Luzhou Laojiao Co. Ltd.2026 Interim Report

【August 2026】

Section I Important Statements Contents and Definitions

The Board of Directors as well as directors and senior management guarantee that the information

presented in this report is free of any false records misleading statements or material omissions and

shall individually and together be legally liable for truthfulness accuracy and completeness of its

contents.Liu Miao responsible person for the Company Xie Hong responsible person for accounting work and

Song Ying responsible person for the Company’s accounting department (accounting supervisor)

have warranted that the financial statements in this report are true accurate and complete.All the directors attended the board meeting to deliberate this report by themselves.Affected by risks uncertainties and assumptions the forward-looking statements concerning

business objectives and future plans made in this report based on the subjective assumptions and

judgments of the future policies and economic conditions may be significantly different from the actual

results. Such statements shall not be considered as virtual promises of the Company to investors

and the investors and relevant persons shall maintain adequate risk awareness and shall understand

the differences between plans forecasts and commitments.In this report the potential risks in the operation of the Company have been disclosed. Investors are

kindly reminded to pay attention to possible investment risks.The Company has no interim dividend plan either in the form of cash or stock.This Report has been prepared in both Chinese and English. Should there be any discrepancies or

misunderstandings between the two versions the Chinese version shall prevail.

Contents

Section I Important Statements Contents and Defini... 2

Section II Company Profile and Key Financial Resul... 6

Section III Management Discussion and Analysis.......10

Section IV Governance Environmental and Social Inf...32

Section V Significant Events.........................35

Section VI Changes in Shares and Information about...44

Section VII Information about Bond...................52

Section VIII Financial Report........................53

Documents Available for Reference

1. Financial statements signed and stamped by the responsible person for the Company the

responsible person for accounting work and the responsible person for the Company’s accounting

department (accounting supervisor); and

2. The originals of all company documents and announcements that are disclosed to the public during

the reporting period.

Definitions

Term Reference Definition

Company the Company Luzhou

Laojiao Refer to Luzhou Laojiao Co. Ltd.Laojiao Group Refer to Luzhou Laojiao Group Co. Ltd.XingLu Group Refer to Luzhou XingLu Investment Group Co. Ltd.SASAC of Luzhou Refer to State-owned Assets Supervision and AdministrationCommission of Luzhou

Huaxi Securities Refer to Huaxi Securities Co. Ltd.Luzhou Bank Refer to Luzhou Bank Co. Ltd.Sales Company Refer to Luzhou Laojiao Sales Co. Ltd.Baijiu Production Company Refer to Luzhou Laojiao Baijiu Production Co. Ltd.

Section II Company Profile and Key Financial Results

1. Corporate information

Stock abbreviation Luzhou Laojiao Stock code 000568

Stock exchange where

the shares of the Shenzhen Stock Exchange

Company are listed

Name of the Company

in Chinese 泸州老窖股份有限公司

Abbr. of the Company

name in Chinese (if 泸州老窖

any)

Name of the Company

in English (if any) Luzhou Laojiao Co. Ltd.Abbr. of the Company

name in English (if LZLJ

any)

Legal representative Liu Miao

2. Contact us

Secretary of the board Representative for securitiesaffairs

Name Li Yong Wang Chuan

Address Luzhou Laojiao Command Center Nanguang Road Luzhou CitySichuan Province China

Tel. （0830）2398826 （0830）2398826

Fax （0830）2398864 （0830）2398864

E-mail dsb@lzlj.com dsb@lzlj.com

3. Other Information

3.1. Contact Information of the Company

Whether any change occurred to the registered address office address and their zip codes website

address email address and other contact information of the Company in the reporting period.□ Applicable □ N/A

No change occurred to the said information in the reporting period which can be found in the 2025

Annual Report.

3.2. Information disclosure and place where the interim report is kept

Whether any change occurred to the information disclosure and place where the interim report is kept.□ Applicable □ N/A

No change occurred to the website of the stock exchange media and other websites designated by

the Company for information disclosure as well as to the place where the disclosed documents are

kept in the reporting period. The said information can be found in the 2025 Annual Report.

3.3. Other information

Whether any change occurred to other information in the reporting period.□ Applicable □ N/A

4. Key accounting data and financial indicators

Whether the Company performed a retroactive adjustment to or restatement of accounting data.□ Yes □ No

H1 2026 H1 2025 Change

Operating revenues (CNY) 10472224575.78 16453732904.65 -36.35%

Net profits attributable to

shareholders of the 4339264086.33 7662907812.98 -43.37%

Company (CNY)

Net profits attributable to

shareholders of the

Company before non- 4291450847.49 7650004468.05 -43.90%

recurring gains and losses

(CNY)

Net cash flows from

2081610957.97 6064470030.15 -65.68%

operating activities (CNY)

Basic earnings per share

2.95 5.21 -43.38%

(CNY/share)

Diluted earnings per share

2.95 5.21 -43.38%

(CNY/share)

Weighted average ROE 8.62% 15.42% -6.80%

June 30 2026 December 31 2025 Change

Total assets (CNY) 64325250251.07 64794994851.27 -0.72%

Net assets attributable to

shareholders of the 45732857079.30 49780293635.74 -8.13%

Company (CNY)

5. Differences in accounting data under domestic and overseas

accounting standards

5.1. Differences in the net profits and net assets disclosed in the financial reports

prepared under the international and China accounting standards

□ Applicable □ N/A

No such differences for the reporting period.

5.2. Differences in the net profits and net assets disclosed in the financial reports

prepared under the overseas and China accounting standards

□ Applicable □ N/A

No such differences for the reporting period.

6. Non-recurring profits and losses

□ Applicable □ N/A

Unit: CNY

Item Amount Note

Profit or loss from disposal of non-

current assets (including the write-off 337510.87 See "Section X Note 5.48" for details.portion of the impairment provision)

Government grants accounted for in

the profit or loss for the current

period (except for the government

grants closely related to the business

of the Company and given in

19174686.89 See "Section X Note 5.44" for details.

accordance with defined criteria and

in compliance with government

policies and have a continuing

impact on the Company's profit or

loss)

Gain or loss on fair-value changes in

financial assets and liabilities held by

a non-financial enterprise as well as

on disposal of financial assets and See "Section X Note 5.45 and 5.46"

30626740.26

liabilities (exclusive of the effective for details.portion of hedges that is related to

the Company's normal business

operations)

Other non-operating income and

See "Section X Note 5.49 and 5.50"

expenditure except above-mentioned 13453380.95

for details.items

Less: Corporate income tax 15779080.13

Total 47813238.84

Other items that meet the definition of non-recurring gain/loss:

□ Applicable □ N/A

No such cases for the reporting period.Explain the reasons if the Company classifies any non-recurring gain/loss item mentioned in the

Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to

the Public-Non-Recurring Gains and Losses as a recurring gain/loss item.□ Applicable □ N/A

No such cases for the reporting period.

Section III Management Discussion and Analysis

1. Business scope in the reporting period

The Company operates within the baijiu subdivision industry which belongs to the liquor & wine

beverage and refined tea production industry with specialized baijiu product design production and

sales as its main business model. Its primary products include baijiu series such as "National Cellar

1573" and "Luzhou Laojiao" and its main comprehensive performance indicators rank high in the

baijiu industry.At present the baijiu industry remains in a period of in?depth adjustment. It is marked by insufficient

momentum for consumption growth mounting inventory pressure across distribution channels

slowing product off?take and intensifying competition. To achieve steady high?quality development

baijiu enterprises must maintain strategic stability adapt to shifts in consumer behavior and industrial

development trends adopt multi?dimensional initiatives including product innovation channel

optimization and brand value reshaping proactively transform to build differentiated core

competitiveness and continuously consolidate their fundamental business foundations.The Company shall comply with the disclosure requirements for companies engaging in food & liquor

and wine production of the Guidelines No. 3 of the Shenzhen Stock Exchange on Self-regulation of

Listed Companies—Industry-specific Information Disclosure.The Company holds three food business licenses and its production model is self-production. The

Company’s main business is the research and development production and sales of baijiu series

such as "National Cellar 1573" and "Luzhou Laojiao". During the reporting period the Companyclosely adhered to the development theme of “Boosting Confidence Maintaining Steady PaceForging ahead With Concerted Efforts and Pursuing Breakthroughs”. Staying focused on its set

targets and surmounting difficulties the Company forged ahead with high?quality development. In the

first half of 2026 the Company recorded operating revenue of CNY 10.472 billion and net profit

attributable to shareholders of the listed company of CNY 4.339 billion.A. Major work that has been done in the reporting period

a. Focusing on all?domain marketing campaigns for steady market expansion

The Company further deepened its deployment of regional channels. It ramped up

implementation of the “235+100” regional development strategy and fully rolled out the Hundred

Cities Program 3.0. Momentum for scenario?based marketing was unleashed. The Company

continuously optimized and upgraded scenario?based marketing activities such as the Wave Program

and the Galaxy Left Bank Music Festival. The Company advanced the promotion and operation

of innovative products. Full?scale rollout of low?alcohol tasting promotions was achieved and the

brand system for 28° Gogoon was established. Continuous empowerment was delivered through

digital and intelligent operations. By leveraging the digital marketing system the Company

implemented multi?dimensional refined operations across target crowds scenarios customers timing

and other dimensions.b. Deepening the development of cultural system and systematically elevating brand momentumThe Company has consolidated the foundation of its cultural heritage. The “Luzhou LaojiaoLuohan Cellars” have been inscribed on the 10th batch of Sichuan Provincial Cultural Relics

Protection Units and this makes the Company the only enterprise within the baijiu industry that owns

complete cellars of “living heritage” spanning the Ming Dynasty the Qing Dynasty the Republic of

China period and the contemporary era. The Company expanded its cultural communication

matrix. It focused on core themes such as “advantages of single?grain distillation” and “core essenceof the dual living national treasures” and it applied multiple communication methods to construct an

all?domain communication matrix. The Company achieved targeted breakthroughs in brand

outreach. It further developed signature IP events including the Baijiu Seal?off Ceremony and the

Cellar Owner Festival. The Company conducted cooperative initiatives with high?profile sporting

events such as the ITTF the Australian Open and the World Cup so its brand stature and influence

kept climbing steadily. The Company has promoted the integrated development of baijiu?themed

cultural tourism. It pressed ahead with key projects represented by the China Baijiu Museum in

Sichuan and it built new city landmarks for baijiu?themed cultural tourism consumption.c. Upholding the bottom?line of quality control and ensuring sound production and supply

The Company pursued continuous improvement in production technique and product quality.The pass rate for incoming raw and auxiliary materials and the baijiu source guarantee rate both

reached 100%. And the Company participated in the formulation and revision of 12 standards at

various levels covering fields such as anti?counterfeiting and traceability. The Company accelerated

the implementation of intelligent baijiu production initiatives. The raw and auxiliary material

procurement system went online for operation. Phase?II of the Huangyi Baijiu Production System

Project passed completion acceptance. Projects including the 950 Baijiu Production MES system

moved forward in an orderly manner. The Company delivered efficient and smooth logistics

support. It promoted centralized control over compliance reviews for products and explored a

combined transportation model of “short?haul road transfer + main?route waterway shipping”. Such

measures have further strengthened the resilience of the supply chain.d. Adhering to technology?driven innovation and deepening the integration of industry academia

research and application

The Company delivered solid and effective management over its technology platforms and

laboratories. It operated 23 technology platforms including the National Engineering Research

Center of Solid-state Distillation administered 17 open?subject projects under the

Chengdu?Chongqing Solid?state Distillation Alliance and successfully maintained its CNAS

accreditation status. The Company made vigorous efforts for the application for policy research

and technology projects. It secured approval for 13 government?funded policy research andtechnology projects. The “Fully?enclosed Recycling Process for Cooling Water for Baijiu Production ofLuzhou Laojiao” was selected as one of Sichuan Province’s Top?10 Water?Saving Cases. The

Company advanced six major platform projects such as the Tsinghua University?Luzhou Laojiao Joint

Research Center for Intelligent Testing and five of its technical achievements were appraised as

internationally advanced. The Company achieved fruitful outputs in technology research and

commercialization of research findings. It focused on core fields such as the flavor and quality of

baijiu obtained 37 patents led and participated in the formulation of 12 national and industry

standards published 23 academic papers and won honors including the First Prize for Technological

Progress by the China National Light Industry Council.e. Consolidating the headquarters management system and boosting efficiency through refined

management

The Company standardized and enhanced its corporate governance. It continuously improvedbasic corporate management practices and strictly implemented the “Three Major Items and OneImportant Matter” decision?making system to ensure scientific standardized and efficient

decision?making. It tightened safeguards against insider trading and received the highest A rating in

the Shenzhen Stock Exchange’s information disclosure assessment for the sixth consecutive year.The Company built rigorous risk prevention and control mechanisms. It focused on key areas

including special?purpose audits organized integrity?education sessions and conducted full?coverage

integrity talks. It continuously strengthened employees’ awareness of disciplines and compliance

requirements. The Company boosted operational efficiency through digital and intelligent

management empowerment. It upgraded the financial sharing system and effectively addressed

pain points in business expense reimbursement. It fully rolled out the procurement management

system and realized end?to?end online processing for the complete procurement workflow of

“invitation for bidding bid submission bid opening bid evaluation and award of contract”.B. Priorities in the second half of the year

a. The Company will conduct in?depth market?oriented business operations to expand sales and lift

efficiency across all domains. Further regional store?expansion initiatives and channel layout for

new?product offerings will be advanced. Various digital models will undergo iterative upgrading and

an all?domain digital platform will be implemented to achieve end?to?end digital and intelligent control

over marketing channel and user?related operations.b. The Company will foster solid cultural heritage foundations and optimize brand operation. A system

for cultural development and cultural relics protection will be established and progress will be made

on projects including intangible cultural heritage application filings as well as the renovation of

museums and traditional workshops. Differentiated and refined brand operation will be adopted and

marketing activities will be iterated in strict alignment with brand positioning.c. Greater focus will be placed on technological innovation to bolster production assurance

capabilities. Formulation of the technology plan for the 15th Five?Year Plan Period will move forward.Standardized management will be applied to sorghum supplies and improvements will be delivered

to the digital systems for baijiu quality control and production. Warehouse?network distribution layouts

will also receive further optimization.

d. Digital and intelligent management will be advanced to strengthen headquarters?level supporting

capacity. The Company will decompose and implement strategies under the 15th Five?Year Plan.Upgrades will be carried out for the digital financial system and an AI middle platform will be

established. Various online management platforms will be further improved and digital mechanisms

for talent recruitment and competency development will be put in place.Brand operationDuring the reporting period the Company resolutely implemented its strategy of “dual brands threeproduct series and major single products”. National Cellar 1573 a high-end baijiu series saw its

position as a value benchmark continuously solidified. The Luzhou Laojiao series achieved

comprehensive coverage across the sub-premium mid-range and mass-market price bands. Health

care baijiu innovative baijiu new retail and overseas markets were cultivated with precision. As

such brand recognition and brand intrinsic value were substantially enhanced.Main sales models:

Currently the Company has two main sales models:

1. Traditional channel operation model: It is mainly authorized distribution of the offline distributors. The

Company establishes cooperative relationships with the distributors by product lines and regions. The

Company directly supplies goods to the distributors and then distributors sell them to consumers and

terminal outlets.

2. Emerging channel operation model: It is mainly online sales operations. The Company establishes

cooperative relationships with e-commerce platforms self-media and webcasters and sells the goods

to consumers through flagship stores specialty stores live streaming rooms on online platforms and

other network terminals.Distribution models:

□ Applicable□ N/A

1. Main sales models

Unit: CNY

Operating Gross YoY change of

YoY

Cost of sales profit operating YoY change of change ofrevenue margin revenue cost of sales gross profitmargin

By sales model

Traditional

channel operation 9494422023.31 1344484150.79 85.84% -38.61% -30.98% -1.56%

model

Emerging channel

operation model 916640203.24 163821196.16 82.13% -1.64% 6.69% -1.39%

2. Distributors

Unit: Number

Region Number of Increased Decreased YoY change of Reason for any significant change

distributors at number number during number of

the end of the during the the reporting distributors (%)

reporting period reporting period

period

Domestic 1533 101 263 -9.98

Overseas 106 13 0 20.45

3. Main settlement method for distributors and distribution method

The Company's main settlement method for distributors is payment before delivery. The distribution

method is authorized distribution.

4. Top five distributors

Total sales to top five customers (CNY) 6443743622.48

Total sales to top five customers as % of the total sales 61.53%

Total sales to related parties among top five customers as % of the total

sales 0.00%

5. Information on top five distributors

No. Customer Sales amount (CNY) As % of the total sales for thereporting period

1 Customer A 4031459386.03 38.50%

2 Customer B 973186349.59 9.29%

3 Customer C 784392795.69 7.49%

4 Customer D 363476878.19 3.47%

5 Customer E 291228212.98 2.78%

Total -- 6443743622.48 61.53%

Store sales terminals accounted for more than 10%

□ Applicable □ N/A

Online direct sales

□ Applicable □ N/AFor the main sales models of the Company please refer to the contents under the heading “Distributionmodels” in “1. Business scope in the reporting period” of Section III. For the sales of the Company's

main products please refer to the contents under the heading "Business segment products orgeographical segments contributing over 10% of the operating revenues or profits" in “3. Analysis ofmain business” of Section III. The Company's main products are sold online. Its main cooperation

platforms include JD.com and Tmall.Sales price of main products contributing over 10% of the total operating revenues for the current

period changed by more than 30% from the previous reporting period

□ Applicable □ N/A

Purchase model and purchase content

Unit: CNY

Purchase model Purchase content Amount of main purchase content

Organic raw grains are purchased

Raw materials 1181056263.68

through cooperative model and

supplied by organic raw grain bases;

other raw grains and packaging

materials are purchased through bid

invitation

Purchase based on the unified

pricing of the National Development

and Reform Commission and the Fuels and energies 95698470.00

price bureau and purchase through

bid invitation

Purchase through bid invitation Low-value consumables 14508241.88

The purchase of raw materials from cooperatives or farmers accounted for more than 30% of the total

purchase amount

□ Applicable □ N/A

The price of main raw materials purchased externally changed by more than 30% year-on-year

□ Applicable □ N/A

Main production model:

The Company's main production model is self-production.Commissioned processing and production

□ Applicable □ N/A

Main breakdown items of cost of sales

Unit: CNY

By H1 2026 H1 2025

business Item As % of As % of YoY

segment Amount cost of Amount cost of Change

sales sales

Baijiu Raw materials 1057171217.67 70.09% 1637912557.83 77.94% -35.46%

Baijiu Labor costs 150076382.02 9.95% 153965706.69 7.33% -2.53%

Baijiu Manufacturingoverhead 301057747.25 19.96% 309702526.80 14.74% -2.79%

Production volume and inventory

1. Production volume sales volume and inventory of main products

Product Production

YoY change YoY change

volume Sales volume Inventory of production of sales YoY change Description ofclassification (ton) (ton) (ton) volume volume of inventory major changes(%) (%)

Production volume

for the current

period decreased

year?on?year. This

stemmed from the

Mid- and high- Company’s

end baijiu 4801.19 13862.32 32713.40 -77.40 -42.53 8.60proactiveadjustment of

production rhythm

in light of sales

demand and

inventory levels.Sales volume for

the current period

dropped

year?on?year

which was mainly

attributable to

sustained industry

headwinds and

slower product

off?take.The closing

inventory

decreased

compared with the

opening inventory

Other baijiu 20396.44 22371.09 12514.09 -14.73 -9.79 32.05but the inventory

increased year on

year due to a lower

inventory base in

the same period of

last year.

2. Inventory at the end of the reporting period

Unit: Ton

Finished baijiu Semi-finished baijiu (including base baijiu)

45227.49 467815.34

3. Capacity

Unit: Ton

Main products Design capacity Actual capacity Capacity in progress

Baijiu 170000 170000 80000

2. Analysis of core competitiveness

A. Geographical advantage

Luzhou City where the Company is located sits in the transitional area between the southern rim of the

Sichuan Basin and the Yunnan-Guizhou Plateau featuring a warmer and more humid sub-tropical

climate compared to other areas at the same latitude with a temperature above 0℃ throughout the

year. The unique climate and soil are agreeable to grow grains for baijiu production. The glutinous red

sorghum and soft wheat grown in this area are the primary raw materials for the baijiu of the Company.The cellars in which the Company produces its baijiu are made of the local loessal clay characterized

by strong viscosity rich minerals and excellent moisture retention. In addition the abundant and quality

water in the region creates a unique geographical advantage for the production of the Company’s baijiu.B. Advantage of cellars and the baijiu production technique

Aged cellars are the most essential condition for a strong aromatic baijiu maker to produce good quality

baijiu. The Cellars of National Treasure 1573 founded in 1573 was granted by the State Council as the

first Cultural Relic of National Importance in the industry under the Protection of the State in December

1996. 1619 cellars of Luzhou Laojiao which have been continuously used for over 100 years together

with its 16 ancient baijiu production workshops and three natural cellar holes were all selected as the

fourth batch of Cultural Relics of National Importance under the Protection of the State in 2013. They

are unique resources that cannot be replicated. In both 2006 and 2012 Luzhou Laojiao Daqu Cellars

were twice selected into the preliminary list of China for World Heritage. In November 2018 Luzhou

Laojiao Cellars and Baijiu Workshops were selected into China’s Industrial Heritage List. The time-

honored Traditional Baijiu Production Technique of Luzhou Laojiao is a 24-generation inheritance and a

classic production technique for strong aromatic baijiu. This technique was selected as the first batch of

National Intangible Cultural Heritage in May 2006. The Cellars of National Treasure 1573 and the

Traditional Baijiu Production Technique of Luzhou Laojiao together provide the most essential basis

and assurance for the quality of the product series of National Cellar 1573 and Luzhou Laojiao.Additionally Huangyi Baijiu Production Eco-Park has moved into full production in late 2020. Upholdingthe cultural connotations of “inheritance of ancient ways pure-grain based production traditionaltechniques and intelligent technologies” the Company carries out production technique renovation

featuring automatic intelligent and information technology-based transformation. As such it has

established a baijiu production eco-park comprising distillation workshops leaven making workshops

and base baijiu storage cellars along with energy and sewage treatment facilities. This baijiu

production eco-park brings with it new production capacities of 100000 tons of quality pure-grain solid

baijiu and 100000 tons of leaven in addition to a new storage capacity of 380000 tons of baijiu per

year marking a substantial increase in the Company’s production capacity.C. Brand advantage

Brand is a key business resource for baijiu producers. The Company’s reputation is greatly built on its

superiority in brand. National Cellar 1573 which is of a connoisseurship level is a world-famous high-

end brand. Luzhou Laojiao Tequ a classic brand for strong aromatic baijiu was selected in 1952 by the

first national tasting competition judges as one of the four most famous baijiu brands in China. It is the

only strong aromatic baijiu brand that won the title of “National Famous Baijiu” for five consecutive times

as well as the pioneer with regard to the “Tequ” variety of baijiu. In recent years the Company hassuccessfully put in place a brand system of “dual brands three product series and major singleproducts” with great clarity and focus. The programs carried out to promote the brand of National Cellar

1573 and revive the brand of Luzhou Laojiao have produced remarkable results with significant

improvement in brand influence. The Company’s baijiu is increasingly known by consumers as a

national brand of strong aromatic baijiu and of authentic flavor.D. Quality and R&D advantageThe Company is committed to producing high-quality baijiu advocating a healthy lifestyle and “makingthe quality visible”. The first “Organic Sorghum Planting Base” was established and the six-factor

management system (including organic quality safety environment measurement and energy) was

built and improved. The research platforms are established including National Engineering Research

Center of Solid-State Distillation National Baijiu Test Center National Postdoctoral Workstation etc.which all support the innovation and upgrading of products with their strong technical force. In recent

years the Company has put in a lot of efforts in researching Tequ production informatization and

intelligent transformation of production and packaging. Relying on the technological innovation

platforms such as the National Industrial Design Center and continuously deepening the cooperation

with top-tier universities and scientific research institutes the Company has undertaken dozens of

national- or provincial-level projects and has been granted hundreds of invention or utility model patents.And remarkable results have been achieved with respect to improvement of the quality of base Baijiu

as well as production efficiency improvement.E. Talent advantage

The Company has 1 inheritor of national intangible cultural heritage 21 senior professor engineers 8

experts who receive special allowances from the State Council 4 national technicians 3 national model

workers 5 national Labor Day Medal winners 5 academic and technologic leaders of Sichuan province

1 expert with outstanding contribution in Sichuan province 1 technology leader of Tianfu 2 excellent

engineers of Tianfu 1 skills leader of Tianfu 3 craftsmen of Tianfu 5 craftsmen of Sichuan province 1

technological elite of Tianfu 2 young science and technology talents of Tianfu 4 technicians of Sichuan

province as well as hundreds of highly skilled personnel including national baijiu judges as well as

master technicians senior technicians and technicians in baijiu production and tasting. The

comprehensive and professional personnel system assures the sound development of the Company.

3. Analysis of main business

Overview

See contents under the heading “1. Business scope in the reporting period” above.Year-on-year changes in key financial data

Unit: CNY

Reason for any

H1 2026 H1 2025 YoY Change

significant change

Mainly due to the

decreased product

Operating revenues 10472224575.78 16453732904.65 -36.35%

sales volume in the

current period

Cost of sales 1534654594.77 2124120485.84 -27.75%

Selling and

1329931987.36 1518512182.04 -12.42%

distribution expenses

General and

administrative 391895740.55 428272440.13 -8.49%

expenses

Finance expenses -213207128.29 -263955897.52

Mainly due to the

Corporate income decreased total

1343880854.63 2726585021.21 -50.71%

tax profits for the current

period

R&D investments 74992033.70 101192495.12 -25.89%

Mainly due to the

decrease in cash

Net cash flows from

2081610957.97 6064470030.15 -65.68% received from sale of

operating activities

goods and the

reduced bill

discounting in the

current period

Mainly due to the

Net cash flows from decrease in the

-879619347.88 -628134413.89

investing activities recovery of matured

investments

Mainly due to new

Net cash flows from one?year bank loans

-2423578025.39 -3648612906.78

financing activities recognized in the

current period

Net increase in cash

-1236184619.64 1785830695.34 -169.22%

and cash equivalents

Significant changes to the profit structure or sources of the Company in the reporting period

□ Applicable □ N/A

No such changes in the reporting period.Breakdown of operating revenues

Unit: CNY

H1 2026 H1 2025

As % of As % of YoY Change

Amount operating Amount operating

revenues revenues

Total 10472224575.78 100% 16453732904.65 100% -36.35%

By business segment

Baijiu 10411062226.55 99.42% 16397171889.54 99.66% -36.51%

Other revenues 61162349.23 0.58% 56561015.11 0.34% 8.14%

By product

Mid- and high-

9200048584.14 87.85% 15047590728.37 91.45% -38.86%

end baijiu

Other baijiu 1211013642.41 11.56% 1349581161.17 8.20% -10.27%

Other revenues 61162349.23 0.59% 56561015.11 0.34% 8.14%

By geographical segment

Domestic 10358943401.07 98.92% 16350903115.95 99.38% -36.65%

Overseas 113281174.71 1.08% 102829788.70 0.62% 10.16%

Business segments products or geographical segments contributing over 10% of the operating

revenues or profits

□ Applicable □ N/A

Unit: CNY

YoY

Gross YoY change YoY change

change of

Operating revenue Cost of sales profit of cost of of gross profit

operating

margin sales margin

revenue

By business segment

Baijiu 10411062226.55 1508305346.94 85.51% -36.51% -28.23% -1.67%

By product

Mid- and high- 9200048584.14 851976322.23 90.74% -38.86% -36.91% -0.29%

end baijiu

Other baijiu 1211013642.41 656329024.71 45.80% -10.27% -12.64% 1.47%

By geographical segment

Domestic 10358943401.07 1516376481.25 85.36% -36.65% -28.10% -1.74%

Under the circumstances that the statistical standards for the Company’s main business data were

adjusted in the reporting period the Company’s main business data in the current period is calculated

based on adjusted statistical standards at the end of the reporting period

□ Applicable □ N/A

The Company shall comply with the disclosure requirements for companies engaging in food & liquor

and wine production of the Guidelines No. 3 of the Shenzhen Stock Exchange on Self-regulation of

Listed Companies—Industry-specific Information Disclosure.A. Breakdown of selling and distribution expenses

Unit: CNY

Selling and distribution

expenses H1 2026 H1 2025 YoY Change

Reason for any significant

change

Advertising expenses 500938068.52 614445634.53 -18.47%

Sales promotion

expenses 533426251.14 518115123.16 2.96%

Mainly due to the decrease

in baijiu sales revenue for

Warehousing and the current period and the

logistics expenses 63878798.22 102069423.35 -37.42% corresponding reduction in

warehousing and logistics

expenses

Labor costs 177049578.22 214753358.10 -17.56%

Other 54639291.26 69128642.90 -20.96%

B. Breakdown of advertising expenses

Unit: CNY

Advertising Expenses

Online advertising (exclusive of TV advertising) 55509626.55

Offline advertising 53756328.46

TV advertising 202105047.59

Other (inclusive of branding ideas exhibitions & showcases advertising materials activity

planning etc.) 189567065.92

4. Analysis of non-core business

□ Applicable □ N/A

5. Assets and liabilities

5.1. Significant change of asset items

Unit: CNY

June 30 2026 December 31 2025 Explanation

Change in

As % of total As % of total about any

Amount Amount percentage

assets assets material change

Cash and cash

26130007572.66 40.62% 27341566698.37 42.20% -1.58%

equivalents

Accounts

22775760.83 0.04% 6075570.66 0.01% 0.03%

receivable

Contract assets 0.00% 0.00% 0.00%

Inventories 15680512860.04 24.38% 15396031707.35 23.76% 0.62%

Investment

46715779.53 0.07% 47892751.08 0.07% 0.00%

property

Long-term equity

2988392869.59 4.65% 2930804469.77 4.52% 0.13%

investments

Fixed assets 8228856821.33 12.79% 8523891404.03 13.16% -0.37%

Construction in

2440184560.92 3.79% 2064766283.24 3.19% 0.60%

progress

Right-of-use

15463891.19 0.02% 19863214.19 0.03% -0.01%

assets

Mainly due to

one?year bank

loans arranged in

response to the

Short-term loans 3001758333.34 4.67% 0.00% 4.67%

Company’s

production and

operational

needs

Contract

2437295608.51 3.79% 3367443727.83 5.20% -1.41%

liabilities

This item

decreased

30.29% mainly

due to the

Long-term loans 1831359966.73 2.85% 2627166310.93 4.05% -1.20%

reclassification of

long?term loans

due within one

year.Lease liabilities 14358113.80 0.02% 15693190.61 0.02% 0.00%

5.2. Main assets overseas

□ Applicable □ N/A

5.3. Assets and liabilities measured at fair value

□ Applicable □ N/A

Unit: CNY

Changes in

Changes in

cumulative

Opening fair value Provision for Amount of Amount of Other Closing

Item fair value

balance through impairment purchase sale changes balance

recorded

profit or loss

into equity

Financial

asset

1.Held-for-

trading

financial

assets 15847719 30598408. 400000000 202154400 18132159

(exclusive of 59.37 97 .00 .79 67.55

derivative

financial

assets)

4.Investmen

ts in other 475499237 156439514 29032023. 383686395

equity .90 .32 42 .18

instruments

6. Accounts -

14664949 12599165

receivable 206578409

73.96 64.02

financing .94

Subtotal of -

35267661 30598408. 156439514 400000000 231186424 34568189

financial 206578409

71.23 97 .32 .00 .21 26.75

assets .94

-

35267661 30598408. 156439514 400000000 231186424 34568189

Total 206578409

71.23 97 .32 .00 .21 26.75.94

Financial

0.00 0.00

liability

Contents of other changes

None

Whether measurement attribution of main assets changes significantly in this year

□ Yes □ No

5.4. Restricted asset rights as of the end of this reporting period

Unit: CNY

Item Closing balance Reason

Cash and cash

equivalents 429822094.48 Accrued interest on term deposits

Cash and cash Under management in accordance

equivalents 10006699.34 with the management measures for

the use of special project funds

Cash and cash

equivalents 1059436.66

Security deposits at e-commerce

platforms

Cash and cash 200000.00 Quality guarantee funds for travelequivalents services

Cash and cash

equivalents 10000.00 Funds frozen for other reasons

Total 441098230.48

6. Investment

6.1. Total investment

□ Applicable □ N/A

Investment made in the Investment made in the same

reporting period (CNY) period of last year (CNY) YoY change

1145685051.21 1133338880.63 1.09%

6.2. Significant equity investment made in the reporting period

□ Applicable □ N/A

6.3. Significant ongoing non-equity investment in the reporting period

□ Applicable □ N/A

Unit: CNY

Accum

Accum Reason

ulated

ulated s for

actual

Whethe Amount actual not

Industr input

r it is a of input income meetin Date of Disclos

Investm y of the amount Project Project

fixed in the Capital by the g the disclos ure

Item ent investm by the progres ed

asset reportin source end of schedul ure (if index

form ent end of s income

investm g the e and any) (if any)

project the

ent period reportin project

reportin

g ed

g

period income

period

Luzhou Announ

Laojiao cement

Technic 25847 23319 Self- on the

Self- July 13

al Yes Baijiu 1636.4 29319. financin 70.00% 0.00 0.00 N/A Implem

built 2022

Renova 5 52 g entatio

tion n of

Project Luzhou

of Laojiao

Intellige Technic

nt al

Baijiu Renova

Product tion

ion Project

(Phase of

I) Intellige

nt

Baijiu

Product

ion

(Phase

I) by

Subsidi

ary

25847 23319

Total -- -- -- 1636.4 29319. -- -- 0.00 0.00 -- -- --

5 52

6.4. Financial assets investment

6.4.1. Securities investment

□ Applicable □ N/A

Unit: CNY

Chang

Chang es in Profit

es in the and

Abbre Accou Beginn

Categ Initial fair cumul Amou loss Closin

viation nting ing Amou Accou

ory of Stock invest value ative nt of during g book Capital

of measu book nt of nting

securit code ment recogn fair purcha the balanc source

securit rement balanc sale item

ies cost ized in value se reporti e

ies model e

profit record ng

or loss ed into period

equity

Invest

Dome ments

Fair

stic 12719 24201 20162 21434 in

60121 value 4121 Own

and GTHT 156.7 7288. 2188. 1345. other

1 measu 948.95 fund

foreign 6 33 62 38 equity

rement

stock instru

ments

Invest

Dome ments

Fair

stic 28175 27402 28432 in

00224 1030 value 93813 Own

and SNC 261.0 023.4 023.4 0.00 other

6 000.00 measu .29 fund

foreign 9 2 2 equity

rement

stock instru

ments

Dome 51120 Fair 85047 34808 85928 Invest

LZBA 5640 Own

stic 01983 000.0 value 773.2 917.2 917.2 ments

NK 960.00 fund

and 0 measu 7 5 5 in

foreign rement other

stock equity

instru

ments

Invest

Dome ments

Fair -

stic CTG 54228 87001 50462 in

value 10073 85147 Own

and 01880 Duty- 5380. 004.5 143.5 other

measu 6551. 5.80 fund

foreign Free 80 6 3 equity

rement 75

stock instru

ments

60715 44224 16309 28432 10708 35073

Total 4537. -- 1327. 0.00 6577. 0.00 023.4 198.0 2406. -- --

56 25 54 2 4 16

6.4.2. Derivative investment

□ Applicable □ N/A

No such cases in the reporting period

6.5. Use of funds raised

□ Applicable □ N/A

No such cases in the reporting period

7. Sale of major assets and equity interests

7.1. Sale of major assets

□ Applicable □ N/A

No such cases in the reporting period.

7.2. Sale of major equity interests

□ Applicable □ N/A

8. Analysis of major subsidiaries

□ Applicable □ N/A

Main subsidiaries and joint companies with an over 10% influence on the Company’s net profit

Unit: CNY

Company Company Business Registere Total Operating Operating

Net assets Net profit

name type scope d capital assets revenue profit

Sales of

baijiu

series

Luzhou

such as

Laojiao 1000000 9182061 5789178 1010562 4309537 3320067Subsidiary “NationalSales Co. 00.00 918.38 419.91 9837.50 846.81 979.221

Cellar

Ltd.

1573” and“LuzhouLaojiao”

Note 1: The decline in the company’s operating revenue operating profit and net profit was mainly due to the

decreased product sales volume in the current period.Acquisition and disposal of subsidiaries during the reporting period

□ Applicable □ N/A

Notes for major holding companies and joint stock companies

There were no major holding companies or joint stock companies during the reporting period of which

information shall be disclosed.

9. Structured entities controlled by the Company

□ Applicable □ N/A

10. Risks facing the Company and countermeasures

A. Risk of a slower-than-expected recovery in consumption. The overall domestic consumer market is

still in a recovery phase with insufficient momentum for consumption rebound. Mass consumption has

become more rational. Coupled with the ongoing channel inventory destocking cycle across the

industry retail off-take remains weak in some regional markets and the pace of payment collection

from channels has slowed. Should the momentum of macroeconomic recovery weaken and the

restoration of consumption scenarios fail to meet expectations in the future the industry adjustment

cycle may be prolonged. To address this the Company will continue to deepen its presence in core

markets implement refined control over channel inventory further optimize product mix and

marketing strategies and consolidate the foundation for market sales.B. Risk arising from the iteration of consumer groups and shifts in consumption preferences.Traditional baijiu falls short of matching the consumption demands of new generations in terms of

drinking scenarios flavor profiles and brand communication approaches. The industry faces long-

term challenges brought by evolving consumption demand and habits. If the Company cannot

promptly adapt to intergenerational consumption shifts and successfully deliver product innovation

brand rejuvenation and deployment in new consumption scenarios it will be exposed to risks

including inadequate penetration among young consumer groups rigid user communities and limited

room for long-term market growth. In response the Company will stay committed to the strategy of

“lower alcohol content youth-oriented consumption and scenario-based consumption” to consolidate

the consumer base for its long-term sustainable growth.

11. Development and implementation of market value management

rules and valuation enhancement plan

Indicate whether the Company has developed market value management rules.□ Yes □ No

Indicate whether the Company has disclosed its valuation enhancement plan.□ Yes □ No

In order to strengthen the Company's market value management effectively promote the Company to

enhance investment value enhance investor returns and safeguard investor interests in accordance

with the Company Law of the People's Republic of China the Securities Law of the People's Republic

of China the Information Disclosure Management Measures for Listed Companies the Listed

Company Regulatory Guideline No. 10 - Market Value Management and other applicable laws

regulations normative documents and the Company's Articles of Association etc. the Market Value

Management Rules of Luzhou Laojiao Co. Ltd. have been formulated upon approval at the Sixth

Meeting of the 11th Board of Directors.

