Shenzhen Topband Co. Ltd.Semi-annual Report 2026
Semi-annual Report
Shenzhen Topband Co. Ltd.Stock code
August 2026
T1opbandSection I Important Notes Contents and Definitions
The Board of Directors directors and senior executives of the Company hereby assure that
the content set out in the Semi-annual Report is true accurate and complete. It shall be free from
false records misleading statements or major omissions and shall bear individual and joint legal
liabilities therein.Wu Yongqiang Chairman of the Company and Luo Muchen the person in charge of
accounting work and head of the accounting department (accounting supervisor) hereby declare
that: the data disclosed in financial reports of the Semi-annual Report is true accurate and
complete.All directors have attended the Board Meeting at which this Semi-annual Report was
scrutinized.Forward-looking statements such as future plans and development strategies covered in the
Report involve uncertainties so they do not represent the Company's profit forecasts nor are they
regarded as the substantive commitment to investors.The Company is not faced with significant risks affecting its financial position and
sustainable profitability but may be with such risks as adverse effects on business confidence and
investment due to trade frictions and geopolitical tensions technology upgrading fluctuations in
the prices of raw materials fluctuations in exchange rates and customer credit risks. For more
detailed risk information please see "Risks faced by the Company and countermeasures" in
Section III of the Report. Investors are kindly requested to be alert to investment risks.The Company plans not to pay cash dividend to issue bonus shares or to increase the share
capital by capital reserve.The Report is prepared in Chinese and translated into English. Should there be any
discrepancies or misunderstandings between the two versions the Chinese version shall prevail.Contents
Section I Important Notes Contents and Definitions... 2
Section II Company Profile and Primary Financial I....7
Section III Management Discussion and Analysis ......11
Section IV Corporate Governance Environment and So.. 43
Section V Important Matters ........................ 48
Section VI Share Change and Shareholders ........... 56
Section VII Relevant Information of Bonds ...........62
Section VIII Financial Report .......................63
Directory of documents for future reference
I. Accounting statements containing the signatures and seals of the legal representative the
finance chief and the accounting department head.II. The originals of all the company documents publicly disclosed in newspapers designated by
the CSRC during the Reporting Period and the original manuscripts of announcements.III. Original copy of the Semi-annual Report 2026 bearing the signature of the Chairman.All the above documents are ready and complete and are available for reference at the office of
the Board of Directors of the Company.Interpretations
Terms Contents
Company the Company or
Topband Refer to Shenzhen Topband Co. Ltd.RMB RMB ten thousand and
RMB hundred million Refer to RMB RMB ten thousand and RMB hundred million
CSRC Refer to China Securities Regulatory Commission
Exchange Refer to Shenzhen Stock Exchange
Reporting Period Refer to From January 1 2026 to June 30 2026
Articles of Association Refer to The Articles of Association of Shenzhen Topband Co. Ltd.Huizhou Topband Refer to Huizhou Topband Electrical Technology Co. Ltd.YAKO Automation Refer to Shenzhen YAKO Automation Technology Co. Ltd.Allied Refer to Shenzhen Allied Control System Co. Ltd.Topband Software Refer to Shenzhen Topband Software Technology Co. Ltd.ORVIBO Refer to Shenzhen ORVIBO Technology Co. Ltd.Ningbo Topband Refer to Ningbo Topband Intelligent Control Co. Ltd.Meanstone Intelligent Refer to Shenzhen Meanstone Intelligent Technology Co. Ltd.Hong Kong Topband Refer to Topband (Hong Kong) Co. Ltd.Topband Romania Refer to Topband Smart Europe Company Limited
Topband Mexico Refer to Topband Mexico Company Limited
Topband Battery Refer to Shenzhen Topband Battery Co. Ltd.Four electrics and one network Refer to Electric control motor battery power and IoT platform
AI Refer to Artificial Intelligence
AIoT Refer to Artificial Intelligence + Internet of Things (AI + IoT)
BLDC Motor Refer to Brushless DC Motor
Cell Refer to Cell without a protection circuit board
BMS Refer to Battery Management System for monitoring battery status
PACK Refer to Battery packs
BG BU Refer to Business Group Business Unit
IPD Refer to Integrated Product Development
ISC Refer to Integrated Supply Chain
PCS Refer to Power Conversion System for controlling discharge/charge and current directionchange
EMS Refer to Energy Management System for monitoring the status of the energy system
PaaS Refer to Platform as a Service providing a computing platform and solution services
Original Design Manufacturer a manufacturer that completes product design and
ODM Refer to development independently produces it according to the brand owner's needs and sells
the final product in the brand owner's name
Tier1 Refer to The first tier
LTC Refer to Lead to Cash
1-N Refer to Quickly respond to customers' customized development needs based on existingplatforms where "0-1" (IPD) refers to independent product development
OTD Refer to Order to Delivery
S&OP Refer to Sales & Operations Planning
Section II Company Profile and Primary Financial Indicators
I. Company profile
Stock Abbreviation Topband Stock code 002139
Listed stock exchange Shenzhen Stock Exchange
Chinese name of the Company Shenzhen Topband Co. Ltd.Chinese abbreviation of the
Topband
Company name (if any)
Name of the Company in foreign
Shenzhen Topband Co. Ltd.language (if any)
Abbreviation of the Company
Topband
name in foreign language (if any)
Legal representative of the
Wu Yongqiang
Company
II. Contact person and contact information
Secretary of the Board of Directors Representative of securities affairs
Name Wen Zhaohui Zhang Yuhua
Topband Industrial Park No. 1 Yongteng Topband Industrial Park No. 1 Yongteng
Address Third Road Tangtou Community Shiyan Third Road Tangtou Community Shiyan
Sub-district Bao'an District Shenzhen Sub-district Bao'an District Shenzhen
Tel 0755-26957035 0755-26957035
Fax 0755-26957440 0755-26957440
Email wenzh@topband.com.cn zhangyuhua@topband.com.cn
III. Miscellaneous
1. Contact information of the Company
Whether the registered address office address and its postal code website e-mail address and other information
of the Company have changed during the Reporting Period
□ Applicable□ Not applicable
The registered address office address and its postal code website E-mail address etc. of the Company were
not changed during the Reporting Period and are as given in the Annual Report 2025.
2. Information disclosure and storage place
Whether the information disclosure and storage locations of the Semi-annual Report have changed during the
Reporting Period
□ Applicable□ Not applicable
The stock exchange website and the names and websites of the media on which the Semi-annual Report of the
Company was disclosed and the location where the Semi-annual Report of the Company is kept were not
changed during the Reporting Period and are as given in the Annual Report 2025.
3. Other relevant information
Whether other relevant information of the Company has changed during the Reporting Period
□ Applicable□ Not applicable
IV. Main accounting data and financial indicators
Whether the Company is required to retroactively adjust or restate the accounting data of previous years
□ Yes□ No
Increase or decrease in the
Same period of last
Reporting period Reporting Period over the
year
same period of last year
Revenue (RMB) 5808802405.34 5502335729.18 5.57%
Net profit attributable to shareholders of
128802409.01 330078194.08 -60.98%
listed companies (RMB)
Net profit attributable to shareholders of
listed companies after deducting non- 111236959.68 310205414.77 -64.14%
recurring profit and loss (RMB)
Net cash flow from operating activities
-101158749.88 353354566.49 -128.63%
(RMB)
Basic earnings per share (RMB/share) 0.10 0.27 -62.96%
Diluted earnings per share (RMB/share) 0.10 0.27 -62.96%
Weighted return on average equity 1.86% 4.82% -2.96%
Change at the end of the
End of the Reporting End of the previous Reporting Period compared
Period year with the end of the previous
year
Total assets (RMB) 15053237544.62 13567607196.90 10.95%
Net assets attributable to shareholders of
6987316750.25 6982243877.55 0.07%
listed companies (RMB)
The Company may disclose its net profit after deducting the impact of share-based payment if it has an equity
incentive or employee stock ownership plan.Increase or decrease in the
Key accounting data Reporting period Same period of last year current period over the same
period of last year
Net profit after deducting the impact of
156931495.75 382525364.47 -58.97%
share-based payments (RMB)
V. Differences in accounting data under domestic and foreign accounting standards
1. Differences in net profit and net assets between financial statements disclosed in accordance with
International Accounting Standards and those disclosed in accordance with PRC GAAP at the same time
□ Applicable□ Not applicable
There is no difference in net profit and net assets between financial statements disclosed in accordance with
International Accounting Standards and those disclosed in accordance with PRC GAAP during the Reporting
Period.
2. Difference between the net profit and net assets in the financial statements disclosed in accordance
with both foreign accounting standards and Chinese accounting standards at the same time
□ Applicable□ Not applicable
There is no difference in net profit and net assets between financial statements disclosed in accordance with
Overseas Accounting Standards and those disclosed in accordance with PRC GAAP during the Reporting
Period.VI. Items and amount of non-recurring profit and loss
□ Applicable □ Not applicable
Unit: RMB
Items Amount
Profits and losses on disposal of non-current assets (including the write-off portion of the provision for asset
-2596083.06
impairment)
Government grants credited to income statement (except for government grants that are closely related to the
normal operation of the Company comply with national policies and regulations enjoy in accordance with 8986523.49
determined criteria and have a continuous impact on the profit and loss of the Company)
Profits and losses due to fair value changes arising from the financial assets and liabilities held by the non-
financial business as well as the profits and losses arising from the disposal of financial assets and liabilities 13314372.05
except for the effective hedging business related to the normal business of the Company
Other non-operating income and expenses other than those mentioned above 213563.06
Minus: amount affected by income tax 2352029.98
Amount affected by minority shareholders' equity (after tax) 896.23
Total 17565449.33
Details of other items of profits and losses that conform to the definition of non-recurring profit and loss:
□ Applicable□ Not applicable
None.Explanation of defining the non-recurring profit and loss items listed in the Explanatory Announcement No. 1
on Information Disclosure for Companies Offering Their Securities to the Public – Non-recurring Profit and
Loss as recurring profit and loss items
□ Applicable□ Not applicable
There is no such situation of defining the non-recurring profit and loss items listed in the Explanatory
Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public - Non-
recurring Profit and Loss as recurring profit and loss items in the Company.Section III Management Discussion and Analysis
I. Main business engaged by the Company during the Reporting Period
Adhering to the core values of "Agility Innovation and Partnership" and based on the core technology
system of the "four electrics and one network + AI" the Company develops the intelligent control and
autonomous intelligence businesses serves the three major industries of tools and home appliances automotive
and high-end equipment and new energy and keeps implementing the intelligence low-carbon and
internationalization strategy.Business Structure of the Company
Intelligent control business Autonomous intelligence
business
Tools and home Automotive and high- New energy Cloud storage Cloud charging Others
appliances end equipment
Technology-driven Technology-driven
"Four electrics and one network" + AI
Electronic control Motor technology Battery technology Power source IoT platform AI technology
technology technology
Core technology: "four electrics and one network + AI" technology platform
Electric control technology: integrating sensing power electronics signal processing communication
human-computer interaction and other technologies to achieve the intelligent control of terminal products with
microprocessors being the core. The Company has established hundreds of electric control technology platforms
which are applied widely to products such as controllers mechatronics power sources and intelligent batteries.Motor technology: The Company pursues continuous iteration with focus on the four major indicators of
high efficiency low noise high precision and high reliability and has established product platforms such as
brushless DC (BLDC) motors hollow cup motors (including brushed hollow cup motors and brushless slot-less
motors) switched reluctance motors servo motors and stepper motors as well as full-process capabilities from
design simulation and testing verification to large-scale intelligent manufacturing.Battery technology: The Company has formed complete design development and production capabilities
from cell technology and battery management systems (BMSs) to battery packs. BMSs achieve the real-time
monitoring and management of battery status through advanced algorithms and are applied widely to energy
storage power backup battery swapping portable devices and other scenarios.Power technology: covering analog power supply switching power supply digital power supply and
server power supply technologies and products such as power conversion systems (PCSs) photovoltaic
inverters high-power DC charging piles and efficient server power sources for AI data centers and meeting
multi-scenario power conversion demand from new energy to computing infrastructure.IoT platform: covering complete technological capabilities from modules and intelligent terminals to apps
and PaaS keeping evolving toward AIoT and endowing products with perception learning and autonomous
decision-making capabilities. The Company has built a home energy management cloud platform and a digital
energy management cloud platform supporting intelligent collaboration and data operations for energy storage
charging photovoltaic and other devices.AI technology: The Company regards AI as the capability base that runs through the "four electrics and
one network" and focuses on three directions: The first is product intelligence where AI algorithms are
embedded into controllers BMSs EMSs and other products to achieve adaptive control predictive
maintenance and intelligent energy scheduling making products more intelligent as they are used; the second is
manufacturing intelligence where AI quality inspection process parameter optimization and intelligent
scheduling are deployed in the production process to improve manufacturing efficiency and quality consistency;
the third is R&D intelligence where AI is used to assist in simulation design testing and verification and
knowledge management to accelerate product development and iteration.
1. Intelligent control business
The Company's intelligent control business mainly includes the R&D production and marketing of
intelligent controllers high-efficiency motors battery packs and other products and the supply of core
components and solutions for industries such as tools and home appliances automotive and high-end
equipment and new energy.1.1 Tools and home appliances
The Company is deeply involved in the tool and home appliance industry and provides global brand
customers with full process services from product conceptualization design and development to manufacturing
and delivery and the four core types of components supplied are controllers motors batteries and power
sources. Tools cover electric tools garden tools and professional tools; home appliances cover a full range of
categories including HVAC ice washing large kitchen appliances cleaning appliances personal healthcare etc.with a stable global layout of customer resources.Tools and home
appliances
Application
scenarios
Company
products
1.2 Automotive and high-end equipment
The automotive and high-end equipment industry is a highly flexible future growth direction for the
Company covering directions such as vehicles industry and robotics and AI datacenter energy. In terms of
vehicles the Company is cooperating deeply with top automakers supplying motor products that cover
scenarios such as LiDAR intelligent cockpits thermal management and entertainment devices and keeps
scaling up vehicle charging infrastructure. In terms of robotics the Company has built a complete servo drive +
motor + motion control product platform and reserved dexterous hand actuator capabilities for active
cooperation with top machine manufacturers. Meanwhile the Company has developed dexterous hand products
independently. This solution is currently in the early stage of internal technical verification and exploration for
application to its own intelligent manufacturing lines with focus on integrating and verifying the Company's
core technological capabilities in the fields of motors drives and algorithms. In terms of industry the Company
supplies servo drives and motor products to industries such as 3C electronics medical equipment machine tools
and semiconductors and has achieved large-scale supply; in terms of AI datacenters the Company has entered
core infrastructure in multiple aspects with products such as controllers and motors; currently the Company
established cooperation with top domestic and overseas manufacturers covering scenarios such as backup
power sources and liquid cooling which is expected to become a new source of growth.Automotive and high-
end equipment
Application
scenarios
Company
products
1.3 New energy
The new energy industry is a core driving direction with high growth potential for the Company covering
two major tracks: energy storage and two-wheeled electric vehicles. In terms of energy storage the component
layer covers cells BMSs PCSs and EMSs and the complete machine layer covers a full range of products such
as home energy storage industrial and commercial energy storage and communication backup power; in terms
of two-wheeled electric vehicles the Company provides motor and intelligent control solutions to mainstream
domestic and overseas brands and has established a stable global customer base.New energy
Application
scenarios
Company
products
2. Autonomous intelligence business
As the second growth curve for the Company the autonomous intelligence business based on hardware
pivoted on the cloud and driven by AI with data constantly circulating among them allowing products to move
from passive response to autonomous decision-making and making them increasingly intelligent as they are
used. As the first batch of autonomous intelligence products of the Company cloud storage and cloud charging
products have been developed and launched successfully and bulk sale has been achieved.Based on full-chain self-developed core technologies cloud storage and cloud charging products cover
self-developed BMSs PCSs charging power modules and energy control units at the hardware level with
independently controllable key components and underlying algorithms; the cloud-based EMS energy
management platform can perceive the real-time status of the power grid loads and devices and decide on
charging and discharging strategies independently; operational data keeps feeding back AI iteration enabling
the system to achieve autonomous evolution. Cloud storage products cover home and industrial and
commercial energy storage while cloud charging products cover DC charging piles. They are delivered
modularly through the three-layer architecture of "complete machine + scenario solution + cloud platform data"
covering scenarios such as home green energy commercial complex storage and charging and zero-carbon
parks.Meanwhile leveraging 30 years of technological accumulation and market insights the Company has set
its sights on new future blue ocean markets continuously expanding its product line of other AI-powered
devices. Its products cover both household and commercial scenarios including AI-powered devices such as the
SimpleCharm AI beauty instrument and the Chuji commercial cooking robot which have achieved significant
growth. In June 2026 the Company officially launched the industry's first toilet robot named Yueban focusing
on rigid needs and pain points of the elderly and disabled in toilet use and filling in a market gap in this
segment.Products in the autonomous intelligence business have functions such as data collection and analysis
autonomous learning and decision-making suggestions. As the deployment scale expands massive operational
data continuously feeds back into AI iteration enabling products to evolve autonomously and become more
intelligent as they are used and enhancing the added value and technical barriers of individual products
significantly.Topband Zero-carbon Cloud
Application
function Panoramic Intelligent Coordinated Electricity
monitoring prediction control Data analysis
Virtual power plant dispatching
management Smart O&M center
Generation Demand Dynamic Demand Orderly
strategy Load Leveling control capacity response charging
expansion
Electricity trading market
EMS intelligent controller
Edge computer
Municipal power grid Photovoltaic power generation Energy storage system Charging pile Controllable load
Photovoltaic Storage Charging Application
Topband Zero-carbon Cloud – Cloud-edge-device Architecture
Interface of the Topband Zero-carbon Cloud (simulated data)
II. Analysis of core competitiveness
1. Scale barrier formed by industry leadership
The intelligent control industry is characterized by being capital and technology intensive and long
customer certification periods and top enterprises' cost production capacity and customer stickiness
advantages keep expanding. With 30 years of mass production experience the Company has formed a fully
verified product platform and manufacturing system constituting a significant scale barrier. On the customer
side the Company embeds itself deeply into the core supply chain of global top brand customers through joint
product definition early involvement in R&D and the joint formulation of delivery standards forming high
switching cost partnerships. On the production capacity side the four major domestic bases and the four major
overseas bases form a global delivery network responding to tariff fluctuations and supply chain risks
effectively.
2. "Four electrics and one network + AI" integrated technology platform
The Company is one of the few enterprises in the industry that possess full-stack technological capabilities
of electric control motor battery power supply IoT platform and AI concurrently. There are many competitors
in a single technology field but only very few enterprises can integrate the six major technologies into
integrated solutions and achieve reuse across industries and continuous iteration. The Company has hundreds
of core product platforms that have been verified through mass production which can be combined and
customized quickly based on customer needs to provide differentiated system-level solutions across industries
and form hardly replicable technological synergy advantages.
3. Agile operational system
The Company has built a customer-centric process-oriented organization around four strategic principles:
customer intimacy being innovation-driven agile operations and organizational evolution. It promotes IPD
(Integrated Product Development) processes on the R&D side and drives product development based on
customer needs; it promotes ISC (Integrated Supply Chain) transformation on the supply chain side to achieve
on-demand pull; it has established a CNAS-accredited laboratory on the quality side to provide international
certification level quality assurance; it keeps promoting intelligent upgrading on the manufacturing side to
improve efficiency and quality consistency. The operation of the above system is supported by the "Agility
Innovation and Partnership" organizational culture formed by the Company's over the past three decades – rapid
response driven by agility value creation driven by innovation and deep customer collaboration driven by the
partnership spirit. This cultural consensus integrated into the organizational DNA integrates the strategies
processes organization and global layout into a unified operational system organically making it a soft barrier
that can hardly be replicated by peers in the short term.III. Analysis of main business
Overview
During the Reporting Period the Company achieved revenue of RMB 5.809 billion a year-on-year
increase of 5.57%; a net profit attributable to shareholders of the listed company of RMB 129 million a year-
on-year decrease of 60.98%; a net profit attributable to shareholders of the listed company after deducting the
non-recurring profit and loss of RMB 111 million a year-on-year decrease of 64.14%. After excluding the
impact of exchange gain and loss the net profit attributable to shareholders of the listed company during the
Reporting Period dropped by 14.95% year on year and the net profit after deducting the non-recurring gain and
loss dropped by 15.20% year on year; the revenue in the second quarter was about RMB 3.164 billion an
increase of about 19.66% from RMB 2.644 billion in the first quarter; both the net profit attributable to
shareholders of the parent company and the net profit after deducting the non-recurring gain and loss in the
second quarter increased from the first quarter by 48.08% and 46.67% respectively indicating continuous
restoration in earnings quality.(I) Business performance by business segment
1. Intelligent control business
The Company's intelligent control business revolves around three major sectors: tools and home appliances
automotive and high-end equipment and new energy. Among them the tool and home appliance business had a
large scale and a stable customer structure; the automotive and high-end equipment business maintained rapid
growth during the Reporting Period covering automotive electronics industry and robotics AI datacenters and
other directions; the new energy business grew rapidly.
1.1 Tools and home appliances: The revenue during the Reporting Period amounted to RMB 4.28
billion a year-on-year decrease of 1.62%.* Tools sector: The revenue was RMB 2.076 billion a year-on-year increase of 0.25%
Industry situation: After experiencing channel destocking during 2022-2023 the global power tool
industry has seen recovery in demand from 2024. In 2026 it entered a stage of slowing growth and channel
inventory rebalancing. According to the White Paper on the Development of the Electric Tool Industry of China
(2025) released jointly by EVTank China YiWei Institute of Economics and the China Battery Industry
Research Institute the global annual shipment of electric tools is expected to rise to 590 million units in 2025
and the size of the global electric tool market will be about USD 56.64 billion. It is expected that the market
will maintain its steady growth trend in the future and the size of the global electric tool market will reach USD
98.7 billion by 2030. The industry exhibits two structural characteristics: First there is differentiation in
demand between the professional and consumption levels. The demand for professional tools for construction
infrastructure and AI datacenter infrastructure construction has increased and for the first time its proportion
has surpassed that of residential real estate with a structural rise in PRO-level tools. Second the substitution of
lithium-ion and cordless tools for wired and pneumatic tools continues. Meanwhile requirements such as the
U.S. IRA and EU's domestic manufacturing policy are accelerating the shift of global supply chains toward
Mexico and Southeast Asia.Customer-end changes: Leading brands continue to promote the shift of products from pneumatic
solutions to cordless solutions and professional users' requirements for battery life power and intelligence are
upgrading simultaneously. Cost and profit pressures have prompted overseas manufacturers such as Japanese
ones to accelerate their supply chain adjustments. The trend of centralized procurement from Chinese suppliers
which possess complete component capabilities and multi-regional production capacity has accelerated further
increasing the concentration of the domestic electric tool industry.Company progress: During the Reporting Period the Company intensified its efforts to develop top
customers in Japan and China reducing the risk of customer concentration; on the product end it leveraged its
one-stop platform capability of "controllers + motors + battery packs + industry solutions" to meet customers'
diverse needs and integrated core technologies such as high-speed sensor-less FOC algorithms motor magnetic
circuit simulation and thermal simulation into the overall solution enhancing customer loyalty and single-
customer value. Based on localized delivery from overseas bases in Vietnam Mexico and other regions the
Company helped customers cope with tariffs and regional supply requirements. New product categories
centered around lithium electrification cordless technology and intelligent design contributed to structural
growth.* Home appliance sector: The revenue was RMB 2.203 billion a year-on-year decrease of 3.32%.Industry trend: According to data from All View Cloud China's home appliance retail sales across all
channels amounted to RMB 425 billion in the first half of 2026. As a mature industry home appliances are
characterized by "shrinking total volume and optimized structure". The domestic "two new" policy continued
with its orientation shifting from "inclusive subsidies" to "targeted support for Class 1 energy efficiency and
core household appliances". The pattern of "domestic sales under pressure exports performing well" continued.According to customs data in the first half of 2026 China's exports of white goods (excluding color TVs)
amounted to USD 71.89 billion up 4.6% year on year. According to Regulation (EU) 2023/826 mandatory
low-power energy efficiency regulations have been implemented in Europe driving the demand for controller
iteration and upgrading.Company progress: Structural upgrading hedged against total volume pressure and value contribution
increased. Facing the contraction of the industry's overall volume the Company's revenue only experienced a
slight decline. The core driving forces come from three aspects: First the customer structure continues to be
optimized with the customer base of leading brands being continuously maintained; second the product
structure is upgraded toward higher added value with the contribution of high-end commercial applications
such as overseas commercial kitchens AI temperature controllers and floor scrubbers continuing to increase;
third domestic and foreign markets develops in a coordinated manner. This strategy is aligned with the
industry's evolutionary direction of "energy efficiency upgrading intelligentization and export globalization"
enabling the Company to achieve structural breakthroughs during the industry's downturn.The domestic market is deepening its intelligence development in directions such as green energy
conservation whole-house intelligence health scenarios home integration and small household appliances
increasing R&D investment in variable frequency technology ToF sensor AI algorithms and IoT platforms.Overseas markets are focusing on high-end commercial applications seizing opportunities in high-growth
sectors such as cleaning appliances.The product undergoes intelligent upgrading transitioning from passive execution to active
perception. The Company's proprietary controller incorporates AI environmental perception and prediction
technology and determines room temperature and use conditions in real time based on sensor data such as seat
temperature enabling more precise heating control and simplifying hardware solutions for smart toilets. The
Company has developed an AI food recognition software algorithm and explored its application in commercial
ovens propelling the product from "passive execution" to "active perception and adaptive adjustment" thereby
establishing a differentiated technological barrier.With the structural upgrading of the home appliance industry toward a low-carbon intelligent and healthy
trend coupled with the Company's continuous expansion in high-end commercial and overseas markets the
Company is expected to transform industry cycle pressures into opportunities for market share increase and
value enhancement further strengthening its growth certainty.
1.2 Automotive and high-end equipment: The revenue during the Reporting Period amounted to
RMB 604 million a year-on-year increase of 11.09%.* Automotive sector: The revenue was RMB 323 million a year-on-year increase of 17.96%
Industry trend: According to data from the Ministry of Public Security and the National Energy
Administration by the end of June 2026 the national NEV stock stood at 48.97 million units accounting for
13.19% of all vehicles marking an increase of 2.92 percentage points compared to the same period last year.
According to data from the China Association of Automotive Manufacturers from January to June 2026 the
domestic production and sale volume of NEVs reached 7.438 million and 7.446 million units respectively a
year-on-year increase of 6.7% and 7.3% respectively with a penetration rate of 49.6%. Domestic demand faced
pressure and the domestic NEV sale volume was 5.09 million units a year-on-year decrease of 13.4%. Exports
emerged as a core growth driver with 2.355 million NEVs exported in the first half year a year-on-year
increase of 120%. Overseas markets have become important growth markets for motor enterprises. The industry
has shifted from rapid expansion to competition within the existing market with the focus of competition
shifting from driving range to experience dimensions such as intelligent assisted driving and intelligent cockpits
driving the upgrading of demand for onboard micro-motors and thermal management control.LiDAR motors: During the Reporting Period LiDARs has evolved from a differentiated configuration for
high-end vehicle models to a core sensor for advanced intelligent driving marking a leap toward mass
production across multiple scenarios and opening up an incremental market for brushless motors. By the end of
June 2026 the Company had shipped about 1.7 million onboard LiDAR rotating mirror motor products ranking
top in the market.Charging piles: With liquid-cooled super-charging technology being the core the Company has built a
full-scenario product matrix covering both AC and DC charging piles. AC charging piles are available in over
20 models in product series such as the national European and American standards. Through the model of
"indirect supply to global top customers via top Tier 1 suppliers" the Company has strengthened cooperation
with overseas top automotive companies in AC charging piles and adapters. The North American market is
currently transiting from CCS to NACS. The Company's bidirectional adapters provide a low-cost
interconnection solution for existing vehicles new charging networks and ultra-fast charging ecosystems
enhancing adaptability in the American standard ecosystem.Smart cockpit motors: DC brushless motors with their advantages of silence smoothness and durability
are rapidly increasing in their deployment in fields such as seat massage multimedia screen lifting and flipping
electric side doors and electric sliding side doors with a rapid increase in penetration rate.* Industry and robotics sector: The revenue was RMB 265 million a year-on-year decrease of 0.63%.Industry: In the field of industrial automation motion control the Company has formed three major
product matrices: "stepping systems servo systems and motion control" as well as solutions for multiple
industries. During the Reporting Period the industrial control business grew faster benefiting from the upward
trend in capital expenditure in industries such as semiconductor equipment which drove the recovery of related
demand and the continuation of substitution with homemade products. Among them servo products grew by
49.9% year on year and control products grew by 119.6% year on year.
During the Reporting Period the Company continued with technological innovation and product
upgrading. The innovation and iteration of five-phase stepper bus and pulse products have fully verified product
performance and stability in numerous customer applications in industries such as healthcare and
semiconductors. Multi-in-one and integrated products continued to make a strong impact in industries like 3C
and machine tools driving sustained performance growth for the Company. Servo systems have undergone
continuous iteration focusing on high performance stability and low cost. The newly launched two-in-one
servo product series and low-voltage linear servo product series are favored by many customers contributing to
the continuous growth of the Company's servo performance. The diversification of motion control technology
has seen parallel development in Ether CAT bus technology and pulse control technology. While further
delving into conventional advantageous fields such as 3C electronics manufacturing laser equipment and CNC
machine tools the Company has expanded into high-precision control solutions in the semiconductor field
including probe stations spectroscopic machines and die bonding/co-bonding machines. This has led to
breakthrough performance for the Company's control product line in 2026.Robots: The humanoid robot industry enters an accelerated mass production stage in 2026. According to
the SAG report the global shipment of humanoid robots reached 19100 units in the first half of 2026 a year-
on-year increase of 272%. Institutions such as Nomura have raised their forecast for China's shipment in 2026
to the magnitude of 40000~50000 units indicating that the industry is approaching the milestone mass
production of 100000 units. As a core component supplier the Company collaborates directly with domestic
manufacturers of complete machines and dexterous hands by providing components such as motors and drives
and enters the mass production stage. Meanwhile through cooperation with actuator assembly enterprises it has
entered the supply chain of overseas leading enterprises to supply control product samples for humanoid robot
actuators and assist customers in verification and testing.* AI datacenter sector: The revenue was RMB 16 million a year-on-year increase of 391.80%
Industry trend: According to GII data the global AI datacenter market is expected to reach about USD
27.7-48.6 billion in 2026; the total capital expenditure of the world's nine major cloud service providers (CSPs)
is expected to surpass USD 886.7 billion in 2026 a year-on-year increase of nearly 90% which has driven the
annual growth rate of the AI server shipment up to nearly 31% in 2026. According to Bernstein Research the
rapid increase in AI rack density is driving the transition of datacenter cooling from air cooling to direct liquid
cooling. The power supply architecture is evolving toward higher density DC and higher voltage and the
introduction of 800V high-voltage direct current (HVDC) solutions will be accelerated. Driven by factors such
as the "East Data West Computing" plan the capital injection from National Integrated Circuit Industry
Investment Fund Phase III and the pressure of export control in China substitution with homemade products
continues.Company progress: Currently the focus is primarily on the two core aspects of AI datacenters: "power
supply" and "liquid cooling and heat dissipation". Leveraging the Company's technical expertise in power
sources motors and control systems it is expanding into multiple key infrastructure sectors gradually. At the
power supply equipment end the Company collaborates with global leaders in datacenter critical infrastructure
leveraging its strengths in independent power supply research and design to provide UPS power control
products. The Company is also preparing to develop 1U and 0U dual-form intelligent PDUs to meet the demand
of fine-grained power distribution management at the rack level. Additionally the Company is planning and
developing multiple products for server CRPS power sources improving its product matrix continuously. At the
liquid cooling end the Company has provided high-precision and high-reliability drive and control integrated
components for outdoor cold sources of AI datacenter liquid cooling systems helping customers generate and
deliver cold source to CDU (cooling distribution unit) efficiently and stably. Meanwhile the Company is
actively expanding control business opportunities in the field of CDU cold source delivery. The Company's
motors for AI datacenter servers have been designated by suppliers and will be applied to partition leak-proof
valve modules in liquid cooling systems.
1.3 New energy: During the Reporting Period revenue reached RMB 583 million a year-on-year increase
of 21.02%. The revenue grew rapidly and the market share accelerated.Industry trend: According to the report data from Frost & Sullivan the annual shipment volume of
global energy storage systems has reached 304.6 GWh in 2025. Looking ahead to 2030 the annual shipment of
global energy storage systems is expected to reach 804.5 GWh with a CAGR of 21.4% during 2025-2030.Within this market the CAGR of the industrial and commercial energy storage segment is even higher being
27.9% and the shipment will grow from 43.8 GWh in 2025 to 149.8 GWh in 2030. In China the bidding
energy scale of energy storage systems has grown significantly. Capacity pricing policies have been
implemented in various provinces the construction of the electricity spot market has accelerated and
documents such as the 15th Five-Year Action Plan for Carbon Peaking have been issued. The economic
efficiency and business models of energy storage projects continue to improve.Market expansion and brand recognition: During the Reporting Period the Company participated in
domestic and international exhibitions such as The smarter E Europe in Germany RE+ MEXICO 2026 CIBF
in Shenzhen and CPSE in Shanghai showcasing energy storage systems lightweight power and other product
solutions to worldwide customers. The Company has received industry recognition such as the 2025 Vico Cup –
Outstanding BMS Enterprise Award in the Energy Storage Industry and has been selected as one of the TOP 20
enterprises in industrial and commercial energy storage systems in terms of comprehensive competitiveness
and one of the TOP 10 innovative enterprises in new energy storage BMS technology in the 2026 China New
Energy Storage Application Blue Book.Product and market progress: The Company's energy storage products are widely used in both grid-side
and user-side scenarios. The Company continues to enhance key technologies such as BMS PCS and EMS
and extend its products toward energy storage systems to accommodate diverse application scenarios and
support the long-term stable operation of various energy storage projects. In terms of overseas markets the
demand for industrial and commercial energy storage in Europe continues to escalate. Emerging markets such
as South Asia are experiencing rapid growth in energy storage demand for parks driven by frequent power
outages and high costs of diesel power generation. The Company has also improved in various aspects such as
local response inventory support and product adaptability. Overall global energy storage products continue to
upgrade toward high safety liquid cooling and intelligence and the Company's product layout is highly aligned
with industry trends.Looking ahead the energy storage industry is in a golden period of rapid growth. Leveraging its core
technological advantages such as BMS and its position in the global market the Company is expected to
continue its high-growth trajectory.
