexible enough to meet the requirements

under various scenarios. Subject to the high cost of red and green lasers it was hard to make

breakthroughs in the industrialization of laser light sources. However the ALPD semiconductor laser

light source technology based on independently developed core components and China’s rich rare earth

resources greatly promoted the process of commercialization and industrialization of lasers in the

display industry.National scientific and technology awards

□ Applicable √ N/A

Qualification of national “little giant” enterprises in specialized refinement differential and innovation

and “leading enterprise” in the manufacturing industry

□ Applicable √ N/A

2. R&D achievements during the reporting period

(1) Core components

? Split-type optical fiber light engine

22 / 304Appotronics Corporation Limited Annual Report 2024

During the reporting period we developed a split-type optical fiber light engine the first of its kind

in the industry which was officially released at the International Consumer Electronics Show (CES

2025). This light engine is equipped with a light source and an image modulation module separated from

and connected to each other with an optical fiber which significantly improves the heat radiation

efficiency and greatly reduces the size so that the projectors can be flexibly used for terminals (smart

wearables smart homes and other products) robots vehicles medical special equipment and various

displays. Unlike conventional light engines the split-type optical fiber light engine is unprecedentedly

flexible so that designers can combine light sources with image modulation modules freely based on

different application requirements and scenarios so as to create projection products in various forms

with rich functions. Meanwhile the optical fiber technology has a promising prospect for application in

fields such as smart terminals robots automotive and display.The split-type optical fiber light engine we released not only provides strong display functions in

the application fields above but also makes it possible to implement high-speed communication between

devices. Through the optical fiber connection terminal devices can coordinate with each other

seamlessly to achieve more flexible complex and efficient scenario-based control. It is expected that

this solution may become a core solution in fields such as smart terminals robots vehicle-mounted

equipment medical devices and displays in the future.? ALL-in-ONE universal laser headlights

With respect to smart headlights we released the world’s first ALL-in-ONE universal laser

headlight at the Beijing International Automotive Exhibition 2024 which is the only headlight capable

of colorful display in the market at present. Unlike conventional headlights with only the lightingfunction the ALL-in-ONE all-purpose laser headlight can achieve the effects of “accurate lighting +accurate display” with one headlight module to provide users with comprehensive functions of lighting

colorful display front fog light ADB etc. By greatly reducing the power consumption and volume of

the entire headlight system this allows automotive manufacturers to upgrade functions.? Automobile-grade projection giant screen system

As the pioneer of automobile-grade projection giant screen systems we have successfully applied

the products in multiple automobile models including AITO M9 which is the implementation of a

major innovative application for cockpit display. By now we have released a new generation of

automotive projection technologies - the smart laser projection giant screen system 2.0. This

automobile-grade projection giant screen system not only greatly improves the brightness and definition

but also enables more flexible designing thanks to the concealed projection light engine. In terms of

functions the smart laser projection giant screen system 2.0 has the function of floating windows which

is the first of its kind i.e. the one-quarter mode to display lyrics time and other information.Meanwhile the floating window function may also be associated with the safety system of the vehicle

so that it can promptly remind rear-seat passengers when the door is opened and a risk is detected hence

improving the driving safety.

(2) Branded complete equipment

23 / 304Appotronics Corporation Limited Annual Report 2024

? Dedicated display field

During the reporting period we released a flagship new product - the S Pro series large venue

projector which is the first large venue projector of over 10000 lumens and 4K resolution in China. It

fills the gap of domestic large venue projectors in the range of 15000-20000 lumens. As the first

application of ALPD 5.0 super panchromatic laser technology in the field of large venue projection the

S Pro series large venue projector equipped with the latest DLP imaging technology with upgraded light

source technology architecture presentation of image colors and lens is ideal for such application

scenarios like exhibition cultural tourism outdoor landscape stage performance etc.

(3) Cutting-edge technologies

? AR display modules

During the reporting period we paid close attention to the market of smart glasses and continuously

made investments in the R&D of core optical components for smart AR glasses in pursuit of the R&D

and implementation of small-sized AR display modules.With respect to AR micro light engines we made continuous technology iterations and patent

layouts around the technical routes of LCOS DLP LBS Micro LED etc. so as to continuously

optimize our production capabilities. During the reporting period we developed an ultra-small full-color

AR light engine solution with a volume of only 0.8cc featuring a high cost-performance ratio low

power consumption and outstanding display effects which can meet the lightweight requirements of AR

glasses. At present we are cooperating with customers for full-color AR light engine project

development to provide an efficient solution for the innovative development of the AR glasses industry.With respect to display waveguides we made continuous efforts to improve the simulation

efficiency and template process capabilities of our independently developed waveguide designing tool

and continuously optimized the process and manufacturing capabilities. We have completed the

development of the nondestructive test technology with high-throughput light grating parameters in

which the measurement precision of key light gating structural parameters can meet the template process

requirements. This technology has been used in the waveguide development by now. Meanwhile we

completed multiple rounds of architecture iteration and sample fabrication for large-area high-efficiency

diffractive waveguides. Based on high-level process development the display performance of our

independently developed waveguide has been greatly improved. On the basis of the technology

accumulation in the micro/nano optics field we continuously explore the applications of flexible

waveguides new waveguide forms and micro/nano optics devices etc.? Algorithm system

During the reporting period based on the differentiated advantages of projection display in

non-planar scenarios we combined the research results in the fields of 3D visual algorithms rendering

and AI content generation to develop a high-precision automatic integration system for multiple

projectors and complex surfaces and an AI image generation system that automatically adapts to the

shape of the projection surface. This system can reduce the time of adjustment by multiple projectors in

non-planar application scenarios generate contents for presentation matching with the current scenario

24 / 304Appotronics Corporation Limited Annual Report 2024

on a complex 3D surface at a low cost and allocate display images to each projector by means of

real-time rendering. The algorithm system above can be used in such fields as outdoor cultural and

tourism lighting and automotive to improve the authenticity and flexibility of application scenarios and

enhance the immersive experience of users and atmosphere for interaction.List of intellectual property rights acquired during the reporting period

Newly added in the current year Total

Applications Applications

(pcs) Granted (pcs) (pcs) Granted (pcs)

Patent for

invention 68 109 1772 1189

Patent for utility

model 114 118 962 859

Patent for design 7 11 244 239

Software

copyright 13 11 155 153

Others 27 66 1176 1117

Total 229 315 4309 3557

Note: 1. “Others” in the table above refer to trademarks of the Company; 2. During the reporting period

the Company filed a total of 15 valid PCT international patent applications.

3. R&D investments

In RMB

Current year Last year % Change

R&D investments expensed 247712822.82 280932800.35 -11.82

R&D investments capitalized 0 0 -

Total R&D investments 247712822.82 280932800.35 -11.82

Proportion of R&D investments to 10.24 12.69 -2.45 percentage operating revenue (%) points

Proportion of R&D investments

capitalized (%) 0 0

Reasons for the material change in the total R&D investments compared with last year

□ Applicable √ N/A

Reasons for the great change in the proportion of R&D investments capitalized and explanation

about the rationality thereof

□ Applicable √ N/A

4. R&D projects

√ Applicable □ N/A

In RMB 0’000

Estimated Investment Progress or

No. Project total in the Aggregate Technological Application

investment current investment

interim Goals

results level scenario

25 / 304Appotronics Corporation Limited Annual Report 2024

period

Develop

upstream

laser

technologies

and develop Innovative Innovative scenarios

1 optical 34991.00 11524.35 24728.89 Mass innovative Leading in the

application production applications industry

such as AR

for AR and

optical automotive.modules and

automotive

optics.Continuously

develop the

semiconduct

or laser light

source Continuous

Core technology to development

component achieve light of core

2 light source Mass

sources and technologies

and light 16257.00 2830.64 11184.22 production light engines

Leading in the

with lower industry

and core

engine components

project cost wider for use in color gamut various

higher fields.brightness

and higher

energy

efficiency.DCI-complia

nt LED

cinema

Cinema Mass screens and Leading in the Cinema 3 products 21167.00 3168.78 14716.98 production servers for industry projection

cinema halls etc.projection

halls.Multiple

laser large

venue

projectors

with high

brightness

education

projectors Large venue

Dedicated and business projector

4 display 15452.00 2437.63 10033.52 Mass production projectors

Leading in the business

products with high industry education

cost-effective projector and

ness will be other fields.researched

and

developed

for meeting

different user

needs.

26 / 304Appotronics Corporation Limited Annual Report 2024

In terms of

smart mini

projector

products

engage in the

research and

development

of

high-perform

ance and

high-cost-eff

ectiveness

products and

make

breakthrough

s in

technological

innovation Smart mini

5 Household 39047.00 4809.89 31769.70 Mass product form Leading in the projector and products production innovation industry household

and quality laser TV.upgrade. In

terms of laser

TVs engage

in the

research and

development

of products

with

advantageous

performance

such as high

brightness

and

eye-friendlin

ess to meet

various user

requirements.Tot

al - 126914.00 24771.28 92433.31 - - - -

Explanation

None

5. R&D staff

In RMB 0’000

Basic information

Current period Previous period

Number of R&D staff (persons) 505 428

Proportion of R&D staff to total employees

of the Company (%) 35.09 30.16

Total compensation of R&D staff 16822.52 18847.54

Average compensation of R&D staff 33.31 44.04

27 / 304Appotronics Corporation Limited Annual Report 2024

Academic structure of the R&D staff

Academic category Person in the academic category

Master and above 132

Bachelor and below 373

Age structure of the R&D staff

Age category Person in the age category

Below 30 (exclusive) 158

30-40 (including 30 excluding 40) 237

40 and above 110

Reason for material changes in the composition of the R&D staff and impact on the future development

of the Company

□ Applicable √ N/A

6. Other information

□ Applicable √ N/A

III. Analysis of core competitiveness during the reporting period

(I) Analysis of core competitiveness

√ Applicable □ N/A

1. High-quality R&D team to promote the innovation and development of laser technologies

The Company stays innovation-driven continues to increase R&D investment in forward-looking

technology arrangements and product technology development. Having operated in the laser industry for

years we have established a leading R&D team in the optical field and have been developing and

innovating laser display technologies for many years thus having accumulated profound R&D technical

strength and gained a deep understanding and judgment of the industry’s cutting-edge technology and

development trend.We have set up a research institute and a research and development center to jointly coordinate

technology and product planning hence creating an efficient cycle from technology to product and then

to business. The research institute is committed to the research and verification of forward-looking

technologies and cultivation of solutions for innovative technologies innovative products and new

application scenarios hence ensuring forward allocation of R&D resources and forward-looking layout

of R&D technologies; the R&D center combining the technology achievements of the research institute

coordinates the management of the whole process from new product development until mass production

and launch. Thanks to the close coordination between the research institute and the research and

development center we have obviously improved the R&D efficiency while ensuring the rapid

productization and commercialization of the latest R&D achievements and continuously promoting

technological innovation and product upgrade.

2. Build a patent moat around the underlying technical architecture

We take the underlying technical architecture patent of the original semiconductor laser light source

technology as the center and build a solid and interconnected intellectual property patent system. As of

December 31 2024 we had a total of 2993 patents filed and granted throughout the world including

2287 patents granted throughout the world including 1189 patents for invention. With respect to

28 / 304Appotronics Corporation Limited Annual Report 2024

patents related to AR and AI technologies our R&D teams have achieved over 80 additional patents

related to AR and AI granted or filed during the reporting period. As of December 31 2024 we had a

total of 241 patents filed and granted in the AR and AI fields indicating an increase of 36.16% year on

year. In terms of technology patents for automotive core components we had 92 new patents granted

and filed for automotive optics technologies during the reporting period; as of December 31 2024 we

had a total of 264 patents for automobile technologies granted and filed an increase of 26.32% year on

year.In terms of technology leadership the Company’s original semiconductor laser light source

technology has become the mainstream technology in the current laser display field and as the

underlying key architecture technology it has been used more than 686 times by leading companies in

the same industry such as Philips of the Netherlands Osram of Germany and Epson of Japan.

3. Relying on the technical advantages of core components an all-round strategic arrangement

for application scenarios is made

We continuously made breakthroughs towards the upstream of the laser industry to build core

components for the laser industry and drive the innovation of downstream application scenarios with the

breakthroughs in core components. Meanwhile given the rapid development of AI AR and smart robot

technologies and the continuous expansion of the product form and application boundaries in the laser

industry we will promote the upgrade and transformation of the laser industry pattern. We will insist on

reasonable investment for the automotive cinema and dedicated display scenarios to continuously

create new growth points; meanwhile we will implement innovative application for core components in

new fields and new racetracks to expand to the AI AR robot and other fields hence continuously

improving the long-lasting value of core components and expand the space of growth.(II) Events occurring during the reporting period that have a material effect on the Company’s

core competitiveness analysis of the effect and countermeasures

□ Applicable √ N/A

IV. Risk factors

(I) Risk of not making a profit

□ Applicable √ N/A

(II) Risk of a significant decrease in operating performance or loss

□ Applicable √ N/A

(III) Risk related to core competitiveness

√ Applicable □ N/A

1. Risk of the technological innovation falling short of expectations

We need to accurately understand the development trend of technologies and applications in the

industry and continuously develop and optimize our technology competence to provide services and

products meeting market demands and customers’ standards. If we fail to effectively identify the

direction of technological innovation or fail to continuously achieve technological innovation or fail to

make effective R&D investments due to limited funds or experience risks of technology leakage we

29 / 304Appotronics Corporation Limited Annual Report 2024

may face the adverse effects of weakened competitiveness.We will make continuous efforts to promptly and accurately explore the technology development

trend in the laser industry further enhance technology advantages and technology development and

increase R&D investments so as to solidify our position in the industry and improve our product

competitiveness while maintaining the existing technology advantages.(IV) Operating risk

□ Applicable √ N/A

(V) Financial risk

√ Applicable □ N/A

1. Risk of impairment of accounts receivable

As of the end of the reporting period the book value of our accounts receivable was RMB

310.1953 million accounting for 7.29% of our total assets. Our automotive business has entered the

stage of intense delivery leading to the continuous increase in the ratio of this business - the closing

balance of the accounts receivable increased by 72.05% year on year where customers made payments

according to the payment term set forth in contracts. In case of any material adverse change in the

business condition of our customers we may be unable to recover certain accounts receivable which

may have an adverse effect on our operating performance in the future.The Company strengthens risk management and control continuously tracks and controls customer

credit strengthen the assessment of accounts receivable collection and establish an early warning

system for overdue accounts receivable; for individual customers who maliciously default and have a

long period of arrears payment will be recovered through arbitration litigation and other legal methods.

2. Risk of impairment of inventories

As of the end of the reporting period the book value of our inventories was RMB 595.5192 million

accounting for 13.99% of our assets. Our inventories mainly comprise raw materials and goods on hand.In the event of any significant change in the competition pattern of the industry and material innovation

in laser display technology and products the recoverable amount of the inventories will be lower than

their book value. The impairment of inventories will have a negative effect on our earnings. The

Company will pay close attention to the changes in supply and demand of the industrial chain and

promptly carry out production and marketing coordination according to the market and production

conditions to reduce product inventory risks.

3. Risk of impairment of fixed assets

As of the end of the reporting period the book value of our fixed assets was RMB 272.1018 million

accounting for 6.39% of our assets. Our fixed assets mainly consist of production equipment and cinema

projector light sources for lease where the cinema projector light sources account for 60.74%. If force

majeure factors result in a shutdown of cinemas the cinema projector light sources may be idle causing

the risk of impairing fixed assets and having adverse effects on the operation of the Company. In order

to cope with the above risks the Company will pay close attention to the status of fixed assets

strengthen communication with business departments improve the efficiency of asset use and reduce

30 / 304Appotronics Corporation Limited Annual Report 2024

the risk of impairment. In the meantime for assets that show signs of impairment the Company will

measure the recoverable amount and make an impairment provision for fixed assets based on the

difference between the recoverable amount and the carrying value.

4. Risk of currency movement

The Company’s procurement and sales involve a variety of foreign currencies and the US dollar is

the main foreign currency. If the exchange rate of the relevant currency fluctuates it will have a certain

impact on the Company’s financial position. In this regard in order to effectively avoid the risks of the

foreign exchange market prevent large fluctuations in the exchange rate from adversely affecting the

Company’s business performance improve the efficiency of the use of foreign exchange funds and

reasonably reduce financial costs the Company carries out foreign exchange derivatives and other

businesses in a timely manner to reduce the risk of exchange rate fluctuations.(VI) Industrial risk

√ Applicable □ N/A

1. Risk of cyclical fluctuation in the consumer electronics industry

At present people are more prudent in consumption which slows down the demand in the

consumer electronics market. As optional consumption products smart projection products are facing

more significant cyclical fluctuations. If the consumer electronics industry remains depressed or

experiences material changes under the comprehensive impact of the domestic economic environment

international trade significant sudden events and various other factors the operating revenues and

profits of our business sectors related to household projection may be adversely affected.We will closely follow the development trend of the consumer electronics industry conduct

in-depth research into the demands of domestic and overseas markets constantly enhance efforts for

product R&D and technology investment improve our R&D and product designing competence assess

risks rapidly and take initiative to make relevant business adjustments hence improving the risk

tolerance of the Company.

2. Risk of intensified competition in the automotive smart cockpit industry

The development of automotive intelligence attracted more and more enterprises to the industry of

automotive smart cockpits which intensified market competition. As a result our automotive cockpit

business faces certain risks of market competition. Meanwhile the shortening cycle of technology

upgrade and iteration for automotive products leads to higher requirements on automobile manufacturers

and consumers for the speed of product technology iteration and capabilities of technology R&D. As a

leader in the automotive smart cockpit industry we will maintain our advantages in products technology

R&D brand reputation etc. continuously improve our R&D and designing capabilities market

development level and production capabilities and promote cooperation with domestic and overseas

players to achieve breakthroughs in leading automobile manufacturers on overseas markets.(VII) Risk of macro-environment

√ Applicable □ N/A

31 / 304Appotronics Corporation Limited Annual Report 2024

At present given that the global economy is experiencing cyclical fluctuations both domestic and

overseas economies are complex and prone to changes and the economic pattern is restructuring at an

accelerated pace. If the economy remains low both at home and abroad our operation may be subject to

adverse effects which may affect the profitability of the Company.We will continue to enhance the efforts for the study of macro-economic conditions pay close

attention to changes in the politics economy international trade environment and customs duties in

major countries rapidly assess risks and actively adjust relevant businesses to reduce the adverse effects

caused by changes in the international trade environment.(VIII) Risk related to depository receipts

□ Applicable √ N/A

(IX) Other significant risks

√ Applicable □ N/A

1. Risks in the arbitration with relevant parties of the participating company GDC BVI

At present the Company is in the process of arbitration and counter-arbitration with relevant parties

of GDC. Given that the case is under trial at present the impact of such case on the profit or loss of the

Company cannot be determined at present; the eventual actual impact depends on the award of the

arbitration tribunal. The Company has engaged a professional attorney team and taken relevant legal

measures to safeguard the legitimate rights and interests of the Company and all shareholders in

accordance with law and will promptly fulfill the information disclosure obligations in accordance with

relevant provisions.V. Main business activities during the reporting periodIn 2024 adhering to the development strategy of “core technologies + core components +application scenarios” we achieved an operating revenue of RMB 2.419 billion up by 9.27% year on

year presenting a stable growth trend. The automotive optics business which entered the stage of

intense delivery in 2024 achieved an operating revenue of RMB 638 million. During the reporting

period we achieved the net profit attributable to shareholders of the listed company of RMB 27.9531

million and the net profit attributable to shareholders of the listed company after deduction of

non-recurring profit or loss of RMB 32.1336 million. At the end of the period the total assets of the

Company were RMB 4.256 billion and the net assets attributable to shareholders of the listed company

were RMB 2.740 billion.(I) Analysis of main business

1. Analysis of changes in the income statement and the cash flow statement

In RMB

Item Current period Prior period % Change

Operating revenue 2418574391.82 2213356977.95 9.27

Operating costs 1733837423.57 1435201005.16 20.81

Selling expenses 186516285.46 277237296.91 -32.72

Administrative expenses 163191057.84 157092724.49 3.88

Financial expenses -10207841.54 -19449983.65 N/A

32 / 304Appotronics Corporation Limited Annual Report 2024

R&D expenses 247712822.82 280932800.35 -11.82

Net cash flow from operating

activities 87220645.17 364082055.08 -76.04

Net cash flow from investment

activities 235313663.36 -328864633.65 N/A

Net cash flow from financing

activities -295510117.47 1797013.72 -16544.51

Description of reasons for changes in the selling expenses: The selling expenses decreased by 32.72%

year on year primarily due to the decrease in the employee benefits and marketing expenses during the

reporting period year on year;

Description of reasons for changes in the financial expenses: The financial expenses decreased by RMB

9.2421 million year on year primarily due to the year-on-year decrease in interest incomes and foreign

exchange gains;

Description of reasons for changes in the net cash flows from operating activities: The net cash flow

from operating activities decreased by 76.04% year on year which was primarily due to the increase in

the operating capital required in response to the growth in our automotive business and the increase in

restricted monetary funds;

Description of reasons for changes in the net cash flows from investment activities: The net cash flow

from investment activities increased by RMB 564.1783 million year on year primarily due to the

recovery of mature wealth management products;

Description of reasons for changes in the net cash flow from financing activities: The net cash flow from

financing activities decreased by RMB 297.3071 million year on year primarily due to the decrease in

borrowings compared with last year and the repurchase of the Company’s shares.Detailed description of major changes in the business types profit composition or profit sources of the

Company

□ Applicable √ N/A

2. Analysis of revenue and costs

√ Applicable □ N/A

During the reporting period our operating revenue was RMB 2.419 billion increased by 9.27% year on

year.

(1). Main business by sector product region and sales mode

In RMB 0’000

Main business by sector

Operating Operating Gross % Change in

%

Change in % Change Sector revenue costs margin operating in gross (%) revenue operating cost margin

-6.85

Laser display 241857.44 173383.74 28.31 9.27 20.81 percentag

e points

33 / 304Appotronics Corporation Limited Annual Report 2024

Main business by product

%

Product Operating Operating

Gross % Change in % Change

revenue costs margin operating

Change in

(%) revenue operating

in gross

cost margin

Core

components -7.47

and complete 223961.39 157130.11 29.84 11.48 24.76 percentag

equipment e points

Other products -4.85

and businesses 17896.05 16253.63 9.18 -12.46 -7.53 percentage points

Main business by region

Operating Operating Gross % Change in

%

Region margin operating Change in

% Change

revenue costs (%) revenue operating

in gross

cost margin

-7.2

Domestic 214130.34 156869.54 26.74 14.93 27.46 percentage

points

-1.17

Overseas 27727.10 16514.20 40.44 -20.81 -19.23 percentage

points

Main business by sales mode

%

Sales mode Operating Operating

Gross % Change in Change in % Change

revenue costs margin operating operating in gross (%) revenue cost margin

-8.46

Direct sales 199399.67 141237.74 29.17 27.59 44.90 percentage

points

-4.89

Distribution 42387.32 32073.65 24.33 -34.82 -30.32 percentage

points

Commissioned -35.67

sales 70.45 72.34 -2.68 -239.05 419.56 percentage points

Description of main business by sector product region and sales mode

1. Description by product: Our main businesses are the core component business and complete

projectors. During the reporting period the main businesses achieved the revenue of RMB 2.419 billion

increased by 9.27% year on year where the revenue from the core component and complete equipment

business was RMB 2.240 billion increased by 11.48% year on year primarily due to the increase in the

revenue because the automotive optics business entered the stage of mass production.

2. Description by region: During the reporting period our revenue from overseas operations was RMB

277.2710 million decreased by 20.81% year on year which was mainly due to the reduction in the

overseas sales of light sources.

3. Description by sales mode: Our sales were achieved mainly through direct sales and distribution

sales supplemented by commissioned sales.

34 / 304Appotronics Corporation Limited Annual Report 2024

(2). Analysis of output and sales volume

√ Applicable □ N/A

%

Main % %

products Unit Output

Sales

volume Stock Change

Change

in output in sales

Change

volume in stock

Core

components

and Set 677600.00 639490.00 154048.00 44.28 25.88 32.87

complete

equipment

Explanation about output and sales volume

During the reporting period both our production and sales increased year on year primarily due to the

increase in our automotive business.

(3). Performance of significant procurement contracts and significant sales contracts

□ Applicable √ N/A

(4). Analysis of costs

In RMB 0’000

Costs by sector

Ratio in Ratio in

Amount total Amount total %

Sector Components for the

costs costs

of cost current for the

of the

prior for the

Change Situation

period current period prior

in Description

period period amount

(%)(%)

Laser

display 173383.74 100 143520.10 100 20.81

Costs by product

Ratio in Ratio in

Amount total Amount total %

Product Components for the

costs of the costs Change Situation

of cost current for the prior for the

period current period prior

in Description

period period amount

(%)(%)

Core Direct materials 139022.25 88.48 111755.55 88.74 24.40 components

and Direct labor 4734.28 3.01 3815.48 3.03 24.08

complete Indirect

equipment expenses

13373.588.5110371.208.2328.95

Subtotal 157130.11 100 125943.51 100 24.76

Other products and

businesses 16253.63 100 17576.59 100 -7.53

Total 173383.74 100 143520.10 100 20.81

Explanation about cost analysis

The costs of the core component and complete equipment business mainly comprise direct

materials direct labor and indirect expenses of which the costs of direct materials account for 88.48%.Compared with the prior period the ratio of various cost items increased primarily due to the change in

the product portfolios of the core component and complete equipment business.

35 / 304Appotronics Corporation Limited Annual Report 2024

(5). Change in the scope of consolidation due to changes in equity interests held in major

subsidiaries during the reporting period

□ Applicable √ N/A

(6). Significant changes in or adjustments to the businesses products or services of the

Company during the reporting period

□ Applicable √ N/A

(7). Main customers and main suppliers

A. The Company’s main customers

√ Applicable □ N/A

The sales to top 5 customers were RMB 1038.6062 million representing 42.94% of the total annual

sales including the sales to related parties amounting to RMB 156.2787 million representing 6.46% of

the total annual sales.Top 5 customers

√ Applicable □ N/A

In RMB 0’000

No. Customer Sales % of total annual Related to the listed sales company or not

1 Customer 1 60463.04 25.00 No

2 Customer 2 15627.87 6.46 Yes

3 Customer 3 11763.12 4.86 No

4 Customer 4 8123.16 3.36 No

5 Customer 5 7883.43 3.26 No

Total - 103860.62 42.94 -

Description of sales to a single customer accounting for over 50% of the total sales value new

customer in the top 5 customers or serious dependence on a small number of customers during

the reporting period

√ Applicable □ N/A

Customer 1 was newly counted among the top 5 customers.B. Information on major suppliers of the Company

√ Applicable □ N/A

The amount of purchases from top 5 suppliers was RMB 572.7649 million representing 30.48% of the

total annual purchase cost of which the amount of purchases from related parties was RMB 0 million

representing 0% of the total annual purchase cost.Top 5 suppliers

√ Applicable □ N/A

In RMB 0’000

No. Supplier Purchase cost % of total annual Related to the listed purchase cost company or not

1 Supplier 1 24183.43 12.87 No

2 Supplier 2 10980.89 5.84 No

3 Supplier 3 10338.96 5.50 No

36 / 304Appotronics Corporation Limited Annual Report 2024

4 Supplier 4 6234.05 3.32 No

5 Supplier 5 5539.17 2.95 No

Total - 57276.49 30.48 -

Description of purchase from a single supplier accounting for over 50% of the total purchase

value new supplier in the top 5 suppliers or serious dependence on a small number of suppliers

during the reporting period

□ Applicable √ N/A

3. Expenses

√ Applicable □ N/A

In RMB

Item Current period Prior period % Change

Selling expenses 186516285.46 277237296.91 -32.72

Administrative expenses 163191057.84 157092724.49 3.88

Financial expenses -10207841.54 -19449983.65 N/A

R&D expenses 247712822.82 280932800.35 -11.82

(1) The selling expenses decreased by 32.72% year on year primarily due to the decrease in employee

benefits and marketing expenses during the reporting period year on year;

(2) The financial expenses decreased by RMB 9.2421 million year on year primarily due to the

year-on-year decrease in interest incomes and foreign exchange gains.

4. Cash flow

√ Applicable □ N/A

In RMB

Item Current period Prior period % Change

Net cash flow from operating

activities 87220645.17 364082055.08 -76.04

Net cash flow from investment

activities 235313663.36 -328864633.65 N/A

Net cash flow from financing

activities -295510117.47 1797013.72 -16544.51

(1) The net cash flow from operating activities decreased by 76.04% year on year which was primarily

due to the increase in the operating capital required in response to the growth in our automotive business

and the increase in restricted monetary funds of the subsidiary Appotronics HK;

(2) The net cash flow from investment activities increased by RMB 564.1783 million year on year

primarily due to the recovery of mature wealth management products;

(3) The net cash flow from financing activities decreased by RMB 297.3071 million year on year

primarily due to the decrease in borrowings compared with last year and the repurchase of the

Company’s shares.(II) Explanation about material changes in profit due to non-main business

□ Applicable √ N/A

37 / 304Appotronics Corporation Limited Annual Report 2024

(III) Analysis of assets and liabilities

√ Applicable □ N/A

1. Status of assets and liabilities

In RMB

% of total % of total

Balance at the assets at the Balance at the assets at the

Project end of the end of the end of the end of the % Change Remark

current period current prior period prior in amount

period period

Primarily due to

Held-for-tradin the redemption of

g financial 179936739.21 4.23 514010000.00 12.18 -64.99 mature bank

assets structural deposits at the end of the

year

Primarily due to

the decrease in

Notes

receivable 4749524.13 0.11 8951308.71 0.21 -46.94

commercial

acceptance bills

received during the

period

Primarily due to

the increase in

Accounts 310195322.17 7.29 180290007.90 4.27 72.05 receivables from receivable the automotive

business during the

period

Primarily due to

the increase in

Other property rental

receivables 45104401.76 1.06 30698687.55 0.73 46.93 deposits and deposits for

product quality

warranties

Primarily due to

the increase in the

Non-current long-term

assets due 54729347.74 1.29 41997218.73 1.00 30.32 receivables due

within one year within 1 year as of

the end of the

reporting period

Primarily due to

the increase in the

Other current 65416667.70 1.54 48417270.11 1.15 35.11 input VAT to be assets deducted during

the reporting

period

Primarily due to

the increase in the

Long-term

receivables 37190876.33 0.87 26000543.13 0.62 43.04

business of

installment receipts

in the current

period

Long-term

equity 6242039.74 0.15 144726776.43 3.43 -95.69

Primarily due to

the adjustment of

38 / 304Appotronics Corporation Limited Annual Report 2024

investment equity interests in

the participating

company GDC

BVI from

long-term equity

investment to other

non-current

financial assets

Primarily due to

Right-of-use the increase in

assets 108676133.66 2.55 40016903.67 0.95 171.58 property leases during the

reporting period

Long-term Primarily due to

prepaid 1638295.71 0.04 6318145.33 0.15 -74.07 the amortization to

expenses costs and expenses

Other Primarily due to

non-current 14404981.14 0.34 29348748.27 0.70 -50.92 the decrease in

assets advance payment for mold expenses

Primarily due to

the increase in the

Notes payable 184786728.04 4.34 76001079.07 1.80 143.14 proportion of settlement by notes

during the

reporting period

Primarily due to

Accounts the increase in

payable 351760010.32 8.27 247318466.10 5.86 42.23 purchases during the reporting

period

Primarily due to

the increase in the

Taxes payable 25262217.19 0.59 6142704.23 0.15 311.26 provision for income taxes and

VAT during the

reporting period

Primarily due to

Other payables 73987139.27 1.74 54142509.17 1.28 36.65 the increase in technical service

fees payable

Primarily due to

the newly added

Other current

liabilities 63559833.08 1.49 18441685.83 0.44 244.65

CCB E Infocomm

settlement business

during the

reporting period

Primarily due to

the increase in

Lease liabilities 71996166.91 1.69 15548985.71 0.37 363.03 property leases

during the

reporting period

Primarily due to

Provisions 30299456.94 0.71 58180985.08 1.38 -47.92 the reclassification of the provision

made for sales

39 / 304Appotronics Corporation Limited Annual Report 2024

repair during the

reporting period

Primarily due to

the conversion of

Deferred

income 2245051.44 0.05 4627972.56 0.11 -51.49

deferred incomes

to other incomes

during the

reporting period

Primarily due to

the increase in

Deferred tax 1908071.13 0.04 1229654.81 0.03 55.17 long-term liabilities receivables during

the reporting

period

Primarily due to

the additional

Less: Treasury shares repurchased

shares 29891962.32 0.70 19377297.59 0.46 54.26 and de-registration of partial treasury

shares during the

reporting period

Other information

None

2. Overseas assets

√ Applicable □ N/A

(1) Size of assets

Where: The overseas assets were RMB 375.8700 million representing 8.83% of the total assets.

(2) Explanation about the high proportion of overseas assets

□ Applicable √ N/A

3. Encumbrances on assets as of the end of the reporting period

√ Applicable □ N/A

Item Amount Reason

Cash and bank

balances 168234385.36

Undue time deposits and interests account

security deposits and restricted payments

Intangible assets 258993499.74 Mortgage collateral

Cash and bank

balances 159999148.99

Appotronics HK and GDC Technology Limited

(BVI) subsidiaries of the Company are

involved in a pending litigation and the assets

Other assets 116577251.61 of Appotronics HK are presented as restricted

assets

Total 703804285.70 -

4. Other information

□ Applicable √ N/A

40 / 304Appotronics Corporation Limited Annual Report 2024

(IV) Analysis of operation information of the industry

√ Applicable □ N/A

For the analysis of operation information of the industry during the reporting period refer to“Section III Discussion and Analysis of Business Situations - II. Main business business model statusof industry and R&D activities during the reporting period”.

41 / 304Appotronics Corporation Limited Annual Report 2024

(V) Analysis of investments

Overall analysis of external equity investments

√ Applicable □ N/A

In RMB

Investment amount in the reporting period (in Investment in the same period of the

RMB) prior year (in RMB) Range of change

6242039.74144726776.43-95.69%

1. Material equity investments

□ Applicable √ N/A

2. Material non-equity investments

□ Applicable √ N/A

3. Financial assets at fair value

√ Applicable □ N/A

In RMB

Gain or loss on Cumulative Impairment Purchase

Asset category Opening changes in fair

fair value amount

balance value for the changes

of the Sale/redemption for Closing

included in current

for the the current period Other changes balance

period equity period

current

period

Equities 12880000.00 10062500.00 22942500.00 0

Others 519592819.38 -14246766.41 -4900000.00 334845222.91 100183505.66 283564335.72

Total 532472819.38 -4184266.41 -4900000.00 357787722.91 100183505.66 283564335.72

42 / 304Appotronics Corporation Limited Annual Report 2024

Description of securities investments

√ Applicable □ N/A

In RMB

Gain or loss on Cumulative Initial fair value Purchase Sales amount Gains or Closing Security Security Short investment Source Opening book changes in fair amount for balance Accounting type code name cost of funds value value for the

changes

included in the current

for the current losses from

period period period disposal

of book account

equity value

Domestic Held-for-tra

and

overseas 835438 Gabrielle

14000000.0 Self-own

0 ed capital 12880000.00 10062500.00 22942500.00 9281230.90 0

ding

financial

shares assets

Total - - 14000000.00 - 12880000.00 10062500.00 22942500.00 9281230.90 0 -

Description of derivative investments

□ Applicable √ N/A

4. Description of investments in private equity investment funds

□ Applicable √ N/A

Other information

None

5. Specific progress of material assets restructuring and integration during the reporting period

□ Applicable √ N/A

(VI) Sale of material assets and equities

□ Applicable √ N/A

(VII) Analysis of major investees

√ Applicable □ N/A

43 / 304Appotronics Corporation Limited Annual Report 2024

In RMB 0’000

Company Main business Registered Shareholding name capital percentage Total assets Net assets Operating revenue Net profit

CINEAPPO Provision of cinema projection services and sales of projectors 10000.00 67.80% 75221.03 54302.85 48699.62 10513.97

Chongqing R&D and sale of household display

Formovie products 7017.54 39.19% 39427.49 -37716.55 46853.71 -11080.96

(VIII) Structured entities controlled by the Company

□ Applicable √ N/A

44 / 304Appotronics Corporation Limited Annual Report 2024

VI. Discussion and analysis of the Company’s future development

(I) Structure and trend of the industry

√ Applicable □ N/AFor details of the industry pattern and trend analysis refer to “Section III Discussion and Analysisof the Management - II. Main business business model status of industry and R&D activities during the

reporting period - (III) Industry in which the Company operates - 3. Development of new technologiesnew industries new types of operation and new modes during the reporting period and the future trend”.(II) Development strategy of the Company

√ Applicable □ N/A

Facing the future we are dedicated to becoming a pioneer in the laser industry; under the mission

and vision of “New light New Life” the Company insists on the strategic direction of “coretechnologies + core components + application scenarios” to continuously promote breakthrough

innovation of laser technologies accelerate the expansion of application scenarios enhance the in-depth

industrialization of laser technologies such as laser display and laser lighting and build a bigger and

stronger laser display ecology.(III) Business plan

√ Applicable □ N/A

In 2025 while continuously making breakthroughs in the upstream in the laser industry to build

core components we further increased investments in cutting-edge fields so that the breakthroughs in

the upstream drove the innovation of the downstream scenarios to implement upstream core components

in new racetracks and large racetracks especially focusing on new scenarios created by new AI

technologies. In 2025 we will stay innovation-driven continue to increase R&D investment in

forward-looking technology arrangement and innovation and product technology development so as to

build energy for the sustainable development of the Company.

1. Core component business

We will continuously enhance our core competitiveness by improving our capabilities of R&D for

innovative products and accelerating product iteration and actively strive for more innovative

application scenarios while maintaining stable and continuous output of existing products. To enhance

the competitiveness of core components we implemented innovation for laser light engines in aspects of

technologies product forms application scenarios etc. and released a split-type optical fiber light

engine in January 2025 which is the first of its kind in the industry. At present we are taking active

measures to communicate with major customers in the application fields of robots smart terminals

medical etc. and jointly explore the implementation solutions for application scenarios of split-type

optical fiber light engines hence assisting customers in achieving product innovation and interaction.

2. Achieve synergy between dual headquarters to continuously build a smart supply chain

system

In March 2025 the Appotronics headquarters building with both R&D and office functions was

officially put into use which indicates the comprehensive upgrade of our corporate strength. In addition

45 / 304Appotronics Corporation Limited Annual Report 2024

with the launch of the smart manufacturing base “Appotronics Innovation and Intelligence Valley”

located in Pingshan District Shenzhen synergy effects may be achieved between the headquarters

building and the smart manufacturing basis to further enhance the stability of the industry chain and

flexible production capabilities hence creating a more comprehensive smart supply chain system and

driving the Company to a new development stage featuring resource aggregation and coordinated

innovation.(IV) Others

□ Applicable √ N/A

46 / 304Appotronics Corporation Limited Annual Report 2024

Section IV. Corporate Governance

I. Corporate governance

√ Applicable □ N/A

During the reporting period in strict compliance with the requirements of the Company Law the

Securities Law the Rules Governing the Listing of Stocks on the Science and Technology Innovation

Board of the Shanghai Stock Exchange the Guidelines on Self-regulatory Supervision of Listed

Companies on the Science and Technology Innovation Board of the Shanghai Stock Exchange other

laws and regulations and the Articles of Association with reference to the actual operation conditions of

the Company the Company and its directors supervisors and senior officers constantly improved the

corporate governance structure and continuously improved the internal governance and control measures

to improve the level of standardized operation and governance level of the Company. During the

reporting period the actual conditions of corporate governance complied with the requirements of

normative documents on the governance of listed companies. We will continuously insist on complying

with relevant laws and regulations and continuously improve our governance regulations to practically

safeguard the interests of investors.(I) About the Company and controlling shareholder

During the reporting period the controlling shareholder and actual controller of the Company

strictly followed the Code of Corporate Governance for Listed Companies the Rules Governing the

Listing of Stocks on the Science and Technology Innovation Board of the Shanghai Stock Exchange the

Guidelines on Self-regulatory Supervision of Listed Companies on the Science and Technology

Innovation Board of the Shanghai Stock Exchange and other regulations to standardize its acts and to

exercise the rights and practically fulfill the obligations as a shareholder in accordance with law. All our

major decisions were made through the corresponding approval procedure set forth in the Articles of

Association etc. and we have a complete business system; while the controlling shareholder and actual

controller did not bypass the general meeting of shareholders to directly or indirectly interfere with the

decision-making and operating activities of the Company. The Company neither had funds occupied by

the controlling shareholder nor provided a guarantee for the controlling shareholder and had an

independent and complete business system and capabilities of independent operation.(II) About shareholders and the general meeting of shareholders

The general meeting of shareholders is the highest authority of the Company. During the reporting

period the Company held 4 general meetings of shareholders. The Company convened held voted and

made information disclosure of the general meetings of shareholders in strict compliance with the

Company Law the Articles of Association the Rules of Procedure for the General Meeting of

Shareholders and relevant laws and regulations normative documents and the Company’s rules and

regulations where lawful and valid resolutions were made under the witness of lawyers on site who also

issued legal opinions. We treated all shareholders equally and took lawful and effective measures for

on-site attendance online attendance etc. so that more shareholders could attend the general meetings

of shareholders to fully safeguard the equal rights of all shareholders especially small- and

47 / 304Appotronics Corporation Limited Annual Report 2024

medium-sized shareholders safeguarding the rights of information and participation for every

shareholder and facilitating the exercise of the voting power by every shareholder. Meanwhile

associated shareholders withdrew from voting on related-party transactions with which they were

associated.(III) About directors and the Board of Directors

The Board of Directors is the standing decision-making and management authority of the Company.During the reporting period the Company held 17 meetings of the Board of Directors. The Company

acted in strict compliance with the Articles of Association the Rules of Procedure for the Board of

Directors and other relevant laws and regulations normative documents and the Company’s rules and

regulations in convening and holding meetings of the Board of Directors. During the reporting period

the Company smoothly completed the election of the third Board of Directors upon the expiration of the

office term of the second Board of Directors. The third Board of Directors of the Company consists of 7

directors including 3 independent directors and 1 employee representative director. All the members of

the Board of Directors are qualified in accordance with the requirements of laws and regulations and

have the professional expertise skills and quality required for acting as a director. All the directors

conducted their work in accordance with regulations and requirements punctually attended meetings of

the Board of Directors and specific-purpose committees and the general meetings of shareholders and

diligently fulfilled their duties and obligations to safeguard the interests of the Company and

shareholders as a whole. Moreover they actively participated in relevant training to familiarize

themselves with relevant laws and regulations.The Board of Directors has four specific-purpose committees namely the Audit Committee the

Strategy and ESG Committee the Remuneration and Appraisal Committee and the Nomination

Committee. The members of such specific-purpose committees and their qualifications comply with

laws and regulations and the requirements of the Articles of Association; the committees convene

meetings and fulfill their duties in accordance with their working rules and members of such

committees fulfill their duties in a diligent manner which play a significant role in the compliant

operation and the healthy and sustainable development of the Company.(IV) About supervisors and the Board of Supervisors

The Board of Supervisors is the supervisory body of the Company. During the reporting period the

Company held 6 meetings of the Board of Supervisors. The Company acted in strict compliance with the

Articles of Association the Rules of Procedure for the Board of Supervisors and other relevant laws and

regulations normative documents and the Company’s rules and regulations in convening and holding

meetings of the Board of Supervisors. During the reporting period the Company smoothly completed

the election of the third Board of Supervisors upon the expiration of the office term of the second Board

of Supervisors. The third Board of Supervisors of the Company consists of 3 supervisors including 1

employee representative supervisor. The composition of the Board of Supervisors and the qualifications

of the members thereof comply with requirements of laws and regulations to ensure professional

expertise and practical experience. All the supervisors acted independently and effectively to fulfill their

48 / 304Appotronics Corporation Limited Annual Report 2024

duties of supervision check etc. over major events and financial conditions of the Company and over

directors and senior officers so as to actively safeguard the legitimate rights and interests of the

Company and all shareholders.(V) About information disclosure and investor relations management

During the reporting period we further improved the efforts for information disclosure management

in compliance with the relevant laws and regulations and the Management Regulations of Information

Disclosure the Management Regulations for Investor Relation etc. We made information disclosure in

a truthful accurate complete timely and fair manner and kept the disclosed content easy to understand

to fully disclose risks for view by all shareholders. The designated website for information disclosure of

the Company is the website of the Shanghai Stock Exchange (www.sse.com.cn) the designated journals

of information disclosure are China Securities Journal Shanghai Securities News Securities Daily and

Securities Times to ensure fair access to information about the Company by shareholders.We attached importance to the investor relations management. We provide a public and transparent

platform for communication with investors so that investors can query about the operation of the

Company through multiple channels including on-site survey investor telephone number

(0755-32950536) investor email (ir@appotronics.com) online performance briefing the “E InteractionPlatform” of the Shanghai Stock Exchange and the WeChat official account (Appotronics). We took

active measures to build a bridge for fair and effective communication by the Company with investors

and the social public so as to deliver the Company’s value to investors and the social public carefully

listen to the opinions and suggestions of investors truly maintain the legitimate rights and interests of

investors especially medium and small investors and improve the channel for information exchanges

between investors and the Company.(VI) Registration and management of insiders

During the reporting period we followed the relevant requirements of laws and regulations and the

Management Regulations of Insider Information on the management of insiders to register and file

relevant personnel involved in insider information during major events of the Company such as regular

reports repurchase of the Company’s shares etc. During the window period of transactions insiders

including the directors supervisors senior officers and key technical staff of the Company would be

reminded. Meanwhile we constantly enhanced the education and study on laws and regulations

concerning the prevention and control of insider trading by the directors supervisors senior officers

and relevant personnel of the Company so as to enhance their awareness of confidentiality. No trading

of the Company’s shares by insiders using insider information was detected.(VII) About stakeholders and social responsibility

We fully respect and maintain the legitimate rights and interests of stakeholders and cooperate

actively with stakeholders to jointly promote the continuous and healthy development of the Company.We continuously improve the working environments of employees in a planned way and safeguard the

rights and interests of employees to actively fulfill our social responsibility and achieve coordinated

balance and mutual development among society shareholders the Company and employees.