12. Implementation of the action plan for "Dual Enhancement of

Development Quality and Shareholder Returns"

Indicate whether the Company has disclosed its action plan for "Dual Enhancement of Development

Quality and Shareholder Returns".□ Yes □ No

In accordance with the guiding ideology of "further invigorating the capital market and boosting investor

confidence" proposed at the Political Bureau meeting of the CPC Central Committee and "vigorously

improving the quality and investment value of listed companies taking more powerful and effective

measures and focusing on stabilizing the market and confidence" proposed at the State Council

Executive Meeting in order to safeguard the interests of all shareholders boost investor confidence

and promote the long-term healthy and sustainable development of the Company Luzhou Laojiao Co.Ltd. (hereinafter referred to as "the Company") has formulated its action plan for "Dual Enhancement of

Development Quality and Shareholder Returns" in combination with the Company's development

strategy business picture and financial condition. The specific measures are as follows:

A. Strengthening confidence in strategic planning and aiming at the Company's development

goals

The Company has formulated the "136" strategic plan for the 14th Five-Year Plan based on the

development idea of "giving play to advantages tackling areas of weaknesses improving quality

building strength and seeking rejuvenation". Specifically "1" refers to one development goal namely

firmly insisting on the goal of regaining the "Top 3" ranking among the Chinese baijiu industry; "3" refers

to three major development principles namely insisting on brand leadership and fully enhancing the

value of Chinese famous baijiu brands insisting on taking quality as foundation and sparing no efforts

to build a core production area of world famous baijiu and insisting on taking culture as the foundation

and striving to build a pilgrimage site for Chinese baijiu culture; "6" refers to "Six-in-One" Luzhou

Laojiao namely building a strong-brand Luzhou Laojiao a quality Luzhou Laojiao a cultural Luzhou

Laojiao an innovative Luzhou Laojiao a digital and intelligent Luzhou Laojiao and a harmonious

Luzhou Laojiao. Since the 14th Five-Year Plan period the Company has firmly implemented the "136"

development strategy won key battles such as expanding production capacity upgrading brands and

strengthening teams and has entered a stage of high-quality development. The National Cellar 1573

brand achieved comprehensive coverage in the domestic market and was fully expanding in overseas

markets; the Luzhou Laojiao brand built a strong basis in the granary market and has gained a stable

and penetrating presence in the opportunity market; the breakthrough project of expanding key sales

areas has been deeply promoted market consumption has been further activated and market share

has been further increased. In terms of digital marketing and brand building channel development and

public relations empowerment online expansion and offline integration and overseas layout and

domestic boosting a clearer and more effective path has been created with the characteristics of

Luzhou Laojiao which has made contributions to the healthy and rapid development of the Company.During the 14th Five-Year Plan period the compound annual growth rate of the Company's net profit

attributable to owners of the parent company was as high as 12.52%. Since the launch of the 15th Five-Year Plan period guided by the development philosophy of “staying focused on returning to the topthree in the industry tackling key challenges through coordination and pursuing steady long-termprogress” the Company has further formulated the “156” Strategic Plan namely: staying firmly

committed to the strategic goal of “returning to the top three in the industry”; upholding five core

development philosophies of long-termism quality value innovation and a shared future; and building

six systems covering an excellent system for market expansion and consumption innovation an

excellent system for cultural empowerment and brand management an excellent system for quality

production capacity and supply assurance an excellent system for digital and intelligent integration and

efficiency improvement an excellent system for organizational vitality and talent development as well

as an excellent system for coordinated industrial development and ecosystem co-development. Going

forward the Company will resolutely implement the “156” Strategic Plan stay focused on its goals

overcome difficulties and seize the initiative for development.B. Deeply promoting technological innovation and strengthening the transformation of scientific

research achievements

In recent years the Company has attached great importance to the development mode of innovation

leading progress integrated innovation forces gathered innovation resources tackled the frontier and

common key technologies of the baijiu industry and promoted the transfer and transformation of

achievements and industry sharing thus promoting the transformation of the baijiu industry from

experience oriented to technological oriented. This has made important contributions to the

technological innovation transformation and upgrading of the baijiu industry in China. First the

Company has successfully established multiple major national-level technological innovation platforms

including the National Engineering Research Centre of Solid-State Distillation the National Industrial

Design Centre and the National Postdoctoral Workstation. The Company has formed a comprehensive

technological innovation platform system with the National Engineering Research Centre of Solid-State

Distillation as the R&D core covering basic R&D talent cultivation and engineering transformation in

multiple fields and has built a highland for technological innovation in the entire industry. Second the

Company has continuously increased investment in technological innovation research and

development and continuously enhanced its independent innovation capabilities. In the past five years

the total R&D investment reached CNY 1138.8705 million and the compound annual growth rate of

innovation R&D investment reached 6.29%. Third the Company has actively carried out collaborative

innovation between the Company universities and research institutions establishing cooperative

relationships with more than 30 universities and institutions such as Tsinghua University and Shanghai

Jiao Tong University. Through various forms including joint laboratory building joint undertaking of

major projects joint training of talents and establishment of open projects the Company has carried

out extensive technical exchange and cooperation forming a good pattern of diversified cooperation

innovative development and mutual benefit between universities and the Company. Fourth the

Company has attached great importance to the creation and protection of intellectual property rights

and regarded intellectual property building as an important development strategy for the Company. The

number of applications and authorizations for invention and utility model patents has maintained a rapid

growth. By the end of 2025 the Company has been granted 304 patents including 93 invention patents

and 211 utility models both of which are at the forefront of the industry. In the future the Company will

continue to leverage its advantages in scientific research platforms talent and publicity to

comprehensively consolidate Luzhou Laojiao's leading position in scientific research.C. Highly valuing standardized operations and improving corporate governance level

The Company has continuously consolidated the foundation of corporate governance improved the

corporate governance structure actively studied laws and regulations and the latest regulatory policies

and standardized the Company's management system. The Company has also clearly defined the

responsibilities and authorities of the Board of Directors the Board of Supervisors meetings of

shareholders and the management in decision-making execution and supervision and regulated the

rights and obligations of the Company and shareholders. The Company has vigorously promoted the

systematization standardization and digitalization of corporate governance synchronously enhanced

the information-based level in the Board of Directors the Board of Supervisors and meetings of

shareholders and incorporated the building of the integrated securities business platform into the

"digital and intelligent Luzhou Laojiao" system to continuously improve the level of corporate

governance. In order to further improve the Company's risk management system and ensure that the

directors supervisors and senior management of the Company fully perform their duties within their

scope of responsibilities the Company has actively promoted the purchase of liability insurances for

directors supervisors and senior management. Meanwhile the Company has become the first listed

company in the industry to sign a liability insurance agreement for directors supervisors and senior

management which has been approved by a meeting of shareholders. In the future the Company will

continue to promote information technology building to empower corporate governance continuously

improve operational efficiency and scientific decision-making level.D. Fulfilling the information disclosure obligation compliantly and strictly guarding the defense

line of insider trading

The Company takes standardized information disclosure as the bottom line conducts information

disclosure with high standards and effectively respects and safeguards the legitimate rights and

interests of investors. First the Company has established and improved a management system

centered on major information internal reporting system temporary and periodic report preparation

procedure insider information management system and other policy documents and continuously

promoted the standardized and procedural business work to ensure accurate and rigorous information

disclosure. Second the Company has adhered to investor demand orientation actively promoted

voluntary information disclosure attached importance to the pertinence readability and effectiveness

of disclosure content and continuously improved the transparency of information disclosure of the

Company. The Company has been awarded the highest A grade in the information disclosure

assessment of listed companies on the Shenzhen Stock Exchange for several consecutive years. In the

future the Company will continuously improve the transparency of information disclosure and

continuously display information on the Company's operations at multiple levels angles and

dimensions.E. Efficiently carrying out investor relations activities and conveying the Company's investment

value

The Company has actively adapted to the needs of investor research and carried out investor

relationship management through a combination of "inviting in" and "going out" models. It has actively

communicated with investors on industry hot topics the Company's business picture and development

strategies through the Shenzhen Stock Exchange investor interaction platform establishment of

investor hotlines improvement of investor relationship websites hosting online collective reception

days and on-site investor surveys. In doing so the Company has conveyed its investment value and

safeguarded investors' right to know. At the same time the Company has adhered to investor demand

orientation. Based on the continuous growth of overseas shareholders in recent years the Company

has innovatively used overseas accounts such as Facebook Twitter and IG to simultaneously publish

the Company's performance promotion shortened the disclosure time interval between Chinese and

English versions and conducted overseas roadshows to ensure the timeliness of information

acquisition for overseas investors. Going forward the Company will continue to build a two-way

communication mechanism for a deep understanding and positive interaction with the capital market to

transmit the Company's value. (Investors are welcome to visit the Company's investor relations website

at https://000568.ir-online.cn/).F. Improving shareholder returns and safeguarding the legitimate rights and interests of

shareholders

The Company adheres to the implementation of an active profit distribution policy attaches importance

to reasonable returns to investors while considering the sustainable development of the Company and

maintains the continuity and stability of profit distribution. The Company clearly stipulates in its Articles

of Association that the Company may distribute dividend in cash or stocks and the dividend should not

be less than 50% of the distributable profit realized for that year and the profit to be distributed in cash

should not be less than 30% of the distributable profit realized for that year. Cumulative dividends since

its listing have reached CNY 60.56 billion representing a high dividend payout ratio of 63.50% ranking

among the top among more than 5000 listed companies in the Shanghai and Shenzhen stock markets.This has allowed all shareholders to fully share the Company's development achievements and

effectively maintained the Company's good image in the capital market. In order to further improve the

profit distribution policy establish a scientific sustained and consistent shareholder return mechanism

and enhance investment value the Company has formulated the 2024-2026 Shareholder Dividend

Plan. The Company's annual cash dividends shall account for no less than 65% 70% and 75% of the

net profit attributable to shareholders of the listed company in 2024 2025 and 2026 respectively and

shall not be less than CNY 8.5 billion. In principle cash dividends can be paid twice a year. Going

forward while safeguarding normal business operations and long-term corporate development the

Company will adopt a sound profit distribution policy to ensure investors duly share in the fruits of its

growth.G. Encouraging the controlling shareholder to actively increase its shareholdings to maintain

the stability of the capital market

Based on its recognition of the Company's long-term value and its firm belief in the Company's

development prospects the controlling shareholder of the Company Luzhou Laojiao Group Co. Ltd.increased its holdings in the Company by 1140200 shares in total with its own funds through call

auction trading during the period from December 15 2023 to June 15 2024 with a total amount of

approximately CNY 200.9629 million. In 2025 Laojiao Group increased its shareholdings in the

Company by 2345250 shares with special loans and its own funds through call auction trading

representing a total amount of approximately CNY 299.9973 million.Moving forward the Company will focus on the development theme of “Boosting ConfidenceMaintaining Steady Pace Forging ahead With Concerted Efforts and Pursuing Breakthroughs” actively

take responsibility keep diligent and make solid progress while striving for high-quality development.The Company will also firmly establish a sense of return to shareholders effectively implement the

"dual enhancement of development quality and shareholder returns" action plan significantly enhance

investors' satisfaction and actively contribute to stabilizing the capital market and boosting investor

confidence.

Section IV Governance Environmental and Social Information

1. Changes in directors and senior management

□ Applicable □ N/A

No changes to the Company’s directors and senior management occurred during the reporting period.Please refer to the 2025 Annual Report for details.

2. Profit distribution and converting capital reserves into share capital

for the reporting period

□ Applicable □ N/A

The Company has no interim dividend plan either in the form of cash or stock.

3. Implementation of any equity incentive plan employee stock

ownership plan or other incentive measures for employees

□ Applicable □ N/A

3.1. Equity incentives

A. On February 4 2026 the Company held the 21st Meeting of the 11th Board of Directors at which

the Proposal on the Satisfaction of Unlocking Conditions for the Second Unlocking Period of the

Reserved Restricted Shares under the 2021 Restricted Share Incentive Plan the Proposal on the

Satisfaction of Unlocking Conditions for the Third Unlocking Period of the 2021 Restricted Share

Incentive Plan and the Proposal on the Repurchase and Retirement of Certain Restricted Shares and

the Adjustment of Repurchase Price were reviewed and approved. On February 5 the Company

disclosed the Announcement on the Repurchase and Retirement of Certain Restricted Shares to

Reduce Registered Capital and Notice to Creditors. By the expiration of the declaring period the

Company had not received any declaration from the relevant creditors for early payout of debts or

provision of guarantee.B. On February 13 2026 the Company disclosed the Reminder Announcement on Unlocked Shares in

the Second Unlocking Period of the Reserved Restricted Shares under the 2021 Restricted Share

Incentive Plan Being Allowed for Public Trading as well as the Reminder Announcement on Unlocked

Shares in the Third Unlocking Period under the 2021 Restricted Share Incentive Plan Being Allowed for

Public Trading. As such the unlocked restricted shares in the second unlocking period of the reserved

restricted shares and in the third unlocking period under the 2021 Restricted Share Incentive Plan were

allowed for public trading on February 24 2026.C. On June 3 2026 the Company disclosed the Announcement on the Completion of the Repurchase

and Retirement of Certain Restricted Shares. As at June 3 2026 the Company completed the

repurchase and retirement of 40500 restricted shares.

3.2. Implementation of employee stock ownership plans

□ Applicable □ N/A

3.3. Other incentive measures for employees

□ Applicable □ N/A

4. Environmental information disclosure

Whether the listed company or any of its major subsidiaries is included in the list of companies that

are required by law to disclose environmental information.□ Yes □ No

Number of companies included in the list of companies that are required by

law to disclose environmental information

Index to the report on required

No. Company

environmental information

The Corporate Environmental

Information Legal Disclosure System

(Sichuan)

(https://103.203.219.138:8082/eps/in

1 Luzhou Laojiao Co. Ltd.

dex/enterprise-

morecode=91510500204706718H&

uniqueCode=9935f5c0df9bbd14&dat

e=2024&type=true&isSearch=true)

5. Social responsibility

In the first half of 2026 adhering to the mission and responsibility of a state-owned enterprise the

Company strictly followed national arrangements for consolidating and expanding poverty alleviation

achievements and comprehensively advancing rural revitalization. It advanced a coordinated range of

social responsibility initiatives including rural assistance public welfare student aid and social

preferential care. The Company continued to improve long-term assistance mechanisms delivered a

full range of down-to-earth public welfare projects and fulfilled its corporate social responsibilities

through concrete actions.A. Sustained and long-term efforts in rural revitalization assistance

Focusing on key areas including industrial empowerment foundation consolidation talent cultivation

and people’s livelihood improvement the Company actively carried out assistance work and steadily

consolidated and expanded poverty alleviation achievements. First the Company bolstered industrial

self-development capacity to solidify the foundation of local growth. By coordinating capital and talent

resources the Company fully supported the implementation of targeted assistance projects in

Hongyuan County facilitating the upgrading of local modern animal husbandry and helping deliver

sustainable income growth for local residents. Second the Company delivered solid consumption

assistance to broaden local income channels. It continued to purchase characteristic agricultural

products of Hongyuan County such as yak milk and yak beef jerky. Consumption assistance drove

the high-quality development of the county’s featured industries and injected new vitality into local

economic growth. Third the Company provided meticulous livelihood care as a corporate citizen. The

Company conducted Spring Festival condolence activities and distributed daily necessities including

blankets rice and cooking oil to disadvantaged households in assisted villages such as Guntang

Village of Hongyuan County and Xiangtian Village of Gulin County to alleviate living difficulties. It also

donated teaching and office equipment to Maiwa Primary School in Hongyuan County effectively

improving the modern school-running conditions on the plateau and enhancing the hardware

foundation for high-quality teaching and efficient campus operation.B. Targeted project implementation and diversified public welfare practices

Leveraging special public welfare projects and focusing on key areas including education support and

police-civilian preferential care the Company proactively fulfilled its social responsibilities as a state-

owned enterprise. First the Company supported student assistance programs to safeguard the

growth of young talents. It continued to participate in the “Little Schoolbag Big Love” public welfare

student aid project and provided targeted assistance to outstanding students from disadvantaged

families. Second the Company advanced local education development and promoted a culture ofrespecting teachers and valuing education. It renewed the donation agreement for the “LuzhouLaojiao Hongzhang Scholarship and Teaching Award Fund” with Luzhou High School which further

empowered the high-quality development of local basic education in Luzhou. Third the Company

paid tribute to public security martyrs and demonstrated corporate responsibility. From 2026 to 2028

the Company donated CNY 1 million annually to the Sichuan Public Security Police Martyrs

Foundation to support public security pension and preferential care programs.Going forward the Company will continue to fulfill its mission as a state-owned enterprise shoulder

its political and social responsibilities and take proactive actions in line with overall priorities. It will

advance public welfare assistance through pragmatic measures innovative approaches and

thoughtful initiatives support comprehensive rural revitalization promote the sound and sustainable

development of public welfare and charity undertakings and strive to demonstrate new responsibility

and achievements of a state-owned enterprise.

Section V Significant Events

1. Undertakings of the Company's actual controller shareholders

related parties and acquirer as well as the Company and other

commitment makers fulfilled in the reporting period or ongoing by the

end of this reporting period

□ Applicable □ N/A

No such cases in the reporting period.

2. Occupation of the Company's fund by the controlling shareholder or

its related parties for non-operating purposes

□ Applicable □ N/A

No such cases in the reporting period.

3. Irregularities in the provision of guarantees

□ Applicable □ N/A

No such cases in the reporting period.

4. Engagement and disengagement of CPAs firm

Are the interim financial statements audited

□ Yes □ No

The interim financial statements are not audited.

5. Explanation of the board of directors regarding the "non-standard

audit opinion" for the reporting period

□ Applicable □ N/A

6. Explanations of the board of directors regarding the "non-standard

audit opinion" of Last Year

□ Applicable □ N/A

7. Bankruptcy reorganization

□ Applicable □ N/A

No such cases in the reporting period.

8. Litigation

Material litigation and arbitration

□ Applicable □ N/A

Amount Whether it Trial results Execution of

Profile of Progress in

involved in forms an and impacts of judgment of Date of Disclosure

litigation litigation

the case (CNY estimate litigation litigation disclosure index

(arbitration) (arbitration)

10000) liability (arbitration) (arbitration)

The Company For the losses The Company

filed a lawsuit that the applied to

with ABC Company Hunan

Changsha cannot Province

Yingxin recover Higher

Branch over a The second through People's Court

deposit trial has been criminal for

dispute and concluded execution enforcement

October 15 http://www.cni

the case has 14942.5 No and the case procedures of the verdict.

2014 nfo.com.cn/

been is now at the 40% shall be Hunan

completed in stage of borne by ABC Province

the first enforcement. Changsha Higher

instance of Yingxin People's Court

Hunan Branch 20% ruled that

Province shall be borne Hunan

Higher by ABC Changsha

People's Court Changsha Intermediate

and the final Hongxin People’s Court

trial of the Branch and should see to

Supreme the rest shall the execution

People's be borne by of the verdict.Court. The the Company Upon the

case is now at itself. enforcement

the stage of the banks

enforcement. have paid part

of the

compensation

s.Other litigation

□ Applicable □ N/A

Amount Whether it Trial results Execution of

Profile of Progress in

involved in forms an and impacts of judgment of Date of Disclosure

litigation litigation

the case (CNY estimate litigation litigation disclosure index

(arbitration) (arbitration)

10000) liability (arbitration) (arbitration)

Other

litigations that

do not meet

the standard No significant

854 No Pending Pending

of a material impact

litigation which

is required to

be disclosed

9. Punishments and rectifications

□ Applicable □ N/A

No such cases in the reporting period.

10. Credit conditions of the Company as well as its controlling

shareholder and actual controller

□ Applicable □ N/A

11. Significant related party transactions

11.1. Related party transactions arising from routine operation

□ Applicable □ N/A

No such cases in the reporting period.

11.2. Related party transactions regarding purchase or sales of assets or equity

interests

□ Applicable □ N/A

No such cases in the reporting period.

11.3. Related party transactions arising from joint investments in external parties

□ Applicable □ N/A

No such cases in the reporting period.

11.4. Credits and liabilities with related parties

□ Applicable □ N/A

No such cases in the reporting period.

11.5. Transactions with related finance companies

□ Applicable □ N/A

The Company did not make deposits in receive loans or credit from and was not involved in any

other finance business with any related finance company or any of its related parties.

11.6. Transactions between finance companies controlled by the Company and

related parties

□ Applicable □ N/A

No related parties made deposits in received loans or credit from or was involved in any other

finance business with any finance company controlled by the Company.

11.7. Other significant related party transactions

□ Applicable □ N/A

No such cases in the reporting period.

12. Significant contracts and their execution

12.1. Trusteeship contracting and leasing

12.1.1. Trusteeship

□ Applicable □ N/A

No such cases in the reporting period.

12.1.2. Contracting

□ Applicable □ N/A

No such cases in the reporting period.

12.1.3. Leasing

□ Applicable □ N/A

No such cases in the reporting period.

12.2. Major guarantees

□ Applicable □ N/A

No such cases in the reporting period.

12.3. Entrusted assets management

□ Applicable □ N/A

Unit: CNY 10000

Entrusted asset

Overdue outstanding

Product type Risk characteristic management balance

amount

during the reporting period

Wealth management

R2 (medium-low risk) 180000 0

product of securities firm

Asset management entrusted by the Company as a single principal to financial institutions or high-

risk entrusted asset management investments with low security or poor liquidity

□ Applicable □ N/A

Unit: CNY 10000

Name of Type of Risk Fund Actual Actual Overview

Product

entrusted entrusted characteri Amount Start date End date investme gain/loss recovery and

type

institution institution stic nt during of inquiry

(or (or direction the gain/loss index (if

individual individual reporting during any)

) ) period the

reporting

period

The

products

did not

mature

Asset

during

manage

Guotai the

R2 ment Septemb

Haitong August Debt reporting

Securities (medium- product 1000 er 26

Securities 10 2026 assets period

low risk) issued by 2025

Co. Ltd. and there

securities

was no

firm

actual

amount

recovere

d.The

products

did not

mature

Asset

during

manage

Guotai the

R2 ment

Haitong October August Debt reporting

Securities (medium- product 29000

Securities 13 2025 10 2026 assets period

low risk) issued by

Co. Ltd. and there

securities

was no

firm

actual

amount

recovere

d.The

products

did not

mature

Asset

during

manage

Guotai the

R2 ment Novembe

Haitong August Debt reporting

Securities (medium- product 1000 r 10

Securities 10 2026 assets period

low risk) issued by 2025

Co. Ltd. and there

securities

was no

firm

actual

amount

recovere

d.The

products

Asset

did not

manage

Guotai mature

R2 ment Novembe

Haitong August Debt during

Securities (medium- product 19000 r 18

Securities 10 2026 assets the

low risk) issued by 2025

Co. Ltd. reporting

securities

period

firm

and there

was no

actual

amount

recovere

d.The

products

did not

mature

China Asset

during

CICC manage

the

Wealth R2 ment Novembe

August Debt reporting

Manage Securities (medium- product 20000 r 25

10 2026 assets period

ment low risk) issued by 2025

and there

Securities securities

was no

Co. Ltd. firm

actual

amount

recovere

d.The

products

did not

mature

Asset

during

manage

Guotai the

R2 ment

Haitong March August Debt reporting

Securities (medium- product 1000

Securities 30 2026 24 2026 assets period

low risk) issued by

Co. Ltd. and there

securities

was no

firm

actual

amount

recovere

d.The

products

did not

mature

Asset

during

manage

Guotai the

R2 ment

Haitong April 10 August Debt reporting

Securities (medium- product 19000

Securities 2026 24 2026 assets period

low risk) issued by

Co. Ltd. and there

securities

was no

firm

actual

amount

recovere

d.Total 90000 -- -- -- 0 -- --

12.4. Other significant contracts

□ Applicable □ N/A

No such cases in the reporting period.

13. Visits paid to the Company for purposes of research

communication interview etc. in the reporting period

□ Applicable □ N/A

Main inquiry

Index to main

information

Date of visit Place of visit Way of visit Type of visitor Visitor inquiry

and materials

information

provided

Conference

Room on the

March 26 First Floor of Institutional Company http://www.cni

Field survey Institution

2026 the East investor performance nfo.com.cn/

Building of the

Company

Communicatio

Company n through an Institutional Company http://www.cni

April 30 2026 Institution

Headquarters online investor performance nfo.com.cn/

platform

Communicatio Institutional Industry

Company n through an and individual trends and http://www.cni

May 22 2026 Other

Headquarters online investors and company nfo.com.cn/

platform media performance

Conference

Room on the Institutional Industry

First Floor of and individual trends and http://www.cni

June 30 2026 Field survey Other

the East investors and company nfo.com.cn/

Building of the media performance

Company

14. Other significant events

□ Applicable □ N/A

A. The Company disclosed in October 2014 and January 2015 respectively the contract disputes

involving three savings deposits of CNY 500 million in total with banks including ABC Changsha

Yingxin Branch and ICBC Nanyang Zhongzhou Branch. As of the end of the reporting period the

deposit dispute case with ICBC Nanyang Zhongzhou Branch has been concluded the deposit

dispute case with ABC Changsha Yingxin Branch is currently in the court enforcement process and

the Company had recovered a total amount of CNY 409 million for the three disputes.B. On January 30 2026 the Company carried out the 2025 interim dividend payout of CNY 13.58

(tax inclusive) for every 10 existing shares held totaling CNY 1998897185.75 (tax inclusive).

15. Significant events of subsidiaries

□ Applicable □ N/A

The Company invested in the Technical Renovation Project of Intelligent Baijiu Production (Phase I)

with the wholly-owned subsidiary Baijiu Production Company as the implementer. The total

investment amount approximated CNY 4782.5090 million. For further information see

Announcement No. 2022-24 on the Implementation of Luzhou Laojiao’s Technical Renovation Project

of Intelligent Baijiu Production (Phase I) by Subsidiary. The program is currently under construction.

Section VI Changes in Shares and Information about

Shareholders

1. Changes in shares

1.1 Changes in shares

Unit: Share

Before Changes in this period (＋，－) AfterCapitalizati

Issuance

Bonus on of

Number Proportion of new Other Subtotal Number Proportion

shares capital

shares

reserves

I.Restricted 2676180 0.18% -1834854 -1834854 841326 0.06%

shares

1.

Shares

held by the

state

2.

Shares

held by

state-

owned

corporatio

ns

3.

Shares

held by

2676180 0.18% -1834854 -1834854 841326 0.06%

other

domestic

investors

Of

which:

shares

held by

domestic

corporatio

ns

Share

s held by

2676180 0.18% -1834854 -1834854 841326 0.06%

domestic

individuals

4.

Shares

held by

foreign

corporatio

ns

Of

which:

shares

held by

foreign

corporatio

ns

Share

s held by

foreign

individuals

II. Non-

1469265 1471060

restricted 99.82% 1794354 1794354 99.94%

783 137

shares

1.CNY

1469265 1471060

common 99.82% 1794354 1794354 99.94%

783 137

shares

2.

Domestical

ly listed

foreign

shares

3.

Overseas

listed

foreign

shares

4. Other

III. Total 1471941 1471901

100.00% -40500 -40500 100.00%

shares 963 463

Reasons for the change in shares

□ Applicable □ N/A

A. According to the provisions of the 2021 Restricted Share Incentive Plan (Draft) 27800 restricted

shares of 17 awardees that satisfied the unlocking conditions for the second unlocking period of the

reserved restricted shares under the 2021 Restricted Share Incentive Plan and 1962814 restricted

shares of 421 awardees that satisfied the unlocking conditions for the third unlocking period of the

2021 Restricted Share Incentive Plan were allowed for public trading on February 24 2026.

B. On February 4 2026 the Company held the 21st Meeting of the 11th Board of Directors at which

the Proposal on the Repurchase and Retirement of Certain Restricted Shares and the Adjustment of

Repurchase Price was reviewed and approved. As six awardees were no longer eligible for the

incentives the Company decided to repurchase and retire a total of 40500 restricted shares that had

been granted to the aforesaid awardees but remained in lockup which was completed on June 3

2026.

C. During the reporting period due to the unlocking of restricted shares under the restricted share

incentive plan locked shares of the Company’s senior management increased by 196260 shares.Approval of share changes

□ Applicable □ N/A

A. On February 4 2026 the Company held the 21st Meeting of the 11th Board of Directors at which

the Proposal on the Satisfaction of Unlocking Conditions for the Second Unlocking Period of the

Reserved Restricted Shares under the 2021 Restricted Share Incentive Plan and the Proposal on the

Satisfaction of Unlocking Conditions for the Third Unlocking Period of the 2021 Restricted Share

Incentive Plan were approved. As such 1990614 restricted shares of 438 awardees that satisfied

the unlocking conditions for the second unlocking period of the reserved restricted shares and for the

third unlocking period under the 2021 Restricted Share Incentive Plan were allowed for public trading

on February 4 2026.B. On February 4 2026 the Company held the 21st Meeting of the 11th Board of Directors at which

the Proposal on the Repurchase and Retirement of Certain Restricted Shares and the Adjustment of

Repurchase Price was reviewed and approved. As six awardees were no longer eligible for the

incentives the Company decided to repurchase and retire a total of 40500 restricted shares that had

been granted to the aforesaid awardees but remained in lockup which was completed on June 3

2026. Upon that the total share capital of the Company decreased from 1471941963 shares to

1471901463 shares.

Transfer of share ownership

□ Applicable □ N/A

Implementation progress of shares repurchases

□ Applicable □ N/A

Implementation progress of share buyback reduction through call auction trading

□ Applicable □ N/A

Effects of changes in shares on the basic EPS diluted EPS net assets per share attributable to

common shareholders of the Company and other financial indexes over the last year and the last

reporting period

□ Applicable □ N/A

Other contents that the Company considers it necessary or required by the securities regulatory

authorities to disclose

□ Applicable □ N/A

1.2 Changes in restricted shares

□ Applicable □ N/A

Unit: Share

Number of Number ofDecrease in Increase in

restricted restrictedrestricted restricted

Name of shares held at shares held at Reason for Date ofshares during shares during

shareholder the beginning the end of the restriction unlockingthe reporting the reporting

of the reportingperiod period

reporting period

period

In accordance

with the

Restricted

relevant

2021 shares under

unlocking

Restricted the 2021

2159814 2031114 128700 provisions of

Share Restricted

the 2021

Incentive Plan Share

Restricted

Incentive Plan

Share

Incentive Plan

In accordance

with the

Restricted

relevant

Locked shares under

unlocking

shares of the 2021

516366 196260 712626 provisions of

senior Restricted

the 2021

management Share

Restricted

Incentive Plan

Share

Incentive Plan

Total 2676180 2031114 196260 841326 -- --

2. Issuance and listing of securities

□ Applicable □ N/A

3. Total number of shareholders and their shareholdings

Unit: Share

Total number of common Total number of preferred shareholders with

shareholders at the end of 189745 resumed voting rights by the end of the 0

the reporting period reporting period (if any)(see Note 8)

Shareholdings of shareholders with a shareholding percentage over 5% or the top 10 shareholders (exclusive of shares lent in refinancing)

Total shares Increase/de Pledged marked or frozen

Number of Number of

Shareholdin held by the crease shares

Name of Nature of holding holding non-

g end of the during the

shareholder shareholder restricted restricted

percentage reporting reporting Status of Number of

shares shares

period period shares shares

Luzhou

Laojiao State-owned

26.05% 383433639 0 0 383433639 N/A 0

Group Co. corporation

Ltd.Luzhou

XingLu

State-owned

Investment 24.86% 365971142 0 0 365971142 N/A 0

corporation

Group Co.Ltd.Bank of

China Co.Ltd. – Baijiu Other 4.12% 60707155 6709380 0 60707155 N/A 0

index

classification

securities

investment

fund by

China

Merchants

Fund

Hong Kong

Securities

Outbound

Clearing 2.21% 32467845 -2046530 0 32467845 N/A 0

corporation

Company

Limited

China

Securities

Finance Other 1.51% 22224821 -11617238 0 22224821 N/A 0

Corporation

Limited

China

Construction

Bank

Corporation

－Penghua

Other 1.50% 22107005 2442097 0 22107005 N/A 0

Wine &

Liquor

Exchange-

Traded

Fund

Guofeng

Xinghua

(Beijing)

Private

Equity Fund

Managemen

t Co. Ltd.－

Guofeng Other 1.28% 18871962 0 0 18871962 N/A 0

Xinghua

Honghuzhiy

uan Tranche

3 Private

Securities

Investment

Fund No. 1

Rui Life

Insurance

Other 1.11% 16388164 9323530 0 16388164 N/A 0

Co. Ltd.－

Own Funds

Bank of

China Co.Ltd.－Blue

chip

selected

Other 0.83% 12180112 -13372488 0 12180112 N/A 0

hybrid

securities

investment

fund by E

Fund

China Life

Other 0.81% 11930009 -4943913 0 11930009 N/A 0

Insurance

Company

Limited –

Traditional –

Ordinary

Insurance

Product –

005L–

CT001

(Shanghai)

Strategic investors or

general corporations

become the top-ten

N/A

shareholders due to placing

of new shares (if any) (see

note 3)

1. Luzhou Laojiao Group Co. Ltd. and Luzhou XingLu Investment Group Co. Ltd. are both state-owned

holding companies under the jurisdiction of SASAC of Luzhou. The two companies have signed the

agreement of persons acting in concert. For details please refer to the announcement of the Company on

Related parties or acting-in-

May 23 2024 - Announcement on the Renewed Agreement of Persons Acting in Concert Signed by

concert

Shareholders (Announcement No. 2024-22).

2. In addition whether there is an association between the remaining shareholders or they belong to persons

acting in concert is unknown.Explain if any of the

shareholders above was

involved in entrusting/being N/A

entrusted with voting rights

or waiving voting rights

Special account for

repurchased shares among

N/A

the top 10 shareholders (if

any) (see note 11)

Shareholdings of the top 10 non-restricted shareholders (exclusive of shares lent in refinancing and locked shares of senior management)

Type of shares

Name of shareholder Number of non-restricted shares held by the end of the reporting period

Type Number

CNY

Luzhou Laojiao Group Co.

383433639 common 383433639

Ltd.shares

CNY

Luzhou XingLu Investment

365971142 common 365971142

Group Co. Ltd.shares

Bank of China Co. Ltd. –

CNY

Baijiu index classification

60707155 common 60707155

securities investment fund

shares

by China Merchants Fund

CNY

Hong Kong Securities

32467845 common 32467845

Clearing Company Limited

shares

CNY

China Securities Finance

22224821 common 22224821

Corporation Limited

shares

China Construction Bank

CNY

Corporation－Penghua Wine

22107005 common 22107005

& Liquor Exchange-Traded

shares

Fund

Guofeng Xinghua (Beijing) 18871962 CNY 18871962

Private Equity Fund common

Management Co. Ltd.－ shares

Guofeng Xinghua

Honghuzhiyuan Tranche 3

Private Securities

Investment Fund No. 1

CNY

Rui Life Insurance Co. Ltd.

16388164 common 16388164

－Own Funds

shares

Bank of China Co. Ltd.－

CNY

Blue chip selected hybrid

12180112 common 12180112

securities investment fund

shares

by E Fund

China Life Insurance

Company Limited – CNY

Traditional – Ordinary 11930009 common 11930009

Insurance Product – 005L– shares

CT001 (Shanghai)

The statement of association

or acting-in-concert between

the top 10 shareholders of

unrestricted shares and

See the upper part of this table

between the top 10

shareholders of unrestricted

shares and top 10

shareholders

Top 10 common

shareholders participating in

None

securities margin trading (if

any) (see note 4)

5% or greater shareholders top 10 shareholders and top 10 non-restricted shareholders involved in

refinancing shares lending

□ Applicable □ N/A

Changes in top 10 shareholders and top 10 non-restricted shareholders due to refinancing shares

lending/return compared with the prior period

□ Applicable □ N/A

Did any of the top 10 common shareholders or the top non-restricted common shareholders of the

Company conduct any promissory repurchase during the reporting period.□ Yes □ No

The top 10 non-restricted common shareholders the top 10 common shareholders did not conduct

any promissory repurchase during the reporting period.

4. Changes in shares held by directors and senior management

□ Applicable □ N/A

No changes occurred to shares held by directors and senior management in the reporting period. See

the 2025 Annual Report for more details.

5. Change of controlling shareholder or actual controller

If the Company previously disclosed that the actual controller plans a change of control which has not

yet been finalized please elaborate on the latest progress of such change of control arrangement.□ Applicable □ N/A

Change of the controlling shareholder during the reporting period

□ Applicable □ N/A

No such cases in the reporting period.Change of the actual controller during the reporting period

□ Applicable □ N/A

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

6. Preferred shares

□ Applicable □ N/A

No preferred stock in the Company during the reporting period.

Section VII Information about Bond

□ Applicable □ N/A

Section VIII Financial Report

1. Auditor’s report

Are these interim financial statements audited by an independent auditor

□ Yes □ No

The interim financial statements are not audited by an independent auditor.