2、Autonomous intelligence business: The revenue during the Reporting Period was RMB 342
million a year-on-year increase of about 170.28%.* Business positioning: A new business model that runs in parallel with the main business of intelligent
control
Artificial intelligence (AI) is deeply embedded in hardware products of the physical world. The
introduction of AI has significantly enhanced hardware capabilities in perception decision-making and
execution compared to the past. The scope of work that can be undertaken by the same type of hardware and
achieved results have both improved greatly opening up vast opportunities for innovative applications of
hardware products. The more fundamental change lies in the alteration of hardware capability attributes –
shifting from passively responding to instructions to understanding scenarios and making autonomous decisions.Against this backdrop the Company continues to develop its main business of intelligent control deeply
while developing the autonomous intelligence business. Autonomous intelligence is not a new product category
but a novel business model. Leveraging the "four electrics and one network + AI" technology foundation built
over the past three decades the Company provides customers with core components of intelligent control and
actively explores novel and extensive applications of AI in the physical world. The two businesses share the
same technological foundation and are oriented to different markets and scenarios. They support each other
rather than replacing each other and the autonomous intelligence business constitutes the Company's second
growth curve.The autonomous intelligence business is founded on hardware with the cloud being the hub and AI being
the engine. Data continuously circulates among the three enabling products to evolve from passively
responding to instructions to making autonomous decisions and becoming more intelligent as they are used.During the Reporting Period the autonomous intelligence business achieved revenue of RMB 342 million
compared to RMB 126 million in the same period of last year a year-on-year increase of about 170%. It has
transitioned from the technology incubation stage to the large-scale development stage.* Pattern core: Three-tier architecture delivery and value extension with operations
Unlike the intelligent control business which customizes and delivers core components according to
customer needs the value of the autonomous intelligence business extends beyond hardware delivery. The
Company delivers its products to the market through the three-tier architecture of "complete machines +
scenario solutions + cloud platform data": The sale of hardware is not the end of transactions but the starting
point of value creation – the device maintains continuous connection in the cloud operates in an AI-driven
manner and operational data continuously feeds back to algorithms enabling product performance and use
value to continuously improve with operational time. This model enables the Company to create value through
intelligent complete machine delivery and the continuous operation of cloud platforms in addition to one-time
component sale.This business model has been successfully implemented and achieved large-scale sale in cloud storage and
cloud charging which are also the main sources of revenue growth for its autonomous intelligence business
during the Reporting Period. Self-developed products based on full-link core technologies: At the hardware
level battery management systems (BMSs) power conversion systems (PCSs) charging power modules and
energy control units are self-developed with key components and underlying algorithms being independently
controllable; cloud-based energy management systems (EMSs) sense the grid load and equipment status in real
time and decides on charging and discharging strategies autonomously. Among them cloud storage covers
household energy storage and industrial and commercial energy storage while cloud charging covers DC
charging piles which are applied to scenarios such as household green energy commercial complex storage and
charging and zero-carbon parks. Through these two types of products the Company has successfully
established a business chain that allows it to independently define smart devices and bring them to market on a
large scale.* Pattern replication: continuously entering new scenarios with one foundation
The growth logic of autonomous intelligence business does not lie in the sales volume of a certain product
but in that this model can be continuously replicated to new scenarios along the same technological foundation.The Company has incubated the new smart device business centered around niche scenarios where demand has
not been fully met. During the Reporting Period the sales scale of products such as the SimpleCharm AI beauty
instrument and the Chuji commercial cooking robot continued to expand. The Company also released the
Yueban toilet robot which is the industry's first toilet robot designed to meet rigid care needs of the elderly and
disabled filling the market gap in this niche scenario and directly reflecting the Company's ability to define new
product categories independently. Cloud storage cloud charging and the above complete machines are forms of
this business model; the core of the model itself lies in the replicable business approach of "self-definition self-
development and self-operation". When entering every new scenario the Company accumulates richer cross-
scenario data for AI to continuously enhance its autonomous intelligence capabilities.Based on its judgment of the evolution direction of products and technologies the Company believes that
the integration of AI and hardware is gradually transforming hardware from a tool that passively responds to
instructions into an intelligent product that completes tasks autonomously and evolves itself during operation.The Company summarizes this direction as "autonomous operation and evolution" – the former refers to the
ability to make autonomous judgment and complete tasks in real-world scenarios while the latter refers to the
continuous accumulation of experience and iterative capabilities through data and algorithms obtained from
continuous operation. During the Reporting Period based on the three-tier architecture cloud storage and cloud
charging achieved a closed loop driven by cloud-based AI and fed back by operational data and the concept of
"getting more intelligent as they are used" was preliminarily verified. The tighter the cycle between hardware
cloud and AI is and the broader scenarios are covered and the faster products evolve autonomously.When developing its autonomous intelligence business the Company's focus is not on a specific product or
the current revenue scale but on opening up new sources of growth while maintaining a stable main business.The growth potential of this business lies in the breadth of the Company's continuous entry into new scenarios
and replication of its autonomous intelligence business model without being constrained by the boundaries of
any single product category.(II) Factors such as exchange rates and raw material supply affect short-term profitability
During the Reporting Period due to the fluctuation of the RMB exchange rate the Company's exchange
gains and losses shifted from a profit of RMB 46 million in the same period of last year to a loss of RMB 113
million significantly affecting the current profit. In response the Company has established an exchange rate
risk management system by flexibly adjusting overseas sales quotations utilizing financial instruments such as
forward exchange locking and hedging and converting some original US dollar settlement orders to RMB
settlement. These measures are gradually taking effect in mitigating the risk of exchange rate fluctuation.Meanwhile under the combined effect of factors such as the complex global trade environment upward shifts
in price centers of key bulk products and batteries fluctuations in raw material prices tight supply and the
ramp-up period of new businesses the Company's profitability is under temporary pressure. The gross profit
margin during the Reporting Period was 19.69% a year-on-year decrease of 2.85 percentage points.During the Reporting Period the Company's cost control efforts bore fruit: Sales expenses management
expenses and R&D expenses all decreased year on year with their total dropping by 6.39%. The Company
firmly believes in the deepening of its intelligent control business in existing industries and the expansion into
new scenarios. Meanwhile it is confident in the long-term development of its autonomous intelligence business.It continues to increase high-intensity R&D investment in innovative application fields such as AI applications
robots motors complete machines and vehicles. During the Reporting Period the R&D investment amounted
to RMB 494 million accounting for about 8.50% of the revenue.(III) The net cash flow generated from operating activities was RMB -101 million indicating that the
overall operating cash flow is at a healthy operational level.The decrease was primarily due to the Company's increased inventory of raw materials to ensure the
delivery of orders in the second half year with inventory rising by about RMB 939 million compared to the
year beginning. The cash received from selling goods and providing services in the current period amounted to
RMB 5.465 billion a year-on-year increase of 2.0%. The quality of cash receipts remained healthy and the
overall operating cash flow was at a healthy operating level.(IV) Process transformation as the foundation + multi-regional capacity layout enhancing
operational resilience in multiple dimensions
During the Reporting Period the Company initiated the three-year action plan of "customer-centric
process-oriented organizational transformation" to achieve management efficiency improvement brought about
by cross-departmental collaboration end-to-end delivery and global presence at a scale of tens of billions of
RMB. The Company's operations are centered around business processes with focus on restructuring core
processes such as LTC 1-N OTD and S&OP. This has facilitated the organization's transition from being
"function-driven" to being "process-driven". Each major BG has finalized its processes and conducted training
for all employees and is gradually moving into trial operations. Meanwhile supporting performance evaluation
reform has been initiated with focus on value customers and business success. All employees are encouraged to
speak think and act in a unified manner creating an efficient and collaborative combat system that lays a solid
organizational foundation for sustained high-quality development.During the Reporting Period the Company continued to advance its business in overseas bases such as
Vietnam Mexico India and Romania and expanded the production capacity of its Vietnam base. The global
production capacity layout has been continuously improved and the overseas delivery and localized service
capabilities have been continuously enhanced. During the Reporting Period the overseas base achieved an
output value of RMB 1.25 billion accounting for 20.86% of the total output value.YoY changes in Major Financial Metrics
Unit: RMB
YoY increase or
Reporting period Same period of last year Reason for change
decrease
Revenue 5808802405.34 5502335729.18 5.57%
Operating cost 4664809867.96 4261763382.25 9.46%
Selling expenses 212094797.72 220686080.56 -3.89%
Overheads 196025982.81 222560862.57 -11.92%
This was mainly due to
the increase in
Finance expenses 117919273.60 -38757798.52 404.25%
exchange losses during
the Reporting Period.This was mainly due to
the decrease in current
income tax expenses
Income tax expenses 9784838.57 25988052.59 -62.35%
arising from profit
decline during the
Reporting Period.R&D investment 493689114.43 524842516.77 -5.94%
This was mainly due to
the decrease in the net
cash flow from
Net cash flow from
-101158749.88 353354566.49 -128.63% operating activities
operating activities
arising from increased
payment during the
Reporting Period.This was mainly due to
the decrease in the net
Net cash flow from amount arising from
-500146128.22 -161606599.96 -209.48%
investment activities cash management
during the Reporting
Period.This was mainly due to
Net cash flow from the decrease in debt
486593630.06 -19230084.46 2630.38%
financing activities repayment during the
Reporting Period.This was mainly due to
the decrease in the net
Net increase in cash and
-169195348.98 206373931.40 -181.98% cash flows from
cash equivalents
operating and
investment activities.Significant changes in the Company's composition or source of profit in the Reporting Period
□ Applicable□ Not applicable
There was no significant change in the Company's composition or source of profit in the Reporting Period.Composition of revenue
Unit: RMB
Reporting period Same period of last year YoY
Proportion in increase or
Amount Amount Proportion in revenue
revenue decrease
Total revenue 5808802405.34 100% 5502335729.18 100% 5.57%
By industry
Intelligent control
5808802405.34 100.00% 5502335729.18 100.00% 5.57%
electronics industry
By product
1. Intelligent control 5466867342.94 94.11% 5375822376.78 97.70% 1.69%
business
Tools and home 4279732111.55 73.67% 4350273394.39 79.07% -1.62%
appliances
Automotive and high- 604205200.72 10.40% 543873042.81 9.88% 11.09%
end equipment
New energy 582930030.67 10.04% 481675939.58 8.75% 21.02%
2. Autonomous 341935062.40 5.89% 126513352.40 2.30% 170.28%
intelligence business
Cloud storage and 271140119.86 4.67% 88630238.28 1.61% 205.92%
cloud charging
Others 70794942.54 1.22% 37883114.12 0.69% 86.88%
By region
Domestic 2138688073.49 36.82% 1756187461.66 31.92% 21.78%
Overseas 3670114331.85 63.18% 3746148267.52 68.08% -2.03%
Note: The statistical basis for products in the current period has been adjusted and the data for the same period of last year has
been re-classified according to the current basis. The disclosed revenue items in the semi-annual and annual reports of last year are
based on the old basis making the itemized data incomparable but the total revenue remains unchanged.The situation of industries products or regions accounting for more than 10% of the Company's revenue or
operating profit
□ Applicable □ Not applicable
Unit: RMB
Increase or Increase or
Increase or
decrease of decrease of
Gross decrease of
operating costs gross profit
Revenue Operating cost profit revenue over
over the same margin over the
margin the same period
period of last same period of
of last year
year last year
By industry
Intelligent control 5808802405.34 4664809867.96 19.69% 5.57% 9.46% -2.86%
electronics industry
By product
1. Intelligent control
business 5466867342.94 4398364729.11 19.55% 1.69% 5.47% -2.88%
Tools and home
appliances 4279732111.55 3432289668.13 19.80% -1.62% 1.24% -2.27%
Automotive and
high-end equipment 604205200.72 442385169.45 26.78% 11.09% 12.07% -0.64%
New energy 582930030.67 523689891.53 10.16% 21.02% 35.93% -9.85%
By region
Domestic 2138688073.49 1715362552.98 19.79% 21.78% 24.40% -1.69%
Overseas 3670114331.85 2949447314.98 19.64% -2.03% 2.31% -3.41%
Note: The statistical basis for products in the current period has been adjusted and the data for the same period of last year has
been re-classified according to the current basis. The disclosed revenue items in the semi-annual and annual reports of last year are
based on the old basis making the itemized data incomparable but the total revenue remains unchanged. The Company's main
business data for the last period adjusted according to the caliber at the end of the Reporting Period when the statistical caliber of
the Company's main business data is adjusted in the Reporting Period
□ Applicable□ Not applicable
IV. Analysis of non-main business
□ Applicable □ Not applicable
Unit: RMB
Proportion in
Amount Explanation of reasons It is sustainable
total profit
Mainly due to the settlement of profits and
Investment income 13904210.37 10.04% losses for wealth management products and No
foreign exchange derivatives.Mainly due to the profit and loss from
Profit and loss from
282354.40 0.20% changes in fair value arising from foreign No
changes in fair value
exchange derivatives that have not matured.Impairment of Mainly due to the provision for inventory
-29609101.52 -21.38% No
assets depreciation.Mainly due to the compensation from
Non-operating
2806494.73 2.03% customer's breach of contract and various No
income
fines.Non-operating Mainly due to the loss of scrapping of non-
4178364.90 3.02% No
expenditure current assets.V. Analysis of assets and liabilities
1. Significant changes in asset composition
Unit: RMB
End of the Reporting Period End of the previous year Increase or
Explanation of
Proportion in Proportion in decrease in
Amount Amount major changes
total assets total assets proportion
Monetary No significant
1471349594.47 9.77% 1797447784.44 13.25% -3.48%
capital change
Accounts No significant
3367294423.88 22.37% 3024669376.01 22.29% 0.08%
receivable change
Contractual No significant
596075.63 0.00% 601601.95 0.00% 0.00%
assets change
Mainly due to
strategic
Inventory 3135760455.30 20.83% 2195746866.60 16.18% 4.65% stocking during
the Reporting
Period.Investment No significant
96308465.35 0.64% 97727652.86 0.72% -0.08%
property change
Long-term
No significant
equity 41335306.08 0.27% 40463113.36 0.30% -0.03%
change
investment
No significant
Fixed assets 2846327000.00 18.91% 2888394751.10 21.29% -2.38%
change
Construction in No significant
895992867.67 5.95% 803965663.22 5.93% 0.02%
progress change
Right-of-use No significant
36544291.24 0.24% 50405996.42 0.37% -0.13%
assets change
Mainly due to
the increase in
Short-term financing
1870542647.09 12.43% 1392469964.76 10.26% 2.17%
loans demand during
the Reporting
Period.Mainly due to
the increase in
advance
Contractual
151911777.01 1.01% 116456170.61 0.86% 0.15% payments
liabilities
during the
Reporting
Period.Long-term No significant
401740987.85 2.67% 404450000.00 2.98% -0.31%
loans change
Lease liabilities 13566691.31 0.09% 22919126.35 0.17% -0.08% No significant
change
2. Major overseas assets
□ Applicable □ Not applicable
Unit: RMB
Proportion
Control
of foreign Is there a
measures to
Reasons of Operation Earning assets to significant
Asset details Asset size Location ensure the
formation mode position net assets risk of
safety of
of the impairment
assets
Company
Financial
Operation R&D
Investment and Pune supervision
Center in 528583961.43 production 14856366.93 7.56% No
establishment India and external
India and sales
audit
Dong Nai Financial
Dong R&D
Operation Investment and 1380340594. supervision
Nai production 76287708.08 19.75% No
Center establishment 88 and external
Vietnam and sales
Vietnam audit
Financial
Mexico R&D
Investment and supervision
Operations 530645880.32 Mexico production -16032464.70 7.59% No
establishment and external
Center and sales
audit
Explanation
of other None
situations
3. Assets and liabilities measured at fair value
□ Applicable □ Not applicable
Unit: RMB
Profits and losses Changes in
Impairment Amount of
from changes in cumulative fair Amount of sale in
Items Opening balance provision in the purchase in the Other changes Closing balance
fair value in the value included in the current period
current period current period
current period equity
Financial assets
1. Tradable
financial assets
(excluding 538102481.43 1360403.64 239842362.83 1830500000.00 1408365116.37 -12500.68 961585268.02
derivative
financial assets)
2. Financing of
accounts 138461638.53 6307300.45 144768938.98
receivable
3. Other debt
40843277.78 426465.75 41269743.53
investments
4. Other equity
instrument 51622482.00 10429532.00 28000000.00 79622482.00
investments
Subtotal of
769029879.74 1360403.64 250271894.83 1858500000.00 1408365116.37 6721265.52 1227246432.53
financial assets
Total of the above 769029879.74 1360403.64 250271894.83 1858500000.00 1408365116.37 6721265.52 1227246432.53
Financial
5161.00 1078049.24 1078049.24 -5161.00 1078049.24
liabilities
Contents of other changes
None.Are there significant changes in the measurement attributes of the Company's main assets during the Reporting
Period
□ Yes□ No
4. Restricted asset rights by the end of the Reporting Period
Refer to VII. 31 in Section VIII Financial Report for details.VI. Investment analysis
1. General situation
□ Applicable □ Not applicable
Investment in the Reporting Period Investment amount in the same period of
Range of change
(RMB) last year (RMB)
28000000.00 0.00 100.00%
2. Major equity investment obtained during the Reporting Period
□ Applicable□ Not applicable
3. Major non-equity investment obtained during the Reporting Period
□ Applicable□ Not applicable
4. Investment in financial assets
(1) Securities investment
□ Applicable□ Not applicable
There was no securities investment during the Reporting Period.
(2) Derivatives investment
□ Applicable □ Not applicable
1) Derivatives investment for the purpose of hedging during the Reporting Period
□ Applicable □ Not applicable
Unit: RMB ten thousand
Proportion of
Profits and investment
Changes
losses amount at the
in Amount of Amount of
from end of the
cumulativ purchase sale during
Types of derivatives Initial investment Beginning changes in Ending period in net
e fair during the the
investment amount amount fair value amount assets of the
value Reporting Reporting
in the Company at
included Period Period
current the end of the
in equity
period Reporting
Period
Trading of foreign
363455.46 6325.92 28.24 28.24 357129.54 108659.69 254795.77 36.47%
exchange derivatives
Total 363455.46 6325.92 28.24 28.24 357129.54 108659.69 254795.77 36.47%
Explanation of accounting
policies and specific The Company has made corresponding accounting and presentation for foreign-exchange derivative transaction to be
accounting principles for done according to Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial
hedging business during Instruments Accounting Standards for Business Enterprises No. 24 - Hedge Accounting Accounting Standards for
the Reporting Period as Business Enterprises No. 37 - Presentation of Financial Instruments issued by Ministry of Finance and other
well as whether there have regulations and guides. Foreign exchange derivative contracts were initially and subsequently measured using tradable
been significant changes financial assets which fair value is priced by financial institutions based on open market trading data and there has
compared to the last been no significant change compared to the last Reporting Period.Reporting Period
Explanation of actual
The amount of our foreign exchange derivative transactions credited to the current actual profits and losses during the
profits and losses in the
Reporting Period is RMB 4.4969 million.Reporting Period
The Company conducted forward exchange transaction effectively reducing the risk of exchange fluctuations through
Explanation of hedging
reasonable RMB forward exchange transaction focusing on future transaction costs and incomes and achieving asset
effect
hedging with the aim of avoiding risks.Capital sources of
Self-own capitals
derivatives investment
I. Risk analysis of forward exchange transaction
The forward exchange transaction business carried out by the Company and its subsidiaries followed the principle of
locking in exchange rate risk and not engaging in speculative or arbitrage trading operations. However there were still
certain risks in forward exchange transaction operations:
1. Exchange rate fluctuation risk: In the event of significant fluctuations in exchange rates if the forward settlement
exchange rate stipulated in the confirmation letter for forward exchange transactions was lower than the real-time
exchange rate on the settlement day it will cause exchange losses.
2. Internal control risk: Because forward exchange transactions are highly specialized risks may arise due to
inadequate internal control systems.
3. Customer default risk: If the customer's accounts receivable are overdue and the payment cannot be collected within
the predicted payment period it will cause a delay in forward exchange settlement and result in losses for the
Company.
4. Risk of payment collection prediction: In general the Sales Department of the Company predicts payment collection
based on customer orders and expected orders. Nonetheless during the actual execution process customers may adjust
their own orders and the Company may make an inaccurate payment prediction leading to the risk of delayed delivery
Risk analysis and control
of forward exchange settlement.measures of derivatives
5. Legal risk: Changes in relevant laws or violations of relevant legal systems by counterparties may result in contracts
positions in the Reporting
being unable to be executed normally and cause losses to the Company.Period (including but not
II. Risk control measures
limited to market risk
1. The Company has formulated the Internal Control System for Forward Exchange Transactions which provides clear
liquidity risk credit risk
regulations on the Company's foreign exchange transaction operating principles approval authority internal operating
operational risk legal risk
procedures responsible departments and individuals information isolation measures and risk management for forward
etc.)
exchange transaction and can meet the needs of practical operations and its internal control and risk management
measures formulated are practical and effective.
2. The finance center and audit department of the Company as relevant responsible departments have clear
management positioning and responsibilities and responsibilities are assigned to their positions. Through this
hierarchical management the risks of single person or individual department operations are fundamentally eliminated
and the speed of risk response is also improved while effectively controlling risks.
3. To prevent delayed delivery of forward exchange transactions the Company attaches great importance to the
management of accounts receivable and actively collects accounts receivable to avoid the phenomenon of overdue
accounts receivable.
4 The Company engages in financial derivative transaction business with large commercial banks with legal
qualifications closely monitors relevant laws and regulations in the field avoiding potential legal risks.
5. The Company's forward exchange transactions must be based on a cautious prediction for foreign currency receipts
(payments) of the Company and the foreign currency amount of the forward foreign exchange transaction contract
must not exceed 90% of the annual planned total amount of foreign currency receipts (payments). The delivery period
of forward exchange transactions needs to match the Company's predicted foreign currency collection time.Changes in market price or
fair value of products of the
invested derivatives during
the Reporting Period and
the disclosure of specific
Determine changes in fair value based on market quotes from external financial institutions.methods used and relevant
assumptions and
parameters set in the
analysis of the fair value of
derivatives
Litigation (if applicable) Not applicable
Disclosure date of Board of
Directors announcement
June 23 2026
for approval of derivatives
investment (if any)
2) Derivatives investment for the purpose of speculation during the Reporting Period.
□ Applicable□ Not applicable
The Company did not have any derivatives investment for the purpose of speculation during the Reporting
Period.
5. Usage of raised capitals
□ Applicable□ Not applicable
The Company used no raised funds during the Reporting Period.VII. Sale of major assets and equity
1. Sale of major assets
□ Applicable□ Not applicable
The Company did not sell any major assets during the Reporting Period.
2. Sale of major equity
□ Applicable□ Not applicable
VIII. Analysis of major holding and equity participating companies
? Applicable□ Not applicable
Unit: RMB
Com Register
Main Operating
Company name pany ed Total assets Net assets Revenue Net profit
business profit
type capital
R&D
Huizhou
production
Topband Subs
sales import RMB 300
Electrical idiar 5967706026.06 2378117835.03 2943102158.40 -18453741.26 -4612868.75
and export of million
Technology y
electronic
Co. Ltd.components
TOPBAND R&D
SMART production
Subs
DONG NAI sales import USD 33.5
idiar 1380340594.88 746314792.88 816408471.62 82001517.36 76287708.08
(VIETNAM) and export of million
y
COMPANY electronic
LIMITED components
TOPBAND Subs R&D 2.265 528583961.43 342429360.25 249943908.11 22431884.71 14856366.93
INDIA idiar production billion
PRIVATE y sales import Indian
LIMITED and export of rupees
electronic
components
R&D
production
TOPBAND Subs
sales import USD 35
MEXICOS.D idiar 530645880.32 225177620.87 180393231.54 -14697251.76 -16032464.70
and export of million
E .L.DEC.V. y
electronic
components
Situation of acquisition and disposal of subsidiaries during the Reporting Period
□ Applicable□ Not applicable
Explanation of major shareholding companies
None.IX. Situation of structured entity controlled by the Company
□ Applicable□ Not applicable
X. Risks faced by the Company and countermeasures
1. External risks such as trade frictions and geopolitical tensions in the macro environment can also have a
negative impact on business confidence and investment. The Company may continue to face an uncertain
external environment. We will further strengthen risk identification and control across various businesses and
regions and promptly adjust strategies to minimize external impacts.
2. Technological upgrading risks: The industry of intelligent controllers which is the Company's main
business is experiencing rapid technological development in which products are upgraded quickly and have
short lifecycles. Although the Company continues to invest in R&D and has obtained multiple invention and
utility patents there is still a risk that technological upgrading may not be timely failing to meet market demand
or lagging behind competitors in new product launch reducing the Company's market share and profitability.
3. Exchange rate risks: The Company's export sales account for over 60% of its total revenue. To cope with
the risk of RMB fluctuation the Company will reduce and hedge foreign exchange risks through measures such
as conducting RMB hedging operations international procurement and repricing new products.4. Other risks: The current international and domestic macro environments are fraught with uncertainties
presenting several factors detrimental to the Company's operations such as the China-U.S. trade war potential
shortages or price hikes of raw materials labor shortage and customer credit risks all of which will bring
uncertainties to the Company's operations.XI. Formulation and implementation of the market capitalization management system and
valuation improvement plan
Did the Company establish a market value management system
□ Yes □ No
Did the Company disclose the valuation enhancement plan
□ Yes□ No
In order to strengthen the Company's market value management improve investment value and increase
investor returns the Company has formulated the Market Value Management System which was approved at
the 22nd meeting of the 8th Board of Directors on October 27 2025. The Company shall firmly establish a
sense of returning to shareholders focus on its main business improve operational efficiency and profitability
and cause the Company's investment value to reflect the Company's quality reasonably by leveraging corporate
governance M&As equity incentives employee stock ownership plans cash dividends investor relations
management information disclosure and share repurchases comprehensively. Refer to the Market Value
Management Policy disclosed by the Company on http://www.cninfo.com.cn on October 28 2025 for details.XII. Implementation of "Double Improvement of Return on Quality" Action Plan
Did the Company disclose the announcement on the action plan for "double improvement of quality and return"
□ Yes □ No
During the Reporting Period the Company firmly established the awareness of paying back to
shareholders resolutely implemented regulatory advocacy and steadfastly executed the action plan of "Double
Improvement of Return on Quality" deeply binding shareholders' interests with the Company's high-quality
development. While expanding the market it continued to strengthen internal cost control. It actively
implemented the latest regulatory requirements of the CSRC and the Shenzhen Stock Exchange to
comprehensively improve the salary management system and revised the Salary Management System for
Directors and Senior Executives to consolidate the foundation of corporate governance. It adhered to the
fundamental principle of enhancing intrinsic value and promoted value dissemination from multiple
dimensions such as business sorting and dissemination increasing market exposure actively communicating
with various investors and utilizing compliance tools allowing investors to better understand and discover the
Company's investment value. It implemented a continuous stable and proactive equity distribution policy
formulated the annual profit distribution plan 2025 and completed annual equity distribution in 2025 with cash
dividend totaling RMB 86.0153 million distributed effectively improving the dividend payout ratio. Meanwhile
the Company actively held annual performance briefings promptly responded to inquiries on the interactive
platform and hotline and enabled investors to understand company information more promptly and
conveniently. Refer to the Announcement on the "Double Improvement of Return on Quality" Action Plan
disclosed by the Company on the Securities Times and www.cninfo.com.cn on August 25 2026 for the
implementation progress of the action plan for "Double Improvement of Return on Quality" during the
Reporting Period.Section IV Corporate Governance Environment and Society
I. Changes in directors and senior executives
□ Applicable□ Not applicable
There were no changes in the directors and senior executives of the Company during the Reporting Period.Refer to the Annual Report 2025 for details.II. Profit distribution and conversion of capital surplus to share capital during the
Reporting Period
□ Applicable□ Not applicable
The Company does not plan to pay cash dividends issue bonus shares or increase share capital from capital
reserve for the first half of 2026.III. Implementation of the Company's equity incentive plan employee stock ownership plan
or other employee incentive measures
□ Applicable □ Not applicable
1. Equity incentives
Implementation of the 2024 stock option incentive plan:
(1) On November 6 2024 the Company held the 15th (Extraordinary) Meeting of the 8th Board of
Directors and the 10th (Extraordinary) Meeting of the 8th Board of Supervisors deliberated and passed the
Proposal on the Company's 2024 Stock Option Incentive Plan (Draft) and its Summary the Proposal on the
Company's Management Measures for Assessment of the Stock Option Incentive Plan for 2024 and the
Proposal on Requesting the General Meeting of Shareholders to Authorize the Board of Directors to Handle
Matters Related to the Company's Stock Option Incentive Plan for 2024 and agreed that the Company would
intend to grant a total of no more than 33 million stock options to 1200 incentive objects. All shares of this plan
come from the shares repurchased by the Company's special repurchase account. The stock options granted this
time will be exercised at a ratio of 30% 40% and 30% within 12 months 24 months and 36 months from the
date of completion of the granting and registration of the stock options. The Company held the 10th
(Extraordinary) Meeting of the 8th Board of Supervisors passed the relevant proposals and verified the list of
incentive objects in this incentive plan. The lawyer issued a legal opinion and the independent financial
consultant issued an independent financial consultant report.
(2) On November 11 2024 the Company publicly announced the names and positions of the incentive
objects in this incentive plan on the Company's internal OA office system with a publicity period from
November 11 2024 to November 20 2024. No organization or individual raised any objection to the list of
incentive objects during the publicity period. On November 21 2024 the Company disclosed the Note and
Verification Opinion of the Board of Supervisors on the Disclosure of the List of Incentive Recipients for the
2024 Stock Option Incentive Plan of the Company. The Board of Supervisors believed that the proposed
incentive objects in this incentive plan did not have the situation that relevant laws and regulations do not allow
them to be the incentive objects and met the participation qualifications within the scope of the incentive
objects in this incentive plan.
(3) On November 25 2024 the Company held the 2nd Extraordinary General Meeting of Shareholders
deliberated and passed the Proposal on the Company's 2024 Stock Option Incentive Plan (Draft) and its
Summary the Proposal on the Company's Management Measures for Assessment of the Stock Option Incentive
Plan for 2024 the Proposal on Requesting the General Meeting of Shareholders to Authorize the Board of
Directors to Handle Matters Related to the Company's Stock Option Incentive Plan for 2024 and other
proposals related to the Incentive Plan and authorized the Board of Directors to determine the grant date under
the Incentive Plan grant stock options to the incentive objects when the incentive objects meet the conditions
and handle all matters necessary for the granting of stock options.
(4) On December 9 2024 the Company held the 16th (Extraordinary) Meeting of the 8th Board of
Directors and the 11th (Extraordinary) Meeting of the 8th Board of Supervisors and deliberated and passed the
Proposal on Adjusting Matters Related to the 2024 Stock Option Incentive Plan and the Proposal on Granting
Stock Options to Incentive Objects. In view of the fact that as of the grant date of the stock options 4 of the
incentive objects originally deliberated and determined had resigned or had submitted resignation applications
and did not meet the conditions to become incentive objects and the fact that 7 incentive objects voluntarily
gave up the qualification for the stock options to be granted this time due to personal reasons a total of 100000
stock options to be granted to the above 11 incentive objects were canceled. After the adjustment the
Company's stock option incentive objects this time were 1050 people and the total number of stock options to
be granted was adjusted from 33 million to 32.9 million. The Company's Board of Supervisors reviewed the list
of incentive objects the lawyer issued a legal opinion and the independent financial consultant issued an
independent financial advisor report.
(5) On December 26 2024 after review and confirmation by the Shenzhen Stock Exchange and the China
Securities Depository and Clearing Corporation Shenzhen Branch the Company completed the registration of
32.9 million stock options to be granted under the 2024 stock option incentive plan.
(6) On June 11 2025 the Company held the 20th Meeting of the 8th Board of Directors which deliberated
and passed the Proposal on Adjusting the Exercise Price of the 2024 Stock Option Incentive Plan approving the
adjustment of the exercise price of stock options under the 2024 stock option incentive plan from RMB
9.6/share to RMB 9.53/share with no change in the number of options. The lawyer issued a legal opinion and
the independent financial consultant issued an independent financial consultant report.For details of the implementation of the 2024 stock option incentive plan refer to the announcements
disclosed by the Company on November 7 2024 November 26 2024 December 11 2024 December 27 2024
and June 12 2025 on the Securities Times and CNINFO (http://www.cninfo.com.cn).
(7) On March 31 2026 the Company held the 25th meeting of the 8th Board of Directors at which the
Proposal on the Non-fulfillment of Exercise Conditions for the First Exercise Period of the 2024 Stock Option
Incentive Plan and the Cancellation of Some Options was deliberated and passed. It was agreed that since the
company-level performance assessment in 2025 did not meet the target 9.2157 million stock options that failed
to meet the exercise conditions during the first exercise period of the incentive plan would be cancelled by the
Company. Meanwhile since 83 incentive objects resigned for personal reasons the stock options that had been
granted but not exercised by these incentive objects would not be exercised and would be cancelled by the
Company in a unified manner. The total number of stock options involved was 2.181 million. In summary a
total of 11.3967 million stock options were cancelled this time. The Remuneration and Evaluation Committee of
the Board of Directors of Company deliberated and passed the above proposal.
2. Implementation of employee stock ownership plan
□ Applicable □ Not applicable
Status of all effective employee stock ownership plans during the Reporting Period
Proportion to the
Total number Sources of funding
Scope of Number of share capital of
of stocks held Changes for implementation
employees employees the listed
(shares) of the plan
company
Directors Special incentive
(excluding funds provided for
independent by the Company
directors) and funds raised by
45 5181200 None 0.42%
supervisors senior other means as
executives and the permitted by laws
core backbone of and administrative
the Company regulations
Shareholdings of directors and senior executives in the Employee Stock Ownership Plan during the Reporting
Period
Number of stocks held Number of stocks held
Proportion to the share
at the beginning of the at the end of the
Name Position capital of the listed
Reporting Period Reporting Period
company
(shares) (shares)
Directors: Ma Wei
Zheng Sibin and Peng
Ganquan; senior Directors and senior
1300000 1300000 0.10%
executives: Wen executives
Chaohui and Luo
Muchen
Changes in asset management institutions during the Reporting Period
□ Applicable□ Not applicable
Changes in equity due to disposal of shares by holders during the Reporting Period
□ Applicable□ Not applicable
Exercise of shareholders' rights during the Reporting Period
None
Other relevant circumstances and explanations of the Employee Stock Ownership Plan during the Reporting
Period
□ Applicable□ Not applicable
Changes in members of the Employee Stock Ownership Plan Management Committee
□ Applicable□ Not applicable
Financial impact of the Employee Stock Ownership Plan on the listed company during the Reporting Period and
related accounting treatment
? Applicable□ Not applicable
According to Accounting Standards for Business Enterprises No. 11 – Share-based Payment for equity-settled
share-based payment that requires the completion of services during the waiting period or the satisfaction of
specified performance conditions before vesting in exchange for employee services on each balance sheet date
during the waiting period the services obtained in the current period shall be recorded into the relevant costs or
expenses and capital reserves based on the best estimate of the number of vesting equity instruments at the fair
value of the equity instruments on the grant date. The amortization expenses for the Company's share-based
payment incentive plan in the first half of 2026 amounted to RMB 13.4783 million which was recorded under
the relevant expense accounts and capital reserves.Termination of the Employee Stock Ownership Plan during the Reporting Period
□ Applicable□ Not applicable
Other descriptions:
None
3. Other employee incentives
□ Applicable□ Not applicable
IV. Disclosure of environmental information
Whether the listed company and its major subsidiaries are included in the list of enterprises disclosing
environmental information according to law
□ Yes□ No
V. Social responsibility
Not applicable.Section V Important Matters
I. Completed commitments in the Reporting Period and uncompleted commitments within
the time limit by the end of the Reporting Period by the Company's actual controller
shareholders related parties acquirers the Company and other committed related parties
□ Applicable □ Not applicable
Reasons for Undertaking Commitment Commitment Commitment
Commitment content Performance
commitments party type time period
Mr. Wu Yongqiang
the actual controller
of the Company has
promised that during
the period of being
the controlling
shareholder and/or
actual controller of
Commitments made Commitments the Company he Fulfill the
Wu June 12
during the initial public to horizontal would not directly or Long-term commitment
Yongqiang 2007
offering or refinancing competition indirectly engage in strictly
any business which
was the same
similar or
substantially
competitive with the
main business of the
Company at present
and in the future.Whether the
commitment was Yes
fulfilled on schedule
If the commitment was
not fulfilled within the
time limit the specific
reasons for the failure Not applicable
and the next work plan
shall be explained in
detail.II. Non-operating capital occupation of listed companies by controlling shareholders and
their related parties
□ Applicable□ Not applicable
There was no non-operating capital occupation of listed companies by controlling shareholders and their related
parties in the Reporting Period of the Company.III. External guarantee in violation of regulations
□ Applicable□ Not applicable
The Company had no external guarantee in violation of regulations during the Reporting Period.IV. Appointment and dismissal of accounting firms
Whether the semi-annual financial reports have been audited
□ Yes□ No
The Company's Semi-annual Report was not audited.V. Explanation of the "non-standard audit report" of the Accounting Firm in the Reporting
Period by the Board of Directors and the Board of Supervisors
□ Applicable□ Not applicable
VI. Explanation of the Board of Directors on the "non-standard audit report" of the
previous year
□ Applicable□ Not applicable
VII. Matters related to bankruptcy reorganization
□ Applicable□ Not applicable
There were no matter related to bankruptcy reorganization during the Reporting Period.VIII. Lawsuit
Major litigation and arbitration matters
□ Applicable□ Not applicable
The Company had no major litigation and arbitration matters during the Reporting Period.Other lawsuits
□ Applicable□ Not applicable
IX. Punishment and rectification
□ Applicable□ Not applicable
There were no penalties or rectifications during the Company's Reporting Period.X. Integrity condition of the Company its controlling shareholders and actual controllers
□ Applicable□ Not applicable
XI. Major related transactions
1. Related transactions connected with the daily operation
□ Applicable□ Not applicable
The Company had no related transactions connected with daily operations during the Reporting Period.
2. Related transactions arising from acquisition and sale of assets or equity
□ Applicable□ Not applicable
The Company had no related transaction of acquisition or sale of assets or equity during the Reporting Period.
3. Related transactions of joint foreign investment
□ Applicable□ Not applicable
The Company had no related transaction of joint foreign investment during the Reporting Period.
4. Related creditor's right and debt transaction
□ Applicable□ Not applicable
The Company had no related creditor's right and debt transaction during the Reporting Period.
5. Transactions with associated financial companies
□ Applicable□ Not applicable
There was no deposit loan credit extension or other financial business between the Company and its related
financial companies or between the related parties.6. Transactions between financial companies controlled by the Company and related parties
□ Applicable□ Not applicable
There was no deposit loan credit or other financial business between financial companies controlled by the
Company and related parties.
7. Other major related transactions
□ Applicable□ Not applicable
The Company had no other material related-party transactions during the Reporting Period.XII. Major contracts and their performance
1. Trusteeship contracting and lease
(1) Trusteeship
□ Applicable□ Not applicable
The Company had no trusteeship during the Reporting Period.
(2) Contracting
□ Applicable□ Not applicable
The Company had no contracting during the Reporting Period.
(3) Lease
□ Applicable □ Not applicable
Disclosure of lease
Refer to VII. 82 in Section VIII Financial Report of the Report for details.Item with profits and losses reaching 10% of the total profit of the Company during the Reporting Period
□ Applicable□ Not applicable
The Company had no lease item with profits and losses reaching 10% of the total profit of the Company during
the Reporting Period.2. Material guarantee
□ Applicable □ Not applicable
Unit: RMB ten thousand
External guarantee of the Company and its subsidiaries (excluding guarantee for subsidiaries)
Date of Whether
disclosure of Actua the
Name of the relevant Guarantee l date Actual Counter Whether it guarantee
Guarantee Collateral Guarantee
guarantee announceme amount of amount guarantee was objects
type (if any) period
object nt of limit occurr guaranteed (if any) completed were
guarantee ence related
amount limit parties
Guarantee of the Company to its subsidiaries
Date of Whether
disclosure of Actua the
Name of the relevant Guarantee l date Actual Counter Whether it guarantee
Guarantee Collateral Guarantee
guarantee announceme amount of amount guarantee was objects
type (if any) period
object nt of limit occurr guaranteed (if any) completed were
guarantee ence related
amount limit parties
Hong Joint
2026/
Kong 2025/8/23 20432.70 900 liability 3 years No No
Topband guaranty
Joint
Topband
2025/8/23 20000.00 liability 3 years No No
Mexico
guaranty
Total amount of
Total actual amount of
guarantee for
guarantee for
subsidiaries approved 900.00
subsidiaries during the
during the Reporting
Reporting Period (B2)
Period (B1)
Total amount of Total balance of
approved guarantee for guarantee for
subsidiaries at the end of 40432.70 subsidiaries at the end 900.00
the Reporting Period of the Reporting Period
(B3) (B4)
Guarantee of the subsidiary to its subsidiaries
Date of Whether
disclosure of the
Actual
Name of the relevant Guarante Actual Counter Whether it guarantee
date of Guarantee Collateral Guarantee
guarantee announceme e amount amount guarantee was objects
occurre type (if any) period
object nt of limit guaranteed (if any) completed were
nce
guarantee related
amount limit parties
Total amount of the corporate guarantee (i.e. the sum of the first three items)
Total incurred amount
Total amount of
of actual guarantees
guarantees approved
provided during the 900.00
during the Reporting
Reporting Period
Period (A1+B1+C1)
(A2+B2+C2)
Total amount of Total balance of
guarantee approved at guarantee at the end of
40432.70 900.00
the end of the Reporting the Reporting Period
Period (A3+B3+C3) (A4+B4+C4)
The proportion of the total actual amount of
guarantee (A4+B4+C4) in the Company's net 0.13%
assets
Including:
Balance of guarantees provided to
shareholders real controlling parties and their 0
related parties (D)
Balance of debt guarantees directly or
indirectly provided to guaranteed parties with 0
debt-to-asset ratio above 70% (E)
Amount of guarantees with total amount
0
guaranteed exceeding 50% of net assets (F)
Total amount of above 3 items of guarantees
0
(D+E+F)
Explanation of the occurrence of guarantee
liability or evidence indicating the possibility
of bearing joint and several liability for None
repayment during the Reporting Period for
unexpired guarantee contracts (if any)
Explanation of providing guarantees to
external parties in violation of prescribed None
procedures (if any)
Explanation of details of composite guarantee
None.
3. Finance management agent
□ Applicable □ Not applicable
Unit: RMB ten thousand
Amount of entrusted financial
Product category Risk profile Overdue amount not recovered
management
Bank wealth management
Low risk 17000.00 0
products
Wealth management products
Low/medium risk 30000.00 0
of securities dealers
Wealth management products
Medium- to high-risk 17500.00 0
of securities dealers
Specific situation of high-risk entrusted financial management with the significant single amount or low
security and poor liquidity
□ Applicable□ Not applicable
4. Others major contracts
□ Applicable□ Not applicable
There were no other significant contracts in the Reporting Period of the Company.XIII. Reception investigation communication interview and other activities during the
Reporting Period
□ Applicable □ Not applicable
Locatio
Method Type of Main contents of
Time of n of Basic information index for
of reception Reception object interview and
reception recepti investigation
reception object materials provided
on
Zheshang Securities Ping
An Fund Management
CCB Wealth
Management GF Asset
Management Hang Seng
Qianhai Fund
Confer
Management AXA- Learn about the
ence
SPDB Oriental Alpha operation of the
2026/03/11 room Field Organizat Fund Management Company; no http://www.cninfo.com.cn
of the survey ions
KindleFund Management information
Compa
Panjing Investment provided.ny
Timesbole Mude Asset
Qianhai Yunxi Fund
Management Foxon
Investment Zhongshan
Securities Asset
Management
Confer
Online Learn about the
ence
communi operation of the
2026/4/13 room Organizat Performance presentationcation on Company; no http://www.cninfo.com.cn
of the ions session
network information
Compa
platforms provided.ny
TF Securities Topsperity
Fund Ren Bridge Asset
Management Huatai
Securities BOSC Asset
CITIC Securities Great
Wall Fund Management
Confer Guolian Fund
Learn about the
ence Telephon Management China
operation of the
2026/4/28 room e Organizat International Capital Ping Company; no http://www.cninfo.com.cn
of the communi ions An Fund Management
information
Compa cation HuaAn Funds Guoshi
provided.ny Capital CIB Fund
Management Zhurun
Investment Xunyuan
Asset Management
Willing Capital
Management Limited
Kunlun Trust
Confer
TF Securities Franklin Learn about the
ence
Templeton Sealand Fund operation of the
2026/6/16 room Field Organizat
2026/6/17 Tianyanlun Mingcheng Company; no http://www.cninfo.com.cnof the survey ions
Fund Hotland Innovation information
Compa
Fund provided.ny
Confer
E Fund Great Wall Learn about the
ence
Securities Minmetals operation of the
2026/6/26 room Field Organizat Group Bank of Ningbo Company; no http://www.cninfo.com.cn
of the survey ions
Powership Investment information
Compa
Guotai Haitong provided.ny
XIV. Explanation of other major matters
□ Applicable□ Not applicable
The Company had no other major matters to be explained during the Reporting Period.XV. Major matters of subsidiaries of the Company
□ Applicable□ Not applicable
Section VI Share Change and Shareholders
I. Share change
1. Share change
Unit: Share
Before change Increase or decrease of change this time (+ -) After change
Conversi
on of
Stock
Proporti Issuance of accumula Proportio
Number dividen Others Subtotal Number
on new shares tion fund n
d
into
shares
I. Shares with non-
175745141 14.10% 0 0 0 0 0 175745141 14.10%
tradable conditions
1. Shares held by
0 0.00% 0 0 0 0 0 0 0.00%
the state
2. Shares held by
state-owned legal 0 0.00% 0 0 0 0 0 0 0.00%
persons
3. Shares held by
175745141 14.10% 0 0 0 0 0 175745141 14.10%
other domestic capital
Including: shares
held by domestic 0 0.00% 0 0 0 0 0 0 0.00%
legal persons
Shares held by
domestic natural 175745141 14.10% 0 0 0 0 0 175745141 14.10%
person
4. Shares held by
0 0.00% 0 0 0 0 0 0 0.00%
foreign investment
Including: shares
held by overseas legal 0 0.00% 0 0 0 0 0 0 0.00%
persons
Shares held by
overseas natural 0 0.00% 0 0 0 0 0 0 0.00%
persons
II. Shares with
unlimited tradable 1071089847 85.90% 0 0 0 0 0 1071089847 85.90%
conditions
1. A shares 1071089847 85.90% 0 0 0 0 0 1071089847 85.90%
2. Domestic listed
0 0.00% 0 0 0 0 0 0 0.00%
foreign shares
3. Overseas listed
0 0.00% 0 0 0 0 0 0 0.00%
foreign shares
4. Others 0 0.00% 0 0 0 0 0 0 0.00%
III. Total number of
1246834988 100.00% 0 0 0 0 0 1246834988 100.00%
shares
Reasons for share change
□ Applicable□ Not applicable
Approval of share change
□ Applicable□ Not applicable
Transfer of share change
□ Applicable□ Not applicable
Implementation progress of share repurchase
□ Applicable□ Not applicable
Progress in the implementation of the reduction of share repurchase through centralized bid
□ Applicable□ Not applicable
The impact of share changes on financial indicators such as basic earnings per share and diluted earnings per
share in the latest year and the latest period net assets per share attributable to ordinary shareholders of the
Company etc.□ Applicable□ Not applicable
Other contents deemed necessary by the Company or required to be disclosed by the securities regulatory
institution
□ Applicable□ Not applicable
2. Changes in non-tradable shares
□ Applicable□ Not applicable
II. Issuance and listing of securities
□ Applicable□ Not applicable
III. Number of shareholders and shareholding situation of the Company
Unit: Share
Total number of preferred shareholders
Total number of ordinary shareholders at the with voting rights restored at the end of
107303 0
end of the Reporting Period the Reporting Period (if any) (see Note
8)
Shareholding situation of shareholders holding more than 5% of the shares or top 10 shareholders (excluding shares lent through refinancing)
Number of Changes in Number of Pledge marking or
Number of
Proportio shares held increase or shares freezing
shares with
Nature of n of at the end of decrease with
Name of shareholder limited
shareholders sharehol the during the unlimited
tradable Share
ding Reporting Reporting tradable Number
conditions status
Period Period conditions
Domestic
Wu Yongqiang 17.00% 212008715 0 159006536 53002179 Pledge 83820000
natural person
Domestic Not
Ji Shuhai 1.87% 23329130 0 0 23329130 0
natural person applicable
Industrial Bank Co. Ltd. -
Not
ChinaAMC CSI Robot Others 1.49% 18558800 -20468900 0 18558800 0
applicable
ETF
China Construction Bank
Corporation - E Fund Not
Others 1.45% 18102285 -679601 0 18102285 0
China Securities Robot applicable
Industry ETF
Domestic Not
Xie Renguo 0.94% 11762903 -13838400 0 11762903 0
natural person applicable
Hong Kong Securities Overseas legal Not
0.94% 11697448 4651007 0 11697448 0
Clearing Company Ltd. person applicable
Domestic Not
Ma Wei 0.68% 8519734 0 6389800 2129934 0
natural person applicable
Domestic non-
Dongguan Onlink Industry Not
state-owned 0.58% 7265700 -94800 0 7265700 0
Co. Ltd. applicable
legal person
Guotou Securities Co. Ltd.– E Fund Guozheng New Not
Others 0.56% 7018639 2081799 0 7018639 0
Energy Battery Exchange- applicable
Traded Fund
Guotai Haitong Securities
Not
Co. Ltd. - Tianhong CSI Others 0.53% 6667496 -9632833 0 6667496 0
applicable
Robot ETF
The top 10 shareholders of strategic investors
or general legal persons due to placement of Not applicable
new shares (if any) (see Note 3)
Except that China Construction Bank Corporation – E Fund Guozheng Robot Industry Exchange-
Traded Fund (ETF) and SDIC Securities Co. Ltd. – E Fund Guozheng New Energy Battery
Explanation of the above shareholders' Exchange-Traded Fund (ETF) are managed by the same fund manager the Company is unaware of
relationship or concerted action any other related-party relationship among its shareholders or any situation where they fall under
the definition of persons acting in concert as stipulated in the Measures for the Administration of
Acquisition of Listed Companies.Explanation of the above shareholders'
entrusting/entrusted voting rights and waiver Not applicable
of voting rights
Special explanations for the existence of
At the end of the Reporting Period the Company held 18045600 shares in total through the special
special repurchase accounts among the top
securities account for repurchase accounting for 1.45% of the total equity issued by the Company.