49 / 304Appotronics Corporation Limited Annual Report 2024

Is there any major deviation in the corporate governance from laws administrative regulations and the

regulations of the CSRC on the governance of listed companies If yes specify the reasons

□ Applicable √ N/A

II. Give an explanation if the Company cannot guarantee its independence and ability to operate

independently due to its relationship with the controlling shareholder in business personnel

assets organization finance and other affairs

□ Applicable √ N/A

Information about the business identical or similar to that of the Company operated by the controlling

shareholder actual controller and other entities under their control impact of horizontal competition or

major changes in horizontal competition on the Company measures that have been taken solution

progress and subsequent solution plans

□ Applicable √ N/A

Information about horizontal competition operated by the controlling shareholder actual controller and

other entities under their control having material adverse effects on the Company

□ Applicable √ N/A

III. General meetings of shareholders

Date of

Session Date of Reference to resolutions published on the disclosure Resolutiomeeting designated website of ns

resolutions

1st For details see the Announcement on the

extraordinary Resolutions of the 1st Extraordinary General

general April 24 Meeting of Shareholders in 2024 (No. April 25

meeting of 2024 2024-029) disclosed by the Company on the 2024

shareholders in website of the Shanghai Stock Exchange

2024 (www.sse.com.cn) on April 25 2024

For details see the Announcement on the

Annual general Resolutions of the Annual General Meeting

meeting of June 3 of Shareholders in 2023 (No. 2024-047) June 4

shareholders in 2024 disclosed by the Company on the website of 2024 All

2023 the Shanghai Stock Exchange proposals

(www.sse.com.cn) on June 4 2024 were

For details see the Announcement on the reviewed 2nd

extraordinary Resolutions of the 2

nd Extraordinary and passed

general September General Meeting of Shareholders in 2024

meeting of 18 2024 (No. 2024-079) disclosed by the Company

September with no

shareholders in on the website of the Shanghai Stock

19 2024 proposal

2024 Exchange (www.sse.com.cn) on September

rejected.

192024

3rd For details see the Announcement on the

extraordinary Resolutions of the 3

rd Extraordinary

general November General Meeting of Shareholders in 2024 November

meeting of 18 2024 (No. 2024-091) disclosed by the Company

shareholders in on the website of the Shanghai Stock

192024

2024 Exchange (www.sse.com.cn) on November 19 2024

Extraordinary general meeting of shareholders requested by the preferred shareholders with

restitution of voting rights

50 / 304Appotronics Corporation Limited Annual Report 2024

□ Applicable √ N/A

Explanation about the general meetings of shareholders

√ Applicable □ N/A

During the reporting period the Company held 1 annual general meeting of shareholders and 3

extraordinary general meetings of shareholders. After being certified by the law firm engaged by the

Company the convening and holding procedures of general meetings of shareholders the qualifications

of the persons attending the meeting and conveners the voting procedures and results complied with the

relevant provisions of the Company Law the Rules for General Meetings of Shareholders and other laws

regulations and normative documents as well as the provisions of the Articles of Association and were

legal and valid. All proposals submitted by the Board of Directors of the Company to the general

meeting of shareholders were reviewed and passed.IV. Implementation of and changes in arrangements of differentiated voting rights during the

reporting period

□ Applicable √ N/A

V. Governance of red-chip structure companies

□ Applicable √ N/A

51 / 304Appotronics Corporation Limited Annual Report 2024

VI. Directors supervisors and senior officers

(I) Changes in shareholding and remunerations of current directors supervisors senior officers and key technical staff and the former directors

supervisors senior officers and key technical staff who left the post during the reporting period

√ Applicable □ N/A

Unit: Share

Total Whether or

Number remuneration not receive

of shares Number (inclusive of Beginning of shares tax) received any

Name Title Gender Age date of Expiry date of

held at

the held at Change in Cause of from the remuneration term of term of office beginning the end shareholding change Company office of the of the during the

from any

year year reporting affiliate of period (in

RMB 0’000) the Company

Chairman July 18 2018 September 17

General December 2027

LI Yi Manager Male 54 31 2021 No Key technical 0 0 - - 320.50

staff

(Left the - August 29 2024

post)

YU March 29 September 17 No

Zhuoping Director Male 64 2022 2027 0 0 - - 18

NING

Cunzheng Director Male 66

December September 17 No

252023202700--18

CHEN Independent Male 48 August 3 September 17 No Youchun director 2021 2027 0 0 - - 18

CHEN Independent Female 41 December September 17 No Han director 25 2023 2027 0 0 - - 18

CAI Independent Male 60 November September 17 No Qiaowu director 18 2024 2027 0 0 - - 2.14

52 / 304Appotronics Corporation Limited Annual Report 2024

ZHOU Employee September September 17

Shunyuan representative Female 34 18 2024 2027 0 0 - - 17.86

No

director

Chairperson

GAO of the Board

Lijing of Female 44

July 18 September 17 No

2018202700--117.50

Supervisors

WANG Supervisor Female 44 September September 17 No Maoying 18 2024 2027 0 0 - - 20.71

ZHOU Employee

Jianbo representative Male 45

September September 17 0 0 - - 30.36 No

supervisor 18 2024 2027

Financial August 3 September 17

Director 2021 2027

WANG Employee Female 42 128124 178124 50000 Share No Yingxia representative July 15 September 18 incentive 73.62

director (Left 2021 2024

the post)

CHEN Board Female 34 April 29 September 17 Yasha Secretary 2022 2027 93750 93750 - - 54.55

No

YU Xin Key technical Share No staff Male 44 - - 290752 390752 100000 incentive -

HU Fei Key technical staff Male 44 - - 265316 317816 52500

Share

incentive -

WANG Key technical Male 47 August 23 Share Zeqin staff 2021 - 229752 282252 52500 incentive -

GUO Key technical Share No

Zuqiang staff Male 34 - - 215052 267552 52500 incentive -

ZHANG Director (Left August 3 September 18

Wei the post) Male 49 2021 2024 0 0 - - -

Independent

LIANG director Male 43 December November 18 No Huaquan (Left the 25 2023 2024 0 0 - - 15.86

post)

SUN Supervisor Male 43 August 3 September 18 3000 3000 - - 45.18

53 / 304Appotronics Corporation Limited Annual Report 2024

Hongdeng (Left the 2021 2024

post)

Employee

WANG representative

Yanyun supervisor Female 47

July 18 September 18

2018202400--26.35

No

(Left the

post)

Equity

incentive

WANG Key technical and

Lin staff (Left the Male 43 - June 28 2024 240752 294252 53500 purchase -

No

post) on the

secondary

market

Total - - - - - 1466498 1827498 361000 - 796.63 -

Note:

1. As of the end of the reporting period Mr. LI Yi held shares in the Company indirectly through shareholding platforms including Appotronics Holdings Yuanshi Laser

Appotronics Daye Appotronics Hongye Jinleijing and Appotronics Chengye; Ms. WANG Yingxia Ms. GAO Lijing Ms. WANG Yanyun Mr. HU Fei Mr. YU Xin Mr.GUO Zuqiang Mr. WANG Lin et. al. held shares in the Company indirectly through the shareholding platforms Appotronics Hongye and Appotronics Daye; Mr. YU Xin

and Mr. GUO Zuqiang held shares in the Company indirectly through the shareholding platform Appotronics Daye; and Mr. WANG Lin held shares in the Company

indirectly through the shareholding platform Appotronics Hongye.

2. During the reporting period the term of office of the Company’s second Board of Directors and the second Board of Supervisors expired. The Company held the 35th

meeting of the second Board of Directors and the 26th meeting of the second Board of Supervisors on August 29 2024 and the first meeting of employee representatives in

2024 and the second extraordinary general meeting of shareholders in 2024 on September 18 2024 where the election of a new Board of Directors and Board of

Supervisors was completed smoothly.Mr. LIANG Huaquan a former director left the post as an independent director of the Company due to personal job arrangement and disclosed the (pre-tax) subsidy of

independent director he obtained from the Company from January 2024 to the date when he left the post; at the same time the Company held the 3rd meeting of the third

Board of Directors on November 1 2024 and the 3rd extraordinary general meeting of shareholders in 2024 on November 18 2024 where Mr. CAI Qiaowu was elected as

54 / 304Appotronics Corporation Limited Annual Report 2024

an independent director of the Company’s third Board of Directors and disclosed the (pre-tax) subsidy of independent director he obtained from the date of his election to

the end of the reporting period.Ms. WANG Yingxia a former employee representative director left the post as a director upon the expiration of her term of office but acted as the financial director of the

Company; Mr. SUN Hongdeng and Ms. WANG Yanyun former supervisors left the post as supervisors upon the expiration of their term of office and disclosed the total

pre-tax remunerations they obtained from the Company from January 2024 to the date when they left the post; the newly elected employee representative director Ms.ZHOU Shunyuan employee representative supervisor Mr. ZHOU Jianbo and supervisor Ms. WANG Maoying disclosed their total pre-tax remunerations received from the

Company from the start of their term of office to the end of the reporting period.

3. The Company did not disclose the remunerations received by the key technical staff not acting as directors supervisors or senior officers of the Company due to trade

secrets.Name Main work experience

LI Yi male born in June 1970 Chinese nationality holds a bachelor’s degree from Tsinghua University and a master’s degree and a doctor’s degree

from the University of Rochester. He founded the Company in October 2006. He has served as the Chairman and the General Manager of the Company

LI Yi since December 2010. In 2020 he was honored as the Person of Innovation and Entrepreneurship and Advanced Model Person for the 40th Anniversary

of Shenzhen Special Economic Zone and the “2020 Shenzhen Science and Technology Award Mayor Award”. In 2021 he was awarded the title of

“2021 Quality Development Leader” and was engaged as a “Shenzhen Advisor for Investment Promotion”.YU Zhuoping male born in January 1960 Chinese with no right of permanent residence abroad obtained a bachelor’s degree and a master’s degree in

mechanical engineering from Tongji University and a doctorate degree in automotive engineering from Tsinghua University. He is currently a

professor at Tongji University director of the National Intelligent New Energy Vehicle Collaborative Innovation Center vice chairman of the China

Society of Automotive Engineers vice chairman and director of the Expert Committee of China Hydrogen Alliance chairman of Tongji Automobile

YU Zhuoping Design and Research Institute Co. Ltd. chairman of Shanghai Intelligent New Energy Vehicle Science and Technology Innovation Function Platform

Co. Ltd. director of Shanghai Motor Vehicle Inspection Certification & Tech Innovation Center Co. Ltd. director of Appotronics Corporation

Limited non-executive director of Huazhong In-Vehicle Holdings Company Limited independent director of Huayu Automotive Systems Co. Ltd.independent director of Ningbo Shenglong Automotive Powertrain System Co. Ltd. and independent director of Jiangling Motors Co. Ltd.NING Cunzheng male born in October 1958 U.S. citizen with permanent residency in the People’s Republic of China Ph.D. in Physics from the

University of Stuttgart Germany. Mr. NING Cunzheng has been engaged in semiconductor optoelectronic device research for long and has created

many world records and leading achievements. He is one of the leaders in the field of semiconductor nano-lasers and devices in China and abroad and

the inventor of the white light laser. At present he is a Chair Professor of Shenzhen Technology University Dean of the College of Integrated Circuits

NING Cunzheng and Optoelectronic Chips doctoral advisor part-time professor at Tsinghua University and a Director of Appotronics Corporation Limited. Mr. NING

Cunzheng used to be a senior scientist at NASA’s AMES Research Center where he founded and led the Nano-optics Research Team and became the

head of the Nanotechnology Program. In 2006 he was a visiting professor at ISSP Institute of Solid State Physics University of Tokyo Japan. Since

2006 he has acted as a tenured professor in the Department of Electrical Engineering at Arizona State University and a part-time professor in the

Department of Physics Chemistry and Materials Science at the same university. In 2013 he was a visiting professor at the Technical University of

55 / 304Appotronics Corporation Limited Annual Report 2024

Berlin Germany and Tsinghua University. He was elected as a national high-end talent in 2012 and has been a permanent professor of the Department

of Electronics at Tsinghua University since 2014 and founded the International Center for Nanophotonics Research at Tsinghua University in 2018

serving as the first director. In 2016 he was honored as the Person of the Year by Scientific Chinese. In 2023 he was elected as a Class A Talent of the

Shenzhen Pengcheng Peacock Program. Mr. NING Cunzheng is a fellow of the International Institute of Electrical and Electronics Engineers a fellow

of the Optical Society of America and a member of the International Academy of Electromagnetic Sciences and the National Academy of Inventors.CHEN Youchun male born in April 1976 Chinese with no right of permanent residence abroad obtained a bachelor’s degree from Southwest

University of Political Science and Law and Northumbria University in the United Kingdom a master’s degree from Wuhan University and a doctorate

CHEN Youchun degree from Southwest University of Political Science and Law. He is currently a partner of Beijing JunZeJun (Shenzhen) Law Offices and an

independent director of Appotronics Corporation Limited an independent director of ValueHD Corporation and an independent director of Joy Wing

Mau Fruit Technologies Corporation Limited (not listed).CHEN Han female born in January 1983 Chinese with no right of permanent residence abroad doctor in management (accounting). She is currently

an associate professor and master advisor of Xiamen National Accounting Institute the director of the Institute of Management Accounting and

Financial Management of Xiamen National Accounting Institute and an independent director of Appotronics Corporation Limited an independent

director of XTC New Energy Materials (Xiamen) Co. Ltd. an independent director of Hengerda New Materials (Fujian) Co. Ltd. an independent

director of Zonergy Corporation (not listed) a member of the Management Accounting Committee of the Accounting Society of China a deputy

CHEN Han secretary general of the Accounting Society of Xiamen and a supervisor of Non-party Intellectuals Association of Xiamen. She used to be an

independent director of Tianma Microelectronics Co. Ltd. an independent director of Shanying International Holdings Co. Ltd. an independent

director of Chempartner Pharmatech Co. Ltd. an independent director of YLZ Information Technology Co. Ltd. an independent director of Xiamen

Nalong Science and Technology Co. Ltd. an independent director of Haian Rubber Group Co. Ltd. (not listed) a research assistant at Accounting

Development Center Xiamen University the executive director of Xiamen Cross-border Enterprise Accounting Institute and a visiting scholar at

Western Illinois University.CAI Qiaowu born in May 1964 Chinese with no right of residence abroad master’s degree senior engineer. He is a member of Shenzhen CPPCC the

executive chairman and secretary general of Shenzhen Association of Medical Devices a managing partner of Shenzhen Ruiguang Tongcheng

CAI Qiaowu Investment Enterprise (Limited Partnership) a director of Sino Medical-Device Technology Co. Ltd. an independent director of Lifotronic Technology Co. Ltd. and an independent director of BrosMed Medical Co. Ltd. (not listed). He used to be the material department manager

production center manager R&D center manager assistant to the general manager and manager representative at Shenzhen Anke High-tech Co. Ltd.a director of Genrui Biotech Inc. and an independent director of Aikang MedTech Co. Ltd. (not listed).ZHOU Shunyuan female born in January 1990 Chinese with no right of permanent residence abroad master’s degree non-member certified public

ZHOU accountants. She used to be an investment bank senior manager at Western Securities Co. Ltd. senior investment manager of the Strategic

Shunyuan Development Center of Konka Group the financial responsible person of a subsidiary and investment director of Konka Capital. She has been the

strategic investment responsible person of Appotronics Corporation Limited since September 2023.GAO Lijing female born in June 1980 Chinese with no right of permanent residence abroad master’s degree student at Chinese University of Hong

Kong obtained a legal professional qualification certificate through the national judicial examination. She is currently the chairperson of the

GAO Lijing supervisory board and the deputy general manager of the Intellectual Property & Standards Center of Appotronics Corporation Limited and has worked

in the South China Intellectual Property Office of Foxconn Technology Group Co. Ltd. and the Intellectual Property and Legal Affairs Center of Netac

Technology Co. Ltd.ZHOU Jianbo ZHOU Jianbo male born in February 1979 Chinese with no right of permanent residence abroad MBA of Tianjin University. He is currently the Director of the Procedure and IT Department at Appotronics Corporation Limited and used to be the manager of the information technology

56 / 304Appotronics Corporation Limited Annual Report 2024

department at BIEL Crystal information center director of Bonsen Electric Appliances Co. Ltd. and the deputy director of the procedure and

information department at Holitech Technology Co. Ltd.WANG WANG Maoying female born in June 1980 Chinese with no right of permanent residence abroad bachelor’s degree. After joining Appotronics

Maoying Corporation Limited in September 2018 she is currently the deputy administrative director and used to work at Vienna Hotels Group Shenzhen Kuang-Chi Institute of Advanced Technology TCL Multimedia etc.WANG Yingxia female born in September 1982 Chinese with no right of permanent residence abroad got the bachelor degree. She is currently the

WANG Yingxia financial director of Appotronics Corporation Limited and has successively served as the financial director and financial manager of YLX

Incorporated and the deputy director of the finance department and employee representative director of Appotronics Corporation Limited.CHEN Yasha female born in January 1990 Chinese with no right of permanent residence abroad obtained the master’s degree in finance and the

CHEN Yasha qualification certificate of board secretary of the science and technology innovation board and the qualification certificate of board secretary of the new third board. She joined the Company’s board office in September 2018 and is currently the secretary of the Board of Directors of Appotronics

Corporation Limited.YU Xin male born in February 1980 Chinese with no right of permanent residence abroad received a doctorate from Tsinghua University. He is

currently a key technical staffer and vice president of Appotronics Corporation Limited and has successively served as a senior software engineer at

YU Xin Schlumberger Technologies Co. Ltd. a senior researcher at Shenzhen Zhongguang Industrial Technology Research Institute and a senior researcher

the general manager of the Cinema Solutions Business Unit and the general manager of the Innovation Center and Cinema Business Division of

Appotronics Corporation Limited.HU Fei male born in March 1980 Chinese with no right of permanent residence abroad received bachelor’s master’s and doctoral degrees from

HU Fei Tsinghua University and master’s degree from Rensselaer Polytechnic Institute. He is currently a key technical staffer of Appotronics Corporation Limited. and has successively served as a software engineer of Optical Research Associates the vice president of research and development of YLX

Incorporated and Appotronics Corporation Limited and the chief technology officer and deputy general manager of Appotronics Corporation Limited.WANG Zeqin male born in December 1977 Chinese with no right of permanent residence abroad obtained a bachelor’s degree from Jilin University

WANG Zeqin majoring in optoelectronic technology. He is currently a key technical staffer of Appotronics Corporation Limited and has successively served as an R&D engineer and an R&D expert of O-Net Information Technology (Shenzhen) Co. Ltd. a researcher of YLX Incorporated the R&D director of

R&D center the person in charge of core component R&D center and complete machine R&D center of Appotronics Corporation Limited.GUO Zuqiang male born in April 1990 Chinese with no right of permanent residence abroad received a master’s degree from Tsinghua University.GUO Zuqiang He is currently a key technical staffer of Appotronics Corporation Limited and has successively served as an optical engineer of YLX Incorporated and

the R&D manager of Appotronics Corporation Limited.Other information

□ Applicable √ N/A

(II) Posts held by current directors supervisors and senior officers and the former directors supervisors and senior officers who left the post during the

reporting period

1. Posts held at corporate shareholders of the Company

√ Applicable □ N/A

57 / 304Appotronics Corporation Limited Annual Report 2024

Name Corporate shareholder Posts held at corporate Beginning date of Expiry date of shareholder term of office term of office

Shenzhen Appotronics Holdings Limited Executive Director January 2014 -

Shenzhen Appotronics Daye Investment Partnership (LP) Representative of Managing Partner October 2016 -

Shenzhen Appotronics Hongye Investment Partnership Representative of Managing

(LP) Partner December 2015 -

LI Yi Shenzhen Jinleijing Investment Limited Partnership (LP) Representative of Managing Partner October 2016 -

Shenzhen Yuanshi Laser Industrial Investment Consulting Representative of Managing

Partnership (LP) Partner June 2016 -

Shenzhen Appotronics Chengye Consulting Partnership Representative of Managing

(LP) Partner July 2017 -

Blackpine Investment Corp. Limited Director September 2018 -

Explanation

about the posts

held at corporate None

shareholders of

the Company

2. Posts held at other entities

√ Applicable □ N/A

Beginning Expiry date

Name Other entity Posts held at other entity date of term of of term of

office office

YLX Incorporated Chairman January 2007 -

Shenzhen Qingda Yifeng Investment Consulting

Partnership (LP) Managing Partner October 2016

-

LI Yi Shenzhen Appotronics Deye Consulting Partnership (LP) Representative of Managing Partner May 2018

-

Shenzhen Appotronics Optoelectronic Technology Executive Director General Manager and Legal -

Development Co. Ltd. Representative October 2017

YLX (Hong Kong) Limited Director June 2008 -

58 / 304Appotronics Corporation Limited Annual Report 2024

APEX Fund Managed Limited Director November - 2013

Long Pine Investment Ltd. Director June 2020 -

Atria Light Ltd. Director April 2018 -

Atria Light Hong Kong Limited Director April 2018 -

Longpines Financial Investment Ltd. Director April 2019 -

Tongji University Professor 1985 -

National Intelligent New Energy Vehicle -

Collaborative Innovation Center Director 2012

Tongji Automobile Design and Research Institute -

Co. Ltd. Chairman December 2017

Shanghai Intelligent New Energy Vehicle Science -

and Technology Innovation Function Platform Co. Chairman March 2018

YU Zhuoping Ltd.Shanghai Motor Vehicle Inspection Certification &

Tech Innovation Center Co. Ltd. Director April 2021

-

Huazhong In-Vehicle Holdings Company Limited

(6830.HK) Non-executive Director August 2019

-

Huayu Automotive Systems Co. Ltd. (600741.SH) Independent director July 2021 -

Ningbo Shenglong Automotive Powertrain System -

Co. Ltd. (603178.SH) Independent director October 2020

Jiangling Motors Co. Ltd. (000550.SZ) Independent director October 2021 -

NING Shenzhen Technology University Chair Professor Dean of the College of Integrated Circuits -

Cunzheng and Optoelectronic Chips doctoral advisor

April 2022

Tsinghua University Part-time professor January 2023 -

Beijing JunZeJun (Shenzhen) Law Offices Partner July 2004 -

CHEN ValueHD Corporation (301318.SZ) Independent director July 2020 -

Youchun Joy Wing Mau Fruit Technologies Corporation -

Limited (not listed) Independent director October 2019

Associate professor master advisor director of the -

Xiamen National Accounting Institute Institute of Management Accounting and Financial November 2014

CHEN Han Management XTC New Energy Materials (Xiamen) Co. Ltd. Independent director April 2020 - (688778.SH)

Hengerda New Materials (Fujian) Co. Ltd. Independent director October 2021 -

59 / 304Appotronics Corporation Limited Annual Report 2024

(300946.SZ)

Zonergy Corporation (not listed) Independent director December 2022 -

Management Accounting Committee of the September 2024 -

Accounting Society of China Member

Accounting Society of Xiamen Deputy secretary general February 2024 -

Non-party Intellectuals Association of Xiamen Supervisor August 2024 -

Shenzhen Association of Medical Devices Executive chairman and secretary general March 2007 -

Shenzhen Ruiguang Tongcheng Investment September -

Enterprise (Limited Partnership) Managing Partner 2015

CAI Qiaowu Sino Medical-Device Technology Co. Ltd. Director March 2007 -

Lifotronic Technology Co. Ltd. (688389.SH) Independent director November - 2020

BrosMed Medical Co. Ltd. (not listed) Independent director February 2021 -

GAO Lijing GDC Technology Limited (BVI) Director March 2024 -

WANG

Yingxia Shenzhen Tiwu Technology Co. Ltd. Supervisor January 2018

-

Explanation

about the

posts held at None

other entities

(III) Remunerations of directors supervisors senior officers and key technical staff

√ Applicable □ N/A

In RMB 0’000

Under the relevant provisions of the Articles of Association and the Company’s regulations the

remuneration of the Company’s directors shall be reviewed by the Remuneration and Appraisal

Decision-making procedure regarding the Committee of the Board of Directors and then be submitted by the Board of Directors directly to the

remunerations of directors supervisors and general meeting of shareholders for deliberation; the remuneration of supervisors shall be submitted by the

senior officers Board of Supervisors directly to the general meeting of shareholders for deliberation; and the

remuneration of senior officers shall be reviewed by the Remuneration and Appraisal Committee and

then be submitted to the Board of Directors for deliberation.Whether the director withdraws from the

discussion of the Board of Directors on the Yes

60 / 304Appotronics Corporation Limited Annual Report 2024

remuneration of such director

Specific information about the suggestions made The Company held the 1st meeting for 2025 of the Remuneration and Appraisal Committee under the third

by the Remuneration and Appraisal Committee Board of Directors on April 28 2025 to deliberate the Proposal on the Remuneration for 2024 and

or a special meeting of independent directors on Remuneration Plan for 2025 of Directors of the Company the Proposal on the Remuneration for 2024

the remuneration of directors supervisors and and Remuneration Plan for 2025 of Supervisors of the Company and the Proposal on the Remuneration

senior officers for 2024 and Remuneration Plan for 2025 of Senior Officers of the Company.For directors supervisors and senior officers who receive remuneration from the Company their

remuneration is determined in accordance with the relevant provisions of the Articles of Association and

other relevant provisions in consideration of the market industry level and personal ability and the degree

of contribution to the Company; non-independent directors who do not receive remuneration from the

Basis for determining the remunerations of Company receive directors’ allowances in accordance with the remuneration plan approved by the general

directors supervisors and senior officers meeting of shareholders; independent directors receive independent directors’ allowances in accordance

with the remuneration plan approved by the general meeting of shareholders. The Board of Directors of

the Company has a Remuneration and Appraisal Committee to conduct performance appraisal on the

directors and senior officers of the Company and to formulate and review the remuneration policies and

solutions etc.Remunerations actually paid to directors During the reporting period the remunerations actually paid to directors supervisors and senior officers

supervisors and senior officers are consistent with the relevant information disclosed by the Company.Total remunerations paid to directors

supervisors and senior officers as of the end of 796.63

the reporting period

Total remunerations paid to key technical staff as

of the end of the reporting period -

(IV) Changes in directors supervisors senior officers and key technical staff

√ Applicable □ N/A

Name Position Change Cause of change

CAI Independent As deliberated and passed at the 3

rd meeting of the third Board of Directors of the Company and the 1st

Qiaowu director Elected extraordinary general meeting of shareholders in 2024 Mr. CAI Qiaowu was elected as an independent director of the third Board of Directors of the Company.ZHOU Employee Elected As deliberated and passed at the 1

st employee representative meeting in 2024 of the Company Ms. ZHOU

Shunyuan representative Shunyuan was elected as the employee representative director of the third Board of Directors.

61 / 304Appotronics Corporation Limited Annual Report 2024

director

WANG As deliberated and passed at the 26

th meeting of the second Board of Directors of the Company and the 2nd

Maoying Supervisor Elected extraordinary general meeting of shareholders in 2024 Ms. WANG Maoying was elected as a supervisor of the third Board of Directors of the Company.ZHOU Employee st

Jianbo representative Elected

As deliberated and passed at the 1 employee representative meeting in 2024 of the Company Ms. ZHOU Jianbo

supervisor was elected as the employee representative supervisor of the third Board of Directors.LIANG Independent Left the Mr. LIANG Huaquan waived his qualifications as a candidate for the independent director of the third Board of

Huaquan director post Directors due to personal job arrangement.SUN Supervisor Left the Hongdeng post The term of office expired.WANG Employee

Yanyun representative

Left the

post The term of office expired. supervisor

Given that Mr. LI Yi chairman and general manager of the Company did not directly participate in specific

LI Yi Key technical staff Left the post R&D efforts of the Company to focus on the operation management and development strategy planning of the Company the Company no longer considers Mr. LI Yi as a key technical staffer.WANG Key technical staff Left the Resigned from the position as a key technical staffer due to personal and family reasons and no longer hold any Lin post position at the Company or its subsidiaries after the resignation.(V) Penalties imposed by the securities regulatory authorities in the past three years

□ Applicable √ N/A

(VI) Others

□ Applicable √ N/A

VII. Board meetings held during the reporting period

Session Date of meeting Resolutions

25th meeting of the second Board The meeting reviewed and passed three proposals including the Proposal on Invalidating Partial

of Directors January 16 2024 Granted but Not Vested Restricted Shares the Proposal on Vesting Criteria for the First Vesting Period in the Reserved Grant under 2021 Second Restricted Share Incentive Plan etc.

26th meeting of the second Board January 18 2024 The meeting reviewed and passed the Proposal on Investment to Establish a Wholly-owned of Directors Sub-subsidiary.

62 / 304Appotronics Corporation Limited Annual Report 2024

27th meeting of the second Board The meeting reviewed and passed the Proposal on Repurchase of Shares of the Company through a Call

of Directors January 31 2024 Auction and the Proposal on Changing the Registered Capital and Amending the Articles of Association.

28th meeting of the second Board March 11 2024 The meeting reviewed and passed the Proposal on Investment in a Wholly-owned Subsidiary and the of Directors Proposal on Investment to Establish a Wholly-owned Subsidiary by a Wholly-owned Sub-subsidiary.

29th meeting of the second Board The meeting reviewed and passed 3 proposals including the Proposal on Changing the Company’s

of Directors April 8 2024 Scope of Business and Amending the Articles of Association the Proposal on Authorizing the Management of the Company to Dispose of Partial Held-for-trading Financial Assets etc.

30th meeting of the second Board April 12 2024 The meeting reviewed and passed the Proposal on Transferring Partial Equity Interests in Subsidiary of Directors and Related-party Transaction and the Proposal on Adjusting External Investment of the Company.

31st meeting of the second Board April 17 2024 The meeting reviewed and passed the Proposal on the Company’s Second Repurchase of Shares in 2024 of Directors through a Call Auction.

32nd meeting of the second April 25 2024 The meeting reviewed and passed 20 proposals including the Full Text and Summary of the Annual Board of Directors Report 2023 and the Report on the Work of the Board of Directors for 2023.

33rd meeting of the second Board The meeting reviewed and passed 3 proposals including the Proposal on Invalidating Partial Granted

of Directors May 30 2024 but Not Vested Restricted Shares the Proposal on Vesting Criteria for the Second Vesting Period in the Initial Grant under 2022 Restricted Share Incentive Plan etc.

34th meeting of the second Board August 20 2024 The meeting reviewed and passed the Proposal on Investment to Establish a Wholly-owned of Directors Sub-subsidiary and the Proposal on Providing a Guarantee for a Wholly-owned Sub-subsidiary.

35th meeting of the second Board August 29 2024 The meeting reviewed and passed 13 proposals including the Full Text and Summary of the Semiannual of Directors Report for 2024 and the 2024 Semiannual Special Report on the Deposit and Use of Offering Proceeds.

36th meeting of the second Board August 29 2024 The meeting reviewed and passed the Proposal on Changing the Accounting Method of a Participating of Directors Company.

37th meeting of the second Board The meeting reviewed and passed the Proposal on the Company’s Third Repurchase of Shares in 2024

of Directors August 30 2024 through a Call Auction.

38th meeting of the second Board September 6 2024 The meeting reviewed and passed the Proposal on Canceling Partial Proposals of the 2

nd Extraordinary

of Directors General Meeting of Shareholders in 2024.

1st meeting of the third Board of The meeting reviewed and passed 3 proposals including the Proposal on Electing the Chairperson for

Directors September 18 2024 the Third Board of Directors of the Company the Proposal on Electing Members for Specific-purpose Committees under the Third Board of Directors of the Company etc.

2nd meeting of the third Board of

Directors October 18 2024 The meeting reviewed and passed the Third Quarter Report in 2024.

3rd meeting of the third Board of November 1 2024 The meeting reviewed and passed the Proposal on Supplementary Election of an Independent Director Directors for the Third Board of Directors and the Proposal on Holding the 3rd General Meeting of Shareholders

63 / 304Appotronics Corporation Limited Annual Report 2024

in 2024.VIII. Performance of duties by the directors

(I) Attendance by the directors of the meetings of the Board of Directors and shareholders

Attendance of

the general

Attendance of the meetings of the Board of Directors meetings of

Whether or

Director not an shareholders

Name independent

director Meetings the Meetings

Whether the General

director Meetings attended Meetings director has meetings of

should have attended in through attended by Absence been absent

attended in person communication proxy times from two shareholders

this year equipment consecutive meetings attended

LI Yi No 17 17 13 0 0 No 4

YU Zhuoping No 17 17 13 0 0 No 4

NING Cunzheng No 17 17 13 0 0 No 4

ZHOU Shunyuan No 3 3 2 0 0 No 1

CHEN Youchun Yes 17 17 13 0 0 No 4

CHEN Han Yes 17 17 13 0 0 No 4

CAI Qiaowu Yes - - - - - - -

ZHANG Wei 3

(Former director) No 14 14 14 0 0 No

WANG Yingxia No 14 14 11 0 0 No 3

64 / 304Appotronics Corporation Limited Annual Report 2024

(Former employee

representative director)

LIANG Huaquan

(Former independent Yes 17 17 13 0 0 No 4

director)

Note: After Mr. CAI Qiaowu was elected as an independent director at the 3rd extraordinary general meeting of shareholders in 2024 held on November 18 2024

the Company did not organize any meeting of the Board of Directors or the general meeting of shareholders during the reporting period.Explanation about absence from two consecutive meetings of the Board of Directors

□ Applicable √ N/A

Meetings of the Board of Directors held in the

current year 17

Where: Face-to-face meetings 0

Meeting held through communication

equipment 13

Meetings held both as face-to-face meetings and

through communication equipment 4

(II) Objections raised by directors to matters of the Company

□ Applicable √ N/A

(III) Others

□ Applicable √ N/A

IX. Specific-purpose committees under the Board of Directors

√ Applicable □ N/A

(I) Members of specific-purpose committees under the Board of Directors

Category of specific-purpose

committee Member

Strategy and ESG

Committee LI Yi (Chairperson) YU Zhuoping NING Cunzheng

65 / 304Appotronics Corporation Limited Annual Report 2024

Audit Committee CHEN Han (Chairperson) CHEN Youchun ZHOU Shunyuan

Nomination Committee CHEN Youchun (Chairperson) CAI Qiaowu LI Yi

Remuneration and Appraisal

Committee CAI Qiaowu (Chairman) CHEN Han NING Cunzheng

(II) The Strategy and ESG Committee held 10 meetings during the reporting period

Performance

Date of meeting Content of meeting Major opinions and of other suggestions

duties

January 18 2024 The meeting reviewed and passed the Proposal on Investment to Establish a Wholly-owned All proposals were None Sub-subsidiary. reviewed and passed

January 31 2024 The meeting reviewed and passed the Proposal on the Plan for Repurchasing the Company’s All proposals were None Shares through a Call Auction. reviewed and passed

March 11 2024 The meeting reviewed and passed 2 proposals including the Proposal on Investment in a All proposals were None Wholly-owned Subsidiary. reviewed and passed

April 8 2024 The meeting reviewed and passed the Proposal on Authorizing the Management of the Company All proposals were None to Dispose of Partial Held-for-trading Financial Assets. reviewed and passed

April 12 2024 The meeting reviewed and passed 2 proposals including the Proposal on Transferring Partial All proposals were None Equity Interests in Subsidiary and Related-party Transaction. reviewed and passed

April 17 2024 The meeting reviewed and passed the Proposal on the Company’s Second Repurchase of Shares All proposals were None in 2024 through a Call Auction. reviewed and passed

April 25 2024 The meeting reviewed and passed 2 proposals including the 2023 Environmental Social and All proposals were None Governance (ESG) Report. reviewed and passed

August 20 2024 The meeting reviewed and passed 2 proposals including the Proposal on Investment to Establish All proposals were None a Wholly-owned Sub-subsidiary. reviewed and passed

August 29 2024 The meeting reviewed and passed 2 proposals including the Semi-annual Assessment Report on All proposals were None the Company’s Action Plan of “Improving Quality and Efficiency to Increase Returns” in 2024. reviewed and passed

August 30 2024 The meeting reviewed and passed the Proposal on the Company’s Third Repurchase of Shares in All proposals were None 2024 through a Call Auction. reviewed and passed

(III) The Audit Committee held 9 meetings during the reporting period

Date of meeting Content of meeting Major opinions and Performance

66 / 304Appotronics Corporation Limited Annual Report 2024

suggestions of other

duties

April 7 2024 Reported affairs during the audit on the financial statements for 2023. All proposals were reviewed and passed None

April 12 2024 The meeting reviewed and passed the Proposal on Transferring Partial Equity Interests in All proposals were Subsidiary and Related-party Transaction. reviewed and passed None

April 25 2024 Reported affairs at the end of the audit on the financial statements for 2023; the meeting reviewed All proposals were and passed 13 proposals including the Final Account Report for 2023. reviewed and passed None

August 20 2024 The meeting reviewed and passed the Proposal on Providing a Guarantee for a Wholly-owned All proposals were Sub-subsidiary. reviewed and passed None

August 29 2024 The meeting reviewed and passed 7 proposals including the Full Text and Summary of the All proposals were Semiannual Report for 2024. reviewed and passed None

August 29 2024 The meeting reviewed and passed the Proposal on Changing the Accounting Method of a All proposals were Participating Company. reviewed and passed None

September 18 2024 The meeting reviewed and passed the Proposal on Engaging Senior Officers of the Company. All proposals were reviewed and passed None

October 18 2024 The meeting reviewed and passed 2 proposals including the Third Quarter Report in 2024. All proposals were reviewed and passed None

December 27 2024 Reported affairs at the planning stage of the audit on the financial statements for 2024. All proposals were reviewed and passed None

(IV) The Nomination Committee held 3 meetings during the reporting period

Performance

Date of meeting Content of meeting Major opinions and of other suggestions

duties

August 29 2024 The meeting reviewed and passed 2 proposals including the Proposal on Electing Independent Directors All proposals were None for the Third Board of Directors of the Company. reviewed and passed

September 18 2024 The meeting reviewed and passed the Proposal on Engaging Senior Officers and Securities All proposals were None Representatives of the Company. reviewed and passed

November 1 2024 The meeting reviewed and passed the Proposal on Supplementary Election of an Independent Director All proposals were None for the Third Board of Directors. reviewed and passed

67 / 304Appotronics Corporation Limited Annual Report 2024

(V) The Remuneration and Appraisal Committee held 3 meetings during the reporting period

Performance

Date of meeting Content of meeting Major opinions and of other suggestions

duties

January 16 2024 The meeting reviewed and passed 3 proposals including the Proposal on Discarding Certain All proposals were None Restricted Shares Granted but Not Vested. reviewed and passed

April 25 2024 The meeting reviewed and passed 2 proposals including the Proposal on the Remuneration for 2023 All proposals were None and Remuneration Plan for 2024 of Directors of the Company. reviewed and passed

May 30 2024 The meeting reviewed and passed 2 proposals including the Proposal on Discarding Certain All proposals were None Restricted Shares Granted but Not Vested. reviewed and passed

(VI) Specific description of objections

□ Applicable √ N/A

68 / 304Appotronics Corporation Limited Annual Report 2024

X. Risks of the Company identified by the Board of Supervisors

□ Applicable √ N/A

The Board of Supervisors raised no objections with respect to matters under supervision during the

reporting period.XI. Employees of the parent company and major subsidiaries as of the end of the reporting

period

(I) Employees

Number of active employees of the parent company 883

Number of active employees of major subsidiaries 556

Total number of active employees 1439

Number of retired employees for whom the parent

company and major subsidiaries need to pay certain 0

expenses

Profession

Category Number of employees

Production staff 473

Sales staff 267

Technology staff 505

Financial staff 34

Management staff and administrative staff 160

Total 1439

Education

Level of education Number

Master and above 186

Undergraduate 629

College or below 624

Total 1439

(II) Compensation policy

√ Applicable □ N/ADuring the reporting period we continuously implemented the principle of “efforts-baseddistribution priority of efficiency equity and sustainable development” in remuneration management

and constantly improved the remuneration and performance management system focusing on the

development strategy annual operating objectives and economic benefits of the Company with

reference to market and industry conditions.The remuneration of employees of the Company is associated with the economic benefits of the

Company and achievement of objectives for individual posts and adopts the remuneration structure of

“post-based salary competence-based grade and performance-based bonus” consisting of the basic

salary welfare subsidies performance bonuses etc. For directors supervisors and senior officers who

receive remuneration from the Company their remuneration is determined in accordance with the

relevant provisions of the Articles of Association and other relevant provisions in consideration of the

market industry level and personal ability and the degree of contribution to the Company; for

69 / 304Appotronics Corporation Limited Annual Report 2024

employees at other posts the Company determined their basic remuneration following international and

local laws and regulations with reference to market and industry conditions and post-specific duties

competence work experience etc. To motivate employees at various positions we have formulated

position-specific differentiated appraisal and incentive plans under which the performance bonus is

highly associated with the overall profits of the Company the department objectives and personal

performance.(III) Training programs

√ Applicable □ N/A

To build a barrier of technology personnel to promote our medium- and long-term strategic

objectives and to achieve dynamic matching between strategic guidance and organization capabilities

we take systematic measures to promote the reform of the talent development mechanism and

continuously improve the talent supply chain ecology system with technology guidance at the core

business empowerment as the direction and the organization evolution as the objective so as to ensure

the a spiral rising benign cycle between capital investments for talents and the demands for strategic

development.In 2024 we focused on the triangle drive model of “leading by strategy closed-loop forperformance and value creation” to build a talent development matrix with various layers and categories.We worked out key post capabilities based on the strategic map and built a development architecture

consisting of 4 dimensions - layer for technology breakthroughs layer for strategic management layer

for leadership development and layer for post capability empowerment so as to create a closed-loop

development path consisting of “training - practice - certification - promotion”.In 2025 we will continue our efforts for an in-depth dynamic calibration mechanism among

“strategy - talent - business” make use of scenario-based training measures such as strategy reasoning

sand table and business role simulation to build a digital capability support system for talentdevelopment and achieve an intelligent decision-making closed-loop consisting of “capabilityassessment - participation in study - appraisal and certification - performance improvement” so as to

ensure that the organization capability building is always ahead of the business development curve

hence building a solid ground for achieving our strategic objectives.(IV) Outsourced workers

√ Applicable □ N/A

Total man-hours of outsourced workers (hours) 131908

Total remunerations paid to outsourced

workers (RMB 0’000) 349.35

XII. Proposals for profit distribution or capitalization of the capital reserve

(I) Establishment implementation or adjustment of the cash dividend policy

√ Applicable □ N/A

70 / 304Appotronics Corporation Limited Annual Report 2024

1. Formulation of policies for cash dividends

In April 2022 the Board of Directors of the Company formulated the Plan of Returns to

Shareholders for the Next Three Years in accordance with relevant laws and regulations and the Articles

of Association which established a clear profit distribution mechanism on the basis of actively providing

returns to shareholders and achieving sustainable development of the Company.