2. Financial statements

Monetary unit for the financial statements and the notes thereto: CNY

Prepared by: Luzhou Laojiao Co. Ltd.Consolidated Balance Sheet

As at June 30 2026

Unit: CNY

Item Balance as at June 30 2026 Balance as at January 1 2026

Current assets:

Cash and cash equivalents 26130007572.66 27341566698.37

Settlement reserves

Lending funds

Held-for-trading financial assets 1813215967.55 1584771959.37

Derivative financial assets

Notes receivables

Accounts receivable 22775760.83 6075570.66

Accounts receivable financing 1259916564.02 1466494973.96

Prepayment 209001469.33 145596475.65

Premiums receivable

Reinsurance accounts receivable

Reinsurance contract reserve

Other receivables 72986570.12 17318326.51

Including：Interests receivable

Dividends receivable 56365904.97

Buying back the sale of financial

assets

Inventories 15680512860.04 15396031707.35

Including：Data resources

Contract assets

Assets held for sale

Non-current assets due within one

year

Other current assets 434307779.01 430459910.63

Total current assets 45622724543.56 46388315622.50

Non-current assets:

Disbursement of loans and advances

Investments in debt obligations

Investments in other debt obligations

Long-term receivables

Long-term equity investments 2988392869.59 2930804469.77

Investments in other equity

instruments 383686395.18 475499237.90

Other non-current financial assets

Investment property 46715779.53 47892751.08

Fixed assets 8228856821.33 8523891404.03

Construction in progress 2440184560.92 2064766283.24

Productive biological assets

Oil and gas assets

Use right assets 15463891.19 19863214.19

Intangible assets 3375828834.10 3414065535.11

Including：Data resources 2142458.85 2856611.80

Development expenses

Including：Data resources

Goodwill

Long-term deferred expenses 841046.66 1034985.48

Deferred tax assets 225579538.50 264019980.93

Other non-current assets 996975970.51 664841367.04

Total non-current assets 18702525707.51 18406679228.77

Total assets 64325250251.07 64794994851.27

Current liabilities:

Short-term loans 3001758333.34

Borrowings from the central bank

Loans from other banks

Held-for-trading financial liabilities

Derivative financial liabilities

Notes payable

Accounts payable 1280907734.39 1413421175.80

Advance from customer 1094194.82 2014696.36

Contract liabilities 2437295608.51 3367443727.83

Financial assets sold for repurchase

Deposits from customers and inter-

bank

Customer brokerage deposits

Securities underwriting brokerage

deposits

Employee benefits payable 393837011.30 481722380.36

Taxes payable 463959026.69 1612884069.81

Other payable 6946531808.09 615753466.88

Including：Interests payable

Dividends payable 6529731370.41 28163719.84

Handling charges and commissions

payable

Reinsurance accounts payable

Liabilities held for sale

Non-current liabilities due within one

year 1518137222.49 4074199213.05

Other current liabilities 316173918.11 436920270.99

Total current liabilities 16359694857.74 12004359001.08

Non-current liabilities:

Insurance contract reserves

Long-term loans 1831359966.73 2627166310.93

Bonds payable

Including：Preferred shares

Perpetual bonds

Lease liabilities 14358113.80 15693190.61

Long-term payables

Long-term payroll payables

Accrued liabilities

Deferred income 87011078.05 82513945.77

Deferred tax liabilities 149912575.65 171180022.42

Other non-current liabilities

Total non-current liabilities 2082641734.23 2896553469.73

Total liabilities 18442336591.97 14900912470.81

Owners' equity

Share capital 1471901463.00 1471941963.00

Other equity instruments

Including: Preferred shares

Perpetual bonds

Capital reserves 5440714241.57 5439328102.53

Less: treasury stock 8809971.76 159634274.47

Other comprehensive income 76910721.51 143628853.52

Special reserves

Surplus reserves 1471941963.00 1471941963.00

General risk reserve

Undistributed profits 37280198661.98 41413087028.16

Total equity attributable to owners of

the parent company 45732857079.30 49780293635.74

Non-controlling interests 150056579.80 113788744.72

Total owners' equity 45882913659.10 49894082380.46

Total liabilities and owners' equity 64325250251.07 64794994851.27

Legal representative: Liu Miao

Responsible person for accounting work: Xie Hong

Responsible person for the Company’s accounting department: Song Ying

Balance Sheet of Parent Company

As at June 30 2026

Unit: CNY

Item Balance as at June 30 2026 Balance as at January 1 2026

Current assets:

Cash and cash equivalents 23927192164.41 25751391606.26

Held-for-trading financial assets 1813215967.55 1484071959.37

Derivative financial assets

Notes receivables

Accounts receivable 3570504.31 20408.90

Accounts receivable financing

Prepayment 9916643.29 11492777.54

Other receivables 13547905380.85 12687994073.65

Including：Interests receivable

Dividends receivable 56365904.97

Inventories 778971.69 832455.26

Including：Data resources

Contract assets

Assets held for sale

Non-current assets due within one

year

Other current assets 233003006.16 326420192.60

Total current assets 39535582638.26 40262223473.58

Non-current assets:

Investments in debt obligations

Investments in other debt obligations

Long-term receivables

Long-term equity investments 6970185312.30 6908843624.36

Investments in other equity

instruments 383686395.18 475195316.27

Other non-current financial assets

Investment property 46715779.53 47892751.08

Fixed assets 800081588.96 831967244.40

Construction in progress 424699463.41 348549010.10

Productive biological assets

Oil and gas assets

Use right assets

Intangible assets 811523084.83 828722903.00

Including：Data resources

Development expenses

Including：Data resources

Goodwill

Long-term deferred expenses

Deferred tax assets 87892922.74 93739377.83

Other non-current assets 920344192.73 576424111.73

Total non-current assets 10445128739.68 10111334338.77

Total assets 49980711377.94 50373557812.35

Current liabilities:

Short-term loans 3001758333.34

Held-for-trading financial liabilities

Derivative financial liabilities

Notes payable

Accounts payable 44739969.13 46523094.84

Advance from customer 1004564.59 925929.49

Contract liabilities 2631879.16 960049.10

Employee benefits payable 134193083.29 153536783.20

Taxes payable 566687.43 6628201.64

Other payables 12311533974.01 4345333587.91

Including：Interests payable

Dividends payable 6501567650.57

Liabilities held for sale

Non-current liabilities due within one

year 1510049088.62 4064407192.04

Other current liabilities 342144.29 124806.38

Total current liabilities 17006819723.86 8618439644.60

Non-current liabilities:

Long-term loans 1220000000.00 2219000000.00

Bonds payable

Including：Preferred shares

Perpetual bonds

Lease liabilities

Long-term payables

Long-term payroll payables

Accrued liabilities

Deferred income 9050276.94 10374707.70

Deferred tax liabilities 82462157.38 94405983.06

Other non-current liabilities

Total non-current liabilities 1311512434.32 2323780690.76

Total liabilities 18318332158.18 10942220335.36

Owners' equity

Share capital 1471901463.00 1471941963.00

Other equity instruments

Including: Preferred shares

Perpetual bonds

Capital reserves 5437003148.75 5435590744.65

Less: treasury stock 8809971.76 159634274.47

Other comprehensive income 76157951.13 141260071.92

Special reserves

Surplus reserves 1471941963.00 1471941963.00

Undistributed profits 23214184665.64 31070237008.89

Total owners' equity 31662379219.76 39431337476.99

Total liabilities and owners' equity 49980711377.94 50373557812.35

Consolidated Income Statement

Unit: CNY

Item H1 2026 H1 2025

1. Total operating revenue 10472224575.78 16453732904.65

Including: Operating revenue 10472224575.78 16453732904.65

Interest income

Earned premium

Fee and commission

income

2. Total operating costs 4906160459.62 6073189397.91

Including: Cost of sales 1534654594.77 2124120485.84

Interest expense

Handling charges and

commission expenses

Refunded premiums

Net payments for

insurance claims

Net appropriation of

insurance liability reserves

Bond insurance expense

Reinsurance Expenses

Taxes and surcharges 1787893231.53 2182376054.10

Selling and distribution

expenses 1329931987.36 1518512182.04

General and administrative

expenses 391895740.55 428272440.13

Research and

Development expenses 74992033.70 83864133.32

Financial expenses -213207128.29 -263955897.52

Including：Interest

expenses 62669133.88 91887410.97

Interest income 286465379.74 357946373.68

Plus: Other income 25189572.47 27222431.63

Investment income ("-" for

losses) 85943645.48 11388867.58

Including: income from

investment in associates and joint 101167815.25 54787007.14

ventures

Income from the

derecognition of financial assets

measured at amortized cost (“-” for

losses)

Foreign exchange gains ("-"

for losses)

Net gain on exposure hedges

(“-” for losses)

Gains from the changes in fairvalues(“-“ for losses) 30598408.97 23005153.12Credit impairment losses (“-”

for losses) -755446.69 -51195.97Impairment losses(“-“ forlosses)

Gains from disposal of

assets("-" for losses) 337510.87 106501.12

3. Operating profits ("-" for losses) 5707377807.26 10442215264.22

Plus: non-operating income 14566586.48 7221769.50

Less: non-operating expenses 1113205.53 39191852.89

4. Total profits before tax ("-" for 5720831188.21 10410245180.83

total losses)

Less: income tax expenses 1343880854.63 2726585021.21

5. Net profit ("-" for net loss) 4376950333.58 7683660159.62

5.1 By operating continuity

5.1.1 Net profit from continuing

operation ("-" for losses) 4376950333.58 7683660159.62

5.1.2 Net profit from discontinued

operation ("-" for losses)

5.2 By ownership

1) Attributable to shareholders of the

parent company ("-" for losses) 4339264086.33 7662907812.98

2) Attributable to non-controlling

interests ("-" for losses) 37686247.25 20752346.64

6. Net of tax from other

comprehensive income -40667593.93 27103027.62

Net of tax from other comprehensive

income to the owner of the parent -39222916.70 27670156.53

company

6.1 Other comprehensive income

that cannot be reclassified into the -44427098.60 24665797.66

profit and loss:

1) Remeasure the variation of net

indebtedness or net asset of defined

benefit plans

2) Share in other comprehensive

income that cannot be classified into -4216277.98 1308060.60

profit and loss under equity method

3) Changes in fair value of

investments in other equity -40210820.62 23357737.06

instruments

4) Changes in fair value of the

company’s credit risks

5) Other

6.2 Other comprehensive income

that will be reclassified into the profit 5204181.90 3004358.87

and loss

1) Share in other comprehensive

income that will be classified into 6969387.90 3697422.74

profit and loss under equity method

2) Changes in fair value of

investments in other debt obligations

3) Other comprehensive income

arising from the reclassification of

financial assets

4) Allowance for credit impairments in

investments in other debt obligations

5) Reserve for cash-flow hedge

6) Balance arising from the

translation of foreign currency -1765206.00 -693063.87

financial statements

7) Others

Net of tax from other comprehensive

income to non-controlling interests -1444677.23 -567128.91

7. Total comprehensive income 4336282739.65 7710763187.24

Total comprehensive income

attributable to owners of the parent 4300041169.63 7690577969.51

company

Total comprehensive income

attributable to non-controlling 36241570.02 20185217.73

interests

8. Earnings per share

(1) Basic earnings per share 2.95 5.21

(2) Diluted earnings per share 2.95 5.21

Legal representative: Liu Miao

Responsible person for accounting work: Xie Hong

Responsible person for the Company’s accounting department: Song Ying

Income Statement of Parent Company

Unit: CNY

Item H1 2026 H1 2025

1. Operating revenue 3972872585.66 6761860378.40

Less: Cost of sales 3123729831.51 5349358286.51

Taxes and surcharges 11617426.77 28088121.60

Selling and distribution

expenses

General and administrative

expenses 331804695.92 367767926.75

Research and Development

expenses 32840290.80 36613514.33

Financial expenses -186299484.46 -253357166.74

Including：Interest expenses 62894817.36 91402233.60

Interest income 250655047.43 346058343.12

Plus: Other income 7851331.02 5139818.51

Investment income ("-" for

losses) 104925684.37 45382369.07

Including: income from

investment in associates and joint 100578460.74 51892249.87

ventures

Income from the

derecognition of financial assets at

amortized cost (“-” for losses)

Net gain on exposure hedges

(“-” for losses)

Gains from the changes in fairvalues(“-“ for losses) 29748408.97 23005153.12Credit impairment losses (“-” for

losses) -148593.96 38546.18

Asset impairment losses (“-” for

losses)

Gains from disposal of assets("-"

for losses) 19262.03

2. Operating profits ("-" for losses) 801556655.52 1306974844.86

Plus: non-operating income 12752167.54 9521138.73

Less: non-operating expenses 193213.44 27000000.00

3. Total profits before tax ("-" for 814115609.62 1289495983.59

total losses)

Less: income tax expenses 197918348.36 361312965.19

4. Net profit ("-" for net loss) 616197261.26 928183018.40

4.1 Net profit from continuing

operation ("-" for losses) 616197261.26 928183018.40

4.2 Net profit from discontinued

operation ("-" for losses)

5. Net of tax from other

comprehensive income -37704057.48 28363220.40

5.1 Other comprehensive income

that cannot be reclassified into the -44673445.38 24665797.66

profit and loss:

1) Remeasure the variation of net

indebtedness or net asset of defined

benefit plans

2) Share in other comprehensive

income that cannot be classified into -4216277.98 1308060.60

profit and loss under equity method

3) Changes in fair value of

investments in other equity -40457167.40 23357737.06

instruments

4) Changes in fair value of the

company’s credit risks

5) Other

5.2 Other comprehensive income

that will be reclassified into the profit 6969387.90 3697422.74

and loss

1) Share in other comprehensive

income that will be classified into 6969387.90 3697422.74

profit and loss under equity method

2) Changes in fair value of

investments in other debt obligations

3) Other comprehensive income

arising from the reclassification of

financial assets

4) Allowance for credit impairments in

investments in other debt obligations

5) Reserve for cash-flow hedge

6) Balance arising from the

translation of foreign currency

financial statements

7) Others

6. Total comprehensive income 578493203.78 956546238.80

7. Earnings per share

(1) Basic earnings per share 0.42 0.62

(2) Diluted earnings per share 0.42 0.62

Consolidated Statement of Cash Flows

Unit: CNY

Item H1 2026 H1 2025

1. Cash flows from operating

activities

Cash received from sale of goods

and rendering of services 10744210447.26 17950257292.73

Net increase in customer bank

deposits and placement from banks

and other financial institutions

Net increase in loans from central

bank

Net increase in loans from other

financial institutions

Premiums received from original

insurance contracts

Net cash received from reinsurance

business

Net increase in deposits and

investments from policyholders

Cash received from interest handling

charges and commissions

Net increase in placements from

other financial institutions

Net capital increase in repurchase

business

Net cash received from customer

brokerage deposits

Refunds of taxes and surcharges 1193122.93 5221168.92

Cash received from other operating

activities 404787604.29 358212166.92

Subtotal of cash inflows from

operating activities 11150191174.48 18313690628.57

Cash paid for goods purchased and

services received 1624889287.43 2720685968.23

Net increase in loans and advances

to customers

Net increase in deposits in central

bank and other banks and financial

institutions

Cash paid for original insurance

contract claims

Net increase in lending funds

Cash paid for interests handling

charges and commissions

Cash paid for policy dividends

Cash paid to and on behalf of

employees 763353426.33 807262937.39

Cash paid for taxes and surcharges 5338788858.80 7401832684.30

Cash paid for other operating

activities 1341548643.95 1319439008.50

Subtotal of cash outflows from

operating activities 9068580216.51 12249220598.42

Net cash flows from operating

activities 2081610957.97 6064470030.15

2. Cash flows from investing

activities

Cash received from disposal of

investments 232860322.86 608462037.37

Cash received from returns on

investments 359964.55 31271.10

Net cash received from disposal of

fixed assets intangible assets and 904210.85 291388.41

other long-term assets

Net cash received from disposal of

subsidiaries and other business units

Cash received from other investing

activities

Subtotal of cash inflows from

investing activities 234124498.26 608784696.88

Cash paid to acquire and construct

fixed assets intangible assets and 713743846.14 736919110.77

other long-term assets

Cash paid for investments 400000000.00 500000000.00

Net increase in pledge loans

Net cash paid to acquire subsidiaries

and other business units

Cash paid for other investing

activities

Subtotal of cash outflows from

investing activities 1113743846.14 1236919110.77

Net cash flows from investing

activities -879619347.88 -628134413.89

3. Cash flows from financing

activities

Cash received from investors

Including: cash received by

subsidiaries from investments by

minority shareholders

Cash received from borrowings 3203193655.80

Cash received from other financing

activities

Subtotal of cash inflows from

financing activities 3203193655.80

Cash paid for debt repayments 3551200000.00 1510500000.00

Cash paid for distribution of

dividends and profits or payment of 2069236509.66 2134326492.66

interest

Including: dividends and profits paid

to minority shareholders by

subsidiaries

Cash paid for other financing

activities 6335171.53 3786414.12

Subtotal of cash outflows from

financing activities 5626771681.19 3648612906.78

Net cash flows from financing

activities -2423578025.39 -3648612906.78

4. Effect of fluctuation in exchange

rate on cash and cash equivalents -14598204.34 -1892014.14

5. Net increase in cash and cash

equivalents -1236184619.64 1785830695.34

Plus: balance of cash and cash

equivalents at the beginning of the 26925093961.82 33367668014.46

period

6. Balance of cash and cash 25688909342.18 35153498709.80

equivalents at the end of the

period

Cash Flow Statements of Parent Company

Unit: CNY

Item H1 2026 H1 2025

1. Cash flows from operating

activities

Cash received from sale of goods

and rendering of services 4487537345.03 7640989932.07

Refunds of taxes and surcharges

Cash received from other operating

activities 1046872325.60 8791877412.13

Subtotal of cash inflows from

operating activities 5534409670.63 16432867344.20

Cash paid for goods purchased and

services received 3529968217.50 5049122339.07

Cash paid to and on behalf of

employees 241077939.48 258437591.21

Cash paid for taxes and surcharges 197943704.51 417998907.85

Cash paid for other operating

activities 115608353.57 195551453.67

Subtotal of cash outflows from

operating activities 4084598215.06 5921110291.80

Net cash flows from operating

activities 1449811455.57 10511757052.40

2. Cash flows from investing

activities

Cash received from disposal of

investments 130710322.86 608462037.37

Cash received from returns on

investments 359964.55 31271.10

Net cash received from disposal of

fixed assets intangible assets and 168440.71 72786.91

other long-term assets

Net cash received from disposal of

subsidiaries and other business units

Cash received from other investing

activities

Subtotal of cash inflows from

investing activities 131238728.12 608566095.38

Cash paid to acquire and construct

fixed assets intangible assets and 413591845.80 299172584.54

other long-term assets

Cash paid for investments 400000000.00 500000000.00

Net cash paid to acquire subsidiaries

and other business units

Cash paid for other investing

activities

Subtotal of cash outflows from

investing activities 813591845.80 799172584.54

Net cash flows from investing

activities -682353117.68 -190606489.16

3. Cash flows from financing

activities

Cash received from investors

Cash received from loans 3000000000.00

Cash received from other financing

activities

Subtotal of cash inflows from

financing activities 3000000000.00

Cash paid for debt repayments 3551200000.00 1510500000.00

Cash paid for distribution of

dividends and profits or payment of 2063681620.94 2134326492.66

interest

Cash paid for other financing

activities 2937586.50 2180000.00

Subtotal of cash outflows from

financing activities 5617819207.44 3647006492.66

Net cash flows from financing

activities -2617819207.44 -3647006492.66

4. Effect of fluctuation in exchange

rate on cash and cash equivalents -979643.75 -122323.51

5. Net increase in cash and cash

equivalents -1851340513.30 6674021747.07

Plus: balance of cash and cash

equivalents at the beginning of the 25369119497.48 26476599296.11

period

6. Balance of cash and cash

equivalents at the end of the 23517778984.18 33150621043.18

period

Consolidated Statement of Changes in Owners' Equity

For the six months ended June 30 2026

Unit: CNY

H1 2026

Equity attributable to owners of the parent company

Other equity Othe Non-

instruments Less r contr Total

Item Shar Capit Gene： Com Spec Surpl ral Undi ollin

owne

e Prefe al Trea preh ial us strib Othe Subt rs'

capit rred Perp

g

Othe reser sury ensiv reser reser

risk uted r otal inter equit

al stoc etual r ve stoc e ve ve

reser profit y

k bond

ve estsk Inco

me

1471 5439 1471 4141 4978 4989

1. Balance as at 1596 1436 1137

December 31 of 941 328 941 3087 0293 40823427 2885 8874

last year 963.0 102.5 963.0 028. 635. 380.4.47 3.52 4.72

0 3 0 16 74 46

Plus:

adjustments for

changes in

accounting

policies

Adjustments for

correction of

accounting errors

in prior year

Others

1471 5439 1471 4141 4978 4989

2. Balance as at 1596 1436 1137

January 1 of the 941 328 941 3087 0293 40823427 2885 8874

current year 963.0 102.5 963.0 028. 635. 380.4.47 3.52 4.72

0 3 0 16 74 46

- - -

3.Increases/dec - -

reases in the - 1386 4132 4047 3626 4011

current period 1508 66714050 139. 888 436 7835 168

(“-” for 2430 8132

decreases) 0.00 04 366.1 556.4 .08 721.32.71 .01

8 4 6

- 4339 4300 4336

(1) Total 36243922 264 041 282

comprehensive 1570

income 2916 086.3 169.6 739.6.02.70 3 3 5

(2) Capital -- 1386 1529 1530

contributed or 1516 2626

reduced by 4050 139. 8711 13374147 5.06

owners 0.00 04 0.25 5.31

1.21

- -

Capital - 1443 14433714 1481

contributions by 4050 8520 8520

owners 255. 39960.00 5.26 5.26

00 0.26

Capital

contributions by

other equity

instruments

holders

Amounts of -

share-based 5100 8601 8628

payments 3501 2626394. 904. 170.recognized in 510. 5.06

owners' equity 04 99 0595

Others

- - -

8499 8500 8500

(3) Profit 8171

distribution 647 464 46468.50

667.8 836.3 836.3

2 2 2

Withdrawal of

surplus reserves

Withdrawal of

general risk

reserve

- - -

Profit distributed 8500 8500 8500

to owners (or 464 464 464

shareholders) 836.3 836.3 836.3

2 2 2

8171 8171

Others

68.50 68.50

-

(4) Internal carry- 27492749

forward of 5215

owners' equity 5215 .31.31

Conversion of

capital reserves

into paid-in

capital

Conversion of

surplus reserves

into paid-in

capital

Surplus reserves

offsetting losses

Carry-forward of

retained earnings

from changes in

defined benefit

plans

Carry-forward of -

retained earnings 27492749

from other 5215

comprehensive 5215

income .31.31

Others

(5) Special

reserves

Withdrawal for

the period

Use for the

period

(6) Others

1471 5440 1471 3728 4573 4588

4. Balance as at 8809 7691 1500

June 30 of the 901 714 941 0198 2857 2913971. 0721 5657

current year 463.0 241.5 963.0 661. 079. 659.76 .51 9.80

0 7 0 98 30 10

For the six months ended June 30 2025

Unit: CNY

H1 2025

Equity attributable to owners of the parent company

Other equity Othe Non-

instruments Less r contr Total

Item Shar Capit : Com Spec Surpl Gene Undi ollin owne

e Prefe al Trea preh ial us

ral

risk strib Othe Subt g

rs'

capit rred Perp Othe reser sury ensiv reser reser reser uted r otal inter

equit

al stoc etual r ve stoc e ve ve ve profitbond ests

y

k k Inco

me

1471 5365 1471 3934 4738 4750

1. Balance as 3456 8423 1195

at December 951 763 951 0298 8500 80069944 5115 0608

31 of last year 503.0 566.5 503.0 309. 553. 635.3.89 .38 2.25

0 5 0 42 46 71

Plus:

adjustments for

changes in

accounting

policies

Adjustments for

correction of

accounting

errors in prior

year

Others

2. Balance as 1471 5365 1471 3934 4738 47503456 8423 1195

at January 1 of 951 763 951 0298 8500 8006

the current 9944 5115 0608503.0 566.5 503.0 309. 553. 635.year 3.89 .38 2.25

0 5 0 42 46 71

-

3.Increases/de - - -

creases in the 4167 2766 1095 2056

current period 1779 8479 82738744 9367 202 0421

(“-” for 0464 5008 8965

decreases) .86 .02 840.3 .147.38 1.10 9.96

6

(1) Total 2767 7662 7690 2018 7710

comprehensive

income 0156 907 577 5217 763

.53 812.9 969.5 .73 187.2

8 1 4

(2) Capital -4164 2195 2199

contributed or 1779 3752

reduced by 9948 5459 29790464 03.41

owners .11 5.49 8.90

7.38

-

Capital 1616 16161616

contributions by 4350 4350

owners 4350 8.32 8.32

8.32

Capital

contributions by

other equity

instruments

holders

Amounts of -

share-based 4164 5791 58281626 3752

payments 9948 1087 6290

recognized in 1139 03.41

owners' equity .11 .17 .58.06

Others

- - -

8758 8758 8758

(3) Profit

distribution 111 111 111

442.8 442.8 442.8

5 5 5

Withdrawal of

surplus

reserves

Withdrawal of

general risk

reserve

- - -

Profit distributed 8758 8758 8758

to owners (or 111 111 111

shareholders) 442.8 442.8 442.8

5 5 5

Others

(4) Internal - 789.5

carry-forward of 789.5

owners' equity 11

Conversion of

capital reserves

into paid-in

capital

Conversion of

surplus

reserves into

paid-in capital

Surplus

reserves

offsetting losses

Carry-forward of

retained

earnings from

changes in

defined benefit

plans

Carry-forward of

retained -

earnings from 789.5

other 789.5 1

comprehensive 1

income

Others

(5) Special

reserves

Withdrawal for

the period

Use for the

period

2879 2879 2879

(6) Others

6.75 6.75 6.75

4. Balance as 1471 5407 1471 3824 4654 46681677 1119 1400

at June 30 of 951 442 951 5095 0550 0616

the current 9479 0448 6650503.0 311.4 503.0 469. 472. 975.year 6.51 2.40 3.39

0 1 0 06 36 75

Statement of Changes in Owners' Equity of Parent Company

For the six months ended June 30 2026

Unit: CNY

H1 2026

Other equity instruments Other

Capital Less: Compr Specia SurpluItem Share Preferr Perpet reserv Treasu ehensi l s

Undistr Total

capital ry ve reserv reserv ibuted Other ownersed ual Other e stock Incom e e profit ' equitystock bond

e

1. Balance as at 14719 54355 15963 14126 14719 31070 39431

December 31 of 41963. 90744. 4274.4 0071.9 41963. 23700 33747

last year 00 65 7 2 00 8.89 6.99

Plus: adjustments

for changes in

accounting

policies

Adjustments for

correction of

accounting errors

in prior year

Others

2. Balance as at 14719 54355 15963 14126 14719 31070 39431

January 1 of the 41963. 90744. 4274.4 0071.9 41963. 23700 33747

current year 00 65 7 2 00 8.89 6.99

3.Increases/decr - - -- -

eases in the 14124 15082 78560 77689current period (“- 40500. 6510204.10 4302.7 52343. 58257.” for decreases) 00 120.79

1 25 23

(1) Other - 61619 57849

comprehensive 37704 7261.2 3203.7

income 057.48 6 8

(2) Capital -- 15301

contributed or 14124 15164

reduced by 40500. 3375.304.10 1471.2

owners 00 1

1

-

Capital - - 1443814813

contributions by 40500. 37142 5205.2

owners 9960.200 55.00 6

6

Capital

contributions by

other equity

instruments

holders

Amounts of share- -

based payments 51266 86281

recognized in 3501559.10 70.05

owners' equity 10.95

Others

- -

(3) Profit 81716 84996 85004

distribution 8.50 47667. 64836.

82 32

Withdrawal of

surplus reserves

- -

Profit distributed 85004 85004

to owners (or

shareholders) 64836. 64836.

32 32

81716 81716

Others

8.50 8.50

(4) Internal carry- - 27398

forward of owners' 27398

equity 063.31063.31

Conversion of

capital reserves

into paid-in capital

Conversion of

surplus reserves

into paid-in capital

Surplus reserves

offsetting losses

Carry-forward of

retained earnings

from changes in

defined benefit

plans

Carry-forward of

retained earnings - 27398

from other 27398

comprehensive 063.31

income 063.31

Others

(5) Special

reserves

Withdrawal for the

period

Use for the period

(6) Others

4. Balance as at 14719 54370 14719 23214 31662

June 30 of the 88099 7615701463. 03148. 41963. 18466 37921

current year 71.76 951.1300 75 00 5.64 9.76

For the six months ended June 30 2025

Unit: CNY

H1 2025

Other equity instruments Other

Capital Less: Compr Specia SurpluItem Share Undistr TotalPreferr Perpet

capital reserv

Treasu ehensi l s

ed ual Other e ry ve reserv reserv

ibuted Other owners

stock Incom e e profit ' equitystock bond

e

1. Balance as at

December 31 of 14719 53613 34569 80803 14719 31526 39566

last year 51503. 33958. 9443.8 192.66 51503. 61685 95756

00 25 9 00 1.39 4.41

Plus: adjustments

for changes in

accounting

policies

Adjustments for

correction of

accounting errors

in prior year

Others

2. Balance as at 14719 53613 34569 14719 31526 39566

January 1 of the 8080351503. 33958. 9443.8 51503. 61685 95756

current year 192.6600 25 9 00 1.39 4.41

3.Increases/decr - - -

eases in the 42053 17790 28362 78299 75816current period (“- 948.26 4647.3 430.89 27634. 06608.” for decreases)

8 94 41

(1) Other 92818 9565428363

comprehensive 3018.4 6238.8

income 220.40 0 0

(2) Capital - 21992

contributed or 42025 17790

reduced by 9798.8151.51 4647.3

owners 9

8

-

Capital 1616416164

contributions by 3508.3

owners 3508.3 2

Capital

contributions by

other equity

instruments

holders

Amounts of share- -

based payments 42025 58286

recognized in 16261151.51 290.57

owners' equity 139.06

Others

- -

(3) Profit 87581 87581

distribution 11442. 11442.

85 85

Withdrawal of

surplus reserves

- -

Profit distributed 87581 87581

to owners (or

shareholders) 11442. 11442.

85 85

Others

(4) Internal carry-

forward of owners' -789.51 789.51

equity

Conversion of

capital reserves

into paid-in capital

Conversion of

surplus reserves

into paid-in capital

Surplus reserves

offsetting losses

Carry-forward of

retained earnings

from changes in

defined benefit

plans

Carry-forward of

retained earnings

from other -789.51 789.51

comprehensive

income

Others

(5) Special

reserves

Withdrawal for the

period

Use for the period

28796. 28796.

(6) Others

75 75

4. Balance as at 14719 54033 16779 10916 14719 23696 31985

June 30 of the 51503. 87906. 4796.5 5623.5 51503. 68921 35095

current year 00 51 1 5 00 6.45 6.00

3. Company Profile

3.1. Company Overview

Luzhou Laojiao Co. Ltd. (hereinafter referred to as "Company" or "the Company") formerly known as

Luzhou City Qu Liquor Factory and Luzhou Laojiao Distillery in Sichuan Province. It was established in

March 1950 on the basis of 36 baijiu workshops from the Ming and Qing dynasties. On September 20

1993 Luzhou Laojiao distillery established a joint-stock limited company with fund-raising exclusively

from its operational assets. On October 25 1993 the public offering of shares was approved by

Sichuan Provincial People's Government and CSRC with two documents of ChuanFuHan (1993)

No.673 and FaShenZi (1993) No.108. After the offering the total share capital was 86880000 shares

which were listed and traded in Shenzhen stock exchange on May 9 1994.As at December 31 2004 the Company's total share capital reached 841399673 shares after multiple

rights issues among which the controlling shareholder State Assets Management Bureau of Luzhou

(later renamed as State-owned Assets Supervision and Administration Commission of Luzhou

hereinafter referred to as "SASAC of Luzhou") held 585280800 shares of the Company with a

shareholding ratio of 69.56%.On October 27 2005 the Company implemented the non-tradable share reform. After the

implementation the total share capital remained unchanged and the shareholding ratio of SASAC of

Luzhou decreased from 69.56% to 60.43%.In November 2006 the Company implemented private placement and the total share capital increased

from 841399673 shares to 871399673 shares. The shareholding ratio of SASAC of Luzhou

decreased from 60.43% to 58.35%.As at February 27 2007 SASAC of Luzhou sold 42069983 shares of the Company and after the sale

it still held 466375156 shares of the Company with its shareholding ratio reduced to 53.52%.

On May 19 2008 the Company increased 522839803 shares of capital stock resulting from capital

reserve and undistributed profits transferred to increase capital stock. After the implementation the total

share capital reached 1394239476 shares among which SASAC of Luzhou held 746200250 shares

of the Company and the shareholding ratio was still 53.52%.On September 3 2009 the 300000000 shares and the 280000000 shares held by SASAC of Luzhou

were separately transferred to Luzhou Laojiao Group Co. Ltd. (hereinafter referred to as the "Laojiao

Group") and Luzhou XingLu Investment Group Co. Ltd. (hereinafter referred to as the "XingLu Group").After the transfer Laojiao Group XingLu Group and SASAC of Luzhou respectively held 300000000

shares 280000000 shares and 166200250 shares. So far Laojiao Group became the first majority

shareholder and SASAC of Luzhou was the actual controller.From June 6 2012 to November 20 2013 the first and second phases of the Company's equity

incentive plan were exercised. After the exercise the total share capital of the Company was changed

to 1402252476 shares.On April 10 2014 and July 18 2016 SASAC of Luzhou transferred 81088320 shares and 84000000

shares to Laojiao Group and XingLu Group respectively. In addition Laojiao Group has increased its

equity stake through the secondary market of 13137100 shares. So far Laojiao Group XingLu Group

and SASAC of Luzhou held 394225489 shares 365971142 shares and 1111930 shares

respectively with the shareholding ratios of 28.11% 26.10% and 0.08% respectively.On August 23 2017 the Company issued CNY 62500000 ordinary shares (A shares) privately raising

a total capital of CNY 3000000000. After the additional issuance the total capital stock of the

Company was changed to 1464752476 shares. In addition from 2017 to 2018 Laojiao Group

decreased 13137100 shares that were increased through the secondary market from April 2014 to

December 2015. After share reduction Laojiao Group XingLu Group and SASAC of Luzhou held

381088389 shares 365971142 shares and 1111930 shares respectively in the Company with the

shareholding ratios of 26.02% 24.99% and 0.08% respectively. Laojiao Group still was the first majority

shareholder and SASAC of Luzhou still was the actual controller.In February 2022 the registration of 6862600 shares of the Restricted Share Incentive Plan granted

by the Company for the first time was completed; in September 2022 the Company granted 342334

shares of the Restricted Share Incentive Plan for the second time; in September 2022 with seven

awardees no longer eligible the Company decided to repurchase and retire the 62310 restricted

shares of them that had been granted to the aforesaid awardees but remained in lockup; in December

2022 the Company granted 92669 shares of the Restricted Share Incentive Plan for the third time.

From December 2023 to June 2024 Luzhou Laojiao Group Co. Ltd. through its wholly-owned

subsidiary Sichuan Golden Rudder Investment Co. Ltd. increased its holdings in the Company by

1140200 shares through call auction trading accounting for 0.08% of the total share capital of the

Company. Following that Luzhou Laojiao Group Co. Ltd. and Sichuan Golden Rudder Investment Co.Ltd. collectively held 382228589 shares in the Company.

In January June and September 2024 as five awardees were no longer eligible for the incentives the

Company decided to repurchase and retire a total of 36266 restricted shares that had been granted to

the aforesaid awardees but remained in lockup. As of December 31 2024 the repurchase and

retirement of the said restricted shares had been completed and the total shares of the Company

changed to 1471951503 shares.From March to September 2025 Laojiao Group increased its holdings in the Company by 2345250

shares through call auction trading representing 0.16% of the Company's total share capital. Upon that

Laojiao Group held 383433639 shares in the Company.In April and November 2025 as three awardees were no longer eligible for the incentives the Company

decided to repurchase and retire a total of 9540 restricted shares that had been granted to the

aforesaid awardees but remained in lockup. As of December 31 2025 the repurchase and retirement

of the said restricted shares had been completed and the total shares of the Company changed to

1471941963 shares.

In February 2026 as six awardees were no longer eligible for the incentives the Company decided to

repurchase and retire a total of 40500 restricted shares that had been granted to the aforesaid

awardees but remained in lockup. As of June 30 2026 the repurchase and retirement of the said

restricted shares had been completed and the total shares of the Company changed to 1471901463

shares. The grants and repurchases under the restricted share incentive plan did not lead to change of

the Company’s controlling shareholder or actual controller.As of June 30 2026 the total number of shares of the Company was 1471941963. Laojiao Group its

wholly-owned subsidiary Sichuan Golden Rudder Investment Co. Ltd. and XingLu Group held

383433639 shares 1140200 shares and 365971142 shares in the Company respectively

representing shareholding percentages of 26.05% 0.08% and 24.86% respectively; and Laojiao

Group held a total of 50.99% of the Company's voting rights.

3.2 Registered address of the Company company type and headquarter address

Registered address and headquarter address of the Company are located in Sichuan Luzhou Laojiao

Square and company type is other incorporated company (Listed).

3.3 Business nature of the Company and main business activity

Industry of the Company is the baijiu subdivision industry of the liquor and wine beverage and refined

tea production industry.The principal operations are research and development production and sales of “National Cellar

1573””Luzhou Laojiao” and other baijiu series.

The main products are: “National Cellar 1573 Series” ”Century-old Luzhou Laojiao JiaolingSeries” ”Luzhou Laojiao Tequ” ”Touqu” ”Hey Guys” and other baijiu series.

3.4 The name of the controlling shareholder and the ultimate substantive controller

The controlling shareholder of the Company is Laojiao Group; and the ultimate substantive controller is

SASAC of Luzhou.

3.5 Approval of the financial statements

The financial statements have been approved for issue by the Board of Directors of the Company on

August 25 2026.

4. Basis of preparation of financial statements

4.1. Basis of preparation of financial statements

The Company has prepared its financial statements on a going concern basis and the preparation is

based on actual transactions and events in compliance with Accounting Standards for Business

Enterprises and relevant guidance and explanation (hereinafter referred to as the “ASBE”) issued by

Ministry of Finance and Rules on Company Information Disclosure and Preparation of Publicly Issued

Securities No.15- General Rules on Financial Reporting Rules (2023 Revision) issued by CSRC.

4.2. Going concern

The Company’s business activities have adequate financial support. Based on the current information

obtained by the Company comprehensively considering factors such as macro-policy risk market

operation risk current or long-term profitability debt repayment ability of the Company as well as its

resource of financial support the Company believes that it is reasonable to prepare the financial

statements on a going concern basis and there are no events or situations resulting in significant

doubts over going concern for at least 12 months.

5. Significant accounting policies and accounting estimates

The Company shall comply with the disclosure requirements for companies engaging in food & liquor

and wine production of the Guidelines No. 3 of the Shenzhen Stock Exchange on Self-regulation of

Listed Companies—Industry-specific Information Disclosure.

5.1 The declaration about compliance with ASBE

The financial statements of the Company have been prepared in accordance with ASBE and present

truly and completely the financial position and the Company’s results of operations changes in

shareholders’ equity and cash flows. In addition in all material respects the financial statements of the

Company comply with disclosure requirements of the financial statements and their notes in

accordance with Rules on Company Information Disclosure and Preparation of Publicly Issued

Securities No.15- General Rules on Financial Reporting Rules revised by CSRC in 2023.

5.2 Accounting period

The Company adopts the calendar year as its accounting year i.e. from January 1 to December 31.

5.3 Business Cycle

The Company’s business cycle is 12 months.

5.4 Functional currency

The Company has adopted China Yuan (CNY) as functional currency.

5.5 Methods for determining materiality standards and selection criteria

□ Applicable □ N/A

Item Materiality standard

Material receivables withdrawal of bad debt

provision separately accrued

Material bad debt provision recovered or

reversed in accounts receivable The carrying balance at the end of the Reporting

Significant write-off of accounts receivable Period ≥ CNY 5 million

Significant prepayments aging over one year

accounts payable contract liabilities and other

payables

Single project under construction with a budget

Material construction in progress exceeding CNY 150 million and a total amountaccounted for the current period exceeding CNY

50 million

The overseas operating entities' external revenue

Material overseas operating entity accounts for ≥ 3% of the consolidated operatingrevenue and the total profit accounts for ≥ 0.5%

of the consolidated total profit

The revenue of non-wholly-owned subsidiaries

Material non-wholly-owned subsidiary accounts for ≥ 3% of the consolidated operatingrevenue and the total profit accounts for ≥ 0.5%

of the consolidated total profit

The book value of long-term equity investments

Significant associated enterprise in associated enterprises accounts for ≥ 3% ofthe total assets in the consolidated financial

statements

5.6 The accounting treatment of business combinations involving enterprises under

common control and business combinations not involving enterprises under

common control

(1) Business combination under common control

Assets and liabilities obtained by the Company from the combine through business combination under

common control shall be measured at the book value as stated in the consolidated financial statements

of ultimate controlling party at the combination date. The share of the book value of the merged party’s

owner’s equity in the consolidated financial statements is taken as the initial investment cost of long-

term equity investments in individual financial statements. The capital reserve (stock premium or capital

premium) is adjusted according to the difference between the book value of net asset acquired through

combination and the book value of consideration paid for the combination (or total par value of shares

issued). If the capital reserve (stock premium or capital premium) is insufficient to offset the retained

earnings shall be adjusted.

(2) Business combination not under common control

Assets paid liabilities incurred or assumed and the equity securities issued as consideration for

combination shall be measured based on fair value on the acquisition date the difference between fair

value and its book value shall be included in current profit and loss. The Company shall recognize the

difference of the combination costs in excess of the fair value of the net identifiable asset acquired from

the acquiree through combination as goodwill. After the review if the combination costs are still short of

the fair value of the net identifiable asset acquired from the acquiree through combination include the

difference in the current profit and loss.Fees commissions and other transaction expenses paid on issuance of equity securities as

combination consideration in the business combination shall be included in the initial measurement

amount of equity securities.

5.7 Criteria for judging control and preparation of consolidated financial statements

(1) Consolidated Financial Statement Scope

The scope of the Company’s consolidated financial statements is based on control and all subsidiaries

controlled are included in the consolidation scope of the consolidated financial statements.