10 shareholders (if any)
Shareholding of the top 10 shareholders with unlimited tradable conditions (excluding shares lent through refinancing and executives lock-in shares)
Type of shares
Number of shares held with unlimited tradable conditions at the end
Name of shareholder
of the Reporting Period Type of Number
shares
Wu Yongqiang 53002179 A shares 53002179
Ji Shuhai 23329130 A shares 23329130
Industrial Bank Co. Ltd. - ChinaAMC CSI
18558800 A shares 18558800
Robot ETF
China Construction Bank Corporation - E
18102285 A shares 18102285
Fund China Securities Robot Industry ETF
Xie Renguo 11762903 A shares 11762903
Hong Kong Securities Clearing Company
11697448 A shares 11697448
Ltd.Dongguan Onlink Industry Co. Ltd. 7265700 A shares 7265700
Guotou Securities Co. Ltd. – E Fund
Guozheng New Energy Battery Exchange- 7018639 A shares 7018639
Traded Fund
Guotai Haitong Securities Co. Ltd. -
6667496 A shares 6667496
Tianhong CSI Robot ETF
Shenzhen Saishuo Fund Management Co.Ltd. – Saishuo Qihang No. 2 Private 6070500 A shares 6070500
Securities Investment Fund
Explanation of the relationship or concerted Except that China Construction Bank Corporation – E Fund Guozheng Robot Industry Exchange-
action between the top 10 shareholders Traded Fund (ETF) and SDIC Securities Co. Ltd. – E Fund Guozheng New Energy Battery
without trading restriction conditions and Exchange-Traded Fund (ETF) are managed by the same fund manager the Company is unaware of
between the top 10 shareholders with trading any other related-party relationship among its shareholders or any situation where they fall under
restriction conditions and the top 10 the definition of persons acting in concert as stipulated in the Measures for the Administration of
shareholders Acquisition of Listed Companies.Explanation of the participation of the top 10
ordinary shareholders in securities margin Not applicable
trading (if any)
Participation of shareholders holding more than 5% of the shares top 10 shareholders and top 10 shareholders
with unlimited tradable conditions in lending of shares through refinancing business
□ Applicable□ Not applicable
Changes in top 10 shareholders and top 10 shareholders with unlimited tradable conditions due to lending/return
of shares through refinancing compared with the end of the previous period
□ Applicable□ Not applicable
Did the top 10 ordinary shareholders and the top 10 ordinary shareholders with unlimited sales conditions
conduct the agreed repurchase transactions during the Reporting Period
□ Yes□ No
The top 10 ordinary shareholders and the top 10 ordinary shareholders with unlimited sales conditions did not
conduct the agreed repurchase transactions during the Reporting Period.IV. Variations in shareholding of directors supervisors and senior executives
□ Applicable□ Not applicable
The shareholding of the directors supervisors and senior executives did not change during the Reporting Period.For details refer to the 2025 Annual Report.V. Variations in controlling shareholders or real controlling parties
If the Company disclosed that the actual controller planned to change the control right but the change has not
been completed in the previous period please explain the progress of the change in control right.□ Applicable□ Not applicable
Change of controlling shareholders during the Reporting Period
□ Applicable□ Not applicable
The controlling shareholder of the Company did not change during the Reporting Period.Change of actual controller during the Reporting Period
□ Applicable□ Not applicable
The actual controller of the Company did not change during the Reporting Period.VI. Information on preferred shares
□ Applicable□ Not applicable
The Company did not have preferred shares during the Reporting Period.Section VII Relevant Information of Bonds
□ Applicable□ Not applicable
Section VIII Financial Report
I. Audit report
Has the Semi-annual Report audited
□ Yes□ No
The Company's semi-annual financial report has not been audited.II. Financial statements
The unit of statements in the financial notes is: RMB
1. Consolidated balance sheet
Prepared by: Shenzhen Topband Co. Ltd.June 30 2026
Unit: RMB
Items Ending balance Beginning balance
Current assets:
Monetary capital 1471349594.47 1797447784.44
Settlement of provisions
Lending funds
Trading financial assets 961585268.02 538102481.43
Derivative financial assets
Notes receivable 32926424.36 24439539.50
Accounts receivable 3367294423.88 3024669376.01
Financing of accounts receivable 144768938.98 138461638.53
Prepayments 87679205.70 81982725.00
Premiums receivable
Reinsurance premiums receivable
Reinsurance contract reserves
receivable
Other receivables 36167841.64 48377219.07
Including: interest receivable
Dividends receivable
Repurchase of financial assets for
resale
Inventory 3135760455.30 2195746866.60
Including: data resources
Contractual assets 596075.63 601601.95
Assets held for sale
Non-current assets due within one year 5145283.31 4798251.33
Other current assets 573884443.15 526014994.63
Total current assets 9817157954.44 8380642478.49
Non-current assets:
Loans and advances granted
Debt investment
Other debt investment 41269743.53 40843277.78
Long-term receivables 13846540.45 15592885.45
Long-term equity investment 41335306.08 40463113.36
Other equity instrument investments 79622482.00 51622482.00
Other non-current financial assets
Investment property 96308465.35 97727652.86
Fixed assets 2846327000.00 2888394751.10
Construction in progress 895992867.67 803965663.22
Productive biological assets
Oil and gas assets
Right-of-use assets 36544291.24 50405996.42
Intangible assets 693013114.83 711117962.19
Including: data resources
Development expenditure 59780623.51 57633484.45
Including: data resources
Goodwill 78109945.18 78109945.18
Long-term deferred expenses 183974116.07 195703437.02
Deferred tax assets 127024481.77 122181079.12
Other non-current assets 42930612.50 33202988.26
Total non-current assets 5236079590.18 5186964718.41
Total assets 15053237544.62 13567607196.90
Current liabilities:
Short-term loans 1870542647.09 1392469964.76
Loan from the Central Bank
Borrowed funds
Financial liabilities held for trading 1078049.24 5161.00
Derivative financial liabilities
Notes payable 1755495823.64 1578338573.85
Accounts payable 3140033427.54 2331050516.19
Accounts collected in advance 6849072.70 4903162.70
Contractual liabilities 151911777.01 116456170.61
Financial assets sold for repurchase
Deposit absorption and interbank
deposit
Acting trading securities
Acting underwriting securities
Employee compensation payable 151743465.34 262968616.95
Taxes payable 41655052.94 49594738.12
Other account payable 236548938.28 278177897.89
Including: interest payable
Dividends payable
Service charges and commissions
payable
Reinsurance accounts payable
Liabilities held for sale
Non-current liabilities due within one
166377785.72 43122892.52
year
Other current liabilities 93571731.80 64026908.02
Total current liabilities 7615807771.30 6121114602.61
Non-current liabilities:
Insurance contract reserve
Long-term loans 401740987.85 404450000.00
Bonds payable
Including: preferred shares
Perpetual capital securities
Lease liabilities 13566691.31 22919126.35
Long-term payables
Long-term employee compensation
payable
Estimated liabilities
Deferred income 12379614.88 14047240.76
Deferred tax liabilities 23130712.78 23412745.21
Other non-current liabilities
Total non-current liabilities 450818006.82 464829112.32
Total liabilities 8066625778.12 6585943714.93
Owner's equity:
Share capital 1246834988.00 1246834988.00
Other equity instruments
Including: preferred shares
Perpetual capital securities
Capital reserves 2174864524.67 2149700352.02
Minus: treasury shares 155694936.18 155694936.18
Other comprehensive income -123219321.24 -60340869.44
Special reserves
Surplus reserve 267001620.24 267001620.24
General risk provision
Retained earnings 3577529874.76 3534742722.91
Total owner's equity attributable to the
6987316750.25 6982243877.55
parent company
Minority shareholders' equity -704983.75 -580395.58
Total owners' equity 6986611766.50 6981663481.97
Total liabilities and owners' equity 15053237544.62 13567607196.90
Legal representative: Wu Accounting Head: Luo Muchen Accounting Department Head: Luo
Yongqiang Muchen
2. Balance sheet of parent company
Unit: RMB
Items Ending balance Beginning balance
Current assets:
Monetary capital 580103719.92 895618876.75
Trading financial assets 693963021.45 430679393.16
Derivative financial assets
Notes receivable 7230570.94 13283445.24
Accounts receivable 2249605232.09 1872692266.99
Financing of accounts receivable 53550924.90 62564844.60
Prepayments 25161792.55 15506852.80
Other receivables 764001373.47 581416476.95
Including: interest receivable
Dividends receivable 10000000.00
Inventory 567131349.08 447066836.78
Including: data resources
Contractual assets
Assets held for sale
Non-current assets due within one year
Other current assets 35296757.85 32333183.17
Total current assets 4976044742.25 4351162176.44
Non-current assets:
Debt investment
Other debt investment
Long-term receivables
Long-term equity investment 4330113333.27 4325091223.15
Other equity instrument investments 20000000.00 0.00
Other non-current financial assets
Investment property
Fixed assets 162232249.32 163895568.16
Construction in progress 17369881.28 13794732.71
Productive biological assets
Oil and gas assets
Right-of-use assets 14200249.92 15249937.08
Intangible assets 240926543.71 257031503.44
Including: data resources
Development expenditure 47858231.59 38019941.44
Including: data resources
Goodwill
Long-term deferred expenses 9999648.80 8973756.54
Deferred tax assets 14328514.97 20720774.20
Other non-current assets 5362908.90 5872029.97
Total non-current assets 4862391561.76 4848649466.69
Total assets 9838436304.01 9199811643.13
Current liabilities:
Short-term loans 60689741.84 60689741.84
Financial liabilities held for trading 664675.50 5161.00
Derivative financial liabilities
Notes payable 2510082549.06 2082238616.61
Accounts payable 1193201855.38 711506747.61
Accounts collected in advance
Contractual liabilities 51864680.09 39443085.99
Employee compensation payable 73043297.85 137049527.45
Taxes payable 10544523.92 11802737.79
Other account payable 709731044.54 986310419.01
Including: interest payable
Dividends payable
Liabilities held for sale
Non-current liabilities due within one
10030257.84 9085751.90
year
Other current liabilities 40011564.38 30798404.76
Total current liabilities 4659864190.40 4068930193.96
Non-current liabilities:
Long-term loans 0.00
Bonds payable
Including: preferred shares
Perpetual capital securities
Lease liabilities 5140513.17 7107489.37
Long-term payables
Long-term employee compensation
payable
Estimated liabilities
Deferred income 2034631.75 2407106.41
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities 7175144.92 9514595.78
Total liabilities 4667039335.32 4078444789.74
Owner's equity:
Share capital 1246834988.00 1246834988.00
Other equity instruments
Including: preferred shares
Perpetual capital securities
Capital reserves 2296962847.20 2271798674.55
Minus: treasury shares 155694936.18 155694936.18
Other comprehensive income
Special reserves
Surplus reserve 266973101.78 266973101.78
Retained earnings 1516320967.89 1491455025.24
Total owners' equity 5171396968.69 5121366853.39
Total liabilities and owners' equity 9838436304.01 9199811643.13
3. Consolidated income statement
Unit: RMB
Items Half year of 2026 Half year of 2025
I. Total operating income 5808802405.34 5502335729.18
Including: revenue 5808802405.34 5502335729.18
Interest income
Premiums earned
Service charge and commission income
II. Total operating cost 5660907286.62 5151514039.22
Including: operating cost 4664809867.96 4261763382.25
Interest expense
Service charge and commission payment
Surrender value
Net compensation expenditure
Net reserve amount set aside for insurance liability
Policy dividend payment
Reinsurance expenses
Taxes and surcharges 31922754.49 24474734.66
Selling expenses 212094797.72 220686080.56
Overheads 196025982.81 222560862.57
R&D expenses 438134610.04 460786777.70
Finance expenses 117919273.60 -38757798.52
Including: interest expenses 12815585.10 19345176.16
Interest income 9251704.34 12672976.09
Plus: other income 19384426.44 31729942.66
Investment income (loss marked with "-") 13904210.37 6143016.93
Including: income from investment in associated
872192.72 877869.10
enterprises and joint ventures
Derecognized gains from financial assets
measured at amortized cost
Exchange gain (loss marked with "-")
Net gain from exposure hedges (loss marked with "-")
Gain from fair-value changes (loss marked with "-") 282354.40 -106506.00
Loss from credit impairment (loss marked with "-") -11011829.00 -7143154.02
Loss from asset impairment (loss marked with "-") -29609101.52 -25099491.27
Gain from disposal of assets (loss marked with "-") -1010649.83 -174143.23
III. Operating profit (loss marked with "-") 139834529.58 356171355.03
Plus: non-operating income 2806494.73 3789204.87
Minus: non-operating expenses 4178364.90 4113078.34
IV. Total profit (total loss marked with "-") 138462659.41 355847481.56
Minus: income tax expense 9784838.57 25988052.59
V. Net profit (net loss marked with "-") 128677820.84 329859428.97
(I) Classification according to business continuity
1. Net profit on continuing operations (net loss marked with
128677820.84 329859428.97
"-")
2. Net profit on discontinued operations (net loss marked
with "-")
(II) Classification according to ownership
1. Net profit attribute to shareholders of parent company
128802409.01 330078194.08
(net loss marked with "-")
2. Profit/loss attributable to minority shareholders (net loss
-124588.17 -218765.11
marked with "-")
VI. Net after-tax amount of other comprehensive income -62878451.80 4842602.17
Net after-tax amount of other comprehensive income
-62878451.80 4842602.17
attributable to the owner of the parent company
(I) Other comprehensive income that cannot be reclassified
into profits or losses
1. Re-measurement of changes in the defined benefit
plans
2. Other comprehensive income that cannot be transferred
through profit or loss under the equity method
3. Changes in fair value of other equity instrument
investment
4. Changes in fair value of enterprise's own credit risk
5. Others
(II) Other comprehensive income that is reclassified into
-62878451.80 4842602.17
profits and losses
1. Other comprehensive income that can be transferred
into profits or losses under the equity method
2. Changes in fair value of other debt investments
3. Amount of financial assets reclassified into other
comprehensive income
4. Provisions for credit impairment of other debt
investment
5. Cash flow hedging reserve
6. Difference in translation of foreign currency financial
-62878451.80 4842602.17
statements
7. Others
Net after-tax amount of other comprehensive income attributed
to the minority of shareholders
VII. Total comprehensive income 65799369.04 334702031.14
Total consolidated income attributable to the owners of the
65923957.21 334920796.25
parent company
Total consolidated income attributable to minority
-124588.17 -218765.11
shareholders
VIII. Earnings per share:
(I) Basic earnings per share 0.10 0.27
(II) Diluted earnings per share 0.10 0.27
In case of business merger involving enterprises under the same control in the current period the net profit
realized by the merged party before the merger is: RMB 0.00 and the net profit realized by the merged party in
the prior period is: RMB 0.00.Legal representative: Wu Accounting Head: Luo Muchen Accounting Department Head: Luo
Yongqiang Muchen
4. Income statement of parent company
Unit: RMB
Items Half year of 2026 Half year of 2025
I. Revenue 3309091957.22 3030817124.28
Minus: operating cost 2657264069.53 2444612210.50
Taxes and surcharges 16236593.22 7689681.60
Selling expenses 145340924.29 162178963.66
Overheads 102790858.91 110681666.72
R&D expenses 227357443.36 312112396.97
Finance expenses 55701793.00 -10480489.96
Including: interest expenses 3954318.25 8812732.76
Interest income 3686295.41 3771948.94
Plus: other income 4191275.94 10623873.75
Investment income (loss marked with "-") 20414153.39 3430061.62
Including: income from investment in associated
enterprises and joint ventures
Derecognized gains from financial assets
measured at amortized cost (loss marked with "-")
Net gain from exposure hedges (loss marked with "-")
Gain from fair-value changes (loss marked with "-") -245093.50
Loss from credit impairment (loss marked with "-") -4976018.56 3035324.53
Loss from asset impairment (loss marked with "-") -8027388.46 -5480177.90
Gain from disposal of assets (loss marked with "-") 1041.46 15747.89
II. Operating profit (loss marked with "-") 115758245.18 15647524.68
Plus: non-operating income 1012657.74 874146.36
Minus: non-operating expenses 1528908.72 2508748.26
III. Total profit (total loss marked with "-") 115241994.20 14012922.78
Minus: income tax expense 4360794.39 -5948760.50
IV. Net profit (net loss marked with "-") 110881199.81 19961683.28
(I) Net profit on continuing operations (net loss marked with "-
110881199.81 19961683.28
")
(II) Net profit from termination of operation (net loss marked
with "-")
V. Net after-tax amount of other comprehensive income
(I) Other comprehensive income that cannot be reclassified
into profits or losses
1. Re-measurement of changes in the defined benefit
plans
2. Other comprehensive income that cannot be transferred
through profit or loss under the equity method
3. Changes in fair value of other equity instrument
investment
4. Changes in fair value of enterprise's own credit risk
5. Others
(II) Other comprehensive income that is reclassified into
profits and losses
1. Other comprehensive income that can be transferred
into profits or losses under the equity method
2. Changes in fair value of other debt investments
3. Amount of financial assets reclassified into other
comprehensive income
4. Provisions for credit impairment of other debt
investment
5. Cash flow hedging reserve
6. Difference in translation of foreign currency financial
statements
7. Others
VI. Total comprehensive income 110881199.81 19961683.28
VII. Earnings per share:
(I) Basic earnings per share
(II) Diluted earnings per share
5. Consolidated cash flow statement
Unit: RMB
Items Half year of 2026 Half year of 2025
I. Cash flow from operating activities:
Cash received from sales of goods and rendering of services 5464514473.11 5357724545.20
Net increase in deposits with other banks
Net increase in borrowing from the central bank
Net increase in funds borrowed from other financial
institutions
Cash from receipt of original insurance contract premiums
Receipt of net cash for reinsurance operations
Net increase in savings and investment funds of the insured
Cash from receipt of interest service charges and commissions
Net increase in borrowed funds
Net increase in funds from repurchase operations
Net cash received for acting trading securities
Refund of tax and levies 363918881.91 257799901.26
Other cash received related to operating activities 47222277.97 75448632.75
Subtotal of cash inflow from operating activities 5875655632.99 5690973079.21
Cash paid for purchasing goods and accepting labor services 4528275773.49 3876615932.07
Net increase in loans and advances of clients
Net increase in deposits with central banks and interbanks
Cash in compensation funds paid for the original insurance
contract
Net increase in lending funds
Cash for payment of interest service charges and commissions
Cash for payment of policy dividends
Cash paid to and for employees 1152722848.19 1124181576.86
Tax payments 102634791.14 112150708.98
Other cash paid related to operating activities 193180970.05 224670294.81
Subtotal of cash outflows from operating activities 5976814382.87 5337618512.72
Net cash flow from operating activities -101158749.88 353354566.49
II. Cash flow from investing activities:
Cash received from recovery of investments 326219000.00 468705428.72
Cash received from investment income 14508305.74 6349205.30
Net cash recouped from disposal of fixed assets intangible
2595920.21 907801.09
assets and other long-term assets
Net cash received from disposal of subsidiaries and other
business units
Other cash received relating to investment activities 57296165.98 0.00
Subtotal of cash inflows from investment activities 400619391.93 475962435.11
Cash paid for the purchase and construction of fixed assets
222765400.15 335169146.89
intangible assets and other long-term assets
Cash paid for investment 678000000.00 302014088.18
Net increase in pledged loans
Net cash obtained from subsidiaries and other business units
Other cash paid related to investment activities 120.00 385800.00
Subtotal of cash outflows from investment activities 900765520.15 637569035.07
Net cash flow from investment activities -500146128.22 -161606599.96
III. Cash flow from financing activities:
Cash received from absorbing investment
Including: cash received by subsidiaries' absorption of
minority shareholders' investment
Cash received from loan 1418727917.54 1465520964.66
Other cash received relating to financing activities 0.00 12920862.51
Subtotal of cash inflows from financing activities 1418727917.54 1478441827.17
Cash paid for repayments of debts 818617220.02 1376531207.44
Cash paid to distribute dividends profits or pay interest 96495046.15 97302974.69
Including: dividends and profits paid by subsidiaries to
minority shareholders
Other cash paid related to financing activities 17022021.31 23837729.50
Subtotal of cash outflows from financing activities 932134287.48 1497671911.63
Net cash flow from financing activities 486593630.06 -19230084.46
IV. Impact of exchange rate fluctuations on cash and cash
-54484100.94 33856049.33
equivalents
V. Net increase in cash and cash equivalents -169195348.98 206373931.40
Plus: balance of cash and cash equivalents at the beginning of
1619876262.35 1596352534.73
the period
VI. Balance of cash and cash equivalents at the end of the period 1450680913.37 1802726466.13
6. Cash flow statement of the parent company
Unit: RMB
Items Half year of 2026 Half year of 2025
I. Cash flow from operating activities:
Cash received from sales of goods and rendering of services 3875227832.90 3416577143.54
Refund of tax and levies 132035695.42 139986431.70
Other cash received related to operating activities 628935204.80 833941238.94
Subtotal of cash inflow from operating activities 4636198733.12 4390504814.18
Cash paid for purchasing goods and accepting labor services 2770382799.47 2620561929.50
Cash paid to and for employees 487903147.97 487373843.50
Tax payments 18604212.03 21804220.23
Other cash paid related to operating activities 1234494251.18 955226056.32
Subtotal of cash outflows from operating activities 4511384410.65 4084966049.55
Net cash flow from operating activities 124814322.47 305538764.63
II. Cash flow from investing activities:
Cash received from recovery of investments 276219000.00 155000000.00
Cash received from investment income 11575946.10 3552838.80
Net cash recouped from disposal of fixed assets intangible
0.00 271203.20
assets and other long-term assets
Net cash received from disposal of subsidiaries and other
business units
Other cash received relating to investment activities 55272768.43 0.00
Subtotal of cash inflows from investment activities 343067714.53 158824042.00
Cash paid for the purchase and construction of fixed assets
48123922.64 51829590.11
intangible assets and other long-term assets
Cash paid for investment 460000000.00 194014088.18
Net cash obtained from subsidiaries and other business units
Other cash paid related to investment activities 0.00 235200.00
Subtotal of cash outflows from investment activities 508123922.64 246078878.29
Net cash flow from investment activities -165056208.11 -87254836.29
III. Cash flow from financing activities:
Cash received from absorbing investment
Cash received from loan 0.00
Other cash received relating to financing activities 0.00 12920862.51
Subtotal of cash inflows from financing activities 0.00 12920862.51
Cash paid for repayments of debts 0.00 130750000.00
Cash paid to distribute dividends profits or pay interest 91510376.93 92637009.74
Other cash paid related to financing activities 6029105.96 6098593.91
Subtotal of cash outflows from financing activities 97539482.89 229485603.65
Net cash flow from financing activities -97539482.89 -216564741.14
IV. Impact of exchange rate fluctuations on cash and cash
-20830947.31 17440999.77
equivalents
V. Net increase in cash and cash equivalents -158612315.84 19160186.97
Plus: balance of cash and cash equivalents at the beginning of
718708036.88 654542035.33
the period
VI. Balance of cash and cash equivalents at the end of the period 560095721.04 673702222.30
7. Consolidated statement of changes in owner's equity
Amount in the current period
Unit: RMB
Half year of 2026
Owner's equity attributable to the parent company
Other
equity
instrum
ents
P G
e e
r S n
p p e
e e
P r
t c
r a
u i
e l O
Items a
a
f ri t Minority
l Other l shareholders' Total owners'e O Minus: treasury s hShare capital c Capital reserves comprehensive r Surplus reserve Retained earnings Subtotal equity
rr t shares k e
equity
a income e
e h p r
p s
d e r s
it e
s r o
a r
h s v
l v
a is
s e
r i
e s
e o
c
s n
u
ri
ti
e
s
I. Ending balance of last
1246834988.00 2149700352.02 155694936.18 -60340869.44 267001620.24 3534742722.91 6982243877.55 -580395.58 6981663481.97
year
Plus: changes in
accounting policies
Early error
correction
Others
II. Beginning balance of
1246834988.00 2149700352.02 155694936.18 -60340869.44 267001620.24 3534742722.91 6982243877.55 -580395.58 6981663481.97
the current year
III. Amount of changes
in increase/decrease in
the current period 25164172.65 -62878451.80 42787151.85 5072872.70 -124588.17 4948284.53
(decrease marked with
"-")
(I) Total comprehensive
-62878451.80 128802409.01 65923957.21 -124588.17 65799369.04
income
(II) Capital invested and
25164172.65 25164172.65 25164172.65
reduced by owners
1. Ordinary shares
invested by owners
2. Capital contributed
by holders of other
equity instruments
3. Amount of share-
based payment included 28129086.74 28129086.74 28129086.74
in owner's equity
4. Others -2964914.09 -2964914.09 -2964914.09
(III) Profit distribution -86015257.16 -86015257.16 -86015257.16
1. Withdrawal of
surplus reserve
2. Withdrawal of
general risk provision
3. Distribution to
owners (or -86015257.16 -86015257.16 -86015257.16
shareholders)
4. Others
(IV) Internal carryover
of owner's equity
1. Conversion of
surplus reserves to
additional capital (or
share capital)
2. Conversion of
surplus reserves to
additional capital (or
share capital)
3. Surplus public
reserve to compensate
losses
4. Change of defined
benefit plans carried
forward to retained
earnings
5. Other comprehensive
income carried forward
into retained earnings
6. Others
(V) Special reserves
1. Amount withdrawn
in the current period
2. Amount used in the
current period
(VI) Others
IV. Ending balance of
1246834988.00 2174864524.67 155694936.18 -123219321.24 267001620.24 3577529874.76 6987316750.25 -704983.75 6986611766.50
the current year
Amount of previous year
Unit: RMB
Half year of 2025
Owner's equity attributable to the parent company
Other
equity
instrum
ents
P G
e e
r S n
p p e
e e
P r
t c
r a
u i
e l O
a aItems f ri t Minority
l Other l Total owners'
e O Minus: treasury s h shareholders'Share capital c Capital reserves comprehensive r Surplus reserve Retained earnings Subtotal equity
rr t shares k e equity
a income e
e h p r
p s
d e r s
it e
s r o
a r
h s v
l v
a is
s e
r i
e s
e o
c
s n
u
ri
ti
e
s
I. Ending balance of
1246834988.00 2089578011.17 155694936.18 -32276903.98 248359297.47 3275527294.98 6672327751.46 52503.82 6672380255.28
last year
Plus: changes in
accounting policies
Early error
correction
Others
II. Beginning balance
1246834988.00 2089578011.17 155694936.18 -32276903.98 248359297.47 3275527294.98 6672327751.46 52503.82 6672380255.28
of the current year
III. Amount of changes
in increase/decrease in
the current period 55056890.04 4842602.17 244062936.92 303962429.13 -218765.11 303743664.02
(decrease marked with
"-")
(I) Total
4842602.17 330078194.08 334920796.25 -218765.11 334702031.14
comprehensive income
(II) Capital invested
55056890.04 55056890.04 55056890.04
and reduced by owners
1. Ordinary shares
invested by owners
2. Capital contributed
by holders of other
equity instruments
3. Amount of share-
based payment
52447170.39 52447170.39 52447170.39
included in owner's
equity
4. Others 2609719.65 2609719.65 2609719.65
(III) Profit distribution -86015257.16 -86015257.16 -86015257.16
1. Withdrawal of
surplus reserve
2. Withdrawal of
general risk provision
3. Distribution to
owners (or -86015257.16 -86015257.16 -86015257.16
shareholders)
4. Others
(IV) Internal carryover
of owner's equity
1. Conversion of
surplus reserves to
additional capital (or
share capital)
2. Conversion of
surplus reserves to
additional capital (or
share capital)
3. Surplus public
reserve to compensate
losses
4. Change of defined
benefit plans carried
forward to retained
earnings
5. Other comprehensive
income carried forward
into retained earnings
6. Others
(V) Special reserves
1. Amount withdrawn
in the current period
2. Amount used in the
current period
(VI) Others
IV. Ending balance of
1246834988.00 2144634901.21 155694936.18 -27434301.81 248359297.47 3519590231.90 6976290180.59 -166261.29 6976123919.30
the current year
8. Parent company's statement of changes in owner's equity
Amount in the current period
Unit: RMB
Half year of 2026
Other equity
instruments
Per Other Sp
pet comp eci
Items Pre OtMinus: treasury rehen al Total owners'
Share capital ualferr Capital reserves Surplus reserve Retained earnings he
cap Othe shares sive res equity
ed rs
ital rs inco erv
sha
sec me es
res
urit
ies
I. Ending balance of last year 1246834988.00 2271798674.55 155694936.18 266973101.78 1491455025.24 5121366853.39
Plus: changes in
accounting policies
Early error
correction
Others
II. Beginning balance of the
1246834988.00 2271798674.55 155694936.18 266973101.78 1491455025.24 5121366853.39
current year
III. Amount of changes in
increase/decrease in the
25164172.65 24865942.65 50030115.30
current period (decrease
marked with "-")
(I) Total comprehensive
110881199.81 110881199.81
income
(II) Capital invested and
25164172.65 25164172.65
reduced by owners
1. Ordinary shares invested
by owners
2. Capital contributed by
holders of other equity
instruments
3. Amount of share-based
payment included in owner's 28129086.74 28129086.74
equity
4. Others -2964914.09 -2964914.09
(III) Profit distribution -86015257.16 -86015257.16
1. Withdrawal of surplus
reserve
2. Distribution to owners (or
-86015257.16 -86015257.16
shareholders)
3. Others
(IV) Internal carryover of
owner's equity
1. Conversion of surplus
reserves to additional capital
(or share capital)
2. Conversion of surplus
reserves to additional capital
(or share capital)
3. Surplus public reserve to
compensate losses
4. Change of defined benefit
plans carried forward to
retained earnings
5. Other comprehensive
income carried forward into
retained earnings
6. Others
(V) Special reserves
1. Amount withdrawn in the
current period
2. Amount used in the current
period
(VI) Others
IV. Ending balance of the
1246834988.00 2296962847.20 155694936.18 266973101.78 1516320967.89 5171396968.69
current year
Amount of previous year
Unit: RMB
Half year of 2025
Other equity
instruments
Per Other Spe
pet compr
Items Pre cial Otual Minus: treasury ehensi Total owners'Share capital ferr Ot Capital reserves res Surplus reserve Retained earnings her
cap shares ve equity
ed he erv s
ital incom
sha rs es
sec e
res
urit
ies
I. Ending balance of last year 1246834988.00 2211676333.70 155694936.18 248330779.01 1409689377.48 4960836542.01
Plus: changes in accounting
policies
Early error correction
Others
II. Beginning balance of the current
1246834988.00 2211676333.70 155694936.18 248330779.01 1409689377.48 4960836542.01
year
III. Amount of changes in
increase/decrease in the current 55056890.04 -66053573.88 -10996683.84
period (decrease marked with "-")
(I) Total comprehensive income 19961683.28 19961683.28
(II) Capital invested and reduced by
55056890.04 55056890.04
owners
1. Ordinary shares invested by
owners
2. Capital contributed by holders of
other equity instruments
3. Amount of share-based payment
52447170.39 52447170.39
included in owner's equity
4. Others 2609719.65 2609719.65
(III) Profit distribution -86015257.16 -86015257.16
1. Withdrawal of surplus reserve
2. Distribution to owners (or
-86015257.16 -86015257.16
shareholders)
3. Others
(IV) Internal carryover of owner's
equity
1. Conversion of surplus reserves to
additional capital (or share capital)
2. Conversion of surplus reserves to
additional capital (or share capital)
3. Surplus public reserve to
compensate losses
4. Change of defined benefit plans
carried forward to retained earnings
5. Other comprehensive income
carried forward into retained
earnings
6. Others
(V) Special reserves
1. Amount withdrawn in the current
period
2. Amount used in the current period
(VI) Others
IV. Ending balance of the current
1246834988.00 2266733223.74 155694936.18 248330779.01 1343635803.60 4949839858.17
year
III. Basic information of the Company
Shenzhen Topband Co. Ltd. (hereinafter referred to as "the Company") formerly known as Shenzhen
Topband Electronic Equipment Co. Ltd. is a limited liability company approved by Shenzhen Administration
for Industry and Commerce on February 9 1996. It has obtained the Business License of Enterprise Legal
Person with the registration number of 19241377-3. On January 10 2001 upon approval the name of Shenzhen
Topband Electronic Equipment Co. Ltd. was changed to Shenzhen Topband Electronic Technology Co. Ltd.On July 15 2002 with the approval of the People's Government of Shenzhen Municipality by issuing the Reply
on the Approval of the Reorganization and Establishment of Shenzhen Topband Electronics Technology Co.Ltd. (SFG [2002] No. 24) Guangdong Province it was agreed to reorganize Shenzhen Topband Electronics
Technology Co. Ltd. as a whole into a company limited by shares with five shareholders as the promoter. On
June 26 2007 with the approval of the China Securities Regulatory Commission by issuing the Notice on
Approving the IPO of Shenzhen Topband Electronics Technology Co. Ltd. (ZJH No. 2007135) Topband issued
shares to the public and was listed on the Shenzhen Stock Exchange (stock code: 002139). The company name
was changed to Shenzhen Topband Co. Ltd. in September 2009.The Company's registered address is Topband Industrial Park No. 1 Yongteng Third Road Tangtou
Community Shiyan Sub-district Bao'an District Shenzhen. The unified social credit code of the business
license is 91440300192413773Q. The legal representative of the Company is Wu Yongqiang. As of June 30
2026 the Company's share capital was RMB 1246834988.00.
Main business activities of the Company: The Company keeps gaining technical experience and product
solutions in the intelligent control industry and develops the intelligent control and autonomous intelligence
businesses based on the core technology system of "four electrics and one network + AI" to deeply serve
industries such as tools and home appliances automotive and high-end equipment and new energy. The
Company provides innovative efficient and reliable customized services to global customers and green
intelligent and innovative products to consumers.IV. Preparation basis of the financial statement
1. Basis of preparation
On a going concern basis the Company recognizes and measures actual transactions and events in
accordance with the Accounting Standards for Business Enterprises and their application guidelines and
interpretations of the Standards and prepares its financial statements accordingly. In addition the Company
also disclosures relevant financial information in accordance with the Compilation Rules No. 15 for Information
Disclosure by Companies Offering Securities to the Public - General Provisions on Financial Reports (2023
Revision) issued by CSRC.
2. Continuation
The Company has evaluated its ability to continue as a going concern for the past 12 months from the end
of the Reporting Period and has not identified any issue that may affect its ability to continue as a going concern
so it is reasonable for the Company to prepare the financial statements on a going concern basis.V. Significant Accounting Policies and Accounting Estimates
Specific accounting policies and accounting estimates reminders:
The following important accounting policies and estimates of the Company were determined in accordance
with the Accounting Standards for Business Enterprises. The businesses not mentioned are based on the relevant
accounting policies in the Accounting Standards for Business Enterprises.
1. Statement on compliance with Accounting Standards for Business Enterprises
The financial statements prepared by the Company comply with the requirements of Accounting Standards
for Business Enterprises and truly and completely reflect the Company's financial position operating results
changes in owners' equity and cash flows.
2. Accounting period
The fiscal year of the Company begins on January 1 and ends on December 31 of the Gregorian calendar.
3. Operating cycle
The normal operating cycle of the Company is one year.4. Recording currency
The recording currency of the Company is RMB and the overseas branches and subsidiaries may
determine their own recording currencies according to the currency of the main economic environment in which
they operate.
5. Method for determining materiality criteria and basis for selection
□ Applicable □ Not applicable
Items Materiality criteria
The ending balance of individual accounts receivable and other
Accounts receivable with major single provision for bad debts
receivables is greater than RMB 1 million
Recovery or reversal of bad debt provisions for important The amount of single recovery or reversal is greater than RMB 1
receivables million
Write-off of important receivables The amount of single write-off is greater than RMB 1 million
The amount of a single contract liability aged over 1 year is
Material contract liabilities aged over 1 year
greater than RMB 5 million
The amount of a single accounts payable/other payable aged
Material payables and other payables
over 1 year is greater than RMB 5 million
Significant Projects In-progress The budget of a single project is over RMB 100 million
Major non-wholly-owned subsidiaries The minority equity is more than RMB 50 million
6. Accounting treatment for business merger involving enterprises under the same control and under
different control
(1) Business merger under common control
The assets and liabilities acquired by the Company in the business merger are measured at the date of the
merger at the book value of the merged party in the consolidated financial statements of the ultimate controlling
party. If the accounting policies and accounting periods adopted by the merged party and the Company before
the business merger are different the accounting policies and accounting periods shall be unified based on the
materiality principle that is the book values of the assets and liabilities of the merged party shall be adjusted in
accordance with the accounting policies and accounting periods of the Company. In case of a difference
between the book value of the net assets acquired by the Company in the business merger and the book value of
the consideration paid the capital reserve (capital premium or equity premium) shall be adjusted first. If the
balance of the capital reserve (capital premium or equity premium) is insufficient for writing down the surplus
reserve and undistributed profits shall be written down successively.The accounting treatment method for the merger of enterprises under common control step by step is
described in V. 7 (5) in Section VIII Financial Report.
(2) Business merger under different control
The identifiable assets and liabilities of the acquiree acquired by the Company in the business merger are
measured at their fair value at the date of acquisition. If the accounting policies and accounting periods adopted
by the acquiree and the Company before the business merger are different the accounting policies and
accounting periods shall be unified based on the materiality principle that is the book values of the assets and
liabilities of the acquiree shall be adjusted in accordance with the accounting policies and accounting periods of
the Company. If the merger cost of the Company on the acquisition date is larger than the fair value of the
identifiable assets and liabilities acquired in the business merger the difference is recognized as goodwill; if the
merger cost is less than the fair value of the identifiable assets and liabilities acquired in the business merger
the merger cost and the fair value of the acquiree's identifiable assets and liabilities acquired in the business
merger shall be reviewed first and if the merger cost is still less than the fair value of the acquired acquiree's
identifiable assets and liabilities after the review the difference is recognized as a profit or loss for the period of
the merger.The accounting treatment method for the merger of enterprises not under common control step by step is
described in V. 7 (5) in Section VIII Financial Report.
(3) Treatment of relevant transaction costs in business merger
Intermediary fees such as audit legal service evaluation and consulting fees and other related management
expenses incurred are credited to the current profit or loss when incurred. Transaction costs of equity securities
or debt securities issued as merger consideration are credited to the initial amount recognized for the equity
securities or debt securities.
7. Criteria for determining control and methods for preparing consolidated financial statements
(1) Judging criteria of control and determination of merger scope
Control means that the Company has power over the invested party enjoys variable returns by
participating in related activities of the invested party and has the ability to use its power over the invested
party to influence the amount of returns. The definition of control includes three basic elements: firstly means
the power the investor possesses over the investee; secondly variable returns enjoyed by participating in related
activities of the investee; thirdly the ability to use its power over the investee to influence the amount of returns.When an investment of the Company in an investee has the above three elements it means the Company is able
to control the investee.The consolidated scope of the consolidated financial statements is determined on a control basis and
includes not only subsidiaries determined based on voting rights (or similar voting rights) themselves or in
combination with other arrangements but also structured entities determined on the basis of one or more
contractual arrangements.A subsidiary refers to an entity controlled by the Company (including enterprise the severable part of
investee the structured entity controlled by enterprise etc.) and a structured entity refers to an entity designed
without voting rights or similar rights as a decisive factor in determining its controlling party (Note: sometimes
referred to as a special purpose entity).
(2) Compilation methods of consolidated financial statements
The Company prepares the consolidated financial statements based on its own and its subsidiaries'
financial statements as well as other relevant information.The consolidated financial statements are prepared by the Company with the entire enterprise group as one
accounting entity in accordance with the recognition measurement and presentation requirements of the
relevant accounting standards for business enterprises and based on uniform accounting policies and accounting
periods to reflect the overall financial position operating results and cash flows of the enterprise group.* Consolidate the assets liabilities owner's equity revenues expenses and cash flows of the parent
company and its subsidiaries.* Offset long-term equity investments of the parent company in its subsidiaries against the share of the
parent company in subsidiaries' owner's equity.* Offset the impact of internal transactions between the parent company and its subsidiaries as well as
among subsidiaries. Where an internal transaction indicates an impairment loss of the underlying asset the loss
shall be fully recognized.* Adjust special transactions from the perspective of the enterprise group.
(3) Treatment of increase/decrease of subsidiaries during Reporting Period
* Increase of subsidiaries or businesses
A. Subsidiaries or businesses added by merger of enterprises under common control
(a) When preparing the consolidated balance sheet adjust the opening balance of the consolidated balance
sheet and adjust the relevant items in the comparative statement as if the reporting entity after the merger had
been in existence since the point at which control by the ultimate controlling party began.(b) When preparing the consolidated income statement include the revenue expenses and profits of the
subsidiary and from the beginning of the period in which the business merger occurs to the end of the Reporting
Period in the consolidated income statement and adjust the relevant items in the comparative statement as if the
reporting entity after the merger had been in existence since the point at which control by the ultimate
controlling party began.(c) When preparing the consolidated cash flow statement include the cash flows of the subsidiary and from
the beginning of the period in which the business merger occurs to the end of the Reporting Period in the
consolidated cash flow statement and adjust the relevant items in the comparative statement as if the reporting
entity after the merger had been in existence since the point at which control by the ultimate controlling party
began.B. Subsidiaries or businesses increased by business merger under different control
(a) No adjustment is made to the opening balance of the consolidated balance sheet when preparing it.(b) When preparing the consolidated income statement include the revenue expenses and profits of the
subsidiary and from the date of acquisition to the end of the Reporting Period in the consolidated income
statement.(c) When preparing the consolidated cash flow statement include the cash flows of the subsidiary from the
date of acquisition to the end of the Reporting Period in the consolidated cash flow statement.* Disposal of subsidiaries or businesses
A. No adjustment is made to the opening balance of the consolidated balance sheet when preparing it.B. When preparing the consolidated income statement include the revenue expenses and profits of the
subsidiary and from the beginning of the operating period to the date of disposal in the consolidated income
statement.C. When preparing the consolidated cash flow statement include the cash flows of the subsidiary and from
the beginning of the operating period to the date of disposal in the consolidated cash flow statement.(4) Special considerations in consolidated offset
* Long-term equity investments of the Company held by subsidiaries shall be treated as treasury shares of
the Company and presented as "Minus: treasury shares" under the Owners' Equity item in the consolidated
balance sheet as a deduction from the owners' equity.For long-term equity investments mutually held by subsidiaries the long-term equity investments shall be
mutually offset against the shares of the corresponding owner's equity of the subsidiary in accordance with the
method of offsetting the Company's equity investments in subsidiaries.* The items of "special reserve" and "general risk provision" are not paid-in capital (or share capital) or
capital reserve and are different from retained earnings and undistributed profits. After the offset of long-term
equity investment against owners' equity of subsidiaries the two items shall be restored according to the share
attributable to the owner of the parent company.* The Company recognizes deferred income tax assets or liabilities in the consolidated balance sheet and
adjusts the income tax expense in the consolidated income statement if there is a temporary difference between
the book value of the assets or liabilities in the consolidated balance sheet and the tax basis of the taxable entity
concerned due to the offset of unrealized gains and losses on internal sales except deferred income taxes related
to transactions or matters directly credited to owners' equity and related to business merger.* Unrealized gains or losses on internal transactions arising from the sale of assets by the Company to a
subsidiary shall be fully offset against the "net profit attributable to the owner of the parent company".Unrealized gains and losses on internal transactions arising from the sale of assets by a subsidiary to the
Company shall be offset between "net profit attributable to the owner of the parent company" and "profit or loss
of minority shareholders" in accordance with the proportion of the Company's distribution to the subsidiary.Unrealized gains and losses on internal transactions arising from the sale of assets between subsidiaries shall be
offset between "net profit attributable to the owner of the parent company" and "profit or loss of minority
shareholders" in accordance with the proportion of the Company's distribution to the selling subsidiary.* Where the loss shared by the minority shareholders of a subsidiary in the current period exceeds the
minority shareholders' share in the owner's equity of the subsidiary at the beginning of the period the balance
shall still be written down under the minority equity.