2. Implementation of the policies for cash dividends

We held the 32nd meeting of the second Board of Directors on April 25 2024 and the 2023 annual

general meeting of shareholders on June 3 2024 where the Proposal on the Profit Distribution for 2023

was reviewed and passed. The specific plan is as follows: on the basis of the total shares on the record

date of interest distribution deducted by shares in the special securities account for repurchase by the

Company the Company proposed to distribute to all shareholders a cash dividend of RMB 0.70 (tax

inclusive) for every 10 shares leading to a total of RMB 32084193.96 (tax inclusive) for cash dividend

distribution accounting for 31.09% of the net profit attributable to shareholders of the listed company in

2023. The Company would neither capitalize its capital reserve nor grant bonus shares this year.

Due to the repurchase of shares by the Company and the vesting of shares for the second vesting

period that is granted under the 2022 incentive plan of restricted shares the actual number of shares

participating in the profit distribution got changed; therefore the Company adjusted on the principle of

maintaining the total amount of cash distribution unchanged the amount distributed for each share that

is adjusting the amount of cash dividends per share from RMB 0.07 (tax inclusive) to RMB 0.06986

(tax inclusive). We disclosed the Announcement on Implementing Interest Distribution for 2023 on July

12 2024 in which the record date for the profit distribution is July 17 2024 and the ex-dividend date is

July 18 2024. The Company’s plan of interest distribution for 2023 has been implemented.(II) Special explanation about the cash dividend policy

√ Applicable □ N/A

Whether the policy complies with the provisions of the Articles of Association or

the requirements of resolutions passed at the general meeting of shareholders √ Yes □ No

Are the distribution standards and ratios specific and clear √ Yes □ No

Are the relevant decision-making procedures and mechanism complete √ Yes □ No

Whether independent directors perform their duties and roles √ Yes □ No

Whether small- and medium-sized shareholders have sufficient opportunities to

express their opinions and requests and are their legitimate rights and interests √ Yes □ No

fully protected

(III) If the Company made a profit in the reporting period and there were profits distributable by

the parent company to the shareholders but the Company does not propose to distribute

profits in cash the Company shall explain the reason in detail as well as the usage and use

plan of the undistributed profit.□ Applicable √ N/A

71 / 304Appotronics Corporation Limited Annual Report 2024

(IV) Proposals for profit distribution and capitalization of capital reserve in the current period

√ Applicable □ N/A

In RMB

Number of bonus shares distributed per 10 shares -

Cash dividends distributed per 10 shares (inclusive of tax) 0.25

Number of shares distributed out of the capital reserve per 10 shares -

Amount of cash dividend (tax inclusive) 11420998.83

Net profit attributable to the shareholders of ordinary shares of the listed

company reported in the consolidated financial statements 27953093.89

Ratio of the cash distribution amount to the net profit attributable to the

shareholders of ordinary shares of the listed company reported in the 40.86

consolidated financial statements (%)

The amount of repurchase of shares by cash included in cash dividends 119432441.36

Total dividend amount (tax inclusive) 130853440.19

Ratio of the total distribution amount to the net profit attributable to the

shareholders of ordinary shares of the listed company reported in the 468.12

consolidated financial statements (%)

Note: The amount of repurchase of shares by cash included in cash dividends including transaction fees

such as stamp duty and transaction commissions.(V) Distribution of cash dividends in the last three accounting years

√ Applicable □ N/A

In RMB

Net profit attributable to the shareholders of ordinary shares of the listed

company reported in the consolidated financial statements for the last 27953093.89

accounting year

Retained profits in the financial statements of the parent company for the

last accounting year 771783201.44

Total distribution of cash dividends in the last three accounting years (tax

inclusive) (1) 68142285.91

Total amount repurchased and de-registered in the last three accounting

years (2) 108917776.63

Total amount of cash dividends and amount repurchased and

de-registered in the last three accounting years (3) = (1) + (2) 177060062.54

Annual average net profit of the last three accounting years (4) 83526870.41

Ratio of cash dividends in the last three accounting years (%) (5) = (3)/(4) 211.98

Total amount of R&D investments in the last three accounting years 790754029.07

Ratio of total amount of R&D investments to the total operating revenues

in the last three accounting years (%) 11.02

XIII. Share incentive plan employee stock ownership plan or other employee incentive

measures of the Company and their effect

(I) Overview of share incentives

√ Applicable □ N/A

1.Share incentive plan during the reporting period

In RMB

72 / 304Appotronics Corporation Limited Annual Report 2024

Number of Proportion of Price of

Name of plan Type of target target shares Number of Proportion of target

incentive shares (%) grantees grantees (%) shares granted

2021 Second

Restricted Type-II 19.771

Share restricted 10500000 2.30 64 4.45

Incentive Plan shares

22.771

2022

Restricted Type-II

Share restricted 10500000 2.30 107 7.44 15.271

Incentive Plan shares

Note: (1) The proportion of grantees is the ratio of grantees to the number of employees of the Company

at the end of the reporting period;

(2) The price at which the target shares are granted under the share incentive plan above has been

adjusted according to the implementation of past profit distributions.

2.Implementation progress of the share incentive during the reporting period

√ Applicable □ N/A

Unit: Share

Number Number Number of Number of

of equity of equity restricted restricted

Number of

Number restricted

incentives incentives shares that shares that Grant of equity shares

Name of granted at newly could be were price/ex incentives vested/exer

plan the granted in vested/exer vested/exer ercise cised/unloc cised/unloc price granted at cised/unlocbeginning the ked in the ked in the (RMB) the end of ked at the of the reporting the period end of the

year period reporting reporting period period period

2021

Second

Restricted 19.841

Share 5712000 - 445000 285000 22.841 4072000 285000

Incentive

Plan

2022

Restricted

Share 4255580 - 2712290 2637290 15.341 109040 2637290

Incentive

Plan

3.Completion of appraisal indicators for equity incentive and the share-based payment expenses

recognized during the reporting period

√ Applicable □ N/A

In RMB

Completion of company-level Share-based payment

Name of plan appraisal indicators during expenses recognized

the reporting period during the reporting period

2021 Restricted Share Incentive Plan Not achieved 0

73 / 304Appotronics Corporation Limited Annual Report 2024

2021 Second Restricted Share Incentive

Plan Achieved 1426021.25

2022 Restricted Share Incentive Plan Achieved 1103696.65

Total - 2529717.90

(II) Incentives already disclosed in interim announcements about which no new information is

available

√ Applicable □ N/A

Summary Reference

The Company held the 25th meeting of the second Board of

Directors and the 23rd meeting of the second Board of

Supervisors on January 16 2024 where the Proposal on See the relevant announcements

Invalidating Partial Granted but Not Vested Restricted Shares disclosed by the Company on the

the Proposal on Vesting Criteria for the First Vesting Period in website of the Shanghai Stock

the Reserved Grant under 2021 Second Restricted Share Exchange (www.sse.com.cn) on

Incentive Plan and the Proposal on Vesting Criteria for the First January 17 2024 for details.Vesting Period in the Reserved Grant under 2022 Restricted

Share Incentive Plan were reviewed and passed.The Company held the 33rd meeting of the second Board of

Directors and the 25th meeting of the second Board of See the relevant announcements

Supervisors on May 30 2024 where the Proposal on disclosed by the Company on the

Invalidating Partial Granted but Not Vested Restricted Shares website of the Shanghai Stock

and the Proposal on Vesting Criteria for the Second Vesting Exchange (www.sse.com.cn) on June 1

Period in the Initial Grant under 2022 Restricted Share Incentive 2024 for details.Plan were reviewed and passed.The Company held the 35th meeting of the second Board of See the relevant announcements

Directors and the 26th meeting of the second Board of disclosed by the Company on the

Supervisors on August 29 2024 where several proposals website of the Shanghai Stock

including the Proposal on Adjustment to the Grant Price of Exchange (www.sse.com.cn) on August

Restricted Share Incentive Plan were reviewed and passed. 31 2024 for details.Other information

□ Applicable √ N/A

Employee stock ownership plan

□ Applicable √ N/A

Other incentives

□ Applicable √ N/A

(III) Share incentives granted to directors senior officers and key technical staff during the

reporting period

1.Share options

□ Applicable √ N/A

2.Type-I restricted shares

□ Applicable √ N/A

3.Type-II restricted shares

√ Applicable □ N/A

Unit: Share

74 / 304Appotronics Corporation Limited Annual Report 2024

Number Number

of Number Number

restricted of of

Number of

of restricted Market

shares restricted Grant restricted shares restricted shares

price as

already shares price of shares already of the

Name Title granted granted restricted that end of

as at the during shares could be

actually granted

vested in vested in as of the

the

beginning the (RMB) the end of reporting

of the reporting the reporting reporting the

period

reporting period period reporting (RMB)

period period period

WANG Financial

Yingxia Director 470560 - - 50000 50000 470560 14.79

CHEN Board

Yasha Secretary 432750 - - 75000 0 432750 14.79

YU Xin Key technical staff 1070000 - - 200000 100000 1070000 14.79

HU Fei Key technical staff 540000 - - 52500 52500 540000 14.79

WANG Key technical

Zeqin staff 632000 - - 52500 52500 632000 14.79

GUO Key technical

Zuqiang staff 626000 - - 52500 52500 626000 14.79

Total - 3771310 - - 482500 307500 3771310 -

(IV) Performance assessment mechanism for senior officers and the establishment and

implementation of incentive mechanism for senior officers during the reporting period

√ Applicable □ N/A

The Board of Directors of the Company has a Remuneration and Appraisal Committee to conduct

performance appraisal on the directors and senior officers of the Company and to formulate and review

the remuneration policies and solutions etc. The Company has established and continuously improved

the employee performance appraisal system and remuneration system under which the employee

appraisal and incentive programs specific to different posts levels and duties were formulated

according to the category of posts so as to motivate the employees at different posts. During the

reporting period all the senior officers of the Company performed their duties diligently in accordance

with relevant provisions. The remuneration of senior officers consisted of the basic salary and incentive

bonuses which are subject to the review and approval of the Board of Directors. In addition to further

improve the Company’s long-lasting incentive mechanism the Company has released several restricted

share incentive plans to safeguard the achievement of the Company’s development strategy and

operating objectives.XIV. Measures and implementation for building internal control regulations during the

reporting period

√ Applicable □ N/A

1. Efforts of internal control

75 / 304Appotronics Corporation Limited Annual Report 2024

During the reporting period the Company identified risks in the business processes found out the

root causes of risks and promoted closed-loop rectification for issues with risks based on the in-depth

understanding of the business logic the objectives of business process designing and the verification of

actual business implementation from multiple perspectives with reference to the end-to-end business

process audit performed according to the priority of the Company’s operating businesses in accordance

with the Basic Standard for Internal Controls of Enterprises and the relevant guidelines thereof and

regulatory requirements on internal control. The recycling audit and assessment helped to continuously

improve the awareness of business personnel for internal control and to encourage business units to

voluntarily identify risks in and make improvement for processes. Meanwhile we promoted efforts for

advocating the integrity culture and building a system for preventing corruption so as to create the

environment of good faith for the operation of the Company. Under the leadership of the Audit

Committee of the Board of Directors we conducted internal audit efforts independently in accordance

with law enhanced the strength of assessment and supervision of our internal audit over the internal

control of the Company hence improve the level of internal control of the Company as a whole and

promote the achievement of objectives for internal control.

2. Supervision and assessment in internal control

During the reporting period we organized the assessment on internal control for 2024 based on the

Company’s internal control system and the regulations on the method of assessment of internal control.Based on the identification of major defects in the internal control of the Company the Company had no

material and important defects in internal control for financial reporting and non-financial reporting. The

Board of Directors of the Company considered that the Company had implemented the requirements of

the corporate internal control system and relevant regulations and the internal control for financial

reporting and non-financial reporting was effective in all material aspects. For the specific content see

the Report on the Assessment of Internal Control for 2024 released on the website of the Shanghai Stock

Exchange (www.sse.com.cn) on April 30 2025.Explanation about material defects in internal controls during the reporting period

□ Applicable √ N/A

XV. Management and control over subsidiaries during the reporting period

√ Applicable □ N/A

The Company conducted internal management of the stable operation of subsidiaries in accordance

with the laws and regulations the Articles of Association the Internal Control Management Regulations

and other provisions for which the internal audit has covered the supervision and risk assessment of the

truthfulness and integrity in aspects of compliance assets safety financial reporting and relevant

information thereof; moreover the Company conducted ongoing participation to optimize and adapt

business processes with reference to actual business scenarios so as to promote the standardized and

efficient business operation. During the reporting period all subsidiaries of the Company operated as

76 / 304Appotronics Corporation Limited Annual Report 2024

normal without concealing matters to be disclosed or material defects or omissions that affect the

operation and development of the Company which were under effective control.XVI. Explanation about the auditor’s report on internal controls

√ Applicable □ N/A

For the specific content see the Auditor’s Report on Internal Controls for 2024 released on the

website of the Shanghai Stock Exchange (www.sse.com.cn) on April 30 2025.Whether an auditor’s report on internal controls has been disclosed: Yes

Opinions in the auditor’s report on internal controls: Standard unqualified opinion

XVII. Rectification of issues detected during the self-inspection of governance of the listed

company

None

XVIII. Others

□ Applicable √ N/A

77 / 304Appotronics Corporation Limited Annual Report 2024

Section V. Environment Social Responsibility and Other Corporate

Governance

I. Statement of the Board of Directors on ESG

Since its listing in July 2019 the Company has voluntarily released independent ESG-related

reports (including social responsibility reports) for six consecutive years to continuously improve the

transparency in information disclosure. During the reporting period we maintained the ESG A rating

assigned by Wind and won multiple honors including the “Top 100 of ESG Golden Bull Award” from

China Securities Journal the “ESG Golden Morning Light Award” from Securities Market Weekly on

Stocks and the “2024 ESG Innovation Practice Case Award in Annual Golden List” from Snowball.Adhering to the idea of innovation-driven ESG management we have established a management

architecture featuring a complete structure and clear hierarchies. The chairman as the first responsible

person coordinates and supervises ESG efforts in all aspects; the Board of Directors incorporates ESG

into the governance system and regularly reviews the implementation. The Strategy and ESG Committee

under the Board of Directors focuses on long-term planning and major decision-making and provides

strategic guidance; the Sustainable Development Department is responsible for internal training and

coordination. The ESG working groups selected by individual business divisions functional departments

and subsidiaries actively promote ESG efforts within their departments and regularly collect information

about implementation to ensure the implementation of the ESG ideas at the grassroots level and

throughout the entire development process of the Company.During the reporting period the specific ESG efforts of the Company include the following:

1. Embraced AI transformation and strengthened R&D innovation

Insisting on corporate development based on technologies we actively embraced AI transformation

by continuously increasing R&D investments in AI technologies and promoting innovative applications

of AI technologies in the semiconductor laser field. We released an independently developed ultra-small

low-cost full-color light engine solution for AR glasses which can enrich application scenarios in

combination with AI technologies and assist partners in accelerating the pace of releasing products to the

market. Meanwhile we have overcome the difficulty of projection commissioning on complex

projection surfaces and independently developed the solution of “projection + AI” technologies so that

projectors can be put into use upon power-on and can automatically collect data about and adapt to

complex building surfaces thereby reducing installation and commissioning costs. It will be widely used

in fields like cultural tourism night lighting stage art and exhibitions. In addition we have developed

an intelligent system with access to AI large models to effectively improve the work efficiency of

employees.During the reporting period we achieved obvious results in R&D and innovation: firstly the

automotive optics business contributed the revenue of RMB 638 million in the first year of mass

production the installation of the automobile-grade projection giant screen system increased

78 / 304Appotronics Corporation Limited Annual Report 2024

significantly and the full-color outdoor laser projection headlights were put into mass production

together with vehicles; secondly we released the VLED LED cinema screens with a total of 34 LED

screens installed and used in 30 cities holding a leading position in the industry in terms of the market

share of new screens.During the reporting period we made R&D investments of RMB 248 million accounting for 10.24%

of the total revenue of the Company. As of December 31 2024 we had a total of 2993 patents filed and

granted including 2287 patents granted throughout the world including 1189 patents for invention.

2. Strengthened corporate governance and ensured scientific decision-making

We operate in strict compliance with the Company Law of the People’s Republic of China the

Securities Law of the People’s Republic of China and other laws regulations and regulatory

requirements. The Board of Directors of the Company is the standing decision-making body and has set

up four committees namely the Audit Committee the Strategy and ESG Committee the Remuneration

and Appraisal Committee and the Nomination Committee. We have built a governance structureconsisting of the “the general meeting of shareholders the Board of Directors the Board of Supervisorsand the management” that are provided with a clear division of duties and cooperate properly to

optimize the operating mechanism and improve governance effects.In 2024 we completed the election of both the Board of Directors and Board of Supervisors and

engaged senior officers in accordance with law where talents from multiple fields were engaged as

independent directors hence promoting the expansion of the Company to diversified business fields. At

present the third Board of Directors has 7 directors including 3 independent directors and 1 employee

representative director to ensure the exercise of rights performance of duties and scientific

decision-making by the Board of Directors. The third Board of Supervisors of the Company consists of 3

supervisors including 1 employee representative supervisor. The composition of the Board of

Supervisors and the qualifications of the members thereof comply with the requirements of laws and

regulations to ensure professional expertise and practical experience.In 2024 we held 4 general meetings of shareholders 17 meetings of the Board of Directors 6

meetings of the Board of Supervisors 25 meetings of specific-purpose committees 3 special meetings of

independent directors and 1 meeting of employee representatives which reviewed matters concerning

the regular reports profit distribution repurchase and de-registration of shares election upon expiration

of term of office improved the governance system improved the internal control system enhanced the

operating level and quality and ensured fair and scientific decision-making.

3. Responded to climate change and adhered to green development

In order to respond to the risks and opportunities arising from climate change with reference to the

framework of the Task Force on Climate-related Financial Disclosures (TCFD) we took the initiative to

identify and assess the risks caused by climate change analyzed the impact on key links in the upstream

and downstream of the value chain and formulated corresponding response measures based on such

efforts. Thanks to the high light efficiency energy-saving and environmental protection characteristics

of laser light sources we made continuous efforts to develop green technologies to help customers save

79 / 304Appotronics Corporation Limited Annual Report 2024

energy and reduce emissions. For example our ALPD laser light source cinema projection solution

with a total of about 379 million operating hours in China saved about 682 million kWh of electricity

and reduced carbon dioxide emissions by about 0.5868 million tons.With respect to our headquarters building that was put into use officially we were committed to

constructing a green building that can withstand the risks caused by climate change. The building has

passed the bronze certification of the Shenzhen Green Building Standard and was designed with a

sponge city system. With the total runoff control rate of 73.44% and the annual runoff pollution

reduction rate of 58.75% it meets the requirements in the Special Plan for Sponge City in Nanshan

District Shenzhen and the construction land planning permit. Thanks to the landscaping area of 199.88

square meters and the forest and grass vegetation recovery rate of 100% it can effectively prevent and

control soil erosion reduce operating risks and promote the long-term stable development of the

Company.

4. Adhered to the people-oriented principle and contributed to the social value

Always adhering to the core idea of “people-oriented” we spared no effort in building an equal

open and fair working environment and development platform. During the reporting period the

Company had a total of 1439 employees including 498 female employees accounting for 34.61% and

employees of minority ethnic groups accounted for 9.80%. In terms of employee care we continuously

optimized the salary and welfare system established diversified outstanding recognition honors and

made use of abundant holiday benefits and wonderful club activities to enhance the sense of belonging

and cohesion of employees. In terms of employee development we made great efforts to build a unique

training system architecture to facilitate organizational development promote personal growth and

accumulate organizational capabilities. During the reporting period the total training hours of employees

at the parent company amounted to 16824 hours indicating an average of about 22.21 hours for each

employee.We adhered to the concept of “technology for good” by giving full play to our advantages in

technologies resources and platforms and conducting active acts in the three key areas of popular

science education social welfare and biodiversity protection hence facilitating social development. In

terms of popular science education we used exhibition halls as an important carrier to actively carry out

free popular science education activities hence disseminating knowledge about semiconductor laser

technologies to visitors from all over China especially juveniles in an easy-to-understand way. During

the reporting period our exhibition halls received 8812 visitors in 341 batches including 944 juvenile

visitors in 39 batches free of charge. In terms of international exchanges and public welfare cooperation

we received a delegation led by Ms. Irina Bokova former Director-General of UNESCO and donated

projectors to the Portuguese Volunteer Alliance (CPV) which demonstrated our international vision and

public welfare responsibilities.For more details on our specific ESG efforts see the 2024 Environmental Social and Governance

(ESG) Report disclosed on the website of the Shanghai Stock Exchange (www.sse.com.cn).

80 / 304Appotronics Corporation Limited Annual Report 2024

II. Environment

Whether mechanisms related to environmental

protection have been established Yes

Investment in environmental protection funds

during the reporting period (unit: RMB 0’000) 23.36

(I) Whether the Company is a major polluter identified by the environmental protection

authority

□ Yes √ No

During the reporting period the Company had no production or operating entity included in the list of

major polluters identified by the environmental protection authority.(II) Administrative penalties imposed due to environmental issues during the reporting period

During the reporting period the Company experienced no administrative penalty imposed due to

environmental issues.(III) Information on resource and energy consumption and emissions

√ Applicable □ N/A

As a leading global supplier of laser core components we have original technologies and core

patents; based on the ALPD semiconductor laser light source technologies and architectures we have

applied our core components in various scenarios. Given the characteristics of high light efficiency

energy saving and environmental protection of laser light sources our production qualifies as a low

energy consumption mode.In daily production and operation the resources we consume mainly include electricity and water

and our emissions mainly include waste gas waste water and solid waste. During the reporting period

we engaged a qualified third-party testing institution to conduct testing and the results showed that our

emission of waste water waste gas and solid waste complied with the requirements of national and local

laws and regulations.

1. Greenhouse gas emission

√ Applicable □ N/A

Within the organizational boundary of the Baoan factory we engaged a third-party institution to

inspect the greenhouse gas emissions in 2023 in accordance with ISO 14064-1:2018 and ISO

14064-3:2019 standards. The results showed the emission of 264.43 tons of carbon dioxide equivalent in

scope 1 and 2939.37 tons of carbon dioxide equivalent in scope 2. The organizational boundary has

changed as our factory and headquarters moved to a new address and new smart production equipment

was acquired. Therefore we plan to examine the emission of greenhouse gas with 2025 as the new

benchmark year.

2. Energy and resource consumption

√ Applicable □ N/A

Always holding energy management and environmental protection as the foundation for the

long-term development of the Company we are committed to building an efficient and sustainable

81 / 304Appotronics Corporation Limited Annual Report 2024

operating environment continuously optimizing production and operation processes by using advanced

energy-saving technologies and actively promoting waste recycling and resource recycling to reduce the

impact of our production on the environment. To achieve efficient energy management we made

continuous efforts to establish and improve the energy management system and passed the ISO50001

certification in 2024. We insisted on the idea of energy conservation emission reduction and energy

efficiency improvement by incorporating energy management into daily production management so as

to achieve the objectives of energy conservation and reduction in energy consumption in a planned and

orderly manner.

3. Emission of wastes and pollutants

√ Applicable □ N/A

* Waste water treatment

The domestic waste water from the office of the Company was treated uniformly by the office

building and the property management company of the industrial park which was discharged into the

municipal sewage pipeline only after reaching the relevant standard through pre-treatment. During the

reporting period a third-party testing institution conducted a test on the waste water from the Company’s

production activities in accordance with the Discharge Limits of Water Pollutants a local standard of

Guangdong Province and the results indicated that the waste water discharge complied with the

discharge standard.* Waste gas treatment

Our production and operation activities generate few waste gas mainly including tin-containing

waste gas and non-methane total hydrocarbons. We treated waste gas by UV photolysis activated carbon

adsorption air purification equipment and other means. According to the inspection conducted in

accordance with the Limit Values of Emission Standard for Air Pollutants (level 2 standards of

DB44/27-2001) the concentration of the waste gas emission generated in our production and operation

activities complied with local environmental protection standards.* Disposal of solid waste

Our solid waste was classified into three categories: recyclable non-recyclable and hazardous

wastes which were collected separately and transferred to the renewable resources company for

treatment in accordance with standards. We check the qualifications of the renewable resource company

every year and enter into a recycling contract with such company. Meanwhile we pay management fees

to the property management office every month to ensure waste handling in compliance with

regulations without affecting the environment.* Noise treatment

Our production activities generate relatively small noises. In March 2024 a third-party testing

institution conducted a test on our production sites in accordance with the Emission Standard for

Industrial Enterprises Noise at Boundary (GB12348-2008) and the results showed that the noise

emissions met the standards.

82 / 304Appotronics Corporation Limited Annual Report 2024

4. Management regulations of the Company for environmental protection

√ Applicable □ N/A

We always comply with national provincial municipal and regional environmental laws and

regulations strictly and have formulated and implemented a series of environmental management

regulations such as the Regulations on Environmental Operation Control and Monitoring Measurement

the Regulations on the Management of Energy Efficiency and Energy Conservation and Environmental

Protection the Regulations on the Management of Hazardous Chemicals and the Noise Management

Regulations. With these regulations we specify operating activities associated with environmental

factors and hazardous sources accurately identify the importance of various environmental factors and

ensure the environmental management efforts in a systematic and effective manner. Meanwhile we have

established a sound supervision and management mechanism to promptly detect and rectify violations

so as to guarantee the implementation of various environmental management measures. In addition we

have professional safety personnel to carry out daily safety and environmental inspections and regularly

organize training and publicity on fire protection knowledge and have formulated a complete fire

emergency plan to build a line of defense for safety in all aspects.With respect to energy conservation and consumption reduction we conduct monthly statistical

analysis on water electricity and office paper usage and actively encourage employees to save water

and electricity and eliminate waste advocate the concept of green office to promote sustainable

development of the Company.(IV) Measures taken to reduce carbon emissions during the reporting period and their effect

Whether carbon reduction measures

are in place Yes

Reduction of CO2 equivalent emissions

(in tons) 97561 (current period)/586803 (cumulative)

Types of carbon reduction measures

(e.g. using clean energy to generate As of the end of the reporting period in a total of about 379

electricity using carbon reduction million operating hours of our light sources in China our

technologies in the production process laser projection solution saved electricity by about 682

developing and producing new million kWh and reduced carbon dioxide emissions by over

products that contribute to carbon 0.5868 million tons.reduction etc.)

Specific description

√ Applicable □ N/A

We made full use of independently developed ALPD semiconductor laser light source

technologies and maximized the energy conservation advantages of the ALPD technologies during the

R&D and design of products to break through green barriers for products. Based on multiple tests with

our ALPD laser light source cinema projection technologies among others our laser light sources can

save electricity by 1.8 kWh per hour compared with conventional xenon lamp light sources while 1

kWh of electricity generates 0.86 kg of carbon dioxide. As of the end of the reporting period in a total

of about 379 million operating hours of our light sources in China our laser projection solution saved

electricity by about 682 million kWh equivalent to reducing carbon dioxide emissions by over 0.5868

million tons.

83 / 304Appotronics Corporation Limited Annual Report 2024

(V) New technologies new products and new services for carbon emission reduction

√ Applicable □ N/A

At present laser is the brightest and purest artificial light source in the world. Moreover laser has

many advantages over conventional display technologies including the feature of eye protection

outstanding color performance display in extremely large sizes energy conservation and environmental

protection etc. We made full use of the light source advantages and technology advantages in R&D and

designing processes to integrate the ideas of environmental protection energy conservation and low

carbon so as to continuously improve the energy efficiency of our products and reduce energy

consumption.(VI) Relevant information conducive to protecting ecology preventing pollution and fulfilling

environmental responsibilities

√ Applicable □ N/A

We insist on integrating green operations in our entire work process and continuously promote

carbon reduction and digital inclusion. We have achieved online information transmission and

communication by building an information system optimizing the online approval procedure and using

electronic vouchers and invoices and other digitalization tools which reduced the use of office supplies

such as paper ink printers etc. so as to reduce the consumption of natural resources and wastes

generated hence implementing our operating idea of sustainable development and environmental

protection.In 2024 with our efforts to promote electronic invoices in all aspects paper invoices have been

completely replaced. Without printing or copy operations electronic invoices can greatly reduce paper

consumption. The digital invoices existing in electronic form without requesting physical transmission

can reduce carbon emissions caused by transportation and storage. According to statistics on the basis

of about 77000 digital invoices on average we issue every year we can save paper of a corresponding

amount and save transportation costs in hundreds of thousands.In daily operations we attach great importance to building environmental awareness take active

measures to guide employees to implement the concept of environmental protection in both work and

life and select environmentally friendly products and services first. We also promote the

implementation of the concept of environmental protection by means of a series of green office

measures such as promoting garbage classification in public areas posting signs advocating energy

conservation and promoting acts that save water electricity and paper; meanwhile we paid attention to

reducing office and life wastes and enhanced efforts for waste recycling.(VII) Measures and effects of responding to global climate change

√ Applicable □ N/A

In order to respond to the risks and opportunities arising from climate change with reference to the

framework of the Task Force on Climate-related Financial Disclosures (TCFD) we took the initiative to

identify and assess the risks caused by climate change analyzed the impact on key links in the upstream

and downstream of the value chain and formulated response measures based on such efforts. Meanwhile

84 / 304Appotronics Corporation Limited Annual Report 2024

the transformation of national policies also created many opportunities for business growth and we will

actively transform and accelerate green and low-carbon innovation striving to build new advantages in

market competition.For detailed analysis of climate risks and climate opportunities and corresponding response

measures or plans see “Chapter 3 Striving for a Green Ecology - Responding to Climate change” our

2024 Environmental Social and Governance (ESG) Report.

III. Performance of social responsibilities

(I) Social contributions of the main business and industry key indicators

The ALPD semiconductor laser light source technology we invented created a wholly new

semiconductor laser light source. Matching with multiple chip and technical routes and being suitable for

DLP LCOS and LCD technologies it achieved a breakthrough for the application of semiconductor

lasers in the display field hence becoming a mainstream technical route for the laser display industry.From the perspective of applications besides conventional fields such as cinemas dedicated display and

household applications the development of emerging industries such as smart cockpits laser headlights

AR AI and robots is expanding the application scenarios of the ALPD technologies hence promoting

the expansion of the industry.Appotronics actively responded to national strategies and promoted the implementation of key

national R&D projects to facilitate the scientific and technological innovation development in the 14th

Five-Year Plan. We participate in a wide range of industry summits forums and exhibitions to promote

the integration among industry academia and research. Based on technological innovation and resource

integration we actively participate in the formulation of industry standards; we have achieved remarkable

results in many fields and actively fulfilled the social responsibility to promote the rapid development of

the semiconductor laser industry.During the reporting period we made progress in various key national R&D projects we participatedin including the key project of “study of technical standards and applications of ultra-high definition andlarge-color gamut laser display measurement and valuation” under the “national quality infrastructuresystem” and the key project of “study of crucial technologies for ultra-high-definition LCOS space lightmodulator for laser display” under the “new display and strategic electronic materials”. Keeping in mind

the requirements of the industry safety and key project implementation of the state we made

breakthroughs in key core technologies for new applications in the display industry and created a new

innovation chain to contribute our capabilities for the independent and controllable core electronicmaterials and devices of China. At the same time we are recognized as an “Individual ChampionManufacturing Enterprise of Guangdong Province” the Industry and Information Technology Departmentof Guangdong and as a “Specialized Refined Distinctive and Innovative Small and Medium-sizedEnterprises (SMEs) of Shenzhen” by the Service Bureau for Small and Medium-sized Enterprises of

Shenzhen.

85 / 304Appotronics Corporation Limited Annual Report 2024

(II) Promoting scientific and technological innovation

As one of the first companies listed on the STAR Market we always keep technological innovation at

the core of our development considering technological innovation as the soul for us to move ahead and

incorporate technological innovation in the entire process from basic research creation of new

applications and smart production to social applications; we make continuous efforts to consolidate and

expand key core technologies empower talents throughout the industry chain maintain high R&D

investments improve the intellectual property system build capabilities for systematic innovation and

actively radiate to the entire industry. In 2024 we invested RMB 248 million in R&D efforts.During the reporting period we attached great importance to the R&D investment for AI

technologies in the hope of achieving application of AI in the field of semiconductor lasers and developed

an ultra-small full-color AR light engine solution with a volume of only 0.8cc featuring a high

cost-performance ratio low power consumption and outstanding display effects which can meet the

lightweight requirements of AR glasses. Our independently developed “projection + AI” technology can

achieve automatic high-precision integration of multiple projectors on complex surfaces and generation

of AI images automatically adaptive to the shape of the projection surface. The relevant results can be used

in cultural tourism night lighting stage art exhibitions and other application fields. Meanwhile we

actively embrace AI transformation by independently developing a smart system with access to AI large

models to improve internal efficiency. Given the mass production of nomination cooperation vehicle

models the installations of our automobile-grade projection giant screen systems increased greatly and

the full-color outdoor laser projection headlight achieved breakthroughs in application scenarios. We

released the VLED LED cinema screens of various sizes to meet diversified operating requirements of

cinemas. By now we have a total of 34 LED screens installed and used in 30 cities holding a leading

position in the industry in terms of the market share of new LED screens.(III) Compliance with science and technology ethics

N/A

(IV) Data security and privacy protection

We are fully aware that information security is the key to winning customer trust and is an important

support for the long-term development of the Company. Under the spirit of professionalism we are

committed to providing secure and reliable products and services for customers. During the reporting

period we passed the certification of the ISO 27001 information security management system again and

won the firm trust and high recognition from automotive optics customers thanks to our outstanding

capabilities in information security. During the process of research and development we always adhere to

the bottom line of information security and strictly comply with international standards to ensure the

safety and reliability at every link.Internally we actively carry out technology exploration and implementation such as multi-factor

authentication bastion hosts centralized log audit and monitoring etc. These measures effectively protect

86 / 304Appotronics Corporation Limited Annual Report 2024

our confidential information maintain data integrity prevent internal and external threats from causing

damage to the Company and enhance the reliability sustainability and reputation of our operations. We

also provide internal centralized file storage and backup services for core departments such as the finance

R&D and sales departments to prevent loss of information assets due to hacker attacks or lost employee

equipment. In addition we released client and server antivirus and encryption security audit software to

further enhance data security protection on personal computers and servers.(V) Types of public charity activities and contributions thereto

Type Number Remark

External donations

Where: Funds (RMB 0’000) - -

Value of materials (RMB 1.36 Donated commercial projectors to the 0’000) Portuguese Volunteer Confederation

1. Specific information about public charity activities

√ Applicable □ N/A

During the reporting period we donated projectors to the Portuguese Volunteer Confederation (CPV)

to support the operation of its volunteer projects. The CPV founded in 2010 has 45 federation

organizations covering 1.2 million volunteer communities in Portugal. The projectors donated were

quickly put into use upon their arrival as an efficient and multi-functional presentation tool have been

widely used in workshops and community activities becoming long-term valuable assets for local

organizations.

2. Information on consolidation and expansion of the results of poverty alleviation rural

revitalization and other specific work

□ Applicable √ N/A

Specific description

□ Applicable √ N/A

(VI) Protection of the rights and interests of shareholders and creditors

Sound transparent and balanced corporate governance is crucial for the healthy development of

the Company. Appotronics operates in strict compliance with the Company Law of the People’s

Republic of China the Securities Law of the People’s Republic of China and other laws regulations

and regulatory requirements. The Board of Directors of the Company is the standing decision-making

body and has set up four committees namely the Audit Committee the Strategy and ESG Committee

the Remuneration and Appraisal Committee and the Nomination Committee. We have built agovernance structure consisting of the “the general meeting of shareholders the Board of Directors theBoard of Supervisors and the management” that are provided with a clear division of duties and

cooperate properly to continuously optimize the operating mechanism and improve governance effects.During the reporting period we repurchased shares for a total of three times to repurchase 7.1269

million shares of the Company in the amount of RMB 119 million. Moreover we de-registered 5.8425

87 / 304Appotronics Corporation Limited Annual Report 2024

million shares under the special securities account for repurchase. Without prejudice to our daily

operation this showed our sincere attitude on the capital market to investors and enhanced investors’

confidence in holding shares of the Company.(VII) Protection of the rights and interests of employees

We adhere to the idea of “people orientation” to safeguard the rights and interests of employees in

all aspects. We have formulated sound management regulations for human resources provide employees

with competitive salaries and benefits and high-quality training opportunities and build a humanistic

working environment to improve both the work and life quality of employees. Meanwhile we

continuously improve the communication mechanism to create an equal open and fair working

atmosphere. As of the end of 2024 Appotronics had 1439 employees including 498 female employees

accounting for 34.61% and employees of minority ethnic groups accounted for 9.80% which indicated

the priority we attached to talents. During the reporting period we won multiple honors including the

title of “Best Employer 2024 - Shenzhen Best Employer” granted by Zhilian and the “Top 20 MostPromising Youth-friendly Employer Brand 2024” from Ciwei.In addition we established a trade union in 2017 elected employee representatives and set up the

meeting of employee representatives. Significant policies concerning employee benefits labor rights and

interests and personal safety etc. shall be subject to the democratic decision-making at the meeting of

employee representatives. The meeting of employee representatives not only safeguards the rights and

interests of employees but also functions as a bridge for communication between the Company and

employees so that the Company can listen to the opinions of employees hence achieving more

competitive salaries and benefits better training and a humanistic working environment. Our trade

union has set up yoga basketball badminton reading and other associations and clubs to help

employees relax and improve teamwork and work efficiency.Employee share ownership

Number of employees owning shares (persons) 150

Ratio of employees owning shares to the total

number of employees (%) 10.42%

Number of shares owned by employees (0’000

shares) 2622.088

Ratio of shares owned by employees to the total

share capital (%) 5.71%

(VIII) Protection of the rights and interests of suppliers customers and consumers

We attach great importance to building a responsible supply chain system and are committed to

promoting suppliers to strictly abide by ethical standards laws and regulations and fulfill their

environmental health and safety obligations. We pay attention to cooperation with suppliers to provide

high-quality highly reliable and sustainable products to achieve a cooperation pattern featuring mutual

benefits mutual trust and mutual assistance.