(2) Consolidation procedures

The consolidated financial statements are based on the financial statements of the Company and its

subsidiaries and are prepared by the parent company with other relevant information. When preparing

consolidated financial statements the Company considers the whole Company as an accounting entity

adopts unified accounting policies and applies the requirements of ASBE related to recognition

measurement and presentation to reflect the Company’s financial position operating results and cash

flows.All the subsidiaries within the consolidation scope of consolidated financial statements shall adopt the

same accounting policies and accounting periods as those of the Company. If the accounting policies or

accounting periods of a subsidiary are different from those of the Company the financial statements of

the subsidiary upon preparation of consolidated financial statements shall be made necessary

adjustment based on its own accounting policies and accounting periods of the Company. For

subsidiaries acquired from the business combination not under common control the financial

statements shall be adjusted on the basis of the fair value of identifiable net assets on the date of

purchase. For the subsidiary acquired from the business combination under common control its assets

and liabilities (including the goodwill formed by the acquisition of the subsidiary by the ultimate

controlling party) shall be adjusted on the basis of the book value in the consolidated statements of the

ultimate controlling party.The portion of a subsidiary’s equity the current net profit and loss of subsidiaries and the current

comprehensive income attributable to non-controlling interests shall be separately presented as non-

controlling interests in consolidated balance sheet within owners' equity below the net profit line item

and below the total comprehensive income line item in the consolidated income statement respectively.When the amount of current loss attributable to non-controlling shareholders of a subsidiary exceeds

the balance of the non-controlling shareholders’ portion in the opening balance of owner's equity of the

subsidiary the excess shall be allocated against the non-controlling interests.* Acquisition of subsidiaries or business

During the reporting period if the Company acquires subsidiaries from the business combination under

common control the opening balance in the consolidated balance sheet shall be adjusted. The income

expenses and profits of the newly acquired subsidiaries from the beginning to the end of the reporting

period shall be included in the consolidated income statement. The cash flows of the newly acquired

subsidiaries from the beginning to the end of the reporting period shall be included in the consolidated

statement of cash flows. At the same time the relevant items of the comparative information shall be

adjusted as the combined entity existed since the control point of the ultimate controlling party.If the Company can control the investee from the business combination under common control due to

additional investment or other reasons the parties involved in the combination shall be deemed to

adjust in the current state when the ultimate controlling party starts to control them. For the equity

investment before obtaining control of the investee the recognized relevant profit or loss and other

comprehensive income and other changes in net assets between the later of acquisition date of

previous equity and the date on which both the investor and the investee are under common control

and the combination date shall respectively be written down the beginning retained earnings or current

profits and losses during the period of comparative information.During the reporting period if the Company acquires subsidiaries from the business combination not

under common control the opening balance in the consolidated balance sheet shall not be adjusted.The income expenses and profits of the newly acquired subsidiaries from the acquisition date to the

end of the reporting period shall be included in the consolidated income statement. The cash flows of

the newly acquired subsidiaries from the acquisition date to the end of the reporting period shall be

included in the consolidated statement of cash flows.When the Company becomes capable of exercising control over an investee not under common control

due to additional investment or other reasons the Company shall re-measure the previously held equity

interests to its fair value on the acquisition date and the difference shall be recognized as investment

income. When the previously held equity investment is accounted for under equity method any other

comprehensive income previously recognized and other equity changes (excluding other

comprehensive net profit and loss and profit distribution ) in relation to the acquiree’s equity changes

shall be transferred to profit and loss for the current period when acquisition took place except for other

comprehensive income resulting from changes in net liabilities or net assets due to re-measurement of

defined benefit plan by investee.* Disposal of subsidiaries and business

General treatments

During the reporting period if the Company disposes subsidiaries the income expenses and profits of

the newly disposed subsidiaries from the beginning to the disposal date shall be included in the

consolidated income statement. The cash flows from the beginning to the disposal date shall be

included in the consolidated statement of cash flows.In case of loss of control over the investee due to partial disposal of the equity investment or other

reasons the Company shall re-measure the remaining equity investment at its fair value at the date of

loss of control. The amount of the consideration obtained from the disposal of the equity and the fair

value of the remaining equity minus the net asset shares calculated continuously from the acquisition

date based on the previous shareholding proportion and the goodwill the difference shall be included in

the investment income of the period when the control is lost. Other comprehensive income related to

the former subsidiary’s equity investment of or other changes in owners' equity excluding net profit and

loss other comprehensive income and profit distribution shall be transferred to investment income for

the current period when control is lost. Other comprehensive income resulting from changes in net

liabilities or net assets due to re-measurement of defined benefit plan by investee is excluded.Disposal of subsidiaries by step

If the Company loses control of a subsidiary through multiple transactions by steps the terms

conditions and economic impact of the disposal transaction shall be considered. When one or more of

the following conditions may indicate that multiple transactions should be treated as a package of

transactions for accounting treatment:

A. These arrangements were entered into at the same time or in contemplation of each other;

B. These arrangements work together to achieve an overall commercial effect;

C. The occurrence of one arrangement depends on the occurrence of at least one other arrangement;

D. One arrangement alone is not economically justified but it is economically justified when considered

together with other arrangements

If the transactions of the disposal of the equity investment of the subsidiary until the loss of control

belong to a package transaction the Company shall account for as a transaction; However the

difference between each disposal consideration received and the corresponding proportion of the

subsidiary’s net assets before the loss of control shall be recognized as other comprehensive income in

the consolidated financial statements and transferred into the profit and loss of the current period when

the control is lost.If the transactions from the disposal of the equity investment of the subsidiary to the loss of control are

not considered as a package transactions the accounting treatment shall be conducted according to

the relevant policies on the partial disposal of the equity investment of the subsidiary where control is

retained before the loss of control. When the control is lost the disposal shall be accounted for

according to the general treatment.* Purchase of non-controlling interests

The difference between the increase in the cost of long-term equity investment resulting from

acquisition of non-controlling shareholders and the share of net assets of the subsidiary calculated

continuously from the acquisition date or combination date based on newly acquired shareholding

proportion shall be adjusted to equity (share) premium of capital reserves in the consolidated balance

sheet. If the capital reserve is insufficient any excess shall be adjusted against retained earnings.* Partial disposals of equity investment in subsidiaries without loss of control

When the Company disposes of a portion of a long-term equity investment in a subsidiary without loss

of control the difference between disposal consideration and net assets of the subsidiary calculated

continuously since the acquisition date or the combination date related to the disposal of long-term

equity investment shall be adjusted to equity (share) premium of capital reserves in the consolidated

balance sheet. If the capital reserve is insufficient any excess shall be adjusted against retained

earnings.

5.8 Classification of joint venture arrangements and the accounting treatment

method of common operation

(1) Classification of joint venture arrangements

A joint arrangement is classified as either a joint operation or a joint venture according to the structure

legal form agreed terms and other facts and conditions of a joint arrangement. A joint arrangement that

is structured through a separate vehicle is usually classified as a joint venture. However when a joint

arrangement provides clear evidence that it meets any of the following requirements and complies with

applicable laws and regulations as a joint operation:

* The legal form of the joint arrangement indicates that the parties that have joint control have rights to

the assets and obligations for the liabilities relating to the arrangement.* The terms of the joint arrangement specify that the parties that have joint control have the rights to

the assets and the obligations for the liabilities relating to the arrangement.* Other facts and circumstances indicate that the parties that have joint control have rights to the

assets and the obligations for the liabilities relating to the arrangement. The parties that have joint

control have rights to substantially all of the output of the arrangement and the arrangement depends

on the parties that have joint control on a continuous basis for settling the liabilities of the arrangement.

(2) Accounting by parties of a joint operator

A joint operator shall recognize the following items in relation to its interest in a joint operation and

account for them in accordance with relevant accounting standards:

* Its solely-held assets and its share of any assets held jointly;

* Its solely-assumed liabilities and its share of any liabilities incurred jointly;

* Its revenue from the sale of its share of the output arising from the joint operation;

* Its share of the revenue from sale of the output by the joint operation; and

* Its solely-incurred expenses and its share of any expenses incurred jointly.The Company shall only recognize the portion of the profit and loss attributable to other participants in

the joint venture resulting from investment or sale of assets to the joint venture by the Company

(excluding those assets constituting the business) prior to the sale of such assets to a third party. The

Company shall fully recognize impairment loss when there is any impairment loss of invested or sold

assets occurring in accordance with the ASBE No.8-Asset Impairment. The Company shall only

recognize the part of the profit and loss attributable to other participants in the joint venture before

selling the assets and other assets purchased from the joint venture (excluding those assets

constituting the business) to a third party. When the impairment loss of the purchased assets is in

accordance with the ASBE No.8-Asset Impairment the Company shall recognize such losses

according to its share. When the Company does not have common control over the joint venture if the

Company enjoys the assets related to the joint venture and assumes the liabilities related to the joint

venture the accounting treatment shall be conducted according to the above principles. Otherwise the

accounting treatment shall be conducted in accordance with the relevant accounting standards.

5.9 Cash and cash equivalents

When preparing the cash flow statement the Company recognizes cash on hand and deposits that can

be readily withdrawn on demand as cash. Cash equivalents are the Company’s short-term (due within 3

months from purchase 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. Restricted bank deposits are not

recognized as cash and cash equivalents in the cash flow statement.

5.10 Foreign currency transactions and translation of foreign currency statements

(1) Foreign currency transactions

At the time of initial recognition of a foreign currency transaction of the Company the amount in the

foreign currency shall be translated into the amount in CNY currency at the spot exchange rate of the

transaction date. For the monetary items of foreign currencies the translation is done according to spot

rate of the balance sheet date. The exchange difference generated from the difference of spot rate of

the current balance sheet date and the time of initial recognition of a foreign currency or the previous

balance sheet date is charged to the profit or loss of the current period except that the exchange

difference generated from foreign currency borrowings relating to assets of which the acquisition or

production satisfies the capitalization conditions is capitalized.Non-monetary items measured at fair value that is reflected in foreign currency at the end of the period

the Company shall firstly translate the foreign currency into the amount in functional currency at the

spot exchange rate on the date when the fair value is determined and then compare it with the original

functional currency amount. Difference between the translated functional currency amount and the

original functional currency amount is treated as profit or loss from changes in fair value (including

changes in exchange rate) and is recognized in current profit and loss. If there is a non-monetary item

of available-for-sale financial assets the differences are recorded into other comprehensive income.

(2) Translation of foreign currency statements

Assets and liabilities in the balance sheets shall be translated at the spot exchange rates on balance

sheet date. Shareholders’ equity items except for the item of "undistributed profits" are translated at

the spot exchange rates on the dates when the transactions occur. Revenue and expense items in the

income statement are translated at the spot exchange rates on the dates when the transactions occur

or at the exchange rate determined in a systematic and reasonable method and similar to the spot

exchange rate on the day when the transactions occur. Differences arising from the above translations

of foreign currency financial statements are separately listed under other comprehensive income in the

consolidated balance sheet. If the overseas business is partly disposed of the foreign currency

financial statements exchange difference shall be calculated in proportion to the percentage of disposal

and transferred to gain or loss on disposal for the current period.Foreign currency cash flow and cash flow of foreign subsidiaries shall be translated at approximate

exchange rate of spot rate on the date of cash flow.

5.11 Financial Instruments

A financial instrument is a contract that gives rise to a financial asset of one entity and a financial

liability or equity instrument of another entity. When the Company becomes a party to a financial

instrument contract the related financial asset or financial liability should be recognized.

(1) Classification recognition and measurement of financial assets

Based on the business model of financial asset management and the contract cash flow characteristics

of financial assets the Company classifies financial assets into: financial assets measured at amortized

cost; financial assets measured at fair value with their changes included into other comprehensive

income; and financial assets measured at fair value with their changes included into current

profits/losses.At the initial recognition financial assets are measured at fair value. For financial assets measured at

fair value with their changes included into current profits/losses the expenses involved in the

transaction are directly recorded into current profits/losses; for other financial liabilities the expenses

involved in the transaction are recorded into the initially recognized amount.* Financial assets measured at amortized cost

The business model in which the Company manages financial assets measured at amortized cost aims

to receive contract cash flow. Furthermore the characteristics of the contract cash flow of such financial

assets are consistent with basic borrowing and lending arrangements which means that cash flow

generated on a specific date serves only as payment for principal and interests based on the amount of

unpaid principal. The Company adopts the effective interest method for such financial assets performs

subsequent measurement of them at amortized cost and includes the gains or losses from

derecognition changes or impairment of them into current profits/losses.* Financial assets measured at fair value with their changes included into other comprehensive

income

The business model in which the Company manages such financial assets both aims to receive

contract cash flow and for the purpose of sale. Furthermore the characteristics of the contract cash

flow of such financial assets are consistent with basic borrowing and lending arrangements. The

Company measure such financial assets at fair value and include their changes into other

comprehensive income but record impairment losses or gains exchange gains or losses and interest

income calculated in the effective interest method into current profits/losses.At the initial recognition the Company may specify non-trading equity instrument investment as a

financial asset measured at fair value with its changes included into other comprehensive income and

should recognize the dividend income according to regulations; the specification is irrevocable once

made. When the financial asset is derecognized the cumulative gains or losses previously included into

other comprehensive income should be transferred into retained earnings.* Financial assets measured at fair value with their changes included into current profits/losses

For financial assets other than the above financial assets measured at amortized cost and financial

assets measured at fair value with their changes included into other comprehensive income the

Company classifies them as financial assets measured at fair value with their changes included into

current profits/losses. In addition at the initial recognition the Company specifies partial financial

assets as financial assets measured at fair value with their changes included into current profits/losses

in order to eliminate or substantially reduce accounting mismatch. For such financial assets the

Company performs subsequent measurement using fair value and records changes in the fair value

into current profits/losses.

(2) Classification recognition and measurement of financial liabilities

At their initial recognition financial liabilities are divided into financial liabilities measured at fair value

with their changes included into current profits/losses and other financial liabilities. For financial

liabilities measured at fair value with their changes included into current profits/losses the expenses

involved in the transaction are directly recorded into the current profits/losses. For other financial

liabilities the expenses involved in the transaction are recorded into the initially recognized value.* Financial liabilities measured at fair value with their changes included into current profits/losses

Financial liabilities measured at fair value with their changes included into current profits/losses include

trading financial liabilities (including derivatives classified as financial liabilities) and the financial

liabilities specified to be measured at fair value with their changes included into current profits/losses at

the initial recognition.Trading financial liabilities (including derivatives classified as financial liabilities) are subsequently

measured at fair value with changes in fair value recorded into current profits/losses except for those

related to hedge accounting.For those specified as financial liabilities measured at fair value with their changes included into current

profits/losses changes in the fair value of such liabilities caused by changes in the Company’s own

credit risk should be included into other comprehensive income. In derecognition of such liabilities

cumulative changes in their value caused by the Company’s own credit risk that have been recorded

into other comprehensive income should be transferred into retained earnings. Other changes in their

fair value should be recorded into current profits/losses. If treatment of the impact of the Company’s

own credit risk changes of such financial liabilities in the above manner causes or expands accounting

mismatch in profits/losses the Company will include all gains or losses of such financial liabilities

(including the amount of the impact of the Company’s own credit risk changes) into current

profits/losses.* Other financial liabilities

Financial liabilities other than those formed from the transfer of financial assets not meeting

derecognition conditions or continuous involvement into transferred financial assets and those outside

financial guarantee contracts are classified as financial liabilities measured at amortized cost. Such

financial liabilities should be subsequently measured at amortized cost and the gains or losses from

derecognition or amortization should be included into current profits/losses.

(3) Recognition basis and measurement method of transfer of financial assets

If a financial asset meets any of the following conditions it shall be derecognized: 1)The contractual

right for collecting the cash flow of the financial asset has been terminated; 2)The financial asset has

been transferred and almost all the risks and remunerations in respect of the ownership of the financial

asset have been transferred to the transferee; 3)The financial asset has been transferred and although

the enterprise neither transfers nor retains almost all the risks and remunerations in respect of the

ownership of the financial asset it has abandoned its control over the asset.If the enterprise neither transfers nor retains almost all the risks and remunerations in respect of the

ownership of the financial asset and does not abandon its control over the asset the involved financial

asset shall be recognized according to the level of continuous involvement of the transferred financial

asset and the relevant liabilities shall be recognized accordingly. The level of continuous involvement of

the transferred financial asset refers to the level of risk faced by the enterprise due to changes in the

value of the financial asset.If the overall transfer of the financial asset meets the recognition conditions the difference between the

carrying value of the transferred financial asset as well as the consideration received from the transfer

and the cumulative amount of fair value changes originally-recorded into other comprehensive incomes

shall be recorded into the current profits/losses.If partial transfer of the financial asset meets the recognition conditions the carrying value of the

transferred financial asset shall be apportioned at the relative fair value between the derecognition and

underecognition part. The difference between the summation of the consideration received from the

transfer and the cumulative amount of fair value changes originally-recorded into other comprehensive

incomes that should be apportioned to the derecognition part and the apportioned aforementioned

carrying value shall be recorded into the current profits/losses.For a financial asset sold with the right of recourse or with the transfer of the financial asset

endorsement the Company shall decide whether almost all the risks and remunerations in respect of

the ownership of the financial asset should be transferred. If they are transferred the financial asset

shall be derecognized; if they are retained the financial asset shall not be derecognized; if they are

neither transferred nor retained the Company will continue to decide whether the enterprise should

retain control over the asset and perform the accounting treatment according to the principles stated in

previous paragraphs.

(4) Derecognition of financial liabilities

When the current obligation of a financial liability (or a part of it) is relieved the Company will

derecognize the financial liability (or the part of it). When the Company (borrower) signs an agreement

with a lender to replace an original financial liability in the form of bearing a new financial liability and

the contract terms for the new financial liability differ from those for the original in substance the

original financial liability should be derecognized and the new one should be recognized. When the

Company makes substantial changes to the contract terms of an original financial liability (or a part of it)

the original financial liability should be derecognized and a new financial liability should be recognized

according to the amended contract terms.When a financial liability (or a part of it) is derecognized the Company will include the difference

between its carrying value and the consideration paid (including non-cash assets or liabilities borne that

are transferred out) into current profits/losses.

(5) Offsetting of financial assets and financial liabilities

When the Company has the legal right to offset recognized financial assets and financial liabilities and

may execute the legal right currently and simultaneously the Company plans to settle or

simultaneously encash the financial assets in net amounts and pay off the financial liabilities the

financial assets and the financial liabilities which are presented in the net amount after the mutual offset

in the balance sheet. Other than that they shall be presented separately in the balance sheet without

the mutual offset.

(6) Method of determining the fair value of financial assets and financial liabilities

Fair value refers to the price that a market participant can receive for selling an asset or transferring a

liability in an orderly transaction on the measurement date. For an existing financial instrument in an

active market the Company adopts the quotations in the active market to determine its fair value.Quotations in the active market refer to prices that can be easily obtained from exchanges brokers

industrial associations and pricing service institutions and represent the actual prices in the market

transactions happening in a fair trade. For a non-existing financial instrument in an active market the

Company adopts the valuation technique to determine its fair value. The valuation technique includes

references to familiar situations and the prices used by the parties voluntarily participating in the recent

market transactions as well as references to the present fair value of other financial instruments of the

same nature discounted cash flow method and options pricing model. In the valuation the Company

uses a valuation technique that is applicable in the current situation with sufficient data available and

other information support chooses input values that are consistent with the asset or liability

characteristics considered by market players in related asset or liability transactions and makes

maximum effort to use related observable input values on a preferential basis. When it is unable or

unfeasible to obtain related observable input values unobservable will be used.

(7) Equity instruments

Equity instruments refer to the contracts that can prove the Company’s residual equity of assets after

the deduction of all liabilities. The Company’s issuance (including refinancing) repurchase sale or

retirement of equity instruments serve as the change treatment of equity. Transaction expenses related

to the equity transactions are deducted from the equity. The Company does not recognize changes in

the fair value of equity instruments.Dividends from the Company’s equity instruments distributed during the validity (including the “interests”

from instruments classified as equity instruments) are treated as profit distribution.

(8) Impairment of financial instruments

Based on the expected credit loss the Company treats financial assets measured at amortized cost

and debt instrument investment measured at fair value with their changes included into other

comprehensive income by impairment and recognizes the provision for loss.Credit loss means the difference between all contract cash flow discounted at the original effective

interest rate to be received according to contracts and all contract cash flow expected to be received

namely the present value of all cash shortage. For a financial asset with credit impairment purchased

by or originated from the Company it should be discounted by the effective interest rate after credit

adjustment to the financial asset.For accounts receivable that do not contain significant financing components the Company adopts

simplified measurement to measure loss provisions according to the amount equivalent to the expected

credit loss for the entire duration.

For a financial asset other than those using the above simplified measurement the Company assesses

on each balance sheet date whether its credit risk has substantially increased since the initial

recognition. If it has not and is in the first stage the Company will measure the loss provision at the

amount equivalent to the expected credit loss for the next 12 months and calculate the interest income

according to the book balance and the effective interest rate; if it has substantially increased since the

initial recognition without credit impairment and is in the second stage the Company will measure the

loss provision at the amount equivalent to the expected credit loss for the entire duration and calculate

the interest income according to the book balance and the effective interest rate; if credit impairment

has occurred since the initial recognition and is in the third stage the Company will measure the loss

provision by the amount equivalent to the expected credit loss for the entire duration and calculate the

interest income according to the amortization cost and the effective interest rate. For financial

instruments with low credit risks on balance sheet dates the Company assumes that their credit risks

have not substantially increased since the initial recognition.The Company assesses expected credit losses of financial instruments based on individual and group

assessment. The Company considers the credit risk characteristics of different customers and

assesses the expected credit losses of accounts receivable and other receivables based on account

age portfolio. When assessing expected credit losses the Company considers reasonable and well-

founded information on past matters present conditions and forecast of future economic conditions.When it no longer reasonably expects to recover all or part of the contract cash flow of financial assets

the Company will directly write down the book balance of such financial assets.

5.12 Notes receivable

The types of portfolios for which bad debt provisions are made according to the portfolios of credit risk

characteristics and the basis for determining them:

Divide notes receivables into various portfolios according to common risk characteristics based on the

credit risk characteristics of acceptors and determine the accounting estimate policies of expected

credit loss

Portfolio name Provision method

Bank acceptance bill The management evaluates that this type has low credit risk and its fixed bad

portfolio debt provision ratio is 0%.Trade acceptance The provision for impairment is made according to the expected loss rate with

portfolio the same portfolio classification of accounts receivable

5.13 Accounts receivable

The types of portfolios for which bad debt provisions are made according to the portfolios of credit risk

characteristics and the basis for determining them:

As for accounts receivable regardless of whether there is a significant financing component the

Company always measures the provision for loss based on the amount equivalent to the expected

credit loss over the entire life and the resulting increase or reversal of provision for loss shall be

included in the current profit or loss as gains or losses on impairment. The accrual method is as follows:

(1) When there is objective evidence showing that an account receivable has incurred credit impairment

the Company shall make bad debt provision for the account receivable and recognize the expected

credit loss.

(2) When the information about the expected credit loss of a single financial asset cannot be evaluated

at a reasonable cost the Company shall divide the accounts receivable portfolio according to credit risk

characteristics and measure the expected credit loss based on portfolios:

Portfolio name Provision method

Risk portfolio Expected credit loss

Other portfolio No bad debt provision

Other portfolio refers to the normal intercompany funds among the Company and businesses under

common control the recovery of which is controllable with no risks. Thus no bad debt provision was

made.The aging calculation method of credit risk characteristic portfolio based on aging:

The Company combines the accounts receivable classified as risk portfolio in accordance with similar

credit risk characteristics (aging) and calculates the expected credit loss through the exposure at

default and expected credit loss rate over the entire life based on the current situation and prediction of

future economic situation consulting historical credit loss experience. The comparative table of the

credit loss rate is as follows:

Ageing Expected loss provision rate %

Within 1 year 5

1-2 years 10

2-3 years 20

3-4 years 40

4-5 years 80

Over 5 years 100

The ageing of accounts receivable is calculated from the month in which the amounts are actually

incurred.

5.14 Accounts receivable financing

The accounts receivable financing of the Company refer to the notes receivables measured at fair value

through other comprehensive income on the balance sheet date. For more details see Note 5.11

Financial instruments.

5.15 Other receivables

Determination and accounting treatment of expected credit losses on other receivables

The types of portfolios for which bad debt provisions are made according to the portfolios of credit risk

characteristics and the basis for determining them:

As for other receivables regardless of whether there is a significant financing component the Company

always calculates the expected credit loss through the exposure at default and expected credit loss rate

in the next 12 months or over the entire life based on the current situation and prediction of future

economic situation consulting historical credit loss experience and the resulting increase or reversal of

provision for loss shall be included in the current profit or loss as gains or losses on impairment. The

accrual method is as follows:

(1) When there is objective evidence showing that the other receivable has incurred credit impairment

the Company shall make bad debt provision for the other receivable and recognize the expected credit

loss.

(2) When the information about the expected credit loss of a single financial asset cannot be evaluated

at a reasonable cost the Company shall divide the other receivables portfolio according to credit risk

characteristics and measure the expected credit loss based on portfolios.Portfolio name Provision method

Risk portfolio Expected credit loss

Other portfolio No bad debt provision

Other portfolio refers to the normal intercompany funds among the Company and businesses under

common control the recovery of which is controllable with no risks. Thus no bad debt provision was

made.

The Company combines the other receivables classified as risk portfolio in accordance with similar

credit risk characteristics and calculates the expected credit loss through the exposure at default and

expected credit loss rate in the next 12 months or over the entire life based on the current situation and

prediction of future economic situation consulting historical credit loss experience.

5.16 Contract assets

The Company presents contract assets or contract liabilities on the balance sheet according to the

relationship between the fulfillment of its contract performance obligations and its customers’ payment.Considerations that the Company has the right to collect for commodities transferred or services

provided to customers (and such right depends on other factors than time lapses) are presented as

contract assets. The Company presents the right possessed to collect consideration from customersunconditionally (only depending on the passing of time) as accounts receivable. Refer to “The methodof determining the expected credit loss of accounts receivable and accounting treatment method” for

the detail on the Company’s method of determining the expected credit loss of contract assets and

accounting treatment method.

5.17 Inventory

(1) Classification of inventory

Inventories are classified as: raw materials goods in progress (including semi-finished goods) stock

commodities and dispatched inventories.

(2) Measurement method of acquiring and dispatching inventories

The standard cost is used for daily accounting of raw materials and the difference of material cost

should be carried forward on a monthly basis to adjust the standard cost into the actual cost; The goods

in progress (including semi-finished goods) shall be accounted according to the actual cost and the

weighted average method shall be used when they are received and delivered. The actual cost of the

inventory at the end of the month above shall be taken as the standard cost and the delivery shall be

priced according to the standard cost. At the end of the month the standard cost of the inventory at the

end of the month shall be adjusted into the actual cost through the cost-sharing difference.

(3) Determining criteria and method of provision for stock obsolescence

At the end of the period inventory is measured according to the lower of cost and net realizable value.The difference between inventory cost and net realizable value is higher than the provision for stock

obsolescence which is recorded into current profit and loss. For inventories that are related to product

ranges produced and sold in the same district or used for the same or similar ultimate purpose and are

difficult to be measured separately from other inventories the Company provides for stock

obsolescence as a whole. For inventories that have large quantities but low value the Company

provides for stock obsolescence on a category basis.The materials held for production shall be measured at cost if the net realizable value of the finished

products is higher than the cost. If a decline in the value of materials shows that the net realizable value

of the finished products is lower than the cost the materials shall be measured at the net realizable

value.

(4) Inventory system

The Company adopts perpetual inventory system.

(5) Packing materials and low-cost consumables are amortized in full at once.

5.18 Assets held for sale

(1) Determining criteria for non-current assets held for sale or disposal groups

The Company shall classify the non-current assets or disposal group meeting the following conditions

into the held-for-sale category: The assets (or disposal group) must be available for immediate sale in

its present condition subject only to terms that are usual and customary for sales of such assets (or

disposal groups); Its sale must be highly probable; The Company has already made a decision to

dispose the component and has a commitment from the purchaser the transfer will be completed within

one year.The non-current assets or disposal group acquired by the Company for resale shall be divided into the

held-for-sale category on the acquisition date if it meets the condition that "the sale is expected to be

completed within one year" and if it is likely to meet other conditions for the held-for-sale category within

a short period (usually three months).Due to one of the following reasons which the Company is unable to control leading to the transactions

not completed with non-related party within one year and the Company still commits to selling non-

current assets or disposal groups it can continue to account for non-current assets or disposal groups

as held-for-sale: the buyer or any other party accidentally sets sale extension conditions. The Company

has to take action in time according to these conditions and the extension problem is expected to be

solved within one year; In rare cases the Company has taken the necessary steps and re-satisfies the

hold for sale category condition within the first year for the new circumstances which caused it unable to

complete the sale of the non-current assets or disposal group within one year.

(2) Accounting treatment of non-current assets or disposal groups held for sale

* Initial measurement and subsequent measurement

When the Company measure a non-current asset or disposal group held for sale initially or re-measure

at balance sheet date subsequently the impairment loss should be recognized if the book value is

higher than fair value less costs to sell by the amount of the difference between these two in profit and

loss the provision for assets held for sale need to be recognized at the same time.For the non-current assets or disposal groups divided into held-for-sale category on the acquisition date

they shall be measured as the lower of the initial measurement amount and the net amount after

deducting the selling expenses from the fair value under the assumption that it is not divided into held-

for-sale categories at the initial measurement. Except for the non-current assets or the disposal groups

obtained in the enterprise merger the difference caused by the non-current assets or the disposal

groups taking the net amount after the fair value minus the selling expenses as the initial measurement

amount shall be recorded into the current profit and loss.For the impairment of disposal group it should write off goodwill if existing and then write down the

related assets proportionally.Depreciation or amortization should cease for the non-current asset held for sale. Interest and other

charges on liabilities in the disposal groups held for sale continue to be recognized.* Accounting treatment of reversal of impairment loss

If the net amount of the non-current assets held for sale on the subsequent balance sheet date

increases after the fair value minus the selling expenses the amount previously written down shall be

reversed and the amount of the impairment loss recognized after being classified as the held-for-sale

shall be reversed and the reversed amount shall be included in the current profit and loss. The

impairment loss recognized before the classification of the held-for-sale shall not be reversed.If the net amount of the disposal groups held for sale on the subsequent balance sheet date increases

after the fair value deducting the selling expenses the amount previously written down shall be

reversed and the amount of the impairment loss recognized as non-current assets after being

classified as the held-for-sale shall be reversed and the reversed amount shall be included in the

current profit and loss. The book value of the goodwill that has been written down and the impairment

losses recognized before the classification of the held-for-sale shall not be reversed.

The subsequent reversed amount of the impairment loss recognized by the disposal groups held for

sale shall be increased in proportion to the book value of non-current assets except goodwill in the

disposal groups.* Recognition criteria and presentation of discontinued operations

Non-current assets or disposal groups that are no longer divided into held-for-sale category or non-

current assets are removed from disposal groups held for sale because of no longer meeting the

condition of classification of held-for-sale they are measured at lower of the following two: book value

before being classified as the held-for-sale considering depreciation amortization or impairment that

should have been recognized under the assumption that it is not divided into held-for-sale categories;

and recoverable amount.When terminating the recognition of the non-current assets held for sale or the disposal groups the

unrecognized gains or losses shall be recorded into the current profit and loss.

5.19. Long-term equity investment

(1) Judgment criteria of common control and significant influence

Common control on an agreement with other participants refers to the Company share control with

other participants on an arrangement according to relevant conventions which exists only when

decisions about the relevant activities require the unanimous consent of the parties sharing control.This arrangement belongs to joint venture. Where the joint venture arrangement is made by a separate

entity and the Company is judged to have rights to the net assets of such a separate entity according to

the relevant conventions. Such a separate entity shall be regarded as a joint venture and accounted by

the equity method. If the Company is judged to be not entitled to the net assets of the separate entity

according to relevant conventions the separate entity shall be regarded as a joint venture and the

Company shall recognize the items related to the shares of the joint venture and perform accounting

treatment in accordance with relevant accounting standards.The term ‘significant influence’ refers to the power to participate in decision-making on the financial and

operating policies of the investee but with no control or joint control over the formulation of these

policies. The Company judges that it has a significant impact on the invested entity through one or more

of the following situations and taking all the facts and circumstances into consideration:

* Dispatch representatives to the board of directors or similar authorities of the investee.* To participate in the financial and business policy making process of the investee.* Significant transactions with the investee.

* Dispatch management personnel to the investee.* To provide key technical data to the investee.

(2) Determination of the initial investment cost

* Long-term equity investment resulting from combination

Business combination under common control：For the long-term equity investments obtained by cash

paid non-monetary assets paid or assumed liabilities and the equity securities issued by the acquirer

on the merger date the initial investment cost of long-term equity investment shall be taken as the

share of the owner's equity of the investee in the book value of the final control party's consolidated

financial statements. If the investee under business combination under common control can be

controlled due to additional investment or other reasons the initial investment cost of long-term equity

investment shall be determined on the merger date according to the share of the net assets of the

investee in the book value of the final control party's consolidated financial statements. The difference

between the initial investment cost of the long-term equity investment on the merger date and sum of

the book value of the long-term equity investment before the merger and the new consideration of

acquiring shares on the merger date shall be recorded to adjust the equity premium. If the equity

premium is insufficient to be written down the retained earnings shall be written down.Business combination not under common control：The Company takes the initial investment cost of

long-term equity investment as the merger cost determined on the purchase date. If the investee can be

controlled under business combination not under common control due to additional investment or other

reasons the previous book value of the equity investment held plus the sum of the newly added

investment cost shall be taken as the initial investment cost calculated according to the cost method.* Long-term equity investment obtained by other means

For the long-term equity investments obtained by cash paid the Company recognizes their fair value as

the initial investment costs.For the long-term equity investments acquired by the issue of equity securities the initial investment

cost shall be the fair value of the equity securities issued.For long-term equity investments obtained by non-monetary assets exchange under the condition that

an exchange of non-monetary assets is of commerce nature and the fair value of assets exchanged

can be reliably measured non-monetary assets traded in is initially stated at the fair value of the assets

traded out unless there is conclusive evidence indicating that the fair value of the assets traded in is

more reliable; if the above conditions are not satisfied initial investment costs of long-term equity

investments traded in shall be recognized at the book value of the assets traded out and the relevant

taxes and surcharges payable.For long-term equity investments obtained by debt restructuring the Company recognizes the fair value

of shares of debt-for-equity swap as the initial investment costs.

(3) Subsequent measurement and recognition of profit and loss

* Long-term equity investments measured under the cost method

Long-term equity investments that can control the investee are measured under the cost method. For

long-term equity investments accounted at the cost method except cash dividends or profits declared

but not yet distributed which are included in the actual payments or the consideration actually paid for

the investment the cash dividends or profits declared by the investee shall be recognized as the

investment income irrespective of net profits realized by the investee before investment or after

investment.* Long-term equity investments measured under the equity method

For the long-term equity investment which has joint control or significant influence over the investee the

equity method is adopted for accounting. For long-term equity investments measured at the equity

method if the initial investment costs are higher than the investor’s attributable share of the fair value of

the investee’s identifiable net assets no adjustment will be made to the initial costs of the long-term

equity investments; if the initial investment costs are lower than the investor’s attributable share of the

fair value of the investee’s identifiable net assets the difference shall be recognized in current profit and

loss.The Company shall according to the shares of net profits and other comprehensive income realized by

the investee that shall be enjoyed or borne by the Company recognize the profit and loss on the

investments and adjust the book value of the long-term equity investments. When recognizing the net

profits and losses and other comprehensive income of the investee that the Company shall enjoy or

bear the Company shall make a recognition and calculation based on the net book profits and losses of

the investee after appropriate adjustments. However where the Company is unable to obtain the

relevant information due to failure to reasonably determine the fair value of the investee’s identifiable

assets minor difference between the investee’s identifiable assets and the book value thereof or other

reasons the profits or losses on the investments shall be directly calculated and recognized based on

the net book profits and losses of the investee. The Company shall calculate the part distributed from

cash dividends or profits declared by the investee and correspondingly reduce the book value of the

long-term equity investments. When recognizing the income from investments in associates and joint

ventures the Company shall write off the part of income from internal unrealized transactions between

the Company and associates and joint ventures which are attributable to the Company and recognize

the profit and loss on investments on such basis. Where the losses on internal transactions between

the Company and the investee are impairment of related assets full amounts of such losses shall be

recognized. Profit and loss from internal unrealized transactions between the Company’s subsidiaries

included into the combination scope and associates and joint ventures shall be written off according to

the above principles and the profit and loss on investments thereafter shall be recognized on such basis.When the share of net loss of the investee attributable to the Company is recognized it is treated in the

following sequence: Firstly write off the book value of the long-term equity investments; where the book

value of the long-term equity investments is insufficient to cover the loss investment losses are

recognized to the extent that book value of long-term equity which form net investment in the investee

in other substances and the book value of long-term receivables shall be written off; after all the above

treatments if the Company still assumes additional obligation according to investment contracts or

agreements the obligation expected to be assumed should be recognized as provision and included

into the investment loss in the current period. If the investee is profitable in subsequent accounting

periods the Company shall treat the loss in reverse order against that described above after deducting

unrecognized share of loss: i.e. write down the book value of the recognized provision then restore the

book value of long-term interests which substantially form net investments in the investee then restore

the book value of long-term investments and recognize investment income at the same time.

5.20. Investment property

Measurement model of investment property

Cost model

Method of depreciation or amortization

Investment property is the property that is held to earn rent or capital appreciation or both and can be

measured and sold separately. The Company’s investment property includes land use right for rent

land use right held for appreciation and then sold and buildings for rent.

(1) Initial Recognition

When the Company can obtain the rental income or value-added income related to the investment

property and the cost of the investment property that can be measured reliably the Company will

initially measure it according to the actual expenditure of purchase or construction:

The cost of the purchased investment property includes the purchase price and related taxes directly

attributable to the asset;

The cost of self-built investment property consists of the necessary expenses incurred before the asset

reaches the intended use condition;

The cost of the investment property obtained by other means shall be recognized in accordance with

relevant accounting standards.

(2) Subsequent measurement

In general the Company adopts the cost model to measure the follow-up expenditure of investment

property. The depreciation or amortization of investment property shall be carried out in accordance

with the accounting policies for the Company's fixed assets or intangible assets.If there is solid evidence that suggests that the investment property acquired can be measured at fair

value continuously and reliably the Company can use fair value model for subsequent measurement.For the investment property measured at fair value model the Company does not provide depreciation

or amortization and adjusts its book value based on the fair value of investment property at the balance

sheet date. The difference between the fair value and book value is recorded into current profit or loss.

(3) When the Company changes the use of investment property the relevant investment property will

be transferred to other assets.

5.21. Fixed assets

(1) Recognition of fixed assets

Fixed assets refer to tangible assets held for the purpose of producing commodities providing

services renting or business management with useful life exceeding one accounting year. Fixed

assets are recognized when the following criteria are satisfied simultaneously: It is probable that the

economic benefits relating to the fixed assets will flow into the Company; the cost of the fixed assets

can be measured reliably.

(2) Depreciation of fixed assets

Depreciation Estimated useful Estimated AnnualCategory method life (Year) residual value depreciation raterate (%) (%)

Buildings and Straight-line

Constructions 10－45 5% 9.50%－2.11%

method

Special Straight-line

equipment 5－35 5% 19.00%－2.71%

method

Universal Straight-line

equipment 4－25 5% 23.75%－3.80%method

Transportation Straight-line

equipment 6 5% 15.83%

method

Other equipment Straight-line 4－16 5% 23.75%－5.94%

method

Except for fixed assets still in use after full depreciation the Company depreciates all fixed assets and

calculates the depreciation in the straight-line depreciation method.Based on the nature and use of fixed assets the Company determines their service life and estimated

net salvage value and reviews their service life estimated net salvage value and depreciation method

at the end of the year. Changes in the service life estimated net salvage value and depreciation

method of the same type of assets are treated as changes in accounting estimation.

(3) Impairment test method and impairment provision accrued method of fixed assets

At the end of the period the fixed assets shall be measured at the lower of the book value and the

recoverable amount. If the recoverable amount of fixed assets is lower than the book value due to a

continuous decline in the market value or technological obsolescence damage or long-term idleness

a provision for impairment of the fixed assets shall be made for the difference between the recoverable

amount and the book value of individual fixed assets. If the recoverable amount of the individual asset

is difficult to estimate the Company will determine the recoverable amount of the asset group based on

the asset group to which the asset belongs. The impairment losses on fixed assets must not be

reversed in subsequent accounting periods once recognized.For fixed assets for which depreciation provision has been made the depreciation rate and depreciation

amount shall be remeasured according to the book value of the fixed assets (the original price of fixed

assets minus accumulated depreciation and provision for impairment) and the remaining service life.On the balance sheet date the fixed assets shall be measured at the lower of the book value and the

recoverable amount.

5.22. Construction in progress

(1) Construction in progress refers to various construction and installation works carried out for the

construction or repair of fixed assets including the actual expenditure incurred in new construction

reconstruction and expansion and the net value of fixed assets transferred from the reconstruction and

expansion projects.

(2) Construction in progress is accounted on an individual project basis with actual cost valuation

method. The borrowing costs incurred before the projects reach the intended use condition shall be

included in the project cost. The fixed assets shall be carried forward in the month when the project is

qualified for acceptance and delivery for use. For those that have reached the intended use condition

but have not yet completed the final account from the date of reaching the intended use condition

according to the project budget construction cost or the actual cost of the project the cost transferred

to the fixed assets shall be determined according to the estimated value and the depreciation shall be

recognized; After the completion of the final account the original provisional value shall be adjusted

according to the actual cost but the amount of depreciation accrued shall not be adjusted.

(3) The loan interest and related expenses incurred during the construction period shall be capitalized

into the cost of the construction in Progress.

(4) On the balance sheet date the construction in progress is recognized at the lower of book value and

recoverable amount.

5. 23. Borrowing costs

(1) Scope of borrowing costs and its capitalization conditions

The Company’s borrowing costs capitalized during period of capitalization are relevant loan expenses

directly attributable to the assets eligible for capitalization including interest thereon amortization of

discounts or premiums ancillary expenses and exchange differences incurred from foreign currency

loan etc.Borrowing costs are capitalized when the following three conditions are met simultaneously: * the

asset expenditure has occurred * the borrowing costs have occurred * the purchase and

construction activities necessary to make the assets reach the intended use condition have started.