(5) Accounting treatment of special transactions
* Purchase of minority equity
When the Company purchases shares in subsidiaries owned by minority shareholders in individual
financial statements the investment cost of the newly acquired long-term equity investment for the purchase of
minority shares is measured at the fair value of the consideration paid. In the consolidated financial statements
the capital reserve (capital premium or equity premium) shall be adjusted for the difference between the newly
acquired long-term equity investment due to the purchase of minority shares and the net asset share of the
subsidiary that has been continuously calculated since the acquisition date or the merger date according to the
proportion of newly acquired shares. If the capital reserve is insufficient for writing off the surplus reserve and
undistributed profit shall be written off successively.* Acquiring control of a subsidiary by steps through multiple transactions
A. Business merger under common control realized by steps through multiple transactions
At the merger date the Company determines the initial investment cost of long-term equity investment in
individual financial statements based on the share of the net assets of the subsidiary to be enjoyed after the
merger in the book value of the consolidated financial statements of the ultimate controlling party; the capital
reserve (capital premium or equity premium) shall be adjusted for the difference between the initial investment
cost and the book value of the long-term equity investment before reaching the merger plus the book value of
the newly paid consideration for further shares acquired on the merger date. If the capital reserve (capital
premium or equity premium) is insufficient for writing off the surplus reserve and undistributed profit shall be
written off successively.In the consolidated financial statements the assets and liabilities of the mergee acquired by the merging
party in the merger are measured at the book value in the consolidated financial statements of the ultimate
controlling party at the date of the merger except for adjustments due to different accounting policies and
accounting periods; the capital reserve (equity premium/capital premium) shall be adjusted for the difference
between the book value of the investment held before the merger plus the book value of the newly paid
consideration on the merger date and the book value of the net assets acquired in the merger. If the capital
reserve is insufficient for writing off the retained earnings shall be adjusted.For equity investments held by the merging party prior to the acquisition of control of the mergee changes
in the gains and losses other comprehensive income and other owners' equity that have been recognized
between the merger date and the date of acquisition of the original equity or the date on which the merging party
and the mergee are ultimately under common control whichever is later shall be respectively deducted against
the opening retained earnings or current profit or loss of the comparative statement period.B. Business merger under different control realized by steps through multiple transactions
In individual financial statements the sum of the book values of the long-term equity investments
originally held plus the cost of the new investment on the merger date is taken as the initial investment cost of
the long-term equity investment on the merger date.In the consolidated financial statements the acquiree's equity held prior to the acquisition date shall be
remeasured at the fair value of the equity held prior to the acquisition date and if the acquiree's equity held
prior to the acquisition date is designated as a financial asset measured at fair value and its changes are credited
to other comprehensive income the difference between the fair value and the book value shall be credited to
retained earnings and the cumulative change in fair value of the equity originally credited to other
comprehensive income shall be carried over to retained earnings; if the acquiree's equity held before the
acquisition date is regarded as a financial asset measured at fair value and its changes are credited to the current
profit or loss of financial assets or long-term equity investment accounted for by the equity method the
difference between the fair value and the book value shall be credited to the current investment income; if the
acquiree's equity held prior to the acquisition date involves changes in other comprehensive income accounted
for by the equity method and other owners' equity accounted for by the equity method other than net profit or
loss other comprehensive income and profit distribution other related comprehensive income shall be
accounted for on the same basis as the investee's direct disposal of the relevant assets or liabilities on the
acquisition date and other related changes in the owners' equity shall be changed over to investment income of
the period of the acquisition date.* Disposal of long-term equity investments in subsidiaries by the Company without losing control
If the parent company disposes of its long-term equity investments in a subsidiary partially without losing
control the difference between the disposal price and the net asset share of the subsidiary calculated
continuously from the date of purchase or merger corresponding to the disposal of long-term equity investments
in the consolidated financial statements shall be adjusted to the capital reserve (capital premium or share
premium). If the capital reserve is insufficient for offsetting the retained earnings shall be adjusted.* Disposal of long-term equity investments in subsidiaries by the Company with control lost
A. Disposal of single transaction
If the Company loses the control of the investee due to the disposal of part of the equity investment or
other reasons the remaining equity shall be remeasured at the fair value on the date of loss of control when
preparing the consolidated financial statements. The sum of the consideration obtained from the equity disposal
and the fair value of the remaining equity minus the difference between the share of the original subsidiary's net
assets that shall have been continuously calculated from the acquisition date or the merger date based on the
original shareholding ratio and the sum of goodwill shall be credited to the investment income of the period in
which the control is lost.Other comprehensive income related to the equity investment in the original subsidiary shall be accounted
for on the same basis as the direct disposal of related assets or liabilities by the original subsidiary at the time of
loss of control and other changes in owner's equity related to the original subsidiary accounted for with the
equity method are changed over to the current profit or loss at the time of loss of control.B. Disposal of multiple transactions by steps
In the consolidated financial statements whether a by-step transaction is a "package transaction" shall be
determined first.If the by-step transaction is not a "package transaction" in individual financial statements the transactions
before the loss of control of the subsidiary shall be carried forward to the book value of the long-term equity
investment corresponding to each disposal of equity and the difference between the proceeds and the book
value of the disposed long-term equity investment shall be credited to the current investment income; in the
consolidated financial statements the treatment shall be made in accordance with the relevant provisions of
"Disposal of long-term equity investment in subsidiaries by the parent company without losing control".If the by-step transaction is a "package transaction" each transaction shall be accounted for as one
transaction in which the subsidiary is disposed of with control lost; in individual financial statements the
difference between the disposal price before the loss of control and the book value of the long-term equity
investment corresponding to the disposed equity shall be first recognized as other comprehensive income and
then changed over to the current profit or loss when the control is lost. In the consolidated financial statements
for each transaction prior to the loss of control the difference between the disposal price and the share of the
subsidiary's entitled net assets corresponding to the investment disposed of shall be recognized as other
comprehensive income and changed over to the profit or loss of the period in which the control is lost.Multiple transactions are usually accounted for as "package transactions" if the terms conditions and
economic impact of each transaction meet one or more of the following conditions:
(a) These transactions are entered into concurrently or with consideration of their effects on each other.(b) A complete business outcome can be achieved only when these transactions are regarded as a whole.(c) The occurrence of a transaction is dependent on the occurrence of at least another one.(d) One transaction is not economic when it is considered individually but is economic when considered
together with other transactions.* Dilution of the proportion of equity owned by the parent company due to capital increase by minority
shareholders of a subsidiary
When other shareholders (minority shareholders) of a subsidiary increase the capital the equity proportion
of the parent company in the subsidiary would be diluted. In the consolidated financial statements the share of
the net assets of the subsidiary before the capital increase shall be calculated based on the parent company's
equity ratio before the capital increase and the difference between this share and the share of the subsidiary's
net assets after the capital increase calculated based on the parent company's equity ratio after the capital
increase shall be adjusted to the capital reserve (capital premium or share premium). If the capital reserve
(capital premium or share premium) is insufficient for offsetting the retained earnings shall be adjusted.
8. Classification of joint venture arrangements and accounting treatment for joint operation
1. Identification and classification of joint venture arrangements
Joint venture arrangement refers to an arrangement under joint control by two or more parties. The joint
venture arrangement has the following features: (1) all parties are bound by the arrangement; (2) two or more
parties jointly control the arrangement. No single party can control the arrangement solely and any party with
joint control over the arrangement can prevent other parties or a combination of party alliance from controlling
the arrangement alone.Joint control refers to the common control of an arrangement in accordance with relevant agreements and
the activities related to the arrangement must be agreed upon by the parties holding control right before the
decision can be made. Joint venture arrangement includes joint operation and joint venture. Joint operation is
the joint venture arrangement in which the joint venture party holds the relevant assets of the arrangement and
assumes the relevant liabilities. Joint venture refers to a joint venture arrangement in which the joint venture
party has rights only to the net assets of the arrangement.
2. Accounting treatment for joint venture arrangement
Parties in joint operation shall recognize the following items related to their share of interests in joint
operation and perform accounting treatment in accordance with the relevant provisions of the Accounting
Standards for Business Enterprises: (1) recognize the assets held separately and those held jointly as per their
share; (2) recognize the liabilities assumed separately and those assumed jointly as per their share; (3) recognize
the income generated from the sale of its share of joint operation output; (4) recognize the income from the sale
of the output of the joint operation as per its share; (5) recognize the expenses incurred separately and those
incurred in the joint operation as per its share.The parties of a joint venture shall make accounting treatment for the investment in the joint venture in
accordance with the Accounting Standards for Business Enterprises No. 2 - Long-term Equity Investment.
9. Standards for determining cash and cash equivalents
Cash refers to cash on hand and deposits that are available for payment at any time. Cash equivalents refer
to investments with short term (generally due within three months from the date of purchase) strong liquidity
easy to convert into known amount of cash and low risk of value change.
10. Foreign currency transaction and foreign currency statement translation
(1) Method of determining the conversion rate in foreign currency transactions
In the initial recognition of foreign currency transactions the Company adopts the spot exchange rate on
the occurrence date of the transaction or an exchange rate determined using a systematic and reasonable method
which is approximate to the spot exchange rate on the occurrence date of the transaction (hereinafter referred to
as the approximate exchange rate of the spot exchange rate) for conversion into the recording currency.
(2) Translation method of monetary items in foreign currencies at the balance sheet date
At the balance sheet date the spot exchange rate of that day is used for monetary items in foreign
currencies. Any exchange difference arising from the difference between the spot rate at the balance sheet date
and that at the initial recognition or the previous balance sheet date is credited to the current profit or loss. For
foreign-currency monetary items measured with historical costs the spot exchange rate at the date of the
transaction is still used; for inventories measured with the lower of costs or net realizable value when an
inventory is purchased in a foreign currency and the net realizable value of the inventory at the balance sheet
date is reflected in a foreign currency the net realizable value of the inventory is first converted into an amount
in the recording currency at the spot exchange rate at the balance sheet date and then compared with the cost of
the inventory reflected in the recording currency to determine the ending value of the inventory; for foreign
currency non-monetary items measured at fair value the spot exchange rate on the date of fair value
determination is used for translation; for financial assets measured at fair value and whose changes are credited
to the current profit or loss the difference between the amount in the recording currency after translation and
the amount in the original recording currency is credited to the current profit or loss; for investments in non-
trading equity instruments designated to be measured at fair value and whose changes are credited to other
comprehensive income the difference between the amount in the recording currency after translation and the
amount in the original recording currency is credited to other comprehensive income.
(3) Translation method of financial statements in a foreign currency
Before the financial statements of an overseas business of an enterprise are converted the accounting
periods and accounting policies of the overseas business shall be adjusted to be consistent with those of the
enterprise and then the financial statements in the corresponding currency (currency other than the accounting
currency) shall be prepared based on the adjusted accounting policies and accounting periods and converted
using the following method:
* The assets and liabilities in the balance sheet are translated at the spot exchange rate at the balance sheet
date and the owner's equity items except the item of "undistributed profit" are translated at the spot exchange
rate at the time of occurrence.* The income and expense items in the income statement are translated at the spot exchange rate or a rate
approximate to the spot exchange rate at the date of the transaction.* Cash flows in foreign currencies and cash flows of overseas subsidiaries are translated at the spot
exchange rate or a rate approximate to the spot exchange rate at the occurrence date of cash flows. The impact
of exchange rate changes on cash shall be presented separately in the statement of cash flows as a reconciliation
item.* When preparing the consolidated financial statements the resulting difference in the translation of
financial statements in a foreign currency is presented in the "Other comprehensive income" item under owner's
equity in the consolidated balance sheet.When an overseas operation is disposed of with control lost the difference in translation of foreign-
currency statements related to the overseas operation as presented under the owner's equity item in the balance
sheet is changed over to the current profit or loss of the disposal in full or in proportion to the disposed
overseas operation.
11. Financial instruments
1. Recognition and derecognition of financial instruments
When the Company becomes one party of the financial instrument contract it shall recognize a financial
asset or financial liability.The trading of financial assets in a conventional manner shall be recognized and derecognized according to
the accounting of the trading day. Conventional trading of financial assets refers to the collection or delivery of
financial assets within the time limit specified by laws and regulations or common practice in accordance with
the terms of the contract. Trading day refers to the date when the Company promises to buy or sell financial
assets.If the following conditions are met the recognition of financial assets (or a portion of financial assets or a
group of similar financial assets) shall be derecognized that is they shall be written off from their accounts and
balance sheets:
(1) The right to receive cash flow of financial assets has expired;
(2) The right to receive cash flow of financial assets has been transferred or the Company has assumed the
obligation to timely pay the full amount of the cash flow received to a third party under the "transfer agreement";
and (a) has transferred substantially all the risks and rewards from the ownership of financial assets or (b)
abandoned the control of the financial asset though almost all risks and rewards from the ownership of the
financial asset are neither transferred nor retained.
2. Classification and measurement of financial assets
At the time of initial recognition the financial assets of the Company are classified according to the
Company's business model for the management of financial assets and the contractual cash flow characteristics
of financial assets as follows: financial assets measured at amortized cost financial assets measured at fair value
through other comprehensive income and financial assets measured at fair value through current profits and
losses. The subsequent measurement of financial assets depends on their classification:
The classification of financial assets is based on the Company's business model for the management of
financial assets and the cash flow characteristics of financial assets.
(1) Financial assets measured at amortized cost
Financial assets that meet the following conditions at the same time are classified as financial assets
measured at amortized cost: the Company's business mode of managing the financial assets is to collect the
contract cash flow as the target; the contract terms of the financial asset stipulate that the cash flow generated on
a specific date is only the payment of principal and interest based on the amount of outstanding principal. For
such financial assets the effective interest rate method is adopted and subsequent measurement is made at
amortized cost and the gains or losses arising from amortization or impairment are included in the current
profits and losses.
(2) Debt instruments investment measured at fair value with changes included in other comprehensive
income
Financial assets that meet the following conditions at the same time are classified as financial assets
measured at fair value with their changes included in other comprehensive income: the Company's business
mode of managing the financial assets aims to collect the contract cash flow and sell them; the contract terms of
the financial asset stipulate that the cash flow generated on a specific date is only the payment of principal and
interest based on the amount of outstanding principal. For such financial assets fair value is adopted for
subsequent measurement. The discount or premium is amortized using the effective interest rate method and
recognized as interest income or expense. Except the impairment loss and the exchange difference of foreign
currency monetary financial assets are recognized as the current profits and losses the changes in the fair value
of such financial assets are recognized as other comprehensive income until their accumulated gains or losses
are transferred into the current profits and losses when the financial asset is derecognized. Interest income
related to such financial assets is included in the current profits and losses.
(3) Equity instruments investment measured at fair value with changes included in other comprehensive
income
The Company irrevocably chooses to designate part of the non-tradable equity instrument investment as
financial assets measured at fair value through other comprehensive income. Only the relevant dividend income
is included in the current profits and losses and the changes in fair value are recognized as other comprehensive
income until their accumulated gains or losses are transferred into retained earnings when the financial asset is
derecognized.
(4) Financial assets measured at fair value with changes included in the current profits and losses
The financial assets other than the above financial assets measured at amortized cost and those at fair value
through other comprehensive income are classified as financial assets measured at fair value with changes
included in the current profits and losses. At the time of initial recognition for the purpose of elimination or
significant reduction of accounting mismatch financial assets can be designated as those measured at fair value
with changes included in the current profits and losses. For such financial assets fair value is used for
subsequent measurement and all changes in fair value are included in the current profits and losses.If and only when the Company changes the business model for managing financial assets it will reclassify
all the affected financial assets.For the financial assets measured at fair value and whose changes are included in the current profits and
losses the relevant transaction costs are directly included in the current profits and losses and such costs of
other categories of financial assets are included in the initial recognition amount.
3. Classification and measurement of financial liabilities
During initial recognition the Company's financial liabilities are classified as: "financial liabilities
measured at amortization cost" and "financial liabilities measured at fair value with their changes included into
the current profit and loss".Financial liabilities satisfying one of the following requirements can be designated as financial liabilities
measured at fair value with their changes included in the current profit and loss during initial measurement: (1)
Such designation can eliminate or remarkably reduce the accounting mismatch; (2) According to group risk
management or investment strategy in the formal written documents the management and performance
evaluation of the portfolio of financial liabilities or portfolio of financial assets and financial liabilities are
conducted on the basis of fair price and within the group it is reported to the key management personnel on
such basis; (3) Such financial liabilities include embedded derivatives requiring separate splitting.The Company determines the classification of financial liabilities at the time of the initial recognition. For
the financial liabilities measured at fair value with changes included in the current profits and losses the
relevant transaction costs are directly included in the current profits and losses and such costs of other financial
liabilities are included in the initial recognition amount.The subsequent measurement of financial liabilities depends on their classification:
(1) Financial liabilities measured at amortized cost
For such financial liabilities the effective interest method is applied with subsequent measurement at
amortized cost.
(2) Financial liabilities measured at fair value with changes included in the current profits and losses
Financial liabilities measured at fair price and with changes credited to the current profit or loss including
trading financial liabilities (including derivative instruments classified as financial liabilities) and financial
liabilities that are designated at the initial recognition to be measured at fair price and with changes credited to
the current profit or loss.
4. Set off of financial instruments
If the following conditions are met at the same time financial assets and financial liabilities are presented
in the balance sheet at the net amount after offsetting each other: the Company has the legal right to offset the
recognized amount which is currently enforceable; they plan to settle at the net amount or realize the financial
assets and pay off the financial liabilities at the same time.
5. Impairment of financial assets
The Company recognizes the loss provision based on the expected credit loss for the financial assets
measured at the amortized cost the debt instrument investment and financial guarantee contract measured at the
fair value and whose changes are included in other comprehensive income. The term "credit loss" refers to the
difference between all the contractual cash flows that the Company discounted at the original effective interest
rate and received according to the contract and all the expected cash flows i.e. the present value of all the cash
shortage.Upon considering all reasonable and well-founded information (including forward-looking information)
the Company estimates the expected credit impairment loss is withdrawn for "financial assets measured at
amortized cost" and "financial asset (debt instruments) measured at fair value with their changes included in
other comprehensive income" in single or combined manner.(1) General model of expected credit loss
If the credit risk of this financial instrument has increased obviously since initial recognition the Company
will measure the loss reserves according to the expected credit loss amount of such financial instrument in the
whole duration; if the credit risk of this financial instrument hasn't increased obviously since initial recognition
the Company will measure the loss reserves according to the expected credit loss amount of such financial
instrument in the next 12 months. The increased or reversed amount of the loss provisions arising therefrom
shall be included in the current profits and losses as impairment losses or gains. The specific assessment of
credit risk by the Company is detailed in the Note "XI. Risks Associated with Financial Instruments".Generally in case of overdue for more than 30 days the Company will consider that the credit risk of such
financial instrument has increased obviously unless conclusive evidence is available to prove that the credit risk
of such financial instrument hasn't obviously increased since the initial recognition.To be specific the Company divides the credit impairment process of financial instruments that have not
been impaired at the time of purchase or origination into three stages with different accounting treatment for
the impairment of financial instruments at different stages:
First stage: credit risk has not increased significantly since initial recognition
For the financial instrument at this stage the enterprise shall measure the loss provision according to the
expected credit loss in the next 12 months and calculate the interest income as per its book balance (i.e. without
deducting the impairment provision) and the actual interest rate (if the instrument is a financial asset the same
below).Second stage: the credit risk has increased significantly since the initial recognition but the credit
impairment has not occurred
For the financial instrument at this stage the enterprise shall measure the loss provision according to the
expected credit loss of the instrument thought the whole duration and calculate the interest income as per its
book balance and the actual interest rate.Third stage: credit impairment occurs after initial recognition
For the financial instrument at this stage the enterprise shall measure the loss provision according to the
expected credit loss of the instrument thought the whole duration but the calculation of interest income is
different from the financial assets at the first two stages. For the financial assets with credit impairment the
enterprise shall calculate the interest income according to its amortized cost (book balance minus accrued
provision for impairment i.e. book value) and the actual interest rate.For the financial assets with credit impairment at the time of purchase or origination the enterprise shall
only recognize the change of expected credit loss in the whole duration after initial recognition as loss provision
and calculate the interest income as per its amortized cost and the effective interest rate adjusted by credit.
(2) Receivables and lease receivables
The Company measures the loss provisions as per the amount of expected credit losses throughout the
whole duration by the use of simplified model for expected credit loss for receivables specified in Accounting
Standards for Business Enterprises No. 14 - Income excluding significant financing components (including
cases in which financing components in contracts not exceeding one year are not taken into account in
accordance with the standards).The Company makes accounting policy choices to adopt a simplified model for expected credit loss i.e.measuring the loss provisions as per the amount equivalent to the expected credit loss throughout the whole
duration for receivables including significant financing components and lease receivables regulated by
Accounting Standards for Business Enterprises No. 21 - Leasing.
6. Transfer of financial assets
The financial assets shall be derecognized when the Company has transferred all the risks and rewards on
the ownership of the financial assets to the transferee. The financial assets shall not be derecognized if the
Company retains all the risks and rewards on the ownership of the financial assets.If the Company neither transfers nor retains almost all the risks and rewards in the ownership of the
financial asset the following conditions shall be referred to: if it gives up the control over the financial asset it
shall terminate the recognition of the financial asset and recognize the assets and liabilities generated; if it does
not abandon the control over the financial asset the relevant financial assets shall be recognized according to
the extent to which it continues to be involved in the transferred financial asset and the relevant liabilities shall
be recognized accordingly.If the financial guarantee is provided to the transferred financial assets to continue to be involved the
assets generated from the continued involvement shall be recognized according to the lower of the book value
of the financial assets and the amount of financial guarantee. Financial guarantee amount refers to the maximum
amount that will be required to be repaid out of consideration received.12. Notes receivable
The Company divides notes receivable into two portfolios of bank acceptance bills and commercial
acceptance bills by type of financial instrument.For notes receivable divided into portfolios the Company calculates expected credit losses based on
default risk exposure and the expected credit loss rate during the entire period of continued existence by
reference to its historical credit loss experience the current status and the prediction of future economic
conditions.With respect to bank acceptance bills the Company considers its overdue default risk to be 0 for its risk of
overdue credit loss is low and has not significantly increased since the initial recognition because the
acceptance bank pays the payee or holder a certain amount unconditionally when the bill is due.In respect of commercial acceptance bills the Company believes that the probability of default is
correlated with the aging and bad debts shall be accrued for the expected credit loss of accounts receivables
according to the accounting policy.
13. Accounts receivable
The Company measures the loss provisions as per the amount of expected credit losses throughout the
whole duration by the use of simplified model for expected credit loss for receivables specified in Accounting
Standards for Business Enterprises No. 14 - Income excluding significant financing components (including
cases in which financing components in contracts not exceeding one year are not taken into account in
accordance with the standards). The increased or reversed amount of loss provisions generated therefrom shall
be included in the current profits and losses as impairment losses or gains.The Company has implemented Accounting Standard No. 22 - Recognition and Measurement of Financial
Instruments (CK [2017] No. 7) since January 1 2019. The Company believes that the probability of default is
related to the aging which is still a mark of whether the credit risk of the Company's accounts receivable
increases significantly after it has reviewed the appropriateness of the provision for bad debts receivable in
previous years based on the Company's historical bad debt losses. Therefore credit risk loss of the Company's
accounts receivable is still estimated on the basis of aging according to the original loss ratio of previous years.The accounting policies for measuring overdue credit loss of accounts receivable adopted by the Company are
as follows:
For accounts receivable that there is objective evidence of impairment and other accounts that are suitable
for a single assessment impairment tests shall be conducted separately to confirm expected credit losses and
make impairment provisions for individual items. For accounts receivable for which there is no objective
evidence of impairment or when the expected credit loss of a single financial asset cannot be assessed at a
reasonable cost the Company divides accounts receivable into several portfolios according to the characteristics
of credit risks and calculates the expected credit loss based on the portfolios.
1. Accounts receivable with single provision for bad debts
At the end of the period the amount of individual accounts receivable is tested separately for impairment.If there is objective evidence that it is impaired the impairment loss shall be recognized with provision for bad
debts according to the difference between the present value of future cash flow and the book value.
2. Receivables with provision for bad debts by portfolio
The receivables without impairment according to the separate test at the end of the period are divided into
several portfolios according to aging as a credit risk characteristic impairment losses are calculated and
determined at a certain ratio of the balance of these receivables at the end of the period (which can be separately
tested for impairment) and the provision for bad debts is made.Except for the receivables for which provision for impairment has been made separately the Company
determines the proportion for following bad debt provision based on the actual loss rate of the portfolio of the
same or similar receivables in previous years with the aging of receivables as the credit risk feature and in
combination with the current situation:
Aging Estimated credit loss rate of accounts receivable (%)(note)
Within 1 year (inclusive) 3.10%
1-2 years (including 2 years) 9.04%
2-3 years (including 3 years) 22.11%
3-4 years (including 4 years) 47.51%
4-5 years (including 5 years) 84.26%
Above 5 years 100.00%
Including: those that have been determined to be
irrecoverable Write-off
Note: When measuring the expected credit loss of account receivables the Company has referred to the
historical experience of credit loss and adjusted it based on forward-looking estimates.14. Receivables financing
Financial assets that meet the following conditions at the same time are classified as financial assets
measured at fair value with their changes included in other comprehensive income: the Company's business
mode of managing the financial assets aims to collect the contract cash flow and sell them; the contract terms of
the financial asset stipulate that the cash flow generated on a specific date is only the payment of principal and
interest based on the amount of outstanding principal.If the Company transfers accounts receivable bank acceptance bills etc. held by the Company in the form
of discount or endorsement and such transactions are frequent and involve a large amount its business
management model is essentially to both collect and sell cash flows arising from contracts which are classified
as financial assets whose changes are measured at fair value and credited to other comprehensive income in
accordance with the relevant provisions of the financial instruments criteria.For accounts receivable financing divided into portfolios the Company calculates expected credit losses
based on default risk exposures and expected credit loss rates over the entire duration taking into account
historical credit loss experiences present conditions and projections of future economic conditions.With respect to bank acceptance bills the Company considers its overdue default risk to be 0 for its risk of
overdue credit loss is low and has not significantly increased since the initial recognition because the
acceptance bank pays the payee or holder a certain amount unconditionally when the bill is due.In respect of those divided into the aging-based portfolio the Company believes that the probability of
default is correlated with aging and bad debts shall be accrued for the expected credit loss of accounts
receivables according to the accounting policy.
15. Other receivables
Recognition method and accounting treatment method for expected credit loss of other receivables
The Company measures the impairment loss by an amount equivalent to the expected credit loss within the
next 12 months or over the entire duration depending on whether the credit risk of other receivables has
increased significantly since the initial recognition. In addition to other receivables with individual credit risk
assessment they are divided into different portfolios based on their credit risk characteristics:
Description of Basis for determining the
portfolio portfolios Provision methods
Portfolio I Risk-free portfolio Risk-free amounts receivable from related parties within the scope
of the consolidation
Portfolio II Aging portfolio The credit risk of the portfolio is characterized by the aging.For other accounts receivable divided into a portfolio the Company calculates expected credit losses based
on default risk exposures and expected credit loss rates in future 12 months or over the entire duration taking
into account historical credit loss experiences present conditions and projections of future economic conditions
and determines the ratio of bad debt provision to be accrued in combination with current conditions:
Aging Expected rate of credit loss of other accounts receivable
Within 1 year (inclusive) 5.00%
1-2 years (including 2 years) 10.00%
2-3 years (including 3 years) 30.00%
3-4 years (including 4 years) 50.00%
4-5 years (including 5 years) 80.00%
Above 5 years 100.00%
Including: those that have been determined to be
irrecoverable Write-off
16. Contract assets
1. Recognition methods and standards for the contractual assets
The Company presents contractual assets or contract liabilities in the balance sheet based on the
relationship between performance obligations and customer payments. The Company's right to receive
consideration for goods or services transferred to customers (excluding receivables) is listed as contractual
assets.
2. The recognition method and accounting treatment for expected credit loss of contractual assets
For contract assets without material financing components (including cases in which financing components
in contracts not exceeding one year are not taken into account in accordance with the standards) as specified in
the Accounting Standards for Business Enterprises No. 14 - Income the Company measures provisions for
losses as per the amount of expected credit losses throughout the whole duration by using a simplified model for
the expected credit loss. The increased or reversed amount of loss provisions generated therefrom shall be
credited to the current profits and losses as impairment losses or gains.The Company measures the loss provisions as per the amount of expected credit losses throughout the
whole duration by the use of simplified model for expected credit loss for contractual assets including
significant financing components.17. Inventories
(1) Classification of inventories
Inventory refers to finished products or commodities held by the Company for sale in daily activities
products in the process of production materials and supplies consumed in the process of production or
provision of services including raw materials products in process semi-finished products goods in stock
materials for consigned processing low-value consumable goods etc.
(2) Pricing method of delivered inventories
Inventories of the Company are priced with the weighted-average method when delivered.
(3) Inventory system
The Company adopts the perpetual inventory system takes inventory at least once a year and credits the
amount of inventory gains and losses to the profit and loss of the current year.
(4) Recognition criteria and accrual method of provision for impairment on inventories
On the balance sheet date inventories are measured at the lower of cost and net realizable value and if the
cost of the inventory is higher than its net realizable value a provision is made for impairment on inventories
and credited to the current profit/loss.Determining the net realizable value of the inventory shall be based on the available reliable evidence with
consideration to such factors as the purpose of holding the inventory and the impact of events after the balance
sheet date.* The net realizable value of any inventory used directly for sale such as finished products goods and
materials for sale shall be determined by subtracting the estimated sales expenses and related taxes from the
estimated selling price during normal production and operation. For inventories held for the purpose of
executing sales contracts or service contracts the contract price is used as the measurement basis for their net
realizable value; if the quantity of inventory held exceeds the quantity ordered under the sales contract the net
realizable value of the excess inventory is measured based on the general selling price. For materials held for
sale their net realizable value is measured based on the market price.* The net realizable value of the inventory of materials to be processed is determined in the normal course
of production and operations by the estimated selling price of the finished goods produced less the estimated
costs to be incurred at completion estimated selling expenses and related taxes. If the net realizable value of the
finished product produced with it is higher than the cost the material is measured at cost; If a decline in the
price of the material indicates that the net realizable value of the finished product is lower than the cost the
material is measured at net realizable value and a provision is made for impairment on inventory based on its
difference.* The Company generally makes provisions for impairment on inventory on the basis of individual
inventory items; in the case of inventories that are large in quantity and low in unit price provisions are made
according to the classes of inventories.* At the balance sheet date if the factors affecting the previous write-down of the value of the inventory
have disappeared the amount of the write-down shall be restored and reversed within the amount of the original
provision for the impairment on inventory and the reversed amount shall be credited to the current profit/loss.
(5) Amortization method of revolving materials
* Amortization method of low-value consumables: One-off writing off upon issuance.* Amortization method of packaging materials: One-off writing off upon issuance.
18. Assets held for sale
None.
19. Debt investment
See V. 11. "Financial Instruments" in the Report for the determination and accounting treatment methods
for expected credit losses in debt investments by the Company.
20. Other debt investment
See V. 11. "Financial Instruments" in the Report for the determination and accounting treatment methods
for expected credit losses in other debt investments by the Company.
21. Long-term receivables
See V. 11. "Financial Instruments" in the Report for the determination and accounting treatment methods
for expected credit losses in long-term receivables by the Company.22. Long-term equity investment
Long-term equity investments of the Company include equity investments that control and have significant
influence on the investee and equity investments in joint ventures. Investees that can be significantly influenced
by the Company are joint ventures of the Company.
(1) Basis for determination of common control over and significant influence on the investee
Joint control refers to the common control of an arrangement in accordance with relevant agreements and
the activities related to the arrangement must be agreed upon by the parties holding control right before the
decision can be made. In determining whether there is common control it is first determined whether all
participants or a combination of participants collectively control the arrangement and if all participants or a
group of participants must act in concert to determine the activities related to an arrangement it is deemed that
all participants or a group of participants collectively control the arrangement. It is then determined whether
decisions about the activities related to the arrangement must be made by consensus among the participants who
collectively control the arrangement. It does not constitute common control if there are two or more
combinations of participants that collectively control an arrangement. In determining whether there is common
control the protective rights enjoyed are not taken into account.Significant influence refers to that the investor has the right to participate in making decisions on the
financial and operating policies of the investee but has no right to control or jointly control the formulation of
these policies with other parties. In determining whether significant influence can be exerted on the investee
consideration shall be given to the impact when the voting shares directly or indirectly held by the investor in
the investee and the current exercisable potential voting rights held by the investor and other parties are
assumed to be converted to equity in the investee including the impact of the current convertible warrants
stock options and convertible corporate bonds issued by the investee.When the Company owns more than 20% (including 20%) but less than 50% of the voting shares of the
investee directly or indirectly through a subsidiary it is generally considered the Company can exert a
significant influence on the investee unless there is clear evidence that the Company cannot participate in
making production and operation decisions of the investee under such circumstances in which case there is no
significant influence.
(2) Determination of initial investment cost
For long-term equity investments arising from business merger the investment cost is determined
according to the following regulations:
A. In a business merger under the same control where the merging party pays cash transfers non-cash
assets or assumes debt as the merger consideration the initial investment cost of the long-term equity
investment is based on the share of the mergee's owner's equity in the book value in the consolidated financial
statements of the ultimate controlling party on the merger date. In case of a difference between the initial
investment cost of a long-term equity investment and the cash paid the transferred non-cash assets or the book
value of the debt assumed the capital reserve shall be adjusted; if the capital reserve is insufficient for writing
down the retained earnings shall be adjusted;
B. In a business merger under the same control where the merging party issues equity securities as the
merger consideration the initial investment cost of the long-term equity investment is based on the share of the
mergee's owner's equity in the book value in the consolidated financial statements of the ultimate controlling
party on the merger date. With the total carrying value of the issued shares as the share capital in case of a
difference between the initial investment cost of a long-term equity investment and the total carrying value of
the shares issued the capital reserve shall be adjusted; if the capital reserve is insufficient for writing down the
retained earnings shall be adjusted;
C. In a business merger not under the same control the merger cost as the initial investment cost of long-
term equity investment is determined with the fair value of the assets paid liabilities incurred or assumed and
equity securities issued to obtain the control of the acquiree on the purchase date. Intermediary fees such as
audit legal service evaluation and consulting fees and other related management expenses incurred by the
merging party are credited to the current profit or loss when incurred.Except long-term equity investments arising from business merger the investment cost of long-term equity
investments acquired by other means is determined according to the following regulations:
A. For long-term equity investments acquired by cash payments the purchase price actually paid is the
investment cost. Initial investment costs include fees taxes and other necessary expenses directly related to the
acquired long-term equity investments;
B. For long-term equity investments acquired by issuing equity securities the fair value of the issued
equity securities is the initial investment cost;
C. In a business merger not under the same control the merger cost as the initial investment cost of long-
term equity investment is determined with the fair value of the assets paid liabilities incurred or assumed and
equity securities issued to obtain the control of the acquiree on the purchase date. Intermediary fees such as
audit legal service evaluation and consulting fees and other related management expenses incurred by the
merging party are credited to the current profit or loss when incurred.D. For long-term equity assets acquired by debt restructuring the entry value is determined based on the
fair value of the given up debt and other costs such as taxes that are directly attributable to the asset and the
difference between the fair value of the given up debt and the book value is credited to the current profit or loss.
(3) Subsequent measurement and recognition methods for profits and losses
Long-term equity investments that the Company has the control over the investee are accounted for with
the cost method; long-term equity investments of associated enterprises and joint ventures are accounted for
with the equity method.* Cost method
For long-term equity investments accounted for with the cost method the cost of long-term equity
investments is adjusted when adding or withdrawing investments; the cash dividends or profits declared and
distributed by the investee are recognized as current investment income.* Equity method
For long-term equity investments accounted for with the equity method the general accounting treatment
is as follows:
If the investment cost of a long-term equity investment of the Company is greater than the fair value share
of the investee's identifiable net assets to which it is entitled at the time of investment the initial investment cost
of the long-term equity investment shall not be adjusted; if the initial investment cost of a long-term equity
investment is less than the fair value share of the identifiable net assets of the investee to which it is entitled at
the time of investment the difference is credited to the current profit or loss and the cost of the long-term
equity investment is adjusted at the same time.The Company recognizes investment income and other comprehensive income respectively and adjusts the
book value of long-term equity investments in accordance with the share of net profit/loss and other
comprehensive income realized by the investee to which it is entitled or shall contribute; the Company
calculates the portion of profits or cash dividends declared and distributed by the investee to which it is entitled
and reduces the book value of the long-term equity investment accordingly; in case of other changes in owners'
equity other than net profit/loss other comprehensive income and profit distribution of the investee the book
value of the long-term equity investment shall be adjusted and credited to owners' equity. When recognizing the
share of the investee's net profit or loss to which it is entitled the net profit of the investee is recognized after
adjustment based on the fair value of the investee's identifiable net assets at the time of acquisition of the
investment. If the accounting policies and accounting periods adopted by the investee are inconsistent with
those of the Company the financial statements of the investee shall be adjusted in accordance with the
accounting policies and accounting periods of the Company and the investment income other comprehensive
income etc. shall be recognized accordingly. Gains and losses on unrealized internal transactions between the
Company and associated enterprises and joint ventures are offset in accordance with the proportion attributable
to the Company as it is entitled to on the basis of which investment gains and losses are recognized. If an
unrealized internal transaction loss between the Company and the investee is an asset impairment loss it shall
be fully recognized.If significant influence can be exerted on the investee or common control but not control can be exercised
due to additional investment or other reasons the sum of the fair value of the originally held equity investment
and the cost of the new investment shall be the initial investment cost as being accounted for with the equity
method instead. Where the equity investment originally held is classified as an investment in other equity
instruments the difference between its fair value and book value as well as the accumulated gains or losses
originally credited to other comprehensive income shall be transferred from other comprehensive income and
credited to retained earnings in the current period as being accounted for with the equity method instead.If the common control or significant influence on the investee is lost due to the disposal of part of the
equity investment or other reasons the remaining equity after such disposal is measured at fair value instead
and the difference between the fair value and book value on the date when the common control or significant
influence is lost is credited to the current profit or loss. Other comprehensive incomes recognized as a result of
accounting for the original equity investment with the equity method shall be accounted for on the same basis as
the direct disposal of the relevant assets or liabilities by the investee upon termination of applying the equity
method for accounting.
(4) Equity investments held for sale
Where all or part of the equity investments of associated enterprises or joint ventures are classified as
assets held for sale refer to V. 18 of the Financial Report for relevant accounting treatment.The equity method shall be applied for the accounting treatment of the remaining equity investments not
classified as assets held for sale.If an equity investment in an associated enterprise or joint venture that has been classified as an asset held
for sale no longer meets the conditions for being so classified it shall be adjusted retroactively with the equity
method from the date it is classified as an asset held for sale. The financial statements of the period when they
are classified as held for sale shall be adjusted accordingly.
(5) Methods for impairment test and provision for impairment
Refer to V. 30 of the Report for details about the asset impairment provision method for investments in
subsidiaries joint ventures and associated enterprises.
23. Investment property
Measurement model of investment property
Measurement with cost method
Depreciation or amortization method
1. Investment property includes leased land use rights land use rights held and ready to be assigned after
appreciation and leased buildings.
2. Investment property is measured initially at cost and subsequently with cost model. The provision for
depreciation and amortization of the investment property are made in the way as used for fixed assets and
intangible assets. If there is any sign showing that the investment property is impaired on the balance sheet date
the provision of impairment reserve shall be made accordingly based on the difference between the book value
and the recoverable amount.See V. 30. Long-term assets impairment for details about the methods for impairment test and provision for
impairment applicable to investment properties.If the real estate for private use or inventory is converted to an investment property or the investment
property is converted to a real estate for private use the book value before such conversion shall be deemed as
the entry value after the conversion.If the purpose of an investment property is changed to private use this investment property shall be
converted into a fixed or intangible asset from the date of change. If the purpose of a property is changed to rent
gains or capital appreciation from private use the fixed asset or intangible asset shall be converted into an
investment property from the date of change. If any asset is converted into an investment property measured
with the cost model the book value before the conversion shall be deemed as the entry value after the
conversion. If any asset is converted into an investment property measured with the fair value model the fair
value on the conversion date shall be deemed as the entry value after the conversion.An investment property shall be derecognized if this investment property is disposed of or permanently
retired and it is expected that no economic benefits can be obtained from its disposal. The disposal income
from the sale transfer scrapping or damage of an investment property shall be included in the current profits
and losses after deducting its book value and relevant taxes and dues.
24. Fixed assets
(1) Conditions for recognition
Fixed assets refer to the tangible assets that are held for production of goods provision of labor services
lease or operation management and of which the service life exceeds one fiscal year.Fixed assets shall be recorded at the actual cost upon the acquisition and subject to the provision for
straight-line depreciation from the next month following the date when they are ready for use as intended.
(2) Depreciation method
Annual depreciation
Category Depreciation method Depreciation life Residual rate
rate
Houses and buildings Straight-line method 20-40 years 5% 2.375%-4.75%
Machinery and
Straight-line method 10 years 5% 9.50%
equipment
Transportation
Straight-line method 5 years 5% 19.00%
equipment
Electronics and other
Straight-line method 5 years 5% 19.00%
equipment
25. Construction in progress
(1) Construction in progress is accounted for by category of approved projects.