88 / 304Appotronics Corporation Limited Annual Report 2024

During the reporting period we engaged in in-depth cooperation and high-quality delivery with

leading domestic new energy vehicle manufacturers such as Seres and Geely and successfully built and

continuously improved a stable and efficient automotive supply chain. Our automotive supply chain

capabilities having passed the strict review by many domestic automobile manufacturers have reached

international standards and won continuously increasing nomination corporations which provided a

solid foundation for further market expansion of the Company.We make active measures to organize customer training activities new product trial sessions and

core partner summits and participate in industry exchanges etc. so as to disseminate detailed and

accurate professional product information to customers and provide reliable and timely technical support.With these measures we can fully meet customers’ requirements and build deep trust and close

cooperation with customers to jointly create a better future.(IX) Safeguarding product safety

Product quality is the cornerstone for an enterprise to operate in the market and a key factor to win

user trust. We are committed to always insisting on outstanding quality to stand out from competition

and achieve long-term development. During the reporting period based on our high-standard

high-quality and high-efficiency quality management ideas we passed the certifications of the ISO

9001 and IATF 16949 quality management systems again Based on these two systems we continuously

optimize quality management processes simplify procedures clarify duties and optimize resource

allocation to improve process efficiency and synergy.We have formulated internal normative documents such as the QEH Management Handbook the

Regulations on the Management of New Product Designing and Development and the Software Quality

Management Measures to provide institutional support for new product development. Meanwhile we

have established a laboratory system and quality monitoring system to achieve full-process quality

management from R&D to production hence achieving optimization at every link.Insisting on the quality culture of “zero defects” we incorporate quality monitoring into production

management at every stage including production monitoring smart aging control and visual 5S so as

to keep every product in compliance with the highest standards. Thanks to our outstanding performance

in the fields of high-end core components automotive solutions and laser cinema projectors we were

highly appraised by industry leaders and leading domestic and overseas automobile manufacturers

including Seres Geely Barco CFGC etc. Moreover we attach great importance to enhancing

employees’ quality awareness and have provided product quality training to all employees to provide a

solid talent foundation for quality management.(X) Intellectual property protection

As the original inventor of the ALPD semiconductor laser light source technology we have a deep

understanding of the importance of intellectual property rights in protecting R&D results promoting

technology advancement and maintaining our competitive advantages throughout the world.During the reporting period we were committed to achieving in-depth integration between the

regulations on the management of intellectual property rights with our production and operation and

89 / 304Appotronics Corporation Limited Annual Report 2024optimized the entire processing consisting of “search filing maintenance application and hierarchicalmanagement”. We encourage R&D personnel to put forward high-quality patent proposals and enhance

efforts for the review and search of patents and trademarks to strictly control the filing quality. Meanwhile

we implement hierarchical patent management improve the patent database promote the digitalization of

intellectual property rights and carry out electronic processes to create an efficient and accurate

management system. In addition we always pay attention to new policies and regulations on intellectual

property rights and regularly carry out early warning efforts to reduce risks associated with intellectual

property rights during the process of development.As of the end of the reporting period we had a total of 2993 patents filed and granted including

2287 patents granted throughout the world including 1189 patents for invention; in addition we

received the Excellent Award of the 25th China Patent Award.(XI) Other information about the performance of social responsibilities

√ Applicable □ N/A

During the reporting period we used exhibition halls as a carrier to actively carry out popular

science education activities hence disseminating knowledge about semiconductor lasers to visitors from

all over China especially juveniles in an easy-to-understand way. These activities not only stimulated

people’s interest in semiconductor lasers but also created a foundation for the future development of

scientific and technological innovation talents planting a seed of science and technology to take root and

grow in the hearts of more people.We have been selected as an off-school practice and education campsite (base) of the Young

Pioneers of Nanshan District Shenzhen and engaged in cooperation with many institutions schools

and projects including the Science Popularization Alliance of Nanshan District Tsinghua University

Shenzhen Senior High School Nanshan Foreign Language School study tour for Hong Kong and

Macao Youth Greater Bay Area Tibet Vocational and Technical College Huazhong University of

Science and Technology the “Nanshan Perception Tour” activity of overseas students and the Blue

Coast Community of Nanshan District to hold many science popularization theme activities for

students.During the reporting period our exhibition halls open to the public free of charge received 8812

visitors in 341 batches including 944 juvenile visitors in 39 batches free of charge.IV. Other information about corporate governance

(I) Investor relations and protection

Type Times Remark

2023 Annual Performance Briefing for the STAR

Market Semiconductor Equipment Session and the

2024 First Quarterly Performance Briefing 2024

Convene performance briefings 4 Semi-annual Performance Briefing 2024 Third

Quarterly Performance Briefing and 2024

Collective Reception Day of Listed Companies in

Shenzhen

Conduct investor relations 18 Deliver the latest information about the Company

90 / 304Appotronics Corporation Limited Annual Report 2024

management activities through new and the capital market to investors in an efficient and

media vivid manner by means of images text and videos

through the WeChat official account “Appotronics”

and the video account platform “Appotronics”

Column of investor relations on the √ Yes For details see the investor relations page on our

official website □ No official website: https://www.appotronics.com/investor_team.html

Specific information about investor relations management and investor protection

√ Applicable □ N/A

During the reporting period we enhanced communication and exchange with investors by multiple

means to build a favorable image on the capital market. We carried out over 270 investor reception

activities throughout the year including roadshows reverse roadshows online and offline strategy

meetings open days for investors etc. accessing over 550 investors. In addition we held a total of 4

performance briefings and 3 open days for investors answered over 950 IR hotline calls actively

disclosed 9 record forms of survey information and answered over 130 queries raised by investors on

our public communication platform on a regular basis.Explanation about communication with investors by other means

√ Applicable □ N/A

In recent years we have successfully entered the automotive business racetrack and actively made

use of industry exhibitions to expand channels for communication with investors. After the Shanghai

International Automobile Industry Exhibition in 2023 we participated in the Beijing International

Automotive Industry Exhibition in 2024 and attracted many institutional small and medium investors.We took the initiative to arrange the management team of investor relations to receive small- and

medium-sized shareholders and designated professional commentators to help investors directly

experience our new products and get to know the prospects of businesses.In addition in 2024 we worked with the Shanghai Stock Exchange Bosera Funds Huatai

Securities and Agricultural Bank of China and other institutions to hold multiple collective reception

activities for small- and medium-sized shareholders including visits to the exhibition hall introduction

about the Company Q&A and free exchanges so that the small- and medium-sized shareholders could

fully understand the Company and discuss on future development suggestions hence achieving

bidirectional communication between the Company and the capital market and safeguard the rights and

interests of small- and medium-sized shareholders.(II) Transparency of information disclosure

√ Applicable □ N/A

We made information disclosure in strict compliance with laws regulations and the Management

Measures for Information Disclosure to ensure true accurate complete timely and fair information.We took the initiative to release ESG reports and letters to shareholders and disclosed information about

nominations by domestic and overseas automobile manufacturers and the English version of regular

reports etc. to help investors understand the Company’s fundamentals and long-term strategies. Thanks

91 / 304Appotronics Corporation Limited Annual Report 2024

to our outstanding performance in aspects of steady improvement in governance capabilities

high-quality information disclosure and attention paid to shareholder returns for value increase during

the reporting period we won the “2023 Golden Information Disclosure Award” of the 26th Golden Bull

Award of Listed Companies and won the “Award of Best Board of Directors of Listed Companies” in

the Public Praise List of Chinese Listed Companies for four consecutive years.(III) Information about participation of institutional investors in corporate governance

√ Applicable □ N/A

We actively supported institutional investors to participate in the general meetings of shareholders

to fully exercise their right of information and voting power hence enhancing supervision over and

suggestions on the corporate governance. With in-depth knowledge about the important role of

institutional investors in improving governance capabilities we actively maintained bidirectional

communication with them promptly updated them about the Company and listened to their suggestions

to assist the management in accurate decision-making and continuously optimize corporate governance.(IV) Operation of the anti-commercial bribery and anti-corruption mechanism

√ Applicable □ N/A

In order to build a corporate environment featuring integrity we have released a series of internal

documents including the Anti-corruption Management Measures the Measures for Conflict of Interest

and the Red Line of Employee Acts etc.; meanwhile we incorporated the Integrity Agreement into

employee labor contracts. In 2024 we promoted all employees to sign integrity commitments hence

specifying the integrity obligations that must be fulfilled during their employment.In addition we provided multiple channels for whistle-blowing including our official website

partner integrity agreements holiday greeting emails the OA office platform etc. and encouraged all

partners and employees to report corruption acts. To ensure the effective implementation of

whistle-blowing a dedicated person will be designated to follow up on the reported clue through a fully

confidential process hence protecting the privacy and legal rights of the reporter in all aspects. We

strictly prohibit any form of retaliation against the whistle-blower and will impose severe punishment

upon the detection of retaliation and even transfer the case to judicial authorities upon the occurrence of

illegal acts.(V) Other information about corporate governance

□ Applicable √ N/A

92 / 304Appotronics Corporation Limited Annual Report 2024

Section VI. Significant Matters

I. Fulfillment of covenants

(I) Covenants made by the actual controller shareholders affiliates and acquirer of the Company the Company itself and other related parties during

the reporting period or the outstanding covenants made by them in the prior periods

√ Applicable □ N/A

Reason for Action

Whether Whether failure to plan if

there’s a

the

Background Covenant Date of time limit Period of covenant fulfill the failing to

of covenant Type Covenantor Content of covenant for the covenant has been covenant covenant on fulfill the fulfillment strictly

of the fulfilled time (if covenant

covenant on time applicable) on time

36 months after

Covenant by the actual See the completion of

controller regarding Prospectus for the IPO and the

Restriction restriction on the sale of the Initial

extended

on the sale shares held by him Public Offering March 22

period stated

voluntary lock-up of such of Shares and 2019 Yes below and 6 Yes

N/A N/A

of shares

Covenant shares intention to hold Listing on the

months after

related to and dispose of shares and STAR Market of

termination of

other issues the Company employment IPO with the

Company

See the

Issuer’s covenant Prospectus for

Others regarding measures the Initial March 22 No Permanent Yes N/A N/A

against fraud in IPO Public Offering 2019 of Shares and

Listing on the

93 / 304Appotronics Corporation Limited Annual Report 2024

STAR Market of

the Company

See the

Controlling shareholder Prospectus for

actual controller and their the Initial

concert parties’ covenant Public Offering March 22 of Shares and 2019 No Permanent Yes

N/A N/A

regarding measures

against fraud in IPO Listing on the STAR Market of

the Company

See the

Prospectus for

Directors supervisors and the Initial

senior officers’ covenant Public Offering March 22 N/A N/A

regarding measures of Shares and 2019 No Permanent Yes

against fraud in IPO Listing on the

STAR Market of

the Company

See the

Issuer’s covenant Prospectus for

regarding remedial the Initial

measures for diluted Public Offering March 22 of Shares and 2019 No Permanent Yes

N/A N/A

earnings in the current

period Listing on the STAR Market of

the Company

Controlling shareholder See the

actual controller and their Prospectus for

concert parties’ covenant the Initial

regarding remedial Public Offering March 22 No Permanent Yes N/A N/A

measures for diluted of Shares and 2019

earnings in the current Listing on the

period STAR Market of the Company

Directors and senior See the March 22 N/A N/A

officers’ covenant Prospectus for 2019 No Permanent Yes

94 / 304Appotronics Corporation Limited Annual Report 2024

regarding remedial the Initial

measures for diluted Public Offering

earnings in the current of Shares and

period Listing on the

STAR Market of

the Company

See the

Prospectus for

Issuer’s covenant the Initial

regarding profit Public Offering March 22 No Permanent Yes N/A N/A

distribution policy of Shares and 2019 Listing on the

STAR Market of

the Company

See the

Issuer’s covenant Prospectus for

regarding restraint the Initial

measures and liability for Public Offering March 22

compensation in the event of Shares and 2019 No Permanent Yes

N/A N/A

of failure to fulfill its Listing on the

covenants STAR Market of

the Company

Controlling shareholder See the

actual controller and their Prospectus for

concert parties’ covenant the Initial

regarding restraint Public Offering March 22 N/A N/A

measures and liability for of Shares and 2019 No Permanent Yes

compensation in the event Listing on the

of failure to fulfill their STAR Market of

covenants the Company

Directors supervisors and See the

senior officers’ covenant Prospectus for

regarding restraint the Initial March 22 No Term of office Yes N/A N/A measures and liability for Public Offering 2019

compensation in the event of Shares and

of failure to fulfill their Listing on the

95 / 304Appotronics Corporation Limited Annual Report 2024

covenants STAR Market of

the Company

See the

Controlling shareholder’s Prospectus for

covenant on avoiding the Initial

horizontal competition Public Offering March 22

and regulating and of Shares and 2019 No Permanent Yes

N/A N/A

reducing related-party Listing on the

Resolve transactions STAR Market of

horizontal the Company

competition See the

issues Actual controller’s Prospectus for

covenant on avoiding the Initial

horizontal competition Public Offering March 22

and regulating and of Shares and 2019 No Permanent Yes

N/A N/A

reducing related-party Listing on the

transactions STAR Market of

the Company

See the 2021

Second Execution

Restricted Share October period of the

Incentive Plan 25 2021 Yes equity Yes

N/A N/A

Covenant by the grantee

of share incentives (Draft) of the incentive plan

regarding information Company

Covenant disclosure documents See the 2022 Restricted Share Execution related to Others Incentive Plan May 25 Yes period of the N/A N/A share 2022 equity Yes

incentives (Draft) of the Company incentive plan

See the 2021

Company’s covenant on Second Execution

refraining from providing Restricted Share October period of the N/A N/A

financial assistance Incentive Plan 25 2021

Yes equity Yes

(Draft) of the incentive plan

Company

96 / 304Appotronics Corporation Limited Annual Report 2024

See the 2022

Restricted Share Execution

Incentive Plan May 25 Yes period of the Yes N/A N/A

(Draft) of the 2022 equity

Company incentive plan

97 / 304Appotronics Corporation Limited Annual Report 2024

(II) If the Company has made any profit forecast on its assets or projects and the reporting

period falls within the period of such profit forecast explanation about whether the goal has

been achieved and the relevant reasons

Explanation about whether the goal has been achieved and the relevant reasons

□ Reached□ Not reached√ N/A

(III) Fulfillment of performance covenant and the relevant effect on the goodwill impairment test

□ Applicable √ N/A

II. Non-operating occupation of funds by the controlling shareholder or its affiliates during the

reporting period

□ Applicable √ N/A

III. Guarantees in violation of regulations

□ Applicable √ N/A

IV. Explanation of the Board of Directors about the “modified audit opinion” issued by the

accounting firm

□ Applicable √ N/A

V. Explanation about the reasons and effect of changes in accounting policies and accounting

estimates and correction of material accounting errors

(I) Analysis of the reasons of changes in accounting policies and accounting estimates and the

relevant effect

√ Applicable □ N/AFor details see “Section X Financial Report - V.40 Changes in significant accounting policies andaccounting estimates” herein.(II) Explanation about the reasons and effect of correcting material accounting errors

□ Applicable √ N/A

(III) Communication with the former accounting firm

□ Applicable √ N/A

(IV) Approval procedure and other description

□ Applicable √ N/A

VI. Appointment and termination of appointment of the accounting firm

In RMB 0’000

Current accounting firm

Name of domestic accounting firm Pan-China Certified Public Accountants (Special

General Partnership)

98 / 304Appotronics Corporation Limited Annual Report 2024

Fee payable to domestic accounting firm 140

Audit period of domestic accounting firm 9

Name of registered accountants from the

domestic accounting firm WEI Biaowen NIU Chunjun

Total years of audit services of registered Mr. WEI Biaowen has 4 years of experience in audit

accountants from the domestic accounting services and Mr. NIU Chunjun has 5 years of

firm experience in audit services

Name Fee

Accounting firm for internal Pan-China Certified Public Accountants

control audit (Special General Partnership) 15

Sponsor Huatai United Securities Co. Ltd. -

Explanation about the appointment and termination of appointment of the accounting firm

√ Applicable □ N/A

The Company engaged Pan-China Certified Public Accountants (Special General Partnership) as

the institution for the audit of the 2024 annual financial statements and the internal control audit for

financial reports with an annual fee of RMB 1.40 million (tax inclusive).Explanation about re-appointment of the accounting firm during the audit period

□ Applicable √ N/A

Explanation about the decrease in the audit fees compared with the previous year by over 20%

(including 20%)

□ Applicable √ N/A

VII. Delisting risks

(I) Reasons causing the delisting risk warning

□ Applicable √ N/A

(II) Response measures to be taken by the Company

□ Applicable √ N/A

(III) Risk of delisting and the reason

□ Applicable √ N/A

VIII. Matters related to bankruptcy and reorganization

□ Applicable √ N/A

99 / 304Appotronics Corporation Limited Annual Report 2024

IX. Material litigations and arbitrations

√ The Company was involved in material litigations or arbitrations during the current year

□ The Company was not involved in material litigations or arbitrations during the current year

(I) Litigations and arbitrations already disclosed in interim announcements about which no new information is available

√ Applicable □ N/A

Summary and type of case Reference

I. 01-22-0001-2735 In March 2022 GDC Cayman and GDC BVI initiated the arbitration

against the Company and its wholly-owned subsidiary Appotronics HK in respect of the dispute See the Announcement on Arbitration with GDC Cayman and

over the implementation of the Settlement Agreement. Later the Company raised GDC BVI (No. 2022-028) disclosed by the Company on the

counter-claims against GDC Cayman GDC BVI Mr. ZHANG Wanneng and his management website of the Shanghai Stock Exchange (www.sse.com.cn) on

team on the ground that GDC Cayman GDC BVI Mr. ZHANG Wanneng and his management April 2 2022 for details.team violated the provisions of the Shareholders’ Agreement and the Settlement Agreement.(II) Litigations and arbitrations that have not been disclosed in interim announcements or about which there’s new information available

√ Applicable □ N/A

In RMB 0’000

During the reporting period:

Whether

any

Party provision is Result and Enforcement of

Plaintiff/claimant Defendant/respondent jointly and Type of Amount Status severally litigation/arbitration Background claimed recognized effect judgment/award

liable and the

amount

In the case ((2021) The court

Appotronics Delta Electronics Inc. - Infringement on patent

Yue 73 Zhi Min

Corporation Limited for invention Chu No. 1860) 1000.00

No Case closed approved to -

against a withdraw

maliciously

100 / 304Appotronics Corporation Limited Annual Report 2024

initiated the case

intellectual

property litigation

about a dispute

over liabilities for

damages the

plaintiff held that

the defendant

Delta Electronics

Inc. initiated an

intellectual

property litigation

maliciously

against the

plaintiff hence

infringed the

rights and interests

of the plaintiff.HKIAC/A24154

arbitration case of

contract dispute in

which the claimant No less Received

Espedeo Holdings Appotronics Hong Kong held that the

Limited Limited - Contract dispute respondent

than USD No the notice of In trial -

violated the 3.1671

relevant agreement million

arbitration

and resulted in

economic losses to

the claimant.Note: Espedeo Holdings Limited is a wholly-owned subsidiary of GDC BVI.(III) Other information

√ Applicable □ N/A

101 / 304Appotronics Corporation Limited Annual Report 2024

During the reporting period our patents are involved in 5 cases of invalidation petitions. The details are as follows: (1) as of the end of the reporting period 2

cases are under trial at China National Intellectual Property Administration (CNIPA); (2) during the reporting period 1 case has been tried by CNIPA where

CNIPA declared partial claims of the patent as invalid and maintained the patent rights on the basis of the remaining valid claims; (3) during the reporting period 1

case has been tried by CNIPA where CNIPA decided to maintain the patent rights; and (4) during the reporting period 1 invalidation petition was withdrawn by the

petitioner.

102 / 304Appotronics Corporation Limited Annual Report 2024

X. Penalties imposed on the listed company and its directors supervisors senior officers

controlling shareholder actual controller for suspected violation of laws and regulations and

rectification of the relevant violations

□ Applicable √ N/A

XI. Credit standing of the Company and its controlling shareholder and actual controller during

the reporting period

□ Applicable √ N/A

XII. Material related-party transactions

(I) Related-party transactions in connection with day-to-day operation

1. Matters already disclosed in interim announcements about which no new information is

available

□ Applicable √ N/A

2. Matters already disclosed in interim announcements about which there’s new information

available

√ Applicable □ N/A

In RMB 0’000

Categor

y of Expected Actually amount incurred Reason for the great related-

party Related party for the amount in

difference between the

current the current expected amount and the transact period period actual amount ion

China Film Equipment Co. Ltd. and its

Provisio affiliates 4000.00 2585.50 Change in market demands

n of Xiaomi Communications Co. Ltd. and its

goods affiliates 20000.00 15627.87 Change in market demands

leases

and YLX Incorporated and its affiliates 900.00 159.73 Change in market demands

services Beijing Donview Education Technology Co.Ltd. and its affiliates - 4 . 7 1 N/A to a

related GDC and its affiliates - 28.98 N/A

party Subtotal 24900.00 18406.79 -

China Film Equipment Co. Ltd. and its The demands decreased

Purchase affiliates

2000.00 61.43 due to changes in market

demands

of goods

Xiaomi Communications Co. Ltd. and its Change in the business and raw

affiliates 2000.00 1270.62 structure and decline in materials demands

from a

related YLX Incorporated and its affiliates 400.00 265.49 N/A

party GDC and its affiliates - 3.36 N/A

Subtotal 4400.00 1600.90 -

Receipt China Film Equipment Co. Ltd. and its 3000.00 2015.59 Change in market demands

103 / 304Appotronics Corporation Limited Annual Report 2024

of labor affiliates

services

from a Xiaomi Communications Co. Ltd. and its affiliates 20.00 - N/A related

party YLX Incorporated and its affiliates 100.00 43.27 N/A

GDC and its affiliates - 1.32 N/A

Subtotal 3120.00 2060.18 -

Shenzhen Appotronics Holdings Limited - 254.44 N/A

Housing

property China Film Equipment Co. Ltd. and its

lease affiliates

350.00 246.89 N/A

Subtotal 350.00 501.33 -

Total 32770.00 22569.20

3. Matters that have not been disclosed in any interim announcement

□ Applicable √ N/A

(II) Related-party transactions involving acquisition or sale of assets or equities

1. Matters already disclosed in interim announcements about which no new information is

available

□ Applicable √ N/A

2. Matters already disclosed in interim announcements about which there’s new information

available

√ Applicable □ N/A

(1) In April 2024 to reduce the uncertainty that may be caused by an investee company to the

development of the Company and further concentrate the Company’s resources on the development of

growth businesses the Company intended to transfer the 51% equity interests it held in the

wholly-owned subsidiary Appotronics HK to Long Pine Investment Inc. an enterprise under the

indirect control of the actual controller of the Company. After this transaction was completed

Appotronics HK was no longer included in the scope of the Company’s consolidated statements. See the

Announcement on the Transfer of Partial Equities in Subsidiary and Related-party Transactions (No.

2024-021) disclosed by the Company on the website of the Shanghai Stock Exchange (www.sse.com.cn)

on April 13 2024.

(2) Under the impact of the pending arbitration case in the United States the transaction under which the

Company intended to transfer partial equity interests in the subsidiary could not achieve one of the

prerequisites to the closing and therefore the transaction plan could no longer be implemented. See the

Announcement on the Progress of Transferring Partial Equities in Subsidiary and Related-party

Transactions (No. 2024-093) disclosed by the Company on the website of the Shanghai Stock Exchange

(www.sse.com.cn) on December 28 2024.

3. Matters that have not been disclosed in any interim announcement

□ Applicable √ N/A

4. Fulfillment of performance covenants (if any) during the reporting period

□ Applicable √ N/A

104 / 304Appotronics Corporation Limited Annual Report 2024

(III) Significant related-party transactions involving joint external investments

1. Matters already disclosed in interim announcements about which no new information is

available

□ Applicable √ N/A

2. Matters already disclosed in interim announcements about which there’s new information

available

□ Applicable √ N/A

3. Matters that have not been disclosed in any interim announcement

□ Applicable √ N/A

(IV) Accounts receivable from and payable to related parties

1. Matters already disclosed in interim announcements about which no new information is

available

□ Applicable √ N/A

2. Matters already disclosed in interim announcements about which there’s new information

available

□ Applicable √ N/A

3. Matters that have not been disclosed in any interim announcement

□ Applicable √ N/A

(V) Financial business between the Company and its affiliated financial companies the

Company’s controlled financial companies or affiliates

□ Applicable √ N/A

(VI) Others

□ Applicable √ N/A

XIII. Material contracts and performance thereof

(I) Trusteeship contracting and lease

1. Trusteeship

□ Applicable √ N/A

2. Contracting

□ Applicable √ N/A

3. Lease

√ Applicable □ N/A

In RMB 0’000

Amo Basis Impaunt ct of Related-

Name Name Lease of Lea for lease party Related-

of of d lease Start End se determdate date inco ining incom transact party lessor lessee assets d me lease e on ion or relation asset

s income

the not

Comp

105 / 304Appotronics Corporation Limited Annual Report 2024

any

Offic

Shenzh

en Appotr

e

R&D

Meishe onics factor

ng Corpor 134 2022.1 2024.1ation y and 6.95 2.01 1.30 - - - No Industr emplo

y Co. Limited yee Ltd. dormi

tory

Shenzh Offic

en Appotr e

Appotr onics R&D Controlli

onics Corpor factor

Holdin ation y and

815. 2024.1 2027.1 ng

84 2.09 2.31 - - - Yes sharehol

gs Limite emplo der

Limite d yee

d dormitory

Description of lease

None

106 / 304Appotronics Corporation Limited Annual Report 2024

(II) Guarantees

√ Applicable □ N/A

In RMB 0’000

External guarantees provided by the Company (excluding those provided for the subsidiaries)

Relationship Commence Whether Whether the

between the Guarantement date of Inception Expiry Type of Collate the obligation Amount of Related-

Guarantor guarantor Obligor ed guarantee date of date of guarant ral (if obligation guaranteed the overdue

Counter

-guaran party

Related-

and the listed amount (signing

party

date of guarantee

guarant

ee ee any)

guaranteed has become obligation guarantehas been guaranteed tee e or not relation company agreement) discharged overdue

Total amount of guarantees provided during the reporting period 0

(excluding those provided for subsidiaries)

Balance of guarantees at the end of the reporting period (excluding 0

those provided for subsidiaries) (A)

Guarantees provided by the Company or its subsidiaries for the subsidiaries of the Company

Relation Amoun

Relationship ship between Incepti Expir Whether Whether t of the between the the Commencement the the overdu

Guarantor guarantor Obligor obligor Guarantee date of guarantee

on date y date Type of obligation obligation e Whether there’s a

and the and the d amount (signing date of

of of

guaran guara guarantee guaranteed guaranteed obligati

counter

listed listed agreement) tee ntee has been has become on

guarantee

company compan discharged overdue guaran

y teed

CINEAP

PO Laser

Appotronics Cinema Controlled August Januar Joint and Corporation Headquarters Technolo subsidiar 4000 October 26 2023 25 y 17 several No No - No Limited gy y 2023 2028 liability (Beijing)

Co. Ltd.Appotronics

Corporation Headquarters

CINEAP Controll

PO Laser ed 5000 October 31 2024

October The Joint and

31 guaran several No No - No

107 / 304Appotronics Corporation Limited Annual Report 2024

Limited Cinema subsidiar 2024 tee liability

Technolo y period

gy is three

(Beijing) years

Co. Ltd. from

the

date of

termin

ating

the

claims

determ

ination

period.The

guaran

tee

period

CINEAP is three

PO Laser years

Appotronics Cinema Controll from

Corporation Headquarters Technolo ed

October Joint and

subsidiar 10000 October 30 2024 30

the

date of several No No - No Limited gy 2024

(Beijing) y termin

liability

Co. Ltd. ating the

claims

determ

ination

period.Formovie

Appotronics (Chongqi Controll April April Joint and

Corporation Headquarters ng) ed 6000 October 15 2024 26 25 several No No - No

Limited Innovativ subsidiare y 2022 2028 liability

Technolo

108 / 304Appotronics Corporation Limited Annual Report 2024

gy Co.Ltd.Three

years

Formovie after

(Chongqi the due date

Appotronics ng) ControllInnovativ ed November 12 March for the Joint and Corporation Headquarters 10000

Limited e subsidiar 2024

24 obligat several No No - No

Technolo y 2023 ions liability

gy Co. under

Ltd. the master

contra

ct.The

guaran

tee

Formovie period

(Chongqi is three years

Appotronics ng) Controll

Corporation Headquarters Innovativ ed November 15

Novem from Joint and

Limited e subsidiar

10000 2023 ber 15 the several No No - No

Technolo y 2024 expirat liability

gy Co. ion of

Ltd. the debt

perfor

mance

period

Total amount of guarantees provided for the subsidiaries during the

reporting period 16375.71

Balance of guarantees provided for the subsidiaries as of the end of

the reporting period (B) 21172.69

Total amount of guarantees provided by the Company (including those provided for the subsidiaries)

109 / 304Appotronics Corporation Limited Annual Report 2024

Total amount guaranteed (A+B) 21172.69

Proportion of total amount guaranteed to the net assets of the

Company (%) 7.73

Where:

Total amount of guarantees provided for the shareholders actual

controller and their affiliates (C) 0

Total amount of debt guarantees directly or indirectly provided for the

obligors whose equity-debt ratio exceeds 70% (D) 20843.63

Total amount guaranteed in excess of 50% of the net assets of the

Company (E) 0

Total amount guaranteed (C+D+E) 20843.63

Explanation about outstanding guarantees for which the Company

may assume joint and several liability N/A

Explanation about guarantees N/A

(III) Entrusted cash asset management

1. Entrusted wealth management

(1) Overall situation of entrusted wealth management

√ Applicable □ N/A

In RMB 0’000

Type Source of funds Total amount Outstanding amount Overdue amount

Bank wealth management

product Idle offering proceeds 15100.00 0 0

Bank wealth management

product Self-funded capital 61000.00 14800.00 0

Wealth management

products of securities Self-funded capital 8000.00 0 0

companies

Other information

□ Applicable √ N/A

110 / 304Appotronics Corporation Limited Annual Report 2024

(2) Entrusted wealth management of single items

√ Applicable □ N/A

In RMB 0’000

With Amount

Type Amou Start End Remunerati Expec Passed future of of nt of date of date of entruste provisio

Truste entrus entrus entrus entrus

Restri on ted Outsta Overd statut

ted ted ted ted Sourc Use of cted deter

Annua

lized incom Actual nding ue ory

d n for

e wealth wealth wealth wealth e of minati e profit amou amou proce

wealth impairm

manag manag manag manag funds

funds or not on rate of (if or loss nt nt dure manage ent (if yield ment any)

ement ement ement ement metho any) or not d plan or not

Bank

China wealth Contra

Merch manag 5000. May 9 May 7 Self-fu

ants ement 00 2024 2025 nded No

ctual 5000.capital provisi

3.05% 151.66 00 Yes Yes

Bank produc ons

t

Bank

China wealth Contra

Merch manag 1800. May 9 May 7 Self-fu ctual 1800.ants ement 00 2024 2025 nded No capital provisi

3.05% 54.60 00 Yes Yes

Bank produc ons

t

Bank

Bank wealth Contra

of manag 2000.May May Self-fu ctual 2000.ement 00 28 29 nded No provisi 2.80% 56.15 00 Yes Yes China produc 2024 2025 capital ons

t

Bank Bank Contra

of wealth 3000. July April Self-fu

Ningb manag 00 10 3 nded No

ctual

provisi 2.16% 47.48

3000.

00 Yes Yes

o ement 2024 2025 capital ons

111 / 304Appotronics Corporation Limited Annual Report 2024

produc

t

Bank

Bank wealth Contra

of manag 3000.Decem June Self-fu ctual 3000.China ement 00

ber 26 26 nded No 2.90% 130.38 Yes Yes

produc 2024 2026 capital

provisi 00

ons

t

Other information

□ Applicable √ N/A

(3) Provision for impairment of entrusted wealth management products

□ Applicable √ N/A

2. Entrusted loans

(1) Overall situation of entrusted loans

□ Applicable √ N/A

Other information

□ Applicable √ N/A

(2) Single entrusted loans

□ Applicable √ N/A

Other information

□ Applicable √ N/A

(3) Provision for impairment of entrusted loans

□ Applicable √ N/A

3. Other information

□ Applicable √ N/A

(IV) Other material contracts

□ Applicable √ N/A

112 / 304Appotronics Corporation Limited Annual Report 2024

XIV. Use of offering proceeds

√ Applicable □ N/A

(I) Overall use of funds raised

√ Applicable □ N/A

In RMB 0’000

Cumulative

Total Cumulative Where: Cumulative investment

offering total Cumulative investment progress of Ratio of

Source Date of Net proceeds

Total offering total excess progress of excess the Total

of receiving Total offering committed

excess proceeds offering offering offering Amount amount offering offering proceeds proceeds as proceeds invested proceeds

offering offering offering proceeds proceeds

in the used as of

prospectus proceeds the end of used as of of the end used as of in this

invested with the

proceeds proceeds (1) (3) = (1) the end of of the the end of year (8) in this or offering - (2) the the reporting the year (%)

purpose

circular reporting changed

(2) period (4) reporting period (%) reporting

(9)=(8)/(1)

period (5) (6)=(4)/(1) period (%)

(7)=(5)/(3)

Initial

public July 16

offering 2019

119000.00 106247.08 100000.00 6247.08 98306.84 7013.54 92.53 112.27 8490.73 7.99 None

Other information

□ Applicable √ N/A

(II) Breakdown of investment projects

√ Applicable □ N/A

1. Breakdown use of offering proceeds

√ Applicable □ N/A In RMB 0’000

Source of Natu Wheth Whet Total Amo Cumula Cumulativ Date C Wheth Specifi Ben Benefit Whether offering Project re er it is her investme unt tive total e for the o er the c efit s or there are

Bala

proceeds an chan nt inves offering investment project m invest reason s R&D any material nce

113 / 304Appotronics Corporation Limited Annual Report 2024

invest ge of amount ted proceed progress as to pl ment for real results changes in

ment inves planned in s used as of the end reach et progre failing ized achieve the project

project tmen with this of the of the the ed ss to in d by feasibility

in the t is offering year end of reporting workin or meets achiev the the and if any

prospe invol proceeds the period (%) g n the e the cur project describe the

ctus or ved (1) reportin (3)=(2)/(1) conditi ot progre plan of ren specific

offerin g period on for ss invest t reasons

g (2) its planne ment yea

circula intende d progre r

r d use ss

[Note

1]

R&D and

industrializa Produ

Initial tion of new ction 5161

public generation and Yes No 31300.0 0 27931.1

Decem

89.24 ber Y Yes N/A N/A N/A .67

offering of laser const 0 1 2022 es [Note 2]

No [Note

display ructio 3]

products n

R&D center

Initial at the

public headquarters R&D Yes No 28400.0 2627 24845.6 87.48 March Nof 0 .34 3 2025 o Yes N/A N/A N/A No N/A offering Appotronics

[Note 4]

Oper

Initial Information ation

public system mana Yes No 7000.00 787.5upgrade and 8 4977.06 71.10

March N

offering geme 2025 o

Yes N/A N/A N/A No N/A

building nt

Suppl

Initial Supplement emen

public ary working ting capital the Yes No 33300 0

33539.5 Y

offering 0

100.72 N/A es Yes N/A N/A N/A No N/A

[Note 5] worki

ng

114 / 304Appotronics Corporation Limited Annual Report 2024

capita

l and

repay

ing

loans

Initial Share

public repurchase Other No No 7075.81 5075 Y

offering [Note 6] s [Note 7] .81

7013.54 99.12 N/A es Yes N/A N/A N/A No N/A

Total - - - - 107075. 8490 98306.881 .73 4 - - - - - - - -

5161.67

[Note 1] On March 18 2022 the Company held the 9th meeting of the second Board of Directors and the 8th meeting of the second Board of Supervisors approving

the Proposal on Postponing Some Investment Projects through deliberation and agreeing upon the Company’s adjusting the time for some investment projects to

reach the working condition for its intended use. On December 8 2023 the Company held the 24th meeting of the second Board of Directors and the 22nd meeting of

the second Board of Supervisors approving the Proposal on Postponing Some Investment Projects through deliberation and approving the Company to postpone the

time for some investment projects to reach the working condition for its intended use. The time of meeting the working condition for its intended use of the investment

projects “R&D center at the headquarters of Appotronics” and “information system upgrade and building” was adjusted to March 2025.[Note 2] The expected benefit of the “R&D and industrialization of new generation of laser display products” is an additional capacity of 135000 sets per year. After

this project was implemented the Company has achieved the target production capability; the Company’s actual output varies with the market demands. Given factors

such as the tense supply chain and changes in macro conditions both at home and abroad the Company’s actual output did not achieve the target additional output.[Note 3] On April 26 2023 the Company held the 19th meeting of the second Board of Directors and the 18th meeting of the second Board of Supervisors respectively

which deliberated and approved the Proposal on the Completion of Part of the Company’s Fundraising Projects and Permanent Replenishment of Liquidity with the

Surplus Raised Funds and agreed that the Company would close the fundraising project “R&D and industrialization of new generation of laser display products” and

a total of RMB 51.6167 million saved (as of December 31 2022) shall be used for permanent replenishment of the working capital. As of the date of remittance the

actual balance in the special account was RMB 52.0022 million (including the interest income and wealth management income net of handling fees). This special

account (Hua Xia Bank Co. Ltd. Shenzhen Houhai Sub-branch account No.: 10869000000305964) has been deregistered on May 17 2023 and the funds have been

transferred to the general account of the Company.

115 / 304Appotronics Corporation Limited Annual Report 2024

[Note 4] The Company held the 19th meeting of the second Board of Directors and the 18th meeting of the second Board of Supervisors on April 26 2023 and the

annual general meeting of shareholders for 2022 on May 19 2023 respectively approving the Proposal on Adjusting Internal Investment Structure of SomeInvestment Projects through deliberation and agreeing upon the Company’s adjusting the internal investment structure of the investment project “R&D center at theheadquarters of Appotronics” and to decrease the “equipment purchase expenses” by RMB 65.0000 million and increase the “R&D expenditures” by RMB 65.0000

million.[Note 5] During the project the total wealth management returns of RMB 2.3950 million were realized from the special account of supplementary working capital

which have been put into use in the project (supplementary working capital). As of the date of approval for issuing this Report the special account (Huaxia Bank Co.Ltd. Shenzhen Houhai Sub-branch account number: 10869000000251463) has been deregistered. The interest of RMB 1418.11 incurred after the project has been

paid to the basic account of the Company to be used as supplementary working capital.[Note 6] The Company held the 9th meeting of the second Board of Directors and the 1st extraordinary general meeting of shareholders in 2022 respectively on March

18 2022 and March 29 2022 approving the Proposal on Repurchase of Shares of the Company through a Call Auction through deliberation and agreeing upon the

Company’s using the excess offering funds to repurchase some RMB-denominated ordinary shares (A shares) issued by it through a call auction.The Company held the 27th meeting of the second Board of Directors on January 31 2024 approving the Proposal on Repurchase of Shares of the Company through

a Call Auction through deliberation and agreeing upon the Company’s using the excess offering funds and own funds to repurchase some RMB-denominated

ordinary shares (A shares) issued by it through a call auction.And the Company held the 31st meeting of the second Board of Directors on January 17 2024 approving the Proposal on 2024 Second Repurchase of Shares of the

Company through a Call Auction through deliberation and agreeing upon the Company’s using the excess offering funds and own funds to repurchase some

RMB-denominated ordinary shares (A shares) issued by it through a call auction.[Note 7] There was a difference between the committed investment by the end of the period and the total offering proceeds committed which was primarily due to the

repurchase made with the incomes from the wealth management of excess offering proceeds and interests on deposits.[Note 8] Subject to the restriction of relevant management measures and banks’ requirements in operation the Company paid expenses including salaries social

insurance premiums and contributions for housing funds for investment projects with non-offering proceeds and then repaid such expenses by transferring funds of

the corresponding amount from the special account of offering proceeds to the general account of the Company.[Note 9] Some sum values do not correspond to the aggregate of breakdown values in the table above due to rounding.

116 / 304Appotronics Corporation Limited Annual Report 2024

2. Breakdown of the use of excess offering proceeds

√ Applicable □ N/A

In RMB 0’000

Total excess offering Cumulative total offering Cumulative investment

Purpose Nature proceeds planned for proceeds used as of the end of progress as of the end of the investment reporting period (%) Remark

(1) the reporting period (2) (3)=(2)/(1)

Repurchase in 2022 Repurchase 2000.00 1937.73 96.89 -

First repurchase in

2024 Repurchase 4121.12 4121.12 100

-

Second repurchase in

2024 Repurchase 954.69 954.69 100

-

Total - 7075.81 7013.54 - -

(III) Change in or termination of investment projects during the reporting period

□ Applicable √ N/A

117 / 304Appotronics Corporation Limited Annual Report 2024

(IV) Other information about the use of offering proceeds during the reporting period

1. Early investment and replacement of projects for which the offering proceeds are used

□ Applicable √ N/A

2. Supplement the working capital with idle offering proceeds

□ Applicable √ N/A

3. Cash management of idle offering proceeds and investment in relevant products

√ Applicable □ N/A

In RMB 0’000

Effective Whether

amount Balance of the greatest

Date of deliberated cash balance

deliberation by the for cash Start date End date management exceeds the

Board of Directors management at the end of authorized

of offering the period amount

proceeds during the period

June 25 2023 24900.00 June 25 2023 June 25 2024 No

0

May 30 2024 11600.00 May 30 2024 May 30 2025 No

Other information

The Proposal on Cash Management of Temporarily Idle Offering Proceeds was approved through

deliberation at the 20th meeting of the second Board of Directors and the 19th meeting of the second

Board of Supervisors held by the Company on June 25 2023. It was approved that without affecting the

normal implementation of the investment plan for offering proceeds a maximum of RMB 249.00

million temporarily idle offering proceeds may be put under cash management to purchase investment

products featuring high security good liquidity and guarantee of the principal (including but not limited

to structural deposits time deposits notice deposits term deposits large-amount deposit note and return

notes) where the total amount for purchasing return notes shall be no more than RMB 100 million

which shall be effective within 12 months from the review and approval.The Proposal on Cash Management of Temporarily Idle Offering Proceeds was approved through

deliberation at the 33rd meeting of the second Board of Directors and the 25th meeting of the second

Board of Supervisors held by the Company on May 30 2024. It was approved that without affecting the

normal implementation of the investment plan for offering proceeds a maximum of RMB 116.00

million (inclusive) temporarily idle offering proceeds may be put under cash management to purchase

investment products featuring high security good liquidity and guarantee of the principal (including but

not limited to structural deposits notice deposits term deposits large-amount deposit note and return

notes) where the total amount for purchasing return notes shall be no more than RMB 50.00 million

(inclusive) which shall be effective within 12 months from the review and approval.

4. Others

√ Applicable □ N/A

118 / 304Appotronics Corporation Limited Annual Report 2024

1) On March 18 2022 the Company held the 9th meeting of the second Board of Directors and the

8th meeting of the second Board of Supervisors approving the Proposal on Postponing Some Investment

Projects through deliberation and agreeing upon the Company’s adjusting the time for some investment

projects to reach the working condition for its intended use. See the Announcement on Postponing Some

Investment Projects (No. 2022-019) disclosed by the Company on the website of the Shanghai Stock

Exchange (www.sse.com.cn) on March 21 2022.

2) The Company held the 9th meeting of the second Board of Directors and the 1st extraordinary

general meeting of shareholders in 2022 respectively on March 18 2022 and March 29 2022 approving

the Proposal on Repurchase of Shares of the Company through a Call Auction through deliberation and

agreeing upon the Company’s using the excess offering funds to repurchase some RMB-denominated

ordinary shares (A shares) issued by it through a call auction via the trading system of the Shanghai Stock

Exchange with the repurchase funds totaling not less than RMB 10 million (inclusive) but not more than

RMB 20 million (inclusive) the repurchase price not exceeding RMB 26.89 per share (inclusive namely

the price after adjustments to equity distribution in 2021) and the repurchase period being six months

from the date on which this repurchase plan is approved by the general meeting of shareholders.As of December 31 2022 the Company repurchased 900000 shares in the aggregate through a call

auction representing 0.1969% of the Company’s total share capital and paid RMB 19377297.59

(including stamp duty commissions and other transaction fees). The repurchase of shares has been

completed.

3) The Company held the 14th meeting of the second Board of Directors and the 13th meeting of the

second Board of Supervisors on June 29 2022 approving the Proposal on Adjusting Internal Investment

Structure of Some Investment Projects through deliberation and agreeing upon the Company’s adjustingthe internal investment structure of the investment project “R&D and industrialization of a newgeneration of laser display products” and to decrease the “equipment purchase expenses” by RMB

53.8020 million and increase the “R&D expenditures” by RMB 53.8020 million.

4) The Company held both the 19th meeting of the second Board of Directors and the 18th meeting of

the second Board of Supervisors and the annual general meeting for 2022 on April 26 2023 and May 19

2023 respectively approving the Proposal on Adjusting Internal Investment Structure of Some

Investment Projects through deliberation and agreeing upon the Company’s adjusting the internal

investment structure of the investment project “R&D center at the headquarters of Appotronics” and to

decrease the “equipment purchase expenses” by RMB 65.0000 million and increase the “R&Dexpenditures” by RMB 65.0000 million.

5) On December 8 2023 the Company held the 24th meeting of the second Board of Directors and

the 22nd meeting of the second Board of Supervisors approving the Proposal on Postponing Some

Investment Projects through deliberation and approving the Company to postpone the time for some

investment projects to reach the working condition for its intended use. The time of meeting the working

condition for its intended use of the investment projects “R&D center at the headquarters of Appotronics”

and “information system upgrade and building” was adjusted to March 2025.