(2) Recognition of capitalized amounts

The capitalized amount of borrowing expenses is calculated as follows: As for special loan borrowed for

acquiring and constructing or producing assets eligible for capitalization borrowing costs of special loan

actually incurred in the current period less the interest income of the loans unused and deposited in

bank or return on temporary investment should be recognized as the capitalization amount of borrowing

costs. As for general loans used for acquiring and constructing or producing assets eligible for

capitalization the interest of general loans to be capitalized should be calculated by multiplying the

weighted average of asset disbursements of the part of accumulated asset disbursements in excess of

special loans by the capitalization rate of used general loans. During the period of capitalization the

capitalized amount of interest of each accounting period shall not exceed the current actual interest of

the relevant loans. Where there are discounts or premiums on loans the amounts of interest for each

accounting period should be adjusted taking account of amortizable discount or premium amounts for

the period by effective interest method. Auxiliary expenses incurred from special loans before the

acquired or constructed assets eligible for capitalization reach the working condition for their intended

use or sale should be capitalized when they incur and charged to the costs of assets eligible for

capitalization; those incurred after the acquired or constructed assets eligible for capitalization reach the

working condition for their intended use or sale should be recognized as costs according to the

amounts incurred when they incur and charged to the current profit or loss.

(3) Recognition of capitalization rate

* For a special loan for the purchase and construction of fixed assets the capitalization rate is the

interest rate of the loan;

* For more than one special loan for the acquisition and construction of fixed assets the capitalization

rate is a weighted average interest rate of these loans.

(4) Suspension of capitalization of borrowing costs

If the acquisition and construction or production activities of assets eligible for capitalization are

interrupted abnormally and this condition lasts for more than three months the capitalization of

borrowing costs should be suspended. The borrowing costs incurred during interruption are charged to

profit or loss for the current period and the capitalization of borrowing costs continues when the

acquisition and construction or production activities of the asset resume.

(5) Cessation of capitalization of borrowing costs

Capitalization of borrowing costs should cease when the acquired and constructed or produced assets

eligible for capitalization have reached the working condition for their intended use or sale. Borrowing

costs incurred after the assets eligible for capitalization have reached the working condition for their

intended use or sale should be recognized as the current profit and loss when they incur. If parts of the

acquired and constructed or produced assets are completed separately but the assets cannot be used

or sold externally until overall completion the capitalization of borrowing costs should cease at the time

of overall completion of the said assets.

5.24. Intangible assets

(1) Useful life and the basis for its determination estimation amortization methodology or

review procedures

Intangible assets refer to identifiable non-monetary assets that are owned or controlled by the Company

without a physical form. The Company’s intangible assets consist of land use rights software

trademark use rights patent rights and data resources.

* Measurement method

A. Costs of intangible assets purchased include purchase price related tax and expenses and other

expenditure that can be distributed to the asset directly to reach its expected use.B. Intangible assets invested by investors shall be valued at the value agreed upon in the investment

contract or agreement;

C. Expenses on the research phase of internally researched and developed intangible assets shall be

included in the current profit and loss when they incur; The expenditures incurred in the development

stage of the internal research and development projects shall be recognized as intangible assets when

the following conditions are met; otherwise they shall be recorded into the current profit and loss when

they incur.a. It is technically feasible to finish intangible assets for use or sale;

b. It is intended to finish and use or sell the intangible assets;

c. The usefulness of methods for intangible assets to generate economic benefits shall be proved

including being able to prove that there is a potential market for the products manufactured by applying

the intangible assets or there is a potential market for the intangible assets themselves or the intangible

assets will be used internally;

d. It is able to finish the development of the intangible assets and able to use or sell the intangible

assets with the support of sufficient technologies financial resources and other resources.e. The expenditure attributable to the intangible asset during its development phase can be measured

reliably.D. If payment of the purchase price of intangible assets can be deferred and exceeds normal credit

conditions the purchase has the nature of finance in fact and cost of the intangible asset shall be

determined on the basis of present value of the purchase price. The difference between the amount

actually paid and the present value of the purchase price should be recorded into current profit or loss

other than the differences that should be capitalized during the credit period.* Useful life and the basis for its determination estimation amortization methodology or review

procedures

For intangible assets with limited useful life amortization shall be carried out according to the straight-

line method within the period that brings economic benefits to the enterprise. At the end of each period

the useful life and amortization method of intangible assets with limited service life shall be reviewed. If

there are differences with the original estimates corresponding adjustments shall be made.

Intangible assets whose useful life is uncertain shall be regarded as intangible assets if it is impossible

to foresee the term in which intangible assets bring economic benefits to the enterprise. Intangible

assets with uncertain useful life shall not be amortized during the holding period and the life of

intangible assets shall be reviewed at the end of each period. If it is still uncertain after the review at the

end of the period the impairment test shall continue during each accounting period. At the end of each

period the useful life of intangible assets with uncertain service life shall be reviewed.* Impairment test

On the balance sheet date intangible assets are valued at the lower of book value and recoverable

amount.

(2) The scope of research and development expenditure collection and the related accounting

treatment

The R&D expenditure of the Company mainly include the materials consumed in the implementation of

R&D activities salaries of R&D department employees depreciation and amortization of assets such as

equipment and software used in research and development R&D testing R&D technical service fees

and licensing fees.The expenditures incurred in the development stage of the research and development projects shall be

recognized as intangible assets when the following conditions are met; otherwise they shall be

recorded into the current profit and loss when they occur.* It is technically feasible to finish intangible assets for use or sale;

* It is intended to finish and use or sell the intangible assets;

* The usefulness of methods for intangible assets to generate economic benefits shall be proved

including being able to prove that there is a potential market for the products manufactured by applying

the intangible assets or there is a potential market for the intangible assets themselves or the intangible

assets will be used internally;

* It is able to finish the development of the intangible assets and able to use or sell the intangible

assets with the support of sufficient technologies financial resources and other resources.* The expenditure attributable to the intangible asset during its development phase can be measured

reliably.Development expenditures that have been recorded into profit and loss in previous periods are not

recognized as assets in subsequent periods. The capitalized expenditure in the development stage is

listed as development expenditure in the balance sheet and it will be recorded into intangible assets

from the date when the project reaches its intended purpose.

5.25. Long-term assets impairment

On the balance sheet date the Company makes a judgment on whether there are signs of possible

impairment of long-term assets. If there are impairment indicators of non-current assets the Company

estimates the recoverable amount based on individual asset. If recoverable amount of individual asset

is difficult to be estimated the Company should recognize the recoverable amount of the asset group

which the individual asset belongs to.The recoverable amount is the higher of fair values less costs of disposal and the present values of the

future cash flows expected to be derived from the asset.If the measurement result of recoverable amount shows that recoverable amount of the non-current

assets is less than its book value the book value shall be written down to the recoverable amount and

the amount written down shall be recognized as the impairment loss of assets recorded into the current

profit and loss and the corresponding impairment provision of assets shall be made at the same time.Once impairment loss stated above is recognized reversal is not allowed in the subsequent accounting

periods.After the recognition of the impairment loss the depreciation or amortization expense of the impairment

asset shall be adjusted accordingly in the future period so as to systematically apportion the adjusted

book value of the asset (deducting the expected net salvage value) within the remaining service life of

the asset.The Company should perform impairment test for goodwill and intangible assets with indefinite life at

least at each year end no matter whether there is impairment indicator.Goodwill shall be combined with its related asset group or asset group portfolio so as to perform an

impairment test. When the Company performs an impairment test on relevant asset group or asset

group portfolio including goodwill if there are signs of impairment the Company shall firstly perform an

impairment test on asset group or asset group portfolio excluding goodwill and calculate the

recoverable amount and compare with the related book value recognize the corresponding impairment

loss. Then the Company performs an impairment test on relevant asset group or asset group portfolio

including goodwill and compares the book value of the relevant asset groups or asset group portfolio

(including proportional book value of goodwill) with its recoverable amount. If the recoverable amount of

relevant asset group or asset group portfolio is less than its book value the Company shall recognize

impairment loss of goodwill.

5.26. Long-term deferred expenses

Long-term deferred expenses shall be initially measured according to the actual costs incurred. It is

amortized using the straight-line method over the beneficial period. If it cannot benefit the following

accounting period the amortized value of the item that has not been amortized will be transferred to the

current profit and loss.

5.27. Contract liabilities

The recognition method of contract liabilities: The Company presents contract assets or contract

liabilities on the balance sheet according to the relationship between the fulfillment of its contract

performance obligations and its customers’ payment. Obligations to be fulfilled by the Company of

transferring commodities or providing services to customers as the Company has received or should

receive customers’ considerations are presented as contract liabilities.

5.28. Employee benefits

(1) Accounting treatment method of short-term benefits

Short-term benefits are the benefits that the Company expects to pay in full within 12 months after the

reporting period in which the employee provided relevant services excluding the compensation for

employment termination. Accrued short term benefits will be recognized as liability during the

accounting period in which the employee is providing the relevant service to the Company. The liability

will be included in the current profit and loss or the relevant assets cost.

(2) Accounting treatment method of post-employment benefits

* Defined contribution plan

The defined contribution plan of the Company includes payments of basic pension and unemployment

insurance calculated according to the local payment base and proportion. The amount shall be included

into the profit and loss or the relevant assets cost for the accounting period in which the employee

provides the service to the Company.* Defined benefit plan

According to the formula determined by the expected accumulative projected unit credit method the

Company will record the benefit obligation generated by the defined benefit plan belonging to the period

during which the employee provides the service into the current profit and loss or the relevant assets

cost.The deficit or surplus resulting from the present value minus the fair value of the assets of a defined

benefit plan is recognized as a net liability or net asset of a defined benefit plan. If there is surplus in the

defined benefit plan the net assets of the defined benefit plan shall be measured at the lower of the

surplus and the upper limit of assets of the defined benefit plan.All defined benefit plan obligations including those expected to be paid within the twelve months

following the end of the annual reporting period in which the employee provides the service are

discounted based on the market yield and high quality corporate bonds in an active market that match

the duration and currency of defined benefit plan obligations on the balance sheet date.The service costs generated by the defined benefit plan and the net interest on net liabilities or net

assets of the defined benefit plan are included in the current profit and loss or relevant assets cost;

Changes in net liabilities or net assets generated by the re-measurement of the defined benefit plan are

included in other comprehensive income and are not reversed to profit and loss in subsequent

accounting periods.At the time of settlement of the defined benefit plan the settlement gains or losses shall be recognized

according to the difference between the present value of the obligations of the defined benefit plan and

the settlement price determined on the settlement date.

(3) Accounting treatment method of termination benefits

Employee benefits liabilities shall be recognized and included into profit or loss for the current period on

the earlier date of the two following circumstances: a. When the Company is not able to withdraw the

benefits from termination of employment or resignation persuasion unilaterally; b. When the Company

recognizes costs and fees relevant to reforming the termination benefits payment. As for the termination

benefits that cannot be fully paid within 12 months after the end of the annual report period the

Company shall choose an appropriate discount rate and record it into current profit and loss based on it.

(4) Accounting treatment method of other long-term employee benefits

Other long-term employee benefits are all employee benefits other than short-term benefits post-

employment benefits and termination benefits.Other long-term employee benefits provided by the Company to the employee that meet the conditions

of the defined contribution plan shall be treated in accordance with the same principles of the defined

contribution plan; If the conditions for defined benefits are met net liabilities or net assets of other long-

term employee benefits shall be recognized and measured in accordance with the relevant principles of

the defined benefits plan.

5.29. Estimated liabilities

(1) Recognition criteria of estimated liabilities

If the contingent obligations meet the following conditions simultaneously the Company shall recognize

it as an estimated liability:

This obligation is the Company's current obligation; the performance of this obligation is highly likely to

result in an outflow of economic benefits from the Company; The amount of the obligation can be

measured reliably.

(2) Measurement method of estimated liabilities

The Company's estimated liabilities are initially measured in terms of the best estimate of the

expenditure of fulfilling the relevant current obligations.For determining the best estimate the Company takes various factors into account such as the risk

uncertainty and time value of money related to contingencies. If the time value of money has a

significant impact the best estimate is determined by discounting the relevant future cash outflows.The best estimate is processed as follows:

Where there is a continuous range (or range) of required expenditures and the probability of the

occurrence of various results within the range is the same the best estimate is determined according to

the mean of the middle value of the range namely the mean value of the upper and lower limits.Where there is no continuous range (or range) of required expenditures or where there is a continuous

range but the possibility of various outcomes within the range is different if the contingencies involve a

single item the best estimate is determined according to the most likely amount; If the contingencies

involve more than one item the best estimate is calculated and determined according to various

possible results and relevant probabilities.Where all or part of the expenses required for the liquidation of the estimated liabilities of the Company

are expected to be compensated by a third party the amount of compensation shall be recognized as

an asset when it is basically confirmed that it can be received and the confirmed amount of

compensation shall not exceed the book value of the estimated liabilities.

5.30. Share-based payment

(1) The type of share-based payment

Share-based payment is classified as equity-settled share-based payment and cash-settled share-

based payment.

(2) The method of determining the fair value of equity instruments

For equity-settled share-based payment related to employees the equity instrument is measured at fair

value. The cash-settled share-based payment shall be measured according to the fair value of the

liabilities calculated and determined on the basis of shares or other equity instruments undertaken by

the Company.For the fair value of the stock option granted the fair value is determined by using the stock option

pricing model and the following factors are taken into account: the current price of the underlying

shares the exercise price of the option the risk-free interest rate within the period of the option the

option life and the expected volatility of the stock price.

(3) Recognition of the best estimate basis of instrument that can be exercised

For the equity-settled share-based payment settled immediately after the grant the fair value of the

equity instrument shall be included in the relevant costs or expenses on the grant date and the capital

reserve shall be increased accordingly. Grant date means the date on which the share-payment

agreement is approved.For the equity-settled share-based payment in which the services during waiting period are completed

and the performance conditions are met in return for services of employees on each balance sheet

date during waiting period the current obtained service shall be included in the relevant costs or

expenses and the capital reserves in accordance with the fair value of the equity instruments on the

grant date based on best estimate of the number of vested equity instruments and the subsequent

changes in fair value shall not be recognized. On each balance sheet date during waiting period the

Company makes the best estimate based on the latest available employee number change and other

subsequent information and modifies the number of equity instruments for the estimated vesting. On

the vesting date the final expected number of vesting instruments is the same as the actual number of

vesting instruments.

(4) Relevant accounting treatment of implementation modification and termination of share-based

payment plan

For equity-settled share-based payment no adjustments will be made to the recognized costs and total

owners' equity after the vesting date. On the vesting date the Company shall recognize the share

capital and the equity premium according to the exercise situation and carry forward the capital reserve

recognized in the waiting period.No matter how it modifies the terms and conditions of the granted equity instruments or it cancels the

granted equity instruments or its settlement the equity instruments granted by the Company shall be

recognized at fair value on the grant date and it measures the corresponding services obtained unless

it cannot be vested because it cannot meet the vesting conditions of equity instruments (except market

conditions).

5.31. Revenue

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

(1) Basic principles of revenue identification

The Company recognizes revenue when it has fulfilled the performance obligations under the contract

that is when the customers obtain the control of relevant goods or services at the transaction price

allocated to the performance obligations.Performance obligations refer to the Company's promise that it will transfer clearly distinguishable

goods or services to customers under the contract.Obtaining control of related goods refers to that customers can control the use of the goods and obtain

almost all the economic benefits from the goods.The Company will evaluate the contract on the contract start date identify each individual performance

obligation contained in the contract and judge whether each individual performance obligation will be

performed within a certain period of time or at a certain point in time. If one of the following conditions is

met and the performance obligation is performed within a certain period of time the Company will

identify revenue within a period of time according to the performance progress: 1) The customers obtain

and consume the economic profits while the Company performs the contract. 2) The customers can

control the products under construction during the performance of the Company; 3) The products

produced during the performance of the Company cannot be replaced and the Company has the right

to collect payment for the completed performance accumulated during the entire contract period.Otherwise the Company will identify revenue when the customers obtain control rights of the relevant

goods or services.For the performance obligations performed within a certain period of time the Company will apply the

input-output method to identify the appropriate performance progress based on the nature of the goods

and services. The input-output method is to identify the performance progress based on the value of the

goods that have been transferred to the customers. When the performance progress cannot be

reasonably identified and the Company's incurred costs are expected to be compensated the Company

will identify the revenue according to the amount of the incurred costs until the performance progress

can be reasonably identified.

(2) The methods of revenue identification

The Company primarily sells baijiu which involve performance obligations fulfilled at a certain point in

time. For the recognition of the revenue of domestic products the following conditions must be met:

The Company has delivered the products to the customer as per the contract and the customer has

accepted the goods; payment has been received or a receipt voucher has been obtained and the

relevant economic benefits are likely to flow in; and control of the goods has transferred to the customer.The following requirements must be met to recognise the revenue of export products: The Company

has declared the products according to the contract obtained the bill of lading received the payment or

obtained the receipt voucher and relevant economic benefits are likely to flow in and control of the

goods has transferred to the customer. The following requirements must be met to recognise the

revenue of sales through third-party platforms or company-owned websites: The sales platform is

responsible for delivering the goods to the customer or the Company entrusts a logistics company to

deliver the goods to the customer and revenue is recognised upon receipt of the platform settlement

statement or upon delivery of the goods.Different business models for the same type of business involve different revenue recognition and

measurement methods

N/A

5.32. Contract costs

Contract costs comprise incremental costs incurred as the Company obtains a contract and costs for

contract performance. Incremental costs incurred as the Company obtains a contract refer to those

costs which will not incur without entering into a contract (such as sales commission). If it is expected

that the costs are recoverable the Company will recognize the costs incurred to obtain a contract as

one form of assets. In case that the term of asset amortization is shorter than one year or one normal

operating cycle the costs will be recognized as profit and loss of the current period after occurrence.If the costs incurred from contract performance fall outside the inventory or the scope of other

enterprise accounting standards and satisfy all of the following conditions the Company will recognize

the costs for contract performance as assets: a) The costs are directly related to one existing contract

or contract that is expected to be obtained; b) The costs enrich the Company's resources for future

contract performance (including continual fulfillment); c) The costs are estimated to be recovered.Assets recognized from costs incurred to obtain a contract and costs for contract performance

(hereinafter referred to as "assets related to contract costs") will be amortized based on the same basis

as the income from commodities or services related to the assets and will be recognized as profit and

loss of the current period. In case that the book value of assets related to contract costs is higher than

the difference of the two items below the Company will set aside provisions for assets impairment to

deal with the extra part and recognize that part as impairment losses: a) Estimated residual

consideration to be obtained from transfer of commodities or services related to the assets; b)

Estimated costs incurred from transfer of the relevant commodities or services.

5.33. Government grants

Government grants are monetary assets and non-monetary assets acquired free of charge by the

Company from the government like fiscal subsidies.

(1) Judgment basis and accounting treatment method of government grants related to assets

Government grants related to assets are government grants that are acquired by the Company and

used for forming long-term assets through purchasing and constructing or other ways. If the

government documents do not clearly specify the target of the subsidy the Company shall separately

explain judgment basis of classifying the government grants into the government grants related to

assets or income.Accounting method: it shall be recognized as deferred income allocated evenly over the useful lives

(the period of depreciation and amortization) of the relevant assets from the month of commencement

of depreciation or amortization when the relevant assets have reached the intended use condition and

included in the current profit or loss. However government grants measured at the nominal amount

shall be directly included in current profit and loss.

(2) Judgment basis and accounting treatment method of government grants related to income

Government grants related to income are government grants other than government grants related to

assets;

Accounting method:

* If it is used to compensate the Company’s relevant expenses or losses in future periods it should be

recognized as deferred income and included into the current profit and loss or written off against the

related costs when the relevant expenses losses are recognized.* If it is used to compensate the Company’s relevant expenses or losses incurred it is directly

included into the current profit and loss on acquisition or written off of the related costs.* Recognition time-point of government grants

Government grants are recognized when the Company can meet the attached conditions for the

government grants and the Company can receive the grants.* Measurement of government grants

If a government grant is a monetary asset it shall be measured in the light of the received or receivable

amount. If a government grant is a non-monetary asset it shall be measured at its fair value; and if its

fair value cannot be obtained in a reliable way it shall be measured at a nominal amount.

5.34. Deferred tax assets or deferred tax liabilities

The Company adopts the balance sheet liability method to account for income tax.The Company recognizes deferred tax assets when the following conditions are met simultaneously:

(1) Temporary differences are highly likely to be reversed in the foreseeable future;

(2) Taxable income that may be used to offset the deductible temporary difference is likely to be

obtained in the future and is limited to the amount of taxable income that is likely to be obtained.On each balance sheet date the current income tax liabilities (or assets) incurred in the current period

or prior periods shall be measured by the Company in light of the expected payable (refundable)

amount of income taxes according to the tax law; The deferred income tax assets and deferred income

tax liabilities shall be measured at the tax rate applicable to the period during which the assets are

expected to be recovered or the liabilities are expected to be settled.The Company shall review the carrying amount of deferred income tax assets on each balance sheet

date. The current income tax and deferred income tax shall be recorded into the current profit and loss

as income tax expense or income except for the income tax generated from the enterprise merger

transactions or events directly recognized in the owner's equity.

Basis for deferred income tax assets and deferred income tax liabilities presented as a net amount after

offset:

When the following conditions are simultaneously met deferred income tax assets and deferred income

tax liabilities are presented as a net amount after offset:

(1) The enterprise has the legal right to settle the current income tax assets and current income tax

liabilities on a net basis;

(2) Deferred income tax assets and deferred income tax liabilities were related to the income tax levied

by the same tax administration department on the same taxpayer or different taxpayers but during the

period when each significant deferred income tax assets and liabilities would be reversed in the future

the involved taxpayer intended to settle the current income tax assets and liabilities on a net basis or to

acquire assets and settle liabilities at the same time.

5.35. Lease

(1) Accounting treatment with the Company as lessee

* Judgment criteria and accounting treatment for short-term leases and leases of low-value assets as

a lessee for simplified treatment

On the commencement date of the lease term the Company will recognize the lease with a lease term

not exceeding 12 months and exclude the purchase option as a short-term lease. Leases with a value

below CNY 40000 when a single leased asset is a brand-new asset are identified as low-value asset

leases. If the Company sublets or expects to sublet the leased assets the original lease shall not be

deemed as a low-value asset lease.The Company records the payments of short-term and low-value asset leases incurred during each

period of the lease term in the relevant asset costs or the profit or loss for the current period by the

straight-line method.The Company will recognize right-of-use assets and lease liabilities on the inception date of the lease

term excluding the above short-term and low-value asset leases.* Right-of-use assets

Right-of-use assets are initially measured at costs including: A. The initial measurement amount of

lease liabilities; B. If there is a lease incentive for the lease payment paid on or before the start date of

the lease term the relevant amount of the lease incentive already enjoyed shall be deducted; C. Initial

direct expenses incurred by the Company; D. The expected cost to be borne by the Company in order

to dismantle and remove the assets leased restore original state of the place where the assets leased

are in or restore the assets leased to the state stipulated in the lease terms.* Lease liabilities

The Company initially measures the lease obligation at the present value of the lease payments

outstanding at the commencement date of the lease term. When calculating the present value of lease

payments the Company uses the interest rate implicit in lease as the rate of discount. If the interest

rate implicit in lease cannot be determined the Company’s incremental lending rate is used as the rate

of discount.After the commencement of the lease term the Company uses the cost model for subsequent

measurement of right-of-use assets depreciates right-of-use assets on a straight-line basis calculates

the interest expense on the lease liability within the lease term and includes it in the current profit or

loss unless such interest charge is stipulated to be included in the underlying asset cost. Variable lease

payments that are not included in the measurement of the lease obligation should be included in the

current profit or loss when they are actually incurred unless such payments are stipulated to be

included in the underlying asset cost.After the commencement of the lease term the Company remeasures the lease liability and adjusts the

corresponding right-of-use asset and if the carrying value of the right-of-use asset has been reduced to

zero but the lease liability is subject to further reduction the difference is recorded in current profit or

loss: (1) When there is a change in the valuation of the purchase option renewal option or termination

option or actual exercise the Company remeasures the lease liabilities at the present value of the

lease payments after the change and the revised discount rate; (2) When there is a change in the

actual fixed payment the estimated residual value of the guarantee payable the index or rate used to

confirm the lease payment the Company calculates the present value based on the changed lease

payment amount and the original discount rate to remeasure the lease liabilities. However where

changes in lease payments arise from changes in floating interest rates a revised discount rate was

used to calculate the present value.

(2) Accounting treatment with the Company as lessor

* Lease classification

The Company classifies leases into finance leases and operating leases at the inception of leases. A

finance lease refers to a lease where almost all the risks and rewards related to the ownership of the

leased asset are substantially transferred regardless of whether the ownership is eventually

transferred or not. All leases other than finance leases are classified as operating leases.

* Operating leases

The Company recognizes the lease payments receivable of the operating lease as rental earnings in

each period within the lease term on a straight-line basis or according to other systematic and

reasonable methods. The initial direct costs related to the operating lease are capitalized amortized

within the lease term on the same basis as the recognition of rental earnings and included in profit or

loss for the current period. The received variable lease payments related to the operating lease that are

not included in the lease payments receivable are included in profit or loss for the current period when

they are actually incurred.* Finance leases

On the commencement date of the lease term the Company recognizes the finance lease receivables

for the finance lease and derecognizes the leased asset of the finance lease. In the initial measurement

of finance lease receivables the sum of the unsecured residual value and the present value of the

lease payments receivable not yet received on the commencement date of the lease term discounted at

the interest rate implicit in lease is the entry value of the finance lease receivables. The Company

calculates and recognizes the interest income in each period within the lease term at a fixed interest

rate implicit in the lease. The received variable lease payments that are not included in the

measurement of the net investment in the lease are included in profit or loss for the current period when

they are actually incurred.

5.36. Income tax expenses

The Company adopts the balance sheet liability method to account for income tax.The Company recognizes deferred tax assets when the following conditions are met simultaneously:

1. Temporary differences are highly likely to be reversed in the foreseeable future;

2. Taxable income that may be used to offset the deductible temporary difference is likely to be obtained

in the future and is limited to the amount of taxable income that is likely to be obtained.On each balance sheet date the current income tax liabilities (or assets) incurred in the current period

or prior periods shall be measured by the Company in light of the expected payable (refundable)

amount of income taxes according to the tax law; The deferred income tax assets and deferred income

tax liabilities shall be measured at the tax rate applicable to the period during which the assets are

expected to be recovered or the liabilities are expected to be settled.The Company shall review the carrying amount of deferred income tax assets on each balance sheet

date. The current income tax and deferred income tax shall be recorded into the current profit and loss

as income tax expense or income except for the income tax generated from the enterprise merger

transactions or events directly recognized in the owner's equity.

5.37. Changes in significant accounting policies and accounting estimates

5.37.1. Changes in significant accounting policies

□ Applicable □ N/A

Unit: CNY

Statement line item

Content and reasons for accounting policy changes Amount affected

significantly affected

The Ministry of Finance issued Interpretation No. 20 of the

Accounting Standards for Business Enterprises on June 4 2026. It

further standardized and clarified the assessment of contractual The implementation of this

cash flow characteristics of financial assets the accounting requirement had no

treatment when a currency lacks convertibility and relevant material impact on the

disclosure requirements. This Interpretation shall take effect on Company’s financial

the date of issuance. For newly arising transactions subject to this position or operating

Interpretation from January 1 2026 up to the effective date hereof results.enterprises shall make adjustments in accordance with this

Interpretation.

5.37.2. Changes in significant accounting estimates

□ Applicable □ N/A

5.37.3. Adjustments to Financial Statement Items at the Beginning of the Year of the First

Implementation of the New Accounting Standards Implemented since 2026

□ Applicable □ N/A

6. Taxes

6.1. Major tax types and rates

Tax type Tax base Tax rate

Value-added tax Taxable sales income 13 % 9% 6%

Urban maintenance and construction

Taxable turnover tax 7% 5%

tax

Corporate income tax Taxable income 25% 15% 16.5% 0%

Consumption tax (based on price) Baijiu tax price or ex-factory price 20%

Consumption tax (based on quantity) Quantity of baijiu CNY 1.00/kg

Education surcharge Taxable turnover tax 3%

Local education surcharge Taxable turnover tax 2%

Original value of the property*70%;

Property tax 1.2% 12%

house rent

Land use tax Land area CNY 1.2-20/m2

Others According to national regulation

Tax payment subject using different corporate income tax rates the corporate income tax rates are

as follows:

Company name Corporate income tax rate

Luzhou Red Sorghum Modern Agricultural Development

Exempted from corporate income tax

Co. Ltd.Luzhou Laojiao International Trade (Hainan) Co. Ltd. 15%

Luzhou Pinchuang Technology Co. Ltd. 15%

Luzhou Laojiao International Development (Hong Kong)

16.5%

Co. Ltd.Luzhou Laojiao Commercial Development (North

21%-40%

America) Co. Ltd.Mingjiang Co. Ltd. 21%-40%

6.2. Tax preferences

(1) According to Announcement of the Ministry of Finance State Taxation Administration and National

Development and Reform Commission on Continuing the Corporate Income Tax Policies Concerning

the Western Development Strategy (No. 23 in 2020 Ministry of Finance) from 1 January 2021 to 31

December 2030 companies located in the western region whose primary business is listed in the

Catalogue of Encouraged Industries in the Western Region and the primary business income

accounting for over 60% of the total enterprise income. These companies shall be subject to the

corporate income tax at a reduced rate of 15%. The Company's majority-owned subsidiary Luzhou

Pinchuang Technology Co. Ltd. whose primary business income meets the requirements of scope and

standard of the Catalogue of Encouraged Industries in the Western Region is subject to the rate of

15% for corporate income tax.

(2) According to Article 27 of the Corporate Income Tax Law of the People's Republic of China and

Article 86 Item 1 of the Implementation Regulations of the Corporate Income Tax Law companies are

exempted from enterprise income tax when they engage in agricultural forestry animal husbandry and

fishery industries. The majority-owned subsidiary of the Company Luzhou Red Sorghum Modern

Agricultural Development Co. Ltd. is engaged in the cultivation and sale of organic sorghum and

enjoys the reduction of corporate income tax preferences.

(3) Pursuant to Item 1 of Article 24 of the Value-Added Tax Law of the People's Republic of China

agricultural producers sell self-produced agricultural products exempt from value-added tax. The

majority-owned subsidiary of the Company Luzhou Red Sorghum Modern Agricultural Development

Co. Ltd. is engaged in the cultivation and sale of organic sorghum and enjoys the value-added tax

exemption.

(4) According to the Notice on Preferential Corporate Income Tax Policies in Hainan Free Trade Port

(Cai Shui [2020] No. 31) and the Notice on Extending the Implementation of Preferential Corporate

Income Tax Policies in Hainan Free Trade Port (Cai Shui [2025] No. 3) the Company's wholly-owned

subsidiary Luzhou Laojiao International Trade (Hainan) Co. Ltd. whose primary business income

meets the requirements of scope and standard of the Catalogue of Encouraged Industries in Hainan

Free Trade Port is paid at the rate of 15% for corporate income tax.

7. Notes to the main items of the consolidated financial statements (All

currency unit is CNY unless otherwise stated)

7.1. Cash and cash equivalents

Unit: CNY

Item Closing Balance Opening Balance

Bank deposit 26101831272.25 27299090094.73

Other cash and cash equivalents 28176300.41 42476603.64

Total 26130007572.66 27341566698.37

Including: Total deposit

111111180.30 97912284.27

outbound

Other statements:

Note 1: The deposit outbound is the balance of cash and cash equivalents of the foreign holding

subsidiary of the Company.Note 2: The balance of other cash and cash equivalents mainly consists of balances of funds in self-

owned accounts on third-party platforms for subsidiaries in the amount of CNY 13959763.00

balances of funds in the co-management bank account for special government funds of CNY

10006699.34 balances in securities accounts of CNY 3999838.07 deposits for travel services of

CNY 200000.00 and other business- related frozen funds of CNY 10000.00.Of which: The co-management bank account for special government funds was established by a

subsidiary Luzhou Laojiao Baijiu Production Co. Ltd. together with the Jiangyang District Economy

and Information Technology Bureau of Luzhou City for the purpose of special government funds.This account is managed in accordance with the measures for the administration of special funds for

the project and will be released upon acceptance of the project.Note 3: There is no special benefit arrangement such as establishing a fund co-management account

with related parties other than those mentioned above.Liquor and wine manufacturing companies shall disclose in detail whether there are special interest

arrangements such as establishing co-management accounts with related parties.□ Applicable □ N/A

7.2. Held-for-trading financial assets

Unit: CNY

Item Closing Balance Opening Balance

Financial assets measured at fair

value with their changes included into 1813215967.55 1584771959.37

current profits/losses

Including:

Wealth management products 1813215967.55 1584771959.37

Including:

Total 1813215967.55 1584771959.37

7.3. Notes receivable

N/A

7.4. Accounts receivable

7.4.1. Disclosure by aging

Unit: CNY

Aging Closing book balance Opening book balance

Within 1 year (including 1 year) 23961663.42 5454635.77

1-2 years 6605.52 992962.98

2-3 years 7794.51

Total 23976063.45 6447598.75

7.4.2. Disclosure by withdrawal methods for bad debts

Unit: CNY

Closing Balance Opening Balance

Book balance Provision for bad Provision for bad

Type debt

Book balance

Book debt Book

Amount Proportion Amount

Proporti value Proporti

on Amount on Amount

Proporti value

on

Inclu

ding:

Account

s

receiva

ble

tested 23976 100.00 12003 22775 64475 100.00 372028 60755

5.01% 5.77%

for 063.45 % 02.62 760.83 98.75 % .09 70.66

impairm

ent by

the

portfolio

Inclu

ding:

Account

s

receiva

ble

tested 23976 100.00 12003 22775 64475 100.00 372028 60755

5.01% 5.77%

for 063.45 % 02.62 760.831 98.75 % .09 70.66

impairm

ent on

the

portfolio

with

charact

eristics

of credit

risk

23976 100.00 12003 22775 64475 100.00 372028 60755

Total 5.01% 5.77%

063.45 % 02.62 760.83 98.75 % .09 70.66

Note: 1 The closing balance of accounts receivable increased by CNY 17528464.70 or 271.86%

compared with the opening balance which was mainly due to the increase in accounts receivable

within the contract period arising from the overseas baijiu sales business.The category name of provision for bad debt by the portfolio: Accounts receivable tested for

impairment on the portfolio with characteristics of credit risk

Unit: CNY

Closing Balance

Name

Book balance Provision for bad debt Proportion

Risk portfolio 23976063.45 1200302.62 5.01%

Including: within 1 year 23961663.42 1198083.17 5.00%

1-2 years 6605.52 660.55 10.00%

2-3 years 7794.51 1558.90 20.00%

Other portfolio

Total 23976063.45 1200302.62

Notes to the determination basis for the portfolio:

Accounts receivable of the same age have similar credit risk characteristics.If adopting the general mode of expected credit loss to withdraw provision for bad debt of accounts

receivable

□ Applicable □ N/A

7.4.3. Provision and recovery for bad and doubtful debt in the current period

Allowance of provision for bad debt:

Unit: CNY

Changes in current period

Type Opening ClosingBalance Allowance Reversal or Balancerecovery Write-off Other

Provision for

bad debt by

individual item

Provision by

372028.09 1086050.02 257775.49 1200302.62

risk portfolio

Total 372028.09 1086050.02 257775.49 1200302.62

7.4.4. Top five entities with the largest balances of accounts receivable and contract assets

Unit: CNY

Closing balance Closing balance Closing balance Proportion to Closing balance

Company name of accounts of contract of accounts total closing of provision for

receivable assets receivable and balance of bad debt

contract assets accounts provision of

receivable and accounts

contract assets receivable and

impairment

allowance of

contract assets

China Duty Free

13932180.13 13932180.13 58.11% 696609.01

International Ltd

Luzhou Jiaxin

Holding

2381000.00 2381000.00 9.93% 119050.00

Management

Co. Ltd.Beijing User

Growth Network

1282562.95 1282562.95 5.35% 64128.15

Technology Co.Ltd.Luzhou Laojiao

1256733.53 1256733.53 5.24% 62836.68

Group Co. Ltd.Alipay (China)

Network

986441.05 986441.05 4.11% 49322.05

Technology Co.Ltd.Total 19838917.66 19838917.66 82.74% 991945.89

7.5. Contract assets

N/A

7.6. Accounts receivable financing

7.6.1. Accounts receivable financing listed by category

Unit: CNY

Item Closing Balance Opening Balance

Bank acceptance bill 1259916564.02 1466494973.96

Total 1259916564.02 1466494973.96

7.6.2. Disclosure by withdrawal methods for bad debts

Unit: CNY

Closing Balance Opening Balance

Book balance Provision for bad Book balance Provision for badType debt Book debt Book

Amount Proporti Proporti valueon Amount on Amount

Proporti

on Amount

Proporti value

on

Including:

Provisio

n 12599 12599 14664 14664

100.00 100.00

allowan 16564. 16564. 94973. 94973.% %

ce by 02 021 96 96

portfolio

Including:

Bank 12599 100.00 12599 14664 100.00 14664

accepta 16564. % 16564. 94973. % 94973.nce bill 02 02 96 96

12599 12599 14664 14664

100.00 100.00

Total 16564. 16564. 94973. 94973.% %

02 02 96 96

Note: 1 The notes receivable under accounts receivable financing comprise bank acceptance and

the Company believes that the bank acceptance it holds does not pose significant credit risks. It does

not anticipate significant losses due to defaults by banks or other drawers therefore no provision for

credit impairment losses has been recognized.The category name of provision for bad debt by the portfolio: Accounts receivable financing tested for

impairment on the portfolio with characteristics of credit risk

Unit: CNY

Closing Balance

Name

Book balance Provision for bad debt Proportion

Risk portfolio 1259916564.02

Total 1259916564.02

Notes to the determination basis for the portfolio:

As bank acceptance has low credit risks no bad debt provision is made.

7.6.3. Accounts receivable financing that have been endorsed to other parties or discounted

by the Company but have not expired at the end of the period

Unit: CNY

Item Derecognized at period-end Not derecognized at period-end

Bank acceptance bill 1 2687306404.10

Total 2687306404.10

Note: 1 Due to the fact that the acceptor of bank acceptance is a commercial bank which is of high

credit level the likelihood of default at the maturity of bank acceptance is low. Therefore the

Company derecognizes bank acceptance that has been endorsed or discounted.

7.6.4. Changes in accounts receivable financing in the reporting period and fair value

Item Opening Balance Increase in current Decrease in currentperiod period Closing Balance

Notes receivable 1466494973.96 4071107657.81 4277686067.75 1259916564.02

Total 1466494973.96 4071107657.81 4277686067.75 1259916564.02

Note: Accounts receivable financing represents bank acceptance with a short remaining maturity.The book value closely aligns with the fair value; hence the book value is used as its fair value.

7.7. Other receivables

Unit: CNY

Item Closing Balance Opening Balance

Dividend receivable 56365904.97

Other receivables 16620665.15 17318326.51

Total 72986570.12 17318326.51

7.7.1. Dividend receivable

7.7.1.1. Classification of dividend receivable

Unit: CNY

Item (investee) Closing Balance Opening Balance

Guotai Haitong Securities Co. Ltd. 4121948.95

Huaxi Securities Co. Ltd. 46108463.34

China Tourism Group Duty Free

494532.68

Corporation Limited

Luzhou Bank Co. Ltd. 5640960.00

Total 56365904.97

7.7.2. Other receivables

7.7.2.1. Other receivables disclosed by nature

Unit: CNY

Nature Closing book balance Opening book balance

Intercompany funds 6417982.97 7185388.51

Petty cash 529250.61 290697.61

Saving deposits involving contract

1 91110008.99 91351645.65disputes

Total 98057242.57 98827731.77

Note: 1 The saving deposits involving contract disputes are three deposits amounting to CNY

500000000.00 with Changsha Yingxin Sub-branch of Agricultural Bank of China and Nanyang

Zhongzhou Sub-branch of Industrial and Commercial Bank of China disclosed by the Company in the

2014 Annual Report. The deposits have lost the nature of monetary fund due to their involvement in

contract disputes and have thus been transferred into “other receivables”. The closing balance of this

account as at the date of the statement was CNY 91110008.99.