(2) Criteria and timing for converting construction in progress into fixed assets
The entry value of fixed assets shall be the total expenditure incurred before the asset constructed reaches
the predetermined usable state of the project under construction including construction costs original cost of
machinery and equipment and other necessary expenditures incurred to bring the project under construction to
the predetermined usable state as well as borrowing costs incurred to borrow specifically for the project before
the asset reaches the predetermined usable state and borrowing costs incurred for the general borrowings used.When a project reaches the predetermined usable state after completion of installation or construction the
project under construction is carried over to fixed assets by the Company. Fixed assets constructed that have
reached the predetermined usable state but have not yet been arranged for the final settlement of account shall
from the date when the predetermined usable state is reached be carried over to fixed assets at the estimated
value according to the project budget construction cost or actual project cost etc. and a provision for the
depreciation of the fixed assets shall be made in accordance with the Company's fixed assets depreciation policy.After the final settlement of account the original provisional value shall then be adjusted according to the actual
cost but the amount of depreciation originally accrued shall not be adjusted.
26. Borrowing costs
(1) Recognition principle for capitalizing borrowing costs and capitalization period
Borrowing costs incurred by the Company that can be directly attributable to the acquisition construction
or production of assets eligible for capitalization are capitalized and credited to the relevant asset cost when the
following conditions are all met:
* Asset expenditures have incurred;
* Borrowing costs have incurred;
* Acquisition construction or production activities necessary for assets to reach the intended usable state
have begun.Other borrowing interests discounts or premiums and currency translation differences are credited to
current profit or loss.The capitalization of borrowing costs shall be suspended if the acquisition construction or production of
assets eligible for capitalization is abnormally interrupted for more than 3 successive months.When the acquisition construction or production of assets eligible for capitalization reach the
predetermined usable or marketable state the capitalization of its borrowing costs shall cease; subsequent
borrowing costs shall be recognized as expenses in the incurring period.
(2) Capitalization rate of borrowing costs and calculation method of capitalized amount
Where specific borrowings are made for the acquisition construction or production of assets eligible for
capitalization the amount of interest expense actually incurred during the period of the specific borrowings
minus the interest income derived from depositing the loan funds not yet used in the bank or the investment
income derived from temporary investment shall be determined as the capitalized amount of interest expense of
specific borrowings.Where general borrowings are used for the acquisition construction or production of assets eligible for
capitalization the amount of interest to be capitalized on the general borrowings shall be calculated and
determined by multiplying the weighted average amount of the accumulated asset expenditure in excess of the
specific borrowings by the capitalization rate of the general borrowings. The capitalization rate is determined by
calculating the weighted average interest rate on general borrowings.
27. Biological assets
None.
28. Oil and gas assets
None.
29. Intangible assets
(1) Service life and its determination criteria estimation amortization method or review procedure
(1) Pricing method of intangible assets
It is recorded at actual cost at the time of acquisition.
(2) Service life and amortization of intangible assets
* Estimation of useful life of intangible assets with a limited useful life:
The land usage right shall be averagely amortized within the remaining service life (generally 50 years)
the software shall be averagely amortized within 3-5 years and the patent rights and non-patent technologies
within 5-10 years.At the end of each year the Company reviews the useful life and amortization method of intangible assets
with a limited useful life. Upon review the useful life and amortization method of intangible assets at the end of
the current period are no different from those previously estimated.* Intangible assets that cannot be predicted to bring economic benefits to the enterprise shall be regarded
as intangible assets with uncertain useful life. For intangible assets with an uncertain service life the Company
reviews their service lives at the end of each year. If its life is still uncertain after the review an impairment test
is conducted on the balance sheet date.* Amortization of intangible assets
For intangible assets with limited useful life the Company determines their useful life at the time of
acquisition and amortizes them reasonably within the useful life with the straight-line method and the
amortized amounts are credited to the current profit/loss or the cost of the related assets according to the
beneficial items. The specific amortized amount is the amount of its cost less the estimated salvage value. For
intangible assets for which provisions for impairment have been made the accumulated amount of impairment
provisions for the assets shall also be deducted. The salvage value of an intangible asset with a limited useful
life is deemed to be zero except where a third party has committed to acquire the intangible asset at the end of
its useful life or information about the estimated salvage value is available based on an active market and such
market is likely to exist at the end of the useful life of the asset.Intangible assets with an uncertain service life shall not be amortized. At the end of each year the useful
life of intangible assets with uncertain useful life is reviewed and if there is evidence that its useful service life
is limited its useful life is estimated and systematically amortized within the expected useful life.
(2) Scope of R&D expenditures and related accounting treatment methods
The Company includes all expenses directly related to the development of R&D activities as R&D
expenses including salaries of R&D personnel direct input costs depreciation costs and long-term amortized
expenses design costs equipment commissioning costs intangible assets amortized costs commissioned
external R&D costs and other expenses.1. Specific criteria for dividing the research and development stages of internal R&D projects
* The Company regards the period for developing information and conducting related preparations for
further development activities as the research stage and the expenditure incurred in the research stage of
intangible assets is credited to the current profit or loss when incurred.* The period in which development activities are carried out after the Company has completed the work
in the research stage is regarded as the development stage.
2. Specific criteria for capitalization of expenditures in the development stage
Expenditures incurred at the development stage are recognized as intangible assets only when all of the
following conditions are met:
A. The intangible asset is completed to make it technically feasible for use or sale;
B. There is an intention to complete and use or sell the intangible asset;
C. Intangible assets generate economic benefits in a manner that can prove the existence of a market for
products produced with the intangible asset or the existence of a market for the intangible asset itself and the
usefulness of the intangible asset if used internally;
D. The development of the intangible asset is supported by adequate technical financial and other
resources and the capability to use or sold the intangible asset is available;
E. Expenditures attributable to the development stage of the intangible asset can be well measured.
30. Long-term assets impairment
Asset impairment of long-term equity investments of subsidiaries associated enterprises and joint ventures
and asset impairment of investment real estates fixed assets construction in progress right-of-use assets
intangible assets goodwill etc. (except inventories investment real estates measured at fair value deferred tax
assets and financial assets) shall be determined by the following method:
At the balance sheet date the Company determines whether there is any indication for possible impairment
of the asset. If there is any indication of impairment the Company will estimate the recoverable amount and
conduct an impairment test. For goodwill arising from a business merger intangible assets with uncertain useful
life and intangible assets that have not reached the useful condition the impairment tests shall be carried out
every year whether there are indications of impairment or not.The recoverable amount is determined by the higher of the net amount of the asset i.e. fair value minus
disposal expenses and the present value of the expected future cash flows of the asset. The Company estimates
the recoverable amount on the basis of individual assets; If it is difficult to estimate the recoverable amount of a
single asset the recoverable amount of the asset group shall be determined on the basis of the asset group to
which the asset is classified. The determination of an asset group is based on whether the major cash inflow
generated by the asset group is independent of the cash inflow of other assets or other asset groups.When the recoverable amount of an asset or asset group is lower than its book value the Company will
write down its book value to the recoverable amount credit the amount reduced to the current profit or loss and
make the corresponding asset impairment provision.For the impairment test of goodwill the book value of goodwill arising from the business merger is
apportioned to the relevant asset group in a reasonable manner from the date of acquisition; if it is difficult to
apportion to the relevant asset group it is apportioned to the relevant portfolio of asset groups. The relevant
asset group or portfolio of asset groups is one that can benefit from the synergies of the business merger and is
not larger than the reporting segment identified by the Company.During the impairment test if there are indications of impairment in the asset group or portfolio of asset
groups related to goodwill the impairment test is first carried out on the asset groups or portfolios without
goodwill to calculate the recoverable amount and determine the corresponding impairment loss. Then the
impairment test is carried on the asset groups or portfolios with goodwill to compare their book value and
recoverable amount and determine the impairment loss of goodwill if the recoverable amount is lower than the
book value.Once an asset impairment loss is recognized it will not be reversed in future accounting periods.
31. Long-term deferred expenses
Long-term deferred expenses refer to various expenses that have been incurred by the Company and shall
be amortized in the current period and the following periods if the total amortization period is longer than 1 year.The actual amount is accounted for and amortized evenly over the benefit period or specified period. In
case future accounting period cannot benefit from long-term deferred expenses all unamortized value of the
item shall be transferred into the current profits and losses.32. Contract liabilities
The Company presents contractual assets or contract liabilities in the balance sheet based on the
relationship between performance obligations and customer payments. The Company's obligation to transfer
commodities or services to customers for consideration received or receivable by the Company is listed as
contract liability.
33. Employee compensation
(1) Accounting treatment of short-term compensation
* Basic pay of employee (salary bonus allowance and subsidy)
During the accounting periods in which employees provide services the Company recognizes the short-
term compensation actually incurred as a liability and includes it in the current profit or loss unless it is
required or allowed to be credited to the cost of assets by other accounting standards.* In-service employee benefits
Employee benefits incurred by the Company are credited to the profit or loss for the period in which they
are actually incurred based on the actual amounts incurred. In case of non-monetary employee benefits they
shall be measured at fair value.* Medical insurance premiums work-related injury insurance premiums maternity insurance and other
social insurance premiums and housing provident funds as well as trade union funds and employee education
funds
For medical insurance premiums work-related injury insurance premiums maternity insurance premiums
other social insurance premiums and housing provident funds as well as the funds for the trade union and the
education paid by the Company for employees the Company calculates the corresponding amount of the
employees' compensation and recognizes the corresponding liabilities according to the prescribed accrual basis
and proportion and credits them to the current profit or loss or related asset costs.* Short-term compensated absences
When an employee provides services that increase his or her future entitlement to compensated absences
the Company recognizes the employee's compensation associated with accumulated compensated absences and
measures it against the expected increase in the amount of payments due to accumulated unexercised
entitlement. The Company recognizes employee compensation related to non-cumulative compensated absence
during the accounting period in which the employee's absence actually occurred.* Short-term profit sharing plan
If the profit sharing plan meets the following conditions concurrently the Company will recognize the
relevant employee remuneration payable:
A. The enterprise has the statutory or presumptive obligation to pay the employees' compensation due to
past events;
B. The amount of obligatory employee compensation payable due as a result of the profit sharing plan can
be reliably estimated.
(2) Accounting treatment of post-employment benefits
* Defined contribution plan
In accounting periods in which services are provided by employees the Company recognizes the
contribution amount calculated according to the formulated contribution plan as a liability and credited it to the
current profit or loss or the relevant asset cost.If according to the defined contribution plan it is not expected to pay the full amount of contribution due
within twelve months after the end of the Annual Reporting Period in which the employee provides the relevant
services the Company measures the employee pay payable with the discounted total contribution amount by
reference to the corresponding discount rate (determined by the market yield of national bonds or high-quality
corporate bonds in the active market that match the term and currency of the defined contribution plan
obligations at the balance sheet date).* Defined benefit plan
A. Determination of present value and current service costs of obligations under the defined benefit plan
Unbiased and mutually consistent actuarial assumptions are used to estimate the relevant demographic and
financial variables measure the obligations arising from the defined benefit plan and determine the vesting
period of the related obligations under the expected cumulative benefit unit approach. The Company discounts
the obligations under the defined benefit plan at the corresponding discount rate (determined by the market
yield of national bonds or high-quality corporate bonds in the active market that match the term and currency of
the defined contribution plan obligations at the balance sheet date) to determine the present value of the
obligations and the current service costs.B. Confirmation of net liabilities or assets of defined benefit plan
If there are assets in a defined benefit plan the Company recognizes the deficit or surplus resulting from
the present value of defined benefit plan obligations less the fair value of defined benefit plan assets as a net
liability or net asset of the defined benefit plan.If there is a surplus in a defined benefit plan the Company measures the net assets of the defined benefit
plan to the lesser of the surplus of the defined benefit plan and the asset ceiling.C. Determination of amount to be credited to assets cost or current profit or loss
Service costs include current service costs past service costs and settlement gains or losses. Except the
service costs in the current period which are required or allowed to be credited to asset costs under other
accounting standards other service costs are credited to the current profit or loss.The net interest on net liabilities or net assets of defined benefit plans including interest gains on the assets
in the plan interest expenses on defined benefit plan obligations and interests affected by the asset ceiling are
credited to the current profit or loss.D. Determination of amount to be credited to other comprehensive income
Changes resulting from the remeasurement of net liabilities or net assets of defined benefit plans include:
(a) Actuarial gain or loss which is an increase or decrease in the present value of previously measured
defined benefit plan obligations due to actuarial assumptions and empirical adjustments;
(b) Return on plan assets less the amount included in the net interest on net liabilities or net assets of the
defined benefit plan;
(c) Changes due to impact of the asset ceiling less the amount included in the net interest on net liabilities
or net assets of the defined benefit plan.Changes resulting from the above remeasurement of net liabilities or net assets of defined benefit plans are
directly credited to other comprehensive income and are not allowed to be carried back to profit or loss in
subsequent accounting periods. Upon termination of the original defined benefit plan the Company carries
forward to undistributed profit in full the portion originally credited to other comprehensive income within the
scope of equity.(3) Accounting treatment of dismissal benefits
If the Company provides dismissal benefits to an employee the employee compensation liability arising
from the dismissal benefits is recognized at the sooner of the following two events and shall be credited to the
current profit or loss:
* When the Company cannot unilaterally withdraw the termination benefits provided by the termination
of the labor relation plan or cut-down proposal;
* When the Company confirms the costs or expenses related to the restructuring involving the payment of
termination benefits.If it is expected that the dismissal benefits cannot be paid in full amount within twelve months after the
end of the Annual Reporting Period the Company discounts the amount of the dismissal benefits by reference
to the corresponding discount rate (determined by the market yield of national bonds or high-quality corporate
bonds in the active market that match the term and currency of the defined contribution plan obligations at the
balance sheet date) and measures the employee pay payable with the discounted amount.
(4) Accounting treatment of other long-term employee benefits
None.
34. Estimated liabilities
(1) Recognition criteria for estimated liabilities
The Company recognizes obligations related to contingencies as estimated liabilities if they also meet the
following conditions:
* The obligation is a current obligation assumed by the Company;
* The performance of such obligation is likely to result in the outflow of economic benefits from the
Company;
* The amount of such obligation can be measured reliably.
(2) Measurement method for estimated liabilities
Estimated liabilities are initially measured according to the best estimate of expenditures required to meet
the relevant current obligations taking into account such factors as risks uncertainties and the time value of
money associated with contingencies. The book value of estimated liabilities is reviewed at each balance sheet
date. If there is solid evidence that the book value does not reflect the current best estimate the book value is
adjusted according to the current best estimate.
35. Share-based payment
(1) Type of share-based payment
Share-based payments of the Company include share-based payments settled in cash and those settled in
equity.
2. Determination method of fair value of equity instrument
* For shares granted to employees the fair value is measured at the market price of the Company's shares
and is adjusted to take into account the terms and conditions under which the shares are granted (excluding
vesting conditions other than market conditions). * For stock options granted to employees it is difficult to
obtain their market price in many cases. If there are no trading options with similar terms and conditions the
Company chooses an applicable option pricing model to estimate the fair value of the options granted.
(3) Basis for determining the best estimate of equity instruments with viable options
At each balance sheet date in the waiting period the Company will make the best estimate based on the
latest available subsequent information such as the change in the number of employees with viable options and
revise the number of equity instruments with options expected to be exercised to make the best estimate of the
equity instruments with viable options.
(4) Accounting treatment of implementation of share-based payment plan
Share-based payments settled in cash
* Share-based payments settled in cash where the vested options can be immediately exercised after being
granted is credited to the relevant cost or expense at the fair value of the liability assumed by the Company on
the grant date increasing the liability accordingly. The fair value of the liability is remeasured at each balance
sheet date prior to settlement and at the settlement date and its changes are credited to profit or loss.* For cash-settled share-based payments where the vested option cannot be exercised until the completion
of services or the fulfillment of specified performance conditions within the waiting period at each balance
sheet date in the waiting period services acquired during the period are credited to costs or expenses and
corresponding liabilities at the fair value amount of the liability assumed by the Company based on the best
estimate of exercising the option.Share-based payments settled in equity
* Share-based payments settled in equity where the vested option can be immediately exercised after
being granted in exchange of employees' services is credited to the relevant cost or expense at the fair value of
the equity instruments on the grant date increasing the capital reserve accordingly.* For equity-settled share-based payments where the vested option cannot be exercised in exchange of
employees' services until the completion of services or the fulfillment of specified performance conditions
within the waiting period at each balance sheet date in the waiting period services acquired during the period
are credited to costs or expenses and capital reserve at the fair value at the granting date of equity instruments
based on the best estimate of the number of equity instruments with exercisable option.
(5) Accounting treatment of modification of share-based payment plan
When the Company makes a modification to a share-based payment plan if the modification increases the
fair value of the equity instrument granted the increase in the services obtained is recognized according to the
increase in the fair value of the equity instrument; if the modification increases the number of equity
instruments granted the fair value of the increased equity instruments is recognized accordingly as an increase
in the acquired services. The increase in the fair value of equity instruments refers to the difference between the
original and modified fair values of equity instruments at the date of the modification. If a modification reduces
the total fair value of a share-based payment or the terms and conditions of a share-based payment plan is
modified to the detriment of employees further accounting treatment will be made for the services obtained like
such modification has never occurred unless the Company cancels some or all of the equity instruments granted.
(6) Accounting treatment of termination of the share-based payment plan
If equity instruments granted are canceled or settled in the waiting period (except those canceled due to
failure to fulfill the conditions for exercising the option) the Company will:
* Treat cancellation or settlement as an accelerated exercise option and immediately recognize the
amount that shall have been recognized within the remaining waiting period;
* Treat all payments made to employees at the time of cancellation or settlement as repurchases of equity
and credit the portion of the amount paid for the repurchase exceeding the fair value of the equity instrument at
the repurchase date to the current expense.In case of repurchasing the equity instruments that its employees have exercised the Company writes off
the owner's equity; the portion of any amount paid for the repurchase exceeding the fair value of the equity
instrument at the repurchase date is credited to the current profit or loss.
36. Preferred shares perpetual bonds and other financial instruments
None.
37. Revenue
Disclosing the accounting policies adopted for revenue recognition and measurement by business type
(1) General principles
Income is the total inflow of economic benefits generated in the daily activities of the Company which can
result in an increase in shareholders' equity and is not related to shareholders' invested capital.The Company has fulfilled performance obligation in the Contract that is recognizing revenue when the
customer obtains the control right of relevant commodities. Obtaining control over relevant goods refers to the
ability to direct the use of the goods and obtain substantially all of the economic benefits derived from them.If two or more performance obligations are included in a contract the Company apportions the transaction
price to each performed obligation in proportion to the individual selling price of the commodities or services
promised by each performed obligation and measures the revenue according to the transaction price
apportioned to each performed obligation.Transaction price is the amount of consideration that the Company expects to be entitled to receive in
connection with the transfer of commodities or services to a customer excluding payments received on behalf
of third parties. In case of a variable consideration when determining the transaction price in a contract the
Company determines the best estimation of the variable consideration based on the expected value or the most
likely amount and includes in the transaction price an amount not exceeding which is highly unlikely to result
in a material reversal of the accumulated recognized revenue at the time the relevant uncertainty is eliminated.If there is a significant financing component in a contract the Company will determine the transaction price
based on the amount payable by the customer in cash upon its acquisition of control of the commodity and
amortize the difference between the transaction price and the contract consideration with the effective interest
method over the term of the contract. The Company does not take into account the financing component if the
interval between the transfer of control and the payment of the price by the customer is less than one year.If one of the following conditions is met the performance obligation is fulfilled within a certain period
otherwise the performance obligation is fulfilled at a certain time point:
* Customers obtain and consume economic benefits arising from performance of the Company during the
Company's performance of the Contract.* The customer can control the in-process commodity during contract performance by the Company;
* The purpose of the commodity produced by the Company during contract performance is irreplaceable
and the Company is entitled to receive payments throughout the contract period for the performance completed
so far.For performance obligations fulfilled within a certain period of time the Company shall recognize revenue
according to the performance progress within that period except that the performance progress cannot be
reasonably determined. The Company determines the performance progress of services provided with the input
method (or output method). When the performance progress cannot be reasonably determined the income is
recognized based on the amount of costs incurred by the Company if compensation of such costs is expected
until the performance progress can be reasonably determined.For contract performance obligations fulfilled at a certain point of time the Company recognizes the
income at the time when the customer obtains the control right of relevant commodities. When judging whether
a customer has obtained the control of a commodity or service the Company takes the following indications
into account:
* The Company is currently entitled to receive payments in respect of the commodity or service i.e. the
customer has a current payment obligation in respect of the commodity;
* The Company has transferred the legal ownership of the commodity to the customer i.e. the customer
has had the legal ownership of the commodity;
* The Company has transferred the material object of the commodity to the customer i.e. the customer
has owned the material object of the commodity;
* The Company has transferred the major risks and compensation on the ownership of the commodity to
the customer i.e. the customer has received the major risks and compensation on the ownership of the
commodity;
* Customers have accepted the commodities.Sales return terms
For sales with sales return terms the Company recognizes the income based on the consideration amount
to which the Company is expected to be entitled for the commodity handed over to the customer when it obtains
the control of the relevant commodity and recognizes the estimated liability based on the amount to be returned
due to the expected sales return; meanwhile the balance of the book value of the commodity expected to be
returned less the expected cost to be incurred for collection of the returned commodity (including the impaired
value of the returned commodity) is recognized as an asset i.e. return cost receivable and according to the book
value of the transferred commodity at the time of transfer the net amount less the cost of the above asset is
carried over to the cost. At each balance sheet date the Company re-estimates the return of future sales and re-
measures the assets and liabilities described above.Quality assurance obligations
The Company provides quality assurance for the commodities sold and the projects constructed in
accordance with contractual agreements and the provisions of law. For warranty type quality assurance to assure
customers that the commodities sold meet the established standards the Company conducts accounting
treatment in accordance with Accounting Standards for Business Enterprises No. 13 - Contingencies. For
service type quality assurance that provides a separate service in addition to assuring customers that the
commodities sold meet the established standards the Company regards it as a single performance obligation
amortize a portion of the transaction price to the service type quality assurance in proportion to the individual
selling price for providing commodities and services quality assurance and recognizes the income when the
customer obtains the control of the service. In assessing whether the quality assurance provides a separate
service in addition to assuring the customer that the commodities sold meet established standards the Company
considers factors such as whether the quality assurance is a statutory requirement the warranty period and the
nature of the Company's commitment to perform the task.Principal responsible person and agent
Whether the Company is the principal responsible person or agent in a transaction is determined by
whether the Company has control of the commodities or services before they are transferred to the customer.Where the Company is able to control the commodities or services prior to the transfer of the commodities or
services to the customer the Company is the principle responsible person and recognizes the income based on
the total amount of consideration received or receivable. Otherwise the Company acts as the agent recognizes
the income on the basis of the amount of commission or service charges it is expected to be entitled to receive
which shall be the net amount of the total consideration received or receivable less the price payable to other
interested parties or be determined based on the amount or proportion of commissions established etc.Consideration payable to customers
Where there is a consideration payable to a customer in a contract unless the consideration is for the
purpose of obtaining other clearly distinguishable commodities or services for the customer the Company
writes off the consideration payable from the transaction price and writes off the current income at the time
when the relevant income is recognized or when the consideration is paid (or committed to be paid) to the
customer whichever is later.
(2) Specific method
In case the sales contract between the Company and customers has been deemed as a performance
obligation fulfilled at a certain time point the specific revenue recognition method shall be formulated
according to the actual situation of the Company's product sales as follows:
Domestic sales: * The customer picks up the goods in cash. After the payment and delivery it is
considered that the customer has obtained the control of the relevant goods and the Company has recognized
the sales revenue; * If the advance payment is used for settlement and the other party's customer confirmation
receipt is obtained after the delivery it is considered that the customer has obtained the control of the relevant
commodities and the Company has recognized the sales revenue; * If the credit sale is adopted according to a
certain payment period within which the customer settles and after the delivery the other party's customer
confirmation receipt is obtained it is considered that the customer has obtained the control of the relevant goods
and the Company has recognized the sales revenue.Foreign sales: the Company shall deliver commodities according to the signed order hold special export
invoice delivery note and other original documents for customs clearance and export pass customs audit
complete export declaration procedures obtain the customs declaration documents as the point of transfer of
control of the relevant goods and recognize the sales revenue by recording the revenue based on the delivery
order special export invoice and customs declaration form.Situations where similar businesses adopt different business models involving different revenue
recognition and measurement methods
38. Contract costs
Contractual costs are divided into contract performance costs and contract acquisition costs.The cost incurred by the Company for contract performance is deemed as a contract performance cost and
recognized as an asset if all of the following conditions are met:
* The cost is directly related to a current contract or a contract expected to be acquired including direct
labor cost direct material cost manufacturing (or similar) cost cost clearly stated to be borne by the customer
and other costs incurred only as a result of the contract;
* The cost increases the resources for fulfilling the performance obligation by the Company in the future;
* The cost is expected to be recoverable.When an incremental cost incurred by the Company for acquiring a contract is expected to be recoverable
it is treated as a contract acquisition cost and recognized as an asset.Assets related to contract costs are amortized on the same basis as the recognition of revenue of goods or
services related to that asset; However if the amortization period of contract acquisition costs does not exceed
one year the Company credits it to the current profit or loss when it occurs.If the book value of an asset related to the contract cost is higher than the difference between the following
two items the Company makes a provision for impairment for the excess recognizes it as an asset impairment
loss and further considers whether a provision shall be made for projected liabilities relating to the loss contract:
* Remaining consideration expected to be obtained as a result of the transfer of goods or services related
to the asset;
* Cost estimated to be incurred for the transfer of the relevant commodities or services.If the above-mentioned provision for asset impairment is subsequently reversed the book value of the asset
after the reversal shall not exceed the book value of the asset on the reversal date assuming no provision for
impairment was made.Contract performance costs recognized as assets with an amortization period of not more than one year or
one normal operating cycle as determined in the initial recognition are presented under the "Inventory" item
and those with an amortization period of more than one year or one normal operating cycle as determined in the
initial recognition are presented under the "Other non-current assets" item.Contract acquisition costs recognized as assets with an amortization period of not more than one year or
one normal operating cycle as determined in the initial recognition are presented under the "Other current
assets" item and those with an amortization period of more than one year or one normal operating cycle as
determined in the initial recognition are presented under the "Other non-current assets" item.
39. Government subsidies
(1) Recognition of government subsidies
A government subsidy can be recognized only when all of the following conditions are met:
* The Company is able to meet the conditions attached to the government subsidy;
* The Company is able to receive the government subsidy.
(2) Measurement of government subsidies
In case a government subsidy can be classified as a monetary asset it shall be measured according to the
amount received or receivable. In case a government subsidy can be classified as non-monetary asset it shall be
measured at fair value and once the fair value cannot be obtained reliably it shall be measured in the nominal
amount of RMB 1.
(3) Accounting treatment of government subsidies
* Assets-related government subsidies
Government subsidies that the Company obtains for acquisition or construction or otherwise for
developing long-term assets are classified as assets-related government subsidies. When an assets-related
government subsidy is recognized as a deferred income it shall be amortized with a rational and systematic
method and credited to an income or loss within the service life of the related asset. Government subsidies
measured in the nominal amount shall be directly credited to a current income/loss. In case relevant assets are
sold transferred scrapped or damaged prior to the end of their service life the balance of relevant deferred
income that has not been allocated shall be transferred to the profits and losses of the current period of asset
disposal.* Revenue-related government subsidies
Government subsidies other than those related to assets are classified as revenue-related government
subsidies. Revenue-related government subsidies shall be accounted for in accordance with the following
provisions on a case-by-case basis:
When a revenue-related government subsidy is used to compensate relevant expenses or losses of the
Company in the following period it shall be recognized as a deferred income and credited to a current
income/loss in the period when the related cost or loss is recognized;
When such a subsidy is used to offset relevant incurred costs and expenses or losses of the Company it
shall be directly credited to the current income/loss.For government subsidies including both assets-related and revenue-related subsidies they shall be divided
for separate accounting treatment; if it is difficult to separate them they shall be classified as revenue-related
government subsidies as a whole.Government subsidies associated with the routine activities of the Company shall be credited to Other
Income according to the substance of economic operations. Those that are not associated with the routine
activities of the Company shall be credited to Non-Operating Income/Expense.* Discounted interests of preferential policy loans
In case the Ministry of Finance directly appropriates the discount funds to the Company the Company will
write down the corresponding discount interests against relevant borrowing costs.* Refund of government subsidies
In case a recognized government subsidy needs to be refunded the book value of the asset concerned shall
be adjusted if the book value of the asset was written down when it was initially recognized; if there is a balance
for the relevant deferred income it shall be used to reduce the balanced book value of the deferred income and
any excess shall be credited to a current income/loss; for other cases it shall be directly credited to a current
income/loss.
40. Deferred tax assets/deferred tax liabilities
The Company generally applies the balance sheet liability method to recognize and measure the income
tax amount affected by the taxable temporary difference or deductible temporary difference as a deferred
income tax liability or deferred income tax asset based on the temporary difference between the book value of
assets and liabilities on the balance sheet date and the tax basis. The Company does not discount deferred
income tax assets and deferred income tax liabilities.
(1) Recognition of deferred income tax assets
For deductible losses and tax credits that are deductible for temporary differences and can be carried
forward to subsequent years the income tax amount so affected shall be calculated at the income tax rate of the
expected carry-back period and the amount of impact shall be recognized as a deferred income tax asset
provided that the Company is likely to obtain future taxable incomes to offset the deductible temporary
differences deductible losses and tax credits.In transactions or matters with the following characteristics the income tax amount affected by a
deductible temporary difference caused by the initial recognition of an asset or liability shall not be recognized
as a deferred income tax asset;
A. The transaction is not a business merger;
B. The occurrence of the transaction does not affect the accounting profit or the taxable income (or
deductible loss).However this exemption from the initial recognition of deferred income tax liabilities and deferred income
tax assets shall not apply to a single transaction in which both the above two conditions are met and the initial
recognition of assets and liabilities results in an equal amount of taxable temporary differences and deductible
temporary differences. For taxable temporary differences and deductible temporary differences arising from the
initial recognition of assets and liabilities of the transaction the Company recognizes the corresponding
deferred income tax liabilities and deferred income tax assets respectively when the transaction takes place.For deductible temporary differences related to investments of subsidiaries associated enterprises and joint
ventures the Company recognizes the amount of income tax impact as a deferred income tax asset (only) when
the following two conditions are both met:
A. The temporary difference is very likely to be reversed in the foreseeable future;
B. The taxable income used to offset the deductible temporary difference is likely to be available in the
future;
On the balance sheet date if there is conclusive evidence that enough taxable incomes are very likely to be
obtained in future periods to offset the deductible temporary differences the deferred income tax assets not
recognized in the previous period shall be recognized.The Company checks the book value of deferred income tax assets on the balance sheet date. In case it is
very unlikely to obtain enough taxable incomes to offset the benefits of the deferred tax assets in future periods
the book value of the deferred tax assets shall be written down. If it is very likely to obtain enough taxable
incomes the write-down amount shall be reversed.
(2) Recognition of deferred income tax liabilities
For all taxable temporary differences of the Company the amount of income tax impact is measured at the
income tax rate for the expected carry-back period and the amount of impact shall be recognized as a deferred
income tax liability except:
* Income tax impact caused by taxable temporary differences arising from the following transactions or
matters shall not be recognized as a deferred income tax liability:
A. The initial recognition of goodwill;
B. The initial recognition of assets or liabilities arising from a transaction that is not a business merger and
does not affect accounting profits taxable income or deductible losses at the time of the transaction.* Temporary differences in taxable income related to investments in subsidiaries joint ventures and
associated enterprises shall be usually recognized as deferred income tax liabilities except for those that meet
both of the following conditions concurrently:
A. The Company can control the reversal time of the temporary difference;
B. The temporary difference is very unlikely to be reversed in the foreseeable future;
(3) Recognition of deferred tax liabilities or assets related to specific transactions or matters
* Deferred tax liabilities or assets related to business mergers
For taxable temporary differences or deductible temporary differences arising from business mergers not
involving enterprises under common control the goodwill recognized in the business mergers are generally
adjusted for the relevant deferred income tax expenses while recognizing the deferred income tax liabilities or
assets.* Items directly credited to owner's equity
Income tax and deferred income tax of the current period related to transactions or matters that are directly
credited to the owner's equity shall be credited to the owner's equity. Transactions or matters with the income
tax impact of temporary differences credited to owners' equity include: other comprehensive income resulting
from changes in the fair value of other debt investments adjusted beginning retained income made with the
retrospective adjustment method for changes in accounting policies or corrected with the retrospective
restatement method to correct differences of (significant) accounting errors in previous period and owner's
equity credited at the time of initial recognition of mixed financial instruments containing both liability
components and equity components.* Recoverable losses and tax credits
A. Recoverable losses and tax credits arising from the Company's own operations
Deductible loss refers to the loss which is allowed to be offset by a taxable income of subsequent years
calculated and determined in accordance with the provisions of the tax law. Losses to offset (deductible losses)
and tax credits that can be carried forward to subsequent years according to the provisions of the tax law shall
be treated as deductible temporary differences. When sufficient taxable income is likely to be obtained during
future periods in which it is expected that a loss to offset or tax credit will be available the corresponding
deferred income tax asset shall be recognized to the extent of the taxable income likely to be obtained while the
income tax expense in the current income statement shall be reduced.B. Recoverable loss to offset of the merged enterprise arising from business merger
The Company obtains deductible temporary differences from the acquiree in business merger which shall
not be recognized if the conditions for recognition of deferred tax assets are not met by the acquisition date.Within 12 months after the acquisition date if new or further information is obtained indicating that the relevant
circumstances already existed by the acquisition date and the economic benefits brought about by the deductible
temporary difference is expected to be realized by the acquiree by the acquisition date the relevant deferred tax
assets shall be recognized and goodwill shall be reduced at the same time. If there is insufficient goodwill to
offset the difference shall be recognized as a current profit/loss; in addition to the above circumstances
deferred tax assets related to business merger shall be recognized and credited to the current profit/loss.* Temporary differences arising from offsets in consolidated statements
When preparing the consolidated financial statements the Company recognizes deferred income tax assets
or liabilities in the consolidated balance sheet and adjusts the income tax expense in the consolidated income
statement if there is a temporary difference between the carrying value of the assets or liabilities in the
consolidated balance sheet and the tax basis of the taxable entity concerned due to the offset of unrealized gains
and losses on internal sales except deferred income taxes related to transactions or matters directly credited to
owners' equity and related to business merger.* Equity-settled share-based payments
If the tax law allows pre-tax deductions for expenses related to share-based payments when recognizing
costs and expenses in accordance with the accounting standards the Company calculates and determines the tax
basis and the resulting temporary differences based on the pre-tax deductible amount estimated with the
information obtained at the end of the accounting period and recognizes the relevant deferred income tax if the
conditions for recognition are met. If the amount that is expected to be deductible before tax in future periods
exceeds the costs and expenses related to the share-based payments recognized in accordance with the
provisions of the accounting standards the income tax impact of the excess shall be directly credited to owners'
equity.* Dividends related to financial instruments classified as equity instruments
For financial instruments classified as equity instruments by the Company as the issuer where the relevant
dividend payout is deducted before corporate income tax in accordance with the relevant provisions of tax
policies the Company recognizes the income tax impact related to the dividend when recognizing the dividend
payable. The income tax impact of dividends shall be credited to the current profit/loss if the profit distributed is
derived from a transaction or matter previously generated profit or loss; the income tax impact of dividends
shall be credited to owners' equity if the profit distributed is derived from a transaction or matter previously
recognized in owners' equity.
(4) Basis for presentation of net balances of deferred income tax assets and liabilities
When all of the following conditions are met the Company presents net balances of deferred income tax
assets and liabilities after offsetting:
* The Company is entitled to settle current income tax assets and liabilities on a net basis;
* Deferred income tax assets and liabilities are related to the income tax levied by the same taxation
authority on the same taxpayer or to different taxpayers but during the period in which each future deferred
income tax asset and liability of significance is reversed the involved taxpayer intends to settle current income
tax assets and liabilities on a net basis or acquire assets and pay off debts at the same time.
41. Lease
(1) Accounting treatment of lease as the lessee
On the commencement date of the lease term the Company considers a lease with lease term no more than
12 months and which does not include a purchase option to be a short-term lease and a lease with a low value
when a single leased asset is a new asset as a low-value asset lease. Where the Company subleases or intends to
sublease a leased asset the original lease is not deemed to be a low-value asset lease.For all short-term leases and leases of low value assets the Company will include lease payments in the
relevant asset costs or current profits and losses using the straight-line method during each period of the lease
term.With the exception of the above short-term leases and low-value asset leases treated by simplified
treatment the Company recognizes the right-of-use assets and lease liabilities on the lease on the
commencement date of the lease term.* Right-of-use assets
A right-of-use asset refers to the lessee's right to use the leased asset during the lease term.On the commencement date of the lease term an initial measurement of right-of-use assets shall be carried
out according to the cost. The cost is composed of:
The initially measured amount of the lease liability;
Lease payment paid on or before the commencement date of the lease term minus relevant amount of the
enjoyed lease incentives (if any);
Initial direct expenses incurred by the leasee;
An estimate of costs to be incurred by the leasee in dismantling and removing the lease asset restoring the
site where the lease asset resides or restoring the lease asset to the condition required by the terms and
conditions of the lease. The Company recognizes and measures the costs according to the recognition criteria
and measurement method for estimated liabilities. Refer to Note V.17 for details. The aforementioned costs are
incurred for the production of inventory and will be credited to the cost of inventory.The straight-line depreciation method shall be applied for the depreciation classification and provision of
right-of-use assets. If it can be reasonably ascertained that the ownership of the leased asset will be acquired at
the end of the lease term the depreciation rate shall be determined according to the class of the right-of-use
asset and the estimated net salvage value rate during the expected remaining useful life of the leased asset;
otherwise the depreciation rate shall be determined on the basis of the class of the use-of-right asset during the
shorter of the lease term and the remaining useful life of the leased asset.* Lease liabilities
The initial measurement of lease liabilities shall be based on the present value of the lease payment
payable on the commencement date of the lease term. The amount of lease payments shall consist of the
following five components:
1. Fixed payment amount and substantial fixed payment amount and if there are lease incentives minus
the amount related to lease incentives;
2. Variable lease payment amount depending on the index or rate;
3. Exercise price of the purchase option provided that the lessee reasonably determines to exercise the
option;
4. Amount payable to exercise the option to terminate the lease provided that it is reflected in the lease
term that the lessee will exercise the option to terminate the lease;
5. Amount expected to be paid based on the remaining value of the security provided by the lessee.
When computing the present value of a lease payment the implicit interest rate of the lease shall be used as
the discount rate; when such implicit interest rate cannot be determined the incremental borrowing rate of the
Company shall be used as the discount rate. The difference between the lease payment amount and its present
value shall be recognized as an unrecognized financing expense and the interest expense shall be recognized at
the discount rate of the present value of the lease payment amount during each period of the lease term and
credited to the current profit/loss. Variable lease payments not included in the measurement of lease liabilities
shall be credited to the current profit/loss at the actual time of incurring.After the commencement of the lease term when there is a change in the substantial fixed payment amount
a change in the estimated amount payable on the security balance a change in the index or ratio used to
determine the lease payment amount a change in the evaluation result of the purchase option the renewal
option or the termination option or a change in the actual exercise of the option the Company will remeasure
the lease liability at the present value of the changed lease payment amount and adjust the book value of the
right-of-use assets accordingly.
(2) Accounting treatment of lease as the lessor
On the commencement date of the lease the Company classifies leases that substantially transfer virtually
all of the risks and compensations associated with ownership of the leased assets as finance leases and all other
leases as operating leases.* Operating lease
The Company recognizes lease receipts as rental income on a straight-line basis during each period of the
lease term capitalize and apportion the initial direct expenses incurred on the same basis as rental income
recognition and credit the direct expenses to the current profit/loss in installments. The Company credits to the
current profit/loss the amount of variable lease payments acquired in relation to operating leases that are not
included in lease receipts when actually incurred.* Finance lease
On the commencement date of the lease the Company recognizes finance lease receivables on the basis of
net lease investment (the sum of the unsecured balance value and the present value of the lease proceeds not yet
received by the commencement date of the lease term discounted at the implicit interest rate of the lease) and
terminates the recognition of the finance lease assets. In each period of the lease term the Company calculates
and recognizes the interest income at the implicit interest rate of the lease.Variable lease payments acquired by the Company and not included in the measurement of the net lease
investment shall be credited to the current profit/loss at the actual time of incurring.
42. Other important accounting policies and accounting estimation
Share repurchase
(1) Where the Company has reported and has been approved to purchase the Company's shares for capital
reduction in accordance with legal procedures the share capital shall be reduced by the total par value of the
shares cancelled the owners' equity shall be adjusted in case of a difference between the price paid for the
repurchase of the shares (including transaction fees) and the par value of the shares; the portion in excess of the
total par value shall write down the capital reserve (share capital premium) surplus reserve and undistributed
profits in turn and the portion less than the total par value shall be added to the capital reserve (equity
premium).
(2) The shares repurchased by the Company shall be managed as treasury shares before cancellation or
transfer and all expenses for share repurchase shall be converted into treasury share costs.
(3) In case of a transfer of treasury shares the portion of the transfer income higher than the cost of
treasury share is added to the capital reserve (equity premium); the portion lower than the cost of Treasury
shares shall write down the capital reserve (equity premium) surplus reserve and undistributed profit in turn.Restricted shares
In the equity incentive plan the Company grants restricted shares to the incentivized subjects who shall
subscribe for the shares first and if the unlocking conditions stipulated in the equity incentive plan are not met
later the Company will repurchase the shares at the price agreed in advance. Where the restricted shares issued
to the employees have gone through the registration and other capital increase procedures in accordance with
relevant regulations the Company shall on the grant date recognize the share capital and capital reserve
(capital premium) based on the subscription payment received from the employees and also recognize the
treasury shares and other payables for the repurchase obligations.