119 / 304Appotronics Corporation Limited Annual Report 2024

6) The Company held the 27th meeting of the second Board of Directors on January 31 2024

approving the Proposal on Repurchase of Shares of the Company through a Call Auction through

deliberation and agreeing upon the Company’s using the excess offering proceeds and own funds to

repurchase some RMB-denominated ordinary shares (A shares) issued by it through a call auction via the

stock trading system of the Shanghai Stock Exchange with the repurchase price not exceeding RMB

27.00 per share (inclusive) the repurchase funds totaling no more than RMB 60.00 million (inclusive)

and no less than RMB 30.00 million (inclusive) and the repurchase period being no more than 6 months

from the date on which this share repurchase plan is approved by the general meeting of shareholders.The Company held the 31st meeting of the second Board of Directors on April 17 2024 approving

the Proposal on the Company’s Second Repurchase of Shares in 2024 through a Call Auction through

deliberation and agreeing upon the Company’s using the excess offering proceeds and own funds to

repurchase some RMB-denominated ordinary shares (A shares) issued by it through a call auction via the

stock trading system of the Shanghai Stock Exchange with the repurchase price not exceeding RMB

27.00 per share (inclusive) the repurchase funds totaling no more than RMB 30.00 million (inclusive)

and no less than RMB 20.00 million (inclusive) and the repurchase period being no more than six months

from the date on which this share repurchase plan is approved by the general meeting of shareholders.As of December 31 2024 the Company repurchased 7126938 shares in the aggregate through a

call auction representing 1.5517% of the Company’s total share capital and paid RMB 119432441.36

(including stamp duty commissions and other transaction fees) including RMB 50758115.53 paid from

the excess offering proceeds.XV. Explanation about other significant matters having a significant influence on the value

judgment and investment decision-making of investors

□ Applicable √ N/A

120 / 304Appotronics Corporation Limited Annual Report 2024

Section VII. Changes in Shares and Shareholders

I. Changes in share capital

(I) Statement of changes in shares

1. Statement of changes in shares

Unit: Share

Before the change +/- After the change

Number Percentage Bonus

Capitalization

(%) New shares shares of capital Others Subtotal Number

Percentage

reserve (%)

I. Non-tradable shares 0 0 0 0 0 0 0 0 0

1. Shares held by the State 0 0 0 0 0 0 0 0 0

2. Shares held by State-owned

corporations 0 0 0 0 0 0 0 0 0

3. Shares held by other

domestic investors 0 0 0 0 0 0 0 0 0

Where: Shares held by

domestic non-state-owned 0 0 0 0 0 0 0 0 0

corporations

Shares held by domestic

natural persons 0 0 0 0 0 0 0 0 0

4. Shares held by foreign

investors 0 0 0 0 0 0 0 0 0

Where: Shares held by foreign

corporations 0 0 0 0 0 0 0 0 0

Shares held by foreign

natural persons 0 0 0 0 0 0 0 0 0

II. Tradable shares 462211338 100 0 0 0 -2920193 -2920193 459291145 100

1. RMB-denominated ordinary

shares 462211338 100 0 0 0 -2920193 -2920193 459291145 100

2. Foreign

currency-denominated shares 0 0 0 0 0 0 0 0 0

121 / 304Appotronics Corporation Limited Annual Report 2024

listed domestically

3. Foreign

currency-denominated shares 0 0 0 0 0 0 0 0 0

listed overseas

4. Others 0 0 0 0 0 0 0 0 0

III. Total shares 462211338 100 0 0 0 -2920193 -2920193 459291145 100

2. Explanation about changes in shares

√ Applicable □ N/A

(1) On February 2 2024 394040 new shares reserved by the Company for the first vesting period under the 2021 Second Restricted Share Incentive Plan and

the first vesting period reserved for the 2022 Restricted Share Incentive Plan became available for trading increasing the Company’s shares from 462211338

shares to 462605378 shares;

(2) On June 20 2024 2528250 new shares for the second vesting period in the initial grant under the 2022 Restricted Share Incentive Plan became available

for trading increasing the Company’s shares from 462605378 shares to 465133628 shares;

(3) On November 5 2024 to reduce its registered capital the Company de-registered 5842483 shares that were deposited in the special securities account for

repurchase and to be used for an ESOP or equity incentives and the Company’s total share capital was changed from 465133628 shares to 459291145 shares.

3. Effect of the changes in shares on the earnings per share net assets per share and other financial indicators of the most recent year and the most recent

reporting period (if any)

√ Applicable □ N/A

For details about the effect of the changes in shares on the basic earnings per share diluted earnings per share net assets per share attributable to ordinaryshareholders of the Company and other financial indicators of the most recent year and the most recent reporting period see “Section II. Company Profile andFinancial Highlights - VI. main accounting data and financial highlights in the past three years - (II) financial highlights”.

4. Other information disclosed as the Company deems necessary or required by the securities regulatory authority

□ Applicable √ N/A

122 / 304Appotronics Corporation Limited Annual Report 2024

(II) Changes in non-tradable shares

□ Applicable √ N/A

123 / 304Appotronics Corporation Limited Annual Report 2024

II. Issuance and listing of securities

(I) Securities issued during the reporting period

□ Applicable √ N/A

Explanation about the securities issued during the reporting period (in case of any outstanding bonds

with different interest rates please explain separately):

□ Applicable √ N/A

(II) Changes in the total number of shares shareholding structure and structure of assets and

liabilities of the Company

√ Applicable □ N/A

1. On February 2 2024 394040 new shares reserved by the Company for the first vesting period

under the 2021 Second Restricted Share Incentive Plan and the first vesting period reserved for the 2022

Restricted Share Incentive Plan became available for trading increasing the Company’s shares from

462211338 shares to 462605378 shares; In consideration of the changes in the total shares and

registered capital of the Company some provisions of the Articles of Association should be revised with

reference to the actual conditions of the Company under relevant rules.

2. On June 20 2024 2528250 new shares for the second vesting period in the initial grant under

the 2022 Restricted Share Incentive Plan became available for trading increasing the Company’s shares

from 462605378 shares to 465133628 shares; In consideration of the changes in the total shares and

registered capital of the Company some provisions of the Articles of Association should be revised with

reference to the actual conditions of the Company under relevant rules.

3. On November 5 2024 to reduce its registered capital the Company de-registered 5842483

shares that were deposited in the special securities account for repurchase and the Company’s total

share capital was changed from 465133628 shares to 459291145 shares. In consideration of the

changes in the total shares and registered capital of the Company some provisions of the Articles of

Association should be revised with reference to the actual conditions of the Company under relevant

rules.III. Shareholders and actual controller

(I) Total number of shareholders

Total number of shareholders of ordinary shares as of the end of the

reporting period (accounts) 16266

Total number of shareholders of ordinary shares as of the end of the

month immediately prior to the issue date of this annual report 16222

(accounts)

Total number of shareholders of preferred shares whose voting rights

have been restituted as of the end of the reporting period (accounts) N/A

Total number of shareholders of preferred shares whose voting rights

have been restituted as of the end of the month immediately prior to the N/A

issue date of this annual report (accounts)

124 / 304Appotronics Corporation Limited Annual Report 2024

Total number of shareholders holding shares with special voting rights

as of the end of the reporting period (accounts) N/A

Total number of shareholders holding shares with special voting rights

as of the end of the month prior to the issue date of this annual report N/A

(accounts)

Number of holders of depository receipts

□ Applicable √ N/A

125 / 304Appotronics Corporation Limited Annual Report 2024

(II) Shares held by top 10 shareholders and top 10 holders of tradable shares as of the end of the reporting period

Unit: Share

Shares held by top 10 shareholders (excluding shares lent out under the refinancing arrangement)

Shares pledged

Change Balance of Number marked or

Shareholder during shares held as the of the end of Percenta

of frozen

(Full name) ge (%) non-trada Nature of reporting the reporting ble shares Status Numb shareholder

period period held of er

shares

Shenzhen Appotronics Holdings Limited 0 79762679 17.37 0 None - Domestic non-state owned corporation

Shenzhen Yuanshi Laser Industrial Investment Consulting Domestic non-state

Partnership (LP) 0 24139500 5.26 0 None - owned corporation

Nantong Strait Appotronics Investment Partnership (LP) 0 18381208 4.00 0 None - Domestic non-state owned corporation

Shenzhen Appotronics Daye Investment Partnership (LP) 0 17056167 3.71 0 None - Domestic non-state owned corporation

Shenzhen Appotronics Hongye Investment Partnership (LP) 0 13601344 2.96 0 None - Domestic non-state owned corporation

Shenzhen Appotronics Chengye Consulting Partnership (LP) 0 10394846 2.26 0 None - Domestic non-state owned corporation

Shenzhen Jinleijing Investment Limited Partnership (LP) 0 9892706 2.15 0 None - Domestic non-state owned corporation

LUO Xiaobin 2546000 8550004 1.86 0 None - Domestic natural person

Bank of China Limited - Stable Income Bond Securities

Investment Fund of E Fund -3171521 6866571 1.50 0 None - Others

Hong Kong Securities Clearing Company Limited -404198 3563657 0.78 0 None - Foreign corporation

126 / 304Appotronics Corporation Limited Annual Report 2024

Shares held by top 10 holders of tradable shares (excluding shares lent out under the refinancing arrangement)

Shareholder Number of tradable shares held Type and number of shares Category Number

RMB-denomin

Shenzhen Appotronics Holdings Limited 79762679 ated ordinary 79762679

share

RMB-denomin

Shenzhen Yuanshi Laser Industrial Investment Consulting Partnership (LP) 24139500 ated ordinary 24139500

share

RMB-denomin

Nantong Strait Appotronics Investment Partnership (LP) 18381208 ated ordinary 18381208

share

RMB-denomin

Shenzhen Appotronics Daye Investment Partnership (LP) 17056167 ated ordinary 17056167

share

RMB-denomin

Shenzhen Appotronics Hongye Investment Partnership (LP) 13601344 ated ordinary 13601344

share

RMB-denomin

Shenzhen Appotronics Chengye Consulting Partnership (LP) 10394846 ated ordinary 10394846

share

RMB-denomin

Shenzhen Jinleijing Investment Limited Partnership (LP) 9892706 ated ordinary 9892706

share

RMB-denomin

LUO Xiaobin 8550004 ated ordinary 8550004

share

RMB-denomin

Bank of China Limited - Stable Income Bond Securities Investment Fund of E Fund 6866571 ated ordinary 6866571

share

RMB-denomin

Hong Kong Securities Clearing Company Limited 3563657 ated ordinary 3563657

share

Explanation about the special purchase account in top 10 shareholders N/A

127 / 304Appotronics Corporation Limited Annual Report 2024

Explanation about entrusted voting rights proxy voting rights waiver of voting rights by the N/A

shareholders above

1. As of December 31 2024 the following entities in top 10

shareholders of the Company constituted persons acting in concert:

Shenzhen Appotronics Holdings Limited Shenzhen Yuanshi Laser

Industrial Investment Consulting Partnership (LP) Shenzhen

Appotronics Daye Investment Partnership (LP) Shenzhen

Affiliates or concert parties among the shareholders stated above Appotronics Hongye Investment Partnership (LP) Shenzhen Jinleijing Investment Limited Partnership (LP) and Shenzhen

Appotronics Chengye Consulting Partnership (LP).

2. Except for the above we are not aware of whether there are

affiliates or concert parties as defined in the Administrative

Measures for the Acquisition of the Listed Companies among other

shareholders.Holders of preferred shares whose voting rights have been restituted and the number of

shares held by them N/A

Lending of shares in refinancing businesses by shareholders holding over 5% shares top 10 shareholders and top 10 holders of tradable shares

□ Applicable √ N/A

Change from the prior period due to lending/payback in refinancing businesses by top 10 shareholders and top 10 holders of tradable shares

□ Applicable √ N/A

Top 10 holders of non-tradable shares and lock-up period

□ Applicable √ N/A

Statement of top 10 holders of domestic depository receipts as of the end of the reporting period

□ Applicable √ N/A

Participation in the lending of shares in refinancing businesses by holders holding over 5% depository receipts top 10 holders of depository receipts and

top 10 holders of tradable shares

□ Applicable √ N/A

Changes due to lending/repayment in refinancing by top 10 holders of depository receipts and top 10 holders of tradable depository receipts

□ Applicable √ N/A

128 / 304Appotronics Corporation Limited Annual Report 2024

Number of non-tradable depository receipts held by top 10 holders and lock-up period

□ Applicable √ N/A

(III) Statement of top 10 shareholders by number of votes held as of the end of the reporting period

□ Applicable √ N/A

(IV) Strategic investors or general corporations that become top 10 shareholders as a result of allotment of new shares/depository receipts

□ Applicable √ N/A

(V) Strategic allotment in IPO

1. Participation by any special asset management plan established by senior officers and key employees in the strategic allotment in IPO

□ Applicable √ N/A

2. Participation by any subsidiary of the sponsor in the strategic allotment in IPO

□ Applicable √ N/A

129 / 304Appotronics Corporation Limited Annual Report 2024

IV. Controlling shareholder and actual controller

(I) Controlling shareholder

1. Legal person

√ Applicable □ N/A

Name Shenzhen Appotronics Holdings Limited

Principal or legal representative LI Yi

Date of establishment January 17 2014

Main business Investment holding

Shares held in other domestic or foreign listed companies

during the reporting period None

Other information N/A

2. Natural person

□ Applicable √ N/A

3. Special explanation if the Company does not have a controlling shareholder

□ Applicable √ N/A

4. Explanation about the change in the controlling shareholder during the reporting period

□ Applicable √ N/A

5. Block diagram of the controlling shareholder’s ownership of and control over the Company

√ Applicable □ N/A

Shenzhen Appotronics Holdings

Limited

Appotronics Corporation Limited

(II) Actual controller

1. Legal person

□ Applicable √ N/A

2. Natural person

√ Applicable □ N/A

Name LI Yi

Nationality China

Whether or not have right of residence in

any other country or region Yes

Main occupation and title Chairman & General Manager of the Company

Whether or not control any domestic or

foreign listed company in the past 10 years None

130 / 304Appotronics Corporation Limited Annual Report 2024

3. Special explanation if the Company does not have an actual controller

□ Applicable √ N/A

4. Explanation about the change of control of the Company during the reporting period

□ Applicable √ N/A

5. Block diagram of the actual controller’s ownership of and control over the Company

√ Applicable □ N/A

LI Yi

Shenzhen Shenzhen Yuanshi Shenzhen Shenzhen Shenzhen Shenzhen

Appotronics Laser Industrial Appotronics Appotronics Jinleijing Appotronics

Holdings Investment Daye Investment Hongye Investment Chengye

Limited Consulting Partnership (LP) Investment Limited Consulting

Partnership (LP) Partnership (LP) Partnership (LP) Partnership (LP)

A total control of 33.71%

Appotronics Corporation Limited

6. The actual controller controls the Company by trust or any other assets management means

□ Applicable √ N/A

(III) Other information about the controlling shareholder and the actual controller

□ Applicable √ N/A

V. The total shares pledged by the controlling shareholder or largest shareholder and parties

acting in concert therewith account for over 80% of the shares held by such shareholder in

the Company

□ Applicable √ N/A

VI. Other corporate shareholders holding more than 10% shares

□ Applicable √ N/A

VII. Restrictions on the disposal of shares/depository receipts

□ Applicable √ N/A

VIII. Specific implementation of share repurchase during the reporting period

√ Applicable □ N/A

In RMB 0’000

Name of the share repurchase plan Plan for repurchasing the Company’s shares through a call auction

Date when the share repurchase plan was February 2 2024

131 / 304Appotronics Corporation Limited Annual Report 2024

disclosed

The number of shares to be repurchased was 1.1111

million shares (inclusive) to 2.2222 million shares

Number of shares to be purchased and ratio to (inclusive) calculated based on the maximum

the total share capital (%) repurchase price of RMB 27.00/share accounting for

0.24%~0.48% of the Company’s total share capital

then.Planned amount of repurchase RMB 30.00 million (inclusive) to RMB 60.00 million (inclusive)

Within 6 months from the date when the Board of

Planned period of repurchase Directors reviewed and adopted the plan of share repurchase (this repurchase plan has been fully

implemented during the reporting period)

Purpose of repurchase For an ESOP or equity incentives

Number repurchases (shares) 3351740

Ratio of the number repurchased to the target

shares involved in equity incentives (%) (if any) N/A

Progress of selling the repurchased shares by

the Company through a call auction N/A

Name of the share repurchase plan Plan on the Company’s second repurchase of shares in 2024 through a call auction

Date when the share repurchase plan was

disclosed April 19 2024

The number of shares to be repurchased was 0.7427

million shares (inclusive) to 1.1140 million shares

Number of shares to be purchased and ratio to (inclusive) calculated based on the adjusted

the total share capital (%) maximum repurchase price of RMB 26.93/share

accounting for 0.16%~0.24% of the Company’s total

share capital then.Planned amount of repurchase RMB 20.00 million (inclusive) to RMB 30.00 million (inclusive)

Within 6 months from the date when the Board of

Planned period of repurchase Directors reviewed and adopted the plan of share repurchase (this repurchase plan has been fully

implemented during the reporting period)

Purpose of repurchase For an ESOP or equity incentives

Number repurchases (shares) 1590743

Ratio of the number repurchased to the target

shares involved in equity incentives (%) (if N/A

any)

Progress of selling the repurchased shares by

the Company through a call auction N/A

Name of the share repurchase plan Plan on the Company’s third repurchase of shares in 2024 through a call auction

Date when the share repurchase plan was

disclosed August 31 2024

The number of shares to be repurchased was 0.9091

million shares (inclusive) to 1.3636 million shares

Number of shares to be purchased and ratio to (inclusive) calculated based on the maximum

the total share capital (%) repurchase price of RMB 22.00/share accounting for

0.20%~0.29% of the Company’s total share capital

then.Planned amount of repurchase RMB 20.00 million (inclusive) to RMB 30.00

132 / 304Appotronics Corporation Limited Annual Report 2024

million (inclusive)

Within 6 months from the date when the Board of

Planned period of repurchase Directors reviewed and adopted the plan of share repurchase (this repurchase plan has been fully

implemented during the reporting period)

Purpose of repurchase For an ESOP or equity incentives

Number repurchases (shares) 2184455

Ratio of the number repurchased to the target

shares involved in equity incentives (%) (if N/A

any)

Progress of selling the repurchased shares by

the Company through a call auction N/A

The Company held the 35th meeting of the second Board of Directors and the 26th meeting of the

second Board of Supervisors on August 29 2024 and the 2nd extraordinary general meeting of

shareholders in 2024 on September 18 2024 where the Proposal on Adjusting the Use of Shares

Repurchased by the Company and Reducing the Registered Capital was considered and adopted

approving the Company to adjust the use of the 5842483 shares in the special securities account for

repurchase to de-registration accounting for 1.26% of the Company’s total share capital of 465133628

shares prior to the de-registration. On November 5 2024 the Company completed the efforts of

de-registering the repurchased shares so that the total share capital changed from 465133628 shares to

459291145 shares and the registered capital was reduced from RMB 465133628 to RMB

459291145.

133 / 304Appotronics Corporation Limited Annual Report 2024

Section VIII. Preferred Shares

□ Applicable √ N/A

134 / 304Appotronics Corporation Limited Annual Report 2024

Section IX. Bonds

I. Corporate bonds (including enterprise bonds) and non-financial corporate debt financing

instruments

□ Applicable √ N/A

II. Convertible corporate bonds

□ Applicable √ N/A

135 / 304Appotronics Corporation Limited Annual Report 2024

Section X. Financial Report

I. Auditor’s Report

√ Applicable □ N/A

Auditor’s Report

Tian Jian Shen (2025) No. 7-605

To all shareholders of Appotronics Corporation Limited:

I. Opinion

We have audited the financial statements of Appotronics Corporation Limited (“Appotronics”)

which comprise the consolidated and the parent company’s balance sheets as at December 31 2024 and

the consolidated and the parent company’s income statements the consolidated and the parent

company’s statements of cash flow and the consolidated and the parent company’s statements of changes

in owners’ equity for the year then ended and the notes to the relevant financial statements.In our opinion the accompanying financial statements of Appotronics are prepared and present

fairly in all material respects the consolidated and the parent company’s financial position as of

December 31 2024 and the consolidated and the parent company’s results of operations and cash flows

for the year then ended in accordance with the Accounting Standards for Business Enterprises.II. Basis for opinion

We conducted our audit in accordance with the Auditing Standards for Certified Public Accounts of

China. Our responsibilities under those standards are further described in the Certified Public Accounts’

Responsibilities for Audit of Financial Statements section of our report. We are independent of

Appotronics in accordance with the Code of Ethics for Chinese Certified Public Accountants and we

have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit

evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.III. Key audit items

Key audit matters are those matters that in our professional judgment were of most significance in

our audit of the financial statements of the current period. These matters were addressed in the context of

our audit of the financial statements as a whole and in forming our opinion thereon and we do not

provide a separate opinion on these matters.(I) Revenue recognition

1. Description

Details of relevant information are disclosed in V.34 V.37 and VII.61 of Section X.Appotronics is mainly engaged in research development production sales and leasing of laser

display core components and complete equipment. In 2024 the operating revenue of Appotronics

amounted to RMB 2418574391.82 of which the sales of laser display core components complete

equipment and other products were RMB 2097409823.49 representing 86.72% of the total operating

revenue and lease incomes were RMB 321164568.33 representing 13.28% of the total operating

revenue.

136 / 304Appotronics Corporation Limited Annual Report 2024

As the operating revenue is one of Appotronics’s KPIs there may be an inherent risk that the

management of Appotronics (hereinafter referred to as “management”) may recognize the revenue

inappropriately to achieve specific objectives or expectations. Therefore we identified revenue

recognition as a key audit matter.

2. Description of how the key audit matter was addressed in the audit

For revenue recognition our audit procedures include inter alia:

(1) Understand the key internal controls related to revenue recognition evaluate the design of those

controls determine whether they are implemented and test the operational effectiveness of the relevant

internal controls;

(2) Examine major sales contracts and lease contracts understand the major provisions or

conditions thereof and evaluate whether revenue recognition methods are appropriate;

(3) Implement analysis procedures for operating revenue and gross margin by month product

customer etc. to identify whether there are significant or unusual and to find out the causes thereof;

(4) For sales incomes select projects to check relevant supporting documents including among

other things sales contracts or orders sales invoices warehouse receipts delivery notes transport

information and customer signature forms; for lease incomes select projects to check lease contracts or

supporting documents such as orders unit lease price per hour number of hours consumed and invoices;

and for incomes from overseas sales select projects to check supporting documents such as the sales

contracts export customs declaration forms bills of lading and sales invoices;

(5) In conjunction with confirmation procedures for accounts receivable and contract assets select

projects to check the sales amounts;

(6) Conduct the cut-off test to check whether incomes were recognized during a proper period;

(7) Obtain a record of sales returns after the balance sheet date to check if there is any instance that

conditions for revenue recognition were not met at the balance sheet date;

(8) Check whether information relative to operating revenue is properly presented in the financial

statements.(II) Net realizable value of inventories

1. Description

Details of relevant information are disclosed in V.16 and VII.10 of Section X.As of December 31 2024 the carrying amount of inventories of Appotronics amounted to RMB

709823682.85 and provisions for decline in value of inventories amounted to RMB 114304437.66

hence the book value of inventories amounted to RMB 595519245.19.Inventories are measured at the lower of cost and net realizable value. The management determines

the net realizable value as the estimated selling price less the estimated costs of completion and the

estimated costs necessary to make the sale and relevant taxes. The amount of inventories is material and

the determination of the net realizable value of inventories involves significant management judgment

therefore we identified the determination of the net realizable value of inventories as a key audit matter.

2. Description of how the key audit matter was addressed in the audit

137 / 304Appotronics Corporation Limited Annual Report 2024

For the net realizable value of inventories our audit procedures include inter alia:

(1) Understand the key internal controls related to the net realizable value of inventories evaluate

the design of those controls determine whether they are implemented and test the operational

effectiveness of the relevant internal controls;

(2) Select projects to check the reasonableness of the estimated selling prices of inventories and

review whether the estimated selling prices were consistent with historical data and subsequent

situations;

(3) Evaluate the appropriateness of the management’s estimates on the estimated costs of

completion of inventories and the estimated costs necessary to make the sale and relevant taxes;

(4) Test the accuracy of the management’s calculation on the net realizable value of inventories;

(5) Evaluate the reasonableness of the management’s estimates on the net realizable value of

inventories by checking inventories recognized at the end of the period in terms of long age

obsolescence changes in technology or market demand in conjunction with inventory monitoring;

(6) Check whether information relative to the net realizable value of inventories is properly

presented in the financial statements.IV. Other information

The management is responsible for other information. The other information comprises the

information included in the annual report but does not include the financial statements and our auditor’s

report thereon.Our opinion on the financial statements does not cover the other information and we do not express

any form of assurance conclusion thereon.In connection with our audit of the financial statements our responsibility is to read the other

information and in doing so consider whether the other information is materially inconsistent with the

financial statements or our knowledge obtained in the audit or otherwise appears to be materially

misstated.If based on the work we have performed we conclude that there is a material misstatement of this

other information we are required to report that fact. We have nothing to report in this regard.V. Responsibilities of the management and those charged with governance with respect to

the financial statements

The management is responsible for the preparation and fair presentation of the financial statements

in accordance with the Accounting Standards for Business Enterprises and designing implementing and

maintaining internal control that is necessary to ensure that the financial statements are free from

material misstatement whether due to fraud or error.In preparing the financial statements the management is responsible for assessing Appotronics’s

ability to continue as a going concern disclosing as applicable matters related to going concern and

using the going concern basis of accounting unless the management either intends to liquidate

Appotronics or to cease operations or has no realistic alternative but to do so.Those charged with governance of Appotronics (hereinafter referred to as “those charged with

138 / 304Appotronics Corporation Limited Annual Report 2024governance”) are responsible for overseeing Appotronics’s financial reporting process.VI. Certified public accounts’ responsibilities for audit of financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole

are free from material misstatement whether due to fraud or error and to issue an auditor’s report that

includes our opinion solely to you. Reasonable assurance is a high level of assurance but is not a

guarantee that an audit conducted in accordance with the Auditing Standards of China will always detect

a material misstatement when it exists. Misstatements can arise from fraud or error and are considered

material if individually or in the aggregate they could reasonably be expected to influence the

economic decisions of users taken on the basis of these financial statements.As part of an audit in accordance with the Auditing Standards of China we exercise professional

judgment and maintain professional skepticism throughout the audit. We also:

(I) Identify and assess the risks of material misstatement of the financial statements whether due to

fraud or error design and perform audit procedures responsive to those risks and obtain audit evidence

that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material

misstatement resulting from fraud is higher than that resulting from error as fraud may involve collusion

forgery intentional omissions misrepresentations or the override of internal control.(II) Obtain an understanding of internal control relevant to the audit in order to design audit

procedures that are appropriate in the circumstances.(III) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting

estimates and related disclosures made by the management.(IV) Conclude on the appropriateness of the management’s use of the going concern basis of

accounting. Meanwhile based on the audit evidence obtained whether a material uncertainty exists

related to events or conditions that may cast significant doubt on Appotronics’s ability to continue as a

going concern. If we conclude that a material uncertainty exists we are required by the Auditing

Standards of China to draw users’ attention in our auditor’s report to the related disclosures in the

financial statements. If such disclosures are inadequate we are supposed to express an unqualified

opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report.However future events or conditions may cause Appotronics to cease to continue as a going concern.(V) Evaluate the overall presentation structure and content of the financial statements and whether

the financial statements represent the underlying transactions and events in a manner that achieves fair

presentation.(VI) Obtain sufficient and appropriate audit evidence regarding the financial information of the

entities or business activities within Appotronics to express an opinion on the financial statements. We

are responsible for the direction supervision and performance of the group audit. We remain solely

responsible for our audit opinion.We communicate with those charged with governance regarding among other matters the planned

scope and timing of the audit and significant audit findings including any significant deficiencies in

internal control that we identify during our audit.

139 / 304Appotronics Corporation Limited Annual Report 2024

We also provide those charged with governance with a statement that we have complied with

relevant ethical requirements regarding independence and communicate with them all relationships and

other matters that may reasonably be thought to bear on our independence and where applicable related

safeguards.From the matters communicated with those charged with governance we determine those matters

that were of most significance in the audit of the financial statements of the current period and are

therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation

precludes public disclosure about the matter or when in extremely rare circumstances we determine that

a matter should not be communicated in our report because the adverse consequences of doing so would

reasonably be expected to outweigh the public interest benefits of such communication.Pan-China Certified Public Accountants Chinese Certified Public Accountant: WEI Biaowen

(Special General Partnership) (Partner in Charge)

Hangzhou City China Chinese Certified Public Accountant: NIU Chunjun

April 28 2025

140 / 304Appotronics Corporation Limited Annual Report 2024

II. Financial Statements

Consolidated Balance Sheet

December 31 2024

Prepared by: Appotronics Corporation Limited

In RMB

Item Note December 31 2024 December 31 2023

Current Assets:

Cash and bank balances VII. 1 1654769306.21 1386828549.06

Balances with clearing agencies

Placements with banks and other

financial institutions

Held-for-trading financial assets VII. 2 179936739.21 514010000.00

Derivative financial assets

Notes receivable VII. 4 4749524.13 8951308.71

Accounts receivable VII. 5 310195322.17 180290007.90

Receivables financing VII. 7 12552177.09 11387400.00

Prepayments VII. 8 31091853.76 35112661.82

Premiums receivable

Amounts receivable under reinsurance

contracts

Reinsurance contract reserves receivable

Other receivables VII. 9 45104401.76 30698687.55

Where: Interests receivable

Dividends receivable 14233032.00 14023746.00

Financial assets purchased under resale

agreements

Inventories VII. 10 595519245.19 656346799.67

Where: Data resources

Contract assets VII. 6 1741984.19 1664740.29

Held-for-sale assets

Non-current assets due within one year VII. 12 54729347.74 41997218.73

Other current assets VII. 13 65416667.70 48417270.11

Total current assets 2955806569.15 2915704643.84

Non-current Assets:

Loans and advances

Debt investments

Other debt investments

Long-term receivables VII. 16 37190876.33 26000543.13

Long-term equity investment VII. 17 6242039.74 144726776.43

Investment in other equity instruments VII. 18 7075419.38 7075419.38

Other non-current financial assets VII. 19 84000000.04

Investment properties

Fixed assets VII. 21 272101764.36 336276793.84

Construction in progress VII. 22 406450625.01 347777138.86

Productive biological assets

Oil and gas assets

Right-of-use assets VII. 25 108676133.66 40016903.67

Intangible assets VII. 26 272019178.23 281961046.22

Where: Data resources

Development expenditure

Where: Data resources

141 / 304Appotronics Corporation Limited Annual Report 2024

Goodwill

Long-term prepaid expenses VII. 28 1638295.71 6318145.33

Deferred tax assets VII. 29 90057468.25 85364732.19

Other non-current assets VII. 30 14404981.14 29348748.27

Total non-current assets 1299856781.85 1304866247.32

Total assets 4255663351.00 4220570891.16

Current Liabilities:

Short-term borrowings VII. 32 86796568.44 80036500.00

Loans from the central bank

Taking from banks and other financial

institutions

Held-for-trading financial liabilities

Derivative financial liabilities

Notes payable VII. 35 184786728.04 76001079.07

Accounts payable VII. 36 351760010.32 247318466.10

Advance from customers VII. 37 91209867.92 110573711.24

Contract liabilities VII. 38 43722313.68 45416445.99

Financial assets sold under repurchase

agreements

Customer deposits and deposits from

banks and other financial institutions

Funds from securities trading agency

Funds from underwriting securities

agency

Employee benefits payable VII. 39 59921145.44 66874234.47

Taxes payable VII. 40 25262217.19 6142704.23

Other payables VII. 41 73987139.27 54142509.17

Where: Interests payable

Dividends payable

Fees and commissions payable

Amounts payable under reinsurance

contracts

Held-for-sale liabilities

Non-current liabilities due within one VII. 43

year 216244559.49 268748151.67

Other current liabilities VII. 44 63559833.08 18441685.83

Total current liabilities 1197250382.87 973695487.77

Non-current Liabilities:

Insurance contract reserves

Long-term borrowings VII. 45 282083548.67 370649631.22

Bonds payable

Where: Preferred shares

Perpetual bonds

Lease liabilities VII. 47 71996166.91 15548985.71

Long-term payables

Long-term employee benefits payable

Provisions VII. 50 30299456.94 58180985.08

Deferred income VII. 51 2245051.44 4627972.56

Deferred tax liabilities VII. 29 1908071.13 1229654.81

Other non-current liabilities

Total non-current liabilities 388532295.09 450237229.38

Total liabilities 1585782677.96 1423932717.15

Owners’ Equity (Shareholders’ Equity):

Paid-in capital (or share capital) VII. 53 459291145.00 462211338.00

Other equity instruments

142 / 304Appotronics Corporation Limited Annual Report 2024

Where: Preferred shares

Perpetual bonds

Capital reserve VII. 55 1554154511.33 1616489567.43

Less: Treasury shares VII. 56 29891962.32 19377297.59

Other comprehensive income VII. 57 8631417.00 7550073.78

Special reserve

Surplus reserve VII. 59 103160084.90 84873365.32

General risk reserve

Undistributed profit VII. 60 644702699.21 667122406.05

Total owners’ (or shareholders’) equity

attributable to owners of the parent 2740047895.12 2818869452.99

company

Minority interests -70167222.08 -22231278.98

Total owners’ (or shareholders’)

equity 2669880673.04 2796638174.01

Total liabilities and owners’ (or

shareholders’) equity 4255663351.00 4220570891.16

Principal of the Company: LI Yi Person in Charge of the Accounting Work: WANG Yingxia

Person in Charge of the Accounting Body: WANG Yingxia

Balance Sheet of the Parent Company

December 31 2024

Prepared by: Appotronics Corporation Limited

In RMB

Item Note December 31 2024 December 31 2023

Current Assets:

Cash and bank balances 1020846037.36 885876318.51

Held-for-trading financial assets 179936739.21 514010000.00

Derivative financial assets

Notes receivable 1030535.38 8951308.71

Accounts receivable XIX. 1 715107773.55 462480236.37

Receivables financing 8150517.59 5996000.00

Prepayments 5646576.09 6081606.52

Other receivables XIX. 2 376457464.45 14978163.24

Where: Interests receivable

Dividends receivable

Inventories 367365044.39 360986333.90

Where: Data resources

Contract assets 1442326.11 1664740.29

Held-for-sale assets

Non-current assets due within one

year

Other current assets 49714490.31 26620443.94

Total current assets 2725697504.44 2287645151.48

Non-current Assets:

Debt investments

Other debt investments

Long-term receivables

Long-term equity investment XIX. 3 228028648.71 469318028.03

Investment in other equity 7075419.38 7075419.38

143 / 304Appotronics Corporation Limited Annual Report 2024

instruments

Other non-current financial assets

Investment properties

Fixed assets 85547516.22 65177438.43

Construction in progress 404633797.74 344481907.55

Productive biological assets

Oil and gas assets

Right-of-use assets 100705373.30 30017024.96

Intangible assets 273363252.63 283883645.37

Where: Data resources

Development expenditure

Where: Data resources

Goodwill

Long-term prepaid expenses 1450084.92

Deferred tax assets 42151345.83 33459331.86

Other non-current assets 14188217.04 28174416.97

Total non-current assets 1155693570.85 1263037297.47

Total assets 3881391075.29 3550682448.95

Current Liabilities:

Short-term borrowings 60039666.67 50010833.33

Held-for-trading financial liabilities

Derivative financial liabilities

Notes payable 114534948.51 31461205.72

Accounts payable 298251262.60 274312877.51

Advance from customers

Contract liabilities 23795144.98 18743336.81

Employee benefits payable 30404555.82 34021863.01

Taxes payable 2134398.71 3596744.97

Other payables 41085026.39 15161050.55

Where: Interests payable

Dividends payable

Held-for-sale liabilities

Non-current liabilities due within one

year 124107675.92 61007143.63

Other current liabilities 1674928.55 3912927.75

Total current liabilities 696027608.15 492227983.28

Non-current Liabilities:

Long-term borrowings 222035737.95 233506228.03

Bonds payable

Where: Preferred shares

Perpetual bonds

Lease liabilities 68371600.68 10326879.29

Long-term payables

Long-term employee benefits payable

Provisions 18353405.52 20925309.05

Deferred income 1199899.95 2718881.63

Deferred tax liabilities

Other non-current liabilities

Total non-current liabilities 309960644.10 267477298.00

Total liabilities 1005988252.25 759705281.28

Owners’ Equity (Shareholders’ Equity):

Paid-in capital (or share capital) 459291145.00 462211338.00

Other equity instruments

Where: Preferred shares

Perpetual bonds

144 / 304Appotronics Corporation Limited Annual Report 2024

Capital reserve 1572337894.75 1625258496.25

Less: Treasury shares 29891962.32 19377297.59

Other comprehensive income

Special reserve

Surplus reserve 101882544.17 83595824.59

Undistributed profit 771783201.44 639288806.42

Total owners’ (or shareholders’)

equity 2875402823.04 2790977167.67

Total liabilities and owners’ (or

shareholders’) equity 3881391075.29 3550682448.95

Principal of the Company: LI Yi Person in Charge of the Accounting Work: WANG Yingxia

Person in Charge of the Accounting Body: WANG Yingxia

Consolidated Income Statement

January to December 2024

In RMB

Item Note 2024 2023

I. Total operating revenue 2418574391.82 2213356977.95

Where: Operating revenue VII. 61 2418574391.82 2213356977.95

Interest income

Premiums earned

Fee and commission income

II. Total operating costs 2330190129.40 2138781888.21

Where: Operating costs VII. 61 1733837423.57 1435201005.16

Interest expenses

Fee and commission expenses

Surrenders

Claims and policyholder benefits

(net of amounts recoverable from

reinsurers)

Net withdrawal of insurance

contract reserves

Insurance policyholder dividends

Expenses for reinsurance accepted

Taxes and surcharges VII. 62 9140381.25 7768044.95

Selling expenses VII. 63 186516285.46 277237296.91

Administrative expenses VII. 64 163191057.84 157092724.49

R&D expenses VII. 65 247712822.82 280932800.35

Financial expenses VII. 66 -10207841.54 -19449983.65

Where: Interest expense 18362266.61 18635749.36

Interest income 29049115.23 34298315.94

Add: Other income VII. 67 28750076.13 41442072.61

Investment income (loss is indicated VII. 68

by “-”) -20601487.88 568352.18

Where: Income from investments in

associates and joint ventures -5063347.06 -12002779.90

Gains from derecognition of

financial assets measured at amortized cost

Foreign exchange gains (loss is

indicated by “-”)

Gains from net exposure hedges

145 / 304Appotronics Corporation Limited Annual Report 2024

(loss is indicated by “-”)

Gains from changes in fair values VII. 70

(loss is indicated by “-”) -4184266.41 130000.00

Losses of credit impairment (loss is VII. 71

indicated by “-”) -16298325.68 -6979447.80

Impairment losses of assets (loss is VII. 72

indicated by “-”) -67906117.80 -74260854.74

Gains from disposal of assets (loss VII. 73

is indicated by “-”) -287204.24 151469.26

III. Operating profit (loss is indicated by

“-”)7856936.5435626681.25

Add: Non-operating revenue VII. 74 3044544.00 9880662.10

Less: Non-operating expenses VII. 75 3484377.43 7832364.17

IV. Total profits (total losses are indicated

by “-”) 7417103.11 37674979.18

Less: Income tax expenses VII. 76 13301492.43 20058698.03

V. Net profits (net losses are indicated by

“-”)-5884389.3217616281.15

(I) Categorized by the continuity of operation

1. Net profits from continuing

operations (net losses are indicated by “-”) -5884389.32 17616281.15

2. Net profits from discontinued

operations (net losses are indicated by “-”)

(II) Categorized by the ownership

1. Net profits attributable to

shareholders of the parent company (net 27953093.89 103186743.57

losses are indicated by “-”)

2. Profits or losses attributable to

minority shareholders (net losses are -33837483.21 -85570462.42

indicated by “-”)

VI. Other comprehensive income net of tax 763914.35 1121927.11

(I) Other comprehensive income that can

be attributable to owners of the parent 1081343.22 1813176.37

company net of tax

1. Other comprehensive income that

cannot be reclassified subsequently to profit

or loss

(1) Changes from remeasurement of

defined benefit plans

(2) Other comprehensive income that

cannot be reclassified to profit or loss under

the equity method

(3) Changes in fair value of investments

in other equity instruments

(4) Changes in fair value of enterprises’

own credit risks

2. Other comprehensive income that

will be reclassified to profit or loss 1081343.22 1813176.37

(1) Other comprehensive income that

will be reclassified to profit or loss under 16306810.51 -3126210.45

the equity method

(2) Changes in fair value of other debt

investments

(3) Amount of financial assets

reclassified to other comprehensive income

(4) Provision for credit impairment of

146 / 304Appotronics Corporation Limited Annual Report 2024

other debt investments

(5) Reserve for cash flow hedges

(6) Exchange differences on translation

of financial statements denominated in -15225467.29 4939386.82

foreign currencies

(7) Others

(II) Other comprehensive income that

can be attributable to minority shareholders -317428.87 -691249.26

net of tax

VII. Total comprehensive income -5120474.97 18738208.26

(I) Total comprehensive income that can

be attributable to owners of the parent 29034437.11 104999919.94

company

(II) Total comprehensive income that can

be attributable to minority shareholders -34154912.08 -86261711.68

VIII. Earnings per share:

(I) Basic earnings per share (RMB/share) 0.06 0.23

(II) Diluted earnings per share

(RMB/share) 0.06 0.22

In the event of business combinations involving entities under common control the net profits realized

prior to the combination by the party being absorbed is: RMB 0.00 and the net profits realized in the last

period by the party being absorbed is: RMB 0.Principal of the Company: LI Yi Person in Charge of the Accounting Work: WANG Yingxia

Person in Charge of the Accounting Body: WANG Yingxia

Income Statement of the Parent Company

January to December 2024

In RMB

Item Note 2024 2023

I. Operating revenue XIX. 4 1634247969.49 1120351462.42

Less: Operating costs XIX. 4 1325107966.02 792526113.10

Taxes and surcharges 7340087.32 6174264.79

Selling expenses 48918115.43 73251699.51

Administrative expenses 88835613.75 65588918.77

R&D expenses 161599246.73 161343424.73

Financial expenses -19062251.51 -26883193.36

Where: Interest expense 6606969.64 6304697.96

Interest income 26181081.79 29873828.03

Add: Other income 20692328.94 28781626.24

Investment income (loss is indicated by

“-”) XIX. 5 175975744.06 19652860.44

Where: Income from investments in

associates and joint ventures -1124968.52 -163837.89

Gains from derecognition of

financial assets measured at amortized cost

Gains from net exposure hedges (loss is

indicated by “-”)

Gains from changes in fair values (loss is

indicated by “-”) 11999239.21 130000.00

Losses of credit impairment (loss is -17346903.73 -5325094.56

147 / 304Appotronics Corporation Limited Annual Report 2024

indicated by “-”)

Impairment losses of assets (loss is

indicated by “-”) -40486444.93 -11148568.14

Gains from disposal of assets (loss is

indicated by “-”) -1527.32 30476.32

II. Operating profit (loss is indicated by “-”) 172341627.98 80471535.18

Add: Non-operating revenue 734215.51 542346.47

Less: Non-operating expenses 1489878.69 240165.57

III. Total profits (total losses are indicated by “-”) 171585964.80 80773716.08

Less: Income tax expenses -11281230.95 -12762116.47

IV. Net profits (net losses are indicated by “-”) 182867195.75 93535832.55

(I) Net profits from continuing operations (net

losses are indicated by “-”) 182867195.75 93535832.55

(II) Net profits from discontinued operations

(net losses are indicated by “-”)