7.7.2.2. Disclosure by aging

Unit: CNY

Aging Closing book balance Opening book balance

Within 1 year (including 1 year) 5464761.50 5790939.50

1-2 years 270677.13 485187.10

2-3 years 89643.43 29294.30

Over 3 years 92232160.511 92522310.87

3-4 years 6347.61 6347.61

4-5 years 6880.00

Over 5 years 92225812.90 92509083.26

Total 98057242.57 98827731.77

Note: 1 Other receivables with significant single amount exceeding three years in age relates to

saving deposits of CNY 91110008.99 which are yet to be recovered due to contractual disputes.

7.7.2.3. Disclosure by withdrawal methods for bad debts

□ Applicable □ N/A

Unit: CNY

Closing balance Opening Balance

Provision for bad Provision for bad

Book balance Book balance

Type debt Book debt Book

Proporti Proporti value Proporti Proporti value

Amount Amount Amount Amount

on on on on

Provisio

n for

bad 91110 80000 11110 91351 80000 11351

92.92% 87.81% 92.44% 87.57%

debt by 008.99 000.00 008.99 645.65 000.00 645.65

individu

al item

Including:

Other

receiva

bles

that are

individu

ally

material

and for

which a 91110 80000 11110 91351 80000 11351

92.92% 87.81% 92.44% 87.57%

separat 008.99 000.00 008.99 645.65 000.00 645.65

e

provisio

n for

bad

debts

has

been

made

Provisio

n for

bad 69472 14365 55106 74760 15094 59666

7.08% 20.68% 7.56% 20.19%

debt by 33.58 77.42 56.16 86.12 05.26 80.86

the

portfolio

Including:

Other

receiva

bles

tested

for

impairm

69472 14365 55106 74760 15094 59666

ent on 7.08% 20.68% 7.56% 20.19%

33.58 77.42 56.16 86.12 05.26 80.86

the

portfolio

with

charact

eristics

of credit

risk

98057 100.00 81436 16620 98827 100.00 81509 17318

Total 83.05% 82.48%

242.57 % 577.42 665.15 731.77 % 405.26 326.51

The category name of provision for bad debt by individual item: Other receivables that are individually

material and for which a separate provision for bad debts has been made

Unit: CNY

Opening Balance Closing Balance

Name Provision for Provision for

Book balance Book balance Proportion Reason

bad debt bad debt

Saving

deposits Provision

involving 91351645.65 80000000.00 91110008.99 80000000.00 87.81% based on

contract legal opinion

disputes

Total 91351645.65 80000000.00 91110008.99 80000000.00

The category name of provision for bad debt by the portfolio: Other receivables tested for impairment

on the portfolio with characteristics of credit risk

Unit: CNY

Closing Balance

Name

Book balance Provision for bad debt Proportion

Risk portfolio 6947233.58 1436577.42 20.68%

Including: within 1 year 5464761.50 273238.06 5.00%

1-2 years 270677.13 27067.71 10.00%

2-3 years 89643.43 17928.69 20.00%

3-4 years 6347.61 2539.05 40.00%

4-5 years

Over 5 years 1115803.91 1115803.91 100.00%

Other portfolio

Total 6947233.58 1436577.42

Notes to the determination basis for the portfolio:

Accounts receivable of the same age have similar credit risk characteristics.Provision for bad debt adopting the general mode of expected credit loss:

Unit: CNY

First stage Second stage Third stage

Provision for bad Expected loss in theExpected credit loss Expected loss in the

debt duration (credit

Total

of the next 12 duration (credit

impairment not

months impairment occurred)

occurred)

Balance of January

1509405.26 80000000.00 81509405.26

1 2026

Balance of January

1 2026 in the current

period

Provision of the

62412.00 62412.00

current period

Reversal of the

135239.84 135239.84

current period

Balance of June 30

1436577.42 80000000.00 81436577.42

2026

The basis for the division of each stage and the withdrawal proportion of bad debt provision

The basis for division is that other receivables with single bad debt provision represent credit

impairment losses incurred since initial recognition (Stage 3) while the remaining portion is

categorized based on expected credit risk. Withdrawal proportions of bad debt provision are 20.68%

for Stage 1 and 87.81% for Stage 3 totaling 83.05%.Changes of book balance with significant amount changes of loss provision in the current period

□Applicable □ N/A

7.7.2.4. Provision and recovery for bad and doubtful debt in the current period

Provision for bad debt:

Unit: CNY

Changes in current period

Opening Closing

Type

Balance Reversal or Write-off orProvision Other Balance

recovery verification

Other

receivables

tested for 80000000.00 80000000.00

impairment

individually

Other

receivables

tested for 1509405.26 62412.00 135239.84 1436577.42

impairment by

the portfolio

Total 81509405.26 62412.00 135239.84 81436577.42

7.7.2.5. Top five entities with the largest balances of the other receivables

Unit: CNY

Provisioning

Proportion in

Company Name Nature Closing Balance Aging amount at period

total receivables

end

Saving deposits Saving deposits

involving involving 91110008.99 Over 5 years 92.92% 80000000.00

contract disputes contract disputes

Liu Yuanyuan Petty cash 219282.46 Within 1 year 0.22% 10964.12

Wang Changying Petty cash 190444.00 Within 1 year 0.19% 9522.20

Luzhou

Xingyang

Margin 150000.00 Within 1 year 0.15% 7500.00

Investment

Group Co. Ltd.TOWNE

CENTRE

OFFICES-PI Margin 127347.83 1-2 years 0.13% 12734.78

PROPERTIES

NO 111 LLC

Total 91797083.28 93.61% 80040721.10

7.8. Prepayment

7.8.1. Aging analysis

Unit: CNY

Closing Balance Opening Balance

Aging

Amount Proportion Amount Proportion

Within 1 year 200527088.33 95.95% 132742078.70 91.17%

1-2 years 4469682.62 2.14% 6006743.32 4.13%

2-3 years 2726812.70 1.87%

Over 3 years 4004698.38 1.92% 4120840.93 2.83%

Total 209001469.331 145596475.65

Note: 1 The closing balance of prepayments increased by CNY 63404993.68 or 43.55% compared

with the opening balance which was mainly due to the increase in prepayments to advertising

suppliers.Reasons for significant prepayments whose aging is longer than 1 year without timely settlement:

There was no significant prepayment whose aging is longer than 1 year.

7.8.2. Top five entities with the largest balances of prepayment

Company Name Closing Balance Aging Proportion to the total closing balanceof prepayment

Shanghai Merlot Advertising 82969687.88 Within 1 year 39.70%

Co. Ltd.Tennis Australia 38081264.37 Within 1 year 18.22%

Luzhou Western Gas Co. Ltd. 9126418.47 Within 1 year 4.37%

Tianjin Runzhu Culture Media 7719262.65 Within 1 year 3.69%

Co. Ltd.WTMG 7712792.33 Within 1 year 3.69%

Total 145609425.70 69.67%

7.9.Inventories

Whether the Company needs to comply with the disclosure requirements of real estate industry

No

7.9.1. Categories of Inventories

Unit: CNY

Closing Balance Opening Balance

Provision for Provision for

stock stock

obsolescence obsolescence

Category

Book Balance or impairmentprovision of Book Value Book Balance

or impairment

provision of Book Value

contract contract

performance performance

costs costs

Raw materials 146378500.5 146378500.571146968.62 71146968.62

7 7

Goods in 1295086770 1295086770 1192257725 1192257725

progress 4.831 4.83 4.61 4.61

Finished 2648425264 2648425264 3282202880 3282202880

goods .44 .44 .26 .26

Goods in

transit 10072922.15 10072922.15 44873071.91 44873071.91

1568051286 1568051286 1539603170 1539603170

Total

0.04 0.04 7.35 7.35

Note: 1 The increase in the closing balance of goods in progress was mainly due to the Company’s

promotion of high-quality production capacity reserve and quality improvement plan which increased

the strategic reserve of high-quality base baijiu.The Company shall comply with the disclosure requirements for companies engaging in food & liquor

and wine production of the Guidelines No. 3 of the Shenzhen Stock Exchange on Self-regulation of

Listed Companies—Industry-specific Information Disclosure.

7.9.2. Notes to the closing balance of inventories including capitalized borrowing expense

There was no capitalized borrowing expense in the closing balance of inventories.

7.10. Other current assets

Unit: CNY

Item Closing Balance Opening Balance

VAT to be deducted 275436489.83 344545347.47

Corporate income tax 149952160.45 81820156.01

Other taxes 8919128.73 4094407.15

Total 434307779.01 430459910.63

Other statements:

Note 1: The value-added tax expected to be deducted in the following fiscal period and corporate

income tax and other taxes are disclosed in other current assets.

7.11. Other equity instrument investment

Unit: CNY

Reason

for

Gains Losses Accumulat Accumulat assigning

recorded recorded ive gains ive losses to

in other in other recorded recorded Dividend measure

comprehe comprehe in other in other income in fair

Item Opening comprehe comprehe recognize Closing value ofBalance nsive nsiveincome in income in nsive nsive d in Balance which

the the income in income in current changes

current current the the year included

period period current current otherperiod period comprehe

nsive

income

Financial

assets

assigned

to

measure

in fair

value of

which

changes

included

other

comprehe

nsive

income:

Including:

According

to the

Guotai

mode of

Haitong 2420172 2767594 2016221 4121948. 2143413

managing

Securities 88.33 2.95 88.62 95 45.38

assets by

Co. Ltd.managem

ent layer

According

China

to the

Tourism

mode of

Group 8700100 3653886 1007365 851475.8 5046214

managing

Duty Free 4.56 1.03 51.75 0 3.53

assets by

Corporatio

managem

n Limited

ent layer

According

to the

Luzhou mode of

Bank Co. 8504777 881143.9 3480891 5640960. 8592891 managing

Ltd. 3.27 8 7.25 00 7.25 assets by

managem

ent layer

Guotai According

Junan to the

Investmen mode of

t 2261183 2261183 managing

Managem 4.24 4.24 assets by

ent Co. managem

Ltd. ent layer

According

to the

North mode of

Chemical 2817526 256762.3 2740202

Industries 93813.29 managing1.09 3 3.42

Co. Ltd. assets by

managem

ent layer

According

to the

Guojiu Big mode of

Data Co. 8799784. 1200215. 8799784. managing

Ltd. 78 22 78 assets by

managem

ent layer

Sichuan

China According

Baijiu to the

Golden mode of

Triangle 1846291. 296078.3 5456848. 1542370. managing

Brand 63 7 00 00 assets by

Operation managem

Developm

ent Co. ent layer

Ltd. and

other

equity

instrument

investmen

ts

4754992 1433984. 6421480 2638331 1073936 1070819 3836863

Total

37.90 68 3.98 29.29 14.97 8.04 95.18

Categories of non-trading equity instrument investment in the current period:

Unit: CNY

Reason for

Amount of assigning Reason of

other to measure other

Recognized at fair value

Item dividends Accumulative Accumulative

comprehensiv and comprehensiv

income gains losses

e income e income

transferred to changesrecorded transferred toretained into other retainedearnings comprehen earnings

sive income

According

to the mode

Guotai

of

Haitong

4121948.95 201622188.62 managing

Securities

assets by

Co. Ltd.manageme

nt layer

According

China

to the mode

Tourism

of

Group Duty

851475.80 100736551.75 managing

Free

assets by

Corporation

manageme

Limited

nt layer

According

to the mode

of

Luzhou Bank

Co. Ltd. 5640960.00 34808917.25 managing

assets by

manageme

nt layer

According

to the mode

Guotai Junan of

Investment

Management managing

Co. Ltd. assets by

manageme

nt layer

According

to the mode

North of

Chemical

Industries Co. 93813.29 27402023.42 27402023.42 managing Disposal in full

Ltd. assets by

manageme

nt layer

Guojiu Big

Data Co. Ltd. 1200215.22 According

to the mode

of

managing

assets by

manageme

nt layer

Sichuan

China Baijiu

Golden According

Triangle to the mode

Brand of

Operation Partial5456848.00 97152.00 managing

Development disposalassets by

Co. Ltd. and manageme

other equity

instrument nt layer

investments

Total 10708198.04 263833129.29 107393614.97 27499175.42

7.12. Long-term equity investments

Unit: CNY

Changes in current period

Openi Gain Adjust Closin

Openi ng or ments Closin g

ng Balan loss of Cash g Balan

Invest Balan ce of recog other Other divide Provis Balan ce of

ee ce provisi Increa Decre

se ase nized compr

chang d or ion for ce provisi

(book on for under ehens es in profit impair

Other

(book on for

value) impair equity ive equity declar ment value) impair

ment metho incom ed ment

d e

1. Joint Ventures

2. Associate

Huaxi

Securi 2742 2567 1009 2753 4610 2800 2567

ties 7483 098.8 8461 109.9 8463. 3775 098.8

Co. 22.26 0 9.36 2 34 88.20 0

Ltd.Luzho

u

Laojia

o

Postd

octora

l 3681 - 3649

Works 3478. 3158 7678.tation 55 00.34 21

Techn

ology

Innov

ation

Co.Ltd.Sichu

an

Devel 5920 5920

opme

nt 824.9 824.9

Liquor 0 0

Invest

ment

Co.Ltd.CTS

Luzho

u

Laojia

o

Cultur 1247 - 1246

al

Touris 3692 7176 6515

m 6.91 9.30 7.61

Devel

opme

nt

Co.Ltd.Sichu

an

Tianfu

Grana 1242 1279

ry 3748

Liquor 3283. 8101.17.93

Indust 17 10

ry

Co.Ltd.Sichu

an

Tongn

iang

Baijiu

Indust

ry 8161 - 8133

Techn 633.9 2811 519.5

ology 8 4.41 7

Resea

rch

Institu

te

Co.Ltd.

2930 2567 1009 2753 4610 2988 2567

Subtot

al 8044 098.8 4375 109.9 8463. 3928 098.8

69.77 0 3.24 2 34 69.59 0

2930 2567 1009 2753 4610 2988 2567

Total 8044 098.8 4375 109.9 8463. 3928 098.8

69.77 0 3.24 2 34 69.59 0

The recoverable amount is determined based on the net amount of the fair value minus disposal

costs

□ Applicable □ N/A

The recoverable amount is determined by the present value of the forecasted future cash flow

□ Applicable □ N/A

7.13. Investment property

7.13.1. Investment property with cost measurement model

□ Applicable □ N/A

Unit: CNY

Item Buildings and Construction inconstructions Land use right progress Total

I. Original cost:

1. Opening balance 79610430.07 12767067.71 92377497.78

2. Increase in current

period

(1) External

purchase

(2) Transfer from

inventories/fixed

assets/construction

in progress

(3) Increase from

business

combination

3. Decrease in

current period

(1) Disposal

(2) Other transfer out

4. Closing Balance 79610430.07 12767067.71 92377497.78

II. Accumulated

depreciation and

amortization

1. Opening Balance 39022630.92 5462115.78 44484746.70

2. Increase in current

period 1061912.70 115058.85 1176971.55

(1) Provision or

amortization 1061912.70 115058.85 1176971.55

3. Decrease in

current period

(1) Disposal

(2) Other transfer out

4. Closing Balance 40084543.62 5577174.63 45661718.25

III. Provision for

impairment

1. Opening Balance

2. Increase in current

period

(1) Provision

3.Decrease in

current period

(1) Disposal

(2) Other transfer out

4. Closing Balance

IV. Book Value

1. Closing Book

Value 39525886.45 7189893.08 46715779.53

2. Opening Book

Value 40587799.15 7304951.93 47892751.08

The recoverable amount is determined based on the net amount of the fair value minus disposal

costs

□ Applicable □ N/A

The recoverable amount is determined by the present value of the forecasted future cash flow

□ Applicable □ N/A

7.13.2. Investment property without certification of right

Unit: CNY

Item Book value Reason for not having thecertification of right

Buildings of the Company 13386575.79 In procedure

7.14. Fixed assets

Unit: CNY

Item Closing Balance Opening Balance

Fixed assets 8228387088.95 8523544338.21

Disposal of fixed assets 469732.38 347065.82

Total 8228856821.33 8523891404.03

7.14.1. Details of fixed assets

Unit: CNY

Buildings and Specialized General Transportation Other

Item

constructions equipment equipment

Total

equipment equipment

I. Original

cost:

1. Opening 8035356075 1461995793 1352247738 1973273479 1286139219

balance 38519108.71.13 .71 .89 .94 6.38

2. Increase in

current period 16890325.22 1277170.47 22759233.76 139457.89 -2201817.45 38864369.89

(1) External

purchase 734261.62 1403331.38 102800.00 2240393.00

(2) Transfer

from

construction in 14191964.75 19471957.50 76468.14 33740390.39

progress

(3) Increase

from business

combination

(4) Changes

of exchange -18666.38 -18666.38

rates

(5) Adjustment

for completion 2698360.47 542908.85 1902611.26 36657.89 -2278285.59 2902252.88

settlement

3. Decrease in

current period 5733616.15 2906985.32 1238870.00 559048.20 1775298.95 12213818.62

(1) Disposal

or retirement 5733616.15 2906985.32 1238870.00 559048.20 1775298.95 12213818.62

4. Closing 8046512784 1460365978 1373768102 1969296363 1288804274

Balance 38099518.40.20 .86 .65 .54 7.65

II.Accumulated

depreciation

1. Opening 1605316902 897621521.6 814397980.6 993306470.2 4337847858

Balance 27204983.06.63 7 0 1 .17

2. Increase in 131875811.6 333145874.9

current period 75669192.31 74922663.07 1668385.40 49009822.498 5

(1) Provision 131875811.6 333156176.375669192.31 74932964.42 1668385.40 49009822.49

8 0

(2) Changes

of exchange -10301.35 -10301.35

rates

3. Decrease in

current period 5292906.74 2761270.68 1071688.73 529836.08 1682372.19 11338074.42

(1) Disposal

or retirement 5292906.74 2761270.68 1071688.73 529836.08 1682372.19 11338074.42

4. Closing 1731899807 970529443.3 888248954.9 1040633920 4659655658

Balance 28343532.38.57 0 4 .51 .70

III. Provision

for impairment

1. Opening

Balance

2. Increase in

current period

(1) Provision

3. Decrease in

current period

(1) Disposal

or retirement

4. Closing

Balance

IV. Book Value

1. Closing 6314612976 489836535.5 485519147.7 928662443.0 8228387088

Book Value 9755986.02.63 6 1 3 .95

2. Opening 6430039172 564374272.0 537849758.2 979967009.7 8523544338

Book Value 11314125.65.50 4 9 3 .21

7.14.2. Fixed assets leased out through operating lease

Unit: CNY

Item Closing book value

Buildings and constructions 24427734.47

Equipment 3343077.71

Total 27770812.18

7.14.3. Fixed assets without certification of right

Unit: CNY

Item Book value Reason for not having thecertification of right

The property ownership certificate

has not been processed yet for the

Buildings of the Company 20978652.04 historical reasons and it plans to be

processed after gradually improving

procedures.Buildings of the Company 17424464.01 In procedure

Buildings of the subsidiary - Baijiu

Production Company 4263631462.37 In procedure

Total 4302034578.42

7.14.4. Disposal of fixed assets

Unit: CNY

Item Closing Balance Opening Balance

Disposal and retirement of assets 469732.38 347065.82

Total 469732.38 347065.82

7.15. Construction in progress

Unit: CNY

Item Closing Balance Opening Balance

Construction in progress 2440184560.92 2064766283.24

Total 2440184560.92 2064766283.24

7.15.1. Details of the construction in progress

Unit: CNY

Closing Balance Opening Balance

Item

Book balance Provision for Provision forimpairment Book value Book balance impairment Book value

Technical

renovation of

Luzhou

Laojiao 27871162.79 27871162.79 38517842.44 38517842.44

Intelligent

packaging

center

Luzhou

Laojiao

Technical

Renovation 1752065187 1752065187 1502441499 1502441499

Project of .00 .00 .75 .75

Intelligent

Baijiu

Production (I)

Project of

Luzhou

Laojiao's

Flexible 62904656.59 62904656.59 62641666.13 62641666.13

Intelligent

Filling Pilot

Line

Construction

Project of

Luzhou

Laojiao's

Strong Aroma 84927606.88 84927606.88 78823440.76 78823440.76

Baijiu

Experience

Marketing

Centre

The

expansion

and

renovation 83917258.04 83917258.04 79087098.28 79087098.28

project of the

office area of

Luzhou

Laojiao

Marketing

Network

Command

Center-Staff

Home

Luzhou

Laojiao

Historical and

Cultural 158841849.1 158841849.1 120613219.6 120613219.6

Industry Park 0 0 0 0

and National

Baijiu

Museum

Sichuan

Luzhou Baijiu

Industrial Park

(Huangyi) 86824918.70 86824918.70 32477850.05 32477850.05

Cogeneration

Expansion

Project (I)

182831921.8 182831921.8 150163666.2 150163666.2

Other projects

2 2 3 3

2440184560 2440184560 2064766283 2064766283

Total.92 .92 .24 .24

7.15.2. Significant changes in construction in progress

Unit: CNY

Propo

rtion

of Accu Includi

Openi Increa

ng: Capita

se in Transf Other Closin

accu mulati Capita lizatio

Item Budge ng

mulati Progr ve Sourc

t Balan curren

er into

fixed decre

g

Balan ve ess capital

lized n rate

intere for the e of

ce tperiod assets

ases ce projec (%) izedt input intere st for period

funds

in st the (%)

budge period

t

Luzho

u

Laojia

o

Techn

ical

Renov

4782 1502 2584 8847 1752 6301 6301

ation 52.00 70.00

5090 4414 7163 949.2 0651 015.7 015.7 2.51% Other

Projec % %

00.00 99.75 6.45 01 87.00 1 1

t of

Intellig

ent

Baijiu

Produ

ction

(I)

Sichu 2524 3247 5434 8682 38.00 40.00 Other

an 3000 7850. 7068. 4918. % %

Luzho 0.00 05 65 70

u

Baijiu

Indust

rial

Park

(Huan

gyi)

Coge

nerati

on

Expan

sion

Projec

t (I)

5034 1534 3128 8847 1838 6301 6301

Total 9390 9193 1870 949.2 8901 015.7 015.7

00.00 49.80 5.10 0 05.70 1 1

Note: 1 Other decreases were attributable to the transfer of land with title certificates acquired during

the current year to intangible assets for presentation.

7.15.3. Impairment test of construction in progress

□ Applicable □ N/A

7.16. Right-of-use assets

7.16.1. Details of right-of-use assets

Unit: CNY

Item Land use right Buildings and constructions Total

I. Original cost

1. Opening Balance 30788322.41 21901936.79 52690259.20

2. Increase in current

period -958902.90 -958902.90

(1) Changes of exchange

-958902.90 -958902.90

rates

3. Decrease in current

period

4. Closing Balance 30788322.41 20943033.89 51731356.30

II. Accumulated

depreciation

1. Opening Balance 17123194.63 15703850.38 32827045.01

2. Increase in current

period 1708140.97 1732279.13 3440420.10

(1) Provision 1708140.97 2511183.55 4219324.52

(2) Changes of exchange

rates -778904.42 -778904.42

3. Decrease in current

period

(1) Disposal

4. Closing Balance 18831335.60 17436129.51 36267465.11

III. Provision for impairment

1. Opening Balance

2. Increase in current

period

(1) Provision

3. Decrease in current

period

(1) Disposal

4. Closing Balance

IV. Book Value

1. Closing Book Value 11956986.81 3506904.38 15463891.19

2. Opening Book Value 13665127.78 6198086.41 19863214.19

7.16.2. Impairment test of right-of-use assets

□ Applicable □ N/A

7.17. Intangible assets

7.17.1. Details of intangible assets

Unit: CNY

Item Land use

No-patent

right Patent right right

Computer Trademark Data

technology software right

Total

resources

I. Original

cost

1. Opening 38219148 1700050.4 15453302 2118716.0 4284917.7 39845515

Balance 21.27 4 0.45 9 1 25.96

2. Increase

in current 9038499.2 4586708.9 13625208.period 0 7 17

(1) Acquired 190550.00 190550.00

(2)

Internally

developed

(3)

Business

combination

(4)

Transferred

from 8847949.2 4586708.9 13434658.construction 0 7 17

in progress

3. Decrease

in current

period

(1) Disposal

4. Closing 38309533 1700050.4 15911972 2118716.0 4284917.7 39981767

Balance 20.47 4 9.42 9 1 34.13

II.Accumulate

d

amortization

1. Opening 50541601 1220624.2 60523490. 1897554.7 1428305.9 57048599

Balance 5.89 2 10 3 1 0.85

2. Increase 43986174. 65002.52 7096129.3 450.08 714152.95 51861909.

in current 24 9 18

period

(1) 43986174. 7096129.3 51861909.

Provision 65002.52 450.08 714152.9524 9 18

3. Decrease

in current

period

(1) Disposal

4. Closing 54940219 1285626.7 67619619. 1898004.8 2142458.8 62234790

Balance 0.13 4 49 1 6 0.03

III.Provision

for

impairment

1. Opening

Balance

2. Increase

in current

period

(1)

Provision

3. Decrease

in current

period

(1) Disposal

4. Closing

Balance

IV. Book

Value

1. Closing 32815511 91500109. 2142458.8 33758288

Book Value 414423.70 220711.2830.34 93 5 34.10

2. Opening 33164988 94009530. 2856611.8 34140655

Book Value 479426.22 221161.3605.38 35 0 35.11

The proportion of intangible assets formed by internal development to the balance of intangible

assets at the period-end was 0.06%.

7.17.2. Data resources recognized as intangible assets

Unit: CNY

Data resources

Purchased data Self-developed data

intangible assets

Item resources intangible resources intangible Total

acquired through

assets assets

other means

I. Original cost

1. Opening Balance 4284917.71 4284917.71

4. Closing Balance 4284917.71 4284917.71

II. Accumulated

amortization

1. Opening Balance 1428305.91 1428305.91

2. Increase in current

period 714152.95 714152.95

4. Closing Balance 2142458.86 2142458.86

III. Provision for

impairment

IV. Book Value

1. Closing Book 2142458.85 2142458.85

Value

2. Opening Book

Value 2856611.80 2856611.80

Note: The data resources recognized as intangible assets by the Company primarily consisted of data

resources such as those used for digital marketing. Based on the estimated effective period during

which these data assets supported the Company’s marketing efforts their useful life was determined

to be three years and they were amortized using the straight-line method.

7.17.3. Land use right without certification of right

Other statements:

There was no land use right without certification of right at the period-end.

7.18. Long-term deferred expense

Unit: CNY

Item Opening Balance Increase Amortization Other decrease Closing Balance

Improvement

expense of

1034985.48 156191.66 37747.161 841046.66

rented fixed

assets

Total 1034985.48 156191.66 37747.16 841046.66

Note: 1 Other decrease was generated from changes of exchange rates.

7.19. Deferred tax assets/ deferred tax liabilities

7.19.1. Deferred tax assets before offset

Unit: CNY

Closing Balance Opening Balance

Item Deductible temporary Deductible temporary

differences Deferred tax assets differences Deferred tax assets

Provision for asset

impairment 85202288.03 21143217.25 84433379.21 20998267.09

Unrealized profits

from internal 263033305.56 65758326.39 310370130.36 77592532.59

transactions

Impact from salary 336259052.29 82997235.34 425943121.57 104988703.13

Impact from deferred

earnings 87011078.05 21752769.52 82513945.77 20628486.45

Impact from fixed

assets depreciation 1641885.81 447274.77 1581273.36 460226.55

Recognition costs of

restricted shares for

equity incentive in 49219427.74 12099077.25

the vesting period

Impact from fair

value changes of

other equity 124915963.48 31228990.88 88576028.89 22144007.22

instrument

investment

Impact of income tax

from fair value

changes of held-for- 8277727.32 2069431.83 19338314.36 4834578.59

trading financial

assets

Impact of income tax

from initial

recognition of lease 984990.64 182292.52 1410905.51 274102.06

liabilities

Total 907326291.18 225579538.50 1063386526.77 264019980.93

7.19.2. Deferred tax liabilities before offset

Unit: CNY

Closing Balance Opening Balance

Item Taxable temporary Deferred tax Taxable temporary Deferred tax

differences liabilities differences liabilities

Fair value changes

of other equity

instrument 236431105.82 59107776.41 290371165.72 72592791.43

investment

Fair value changes

of held-for-trading 21493694.72 5373423.68 4110273.60 1027568.40

financial assets

Impact from the

policy of one-time

pre-tax deduction of 349284088.11 85273290.68 398337577.12 97270705.50

fixed assets

Impact of income tax

from initial

recognition of right- 793610.13 158084.88 1438051.88 288957.09

of-use assets

Total 608002498.78 149912575.65 694257068.32 171180022.42

7.19.3. Details of unrecognized deferred tax assets

Unit: CNY

Item Closing Balance Opening Balance

Deductible losses 364678442.86 395438064.93

Credit impairment losses and asset

1690.81 2008.37

impairment provision

Employee benefits payable 11511426.76 15500688.36

Total 376191560.43 410940761.66

7.19.4. Deductible losses from unrecognized deferred tax assets will be due in the following

years

Unit: CNY

Year Closing Amount Opening Amount Notes

2026 8417566.87 8417566.87

2027 42092277.59 41945012.30

2028 171205573.70 170459479.62

2029 64600649.70 62422108.88

2030 78362375.00 112193897.26

Total 364678442.86 395438064.93

7.20. Other non-current assets

Unit: CNY

Closing Balance Opening Balance

Item

Book balance Provision forimpairment Book value Book balance

Provision for

impairment Book value

Prepayment

for

engineering 135746005.0 135746005.0 148103387.7 148103387.7

and 1 1 4 4

equipment

Prepayment

for long-term 861229965.5 861229965.5 516737979.3 516737979.3

assets 0 0 0 0

996975970.5 996975970.5 664841367.0 664841367.0

Total

1 1 4 4

Other statements:

Note 1: The prepayment for long-term assets was the corresponding advance payment for the

progress of the Chengdu Innovation and Development Center Building customized and constructed

by the Company.Note 2: The closing balance of other non-current assets increased by CNY 332134603.47 or

49.96% compared with the opening balance which was mainly due to the increase in payment for

long-term assets.

7.21. Assets with restricted ownership or use rights

Unit: CNY

Period-end Period-beginning

Item Book Book Type of Status of Book Book Type of Status of

balance value restriction restriction balance value restriction restriction

Provision Provision

Cash and

Fixed for fixed Fixed for fixedcash 4298220 4298220 deposit deposit 3938346 3938346 deposit deposit

equivalent 94.48 94.48 interest interest on 14.88 14.88an accrual interest

interest on

s an accrual

basis basis

Administer Administer

Co- ed in ed in

managem accordanc

Co-

managem accordanc

Cash and ent e with the ent e with the

cash 1000669 1000669 account measuresfor the 1000005 1000005 account

measures

equivalent 9.34 9.34 with

for the

restriction administra

3.87 3.87 with

s tion of restriction

administra

s on s on tion of

payments special payments specialfund for fund for

projects projects

Cash and E- E-

cash 1059436. 1059436. commerce 1404495. 1404495. commerce

Margin Margin

equivalent 66 66 platform 57 57 platform

s margin margin

Cash and Deposits

200000.0 200000.0

cash Margin for travel

0 0

equivalent services

s

Cash and Other Other Other Other

cash business business business business

10000.00 10000.00 10000.00 10000.00

equivalent - related - related - related - related

s freeze freeze freeze freeze

Cash and

cash 1002357 1002357 Bank cashMargin deposits

equivalent 2.23 2.23 for L/G

s

Cash and

cash 1200000. 1200000. Litigation Frozen

equivalent 00 00 freeze

fund by

the court

s

4410982 4410982 4164727 4164727

Total

30.48 30.48 36.55 36.55

7.22. Short-term loans

7.22.1. Short-term loans

Unit: CNY

Item Closing Balance Opening Balance

Credit loans 3000000000.001

Add: Interest payable on short-term

1758333.34

loans

Total 3001758333.34

Note: 1 The closing balance of short-term loans increased by CNY 3001758333.34 compared with

the opening balance which was mainly due to the draw-down of one-year bank loans based on the

Company’s production and operation needs.

7.23. Accounts payable

7.23.1. Presentation of accounts payable

Unit: CNY

Item Closing Balance Opening Balance

Engineering equipment expense 795177612.46 742420293.37

Materials and service expense 485730121.93 671000882.43

Total 1280907734.39 1413421175.80

7.23.2. Significant accounts payable whose aging is longer than 1 year or overdue

Unit: CNY

Item Closing Balance Reason for non-payment or carrying

forward

China Construction First Group Project payment within the contract

317879078.16

Corporation Limited settlement period

China Second Metallurgy Group Co. Project payment within the contract

131967754.49

Ltd. settlement period

Luzhou Branch of Zhongqi Project payment within the contract

21826780.23

Construction Group Huamao Co. settlement period

Ltd.China Fifth Metallurgy Group Co. Project payment within the contract

15390638.64

Ltd. settlement period

Focus Intelligent Media Advertising Advertising expenses within the

14000000.00

Co. Ltd. contract settlement period

Total 501064251.52

7.24. Other payables

Unit: CNY

Item Closing Balance Opening Balance

Dividend payable 6529731370.41 28163719.84

Other payables 416800437.68 587589747.04

Total 6946531808.09 615753466.88

7.24.1. Dividend payable

Unit: CNY

Item Closing Balance Opening Balance

Ordinary share dividends 6500999167.03

Restricted share dividends 568483.54

Dividend payable to minority

shareholders of the Company’s 28163719.84 28163719.84

subsidiary

Total 6529731370.41 28163719.84

7.24.2. Other payables

7.24.2.1. Categories by nature

Unit: CNY

Item Closing Balance Opening Balance

Security deposit 355102246.54 383977398.34

Intercompany funds 28856495.41 22227075.32

Repurchase obligations of restricted

shares 8809971.76 159634274.47

Others 24031723.97 21750998.91

Total 416800437.68 587589747.04

7.24.2.2. Significant other payables whose aging are longer than 1 year or overdue

Unit: CNY

Item Closing Balance Reason for not payment or carrying

forward

Within the contract performance

Security deposits from suppliers 28814688.24

period

Within the contract performance

Security deposits from dealers 25941046.77

period

Total 54755735.01

Other statements:

Note: The closing balance of other payables increased by CNY 6330778341.21 or 1028.14%

compared with the opening balance which was mainly due to the declaration of dividends by the

Company for the current period.

7.25. Advances from customers

7.25.1. Presentation of advances from customers

Unit: CNY

Item Closing Balance Opening Balance

Advance rent receipts 1094194.82 2014696.36

Total 1094194.82 2014696.36

7.26. Contract liabilities

Unit: CNY

Item Closing Balance Opening Balance

Payment for goods 2437295608.51 3367443727.83

Total 2437295608.51 3367443727.83

The Company shall comply with the disclosure requirements for companies engaging in food & liquor

and wine production of the Guidelines No. 3 of the Shenzhen Stock Exchange on Self-regulation of

Listed Companies—Industry-specific Information Disclosure.Note: The total amount of the top five companies in contract liabilities was CNY 1032612188.41

accounting for 42.37%.

7.27. Employee benefits payable

7.27.1. Employee benefits payable shown as follows

Unit: CNY

Item Opening Balance Increase in current Decrease in currentperiod period Closing Balance

1. Short-term

benefits 460214456.28 547738665.74 642382134.54 365570987.48

2. Post-employment

benefits- defined 21507924.08 97923343.83 91165244.09 28266023.82

contribution plans

3. Termination

benefits 1207954.32 1207954.32

Total 481722380.36 646869963.89 734755332.95 393837011.30

7.27.2. Short-term employee benefits payable shown as follows

Unit: CNY

Item Opening Balance Increase in current Decrease in currentperiod period Closing Balance

1. Wages bonuses

allowances and 415165490.73 435137071.60 537701045.91 312601516.42

grants

2. Employees’

welfare 8022177.17 8022177.17

3. Social insurance

premiums 4754037.74 46685023.99 44536122.94 6902938.79

Including:

Medical insurance 2795431.46 42966242.62 41861092.84 3900581.24

premium

Work-related injury

insurance 1958606.28 2286793.80 1267136.78 2978263.30

Other insurance

1431987.57 1407893.32 24094.25

premiums

4. Housing funds 6897191.16 46688459.94 43353071.64 10232579.46

5. Labor union

expenditures and

employee education 33397736.65 11205933.04 8769716.88 35833952.81

funds

Total 460214456.28 547738665.74 642382134.54 365570987.48

7.27.3. Defined contribution plan shown as follows

Unit: CNY

Item Opening Balance Increase in current Decrease in currentperiod period Closing Balance

1. Basic endowment

insurance premium 12011473.28 60981169.32 56667590.08 16325052.52

2. Unemployment

insurance premium 261151.85 2286793.80 2139051.56 408894.09

3. Enterprise annuity 9235298.95 34655380.71 32358602.45 11532077.21

Total 21507924.08 97923343.83 91165244.09 28266023.82

7.28. Taxes payable

Unit: CNY

Item Closing Balance Opening Balance

Value-added tax 56138950.07 276075582.62

Consumption tax 240188345.38 735986504.12

Enterprise income tax 125032017.16 464627315.26

Individual income tax 4842597.34 9944022.89

Urban maintenance and construction

tax 19739590.64 70393445.36

Education surcharge 8667440.80 30116997.43

Local education surcharge 5886727.53 20186006.39

Stamp duty 3156391.91 5209309.95

Others 306965.86 344885.79

Total 463959026.69 1612884069.81

Other statements:

Note: The closing balance of taxes payable decreased by CNY 1148925043.12 or 71.23%

compared with the opening balance which was mainly due to the payment of taxes payable from the

previous year during the current period.

7.29. Non-current liabilities due within one year

Unit: CNY

Item Closing Balance Opening Balance

Long-term loans due within one year 1508700000.00 4060900000.00

Lease liabilities due within one year 7689071.11 9584667.93

Interest of long-term loans due within

one year 1748151.38 3714545.12

Total 1518137222.49 4074199213.05

Other statements:

Note: The closing balance of non-current liabilities due within one year decreased by CNY

2556061990.56 or 62.74% compared with the opening balance which was mainly due to the

repayment of maturing loans.

7.30. Other current liabilities

Unit: CNY

Item Closing Balance Opening Balance

Output VAT to be transferred 316173918.11 436920270.99

Total 316173918.11 436920270.99

7.31. Long-term loans

7.31.1. Long-term loans

Unit: CNY

Item Closing Balance Opening Balance

Credit loans 3340059966.73 6688066310.93

Less: Long-term loans due within one

year -1508700000.00 -4060900000.00

Total 1831359966.73 2627166310.93

Other statements including interest rate range:

Loan prime rate (LPR) - corresponding basic points (BP) for 1-year/5-year and above loan terms.The closing balance of long-term loans decreased by CNY 795806344.20 or 30.29% compared with

the opening balance which was mainly due to the reclassification of long-term loans due within one

year.