43. Important accounting policy and accounting estimation changes
(1) Important accounting policy changes
□ Applicable□ Not applicable
(2) Important accounting estimation changes
□ Applicable□ Not applicable
(3) Starting from 2026 the first implementation of the new accounting standards will adjust the financial statements
related to the items at the beginning of the year
□ Applicable□ Not applicable
44. Others
VI. Tax
1. Main tax types and tax rate
Tax type Tax basis Tax rate
Revenue from sales
VAT (value-added tax) 13.00% 9.00% 6.00% 3.00% 0% (Note 1)
of goods
City maintenance and construction Paid turnover tax
7.00% 5.00%
tax amount
See the table below (Note 2) for taxpayers subject to different
Corporate income tax Taxable income
corporate income tax rates and their tax rates.Paid turnover tax
Education surcharge 3.00% 2.00%
amount
(Note 1) Shenzhen YAKO Automation Technology Co. Ltd. was recognized as a software enterprise by
Shenzhen Economic Trade and Information Commission on April 27 2013 and received the software enterprise
certification No. Shen R-2010-0237; Shenzhen Topband Software Technology Co. Ltd. was recognized as a
software enterprise by Shenzhen Economic Trade and Information Commission on Friday June 28 2013 and
received the software enterprise certification No. Shen R-2013-0616; Shenzhen Yansheng Software Co. Ltd. was
recognized as a software enterprise by Shenzhen Software Industry Association on August 31 2017 and received
the software enterprise certification No. Shen RQ-2017-0587; Shenzhen Allied Control System Co. Ltd. was
recognized as a software enterprise by Shenzhen Economic Trade and Information Commission on June 28 2013
and received the software enterprise certification No. Shen R-2013-0775. According to the Notice of the Ministry
of Finance and the State Taxation Administration on VAT Policies for Software Products (No. 25 in 2023) after
the sales revenue of the above products is levied for value-added tax at the statutory tax rate of 13.00% during the
Reporting Period the refund-upon-collection policy shall be applied to the portion of the actual VAT burden in
excess of 3.00%.According to the Notice of the Ministry of Finance and the State Taxation Administration on VAT Policies
for Software Products (CS [2011] No. 100) the refund-upon-collection policy shall be applied to the part of the
actual VAT burden of software products in excess of 3.00%. The provisions of this policy apply to Shenzhen
Meanstone Intelligent Technology Co. Ltd. a subsidiary of the Company.(Note 2) Taxpayers of the Company subject to different corporate income tax rates and their tax rates are as
follows
Name of taxpayer Corporate income tax rate
Shenzhen Topband Co. Ltd. 15.00%
Shenzhen Topband Software Technology Co. Ltd. 15.00%
Shenzhen Topband Automation Technology Co. Ltd. 15.00%
Shenzhen Topband Battery Co. Ltd. 15.00%
Huizhou Topband Lithium Battery Co. Ltd. 20.00%
Taixing Topband Lithium Battery Co. Ltd. 15.00%
Nantong Topband Lithium Battery Co. Ltd. 25.00%
Yolaness Technology (HK) Co. Limited 16.50%
Chongqing Topband Industrial Co. Ltd. 25.00%
Topband (Hong Kong) Co. Ltd. 8.25% 16.50%
Topband Germany GmbH 15.825%
TOPBAND SMART DONG NAI (VIETNAM) COMPANY LIMITED 20.00%
TOPBAND JAPAN Co. Ltd. 23.20%
Q.B.PTE.LTD 17.00%
TOPBAND SMART EUROPE COMPANY LIMITED S.R.L. 16.00%
TOPBAND MEXICO S.DER.L.DEC.V. 30.00%
Huizhou Topband Electrical Technology Co. Ltd. 15.00%
TOPBAND INDIA PRIVATE LIMITED 25.17%
Shenzhen YAKO Automation Technology Co. Ltd. 15.00%
Shenzhen Yansheng Software Co. Ltd. 15.00%
Hangzhou Zhidong Motor Technology Co. Ltd. 20.00%
Huizhou YAKO Automation Technology Co. Ltd. 25.00%
Shenzhen Allied Control System Co. Ltd. 25.00%
Ningbo Topband Intelligent Control Co. Ltd. 25.00%
Shenzhen Meanstone Intelligent Technology Co. Ltd. 20.00%
Shenzhen Topband Supply Chain Services Co. Ltd. 25.00%
Shenzhen Topband Investment Co. Ltd. 25.00%
Shenzhen Tunnu Innovation Co. Ltd. 20.00%
Tunnu Innovation (Hong Kong) Limited 16.50%
TUNNU INNOVATION INC 21.00%
Shenzhen Zhongli Consulting Co. Ltd. 20.00%
Shenzhen Yueshang Robot Co. Ltd. 20.00%
Shenzhen Topband Digital Energy Co. Ltd. 20.00%
Topband Digital Energy Technology (Huizhou) Co. Ltd. 20.00%
Chongqing Topband Yishu Energy Technology Co. Ltd. 20.00%
Guangzhou Topband Digital Energy Co. Ltd. 20.00%
Shenzhen Senxuan Technology Co. Ltd. 20.00%
Shenzhen Tengyi Industrial Co. Ltd. 20.00%
Topband (Qingdao) Intelligent Control Co. Ltd. 20.00%
Shenzhen Topband Automotive Electronics Co. Ltd. 20.00%
Shenzhen Jingfei Investment Co. Ltd. 20.00%
Huizhou Jiuwan Lvyuan Agriculture Co. Ltd. 20.00%
Shenzhen Topband Motor Co. Ltd. 15.00%
Huizhou Topband Supply Chain Service Co. Ltd. 20.00%
2. Tax preference
(1) On November 15 2023 the Company received the Hi-tech Enterprise Certificate (No.
GR202344206777) issued by Shenzhen Science and Technology Innovation Commission Finance Bureau of
Shenzhen Municipality and Shenzhen Tax Service State Taxation Administration which is valid for three years.According to the relevant provisions of the Enterprise Income Tax Law of the People's Republic of China the
Rules for the Implementation of the Enterprise Income Tax Law and the Measures for the Administration of the
Recognition of High and New Technology Enterprises the corporate income tax rate applicable to the Company
for the years 2023 to 2025 is 15.00%.
(2) On December 25 2025 Shenzhen Topband Software Technology Co. Ltd. received the Hi-tech
Enterprise Certificate (No. GR202544200053) issued by the Industry and Information Technology Bureau of
Shenzhen Municipality Finance Bureau of Shenzhen Municipality and Shenzhen Tax Service State Taxation
Administration which is valid for three years. According to the relevant provisions of the Enterprise Income
Tax Law of the People's Republic of China the Rules for the Implementation of the Enterprise Income Tax Law
and the Measures for the Administration of the Recognition of High and New Technology Enterprises the
corporate income tax rate applicable for the years 2025 to 2027 is 15.00%.
(3) On December 26 2024 Shenzhen Topband Battery Co. Ltd. received the Hi-tech Enterprise
Certificate (No. GR202444206593) issued by the Industry and Information Technology Bureau of Shenzhen
Municipality Finance Bureau of Shenzhen Municipality and Shenzhen Tax Service State Taxation
Administration which is valid for three years. According to the relevant provisions of the Enterprise Income
Tax Law of the People's Republic of China the Rules for the Implementation of the Enterprise Income Tax Law
and the Measures for the Administration of the Recognition of High and New Technology Enterprises the
corporate income tax rate applicable for the years 2024 to 2026 is 15.00%.
(4) On December 11 2024 Huizhou Topband Electrical Technology Co. Ltd. received the Certificate for
High-tech Enterprise (No. GR202444009232) issued by the Department of Science and Technology of
Guangdong Province the Department of Finance of Guangdong Province and Guangdong Provincial Tax
Service under the State Taxation Administration which is valid for three years. According to the relevant
provisions of the Enterprise Income Tax Law of the People's Republic of China the Rules for the
Implementation of the Enterprise Income Tax Law and the Measures for the Administration of the Recognition
of High and New Technology Enterprises the corporate income tax rate applicable for the years 2024 to 2026 is
15.00%.
(5) On December 26 2024 Shenzhen YAKO Automation Technology Co. Ltd. received the Hi-tech
Enterprise Certificate (No. GR202444202027) issued by the Industry and Information Technology Bureau of
Shenzhen Municipality Finance Bureau of Shenzhen Municipality and Shenzhen Tax Service State Taxation
Administration which is valid for three years. According to the relevant provisions of the Enterprise Income
Tax Law of the People's Republic of China the Rules for the Implementation of the Enterprise Income Tax Law
and the Measures for the Administration of the Recognition of High and New Technology Enterprises the
corporate income tax rate applicable for the years 2024 to 2026 is 15.00%.
(6) On December 26 2024 Shenzhen Yansheng Software Co. Ltd. received the Hi-tech Enterprise
Certificate (No. GR202444205050) issued by the Industry and Information Technology Bureau of Shenzhen
Municipality Finance Bureau of Shenzhen Municipality and Shenzhen Tax Service State Taxation
Administration which is valid for three years. According to the relevant provisions of the Enterprise Income
Tax Law of the People's Republic of China the Rules for the Implementation of the Enterprise Income Tax Law
and the Measures for the Administration of the Recognition of High and New Technology Enterprises the
corporate income tax rate applicable for the years 2024 to 2026 is 15.00%.
(7) On November 19 2024 Taixing Topband Lithium Battery Co. Ltd. received the Certificate for High-
tech Enterprise (No. GR202432004814) issued by the Jiangsu Provincial Department of Science and
Technology the Department of Finance of Jiangsu Province and Jiangsu Provincial Tax Service under State
Taxation Administration which is valid for three years. According to the relevant provisions of the Enterprise
Income Tax Law of the People's Republic of China the Rules for the Implementation of the Enterprise Income
Tax Law and the Measures for the Administration of the Recognition of High and New Technology Enterprises
the corporate income tax rate applicable for the years 2024 to 2026 is 15.00%.
(8) On November 15 2023 Shenzhen Topband Automation Technology Co. Ltd. received the Hi-tech
Enterprise Certificate (No. GR202344204958) issued by Shenzhen Science and Technology Innovation
Commission Finance Bureau of Shenzhen Municipality and Shenzhen Tax Service State Taxation
Administration which is valid for three years. According to the relevant provisions of the Enterprise Income
Tax Law of the People's Republic of China the Rules for the Implementation of the Enterprise Income Tax Law
and the Measures for the Administration of the Recognition of High and New Technology Enterprises the
corporate income tax rate applicable for the years 2023 to 2025 is 15.00%.
(9) On December 26 2024 Shenzhen Topband Motor Co. Ltd. received the Hi-tech Enterprise Certificate
(No. GR202444207996) issued by the Industry and Information Technology Bureau of Shenzhen Municipality
Finance Bureau of Shenzhen Municipality and Shenzhen Tax Service State Taxation Administration which is
valid for three years. According to the relevant provisions of the Enterprise Income Tax Law of the People's
Republic of China the Rules for the Implementation of the Enterprise Income Tax Law and the Measures for
the Administration of the Recognition of High and New Technology Enterprises the corporate income tax rate
applicable for the years 2024 to 2026 is 15.00%.
(10) Topband (Hong Kong) Co. Ltd. Yolaness Technology (HK) Co. Limited and Tunnu Innovation
(Hong Kong) Limited which are subsidiaries of the Company established in Hong Kong Special Administrative
Region of China are applicable to the profits tax rate of 16.50%. Meanwhile due to the implementation of the
"two-tier profits tax" policy in Hong Kong for the portion of annual profits not exceeding HKD 2 million
Topband (Hong Kong) Co. Ltd. is applicable to the profits tax rate of 8.25% and for the excess port the tax
rate is 16.50%.
(11) According to the provisions of the Announcement on Tax and Fee Policies for Further Supporting the
Development of Small and Micro Enterprises and Individual Businesses issued by the Ministry of Finance and
the State Taxation Administration (Announcement 2023 No. 12 by the Ministry of Finance and the State
Taxation Administration) small low-profit enterprises shall calculate their taxable income at a reduced rate of
25.00% and pay the corporate income tax at a rate of 20.00% and this policy is extended till December 31
2027. The provisions of this policy are applicable the subsidiaries and sub-subsidiaries of the Company
including Huizhou Topband Lithium Battery Co. Ltd. Shenzhen Meanstone Intelligent Technology Co. Ltd.Hangzhou Zhidong Motor Technology Co. Ltd. Shenzhen Topband Digital Energy Co. Ltd. Topband Digital
Energy Technology (Huizhou) Co. Ltd. Chongqing Topband Yishu Energy Technology Co. Ltd. Guangzhou
Topband Digital Energy Co. Ltd. Shenzhen Tunnu Innovation Co. Ltd. Shenzhen Zhongli Consulting Co.Ltd. Shenzhen Senxuan Technology Co. Ltd. Shenzhen Tengyi Industrial Co. Ltd. Topband (Qingdao)
Intelligent Control Co. Ltd. Shenzhen Topband Automobile Electronics Co. Ltd. Shenzhen Yueshang Robot
Co. Ltd. Shenzhen Jingfei Investment Co. Ltd. Huizhou Topband Supply Chain Service Co. Ltd. and
Huizhou Jiuwan Lvyuan Agriculture Co. Ltd.
3. Others
None.VII. Notes to items of consolidated financial statements
1. Monetary capital
Unit: RMB
Items Ending balance Beginning balance
Cash on hand 686342.63 628866.15
Bank deposit 1417510745.34 1718017705.12
Other monetary capital 53152506.50 78801213.17
Total 1471349594.47 1797447784.44
Including: total amount deposited
329678820.72 385403268.00
abroad
Other descriptions:
(1) At the end of the period the amount of pledges blocked funds and other restricted funds was RMB
20668681.10. Refer to VII. 31 of the Report for details.
(2) At the end of the period there is no amount deposited overseas or with the repatriation restricted.
2. Trading financial assets
Unit: RMB
Items Ending balance Beginning balance
Financial assets measured at fair value and whose
961585268.02 538102481.43
changes are recorded in current profit or loss
Including:
Including: wealth management products 645535520.12 212671537.17
Equity instrument investment 314689344.26 325430944.26
Foreign exchange derivatives 1360403.64
Total 961585268.02 538102481.43
3. Derivative financial assets
None.
4. Notes receivable
(1) List of classification of notes receivable
Unit: RMB
Items Ending balance Beginning balance
Bank acceptance instruments 32926424.36 24439539.50
Commercial acceptance bill 0.00 0.00
Total 32926424.36 24439539.50
(2) Disclosure by bad debt provision method
Unit: RMB
Ending balance Beginning balance
Provision Provision
Book balance for bad Book balance for bad
debts debts
Pro Pro
Category port Book value portA A Book value
ion ion
Proportio m Proporti m
Amount of Amount of
n ou on ou
pro pro
nt nt
visi visi
on on
Notes receivable
with provision
32926424.36 100.00% 32926424.36 24439539.50 100.00% 24439539.50
for bad debts by
portfolio
Including:
Bank acceptance
32926424.36 100.00% 32926424.36 24439539.50 100.00% 24439539.50
bill
Total 32926424.36 100.00% 32926424.36 24439539.50 100.00% 24439539.50
Provision for bad debts by portfolio: 0
Unit: RMB
Ending balance
Name
Book balance Provision for bad debts Proportion of provision
Bank acceptance bill 32926424.36 0.00 0.00%
Total 32926424.36 0.00
If the provision for bad debts of notes receivable is made according to the general model of expected credit
losses:
□ Applicable□ Not applicable
(3) Bad debt provision withdrawn recovered or reversed in the current period
Provision for bad debts in the current period:
□ Applicable□ Not applicable
(4) Notes receivable pledged by the Company at the end of the period
□ Applicable□ Not applicable
(5) Notes receivable endorsed or discounted by the Company at the end of the period and not due yet on
balance sheet date
Unit: RMB
Amount derecognized at the end of the Amount not derecognized at the end of
Items
period the period
Bank acceptance instruments 26251836.65
Commercial acceptance bill 0.00
Total 26251836.65
(6) Notes receivable actually written off in the current period
□ Applicable□ Not applicable
5. Accounts receivable
(1) Disclosure by aging
Unit: RMB
Aging Ending book balance Beginning book balance
Within 1 year (inclusive) 3455181408.52 3084959058.61
1-2 years 14521020.37 26130621.97
2-3 years 17228519.89 21763517.08
Above 3 years 81629898.21 83974813.39
3-4 years 1290238.26 16052614.85
4-5 Years 15165265.30 29697047.94
Above 5 years 65174394.65 38225150.60
Total 3568560846.99 3216828011.05
(2) Disclosure by bad debt provision method
Unit: RMB
Ending balance Beginning balance
Book balance Provision for bad debts Book balance Provision for bad debts
Category Proportion
Proporti Book value Proportio Proportion Book value
Amount Amount of Amount Amount
on n of provision
provision
Accounts
receivable
with single 100688326.57 2.82% 92618875.53 91.99% 8069451.04 100579403.12 3.13% 92484952.08 91.95% 8094451.04
provision for
bad debts
Including:
Single
100688326.57 2.82% 92618875.53 91.99% 8069451.04 100579403.12 3.13% 92484952.08 91.95% 8094451.04
provision
Accounts
receivable
with provision 3467872520.42 97.18% 108647547.58 3.13% 3359224972.84 3116248607.93 96.87% 99673682.96 3.20% 3016574924.97
for bad debts
by portfolio
Including:
Aging
3467872520.42 97.18% 108647547.58 3.13% 3359224972.84 3116248607.93 96.87% 99673682.96 3.20% 3016574924.97
portfolio
Total 3568560846.99 100.00% 201266423.11 5.64% 3367294423.88 3216828011.05 100.00% 192158635.04 5.97% 3024669376.01
Description of bad-debt provision on single basis: Provision by individual items
Unit: RMB
Beginning balance Ending balance
Name Proportion of Reasons for
Book balance Provision for bad debts Book balance Provision for bad debts
provision provision
It is difficult to
Single provision for bad debts 100579403.12 92484952.08 100688326.57 92618875.53 91.99%
recover
Total 100579403.12 92484952.08 100688326.57 92618875.53
Description of bad-debt provision on combined basis: Provision for impairment of combined by aging
Unit: RMB
Ending balance
Name
Book balance Provision for bad debts Proportion of provision
Provision for bad debts by aging portfolio 3467872520.42 108647547.58 3.13%
Total 3467872520.42 108647547.58
Provision for bad debts of accounts receivable based on the general model of expected credit losses:
□ Applicable□ Not applicable
(3) Bad debt provision withdrawn recovered or reversed in the current period
Unit: RMB
Amount changed in the current period
Beginning
Category
balance Recover or
Ending balance
Provision Write-off Others
reversal
Single provision for bad
92484952.08 3187825.53 2987298.06 -66604.02 92618875.53
debts
Provision for bad debts
99673682.96 10155747.76 633465.69 -548417.45 108647547.58
by portfolio
Total 192158635.04 13343573.29 3620763.75 -615021.47 201266423.11
(4) Accounts receivable actually written off in the current period
Unit: RMB
Items Amount of write-off
Accounts receivable actually written off 3620763.75
(5) Accounts receivable and contract assets of top five ending balances grouped by debtors
Unit: RMB
Ending balance of
bad debt provision
Ending balance of Proportion to total
for accounts
Ending balance of Ending balance of accounts ending balances of
Name of unit receivable and
accounts receivable contract assets receivables and accounts receivable
provision for
contract assets and contract assets
impairment of
contract assets
No. 1 610711719.59 0.00 610711719.59 17.11% 17515108.33
No. 2 213087507.00 0.00 213087507.00 5.97% 6615128.61
No. 3 161634942.69 0.00 161634942.69 4.53% 5084435.94
No. 4 125350829.11 0.00 125350829.11 3.51% 3882360.92
No. 5 120722402.91 0.00 120722402.91 3.38% 3750502.80
Total 1231507401.30 0.00 1231507401.30 34.50% 36847536.60
6. Contract assets
(1) Contract assets
Unit: RMB
Ending balance Beginning balance
Items Book Provision for Provision for
Book value Book balance Book value
balance bad debts bad debts
Unexpired quality
620005.22 23929.59 596075.63 621271.22 19669.27 601601.95
warranty deposit
Total 620005.22 23929.59 596075.63 621271.22 19669.27 601601.95
(2) Amounts of and reasons for significant changes in book value during the Reporting Period
□ Applicable□ Not applicable
(3) Disclosure by bad debt provision method
Unit: RMB
Ending balance Beginning balance
Book balance Provision for bad debts Book balance Provision for bad debts
Category Proportion Book Proportion Book
Amount Proportion Amount of value Amount Proportion Amount of value
provision provision
Provision
for bad
620005.22 100.00% 23929.59 3.86% 596075.63 621271.22 100.00% 19669.27 3.17% 601601.95
debts by
portfolio
Including:
Aging
620005.22 100.00% 23929.59 3.86% 596075.63 621271.22 100.00% 19669.27 3.17% 601601.95
portfolio
Total 620005.22 100.00% 23929.59 3.86% 596075.63 621271.22 100.00% 19669.27 3.17% 601601.95
Description of bad-debt provision on combined basis: aging portfolio
Unit: RMB
Ending balance
Name
Book balance Provision for bad debts Proportion of provision
Aging portfolio 620005.22 23929.59 3.86%
Total 620005.22 23929.59
(4) Provision for bad debts accrued recovered or reversed in current period
Unit: RMB
Accrual in the current Recovered or reversed Reversed or written off
Items Reason
period in the current period in the current period
Provision for Provision by aging
4260.32
impairment by portfolio portfolio
Total 4260.32
(5) Contract assets actually written off in the current period
None.7. Receivables financing
(1) Classification of accounts receivable financing
Unit: RMB
Items Ending balance Beginning balance
Notes receivable 117041006.67 103448072.55
Supply chain notes receivable 27727932.31 35013565.98
Total 144768938.98 138461638.53
(2) Disclosure by bad debt provision method
Unit: RMB
Ending balance Beginning balance
Book balance Provision for bad debts Book balance Provision for bad debts
Category ProportiProportio
Proportio Book value on of Book value
Amount Amount n of Amount Proportion Amount
n provisio
provision
n
Provision for bad
145656003.89 100.00% 887064.91 0.61% 144768938.98 139580105.30 100.00% 1118466.77 0.80% 138461638.53
debts by portfolio
Including:
Bank acceptance bill 117041006.67 80.35% 117041006.67 103448072.55 74.10% 103448072.55
Aging portfolio 28614997.22 19.65% 887064.91 3.10% 27727932.31 36132032.75 25.90% 1118466.77 3.10% 35013565.98
Total 145656003.89 100.00% 887064.91 0.61% 144768938.98 139580105.30 100.00% 1118466.77 0.80% 138461638.53
Description of bad-debt provision on combined basis: Bank acceptance bill
Unit: RMB
Ending balance
Name
Book balance Provision for bad debts Proportion of provision
Bank acceptance bill 117041006.67
Total 117041006.67
Description of bad-debt provision on combined basis: aging portfolio
Unit: RMB
Ending balance
Name
Book balance Provision for bad debts Proportion of provision
Aging portfolio 28614997.22 887064.91 3.10%
Total 28614997.22 887064.91
Provision for bad debts based on the general model of expected credit losses
Unit: RMB
First stage Second stage Third stage
Expected credit loss for
Provision for bad debts Expected credit Expected credit loss for the entire duration Total
loss in the next 12 the entire duration (no
(credit impairment
months credit impairment)
occurred)
Balance as of January 1 2025 1118466.77 1118466.77
Balance as of January 1 2025 in
the current period
Accrual in the current period -231401.86 -231401.86
Balance as of June 30 2025 887064.91 887064.91
Explanation of significant changes in the financing book balance of accounts receivable with changes in loss
provisions in the current period: none.
(3) Provision for bad debts accrued recovered or reversed in current period
Unit: RMB
Amount changed in the current period
Beginning
Category Recover or Reversal or Ending balancebalance Provision Other changes
reversal write-off
Provision for
1118466.77 -231401.86 887064.91
impairment
Total 1118466.77 -231401.86 887064.91
(4) Financing of accounts receivable pledged by the Company at the end of period
□ Applicable□ Not applicable
(5) Receivables financing endorsed or discounted by the Company at the end of the period and not due on
balance sheet date
□ Applicable□ Not applicable
(6) Financing of accounts receivable actually written off in the current period
□ Applicable□ Not applicable
(7) Changes in increase/decrease in receivables financing in the current period and changes in fair value
□ Applicable□ Not applicable
8. Other receivables
Unit: RMB
Items Ending balance Beginning balance
Other receivables 36167841.64 48377219.07
Total 36167841.64 48377219.07
(1) Interest receivable
□ Applicable□ Not applicable
(2) Dividends receivable
□ Applicable□ Not applicable
(3) Other receivables
1) Classification of other receivables by nature of amount
Unit: RMB
Nature of payment Ending book balance Beginning book balance
Margin deposit 19165958.72 31295706.37
Employee personal loan 3499853.27 3342707.48
Export tax rebate receivable 11658063.90 16056653.34
Equipment payments receivable 8000000.00 8000000.00
Others 3380489.02 1347816.20
Total 45704364.91 60042883.39
2) Disclosure by aging
Unit: RMB
Aging Ending book balance Beginning book balance
Within 1 year (inclusive) 32530967.16 41956976.30
1-2 years 1715945.51 3938752.59
2-3 years 2213328.17 1731797.31
Above 3 years 9244124.07 12415357.19
3-4 years 1372943.13 2481334.82
4-5 Years 2121138.49 4987314.70
Above 5 years 5750042.45 4946707.67
Total 45704364.91 60042883.39
3) Disclosure by bad debt provision method
□ Applicable □ Not applicable
Unit: RMB
Ending balance Beginning balance
Category Book balance Provision for bad debts Book balance Provision for bad debts
Proportion of Book value Proportion of Book value
Amount Proportion Amount Amount Proportion Amount
provision provision
Provision for
bad debts by 45704364.91 100.00% 9536523.27 20.87% 36167841.64 60042883.39 100.00% 11665664.32 19.43% 48377219.07
portfolio
Including:
Export rebate 11658063.90 25.51% 11658063.90 16056653.34 26.74% 16056653.34
Aging
34046301.01 74.49% 9536523.27 28.01% 24509777.74 43986230.05 73.26% 11665664.32 26.52% 32320565.73
portfolio
Total 45704364.91 100.00% 9536523.27 20.87% 36167841.64 60042883.39 100.00% 11665664.32 19.43% 48377219.07
Description of bad-debt provision on combined basis: Export rebate
Unit: RMB
Ending balance
Name
Book balance Provision for bad debts Proportion of provision
Export rebate 11658063.90 0.00 0.00%
Total 11658063.90 0.00
Description of bad-debt provision on combined basis: aging portfolio
Unit: RMB
Ending balance
Name
Book balance Provision for bad debts Proportion of provision
Aging portfolio 34046301.01 9536523.27 28.01%
Total 34046301.01 9536523.27
Provision for bad debts based on the general model of expected credit losses:
Unit: RMB
First stage Second stage Third stage
Expected credit loss for
Provision for bad debts Expected credit loss forExpected credit loss in the entire duration Total
the entire duration (no
the next 12 months (credit impairment
credit impairment)
occurred)
Balance as of January 1 2026 6718956.65 4946707.60 11665664.25
Balance as of January 1 2026 in
the current period
Accrual in the current period -2844694.93 803334.80 -2041360.13
Other changes -87780.85 -87780.85
Balance as of June 30 2026 3786480.87 5750042.40 9536523.27
Changes in book balance with significant changes in loss reserves in the current period
□ Applicable□ Not applicable
4) Bad debt provision withdrawn recovered or reversed in the current period
Provision for bad debts in the current period:
Unit: RMB
Amount changed in the current period
Beginning
Category Recover or Reversal or Ending balancebalance Provision Others
reversal write-off
Provision for
11665664.25 -2041360.13 -87780.85 9536523.27
bad debts
Total 11665664.25 -2041360.13 -87780.85 9536523.27
5) Other receivables actually written off in the current period
□ Applicable□ Not applicable
6) Other receivables of top five ending balances grouped by debtors
Unit: RMB
Proportion to
Ending
total ending
Nature of balance of
Name of unit Ending balance Aging balances of
payment provision for
other
bad debts
receivables
Export tax
Export tax rebate receivable 11658063.90 Within 1 year 25.51%
refund
Equipment
Taixing Zhisheng Solid Energy New
payments 8000000.00 Within 1 year 17.50% 400000.00
Energy Technology Co. Ltd.receivable
House
CIVBANCOS.A. leasing 3422299.21 4-5 years 7.49% 2737839.37
deposit
Lin Rongsheng Margin 1520178.00 Above 5 years 3.33% 1520178.00
House
Huizhou Shengwei Industrial Park 2-3 years above 5
leasing 1470294.32 3.22% 910697.80
Operation and Management Co. Ltd. years
deposit
Total 26070835.43 57.04% 5568715.17
7) Included in other receivables due to centralized management of funds
□ Applicable□ Not applicable
9. Prepayments
(1) List of advance payments by aging
Unit: RMB
Ending balance Beginning balance
Aging
Amount Proportion Amount Proportion
Within 1 year 86065702.23 98.16% 79242117.64 96.66%
1-2 years 1497125.79 1.71% 2703956.97 3.30%
2-3 years 16388.38 0.02% 26386.33 0.03%
Above 3 years 99989.30 0.11% 10264.06 0.01%
Total 87679205.70 81982725.00
Explanation of the cause for untimely settlement of advance payments aging more than one year with important
amounts: none.
(2) Accounts prepaid of the top five prepaying entities for ending balance
The total amount of prepayments of the top five prepayment objects based on their ending balances amounted
to RMB 49081808.85 accounting for 55.98% of the balance of prepayments.
10. Inventories
Whether the Company is required to comply with the disclosure requirements of the real estate industry
No
(1) Inventory classification
Unit: RMB
Ending balance Beginning balance
Provision for Provision for
decline in decline in
value of value of
Items inventories or inventories or
Book balance provision for Book value Book balance provision for Book value
impairment of impairment of
contract contract
performance performance
cost cost
Raw materials 1947836976.02 105427945.02 1842409031.00 1159857284.94 106326473.99 1053530810.95
Goods in
290805795.14 290805795.14 168094218.62 168094218.62
process
Goods on
752534016.40 29664244.47 722869771.93 684094736.79 29637310.14 654457426.65
hand
Goods
shipped in 189705032.75 5016923.67 184688109.08 250210087.68 6976203.69 243233883.99
transit
Self-
manufactured
80708864.57 4155031.42 76553833.15 62274625.95 5204671.12 57069954.83
semi-finished
product
Materials
entrusted for 18682856.23 622711.72 18060144.51 12392646.87 413054.96 11979591.91
processing
Low-value
373770.49 373770.49 7380979.65 7380979.65
consumables
Total 3280647311.60 144886856.30 3135760455.30 2344304580.50 148557713.90 2195746866.60
(2) Data resources recognized as inventories
□ Applicable□ Not applicable
(3) Provision for decline in value of inventories and provision for impairment of contract performance
cost
Unit: RMB
Decrease amount in the current
Increase in the current period
period
Items Beginning balance Ending balance
Reversal or write-
Provision Others Others
off
Raw materials 106326473.99 21432383.11 21770971.87 559940.21 105427945.02
Goods on hand 29637310.14 7049245.06 6970047.76 52262.97 29664244.47
Self-manufactured
semi-finished 5204671.12 30596.07 1066906.55 13329.22 4155031.42
product
Materials entrusted
413054.96 314792.27 105135.51 622711.72
for processing
Goods shipped in
6976203.69 777824.69 2736794.29 310.42 5016923.67
transit
Total 148557713.90 29604841.20 32649855.98 625842.82 144886856.30
(4) Explanation of the ending balance of inventory including the capitalized amount of borrowing costs
□ Applicable□ Not applicable
(5) Explanation of the amortization amount of contract performance costs in the current period
□ Applicable□ Not applicable
11. Assets held for sale
□ Applicable□ Not applicable
12. Non-current assets due within one year
Unit: RMB
Items Ending balance Beginning balance
Long-term receivables due within one year
6088495.57 5707964.58
(financing lease payments)
Minus: unrealized financing income 754468.90 732766.35
Minus: impairment provision 188743.36 176946.90
Total 5145283.31 4798251.33
(1) Debt investments due within one year
□ Applicable□ Not applicable
(2) Other debt investments due within one year
□ Applicable□ Not applicable
13. Other current assets
Unit: RMB
Items Ending balance Beginning balance
Large-amount certificates of deposit 10906301.75 10752575.72
VAT to be deducted 528556202.34 476799142.19
Other prepaid taxes 22294520.10 26784759.37
Deferred expenses 12127418.96 11678517.35
Total 573884443.15 526014994.63
14. Debt investment
None.
15. Other debt investment
(1) Other debt investment
Unit: RMB
Cumulative
Change
Inte Cumulat impairment
in fair
rest ive provision
Beginning Accrued value in Ending
Items adju Cost change recognized
balance interest the balance
stm in fair in other
current
ent value comprehens
period
ive income
Transferable
large-amount 41269743.5
40843277.78 426465.75 40000000.00
certificates of 3
deposit
41269743.5
Total 40843277.78 426465.75 40000000.00
3
(2) Other significant debt investments at the end of the period
□ Applicable□ Not applicable
(3) Provision for impairment
□ Applicable□ Not applicable
(4) Other debt investments actually written off in this period
None.
16. Other equity instrument investment
Unit: RMB
Losses
Gains accumu
includ Losses Gains and lated at Reasons
Divide
ed in recogniz losses the end specified as
nd
other ed in included in of the measured at
revenu
compr other other period fair value with
Beginning e
Project name ehensi compreh comprehen and Ending balance changes
balance recogn
ve ensive sive include included in
ized in
revenu revenue revenue at d in other
this
e for for the the end of other comprehensive
period
the period the period compre income
period hensive
revenue
Strategic
Suzhou
investment
Legendsemi 4086798.
24086798.00 24086798.00 expected to be
Technology Co. 00
held for a long
Ltd.time
Strategic
Suzhou Suyu investment
6342734.
Technology Co. 27535684.00 27535684.00 expected to be
00
Ltd. held for a long
time
Strategic
Shenzhen Yueran
investment
Innovation
20000000.00 expected to be
Technology Co.held for a long
Ltd.time
Strategic
Suzhou Apache
investment
Robotics
8000000.00 expected to be
Technology Co.held for a long
Ltd.time
10429532
Total 51622482.00 79622482.00.00
17. Long-term receivables
(1) Situation of long-term receivables
Unit: RMB
Ending balance Beginning balance Disc
ount
Items Provision Provision rate
Book balance for bad Book value Book balance for bad Book value rang
debts debts e
Financing lease 20929203.56 648805.31 20280398.25 22831858.41 707787.61 22124070.80 3.5%
payments
Including: unrealized 1288574.49 1288574.49 1732934.02 1732934.02
financing income
Minus: long-term
receivables due 5334026.67 188743.36 5145283.31 4975198.23 176946.90 4798251.33
within one year
Total 14306602.40 460061.95 13846540.45 16123726.16 530840.71 15592885.45
(2) Disclosure by bad debt provision method
Unit: RMB
Ending balance Beginning balance
Book balance Provision for bad debts Book balance Provision for bad debts
Category Proportion Book value Proportion Book value
Amount Proportion Amount of Amount Proportion Amount
of provision
provision
Including:
Provision for bad debts by
20929203.56 100.00% 648805.31 3.10% 20280398.25 22831858.41 100.00% 707787.61 3.10% 22124070.80
portfolio
Including:
Aging portfolio (financing
20929203.56 100.00% 648805.31 3.10% 20280398.25 22831858.41 100.00% 707787.61 3.10% 22124070.80
lease payments)
Total 20929203.56 100.00% 648805.31 3.10% 20280398.25 22831858.41 100.00% 707787.61 3.10% 22124070.80
Description of bad-debt provision on combined basis: aging portfolio
Unit: RMB
Ending balance
Name
Book balance Provision for bad debts Proportion of provision
Aging portfolio (financing
20929203.56 648805.31 3.10%
lease payments)
Total 20929203.56 648805.31
Explanation of the basis for determining the portfolio: none.Provision for bad debts based on the general model of expected credit losses
Unit: RMB
First stage Second stage Third stage
Expected credit loss for
Provision for bad debts Expected credit loss forExpected credit loss in the entire duration Total
the entire duration (no
the next 12 months (credit impairment
credit impairment)
occurred)
Balance as of January
707787.61 707787.61
1 2026
Balance as of January
1 2026 in the current
period
Reversal in the current
58982.30 58982.30
period
Balance as of June 30
648805.31 648805.31
2026
(3) Provision for bad debts accrued recovered or reversed in current period
Unit: RMB
Amount changed in the current period
Beginning
Category
balance Recover or Reversal or
Ending balance
Provision Others
reversal write-off
Aging portfolio 707787.61 58982.30 648805.31
Total 707787.61 58982.30 648805.31
(4) Long-term accounts receivable actually written off in this period
None.18. Long-term equity investment
Unit: RMB
Changes in increase or decrease in the current period
Profits
Openin Declarand
ation Endingg
Beginni losses Othe
balance Adjust of
balance
on r Endingng
of Additi Decre ment to distrib Provisi
of
invest chan balanceInvestee balance
provisi onal ase in other ution on for Oth
provisi
(book ment ges
(book
on for
on for invest invest compre for impair ersrecogni in value)value)
impair ment ment hensive cash ment
impair
zed equit
ment income divide
ment
under y
nds or
equity
profits
method
I. Joint venture
II. Associated enterprises
Tai'an
Yucheng
xin
97647 97647
Power
19.19 19.19
Technolo
gy Co.Ltd.Shenzhen
Daka
582554 582554
Optoelect
8.86 8.86
ronics
Co. Ltd.Shanghai
Yidong
-
Power 918952 917391
15604
Technolo 0.62 5.71.91
gy Co.Ltd.Donggua
n Jujin
Plastic 254480 88779 263358
Technolo 43.88 7.63 41.51
gy Co.Ltd.
404631 97647 87219 413353 97647
Subtotal
13.36 19.19 2.72 06.08 19.19
404631 97647 87219 413353 97647
Total
13.36 19.19 2.72 06.08 19.19
The recoverable amount is determined as the net amount of fair value less disposal costs.□ Applicable□ Not applicable
The recoverable amount is determined by the present value of expected future cash flows.□ Applicable□ Not applicable
Reason for the significant inconsistency between the above information and the information used in the
previous year's impairment tests or external information: none.Reason for the significant discrepancy between the information used in the previous year's impairment test and
the actual situation of the current year: none.
19. Other non-current financial assets
None.
20. Investment property
(1) Investment property with cost measurement model
□ Applicable □ Not applicable
Unit: RMB
Houses and Land use Construction
Items Total
buildings right in progress
I. Original book value
1. Beginning balance 119070562.06 119070562.06
2. Increase in the current period
(1) Outsourcing
(2) Transfer in of inventory fixed assets and
construction in progress
(3) Increment from consolidation
3. Decrease in the current period
(1) Disposal
(2) Other transfer out
4. Ending balance 119070562.06 119070562.06
II. Accumulated depreciation and accumulated
amortization
1. Beginning balance 21342909.20 21342909.20
2. Increase in the current period 1419187.51 1419187.51
(1) Provision or amortization 1419187.51 1419187.51
3. Decrease in the current period
(1) Disposal
(2) Other transfer out
4. Ending balance 22762096.71 22762096.71
III. Provision for impairment
1. Beginning balance
2. Increase in the current period
(1) Accrual
3. Decrease in the current period
(1) Disposal
(2) Other transfer out
4. Ending balance
IV. Book value
1. Ending book value 96308465.35 96308465.35
2. Beginning book value 97727652.86 97727652.86
The recoverable amount is determined as the net amount of fair value less disposal costs.□ Applicable□ Not applicable
The recoverable amount is determined by the present value of expected future cash flows.□ Applicable□ Not applicable
Reasons for significant discrepancies between the above information and the information or external data used
in previous annual impairment tests
Reasons for significant discrepancies between the information used in the Company's impairment tests in
previous years and the actual situation in the current year
Other descriptions:
(2) Investment property using the fair value recognition model
□ Applicable□ Not applicable
(3) Transfer to investment property and measurement at fair value
□ Applicable□ Not applicable
(4) Investment property without certificate of title
□ Applicable□ Not applicable
21. Fixed assets
Unit: RMB
Items Ending balance Beginning balance
Fixed assets 2846327000.00 2888394751.10
Disposal of fixed assets 0.00 0.00
Total 2846327000.00 2888394751.10
(1) Situation about fixed assets
Unit: RMB
Office
Houses and Machinery and Transportation
Items equipment and Total
buildings equipment equipment
others
I. Original book value:
1. Beginning balance 1966121334.68 1885862760.99 4372436.03 88608965.83 3944965497.53
2. Increase in the current 5112421.34 98755404.52 633223.72 2402655.16 106903704.74
period
(1) Purchase 69475248.81 338301.81 1980334.44 71793885.06
(2) Transfer into
5112421.34 29280155.71 294921.91 422320.72 35109819.68
projects under construction
3. Decrease in the current 10322692.22 57920556.13 118614.16 2010444.14 70372306.65
period
(1) Disposal or
40541603.35 30146.10 642588.13 41214337.58
scrapping
(2) Exchange rate
10322692.22 17378952.78 88468.06 1367856.01 29157969.07
changes
4. Ending balance 1960911063.80 1926697609.38 4887045.59 89001176.85 3981496895.62
II. Accumulated depreciation
1. Beginning balance 257595175.23 725647065.87 3042596.98 57904497.22 1044189335.30
2. Increase in the current 23236707.29 90349558.61 243333.92 4610881.32 118440481.14
period
(1) Accrual 23236707.29 90349558.61 243333.92 4610881.32 118440481.14
3. Decrease in the current 1631908.51 26745443.36 45662.01 1145093.94 29568107.82
period
(1) Disposal or
22556398.35 15431.26 558490.42 23130320.03
scrapping
(2) Exchange rate
1631908.51 4189045.01 30230.75 586603.52 6437787.79
changes
4. Ending balance 279199974.01 789251181.12 3240268.89 61370284.60 1133061708.62
III. Provision for impairment
1. Beginning balance 12381411.13 12381411.13
2. Increase in the current
period
(1) Accrual
3. Decrease in the current
10273224.13 10273224.13
period
(1) Disposal or
10273224.13 10273224.13
scrapping
4. Ending balance 2108187.00 2108187.00
IV. Book value
1. Ending book value 1681711089.79 1135338241.26 1646776.70 27630892.25 2846327000.00
2. Beginning book value 1708526159.45 1147834283.99 1329839.05 30704468.61 2888394751.10
(2) Temporary idle fixed assets
Unit: RMB
Original book Accumulated Provision for
Items Book value Note:
value depreciation impairment
Provision for
Production
impairment based
equipment of Taixing 4903626.71 2795439.71 2108187.00 0
on estimated
Topband
selling price
Total 4903626.71 2795439.71 2108187.00 0
(3) Fixed assets leased out through operating lease
□ Applicable□ Not applicable
(4) Fixed assets without certificate of title
□ Applicable□ Not applicable
(5) Impairment test of fixed assets
□ Applicable □ Not applicable
The recoverable amount is determined as the net amount of fair value less disposal costs.□ Applicable □ Not applicable
Unit: RMB
Determination Basis for
Recoverable Impairment method of fair Key determining
Items Book value
amount amount value and disposal parameters key
expenses parameters
Production equipment 2108187.00 Expected selling Not Not0 2108187.00
of Taixing Topband price applicable applicable
Total 2108187.00 0 2108187.00
The recoverable amount is determined by the present value of expected future cash flows.□ Applicable□ Not applicable
(6) Disposal of fixed assets
□ Applicable□ Not applicable
22. Construction in progress
Unit: RMB
Items Ending balance Beginning balance
Construction in progress 895992867.67 803965663.22
Total 895992867.67 803965663.22
(1) Projects under construction
Unit: RMB
Ending balance Beginning balance
Items Provision Provision
Book balance for Book value Book balance for Book value
impairment impairment
Topband Huizhou No.