V. Other comprehensive income net of tax

(I) Other comprehensive income that cannot be

reclassified subsequently to profit or loss

1. Changes from remeasurement of defined

benefit plans

2. Other comprehensive income that cannot

be reclassified to profit or loss under the equity

method

3. Changes in fair value of investments in

other equity instruments

4. Changes in fair value of enterprises’ own

credit risks

(II) Other comprehensive income that will be

reclassified to profit or loss

1. Other comprehensive income that will be

reclassified to profit or loss under the equity

method

2. Changes in fair value of other debt

investments

3. Amount of financial assets reclassified to

other comprehensive income

4. Provision for credit impairment of other

debt investments

5. Reserve for cash flow hedges

6. Exchange differences on translation of

financial statements denominated in foreign

currencies

7. Others

VI. Total comprehensive income 182867195.75 93535832.55

VII. Earnings per share:

(I) Basic earnings per share (RMB/share)

(II) Diluted earnings per share (RMB/share)

Principal of the Company: LI Yi Person in Charge of the Accounting Work: WANG Yingxia

Person in Charge of the Accounting Body: WANG Yingxia

Consolidated Cash Flow Statement

January to December 2024

148 / 304Appotronics Corporation Limited Annual Report 2024

In RMB

Item Note 2024 2023

I. Cash Flows from Operating Activities:

Cash receipts from the sale of goods and

the rendering of services 2472468080.89 2387449326.09

Net increase in customer deposits and

deposits from banks and other financial

institutions

Net increase in loans from the central

bank

Net increase in taking from banks and

other financial institutions

Cash receipts from premiums under

direct insurance contracts

Net cash receipts from reinsurance

business

Net cash receipts from policyholders’

deposits and investment contract liabilities

Cash receipts from interest fees and

commissions

Net increase in taking from banks

Net increase in financial assets sold under

repurchase arrangements

Net cash received from securities trading

agencies

Receipts of tax refunds 12708614.45 51043896.71

Other cash receipts related to operating

activities VII. 78 65898802.74 152471883.59

Subtotal of cash inflows from

operating activities 2551075498.08 2590965106.39

Cash payments for goods purchased and

services received 1488109460.99 1407604578.45

Net increase in loans and advances to

customers

Net increase in balance with the central

bank and due from banks and other

financial institutions

Cash payments for claims and

policyholders' benefits under direct

insurance contracts

Net increase in placements with banks

and other financial institutions

Cash payments for interest fees and

commissions

Cash payments for insurance

policyholder dividends

Cash payments to and on behalf of

employees 422273530.23 445173399.88

Payments of various types of taxes 89142075.67 68408617.04

Other cash payments related to operating

activities VII. 78 464329786.02 305696455.94

Subtotal of cash outflows from

operating activities 2463854852.91 2226883051.31

Net cash flow from operating

activities 87220645.17 364082055.08

149 / 304Appotronics Corporation Limited Annual Report 2024

II. Cash Flows from Investing Activities:

Cash receipts from disposals and

recovery of investments VII. 78 1912000000.00 1628530000.00

Cash receipts from investment income 35834257.51 12571132.08

Net cash receipts from disposals of fixed

assets intangible assets and other long-term 1518565.36 536758.74

assets

Net cash receipts from disposals of

subsidiaries and other business units

Other cash receipts related to investing

activities

Subtotal of cash inflows from investing

activities 1949352822.87 1641637890.82

Cash payments to acquire or construct

fixed assets intangible assets and other 89039158.51 115247559.31

long-term assets

Cash payments to acquire investments VII. 78 1625000001.00 1835530000.00

Net increase in pledged loans receivables

Net cash payments for acquisitions of

subsidiaries and other business units 19724965.16

Other cash payments related to investing

activities

Subtotal of cash outflows from

investing activities 1714039159.51 1970502524.47

Net cash flows from investment

activities 235313663.36 -328864633.65

III. Cash Flows from Financing Activities:

Cash receipts from capital contributions 46113350.89 87810995.80

Where: Cash receipts from capital

contributions from minority shareholders of

subsidiaries

Cash receipts from borrowings 230808800.85 345599598.92

Other cash receipts related to financing

activities

Subtotal of cash inflows from

financing activities 276922151.74 433410594.72

Cash repayments of borrowings 335263441.33 333613131.18

Cash payments for distribution of

dividends or profits or settlement of interest 78637160.24 63555733.03

expenses

Where: Payments for distribution of

dividends or profits to minority 23478300.00 11040000.00

shareholders of subsidiaries

Other cash payments related to financing

activities VII. 78 158531667.64 34444716.79

Subtotal of cash outflows from

financing activities 572432269.21 431613581.00

Net cash flows from financing

activities -295510117.47 1797013.72

IV. Effect of Foreign Exchange Rate

Changes on Cash and Cash Equivalents 1662685.05 6252057.48

V. Net Increase in Cash and Cash

Equivalents 28686876.11 43266492.63

Add: Opening balance of cash and cash

equivalents 1297848895.75 1254582403.12

VI. Closing Balance of Cash and Cash 1326535771.86 1297848895.75

150 / 304Appotronics Corporation Limited Annual Report 2024

Equivalents

Principal of the Company: LI Yi Person in Charge of the Accounting Work: WANG Yingxia

Person in Charge of the Accounting Body: WANG Yingxia

Cash Flow Statement of the Parent Company

January to December 2024

In RMB

Item Note 2024 2023

I. Cash Flows from Operating Activities:

Cash receipts from the sale of goods and

the rendering of services 1505375577.65 1449090688.82

Receipts of tax refunds 5856981.85 2864310.29

Other cash receipts related to operating

activities 36308869.74 45454875.70

Subtotal of cash inflows from

operating activities 1547541429.24 1497409874.81

Cash payments for goods purchased and

services received 1343140721.41 830707158.00

Cash payments to and on behalf of

employees 221240282.89 268406978.19

Payments of various types of taxes 36071194.79 22487347.11

Other cash payments related to operating

activities 84922617.58 56811448.09

Subtotal of cash outflows from

operating activities 1685374816.67 1178412931.39

Net cash flow from operating activities -137833387.43 318996943.42

II. Cash Flows from Investing Activities:

Cash receipts from disposals of

investments 1652000000.00 1628530000.00

Cash receipts from investment income 178087297.16 19816698.33

Net cash receipts from disposals of fixed

assets intangible assets and other 1265133.98 306703.74

long-term assets

Net cash receipts from disposals of

subsidiaries and other business units

Other cash receipts related to investing

activities 12261947.52 13463816.00

Subtotal of cash inflows from

investing activities 1843614378.66 1662117218.07

Cash payments to acquire or construct

fixed assets intangible assets and other 85890900.45 101218671.62

long-term assets

Cash payments to acquire investments 1430680716.00 1849343800.00

Net cash payments for acquisitions of

subsidiaries and other business units

Other cash payments related to investing

activities 21178392.42 6615975.54

Subtotal of cash outflows from

investing activities 1537750008.87 1957178447.16

Net cash flows from investment

activities 305864369.79 -295061229.09

151 / 304Appotronics Corporation Limited Annual Report 2024

III. Cash Flows from Financing Activities:

Cash receipts from capital contributions 46113350.89 87810995.80

Cash receipts from borrowings 155230654.50 215599598.92

Other cash receipts related to financing

activities 39131844.86 21408.88

Subtotal of cash inflows from

financing activities 240475850.25 303432003.60

Cash repayments of borrowings 103463441.33 100093137.18

Cash payments for distribution of

dividends or profits or settlement of 42422659.30 34742560.84

interest expenses

Other cash payments related to financing

activities 187525363.12 26087400.44

Subtotal of cash outflows from

financing activities 333411463.75 160923098.46

Net cash flows from financing

activities -92935613.50 142508905.14

IV. Effect of Foreign Exchange Rate

Changes on Cash and Cash Equivalents -224866.28 3601784.10

V. Net Increase in Cash and Cash

Equivalents 74870502.58 170046403.57

Add: Opening balance of cash and cash

equivalents 805019178.89 634972775.32

VI. Closing Balance of Cash and Cash

Equivalents 879889681.47 805019178.89

Principal of the Company: LI Yi Person in Charge of the Accounting Work: WANG Yingxia

Person in Charge of the Accounting Body: WANG Yingxia

152 / 304Appotronics Corporation Limited Annual Report 2024

Consolidated Statement of Changes in Owners’ Equity

January to December 2024

In RMB

2024

Equity attributable to owners of the parent company

Other equity instruments O

Item Paid-in capital Less: Other Spec Genera t

(or share Capital reserve Treasury comprehens ial Surplus l risk Undistributed h

Minority Total owner’s

Preferre Perpetu Subtotal interests equity capital) d shares al bonds Others shares ive income

reser reserve profits e

ve reserve r

s

I. Closing

balance of 462211338.00 1616489567.43 19377297.59 7550073.78 84873365.32 667122406.05 2818869452.99 -22231278.98 2796638174.01

last year

Add:

Changes in

accounting

policies

Correct

ions of prior

period

errors

Others

II. Opening

balance of

the current 462211338.00 1616489567.43 19377297.59 7550073.78 84873365.32 667122406.05 2818869452.99 -22231278.98 2796638174.01

year

III. Changes

for the year

(decrease is -2920193.00 -62335056.10 10514664.73 1081343.22 18286719.58 -22419706.84 -78821557.87 -47935943.10 -126757500.97

indicated by

“-”)

(I) Total

comprehens 1081343.22 27953093.89 29034437.11 -34154912.08 -5120474.97

ive income

(II) Owners’

contribution

s and -2920193.00 -63865902.25 10514664.73 -77300759.98 9697268.98 -67603491.00

reduction in

capital

1. Ordinary

shares 2922290.00 43191060.89 46113350.89 46113350.89

contributed

153 / 304Appotronics Corporation Limited Annual Report 2024

by owners

2. Capital

contribution

from

holders of

other equity

instruments

3.

Share-based

payment

recognized 5286386.03 5286386.03 541774.42 5828160.45

in owners’

equity

4. Others -5842483.00 -112343349.17 10514664.73 -128700496.90 9155494.56 -119545002.34

(III) Profit

distribution 18286719.58 -50372800.73 -32086081.15 -23478300.00 -55564381.15

1. Transfer

to surplus 18286719.58 -18286719.58

reserve

2. Transfer

to general

risk reserve

3.

Distribution

s to owners

(or -32086081.15 -32086081.15 -23478300.00 -55564381.15

shareholders

)

4. Others

(IV)

Transfers

within

owners’

equity

1.

Capitalizati

on of capital

reserve

2.

Capitalizati

on of

surplus

reserve

3. Loss

offset by

surplus

reserve

154 / 304Appotronics Corporation Limited Annual Report 2024

4. Retained

earnings

carried

forward

from

changes in

defined

benefit

plans

5. Retained

earnings

carried

forward

from other

comprehens

ive income

6. Others

(V) Special

reserve

1. Transfer

to special

reserve in

the period

2. Amount

utilized in

the period

(VI) Others 1530846.15 1530846.15 1530846.15

IV. Closing

balance of

the current 459291145.00 1554154511.33 29891962.32 8631417.00

103160084.9

0644702699.212740047895.12-70167222.082669880673.04

year

2023

Equity attributable to owners of the parent company

Other equity instruments O

Item Paid-in capital Less: Other Speci Genera t Minority Total owner’s

(or share Preferre Perpetu Capital reserve Treasury comprehens

al Surplus Undistributed h

capital) Others shares ive income reser reserve

l risk profits e Subtotal interests equity

d shares al bonds ve reserve r

s

I. Closing

balance of 457107538.00 1530752116.04 19377297.59 5736897.41 75519782.06 597924451.67 2647663487.59 93855136.07

2741518623.6

last year 6

Add:

Changes in

155 / 304Appotronics Corporation Limited Annual Report 2024

accounting

policies

Correct

ions of prior

period

errors

Others

II. Opening

balance of

the current 457107538.00 1530752116.04 19377297.59 5736897.41 75519782.06

597924451.6

72647663487.5993855136.07

2741518623.6

6

year

III. Changes

for the year

(decrease is 5103800.00 85737451.39 1813176.37 9353583.26 69197954.38 171205965.40 -116086415.0 55119550.35

indicated by 5

“-”)

(I) Total

comprehens 1813176.37 103186743.5 104999919.94 -86261711.68 18738208.26

ive income 7

(II)

Owners’

contribution

s and 5103800.00 85737451.39 90841251.39 -18784703.37 72056548.02

reduction in

capital

1. Ordinary

shares

contributed 5103800.00 82707195.80 87810995.80 87810995.80

by owners

2. Capital

contribution

from

holders of

other equity

instruments

3.

Share-based

payment

recognized 2758753.70 2758753.70 2591763.68 5350517.38

in owners’

equity

4. Others 271501.89 271501.89 -21376467.05 -21104965.16

(III) Profit

distribution 9353583.26 -33988789.19 -24635205.93 -11040000.00 -35675205.93

1. Transfer

to surplus 9353583.26 -9353583.26

reserve

156 / 304Appotronics Corporation Limited Annual Report 2024

2. Transfer

to general

risk reserve

3.

Distribution

s to owners

(or -24635205.93 -24635205.93 -11040000.00 -35675205.93

shareholder

s)

4. Others

(IV)

Transfers

within

owners’

equity

1.

Capitalizati

on of capital

reserve

2.

Capitalizati

on of

surplus

reserve

3. Loss

offset by

surplus

reserve

4. Retained

earnings

carried

forward

from

changes in

defined

benefit

plans

5. Retained

earnings

carried

forward

from other

comprehens

ive income

6. Others

(V) Special

reserve

157 / 304Appotronics Corporation Limited Annual Report 2024

1. Transfer

to special

reserve in

the period

2. Amount

utilized in

the period

(VI) Others

IV. Closing

balance of 462211338.00 1616489567.43 19377297.59 7550073.78 84873365.32 667122406.0 2818869452.99 -22231278.98 2796638174.0the current 5 1

year

Principal of the Company: LI Yi Person in Charge of the Accounting Work: WANG Yingxia Person in Charge of the Accounting Body: WANG Yingxia

Statement of Changes in Owners’ Equity of the Parent Company

January to December 2024

In RMB

2024

Item Paid-in capital Other equity instruments Less: Treasury Other Special Undistributed

(or share capital) Preferred Perpetual Capital reserve shares comprehensive reserve Surplus reserve profits Total owner’s equity

shares bonds Others income

I. Closing balance of last

year 462211338.00 1625258496.25 19377297.59 83595824.59 639288806.42 2790977167.67

Add: Changes in

accounting policies

Corrections of prior

period errors

Others

II. Opening balance of

the current year 462211338.00 1625258496.25 19377297.59 83595824.59 639288806.42 2790977167.67

III. Changes for the year

(decrease is indicated by -2920193.00 -52920601.50 10514664.73 18286719.58 132494395.02 84425655.37

“-”)

(I) Total comprehensive

income 182867195.75 182867195.75

(II) Owners’

contributions and -2920193.00 -54451447.65 10514664.73 -67886305.38

reduction in capital

1. Ordinary shares

contributed by owners 2922290.00 43191060.89 46113350.89

158 / 304Appotronics Corporation Limited Annual Report 2024

2. Capital contribution

from holders of other

equity instruments

3. Share-based payment

recognized in owners’ 5432785.09 5432785.09

equity

4. Others -5842483.00 -103075293.63 10514664.73 -119432441.36

(III) Profit distribution 18286719.58 -50372800.73 -32086081.15

1. Transfer to surplus

reserve 18286719.58 -18286719.58

2. Distributions to

owners (or shareholders) -32086081.15 -32086081.15

3. Others

(IV) Transfers within

owners’ equity

1. Capitalization of

capital reserve

2. Capitalization of

surplus reserve

3. Loss offset by surplus

reserve

4. Retained earnings

carried forward from

changes in defined

benefit plans

5. Retained earnings

carried forward from

other comprehensive

income

6. Others

(V) Special reserve

1. Transfer to special

reserve in the period

2. Amount utilized in the

period

(VI) Others 1530846.15 1530846.15

IV. Closing balance of

the current year 459291145.00 1572337894.75 29891962.32 101882544.17 771783201.44 2875402823.04

2023

Item Paid-in capital Other equity instruments Less: Treasury Other Capital reserve comprehensive Special Surplus reserve Undistributed (or share capital) Preferred Perpetual Others shares income reserve profits

Total owner’s equity

shares bonds

I. Closing balance of last year 457107538.00 1541789874.63 19377297.59 74242241.33 579741763.06 2633504119.43

159 / 304Appotronics Corporation Limited Annual Report 2024

Add: Changes in accounting

policies

Corrections of prior period

errors

Others

II. Opening balance of the

current year 457107538.00 1541789874.63 19377297.59 74242241.33 579741763.06 2633504119.43

III. Changes for the year

(decrease is indicated by “-”) 5103800.00 83468621.62 9353583.26 59547043.36 157473048.24

(I) Total comprehensive

income 93535832.55 93535832.55

(II) Owners’ contributions and

reduction in capital 5103800.00 83468621.62 88572421.62

1. Ordinary shares contributed

by owners 5103800.00 82707195.80 87810995.80

2. Capital contribution from

holders of other equity

instruments

3. Share-based payment

recognized in owners’ equity 761425.82 761425.82

4. Others

(III) Profit distribution 9353583.26 -33988789.19 -24635205.93

1. Transfer to surplus reserve 9353583.26 -9353583.26

2. Distributions to owners (or

shareholders) -24635205.93 -24635205.93

3. Others

(IV) Transfers within owners’

equity

1. Capitalization of capital

reserve

2. Capitalization of surplus

reserve

3. Loss offset by surplus

reserve

4. Retained earnings carried

forward from changes in

defined benefit plans

5. Retained earnings carried

forward from other

comprehensive income

6. Others

(V) Special reserve

1. Transfer to special reserve in

the period

2. Amount utilized in the period

(VI) Others

160 / 304Appotronics Corporation Limited Annual Report 2024

IV. Closing balance of the

current year 462211338.00 1625258496.25 19377297.59 83595824.59 639288806.42 2790977167.67

Principal of the Company: LI Yi Person in Charge of the Accounting Work: WANG Yingxia Person in Charge of the Accounting Body: WANG Yingxia

161 / 304Appotronics Corporation Limited Annual Report 2024

III. Company Profile

1. Profile

√ Applicable □ N/A

Appotronics Corporation Limited (hereinafter referred to as “Company” or “the Company”)

formally named as Shenzhen Appotronics Optoelectronics Technology Inc. (hereinafter referred to as

“Appotronics Inc.”) was jointly invested and established by LI Yi and XU Yanzheng registered in

Nanshan Branch of Market Supervision and Regulation Bureau of Shenzhen Municipality on October 24

2006 and headquartered in Shenzhen City Guangdong Province. The Company holds the business

license bearing the unified social credit code of 91440300795413991N. Its registered capital is RMB

459291145.00 divided into 459291145 shares (RMB 1.00 per share) including 459291145

unrestricted A shares. The Company’s shares were listed for trading on Shanghai Stock Exchange on

July 22 2019.The Company can be classified into the computer communication and other electronic equipment

manufacturing industry. It mainly engages in research and development production sales and leasing of

laser display core components and complete equipment and can provide customers with technical

research and development services and customized products. Its products mainly include automotive

optical products laser optical engines laser business and education projectors smart mini projectors

laser TVs laser large venue projectors and laser digital cinema projectors.These financial statements have been approved by the 7th meeting of the third Board of Directors

on April 28 2025 for public disclosure.IV. Basis of Preparation of Financial Statements

1. Basis of preparation

The Company’s financial statements are prepared on a going-concern basis.

2. Going concern

√ Applicable □ N/A

The Company has detected no events or circumstances that may cast significant doubt upon its

ability to continue as a going concern within 12 months from the reporting period.V. Significant Accounting Policies and Accounting Estimates

Specific accounting policies and accounting estimates:

√ Applicable □ N/A

Important note: The Company establishes the specific accounting policies and makes the specific

accounting estimates with respect to inventories depreciation of fixed assets construction in progress

intangible assets recognition of revenues and other transactions and events according to the actual

production and operation characteristics of the Company.

162 / 304Appotronics Corporation Limited Annual Report 2024

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

The financial statements prepared by the Company conform to the requirements of the Accounting

Standards for Business Enterprises and truly and completely reflect the Company’s financial position

operating results changes in shareholders’ equity cash flows and other related information.

2. Accounting period

The Company’s accounting year is from January 1 to December 31 of each calendar year.

3. Operating cycle

√ Applicable □ N/A

The Company has a relatively short operating cycle and determines the liquidity of assets and liabilities

on the basis of 12 months.

4. Functional currency

The Company adopts RMB as its functional currency.

5. Method and basis for determination of materiality

√ Applicable □ N/A

The Company prepares and discloses financial statements on the principle of materiality. With

respect to matters involving materiality determination criteria for the disclosure in the notes to these

financial statements the method for determining and the basis for selecting the materiality criteria are as

follows:

Item Materiality standard

Significant accounts receivable for

which the provision for bad debts is The individual amount is greater than 0.3% of the total assets

made individually

Recovery or reversal of the

provision for bad debts for The individual amount is greater than 0.3% of the total assets

significant accounts receivable

Significant accounts receivable

written off The individual amount is greater than 0.3% of the total assets

Major change in the book value of

contract assets The individual amount is greater than 0.3% of the total assets

Significant prepayments aged more

than 1 year The individual amount is greater than 0.3% of the total assets

Significant dividends receivable

aged more than 1 year The individual amount is greater than 0.3% of the total assets

Significant construction in progress The total amount of an individual project is greater than 0.3% of the total assets

Significant cash flow from investing

activities The individual amount is greater than 10% of the total assets

Significant overseas operating The total assets/total revenue exceeds 15% of the group’s total

entities assets/total revenue

Significant subsidiaries and The total assets/total revenue exceeds 15% of the group’s total

163 / 304Appotronics Corporation Limited Annual Report 2024

non-wholly-owned subsidiaries assets/total revenue

Significant joint ventures or The Company considers an associate whose total assets/total

associates revenue exceeds 10% of the group’s total assets/total revenue as a significant associate

Significant contingencies The individual amount is greater than 0.5% of the total assets

Significant events after the balance The individual amount is greater than 10% of the net profit

sheet date attributable to shareholders of the parent company for the current period and greater than RMB 10.0000 million

6. The accounting treatment of business combinations involving entities under common control

and not involving entities under common control

√ Applicable □ N/A

1. Accounting method for business combinations involving entities under common control

Assets and liabilities acquired from a business combination by the Company are measured at the

carrying amounts of the assets and liabilities of the combined party in the consolidated financial

statements of the ultimate controller at the date of combination. The Company made adjustment to

capital reserves according to the differences between the shares in the owners’ equity of the combined

party on the consolidated financial statements of the ultimate controlling party and the book value of

paid combination considerations or the face value of issued shares. In case the capital reserve is not

sufficient to absorb the difference the remaining balance is adjusted against the retained earnings.

2. Accounting method for business combinations not involving entities under common control

Where the cost of combination exceeds the Company’s interest in the fair value of the acquiree’s

identifiable net assets at the acquisition date the difference is recognized as goodwill. Where the cost of

combination is less than the Company’s interest in the fair value of the acquiree’s identifiable net assets

the Company firstly reassesses the fair values of the acquiree’s identifiable assets liabilities and

contingent liabilities and the measurement of the cost of combination. If after that reassessment the cost

of combination is still less than the Company’s interest in the fair value of the acquiree’s identifiable net

assets the acquirer recognizes the remaining difference immediately in profit or loss for the current

period.

7. Standard for determination of control and method of preparation of consolidated financial

statements

√ Applicable □ N/A

1. Determination of control

Control is the power of an investor over the investee to obtain variable returns by participating in

the relevant activities of the investee and to affect the amount of the return by exercising the power over

the investee.

2. Method of preparation of the financial statements

The parent company includes all of its controlled subsidiaries in its consolidated financial

statements. The consolidated financial statements are prepared by the parent company in accordance

164 / 304Appotronics Corporation Limited Annual Report 2024

with the Accounting Standards for Business Enterprises No. 33 - Consolidated Financial Statements on

the basis of the respective financial statements of the parent company and its subsidiaries by reference

to other relevant data.

8. Classification of joint arrangements and accounting treatment of joint operations

√ Applicable □ N/A

1. Joint arrangements are classified into joint operations and joint ventures.

2. When the Company is a party to a joint operation the Company recognizes the following items

related to its interest in the joint operation:

(1) the assets individually held by the Company and the Company’s share of the assets held jointly;

(2) the liabilities incurred individually by the Company and the Company’s share of the liabilities

incurred jointly;

(3) the Company’s revenue from the sale of its share of output of the joint operation;

(4) the Company’s share of revenue from the sale of assets by the joint operation; and

(5) the expenses incurred individually by the Company and the Company’s share of the expenses

incurred jointly.

9. Recognition of cash and cash equivalents

Cash equivalents are the Group’s short-term (generally due within 3 months from the acquisition

date) highly liquid investments that are readily convertible to known amounts of cash and which are

subject to an insignificant risk of changes in value.

10. Translation of transactions and financial statements denominated in foreign currencies

√ Applicable □ N/A

1. Translation of transactions denominated in foreign currencies

A foreign currency transaction is recorded in RMB on initial recognition by applying the spot

exchange rate on the date of the transaction. At the balance sheet date foreign currency monetary items

are translated into RMB using the spot exchange rates at the balance sheet date. Exchange differences

arising from such translations are recognized in profit or loss for the current period except for those

attributable to foreign currency borrowings that have been taken out specifically for the acquisition or

construction of qualifying assets and accrued interests. Non-monetary items denominated in foreign

currencies that are measured at historical cost are translated using the spot exchange rates ruling at the

transaction dates without adjusting the amounts in RMB. Non-monetary items denominated in foreign

currencies that are measured at fair value are translated using the spot exchange rates prevailing at the

dates when the fair value was determined with exchange differences arising from such translations

recognized in profit or loss for the current period or other comprehensive income.

2. Translation of financial statements denominated in foreign currencies

Asset and liability items on the balance sheet are translated at the spot exchange rate prevailing at

165 / 304Appotronics Corporation Limited Annual Report 2024

the balance sheet date; owners’ equity items other than “undistributed profits” are translated at the spot

exchange rates at the dates on which such items arose; income and expense items in the income

statement are translated at the exchange rates that approximate the actual spot exchange rates on the

dates of the transactions. Exchange differences arising from such translations are recognized in other

comprehensive income.

11. Financial instruments

√ Applicable □ N/A

1. Classification of financial assets and financial liabilities

On initial recognition the Company’s financial assets are classified into three categories including

(1) financial assets at amortized cost; (2) financial assets at fair value through other comprehensive

income; and (3) financial assets at fair value through profit or loss for the current period.Upon initial recognition the Company’s financial liabilities are classified into four categories

including (1) financial liabilities at fair value through profit or loss for the current period; (2) financial

liabilities arising as a result of the transfer of financial assets not meeting the criteria for derecognition or

continuing involvement in the financial assets transferred; (3) financial guarantee contracts not falling

under Clauses (1) and (2) and loan commitments not falling under Clause (1) and below market interest

rate; and (4) financial liabilities at amortized cost.

2. Recognition measurement and derecognition of financial assets and financial liabilities

(1) Recognition and initial measurement of financial assets and financial liabilities

When the Company becomes a party to a financial instrument contract a financial asset or liability

is recognized. Financial assets and liabilities are initially measured at fair value. Transaction costs

related to financial assets or liabilities at fair value through profit or loss are directly recognized in profit

or loss for the current period. Transaction costs related to other kinds of financial assets or liabilities are

included in their initially recognized amount. However the accounts receivable if do not contain any

significant financing component or are recognized by the Company without taking into consideration the

financing components under the contracts with a term of less than one year upon initial recognition are

initially measured at transaction price defined in the Accounting Standards for Business Enterprises

No.14 - Revenue.

(2) Subsequent measurement of financial assets

1) Financial assets at amortized cost

Financial assets at amortized cost are subsequently measured at amortized cost using the effective

interest method. Gains or losses arising from financial assets at amortized cost that do not belong to any

hedging relationship are recognized in profit or loss for the current period upon derecognition

reclassification amortization using the effective interest method or recognition of impairment.

2) Investments in debt instruments at fair value through other comprehensive income

Investments in debt instruments at fair value through other comprehensive income are subsequently

measured at fair value. Interest impairment losses or gains and exchange gains or losses calculated

166 / 304Appotronics Corporation Limited Annual Report 2024

using the effective interest method are recognized in profit or loss for the current period and other gains

or losses are recognized in other comprehensive income. Upon derecognition the aggregate gains or

losses previously recognized in other comprehensive income are transferred to profit or loss for the

current period.

3) Investments in equity instruments at fair value through other comprehensive income

Investments in debt instruments at fair value through other comprehensive income are subsequently

measured at fair value. Dividends received (other than those received as recovery of investment cost) are

recognized in profit or loss for the current period and other gains or losses are recognized in other

comprehensive income. Upon derecognition the accumulated gains or losses previously recognized in

other comprehensive income are transferred to retained earnings.

4) Financial assets at fair value through profit or loss for the current period

Financial assets at fair value through profit or loss for the current period are subsequently measured

at fair value with gains or losses arising therefrom including interest and dividend income recognized

in profit or loss for the current period except for the financial assets belonging to any hedging

relationship.

(3) Subsequent measurement of financial liabilities

1) Financial liabilities at fair value through profit or loss for the current period

Financial liabilities at fair value through profit or loss for the current period include financial

liabilities held for trading (including derivatives classified as financial liabilities) and financial liabilities

directly designated as at fair value through profit or loss for the current period. Such financial liabilities

are subsequently measured at fair value. Changes in the fair value of financial liabilities designated as at

fair value through profit or loss for the period arising out of changes in the Company’s own credit risk

are recognized in other comprehensive income unless such treatment will result in or increase any

accounting mismatch in profit or loss. Other gains or losses arising from such financial liabilities

including interest expenses and changes in fair value not arising out of changes in the Company’s own

credit risk are recognized in profit or loss for the current period except for the financial liabilities

belonging to any hedging relationship. Upon derecognition the accumulated gains or losses previously

recognized in other comprehensive income are transferred to retained earnings.

2) Financial liabilities arising as a result of the transfer of financial assets not meeting the criteria

for derecognition or continuing involvement in the financial assets transferred

Such financial liabilities are measured in accordance with the Accounting Standards for Business

Enterprises No. 23 - Transfer of Financial Assets.

3) Financial guarantee contracts not falling under Clauses 1) and 2) and loan commitments not

falling under Clause 1) and below market interest rate

Such financial liabilities are subsequently measured at the higher of * provision for impairment

losses determined according to the policy for impairment of financial instruments; and * balance of the

initially recognized amount after deduction of the accumulated amortization determined in accordance

with the relevant provisions of the Accounting Standards for Business Enterprises No.14 - Revenue.

167 / 304Appotronics Corporation Limited Annual Report 2024

4) Financial liabilities at amortized cost

Financial liabilities at amortized cost are subsequently measured at amortized cost using the

effective interest method. Gains or losses on financial liabilities at amortized cost that do not belong to

any hedging relationship are recognized in profit or loss for the current period upon derecognition or

amortization using the effective interest method.

(4) Derecognition of financial assets and financial liabilities

1) Financial assets are derecognized when:

* the contractual right to receive cash flows from the financial assets has expired; or

* the financial assets have been transferred and such transfer meets the criteria for derecognition of

financial assets as set forth in the Accounting Standards for Business Enterprises No. 23 - Transfer of

Financial Assets.

2) A financial liability (or part thereof) is derecognized when all or part of the outstanding

obligations thereon have been discharged.

3. Recognition and measurement of financial assets transferred

When a financial asset of the Company is transferred if substantially all the risks and rewards

incidental to the ownership of the financial asset have been transferred the financial asset is

derecognized and the rights and obligations incurred or retained in such transfer are separately

recognized as assets or liabilities (as the case may be); if substantially all the risks and rewards

incidental to the ownership of the financial asset have been retained the financial asset transferred

continues to be recognized. If the Company neither transferred nor retained a substantial portion of all

risks and rewards incidental to the ownership of the financial asset then: (1) if the Company does not

retain control over the financial asset the financial asset is derecognized and the rights and obligations

incurred or retained in such transfer are separately recognized as assets or liabilities (as the case may be);

and (2) if the Company retains control over the financial asset the financial asset continues to be

recognized to the extent of the Company’s continuing involvement in the financial asset transferred and

a corresponding liability is recognized.If an entire transfer of a financial asset meets the criteria for derecognition the difference between

(1) the carrying amount of the financial asset transferred at the date of derecognition; and (2) the sum of

the consideration received from the transfer and the portion of the accumulated amount of changes in

fair value directly recorded as other comprehensive income originally that corresponds to the part

derecognized (where the financial asset transferred is an investment in debt instruments at fair value

through other comprehensive income) is recognized in profit or loss for the current period. If part of a

financial asset is transferred and the part transferred entirely meets the criteria for derecognition the

total carrying amount of the financial asset immediately prior to the transfer is allocated between the part

derecognized and the part not derecognized in proportion to their relative fair value at the date of transfer

and the difference between (1) the carrying amount of the part derecognized; and (2) the sum of the

consideration received from the transfer of the part derecognized and the portion of the accumulated

amount of changes in fair value directly recorded as other comprehensive income originally that

168 / 304Appotronics Corporation Limited Annual Report 2024

corresponds to the part derecognized (where the financial asset transferred is an investment in debt

instruments at fair value through other comprehensive income) is recognized in profit or loss for the

current period.

4. Determination of fair value of financial assets and financial liabilities

The Company adopts the valuation techniques applicable to the current situations and with

sufficient data available and support of other information to determine the fair value of financial assets

and financial liabilities. The Company classifies the inputs used by the valuation techniques in the

following levels and uses them in turn:

(1) Level 1 inputs: quoted market price (unadjusted) in an active market for an identical asset or

liability available at the date of measurement;

(2) Level 2 inputs: inputs other than inputs included within Level 1 that are observable directly or

indirectly. This category includes quoted prices for similar assets or liabilities in active markets quoted

prices for identical or similar assets or liabilities in inactive markets observable inputs other than quoted

prices (such as interest rate and yield curves observable during regular intervals of quotation) and inputs

validated by the market;

(3) Level 3 inputs: related assets or liabilities inputs that are unobservable. This category includes

interest rate or stock volatility that cannot be directly observed or validated by observable market data

future cash flows from retirement obligation incurred in business combinations and financial forecasts

made using own data.

5. Impairment of financial instruments

The Company determines the impairment and assesses provision for impairment losses of financial

assets at amortized cost investments in debt instruments at fair value through other comprehensive

income contract assets lease receivable loan commitments other than financial liabilities designated at

fair value through profit or loss for the current period and financial guarantee contracts other than

financial liabilities designated at fair value through profit or loss for the current period and financial

liabilities arising as a result of the transfer of financial assets not meeting the criteria for derecognition or

continuing involvement in the financial assets transferred on the basis of expected credit losses.Expected credit loss is the weighted average of credit losses on financial instruments taking into

account the possibility of default. Credit loss is the difference between all contractual cash flows

receivable under the contract and estimated future cash flows discounted at the original effective interest

rate i.e. the present value of all cash shortage wherein the Company’s purchased or originated financial

assets that have become credit impaired are discounted at their credit-adjusted effective interest rate.With respect to purchased or originated financial assets that have become credit impaired at the

balance sheet date the Company recognizes a loss allowance equal to the accumulated amount of

changes in lifetime expected credit losses since initial recognition.With respect to lease receivable accounts receivable and contract assets that are formed from

transactions under the Accounting Standards for Business Enterprises No. 14 - Revenue the Company

uses the simple measurement method and recognizes a loss allowance equal to the lifetime expected

169 / 304Appotronics Corporation Limited Annual Report 2024

credit loss.With respect to financial assets not using the measurement methods stated above at each balance

sheet date the Company assesses whether the credit risk has increased significantly since initial

recognition and recognizes a loss allowance equal to the lifetime expected credit loss if the credit risk

has increased significantly since initial recognition or to the expected credit losses within the next 12

months if the credit risk has not increased significantly since initial recognition.The Company uses reasonable and supportable information including forward-looking information

and compares the possibility of default at the balance sheet date with the possibility of default upon

initial recognition to determine whether the credit risk of the financial instruments has increased

significantly since initial recognition.At the balance sheet date if the Company determines that a financial instrument only has low credit

risk the Company assumes that its credit risk has not increased significantly since initial recognition.The Company assesses expected credit risks and measures expected credit losses of financial

instruments individually or collectively. When assessing the financial instruments collectively the

Company includes the financial instruments in different groups according to their common risk

characteristics.At each balance sheet date the Company re-assesses the expected credit losses with the amount of

increase in or reversal of loss allowance recognized in profit or loss for the current period as impairment

losses or gains. With respect to a financial asset at amortized cost its carrying amount recorded in the

balance sheet is written off against the loss allowance. With respect to an investment in debt instruments

at fair value through other comprehensive income the Company recognizes the loss allowance in other

comprehensive income without reducing its carrying amount.

6. Offsetting of financial assets and financial liabilities

Financial assets and financial liabilities are presented in the balance sheet separately without

offsetting each other. However the Company may represent the financial assets and financial liabilities

on a net basis in the balance sheet only if: (1) the Company has a legal right that is currently enforceable

to set off the recognized financial assets and financial liabilities and (2) the Company intends either to

settle on a net basis or to realize the financial asset and settle the financial liability simultaneously.With respect to the transfer of financial assets not meeting the criteria for derecognition the

Company does not offset the financial assets transferred against the relevant liabilities.

12. Notes receivable

√ Applicable □ N/A

Category of combination and determination basis for which the provision of bad debts is made by

combination of credit risk characteristics

√ Applicable □ N/A

Refer to V.11 of Section X for details

170 / 304Appotronics Corporation Limited Annual Report 2024

Aging calculation method for identifying combination of credit risk characteristics based on the

age

√ Applicable □ N/A

Refer to V.11 of Section X for details

Determination standard for individually making provision for bad debts

√ Applicable □ N/A

Refer to V.11 of Section X for details

13. Accounts receivable

√ Applicable □ N/A

Category of combination and determination basis for which the provision of bad debts is made by

combination of credit risk characteristics

√ Applicable □ N/A

Category of combination Basis for determining Method for measuring expected credit a group losses

Bank acceptance bills receivable By reference to historical credit loss

Commercial acceptance bills Type of notes experience and taking into account the

receivable current situations and prediction of future

Accounts receivable - group of Receivables from economic conditions calculate the

receivables from related parties in related parties in the expected credit losses according to the

the scope of consolidation scope of consolidation default risk exposure and rate of lifetime expected credit loss.By reference to historical credit loss

experience and taking into account the

current situations and prediction of future

Accounts receivable - grouping Age economic conditions prepare a by age comparison table of the age of accounts

receivable and rate of expected credit

loss and calculate the expected credit

losses.By reference to historical credit loss

experience and taking into account the

Contract assets - group of Receivables from current situations and prediction of future

receivables from related parties in related parties in the economic conditions calculate the

the scope of consolidation scope of consolidation expected credit losses according to the

default risk exposure and rate of lifetime

expected credit loss.By reference to historical credit loss

experience and taking into account the

current situations and prediction of future

Contract assets - grouping by age Age economic conditions prepare a

comparison table of the age of contract

assets and rate of expected credit loss

and calculate the expected credit losses.By reference to historical credit loss

Other receivables - grouping by Age experience and taking into account the age current situations and prediction of future

economic conditions prepare a

171 / 304Appotronics Corporation Limited Annual Report 2024

Category of combination Basis for determining Method for measuring expected credit a group losses

comparison table of the age of other

receivables and rate of expected credit

loss and calculate the expected credit

losses.By reference to historic credit loss

experience and taking into account the

Other receivables - group of current situations and prediction of future

deposit and security receivable Nature of amounts economic conditions calculate the expected credit losses according to the

default risk exposure and 12-month or

rate of lifetime expected credit loss.By reference to historic credit loss

experience and taking into account the

Other receivables - group of current situations and prediction of future

withholding receivable Nature of amounts economic conditions calculate the expected credit losses according to the

default risk exposure and 12-month or

rate of lifetime expected credit loss.By reference to historic credit loss

experience and taking into account the

Other receivables - group of Receivables from current situations and prediction of future

receivables from related parties in related parties in the economic conditions calculate the

the scope of consolidation scope of consolidation expected credit losses according to the

default risk exposure and 12-month or

rate of lifetime expected credit loss.By reference to historical credit loss

experience and taking into account the

current situations and prediction of future

Long-term receivables - grouping Age economic conditions prepare a by age comparison table of the age of long-term

receivables and rate of expected credit

loss and calculate the expected credit

losses.Aging calculation method for identifying combination of credit risk characteristics based on the

age

√ Applicable □ N/A

Rate of

expected

credit loss for Rate of expected Rate of expected

Other receivables

Rate of expected

Age accounts credit loss for credit loss for long-term credit loss for receivable contract assets (%)

(%) receivables (%)

accounts receivable

(%)

Within 1 year

(including the 5.00 5.00 5.00 5.00

same below)

1-2 years 25.00 25.00 25.00 25.00

2-3 years 50.00 50.00 50.00 50.00

172 / 304Appotronics Corporation Limited Annual Report 2024

Rate of

expected

credit loss for Rate of expected Rate of expected

Other receivables

Rate of expected

Age accounts credit loss for credit loss for

receivable contract assets (%) long-term

credit loss for

receivables (%) accounts receivable (%) (%)

Over 3 years 100.00 100.00 100.00 100.00

The age of accounts receivable contract assets other receivables and long-term receivables shall

be calculated from the date of initial recognition of such amounts.Determination standard for individually making provision for bad debts

√ Applicable □ N/A

The Company makes provision of expected credit losses individually for receivables and contract assets

with obviously different credit risks and combinations of credit risks.

14. Receivables financing

√ Applicable □ N/A

Category of combination and determination basis for which the provision of bad debts is made by

combination of credit risk characteristics

√ Applicable □ N/A

Refer to V.11 of Section X for details

Aging calculation method for identifying combination of credit risk characteristics based on the

age

√ Applicable □ N/A

Refer to V.11 of Section X for details

Determination standard for individually making provision for bad debts

√ Applicable □ N/A

Refer to V.11 of Section X for details

15. Other receivables

√ Applicable □ N/A

Category of combination and determination basis for which the provision of bad debts is made by

combination of credit risk characteristics

√ Applicable □ N/A

Refer to V.11 of Section X for details

Aging calculation method for identifying combination of credit risk characteristics based on the

age

√ Applicable □ N/A

Refer to V.11 of Section X for details

Determination standard for individually making provision for bad debts

173 / 304Appotronics Corporation Limited Annual Report 2024

√ Applicable □ N/A

Refer to V.11 of Section X for details

16. Inventories

√ Applicable □ N/A

Categories of inventories costing method of inventories transferred out inventory counting

system and amortization method for low cost and short-lived consumable items and packaging

materials

√ Applicable □ N/A

1. Categories of inventories

Inventories mainly include finished goods or commodities held for sale in the ordinary course of

businesses work in progress in the process of production or materials and supplies consumed in the

process of production or rendering service.

2. Costing method of inventories upon delivery

The actual cost of inventories upon delivery is calculated using the moving weighted average

method.

3. Inventory counting system

The perpetual inventory system is maintained for stock system.

4. Amortization method for low cost and short-lived consumable items and packaging materials

(1) Low cost and short-lived consumable items

Low cost and short-lived consumable items are amortized using the immediate write-off method.