7.32. Lease liabilities

Unit: CNY

Item Closing Balance Opening Balance

Lease payment 24764441.61 28581944.08

Less: unrecognized financing cost -2717256.70 -3304085.54

Lease liabilities due within one year -7689071.11 -9584667.93

Total 14358113.80 15693190.61

7.33. Deferred income

Unit: CNY

Item Opening Balance Increase in Decrease incurrent period current period Closing Balance Reason

Reception of

Government

82513945.77 17034000.00 12536867.72 87011078.05 financial

grants

allocation

Total 82513945.77 17034000.00 12536867.72 87011078.05

Other statements:

Non-

opera

ting Cost Relatereducti d to

Item Opening Increase in

inco Other income Other

Balance current period me in in current

on in decre Closing assets

curre period curren ase Balance /

nt t incom

perio period e

d

Technologic

al

transformatio

n project of Relate

Luzhou 53979713.60 17034000.00 7296598.67 63717114.93 d to

Laojiao assets

Intelligent

Packing

Center

Digital

upgrade

project of

supply chain

management Relate

for Luzhou 10374707.70 1324430.76 9050276.94 d to

Laojiao assets

Intelligent

Packing

Center

Cogeneratio Relate

n Expansion 10000000.00 333333.34 9666666.66 d to

Project (I) assets

Improvement

and

technical

renovation Relate

project of 3626681.81 946090.92 2680590.89 d to

Luzhou assets

Laojiao

production

supporting

Boiler

reconstructio

n project of

Luohan Relate

Baijiu 2528571.47 632142.84 1896428.63 d to

Production assets

Base of

Luzhou

Laojiao

Distillation

wastewater Relate

treatment 857142.85 857142.85 d to

project assets

Non-

opera

ting Cost Relatereducti

Opening Increase in inco Other income on in Other

d to

Item me in in current Closing assetsBalance current period curre period curren

decre

ase Balance /

nt t incom

perio period e

d

Construction

project of

liquor room

of Luzhou Relate

Laojiao baijiu 671428.55 671428.55 d to

production assets

technical

renovation

New mode

application

project of

digital Relate

workshop for 388373.80 388373.80 d to

solid state assets

baijiu

production

Luzhou

Laojiao

automatic

baijiu Relate

production 87325.99 87325.99 d to

line technical assets

renovation

project

Total 82513945.77 17034000.00 12536867.72 87011078.05

7.34. Share capital

Unit: CNY

Increases/decreases in the current period (+ -)

Opening Conversion Closing

Balance Issuance of Bonus of reserve

shares fund into Others Subtotal

Balance

new shares

shares

Total

14719419 1 14719014number of -40500.00 -40500.00

63.00 63.00

shares

Note: 1 In H1 2026 among the awardees of the Company’s 2021 Restricted Share Incentive Plan

(Draft) six of them no longer met the incentive conditions due to job transfer resignation or other

reasons. According to the relevant provisions of the incentive plan a total of 40500 restricted shares

that have been granted to the above-mentioned awardees but have not yet been released from

restrictions will be repurchased and retired by the Company.

7.35. Capital reserves

Unit: CNY

Item Opening Balance Increase in current Decrease in currentperiod period Closing Balance

Share premium 4947299049.29 298597087.26 3714255.00 5242181881.55

(capital premium)

Other capital

reserves 492029053.24 5100394.04 298597087.26 198532360.02

Total 5439328102.53 303697481.30 302311342.26 5440714241.57

Other statements including increase/decrease and reasons thereof:

Note: The share premium increased for the current period because some restricted shares granted

have been released from restrictions upon maturity.

7.36. Treasury shares

Unit: CNY

Item Opening Balance Increase in current Decrease in currentperiod period Closing Balance

Perform the

repurchase

159634274.47 817168.50 151641471.21 8809971.76

obligations under the

equity incentive

Total 159634274.47 817168.50 151641471.21 8809971.76

Other statements including notes to increase and decrease during the reporting period and the

reasons for changes:

Note 1: Due to the repurchase and retirement of restricted shares that had been granted but not yet

released from lock-up the related cash dividends distributed were reversed resulting in an increase

in treasury shares of CNY 817168.50.Note 2: The closing balance of treasury shares decreased by CNY 150824302.71 or 94.48%

compared with the opening balance which was mainly due to the release of certain restricted shares

upon expiry and the repurchase and retirement of restricted shares.

7.37. Other comprehensive income

Unit: CNY

Current Period

Less: Less:

Previously Previously

Amount in recognize recognize Amount Amount

Opening current d in other

d in other attributabl attributabl

Item ClosingBalance period comprehe

comprehe Less: e to e to non-

before nsive nsive Income controlling

Balance

parent

income income income tax company sharehold

tax transferre transferre ers after

d to profit d to

after tax tax

and loss retainedearnings

I. Other

comprehe

nsive

income - -

that will 1520878 2749521 8016553

not be 4442709 719223150.47 5.31 6.56

reclassifie 8.60 3.91

d into

profit and

loss

Other 791497.5 - -3960.11 - -

comprehe 6 4216277. 4212317. 3420820.nsive 98 87 31

income

that will

not be

reclassifie

d into

profit and

loss under

equity

method

Fair value

changes

of other - -

equity 1512963 2749917 83586354021082 6770999

instrument 52.91 5.42 6.870.62 6.04

investmen

t

II. Other

comprehe

nsive

income - - -

that will be 3759504. 5204181.8458996. 1444677. 3254815.reclassifie 67 9095 23 05

d into

profit and

loss

Including:

Other

comprehe

nsive

income - -

that will be 6969387. 6969387.reclassifie 1117697 4207585.90 90

d into 3.33 43

profit and

loss under

equity

method

Difference

from

conversio

n of - - -

financial 2717976. 952770.33209883. 1765206. 1444677.statement 38 823 00 23

s in

foreign

currency

- - -

Total 1436288 2749521 76910724066759 6671813 1444677.

53.52 5.31 1.51

3.93 2.01 23

Other statements including the adjustment of the effective gain/loss on cash flow hedges to the initial

recognized amount:

Note: The closing balance of other comprehensive income decreased by CNY 66718132.01 or

46.45% compared with the opening balance which was mainly due to the decline in the fair value of

equity investments during the period and the disposal of equity interests in North Chemical Industries

Co. Ltd. among others.

7.38. Surplus reserves

Unit: CNY

Item Opening Balance Increase in current Decrease in currentperiod period Closing Balance

Statutory surplus

1471941963.00 1471941963.00

reserves

Total 1471941963.00 1471941963.00

7.39. Undistributed profits

Unit: CNY

Item Current Period Previous Period

Undistributed profit before

adjustment at the end of the last year 41413087028.16 39340298309.42

Undistributed profit after adjustment

at the beginning of year 41413087028.16 39340298309.42

Plus: Net profit attributable to owners

of the parent company for the current 4339264086.33 7662907812.98

period

Ordinary share dividends

8500464836.32 8758111442.85

payable

Other internal transfers within equity 817168.501

Other transfer in 27495215.31 789.51

Undistributed profits at the end of the

period 37280198661.98 38245095469.06

Note: 1 For the current period a total of 40500 restricted shares that had been granted but not yet

released from lock-up were repurchased and canceled. The reversal of the corresponding dividends

distributed resulted in an increase in treasury shares of CNY 817168.50 and an increase in

undistributed profits of CNY 817168.50.

7.40. Operating revenue and cost of sales

Unit: CNY

Current Period Previous Period

Item

Revenue Cost of sales Revenue Cost of sales

Primary business 10410016749.82 1506781259.71 16344514364.43 2078404503.02

Other business 62207825.96 27873335.06 109218540.22 45715982.82

Total 10472224575.781 1534654594.77 16453732904.65 2124120485.84

Note: 1 The operating revenue for the current period decreased by CNY 5981508328.87 or 36.35%

compared with the same period of last year which was mainly due to a decrease in product sales

volume during the period.Details:

Unit: CNY

Current Period Total

Contract category

Operating revenue Cost of sales Operating revenue Cost of sales

Commodity type

Including:

Medium and high

9200048584.14 851976322.23 9200048584.14 851976322.23

grade baijiu

Other baijiu 1211013642.41 656329024.71 1211013642.41 656329024.71

Other revenue 61162349.23 26349247.83 61162349.23 26349247.83

By operating

segment

Including:

Domestic 10358943401.07 1516376481.25 10358943401.07 1516376481.25

Outbound 113281174.71 18278113.52 113281174.71 18278113.52

Market or customer

type

Including:

Contract type

Including:

Recognize revenue

at point in time 10447990791.76 1513617511.53 10447990791.76 1513617511.53

Recognize revenue

by time period 24233784.02 21037083.24 24233784.02 21037083.24

By commodity

transfer time

Including:

By contract term

Including:

By sales channel

Including:

Total 10472224575.78 1534654594.77 10472224575.78 1534654594.77

Other statements:

Note 1: The classification standard for Medium and high grade baijiu of the Company is any product

with a selling price including VAT of CNY 150 or more per bottle. Representative product categories

include National Cellar 1573 Luzhou Laojiao Tequ and Century-old Luzhou Laojiao Jiaoling Baijiu.“Other baijiu” is defined as any product with a selling price including VAT of less than CNY 150 per

bottle.Note 2: The Company's main business is the production and sale of baijiu. Revenue is recognized at

the point when the Company transfers control of the relevant goods to the customer and fulfills its

performance obligations.Information in relation to the transaction price apportioned to the residual contract performance

obligation:

The amount of revenue corresponding to performance obligations of contracts signed but not

performed or not fully performed yet was CNY 2438299456.97 at the period-end which was

expected to be recognized in 2026.

7.41. Business taxes and surcharges

Unit: CNY

Item Current Period Previous Period

Consumption tax 1430850214.02 1721547760.08

Urban maintenance and construction 169618946.09 227848253.03

tax

Educational surcharge 73903619.94 98825128.48

Property tax 38056978.91 38179783.28

Land use tax 14586595.67 14046008.98

Stamp duty 11531103.48 15911225.58

Local education surcharge 49269079.96 65883418.92

Others 76693.46 134475.75

Total 1787893231.53 2182376054.10

7.42. General and administrative expenses

Unit: CNY

Item Current Period Previous Period

Employee compensation 226459574.14 227469245.07

Depreciation and amortization 53168882.94 56332188.25

Management fee and service

22154007.00 22155571.83

expense

Others 90113276.47 122315434.98

Total 391895740.55 428272440.13

7.43. Selling and distribution expenses

Unit: CNY

Item Current Period Previous Period

Advertising promotion expense 500938068.52 614445634.53

Promotion expense 533426251.14 518115123.16

Employee compensation 177049578.22 214753358.10

Storage and logistics costs 63878798.22 102069423.35

Others 54639291.26 69128642.90

Total 1329931987.36 1518512182.04

7.44. Research and development expenses

Unit: CNY

Item Current Period Previous Period

Comprehensive research and

74992033.70 83864133.32

development expenses

Total 74992033.70 83864133.32

7.45. Financial expenses

Unit: CNY

Item Current Period Previous Period

Interest expenses 62337587.361 91402233.60

Less: Interest income -286465379.74 -357946373.68

Losses from currency exchange 9365172.91 359030.95

Handling charges 1223944.66 1744034.24

Amortization of unrecognized

331546.52 485177.37

financing costs

Total -213207128.29 -263955897.52

Note: 1 The interest expenses decreased by CNY 29064646.24 or 31.80% year-on-year mainly due

to the year-on-year reduction in the scale of interest-bearing debt.

7.46. Other income

Unit: CNY

Source Current Period Previous Period

Government grants 19174686.89 24391252.80

Other refund (Individual income tax

handling fee refund) 6014885.58 2831178.83

Total 25189572.47 27222431.63

7.47. Gain on changes in fair value

Unit: CNY

Source Current Period Previous Period

Held-for-trading financial assets 30598408.97 23005153.12

Total 30598408.97 23005153.12

7.48. Investment income

Unit: CNY

Item Current Period Previous Period

Investment income from long-term

equity investments under the equity 101167815.25 54787007.14

method

Investment income from disposal of

held-for-trading financial assets 28331.29 1735505.52

Dividend income gained during the

period of holding other equity 10708198.04 9849815.13

instrument investment

Income from derecognition of

financial assets measured at fair

-25960699.10 -54983460.21

value with changes recorded in other

comprehensive income

Total 85943645.48 11388867.58

Other statements:

Note 1: There is no major restriction on the repatriation of the Company's investment income.Note 2: The investment income increased by CNY 74554777.90 or 654.63% year-on-year mainly

due to the increase in earnings of the investee Huaxi Securities Co. Ltd. and the decrease in

discount expenses on notes.Including: investment income from long-term equity investments under the equity method:

Item Current Period Previous Period

Huaxi Securities Co. Ltd. 100984619.36 53230119.49

Luzhou Laojiao Postdoctoral Workstation Technology Innovation

Co. Ltd. -315800.34 -562041.18

Sichuan Tongniang Baijiu Industry Technology Research

Institute Co. Ltd. -28114.41 -88242.48

CTS Luzhou Laojiao Cultural Tourism Development Co. Ltd. -49408.62 1403972.64

Sichuan Tianfu Granary Liquor Industry Co. Ltd. 576519.26 803198.67

Total 101167815.25 54787007.14

Including: dividend income gained during the period of holding other equity instrument investment:

Item Current Period Previous Period

North Chemical Industries Co. Ltd. 93813.29 62542.20

Guotai Haitong Securities Co. Ltd. 4121948.95 3297559.16

Luzhou Bank Co. Ltd. 5640960.00 5207040.00

China Tourism Group Duty Free Corporation Limited 851475.80 1282673.77

Total 10708198.04 9849815.13

7.49. Credit impairment loss

Unit: CNY

Item Current Period Previous Period

Bad debt loss of accounts receivable -828274.53 -266476.75

Bad debt loss of other receivables 72827.84 215280.78

Total -755446.69 -51195.97

7.50. Gains from disposal of assets

Unit: CNY

Source Current Period Previous Period

Gains from disposal of non-current

337510.87 106501.12

assets

Including: Gains from disposal of

337510.87 99453.84

fixed assets

Gains from disposal of use right

7047.28

assets

Total 337510.87 106501.12

7.51. Non-operating income

Unit: CNY

The amount included in the

Item Current Period Previous Period extraordinary gains and

losses of the current period

Compensation for default 14281722.66 7048594.20 14281722.66

Others 284863.82 173175.30 284863.82

Total 14566586.48 7221769.50 14566586.48

7.52. Non-operating costs

Unit: CNY

The amount included in the

Item Current Period Previous Period extraordinary gains and

losses of the current period

Donation 27000000.00

Losses from damage

retirement of non-current 440347.11 440347.11

assets

Others 672858.42 12191852.89 672858.42

Total 1113205.53 39191852.89 1113205.53

Other statements:

Note: The non-operating costs decreased by CNY 38078647.36 or 97.16% year-on-year mainly due

to decrease in donations during the current period.

7.53. Income tax expense

7.53.1. Statement of income tax expense

Unit: CNY

Item Current Period Previous Period

Current period income tax 1304473696.36 2418125334.36

Deferred income tax 39407158.27 308459686.85

Total 1343880854.63 2726585021.21

7.53.2. Adjustment for accounting profit and income tax expense

Unit: CNY

Item Current Period

Total profit 5720831188.21

Income tax expenses determined by statutory/applicable

tax rate 1430207797.05

Impact from subsidiaries’ different tax rates -1673817.48

Impact from adjustment for impact from income tax

expense in previous period -87050729.99

Impact from non-taxable income -2694224.47

Impact from deductible temporary difference or losses

due to unrecognized deferred tax asset in current period 7494544.36

Income tax impact of expected pre-tax deductible

amounts of restricted shares in future periods that are 3907166.68

less than the recognized cost and expenses

Deduction impact of research and development costs -6309881.52

Income tax expense 1343880854.63

Other statements:

Note 1: For the income tax rates please refer to Note 6. Taxes.Note 2: The income tax expense decreased by CNY 1382704166.58 or 50.71% year-on-year

mainly due to the decrease in total profit for the current period.

7.54. Other comprehensive income

Details in Note 7.35. Other comprehensive income.

7.55. Notes to the statement of cash flow

7.55.1. Cash related to operating activities

Cash received from other operating activities

Unit: CNY

Item Current Period Previous Period

Recovery of saving deposits

involving contract disputes 241636.66 260000.00

Government grants 28837109.96 19593915.55

Interest income from bank deposit 248625504.54 257885009.81

Others 127083353.13 80473241.56

Total 404787604.29 358212166.92

Cash paid for other operating activities

Unit: CNY

Item Current Period Previous Period

Cash paid for expenses 1341548643.95 1319418488.50

Cash paid to E-commerce platform

as security deposit 20520.00

Total 1341548643.95 1319439008.50

7.55.2. Cash related to investing activities

Cash received from significant investing activities

Unit: CNY

Item Current Period Previous Period

Recovering the principal invested in

200000000.00 600000000.00

held-for-trading financial assets

Cash received from disposal of other

30677590.78

equity instrument investments

Total 230677590.78 600000000.00

Cash paid for significant investing activities

Unit: CNY

Item Current Period Previous Period

Cash paid for purchasing long-term

713743846.14 736919110.77

assets

Cash paid for purchasing held-for-

400000000.00 500000000.00

trading financial assets

Total 1113743846.14 1236919110.77

7.55.3. Cash related to financing activities

Cash paid for other financing activities

Unit: CNY

Item Current Period Previous Period

Cash paid for rent of right-of-use

3397585.03 3786414.12

assets

Cash paid for repurchase of

2937586.50

restricted shares

Total 6335171.53 3786414.12

Changes in liabilities arising from financing activities

□ Applicable □ N/A

Unit: CNY

Increase in current period Decrease in current period

Item Opening ClosingBalance Cash change Non-cash Cash change Non-cash Balancechange change

Long-term

loans

(including

6691780856 203193655.8 3593969978 3341808118

long-term 40803584.33.05 0 .07 .11

loans due

within one

year)

Lease

liabilities

(including

lease liabilities 25277858.54 166911.40 3397585.03 22047184.91

due within one

year)

Other

payables

(Repurchase 159634274.4 147886716.2

obligations of 2937586.50 8809971.767 1

restricted

shares)

Dividends 8500464836 1998897185 6529731370

28163719.84

payable .32 .75 .41

Short-term 3000000000 3001758333

27840277.79 26081944.45

loans .00 .34

6904856708 3203193655 8569275609 5625284279 147886716.2 1290415497

Total.90 .80 .84 .80 1 8.53

7.56. Supplementary information to statement of cash flow

7.56.1. Supplementary information to statement of cash flow

Unit: CNY

Item Current Period Previous Period

1. Reconciliation of net profit to cash

flow from operating activities:

Net profit 4376950333.58 7683660159.62

Plus: Provision for asset impairment 755446.69 51195.97

Depreciation of fixed asset oil and

gas assets and productive biological 334333147.85 343126216.83

assets

Depreciation of right-of-use assets 4219324.52 4750333.12

Amortization of intangible assets 51861909.18 50125914.63

Amortization of long-term deferred

expense 156191.66 413938.32

Losses from disposal of fixed assets

intangible assets and other long-term -337510.87 -106501.12

assets (Gains use “-”)

Losses from retirement of fixed

assets (Gains use “-”)

Losses from change in fair value

(Gains use “-”) -30598408.97 -23005153.12

Financial expenses (Gains use “-”) -213207128.29 -263955897.52Losses on investments (Gains use “-”) -85943645.48 -11388867.58

Decrease in deferred income tax

assets (Increase uses “-”) 47528689.96 194712678.81

Increase in deferred income tax

liabilities (Decrease uses “-”) -7782431.75 -7641610.35

Decrease in inventories (Increase

use “-”) -284481152.69 -391730893.15

Decrease in operating receivables

(Increase use “-”) 123323019.07 481025313.12

Increase in operating payables

(Decrease use “-”) -2235166826.49 -1995566797.43

Others

Net cash flows from operating

activities 2081610957.97 6064470030.15

2. Significant investing and financing

activities not involving cash:

Conversion of debt into capital

Convertible corporate bonds due

within one year

Fixed assets under financing lease

3. Net change in cash and cash

equivalents:

Closing balance of cash 25688909342.18 35153498709.80

Less: Opening balance of cash 26925093961.82 33367668014.46

Plus: Closing balance of cash

equivalents

Less: Opening balance of cash

equivalents

Net change in cash and cash

equivalents -1236184619.64 1785830695.34

7.56.2. Composition of cash and cash equivalents

Unit: CNY

Item Closing Balance Opening Balance

1. Cash 25688909342.18 26925093961.82

Unrestricted bank deposit 25672009177.77 26905255479.85

Other unrestricted cash

16900164.41 19838481.97

and cash equivalents

3. Closing balance of cash and cash

25688909342.18 26925093961.82

equivalents

7.56.3. Monetary funds not classified as cash and cash equivalents

Unit: CNY

Item Current Period Previous Period Reason

Provision for fixed deposit

Bank deposit 429822094.48 285923801.57

interest on an accrual basis

Co-management account

managed in accordance

Other monetary funds 10006699.34 with the measures for the

administration of special

funds for projects

Restricted cash deposit in

Other monetary funds 1059436.66 1657815.68

E-commerce platforms

Restricted bank cash

Other monetary funds 10000000.00

deposits for L/G

Restricted deposits for

Other monetary funds 200000.00

travel services

Other business-related

Other monetary funds 10000.00

frozen funds

Total 441098230.48 297581617.25

7.57. Foreign currency transactions

7.57.1. Foreign currency transactions

Unit: CNY

Item Closing Balance in ForeignCurrency Exchange Rate Closing Balance in CNY

Cash at Bank and on Hand

Including: USD 70085412.16 6.8109 477344733.68

EUR

HKD 6625238.88 0.86855 5754351.23

Accounts Receivable

Including: USD

EUR

HKD 11733817.66 0.86855 10191407.33

Long-term Loans

Including: USD

EUR

HKD

Other Receivables

Including: USD 18697.65 6.8109 127347.82

HKD 1557450.26 0.86855 1352723.42

Accounts Payable

Including: USD 11818.29 6.8109 80493.19

HKD 10320042.39 0.86855 8963472.82

Other Payables

Including: USD 4500.00 6.8109 30649.05

HKD 5351891.70 0.86855 4648385.54

Non-current liabilities due

within one year

Including: USD 42473.23 6.8109 289280.92

HKD 2772906.90 0.86855 2408408.29

7.57.2. The nature and financial impacts of the lack of exchangeability the spot exchange rate

used and its estimation process and the risks to the entity arising from the lack of

exchangeability

□Applicable □ N/A

7.57.3. Description of the foreign business entity including the important foreign business

entity shall disclose its main foreign business place bookkeeping standard currency and

selection basis and shall also disclose the reason for the change of the bookkeeping

standard currency

□ Applicable □ N/A

Company Operation site Bookkeepingcurrency Choosing Reason

Luzhou Laojiao International Development (Hong Hong Kong

Kong) Co. Ltd. China HKD

Currency in the registration

place

Luzhou Laojiao Commercial Development (North USA USD Currency in the registrationAmerica) Co. Ltd. place

Mingjiang Co. Ltd. USA USD Currency in the registrationplace

7.57.4. The lack of exchangeability between the bookkeeping standard currency of a foreign

business entity and the entity‘s presentation currency

□Applicable □ N/A

7.58. Lease

7.58.1. The Company as lessee

□ Applicable □ N/A

Variable lease payments that are not covered in the measurement of the lease liabilities

□ Applicable □ N/A

Simplified short-term lease or lease expense for low-value assets

□ Applicable □ N/A

The Company uses a simplified approach for short-term leases where the right-of-use assets and

lease liabilities are not recognized. Short-term leases accounted for as expenses in the current period

are listed below:

Item Current Period Previous Period

Short-term lease expenses recognized as current profit or loss in 2788021.15 2810628.93

the current period using the simplified approach

Total cash outflows related to leases 6185606.18 6597043.05

Note: The leased assets of the Company include the buildings and constructions and the land use

right involved in operation. The leasing period of land use right is normally 15-30 years and the lease

contract of land use right generally includes the renewal option clause.Circumstances involving sale and leaseback transactions

None.

7.58.2. The Company as lessor

Operating leases with the Company as lessor

□ Applicable □ N/A

Unit: CNY

Of which: income related to variable

Item Rental income lease payments not included in lease

receipts

Income from rental of buildings

5315278.00

equipment etc.Total 5315278.00

Finance leases with the Company as lessor

□ Applicable □ N/A

Undiscounted lease receipts for each of the next five years

□ Applicable □ N/A

Reconciliation of undiscounted lease receipts to net lease investments

7.58.3. Recognition of gain or loss on sales under finance leases with the company as a

manufacturer or dealer

□ Applicable □ N/A

7.59. Others

None.

8. Research and Development Expenditure

Unit: CNY

Item Current Period Previous Period

Material consumption 10189181.18 5317522.73

Research and development and

777995.68 11552378.74

technical services

Share payment expense 268362.96 2719532.04

Other indirect costs 63756493.88 64274699.81

Total 74992033.70 83864133.32

Of which: Expensed research and

74992033.70 83864133.32

development expenditure

9. Changes in consolidated scope

9.1. Business combination not under common control

9.1.1. Business combination not under common control during current period

Other statements:

There is no business combination not under common control during current period.

9.2. Business combination under common control

9.2.1. Business combination under common control during current period

Other statements:

There is no business combination under common control during current period.

9.3. Reverse purchase

The basic information of the transaction the basis of the transaction constitutes the reverse purchase

whether the assets and liabilities retained by the listed company constitute the business and its basis

the determination of the merger cost and the adjustment of the equity amount and its calculation

according to the equity transaction:

There is no reverse purchase during current period.

9.4. Disposing subsidiaries

Whether there is a situation of losing control after disposing the investment in the subsidiary only

once

□ Yes □ No

Whether there is a situation of disposing the investment in the subsidiary through several transactions

step by step and losing control during the period

□ Yes □ No

9.5. Consolidated scope changes due to other reasons

Explain other reasons for changing consolidated scope (such as establishing a new subsidiary

liquidating a subsidiary) and its related situation:

None.

9.6. Other

None.

10. Interests in other entities

10.1. Interests in subsidiaries

10.1.1. Group composition

Unit: CNY

Name of Registered Major Shareholding Proportion

Subsidiaries capital business

Place of Nature of Acquisition

location registration business Direct Indirect method

Luzhou

Laojiao 48758223 Baijiu

Baijiu Luzhou Luzhou manufactur 100.00% Investment6.00

Production e and sale

Co. Ltd.Luzhou Red

Sorghum Agricultural Business

Modern 10000000. product combination

Agricultural Luzhou Luzhou00 planting and

60.00% under

Developme sale common

nt Co. Ltd. control

Luzhou

Laojiao 10000000

Sales Co. Luzhou Luzhou Baijiu sale 100.00% Investment0.00

Ltd.Luzhou

Laojiao

Nostalgic 5000000.0

Baijiu Luzhou Luzhou Baijiu sale 100.00% Investment0

Marketing

Co. Ltd.Luzhou

Laojiao

Selected

Supply 10000000. Luzhou Luzhou Baijiu sale 100.00% Investment

Chain 00

Manageme

nt Co. Ltd.Guangxi

Luzhou

Laojiao Red wine

Imported 10000000. Qinzhou Qinzhou production 100.00% Investment

Liquor 00 and sale

Industry

Co. Ltd.Luzhou

Dingli Baijiu 5000000.0

Industry Luzhou Luzhou Baijiu sale 100.00% Investment0

Co. Ltd.Luzhou

Laojiao

Qiankun

Cheteau 5000000.0 Luzhou Luzhou Baijiu sale 100.00% Investment

Custom 0

Baijiu Sales

Co. Ltd.2

Luzhou

Laojiao

New Baijiu 5000000.0 Luzhou Luzhou Baijiu sale 100.00% Investment

Industry 0

Co. Ltd.Luzhou Liquor

Laojiao I & 3000000.0 Luzhou Luzhou import and 100.00% Investment

E Co. Ltd. 0 export trade

Luzhou

Laojiao

Boda Baijiu 12000000

Industry Luzhou Luzhou Baijiu sale 75.00% Investment0.00

Marketing

Co. Ltd.Luzhou

Laojiao

Fruit Wine 50000000. Luzhou Luzhou Fruit wine

Industry 00 sale

41.00% Investment

Co. Ltd.Mingjiang

Co. Ltd. 6000000.0 America America Baijiu sale 54.00% Investment

(USD) 0

Luzhou 20000000.Laojiao Hainan Hainan

Food import 100.00% Investment

00 and export

Internationa

l Trade

(Hainan)

Co. Ltd.Luzhou Technology

Pinchuang 50000000. Luzhou Luzhou developmenTechnology t and 100.00% Investment00

Co. Ltd. service

Luzhou

Laojiao

Internationa

l

Developme 10000.00 Hong Kong Hong Kong Baijiu sale 55.00% Investment

nt (Hong

Kong) Co.Ltd. (HKD)

Luzhou

Laojiao

Commercial

Developme Business

nt (North 500000.00 America America developmen 100.00% Investment

America) t

Co. Ltd.(USD)

Luzhou

Laojiao

Electronic 60000000. Luzhou Luzhou Baijiu sale 90.00% Investment

Commerce 00

Co. Ltd.Luzhou

Laojiao Health care Business

Health 10000000. combination

Baijiu Luzhou Luzhou

baijiu

00 manufactur

100.00% under

Industry e and sale common

Co. Ltd. control

Luzhou Business

Laojiao 5000000.0 Health care combinationHealth Luzhou Luzhou

Baijiu Sales 0 baijiu sale

100.00% under

common

Co. Ltd. control

Luzhou

Laojiao 50000000.New Retail Luzhou Luzhou Baijiu sale 40.00% 60.00% Investment00

Co. Ltd.Luzhou

Laojiao Technology

50000000

Technology Chengdu Chengdu development and 40.00% 60.00% Investment0.00

Innovation service

Co. Ltd.Luzhou

Laojiao

Cultural 30000000. Luzhou Luzhou Culturaltourism 40.00% 60.00% InvestmentTourism 00

Developme

nt Co. Ltd.Statement for the fact that the proportion of share-holding is different from the proportion of voting

rights:

Although the Company holds less than 51% of the equity in Luzhou Laojiao Fruit Wine Industry Co.Ltd. of the five members of the board of directors of the company three members are appointed by

the Company which represents a majority and the Company exercises substantive control over the

company. Therefore it is included in the scope of consolidation.

10.1.2. Important non-wholly-owned subsidiaries

Unit: CNY

Proportion of Gains and lossesattributable to non- Dividends paid to Closing balance of

Name of subsidiary shareholdings of non-controllingnon-Controlling Controlling shareholders during non-controlling

shareholders shareholders duringcurrent period current period

shareholders interest

Luzhou Laojiao Boda

Baijiu Industry 25.00% 27435505.89 89279378.17

Marketing Co. Ltd.

10.1.3. Major financial information of important non-wholly-owned subsidiaries

Unit: CNY

Closing Balance Opening Balance

Name Non-

of Curre Non- Curre curren Total Curre Non- Curre

Non-

curren Total nt curren Totalsubsid nt t assets liabiliti t liabiliti nt

curren Total nt t liabiliti

iary assets assets es liabiliti es assets

t assets liabiliti

assets es liabiliti eses es

Luzho

u

Laojia

o

Boda

5599 5599 2028 2028 4482 4482 2008 2008

Baijiu

9569 9569 7818 7818 5689 5689 8140 8140

Indust

6.36 6.36 3.67 3.67 3.26 3.26 4.11 4.11

ry

Marke

ting

Co.Ltd.Unit: CNY

Current Period Previous Period

Name of Total Total

subsidiary Operating Net profit comprehe Operating Operating Net profit comprehe Operatingrevenue nsive cash flow revenue nsive cash flow

income income

Luzhou

Laojiao

Boda

5501659 1097420 1097420 - 6509690 7429318 7429318 301569.0

Baijiu

96.15 23.54 23.54 80002.58 97.13 3.12 3.12 9

Industry

Marketing

Co. Ltd.

10.1.4. Significant restrictions on using the assets and liquidating the liabilities of the

Company

None.

10.1.5. Financial support or other supports provided to structural entities incorporated into the

scope of consolidated financial statements

None.

10.2. The transaction of the company with its owner's equity share changing but

the company still controls the subsidiary

10.2.1. Note to the owner's equity share changed in subsidiary

None.

10.2.2. The transaction’s influence on the equity of non-controlling interests and the owner's

equity attributable to the company as the parent

None.

10.3. Interests in joint ventures and associates

10.3.1. Important joint ventures and associates

Name of joint Major Place of Business Shareholding proportionventure/associ business Accounting

ates location registration nature Direct Indirect Method

Important joint

ventures:

none

Important

associates:

Huaxi

Securities Chengdu ChengduSichuan Sichuan Securities 10.39% Equity methodCo. Ltd.Basis of holding less than 20% of the voting rights but has a significant impact or holding 20% or

more voting rights but does not have a significant impact:

The Company has the substantive decision-making power so the Company still has significant

influence on Huaxi Securities.

10.3.2. Major financial information of important associates

Unit: CNY

Closing Balance/Amount in current Opening Balance/Amount in previous

period period

Current assets 105090839769.89 96509002038.54

Non-current assets 5750137469.12 8934253870.69

Total assets 110840977239.01 105443255909.23

Current liabilities 61717917777.45 58119608404.73

Non-current liabilities 23777070035.66 22531896382.85

Total liabilities 85494987813.11 80651504787.58

Non-controlling shareholder interest 13870497.10 14102701.14

Shareholder interest attributable to

parent company 25332118928.80 24777648420.51

Share of net assets calculated based

on shareholding proportion 2632910852.30 2575281586.36

Adjusted

--Goodwill

--Unrealized profits of internal

transactions

--Others 167466735.90 167466735.90

Book value of equity investments in

associate companies 2800377588.20 2742748322.26

Fair value of equity investments in

associate companies that have public 2229030446.48 2531873016.32

quote

Operating revenue 2712330102.60 2073360322.47

Net profit 971374709.79 511153449.44

Net profit from discontinued

operation

Other comprehensive income 26488594.46 48159435.11

Total comprehensive income 997863304.25 559312884.55

Dividends from associate companies

this year

10.3.3. Financial information summarized of unimportant joint ventures and associate

companies

Unit: CNY

Closing Balance/Amount in current Opening Balance/Amount in previous

period period

Joint ventures:

Total following items calculated on

the basis of shareholding proportion

Associate companies:

Total book value of investments 188015281.39 188056147.51

Total following items calculated on

the basis of shareholding proportion

--Net profit 18820.95 -1901298.01

--Total comprehensive income 18820.95 -1901298.01

Other statements:

Unimportant associate companies refer to Luzhou Laojiao Postdoctoral Workstation Technology

Innovation Co. Ltd. Sichuan Development Liquor Investment Co. Ltd. CTS Luzhou Laojiao Cultural

Tourism Development Co. Ltd. Sichuan Tongniang Baijiu Industry Technology Research Institute Co.Ltd. and Sichuan Tianfu Granary Liquor Industry Co. Ltd.

10.3.4. Notes to the significant restrictions on the ability of joint ventures or associate

companies to transfer funds to the Company

None.

10.3.5. The excess loss of joint ventures or associate companies

None.

10.3.6. The unrecognized commitment related to investment to joint ventures

None.

10.3.7. Contingent liabilities related to investment to joint ventures or associate companies

None.

11. Government grants

11.1. Government grants recognized at the end of the reporting period at the

amount receivable

□ Applicable □ N/A

Reasons for failing to receive government grants in the estimated amount at the estimated point in

time

□ Applicable □ N/A

11.2. Liability items involving government grants

□ Applicable □ N/A

Unit: CNY

Non- Other

Opening Increase in operatingcurrent income in income inItem Other Closing

Related to

Balance changes Balance assets/period current current income

period period

Deferred 82513945. 17034000. 12536867. 87011078. Related to

income 77 00 72 05 assets

82513945. 17034000. 12536867. 87011078.

Total

77 00 72 05

11.3. Government grants recognized as current profit or loss

□ Applicable □ N/A

Unit: CNY

Item Amount in current period Amount in previous period

Other income 19174686.89 24391252.80

Total 19174686.89 24391252.80

Other statements:

The specific details of government grants included in current profit or loss are provided in Note 7.44.

12. Risks related to financial instruments

12.1. Various types of risks arising from financial instruments

The Company's primary financial instruments include monetary capital trading financial assets

accounts receivable receivables financing receivables other than tax refundable other equity

instruments accounts payable other payables lease liabilities some other current liabilities and loans.A detailed description of each financial instrument is set out in Note 7. Notes to the main items of the

consolidated financial statements.Risks related to these financial instruments and risk management policies the Company has adopted

to reduce these risks are described as follows. The Company management manages and monitors the

risk exposure to ensure the above risks are controlled in a limited scope.The Company adopts sensitivity analysis technology to analyze the possible impact of reasonable and

possible changes of risk variables on current profits/losses or shareholders' equity. As any risk variable

rarely changes in isolation and the correlation between variables will have a significant effect on the

final impact amount of the change of a risk variable the following content is based on the assumption

that the change of each variable is independent.Risk management objective: The Company strikes an appropriate balance between risk and return and

strives to minimize the negative impact of risk on the Company's operating performance and maximize

the interests of shareholders and other equity investors.Risk management policy: The Board of Directors shall be responsible for planning and establishing a

risk management framework formulating risk management policies and related guidelines and

supervising the implementation of risk management measures. The Risk Management Committee shall

carry out risk management through close collaboration (including the identification evaluation and

avoidance of relevant risks) with other business units of the Company in accordance with the policies

approved by the Board of Directors. The internal audit department shall conduct regular audits on risk

management controls and procedures and report the results to the Audit Committee.The Company has formulated risk management policies to identify and analyze the risks it faces

clarifying specific risks and covering many aspects such as credit risk liquidity risk and market risk

management. On a regular basis the Company evaluates the specific market environment and various

changes in the Company's business operations to determine whether any risk management policy and

system should be updated. The Company diversifies the risks to financial instruments through

appropriately diversified investments and business portfolios and reduces the risk of concentration in

any single industry specific geographic area or specific counterparty by formulating appropriate risk

management policies.

12.1.1. Credit risk

Credit risk refers to the risk that one party to a financial instrument cannot perform its obligations

causing financial losses to the other party. The Company only trades with recognized reputable and

large third parties. In accordance with the Company's policy the terms of sale with customers are

based on transactions of payment before delivery with only a small amount of credit transactions and

credit review for all customers who require credit to trade. In addition the Company continuously

monitors and controls the balance of the receivables to ensure that the Company does not face

significant bad debt risks. In addition the Company makes full provision for expected credit losses at

each balance sheet date based on the collection of receivables. Therefore the Company's

management believes that the Company's credit risk has been greatly reduced.The Company's working capital is deposited in banks with high credit rating so the credit risk of working

capital is low.The Company's risk exposures are spread across multiple contract parties and customers in multiple

geographies with customers in the commerce industry in addition to the alcohol distribution industry

(the main industry). No systemic risk has been identified in the relevant industries. Therefore the

Company has no significant credit concentration risk. As at June 30 2026 the balance of the top five

customers of the Company's accounts receivable amounted to CNY 19.8389 million accounting for

82.74% of the balance of the Company's accounts receivable.

12.1.2. Liquidity risk

Liquidity risk refers to the risk unable to obtain sufficient funds in time to meet business development

needs or to repay debts due and other payment obligations. The Company has sufficient working

capital. The liquidity risk is extremely small. The Company's objective is to use a variety of financing

instruments such as bank clearing bank loans and issuing corporate bonds to maintain a balance

between financing sustainability and flexibility. As at June 30 2026 the Company has been able to

meet its own continuing operation requirements through the use of cash flow from operations.The analysis of the financial liabilities held by the Company based on the maturity period of the

undiscounted remaining contractual obligations is as follows:

Closing Balance

Item Book value Contract amountnot discounted Within 1 year 1-2 years 2-3 years Over 3 years

Account

s 1280907734.3 1280907734.3 1280907734.3

payable 9 9 9

Other

payable 416800437.68 416800437.68 416800437.68

Non-

current 1518137222.4 1518137222.4 1518137222.4

liabilities 9 9 9

due

within

one year

Long-

term 1831359966.7 1831359966.7 1265000000.0 50000000.0 516359966.7

loans 3 3 0 0 3

Lease

liabilities 14358113.80 16070856.20 4827600.00 5069000.00 6174256.20

Total 5061563475.0 5063276217.4 3215845394.5 1269827600.0 55069000.0 522534222.99 9 6 0 0 3

12.1.3. Market risk

(1) Foreign exchange risk

The foreign exchange risk refers to the risk of loss due to exchange rate changes. Apart from the

three subsidiaries of the Company which make purchases and sales in USD and HKD the other

major business activities are denominated and settled in CNY. The Company closely monitors the

impact of exchange rate fluctuations on its foreign exchange risk and actively tracks the scale of

foreign currency transactions as well as foreign currency assets and liabilities to minimize exposure

to exchange rate risks. As at June 30 2026 the Company's assets and liabilities are mainly in CNY

balance. At present the Company's management considers the impact of changes in foreign

exchange risk on the Company's financial statements to be less.