668962411.41 668962411.41 605757965.84 605757965.84
2 Industrial Park
Workshop in Dong
143926375.96 143926375.96 109183142.75 109183142.75
Nai Vietnam
Test equipment to be
78674872.17 78674872.17 78024894.60 78024894.60
commissioned
Qingdao Workshop 2838286.53 2838286.53 2561417.09 2561417.09
Sporadic items 1590921.60 1590921.60 8438242.94 8438242.94
Total 895992867.67 895992867.67 803965663.22 803965663.22
(2) Changes in the important projects under construction in the current period
Unit: RMB
Proporti Pr Interes
on of oj t
Including:
Amount of accumu ec Accumulated capital
Other interest
Project Beginning Increase in the transfer into lated t amount of ization Source of
Budget decrements Ending balance capitalization
name balance current period fixed assets project pr interest rate in capitals
this period amount in the
this period investm og capitalization the
current period
ent in re current
budget ss period
Raised funds
Topband loans from
Huizhou No. 95 100.00 financial
800000000.00 605757965.84 63204445.57 668962411.41 83.62% 5720925.54 3168119.99
2 Industrial % % institutions
Park self-owned
funds
Workshop in
80
Dong Nai 223000000.00 109183142.75 34743233.21 143926375.96 64.54% Others
%
Vietnam
Total 1023000000.00 714941108.59 97947678.78 812888787.37 5720925.54 3168119.99
(3) Provision for impairment of projects under construction in the current period
□ Applicable□ Not applicable
(4) Impairment test of projects under construction
□ Applicable□ Not applicable
(5) Construction materials
□ Applicable□ Not applicable
23. Productive biological assets
(1) Productive biological assets measured by cost
□ Applicable□ Not applicable
(2) Impairment test of productive biological assets measured by cost
□ Applicable□ Not applicable
(3) Productive biological assets measured by fair value
□ Applicable□ Not applicable
24. Oil and gas assets
□ Applicable□ Not applicable
25. Right-of-use assets
(1) Right-of-use assets
Unit: RMB
Items Houses and buildings Total
I. Original book value
1. Beginning balance 103803949.38 103803949.38
2. Increase in the current period 2624142.55 2624142.55
(1) New lease 4997547.27 4997547.27
(2) Exchange rate changes -2373404.72 -2373404.72
3. Decrease in the current period 5755461.53 5755461.53
(1) Lease contracts terminated in the
5755461.53 5755461.53
current period
4. Ending balance 100672630.40 100672630.40
II. Accumulated depreciation
1. Beginning balance 53397952.96 53397952.96
2. Increase in the current period 12401942.72 12401942.72
(1) Accrual 13705468.82 13705468.82
(2) Exchange rate changes -1303526.10 -1303526.10
3. Decrease in the current period 1671556.52 1671556.52
(1) Disposal 1671556.52 1671556.52
4. Ending balance 64128339.16 64128339.16
III. Provision for impairment
1. Beginning balance
2. Increase in the current period
(1) Accrual
3. Decrease in the current period
(1) Disposal
4. Ending balance
IV. Book value
1. Ending book value 36544291.24 36544291.24
2. Beginning book value 50405996.42 50405996.42
(2) Impairment test of right-of-use assets
□ Applicable□ Not applicable
26. Intangible assets
(1) Situation of intangible assets
Unit: RMB
Patented and
Items Land use right Software non-patented Trademark Total
technology
I. Original book value
1. Beginning balance 386935968.33 43811816.03 947783351.25 9728450.00 1388259585.61
2. Increase in the current
-1789175.39 1143829.94 53407365.33 52762019.88
period
(1) Purchase 1176846.74 1176846.74
(2) Internal R&D 53407365.33 53407365.33
(3) Increment from
consolidation
(4) Exchange rate
-1789175.39 -33016.80 -1822192.19
changes
3. Decrease in the current
1656267.91 1656267.91
period
(1) Disposal 1656267.91 1656267.91
4. Ending balance 385146792.94 43299378.06 1001190716.58 9728450.00 1439365337.58
II. Accumulated amortization
1. Beginning balance 44606270.87 28435632.96 594808706.11 9291013.48 677141623.42
2. Increase in the current
3199039.88 2196581.13 65471246.23 70866867.24
period
(1) Accrual 3452845.40 2213537.34 65471246.23 71137628.97
(2) Exchange rate
-253805.52 -16956.21 -270761.73
changes
3. Decrease in the current
1656267.91 1656267.91
period
(1) Disposal 1656267.91 1656267.91
4. Ending balance 47805310.75 28975946.18 660279952.34 9291013.48 746352222.75
III. Provision for impairment
1. Beginning balance
2. Increase in the current
period
(1) Accrual
3. Decrease in the current
period
(1) Disposal
4. Ending balance
IV. Book value
1. Ending book value 337341482.19 14323431.88 340910764.24 437436.52 693013114.83
2. Beginning book value 342329697.46 15376183.07 352974645.14 437436.52 711117962.19
The intangible assets from internal development of the Company at the end of the current period accounts for
49.18% of the intangible asset balance.
(2) Data resources recognized as intangible assets
□ Applicable□ Not applicable
(3) Land use rights without certificate of title
□ Applicable□ Not applicable
(4) Impairment test of intangible assets
□ Applicable□ Not applicable
27. Goodwill
(1) Original book value of goodwill
Unit: RMB
Decrease in
Increase in the current
the current
Beginning period
Name of investees or items forming goodwill period Ending balance
balance
Disposal formed
by consolidation
Shenzhen YAKO Automation Technology Co.
107314446.71 107314446.71
Ltd.Shenzhen Allied Control System Co. Ltd. 53768699.68 53768699.68
Shenzhen Meanstone Intelligent Technology Co.
3006892.59 3006892.59
Ltd.Hangzhou Zhidong Motor Technology Co. Ltd. 1322921.77 1322921.77
Taixing Ninghui Lithium Battery Co. Ltd. 1962891.12 1962891.12
Shenzhen Tengyi Industrial Co. Ltd. 131783.24 131783.24
Total 167507635.11 167507635.11
(2) Impairment of goodwill
Unit: RMB
Decrease in
Increase in the current
Beginning the current
Name of investees or items forming goodwill period period Ending balancebalance
Provision
Shenzhen YAKO Automation Technology Co.
30659206.54 30659206.54
Ltd.Shenzhen Allied Control System Co. Ltd. 53768699.68 53768699.68
Shenzhen Meanstone Intelligent Technology Co.
3006892.59 3006892.59
Ltd.Taixing Topband Lithium Battery Co. Ltd. 1962891.12 1962891.12
Total 89397689.93 89397689.93
(3) Information about the asset group or portfolio of goodwill
□ Applicable□ Not applicable
(4) Specific method for determining recoverable amount
The recoverable amount is determined as the net amount of fair value less disposal costs.□ Applicable□ Not applicable
The recoverable amount is determined by the present value of expected future cash flows.□ Applicable□ Not applicable
Reason for the significant inconsistency between the above information and the information used in the
previous year's impairment tests or external information: none.Reason for the significant discrepancy between the information used in the previous year's impairment test and
the actual situation of the current year: none.(5) Completion of performance commitments and corresponding goodwill impairment
There was a performance commitment when goodwill was established and the Reporting Period or the period
preceding the Reporting Period is within the performance commitment period.□ Applicable□ Not applicable
28. Long-term deferred expenses
Unit: RMB
Increase in the Amortization in the Other reduced
Items Beginning balance Ending balance
current period current period amount
Decoration costs 195703437.02 32643824.79 41658953.49 2714192.25 183974116.07
Total 195703437.02 32643824.79 41658953.49 2714192.25 183974116.07
29. Deferred tax assets/deferred tax liabilities
(1) Non-offset deferred tax assets
Unit: RMB
Ending balance Beginning balance
Items Deductible Deductible temporary
temporary Deferred tax assets Deferred tax assets
differences
differences
Provision for asset impairment 145983560.08 24411318.78 151946145.31 24531004.64
Deductible loss 347592873.77 62367482.10 298583536.98 55721951.82
Credit impairment loss 197253332.55 31468847.48 191605649.34 30078590.78
Amortization difference of
241227184.55 36184077.68 218218667.97 32732800.19
intangible assets
Deferred income 6859288.14 1280541.04 8246540.29 1534744.53
Equity incentive expenses 30603115.66 4590467.35 74333649.45 11150047.42
New leasing criteria book-tax
37110396.37 6706902.40 51288322.50 9317499.22
difference
Depreciation of fixed assets 7240350.33 1086052.55 7333883.65 1100082.55
Change in fair value of trading
1078049.24 168817.31 5161.00 774.15
financial liabilities
Total 1014948150.69 168264506.69 1001561556.49 166167495.30
(2) Deferred tax liabilities without offset
Unit: RMB
Ending balance Beginning balance
Items Taxable temporary Deferred tax Taxable temporary Deferred tax
difference liabilities difference liabilities
Change in fair value of other equity
10429532.00 2607383.00 10429532.00 2607383.00
instrument investments
Book-tax difference of fixed assets
61571090.58 13688320.28 63664673.60 14084776.84
depreciation
Book-tax difference of rental
5034058.09 1258514.52 4541090.59 1135272.65
income
Changes in the fair value of trading
240672497.54 40106725.18 241906308.25 40365956.79
financial assets
New leasing criteria book-tax
36581053.83 6709794.72 50405996.42 9205772.11
difference
Total 354288232.04 64370737.70 370947600.86 67399161.39
(3) Deferred tax assets or liabilities listed by net amount after offset
Unit: RMB
Amount of mutual
Amount of offset
Ending balance of offset between deferred Beginning balance of
between deferred tax
Items deferred tax assets or tax assets and liabilities deferred tax assets or
assets and liabilities at
liabilities after offset at the beginning of the liabilities after offset
the end of the period
period
Deferred tax assets 41240024.92 127024481.77 43986416.18 122181079.12
Deferred tax liabilities 41240024.92 23130712.78 43986416.18 23412745.21
(4) Details of unrecognized deferred tax assets
Unit: RMB
Items Ending balance Beginning balance
Deductible temporary differences 21483252.60 33466124.77
Deductible loss 674498012.58 609482883.71
Total 695981265.18 642949008.48
(5) Deductible loss of unrecognized deferred tax assets will mature in the following years
Unit: RMB
Year Ending amount Beginning amount Note:
2026 17599198.56 19866592.09
2027 16604808.32 34845693.90
2028 33379321.71 72492637.03
2029 39915094.53 111235119.44
2030 71174788.12 251415937.10
2031 and onward 369679997.43
No time limit 126144803.91 119626904.15
Total 674498012.58 609482883.71
Note: The deductible losses of unrecognized deferred tax assets with no maturity period are recoverable losses
of overseas subsidiaries and there are no local policy requirements for deductible periods.30. Other non-current assets
Unit: RMB
Ending balance Beginning balance
Items Provision Provision for
Book balance for Book value Book balance Book value
impairment
impairment
Prepayment for long-
42930612.50 42930612.50 33202988.26 33202988.26
term assets
Total 42930612.50 42930612.50 33202988.26 33202988.26
31. Assets with limited ownership or use right
Unit: RMB
End of the period Beginning of the period
Items Restrictio Restri RestrictioBook Restricti
Book balance n Book balance Book value ction n
value on type
situation type situation
Margin Margin
for for
forward forward
Monetary foreign Margi foreign
Margin 56416530.09 56416530.09
capital exchange n exchange
settlemen settlemen
t and sale t and sale
etc. etc.Deposit Deposit
for for
applicatio applicatio
Monetary 2008507 n of notes 115744719.9 Margi n of notes
20085075.73 Margin 115744719.96
capital 5.73 and 6 n and
guarantee guarantee
s from s from
banks banks
Amount Amount
Monetary 583605.3 Froze
583605.37 Frozen frozen by 583605.37 583605.37 frozen by
capital 7 n
court court
Other debt Amount Amount
1000000 Froze
investmen 10000000.00 Frozen frozen by 40000000.00 40000000.00 frozen by
0.00 n
t court court
Fixed 865514177.38 7593928 Mortgag Loan 383488498.9 Mort Loan
assets 38.72 e mortgage
396298785.19 8 gage mortgage
Intangible 59059643.62 4936596 Mortgag Loan Mort Loan1.05 31648343.62 29907684.73assets e mortgage gage mortgage
Constructi
on in 605757965.84 605757965.8
Mort Loan
4 gage mortgage
progress
Total 955242502.10 8394274
1231899004
80.87 1246449950.07 .97
32. Short-term loans
(1) Classification of short-term loans
Unit: RMB
Items Ending balance Beginning balance
Credit loan 139000000.00 120000000.00
Letter of credit 1729514919.68 1271514919.68
Discounted unexpired notes receivable 2027727.41 955045.08
Total 1870542647.09 1392469964.76
(2) Status of overdue and unpaid short-term loans
□ Applicable□ Not applicable
33. Trading financial liabilities
Unit: RMB
Items Ending balance Beginning balance
Financial liabilities held for trading 1078049.24 5161.00
Including:
Foreign exchange derivatives 1078049.24 5161.00
Total 1078049.24 5161.00
34. Derivative financial liabilities
None.
35. Notes payable
Unit: RMB
Category Ending balance Beginning balance
Commercial acceptance bill 82549.06 31949647.26
Bank acceptance bill 1755413274.58 1546388926.59
Total 1755495823.64 1578338573.85
36. Accounts payable
(1) Accounts payable listed
Unit: RMB
Items Ending balance Beginning balance
Trade accounts payable 3138860839.56 2330233821.85
Other payables 1172587.98 816694.34
Total 3140033427.54 2331050516.19
(2) Significant accounts payable aged over 1 year or overdue
□ Applicable□ Not applicable
37. Other payables
Unit: RMB
Items Ending balance Beginning balance
Other account payable 236548938.28 278177897.89
Total 236548938.28 278177897.89
(1) Interest payable
□ Applicable□ Not applicable
(2) Dividends payable
□ Applicable□ Not applicable
(3) Other accounts payable
1) Other payables listed by fund nature
Unit: RMB
Items Ending balance Beginning balance
Long-term assets 159281513.99 200706467.73
Expenses 38867537.96 54365161.93
Current accounts 9401763.52 3203596.62
Margin deposit 20493545.58 12838652.20
Equity acquisition payments payable 5512900.00 5512900.00
Others 2991677.23 1551119.41
Total 236548938.28 278177897.89
2) Other significant payables aged over 1 year or overdue
□ Applicable□ Not applicable
38. Advance collections
(1) Presentation of advance collections
Unit: RMB
Items Ending balance Beginning balance
Prepaid rent 6849072.70 4903162.70
Total 6849072.70 4903162.70
(2) Significant advance collections aged over 1 year or overdue
□ Applicable□ Not applicable
39. Contractual liabilities
Unit: RMB
Items Ending balance Beginning balance
Product payment received in advance 151911777.01 116456170.61
Total 151911777.01 116456170.61
40. Employee pay payable
(1) Presentation of employee pay payable
Unit: RMB
Increase in the current Decrease in the current
Items Beginning balance Ending balance
period period
I. Short-term compensation 262044071.05 1168451883.93 1280034635.61 150461319.37
II. Post-employment benefits -
924545.90 71728200.50 71370600.43 1282145.97
defined contribution plan
Total 262968616.95 1240180084.43 1351405236.04 151743465.34
(2) Reporting of short-term remuneration
Unit: RMB
Increase in the current Decrease in the
Items Beginning balance Ending balance
period current period
1. Wages bonuses allowances 256757120.92 1096695549.91 1208477533.65 144975137.18
and subsidies
2. Employee benefits 293293.37 10900138.91 10921227.02 272205.26
3. Social insurance expense 932893.94 28214358.31 28526858.64 620393.61
Including: medical 924737.59 23975044.95 24293656.39 606126.15
insurance premiums
Industrial injury 8156.35 2444308.35 2438197.24 14267.46
insurance expense
Maternity 1795005.01 1795005.01 0.00
insurance expense
4. Housing provident fund 469519.33 31687406.57 31411487.38 745438.52
5. Trade union funds and staff 804.31 378691.23 379495.54 0.00
education funds
8. Others 3590439.18 575739.00 318033.38 3848144.80
Total 262044071.05 1168451883.93 1280034635.61 150461319.37
(3) List of defined contribution plan
Unit: RMB
Increase in the current Decrease in the current
Items Beginning balance Ending balance
period period
1. Basic endowment
314192.80 67511528.91 67224590.83 601130.88
insurance
2. Unemployment
610353.10 4216671.59 4146009.60 681015.09
insurance expense
Total 924545.90 71728200.50 71370600.43 1282145.97
41. Taxes payable
Unit: RMB
Items Ending balance Beginning balance
VAT (value-added tax) 1049314.76 1762684.87
Corporate income tax 18952895.88 26834026.89
Individual income tax 11141157.35 9928637.55
City maintenance and construction tax 1530002.47 1563848.42
Education surcharge 1120035.39 921040.76
Property tax 5272825.94 5319444.58
Land use tax 604951.47 47673.06
Stamp tax and others 1983869.68 3217381.99
Total 41655052.94 49594738.12
42. Liabilities held for sale
□ Applicable□ Not applicable
43. Non-current liabilities due within one year
Unit: RMB
Items Ending balance Beginning balance
Long-term borrowings due within one
142663638.03 14435000.00
year
Lease liabilities due within one year 23714147.69 28687892.52
Total 166377785.7200 43122892.52
44. Other current liabilities
Unit: RMB
Items Ending balance Beginning balance
Tax amount to be resold 69347622.56 55496870.91
Notes receivable that have been not
24224109.24 8530037.11
derecognized or have not expired
Total 93571731.80 64026908.02
45. Long-term loans
Unit: RMB
Items Ending balance Beginning balance
Mortgage loan 450404625.88 321885000.00
Credit loan 94000000.00 97000000.00
Minus: long-term borrowings to be due
142663638.03 14435000.00
within 1 year
Total 401740987.85 404450000.00
46. Bonds payable
□ Applicable□ Not applicable
47. Lease liabilities
Unit: RMB
Items Ending balance Beginning balance
Lease liabilities 13566691.31 22919126.35
Total 13566691.31 22919126.35
48. Long-term payables
□ Applicable□ Not applicable
49. Long-term employee compensation payable
□ Applicable□ Not applicable
50. Estimated liabilities
□ Applicable□ Not applicable
51. Deferred income
Unit: RMB
Increase in the Decrease in the
Items Beginning balance Ending balance Reasons of formation
current period current period
Governmental
Government
14047240.76 450000.00 2117625.88 12379614.88 subsidies related to
subsidies
assets
Total 14047240.76 450000.00 2117625.88 12379614.88
52. Other non-current liabilities
□ Applicable□ Not applicable
53. Share capital
Unit: RMB
Increase or decrease of change this time (+ -)
Conversion
Beginning of
balance Issuance of Stock
Ending balance
accumulation Others Subtotal
new shares dividend
fund into
shares
Total
number of 1246834988.00 1246834988.00
shares
54. Other equity instruments
None.
55. Capital reserve
Unit: RMB
Increase in the current Decrease in the
Items Beginning balance Ending balance
period current period
Capital premium (share
1973555637.53 1973555637.53
premium)
Other capital reserves 176144714.49 28129086.74 2964914.09 201308887.14
Total 2149700352.02 28129086.74 2964914.09 2174864524.67
Other descriptions including increase or decrease in the current period and reasons for changes:
Reason for increase in other capital reserves during the current period: increase in equity incentive expenses
recognized by the Company.Reason for decrease in other capital reserves during the current period: decrease in deferred tax assets
recognized for expenses that can be deducted before tax in the future.
56. Treasury shares
Unit: RMB
Increase in the current Decrease in the current
Items Beginning balance Ending balance
period period
Treasury shares 155694936.18 155694936.18
Total 155694936.18 155694936.18
57. Other comprehensive income
Unit: RMB
Amount incurred in the current period
Minus: profits
Minus: current
and losses
retained
included in
Amount of earnings
Beginning other Minus: Attributable Attributable
Items pre-income included in
balance comprehensive income to parent to minority
Ending balance
tax incurred other
income tax company after shareholders
in the current comprehensive
previously and expense tax after tax
period income in the
transferred in
previous
the current
period
period
I. Other
comprehensive
income that
7822149.00 7822149.00
cannot be
reclassified into
profits or losses
Change in
fair value of
other equity 7822149.00 7822149.00
instrument
investments
II. Other
comprehensive
income that is - - - -
reclassified into 68163018.44 62878451.80 62878451.80 131041470.24
profits and
losses
Difference
in translation of
foreign - - - -
currency 68163018.44 62878451.80 62878451.80 131041470.24
financial
statements
Total amount of
other - - - -
comprehensive 60340869.44 62878451.80 62878451.80 123219321.24
income
58. Special reserve
□ Applicable□ Not applicable
59. Surplus reserves
Unit: RMB
Increase in the current Decrease in the current
Items Beginning balance Ending balance
period period
Statutory surplus
267001620.24 267001620.24
reserve
Total 267001620.24 267001620.24
60. Undistributed earnings
Unit: RMB
Items Current period Previous period
Retained earnings at the end of the
3534742722.91 3275527294.98
previous period before adjustment
Retained earnings at the beginning of last
3534742722.91 3275527294.98
period after adjustment
Plus: net profit attributable to owners of
128802409.01 330078194.08
parent company in current year
Common stock dividends payable 86015257.16 86015257.16
Retained earnings at the end of the period 3577529874.76 3519590231.90
Details of Adjusted Retained Earnings at the Beginning of the Period:
1). Due to the retroactive adjustments made according to the Accounting Standards for Business Enterprises and
relevant new provisions therein RMB 0.00 of the beginning/closing retained earnings was affected.
2). Due to changes in accounting policies the beginning undistributed profit was affected by RMB 0.00.
3). Due to corrections of material accounting errors the beginning/closing retained earnings were affected by
RMB 0.00.
4). The change in the consolidation scope due to the same control has an impact on the beginning undistributed
profit of RMB 0.00.
5). Due to other adjustments the beginning/closing retained earnings were affected by RMB 0.00 in total.
Detailed explanation of using capital reserves to offset losses: none.61. Revenue and operating costs
Unit: RMB
Amount incurred in the current period Amount incurred in prior period
Items
Income Cost Income Cost
Main business 5737727400.32 4636773824.65 5461992695.45 4245791685.06
Other business 71075005.02 28036043.31 40343033.73 15971697.19
Total 5808802405.34 4664809867.96 5502335729.18 4261763382.25
62. Taxes and surcharges
Unit: RMB
Items Amount incurred in the current period Amount incurred in prior period
City maintenance and construction tax 11424885.96 7401334.56
Education surcharge 8162844.18 5342024.83
Property tax 6858735.30 6601307.33
Land use tax 876597.04 967563.54
Stamp duty 4526839.91 4138668.58
Others 72852.10 23835.82
Total 31922754.49 24474734.66
63. Overheads
Unit: RMB
Items Amount incurred in the current period Amount incurred in prior period
Employee compensation 122705235.67 125938270.61
Depreciation and amortization 32083315.09 44915015.59
Rent and utility fees 4784055.40 12191942.77
Equity incentive expenses 6740494.53 11951165.73
Intermediary service expenses 12419934.08 8605799.41
Office and traveling expenses 7412906.67 7015442.33
Property insurance expenses 1280136.94 1533342.12
Others 8599904.43 10409884.01
Total 196025982.81 222560862.57
64. Sales expenses
Unit: RMB
Items Amount incurred in the current period Amount incurred in prior period
Employee compensation 109735781.10 110724348.63
Business entertainment fees and traveling
23113059.63 27861619.25
expenses
Material and sample costs 19080201.33 20714975.77
Intermediary service expenses 29166422.20 17781805.98
Exhibition and advertising fees 9226187.66 15396481.40
Equity incentive expenses 8486581.88 14293685.43
Others 13286563.92 13913164.10
Total 212094797.72 220686080.56
65. R&D expenses
Unit: RMB
Items Amount incurred in the current period Amount incurred in prior period
Employee compensation 272260758.19 279894551.34
Depreciation and amortization 84367340.20 75441689.62
Material and mold costs 26469214.50 35416783.36
Equity incentive expenses 10319249.88 20184487.19
Intermediary service expenses 2232122.06 12406300.40
Rent and utility fees 7140257.75 10313613.12
Low-value consumables 11864585.31 5416754.40
Others 23481082.15 21712598.27
Total 438134610.04 460786777.70
66. Financial expenses
Unit: RMB
Items Amount incurred in the current period Amount incurred in prior period
Interest expense 12815585.10 19345176.16
Interest revenue (income marked with "-") -9251704.34 -12672976.09
Exchange losses (income marked with "- 112698511.12 -46120380.71
")
Bank procedure fees and others 1656881.72 690382.12
Total 117919273.60 -38757798.52
67. Other revenues
Unit: RMB
Source for other revenues Amount incurred in the current period Amount incurred in prior period
Government subsidies 8621673.49 19280543.02
Return of individual income tax service
1351482.03 1340601.69
charge
Tax reduction and exemption 364850.00 345250.00
VAT refund upon collection 3578428.88 5857747.88
Additional deduction for input tax 5467992.04 4905800.07
Total 19384426.44 31729942.66
68. Net exposure hedging revenue
None.
69. Fair value change revenue
Unit: RMB
Sources of income from change in fair
Amount incurred in the current period Amount incurred in prior period
value
Trading financial assets 1360403.64
Financial liabilities held for trading -1078049.24 -106506.00
Total 282354.40 -106506.00
70. Investment income
Unit: RMB
Items Amount incurred in the current period Amount incurred in prior period
Long-term equity investment income
872192.72 877869.10
accounted by the equity method
Gains/losses on foreign exchange
4496861.59 1187681.13
derivatives
Income of wealth management products 8535156.06 4077466.70
Total 13904210.37 6143016.93
71. Credit impairment loss
Unit: RMB
Items Amount incurred in the current period Amount incurred in prior period
Bad debt loss on notes receivable 145838.26
Bad debt loss of accounts receivable -13343573.29 -6858904.67
Bad debt loss of other receivables 2041360.13 -256594.37
Bad Debt Loss on Long-term Receivables 58982.30
Loss from bad debt of accounts receivable
231401.86 -173493.24
financing
Total -11011829.00 -7143154.02
72. Asset impairment loss
Unit: RMB
Amount incurred in the current
Items Amount incurred in prior period
period
I. Loss on inventory valuation and contract
-29604841.20 -25099491.27
performance cost impairment loss
XI. Impairment loss of contract assets -4260.32
Total -29609101.52 -25099491.27
73. Assets disposal revenue
Unit: RMB
Source of assets disposal revenue Amount incurred in the current period Amount incurred in prior period
Profits and losses from disposal of
-1010649.83 -174143.23
noncurrent assets
74. Non-operating income
Unit: RMB
Amount incurred in the current Amount incurred in prior Gains on damage and
Items
period period scrapping of non-current assets
Gains from the destruction and
scrapping of non-current 201965.95 226454.70 201965.95
assets
Others 2604528.78 3562750.17 2604528.78
Total 2806494.73 3789204.87 2806494.73
75. Non-operating expenses
Unit: RMB
Amount incurred in the current Amount incurred in prior Gains on damage and
Items
period period scrapping of non-current assets
Loss on damage and scrapping
1787399.18 1759788.91 1787399.18
of non-current assets
Others 2390965.72 2353289.43 2390965.72
Total 4178364.90 4113078.34 4178364.90
76. Income tax expenses
(1) Table of income tax expenses
Unit: RMB
Items Amount incurred in the current period Amount incurred in prior period
Current income tax expenses 17194973.77 41864338.89
Deferred tax expense -7410135.20 -15876286.30
Total 9784838.57 25988052.59
(2) Adjustment process of accounting profits and income tax expenses
Unit: RMB
Items Amount incurred in the current period
Total profit 138462659.41
Income tax expenses calculated at statutory/applicable tax rates 20766671.42
Influence of different tax rates applicable to subsidiary -9254184.94
Effect of income tax adjustment in previous period -1289969.50
Impact of non-taxable income 67933.31
Impact of non-deductible cost expense and loss 4899875.09
Effect of using deductible losses on deferred tax assets not recognized in the prior -1842782.61
period
Impact of deductible temporary differences or deductible losses of unrecognized 20603614.30
deferred tax assets in the current period
Impact of additional deductible expenses -29260682.46
Other adjustments 5094363.96
Income tax expenses 9784838.57
77. Other comprehensive income
Refer to Note VII. 57 for details.
78. Items of cash flow statement
(1) Cash related to operating activities
Other cash received related to operating activities
Unit: RMB
Items Amount incurred in the current period Amount incurred in prior period
Interest income 8697952.08 12469928.36
Government subsidies 7152736.20 31151832.71
Current accounts 28106655.00 27209949.29
Others 3264934.69 4616922.39
Total 47222277.97 75448632.75
Other cash paid in connection with operating activities
Unit: RMB
Items Amount incurred in the current period Amount incurred in prior period
Service charge 2149635.98 1766609.18
Out-of-pocket expenses 170641841.35 198360304.81
Margin and deposit expenses 2222142.66 2424395.57
Employee loans 3465890.91 4621604.67
Others 14701459.15 17497380.58
Total 193180970.05 224670294.81
(2) Cash related to investment activities
Other cash received relating to investment activities
Unit: RMB
Items Amount incurred in the current period Amount incurred in prior period
Forex margin 55270965.98
Financial leasing rent 2025200.00
Total 57296165.98 0.00
Other cash paid related to investment activities
Unit: RMB
Items Amount incurred in the current period Amount incurred in prior period
Option premiums paid 120.00
Forward foreign exchange liquidation
385800.00
losses paid
Total 120.00 385800.00
(3) Cash related to financing activities
Other cash received related to financing activities
Unit: RMB
Items Amount incurred in the current period Amount incurred in prior period
Discounted notes receivable that cannot
12920862.51
be terminated for recognition
Total 12920862.51
Other cash paid related to financing activities
Unit: RMB
Items Amount incurred in the current period Amount incurred in prior period
Payment for principal and interest of lease
17022021.31 23837729.50
liabilities
Total 17022021.31 23837729.50
Changes in liabilities arising from financing activities
□ Applicable□ Not applicable
(4) Description on presenting cash flows on a net basis
Items Relevant facts Basis for net presentation Financial impact
The net offset of "cash paid for
investment" and "cash
Cash paid for investments/cash Cash flow from purchasing Cash inflows and outflows for
received from investment
received from investment and redeeming financial projects with fast turnover
recovery" is RMB 1095.5
recovery products large amounts and short terms
million which has no impact
on the financial statements.(5) Major activities not involving cash receipts and payments in the current period but influencing the
financial position of the Company or may influence the cash flow of the Company in the future and their
financial impact
□ Applicable□ Not applicable
79. Supplementary information of cash flow statement
(1) Supplementary materials of cash flow statement
Unit: RMB
Amount in the Amount in the
Supplementary information
current period previous period
1. Adjusting net profit to cash flow from operating activities:
Net profit 128677820.84 329859428.97
Plus: impairment of assets 40620930.52 32242645.29
Depreciation of fixed assets depletion of oil and gas assets depreciation of
118440481.14 116879301.85
productive biological assets
Depreciation of right-of-use assets 13705468.82 22255110.76
Amortization of intangible assets 71137628.97 65541313.68
Amortization of long-term deferred expenses 41658953.49 39108347.52
Loss from disposal of fixed assets intangible assets and other long-term assets
1010649.83 174143.23
(income marked with "-")
Losses on scrapping of fixed assets (income marked with "-") 1585433.23 1759788.91
Loss from changes in fair value (income marked with "-") 282354.40 -106506.00
Financial expenses (income marked with "-") 78826544.26 25189122.18
Investment income (income marked with "-") -13904210.37 -6143016.93
Decrease in deferred tax assets (increase marked with "-") -7808316.74 -21855313.92
Increase in deferred tax liabilities (decrease marked with "-") -282032.43 607264.29
Decrease in inventory (increase marked with "-") -969622690.22 -397897263.40
Decrease in operating receivables (increase marked with "-") -405754432.00 -329824615.67
Increase in operating payables (decrease marked with "-") 774255205.52 421349396.15
Others 26011460.86 54215419.58
Net cash flow from operating activities -101158749.88 353354566.49
2. Major investment and financing activities not involving cash receipts and payments:
Conversion of debt into capital
Convertible bonds due within one year
Fixed assets acquired under finance leases
3. Net change in cash and cash equivalents:
Ending balance of cash 1450680913.37 1802726466.13
Minus: beginning balance of cash 1619876262.35 1596352534.73
Plus: ending balance of cash equivalents
Minus: beginning balance of cash equivalents
Net increase in cash and cash equivalents -169195348.98 206373931.40
(2) Net cash paid for acquiring subsidiaries in the current period
□ Applicable□ Not applicable
(3) Net cash received for disposal of subsidiaries in the current period
□ Applicable□ Not applicable
(4) Composition of cash and cash equivalents
Unit: RMB
Items Ending balance Beginning balance
I. Cash 1450680913.37 1619876262.35
Including: cash in stock 686342.63 628866.15
Bank deposit available for
1412283806.63 1612607433.08
payment at any time
Other monetary capital for
37710764.11 6639963.12
payment at any time
III. Balance of cash and cash equivalents
1450680913.37 1619876262.35
at the end of the period
(5) Presentation of items with limited scope of use but still falling under cash and cash equivalents
□ Applicable□ Not applicable
(6) Monetary capitals not falling under cash and cash equivalents
Unit: RMB
Amount in the Amount in the
Items Reasons for not being cash and cash equivalents
current period previous period
Fixed deposits Judicially frozen funds interests accrued at the
Bank deposit 5226938.71 105410272.04
end of the period but not received etc.Other monetary
15441742.39 72161250.05 Margin
capital
Total 20668681.10 177571522.09
(7) Explanation of other major activities
□ Applicable□ Not applicable
80. Notes to items in change statement of owner's equity
□ Applicable□ Not applicable
81. Foreign currency monetary items
(1) Foreign currency monetary items
Unit: RMB
Foreign currency balance at Balance converted into RMB
Items Exchange rate for conversion
the end of the period at the end of the period
Monetary capital 590003002.84
Including: US dollars 48529799.98 6.8109 330531614.68
Euros 4925013.05 7.7671 38253068.85
Hong Kong dollars 2615003.50 0.8686 2271261.29
Indian Rupee 1427538758.03 0.0720 102838053.07
Vietnamese Dong 100861063312.00 0.0003 26129882.70
Japanese Yen 1028311693.00 0.0420 43235365.13
Romanian Leu 1649401.95 1.4821 2444599.33
Mexican Peso 113680498.73 0.3897 44299157.79
Accounts receivable 1881600408.18
Including: US dollars 249245490.87 6.8109 1697586113.77
Euros 2266300.60 7.7671 17602583.39
Hong Kong dollars 0.8686
Indian Rupee 1031832561.14 0.0720 74331888.42
Vietnamese Dong 319307773854.00 0.0003 82722454.05
Japanese Yen 214040149.00 0.0420 8999318.06
Romanian Leu 1.4821
Mexican Peso 918829.16 0.3897 358050.49
Accounts payable 66329655.72
Including: US dollars 2874199.55 6.8109 19575885.72
Euros 99528.68 7.7671 773049.21
Indian Rupee 145533632.65 0.0720 10484055.41
Vietnamese Dong 89017706219.00 0.0003 23061646.83
Japanese Yen 295754990.00 0.0420 12435018.55
Other receivables 5550669.26
Including: US dollars 549255.55 6.8109 3740924.63
Euros 6568.71 7.7671 51019.83
Indian Rupee 14384343.94 0.0720 1036229.61
Vietnamese Dong 2137097888.00 0.0003 553653.86
Japanese Yen 4015729.00 0.0420 168841.33
Other account payable 44128242.79
Including: US dollars 860239.47 6.8109 5859005.01
Euros 1430.83 7.7671 11113.40
Vietnamese Dong 136715616176.00 0.0003 35418653.11
Mexican Peso 7286651.18 0.3897 2839471.27
(2) Nature of currency inconvertibility and its financial impact spot exchange rate adopted and its
estimation process and risks faced by enterprises due to currency inconvertibility
□ Applicable□ Not applicable
(3) Explanation of overseas business entities including for important overseas business entities
disclosure of main overseas business locations recording currency and selection basis as well as
disclosure of reasons for changes in recording currency.□ Applicable □ Not applicable
1. Topband India Private Limited a subsidiary of the Company is mainly located in Pune City Maharashtra
India with Indian Rupee as the recording currency;
3. TOPBAND SMART DONG NAI (VIETNAM) Co. Ltd. a sub-subsidiary of the Company is mainly located
in Dong Nai Province Vietnam with Vietnamese Dong as the recording currency;
3. Topband Germany GmbH a sub-subsidiary of the Company is mainly located in Unterf?hring Germany
with Euro as the recording currency;
4. TOPBAND JAPAN Co. Ltd. a sub-subsidiary of the Company is mainly located in Nagoya Japan with
Japanese Yen as the recording currency;
5. Q.B.PTE.LTD a sub-subsidiary of the Company is located in Singapore with Singapore dollar as the
bookkeeping base currency;
6. TOPBAND SMART EUROPE COMPANY LIMITED S.R.L. a sub-subsidiary of the Company is located
in Timisoara Romania with Leu as the recording currency;
7. TOPBAND MEXICO S.DER.L.DEC.V. the sub-subsidiary of the Company is located in Monterrey
Mexico with peso as the recording currency.(4) Lack of convertibility between the functional currency of overseas operations and the presentation
currency of the enterprise
□ Applicable□ Not applicable
82. Lease
(1) The Company as the lessee
□ Applicable □ Not applicable
Variable lease payments not included in the measurement of the lease liability
□ Applicable□ Not applicable
Rental expenses of simplified short-term leases or low-value assets
□ Applicable □ Not applicable
The rents of simply treated short-term leases credited to current profits and losses of the current period are RMB
4200078.98.
Information involving sale and leaseback transactions: None.
(2) The Company as the lessor
Operating lease by lessor
□ Applicable □ Not applicable
Unit: RMB
Including: incomes related to variable
Items Rental income lease payments not credited to rental
receipts
Rental income 15932206.20 0
Total 15932206.20 0
Financing lease as lessor
□ Applicable □ Not applicable
Unit: RMB
Revenue related to variable
Items Sales profit and loss Financing profit and loss lease payments not included in
lease collection amount
Taixing production line
-23851057.90 1976206.65 /
equipment
Total -23851057.90 1976206.65 /
Undiscounted lease collection amount for each of the next five years.□ Applicable □ Not applicable
Unit: RMB
Undiscounted rental receipts of each year
Items
Ending amount Beginning amount
Year 1 29471896.16 33508161.99
Year 2 22235563.64 24496713.28
Year 3 18137946.72 19758235.61
Year 4 12893256.56 17644083.47
Year 5 7328427.61 10089598.93
Total amount of undiscounted rental
9012513.45 13507430.23
receipts after five years
Reconciliation statement between undiscounted lease receipts and net lease investment: None.
(3) Recognition of finance lease sales gains and losses as a manufacturer or distributor
□ Applicable□ Not applicable
83. Data resources
None.
84. Others
VIII. R&D expenditure
Unit: RMB
Items Amount incurred in the current period Amount incurred in prior period
Employee compensation 321763902.12 335064365.29
Depreciation and amortization 84753675.34 76092200.92
Material and mold costs 30000371.47 41394643.02
Equity incentive expenses 10319249.88 20184487.19
Intermediary service expenses 2232122.06 12558948.84
Rent and utility fees 7157944.87 10313613.12
Low-value consumables 12096230.01 5691704.43
Others 25365618.68 23542553.96
Total 493689114.43 524842516.77
Including: expensed R&D expenditure 438134610.04 460786777.70
Capitalized R&D expenditures 55554504.39 64055739.07
1. R&D projects that meet capitalization conditions
Unit: RMB
Increase in the current Decrease amount in the current
period period
Beginning
Items Transferre
balance Internal Recognized as
Ending balance
Othe d to current
development intangible
rs profit and
expenditure assets
loss
Intelligent controller
49000000.84 39368717.10 44230753.34 44137964.60
project
Motor and control
2522653.35 2522653.35
system project
New energy project 8633483.61 13663133.94 9176611.99 13120005.56
Total 57633484.45 55554504.39 53407365.33 59780623.51
2. Important outsourced projects under development
□ Applicable□ Not applicable
IX. Changes in the scope of consolidation
□ Applicable□ Not applicable
X. Interests in other entities
1. Equities in subsidiaries
(1) Composition of enterprise group
Unit: RMB
Principal Proportion of
Registered Registered Nature of Acquisition
Name of subsidiary place of shareholding
capital place business method
business Direct Indirect
Shenzhen Topband Software Production
1000000.00 Shenzhen Shenzhen 100.00% Establishment
Technology Co. Ltd. and sales
Shenzhen Topband Automation Production
35000000.00 Shenzhen Shenzhen 100.00% Establishment
Technology Co. Ltd. and sales
Shenzhen Topband Battery Co. Production
100000000.00 Shenzhen Shenzhen 100.00% Establishment
Ltd. and sales
Chongqing Topband Industrial Production
50000000.00 Chongqing Chongqing 100.00% Establishment
Co. Ltd. and sales
HKD 155
Topband (Hong Kong) Co. Ltd. Hong Kong Hong Kong Investment 100.00% Establishment
million
Huizhou Topband Electrical Production
300000000.00 Huizhou Huizhou 100.00% Establishment
Technology Co. Ltd. and sales
TOPBAND INDIA PRIVATE 2.265 billion Production
India India 100.00% Establishment
LIMITED Indian rupees and sales
Consolidation
Shenzhen YAKO Automation Production
60000000.00 Shenzhen Shenzhen 100.00% under different
Technology Co. Ltd. and sales
control
Consolidation
Shenzhen Allied Control System Production
55999998.00 Shenzhen Shenzhen 100.00% under different
Co. Ltd. and sales
control
Huizhou Topband Lithium Production
2000000.00 Huizhou Huizhou 100.00% Establishment
Battery Co. Ltd. and sales
Ningbo Topband Intelligent Production
300000000.00 Ningbo Ningbo 100.00% Establishment
Control Co. Ltd. and sales
Consolidation
Shenzhen Meanstone Intelligent Production
7600000.00 Shenzhen Shenzhen 77.25% under different
Technology Co. Ltd. and sales
control
Consolidation
Shenzhen Yansheng Software R&D and
1500000.00 Shenzhen Shenzhen 100.00% under different
Co. Ltd. sales
control
Consolidation
Hangzhou Zhidong Motor Production
1500000.00 Hangzhou Hangzhou 75.00% under different
Technology Co. Ltd. and sales
control
TOPBAND SMART
USD 33.5 Production
DONGNAI (VIETNAM) Vietnam Vietnam 100.00% Establishment
million and sales
COMPANY LIMITED
Topband Germany GmbH EUR 25000 Germany Germany Sales 100.00% Establishment
TOPBAND JAPAN Co. Ltd. JPY 30 million Japan Japan Sales 100.00% Establishment
Shenzhen Topband Supply
5000000.00 Shenzhen Shenzhen Sales 100.00% Establishment
Chain Services Co. Ltd.Shenzhen Topband Investment
50000000.00 Shenzhen Shenzhen Investment 100.00% Establishment
Co. Ltd.Shenzhen Topband Digital
10000000.00 Shenzhen Shenzhen Sales 100.00% Establishment
Energy Co. Ltd.Shenzhen Tunnu Innovation Co.