(2) Packaging materials

Low cost and short-lived consumable items are amortized using the immediate write-off method.Recognition standard and method for provision of impairment for inventory

√ Applicable □ N/A

At the balance sheet date inventories are measured at the lower of cost and net realizable value. If

the net realizable value is below the cost a provision for decline in value of inventories is made. For

inventories directly used for sale the net realizable value is determined as the estimated selling price in

the ordinary course of business less the estimated costs necessary to make the sale and relevant taxes.For inventories required for processing the net realizable value is determined as the estimated selling

price of finished goods in the ordinary course of business less the estimated costs of completion and the

estimated costs necessary to make the sale and relevant taxes. As at the balance sheet date if in the same

item of inventories some are agreed with contractual prices while the others are not the net realizable

value for such inventories is determined separately and compared with the costs of the two parts of

inventories distinctively so as to determine the provisions or reversal of provisions for decline in value

of inventories separately.Calculation method and determination basis of the net realizable value of each age combination

for which the net realizable value of inventories is determined by age

174 / 304Appotronics Corporation Limited Annual Report 2024

□ Applicable √ N/A

17. Contract assets

√ Applicable □ N/A

Recognition method and criteria of contract assets

√ Applicable □ N/A

Rights owned by the Company for unconditionally collecting the consideration from customers

(that is depending only on the time) are presented as receivables and rights for collecting the

consideration for goods that have been transferred to customers (depending on other factors than the

time) are presented as contract assets.Category of combination and determination basis for which the provision of bad debts is made by

combination of credit risk characteristics

√ Applicable □ N/A

Refer to V.11 of Section X for details

Aging calculation method for identifying combination of credit risk characteristics based on the

age

√ Applicable □ N/A

Refer to V.11 of Section X for details

Determination standard for individually making provision for bad debts

√ Applicable □ N/A

Refer to V.11 of Section X for details

18. Non-current assets or disposal groups classified as held for sale

□ Applicable √ N/A

Recognition standard and accounting method for non-current assets or disposal groups classified

as held for sale

□ Applicable √ N/A

Determination standard and presentation method for discontinued operation

□ Applicable √ N/A

19. Long-term equity investments

√ Applicable □ N/A

1. Judgments on joint control and significant influence

Joint control is the contractually agreed sharing of control of an arrangement which exists only

when decisions about the relevant activities of such arrangement require unanimous consent of the

parties sharing control. Significant influence is the power to participate in the financial and operating

policy making of an entity but does not control or jointly control over those policies.

2. Determination of investment cost

175 / 304Appotronics Corporation Limited Annual Report 2024

(1) In case of an equity investment acquired through a business combination involving entities

under common control if the acquirer pays consideration for the business combination by cash transfer

of non-monetary assets assumption of liabilities or issuance of equity securities the initial investment

cost of the long-term equity investment is the Company’s share of the carrying amount of the owners’

equity of the acquiree in the consolidated financial statements of the ultimate controller at the date of

combination. The difference between: (i) the initial investment cost of the long-term equity investment;

and (ii) the carrying amount of the consideration paid for the combination or the total par value of the

shares issued is treated as an adjustment to the capital reserve. In case the capital reserve is not sufficient

to absorb the difference the remaining balance is adjusted against the retained earnings.For a long-term equity investment acquired through business combination involving entities under

common control that is achieved through multiple transactions by steps the Company shall judge

whether such transactions constitute a package deal. If such transactions constitute a package deal the

Company accounts for such transactions as one transaction to acquire control. If such transactions do not

constitute a package deal the initial investment cost is the Company’s share of the carrying amount of

the net assets of the acquiree in the consolidated financial statements of the ultimate controller at the

date of combination. The difference between: (i) the initial investment cost of the long-term equity

investment at the date of combination; and (ii) the sum of the carrying amount of long-term equity

investment before the combination and the carrying amount of the consideration paid for acquisition of

the additional shares at the date of combination is adjusted against the capital reserve. In case the capital

reserve is not sufficient to absorb the difference the remaining balance is adjusted against the retained

earnings.

(2) In case of an equity investment acquired through a business combination not involving entities

under common control the initial investment cost is the fair value of the carrying amount of the

consideration paid for the combination at the date of acquisition.For a long-term equity investment acquired through a business combination not involving entities

under common control and achieved through multiple transactions by steps the accounting treatment

thereof in the separate financial statements is different from that in the consolidated financial statements

as stated below:

1) In the separate financial statements the sum of the carrying amount of the equity investment

originally held in the acquiree and the additional investment cost incurred is recorded as the initial

investment cost of the equity investment changed into the cost method.

2) In the consolidated financial statements it is required to judge whether such transactions

constitute a package deal. If such transactions constitute a package deal the Company accounts for such

transactions as one transaction to acquire control. If such transactions do not constitute a package deal

the Company re-measures the fair value of the equity held in the acquiree prior to the date of acquisition

and records the difference between the fair value and the carrying amount as investment income for the

current period; if the equity held in the acquiree prior to the date of acquisition involves other

comprehensive income under equity method such other comprehensive income is transferred to the

176 / 304Appotronics Corporation Limited Annual Report 2024

income of the period in which the date of acquisition falls except for other comprehensive income

arising from re-measurement of changes in net liabilities or net assets of defined benefit plans.

(3) In the event of no business combination: The initial investment cost is the purchase price

actually paid if it is acquired by cash or the fair value of the equity securities issued if it is acquired

through issuance of equity securities or determined in accordance with the Accounting Standards for

Business Enterprises No. 12 - Debt Restructuring if it is acquired through debt restructuring or

determined in accordance with the Accounting Standards for Business Enterprises No. 7 - Exchange of

Non-monetary Assets if it is acquired through exchange of non-monetary assets.

3. Subsequent measurement and recognition of profit or loss

Long-term equity investments in investees are measured using the cost method. Long-term equity

investments in associates and joint ventures are measured using the equity method.

20. Investment properties

None

21. Fixed assets

(1). Criteria for recognition

√ Applicable □ N/A

Fixed assets are tangible assets held for production of goods rendering of service lease or

operation and management with a service life of more than one accounting year. A fixed asset is

recognized if the economic benefits related to it are very likely to flow to the Company and its cost can

be reliably measured.

(2). Method of depreciation

√ Applicable □ N/A

Method of Depreciation Residual Annual Category depreciation period (years) value rate depreciation rate (%) (%)

Machinery and equipment Straight line method 5 5.00% 19.00%

Transportation equipment Straight line method 5 5.00% 19.00%

Electronic equipment and

others Straight line method 3-5 5.00% 19.00%-31.67%

Operating leased equipment Straight line method 3 7 5.00% 31.67% 13.57%

22. Construction in progress

√ Applicable □ N/A

1. A construction in progress is recognized if the economic benefits relating to it are very likely to

flow to the Company and its cost can be reliably measured. A construction in progress is measured at the

actual cost incurred before it is completed and ready for intended use.

2. When a construction in progress is ready for intended use it is transferred to fixed assets at its

177 / 304Appotronics Corporation Limited Annual Report 2024

actual construction cost. A construction in progress that is ready for intended use but the final settlement

of which has not yet been completed is transferred to fixed assets at estimated value first and after the

completion of final settlement the estimated value is adjusted according to the actual cost but the

accrued depreciation is not adjusted.Standards and timing for construction in progress transferred to

Category

fixed assets

Machinery and equipment and When reaching the standard required in the design or specified in the

operating leased equipment contract after installation and commissioning

Houses and buildings When reaching the working condition for its intended use

23. Borrowing costs

√ Applicable □ N/A

1. Recognition for capitalization of borrowing costs

Borrowing costs incurred by the Company that are directly attributable to the acquisition

construction or production of a qualifying asset are capitalized as part of the cost of that asset. Other

borrowing costs are recognized as expenses and charged to the current profit and loss.

2. Capitalization period of borrowing costs

(1) A borrowing cost is capitalized when all of the following conditions are met: 1) capital

expenditure has been incurred; 2) borrowing expenses have been incurred; and 3) activities related to the

acquisition construction or production of the asset that are necessary to prepare the asset for its intended

use or sale have commenced.

(2) Where acquisition construction or production of a qualified asset is interrupted abnormally and

the interruption period lasts for more than 3 months the capitalization of the borrowing costs shall be

suspended. The borrowing costs incurred during these periods shall be recognized as expenses for the

current period until the acquisition construction or production of a qualifying asset is resumed.

(3) Capitalization of borrowing costs shall be ceased when acquisition construction or production

of the qualifying asset has prepared for its intended use or sale.

3. Capitalization rate and capitalization amount of borrowing costs

As for the specific borrowings for the acquisition construction or production of assets qualifying

for capitalization the to-be-capitalized amount of interests shall be determined in light of the actual cost

incurred on the current specific borrowings (including the amortization of discounts or premiums

determined using the effective interest method) minus the income of interests earned from the unused

borrowings by depositing it in the bank or investment income from such borrowing by making it as a

temporary investment; where a general borrowing is used for the acquisition construction or production

of assets qualifying for capitalization the Company shall calculate and determine the to-be-capitalized

amount of interests on the general borrowing by multiplying the weighted average value of the

accumulative expenditures to asset minus the specific borrowing by the capitalization rate of the general

borrowing used.

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24. Biological assets

□ Applicable √ N/A

25. Oil and gas assets

□ Applicable √ N/A

26. Intangible assets

(1). Service life and determination basis thereof estimation amortization method or verification

process

√ Applicable □ N/A

1. Intangible assets include land use rights patents and software and are measured at cost initially.

2. An intangible asset with a finite service life is amortized over its service life in a systematical and

rational expected realization of economic benefits relative to the intangible asset or is amortized using

the straight line method if it is impossible to determine expected realization reliably. The details are as

follows:

Item Service life and determination basis thereof Amortization method

Land use rights 30 years/statutory rights Straight line method

Patents 10 years/statutory rights Straight line method

Software 3-5 years/statutory rights Straight line method

(2). Collection scope of R&D expenditures and relevant accounting method

√ Applicable □ N/A

(1) Personnel and labor expenses

The personnel and labor expenses include the salaries premiums for basic pension insurance

premiums for basic medical insurances premiums for unemployment insurances premiums for work

injury insurances premiums for maternity insurances and housing funds of the Company’s R&D staff

and the labor expenses of external R&D personnel.Where an R&D person serves multiple R&D projects at the same time the labor expenses are

recognized based on the records of working hours of the R&D personnel in respective R&D projects

provided by the management departments of the Company and are allocated in proportion among the

R&D projects.Where the R&D staff and external R&D personnel directly engaging in R&D activities also get

involved in non-R&D activities the Company allocates the labor expenses actually incurred for such

personnel between the R&D expenses and the production and operation expenses in proportion to the

actual working hours or by using another reasonable method based on the records of working hours of

such R&D personnel at different posts.

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(2) Expenses of direct investments

The expenses of direct investments refer to the relevant expenditures actually incurred by the

Company for conducting R&D activities including: 1) expenses of materials fuels and power directly

consumed; 2) expenses for developing and manufacturing molds and process equipment for intermediate

tests and product trials expenses for the procurement of samples sample devices and general tests not

constituting fixed assets and inspection expenses for trial products; and 3) the expenses for the

maintenance adjustment check inspection repair etc. of the instrument and devices used in R&D

activities.

(3) Depreciation expenses and long-term prepaid expenses

Depreciation expenses refer to the depreciation costs of instrument equipment and buildings used

in R&D activities.Where the instrument equipment and buildings used in R&D activities are also used for non-R&D

activities at the same time necessary records are kept for the use of such instrument equipment and

buildings and the depreciation expenses actually incurred are allocated between the R&D expenses and

the production and operation expenses by using a reasonable method based on the actual working hours

and areas in use.Long-term prepaid expenses refer to the long-term prepaid expenses incurred during the

reconstruction modification decoration and repair of R&D facilities which shall be collected

according to the expenditures actually incurred and be amortized on an average basis for the specified

period.

(4) Amortization expenses of intangible assets

The amortization expenses of intangible assets refer to the amortization expenses of software

intellectual property rights and non-patented technologies (know-how license design calculation

method etc.) used in R&D activities.

(5) Development expenses for outsourced R&D

Development expenses for outsourced R&D refer to the expenses incurred in R&D activities

conducted by other domestic and overseas institutions or individuals engaged by the Company (the

results of such R&D activities being owned by the Company and being closely related to the main

business of the Company).

(6) Other expenses

Other expenses refer to other expenses directly related to R&D activities except for the expenses

above including expenses for technical books and materials material translation expenses expert

consulting fees insurance premiums for high-tech R&D projects expenses for the search demonstration

evaluation appraisal and acceptance of R&D results expenses for the application registration and

agency of intellectual property rights meeting expenses travel expenses communication expenses etc.Expenditures incurred during the research phase of internal research and development projects are

recognized as current expenses when they occur. Expenditures on an internal research and development

project at development phase are recognized as an intangible asset if all the following conditions are met:

180 / 304Appotronics Corporation Limited Annual Report 2024

(1) it is technically feasible to complete the intangible asset so that it will be available for use or sale; (2)

it is intended to complete the intangible asset so that it will be available for use or sale; (3) the pattern in

which the intangible asset will generate economic results can demonstrate the existence of a market for

the output of the intangible asset or the intangible asset itself or if it is to be used internally the

usefulness of the intangible asset; (4) there are sufficient technical financial and other resources

available to complete the development activities and to use or sell the intangible asset; and (5) the

expenditures attributable to the development of the intangible asset can be reliably measured.

27. Impairment of long-term assets

√ Applicable □ N/A

For long-term equity investments fixed assets construction in progress right-of-use assets

intangible assets with a finite service life and other long-term assets if there’s an indication of

impairment at the balance sheet date the Company assesses their recoverable amount. Goodwill arising

from business combinations and intangible assets with an infinite service life are tested for impairment

every year regardless of whether there’s an indication of impairment. Goodwill is tested for impairment

together with the relevant groups of assets or combinations of groups of assets.If the recoverable amount of a long-term asset is less than its carrying amount the difference is

measured as impairment loss of the asset and recognized in profit or loss for the current period.

28. Long-term prepaid expenses

√ Applicable □ N/A

Long-term prepaid expenses are expenses that have already been incurred but should be amortized

over a period of more than one year (excluding one year). Long-term prepaid expenses are stated as the

amount actually incurred and shall be amortized evenly by stages within the benefit period or specified

period. If an item of long-term prepaid expenses will not benefit the subsequent periods the amortized

value of the item that has not yet been amortized is wholly transferred to profit or loss for the current

period.

29. Contract liabilities

√ Applicable □ N/A

The obligations of the Company for transferring goods to customers corresponding to considerations that

have been received or receivable are presented as contract liabilities.

30. Employee benefits

(1). Accounting treatment of short-term employee benefits

√ Applicable □ N/A

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The short-term employee benefits actually incurred are recognized as liabilities in the accounting period

during which employee services are rendered and included in profit or loss for the current period or the

cost of related assets.

(2). Accounting treatment of post-employment benefits

√ Applicable □ N/A

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

(1) In the accounting period during which employee services are rendered the amount in

contribution as calculated according to the defined contribution plan is recognized as liabilities and

included in profit or loss for the current period or the cost of related assets.

(2) The accounting treatment of a defined benefit plan generally involves the following steps:

1) According to the projected unit credit method use the unbiased and consistent actuarial

assumptions to estimate demographic variables and financial variables measure the obligation arising

from the defined benefit plan and determine the period to which the relevant obligation belongs.Meanwhile discount the obligation arising from the defined benefit plan in order to determine the

present value of the defined benefit plan obligation and the current service cost;

2) If the defined benefit plan has assets the deficit or surplus resulting after reducing the present

value of the defined benefit plan obligation by the fair value of the defined benefit plan is recognized as

a net liability or asset of the defined benefit plan. If the defined benefit plan has a surplus the net assets

of the defined benefit plan are measured at the lower of surplus in the defined benefit plan and asset

ceiling;

3) At the end of the reporting period the cost of employee benefits arising from the defined benefit

plan is recorded as service cost net interest on the net liabilities or net assets of the defined benefit plan

and changes arising from re-measurement of the net liabilities or net assets of the defined benefit plan

wherein the service cost and the net interest on the net liabilities or net assets of the defined benefit plan

are included in profit or loss for the current period or the cost of related assets and the changes arising

from re-measurement of the net liabilities or net assets of the defined benefit plan are included in other

comprehensive income which will not be reserved to profit or loss in subsequent periods but may be

transferred within the scope of equity.

(3). Accounting treatment of termination benefits

√ Applicable □ N/A

If termination benefits are provided to employees the liabilities of employee benefits from the

termination benefits are recognized at the earlier of the following and are recognized in the profit or loss

for the current period: (1) when the Company cannot unilaterally withdraw the termination benefits

provided due to the write-off of the labor relationship or lay-off suggestions; and (2) when the Company

recognizes costs or expenses in connection with restructuring involving termination benefits.

182 / 304Appotronics Corporation Limited Annual Report 2024

(4). Accounting treatment of other long-term employee benefits

□ Applicable √ N/A

31. Provisions

√ Applicable □ N/A

1. An obligation arising from any external guarantee litigation product quality warranty onerous

contract or other contingencies is recognized as a provision if it is a present obligation assumed by the

Company and it is probable that an outflow of resources embodying economic benefits will be required

to settle the obligation and the amount of the obligation can be reliably measured.

2. The amount recognized as a provision is the best estimate of the consideration required to settle

the present obligation. The carrying amount of provisions is reviewed at the balance sheet date.

32. Share-based payments

√ Applicable □ N/A

1. Categories of share-based payments

Share-based payments include equity-settled share-based payments and cash-settled share-based

payments

2. Accounting treatment for implementation modification and termination of share-based payment

plan

(1) Equity-settled share-based payments

Equity-settled share-based payments in exchange for services rendered by employees that can be

executed immediately upon being granted are measured at the fair value of the equity instruments at the

grant date and recognized as related costs or expenses with a corresponding adjustment to capital

reserve. At each balance sheet date during the vesting period equity-settled share-based payments in

exchange for services rendered by employees that cannot be executed until services in the vesting period

are completed or required performance conditions are satisfied are measured at the fair value of the

equity instruments at the grant date based on the best estimate of exercisable numbers of equity

instruments and recognized as related costs or expenses with a corresponding adjustment to capital

reserve.For equity-settled share-based payments in exchange for services rendered by other parties if the

fair value of services from other parties can be measured reliably they are measured at the fair value of

services from other parties at the date when such services are received. If the fair value of services from

other parties cannot be measured reliably but the fair value of the equity instruments can be measured

reliably they are measured at the fair value of the equity instruments at the date when such services are

received. The fair value of the equity instruments are recognized as related costs or expenses with a

corresponding increase in owners’ equity.

(2) Cash-settled share-based payments

Cash-settled share-based payments in exchange for services rendered by employees that can be

183 / 304Appotronics Corporation Limited Annual Report 2024

executed immediately upon being granted are recognized as related costs or expenses based on the fair

value of liabilities assumed by the Company at the grant date with a corresponding increase in liability.At each balance sheet date during the vesting period cash-settled share-based payments in exchange for

services rendered by employees that cannot be executed until services in the vesting period are

completed or required performance conditions are satisfied are measured at the fair value of liabilities

assumed by the Company based on the best estimate of exercisable conditions and recognized as related

costs or expenses and relevant liabilities.

(3) Modification and termination of share-based payment plan

In case the Company modifies a share-based payment plan if the modification increases the fair

value of the equity instruments granted the Company will include the incremental fair value of the

equity instruments granted in the measurement of the amount recognized for services received. If the

modification increases the number of the equity instruments granted the Company will include the fair

value of additional equity instruments granted in the measurement of the amount recognized for services

received. If the Company modifies the exercisable conditions of the share-based payment plan in a

manner beneficial to the employee the Company will consider the modified exercisable conditions when

dealing with exercisable conditions.If the modification decreases the fair value of the equity instruments granted the Company will

continue to measure the amount recognized for services received at the fair value of the equity

instruments at the grant date without including the decremental fair value of the equity instruments. If

the modification decreases the number of the equity instruments granted the Company will treat the

decreased number as the written off number of equity instruments granted. If the Company modifies the

exercisable conditions in a manner unbeneficial to the employee the Company will not consider the

modified exercisable conditions when dealing with exercisable conditions.If write-off or settlement of the equity instruments granted occurs (not due to unsatisfaction of

exercisable conditions) during the vesting period the Company will account for the write-off or

settlement of the equity instruments granted as an acceleration of vesting and recognize immediately the

amount that otherwise would have been recognized over the remainder of the vesting period.

33. Preferred shares perpetual bonds and other financial instruments

□ Applicable √ N/A

34. Revenue

(1). Accounting policies adopted for revenue recognition and measurement by the type of business

√ Applicable □ N/A

1. Principles for revenue recognition

At the beginning date of a contract the Company assesses the contract to identify individual

performance obligations contained in the contract and determine whether individual obligations are to be

performed during a period of time or at a specific time point.

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An obligation meeting one of the following conditions is one to be performed within a period of

time and the remaining are obligations to be performed at a specific time point: (1) the customer

receives and consumes the economic benefits from the performance of the Company when the Company

performs its obligations; (2) the customer can control the goods in progress during the performance of

the Company; or (3) the goods generated during the performance process of the Company have

irreplaceable uses and the Company is entitled to payment for the portion completed during the entire

contract term.The Company recognizes the revenue according to the performance progress during the period of

time for obligations to be performed during a period of time. If the performance progress cannot be

determined reasonably and the Company is expected to be paid based on the costs incurred the

Company recognizes the revenue according to the amount of costs incurred until the performance

progress can be determined reasonably. For obligations to be performed at a specific time point the

Company recognizes the revenue when the customer receives the control over the relevant goods or

services. The following will be considered when determining whether the customer has obtained the

control over the goods: (1) the Company has the present rights of receiving payments for such goods

that is the customer has the present obligation of making payment for the goods; (2) the Company has

transferred the legal title to the goods to the customer that is the customer has acquired the legal title to

the goods; (3) the Company has transferred the physical goods to the customer that is the customer is in

possession of the physical goods; (4) the Company has transferred the major risks and rewards of the

legal title to the goods to the customer that is the customer has acquired the major risks and rewards of

the legal title to the goods; (5) the customer has accepted the goods; and (6) there are other signs

indicating that the customer has acquired the control over the goods.

2. Principles of revenue measurement

(1) The Company measures the revenue according to the transaction price allocated to individual

performance obligations. The transaction price refers to the amount of the consideration expected to be

received by the Company on the basis of transferring goods or providing services to the customer

excluding amounts collected on behalf of a third party and amounts expected to be refunded to the

customer.

(2) If a contract contains a variable consideration the Company determines the best estimate of the

variable consideration according to the expected value or the most likely amount; however the

transaction price containing the variable consideration does not exceed the amount for which no material

reversal of recognized revenue is highly probable when relevant uncertainty is eliminated.

(3) If a contract contains a major financing portion the Company determines the transaction price

as the amount payable in cash when the customer obtains the control over the goods or services. The

difference between the transaction price and contract consideration is amortized using the effective

interest method during the term of the contract. If the Company expects that the interval between the

acquisition of the goods or services by the customer and the payment of prices by the customer will not

exceed one year from the commencement date of the contract no significant financing factor is

185 / 304Appotronics Corporation Limited Annual Report 2024

considered.

(4) If a contract contains two or more performance obligations at the beginning date of the contract

the Company allocates the transaction price to individual performance obligations according to the

relative proportion of the individual sale prices of the goods promised under such individual

performance obligations.

3. Specific methods for revenue recognition

(1) Revenue from sales of goods

Revenue from sales of goods denotes contractual obligations to be performed at a time point. Our

sales include sales to the domestic market and sales to foreign markets.Goods sold to the domestic market: 1) Under the direct sale model and the distribution mode the

Company recognizes the revenue when the goods sent have been delivered to customers with customers'

receipt given to the Company. For goods sold attached with return conditions the Company recognizes

the revenue according to the amount of the consideration expected to be received by the Company on the

basis of transferring goods to the customer and recognizes liabilities to write off the revenue according

to the expected amount to be refunded due to the return of goods; for goods required for installment and

inspection after sales the Company recognizes the revenue when such goods have been installed and

inspected with customers’ acceptance certificate given to the Company. Where the Company shares the

profit from the sales of products by downstream end customers the revenue from such profit sharing is

recognized at the best estimate of the variable consideration determined according to an expected value

which variable consideration is estimated reasonably at the time of revenue recognition. 2) Under the

commissioned sales mode the Company recognizes the revenue when it receives the list of

commissioned sales from the customer.Goods exported to overseas markets: The Company mainly adopts FCA for export of goods. Under

this mode the Company recognizes the revenue when it delivers goods at the designated location with

export customs clearance procedures completed.

(2) E-commerce platform revenue

In the e-commerce platform model the e-commerce platform is responsible for product promotion

and order management. Consumers place orders and pay directly to the e-commerce platform and the

e-commerce platform arranges third-party logistics through the Company or ships directly to the

consumer by the e-commerce platform after receiving the consumer’s payment. The specific revenue

recognition time points are: for domestic e-commerce platforms revenue is recognized according to the

time of end customers’ receipt; for foreign e-commerce platforms revenue is recognized after the

Company receives and checks the confirmation list of the e-commerce platform according to the

reconciliation time agreed in the contract.

(3) Other incomes

Other incomes denote contractual obligations to be performed at a time point/during a specific

period of time. For installation services provided by the Company the Company recognizes the revenue

when it has completed the services and received customers’ acceptance certificate; for repair and

186 / 304Appotronics Corporation Limited Annual Report 2024

maintenance services provided by the Company the Company recognizes the revenue when it has

completed the services and received payments; for patent license services provided by the Company the

Company recognizes the revenue when the patent license is delivered; for technology development

services provided by the Company the Company recognizes the revenue when it has completed the

services or when the agreed time point of service acceptance is reached.

(2). Different revenue recognition and measurement methods for businesses of the same type but

operated under different modes

□ Applicable √ N/A

35. Contract costs

□ Applicable √ N/A

36. Government grants

√ Applicable □ N/A

1. Government grants are recognized if (1) the Company meets the conditions attached to the

government grants; and (2) the Company will receive the government grants. Government grants in the

form of monetary assets are measured at the amount received or receivable. Government grants in the

form of non-monetary assets are measured at fair value or if their fair value is unavailable at nominal

amount.

2. Determination and accounting treatment of government grants related to assets

Government grants related to assets are government grants which are offered for purchasing

constructing or otherwise acquiring long-term assets as provided by the applicable government

documents. In the absence of such express provision in the applicable government documents

government grants related to assets are those with a primary condition that the Company should

purchase construct or otherwise acquire long-term assets. Government grants related to assets are offset

against the carrying amount of the relevant assets or recognized as deferred income. Government grants

related to assets recognized as deferred income shall be included in profit or loss over the service life of

the relevant assets on a reasonable and systemic basis. Government grants measured at nominal amount

are directly recognized in profit or loss for the current period. In case of sale transfer retirement or

damage of the relevant assets before the end of intended service life the balance of the unallocated

deferred income is transferred to profit or loss for the period in which the assets are disposed of.

3. Determination and accounting treatment of government grants related to income

Government grants related to income are government grants other than those related to assets.Government grants related to both assets and income in which it is difficult to make a distinction

between the portion related to assets and the portion related to income are wholly classified as

government grants related to income. Government grants related to income as compensation for

expenses or losses to be incurred in subsequent periods are recognized as deferred and in the period for

187 / 304Appotronics Corporation Limited Annual Report 2024

recognizing the relevant costs expenses or losses included in profit or loss for the current period or

offset against the relevant costs. Government grants related to income as compensation for costs

expenses or losses already incurred are directly included in profit or loss for the current period or offset

against the relevant costs.

4. Government grants related to daily operations of the Company are recognized in other income or

offset against the relevant costs and expenses depending on the nature of economic business.Government grants not related to daily operations of the Company are recognized in non-operating

revenue or expenses.

5. Accounting treatment of policy preferential loans and interest subsidies

(1) If the Ministry of Finance appropriates the interest subsidies to the lending bank who then

grants the loan to the Company at the policy preferential rate the loan is stated as the amount actually

received and the borrowing cost is calculated according to the principal of the loan and the policy

preferential rate.

(2) If the Ministry of Finance directly appropriates the interest subsidies to the Company the

interest subsidies are offset against the borrowing cost.

37. Leases

√ Applicable □ N/A

Determination basis and accounting method for simplified accounting of short-term lease and

low-value assets lease as the lessee

√ Applicable □ N/A

On the lease inception date the Company recognizes a lease with a lease term of not more than 12

months and not containing an option as a short-term lease; and recognizes a low-value assets lease for a

lease in which individually leased assets have a low value when they are new. If the Company subleases

or expects to sublease the leased asset the original lease is not recognized as a low-value assets lease.For short-term leases and low-value assets leases the Company recognizes lease payment in the

costs of relevant assets or the profit or loss for the current period by using the straight-line method in

each period during the lease term.Except for short-term leases and low-value assets leases subject to simplified treatment above on

the lease inception date the Company recognizes right-of-use assets and lease liabilities for leases.

(1) Right-of-use assets

Right-of-use assets are initially measured at cost; the cost includes: 1) initial measurement amount

of lease liabilities; 2) lease payments made on or before the lease inception date where relevant acquired

amount related to lease incentives is excluded if there are lease incentives; 3) initial direct expenses

incurred by the lessee; and 4) costs expected to be incurred by the lessee for dismantling and removing

the leased assets restoring the place of the leased assets or restoring the leased assets to the state

provided under lease provisions.The Company depreciates right-of-use assets by using the straight line method. If there is

188 / 304Appotronics Corporation Limited Annual Report 2024

reasonable certainty that the lessee will obtain ownership of the leased asset by the end of the lease term

the Company depreciates the leased asset over its remaining service life. If there is no reasonable

certainty that the lessee will obtain ownership of the leased asset by the end of the lease term the

Company depreciates the leased asset over the shorter of the lease term and its remaining service life.

(2) Lease liabilities

On the lease inception date the Company recognizes the present value of lease payments not paid

as lease liabilities. The interest rate implicit in the lease is used as the discount rate for calculating the

present value of the lease payments; if the interest rate implicit in the lease cannot be determined the

incremental borrowing interest rate of the Company is used as the discount rate. The difference between

the lease payments and the present value thereof is considered as unrecognized financing charges; in

each period during the lease term interest expenses are recognized in the profit or loss for the current

period according to the discount rate of the present value of recognized lease payments. Variable lease

payments not included in measurement of lease liabilities are recognized in the profit or loss for the

current period when they actually arise.Where after the lease inception date there are changes in the substantial fixed payment the

payables expected on the basis of the residual value of the guarantee the index or ratio used for

determining the lease payment and the evaluation results or actual exercise of purchase option renewal

option or lease termination option the Company re-measures the lease liability as per the present value

of the lease payment after change and adjusts the book value of the right-of-use assets accordingly.Where the book value of the right-of-use assets has been reduced to zero but the lease liability still

needs to be further reduced the Company includes the residual amount in the current profit or loss.Categorization standard and accounting method for leases as the lessor

√ Applicable □ N/A

On the lease inception date the Company classifies a lease in which almost all the risks and

rewards related to the ownership of the leased asset have been substantially transferred as a finance lease

and recognizes all other leases as operating leases.Operating lease

In each period during the lease term the Company recognizes lease payments as rental incomes by

using the straight line method; initial direct expenses incurred are capitalized and amortized on the same

basis for recognizing lease incomes and recognized in the profit or loss for each period. The variable

lease payments acquired by the Company that are related to operating leases and not recognized in lease

payments are recognized in the profit or loss for the current period when they actually occur.

38. Deferred tax assets and deferred tax liabilities

√ Applicable □ N/A

1. The difference between the tax base of an asset or liability and its carrying amount (or in case of

an item not recognized as asset or liability whose tax base can be determined according to the applicable

189 / 304Appotronics Corporation Limited Annual Report 2024

tax law the difference between its tax base and carrying amount) is recognized as a deferred tax asset or

deferred tax liability according to the tax rate applicable to the period in which the asset or liability is

expected to be recovered or settled.

2. Deferred tax assets are recognized to the extent of the amount of income tax payable that will be

available in future periods against which deductible temporary differences are deductible. At the balance

sheet date deferred tax assets not recognized in prior periods are recognized if there’s conclusive

evidence that it is probable that sufficient taxable income will be available in future periods against

which the deductible temporary differences are deductible.

3. At the balance sheet date the carrying amount of deferred tax assets is reviewed and reduced to

the extent that it is no longer probable that sufficient taxable income will be available in future periods to

allow the benefit of the deferred tax assets to be utilized. If it is probable that sufficient taxable income

will be probably available the reduced amount is reversed.

4. The income taxes and deferred taxes are included in profit or loss for the current period as

income tax expenses or gains except the income taxes arising from any: (1) business combination; or (2)

transaction or event directly recognized in owners’ equity.

5. The Company presents deferred tax assets and deferred tax liabilities as net amounts after

offsetting if: (1) the Company has the legal right to settle the current income tax assets and liabilities on

a net basis; and (2) the deferred tax assets and deferred tax liabilities are related to the income taxes

levied by the same taxation authority on the same taxation subject or are not related to the same taxation

subject but in every significant future period for reversing deferred income assets and liabilities the

involved taxation subjects intend to settle the current income tax assets and liabilities on a net basis or to

realize the assets and settle the liabilities simultaneously.

39. Other significant accounting policies and accounting estimates

□ Applicable √ N/A

40. Changes in significant accounting policies and accounting estimates

(1). Changes in significant accounting policies

√ Applicable □ N/A

In RMB

Name of line

items in

financial

Changes in accounting policies and associated reasons statements that Amount

have been affected

materially

affectedThe Company has implemented the provisions on “Accounting ofquality warranty with the nature of guarantee that are notindividual performance obligations” in the Interpretation of the Operating costs 23442636.08

Accounting Standards for Business Enterprises No. 18 released by

190 / 304Appotronics Corporation Limited Annual Report 2024

the Ministry of Finance since January 1 2024 and has made

retrospective adjustment to information in the comparable periodThe Company has implemented the provisions on “Accounting ofquality warranty with the nature of guarantee that are notindividual performance obligations” in the Interpretation of the Selling

Accounting Standards for Business Enterprises No. 18 released by expenses -23442636.08

the Ministry of Finance since January 1 2024 and has made

retrospective adjustment to information in the comparable periodThe Company has implemented the provisions on “Accounting ofquality warranty with the nature of guarantee that are not Cash paymentsindividual performance obligations” in the Interpretation of the for goods

Accounting Standards for Business Enterprises No. 18 released by purchased and 23442636.08

the Ministry of Finance since January 1 2024 and has made services

retrospective adjustment to information in the comparable period receivedThe Company has implemented the provisions on “Accounting ofquality warranty with the nature of guarantee that are not Other cashindividual performance obligations” in the Interpretation of the payments

Accounting Standards for Business Enterprises No. 18 released by related to -23442636.08

the Ministry of Finance since January 1 2024 and has made operating

retrospective adjustment to information in the comparable period activities

Other information

None

(2). Changes in significant accounting estimates

□ Applicable √ N/A

(3). The first implementation of new accounting standards or standard interpretations from 2024

onwards that involves adjusting the financial statements at the beginning of the year in which

they were first implemented

□ Applicable √ N/A

41. Others

□ Applicable √ N/A

VI. Taxes

1. Major categories of taxes and tax rates

Description of major categories of taxes and tax rates

√ Applicable □ N/A

Category of tax Basis of tax computation Tax rate

VAT payable is the difference of the output

Value-added tax tax calculated based on the incomes from

(VAT) selling goods and taxable services in 3% 6% 8% 9% 10% 13% accordance with the Tax Law less the input

tax allowed to be reduced in the period

City maintenance The actual amount of turnover tax paid 5% 7%

191 / 304Appotronics Corporation Limited Annual Report 2024

and construction

tax

Education

surcharges The actual amount of turnover tax paid 3%

Local education

surcharges The actual amount of turnover tax paid 2%

Enterprise income 6.5% 8.25% 8.7% 8.84% 15%

tax Taxable income 16.5% 19% 20% 21% 23.2% 25% 25.8%

Disclosure of taxpayers with different rates of enterprise income tax:

√ Applicable □ N/A

Taxpayer Rate of enterprise income tax (%)

The Company 15%

Formovie (Chongqing) Innovative Technology Co. Ltd. 15%

Appotronics Hong Kong Limited 8.25% 16.5%

Beijing Orient Appotronics Technology Co. Ltd. 20%

JoveAI Innovation Inc. 8.7% 8.84% 21%

Appotronics USA Inc. 8.84% 21%

Formovie Technology Inc 21%

JoveAI Limited Tax exemption

WEMAX LLC 21%

Appotronics Technology (Changzhou) Co. Ltd. 20%

Qingda Appotronics (Xiamen) Technology Co. Ltd. 20%

Shenzhen Appotronics Home Line Technology Co. Ltd. 20%

Shenzhen Appotronics Laser Technology Co. Ltd. 20%

Shenzhen Appotronics Xiaoming Technology Co. Ltd. 20%

JoveAI Asia Company Limited 20%

Formovie Limited 16.5%

Chongqing Ewei Ecommerce Co. Ltd. 20%

Chongqing Guangbo Ecommerce Co. Ltd. 20%

Shenzhen Orange Juice Energy Technology Co. Ltd. 20%

Tianjin Bonian Film Partnership (LP) Tax exemption

CINEAPPO Laser Cinema Technology (Beijing) Co. Ltd. 15%

Hong Kong Orange Juice Energy Technology Co. Limited 16.5%

Wemax Inc. 6.5% 21%

Shenzhen Weiwoqi Trading Co. Ltd. 20%

Yaoyouguang (Chongqing) Technology Co. Ltd. 20%

Appotronics International Limited 16.5%

Appotronics Intelligent Manufacturing (Shenzhen) Co. Ltd. 20%

Shenzhen Qianhai Taishi Investment Partnership (LP) Tax exemption

Shenzhen Muhe Information Technology Co. Ltd. 20%

Shenzhen Xingjin Information Technology Co. Ltd. 20%

Shenzhen Qingfeng Property Management Co. Ltd. 20%

Appotronics International 1 Limited 16.5%

Appotronics International 2 Limited 16.5%

Appotronics Hong Kong Holding Limited 16.5%

Appotronics Japan Co. Ltd. 15% 23.2%

Appotronics Technology (Hong Kong) Limited 16.5%

Appotronics Holding B.V. 19% 25.8%

Other taxpayers except above 25%

192 / 304Appotronics Corporation Limited Annual Report 2024

1. Appotronics Hong Kong Limited as domiciled in Hong Kong one of which can apply the two-level

income tax system namely applying the tax rate of 8.25% for the first HKD 2 million taxable income

and 16.5% for the remaining taxable income

2. JoveAI Limited as domiciled in the Cayman Islands is exempt from enterprise income tax

3. Appotronics USA Inc. as domiciled in the United States applies the federal enterprise income tax

rate of 21% and the California state enterprise income tax rate of 8.84%

4. JoveAI Innovation Inc. as domiciled in the United States applies the federal enterprise income tax

rate of 21% the California state enterprise income tax rate of 8.84% and the Delaware state enterprise

income tax rate of 8.7%

5. Formovie Technology Inc. as domiciled in the United States applies the federal enterprise income

tax rate of 21%

6. JoveAI Asia Company Limited as domiciled in Vietnam applies the enterprise income tax rate of

20%

7. WEMAX LLC as domiciled in the United States applies the federal enterprise income tax rate of

21%

8. Formovie Limited as domiciled in Hong Kong applies the income tax rage of 16.5%

9. Hong Kong Orange Juice Energy Technology Co. Limited as domiciled in Hong Kong applies the

income tax rate of 16.5%

10. Wemax Inc as domiciled in the United States applies the federal enterprise income tax rate of 21%

and the New York state enterprise income tax rate of 6.5%

11. Appotronics International Limited as domiciled in Hong Kong applies the income tax rate of 16.5%

12. Appotronics International 1 Limited as domiciled in Hong Kong applies the income tax rate of

16.50%

13. Appotronics International 2 Limited as domiciled in Hong Kong applies the income tax rage of

16.50%

14. Appotronics Hong Kong Holding Limited as domiciled in Hong Kong applies the income tax rage

of 16.50%

15. Appotronics Technology (Hong Kong) Limited as domiciled in Hong Kong applies the income tax

rate of 16.50%

16. Appotronics Japan Co. Ltd. as domiciled in Japan applies the legal person tax (i.e. corporate

income tax) at two rates: 15% and 23.2%. For companies with the registered capital less than or equal to

JPY 100 million the preferential tax rate of 15% is applicable for the profits below JPY 8.00 million.The tax rate 23.2% is applicable to other profits

17. Appotronics Holding B.V. as domiciled in the Netherlands applies the corporate income tax at two

rates: the preferential tax rate of 19% is applicable for the profits below EUR 200000 and the tax rate

25.8% is applicable to other profits

193 / 304Appotronics Corporation Limited Annual Report 2024

2. Tax incentives

√ Applicable □ N/A

1. Enterprise income tax

(1) On December 19 2022 the Company obtained the High-tech Enterprise Certificate (Certificate

No.: GR202244206480) jointly issued by Shenzhen Science Technology and Innovation Commission

Shenzhen Finance Bureau and Shenzhen Tax Service of State Taxation Administration with a valid term

of three years. Therefore it paid the enterprise income tax at a rate of 15% in 2024.

(2) On November 28 2022 Formovie (Chongqing) Innovative Technology Co. Ltd. obtained the

High-tech Enterprise Certificate (Certificate No.: GR202251101763) jointly issued by Chongqing

Municipal Science and Technology Bureau Chongqing Finance Bureau and Chongqing Tax Service of

State Taxation Administration with a valid term of three years. Therefore it paid the enterprise income

tax at a rate of 15% in 2024.

(3) On October 18 2022 CINEAPPO Laser Cinema Technology (Beijing) Co. Ltd. obtained the

High-tech Enterprise Certificate (Certificate No.: GR202211008942) jointly issued by Beijing Municipal

Science and Technology Commission Beijing Finance Bureau and Beijing Tax Service of State Taxation

Administration with a valid term of three years. Therefore it paid the enterprise income tax at a rate of

15% in 2024.

(4) In accordance with the relevant provisions of the Announcement of the Ministry of Finance and

State Taxation Administration on Taxation Policies to Further Supporting the Development of Micro and

Small Enterprises and Individually-owned Businesses (Ministry of Finance and State Taxation

Administration Announcement 2023 No. 12) small-sized low-profit enterprises may calculate taxable

incomes at the ratio of 25% and pay the corporate income taxes at the tax rate of 20%. The

implementation is extended to December 31 2027. The following companies are qualified for enjoying

such tax incentives: Beijing Orient Appotronics Technology Co. Ltd. Shenzhen Appotronics Display

Device Co. Ltd. Appotronics Technology (Changzhou) Co. Ltd. Qingda Appotronics (Xiamen)

Technology Co. Ltd. Shenzhen Appotronics Home Line Technology Co. Ltd. Shenzhen Appotronics

Laser Technology Co. Ltd. Shenzhen City Appotronics Xiaoming Technology Co. Ltd. Chongqing

Ewei Ecommerce Co. Ltd. Chongqing Guangbo Ecommerce Co. Ltd. Shenzhen Orange Juice Energy

Technology Co. Ltd. Shenzhen Weiwoqi Trading Co. Ltd. Yaoyouguang (Chongqing) Technology Co.Ltd. Appotronics Intelligent Manufacturing (Shenzhen) Co. Ltd. Shenzhen Muhe Information

Technology Co. Ltd. Shenzhen Xingjin Information Technology Co. Ltd. and Shenzhen Qingfeng

Property Management Co. Ltd.

2. Value-added tax (VAT)

(1) In accordance with the Notice of the Ministry of Finance and the State Taxation Administration

on Value-added Tax Policies for Software Products (Cai Shui [2011] No. 100) for self-developed and

produced software products sold by general VAT taxpayers the tax-refund-upon-collection policy is

applicable to the part of their actual VAT burden in excess of 3% after the VAT has been collected at a

tax rate of 17%. The Company Fengmi(Beijing) Technology Co. Ltd. and Shenzhen Appotronics

194 / 304Appotronics Corporation Limited Annual Report 2024

Software Technology Co. Ltd. are qualified for enjoying such tax incentives.