(2) Rate risk

The Company's interest rate risk mainly arises from the long-term loans from banks. Financial liabilities

based on the floating interest rate will cause the cash flow interest rate risk to the Company and

financial liabilities based on the fixed interest rate the fair value interest rate risk. The Company will

determine the corresponding proportion between the contracts with fixed interest rate and those with

floating interest rate in combination with current market condition.

(3) Other price risks

Other price risk refers to the risk of fluctuation caused by market price changes other than foreign

exchange risk and interest rate risk whether these changes are caused by factors related to a single

financial instrument or its issuer or all similar financial instruments traded in the market. Other price

risks faced by the Company mainly come from held-for-trading financial assets and investments in other

equity instruments measured at fair value.

12.2. Financial assets

12.2.1. Classification of transfer methods

□ Applicable □ N/A

Unit: CNY

Amount of

Nature of transferred Basis for

Transfer method transferred financial Derecognized or not

financial assets derecognition

assets

Outstanding bank

Almost all its risks

Endorsement of acceptance bills in

101662231.44 Yes and rewards have

notes accounts receivable

been transferred

financing

Outstanding bank

Almost all its risks

acceptance bills in

Discount of notes 2585644172.66 Yes and rewards have

accounts receivable

been transferred

financing

Total 2687306404.10

12.2.2. Financial assets derecognized due to transfer

□ Applicable □ N/A

Unit: CNY

Method of financial assets Amount of derecognized Gains or losses related to

Item

transfer financial assets derecognition

Outstanding bank

acceptance bills in

Endorsement of notes 101662231.44

accounts receivable

financing

Outstanding bank

acceptance bills in

Discount of notes 2585644172.66 -12187820.76

accounts receivable

financing

Total 2687306404.10 -12187820.76

12.2.3. Continued involvement in the transfer of financial assets

□ Applicable □ N/A

13. Fair value disclosure

13.1. Closing fair value of assets and liabilities measured at fair value

Unit: CNY

Closing fair value

Item

Level 1 Level 2 Level 3 Total

1. Continuous

measurement at fair -- -- -- --

value

1.1 Held-for-trading

financial assets 1813215967.55 1813215967.55

1.1.1 Financial

assets measured at

fair value with their

changes included 1813215967.55 1813215967.55

into current

profits/losses

1.1.1.4 Wealth

management 1813215967.55 1813215967.55

products

1.3 Investments in

other equity 350732406.16 32953989.02 383686395.18

instruments

1.8 Accounts

receivable financing 1259916564.02 1259916564.02

Total assets 350732406.16 3106086520.59 3456818926.75

continuously

measured at fair

value

2. Discontinuous

measurement at fair -- -- -- --

value

13.2. Determination basis of the market value of items measured continuously and

discontinuously within Level 1 of the fair value hierarchy

The listed companies in mainland China determine the fair value of other equity instrument investment

according to the closing price on the last trading day of Shenzhen Stock Exchange or Shanghai Stock

Exchange at the period-end. The companies listed in Hong Kong determine the fair value of other

equity instrument investment according to the closing price of Hong Kong Dollar on the last trading day

of Hong Kong Stock Exchange at the period-end and the median price of CNY exchange rate disclosed

on the same day by China Foreign Exchange Trade System.

13.3. Valuation technique adopted and nature and amount determination of

important parameters for either continuously or discontinuously within Level 2 of

the fair value hierarchy

None.

13.4. Valuation technique adopted and nature and amount determination of

important parameters for either continuously and discontinuously within Level 3 of

the fair value hierarchy

Trading financial assets are wealth management products of the collective asset management plan and

are measured at fair value based on the amount calculated on the basis of the net unit value of the

underlying assets as published on the official website of the asset manager.Accounts receivable financing: As the timing and price of bills discounted may not be reliably estimated

due to the short maturity of the bills all being less than one year and the endorsement of the negotiable

bills being valued at book value the Company measures the bills receivable at their book value as a

reasonable estimate of fair value.Other equity instrument investment: Due to no significant changes in business environment business

condition and financial situation of invested companies the Company shall measure the fair value

according to the lower one between investment cost and the share of net assets enjoyed by invested

companies on the base date as the reasonable estimation.

13.5. Continuous fair value measurement items at level 3 adjustment between the

beginning carrying value and the ending carrying value and sensitivity analysis on

unobservable parameters

None.

13.6. Explain the reason for conversion and the policy governing when the

conversion happens if conversion happens among continuous fair value

measurement items at different level

None.

13.7. Changes in valuation techniques in the reporting period and reasons for the

changes

None.

13.8. Fair value of financial assets and liabilities not measured at fair value

None.

14. Related parties and related party transactions

14.1. The parent company of the Company

Shareholding

Registration proportion by Voting rightsParent company place Business nature Registered capital the parent proportion by the

company parent company

Luzhou Laojiao Investment and

Group Co. Ltd. Luzhou Sichuan asset 2798818800.00 26.05% 50.99%management

Statements for situation of parent company:

The reason for the inconsistency between the shareholding proportion and voting rights proportion by

the controlling shareholder is that: On May 23 2024 Laojiao Group and XingLu Investment Group

the second biggest shareholder renewed the concerted action agreement again which is valid as of

June 1 2024 and ends on May 31 2027. The agreement: when the parties dealing with the

Company’s business development and make decisions by shareholders meeting and board of

directors according to the company law and other relevant laws and regulations and the articles of

association the parties should adopt the consistent actions. During the effective period of this

agreement before any party submits proposals involving the major issues of the Company's business

development to the shareholders meeting or exercise the voting rights at the shareholders meeting

and the board of directors the internal coordination for relevant proposals and voting events shall be

conducted by persons acting in concert. If there are different opinions it will be subject to Laojiao

Group’s opinion.The nature of the controlling shareholder: Limited liability company (state-owned); Registration place:

Innovation and Entrepreneurship Center Liquor Industry Park Huangyi Town Jiangyang District

Luzhou City Sichuan Province; Business Scope: General project: Social economy consulting services;

business management consulting; financial consulting; business headquarters management; import

and export agency; trade brokerage; crops planting services; trees planting operation; elder care

services; tourism development project planning and consulting; technical agency services;

engineering and technological research and experimental development; display device manufacturing;

supply chain management services; technical services technical development technical consulting

technical communication technical transfer and technical promotion; domestic freight transport

agency; equity fund-invested asset management services passenger ticket agent and business

agency service. It shall also include licensed projects (business activities can be carried out legally

and independently with business license in addition to projects that must be approved by law):

Agency bookkeeping; career intermediary activities; food production; food sales; medical services.(business activities that require approval in accordance with laws can be carried out upon approval of

relevant authorities and the specific business projects shall be subject to the approval document or

license of relevant departments)

The final control party of the Company is SASAC of Luzhou.

14.2. Subsidiaries of the Company

For details please see Note 10.1. Interests in subsidiaries.

14.3. Joint ventures and associates of the Company

For details please see Note 10.3. Interests in joint ventures and associates.

14.4. Other related party of the Company

Name of Other Related Party Relationship with the Company

Luzhou XingLu Investment Group Co. Ltd. The second largest shareholder

Luzhou China Resources Xinglu Gas Co. Ltd. Subsidiary of the second largest shareholder

Luzhou XingLu Water (Group) Co. Ltd. Subsidiary of the second largest shareholder

Luzhou Public Transport Group Co. Ltd. Subsidiary of the second largest shareholder

Luzhou XingLu Property Management Co. Ltd. Subsidiary of the second largest shareholder

CTS Luzhou Laojiao Cultural Tourism Development Co.Associate

Ltd.Sichuan Tianfu Granary Liquor Industry Co. Ltd. Associate

Sichuan Development Liquor Investment Co. Ltd. Associate

Luzhou Sanrenxuan Liquor Industry Co. Ltd. Associate of the controlling shareholder

Sichuan Jianxing Park Operation Management Co. Ltd. Associate of the controlling shareholder

Luzhou COSCO Shipping Logistics Co. Ltd. Associate of the controlling shareholder

Sinotrans Lianzhong (Shijiazhuang) Logistics Co. Ltd. Associate of the controlling shareholder

Sichuan Sidu Chishui Red Culture Development Co. Ltd. Associate of the controlling shareholder

Luzhou Bank Co. Ltd. Associate of the controlling shareholder

Luzhou Rural Commercial Bank Co. Ltd. Associate of the controlling shareholder

Luzhou Youze Commercial Management Co. Ltd. Associate of the controlling shareholder

Sichuan Xinyichuang Technology Co. Ltd. Associate of the controlling shareholder

Sichuan Lianzhong Supply Chain Service Co. Ltd. Other subsidiary of the controlling shareholder

Luzhou Laojiao Construction Installation Engineering Co.Other subsidiary of the controlling shareholder

Ltd.Luzhou Yuanhai Lianzhong Supply Chain Co. Ltd. Other subsidiary of the controlling shareholder

APTCC Other subsidiary of the controlling shareholder

Luzhou Laojiao Innovation Industry Holdings Co. Ltd. Other subsidiary of the controlling shareholder

Luzhou Laojiao Property Service Co. Ltd. Other subsidiary of the controlling shareholder

Luzhou Huguo Condiment Co. Ltd. Other subsidiary of the controlling shareholder

Luzhou Jiaxin Holding Management Co. Ltd. Other subsidiary of the controlling shareholder

Luzhou Laojiao Group Commercial Investment Co. Ltd. Other subsidiary of the controlling shareholder

Sichuan Huixin Financial Leasing Co. Ltd. Other subsidiary of the controlling shareholder

Sichuan Xinweiye Industry and Trade Development Co.Other subsidiary of the controlling shareholder

Ltd.Sichuan Yuanjingda Food Co. Ltd. Other subsidiary of the controlling shareholder

Puchun Consulting (Shenzhen) Co. Ltd. Other subsidiary of the controlling shareholder

China Malaysia International Mining (Sichuan) Co. Ltd. Other subsidiary of the controlling shareholder

Luzhou Laojiao Real Estate Co. Ltd. Other subsidiary of the controlling shareholder

SC Global Wine Corporation Limited Other related party

Sichuan Meihe Winery Industry Co. Ltd. Minority shareholder of the subsidiary Fruit Wine Industry

Minority shareholder of the subsidiary Red Sorghum

Luzhou Xingyang Investment Group Co. Ltd.Company

14.5. Related transactions

14.5.1. Related transactions of purchase and sales of goods / rendering and receipt of

services

Table of purchase of goods / receipt of services

Unit: CNY

Name of Related Whether overTransaction Amount in Approved trading approved trading Amount inParty current period amount amount previous period

Receipt of

services:

Warehousing

loading and

Laojiao Group

unloading

and its

transportation

subsidiaries joint 52557264.39 53202616.22

processing

ventures and

services and

associates

property costs

etc.Property service

Luzhou XingLu

Sewage

Investment

treatment

Group Co. Ltd. 9875270.17 11047012.90

service

and its

advertising

subsidiaries

service etc.CTS Luzhou

Laojiao Cultural Conference fees

Tourism travel service 1928927.96

Development fee etc.Co. Ltd.Purchase of

goods:

Laojiao Group

and its Raw materials

subsidiaries joint water power 60228692.07 148992178.31

ventures and etc.associates

Luzhou XingLu

Investment

Gas water etc. 8001299.32 7755406.66

Group Co. Ltd.and its

subsidiaries

Total 130662525.95 222926142.05

Table of sales of goods and rendering of service

Unit: CNY

Name of Related Party Transaction Amount in current period Amount in previous period

Sales of goods:

Laojiao Group and its

Baijiu etc. 14059756.10 14662647.08

subsidiaries

Luzhou XingLu Investment

Group Co. Ltd. and its Baijiu 5736.00

subsidiaries

CTS Luzhou Laojiao

Cultural Tourism Baijiu 91825.26 9716805.71

Development Co. Ltd.Luzhou Sanrenxuan Liquor Baijiu 11383200.00 15897725.61

Industry Co. Ltd.Sichuan Tianfu Granary Baijiu 5324619.97 4966490.75

Liquor Industry Co. Ltd.Total 30865137.33 45243669.15

14.5.2. Related party leasing

The Company as lessor:

Unit: CNY

Name of lessee Type of leased asset Leasing income recognized Leasing income recognizedduring current period during previous period

Laojiao Group and its House and equipment

subsidiaries lease 3235287.28 4158480.00

The Company as lessee:

Unit: CNY

Rental expenses

of short-term Variable lease

lease with payments not

Income expense

simplified included in the Increased use

Type Paid rent of lease liabilitiestreatment and measurement of right assets

Name undertakenof low-value asset lease liabilities (ifof lease (if applicable)

lessor assets applicable)

leased Amoun Amoun Amoun Amount in t in Amoun

Amoun Amoun Amoun

t in t in t in t in

Amoun Amoun

previo previo previo t in

t in

previo t in

t in

current us current us current us current

previo

period period period period us

current

period period period period period

us

period

Laojiao

Group

and its House 1644 1644 1824

subsidi lease 288.18 288.18 096.72

aries

14.5.3. Key management compensation

Unit: CNY

Item Amount in current period Amount in previous period

Key management compensation 3517714.32 4079866.03

14.5.4. Other related transactions

The Company has daily fund deposit business with its related parties Luzhou Bank Co. Ltd. and

Luzhou Rural Commercial Bank Co. Ltd. As of June 30 2026 the bank deposit balances of the

Company in Luzhou Bank Co. Ltd. and Luzhou Rural Commercial Bank Co. Ltd. were CNY

126.6768 million and CNY 100.0010 million respectively. In H1 2026 the interest income from bank

deposits in Luzhou Bank Co. Ltd. and Luzhou Rural Commercial Bank Co. Ltd. were CNY 1.3239

million and CNY 6.1262 million respectively. This year and last year the Company did not conduct

loan business with the above two banks.

14.6. Receivables and payables of related parties

14.6.1. Receivables

Unit: CNY

Closing Balance Opening Balance

Item Related party

Book value Provision for baddebt Book value

Provision for bad

debt

Prepayment Luzhou Laojiao 3840339.58 8778438.12

Group Co. Ltd.Luzhou XingLu

Prepayment Water (Group) 95099.99 27682.34

Co. Ltd.Luzhou China

Prepayment Resources 107402.91

Xinglu Gas Co.Ltd.Luzhou Public

Prepayment Transport Group 59458.79

Co. Ltd.Sichuan Meihe

Prepayment Winery Industry 2961479.50 2961479.50

Co. Ltd.Luzhou

Prepayment Xingyang 212400.00

Investment

Group Co. Ltd.Accounts Luzhou Laojiao

payable 1256733.53 62836.68Group Co. Ltd.Luzhou Jiaxin

Accounts Holding

payable 2381000.00 119050.00Management

Co. Ltd.Luzhou Laojiao

Group

Accounts

payable Commercial 980.00 49.00

Investment Co.Ltd.Accounts Sichuan Sidu

payable 18180.00 909.00Chishui Red

Culture

Development

Co. Ltd.Sichuan Jianxing

Accounts Park Operation

payable 325930.17 18749.88Management

Co. Ltd.Luzhou Youze

Accounts Commercial

payable 1938.00 96.90Management

Co. Ltd.Luzhou

Other Xingyang

150000.00 7500.00

receivables Investment

Group Co. Ltd.

14.6.2. Payables

Unit: CNY

Item Related party Closing book balance Opening book balance

Accounts payable Sichuan Lianzhong Supply 3516374.72 17764335.79

Chain Service Co. Ltd.Luzhou Laojiao

Accounts payable Construction Installation 17500.68 7870.20

Engineering Co. Ltd.Accounts payable Sichuan Xinyichuang 127960.31

Technology Co. Ltd.Accounts payable Luzhou China Resources 347969.19

Xinglu Gas Co. Ltd.CTS Luzhou Laojiao

Accounts payable Cultural Tourism 15972.59

Development Co. Ltd.CTS Luzhou Laojiao

Contractual liabilities (tax

inclusive) Cultural Tourism 73435.78 165261.04

Development Co. Ltd.Contractual liabilities (tax

inclusive) APTCC 54553.69 709197.67

Contractual liabilities (tax Luzhou Sanrenxuan Liquor

inclusive) 10800000.00 7633200.00Industry Co. Ltd.Sichuan Jianxing Park

Contractual liabilities (tax

inclusive) Operation Management 945027.90

Co. Ltd.Contractual liabilities (tax Sichuan Lianzhong Supply

inclusive) 92042.16 207700.06Chain Service Co. Ltd.Contractual liabilities (tax Luzhou Laojiao Innovation

inclusive) 110299.16 1592299.16Industry Holdings Co. Ltd.Sinotrans Lianzhong

Contractual liabilities (tax

inclusive) (Shijiazhuang) Logistics 768.78 768.78

Co. Ltd.Contractual liabilities (tax Sichuan Tianfu Granary

inclusive) 4451290.45 4775910.42Liquor Industry Co. Ltd.Contractual liabilities (tax Luzhou Huguo Condiment

inclusive) 134594.00 61817.00Co. Ltd.Sichuan Sidu Chishui Red

Contractual liabilities (tax

inclusive) Culture Development Co. 38000.00

Ltd.

Contractual liabilities (tax Sichuan Huixin Financial

inclusive) 15480.68Leasing Co. Ltd.Sichuan Xinweiye Industry

Contractual liabilities (tax

inclusive) and Trade Development 100.00

Co. Ltd.Contractual liabilities (tax Sichuan Yuanjingda Food

inclusive) 3236.20Co. Ltd.Contractual liabilities (tax Puchun Consulting

inclusive) 50.00(Shenzhen) Co. Ltd.China Malaysia

Contractual liabilities (tax

inclusive) International Mining 50.00

(Sichuan) Co. Ltd.Contractual liabilities (tax SC Global Wine

inclusive) 693.56Corporation Limited

Other payables Luzhou Xinglu Property 154920.20 154920.20

Management Co. Ltd.Luzhou Laojiao

Other payables Construction Installation 70000.00 70000.00

Engineering Co. Ltd.Other payables APTCC 150000.00 150000.00

Other payables Luzhou COSCO Shipping 50000.00

Logistics Co. Ltd.CTS Luzhou Laojiao

Other payables Cultural Tourism 300000.00 300000.00

Development Co. Ltd.Sichuan Jianxing Park

Other payables Operation Management 95000.00 95000.00

Co. Ltd.Other payables Luzhou Laojiao Innovation 200000.00 200000.00

Industry Holdings Co. Ltd.Other payables Sichuan Development 5915325.68 4494000.00

Liquor Investment Co. Ltd.Other payables Sichuan Lianzhong Supply 31073695.24 31895827.74

Chain Service Co. Ltd.Other payables Luzhou Yuanhai Lianzhong 50000.00

Supply Chain Co. Ltd.Other payables Luzhou Laojiao Property 159475.66 159475.66

Service Co. Ltd.Other payables Luzhou Sanrenxuan Liquor 300000.00 300000.00

Industry Co. Ltd.Other payables Sichuan Tianfu Granary 100000.00 100000.00

Liquor Industry Co. Ltd.Other payables Luzhou Laojiao Real 950000.00

Estate Co. Ltd.

14.7. Commitments of the related parties

None.

15. Stock payment

15.1. The overall situation of share-based payments

□ Applicable □ N/A

Unit: CNY

Type of Granted in the Current Exercised in the Unlocked in the Current Invalid in the Current

granting Period Current Period Period Period

object Number Amount Number Amount Number Amount Number Amount

2985970 6086745.

1990614 40500

87.26 00

2985970 6086745.

Total 1990614 40500

87.26 00

Outstanding stock options or other equity instruments at the end of the reporting period

□ Applicable □ N/A

Other statements:

Note 1: There were no outstanding stock options or other equity instruments at the end of the

reporting period.Note 2: At the 12th Meeting of the 10th Board of Directors of the Company held on December 29

2021 the Proposal on the Grant of Restricted Shares to Awardees was reviewed and approved and it

was agreed to grant 6.9286 million restricted shares to 441 awardees for the first time at CNY 92.71

per share with December 29 2021 as the grant date.At the 18th Meeting of the 10th Board of Directors and the 9th Meeting of the 10th Board of

Supervisors of the Company held on July 25 2022 the Proposal on the Grant of Reserved Portion of

Restricted Shares to Awardees was reviewed and approved and it was agreed to grant 342334

restricted shares to 46 awardees at CNY 89.466 per share with July 25 2022 as the grant date.At the 26th Meeting of the 10th Board of Directors and the 15th Meeting of the 10th Board of

Supervisors of the Company held on December 29 2022 the Proposal on the Grant of Reserved

Portion of Restricted Shares to Awardees was reviewed and approved and it was agreed to grant

92669 reserved portion of restricted shares to 17 awardees at CNY 89.466 per share with December

29 2022 as the grant date.

According to the incentive plan its validity period lasts from the date of registration for the grant of

restricted shares until all restricted shares are lifted from restricted sales or repurchased and retired

for a maximum of 60 months. The lifting restriction period of the restricted shares shall be 24 months

from the date of completion of registration. The restricted shares will be lifted from restricted sales in

three batches after 24 months from the date of completion of registration in the proportion of 40.00%

30.00% 30.00% respectively for each lifting.

In February 2026 the Company announced that 421 awardees met the lifting conditions in the third

lifting restriction period under the 2021 Restricted Share Incentive Plan of the Company. The number

of restricted shares that can be lifted from restricted sales was 1962814 accounting for 0.1333% of

the current total share capital of the Company.In February 2026 the Company announced that 17 awardees met the lifting conditions in the second

lifting restriction period under the 2021 Restricted Share Incentive Plan Reserved Portion of the

Company. The number of restricted shares that can be lifted from restricted sales was 27800

accounting for 0.0019% of the current total share capital of the Company.Note 3: As six awardees no longer met the incentive conditions the Company repurchased and

canceled a total of 40500 restricted shares that had been granted but not yet released from

restrictions for these incentive recipients. As at June 30 2026 the Company had completed the

repurchase and retirement of the above-mentioned shares.

15.2. Equity-settled share-based payments

□ Applicable □ N/A

Unit: CNY

Method of determining the fair value of equity instruments The closing price of restricted stocks on the grant date

on the grant date deducts the grant price thereof

Important parameters of fair value of equity instruments

on the grant date The closing price of restricted stocks on the grant date

The Company's management considered factors such as

Basis to determine number of equity instrument that can changes in the number of eligible employees for the latest

be exercised exercisable options and the level of performance

achievement to make the best estimate.Reason for remarkable difference between the estimate

of the current period and that of previous period N/A

Total amount of equity-settled share-based payments

included into capital reserves 1717937178.44

Total costs of recognizing equity-settled share-based

payments in the current period 5126659.10

15.3. Cash-settled share-based payments

□ Applicable □ N/A

15.4. Share-based payment expenses in the current period

□ Applicable □ N/A

Unit: CNY

Type of granting object Expenses for equity-settled share- Expenses for cash-settled share-based payments based payments

Production staff 275635.23

Sales staff 3534149.06

Administrative staff 1048511.85

R&D staff 268362.96

Total 5126659.10

15.5. Modification and termination of share-based payments

None.

16. Commitments and contingencies

16.1. Commitments

Significant commitments at the balance sheet date

None.

16.2. Contingencies

16.2.1. Significant contingencies at the balance sheet date

On October 15 2014 and January 10 2015 the Company disclosed three saving deposits involving

contract disputes in Agricultural Bank of China Changsha Yingxin Sub-branch Industrial and

Commercial Bank of China Nanyang Zhongzhou Sub-branch and another bank with a total amount

of CNY 500 million. The public security organization has investigated and the investigation of related

cases and the preservation of assets are under way. The Company has initiated a civil procedure to

recover the loss from the responsible unit. In H1 2026 the Company recovered CNY 0.2416 million of

saving deposits involving contract disputes. As of the period-end the Company has recovered the

above-mentioned saving deposits involving contract disputes with CNY 408.89 million.Except for the above matters the Company has no other significant contingencies that need to be

disclosed as of the end of the reporting period.

16.2.2. Explanation shall be given even if there is no significant contingency for the Company

to disclose

There was no significant contingency in the Company to disclose.

17. Post balance sheet event

17.1. Profit distribution

Dividends to be distributed for every 10 existing shares

44.171215

held (CNY)

Amount to be distributed for every 10 existing shares held

44.171215

after consideration and approval (CNY)

The Company has reviewed and approved the 2025 profit

distribution plan at the 24th Meeting of the 11th Board of

Directors held on April 27 2026: Based on the current

1471941963 shares a cash dividend of CNY 44.17 (tax

included) will be distributed for every 10 existing shares

held representing a total cash dividend amount of CNY

6501567650.57 (tax included). Where any change

occurs to the Company's total share capital before the

implementation of the distribution plan relevant

adjustments shall be made with the same total

Profit distribution plan distribution amount. This plan was subsequently reviewed

and approved at the Company’s 2025 Annual Meeting of

Shareholders. On June 3 the Company repurchased and

canceled 40500 restricted shares resulting in a change

in the total share capital from 1471941963 shares to

1471901463 shares. In accordance with the

aforementioned principle of maintaining the total

distribution amount unchanged the dividend plan was

adjusted and the distribution ratio was changed from

CNY 44.17 (tax included) per 10 shares to CNY

44.171215 (tax included) per 10 shares.

17.2. Sales return

There are no important sales returns after balance sheet date.

17.3. Statement for other post balance sheet events

There are no other post balance sheet events after balance sheet date.

18. Other important information

18.1. Annuity plan

The Company carried out the enterprise annuity payment work normally during the reporting period.The enterprise annuity funds are paid by both the Company and employees. The Company's

contribution shall not exceed 8% of the Company's total salary in the previous year as stipulated by

the state and the individual contribution shall be withheld by the Company according to 1% of total

salary of the employee in the previous year.

18.2. Segment information

18.2.1 Recognition basis and accounting policies of reportable segment

Except for the business on baijiu sales the Company does not operate other businesses that have a

significant impact on operation results. In addition the Company operates mainly from China and

main assets also located in China so the Company does not need to disclose segment data.

18.3. Other significant events that can affect investors’ decision

Saving deposits involving contract disputes

As stated in Note 16.2 three saving deposits involved contract disputes in Agricultural Bank of China

Changsha Yingxin Sub-branch Industrial and Commercial Bank of China Nanyang Zhongzhou Sub-

branch and another bank with a total amount of CNY 500 million. The Company has initiated a civil

procedure to recover the loss from the responsible unit.Taking into account the current amount of assets preserved by the public security authorities and the

contents of the professional legal opinion issued by Sichuan Ding Zheng Law Firm on December 8

2025 that “given that up to now through criminal and civil enforcement the Company hascumulatively recovered CNY 409 million. At the same time it is expected that further recoveries of up

to approximately CNY 10 million may be achieved in the future. The estimated actual loss arising from

the irregular deposits in the three aforementioned places is approximately CNY 80 million. Thus it is

suggested that the total amount of bad debt provision for the irregular deposits in the threeaforementioned places was CNY 80 million” the Company has made a bad debt provision of CNY 80

million for saving deposits involving contract disputes as of the end of the period and the amount of

the bad debt provision may be adjusted in the future based on the litigation process and recovery.

19. Notes to the main Items of the financial statements of parent

company (all currency units are CNY except other specific statements)

19.1. Accounts receivable

19.1.1. Disclosure by aging

Unit: CNY

Aging Closing book balance Opening book balance

Within 1 year (including 1 year) 3745603.93 7840.91

1 to 2 years 6605.52 14400.03

2 to 3 years 7794.51

Total 3760003.96 22240.94

19.1.2. Disclosure by withdrawal methods for bad debts

Unit: CNY

Closing Balance Opening Balance

Book balance Provision for baddebt Book balance

Provision for bad

Type Book debt Book

Amount Proportion Amount

Proporti value Amount Proporti Amount Proporti valueon on on

Inclu

ding:

Account

s

receiva

ble

tested 37600 100.00 189499 35705 22240. 100.00 1832.0 20408.

5.04% 8.24%

for 03.96 % .65 04.31 94 % 4 90

impairm

ent by

the

portfolio

Inclu

ding:

Account

s

receiva

ble

tested

for

impairm

ent on 37600 100.00 189499 35705 22240. 100.00 1832.0 20408.5.04% 8.24%

the 03.96 % .65 04.31 94 % 4 90

portfolio

with

charact

eristics

of credit

risk

37600 100.00 189499 35705 22240. 100.00 1832.0 20408.

Total 5.04% 8.24%

03.96 % .65 04.31 94 % 4 90

The category name of provision for bad debt by the portfolio: Accounts receivable tested for

impairment on the portfolio with characteristics of credit risk

Unit: CNY

Closing Balance

Name

Book balance Provision for bad debt Proportion

Risk portfolio 3760003.96 189499.65 5.04%

Including: within 1 year 3745603.93 187280.20 5.00%

1-2 years 6605.52 660.55 10.00%

2-3 years 7794.51 1558.90 20.00%

Other portfolio

Total 3760003.96 189499.65

Notes to the determination basis for the portfolio:

Accounts receivable of the same age exhibit similar credit risk characteristics.If adopting the general mode of expected credit loss to withdraw provision for bad debt of accounts

receivable

□Applicable □ N/A

19.1.3. Provision and recovery for bad and doubtful debt in the current period

Allowance of provision for bad debt:

Unit: CNY

Type Opening

Changes in current period Closing

Balance Allowance Reversal or Balancerecovery Write-off Other

Provision by

individual item

Provision by

1832.04 188059.65 392.04 189499.65

risk portfolio

Total 1832.04 188059.65 392.04 189499.65

Of which significant amount of recovered or transferred-back bad debt provision for the current period:

There is no significant provision in accounts receivable reversed or recovered in the reporting period.

19.1.4. Accounts receivable written-off in the current period

Notes to write-off of accounts receivable:

There were no accounts receivable written-off in the current period.

19.1.5. Top five entities with the largest balances of accounts receivable and contract assets

Unit: CNY

Proportion to Closing balance

Closing balance total closing

Closing balance Closing balance of provision for

of accounts balance of

Company name of accounts of contract bad debt

receivable and accounts

receivable assets provision of

contract assets receivable and accounts

contract assets receivable and

impairment

allowance of

contract assets

Luzhou Jiaxin

Holding

2381000.00 2381000.00 63.33% 119050.00

Management

Co. Ltd.Luzhou Laojiao

1256183.53 1256183.53 33.41% 62809.18

Group Co. Ltd.China

Construction

Fifth Engineering

101890.80 101890.80 2.71% 5094.54

Bureau Third

Construction

Co. Ltd.Wang Huiying 14400.03 14400.03 0.38% 2219.45

China Railway

22nd Bureau

Group Co. Ltd. 6529.60 6529.60 0.17% 326.48

Chongqing

Branch

Total 3760003.96 3760003.96 100.00% 189499.65

19.2. Other receivables

Unit: CNY

Item Closing Balance Opening Balance

Dividend receivable 56365904.97

Other receivables 13491539475.88 12687994073.65

Total 13547905380.85 12687994073.65

19.2.1. Dividend receivable

19.2.1.1. Classification of dividend receivable

Unit: CNY

Item (investee) Closing Balance Opening Balance

Guotai Haitong Securities Co. Ltd. 4121948.95

Huaxi Securities Co. Ltd. 46108463.34

China Tourism Group Duty Free

494532.68

Corporation Limited

Luzhou Bank Co. Ltd. 5640960.00

Total 56365904.97

19.2.2. Other receivables

19.2.2.1. Other receivables disclosed by nature

Unit: CNY

Nature Closing book balance Opening book balance

Intercompany funds of subsidiaries in 13478554550.85 12674256978.12

the consolidation scope

Intercompany funds and others 2051298.46 2600905.95

Saving deposits involving contract

91110008.99 91351645.65

disputes 1

Total 13571715858.30 12768209529.72

Note: 1 The saving deposits involving contract disputes refer to three deposits amounting to CNY

500000000.00 with Changsha Yingxin Sub-branch of Agricultural Bank of China and Nanyang

Zhongzhou Sub-branch of Industrial and Commercial Bank of China disclosed by the Company in

2014. The deposits have lost the nature of monetary fund due to their involvement in contract

disputes and have thus been transferred into “other receivables”. As of June 30 2026 the closing

balance of that fund was CNY 91110008.99.

19.2.2.2. Disclosure by aging

Unit: CNY

Aging Closing book balance Opening book balance

Within 1 year (including 1 year) 13480488799.31 12676568788.72

1-2 years 19800.00 203215.35

2-3 years 24450.00 6200.00

Over 3 years 91182808.991 91431325.65

4-5 years 6880.00

Over 5 years 91182808.99 91424445.65

Total 13571715858.30 12768209529.72

Note: 1 Other receivables with significant single amount exceeding three years in age relates to

saving deposits of CNY 91110008.99 which are yet to be recovered due to contract disputes.

19.2.2.3. Disclosure by withdrawal methods for bad debts

Unit: CNY

Closing balance Opening Balance

Provision for bad Provision for bad

Book balance Book balance

Type debt Book debt Book

Proporti Proporti value Proporti Proporti value

Amount Amount Amount Amount

on on on on

Provisio

n for

bad 91110 80000 11110 91351 80000 11351

0.67% 87.81% 0.72% 87.57%

debt by 008.99 000.00 008.99 645.65 000.00 645.65

individu

al item

Inclu

ding:

Other

receiva

bles 91110 80000 11110 91351 80000 11351

0.67% 87.81% 0.72% 87.57%

that are 008.99 000.00 008.99 645.65 000.00 645.65

individu

ally

material

and for

which a

separat

e

provisio

n for

bad

debts

has

been

made

Provisio

n for

13480 13480 12676 12676

bad 176382 215456

605849 99.33% 0.00% 429466 857884 99.28% 0.00% 642428

debt by .42 .07.31 .89 .07 .00

the

portfolio

Inclu

ding:

Other

receiva

bles

tested

for

impairm

13480 13480 12676 12676

ent on 176382 215456

605849 99.33% 0.00% 429466 857884 99.28% 0.00% 642428

the .42 .07.31 .89 .07 .00

portfolio

with

charact

eristics

of credit

risk

13571 13491 12768 12687

100.00 80176 100.00 80215

Total 715858 0.59% 539475 209529 0.63% 994073

% 382.42 % 456.07.30 .88 .72 .65

The category name of provision for bad debt by individual item: Other receivables that are individually

material and for which a separate provision for bad debts has been made

Unit: CNY

Opening Balance Closing Balance

Name Provision for Provision for

Book balance Book balance Proportion Reason

bad debt bad debt

Saving

deposits Provision

involving 91351645.65 80000000.00 91110008.99 80000000.00 87.81% based on

contract legal opinion

disputes

Total 91351645.65 80000000.00 91110008.99 80000000.00

The category name of provision for bad debt by the portfolio: Other receivables tested for impairment

on the portfolio with characteristics of credit risk

Unit: CNY

Name Closing Balance

Book balance Provision for bad debt Proportion

Risk portfolio 2051298.46 176382.42 8.60%

Including: within 1 year 1934248.46 96712.42 5.00%

1-2 years 19800.00 1980.00 10.00%

2-3 years 24450.00 4890.00 20.00%

3-4 years

4-5 years

Over 5 years 72800.00 72800.00 100.00%

Other portfolio 1 13478554550.85

Total 13480605849.31 176382.42

Note: 1 Other portfolios represent inter-subsidiary funds within the scope of consolidation in respect

of receivables which are deemed risk-free and thus no bad debt provision is made.Notes to the determination basis for the portfolio:

Accounts receivable of the same age have similar credit risk characteristics.Provision for bad debt adopting the general mode of expected credit loss:

Unit: CNY

First stage Second stage Third stage

Provision for bad Expected loss in theExpected credit loss Expected loss in the

debt duration (credit

Total

of the next 12 duration (credit

impairment not

months impairment occurred)

occurred)

Balance of January

215456.07 80000000.00 80215456.07

1 2026

Balance of January

1 2026 in the current

period

Allowance of the

7286.93 7286.93

current period

Reversal of the

46360.58 46360.58

current period

Balance of June 30

176382.42 80000000.00 80176382.42

2026

The basis for the division of each stage and the withdrawal proportion of bad debt provision

The basis for division is that other receivables with single bad debt provision represent credit

impairment losses incurred since initial recognition (Stage 3) while the remaining portion is

categorized based on aging portfolio. Withdrawal proportions of bad debt provision are 0.001% for

Stage 1 and 87.81% for Stage 3 totaling 0.59%.Changes of book balance with significant amount changes of loss provision in the current period

□Applicable □ N/A

19.2.2.4. Provision and recovery for bad and doubtful debt in the current period

Allowance of provision for bad debt:

Unit: CNY

Type Opening

Changes in current period Closing

Balance Allowance Reversal or Write-off or Other Balancerecovery verification

Other

receivables

tested for 80000000.00 80000000.00

impairment

individually

Other

receivables

tested for 215456.07 7286.93 46360.58 176382.42

impairment by

the portfolio

Total 80215456.07 7286.93 46360.58 80176382.42

Of which significant amount of recovered or transferred-back bad debt provision for the current period:

There is no significant provision in other receivables reversed or recovered in the reporting period.

19.2.2.5. Top five entities with the largest balances of the other receivables

Unit: CNY

Provisioning

Company Name Nature Closing Balance Aging Proportion intotal receivables amount at periodend

Luzhou Laojiao

Internal

Baijiu Production 13072318858.02 Within 1 year 96.32%

transactions

Co. Ltd.Luzhou Laojiao

Import and Internal

337242520.27 Within 1 year 2.48%

Export Trade transactions

Co. Ltd.Saving deposits Saving deposits

involving involving 91110008.99 Over 5 years 0.67% 80000000.00

contract disputes contract disputes

Guangxi Luzhou

Laojiao Imported Internal

Liquor Industry transactions 51672831.90 Within 1 year 0.38%

Co. Ltd.Luzhou Laojiao

Internal

Health Baijiu 13556329.52 Within 1 year 0.10%

transactions

Industry Co. Ltd.Total 13565900548.70 99.95% 80000000.00

19.2.2.6. Presentation in other receivables due to the centralized management of funds

Other statements:

There were no other receivables presented due to the centralized management of funds in the current

period.

19.3. Long-term equity investments

Unit: CNY

Closing Balance Opening Balance

Item

Book balance Provision for Provision forimpairment Book value Book balance impairment Book value

Investment in 4001955727 4001955727 3997837147 3997837147

subsidiary .63 .63 .01 .01

Investment in

associates 2970796683 2968229584 2913573576 2911006477

and joint 2567098.80 2567098.80.47 .67 .15 .35

venture

6972752411 6970185312 6911410723 6908843624

Total 2567098.80 2567098.80.10 .30 .16 .36

19.3.1. Investment in subsidiary

Unit: CNY

Opening Changes in current period Closing

Opening balance of Closing balance of

Balance provision Provision Balance provision

Investee

(book for forIncrease Decrease Other (book for

value) impairmen impairmen value) impairmen

t t t

Luzhou

Pinchuang 1039801 1040125

32475.18

Technolog 09.05 84.23

y Co. Ltd.Luzhou

Laojiao 3542759 3380565. 3576565

Sales Co. 61.17 56 26.73

Ltd.Luzhou

Laojiao

3406981 493589.5 3407474

Baijiu

342.29 8 931.87

Productio

n Co. Ltd.Luzhou

Laojiao

Internation

al 1560005 1565841

58366.80

Developm 2.25 9.05

ent (Hong

Kong)

Co. Ltd.Luzhou

Laojiao

6113818 6113818

Electronic

3.23 3.23

Commerc

e Co. Ltd.Luzhou

Laojiao

3172000 146016.9 3186602

New

8.87 0 5.77

Retail Co.Ltd.Luzhou

Laojiao

Health 1214149 1214905

7566.60

Baijiu 0.15 6.75

Industry

Co. Ltd.Luzhou 1200000 1200000

Laojiao 0.00 0.00

Cultural

Tourism

Developm

ent Co.Ltd.

3997837 4118580. 4001955

Total

147.01 621 727.63

Note: 1 Other increases in the current period are due to the Company's restricted share incentive

business where the parent company (the settlement enterprise) is an investor in the recipient

subsidiary (the service enterprise) and is recognized as a long-term equity investment in the

subsidiary (the recipient service enterprise) based on the fair value of the equity instruments at the

date of grant and the capital reserve (other capital reserves) is recognized at the same time.

19.3.2. Investment in associate and joint venture

Unit: CNY

Changes in current period

Openi Gain Adjust Closin