10000000.00 Shenzhen Shenzhen Sales 100.00% Establishment
Ltd.Shenzhen Senxuan Technology
10000000.00 Shenzhen Shenzhen Sales 100.00% Establishment
Co. Ltd.Topband (Qingdao) Intelligent Production
10000000.00 Qingdao Qingdao 100.00% Establishment
Control Co. Ltd. and sales
Consolidation
Shenzhen Tengyi Industrial Co.
1000000.00 Shenzhen Shenzhen Sales 100.00% under different
Ltd.control
Consolidation
Taixing Topband Lithium Production
105000000.00 Taixing Taixing 100.00% under different
Battery Co. Ltd. and sales
control
Shenzhen Topband Automotive
10000000.00 Shenzhen Shenzhen Sales 100.00% Establishment
Electronics Co. Ltd.Q.B.PTE.LTD SGD 10000 Singapore Singapore Sales 100.00% Establishment
TOPBAND Production
USD 35 million Mexico Mexico 100.00% Establishment
MEXICOS.DER.L.DEC.V. and sales
Tunnu Innovation (Hong Kong)
10000000.00 Hong Kong Hong Kong Sales 100.00% Establishment
Limited
TOPBAND SMART EUROPE
USD 30 million Romania Romania Sales 100.00% Establishment
COMPANY LIMITED S.R.L.Huizhou YAKO Automation Production
50000000.00 Huizhou Huizhou 100.00% Establishment
Technology Co. Ltd. and sales
Shenzhen Zhongli Consulting
2000000.00 Shenzhen Shenzhen Sales 100.00% Establishment
Co. Ltd.TUNNU INNOVATION INC USD 10000 U.S. U.S. Sales 100.00% Establishment
Nantong Topband Lithium Production
100000000.00 Nantong Nantong 100.00% Establishment
Battery Co. Ltd. and sales
Shenzhen Topband Motor Co. Production
10000000.00 Shenzhen Shenzhen 100.00% Establishment
Ltd. and sales
Shenzhen Yueshang Robot Co.
10000000.00 Shenzhen Shenzhen Sales 100.00% Establishment
Ltd.Shenzhen Jingfei Investment
10000000.00 Shenzhen Shenzhen Sales 100.00% Establishment
Co. Ltd.Huizhou Topband Supply Chain Production
20000000.00 Huizhou Huizhou 100.00% Establishment
Service Co. Ltd. and sales
Yolaness Technology (HK) Co.USD 500000 Hong Kong Hong Kong Sales 100.00% Establishment
Limited
Huizhou Jiuwan Lvyuan Production
5000000.00 Huizhou Huizhou 100.00% Establishment
Agriculture Co. Ltd. and sales
Chongqing Topband Yishu
1000000.00 Chongqing Chongqing Sales 100.00% Establishment
Energy Technology Co. Ltd.Topband Digital Energy
1000000.00 Huizhou Huizhou Sales 100.00% Establishment
Technology (Huizhou) Co. Ltd.Guangzhou Topband Digital
1000000.00 Guangzhou Guangzhou Sales 100.00% Establishment
Energy Co. Ltd.
(2) Important non-wholly-owned subsidiaries
None.
(3) Major financial information of important non-wholly-owned subsidiaries
None.
(4) Significant restrictions on using group assets and settling group liabilities
None.
(5) Financial support or other support provided to structured entities included in the scope of the consolidated financial
statements
None.
2. Transactions causing the owner's equity share change but still controlling the subsidiary
□ Applicable□ Not applicable
3. Interests in joint venture arrangements or associated enterprises
(1) Important joint ventures or associated enterprises
None.
(2) Major financial information of important joint ventures
None.
(3) Major financial information of important associated enterprises
None.
(4) Summarized financial information of unimportant joint ventures and associated enterprises
Unit: RMB
Ending balance/amount incurred in Beginning balance/amount
the current period incurred in the previous period
Joint ventures:
Sum of the following items calculated according to the
shareholding ratio
Associated enterprises:
Total book value of investment 41335306.08 40463113.36
Sum of the following items calculated according to the
shareholding ratio
-- Net profit 872192.72 877869.10
(5) Statement that there is a material limitation on the ability of the joint ventures or associated
enterprises to transfer funds to the Company
None.
(6) Excess losses incurred by the joint ventures or associated enterprises
None.
(7) Unconfirmed commitments related to the investment of joint ventures
None.(8) Contingent liabilities related to the investment of joint ventures or associated enterprises
None.
4. Significant joint operations
None.
5. Rights and interests in structured entities not included in the scope of the consolidated financial
statements
None.
6. Others
None.XI. Government subsidies
1. Government grants recognized as receivable at the end of the Reporting Period
□ Applicable□ Not applicable
Reasons for not receiving the expected amount of government subsidies at the expected time
□ Applicable□ Not applicable
2. Liabilities involving government subsidies
□ Applicable □ Not applicable
Amount
Newly accounted Amount
increased into non- included in Other Asset-
Accounting Beginning Ending
subsidy in operating other income changes in related/revenue-
items balance balance
the current income in in the current this period related
period the current period
period
Deferred
14047240.76 450000.00 2117625.88 12379614.88 Asset-related
income
3. Government subsidies included in the current profits and losses
□ Applicable □ Not applicable
Unit: RMB
Accounting items Amount incurred in the current period Amount incurred in prior period
Other income 8621673.49 19280543.02
XII. Risks associated with financial instruments
1. Risks arising from financial instruments
The risks of the Company related to financial instruments are derived from various types of financial assets
and financial liabilities recognized during the operation of the Company including: credit risk liquidity risk
and market risk.The management objectives policies and systems of the Company for various types of risks associated
with financial instruments are the responsibility of the Company's management. The management is responsible
for daily risk management through functional departments (for example the Credit Management Department of
the Company reviews credit sales of the Company on a case-by-case basis). The Internal Audit Department of
the Company shall supervise the implementation of the Company's risk management policies and procedures in
its daily work and reports relevant findings to the Audit Committee of the Company in a timely manner.The overall objective of the Company for risk management is to develop risk management policies that
minimize the risks associated with various financial instruments without unduly affecting the Company's
competitiveness and resilience.
1. Credit risk
Credit risk refers to the risk that one party to a financial instrument fails to perform its obligations
resulting in financial losses to the other party. Credit risks of the Company mainly arise from monetary funds
notes receivable accounts receivable receivables financing other receivables etc. The credit risk of these
financial assets is derived from defaults by the counterparty and the maximum risk exposure is equal to the
book amount of these instruments.The monetary funds of the Company are mainly deposited in commercial banks and other financial
institutions which the Company believes have a high reputation sound financial standing and low credit risks.For notes receivable accounts receivable receivables financing and other receivables the Company
establishes policies to control the credit risk exposure. The Company evaluates the credit qualification of
customers and sets the corresponding credit period based on their financial condition the possibility of
obtaining guarantees from third parties credit record and other factors such as current market conditions. The
Company regularly monitors the credit record of customers and for customers with poor credit history the
Company ensures the overall credit risk of the Company to be under control by sending reminders of payment
collection shortening the credit period or canceling the credit period.
(1) Determination criteria for significant increase of credit risk
At each balance sheet date the Company evaluates whether the credit risk of the relevant financial
instruments has significantly increased since the initial recognition. In determining whether credit risk has
increased significantly since the initial recognition the Company considers obtaining reasonable and evidence-
based information at no unnecessary additional cost or effort including qualitative and quantitative analysis
based on the historical data of the Company external credit risk ratings and forward-looking information.Based on a single financial instrument or a portfolio of financial instruments with similar credit risk
characteristics the Company compares the risk of default of the financial instrument on the balance sheet date
with the risk of default on the initial recognition date to determine the change in the risk of default during the
expected duration of the financial instruments.When one or more of the following quantitative and qualitative criteria are triggered the Company
considers that the credit risk of a financial instrument has significantly increased: the quantitative criterion is
mainly that the default probability in the remaining duration has increased by more than a certain percentage on
the balance sheet date than that at the initial recognition; the qualitative criterion is the occurrence of major
adverse changes in the operation or financial condition of the principal debtor the list of early warning
customers etc.
(2) Definition of assets with credit impairment occurred
To determine whether credit impairment has occurred the determination criteria adopted by the Company
are consistent with its internal credit risk management objectives for the relevant financial instruments taking
into account both quantitative and qualitative indicators.In assessing whether a debtor has suffered credit impairment the Company mainly considers the following
factors: whether the issuer or the debtor has experienced major financial difficulties; whether a debtor breaches
the contract such as default or delay in payment of interest or principal; whether the creditor grants concessions
to the debtor that it would not have made in any other circumstances for economic or contractual reasons
related to the debtor's financial difficulties; whether the debtor is likely to become insolvent or undergo other
financial restructuring; whether the financial difficulties of the issuer or debtor cause the disappearance of an
active market for the financial asset; whether a financial asset is acquired or derived a substantial discount that
reflects the fact that a credit loss has occurred.The credit impairment of financial assets may be caused by the combination of multiple events not
necessarily by individually identifiable events.
(3) Parameters for measurement of expected credit loss
Depending on whether there has been a significant increase in credit risk and whether credit impairment
has occurred the Company measures the impairment provision for different assets in terms of expected credit
losses for 12 months or the entire duration respectively. The key parameters for measurement of expected
credit loss include default probability default loss rate and default risk exposure. The Company takes into
account quantitative analysis and forward-looking information of historical statistical data (e.g. ratings of
counterparty types of guarantees and collateral repayment methods etc.) to establish default probability
default loss rate and default risk exposure models.The relevant definitions are as follows:
The default probability refers to the probability that the debtor will not be able to meet its payment
obligations in the next 12 months or throughout the remaining duration.Default loss rate refers to the Company's expectation of the degree of loss from the exposure to a default
risk. Default loss rates vary depending on the type of counterparty the method and priority of recourse and the
collateral. Default loss ratio is the percentage of loss from the risk exposure when the default occurs calculated
on the basis of the next 12 months or the entire duration.Exposure at default refers to the amount to be compensated to the Company in the event of a default in the
next 12 months or throughout the remaining duration. Forward-looking information is involved in the
assessment of significant increases in credit risk and the calculation of expected credit losses. Through historical
data analysis the Company identifies key economic indicators that affect the credit risk and expected credit
losses of various business types.The Company's maximum credit exposure is the carrying amount of each financial asset in the balance
sheet. The Company does not provide any other guarantees that may expose the Company to credit risks.
2. Liquidity risk
Liquidity risk refers to the risk of capital shortage when an enterprise meets its obligation to settle by
delivery of cash or other financial assets. The Company is comprehensively responsible for the cash
management of its subsidiaries including short-term investment of cash surplus and financing of loans to meet
anticipated cash needs. It is the policy of the Company to regularly monitor short-term and long-term working
capital demands and compliance with borrowing agreements to ensure the maintenance of sufficient cash
reserves and readily available marketable securities.
3. Market risk
(1) Foreign exchange risk
The exchange rate risk of the Company is primarily attributable to foreign currency assets and liabilities
held by the Company and its subsidiaries that are not denominated in their recording currency. The Company's
exposure to foreign exchange risks is mainly related to US dollars and Indian rupees. Except the Company that
purchases and sells some materials and products in US dollars its subsidiary TOPBAND INDIA PRIVATE
LIMITED that uses Indian rupees its sub-subsidiary TOPBAND SMART DONG NAI (VIETNAM) Co. Ltd.that uses Vietnamese dongs its sub-subsidiary Topband Germany GmbH that uses Euros its sub-subsidiary
TOPBAND JAPAN Co. Ltd. that uses Japanese yens its sub-subsidiary Q.B.PTE.LTD that uses Singapore
dollars its sub-subsidiary TOPBAND MEXICO S.DER.L.DEC.V. that uses Mexican pesos its sub-subsidiary
TOPBAND SMART EUROPE COMPANY LIMITED S.R.L. that uses Romanian Leu its sub-subsidiary
Tunnu Innovation (Hong Kong) Limited that uses Hong Kong dollars and its sub-subsidiary TUNNU
INNOVATION INC that uses US dollars other major business activities of the Company are settled in RMB.
(2) Interest rate risk
The interest rate risk of the Company is mainly derived from long-term bank loans. Financial liabilities
with floating interest rate expose the Company to cash flow interest rate risks and financial liabilities with fixed
interest rate expose the Company to fair value interest rate risks. The Company determines the relative
proportion of contracts with fixed rate and floating rate based on the prevailing market environment.The Headquarters Financial Department of the Company monitors the interest rate level of the group on a
continuous basis. An increase in interest rates will increase the cost of new interest-bearing debts and interest
expense on the Company's outstanding interest-bearing debt with floating interest rates and will have a material
adverse effect on the Company's financial results to which the management will adjust in a timely manner
based on the latest market conditions.2. Hedging
□ Applicable□ Not applicable
3. Financial assets
□ Applicable□ Not applicable
XIII. Disclosure of fair value
1. Ending fair value of assets and liabilities measured at fair value
Unit: RMB
Ending fair value
Items The second level ofThe first level of fair The third level of fair
fair value Total
value measurement value measurement
measurement
I. Continuous fair value measurement -- -- -- --
(I) Tradable financial assets 646895923.76 314689344.26 961585268.02
1. Financial asset at fair value and
changes through current profits and 646895923.76 314689344.26 961585268.02
losses
(1) Debt instrument investment 645535520.12 645535520.12
(2) Equity instrument investment 314689344.26 314689344.26
(3) Foreign exchange derivatives 1360403.64 1360403.64
(II) Receivables financing 144768938.98 144768938.98
(III) Other debt investment 41269743.53 41269743.53
(IV) Other equity instrument
79622482.00 79622482.00
investments
Total assets continuously measured
688165667.29 539080765.24 1227246432.53
at fair value
(V) Trading financial liabilities 1078049.24 1078049.24
Total liabilities continuously
1078049.24 1078049.24
measured at fair value
2. The basis for determining the market price of continuous and non-continuous first-level fair value
measurement items
For financial liabilities measured at fair value and whose changes are credited to current profit or loss their
fair value is determined mainly based on market prices quoted by the bank.3. Continuous and non-continuous second-level fair value measurement items valuation techniques
adopted and qualitative and quantitative information of important parameters
If there are open market quotations for investments in liability instruments measured at fair value and
whose changes are credited to current profit or loss their fair value is determined based on market prices quoted
by the bank with consideration of liquidity premium.The Company's other debt investments are transferable large-amount certificates of deposit which use
prices of similar or identical assets in inactive markets as the basis for determining fair value.
4. Continuous and non-continuous third-level fair value measurement items valuation techniques
adopted and qualitative and quantitative information of important parameters
For financial liabilities and other equity instrument investments measured at fair value and whose changes
are credited to current profit or loss and for other non-current financial assets measured at fair price and whose
changes are credited to current profit or loss since the operating environment operating conditions and
financial conditions of the invested products or enterprises are free of material changes the Company measures
at the cost of the investment or the most recent transaction price as a reasonable estimate of fair value.The receivables financing of the Company mainly consists of unmatured bank acceptance bills and supply
chain notes receivable. As the bill acceptor's credit status is good and there is no material adverse change in
operating or financial conditions the risk of collection at maturity is expected to be low and the Company
measures by taking the book value as a reasonable estimate of fair value.
5. Continuous third-level fair value measurement items adjustment information between beginning and
ending book value and sensitivity analysis of unobservable parameters
Not applicable.
6. For continuous fair value measurement items if the conversion occurs among different levels in the
current period the reasons for the conversion and the policies for determining the conversion time point
Not applicable.
7. Technical changes in valuation during the current period and the reasons for such changes
Not applicable.8. Fair value of financial assets and financial liabilities not measured at fair value
The financial assets and financial liabilities of the Company measured at the amortized cost mainly include:
money funds notes receivable accounts receivable other receivables short-term borrowings notes payable
accounts payable other payables long-term borrowings due within one year and long-term borrowings.
9. Others
None.XIV. Related parties and related party transactions
1. Profile of parent company of the Company
Proportion of the
Shareholding ratio
Name of parent parent company's
Registered place Nature of business Registered capital of parent company
company voting rights in the
to the Company
Enterprise
Not applicable Not applicable Not applicable Not applicable
Profile of parent company of the Company
Ultimate controller of the Company: The ultimate controller of the Company is Mr. Wu Yongqiang a natural
person. As of June 30 2026 Wu Yongqiang held 17.00% of the Company's shares.The ultimate controller of the Company is Wu Yongqiang.
2. Profile of subsidiaries of the Company
For details of the subsidiaries of the Company refer to Note X.1.
3. Information on the joint ventures and associated enterprises of the Company
See the Note X.3 on key joint ventures or associated enterprises of the Company.Other joint ventures or associated enterprises having related-party transaction in current period or in previous
period to form balance are listed as follows:
Name of joint venture or associated enterprise Relationship with the Company
Dongguan Jujin Plastic Technology Co. Ltd. Associated enterprises of the Company
4. Other related parties
Names of other related parties Relationship between other related parties and the Enterprise
A company substantially controlled by the relative of the
Shenzhen Jizhiguang Electronics Co. Ltd.Company's legal representative
Shenzhen Lianghui Technology Co. Ltd. Shareholding companies of the Company
Shenzhen ORVIBO Technology Co. Ltd. Shareholding companies of the Company
Shenzhen HANSC Intelligent Technology Co. Ltd. Shareholding companies of the Company
Guangdong Zhongchuang Zhijia Scientific Research Co. Ltd. Shareholding companies of the Company
Guangdong Huixin Semiconductor Co. Ltd. Shareholding companies of the Company
Fujian Blue Ocean Digital Energy Technology Co. Ltd. Shareholding companies of the Company
Shenzhen Youbi Technology Co. Ltd. Shareholding companies of the Company
Jiangsu Donghai Semiconductor Co. Ltd. Shareholding companies of the Company
Jiangxi Sarui Microelectronics Technology Co. Ltd. Shareholding companies of the Company
Shenzhen Jizhi Laser Technology Co. Ltd. Shareholding companies of the Company
Dongguan Jujin Plastic Technology Co. Ltd. Shareholding companies of the Company
Shanghai Yidong Power Technology Co. Ltd. Shareholding companies of the Company
Shenzhen Daka Optoelectronics Co. Ltd. Shareholding companies of the Company
Suzhou Legendsemi Technology Co. Ltd. Shareholding companies of the Company
Suzhou Suyu Technology Co. Ltd. Shareholding companies of the Company
Shenzhen Yueran Innovation Technology Co. Ltd. Shareholding companies of the Company
Suzhou Apache Robotics Technology Co. Ltd. Shareholding companies of the Company
5. Related party transaction
(1) Related transactions involving the purchase and sale of goods and the provision and acceptance of
services
List of goods purchased/services received
Unit: RMB
Related Amount Is the Amount
Approved
Related party transaction incurred in the transaction incurred in
transaction limit
content current period limit exceeded prior period
Shenzhen Jizhiguang Electronics Co. Raw
8349431.04 34000000.00 No 9507111.27
Ltd. materials
Shenzhen ORVIBO Technology Co. Raw
3024.00 No
Ltd. materials
Jiangsu Donghai Semiconductor Co. Raw
36500.00 No 35736.27
Ltd. materials
Jiangxi Sarui Microelectronics Raw
No 2250.40
Technology Co. Ltd. materials
Dongguan Jujin Plastic Technology Raw
18805935.54 No 25557609.53
Co. Ltd. materials
Guangdong Huixin Semiconductor Raw
214435.37 No 2665.70
Co. Ltd. materials
List of goods sold/services provided
Unit: RMB
Related transaction Amount incurred in the current Amount incurred in prior
Related party
content period period
Shenzhen ORVIBO Technology
Sales of commodities 598329.23 4481366.31
Co. Ltd.
(2) Relevant entrusted management/contracting and entrusted management/outsourcing
None.
(3) Related lease
None.
(4) Related party guarantee situation
None.
(5) Interbank lending of related parties
□ Applicable□ Not applicable
(6) Asset transfer and debt restructuring of related parties
□ Applicable□ Not applicable
(7) Remuneration of key management personnel
Unit: RMB
Items Amount incurred in the current period Amount incurred in prior period
Remuneration of key management
2844206.00 3369689.97
personnel
(8) Other related transactions
None.
6. Receivables and payables due to related parties
(1) Item receivable
Unit: RMB
Ending balance Beginning balance
Project name Related party ProvisionProvision for Book
Book balance for bad
bad debts balance
debts
Accounts Shenzhen ORVIBO Technology Co.
13366.70 414.37 864938.63 26813.10
receivable Ltd.Financing of Shenzhen ORVIBO Technology Co.
632.62
accounts receivable Ltd.
(2) Payables
Unit: RMB
Project name Related party Ending book balance Beginning book balance
Shenzhen Jizhiguang Electronics
Accounts payable 886220.09 1507208.16
Co. Ltd.Jiangsu Donghai Semiconductor
Accounts payable 16656.20 4411.52
Co. Ltd.Guangdong Huixin
Accounts payable 7836.52
Semiconductor Co. Ltd.Jiangxi Sarui Microelectronics
Accounts payable 2250.40 1991.50
Technology Co. Ltd.Dongguan Jujin Plastic
Accounts payable 12250733.89 14288274.50
Technology Co. Ltd.Dongguan Jujin Plastic
Other account payable 208900.00
Technology Co. Ltd.
7. Commitment of related parties
None.
8. Others
None.XV. Share-based payment
1. General situation of share-based payments
□ Applicable □ Not applicable
Unit: RMB
Granted in Exercised in Released in
the current the current the current Invalidated in the current period
period period period
Grant object category
Nu Nu
Amou Num Amo Amou
mb mb Number Amount
nt ber unt nt
er er
Personnel on key management and technical
positions as well as other business 1031100.00 4219968.33
backbones
Total 1031100.00 4219968.33
Stock options or other equity instruments outstanding at the end of the period
□ Applicable □ Not applicable
Stock options outstanding the at the Other equity instruments outstanding at
end of the period the end of the period
Grant object category Remaining
Range of exercise Range of exercise Remaining period
period of
price price of contract
contract
Personnel on key management and technical RMB 9.46 per
6 and 18 months RMB 9.60/share 6 months
positions as well as other business backbones share
Implementation of the Company's equity incentives for employees
(1) Employee stock ownership plan
On November 6 2024 the Company held the 15th (Extraordinary) Meeting of the 8th Board of Directors
and the 10th (Extraordinary) Meeting of the 8th Board of Supervisors. On November 25 2024 the Company
held the 2nd Extraordinary General Meeting of Shareholders in 2024 in which the Proposal on the Company's
2024 Employee Stock Ownership Plan (Draft) and its Summary and other relevant motions were deliberated
and approved. The actual number of shares subscribed under the Employee Stock Ownership Plan was
5181200 shares with the total amount of RMB 49739520.00 for the shares actual subscribed. The funds for
the Employee Stock Ownership Plan mainly came from the special incentive fund accrued by the Company.After review and approval of the Employee Stock Ownership Plan by the General Meeting of Shareholders of
the Company the shares will be unlocked in two phases 12 months and 24 months after the Company
announces the transfer of the underlying shares to the names given in the Employee Stock Ownership Plan
respectively with 40% of the underlying shares to be unlocked in Phase 1 and 60% in Phase 2. On December
23 2024 the Company received the Letter of Securities Transfer Registration Confirmation issued by the
Shenzhen Branch of CSDC stating that the 5181200 shares of the Company (approximately 0.42% of the
current total share capital of the Company) held in the special securities buyback account of the Company had
been transferred to its account for the 2024 Employee Stock Ownership Plan without trading on December 23
2024.
Refer to Section IV. III of the Semi-annual Report for details.
(2) Stock option incentive plan
Under the authorization of the 2nd Extraordinary General Meeting of Shareholders in 2024 of the
Company the Company held the 16th (Extraordinary) Meeting of the 8th Board of Directors and the 11th
(Extraordinary) Meeting of the 8th Board of Supervisors on December 9 2024 in which the Proposal on
Granting Stock Options to Incentive Objects was deliberated and adopted. It was determined that the grant date
of the stock options under the Incentive Plan shall be December 9 2024 and 32.9 million stock options shall be
granted to 1050 eligible objects. The waiting periods for the stock options granted under this Incentive Plan are
12 months 24 months and 36 months respectively from the date of grant and the percentages of unlocking for
the periods are 30% 30% and 40% respectively.In 2025 1.2299 million stock options became invalid due to the departure of incentive recipients and 9.87
million stock options became invalid due to failure to meet the performance assessment indicators during the
first exercise period.Refer to Section IV. III of the Semi-annual Report for details.
2. Equity-settled share-based payments
□ Applicable □ Not applicable
Unit: RMB
Method for determining the fair value of equity instruments on
Black-Scholes option pricing model
the grant date
Important parameters for fair value of equity instruments on the
Historical volatility risk-free rate of return and dividend yield
grant date
Basis for determining the number of exercisable equity Best estimate made based on the latest available follow-up
instruments information such as changes in the number of vested employees
Reasons for the significant difference between the estimates of
None.the current period and that of the previous period
The accumulated amount of equity-settled share-based payments
94667426.66
is included in capital reserves.Total amount of expenses recognized by equity-settled share-
28129086.74
based payments in the current period
3. Cash-settled share-based payments
□ Applicable□ Not applicable
4. Current share-based payments
□ Applicable □ Not applicable
Unit: RMB
Grant object category Equity-settled share-based payments Cash-settled share-based payments
Management personnel 6740494.53
Salesperson 8486581.88
R&D personnel 10319249.88
Production personnel 2582760.45
Total 28129086.74
5. Modification and termination of share-based payments
None.
6. Others
None.XVI. Commitments and contingencies
1. Important commitments
As of June 30 2026 the Company had no important commitments to be disclosed.
2. Contingencies
(1) Significant contingencies on the balance sheet date
As of June 30 2026 the Company had no significant contingencies to be disclosed.
(2) The important contingencies not required to be disclosed shall be explained as well
No signification contingencies need to be disclosed by the Company.
3. Others
None.XVII. Events after the balance sheet date
None.XVIII. Other important matters
None.XIX. Notes to main items of financial statements of the parent company
1. Accounts receivable
(1) Disclosure by aging
Unit: RMB
Aging Ending book balance Beginning book balance
Within 1 year (inclusive) 2303874159.86 1910977642.43
1-2 years 873140.13 9503741.12
2-3 years 121797.06 1786068.33
Above 3 years 56311.45 2508378.98
3-4 years 0.00 506253.22
4-5 Years 0.00
Above 5 years 56311.45 2002125.76
Total 2304925408.50 1924775830.86
(2) Disclosure by bad debt provision method
Unit: RMB
Ending balance Beginning balance
Category Book balance Provision for bad debts Book balance Provision for bad debts
Proportion Book value Proportion Book value
Amount Proportion Amount Amount Proportion Amount
of provision of provision
Accounts
receivable
with single 474112.76 0.02% 474112.76 100.00% 2288881.21 0.12% 2288881.21 100.00%
provision for
bad debts
Including:
Accounts
receivable
with
2304451295.74 99.98% 54846063.65 2.38% 2249605232.09 1922486949.65 99.88% 49794682.66 2.59% 1872692266.99
provision for
bad debts by
portfolio
Including:
(1) Aging
1767390243.23 76.68% 54846063.65 3.10% 1712544179.58 1569973905.54 81.57% 49794682.66 3.17% 1520179222.88
portfolio
2. Related
party
portfolio
537061052.51 23.30% 537061052.51 352513044.11 18.31% 352513044.11
within the
scope of the
consolidation
Total 2304925408.50 100.00% 55320176.41 2.40% 2249605232.09 1924775830.86 100.00% 52083563.87 2.71% 1872692266.99
Description of bad-debt provision on single basis: Accounts receivable with single provision for bad debts
Unit: RMB
Beginning balance Ending balance
Name
Book balance Provision for bad debts Book balance Provision for bad debts Proportion of provision Reasons for provision
Single provision for bad debts Difficult to recover as2288881.21 2288881.21 474112.76 474112.76 100.00%
estimated
Total 2288881.21 2288881.21 474112.76 474112.76
Description of bad-debt provision on combined basis: Provision for impairment of combined accounts
receivable by aging
Unit: RMB
Ending balance
Name
Book balance Provision for bad debts Proportion of provision
Provision for impairment of combined
1767390243.23 54846063.65 3.10%
accounts receivable by aging
Total 1767390243.23 54846063.65
Description of bad-debt provision on combined basis: Combination of related parties within the scope of
consolidation
Unit: RMB
Ending balance
Name Provision for bad Proportion of
Book balance
debts provision
Related party portfolio within the scope of the
537061052.51
consolidation
Total 537061052.51
(3) Bad debt provision withdrawn recovered or reversed in the current period
Provision for bad debts in the current period:
Unit: RMB
Amount changed in the current period
Beginning
Category
balance Recover or
Ending balance
Provision Write-off Others
reversal
Single provision for bad
2288881.21 116045.86 1930814.31 474112.76
debts
Provision for bad debts
49794682.66 5178206.06 126825.07 54846063.65
by portfolio
Total 52083563.87 5294251.92 2057639.38 55320176.41
(4) Accounts receivable actually written off in the current period
Unit: RMB
Items Amount of write-off
Accounts receivable actually written off 2057639.38
(5) Accounts receivable and contract assets of top five ending balances grouped by debtors
Unit: RMB
Ending balance of Ending balance ofName of unit Ending balance of Proportion to total Ending balance of
accounts contract assets accounts ending balances of bad debt provision
receivable receivables and accounts for accounts
contract assets receivable and receivable and
contract assets provision for
impairment of
contract assets
No. 1 237517298.44 237517298.44 10.30% 7791358.11
No. 2 213087507.00 213087507.00 9.24% 6615128.61
No. 3 118844310.51 118844310.51 5.16% 3692281.94
No. 4 115390187.33 115390187.33 5.01% 3651170.29
No. 5 79329186.63 79329186.63 3.44% 2459204.79
Total 764168489.91 764168489.91 33.15% 24209143.74
2. Other receivables
Unit: RMB
Items Ending balance Beginning balance
Dividends receivable 10000000.00
Other receivables 754001373.47 581416476.95
Total 764001373.47 581416476.95
(1) Interest receivable
□ Applicable□ Not applicable
(2) Dividends receivable
1) Classification of dividends receivable
Unit: RMB
Item (or investee) Ending balance Beginning balance
Topband (Hong Kong) Co. Ltd. 10000000.00
Total 10000000.00
2) Important dividends receivable with aging of over 1 year
□ Applicable□ Not applicable
3) Disclosure by bad debt provision method
□ Applicable □ Not applicable
Unit: RMB
Ending balance Beginning balance
Category
Book balance Provision for Book value Book Provision for Boo
bad debts balance bad debts k
Propo Prop valu
Am rtion Am Pro ortio e
Proportio Am
Amount oun of oun port n of
n ount
t provis t ion provi
ion sion
Provision for bad debts
10000000.00 100.00% 10000000.00
by portfolio
Including:
Related party portfolio
within the scope of the 10000000.00 100.00% 10000000.00
consolidation
Total 10000000.00 100.00% 10000000.00
4) Provision for bad debts accrued recovered or reversed in the current period
□ Applicable□ Not applicable
5) Dividends receivable actually written off in the current period
□ Applicable□ Not applicable
(3) Other receivables
1) Classification of other receivables by nature of amount
Unit: RMB
Nature of payment Ending book balance Beginning book balance
Current accounts 749063606.68 576050233.62
Margin deposit 6082960.06 7326116.10
Borrowing and imprest of employees 2172042.04 1977224.13
Others 746396.77 1406.60
Total 758065005.55 585354980.45
2) Disclosure by aging
Unit: RMB
Aging Ending book balance Beginning book balance
Within 1 year (inclusive) 752782468.93 579872866.09
1-2 years 408356.86 1136585.98
2-3 years 795748.00 810907.48
Above 3 years 4078431.76 3534620.90
3-4 years 651161.80 31702.32
4-5 Years 616792.96 641643.48
Above 5 years 2810477.00 2861275.10
Total 758065005.55 585354980.45
3) Disclosure by bad debt provision method
Unit: RMB
Ending balance Beginning balance
Book balance Provision for bad debts Book balance Provision for bad debts
Category Proportion Book value Proportion Book value
Amount Proportion Amount of Amount Proportion Amount of
provision provision
Provision for bad debts by
758065005.55 100.00% 4063632.08 0.54% 754001373.47 585354980.45 100.00% 3938503.50 0.67% 581416476.95
portfolio
Including:
Aging portfolio 9001398.87 1.19% 4063632.08 45.14% 4937766.79 9304746.83 1.59% 3938503.50 42.33% 5366243.33
Related party portfolio
within the scope of the 749063606.68 98.81% 749063606.68 576050233.62 98.41% 576050233.62
consolidation
Total 758065005.55 100.00% 4063632.08 0.54% 754001373.47 585354980.45 100.00% 3938503.50 0.67% 581416476.95
Description of bad-debt provision on combined basis: Provision for impairment by combination of related parties within the scope of consolidation
Unit: RMB
Ending balance
Name
Book balance Provision for bad debts Proportion of provision
Provision for bad debts by related party
portfolio within the scope of the 749063606.68 0
consolidation
Total 749063606.68 0
Description of bad-debt provision on combined basis: Provision for impairment of combined by aging
Unit: RMB
Ending balance
Name
Book balance Provision for bad debts Proportion of provision
Provision for bad debts by aging portfolio 9001398.87 4063632.08 45.14%
Total 9001398.87 4063632.08
Provision for bad debts based on the general model of expected credit losses:
Unit: RMB
First stage Second stage Third stage
Expected credit loss
Provision for bad debts Expected credit loss for the entireExpected credit loss in Total
for the entire duration duration (credit
the next 12 months
(no credit impairment) impairment
occurred)
Balance as of January 1 2026 1077228.40 2861275.10 3938503.50
Balance as of January 1 2026 in
the current period
Accrual in the current period 125128.58 125128.58
Balance as of June 30 2026 1202356.98 2861275.10 4063632.08
Changes in book balance with significant changes in loss reserves in the current period
□ Applicable□ Not applicable
4) Bad debt provision withdrawn recovered or reversed in the current period
Provision for bad debts in the current period:
Unit: RMB
Amount changed in the current period
Beginning
Category Recover or Reversal or Ending balancebalance Provision Others
reversal write-off
Provision for
3938503.50 125128.58 4063632.08
bad debts
Total 3938503.50 125128.58 4063632.08
5) Other receivables actually written off in the current period
□ Applicable□ Not applicable
6) Other receivables of top five ending balances grouped by debtors
Unit: RMB
Ending
Proportion to total balance of
Nature of
Name of unit Ending balance Aging ending balances of provision
payment
other receivables for bad
debts
Current Within 1
Shenzhen Topband Battery Co. Ltd. 300974819.91 39.70%
accounts year
Huizhou YAKO Automation Technology Current Within 1
156067415.87 20.59%
Co. Ltd. accounts year
Shenzhen YAKO Automation Current Within 1
75938303.98 10.02%
Technology Co. Ltd. accounts year
Current Within 1
Shenzhen Topband Investment Co. Ltd. 49128280.00 6.48%
accounts year
Shenzhen Topband Digital Energy Co. Current Within 1
38671053.99 5.10%
Ltd. accounts year
Total 620779873.75 81.89%
7) Included in other receivables due to centralized management of funds
□ Applicable□ Not applicable
3. Long-term equity investment
Unit: RMB
Ending balance Beginning balance
Items Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
Investment in
4324287784.41 4324287784.41 4319265674.29 4319265674.29
subsidiaries
Investment in
associated
18259203.91 12433655.05 5825548.86 18259203.91 12433655.05 5825548.86
enterprises and
joint ventures
Total 4342546988.32 12433655.05 4330113333.27 4337524878.20 12433655.05 4325091223.15
(1) Investment in subsidiaries
Unit: RMB
Ope Changes in increase or decrease End
ning in the current period ing
bala De bala
nce Ad cr nce
of dit ea of
pro Prov
Beginning balance io se
pro
Ending balance
Investee visi isio visi
(book value) nal in n for (book value)on in in Others on
for impve ve for
imp airmst st imp
air entme m air
men nt en men
t t t
Shenzhen Topband Software
27373665.61 522468.94 27896134.55
Technology Co. Ltd.Shenzhen Topband Battery Co. Ltd. 630587688.39 1023590.34 631611278.73
Shenzhen Topband Automation
36851797.55 125601.51 36977399.06
Technology Co. Ltd.Chongqing Topband Industrial Co.
211800622.41 -13463.89 211787158.52
Ltd.Topband (Hong Kong) Co. Ltd. 667071500.00 667071500.00
Huizhou Topband Electrical
1039820975.83 1723930.53 1041544906.36
Technology Co. Ltd.Ningbo Topband Intelligent Control
671505657.09 194673.07 671700330.16
Co. Ltd.Shenzhen Allied Control System Co.
128885781.86 221877.36 129107659.22
Ltd.Shenzhen Meanstone Intelligent
10000000.00 10000000.00
Technology Co. Ltd.TOPBAND INDIA PRIVATE
195026748.97 195026748.97
LIMITED
Shenzhen YAKO Automation
515787286.35 311194.93 516098481.28
Technology Co. Ltd.Shenzhen Topband Investment Co.
89054806.08 89054806.08
Ltd.Shenzhen Topband Supply Chain
5000000.00 5000000.00
Services Co. Ltd.Shenzhen Senxuan Technology Co.
10035325.03 10035325.03
Ltd.Topband (Qingdao) Intelligent
30000000.00 30000000.00
Control Co. Ltd.Shenzhen Topband Motor Co. Ltd. 14203853.22 912237.33 15116090.55
Huizhou Topband Supply Chain
20000000.00 20000000.00
Service Co. Ltd.Shenzhen Jingfei Investment Co. Ltd. 1000000.00 1000000.00
Shenzhen Topband Digital Energy
15259965.90 15259965.90
Co. Ltd.Total 4319265674.29 5022110.12 4324287784.41
(2) Investment in associated enterprises and joint ventures
Unit: RMB
Changes in increase or decrease in the
current period
Pr
Adj
o
ust
Profit vi
me Decla
s and Ot si
nt ration
De losses her o
to of
Beginning Opening balance Add cre on ch noth distrib Ending Ending balance
Investment unit balance (book of provision for itio ase invest an foer ution Ot balance (book of provision for
value) impairment nal in ment ge rco for he value) impairment
inve inv recog s i
mp cash rs
stm est nized in m
reh divide
ent me under eq p
ens nds or
nt equity uit ai
ive profit
metho y r
inc s
d m
om
e
e
nt
I. Joint venture
II. Associated enterprises
Shenzhen Daka Optoelectronics
5825548.86 5825548.86
Co. Ltd.Tai'an Yuchengxin Power
12433655.05 12433655.05
Technology Co. Ltd.Subtotal 5825548.86 12433655.05 5825548.86 12433655.05
Total 5825548.86 12433655.05 5825548.86 12433655.05
4. Revenue and operating cost
Unit: RMB
Amount incurred in the current period Amount incurred in prior period
Items
Income Cost Income Cost
Main business 3149268301.44 2566845118.88 2953034575.87 2410249787.06
Other business 159823655.78 90418950.65 77782548.41 34362423.44
Total 3309091957.22 2657264069.53 3030817124.28 2444612210.50
5. Investment income
Unit: RMB
Items Amount incurred in the current period Amount incurred in prior period
Long-term equity investment income
10000000.00
accounted for using the cost method
Gains/losses on foreign exchange
2854268.91 1239711.00
derivatives
Income of wealth management products 7559884.48 2190350.62
Total 20414153.39 3430061.62
6、Others
None.XX. Supplementary information
1. Schedule of current non-recurring profit and loss
□ Applicable □ Not applicable
Unit: RMB
Items Amount Note
Non-current assets disposal profit and loss -2596083.06
Government grants credited to income statement (except for government grants that are closely
related to the normal operation of the Company comply with national policies and regulations
8986523.49
enjoy in accordance with determined criteria and have a continuous impact on the profit and loss
of the Company)
Profits and losses due to fair value changes arising from the financial assets and liabilities held by
the non-financial business as well as the profits and losses arising from the disposal of financial
13314372.05
assets and liabilities except for the effective hedging business related to the normal business of
the Company
Other non-operating income and expenses other than those mentioned above 213563.06
Minus: amount affected by income tax 2352029.98
Amount affected by minority shareholders' equity (after tax) 896.23
Total 17565449.33 --
Details of other items of profits and losses that conform to the definition of non-recurring profit and loss:
□ Applicable□ Not applicable
None.Explanation of defining the non-recurring profit and loss items listed in the Explanatory Announcement No. 1
on Information Disclosure for Companies Offering Their Securities to the Public – Non-recurring Profit and
Loss as recurring profit and loss items
□ Applicable□ Not applicable
2. Return on equity and earnings per share
Earnings per share
Weighted return on
Profits of the Reporting Period
average equity Basic earnings per share Diluted earnings per share
(RMB/share) (RMB/share)
Net income attributable to the
ordinary shareholders of the 1.86% 0.10 0.10
Company
Net profit attributable to the
ordinary shareholders of the
1.60% 0.09 0.09
Company after deduction of non-
recurring profit and loss
3. Differences in accounting data under domestic and foreign accounting standards
(1) Differences in net profit and net assets between financial reports disclosed in accordance with
International Accounting Standards and those disclosed in accordance with PRC GAAP at the same time
□ Applicable□ Not applicable
(2) Difference between the net profit and net assets in the financial reports disclosed in accordance with
both foreign accounting standards and Chinese accounting standards at the same time
□ Applicable□ Not applicable
(3) Reasons for differences in accounting data under domestic and foreign accounting standards. If the
data audited by an overseas audit institution is adjusted for differences the name of the overseas audit
institution shall be indicated
4. Others
None.
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