(2) In accordance with the Announcement of the Ministry of Finance and the State Taxation

Administration on Additional Deductions for Value-added Taxes of Advanced Manufacturing Enterprises

(Announcement No. 43 of 2023 by the Ministry of Finance and the State Taxation Administration)

advanced manufacturing enterprises are allowed to deduct an additional 5% of the deductible input tax

amount from the payable VAT amount. The Company and Formovie (Chongqing) Innovative

Technology Co. Ltd. are qualified for this tax incentive.

(3) The Vietnamese government issued the resolution No. 44/2023/ND-CP under which the VAT

rate of goods and services at the tax rate of 10% is reduced by 2% (to 8%). JoveAI Asia Company

Limited is qualified for this tax incentive from July 1 2023 to December 31 2024.

3. Others

□ Applicable √ N/A

VII. Notes to Items in the Consolidated Financial Statements

1. Cash and bank balances

√ Applicable □ N/A

In RMB

Item Closing balance Opening balance

Cash on hand 5817.52 5751.15

Bank deposits 1614794494.69 1371185024.55

Other monetary funds 39968994.00 15637773.36

Total 1654769306.21 1386828549.06

Where: Total overseas deposits 216548345.29 175001829.77

Other information

None

2. Held-for-trading financial assets

√ Applicable □ N/A

In RMB

Item Closing balance Opening Determination balance reason and basis

Financial assets at fair value through

profit or loss 179936739.21 514010000.00 -

Where:

Investment in equity

instruments 30000000.00 42880000.00 -

Structural deposits 471130000.00 -

Wealth management products 149936739.21

Total 179936739.21 514010000.00 -

195 / 304Appotronics Corporation Limited Annual Report 2024

Other information:

□ Applicable √ N/A

3. Derivative financial assets

□ Applicable √ N/A

4. Notes receivable

(1). Categories of notes receivable

√ Applicable □ N/A

In RMB

Item Closing balance Opening balance

Bank acceptances 1478064.00

Commercial acceptances 3986278.36 2557779.99

Financial company acceptance

bills 763245.77 4915464.72

Total 4749524.13 8951308.71

(2). Notes receivable pledged by the Company at the end of the period

□ Applicable √ N/A

(3). Notes receivable which are undue as at the balance sheet date but endorsed or discounted by

the Company at the end of the period

√ Applicable □ N/A

In RMB

Item Amount derecognized at the Amount not derecognized at the end of the period end of the period

Bank acceptances 2817325.00 [Note]

Total 2817325.00

[Note] The acceptors of such bank acceptance bills are commercial banks with high credit. Because it is

less probable that bank acceptance bills will not get paid at maturity the Company has derecognized

endorsed or discounted bank acceptance bills. However if such notes are unable to be paid at maturity

the Company will still be jointly and severally liable to the note holders pursuant to the Negotiable

Instruments Law.

(4). Disclosure by categories of provision for bad debts

√ Applicable □ N/A

In RMB

Closing balance Opening balance

Category Carrying amount Provision for bad Book debts value Carrying amount

Provision for bad Book

debts value

196 / 304Appotronics Corporation Limited Annual Report 2024

Percenta Percenta

Amount Percenta Amount ge of Percentage (%) provisio Amount ge (%) Amount

ge of

provisio

n (%) n (%)

Provision

for bad

debts made

individuall

y

Where:

Provision

for bad 499949 100.00 249974. 5.00 4749524. 9344637. 100.00 393328. 4.21 8951308.debts made 9.10 97 13 39 68 71

by group

Where:

Commercia

l 419608 209804. 3986278. 2692400. 134620. 2557779.acceptance 2.50 83.93 14 5.00 36 00 28.81 01 5.00 99

bills

Financial

company 803416. 16.07 40170.8 5.00 763245.7 5174173. 258708. 4915464.acceptance 60 3 7 39 55.37 67 5.00 72

bills

Bank

acceptance 1478064.00 15.82

1478064.

bills 00

Total 499949 100.00 249974. 5.00 4749524. 9344637. 100.00 393328. 8951308.9.10 97 13 39 68 4.21 71

Provision for bad debts made individually

□ Applicable √ N/A

Provision for bad debts made by group

√ Applicable □ N/A

Item by group: Financial company acceptance bills and commercial acceptance bills

In RMB

Closing balance

Name Notes receivable Provision for bad debts Percentage of provision (%)

Group of commercial

acceptance bills 4196082.50 209804.14 5.00

Financial company

acceptance bills 803416.60 40170.83 5.00

Total 4999499.10 249974.97 5.00

Description of provision for bad debts made by group

□ Applicable √ N/A

Provision for bad debts made in accordance with the general model of ECL

□ Applicable √ N/A

Basis for determination of each stage and percentage of provision for bad debts

Refer to V.11 of Section X for details.Description of significant changes in the balance of accounts receivable with changed provisions for

losses in the current period:

□ Applicable √ N/A

197 / 304Appotronics Corporation Limited Annual Report 2024

(5). Provision for bad debts

√ Applicable □ N/A

In RMB

Opening Changes for the current period Category Closing balance Provision Recovery or Write-off or Other balance reversal cancellation changes

Provision for

bad debts

made by 393328.68 143353.71 249974.97

group

Total 393328.68 143353.71 249974.97

Including significant amounts recovered or reversed from the current provision for bad debts:

□ Applicable √ N/A

Other information:

None

(6). Notes receivable actually canceled in the current period

□ Applicable √ N/A

In which significant amounts of notes receivable canceled are described below:

□ Applicable √ N/A

Description of cancellation of notes receivable:

□ Applicable √ N/A

Other information

□ Applicable √ N/A

5. Accounts receivable

(1). Disclosure by age

√ Applicable □ N/A

In RMB

Age Closing balance of carrying Opening balance of carrying amount amount

Within 1 year

Where: Subitems within 1 year

Subtotal of items within 1 year 321282627.05 174956389.44

1 to 2 years 6430683.47 18036240.20

2 to 3 years 4228742.93 19637948.14

Over 3 years 2756821.04 204186.09

Total 334698874.49 212834763.87

(2). Disclosure by categories of provision for bad debts

√ Applicable □ N/A

198 / 304Appotronics Corporation Limited Annual Report 2024

In RMB

Closing balance Opening balance

Carrying amount Provision for bad Provision for bad debts Carrying amount debts

Category

Amoun Percen

Percen Book Percen Percent Book

t tage Amount

tage of value Amount tage Amount age of value

(%) provisi (%) provision (%) on (%)

Provision

for bad

debts 30020 300209 1756821 175682

made 96.65 0.90 6.65 100.00 0.65 8.25 10.65 100.00

individual

ly

Where:

Provision

for bad

debts 331696 215014 3101953 1952665 149765 1802900

made by 777.84

99.1055.676.4822.1753.2291.7545.327.6707.90

group

Where:

Total 334698 245035 3101953 2128347 325447 1802900874.49 100.00 52.32 7.32 22.17 63.87 100.00 55.97 15.29 07.90

Provision for bad debts made individually:

√ Applicable □ N/A

In RMB

Closing balance

Name Carrying Provision for Percentage of

amount bad debts provision (%) Reason for provision

Total of petty The amounts are

receivables 3002096.65 3002096.65 100 expected to be unrecoverable

Total 3002096.65 3002096.65 100 -

Explanation about provision for bad debts made individually

□ Applicable √ N/A

Provision for bad debts made by group

√ Applicable □ N/A

Item by group: Group of age

In RMB

Closing balance

Name Accounts receivable Provision for bad debts Percentage of provision (%)

Within 1 year 319951078.70 15997554.04 5.00

1-2 years 5536834.85 1384208.77 25.00

2-3 years 4178342.93 2089171.50 50.00

Over 3 years 2030521.36 2030521.36 100.00

Total 331696777.84 21501455.67 6.48

Description of provision for bad debts made by group

□ Applicable √ N/A

Provision for bad debts made in accordance with the general model of ECL

□ Applicable √ N/A

Basis for determination of each stage and percentage of provision for bad debts

Refer to V.11 of Section X for details.

199 / 304Appotronics Corporation Limited Annual Report 2024

Description of significant changes in the balance of accounts receivable with changed provisions for

losses in the current period

□ Applicable √ N/A

(3). Provision for bad debts

√ Applicable □ N/A

In RMB

Changes for the current period

Category Opening Recovery Write-off or Other Closing balance Provision or reversal cancellation changes balance

Provision

for bad

debts made 17568210.65 2235396.65 518247.41 16283263.24 3002096.65

individually

Provision

for bad

debts made 14976545.32 6684392.20 164908.49 5426.64 21501455.67

by group

Total 32544755.97 8919788.85 518247.41 16448171.73 5426.64 24503552.32

Including significant amounts recovered or reversed from the current provision for bad debts:

□ Applicable √ N/A

Other information

None

(4). Accounts receivable actually canceled in the current period

√ Applicable □ N/A

In RMB

Item Cancellation amount

Accounts receivable actually canceled 16448171.73

In which significant amounts of accounts receivable canceled are described as below:

√ Applicable □ N/A

In RMB

Nature of Cancellation Reason for Write-off

Whether the

Entity accounts amount write-off procedure

amounts are from

receivable performed related-party transactions

The Company

verified the

The operating

Customer A Goods payment 16186263.24 counterparty is conditions of the Yes

de-registered counterparty and performed a proper

approval procedure

for the write-off

200 / 304Appotronics Corporation Limited Annual Report 2024

Total - 16186263.24 - - -

Description of cancellation of accounts receivable

□ Applicable √ N/A

(5). Top five closing balances of accounts receivable and contract assets categorized by debtors

√ Applicable □ N/A

In RMB

Proportion to

Closing the total

Closing balance balance Closing balance Closing

Entity of accounts of of accounts

closing balance

of accounts balance of

receivable contract receivable and contract assets receivable and

bad debt

assets contract assets provision

(%)

Top 1 120596567.87 120596567.87 35.78 6029828.39

Top 2 50569431.74 50569431.74 15.00 2528471.59

Top 3 24358333.97 24358333.97 7.23 1217916.71

Top 4 20649686.90 20649686.90 6.13 1032484.35

Top 5 14553601.00 14553601.00 4.32 727680.05

Total 230727621.48 230727621.48 68.46 11536381.09

Other information

None

Other information:

□ Applicable √ N/A

6. Contract assets

(1). Description of contract assets

√ Applicable □ N/A

In RMB

Closing balance Opening balance

Item Carrying Provision for bad Book value Carrying

Provision

amount amount for bad Book value debts debts

Warranty

security 2333026.25 591042.06 1741984.19 1867058.07 214817.78 1652240.29

receivable

Goods

payment 25000.00 12500.00 12500.00

Total 2333026.25 591042.06 1741984.19 1892058.07 227317.78 1664740.29

(2). Amount and reasons of major changes in the book value during the reporting period

□ Applicable √ N/A

(3). Disclosure by categories of provision for bad debts

√ Applicable □ N/A

201 / 304Appotronics Corporation Limited Annual Report 2024

In RMB

Closing balance Opening balance

Carrying amount Provision for bad Carrying amount Provision for bad

Catego debts debts

ry Percen Percen Book Percen Percen Book

Amount tage Amou tage of value Amou tage of value

(%) nt provisi

Amount tage nt provisi

on (%) (%) on (%)

Provisi

on for

bad

debts

made

individ

ually

Where:

Provisi

on for

bad

debts 233302 100.00 59104 25.33 174198 1892056.25 2.06 4.19 8.07 100.00

2273112.01166474

made 7.78 0.29

by

group

Total 233302 100.00 59104 25.33 174198 189205 100.00 227316.25 2.06 4.19 8.07 7.78 12.01

166474

0.29

Provision for bad debts made individually

□ Applicable √ N/A

Explanation about provision for bad debts made individually

□ Applicable √ N/A

Provision for bad debts made by group

√ Applicable □ N/A

Item by group: Group of age

In RMB

Closing balance

Name Contract assets Provision for bad debts Percentage of provision (%)

Within 1 year 551585.06 27579.26 5.00

1-2 years 1432571.19 358142.80 25.00

2-3 years 287100.00 143550.00 50.00

Over 3 years 61770.00 61770.00 100.00

Total 2333026.25 591042.06 25.33

Description of provision for bad debts made by group

□ Applicable √ N/A

Provision for bad debts made in accordance with the general model of ECL

□ Applicable √ N/A

Basis for determination of each stage and percentage of provision for bad debts

Refer to V.11 of Section X for details.Description of significant changes in the balance of contract assets with changed provisions for losses in

the current period:

202 / 304Appotronics Corporation Limited Annual Report 2024

□ Applicable √ N/A

(4). Description of provision for bad debts made on contract assets during the period

√ Applicable □ N/A

In RMB

Changes for the current period

Opening Provision in Recovery Item balance the current or Write-off/cancellation Other

Closing Reason

period reversal in in the period changes

balance

the period

Provision

for

impairment 227317.78 363724.28 591042.06

made by

group

Total 227317.78 363724.28 591042.06

Including significant amounts recovered or reversed from the current provision for bad debts

□ Applicable √ N/A

Other information

None

(5). Contract assets actually canceled in the current period

□ Applicable √ N/A

In which significant amounts of contract assets canceled are described as below

□ Applicable √ N/A

Description of cancellation of contract assets

□ Applicable √ N/A

Other information:

□ Applicable √ N/A

7. Receivables financing

(1) Categories of receivables financing

√ Applicable □ N/A

In RMB

Item Closing balance Opening balance

Bank acceptance bills 12552177.09 11387400.00

Total 12552177.09 11387400.00

(2) Receivables financing pledged by the Company at the end of the period

□ Applicable √ N/A

203 / 304Appotronics Corporation Limited Annual Report 2024

(3) Receivables financing which are undue as at the balance sheet date but endorsed or discounted

by the Company at the end of the period

√ Applicable □ N/A

In RMB

Item Amount derecognized at the Amount not derecognized at the end of the period end of the period

Bank acceptance bills 468511287.87

Total 468511287.87

The acceptors of bank acceptance bills are commercial banks with high credit. Because it is less

probable that bank acceptance bills will not get paid at maturity the Company has derecognized

endorsed or discounted bank acceptance bills. However if such notes are unable to be paid at maturity

the Company will still be jointly and severally liable to the note holders pursuant to the Negotiable

Instruments Law.

(4) Disclosure by categories of provision for bad debts

√ Applicable □ N/A

In RMB

Closing balance Opening balance

Carrying amount Provision for Provision for

Categor bad debts

Carrying amount bad debts

y Percent Percent Book Percent Percent Book

Amount age Amo age of value Amo age of value

(%) unt provisi

Amount age

(%) unt provision (%) on (%)

Provisio

n for

bad

debts

made

individu

ally

Where:

Provisio

n for

bad 1255217 1255217 1138740 1138740

debts 7.09 100.00 7.09 0.00 100.00 0.00

made by

group

Where:

Bank

accepta 12552177.09 100.00

125521711387401138740

nce bills 7.09 0.00

100.000.00

Total 1255217 100.00 1255217 1138740 11387407.09 7.09 0.00 100.00 0.00

Provision for bad debts made individually

□ Applicable √ N/A

Explanation about provision for bad debts made individually

□ Applicable √ N/A

Provision for bad debts made by group

204 / 304Appotronics Corporation Limited Annual Report 2024

√ Applicable □ N/A

Item by group: Group of bank acceptance bills

In RMB

Closing balance

Name Financing amount

receivable Provision for bad debts

Percentage of

provision (%)

Group of bank

acceptance bills 12552177.09

Total 12552177.09

Description of provision for bad debts made by group

□ Applicable √ N/A

Provision for bad debts made in accordance with the general model of ECL

□ Applicable √ N/A

Basis for determination of each stage and percentage of provision for bad debts

N/A

Description of significant changes in the balance of receivables financing with changed provisions for

losses in the current period:

□ Applicable √ N/A

(5) Provision for bad debts

□ Applicable √ N/A

Including significant amounts recovered or reversed from the current provision for bad debts:

□ Applicable √ N/A

Other information

None

(6) Receivables financing actually canceled in the current period

□ Applicable √ N/A

In which significant amounts of receivables financing canceled are described as below:

□ Applicable √ N/A

Description of cancellation

□ Applicable √ N/A

(7) Changes in amount and fair value of receivables financing:

□ Applicable √ N/A

205 / 304Appotronics Corporation Limited Annual Report 2024

(8) Other information:

□ Applicable √ N/A

8. Prepayments

(1). Disclosure of prepayments by age

√ Applicable □ N/A

In RMB

Age Closing balance Opening balance Amount Percentage (%) Amount Percentage (%)

Within 1

year 26346479.90 84.74 22863911.50 65.12

1 to 2 years 3769584.88 12.12 5136169.79 14.63

2 to 3 years 279373.00 0.90 725259.48 2.06

Over 3 years 696415.98 2.24 6387321.05 18.19

Total 31091853.76 100.00 35112661.82 100.00

Reasons for overdue settlement of prepayments with significant amounts aged more than 1 year:

None

(2). Top five closing balances of prepayments categorized by receivers

√ Applicable □ N/A

In RMB

Entity Closing balance Proportion to the total closing balance of prepayments (%)

Top 1 17120495.01 55.06

Top 2 1481335.00 4.76

Top 3 1001988.22 3.22

Top 4 981744.03 3.16

Top 5 814867.96 2.62

Total 21400430.22 68.82

Other information

None

Other information

□ Applicable √ N/A

9. Other receivables

Presented by items

√ Applicable □ N/A

In RMB

Item Closing balance Opening balance

Interests receivable - -

Dividends receivable 14233032.00 14023746.00

Other receivables 30871369.76 16674941.55

Total 45104401.76 30698687.55

Other information

206 / 304Appotronics Corporation Limited Annual Report 2024

□ Applicable √ N/A

Interests receivable

(1). Categories of interests receivable

□ Applicable √ N/A

(2). Significant interests overdue

□ Applicable √ N/A

(3). Disclosure by categories of provision for bad debts

□ Applicable √ N/A

Provision for bad debts made individually

□ Applicable √ N/A

Explanation about provision for bad debts made individually

□ Applicable √ N/A

Provision for bad debts made by group

□ Applicable √ N/A

(4). Provision for bad debts made in accordance with the general model of ECL

□ Applicable √ N/A

Basis for determination of each stage and percentage of provision for bad debts

N/A

Description of significant changes in the balance of interests receivable with changed provisions for

losses in the current period

□ Applicable √ N/A

(5). Provision for bad debts

□ Applicable √ N/A

Including significant amounts recovered or reversed from the current provision for bad debts:

□ Applicable √ N/A

Other information

None

(6). Interests receivable actually canceled in the current period

□ Applicable √ N/A

In which significant amounts of interests receivable canceled are described as below

□ Applicable √ N/A

207 / 304Appotronics Corporation Limited Annual Report 2024

Description of cancellation

□ Applicable √ N/A

Other information

□ Applicable √ N/A

Dividends receivable

(7). Dividends receivable

√ Applicable □ N/A

In RMB

Project (or investee) Closing balance Opening balance

Dividend distribution from GDC Technology

Limited (BVI) 14233032.00 14023746.00

Total 14233032.00 14023746.00

(8). Significant dividends receivable aged more than 1 year

√ Applicable □ N/A

In RMB

Project (or investee) Closing Age Reason for

Whether impairment

balance non-recovery has occurred and the basis for its judgment

They have not

reached an

agreement

Dividend distribution through It is less probable that

from GDC Technology 14233032.00 Over 3 negotiation on the counterparty has a

Limited (BVI) years certain matters credit risk and no

and the payment impairment has occurred

has not yet been

made

Total 14233032.00 - - -

(9). Disclosure by categories of provision for bad debts

□ Applicable √ N/A

Provision for bad debts made individually

□ Applicable √ N/A

Explanation about provision for bad debts made individually

□ Applicable √ N/A

Provision for bad debts made by group

□ Applicable √ N/A

(10). Provision for bad debts made in accordance with the general model of ECL

□ Applicable √ N/A

208 / 304Appotronics Corporation Limited Annual Report 2024

Basis for determination of each stage and percentage of provision for bad debts

N/A

Description of significant changes in the balance of dividends receivable with changed provisions for

losses in the current period:

□ Applicable √ N/A

(11). Provision for bad debts

□ Applicable √ N/A

Including significant amounts recovered or reversed from the current provision for bad debts:

□ Applicable √ N/A

Other information

None

(12). Dividends receivable actually canceled in the current period

□ Applicable √ N/A

In which significant amounts of dividends receivable canceled are described as below

□ Applicable √ N/A

Description of cancellation

□ Applicable √ N/A

Other information

□ Applicable √ N/A

Other receivables

(13). Disclosure by age

√ Applicable □ N/A

In RMB

Age Closing balance of carrying Opening balance of carrying amount amount

Within 1 year

Where: Subitems within 1 year

Subtotal of items within 1 year 22489758.44 8746169.48

1 to 2 years 3891042.27 2540156.84

2 to 3 years 990308.26 333955.74

Over 3 years 5997517.55 6002199.51

Total 33368626.52 17622481.57

(14). Categories by the nature of other receivables

√ Applicable □ N/A

In RMB

Nature of other receivables Closing balance of carrying Opening balance of carrying

209 / 304Appotronics Corporation Limited Annual Report 2024

amount amount

Deposits/margins/petty cash 21868352.58 10696150.09

Withholding 249804.97 393531.80

temporary receivables 11237224.95 6532799.68

Compensation receivable 13244.02

Total 33368626.52 17622481.57

(15). Provision for bad debts

√ Applicable □ N/A

In RMB

Stage I Stage II Stage III

Provision for bad debts 12-month Lifetime ECL Lifetime ECL ECL in the (without credit (with credit Total

future impairment) impairment)

Balance as at January 1 2024 839924.44 107615.58 947540.02

Balance as at January 1 2024 in

the current period

--transferred to Stage II -167847.79 167847.79

--transferred to Stage III -94402.45 94402.45

--reversed to Stage II

--reversed to Stage I

Provision 797136.20 658178.08 94402.46 1549716.74

Reversal

Write-off

Cancellation

Other changes

Balance as at December 31

20241469212.85839239.00188804.912497256.76

Basis for determination of each stage and percentage of provision for bad debts

N/A

Description of significant changes in the balance of other receivables with changed provisions for losses

in the current period:

□ Applicable √ N/A

Basis for recognizing the amount of bad debt provisions and evaluating whether the credit risk of

financial instruments has been increased significantly in the current period:

□ Applicable √ N/A

(16). Provision for bad debts

□ Applicable √ N/A

Including significant amounts recovered or reversed from the current provision for bad debts

□ Applicable √ N/A

Other information

None

210 / 304Appotronics Corporation Limited Annual Report 2024

(17). Other receivables actually canceled in the current period

□ Applicable √ N/A

In which significant amounts of other receivables canceled are described as below

□ Applicable √ N/A

Description of cancellation of other receivables

□ Applicable √ N/A

(18). Top five closing balances of other receivables categorized by debtors

√ Applicable □ N/A

In RMB

Proportion to Provision

Entity Closing the balance of Nature of other

for bad

balance other receivables Age debts

receivables (%) Closing balance

Top 1 8892678.98 26.65 Deposits/margins/petty cash Within 1 year 444633.95

Top 2 3574618.00 10.71 Deposits/margins/petty cash Over 3 years 178730.90

Top 3 3140000.00 9.41 Deposits/margins/petty cash Within 1 year 157000.00

Top 4 2597394.06 7.78 temporary receivables Within 1 year 129869.70

Top 5 1405483.20 4.21 temporary receivables Within 1 year 70274.16

Total 19610174.24 58.76 - - 980508.71

(19). Presentation in other receivables due to centralized fund management

□ Applicable √ N/A

Other information

□ Applicable √ N/A

10. Inventories

(1). Categories of inventories

√ Applicable □ N/A

In RMB

Closing balance Opening balance

Provision for Provision for

Item Carrying decline in value of Carrying decline in value of

amount inventories/impair Book value amount inventories/impair Book value ment of contract ment of contract

performance cost performance cost

Raw 386235116 63804884.56 322430232 443084635 41537753.59 401546882materials .95 .39 .75 .16

Work in 22426326. 21565881. 14472238. 13993318.progress 20 860444.63 57 10 478919.67 43

211 / 304Appotronics Corporation Limited Annual Report 2024

Goods on 270178013

hand .09 45009487.56

22516852526000355446351531.91213652022.53.90.99

Turnover

materials

Consuma

ble

biological

assets

Contract

performan 3684751.3 3684751.3 4121745.0 2567665.8

ce cost 9 9 2

1554079.220

Materials

in transit 676811.80 676811.80 180136.65 180136.65

Goods

upon 15392556. 3522474.01 11870082. 19510688. 3546615.45 15964072.delivery 94 93 24 79

Materials

for

consigned 11230106.48 1107146.90

10122959.8934579.8491879.018442700.8

processin 58 6 5

g

Total 709823682 595519245 750307578 656346799.85 114304437.66 .19 .52 93960778.85 .67

(2). Data resources recognized as inventory

□ Applicable √ N/A

(3). Provision for decline in value of inventories and impairment of contract performance cost

√ Applicable □ N/A

In RMB

Increase of the current Decrease of the current

Item Opening period period balance Reversal or Closing balance Provision Others write-off Others

Raw materials 41537753.59 35382623.10 1355.38 13116847.51 63804884.56

Work in progress 478919.67 860444.63 478919.67 860444.63

Goods on hand 46351531.91 24328390.76 75540.66 25745975.77 45009487.56

Goods upon

delivery 3546615.45 1894545.09 5856.36 1924542.89 3522474.01

Materials for

consigned 491879.01 736255.18 120987.29 1107146.90

processing

Contract

performance cost 1554079.22 1554079.22

Total 93960778.85 63202258.76 82752.40 42941352.35 114304437.66

Reason for reversing or writing off the provisions for decline in value of inventories in the current period

√ Applicable □ N/A

Reason for

Item Specific basis for determining the net reversing the Reason for writing off

realizable value provision for the provision for decline decline in value of in value of inventory

inventory

212 / 304Appotronics Corporation Limited Annual Report 2024

Reason for

Item Specific basis for determining the net reversing the Reason for writing off

realizable value provision for the provision for decline decline in value of in value of inventory

inventory

The net realizable value of raw

materials is determined as the historical For the inventories The Company has

average selling price or actual average of which a provision consumed/sold the

selling price of finished goods in the for decline in value inventories for which a Raw materials ordinary course of business less the has been made in provision for decline in

estimated costs of completion and the prior period their value of inventory has

estimated costs necessary to make the net realizable values been made during the

sale and relevant taxes. have increased current period

The net realizable value is determined

Work in as the historical average selling price or The Company has

progress and actual average selling price of finished consumed the inventories

materials for goods in the ordinary course of for which a provision for

consigned business less the estimated costs of

No reversal decline in value of

processing completion and the estimated costs inventory has been made necessary to make the sale and relevant during the current period

taxes.For inventories directly used for sale For the inventories The Company has

the net realizable value is determined as of which a provision used/sold the inventories

Goods on hand the historical average selling price or

for decline in value for which a provision for

actual average selling price less the has been made in

estimated costs necessary to make the prior period their

decline in value of

net realizable values inventory has been made sale and relevant taxes. have increased during the current period

For goods delivered the net realizable The Company has sold

Goods upon value is determined as the selling price

the inventories for which

delivery or actual average selling price less the No reversal

a provision for decline in

estimated costs necessary to make the value of inventory has

sale and relevant taxes. been made during the current period

For the contract performance cost the The Company has

net realizable value is determined as the consumed/sold the

Contract actual selling price of goods in the inventories for which a

performance ordinary course of business less the No reversal provision for decline in

cost estimated costs of completion and the value of inventory has

estimated costs necessary to make the been made during the

sale and relevant taxes current period

Provision for decline in value of inventory made by group

□ Applicable √ N/A

Standard for making provision for decline in value of inventory by group

□ Applicable √ N/A

(4). Description of capitalized amount of borrowing costs included in the closing balance of

inventories and the standard and basis for the calculation thereof

□ Applicable √ N/A

213 / 304Appotronics Corporation Limited Annual Report 2024

(5). Description of amortization of contract performance cost during the period

√ Applicable □ N/A

In RMB

Item Opening Increase of the

Amortization of Reversal or

balance current period the current period write-off

Closing balance

Entrusted

development 2495126.88 8571100.96 7381476.45 3684751.39

Overseas

freight 72538.92 72538.92

Subtotal 2567665.80 8571100.96 7454015.37 3684751.39

Other information

□ Applicable √ N/A

11. Held-for-sale assets

□ Applicable √ N/A

12. Non-current assets due within one year

√ Applicable □ N/A

In RMB

Item Closing balance Opening balance

Debt investments due within one

year

Other debt investments due within

one year

Long-term receivables due within

one year 70070776.42 51499061.03

Total 70070776.42 51499061.03

Debt investments due within one year

□ Applicable √ N/A

Other debt investments due within one year

□ Applicable √ N/A

Other description of non-current assets due within one year

None

13. Other current assets

√ Applicable □ N/A

In RMB

Item Closing balance Opening balance

214 / 304Appotronics Corporation Limited Annual Report 2024

Contract acquisition cost

Cost of returned goods receivable 866499.32 1611745.50

Input VAT to be deducted 64075729.81 46217482.57

Prepaid enterprise income tax 474438.57 588042.04

Total 65416667.70 48417270.11

Other information

None

14. Debt investments

(1). Description of debt investments

□ Applicable √ N/A

Changes in the provision for impairment of debt investments in the current period

□ Applicable √ N/A

(2). Debt investments with significant amounts at the end of the period

□ Applicable √ N/A

(3). Description of provision for impairment

□ Applicable √ N/A

Basis for determination of each stage and percentage of provision for impairment

N/A

Description of significant changes in the balance of debt investments with changed provisions for losses

in the current period

□ Applicable √ N/A

Basis for recognizing the amount of provisions for impairment and evaluating whether the credit risk of

financial instruments has been increased significantly in the current period

□ Applicable √ N/A

(4). Debt investments actually canceled in the current period

□ Applicable √ N/A

In which significant amounts of debt investments canceled are described as below

□ Applicable √ N/A

Description of cancellation of debt investments

□ Applicable √ N/A

Other information

□ Applicable √ N/A

215 / 304Appotronics Corporation Limited Annual Report 2024

15. Other debt investments

(1). Description of other debt investments

□ Applicable √ N/A

Changes in the provision for impairment of other debt investments in the current period

□ Applicable √ N/A

(2). Other debt investments with significant amounts at the end of the period

□ Applicable √ N/A

(3). Description of provision for impairment

□ Applicable √ N/A

Basis for determination of each stage and percentage of provision for impairment:

N/A

Description of significant changes in the balance of other debt investments with changed provisions for

losses in the current period

□ Applicable √ N/A

Basis for recognizing the amount of provisions for impairment and evaluating whether the credit risk of

financial instruments has been increased significantly in the current period

□ Applicable √ N/A

(4). Other debt investments actually canceled in the current period

□ Applicable √ N/A

In which significant amounts of other debt investments canceled are described as below

□ Applicable √ N/A

Description of write-off of other debt investments

□ Applicable √ N/A

Other information

□ Applicable √ N/A

16. Long-term receivables

(1). Description of long-term receivables

√ Applicable □ N/A

In RMB

Closing balance Opening balance Range of

Item Carrying Provision for Book value Carrying Provision for discount amount bad debts amount bad debts Book value rate

Installment

payment 40253314.94 3062438.61 37190876.33 28410593.87 2410050.74 26000543.13

3.60%-4.30

%

Where: 1139261.43 1139261.43 711250.41 711250.41 3.60%-4.30

216 / 304Appotronics Corporation Limited Annual Report 2024

Financing %

income not

realized

Total 40253314.94 3062438.61 37190876.33 28410593.87 2410050.74 26000543.13

(2). Disclosure by categories of provision for bad debts

√ Applicable □ N/A

In RMB

Closing balance Opening balance

Carrying Provision for bad Carrying Provision for bad

Categ amount debts amount debts

ory Perc Percenta Book Perc Percenta Book

Amoun enta

t ge Amount

ge of value Amoun enta ge of value

provision t ge Amount provision

(%)(%)(%)(%)

Provi

sion

for

bad

debts

made

indivi

duall

y

Where:

Provis

ion

for

bad 40253 100. 3062438 37190 28410 100. 2410050 2600054

debts 314.94 00 .61 7.61 876.33 593.87 00 .74 8.48 3.13

made

by

group

Where:

Total 40253 100. 3062438 7.61 37190 28410 100. 2410050 2600054314.94 00 .61 876.33 593.87 00 .74 8.48 3.13

Provision for bad debts made individually

□ Applicable √ N/A

Explanation about provision for bad debts made individually

□ Applicable √ N/A

Provision for bad debts made by group

√ Applicable □ N/A

Item by group: Group of age

In RMB

Closing balance

Name Long-term receivables Provision for bad debts Percentage of provision (%)

Group of age 40253314.94 3062438.61 7.61

Total 40253314.94 3062438.61 7.61

217 / 304Appotronics Corporation Limited Annual Report 2024

Description of provision for bad debts made by group

□ Applicable √ N/A

(3). Provision for bad debts made in accordance with the general model of ECL

□ Applicable √ N/A

Basis for determination of each stage and percentage of provision for bad debts

N/A

Description of significant changes in the balance of long-term receivables with changed provisions for

losses in the current period:

□ Applicable √ N/A

Basis for recognizing the amount of bad debt provisions and evaluating whether the credit risk of

financial instruments has been increased significantly in the current period

□ Applicable √ N/A

(4). Provision for bad debts

√ Applicable □ N/A

In RMB

Changes for the current period

Category Opening Recovery Write-off balance Provision or or Other

Closing

balance

reversal cancellation changes

Provision

for bad

debts made 2410050.74 6491974.25 5839586.38 3062438.61

by group

Total 2410050.74 6491974.25 5839586.38 3062438.61

Including significant amounts recovered or reversed from the current provision for bad debts

□ Applicable √ N/A

Other information

“Other changes” indicate the provision for impairment corresponding to the long-term receivables

reclassified to be due within one year

(5). Long-term receivables actually canceled in the current period

□ Applicable √ N/A

In which significant amounts of long-term receivables canceled are described as below:

□ Applicable √ N/A

Description of cancellation of long-term receivables

□ Applicable √ N/A

218 / 304Appotronics Corporation Limited Annual Report 2024

Other information

□ Applicable √ N/A

17. Long-term equity investments

(1). Description of long-term equity investments

√ Applicable □ N/A

In RMB

Changes for the current period

Investm Adjust Closing ment balance

Openin Additio Decre ent Declare

Investees g nal ased profit

in Other Provisi of

or loss other equity

d cash Closing

balance investm invest compr change dividen

on for Others balance provisio

under ds or impair n for ent ment equity ehensi s ve profits

ment impairm

method ent income

I. Joint venture

Subtotal

II. Associates

GDC

Technology 138890 -39383 -1527 -133424770

Limited (BVI) 614.32

78.54465.23.55-

Shenzhen

Zhongjian 58361 -11249 624203

Technology 62.11 68.52 1530846.15 9.74

Co. Ltd.Subtotal 144726 -50633 -1527 -131893924 624203776.43 47.06 465.23 .40 9.74

Total 144726 -50633 -1527 -131893924 624203776.43 47.06 465.23 .40 9.74

(2). Impairment test of long-term equity investments

□ Applicable √ N/A

Other information

In the changes occurred in the current period other changes of GDC Technology Limited (BVI)

indicate the amount for which the Company lost significant influences on the associate and from the

foreign exchange translation;

Other changes of Shenzhen Zhongjian Technology Co. Ltd. indicates an additional investment

made by another shareholder which diluted the amount of the equity interests held by the Company.

219 / 304Appotronics Corporation Limited Annual Report 2024

18. Investment in other equity instruments

(1). Description of investment in other equity instruments

√ Applicable □ N/A

In RMB

Changes for the current period Reasons for

Gains Losses Dividends income Total gains Total losses

designating as

Opening recognized in recognized in recognized in recognized in

financial

Item balance Additional Decreased other other

Closing recognized other other assets at fair

investment investment comprehensive comprehensive Others balance for the value through

income in the income in the current

comprehensive comprehensive

period income income

other

current period current period comprehensive income

Shen Zhen

Timewaying

Technology 7075419.38 7075419.38

Co. Ltd.Shenzhen

Bevix

Technology

Co. Ltd.Total 7075419.38 7075419.38 -

(2). Description of derecognition in the current period

□ Applicable √ N/A

Other information

√ Applicable □ N/A

Reason for designating as equity instrument investments at fair value through other comprehensive income

The Company’s equity investments in Shen Zhen Timewaying Technology Co. Ltd. and Shenzhen Bevix Technology Co. Ltd. are mainly for promoting future business cooperation

rather than making transactions hence they are designated as investments in equity instruments at fair value through other comprehensive income.Other information

The cost of Shenzhen Bevix Technology Co. Ltd. is RMB 4900000.00 and the fair value change is RMB -4900000.00.

220 / 304Appotronics Corporation Limited Annual Report 2024

19. Other non-current financial assets

√ Applicable □ N/A

In RMB

Item Closing balance Opening balance

Financial assets classified as financial assets at fair value

through profit or loss 84000000.04

Where: Equity investment 84000000.04

Total 84000000.04

Other information

□ Applicable √ N/A

20. Investment properties

Measurement mode of investment properties

N/A

21. Fixed assets

Presented by items

√ Applicable □ N/A

In RMB

Item Closing balance Opening balance

Fixed assets 272101764.36 336276793.84

Disposal of fixed assets

Total 272101764.36 336276793.84

Other information

□ Applicable √ N/A

Fixed assets

(1). Description of fixed assets

√ Applicable □ N/A

In RMB

Machinery

Item and Transportation

Electronic Operating

equipment equipment

equipment leased Total

and others equipment

I. Cost:

1. Opening

balance 173037618.56 2227745.42 64110956.44 665210386.30 904586706.72

2. Increase of

the current period 33162559.00 1780175.56 14027076.23 49115417.74 98085228.53

(1)

Purchase 33088479.82 1762157.51 14012971.63 48863608.96

(2)

Transfer from 49115417.74 49115417.74

221 / 304Appotronics Corporation Limited Annual Report 2024

construction in

progress

(3)

Currency 74079.18 18018.05 14104.60 106201.83

movement

3. Decrease 7806166.20 613529.51 3275932.17 67527405.15 79223033.03

(1)

Disposal or 6300785.74 613529.51 3184197.55 1807692.20 11906205.00

retirement

(2)

Transfer to 1505380.46 91734.62 65719712.95 67316828.03

inventories

4. Closing

balance 198394011.36 3394391.47 74862100.50 646798398.89 923448902.22

II. Accumulated depreciation

1. Opening

balance 97159897.17 855965.15 38239794.57 425973312.89 562228969.78

2. Increase of

the current period 25771262.54 619043.76 9324039.52 97148812.65 132863158.47

(1)

Provision 25713796.11 617333.67 9308037.91 97148812.65 132787980.34

(2)

Currency 57466.43 1710.09 16001.61 75178.13

movement

3. Decrease

of the current 3769053.12 582853.03 2534906.47 46833148.54 53719961.16

period

(1)

Disposal or 3563163.99 582853.03 2478799.15 1712438.20 8337254.37

retirement

(2)

Transfer to 205889.13 56107.32 45120710.34 45382706.79

inventories

4. Closing

balance 119162106.59 892155.88 45028927.62 476288977.00 641372167.09

III. Provision for impairment

1. Opening

balance 1935931.82 4145011.28 6080943.10

2. Increase of

the current period 2880760.14 1459374.62 4340134.76

(1)

Provision 2880760.14 1459374.62 4340134.76

3. Decrease

of the current 70778.93 375328.16 446107.09

period

(1)

Disposal or 70778.93 375328.16 446107.09

retirement

4. Closing

balance 4745913.03 5229057.74 9974970.77

IV. Book value

1. Closing

balance 74485991.74 2502235.59 29833172.88 165280364.15 272101764.36

2. Opening

balance 73941789.57 1371780.27 25871161.87 235092062.13 336276793.84

222 / 304Appotronics Corporation Limited Annual Report 2024

(2). Temporarily idle fixed assets

√ Applicable □ N/A

In RMB

Item Original book Accumulated Provision for value depreciation impairment Book value Remark

Operating

leased 73469852.37 58277015.65 6353324.57 8839512.15

equipment

Total 73469852.37 58277015.65 6353324.57 8839512.15

(3). Fixed assets leased out under operating lease

√ Applicable □ N/A

In RMB

Item Closing balance of book value

Operating leased equipment 156440852.00

Subtotal 156440852.00

(4). Fixed assets of which certificates of title have not been obtained

□ Applicable √ N/A

(5). Impairment test of fixed assets

□ Applicable √ N/A

Other information

□ Applicable √ N/A

Disposal of fixed assets

□ Applicable √ N/A

22. Construction in progress

Presented by items

√ Applicable □ N/A

In RMB

Item Closing balance Opening balance

Construction in progress 406450625.01 347777138.86

Total 406450625.01 347777138.86

Other information

□ Applicable √ N/A

Construction in progress

(1). Description of construction in progress

√ Applicable □ N/A

In RMB

Item Closing balance Opening balance

223 / 304Appotronics Corporation Limited Annual Report 2024

Provision Provision

Carrying for

amount impairm Book value

Carrying for

amount impairm Book value

ent ent

Headquarter

buildings 395113584.12 395113584.12 344481907.55 344481907.55

Assets to be

leased 1816827.27 1816827.27 3295231.31 3295231.31

Decoration

constructio 9520213.62 9520213.62

n

Total 406450625.01 406450625.01 347777138.86 347777138.86

(2). Changes in significant constructions in progress for the current period

√ Applicable □ N/A

In RMB

Amou Amount Amou Interest

Openi injected nt of

Projec ng Increase

nt Oth Closi Con

transf er ng as a struc accum

Where: capitali

t Budget balanc of the erred dec balan proporti tion ulated

Capitalize zation Sourc

name amount current on of capital

d interest rate for e of

e period to reas ce budget prog ized for the the funds fixed es ress period period

assets amount interes(%) t (%)

Headq

uarter 490491 344481 5063167 3951 80.5 1536 Self-f

buildi 009.17 907.55 6.57 1358 80.55 5 4406.

4511222.38 2.96 unded

ngs 4.12 73 capital

39511536

Total 490491 344481 5063167009.17 907.55 6.57 1358 - - 4406.

4511222--

4.1273.38

(3). Provision for impairment losses for construction in progress in the current period

□ Applicable √ N/A

(4). Impairment test of construction in progress

□ Applicable √ N/A

Other information

□ Applicable √ N/A

Materials for construction

(5). Description of materials for construction

□ Applicable √ N/A

23. Productive biological assets

(1). Productive biological assets measured at cost

□ Applicable √ N/A

224 / 304Appotronics Corporation Limited Annual Report 2024

(2). Impairment test of productive biological assets measured at cost

□ Applicable √ N/A

(3). Productive biological assets measured at fair value

□ Applicable √ N/A

Other information

□ Applicable √ N/A

24. Oil and gas assets

(1) Description of oil and gas assets

□ Applicable √ N/A

(2) Impairment test of oil and gas assets

□ Applicable √ N/A

Other information

None

25. Right-of-use assets

(1) Description of right-of-use assets

√ Applicable □ N/A